‘A negative influence on our community’: Developer looks to take control of Germantown Y

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Developer Ken Weinstein has filed a petition to take possession of and rehabilitate the Germantown YWCA, a blighted city-owned building that has sat vacant for two decades.

If a judge sides with Weinstein, his company could become the Y’s conservator under Act 135, a designation that could also see the historic property sold to a new developer.

In 2016, the Philadelphia Redevelopment Authority selected Ohio-based KBK Enterprises to revamp the four-story brick building on Germantown Avenue. And the company is still working to secure funding for its $18 million plan to transform the Y into a mixed-use development, a source of deep frustration for many residents who desperately want to see the property put back into use.

“It’s a negative influence on our community and it continues to deteriorate. And as it deteriorates, it’ll get more and more difficult to restore it and reuse it,” said Weinstein.

Filed last month in Common Pleas Court, the petition includes a preliminary to-do list that Weinstein would complete if the conservatorship is granted. It calls for more than $130,000 worth of exterior improvements, including roof and brick work, bracing retaining walls, patching holes, and scraping and painting window trims.

The scope could expand to include interior work as well.

A virtual hearing is scheduled for Dec. 22.

Weinstein, who owns several properties to the north of the YWCA and has developed several historic properties in the neighborhood, said he is not interested in taking over for KBK, a company he said he supported when it was selected to redevelop the century-plus old building.

“There’s developers out there that are better suited than even we are, even though we have years of experience. There are developers who are intimately involved with Low-Income Housing Tax Credits that know how to get it done, and it should be in their hands,” said Weinstein.

KBK declined to comment.

A PRA spokesperson said the city agency does not comment on pending litigation.

Weinstein’s petition comes as KBK seeks state and city funding to bring 45 units of affordable housing to the former YWCA, the first social-service agency to integrate in Philadelphia.

The company’s new plan for the property calls for studio, one-bedroom, and two-bedroom apartments for residents earning up to 60% of the area median income, which translates to about $48,000 a year for an individual. The property would also have five ADA-compliant apartments for tenants with very low incomes. KBK hopes to secure project-based housing vouchers for those units.

If everything goes according to plan, construction would start in the fall of 2024 and take about a year to complete.

“I feel confident about it. It’s a matter of putting the work in and time for the applications,” said KBK president Keith B. Key after a community meeting held last month.

Key’s company is applying for low-income housing tax credits through the Pennsylvania Housing Finance Agency. KBK also hopes to secure funding through the Neighborhood Preservation Initiative, the massive bond-backed program initiated by outgoing Council President Darrell Clarke to increase the city’s stock of affordable housing, revive commercial corridors, and improve neighborhood infrastructure.

Without that funding, it’s unclear if KBK could proceed with the project. City Councilmember Cindy Bass has said she would support finding a new developer if that happens. But she has also told residents she believes in the company’s ability to get the project done.

“We’re at a point where we can see the project moving forward now. The train is getting ready to leave the station. So this is not the moment to switch gears,” said Bass during last month’s community meeting.

Bass, who has often been at odds with Weinstein, said in a statement it is “disappointing that Ken Weinstein decided not to support this project.”

“It also calls into question the use of conservatorship and my concern over the potential misuse of such vital development tools,” she added.

Roughly two years ago, the city terminated KBK’s contract after a group of residents pressured the redevelopment authority to change course. The neighbors argued that 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 PRA agreed, but never released a new request for proposal. Officials told residents it couldn’t because it was still addressing concerns raised by Bass. What’s more, Mayor Jim Kenney’s administration said the agency couldn’t proceed without Bass’ cooperation, which is needed to move the project forward.

Council must pass a resolution for the city to transfer the building’s ownership to KBK or any other developer. Under the tradition of councilmanic prerogative, Bass would need to introduce the measure.

Bass has repeatedly claimed the city discriminated against KBK, a Black-owned business. She has also said the PRA falsely told the company the project required historical tax credits to be completed, and that the company never had proper access to the site. The authority has disputed the councilmember’s assertions.

KBK was chosen to develop the Y nearly a decade after 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 the financial mismanagement of millions in taxpayer dollars.