A bubbling of tech firms in Philadelphia's Old City

What a great day it was at Dmg Ctrl Ltd., a tech company in Old City.

Cofounder Jason Allum pulled the tap on a new mini-kegerator, a little dorm-size fridge perfectly designed to hold one keg of beer that had been installed that afternoon.

Mostly foam, sadly. "We have to work on that," Allum said, a frothy plastic cup of Yards IPA in hand to toast a 5 p.m. finish to Monday's workday.

Housed on an upper floor of a former factory on North Third Street, Dmg Ctrl Ltd., with its seven employees, is one of 21 tech companies in the neighborhood, enough to constitute a cluster in Old City.

It's not California's Silicon Valley, or New York's Silicon Alley. Instead, this gaggle of geeks is flocking to N3RD Street, a geeky play on words that both describes the nerdy workforce and turns the "E" into a reversed "3", perfect for a password.

"They like to be around similar folks," said Graham Copeland, executive director of the Old City District, the quasi-governmental agency that surcharges property owners to underwrite cleaning and marketing. The neighborhood stretches from Front Street and the Delaware River to Independence Mall, and from Walnut Street north to Vine or Spring Garden.

"There's a colocating factor. They like the cool spaces — a lot of it is postindustrial, tall ceilings, brick walls," Copeland said.

Maybe parts of the Old City street scene have had a bad rap for too much boozy weekend carousing. But the real action in Old City today is well above the street ruckus. On the upper floors of old manufacturing and warehouse buildings, a nascent tech scene is flourishing, along with related disciplines that both use technology and feed from it.

Helping to forge a creative hub, too, are 13 design studios, 17 marketing agencies, 18 architectural and engineering firms, and 13 photo, video, and commercial art businesses, with most of the companies having some sort of Web component.

Why Old City? These days, it can't claim to be Center City's hip urban frontier, where supercheap space provides an opportunity for the young, the cash-poor, and the creatively ambitious. That train has left for Northern Liberties and Fishtown.

Rents are lower, slightly, in Old City compared with Center City — $19 per square foot of office space compared with $22, according to Loopnet, a listing service. But other factors matter more.

Its central location is key for the mostly young, mostly male workforce, equi-biking distant from the South Philadelphia, West Philadelphia, and Fishtown neighborhoods where they like to live.

Public transit is convenient, especially the subway stop at Second and Market Streets, as are the happy threesome of a thriving gallery scene, boutique shopping, and technology, fueled by a great bar culture.

Some things are almost pro forma: beer in the office, coffee (also Java, the computer language), endless Red Bull, exposed brick, jeans, and the omnipresent ping-pong table

Old City's roots in Philadelphia's historic past might seem contradictory with its current forward-thinking vibe, but the tech crowd working on Web and mobile innovations sees its work as a continuation of the traditions, not a departure from them.

"This is Ben Franklin's block," marveled WebLinc L.L.C. cofounder Darren Hill, scurrying among the three buildings his e-commerce business owns on Third Street. Hill lists Franklin's inventions and then broadens his view: "This is the neighborhood where intellectuals invented our country."

On a more practical level, "it's not unfamiliar territory," said Alex Hillman. "Most people have been here at some point in their lives."

Hillman is the founder of Independents Hall, where, for a fee, independent tech contractors can park their laptops and collaborate, or at least not feel as isolated as working home alone. And unlike Starbucks, the coffee is free.

"The neighborhood reminded me about what I loved about San Francisco and European cities," said Scott Wasserman, founder of a growing mobile-technology business, AppRenaissance L.L.C, which now occupies a storefront on a tree-lined block just off Third Street. "You are away from the real intensity of the city, but you have all the benefits of the city."

The company's chief executive, Bob Moul, a serial entrepreneur who already made millions selling his cloud computing business, Boomi, to Dell Inc., makes his way here daily from the suburbs. He supervised 1,200 employees in a previous life, but Moul has ditched the corporate office-park culture and a private office for the tech community's more egalitarian ethos.

His desk is one of a dozen lined up side-by-side in a room rich with natural light and gallery space in the front. Moul sits next to an intern and across from Wasserman.

"One of things about being the boss and sitting in the bullpen is that there's no place to hide," said Moul, who heads Philly StartUp Leaders, a non-Chamber of Commerce for the geek set.

AppRenaissance rents its space from architect Wesley Wei, one of the early investors in the neighborhood.

When Wei moved into Old City in 1977, "it was much more rugged. There were a lot of original businesses," he said, ticking off the machine shops, the restaurant-supply stores, the light manufacturing, the pharmaceutical-packaging firms, and the canvas-textile manufacturers that specialized in awnings for the retail trade.

But, as manufacturing declined, the space became available to urban pioneers, with the first tax credit for residential development starting in the late 1970s. The early-1980s recession slowed development, but "along with the economic downturn, there were opportunities," Wei said. Luxury furniture and lighting companies set up shop in space that had become less costly, a pattern repeated in each recession, including the recent one.

The current tech boom, Wei said, "suddenly happened over the last two or three years."

In the mid-1990s, when Ian Cross established one of the area's older tech companies, I-Site Inc., people advised him to open his Web marketing business in Bala Cynwyd for easy car accessibility and a suburban Philadelphia address.

But he and the kind of people he wants to recruit "enjoy this kind of space," said Cross, sitting in his high-ceilinged quarters.

The companies' density is its own draw, Cross said. These days, recruiting can be as easy as walking across Third Street to National Mechanics, the default neighborhood watering hole, owned by the brothers who operate WebLinc on its second floor.

"Why should I pay a staffing agency a 20 percent finder's fee when I can just go to the bar and have a beer?" he asked.

Fundamental to Third Street's culture is Independents Hall, which acts as a quasi-incubator with Hillman as ringmaster, practicing his particular theory of community-building through beer, game nights, software-user-group meet-ups, and theme parties like Wednesday's Independents Day barbecue.

"The problem with traditional networking is that it's highly transactional," Hillman said. "We provide a blank canvas for building a relationship."

Some Indy Hall contractors become full-time employees for nearby firms, while others help one another land temporary gigs at companies such as I-Site across the street or Dmg Ctrl upstairs.

Indy Hall alums include Dmg Ctrl cofounders Allum and Mac Morgan, who started out there before getting their own space.

"There's a lot of community stuff going on," Allum said. "It's a good place to scout for talent. They are people I would hang out with anyway. Why not be one floor above them?"