COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON PUBLIC PROPERTY and PUBLIC WORKS Room 400, City Hall Philadelphia, Pennsylvania Monday, March 22, 2010, 9:35 a.m. - - - BILL 090785 - Sale of City real estate for 50% of its fair market value for purpose of creating retail and commercial jobs... BILL 100094 - Authorizing PAID to purchase approximately acres on Summerdale Avenue... 10 BILL 100101 - Council approval of redevelopment proposals and contracts submitted under 11 provisions of the Urban Redevelopment Law... 12 BILL 100130 - Authorizing Public Property to deliver to PAID a deed conveying fee simple 13 title to parcel at 5326 Pulaski Avenue... 14 BILL 100132 - Extending term of sublease for mailroom operations at 1628 JFK Boulevard... 15 16 COMMITTEE MEMBERS PRESENT: Darrell C. Clarke, Chair Joan L. Krajewski 17 James F. Kenney, Vice Chair Donna Reed Miller W. Wilson Goode, Jr. Frank Rizzo 18 William K. Greenlee 19 COUNCIL MEMBERS ALSO PRESENT: Jannie C. Blackwell 20 Bill Green Curtis Jones, Jr. - - - DISCOVERYWORKS GLOBAL Litigation Support Specialists 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 3.22.10 PUBLIC PROPERTY - BILL 100094
Good morning. This is the Committee on Public Property and Public Works hearing. It will now come to order. Mr. Carter, please read the title of the first bill.
Bill No. 100094, an ordinance authorizing the Philadelphia Authority for Industrial Development (PAID) to purchase approximately twenty acres on Summerdale Avenue between Foulkrod Street and Godfrey Avenue, under and subject to the Philadelphia Industrial and Commercial Development Agreement among the City, PAID, and the Philadelphia Industrial Development Corporation.
Thank you. For the record, we have established a quorum: Councilman Rizzo, Councilman Greenlee, and Councilwoman Miller. Thank you. May I please have the first 3 3.22.10 PUBLIC PROPERTY - BILL 100094 witness. (Witness comes forward.)
Good morning, Mr. Chairman and members of the committee. My name is Thomas Dalfo, and I represent the Philadelphia Industrial Development Corporation and the Philadelphia Authority for Industrial Development. I am here to testify in support of Bill No. 100094. This bill authorizes the Philadelphia Authority for Industrial Development (PAID) to purchase an approximately twenty-acre property located at 5000 Summerdale Avenue, in Northeast Philadelphia, for a consideration not to exceed $2,800,000. After acquisition by PAID, PIDC will market the property to private companies for industrial development. This site is an attractive location for modern industrial development. At twenty acres, this site is large. It has good access to Roosevelt Boulevard, and it is 4 3.22.10 PUBLIC PROPERTY - BILL 100094 easily accessible to residents of a number of neighborhoods throughout the City. Sites which possess these characteristics are virtually nonexistent in the City. Based on an extensive survey of industrial districts that the Planning Commission, the Commerce Department, and PIDC completed in 2009, there are approximately a dozen large, cleared industrially-zoned sites in the entire city. Only a fraction of these sites also possess the quality of access to highways and potential employees as the Summerdale Avenue site does. This lack of marketable industrial properties greatly limits Philadelphia's ability to attract and retain industrial companies and the employment opportunities they represent. The purchase price is based on a recent appraisal of the property by an independent appraiser. The current owner 5 3.22.10 PUBLIC PROPERTY - BILL 100094 of the property, Cardone Industries, has agreed to sell the site to PAID. The cost of this acquisition will be paid from the Industrial and Commercial Revolving Fund. I ask that the committee consider this bill favorably and that the rules of Council be suspended to permit first reading at the next regularly scheduled meeting of Council. Thank you for the opportunity to testify bill. I will be happy to answer any questions you may have regarding this ordinance.
Thank you. Let the record reflect that Councilman Kenney has also joined the committee. Real quick. The acquisition dollars, where are the dollars coming from for this acquisition?
They're coming from the Industrial and Commercial Resolving Fund that was established in the 6 3.22.10 PUBLIC PROPERTY - BILL 100094 mid-1970s by the City that's administered by PIDC and PAID on behalf of the City.
And is 13 there an established return on the investment? I mean, do we --
I mean, is there some criteria associated with the creation of jobs or the amount of revenue that we should get on the sale of the property? Or is it just...
The fund doesn't operate quite like a private equity investment fund. Its chief purpose is to acquire industrial land and commercial land for the City to be available for 7 3.22.10 PUBLIC PROPERTY - BILL 100094 private development. There are job goal targets established for properties. The goal is to try to create approximately around 6 jobs per acre, sort of a net usable land. 7 So on a site like this, ideally, it would 8 be up around 300 jobs total for the site. 9 But they're goals, and it sort 10 of depends on what the type of site -- 11 what type of activities is most suitable 12 for the site. 13 There aren't specific financial 14 goals other than to try to make sure the 15 fund is self-sustaining, and it has been for about the past thirty years or so.
All right. One of the concerns I've had -- and, you know, I've talked to Mr. Deegan and members of PIDC earlier, and, you know, I'll actually have some conversations with Public Property about this whole land disposition and the acquisition strategy, that there are no established goals. 8 3.22.10 PUBLIC PROPERTY - BILL 100094 And I guess, you know, from my perspective, I really don't know exactly what to tell people who may call and inquire about the things that could be available from the City of Philadelphia -- or from PIDC in this case -- in terms of being in a position to develop a business. Is it -- now, this is the first I've heard that there's -- jobs per 12 acre is the threshold. 13
Yeah. And we'll do it at another time because we have budget hearing later on, but at some point, you know, I really would like to have a detailed conversation. As we market our opportunities in the City of Philadelphia, it's really not clear. It's kind of somebody calling or sending an e-mail, and then you kind of sit down and you don't know going in, and there are a lot of good things 9 3.22.10 PUBLIC PROPERTY - BILL 100094 apparently that are available, but people don't know it, frankly speaking, and we could probably get more people involved or engaged in the ability to deal with the City of Philadelphia or some of its quasi-agencies in terms of creating business opportunities. But we'll talk about that later.
Okay. If there are questions about this land that PAID has available, if you want, I would suggest that they reach out to our website, where we have all of our industrial properties listed and the asking prices and the details on it. What we try to do is mirror what a private real-estate investment company would have in terms of the information available about sort of developable parcels.
A number of our parcels are a bit challenged because of 10 3.22.10 PUBLIC PROPERTY - BILL 100094 their physical condition, so that compromises that a little bit, Mr. Chairman.
Could you please tell me how long Cardone has had this property and what was on it before?
Cardone has been in the property, I think, in the area of around 13 or years. 14 It was originally the warehouse piece for the old Sears distribution facility on the Boulevard, the front portion of which was acquired by Pennsylvania Real Estate Investment Trust and developed as, I think they call it, the Tower Center on the Boulevard. So this was a warehouse for Sears.
When we do a deal like this, this twenty acres is environmental cleaned and checked, and we 11 3.22.10 PUBLIC PROPERTY - BILL 100094 aren't inheriting any environmental issues at that location?
Part of what we're doing under an agreement of sale that we've entered into with Cardone is doing an environmental study of the property. We completed a Phase to determine whether or not we need to do any testing. Some testing is being done to determine its environmental condition very specifically. And we'll make those points of a negotiation with Cardone.
Just a curiosity question. And I guess you can't speak for Cardone, but it's just something that I'm curious about. Why would Cardone do this deal with PAID and PIDC and not do it themselves?
I don't think they want to be in the real-estate sales and development business. There was a company that had 12 3.22.10 PUBLIC PROPERTY - BILL 100094 come to them previously -- or an organization that had come to them previously wanting to buy the property; that transaction fell through. That's when we became aware of it, and we reached out to Cardone and said we would be interested in pursuing an acquisition of this property.
I understand that, but it's just sometimes strange to me that if it's as valuable as you say that's that they would do this kind of a deal rather than not market it themselves. It's just a curiosity question. Thank you.
One last question on this from me; I don't know if other members have questions. In terms of the -- because this is a quasi-agency, in terms of the 13 3.22.10 PUBLIC PROPERTY - BILL 100094 disposition of this land to a private developer, are there any criteria established in terms of job creation for MBE/WBE/DBE? I know we had this earlier conversation. PIDC actually said that they do well in that, but there's really no 9 established goals and -- documented established goals.
PIDC has its goals that have been established for contracting.
So any type of contracting we would do related to this property, which is likely to be focused on the due diligence investigation and then allow us to market the property. In terms of the requirements to the actual purchaser of the property, if they're securing any financing from us that have goals associated with it, then I think that those pass through. So if someone has financing that comes from the 14 3.22.10 PUBLIC PROPERTY - BILL 100094 City that has a requirement, then they would have to follow the goals established by that.
But if they don't get financing from the City, then there's just --
Thank you very much. What's the -- are there any tax arrearages on this property?
We haven't found any, but before we go to settlement, we'll require a certification statement --
You'll do a title search and figure out what, if anything, is owed?
We would, we will. We won't close with someone if they owe the City taxes; as a condition, they need to be in compliance wit that.
If, in fact, they do owe the City taxes, actually, we would be paying ourselves back; is that --
Yeah. It would sort of be coming from one pocket to the other, yes.
At this point, no, we don't have a specific use in mind. Our sense is that it would work well as a distribution facility given its location and its characteristics.
What's the zoning now? 16 3.22.10 PUBLIC PROPERTY - BILL 100094
Councilman Rizzo -- oh, I'm sorry. Councilwoman Miller and then Councilman Rizzo.
I don't know when the warehouse came down. I think it's bee, I would say, ten or twelve years. It's probably been down since before Cardone bought the property, I think.
My recollection is they've owned it for about that time 12, 13 years.
So what -- if no one has been interested in purchasing it from him, why do you think 17 3.22.10 PUBLIC PROPERTY - BILL 100094 they'll purchase it from you?
Okay. So these are the building -- or is it vacant land?
Near the old Sears complex? I'm just trying to visualize it. I go up there, to Home Depot.
It would be to the rear of the Home Depot and to the right. So if you're looking at where the Home Depot is, it's sort of to the rear and to the right, with frontage on Summerdale Avenue. 18 3.22.10 PUBLIC PROPERTY - BILL 100094
And it's about a -- it's a twenty-acre, roughly rectangular parcel.
Not to exceed 2.8 million. Do you know the deal that Cardone when it fell apart, what they were going to be paid for the property?
What they had the property under agreement for? I don't know what the -- the value of that.
Because there are -- there could be credits against that. And so, the 2.8 million is the negotiated number with Cardone. And if there is environmental conditions, as you had asked before, in 19 3.22.10 PUBLIC PROPERTY - BILL 100094 our agreement, they would be a deduct from the price. If there's demolition required to the property, then those would be a deduct from the price as well. And if there's any sort of limitation or lack of capacity of surrounding infrastructure that needs to be upgraded or extended, those would also be a deduct from the price. So 2.8 million is the absolute sealing. And then, if there are conditions that compromise that value, they would come out.
There's no 16 intelligence when this property was on the market? There's no one -- I mean, how would it not be known what they were asking for this property? And my final question is: Based on your professional evaluation of the twenty acres, what eventually do you think you'll receive once it's all disposed of? What will be the projection? Hopefully more than 2.8 20 3.22.10 PUBLIC PROPERTY - BILL 100094 million, or even less just to bring business in.
In would be in that area of around $2.8 million. It's an attractive site, from our opinion; we don't think it's going to need a lot of infrastructure. We'll complete our due diligence to determine that. And the market value for an attractive site like that is in the area of $2.8 million. So ideally, we'll get our cost back and then some, but --
Yeah, yeah. And that would be the -- if the transaction doesn't return the dollars that were required to purchase it, then we would look at sort of the other goals of the job creation and tax revenue that the activity would generate.
Thank you. 21 3.22.10 PUBLIC PROPERTY - BILL 100094 Who's the Councilperson for this site?
All right. I mean, I knew the answer; I just wanted to make sure you knew the answer.
Okay. Cardone. I recall earlier we had some conversations about them. It's one of the larger industrial businesses still in the City of Philadelphia. Are they doing --
My understanding is, it's the largest manufacturer in the City.
Are they 22 3.22.10 PUBLIC PROPERTY - BILL 100094 doing well?
I mean, I know we were concerned about losing them at one point. Okay, great. Any other questions for this witness from members of the committee? (No response.)
Oh, one last question: The sales price, will that be established? The minimum sale price, will that be established by the purchase price?
I 23 3.22.10 PUBLIC PROPERTY - BILL 100094 understand that.
Ideally, it will. We'll look to return that, but it would depend if a certain project comes in that has, you know, strong job creation or tax revenue generation, then --
Okay. All right. That's, again, a part of the conversation I want to have later with Public Property. All right. Thank you. Thank you, sir.
There being none, Mr. Carter, please read the title 24 3.22.10 PUBLIC PROPERTY - BILL 100130 of the next bill.
Bill No. 100130, an ordinance authorizing the Commissioner of Public Property to execute and deliver to the Philadelphia Authority for Industrial Development a deed conveying for nominal consideration fee simple title to the parcel measuring approximately 58,402 square feet, which is located at 5326 Pulaski Avenue, at the southwesterly side of Penn Street and Pulaski Avenue, with the buildings and improvements thereon, for further conveyance at nominal consideration. (Witness comes forward.)
Good morning, Chairman Clarke and members of the Committee on Public Property and Public Works. My name is John Herzins and I am the Deputy Commissioner of Public Property, here today to testify in support of Bill No. 100130. 25 3.22.10 PUBLIC PROPERTY - BILL 100130 This bill will authorize us to convey a deed for a property located at 5326 Pulaski Avenue, at the southwesterly side of Penn Street and Pulaski Avenue, to PAID for further conveyance at nominal consideration. This property, along with the neighboring property, will be redeveloped by the Philadelphia Housing Authority into low-rise public housing. The new development will replace the high-rise public-housing project. The Department supports this measure; and, accordingly, I respectfully ask that City Council approve Bill No. 17 100130. I am requesting a suspension of the rules so as to allow for first reading at the next session of Council. Thank you. I will be happy to answer any questions that you may have. And we also have people here to talk more about the project.
Thank you. Well, why don't we bring them up. 3.22.10 PUBLIC PROPERTY - BILL 100130 (Witnesses come forward.)
And Mr. John is going to dazzle us with his presentation. (Laughter.) Good morning.
Good morning, Chairman Clarke and members of the Committee on Public Property and Public Works. My name is Bob Archie, and I'm a partner in the law firm of Duane Morris, and I'm here as counsel to the Philadelphia Authority, also known as PHA. I'm here to testify on behalf of PHA, in support of Bill No. 100130. This bill provides for City Council to authorize the Commissioner of Public Property to execute and deliver to the Philadelphia Authority for Industrial Development a deed conveying, for nominal consideration, fee simple title for the parcel measuring approximately 58,402 square feet, which is located at 5326 Pulaski Avenue, at the southwesterly side 27 3.22.10 PUBLIC PROPERTY - BILL 100130 of Penn Street and Pulaski Avenue, with the buildings and improvements thereon, for further conveyance at nominal consideration. The factual background as to why PHA is in support of the approval of this bill is that 5326 Pulaski Avenue is located approximately to the rear of 301 West Queen Lane, which is owned by PHA. The 301 West Queen Lane site consists of a 16-story high-rise apartment building built in 1961, with 120 apartment units. This high-rise building -- apartment building has suffered from years of deferred maintenance and poorly- designed units that are undersized for today's living standards and amenities. The major systems are antiquated and would be too costly to bring up to current standards. Therefore, PHA proposes to demolish this high-rise building and build approximately 50 to 60 new, affordable rental units. The new units 28 3.22.10 PUBLIC PROPERTY - BILL 100130 will consist of high-energy, efficient townhouses, duplexes, and quadplexes that will utilize the latest green technology such as global thermal heating and cooling, solar domestic hot water, solar electric, and rain-water harvesting. In addition to the creation of new housing units, new streetscapes and infrastructure improvements will be provided as a part of this new development, including off-street parking spaces in the rear, new curbs, sidewalks, one new street, driveways, new trees, and new lighting as well. The transfer to PHA of the Recreational Department-owned, which is the subject matter of the bill, which is the owned parcel, the Recreation-owned parcel, which sits directly behind the high-rise is critical to the proposed development. The estimated cost to the new development is approximately $24 million, and financing will include the use of 29 3.22.10 PUBLIC PROPERTY - BILL 100130 low-income housing tax credits from the Pennsylvania Housing Finance Agency and the use of PHA's annual capital dollars from the federal government. I want to thank you for your time and consideration of our client's support of Bill No. 100130. And I also have Mr. Johns here to answer any questions that you may have regarding this bill.
Sorry. We were having a debate as to what district was getting the most money. (Laughter.) The whole notion is that somehow, the Fifth District is the only one that gets tax-credit deals is clearly not the case. (Laughter.) Thank you. Thank you for your presentation. What's the timeline on this? Do you already have the tax credits in hand? 30 3.22.10 PUBLIC PROPERTY - BILL 100130
All right. And you have been quite successful, so I would anticipate the groundbreaking very soon.
I think PHA is the largest user of low-income housing tax credits in the Commonwealth of Pennsylvania.
What's the process? So if we transfer this today, when does relocation start to be a consideration?
It would be this year. We start to consider the relocation this year, in anticipation of 31 3.22.10 PUBLIC PROPERTY - BILL 100130 some of the new tax-credit application next year start. So we'd like to start that process as early as possible.
Okay. Well, you know, this is a project that we have been talking about for several years, and I'm glad it's finally coming to fruition. I think it's going to be good for the neighborhood. People have heard about it, and, you know, they all support it. There are a few people that have other questions -- suggested other uses, like making a ice-skating rink out of the playground, and that's the most recent that I've heard. But this is certainly something that we all support, and I'm just glad this morning that we're going to get 21 million. 22 Councilman Clarke, you know, I 23 sit on Rules, I know when funding comes 24 in. And he's up here badgering me over 24 million when I've seen hundreds of 32 3.22.10 PUBLIC PROPERTY - BILL 100130 millions of dollars go into the Fifth Council District. So we're just glad that this is finally on its road to being successful. And, again, I want to thank you guys. I think you've been very cooperative.
I have to make a full disclosure: I live in Councilwoman Reed's Councilmatic District.
And this will be really good for the neighborhood. I spoke the other day to Senator Specter, who doesn't live far from this development; you know that. And so, we're all looking forward to seeing something positive happening here. And then we'll work with the City and PHA to see what we can do in the surrounding community. 33 3.22.10 PUBLIC PROPERTY - BILL 100130
Yeah, thank you, Mr. Chairman. Just as a councilman at-large, I'm just glad to see development in all Council districts -- although, Councilwoman Miller, I do live in the 5th, so I'm not complaining about it. Just a quick question, and Councilwoman Miller alluded to it. This was a Recreation site?
The actual -- it's actually more of a playground than center. The center is 34 3.22.10 PUBLIC PROPERTY - BILL 100130 just very, very small. It's actually a part of the PHA high-rise.
And it's mainly a basketball court and a play area. And we're also -- in the planning, we're also thinking about other places to put some type of recreational use.
Okay, great, great. And just one another question. As far as the applicants, I know when you were here about a week ago, I think it was a development in southwest Philly. Is it the same way; is it going to be a separate list of applicants?
It's similar to that? I forget the name of it, but -- 35 3.22.10 PUBLIC PROPERTY - BILL 100130
I think -- one other thing I want to add regarding recreation. There's a Boys and Girls Club within, like, maybe a block if you go in one direction; two blocks if you go in another. So there's still certainly a basketball court and other activities that can happen there.
Thank you, Councilman. Let the record reflect that Councilwoman Joan Krajewski has joined the committee. Are there any questions of these witnesses by members of the committee? (No further questions.)
Is there anyone else here to testify on this bill? (No response.)
There being none, Mr. Carter, please read the title of the next bill.
Bill No. 100132, an ordinance authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to extend the term of a sublease agreement between the Philadelphia Municipal Authority as landlord and the City of Philadelphia as tenant for mailroom operations space at 1628 JFK Boulevard, under certain terms and conditions.
Good morning, Chairman Clarke and other members of the Committee on Public Property and Public Works. My name is John Herzins, and I'm the Deputy Commissioner of Public 37 3.22.10 PUBLIC PROPERTY - BILL 100132 Property, here today representing the Department to testify in support of Bill 4 No. 100132. This bill will permit the City to extend the term of sublease up to an additional ten years for certain space currently utilized as a City Revenue Department mailroom operation center located at 1628 JFK Boulevard, also known as Eight Penn Center. The Department supports this measure; and, accordingly, I respectfully ask that Council approve Bill No. 100132. I am requesting a suspension of the rules so as to allow for first reading at the next session of Council. Thank you. I will be happy to answer any questions you may have.
Thank you, Mr. Herzins. Mr. Herzins, real quick, what's the square footage of the space we occupy?
Approximately 38 3.22.10 PUBLIC PROPERTY - BILL 100132 9,700.
So it's a relatively small space. Okay, thank you. Any questions of this witness by members of the committee? (No further questions.)
Anyone else here to testify on this bill? (No response.)
Thank you very much. I think you're testifying on the next bill? Duane? Oh, whatever. Okay. Well, let me not manage you guys' activities. Mr. Carter, please read the title of the next bill.
Bill No. 090785, an ordinance authorizing the sale of City real estate for cash consideration of fifty percent (50%) of its fair market value for the purpose of creating retail and commercial jobs, provided a first-priority lien on the property is retained equal to the difference between 39 3.22.10 PUBLIC PROPERTY - BILL 090785 the fair market value and the cash consideration, extinguishable based on fulfillment of retail and commercial job-creation requirements, under certain terms and conditions. (Witness comes forward.)
Good morning. Good morning, Chairman Clarke and members of the Committee on Public Property and Public Works. My name is Duane Bumb, and I am the Senior Deputy Director of Commerce. I'm here today to testify on Bill No. 090785. This bill would authorize sale of the City property for 50 percent of fair market value, where the sale will result in the creation of new retail and commercial jobs. Offering incentives to businesses in exchange for job creation and business growth are strategies the Administration fully embraces. There are several programs in 40 3.22.10 PUBLIC PROPERTY - BILL 090785 place that leverage tools the City controls to encourage investment. The ten-year property tax abatement, for example, for new construction and rehabilitation is a significant tool for businesses that build on or redevelop property; and under current rules, it can be applied in any location throughout the City. Many of the tax-credit or discounted-loan incentives offered by the City have clawback provisions to ensure that the level of job creation promised is maintained for the prescribed period of time. When owned by or on behalf of City, land valuation is another tool the City can use to help ensure economic growth. On the City's behalf, the Philadelphia Industrial Development Corporation, or PIDC, often mitigates adverse soil or site conditions on a property it sells by discounting the sale in proportion to the funding needed to 41 3.22.10 PUBLIC PROPERTY - BILL 090785 properly redevelop the site. In addition, the Department of Commerce work with Public Property and has, on several occasions, agreed to reduce the sale price of property where to businesses where adverse site conditions or when permanent jobs are created. For example, as part of the sale of the Famous Cookie factory parcel on the American Street industrial corridor, the price was reduced by 50 percent based on the Commerce Director's recommendation that a number of jobs were being created. The Administration support the intent of Bill 090785 and views its implementation as consistent with our existing efforts to stimulate job growth. However, we would recommend that the legislation be amended to address a few concerns we have with implementation of the current bill. First, we suggest that the 42 3.22.10 PUBLIC PROPERTY - BILL 090785 first-lien position now required by the bill be changed to a second-lien position. In our experience, if the City or PAID are in first position, the grantees will likely not be able to get any private financing; we often take a subordinate position on our loans with the bank or private lender in first position. Also, creating specific standards for the number of jobs created relative to the value of the property and the process by which the City verifies and monitors the creation of these jobs should be clearly defined. Since we would want to add land valuation as one of the tools used to provide financial assistance to growing businesses, we would propose using the criteria that has been established for PIDC's existing loan programs with respect to reporting requirements. We would recommend that PAID not be the lienholder because, in case of 43 3.22.10 PUBLIC PROPERTY - BILL 090785 foreclosure, the property should revert back to the City ownership and not to PAID ownership. And, finally, we would recommend including industrial jobs among the retail and commercial jobs when considering a reduction of land sale price based on job creation. Industrial jobs continue to offer living wages to a portion of our workforce that does not typically have post-secondary educations. Thank you for your consideration of these comments. My colleagues and I would be happy to answer questions that the members of the committee. I might also add -- I actually prepared some proposed amendment, if that's helpful to you.
Sure. Thank you, Mr. Bumb. Thank you for your testimony. I actually agree with pretty much all of your recommendations in terms 44 3.22.10 PUBLIC PROPERTY - BILL 090785 of amendments. And I must say that I actually held a hearing because I needed to get that type of suggestions from the Administration 'cause, as you know, we've been talking about this for some time. So sometimes, when Councilmembers need to get answers, we hold public hearings for the purpose of getting the answers 'cause we know you guys will always come prepared. What I actually would like to do, now that we have some template in terms of what fixes we need to do or what recommendations we need to do to implement this bill, what I'd rather do than propose the amendments today is to sit down with you all and establish some guidelines such as you've recommended. But I would also like to have a broader discussion about not just publicly-owned properties but properties that are in some level of government ownership to establish certain criteria 45 3.22.10 PUBLIC PROPERTY - BILL 090785 for all of the various things that we've talked about today. But in particular, I understand Mr. Herzins thanked me -- he actually got a -- apparently, we have approximately 60, 65 properties in our inventory that are of substantial size, and I'd like to be in the position where we can market these properties in a very aggressive way, with some clear designed levels of incentives that a potential purchaser or a developer could look at and make the decision as to whether or not to buy or move into the City of Philadelphia. So I'm going to hold that bill; and hopefully, we'll have some subsequent conversations; and when we come back in the committee, we will approve the appropriate amendments to make sure we move ahead on this in an aggressive way. Any questions by members of the committee for this witness? (No questions.) 46 3.22.10 PUBLIC PROPERTY - BILL 090785
Mr. Bumb, thank you very much. Mr. Carter, please read the title of the next bill.
Bill No. 100101, an ordinance amending Title of the 11 Philadelphia Code, entitled "Public 12 Property," by setting forth certain 13 requirements for Council's approval of 14 redevelopment proposals and redevelopment 15 contracts submitted to Council for 16 approval under the provisions of the Urban Redevelopment Law. (Witnesses come forward.)
Good morning, Chairman Clarke and members of the 47 3.22.10 PUBLIC PROPERTY - BILL 090785 Committee on Public Property and Public Works. I'm Terry Gillen, the Executive Director of the Redevelopment Authority. And with me is Mike Koonce, the Deputy Directory of the Redevelopment Authority. Bill No. 100101 provides that Council will not approve redevelopment proposals and contracts under the Urban Redevelopment Law unless the Council resolution or ordinance providing approval includes a certification from the Redevelopment Authority's counsel that the redevelopment contract itself contains certain revisions on changes in terms of the redevelopment contract. Specifically, the redevelopment contract would have to specify that Council approval by resolution or ordinance would be needed if any of the following occurs. 1. Assignment or transfer to a new redeveloper of the contract. 2. Change in the purchase price of the property being conveyed. 3. Change the preliminary plan 48 3.22.10 PUBLIC PROPERTY - BILL 090785 or disposition supplement. 4. Certain changes in the ownership of the redeveloper. The challenge we face here is balancing the needs of Councilmembers to have a say in the development activities in their districts with the desire by all of us to encourage and promote housing development and economic development. We think that this bill begins to address those competing needs but may not strike the right balance. The Administration's concern is that this bill, if implemented, might have the unintended effect of discouraging or at least delaying development. In Philadelphia, as we know, there are too many obstacles for business, especially small business, to locate and expand here. The Administration is working to eliminate as many obstacles as we can and encourage business growth that will hopefully 49 3.22.10 PUBLIC PROPERTY - BILL 090785 provide jobs. For example, we are committed to reducing business taxes and improving the permit process at L&I. The Administration is concerned that this bill moves in the opposite direction by creating adding a layer of approval that currently does not exist, thus potentially making it more difficult for properties to be developed in a timely fashion. As an additional reason for the Administration's concern is that there are several times during the year when City Council does not hold regular meetings; thus, if a project requires City Council approval in June, for example, the project may be delayed due to the needs for Council approval. We believe there may be a way to tweak this initiative and do it so that the bill does not discourage development. For example, perhaps City Council may not need to approve a decision to assign an affordable housing 50 3.22.10 PUBLIC PROPERTY - BILL 090785 project to a related entity. Also, Council may not need to approve a decision to allow amendments to a plan that does not change the use of the project but that merely may have an impact on the number of properties being sold. Perhaps Council would consider working with us to amend the legislation by allowing a change in the site's proposed usage or allowing the introduction of a new developer for a particular housing project, without the need to return to Council for approval. We appreciate the opportunity to speak to you today about these matters, and I'd be happy to answer any questions that you may have.
Oh, I'm sorry, Councilman. I'm sorry, one 51 3.22.10 PUBLIC PROPERTY - BILL 090785 second.
I've got to go to members of the committee first. I want to make sure I keep my committee chairmanship. (Laughter.) Councilwoman Miller.
Great. Miss Gillen, I have a question about your testimony. In one, two, three -- in the fourth paragraph, where you start talking about how there is a challenge to face the needs of Councilmembers in development activities in their district. You've been here two years?
Okay. 52 3.22.10 PUBLIC PROPERTY - BILL 090785 Have we -- have you experienced any delays in development caused by Councilmembers?
Well, we want to make sure that this bill doesn't change that by putting in new requirements; that's the only issue that I'm raising.
Okay. I've been here years, and it's been my 14 experience that if things are held up, 15 it's held up not because of the 16 Councilmember but because of funding, 17 because of financing, because of the Administration, not Councilmembers.
So I think you guys may have some work to do on your end. That will then remove this particular challenge. And I think it is important -- in terms of just bringing something back 53 3.22.10 PUBLIC PROPERTY - BILL 090785 to Council, I don't know that we take that much time to approve or disapprove something. We have bills. I don't know that -- that our recess in June really hampers development. And so, I just have some -- I'll let Councilman Jones go, but I certainly don't see Council as being the group that causes the delay in development. And I'm glad to hear you say that you have not experienced delays caused by City Council. City Council has to be involved in their district, they need to be involved in their district. I mean, many times we work for years to get a proposal to the table and ready to be funded. And I, for one, as a District Councilperson, am not going to give up my authority to be involved.
I know, with every administration, it's different. But I have not -- I don't 54 3.22.10 PUBLIC PROPERTY - BILL 090785 know that we've ever hampered any development in our districts. Thank you.
Thank you, Councilwoman Miller. I just want to follow up real briefly on Councilwoman Miller's issue with respect to the timing of the (indiscernible) that are put out either by PHFA or OHCD or any of the other funding entities. And the reality is that the traditional timeframes on our requests for proposals or opportunities for funding are traditionally earlier in the year or in the fall, both times which we are in session. So in my -- I don't even want to say how long I've been here. I can't ever recall a project being held up because Council was on recess. And even in the event that there was some opportunities that there was some concerns about, I've witnessed the fact that if the Administration and 55 3.22.10 PUBLIC PROPERTY - BILL 090785 the member of Council have indicated to the funding source that upon the reconvening of Council session in September, then such ordinance or resolution would be introduced and passed, that traditionally is sufficient for any -- particularly for PHFA 'cause we have had a longstanding relationship with them. Councilman Jones.
Thank you, Mr. Chairman. Good morning. What is the mission of the Redevelopment Authority, generally?
To use financing and land tools to renovate the City of Philadelphia, particularly Philadelphia's neighborhoods.
And in so doing, land acquisition is a integral part of development, obviously, site control and things like that. Is it also a part of your job to market those opportunities to private-sector 56 3.22.10 PUBLIC PROPERTY - BILL 090785 individuals that want to invest their capital into the City of Philadelphia?
So when we ask as a body what our inventory is and what it is worth, would that be a helpful tool to know so that we can market it to private-sector individuals?