The 18 rowhouses that line a narrow lane off Lena Street in East Germantown must have been a charming place at one time. Built as affordable housing in the early 1990s, the simple brick homes were designed with pointed gables and wooden porch railings that mimicked the look of Germantown's early-19th-century housing stock.
But these days, neighborhood residents take pains to avoid walking down the little street. It's not just the weathered plywood that covers the windows, the broken doors that hang slack on their hinges, or the drug users who gather in the porch shadows to smoke K2, a synthetic marijuana. The street, just a few blocks from Germantown Friends School, has been made nearly impassable by a mountain range of construction debris deposited by midnight dumpers. The last residents moved out several months ago. It's hard to believe a development this new could look this old.
It will come as no surprise to anyone familiar with Germantown's recent history that these gabled houses were built by Emanuel Freeman's Germantown Settlement, a nonprofit social service agency that morphed into a real estate juggernaut during the three decades he was at the helm. Using charm and political connections, Freeman was able to secure an estimated $100 million in public money to help support his pet projects, including a charter school, health clinics, and affordable housing. But the operation became overextended, and Settlement was forced to file for bankruptcy in 2010.
Freeman, now 68, went underground after things fell apart, but it appears he never quite left Germantown. Although most of Settlement's real estate ended up in the hands of a bankruptcy administrator, Freeman and his wife, Emma Cummings-Freeman, somehow managed to remain involved in four of Settlement's spin-off companies, with a combined portfolio of 45 properties. The Freemans' management — or, rather, mismanagement — of these homes has left a trail of blight across Germantown, making it harder for the historic neighborhood to pull itself out of a spiral of decline and disinvestment.
But now, thanks to an organized effort by a group of residents, the city may finally be forced to act.
Pressured by the group's leaders — Yvonne Haskins, Connie Winters, Allison Weiss, and Irv Ackelsberg — the Redevelopment Authority was shamed last month into initiating foreclosure proceedings against the four holding companies. Altogether, those companies owe the authority $3.5 million.
You might ask, what took the authority so long?
For years, city officials at various agencies have looked the other way as the holding companies racked up code violations, unpaid property taxes, and utility liens. The tax bill for the 18 gabled rowhouses alone now stands at $22,000. Worst of all, the city never undertook an investigation of Freeman's management of Germantown Settlement.
"We don't understand why the city hasn't been more responsible," neighborhood activist Ted Stones told me as we picked our way through the trash. He and Keith Q. Schenck, founder of Friends of Germantown, have organized repeated cleanups. "It was getting to the point where people didn't want to come to meetings because they despaired about getting anything done," Stones said.
What reenergized them was Freeman's chutzpah.
This year, he approached the Redevelopment Authority to negotiate a deal. He would pay back the original $3.5 million loan from the authority, he said, if its board would forgive the interest and penalties — which would have brought the total debt to $9 million. Astonishingly, the board agreed to take him up on the offer.
How could the authority have entertained such an arrangement given Freeman's notorious record and the properties' deplorable conditions? It's not as though the board didn't know the backstory. Three of its five members — Rob Dubow, Duane Bumb, and James Cuorato — worked for the city agencies that channeled money to the nonprofit in the late '90s. A fourth, Anne Fadullon, who now runs the Department of Planning and Development, did a stint at the authority and is a longtime Germantown resident.
The possibility that Freeman might get off easy once again, just as he did after the original Settlement bankruptcy, so incensed Germantown activists that they mounted a campaign to stop the deal. Red-faced, the authority agreed to start foreclosure.
Still, it's a small victory. The process could take years. In the interim, the Redevelopment Authority wants the Philadelphia Housing Authority to manage the 45 properties, which include 140 housing units. But the Germantown activists argue that the housing agency has done a poor job of managing its existing holdings in the neighborhood. "There has to be a better solution for a community that has suffered under the hands of Emanuel Freeman for all these years," argued Haskins, who also worries that the City Council members will use their prerogative to distribute the properties to their pals.
The foreclosure will also cost the Redevelopment Authority dearly. The agency uses loan repayments to fund the construction of new affordable housing projects. If the agency is forced to write off the loans, that means it will have $3.5 million less to reinvest. Meanwhile, the taxpayer-funded subsidized housing that Settlement built in the '90s may not be salvageable after the years of neglect under Freeman's management. At a time when the city's low-income residents are desperate for decent housing, and the federal government is cutting back dramatically on grants, Philadelphia can ill afford the loss of inventory.
I couldn't reach Freeman for comment. His lawyer, Gary M. Perkiss, never returned my phone calls. As far I can tell, Freeman hasn't responded to a reporter's request for comment since the 2010 bankruptcy.
If he had responded, I would have asked him how a salaried employee of a failed nonprofit — albeit a well-paid CEO — came to manage the large real estate portfolio. The Redevelopment Authority confirmed that his name does not appear on any of the deeds, although his wife is listed as the president of one of the holding companies. Because the properties are deeded to a limited partnership and not to individuals, "it is difficult for us to understand who the exact owners are," said Ryan Harmon, the authority's in-house lawyer.
But according to Cuorato, Freeman "certainly acted like the owner" when he appeared at the authority's board meeting to plead for loan forgiveness.
That was what Margaret Scott assumed when Freeman showed up recently at her front door on East Church Lane to collect her $875 monthly rent. For 26 years, the 73-year-old grandmother and foster mother has lived in an 1825 house renovated by Germantown Settlement. She used to drop off her rent at a nearby senior housing project, but that stopped after the building was shuttered this year by the holding company.
When she informed Freeman that her roof needed repairs, he said it was her responsibility. When he offered to handle the contractor, she handed him $1,300 in cash to pay for the work, she told me. "He saw the hole in the roof. He saw the rain coming in," Scott said.
She hasn't seen Freeman since.
That's another reason that foreclosing on the four holding companies isn't enough to close this sad chapter. Before another penny goes to undo Freeman's mess in Germantown, all of Philadelphia deserves full accounting of how this taxpayer-funded slumlord blighted Germantown.