9/26/2005

City grabs building firm's land for houses: Philadelphia (PA) Daily News, 9/26/05

Clearkin Co. leaving Phila. for suburbs

By Bob Warner

After 87 years in Philadelphia - more than half a century at the same address in Juniata Park - James J. Clearkin Inc. is moving.

To Cheltenham.

Hundreds of other firms have left the city in search of lower taxes, better schools, less corruption or more trees.

But Clearkin - a family-owned building-construction company with 15 full-time employees - didn't want to go.

The city is forcing the business to relocate to make room for 50 new houses in a government-subsidized housing development just off Castor Avenue and Wingohocking Street.

It's a Philadelphia example of eminent domain: the government's controversial power - recently upheld by the U.S. Supreme Court - to seize private property for redevelopment pro-jects.

The city contends that the project will improve the neighborhood, offering middle-income people a chance to buy new houses for about $150,000.

"Fifty new homeowners and the Frankford community will welcome this new development," said Frank Keel, a spokesman for the Philadelphia Redevelopment Authority, which approved the government's seizure of the Clearkin property and a dozen other parcels in the seven-acre site. (Its actual location is known as Juniata Park, not Frankford).

$7 million in subsidies
But the project depends on $7 million in subsidies from local and state taxpayers.

And, the Clearkins ask, can it be good for the city to lose solid, taxpaying businesses?

Until the RDA condemned the industrial-zoned property as "blighted," it had provided space for a telephone company, a military recruiting center, an auto-repair shop and a fruit-and-vegetable vendor, besides the construction company and parking for a nearby caterer.

All but Clearkin have closed or moved since the development project was unveiled.

The Clearkins complain that after sticking with the city for four generations, paying hundreds of thousands of dollars in local taxes and providing scores of jobs for Philadelphians, they're being forced out - and the main beneficiary will be the private developer who builds the new homes: OKKS Development Co., based in Bensalem.

"If this project was for the good of the community, you would be building this back on vacant property in the area and not on commercially occupied property," said James J. Clearkin Jr., the company's 79-year-old patriarch, in an angry letter to the city's housing director.

Initial designs for the housing project did not include the Clearkin property. But it was quietly added to the site when city officials decided that the project would be more attractive to potential homeowners without a construction company next door, according to Michael Schurr, president of OKKS.

"The concept of urban renewal is based on momentum," Schurr said. "If you can get people who previously would not have considered living in a particular area, to move in, to take care of their house and property, that can start the ball rolling, get others in the neighborhood to take care of their properties, too."

"This part of Juniata Park is a transition area," Schurr continued. "It doesn't have the same contiguous blight that other parts of the city might have, but it represented an opportunity, a place where people would want to live... . I feel bad that the Clearkins have to move their business. It's unfortunate, but necessary. I think that's what everybody on the city's side decided."

Family outraged
Lawyers have advised the Clearkins that at this point, there's nothing they can do to stop the deal, particularly after that U.S. Supreme Court decision this year upheld the government's right to seize private property for public "improvements," even when the property will be used for private, nongovernment purposes.

But the Clearkins remain outraged at the government's handling of their case, particularly since it appears that the city intentionally delayed telling them that their property had been added to the project.

Only a form letter
More than two years ago, the Clearkins approached the co-developer, the Frankford Community Development Corp., and asked whether their half-acre property was included. They were told no, it was outside the footprint.

Later, the plans were changed to incorporate the Clearkins' site, but nobody told the Clearkins until one week before a critical City Council hearing. That's when the RDA sent a form letter to the Clearkins' office - addressed to "Property Owner" - telling them Council was about to consider an ordinance to "acquire" their land.

Steven Culbertson, until this year the president of the Frankford CDC, told the Daily News that he'd been instructed by RDA officials not to disclose the changes in the project.

"The RDA basically told me not to talk to anybody about it," Culbertson said. "They didn't specifically say don't talk to the Clearkins... . I don't feel comfortable with the way the process occurred, but all I can do now is say that I'm sorry."

The RDA's executive director, Herb Wetzel, told the Daily News that he had not personally told anyone to keep the Clearkins in the dark. But he offered no apology. "We did more than the law requires," Wetzel said.

RDA chairman John Dougherty, the electricians' union leader who is a potential mayoral candidate in 2007, did not return repeated phone calls from the Daily News.

Developers had obtained a $1.75 million grant for the project from the Pennsylvania Housing Finance Agency (PHFA) without disclosing their plans to seize the Clearkin property.

When the agency found out this year - from the Clearkins, not the city - the PHFA's executive director, Brian A. Hudson, sent a letter of protest to the Frankford CDC. "PHFA does not encourage or condone the taking of viable businesses within a community," the letter said.

But instead of withdrawing its financial support, PHFA opted for a gesture that had no real impact: Hudson sent a letter to Culbertson stating that none of the PHFA's money could be used to acquire or improve the Clearkin property.

The letter did nothing to stop the developers from using some of their city subsidies to seize the Clearkins' building.

Who's moving in
OKKS Construction is a three-way partnership involving Orleans Homebuilders, Korman Construction and a trust set up by the family of Lewis Katz, the wealthy businessman who owns the New Jersey Nets.

All three have been major political contributors, particularly to Mayor Street, Gov. Rendell or both. But none has made significant donations to Councilman Rick Mariano, who guided the project through Council.

"I feel bad for Clearkin, but I've known this neighborhood for 50 years, and this is gonna be a good project," Mariano said. "I think they should have given the Clearkins more notice, but I'm still in favor of it."

City officials promised they'd help find the Clearkins a comparable headquarters building inside city limits, according to vice president Joseph B. Clearkin, one of the grandsons of the company founder.

But the properties suggested by the Philadelphia Industrial Development Corporation would have cost significantly more than the $400,000 the RDA offered for the Clearkins' property, Clearkin said.

The Clearkins say they will seek more money by appealing to the city's Board of View, a three-member panel appointed by city judges to resolve such disputes.

And by the end of November, the company expects to have left Philadelphia for good.

"I still think it stinks," said Joe Clearkin. "What they've done to us is completely unfair, but I'll still be sorry to leave. After 87 years, we were one of the oldest Philadelphia contractors.

"We won't be able to say that anymore."


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