Philly’s community gardens say this city policy puts them at risk

Naomi Smith, 86, can’t wait to dig into the soil this spring at the Viola Street Garden in Parkside she helped start 50 years ago on a vacant lot full of debris.

“The strawberries and asparagus will be first up. They come back every year,” Smith said. “Then we plant tomatoes, corn, greens, broccoli, cucumbers, squash. All of that good stuff.”

The garden will grow enough of that good stuff to make a Wegman’s envious. But nonprofit gardens around Philly like Viola Street say a city policy puts them in jeopardy.

At issue is a policy by the Philadelphia Land Bank requiring community gardens to assume 30-year, city-written, self-amortizing mortgages in order to take possession of vacant land many have farmed for a generation or more. The city owns the land, so it writes a mortgage for the appraised value without expecting the groups to actually repay the money.

But the groups say the mortgages, sometimes written for millions of dollars based on appraised value, have a negative impact on their books, create another level of complexity, and saddle them with decades of bureaucracy before they can own land free of debt.

Many of the groups have built their gardens on once privately owned lots taken back at some point by the city due to tax delinquencies. In a process known as a disposition, the gardens can apply to take ownership of their lots for a nominal amount.

In the past, the city used restrictive deeds that prevented disposed lots from ever being developed. But in 2020, the Land Bank began requiring the deed restrictions and the mortgages, which the groups are just now encountering as they apply for dispositions, which can take a year or more to complete. The Viola Street garden applied for a disposition in 2020 and will have to undertake a mortgage.

Thirty groups involved with community gardens sent a letter last week to the Land Bank’s board of directors asking them to consider the “barriers created by these mortgages and notes,” saying they put nonprofits at risk of defaulting on finances. The Land Bank is operated by the Philadelphia Housing Development Corporation (PHDC). It said it would examine the issue at its April 11 meeting.

Some organizations are up against a March 31 deadline to undertake the mortgages.

Many community farms are in predominantly Black and brown communities that have come to depend on the farms for food on lots they’ve beautified.

Angel Rodriguez, executive director of the Land Bank, said during last week’s meeting that the mortgage policy was adopted to prevent people or groups from obtaining vacant lots and flipping them as they become increasingly valuable. Officials do not have a comprehensive list of all the gardens in the city.

The Land Trust said in an email to The Inquirer that the mortgages also ensure that gardens cannot be lost to foreclosure “due to mortgaging by the gardeners or to litigation regarding accidents at the garden.” Under the mortgages, the city gets priority over any other lien holder on a lot. And they give the city more legal protection for the lots because deed restrictions can get overlooked during title searches, but mortgages do not.

Many of the gardens are in neighborhoods undergoing development booms that are supercharging values of once nearly worthless lots. The city has proposed a $2.8 million mortgage for the Summer-Winter Community Garden at 33rd and Race Streets, near the Drexel campus, and one of the oldest community gardens in Philly. The garden, along with Viola, is part of a network of gardens under the nonprofit Neighborhood Gardens Trust.

The Neighborhood Gardens Trust says the policy makes accounting more difficult, increases paperwork, and forces groups to pay more lawyers and accountants to handle issues that arise from mortgages. Worse, they fear, the policy gives the city a chance to retake the lots at any time over the 30 years. The trust believes the mortgages are an unnecessary step, saying they believed deed restrictions achieved the same goal.

“It will make our finances and accounting much more complicated,” said Jennifer Greenberg, executive director of the Neighborhood Gardens Trust. “We will have upward of $5 [million] to $10 million in liabilities showing up on the books. And the forgiven part of the mortgage will get counted on our books as income.”

Greenberg said smaller gardens not aligned with a larger nonprofit like hers face “an onerous, complicated accounting situation.” The situation could become perilous to one of those groups if they need a loan because the mortgage shows up as debt on their books.

Most importantly, though, Greenberg says the policy and mortgages place restrictions on the mortgages such as saying gardens must remain in “good condition and repair,” and “free of debris for” 30 years.

“I really, truly don’t know what that means when applied to a garden,” Greenberg said. “Your average garden takes deliveries of soil and mulch, and they spread salt hay on the beds. They leave tall stalks for pollinating plants so birds have something to feed on in the winter. … We have experiences in the past where License and Inspection fined us for gardens an inspector perceived as overgrown or neglected.”

Further, she said Philadelphia has a trash problem, with debris blowing all winter long onto gardens. The gardens do their best to keep up with it, but, like the Viola Street Garden, are adjacent to illegal dumping sites.

The Wiota Street Garden in West Powelton is also part of the Neighborhood Gardens Trust network. John Lindsay, 74, who founded the garden, is concerned about the mortgage. The garden has until March 31 to comply. He said the neatly kept quarter-acre garden is a community asset.

“We run a farm market every Sunday,” Lindsay said. “Last year, we donated $4,000, and 1,200 pounds of produce to the food bank down the street.”

Mimi McKenzie, legal director at the Public Interest Law Center, said the mortgages can make it appear that finances of nonprofits are in poor shape because the debt from the mortgage goes on the books. It can far exceed the land’s real value as collateral. That can show up in audits and can impact the ability to get grants.

“It really puts the gardens in an impossible situation,” McKenzie said.

Ruth Birchett, founder of the Heritage Community Development Corp., is active with two North Philly gardens, Ridge and Heritage. She believes the mortgages are a way “for the city to leave their options open to repossess the land.“

“After all these generations we have been doing community gardens, why, all of a sudden, is there a new push for there to be a mortgage agreement on the use of the land?” she asked.

Martha Griffin, director of Mill Creek Urban Farm in West Philadelphia, thinks the Land Bank could have done a better job informing the gardens about the mortgages.

Eric Grimes, a board member of the Mill Creek farm, said he believes that “You can’t free yourself until you can feed yourself” and that Black people should know how to grow their own food. He’s a member of Academy of Life, a political community organization concerned with economics and survival.

At Mill Creek Farm, Academy of Life members grow fruits and vegetables for themselves and donate produce to the elderly. As of now, Mill Creek doesn’t charge neighbors for the plots they use.

”With a 30-year mortgage, in order to survive, the farm may have to start charging rent to use a plot in the garden,” Grimes said.