Committee on Financial Hardship — Mar 5, 2008

REPORT OF THE COMMITTEE ON FINANCIAL HARDSHIP PHILADELPHIA HISTORICAL COMMISSION 5 MARCH 2008 ROOM 578, CITY HALL SAM SHERMAN, CHAIR PRESENT Sam Sherman, Chair David Amburn John Haak, City Planning Commission Scott Wilds, Office of Housing & Community Development Jonathan Farnham, Acting Historic Preservation Director Jorge Danta, Historic Preservation Planner II ALSO PRESENT Matthew McClure, Ballard Spahr Andrews & Ingersoll, LLP George Thomas, Civic Visions Katherine E. Levins, Director of Government Affairs, Temple University Health System Craig Menta, Chief Financial Officer, Temple University Health System Scott J. Compton, Project Manager, Entech John R. Sloan, Director of Facilities Management, Episcopal Hospital Kathleen Barron, Executive Director, Episcopal Hospital CALL TO ORDER Mr. Sherman called the meeting to order at 9:00 a.m. Messrs. Amburn, Haak, and Wilds joined him on the Committee. 100 E. LEHIGH AVENUE, EPISCOPAL HOSPITAL Owner: Episcopal Hospital of Philadelphia, subsidiary of Temple University Health System Applicant: Matt McClure, Esq., Ballard Spahr Andrews & Ingersoll History: Aspinwall, 1894; Harrison, 1905; both by Hewitt Bros., architects Project: Complete demolition of the Aspinwall and Harrison Buildings OVERVIEW: This financial hardship application presents a justification for the complete demolition of the Aspinwall and Harrison Buildings on the campus of Episcopal Hospital in Kensington. The application claims that there are no feasible adaptive reuses for the buildings. Episcopal Hospital is a non-profit entity and is a subsidiary of Temple University Health System, also a non-profit entity. The hospital campus at N. Front Street and E. Lehigh Avenue is large, covering an entire city block. The Aspinwall and Harrison Buildings stand at the rear or south side of the campus, behind large, mid twentieth-century hospital buildings. The Hewitt Bros. architectural firm designed both buildings. Aspinwall was constructed in 1894; Harrison in 1905. Aspinwall is a three-story, brick, Jacobean Revival building with terracotta ornamentation. Harrison is a one- story, brick building with terracotta ornamentation. Both were significantly altered in the past. COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 1 Both have been vacant for years. The exteriors of the two buildings are in fair condition; the interiors are in very poor condition and are completely obsolete. Although the exteriors of the buildings have not been well maintained, the staff does not contend that the owner has violated Section 14-2007(8)(c) of the ordinance, which states that: The exterior of every historic building, structure and object and of every building, structure and object located within

are completely obsolete. Although the exteriors of the buildings have not been well maintained, the staff does not contend that the owner has violated Section 14-2007(8)(c) of the ordinance, which states that: The exterior of every historic building, structure and object and of every building, structure and object located within an historic district shall be kept in good repair as shall the interior portions of such buildings, structures and objects, neglect of which may cause or tend to cause the exterior to deteriorate, decay, become damaged or otherwise fall into a state of disrepair. The Department of Licenses & Inspections has declared both buildings Unsafe. The Commission retained the engineering firm of Keast & Hood to assess the buildings and determine whether they posed a danger to the public, as the applicant initially asserted. Two engineers from Keast & Hood and a Commission staff member inspected the buildings with several hospital representatives on 17 January 2008. The Keast & Hood engineers did not issue a formal report, but did informally opine that the buildings were not imminently dangerous and could be repaired. They did not comment on the feasibility of repair. THE HARDSHIP APPLICATION The historic preservation ordinance allows the Commission to approve demolitions in two instances only, when the building can not be feasibly or reasonably adaptively reused and when the demolition is necessary in the public interest. Section 14-2007(7)(j) of the historic preservation ordinance states that: No permit shall be issued for the demolition of an historic building, structure, site or object, or of a building, structure, site or object located within an historic district which contributes, in the Commission’s opinion, to the character of the district, unless the Commission finds that issuance of the permit is necessary in the public interest, or unless the Commission finds that the building, structure, site or object cannot be used for any purpose for which it is or may be reasonably adapted. In order to show that building, structure, site or object cannot be used for any purpose for which it is or may be reasonably adapted, the owner must demonstrate that the sale of the property is impracticable, that commercial rental cannot provide a reasonable rate of return and that other potential uses of the property are foreclosed. Section 14-2007(7)(f) of the historic preservation ordinance enumerates the submission requirements for a financial hardship application. In any instance where there is

that the sale of the property is impracticable, that commercial rental cannot provide a reasonable rate of return and that other potential uses of the property are foreclosed. Section 14-2007(7)(f) of the historic preservation ordinance enumerates the submission requirements for a financial hardship application. In any instance where there is a claim that a building, structure, site or object cannot be used for any purpose for which it is or may be reasonably adapted, or where a permit application for alteration, or demolition is based, in whole or in part, on financial hardship, the owner shall submit, by affidavit, the following information to the Commission: (.1) Amount paid for the property, date of purchase, and party from whom purchased, including a description of the relationship, whether business or familial, if any, between the owner and the person from whom the property was purchased; (.2) Assessed value of the land and improvements thereon according to the most recent assessment; (.3) Financial information for the previous two (2) years which shall include, as a minimum, annual gross income from the property, itemized operating and maintenance expenses, real estate taxes, annual debt service, annual cash flow, COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 2 the amount of depreciation taken for federal income tax purposes, and other federal income tax deductions produced; (.4) All appraisals obtained by the owner in connection with his purchase or financing of the property, or during his ownership of the property; (.5) All listings of the property for sale or rent, price asked, and offers received, if any; (.6) Any consideration by the owner as to profitable, adaptive uses for the property; (.7) The Commission may further require the owner to conduct, at the owner’s expense, evaluations or studies, as are reasonably necessary in the opinion of the Commission, to determine whether the building, structure, site or object has or may have alternate uses consistent with preservation. Sections 7 and 9 of the Rules & Regulations govern the review of this application. Section 9.2.b and 9.2.c delineate the submission requirements for non-profit hardship applicants. 9.2.b To demonstrate financial hardship an applicant who proposes to alter or demolish an historic resource must submit, by affidavit, the following information as provided in Section 14-2007(7)(f)(.1)-(.6): 1. amount paid for the property, date of purchase, and party from whom purchased, including a description of the relationship, whether business or familial,

demonstrate financial hardship an applicant who proposes to alter or demolish an historic resource must submit, by affidavit, the following information as provided in Section 14-2007(7)(f)(.1)-(.6): 1. amount paid for the property, date of purchase, and party from whom purchased, including a description of the relationship, whether business or familial, if any, between the owner and the person from whom the property was purchased; 2. assessed value of the land and improvements thereon according to the most recent assessment; 3. financial information for the previous two (2) years which shall include, at a minimum, annual gross income of the organization, itemized operating and maintenance expenses, real estate taxes or payments made in lieu of taxes if any, annual debt service, annual cash flow; 4. all appraisals obtained by the owner in connection with the acquisition, purchase or financing of the property, or during the ownership of the property; 5. all listings of the property for sale or rent, price asked, and offers received, if any, and; 6. any consideration by the owner as to uses and adaptive reuses of the property. 9.2.c The Commission may also require the owner to conduct at the owner's expense, evaluations and studies, as are reasonably necessary in the opinion of the Commission, to determine whether the building, structure, site or object has or may have alternative uses consistent with preservation. Section 14-2007(7)(f)(.7) of the Philadelphia Code. At a minimum, this shall include: 1. the information specified in Section 9.2.b of these Rules and Regulations; 2. identification of reasonable reuses for the property within the context of the property and its location; 3. rehabilitation cost estimates for the identified uses or reuses, including the basis for the cost estimates; 4. the current standard of building and maintenance costs for the COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 3 5. a comparison of the cost of the performance of the mission or function of the organization in the existing building and in a new building, and a comparison of the cost of rehabilitation of the existing building with the demolition of the existing building and the construction of a new building; 6. the impact of the reuse of the existing building on the financial condition of the organization; 7. the impact of the reuse of the existing building on the organization's program, function or mission; 8. the additional cost, if any, attributable to

building and the construction of a new building; 6. the impact of the reuse of the existing building on the financial condition of the organization; 7. the impact of the reuse of the existing building on the organization's program, function or mission; 8. the additional cost, if any, attributable to the building of performing the organization's service or function within the context of costs incurred by comparable organizations, particularly in Philadelphia; 9. grants received or applied for to maintain or improve the property; 10. the organization's budget for the current and immediately past fiscal year; and 11. consideration, if any, given by the organization to relocation. The applicant has submitted a financial hardship application, which the staff has reviewed and considers complete, pursuant to Section 7.3.c of the Rules & Regulations. The application presents the following requisite information.  The amount paid for the property and the relationship of buyer and seller are not provided; however, the campus was acquired by Episcopal Hospital in the mid nineteenth-century and the original purchase price and grantor are essentially irrelevant now.  The Board of Revision of Taxes assessed value is $4.8 million for the entire campus, which is one tax parcel.  The recent financial information for the hospital is presented in the application. Owing to the hospital’s non-profit status, Section 9.2.b.3 of the Rules provides a more appropriate list of submission requirements than does the ordinance. In summary, it appears that the hospital is not operating at a loss, but that the projected needs for capital investment are nearly three times the available funds for FY2008-2012. The buildings in question have produced no income for years.  The affidavit states that the hospital has never obtained an appraisal for either building.  The affidavit states that the hospital made good faith attempts to lease both buildings, but none has been successful. Little information is presented about these attempts.  The affidavit states that the hospital has pursued adaptive reuses for the buildings, but has not successfully identified any feasible reuses. Little information is presented about the potential reuses.  The application does not include any information about attempts to sell the buildings. However, the Commission has not required non-profits with large campuses to attempt to sell sections of their campuses to avoid demolition.  The application presents very detailed cost estimates for rehabilitating the two buildings; it would cost $3,963,310 to

does not include any information about attempts to sell the buildings. However, the Commission has not required non-profits with large campuses to attempt to sell sections of their campuses to avoid demolition.  The application presents very detailed cost estimates for rehabilitating the two buildings; it would cost $3,963,310 to rehabilitate Aspinwall and $2,982,140 to rehabilitate Harrison. It concludes that these are not reasonable investments given the limited return potential. As suggested by Section 9.2.c.5 of the Rules, the affidavit notes that comparable new buildings would cost $1.57 and $1.78 million respectively. The staff has analyzed the cost estimates and concludes that they are realistic, but perhaps slightly COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 4 The application concludes that “The estimated cost to repair either building cannot be justified. There is no prospective tenant in the marketplace who would pay a rental for either building that would come close to paying the cost of such repairs – even if such costs were amortized over an extended period of time. Based upon the foregoing, there is no feasible adaptive reuse scenario for either the Aspinwall Building or Harrison House.” The ordinance and Rules & Regulations do not precisely define “reasonably adapted,” the standard set for determining hardship by the ordinance. The interpretation of “reasonable” is left to the Commission and Committee on Financial Hardship. One might define reasonable in purely economic terms, considering it unreasonable to require any rehabilitation that would not pay for itself over time. However, this type of analysis does not take into consideration the historical significance of the resource. It may be reasonable to require the rehabilitation of a highly significant resource even if the return does not equal the investment. Owing to the fact that the Committee must define “reasonable” and “feasible” to makes its determinations, information on the significance of the buildings is included. DESIGNATION AND HISTORICAL SIGNIFICANCE The Commission’s initial designation of the hospital campus is not documented in the Commission’s archive and, in fact, the original listing on the Register may be an error. There is no record of the Commission voting to designate the site. The only document supporting the designation is the inclusion of the Front Street address for the hospital on the pre-1985 list of designated properties. The revised historic preservation ordinance, which went into effect in 1985, defined a Historic Building as: A building or

the Commission voting to designate the site. The only document supporting the designation is the inclusion of the Front Street address for the hospital on the pre-1985 list of designated properties. The revised historic preservation ordinance, which went into effect in 1985, defined a Historic Building as: A building or complex of buildings and site which is designated pursuant to this section or listed by the Commission under the prior historic buildings ordinance approved December 7, 1955, as amended. (emphasis added) The complex was listed, i.e. it was on the list at the time of the adoption of the new ordinance, and therefore must be considered designated. However, there is no record of a vote by the Commission, record of a consideration by the advisory committee, official designation card, nomination, notice letter, or other document corroborating the designation. Without a record of the designation, it is impossible to know the relative values the Commission placed or would have placed on the individual buildings on the campus, which range from mid nineteenth- to mid twentieth-century buildings. The historic significances of the many buildings that stand or once stood on the campus differ greatly. The Commission’s files do include a 1985 letter from the hospital to the Commission requesting “a list of the buildings on the grounds of Episcopal Hospital that are historically certified” and a response cataloging eight buildings including Aspinwall and Harrison that are “worthy of preservation.” Interestingly, the Commission’s written response to the hospital does not answer the questions asked; it does not state explicitly that the buildings are certified or designated, but merely states that they are “worthy of preservation.” The current applicant’s preservation consultant states that the site was designated in 1957. This is incorrect; the misinformation derives from Philadelphia Preserved, a guide to Philadelphia’s architectural history published in 1976, which erroneously states that the hospital was designated in 1957. The Commission’s records for 1957 are complete and include lists of all sites designated and considered for designation; Episcopal Hospital does not appear on either list and was never mentioned in any Commission documents during that era. The first mention of the hospital in the Commission’s records dates to 1976. COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 5 A very important group of c. 1860 hospital buildings designed by prominent architect Samuel Sloan once stood at the northwest corner of the hospital campus. The

The first mention of the hospital in the Commission’s records dates to 1976. COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 5 A very important group of c. 1860 hospital buildings designed by prominent architect Samuel Sloan once stood at the northwest corner of the hospital campus. The group had great historic significance because it was considered as the foremost model for hospital construction throughout the United States in the second half of the nineteenth century. Sloan was not only a prominent architect but also a prominent publisher. Publishing the first major architectural journal in the United States, he broadly advertised his hospital design, which became the national standard. Only one small remnant of the Sloan buildings survives, the chapel. All other Sloan buildings on the campus were demolished over several campaigns in the mid twentieth century. During the first documented involvement of the Commission with the hospital, the chair of the Architectural Committee apparently approved the last of the demolitions of the Sloan buildings in 1976. There is no record of any review or approval of this demolition by the Commission itself. The Commission itself approved the demolition of Gill House, a turn-of-the- century residentially-scaled building on the Episcopal campus not unlike the Aspinwall Building, as necessary in the public interest in 1987. If the Commission explicitly designated Episcopal Hospital, it is very unlikely that it designated it because of the Aspinwall and Harrison Buildings. Although they were designed by a prominent Philadelphia architectural firm, the Hewitt Bros., they are some of the most unremarkable projects of that firm, which also designed the Bellevue-Stratford Hotel, the Bourse Building, Drum Moir, the Wissahickon Inn, and St. Martin in the Field Church. They are relatively insignificant reworkings of residential designs for hospital use. They are subsidiary structures erected a half-century after the important Sloan buildings. In fact, the construction of these buildings and others on the campus marks the obsolescence of the Sloan buildings. They were erected to accommodate later medical programs that the Sloan buildings could not accommodate. The Aspinwall and Harrison Buildings primarily had historic value as markers of a particular point in the history of the Sloan buildings; that value was lost when the Sloan buildings were demolished, removing the buildings in question from their historic context. The staff will recommend directly to the Commission that it direct the staff to prepare a nomination for the

markers of a particular point in the history of the Sloan buildings; that value was lost when the Sloan buildings were demolished, removing the buildings in question from their historic context. The staff will recommend directly to the Commission that it direct the staff to prepare a nomination for the Episcopal Hospital site proposing the rescission of the designation of the entire site and the new designation of the Sloan chapel, the only resource on the campus worthy of the Commission’s oversight. STAFF RECOMMENDATION: The staff recommends that the Commission find that the Aspinwall and Harrison Buildings on the campus of Episcopal Hospital cannot be used for any purpose for which they are or may be reasonably adapted and approve their demolitions based on that finding as authorized by Section 14-2007(7)(j). DISCUSSION: Mr. Farnham presented the application to the Committee. Attorney Matt McClure introduced his application team: Katherine Levins, Director of Government Affairs of Temple University Health System; Craig Menta, Chief Financial Officer of the Health System; Kathleen Barron, Executive Director of Episcopal Hospital; John Sloan, Director of Facilities Management at the hospital; architect and project manager Scott J. Compton; and preservation consultant George Thomas. Mr. McClure stated that Episcopal Hospital is struggling to survive. It faces a Hobbesian choice, preserve the buildings or the hospital. He asserted that the buildings are obsolete and would cost in excess of $7 million to rehabilitate. He acknowledged that they could be repaired, but asserted that they should not be. The rental rate in the neighborhood is $5 per square foot (sf). That is the rate that a pediatric dental practice pays for space in the nearby Nursing School COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 6 Building. Mr. McClure introduced Mr. Thomas to speak on the historic significance of the buildings in question. Mr. Wilds advised the applicants that they should limit their presentation to the hardship information and not present information on the historical significance of the buildings. Mr. McClure asked Ms. Levins to address the committee. Ms. Levins stated that Episcopal Hospital was fully integrated into the Temple Health System in 2000. She reported that the hospital now provides behavioral health and emergency room services. She explained that the hospital serves a poor community. Approximately 95% of the patient population qualifies for Medicaid or other government assistance programs. She stated that 60% of the area residents live

Temple Health System in 2000. She reported that the hospital now provides behavioral health and emergency room services. She explained that the hospital serves a poor community. Approximately 95% of the patient population qualifies for Medicaid or other government assistance programs. She stated that 60% of the area residents live below the federal poverty line. She reported that Episcopal Hospital rents space to agencies that provide health care to the community. It also rents space to the City of Philadelphia for its Special Victims Unit. She reported that the hospital also rents space to a few physicians. She noted that, although the mission of the health system is to provide healthcare, it is very mindful of historic preservation and the system’s historic resources. She stated that the health system rehabilitated the historic Neuman Medical Center into affordable housing units; it won Preservation Pennsylvania and Pennsylvania Historical and Museum Commission awards for the project. Mr. Wilds mentioned that the Office of Housing & Community Development was proud of its role in the rehabilitation of Neuman Medical Center. Ms. Levins stated that Episcopal Hospital maintains a historic chapel and a parish church on its campus. She reported that the hospital receives limited funds from governmental agencies. She explained that the hospital must fund its highest priorities, which are not the rehabilitation of these two structures. Currently, the highest priority is the rehabilitation of the campus power plant, which will cost $13 million. The hospital has limited funds for capital improvements; it cannot justify spending those limited funds on the Aspinwall and Harrison Buildings. Mr. Wilds asked the applicants to clarify when Episcopal Hospital joined the Temple Health System. He also asked when the buildings in question were vacated. Ms. Barron stated that Temple purchased Episcopal in 1998. Ms Levins noted that the final paperwork was not signed until 2000. Ms. Barron reported that the hospital’s Human Resources Department occupied the first floor of Aspinwall until 2000. A skilled nursing facility occupied Harrison until 2000, when it was closed by the State of Pennsylvania because it did not meet minimum standards and could not be brought up to code. Mr. Sherman inquired whether the hospital received any income from the two buildings when they were occupied. Ms. Barron stated that they received some income from the nursing facility. Mr. Compton, an architectural consultant and project manager, described the costs to rehabilitate the two

not be brought up to code. Mr. Sherman inquired whether the hospital received any income from the two buildings when they were occupied. Ms. Barron stated that they received some income from the nursing facility. Mr. Compton, an architectural consultant and project manager, described the costs to rehabilitate the two buildings. Mr. Wilds asked him to provide the estimated per-square-foot rehabilitation costs. Mr. Compton explained his methodology for analyzing the two buildings and reported that the deficiency cost per square foot for Aspinwall is $377.89 and for Harrison is $166.45. He stated that this includes repairs to roofing, the structure, and brick facades, the construction of a stair and elevator tower, and the replacement of all mechanical systems. Mr. Wilds asked Mr. Compton to elaborate. Mr. Compton noted the following representative costs for Aspinwall: the replacement of exterior doors and windows, $400,000; brick restoration, $101,000; roof replacement in slate, $233,000; basement wall restoration, $30,000; and structural repairs, $350,000. Mr. Thomas explained that the structural failures stem from the construction technique and inherit design flaws. He explained that the buildings have steel structural components that have rusted greatly. He noted that Aspinwall has the parapet walls that capture water, which penetrates into the brick walls, promoting brick deterioration. He stated that the brick repairs COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 7 would be very difficult and expensive. He also noted that the brick is not available today. He stated that the bay over the main door at Aspinwall has been saturated with water for years. Mr. McClure explained that the Department of Licenses & Inspections cited the buildings as Unsafe. The violation specifically noted the conditions of the front wall at Aspinwall and the porches at Harrison. This report prompted the hospital to immediately erect a fence around the buildings to protect the public. Mr. Wilds asked Mr. Thomas how long water has been penetrating the buildings. Mr. Thomas stated that the water penetration problems are inherent to these buildings; they result from design problems, not from a lack of maintenance. Mr. McClure asked Mr. Compton to elaborate on the lack of efficiency of these structures. Mr. Compton stated that Aspinwall, for example, would need an elevator and stair tower addition, a fire-rated enclosure for the historic stairwell, and new circulation and mechanical spaces. He noted that the building has about 2,500 sf per floor. The rehabilitation

elaborate on the lack of efficiency of these structures. Mr. Compton stated that Aspinwall, for example, would need an elevator and stair tower addition, a fire-rated enclosure for the historic stairwell, and new circulation and mechanical spaces. He noted that the building has about 2,500 sf per floor. The rehabilitation bringing the building up to code would leave little usable space in the building. Mr. Wilds stated that he has been convinced that the income the buildings would generate would not justify the debt from the rehabilitations. He stated that even if the buildings rented for $20 per square foot, they would not support the debt. He added that they would not rent for anything approaching $20 in this neighborhood and with the inherent limitations. Mr. Sherman stated that he knows the neighborhood well and has concluded that the hospital would not be able to generate enough income from rentals to support the rehabilitation. Mr. Sherman asked if the hospital had plans for the site after the demolition of the buildings. Mr. McClure stated that the hospital has no plans to redevelop the site currently. Mr. Menta reported on the health system’s funding for capital projects. He stated that Episcopal Hospital has an annual capital budget of $1.6 million; it must provide for medical equipment as well as infrastructure. He remarked that that amount cannot possibly provide for all of the capital needs on the campus. He stated that the hospital system as a whole endeavors to offset depreciation with equivalent spending on capital projects every year. He further explained that the capital allocation for each unit within the system is proportional to the revenue that that unit generates. Mr. Wilds asked if this allocation scheme guarantees that the poor hospitals within the system will remain poor. Mr. Menta stated that the system has an additional $10 million of capital money annually for which the units can compete. Mr. McClure asked Mr. Menta to elaborate on the competitive nature of the supplemental funding. Mr. Menta stated that Episcopal Hospital has needs for up to $19 million for infrastructure and maintenance, an amount that does not include funding for medical and IT equipment. He clarified that Episcopal Hospital received an $8 million cash deposit from the sale of assets in the fall of 2007, which increased the cash reserves to $11 million. He stated that this was a one-time windfall and

an amount that does not include funding for medical and IT equipment. He clarified that Episcopal Hospital received an $8 million cash deposit from the sale of assets in the fall of 2007, which increased the cash reserves to $11 million. He stated that this was a one-time windfall and would not be repeated. Even this $11 million will not fund all of the capital requirements. Ms. Levins stated that the Temple Health System is a relatively poor system. Other hospitals in the system are as poor as Episcopal and none in the system is a “cash cow.” She explained that the Health System receives very little outside money. She reported that Episcopal received $1 million for the power plant reconstruction from PIDC, this grant was very unusual. She concluded that the hospital is very careful with its limited funds. Mr. Wilds inquired about the condition of the Sloan-designed chapel. Mr. Sloan, who noted that he is not related to the nineteenth-century architect, answered that the chapel is in good condition; it is regularly maintained and used. Ms. Barron explained the difficulties Episcopal Hospital has encountered while attempting to let the buildings. She stated that the discussions with potential tenants are difficult to document because none ever significantly developed. Ms. Barron explained that she had marketed Harrison, which led to talks with an organization that provides healthcare to uninsured people. COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 8 That organization considered the Harrison Building, but was only able to offer a token payment for the space. She noted that an organization known as KenCrest currently rents the parish house of Saint Luke’s Church, which is adjacent to the hospital campus, for $500 per month. It considered the Harrison Building, but decided that it would not be feasible. She stated that Episcopal sought a grant to create a long-term care facility for the mentally ill in Harrison, but was not successful; the facility for 16 patients could not justify the $3 million price tag. The Temple Health Financial Department considered Harrison and decided that it reuse was not feasible. Pediatric Dental, which pays $3,000 per month for the basement of the Nursing School Building, considered Harrison, but rejected it because it would have cost the practice $30,000 per month, yet would not have provided sufficient space. Ms. Barron stated that fewer parties have considered Aspinwall. The Children’s Alliance

feasible. Pediatric Dental, which pays $3,000 per month for the basement of the Nursing School Building, considered Harrison, but rejected it because it would have cost the practice $30,000 per month, yet would not have provided sufficient space. Ms. Barron stated that fewer parties have considered Aspinwall. The Children’s Alliance considered it in 2002, but decided that it would be too expensive to renovate. She also stated that Temple Health’s Financial Department considered and rejected it as well. No one has been interested because the cost to renovate would be too great. She noted that physicians pay between $12 to $14 per square foot and the City pays $16 per square foot on the hospital campus, but those rental prices would not support the rehabilitations of the Aspinwall and Harrison Buildings. Mr. McClure contended that the physical location of the two buildings in the center of the campus prevents subdividing them off and selling them individually. Mr. Sloan agreed and noted that the change in grade between Huntingdon Street and the campus would also preclude subdivision. Mr. Haak asked whether the occupied spaces at Episcopal adequately housed the hospital’s current functions. Ms. Barron stated that they currently have vacancies in the main hospital building. She stated that the third and fourth floors of the School of Nursing are also vacant. Each floor is about 10,000 to 12,000 sf. Mr. Sloan stated that it is not prudent for the hospital to spend its limited capital monies on Aspinwall and Harrison. He also stated that the hospital does not want to include these vacant buildings in their new power infrastructure. Mr. McClure commented that Section 9 of the Commission’s Rules & Regulations allows for the Commission to consider the mission of the organization when reviewing financial hardship applications from non-profits. Mr. Wilds stated that the application meets the financial hardship requirements for private developers, even if the hospital’s non-profit status is not taken into account. Mr. Sherman commented that the hospital should not be required to maintain these obsolete buildings. Mr. Haak asked if the hospital planned to maintain the other historic resources on the campus. Mr. McClure stated that the hospital contends that the Sloan chapel is the only building on the campus worthy of the Commission’s protection. Mr. Farnham stated that the staff would ask the Commission to allow it to prepare a new nomination for the campus that proposes

resources on the campus. Mr. McClure stated that the hospital contends that the Sloan chapel is the only building on the campus worthy of the Commission’s protection. Mr. Farnham stated that the staff would ask the Commission to allow it to prepare a new nomination for the campus that proposes the designation of the chapel only. Mr. McClure noted that the hospital would support the new designation. Mr. Wilds asked about other pre-1920 buildings on the campus. Mr. Thomas stated that there are a few, but, excepting the chapel, they are relatively uninteresting and utilitarian. Mr. Wilds asked if the hospital is maintaining the former Episcopalian Church. Mr. Sloan stated that the hospital is maintaining it; it recently repaired the roof. Mr. Wilds suggested that the church may be designated and should be maintained. Mr. McClure responded that he does not believe that the church is designated; it is a separate parcel. Mr. Farnham stated that the staff would research the designation status of the church. Mr. Wilds agreed that the church may not be designated. Mr. McClure concluded that Episcopal Hospital is in the business of providing healthcare to the surrounding impoverished community; the maintenance of two deteriorated buildings which cannot be feasibly rehabilitated constitutes a hardship on the organization. COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 9 COMMITTEE ON FINANCIAL HARDSHIP, 5 MARCH 2008 PHILADELPHIA HISTORICAL COMMISSION 10 COMMITTEE ON FINANCIAL HARDSHIP RECOMMENDATION: Mr. Wilds moved that the Committee on Historic Designation recommend that the Commission find that the Aspinwall and Harrison Buildings on the campus of Episcopal Hospital cannot be used for any purpose for which they are or may be reasonably adapted and approve their demolitions based on that finding as authorized by Section 14-2007(7)(j). Mr. Amburn seconded the motion, which carried unanimously. ADJOURNMENT The Committee adjourned at 10:25 a.m.