Vacant apartment tower across from Monk’s Cafe has been sold to a New York developer

After years of decay, a vacant graffiti-covered apartment tower near Rittenhouse Square is finally in the hands of a new owner, New York-based Zoria Housing.

The 17-story property at the corner of 16th and Spruce Streets has been vacant for more than five years, owing to a failed redevelopment project by Main Line-based real estate investor Dovid Daniel.

Zoria Housing, which purchased the property for $7.7 million in July, did not respond to requests for comment.

However, the company has retained the building’s previous project architect — Stuart Rosenberg of the firm SgRA. He says the company hopes to complete the project in 12 to 18 months.

“They’re interested in doing this relatively quickly,” Rosenberg said. “The planning process has already started. It’s not visible yet, but it’s already in motion.”

After three years of court disputes over the project, public records show a mortgage linked to the property at 257 S. 16th St. was reassigned last month to a property registered to the home of Monsey, N.Y.-based landlord Michael Goldstein to resolve outstanding debts.

But Goldstein quickly flipped the property to Zoria Housing. Several Philadelphia-based developers had considered redeveloping the property over the years, but the financials of the historic property are difficult after its long vacancy, the city’s recent multifamily glut, and the relatively small size of the 60-unit tower.

“The building was too small for bigger developers to really be interested, and buyers of small real estate tend to be very unrealistic about what real operating expenses and things like that are,” said Michael Pestronk, CEO of the Post Bros., an apartment builder in Philadelphia.

Rosenberg said Zoria Housing planned to seek historic tax credits for the property, and the company has other advantages when it comes to this property.

“One of the reasons why this particular organization was able to make the numbers work is because they also have a construction company so they self-perform,” Rosenberg said. “If you can acquire a property like this using your own equity, as opposed to having to borrow dollars, you have a lot more flexibility.”

The property at 257 S. 16th St. has become an unusual eyesore in its tony neighborhood and has worried nearby neighbors for years because of break-ins and vandalism.

The trouble dates to 2019, when a company called USRE 257 bought the 107-year-old beaux arts style tower with plans to renovate the apartment building, historically known as the Sprucemont.

Construction work started, using a $14 million loan from Citizens Bank, but ground to a halt in 2022. Rosenberg said in a 2023 interview that Daniel, whom he had worked with on the building, underestimated the scale of renovations that the historic building needed.

The company, owned and operated by the developer, defaulted on its loan and filed for bankruptcy after the bank sought to collect on $12 million in unpaid debts. A string of contractors also filed suits, saying they had not been paid.

In 2023, lender Citizens Bank successfully petitioned to have the tower placed into court-appointed receivership, and it has nominally been stewarded since then by SREA Property Management LLC — although often not to neighbors’ satisfaction.

Graffiti quickly covered the exterior of the building, and neighbors asked SREA and Citizens Bank to do a better job of cleaning the structure and making it safe from intruders.

Maintenance reports filed in court by SREA this year acknowledged that managing the building was “unusually complex” and that “vandals frequently accessed the building, leaving trash, graffiti, and urine” while “stealing materials such as copper.”

“I have gotten complaints from my residents about it, and I get asked about it literally by everybody that comes to Philly to visit,” said Giuliano Pignataro, who owns the Touraine apartment building across the street. “Anybody that comes to stay in the apartment, anybody that walks past it that knows me says, ‘What the hell is going on with this building?’”

Foreclosure of the building was repeatedly delayed by bank intervention, as Citizens sought to find a buyer.

Court filings this year state that Citizens “received several written offers” and entered into a sales agreement with an unspecified buyer on May 2. A company registered to Goldstein’s home, called 257 South 16th Street Note LLC, assumed the mortgage soon afterward, according to city property records.

Now Rosenberg says that Zoria Housing, which is based in Queens, will bring the saga to a close.

“I’m really excited by this because I’ve been working on this project for almost five years, and we’re finally going to be able to restore this beautiful historic structure,” Rosenberg said. “I’m sure the impact on the neighborhood is going to be enormous.”