When it comes to large vacant buildings, developer Tony Rufo knows how to spot potential.
More than a year ago, Rufo transformed the shuttered Nathaniel Hawthorne School into the Hawthorne Lofts: 53 units of luxury loft-style condominiums. The development offers floor-to-ceiling windows, a roof deck with a stunning view of Center City and ultra-low taxes thanks to a 10-year tax break from the city. According to Rufo’s website, every unit has sold.
But 2 miles south, just around the corner from South Philadelphia High School, sits a very different kind of Rufo property. The hulking, vacant warehouse at 12th and Jackson streets, purchased by a company linked to Rufo in 2007 for $2.5 million, has been a trouble spot.
The former paintbrush factory that spans over an acre is covered with hundreds of broken windows. The facility is poorly lit. Illegal dumping and graffiti are rampant, says Kim Massare, president of the Lower Moyamensing Civic Association.
“It’s a space that people feel they need to avoid,” Massare says.
Property maintenance isn’t the only problem. Rufo’s company hasn’t paid property taxes on the warehouse since 2009 and owes the city $168,363.
Rufo is tied to other problem properties. According to city records, multiple companies linked to Rufo, including TR-Philadelphia LP and TR-Jackson LP, own at least 22 properties on which they owe the city $290,596 in back property taxes dating to 2009. The companies are linked to Rufo through court records and addresses.
One of those properties is a large, vacant warehouse in Kensington, owned by a company linked to Rufo called TR-Gretz LP, that neighbors say is a nuisance. Shortly after Kensington’s Thomas Buck Hosiery factory tragically burned down, killing two firefighters, TR-Gretz LP paid the nearly $21,000 it owed in taxes on its own Kensington factory.
Rufo also owns five properties under his own name. On those, he’s up to date on his real estate taxes.
It seems there are two Rufos: There’s the Conshohocken-based luxury residential developer who’s been behind dozens of high-end units and has been credited with revitalizing the Hawthorne neighborhood. And there’s the landowner with deadbeat companies connected to him that collect properties around the city but don’t obey property maintenance or tax laws.
When It’s Our Money reached Rufo last week, he said that he didn’t have time to talk but that he would return our call. He did not, although he did offer one comment: “Everything we do here is positive,” he said.
The city has tried to take action against Rufo and his companies, but hasn’t been successful. According to court records, eight Municipal Court cases for the failure of companies linked to Rufo to pay property taxes were dismissed because the city “could not find” Rufo and serve papers. (Which is strange — we found him quite easily.)
Multiple court cases for these companies’ failure to maintain both the Kensington and Jackson Street warehouses have not made a lasting difference. The Nutter administration declined to comment on the cases against Rufo.
The city has worked with Rufo and his companies in a different way, though: By giving him numerous tax abatements.
The Office of Property Assessment is not supposed to award abatements to property owners who owe city taxes. None of the tax debts have prevented him from getting the abatements because all of the properties are associated with different companies.
Real estate developers sometimes use different business names for different properties to limit their liability. It’s perfectly legal.
Revenue Commissioner Keith Richardson says it would be extremely time-consuming for the city to search out all of a developer’s companies before granting abatements — and even if it did, it wouldn’t be able to deny abatements, because the companies applying for them would have different tax identification numbers.
“It’s called tax planning,” he says.
If only tax planning in Philadelphia involved a little more tax paying.
This originally appeared in the Daily News.