Germantown Settlement: $38 Million in Debt

October 24, 2010; Source: The Philadelphia Inquirer | Germantown Settlement is an historic 126-year-old service agency/community development corporation with big problems. According to this article in the Philadelphia Inquirer, the agency raised and spent somewhere in the neighborhood of $100 million on community development projects in the recent past even as it was showing all the signs of fiscal distress and mismanagement.

Recent public audits (the few that exist) show that liabilities exceeded assets by rapidly increasing amounts in the first half of the decade, but more recent information may be harder to come by. The Office of Housing and Community Development has repeatedly sanctioned the group for a lack of audits and as of a few days ago the group has not filed required audits for years 2006 through 2009 with the department of Human Services.

Germantown Settlement and its community development arm, Greater Germantown Housing Development Corporation, with a combined debt of $16 million, filed for bankruptcy in the spring, but creditors have deemed the organization’s plan for recovering from bankruptcy insufficient. Germantown proposed to further refinance properties and find private grants to stabilize the organization’s finances, but creditors—including major banks as well as the city’s Redevelopment Authority—found the plan without merit. Rather than offering to refinance, the Redevelopment Authority said it would immediately foreclose on the Germantown YWCA, Nova Bank said it would foreclose on the Germantown Community Center, and Parke Bank plans to sell Germantown Settlement’s most viable commercial property, a shopping center on which the bank holds a $7.2 million mortgage.

This doesn’t add up to a group of financial institutions eager to refinance Germantown Settlement’s properties. Add to that the millions of dollars owed in taxes to the city and the state, and it appears that Germantown Settlement may be down for the count. The losses of course do not only accrue to the organizations and its funders, but also to the community. From the article, “Once hailed as a model community-development corporation, Germantown Settlement now holds a portfolio of largely bankrupt or collapsing projects. The Germantown neighborhood is pockmarked with Settlement’s shortcomings, including a shuttered charter school, boarded-up housing, and empty or poorly used retail space.”

Germantown Settlement’s problems predate the nation’s economic recession. Even without a recession, it is difficult to imagine that this venerable community institution could have survived without shedding much of its troubled real estate portfolio. Given the organization’s dire straits that led to its bankruptcy filing in April, one has to ask, what might have the major players in Philadelphia’s community development sector done much earlier to intervene in this dynamic and try to help fix some of Germantown Settlement’s obviously deep-seated problems?—Ruth McCambridge

  • Margaret Motheral

    The major players of the politics and Philadelphia community sector are corrupt and had no intention of correcting their scams.
    I am a victim of their corruption. District Attorney’s staff member Veron Price and lawyer to Council Tasco and zoning head of East Mt Airy Neighbors pitched a project in adjacent E. Mt Airy on contaminated land in a small family neighborhood. My home was closet to the project and with no permits,proper environmental care and no notification to neighbors they use the same contractor who wrecked the Germantown Penn project and supposedly “ran off” with the money – and fill the neighborhod with dust and vapors. Even after I ended up in the ER ( more than once for breathing problems) and had notes from several doctors saying to removed me from house,
    these poltical and business leaders proceeded to attack me , calling me cray even while they secretly trucked away loads of contaminated dirt. This started in 2006. One cat has died of cancer, the other has respiratory distress and I’m still very ill and I’ve been displaced from my home, tossed from place to place trying to survive all this time. Big civil rights and zoning lawyers are involved and the city has shut me out from legal help. There is nothing they can do to intervene because they have no moral sense and don’t care what they do to people. Donna Reed Miller and State Senator LeAnna Washington have long known of these problems and refused to aid in this very serious and potentional deadly public health issues because all they care about is protecting the web of corruption woven into this city. I have the paper trail – so