Philly Deals: He takes a fresh look at Philadelphia real estate

Harrisburg, Pennsylvania’s financially distressed capital city, is seeking Chapter 9 bankruptcy, citing overwhelming debt. Harrisburg’s mayor and top city lawyer said the filing signed by a City Council member was not legal. CAROLYN KASTER / AP “It’s dead,” he told me gleefully at the time. “They finally killed it.” He went to coastal Florida — where real estate is the only business — and found things even deader: “Down 50 percent. Around Tampa, St. Petersburg, you can buy a new condo for $50,000.” Great bargains. But “not so good for business.” So he drove a drug truck, stocking pharmacies. “And I’m making $85 a shift, and I got to pay $40 for the gas.” You could have stayed home and driven a bread truck. “Well, they did make me supervisor.” But now, “against my better judgment, I’m back.” On East Lehigh Avenue in Port Richmond, where 12- and 14-foot-wide brick rowhouse prices, to Ohler’s impressed surprise, have stayed above $100,000. Much better than Florida. “Philly is good. Lower Bucks County, that’s down some. But the city’s doing all right.” And the Main Line? “This week I was out on this one job. The seller really wanted this house to go” for a mid-six-figure price. But houses out there weren’t going for that much. “And you know what?” They dropped the sale price to meet his appraisal. So the system works now? “I’m still looking around,” he warned. Back in his neighborhood, Ohler’s trying to verify reports by fellow appraisers that an agency of the cash-strapped city is still spending more fixing up rowhouses than it can sell them for on the market. And he’s cheerfully expecting all the old deal tricks and perverse incentives will reflux as confidence returns. Bankrupt cities Cash-strapped Harrisburg’s former financial receiver, lawyer David Unkovic, is expected in Commonwealth Court Thursday for a hearing on the reorganization plan he once led. It’s not clear the veteran bond lawyer, who called for a federal investigation of the city’s ruinous bond deals and the professionals who profited from them, will shed light on the political influences he said led to his departure, in the hearing before Judge Bonnie Leadbetter. She’s asked only for testimony that directly impacts the state’s plan to sell city assets. Does it take a general to solve Harrisburg’s mess? Lawyer Mark Schwartz, who represents Harrisburg City Council and its treasurer and controller, is questioning Gov. Corbett’s choice to replace Unkovic: former Air Force Gen. William B. Lynch, who helped oversee U.S. construction in Iraq. Schwartz noted that Lynch was in charge of the state National Guard back in 1999, when it signed an abortive deal to buy Clearfield County coal mine lands from owner C. Alan Walker. Auditor general (now U.S. Sen.) Bob Casey later found the “mishandled” deal cost taxpayers more than $300,000, under terms that “differed markedly” from other state deals. Walker is now Corbett’s head of the Department of Community and Economic Development (DCED), which oversees Harrisburg’s finances and works with the receiver’s office Lynch would head. The mine sale, aborted due to local “political opposition,” was “in motion before General Lynch became Adjutant General,” DCED spokesman Steve Kratz told me. “General Lynch’s experience solving problems and working with people toward a common solution will be his greatest asset.” Meanwhile, up in Scranton, Gary Lewis, a Deloitte accountant who is considering a run for Scranton City Council, told the Bond Buyer newspaper the city should consider Chapter 9 federal bankruptcy reorganization. Bankruptcy advocates like Schwartz and Lewis say Chapter 9 is more likely to allow cities to avoid selling public assets and layoffs and bargain down creditors, compared to state-led plans. Harrisburg Mayor Linda Thompson, who has praised Unkovic but opposed bankruptcy, on Tuesday told the Patriot-News she considers Chapter 9 a “last resort.” Contact Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com or @PhillyJoeD on Twitter.
Harrisburg, Pennsylvania’s financially distressed capital city, is seeking Chapter 9 bankruptcy, citing overwhelming debt. Harrisburg’s mayor and top city lawyer said the filing signed by a City Council member was not legal. CAROLYN KASTER / AP “It’s dead,” he told me gleefully at the time. “They finally killed it.” He went to coastal Florida — where real estate is the only business — and found things even deader: “Down 50 percent. Around Tampa, St. Petersburg, you can buy a new condo for $50,000.” Great bargains. But “not so good for business.” So he drove a drug truck, stocking pharmacies. “And I’m making $85 a shift, and I got to pay $40 for the gas.” You could have stayed home and driven a bread truck. “Well, they did make me supervisor.” But now, “against my better judgment, I’m back.” On East Lehigh Avenue in Port Richmond, where 12- and 14-foot-wide brick rowhouse prices, to Ohler’s impressed surprise, have stayed above $100,000. Much better than Florida. “Philly is good. Lower Bucks County, that’s down some. But the city’s doing all right.” And the Main Line? “This week I was out on this one job. The seller really wanted this house to go” for a mid-six-figure price. But houses out there weren’t going for that much. “And you know what?” They dropped the sale price to meet his appraisal. So the system works now? “I’m still looking around,” he warned. Back in his neighborhood, Ohler’s trying to verify reports by fellow appraisers that an agency of the cash-strapped city is still spending more fixing up rowhouses than it can sell them for on the market. And he’s cheerfully expecting all the old deal tricks and perverse incentives will reflux as confidence returns. Bankrupt cities Cash-strapped Harrisburg’s former financial receiver, lawyer David Unkovic, is expected in Commonwealth Court Thursday for a hearing on the reorganization plan he once led. It’s not clear the veteran bond lawyer, who called for a federal investigation of the city’s ruinous bond deals and the professionals who profited from them, will shed light on the political influences he said led to his departure, in the hearing before Judge Bonnie Leadbetter. She’s asked only for testimony that directly impacts the state’s plan to sell city assets. Does it take a general to solve Harrisburg’s mess? Lawyer Mark Schwartz, who represents Harrisburg City Council and its treasurer and controller, is questioning Gov. Corbett’s choice to replace Unkovic: former Air Force Gen. William B. Lynch, who helped oversee U.S. construction in Iraq. Schwartz noted that Lynch was in charge of the state National Guard back in 1999, when it signed an abortive deal to buy Clearfield County coal mine lands from owner C. Alan Walker. Auditor general (now U.S. Sen.) Bob Casey later found the “mishandled” deal cost taxpayers more than $300,000, under terms that “differed markedly” from other state deals. Walker is now Corbett’s head of the Department of Community and Economic Development (DCED), which oversees Harrisburg’s finances and works with the receiver’s office Lynch would head. The mine sale, aborted due to local “political opposition,” was “in motion before General Lynch became Adjutant General,” DCED spokesman Steve Kratz told me. “General Lynch’s experience solving problems and working with people toward a common solution will be his greatest asset.” Meanwhile, up in Scranton, Gary Lewis, a Deloitte accountant who is considering a run for Scranton City Council, told the Bond Buyer newspaper the city should consider Chapter 9 federal bankruptcy reorganization. Bankruptcy advocates like Schwartz and Lewis say Chapter 9 is more likely to allow cities to avoid selling public assets and layoffs and bargain down creditors, compared to state-led plans. Harrisburg Mayor Linda Thompson, who has praised Unkovic but opposed bankruptcy, on Tuesday told the Patriot-News she considers Chapter 9 a “last resort.” Contact Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com or @PhillyJoeD on Twitter.
Posted: May 25, 2012

Ray Ohler, a Philadelphia real estate appraiser who delighted in pointing out the inflationary excess of the mid-2000s — brokers firing professionals who failed to approve wacky prices, New York investors chasing Sale signs down Roosevelt Boulevard, out-of-town lenders airlifting money to semi-employed buyers who might as well have worn Foreclose Me tattoos — left town in 2009, when the market went limp.

“It’s dead,” he told me at the time. “They finally killed it.”

He went to coastal Florida, where he has family — and where real estate is the only business — and found things even more dead: “Down 50 percent. Around Tampa, St. Petersburg, you can buy a new condo for $30,000.”

Great bargains. But “not so good for business.” So he drove a car, stocking pharmacies. “And I’m making $85 a shift, and I got to pay $40 for the gas.”

You could have stayed home and driven a bread truck. “Well, they did make me supervisor.”

But now, “I’m back.” On East Lehigh Avenue in Port Richmond, where 12- and 14-foot-wide brick rowhouse prices, to Ohler’s impressed surprise, have stayed above $100,000.

Much better than Florida. “Philly is good. Lower Bucks County, that’s down some. But the city’s doing all right.”

And the Main Line? “This week I was out on this one job. The seller really wanted this house to go” for $540,000. But houses out there were going for under $500,000.

Back in his neighborhood, Ohler’s trying to verify reports by fellow appraisers that an agency of the cash-strapped city is still spending more fixing up rowhouses than it can sell them for on the market.

And he’s cheerfully expecting all the old deal tricks and perverse incentives will reflux as confidence returns.

Bankrupt cities

Cash-strapped Harrisburg’s former financial receiver, lawyer David Unkovic, is expected in Commonwealth Court Thursday for a hearing on the reorganization plan he once led.

It’s not clear the veteran bond lawyer, who called for a federal investigation of the city’s ruinous bond deals and the professionals who profited from them, will shed light on the political influences he said led to his departure, in the hearing before Judge Bonnie Leadbetter. She’s asked only for testimony that directly impacts the state’s plan to sell city assets.

Does it take a general to solve Harrisburg’s mess? Lawyer Mark Schwartz, who represents Harrisburg City Council and its treasurer and controller, is questioning Gov. Corbett’s choice to replace Unkovic: former Air Force Gen. William B. Lynch, who helped oversee U.S. construction in Iraq.

Schwartz noted that Lynch was in charge of the state National Guard back in 1999, when it signed an abortive deal to buy Clearfield County coal mine lands from owner C. Alan Walker. Auditor general (now U.S. Sen.) Bob Casey later found the “mishandled” deal cost taxpayers more than $300,000, under terms that “differed markedly” from other state deals.

Walker is now Corbett’s head of the Department of Community and Economic Development (DCED), which oversees Harrisburg’s finances and works with the receiver’s office Lynch would head.

The mine sale, aborted due to local “political opposition,” was “in motion before General Lynch became Adjutant General,” DCED spokesman Steve Kratz told me. “General Lynch’s experience solving problems and working with people toward a common solution will be his greatest asset.”

Meanwhile, up in Scranton, Gary Lewis, a Deloitte accountant who is considering a run for Scranton City Council, told the Bond Buyer newspaper the city should consider Chapter 9 federal bankruptcy reorganization.

Bankruptcy advocates like Schwartz and Lewis say Chapter 9 is more likely to allow cities to avoid selling public assets and layoffs and bargain down creditors, compared to state-led plans.

Harrisburg Mayor Linda Thompson, who has praised Unkovic but opposed bankruptcy, on Tuesday told the Patriot-News she considers Chapter 9 a “last resort.”

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

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