Developer Bart Blatstein is being sued on grounds that he failed to complete his purchase of a South Philadelphia site on which he plans a massive residential and retail complex, a new setback for the beleaguered proposal.
The property's owner, NH Philadelphia Properties L.P., is seeking to recover "liquidated damages" it claims to be owed under its purchase agreement with Blatstein's Tower Investments Inc., attorney Matthew McClure said in a letter to Zoning Board of Adjustment Chairman James Moylan on Monday.
In the letter, a copy of which was obtained by the Inquirer, NH Philadelphia seeks a 30-day delay of the zoning board's vote on Blatstein's proposal for the northeast corner of Broad Street and Washington Avenue to allow for resolution of the litigation.
The letter says Blatstein's company has had no legal claim to the property since March 15, when it missed a deadline to close on the deal. Tower "currently holds no interest in the property, has no authority to act on behalf of the owner, and therefore has no right to pursue the application," McClure wrote.
Blatstein's project calls for a 32-story tower and an outdoor shopping mall atop a city-block-sized podium of larger-format retail and parking.
The delay request comes about two weeks after City Councilman Kenyatta Johnson, whose district includes the development site, introduced legislation to bar construction on the land for a year, citing community opposition. The zoning board had voted a day earlier to permit the development, but backtracked on its decision later in the day after being told it had been made prematurely.
Zoning board spokeswoman Karen Guss confirmed Monday that the letter from McClure was received, but she made no comment concerning it. McClure declined to comment on the letter.
Blatstein attorney Ronald Patterson did not immediately return a call seeking comment.
Tower Investments has commenced its own litigation against NH Philadelphia that asserts its legal interest in the property, according to the letter. Lawyers for the owner plan to ask a judge on Tuesday to deny that assertion, "in order that the owner can freely market its property to interested third parties," the letter says.
Blatstein needs the zoning board to grant him special exceptions for the project's above-ground parking and elevated retail, though the planned 32-story tower is allowed by the site's permissive commercial mixed-use zoning.
That zoning was put in place in 2007, when City Council approved a change introduced by then-Councilman Frank DiCicco to allow for a proposal consisting of two 31-story towers by developer Samir Benakmoume's Rimas Properties.
NH Philadelphia, an affiliate of New York-based Hudson Realty Capital L.L.C., acquired the four-acre site from Rimas the following year through a deed in lieu of foreclosure, after Benakmoume defaulted on his mortgage for the land, according to records filed with the city.