August 19–26, 1999

city beat

A Lot of Confusion

Spring Garden CDC has received more than $1 million in state money. Just don’t ask them to talk about it.

by Noel Weyrich

A controversial state grant program has funneled more than $1 million over the past two years into an obscure nonprofit neighborhood development organization in Spring Garden founded by an attorney who works in the offices of State Sen. Vincent Fumo.

Since January 1998, the state’s Community Revitalization Program has given Spring Garden CDC (Community Development Corporation) $500,000 to develop low-income housing and another $750,000 for a vague assortment of projects in the Art Museum-area neighborhood.

The CDC, which has no listed phone number and no offices, gives its mailing address on the grant application as 1933 Brandywine St., the home of Patricia Freeland. An attorney, Freeland is employed by the Senate Appropriations Committee, of which State Sen. Vincent Fumo is minority chairman, and works out of Fumo’s South Philadelphia district office. Fumo and Freeland live in Spring Garden, and Freeland has contributed to Fumo’s campaigns.

With two grants totaling $1.25 million over the last two fiscal years, Spring Garden CDC has raked in more Community Revitalization Program dollars than almost any other public or private organization in the entire state, with the sole exception of a township government in Allegheny County.

Large public agencies like Philadelphia’s Welcome America! and the Allegheny Redevelopment Authority have each received grants in excess of $750,000 in recent years, but the most recent Spring Garden CDC grant is the largest CRP grant awarded to a private charitable organization in at least the last three years. The vast majority of Philadelphia’s dozens of other community development corporations, many of which have long and distinguished track records of community service, have never seen a dime of CRP money. Yet the Spring Garden CDC’s $1.25 million take was more than 5 percent of all the CRP money granted in Philadelphia during the last two fiscal years.

"That’s a lot of money," says Greg Vitali, a Delaware County state representative who has been a frequent critic of the CRP program. "It’s a situation that requires an investigation. My gut reaction is that we need to know more about the [Spring Garden CDC], who’s behind it and what its purposes are."

Vitali has long complained that the CRP program is unaccountable, and leads to abuse. Replacing the infamous legislative "walking-around money" or WAMs, CRP grants have been attacked by such diverse bodies as the state Auditor General’s office and the nonpartisan government watchdog Common Cause of Pennsylvania.

Vitali alleges that "awards from this program are based on politics, and this is a situation that requires close scrutiny."

Freeland, who was the founding president of Spring Garden CDC in 1994 and remains a board member, refuses to comment on the organization’s funding. The CDC’s executive director, Manuel Delgado, did not return calls. One phone number listed for Delgado is a cell phone number that is frequently switched off. Fumo spokesman Gary Tuma declined to comment about the senator’s relationship to the CDC, although he confirmed that Freeland works for Fumo’s state Senate Minority Appropriations Committee.

The secretive ways of Freeland and the Spring Garden CDC have now inspired an outcry from residents of nearby Fairmount, where the CDC has taken control of a 2.33 acre lot next to Eastern State Penitentiary and filed plans with the Zoning Board of Adjustment to convert the lot into a commercially operated parking facility. Neighborhood activists complain that Freeland and Delgado have requested neighborhood support for their project while refusing to divulge any financial details. Delgado, says one neighborhood activist, has even refused to provide a copy of the CDC’s charitable tax exemption filing. IRS regulations require tax-exempt nonprofits to make their filings available upon request, during normal business hours at their places of business.

"He just said, ‘Look, if you want that information, it’s available through public record,’" says Elizabeth Harpham, a real estate agent and Fairmount homeowner for the past 20 years. "He said, ‘I’m sick of answering questions about this parking lot.’ He was very hostile." She says she has now filed a formal request to the IRS to obtain the documents Delgado has refused to show her.

	Spring Garden CDC has raked in more Community Revitalization Program dollars than almost any other public or private organization in the entire state.

Such secretive behavior is unusual for CDCs, which normally depend on the goodwill of the neighborhoods they serve in order to survive. "I don’t know the specifics of this situation," says Rick Sauer, of the Philadelphia Association of CDCs, "but this does seem unusual. CDCs generally try to be much more open."

Harpham and several other Fairmount residents led an ad hoc community meeting last Tuesday where 170 people spent nearly two hours in a sweltering church basement airing their grievances against the CDC’s parking plan. Mark Pfeiffer, an attorney and one of the group’s leaders, drew the biggest applause of the night by declaring: "If this lot is being built with state money, there is no way the people of Philadelphia should have to pay to park there." Pfeiffer cites examples of community parking lots in Roxborough and South Philadelphia as examples of how free residential parking can be maintained if government picks up the initial construction costs.

The Spring Garden CDC purchased the empty lot from the School District for $250,000 in January of this year, and Pfeiffer says he and others are troubled that no one knows where the CDC got the money for the purchase. Even the two restaurateurs who have worked closely on the project differ on the rumored funding source. Jan Zarkin, owner of Rembrandt’s, says he understands the source of the cash is grant money, while Terry McNally, London Grill’s owner, says she was told it was a loan.

When the Spring Garden CDC obtained its first CRP grant in January 1998, it was a $500,000 grant for a unique new program to privatize the management of Philadelphia Housing Authority properties and other low-income housing in the neighborhood.

"This grant was one of the first pieces of funding we need to secure control of sites in the neighborhood," says Beverly Bates, a vice president of Community Builders, the national nonprofit that Spring Garden CDC chose as a partner in the housing project. She denies any of the money went to the purchase of the empty lot near the prison in Fairmount.

The second Spring Garden CDC grant application, however, was far more vague in its stated aspirations, even though it resulted in a larger grant, for $750,000, this past May — five months after the lot was purchased.

The funding request reads in part that "the project will include the purchase of derelict buildings and vacant lots, and the creation therein of new housing (and parking), new gardens, playgrounds, and community meeting and recreational sites.… In addition, a portion of the funds will be used for certain operating costs for the CDC."

According to a spokesperson for the state Department of Community and Economic Development, which oversees CRP funds, auditing of funds given to CRP recipients is left up to the accounting firm of the recipient’s choosing. "Probably the best description of what they are supposed to be doing with the grant money would be in the application," he said.

To the ad hoc group in Fairmount that’s fighting the CDC’s parking lot plan, that suggests that much of that state money could go to the commercial parking lot’s estimated $1 million construction costs — with the CDC then benefiting from the estimated $40 per month parking rates.

"[The CDC officers don’t] say anything about what they’re doing and you have to live with whatever they damn well want to do," says Elizabeth Harpham. If the organization would simply show the numbers on the parking lot, she maintains, "we could apportion the proceeds in a way that makes everyone comfortable."

Web Exclusive: The Spring Garden CDC's $750,000 state grant

Links
For more information about the Fairmount parking lot

For more information about Community Revitalization Program grants

To apply for a Community Revitalization Program grant

State Senator Vincent J. Fumo's website