Renovations at North Philadelphia’s historic Beury Building, known for its irreverent “Boner 4ever” graffiti, have been put on hold because a major lender has pulled out of financing a $70 million plan to convert the building 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. Built between 1926 and 1933, the building once served as the National Bank of North Philadelphia under the leadership of Charles H. Beury, but 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 and the building was converted into a 172-room hotel with ground-floor restaurants and a rooftop bar. The developer had separate plans to build an adjacent five-story residential building as part of an effort to continue the revitalization of Broad Street north of the Temple University campus. The hotel project was presented as filling a hospitality gap in that part of the city.
But Shift Capital now says it cannot pursue the project because lenders are wary of investing in this area of North Philadelphia, especially at a time when financing large construction projects has become riskier due to high interest rates.
“The project is on hold while we wait for the macro environment to improve,” wrote Brian Murray, CEO of Shift Capital, in a statement. “High interest rates and banks’ nervousness about getting involved in neighborhoods like Broad & Erie are a setback we are dealing with. We remain committed to the project and the community.”
Several million dollars’ worth of work has already been done inside the Beury building, including environmental remediation and structural strengthening. Part of the plan called for the construction of an eight-story addition on the rear of the building’s east wall.
Shift Capital CEO Nancy Gephart told WHYY that a major lender pulled $23 million from the project, making it impossible to move forward at this time.
“If someone came to us and said, ‘Hey, we want to give you a $23 million loan,’ we would take it and get started as quickly as possible (to implement the project),” she said.
Since the pandemic, labor shortages and rising insurance premiums for construction projects have helped stall major projects like the Beury Building, BisNow reported. Shift Capital said its insurance costs have risen 25-50% in recent years.
Initial funding for the hotel plan came from several sources, including a $2 million grant from the Pennsylvania Redevelopment Assistance Capital Program and $2.5 million from Marriott. The historic building was also eligible for historic preservation tax credits. Shift Capital had signed a community service agreement with a group of neighborhood nonprofits to ensure that minority contractors would make up more than a 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 former president of Temple University. The building was added to the National Register of Historic Places in 1985.
The vertical “Boner 4ever” and “Forever Boner” lettering on the building’s north and south walls are the work of two different graffiti artists, “Boner” and “Forever,” whose work carved a place for themselves in Philadelphia’s urban culture. The building’s demise coincided with years of disinvestment in Hunting Park and Nicetown-Tioga, two of Philadelphia’s poorest neighborhoods.
Shift Capital has partnered on several construction projects 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 to include an alternative high school.
Shift Capital partnered with the Wankawala Organization for the hotel project in the Buery Building. The hotel 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 still needs to be renovated.
During the early stages of construction on the Buery Building, the developer left the infamous graffiti untouched. For the foreseeable future—but perhaps not forever—the tags will likely remain.
