COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE COMMITTEE ON PUBLIC PROPERTY AND PUBLIC WORKS - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, June 2, 1999 1:05 p.m. - - - BILL 990178 - Authorizing the Director of Commerce and the Commissioner of Public Property to purchase for use by the Philadelphia International Airport a certain parcel of property owned by the Commonwealth of Pennsylvania, through its Department of General Services, located at 8350 Enterprise Avenue, Philadelphia, Pennsylvania, under certain terms and conditions. PRESENT: COUNCILWOMAN AUGUSTA A. CLARK, Chair COUNCILMAN JAMES F. KENNEY COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 6/2/99 PUB. PROP. & PUB. WORKS - 990178 I N D E X Alfred Testa, Jr. . . . . . . . . . . . . . . 4 Director of Aviation Philadelphia International Airport Ken Sipos, Department of Public Property . . 14 3 6/2/99 PUB. PROP. & PUB. WORKS - 990178 P R O C E E D I N G S
Good afternoon, ladies and gentlemen. The Committee on Public Property and Public Works is now called to session. We appreciate your patience and apologize for keeping you waiting. It is that period in the Council schedule when there are so many meetings, and we thank you for your patience. Would the committee clerk please read the title of Bill No. 990718.
Bill No. 990178, an ordinance authorizing the Director of Commerce and the Commissioner of Public Property to purchase for use by the Philadelphia International Airport a certain parcel of property owned by the Commonwealth of Pennsylvania, through its Department of General Services, located at 8350 Enterprise Avenue, Philadelphia, Pennsylvania, under certain terms and conditions.
The Chair notes that there are present at this hearing a quorum. Specifically, there is Councilman Frank Rizzo; myself, Augusta Clark, Chair; Councilwoman Donna Miller; Councilman James Kenney; and Councilman 4 6/2/99 PUB. PROP. & PUB. WORKS - 990178 Michael Nutter. Thank you very much. (Alfred Testa comes forward.)
Welcome to City Council. Please introduce yourself for the record, spell your last name for the benefit of the stenographer, and then proceed with your testimony.
Thank you. My name is Alfred Testa, Jr., T-E-S-T-A. I'm the Director of Aviation now for seven weeks -- I'm sorry, this is the eighth week in the City of Philadelphia.
All right. Mr. Testa, you're welcome to Philadelphia.
Thank you. It's been a wonderful experience so far. If it keeps up like this, I'm going to be one of the biggest boosters this city has ever had.
Thank you. I am here today to testify in support of Bill No. 990178. 5 6/2/99 PUB. PROP. & PUB. WORKS - 990178 Activity volumes at Philadelphia International Airport continue to grow at a record pace. In 1997 Philadelphia, achieved a 16.2 percent increase in passenger enplanements, the fastest rate of growth of all major hub U.S. airports, followed by an percent last year. 8 And, in fact, part of the package that we have passed out to you has a little history of enplanement growth, operation growth, and the economic impact of the Airport on the City. That $6-billion-a-year economic impact is actually a couple of years old, and we're trying to update that right now. It might be closer to $7 billion or $8 billion a year. On the other hand, Philadelphia, even though it's one of the fastest-growing in the country, is one of the smallest major airports, consisting only of 2200 acres. Taken together, these factors underscore the need for Philadelphia to expand its boundaries to accommodate future Airport development. Passage of Bill No. 990178 will authorize the City, through its Director of Commerce and Commissioner of Public Property, to 6 6/2/99 PUB. PROP. & PUB. WORKS - 990178 acquire real property located adjacent to the Philadelphia Airport, and I have included a small reproduction of a photograph that shows circled in red, yes -- and I will point it out on the large map as soon as I can, adjacent to Philadelphia Airport, at 8350 Enterprise Avenue. This 18.8-acre parcel of land, owned by the Commonwealth of Philadelphia (sic.) through its Department of General Services, contains a one-story warehouse utilized by the Liquor Control Board for the storage and distribution of alcoholic beverages. I also brought with me an amendment to the ordinance which provides that as compensation for the sale of the property, the Commonwealth will receive $5.4 million. On March 30, 1999 the scheduled airlines formally approved acquisition of the property for the above-stated compensation. This airline approval enables the City to fund the acquisition of the property with Airport Revenue Bond proceeds, the annual debt service of which will be payable by the City's Aviation Fund and has no impact on the City's 7 6/2/99 PUB. PROP. & PUB. WORKS - 990178 General Fund. Closing for the sale must occur no 3 later than June 15, 1999. And, therefore, I respectfully request your immediate consideration. I want to go to the -- if you don't mind --
Thank you. (Mr. Testa moves to enlarged map on easel of Airport area.)
This is Philadelphia International Airport generally east to west. And this is the property in question. You have a reproduction of about this area in black and white. Unfortunately, we don't have a color copier at the Airport, so what you have is a copy of this photograph. By the way, this photograph is brand-new, it just got taken last month from an arterial photograph. And it's this piece of property right here that is the Liquor Control Board building and parking area in this general direction. As you can see, this is the new runway that is currently being built and is currently a 8 6/2/99 PUB. PROP. & PUB. WORKS - 990178 year ahead of schedule, well within budget. And this runway will help relieve some of the congestion on the other two runways, which will be used for commuters. Right now, Atlantic Aviation is about to build, or is in the process of building, two brand-new hangar complexes -- I think it's a $14 million complex, am I right? Yes, $14 million complex that is for General Aviation Corporate Aircraft, right here next to the new runway system, and some corporate hangars that will take care of the convention next year. And this property is right adjacent to where we're developing this. We already own some of the parcels in here, and this would make it contiguous to the Airport parcel. As a way of explanation, this particular property is owned by the State and does not contribute any tax dollars, so we're not taking any taxable property off the rolls. And, in fact, we're working with the current occupier of that building to try to get them into other property in Philadelphia, and it looks very good. 9 6/2/99 PUB. PROP. & PUB. WORKS - 990178 And that will become a taxable piece of property.
Thank you, sir. I do have a few questions. Has the Airport already issued revenue bonds sufficient to close the sale by June 15th?
Are there any potential or existing environmental hazard liability associated with the proposed site? And if so, would you describe it.
We have had an environmental evaluation of the site, and there is no great environmental hazards. But the deal between the City and the State will include a reserve clause for remediation of the site.
Will you -- will the City, the Airport, and other City agencies be indemnified and held harmless against any such liability that might be discovered?
How much longer do 10 6/2/99 PUB. PROP. & PUB. WORKS - 990178 expect the volume of activity at the Airport to continue to grow? And explain in economic terms how that benefits the City.
Right now, there are 14,887 people working at the Airport. That's the number of badges we have outstanding. That's grown -- I know about the number 'cause we just asked this morning. That number is continually growing. Those people who have jobs at the Airport mostly are from the area. How many are from Philadelphia, I can't tell you exactly. But those people who have jobs are able now to take care of their families, pay their taxes, and spend money in the City. This particular airport generates about a 6 to $8 billion a year economic impact on the City. Besides those 14,800 employees, there are businesses that pay taxes to the City and to the State. There are ancillary businesses, such as all the hotel development that's taking place around the Airport, that also pay taxes and hire people, which are not included in that 14,000, by the way. And there are also businesses in the 11 6/2/99 PUB. PROP. & PUB. WORKS - 990178 area that supply the necessary services to the Airport such as -- even down to paper products for use in bathrooms and napkins and whatever. All of that contributes to the economic benefit that this airport has. How long do I consider it will keep growing? I don't think -- and this is strictly based on numbers given by the FAA now. I don't think we can continually grow at double-digit numbers because double digits on million 12 passengers mean 5 million, 3 million kinds of 13 growth rates. I'm not sure we can sustain that. 14 But I think that Philadelphia, given 15 the economy, given the size of the market -- what 16 is, it the fourth largest concentration 17 metropolitan district in the country? That can 18 sustain quite a bit of growth, and one of the 19 areas we're growing in quite substantially is 20 international passengers. And I would think that 21 growth will continue as the offerings to the 22 people of Philadelphia and in the Delaware Valley 23 continue. 24
Are there any 25 questions from anybody? Mr. Rizzo? 12 6/2/99 PUB. PROP. & PUB. WORKS - 990178
I'd like to go back to the building that your contemplating purchasing from the State of Pennsylvania.
Has the State of Pennsylvania -- are they the only tenant in there, this Liquor Control operation, or are there other tenants?
I think the Liquor Control Board -- well, the GSA owns and controls the building itself. The tenant of that building would be a contractor to the LCB for the distribution and storage of liquor and liquor by-products, but that's --
Not that that's something you need to know, but it's a curiosity question for me.
You indicated in your testimony that, hopefully, that that contractor would reposition himself within the City of Philadelphia. Do you know if the 13 6/2/99 PUB. PROP. & PUB. WORKS - 990178 Department of Commerce and the State have agreed on a location so hopefully we can work at making that happen?
We're meeting about ten minutes ago with them to talk about the two possible relocation sites both within the City of Philadelphia: one through a PIDC kind of building, of a brand-new building; and one on a site that already has a building. But they have to stay within the City of Philadelphia because of the Liquor Control Board's requirement because of their liquor distribution within the City of Philadelphia.
I would appreciate your keeping me posted on that because as a member of -- just keep me posted.
Okay. Well, I thank you very much. We have one amendment to this bill. Would you propose that amendment.
First, are there any other persons here who wish to be heard to speak in favor or against this proposal? (Ken Sipos comes forward.)
Good afternoon, Madam Chairwoman, members of the committee. My name is Ken Sipos, representing the Department of Public Property. Public Property is in favor of this, the passage of this bill and the amendment. And I respectfully ask that the rules of committee be 15 6/2/99 PUB. PROP. & PUB. WORKS - 990178 suspended so that this bill could be reported out and read at the second reading -- acted on at the second reading.
I'm sorry. Given my newness, I forgot to ask for a suspension of the rules.
Are there any other persons in the room who wish to be heard to speak in favor of or against Bill No. 990178? (No response.)
There being none, I'll entertain a motion that this public hearing be closed and we go into public session.
All in favor, aye? 16 6/2/99 PUB. PROP. & PUB. WORKS - Pub. Meeting
Okay, now this committee is in the public session. And Madam Blackwell has an amendment to the bill.
The proposed amendment to Bill No. 990178, we propose to amend this bill, amend Section 1(b) of the bill to read in its entirety as follows: (b) The purchase price shall not exceed $5.4 million.
Thank you. Are there any other amendments to the bill? (No response.)
Madam Chair, I move that the amendment to Bill 990178 be accepted as read. (Duly seconded.)
All in favor? Opposes? Bill No. 990178 has been amended. Now I'll entertain a motion for the entire bill to be reported out as amended.
Madam Chair, I 17 6/2/99 PUB. PROP. & PUB. WORKS - Pub. Meeting move that Bill 990178 be reported out of committee as amended with a favorable recommendation and also for a suspension of the rules so that it may be considered at our next Council session.
All in favor? Opposed? It has been properly moved and seconded that Bill No. 990178, as amended, be reported out of this committee with a favorable recommendation, and that the rules of Council be suspended so as to permit first reading at the next stated session of Council. There being no further business for this committee, this committee is now adjourned. Thank you, I appreciate it. (Adjourned at 1:15 a.m.) - - - 18 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, June 2, 1999, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE ON PUBLIC PROPERTY & PUBLIC WORKS BILL NO. 990178 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter