Updated, adds Dranoff comments. On Monday, my Inquirer colleague Al Heavens released specs on developer Carl Dranoff's 47-story South Broad high-rise hotel and residential plan here.
The next day:
1) Dranoff's loan for the Nipper Building in Camden, funded by the Delaware River Port Authority, and no longer paying interest, is under scrutiny as part of a federal investigation of DRPA, the Inquirer's Paul Nussbaum reported here.
2) Dranoff's long-awaited, Lower Merion Township-backed Ardmore project was rejected for Pennsylvania taxpayers' Redevelopment Assistance Capital Program funding by Gov. Corbett's administration, the Inquirer's Carolyn Davis reported here.
3) Councilman W. Wilson Goode the Younger called for the death of the city development tax abatement, a change that would boost costs and threaten the economics of Dranoff's high-rise, the Inquirer's Claudia Vargas reported here.
Is Dranoff a can-do builder? Or a taxpayer-subsidy magnet? Or does one mean the other, in Philly? And what's the pattern? "There is some coincidence to it. But it's mainly because we're doing so many projects, so many challenging and exciting things," Dranoff maintains:
1) The Camden loan review: "The loan isn't late," says Dranoff. "Under the terms of the loan, the first six and a half years were interest free. The last six and a half years, it'll pay interest, if the cash is availlable. Otherwise, the interest accrues. It's all due in 2015. When it's due it will be paid. Everybody will have a smile on their face, for their modest investment of $3.5 million dollars has brought a $60 million total investment. I should be applauded. Not cricitized by Monday-morning quarterbacks who don't remember what it's like."
He added: "People forget: The governors of both (Pa. and N.J.) recruited me to do this project. That building was boarded up. No one was investing in Camden. I came in and spent $10 million in equity and raised $50 mililion (total). It is a beautiful project. It has revitalized the waterfront. Have I made any money for it? No. I have had to subsidize it every year. They made me the loan to coax me into it, because I was the only developer willing to take it on."
2) The Ardmore state-funding cut: "This was out of the blue," says Dranoff. "It's being handled by Lower Merion and Montgomery County" who plan to appeal to state officials to reinstate the money.
3) The Philly tax-abatement attack: The tax abatement program Goode targeted "has nothing to do with me," Dranoff said. Meaning he's just applying for what every developer can qualify for: "Tax abatement is about job generation. It''s been the most successful program the city ever had for economic development, as Wilson Goode is well aware."
So, just business as usual? "I can't allow myself to be distracted. We have to stay focused. I've been doing this for three-plus decades. I have seen potholes and speed bumps in the past. It's part of doing business. Of all the people I've started with, I'm the only one still here. I have a grand legacyand many future projects. I must be doing something right. I'm not worried, I'm not distracted. This is part of being in the development business. This is nothing new."
Philadelphia developers have asked for and gotten subsidies and abatements for years. Why? Rents and property values are a lot lower in Philadelphia than in New York, Boston or Washington. But labor, utilities, taxes and other costs are more comparable. Which leaves less margin for profit.