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Philly and nonprofit at odds over building, legal fees

| Feb 13, 2012 | Real Estate Disputes |

A real estate dispute between the local branch of a national youth group and the city of Philadelphia will continue now that the plan to sell a piece of government-held real estate to the group has fallen through.

The youth group rents its Philadelphia headquarters in the Logan Square area from the city. The city tried to evict the group over its refusal to admit homosexuals. The youth group then sued in federal court and won, meaning the city would have to pay the group’s legal fees.

Staring at a legal bill estimated at about $1 million from the group, city officials said Philadelphia would sell the 13,000-square-foot building to the group for $500,000 in lieu of the legal fees. The property has been appraised for about double that amount. While a real estate investor told the city he’d pay up to $2 million, the city said it could not negotiate with him while it was trying to reach a settlement with the group.

While city officials said it would be a realistic compromise, the deal ultimately fell apart after both sides determined the Philadelphia City Council would not go along with the settlement, according to a federal court filing.

The council must approve legislation to sell the facility. However, legislation introduced last year wasn’t passed after gay-rights groups told the council that they did not support the group occupying the building because it won’t admit gays as members.

City officials have not disclosed their next step. Gay-rights leaders want the city to appeal the federal ruling. In the meantime, representatives of the organization said they would like to find a way to proceed with the settlement and own its headquarters.

Source: The Philadelphia Inquirer, “Boy Scouts’ deal to buy city building tanks,” Miriam Hill, Jan. 31, 2012

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