‘Condo King’ Allan Domb owns more than 400 properties in Philly. What happens if he becomes mayor?

In May 2015, weeks before real estate magnate Allan Domb prevailed in the Democratic primary for an at-large City Council seat, the Department of Licenses and Inspections attempted to serve him a summons to appear in court over minor code violations at one of more than 400 properties he owns in Philadelphia.

In 2016, during Domb’s first year on Council, one of his companies was named as a defendant after the School District of Philadelphia went to court to argue the city had under-assessed one of his downtown properties.

And, in March 2017, yet another Domb-connected company petitioned the Zoning Board of Adjustment to secure an exception to the city’s zoning code that would allow for a takeout restaurant in a building he owns in Kensington.

These are just three of the hundreds of interactions that Domb and his companies have had with local government since Philadelphia’s “condo king” became a politician.

» READ MORE: Philly City Councilmember Allan Domb resigns ahead of expected run for mayor

In August, Domb resigned from Council and is now exploring a run in next year’s mayoral election. If he does so, and is elected, his dual roles as one of Philadelphia’s most notable real estate barons and the leader of the city government will present an unprecedented situation in which city employees will have to inspect, assess, and tax hundreds of properties owned by their boss’ boss every year.

Moreover, the mayor would have to recuse himself from official actions that might benefit his properties and numerous other investments, no easy feat for someone who owns a significant chunk of the most valuable real estate in Center City and has major stakes in downtown parking and restaurants.

If he becomes mayor, Domb “will be solely focused on his duties as mayor, serving the people of Philadelphia and tackling the challenges we face: bringing down crime, improving education, and reducing poverty,” spokesperson Marisa Nahem said.

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Domb declined an interview, and his campaign did not respond to detailed questions on his holdings or his plans for safeguarding against potential conflicts of interest.

“Allan will create a fire wall for himself against potential conflicts-of-interest and remove himself from any direct management of the business,” Nahem said in a statement. “Allan will exceed the ethics standards set by the city to ensure that he is doing everything in accordance with relevant laws and policies, and will abstain from any legislative or executive actions as they pertain to his properties or business entities.”

If he runs, Domb will unveil “a more comprehensive ethics plan” after entering the race, she added.

Ethics experts say merely handing over control of businesses to someone else would do little to prevent someone in Domb’s position from encountering potential conflicts of interest.

Unlike a wealthy person who puts all of their assets into a blind trust while they hold office — essentially handing over their investments to an independent trustee — there is no simple way to create similarly “blind” arrangements for a major landholder. The mayor would still know which properties he owns, and city workers would also be able to see who the owner is, according to government ethics experts.

“A blind trust really doesn’t work really well with real property. It works with goods that are fungible — for example, stocks and bonds,” said Mark L. Davies, an attorney and public integrity expert who helped write New York state’s ethics laws for local government. “They know the name of the mayor’s company, and they see that.”

Domb has given no indication he would sell off his vast real estate portfolio if elected, an enormous undertaking that would likely be financially detrimental.

An Inquirer analysis showed the former Council member has ownership in at least 434 different properties, either through direct purchases or via a network of more than 40 different limited liability companies. Domb and his companies had active rental licenses for 272 properties as of June. The properties range from high-profile buildings like 1845 Walnut Street — a 25-story Class A office tower fronting Rittenhouse Square — to a tiny Port Richmond rowhouse that houses a trendy bar to individual condo parking spots.

City estimates, which tend to trail market prices, place the combined value of these properties well in excess of $400 million. Although most of Domb’s properties were built or renovated decades ago, eight benefit from the city’s 10-year tax abatement, amounting to a $187,573 tax savings.

Domb’s campaign did not dispute any of The Inquirer’s findings about his investments in the city.

“He built a business here, invested in the city and helped Philadelphians make some of the most important decisions they’ll ever make: where to establish roots and raise their families,” Nahem said.

With a specialty in high-value real estate, Domb generally keeps his properties well-maintained, but he has nevertheless run afoul of L&I. As of August, the department listed 22 open violations across five properties for issues ranging from fire code violations to a hazardous high-rise facade. But Domb is hardly a slumlord, and that is not an unusually high level of violations given the sheer magnitude of his holdings. Past violations on Domb’s properties have almost all reached resolutions in which Domb settles and remediates the problems after a few months, or the city withdraws its complaint.

Similarly, Domb or his companies have appeared in hundreds of other lawsuits over the years, either as plaintiffs or defendants. Among them are minor slip-and-fall cases and legal disputes with contractors, but the government also has repeatedly taken Domb or his companies to court over unpaid water, gas, and tax bills. Earlier this year, the city went to court to collect on a $1,179 unpaid water bill.

That suit, like other tax and delinquency cases for Domb’s properties, almost always settled amicably with him paying up or the city withdrawing the case.

For some, the former Council member’s real estate empire, which he built over decades after growing up working class and then trying his hand as a broker, is proof he would be a successful mayor.

“With anyone who runs for mayor, we want them to have good leadership skills, to be inspiring, and we want to know they have the ability to get things done, whether in the public sector, the private sector, or the institutional sector,” said Paul Levy, who leads the Center City District and does not make endorsements in political races. “I would just see Allan’s real estate experience as a credential which gives him the experience of getting things done.”

But progressive groups have criticized Domb’s consistent support for policies that benefit industries in which he is invested.

Erika Almirón, a progressive activist and former Council candidate, criticized Domb during his days as a legislator for voting on issues like the real estate tax abatement, which reduced taxes for new development. Almirón said she’ll be even more concerned about Domb’s role in city government if he becomes mayor because he will oversee the city workers who are supposed to ensure his properties are safe and in line with city law.

“People might choose to look the other way, said or unsaid, because they don’t want to be on the bad side of the person who signs their checks,” said Almirón, who works in voter outreach for the left-wing Latinx political group Mijente. “There’s what’s legal and illegal, and then there’s what’s ethical and just. Making that distinction is important.”

There is no evidence Domb has run afoul of city or state ethics laws on such conflicts of interest while on Council, and he consistently sought advice from the Philadelphia Board of Ethics before taking actions on bills that were too close to home.

Davies, the ethics expert, said Domb would have to recuse himself “on both sides” as mayor — meaning he would not manage the business or take actions as mayor that directly affect his properties. But unlike a Council member, whose colleagues can still vote on a bill they have recused themselves from, a mayor has some responsibilities that cannot be delegated, such as signing or vetoing legislation, making recusal more complex and limiting their own power.

If someone in Domb’s position were to become mayor, Davies said, it may be impossible to fully prevent his official duties from creating a conflict with his private investments, no matter how many ethical safeguards he erects.

“A lot of times in this ethics stuff, you just do the best you can,” Davies said. “If he agrees to recuse on both sides, then it’s up to the voters if they’re comfortable with that.”

Born in Jersey City in 1955, Michael Allan Domb rose to prominence in Philadelphia real estate in the late 1970s.

Within a few years of passing the brokers exam — which he studied for at night while working as a locksmith — Domb had founded a brokerage, specialized in high-end condos, and became one of the most notable luxury brokers in the country, with a reputation as a tireless worker. After his then-wife Daphne went into labor, he stopped on the way to the hospital to deliver an agreement of sale.

Over time, Domb also bought up condos and rented them out, acquiring units in many high-profile buildings on or near Rittenhouse Square, and even owning some downtown buildings outright. Along the way, he got involved in other industries, investing in now-famed restaurateur Stephen Starr’s company in 2005 and gaining ownership stakes in six parking facilities by 2020. He also owns Schlesinger’s, a Jewish delicatessen serving items that bear the names of his properties, such as a pastrami-topped hot dog called “The 1845 Walnut.”

In addition to his real estate holdings, Domb’s brokerage salary and abstract company generate him some $530,000 per year, and he takes in hundreds of thousands more in investment income.

Domb declined to disclose his net worth when asked by The Inquirer.

If Domb were to become mayor, situations in which he would have to consider recusing himself from official actions could come up far more often than for other candidates. Political opponents of Domb raised questions about whether it was appropriate for him to weigh in on various issues throughout his Council tenure, and mayoral administrations are more heavily involved in how the city handles businesses and property owners than lawmakers are.

Council members are required to recuse themselves from all matters in which they have conflicts of interest, and to disclose those conflict in a letter to their fellow lawmakers and the Council clerk. Domb has sought advice from the Board of Ethics three times to determine whether he needs to recuse himself from various proposals. The board’s analysis primarily involved determining whether the legislation at hand affected a broad range of people or a small group that included Domb, like the tax on private parking facilities.

The board twice said Domb could vote on matters related to the real estate tax abatement for new development, which affects all property owners who build or improve on their properties. But the board also said he had to recuse himself from voting on parking tax proposals because they affected only the handful of parking facility operators in the city.

The same conflict-of-interest rules apply to mayors, but the process for disclosure and recusal is slightly different, and the circumstances in which conflicts could arise are much more varied.

For instance, if Domb becomes mayor and a city agency needed to sue one of his companies to collect on a bill, he could not be involved in any discussion regarding the lawsuit, and he would have to disclose the conflict in a letter to the Board of Ethics and the Department of Records. Additionally, state law would prohibit Domb from directly choosing a designee to handle that issue. Instead, his administration could establish a process in which another city official, such as the chief of staff or managing director, chooses who should handle issues when the mayor has a conflict.

But for legislative matters, a theoretical Mayor Domb may find his hands tied. Only the mayor can sign or veto legislation. If Council were to pass a zoning bill affecting an area where Domb owns significant swaths of real estate, like Rittenhouse Square, he may be prohibited from vetoing or signing it. That would mean the bill would become law without his signature, and Council would have carte blanche to determine the laws governing the mayor’s properties.

Beyond ethical and legal concerns, having a mayor who made his name as the “condo king” would undoubtedly factor into some of the most significant debates over gentrification and affordable housing.

Despite being deeply entwined with Philly’s real estate community, Domb has thus far largely dodged high-profile flare-ups over gentrification because he has focused on the Center City condo market and is primarily a broker and landlord, not a developer. And as an at-large Council member, Domb didn’t have to weigh in directly on as many development projects or zoning issues as district Council members.

But Domb would be at the center of those debates if elected mayor. He would appoint the Zoning Board of Adjustments, which hosts many of the most intense battles over controversial building proposals, and his administration would testify on zoning and development bills that come up in Council.

A mayoral administration led by someone as wealthy and invested in the city as Domb would have few precedents in recent U.S. history. One would be Michael Bloomberg, the billionaire former mayor of New York City.

Although their holdings differ vastly, both Bloomberg and Domb have businesses that, for different reasons, lessen the effectiveness of placing assets in a blind trust. No matter how much he separated himself from his business, for instance, Bloomberg would not have been able to avoid being linked to Bloomberg LP, which makes real-time market data terminals and software used by financial institutions. Likewise, even if Domb stepped away from his real estate business if he became mayor, he would still own those hundreds of properties.

Elected officials in those circumstances must place “more burden on recusal” to ensure public integrity, said Bruce A. Green, a Fordham University School of Law professor who sat on New York City’s Conflicts of Interest Board.

“If it’s just stock holdings, you can put your stock in a blind trust, and someone can trade for you and presumably you won’t know,” Green said. “But if it’s stuff where you can’t really help knowing, then you have to recuse yourself.”

Bloomberg placed some financial assets in a blind trust and recused himself not just from matters involving his business but also those involving its major business partners, like Merrill Lynch, Green said.

But the downside of having a mayor who must step aside on so many matters is that it deprives voters of having their chosen executive make decisions.

“These people elect a mayor. You’d like a mayor to be involved in things they have to be involved in,” Green said. “You’re denying the public the judgment of the person they elected.”