On Hold in San Francisco

How the Economic Crisis Has Stalled the Renovation of the City's Telephone Building

The costly restoration of San Francisco's Telephone Building is in limbo, thanks to the current economic crisis.

Credit: Copyright Tom Paiva Photography, Courtesy Princeton Architectural Press

SAN FRANCISCO—The Telephone Building, as many locals refer to the city's first major high-rise skyscraper of the Roaring Twenties, is a gorgeous tower that dominated this city's skyline when it was first built in 1925.

But the 26-story building has sat empty for over two years, its windows leaking and some of its terra cotta cladding damaged. Once a stunning technological achievement designed to herald the rapid growth of the Pacific Telephone & Telegraph Co., the white-and-grey-flecked high-rise was deemed as unsuitable for 21st century telecommunications when it ended up under the auspices of AT&T Inc.

Now there are ambitious plans in the works under its new owners to make the office building come alive again as a residential condominium tower in a costly reuse and restoration project. But the current credit crunch has put a temporary wrench in the plans.

"We believe the current financing market is frozen for almost any product type, regardless of geographic location," said Jon Knorpp, a partner with Wilson Meany Sullivan, the San Francisco-based developer which bought the building in 2007. The recession, Knorpp said, "is an issue, zero question about that. We are optimistic that the markets will return to a business opportunity mode, as opposed to a crisis mode, but I can't guess to what the time is."

Wilson Meany Sullivan is known here for its respectful restorations of historic buildings. Its best known project is the landmark Ferry Building that graces the Embarcadero. The firm, along with Stockbridge Capital Partners, bought the Telephone Building from AT&T Inc. for $118 million. The high rise has been vacant since 2006, when AT&T, through its merger with SBC Communications, consolidated offices in other parts of the Bay Area and moved out. The building cost $4.55 million to build in 1925.

The iconic structure, the first moderne-style skyscraper in San Francisco, was initially built as the headquarters for PT&T during the early boom years of telephone service. Its new owners plan to convert the 331,670-square-foot tower into 118 condos, including about 230,000 square feet for residential units, 8,700 square feet of retail/ restaurant space, and 2,428 square feet for residential amenities on the 27th floor (added in1951) and the basement, and 9,323 square feet for 24 parking spaces and loading.

Many in both the real estate and the architectural preservation communities are closely watching the project, which, according to initial building permits, is expected to cost at least $80 million, almost as much as the building itself.

The Telephone Building was purchased during the then red-hot real estate market. Most local companies, though, were not interested in buying the gorgeous skyscraper as an office building, because its floor plan is no longer suitable for modern offices and too many improvements were required.

Current lobby of the Telephone Building, which has been vacant since 2006

Credit: Copyright Tom Paiva, Courtesy Princeton Architectural Press

As has been the fate of many architectural gems or landmark office buildings in recent years, the developers decided to convert the building to condominiums. Initially, the plans called for a mixed use project, with a hotel on the lower floors, and condos at the top. Those plans were shelved, though, once the developers concluded that high-priced, luxury condos would result in a faster return on their investment, and that the market for top-end residential units was still going strong.

But that was then, and this is now. With the credit crunch making debt financing nearly impossible, the developers are still going forward at least with the planning process, working with their architects and engineers on renderings and embarking on the lengthy permit process. But they cannot begin construction until the debt market turns around and more funding can be secured.

Even though the building has never been designated a historic landmark by the city, the developers and their architects are treating the iconic tower as such.

"How many times do you have a chance to be involved with a building like this?" asks Mark Hornberger, founding principal of the architectural firm of Hornberger + Worstell in San Francisco. "There are a lot of high-rise, all-glass buildings in San Francisco, [but] it's a much different kind of building than the contemporary all-glass building."

Because the Telephone Building is categorized by the city as being of "individual importance," and "excellent" in architectural design, the skyscraper cannot be demolished unless it becomes a threat to public safety or retains no substantial market value. As a result, plans for the building need to pass muster with the city's Landmarks Preservation Advisory Board, as part of the overall city approval process, with additional input from San Francisco Architectural Heritage, the city's architectural preservation watchdogs.

"From the outside…no matter what perspective, it is striking," said Jack Gold, executive director of San Francisco Architectural Heritage, of the Telephone Building. "It has an extremely modernistic look to it. It stands alone, much like a building in Chicago does. It's amazing."

In December, the Landmarks Preservation board and the planning department signed off on the current plans, with a few adjustments. The developers and their architects say they are working hard to keep the building's architectural integrity.

The "shimmery, gleaming monument to Talk"—as the San Francisco Examiner called it in 1926—soared over the city's downtown district when it was completed. At 26 stories high, it could be seen for miles and was the tallest steel-frame structure in the west. That title was stripped away in 1927 by the Russ Building in the heart of the Financial District, a building more Neo-Gothic in theme, but one that was greatly influenced by the stepped Telephone Building tower and its Moderne sensibility.

Designed by local architects J.R. Miller and Timothy Pflueger, with Alexander Aimwell Cantin as associate architect, the skyscraper was a salute to the booming business of the Pacific Telephone & Telegraph Co. Finnish architect Eliel Saarinen's second place winner in the Chicago Tribune Tower contest was a major influence on the design, with several setbacks as the tower rises higher.

Exotic Asian motifs, telephone imagery and the logo of the Bell System adorn the base and the lower ornament bands of the structure, as well as the lobby. There are references to the popular Candlestick phone of the 1920s and the pneumatic tube, among the most modern technologies in use in their era. Pflueger, who went on to design many other landmark buildings in the city, and his colleagues, embraced the Machine Age even before it became a more widespread design ideology in the 1930s.

"The new building's status as the tallest building in San Francisco, its location south of Market Street at the edge of the established Financial District, and its avant-garde terra cotta cladding and Art Deco design set the Pacific Telephone building apart from other classically designed office buildings of the time," wrote the architectural firm Page & Turnbull in a historic resource evaluation of the building last year.

The building was so solidly constructed that it withstood the 1989 Loma Prieta earthquake mostly intact. That quake, which caused serious destruction to other areas of the city, damaged some of the Telephone Building's terra cotta cladding. The eight 13-foot-high sculpted eagles atop its crown had to be replaced with fiberglass replicas.

A rendering of the new lobby. For better Feng Shui, the address of the Telephone Building will be changed from 140 to 138 New Montgomery, to include the lucky number eight, and thus eliminating the unlucky number four from the old address.

Credit: Hornberger + Worstell

Its new owners, their architects, and engineers want to ensure that the building can withstand another massive quake, or a "Big One." So a large part of their project includes a major seismic retrofit, one that will be beneath the surface so as to be the least invasive and not mar the architectural integrity of the structure.

"The seismic renovation is to protect the historic skin of the structure," said Hornberger. "The scheme we are working on will stiffen the building internally, so it doesn't affect the appearance of the building at all." Those improvements include creating an inner sheer wall, buried against the circulation corridor of the F-shaped building.

Some of the other ambitious but necessary plans include replacing nearly every single window in the building, from the third floor on up. Most of the windows are leaking and allowing damage to the interiors and the exterior terra cotta. The developers determined in several tests that even with new glazing, weather stripping and sealants at the joints, the old windows would still leak, and therefore had to be replaced. Aluminum will be used to match the original steel-frame windows.

Gold of Heritage said that he saw a demonstration on how fixing the windows would not solve the leakage, and concluded that completely replacing the windows was the only solution to preserve the building, even though that is typically not the usual route adopted by preservationists. The Landmarks Preservation Advisory Board also wants to approve a sample window before they are all installed.

Some of the exterior terra cotta will also have to be replaced, which is a science unto itself, matching the original pattern that sought to evoke granite rock in the Sierras.

Other plans for the building include turning a service yard in the rear of the building into a formal porte-cochere with a canopy, one that will blend in with the existing historical details. Two public spaces will become available for lease on the ground floor, and new entrances will be cut into the building, with an awning over each and signage that must be approved by the planning department.

The stunning lobby, with its black-veined marble walls trimmed with bronze metal work and colorful detailed plaster ceiling in a Chinese motif, will go through some changes as well, in an effort to restore it to its original state. Light fixtures added long after the building's completion will be removed. The Bell System logos, which had originally graced hexagon medallions above each of the nine elevator banks, will be recreated. Subtle recessed lighting that once framed each elevator bank will also be recreated.

One result of the Telephone Building going condo is that its beautiful lobby will no longer be accessible to the public, except through public walking tours, such as San Francisco City Guide tours. The two public spaces will have their own entrances.

Bas reliefs depicting a snake charmer, a bear and other exotic figures that grace the walls of the proscenium of the private auditorium will be saved, as will the Moorish styled light fixtures. They will be used elsewhere in the public spaces of the building. Walnut paneling that graces the board room will also be saved and used elsewhere.

The condominiums will have 21 different residence types. Units located on the three setback levels will have narrow terraces with French doors opening onto stunning views of the city, the Bay Bridge and the San Francisco Bay. The interiors of all the units will be conducive for hanging art work and holding bookcases, not feasible in new buildings with many glass walls, Hornberger noted.

Target buyers for the condos, when they go on sale, probably at least three years from now, will be well-heeled, retirement age couples who want to move back to the city, after raising families in the suburbs.

Hornberger, whose firm has has worked on other historic adaptive reuse projects such as Ghirardelli Square, hopes that through the renovation, the iconic Telephone Building will become a lively venue where people live and enjoy the city, versus its prior incarnation as a 9 to 5 office building. Part of that job, he said, is "making sure the building will survive for another long period of time."

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