All right, very good. It's needed it badly for a long, long time. The restaurants, a couple of them that are on Walnut Street, just east of 13th Street, Portofino's, is one very favorite one of mine from many, many years. And they've always complained that they've been frightened going out at night and that nobody ever comes in for the second meal. They only sell out one time during the evening. And I'm delighted to see this coming.
Thank you. And it's truly the tear in the fabric of Center City. And with Councilman DiCicco's vision and support, we'll be able to repair that tear and make it a place that we'll all be excited about.
Very good. Thank you very much. Thank you, Madam Chair.
Thank you. Are there any other questions? Councilman Clarke, I know you've had your light on for quite some time. I assume that your questions 75 11/17/99 WHOLE - 990683 were answered?
Yeah, I probably could do it at a later date. I just wanted to ask a question about the discrepancy in the current square footage of 370,000, and you anticipate developing 80,000 feet of residential. How does that work?
Councilman, I'll try to answer that. We said there was 370,000 square feet of vacant space in the area. Then we said all that will be improved, plus there's 80,000 square feet of new residential that will be added to the area. So it's 370,000, plus 80,000.
Madam President, I just want to clarify one thing while Mr. Goldman's here. I appreciate his compliment to me and my colleagues at PIDC, but I must state -- and I appreciate very much that he's agreed now to reduce the use-and-occupancy tax that will be used for the TIF fund by approximately, by my rough calculation, over the 20 years by $1.6 million. But for the record, PIDC is offering no 76 11/17/99 WHOLE - 990683 replacement dollars for that, and Mr. Goldman will have to find private debt or equity to replace that, and they were not dollars coming from PIDC.
I'm aware of it, but I will be knocking on his door on a regular basis -- and everybody else's door on a regular basis to try to help the gap. But with or without it, worse-case scenario, if we do not get it, I think that there's enough here for us to be able to go and proceed and make our plans realities.
Thank you very much, Mr. Goldman. Are there any other questions or comments from members of the committee? (No further questions.)
Do we have anyone else to testify on this bill? (No response.)
We will now consider Bill No. 990685 the Gateway TIF. Mr. Fina, what are the taxes that you 77 11/17/99 WHOLE - 990685 are proposing to TIF?
In this particular project, Madam President, we are TIF-ing property taxes in the 1 percent sales tax and not use-and-occupancy tax.
Who owns the land that the development will be on? And at the end of the lease period, who will own the improvement?
Well, the land is owned by PennDOT. It is leased to the Philadelphia Parking Authority and subleased to the Realen Group that I mentioned as the developer entity with its partner. At the end of the term of the lease, if it's not renewed, PennDOT will own the improvements, that is correct. But that's a long-term lease that all expectations are that it will be renewed.
It's 99 years at this point. That's what was entered into, so it's a substantial lease. Much like we deal with Penn's 78 11/17/99 WHOLE - 990685 Landing, all the property along Penn's Landing and the waterfront has 99-year leases, with the expectations of being able to renew them from the estate, and some time long after I'm not involved.
Long after any of us are involved. Are there any other questions from members of the committee?
What is the (unintelligible) that the hotels are built in such large numbers for the purpose of creating a demand, that we then have to build an extension to the Convention Center in order to fill the hotels. And then, of course, when we do that, we then have a demand for more hotels. What is the truth, if any, to that scenario?
Well, let me let me respond that to some of it, I don't think that's a negative scenario, but I don't believe that's the scenario that we are promulgating here. What we are proposing is that this 79 11/17/99 WHOLE - 990685 hotel has a market niche that is not being met presently. It's at a location in the City where there's not another hotel, other than the Wyndham Franklin Plaza, but the Wyndham Franklin Plaza's at a different price range than this hotel. This hotel can be seen and be recognized when someone's driving into Philadelphia along 676, which you either come from I-95 or from the expressway. But as far as creating more hotel rooms, let me go back to your statement about the Convention Center. There are plans proposed to expand the Convention Center today not because of the hotel rooms that we have but because of the demand for the Convention Center and for the Convention Center to stay competitive with other expansions of convention centers in other cities. While we have a unique and very successful Convention Center and I believe that this hotel will support the demand now, but also, when that is expanded, which I hope it will be -- in fact, there's a meeting going on right now with a committee to talk the potential expansion of the Convention Center, and that may take place in the near future. 80 11/17/99 WHOLE - 990685
Mm-hmm. Would you agree that it costs the taxpayers of Philadelphia about somewhere between 35 to $50 million a year to pay for the cost of the Convention Center?
I'm not familiar with the figure, but the more hotel rooms that are occupied, the more taxes are charged, and then that much less comes out of the City Operating Fund to cover the operating losses of the Convention Center.
But I think that when all the books are crossed and all the figures straightened out, that it costs the City of Philadelphia a minimum of $35 million a year.
I can't comment to that number, I'm not privy to that information. I can tell you that the more hotel rooms, the more taxes, and that way, the more revenue that is paid prior to the City paying anything, the more revenue that goes directly to the Convention Center.
All right, I'm just very concerned. It's now a number of years that the Convention Center has been operating, and I 81 11/17/99 WHOLE - 990685 just note that caution, that this may very well be a good development, and I hope to see that the hotel rooms stay steadily filled, with at least 70 percent of the rate, which, I understand, is the comfort rate. You have no comment on that?
We can talk forever, and I'd be happy to do it because I love what I do, and I enjoy your perspective. But I'll be happy to answer any question that you may have.
Thank you. The Chair recognizes Councilman Clarke.
Thank you, Madam Chair. Mr. Fina, this particular project, my understanding, will provide a spin-off to the Parking Authority's 40 percent of net revenue?
That's correct. The agreement with the Realen Development entity is 82 11/17/99 WHOLE - 990685 that 40 percent of the net revenue presently from the garage and parking lot will -- inures to the benefit of the Parking Authority. And any new development, 40 percent of the revenue will inure to the benefit of the Parking Authority. And the Parking Authority splits some of that with the Commonwealth of Pennsylvania, but as you're probably aware, any excess revenue in the Parking Authority, which, I understand, are millions of dollars a year, is transferred to the City, to the City's General Fund. So the Parking Authority basically provides net revenue to the City, and this project would, in turn, provide net revenue to the City of Philadelphia.
So we're estimating that this particular revenue will be surplus to the Parking Authority and not used for its current administrative functions and operational functions.
I can't tell you what the details are, whether these have been allocated for certain activities, but I would generally say that's the case because even if this was targeted 83 11/17/99 WHOLE - 990685 for something at the Parking Authority, that would mean that other revenue that they currently receive would be freed, then would be transferred to the City. So it becomes all fungible, the dollars. So to answer your question, yeah, this is excess revenue, or additional revenue to the Parking Authority, which should increase the excess revenue that they have, that is then transferred to the City.
To the City. And theoretically, because this is not a current revenue in the City's coffers, that theoretically, this money could then be transferred to the Stimulus Fund.
I can't speak for -- I mean, that's something that City Council and the Administration negotiate, Councilman. And I won't -- theoretically, we could propose any number of things, but yeah, theoretically, this is new additional revenue to the City.
Thank you. 84 11/17/99 WHOLE - 990685 Are there any other questions from medication of the committee? (No further questions.)
Do we have anyone else to testify on this bill? (No response.)
Yeah. Not on this -- well, going back to the 13th Street Passage, we had proposed that 75 percent of the use-and-occupancy be TIF-ed in the project plan. We could either amend the project plan here to say that it is now 50 percent of the revenue; therefore, as I mentioned, reducing that to 1.6 million over the 20-year term, or we could keep it at 75 percent and then, under agreement with the developer and the City Finance Department, state that we will only utilize 50 percent of the revenue up to that level that we projected in the project plan. And whatever is legally appropriate, I would say we would do -- not to take anything away from the negotiations. If we can't amend it here, then I would 85 11/17/99 WHOLE - 990685 say we amend it as proposed. If for some reason, that prohibits us from doing that, then we will agree in a contract with the developer and the City finance on the School Board that only 50 percent of use-and-occupancy tax would be utilized. We can do the former position first and then the latter one, if we can't do the former one.
I believe Councilman Nutter and Councilman DiCicco will have to discuss this.
Well, I'd move the amendment, if we have to do that. I mean, we can do that today because I want to move this bill 17 today. And if that's the more expedient way of doing that, then I would offer the amendment.
You're welcome. Is there anyone else to testify on any 86 11/17/99 WHOLE - PUBLIC MEETING of the bills that we have heard? (No response.)
Seeing none this will conclude the public meeting. - - -
We will now go close our public hearing and go into our public meeting. The Chair recognizes Councilman DiCicco regarding Bill No. 990680.
Thank you, Madam Chair. I move that Bill No. 990680 be reported out of this committee with a favorable recommendation and that the rules of Council be suspended --
No. I'm sorry, we do not suspend the rules. We will not suspend the rules on any of these bills since they are TIFs, and they have a three-week wait.
Okay. I will move that Bill No. 990680 be reported out of this committee with a favorable recommendation. (Duly seconded.)
It has been 87 11/17/99 WHOLE - PUBLIC MEETING moved and properly seconded that Bill No. 990680 be reported out of committee with a favorable recommendation. All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion is carried. The Chair recognizes Councilman DiCicco regarding Bill No. 990681.
Thank you, Madam Chair. I move that Bill No. 990861 be reported out of this committee with a favorable recommendation. (Duly seconded.)
It has been moved and properly seconded that Bill No. 990681 be reported out of committee with a favorable recommendation. All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion is 88 11/17/99 WHOLE - PUBLIC MEETING carried. The 13th Street TIF is also your bill, Mr. DiCicco?
The Chair recognizes Councilman DiCicco regarding Bill No. 8 990683. You've really been quite busy.
Tell me about it. I need to do the amendment right now; am I correct?
I move that Bill 14 No. 990683 be amended so as to -- I'm not sure what page we're on here. Is it in the language of the bill? To amend the project plan to the effect that the use-and-occupancy percentage be reduced from 75 percent to 50 percent. (Duly seconded.)
All those in favor of the adoption of that amendment will --
Excuse me, Madam 89 11/17/99 WHOLE - PUBLIC MEETING President. Before we go any further, Mr. Fina is giving me some additional language.
Mr. Fina, why don't you take the witness table and then maybe you could read the amendments as proposed. (Mr. Fina comes forward.)
The first amendment, as Councilman DiCicco's has proposed, is to amend the project plan to reduce the use-and-occupancy taxes proposed generating to the TIF fund from 75 percent to 50 percent, and then it's capped at that 50 percent level, as in the project plan. The second amendment would be to change the legal description that's in the ordinance that I provided to staff of Council earlier. I will not read that because that could become a record, and it is on file with the Chief Clerk. It's changing the legal description as an amendment to Bill No. 990683. If need be, I can read the --
I don't think that's necessary. Please make certain that the stenographer gets a copy of that.
Then the third amendment is 90 11/17/99 WHOLE - PUBLIC MEETING to change the amount of the TIF note from the $15.5 million that appears on the chart on of the project plan to $8 million. Those are the three amendments.
Thank you. The Chair recognizes Councilman DiCicco.
Thank you, Madam Chair. I move that Bill No. 990683 --
No, let's move for the adoption of the amendment first, please.
I move for the adoption of the amendments to Bill No. 990683, as described by Bob Fina. (Duly seconded.)
It has been moved and properly seconded that the amendments read by Mr. Fina be adopted. All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion is 91 11/17/99 WHOLE - PUBLIC MEETING carried. The Chair recognizes Councilman DiCicco.
Thank you, Madam Chair. I move that Bill 990683, as amended, be reported out of this committee with a favorable recommendation. (Duly seconded.)
It has been moved and properly seconded that Bill No. 990683 be reported out of committee with a favorable recommendation, as amended. All in favor will signify by saying aye. Those opposed? The ayes have it and the motion is carried. The Chair recognizes Councilman Clarke.
Thank you, Madam Chair. I move that Bill No. 990685 be reported out of committee with a favorable recommendation. (Duly seconded.)
It has been 92 11/17/99 WHOLE - PUBLIC MEETING moved and properly seconded that Bill No. 990685 be reported out of committee with a favorable recommendation. All those in favor will signify by saying aye. Those opposed? The ayes have it and the motion is carried. This concludes the public meeting of the Committee of the Whole. Thank you all very much for your patience. (Adjourned at 12:24 p.m.) - - - 93 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, November 17, 1999, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE OF THE WHOLE BILL NO.'S 990680, 990681, 990683, 990685 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter