Councilman Kenyatta Johnson’s involvement in the sale of city-owned land is at the center of ally’s indictment

A childhood friend of Philadelphia City Councilmember Kenyatta Johnson skirted regulations, defrauded taxpayers, and made a killing buying and reselling city-owned properties in rapidly gentrifying Point Breeze by trading on his connection to power, federal authorities said Friday.

Prosecutors accused developer Felton Hayman, 53, of Wilmington, Del., of enlisting Johnson to help him sidestep the thicket of complicated procedures governing the sale of city lands.

He then failed to deliver on promises to build affordable housing on the parcels he’d bought at cut-rate prices, instead flipping them in some cases for as much as 15 times what he originally paid.

In all, authorities say, Hayman made more than $1 million on the sales between 2014 and 2018.

“To obtain … discounted prices for the vacant properties from the City of Philadelphia or evade certain restrictions placed on the development of the properties, Felton Hayman made a series of misrepresentations to city officials,” prosecutors said in court filings.

Johnson — a three-term Democrat from Point Breeze who is considered to be a front-runner in the race to replace Darrell L. Clarke as Council president — is not accused of wrongdoing in the indictment unsealed this week charging Hayman with three counts of wire fraud. In fact, prosecutors cast him as a victim of Hayman’s misrepresentations about his true plans for the land he was buying.

But the case against Hayman has once again drawn scrutiny to how Johnson’s land-use decisions for his district have benefitted friends and political allies.

The Inquirer documented several of those transactions — including some of the land deals involving Hayman — in a 2016 investigation.

» READ MORE: Developers bought low and sold high with the help of Philadelphia City Councilmember Kenyatta Johnson

In a separate case, Johnson was acquitted by a federal jury in November on charges alleging, in part, that he’d accepted payoffs from a pair of nonprofit executives looking for his help to hold on to properties they’d bought from the city.

Johnson relied on a custom known as councilmanic prerogative — the tradition by which members of Council hold final approval over nearly all land-use decisions in their districts — to block city efforts in 2013 to revoke the nonprofit’s ownership of the parcels because it had not lived up to the terms of the sales agreement.

Proponents of the practice say prerogative power helps give residents a voice in neighborhood development through their elected representatives and can help streamline the development process. But critics of the tradition, which is not codified in any city laws, maintain that allowing one legislator unchecked sway over land use makes the system vulnerable to unethical behavior.

» READ MORE: Councilmanic prerogative in Philadelphia: What you need to know

Johnson’s use of councilmanic prerogative factors heavily into Hayman’s case. But their long history together raised red flags even before the indictment this week.

Hayman and Johnson grew up together in Point Breeze but ultimately took different paths. Johnson went into politics — first working as an aide to State Sen. Anthony Hardy Williams, then winning office himself as a state representative before his election to Council in 2011.

Hayman, meanwhile, found himself in prison for 15 years after he pleaded guilty in 1991 to a third-degree murder charge. Police said he, then a gang member, had helped concoct a plan to kill a rival drug dealer. The hit went awry when some of Hayman’s coconspirators shot and killed the wrong man in a West Oak Lane tavern.

After release from prison, Hayman worked as a driver and legal assistant to a Philadelphia lawyer before going into the construction business.

When Hayman in 2014 expressed interest in redeveloping three city-owned vacant lots in the now booming neighborhood where he and Johnson grew up, the Council member was willing to help. Hayman said he intended to build “three-story homes for affordable housing” on the lots on Ellsworth and Manton Streets.

Johnson wrote letters to the city’s Vacant Property Review Committee — one of the bodies that controlled the sale of city-owned lands — backing Hayman’s proposal.

And because of councilmanic prerogative, the committee unanimously approved Hayman’s purchase allowing him to jump the line of other potential buyers without having to engage in a competitive bidding process that might have earned more money for the land.

The indictment repeatedly notes that Hayman “failed to disclose” to the Council member that he had no intention of following through on that promise.

“Councilman Johnson is disappointed by the allegations against Mr. Hayman,” his attorney, Patrick Egan, said in a statement Friday stressing that the elected official had not been accused of acting illegally or unethically. “His interest, as always, has been for improving the community while attempting to preserve affordable and workforce housing.”

Still, because of Johnson’s support the proposed sale sailed through the approval process before that committee, City Council, and the Philadelphia Redevelopment Authority and was finalized with Hayman paying $70,488 for all three lots later in 2014.

Despite his promises, Hayman sold all three lots within two years for a combined $1.1 million — more than $1 million more than what he’d originally paid. No affordable housing was ever built on the land.

Four years later, Johnson backed another set of Hayman land deals. And this time, prosecutors say, Hayman was so sure of Johnson’s support that he hired Realtors to sell three parcels he planned to buy on South Bucknell and Titan Streets before the sales were even finalized.

That sale was approved in August of 2018 for a total of $101,000 — or just under $33,000 each. But as early as three months before the titles were officially transferred to his company, Hayman was seeking buyers looking to off-load the lots for $150,000 apiece, prosecutors said.

One lot on South Bucknell attracted a buyer who signed a sales agreement with Hayman’s Realtor before property purchase from the city had been finalized, according to the indictment.

But the deal to resell it ultimately fell through after the buyer discovered that the lot would be encumbered with deed restrictions putting timelines on redevelopment and capping the amount for which it could later be resold as part of Hayman’s sales agreement with the city, prosecutors said.

Hayman still managed to sell the two Titan Street lots he’d picked up as part of the $101,000 land purchase. Within a matter of weeks, he sold them both for a combined $230,000, according to the indictment — more than three times what he’d originally paid for them.

His profit? Roughly $142,000.

Hayman’s attorney, Robert B. Mozenter, did not return requests for comment on the indictment Friday. When interviewed by The Inquirer in 2018 about the South Bucknell and Titan Street parcels, Hayman insisted he’d done nothing wrong.

“You got a right to make all the money you want,” he said. “Why are you worried about these three lots?”

Read the indictment: