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Builder's ambition hits Phila. ceiling

The legal battle for a World Trade Center in Old City touches on Council politics and community priorities.

The proposed World Trade Center on the Delaware River. Developers of the 20-year-old project are suing over a 2006 height limit that covered the Old City site.
The proposed World Trade Center on the Delaware River. Developers of the 20-year-old project are suing over a 2006 height limit that covered the Old City site.Read more

Rising on the bank of the Delaware River, Philadelphia's own World Trade Center promised nothing less than a new and brighter image for the city in international commerce.

With four soaring towers at the foot of Callowhill Street, the gleaming complex would house 13,000 office workers and apartment residents with an investment of $1.1 billion in today's dollars.

But now, two decades after the trade center was proposed in 1989, its New York developers are suing the city and three community groups, alleging that the high-rise vision was razed by a brand of neighborhood parochialism and political cowardice unique to Philadelphia.

"I was absolutely shocked that this could take place," said Martin Schiffman, the lead developer in a partnership called Waterfront Renaissance Associates and managing director of Carl Marks & Co. "This is bad for the city. This is the kind of story, of many, that gets transmitted out of the city about what it means to do business here."

Schiffman's account goes like this: After 17 years of planning, investing, and accommodating neighborhood groups, his project was undone by a 65-foot height limit imposed by City Councilman Frank DiCicco in 2006 in a bow to neighborhood groups whose votes he needed for reelection in 2007.

DiCicco would not comment for this article because of the pending lawsuit, but the city denies any wrongdoing, and DiCicco is not a defendant.

The city Solicitor's Office contends in legal filings that Schiffman has no case, that he has never been denied anything by DiCicco or anyone else at City Hall. And the neighborhood groups say they've done nothing to block the project.

DiCicco has acknowledged from the beginning that a 2006 ordinance he sponsored was meant to give neighborhoods more say in development. One of Schiffman's lawyers said DiCicco had told him that including the World Trade Center in the area covered by the height limit was a mistake - an account corroborated by a City Hall source familiar with the events.

While the developers "would like to try this case in the press," said DiCicco aide Brian Abernathy, "we will not descend to their level. The councilman and I are comfortable with our actions and confident in our position."

How could a mistake block a project of such importance? Schiffman shrugs and blames Council politics as the most likely suspect. The City Hall source familiar with the deal said DiCicco questioned whether the World Trade Center had ever moved beyond the "vision" stage; otherwise, he and the developer would have found a way to make it happen.

Schiffman said the project's completion remained his "unambiguous intention," but its future is uncertain.

The obstacles are tall: a deep recession that has choked financing, Schiffman's demand in federal court for damages, and the 2006 DiCicco ordinance.

Schiffman acquired a license from the World Trade Centers Association, which has 286 centers in 85 countries, in 1988. The next year, he began his quest to develop it on the Philadelphia waterfront, with the enthusiastic backing of the administration of Mayor W. Wilson Goode.

Waterfront Renaissance Associates that year nailed down a critical agreement with three neighborhood groups: Old City Civic Association, River's Edge Civic Association, and the now-defunct Penn's Landing North Civic Association.

The agreement included design changes such as a 40-foot setback from Callowhill Street to preserve views and the installation of sidewalks along Columbus Boulevard. In exchange, the neighborhood groups agreed to "support and assist" Waterfront Renaissance Associates.

Mayor John F. Street even helped the project qualify for a state Keystone Opportunity Zone designation, and all its tax breaks, by identifying 11.5 acres of city land for future development across Columbus Boulevard from the project's 5.3-acre site.

By early 2006, Schiffman said, his group had obtained $100 million in financing for a 28-story apartment tower, the project's first phase.

But Schiffman said he was unaware that DiCicco, on Dec. 15, 2005, had introduced his bill to control development in and around Old City. It set a five-story limit, which DiCicco, Abernathy, and neighborhood groups acknowledged was intended to force developers to seek variances before the Zoning Board of Adjustment.

The inclusion of the World Trade Center in the zone was a mistake that no one - including DiCicco, the developers, and their attorneys - caught as the bill moved through City Council, according to the City Hall source with knowledge of the process.

Thomas Leonard, a former city controller and an attorney for the developers, said last week in an interview that DiCicco and Street had told him after the bill passed that they didn't know it would affect the World Trade Center.

Leonard noted that the original bill had been meant to control nightclubs and other nuisance businesses. He also pointed out that legal notices referring to the ordinance never referred to height limits - though transcripts show that the height limit was mentioned in two public hearings.

DiCicco "had forgotten all about the World Trade Center," Leonard said.

The City Hall source responded that DiCicco had offered to address the developers' concerns when the project was closer to construction.

Subsequent conversations toward a political solution between DiCicco and Leonard went nowhere. Leonard said DiCicco had wanted the developers to go through the variance process, which gives community groups a chance to voice their objection to projects, even though zoning and planning board members have the final say.

Requiring the developers to obtain variances for each phase of the trade center, after previously obtaining all the approvals, Schiffman said, tainted the project with such uncertainty that he had to allow his financing to lapse.

With interlocking pieces of the project dependent on one another, he said, his development team could not proceed, subject to the whims of neighbors and Council politics on a phase-by-phase basis.

Schiffman originally sued in state court in February 2007. The case was soon moved to U.S. District Court in Philadelphia, where he initially alleged conspiracy by the neighborhood groups and Abernathy, DiCicco's aide. District Judge Lawrence F. Stengel dismissed those allegations.

Now Schiffman is asking Stengel in an amended complaint to void the law and award him unspecified damages; he estimates he has spent at least $22 million on the project. He contends the law is an unfair, and even illegal, abdication by Council of its authority over planning and zoning to neighborhood groups for political reasons, since those groups often have the power to make or break a Council member's reelection.

DiCicco has said publicly on several occasions that the height limit was a way to "start a conversation" with developers about design and neighborhood impacts, but that the Zoning Board of Adjustment, and not the neighborhoods, had the final say on variances.

The developers, the city contends, were never denied anything by the city and are trying to "circumvent the established and exclusive procedure for obtaining a final decision" with a lawsuit.

Arthur W. "Terry" Lefco, attorney for the civic associations, said he was perplexed that Schiffman would sue the neighborhood groups, who "stand ready to perform their obligations if anyone asks them to" - that is, back any applications for variances.

The suit notwithstanding, almost everyone in Philadelphia - including Mayor Nutter, DiCicco, and even the neighborhood groups that continue to support the height-limit ordinance - say they favor an empowered City Planning Commission with clear rules and sound land-use principles.

A new zoning overlay for the waterfront, which would remove the height limit and address the haphazard zoning process that Schiffman complains of, received preliminary approval by a Council committee Wednesday. The measure is a precursor to a permanent comprehensive zoning overhaul of the waterfront that would override DiCicco's Old City ordinance. It includes no height limit.

"The process that all of us have been working within has been unfair to developers, community groups and their volunteers, and, most importantly, to the city of Philadelphia," DiCicco told the City Planning Commission on April 21.

Matt Ruben, president of the Northern Liberties Neighbors Association, while not involved in the lawsuit, has concerns about the scale of the World Trade Center.

He said the height limit in Old City, subject to individual review, was merely a case of civic associations trying to protect their neighborhoods from inappropriate development in the absence of an effective planning commission.

"Any power we had in this area we got because there was a vacuum at the city level," Ruben said. "People like me say if there are going to be no rules, then you have to come deal with us."

Indeed, the Nutter administration has embraced a new "Civic Vision" for the Delaware River waterfront, initiated by DiCicco and designed in consultation with PennPraxis, an arm of the University of Pennsylvania's Design School. The Planning Commission has been given new weight under Nutter, and a Zoning Code Commission, also proposed by DiCicco, has been tasked with recommending changes to the city's arcane laws.

That would drain some of the powers wielded by Council members and neighborhood groups. Ruben said he would gladly give that up "in exchange for a city government that has a good plan in place and clear rules."

The new zoning overlay could come up for a vote as early as Thursday.

Harris Steinberg, executive director of PennPraxis, said the World Trade Center was not in conflict with proposed zoning changes.

"In theory, office uses with a mixture of uses on the ground floor and supported by the park network would be compatible with something like a world trade center," Steinberg said. "For us, the types of uses certainly seems compatible with the recommendations of the civic vision."

Schiffman said the new overlay offered him no relief. Its requirements are so onerous that it amounts to "an impermissible, indefinite moratorium on development, disguised as a zoning ordinance," he wrote in a May 26 letter to Nutter.

The two sides must agree on something, or have their day in court, before anything moves.

That leaves a status quo of weeds, asphalt, and a storage facility on the lot squeezed between I-95 and Columbus Boulevard, north of the Ben Franklin Bridge and far south of being built any time soon.