news about the ACME building in Brewerytown - PhillyBlog

merkin · #1 (**permalink**) 07-29-2005, 07:58 PM

some new info on the old acme building and other possibilities

Quote:

Developer now thinks dot-com
A long-vacant building on 30th Street near Girard Avenue
is being marketed as a center for Internet companies.
Henry J. Holcomb
The Philadelphia Inquirer, July 10, 2000

For three years, a veteran developer has been frustrated in his efforts to provide a supermarket and clean up a blighted area between the Fairmount and Brewerytown sections of the city.

The empty hulk of the former distribution center for the Acme grocery chain, looming over the neighborhood, has frightened away potential retail tenants despite considerable effort by the developer, Slavko Slavko Brkich, and city officials.

The project still lacks financing, and no deals have been signed. But there are signs that the booming growth of the Internet might come to their rescue. Brkich and the city believe they will finally get the project moving this summer.

As it turns out, the old distribution center, empty since 1993, could now be a hot property in the emerging dot-com world.

The six-story building, on 30th Street just north of Girard Avenue, could become what is known in real estate parlance as a "carrier hotel," experts say. It could become a place where Internet-related companies set up and maintain the equipment that makes their systems work and links them to the World Wide Web.

These buildings are heavily fortified and equipped with security devices that check palm prints as well as identification cards -- as well as literally trap intruders. With their multiple backup power systems, they are the nerve centers of the emerging world of global electronic commerce and telecommunications.

Brkich bought the old building from Acme three years ago, and has invested $2.5 million in it, including the purchase price.

"Normally I would develop it myself, but I realize my limitations," Brkich said. "I have no proven track record in this kind of high-tech development. The telecom world is a big boys' game."

So he has retained Jonathan Stavin, a vice president of the Binswanger Companies, to find a buyer or development partner who could spend the millions of dollars needed to turn the old building into a carrier hotel.

Looming hulk on N. 30th St. looks prettier in an Internet age
If that happens, Brkich said, he would be able to finally lure retail tenants to adjacent property, which he also owns. This would please the city and residents who have been working to get a new grocery since the neighborhood's Shop 'n Bag, at 27th and Girard, closed several years ago.

The demand for carrier hotels has already transformed the old North American Building at 401 N. Broad St. into one of the most valuable buildings in Center City, Stavin said.
Its one million square feet are fully leased, and at much higher rates than more glamorous office buildings such as the 58-story One Liberty Place command.

Other carrier hotels now under construction are breathing unexpected new life into old buildings at 833 Chestnut St., 440 N. Broad St. and 1500 Spring Garden St.

When Brkich bought the 570,000-square-foot Acme building and its 10-acre site three years ago, nobody else wanted it. In fact, he didn't want it either, but he had to take it to get adjacent property for retail development.

He initially mothballed the distribution center, thinking he might turn it into an outlet mall once the surrounding area had been improved.

Then Brkich began reading about carrier hotels, here and in New York City, and he started asking questions. What must buildings have to become to be attractive to dot-corn companies?
High ceilings, strong floors, and access to huge amounts of electricity from two independent sources, he was told.

"This building's got high ceilings and strong floors, and enough electricity to run a steel mill," he recalled thinking.

What else? Access to fiber-optic cables, he was told. Where are those? They usually follow railroad tracks, he was told. He explored the railroad tracks that ran alongside the building, and discovered posts indicating the presence of fiber-optic cables.

Then he went to New York, and met with Kenneth Pliska of Highland Associates. This architectural and engineering firm designed the nation's first carrier hotel in 1987, in the old Western Union headquarters at 60 Hudson St. in New York.

Pliska said last week that he visited the Acme building and found that, although it needed a lot of work, "it had a good deal of potential."

It could become one of those dot-corn buildings that "command great rents from tenants that will never move," he said.

In addition to access to fiber-optic cable from five major carriers, it has good line of sight from its roof to other carrier hotels and Center City buildings.

That is important because "a number of carriers rely on wireless communication for backup should they lose the ground connection," Pliska said.

If it turns out that he is, indeed, owner of a hot property, Brkich, 52, will not crow. "I'd like to stand tall and say it was my idea, but in development luck is a major factor, and I got lucky," Brkich said.

This would be by far his biggest project. He came to the United States from Zagreb, Croatia, in 1973, to work as a tool-and-die maker. He bought a fixer-upper on Spring Garden Street in Fairmount, and remodeled it himself after work. .

A friend liked his work, and offered to buy the building. Brkich sold it, and bought another, and fixed it up. Again a buyer offered a good price.

"We moved seven times in 31/2 years," he said. "I finally realized I was making more money remodeling houses after work than during the day."

Thus began his development career. He initially went into North Philadelphia "where there was no competition." For years, he was known as Slavko Slavko -- he only recently began using his surname.

Eventually he developed a track record, and was able to get financing to build buildings.

In all, he estimated that he has done $30 million worth on projects, most in North Philadelphia. He proudly said that he has given many neighborhoods brightly lit and attractive retail stores for the first time in generations.

The Acme site was approved in 1998 for tax-increment financing when the project was purely retail. His revised plan would have to go before City Council and the school board in the fall.

Under that program, a portion of the new taxes generated by the project -- above those now being paid -- could be used to repay the debt over the next 20 years.

Other public assistance is possible, Said Robert Fina, senior vice president of the Philadelphia Industrial Development Corp., the city's economic-development agency.

What Brkich proposes to build "'would have a huge impact on the city," Fina said. "It would expand the growing Art Museum area residential and commercial community north and east."

It would be a catalyst for drawing the dot-com generation back to the city, providing new housing opportunity and expanded social amenities in the popular Fairmount section, Fina said.

Clorise Winn, acting deputy city commerce director, said the city has the tools to clean up pockets of abandoned housing over a several block area between Brkich's project and Fairmount.

She said major supermarket chains and Kmart have expressed interest in the area -- if the Acme building can be revived and surrounding blight removed. Home Depot is also considering the area for a prototype urban store, she said.

But there are still problems to be overcome.

Some believe that the popularity of huge dot-com centers might be short-lived. David M.M. Taffet, president of MeridianTelesis L.L.C., for example, sees a trend toward putting Internet-related facilities in smaller, secure buildings that would be less obvious targets for cyber-terrorists.

His firm will open such a center later this year in the University City Science Center's Port of Technology in West Philadelphia.

Pliska, designer of the first carrier hotel, disagrees.

"As much competition as there is in this industry they need to be close to each other to provide backup traffic and better rates for transferring calls between companies," Pliska said.

"When one company needs to connect to the service of another to reach an area where it is not strong, it is easier to go between floors than lay cable several miles."

Scoats · #2 (**permalink**) 07-30-2005, 08:44 AM

"The Philadelphia Inquirer, July 10, 2000"

New info?

Jayfar · #3 (**permalink**) 07-30-2005, 09:07 AM

Quote:

Originally Posted by Scoats

"The Philadelphia Inquirer, July 10, 2000"

New info?

What's more I believe several other carrier hotel projects have since fallen through, such as one that was planned for the Inquirer building's annex. 401 N. Broad is the granddaddy of Philadelphia carrier hotels, but I don't think it is fully leased at this time. And plans for 1500 Spring Garden (former Smith Kline bldg.) I think were scaled back somewhat. The date of that article is just months before the dot.bomb meltdown. Carrier hotels are essential to ISP and CLEC telco businesses, but with the consolidation that's occured since 2000 there's not a huge demand for more of them.

For instance my employer had space on 2 different floors of 401 N. Broad in 2001. About a year later, after we were acquired by another regional ISP, we consolidated into our acquirer's space there. Then that company went Chapter 11 and has since moved into the space of the NC-based CLEC that bought the major parts of our smoking ruins at bankruptcy auction.

Obligatory tangent - here's the National Register Of Historic Places nomination form for 401 N. Broad, built as the Terminal Commerce Building by the Reading Railroad in 1929.

http://www.arch.state.pa.us/pdfs/H097510_01B.pdf

Jayfar · #4 (**permalink**) 07-30-2005, 10:07 AM

This more recent City Paper article mentions in passing current plans to convert the ACME warehouse into 200 units of housing:

http://citypaper.net/articles/2005-04-28/cb3.shtml

The article is primarily about the ubiquitous Al Alston's opposition to Brewerytown residential development.

MarconiParkRez · #5 (**permalink**) 07-30-2005, 10:19 AM

Oh crap I smell housing project will be erecting soon.

Dave · #6 (**permalink**) 07-30-2005, 02:16 PM

"emerging dot-com market" :lol:

KByrd · #7 (**permalink**) 08-01-2005, 11:07 AM

The developers of 1500 Spring Garden didn't give up on renovating
the building(which was finished earlier this year). They did a beautiful
job and painted the outside the distiinctive "yellow" which
is the color it was in the old SKF days.

Although they were bitten by the dot-com crash, 1500 Spring Garden
has attracted at least 3 tenants(Independence Blue Cross is one).

401 N. Broad has had an "available" sign on it for years although,
as far as I know, Sungard DR is still in there. I see people going
in and out so there are definitely people who work inside.

Jayfar · #8 (**permalink**) 08-01-2005, 11:48 AM

Quote:

Originally Posted by KByrd

The developers of 1500 Spring Garden didn't give up on renovating
the building(which was finished earlier this year). They did a beautiful
job and painted the outside the distiinctive "yellow" which
is the color it was in the old SKF days.

Although they were bitten by the dot-com crash, 1500 Spring Garden
has attracted at least 3 tenants(Independence Blue Cross is one).

401 N. Broad has had an "available" sign on it for years although,
as far as I know, Sungard DR is still in there. I see people going
in and out so there are definitely people who work inside.

Sungard is the largest tenant and I think they control more than half the 401 N. Broad space. Still other ISPs and telcos with space there too including my employer. I think we have an entire floor. Interestingly, the company whose name has graced the building in recent decades, North American Publishing, moved at least their data facilities to 1500 Spring Garden several months ago.

I recall one of the architects on this board last year mentioned that the 401 building is to have a full historic restoration of the lower floor facade (obviously the entryway and signage on the first floor is not the original). Hopefully that's still in the works.