Bourse Lawsuit: Keystone And Dean Adler Trade Legal Blows Over Old City Conversions
A joint venture between two prominent Philadelphia real estate players has gone awry, leaving the redevelopment of an iconic Old City property incomplete ahead of the neighborhood’s big tourism boom expected this summer.
Keystone Development + Investment sued Dean Adler and several of his companies last month amid a dispute over their conversions of The Bourse building and 400 Market St., which overlook the Independence Mall. The two parties have accused each other of breach of contract.
“My heart is broken,” Adler wrote in an email to Keystone CEO Bill Glazer, which was an exhibit in Keystone's suit. “I gave you a chance — and you let me down.”
The JV formed in June 2024 to turn The Bourse, a 131-year-old building, into a 152-room hotel with a ground-floor restaurant and 400 Market into a 176-unit multifamily building.
Keystone alleged that Adler and his companies failed to adequately fund the projects before moving to replace the firm with PMC Property Group.
The lawsuit says the change is part of Adler’s effort to pivot the Bourse conversion from a hotel to apartments.
His response to Keystone says the plaintiff requested an additional $10M to get The Bourse back on track and that the project would “face catastrophic consequences” without the extra funding. Adler also accused Keystone of willful misconduct and gross mismanagement.
The filings in the Delaware Court of Chancery came after work at The Bourse stopped and mechanic’s liens began to pile up last year, according to Keystone’s suit.
The company claimed that the 400 Market project “has been salvaged only because Keystone made additional capital contributions that it was not required to make under the operating agreement.”
A Dec. 8 email shows Glazer sought a $9.4M buyout, which was the sum of his firm's capital costs plus a 12% return. Adler countered by offering the capital costs plus an 8% return.
Keystone requested a temporary restraining order and filed a breach-of-contract lawsuit last month. The suit was amended on April 9.
The court granted Keystone’s request for a restraining order on March 18, which will keep the company as the project’s managing member while the legal battle plays out. Keystone took this as a victory.
“The Court’s ruling underscores what we have known all along: that Keystone has served in good faith as managing member of this joint venture since its formation in June 2024,” it said in a statement to Bisnow.
“We remain fully committed to the vision of transforming The Bourse into a landmark hotel and mixed-use destination to serve Philadelphia for generations to come.”
Adler and his attorneys at Cozen O’Connor didn’t respond to Bisnow’s requests for comment. PMC declined to provide a statement.
The Bourse hotel conversion was scheduled to wrap up last quarter, ahead of when throngs of tourists are expected to flock to Old City this summer to celebrate the nation’s 250th anniversary.
Adler has been on a conversion-fueled buying spree in recent months.
He partnered with PMC to buy 1500 Market St., the largest office building in Philly, with plans to convert parts of it into apartments and a hotel.
The developer is also plotting mixed-use conversions of the Plymouth Meeting Mall and the Franklin Mall in Northeast Philadelphia.
