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Wednesday, February 11, 2015

A new addition to the family ... congratulations, it's a theater

I haven't blogged in months, partly because I've been very busy, and partly because I was afraid if I blogged before now, I wouldn't be able to keep from mentioning what I'm about to tell you, and I'd jinx myself.

Let me start from the beginning.

A few times in the past couple of years, Matt and I have idly discussed the idea of one day owning a property with a space that we could turn into some kind of music studio. It would be nice to have somewhere that isn't a windowless and somewhat smelly and damp basement where we could practice and record. Maybe I could also use it as a teaching space for both music and acting. Maybe we'd even be able to have small performances of some kind there. Every now and then, we'd window shop empty lots and buildings on sale nearby, and we'd dream.

In early July of last year, a house a block away from us went on the market, and out of curiosity, we took a look inside. It belonged to a sculptor (who incidentally worked with H.R. Giger - that's him on the far left in the group photo), and included a sizable artist workspace which might have worked for our purposes. But the price was much too high, especially for our area (over $600,000!), and the living space was too small, so we didn't pursue it.

I put the entire matter out of my mind, thinking we weren't ready to buy anything right now anyway. This was something to think about in the coming two or three years after extensive window shopping and research. But Matt liked to procrastinate bedtime by continuing to casually browse real estate listings on Zillow.

Only a week or so later, at 1:30AM on July the 16th to be precise, while I was busy wasting time on Facebook, I heard an urgent shout from Matt's office. "Mel! Mel, come here! Look at this! What ... what is this?"

Matt was staring incredulously at a very strange Zillow listing. The property was described as a studio apartment. With three bathrooms. 2,080 square feet. The location was only half a mile from Matt's work in Old City, and a block from the riverfront. And the listing had just been reduced from $425,000 to $375,000. That was still a lot of money, but not for the area. All these details were enough to warrant some curiosity, but it was the photos that made both of us yelp.


The exterior seems normal enough. A rowhome, though it appears to have at least two entrances. And then...





Oh.
My.
God.

Of course the first thing we did was Google the address, 103 Callowhill Street, to find out what on earth we were looking at. We quickly discovered that the venue was called Grasso's Magic Theatre, and as its name suggests, the space was dedicated to magic shows. We had never heard of it, even though we live in the same zipcode. It had recently closed down, although it had been operational only three months earlier.

Here are a couple of shots of it in action:




Why had it closed down?
Why was it for sale?

The answer to those questions is sad and upsetting.

Sidebar: have you ever wondered why magic is such a gendered performance genre? Consider: how many professional female illusionists can you name? In fact, it seems to me that whenever I see women on stage in a magic show, their purpose seems to be to dress in sexually provocative costumes and have swords and knives thrust into them, or be locked inside boxes, or disappear. Think about that a moment. Consider also that a magician is essentially someone who makes a career out of professionally gaslighting children. TL;DR - this whole experience has left me thoroughly creeped out by magic.

But back to the real estate listing. Matt and I didn't sleep a wink that night. Our minds were racing. All we could think about as we tossed and turned was this apparently operational theater in an amazing location, and that maybe, just maybe, with our marketing chops and combined fingers in so many local performing arts pies, we could buy it and turn it into something wonderful. We contacted the agent.

Here are some pictures from our first look at the space.




It was kind of a mess, but it was still a theater. On the second floor is a tiny 480-square-foot efficiency apartment (hence the listing category) that was too small for two adults and four cats to live in. We realized that if we wanted to buy this space—and live above it—we would have to build a suitable apartment on top. This was a much bigger endeavor than the gut and renovation of our house in Downingtown. This project would involve architects and full scale construction, and dealing with Philadelphia Licenses and Inspections, and much more money than just the purchase price. Things were about to get very complicated.

Over the next seven months, the acquisition of this theater became a saga that manages to be both utterly terrifying and also incredibly boring to relate. A bad leak developed in the roof of the second floor and both the upstairs apartment and the lobby flooded. In September, while we were still in complicated talks with architects and several mortgage brokers, the property was foreclosed on, since the owner wasn't making any mortgage payments (he also owed over $42,000 in property taxes to the city). The mess that you see in the photos above became much, much worse. The owners stripped the theater of pretty much all the amenities, including the beautiful curtains that had once been rescued from a dumpster outside the Merriam Theatre and had been hemmed especially for the space (it broke my heart that they took them, since I can't imagine they would be useful to anyone but us). When the foreclosure sheriff's auction was held, the foreclosing bank refused to allow a low enough upset price for us to buy it directly.

After another month or so, with the condition of the building worsening, the foreclosing bank dropped the asking price to $300,000, and we decided to play ball. After much back and forth, we negotiated the price down to $265,000 and signed an agreement of sale. Meanwhile, we were jumping through endless flaming hoops trying to qualify for an FHA 203K loan which would help us with both the purchase price and the cost of construction. For several weeks on end, there was a crisis every three or four days that put the entire deal in jeopardy. The 203K loan turned out to have unreasonable restrictions on the size of the commercial space and demanded that the residential space be larger. The estimated cost of construction ballooned. I claimed too many tax deductions in 2013 to have my income count toward financing limits. Money gifted to us last year by my mother in Australia had to be traced minutely, requiring not only our bank statements but hers as well. A mind-melting catch-22 developed: the bank couldn't give us a loan until we had firm construction estimates, but we couldn't get firm construction estimates until we'd performed a structural investigation, which couldn't be performed until after we'd bought the property, which couldn't be bought until the bank gave us a loan.

Then all hell broke loose. The foreclosing bank was revealed to be a financing company that wasn't FDIC insured, meaning that the property was subject to an anti-flipping rule. Unless we could postpone the date of settlement, we couldn't get ANY bank to give us a mortgage. Simultaneously, we heard that the board of the directors of the foreclosing bank was actively trying to scuttle the agreement of sale because they had realized the property is in an ideal location for development and thought they were selling it too cheap. They weren't going to allow us to postpone anything. They'd much rather the entire deal fell through.

Bottom line: we had to raise cash for the sale, or we would have to forget the whole thing. The only good news was that if we could pay cash, we would save about $20,000 in closing costs compared to getting a mortgage.

We went into beg and liquidation mode. And we did it. We raised $265,000 cash plus an extra $10,000 or so in closing costs.

And it's ours.

pwned.

Outright.

We feel very broke, but we own a theater.

The next step is to leverage the property, and also probably our Downingtown house, to get a construction loan to build our living space on top. This is going to take some time. When it's finished, we'll have a house with a 1600 square foot performance space cum music studio cum teaching space on the first floor.

Some things to note:

Because there is only one means of egress (front of the building), we are limited to 49 seats. The first floor of the building is 100% lot coverage, and the lot is landlocked on the back and sides, so we can't just knock in a door and call it an egress. We can deal with this limitation for now, but the ultimate goal would be to ask for (buy) an easement from the owner of the empty lot next door so we could put in a second means of egress on the side of the building and expand capacity.

There is a lot of development going on in the immediate neighborhood. In fact, our architect just bought the lot at 107 Callowhill Street and is building a five-story office and residential building there which will become their headquarters. There's also a massive apartment high-rise going up around the corner, and another one around the other corner, and a lot of plans for the waterfront in general. We're a block from Dave and Buster's, a couple of blocks from Festival Pier, and a few blocks from the new Fringe offices and the Painted Bride. And it's a ten-minute walk to Matt's work. Matt currently walks to work from our house which is two miles away, so this will cut his "commute" significantly.

Ideally, we will add two floors of residential space above the theater, and create two apartments, one of which we can live in, and the other which we can rent out for added income. According to code, we can only build on 70% of the total lot area (the first floor's 100% coverage is grandfathered in).

I of course went into crazy Ph.D. research mode, and was delighted to discover that Philadelphia has meticulous records of deeds and other historical resources that you can access online. I traced the deeds on the land back to the Penn Charter. In 1745, William Penn leased four lots, including this lot, to Benjamin Mifflin on the proviso that he "cause to be built thereon within the space of five years from the date hereof four good brick or stone messuages each of three stories high to the front of the said Callowhill Street." So there are almost certainly bricks in the structure and the foundation that predate America. I'll write a separate post showing my research later, in case anyone is as excited by it as I am. I've never lived on a property with easily accessed recorded history like this before.

I plan to make this a truly multidisciplinary space. We can play host to bands, classical recitals and concerts, theater shows (especially for the Fringe), improv and stand-up, puppet theater, and speaking events. It can be a rehearsal space. We can rent it out for events like weddings. I can teach music and acting there. I can let my friends teach there as well. I can one day fulfill my dream of opening up a composition school for girls.

Pretty much anything except magic. No magic shows allowed.

The first show is obviously going to be a massive Up Your Cherry extravaganza, like our 10th anniversary party.

And the name? We're calling it the Hannah Callowhill Stage, after Hannah Callowhill Penn who also lends her name to the street. She's kind of great. And hardly anyone I talk to has heard of her, so I'm very happy to give her some recognition. Keep an eye on hannahcallowhill.com and hannahcallowhill.org.

(Maybe I could organize a Penn composer recital initiative and call it the Hannah Callowhill-Penn series LOLOLOL.)

If this blog seems rushed and loopy and poorly written, it's because I'm exhausted: in addition to closing on this property this week, I finished a choir piece for a commission, and I'm involved as a performer and composer/sound designer in The Cherry Orchard at People's Light and Theatre, which has its first preview tonight and opens officially on Saturday. The production stars Mary McDonnell (squeeee) and David Strathairn (squeeee), and hopefully I'll have time to write a separate blog entry about that. Maybe tomorrow.

Right now I have to order a dumpster for all the water damaged drywall and insulation, and research how to fix a roof leak as cheaply as possible, since eventually we'll be ripping it all off to build on top of it anyway. And then I have to find something to eat before call time.

I feel a bit nuts. And a bit amazed that this has happened. But I'm pretty sure this is all really, really good. Really good. Scary good.
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