Spotlight shines on Royal Theater at Kenyatta Johnson’s bribery trial
Carl Dranoff, one of the city's most prominent developers and a partner in a failed redevelopment plan for the old Royal Theater, testified Friday in the councilmember's bribery trial.
Once the crown jewel of South Street, the old Royal Theater by 2013 had fallen into disrepair.
Known for its storied history as one of the nation’s most successful movie theaters for Black patrons, it was shuttered decades ago and had suffered from years of decay and neglect as it passed through a series of owners.
Still, that year news emerged that its current owner — Universal Companies, a nonprofit founded by music icon Kenny Gamble — had partnered with Carl Dranoff, one of the city’s most prominent developers, on a promising new revitalization plan.
But Dranoff had no inkling at the time that the project — or his dealings with a member of City Council to rezone the blighted site — would eventually make him a star witness in a federal bribery case.
“I would have wanted to know that,” he told a federal jury Friday.
Dranoff — the man behind some of the most successful development projects on South Broad Street in recent years including the luxury condo building Symphony House — testified as prosecutors closed out the first week of their case against Philadelphia City Councilmember Kenyatta Johnson, his wife, and two executives at Universal.
He walked jurors through his perspective on one of two official acts the government has said Johnson took in exchange for bribes. In 2014, the councilmember pushed legislation that changed the zoning on the Royal Theater site to help the Dranoff-Universal redevelopment project.
Prosecutors have not accused Dranoff of having any knowledge of the alleged bribery scheme, which they say Dranoff’s partners at Universal carried out. But in his testimony Friday, the developer said he wanted to see the Royal redeveloped almost as much as they did.
“Coming out of the Great Recession of 2008 to 2011, South Street was starting to improve,” he said. “There were new restaurants opening up. New housing going in. The Royal Theater, I would say, was struggling. … It was key to revitalizing the west side of South Street.”
Dranoff never signed a formal agreement with Universal to develop the property, but told jurors he agreed to help them in 2013 with their efforts to restore the building.
He’d watched the nonprofit flounder for years to do anything with it, and he said, he lived nearby and had a personal interest in seeing it transformed from the blighted eyesore it had become.
As Dranoff saw it, any redevelopment project faced two main hurdles: First, the zoning regulations for the building were too restrictive to attract any big development project. They needed to be changed.
Second, because of the building’s historical significance, any major changes to the structure had to be approved by the Philadelphia Historical Commission, which had so far proven unwilling to support any of the plans that Universal had put forth.
At the time, the nonprofit had come up with a proposal to tear down all but the decaying building’s facade and replace it with a mixed-use development with roughly 50 apartments and retail space along the rapidly rejuvenating South Street corridor.
» READ MORE: As it happened: Live updates from the day in court
Dranoff said he thought his experience in dealing with zoning issues and winning support for development projects from community groups could assist Universal in clearing away those obstacles.
But it was Universal, prosecutors say, that ultimately solved the zoning problem.
They’ve accused two of the nonprofit’s executives, former CEO Rahim Islam and ex-CFO Shahied Dawan, of funneling bribe money to Johnson through a $67,000 consulting contract for his wife, Dawn Chavous, to persuade him to introduce a bill before Council that would change the zoning to allow for the envisioned development.
» READ MORE: Kenyatta Johnson trial: Day-by-day updates on the federal bribery case
And as early as July 2013 — three months after Universal had signed its first contract with Chavous — Dranoff was receiving emails from Islam in which the executive expressed confidence they’d have Johnson’s support.
Islam assured Dranoff, in an email Assistant U.S. Attorney Eric L. Gibson showed to jurors, that Johnson would work with the company on the zoning and historical issues and they’d also have behind-the-scenes support from State Sen. Anthony Hardy Williams, whom both Johnson and Chavous had worked for earlier in their careers.
But Johnson’s lawyer, Patrick Egan, balked at the suggestion that Johnson’s support of the zoning bill had anything to do with his wife’s work for a separate wing of Universal focused on charter schools.
As a key landmark in Johnson’s district, the Royal was a property the councilmember and nearly everyone else in South Philadelphia wanted to see redeveloped, Egan stressed in cross-examination.
He countered Islam’s confident July 2013 email with another from October 2014 — sent just days before they hoped Johnson would introduce the zoning bill. In it, Dranoff expressed some measure of doubt that they could count on the councilmember’s support.
Shortly before, Johnson had scheduled a meeting with a community group known as “The Friends of Kater Street” that opposed Universal’s development plans.
“Until you pass home plate, it’s not done,” Dranoff said Friday. “We always hope that … the powers that be will move forward with the legislation. But I also had concerns that it would be an obstacle.”
He worried the Kater Street group might still sway the councilmember to oppose any zoning legislation — a concern Egan suggested Friday wouldn’t exist had Islam already sewn up Johnson’s backing with bribes.
But Dranoff was unequivocal on the witness stand Friday, insisting he had no idea about the contracting relationship Universal had with Chavous while trying to win her husband’s support.
And Gibson pushed back against Egan’s theory with another email Islam sent just days before Johnson eventually introduced the bill in October 2014. In it, Islam reassured Dranoff, stating the exact date that Johnson would put forth the zoning legislation and the date it would be passed by Council.
“Any equivocation there?” the prosecutor quipped.
Ultimately, the rezoning bill passed in December 2014. But the Dranoff-Universal plan for the property still fell apart after it ran into further title problems and the prospects for profit grew thin due to the loss of a multimillion-dollar state grant, prompting Dranoff to abandon the project.
Universal sold the Royal to another developer in 2016 for $3.7 million — roughly 12 times what it paid for the property when it had purchased it 16 years before.
Testimony in the trial is expected to resume Monday.
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