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.
The same was true for several other PRA development deals:
- City Block Acquisition, a Northern LIberties development company owned by Allan Borovich, picked up two lots in Southwest Philadelphia in January. Borovich has 47 open code violations on 197 parcels his various holding companies control across Philadelphia. Several of those properties have been flagged for being in imminent danger of collapse. Borovich asserted that these were all recent acquisitions – although some were purchased as far back as 2010 – but that he was in the process of correcting the violations in question. Of the code violations in relation to his redevelopment deal, he said “[The PRA] don’t care about that. They never mentioned it once to us.”
- Westview Development Partners was approved to redevelop a 5,000-square foot property at 3509 Haverford Ave, in the city’s Mantua neighborhood. After reaching a settlement with the PRA last year, Westview sought and was approved for an extension to the redevelopment contract in January 2016. Owner Rick Young owes the city about $20,000 in back taxes and has open code violations on five properties he owns, including 3509 Haverford. Young did not respond to an emailed request for comment.
Other deals raised more general questions about the PRA’s selection of developers:
- Developer Shawn Bullard built an entire apartment complex near Temple’s medical campus illegally – no permits, no inspection – in 2015. Somehow, within a year, Bullard was able to retroactively clear up these issues, according to the PRA. Bullard then sought and received approvals to redevelop land near 16th Street and Cecil B. Moore Avenue into more student housing units, just blocks away from his illegally built apartments.
- The PRA signed off on a sale of land in West Philly to the Calvary Agape Development Corporation, which does not appear to have any development experience. Garth G. Gittens, president of the nonprofit and pastor of the related Calvary Church, had previously admitted to bribing a judge in a ticket-fixing scandal.
Council passed new ordinances to impose additional penalties on property owners with multiple outstanding violations, and L&I can seek to attach outstanding tax liens – Citro has those on at least four properties he owns – to a landlord’s home.
City Councilmember María Quiñones-Sánchez, who worked on bills to improve code enforcement, said the city needed to do a better job of using the tools it already had, or risk encouraging more developers thumb their noses at the system.
“We cannot enable or facilitate bad actors who owe the city money. The paradigm cannot shift if we don't use our own tools,” she said.
However, it’s worth noting that all PRA sales are also approved by district councilmembers. But staffers for Clarke, who has advocated for more council oversight in city land sales, said their check on PRA developments was largely limited to neighbor complaints – not code violations. If no one complains, approval is often a rubber stamp.
L&I spokesperson Rebecca Swanson said there were limits to what L&I could practically do to bar repeat offenders from operating in the city entirely.
“Unfortunately, the city is not in a position to say, ‘We’ve taken you to court so many times on one property that you can’t do business in this city anymore on any other properties,’” she said. “Depending on the nature of the violations, we can also prohibit an individual from conducting a particular business at a particular location, but that is very specific to the violation and the property.”
She said L&I was working on a computer program to better detect and pursue men like Citro until their myriad violations could be combined and brought before a judge in a single, damaging court case. But she pointed out that cutting off developers from public land sales was meant to serve as another bulwark in these efforts.
Heller pointed out that many of the properties that received sale approval in 2017 had yet to go to final settlement, including Citro’s. But he also admitted it is rare for any violations to be detected in the interim.
“We currently do not do another search after the project is brought to the board and prior to settlement,” he said. “We are exploring ways to do a more thorough review which may add another search prior to settlement.”
He said the PRA would require Citro to correct these issues before the transfer of property, scheduled for this month. While Citro has resolved some of these issues, such as the illegal basement unit, as of late July, six of 19 properties owned by Citro still had open violations, according to the L&I. Court action is still pending over other unresolved code and revenue issues.
It’s worth pointing out that most developers are not trying to put one over on PRA. LM Real Estate, owned by Sarah and Ronald Piroli, was approved for the redevelopment of a property in Mantua adjacent to other lots they owned. At the time, one of the structures LM Realty owned had been flagged as unsafe due to structural problems years prior.
“I was not even aware of this old violation,” Piroli said, in a phone call.
He said that PRA did approach him about the issues – after City&State PA contacted L&I to inquire about outstanding violations for this issue.
“(PRA) did their due diligence. It was easy enough to fix, so we fixed it and now we should be able to go to settlement,” he said. “But frankly, I think they were probably aware that there was a news article happening or someone digging around. The whole process seemed a little backwards.”