New controversy for Redevelopment Authority in Point Breeze

Reeling from negative publicity over its handling of a trash-filled lot in Point Breeze, Philadelphia's Redevelopment Authority has a new controversy on its hands there.

Real estate investors are complaining that the city plans to take their land for affordable housing in the up-and-coming neighborhood just south of Center City, depriving them of the ability to build, profit, and pay taxes.

"The city has dozens of lots. Why don't they do something with them first?" asked Turlough Harte, whose company, Harte Investments, owns two parcels in the 1200 block of South 17th Street that are on a list of 43 properties slated for takeover by PRA.

Indeed, the city or other government agencies own 311 lots in the neighborhood.

But PRA officials say they need to acquire about 20 parcels to assemble, along with city-controlled properties, a package of 43 lots to be developed into affordable housing. The private parcels - including some that are not tax-delinquent - would be acquired through eminent domain, using $1.7 million in federal stimulus dollars.

In a statement, Paul Chrystie, a spokesman for the Redevelopment Authority, said the agency wanted "to preserve affordability in an appreciating neighborhood" and needs lots near each other to develop them efficiently.

Point Breeze is a sensitive topic for PRA, which is still recovering from a story that grabbed headlines around the world when the agency chastised developer Ori Feibush for cleaning up and landscaping a trash-filled lot that PRA owns next to his new coffee shop at 20th and Federal Streets.

It's no surprise that Feibush - who, with partners, owns several Point Breeze properties threatened with takeover - is in the middle of the current controversy. He sees himself fighting a war against a city that, in his view, seems committed to driving business away.

He said the legislation introduced to take his property is just the latest effort by Councilman Kenyatta Johnson to cater to a small but vocal group in Point Breeze. Feibush said the group seeks to kill development out of fear that a gentrifying neighborhood will drive longtime residents out of the area, as happened in the nearby Graduate Hospital neighborhood.

"Kenyatta is listening to a couple of fearmongering residents who by no means speak for the general community, either new or old residents, and is using that pressure as an explanation to basically freeze all development for his community," Feibush said.

Johnson denies that. The PRA, he said, came up with the list of properties for the project months before he took office in January 2012.

Johnson said he is committed to maintaining affordable housing in Point Breeze, where he grew up and lives. To do that, he said, PRA needs to bundle the properties in a way that makes sense to a potential developer.

"It makes the development process more coherent and easy," Johnson said.

The city would have to pay fair market value to private owners such as Feibush and Harte.

Feibush, however, says the amount the city pays can't compensate him and his partners for money already spent in Point Breeze.

"I put my life savings - my clients put their life savings - to buy property in a neighborhood they were willing to take a risk in," Feibush said, "and now the city has decided, 'You know what, we like those lots, too. We're going to compete with you.' "

PRA's Chrystie says the agency has used eminent domain for private nondelinquent property before.

"Condemning privately owned land to assemble parcels to support affordable housing is a standard practice over several decades," Chrystie said. The PRA "is pursuing acquisition now because, as the neighborhood appreciates, the ability to acquire parcels to preserve affordability lessens."

The legislation must still pass City Council. After that, PRA would put out a request for proposal to potential developers, with units starting about $150,000.

Noah Ostroff, a real estate broker with a client who owns one of the PRA-targeted properties, said the strategy does not make sense.

"They don't need to take over properties that are slated to make the neighborhood better," Ostroff said.

John Kromer, a former city housing official who now teaches at the University of Pennsylvania, said the city sometimes must intervene to maintain affordability.

"On the face of it, I think what the PRA is doing is a sensible approach," Kromer said.