Sale of Germantown’s YWCA building delayed

Germantown residents will have to wait a while longer for improvements to the unkempt local YWCA, because it will remain vacant for another two months, at least.

The YWCA, once owned by Germantown Settlement, a long-troubled, now-defunct social service and housing agency, was supposed to go up for public bid on Dec. 7. But it didn’t, and according to the Sheriff’s Office, It won’t until March 1.

Since 2006, the fiscal troubles facing Germantown Settlement, and its executive director, Emanuel Freeman, have regularly made headlines. The agency defaulted on millions in bank and government loans, had nearly $2 million in tax liens placed against it, and was found to be missing or misappropriating $1 million by federal Housing and Urban Development (HUD) audits.

Germantown Settlement allowed many of its properties, including the YWCA, to fall into disrepair — all while continuing to receive public dollars. As a result, a bankruptcy judge ordered the agency to sell off all its assets to pay back creditors early this month.

The city’s Redevelopment Authority (RDA) is one such creditor. In 2006, it lent Germantown Settlement $1.3 million to buy the YWCA, and the agency agreed to revitalize it for community-oriented uses. (Technically, the Greater Germantown Housing Development Corporation, Settlement’s main subsidiary, owned the YWCA. Freeman headed both.) But Settlement didn’t live up to its end of the bargain, and the building on 5820 Germantown Avenue remained vacant. According to police, it became a haven for squatters. Settlement never made a single payment on the RDA loan. This October, the problem reached fever pitch, literally: The YWCA caught fire. Police later determined it was arson.

That same month, the RDA announced that it was going to foreclose on the property, and sell it on Dec. 7. Terry Gillen, then-executive director of the RDA, said this would ensure that the YWCA would finally be put to good use.

According to Nicholas Scafidi, the RDA’s chief attorney, the YWCA sale has been postponed because of the fire, plain and simple.

Scafidi says the city must assess the extent of the fire damage prior to selling it, in order to negotiate a settlement with the property’s insurer, Lloyd’s of London. As a result of a bankruptcy judge’s ruling this month, the YWCA is currently in the hands of a court-appointed trustee, Warminster attorney Terry P. Dershaw. To get into the building, says Scafidi, the city needs permission from Dershaw.

“It’s just taking a little longer than normal to get the issue cleaned up,” he says. “Nothing glamorous or exciting.”

Dec. 7 wasn’t the first time the YWCA was scheduled to go up for public bid, but didn’t. In February 2010, after tax liens against Settlement had been piling up for 6 years, the RDA moved to sell the building. The sheriff’s sale was set to take place this April, but never did. Before that, in July 2009, the RDA took action to reclaim the YWCA because of Settlement’s missed loan payments and failure to rehabilitate the property — but later decided to give the agency another chance.

To some Germantown residents, the postponed sale is another example of the city failing to clean up the mess that Settlement made, and it often funded.

“There is absolutely too little accountability and transparency,” says Betty Turner, co-founder of civic group Germantown Community Connection, about the sale. A widely held belief among her group’s members is that Freeman attracted funding to his organization only because he was politically connected — with Councilwoman Donna Reed Miller, Mayor John Street and others.

When asked why the YWCA’s sale was postponed, Miller, who once served on Settlement’s board and whose district encompasses the property, says, “I don’t know what’s going on with the YWCA.”

Meanwhile, a similar situation is playing out with two senior apartment complexes farther south in Germantown.

According to public records, Settlement owned or had interests in at least 40 properties in or nearby Germantown. HUD foreclosed on two of those properties, senior-housing units Elders Place I and II, this fall. Like the YWCA, they were also scheduled to go up for public bid, on Nov. 19, but did not.

HUD representatives could not explain the cancellation, or say when the sale would be rescheduled. The three contractors that sell all HUD-owned properties in Pennsylvania — HomeTelos, Matt Martin Real Estate and Ofori — say that Elders Place I and II are not on their books.

To read more about Germantown Settlement, check out NewsWorks’ previous coverage on the agency.