Royally Huge Act 135 Case Launched Against Owner of Royal Theater

The Royal Theater

Editor’s Note: Don’t know what Act 135 is? Take a quick read here.

We’ve all seen the horrible state and beacon of blight that the Royal Theater is in. Neighborhood theater screens have long since been bested by suburban megaplexes boasting a zillion screens. There are a limited number of avenues to restore screenhouses and small performance houses into modern uses. In the Royal’s case, desegregation and the Civil Rights Act combined to obviate the need for a black-only theater. Management couldn’t adapt to the shift in values, and by 1970, it closed for good.

Some of Philly’s dead theaters have found brand new life, but with mixed results. The Uptown in North Philly is now making progress towards becoming a performance art venue. The Devon in Mayfair was injected with Perzel cash and found some temporary life, although the development non-profit burned through that cash and it’s now asleep again. With Perzel gone, so went the cash.

Fishtown’s long-dormant Jumbo Theatre was turned into a dollar store. Two Center City neighborhood theaters, the Boyd and the Royal, are still stuck marking time as blight objects with thriving urbanity and bustling activity surrounding them. The Boyd still sits across from Drinker’s Pub on Chestnut Street with faded posters of its “upcoming revival!” on the front.

CLOSED: A for sale sign goes up on the Royal’s marquee

Enter the Royal. As HiddenCity author Sarah Hunter put it:

The Royal Theater, called “American’s Finest Colored Photoplay House”, upon its 1920 opening, was the first black-run theater in the city. The theater became a beacon for the African-American entertainment sector on South Street. Patrons regularly filled the theater’s 1,200 seats to see acts like Fats Waller and Bessie Smith. Patrons also loved the films at the Royal, which included films shot at local Colored Pictures Film Corporation. The first staff of the theater went on to become the nucleus of the Negro Motion Pictures Operators Union. The community was closely tied to the theater. Neighborhood residents were the Royal’s most loyal patrons and participated in talent shows and radio broadcasts. Business owners received increased foot traffic after Royal shows. But by the 1960s, the threat of the construction of an expressway in the neighborhood (that never materialized) and Civil rights legislation, which allowed blacks to move freely and patronized other entertainment venues, decimated the Royal’s neighborhood and attendance. The Royal closed its doors in 1970. The Royal deteriorated quickly: trees sprouted from its masonry and moisture destroyed the interior. Urban decay took hold of the neighborhood by the 1980s, with drugs and empty lots becoming staples of the neighborhood. By the early 1990s, the Royal was up for demolition. But the demolition request spurred new interest in the Royal: but for years, an owner was hard to come by. Finally, by 2000, native Philadelphian Kenny Gamble purchased the theater; Gamble hopes to rehabilitate it. Meanwhile, the resurgent neighborhood has new small businesses and homeowners. Perhaps the Royal’s resurgence will follow.

Rumors of fixing up either the Boyd or the Royal have long led to fantasy threads on blogs and lamenting by nearby residents. I’ve long had my own wishlist for the Boyd or the Royal theater: a re-incarnation of Austin’s insanely-successful Alamo Drafthouse Cinema, where indie and feature films grace the silver screen while moviegoers kick back with BBQ turkey legs and bottle beer.

Note: In Texas, drinking alco-bevs in a movie theater, even if one can drink practically anywhere else in Texas… including church halls (think Quinceañera parties), is still obscure enough that it makes this picture house a novelty. Also it’s still not kosher to drink hard liquor on a Sunday there, but whatevs.

Enter Kenny Gamble

Kenny Gamble [Philly360]

Kenny Gamble’s Universal companies has sat on this theater ever since Universal Community Homes bought it for $250K from the Preservation Alliance in 2000. When UCH sat down with Alliance, they struck a deal: preserve the building, maintain the facade, and do not demolish the building. Over the years the covenant has been updated and its restrictions tightened to ensure its owner can do only one thing to the property: restore it.

In 2011 at a neighborhood meeting, Universal proposed to give the Royal a lobotomy by suggesting the back of the building could be sheared off. This would leave just the facade in place and the entire site would become new market rate homes, complete with a drive way or cul-de-sac type of set up. Few were amused at this idea, and Universal eventually withdrew the concept.

Now in its 13th year of Universal ownership, one impatient resident has finally had enough and has proceeded to file an Act 135 suit against Universal. Juan Levy, a neighbor who owns an apartment building next to the Royal Eyesore and has an assemblage of other parcels on the same block. In the Act 135 complaint, Levy states:

The Property has not been legally occupied for at least twelve (12) months before the date of the filing of this Petition. The Property is better known as the Royal Theater. The Royal Theater has not been occupied since 1970

The Property has not been actively marketed during the sixty (60) days before the date of the filing of this Petition.

No “For Sale” sign has been placed on or in front of the Property during the sixty (60) days before the date of the filing of this Petition.

The Property has not been advertised as for sale through distributed print advertisements, print or electronic media, or through engagement of a real estate professional.

According to inspection of public records, the Property appears not to be subject to an existing foreclosure action.

According to inspection of public records, the Owner has not acquired the Property within the preceding six (6) months prior to the date of the filing of this Petition. In fact, the Owner acquired the Property in 2000.

To the best of the petitioner’s knowledge, the property meets the conditions for conservatorship set forth in § 1105(d)(5) as follows:

  • The building is in need of substantial rehabilitation and no rehabilitation has taken place during the previous 12 months.
  • The building is unfit for human habitation, occupancy or use.
  • The condition and vacancy of the building materially increase the risk of fire to the building and to adjacent properties.
  • The building is subject to unauthorized entry leading to potential health and safety hazards and one of the following applies:
  • The owner has failed to take reasonable and necessary measures to secure the building.
  • The property is an attractive nuisance to children, including, but not limited to, the presence of abandoned wells, shafts, basements, excavations and unsafe structures.
  • The presence of vermin or the accumulation of debris, uncut vegetation or physical deterioration of the structure or grounds has created potential health and safety hazards and the owner has failed to take reasonable and necessary measures to remove the hazards.
  • The dilapidated appearance or other condition of the building negatively affects the economic well-being of residents and businesses in close proximity to the building, including decreases in property value and loss of business, and the owner has failed to take reasonable and necessary measures to remedy appearance or the condition.

Petitioner recommends that Ori C. Feibush be appointed Conservator for the Property. The proposed Conservator has the financial resources and experience to properly rehabilitate the Property, and a willingness to do so.

Holy shit. Here. We. Go.

Continuing on…

Petitioner’s Preliminary Plan is for a mixed-use development occupying 60% of the parcel with 1st and 2nd floors commercial and 3rd and 4th floors residential. Low density housing is proposed on the 40% of the lot facing Kater Street with underground parking provided through access on Kater Street. The proposed development costs are $7,134,000 with financing obtained through available lines of credit and cash through various partnerships. A final plan will be presented on this petition as set forth in 68 P.S. ¶ 1106(d).

When reached for comment, Ori stated that Mr. Levi’s request to name him the conservator was simply a suggestion to the court and that the court could appoint whomever they deemed appropriate. His focus here is to preserve one of the Graduate Hospital’s few remaining historic buildings and to save it from demolition by neglect. He stressed that a conservator through Act 135 cannot make profit and that any money generated through this development would go to Universal.

The Struggle to Not-Develop The Royal

We all probably should have read between the lines when NakedPhilly published the company’s bid for the property and practically begged others to offer even more money that it was not going to go away. They were ecstatic that this gateway to the neighborhood could finally be renovated and didn’t seem to care who got it done so long as it got fixed up fast.

Well, nine months have passed. Several buyers have supposedly come and gone, just no one at the crazy asking price of 4MM+ has been willing to stick around. Approximately three months ago the property fell out of contract and was deactivated from the multiple listing service.

Perhaps Universal didn’t like the idea that the most excited bidder for the property was OCF, who wants to fill up all the blank space surrounding the Royal with mixed-use residential and get the Royal fixed. A seven-million dollar investment with a $3.2 million cash offer is nothing to sneeze at.

What Does This All Mean?

Universal putting the building and lots up for sale with a broker with Trend photos is telling.

Kenny Gamble has been the steward this entire time and the building is now at risk of structural collapse. I’m sure L&I has been pleased at the countless complaints over the years about this property.

A whole lotta movin’ and-a shakin’ goin’ on. With the walls. Seriously, Kenny. Fix this shit.

Does Universal Have Cash Problems?

An analysis of lawsuit activity between Universal, the City, the Philadelphia Housing Authority and other entities indicate a new pattern emerging that might hint at Universal having money trouble.

Before the Great Recession, Universal has been fairly good about paying its taxes on most of everything it owns.

But in 2009 there have been problems with paying U&O taxes on time.

And again, just recently as March, the City Revenue Department had another lawsuit filed against Universal for back real estate taxes. This suit was dismissed because the City couldn’t find Kenny. Somehow, the process server couldn’t find one of the City’s more visible socialites. Amazing.

Universal could probably just claim that they’re forgetful here, but it certainly is troubling that a company that’s handled so much taxpayer cash and is run by a man that has has huge amounts of unquestioning respect in the circles of power of Philadelphia is having pissant tax problems like this.

What Now?

It’s bad enough that an important figure in African-American music, who owns a very important piece of black entertainment history and letting it rot for 13 years, isn’t doing the minimum to keep this VLCIP property up.

This has long been my thesis for why the Royal sits like it does: It’s Universal’s emergency bank account. Universal doesn’t have the wherewithal to pour a very large amount of money into a very small series of lots. Think about it: just stabilizing the Royal so it won’t collapse, never-mind fixing it up, will cost a lot of money.

It must hurt the ego a bit to see OCF Realty screaming up and down for a chance to grab the Royal and do something with it after all those promises long ago.

Universal also runs charter schools which were showered on it by the School District of Philadelphia. Nobody wants to see Universal Companies fail and burn to the ground (not even me, as much of a critic as I am), but the City has been so generous to this company for years and with the undeveloped property Universal has on its books that it needs to maintain until it does something with it, it’s bit off more than it can chew.

The Preservation Alliance made a huge mistake selling this parcel to Kenny. He’s not keeping up the building under the terms and conditions in the Deed Covenant (see bottom). There’s been no indication from the Preservation Alliance that they will take Universal to task for not maintaining the most important components of the building: the roof and the walls. Without either of those maintained, the Royal will collapse.

The Royal has been waiting for a savior for a long time. That savior obviously is not going to be Kenny Gamble.

There’s not much time left before saving the Royal will become impossible

Act 135 – Petition to Common Pleas Court requesting a Conservator appointed over the Royal [PDF]

http://www.philadelinquency.com/uploads/LevySuit.pdf

Preservation Alliance Covenant With Universal Community Homes 2000 Version [PDF]

http://www.philadelinquency.com/uploads/UCHCovenant2000.pdf

Commonwealth of Pennsylvania Preservation Covenant (2008) [PDF]

http://www.philadelinquency.com/uploads/2008Covenant.pdf

Commonwealth of Pennsylvania Preservation Covenant (2008) Second Recording [PDF]

http://www.philadelinquency.com/uploads/2008Covenant2.pdf

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