In July 2017, I sat down with Architect & Developer Tim McDonald of Onion Flats in Philadelphia, PA. See more information about Onion Flats at their website.
Tim McDonald: We call ourselves an unintentional company. I wanted to start an architecture gallery. It seemed like a gallery was the combination of all of my own interest. I was interested in writing, in history, in theory, and in art. There wasn’t a place in the city of Philadelphia to exhibit architecture. I wanted to start this gallery. I found an abandoned five-story building in the middle of the city. It is amazing to think of that now. It was like $110,000 for a five-story building in Old City. I initially went to my father first. Long story short, I ended up partnering with my brother. We couldn’t get a loan because I was just out of school and I had a lot of student debt. He didn’t have a lot of money, but in the end he had just enough for the equity that we needed. What I did have was time. With that time, I found these HUD (United States Department of Housing and Urban Development) programs.
James Petty: Was that a type of grant or a loan?
TM: It was a HUD loan. The great thing I discovered is that you have to be creative when you don’t have a lot of money and you don’t have any experience. General lenders will throw you out the door when you go asking for money. HUD is basically a bank with a conscious. They have a mission. Their mission is about rebuilding cities. They take risks on people that typical commercial lenders wouldn’t. So there are all of these programs out there. The building we found fit specifically into one of their programs.
JP: Was the program about urban renewal in inner-cites?
TM: It was partially about urban renewal. The building couldn’t be more than five-stories. It had to have residential and commercial spaces, but no more than four residential units. There was this very specific tool that I found, and that is how we got started. The intention was to renovate the building so that I could have the gallery for free. I had grown up in construction. At the time, I had just got back form Japan where I worked the previous year for a design-build architect. This was in my blood. I knew I loved it. I wasn’t setting out to create a design-build-development company. It just turned out to be that way because we just had a great time doing it. After that first project, we bought an abandoned meat packing plant. That sort of turned into what we have today.
JP: Do you still own the first building, your Market Flats project?
TM: We still own the ground-floor space, but we sold the rental residential units to pay off the loan.
JP: Do you still host architecture exhibits there?
TM: No, that lasted for about two-years. It was my first and only non-profit attempt. I can only do so much. It was a fantastic two-years. It was packed every single opening. We had some amazing exhibitions. There was an architecture and installation based-art contingent out in the city that was kind of hidden. They heard about it and they came in droves.
JP: You and your brothers then moved to the Northern Liberties, Fishtown, and Kensington districts of Philadelphia and began to develop a lot of work there. Several of these projects are adjacent to each other. Did you buy up large swaths of Philadelphia years ago? How did you know this area was going to gentrify before it had?
TM: We didn’t know. We didn’t know it was going to do what it did. It turned out to be a great bet. The project we are building today, Capital 2, is our last piece in this area. Our next developments are a little north of here in the Kensington area. Kensington ten years ago… I lived there. I had pimps and hookers outside of my door all the time. As we speak, it is turning. We have two large parcels of land in Kensington that we are planning our next projects on. They’re larger than these parcels we first started out within Northern Liberties.
JP: Would you develop the land in separate projects to facilitate time and financing?
TM: Yeah. We’ve got these two existing buildings that are amazing neoclassical bank buildings. They are phenomenal. That is one project. The second project is about the same size as our Capital 2 project. The third one will be an eighty-unit building we have planed right next to our office.
JP: Are you trying to get bigger and bigger with work?
TM: No. We tried that. No interest anymore. I want to keep it to where I can be the guy on site. I want to sub out as much as possible. But, I want to be the guy on site.