Trouble in Germantown: Potential YWCA developer is struggling to find funding

The fate of the Germantown YWCA — a vacant neighborhood landmark and eyesore — will remain in limbo for at least a few more weeks.

Under the terms of a reservation letter, real estate developer KBK Enterprises has until the end of the month to demonstrate it has the necessary funding to restore the city-owned building on Germantown Avenue. If it can’t, and the letter expires, the Philadelphia Redevelopment Authority will “reevaluate the next steps for the property,” said spokesperson Jamila Davis. 

That could include rescinding its selection of KBK. 

It would be the second time the Ohio-based developer was removed from the high-profile redevelopment. In 2021, the city cut ties with KBK after a group of residents pressured the PRA to change course. They argued KBK had failed to show it had the financial capacity to follow through on its proposal, and that the city should solicit a new round of bids from developers. 

The city selected KBK in 2016. The company planned to convert the historic building into a mixed-use property with two dozen apartments and retail and commercial space on the ground floor. But the project never got off the ground.

KBK later applied for city funding to overhaul the YWCA, but was not awarded any, said Davis. She said the company has had a “challenge securing funding” and is currently “researching other funding opportunities.”

Some neighbors say it’s time to hand the project to a new developer who can make the blighted building a neighborhood asset again. 

“I call it a charade because there’s no hope that I can see that KBK is going to be awarded this right to develop,” said Germantown zoning attorney and activist Yvonne Haskins. 

For more than a century, the YWCA was a community anchor in Germantown. It’s where countless children learned to swim. The social-service agency, the first to integrate in Philadelphia, also hosted clubs and classes and sponsored neighborhood events, at one point serving as a hub for civil rights. 

In 2009, the PRA foreclosed on the property after its previous owner, Germantown Settlement, failed to repay a $1.3 million loan the authority awarded the nonprofit to turn the building into a community center. 

Settlement was insolvent when the city issued the loan and later filed for bankruptcy due to financial mismanagement of millions in taxpayer dollars. 

KBK did not respond to multiple requests for comment. 

City Councilmember Cindy Bass, whose district includes the YWCA, continues to support the developer, a political backer of hers. Her approval is critical to the future of the YWCA because City Council must pass a resolution for the redevelopment authority to transfer the building’s ownership to KBK or any other developer. As a result of councilmanic prerogative, Bass would be the one to introduce the measure. 

“Based on the documented portfolio of KBK’s completed development projects, there is no question the developer is wholly qualified to tackle this one. KBK, therefore, should be able to secure funding to undertake this project through satisfactory completion,” said Bass in a statement. 

“However, in the event another developer might need to be selected, I am committed to ensuring Black and Brown developers have the opportunity to be considered.” 

Bass has claimed the city discriminated against KBK, a Black-owned company. She has also said the PRA falsely told KBK the project required historical tax credits to be completed, and that the company never had proper access to the site, claims the authority disputes. 

The YWCA is one of three large vacant buildings on Germantown Avenue, one of the neighborhood’s main commercial corridors, that residents have bemoaned for years. 

Germantown High School, which sits up the street from the YWCA, has remained empty and undeveloped since it was closed in 2013. Nearby Germantown Town Hall, which dates back to the 1920s, has also sat untouched for years. 

Haskins, the zoning attorney, said the properties send the wrong message to Germantown residents and those passing through the neighborhood, which is experiencing a noticeable uptick in development activity. 

“It just makes us look blighted and failed,” said Haskins.