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Minutes

Committee Hearing, January 27, 2005

Philadelphia City Council Committee HearingsJan 27, 2005

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COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON PARKS, RECREATION AND CULTURAL AFFAIRS - - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, January 27, 2005 1:10 p.m. - - - - RESOLUTION 040912 - resolution authorizing the Committee on Parks, Recreation, and Cultural Affairs to hold hearings to investigate the reasons for millions of dollars in outstanding payments to subcontractors who took part in the construction of Lincoln Financial Field... PRESENT: COUNCILWOMAN BLONDELL REYNOLDS BROWN, Chair COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN RICHARD T. MARIANO COUNCILMAN FRANK RIZZO COUNCILMAN JACK KELLY COUNCILWOMAN JANNIE BLACKWELL COUNCILWOMAN MARIAN TASCO COUNCILMAN FRANK DICICCO - - - - V A R A L L O Incorporated 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 I N D E X RESOLUTION 040912 LUIS CRUZ............................ CARLOS MATOS......................... 6 REPRESENTATIVE THOMAS BLACKWELL, IV.. 42 MARK ROSENBERG....................... 47 7 PAULA MILBOURNE...................... 57 THOMAS CIRIGNANO..................... 61 8 JAMAL JOHNSON........................ 76 JIHAD ALLAL.......................... 83 9 MICHAEL KUNTZ........................ 92 DENNIS BIGGS......................... 95 10 CHRISTOPHER LEE..................... 113 JOSEPH BANNER....................... 137 11 SHERYL MCKISSACK-FELDER............. 188 CHARLES ANG......................... 204 12 3 01/27/05 - PARKS - RES. 040912

Councilwoman Brown

Good afternoon and welcome to the City Council Committee on Parks, Recreation and Cultural Affairs. I recognize the Members of Committee. To my right is W. Wilson Goode. The record should reflect that Councilman Rick Mariano, sponsor of the resolution, will be speaking this afternoon. I would now ask the Clerk to read the title of the resolution.

The Clerk

Resolution 040912, a resolution authorizing the Committee on Parks, Recreation and Cultural Affairs to hold hearings to investigate the reasons for millions of dollars in outstanding payments to subcontractors who took part in the construction of Lincoln Financial Field; and further authorizing the Committee to issue subpoenas to compel the attendance of witnesses and the production of documents and other evidence.

Councilwoman Brown

Thank you. We will now move to our witness list. The following individuals will be 4 01/27/05 - PARKS - RES. 040912 called in this order, unless I'm advised otherwise. Luis Cruz of Cruz Construction, if you would please come forward. We welcome you to the witness table.

Councilman Mariano

Councilwoman, if I may make a statement before we start.

Councilwoman Brown

Absolutely. Councilman Rick Mariano will offer remarks prior to opening testimony.

Councilman Mariano

Thank you. I just want to take this time, since I was the sponsor of this resolution and the person calling for these hearings, to say there's nothing archaic or mid-evil about these hearings. Being a person that has a background in construction, I think I understand construction. But if I understood it a lot better I wouldn't be sitting up here. I'd probably be sitting on the other side of the railing and would still be in the business. Believe me, it is a tough business. The contractors here that have issues understand 5 01/27/05 - PARKS - RES. 040912 what kind of business it is. This isn't a shot at the Eagles. We're all happy for the Eagles. My problem is I want to make sure Terrell Owens plays in the Super Bowl, and Mr. Banner assures me he will make sure he plays there if he's well. I think that's it. We just want to make sure everybody gets a fair shot here. We went through a lot of blood, sweat and tears, these two Councilpeople sitting next to me and some other Members who can't make it today. Some are listening downstairs. These stadiums were a vision for this City, and we want this City to do well. But this has to be an all inclusive package of goods. Councilman Rizzo, thank you for joining us. We want to see everyone have a piece of the pie. We don't want to come back years later and say, it's a shame. It's good for us that the Eagles are doing so well right now. This is a very confusing process, 6 01/27/05 - PARKS - RES. 040912 the way this is structured, and who is paying who and who is not getting paid. Nobody is going to happy today. There's no way that everybody is going to leave here happy. Now, I can put that in vernacular that's better for me and these construction workers. I won't. But you can't please all the people all the time. We're just trying to make sure there's a fair shake so people like Luis Cruz, who is a genuine part of the community, and many of you other people out there understand that it's important that a guy that looks like Luis, sounds like Luis, talks like Luis gets his fair share of the economic pie. If he doesn't, there's no sense for us building stadiums. Nothing against the players. They deserve every penny they get. I'm not one of those Monday morning quarterbacks. I know I can't play professional football, or I'd be playing it because the money is great. They earn every penny they make. You earn every penny you make. But if we decided not to pay 7 01/27/05 - PARKS - RES. 040912 Donovan McNabb or Terrell Owens his money, guess what? You couldn't get out of these Chambers. It would be crowded. Luis Cruz and the rest of the people in here deserve all the money they can. This isn't all the Eagles. I'm not blaming it on the Eagles. The Eagles have been very forthwith with what they've been telling us with Judge Lord. We appreciate his representation and McKissack and Turner and Keating. We're gong to find out no matter how long it takes to make sure the Luis Cruz's of the world get a fair shake. Louie, you're on now. Thank you.

Councilwoman Brown

Thank you, Councilman Rick Mariano. Allow me to acknowledge the presence of our majority leader, Councilwoman Jannie Blackwell, and the presence also of the new State Representative, Representative Tommy Blackwell. Welcome. (Applause.)

Councilwoman Brown

I am told that there are contractors in the audience of my 8 01/27/05 - PARKS - RES. 040912 gender who will be invited to speak on this very, very important issue. So with that, we will proceed. Luis Cruz, Cruz Construction. Please state your name for the record and please proceed with your testimony.

Mr. Cruz

Good afternoon, Councilwoman and Members of the Council. My name is Luis, L-U-I-S, Cruz, C-R-U-Z. Thank you, Councilwoman. Good afternoon, distinguished Members of City Council. I would like to thank you all for the opportunity to speak on this matter that has quite literally placed my business, my family and myself in serious financial jeopardy. I especially want to thank my Councilman, the Honorable Richard T. Mariano, who has shown great courage and commitment by standing up for me and the other contractors who helped to build the Lincoln Financial Stadium for the Eagles, against the recommendation of political insiders not to get involved. 9 01/27/05 - PARKS - RES. 040912 (Applause.)

Mr. Cruz

I just would like to start by saying that I am very proud of our team and what they have accomplished in our building that we helped build for them. No 7 one could be happier about their success and the way the stadiums have contributed to the strengthening of this franchise. We support this team. I support this team, and we are some of the Eagles' biggest fans. I am the president of Cruz, Incorporated, a second generation business that was founded by my father over years 15 ago. In 1989, I started my own business with 16 the dream of becoming the largest Latino 17 construction company and the largest employer 18 of minorities in the area. I have paid my 19 dues economically, socially and politically 20 and have earned the right to participate in 21 the building of the new stadium. 22 The importance of access to 23 contracts on publically funded projects 24 remains a serious issue for the minority 25 firms, and it is even more painful when you 10 01/27/05 - PARKS - RES. 040912 land a contract, meet and exceed the expectations, and then do not get paid for successfully completing ahead of schedule the terms and commitments required of us. Cruz, Incorporated was contracted by TKM, KUD and the Eagles management to provide various site work projects, bulk excavation demolition, paving curbs, utilities, et cetera, required to complete the Lincoln site by August 1st, 2004. The work was completed on July 17th, 2004, two weeks ahead of schedule, so that they could accommodate the world soccer game and the Bruce Springsteen concert. There were flaws in the original site drawings, which led to grade and reengineering. We had to redesign the parking lots, et cetera and additional paving modification. These change orders were approved and signed off on by Turner Construction and acknowledged by KUD and the Eagles management. We were instructed to do whatever needed to be done with additional labor and premium time and were assured that 11 01/27/05 - PARKS - RES. 040912 it would be approved and paid for by Turner Construction and the Eagles management. I have all the appropriate signatures and documentations to substantiate the approved work orders. Based on our confidence and the directive given by Turner Construction we completed the work on time. At the completion of the project, when our companies expected to receive the benefit and fruits of our labor, Turner Construction transformed into, let's make a deal. And the games began. We asked for payments, punch lists appeared, mostly of irrelevant issues. Although more money is due than the value of the punch list, payments were stalled until we completed them. Now we must spend more money just to get paid less profits now. When the first punch list was completed, a second one got published, even more irrelevant than the first and unrelated. And the war began. Letters go back and forth. Weeks zoom by and interest on borrowed funds rises, and still there are no responses, at 12 01/27/05 - PARKS - RES. 040912 least partial payments, on the undisputed items because it would disavow the ultimate agenda to confuse and delay payments. Now that the owners have issues with TKM, all the contractors' payments are being held up because Turner Construction Company will not pay anyone until they can assure themselves that their own payments from the owners are assured. Now we are negotiating pennies on the dollar in order to get the money that is due to us. Thank you.

Councilwoman Brown

You're welcome, Mr. Cruz. You care to make any comments, please? Please state your name for the record.

Mr. Matos

Carlos Matos. Luis Cruz is a neighbor and businessman in my ward district. It's shameful that when they talk about minority contractors and how we need to get them 13 01/27/05 - PARKS - RES. 040912 involved and that there's been certain allocations of federal dollars and state dollars that have been allocated for projects such as this type of magnitude. I don't know how many millions and millions of dollars they've got, but some of that money was supposed to assure that minority construction folks could participate in it. Knowing their financial ability not to be able to carry jobs of that magnitude, you pair off with people that can, so that they can meet the minority standards. After all that is said and done, the minority folks are hired. Then there's certain payments that are agreed to. Then they're forced into getting further squeezed about the money they've bidded for the project. If there's other needs, then other squeezes are put onto these minorities to do other relationships with people of multi-million dollars who happen to have a wife or a niece or someone who can qualify some minority person to then force them to do business with those people as 14 01/27/05 - PARKS - RES. 040912 well. In the situation here with Cruz similar circumstances have happened to him, where he as a minority was forced to do business with other people, and now he's in debt to these people who can afford the loss. But if doesn't get paid, he can't pay these people, and these people are going to come after him, and they can very well do without it. What this venture has done, thinking that it was something that was going to help our community, because Luis does employ people from our neighborhoods, is now costing our brother here to go out of business, which means that we've lost about eight or 10 jobs and he has had to let these people go. What is the benefit of all this that we're doing? Because we're not really gaining from it. No matter what the game is played, whether it's Banner, whether it's Turner or Keating, they got the political friends. This is how they get these jobs. Then their favorite contractors get these jobs. In order 15 01/27/05 - PARKS - RES. 040912 to qualify they have to pair off with some minorities to do this and to do that. For them to try squeeze a brother who is for real, who is creating jobs, who is bringing economic development into our communities -- because when we have people working in the community, that means they're going to buy from the grocery store, that means that they're going to be able to afford a house. They're going to better keep our neighborhoods and so on. That harmony of life has been disrupted because someone wants to be a pig and not pay for work that was done. I think that that's shameful and disgraceful and I think that people should be held accountable to that. That's what I have to say. Thank you.

Councilwoman Brown

We thank you for your testimony and we want to welcome to our Council hearings Councilwoman Marian Tasco. Councilman Rick Mariano.

Councilman Mariano

Thank you. Luis, a couple questions. Explain 16 01/27/05 - PARKS - RES. 040912 to me for the people here that may not understand all the ins and outs of the construction industry, did you do all the work that you want your money for? I mean, you're not asking for something that you didn't do?

Mr. Cruz

That's correct. Our work was completed. They're parking on our parking lots. They're getting revenue from it, you know, from the day that the concerts came in. That they have a few issues, absolutely. But the thing is, is nobody is coming to the table and saying, okay, X, Y, Z. Let's go back and forth. None of these things are being done. It's just confusion, confusion, confusion. You know, mixing it all up, pointing fingers this way. Nobody knows who. But the fact of the matter is that it's on my dime. Instead of saying, okay, X amount of dollars is going to be allocated for this, we're going to pay you everything else, I'm being held up all my money. But yet the work that we did is being benefited by the Eagles. They're making money on those parking lots. They're getting those fees. I'll easily 17 01/27/05 - PARKS - RES. 040912 switch. We can use the parking lots.

Councilman Mariano

This isn't work that's not finished?

Mr. Cruz

This work has been completed.

Councilman Mariano

It's not work that we can be arguing about over whether you should have hired workers for premium time or anything like that? It's stuff that was in the general scope of the original contract, or was it extras?

Mr. Cruz

That's right. The dispute is the extra work that we were directed to do so they could be able to have these additional events.

Councilman Mariano

Who gave you authority to do the extra work?

Mr. Cruz

Turner Construction gave us the directive to proceed and do this work. We got what they call an SIS, which is a Superintendent's Instruction to Subcontractors. They get an order by KUD, who gets an order from Eagles. Eagles tell KUD, I want this done. KUD tells Turner to get it 18 01/27/05 - PARKS - RES. 040912 done. Turner comes to us and tells us, we want it done.

Councilman Mariano

Luis, the people that are authorizing this, to do this, and you pay your workers the next week -- you have union workers. You have to pay them and you have to pay them the union rate. These are authorized people. It's not just somebody that shows up one day. It's not the guy that dresses in the swoop outfit. It's actually a guy that you've been dealing with and he says, I'm authorized, Luis. You need to do this work. Please do it. Is that how it went? Help me, because I don't know.

Mr. Cruz

We had specific instructions. In fact, we would get our instructions from their executive, who would tell their field person -- we were only allowed to acknowledge one person on the field.

Councilman Mariano

Who was that person?

Mr. Cruz

It was Mr. Bob Hoffman who would direct his field superintendent. 19 01/27/05 - PARKS - RES. 040912

Councilman Mariano

Bob works for Keating?

Mr. Cruz

Bob works for Turner. The additional work that we did would dig into my pocket. In other words, when we were asked to expedite the schedule, we were on schedule. I don't have no 9 documentation and they don't have any documentation that said, Luis, you need to expedite. You need to put more workforce. You need to put more men on the job because you're behind schedule.

Councilman Mariano

You lived up to your end of the contract and you had authorized signatures to do this work?

Mr. Cruz

That's correct.

Councilman Mariano

Because you're smart enough. I was in this business. My first job I ever did, I thought I was doing the contractor well, and somebody signed something. I learned that lesson in 1977, that you can't do that stuff. It's a trick that people do to people. Who was that guy? 20 01/27/05 - PARKS - RES. 040912 I don't know. He's gone. She's gone right now. You're smart enough to know, I'm not questioning you. I just want to state that for the record.

Mr. Cruz

That's correct. In fact, at this moment I've been told by Turner Construction, who said as early as Friday that there is no issue with the dollars that are owed to us. It's having the Eagles management acknowledge that they're going to cut the check for it. In other words, Turner Construction, TKM and KUD acknowledged on our amount and the work that we did. They acknowledge it. And they say, no, we understand that we owe them that money. It's we're waiting for Joe Banner from the Eagles to say we're going to cut the check.

Councilman Mariano

Luis, what's that figure? Do you have a figure?

Mr. Cruz

$457,000.

Councilman Mariano

That's Cruz Construction alone? 21 01/27/05 - PARKS - RES. 040912

Mr. Cruz

That's Cruz AP Joint Venture.

Councilman Mariano

We're not talking about any of these other guys here beside you and AP?

Mr. Cruz

Just Cruz AP Joint Venture.

Councilman Mariano

Do you know the ballpark figure for everybody besides you and AP?

Councilman Mariano

Does anybody know that number?

Mr. Cruz

There's numbers flying all over the place.

Councilwoman Brown

Point of information, Councilman. At what point did the delay in your payments commence?

Mr. Cruz

As soon as we were done the work.

Councilwoman Brown

Give us a more definitive date. Was it a year ago? Was it 18 months ago? 22 01/27/05 - PARKS - RES. 040912

Mr. Cruz

We've been done for about months. About 16 months ago the delays 4 started. 5

Councilman Mariano

Was it August 6 of '03, before that soccer game? 7

Mr. Cruz

That's correct. 8

Councilman Rizzo

Point of 9 information. 10

Councilwoman Brown

One follow-up. 11 Please define for me, for persons like myself 12 not in the business, what is a punch list? 13

Mr. Cruz

A punch list is, in other 14 words, you complete your project, but you 15 might have not screwed in that little corner. 16 It doesn't affect you moving forward with the 17 project, but little things that didn't get 18 done that you have to go back and correct. You might not put a cap on that lid. You might need to paint that little stripe that you missed. That's what a punch list is. They got that their certificate of occupancy. They were able to use the stadium. Our punch list didn't stop them from being able to use the stadium, use areas that we 23 01/27/05 - PARKS - RES. 040912 worked in. It was just things that we had to go back and take care of, but minimal items. It's been minimal items. Unfortunately, it's been used as a tactic to hold payments.

Councilwoman Brown

And that tactic began again, as you say, August '03?

Mr. Cruz

That's correct.

Councilwoman Brown

Follow-up, Councilman Rizzo?

Councilman Rizzo

Thank you. Good afternoon.

Mr. Cruz

Good afternoon, Councilman.

Councilman Rizzo

Obviously you most likely have never run into a situation of this magnitude of a slow pay. Would normally in lesser number, if there was a delay, would you calculate interest in for the delay and would that be appropriate to do that here where when you are eventually paid, that there should be some add-ons because of the delay, or does your contract prohibit you from doing that?

Mr. Cruz

Councilman, that door is 24 01/27/05 - PARKS - RES. 040912 open. But unfortunately, then you have to go through legal means. I've basically just taken the road that I'd just like to get paid my money. Am I out a considerable amount of money from borrowing money against this? I am. Over $100,000 dollars.

Councilman Rizzo

I appreciate your compassion, but I think you should be made whole, if that legally is possible.

Mr. Cruz

It's hard enough getting paid.

Councilman Rizzo

I understand. We're getting there. But don't surrender too quickly. Thank you.

Councilwoman Brown

Councilman Rick Mariano, continue your line of questioning.

Councilman Mariano

Councilwoman Blondell Reynolds-Brown brought up a good point. The punch list, I'm very familiar with punch lists, again. What punch lists do, Councilwoman, is, proceed, but we've got to go back to this stuff. The punch list, you usually come back. 25 01/27/05 - PARKS - RES. 040912 But for something like this it would be open, a hospital, an office building. People would be in there, then workers would come in under a little better conditions and do the stuff. That doesn't keep you from getting your certificate of occupancy.

Councilwoman Brown

And proceed without pay?

Councilman Mariano

Well, hopefully everybody is paid at that point.

Mr. Matos

If I may add, Councilman, the punch list is when you've finished the job, they go back and see there's a couple items that may need to be patched up again. We're talking a considerable amount of money here. We're talking about 450-some thousand dollars versus a punch list that may be $10,000, or even -- let's go to a $100,000. It doesn't mean that you have the right to hold all of the money for work that hasn't been accomplished. The purpose for holding that money would be so that if he doesn't come back and finish that punch list and they have to get 01/27/05 - PARKS - RES. 040912 someone else to come in and do it, that money that they held would be enough to cover the list that needs to be finished.

Councilwoman Brown

I understand.

Councilman Mariano

Mr. Cruz, let me go a little further on in this long and winding tale here. You helped them and you helped the people get the stadium opened quicker for Bruce Springsteen and the soccer game, and then when you're done, that's it? It's all done? They don't need Luis anymore? You take your trucks and your front-end loaders and you leave and then suddenly you don't get a check? Take me down that road. What happens? Like you were expecting, this is good. Things are getting slow, but I have checks coming in. What happens?

Mr. Cruz

We expected to have that money.

Councilman Mariano

When did you expect that, Luis, like right after August?

Mr. Cruz

At least within 60 days.

Councilman Mariano

So that would 27 01/27/05 - PARKS - RES. 040912 have been by October of '03? By the time the team played their first regular season game you thought you would be sitting in the stands enjoying this, right?

Mr. Cruz

At least 95 percent paid off of everything that was still outstanding.

Mr. Matos

We won't get into the fact that they wanted the minority contractors to buy a season box. We won't even get into that. That's another animal.

Councilman Mariano

It's not good to talk about boxes in this building. Luis, keep going. So what happens? Who do you go to? What do you say?

Mr. Cruz

We would go back to Turner because they were the point people.

Councilman Mariano

Who at Turner?

Mr. Cruz

Mr. Hoffman.

Councilman Mariano

The same guy that signed the extra work orders?

Councilman Mariano

Is Mr. Hoffman in here today?

Mr. Cruz

Yes, he is. 28 01/27/05 - PARKS - RES. 040912

Councilman Mariano

Mr. Hoffman, raise your hand so I can see who we're talking about. Don't hide behind the pole. This is your shot. minutes of fame. You're going 6 to be famous. 7 So you go to him and you don't get 8 paid? 9

Mr. Cruz

We wouldn't get paid. 10 Their position was the Eagles haven't paid us. 11 We're waiting for payments from KUD and the 12 Eagles. 13

Councilman Mariano

Did you ever 14 deal with the Eagles directly? You never did, 15 right? Always Turner?

Mr. Cruz

They cut us a few checks directly in the beginning of the project. Since it was such a substantial project for us, we were having some cash flow problems. We had about men on the site. We're really 21 rocking and rolling and they weren't 22 processing our paperwork, in fact, in time. 23 But they needed us to get the work. They 24 expedited a check within a week for us and we 25 were able to get some cash flow. In fact, I 29 01/27/05 - PARKS - RES. 040912 have copies of that check because it was a handwritten check straight from the Eagles.

Councilman Mariano

But you never really had a contract with the Eagles, right?

Mr. Cruz

That's correct.

Councilman Mariano

But suddenly they pay you?

Mr. Cruz

They cut us a handwritten check so we could be able to continue and not delay the process. Now there's no incentive because we're done. They're using our work.

Councilman Mariano

Let me get back to where we were. So you don't get paid. You go to Mr. Hoffman and you say, where is my money? Is that what you said?

Mr. Cruz

That's right. Basically he would quote me, our contract reads, pay when paid. So when the Eagles pay Turner, then Turner will pay us.

Councilman Mariano

But, Luis, how do you know when the Eagles pay Turner?

Councilman Mariano

You don't. Do you know it today if the Eagles ever paid 30 01/27/05 - PARKS - RES. 040912 Turner?

Mr. Cruz

I don't know where that's at.

Councilman Mariano

So what happens? Then you just start trying to get other work somewhere? You have to pay back banks. You already paid off union operating engineers and laborers, who, by the way, make 30-some bucks an hour or more. So you're hitting into the kids' college fund at this point, or you didn't get that far? What do you do?

Mr. Cruz

We're past the kids' college fund. We're breaking every piggy bank.

Councilman Mariano

So what goes on here?

Mr. Cruz

What's happened is, fortunately we were able to have a financial institution give us a line of credit because of how our company was growing and how it was expanding.

Councilman Mariano

With your trucks and your equipment and your garage and 31 01/27/05 - PARKS - RES. 040912 stuff?

Mr. Cruz

The house and everything else. Basically that's what we've been living off of because the last year we haven't been able to get any work because we don't have the funds to be able to run the work. Because it's just at the end of the day not every client is going to cut you a check every week. We're out here fighting two wars; one, trying to find work where the client is going to pay you quickly, and, two, is trying to get paid by the Eagles so we could be able to at least exist and keep living. Right now we're at the verge where -- no offense -- you're going to lose the contractor who's invested 15 years of his life building his company here. Little by little we were structured to fail. We were taken and said to, we're going to look out for you. We're going to work with you. We're going to take care of you, and at the end of the day we're out to hang. It's an oxymoron.

Mr. Matos

That's why I'm angry and 32 01/27/05 - PARKS - RES. 040912 that's why I'm here today. We're talking about trying to develop the community.

Councilman Mariano

He still lives in Norris Square.

Mr. Matos

He lives right in my neighborhood. He's in my neighborhood. He employs people from the neighborhood. I'm telling you, it's an economic factor that has affected the whole entire community, whether people want to believe that or not. He is an asset to our community because he employs people from the community. He is a legitimate guy who's trying to make legitimate money and hire people and give people an opportunity that other people aren't willing to do. He's done that. And because of somebody's inability to get this thing straightened out, they've taken a legitimate, hard-working brother -- because he also contributes to the community in other ways. The thing is, like, you have people who do business. If somebody in the community needs a little help with their house because their heater broke or something broke, you 33 01/27/05 - PARKS - RES. 040912 call a guy like Luis up and you say, come here, Papi. You're benefiting from the community. We need a little help here. This woman needs a water heater or whatever. But we're losing all that, the good that we have, because of somebody's greed not to settle on a debt that's been paid. It's been paid. For the life of me I don't understand it. I can't figure this out. They're hurting. They're hurting my people. They're hurting them. We can't allow that to continue to happen. You got Joe Blow over who's got a wife -- (Applause.)

Mr. Matos

-- who's got a million dollar business and she's considered a minority because she's a woman. Nothing against women, my God, but I'm sure we have a lot of poor that can qualify for those kinds of things.

Councilman Mariano

You're saying that Luis is a legitimate minority contractor. He's from the neighborhood. He's done everything. 34 01/27/05 - PARKS - RES. 040912

Mr. Matos

There are legitimate women in our community, legitimate women, poor, black, Hispanic, white female that could qualify for these jobs but don't have the financial ability that other women have because of their husbands or their brothers or whomever to set them up in business. So the real women that should be getting these jobs are being deprived of those opportunities. That's what I'm trying to say.

Councilman Mariano

Thank you, Mr. Matos. I want to thank the Councilman and Councilwoman. I've been monopolizing this. They're going to have things to say. No 17 matter how long this takes, we're going to find out where this road takes us. If it's the Eagles, it's the Eagles. If it's not the Eagles, we want everybody to know that. If it's the people in the middle, if it's Turner, we're going to find that out. We have some powers here. We're going to exercise those powers to make sure. I've been around this business since 35 01/27/05 - PARKS - RES. 040912 I was years old. I know the game. I go up in business and I hook up with Carlos, and Carlos is a minority front. You're not a minority front. You are actually the kind of person that we should be fighting for here. We want white guys in business and women. That's why I stress that Carlos loves women. We know that. We just want to make sure that you have a chance to keep building and helping your community. Thanks for staying in the City in Norris Square. We're going to help you here as much as we can.

Mr. Cruz

Just one point, 16 Councilperson. 17 Turner Construction got this job 18 because of their size. They're one of the 19 largest construction management firms in the 20 country. They're a billion dollar organization. They have the financial resources to be able to do the right thing. They themselves have said, we all agreed that this money is due. What I can't understand for the life of me is, then if everybody 36 01/27/05 - PARKS - RES. 040912 agrees that that money is due, why don't they just cut it and then continue down the road, keep negotiating with the Eagles, and then they'll hash it out down the road? Why destroy me for months when it's always been 7 due? 8 I never lied about the amount. I 9 never lied about what we had done, where we 10 were at. It's like I'm being punished. It's 11 like I'm the sacrificial lamb. It's okay. I 12 mean, our 15th anniversary was last year and 13 I'm back to the stage I was 10 years ago in 14 capacity. That's sad, because we had gotten 15 to a point where we had evolved to be able to 16 make a difference, to be able to go out there 17 and become a GC and to be able to help our 18 people. I belong to the Contractors Roundtable Council. I've been an MBEC member for about 15 years. I believe in the cause. But if the powers that be just don't help us, I don't know where everything is going. Thank you.

Councilwoman Brown

Let me say that 37 01/27/05 - PARKS - RES. 040912 we will underscore and echo Councilman Rick Mariano's remarks. It's imperative that we get to the core of this. And it is not okay. You say it is okay. It is not okay that we have to have this kind of discussion months 7 later. We thank you for your testimony. 8

Mr. Cruz

Thank you, Councilwoman. 9 (Applause.) 10

Councilwoman Brown

We have a 11 sequence here. I have to now ask you to have 12 a seat. 13 Councilwoman Blackwell would like to 14 offer some remarks. 15

Councilwoman Blackwell

Thank you 16 very much. We are very happy to be at this 17 hearing and certainly to be one of the people 18 who signed on to this legislation and who joined Councilman Mariano sometime ago to make this press statement. Let me say that we want to say that we have worked with Cruz Construction and Luis Cruz for quite some time. We know of his commitment to his community. We know of the professionalism of his company, and we feel 38 01/27/05 - PARKS - RES. 040912 that it is absolutely unconscionable that any small company should have to come to us and continue to appeal over and over and over without their issue being revolved. It is so unfair. It reminds me -- I always go back to Lucien Blackwell -- when we started set-asides in the City. We're almost back where we started, and there's no reason for it. This is a City that's supposed to be about inclusion. Minorities make up a great part of this City, a great part of City Council, and it is absolutely unfair that Lou Cruz has to come to a hearing to try to get other contractors and other interested community people to come here so that he can get paid. I'm hoping that, Madam Chair and Mr. Chairman, that before our hearings end, that we will hear from the Eagles and find out just what we have a right to expect and try to resolve the issue of Lou Cruz and Cruz Construction Company and the others getting their money, getting paid. That's what it's all about. 39 01/27/05 - PARKS - RES. 040912

Councilwoman Brown

Thank you, Majority Leader. (Applause.)

Councilwoman Brown

We are going to hear from everyone. We ask that you respect the proceedings that we have underway. Every single person will get the opportunity to register their sentiments on the record. However, it's imperative that we do it in an orderly fashion. I have a script that I'm going to follow. I'm now going to ask State Representative Tommy Blackwell to please come forward because he is on a schedule, give him the opportunity to speak. You gentlemen will certainly have the opportunity, but I must do it in the order that has been presented. I would like to ask the former witness, Luis Cruz, to please come forward and just answer a question for clarification on the record for my colleague, Councilwoman Marian Tasco.

Councilwoman Tasco

Hi. How are 40 01/27/05 - PARKS - RES. 040912 you? I just want to be clear for the record of what the amount that's due in terms of the total amount of the contract. You were paid for the majority of the work. What is the balance due and what is that for? I'm not real clear about that.

Mr. Cruz

The balance due to us is $457,000. Now, that's Cruz AP Joint Venture that did the project. There's other contractors here that are owed substantially a lot more than that. But I can only speak for ourselves here.

Councilwoman Tasco

How much was your contract?

Mr. Cruz

Our contract was about $18 million.

Councilwoman Tasco

Okay. Was that a sufficient amount for you to do the work?

Mr. Cruz

If we would have gotten paid all our money, I'd be fine. You've got to understand, you grow with that amount. Remember, it was a joint venture, so my partner got some of it. We got some of it. Our company grew. We were one of 41 01/27/05 - PARKS - RES. 040912 Philly's top 100 in 2003. Our company grew a couple hundred percent like that. So what I had to do, I had to buy newer equipment. I had to upgrade our offices. I had to get more staff. There's a lot more money involved that. Now, all of a sudden, the job is done. You're out there looking for more work because you've got all these bodies to feed. You have all these notes to pay for and you're not getting paid.

Councilwoman Tasco

So this balance is to help keep you going until you go to the next job?

Mr. Cruz

That's correct.

Councilwoman Tasco

So the balance you are is the 400-some thousand dollars out of the $18 million contract?

Mr. Cruz

That's correct.

Councilwoman Tasco

Thank you. I just wanted to be clear on what the issue was.

Councilwoman Brown

And that has been since August '03, correct?

Mr. Cruz

That's correct.

Councilwoman Brown

Thank you for 42 01/27/05 - PARKS - RES. 040912 your testimony. Any other questions from Members of the Committee? (No response.)

Councilwoman Brown

Allow me to please recognize Councilman Frank DiCicco, who has joined us as these hearings. Thank you again. Please welcome State Representative Tommy Blackwell. Offer your remarks. (Applause.)

Mr. Blackwell

Good afternoon. I am State Representative Thomas W. Blackwell, IV. I'm here to offer my support and my comments for the minority contractors because, in essence, that's where I come from. We come from the same backgrounds. I, as a former chief negotiator for a union, it boggles my mind how you can have a contract consummated, hand shakes all around on it, and yet when you complete the job, everybody is satisfied but the people who actually did the work. That boggles my mind. 43 01/27/05 - PARKS - RES. 040912 I think in some ways when you have situations like this, you're not just looking at the contractors themselves. There are families involved here, people that they hire that they have to feed. (Applause.)

Mr. Blackwell

Now, I support the Eagles. I want to see them win just as much as anyone else. Probably more so because I was around last time and I suffered through that 27 to 10 loss. But let me say this to you: I watched my father for many, many years sit right here, second seat, fighting for the very same thing that we're here talking about today. It's a sin before God that this same question comes up again. I, for one, am sitting here thinking, they got state money, they got City money. They get money from everywhere. Big contractors. It seems to me, because of what's happened here, that there needs to be another clause in these contracts, that when a job is completed, if everyone is not paid, those 44 01/27/05 - PARKS - RES. 040912 primary contractors that are on the job do not get an opportunity to join another job where there is state money, City money or federal money until everyone is paid. (Applause.)

Mr. Blackwell

The only way minority contractors get another job is they have to put bids in. If they don't have the money to put bids in, they can't get the job. They won't even qualify to bid. I mean, you're not talking about people who did not complete their work. We're talking about the American dream here. You have primary contractors killing the American dream. And you know what you have? Modern day slave labor. This was done free because they haven't been paid. That's a sin before God. This is why a lot of minority contractors don't like to deal with the City or the state or any government because we don't protect them once they have the job done. Someone has to speak up for these people. I, for one, am going to do that. 45 01/27/05 - PARKS - RES. 040912 Because like I said, that's where I come from. I've negotiated many contracts that have affected lives of thousands, not only in the City and state, but across this country and some parts of this world. My union took very good care of me. I've been gone from them for years. They 9 call me, I'm going back. Because they gave me 10 a good living. These are good people. Remember, these same people have to pay the water bills that are going up. Their gas bills are going up. The electric bills are going up. If they do their part in trying to earn a living completing their jobs, why aren't they being paid? It's a simple question. I've done my job. Now pay me. If you hire me, I shouldn't have to wait until you to get paid in order for me to get paid. That's not the American way. I'll say this in closing, unless everyone is paid when a job is completed, those people involved do not get another contract. Thank you very much. 46 01/27/05 - PARKS - RES. 040912 (Applause.)

Councilwoman Brown

We thank you for your testimony and are just encouraged, delighted and thrilled to see the Blackwell tradition continue. Any questions from Members of the Committee? (No response.)

Councilwoman Brown

Thank you, Representative.

Mr. Blackwell

Thank you.

Councilwoman Brown

Next up we invite Mark Rosenberg, APG America. The panel will include Tom Cirignano of Hispanic Ventures. Paula Milbourne of Seal Tite Company. Please come to the witness table. We welcome you to these Committee hearings. As the sponsor of this resolution 21 has indicated, we do have a woman of color who seeks to participate in this world of construction as well, so we welcome you to these proceedings. (Applause.) 47 01/27/05 - PARKS - RES. 040912

Councilwoman Brown

We ask each of you to state your full names for the record and proceed with your testimony. We will hear all the testimony first and then we'll open it up to questions. Mark Rosenberg, APG.

Mr. Rosenberg

I'm Mark Rosenberg with APG America.

Ms. Milbourne

Paula Milbourne, Seal Tite Company, Inc.

Mr. Cirignano

Tom Cirignano, Hispanic Ventures, Inc.

Mr. Rosenberg

Thank you, Councilmembers. My name is Mark Rosenberg, as I just said. I'm chief operating officer of APG America, the subcontractor who did the glass and glazing work on the Philadelphia Eagles stadium, the project known as the Lincoln Financial Field. I'm privileged to have the opportunity to speak to you today on behalf of dozens of local subcontractors who performed work on the stadium and who are still owed millions of dollars for the work they completed in a skillful and timely manner 48 01/27/05 - PARKS - RES. 040912 more than months ago. The construction of Lincoln Financial Field was a process that spanned over four years and cost over $500 million, including a taxpayer subsidy of over $175 million, $85 million from the taxpayers from the State of Pennsylvania and $90 million from the taxpayers of the City of Philadelphia. The hard work of thousands of individuals produced a world-class stadium enjoyed by the Philadelphia Eagles and people from all over the region. But with those taxpayer subsidies came a reciprocal promise from the Eagles organization of new jobs, of new revenue for the City, of new and paying construction contracts for the local union contractors. As the Committee is aware, Kajima Urban Development, or KUD, was hired by the Philadelphia Eagles in 2001 as the stadium development company for the Lincoln Financial Field. Subsequently, KUD hired Turner Construction, Keating Building Corp. and the McKissack Group, collectively known as TKM, as 49 01/27/05 - PARKS - RES. 040912 the primary contractors to manage the construction. The subcontractors on whose behalf I speak to you today performed the actual construction work. We dug the holes. We poured the concrete. We erected the steel. We glazed the walls. We painted the walls. We laid the carpet and rolled out the grass. All of these subcontractors unfortunately have similar issues in getting paid. Based on the information collected today, the total sum due in owing subcontractors is in excess $54 million. Rather than parade each subcontractor up to make a statement for the record, we ask for your indulgence to hear a prepared summary of the common harm suffered. At this time I would like to read into the record and submit the following joint statement that has been signed by of the region's leading construction companies, a number of whom are minority-owned businesses and each of whom is still owed significant money on the Lincoln Financial Field project. The lack of payment has created real 50 01/27/05 - PARKS - RES. 040912 financial hardship for not only these companies, but for the people within these companies, people who have wives and husbands and children and mortgages and monthly bills to pay. This is real people's lives. If you will, I'll read that statement.

Councilwoman Brown

Yes, please.

Mr. Rosenberg

This is entitled, Subcontractors Joint Statement of Facts Concerning the Lincoln Financial Field Stadium Project. "Whereas the undersigned companies generally understand these facts to be true and correct based upon our knowledge and belief at this point in time. Whereas each of the undersigned companies, which are in total, collectively 20 the subcontractors, contracted with or received direction from joint venture, formed between Turner Construction Company, Keating Building Corporation and the McKissack Group, known as Turner/Keating Joint Venture in association with McKissack Group, TKM, or any 51 01/27/05 - PARKS - RES. 040912 of them, or contracted or received direction from the Philadelphia Eagles, Kajima Urban Development, or any of their respective related companies, agents, employees or servants or served as a subcontractor and performed and furnished certain work materials to construct the Lincoln Financial Field, located at 11th Street and Pattison Avenue in Philadelphia, Pennsylvania, known as the project. Whereas, despite many disruptions on the project, the subcontractors, many of which were local small businesses and minority contractors, expended extraordinary efforts and costs so as to allow the stadium to be substantially completed on schedule at least by August 2nd of 2003. Whereas, the stadium has been open for over 18 months and has generated significant revenue for the owner and reportedly has increased the value of the Eagles franchise by more than $200 million, yet the undersigned subcontractors have not been fully paid for the valuable work 52 01/27/05 - PARKS - RES. 040912 performed and materials furnished for the project. Whereas, funding for the stadium was derived in significant part from City and state taxpayers, and construction of the stadium was accomplished by the subcontractors through the dedicated effort of the local union labor. Whereas the subcontractors have suffered and continue to suffer substantial financial hardship as a result of failure to receive payment in full for materials and services provided under their respective contracts or at the direction of TKM, KUD or the Eagles. Whereas each subcontractor generally had the following common experiences on the project: Number one, throughout the course of the project the subcontractors expected that they would be provided accurate, detailed and sufficient information as to design of the project and the scheduling of the work so as to allow them to build the project in an orderly and efficient manner. However, many 53 01/27/05 - PARKS - RES. 040912 of the subcontractors were provided incomplete schedules and designs. As a result, numerous change orders and change directives were issued, all of which unnecessarily complicated the subcontractors' work and caused excessive and extra cost. Number two, to accommodate and meet the aggressive project completion timetable set by the Eagles, KUD and TKM, the subcontractors expended extraordinary efforts to keep up with all of the design changes and building scheduling problems. In spite of these problems, and as a direct result of the subcontractors' hard work, the stadium opened on schedule. Number three, in July 2003 the Eagles held numerous open houses attended by tens of thousands of people, and on August 3rd, 2003 the stadium held its first sporting event. The Eagles were able to use and enjoy the stadium for multiple uses, including soccer games, concerts, Eagles home games and other events. Nonetheless, to this day, the undersigned subcontractors have not been fully 54 01/27/05 - PARKS - RES. 040912 paid for contract retention on the base contract work for change orders provided on the project. These monies are due to the subcontractors. Number four, after the stadium opened, numerous lists were given to the subcontractors asking that the subcontractors perform additional task items outside the scope of the subcontractors' contracts.

Mr. Rosenberg

These lists were in many cases excessive, untimely and otherwise improper. For example, many of the subcontractors were directed to perform routine maintenance and repair work or to address damage due to normal wear and tear that was beyond the scope of the work required under the original contracts. Number five, many of the undersigned subcontractors were also assessed unsupported, untimely, excessive and otherwise improper back charges that were apparently being used to reduce or to avoid altogether the amounts owed to the subcontractors. For example, for some of these 55 01/27/05 - PARKS - RES. 040912 subcontractors, a significant amount of these back charges were assessed in the summer of 2004, nearly one year after the stadium opened. " 10 That's the end of the statement. 11 I'll just finish up with my general statement. 12

Councilwoman Brown

You're welcome 13 to. 14

Mr. Rosenberg

Thank you. 15 The subcontractors have been told 16 that their claims for money owed would be 17 addressed in a non-violent mediation scheduled 18 to occur sometime in early 2005. We obviously want our claims to be resolved as quickly as possible and are willing to participate in such mediation, but frankly are skeptical, given that the stadium has been open for more than 18 months, has been enjoyed by millions of fans, has been the home to two NFC seasons, home to two NFC championship games and the 56 01/27/05 - PARKS - RES. 040912 proud home of the NFC champions, the Eagles. All of this and the subcontractors still have not been paid. There were promises made by the state to help fund this stadium. Promises by the City to help fund this stadium. Promises by subcontractors to build a quality facility in a certain amount of time. All of these promises have been kept. On the other hand, there were promises made to the state and to the City and to the workers of this region by the Philadelphia Eagles organization. The promise to pay your obligations or to make certain that these payment obligations are addressed have gone largely ignored. These promises have either been broken or have yet to be kept. We hope by shining some sunlight on this problem that people of goodwill can see their way to honoring their promises. I thank you for your time.

Councilwoman Brown

Thank you, Mr. Rosenberg. Again, we will hear all of the 57 01/27/05 - PARKS - RES. 040912 testimony and then move to questions from Members of the Committee. Thank you. Ms. Paula Milbourne.

Ms. Milbourne

Good afternoon, Council. My name is Paula Milbourne, and I'm with the Seal Tite Company. We've been in business for approximately years. It was 9 started by my dad. He had another company 10 prior to that. My dad is 78 and he still kind 11 of works in the business, or keeps me working 12 anyway. 13 Seal-Tite and myself personally have 14 been hurt financially by not being paid for 15 the work that was completed and accepted by 16 TKM Management, et al, all those other folks, 17 BBJ and KUD. 18 To take on a project such as the 19 Eagles stadium was prestigious for our 20 company, a representative of the minority community. My concerns are that these construction management companies need minority participation. However, if Seal Tite had had any key insight or working knowledge that TKM did not pay their bills, Seal Tite 58 01/27/05 - PARKS - RES. 040912 would not have signed a contract to work on such a project. What it has caused is financial strife. Seal Tite's goal was to pay our trade payables and make a modest profit. However, this has been impossible. It is a shame that I have to beg for Seal Tite's money to try to stay in business at the same time. It appears that the one way to get rid of minority participation is to eliminate minority businesses. (Applause.)

Ms. Milbourne

Let me say this in closing: All of us, we do have bills, et cetera, et cetera, but the financial impact of not being paid, we can't go to the same resources or have the same lending institutions that many of the large companies have. I've gone to many meetings and things like that and I know that people have said the lending institutions here support minority businesses. They don't support construction businesses. I've been told that 59 01/27/05 - PARKS - RES. 040912 to my face. I've gone to Wharton SBDC, Temple SBDC. Don't believe any of that stuff. I've been through that. Put together financial packages. It don't work. I don't care how good your credit is. You ain't going to get the money. The bottom line is, is that for minorities being in business -- and that's where I'm speaking from -- it is very, very difficult for us not only to stay in business, but to maintain a status quo. I really plead to Council to really help us to get paid so that we can continue to be a viable part in the construction projects that are ongoing in the City. At this point, I'm at the same point as Luis Cruz. I've had to cut back and not be able to participate in many of the projects. Where am I going to get the funding? Can't get the funding, can't get paid. You can't show your PNL to a bank and it's negative. And that's what has happened. The other thing is that for many of us, yes, we have families and what have you, 60 01/27/05 - PARKS - RES. 040912 and I can really speak to this, that my mother is in a nursing home. Me not getting paid is impacting my keeping her in that nursing home. THE AUDIENCE: Turner has got to pay.

Councilwoman Brown

Please.

Ms. Milbourne

I would just like to say thank you for letting me say what I had to say. Thank you very much.

Councilwoman Brown

Again, as Councilman Rick Mariano pointed out, the purpose of these hearings is to get all the information on the record. Much work was done by his office to work this through and work this out prior to us coming here today. We're here. Every opportunity is to get all the information on the record so that, as Councilman Mariano said, we get to the core and center piece of this problem. So stay tuned for questions. I want you to pronounce your name so that I don't butcher it. Thank you.

Mr. Cirignano

Good afternoon, 61 01/27/05 - PARKS - RES. 040912 Members of City Council. My name is Tom Cirignano. I'm with the minority firm of Hispanic Ventures, and performed the painting at Lincoln Financial Field. I'm here today for one simple reason: To ask your help to get us paid. To ask you to look into the situation, to stop the finger pointing between the Eagles, KUD, TKM and get the people who did all the work and gave the Eagles, the City of Philadelphia, the fans a class A stadium done on time to get them paid. To us it seems simple. We had a contract. There were authorized, signed and approved changes. The work was satisfactorily performed, and then no money. It is not the case where we are being told it is an issue with the work or the paper trail, but we are told that TKM, KUD and the Eagles are having their own issues. That is not our problem. It has gone on long enough. We need to be paid. As a minority firm who has climbed the ladder for over 23 years, who has managed to miss the pitfalls, who has made personal 62 01/27/05 - PARKS - RES. 040912 and family sacrifices to get what we believe was a great honor, the painting of the stadium, dealing with Mrs. Lurie and the color changes, meeting the challenges of scheduling, putting on more manpower than ever before, in excess of a hundred men at crunch time, and then to be left hanging for hundreds of thousands of dollars is not right. For some contractors, they are no 11 longer, and it's no fault of their own. They could just not hang in any longer. For us it's a nightmare. The years of climbing the ladder, building relationships with banks, bonding companies, suppliers and the men has been seriously damaged. We are no longer looked at as favorably as we once we are. To say the least, it has taken the wind out of our sails. People need to be paid so they can take care of their responsibilities, to pay the benefits to the guy who broke his back and worked all kinds of hours so they can get what's rightfully theirs and their families. We respectfully ask for your help. We have 63 01/27/05 - PARKS - RES. 040912 hit a road block. We ask nothing more than what we deserve, to be paid. Thank you. (Applause.)

Councilwoman Brown

Hello. We love and need your enthusiasm, but we will have order. I started with Luis Cruz. His outstanding non-payment is $457,000. What is it for each of you so that we can keep a running record here? Mr. Rosenberg, the total unpaid as it stands, to your knowledge, is what?

Mr. Rosenberg

Currently $700,000.

Councilwoman Brown

And again, that commenced around August the 3rd, to your best knowledge?

Councilwoman Brown

Paula Milbourne?

Ms. Milbourne

$103,000.

Councilwoman Brown

$103,000. Approximately the same time?

Ms. Milbourne

The same time.

Councilwoman Brown

And Mr. 64 01/27/05 - PARKS - RES. 040912 Cirignano?

Mr. Cirignano

In excess of $650,000.

Councilwoman Brown

$650,000. Commencing also around the same time?

Councilwoman Brown

Thank you. Questions from Members of the Committee? Councilman Rick Mariano.

Councilman Mariano

Thank you, Councilwoman. $650,000? You must sleep well at night thinking about all that and paying your bills. I've met many of you before, in and out trying to work this out so we didn't have to go through this whole dog and pony show, but I guess that's what's going to happen. It is hard for us that don't do this every day. And as hard as it is, for people in here to be emotional, we understand that. The Councilwoman is doing a great job letting everybody being heard. 65 01/27/05 - PARKS - RES. 040912 I think, ma'am, when you started talking about your mother and how it affects the quality of life for the people that you are a caregiver for -- and there's stories probably from each one of these gentlemen on each side of you that they probably don't want to get into. When you started this process -- this is the same question I asked Mr. Cruz -- you never had any dealings with the Eagles personally, did you?

Ms. Milbourne

No. 14

Councilman Mariano

It was all through Turner?

Ms. Milbourne

Yes. We were certified by MBEC and MBEC recommended us and we signed with Turner.

Councilman Mariano

Your contracts -- again, this is another question I asked Mr. Cruz -- this is the basic contract. Are we talking about any extras like Cruz was talking about?

Ms. Milbourne

Basic contract.

Councilman Mariano

And you do 66 01/27/05 - PARKS - RES. 040912 what?

Ms. Milbourne

We do caulking and waterproofing. But we did the sealing work.

Councilman Mariano

His company puts the windows in and you seal them?

Ms. Milbourne

We sealed, yes.

Councilman Mariano

And he paints everywhere else that's not a window?

Ms. Milbourne

That's right.

Councilman Mariano

Through many color changes and scheme changes. We'll get to that later. So you met that same handsome guy hiding behind the pole over there, Hoffman --

Councilman Mariano

-- who signed your work orders, said everything was fine, come for the big pay day. You said you were into $103,000?

Councilman Mariano

You thought that was going to be the cherry at the end of this apple pie, this great American apple pie that you fought so hard by being -- you know, 67 01/27/05 - PARKS - RES. 040912 taking care of your mom and your dad and your being a woman of color and having a chance to get a piece of this economic pie, that's the piece you were going to use to build your business and advertise possibly, use the money. A lot of people who aren't in construction, it's not free to bid on jobs. It costs some money, and the bigger jobs, you have to get prints and draft things and things printed up, that costs money. You can't be an entrepreneur like one of my sons, you go around, you drop a flyer here and a flyer there about being a D.J. You have to have architects that are shielded and they have to know what they're drawing. It costs money to make money. You're to the point now where you're probably not going to be able to make any more money until this nightmare goes away. Am I correct?

Ms. Milbourne

That's correct. I think one of the biggest risks that all of us face, our subs, is reputation risk. I think 68 01/27/05 - PARKS - RES. 040912 that if you don't have your reputation to stand on, you don't have anything. I don't care how much money you have in the bank. We're all failing, and now we don't have the reputations that we so built up through the years. People don't look at us in the same light. Would you?

Councilman Mariano

No. I do get it. Councilman Rizzo whispered in my ear when you were speaking. He said, we tend to refer to this as the Linc because we tend to butcher things in Philadelphia with names. Lincoln Financial Stadium, maybe Lincoln Financial Group, who has a big reputation, that paid a lot of money to somebody -- it wasn't me and I don't think it was anybody at this table who has the naming rights for this thing -- might want to have something to say about their name being basically drug through the mud with a part of the community that we should be helping. I went to that game last week. That was a great game. It was a pride to know that 69 01/27/05 - PARKS - RES. 040912 my brother actually worked as an electrician on that stadium. He got paid. Because if he didn't get paid, he wouldn't have come back the next week. That's one of the good things of being a member of a union. You unfortunately pay those workers, and you have to pay them no matter what happens, even if you don't collect your money.

Ms. Milbourne

Exactly.

Councilman Mariano

I think Councilwoman Brown said it the best. State Representative Blackwell, it was an honor to hear him speak. We need to find out something here so that this never happens again. I will tell you, I'll be 50 years old in July. I was enamored being a Councilman my first four years. The Governor that was the then Mayor, at the end he had to push to build two stadiums. Sometimes I like to say things that aren't necessarily true, but I think if I keep saying them, they become true. I used to say, Mayor, we need to build two stadiums; one for the Phillies and one for the Eagles. Because we were briefed one time 70 01/27/05 - PARKS - RES. 040912 down at Senator Fumo's office -- Councilman DiCicco was with me -- with people from the Eagles. They made a whole lot of sense that they should build two stadiums just in the pure sense that you can't watch a football game the same way you watch baseball. At the end -- and Councilman DiCicco of course will speak for himself -- we were pushing for that. At the end of the Rendell Administration it looked like this was going to happen for two stadiums. It never quite happened. Then when the Street Administration came in, it came. And it's like yesterday to me. Again, I'm excited as a Councilman. But I'm in my second term and I'll think, oh, we're going to build stadiums. My brother, Luis Cruz, all these people are going to be getting jobs, and this is a good thing. Now, we're cherries in all this. Maybe Councilman Cohen will be here, but I won't be here for the new stadiums when they build new ones. So now I understand that we gave a lot of stuff away. One of my big 71 01/27/05 - PARKS - RES. 040912 things was, we should possibly name the whole complex Veterans Stadium Complex, Lincoln Financial. They got their money for Lincoln Financial. They got their money for Citizens Bank. That was the deal the Phillies and the Eagles made. We were happy to let that happen. We could argue all night that some Members of this Council wanted to put roofs on the old stadium, Veterans Stadium, while there were pipes leaking and rats running around. We didn't want that. We wanted that, but we gave the store away. I thought we should honor veterans by making sure that it was Veterans Stadium Complex. I was told specifically by then Solicitor Nelson Diaz. I wrote him a letter. I talked to him on the record, off the record. We negotiated that away too. So maybe next time -- and this is not being facetious -- there's not going to be a next time in my lifetime -- these stadiums better last. We have to make sure that you get your piece of this pie, no matter what happens 72 01/27/05 - PARKS - RES. 040912 here. Now, the way the process and the way that the Councilman has this set up, we're doing this on purpose. The reason we're taking the workers, we want to get to KUD after we talk to Turner and we want to talk to the Eagles last because the process is working up. It's coming from Luis Cruz and your group up to TKM, to KUD, to the Eagles. The buck doesn't move down. It moves up here. Again, I'm not blaming the Eagles. When it gets time for Mr. Banner and his associates to get up here, and Judge Lord and the lawyers, we need to have some answers to these questions. So if everyone sticks around and we get through this process through the auspice of the good Councilwoman, we're going to find out just why you didn't get paid, or we'll just keep having hearings and hearings and hearings. I will tell you, a lot of these guys over here wanted to picket that game last weekend. We asked them not to picket. I said, look, if you are going to picket, I'll 73 01/27/05 - PARKS - RES. 040912 be there with you. I'll stand there with you because I love you and it's the right thing to do, but let's let the Eagles have this day. Let's let the Eagles have their championship. I was so sure they were going to smoke Atlanta. I was positive. Just as I'm sure they're going to beat New England. I'm positive.

Councilman Mariano

But Carlos Matos, Luis Cruz and the three people up here, I don't think either of you can afford to go to Jacksonville now to do any picketing down there. But maybe we'll just hop in that Crown Victoria I have and we'll all go down. We can fit six people in that and we'll split the gas money. We've got to figure this out. We're serious. Let's figure this out. Thank you for your help. )

Councilwoman Brown

I have been very remiss. I failed to acknowledge the presence of Councilman Jack Kelly, who's been hearing the testimony at least for the last half hour. Please recognize Councilman Jack 74 01/27/05 - PARKS - RES. 040912 Kelly. (Applause.)

Councilwoman Brown

Any other questions from Members of the Committee? (No response.)

Councilwoman Brown

We thank you very, very much for your testimony. I'll say again for the record, Councilman Rick Mariano did all that he could do so that we would not have to get to this juncture. It's unfortunate that it's redundant because we've heard like stories. I've heard them for the past five years. The purpose of the hearing is to get everything on the record and hear from all sides so that we can move to a resolution 18 that's a win-win for all parties involved. Thank you for your testimony.

Councilman Mariano

Can I ask just one question, something I forgot? Did you guys reduce the price of the money you would have took in order to settle? Did anybody say, look, instead of taking $600,000 dollars, I'll take $500? Did anybody 75 01/27/05 - PARKS - RES. 040912 do anything like that out of you three?

Ms. Milbourne

Not me.

Mr. Cirignano

No. It didn't get to that point.

Mr. Rosenberg

Unfortunately, as you know, in construction that occurs. For ourselves, we'd be thrilled if that process started to take place.

Councilman Mariano

Did TKM or KUD or the Eagles or anybody ask you to do that?

Mr. Rosenberg

We were never offered to settle it out with real money.

Councilman Mariano

What are they going to give you, Eagles hats? What are you getting? What else could they give you?