Luxury-townhouse developer files for Chapter 11 bankruptcy

The developer of the luxury Parke Place townhouse project in the 1300 block of Bainbridge Street has filed for Chapter 11 bankruptcy protection but says he remains "100 percent committed" to completing the work there.

In an interview Wednesday, Donovan Clarke, of Clarke Real Estate Development L.L.C., of Philadelphia, attributed his decision to file for Chapter 11 reorganization to a "timing issue" with his lender.

The bankruptcy follows mortgage-foreclosure actions by Clarke's original financial partner, the Dietz & Watson Defined Benefit Pension Fund for workers at the Northeast Philadelphia cold-cuts company, which resulted in listing several of the Parke Place properties for sheriff's sale.

"The lender opted not to move forward with the project, but we have identified a new funding source to complete the project," Clarke said.

He declined to identify the source of the new financing, "because you never say it is a done deal until it is."

"I'm pretty confident, however," Clarke said, adding that the bankruptcy filing would give him time to reorganize, and that he hoped to resume construction in the fall.

Since Clarke unveiled the project in November 2013, three of Parke Place's 22 4,300-square-foot units have gone to settlement, all in 2014. Those townhouses sold for $1.1 million, $1.12 million, and $1.225 million, according to Trend Multiple Listing Service.

Three other sales are pending, for $1.25 million, $1.299 million, and $1.4 million. Five more townhouses are either temporarily off the market or withdrawn from the market, Trend MLS data show.

Clarke, a former investment banker-turned-developer, said he would continue to ask $1.2 million and higher for the remaining townhouses, which come with the city's 10-year tax abatement for new construction.

Mike McCann of Berkshire Hathaway Home Services Fox & Roach Realtors, who handled the marketing of Parke Place for Clarke, described the townhouses as "of the highest quality and design."

"People loved it and wanted to buy," McCann said.

The units feature the open floor plan desired by young urban buyers and empty nesters. The living rooms have 15-foot ceilings with 9-foot-by-10-foot windows.

Parke Place's neighborhood, Hawthorne, was once dominated by the Martin Luther King public-housing project in the 1300 block of Fitzwater Street.

Since the high-rise housing project was razed in 1999, the neighborhood's fortunes have been on the rise. It's a draw for young singles and families with small children, as well as for-profit developers big and small, including Carl Dranoff and his $70 million 777 South Broad luxury-apartment building.

By 2010, Hawthorne had become "the fastest-growing area of Center City that no one has ever heard of," said Berkshire Hathaway Home Services Fox & Roach associate broker Mark Wade, who sold a 53-unit condo project at the old Nathaniel Hawthorne School there.

Mickey Pascarella, of Keller Williams Real Estate in Center City, said prices in Hawthorne range from $155,000 for studio-sized condos to $800,000 for a single-family home with parking.

Clarke's townhouses, though larger than many, are priced about 40 percent higher than the average, Pascarella said.

After smaller projects in Grays Ferry, Point Breeze, Graduate Hospital, and Queen Village, Clarke also found his way to Hawthorne.

Between 2010 and 2013, he constructed a 12-unit condominium building and two townhouses less than a block from Parke Place.

"It was unfortunate this happened," Clarke said of his problem with Parke Place, "but I believe we have found a partner with whom we can get this done."