Pa., PIDC wants their $ back as Jeff Bartos' Mark Group assets sold

A British company whose Philadelphia headquarters was praised by state and local leaders as a symbol of the city's aspirations to be an energy business center is shutting down.

Pennsylvania has asked for the return of $150,000 in state grant money from Mark Group, the Navy Yard-based home insulation firm the state had wooed to the city four years ago, Pennsylvania Department of Community and Economic Development spokeswoman Lyndsay Kensenger told me. Home rehab supplies piled at Mark Group's U.S. headquarters will be the subject of a liquidation sale scheduled for Jan. 27, 11 a.m., at the company's offices, 4050 S. 26th St.

Mark, run by Jeff Bartos, an ex-Toll Bros. lawyer, was offered $3.28 million in Pennsylvania taxpayer aid by then-Gov. Rendell to open at the Navy Yard in late 2010. But the company either didn't apply for or wasn't approved for most of those grants, Kensenger told me. On Jan. 6, her agency "sent a letter requesting full reimbursement of the $150,000 Opportunity Grant due to company closure prior to the five year site commitment," she said. "It is our understanding that they do not intend to be in operation in the future." Bartos hasn't returned messages left at his Navy Yard office or Main Line home.

The Philadelphia Industrial Develoment Corp. (PIDC), a joint operation of the city and the Greater Philadelphia Chamber of Commerce, lent Mark $239,000 "to improve and build out their office space," PIDC chief John Grady told me. "I understand that the parent company in England has decided to close down all of their foreign operations, including the North American operations here in Philadelphia," he said.

Grady says Mark Group still owes $193,000 of the principal on that loan. He says Mark's U.K. parent company guaranteed the loan, and PIDC expects it "will be fully repaid." My messages to Mark's office in Leicester, England, weren't returned.

With worldwide fuel prices falling, consumers may be less interested in  home energy conservation. Governments, too: Mark Group's U.K. headquarters laid off 670 of its 2,500 workers in September, blaming a reduction in British home insulation subsidies. See story in the Leicester Mercury here.

A list of "thousands of items" on sale in the upcoming auction -- generators, tools, computers, Rheems heaters, Johns-Manville insulation -- is posted in this notice by AuctionAdvisors.com, which is managing the "Liquidation of the Mark Group" sale. The ad says the "Entire Contents of 7 Warehouses & Offices" are to be sold, and that "much of the inventory is new in the box." The sale was also advertised in Sunday's Inquirer. 

Starting in 2010 and as recently as last summer, when the auditing firm Ernst & Young named Bartos an "Entrepreneur of the Year," Bartos has said that Mark Group hoped to employ hundreds of salespeople and installers in the Philadelphia area. In November 2013, Mayor Nutter said Mark employed 155 and planned to hire at least 30 over the next year and a half; city officials called Mark a prime example of the energy-business enterprises they hoped to develop at the Navy Yard.

"It's unfortunate," said Mark Wasik, of Clinton, N.J., who said he worked at Mark from January 2011 until last August, when he joined another company. He said business had been slow and some former coworkers left the company later last year, collecting a week's severance pay. Wasik says he filed a complaint with the New Jersey Department of Labor for unpaid commissions Mark owes him, totalling $3,500.

Barry O'Sullivan of Philadelphia Gas Works said Mark Group had contracted to insulate customers' homes under two contracts. One ran from 2010 until last summer; the other began last fall but was ended in December. "There was no problem with any of the work they performed on our behalf," O'Sullivan told me. He wouldn't say why the recent contract ended so soon.  At Mark Group's landlord, Liberty Property Trust, spokeswoman Jeanne Leonard said the company had a policy of not commenting on tenants.