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Blatstein's S. Broad Street project was to include Target, court records show

The last time Hudson Realty Capital LLC went to court to dissolve developer Bart Blatstein's legal claim to the South Broad Street property it previously had agreed to sell him, a judge declined, saying she had seen no proof anybody else wanted to buy it.

Now, Hudson's lawyers are taking another crack at wresting back control of the South Philadelphia parcel.

Attorney John A. Guernsey said in a recent court filing that Blatstein's claim was keeping Hudson from consummating a sale to New York-based Midwood Investment & Development. The filing also contains letters revealing that Target Corp. had negotiated with Blatstein for space in the project at the northeast corner of Broad Street and Washington Avenue.

Broad & Washington LP, the unit of Blatstein's Tower Investments Inc. that had sealed a purchase contract with affiliates of Hudson, "has no right, title, or interest in the property," Guernsey wrote in this month's court petition. He said Broad & Washington's claim to the site "is an immediate and irreparable harm to [Hudson's affiliates] by preventing them from marketing their valuable property."

The legal action presents the latest challenge to Blatstein's beleaguered proposal for a 32-story tower atop a large retail-and-parking structure on the four-acre site. In May, zoning hearings on the plan drew vocal opposition from neighbors, one of whom has appealed its approvals.

Guernsey argued to Common Pleas Judge Patricia McInerney in May that Blatstein lost his legal claim to the property after missing a March 15 deadline to buy it. Lawyers for Blatstein held that the purchase agreement still should be considered valid.

McInerney let stand Blatstein's claim to an interest in the property, because Hudson Realty Capital had not demonstrated that it was interfering with another purchaser's interest in the land.

Guernsey's response came in a Sept. 13 filing identifying Midwood as having discussed "a possible agreement of sale for the property."

Blatstein lawyer Rona Rosen said Tuesday that she had no comment.

Included in the filing is a June 10 letter from Blatstein's lawyers to Midwood president John Usdan threatening legal action if negotiations with Hudson  continued.

A separate June 10 letter to Hudson Realty managing director Joseph Morningstar accuses his company of making contact with Blatstein's "proposed anchor tenant at the project — Target."

"The clear and undeniable purpose of your communications with Target was an attempt to induce Target to cease their well-developed negotiations with" Blatstein, the attorneys wrote.

Midwood acquisitions director Michelle Goldman declined to comment Tuesday. Target spokeswoman Kristy Welker said the company had no "details to share regarding potential new Target stores."

Midwood's current Philadelphia holdings include the glass-walled structure at 1430 Walnut St. that accommodates a Cheesecake Factory and a site at Ninth Street and Washington Avenue where it is developing 70 apartments. Its affiliates also acquired at least 10 properties on the 300, 500, and 700 blocks of South Street this year in transactions totaling $14.7 million, according to records filed with the city.

Target, meanwhile, has made a push into densely populated parts of Center City with smaller versions of its big-box, suburban-focused stores.

Larry Steinberg, a senior vice president at real estate brokerage CBRE, said the retailer likely has shifted its focus from Blatstein's proposal to the Lincoln Square mixed-use project being developed just across Broad Street by a partnership involving Philadelphia's Alterra Property Group.

Alterra managing partner Leo Addimando did not respond to a phone message.