The Philadelphia Housing Authority is stepping in after a mortgage scam by the Puretz family devastated the Brith Sholom House complex in the city’s Wynnefield neighborhood.
The PHA is purchasing the 360-unit senior housing complex at 3939 Conshohocken Avenue for $24 million, PhillyVoice reported. The sale needed approval from a judge, which it received last week. It’s a rare direct acquisition of a multifamily property by a city housing agency.
Philadelphia’s housing authority plans to repair the dilapidated building and keep it affordable for its residents. Issues at the complex include broken elevators, leaky ceilings, faulty heating and cooling systems, sanitation problems, mold, pests and security concerns.
Proceeds from the sale will go towards settlements with utility companies.
It’s a hopeful sign for tenants at the facility. This summer, it was reported that there were 275 code violations at the property and that a scam run by the Puretz family stole $1 million in resident utility payments while a surge of squatters started terrorizing residents. The Puretz family defaulted on its $36 million loan at the property, one of many defaults for them.
The senior housing complex was built in the 1960s and sold to a corporate landlord with ties to the Puretz clan in 2012. Ownership filed for bankruptcy last August, but that petition was dismissed and the property was put into receivership, managed by Stockton Real Estate Advisor. Mortgage holder New World Commercial Credit served as the seller.
A group of New Jersey real estate investors, including Aron Puretz and his son, Eli, were part of a broad scheme to strip equity from affordable housing complexes, revealing loopholes in commercial lending. The scheme hit thousands of complexes across the nation and more than 100 in Pennsylvania alone.
Aron Puretz and Eli have both pleaded guilty to mortgage fraud in federal court. Aron’s brother, Chaikel, has been charged with stealing utility payments from tenants in Indiana.
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