Renovations to North Philadelphia's historic Beury Building, known for its irreverent "Boner 4ever" graffiti, have been put on hold, because a key lender backed out of financing the $70 million plan to turn it into a Marriott hotel.
The 14-story Art Deco building at the intersection of Broad Street, Germantown Avenue and Erie Avenue is owned by Shift Capital, whose development projects focus on creating equitable neighborhoods in the city. Constructed between 1926 and 1933, it once served as the National Bank of North Philadelphia, led by Charles H. Beury, but it has been vacant for about 50 years.
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Shift Capital acquired the high-rise in 2012 and initially planned to convert it into affordable and market-rate housing. During the COVID-19 pandemic, those plans were revised in favor of restoring the building into a 172-room hotel with ground-level restaurants and a rooftop bar. The developer had separate plans to construct a neighboring, five-story residential building as part of a push to extend Broad Street's revitalization north of Temple University's campus. The hotel project was presented as filling a hospitality void in that section of the city.
But Shift Capital now says it is unable to proceed with the project, because lenders grew wary of investing in that area of North Philadelphia, particularly at a time when high interest rates have made financing large developments more risky.
"The project is on pause as we wait for the macro-environment to improve," Shift Capital CEO Brian Murray wrote in a statement. "High interest rates and banks' nervousness to commit to neighborhoods like Broad & Erie are a setback that we are dealing with. We stay committed to the project and the community."
Several million dollars of work already have been done inside the Beury Building, including environmental remediation and structural reinforcement. One piece of the plan had included constructing an eight-story addition to the rear side of the building's east wall.
Shift Capital principal Nancy Gephart told WHYY a key lender withdrew $23 million for the project, making it impossible to move forward at this time.
"If someone came to us and said, 'Hey, we want to give you $23 million of debt,' we would take it and run with it as fast as we can (to build the project)," she said.
Since the pandemic, labor shortages and rising insurance rates for construction projects have played roles in stalling large projects like the one at the Beury Building, BisNow reported. Shift Capital said its insurance costs have jumped between 25-50% in the last few years.
Initial funding for the hotel plan came from multiple sources, including a $2 million grant from the Pennsylvania Redevelopment Assistance Capital Program and $2.5 million from Marriott. The historic building also qualified for preservation tax credits. Shift Capital had signed a community benefits agreement with a group of neighborhood nonprofits to ensure that minority-owned contractors would make up more than one-third of the construction team.
The bank building was designed by architect William Harold Lee and later renamed after Beury, the bank's first president and a former Temple University president. The building was added to the National Register of Historic Places in 1985.
The vertical "Boner 4ever" and "Forever Boner" tags scrawled on the property's north and south walls are the work of two different graffiti artists, "Boner" and "Forever," whose work earned them a place in Philadelphia's urban lore. The decline of the building coincided with years of disinvestment in Hunting Park and Nicetown-Tioga, which are among Philadelphia's most disadvantaged neighborhoods.
Shift Capital has been a partner on multiple developments in Kensington over the years, including a mixed-use project at the corner of Allgheny and Kensington avenues and the repurposing of a building on Frankford Avenue that will be the home of an alternative high school.
For the hotel project at the Buery Building, Shift Capital had partnered with the Wankawala Organization. The hospitality group's projects in Philly include the Fairfield Inn & Suites Marriott on South 13th Street in Center City and the attached Libertine restaurant.
In addition to the Beury Building, Shift Capital owns another former bank building on the opposite side of Broad Street that has yet to be redeveloped.
During the early phases of work on the Beury Building, the developer left the infamous graffiti untouched. For the foreseeable future — but maybe not forever — it now looks like the tags will remain.