COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, December 5, 2000 12:55 p.m. - - - BILL NOS. - 705, 706, 721, 722, 723, 724, 725, 726, 727, 728 729, 730, 731, 732, and 733 - - - PRESENT: COUNCILWOMAN ANNA C. VERNA, Chair COUNCILWOMAN JANNIE L. BLACKWELL, Vice-Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN JAMES F. KENNEY COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILMAN FRANK DiCICCO COUNCILMAN DAVID COHEN COUNCILMAN MICHAEL A. NUTTER COUNCILMAN DARRELL L. CLARKE COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center Plaza, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 I N D E X BILLS , 706, 721, 722, 723, 724, 725, 726, 727, 728, 729, 730, 731, 732, and 733 William P. Hankowsky, President, PIDC----------- 4 Richard Lombardo, Director of Development, Planning and Zoning, Philadelphia City Planning Commission-------------------------- 7 - - - 3 STADIUM HEARINGS
Good afternoon, everyone. This Committee of the Whole, we are considering Bill Nos. 726, 727, and 728. Along with that, we are also in a continued Public Hearing of the Committee of the Whole regarding Bills No. 705, 706, 721, 722, 723, 724, 725, 729, 730, 731, 732, and 733. I would ask Mr. McPherson to please read the titles of Bill Nos. 726, 727, and 728. MR. McPHERSON: Bill No. 726, An Ordinance amending Title of the Philadelphia Code 14 relating to zoning and planning by amending Chapter 15 14-1000 entitled "Sports Stadium District," by amending provisions related to permitted use under certain terms and conditions. Bill No. 727, An Ordinance to amend the Philadelphia Zoning Maps by changing the zoning designation of certain areas of land located within an area bounded by Hartranft Street, 20th Street, Pattison Avenue, and Broad Street. Bill No. 728, An Ordinance to amend the Philadelphia Zoning Maps by changing the zoning designation of certain areas of land located within 4 STADIUM HEARINGS an area bounded by Packer Avenue, 10th Street, Pattison Avenue, 11th Street, the Delaware Expressway, and Lawrence Street.
Good afternoon, Mr. Hankowsky. Thank you for your patience in waiting. Please proceed with your testimony on the bills that were just read.
Thank you. Being distributed is an attachment to my testimony, which I will reference in my testimony. Good morning, Council President Verna and members of City Council. I am William Hankowsky, President of the Philadelphia Industrial Development Corporation. I am here today to testify in reference to Bill Nos. 726, 727, and 728, which deal with zoning matters related to the development of new stadiums in the sports complex. Since the introduction of these bills, a number of discussions have occurred concerning the appropriate approach to zoning to facilitate new stadium development. 5 STADIUM HEARINGS Based on these discussions, we request that City Council take the following action: No. 1, that Bill 726 be withdrawn. It is not necessary; No. 2 -- and I would actually like to amend my testimony, Council President. I would like to amend my testimony on Bill 727. Instead of it being deferred, we also ask that it be withdrawn; Bill No. 728 we would request be amended pursuant to the zoning map that has just been distributed. The amendment to Bill 728, which is -- that's a typo, that's 728, not 726 -- changes a portion of the Acme site for proposed Sports Stadium District and allows it to remain Food Distribution Center Zone. This amendment allows for the relocation of Jetro. This amendment also eliminates the need for Bill 726, and hence why we ask for its withdrawal. Bill No. 728 as amended provides the necessary zoning to allow for the development of two new stadiums. And we would request Council's favorable consideration. 6 STADIUM HEARINGS Thank you.
Bill No. 726 was a text change to the Zoning Code that would have permitted food distribution center uses in a Sports Stadium District. It was proposed to allow for Jetro to be relocated into the Acme building. It then was raised to us that by doing it, we were allowing too many uses in the Sports Stadium District, it was too permissive. And that, instead, we could address the same problem by what we have done today, which is to change the map to Bill 728, allow the proposed Jetro relocation site to remain in the food center -- and we now know what that site is, so we can do that with a map -- and that that allows that to occur, and we do not need to change the text of the Sports Stadium District.
Mr. Ericson, you have copies of an amendment, or is it Mr. Mezzaroba that's going to be presenting them? Do we have people from the city 7 STADIUM HEARINGS Planning Commission here. Mr. Hankowsky, would you withdraw your request?
Withdraw my withdrawal? Yes. I understand that there is an amendment that you want to consider, in fact, to Bill 726, and which I would like to talk about after it is introduced. But in order to allow the amendment to occur, we will withdraw the withdrawal.
Okay. Well, we have read the bill. We have read the bill. So can we have City planning Come up, please. Good afternoon. Again, thank you for your patience. I know you have been waiting here all day.
It is just part of the job. For the record, I am Richard Lombardo, Director of Development, Planning, and Zoning for the Philadelphia City Planning Commission, here today to eventually testify on all these bills, but specifically to talk to you right now about Bill 726. 8 STADIUM HEARINGS This bill was originally, as originally drafted, had the purpose, as Mr. Hankowsky said, of adding Food Distribution Center uses to the Sports Stadium District portion of the Zoning Code 14-1000. Upon a request of Council staff, we drafted, and wearing our hat as zoning drafting service, drafted an amendment to that ordinance that would deal with the issue of accessory uses vis-a-vis independent, free-standing uses as a part, say, for accessory uses that are actually within the stadium. Like not to deal with the issue of vendors in the stadium or vendors in the First Union Center, but to deal with the idea of a free-standing commercial venture on Pattison Avenue or on the North Lot, or wherever you might want to put a free-standing use. And what we were asked to do is to separate out these two types of concepts. And for the free-standing uses, to require that they come back not only to the Planning Commission as a Master Plan Amendment, but back to City Council as a Master Plan Amendment. 9 STADIUM HEARINGS We were asked specifically to do it the same way we do commercial uses in Institutional Development District and in RC-6 residential; where, in fact, when someone wants to add commercial uses within those districts, they need both Planning Commission approval and City Council approval of the Master Plan. And that is the way we drafted it. And basically, the drafting -- do you want me to go through the amendment specifically?
Basically, what we would do -- let me pass up the amendments. I'm sorry.
If you go down to 14-1101, Use Regulations, the first thing we would do is delete the language dealing with Food Distribution Center uses. We would delete Paragraph 3, Use permitted under Food Distribution Center District 14-1602(1), provided that provisions 14-1606 relating to off-street parking are complied with. We would eliminate that completely. That would 10 STADIUM HEARINGS disappear. We would add under existing Paragraph 2 Accessory uses incidental to the above uses. And the incidental to the above uses are stadiums, grandstands, commercial meeting facilities. Tom is giving me the exact language. Grandstands, clubhouses, fieldhouses, stables, parking areas, and facilities training areas, fields buildings, stadia, major sporting events, commercial, recreation, exhibition. I'm sorry; that's the main uses, fields buildings, stadia for major sports events, commercial, recreation, exhibitions. Below that is a Subparagraph 2, which is the Accessory Uses. We would change the Accessory Uses as per requested to delete from Accessory Uses restaurants, office space, retail, and services that are not located within the stadiums, but would be free-standing. We would then also delete exhibition halls, meeting facilities, banquet facilities, housing accommodations, including hotels and motels. We would delete those uses as free-standing uses and create a new Subsection 3 -- that's all in 11 STADIUM HEARINGS italics -- that would say, "The following commercial uses may be permitted within the Sports Stadium District provided that following a and approval by the Planning Commission of any Master Plan or Master Plan Amendment that includes commercial uses, such plan shall be forwarded to the City Council for consideration." Then it lists that the City Council after reviewing recommendations from the Planning Commission deemed such uses appropriate, that the area to be designated commercial is indicated on the Sports Stadium District Plan and a specified list of uses is submitted. This list need not be limited to one use for each commercial space within a designated area, and that the 45-day review period specified in Paragraph 14-1002. And that's a paragraph that says that after 45 days, the Planning Commission's approval on any sports stadium amendment is presumed, that that 45-day period would not be imposed upon City Council, that would only be imposed upon the Planning Commission. That the specified uses shall be selected from the list below, and that list includes 12 STADIUM HEARINGS restaurant, office space, retail sales and services, exhibition halls, meeting facilities, banquet facilities, housing accommodations including hotels and motels. So now all of those uses in free-standing buildings, not within the stadiums themselves, would have to come back to City Council for approval of the Master Plan under this amendment.
Thank you. Mr. Hankowsky, you said you wanted to make a statement after the amendments were read?
Yes, Council President. My understanding is that this amendment, which City Council requested, is aimed at preventing the development of commercial activity, development activity, in what many of us now refer to as the Veteran's Stadium parking lot, or the North Lot, or what will become a new site, which is the current footprint of Veteran's Stadium once it is demolished. We absolutely concur that that kind of development should not occur without bringing a 13 STADIUM HEARINGS request to City Council to allow it to occur. And we believe that, in fact, that is addressed and can be further amplified and addressed in the other bills you have before you dealing with stadiums. In particular, that we restrict any rights given to PAID by the ground lease and lease lease-backs to simply allow only the development of the stadiums and the parking areas, and no other activity. And that the Administration and city government could not provide any rights for any other development to PAID without the consent of this legislative body. We totally understand that this is a very significant concern in the community, and has been the subject of much discussion. And we are prepared to offer an amendment, which I got this earlier today, but an amendment that will --
I was afraid that might be the response. But I understand, Council President. 14 STADIUM HEARINGS So we think we can address the concern. But we understand if we are unable to address that concern via that mechanism, that the need for this legislation, you know, may be there. So we would ask that, obviously, what Council is considering is that you take this amendment, I guess mechanically get it introduced, and allow us to work to see if we can address the same problem perhaps in a somewhat more specific and effective way. And, if we can't, you will need to adopt this amendment.
And if we cannot satisfy you, you may need to adopt this amendment, hence why we withdrew the withdrawal.
Councilman Cohen wanted to be recognized, but he is not in the room.
Yes, I am. I wanted to know whether Mr. Hankowsky wanted to amend his earlier testimony when he told us one day of the week tomorrow would be his last day of his hearing and testimony before City Council. I think this is 15 STADIUM HEARINGS the next week.
No. What I said, Councilman, was I took the liberty at what I thought was a fairly straight-forward hearing to simply thank you. But I am here until the 22nd, so you might see me more.
Thank you. And I know Councilman Nutter has his light on. Does he want to be recognized? Councilman Nutter. Councilwoman Brown.
Thank you, Madam Chair. Mr. Hankowsky, you say that there is language currently in the legislation that has come before us that speaks to the concern raised by Madam 16 STADIUM HEARINGS President?
I believe that the legislation before you does not allow additional commercial development. I also understand that -- I cannot take you to a paragraph that exactly says that. It is more by not saying you can, sort of by implication. So we are absolutely prepared to provide an amendment that will make that absolutely clear in the affirmative, that such development is not permitted without Council's consent.
And this would give people in the community the assurance that any development that occurs on the North Lot would have to be presented to them by the developer, for their approval, and come back here to City Council for approval. I don't know what's so horrible about that.
And I think we should be defining what the boundaries of the North 17 STADIUM HEARINGS Lot are, Mr. Hankowsky.
Yes. My understanding would be that they would be the area from Broad to the west, Pattison to the south, Packer to the north, and probably under the current development scheme I guess 10th Street to the east. Because really we come over now to 10th, and come down. And then we have the stadium site, you know, which I assume, if we decide to do it, that's going to be there.
Thank you, Madam President. Thank you, Mr. Hankowsky.
Thank you, Madam President. You know, we expressed this concern before in the previous hearing, in terms, I think I asked you very specifically whether there were any plans about developing that area, and the answer at that time was no. 24 I think we have found out that there were some plans about developing an office complex 18 STADIUM HEARINGS and perhaps entertainment area around there. Well, the answer that was given to us last week was, no, there were no plans whatsoever about that.
I clearly try in this chamber, Councilman, not to ever misstate a fact. I actually can't recall my exact words.
But let me be very clear. The proposal that has been transmitted to Council, the 13 bills, in no way were asking this Council at this time to permit any development in that area. You are absolutely right, that people have talked about -- you know, various people could talk about all kinds of things. But people have talked about something like that happening. But we were not seeking and are not seeking currently Council's consent to do that.
I understood that it was not within the papers that we got in front of us. Everyone understood about that. But we also understand that while we 19 STADIUM HEARINGS are presented with certain things, other things are developing concurrently and parallel to, and then we are presented with a whole series of things that are almost a fate accompli at that point. And we are given very little even opportunity to react, and specifically. And I believe that we need to be able to put this, as the President is doing, really out front. And I think the community interest and concerns have to be addressed. And that nothing gets done, very clearly, until and unless we have hearings in this Council and the concerns of the community are met.
As a matter of fact, I think that several weeks ago Councilman DiCicco and I had both received a call from a newspaper reporter inquiring if a night club was going to be placed in the stadium area. So I just want to make absolutely certain that the community is protected in every way possible.
So we know that at 20 STADIUM HEARINGS times things are not presented to us. But there are times that things that are not in front of us are really being developed and talked and done; that's all. Just that we are aware of what is going on; that's all.
Thank you, Madam Chair. Mr. Hankowsky, also at the last hearing we talked about the existing First Union Center agreement to do certain development. I think you called it the T. The fact is that there are certain development rights that already exist, even before this stadium deal. And I am confident that the community is not as aware of what potentially can be developed at that site today. Could you elaborate? Because there was some conversation about flipping, and I think that's where the North Lot got involved in this. 21 STADIUM HEARINGS That you wanted to flip some of that development rights over to some land that will become available. So could you just go back over that scenario, so I can understand exactly what's going on.
Yes, I can. I was actually looking. I think I might not have the file 10 that gives me -- I will take the liberty of doing this off the top of my head. When the Comcast Spectacor transaction was approved, including going through City Council for approval -- and it is a fairly complicated transaction, just legally it has got a lot of documents to go with it. In fact at the end the --
It was 1500 pages of documents. One of the documents was what was called a Development Lease. And specific areas within the 55-acre site were leased to, at the time Spectacor, now it has become Comcast Spectacor, and 22 STADIUM HEARINGS they are permitted pursuant to that to do certain specific development. There are basically four sites that where it can occur: The northwest corner of the site, so that would be the corner of Broad and Pattison; the northeast corner of the site, which would be the corner of 11th and Pattison; the area between the two arenas, between the Spectrum and First Union; and a parcel to the rear of the First Union building, between the First Union building and I-95. I believe in total it is something like acres. But on that one, Councilman, I will 15 take the liberty of getting the right number for you off the top of my head. On those four parcels, they can develop the following list of things: Number one is a -- did something happen?
Is that better? It is on, the lights are on. Is that better?
Okay. I'm sorry, Councilman. There are a list of specific activities or projects that are allowed to be built. There is one hotel of, I believe, 300 rooms.
The President wanted to know where. The President had a question on that.
These uses can go on any of the parcels. So it isn't a use by parcel. In other words, there are four parcels, and then there is a list of uses, and they can go on any of the four. 24 STADIUM HEARINGS So one is a hotel of 300 rooms; one is a office building of, I think, 100,000 square feet, or maybe it is 75, one number is 75,000 square feet; retail of, I think, 75,000 square feet; and then between the two buildings -- and you may recall, I don't know if you do recall, at the time that project was originally envisioned, there was actually the idea that there might be a building that would connect the two arenas, and you could actually go from one arena to the other in an enclosed environment. It was called sometimes the Connector Building or the Expo Center Building. And that building, I believe, allowed for 300,000 square feet of development in that building, if you built between the two of them, which could have office and retail entertainment uses. There is a proscribed period of time by which they have a right to do those, which I believe is 20 years. So if -- I think those bills were '92 bills, if I recall. So we are probably eight years into it. And there was a specific provision 25 STADIUM HEARINGS that if they built any of these things and the project occupied current parking areas, that the parking that was displaced as a function of the project had to be replaced on the site. So I will use the example, if the hotel took up 400 parking spaces on the site, the building itself, you would have to find a place to replace 400 parking spaces, plus the parking necessary for the building. And I think in hotels, is it one space for every three rooms? Every ten? One for every ten. So you need 30 parking spaces for the hotel, plus the 400 you displaced. You would have to create 430 spaces. So there is a whole sort of prescribed set of things that have to happen.
Explain the statement that you made the other day about possibly a flip.
Well, this kind of goes to the Council President and Councilman Ortiz' comment. What you have before you now is not STADIUM HEARINGS requesting that anything be done to those rights. They simply stay where they are. They are where they are. The discussion, or the idea, that some people have raised is, would you -- I will use the term, move those around and put them on different parcels. And that would be the concept of moving them from one parcel to a different parcel in the sports complex. What I'm saying today is, we are not asking for permission to do that. If we would ever want permission to do that, we would come back to this legislative body to do it, which I believe we have to do. But it will be absolutely clear that that's what we have to do.
Let's just talk about density and the potential for development at the new sports complex. You are talking about, as of today, the Comcast Company has an opportunity to build on the sites that you described, the four sites. Then there is the potential of additional development on 27 STADIUM HEARINGS the North Lot.
Let's be realistic. We have a big area that's going to be made available by raising the Veteran's Stadium and also other land in the immediate area of the two new facilities. You are telling me that the four parcels that we just discussed are able to be developed as we speak, if they choose to do that.
Now, you are also telling me that there would possibly be the potential of the developer coming back and asking to develop additional space on the North Lot. I mean, they could, if they wanted to, come back here and ask for that. What other areas would be eligible for development that would create additional density in the area? As we speak today, what would become available after the two stadiums are built, beyond 28 STADIUM HEARINGS the four parcels that you just discussed?
Well, let me try to be very clear. Based on the legislation before you, the way this transaction is put together, no 7 additional parcels are available for development except the parcels that Comcast Spectacor has the right to. None.
Is being proposed. And the concern, I believe, that's been raised by the community, which I think is implicit in your question, is, well, suppose some day somebody wanted to do something else. What would they need to do to be able to do it? And what we're saying today is, in addition to, you know, zoning and planning, normal approvals, they would also need to obtain the approval of City Council.
Who actually is going to be the owner of the land after -- 29 STADIUM HEARINGS
The city will own the area that Veteran's Stadium is presently on?
And any considered development, there would have to be a purchase of that land?
But all of that land will be under the ownership of the City of Philadelphia?
Yes. It is owned by the city. And what the transaction contemplates is that it is leased to PAID, for PAID in turn to lease it to the teams for the stadiums and the parking areas. So what I'm saying is that we would 30 STADIUM HEARINGS make it clear that the legislative authorization this body is giving, if they so choose, would give us for new stadiums, would be limited to new stadiums and parking; and that the city would have no right to pass on to PAID or any other party any other rights for development without the consent of this body.
Do the Phillies in this deal or the Eagles have any options? Again I understand that there are some options that the present Comcast ownership have on certain areas down there. There are some options that they have. My question, the area where the stadium currently is, and the North Lot, in the deal, would the teams have any option at all? If the city decided to sell that area for some reason, would either of the teams have any option on that land?
No. The teams have not been granted any development rights in the transaction. They have no special standing, no. 24
Thank you, Madam Chair. And, Mr. Hankowsky, with all due respect, I know that the bills before us do not specifically ask for the opportunity to develop any other parcels than which are specified in the legislation. However, during Mr. Montgomery's testimony, he made it very clear that he kind of described the vision of Utah Street to me in my questions to him as it relates to 10th Street. The 10th Street would be envisioned to be a Utah Street type of setup. Now, certainly you didn't make that testimony; it was him. But I find it hard to accept that there has not been prior discussion about the potential development areas, including the North Lot and the Veteran's Stadium lot, the lot that would be vacated when Veteran's Stadium is demolished, in the whole course of these conversations. I can't believe that we made a 32 STADIUM HEARINGS decision to move across 10th Street and to buy Jetro without contemplating that the west side of 10th Street, either along 10th between Packer and Pattison, or along Pattison between 10th and Broad, would in fact be developed in some commercial, retail, entertainment way. I mean, I recognize from a technical aspect you are not asking for that approval. But I can't believe that during the course of making this decision, this 60 to 70 million dollar additional decision, to move the across the street to Jetro, that in fact there has been no contemplation of this kind of development there.
Could I answer it in two parts? Because I want to try to address both parts. The stadiums themselves, the facilities that the teams will develop, conceivably might have a restaurant in them. I mean, we all know, for example, there is Victor's in the First Union building, you know, where there is a restaurant. There happens to be, I think, there is also a sporting goods store inside the First 33 STADIUM HEARINGS Union building at the one entrance, where you can go in and buy a Flyers jersey and that type of thing. The same type of retail is anticipated by both teams in their stadiums as part of their complex. So I think when Mr. Montgomery talks about Utah Street, which I think at least both you and I know from the Camden Yards model, all we think we are talking about is that he has the capacity to have offices for the Phillies and he could have a restaurant, he could have a sporting goods store, and he could have it within the complex that's called The Stadium. But he has no rights to ancillary development. Now, in terms of the areas that you have described, along Pattison or along 10th, you are absolutely right, there have been people who have talked about, boy, once you have placed these stadiums now where you placed them, on the Jetro site and the Acme site, and you have got the two arenas, and you have this anchoring of the various stadium and arenas, that you might -- when you look at it, it is fairly logical that there are corridors that suddenly you say, wow, you know, here is a 34 STADIUM HEARINGS corridor where a lot of people are going to go by because they are going to go from one building to another or parking from one area to another. And there is -- and these could be real commercial development opportunities. And people have talked about that, and people have thought about it. And what we're saying is, we have made no commitments to anybody about it. We haven't done anything about it. I also don't want to say that, you know, some day, you know, the city might not want to come here and talk about it and talk to the residents of South Philadelphia about it. But that will be on its own track, its own process. But you are right, people have talked about it.
But none of that discussion, none of that future talk, none of that future plan was exposed to anybody in this room or to anybody in the community until we caught it and are now making moves to correct it and protect it. I mean, it is almost as if, well, we are doing this big favor for you by moving the Phillies' facility 700 feet across the street. Boy, 35 STADIUM HEARINGS are we out to protect your interest. And then on the other hand there has been discussion, there has been conversation, albeit most, I guess, all of it private, certainly it has not been in the public forum, that this may happen. But if we didn't catch it -- not you; if we didn't catch -- the Administration, if we didn't catch, the city, by having to come up with this proposed amendment or your solution to this proposed amendment, you wouldn't have got caught. And then the opportunities to develop that without the input from the District Councilperson, without the input from the community, without the approval of this Council would have been carte blanche. So I think maybe you can understand why many members of this Council have lots of suspicions about the motivations of the Administration and the teams as it relates to the development of this area. Because we are not being told all the facts. We don't have all the information. We don't have the leases,, we don't know where the $54 million hole is coming from. 36 STADIUM HEARINGS And now because of staff work, Council technical staff work, President staff work, and Council Members asking questions, oh, we find this loophole that now we are going to try to fill. How many more loopholes are there? How many more opportunities are there for the city or this Administration or the next Administration to do things down there without the input from Council, within the input from the community? So this compressed time frame, which we have been forced into by the Mayor, is now creating a situation for us that we are suspicious. And we are looking at things like, maybe, there is a problem here, when there isn't a problem there. And I am telling you now, if we had from mid September, when we came back from summer recess, from that day on, to this day today to deal with this problem, we would all have a much better level of comfort about all of the aspects of this deal, not just getting it through and done by December 14. And I think that the Administration has been disingenuous with the community and with 37 STADIUM HEARINGS the Council and has not been forthcoming with information on this that we caught them on and on other things. And I think it has been a disgraceful process and has been total lack of disrespect for this body and the people that live in that neighborhood. Thank you.
The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: I think Councilman Cohen's light was on before mine.
No, not according to the monitor. COUNCILMAN DiCICCO: Mr. Hankowsky, when you were responding to one of the questions by --
Can I make one comment to Councilman Cohen, though? Maybe that should have been my last hearing.
Mr. Hankowsky, it is not personal. I have known you for a long time. You are a straight-up guy, you are competent. You 38 STADIUM HEARINGS have always been honest with us when you are able to be. And none of this was directed at you. I think you know where it was directed at. I apologize if I offended you in any way.
No. No. I appreciate that. You did not. COUNCILMAN DiCICCO: Thank you. In your response to one of the questions posed by Councilman Rizzo, you talked about future development, and you used the term retail, slash, I guess entertainment type of development which is possible. Do you have any information or thoughts on what the proposed nature of what that retail/entertainment development would be? Give me a sense of what that means.
I am just looking for a document. COUNCILMAN DiCICCO: You know, because when I think of entertainment, for me, it is of the similar nature to what we hopefully were going to have developed at 8th and Market, as an 39 STADIUM HEARINGS example, and what is still being proposed and hopefully will eventually come to fruition, which is the Penn's Landing Entertainment Center, combination of retail/family entertainment venue.
Right. What I have got in my file here, Councilman, is the Master Plan for the new arena at the Sports Complex that has been approved by the Planning Commission, that was done, I believe, in 1992, though my memory there might also be wrong, which dealt with these development rights that Councilman Rizzo asked about. And, for example, retail space of up to 75,000 square feet that I mentioned that they could do says, "to include but not be limited to bakery, delicatessen, book store, record store, variety store, indoor theater, studio, restaurant, cafe, ice cream fountain, sporting goods," that nature. COUNCILMAN DiCICCO: When you talked about theaters, we obviously talk about movie theaters. So it kind of sounds to me that the potential retail/entertainment development would be 40 STADIUM HEARINGS something very similar to what we have been for the last five years, and with your help, developing along Penn's Landing. And while I am very supportive of that kind of development, and I think it really is important to the City of Philadelphia, my concern is -- and I guess this goes back to what I was alluding to the other day without being specific -- in your professional opinion, do you in any way feel as though, should the stadium site district move forward with a retail/entertainment development, what impact would that have on the Penn's Landing Project? And would that not, in fact, cause a potential problem for that development along Penn's Landing?
I want to answer your question. I just also want to say that there's also some text, just for the fullness of the question prior, that deals with the connector building. And it also lists like sports hall of fame and memorabilia sales and participatory sports activity, which I guess is like batting cages. So there is text. 41 STADIUM HEARINGS As you know, this Master Plan and these agreements were done, as I said, you know, eight years ago. And, actually, some of us will remember, Council President will remember because she was the District Councilperson, we loved this deal so much, we did it twice in this chamber. Because we did it in 1989 and we did it again in 1992, because it needed to get amended and came back. We granted these rights, and none of them have ever been exercised. The development hasn't occurred. And part of that really deals with -- COUNCILMAN DiCICCO: But we were not entertaining the possibility of two new stadiums.
I agree. I totally agree. COUNCILMAN DiCICCO: So from a development economic standpoint, if we are going to do two stadiums, this would obviously be the most opportune time to do that.
I agree. Because, in fact -- and I am not sure whether it was here or in 42 STADIUM HEARINGS some other venue -- somebody asked me why they weren't used, why these rights weren't used. And I think you are absolutely right, Councilman, that actually the uncertainty about the future of the two tenants at Vet's Stadium, if you are going to build a restaurant or something, you know, and half the attendance might leave the area, you know, you are making a 30-year investment, you probably wouldn't do it. So I agree with that. But when we did this in 1992, it was sort one state of the real estate world. And since then, because you have been such a leader in this in the waterfront, you know, there's been a development in real estate called Urban Entertainment Centers. They even gave them a name. And the Penn's Landing Project I think will be a stunning positive example of that. I think we also realize that those kinds of centers, you know, a region, an area, it is not like you can do ten of them. There is not enough of a market for the unique kinds of uses that go in it. And even some, you know, even some of the retail stores, you know, an FAO Schwartz. FAO 43 STADIUM HEARINGS Schwartz, they are at King of Prussia, they have agreed to be at Penn's Landing, they are probably not doing another store in the Delaware Valley because they -- COUNCILMAN DiCICCO: Oversaturation.
Yes. Because they are very particular. So there is a possibility that a project, another Urban Entertainment Center kind of project, could have a competitive aspect to it to other things we're doing. There's also a possibility that, if done well, it would not have a competitive aspect. So if at the sports complex, I will give an example, you had the ESPN zone, which I guess there are two in the country right now, one in Baltimore and one in New York, which has a total sports flavor, it is meant to be a place where you go and watch sports and it has got sports memorabilia and they do live shows, sports talk shows, well, that's the kind of thing that probably doesn't want to be at Penn's Landing, but it might want to be here. COUNCILMAN DiCICCO: But it also may 44 STADIUM HEARINGS want to be at 8th and Market. Because as you and I both know, there's been talk about possibly 8th and Market. So maybe we could fill the hole at 8th and Market. So my concern is -- and I think you said something similar -- is that the region could just afford just a certain amount of number of these types of entertainment venues. I don't know if Philadelphia could support two. I thought we can do Penn's Landing and 8th and Market, because 8th and Market would have been much smaller than I envisioned could possibly happen at the sports stadium site. Which, if we were not doing Penn's Landing, I would think, in my opinion, would make a lot of sense to look to do in South Philly, neighborhood issues aside.
Can I say one other thing, though? It is not clear to everybody that even if you wanted to do this kind of development, it could actually work. There is a pretty critical aspect of this, and whether it is under current Comcast Spectacor property or somewhere else. And I think 45 STADIUM HEARINGS this is so significant an issue that it also may have contributed to the fact that nothing has happened down there. You end up in the sports complex with a very interesting phenomenon. We talk about 5 million, 7 million people that can attend in all the different buildings and go to things. And you say, well, there are all those people. You know, that's a lot of people. That's more people than go to the Liberty Bell. But they are there for an event. So they come before, you know, pitch a ball or, you know, have a bite to eat. When the event is on, they are not at the retail entertainment. And when the event is over, maybe they will do something, and then they are gone. And when the event is on, the parking is often significantly filled, you know, depending on how many people are in attendance. So if you or I just wanted to go down and just go to the restaurant, we might not find a parking space. And at least nationally nobody 46 STADIUM HEARINGS seemingly has figured this out. It is very difficult to find successful retail/entertainment adjacent to a sports facility that's done very well. It has been a real puzzle to figure it out. COUNCILMAN DiCICCO: But that example is on the days and nights, or whatever, that there are events that are going on. But the entertainment center would not be developed just to accommodate the facility on game night or game day. It obviously is being developed to have a year-round use.
That's right. COUNCILMAN DiCICCO: And if you go to the Penn's Landing Entertainment Center, you go to a movie, you may go to the restaurant first and then go into the movie, or vice versa. So I understand how all of that works, which is why I have an even greater concern as to the potential development of an entertainment center within the Stadium District. If we didn't have Penn's Landing on the drawing board, I probably wouldn't be concerned at all. And when you -- if we were -- and 47 STADIUM HEARINGS this is, I guess, hypothetical. But if we do move forward with an entertainment/retail center, that building, or if it's one building or many buildings, obviously would take up a certain portion of the footprint, which reduces the number of parking spaces that we all are so pleased to understand that we would be gaining under the plan. So one of two things has to happen. We either lose the parking spaces or we replace them. Where does that money come from? And while we are talking about parking, if I can kind of segue in -- and if these questions aren't appropriate to the discussion we are having -- when we looked to do possible stadiums in South Philadelphia I think under the last -- at the last Administration, there were several sources of revenue. And they are -- and correct me if I am wrong -- the state contribution, the team contribution. And on the city's side, we were looking at four sources of revenues: city wage tax, the parking surtax. And maybe I missed it during all these hearings, but is that not a part of what we 48 STADIUM HEARINGS are doing, looking at in this new plan? And, if not, why are we not considering a parking surcharge, which is really a user fee, that would hopefully reduce, maybe, the city's contribution to the stadium project going forward?
I think I have got two questions, so let me try to do them in sequence. COUNCILMAN DiCICCO: I'm sorry. I always seem to do that. I apologize.
That's okay. Your first part was the issue of eliminating parking as a function of development. And as I have said before, we are not asking Council to consider that. But, as I also said before, when it was done in the Comcast Spectacor transaction, which I take some pride in, since I was involved in that, we actually thought about this question and made it the affirmative obligation of the party who had the rights that they had to both replace the parking they displaced, as well as provide for the parking under the zoning code for whatever the use was they put. 49 STADIUM HEARINGS And that's, in effect, their cost of doing business if they proceed with their development. So this legislative body might want to consider an analogous provision, should anybody bring you in the future a request to do development down there, which is how I think you could address it. To your second question, which is the issue of the inclusion or not of a parking surcharge in the transaction, I mean, fundamentally there are a variety of revenue streams in the transaction. And a parking surcharge, to some extent, is simply another way to say we would raise the parking rate. And where this transactions ended up was requesting the teams to do more than they had been prepared to do in the past. And on the Phillies side, that dealt significantly with increasing their contribution to the building and taking on various responsibilities. On the Eagles side, it dealt with decreasing our commitment to operation and maintenance funds, as well as both teams picking up 50 STADIUM HEARINGS the inflation. And so we could have, quote, called it a parking surcharge, collected it, used it to pay for a contribution. Or we can simply say, "Teams, you get the parking and your make your contribution go up." And we did the latter. COUNCILMAN DiCICCO: Yes, but --
By the way, there was also some bond issues, to deal with this thing I have mentioned before, called private payments, to make any kind of surcharge potentially legally difficult in terms of we could lose our tax exempt bonds. It just gets kind of messy. So you look for, I will use the term, a cleaner way to deal with the revenue streams. COUNCILMAN DiCICCO: I am not really comfortable with the answer, and I respect the answer. I just don't understand. We keep saying -- and I am a proponent of the stadiums. I think that's obvious. And I have been as patient as everyone else about this whole process. But when we keep saying --
And people have been very patient. 51 STADIUM HEARINGS COUNCILMAN DiCICCO: When we say the teams have really gone out of their way, you know, we still have to deal with a potential $54 million gap. And we keep hearing that information is coming to show us how that gap will be filled. But in order for us to get -- I tell community people when developments are being proposed in my district, not everybody gets 100 percent, there's give and take. And we are saying that the teams are giving of a certain value into this process, so that's why we're not doing the surcharge. I think that, again, absent whatever the legal issues are concerning the bond, and I am not familiar with that at all, there's got to be a way of figuring that out. And I don't mean to be doing this at the last minute, but, as Councilman Kenney said, we are at the last minute -- not at our choice; it was just the way this thing was proposed to us, presented -- that we ought to really seriously look at this surcharge. As I said to Mr. Rosentraub the other day, the rental tax is a tax, but it is a user tax. 52 STADIUM HEARINGS I mean, you decide to rent a car, you get it. If you decide to drive your car to the stadium, then you pay the parking surtax. If you decide to take SEPTA you don't pay it. And I am looking again to reduce whatever the public contribution has to be as much as we can. Because I really believe at the end of the day -- and my conscience tells me that this is not that great of a deal, although I have done things in the past that I didn't think were great, both professionally and privately -- that we've got to really look under every rock before we finalize this deal. And I am not trying to throw, you know, anything at you at the last minute. But we have some time left, and I think that I would like to have more discussion on that. And the one final question I have as it goes back to the entertainment center, most of these types of developments have a lot of components that go into making them possible, public contribution, private contribution, et cetera, and one of the other components are naming rights. And I alluded to this the other day, 53 STADIUM HEARINGS but I will be even more specific today. Comcast, in my opinion, seems to be way out front as the potential entity to do naming rights at the stadiums, at the Stadium District site, for future development. I don't see how they would be willing to do naming rights at the stadium site and also at Penn's Landing. And I draw the conclusion that if that's what the decision has to be made, they are going to pull out of Penn's Landing, do the stadium, and we don't do the development at Penn's Landing. And it is not because it is in my district and it is my little baby that I have been walking through for four years. My ego is okay. If it doesn't happen, it doesn't happen. But I don't want to be cannibalizing other projects in the city to get this done. And maybe that's not an answer that you can come up with. But it is a statement, more or less, on my part. I'd like to see this Council, who worked very hard along with me to do the TIF, it took a lot of convincing. And my conservative, 54 STADIUM HEARINGS fiscal conservative colleague to my right here has a hard time, as well as my other fiscally conservative colleague who is walking in now, doing TIF deals. And they went along with it in the end. I guess as I said, it is probably more of a statement for the record than anything else. I have some serious concerns about this. And I think we need some answers to those questions. If not from you, Bill, from somebody.
I understand. I will make sure that that concern is transmitted. COUNCILMAN DiCICCO: Thank you. Thank you, Madam Chair.
Mr. Hankowsky, on the map that you proposed, Councilman DiCicco was asking me, where is the North Lot shown?
It is not shown because it is already zoned Sports Stadium. It is not part of the remapping.
The North Lot? Yes. COUNCILMAN DiCICCO: Because when you 55 STADIUM HEARINGS talk about development, that's part of -- not to interrupt you, Madam Chair -- the potential development, also, along with --
The three areas that are currently zoned Sports Stadium are the North Lot of Veteran's Stadium, the two arenas and the parking around it, and the practice facility acres. 9
Thank you, Madam 10 President. The Chair recognizes Councilman Cohen. 11
Thank you, Madam 12 President. 13 Mr. Hankowsky, or maybe the question 14 goes to the Planning Commission people. With 15 respect to a Stadium District, is that different in 16 content, say, from institutional districts? 17
Yes, it is different, 18 in that in an institutional district -- they both 19 are Master Plan districts, which basically means the 20 plan that ultimately is adopted becomes the zoning. 21 So everything is tied down, every building is tied 22 down, every use of every building is tied down. In Sports Stadium District, once Council rezones a property to Sports Stadium, any change to the Master Plan only requires an approval 56 STADIUM HEARINGS of the Planning Commission. I think there are two reasons for that. One being that the time they did that, the Council felt that the planning -- since it was publicly owned ground, they had control over the fact that they owned the property, they didn't need to have to come back to Council, I mean. And the second thing is, because it is publicly owned ground, approval is also needed from the Art Commission. So in fact you are already going through two review processes, the Planning Commission to review the Master Plan and the Art Commission to review how the buildings look and how the signage looks and the materials being used in the building and what-have-you. But that is a distinction between -- that's the Sports Stadium. In the IDD, the Planning Commission approves the Master Plan and sends it to City Council, and City Council also approves the Master Plan. Right now Council approves that by resolution, after. So you have two bodies approving 57 STADIUM HEARINGS the Master Plan in an Institution District.
So that a community in a Stadium District starts with less rights than an Institutional District, where the people affected by the existence of an Institutional District always have an opportunity to raise an issue at City Council?
They do have, that's right. They have an opportunity in the Institutional District to raise the issue with City Council. And you know from your years here that there have been instances where the changes to Master Plans have either been held up or turned down as a result of Council not approving them.
So that the amendment that was earlier offered by the President in her role as District Councilperson to Bill 726, really that basically merely gives to the Stadium District the basic rights that communities have. It expresses it much more clearly, I have to say. I think it is a good example for Institutional Districts to adopt. But it merely basically gives the 58 STADIUM HEARINGS same right to the community in the Stadium District issue as it does in an Institutional District zoning issue; isn't that right?
The answer, it is actually a two-part answer. Yes, it puts it on the same footing. But there is a distinction. And the distinction being that in the Institutional District, the property is not owned by the city. I mean, I think the way Mr. Hankowsky proposed doing it by lease is probably a stronger way than doing it by zoning, because there is no 14 appeal of the leases, there could be of the zoning. Just so to answer the question that way. But to answer your question purely from a zoning point of view, yes, you are putting it on the same footing. You are putting an area resident who is a neighbor of the stadium on the same footing, in terms of the right to come before Council to oppose something, as a neighbor of an Institutional Development District has today.
Well, in a situation where the municipal government, the Office 59 STADIUM HEARINGS of the Mayor, maybe not acting directly through the Office of the Mayor, but perhaps acting through a department of city government, has the ability to bring about changes through an agreement, say, with the tenant on city-owned property, isn't there the same need for protection to the community in a zoning matter? I mean, the fact that it is the city working with the proposed user doesn't give the community any more protection.
In your scenario, where an Administration or a Mayor can make changes to the agreement without coming back to Council, then this bill, Council President Verna's amendment, would provide additional protection to the neighbors around the stadium, or around the Stadium District.
And I think that's a very important aspect of that amendment and something that gives communities a feeling of security which they otherwise may not have. Now, Mr. Hankowsky, most of my discussions have centered about protection of community people, in many ways the public funding and so forth. 60 STADIUM HEARINGS But now I want to direct it to another area that Andrew Cassel of the Inquirer, whom I have never met, but I enjoy reading his columns, although I generally disagree with him all the time because he is a very sharp fiscal conservative -- like me in this case; you know, fiscal conservatives change with issues -- but he raises the question of the fact that so much of the public resources are going to be devoted to the stadium, that it may adversely affect and limit options and choices to the private sector. And it gets to be an issue very close to that that was raised by Councilman DiCicco. That by concentrating so much of the city's resources in the stadium, are we depriving other business opportunities to other groups in the way that Councilman DiCicco said and in other ways? Has the city examined that issue at all? Cassel says it is a matter of priorities which business enterprise, say, are you going to be supporting? You can't do everything, because this city obviously has limited resources. He points out that no economist of repute ever argues that stadiums, sports stadiums, 61 STADIUM HEARINGS create economic development. He says most of them say it is neutral. And then he says, but there was one very recently who in a study says it is not neutral, it is harmful to economic development. And that is, I think, a Professor Coates of the University of Maryland, who has apparently made the most recent study. What is your feeling, that you are working constantly in the field of promoting economic development? How do you respond to the critiques of Cassel and what I understand are the critiques of just about every traditional economist? Most of them are called academic. I don't think you can call the Inquirer writer "academic." He has been writing for a number of years. And I think doesn't he raise an important issue?
Well, I think there's actually two questions here, Councilman. Let me try to address them. First the issue of do stadiums 62 STADIUM HEARINGS promote economic development. The Administration is not putting a case before you that is based on that premise. The case we are putting before you is that the stadiums, by their own activity, by their own activity -- not by other activity that they stimulate -- are a justifiable investment. And I appreciate that when you talk about public money in stadiums, you often look at the question of, is it wore the investment, et cetera. And here again perhaps it is actually -- and I believe I read the same article, the same column -- it is a situation where our lack of competitiveness generally for business activity, the city, which is driven by the high incidence of taxation of various sorts of various things that we do, you know, which discounts we have been trying to deal with over the last few years by lowering the wage tax and trying to make this a more attractive place, but stadiums happen to be a venue where, as I have mentioned before, we tax every activity that occurs, from when you park, to when you pay the admissions tax, to when you do liquor by the drink, 63 STADIUM HEARINGS to when you do the sales tax, to the wage tax on players, visiting and home, et cetera, et cetera. So our analysis is on the narrow focus of that the taxes this generates can pay back our investment, plus, which is not the economic development argument. I think that there is the possibility of other kinds of development that it might support, but we are not arguing the quantification of that and that that is the basis of this investment. To your other point, which is, is this a displacement? In other words, are we taking these dollars, spending them here, when we could spend them somewhere else, the classic opportunity cost problem, or question? I think there's two components to that. One deals with the rental car tax, which there's been some fair amount of discussion about, you know, over the last several days, Councilman. If that tax is available to the city, if the legislature does not repeal it because we don't use it for stadiums, which there have been letters from legislative leaders saying that they 64 STADIUM HEARINGS might do that, if you still had the tax, then there is clearly an opportunity cost issue. You could spend it on somewhere else. In fact, we even said maybe you could spend it repairing the Vet. If it gets repealed, there is no 7 opportunity cost question. You either spend it on stadiums or you don't have it. And the second component of paying it back are the taxes generated by the activity in the new buildings, which you don't have if you don't build them. So, again, I think what we are trying to do here is spend the money the project brings with it. Now, there is a different question, which is the question of, do you have to spend this money at all, or can the teams pay for this themselves? Our position has been clear. We think the teams have drawn, you know, have said they can spend what they have committed and can't spend more. That's a different question. Because clearly if they would just pay for them themselves, 65 STADIUM HEARINGS then you would have the opportunity cost issue of the dollars we are investing because you would still have them. But we are trying to be fairly -- you know, you and I may disagree on this. But at least from an approach standpoint, we are looking at the revenues generated by the project paying for the project, and those revenues don't exist without the project.
The revenues in a project like this, the revenues that are promised to the city, always seem to come in the form of backloading, always allowing for the opportunity, as here in these current stadium leases, for changes to take place before the promise of revenues toward the government ever becomes reality. You talk about the teams are going to be here for 30 years. We have heard that talk before. But now the Administration says, yes, but that's not going to work. Maybe it is only going to be the 20 years. Maybe they will run out of town to us if we don't agree quickly. Is that the case here? Are the major 66 STADIUM HEARINGS revenues of the city going to be backloaded?
I don't think so, Councilmanment. I mean, I think, again, this transaction, you get the immediate benefit of the construction activity, you get the immediate and ongoing benefit of the children's fund, the immediate and ongoing benefit of funding the Special Service District. In the sixth year of the transaction, the School District begins to net an additional 2.7 million that you don't get today, on top of preserving what they get today. And we have an ongoing flow of General Fund dollars that pays for our investment and nets us a small surplus. So I don't think this is a backloaded transaction. This is a transaction where -- it is not like the one you are implying, which is the sweet flip, where somehow the math changes in the deal later. The math in the deal is basically the math in the deal from day one throughout the transaction. 67 STADIUM HEARINGS
But the deal is being changed now. Isn't it a fact that under the current lease, that we would be getting, beginning with February of next year, an infusion of what originally had been talked about at 6 million, when the stadium lease was first talked about, now it is down to 4, and I heard a whisper that the teams are saying it is only really a million and a half. They will probably shortly be saying that the city owes them money, or something. But isn't that happening just as we are about to get money? We are talking about visiting the question of the lease for the remaining years that the Vet would be used, assuming the stadium deal gets approved by Council?
There will have to be an amendment to the Vet lease to terminate it.
And the legislation, without any action by City Council, the obligation of the teams to pay whatever that figure is on an annual basis?
That has to come here. 68 STADIUM HEARINGS If there is any change in the current obligation of the teams to pay a portion of the sweet revenue, that would require Council action.
Even if there were a new lease replacing the old lease, and the new lease did not require the payment? I don't understand that.
Oh, yes. No. We can't amend the Vet Stadium lease without coming here. You approved it; you approved that lease. We can't amend that without coming here. I said that on the record the other day.
You mean it will not be possible for the city to release these teams from their obligation to pay for the super boxes without the matter coming to City Council?
I know that's your view. Are you speaking, really, for the Administration on that? Because they did not say that at the beginning, when I first raised the issue.
Probably the right 69 STADIUM HEARINGS person you want to see is the law department, that that's in fact the legal way it works. I could ask the law department to provide that in writing to the Council President.
I would be happy to did that, Councilman. That's what they told me, so that's why I am repeating it to you. I am not a lawyer like you. So I don't practice without a --
Mr. Hankowsky, we are being asked through the Council President going way beyond September, way beyond even June, I think back in March, kept asking for information which we did not get for many, many months. And it was renewed in June the request, so we could study over the summer. That did not happen, because the Mayor had his mind on 70 STADIUM HEARINGS 12th and Vine, apparently, and nothing seemed to be moving, at least nothing was made available to us. Tell me, what is this emergency that would compel us to do two things that City Council is being asked to do in a way that's never been asked before of any City Council in my knowledge? We are being asked to do what I think is a totally illegal act. We are being asked to delegate the powers of City Council to the Mayor. We are being asked to, instead of Council having a responsibility for enactment of legislation, we are being asked to enact general language, with the substance of the legislation to be placed in the legislation by the Mayor, meaning the Administration people, acting maybe through the Finance Director and the City Solicitor, but basically all appointees of the Mayor, we're asked to let them do that. I believe -- and I have been worrying about it for a long time -- it seems clear to me that it is an illegal delegation of power. But without respect to the legal aspect, we are being asked to approve a lease which we will never have a chance to get back at and see 71 STADIUM HEARINGS again with the power to change it or to approve it. And we are asked further, we are told that that lease will be good for the next 30 years. And that if the lease is changed at any time within the next 30 years, it can be changed in any fashion without Council involvement. That's Point 1. We have never, ever by any Mayor been asked to act blindly. Now, I pose that to you. What could possibly be the justification of seeking to compel a legislative body to give up its powers of legislation and of oversight that could justify a legislative body in doing that?
Well, Councilman, obviously I am not an attorney, so I can't speak to whether it is legal or illegal. But let me try to address the question. The way I would analogize this is, if you think about the stadium project over the course of its last couple of years, I mean, the Commonwealth of Pennsylvania was asked, "Would you invest in stadiums?" And the legislature made a decision to do that, appropriated funds, set some terms and 72 STADIUM HEARINGS conditions to those funds, you know, Commonwealth days and affordable seat plans, certain things they thought were important, and said, "Here is a program we have set up as a government, but with the executive and legislative participation, to fund stadiums." And I think what we are saying is that we are requesting Council's approval to set up a funding program for stadiums for Philadelphia at the local level, as defined in the documents in the term sheets. And that our obligations under that cannot be increased, must be consistent with those documents, and that that's a basis that then we could proceed. I think you also were actually asking also about kind of the urgency, the urgency aspect, Councilman. And what we're looking at, and I, as Councilman Kenney asked earlier, you know, I am not going to go through the history because the history is the history. But we are basically at a point now. And whether we are -- how we got here, I will leave 73 STADIUM HEARINGS to others. But we are at a point now where we have the teams prepared to proceed, the teams committed to do that, the teams committed to do that on the basis of a capacity to get in these new buildings quickly, which justifies their willingness to take the various risks of both dollar risks and exposure risks. It is most acute, obviously, for the Eagles. To be open by the Year 2003 requires them to go now. Which would mean literally putting their financing in place beginning this month, so that they could have a construction start like in March. Which would mean that you would have to knock the T warehouse building down before that, et cetera. So there is a whole sort of series of actions that are lined up. And if we are unable to proceed with those actions, you basically lose that schedule. Now, you may find that a less than satisfactory response, but that is what's driving the schedule, is opening in 2003 for the Eagles and 74 STADIUM HEARINGS opening in 2004 for the Phillies.
When the Convention Center issue was raised before this body, and you were here at that time --
-- for years before, the current Mayor was then a very active member of City Council.
Yes. And he took the position, despite the strong statements made about the urgency, that the money was there now, and might not be there, the legislature might withdraw it if we don't act promptly, that all the plans for success were based upon moving forward. The then Councilman Street took the position that we've got to have time to study it, that the proposals create certain uncertainty among Council Members, we want to be sure of all the details. It took about a year. And what came out was a Convention Center agreement that everybody agreed was far 75 STADIUM HEARINGS better from the point of view of the city than the original one. Here we're being asked -- we don't even have time to study the details, and the fact that we often don't get them. Madam President, I don't know whether we have gotten certain amendments yet that we were told were being offered. I haven't seen them.
Aren't there amendments that the Administration is going to have further amendments to?
That is my understanding. We are not seen them as yet. I understand this afternoon our technical staff will be able to review them.
You know, I think it is highly wrong, absolutely wrong, for Council to act under such time pressures unless in the most extreme emergency. Because what has happened is that we are being asked to do the second thing, to work under such pressure, that we cannot even, as we try to legislate that which we can legislate on this, we 76 STADIUM HEARINGS don't have any time to really study it, to analyze it. You made offers of amendments of things you introduced just a couple of weeks ago or talked about a couple of weeks ago. That's the kind of time I think Council needs in order to do a responsible job. And I can't see the emergency of the teams wanting to open by 2003. It seems to me to be more important to guarantee the rights of the citizens of Philadelphia, the involvement of a billion dollars of tax funds. It is a billion dollars, isn't it, that's involved over the next 30 years?
It is going to be taking that money. Some money will come in. But we know one thing, there is a difference between the revenue and the expenses. The expenses are firm and fixed and have to occur no matter what, because they will be embedded in our bond obligations. The revenues we can be optimistic about, we could project them, we can be, you know, 77 STADIUM HEARINGS hard-headed about them, try to come up with conservative estimates, but they are still estimates and lots of things can come in and change the final results for better or for worse. But the expenses are going to be, the city has to consider spending a billion dollars, give or take, and maybe more than a billion. Because unlike the state -- in the state legislation, didn't the state put a cap on of 85 million for each stadium?
Well, no. 15 Suppose your estimates are wrong with respect to the $95 million to acquire the sites. (Councilwoman Blackwell assumed the Chair.)
We have unlimited exposure on the land. If it turned out that we had to pay double or triple, it would be the city's obligation, would it not? 78 STADIUM HEARINGS
That's the one place the city has a responsibility, that's right.
Right. And discounting that obligation, of maybe finding the costs much higher -- and generally in our experience with the Convention Center weren't the costs of site acquisition much beyond the original projection? My understanding is that they were.
I honestly, Councilman, can't remember that particularly. But I can tell you that at this point in our discussions, with the current property owners, we could bring four of the five properties in for the numbers that we have budgeted.
Well, we will let the future determine that. But assume you are right on that. The actual expenditure is going to be in the area of $1 billion in public tax money over the next 30 years, to be offset by revenues that you project will at least match that and maybe produce a little surplus; is that right?
I have to tell you, Madam President, I am going to close with this: I just see no justification for asking Council to do what arguably and I think probably is an illegal act of delegating our powers, depriving us of the opportunity to do the oversight necessary, and acting as if there were a real emergency, when the emergency exists only in the minds of the team owners. Thank you, Madam President.
Thank you, Councilman Cohen. - - - 80 12/5/00 STADIUM BILLS HEARING - - - (Relief stenographer, Josephine Cardillo, takes over stenographic recording of proceedings.) - - -.
Mr. Hankowsky, going back to the sports stadium district and the potential development, you might not be the person, but at this point, you're the only one that I could think of that could answer this question. Do you know how many existing liquor licenses we have presently at Veterans Stadium? Is it one, is it two, is it three?
I don't have any idea, 81 12/5/00 STADIUM BILLS HEARING Councilman.
Councilman Rizzo, would you hold up a minute. Our stenographers are -- need a minute to transfer. - - -
Thank you, Madam Chair. I'm going to give Mr. Hankowsky -- he's talking to the counsel. I'll give him a minute; maybe he's getting the answer that I need.
Mr. Hankowsky, where I'm going with this is that you talked about the potential development at the stadium complex, and I'm wondering, we would have to apply for a liquor license for the new ballpark, we would have to apply for a liquor license for the new football stadium, and I assume that's almost just a matter of just applying and it happens. But what I'm concerned is, once we get the liquor license for either of the stadiums, are 82 12/5/00 STADIUM BILLS HEARING they automatically extended into the four parcels that you described -- the hotel, the other entertainment --
So what you're telling me -- and I've already had experience with this, where a liquor license pretty much, when it's granted, is granted and -- let's say a hotel gets a liquor license and they have five restaurants, automatically five restaurants -- from what I understand, I might be wrong.
-- are then allowed to serve alcohol in that facility. Could you get back with us to let us know that if any of this development occurs at the existing First Union complex on those four parcels, would they have to apply for a liquor license and the community would have some input like any application for a liquor license would have? Or would they be just automatic? If five new locations surfaced, we'd have five new liquor licenses? If seven locations surface, would we have seven liquor establishments? 83 12/5/00 STADIUM BILLS HEARING What control is there over the proliferation of liquor being served throughout the entire stadium district? Any --
I am not at all an expert on how liquor licenses work. I think the one thing I can make clear, though, is understand that if the Phillies get one for their ballpark and the Eagles get one for their ballpark, neither of those two parties have any rights to put any development on these development parcels. So what I don't know is -- Comcast SpectaCore, which was kind of your second point of your question --
What will they have to do to get a license to put in a restaurant or a hotel? I don't know and I'll try to find out.
Well, no, it's really not that -- in all fairness, it isn't relevant because that's not the issue we're dealing with. But my point being is that we're talking just -- we're just talking about liquor being served at the Eagles facility within the stadium. 84 12/5/00 STADIUM BILLS HEARING
And we're talking about liquor being served in the ballpark just within the ballpark for the Phillies.
But the other development, in all fairness, is possibly going to be done by Comcast, which I'll find out the answer to that question, whether there would be additional liquor licenses scattered throughout that.
All right. Again, I started off by saying that I didn't think that was a fair one to ask of you.
You're welcome. Councilman Nutter? I'm sorry, Councilman, I think Councilman Ortiz was next, sorry.