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Urban Retrofitters

The third-floor boardroom of Urban Outfitters Inc., with its magnificent reclaimed-white-pine-and-hemlock table and its sky-blue view of the Delaware River, has been a busy scene for the soon-to-be heads of hip.

Bob Rarrick, Urban Outfitters Inc. corporate facilities manager, looks across the Navy Yard to Building 25, which the firm is renovating. (MICHAEL S. WIRTZ / Staff Photographer)
Bob Rarrick, Urban Outfitters Inc. corporate facilities manager, looks across the Navy Yard to Building 25, which the firm is renovating. (MICHAEL S. WIRTZ / Staff Photographer)Read more

The third-floor boardroom of Urban Outfitters Inc., with its magnificent reclaimed-white-pine-and-hemlock table and its sky-blue view of the Delaware River, has been a busy scene for the soon-to-be heads of hip.

Jeff Spotts couldn't help but bring it up the other day as he walked through a nearby construction site, the renovation of yet another old Navy Yard building for the company's ballooning headquarters: a 54,000-square-foot stunner whose five-ton steel staircase will be its showstopper.

"Every single week," said Spotts - ascending a temporary staircase that looks like a massive Lego prop, rising two stories in what used to be home to Navy plumbers, platers, and riggers - "it seems like there's eight to 10 more people."

They are new employees, he said, who are being corralled into the boardroom for orientation.

"Every week," the senior construction-project manager added, with a breezy confidence that comes of being part of a company that's got game. "It's a good sign."

Urban has 338 Urban Outfitters, Anthropologie, Free People, and Terrain stores worldwide and two wholesale designer-clothing lines, all growing with what seems like unstoppable, if carefully calibrated, momentum.

Despite the global economic malaise, Urban's international workforce has increased by thousands in recent years, and its headquarters staff has doubled since it moved to the Navy Yard in 2006 from sites across Center City.

Now, the company that got its start as a catch-all shop near the University of Pennsylvania in the hippies-rule 1970s, whose customers today are young, willing, and able to spend on pricey-but-cool wares, is pouring $25 million into yet another expansion at the Navy Yard to keep pace with its ambitions.

The rehabilitation of what will be its sixth building there gives Urban more breathing room and buttresses its growing status as patron saint of the Navy Yard, the former war-machine zip code slowly undergoing redevelopment.

"Urban Outfitters is an absolute cornerstone of everything we're doing at the Navy Yard," said John Grady, executive vice president of the Philadelphia Industrial Development Corp., which negotiated the latest deal with Urban.

At the start of the year, Urban owned four buildings and leased a fifth, its arrangement since moving there in 2006. In a deal finalized in February with PIDC, the company secured options to own six more.

Urban immediately bought one, Building 25, and began restoring it, paying the city a minimum of $550,000 in return for the multimillion-dollar upgrade, Grady said. It should be shipshape for employees July 18.

But under the terms required by PIDC, Building 25 must also be accompanied by renovation of an idle drydock. Urban is crafting it into a public amphitheater, dining area, and walking path framed by old rail tracks.

Last week, the company began assembling the centerpiece of the 450-foot-long dock: a floating garden. Vegetation forming the letters U-R-B-N will rest on the water's surface, visible from jets approaching Philadelphia International Airport.

Concerts may one day be held around the tip of the dock, where a grassy knoll and steps will form the small amphitheater. Building 25 is on one side of the dock; another massive Urban building that houses employee yoga facilities, a cafeteria, and similar amenities is on the other. An outdoor restaurant for lunch hours will extend onto the dock from the company-owned gourmet cafe already in use.

"The drydock area is going to be spectacular," said David Ziel, Urban's chief development officer. He oversees all construction projects, including new stores and renovations at the Navy Yard.

"It's really the urban version of a park," said Ziel, a former University of Oregon basketball player whose work uniform is sneakers, shorts, and a vintage Phillies T-shirt. He worked for years at Nike and then at the Chico's chain before Urban recruited him to handle its expansion goals.

On Thursday, Ziel was in Miami to receive the American Institute of Architects' sought-after Institute Honor Award for the work Urban has done on Navy Yard buildings.

"Genius," the AIA jury called the cavernous buildings drenched in natural light. Their walls of century-old windows were restored, and chipping paint sealed, giving the campus the same bohemian feel that Urban's merchandise has.

The company; its design team, which included founder and chairman Dick Hayne; and its architect, Meyer, Scherer & Rockcastle Ltd., stayed true to that approach for Building 25.

As its stores illustrate, the company adores breathtaking staircases. So Urban installed a steel one that weighs 10,900 pounds and is mostly supported by beams that jut into the side of the wall so it appears to float. To support the weight, 12 pilings of recycled galvanized steel were drilled deep into marshy ground. Each pier was screwed 35 to 40 feet into the earth, in 10-foot sections.

Aesthetic enhancements aside, there is a practical objective to the company's fastidious focus on acquiring and restoring more buildings.

"The employment projections are big," Ziel said. "That's why we're doing the options."

Sales at Urban's stores and online have increased across the board an average 23 percent a year over the last decade. Last year, it opened 33 stores in North America and Europe, its newest frontier.

Urban's manufacturing is done mostly overseas. But everyone from its chief executive officer down to its designers are at the Navy Yard offices, where the workforce has almost doubled, from 634 in 2006 to an estimated 1,200 by the end of this year, according to departing chief financial officer John Kyees.

The company is opening 45 stores this year - Ziel heads to Europe this week for two planned in the United Kingdom and one in Germany. And in 2011, it plans to launch two new brands: a still-unnamed wedding store and a chain that will showcase its Leifsdottir clothing line.

Urban is exempt from paying various taxes by being in one of the Navy Yard's Keystone Opportunity Zones. Through 2025, it will not have to pay state corporate taxes or city real estate, business privilege, and sales taxes, Grady said, but its employees must pay the city wage tax. He said he believed the company was paying back in many other ways.

"Urban Outfitters is a perfect example of a company that has now invested $140 million of their private capital in the renewal of these assets," he said.

CEO Glen T. Senk said it was exciting to report to work at the Navy Yard - as exciting as building any new store within the company.

"It's always a very emotional, thrilling moment to build things," said Senk, who was installed a few years ago as part of a succession plan for company founder Hayne.

What happens when Urban runs out of things to build?

"I don't think we'll run out," Senk said. "It's a big world."

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