Delinquent Developers Game The System

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DEVELOPER Thomas Citro. Photo by Tom Rudisill

BY RYAN BRIGGS

Thomas Citro is so good at navigating Philadelphia’s infamous bureaucracy, he’s made a living off of it. He bills himself as an “expediter,” a classically Philly profession that helps developers cut through red tape for building permits and zoning – for a fee, of course.

When it comes to his own properties, though, he seems more inclined to ignore the city permitting process altogether: He and his wife have been taken to court – with little result – dozens of times over the past decade for everything from back taxes to serious code violations.

Yet being a well-known City Hall manipulator wasn’t enough to prevent the Philadelphia Redevelopment Authority from greenlighting Citro’s bid to purchase several city-owned lots near Temple University’s burgeoning campus. He signed an affirmation of compliance, got a nod from Philadelphia City Council President Darrell Clarke, and scored two lots – even as he privately gave officials the bird.

He’s isn’t alone.

Following a fatal Center City building collapse in 2013 and with some 100,000 tax-delinquent properties on the docket, Philadelphia officials have repeatedly vowed to use government land sales as a carrot to encourage scofflaw developers to clean up their acts. But a City&State PA review of 15 recent PRA development deals authorized or extended found that about a quarter went to businesses with outstanding tax bills or code violations.

PRA Director Greg Heller said he has sought to crack down on double-dealing in his tenure, but acknowledged that the state-authorized urban renewal agency didn’t notice the outstanding issues with Citro and several other developers.

“When (the) PRA performed a search on these properties earlier in the process, we successfully pulled tax clearances and did not find any significant outstanding violations on the applicant,” he wrote, referring to Citro, in an email. “We do our best and try to find these, but they are sometimes hard to track down.”

Heller said the PRA searches for the Department of Licenses & Inspections’ database and runs a check on an applicant’s Social Security number in an effort to find violations. But he admitted it’s not a perfect system.

“It is also possible that individuals who own entities that are purchasing PRA properties may have an ownership interest in other companies that have outstanding violations,” he said.

Indeed, at least in some cases, that’s exactly what happened.

When student housing developer Owl Realty Group sought to buy lots near Temple’s campus in 2014, the company also affirmed that it had no tax delinquency or code enforcement issues. To an extent, that was true: The holding company, owned by Plymouth Meeting couple Lynn and Solana Greer, didn’t own any properties at the time.

But another LLC controlled by the couple, called Dynamic Realty Corporation, did. One of those properties, on Latona Street in South Philadelphia, was so neglected that it had to be demolished by the city in 2011. The outstanding violations and associated fines were never resolved.

A few years later, using a fresh corporation – Owl Realty – the Greers received approvals to buy the lots and build eight student-housing units. This year, they won an amendment to the original redevelopment contract to add a fourth floor – and six additional student-housing units to the project. Just a month later, Dynamic Realty was hit with a stop-work order over the continued failure to resolve the violations on Greer’s other properties. They did not respond to a call for comment.

The failure to detect these legal arrangements is problematic for the city. It is routine in the real estate business, and rarely nefarious, to spin off new LLCs for new acquisitions. In many instances, ownership of the LLCs can be easily traced through shared mailing addresses. The city’s still-incomplete effort to upgrade and improve its computerized licensing system was supposed to fix the issue by automating this type of cross-referencing – but that project has been delayed for years.

However, even when developers applied for contracts using companies with outstanding code violations, they sailed through the approval process. Citro’s troubled student housing company, Temple Nests, faced few obstacles when he sought to scoop up the aforementioned lots near the university this year.

The expediter has run a slew of student apartment buildings adjacent to campus since 2012, owned by at least five different “Temple Nest” holding corporations – nearly all of which have been cited for numerous serious code violations. One building, crammed with student rentals, has never had a rental license and was flagged for leasing out an illegal basement unit. Another student dwelling nearby was sent to court over unresolved fire code violations and an attempt to conceal unpermitted construction work.

One of the cited properties was owned by Temple Nests III – the same LLC that would apply in April of this year for a redevelopment contract spanning two more lots adjacent to Temple University.

Citro has outstanding issues on other properties he and wife – who is listed as a managing partner at Temple Nests – personally own. He owes the city some $20,000 in back taxes on a property in Northeast Philly and is missing a vacant land permit on a lot he owns in South Philly.

Yet the couple easily won approval for purchase agreements on the two lots – for $90,000 a pop. And just one month prior to his recent PRA hearing, the city sought to take Citro to court over code or revenue enforcement issues for the 62nd time in 10 years.

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