When Lehigh University put out a call for developers to redevelop the Adams Street ice house in South Bethlehem, many who responded wanted to tear down the building.
Not Charles Jefferson.
He saw something worth preserving when he looked at the rows of distinctive arched windows adorning the facade of the five-story red brick warehouse at the corner of Fourth and Adams streets.
The windows, which look like they were bricked over, are just an illusion, one of the many surprises the circa 1893 building holds. It’s clear the windows never functioned because they don’t match up with the interior floors.
Unique for the era, the windows were likely meant to help the Lehigh Valley Cold Storage building better blend into a bustling South Bethlehem residential neighborhood, Jefferson said Tuesday gazing up at the building.
Lehigh University selected his company, Jefferson-Werner LLC, to transform the two-story engine house that once produced 80 tons of ice a day and the adjoining warehouse into 30 market-rate apartments and a restaurant space that opens onto a private courtyard overlooking the South Bethlehem Greenway. The company rose above the other applicants because they were preserving most of the building, Lehigh spokeswoman Lori Friedman said.
“We came up with an innovative solution,” Jefferson said. “I love what we do because not everybody has the patience, not everybody has the interest.”
Dubbed Brinker Lofts in homage to Adam Brinker, the Southside resident who founded Lehigh Valley Cold Storage, the $9 million project is in its final stages with the first tenants slated to start moving in June 26.
“The building is located on a corner in the downtown business district that also faces the Greenway, which is fast becoming a vibrant gathering place for the South Bethlehem community,” Friedman said. “We thought it was important to develop the property in a way that added to the growth and vitality of South Bethlehem.”
For Jefferson, the building’s prime location on the Greenway is its best amenity. Residents are steps from the neighborhood’s best restaurants and Bonn Breweing. They’re in the midst of the Southside Arts District and a short stroll from the SteelStacks campus, Social Still and the casino.
Next, Jefferson’s company will be turning its sight’s to one of the north side’s most high-profile properties: the crumbling Boyd Theatre. He plans to raze the water-logged building, replacing it with 120 apartments and ground-floor retail fronting on Broad Street.
Although Brinker Lofts is very much still an active construction zone, all but four of the apartments are leased to a mix of young professionals, Lehigh employees and some local business owners, said Maddie Jefferson, the building’s leasing agent.
Depending on the size of the unit, rents run from $995 to $1,625 a month, Maddie Jefferson said. The building is a mix of one and two-bedroom industrial lofts and one studio, featuring exposed brick walls — some as thick as three feet, wood beams and large windows.
Kitchens are outfitted with dark cabinetry, marble-look alike quartz and stainless steel appliances. The industrial retrofit means these are no cookie-cutter layouts, each unit is different. All of the apartments include a washer and dryer.
The majority overlook a massive courtyard topped by wood trusses, which will soon include wood benches made from wood salvaged from the rafters.
Jefferson has high hopes for the former two-story engine house.
“I think it’s the hottest space around,” he said, adding he’s in talks with three potential tenants. “No one has a courtyard like that.”
Brinker Lofts sits in a morphing neighborhood where a trendy ramen restaurant and a high-end rooftop eatery coexist alongside some of the city’s poorest residents.
The historic redevelopment is one of the first projects in the country to take advantage of a capital gains tax incentive, created in the 2017 tax reform law, meant to encourage investment and development in targeted economically distressed neighborhoods like this area of the Southside.
“A project of the magnitude, with only 30 units, it is very expensive turning it into something it wasn’t,” Jefferson said.
Pennsylvania selected 300 census tracts to be included in the opportunity zone, including eight in Northampton and six in Lehigh counties. Of the local tracts, five sit in Bethlehem encompassing both Brinker Lofts and the Boyd.
Gov. Tom Wolf designated the tracts because they meet U.S. poverty thresholds and were ripe for private investment.
The program allows individuals to defer and reduce their federal tax bill by rolling over capital gains earned from the sale of an asset, like stock or real estate, into a qualifying opportunity zone. If the investment is held for a decade, the federal taxes on the appreciation of that investment are forgiven.
“It presents a huge opportunity for people looking to make a real estate investment in an area that needs help,” Jefferson said.
The transformation of the ice house into one of the Southside’s hottest new rentals was financed via PNC Bank’s $4.2 million Opportunity Zone investment, traditional financing and the use of federal historic tax credits.
“They are able to make an investment while enhancing the economics of the project to make it viable,” Jefferson said. “Without the opportunity zone investment, the economics are not there. We’d need to look for a grant or subsidy elsewhere.”
Jefferson loves bringing new life to historic, neglected spaces although, the walls and floors hide both gems and headaches. All of the surprises mean he spends a lot of time on site, making rapid fire decisions to keep the project on schedule.
On Tuesday, he was deciding where exterior lights should be hung, designing the street numbers for the building’s exterior and troubleshooting how to incorporate the base of a massive granite beam unearthed in the lobby .
The project marks Lehigh’s latest attempt to move off of the mountain and contribute to the neighborhood’s revitalization as it undergoes its own expansion. The university is in the midst of a campaign to enroll 1,500 new students and 100 faculty members.
Lehigh brought the sprawling ice house in 1979. It was most recently used for storage (many of the exposed brick beams in the units still sport metal letters Lehigh used to organize its storage).
It sits on the National Register and within the South Bethlehem Historic District. In addition to manufacturing ice, Brinker Lofts was used for cold storage, primarily eggs.
See more photos of the project below.
Photographer: Saed Hindash | For lehighvalleylive.com