Rendell's welcome boost for developers

Gov. Rendell gave real estate developers a boost this week when he signed a law that extends, until 2013, the deadline on building permits that were in effect at the beginning of 2009.

For builder Jim Moulton, who has a stalled 140-unit residential project in Perkasie and recently received extensions through the end of this year, the new law provides three years of breathing room.

Moulton said that having valid permits was extremely important to the overall financial health of the builders. "It can easily double the value of the land," and that helps determine how much money banks will allow builders to borrow, Moulton said.

The extension covers, for example, subdivision approvals and construction permits.

The new law, called the Permit Extension Act, also saves developers the time and money spent extending permits.

"It cost us several hundred thousand last year to get permit extensions," said John Westrum, chief executive of Westrum Development Co., in Fort Washington. "If the bill had been in place, we would not have had to do it."

Michael Sklaroff, real estate department chair at Ballard Spahr L.L.P., in Philadelphia, says the law benefits not just landowners, but also lenders who won't have to mark down loans when permits expire, taxing authorities who won't have to write down the value of a parcel of land, and, it is hoped, the building trades when the economy returns.

"It's huge," said Sklaroff, who has been working for two years to get the law in place.

The prime backers of the law were Senate Majority Leader Dominic Pileggi (R., Delaware) and State Rep. Michael H. O'Brien (D., Philadelphia).

But Fred Snow, president of Brandolini Cos., in Berwyn, which is developing the Providence Town Center in Collegeville, was less enthusiastic, saying his firm did not have any outstanding permits that would be affected.

"From an industry perspective, it's probably a little late, in my opinion," Snow said. Developers who started projects in 2006 or 2007 and then got held up by the financial crisis probably saw too many of their permits already expire for the new law to help.

New Jersey acted more quickly, extending permits in 2008. That law affected permits that expired starting Jan. 1, 2007. It extended them through July 1, 2010. Before leaving office in January, Gov. Corzine signed a new law that keeps permit expirations frozen until July 2012.

Pennsylvania's extension will help banks because as properties go through foreclosure permits often expire, said Dan Wiekrykas, senior vice president of commercial real estate special assets at National Penn Bancshares Inc., in Boyertown.

"Without the necessary permits, we can't sell or develop the project," he said.

Contact staff writer Harold Brubaker at 215-854-4651 or hbrubaker@phillynews.com.