Judge names Dranoff receiver for 10 Rittenhouse Square

A Common Pleas Court judge Tuesday appointed developer Carl Dranoff receiver for 10 Rittenhouse Square, the multimillion-dollar high-rise condo building at 130 S. 18th St. in the first of two steps sought last year by the project's senior lender but delayed by an abortive Chapter 11 bankruptcy filing.

The lender, Istar Financial of New York, had sued Sept. 10 to foreclose on the 33-story, 143-unit building and asked for appointment of a receiver, who works for the court, to maintain 10 Rittenhouse's residential and commercial spaces, complete and sell its many unfinished units - ranging in price from $600,000 to $15 million - and operate its condo association.

On Dec. 30, Judge Albert W. Sheppard Jr. was just seven minutes away from appointing Dranoff when the Delaware Valley Real Estate Investment Fund - the mezzanine lender that had taken control from developer ARC Wheeler in July - sought Chapter 11 protection in U.S. Bankruptcy Court for the building, known in the filing as Philadelphia Rittenhouse Developer L.P.

Philadelphia Rittenhouse remains the legal owner, but as receiver Dranoff is now in charge of operations, said Cynthia Tucker, senior vice president of Istar Financial.

"The foreclosure process, which was delayed by the bankruptcy filing, will resume from the point where it stopped," Tucker said in an interview Tuesday.

In the meantime, she said, "we are still the lender and have certain rights under the loan documents." Istar will advance money to the receiver to pay bills and will act on Dranoff's recommendations, she added.

Last week, after the bankruptcy case was dismissed, Istar paid the city about $700,000 in back real estate taxes, Tucker said.

After months of lackluster sales at 10 Rittenhouse, the Delaware Valley Real Estate Investment Fund sued Istar and took control of the property in July.

In a statement Tuesday, John M. Decker of Dequity Investment Group L.L.C., which managed the building for Philadelphia Rittenhouse Developers and the investment fund, said: "We are cooperating fully with Istar's recommendation [for receiver]. We believe an argument over who should be appointed is not in the best interest of the project and the homeowners at this time."

Ten Rittenhouse is the second Center City condo building for which Istar Financial has succeeded in securing a court-appointed receiver. It also was the senior lender for Aria, at 1419 Locust St.