Provident Mutual building sale on hold, endangering planned West Philly health campus

This story originally appeared on PlanPhilly.

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West Philadelphia Councilwoman Jannie Blackwell has halted the city’s long-awaited remake of the former Provident Mutual Life Insurance Co. building at 4601 Market Street for reasons that include the interest from developers other than Iron Stone, the developer selected through an open bidding process to acquire the 10-acre property.

“I’ve got other people who want to invest,” said Blackwell on Thursday when asked if she supported a different bid than the winning proposal. “So we’ll see what happens. I want to see it work out. I want something there. It’s one of the most attractive locations in my district.”

But Blackwell voiced other concerns, including transparency and getting a fair price for the site, as her primary motivations for stopping the project from getting the final City Council vote needed to authorize its movement forward. The vote was scheduled for the last public Council meeting of the year, held on Thursday.

“Even though we had people from the city who were supposed to be partners they did not come up with a clear plan or explanation,” said Blackwell. “We didn’t have the information.”

Mayor Jim Kenney vigorously denied Blackwell’s contention that city officials had not shared information about the plans. The administration quickly released a lengthy statement that accused her of fudging the facts.

“As for the Councilwoman’s claims that she was left out of the process – nothing could be further from the truth,” the mayor’s statement reads. “She and her staff were fully informed and involved in the discussions every step of the way.  To say otherwise is to contradict the facts.”

The mayor criticized her action as detrimental to her West Philadelphia constituents and taxpayers at large.

“The Councilwoman’s decision to hold the legislation deprives her community of many benefits,” the mayor’s statement reads. “It deprives taxpayers of a net gain of $40 million; and it leaves a hulking eyesore of a building, vacant and unused, in the heart of her district.  Yes, I am very disappointed – and every Philadelphian should be as well.”

The vacant historic building was purchased by Mayor Michael Nutter’s administration for $4 million dollars. The city then spent $48 million fixing up the property in anticipation of the police headquarters being transferred to the building.

But the police rejected the idea of moving to West Philadelphia and Kenney found them a new home on North Broad Street, in the old Philadelphia Inquirer building. Earlier this year, the city put the property at 46th and Market streets up for bid and Iron Stone won with a proposal for a public health campus on the site.

Iron Stone’s partners included Children’s Hospital of Philadelphia, providing mental health care services, and the YMCA, providing daycare services. The property would have gone to them for $10 million.

But the deal was critiqued by an array of speakers ranging from Councilman Allan Domb, who argued the deal was a betrayal of taxpayers, to one of the other bidders, Kfir Binnfeld.

“The group I am a part of submitted a bid of $15 million,” Binnfeld said at Council’s public comment period. “Not $100,000 more, not $1 million more, $5 million more! $5 million was taken from the city for no explanation.”

Binnfeld did not immediately respond to requests for comment about the details of his bid.

Domb said the money that the city had already put into the West Philly property made the $10 price tag a non-starter.

“Our total costs at 46th and Market are $94 million and at a sales price of $10 million, we are losing $84 million of taxpayer money,” said Domb. “This $84 million is bigger than the homeless budget. It could fund the libraries for two years…We need to do better.”

Domb has been a lonely voice critiquing municipal spending on the new police headquarters at 400 North Broad, where he believes the city got a bad deal from real estate developer Bart Blatstein. At the hearing over Blackwell’s bill he also gave a speech against the 4601 Market deal. He told his colleagues he would have voted the against the bill in protest on Thursday if Blackwell had not held it.

As an alternative, Domb asked why the city couldn’t simply lease the property, or just sell half the property and operate the site in partnership with a developer like Iron Stone.

The Kenney administration’s press release disputes this narrative as well. The mayor argues that the medical campus would have brought in an additional 4158 million in additional revenue over the next 20 years and that even considering debt service the city “would have ended up an estimated $40 million ahead with this deal.”