Gov. Rendell said Friday that the state would take over development of a new Family Court building, a decision that apparently kills a no-bid deal approved by the state's top judge.
Rendell said he would release the $200 million for the huge courthouse at 15th and Arch Streets, but would require competitive bids, even if that means delays, to make sure the project is scrubbed of any conflicts of interest.
Rendell's announcement means the apparent end of the court system's two-year-old development deal with Donald W. Pulver, a developer from Conshohocken.
The Inquirer reported on Friday that Jeffrey B. Rotwitt, a lawyer the courts hired as a real estate consultant, has also been collecting fees on the other side of the deal as Pulver's co-developer.
"The commonwealth always looks at potential conflicts of interest, particularly when it comes to the taxpayers' money," Rendell said. "We will make sure there is no conflict of interest in this deal, even if it means slowing it up."
Rendell, joined by Chief Justice Ronald D. Castille and Mayor Nutter, appeared at City Hall to announce the funding for the 14-story, 29-courtroom building. Family Court handles some of the most sensitive cases in the justice system: juvenile crimes, divorces, child-neglect hearings.
Judges and advocates for women and children have fought for years to replace Family Court's current quarters, two crowded and outdated buildings, one at 1801 Vine St. and the other at 34 S. 11th St. Rendell pointed out that battered women sometimes hide from their abusers in stairways or bathrooms in the buildings because there is no separate and secure place for them to wait.
The lot at 15th and Arch, across from JFK Plaza, is owned by the Philadelphia Parking Authority; Pulver has the development rights under a deal that expires July 1. Since 2008, the courts have been paying fees to Pulver, architects, and Rotwitt.
Rotwitt's law firm, Obermayer, Rebmann, Maxwell & Hippel, has received more than $1 million from the courts so far as payment toward his total fee of $3.9 million. Rotwitt has received close to $500,000 in payments from Pulver, money that went to his private development company, Deilwydd Property Group FC L.L.C.
Plans are completed, and Pulver said he was nearly ready to start. But his deal appears about to collapse, due in part to revelations about Rotwitt's dual roles.
Castille approved Rotwitt's $3.9 million fee. But he said he knew nothing about Rotwitt's work as co-developer until The Inquirer started asking questions about it last month.
Rotwitt insists that Castille and other court officials have known about it for two years. He contends he has no conflict because his work with the court was done before he made a deal with Pulver.
Pulver and other consultants already have received about $11 million in fees from the courts, authorized by Castille without bids or even a final development agreement.
On Friday, Rendell announced that the project instead would be handled by the state's Division of General Services, which usually supervises construction projects. Under state law, projects built with state capital funds generally have to be subject to competitive bidding.
"The DGS will handle the bidding and we will apply our own rules to the bidding, as we always have," Rendell said.
Kevin Feeley, a public relations consultant Rotwitt hired, said Rotwitt and Pulver hadn't decided whether to put in a bid.
Meanwhile, lawyers and DGS officials are still trying to figure out how to go about blowing up Pulver's deal and starting over.
"We don't know," said Donna Cooper, the state's secretary for planning and development. "We have to figure that out. It's a big problem."
For example, the plans and drawings for the building are done, paid for with $5.3 million in court funds. But because there was no bidding, it's not clear whether the state can still use those documents.
Castille had explained that he "rolled the dice" on paying the fees up front to keep the project moving.
"Certain things have come to my light, or my attention, which may cause us to renegotiate our existing contract that we have right now," Castille said Friday. "That'll be discussed later and that's all I can say about that."
Louis Applebaum, Philadelphia's procurement chief for a decade, said competitive bidding would probably give the public a better, less-expensive courthouse.
"Competitive bidding does yield the lowest price and will bring the best players," he said.
Another complicating factor in the Family Court negotiations was the fate of the court building on Vine, modeled on the Hotel de Crillon in Paris.
That's now settled. In June, the city will ask developers for proposals on a plan to convert the building into a museum and luxury hotel. The state will contribute $20 million.
It's still unclear how the decision to seek bids for the new courthouse would affect construction timing.
Nutter struck an optimistic tone: "Since it's anticipated that construction will start in early July, I look forward to seeing all of you at a groundbreaking . . . just down the street."
But starting from scratch could mean substantial delays. Ed Myslewicz, a DGS spokesman, said the agency typically bids such projects in four stages. The process can take as long as a year.
Advocates who have been pushing for the new courthouse said they were impatient to get started, but also said they did not want a project tainted by allegations of conflicts and double-dealing.
"We've been on this for seven years," said Frank Cervone, executive director of the Support Center for Child Advocates. But Cervone said Rotwitt's dual role complicated matters.
"I think Jeff Rotwitt has to give the money back," he said.
Lynn A. Marks, executive director of Pennsylvanians for Modern Courts, also applauded the move to competitively bid the project, though it was likely to delay the start of construction. But she stressed that the state still needed to move as quickly as possible.
"The clock is ticking while Ed Rendell is still governor," said Marks, a leader in the push for the new courthouse. "We hope all the players are going to work this out."
The preliminaries to possibly unwind that deal began earlier this week.
On Tuesday, lawyer Henry E. Hockeimer Jr. of the firm Ballard Spahr, which represents the courts and Castille, sent Pulver and Rotwitt a letter asking them to detail their partnership and list everyone who received any money from the courts.
Rotwitt did not respond. Lawyers for Pulver did not provide the information, but said, "We previously advised your firm of the involvement of Deilwydd Property Group L.L.C. and Mr. Rotwitt in this project months ago."
Feeley declined to comment on Rotwitt's dual roles, other than to repeat that documents showed that court representatives knew about his work as developer.