Deal with insurer will keep SPARC alive

SPARC survives, but at a price.

The South Philadelphia community-development corporation has reached an agreement with its insurance carrier to resolve a $4 million jury award the nonprofit owes to a Philadelphia police officer who was injured in a SPARC-owned house.

The judgment had threatened the financial viability of SPARC, which stands for South Philadelphia Area Revitalization Corp.

Its insurance carrier last month agreed to cover the judgment, even though SPARC carried only $1 million liability insurance, SPARC executive director Jeremey Newberg said yesterday.

The judgment has been negotiated down to about $2.5 million, Newberg said.

That means SPARC can continue its housing-rehabilitation work in South Philadelphia, including a planned restoration of a 16-block stretch bordered by Sixth and Fourth Streets, and Mifflin and Jackson Streets.

SPARC, however, is losing Newberg, who is stepping down as executive director.

While frustrated by the lawsuit, Newberg said his departure was motivated more by a lack of public funding for much-needed, large-scale redevelopment projects in Philadelphia.

For instance, when the city announced in November that $10 million in housing funds were available, it received $50 million in proposals, according to Rick Sauer, executive director of the Philadelphia Association of Community Development Corporations. SPARC applied for $700,000 toward seven new homes. It is awaiting word on its application.

Under Newberg, SPARC had eschewed piecemeal rehabs of a house here or there, in favor of broader projects that require a critical mass of properties.

That meant SPARC spent years acquiring vacant lots and deteriorating houses in anticipation of large-scale redevelopment once enough properties were in place.

The downside to that method is that the properties have to be maintained in the interim.

In 2005, Philadelphia Police Officer Angela Landis was injured and left with debilitating nerve damage when she chased a suspect into one of SPARC's decaying properties. She sued and, in July, won the $4 million jury verdict.

While the jury found SPARC negligent, Newberg said the Nautilus Insurance Co.'s decision to ultimately cover the award was based on the carrier's assessment that SPARC had properly maintained the property.

Newberg said he would officially leave SPARC by March. He said he would continue to devote himself to redevelopment work through his private consulting firm, Capital Access.