Cheltenham Township is buying a pool complex from a private developer for up to $4.5 million, which a resident’s lawsuit alleges violates public bidding rules.
The township commissioners approved a contract last month to lease 2.7 acres by Ashmead Road and Front Street to Melrose Pool LLC for $10 per year. Cheltenham agreed to pay up to $4.5 million for three public pools and a 5,000-square-foot building that Melrose Pool will build under the lease agreement.
Matthew Areman, president of the seven-member Cheltenham commissioner board, vowed this week that the township would share additional details in the “coming weeks and months,” but a lawsuit filed July 22 in Montgomery County Court by Cheltenham resident Sam Thacker alleges the agreement is illegal. He claims it bypasses competitive public bidding laws that would normally apply to a town’s public pool, and wants a county judge to void the contract and issue an injunction to halt the project.
A Montgomery County judge has given Cheltenham and Thacker until Aug. 21 to file their legal arguments, but time is short: Under the lease, the township has to decide on a final pool plan by the end of August.
What the suit alleges
Areman said last year the pool parcel is worth several million dollars, according to the commissioner board’s meeting minutes.
If the township is leasing that land to the developer for just $10 per year, Thacker said, he believes the lease agreement also violates Cheltenham’s township code, which requires the use of “a system for obtaining independent appraisals … to assure that the township is obtaining adequate compensation” when skipping bidding on real estate leases. Thacker told The Inquirer he was unable to find a fiscal assessment for the pool project through Right-to-Know requests or a town spokesperson.
Township officials declined to explain the legal reasoning behind the leaseback agreement with Melrose Pool.
But in an FAQ posted this week, officials wrote Cheltenham had “received estimates from multiple pool consultants indicating that constructing a comparable standalone replacement pool would cost approximately $6-8 million.”
Holly Fishel, the policy and research director for the Pennsylvania State Association of Township Supervisors, who did not comment on Cheltenham specifically, said she had heard of leaseback agreements with townships before but was not sure of the legal mechanisms. In situations where a township is doing construction work on land it owns, “you would need to be doing the bid,” Fishel said.
But in this case, a private company is doing the work on land it has leased.
“That can’t be right that you can just evade public bidding requirements by saying something is a lease when it’s clearly a public construction project,” Thacker said.
Cheltenham is paying up to $4.5 million for three pools
A preliminary plan for the Melrose plot includes three pools of different sizes, but the July 15 lease notes that the developer is to provide a final plan by this week.
The township will then have two weeks to approve or deny the final pool plan.
Upon completion of the work, Cheltenham would pay up to $4.5 million for the new pools, either as a lump sum or in annual installments of up to $382,500.
The two-week timeline for the township to approval a final pool plan is what led Thacker to file his lawsuit.
“The contract is structured essentially to rush this forward as quickly as possible,” Thacker said. “We have no idea if $4.5 million is a good price.”
The figure is cheaper than the $6.1 million estimated in 2023 to redo the Conklin Pool, which the Melrose pools would replace in 2027. The township has one other public pool, in Glenside.
But other residents have questioned whether it is even possible to build three public pools for $4.5 million, given the Conklin pool estimate.
Private development planned beside pool
The pool is part of a larger redevelopment of the former Melrose Country Club — at 116 acres, one of the largest properties in Cheltenham — that includes new townhouses and commercial space.
The lower price tag for the new Melrose pool comes in part from construction efficiencies, Cheltenham wrote this week, since the property will already require site preparation, grading, and utilities for the new buildings.
The property’s developer, an LLC associated with BG Capital, gave the township the 2.7 acres for free last December to advance public welfare and for an unspecified “advantage” to the developer.
BG Capital and the LLC’s attorney did not respond to a request for comment, but court filings Tuesday for Melrose Pool LLC argued that the bidding process Thacker cited under the state’s procurement code does not apply “to the landlord/tenant relationship” between Cheltenham and the LLC because the code applies only to state agencies.
Melrose Country Club project changed
Some residents, including Carl Freedman, have raised concerns at public meetings about the larger project. An earlier plan included both a pool and a community center, Freedman said, and would have allowed more much-needed commercial space.
Cheltenham’s recently approved long-term township plan calls for bringing in more business to bolster the struggling tax base.
Freedman, an architect who sits on the Cheltenham Planning Commission, said the panel no longer supports the project and is sending the township a letter to that effect.
“The loss of the community center is what is making the retail unmanageable,” Freedman said, because the center would have drawn potential shoppers to the site. “This project has taken a left turn.”
Chloe Mohr of the Montgomery County Planning Commission, which reviews local development projects and offers recommendations, said the county commission plans to release a new review of the revised plans late next week.
Inquirer Greater Abington
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