Notice allows Pittsburgh to sell fugitive's blighted properties in Beechview

When would-be developer Bernardo Katz fled to Brazil in 2007 to avoid a federal mortgage fraud indictment, he left behind a morass of lawsuits, mortgage foreclosures, unpaid property tax bills and vacant buildings in Beechview.

Authorities haven't been able to find Katz, who is considered to be a fugitive, but Pittsburgh Solicitor Lourdes Sanchez Ridge, using a network of professional contacts that extends to Rio de Janeiro, was able to serve Katz with a required tax delinquency notice that allows Pittsburgh to sell the last of his blighted properties.

In an email to the Tribune-Review, Ridge said, the city initially sent notices to a list of possible addresses for Katz. They were returned unopened. One had a handwritten note with the word “refused” written on it in Portuguese.

“We couldn't figure out how to serve him notice,” said City Councilwoman Natalia Rudiak of Carrick, who represents Beechview. “Lourdes has contacts who are attorneys at law firms in Rio who were able to (find) him somehow.”

Katz, a former Mt. Lebanon resident and accomplished cellist, once owned 80 percent of Beechview's business district and promised a $2.6 million revitalization.

Instead, he left a legacy of blight that officials say has stunted neighborhood growth for nearly a decade. Efforts to reach Katz were unsuccessful. Katz has appeared in YouTube video clips playing music and on Brazilian news sites in stories about playing the cello and his troubles in the United States.

Federal authorities accused him of defrauding banks of about $20 million and indicted him in 2009 on charges of conspiracy and mortgage fraud. He defaulted on a $750,000 Pittsburgh Urban Redevelopment Authority loan that was intended to support improvements in Beechview.

Pittsburgh's inability to serve Katz with legal notice that he was tax delinquent stymied a 10-year effort to take control of his properties, officials said.

Pittsburgh plans to petition the Allegheny County Court of Common Pleas for permission to sell four Katz-owned properties on Fallowfield, Beechview and Broadway avenues — all in the commercial district. It has posted the properties in a treasurer's sale set for 10 a.m. Oct. 30 in City Council Chambers, Fifth Floor, City-County Building, Downtown.

The properties are unlikely to sell immediately, officials said.

Liens on a vacant lot at 1541 Fallowfield Ave., next to a light-rail transit stop, total more than $3,400, court records show.

Paul Leger, Pittsburgh's finance director, said Katz owes the city and Pittsburgh Public School District about $26,000 in back taxes.

If the properties don't sell, the city will take ownership and can clear the titles, which wipes away all liens, a process that takes about a year. It can then market them to potential developers, he said.

“This unlocks the puzzle,” said Henry Pyatt, Pittsburgh's small business and redevelopment manager.

Beechview residents said the neighborhood could rebound if the properties are sold to responsible developers.

“It held us hostage as a community,” said Phyllis DiDiano, president of Beechview Area Concerned Citizens, a civic group. “This is a wonderful move.”

Katz arrived in Pittsburgh in 1991 and amassed a portfolio of 129 properties in Allegheny County, most of them in Pittsburgh, said County Controller Chelsa Wagner. Wagner of North Point Breeze, a Beechview native, compiled six bound volumes of information about Katz and his holdings while she was a Democratic state representative.

At one time, he owned at least 16 properties in the Beechview business district. Most of them have been sold to private owners, Rudiak said.

Wagner said she worked with her father, Pete Wagner, and a Beechview merchants' association to compile the information. They turned it over to federal authorities, who used it in their investigation, she said.

“This is something that we worked on for years,” said Pete Wagner, owner of the Huddle, a bar on Broadway. “(Katz) came into town at a time when people were hurting and bought up properties all over the community. He never did anything with them. I'm celebrating 40 years of business ownership in Beechview and I'm stuck looking at that junk.”

Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or bbauder@tribweb.com.