PHA wants to save Brith Sholom House, the Philly senior complex linked to a national fraud scheme

The Philadelphia Housing Authority has offered to pay $24 million to purchase Brith Sholom House, a senior housing complex that fell into disrepair under the control of a real estate dynasty that profited by running the apartments into the ground.

The deal, between PHA and the mortgage holder, New World Commercial Credit, would conclude years of turmoil at the property, where the 90 or so remaining elderly and disabled residents have for months fought off the threat of sheriff’s sale and gas shutoffs. Because the building is under court-appointed receivership, it still requires a judge’s approval.

» READ MORE: Empire of Neglect: An N.J. family cashed in while Brith Sholom seniors suffered

Daniel Urevick-Ackelsberg, an attorney with the Public Interest Law Center of Philadelphia, which represents the tenants, said the possibility of a public bailout was a testament to tenants’ organizing.

“They put themselves at the mercy of [PHA chief executive] Kelvin Jeremiah and said, ‘We need you to step in. You are the only hope for us.’ And somewhat amazingly, that’s what has happened.”

The complex was owned for years by the Brooklyn- and Lakewood, N.J.-based Puretz family, which used fake charities and holding companies to score favorable financing and snap up some 100 low-income apartment complexes nationally during the 2010s. The family systematically stripped the equity from complexes like Brith Sholom, shorting maintenance costs and siphoning away utility payments — at tenants’ expense, a recent Inquirer investigation found.

In recent years, the Puretzes have faced a barrage of lawsuits, criminal prosecution, and financial instability, kicking off a chain reaction of foreclosures, including Brith Sholom’s.

» READ MORE: Scion of Puretz family admits role in mortgage fraud scheme

A trio of Puretzes are now facing related criminal charges, ranging from federal mortgage fraud to allegations that family members were skimming utility payments that amounted to millions of dollars.

That left their holdings in the Philadelphia region spiraling into disrepair. Hillside Manor, a Chester complex, was sold at a U.S. Marshals Service sale in May, while the Pavilion, an affordable complex in the city’s Wynnefield Heights neighborhood, was placed in receivership.

Brith Sholom, a 360-unit apartment building, also in Wynnefield Heights, has been under the care of a receiver since last fall, and the Puretzes have not taken part in litigation involving either the city, which revoked the rental license and filed suit over hundreds of code violations, or New World Commercial Credit, which sought to foreclose on its $36 million mortgage on the property.

» READ MORE: Thousands of poor and elderly residents were stranded in awful apartments. Here’s what our investigation found.

New World lawyer Daniel Pereira told Common Pleas Court Judge Anne Marie Coyle at a hearing Tuesday that if the deal did not go through by the end of the week, the bank would sell the property to a for-profit developer.

Coyle said Pereira would have to come back on Aug. 26 with proof that he had properly notified all creditors.

The owners owe more than $1.5 million to Peco, the Philadelphia Water Department, and Philadelphia Gas Works, which warned tenants that, as of Sept. 9, it would be legally barred from delaying a shutoff any longer. The utilities have all entered into deals to accept as little as half of what they are owed if the sale to PHA goes through, lawyers for the city, PGW, and the receiver told Coyle.

More than a dozen tenants packed the courtroom, many of them using walkers or canes.

“We’ve had at least five deaths in the last two months because of the stress level,” said Gail Peddle, sitting in her chair walker outside the courtroom. She and other tenants have held protests, attended court hearings, and packed PHA board meetings in search of city assistance.

Part of the stress, according to Peddle and several other tenants, is the sense that the building managers are retaliating against them for speaking out.

Kim Wiggins said three of her tires were slashed and her daughter was physically assaulted during an altercation with building management. Others pointed to the laundry machines that were left unplugged, the lobby seating area that was closed off, the benches that were yanked from the building’s parklike front lawn, and the elevators that seemed to stop working at inopportune times.

Many seniors have given up and moved out in recent months. Alan Jovinelly, of receiver Stockton Real Estate Advisors, said that as monthly rental income fell from $100,000 in January to $20,000 in July, he has been unable to keep up with basic maintenance and will soon be unable to pay for security.

Tenants, too, are impatient, and tired of living in limbo, said Marguerite Byrd, a resident and tenant council member.

“Hopefully if PHA is able to purchase the building, it would bring resolution for everybody that’s still living there,” Byrd said.