PhillyDeals: Downturn helps one developer with acquisitions

Ken Weinstein left a City Hall job to open the Trolley Car Diner in Mount Airy and has developed sites.
Ken Weinstein left a City Hall job to open the Trolley Car Diner in Mount Airy and has developed sites. (DAVID SWANSON / Staff Photographer)
Posted: January 19, 2012

Bankruptcy is ugly. But sometimes, that's what it seems to take to pump new life into business districts in Philadelphia's neighborhoods.

Take Germantown Avenue developer Ken Weinstein, partners with Stan Smith, Howard Treatman, and Bob Kaufman

in Philly Office Retail, who says his group has bought about 200,000 square feet of commercial properties in Germantown and Mount Airy in the last two years - for just $1.75 million.

Compare that with Liberty Property Trust, which is spending $80 million-plus to build 200,000 square feet of new office space at the Navy Yard. Of course, Weinstein's properties aren't in move-in condition. Investors like him are using

the struggling economy to acquire neighborhood businesses and institutional locations from troubled landlords.

They're recruiting office, store, restaurant, and nonprofit tenants, in hopes of reviving what was once a busy shopping district for the adjoining diverse middle-income neighborhoods. Weinstein is acquiring properties like the former Catholic parish complex that used to house a charter school operated by Germantown Settlement, which amassed a taxpayer-funded portfolio of scores of neighborhood properties before it was dissolved in bankruptcy court.

Weinstein and his partners have redeveloped more than 30 properties, from the end of Chestnut Hill to the north end of Nicetown, since he left his City Hall job (as chief of staff to then-Councilwoman Happy Fernandez) 15 years ago to open the Trolley Car Diner and go into real estate.

To ease the way for new business, he's helped to organize the Mount Airy Business Improvement District, which unites Acme Markets and more than 200 other landlords to fund street cleaners and other projects, and Valley Green Bank, which has expanded from its avenue headquarters to four branches. City-government ties help insiders like Weinstein navigate Philadelphia's inspections, zoning, back taxes, and real estate rules.

Elsewhere on the avenue, Cira Center-based Iron Stone Strategic Capital Partners has foreclosed the former Asher's chocolate factory, the old Germantown Farmers Market, and other Germantown Avenue properties formerly held by neighborhood landlord Joel Harden, who filed for bankruptcy reorganization last year.

"There's a great momentum on Germantown Avenue with what Ken's doing and new buyers," Iron Stone partner Matthew Canno told me. He cited tenants Iron Stone has put into the newly acquired buildings, including a culinary school, a cellphone store, a sound studio, a day-care center, a hair-weave studio, and Germantown Community Development Corp.

"Germantown Settlement owned a lot of property it wasn't able to develop," Canno said. Harden told me in 2009 about the challenge of raising investment capital in the recession. The people - tenants, customers - "are here," he told me. The new owners, retail-experienced and better-funded, "can attract positive change."

What fight?

Chester County engineer Steve Welch - founder of Mitos (now part of Parker Hannifin) and KinderTown and the tech-firm start-up developer Dreamit Ventures, and one of the Republican candidates jockeying to knock off Sen. Bob Casey (D., Pa.) this fall - Wednesday endorsed the Google-led critics of the proposed Stop Online Piracy Act (SOPA) in Congress. "As someone who has been intimately involved in the start up of multiple Web-based companies, this SOPA . . . is the perfect example of how out of touch Washington is with the real world," Welch said.

Of course, SOPA isn't a Washington fiat. It's backed by Fox-owner News Corp., CBS, Disney-ABC, Time Warner, the National Football League, and NBC-owner Comcast, one of the Philadelphia region's biggest employers, all of which resent having to share the content they produce with redistributors like Google.

I asked Welch aide Peter Towey if his candidate had talked to anyone at Comcast about why it supports SOPA. "As a senator, Steve would work to ensure that not only Comcast's ideas are protected, but so are the ideas of every Pennsylvanian when it comes to intellectual-property rights," he told me.

As if there were no real-world economic conflict. Just those bad bureaucrats in Washington, trying to make life tough for everyone.


Contact columnist Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com, or @PhillyJoeD.

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