COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, November 30, 2005 10:15 a.m. - - - PRESENT: COUNCILMAN W. WILSON GOODE, JR., CHAIRMAN COUNCILMAN MICHAEL A. NUTTER COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILWOMAN MARIAN B. TASCO RESOLUTION 041057 - Resolution authorizing the Committee on Commerce and Economic Development to hold hearings to review the status of neighborhood commercial revitalization in Philadelphia, including a needs assessment of neighborhood commercial corridors and an evaluation of various business district development programs. - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
Good morning. This hearing is called to order. This is the public hearing of the Commerce and Economic Development Committee on Resolution No. 041057. My name is W. Wilson Goode, Jr., Chair of the Committee. A quorum is not necessary because this is an educational and informational hearing, but I do note for the record that I'm joined by Councilwoman Marian Tasco, Councilman Frank DiCicco and Councilman Darrell Clarke. The title of Resolution No. 16 041057, a resolution authorizing the Committee on Commerce and Economic Development to hold hearings to review the status of neighborhood commercial revitalization in Philadelphia, including a needs assessment of neighborhood commercial corridors and an evaluation of various business district development programs. We have one panel scheduled for 3 11/30/05 - COMMERCE - RES. 041057 today. I'll ask Eva Gladstein, Rick Sauer and Andy Toy to please approach the witness table. Ms. Gladstein, will you please state your name for the record and proceed with your testimony.
Thank you. My name is Eva Gladstein. I'm Director of Neighborhood Transformation for the City of Philadelphia. Good morning, Councilman Goode, Councilman Tasco, Councilman DiCicco. I'm happy to be here today to testify with regard to NTI's new focus on neighborhood commercial corridors. I welcome the opportunity to share this information with you. In June 2005 at the City Council hearings on the fiscal year '06 NTI Program Statement and Budget, we first discussed a planned transition of NTI into a new phase that would promote the integration of the City's neighborhood economic development 4 11/30/05 - COMMERCE - RES. 041057 activities with those of NTI. The goal is to sustain and support the significant impacts we have made in blight removal, housing development and preservation, and improved government delivery systems for strategic investments in neighborhood commerce. This is consistent with the Mayor's Economic Development Blueprint, which prioritizes increasing investment in neighborhood commercial corridors as a means of sustaining the positive changes initiated by NTI. These investments will promote commercial corridors as healthy, vibrant hubs for steadily improving neighborhoods. Our collective efforts will help realize the Mayor's vision that all neighborhoods should be great places to live, work, learn, shop and play. I am proud to report that in less than six months we have made significant progress. We have begun to coordinate existing resources and have secured new resources to support development of neighborhood commercial 5 11/30/05 - COMMERCE - RES. 041057 corridors. Primary among these resources is a talented staff of 24, six of whom are focused full time on neighborhood economic development activities. Other NTI staff support these functions through contract administration and evaluation, planning and communications. In addition, in order to increase coordination with the City's Commerce Department, three Commerce Department employees have been detailed to work directly through NTI. The goal of our staff is to develop a framework for the strategic investment of City resources on neighborhood commercial corridors to support community-driven planning and to leverage new public sector and private sector resources. 9 million in NTI tax-exempt bond proceeds for Commercial Corridor Support Program; 800,000 that has been granted to the City from the Pennsylvania Department of Community and 6 11/30/05 - COMMERCE - RES. 3 million of Community Development Block Grant funds targeted to Community Economic Development. In addition, we've applied to the Delaware Valley Regional Planning Commission for funding to help with three other projects, one to knit the West Philadelphia community with the Centennial District in Fairmount Park, to plan for transportation and economic development uses in the Central Germantown Business District, and for the development of model safety and security programs that could be utilized on a variety of the City's neighborhood commercial corridors. We view collaboration and partnerships as a key to maximizing the use of available resources. We have forged strong working relationships with key partners, including the City's Commerce Department and its two economic 7 11/30/05 - COMMERCE - RES. 041057 development engines, PCDC and PIDC. These partnerships help us provide a more seamless support to neighborhood entrepreneurs seeking financing, technical assistance, facade improvements and to community development corporations and business associations seeking economic development project support or capital improvements and other infrastructure support for their commercial corridors. We have also reached out to key partners outside of City government, two of whom are sitting with me today, including the Philadelphia Association of CDCs and LISC, as well as the Philadelphia Neighborhood Development Corporation and the Greater Philadelphia Urban Affairs Coalition.
We routinely attend meetings of neighborhood business associations as well. Our accomplishments have been significant. We have begun to implement a Philadelphia Main Street program, 8 11/30/05 - COMMERCE - RES. 041057 putting four CDCs under contract and establishing a Main Street resource group with the state. We are working closely with the Commerce Department to leverage other state funding resources such as the Hometown Streets Program and the Business in Our Sites Programs to rebuild commercial corridors. We have begun to coordinate support to commercial corridors with PCDC and the Mayor's Business Action Team. We have reviewed neighborhood commercial corridor plans that have been recently completed in order to be able to support their implementation. We have begun to develop an initiative with the Commerce Department to promote retail opportunities on neighborhood commercial corridors. As an example, at the recent International Conference of Shopping Centers meeting here in September, we distributed materials for Baltimore, Lancaster, Ridge, Germantown and Mt. Airy 9 11/30/05 - COMMERCE - RES. 041057 and Chestnut Hill, and Woodland Avenues, as well as for 40th Street in East Falls. We're working with LISC and the William Penn Foundation on the development of a framework and investment strategy for neighborhood commercial corridors similar to the early NTI framework based on neighborhood housing markets. We're actively working with the Commerce Department and GPUAC to advance Economic Development Blueprint objectives of increasing financial resources that can be made available for the start-up and expansion of minority-owned businesses. We're working with the Reinvestment Fund, the Commerce Department and PIDC to encourage supermarket development in underserved neighborhoods, especially in locations where such development can also strengthen other neighborhood retail activities. 10 11/30/05 - COMMERCE - RES. 041057 We've met with a number of CDCs active in economic community development in order to better understand their goals and their needs. We recently began to explore ways in which we can help enable local organizations managing Neighborhood Improvement Districts to receive technical assistance, and we have continued to advance Empowerment Zone commercial corridor activities in West Philadelphia, North Central and American Street neighborhoods. While we feel that we've accomplished much, we recognize that there's a lot that remains to be done. We intend to release a request for proposals next month for projects that will support improvements to commercial corridors. This RFP process will be used to allocate funding from three sources: Commonwealth support for Main Street activities, the NTI-funded Commercial Corridor Support Program and the CDBG-funded Neighborhood Commercial Area 11 11/30/05 - COMMERCE - RES. 041057 Transformation Program. This last program was created in August 2005 to support pre-development activities for projects that will substantially transform older, income-impacted communities by changing the nature of the existing economically distressed neighborhood, as well as creating permanent jobs. The RFP process will be used to select corridors based on their geographic diversity, ability to leverage other public and private investments, level of organization, existence of plans and capacity of local CDCs or other neighborhood-based organizations. The Mayor's office will work with City Council and the City's economic development entities, including the Commerce Department and PCDC, to develop selection criteria and a process for targeting appropriate investments. Other activities that were planned for the next 60 days include 12 11/30/05 - COMMERCE - RES.
041057 meeting with all of the CDBG-funded sub-grantees to clarify goals and expectations in terms of coordinating resources on commercial corridors, what our desired impacts are for those corridors and whatever technical assistance needs they may have. We've also begun planning our annual event, the Developers Breakfast and Neighborhood Tour. This spring event is used to showcase investment and development opportunities throughout Philadelphia's neighborhoods. In addition to all of the above, NTI continues to coordinate other NTI bond-funded measures, blight prevention and removal, demolition, acquisition housing preservation, and information technology improvements. We also continue to support Empowerment Zone planning and implementation in the American Street, North Central and West Philadelphia neighborhoods. These efforts include significant commercial 13 11/30/05 - COMMERCE - RES. 041057 corridor initiatives, the administration of business revolving loan pools, neighborhood funding streams that provide an ongoing community planning role and source of grant funds for projects to support the Empowerment Zone vision. With that, I'd like to thank you for this opportunity to share our goals, accomplishments and plans. We look forward to continuing to work with you to support the achievement of these goals in the next year. Thank you.
Thank you. Good morning, Mr. Sauer. Do you have additional copies of your testimony?
Good morning, Chairman Goode and members of Council. Thank you for the opportunity to testify 14 11/30/05 - COMMERCE - RES. 041057 today. My name is Rick Sauer, and I'm the Executive Director of the Philadelphia Association of Community Development Corporations. Neighborhood commercial corridor revitalization is an issue that is key to organization and our members that are working in communities to revitalize these corridors. I want to thank you for focusing attention on this important issue and for your leadership over the last several years to increase resources available for neighborhood economic development and support the role of CDCs in that activity. I am constantly in contact with community development corporations around the City that are working to revitalize their neighborhoods and rebuild communities, and, in fact, we have more than 30 CDCs that are directly engaged in various aspects of neighborhood economic development, ranging from commercial corridor or commercial real estate 15 11/30/05 - COMMERCE - RES. 041057 development projects to broader efforts to revitalize and strengthen neighborhood commercial corridors, to workforce development activities and other direct assistance to businesses. And I would like to, before I go further, also acknowledge the important role I think that Eva Gladstein and the NTI office is playing in working to integrate neighborhood economic development with NTI. As she mentioned, we've had several meetings with them around some important issues, and I think there's some clear progress being made. And also our colleagues at LISC are providing important support to CDCs in these efforts as well. CDCs strive to grow neighborhood economies every day, and we know this is not an easy task. When you asked me to come testify today, I was thinking how can the City best support these front-line efforts by CDCs. In our discussions with a number of members and 16 11/30/05 - COMMERCE - RES. 041057 other practitioners in the field, I've come up with five larger issues that I wanted to discuss today that I think are really key to advancing more successful neighborhood commercial corridor revitalization, and those are the need for local capacity to guide revitalization efforts, better coordination among the various funding sources, greater transparency and accountability in how funds are allocated, increased and more flexible funding and policies and, finally, assistance to small businesses. So briefly touching on each of these. The first, building local capacity, I think we've realized that when there is a local entity in place that can coordinate and manage the variety of tasks that are needed to advance successful revitalization on commercial corridors, especially those that have faced disinvestment and distress, that's really key, because 17 11/30/05 - COMMERCE - RES. 041057 there's several really critical factors that have shown to prove to be important to successful revitalization, such as coordinating clean and safety efforts on corridors, facilitating physical improvements, whether it's to facades or streetscapes or rehabbing vacant buildings, marketing the corridor to new businesses and customers, consumers, and assisting in bringing local businesses together to work together to strengthen that corridor. As mentioned, many CDCs are playing this role around Philadelphia and should be supported through both funding, especially funding that can cover administrative costs, such as hiring a Commercial Corridor Manager, as well as through training and technical assistance to further build their capacity to carry out their efforts. We realize that not every corridor is served by a CDC with strong capacity, and so it is important, I 18 11/30/05 - COMMERCE - RES.
041057 think, that the City give further thought to where there are corridors that don't have that capacity in place, what can be done either to partner up with other CDCs or other neighborhood organizations that have capacity or how you can build capacity on those corridors where it really makes sense to target resources. The second issue, coordination of funding sources. The funding environment for neighborhood economic development, in particular in commercial corridor revitalization, has really changed over the last several years. Back several years ago, Councilman, you sponsored legislation that required the City to set aside five percent of its CDBG funds on an annual basis to support neighborhood economic development by CDCs, and that resulted in a significant increase in funding for those purposes. Since then, though, our federal allocation that the City receives every year, CDBG allocation, has been 19 11/30/05 - COMMERCE - RES. 041057 decreasing and there's been increasing competition among the variety of uses that the City uses to fund those funds, and the end result is that there's been a pretty significant reduction, about 30 percent, over the last four or five years in the amount of CDBG funding that's actually being allocated in neighborhood economic development activities. There's been some critical programs in particular that have faced a funding cut of up to 50 percent overall, such as pre-development planning and marketing grants, GAAP financing for commercial real estate development projects in special service districts. And at the same time, the City has been putting less funds into the Economic Stimulus Program, which provides flexible resources that also can be used to support neighborhood economic development activity. On the other hand, while CDBG and Economic Stimulus has declined, there 20 11/30/05 - COMMERCE - RES. 041057 has been a number of new resources that have been brought to the table that are really having a significant impact. Again, thanks to your leadership, the CDC Tax Credit Program was created. Now there's partnerships between 8 businesses and the CDCs that provide 9 flexible funding to advance neighborhood 10 economic development activities. Most of 11 the groups are using that support to 12 advance their commercial corridor 13 revitalization activities. 14 LISC is funding nine CDCs to 15 work on commercial corridors. Other 16 foundations have put money in for this 17 purpose. In addition, as Eva mentioned, 18 there's five CDCs now that receive 19 support through the state Main Street 20 Program. Several groups have recently 21 gotten funding through the Hometown 22 Streets Program, which provides dollars 23 for streetscape improvements, and we have 24 nearly $2 million in NTI funds that are 25 being allocated towards commercial 21 11/30/05 - COMMERCE - RES. 041057 corridor support. And while we certainly welcome these new funds and it's an important development, much needed development, I think one of the questions it begs is, how will all these funding sources fit together and are they addressing the range and needs that are out there. And so as a result of all these changes in the funding environment in the last few years and the variety of different actors, both the various public agencies, whether the City or state, and local agencies, I think there really is an obvious need for better coordination among the various sources so that we can achieve better targeting, leveraging and impact from the use of these funds. The third issue is greater transparency and accountability in the award and use of funds. There's a variety of different programs that the City runs and there's been a range of experiences CDCs have had in accessing or 22 11/30/05 - COMMERCE - RES.
041057 trying to access those resources, but one thing that we have continuously heard is that there really is a lack of a clear, open and transparent process for applying for an award in funds for neighborhood economic development, and so we think it's important that there be written guidelines or criteria for how programs are going to work and how funds will be awarded so that folks have a sense up front before they apply what the fit is, what the opportunity is, and it's a fair process. In general, we have been encouraging the City to utilize the RFP process to allocate funds, and we're very pleased to see that they are doing that now for these three funding sources that Eva referred to earlier beyond NTI, the new NCAT Program and the additional Main Street funding that will be available. And at the same time, too, we also believe that there should be increased accountability on behalf of 23 11/30/05 - COMMERCE - RES. 041057 groups receiving funds to make sure that recipients are being held accountable for the performance and that scarce resources are being used to their fullest potential. The fourth issue, adequate and flexible funding and policies. We know that there's a range of needs that our communities face when it comes to commercial corridor revitalization. The issues facing groups working in East Falls or Roxborough, Mt. Airy may be different than groups working in East or North Philadelphia or South Philadelphia, or the degree of the issues are different. And the funding that's currently available doesn't always match up with what the needs that are out there in the community. As a result, there can be a gap between what needs to be done and what groups are actually able to get done. Many programs also restrict the use of funds. Often times there are 24 11/30/05 - COMMERCE - RES. 041057 private organizations of resources to cover the cost of administering programs. You might get dollars to do actual physical improvements, but you have to have the dollars that allow you to go out and actually run those programs and pay for staff to do that, and you have to have the ability to be flexible and innovative in the way programs are being implemented. For example, the state Home Street Program -- again, several groups have recently gotten funding, more groups are applying to that now -- can provide critical resources for streetscape improvements; for example, improving lighting on the commercial corridor, making it more pedestrian friendly, which can have the benefit of increasing a sense of safety, attracting more customers during the evening time hours when many purchases are made. You can't use those funds, my understanding, though, is to cover 25 11/30/05 - COMMERCE - RES. 041057 administrative costs. So an organization that wants to implement that strategy on their corridor has to make sure they have administrative costs, and then they can go out and purchase those new light fixtures and all that. But the Streets Department has a policy of saying you can only use certain types of light fixtures. Then they also won't pay for the maintenance of those light fixtures or for the electricity costs for it. So there needs to be better policies that allow resources to be used together in an effective way to advance important strategies such as that. One example where the City has provided the need for flexibility is for facade improvements. It's been realized that often times it can be difficult to use CDBG funds for facade improvements for businesses due to the restrictions that come with those federal funds, and so the City has allocated for several years now, I believe, Economic Stimulus 11/30/05 - COMMERCE - RES. 041057 funds to support that type of activity. That's the right idea, but it's only one piece of the bigger puzzle. So we need to identify additional flexible funding sources such as the CDC tax-cutter program or the newly available NTI funds that can be used in a flexible way.
When programs are inflexible, they are often also underutilized. One example I just wanted to point out is with the Commercial Acquisition Program that I believe PCDC and/or Commerce have run. There's a really strong need for pre-development acquisition funds in commercial corridors, but the acquisition program that's been out there has really seen a lack of demand, and in large part, I think it's because of folks' previous experiences going through and trying to access those funds. There is a number of restrictions that make it very difficult to utilize that program effectively on corridors. And so as we move forward and think about how we can better address 27 11/30/05 - COMMERCE - RES. 041057 systems or how we can bring new resources to bear, we need to make sure that we're implementing those programs in a flexible way that can really advance our goals on those corridors. And, finally, small business assistance. Many small businesses we know need help building their capacity so they can run their businesses more successfully, which also leads to more successful neighborhood corridors where they're located. They both need training and technical assistance, though, whether it's from the Small Business Development Center, a CDC or another entity, that allows them to develop stronger business plans, operate their businesses more effectively and efficiently and, of course, increase their access to capital to grow their business. The last issue I know you've held several hearings on before this Committee, and I think we have been involved with GPUAC's efforts to both 28 11/30/05 - COMMERCE - RES. 041057 increase support to small businesses so they have greater capacity to go after financing from banks, but also to push the banks so that they would be more flexible in the way they have dollars available to support small business development in minority and lower-income neighborhoods. We are committed to helping assess the needs of organizations and fostering neighborhood economic development. Along this line, we're currently conducting some research for a report that we plan on completing this spring called the Community Audit of Neighborhood Economic Development. The report is going to look at a range of issues, from what funding programs are out there, how funds are being allocated in those programs and how they're being drawn down, to where there are gaps in the current programs or where there's policy changes that are needed to make the programs run more effectively, and we 29 11/30/05 - COMMERCE - RES. 041057 look forward to being able to report back to you further on our findings when that is completed. In closing, I'd just like to emphasize the important nature of commercial corridor revitalization. Businesses located in our neighborhoods are the backbone of Philadelphia's economy, providing jobs as well as local access to goods and services. And CDCs are playing a critical role in supporting and developing these neighborhood economies. By addressing the five issues identified above, we believe the City can go a long way towards advancing successful neighborhood commercial corridor revitalization. Thank you.
I should mention that attached to our testimony is some preliminary numbers that we've pulled out of the consolidated plans that show how 30 11/30/05 - COMMERCE - RES. 041057 CDBG funds have been allocated over the last several years.
Thank you. Good morning, Mr. Toy. Would you state your name for the record and proceed with your testimony.
Sure. Good morning, Honorable Councilmen and women and Honorable Councilman Goode. My name is Andrew Toy, and I'm here to testify in regard to the state of neighborhood commercial corridor development and the effort my organization has been making in this area over the last three years in Philadelphia. I represent the Local Initiative Support Corporation in Philadelphia, which is a nationwide funder and supporter of community development that helps non-profit community development corporations, or CDCs, transform distressed neighborhoods into healthy communities of choice and opportunity, good places to work, live, 31 11/30/05 - COMMERCE - RES. 041057 do business and raise children. As the largest non-profit community development supporter in the nation, LISC brings a broad perspective and understanding of best practices that should be helpful in organizing, directing and implementing programs to build better communities. Before going into specifics, I wish to state that we appreciate the opportunity to comment before Council on this very important subject in a public hearing, thanks to Councilman Goode. LISC began its Philadelphia Commercial Corridor Redevelopment Initiative in 2002 in response to an assessment survey that highlighted the need for additional support for neighborhood commercial corridors. To date, LISC's commitment to Philadelphia totals over $2 million as we continue into Year 4 of the initiative. LISC's investments, program design and advocacy have also attracted 32 11/30/05 - COMMERCE - RES. 041057 other funding, including the state Main Street Program that is now in five neighborhoods in the City. With the support of LISC, the City and other partners, including PACDC, many of our neighborhood commercial corridors are showing great signs of improvement, with new businesses, more shoppers, improved and greener streetscapes, rising property values and a renewed sense of pride. Places like Ogontz Avenue in West Oak Lane, Germantown Avenue in Mt. Airy and 5th Street above Lehigh are just three examples of places where LISC has partnered with local CDCs to make a real difference. With NTI making a more deliberate effort towards commercial corridor revitalization, we see a great opportunity to work more closely with the City to leverage our efforts. As an example, recently we have been discussing a City-wide assessment of corridors that would help both LISC, the City and other 33 11/30/05 - COMMERCE - RES. 041057 stakeholders better focus efforts on strategies that work and on areas where our efforts will have the greatest impact, rather than spreading resources around thinly with little real impact. Over the past three years, we have already worked closely with the Empowerment Zone to improve the Girard Avenue corridor to take advantage of the return of the trolley and growing neighborhoods nearby. There are many lessons learned over the past three years, and I can discuss them of greater length with you, but in order to be brief, here's a short summary: First, invest and coordinate support rationally where there is capacity, and that's capacity of the commercial core, the neighborhood market potential and local leadership. In short, consistency of support, full time operating and planning at the ground level rather than a top-down approach. Safety and cleanliness are 34 11/30/05 - COMMERCE - RES. 041057 critical, and good lighting, cleaning and policing are necessary. Good pedestrian-oriented design and streetscapes are worth the investment. Nearby residential development and density are closely related to corridor health and should be considered. Provide technical assistance and information at the ground level. LISC has helped many workshops and worked with corridor managers around a modified Main Street approach and has also provided market analysis tools for planning.
Aim for measurable outcomes that help corridor managers stay focused and demonstrate progress and allow us to know whether progress is really being made. Funding commercial acquisition and improvements, as well as upstairs residential redevelopment, is important in impacted neighborhoods. The need to find and attract good retail businesses 35 11/30/05 - COMMERCE - RES. 041057 to neighborhood corridors is a continuing challenge. Understand and build upon neighborhoods' assets and niches, both physical; for example, buildings and transportation, and social; for example, ethnic, arts, education and other market niches. And sometimes the best lessons learned are those shared between neighborhood corridor managers, as we found as we've pushed our program out and used that as a crucible for corridor managers to work together. LISC looks forward to building our partnership with the City and others and we appreciate the leadership of Councilman Goode in this effort. Thank you.
Thank you, Mr. Toy. And I'd like to thank the whole panel for being able to develop testimony on short notice, but I know you are all actively engaged in this, so it's not hard to talk about what you're thoroughly 36 11/30/05 - COMMERCE - RES. 041057 engaged in. I'd like to ask several questions to the entire panel. I'm trying to create some context in terms of we've been doing this for over 30 years. The Office of Housing and Community Development actually developed a Neighborhood Commercial Revitalization Program in 1974. What is the status of neighborhood commercial revitalization in 2005 versus 1995 or in 1985 or 1975? Where are we?
They're looking at me, aren't they? I mean, I think some of this has been highlighted in the testimony to date in that I think there's a heightened interest among a number of parties and there are new funding sources, all of which is an increased capacity and technical assistance available. You've heard about some of it sitting right here. LISC has received funding and 37 11/30/05 - COMMERCE - RES. 041057 can support groups. The CDC associations provide a lot of peer support to other groups, and we're working actively with business associations and others. The state has new resources available that hadn't been there before, and at the City, we've tried to create more flexible opportunities using Economic Stimulus and now NTI funding. I think those are all good things. I think that it, however, calls for increased coordination. The good thing leads to a challenge, which is making sure it all, in the end, fits together into kind of the best puzzle that you can put together. So making sure that the right resources are matched to the right needs. Where, frankly, sometimes public funding isn't going to be able to fill a particular niche, then you have to identify who are the private funders out there that have these interests and hopefully help direct them to those other places where the public 38 11/30/05 - COMMERCE - RES. 041057 money isn't going to work as well. And that's a challenge we've taken on. I don't think it's something that can happen overnight, but I think we're fueled by the interest and activism and resources that are available. So, again, I think that's a good thing.
I certainly can't comment back to the 1970s since I wasn't active in Philadelphia back that far, but I would say that we have seen a significant increase in involvement by CDCs in neighborhood commercial corridor activities in the last several years, and I think part of that is driven by the availability of new funding sources and increased attention that is being paid by various stakeholders on this important issue. Groups in the past that may be focused more on housing development have really seen that in order to achieve broader successful neighborhood 39 11/30/05 - COMMERCE - RES. 041057 revitalization, they need to address a range of things, and that includes strengthen the local economy, working on the commercial corridor, making sure there is good access to goods and services in all neighborhoods, as well as local job opportunities. So I think it's been a natural progression or maturity of the CDC industry to recognize the importance of that role, but also the support of policies and resources that have been coming the last few years have helped push groups as well.
I would say that our Philadelphia experience mirrors what's happening around the country. In many cities, the CDCs that, as Rick was saying, started out as housing, affordable housing proponents, are now getting into commercial corridors and other things, because they understand the holistic importance of dealing with 40 11/30/05 - COMMERCE - RES. 041057 everything within the community, not just housing. And I think that the knowledge that we're gaining both locally and nationally and regionally I think is helping us to better frame our approach, and hopefully we'll actually be able to target our resources in a better way so that we create better impact and not just put money out on the street without really any knowledge about what the outcome might be.
And what do you see as the primary goal now? Is it the provision of goods and services? Is it job creation? Is it blight elimination? What do you see as the new focus of neighborhood commercial revitalization?
I think it's all of the above to some extent, but it's really about the neighborhood more than -- I think jobs are important, but it's really about creating neighborhoods of choice, neighborhoods that are healthy, that 41 11/30/05 - COMMERCE - RES. 041057 people want to live in, that people can shop, feel safe. So it's connected more to the neighborhood than to just the job creation, I think.
I would concur to that. I don't think you can single out one factor saying that has to be the leading goal of commercial corridor revitalization activities. I think they're all important. If you don't have local access to quality goods and services, it is hard to attract new residents. If you don't reduce the blight in the neighborhood, it's hard to attract new businesses to that corridor. But you certainly want to use this as an engine to create local jobs and the local neighborhood economy as well. So I think they're all complementary goals and the question is, as you design programs and implement them, how can you ensure that all three of those goals are being achieved by the programs overall. 42 11/30/05 - COMMERCE - RES. 041057
I'm going to be a broken record here. Just coming from a different point of view, having directed the Empowerment Zone for a number of years, I think that what we learned really is that you do need a comprehensive approach, and whereas the goal is going to be through our lens economic growth and revitalization, you don't do that without, for example, removing blight, making vacant land more attractive, encouraging development and attracting new business. Most business growth is going to happen through small businesses, since that's an important component of it, but we found whenever we focus on just one aspect of this, the other was found to be lacking, and residents and businesses would approach us around the other components of it. So we couldn't just do one piece of it at a time. We wouldn't 43 11/30/05 - COMMERCE - RES. 041057 be successful.
What's the most recent needs assessment conducted of commercial corridors City-wide?
What's the most recent needs assessment conducted of commercial corridors City-wide?
There have been several reports. I don't know if I would characterize them as needs assessments. The City Planning Commission completed its Philly Shops update. Was it last year? Last year, looking at all of the City's commercial corridors, vacancy and other physical attributes on those corridors. And also the William Penn Foundation funded a report by Econsult I think managed through the Economy League.
Speaking more of a needs assessment more so than an analysis of what's going on, but an actual maybe surveying of business 44 11/30/05 - COMMERCE - RES. 041057 associations or community development corporations or individual businesses as to what the actual needs on a corridor-by-corridor basis are.
In 2001, LISC, before I got there actually, LISC had done a survey, commissioned a survey of CDCs mainly, I think, in neighborhoods, and 10 out of that, the program at LISC was 11 born, because there was a critical need 12 in certain areas, such as technical 13 assistance and coordination and local funding, core funding, that came out of that as needs.
Ms. Gladstein, what's the timetable for developing selection criteria for your RFP?
That will be occurring over the next month. We hope to have it out in the next month, which means in the next week or two, we'll probably have a draft that then we'll start to share and review with people. 45 11/30/05 - COMMERCE - RES. 041057
I know you said you're going to release the RFP in a month, but you also talked about working with City Council and the stakeholders on selection criteria. The RFP is being released within a month. When is the selection criteria going to be developed?
My goal would be to have a draft that would be available for discussion with members of Council in the next two weeks.
Just quickly back to the needs assessment issue, one other report or sort of process that happened recently is that a number of CDCs worked with GPUAC to survey small businesses in their community, and while it wasn't an exhaustive survey, it did get a better grasp on some of the issues around access to capital that I think are important to address and help identify some needs. But it does point to a larger issue of ensuring that we are reaching 46 11/30/05 - COMMERCE - RES. 041057 out to the stakeholders in the community to find out from the folks who are working at the ground level, whether it's small businesses or CDCs, of what the actual needs are in their communities, where they have a need for resources to bring to bear on improving commercial corridor revitalization. So I think as the City looks at how it's going to allocate its funds in the future, it's really important to have a process to get that input to make sure that we're targeting resources effectively.
What commercial corridors would you deem success stories versus those you might consider to be failures?
I mentioned three in my testimony. I don't know about failures. I'd like to not think about failures, but...
Could you restate the three that you deem to be 47 11/30/05 - COMMERCE - RES. 041057 success stories?
Ogontz Avenue in West Oak Lane, Germantown Avenue in Mt. Airy and 5th and Lehigh. Those are just ones that we work in. Certainly there are a lot of successful ones.
Of course, I'm not pointing this question at the three of you, but you are at the table. Thirty years into neighborhood commercial revitalization, how many success stories do we actually have?
I think corridors as communities in 30 years go through lots of phases and cycles and what was -- I mean, I think one of the concerns in front of all of us is that corridors that might have been thriving and very successful in 1975 may not be now, and that has to do with a range of larger issues, obviously.
I guess my question is, what corridors have actually been successful at any point during that 48 11/30/05 - COMMERCE - RES. 041057 more than 30-year history of neighborhood commercial revitalization?
I mean, I think a lot of corridors have a lot of things going for them now, and naming them means that there are many others that I'm not naming, but I think North 5th Street; I think Girard Avenue is starting to prosper both on the very far east and west side of it; Passyunk Avenue. I'm trying to kind of go around the City.
North 22nd Street. If you're saying over the last five years that have been able to do well or improve, I think that there are a number that could be cited. Frankford Avenue. 49 11/30/05 - COMMERCE - RES. 041057
I think with the increased attention that has been given on commercial corridors in the last several years, you see more progress as of late. It doesn't mean there's not a long way to go in many corridors. I mean, the decline that happened in these corridors happened over a number of years and for a number of factors, as we mentioned, so it's not going turn around overnight, but I think one of the real questions is how can we sustain the advances that are being gained on those corridors over the long term.
Which development agencies do you believe performed better in terms of commercial corridor revitalization; for instance, a Manayunk development corporation or University City District? What others would you name that perform well in terms of commercial corridor revitalization?
I think each corridor has its niche and each group has certain 50 11/30/05 - COMMERCE - RES. 041057 strengths. I wouldn't say one is better than the other at doing it. And then the market --
Clearly, some are better than others. I'm looking for examples of what type of development organizations should be utilized to revitalize commercial corridors.
Well, if you want my opinion, I mean, CDCs are what we work with, and because they already have a core of operations within neighborhoods, they're the natural to work in impacted neighborhoods rather than building a new organization around some other entity or having it come from above, because they're the ones that are at the ground level already.
As I said in my testimony earlier, I think it really is key to have that local entity to facilitate the corridor revitalization process. I think you can have different people playing that role, whether it's a 51 11/30/05 - COMMERCE - RES. 041057 CDC or a business association or someone else, but it needs to be an entity that really has capacity to coordinate all the different actors involved and bring the resources to bear. And I think as Andy mentioned, CDCs are well positioned to play that role. Are they the only entity? No, I wouldn't say they're the only entity. I mean, there are other entities, too, that can play an important role, but I think we need to look at where we have capacity now, how we can build on that and where we don't have that capacity, again, how can we develop it there in those neighborhoods as well. Otherwise, if you just -- I mean, some corridors are strong enough, they don't need that, but in areas that have been disinvested, without that coordinated effort, you're just going to get a scattershot approach or further disinvestment, I think.
Ms. Gladstein, who is eligible to receive 52 11/30/05 - COMMERCE - RES. 041057 funds through this RFP?
It's going to be -- we will have eligibility criteria, but essentially it will be non-profit organizations who are engaged in commercial corridor support programs. So, for example, for the Main Street funding, there will be specific eligibility guidelines, because that flows from the state and they have certain criteria for Main Street organizations.
One last question, is there a superior model for commercial corridor revitalization; for example, Main Street or PCDC's program or the initiative by LISC? Have we developed a superior model after these years of our being engaged in revitalization?
I think we've learned a lot, and you've heard some of it in the testimony today. Do we know the absolute -- are we at the pinnacle? 53 11/30/05 - COMMERCE - RES. 041057 Probably not. There's probably more to learn. And I think in Philly you see different models. PCDC doesn't necessarily see its role -- because it's City-wide and it's working in support of a number of corridors, but there are local entities there. They don't necessarily see their role the same as a community development corporation or a neighborhood business association. Some of it is sort of apples and oranges. I think that what we have learned is that there have to be a variety of skills present on the corridor. They may come from one organization or from several organizations. It may be a CDC working with the business association or business association having the support of another group or PCDC, as an example, but there are a variety of kind of management skills, as well as development skills, as well as marketing skills that we start to see coming together to make healthier 54 11/30/05 - COMMERCE - RES. 041057 corridors.
I would agree that I don't know if we found the final best model, but I think we've made a lot of progress. I think LISC with its program working on a number of commercial corridors has really identified some key ingredients to doing successful work on those corridors. And I think it's an ongoing learning process that we can improve over time. I mean, they're learning more from what's worked in other cities as well as what's working or not working here in Philadelphia. So I think we need to continue to have a focused effort. It can't just be commercial corridor is the flavor of the year and we're going to focus attention now and next year and then funders move on to something else. I mean, this really has to be sustained over time, both so we can improve the model that we have but also ensure that 55 11/30/05 - COMMERCE - RES. 041057 resources are coming to bear for the long term so we can have success in these corridors.
I guess the question, Mr. Toy, is, if LISC is engaged in this activity in a number of different cities nationally, is there a model that's being employed or is there a model that's being specifically employed in Philadelphia?
Well, I would say, generally speaking, there is a model that we use, which is a modified Main Street approach, first of all, in terms of looking at the different facets of work and getting some organization around that, but also I think, more importantly, it's the idea that the local people really know what's going on and need to be supported in their efforts. So the funding really does flow down to the CDC or local level, neighborhood level. And I think that's probably one of the more important 56 11/30/05 - COMMERCE - RES. 041057 aspects of how we approach it rather than having an agency, a super agency, trying to figure out what's good for everybody, having the planning actually -- and something we forgot to mention was the planning that has been going on in a lot of neighborhoods now. And I think that's really important, because not only does it map out your future, it also brings people together and creates a shared vision, which many times before there was no shared vision. It was just the vision of a few and they couldn't get people to follow. So I guess having community involvement is really key and having support at that level is key for us.
Thank you. Let me note for the record we've been joined by Councilman Nutter and Councilwoman Reynolds Brown, and the Chair recognizes Councilman DiCicco.
Thank you, Mr. Chairman, and good morning. 57 11/30/05 - COMMERCE - RES. 041057 A lot of things have been said here, and I'll try to get through this as quickly as possible. I do agree with some of the statements that were made, and I think Mr. Toy may have made them, that I've always been of the belief that the way the commercial corridor goes is the way the residential community goes and vice versa. If you lose your commercial corridor, you will certainly lose your residential community and vice versa again. I've been involved with a number of projects in my district and I appreciate all the work that goes through, but one of the things that I have some difficulty is that as a Councilperson, I may call up and say to the Commerce Department, say, I'd like to talk to someone about putting some resources into the East Passyunk Avenue corridor, as an example. And we've done that, but for me, it becomes confusing because there's so many different 58 11/30/05 - COMMERCE - RES. 041057 entities that may have to participate in that. I thought I heard somewhere in this testimony that some of that transparency or ability to combine or compress the agencies and make it more seamless is what your goal is, and if that's what your goal is, I appreciate it immensely, because it just -- I'm one who likes to be on top of these things personally at least to get them off the ground, and then staff will handle it after that. So for me, it becomes trying to remember who I spoke with about what, and where the money is coming from does pose a problem for me personally. When you look to do investments in commercial/retail corridors, will there or is there, are there resources that could be used for a residential component that may be part of that commercial corridor as well? Because you don't always have just all retail. We have the mom-and-pop stores, most 59 11/30/05 - COMMERCE - RES. 041057 neighborhoods, with family living above them. That has kind of dissipated, but there are some blighted properties in and around these corridors that probably the best use would be residential, and, again, it's the support of each that will go a long way.
You're right. That's a very typical scenario in many of our neighborhood commercial corridors, where you have a storefront on the first floor and residential apartments, whatever, above, and our members are finding it very difficult to access financing for those mixed-use type projects. You went to a bank and they would want to treat the store as a commercial loan and then treat the apartments as a residential loan, and it was just very complicated financing. Back two, three years -- three years ago, I guess it was, we actually brought together a group of folks. LISC was around the table, PHDC, us, Regional 60 11/30/05 - COMMERCE - RES. 041057 Housing, Legal Services, PNC Bank, a number of CDCs, to really take a closer look at that issue, and came up with a proposal for a new program that PHFA actually adopted. It's called the MUFFI Program, the Mixed-Use Facility Financing Initiative, that specifically supports the development of mixed-use space on neighborhood commercial corridors. It's been a very successful program. It's part of the PHFA's Home Choice programs that also does the larger-scale residential development. And I think it's received more applications in the last year or two than any of the other Home Choice programs they operate. So, clearly, there's a demand for that type of product, not just here in Philadelphia, but state-wide it's been tapped into, and I think that's one way to address that important need.
In my district, I actually have a specific corridor that's somewhat depressed over 61 11/30/05 - COMMERCE - RES. 041057 the last couple decades and we've invested some significant money in the corridor to do some facade improvements, but to the southern end of where we've made those improvements, we still have a lot of blighted properties, and one of my ideas was to take this big old building and convert it into a senior citizen housing complex with maybe some retail on the first floor. And I already have some people working on that. I have a non-profit and some other folks with some ideas of their own to see if that makes sense. Who would I call? Who do I go to to talk about expanding that vision? Whether it's the right vision or not, I don't know. It's an idea I have. It could be the worst idea in the world, but it's a start. Where do I go? Who should I call? Do I call Commerce? Do I call Andy? Do I call Eva?
We're certainly 62 11/30/05 - COMMERCE - RES. 041057 more than willing to talk to you further about that.
Let me give you my phone number. How's that? I think if you call me, we would try to pull together the right folks, because there's also sources of housing development funding for a project like that. I want to mention one other resource that we administer. While it's not actual cash, it's very valuable, and those are the renewal community tax incentives, and there have been a number of projects that have attracted investment on commercial corridors, including some mixed-use projects, where the investor -- we've done this on North 22nd Street, on Lancaster Avenue, on Girard Avenue, on Ridge. The investor has been able to get a significant tax incentive, a tax deduction, for the investment for the capital improvements they've made in the property, and in many cases, it's made a 63 11/30/05 - COMMERCE - RES. 041057 difference. And that's a federal tax incentive. It's not cash coming out of the City, but it can really help the investor meet their bottom line. So we'd be happy to continue that conversation with you.
Thank you, and two other points and I'll end. I think Councilman Goode raised the question about where the successes are over the last 30 years and all. I'm of the age that I can remember the neighborhood corridors when that's where everybody shopped, and a lot of reasons for those corridors failing and becoming vacant. Some have to do with the fact that we lost jobs in the City and manufacturing jobs went, so did the population, and those neighborhoods became basically vacant, for the most part. I think that in the last several years, maybe in the last two or three years, more importantly, that the 64 11/30/05 - COMMERCE - RES. 041057 City of Philadelphia is poised, I believe, to really take advantage of the changes in society, if you will, that caused some of the blight initially for these commercial corridors when shopping habits of individuals change with the development of malls. I mean, South Philadelphia where I'm born and raised, South Jersey is where everybody still goes to shop, for the most part. They drive over the bridge, get stuck in traffic for two hours and all those crazy things, but yet they think it's more convenient. But we're seeing more and more of the residents who are moving back into the City or new residents that are moving in who are moving for obvious reasons. The reasons that they choose are convenience, not having to get in their car and drive to malls and get into gridlock, who want the experience that I grew up, being able to walk to a neighborhood butcher shop, bakery shop. 65 11/30/05 - COMMERCE - RES. 041057 That's the nice things, and that's what made our neighborhoods very viable and attractive. So we're kind of going full circle. With the rising costs of fuel, traveling to the mall is becoming more expensive and all those things. So what I'm getting at is, in the East Passyunk Avenue corridor, we're still doing work. There was a non-profit that was a subsidiary of Citizens Alliance, which gets written up often times in the papers, and they acquired a number of properties and they're doing the investment to do some major work on those properties and offer some attractive rental/lease opportunities. Despite their best efforts, we still have not really seen any increase in the activity for shoppers. Some of it may have to do with the two prior Executive Directors of the bid. Not being too critical, but I don't think they were really the right people for the job, and they're seeking another person 66 11/30/05 - COMMERCE - RES. 041057 to fill that slot, and I think the new person that they have in mind will do an excellent job. But despite all those best efforts, unlike the Center City District, which in the last decade has made tremendous gains, but they have a huge chunk of money because of the volume and the taxes that they get by way of their bid. The smaller neighborhoods, East Passyunk Avenue, maybe they can come up with $100,000 a year, and once you back out the cost of the Executive Director and other costs, there's really little left for marketing. On their own as individual retailers, they do their ads in the local newspapers and all, which is pretty expensive. I mean, advertising in the South Philadelphia Review is very expensive. I don't know what other local newspapers are. Is there money, will there be money, could there be money that could be used for marketing, not just for East 67 11/30/05 - COMMERCE - RES. 041057 Passyunk Avenue but for the neighborhood corridors throughout the City, talking about shopping in Philadelphia, but not just only downtown, and talk about some of the things that -- it's like a sales pitch. If you shop in your neighborhood compared to going to the Deptford Mall -- and I always get in trouble because I kind of pick on South Jersey, but that's okay.
But as opposed to the fuel, your wear and tear on your car, your tolls and all those other things most people don't even think of, but the shopping experience in Philadelphia could be a great opportunity for people. Will we be spending any money in that area of marketing, again not just for downtown, but the neighborhoods as well? Because that's really one of the big ticket items for neighborhood corridors. You got the people who live there. There's no question about it, but how do you draw some other folks in from a mile or two away? 68 11/30/05 - COMMERCE - RES. 041057
The short answer is yes. This is something that's a significant need. We're looking at marketing --
I should ask Councilman Goode. He's got an advertisement.
He's got one right there. I mention in my testimony we went to ICSC for materials from a number of neighborhood organizations that were put together in fairly short notice so that we could promote those corridors as the City in front of a number of vendors, but I think that there's more that can be done. It's an eligible activity for a Main Street organization, and we're hoping very much that it will be one of the activities in this request for proposals. We also think that a lot of the groups probably need to learn more about how to do marketing. So some of it may 69 11/30/05 - COMMERCE - RES. 041057 be about technical assistance and some of it may be about the money to do it, and we'll be looking at that.
I'll end with this. I have to leave, and I appreciate getting the extra time. And Councilman Goode, I want to thank him for putting this together. I think this is very helpful, and I'm certainly going to work with the Councilperson. Transportation, public transportation, I believe -- and, again, I could be wrong -- I think is very crucial to a lot of these things we're talking about, and I'll give you one quick example. A couple years back I was able to convince SEPTA to put the 19 trolley line back in service during the 20 holidays from Market Street or Arch 21 Street down to Bigler and make that loop, 22 and people started using it. Because I 23 understand from reading about a lot of this stuff, that people are actually intimidated by buses but they're not as 70 11/30/05 - COMMERCE - RES. 041057 intimidated using trolleys. Now, we got a lot of work to try to convince SEPTA that trolleys work better. Every other city figured it out because they bought our trolleys, but we can't do that here for some reason. I think that SEPTA could be a component to this neighborhood shopping experience, whether it's trolleys or some sort of a Phlash type of bus. I think that that could make it not only more attractive, as attractive or more attractive, because it makes it more accessible and convenient for people to get there. So my opinion is, it's a big package of financial investment, facade improvements, all of those things combined, but how do you get people to and from there is also, I think, a -- because in a lot of these commercial corridors in neighborhoods, there's no 24 place to park when you get there, and, unfortunately, a lot of people don't walk 71 11/30/05 - COMMERCE - RES. 041057 anymore. So you got to get them there, and in lieu of the car, public transportation I think is critical.
I know that the Girard Coalition has asked SEPTA to work with them, just as an example, to use the trolley in a way that would support shopping along that line.
The 15, which I tried to get on the 23, but Councilman Nutter wouldn't give it up.
Well, the is 14 first and if it's successful, then the 15 rest will come along.
Thank you. Thank you, Mr. Chairman, for allowing me the extra time.
Can I comment on a few things that you said? You went through a number of points.
First, on the transportation, as you probably know, all of our commercial corridors are in 72 11/30/05 - COMMERCE - RES. 041057 transportation centers.
Right. There's bus lines or trolleys or subways on every one of our commercial corridors. So that's how they became the centers, I think. And your issue of the City advantages, I think that's what we're trying to play to with all of our corridors and all of our neighborhoods, that the City is the place that people should be coming to rather than fleeing. We have tremendous advantages in quality of life and being able to walk to the store or walk through your neighborhood. And then the marketing side, I think we've had a little bit of experience at LISC in our programs, and, unfortunately, we only cover nine corridors now. So we can't cover every place that you are as well, but at least with our small program, there have been some joint marketing approaches, for 73 11/30/05 - COMMERCE - RES. 041057 example, at 5th and Lehigh. OSSA (ph) has brought the merchants together. So you need that organization sort of piece to it to bring people together to do the promotion part. And they've gotten good rates from the newspaper if they all take a page together. And that's one approach. And then, interestingly, in Mt. Airy, our CDC Director there, Farah Jiminez, says, Sometimes you have to sell the sizzle before the steak and create a buzz. And I think that's what they've done in Mt. Airy, and people are saying, Wow, Mt. Airy, we should go there because -- well, what's there? I mean, it's growing and it's doing well, but without that sort of buzz, people wouldn't be thinking about going there. So I think promotions is really important to the corridors and making them feel like places that people want to go.
I think what 74 11/30/05 - COMMERCE - RES. 041057 Councilman DiCicco was saying goes beyond just real estate marketing or promotions, but really some intensive technical assistance in terms of cooperative advertising, which I did when I was at PCDC back in '92, '93, '94. It has been continued, but not with any intensity in terms of just telling people to use the 5th Street model that basically if you can pull your resources to take out full-page ads that list all the businesses and send the message to the neighborhood that we want you to shop closer to home.
And, again -- I get hung up on this trolley stuff, but the line is the longest 19 line in the country, and it probably goes 20 through several Councilmanic districts. 21 And it's not your problem. I'm sure you 22 have your opinion on SEPTA, but we all 23 need to collectively try to figure out how we can convince them that maybe we need to look at redefining the way their 75 11/30/05 - COMMERCE - RES. 041057 transit system could be helpful to the economic development of this City. I mean, it goes from the lower end of South Philadelphia all the way through Germantown, Chestnut Hill and back again. And you're right, Mr. Toy, every neighborhood that it goes past, there is a commercial corridor. There are many commercial corridors along that line route. And, again, we're 12 fighting a losing battle with SEPTA 13 because we don't have enough 14 representatives on the Board, but I think 15 if we can make the pitch that it's 16 economic development, that may help at 17 least create a pilot program. 18 Thank you again. 19 Thank you, Mr. Chairman. I 20 appreciate it. 21
I wanted 76 11/30/05 - COMMERCE - RES. 041057 to speak on Councilman DiCicco's point, which I think is extremely well taken, the notion of global, meaning Philadelphia, global marketing in a very, very strategic way, and the one agency I believe in town that has mastered that formula from a tourism standpoint is Greater Philadelphia Tourism and Marketing Bureau, where they, in a very, very strategic way on a regular basis, tour neighborhoods for a number of reasons. And when you look at their annual report and what that has yielded in terms of tourism opportunities, it's huge. So right here in the City we have a model that works, and if we're serious about the illustration that Councilman Frank DiCicco has pointed out, we have a formula that works and it's just a matter of thinking outside of government and going to a place where it's working, and there it works extremely well. 77 11/30/05 - COMMERCE - RES. 041057 And as Councilman Goode mentioned, PCDC does that in some way right now. If we take that City-wide, then it goes directly to the economic development uptake that we get as a result of approaching it in that way. And so with the RFP process, I have a number of subsequent questions when my turn comes, but I'm curious to hear more about that process and the criteria that speak to the goals you're trying to achieve with the upcoming RFP.
Just one comment on that. We've worked with GPTMC and I worked with them on their neighborhood tourism network, which is what you're talking about, I think, and what they've done is, they found the niches that I mentioned before, like the cultural or ethnic or university or university area or 5th Street, Latino area, Chinatown or the historic nature of Germantown, you know, the history piece. So they've taken those little chunks and -- 78 11/30/05 - COMMERCE - RES. 041057
Yes, they have, and in an extremely successful way in that they have pulled in every single neighborhood -- it is an impressive tour, and if you've never taken it, I would encourage you to do that if you want to move towards coming up with a global marketing strategy of business corridors. Councilwoman Tasco has given me the opportunity to ask subsequent questions tied to those raised already. Speak in some greater detail about this pending RFP process. What opportunities exist for new or emerging CDCs as it relates to this? And there may be none, but I'm curious to know, are they factored in when RFPs are coming down the pike?
Is that your question? I spoke about this back in, I guess, June or July during the NTI hearings, and so some of this is an update on it and a refresher and our new thinking about it, but our goal was to be as flexible as we could be to cast a broad net, because we really -- not that this serves as a needs assessment, but we wanted to be able to understand truly what all of the projects are that are out there, who are the groups who are focused on commercial corridors and what they perceive as their needs for funding. So we're trying to not narrow it, but really sort of to understand the full range of opportunity out there. And so in order to do that and, again, to be as flexible as possible, we're looking at the three different sources of funds that are available to us. The largest is about 1.9 million from Neighborhood 80 11/30/05 - COMMERCE - RES. 041057 Transformation Initiative, NTI bond proceeds. We're working with bond counsel just to make sure we understand any of the restrictions involved because of the bond proceeds, but we believe that those will be able to be used both for hard costs kinds of things, improvements on corridors, and we're hoping we will be able to use it as well through grants for services on corridors. So that's our goal, but we're still finalizing with bond counsel all of the eligible uses for it. The second source, as I mentioned, is that there is additional funding that's come from DCED for Main Street type programs, and, again, they have some more specific criteria about the length of the corridor and the model that Andy talked about a lot, but there will be resources from there that will be available through this RFP as well. And the third resource is, we're looking at previously granted 81 11/30/05 - COMMERCE - RES. 041057 Community Development Block Grant funds but funds that haven't been spent, and we're reviewing with the Finance Department how much is available. And there we're looking at funding pre-development for projects, larger projects, that will help to actually transform a corridor. And many corridors have kind of that building in there that could be the anchor, but really needs some significant investment. So this would enable us to support some groups in doing projects such as that. So that's the range of what we're looking at right now, and because it's three different funding sources, we're just trying to tie down to make sure we know exactly what's eligible and what's not to do that.
In short, the funding sources will drive what you fund?
Well, we're hoping that we'll be able to match the 82 11/30/05 - COMMERCE - RES. 041057 needs and proposals with the funding sources rather than telling any group they can only apply for one, that we'll be able to mix and match, again, to create the most flexibility.
How do you outreach to the emerging groups? How do they know you exist? How do you make the connection?
We're still thinking about this, but just as an example, we've talked to Rick about doing a briefing through the CDC Association about the RFP. We intend to post it on the City and other available websites so that we can get the word out, and we'll work with the other organizations, that we're willing to go travel and kind of spread the word. We'll work with the Mayor's Business Action Team, which is 83 11/30/05 - COMMERCE - RES. 041057 out on corridors, and with PCDC to try to do as broad a sweep as possible.
All right. On of your testimony, you mention, and I quote, We have begun to coordinate support to commercial corridors with PCDC and the Mayor's Business Action Team. Speak to me about what that means, and is it implied then that those agencies don't or didn't have a practice of talking with each other with regards to efforts out in the trenches?
I think we're just trying to be a little bit more strategic. The Mayor's Business Action Team has a number of employees, and they tend to be geographically focused. PCDC has four people on its NCR, neighborhood commercial corridor, staff, and they have over 40 corridors. And then we on our 84 11/30/05 - COMMERCE - RES. 041057 staff have some people who are funded through the Empowerment Zone to work on specific corridors in West Philadelphia and American Street. What we're trying to do now is make sure we know who is where and, where there are gaps, to assign staff from at least one of the three places so that there won't be areas of the City that aren't covered, and to make sure we have sort of a point just for communication so we're not duplicating efforts and we're not leaving gaps in any communities. And we've agreed to get there. I mean, we're not there perfectly now, but we've had a number of conversations already about that.
We're going to do this as a duo, because there's no point in coming back. Are all of those departments under you now?
No. No. The 85 11/30/05 - COMMERCE - RES. 041057 Mayor's Business Action Team is within the City's Commerce Department. Let me back up and say one thing that we did with this transition that I didn't mention in the testimony, is that we moved our offices to the 12th Floor of One Parkway, and we did that -- that's where the Commerce Department is located, Mayor's Business Action Team is located there, and so we're --
PCDC is not there. In fact, they just moved, but they're not in a City building, but they're near us. They moved to the Packard Building at 15th and Sansom, so that we could, just by proximity, even have better communication among ourselves. But, as I said, the Mayor's Business Action Team is part of the Commerce Department. PCDC, their contractual relationship with the City, 86 11/30/05 - COMMERCE - RES. 041057 they get funding through Community Development Block Grant funds. I am now the signer on that contract. So they're under contract, and I'm, with my staff, managing that contractual relationship.
That means we're monitoring and evaluating their work and working with them to make sure they're adequately funded and able to provide the best service as possible.
So you monitor the contract, but do you have any coordinating effort with them?
Yes. Well, beyond monitoring the contract, as I said, our staff has met with their 87 11/30/05 - COMMERCE - RES. 041057 neighborhood commercial corridor managers, just as an example, and will also be reinvigorating a coordinating entity that had existed before called the Neighborhood Commercial -- Neighborhood Economic Development Collaborative -- I'm not getting the exact name correctly -- that had existed in previous years where we all come together on a regular basis.
I just had one comment on the coordination issue, which is that it's not just the Commerce Department and NTI and PCDC and us. There are other departments in the City that actually are important. And we've tried to work with, for example, the Streets Department on street lighting, which without direction from above it's kind of hard sometimes to get them to also buy into the vision of commercial corridors as important places to invest in. So I think that's something Eva is going to have to work on as she goes forward. 88 11/30/05 - COMMERCE - RES. 041057
And we are. I mean, just one of the examples is, I mention in my testimony that we had applied for funding from DVRPC. Well, within the City, we sat down, the Streets Department, the Commerce Department, the Planning Commission, and looked at what opportunities might exist to bring that resource in, and that's an ongoing process. There's coordination in terms of applications to the state for Hometown streets, for greening, DCNR grants. So I'm never one to say it's perfect. One can always do better, but that's something that we've been very conscious of, that it's important to do that. And, again, I don't want to under-emphasize that there are two partners sitting here with me and some others who are not here today who are equally important. We're very clear that we have certain obligations and responsibilities and resources as the City, but also sometimes some of these 89 11/30/05 - COMMERCE - RES. 041057 things are better done through non-profit organizations. They might have more flexibility or freedom or a different set of skills. So we think it's real important for all of us to know what we're doing and to work towards the same goal.
Councilman Goode opened his questioning with a number of big-picture vision types of focus, and the answers I wasn't extremely happy with, so I'm going to repeat some of them. When you consider, Rick Sauer, your statement that this is a window of opportunity and when you hear from Councilman Goode that the City has been actively engaged in neighborhood commercial corridors for X number of decades and you mention three success stories immediately, Ogontz Avenue, Germantown Avenue, what part of Germantown Avenue?
And 5th and Lehigh. In addition to strong leadership, what were the other ingredients of those three? I think you mentioned some others, North 5th Street, Girard Avenue, Passyunk. What other common ingredients are needed so that ten years from now there are two dozen on the list versus six that immediately pop? In addition to strong leadership, what else should a CDC have that moves them to what they're designed to be and, that is, to energize neighborhoods.
We're actually engaged in putting together a study as to what are those ingredients, but I think when we did our RFP to pick the eight or nine groups that we started with, we looked at capacity of the groups, we looked at the market itself of the 91 11/30/05 - COMMERCE - RES. 041057 neighborhood. So, yeah, those three areas have markets. People that live there that are going to shop there. They're not blown-out neighborhoods necessarily. There is enough density of residential around to provide support for the commercial corridor, and there was enough infrastructure on the commercial corridor so there's not -- in some neighborhoods, you have so many missing buildings and it's really hard to get off the ground even if you have new residential coming in, and that's a challenge in some neighborhoods. And then in some neighborhoods, I have to say that there is, and we've all discussed this, the need to shrink the commercial corridors because the density of the neighborhood has shrunk itself, so the market is smaller. But that's something -- you need to look at the market, I think, as well as the capacity on the ground level. 92 11/30/05 - COMMERCE - RES. 041057
And I think it makes sense, too, to look where there has been success or significant improvement. Let's go back. What really were the key factors in moving that corridor forward, and compare that to other corridors where there's been resources invested and there hasn't been that same result. I mean, I think we have a lot to learn in that respect that can really inform programs going forward. So that's part of what the work that I think LISC is looking to do, but I think that's really critical to this.
Is it fair to say there is not -- this is not to be critical. I'm trying to learn this based on discussion and questioning. Is it fair to say there's not a one-stop-shop for a new or emerging CDC for them to go to and get the A, B, C, D, E, F, G script that they need to put in place? You just ticked off several. Is 93 11/30/05 - COMMERCE - RES. 041057 there a one-stop-shop for new or emerging CDCs where they can go to get the blueprint to help them move towards the level of success as experienced by Ogontz, Germantown Avenue and Lehigh?
On a workshop level, yes, but in terms of day-to-day support, not from us. Perhaps from other people, but our workshops are -- we try to open them up to all the CDCs in the City.
We get very frequent inquiries from start-up groups about what they need -- they're trying to figure out what they need to do to put an effective organization in place, whether it's around a commercial corridor or housing or something else. So we try to provide some limited assistance in that respect and referrals to other organizations that I think can be of more assistance. But I don't think there is really a comprehensive program in place to support those new start-up organizations. 94 11/30/05 - COMMERCE - RES. 041057 The other issue, too, you got to factor in is, when there's limited resources, it's a balancing act between supporting groups that already have capacity so they can do more and better things in their corridors and trying to build capacity where it is not quite as strong. So figuring out where that balance is I think is really important.
Does that then present an opportunity for government given the new coordination that you've illustrated, Eva?
We've identified a number of areas where we think there aren't enough resources yet. Capacity building, training, technical assistance for these groups is one of them. An acquisition pool is another. Again, I don't have the answer right now, and I don't even know that we, the government, should be doing it, but I think we should be helping figure out where the resources are to support those. 95 11/30/05 - COMMERCE - RES. 041057 I wanted to answer your question in a little bit different way, which is I think there's not going to be -- while there can be a blueprint, for every neighborhood it's going to be different, and I think that there are sort of two parallel pieces of work that have to happen. One is for the individual organization building, its capacity, which we're talking about, and the other, which has been mentioned, is having a vision and a plan in place. And those are two different things, because you have to get people to coalesce around something positive and then have the wherewithal to attract the resources to implement it. And so you can be doing both of those on a parallel basis, but I think you've got to be looking both at the key organization or organizations as well as what the community sees as what it wants to see there.
As a quick 96 11/30/05 - COMMERCE - RES. 041057 follow-up question, who is in charge or who should be in charge?
I don't even like that terminology. I think for the City of Philadelphia --
For the City of Philadelphia, I've been asked to play that role for now and our office, Neighborhood Transformation Initiative. I just think that we are not going to do it alone. There are too many components to it, and that's why I talked about partnerships.
My question is not how many stakeholders or partners there are going to be, but who is in charge and who should be in charge?
Following up on that, I have an emerging CDC. Are you familiar with the Lawncrest/Lawndale Revitalization Program?
I've reviewed the initial planning work that happened there, yes.
Because we have someone from MBAT that works with them, but does MBAT coordinate with them all the other services that could be available to them through PCDC or through LISC, letting them know about LISC, or even knowing that they might join the CDC Association? Because they're new at this and I'm fairly new at this, having not too many CDCs in my district. We have ORC, but they're self-sufficient and I don't have to bother with them. But all of those -- 98 11/30/05 - COMMERCE - RES. 041057
Actually, MBAT has been a good leader here, I think, in bringing other resources and making us aware of that plan and the desires of that group. Hold on one second. I thought it might have been an area where we had done a tour, but I think not yet. Again, I think that they've been -- the Northeast representative who is working there is somebody who is aggressive and conscientious.
We actually have a pretty diverse membership as far as CDCs from groups that have been around for 20, 30 years, have a lot of capacity to newer start-up organizations that are just getting their feet wet in different issues, and I think there's a real benefit from them coming together with the other CDCs to learn and have an opportunity to use them as a resource to figure out what makes sense in their neighborhood. So I can certainly follow 99 11/30/05 - COMMERCE - RES. 041057 up with your office around that as well.
Okay. Let me just ask one question. A lot of the questions I had have been asked by Councilwoman Blondell Reynolds Brown, but I go back to MBAT with your working with them. I know they come under the Commerce Department. We had an issue with their involvement with business in my district that created a real problem for some of my neighbors in East Oak Lane and Olney, and we had hoped and wished that they will have a better working relationship with the local Councilmembers before they move to help a business to expand or take any action in the community that could be a negative.
I'll certainly share that. Again, they're still within the Commerce Department, so I don't supervise, but I'll share that, and I'm sure they would appreciate that concern and take action on it.
Let me ask 100 11/30/05 - COMMERCE - RES. 041057 you, which neighborhoods are you taking the tour?
I have done this on an as-requested basis. I'm available. If not myself, members of my staff. So I had recently sent a letter to Councilmembers and I did one during the summer as well. So please contact me if you think there's a particular neighborhood that we should go out to.
You triggered another question. I was curious, too, to know what CDCs are considered in the pipeline and what criteria -- let me just put this in context. Right before this meeting, I met with a woman from Councilwoman Tasco's area who is looking to do this, and I said, You need to start first with your District Councilperson and then she needs to call Eva Gladstein and Rick 101 11/30/05 - COMMERCE - RES. 041057 Sauer. So it's just ironic that we then have a hearing following a meeting with the woman who wants to move in this direction. So it's an opportune time for me to learn, but to also help her understand what she needs to do. You say 40 corridors?
There are 40 corridors that PCDC provides some level of corridor support to.
Does a business strip have to attain some level of value or status, or whatever, to access the services that you provide? Do they have to be a certain something before? All they have to do is ask for help; is that what I'm hearing?
They don't have to comply to any kind of guidelines 102 11/30/05 - COMMERCE - RES. 041057 anymore?
Again, let me be clear. For the groups that are supported by PCDC, these have to be Community Development Block Grant-eligible corridors, and there's a list of them in the Consolidated Plan, which I have with me. I think it's 43 corridors that fit those requirements.
For that. But that is not the only vehicle through which we can provide support. So there's no pre-qualification if somebody is not in a CDBG-eligible commercial corridor.
Thank you, Mr. Chairman. 103 11/30/05 - COMMERCE - RES. 041057 Ms. Gladstein, just a couple of questions, and I think they're primarily on of your testimony. You mention the commercial corridors that are in the Consolidated Plan as a part of the PCDC work, but you did kind of indicate that there are many more corridors in the City.
Is there an official list of corridors, and specifically as it relates now to the RFP, could you be anywhere, or do some of the same income bonds apply?
It's attached -- and I can make it available to you. There was a list of all the corridors which we took from the City Planning Commission's Philly Shops document. It's 300 corridors, approximately. So it's virtually any and every corridor or commercial center in the City.
Okay. And 104 11/30/05 - COMMERCE - RES. 041057 you said that there was a document attached to --
Not to this testimony. So I can make it -- it was attached to the NTI Program Statement for fiscal year '06.
I understand. If you could provide that to the Chair. On , you made reference down the bottom that you're going to implement the Philadelphia Main Street Program putting four CDCs under contract to manage Main Street Programs and establishing a Main Street resource group with the state. Who are the four CDCs?
The four CDCs are the PEC, People's Emergency Center, for a segment of lower Lancaster Avenue; 105 11/30/05 - COMMERCE - RES. 041057 Frankford CDC; Allegheny West for North 22nd Street; and Mt. Airy USA. Those groups are Roxborough -- there's an additional group that has funding but not through the City of Philadelphia, and that's Roxborough. They have funding directly from DCED from the state, but also to operate a Main Street program.
So it's PEC on Lancaster Avenue, Frankford -- was that group?
You made reference on Allegheny West that it was 2 22nd Street?
Roxborough. 106 11/30/05 - COMMERCE - RES. 041057 That funding doesn't flow through the City but comes directly from the state. That's a fifth one. Did you miss one?
It's those small numbers that get you every time. And how did you decide on the four? I understand about the Roxborough issue.
This is a process that I was not deeply engaged in. The selection process occurred before I assumed this position. My understanding is that there was basically a matrix created of all of the corridors and active CDCs that met the qualifications. There was a review process with those CDCs. There were some very competent CDCs that for one reason or another even chose not to be interested because the program is so specialized. But they went through a process of elimination that 107 11/30/05 - COMMERCE - RES. 041057 way.
My understanding is that the state dictated to the City what corridors would be --
The City gave the state a larger number and the state came back with this selection.
Actually, there were six that the state identified, and they did an assessment and they ended up with the four that were chosen.
Okay. Good. Thank you. And you made reference to the phrase "matrix," and I have written a note to myself earlier about a grid. I mean, it kind of doesn't matter, and I don't know what your matrix has on it, but I think in light of your response to 108 11/30/05 - COMMERCE - RES. 041057 either Councilwoman Tasco or Councilwoman Reynolds Brown, given that we have different programs that seem to have different guidelines, something like that might be helpful --
-- to better understand and be able to point people in the right direction. If you're over in this neighborhood and you meet certain guidelines, you can access this way and other organizations that may not, but want to access some other program. I think it might just be helpful to keep track.
I agree. We're working right now to try to figure out how to best represent this graphically.
Okay. How many commercial corridors do you anticipate could be funded through this RFP, and what's the total? Did I miss it somewhere? What's the total dollar amount available? 109 11/30/05 - COMMERCE - RES. 041057
I didn't put it in because, frankly, I'm still ascertaining that. There will be about 150,000 available in Main Street funds. There's up to 1.9 million in the NTI Commercial Corridor Support Program, and we're still reviewing available Community Development Block Grant funds. I don't have the number for that.
The top of is sort of the total set of resources that are used to support neighborhood economic development. Some of those are already under contract to organizations or are available on an ongoing basis for neighborhood economic development projects.
And I know you're still going through the assessment trying to figure out what, I guess, the total resource available is, but do you 110 11/30/05 - COMMERCE - RES. 041057 have any sense at the moment of what the average grant might be?
Okay. The top of 2, you made reference to applying to the DVRPC for funding regarding the Centennial District. I don't need you to go through what that's all about, but, of course, I have an interest in the Centennial District, so can we talk later about what the grant is and --
That would be great. Thank you. Last comment. There was discussion -- I know Councilman DiCicco desperately would love to have the trolleys, which at some point I was probably more than happy to give to him. It was probably after about the second or third article that I was more than willing to give him the trolleys, but in 111 11/30/05 - COMMERCE - RES. 041057 any event, they are back. My only real comment about that is, that is a line that runs through a number of different neighborhoods, and Andy Toy and I have discussed this. I think that as much as kind of the Girard Avenue Coalition was very passionate about the trolleys -- and I understand that sense of passion a little better today -- I think that when we have these kind of multi-district issues, it would be helpful if the planning focused on as many components of those different districts so that we don't in some aspect almost have a bit of the tail wagging the dog on what should get done and how it should happen. The neighborhood that may be experiencing a little more pain about the thing that's wanted should get at least as much attention or close to as much attention as the neighborhood who thinks that it's the greatest thing since sliced bread but having none of the hassle that goes with it. 112 11/30/05 - COMMERCE - RES. 041057 In addition, there are multiple components of Girard Avenue. It's a very long street, and there is some amount of commercial activity on the western end of Girard Avenue, nowhere near what may go on in North Philadelphia, but it may have helped ease some of that process if the western Girard Avenue folks, who were pretty much never included in the conversation, could have better understood what some of the potential benefits would be from the return of the trolley. Their view on this was probably best characterized as, We have a bus, it runs, it gets us the same place we want to go as a trolley, what's the big difference. So I think some of this is, process and procedure still matters.
No, and I think we've learned a lot. I mean, part of it just had to do with what resources, people resources, were available. There were some conversations with East Parkside, but, clearly, not enough and 113 11/30/05 - COMMERCE - RES. 041057 not -- East Parkside is not West Parkside and it's not Haddington. Just to follow up on that, one of our concerns and areas we've been looking at is Lancaster Avenue, which is also an extremely long corridor, many districts, lots of different components, lots of plans in place, and one of the things we are looking at is just trying to find a way to pull everybody together to talk about that, because there are a lot of opportunities as well as needs and resources for that corridor. It's another example.
Okay. I look forward to continuing to work with all of you. Thank you. Thank you, Mr. Chairman.
Thank you. Is there anyone else to testify on this resolution?
I did have one more question, actually, regarding the mixed-use piece that we talked about 114 11/30/05 - COMMERCE - RES. 041057 earlier, which is one that we're looking at LISC to try to help -- and the City is trying to figure out how to help finance those kinds of developments, upstairs residential and downstairs commercial. The question I had was, there are a lot of places where there are boarded up windows now still on our corridors, and I was under the impression that there was an ordinance that prohibited that or required people to put windows in, but that has not happened in many of our corridors, and I was out on 60th Street yesterday and it was upstairs boarded up windows.
That will allow 115 11/30/05 - COMMERCE - RES. 041057 people to push people in the right direction to develop the upstairs for residential, I think.
Thank you. Is there anyone else to testify? (No response.)
This is the first of several hearings we will have on this issue. I thank everyone for testifying. This hearing is recessed to the call of the Chair. (Committee on Commerce and Economic Development adjourned at 12:00 p.m.) - - - 116 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on November 30, 2005, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)