Sale of West Market Street properties opens development opportunities

Philadelphia property owner Richard Basciano has now sold off his entire real estate portfolio in Center City, opening a frontier for development along what had long been a blighted stretch of sex shops, empty buildings, and vacant land.

Basciano's STB Investments Corp. has sold nearly an acre along the western portion of Market Street - including the site of Center City's last porn theater - since June to Brandywine Realty Trust, Parkway Corp., and PMC Property Group or their affiliates, according to city records and company officials.

The transactions account for all the land held by STB as of May, according to a database of city property records compiled by Philly.com. Included are a large portion of the 2100 block of Market Street, two strips of vacant land on Market's 2200 block, and a building on the 2300 block.

Basciano - once dubbed "the undisputed king of Times Square porn" by the New York Times - had long been the dominant landlord along the seedy strip of Market Street that included the Forum Theater XXX-movie house and Les Gals sex shop.

As recently as late 2012, Basciano said he was looking for a developer - and seeking city assistance - to build up the properties.

He stopped pushing those development plans after June 2013, when a building on one of his Market Street properties collapsed onto an adjacent Salvation Army thrift shop, killing six people and injuring 13.

With the properties in the hands of established local developers, the stage may be set for a rebirth of the vital commercial corridor, said Paul Levy, president and CEO of the Center City District.

"People have been trying to acquire those parcels for 15 or 16 years," said Levy. "The notion that the whole area could become a mixed-use live-work area and really connect together Center City and University City is the huge opportunity here."

Lawyer Robert Mongeluzzi, who represents plaintiffs in the 2013 building collapse, said in a statement that his team was "made aware of these sales before they occurred pursuant to an agreement . . . regarding the disposition of those properties."

Basciano's lawyer, Richard Sprague, said through an assistant that his client sold the properties because the market was favorable to do so.

Property prices in Philadelphia are, in many cases, hitting record highs, said Michael Barmash, a senior vice president at Colliers International, a commercial real estate services firm.

"New watermarks are being established," Barmash said. "It seems that every vacant piece of ground is being purchased or rehabbed."

Parkway Corp., which operates parking lots throughout the city on land it often has earmarked for development, paid Basciano $2 million in June for 5,250 square feet of vacant land on the 2200 block of Market Street, according to records filed with the city. Basciano had bought that land for $1.03 million in 1994.

In another of the Market Street deals, PMC Property Group and investment firm Lubert-Adler paid $3.25 million for a three-story building that Basciano bought for just over $1 million in 1994.

The price in Basciano's biggest recent deal, the sale to Brandywine Realty Trust of about 37,000 square feet - including the site of the 2013 building collapse - has not yet been recorded with the city. The developer paid Basciano $17 million in April for a parking structure at Market Street East that he had purchased for $6.6 million in 1997.

Aside from cashing in on a hot market, the 89-year-old Basciano may be thinking about damages he may yet have to pay plaintiffs in the 2013 collapse, though he also could be planning for the disposition of his estate, Barmash said.

"The market and the price he can get and his age are the main things, I would guess," Barmash said. "You certainly want to liquidate what you have when you're that age."

jadelman@phillynews.com

215-854-2615@jacobadelman