Transforming two of Philly’s industrial relics proves empty offices can live again

This month marks the 50th anniversary of America’s oil crisis, which began when Middle Eastern producers cut off the supply of cheap crude in response to the West’s support for Israel during the Yom Kippur war. Almost overnight, the price of gas and heating oil quadrupled. The images from that chaotic time — multi-block lines at filling stations, a darkened Times Square — remain etched in our national consciousness.

The embargo didn’t just reset the global order; it had a profound local impact, one that we are still living with today. As the cost of running Philadelphia’s drafty, inefficient, red-brick factory buildings soared, businesses began moving their operations to new plants, first in the suburbs and Southern states, then overseas.

Although the exodus started well before the embargo, the oil shocks turbocharged the deindustrialization of Philadelphia. You could practically see the lights winking out across North Philadelphia and the Delaware waterfront as one factory after another shut down. In the decade after the embargo, 140,000 jobs vanished.

Philadelphia’s economy is very different today. City residents are far more likely to work in a medical lab or restaurant kitchen than on a factory floor.

As for the vacant factories, which still tower like feudal castles over the city’s rowhouse neighborhoods, they, too, have been reinvented. Dozens of industrial zombies have found new life as residential buildings, often with names that refer to their former function such as the Chocolate Works and the Button Factory. Robert Powers, a preservation consultant, estimates that his company has helped developers repurpose about 300 industrial buildings since the late ‘90s by securing federal tax credits for their projects.

What remains now are the hard cases: cavernous power plants and foundries, with Rubik’s Cube floor plans, or no floors at all; buildings so far gone they are barely recognizable, yet too substantial to justify the expense of demolition.

So let’s hear some applause for the development teams that took on the toughest of those hard cases, the Peco power plant next to Fishtown’s Penn Treaty Park and the sprawling F.A. Poth Brewery at 31st and Jefferson. After decades of standing vacant, both are about to become thrumming hubs once again.

Yes, both projects include apartments, but you can’t exactly call them apartment buildings. Because the structures are so vast, the developers and architects were forced to devise creative uses for all that empty space, especially the windowless areas deep inside the buildings.

The 500,000-square-foot power plant, now called the Battery, should really be thought of as a “lifestyle campus,” said developer Dean Adler of Lubert-Adler. The waterfront site will eventually include a hotel, banquet hall, offices, concert venue, restaurant, wellness center and separate apartment building. While Poth’s list isn’t as extensive, its developer, MM Partners, had to get creative to fill the 19th-century brewhouse, which occupies a full block in Brewerytown, a neighborhood named for its once-dominant industry.

Their efforts took years. I first visited the two buildings before the pandemic, when they were in ruins. Poth had no roof. The Peco plant was already famous for being used as the set for the dystopian scenes in 12 Monkeys — back in 1995. Since both buildings are concrete structures, with foot-thick walls, how would the architects bring plumbing, ventilation and light into their deepest recesses?

I returned this fall just as tenants were starting to move into the apartments and was struck by the ingenious solutions developed by the architects — Strada Architecture at the Battery, Marshall Sabatini Architecture at Poth. Both buildings have been beautifully restored without losing their industrial souls.

At the Battery, a stunning Beaux-Arts structure that resembles a grand train station, Strada carved apartments into what were once giant coal storage bins and boiler houses. They arranged living rooms around oddly placed columns, incorporated catwalks into the double-height spaces, and sneaked light into windowless bedrooms. Hardly any two apartment floor plans are the same. On the rooftop, the plant’s colossal smokestacks have been painted a pearly gray, making them look like an arcade of classical columns. But now they serve as cabanas for the Battery’s pool deck.

The tour took me into the dark heart of the Battery, where Strada’s Aaron Bell and Chris Kenney had installed a basketball court, coworking space, and auditorium. As I struggled to get my bearings in those windowless spaces, I experienced a small epiphany. Although the concrete power plant was designed in 1917, it shares some key features with Market Street’s modern trophy towers, which are beginning to empty out as more people work from home and employers downsize.

Those high-rise offices also have massively wide floors that make them difficult to reuse for other purposes. Right now, cities are deeply concerned that these glass-and-steel skyscrapers could sit empty for decades, just as their obsolete brick factories did. But these two success stories show we needn’t lose hope. Our postindustrial conversions can be a model for salvaging our post-pandemic building surplus.

Philadelphia actually has experience in turning obsolete office towers into apartments. In the late ‘90s, after the city began offering tax incentives for conversions, more than a dozen skyscrapers were turned into housing. But nearly all involved early-20th-century buildings, which tend to have tiny floor plates, so developers didn’t have to worry about wasted space in the center.

After World War II, however, corporate tenants began demanding buildings with ever-larger footprints so they could fit all their employees on one floor. Converting such bulky high rises to apartments won’t be financially feasible unless their owners can figure out a way to monetize the vast interior expanses.

We’re already seeing a greater tolerance for windowless bedrooms in those locations. Because of the challenges of laying out apartments at the Battery, many bedrooms are pushed to the rear of the space and outfitted with glass walls, so that they can capture light from the living room.

These units are practically bright compared with apartments arrayed along an interior courtyard in what used to be the boiler house. Their only light comes from the sliding doors on an exterior deck. Strada also used something called “daylight balancing skylights” to perk up the completely windowless amenity spaces. The fake sunlight isn’t ideal, but better than regular lighting.

Poth, which was designed by the prolific brewery architect Otto C. Wolf in 1870, had things a bit easier. Because the building is just four stories, renovation architect John Marshall was able to insert light wells, dividing the massive floor plate into three distinct zones. Even so, there was still so much excess interior space that the hallways are 12 feet wide, double the usual width.

Developer David Waxman made the most of the situation by setting up cozy lounge areas in the corridors and decorating the wide spaces with vintage art from his personal collection. Tenants sometimes park their strollers and bicycles in the hallways, giving them the feel of a neighborhood street. Waxman, who has made a specialty of converting difficult industrial buildings, has previously used wasted interior spacefor self-storage, golf simulation rooms, and play areas.

“With these buildings, you know the gross-to-net isn’t going to be great. But if you buy the building at the right price, you can make it work,” Waxman explained. He said he spent $42 million on the Poth conversion, which works out to an impressively low $200 square foot cost.

Adler echoed that view. His firm paid $5 million for the Peco plant, which comes with a six-acre parking lot. In contrast, Adler told me, a developer recently paid $7 million for a much smaller site in the neighborhood.

Still, to offset the enormous cost of making the Battery habitable, he tapped into a long list of government incentives. Like Waxman, he took advantage of the federal government’s historic tax credit program, which was introduced in 1976 just as hundreds of factories were shutting down across the country. The credit enabled Adler to offset 20% of his construction costs. His company was also able to find tenants for a boutique office space after the state declared the site a Keystone Opportunity Zone, a designation that dramatically reduces corporate taxes.

Still, the cost of restoring all that crumbling concrete was substantial: $150 million for construction alone. To qualify for the historic tax credits, the Battery’s contractor, Fastrack Construction, had to painstakingly re-create hundreds of dentil moldings around the cornice. Adler still isn’t sure how he will use the most magnificent space, the skylit turbine hall, although he is developing plans for a health club he’s dubbed “the Fieldhouse.”

One of the nice things about the Battery is how it welcomes the public. Lubert-Adler has worked with the Delaware River Waterfront Corp. to continue the river trail through the property from Penn Treaty Park. The path will pass under a romantic archway that is part of a structure once used for storing ash. Adler is putting the finishing touches on a restaurant that will be accessible from the trail. And he is determined to bring Louis Kahn’s celebrated floating concert stage to the property, once he gets approvals from the U.S. Army Corps of Engineers.

Powers, the preservation consultant, says he has noticed an uptick in interest in converting difficult commercial buildings into apartments. It’s not just factories and offices. Recently, investors called to ask him about the Wanamaker Building near City Hall.

Sprawling across an entire city block, the two million-square-foot building was once the world’s largest department store. While the upper floors were converted to offices in 1988, it has been losing tenants, and the building is in receivership. It’s not too soon to start thinking of creative ways to reuse the next generation of obsolete buildings.