Gagandeep Lakhmna’s real estate company was known to use white stretch limos in the mid-2000s to take potential buyers for tours of his latest Northern Liberties condominium.
But the marketing gimmick didn’t sell enough units to stave off foreclosure. By 2009, Creating Real Estate Innovations’ project, at the corners of North American and Brown Streets, was back on the books of its lender. It became one of several developments that Lakhmna would leave unfinished.
“Some projects you just have to walk away from,” he told 6ABC at the time.
Lakhmna made less of a splash when he quietly returned to Philadelphia’s development scene after the Great Recession, building clusters of rowhouses and apartments in Northern Liberties, Kensington, and Fishtown — which some tenants and buyers have complained are riddled with construction flaws.
His profile may now be in for an unwelcome boost, as this week he began fighting a public eviction battle with more than two dozen tenants allegedly hoodwinked out of their rent at one of his North Philadelphia complexes. He’s also sparring with neighbors of an apartment tower he has proposed in Kensington.
“As we learned more and more about his history of development in the city, we became very opposed to him building in our neighborhood,” said Michael Manfroni, zoning chair of the Olde Richmond Civic Association, within whose boundaries Lakhmna plans to build a seven-story apartment complex.
“It seems like he leaves a wake of destruction on every project that he touches,” Manfroni said.
At other properties Lakhmna owns, a tenant is withholding rent over frequent flooding and water damage, others are deep in legal battles over construction flaws, and at least one lender has put him under scrutiny for potential default.
Neither Lakhmna nor his lawyers at Gamburg & Benedetto responded to emails from The Inquirer requesting comment. A person who answered a call placed to a phone number belonging to Lakhmna, according to court records, said it was the wrong number.
Flooded basement, frustrated tenants
Lakhmna, 49, splits time between Philadelphia and Los Angeles, where he’s building a five-story apartment complex and owns a $1.23 million plot of land. He’s in default on his property taxes on the land due to a 2020 delinquency, according to the county assessor’s office.
He also recently bought a $1.65 million penthouse in Miami’s financial district. And, in December, he paid $917,000 for 1.7 acres across the street from the Philadelphia Country Club in Gladwyne, Montgomery County.
Lakhmna was in the news earlier this month when he started evicting and locking out tenants of the Moscow & Monica apartments just west of Fishtown who say they made leasing agreements and paid rent to a property manager. The manager, Frank Sanders, has allegedly since disappeared, along with the money.
The state attorney general has intervened in the case, calling the lockouts illegal, and on Monday, a Common Pleas Court judge ordered that residents be allowed into the building and treated as leased tenants until a March 29 hearing.
The District Attorney’s Office is investigating Sanders’ involvement, according to a law enforcement source.
In fact, Lakhmna’s rental license for the Moscow half of the complex, at 1413 Germantown Ave., had been inactive for almost two months up until last week, meaning tenants of that building were not legally required to pay rent during that time.
And there are signs of financial trouble. Since at least December, the $11.8 million loan against the 50-unit Moscow building has been on a “watchlist” for potential default due to a drop in operating income and a lapsed property insurance policy, according to data from debt-tracking firm CredIQ, which also noted an increase in vacancy at the project.
The Moscow & Monica tenants aren’t the first to complain about Lakhmna.
Andrew Toups and Brooke Rumper moved into one of Lakhmna’s rowhouses, at 1212 E. Susequehanna Ave. in Fishtown, in August 2019, drawn by the unit’s modern appliances and sleek look. But the couple say they found problems under the polished appearance.
During heavy rains, the basement fills with about three inches of water. The ceiling leaks and walls are stained with water damage. In the past, Toups and Rumper say, they have had to spend the night at a hotel to escape the foul smell emanating from the waterlogged basement.
“Every time I hear a heavy rain, I wake up in the middle of the night,” Toups said. “I keep a pile of towels to mop up water in the bedroom.”
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In January 2020, Toups, frustrated that the flooding wasn’t fixed despite repeated complaints, began withholding 20% of his rent.
Lakhmna filed to evict him. But Toups learned from the city’s Fair Housing Commission that the landlord had never gotten a rental license for the property and that he didn’t qualify for one because of open citations by the Department of Licenses and Inspections over the water damage.
During a hearing before the city’s Fair Housing Commission in February 2020, representatives for Lakhmna agreed to let the couple remain at the property rent-free until the water-damage violations were addressed and the rental license reinstated, records show.
After Lakhmna’s rental license was restored late last year, once the water damage had been painted over, Toups said he resumed paying rent — minus the 20% for the basement that continues to flood.
More water problems
Issues with this complex date back years to the project’s groundbreaking in fall 2016.
When Lakhmna’s company Greenpointe Construction started building the six-rowhouse complex, the company dug a deep trench without providing adequate support to the building next door, according to an engineer’s report.
Marc Sherman, whose son owned a neighboring rowhouse at 1214 E. Susquehanna that had been converted into three apartments, watched as a wide crevasse formed across the center of the building’s cellar.
Soon, the building’s brick facade began to crack, as well, and L&I declared the property unsafe, forcing the eviction of the tenants, including a bartender and construction worker drawn to what Sherman said had been affordable rents in the quickly gentrifying neighborhood.
Lakhmna settled a lawsuit with Sherman’s son for an undisclosed amount.
Once Lakhmna’s complex was completed in 2017, problems continued.
Lakhmna built the complex without an underground vault to hold water-flow-measurement equipment and without a backflow-prevention device, both of which are required by the city’s plumbing code, court records show.
Because of those lapses, Philadelphia Water Department officials refused to install water meters for billing. But Lakhmna had his contractors tap into the city’s water supply anyway, without using meters, supplying tenants with free water, according to the records.
The Water Department cited Lakhmna for “theft of service” and demanded he complete the required work. He appealed the citation, but it was affirmed three times. Water Department spokesperson Brian Rademaekers said the work had not been completed as of the last court judgment in his agency’s favor in July 2020.
Water issues have come up on other Lakhmna properties, as well.
Five people who hired Greenpointe to build rowhouses on the 1500 block of Mascher Street, also in Kensington, allege in an ongoing lawsuit that Lakhmna “engaged in various deceptive and dishonest acts to avoid municipal oversight and increase profits,” including “substituting inferior materials” that were not weatherproof, “which resulted in warped floors and water damaged ceilings and walls.”
The complaint alleges that Lakhmna failed to install a storm water drain, which “continues to result in flooding, soil erosion and water penetration in the foundation walls and basement.”
Seven stories in a rowhouse neighborhood
Lakhmna plans to build a seven-story, 150-unit apartment complex at 2400 E. Huntingdon Ave., which neighbors say would block sunlight to the surrounding two-story homes and alter the historical character of the century-old hosiery mill. The city’s Department of Planning’s Civic Design Review board in a meeting said the building scale was “massive and out of context with the community.”
The residents have formed a coalition called Build Like You Live Here to advocate against the project.
Manfroni, of the civic association, said Lakhmna hasn’t engaged with the community. The one time Lakhmna appeared at a virtual community meeting, he logged off before the Q&A, citing technical difficulties, Manfroni said.
Lakhmna acquired the property for $2.5 million using a mortgage from Alcova Capital. The New York-based lender is new to Philadelphia, having originated just three mortgages here, including Lakhmna’s, since mid-2020, records show.
Alcova did not respond to messages asking about its activities in Philadelphia.
Councilmember Mark Squilla said he agreed with the Civic Design Review’s assessment and is working to find someone to purchase the property and build something less dense and more community-oriented.
For now, Lakhmna has the green light and could break ground any day.
“I never really oppose by-right projects” allowed under zoning codes, Squilla said. “But this is just such an overbuild.”