COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE Room 400, City Hall Philadelphia, Pennsylvania Tuesday, November 12, 2024 10:25 a.m. PRESENT: COUNCIL PRESIDENT KENYATTA JOHNSON COUNCILWOMAN NINA AHMAD COUNCILWOMAN CINDY BASS COUNCILWOMAN KENDRA BROOKS COUNCILMAN MICHAEL DRISCOLL COUNCILWOMAN JAMIE GAUTHIER COUNCILWOMAN KATHERINE GILMORE RICHARDSON COUNCILMAN JIM HARRITY COUNCILMAN CURTIS J. JONES, JR. COUNCILWOMAN RUE LANDAU COUNCILWOMAN QUETCY M. LOZADA COUNCILMAN NICOLAS O'ROURKE COUNCILMAN ANTHONY PHILLIPS COUNCILMAN MARK SQUILLA COUNCILMAN ISAIAH THOMAS COUNCILMAN JEFFREY YOUNG, JR. BILLS: 240966, 240967, 240968, 240969, 240970, 240971, 240972, 240973 - - -
This is the public Committee of the Whole regarding Bill Nos. 240966, 240967, 240968, 240969, 240970, 240971, 240972 and 240973. I want to thank all of you for being here today and welcome you to City Council's Committee of the Whole. Mr. Christmas, would you please call the roll and take attendance.
Present. Thank you, Mr. Christmas. A quorum of the Committee is present and this hearing is now called to order. Mr. Christmas, will you please read the titles of the bills.
P. (the "76ers"), or another entity affiliated with the 76ers, under which ArenaCo or other 76ers related entity would sublease the Arena Site and cause an arena to be constructed on it, including a multi-purpose sports and entertainment facility and ancillary, accessory, and related amenities, improvements, and infrastructure (the "Arena") and agree to other related conditions; (5) upon the expiration or termination of the Sublease or other circumstances set forth in the Sublease, convey fee simple title to the Arena Site to PAID for disposition to ArenaCo; (6) grant, accept, amend, relocate and extinguish easements, agreements, conditions, covenants and restrictions encumbering or benefiting the Arena Site and any City owned property adjacent to the Arena Site for the benefit of the Arena Site to facilitate construction and operation of the Arena; (7) enter into a direct operating covenants agreement among the 76ers, PAID and the City, under which the 76ers agree to play substantially all of their regular season and playoff home games in the Arena; and (8) take all actions necessary and appropriate to accomplish the intent and purpose of this Ordinance; all under certain terms and conditions. Bill No. 240967, authorizing and approving the execution and delivery of a Service Agreement between the City of Philadelphia and the Philadelphia Authority for Industrial Development relating to the provision by the Philadelphia Authority for Industrial Development of certain project-related services to promote, among other things, the growth and expansion of business, commerce and tourism within the City of Philadelphia in connection with the development of a multi-purpose sports and entertainment facility, including an arena to accommodate National Basketball Association games, and family entertainment, community, retail and other uses; authorizing and approving the obligation of the City of Philadelphia to pay in full when due the Service Fee and other amounts payable under the Service Agreement and covenanting to make necessary appropriations for such purposes; and authorizing City officials to take necessary or appropriate actions to accomplish the intent and purpose of the ordinance, all under certain terms and conditions. Bill No. 240968, authorizing the revision of lines and grades on a portion of City Plan No. 307 by striking from the City Plan and vacating Filbert Street from 10th Street to 11th Street, under certain terms and conditions. Bill No. 240969, authorizing the revision of lines and grades on a portion of City Plan No. 307 by striking from the City Plan and vacating certain aerial portions of 10th Street between Market Street and Filbert Street, under certain terms and conditions. Bill No. 240970, authorizing CBL Arena, LLC. and its successor(s) in interest to construct, own, and maintain various right of way encroachments in the vicinity of 1001-19 Market Street, 1025 Market Street and 1001-25 Filbert Street, Philadelphia, PA 19107, under certain terms and conditions. Bill No. 240971, amending Title 14 of the Philadelphia Code, entitled Zoning and Planning, by amending certain definitions relating to signs; creating an "Arena Area" within the "/CTR, Center City Overlay District" overlay; and making related changes, including a master plan requirement and changes to accessory sign controls; all in connection with zoning rules for a proposed arena in Center City; and approving a master plan for the Arena Area; all under certain terms and conditions. Bill No. 240972, amending Title of the Philadelphia Code, 13 entitled "Zoning and Planning," by 14 revising certain provisions of section 14-906, entitled "Market Street East Sign Regulations," all under certain terms and conditions. Bill No.
240973, approving the amendment of a neighborhood improvement district in the area generally bounded by, and including, 11th Street to the West, Filbert Street to the North, 8th Street to the East and Market Street to the South, with the exception of certain condominium units at 801 Market Street Condominium not included in the District, known as the Gallery Neighborhood Improvement District, to remove certain portions of such property generally bounded by Filbert Street on the north, 10th Street on the east, 11th Street on the west, and Market Street on the south from such District in accordance with the provisions of the Community and Economic Improvement Act, and under certain terms and conditions.
Thank you. At this time I recognize Councilmember Cindy Bass for a motion.
Thank you, Mr. President. On October 31st City Council adopted Resolution No. 24 240100, which authorized and directed the Committee on Rules to take all actions required by the Community and Economic Improvement Act with regard to Bill No. 240973, which will remove the site of the proposed Arena from the Gallery Neighborhood Improvement District. Given that all the other Arena legislation is being heard in the Committee of the Whole, I move that this Committee rather than the Committee on Rules hear and act on Bill No. 240973.
Thank you for the second. It has been moved and properly seconded that Bill No. 240973 be referred to the Committee of the Whole. All those in favor will signify by saying aye. (Aye.)
The ayes have it. The motion carries and Bill No. 240973 will be referred to the Committee of the Whole. Thank you. Before calling the first witness, I want to offer a few brief remarks. But I also want to ask for everyone in here to please put your cell phone on silent. Also, any sidebar conversations we will ask for you to take it outside of chambers. And also, as it relates to the process for today in terms of rules of engagement, we just ask that while everyone is doing -- while the Administration is doing their testimony about the proposed legislation here today, please refrain from any types of oohs and aahs or additional outside commentary. Just want to be clear on that. There will be a time for public comment which will take place next week. I think we have at least between four to six opportunities for individuals to come down and participate and voice their opinion, pro or con, as it relates to the legislation that is proposed in front of us today. Are we clear everyone? Are we clear everyone? (Yes.)
In the event that that doesn't happen, to my left we have members of the Philadelphia Police Department. Also to my left, we have members from Civil Service as well as the Sheriff's Department. So we want to make sure this is an orderly and very lively and robust discussion. But we'll make sure that everyone who wants to express their issues and concerns regarding this process, next week they will have the opportunity to participate during the public comment period. I want to thank all of you for joining us today as we begin our public hearings on the proposed Arena development project. This hearing marks an important step in our legislative process where we'll consider all aspects of the proposal and potential impact on our city. Our goal is to ensure a transparent, comprehensive and balanced review of the proposal, which includes analyzing how this Arena could contribute to our economy, create jobs in an inclusive and equitable manner and support our local culture and sports. We'll also be examining the concerns raised regarding infrastructure and neighborhood impact to make sure all voices are heard and all questions are answered. As we proceed, I encourage everyone to engage in a respectful, constructive dialogue. This hearing will allow for all voices to be heard so that we can move forward with a comprehensive understanding of the project and its implications. It is also an opportunity to ask questions, seek clarity and provide input so that we as a Council can make an informed decision that reflects the best interests of our community and our city. I want to thank everyone for taking time out of your schedule and being here. And with that being said, I'm going to ask for the Chief Clerk -- my Chief of Staff John Christmas to please call the first witness list. The Chair right now recognizes the author of the legislation, Councilman Mark Squilla, who hails from the great part of South Philadelphia.
Thank you. Thank you, Mr. President. Thank you everybody for attending today. It's an important part now that we start the legislative process. We received the draft legislation from the Administration passed on through the Council President's Office and introduced by myself. This gives us all now an opportunity. We've been meeting for a little over two years with a lot of the community stakeholders, listening to the concerns and challenges that this proposal will bring to the city of Philadelphia and the Gallery site, the Fashion District site. We want to make sure that this legislative process is robust, that we have opportunities for all the stakeholders and public to be able to testify and be able to have their opinions heard and have every Councilmember be able to hear those concerns and then look at the legislation to see if any possible changes should be made to the legislation or Community Benefits Agreement as we move forward. So I'm really looking forward to this conversation today, mostly listening, asking questions and really happy to see that all my colleagues are here also to be a part of this to ask questions and to get as much information as possible before a final vote will be taken. So thank you so much and looking forward to the process starting. Thanks.
Thank you, Councilmember Squilla. Will the Clerk please call the first witness list.
The Mayor's Chief of Staff Tiffany Thurman. And joining her will be City Solicitor Renee Garcia and Deputy Managing Director for Transportation Infrastructure Mike Carroll. (Witnesses approached Witness Table.)
Thank you very much. Good morning. Thank you for being here today and you can begin your testimony. Good morning, Tiffany.
Good morning, Council President Johnson and all members of City Council. My name is Tiffany Thurman, Chief of Staff to Mayor Cherelle Parker. I am here today to testify in support of Bills 240966, 240967, 240968, 240969, 240970, 240971, 240972 and 240973. These bills reflect what the Parker Administration negotiated with the Sixers for a new Center City Arena and the package of enabling legislation City Council is now considering. I want to thank Councilmember Squilla for introducing the package of bills that are now being heard today on behalf of Council President Johnson. We have submitted written testimony to City Council in advance which includes details of the legislative package under consideration. Joining me today to provide oral testimony are City Solicitor Renee Garcia and Deputy Managing Director for Transportation and Infrastructure Michael Carroll; Finance Director Rob Dubow; Department of Planning and Development Director Jessie Lawrence; Chief Policy Officer Sophie Bryant; and PIDC Executive Vice-President Sam Rhoads along with other leaders and team members from across the Parker Administration. We are here to answer any questions Councilmembers may have. We are grateful to be here and we look forward to engaging in a robust dialogue. In regards to the overall framing, under this deal we both keep our hometown 76ers playing in Philadelphia until at least 2026 and we jumpstart a broader city-led focus on the preservation of Chinatown and revitalization of Market East. The Mayor established the following guiding principles to inform her consideration of the Arena proposal: One, careful stewardship of City resources and a focus on the City's fiscal stability; two, unlocking the long overdue redevelopment of Market East, a historic and critical commercial corridor maximizing the potential citywide impact of such a large-scale development project and ensuring City residents and businesses from groups historically excluded from participation have access to related employment and contracting opportunities. We negotiated a union- supporting agreement, SEIU, UNITE HERE, Building Trades and Carpenters. We also focused on preserving and enhancing Chinatown as our guiding principle, including by responding to long-standing challenges arising over many decades. 3 billion project with no City funds, an approach that is unprecedented from our local sports facilities and rare at a national level. The Arena is projected to generate over $700 million in new tax revenues for the City and School District and nearly $350 million for the Commonwealth. Second, the Arena will unlock long-needed redevelopment on Market East, attracting investment, generating jobs and yielding new tax revenue. Third, the arena will create over 1,000 construction and operations jobs and is paired with a historic Economic Opportunity Plan to ensure employment and contracting opportunities both during construction and operations, benefits individuals and businesses reflective of the community at-large. And these jobs will be covered by the 21st century Minimum Wage Act, and many of the construction operational jobs will be covered by the existing prevailing wage ordinance. We support -- also, I want to make sure that we get on the record we support expanding prevailing wage to concession workers and the Administration is committed to making that happen, Council President Johnson. The $50 million Community Benefits Agreement will support nearby communities and make citywide investments in education and economic opportunity. Finally and crucially, the CBA investments will galvanize resources aimed at ensuring Chinatown's ongoing vitality and strengthening this treasured cultural community. With regard to City finances, this agreement prioritizes careful stewardship of City resources and focus on the City's fiscal stability and growth.
Unlike prior deals with our sports facilities, our sports venues, there are no City funds being invested in the Arena and no 7 related debt service. Based on an independent assessment by CSL, a nationally respected firm with expertise in arenas, arena construction and the forecasted 53 annual net new events during the 30 year-based lease term should generate over $700 million in new tax revenues for both the City and the School District and $349 million in new tax revenues for the Commonwealth all in current dollars.
A thousand pardons for interrupting you. I just want to announce that we do have translation services available for anyone in the audience who would needs it. The lady is seated over here in the corner translating this hearing and testimony in Mandarin and Cantonese. And if you are in need of those services, you can get a headset and hear it in realtime, what is being the testimony. A thousand pardons, Ms. Thurman. Please continue.
And I'll ensure I go slower so that it can be accurately and properly translated. These are relatively conservative estimates. CSL only considered the additional in-Arena revenue from net new events based on their actual experience with comparable facilities. CSL did not include indirect or induced impacts based on the economic multipliers. The Sixers will make an average PILOT U&O payment of $6 million a year over 30 years. Putting that amount in context, it is significantly greater than the $1 million that is paid currently by the Fashion District and bus terminal sites. 5 million tax bill that will be paid at Wells Fargo Center if taxed at the current assessment rate, and it equals the combined value of the $2 million a year PILOT from the Eagles, the $1 million a year from the Phillies and the $2 million a year from Comcast Spectacor. Let me turn now to Market East. Building on anchor destinations stretched from Old City and Independence Mall to Chinatown and City Hall, we have the opportunity to reimagine Market East to suit our modern-day needs. We can diversify uses along the corridor, adding retail, residential and commercial and boost pedestrian activity, attracting residents, local workers and tourists alike. The development potential before us is significantly driven by the Sixers assembling key parcels on the 900 and 1,000 blocks of Market East. The Sixers redevelopment plans for those blocks include 960 residential units; 85,250 square feet of retail space and 300 parking spaces. 5 million in new Commonwealth tax revenue on a current dollar basis over construction and 20 years of operations just from redevelopment. The Sixers overall investment, including the Arena and this other development in combination with proactive and collaborative master planning, will be catalytic spurring the redevelopment of other vacant or underutilized properties along Market East. I'll turn it now over to our City Solicitor Renee Garcia to discuss how the agreement expands access to opportunity. CITY SOLICITOR GARCIA: Good morning, Council President and esteemed members. I am Renee Garcia, your City Solicitor. The Economic Opportunity Plan, the EOP, and the Community Benefits Agreement, the CBA, ensure that the positive impact of this project reaches all corners of the city, and especially those residents and businesses historically shut out from participation in large-scale development projects. In negotiating this EOP, we were squarely focused on the fact that ambitious participation goals are often set and never reached. To ensure that this EOP would be successful, we consulted with subject matter experts in the Department of Commerce's Office of Economic Opportunity, OEO, the Capital Program Office, the Law Department, the Airport and PIDC to identify gaps in those prior EOPs. We are confident that this EOP will deliver results with its focus on both the numeric participation goals it sets and the terms and conditions it includes to enable the City to track and enforce compliance across the construction period and during the Arena's ongoing operations. The EOP goals for a diverse workforce by which we mean minority, women and disabled employees and diverse contractors meet and exceed those for prior local arenas and stadiums. Notably, this EOP includes goals for local, by which we mean city residents, workforce participation for the operations phase, something that has not been included in all prior local arena and stadium EOPs. To set goals in the four main phases of development, construction workforce, construction contracting, operations workforce and operation contracting and concessions, we consulted with key experts, OEO, the Building Trades, the Sixers and others to understand current availability. We negotiated an appropriate target range based on current availability plus expected increases in availability created by new workforce and contractor diversity initiatives that would be supported by the CBA's investments.
This EOP especially differs from prior ones by, number one, requiring ongoing reporting and monitoring by the Oversight Committee to continue after construction and through the Arena operations. Number two, obligating the Sixers to report to the Oversight Committee on a quarterly basis during the decades- long operations period and file 11 annual reports, which will be publicly available. Three, mandating that the Oversight Committee meeting minutes and annual reports from the Sixers be made public and posted on the City's website empowering the tool of transparency. Four, setting forth a more detailed and expansive list of what counts as best and good faith efforts. And five, making any future Arena alterations, expansions, renovations or improvements costing over $1 million or taking more than 30 days subject to the EOP requirements. With the EOP setting baseline goals for utilization and providing support to exceed these goals, we ensure our local workforce and small and diverse businesses are ready to respond to increased demand. Turning to the CBA, in current dollars the $50 million is larger than those for any prior local arena or stadium. Importantly, the CBA payments are front-loaded with 60 percent of the total being spent down in the first 10 years. 5 million going to support for education training workforce development and business development, including relating to employment and contracting opportunities that will come from the Arena, ancillary development and ongoing business activity in adjacent communities. 75 million. Assistance and support for businesses to prepare them for work associated with the Arena and ancillary development, which will be led by the Diverse Chambers Coalition of Philadelphia. Number three, Power Up Your Business $2 million. Funding to support businesses and aspiring entrepreneurs participating in the Power Up Your Business program at the Community College of Philadelphia. Program offerings will demonstrate cultural competency and be accessible to participants with limited English proficiency. Next, the Business Barrier Fund, $1 million, seed funding for pooled resources to assist small businesses with obtaining insurance bonding, paying fees, et cetera, that are needed to access work associated with the Arena and adjacent development, a combination of direct financial assistance and technical assistance. And lastly, internships $1 million internship and employment onboarding opportunities for high school and college students from disadvantaged communities and local HBCUs, for example, Cheyney and Lincoln Universities, for front-of- house and back-of-house roles with the Sixers and in-Arena operations. Our work together over the coming years is to ensure that the participant pool for these programs continues to diversify. Working together and in collaboration with trusted community partners, we can realize the goal of expanding access to economic opportunities for all. My colleague Mike Carroll will now discuss key aspects of the Arena services and event management.
Good morning, Council President and members of Council. My name is Mike Carroll. I'm the Deputy Managing Director for the Office of Transportation and Infrastructure Systems. The Parker Administration fully understands the importance of a robust and credible strategy to manage the impacts of events. Analysis of the community impact and the independent traffic and parking reports, reinforced by experience at the South Philadelphia sports stadium complex, demonstrate that active engagement before, during and after Arena events is crucial to efficient operations of the Arena and effective management of impacts to the community. Experience likewise indicates that a combination of capital improvements, communications and flexible operational responses are required to manage impacts as they arise. Effective management of event impacts includes the following elements: With respect to planning, the Sixers will be obligated to create an event management and security plan both under the sublease and through the permitting process required by PennDOT. For coordination event response, the Sixers will be obligated to participate in regularly scheduled meetings of the Arena committee that will be formed and chaired by the City and will include SEPTA and other key stakeholders. These meetings will provide for planning in advance of events and analysis of events after they have occurred to allow for course correction. In the construction phase, the Sixers cannot commence work until required demolition foundation and/or building permits are issued. In each case, noise and air quality are an element of the City's review. Additionally, any street closures require City approval and the City will coordinate with the Sixers to minimize disruptions to vehicular and pedestrian access to neighboring businesses. The Sixers will be obligated to provide their schedule of events, including Sixers games, as soon as the schedule is announced by the NBA. Other events which are not part of the NBA will also be required to be communicated with plenty of events notice. This will allow the committee to plan for confluences with events at the Convention Center, the Reading Terminal Market and street closures associated with cultural and other festivals. The Sixers have agreed to fund clean-up after events through the Center City District as well through the Community Benefits Agreement. In addition, the City in Philadelphia may identify additional cleaning services in partnership with the Sixers and will contemplate the activity of an Arena District to supplement these roles. With respect to parking, the City has determined through its independent analysis that there is sufficient parking supply to support Sixers games and other events. The Sixers will be required to secure at least 1,000 spaces and a previously announced partnership with the Parkway Corporation and the use of existing technology to manage traffic and provide wayfinding for folks who are looking for parking. On the subject of traffic and pedestrian control and safety, the event management and security plan will identify capital improvements and operational efficiencies to be implemented in partnership with the City and PennDOT. The Philadelphia Police Department and SEPTA will work with the Sixers to identify appropriate levels of officer deployment pursuant to that plan. Communication tools that minimize congestion include the use of navigational software such as Waze as well as static and variable message signs along highway routes and other approaches. Mobile phone applications will be incorporated along with information provided through websites and social and traditional media. With respect to public transit, the City's reports indicate that a 40 percent share of public transit usage for peak event times is achievable and it is required for the efficient functioning of the street network.
Various means will be deployed and updated as required to encourage ridership including, but not limited to, a subsidy identified in the agreement for public transit use and promotion of public transit use through media and other campaigns. And now, I'll turn it back to Chief of Staff Tiffany.
Mayor Parker is committed to ensuring Chinatown's continued vitality and position as a treasured cultural community for long-term residents, new residents and visitors from near and far. On the south side of Market Street, Washington West preserves the history of our country's founders and the City's thriving and iconic Gayborhood. The Administration is committed to addressing significant pre-existing challenges, including around cultural and community preservation, small business durability, residential and commercial affordability, traffic and parking, safety and cleanliness. We will leverage the CBA investments, a total of $21.6 million for Chinatown and adjacent communities, including over $14 million, to support a new Arena Services District and $1 million for long overdue master planning processes to launch a comprehensive city-led commitment to Chinatown and Market East. The core components of this commitment were directly informed by community residents and stakeholders. Not surprisingly, similar themes emerged across these conversations, concerns around housing affordability, small business durability, traffic and parking, safety and cleanliness and most significantly, preservation of community and cultural community. While most of these long- standing challenges that have developed over decades, the prospect of such a significant construction project as the Arena brings them into sharp relief. The time to respond to these challenges in a holistic and strategic way is now. To that end, we have already identified investments, new programs and policy responses related to the following areas: Small business support, traffic and parking, housing, public safety, cleaning and greening, cultural preservation and community vitality. In close, coordination with Councilmember Squilla -- in coordination with Councilmember Squilla, we intend to work in partnership with local residents and stakeholders to further develop and implement a long-term vision to support and enhance the community. We understand the stakes for Chinatown and Washington West residents, businesses and visitors and take seriously the responsibility to ensure that the Arena project does not negatively impact the community. We look forward to partnering with you, Council President Johnson, Councilmember Squilla and all members of City Council in finalizing this agreement which we think offers significant benefits for the City and its residents. Thank you for the opportunity to testify. We look forward to answering any questions you may have.
Thank you very much, Tiffany. I just have a couple brief questions during the first round and then I'll turn it over to my members during the first round. And to members, we'll be doing a clock as well so we can make this a very, very robust dialogue and discussion as we go throughout this day. I just want to go back to the EOP. Ms. Garcia, you mentioned that this EOP is different than other EOPs that we've implemented here in the city of Philadelphia in the past. So give me an idea of who's going to sit on the EOP Enforcement Board -- Oversight Board to how will this EOP be enforced, and then also what are the actual goals, the percentages that's the target for this particular EOP? CITY SOLICITOR GARCIA: Thank you, Council President. I am going to call up my colleague Nicole Stokes who is the expert in this area. (Witness approached Witness table.)
Good evening or good morning, right. Happy Tuesday, everybody.
And, Nicole, could you just do something for the record? For those who may not know, explain what the EOP is for the wider public please.
Okay. So my name is Nicole Stokes. I'm an attorney within the Law Department. An Economic Opportunity Plan is a plan put on projects geared to receiving participation from minority businesses, women businesses, disabled businesses and workers. And so, the point of the EOP is to obtain participation so that we can have an effective way in our community to benefit from the agreement as well.
I believe the first question was who would be involved on the Oversight Committee. The members of the committee would include a C-Suite representative from the 76ers, one representative also selected by the 76ers, a representative of the Office of Economic Opportunity or its successor agency, a representative of the City's Labor Standards Unit, a representative of the City's Law Department, a City Council representative appointed by the City Council President, a representative from the local community appointed by the City Council President, a representative of the Building and Construction Trades Council appointed by the Mayor and a representative appointed by the Mayor who shall serve as the Chair of the committee.
And what is the actual target goals for this EOP?
There have been goals set in various or numerous different categories that range from construction to operations.
Okay. So for skilled laborers, the workforce diversity goals are 37 to 42 percent, made up of 30 percent minority, to percent women, 2 percent disabled and 30 percent local workforce. The goals for skilled -- general laborers would be made up of 40 percent, minority 5 to 10 percent women, 2 percent disabled and 30 percent local. The goals for labor apprentice and pre-apprentice would be 50 percent minority, 7 percent women, 2 percent disabled and 50 percent local workforce. There have also been goals set in contracting construction. Contracting diversity goals will be 37 to 52 percent made up of to 35 percent minority 17 business enterprises, 10 to 15 18 percent women business enterprises 19 and 2 percent disabled business 20 enterprises. 21 There have also been 22 goals set in professional services. 23 Contracting diversity for 24 professional services is made up of to 30 percent MBE, 10 to 15 percent WBE, 2 percent DSBE which would be disabled business workers. The contracting for furniture, fixtures and equipment that would go within the Arena would be made up of to 30 percent minority business 8 enterprises, 10 to 15 percent women 9 business enterprises, 2 percent 10 disabled business enterprises. There have also been goals set for ongoing operations for hourly employees. The workforce diversity goals are 60 percent, made up of 38 percent minority business -- I'm sorry, minority employees, percent women, 2 18 percent disabled, 75 percent local 19 workforce. For management 20 employees, that would be made up of 30 percent minority, 15 percent women, 2 percent disabled and 40 percent local workforce. For salaried employees, that would be made up of 30 percent minority, percent women, 2 3 percent disabled and 40 percent 4 local workforce. We have also set 5 goals for intern opportunities that 6 would be made up of 40 percent 7 minority, 15 percent women, 2 8 percent disabled, 50 percent local 9 workers. 10 There have also been 11 goals set for general contracting 12 such as janitorial, security, AV, 13 IT, waste management, landscaping 14 and snow removal. For that 15 category, it's made up of 20 to 30 percent MBE, 10 to 15 percent WBE, 2 percent disabled. For concessions which includes ownership, contracting and labor for concessionaires within the Arena, the goal is made up of 30 to 40 percent MBE, 20 percent WBE and 2 percent DSBE.
Thank you. And what were the metrics that were used to actually come up with the actual goals for the various categories that you just mentioned?
We relied on industry experts as well as past studies. We've relied on the Office of Economic Opportunity. The Sixers did their own independent study and agreed that this would also be something that they could accomplish. And so, all together we came up with the goals.
Okay, cool. And I just had another question: This particular -- the committee that was put together, it's different from other committees that we've used in the past in terms of monitoring EOPs?
So the Oversight Committee that we're creating right now for the Sixers project is different than what we already have been doing in the past in terms of EOP plans?
Yes, in terms of make-up as well. We picked key -- we studied with industry experts, identified the lack of involvement from certain past EOPs and we specifically targeted the list that I mentioned earlier to make sure that all the key players are included so that the EOP can be effective.
So would this be a model moving forward irregardless of the size of the actual development project in terms of making sure it's diverse and inclusive and everybody has a seat at the table?
Okay. All right. How are we addressing the issue of good faith and best faith efforts, right? Often times you put out an RFP for contractors to come and do work and from my understanding sometimes folks will call back, we can't find anyone to do this type of work and therefore you really don't have the opportunity to gauge those numbers. How are we being proactive to address the enforcement around that aspect?
Within the EOP there are numerous specified actions that constitute an EOP, constitute a good faith effort. That is specific to this EOP. It's more inclusive and detailed than it has been in the past. As a result, there are specific actions that apply in this EOP that may not have been enumerated. And so, the Sixers are expected to go through these specific efforts that are enumerated within the agreement, but it's also specific that it's including, but also not limited to, these efforts. It's important to note that there's also reporting, more frequent reporting that's been covered in this EOP despite last EOPs. And as a result, there should be in a way a realtime update more frequently of what's going on and what efforts are being made to obtain the inclusion.
Thank you. CITY SOLICITOR GARCIA: If I may, Council President, because I see Councilmembers flipping, if you have the EOP in front of you, it's Pages 12 to 13. There are 16 different categories that -- oh, now everybody is flipping -- which require the production of even attendance logs, right. There are communications that are required. Policies of non-discrimination and hiring, agreements, invoices. So it is quite comprehensive. And this is not even everything, right. This is just a sampling of what could be provided that the Oversight Committee will be looking at.
And as my colleague Nicole mentioned, we looked at past EOPs as well and we wanted to ensure that we're not here 30 years from now like what can we learn from the last deals that were struck 30 years ago and how can we ensure that we have more Black and Brown businesses at the table. So to your point, we're not scrambling, right, so that we create a real pipeline for real opportunities. That's what we wanted to make sure. And so, that's where that Oversight Committee comes in. And as you --
Just as you all know, our Administration led by our Mayor, Mayor Parker, we do not lack the political will for enforcement.
Thank you. The Chair recognizes Councilmember Gilmore Richardson.
Council President, I apologize for this. It's just a point of clarification. I was thumbing through to make sure I had this here relative to the --
Okay. Thank you. This is just a point of clarification regarding your question, Council President, so please don't take this away from my time. But my question is regarding the frequency of the checking. I think you spoke to that in the testimony, the frequency of how you all will monitor onsite the EOP goals both for the construction jobs and for the other professional services goals. What is the actual frequency? I just wanted to -- CITY SOLICITOR GARCIA: So for the first period there's monthly reporting and then there's quarterly and annual. But when the Oversight Committee convenes, they will set the cadence how often they are going to meet as they're receiving all this information because it's going to be a lot of information. So my vision is in 2025 this Oversight Committee comes in and they will work through the governance of how often they are meeting and looking through information.
Thank you. I'm going to reserve because that was just a point of clarification. Thank you, Council President.
No problem, Majority Leader. Your time will be definitely --
For more specifics, we've decided that by the 30th day of each month during design and construction period, the developer 76 DevCo shall provide a report to the committee that documents the status and participation of M/W/DSBE contractors and subcontractors, which will include the name of each company, the trade, the specialty, et cetera. They will also have to report the status of participation for minority, women, disabled, and local employment on the project. By the 30th day of the following of each quarter, they are also required to do ongoing operations and they should provide a report to the committee. And then further, annually they agreed to file annual reporting with OEO and City Council concerning the performance of the EOP through the duration of the project.
Thank you. Is there -- I know you're talking about internships, and I just want to go on the record, I know I mentioned this briefly, Tiffany, but talk to me about the CBA and support for apprenticeship programs and pre-apprenticeship programs rather from the Sixers or the Administration to make sure again -- and my line of questioning is just making sure that in the event that this proposal does move forward, right, we're making sure the workforce reflects the city of Philadelphia. We want to make sure that those who have the professional services opportunities represent the city of Philadelphia. And so, when we talk about particularly in the construction industry and making sure it's diverse and it's inclusive, is there support for apprenticeship programs and pre-apprenticeship programs to make sure young people in general have an opportunity to participate in this particular project?
Council President, we have not been here long. We've only been here for at my calculation about 11 months. But in this 11 months that we've been here from day 1 up until now we've talked about an economic- opportunity-for-all agenda, and inclusive in that agenda includes workforce development. That's indicative also of our budget address that we wrote out and the budget that Councilmembers, that you all passed for FY25. So we're absolutely committed to workforce development. We're absolutely committed to pre-apprenticeship and career technical education. You see that commitment in the work that we do day-in and day-out in our current Administration and it's also indicative and clear in this deal that we've reached.
Yes, sir, it is. You can look at the allocation that we have through our CCME, which stands for a City College for Municipal Employment. We will continue to work through those details in close coordination with Council.
When we talk about the internships for the young people, where are these internships going to take place, with the Sixers, the City?
A combination of all of the above. We want to make sure that we look differently at internship programs, not just opportunities where folks in high school and college can come in and have a feel-good experience, but we're creating a real pipeline to real employment. That's also evident in our EEO -- I'm sorry, in the EOP that we struck. So what Nicole talked about in terms of management trainees, creating a real pipeline to ensure that people don't just have a one-time experience, but that they get real on-the-job experience for roles in management, so that internship program creates a pipeline well into the management training. And that's something that we fought for. That's something that we said that was non-negotiable. That was part of our guiding principles when we sat at the table with the Sixers.
Okay. That's what's up. I'm going to wrap up my line of questioning, but I do have a question for Mr. Michael Carroll. Mike, the transportation study foresees gridlock in Center City if it exceeds more than 41 percent. It says 41 percent of game attendees if they drive there will be some level of gridlock. But give me an idea of -- some folks think that the traffic will have an impact on the Jefferson Trauma Center, right. Give me an idea, Mike regarding, in the event that the Arena does move forward, I know you've done extensive work around traffic studies, that in the event that there's an emergency, people that's going to and from Jefferson Trauma Center will still be okay.
Yeah. So our independent analysis confirms what you're saying, that the access to the trauma center will be okay, and I'll get into a little bit of detail about that. But I also want to add that Jefferson took a look at this as well and their CEO concurs that there won't be significant impacts to the -
So for the record, Jefferson Hospital's CEO said that there will not be a significant impact on the Jefferson Trauma Center and people getting access to and from this trauma center, correct?
Okay. Just want to make sure we get that out there.
All I can add is that when you look at the potential impacts, they're spread around. They're not concentrated around any access points or access routes to the emergency room in general where we see potential impacts that are coming from an east, west perspective, not a north, south. And the 10th Street corridor which will be affected as pedestrians come and go from the arena will be reserved for emergency access. So, in fact, there will be police there that will help any emergency vehicles that need to come down that corridor get there probably even faster than they would under normal conditions.
Okay. And last question: Some think that in the event that this project moves forward that the Sixers should be responsible or the City should be responsible for upgrading the SEPTA station at that particular site. What is the Administration's perspective on or position on --
Okay. Is it your thought that if it's not the Administration of the City, it should be the Sixers that should be responsible for upgrading SEPTA transit?
That responsibility is going to be the subject of conversations between SEPTA and the Sixers. We certainly want to support them reaching an agreement. And so, to the extent that we can provide any information or help them talk that through we're happy to do so. But they need to reach agreement about how they do that.
Okay. Thank you very much. The Chair recognizes Councilmember Jones.
Thank you, Mr. President. And thank you for your testimony. I have four questions, one has already been answered. I occupied that space dealing with affirmative action and, that is, a robust plan and action of option. Stuff happens, you need to be able to respond to it. But I appreciate the initial architecture of that plan. The other questions that I have are threefold and you may not be able to answer them all now, but I expect an answer by the conclusion of these testimonies: Number one, to drill down on what President Johnson talked about, I need to know the SEPTA plan on how people that want to enjoy that Sixers stadium would get to and from their events from where they're coming to that station safely. I need to drill down to say is there going to be a Sixers party train? You said that the traffic was coming east and west. How are you compensating for that by way of ridership, train availability and the like?
Pause, pause, pause. Second part of my question is for more the Commerce Department. It is known that Macy's may not renew their lease. And between Macy's and the site of that stadium, we're looking at 30 to 40 percent abandonment, lack of occupancy. What is the economic plan for developing that? I heard parts of it that there might be in the Community Benefits Agreement loan funds, whatever, but I want to hear about the recruitment and the theme of that recruitment. Is it a Philly experience, a taste of Philly experience, Philly businesses? What is the plan to put businesses and the percentage of businesses that would be local? Number three, what is the security plan for that corridor during those times of games and events? During the last election, people highlighted nationally some of the challenges that we had in that area and downtown. And one nondescript-elected politician described us as Gotham. How do we change that so that suburbanites that want to enjoy the festivities that we plan are going to feel comfortable about that? So those are my three questions. And now, you can begin answering.
Okay. I'm going to take on the first one and I'm going to just -
Excuse me, Mike Carroll. Just for the record, I just want to let members know you will have three minutes, so to get straight to your question and then let them get an opportunity to respond.
Okay. I'm going to take on the first one and then I will defer on the second one. So the SEPTA plan really depends a lot on what SEPTA is working on, so we are in communication with them. To put it as succinctly as possible, the question comes down to is the service available. So that means that SEPTA has to plan for trains, not special trains, but train service which is available when the Arena events let out, so that's around 10:00 p.m., past 10:00 p.m. So the matter at hand is that we expect folks are going to find there's plenty of capacity on the Market-Frankford Line so that's the east, west. There's going to be plenty of capacity on the Broad Street Line which is within the City's boundaries to get you north, south. But when folks are coming from the suburbs, we need to make sure that that Regional Rail capacity is there. And so, that's what SEPTA is working on, making sure that they have capacity for folks going to and from the suburbs to attend events, and that's where most of the work is going to be focused. So we're supportive of that work. We can make sure that on the street the access to the concourses is dealt with, all the Headhouses are available, they're free and clear. Our police will be involved in that. Event staff will be involved in that. But once people get to the platform, they need a train to get on in order to get out of Philadelphia out to the suburbs, and that's one of the keys here.
I'm going to need a little more detail as to the safety component of that when people are let out of those events. People come -- everybody should be safe on SEPTA. People coming off of second shift at night want to feel like they can get to my District, 60th and Market safely. In particular, people that aren't very urban that are going back to the suburbs I need to know a little more in-depth how we're going to deal with both safety and the perception of safety.
Absolutely. Right now and since the beginning of this Administration we have met regularly and we will continue to meet regularly. Through our Office of Public Safety, our Director Adam Geer and with Commissioner Bethel, our Police Commissioner, they work very closely around safety and perceptions of safety with their counterparts at SEPTA. That will continue to happen as we continue to have discussions around what's going to happen not just down at Market East for what's happening down there through this deal but citywide. So absolutely, that is an ongoing priority and those are ongoing meetings that we're having and that accountability is key. So absolutely, Councilmember.
So to your discretion, Mr. President, would you like me to defer on Questions and to allow for (inaudible) or can I proceed?
I would like for Questions and to be answered.
So with regards to Macy's and the development that's happening in and around that parcel, I'd like to call up Jessie Lawrence, our Director of Planning and Development. (Witness approached Witness table.)
So my name is Jessie Lawrence. I'm the Director of Planning and Development. Essentially what we're setting the stage for is a Market East Master Plan. The master plan will look at how we will guide growth, how we want to grow in the anticipation of development. It will look at ways that we leverage the existing opportunities for development, those that are past, present and future. That master plan will really be intentional on not just the growth but all the things that support quality-of-life issues looking at how we can be intentional about development, improving safety. One of the biggest things in quality of life along the corridor is vacancy. In our observation about a third -- excuse me, a quarter of retail storefronts from City Hall down to the Independence Mall they are vacant. If you go south to Chestnut Street, a third of those storefronts are vacant. So we're looking at ways to make sure it'll be, you know, it'll look at ways to look at how vacant properties, vacant sites, those that are, you know, structures that are vacant, lots --
Can I get a point of information. To follow on what my colleague is getting at as well, so there's a thought that in the event this arena is built in Center City, it would spur development along that corridor. Can you elaborate around that particular theory that if this arena is built it will revitalize East Market Street? Can you elaborate on that please?
So East Market Street is essentially a main street that once was and it is not right now. And adding the elements of what's being presented here as another anchor to leverage the existing anchors that have been pitched over time, the thought is that it would spur development. It would be a catalyst for that development. The vibrancy that would return by way of jobs, tax revenue, attractiveness for the most part. The Arena itself presents a proposal on both sides of Market Street, but the thought is to not depend on just the Arena. There's a qualitative aspect, but there's also a quantitative aspect. And we can make the corridor attractive by assembling these parcels and jumpstarting the development along the corridor, but we can't bring other people to develop those key vacant parcels until we insert something. There have been some attempts to do that over time. Unfortunately, we got hit with COVID which really kind of stalled it. I know that there's a sense of diversifying those uses. We are looking at the addition of just retail, and also residential office space could be something on the potential on the horizon, but that would be responsive to whatever the market is right now.
So -- I mean, thank you, Mr. President for that. I want to know in that theme how much emphasis will be given to Philly, a taste of Philly, Philly-based businesses that might be successful in other parts of Philadelphia being attracted to that corridor to benefit from that corridor? When we went to Chicago most recently, when you go out of your hotel to maybe to go to a sporting event, you don't want to go to Five and Below. You want to experience something that represents our city. How are we focusing in on that opportunity?
So there's a thought that we would be looking into an Arena Services District. And part of that requires us working with small businesses that are in the immediate area. We'll be looking to support the programs that would be in collaboration with some very key community-based partners and that conversation will be had about how to incorporate the local aspects into whatever we do as far as potential retail and uses within the arena as well. Does somebody want to add to that?
Did you get your last question answered, Councilman Jones?
And I just want to add one part on security, and I'm just being fair because we're going to ask questions on both sides. But the CBA does cover a significant amount of security cameras and lighting for that immediate area. I know because we reviewed this information with the District Councilmember but also was proposed from the Administration. So do you want to elaborate on it?
Yeah, that's a big part of the answer. And in fact, we are starting to plan out the configuration of the deployment of more cameras, significantly more cameras, a broader area of coverage, so in particular getting feedback from neighbors in Chinatown, Washington West, others where we really don't have significant deployment for that purpose. That will be in place. We do have LED lighting in most of this area, but we have the opportunity to upgrade that lighting with potentially more fixtures. But also, one of the benefits of the LED lighting that we're putting in place citywide is we can actually control remotely how bright it is. We can manage that remotely. We can manage it, you know, push a button. But we can also make sure that the lights are maintained in a state of good repair so that there aren't these dark spots that occur with the old-fashioned lights that we replace. So we've got a good strategy on that front. I will say with respect to the security, people's perceptions thereof of the SEPTA system, I think we are on the right track and it's certainly going to be a challenge for people to extend beyond the post-pandemic world that we're seeing in front of us now to 2030, '31, '32, but the trends are moving in the right direction. So, for example, just the one measure I think speaks to it is the ridership levels on SEPTA. And if you go back to the winter of 2021, we were about 40 percent. Most recently looking at the information we have, we crossed 70 percent. So my expectation is by 2027, 2028 we're kind of back to what things were like in 2019. There's a lot of work as the Mayor's Chief of Staff said to coordinate with our police, our Office of Public Safety, SEPTA police which is staffing up to get a handle on what's going on the system and make sure we're very responsive to the feedback we get from riders, from people who live and work around the SEPTA system, and I think we're on the right track.
I just would end with, Mr. President, I don't want to create an environment along this corridor that makes people want to clutch their pearls. I do want there to be an environment where people feel safe, and sometimes you don't do that by overdoing the boots on the ground but it's more subtle, cameras and other kinds of deployment of police. But we only get one chance --
And that is going to be nationally looked at. So I'm looking for as we go forward, Mr. President, a little more detail in each of those plans so that we can evaluate it and give feedback.
Thank you, Member Jones. The Chair recognizes Councilmember Jamie Gauthier -- point of information. Chair recognizes Councilmember Squilla.
Yeah. Thank you, Mr. President. Also too as part of the CBA, I know that there was a public safety headquarters being proposed on Market Street. That would include incorporating a location that would coordinate between the police, SEPTA, PATCO and Jefferson, right, and that was going to be also within a -- to really go and work on a five- or six-block area surrounding that location?
Yeah, that's absolutely right. And on event day that's going to be a crucial element to making sure we reach that standard you're setting, Councilmember.
I do have a question though regarding public safety. So I'm from South Philly, right. And in South Philly down in the Stadium District area the police patrol the whole neighborhood during every game, right. And that was part of a deal that took place when the stadium was first built, that that neighborhood is pretty much -- I'm not even going to say protected because you still have unrulies that leave the games and still do a lot of things in neighborhoods and we get the phone calls about it. But for the most part you have police officers, I guess, through a contract with the City that governs that area on games. Will it be something similar when it comes to the games downtown --
Yeah, we have a very present and active police force and that won't change. That will continue. Their presence will be felt. And to Councilmember Jones' point, the perception of safety is very important as well as the reality of safety. So absolutely.
Thank you very much. Councilmember Jamie /Gauthier/, Gauthier.
Thank you, Council President. And thanks so much to the Administration for being here today. My first questions are about SEPTA. I know that I don't need to remind anyone in this chamber how much everyone in the city relies on SEPTA to get around. We know that SEPTA has been struggling financially for a while so asking them to absorb any cost, whether construction or operational, to subsidize the Sixers Arena hurts the entire city. If SEPTA's financial stability is not explicitly addressed in the legislation, we should not vote for the Arena. So with that, my first question is around construction cost. My understanding is that the initial cost for renovations to Jefferson Station because of the Arena construction would be or could be as high as $30 million. These costs include lost revenue and changes to the station, including removing and reinstalling an HVAC system that was very recently renovated. Will we have the exact cost estimates for renovation before this legislative body takes a final vote?
So we know that in working with SEPTA and meeting with SEPTA that they are currently doing a financial analysis and that those numbers are forthcoming. They have not been finalized yet. And so, absolutely as those numbers are finalized I I know that SEPTA will share that. And in terms of our Administration understanding the importance of SEPTA and the importance that it plays to even the vitality and the in-person work that we are calling our staff, our Administration to do, we have demonstrated in the FY25 budget that we support SEPTA. Rob Dubow --
-- our Director of Finance, will speak to that. But absolutely, those numbers will be shared with you as they're shared with us. Rob.
The explicit question is will we have the exact cost estimates for the SEPTA renovation, which could be as much as $30 million before this legislative body takes a vote on the Arena package?
As soon as we receive those numbers, you all will receive those numbers, if you don't receive them at the same time that we receive them. We have not received them yet so we are waiting for that.
Those numbers are not finalized. But I know -- I'm sorry, Councilmember Gauthier. I know that our Director of Finance, if that's okay, wanted to speak to the financial aspect of SEPTA.
So in our proposed budget we put in an amount that would equal the match required for the proposal that the Governor put forward in his proposed budget.
That meant increasing our contribution of 109 million to 133 million, so a $24 million increase. As you know, the state didn't adopt what the Governor proposed. They adopted about a third of what they would have gotten under the Governor's proposal. We maintained that higher amount in our budget and Council approved that higher amount, so together we kept that 133 million in the budget which meant that we put in much more than our match requirement. It's kind of a way of showing how important SEPTA was to us. CITY SOLICITOR GARCIA: I just want to -- Councilmember, I just want to add that the Sixers are on the hook for all the construction and infrastructure costs for the subway station. What I believe the contention is now is the increased service costs running trains late at night. And I'm sure SEPTA will speak to that tomorrow when they're -- but per the deal, they have to pay for all the construction infrastructure.
Why is that not explicitly laid out in the legislation? CITY SOLICITOR GARCIA: It is in the term sheet. I don't have all of the -- that is something in the term sheet and in the sublease agreement. And I'll find you the exact provision in the term sheet, so it was not necessary to put in the legislation. I know there will be lots of questions tomorrow about the service and operations aspect to it.
My understanding is that 76 DevCo traffic estimates are based on a 40 percent ridership rate among fans which has already been mentioned. Currently Regional Rail evening service at Jefferson Station runs every one to two hours. The only chance we have to get to 40 percent ridership would require Regional Rail to run every to 30 minutes 5 after games. 6 This would produce a 7 shortfall for SEPTA according to 8 them of $20 million to $25 million 9 per year net of ticket sales 10 revenue. Who will pay for these 11 costs and where does the legislation 12 specify this? 13
So I think 14 as was mentioned before the City 15 feels confident that we have done our part in terms of oversubsidizing SEPTA's operating budget and in terms of setting aside the $3 million in the Community Benefits Agreement which can further subsidize transit fares. So we encourage SEPTA and the Sixers to try and reach an agreement. We recognize the fact that that service needs to be there. And that goes to my previous comments, we can't have people ride trains that don't exist, so we fully acknowledge that there is a need to add service in order for us to meet those goals, but we're in a role of supporting conversations between other entities to reach that agreement.
Do you think it's important for us to have answers to these questions around significant costs before we vote on the Arena package or do you think it could just kind of be like an unknown?
Well, I think it's not just a question of legislation. It's a question of the Highway Occupancy Permit that PennDOT is going to require the Sixers. It's a question of the lease agreement itself. And so, these are questions that we have an opinion and we can share the opinion, but we can't force either the Sixers or SEPTA to reach an agreement. There's details that need to be worked out. I think it was mentioned before we don't have all the details right now from SEPTA. So as we get information, we may be able to clarify that response but that's where we stand right now.
Thank you very much. The Chair recognizes Councilmember Isaiah Thomas.
Good morning, Council President. Good morning to the listening public. Thank you all for being a part of this robust conversation. I'm sure you all know where I'm going to go with this. So my first question is really more of a concern. If we are allowing the Sixers hypothetically speaking to have an arena, which this proposal is presenting, why is it that we're not mandating for the Sixers, the entity, the actual company itself, I don't know if it's an LLC or whatever type of entity it is, why would that entity not have to relocate back to the city of Philadelphia by the time the arena is built in 2031?
Councilmember, if that is something that you would like to request or ask or require of the Sixers, we will not stand in the way of that.
So, Council President, I do want to go on the record that I think that it would be a good idea that if this proposal is granted, right, and I'm thinking about the tax revenue for the City of Philadelphia, currently right now the entity, the Sixers entity is a New Jersey-based company, and I will definitely put this on the record tomorrow. If we do agree to give them an arena, I think part of the deal should be that the company itself be headquartered in the city of Philadelphia so we're not just getting that wage tax 41 days a year. We're getting it 365 days a year. Now, you can practice anywhere you want, right. I'm a basketball guy. I get it. You can practice anywhere you want. I don't care where you practice. I care where you clock in at 9:00 a.m. So I wanted to put that on the record first and foremost. Secondly, the Mayor talked and the Mayor's team talked a lot about this being a phenomenal deal for Black businesses. At some point throughout the course of this hearing today, because I don't want you to take all of my time talking about it, but can you give us more details about how Black businesses will benefit from this deal. Specifically listening to some of the agreements that I listened to Council President communicate, Councilmember Jones communicate, and us not having all of the details to be able to make that mandatory. Now, I'm not talking about the construction side. The construction side is only one part of it. I'm going to push the 20 percent number on professional jobs, right. I heard the 20 percent number which relates to architects and professional jobs. I want to push that number to be even higher than percent. But at some point throughout the course of our conversation today, can you make sure that you elaborate specifically on how Black businesses will benefit from the building of the Arena? Once the Arena is already built, not the construction jobs, the professional jobs that's in the Arena, the opportunity for people to own businesses and have storefronts and things of that capacity, so please talk about that at some point before we leave today. The next thing, I want to thank Councilmember Jamie Gauthier for talking about the traffic and SEPTA thing. I think she's absolutely right. That was one of my questions. We kind of need a little more detail on that before we take the vote. I understand you're saying that it's between the Sixers and SEPTA, but the general public don't look at it that way. They just see us all as government. So the reality is that for us it would be very beneficial to have that information before we take this vote so we understand any type of unintended or ill-advised consequences that could present itself, especially since I just think it was today or maybe yesterday SEPTA announced like a 13 percent increase in their fare. So 14 we do need to know details on that. 15 As I close out, Council 16 President, because I heard the 17 buzzer, what I do want you to talk 18 about on the record right now is 19 Chinatown. So every Thursday I sit 20 here and I'm so close to public comment. Chinatown has said that they have not had an opportunity to meet with the Mayor to talk about this issue robustly. Can you please for the record give us information, detailed information on all of the meetings you've had with the Chinatown community, and also please talk to us about why there's only $1.6 million in the grant to assist businesses impacted by construction when I believe when we did I-95, I believe that two-week process or so cost us about $5 million that we spent on business disruption. So if we did 5 million for about two weeks, help us understand how 1.6 million is going to last 10 years?
So the first I'd like to do is to ask John Mondlak, our Chief of Staff for Planning and Development, to come up and talk about the meetings that we've had. As he's coming up, let me be very clear. We have had ongoing stakeholder engagement meetings with members representing Chinatown, Market East, most recently Wash West Civic Association. There is ongoing engagement and conversations that we'll continue to have. But I unequivocally or I want to be very clear. We have had meetings. We'll continue to have meetings. We are an open-door Administration --
Yeah, I want to hear about -- I want to be very clear. I'm not accusing the Mayor or the Admin of anything. I'm not saying you guys have or have not had meetings. So I apologize if my tone is one that suggests that you have or have not done something. I'm just letting you know that every Thursday we're here it is communicated on a consistent basis that people are being ignored and their voice is not being heard. So I think it's important that you put the information on the record who have we met with, what have the conversations consisted of, who was present. I think that is something that's really important. And before I close out, please just explain to me the 1.6 million number because that number doesn't make sense to me.
Absolutely. So as I shared, we've had ongoing meetings and engagement with all stakeholders throughout the City, including those representing Chinatown. There are a number of Chinatown stakeholders and organizations, groups that are both for and against this deal. We recognize that. We've opened our door and had those meetings. John Mondlak, our Chief of Staff for Planning and Development, will go through a list of all of those meetings and the engagement. And then we'll go in and answer your additional questions.
Thank you, Councilman. My name is John Mondlak. I'm Chief of Staff to Department of Planning and Development. And I'm going to just summarize the meetings that have taken place in the last year or so with the members of Chinatown as far as actual participants. I'll have to follow up with names if that's what interests you. But essentially, we met monthly with the No Arena Coalition, and again we can provide some names starting back over a year ago. The dates would have been -- and again, not every single month, but there's about meetings. I think we had to miss a couple because of scheduling. But we met June 1, 2023; June 2, 2023; July 14, 2023; September 8, 2023; October 13, 2023; January 26, 2024; February 16, 2024; March 8, 2024; May 10, 2024; June 14, 2024. In those meetings -- I'm sorry.
I just want to do a point of information as well, and again, we're just doing transparency. I see Sam Rhoads there and I -- represent PIDC. When we first started this process, you talked about the Chinatown Coalition being a part of the actual initial planning of the actual study, what went into the study. So you may want to also provide the Councilmember also additional information after John Mondlak.
I could even add that in and if Sam wants to add more, that's fine. So in those meetings were again the No Chinatown Coalition. It was senior folks at the Department of Planning and Development along with PIDC. Early in the meeting we shared the scope of work and the RFP responses to all of the studies. And we took their input into our selection of who we selected and we also modified the scope of the community impact to accommodate some of their requests. We couldn't accommodate all of their requests, but we did modify the scope to incorporate some of their requests. So that was initially -- the rest of the meetings throughout the year focused on status of the impact studies, lots of questions about process, how this would unfold when it came into the public process, what commissions and boards it would go to, what is the procedure, what is the process, so there was a lot of fact-finding questions that we answered. And there was also a fair amount of lobbying because they made their position very well-known that they were opposed to this. At the time we were gathering information doing the studies to try to inform a decision, so we had nothing to say to that. But we entertained again the conversation around why they thought it would be adversely affecting Chinatown.
So I think more details about those meetings would really be important and helpful for us, because again that's not the information that's communicated on Thursdays in Council session. So we would definitely want to see who was there, maybe how many people you may have been able to persuade to be with you, like did that happen and things of that capacity --
Okay. Got you. That's amazing. So I know my time is up --
We had not made a position clear at that point. We didn't have a position. It was really just an information exchange. They had a position for sure. We did not have a position.
Thank you. That's extremely helpful. My last question was the 1.6 million for business disruption. I was just wondering where did that number come from. And if we were to approve this project, how can we assure that that's the right amount of money when we spent like 5 million on business disruption on I-95?
Well, I'm out of time and the Council President has to move on. I'm sure that there's been a lot of information --
-- but what we're asking for is the members of City Council to get a summary of the meetings.
What was taking place during those meetings because, again, that's not the information that's communicated to us. So if you could just help us with a brief synopsis of that stuff. I think you giving those dates that you did in that timeline was extremely important and that was something that I was not aware of. So if you can give us a brief summary similar to the other information, that would be helpful because I don't want to monopolize the time. I do think the 1.6 million is important. And at some point I have to pass it to one of my colleagues. So if I can just get an answer to why we did 1.6 million for business disruption, I can save my line of questioning for the second round.
Okay. I just want to make clear that there are many more dates that I'm going to have to --
I'm sure there are and we would like to have -- maybe, Council President, do you want them to put the rest of the dates on the record? I'm just trying not to monopolize too much time.
It would be more prudent that you just provide --
-- the Chair and members of the Committee of the Whole the actual documents detailing your actual meetings.
We are very happy to do that. Regarding the Black and Brown businesses -- thank you, John -- we'll bring up Nicole.
Okay. Regarding Black and Brown businesses, first I would like to note that within this plan minority is defined as a person who is African American, has origins in any of the Black racial groups in Africa; Hispanic Americans, a person of Spanish or Portuguese culture within the origins of Mexico, South or Central America; the Caribbean islands regardless of race; Asian American having origin in the Far East, Southeast Asia and Indian; and then also the subcontinent or the Pacific Islands or Native American having origins in the original peoples of North America. So that is what's incorporated into minority in this plan. To your point, it's important to note that the EOP plan contemplates businesses such as janitorial and building cleaning, security, audio-visual production, IT services, snow removal, landscaping, waste management, food and beverage operations and other building operations and management services. Furthermore, it contemplates concessions within this agreement. Concessions is defined as the sale of products or the rendition of services for consideration on or using the Arena --
Can I interrupt because that's not what I'm talking about.
But I don't have the amount of time right now because my time is up. If I can move on, I just really need you to answer the question about the $1.6 million for the Business Disruption Fund. I really need to understand why do we think that $1.6 million is enough when we spent $5 million on I-95. We're going to dance around Black businesses. That's going to be a long dance. But the Business Disruption Fund, if I can get that answer then I can submit my time and come back for the second round. Why do we think $1.6 million is enough if we're looking at almost a decade of construction when we spent $5 million on a couple weeks?
Thank you, Councilmember Thomas. Sophie Bryant, Chief Policy Officer.
I'm doing well. Good to see you as well. So the math and the rationale behind this, the average amount that Commerce Department uses for business disruption is around $20,000. So we calculated 40 businesses immediately proximate to the Arena and had a dollar amount of $20,000 per business times four years, which is the anticipated construction period. And then we did divide that in two. And I think our thought process there is we would leverage that $1.6 million and bring additional investment in. I think an important thing to note here is the I-95 example sort of like seismic and massive with full closures of streets, I think as Mike Carroll has mentioned and can go into more detail about, we're not planning on full street closures here. So I think the thought is less disruptive. But to your specific question about why that amount, based on what Commerce Department sort of estimates for similar kinds of efforts around large scale construction projects.
So do you anticipate if that number isn't enough getting revenue from either us on the City side or support from our state partners?
Or philanthropy. I think this is a case where sort of the Mayor's Office of Strategic Partnerships could come into great practice. I think there's a lot of attention and focus on the Arena so it is an opportunity to rally the civic community, the philanthropic community, the business community to help support businesses that might be impacted.
Sorry for cutting so many people off, but my time is so short. Please don't take it as disrespect or anything like that. I'm just trying to get a lot on the record. Council President, thank you, sir. I would definitely want to tee up for a second round because a lot of that was abbreviated that I wanted to put on the record.
Absolutely. The Chair recognizes Deputy Whip Cindy Bass.
Thank you, Mr. President. Just a couple of questions, and actually a lot of the questions I was going to ask have been asked already, but there are some things I'd like to go over just for clarity sake. Just talking about what Councilman Isaiah Thomas just mentioned around the support, the supports for existing businesses and the $1.6 million. And so, doing a little research and actually being around for a minute and recognizing that when we did the work -- I was a congressional staffer when we did the work on the Market-Frankford El line and the amount of dollars that were allocated to those businesses, many of whom ended up going out of business anyway but this pales in comparison. So we're talking about a one-time $1.6 million investment versus when that project was happening, it was over -- I forget exactly how long, but let's say roughly like six to seven years or so. And the amount that was spent on those businesses was $2 million and $3 million per year. And so, this number at $20,000 per business for 40 businesses, per business, is really just not a reasonable amount of funding in my opinion to make sure that we're able to keep these businesses afloat. The other thing around the amount of traffic in the area, and I know you said that you didn't expect that it would be the same as 95 in terms of street closures, I think it'll be the same, if not worse because you'll have gridlock, you'll have difficulty parking. People may not feel comfortable trying to find a parking space, walk all the way back to Chinatown and so forth. So there is going to be significant disruption. So I just want us to figure out how do we revisit that 1.6 number because it's not adequate. So that's my first question. Another question that I had was around, Madam Chief of Staff, your statement about notice required to the City that once the schedule comes out then the Sixers will be required to provide a schedule to the City or actually they would -- yeah, they would be required. But the question I have on the other side is for Sixers or whether there's concerts or whatever, even though the notification is required is there also a corresponding approval required by the City for those activities? So the City, do they just tell us what they're going to do or do we have a say? Listen, if you want to get a block party permit, you got to get approval from the City. And so, are we going to have some sort of say in terms of what actually is going to be happening and on what days and does that conflict with Wawa Welcome America or Made in America or some other major activity that we have? So what will the City say in those manners? And then I had some other questions related to SEPTA, but I'll come back to those.
So I'll turn it to Mike Carroll to talk about our robust event management plan.
So generally speaking, when it comes to Sixers games you're not in a position to be negotiating with the Sixers, you're negotiating with the National Basketball Association. So generally speaking, that will be pretty much what we're told is going to happen.
So outside of the Sixers what about the other events, concerts, activities that will be happening, do we have a say as a City in terms of like an approval process or is it that they're just going to tell us we booked this on this day, we booked that on that day? Is there any say that the City of Philadelphia has or is it just --
There's a big difference between a say and approval. So we will communicate to them any conflicting events. We will communicate to them the additional requirements in terms of managing events. At the end of the day typically it will be their business decision to figure out whether that's worthwhile or not. But what you need to keep in mind is that their event-goers, attendees' experience is the same experience as everybody else's. So their interest is to make sure that there's good coordination, the people that are attending their events aren't impacted in ways by everything else going on. And so, it's sort of a mirror situation. They can't then turn around and tell us, oh, you can't do this because we're having a concert or you can't do that because we're having a game. We have to coordinate, and that's the purpose of the structures we've put in place to make sure there's good coordination.
So you expect there'll be coordination, but not approvals?
We're requiring coordination. In all the documents that we've talked about, including the agreement, including this legislation we're talking about, including the Highway Occupancy Permit that PennDOT requires --
-- but not approval? CITY SOLICITOR GARCIA: And, Councilmember, if I can say from a legal perspective you do not want to be in the business of approving. I mean, that gets into First Amendment and government speech issues if we're saying that you can have this and you can't have that.
I understand what you're saying, but I also think that there might be a time -- and I don't know in what particular instance, but I'm just saying that the City of Philadelphia might at some point have to say this doesn't work because of X, Y and Z and be able to make a call and say this is not going to be a possibility.
So typically the category that falls into that is something that's along the lines of Homeland Security. So if there are life-safety issues that come up around the coincidence of events, we have police powers throughout the city of Philadelphia, the state similarly, also the federal government can step in and dictate exactly what is and what is not going to happen.
I think also -- I mean, we're not new to this, right. We see robust coordination happening down at the existing sports complex, right. We see existing coordination happening through our Office of Special Events under Jazelle Jones, our City Representative. So we're not new as an Administration or as a city proper in working with different entities around coordinating around large scale events or even smaller scale events. So, yes, we will work with Reading Terminal, the Marriott --
-- we will work with all of the entities that even Mike mentioned to ensure that there's robust coordination. So we're not displacing the Flower Show, we're still going to have the Flower Show. And should this deal be passed, we also look forward to having games and different events that will take place at this new site. Regarding the Business Disruption Fund, there is the $1.6 million allocation, but we also have $14.1 million in our CBA or through our CBA that is allocated through the Arena Services District that will also address some of those concerns around business disruption. But I want to go back to a point that I made earlier. Our Administration does not lack political will. We want to see -- we have to see small businesses thrive, Black and Brown businesses thrive, all businesses thrive. That's not going to change with this deal. That's why we didn't just rush to get to yes. That's why we made sure that we did our homework. That's why we made sure that we went on the learning journeys going from different cities across the East Coast to see how other cities did it, what they learned from it and ensuring that we learned from their learnings, from what they did well and what they would do differently should they go back, and that is what's represented here and that's how we could say that this is historic and a deal that we are proud of.
So let me just add this then. So we've done the research, we've looked at all these other places and what they have done. If we have another 14 -- what did you say the number was, 14?
So if we have those funds and we have the ability to use them for this effort to make sure that those businesses don't go out of business, then I would say let's not have this sort of slush fund or pot of gold sort of set aside. Let's really put those funds in and dedicate them. Let's dedicate those dollars to make sure that those businesses are not going to be gone by the time that this arena is built. I think that ensuring that we frontload those dollars now is going to be crucial to ensuring that we have a Chinatown by the time the Sixers Arena, assuming it is going to be built, by the time that that's said and done, that those funds are available. I don't think that setting them on the side and saying, oh, well, we have some other funds that maybe we can put in or maybe we'll bring forward once we run out of the 1.6 because that 1.6 is going to go in like five minutes. It's not enough.
And we have a Commerce Department and an Administration that's going to --
So let's frontload that all now. Let's frontload that all now. Let's not talk about 1.6. Let's talk about whatever the end number is. And, listen, if it's too much money at the end and we have to move some around back to Commerce, that's fine. But let's not start out shorting the businesses that are going to need these funds. And let me just say one other thing real quick because I know my time is up and I'll come back around. Regarding the whole SEPTA situation, I know that some of my colleagues have touched on that. I don't believe, as I don't believe any of my colleagues do either, I don't believe that the City of Philadelphia can sort of sit back and say, SEPTA and Sixers work it out, work it out who's paying for this.
And let me be very clear, Councilmember. We are not sitting back. There's nothing about our approach or what we do day-in and day-out to suggest that we're sitting back. We're in ongoing active conversation with SEPTA and the Sixers. That is not our approach. That is not who we are.
Okay. I'm glad to hear that. But what I want to say is I had a briefing with SEPTA this morning about this matter and they're saying, SEPTA is saying they're not paying for these costs. They're not going to do it. And so, the question is who's going to do it. If they're saying they're not going to, and I know you and I know that you can be very direct and can reach out to them and say, all right, who's going to be paying for the work at Jefferson Station, because you've said that it's not going to be -- the Sixers have said that there's not going to be any cost that the taxpayers have to absorb. This will be a cost that the taxpayers have to absorb so --
No, I want to make sure that I clarify and then I'll kick it over to Mike. With regards to costs, the Sixers are paying the construction cost for SEPTA. We can go through additional details through Mike Carroll.
The construction costs will boil down to the details of the construction itself and that is not fully worked out. We have seen the Sixers propose a couple different approaches to how they want to do construction. I think they're zeroing in on exactly what that is.
I just have a point of information, Madam Bass, just real quick. Is there analysis from your conversation with SEPTA that there would be an increase in ridership if the stadium is built or not?
There would be as long as the service is there. So that service has to exist which doesn't exist after 10:00 p.m.
So the cost to them is more additional services?
Okay. But they will have the increase in ridership so you have to see if you're going to make more based upon the services that you're putting out?
Well, I can't speak to the calculation SEPTA went through, whether they break even, it costs them more or cost them less. But I think what they're saying is that at the end of the day they need more operating revenue or operating funds in order to provide that service --
-- so that service can't just be there on game day. It has to be there every day. Otherwise people won't be able to rely on it and you can't pay the folks who operate just for those game days. It has to be an established service. That's their position on the service.
Okay. I'm going to give it back to Councilmember Bass. But I think SEPTA's number one priority right now should be taking care of the workers of TWU right now that keeps the city moving forward. So, Councilmember Bass.
Well, thank you, Mr. President. And as the sister of a TWU, proud TWU employee, we want to make sure that SEPTA is keeping that in mind, but I guess some of these questions will be brought up because SEPTA I believe is going to be testifying tomorrow or so.
Okay. I thought it was tomorrow. All right. Well, very good. All right. So we'll circle back, but I think that there is some confusion around who's paying for what regarding Jefferson Station and we just want to all be clear and have that laid out. So thank you so much. Thank you, Mr. President.
And we also realize that there's some confusion around business disruption. And to the point that Mike Carroll made earlier, we will make sure that we are working, we continue to work tirelessly regarding accountability to ensure that there is little to no 20 street closures and disruption. That is what's important to this Administration. We do not want to see any small business go out of business as a result of this project and street closures that we have control over.
I do want to thank you for saying that part because I was around when -- I wasn't an elected official. I think I might have been a staffer when the El train with SEPTA, of all companies, played a major role in really not protecting the businesses along Market Street, 46 all way up to 63rd, and those businesses went out of business. And so, hindsight 20/20 we at least had an opportunity to look into as we move forward, particularly traffic flow. And when you're doing construction, shutting down corridors and having the impact of people going in and outside the businesses to patronize them.
And, Council President, that's why we opened with having Mike Carroll here at the table to send a strong signal to the city, to members of Council and whoever's watching today. We care about small businesses. We care about making sure that we make good on our promise around economic opportunity for all.
Yeah. I would just say, I mean we are going to require the Sixers to provide us with construction plans, with what we call maintenance protection of traffic plans which meet the goals we're looking for. So we have the opportunity when we get into the details of reviewing that to identify specific impacts to specific neighbors to specific businesses and ensure that those impacts are not detrimental and that we will rely on the resource that we set aside and make sure we're able to compensate folks when we see those impacts are unavoidable.
Thank you very much. The Chair recognizes Minority Leader Brooks.
Thank you, Council President. First, I want to clarify that I'm a no vote to this procedural vote because I feel like this an example of how this whole process is being rushed. I have problems with the Community Benefits Agreement and I had this conversation before, that I feel like it's a bad deal for everyone other than the billionaires who own this arena. And according to the election pollsters, 70 percent of Philadelphia said that they don't want this. So if people don't want this arena for many reasons, whether it's displacement in Chinatown, low-wage jobs that come with the stadium and people across Philadelphia love the South Philadelphia Sports Arena Complex. But most importantly, this is not the priority this Council body should be focusing on right now in these coming weeks during the time where we have hearings going on about proposed school closings, we have a housing crisis that we're failing to address and an impending Trump Administration that has Philadelphia as its target. I have to ask my colleagues, is this really our top priority right now? There's so many other things that we should be worrying about besides pleasing Josh Harris, David Blitzer and David Adelman and the Sixers billionaire owners that are pushing for a deal that will only benefit them, not the average Philadelphians. They're building an arena that's estimated to cost $1.5 billion which would raise the cost of the land parcel. Independent estimates have shown that they would potentially bring in $40 million in property taxes. The Community Benefits Agreement does not reflect this. So my question is, is the Administration aware of the pollster that has found that 50 percent of the City does not support the Arena proposal and what should we tell them when they ask us? And do you think that the pollsters were wrong about this?
I can't speak to the pollsters, but let me tell you what I can speak to. I can speak to the Mayor's agenda, to the Parker Administration agenda and to our guiding principles. We did not come to a decision quickly or lightly. In addition to the learning journey that we did, we looked also at third-party independent verifiers to look at the terms of the deal and to say, yes, this is a good deal or, no, this is not a good deal. And that's indicative of our approach even when we went to the Convention Center and rolled out the methodology and the step-by-step process that we took to get here. I want to go back to our guiding principles, stewardship of City resources, unlocking long overdue redevelopment of Market East, maximizing the potential of citywide impact, also focusing on large scale development, ensuring City residents and businesses from groups historically excluded from participation have access to employment and contracting opportunities. With regards to the housing crisis and housing affordability, our CBA directly answers that as well. I would like to call up Jessie Lawrence --
-- our Director of Planning and Development to speak to that.
Let me finish all my questions and then you guys can speak because I don't want to run out my time.
Thank you. So we've heard many complaints from Chinatown and surrounding neighborhoods that they were not being consulted about the CBA, and I appreciate you running down the dates that you were able to meet with people. But when you were negotiating the Community Benefits Agreement, which organizations did you consult with locally in Center City and across the city?
So first, I'll call up John -- I'd like to call up first John Mondlak to answer that question. And then around the housing affordability housing crisis Jessie Lawrence can follow him. So, John Mondlak.
Hi again. Jessie Lawrence, Director of Development, Planning and Development. Just to speak to what we're working on when it comes to housing, again the CBA has a $3 million commitment that will be committed to looking at how we can provide seed funding for a larger project, larger program. It's an initial investment that's supposed to work on a range of things that'll really look at how the City can coordinate housing, specifically housing programs in Chinatown. That programming will include affordability opportunities, preservation, rental assistance, senior housing, homeownership support as well. But it'll again be leveraged in what will be also a Chinatown Master Plan. I spoke of master planning earlier. There will be a specific Chinatown Master Plan that will look at many aspects, including housing. Ultimately, it's the Administration's initiative to really make sure that we stabilize the communities through the master planning and then the sowing of the seed investments as well. We're looking at making sure that we are leveraging not just new opportunities but looking at what we have existing ownership and public opportunities as well, making sure that we're looking at ways to prevent displacement, making sure that we're looking at ways to provide additional resources for housing. Again, City-led programs that will allow us to take the lead and take the charge and dovetail into not just one program but a series of programs over the next coming years. (Witness approached Witness table.)
Sophie Bryant, Councilmember Brooks. So an answer to your question about the Community Benefits Agreement, I think John talked earlier during the hearing about the multiple modes that the Administration engaged with Chinatown and adjacent communities going back to 2023. So there was those meetings that DPD and PIDC held directly with community members. The Mayor had several meetings. We heard from Councilmember Squilla. Really importantly, there's the Community Impact Study which is directly sourced from engagement, again, through multiple modes with Chinatown stakeholders. And from those conversations, those modes of engagement, clear and similar themes came up. And I think Chief of Staff Tiffany Thurman ran through those in our introduction. So first and foremost, concerned about the preservation of the cultural community, the ethnic community that is Chinatown, concerns about gentrification displacement both of residents and of businesses, concerns about business closure, concerns about safety and cleanliness. And so, while it's the case that we didn't have a direct counterparty at the table negotiating the CBA, all of those themes and all those insights went into the CBA allocations. And maybe, Councilmember, I think here it's maybe the right time to sort of elevate the Chinatown commitment to be much broader than the CBA. And I think we've talked about in the briefings with Councilmembers this broader commitment that the Mayor is seeking to make to Chinatown and really the Arena project is sort of spurring that closer look and that attention to Chinatown. I think one of the findings that we took so poignantly from the Community Impact Study is that Chinatown's already experienced significant gentrification and change over the past several decades even prior to this Arena project being proposed, and that's really spurred the Administration. And John can run through some of the details, thinking about in each of those areas, cultural preservation, recreation space, business, housing, cleanliness, safety, how the Administration can leverage all of its departments and all of its resources to support and preserve the community.
Councilmember Brooks, if I may, I'd like to also add or ask Renee Garcia, our City Solicitor, to talk about the structure of the CBA. CITY SOLICITOR GARCIA: Thank you. Councilmember, it's important to emphasize that the agreement is between the City and the team. And so, if there is a breach of the agreement, it is on my office to bring that enforcement action. Too many times we have seen CBAs where the City is not involved and, therefore, if there is a breach, then it is incumbent upon these neighborhood associations to lawyer up and try to take on a billion-dollar basketball team. So it is squarely within my office to enforce. We also have other safeguards. We have the money flowing into the City. So the Sixers will make a payment to the City that will go in restricted funds and the payments will go out from the City, specifically the financial budget office will be handling that. There will also be -- it will also be transparent. So each year when the money comes in and the money goes out the public will be able to see where the money is going. And most importantly, as we have found in other cities they did not include the term that will make the CBA binding upon owner after owner after owner. No matter how many owners there are, this agreement will be binding.
And if I could just add quickly, and I apologize for my turning my back, the meetings I mentioned earlier we actually were not talking about in those 10 meetings, the dates that I provided. The No Arena Coalition was determined not to concede that there would be an arena. And so, we really didn't get into it. But when we did the impact study, and we'll provide the dates and the information, there was significant outreach and multiple number of ways to gather information from folks in Chinatown to find out what is your concern, what is your worry, what can we do to -- like, what is the worst-case scenario, what are the things that most worry you if an arena came, and we collected those ideas and those are the things that went into the CBA. We've also had information from the Chinatown community from past studies. They put out their own material to indicate what it is that they're concerned with generally pre-Arena and post-Arena, and we took all of that to try to incorporate and encompass the CBA to address those issues.
And I thank you for that. So the meetings that you guys held with the Chinatown Coalition, were they similar to the meetings that you held with Councilmembers?
Again, as John said we had ongoing meetings with them before our Administration started. That's why it's prudent that John Mondlak talk about that because he was part of the previous Administration. So over the course of the two years we've had meetings with them inclusive of or similar to the meetings that we had with Councilmembers, so beyond that.
Okay. So you've had similar meetings with the Chinatown Coalition over the last two years?
Okay. I'll come back with a second round of questioning.
Thank you very much, Madam Brooks. You're finished your line of questioning?
A second round. All right. Thank you. The Chair recognizes Councilmember Nicolas O'Rourke.
Thank you, Mr. President. And let me say thank you, Chief Thurman and Solicitor Garcia and Directors Carroll, Dubow, Lawrence, EVP Rhoads. I wanted to start this morning by shouting out all the organizers and activists that are here today. I know that there are many folks in the room, all the union siblings in the room 15 is good news. But particularly, Philly's finest UNITE HERE Local 274 is in the house. And this conversation never felt complete to me without y'all in the room, so I'm glad to see y'all here this morning. UNITEs like red. There's a lot we need to talk about, including the prospects for sustaining long-term work that ensures Philly workers are fully respected. And I know all of us in Council are eager to get into the details even more. So let me get into them. I wanted to start my questions by asking the Administration to consider its priorities during this critical time for the country and our city. I echo the sentiments and the concerns of my leader. At a federal level we are staring down another Trump presidency. Here we go again, that the City itself is not prepared for. An Administration that threatens our funding streams, our democracy, the safety of many of our most vulnerable neighbors, particularly some of them in the Chinatown community. We don't assume this. We expected it. The man bragged about it. And now, it's time to reap. And locally, we're facing several real crises, a citywide housing crisis only made worse by the pending expiration of the Neighborhood Preservation Initiative, looming school closures that the Leader mentioned, SEPTA's increasing dire fiscal cliff that we've already talked a bit about, which escalated today with the announcement of the fare hikes. And in the midst of all of that, we're spending our time, if I may say, here today talking about this. We are prioritizing a pet project of billionaires, they got plenty money, instead of the material needs of Philadelphians. With that in mind, I want to ask a few rapid fire questions about the Administration's priorities. When can we expect the Administration to release its plan to protect our city against the Trump Administration similar to the one that was released in 2016?
What we have released January 1, 2024 is the plan, a safer, cleaner, greener big city in America with economic opportunity for all. That is the plan. We're going to stand -- we're going to empower the tool of transparency. We're still focused on housing affordability. The plan, the direction, the vision we double-down on. We don't shrink back from, we don't change course.
Beautiful vision, I appreciate it. There is a major difference in the world today as there is another President-elect Donald Trump. For the record, could you state how many hours we are spending in these hearings focused on an arena that's wildly unpopular? I think percentage was 50, 30, 56 percent. How many hours are we going to be focused on this particular issue?
The answer, Chief Thurman, is 41 hours respectfully. And for the record, how many days do we have before the inauguration of President Trump?
Point of -- I know I can't ask a point of clarification. But I will say that if your question is how many hours our Administration is spending on this Arena deal?
No, I'm saying for the record how many -- we are all in here now, all of us. Could you state how many hours that we're spending in these hearings focused on an arena that's wildly unpopular? The answer is 41 -
41 hours. And for the record, again how many days do we have, and this is to get us to focus and be clear about the issue, how many days do we have before the inauguration of this man? The answer is 69 days.
69 days. So again, there are many things to be concerned about right now. I've listed some of those. I heard the bill ring. I don't know if I have time to keep my questions.
Thank you. And I really, really, really think it is important to note that in the midst of the world shifting and folks responding to what just took place this past week, that the sixth largest city in the country is not focused on what we're going to do to protect the citizenry. We're focused on how we're going to get an arena through when we already got one. Let me move on. There are many shiny promises here, but just as many details are missing. And we're not talking about the small details on the margins. The questions that remain lay at the heart of this plan. As a result, this entire deal to me and to others feels very half-baked. Is it true that Council does not currently have access to the lease that details the developers' ability to buy the Arena site back for a single dollar after the lease ends?
As Renee answers that question, I just want to say before I turn it over to our City Solicitor that the way that we frame this is not just about the Arena in and of itself, but what it unlocks which is why we framed this ask in our public announcement and in the meetings that we've had since then. This is Beyond the Basketball, and that's why even now, especially now, that is very important. But going more to the technical question around the lease, I'll turn it over to our City Solicitor. CITY SOLICITOR GARCIA: We are negotiating a sublease. It is currently 185 pages long. It is done but for the terms that we will be negotiating here. The term sheet that you have, which was provided to the public 30 days before introduction, is the deal. So this is a binding agreement. Everything in the sublease is boiled down to the term sheet. You also have the ground lease between the City and PAID, which has many of the same requirements that are in the sublease. You also have a servicing agreement. Of course, you have the EOP and other documents. To the extent that there are questions about different topics in the term sheet, I'd be happy to brief you. But again, this is the deal. What the sublease is the material terms surrounded by legal gobbledygook, and I'll tell you the first 60 pages are just defined terms in the sublease. And this is how we have negotiated every single arena and big development deal.
Let me just put this on record. In Section 5 of the title of Bill 24 240966, it outlines that ArenaCo can buy the arena at the end of the lease. In Section 16.1 of that same bill, the tenant purchase option outlines that the purchase price is a dollar, $1, and it refers to another lease which elaborates on that option, and we do not currently have access to that lease. Does the City have final cost estimates on the police manpower and overtime needed for this proposal? (Witness approached Witness table.)
I'm sorry. My name is Sam Rhoads. I'm Executive Vice-President with PIDC. And I apologize. To the first part of your question, the repurchase of the property for a dollar relates to the fact that the Sixers are purchasing all of this at their own cost and building it at their own cost, so they're donating it to the City. So they likewise then would get it back at the end.
Does the City have the final cost estimates on the police manpower and overtime needed for this proposal?
We do not have the final cost estimates, but we are working diligently with our Administration as well as with the Sixers on what is needed.
We don't have access to these plans or estimations finalized. Who will pay for the increased costs faced by PPD to provide additional security? I know some of this has kind of been hinted at, but I'm asking for my line of questions. Who will pay for the increased costs faced by PPD to provide additional security?
Currently, the arena owner in South Philadelphia pays for police security both inside and outside of the arena. Presumably, that's going to be what is required here as well.
Presumably that'll be what's required, presumably. Who will pay for the additional costs faced by SEPTA? Again, I know we've had some of this already, but for the record who will pay for the additional costs faced by SEPTA?
Excuse me. For everyone, can everyone speak into the microphone so everyone can hear you because y'all speaking low.
And I believe we discussed cost and operational cost, and the Sixers is responsible for the operational cost for SEPTA for this project. I don't know if you want to come up, calling on Mike Carroll to talk about SEPTA.
I have questions for Round 2, Mr. President. Thank you so much.
So just to respond, the costs for event day with respect to police and staffing are addressed in the Traffic Event Management Plan, and the draft plan that was provided indicated that the Arena would pay for those costs. That they would staff those positions which implies they will pay for those costs. The question about SEPTA operations and services has come up a number of times today. And so, the City's position is pretty clear. We have done our part to support SEPTA. We don't want to get in a position where we're sort of triangulated as a city into fronting more costs and we will not do that, so we will rely on the discussions. We will support the discussions between the Sixers, SEPTA and other parties that may be interested in this to identify the resources to cover those additional transit expenses.
Thank you very much. The Chair recognizes Councilmember Jim Harrity.
Thank you, Council President. My colleague shouted out UNITE HERE, so I guess I should shout out the Building Trades, all my brothers and sisters over here supporting. (Applause.)
Yeah, that deserves a round of applause. Just in general, we keep hearing how this deal is different from other deals that we as a city has been through before. We have experience in this kind of stuff. We did build a few stadiums. We have built a few stadiums in the past. I would just like to know -- I know you guys did your research, so how does this deal compare to other deals that have gone on in similar cities size-wise and downtown arenas? I'm sure you looked at all that. Could you tell us how our deal differs from other deals?
So the first we'll do is talk about the historical context of this and why we came out publicly and said that this is the best deal. So I'll turn it over to Rob Dubow.
Thanks for the question, Councilmember. And there are a couple of ways that this is different from earlier deals. All the earlier deals we had had some City contribution and substantial City contributions. This has no local funding, so that's a major difference. On top of that, the PILOT for this agreement is larger than the PILOT agreements we've had for earlier agreements. In fact, if you combine the PILOT payments for Wells Fargo, the Linc and Citizens Bank Park, add them all together they equal the same amount as the PILOT for the new Arena. The CBA is different in that rather than being paid evenly over the years, the money is front- loaded, so more is spent in the first 10 years than in any of the other agreements. And we've talked about how the EOP is different from earlier EOPs, so substantially different in a number of ways from earlier deals.
Point of clarification, Council President.
The Chair recognizes Majority Leader Gilmore Richardson.
I apologize to my colleague. I just wanted to state, Mr. Dubow, I have the comparison sheet out from the Administration on . You did detail the information regarding the CBA, the PILOTs and the various comparisons as it relates to impact from Wells Fargo, Citizens Bank, Lincoln Financial and 76 Place, but you did not mention charitable donations.
Right. So actually if you add the charitable donations and the Arena -- that million dollars a year, I forget what it's called -- those payments combined are still less than the CBA, and the CBA also has the benefit of being frontloaded.
Just pardon me for the record, because I just want to make sure I have the --
Can you speak into the microphone for me please?
Pardon me. Just for the record, I want to make sure I have the numbers right. Are you saying that everything is frontloaded in the $50 million that you have listed here and that the special service -- let me go back. The $50 million includes everything in the Community Benefits Agreement as well as the charitable donations, because previously there was a $30 million payment that was paid out over 30 years to the Children's Fund and I don't see that here?
That's right, the 50 million includes both and the 30 million was paid out evenly over time as opposed to the CBA which is frontloaded.
So 1 million per year per team for Citizens and for Lincoln, but I don't see that listed here is what I'm saying. It's not listed here.
So in the table I'm looking at says that the charitable donations are included in the 50 million above.
But does that include the 30 million paid to the Children's Fund?
So it does include that in the 76 Place?
So 76 Place doesn't -- so 76 Place is just the 50 million. The earlier contributions had the 30 million to the Children's Fund plus the 11 million Special Services District. If you add those two up, it's still less than the 50 million.
I'll come back, Mr. President. But -- I'll come back to be respectful of my colleague.
You're welcome, Majority Leader. Chair recognizes Councilmember Jim Harrity and then we'll break.
Yeah. I was still, you know, some more clarity on how things are actually different in this deal. For instance, how does the Community Benefit Package compare to other stadiums that were built in other cities that are close to what we are, city of the first class, a downtown arena?
So we had CSL, the outside firm, look at how our deal compared to other deals. It's consistent with the trend of moving towards less local funding, but there are still deals that have substantial local funding. Like Oklahoma City, for example, just had a deal where they put in a lot of their own money. The PILOT payment is hard to compare because for some of the other places they are doing things like issuing debt and the PILOT payment is helping them pay off their debt. So we think it's a strong PILOT compared to other places but hard to completely compare apples to apples since other PILOTs are covering different things.
Okay. I heard my buzzer ring so I'll wait until the next round. But also, I just want to make sure that I voice the fact that I am also concerned like my colleague Isaiah Thomas with the 1.6. I don't believe that's enough. I've stated that in meetings. I'm glad that we're looking at grants for it, but I believe we need to look at that number. Thank you.
Okay. Thank you very much. We will recess until 1:45. See everybody back. (Lunch recess.)
This hearing is now called to order. The Chair recognizes Councilmember Katherine Gilmore Richardson.
Thank you. Thank you so much, Council President. And thank you -- okay.
I'm asking any sidebar conversations can you just please take it outside the chambers. The Chair recognizes Majority Leader Katherine Gilmore Richardson.
Excellent. All right. Thank you all so much and thank you to the Administration for your testimony. I wanted to go back to the EOP. Okay. First, I'll start with the review of the Economic Opportunity Plan that you all have listed as an exhibit to the SDA term sheet. I have some questions regarding the monitoring and compliance. That's in Section 8 beginning on of the exhibit and then the Remedies, Section 9 and Reporting of Section 10. So under the Monitoring and Compliance section, I don't see any specific requirements for frequency of reporting to the Oversight Committee and/or to Council. It states that the developer or the operator agrees to cooperate with the committee and to submit information upon request. I think this language needs to be clearer on requiring certain information to be shared with the Oversight Committee as well as Council on a regular basis, so I wanted to mention that. Additionally, the section 15 on the Oversight Committee only includes information on who will be on the committee but it does not state how frequently the committee will meet or anything else about the operation or governance of the committee. Is there somewhere else in the agreement that provides that information about what we can expect around the committee and the committee's responsibilities? And then will the committee's meetings be open to the public or will they make all their information public or what's the frequency on how they'll also interact with Council and/or the Administration so that we also receive regular updates on the project? And I just want to go through my questions so I can get them all in. " And so, I wanted to know how long on average does the process take? How often has the City enforced these penalties as it relates to EOP compliance? How will the City work with the committee and with Council as a part of this process to ensure we are enforcing any penalties in a timely manner to try to get to some level of correction and/or improvement? And then finally -- and I'll try to get as much as I can in, Pres -- in the Reporting section I see that the requirements laid out for monthly updates during construction, quarterly updates during operations and then an annual report. It states that all quarterly and annual reports must go to OEO, but I wanted to add in and City Council. And I don't see the same requirement listed for monthly reporting, if you could tell me why. And then how will monthly updates be used for realtime tracking? Meaning, not monthly updates but realtime reporting updates. And how will the committee be able to really work with the developer/operator to achieve all the goals as opposed to just overseeing and then addressing everything on the backend? And I ask because -- and I have a few more questions after that and I'll wait until the next round -- but I served on an EOP Oversight Committee for a project at St. Joseph's University when I was the former staffer for former Councilmember Blondell Reynolds Brown. And so, I have very intimate knowledge of this type of oversight in this process, and I do think that we don't have enough realtime tracking within the documents that I have been able to review thus far. So if you all could just speak to that, and then I'll come back on the next round with some more granular questions relative to the EOP. CITY SOLICITOR GARCIA: Okay. Great. Thank you, Councilmember. Nicole and I are going to tag team here and try to remember all of your questions. As far as reporting, so that is on my , you're right that there are monthly reports during the construction period, but then on the ongoing period, right, where things are operating and stable, it does move to quarterly reports and then there are annual reports. The matters that they have to report are included in that really long list of good faith and good faith efforts, which is on Pages to 13.
That lays out the 7 documents that they are going to 8 have to produce to the Oversight 9 Committee as well as the overall 10 reports on the numbers. And I'll 11 let Nicole pick up in a minute. 12 As far as the Oversight Committee, you're right, there is not governance built in here. It is anticipated that the members will be chosen in Calendar Year 2025 and they will work to create their own governance structure. The Chair is chosen by the Mayor and there is someone from City Council on there. So I do not know how that person will report back to Council. I can consider that your business.
Sure. CITY SOLICITOR GARCIA: With your good faith efforts.
Okay. I wanted to just be respectful of the clock and I did hear the clock. Council President, may I just respond back?
Okay. So I think my concern is that we need regular reporting to Council. Even though we would have a member on the committee, that that information would go to the Council President for dissemination to all members of Council. CITY SOLICITOR GARCIA: Sure.
In addition to that, all the information that we should be receiving or that the committee would receive should also go to the Council President and will be disseminated to all members of Council. CITY SOLICITOR GARCIA: Okay.
So that's exactly what's going to happen, absolutely. So that -- that is absolutely what is going to happen. It will go to Council President and Council President's Office and then that will be disseminated to Council in realtime.
Okay. And if you could just respond on the record though the frequency of the monitoring, because you get into a situation where you're conducting monthly, let's say, onsite labor census as an example, and after a month you could be done with that particular mechanical trade or skill or whatever it is. I'm just, you know, being realistic about a project. And so, while you're reporting it and we get the labor census numbers back, that particular trade could be finished at that point. And so, then you'll say, well, we tried, we tried to get somebody but just couldn't do it, but we did report it and we put it in a report, so we did our part there.
I just want to do a point of information, and I've done diversity, equity, inclusion 50 percent on pretty much most of the major development projects in my District rather the Bellwether District, which is the former Sunoco Refinery, Pennovation, Live Casino, but I am talking to contractors and developers and the trades regarding the best-faith-good-effort approach where you can say, I tried to get these individuals Black and Brown to participate and we can't find them, and then just move on. And so, that would be something we would want to work with you from an enforcement standpoint to make sure we're holding people accountable and then also the penalties. I would be remiss if I didn't mention that there was a company that I think we abolished from doing work, I think, where they were acting like they were a minority company but it was a White woman front company, right. They were doing asphalt work and they had it for generations and generations and generations. And just making sure we're on the forefront in terms of penalties and the enforcements of actually abolishing folks from usurping what we're trying to do the right way in this process. CITY SOLICITOR GARCIA: Yeah, and that's a good point. So just quickly, we hear you on best and good faith efforts. They could just say we tried, right, and there's no pipeline. But that's why we've been very specific as to the information that they have to submit, that everybody on the committee will be going through with a fine tooth comb, your designee, the Mayor's designee, there's someone from Law Department, someone from OEO. This EOP is more specific than any other EOP we have seen. And I'll turn it to Nicole because I want to talk about the enforcement, which was just your question, Councilmember, as well.
Thank you. And I just wanted to add in there if you can speak to if there is a diversity strategic plan required for the operation of this facility?
Okay. I'm going to try and get to everyone's questions. Please let me know if I miss anything. As far as the reporting just to double-back, I want to make sure that it's clear, they are required to provide a report to the committee, right, that has that make-up. And that report comes from an EOP monitor which they are required to have by this plan. That EOP monitor has to be an independent party, meaning that they're not biased to the Sixers and they're not biased to us, and that's going to be the person that is reporting in realtime, that's collecting information, that's giving these reports --
What do you mean realtime? Can you clarify? What do you define as realtime?
So an EOP monitor by trade, from what I understand and from talking to industry experts, is supposed to be on the ground and they're going to the actual sites. They're taking inventory of who is on the actual site, who is within the actual workforce. And I can take it as a takeaway to follow up with you guys to see how often that the EOP monitor by trade, but I do know that they are someone that goes weekly, I believe.
Right, and not just that they're going out every day but that we're receiving the information and the data on an everyday basis so that we could proactively monitor what is happening.
Absolutely. And one of the things that we pride ourselves on is empowering the tool of transparency. We are not an Administration that's going to say we tried. That doesn't work for us. And that is not indicative of Mayor Parker and the precedent that she set as the first woman and as an African American woman in this role. We tried won't cut it. We know that from an economic mobility perspective we tried won't cut it. So we absolutely agree with you, Majority Leader Gilmore Richardson, there has to be ongoing enforcement because there are things that are moving on a daily basis with regard to this project. So, absolutely, this is not going to be one of those we'll take it under advisement. Absolutely, that we have to empower the tool of transparency ongoing on a regular basis to ensure that reports don't come out after the job is done and then too late and then we're reduced to we tried. Absolutely, we agree with you.
I will come back on the second round to be respectful of the clock and also of my other colleagues who are seeking to ask questions. And I will also submit --
Right, but just let me put this on the record real quick because we're limited on time.
I will come back around. I will submit every question in writing for written response so that we all have it in writing because I know the quick nature of this process. But also, I want to be very clear that there are certain things that I know me personally, I'm going to speak for Katherine, that I must see in this term sheet as a part of this EOP process in order for me to be satisfied with anything around EOP and diversity, equity and inclusion goals. It's mandatory. It is not something that we can get around or talk around in any way at this point in this process, particularly as the City of Philadelphia. So I just want to put that on the record as it relates to the EOP portion of this. And then I'm going to circle back on the next round of questions relative to the last point I had in the last round regarding the difference in the Community Benefits Agreement and the charitable donations. I do not agree that this is the best deal. I don't agree. Because I was here actually as a very young intern when the Wells Fargo -- I'm sorry, when Citizens Bank and Lincoln Financial Field was negotiated, and we received from that deal alone just $60 million over the 30 years for the Children's Fund. 1 million per team per year for 30 years. Just that contribution was $60 million. That is not included here. And it does say this on of the comparison sheet, but it's not included. It's not included so we'll come back --
So we will go over the economic impact when we come back to that. We would like to respond to the question around enforcement.
So I know that that is a huge topic as it in regard to EOPs when it comes to enforcement. To your point, the City has recently debarred a contractor and that decision we just got back still stands. And so, they were acting as a passthrough entity and we did debar and the court did affirm us. Will it go to appeal? Who knows, but for right now our decision stands. And so, in this EOP there are numerous penalties that are enforceable in conjunction with the Sixers. But I also would like to note for Council because I know that this is very important to you guys and important to us as well. But Council under 17-1600, they may by resolution adopt a public hearing to determine if there are reasonable grounds that a contractor has failed to comply and withholding of payment would be appropriate remedy for such failure. They have that and then they have also -- they can also adopt by resolution a public hearing that if failure is established the contract termination, suspension or debarment shall be the remedy for such failure. And so, in the event that you guys do want to call a hearing, that is an option that is available to you under 17-600.
Thank you, Council President. I will come back on the second round. And I will also ensure that I prepare the information regarding realtime data tracking to be included in the legislation.
Thank you. The Chair recognizes Councilmember Quetcy Lozada.
Thank you, Council President. We've heard a lot about the EOP. And in my meetings with different people -- we've heard a lot about the EOP and in my meetings with different people, I am concerned that there are two EOPs, right. There is an EOP that was negotiated by the Administration and there's an EOP that was negotiated by the African American Chamber. And so, my question is, is there actually two EOPs? And if so, which one will be prioritized, right? And how are we going to ensure that the EOP that is prioritized actually delivers on its goals, particularly reaching historically underrepresented communities, because the EOP that was negotiated by the African American Chamber is very specific to Black-owned businesses, right, or to opportunities for African Americans. And so, you know, this is a diverse city. There are many other cultures who are entrepreneurs and who deserve to be included in this equal-opportunity-for-all situation.
Thank you, Councilmember. I want to make sure that I'm very clear. There's only one Economic Opportunity Plan. There's only one, and that's the Economic Opportunity Plan that we introduced that Nicole spoke to. So I'll now turn it over to Nicole. But I want to be very clear there's not one and then another. There's only one Economic Opportunity Plan, and it's an Economic Opportunity Plan to benefit all.
(Inaudible). So before you respond, in my meetings very specifically with the 76ers they said, yes, we negotiated a 40 percent agreement of the day-to-day operations with the African American Chamber to go specifically to Black-owned businesses. When I met with the Chamber, they also confirmed, yes, we negotiated 40 percent of the operation day-to-day opportunities to go to specifically Black-owned businesses. And so, you know, yes, there's 60 percent, but that 40 percent is not going to be able to carry that arena. And so, I am under the impression and having talked to others that that 60 percent will go to sponsors, sponsors that don't look like me, right. And so, representing a District where 55 percent of the people that live there look like me, I need to figure out how do I include people that look like me in that equal opportunity for all?
I want to be clear there's not only one Economic Opportunity Plan, but we have engaged the Diverse Chambers. So you mentioned the African American Chambers, but there are other Chambers that we've engaged around this plan and we will continue to work with them to ensure that their interest, their members, what they're asking for is represented here and that accountability will not change. So we've met with the Hispanic Chamber. We've met with the Diverse Chambers, so just wanted to be very clear on that. But to the question around the Economic Opportunity Plan and whether there are multiple Economic Opportunity Plans, absolutely not. There's only one Economic Opportunity Plan. I'll kick it over to Nicole --
Can I -- it's a point of information just for clarity. And, Tiffany, this may be something we have to follow up with regarding the Sixers in general. But there is an agreement between the Sixers and the African American Chamber around concessions, the concessions stands, the concessions operators, right. There's like a training program particularly focusing on those who operate the concessions. And I think we've had this conversation, but we're going to put it all on the record as well. But the focus is particularly for African Americans, the 40 percent commitment. And we have allies as well, Black and Brown allies with Councilwoman Quetcy Lozada and others who have an interest in making sure that they're included -Mark, don't laugh -- they're included in making sure that they have a seat at the table regarding this particular process. And so far, that commitment is only between the Sixers and the Chamber. And I think that's where lies the rub, clarity. CITY SOLICITOR GARCIA: I would just be curious to see any agreement because to me, I question the legality of having a specific target like that under Supreme Court jurisprudence. I have not had the ability to look at it or opine as to my perspective on that.
All right. Well, for the record then maybe the Sixers when they come in tomorrow they will talk about their partnership with the African American Chamber specifically as opposed to the whole collective diverse group as a whole as well.
I just want to state that for the Administration we're working with all the Diverse Chambers, including the African American Chamber.
Okay. What I don't want is for us to say, well, the African American Chamber is checking off all the boxes here to be able to deliver on those, that diversity commitment that we're making. And so, because we're relying on that agreement, we're going to -- we're not going to allow for those other ethnic groups to have that opportunity, right. I --
-- want to make sure that it is in black and white that when we're talking about equal opportunity for all, that that equal opportunity looks as diverse as this city is.
And when we came here, right, because we know that there were negotiations and work done long before we got here, but when we came here what we said was that we're not going to be pulled into a fight. We're not going to be pulled into a fight between one Chamber and the other, between one diverse group or the other. We want the whole pie. I've said that on the record before when I was here earlier in the spring talking about our budget. And that One Philly budget and this deal is the same thing. We want to make good on our promise and that includes everyone. That includes all the Diverse Chambers, but we're not going to get pulled into a situation as an Administration where we're pitting one Chamber over the other. So we've met with the Asian Chamber. We've met with all of Diverse Chambers, but I'll kick it over now to Nicole to talk more about our Economic Opportunity Plan.
I appreciate not getting pulled into a fight with the Chambers, but you all have allowed a fight to be created as a result --
-- wait a minute. And it may not be the Administration directly, but because the 76ers have continued the conversation or have made this agreement with a specific Chamber, you have now put the Diverse Chambers into a position where they are going to fight with each other, right, or where they are going to have to try to advocate for the specific group that they represent, right, which is why I'm saying how do we get to a place where we're very clear about what agreement is the agreement we are going to abide by.
That's why we have walked through step-by-step the Economic Opportunity Plan, all aspects of the Economic Opportunity Plan with every Chamber. We've empowered the tool of transparency. Our process is our process. We don't shrink back on our process. We don't do well in defense mode. What we make sure is that what we say we're going to do in terms of making good on our promise, that we will do that. And we'll continue to do that. We won't shrink back. And I'll now kick it over to Nicole.
Okay. So to Tiffany's point -- I'm sorry, to the Chief of Staff's point, minority as I was going over it before for Councilman Thomas is included. And when it says it's African American, it's Hispanic, it's the Caribbean Islands, Asian American, Native American, Pacific Islanders, so all of that is clearly delineated and included in this plan. As a result, everyone should have an opportunity. And I don't want this EOP to be painted as it's going to be an opportunity for some and not others. All of the minorities were specifically included in this plan as far as local workers as well. CITY SOLICITOR GARCIA: And may I -- I have a little bit of an itch so I want to say one more thing. There are a lot of pipeline programs that are funded with the CBA and that we already have in Commerce and other departments and they are not race-specific, right. The pipeline needs to be built for everybody. And to the extent that we are all making good on our progress with building that pipeline, it will create this pool. So I just want to be clear with all of those, there will not be targeting towards a specific race in this city. It's economic opportunity for all in these programs.
I'd also like to note that, for example, we leaned on industry experts. And one of the examples that they gave us was that a lot of times even with apprenticeship programs, they struggle with placement outside of the apprenticeship program just because there is no opportunity for those apprentices to develop. And so, they have a retention problem once apprentices matriculate from the programs. And so, this EOP, right, puts us in a position to create more opportunity for the apprentices that matriculate from those programs because these are places in which there are requirements that diverse workers and businesses are included.
In reading your handout here, that 50 million in the CBA can you tell me how that's going to be divided and who's going to manage that distribution? CITY SOLICITOR GARCIA: I'll tell you who's going to manage it. It will be our friend over here Mr. Dubow. It will be Budget and Finance, some combination. And so, it will be the City.
And how is it going to be divided? Who's getting that and how much is each entity getting?
Thank you, Councilmember. Sophie Bryant. So one of the exhibits that the Councilmembers have is the CBA allocation listing and also a payment schedule. And you'll see in the allocation listing that we've divided it into two different sections. One section for citywide investments and one section for investments that are responsive to Chinatown and adjacent communities, and we can run through the individual line items. What you'll see on each line is what's a description of the purpose of the spending. So, for instance, $3 million to subsidize use of public transit, how much money in total and then what the payment schedule is. So I'm just going to make up the numbers here because I don't have it, I'm not to the right page, but $3 million, $1 million a year starting in the year the Arena opens. As the City Solicitor said, the vast majority of those dollars are going to come to the City so we can ensure that they're put to the exact purpose that's specified in the CBA. A few of the dollars would go straight to the Sixers, so those are dollars for things like free tickets for public and charter school students to go to games and also community use of the arena. So we can -- I'm happy to go through if you want to sort of go into some detail about what the items are. We can just flip to that page. Okay. 6 million, and these are just an order of dollar magnitude. So we'll start with the biggest dollar and then work our way down. So the largest investment in that category, and this is with Councilmember Squilla, is the new Arena Services District. It's a model that's sort of in place down at the South Philadelphia Sports Complex. 15 million and it's spread out over years. So it's basically a 10 sort of level funding amount, about 11 $700,000 a year starting in FY26. 12 Next, we've got the 13 housing support, $3 million. The 14 Director of Planning and Development 15 Jessie Lawrence mentioned at 16 $3 million. 6 20 million. And just a couple more in that Chinatown section, the neighborhood security substation. I think Council President Johnson had asked some questions about sort of security investments. 5 million. As Mike Carroll mentioned, particularly important on game and event days. It's a place to collocate services and responses from PATCO, SEPTA, PPD, CCD, Jefferson security staff. 25 million. And then investments in two master planning efforts, one for Chinatown and one for Market East. And the idea there, Councilmember, is to really bring in the voice of community and City planners and creating a broader vision for both Chinatown and for Market East as these significant developments take part. I'm going to flip now to the citywide investments. 4 million. The largest investment in that category, and it's spread out, I'm being (inaudible) here, for years is Extended Day, Extended Year schooling. And I think, Councilmember, this sort of goes to the Mayor's perspective on this project and the development of Market East is having citywide impact. And the importance of preparing our young people, our folks who are not currently connected to employment or opportunity, our small businesses to give the resources and supports and training so that we can across the city, including in your District, leverage this opportunity. So there's a $7 million investment in Extended Day, Extended Year. 5 million for City College Municipal Employment. They're really a focus on workforce development, preparing both workers and small businesses to leverage the opportunity created by the Arena. 75 million, and this is what Chief of Staff Thurman was mentioning, for the Diverse Chambers, to work with their constituencies to prepare them to access the work both from the Arena but also from that broader development along Market East. We've got that $3 million for public transit, $3 million for free tickets for traditional public and school students.
We've got $2 million Power Up Your Business, an existing program at Community College of Philadelphia, here a real focus from the Mayor on making sure that those expanded offerings demonstrate cultural competency for the range of diverse constituencies that would access them and also are accessible to folks for whom English is not a first language. 5 million to expand the Sixers Neighborhood Basketball League, looking over at Councilmember Thomas here. We've got $1 million for a Business Barriers Fund. And, Council, this is a real priority for the Mayor. She's really sensitive to the fact that for some small businesses having to get bonding, having to get insurance, having to have sort of audited financials can be a barrier to responding to contracting opportunities, so her idea here is let's pull together some resources that are low barrier for our small businesses so they can get the credentials and sort of the credentials that they need to access contracting. Just a couple more to go. We've got $1 million for internships --
I don't mean to interrupt. I sincerely apologize for the interruption, but we are now way past time for that round. And so, I'm going to ask that you conclude.
Okay. And then we will, Councilmember Lozada, ask that you come into the queue for Round 2, and we'll move on to the next member because we have a number of members in the queue. Okay. And remember, we're supposed to have 3 minutes for this round. All right. Councilmember Lozada, are you okay?
Are you good? Okay. The Chair now recognizes Councilmember Ahmad.
Thank you, Madam Chair. I just wanted to reiterate something that my colleague Councilmember Nic O'Rourke brought up. And this is really about a request for critical transaction documents relating to the proposed Arena ordinance. A large scale development project in a city is a significant opportunity to build the economic base of a city. It is especially important now as we are coming off the global pandemic, its long-term impact on Philadelphia's office market and the consequent economic headwinds facing that subsector. That is sure to result in depressed property valuation and create cities budget challenges, but with such growth opportunities come significant challenges as well. As a member of City Council, I remain committed to the economic well-being of our residents and I'm dedicated to bolstering the financial foundation of our city. I believe that as a legislative body we have a responsibility and a duty to review all ordinances authorizing such large scale developments carefully and perform due diligence to ensure that impacted communities issues are duly considered. This includes Chinatown, the Gayborhood, the Washington Square West communities and other impacted areas. We must balance prospects of economic growth with the needs of the community that will face social and economic consequences and the fiscal impact as well as the fiscal impact on City finances. The proposed Arena ordinances must be analyzed with thorough scrutiny to safeguard Philadelphia's interest. And, therefore, we must have a full understanding of the financial legal and operational terms of the ordinances. I had last week requested some key documents from the Mayor's Office that are integral to Bill No. " The primary document being requested was the sublease and development agreement SDA, which is together the Arena lease. The SDA, the Sublease and Development Agreement, fall within the definition of contracts involving significant public interests. By omitting these documents from the package provided to City Councilmembers, the City is not fulfilling its obligation to present all relevant agreements to the Council's review and approval. There are 297 references to the term Arena lease in Bill No. 240966 with specific references to sections and articles within which the full details of the provisions lie. The Arena lease agreement is a complex financial arrangement. It creates long-term obligations and potential liabilities for the City which must be scrutinized by City Council before any such approval. And the City Solicitor's response that this was a binding document, the term sheet that was provided was a binding document. Term sheets are by definition an outline of business terms that are negotiated between parties based on which legal contracts like a sublease is prepared. To represent that a sublease is the same as a term sheet is unacceptable. The term sheet does not legally bind parties and that is why the term sheet for the SDA that was provided with the ordinance package as Exhibit B does not have the parties identified and not signatories either. It's merely basic terms and conditions of a potential business deal based on which the sublease is to be constructed, including requiring elements and sections. So lacking this specificity, we are in need of this and here are the reasons why: The critical terms regarding financial safeguards restriction on maximum debt amount, this is a financial stack we have not seen, requirements for minimum equity investments. Performance obligations and risk- sharing measures can only be assessed with the complete and executed or advanced negotiated SDA. I know they're in work right now, but they can provide us some more detail and give us the negotiated SDA.
Without the full SDA, it is impossible to determine the important safeguards, and commercially reasonable provisions exists such as requirement for audited financial statements from the tenant limitation in structure of capital stack, debt and equity minimums and maximums and securing City's approval before placing leasehold mortgage, termination provisions and cost recovery --
And we can go on. I'm going to -- this has already been submitted to the Mayor. I'll submit it to Council President, this entire document. To say that we must get this information before we're able to see what our liabilities are going to be not just now but in the future. Thank you, Madam Chair.
Thank you, Councilmember Ahmad. And I apologize for the interruption, but I want to make sure we get everybody in the queue. So if you all could take a moment to please just respond to that very quickly and then we'll move on to Councilmember Squilla.
We received a request and we met with you. And I'll turn it over to our City Solicitor on her response that you were affirmative about.
(Inaudible). CITY SOLICITOR GARCIA: Thank you, Councilmember. As I stated before, the SDA is not in final form until the term sheet is finalized. And I disagree with you that the term sheet is not binding. It is actually what will be voted on by City Council and will be binding on both parties. And actually there cannot legally be any mismatch between the term sheet and the SDA. Further, I got your letter and I will respond accordingly. But I'm happy for any Councilmember to brief you conceptually as to any of the questions or concerns that you have, which I think will be more fruitful given the very technical nature of the sublease. Thank you.
Yes. Thank you. Because while you have summation in the term sheet, we need to look at the underlying stack. And if you're able to provide that, wonderful. That's all we're ask -- that's all I'm asking, to be able to see how fiscally sound and what are we on the hook for not just now but 30 years later. So that's really what I want to get at. Thank you.
Thank you. Thank you so much, Councilmember Ahmad. The Chair now recognizes Councilmember Squilla.
Thank you. I'll be brief. I know a lot of people have a lot more questions. But as we talk about enforcement, and I know, Renee, you had mentioned that the Solicitor's Office will oversee enforcement of the CBA and legislation. If there is violations in anything to do with the CBA or legislation, how would that be enforced and what would be the remedies to make sure that they are adhering to what is agreed on? CITY SOLICITOR GARCIA: Sure. Violations of the CBA or the EOP or any of these other documents are violation of the sublease, right. And the sublease has a ton of remedies for -- it could be specific performance, it could be injunction, it could be damages. But for the CBA specifically, I can file a direct breach of contract action which will be much quicker. I can get into court very quickly and file that. It's a pretty simple lawsuit, so that's likely the way I will go. But all of these documents tie together and a violation of any of them is a violation of the sublease.
But there would have to be legal action taken by the City at that point for that violation. It wouldn't be left to anybody else to file a CBA violation or a violation against the legislation? CITY SOLICITOR GARCIA: It would be in the Solicitor's Office, yes.
Okay. All right. And another question I had quickly on how we as a City look at these CBAs -- and I guess, Tiffany, for you, and I know we heard questions from members throughout -- obviously there's concerns and this is what the legislative process is for, to make sure that all Councilmembers are heard during this process. What would be the -- if Council came to a conclusion that they needed additional dollars say in the Business Interruption Fund or additional dollars, is that something we could work with the Administration and with the 76ers in order to make that happen as part of this agreement?
We have worked with you in fact, right, on the Arena Services District. So I think through our actions from the time that we got here to when we came out and said that we reached a deal, to even now with regards to the CBA and the changes that we've made to reflect a $14.1 million investment in Arena Services District, we want to ensure that we make good on our promise but that we maximize the limited funds that we have, so the 50 million. That's another reason why we fought for ensuring that most of the funds were frontloaded, so there's always, you know, we will continue to work with you, with Council.
And last question, as far as the lease, the lease starts when? And I believe it's when they give the Arena to the City; is that correct? And then after that point, explain when does the Arena go dark. And how can we make sure that the CBA if there is a renewal of the lease, there would be a renewal of the CBA or a negotiation part of the CBA? CITY SOLICITOR GARCIA: After the first 30 years we'd have to renegotiate the CBA.
When's it start? When does the lease start? CITY SOLICITOR GARCIA: When does the sublease start?
Yeah. CITY SOLICITOR GARCIA: Before demolition. I mean, we're going to sign it --
So is that 30 years -- so if it's in 2026 or 2027, so that 30 years would start from then? They wouldn't be playing for that time? CITY SOLICITOR GARCIA: I'm sorry if I'm not getting your question. Maybe, Sam, you understand the question better.
The 30 -- Sam Rhoads with PIDC. The 30 years would start in 2031 when the Sixers are anticipated to start playing. So the base term would be from 2031 to 2061 the lease would be expected to be signed if and when --
Pardon me. We cannot hear you. Please state your name again for the record --
-- and proceed with your testimony. We have to ensure the stenographer is able to get this for the record.
I apologize. Sam Rhoads with PIDC. The base lease term during which the Sixers would be playing their games would be 30 years starting in 2031. So running through --
Hold on one moment. Pardon me. They're not able to hear you.
All right. I'm still Sam Rhoads and I'm with PIDC. And so, the lease has a couple of different elements to it. The base term or the term during which the Sixers would be playing is 30 years. It's anticipated to start in 2031 with that basketball season. And so, therefore run through 2061. We would expect that the sublease would be signed if and when this body approves the transaction and commence before they commence the demolition and construction periods, so that would be on top of the 30 years. So it's demolition plus construction plus 30 years.
All right. And then renewal of the lease, if they do want to extend it at that point, is there any language within the lease that makes sure we have to go back to a CBA to look at additional funding because there is nothing past the original 30 years?
That's correct. CITY SOLICITOR GARCIA: That's correct, Councilmember. And did I understand your ques -- were you asking about the concurrence of the lease and the CBA? So the CBA starts before the lease. Is that what you were asking?
The CBA starts before the lease so we have to make sure that if we're looking to do this through the length of the lease, we have to make sure that the resources are there through those 30 years through '61, so we might have to rework some of those numbers also. CITY SOLICITOR GARCIA: Thank you, Councilmember.
Okay. Thank you. Thank you so much, Councilmember Squilla. Before I go on to Councilmember Landau, I just wanted to stop there with a question that Councilmember Squilla posed relative to when the 30-year agreement would begin, which would be 2031. So the initial period would be 2031 to 2061 with the opportunity for 13 five- year renewals; is that correct? How many renewals is it and what's the term period? Is it 13 five-year renewals? I don't have my papers right in front of me, but I remember reading that.
Yeah, I think that's right. The whole thing I think goes 99 years.
Right. So for clarification though, once the time would come to renegotiate for the term what is the notice period? So there's a clause inside of that, the contract documents that talks about the notice that the developer/operator would need to give to the City relative to the amount of time they would have to get back to us.
Whether they're renewing the lease or not.
So the terms of the lease would stay in place through the base term and then through the extensions.
It's inside the documents. I don't have my papers here at the Chair's desk, but I believe it says days. I remember 9 reading that, Section 3.3. Could 10 you just clarify that? It's the tab that says 10 years on the bottom -- 10 days. So it's Bill No. 240966, . It's Article 3 Section 3.3 Renewal Terms. And it states, Renewal terms subject to the rights of the City and the Authority under the article of this lease, following the last day of the secondary term, the term shall automatically extend for 13 consecutive terms of five years each followed by one term of three years, each a renewal term, unless the Authority notifies the City in writing no later than days prior to the exploration of the secondary term or the then current renewal term that Tenant has notified the Authority that Tenant has elected to not renew the term. So if you all could just speak to that because that was, I think, part of what the Councilmember's question was relative to only a 10-day notice if they would not renew the lease. I remember reading that in that bill. If you could speak to that. CITY SOLICITOR GARCIA: Okay. Thank you. We're just -- this is in the ground lease between the City and PAID, right, which is different than the lease between PAID and the Sixers, yes.
Right. But if you could speak to the 10-day notice. I think -- Councilmember Squilla, I don't want to overclarify what you were asking.
Two things: One was there is two separate leases, the ground lease, right, and there's a go-dark provision for that also, right, that if there's so many events not happening at that Arena, that would consider go dark and then that's when the Arena would, I believe, go back to the owners of it so we're not left with a dilapidated property. They would then have to maintain it and that lease would then end. But there's two forms. One is the ground lease and one is the lease between Sixers and PAID. And then at that point do they automatically get to renew that? And if they don't notify us within 10 days, it's automatically renewed. So if it's automatically renewed, how's there an opportunity to re-up a CBA or how's there an opportunity to say, all right, what are we going to do moving forward with the Arena?
Yeah, that's correct. The CBA is for this base term. It does not continue through into the extension terms.
Right, but we want it to. So we would have to change that, correct?
That would be correct, it does not currently accommodate that.
Okay. Thank you. And thank you so much, Councilmember Squilla. The Chair now recognizes Councilmember Landau.
Thank you. Thanks for being here and thanks for answering our questions. What we've been hearing in the questions and answers, that there's still many unanswered questions about some potential costs, things like SEPTA, who desperately wants, needs some investment, and there's a question about who's going to do it. I think all eyes are towards the Sixers. They should pay for it, right. There's also been other questions that have come up where we're leaving it a question mark as to who's paying for it, how we would get additional money. Councilmember Thomas brought up just the 1.6 million in businesses, that that's not adequate. When will we know the final -- when we have a full picture of costs and when will you come back to us to ask us about these costs? That's the first question. And I say this to also echo we have very uncertain times we're walking into now. As somebody who worked for the City of Philadelphia during the previous Trump presidency, I remember about facing much of the work that we were doing and/or adding new resources to it. We have a lot of question marks about what's going to happen to us going forward and what funding streams will stop or not. And I then feel very uneasy about the amount of question marks we have here about who's paying for what and what the full picture of the real cost of this is. And then I want to follow -- I have a lot of questions, but I'm going to stick with the CBA I think at this moment to ask some questions about assumptions that were made about the housing investment, that there's $3 million that's supposed to be seed funding to be leveraged by other funding to create more affordable housing. Why the number 3 million? What are the assumptions that were made? To me it seems very low. It also is creating housing up to 120 percent of AMI which is about $123,000 for a family of three, which is awfully high. Do you have any idea what the average annual income is of someone in the surrounding area, especially Chinatown, as to whether or not they would be able to afford this housing that we're discussing? And I cannot underscore enough how much I don't think that is enough money at all for housing. And then I'll just pepper one or two more while we're in here. I have a lot of concerns also about neighborhood gentrification that will force homeowners and individuals out but also a lot of the necessary services and nonprofits that we have in Center City. There are recovery places. There are nonprofits that support the LGBTQ community. There are nonprofits that are supporting victims of domestic violence. What happens if the Arena causes gentrification that pushes our nonprofits out? What can we do? Are there any protections for them baked in here?
I can -- the first question, there were a series of questions in there. But the first one was a concern around ambiguity of cost. And I want to be clear in the term sheet that's attached to the ordinance, the Sixers are 100 percent responsible for this project.
But what about the things that we don't have an answer for yet? SEPTA is saying it's going to cost $20 million easily, initial investment to subsidize what they need to do for the ridership. And everyone's saying, we don't know yet who's paying for it. We understand they're still in conversation. It's very concerning we're being asked to do something now when there's still so many question marks about who's paying for what in the future.
As part of the Sixers responsibility, they'll be responsible for all impacts that they have to the SEPTA station. Improvements and things like that over and above that would be SEPTA's.
SEPTA doesn't -- let's be honest. SEPTA doesn't have the money for this, so someone has to pay for it.
So we'll answer your questions around housing affordability, Councilmember, and neighborhood gentrification and pushing out nonprofits.
Hi, Councilmember. Just to be clear, so the master planning effort dedicated to Chinatown -- I'm sorry. Jessie Lawrence, Director of Planning and Development. The 3 million that has been called out again, it is supposed to be seed funding so we understand that that number doesn't necessarily do the impact that would solve the housing issue, which is why it's supposed to be part of a larger program that will more comprehensively define where the funding for housing would go. We are tying ourselves to a Chinatown commitment coming out of that housing plan, making sure that our master plan looks at comprehensively not just housing but how quality of life is to be maintained, making sure that we are eliminating barriers to maintaining such, making sure that we are minimizing any drivers of gentrification, anything that goes against maintaining the heritage and cultural aspect there. In terms of -- I'm sorry, your other question was?
It's about the nonprofits and the nonprofit organizations in the neighborhood that are necessary.
Yeah. Well, again that is part of the grander plan which is making sure that we are having this master planning effort to make sure that the stakeholders who are part of that process are at the table to guide us to make sure we understand what the issues may be, what they need to sustain themselves. Again, we're looking at different funding mechanisms in addition to this and that's why they are important to be part of that conversation to make sure that they can guide us to attach to the things that we need to sustain.
I have to pop in again just to say we based all of this around certain assumptions that I think will change as of January 20th. We are basing thoughts of funding streams and how you leverage $3 million based on a past model that's going to change dramatically. And I'm really worried about the fact that we have two pots of $500,000 each, half a million dollars each. One that's going into Market East Master Plan and one that's going into a Chinatown Master Plan, but that should have been done a long time ago. How can we backend that? We're supposed to again approve plan and go forward, but why does the approval come before the plan? And the plan is based on something we don't even know yet because things are about to get pretty bad.
I think I could add a couple things. First, the impacts from this won't happen until at least 2026. And again, our belief is that there's going to be minimal shutdowns. And again, there will be impacts for sure, but we don't think they're going to be anything as extensive as people keep mentioning Market Street where the whole street was shut down. So these are going to be minimal. The roads won't be closed except for rare exception when they need to deliver a crane or something. By and large you're going to be able to get through. So there's not going to be dramatic impacts. But we -- and again, we've talked about a fund to be able to help offset any problems that do occur, but we need to -- we're already starting to think through how we're going to do a plan. I don't know that the million dollars is going to be enough. I think that we will be able to look to other partners to help fund stuff. We have money that we do plans that we might be able to use internally. There's also plans happening right now. The Stitch is fully funded, like $163 million, and part of that is a plan. And so, the work that's getting done for that will be used, but it's already going to be done, it's already going to be paid for by some other source. And of course, all the work that the community has already done and anything we've done, the first step is to always gather up all the known information. And so, that has to be part of it to make it as robust as possible to address things that we're all talking about here like traffic, affordable housing, are there affordable housing projects coming off affordability that we can stabilize, what properties does the City own, what properties does government in general own that we can maybe look towards, an eye towards making available. So that would be an added contribution that's not part of any of the numbers we're talking about. We also -- it's interesting. We have a dichotomy here. We have Chinatown worrying about gentrification both in the cost of housing but also the affordability of commercial spaces. And yet on Market Street we have a dearth of available space. It's unbelievable. Everybody probably heard the Giant is closing at the end of the year. Jessie has a thorough analysis of every retail space. So between trying to think thoughtfully about how we can protect Chinatown from gentrification but also make it easy for that fear of business that's coming in and going to take over to guide them towards Market East where we have endless space, unlimited transportation, and I think that if you do it smartly, you can steer some of that and you can try to minimize the impacts. Can we guarantee there's never going to be a negative impact? Of course not. But I think by doing as much planning, as much thoughtful exercise, as much engagement, making sure we collect all the ideas, we collect all the problems, all the concerns. And if we're thoughtful and deliberate about it, I think we can make significant impact in making sure that the impacts aren't as significant as people worry.
Can I ask one last legal question just to tie this CBA part up?
But for the record, I do not think 50 million is enough. Yes, thank you, Renee. I know that you added to this agreement, the ability that -- the entity that would enforce the CBA or the EOP is solely the City, the City Solicitor's Office, to take the burden off RCOs or community organizations from actually suing, but I can imagine a scenario when you know we fully trust you and know you're all in and whatever but you're not here, where we might want a community organization to have the authority to also file the lawsuit if the City doesn't do it. So I'd appreciate an or clause being put in there that the City could do it and then some version or the community group to give the community the enforcement teeth that it needs just in case the City doesn't do it for them. Thank you. CITY SOLICITOR GARCIA: And I understand that sentiment, I do. But it is solely in my shop to do it because it would be unmanageable if all of a sudden all these nonprofits started suing and I lost control over that, and it could be that the Sixers gave money to the City and then the City hasn't paid out because maybe there's a tax hold with that nonprofit, right. It gets very uncontrollable very quickly. And I do think that this is -- from what we have seen, I do think that this is the best way because if a nonprofit tries to sue, they will be bled. I mean, they're up against a behemoth and I do think the Solicitor's Office carries the authority and I sincerely believe that's the best way to go.
Thank you. I just had a SEPTA question. And, Sam, could you sit there for a second as I go through this process. When we built the stadiums Lincoln Financial Field as well as Wells Fargo Center, when they were built during that period, did the teams pay for the increase in ridership that came as a result of them building the stadiums?
No, they did not. The teams had no responsibility for that. 2
During that time. You 7 said the teams paid for the increase 8 in ridership? 9
So why are we -- so what's 17 the difference between then and now? 18 Is it because it's going downtown 19 there's going to be an increase in 20 ridership versus in South 21 Philadelphia? Just trying to -- 22
Neither in 23 this case nor in that case are the 24 teams being asked to cover.
So is the requirement increase in ridership for -- is the requirement for the Sixers to pay an increase in ridership as well as the infrastructure of the subway station? Chair recognizes Councilmember Jamie Gauthier for a point of information.
Point of information, Council President. It's not just that SEPTA would have to increase service or experience operational cost. I think we're on this topic of conversation because the Sixers, themselves, have noted that their traffic plans don't work without 40 percent ridership. SEPTA has been very clear that that will not exist with one- to two-hour service at Jefferson Station. So this is not a result of an unfair burden being placed on the Sixers. This is the Sixers own plan and that it hinges upon these investments at Jefferson Station.
So the way that Councilmember Gauthier laid it out is sort of the sequence that creates this situation. Go back to your original question, what makes South Philly different. It is a fact that that's the end of a line, which makes it easier to service because all the trains are going to end up at the end of the line anyway. You can store trains at the end of the line and then wait for the events to let out and then use those trains to get them out. You can store trains along the Broad Street Line. So operationally, it's easier to manage that. The fact is that the way the Broad Street Line runs, the capacity of the trains, the frequency of the trains, it's a more straightforward proposition. But it's still SEPTA's responsibility to work that out in both cases. And so, the situation here is that SEPTA is telling everyone, and we're still waiting for more detail, but they're telling everyone what they need to do operationally to provide the capacity as events would let out at Jefferson's Station. And what they're also telling people at the same time is that currently that's not something that we have the resources for. So the question is where do those resources come from. And I think the thing we're trying to be firm on, and just not to repeat to death, but we as the City have done our part to answer that question. We have put forward resources in the 2025 budget. We've put forward additional resources in what we're proposing in the CBA to answer that question. And I just want to be clear, we don't want to get cornered as a City in a conversation that we are a party to but we're not directly involved in, in committing more City resources to answer that question. So we do need that discussion to evolve and develop and continue. And we are monitoring that. We're a part to making sure that the information is shared.
So your summary is it's not on us. It's on the Sixers to figure it out. Chair recognizes Councilman Jones.
Thank you for that insightful question, Mr. President. Simply put to give you an answer, there's a big difference between going north and south and east and west. Thank you, President.
Thank you, Councilman Jones. Councilman Jones dropped that mic over there. (Laughter.)
Mark, I think we are in South Philly though, right.
All right. And what's the dollar amount as well? Have they expressed what is it, 20 million, 30 million?
So we have seen with respect to day-to-day operations during events a number that ranges around million, but we haven't seen the detail as to how that's been developed.
Just wanted that for 12 clarity and recognizing the 13 difference between the requirements 14 from in the past and the 15 requirements now, so very well 16 explained. 17 The Chair recognizes 18 Jeffrey Jay Young. 19
Thank 20 you, Mr. President. And just for my colleagues, right, just for some information, if we're concerned about transportation, we're concerned about SEPTA, if we pass this legislation before SEPTA and the Sixers enter into an agreement, SEPTA will lose all its leverage in any kind of negotiation, any type of deals. So let's keep that in mind as we move forward, right. So with that, although it's been touted that this is the best deal, things like that, but I just want to let folks know who are in these chambers who are watching, who are listening, all the stakeholders to let them know in the history of arena or stadium deals, there has never, never, ever, ever, ever been the economic benefits reached that has been stated. And let me repeat that. There has never been the economic benefits that were stated attained by the cities that say that these are going to reap these benefits in history. In fact, no arena has even come close to return on investment. And I think that the Administration's own consultants would agree with me because they did, right, when I made that point. So let's put that on the table. That's the premise of, I guess, my apprehension about this particular deal, right. Regarding the CBA, right, did the Administration attempt to negotiate a higher number other than the $50 million?
I'll talk about the economic impact for a minute because we share your concern about the economic benefits of arenas and how they compared to studies. So we were very careful with our outside consultant to say that we wanted this to be a different type of study. We wanted them only to look at new events in the arena. We wanted them to only look at spending in the arena, so none of the kind of indirect or in induced multipliers you usually see in those kinds of studies. And we also wanted them to do a sensitivity analysis, which they did. So in their analysis, they're pretty confident based on their research what's happened in other places with two facilities or multiple facilities or other cities around our size that we'll get 53 new events. But their sensitivity analysis showed that even if we got a few as new events, there's a 18 positive impact. And in part, that's because we're not putting any money in. So whatever new --
I get that, right. There's a positive impact but that's all relative, right, because I don't think that the City has done any examination of what other uses this particular site could have that will also reap positive impacts, right. So I think that that's all relative because you've only been focused on building or developing an arena at this location and not developing anything else at this particular site.
Yeah. So what our consultants did was also looked at kind of what you're talking about, the displacement effect of having that arena there, like where else would that money have been spent. So they did account for that in their analysis to get to the positive numbers that they're showing.
And again, can you answer -- I guess I asked the second question, did the Administration attempt to negotiate a number higher than the $50 million CBA?
When we got here on day 1, January 1, $50 million was negotiated in the CBA and what we wanted to ensure that we stretched that $50 million as far and as wide and as strategic with upfront dollars more than what we've seen in other past deals from a historic perspective that these gentlemen flanked to my left and my right could say based on other deals that happened. So of the 50 million, this is the allocation that we came up with.
But given that this is a new Administration and given the autonomy, right, of a new Administration, why wasn't a higher number negotiated? Like why did you stick to that $50 million?
So we looked at not just the $50 million within the CBA because, again, this is more broader than just the CBA. CBA is important. The $50 million is important, but we also looked at the economic impact study. We looked at the PILOT, U&O tax. We looked at this deal comprehensively, and that goes to that Sam chart that Sam Rhoads developed that was referenced earlier today. So we'll go down to the Sam chart and talk about that --
Looking at the deal comprehensively and future outcomes, I still don't think that this deal -- I'm going to tell you what I think this deal is worth, right, from talking to other experts in the field, in the industry. Let give you an example of what happened in the early 2000s in Los Angeles, right. Los Angeles developed an airport. They had a robust CBA. The value of the CBA for that airport was half a billion dollars. That's the value of their CBA. Looking at this deal, this deal is worth $300 million to the City. We are getting one-sixth of the value in the CBA. And that's because again there have been no 13 arena deal in history to prove those benefits that they said. So we want to get the money upfront. Great, y'all negotiated to spend the money upfront. Great, right. But that money upfront is not -- it's only still one-sixth of the value of this deal when you look at everything in totality. So I guess another question that I have is, you know, I just can't understand why was the -- this Administration has set to do things on their own terms and do things their own way. But when it comes to this deal and this Arena, you're set on something that was passed on from the previous generation -- previous Administration rather. And so, for me I'm just trying to figure out what did you negotiate in this deal that wasn't negotiated in the prior Administration?
So in addition to the allocation of all of the caveats that Sophie Bryant mentioned earlier with regards to the 50 million, in addition to that we also through the third party independent verifier we looked at, the consultant that we settled on, we worked with, we looked at 19 other different plans. So we don't just tout that we have or we landed on the best deal possible. That's based on data and science that we made transparent in the report that we shared publicly on the record that was televised at the Convention Center. Now, from a --
Mr. President, may I add that those deals that they have researched and touted there were bad deals as well, right --
-- so if we're going to keep touting bad deals, right, I mean they're bad deals. I mean, I agree to that. I would say that the arenas that we have now currently they were bad deals when I studied them, right. So it's just that we can't keep touting a bad deal, right. I understand it was the best deal that you probably could negotiate, right, the best deal you could negotiate. I understand completely. But it's still a bad deal for the City. It's still a bad deal for the overall economic viability of our city long-term. It's a bad deal for those local communities. And I just need to see more in it, right. If we're going to -- we're giving this away. I talked to some folks, we are giving them this Arena deal for one-sixth of the value of what this could be. And I really think that we're -- if we're talking about jobs, we're talking about schools, right, we're talking about our rec centers. I have rec centers in my community that need roofs. That have HVAC problems, need brand new electrical systems. Why should kids in North Philly not be able to play in a new space but the Sixers get to play in a new space? Why they got to keep going to these crappy schools with asbestos and things like that, right? Why is that, but the Sixers get a new space? Why is that? (Applause.)
We need to -- and given an economic outcome with this new president that's coming in, we have to stick to what we can do and use our leverage as a city to get the most bang for our buck here, and this $50 million ain't it at all. Thank you, Mr. President. (Applause.)
I think whether we're talking about rec centers, right, rec centers -- now, when you talk about rec centers and slides and swings, that's my language as the former Chief of Staff of Philadelphia Parks and Recreation. I know this department through and through. I know our assets and our infrastructure through and through. I know where the needs are. And that's why I'm honored to serve in this role as Chief of Staff serving alongside of Mayor Parker to look at all of our assets, all of our infrastructure. We're looking at the citywide impact that this can make. That's why we're framing this as beyond the basketball. We're looking at how we can get the best bang for our buck with the limited resources that we have. To that end from an economic impact perspective, I'd like to turn it over to Sam Rhoads to talk about the economic impact analysis that we conducted under our Administration after we got here and why we're saying it and while we've been able to prove that this is the best deal.
Yeah, a couple things. I mean, one of the most important things to keep --
Sorry. I also just want to say this. Since we got here, even before we reached the deal, even before we came out and said what our position was, these same people that have said that this was a bad deal, they were saying it then before we even came to a deal and they're saying it now. So what I want to make sure is I want to make sure that we get on the record the analysis, the methodology, why we didn't rush to make a deal in January, why we didn't rush to make a deal in the springtime or even the summertime, we were strategic in our approach. That's what I'm asking Sam Rhoads to talk about.
Thank you, Mr. President. So this $50 million CBA, right, that has been thrown out for the past two years. It's the same deal, so that's what I'm getting at, right. This is the exact same deal that was put forward during the Kenney Administration. So again, it's like you've done this economic analysis and we appreciate that, but it gets us back to the same thing that we've been talking about for the past two -- before I was on Council, right, I was just on the outside looking in. But it's the same terms, it's the same terms. I'm trying to figure out what were you able to negotiate? What's new that you were able to negotiate that the previous Administration could not?
We'll go to the tax revenues first and then we'll take it over from an economic impact analysis. Then we'll take it over to Sam Rhoads.
Yeah. So what our independent analysis from CSL, the firm we hired, showed was that this is worth $700 million in local taxes between the City and the School District and another $350 million for the Commonwealth, so that's what we're getting out of the deal. Without any City money going in, we get tax dollars. And with that, I'll turn it over to Sam to talk some more.
Yeah. So I want to underscore that in this transaction the Sixers are acquiring the land with their funds. They're donating it to the City of Philadelphia and then releasing it back out to them. So as the Sixers propose this transaction, there is no City investment in it. And so, therefore all of the net new revenues are indeed net new revenues. The $50 million CBA comes on top of that. So not only are they not asking us to invest dollars, but they're also offering to put the $50 million on top of that. That is unusual across the entire country. So in order to compare apples to apples, you'd have to look at transactions that were privately financed without City funds and then further look at their CBA. With respect to the tax revenue projections, as Mr. Dubow indicated the City of Philadelphia, and I can't speak to other cities, but the City of Philadelphia has always and has continued to take an incredibly conservative analysis of these revenues. We are looking only at net new events. These are events that would not happen in a single arena scenario, so these are net new to the City of Philadelphia. We are only looking at revenues that come from within the Arena. We did not look -- and I'm just repeating what Mr. Dubow said. We're not looking at induced impact. We're not looking at indirect impact. We are not looking at multiplier effects. We are looking at actual experience with wages and sales on revenues at comparable facilities. That is not what the industry standard is. That is much more conservative. So with all of those guidelines, our consultant went through each individual tax, the PILOT payment, the wage taxes from these net new events, the City's 2 percent portion of the sales tax, the beverage tax, the amusement tax. The only tax that we looked at outside of the Arena is parking taxes. And again, that was only with respect to the net new events. BIRT, Use & Occupancy for the school as well as liquor for the school. And as we indicated, those numbers based on those conservative assumptions just based on net new adds up to $700 million. (Applause.)
And in saying that, right, that adds up to $700 million. But again, what makes this deal better than any other arena deal in the history of arena deals to show that we are going to net that money? Nothing from what I've seen so far guarantees me that we're going to get this money, right, when no other deal has ever come close to getting any of the tax benefits that they say they're going to get. What in this deal is like you know what, this is it, this term, this clause, this is the thing right here that's going to make us reap the $700 million?
So what's different for us is there's no local money in the deal. So that's different from any other stadium --
There's no local money for now because there's a clause in there --
-- that we reached in the agreement that we reached with the Sixers --
-- provide public funding, they're going to get some money.
-- there's not local money in the agreement that we reached with the Sixers. That's never happened before with an arena deal here. And in terms of the 700 million, we agree with you maybe it won't be 700 million. That's why we asked for sensitivity analysis. Even if instead of 53 new events we got 18, there's still a dramatic positive impact. So, yes, there's no guarantee, and that's exactly why we wanted to see what it would look like if there were fewer events.
Right, because there's no guarantee. That is my concern with the $50 million. That's why there needs to be more because there is no guarantee that the City is going to get those benefits 30, 40, 50 years from now. That's why we need more.
There's a guarantee that we will get benefits and it's with no City dollars going in.
It's no City dollars for now because there's a clause in there that says if any other competing entity gets public money, then we owe the Sixers money. So there's no public money in it for now.
There is no 16 public money in the agreement. That's right, that's where we are.
You're welcome. The Chair recognizes Councilmember Nina Ahmad.
Thank you, Council President. I just want to wrap up my comments that I was making earlier. I know there's time issues, but I just wanted to reiterate the ground lease lays out the core foundation of why we as a City would justify accommodations, use, offer favorable tax tools in exchange for significant potential economic gains. It includes language that states, Improves public use. These languages that help justify why we would not charge the real estate by formula as we do all other investments, charge U&O taxes based on established formula for occupancy and rate. That's PILOTs and U&O tax settlement agreements are set at a negotiated amount, usually much lower than what would be by application of criteria and formula that you and I would be subject to. It is done clearly on the promise, and I would say subject to our due diligence that those projected economic benefits stand as in any business transaction when we trade lower or cap taxes for potential economic benefits, then we need to have some offsetting formula to stave off or clawback -- let me repeat that -- clawback some of those giveaways so that we as a committee have a fair deal. So that's the reason for wanting the details. And I just wanted to underscore that for everybody's benefit. Thank you, Council President.
You're welcome. The Chair recognizes Councilmember Isaiah Thomas.
Thank you, Council President. You got great timing, man. I don't know if it's your energy or your ability to do this. I want to take some of the energy from Councilmember Young and see if I could help out a little bit with some of this stuff, right. So in the deal it says $3 million for public schools to go to games. Is the Administration open to removing that component? Let me say why. On a Tuesday night against the Washington Wizards, excuse all of my Washington, D.C. elected officials. Folks ain't going to that game, right --
Time, time, time. Isn't the MVP like on load management or something?
Yeah, I was going to ask the Sixers tomorrow about that, but that's another conversation.
So on a typical Wednesday night the Sixers are going to give those tickets away anyway. That's going to happen. And all of those people that were here earlier, some of them are still here, some of them are not, they can tell you that a lot of their organizations, we had a lot of Black men up there, Councilman Phillips, 18- to 25-year-old young Black men, those young Black men who are up there, they could tell you firsthand they get those free tickets already. So I'm looking at the $3 million for free tickets -- I know this is going to sound a little hypocritical, but the $1.5 million for basketball development, the Sixers put up $6 million maybe for just the Sixth Man Center alone over a one-year time period. So what does it look like for the Admin to be open to working with Councilmembers to renegotiate some of the things that's in the $50 million current proposal? But then also as I asked you earlier about the 1.6 million for business development, you told me that you're confident that you will be able to work with private sector partners and other folks to be able to generate more revenue. If my hypothesis is correct, you have a plan for that. So I think based on listening to some of the information around SEPTA, looking at some of the things that's in here that may be well- intended but dollars can be diverted elsewhere, is there any appetite from the Admin to renegotiate some of these things to put us in a position to be able to find something that is a little more beneficial to the City of Philadelphia than what we have in place right now?
We stand by the CBA that we introduced, right. But we also have had robust conversations with members of Council, with also community members as well as local civic associations. To that end, the outcome or outgrowth of that is the $14.1 million to the Arena Services District. You know, one of the things that our Mayor always says is Don't go by what I say, watch what I do. I think if we look at what we introduced at the Convention Center versus what we have here now, what we rolled out at the Convention Center versus what we have here now, that's the outgrowth of ongoing conversations even with Councilmember Squilla. So don't go by what we say, watch what we do, right. We want to make sure that whether it's the CBA, the EOP going to some of the points that were made earlier by Majority Leader Kathy Gilmore Richardson, that it's the best deal. It's the best deal --
-- I can't speak to the specific games that you were talking about nor can I dribble a basketball, but what I can say is that we want to make sure that we're making good and that we're not just throwing just random things to the children that matter most important to us, not just in the public schools but in the charter schools as well as is written here in the CBA.
So I heard the buzzer. So as I close out, and I'm not going to come back for a second round. I'm going to be open to negotiations and dialogue. As I close out, notice I didn't say anything about the City College for Municipal Employment, right. I didn't touch that because we understand that that's a pet project of the Mayor and I get it, right. But respectfully, if you want nine votes, you're going to have to negotiate. I don't know a person who came into this hearing today, maybe two or three, who's like this is a great deal for me. I think that you have to take the position of there are some of us who are open to a conversation. There are some of us who already made our mind up. There's some of us who haven't made our mind up. But right now as is, right, I'm a basketball guy and I'm telling you 1.5 million for basketball expansion is a bad idea on what to do with the CBA. Some of this stuff is going to have to be a good faith agreement, right. We're going to have to say, listen, if you want to be a partner of the City of Philadelphia, giving out free tickets is what you supposed to do. That ain't a CBA thing. (Applause.)
If you want to be a good partner at the City of Philadelphia, expanding basketball in neighborhood initiatives, that's what you're supposed to do. I just got an invitation from a Tyrese Maxey Foundation that he's giving out 2,000 turkeys. These people do this stuff already. They do. We just honored Marcus Morris in City Council earlier this year not because of the basketball player he is, but because of all of the philanthropy work that he does in the City of Philadelphia. We legit gave him a key to the City because he does more than 99 percent of the NBA players who are from Philadelphia and he comes back here and does this stuff on a consistent basis. So I think that if we're going to get to a space and a place where we're going to come to an agreement that we're all comfortable with, clearly some Councilmembers are more frustrated than others, but there has to be an appetite on the position of the Admin to negotiate some of the positions that you've taken so we could put us in a position whereas though we all feel like this is a good deal for the City because I think you're hearing a lot of resistance. The last thing I'll say, Council President, and I'm listening to my colleagues and this is all being recorded, I heard schools brought up a lot throughout the course of today's conversation. And we all know that we have a $7 billion tab as it relates to school facilities alone. So when we go into budget negotiations next year and we all got our priorities, I'm hoping that based on today's energy that school facilities would be something that we'll be willing to sacrifice a little bit more for because I don't hear school facilities or anything around buildings in this conversation right here. So when we come back at your next year's negotiation, I hope a lot of us got this same energy because in order to get real money for our buildings, we're going to have to give up some of our pet peeve projects in order to put us in position to address some of the issues with public education. So if we're going to use that as a tool for negotiation, let's keep that same energy next year when we're on the floor begging saying, nah, don't put money there, right, put money here, because there's a chance we might have to increase, what, we went from 55 percent to 56 percent, we might got to go to 57 percent next year.
We're talking public education, right. And if that's a real thing and we're really going to use that as a part of our negotiations which I'm 100 percent for, right, that's going to have to be we're going to have to be -- we're going to archive this moment. And I'm really talking to my colleagues more than anybody. We're going to have to archive this moment and make sure that this is the same appetite we have next year in budget negotiations because we're going to have a huge tab on our hands. So as the Chair of the Education Committee, I love the energy around this but I got to make sure I put a pin in that because I know it's on the horizon next year working with the School District and knowing what the plan is and the direction we're going in.
So, Councilmember, you don't have to put a pin in it because we're working on that now and we're working alongside of you working with the School District.
With all due respect, you know I know. I'm in that conversation. I'm a part of that negotiation, and I'm also listening to issues related to the change in President and that having an impact on things. So we know firsthand next year when we go to talk about public education and funding for public schools is going to be a huge fiscal deficit from the operating and the capital side. So I just want to make sure that we have that same energy next year. But please as I close out -- I'm sorry, Council President -- please I'm challenging the Administration to be a little flexible with the CBA. You heard from Councilmember Young, you've heard from other Councilmembers. There's questions about SEPTA and a lot of other stuff, but we really need y'all to be open to negotiating to a conversation around how this money is spent and it needs to be done in a way where we're all a little more comfortable, because I think right now we're clearly communicating we don't agree with all of the terms in here and we're purposely not talking about y'all pet projects. We haven't touched them at all.
So I just want to state for the record I can't dribble a basketball, but I know economics and I know economic impact and I know economic mobility. I understand that through and through. Okay. You mentioned the Tyrese Maxey Foundation. Again, can't dribble a basketball but I can tell you about Tyrese Maxey and his Foundation because they have partnered with and stood with the Administration on some amazing projects --
And as it relates to whether it's the City College for Municipal Employment, PHL TCB or other investments that we're looking to make through this CBA, there's nothing pet or a project about that. And, in fact, this Council affirmed that in our One Philly budget, in our One Philly budget. So CCME is not a one-and- done or one-time investment. It's not just a good idea. It's not just a pet project. It is a policy that we stand on. As they say we're talking about Tyrese Maxey and basketball and with standing on business, right, this is our approach to standing on business when it comes to investing in these projects that this Council affirmed were good projects, not just pet projects, not just one-and-done projects that were good ideas but systemic ideas that would move the needle in the right direction. I appreciated that affirmative vote earlier in the year and I appreciate the support here. And absolutely, Councilmember Thomas, we will continue to speak with you not just about school facilities, not just about public schools, charter schools, all the schools because that's what we stand on.
So, Council President. Let me just clarify. I didn't mean to offend you when I said pet projects. What I'm saying is that these are initiatives that were created by Mayor Parker and her team that we didn't have before that we now have. So when I'm talking about some of projects like Extended Day and Year, that's a great thing. Yes, we voted for it because we feel like it's a phenomenal idea. We're not touching that. I'm not suggesting to touch that. When you talk about the City College for Municipal Employment, yes, that's a great thing. So when I say pet projects, I do not mean to offend. I should have used the term ideology or ideas that came directly from this Admin that didn't exist before you got here. All of those things are amazing. We're not touching them. I see where you're going. But I just think that there are things that are in the proposal that I'm asking you all to be a little more flexible about. In order to put us in a position to be able to offset concerns that Councilmember Young communicated, councilmember Landau, Councilmember Ahmad, Councilmember Gauthier. I mean, I'm listening to everything everyone's saying and I do think that there's a way to solve some of this stuff, but I don't think it happens if the Admin does not have an appetite to negotiate the current positions in the proposal that you've communicated to us. So I think what I'm asking for is just a little flexibility from the Admin to put us in a position to negotiate some of the things that's been communicated today in order to see if we can find a little more happy ground, right. Politics is about negotiations. A good deal is one where everybody walks away with something but nobody got everything they want. So I'm asking you guys like, you know, not to get everything you want and see if it's possible for us to walk away with something. I don't know if that's possible. I'm just going by the temperature of the Councilmembers and looking at the Council President. I just don't think that this deal right here is the best deal for the City written as is. Thank you, Council President.
Thank you so much, Council President. Just help me out here for clarification regarding the CBA. Everyone keeps talking about the 50 million. Is it that there's consternation relative to the amount? Meaning, is 50 million a cap or is there consternation within the sort of different concepts and things listed in the CBA? Meaning, all the different allocations? Meaning, are you all stating, and I want to get this on the record, are you all stating that million is the cap on your end? Meaning, we still have to do our own negotiation so I don't subscribe to the fact that this is an endpoint. To me this is a beginning point, but I'm trying to get clarification on what members are asking for relative to the CBA allocations that we have listed here and the amounts, just for the record for my own understanding?
So thank you, colleague. I think that's a phenomenal question. And I would say based on what I asked and what I've heard, I think that both are the asks. I think that we want to see if there's an appetite to go above the 50 million that has been proposed thus far. I've heard that from members, but I also think and I've said myself we want to see if there's an appetite to renegotiate some of the items that's in the current CBA as is. Again, I just think that there are some items in there that kind of should be good faith things that kind of go without saying and those dollars could be reallocated to some of the other concerns that was communicated, whether it's housing or business development or support for Chinatown. I just think that we can -- I think that there's an appetite for both.
Okay. Well, thank you. Thank you very, very much for the clarification. But I just want to state for the record and just ask the Administration to affirm this one way or the other. As far as I know with the negotiation, the information as presented is a starting point. This is not an ending point, because now this process is in the Council chambers and we will have to go through this process and come up with sort of the end goal of whatever it will be one way or the other. But you all agree?
Okay. All right. Thank you very, very much.
Thank you, Mr. President. Just to get some clarity, point of information, when it comes to negotiating the CBA, right, if the CBA is between the City and the developers I'm trying to figure out what role does Council play in having a seat at the table with the developers to negotiate the CBA, right? That's the clarification I think that we're looking for as a Council as a body.
Thank you, Member Young. And so, as we go through this process, and I expect that this process will be where we will deliberate the CBA, to be quite transparent, as well as the proposal as a whole. And then we'll have to come up with a compromise and give and take. That's what the legislative process takes in order for this project to even move forward, to be quite frank, to all the stakeholders or not to move forward. Because as mentioned, in order for it to get voted out of this body everybody has to be comfortable on what they're going to be voting on and they can be voting either up or down, so there's going to have to be flexibility on all sides as it relates to how we go through this process, at least that's how I always envisioned it and that's just how the legislative process works. If that wasn't the case, there would be no need to even come on this side of chambers.
Absolutely, Council President Johnson. Absolutely, and we respect the process.
Okay. The Chair now recognizes Minority Leader Brooks.
Thank you so much, Council President. Good afternoon. I know I have a bunch of questions so I'm going to just put them all at once, and some of my colleagues also have already alluded to the some of the same questions. So City Council, we did not have input in the CBA. And maybe I'm speaking for myself, but I've had one meeting with the Sixers, two meetings with y'all and both of the meetings with y'all, y'all spoke with me, gave me an opportunity to ask questions of a packet that was about this big(indicating), and then we followed up. That's not a meeting and that's not engagement. And I was wondering what possibilities do we have in improving the CBA? And I'm glad you just said that it's a possibility. My next question is, knowing from the reporting in the Inquirer that the Administration caved on the competing facilities clause, what additional items did the Mayor ask for that the Sixers rejected in the CBA? And how come the Administration did not include labor neutrality agreement with the CBA? And the 76ers owners previously delayed this several times, because I know they want to get it opened for 2031. So given the discussion today, and I know I have so many more questions that have not been answered, will we be able to have a delay to weigh in on this appropriately or this is it? CITY SOLICITOR GARCIA: Councilmember, I will -- I think this is for me and Tiffany to split here. So with respect to the CBA, I think we've -- was the question answered before through these conversations? It sounds like the consensus is it's now on the floor. And so, I don't know if you need anything else around --
No, that first one was kind of -CITY SOLICITOR GARCIA: And you're talking about the allocation, right, not necessarily the flow of funds?
Well, I think if we're negotiating, from my understanding of what was just said that it's all up for negotiation in this legislative process, if I heard correctly to that? CITY SOLICITOR GARCIA: I'm just trying to clarify do you need anything from me as to the legal structure of the CBA? I think it sounds like we're really talking about the allocation of funds here.
I think that we will have information about probably both. We'll kind of send it to you in an email and wait to hear something back. CITY SOLICITOR GARCIA: Okay. And then with respect to the most favored nation clause which was reported in the newspaper as the Mayor folding, which I reject that summarization of what happened. Did you have specific questions as to the competing facility --
Kind of just what happened. Our negotiation process up to this point is what we hear in the news is what we have to ask questions on, which is unfair. And that's not fair negotiation for Council when all of us will be taking votes that will jeopardize or increase our ability to be elected officials later on based on, what's the quote that you said, Stephanie -- I mean, Tiffany, see what I say and see what I whatever do?
Watch what I do. But so far, and I've said this before, watching what I do has had adverse effects on us. CITY SOLICITOR GARCIA: Sure.
So we just want to be a part of the process and have a clear understanding. So when things come out in the paper, how do we know if we weren't engaged in the process? CITY SOLICITOR GARCIA: Yes. So with respect to what we call the competing facility provision, that is not a new concept that is popping up throughout the country and in different negotiations with arenas because we have moved to the point where arenas are not being funded by public dollars anymore. And so, the Mayor was very clear that while she was going to allow the Sixers to protect their investment in part, that she was not going to tie her hands or any future mayor's hands specifically with respect to what's going on in the Sports District downtown. So the competing facility clause that we negotiated is actually very limited and narrow and only involves direct funding tax benefits or the grant of land outside the sports arena, and it is only that kind of investment in stadiums that are between five -- stadiums, arenas between 5 and 25,000 seats. And I can give you a full briefing on that. It's actually -- there were a lot of carve-outs so it doesn't cover government facilities. It doesn't cover nonprofit facilities. It doesn't cover benefits that are already baked in the contract for the stadiums that we have downtown. It doesn't cover routine maintenance that the City is doing in that area, so it really -- and I'll repeat what the Mayor has said very publicly, it's dollar for dollar, arena for arena. So it's quite narrow. So again, I disagree with how it was portrayed in the newspaper. I think if we were going to negotiate it, we did it as narrowly as possible. But with respect to the Sixers, they are putting $1.3 billion into this project without any public funding.
Thank you very much. Minority Leader, are you okay?
One other question. So does the Administration expect the Sixers to seek state and federal dollars to help subsidize this project?
Are we expecting the Sixers to request state and federal dollars for this project?
Thank you, Minority Leader. The Chair recognizes Councilwoman Jamie Gauthier.
Thank you, Council President. I wanted to follow the Vice-Chair of the Housing Committee in asking some questions about housing. The City's own impact study states that although the Arena won't be built on top of any housing in Chinatown or other neighborhoods, there is evidence that it could stimulate displacement indirectly. And in your testimony, you also acknowledge that we know that Chinatown and Wash West are already gentrifying. The City Solicitor will remember that when we were fighting to preserve the University City Townhomes for that one location we secured $3.5 million in order to provide meaningful relocation assistance to the families who were living there and then we worked together to secure another $14 million for the City to redevelop the site, and that was needed for 75 units. More recently we saw PHA put $24 million up just to acquire Brith Sholom, right. And so, given those circumstances and the ongoing housing crisis in the city of Philadelphia, I'm very skeptical about the $3 million over three-year amount identified for housing, especially since we know that nearly 40 percent of the individuals in Chinatown and Washington Square West are considered cost-burdened or severely cost-burdened. Meaning, that they spend at least 30 percent of their income on their housing cost and sometimes much more than 30 percent. So can you expound on how you arrived at the figure of 1 million per year over three years to support housing programs? Can you talk about what that money will be used for more specifically than we've heard today? And can you also talk about renters? According to the impact study, 68.5 percent of the impact area is renter-occupied, a much higher proportion than the rest of the city. Can you describe the measures that you plan to take to stop the displacement of Chinatown residents who rent and may be gentrified out by rising rents?
Hi. Jessie Lawrence, Director of Planning and Development. So I'll defer to my colleagues to explain how they arrived at the line item. But again, the seed investment as we've been providing it or portraying it as is that it is, in fact, part of a larger contribution that will be mapped out. The housing plan is really important here because it will be much more comprehensive in understanding where all that funding will come from, how we will be able to -- all the numbers you just kind of described, we're looking at not just avenues to that type of funding, but we're looking at the partnerships that would be able to access those types of funding and collectively, comprehensively, strategically be able to provide the housing where the deficits exist the most right now.
So there are lots we don't know is the short answer.
There is -- again, we understand how important the housing plan is going to be in the interim. There's a spending schedule when spending is supposed to come out of the CBA, but we're not going to wait until that spending comes from the CBA. We're going to implement what we can now in the interim and be able to leverage that once that spending actually begins.
Council President, very quickly to just put on the record, does the Administration have an opinion on the wisdom of pushing forward a plan that is identified in our own impact study that there's proof that it would provide displacement without securing the necessary resources to stop the displacement?
Well, again the housing plan we'll be able to identify where we can implement measures to not have displacement. Again, we're looking at Chinatown as a commitment specifically in that housing plan. We plan to leverage public opportunities, public -- excuse me, public ownership opportunities to look at where we can provide that type of housing. But again, it will be a larger plan -- it will be part of a larger plan that is going to serve as an interim tool and resource, again, until we are able to leverage those funds as it gets spent down.
Does the Administration have an opinion on standing behind a plan that might stimulate displacement while not having a plan to stop the displacement or the resources necessary to stop the displacement?
I think the point of the -- I'm sorry. John Mondlak from the Department of Planning and Development. I think the point of the impact study was to identify what are the areas of concern and I think it did that. And I think the criticism we got early on was, oh, this is just a, you know, it's paid for by the Sixers and it's just going to tell everybody what they want to hear, and it didn't do that. What it did was it identified vulnerabilities. But I think in doing so because they did a very good job I think in identifying what are the possibilities, it gives us some place to aspire to try to impact or try to avoid some of these impacts. And so, that is the idea behind the seed money. But the study, we need to do the study to understand exactly what does the community, what are available assets that we can utilize to put into solutions for affordable housing beyond the 3 million. We are going to look at other funding that we are making available, that we are putting together right now that could also layer on top of it. We also have many City programs that do target renters and all those need to be put into play. So it has to be an all-in solution where we're looking at everything or it's not really going to be effective.
How much leverage do you think we'll have to secure those resources after we give the Sixers a yes? Do you think it'll be easy or hard?
Thank you very much. The Chair recognizes Councilmember Nicolas O'Rourke.
Thank you, Mr. President. In your testimony you claim that the PILOT agreement and U&O settlement from the developers will likely exceed what the Sixers would owe in property taxes. But based on independent calculations from leading sports economists, your projections seriously undervalue the property value and resulting property taxes, which could be as much as $450 million over the next 30 years. On top of that, the Sixers estimated over 10,000 more construction jobs than the City's impact study estimated over the 30-year period. It seems to me that there is still serious debate around your projections of future tax revenues, redevelopment prospects and jobs provided for the project. We'll be submitting a request in writing to receive all assumptions, all calculations and justifications for your expected property valuation and property tax revenue. We need to very clearly see how the Administration is making the claim that the City will not be losing any money on this deal. While we wait for that math to be released, I want to be clear that the projections used to justify this project are bets essentially, not realities, and these bets are rooted in impact reports that are difficult to trust as has been articulated already. I want to ask a few questions about the City- commissioned impact reports and because the hour has drawn nigh and the hour far spent, I want to try to keep us on time. So a yes or no is fine. I don't mean that to be quip, but seriously a yes or no would be sufficient. For the record, can you confirm that the City's economic impact analysis is based on the calculations of CSL?
Yes, it's based -- it was done by an independent company called CSL, yes.
Isn't it true that CSL is owned by Legends Hospitality Management which is a co-venture of my least favorite organizations Goldman Sachs, the Dallas Cowboys and the New York Yankees?
Isn't it true that Legends Hospitality Management also markets venue concessions and bids on concessions contracts at arenas and stadiums?
They do, but they did not on this and they followed a methodology that we prescribed for them that was very limited in what it would count for the economic impact. So it would only count new events, it would only account spending in the arena. So we took a direct hand in guiding them into what would be in their impact study. So this impact study is very different from impact studies that you'll see for other arenas.
Let me drive my point. Isn't it true that on at least one occasion CSL released a study in support of a stadium for which their parent company Legends was also bidding on concessions contract?
Wouldn't you say that their history of inflated projections and conflicts of interest make it tough for the public to trust CSL studies?
No, I do not believe that's true because of the way they did the study and because of the way we worked with them to ensure that it was a conservative study that was based only on what happened in the arena, that was based on direct spending, not induced multipliers, that didn't include a new additional impact based on what would happen with a Sixers game. Just on those new events.
Council President, I did hear the bell ring. Can I go ahead and round out my questions?
Can you name a single example where CSL did not recommend building a stadium or an arena after conducting their detailed analysis?
We were not asking them to make a recommendation about whether to build or not to build. We were asking them to do an analysis of what the impact would be based on a set of conservative assumptions that we worked with them to develop.
I want to just draw this in conclusion as far as I can tell from the questions that I've asked and what I've heard. What I've heard responded to for some of our colleagues' questions, it still feels to me, as other folks have already lifted up, that you're asking us to trust billionaire bets over trusting our constituents who are telling us actively, and have been for some time, that they do not want this arena or at least they don't want it there. What I know is that there are realities not bets, but real material problems facing each corner of our city. Some have already been named. I'm thinking about Councilmember Lozada. I know you have been raising the alarm of the housing crisis in need for good jobs for the neighbors in your District. Councilman Driscoll, who was here, he's kept our eyes focused on SEPTA and how much our public transit is struggling, Councilmembers Gauthier and Jones, who's no longer here, with the UC Townhomes and Brith Sholom as it has been lifted up. You have both been on the front lines of recent affordable housing fights which are just the beginning of many more coming down the pike in light of all that's happening. Councilwoman Bass, you fought for funding for the many struggling parks and rec centers throughout the 8th District struggles which are mirrored citywide. I hear you, Chief Thurman, for speaking to that. I know, Council President Johnson, I know you've championed workers in your District who are desperate for a good deal with permanent well-paid union jobs. And almost every Councilmanic District is facing a potential school closure over the next few weeks as Councilman Thomas has kind of alluded to. In the best-case scenario, this Arena plan does not address these real problems, not bets, but problems, realities that are facing our city right now. It does not provide more housing stability. It does not help SEPTA avoid its fiscal cliff. There are too many questions about who will benefit from the jobs it provides and how good those jobs will be, and it does not keep our schools open. And if history has taught us anything, we should expect something closer to the worst-case scenario than the overly ambitious projections shared here today, as I think Councilman Young kind of alluded to. If that turns out to be the case, this Arena plan makes all these problems worse, not better, by siphoning important tax revenue away from our most pressing real problems by putting extra strain on a transit system already under immense strain and by destroying one of our strongest and most resilient communities. Jesus said, For -- who among you will go to build a tower and not sitteth down to counteth the cost, after having laid the foundation, and then not able to finish it, the people looking around, mock him and say they couldn't built it. That's not to proselytize to make the point, that we are about to or being asked to go forward with a project with all these unanswered questions, to be the crowning jewel on Market East and leaving so many people without feeling satisfied for what they're going to get in the process, and that is a recipe for mocking on the backend. It'll be pretty and it'll also be an eyesore for many who recognize how much they didn't get out of it. And so, I would encourage us to really consider what other colleagues have said about at least negotiating, being open to reconsiderations around here. This is a major issue to me. And as it stands right now, there are a lot of questions yet to be answered. Thank you, Council President, for your time. (Applause.)
The Chair recognizes Chief of Staff to the Mayor Ms. Tiffany Thurman.
So, Council President Johnson, as someone that is -- and I agree with you, this is not the stage to proselytize. But in keeping with the parable that the Councilmember mentioned around Jesus and the parable of the tower and counting the cost, I'd like to talk about the cost that we counted through our economic impact process. And so, if I may just less than 60 seconds, our PIDC representative here Sam Rhoads will talk about that. Thank you.
Thank you very much. Sam Rhoads again from PIDC. I want to emphasize with respect to CSL that they responded to a request for proposals. We got a very strong response nationally and chose CSL as the best out of that group. So we are very pleased with CSL and worked very carefully with them in terms of these conservative assumptions. So I just want to come back for the record again in terms of this notion of inflated or other costs, we did not do the things that people do and studies do with respect to these. In every single respect, we took it back a notch and made it more conservative. We did not use multipliers. We did not use induced effect. We did not use indirect impacts. These are very directly related to just the net new events. CSL helped us think about the single arena versus a double two-arena scenario and again paired it back to just what we thought was net new dollars.
Thank you very much. The Chair recognizes Councilmember Rue Landau.
Thank you. Quick comment and then two areas of questions: One EOP and the other is about office space. So the comment is I just wanted to put on the record my thought that, yes, we need to do both shuffling money around in the $50 million City- negotiated CBA, so things like free tickets to students gets moved to things like affordable housing and SEPTA. And we also need to ask for more, much much more because the City is in much need. So I'll start with the office space because I think it's easier. But when we saw the renderings of East Market Street, there was a discussion of adding more buildings for office space. We recall having a discussion that even the Lits Center building is 50 percent vacant right now. But we have a potential of the parking lot space at 13th and Market being created into new building for office spaces. What analysis have we done? What is the office vacancy rate on that citywide and on that side of Market Street and why do we believe that people will be filling these office spaces up?
Jessie Lawrence, Director of Planning and Development. Just to be clear, the illustrative plan that did show all of the potential along the corridor, you are absolutely right that it did demarcate 1300 or, excuse me, 1301 Market Street being a potential office development. I did -- also in presenting that plan, it was a dated proposal. The purpose of the exercise was just to identify where certain plans had been prepared along the corridor. But to your point earlier, we did present where certain office development had been -- again, past, present and future. The future aspect of that illustrative plan didn't necessarily demonstrate a lot of proposed office growth. What we did show was a lot of office space being converted to residential uses. So I think that kind of answers your question as far as what the approach is. We're setting up -- again, in any master planning process, that we're going to guide where we are going. We want to be cognizant of the fact that office development and office occupancy is downward at this point. The general occupancy is about 75 percent throughout the City. The quarter that you see, along that quarter that would be vacant is also the quarter that you see in the Market East submarket. That vacancy rate is actually even higher as you get into Old City. But we want to be clear about the fact that we -- in any master planning process, we want to make sure that we're responding to trends. And the trend right now is that office absorption is negative right now. So whatever we do, again holistic and strategic, it's not going to be presenting options for things that won't necessarily be absorbed in the way that other uses might be. But we want to be clear about the fact that whatever direction we're going is going to be a diversification of uses. It'll be mixed. It will probably ebb away from office space. Those same properties that you were talking about, the Lits building, the Macy's building, we understand that half that Lits building is subleased right now. We also understand that Macy's is also considering some sort of residential conversion. But I think that whatever we do, the master planning will set the pace for whatever we want to bound ourselves to doing. And again, if we find that market trends are allowing for office development, we respond accordingly. But if that's not the case, we won't let it go.
Thank you. I'm going to jump in real quick with my EOP questions. I'll rattle them off. The first one is that you listed the entities that you went to inform your thoughts on diversity for your diversity numbers, including office, economic opportunity, whatnot. What data did they have that you relied on? And I hearken back to when I started at the City with the Mayor's diversities in the construction trades group knowing that thankfully the unions are working very hard now to diversify, but we've had an uphill battle with this. The second question is we were promised in the meeting that there wouldn't be double-dipping, double-counting, that an African American female would be counted as both Black and female, and I don't know where that is in the document. I would love to see that. And then the third question is that I know that the Sixers have negotiated with one large service union and is not fully committed to another, which is concerning to me. And so, one, absolutely want all union workers there at the Sixers Arena. But in the meantime, I did see a notification -- I saw in the documents what we call for the City, I believe we have a minimum wage, a living wage and a prevailing wage. And a minimum wage I saw in the document, in the lease, $15 an hour plus a certain amount for inflation after July of 2023. I think that's a bit low. I'd like that to be higher. But when the TIF, what is going to be removed from -- so there's a TIF that covers about three blocks and three sections and it'll be removed from the one section the Arena will be on. Will that section still abide by the obligation of a living wage when it is removed from the TIF?
Thank you. Nicole Stokes, an attorney from the Law Department. And so, I believe your first question was regarding data relied upon. As you may know, the City does an annual disparity study every year. That is a report and a study that OEO is very familiar with. It looks at availability and utilization within the field by NAICS Code, and that's broken down by different industry. And so, that is a report that OEO relies upon a lot in order when we set goals and ranges on City contracting in the industry as well. I know your second question regarded to making sure that there is no double counting, that would be Section 3 of the diversity goals. It says, to maximize opportunities for as many businesses as possible, a firm that is certified in two or more categories will only be credited toward one participation range as either an MBE, WBE or DSBE for any specific contract. And so, that is incorporated into the EOP. And I believe I'll turn to Renee.
Thank you. CITY SOLICITOR GARCIA: And I don't know if you said the page number, Nicole, but that's the bottom of what that language is. If I understand your question on the TIF correctly, you are concerned about the two-thirds that remain?
-- one-third that will no longer make it -- ensuring that the one-third that's no longer in the TIF will pay at the minimum living wage? CITY SOLICITOR GARCIA: Yes.
Even though it's not obligated to do so any longer? Isn't there a living wage associated with the TIF and one-third is being removed from the TIF, and my concern is that -- CITY SOLICITOR GARCIA: So the third that's removed to the TIF will be governed by the terms of this deal. 21st century minimum wage covers everybody and prevailing wage will cover the Arena business services personnel.
The 21st century minimum wage applies to 76 DevCo and their subcontractors, including the master concessionaire and their professional services providers. Prevailing wage applies to building services employees. The reduced TIF district remains subject to all initial obligations, including living wage requirements. So the 21st century wage applies to the Arena.
Okay. Thank you. CITY SOLICITOR GARCIA: And the prevailing wage has all the different -- there's a whole paragraph with all the different jobs that are subsumed within that category.
Thank you. The Chair recognizes Councilmember Brooks.
Council President, it's one of the questions that I asked I think that I didn't get answered. And it's about --
I'm sorry. All right. One of my questions I don't think was answered. And it's why didn't the Administration include a labor neutrality agreement in the CBA?
So we will provide a response to the Council President's Office in writing this week.
Okay. Thank you. Thank you very much. That's a good question though. Councilmember Young.
Thank you, Mr. President. My questions are along the same lines regarding the EOP. Is the EOP incorporated in the development agreement? I think that's important because we want to ensure that the City, the developer and the contractors, right, are all aligned with the same goals that we have in mind. So again, is the EOP incorporated with any development agreement or to frame it a little differently, is the EOP incorporated into the other agreements, the lease, the sublease, by reference or exhibit or anything like that to make it a part of the actual contracts between the City, the developers and their contractors?
So we got lawyers on Council so you get those deep-dive type questions. Go ahead. CITY SOLICITOR GARCIA: Yes, it will be an exhibit to the sublease. It's also in the term sheet. The EOP and the CBA are all referenced in the foundational documents.
Thank you. Chair recognizes Councilmember Jamie Gauthier.
Thank you, Council President. We've all been here all day, but we've talked about several aspects of community benefit for which there's no answer for or for which there's not enough, right. We talk about the SEPTA piece. I heard conflicting statements on the Sixers covering the construction but they're not on the hook for the operating, and then I heard members of the Admin say they're on the hook for everything, but none of that is specified in writing or in this legislative package. Additionally, we've talked about things like having 1.6 million, I believe, kind of allocated for business disruption, and many members commented that that wouldn't be enough given what they've seen from big projects like these in the past. We also talked a good amount about housing, $3 million over three years for affordable housing in areas that not only are gentrifying now but for which our own impact study says gentrification and displacement could increase given this project. Given that the current CBA, which we're calling a Community Benefits Agreement, doesn't speak to a lot of this stuff, I have questions still about the timing and the sequencing of the master planning process. I would think that in a normal situation with a project of the scale where we've looked at some of the unintended negative impacts that the Administration would be presenting us with a master plan for revitalizing Market East, a master plan for not just protecting Chinatown but growing Chinatown. However, the Administration has been clear that you want to present a plan after the Arena has been moved forward. If we are really prioritizing Chinatown as a cultural asset and a valued neighborhood in this city, why are we doing this backwards? Can you just expound on that more?
Well, one, we're not doing it backwards. And then of course, we'll answer the question again. I'll ask --
Why are we -- sorry, let me be clearer. Why would we worry about master planning after we move forward an enormous project which our own impact study shows could have negative consequences? Can you speak to the sequencing and why that is wise and prudent?
John Mondlak from the Department of Planning and Development. Again, the impacts if the Arena were to go forward won't begin until 2026 at the earliest. That's when they're proposing is the earliest demolition date construction in 2028. We have plenty of time to engage with the community, gather as much information as we can, formulate a plan, figure out how is the best way that we can serve the community, the affordable housing needs, affordable commercial needs and engage with something that predates the initial demolition and activity that happens on the site.
So is the Administration's position that you worry about that type of stuff after you say yes to the project?
We're worried about it right now. I mean, we're already starting --
So what are we doing about it or where is that enumerated or detailed?
Right now we are starting the planning process within the Department of Planning and Development, so we're putting together what is our gameplan, what is the cost that's going to be associated, how do we pull in the other work that's already been done, how do we piggyback on what's already happening under the Stitch and the outreach that's happening in the planning efforts that are going there, to try to just formulate a plan, how are we going to pull this off, how do we get started, what are timelines, what are deliverables, that's all starting right now.
Well, do you think this is an ongoing sort of way of operating? We'll kind of just approve huge things and worry about a plan or having the resources to stop displacement afterwards? Is that just like an Arena philosophy or is that a philosophy to planning in the city of Philadelphia in general?
So we do master planning processes all across the city. We know that, right, from Chinatown to neighborhood -- your neighborhood, right, the District that you represent. So whether we're talking about this deal or other deals, as John Mondlak said, this is a part of our overall process regardless of what type of development is happening on Market East. And with regards to the impact analysis, the Master Plan is actually in response to the ongoing engagement that we've done. John, do you have anything else to add there?
I think that's part of it. So it's baked into this -- we have a bunch of benefits that are in the CBA that are intended to drop into place. Now, that money doesn't necessarily hit until the Sixers sign the document, agree to do this project. And if they don't, then we're dealing with a whole different set of circumstances. We're dealing with the natural trend of what's happening right now with gentrification that Chinatown is experiencing, but it's going to be very different than an arena. And so, until we know that the Sixers are actually going to go forward, that they commit to this and drop the money, then we know what we're planning for. We don't know right now because if they don't, then we're not planning for an arena. We're planning for something else, and it may be some other proposal that comes down the pike. We don't have any right now, but hopefully there is another option at some point. Somebody wants to invest their money into Market East and we need to take that into consideration when we do our planning.
To be clear, just to respond to the comment about neighborhood planning, which I think is very important, as an urban planner with two urban planners in my office, I've not seen kind of so much expected to come after the fact. The plan doesn't come after the project. The project comes after the plan, right. And we should not be -- the only legislation I've seen come out to protect the cultural integrity of Chinatown came from Councilmember Squilla. I would have expected that to come from the Administration and the Sixers or at least some of it. The Sixers should not be planning our city. We should be planning our city.
And I want to be very clear. We were very happy to sit with any member of Council, including Councilmember Squilla. But what we came out with shows not just our commitment to Chinatown but also our citywide commitment even beyond the CBA. And if I may, I'll ask Sophie Bryant to come up and talk about that Chinatown commitment beyond the CBA.
So, Councilmember, consider me -- sorry, Sophie Bryant, the voice of the expertise of a lot of colleagues here. So in thinking about this Chinatown commitment, I think what we're trying to sort of frame out for Council's consideration is both those CBA funds as sort of an initial leverage and a boost but also all the other things the City can do and should do to respond to conditions in Chinatown. So I know I'm going to get accused of like filibustering here, but let me just run through a couple of different categories just to talk about it. So sort of starting with the community vitality and cultural preservation, here the master planning is critical to that, right, as you know from your city planning expertise. But I think the zoning, sort of even in advance of Councilmember Squilla introducing the zoning overlay, the Administration was already in conversation about what are the zoning interventions that might help preserve the community, and that relates to sort of uses, permitted uses, not permitted uses, density. Also, there's a commitment to support a City-run recreation space for Chinatown and cultural center. So again, just two specific examples of things that we've heard directly from the community that are important to the community. We understand that there's -- aren't existing those facilities there. That might tie to how the Chinatown Stitch overlay gets programmed. Just to talk a little bit about traffic and parking, we know in multiple meetings with Chinatown stakeholders, particularly for small business owners, concerns about parking are existential and they're already existential, right, because we know, and it's reinforced by the community impact study, it's a super car-dependent community and small business community. Lots of folks who shop and engage in Chinatown are driving in, and Mike can speak with more specificity about this -- sorry. Mike Carroll can speak with more specificity, but we obviously have to sort of do an audit and some planning of what are the existing parking spaces, is there a parking validation opportunity to help people who are coming in not for arena events, but to patronize Chinatown's small businesses have access to the parking. We've also heard Mike talk I think in some of the Council briefings about working with PPA to really control and rein in the onstreet parking hours. So we don't have folks going to Disney on Ice, for instance, using that precious onstreet parking. Instead we're hopefully driving them to using transit to get to those events. Sort of one more area on sort of clean and green. Another area that we know is really important for the Chinatown community whether or not, right, whether or not an arena gets constructed. So they are thinking about how do we leverage existing programs like PHL Taking Care of Business and sort of further build out -- and this again comes up in Councilmember Squilla's Arena Services District -- ways to make sure that the neighborhood is clean, is beautiful, so on and so forth. So sorry, too many words too quickly. But the broad concept is take some of those targeted investments that are in the CBA and use those to help spur a broader conversation about how can the City be supportive of this community based on conditions that are already existing.
Okay. So we should give the Sixers a commitment, but we'll have a conversation about displacement in Chinatown? I just want to be clear.
I heard we were spurring a conversation about the potential displacement and how we could manage it. But thank you, Council President. I'm done.
You're welcome. And the Chair recognizes Councilmember Rue Landau for the last question and then we'll be preparing for recessing until tomorrow morning.
My final question is because there's so many question marks and unanswered financial questions, is there ever a point where the City would back out of this saying, clearly this cannot go through fiscally in a responsible, reliable way?
We came to this agreement not lightly. We came to this agreement based on a robust analysis, economic impact study, doing learning journeys, looking at other cities, what we could learn from those cities. We looked at the CBA and beyond the CBA. We looked at our Economic Opportunity Plan. We did not come to this decision lightly but now we stand on it. This is a decision, this is a plan, this is a package that we stand behind and that we believe in. And so, on behalf of Mayor Parker and the Parker Administration, the promise is the promise.
Just to be clear, that's not what I was asking. I was asking not this moment. I wasn't asking until now. I'm talking about we're being asked to say yes now and plan later. So what happens if something goes terribly wrong six months from now, eight months from now? Is there ever a moment where the City says, wait a second, we're out of this, we'll step back?
We'll go over to our City Solicitor. CITY SOLICITOR GARCIA: There are certainly contingencies built in, say -- there's certainly, you know, say we can't get through zoning, things like that. If the 76ers file for bankruptcy or there's, you know, investments that we can't make and fulfill on the City side, there are escape clauses in the sublease. Of course we hope that it doesn't come to that and there's not a catastrophe and we're going to be optimistic that there isn't one. But there are certainly clauses for both parties if completion of the deal is not realistic.
All right. Thank you very much. Thank you for your time today. We'll see you tomorrow at 11:00 a.m. This concludes the business before the Committee of the Whole for today. I recognize Councilmember Squilla for a motion to recess the public hearing on Wednesday, November 13, 2024 at 11:00 a.m.
It has been moved and properly seconded that the Committee of the Whole will be recessed to Wednesday, November 13, 2024 at 11:00 a.m. All those in favor will signify by saying aye. (Aye.)
The ayes have it. This hearing is recessed. (Committee of the Whole concluded at 4:30 p.m.) C E R T I F I C A T I O N I, hereby certify that the proceedings and evidence noted are contained fully and accurately in the stenographic notes taken by me in the foregoing matter, and that this is a correct transcript of the same. __________________________________ TANEHA CARROLL