Site owner's lawyer tells Blatstein: Walk away

The owner of the sprawling South Philadelphia lot where Bart Blatstein has proposed an apartment and retail complex sought in court Tuesday to free itself of its contract with the developer so the property can be sold to another buyer.

Blatstein no longer has any legal claim to the South Broad Street site after missing a March 15 deadline to complete his purchase of the land, John A. Guernsey, a lawyer for New York-based owner Hudson Realty Capital L.L.C., said during a Common Pleas Court hearing in Philadelphia.

Hudson has already identified parties willing to pay more than the $18 million for which Blatstein had the roughly five-acre site under contract in their original October 2013 agreement, which was not contingent on zoning approvals, Guernsey said.

The real estate investment firm also is entitled to $800,000 in deposits that Blatstein had placed in escrow to secure the property, Guernsey said.

Broad & Washington L.P., the affiliate of Blatstein's Tower Investments Inc. that had been under contract with Hudson, is "obligated to walk away," Guernsey said. "They are done."

Blatstein's proposal for the northeast corner of Broad Street and Washington Avenue calls for a 32-story tower and an outdoor shopping mall atop a city-block-sized podium of larger-format retail and parking.

Earlier Tuesday, Philadelphia's five-member Zoning Board of Adjustment voted unanimously to grant the developer exceptions required to build the project as planned. The board voted despite a request Monday from a Hudson Realty representative to delay its ruling while the litigation was resolved.

City Councilman Kenyatta Johnson, whose district includes the development site, has proposed legislation to bar construction on the land for a year, citing community opposition. His bill has not progressed since its May 12 introduction.

During Tuesday's court hearing, Blatstein lawyer William A. Harvey accused Hudson and its lawyers of meddling behind the scenes by disputing Blatstein's interest in the property in letters to the zoning board and Johnson's office.

Harvey said that the purchase agreement between Blatstein and Hudson should be interpreted as continuing beyond the March 15 settlement date, and that his client had been in contact with the investment firm during the intervening months as he pursued zoning approvals for the site.

Hudson wanted those approvals in place when it backed out of its deal with Blatstein because they would "materially enhance the value of the property," Harvey said. "They wanted to inspire us to continue to spend hundreds of thousands of dollars to get those approvals."

Judge Patricia McInerney said at the hearing's close that she would take the testimony under advisement.

Blatstein said after its adjournment that he was grateful for the zoning board approval and undeterred by the legal wrangling.

"I'm optimistic that we'll be the developers of the property," he said.

jadelman@phillynews.com

215-854-2615 @jacobadelman