Saying he failed to return all of their security deposit, the owners of The Inquirer, the Philadelphia Daily News, and Philly.com have sued Bart Blatstein, the developer who bought their former building at 400 N. Broad St.
"It appears, and we allege, that he misappropriated the money," the company's attorney, Thomas A. Leonard, said.
The company gave Blatstein $340,500 for a security deposit, with the proviso that he keep it in a separate account. The lawsuit said Blatstein mingled the deposit with his other funds. Blatstein has repaid $56,750, according to the suit.
Blatstein, who wants to turn the white tower and adjoining parking garage and surface lot into the Provence, a $700 million casino complex, declined to comment on the record, abruptly hanging up the phone.
His lawyer, William Harvey, managing partner at Klehr Harrison, said he had not read the suit, filed Thursday.
"Maybe if you rent to college boys you have to expect some damage, but most people expect to get their security deposits back," Leonard said.
"This was in good condition, and nobody is saying anything opposite to that."
Blatstein, who once sought to buy the newspapers and website, ended up agreeing to pay $22.7 million for the building and garage.
As part of the July 28, 2011, deal, the media company did not have to pay monthly rent, according to a copy of the lease attached to the suit.
On July 15, 2012, the newspapers moved to their current headquarters at Eighth and Market Streets.
When the company moved out, it was supposed to deliver the building "broom clean," the lease said. The company's project manager, David R. Binswanger, of Binswanger Management Services L.L.C., certified in an affidavit that the company did so.
In a walk-through later, both sides noticed debris in three closets and a large trash bin and trash compactor that had not been removed. The company said it sought access to the buildings to correct the problems but was denied. According to the lease, Blatstein can charge the media group for any items left behind.
The lawsuit was filed in the Philadelphia Court of Common Pleas by Philadelphia Media Network Facilities, L.L.C., a subsidiary set up to handle the building. Besides Blatstein, one of his companies, 400 North Broad Partners L.P., is a defendant.
The Inquirer's parent company, owned by a group of local investors, is now Interstate General Media L.L.C. Two of the owners, George Norcross III and Lewis Katz, attempted to settle the situation, which resulted in the single partial payment, according to the suit.
"[Blatstein] failed to live up to negotiations," said Leonard, a partner at Obermayer Rebmann Maxwell & Hippel L.L.P. "They just lost patience."