Outdated Coal, Electric Plants Are Becoming The World's Largest Redevelopment Sites
Developers around the globe are making use of massive, obsolete power plants, using their prime locations and award-winning architecture for mixed-use development opportunities.
It was forecast six years ago that environmental and economic conditions would force the retirement of old coal-fired plants, presenting developers with prime adaptive reuse opportunities, according to an American Clean Skies Foundation report in 2011.
The foundation highlighted the worth of these urban-based plants and their waterfront proximity in the report, dubbing them valuable opportunities for mixed-use housing, retail and office development.
Boston, Providence, Rhode Island, Austin, Texas, and London, for example, are four cities that each house power plants in various stages of redevelopment.
Boston-based development firm Redgate began a 10- to 15-year process in January to transform the 2M SF Edison Power Plant in South Boston into a mixed-use cultural center with a food hall, residences, retail and a boutique hotel along the city’s Reserve Channel.
Providence’s largest construction project, the $220M South Street Landing, is estimated to be completed in June and involves turning the city’s largest provider of electricity into offices for Brown University and a nursing education center for Rhode Island College and the University of Rhode Island. Not to mention the UK's $11B Battersea Power Plant development, known as London's largest construction project since Canary Wharf.
'A Building Built For Engineers'
Developers kicked around several ideas for Austin’s 150K SF Seaholm Power Plant, including an aquarium and an art museum, before deciding on the current mixed-use blend of building rehabilitation and a new condo tower.
“What made it worth redoing is that it’s all concrete. What made it a challenge is that it's all concrete,” Southwest Strategies Group principal John Rosato said. “It’s a building built for engineers by engineers.”
Southwest Strategies worked with a team that included State Street Properties, construction firm Capital Project Management, Centro Development and architecture firm STG Design to reactivate the seven-acre site. After being selected as the winning bid in a city request for proposals process that began in 2004, the team began to execute its vision of a Trader Joe's grocery store, a 275-unit condo tower and 215K SF of commercial space at the plant.
It took $13M and three years to remove hazardous materials from the Seaholm Power Plant and surrounding land. Building progress was halted in October 2008 during the financial collapse when financing evaporated for speculative projects like the Seaholm rehabilitation. Construction finally began in April 2013 and finished in 2016. Today, the site reuses the building's original pipes to retain rain water for irrigation in a system that allows the site to continue functioning without city water through a four-month drought.
While Rosato said his team had the idea of turning the plant into Austin’s version of Faneuil Hall in Boston or San Francisco’s Embarcadero, the Texas city’s smaller density made a retail and office combination within the plant a more viable option. The developer was in communication with several national retailers to open a flagship in the old power plant, but discussions never advanced further after several of the prospective tenants went out of business. Rosato said his team learned that every time the Austin Chamber of Commerce had a company from out of town touring potential office sites, Seaholm was usually discussed as an option.
“Eighty percent of the interest was from high-tech companies looking for a unique, open footprint,” Rosato said. “[Many] talked of better retention and recruitment tied to the added value of being in a unique building.”
Watertown, Massachusetts-based athenahealth, a healthcare technology company, has a history of locating its offices in repurposed facilities around the U.S. Its home office in New England is in a former arsenal that housed weapons, while its Atlanta offices are in Ponce City Market, one of several Sears catalog facilities nationwide that have been rehabilitated into mixed-use developments. When looking for space in Austin, Seaholm was a natural fit. The company signed an agreement to lease 104K SF of office space there with plans to eventually house 600 employees.
The Other Side Of The Atlantic
London’s Battersea Power Station sat abandoned for 25 years after a lengthy career as both an electricity provider and a cultural icon, appearing on the cover of Pink Floyd’s 1977 album “Animals” and in the Beatles’ film “Help.”
“The longer Battersea sat neglected, the more the people of London took ownership and loved it,” said David Twohig, Battersea Power Station Development Co. chief development officer.
One of the largest brick structures in the world, the power plant’s cultural impact was due in part to its original creators taking great strides to make the behemoth as architecturally pleasing as possible from its perch on the River Thames.
This was not Londoners' initial impression of the plant, however. When plans were first announced to build the coal-powered facility on the southern bank of the River Thames in 1927, it was immediately met with criticism. Londoners said the hulking brick structure would be a giant eyesore and the public was concerned the belching coal-powered plant would be a detriment to local parks, buildings and even the paintings hanging in the nearby Tate Gallery.
To assuage their worries, the planners contracted architect Sir Gilbert Scott (the man responsible for the city’s iconic red telephone boxes) to design the structure as a temple of power.
While the building garnered one of Britain’s highest architecture ratings, it was decommissioned completely in 1983 after decades of service. Preservation efforts and a push for redevelopment began almost as soon as the site shut down.
Resurrecting the British power station has taken more than a decade. Twohig knew the building well, as it was the first major building he would encounter in London on the express train into the city from Gatwick Airport. He was part of an Irish development company that purchased the building in 2006, though the site traded hands in 2012 when it was retained by a group of Malaysian shareholders after the global financial crisis.
“We were personally close to losing it a few times, but we’re lucky to have a group with experience building to such a massive scale,” Twohig said. “In Asia, it’s much more common to do a bunch of large-scale developments like this.”
Rebooting Battersea's Power
The $11.6B (£9B) undertaking includes an intricate set of infrastructure, rehabilitation and new construction projects. Twohig said one of the biggest challenges on the site is also a self-created one: constructing 4M SF of space at once, making Battersea London's largest construction project since Canary Wharf.
The contract for restoring the power plant alone is $1.48B (£1.15B), and extending the Northern Line of the London Underground to the 42-acre site has been estimated to cost $1.54B (£1.2B).
Twohig said the infrastructure tie-in has prevented the Battersea project from being similar to the same low- to mid-rise density projects the city has built for the last 80 years. Connecting to the tube network permits a progressive mixed-used scheme with a variety of tenants and will bring 25,000 people to live and work within the site upon completion and an estimated 40 million visitors annually.
“Infrastructure was the biggest challenge from day one, and working with the government to get the first privately funded tube extension was a hell of a challenge coming out of an economic panic,” Twohig said. “Getting the line extended was how the scale of this development made a quantum leap from 80 years ago into the 21st Century.”
Powering Up Recruitment
London’s power site is similarly luring tech tenants looking to add character to their workspace. At completion, Battersea Power Station will have 1.25M SF of office space, part of which will include a new 500K SF UK headquarters for Apple. Large-scale technology companies do not want big shiny buildings, Twohig said, and have been drawn to the large floor plates and worldly style of Battersea.
“Getting Apple is like going to your favorite teacher and getting a 10 out of 10,” Twohig said. “It's a validation that what we’ve spent a decade in trying to accomplish is very special.”