Philly Deals: Rittenhouse Hill apartment renovations moving forward

Posted: March 28, 2012

Work is about to accelerate on developer Post Commercial Real Estate's 624-unit Rittenhouse Hill renovation project above the Wissahickon in Germantown. The firm, owned by brothers Matthew and Michael Pestronk, says it's raised $52 million from European bankers it won't name, through Ackman-Ziff Real Estate Group L.L.C., plus equity it raised from previous Philly projects and private investors.

The Pestronks plan to almost double rents from the previous $600-$700 a month for one bedroom units, to $1,200-$1,300 a month; studios will rise from $500-$600 to nearly twice that, Matthew Pestronk told me.

They bought the property in April and have emptied one of the two towers to start work. Post says it will employ about 200 workers on the job over the next two years.

That makes the project big enough to draw interest from organized labor. Pat Gillespie, business manager of Philadelphia's Building & Construction Trades Council union group, told me Post is building with low-wage labor and without the medical and pension programs workers rely on at big commercial jobs. Workers have also marched at the firm's Goldtex Apartments to the north of Center City.

"We're still protesting his wages and standards," Gillespie told me. Rittenhouse Hill "is a huge building. The systems in the building require more expertise, from skilled trades members, than it does to build a house."

Why non-union? "There's no public money in any of our projects, and we're not obligated by any law, standard or contract to pay anything but the most competitive wages that we can pay," Matthew Pestronk told me. He said that some union contractors are on the job and he's been in negotiations with others, but that he doesn't see why he should be forced to pay more if he can find people willing to work cheap.

The Pestronks say they moved here from Washington to attend Drexel University (Matthew graduated in the Class of 2001, Michael not yet) and stayed for the opportunities. "D.C. doesn't have the character of Philadelphia," Matthew said.

Leaving Berkshire

Thomas Katona, a veteran insurance-software consultant who started professional-liability insurance agency Apogee Insurance Group in Wayne in 2003 and sold it to Warren Buffett's Berkshire Hathaway five years later, tells me he's left his post as president of Apogee to start Agentic Insurance L.L.C. in King of Prussia, which will focus on the "complex risk" end of the market, insuring engineers, architects, and non-physician health professionals in Pennsylvania and the New York and Washington areas.

Uranium dreams

Howard Butcher IV, professional investor and son of an old Philadelphia business family (they ran Butcher & Singer when it was a brokerage-investment bank, not a steakhouse), has joined the board of Boise, Idaho-based Alternate Energy Holdings Inc., which is trying to build a privately financed nuclear-power plant.

Why? The stock trades at 6 cents a share; boss Donald Gillispie, a onetime Westinghouse nuclear executive, faces a Securities and Exchange Commission civil complaint that he and a girlfriend who worked at the company paid themselves money they failed to report to shareholders. The company is fighting the complaint.

Sounds bad. Yet supporters see, in this penny stock under a shadow, an underdog champion of capitalism and affordable energy. "I've been an admirer of Don Gillispie and this project from the first," Butcher told me before joining the board. Other directors include retired Navy Rear Adm. Michael T. Coyle, a former vice president of special projects for Exelon Nuclear. A past director is John Franz, former manager of Peco Energy's Limerick and Peach Bottom nuclear plants.

Gillispie has won local permission to develop a nuclear plant he says would be "the biggest potential economic project in the history of Idaho." Now, he just needs U.S. approval - and a few billion. He hopes to use Korean-built pressurized-water reactors he says were developed at his old employer: "If Westinghouse hadn't sold those rights, they'd have the world by its tail."

Contact Joseph N. DiStefano at 215-854-5194 and JoeD@phillynews.com and @PhillyJoeD

comments powered by Disqus
|
|
|
|
|