The Philadelphia Land Bank- the dialogue continues

Previously in this blog, I profiled the Philadelphia Land Bank. Since that post, the Land Bank’s progress has continued apace. The Land Bank’s strategic plan was approved by City Council in December of 2014 and a Board of Directors has been appointed. More recently, the Land Bank issued its first Request for Proposals for the development of a contiguous group of available properties on the 1600 block of North Bodine Street. Nonetheless, the Land Bank remains controversial. Recent competing articles in Philadelphia Magazine online highlight the differences of opinion regarding the Land Bank.

The January 9, 2015 article “INSIDE TAKE: The Land Bank Is A Bad Idea,” by Jay McCalla (available at (last visited Feb. 2, 2015), argued that the Land Bank is nothing more than redundant bureaucracy and is dependent on City Council for its success. McCalla is the former Deputy Managing Director of Operations for the Neighborhood Transformation Initiative. McCalla argues in part that, since his former organization was considered underfunded with $300 million, the Land Bank’s budget ($4 million in this fiscal year) is insufficient to carry out its purposes in acquiring privately-owned tax-delinquent properties, sorting them, assessing them, or disposing of them “at a pace to have any effect at all on abandonment levels.” He argues that the Land Bank will duplicate the current efforts of the Redevelopment Authority, Philadelphia Housing Development Corporation, and Department of Public Property. He also points out that City Council’s members must approve all transfers of properties into the Land Bank from their districts to preserve councilmanic prerogative, arguing that “this guarantees that development will remain politically driven.” In short, McCalla argues that the Land Bank is folly.

Beth McConnell’s January 22, 2015 response opposing McCalla’s article, “Land Bank Defeatism Solves Nothing” (available at (last visited Feb. 2, 2015), provides an interesting counterpoint. McConnell is the Policy Director for the Philadelphia Association of Community Development Corporations. Her view is, in part, that the Land Bank is not simply another bureaucratic agency to hold land, but is instead a new tool to quickly and efficiently access abandoned and tax-delinquent properties throughout the City, whether privately or publicly owned. Once in the Land Bank, the properties could be held and transferred out – in particular to owners who propose to use the property to serve a public purpose or implement communities’ plans. McConnell also argues that the Land Bank can and will work together with City Council to transfer properties into the Land Bank, and that Philadelphia’s property values are skyrocketing, even in neighborhoods considered undesirable just a few years ago. In McConnell’s view, the Land Bank is poised to take on both new and old tasks in a streamlined way.

Clearly the Land Bank exists; clearly it is gaining inventory. Just as clearly, though, the success of the Land Bank depends on factors outside its control – most pressingly, quickly increasing the volume of its inventory. Such a large problem makes the Land Bank look to some like a big risk that may not pay off.

What’s my opinion? I think it will succeed, but not overnight. It’ll take City Council and City voters to gain trust in the process and the agency. My question is: will we give the Land Bank enough time to thrive?

For more information about the Land Bank or other Philadelphia real estate issues, contact us.

Do Philadelphia’s Real Estate Tax Abatements Benefit The City?

Since 2000, tax abatements on Philadelphia real estate have been available to owners or developers of commercial or residential real estate who make improvements to real property in Philadelphia. Many abatements permit an applicant to exempt the tax otherwise due on the improvements for up to ten years. When an abatement is in place, the owner or developer pays taxes only on the original value of the property, and not the value of the property as improved. Tax abatement has been a controversial issue, but studies examining Philadelphia’s tax abatements have mainly shown it to positively affect the City’s finances. So, how do abatements benefit Philadelphia?

  • Abatements incentivize development.  Construction costs in Philadelphia are relatively high, but returns on costs are relatively low. Consequently, real estate investors are less likely to choose Philadelphia over more competitive – and nearby – markets. A tax abatement alleviates the discrepancy and helps to make Philadelphia an attractive option for investment and development. In fact, a recent report estimated that, if not for the ten year tax abatement, nearly half of all recent developments in Philadelphia would never have occurred.
  • Abatements create jobs. One study estimated that over 2,000 construction jobs exist in the City due to abatements – and this number doesn’t include architects, engineers, or other construction-related jobs. 
  • Abatements attract new homeowners. Newly-built homes are sold with abatements, making Philadelphia an increasingly attractive city for homeowners. Those homeowners pay City wage taxes, contributing to the tax base. And new home sales generate transfer taxes, which go into City coffers. 
  • Abatements benefit owners of existing properties. A homeowner may be able to show that improvements to an existing home qualify for an abatement. In that instance, for the duration of the abatement, the homeowner will pay taxes on the property as though the improvement had not been made. This encourages homeowners to make substantial improvements to their properties.
  • Abatements return abandoned real estate into active and tax-productive use. If a property is abandoned, vacant, or empty, it generates no tax revenue at all, and is a drain on the City’s resources. A developer who purchases the property and demolishes the existing structure will pay taxes on the value of the land (if not the improvements), and a subsequent buyer will continue to pay taxes on that land. The buyer will also presumably maintain the property, so the City need not waste money on doing so.

So, why is there a debate? Because abatements underfund Philadelphia’s schools.Philadelphia’s public schools, which are largely funded by property taxes, remain in near-crisis mode, with no real plan to close the budget gap. As of the date of this post, is a councilmanic bill in process which would require owners to pay taxes to the School District that would otherwise be abated. However, Kevin Gillen and John Westrum, in their case-study of the Brewerytown Square development, calculate that implementation of the bill will generate less than 1% of the School District’s budget deficit. They also calculate that this amount is far less than estimated taxes generated by the abatements, such as increased wage taxes, sales taxes, real estate transfer taxes, and taxes associated with new construction projects.


The benefits of Philadelphia’s tax abatements outweigh the burdens. The tax incentives to develop real estate were greater than the relative high costs to develop, which in turn led to an increase in Philadelphia jobs, Philadelphia homeowners, and Philadelphia taxes. It also led to a decrease of abandoned, blighted, and tax-delinquent Philadelphia land. And even existing homeowners could take advantage of abatements to improve their homes. In short, the abatements helped businesses, families, and the City bloom.


“Can Improved Tax Collections Solve The City’s Financial Crisis?” by Alaina Mabaso, available at (last visited Jan. 6, 2015).
“City of Philadelphia Economic Impact Analysis of Proposed 10 Year Tax Abatement Adjustments,” by Jones Lang LaSalle IP, Inc., available at (last visited Jan. 5, 2015).
“City of Philadelphia Office of Property Assessment: Abatements,” available at (last visited Jan. 5, 2015).
“Fiscal Analysis of Philadelphia’s Ten-Year Property Tax Abatement: A Case Study; Examining the Net Fiscal Impact of a Newly-Constructed Tax-Abated Development Project in Philadelphia,” by Kevin C. Gillen, Ph.D. and John A. Westrum, available at (last visited Jan. 5, 2015).
“Philadelphia Tax Abatement,” available at (last visited Jan. 5, 2015).

Making the most of your “knowledge web”

Everyone has business or legal questions they can’t answer – even lawyers (especially lawyers). Which is why I’ve focused in part on creating a “knowledge web*,” a network not only of trusted friends and colleagues, but also people with expertise in areas of the law where I don’t practice. My knowledge web helps me, but more importantly, it helps my clients.

For example, let’s say you’ve failed to pay business taxes in the City of Philadelphia, and you come to your shop one morning to find it padlocked. If you were to call me, I would immediately give you contact information of other practitioners I know who specialize in City of Philadelphia tax matters. Given their experience in that area, they will be able to help you more efficiently.

I think analogizing collective knowledge with a web is apt. A web is a series of connections; the “knowledge web” is a form of collective intelligence formed by a series of connections between people. Nobody can know everything, but we all expect to have access to information. Accessing information on the internet, however, is less helpful (and may be less accurate) than speaking to a person who can discuss questions or collaborate on answers. The key part of a knowledge web is the willingness of each member to talk through issues, since without an exchange there is no web. There’s no room for a free rider in a knowledge web. Those who ask for information without providing any in return are soon shut out.

Creating a web takes work, but is very rewarding for me and my clients. It lets me focus my time and energy on my practice and my brand, while still helping to provide a client with a connection to legal assistance. The members of my knowledge web may gain clients. We all work together, in complementary ways, to help our businesses bloom.

* Not to be confused with the “knowledge web” of the James Burke Institute (see (last visited Dec. 23, 2014).

For more information, see Douglas Engelbart’s website, in particular his philosophy on Network Improvement Communities, at (last visited Dec. 23, 2014). See also Don Tapscott and Anthony D. Williams’s books Wikinomics: How Mass Collaboration Changes Everything (2007) and Macrowikinomics: New Solutions for a Connected Planet (2010), which address large-scale collective intelligence in the digital age.

Happy Holidays!

We at Bloom & Bloom, LLC want to thank our friends, neighbors, family, and clients for a great first year. We opened our doors in May of this year. Since then, we’ve enjoyed making new connections and cultivating existing ones, as well as encountering new and interesting challenges. We’ve been privileged to help clients, former and current, with their matters. It’s been a great year!

We want wish everyone a happy, healthy, and relaxing holiday season, and a very happy New Year. Thanks for helping to make 2014 a great year for us.

Warmest regards,

Nella and Myron

Bloom & Bloom, LLC

Debt collection: the Wild West (or worse)

It’s estimated that there are around 9,600 debt collection agencies in the United States, all trying to make money off consumer debt. Some are legitimate, but many aren’t. For those that are above-board, there’s no issue: the company buys the debt from the original holder, like a credit card company, and does its best to get the consumer to pay it off in full. However, the debt can then be sold off to another, less reputable agency – and this is where the problems begin.

Debt collection is like the Wild West. Once a debt is sold, it can be re-sold many times, sometimes to multiple collectors at once. Some companies never even buy the debt, but try to collect on it nonetheless. And some companies simply obtain consumers’ credit reports and call at random, hoping to be paid for another’s debt. Agencies can’t verify the amounts of the debts, and may inflate them to include phantom interest, fees, or costs beyond the stated debt.

At their worst, debt collection agencies are abusive. They may call many times a day, threatening a debtor with immediate lawsuit or imprisonment. They may even threaten to tell a debtor’s employer about the debt, or threaten to take away the debtor’s kids. Those companies are often fly-by-night, disappearing after a threat of a consumer protection lawsuit and restarting under another name. This makes it extremely difficult to pursue an abusive agency for its actions.

Clearly, the best way to avoid being scammed is to only pay the company owning your claim, and only pay the amount legitimately owed. But can you ensure that you’re paying the right entity the right amount? Here are a few steps to take:

  1. Demand documented proof of the debt. Ask for a copy of the credit card agreement, account statements, or an itemization of principal, interest, penalties and fees. A company that cannot provide the information cannot establish the amount of the debt, making a lawsuit extremely unlikely. If the agency tells you to ask the original creditor for the information, the agency likely doesn’t have access to it and therefore has no legitimate claim to payment.
  2. If a lawsuit is threatened, ask for additional information. If the debt collector threatens suit, or says that a suit has already been filed, ask where the lawsuit has been filed, and for the docket number. It’s unlikely that the caller will provide any information. Also, if you have your original agreement, review it to see where a lawsuit would be, and whether the dispute would be arbitrated instead of resolved by a court. Any discrepancy between the caller’s story and the agreement indicates a scam.
  3. Demand a payoff letter. If the debt collector cannot show a consumer that the debt will be paid off in full once the consumer pays that collector, it is possible that the collector doesn’t own the debt.
  4. Check the Better Business Bureau and Consumer Financial Protection Bureau websites. Consumers are able to post reviews of debt collectors, and you might get a better idea of whether the collector is legitimate or not.
  5. Contact your state Attorney General. Attorneys General also keep records relating to collection agencies, and you may be able to either lodge a complaint or verify information for an agency trying to collect a debt.
  6. Determine how old the debt is. Depending on the age of the debt, the statute of limitations may make the debt uncollectable; however, sometimes, payment in any amount may re-validate a debt. Check the rules of your state to see whether a consumer debt, or a debt based on breach of contract, would be enforceable based on the age of the debt.
  7. If you know the collector is not legitimate, avoid interactions. If the debt collector can’t speak to you to discuss the debt, it will likely move on to an easier mark after a while. 

Getting collection calls or letters can be extremely stressful. However, standing up to unscrupulous collectors by doing a bit of legwork can make the difference between making unnecessary payments and avoiding paying a debt the collector doesn’t own.

Video Podcast with Jake Halpern: The Underworld of Debt Collecting (describing his book “Bad Paper: Chasing Debt form Wall Street to the Underworld”), available at The American Bankruptcy Institute, (last visited Dec. 9, 2014).

The trouble with law firm mergers

On Monday, November 24, Philadelphia-based Morgan Lewis & Bockius LLP absorbed Boston-based Bingham McCutcheon LLP. When the merger is complete, Morgan will have nearly 2,000 lawyers in 28 offices worldwide, and will be the tenth-largest law firm in the world. Is there an advantage to the merger? Let’s put it this way: in their shoes, I’d likely vote against it – even if I’d be in the minority.

My (not very popular) answer is that a merger of this scale can be quickly disadvantageous. While I’m likely in the minority, here’s my logic:

  • Law firm mergers are financially risky. When law firms have bank debt, that debt must be repaid whether there is capital to do so or not. If two firms with debt merge, the consequent debt increases as well and the resulting firm must justify its size by earning even more than its constituent parts did before the merger, and if hourly rates are too high, this can be extremely difficult.
  • Corporate culture differences are hard to negotiate. Without a solid and cohesive culture, partners’ loyalty may be compromised. At the first sign of trouble, instead of seeking solutions together, partners may flee to a firm with a more solid financial background.
  • Professional responsibility rules limit the number of clients a firm can have.When a lawyer represents a party in a matter, the entire firm may be conflicted out of representing other parties, and when matters involve hundreds of parties, that could mean hundreds of unavailable clients. When two colleagues are retained by conflicting parties, often there’s a decision about which matter is larger or which lawyer’s contributions to the firm are greater – but those decisions may not involve which client has a greater or more immediate need for a lawyer’s help.
  • Excessive overhead is a concern. Economies of scale don’t always work the same for megafirms as they do for other large businesses. At least one author has commented on this, saying that large firms spend more per partner on staffing, office overhead, insurance, and other costs than smaller firms. And each separate branch office must be profitable, or the attorneys staffing the office could be dismissed.
  • The bigger the firm, the larger the price. Which means that clients feel that to get quality representation from any firm, they should be paying a lot. Sometimes paying a high price for representation feels secure – “if it was blessed by Cravath, it must be fine.” But remember that the same was said about deals vetted by Arthur Andersen. Clients shouldn’t have to pay extremely high fees for quality representation.
  • Fewer choices for lawyers’ employment. It’s difficult enough for law students to find jobs now. Mergers mean there are fewer options for a new lawyer to get that first opportunity to work, to learn, and to thrive. In turn, fewer new lawyers will receive legal training. At least some of those new attorneys may open up their own practice with only limited skills and real-life experience. And those attorneys will be hired by clients, who will bear the brunt of the training gap. In short, this is a problem for all of us who either provide or use legal services.

Perhaps my vision is clouded because I am now the Managing Member of a very small firm. Nonetheless, I feel that a new megafirm must look to the past, to failed mergers and large law firm bankruptcies – and to the future of building a sustainable long-term solution to address clients’ needs. 

Paul M. Barrett, “Howrey’s Bankruptcy and Big Law Firms’ Small Future,” Bloomberg Businessweek Online, May 2, 2013,available at (last visited Nov. 25, 2014).
Jason Fagone, “Wrongful Death,” Philadelphia Magazine, May 26, 2009, available at (last visited Nov. 25, 2014).
David J. Parnell, “Al Togut of Togut, Segal, On Avoiding law Firm Bankruptcies,”, August 4, 2014, available at (last visited Nov. 25, 2014).
Jeffrey A. Wurst, Esq., “When Law Firms Go Bankrupt – What Secured Lenders Can Learn From The Dewey Bankruptcy,” ABFJournal, Nov./Dec. 2012 Issue, Vol. 10 No. 8, available at (last visited Nov, 25, 2014).

My Very Own WBE

I’ve counseled many businesses on becoming woman-owned business enterprises (WBEs) or minority-owned business enterprises (MBEs). Now it’s my turn to apply for WBE status for Bloom & Bloom, LLC.

Applying for WBE status makes sense for this firm because we’re focused in part on Philadelphia real estate matters. The City of Philadelphia sometimes bids out agreements for legal services. Philadelphia has WBE and MBE participation goals for many, if not all, contracting opportunities, so certifying will permit us to bid on those projects.

Just as important, in applying for a WBE, I will be able to get a client’s perspective on the WBE application process. Up to now, my participation has been as a lawyer, advising a client on how best to convey his or her essential involvement in the business. Now as Managing Member, I’ll be acting as my own advocate in this application, describing my startup process, my financial contributions, my sweat equity, and my management of the firm.

Perhaps it’s true that one who represents herself has a fool for a client. But I hope that soon enough, I’ll report that Bloom & Bloom, LLC is a WBE.

Think before you post!

Social media is so pervasive that it’s sometimes difficult to determine what not to post.  Often, people refrain from posting family photos or vacation plans due to safety concerns. But that’s not the only danger of posting information to social media. Posts can also affect the outcome of a legal representation.

For example, let’s say that a business, “Orlando’s HVAC, Inc.,” contains short bios of its employees. Of one employee, owner Orlando posts, “Ernie’s work is always solid, and he’s so reliable my customers ask for him by name!” Later, Ernie is terminated from Orlando’s HVAC, Inc. Orlando says Ernie was fired for poor workmanship; Ernie claims that it was his age, and that Orlando made comments on how old Ernie was getting before Ernie was let go. Ernie may use Orlando’s previous glowing review of his work to show that his purported poor workmanship was simply a pretext and he was the victim of age discrimination.

Websites and social media sites are often the target of discovery by opponents exploring litigation. Husbands post photos of themselves and their girlfriends, only to be confronted by the information during divorce proceedings. Family members disclose confidential settlement terms, risking censure or even breach – perhaps even undoing the settlement altogether. The information is extremely easy to find with fairly simple searches. And even if the website is changed or a post is deleted, the information still exists and may be able to be retrieved by tech-savvy counsel.

Clearly, refraining from posting is the best solution. If you can’t avoid posting information, review it with a critical eye. Does it reveal any type of confidential or sensitive information? Could it be misconstrued? If the information were always retrievable, would you mind?

To learn more about how specific posts might affect your business, contact us.

How can I perfect my great idea when I have to spend so much time managing my business?

A small business starts out with a great idea – a product, a service, or a particular expertise – and a driven organizer.  However, having a great idea is very different from running a business, and an organizer might find himself spending more time running the business than executing his idea.  It can be very frustrating to sacrifice time and energy into the business side, instead of promoting the great idea. 

Taking just a few minutes each week to run your business efficiently can maximize earnings and make things simpler at tax time.  Here are just a few ideas for taking care of your business, even if you’re not a business maven.

  • Issue invoices promptly.  Clients and customers sometimes have short memories.  They might remember work you did for them a few days ago, but forget work you did a few months ago – and worse yet, might refuse to pay or demand a discount. Getting invoices out closer to the time the work is finished can sometimes result in a better rate of return for the work.  
  • Keep receipts.  Keep receipts for office expenses that you pay out of pocket, whether they be marketing, rent, supplies, or equipment purchases.  Also, keep track of your travel costs – the site,-Medical-and-Moving-Announced (last visited October 27, 2014) offers the 2014 IRS rate for travel costs.  These costs may be reimbursable on the company’s earnings, and might be payable before the end of the tax year.
  • Open a tax escrow account.  Here in Philadelphia, business owners may be responsible for Federal, state, and several types of City taxes – including net profits, business privilege, and wage taxes.  In order to ensure that all obligations are covered, consider opening a tax escrow account and ensuring that at tax time, there is enough to cover all taxes.
  • Create a balance sheet.  A balance sheet will let you track the business’s revenues against its overhead.  Banks or other funding sources often demand to see balance sheets before lending money.  Over time you’ll be able to track your business’s growth and predict future earnings, anticipate when to replace equipment, and determine whether to hire personnel.

Having your own business can be immensely rewarding, and with a bit of forethought and attention, perfecting and promoting your great idea can take precedence over running the business.  If you have questions, feel free to give us a call so we can help your business bloom.

Did I really agree to anything when I clicked “I AGREE?”

If you use online or device-based software, you almost certainly clicked “I AGREE” to the terms and conditions in order to purchase or use it.  And if you’re like most people, you probably didn’t read all of the terms and conditions before you clicked.  So if you didn’t read it, did you really agree to the terms and conditions?  And what could they mean?

If you click “I AGREE” to software installation or use, you accept every one of those terms and conditions, whether you would normally agree to them or not. The terms and conditions are, in essence, a contract which each user agrees to honor, and clicking “I AGREE” is equivalent to your signature. Most terms and conditions are fairly innocuous, but there are some provisions that some of us would find objectionable. Online payment software, for example, often permits users’ demographic information to be shared, requires disputes to be arbitrated (not litigated) in far-flung locales, and even permits the company to report users’ income over a certain threshold that comes through the software to the IRS.

So, if you disagree with the terms and conditions, can you alter them and then agree?  It’s doubtful. Software contracts are take-it-or-leave it contracts.  If you disagree with provisions you can certainly try to negotiate with the provider’s general counsel – but the company’s position will probably be that you need not use the software at all if you don’t like the terms of use.  Since software agreements for similar products have fairly similar provisions, it can be a frustratingly meaningless argument and difficult to avoid agreeing to questionable terms and conditions. And for companies taking web-based payments, often enough the benefits of getting online payments outweigh the risks of the contractual terms.

Reading through terms and conditions can be unpleasant. However, they do constitute a contract. It’s important to understand that by clicking “I AGREE,” you really do agree to be bound by contractual terms – whether you read them or not.