Philly and developer are on brink of a deal on future of UC Townhomes

The drama surrounding the future of the University City Townhomes in West Philadelphia could be drawing to a close, multiple sources familiar with the negotiations say.

The owner of the site, IBID Associates, is close to reaching a settlement with the City of Philadelphia that would secure a portion of the land for a new affordable housing development. A fund would also be established to provide resources to the 69 displaced households for their housing needs. Most of the tenants have already left the site, according to IBID.

The proposal has not been finalized and approved by U.S. District Court, which has jurisdiction because IBID sued the city and Councilmember Jamie Gauthier after she enacted a temporary demolition moratorium at 3900-60 Market St., along with changing the zoning of the parcel.

At the time, IBID described her Council legislation as an “illegal and unenforceable” effort to prevent it from “exercising its constitutional right” to sell the property.

The judge overseeing the case still needs to sign off on any settlement before it becomes final. Parties on both sides hope he will do so in the coming weeks.

The court has ordered that no one involved discuss the case until it is approved. IBID, Gauthier, and the City of Philadelphia declined to comment.

But sources familiar with the negotiations between Philadelphia and IBID say that the city would obtain a half-acre of the site at 40th and Market Streets for future development of affordable housing. The rest of the site would remain under IBID’s control for sale and future redevelopment.

IBID would provide $3.5 million for the displaced households, or $50,000 per family, with the fund administered by the city. Major University City institutions, including the University of Pennsylvania and Drexel University, will provide resources for a separate, services-based fund to support the tenants.

The controversy over the site began when the federal subsidies supporting the existing low-rise affordable housing complex at 40th and Market were set to expire, and IBID Associates decided not to renew the contract.

The vast majority of affordable housing in the United States is supported through federal programs that encourage public-private partnerships, with contracts often lasting decades. When the agreements expire and land in an area has appreciated in value in the interim, many for-profit owners decide to sell.

That’s precisely what happened in University City. IBID Associates is a partnership that includes Brett Altman as a principal, whose family acquired the property in 1982 for $1 to operate the townhomes. But 40 years later, the market in this corner of West Philadelphia had changed radically and they hoped to sell the land to a developer with plans for life sciences and housing.

That decision meant that all tenants would have to be relocated. They received housing vouchers that would allow them to settle affordably in other locations.

The tenants, allied with housing activists and student groups, quickly organized protests of the sale. They occupied the site even after subsidies expired, protested local powerbrokers, and drew substantial media attention to the case.

After initial negotiations between Gauthier and IBID broke down, the case wound up in court. The most recent settlement conference was held on Friday, according to the court docket.

The life sciences real estate market has cooled substantially since the debate over the future of University City Townhomes began in 2021, which may complicate the plan for a new complex built speculatively for the sector. But the site is on the edge of the University of Pennsylvania’s campus, with easy transit access to Center City, and will likely remain exceedingly marketable — if the zoning changes at the heart of the lawsuit are altered.

This story has been updated to clarify that IBID and the University City anchor institutions will be paying into separate funds to support the displaced tenants and to clarify Brett Altman’s role.