Developer Bart Blatstein a risk taker

Look no further than the blueprints to his Rittenhouse Square mansion to glimpse the appetite and aptitude of Philadelphia developer Bart Blatstein.

He is building a megahouse, a gravity-defying playground as unconventional as the onetime Northeast Philadelphia rowhouse boy whose brass and vision have made him one of the city's premier wheeler-dealers.

What was, for three decades, the vacant McIlhenny Mansion is now a three-story-deep hole that will hold a tennis court, glass-floored balcony and half-court basketball court.

At street level behind a preserved 19th-century facade: a 2,200-square-foot garden with a pizza oven, bar and, three stories up, a retractable roof.

On the third floor: An indoor pool with an infinity edge. A sauna, outdoor deck, massage room, gym and wet bar, too.

Blatstein, 60, could have just bought a luxury condo and been done with Gladwyne, where he and Jil, his wife of 35 years, live. But the self-made magnate doesn't do real estate that is simple.

This son of a caterer has made his fortune on the complicated stuff, leaving an indelible mark on Philadelphia neighborhoods by doing projects many deemed unlikely:

The Piazza at Schmidts in Northern Liberties. The River View Plaza movie multiplex and nearby shopping center on Philadelphia's barren Delaware waterfront. A half-empty pier 900 feet over the ocean in Atlantic City.

Untangling puzzles no one else can is the fuel of a man compelled by creative drive and a need to prove he can do what others can't.

"If I was in the real estate business just to make money," Blatstein said, "I wouldn't be doing any of the projects I do."

Blatstein has a flair for schmooze, self-deprecation and grandiosity. But when it comes to deals, he also is a master of math. He spreads around campaign cash to help pursue his objectives. And he's quick with a quip.

"McIlstein Mansion?" Blatstein joked on a recent day, beaming when asked what crews were noisily building in the deep pit behind the construction fence. "I've made it Jewish."

He offered few details, but construction plans on file at City Hall betray its extravagance.

"It's ridiculous," he said. "I went crazy."

Crazy is a word that many have used for Blatstein's penchant for risk. They point to his latest wager: a financially distressed pier on the Atlantic City Boardwalk of recently shuttered casinos where, only weeks ago, he curbed some of his ambitions.

Blatstein does not partner on projects, which means more profit when things go well. But when he loses - and he sometimes loses big - it's all on him.

Last year, after investing what one friend and associate described as a "boatload" of money, Blatstein failed to win a casino license for the former headquarters of The Inquirer, which he owns.

In 2003, while vying for exclusive rights to redevelop Penn's Landing, he got tangled in an FBI corruption probe. Prosecutors later said Blatstein was the victim of an extortion attempt.

Then-Mayor John F. Street dissolved the search for a developer, and his former law partner, Len Ross, did federal time. Blatstein, who with Brandywine Realty Trust was a finalist for the job, was left with nothing.

"Bart's a narcissist, like most developers in town," said longtime friend William A. Harvey, managing partner of Klehr Harrison Harvey Branzburg, whose real estate lawyers often help Blatstein. "He's shocked when he doesn't win something. But he has the ability to quickly move on."

Being a lone wolf suits Blatstein's craving for control. He surrounds himself with commanding young talent because creativity trumps obeisance. When gripped by an idea, he calls staff at all hours.

"He's strong-willed. He's stubborn. He's decisive. But he also listens," said Matt Ruben, president of the Northern Liberties Neighbors Association, who gives Blatstein credit for igniting redevelopment there and, indirectly, neighboring Fishtown.

"He'll at times give you heartburn," said Pat Gillespie, longtime business manager of the Building and Construction Trades Council, but he "makes things happen."

Blatstein has made indelible imprints across Philadelphia with apartments, movie theaters, and shopping districts where once stood scraggly lots, decrepit buildings and, to other developers, dim prospects of revival.

Since the 1980s: Northern Liberties. The Delaware waterfront. Temple University. Manayunk. North of City Hall. An enclosed, foreclosed-upon Atlantic City pier he bought and this summer rechristened the Playground.

Most people would run away from an area that is struggling. Not Blatstein.

"He runs into it," said Brandon Dixon, 32, Blatstein's top deputy. "When he wants something, he is a man of steel."

McIlhenny mansion was one such goal.

Blatstein bought it in April 2013 from Tylenol fortune heir Henry S. McNeil Jr. for half of what had been the asking price three years earlier.

McNeil had waged a legal battle from 1999 to 2003 for approvals to redevelop the vacant mansion and, next door, an attached entranceway beneath a mid-20th-century rotunda. He won but gave up on renovating. Years later, prospective buyers were scarce.

Blatstein paid $4.2 million cash, no contingencies. On settlement day, he slapped a $3 million mortgage on it. Ten months later, he and Jil took out a $9.5 million mortgage on the property.

Approvals from the Historical Commission and permits from the Department of License and Inspections flowed in. And McIlhenny is rising.

Entrepreneurial vision

"Listen to me. Win."

Blatstein delivered this order while standing in the doorway of an office in the Atlantic City pier-turned-Boardwalk-shopping-mall that he bought in 2014.

On the receiving end: Dixon, master salesman and operating chief for Tower Investments.

"You have my complete authority," Blatstein said, emphasizing each word, "to do what you have to do to win."

They were rushing to reopen the mall as an entertainment center - and they were just 10 days away from opening.

Blatstein's foray into the Shore began with some fireworks.

Earlier this year, bankrupt Caesars Atlantic City sued Blatstein for buying the pier, saying he should have sought its approval because the structure rested on land it owned. The company branded him a "rogue occupier."

But the fight was soon settled.

To Jerry Sweeney, founder of Brandywine Realty Trust, Blatstein is a driven entrepreneur who can "see what's happening next," a man who swiftly regroups after failing, and who converts those failures into creative drive for the next project.

"Big institutions don't like to take risks," said Sweeney, who, like Blatstein, parlayed a modest upbringing into enormous success in real estate.

"It's the entrepreneurs," like Blatstein, Sweeney said, "that push the envelope."

Temple made

Blatstein never planned on a bricks-and-mortar life.

He learned the business as a Temple University grad who had failed to get into medical school. He caught the bug while working for the Philadelphia Housing Authority after college - a job secured with help from his father, Harry, who was active in Democratic politics in Northeast Philadelphia.

As a kid, Blatstein had worked at his father's Boulevard Pools, a recreation hot spot near Tyson Avenue and Roosevelt Boulevard in Mayfair, north of Oxford Circle. The club fell on hard times and closed in the 1970s.

Another blow came in 1972, when Harry Blatstein was sentenced to a year of probation after a bribery conviction. He had tried to solicit a $10,000 bribe from a stadium seating company in connection with the construction of Veterans Stadium.

With hopes of becoming a doctor dashed, and making only $11,000 a year at PHA, Blatstein was eager to find a way forward.

He began reading how-to books about real estate. He set a goal: Make $15,000 in the first year. His first sale of a Queen Village trinity he bought, fixed, and sold in 1978, netted $30,000.

In the '80s, he took a shot at the waterfront.

Major players had gotten nowhere with ideas for high rises on the barren shores of the Delaware. Blatstein figured that a shopping center and movie theater would appeal to surrounding rowhouses.

His idea, River View, was tough going.

"My low point on that project: Getting rejected by Dunkin' Donuts," Blatstein said. "I remember it like yesterday."

But it worked.

Blatstein did the same in the 1990s with a multiplex along the Schuylkill in forlorn manufacturing hub Manayunk.

In the 2000s, he looked toward his alma mater.

Ed Rendell was mayor, Street was Council president. Both had searched for a developer to build a movie theater and stores near Temple.

Blatstein got word to city leaders: He wanted in.

"He was saying, 'You guys are looking all over the country, I'm right here,' " recalled City Council President Darrell L. Clarke, who at the time was Street's top aide. "I'll build a movie theater for you. You've got to give me a chance."

On North Broad Street, Blatstein built Pearl Theater, a strip of retail shops, and industrial-chic dorms.

Instead of beating the drum with reluctant national theater chains, as out-of-state developers had done, Blatstein found a one-off operator.

"He brought the first theater, literally, in decades to the heart of the neighborhood," Clarke said.

Difficult times

Blatstein squeezed his Jaguar XJL onto Souder Street, the block where he grew up in the '50s near Cottman Avenue and the Boulevard and talked about sledding on a rowhouse neighbor's impossibly tiny hill, and learning from his older brother how to ride a bike in an alley.

He turned the car toward the Far Northeast and the larger home the family moved into as he grew older. Talk turned to mom and dad.

Both died in difficult ways - his mother of lung cancer, his dad of pancreatic cancer. Years later, memories of their final struggles still loom large.

Another difficult recollection was of hearing his voice on FBI wiretaps.

It was 2003, and the feds were investigating Ron White, the lawyer and political fund-raiser they eventually charged with crimes, only to miss the chance to prosecute him when he died of cancer.

Blatstein had retained White as a fixer of sorts as he sought to win the Penn's Landing deal. Soon, though, White was pressuring him for a stake in the proposed development, prosecutors said.

"I was the victim there," Blatstein recalled. "He was shaking me down for $2 million."

A decade later, the memory still stings.

"That was a bad time," Blatstein said. "A very difficult time."

Had he not lost Penn's Landing, Blatstein says, he would not have immersed himself as fully in imagining how to help reignite Northern Liberties.

"The place was blighted and isolated," Blatstein said. "I assembled 100 parcels. My goal was to create a there there, which I did with the Piazza, and then kind of step back and let the market catch up."

He dove into Atlantic City, too, after losing his casino bid, feeling as if he should use what he had learned about gaming.

But his live music venue hit a snag after opening in June. Earlier this month, the Playground ended all live shows at 39N, the 2,000-capacity performance hall that had been billed as a major draw.

Blatstein downplayed that - an adjustment he said he can afford because he spent so little on the pier.

Also fraught was Northern Liberties, where he bought the shuttered Schmidt's brewery at a 2000 foreclosure auction.

Blatstein met repeatedly with neighbors before his vision coalesced: An acclaimed European-style market square with apartments, shops, eateries and bars.

Blatstein was buying so many properties back then that he had two, three settlements a day, he recalled in a recent interview. But one stands out, he said.

He popped into a room to sign off on buying the old Ortlieb's brewery near Third and Poplar Streets. What happened next still echoes.

Sitting at the table were "a couple old guys," Blatstein recalled, about to accept $430,000 to sell.

As he left the conference room, Blatstein heard laughter.

"Why were they laughing?" he later asked the title clerk.

"They thought they took you," the clerk replied.

Blatstein paused.

"Yesterday," he said, "I signed the settlement to sell the property.

"Sold it for $6 million."

Source: Philly.com