June 3- 9, 2004

city beat

Demo Dust-Up Heats Up

WRECKING HAVOC: The now-vacant lot between Ortlieb's Jazzhaus and Ray King's Northern Liberties studio remains in disrepair. Photo By: Michael T. Regan

Accusations swirl in an ongoing Northern Liberties development dispute.

by Ralph Cipriano

It's a frightening sight. On grainy video, a demolition contractor uses the grappling arm on a giant 50-ton hydraulic excavator to pull apart the side of the old Ortlieb's brewery in Northern Liberties. Then, in a subsequent clip, the excavator backs up as the brick, four-story building starts collapsing. Workers repeatedly scream as three giant rooftop compressors and several large slabs of concrete tumble some 60 feet into a pile of rubble below.

The demolition job, captured on a neighbor's video camera, is at the center of an ongoing neighborhood feud that's spilled over into the courts. In two lawsuits filed last year in Common Pleas Court, two neighbors of the brewery have charged the demolition contractor and a politically connected developer with acting with negligence and "wanton and reckless disregard" for their property.

The demolition contractor, Moneer Farhat, president of Philadelphia Building Group Inc. (PBG), in turn, sued 18 board members and employees of the Northern Liberties Neighborhood Association for slander, libel and interference with business relations. The lawsuit claims that by holding an open discussion about problems with the contractor at a neighborhood meeting, the association members engaged in "an intentional plot to harm or destroy" Farhat's business by spreading false statements. The lawsuit, however, hasn't deterred the association president from continuing to speak out.

A LOT OF DEVELOPMENT: Bart Blatstein, owner of the Schmidt's brewery site, is named in a lawsuit related to an allegedly wayward contractor. Photo By: Michael T. Regan

"We've done nothing wrong," said Matt Ruben. "We absolutely will not tolerate dangerous demolition behavior that threatens the safety and peace of mind of our residents."

A number of government agencies are also involved in the legal battle, although officials are not publicly saying what they're up to, or whether there's an ongoing investigation. When contacted for comment last week, spokespersons for the city's Department of Licenses and Inspections, the District Attorney's Office and the regional office of the federal Environmental Protection Agency all declined to confirm or deny whether there's a criminal investigation into the contractor's practices.

The phone for PBG has been disconnected, and Farhat could not be reached for comment. However, Farhat's Center City lawyer, Clark Pease, says that passions have run high on both sides, but that most of the disputes are being worked out.

"He's got issues," Pease said. "Most of them are on track and they will be resolved. He is insured, he's responsible. He does the best he can do, and I don't think anyone is going to have problems with him from here on out."

Pease describes his client as a guy who is "loved by lots of people, but he's also made some enemies." He added that Farhat "has done some great work for some bigtime people in the city."

The June 2002 demolition of the former Ortlieb's brewery, on the 800 block of North Third Street, damaged the next-door studio owned by Ray King, an artist best known locally for his four 42-foot-tall reflecting towers at Broad and Washington made of concrete, granite and stainless steel.

In his lawsuit, King charges that the contractor acted with "wanton and reckless disregard" for his property. King's lawyers, Thomas J. Gregory and Glen D. Kimball, say that the hydraulic excavator used in the demolition job is "a piece of industrial earthmoving equipment normally used for digging and trenching." But according to court papers, in the Ortlieb's demolition, the excavator was used "with its bucket extended, to bang at and tear away the structural support members" from a party wall shared by King's studio.

The suit alleges that the demolition work was done without proper permits and caused "a total breach" of the party wall, leaving the four-story King studio building "structurally compromised" with "several punctures, breakthroughs, splits, fissures and bucklings." The suit seeks more than $50,000 in damages.

Estimates on repairing King's studio have ranged between $442,500 and $846,400, according to contractors' sealed-bid estimates. (Suits filed in Common Pleas Court can only seek either more or less than $50,000.)

In addition to suing Farhat and PBG, King also sued prominent developer Bart Blatstein, charging him with negligence in failing to properly supervise the contractor. Blatstein said he couldn't comment on ongoing litigation.

Blatstein is known for his developments along Columbus Avenue, where he brought in the Riverview theater, Home Depot and Wal-Mart. Blatstein is also a major property owner in Northern Liberties, where, besides the Ortlieb's site, he has the former Schmidt's brewery and is currently building Liberties Walk, a community of galleries and apartments. He's also a major contributor to Mayor Street. The developer and his firm, Tower Investments Inc., has donated a total of $40,000 to the mayor in recent years, according to www.hallwatch.org.

King's property was inspected in 2002 by the Drexel Hill-based James T. Smith Engineering Co. on behalf of Tower Investments Inc., according to court papers. Tower's engineering report concludes that the demolition contractor was at fault.

"There is no doubt that severe damage has been inflicted on the north wall of [King's property] due to improper demolition techniques and poor workmanship," Smith wrote.

In court papers, a lawyer for Blatstein also blames the demolition contractor in saying "damages were caused solely by the negligence and carelessness of co-defendants, [PBG] and Moneer Farhat, and are solely or jointly and or severally liable."

Despite the criticism, Pease says Blatstein's companies have continued to use Farhat's company. "Over the last years, they pretty much have been his biggest clients," Pease said. He added that the two damage claims from the Ortlieb's demolition job are in the hands of insurers and that both will be resolved.

The damage to the King studio took place while King was preparing for his July 6, 2002, wedding to Deborah Scoblionkov, a freelance writer who writes a wine column for The Philadelphia Inquirer and has contributed to City Paper.

"It's like a horror movie that doesn't end," said Scoblionkov, a neighborhood-association board member being sued by Farhat.

The second damage claim from the Ortlieb's Jazzhaus demolition was filed on behalf of owner Charles "Pete" Souders. Souders' lawsuit was against PIMCO Inc., a firm "owned and/or controlled by Mr. Bart Blatstein, a well-known real estate developer," and PBG, according to court records.

The suit, which seeks $48,765 in damages, charges that Souders' building was damaged because of "the defendants' negligence and carelessness." Those damages include the demolishing of a skylight, wall cracks and "a substantial hole" in the basement. The club had to close the night of the demolition, but Blatstein has already paid Souders more than $3,400 to cover business losses, the lawsuit states.

Jazzhaus chef Bill Mellette was working when the demolition work was going on next door. The pounding of the hydraulic excavator went on for hours, he said.

"The whole building would shake, the lights would jiggle," Mellette said in a recent interview. Then, a 6-foot section of concrete came crashing into the skylight, landing above the kitchen area where sous chef Corey Nelson was making a salad with marinated tomatoes and goat cheese.

Mellette said he ran out to confront Farhat. According to Mellette and Scoblionkov, who witnessed the altercation, Farhat replied, "Shit happens."

In Northern Liberties, where contractors and developers have run wild in recent years, residents say there's a lack of concern for property rights.

"It's like a gold rush," says Ruben, an adjunct English professor at Bryn Mawr College. "And decent people don't want to live in the Wild West."

Ruben and other residents say that the city government has been schizophrenic in dealing with their problems and that contractors and developers are better at working the system.

"If you close off one avenue for someone who's causing a problem in the neighborhood, they have other avenues," Ruben says. "It's like trying to plug holes in a dike."

On April 14, Farhat returned to the Ortlieb's site, apparently planning to finish the demolition job, where a stop-work order had been posted in response to complaints. Another L&I official, however, lifted the order, so neighbors called police. L&I then issued a new stop-work order.

Just two weeks ago, on the 900 block of North Second Street, Blatstein obtained an over-the-counter permit that allowed the construction of a building up to 41 feet, 6 inches, even though the height limit in that area is 35 feet, Ruben said. The developer then hired contractors who erected steel beams of more than 40 feet. The lot is adjacent to a building allegedly damaged during another PBG demolition job, neighbors said.

Ruben called L&I and learned that the over-the-counter permit was mistakenly issued. Contractors then dismantled the 40-foot steel structure in one day, but as part of that work, they started jackhammering a retaining wall they'd put up to stabilize the neighbor's building. Neighbors were concerned that that might further damage the building, so they again contacted L&I, which issued a stop-work order last week.

L&I's acting commissioner, Robert Solvibile, and an agency spokesperson both declined comment this week on any of the issues surrounding PBG and Farhat.

Farhat has a history of legal troubles. In 1997, Farhat, aka Abdul Ahmed, was given three years' probation and six months' home confinement after being charged with conspiracy to defraud the United States with counterfeiting, according to court papers. Last year, the Conshohocken Police Department issued an affidavit of probable cause against Farhat for an alleged theft by deception involving the owner of several Subway shops. In the affidavit, the shop owner says he loaned Farhat $29,800 and also gave him more than $9,400 to buy five computers as part of an investment in PBG. In return, the Subway shop owner alleged, he was given a bad check for $39,900. The affidavit claims that Farhat and some of his employees threatened the shop owner, who then contacted the Montgomery County District Attorney and police.

"I've never seen him (Farhat) threaten anybody," Pease said. He said he did not handle this dispute, but that he knew the issue had been resolved.

The Laborers' District Council of Philadelphia also has sued PBG in federal Court, charging that Farhat has defaulted on a collective-bargaining agreement regarding conditions of employment and payroll deductions for union workers. The lawsuit asks for an audit of the company, charging that Farhat has "grossly undercapitalized the corporation," and "failed to observe corporate formalities and record-keeping." The suit also alleges that Farhat has "diverted corporate assets" and "caused the corporation to be insolvent."

Although Pease is not representing Farhat on that matter, he said that the dispute was still in the courts but that the union had not been successful in its request for an audit. "I do not handle or get involved in his day-to-day business operations. I have no idea how he spends what he makes." The attorney also said that Farhat recently filed for personal bankruptcy but it was dismissed by the court.

However, Pease said the union complaints were "boilerplate language" and "legal mumbo jumbo." Pease added that he did not know if Farhat was going to continue his demolition business.

"Right now, I think it's up in the air," he said, noting that he and the lawyer for the neighbors association were trying to work out "a fair settlement."

"Hopefully it's close to resolution," he said. "There may have been some misunderstandings," he said, adding that the neighbors are "good people," and that he hoped both parties would be satisfied with the results.

Last week, the president of the neighborhood association also sounded conciliatory about the slander suit.

"We want to settle the suit as much as anyone," Ruben said. "As long as our First Amendment rights as citizens and our responsibilities as a neighborhood association are respected, we are happy to settle."