Warehouse was on back burner for years

The long-vacant Kensington warehouse that burned down this week, destroying at least seven nearby homes, had run up more than $300,000 in unpaid real estate taxes over 25 years, but was never put up for a sheriff's sale, city records show.

For the last year, with support from the Street administration, a social-service agency had been working on a proposal to redevelop the property as housing for the elderly and homeless. But those plans apparently went up in smoke early Wednesday as the building burned to the ground.

City officials said yesterday that they will complete whatever demolition work the fire has left undone, and finally put the property up for sale at a sheriff's auction in September.

City real estate records list the owner of the property, at H and Westmoreland streets, as the Philadelphia Authority for Industrial Development (PAID), the financing arm of the city's primary economic development agency.

But PAID officials said yesterday that the agency never really controlled the property and had no responsibility for its condition.

Jim Fluck, executive vice president of PAID, said his agency became the nominal owner of the property in 1973 to provide tax-exempt financing that allowed Ayres-Philadelphia Inc. to acquire the building for its blanket-manufacturing business.

But Ayres-Philadelphia went bankrupt in the early 1980s, Fluck said, and the real ownership of the building stayed with the entities that held its mortgage - initially Philadelphia National Bank, then other mortgage holders, finally an investor named George Koliber, who now lives in Florida. "He skipped town," Fluck said. "He literally abandoned the property."

Koliber did not return a call to his home in Florida.

Since 1982, real estate taxes on the property have gone unpaid - starting at $8,554 a year in 1982, declining to about $6,000 a year for most of the 1990s and 2000s. With interest and penalties, the unpaid balance now stands at $324,942.

That's significantly more than the building was worth, according to the city's latest assessments. Before it burned down, the city had certified its current market value at $195,000.

A spokeswoman for the sheriff's office, Cathy Hicks, said yesterday that the city Law Department had finally moved in May 2006 - more than a year ago - to put the building up for a sheriff's sale, where it would go to the highest bidder at a public auction.

But the sale was repeatedly postponed - six times, Hicks said - at the request of the city Law Department.

City Managing Director Loree Jones suggested last night that the delays over the past year resulted from the city's effort to promote the building's redevelopment as affordable housing.

But she said she did not know why the building had not been put up for sale earlier in the Street administration, or under the three previous mayoral administrations, when its tax bill began climbing.

Staff writer Chris Brennan contributed to this report.