blight

Does the city raid L&I's demolition budget for economic-development projects?

City-affiliated nonprofits rarely repay the demolition costs.

DEMO JOB: L&I says it hasn’t been paid for the costly demolition of St. Boniface Cathedral at Norris Square that made way for a nonprofit group’s affordable-housing project.
Neal Santos

One year after the botched demo job that led to the Market Street building collapse, the city wants the public to believe it has made significant improvements to the Department of Licenses and Inspections, the city agency charged with safeguarding the public from crumbling buildings.

Along with new regulations that theoretically tighten construction-site inspections, the city has boosted L&I’s emergency-demolition budget by half, to $9 million. This perpetually scarce money is used to preemptively tear down dangerous structures before they collapse on their own. But little attention has been paid to how L&I has spent this money — or been ordered to spend this money — in the past.

According to records obtained from L&I, the agency has spent hundreds of thousands of dollars supposedly reserved for emergency demolitions to pay for the costs of tearing down buildings owned by various city-affiliated nonprofits. In some instances, L&I has been told to “eat” the costs of clearing away buildings in preparation for redevelopment projects, while in others, the agency has demolished properties that the nonprofits could not or would not maintain. 

Although L&I is supposed to bill property owners for demolition costs, in practice, City Paper found these costs were rarely reimbursed by the nonprofits that benefited from the department’s work.

One of the costliest such projects was the demolition of St. Boniface Cathedral, a brownstone temple that loomed over Norris Square in Kensington for nearly 140 years.  But in 2006, with a dwindling congregation and an estimated $7 million bill for structural repairs, the Archdiocese elected to try to sell the building. 

It found an eager buyer in the Norris Square Civic Association (NSCA), a nonprofit hunting for land to build a multimillion dollar affordable housing and educational complex. The location was perfect, just yards away from NSCA’s headquarters — the only problem was the crumbling church building.

“[The church] had big brownstone blocks and they were coming out,” said NSCA Executive Director Patricia De Carlo. “Pieces of the stone were falling, and it was dangerous. … It would have killed you.”

De Carlo and the board of directors closed on the property in 2007, before funding for the actual redevelopment project had been secured. The cathedral sat for years, surrounded by an apron of scaffolding and boards designed to catch falling pieces of debris, while NSCA put together nearly $5 million in state and federal grants to support the construction of seven units of affordable housing on the church site. 

“We did engineering reports that determined [the church] couldn’t be salvaged,” said De Carlo. Asked why L&I was brought in to execute the demolition, she said the story was “complicated” without providing further details.

Complicated indeed. Records indicate NSCA didn’t plan to use any of the money the organization secured to tear down the church itself. In 2008, De Carlo cut a deal with then Director of Commerce Andrew Altman to have the city pay demolition costs by agreeing to reduce the sale price of a massive NSCA property at Front and Berks streets that the school district wanted to use for the construction of a new high school in Kensington.

“After the transfer of the property described above, the City will either directly or through a third party demolish the former Saint Boniface Church,” wrote Altman in a 2008 letter, obtained by City Paper, which also agreed to purchase the Front Street property from NSCA for $2.1 million. 

It was a dubious bargain for the city — De Carlo had originally asked for $3.9 million in exchange for the Front Street property, which NSCA had acquired seven years earlier for just $500,000. Nevertheless, in 2011, L&I spent $482,000, or roughly one eleventh of its $5.5 million annual emergency-demolition budget, tearing down St. Boniface. 

Sources close to that deal say the understanding was that the demo costs would eventually be covered by money from the city’s general fund. But L&I Commissioner Carlton Williams says his department “has not been paid to date” for those costs. 

According to L&I records, the emergency-demolition budget was also used in 2009 to demolish a fire-damaged building that the Latino social-service agency Asociación Puertorriqueños en Marcha had owned since 1993. The agency did not respond to a request for comment, and the city was unable to confirm whether the cost of that demolition had been repaid as of press time.

Members of the nonprofit community familiar with the practice of using L&I’s budget to cover costs defended the expenses in certain circumstances, saying it made sense to provide an extra resource to organizations that are mainly funded by the city.

But draining the fund for emergency demolitions can be problematic because the city is already unable to keep up with an ever-growing backlog of “imminently dangerous” buildings, mostly held by private owners. L&I steps in, in most cases, to demolish dangerous buildings because the former owners are nowhere to be found. Few of these owners ever repay L&I for demolition costs — the agency has accrued over $16.5 million worth of unpaid bills for demolition over the last two years alone, according to the Revenue Department.

Conversely, the not-for-profit entities mentioned in this story have well-established relationships with the city.

In some instances, L&I has been forced to come to the rescue of nonprofits that got in over their heads assembling real estate. During the 2000s, the East Parkside Community Revitalization Corporation (EPCRC), a West Philly based nonprofit, acquired at least 62 properties in one neighborhood. While some of these properties were eventually redeveloped, the city has demolished four buildings owned by EPCRC over the last two years alone, at a combined cost of $69,000. 

That group appears to have ceased operations sometime over the last three years, and the costs for the demolition of its properties have not been repaid.

The city also spent over $11,400 to demolish a row home at 1417 North Frazier St. in West Philadelphia in 2013. The House of Umoja, a social services nonprofit run by Congressman Chaka Fattah’s mother, Falaka Fattah, had acquired that property in 1997 for an ambitious redevelopment project.

“The House of Umoja is trying to replicate one block of an ancient African city,” said Falaka Fattah. “The city Djenné was known for it’s beautiful architecture.”

Fattah said her group had acquired 23 properties on the same block, but was unable to come up with money to either renovate or demolish any of those properties.

“The reason the property had to be torn down was simply because we weren’t able to raise money fast enough to keep the city from tearing it down,” said Fattah.

However, financial disclosure forms filed by Umoja in 2011, the most recent year available, showed the group recorded $4.5 million in revenues over a six-year span, with real estate holdings totalling over $614,000.