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University City Townhomes owners and the City of Philadelphia are close to reaching a settlement that will require major University City institutions, including Penn, to provide $3.5 million for displaced tenants. Credit: Jesse Zhang

A proposed settlement between the owners of the University City Townhomes and the City of Philadelphia would have Penn contribute resources to a fund for displaced tenants. 

IBID Associates, who own the UC Townhomes, and the City are close to reaching a settlement, multiple sources familiar with the negotiations told The Philadelphia Inquirer. IBID said they could not comment on the proposal under the terms of the negotiations. Both parties in the lawsuit held a settlement conference on March 17, according to the court docket. On March 2, a judge gave both IBID and the City until March 31 to complete discovery and until April 21 to make any motions for summary judgment.

If approved, the settlement would require that IBID provide $3.5 million for displaced tenants, equivalent to $50,000 for each displaced family distributed by a nonprofit third party, according to the Inquirer. In addition, another fund to support tenants through services will be arranged. Penn, Drexel University, and other University City institutions would contribute to this fund.

The settlement proposal would also give the city a half-acre of the land at 40th and Market Streets to be used for future affordable housing. The rest of the property would remain under IBID’s jurisdiction for sale or future development. 

“The highest and best use of that land is as a laboratory research facility," IBID spokesperson Kevin Feeley told The Daily Pennsylvanian in February, before the news of a potential settlement. "And our preference was to find a buyer who would be interested in building a residence there, so the impact on the residents would be minimal."

The proposal has not been approved or finalized by the United States District Court, which is overseeing the case as a result of a lawsuit filed by IBID. The company sued the City and Councilmember Jamie Gauthier following the passage of legislation designed to prevent the UC Townhomes from being demolished and ensure the area remain residential. When IBID and Gauthier were unable to reach an agreement on the lawsuit, the case went to court.

The settlement will not become final until a judge signs off on it. Parties on both sides hope this will happen in the next few weeks, according to the Inquirer.

Controversy over the UC Townhomes has continued since 2021, when the Altman Management Company, a partner under IBID, announced plans to sell the property to a developer who would use the space for housing and life sciences. They refused to renew its affordable housing subsidies.

These plans would force all 69 displaced households to relocate. Tenants received affordable housing vouchers that would allow them to move to other low-cost locations. As of February, around two-thirds of tenants had already vacated, according to IBID.

UC Townhomes residents have joined forces with Penn and Drexel students and housing activists to organize against the sale since it was announced. Protests over the past year have included an encampment on the UC Townhomes property and a protest in front of City Hall.

“We are here to make the universities uncomfortable,” College senior Gigi Varlotta, a member of Save the UC Townhomes and a leader of the protests, told the DP in February. “We know that they have influence over what happens with the Townhomes, and we know that once they commit real funds to the preservation, other institutions in the city will follow suit.”