Lenders back out of ‘Boner 4ever’ financing amid market uncertainty

The infamous “Boner 4ever” and “Forever Boner” graffiti tags that adorn the North Philadelphia Beury Building will live on for an undetermined amount of time after the lenders involved in the $70 million redevelopment project backed out at the eleventh hour, according to developer Shift Capital.

Though the 14-story art deco building is probably best known for its love-it-or-hate-it graffiti, its development after decades-long abandonment was welcomed by area residents. News that the project is on hold will most certainly be seen as a blow to those hoping to jump-start investment in the area.

Shift acquired the property at 3701 N. Broad St. in 2012 with plans to remediate asbestos and other hazards and transform it into apartments and commercial space. Shift later changed direction and adopted plans to turn the property into a Marriott hotel.

Shift has focused on projects that can improve economically disadvantaged neighborhoods, said principal Nancy Gephart. Having a lender back out right as everyone was about to sign the dotted line is a new experience for the company.

“We were very much in the throes of the closing process,” Gephart said. The lenders “had told us kind of over and over again for months that they were on board and they understood the project, then essentially called us one day and said that they were walking away.”

The property has undergone $1 million in environmental remediation and more recently $4.6 million in selective demolition, structural reinforcements, and a building cleanout.

With community support and a collection of partners, including the Philadelphia Industrial Development Corp., Shift had found a slew of financial support coming from sources including state and federal historic preservation tax credits, new market tax credits, and a Redevelopment Assistance Capital Program grant from the state. The lenders, said Gephart, were a final piece in reimagining the Beury Building.

Shift was looking to take on $23 million in debt for the project, which Gephart said is not a lot for a project of that size, but lenders were wary about providing a loan in an area untested for hospitality. Market conditions, including steady interest rates and high construction costs, didn’t help.

The ambitious project aimed to give the commercial corridors nearby an economic boon, while meeting an untapped hospitality need by serving the 11 hospitals and universities within three miles of the site. Some of the closest options for lodging are in Center City and City Line Avenue, but some people visiting a hospital or university stay as far as Camden, said Gephart.

In addition to construction jobs, the project is slated to create about 100 jobs when complete.

While some see the Beury Building as a metaphorical lighthouse covered in iconic graffiti, other neighbors have long seen it as an eyesore and the bubble letters as something far from art.

While the project is not moving forward in the current economic climate, Gephart said Shift and partners still believe in reimagining the Beury Building. The Marriott, she said, has renewed its franchise agreement with Shift multiple times amid pandemic-related delays and remains invested in moving forward.

“The momentum is still there,” Gephart said. “I don’t want people to get the impression that people have abandoned this deal. That’s very much not the case.