Prosecutors zoom in on Kenyatta Johnson’s Royal Theater zoning bill in federal bribery trial

Deena Kobell stood in front of her home across the street from the dilapidated Royal Theater on South Street in October 2014 and told City Councilmember Kenyatta Johnson she had concerns about a plan to turn it into a towering apartment building.

She worried that the height of the 50-foot-tall, 45-apartment structure — proposed by the theater’s owner, the nonprofit Universal Companies, and prominent developer Carl Dranoff — would overshadow the smaller homes on her block. She feared its 22-car parking garage, its commercial dumpster, and balconies that might lend themselves to loud, drunken parties would turn her once-quiet block of Kater Street into a chaotic scene.

Johnson, Kobell told a federal jury Thursday, assured her he understood her concerns. But the next day, he introduced zoning legislation that cleared a path for the project to move forward.

“We wanted it developed,” she said. “We just didn’t think it was fair that a developer could get whatever zoning he wanted.”

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Kobell, a labor attorney who has lived on the 1500 block of Kater Street since 2010, testified on the ninth day of Johnson’s federal bribery trial as prosecutors sought to show that Johnson backed Universal’s development plan over the objection of some constituents.

They’ve accused two Universal Companies executives of buying the councilmember’s support with $67,000 in bribes and said Universal needed him to push a zoning bill necessary for the project to move forward because it knew that going the more traditional route — applying for a variance through the city’s Zoning Board of Adjustment — could tie the project up in red tape for years.

Johnson and the two executives — Universal’s former CEO Rahim Islam and former CFO Shahied Dawan — have denied the charges.

But as Kobell testified Thursday, she said something about the way the process played out didn’t seem fair.

It wasn’t that she didn’t want to see the Royal Theater developed, she said. Once revered as South Street’s gleaming movie palace and cultural hub for Black Philadelphia, the building had stood as a dilapidated husk for decades with bricks falling from the walls, plants growing through the masonry, and people dumping garbage and using drugs in the run-down lot.

“It was a blight,” she said. “It was unsafe. It was unsightly.”

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She and her neighbors had signed petitions, written letters to Council and the mayor, attended meetings and even formed an LLC and obtained legal representation, hoping to have a voice in the redevelopment.

Kobell said Johnson did tell her he was backing the Universal-Dranoff plan. But she said his decision to push the rezoning legislation through Council — instead of requiring the project to go before the zoning board effectively cut her and her neighbors out of the process.

Zoning changes by ordinance — also known as “spot zoning” — limit options for appeal. And with the custom of councilmanic prerogative — a long-standing tradition in which councilmembers have final say on land use in their districts — Kobell feared she “didn’t stand a fair shake of being heard.”

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“To be honest with you, it became clear to us that we were going up against a powerful real estate developer … and a powerful city councilperson,” she testified. “We were afraid of being sued.”

Throughout the trial, the defense has pushed back on any suggestion that the Royal redevelopment plan was unpopular in Johnson’s district and noted that several of the most prominent business associations in South Philadelphia also supported Universal and Dranoff’s plans.

They’ve described Kobell and her Kater Street neighbors as a small, but vocal group, and are sure to pick up that thread when they get a chance to cross-examine her on Friday.

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Earlier in the day, the lead investigator in the case — FBI Special Agent Richard Haag — completed a more-than-24-hour, five-day stint on the witness stand with a final round of questions from both the government and the defense.

Dawan’s lawyer, Thomas O. Fitzpatrick, sought to call the entire investigation into doubt, wondering aloud why another prominent South Philadelphia real estate developer who had clashed with Johnson and his codefendants over the Royal Theater had played so large a part in the probe.

Agents interviewed Ori Feibush, founder of the real estate brokerage and development firm OCF Realty, six times — more than any other witness they spoke to, Haag acknowledged. Prosecutors have indicated they could call him as a witness later in their case.

He ran to unseat Johnson in a bitter 2015 campaign and later sued the councilmember over another real estate dispute in Point Breeze.

Shortly before Universal and Dranoff put forth their plan to redevelop the theater in 2013, Feibush backed a legal push to strip the nonprofit of ownership and put the property into conservatorship.

That suit was eventually settled and Universal got its rezoning bill from Johnson, though the Dranoff-backed redevelopment plan that Kobell and her Kater Street neighbors had opposed in 2014 was later abandoned. The nonprofit sold the building to another developer in 2016 for $3.7 million — a deal in which Feibush served as the broker, taking a $111,000 cut, according to sales records Fitzpatrick showed in court.

“Let me get this straight,” the attorney said. “Despite being a political rival of the councilman, despite being a rival developer that tried to take the Royal Theater by force, Mr. Feibush managed to get himself $111,000 out of the sale of the Royal Theater? … Did you investigate Ori Feibush for extortion?”

» READ MORE: As it happened: Questions about South Philly developer, judge complains about the pace in Kenyatta Johnson trial

As the questioning of the agent dragged on, U.S. District Judge Gerald A. McHugh paused during a break to tell lawyers on both sides he was concerned after five days of testimony from Haag that the trial was moving “at a glacial pace.” He urged both sides to move things along.

“I think we’re trying the patience of the jury,” he said.

Keep up with every development in Kenyatta Johnson’s trial with our day-by-day recaps, live daily coverage, and explainer on everything you need to know about the case.