Name: Philly’s ‘best property buyer’ makes astounding flips but leaves a trail of angry associates
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Philly’s ‘best property buyer’ makes astounding flips but leaves a trail of angry associates

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Developer Chris Rahn has put together many lucrative deals in changing Philadelphia neighborhoods. He also has his critics.Philadelphia property mogul Chris Rahn doesn’t have a corporate office, a business phone number, or a company website.What he does have is a long and low-key record of deals throughout the city that’s earned him a quiet reputation as a wizard of real estate — and, more recently, a growing stack of lawsuits with his name on them.In one deal-making tour de force, Rahn pocketed $6.5 million in under a year by clearing a from a West Philadelphia property, then reselling the land for an apartment project.In another, records suggest that he networked with a former judge and a to dislodge a cache of empty lots from a North Philadelphia nonprofit. Some are now being used for lucrative student housing.“He’s flat-out the best property buyer I’ve ever seen in my career,” said investor and construction lender Earl Sheeley.Working in the background, Rahn has played an outsize role in transforming long-disadvantaged neighborhoods into living quarters for a new, more affluent wave of residents.Rahn said his business is built on risky bets. He closes on property fast, before he knows for sure what he’ll be permitted to build or how much he’ll be able to sell it for, he said.“The big developers don’t do that,” he said in an interview.But interviews, legal filings, and a complaint to city prosecutors suggest Rahn might not be the only one who loses when those bets go south.Rahn and his business-partner-wife Christine Pasieka and their companies are defendants in at least seven ongoing lawsuits, most by lenders and investors, in Pennsylvania, New Jersey, and New York.» READ MORE: Rahn and Pasieka are alleged in one to have defrauded their partners on a proposed Hilton hotel near the Pennsylvania Convention Center out of $1 million. In another, a Rahn company is accused of borrowing more than $1 million from an 88-year-old New Jersey woman and never paying her back.“I think what he tries to do is take advantage of people,” said Lisa Solanke, unhappy about her own real estate dealings with Rahn.Public records show Rahn and Pasieka as having acquired some 80 properties, mostly in North and West Philadelphia, since 2005 for at least $57.2 million. Rahn said his actual number of deals is higher, since some are done using trusts rather than their names.He’s kept some and built apartments on others. His current projects include a proposed 320-unit apartment complex at what’s now a parking lot at 11th Street and Cecil B. Moore Avenue, he said. He also recently bought an office building in Wynnefield Heights where he is bringing in a charter school as a tenant, and he has assembled a portfolio of 200 rental apartments across Northeast Philadelphia’s Fox Chase neighborhood, he said.But many of his acquisitions have been flipped to other developers, chief among them BG Capital, a real estate venture co-owned by luxury watch magnate Daniel Govberg.BG started buying from Rahn early last decade, soon after Govberg and partner Joseph Byrne began building student apartments in the booming neighborhoods around Temple University, Byrne said. A Govberg Jewelers spokesperson did not return a phone call.Most if not all of the Temple-area apartments that flew the banner of Govberg Realty, a unit of BG, were built by Rahn or on land acquired from him, Rahn said.One such parcel was a storefront church on the 1600 block of Sydenham Street near Temple that Rahn purchased, tore down, and replaced with a four-story apartment building that he sold to BG. BG later resold the apartments to the New York real estate fund led by Richard Leibovitch, vice chair of the Philadelphia Union soccer team.Those sales came as a shock to investor Ketan Patel, who had a contract with Rahn to buy that building himself. He had given Rahn a $200,000 down payment toward the deal, Patel wrote in a January 2020 email to the Philadelphia District Attorney’s Office, which was obtained by The Inquirer.In the email, Patel alleged that Rahn kept backtracking on promises to compensate him for his failure to complete the project on schedule. At one point, Patel said, Rahn offered to instead pay Patel $1.2 million from a sale to a different buyer from BG.In the end, all Patel received back was his $200,000 — after four years, with no interest, Patel said in the message.A lawyer with the District Attorney’s Office responded to Patel in a later email that he might have grounds for a civil complaint, but that he had not provided evidence of criminal conduct and that the department was too understaffed to begin an investigation. The agency does “not get involved in deals that go sour,” the lawyer wrote.Patel declined to discuss his interactions with Rahn.Rahn denied doing anything wrong. He said the deal fell apart because Patel had not finished paying for the project.He characterized the allegations made by Patel and others as everyday disputes common in the development business.“Stuff happens,” he said. “It is what it is.”Byrne and Leibovitch both said they knew nothing about Rahn’s interactions with prior investors at the property.» READ MORE: Those who have met Rahn, 42, describe him as down-to-earth, friendly, and confident, a guy who shows up for business meetings in a T-shirt and basketball shorts. During a recent interview, he wore jeans, an athletic shirt, Nike sneakers with worn-through soles, and blue socks printed with duck decoys.He has “an agreeable, blue-collar sensibility to him,” said Paul Steinke, of the Preservation Alliance for Greater Philadelphia, who met with Rahn in a failed attempt to save the West Philadelphia church from demolition.Contractor and building-designer Vaughan Buckley, whom Rahn has hired to draw up site plans, called Rahn “quite unconventional, but a nice guy.”Rahn grew up in Northeast Philadelphia and joined the city’s carpenters’ union local soon after graduating from high school.After he left the union in the mid-2000s, he to pay about $41,600 that he’d owed to the organization in back dues and late fees, court records show. Then he to keep the union from collecting most of that, he said.“I did it out of principle,” Rahn said. “I was young and angry.”Around that time, Rahn and Pasieka, also 42, began buying and reselling rowhouses in South Philadelphia’s Bella Vista and Graduate Hospital neighborhoods. The two sections have undergone explosive gentrification in recent years.Rahn and Pasieka, who has had a career working at high-end executive-search firms in New York, continue to run their real estate operation as a family business, he said.One of the varied addresses they’ve used on property records is a high-rise condo unit in Manhattan’s Upper East Side. Another is an aged garage near Francisville.Rahn and Pasieka’s first deal with Govberg’s real estate operation was in 2012, when they bought a pair of lots on Willington Street near Temple for $140,000 and resold them to an affiliate of what would become BG Capital less than a month later at a $60,000 markup.The couple bought the lots with a mortgage from a Philadelphia lending entity led by financier Matthew Crane. In later years, Rahn continued to do business with Crane even though other lenders charged lower interest, Rahn said.“Chris wanted — I guess you would call it, basically — ‘service,’ ” said Sheeley, who was a vice president in Crane’s lending business, known as Havestock Inc. in its most recent incarnation. “He wanted to know immediately if his loans got approved.”Crane did not respond to phone messages.Rahn said he didn’t mind the higher interest loans from Crane’s businesses because they allowed him to operate without equity investors or partners, with whom he’d have to share decisions and profits.Havestock generally lent money that groups of small investors put up to fund individual mortgages. But it also served as the broker on $1.76 million that Rahn borrowed in 2014 from the hedge fund Atalaya Capital Management, the first in a series of big New York financial institutions that increasingly funded his deals as they grew in ambition.Rahn used the loan from Atalaya to buy a package of four properties around 16th Street and Ridge Avenue that was once part of a performance space known as the Arts Garage from the venue’s founder, Ola Solanke, and his then-wife, Lisa. He later resold the properties to BG and others for about two times that amount.Lisa Solanke remembered the sale to Rahn as an odd one.In the lead-up to their closing, she said, Rahn’s check for his deposit bounced. Then, when closing day finally arrived, Solanke was surprised to see that the sale price printed on the transaction documents was upward of $100,000 more than had been negotiated, she said in an interview.A broker for Rahn who attended the closing told her Rahn needed that extra sum on the documents to meet his lender’s criteria for the size loan he wanted, Solanke said.After Solanke balked, not wanting to be a party to what she viewed as a misrepresentation, Rahn agreed to actually pay the additional sum, but requested a few weeks to pull the cash together, she said.Solanke agreed to that and signed the documents, she said.But Rahn never made good on his promise to pay the extra money, which left her paying more taxes on the proceeds from the sale than her actual profit called for, Solanke said.Sheeley acknowledged that Havestock had brokered the loan, but said he knew nothing about Solanke’s allegation.Rahn disputed her account, saying that there had been no discrepancy between the sale price on the closing documents and the amount he paid. He had no recollection of any bounced checks.At the time, he was closing in on his biggest score yet: a package of nearly a dozen properties that had been sitting untouched for decades under nonprofit ownership near Temple.» READ MORE: Henry DeBernardo grabbed headlines in the early 1980s as the leader of a group that moved Black squatters into abandoned homes owned by the city and the federal government.He cast officials’ failure to renovate those houses for needy Philadelphians as part of a nationwide conspiracy to drive Black people from inner cities so they could be displaced by whites.Decades later, records indicate he had a role in selling Rahn property earmarked for poor neighborhood residents, like the ones he once mobilized, so it could be developed for Temple students.Those records report that DeBernardo was slated to earn tens of thousands of dollars in the deal, alongside former Philadelphia judge Jimmie Moore. In 2017, Moore pleaded guilty to concealing against Rep. Bob Brady for a U.S. House seat.Moore declined to speak with a reporter and DeBernardo did not respond to phone messages.The Temple-area land they are said to have helped sell had been owned by Advocate Community Development Corp., a , wife of venerated community activist the Rev. Paul Washington. The nonprofit’s goal was to create affordable housing.Over the years, scores of abandoned properties were transferred with the city’s help to the nonprofit, which was affiliated with Washington’s Church of the Advocate. The nonprofit used the land to build 200 units of housing for low-income Philadelphians, many near the church.Years later, the Rev. Renee McKenzie, the church’s vicar since 2011, was struggling to maintain the congregation’s 19th-century Gothic Revival building, while aiming to expand its afterschool program for neighborhood youngsters.After also becoming president of the housing nonprofit, she considered funding those initiatives by selling the remaining 11 lots on ACDC’s books, which were incurring city fees and maintenance costs.Word spread that the properties, all on the blocks surrounding the church, were on the market. While DeBernardo and Moore’s role in their sale remains murky, McKenzie said she was soon approached by the two men, who offered to broker the properties’ sale — for a fee.After McKenzie rejected their offer, she was contacted by an interested buyer from outside the neighborhood, whom she’d never met: Rahn. She later learned that DeBernardo and Moore had pointed him in her direction.Indeed, the two earned a 6% “finder’s fee” in the eventual sale, according to minutes from the 2014 ACDC board meeting at which the deal was approved.That would have worked out to $57,600, based on the $960,000 sale price cited in those minutes, which were shared with The Inquirer.Rahn remembered the deal differently: Before McKenzie had gotten involved in the properties sale, he had had an agreement with another member of the nonprofit’s board to buy them, but that deal fell apart, he said.When the effort to sell the properties was renewed, Rahn was invited to bid again and was ultimately selected.He did not interact with DeBernardo and Moore on the deal, though he had worked with them at another, unrelated property, he said. He said he did not recall paying them in connection with the nonprofit’s properties.For Rahn and Pasieka, the ACDC deal was a coup. They resold seven of those 11 parcels to developers for a total of $1.5 million within about a month of buying them.Last autumn, after a developer had already built duplexes marketed to Temple students on four of those lots, the Philadelphia Redevelopment Authority voted to release that land from a restriction it had imposed on the properties’ use decades earlier when the land was given to the nonprofit.Such “covenants,” as the restrictions are known, are routinely imposed on land that the city gives away or sells cheaply to developers of affordable housing. It gives agencies the right to seize back property if developers don’t live up to their agreements, such as by building projects unaffordable to low-income residents.In agency documents, PRA staff justified lifting the covenants by saying what it had required of the nonprofit when it was given the land.Rahn’s most recent deals have been among his most lucrative.In 2018, he bought the 19th-century Christ Memorial Reformed Episcopal Church at 43rd and Chestnut Streets for $10.5 million from the developer Guy Laren, whom preservation groups had been .Rahn told Steinke, the Preservation Alliance director, he was mulling plans that would keep intact the building of peaked gables and swirling turrets. In the end, he demolished the then 131-year-old complex and sold the site for $17 million. The buyer, Alterra Property Group, is putting up a 278-unit apartment building there.Rahn said the church’s wretched condition had made preservation unfeasible.A focus of Rahn’s has been the outdated hospital buildings that cash-starved health systems have been putting up for sale, such as the assemblage of buildings and parking lots in Port Richmond that had once been the old Northeastern Hospital, which he bought in late 2016 and resold in under a year.He had less luck with the three-acre site that had been part of the recently decommissioned St. Joseph’s Hospital at 16th and Girard Streets, which he acquired in 2015 for $3.5 million.Rahn built a complex of three adjoining apartment buildings, each with 40 units, at the property.But he has not been able to get Philadelphia Water Department clearance to connect two of those buildings to the city’s water grid because the project had been built without rain-permeable paving stones required to help prevent flooding during storms.He told inspectors in early 2019 that the correct material would be installed within six weeks but still has not, a Water Department spokesperson said.Rahn said that officials had approved his original plans without flood-prevention measures, so it was unfair to require him to implement them now.In the meantime, the revenue-starved project’s main mortgage has been refinanced at least four times in what appears to be an effort to stave off foreclosure. Those efforts now may be coming up short.In September, Rahn’s most recent lender at the property, New York financier Richard Kalikow’s Gamma Real Estate, , alleging that they had defaulted on their mortgage and owed $24 million in payments and interest, court records show.Rahn said he’s closing in on a deal to sell the project so he can repay Gamma. He’s also negotiating with another lender to refinance Gamma out of the deal, in case the sale doesn’t go through, he said.Kalikow, who did not respond to a request for comment, isn’t the only lender to take Rahn to court. Rahn is fighting back against a series of ongoing lawsuits.A Cincinnati-based company called Fund That Flip , accusing them of defaulting on a loan backed by a four-story house near 16th and Oxford Streets that deteriorated under their ownership and is now marked for demolition.Fund That Flip is seeking to foreclose on the property to recoup $1.3 million it claims to be owed, court records show.Rahn and Pasieka in a legal filing. Rahn said he also plans to soon refinance this debt with another lender. by an 88-year-old Mercer County, N.J., woman named Ann Cheng. She lent one of Rahn’s companies $1.1 million in early 2018 in a deal that was supposed to earn her $100,100 in interest when it came due for repayment six months later.Cheng alleges in her suit that Rahn never paid her back and now owes her that interest and principal, plus late fees and other charges.Rahn in court. He said Cheng will be repaid once the debt is refinanced.In , a real estate group called Plutushen Properties said it had paid Rahn, Pasieka, and their companies some $3.1 million since 2016 to buy three Temple-area properties and to develop them into apartments.Rahn did not complete those projects, the suit alleges.Rahn placed on Plutushen, saying in court filings that the company had been slow to obtain permits and had made cumbersome requests for changes to the project from its original design.accuses Rahn and Pasieka of defrauding an investor group out of $1 million that they’d been given to apply toward the purchase of a parking lot on 13th Street, near Vine. Rahn had planned to partner with the investor group on a 115-room hotel there under Hilton’s Tru brand, he said.Rahn and Pasieka are alleged in the complaint to have never purchased the lot as agreed and to have disobeyed a judge’s order to return the money.Rahn said the hotel deal had fallen apart shortly before the coronavirus hit, which kept him from being able to pull together the financing he needed to buy out the investor group. He made a payment to the group this month that should end the dispute, he said.“It was what it was,” Rahn said. “A business deal.”

Developer Chris Rahn has put together many lucrative deals in changing Philadelphia neighborhoods. He also has his critics.Philadelphia property mogul Chris Rahn doesn’t have a corporate office, a business phone number, or a company website.What he does have is a long and low-key record of deals throughout the city that’s earned him a quiet reputation as a wizard of real estate — and, more recently, a growing stack of lawsuits with his name on them.In one deal-making tour de force, Rahn pocketed $6.5 million in under a year by clearing a from a West Philadelphia property, then reselling the...

Philly’s ‘best property buyer’ makes astounding flips but leaves a trail of angry associates

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