Philly City Council reluctantly agrees to borrow $200 million to buy the police headquarters building
Officials warned that if the city did not exercise its option to buy the building this year, the annual rent price would have nearly doubled. Still, Council balked at the price.
Philadelphia City Council members on Thursday begrudgingly passed a measure out of a key committee allowing the city to borrow $200 million to purchase the North Broad Street tower where the police department is headquartered, a move that came after lawmakers initially threatened to derail the acquisition.
Now, the city is set to spend the eye-popping sum so that it can own the 18-story landmark at 400 N. Broad St. that housed The Inquirer before the police department moved into the building in 2022.
The city has been leasing the property for about $15 million a year from developer Bart Blatstein. Officials warned that the rent was set to nearly double this year if the city did not exercise a one-time option to buy the building.
Officials from Mayor Cherelle L. Parker’s administration on Wednesday told Council’s Finance Committee that the tower itself is appraised to be worth $21.5 million.
However, under the terms of an agreement that the city inked with Blatstein in 2017 under former Mayor Jim Kenney, in order to buy the building, the city is required to assume the roughly $200 million worth of debt on the property associated with a massive renovation.
The city will issue bonds to buy the debt and will pay roughly $15 million a year in debt service.
Council members were incensed Wednesday that Parker’s administration was asking lawmakers to approve a massive building purchase amid ongoing budget negotiations. The administration had simultaneously proposed several tax increases to fund public schools, homelessness prevention, and pothole remediation.
“We’re in the middle of budget negotiations where we’re being asked to do things for similar amounts of money [and] we’re in a predicament to pay almost a quarter-billion dollars for one building,” Councilmember Katherine Gilmore Richardson, a Democrat who chairs the Finance Committee, said Wednesday.
She recessed the committee and held up the bill until Thursday morning, when the members voted unanimously to pass the legislation out of committee. It is likely to be called up for a final vote in the full Council next week.
Council is expected to vote Thursday to reject Parker’s proposed tax increases.
While members on Wednesday lambasted the size of the real estate purchase, the city’s eventual acquisition of the building was expected under the terms of the controversial 2017 deal inked under Kenney’s leadership.
At that time, Council approved a plan for the city to lease the building from Blatstein so that he could maintain ownership for nine years. The idea was that he would qualify for a $40 million federal historic tax credit, which is extended only to private actors, meaning it was not available to the city.
