E-mail shows Philadelphia Parking Authority was told of lawyer's dual roles

Top executives at the Philadelphia Parking Authority - owner of the site for the proposed Family Court building - were told more than two years ago that a lawyer for the courts planned to join developer Donald Pulver on the $200 million project, e-mails obtained by The Inquirer show.

"We contemplate that Jeff and Don will jointly develop the project," lobbyist Lois Hagarty wrote in a March 2008 e-mail to Vincent J. Fenerty Jr., the authority's executive director.

"Jeff" was a reference to Jeffrey B. Rotwitt, a prominent real estate lawyer hired by the court system in 2006 to find a site for a new courthouse.

"My intention and Don's intention was to be open and honest on the transaction," Hagarty said Thursday. A former state representative, she wrote the e-mail in her capacity as a lobbyist for Pulver.

But Fenerty and other authority staff members say a passing reference in the middle of an e-mail was hardly a real disclosure that Rotwitt and Pulver had become codevelopers on the 14-story courthouse project at 15th and Arch Streets.

Fenerty said he took it to mean simply that Rotwitt and Pulver would be working together to make sure the project was completed, just as he and his staff were trying to do.

"We were working to develop the project, too," Fenerty said. "It doesn't say they are partners. That didn't throw up any red flags to me. It just didn't."

If the message had gotten through, the debacle that now threatens the Family Court project could have been avoided.

The e-mail was sent eight months before Pennsylvania Chief Justice Ronald D. Castille, on Rotwitt's advice, began paying fees now totaling about $12 million without any signed development contracts.

The Family Court deal collapsed in May after The Inquirer revealed that Rotwitt was collecting fees on two sides of the deal - from the courts and from Pulver. Castille, who was personally supervising the project, says he had no idea about that until The Inquirer started asking questions.

Castille says the arrangement is a conflict because he was depending on Rotwitt's advice on what to pay Pulver and other consultants. The FBI is now investigating the deal.

Fenerty, too, has said he never knew about the Pulver-Rotwitt arrangement until he read about it in The Inquirer. He has harshly criticized Pulver, saying the developer this spring denied any deal with Rotwitt and sent him a letter that was carefully worded to keep their deal hidden.

Pulver and Rotwitt, though, have said they weren't trying to keep their codevelopment role a secret.

On Thursday, a Pulver spokesman said the Parking Authority's interpretation of the e-mail "defies logic and common sense."

"It couldn't have been more clear," said spokesman Mark Nevins. "There are only so many ways you can read that. It's more likely they read it and had no problem with it."

By March 2008, when Hagarty wrote the e-mail, Rotwitt and Pulver already had reached what they say was a handshake deal to split development fees. A month earlier, they had sent requests for proposals to design firms saying they would form a joint venture to build the courthouse.

Pulver had held development rights to the authority parking lot since 2003, but a number of deals had fallen through. Castille settled on that location for the new Family Court building in 2007.

Hagarty wrote to thank Fenerty for giving Pulver another extension of his development rights. In return for those rights, Pulver had agreed to build an underground parking garage on the site. In the e-mail, Hagerty said that at most, the garage would have space for 200 to 250 cars.

Besides the line about Pulver and Rotwitt "jointly" developing the building, she said the design work would take 14 months and the construction would take 30 months.

"Jeff and Don will prepare the documentation that fleshes out the overview I've just outlined," she wrote.

In his response, Fenerty only objected to her reference to 200 parking spaces. He said the minimum was 250.

"This was the discussion which Jeff and the PPA staff had a few weeks ago. Nothing was mentioned about a 200-car garage," Fenerty wrote.

In an interview, Hagarty said she could not remember why she decided to include the notification about Rotwitt.

"I assumed all parties knew or would know going forward that Jeff Rotwitt was a codeveloper," she said. "There was no way they were keeping it a secret, to my knowledge."

Dennis Weldon, the authority's lawyer, also got the e-mail. He said the "jointly develop" reference was more of a throwaway line than a real attempt to draw attention to the partnership.

"What does that mean?" he said. "Are we really supposed to believe that Jeff and Don were 50-50 partners in a $200 million project?"

Fenerty and other Parking Authority officials say they did not pick up any hints of Rotwitt's dual roles until earlier this year, during a tussle over Pulver's obligations.

As part of the deal to build the garage, Pulver was obliged to provide a $3.5 million maintenance fund.

In early 2010, Rotwitt tried to get Pulver off the hook for that fee, saying it was too high and might kill the whole project. He sought a sympathetic ear in Rina Cutler, a deputy mayor who once ran the Parking Authority.

At the authority, executives were puzzled and indignant: Why did Rotwitt care so much about Pulver's expenses?

"I told Rina Cutler, I don't understand what Rotwitt's doing," Fenerty said. "He's not the developer, so why is he in my business?"

Fenerty and other authority officials called in Pulver and asked him if Rotwitt had a piece of his deal. They say he adamantly denied it, and said Rotwitt's role was "keeping the political dogs at bay" to protect Pulver and the project.

When they asked him to clarify Rotwitt's role in writing, Pulver wrote a letter March 5 saying that he was "working with" Rotwitt, but that the lawyer didn't have a stake in his company, Northwest 15th Street Associates, which he formed to build the courthouse.

The letter was technically accurate, but incomplete. Rotwitt had set up his own company, Deilwydd Property Group FC L.L.C., to work his end of the development deal in partnership with Pulver.

At the time, Fenerty said he was reassured that the letter, also sent to court officials, settled the issue. Now he considers it misleading.

Pulver said he had no intention of misleading anyone. He says he thought that he was being responsive to the question he was being asked.

When he wrote the letter, Pulver was in a vulnerable position. Gov. Rendell had not yet committed to releasing the $200 million the legislature had appropriated for the project. Without a signed deal to build the courthouse, he needed an extension of his contract with the Parking Authority, due to expire at the end of June 2010.

"If this had come out, the deal would have collapsed," Fenerty said.