Philly non-profit finds way to reverse blighted properties

Please note: This article is published as an archive copy from Philadelphia City Paper. My City Paper is not affiliated with Philadelphia City Paper. Philadelphia City Paper was an alternative weekly newspaper in Philadelphia, Pennsylvania. The last edition was published on October 8, 2015.
Philly non-profit finds way to reverse blighted properties

The rowhome at 1342 S. 16th St. in Point Breeze embodies Philadelphia’s problems with blight. Boarded up and encrusted with “We Buy Houses” signs, it’s an eyesore that defies the improving fortunes of the neighborhood. The structure’s owners are nowhere to be seen. 

But this troubled building is not long for this world, thanks to a pioneering nonprofit that has become a citywide role model for using a state law, Act 135, to take possession of chronically blighted properties — and a new bill in Harrisburg wants to build on that success.

Scioli Turco, a South Philly-based 501(c)4,  is one of only a handful of organizations in the state to successfully take advantage of Act 135, also known as the “conservatorship law.” This 16th Street row house would be the 10th property Scioli Turco has successfully assumed control of since it was founded in 2010. Nine other properties have already been redeveloped, including the rotting Scioli Turco VFW Post in Bella Vista that lent the nonprofit its name.

“[The VFW post] had been boarded up and was in pretty bad shape. … I started trying to approach the national VFW organization and they said, ‘We don’t own it,’ and all of the trustees had passed away,” said Scioli Turco CEO Joel Palmer, recalling the group’s inception. “My attorney and I filed an Act 135 conservancy with the building.”

The law, enacted by the state legislature in 2009, works like this: Neighbors and nonprofits can petition a judge and argue that they should become the court-appointed “conservator” of a blighted structure. If, after a four-month grace period, the judge rules that the property meets certain criteria, including a lack of owner activity and obvious structural problems, the conservator gets control of the property. If the property gets redeveloped and sold, the conservator gets back construction costs plus a 20 percent “award,” while any remaining profits compensate the former owner.

At least, that’s how it’s supposed to work. But Palmer says owners often realize that they’re on the verge of losing their long-neglected property and can tie up the process for a year or more. So, while Act 135 was designed with local civic organizations in mind, it has so far proven too risky for many of those groups.

Palmer, who is also an active member of a Bella Vista civic association, believes he was simply well positioned to take advantage of the law — he’s been responsible for roughly half of the 50 petitions filed in Philadelphia to date.

“I was semi-retired when we started, so I had the time to do it. I had financial backing, so we were self-funded, and we also had an attorney who is an expert on this law and has done most of the cases in Philadelphia,” said Palmer, who added that his connections with local contractors were invaluable. “We have a team of people who together can do this. For anyone else to do this would be a daunting exercise.”

State Rep. John Taylor, the architect of Pennsylvania’s conservator laws, recognized that while there have been some success stories, there just aren’t enough of them.

“The regular guy can’t hold out for as long as this is going to take. You have to have someone with resources and staying power to let the process play itself out,” said Taylor.

To that end, Taylor and other representatives introduced an amended version of the bill in June that would expand Act 135 to cover vacant lots (instead of only buildings), cut the grace period in half and increase the minimum “award” — in hopes of getting more groups to file claims. 

Most important, the amendment would make delinquent property owners responsible for legal fees incurred by petitioners if a judge finds their property was indeed blighted. Currently, if an owner decides to sell or repair a building before a judge’s ruling, petitioners can be left with nothing to show for their work but attorney fees and court costs — which Palmer says can run $7,500 or more.

“Right now, with the work and risk, we almost have to ask for a favor to get people involved,” said Taylor. “I want people competing for these things.”

Inexperience is also an impediment. Palmer says that “50 community groups” across the city have contacted Scioli Turco for instruction on using Act 135 or to have the organization petition for a property on their behalf.

Joe DeFelice of the Mayfair CDC says he approached Scioli Turco for help in dealing with a rowhouse that had been boarded up for nearly eight years on a tidy, working-class block of Sheffield Avenue in Northeast Philly. 

“We approached the owner about it, and he basically told us to go pound sand,” said DeFelice.

Scioli Turco walked the CDC through Act 135 and, within two months, DeFelice says, his “phone was ringing off the hook.” It was the owners, and they wanted to negotiate. The process went smoothly enough that the CDC is now pursuing another blighted property on its own.

“The [Sheffield Avenue] property is fixed up and currently for sale,” said DeFelice. 

“It’s like night and day.” 

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