The -- in the leases, there are areas defined as exclusive use areas that come under the control of the two teams. And within those limited areas, they are responsible to keep those areas in good working order and have the responsibility, I guess, and the right to make improvements and to fit and finish those spaces as they see fit. In terms of capital improvement, as we normally define them or think of them, in terms of 59 9/20/00 WHOLE COMMITTTEE - BILL 000535 to the structure itself, those are the City's responsibilities.
Excuse me. Can you give us an example as to what the teams are responsible for?
Yes. If Bill Giles wants to redecorate his office and wants to put paneling in there or he wants to put drapes or if he wants to put new rugs or if he wants to put in an intercom system or Muzak, that would be his responsibility.
Well, my question is, what are they doing about the violations? Who is responsible? What voice does the City take?
The specific violations, the food and beverage concessionaire has laid out an action plan where they have -- continuously, they've already responded to lots of the violations, and some of the things that were 60 9/20/00 WHOLE COMMITTTEE - BILL 000535 mentioned are going to take a little more time because of --
And that was only because of the Daily News bringing out these articles.
Some of the articles -- some of the violations that they referred to dated back to July, and they had done things separate and apart from anything that was in the Daily News. I think that they've been -- it's been my experience that they have been fairly responsive as a company. When things are cited or when there are problems, they've responded.
Well, again, I ask the same question again: What responsibility does the vendor have if they don't correct the violations?
I think if the vendor doesn't comply, I think the Health Department has, you know, remedies. I guess they would take them to court. I'm not -- you know, I'm not an expert in that, but I don't believe that there are any things that were cited that they are consciously just going to ignore. I mean, they've shown, at 61 9/20/00 WHOLE COMMITTTEE - BILL 000535 least in my opinion, a good-faith effort to comply and to correct whatever deficiencies were cited.
Thank you. Mr. Grillone, I would appreciate your providing us with a list of what the teams are responsible for. You know, are they responsible for the upkeep of the locker rooms? If you could give us just a list, if we're going to be getting a list from the Administration, as to what improvements we're responsible for, I would like to know what the teams are responsible for.
We will provide that list. I'll have the Law Department do that when we submit, you know -- I mean, it will be fleshed out when we make the, you know, the November submission that has to identify specific items that we're responsible for, but I'll have the Law Department draft something that summarizes it.
Thank you. Is Councilman Clarke in the room? He's next to be recognized. (Councilman Clarke not present at this time.) 62 9/20/00 WHOLE COMMITTTEE - BILL 000535
Well, since he's not here, the Chair recognizes Councilman Rizzo.
Thank you, Madam President. I'd like to go back just for clarification purposes. You had talked, Miss Wilkerson, about the preventive maintenance program for the Vet in the event that we spend $82 million for repairs. You said -- and I'm not going to attempt to quote you. You said that we don't want to get back into the situation that we presently are. Are you suggesting that part of the problem, the $82 million of maintenance-related items, are partial -- is the responsibility for this condition lack of maintenance? Did we not do some things along the way that should have been done and that's why we're in the situation we're in?
I mean -- well, a lot of the repairs that we have to make right now are simply because we have old systems. It's a 30-year-old building and a lot of the systems that 63 9/20/00 WHOLE COMMITTTEE - BILL 000535 are in the building are original to the building. This is -- you know, in any event, we would be making repairs to the building simply because the systems that are in there are at the end of their life span. I think when you read through the report and read about things like leaking roofs, you know, there's some things that might have been preventable had the maintenance regiment been different. Had we given more money in the operating budget to the maintenance of the facility, we might have been able to forestall this. I know that in talking to people about this specific property, we also talked about a little bit about City Hall. And if we had done maintenance work on City Hall four or five years earlier, the kind of costs that we incur now would have been substantially less, tens of millions of dollars less if we had just done some maintenance. You know, there is some maintenance we probably could have done on the Vet to avoid some of the kinds of costs we're going to incur now.
So then what I'm 64 9/20/00 WHOLE COMMITTTEE - BILL 000535 hearing is that the maintenance strategy that we used during the life of the Vet, if it had been more aggressive, if there had been more attention and more money put into that facility, that the facility may not have gotten the review that it had received in this report.
You're welcome. The Chair recognizes Councilman Clarke.
Thank you, Madam Chair. First of all, I want to have a follow-up request from yesterday's briefing, a question on the turf. It's my understanding that there are several systems being reviewed, and I'd like to get more detail on that, if somebody could provide me with some information on the various systems.
I don't know what -- I didn't hear what systems you're referring to. 65 9/20/00 WHOLE COMMITTTEE - BILL 000535 Oh, the turf systems, okay.
Yeah, I'd like to get more details 'cause it's my understanding that the costs associated with the various scenarios may be substantially different, and in your document, you only have $3 million, and I'm not clear what that reflects.
Okay. The other issue, going across the discussion on the stadium construction, the new stadium scenario, there was a very relatively aggressive strategy associated with the participation of MBE/WBE. I understand that -- I think the State was actually going to participate to some degree in some training dollars. I think this was spearheaded by the laborers unions -- I don't know if you all recall that part of the discussion. My understanding is -- and I'm not 66 9/20/00 WHOLE COMMITTTEE - BILL 000535 really clear on, if we do not do stadiums, it's not clear to me if any sort of participation program would still be in place upwards and beyond what we normally do. And although I understand that we were talking about a potential billion-dollar scenario, this is potentially $100 million, and I think that's a substantial amount of public investment. And I don't know -- is that a part of the process if we have this doomsday scenario where we have to actually going in and renovate the Vet?
I have not heard discussions about that. I will follow up on that. It is an issue that certainly when we come back, if we end up seeking funding for, you know, the long-term renovation of the Vet, the renovation for the 10-year scenario, I'll make sure that we come back responding to that and --
Is there anyone that could speak to the new construction scenario participation?
What exactly was 67 9/20/00 WHOLE COMMITTTEE - BILL 000535 being proposed? (Ms. Wilkerson confers off-mic. with colleagues.)
During the initial stadium discussion on the two new stadiums, there was a proposal put forth, I believe, by the laborers union and worked out with the building trades that it was going to be a very aggressive participation strategy that would allow apprenticeships for all of the various trades and the State would actually put some money on the table to participate in that program. And my question is, if we do not do new stadiums, will there be any level of that type of participation program in the renovation of the Vets Stadium?
I'm not sure I can answer the second half of that question, which is what will we do if we're fixing the Vet?
I mean, we'll be doing that, I guess, as the City, and, you know, we'll need to follow, you know, whatever the public bidding and the MBEC and that process. 68 9/20/00 WHOLE COMMITTTEE - BILL 000535 I think when we're talking about new stadiums, at least the model that has been pursued was a model, in effect, where the teams would become the developers, and where they could have -- we could look at a kind of comprehensive program because you'd kind of know that all of this work was happening, you know, over a period of time, and we had some discussion about that. But, again, because we never reached closure, we never reached closure on a detailed plan, but the intent was, in fact, to have a detailed plan on how that would happen with --
With the new stadiums? Are you saying that there was no 16 closure on that -- on that particular --
The closure in the sense of a detailed final plan on how that would happen. I mean, the parties were clearly prepared to do that; we just never -- kind of never wrote out the full plan because we never reached -- we never proceeded. That's all I'm saying. It wasn't that people didn't want to do it -- we just. . .
Is somebody working 69 9/20/00 WHOLE COMMITTTEE - BILL 000535 on that? I mean, in the event that we somehow do get two new stadiums?
I think it's fair to say that all activity related to stadiums at the moment is on hold.
(Inaudible.) If we're going to spend $100 million, is this an opportunity to pursue the same kind of aggressive program that was anticipated with the new stadiums where we had special relationships struck with the building trades? And we'll respond to that.
That's why she's the Chief of Staff. I mean, this is an opportunity, although it's not the billion-dollar scenario, we're talking about $100 million, and I'd like to see an opportunity to get people involved in this process. Thank you. Thank you, Madam Chair.
You're welcome. 70 9/20/00 WHOLE COMMITTTEE - BILL 000535 The Chair recognizes Councilman Ortiz.
Thank you, Madam Chair. I have very few questions. I would like a definition of what a "reasonable business transaction" between the public and the teams means, in very clear language and so that the people understand. So that when they read that phrase in the Daily News and in the Inquirer, they're not confused by what it means. Does it mean how much money the taxpayers are going to put forward in terms of stadiums and how much money the teams are willing to put forward in terms of stadiums? I'd just like a definition of that phrase.
I'll try, Councilman, again to be as responsive as I can in the context of -- as was indicated earlier when we --
Well, because the underlying issue in this hearing, all through it, is not really $80 million or the maintenance; it's really about whether we are really going to at one point or another begin building stadiums. And 71 9/20/00 WHOLE COMMITTTEE - BILL 000535 when you make a statement like that, I think the people have a right to know as to what it means and if it means that they will have to put forward a certain amount of money from their pockets, to build it.
Yeah, I think I'm -- I think I -- well, all I want to do -- I will try to be as responsive, but obviously, without a transaction done, I can't be detailed, so let me try to do both halves of the coin, as you asked. I guess from a team perspective, the teams are looking at this from the standpoint of -- and obviously, we're urging -- that we are interested in them maximizing the dollars that they would commit, that they would borrow, that they would be responsible for, that that they would spend to build these facilities. The teams' ability to do that is obviously dependent on their finances. I mean, how much money could they make on a new stadium and as a club and, therefore, pay, you know, bank loans so that they could borrow money and put it in the building. And you've got very different dynamics between the two leagues that, you know, we all -- 72 9/20/00 WHOLE COMMITTTEE - BILL 000535 we've heard-- you know, we know there's a salary cap in football, we know there's not one in baseball, so you have a lot of just different kind of dynamics that impact, quote/unquote, what the teams can do. And on the public side, we're basically dealing with trying to look at a transaction where you could see an investment by the public, that the public would believe it -- I'll use the term "could get paid back on." In other words, where there would be revenues coming back to us, whether tax revenues or rent revenues -- I'll use rent just as a -- revenues coming back to us that would save ourselves -- okay, we've made this -- we've borrowed this money and we have a high expectation, a reasonable expectation that we will get paid back. I think those are the -- so that both parties are looking to cover -- get paid back out of the transaction the respective investments they make.
And when is a reasonable time period for the public to get this information so that they can tell us, as a 73 9/20/00 WHOLE COMMITTTEE - BILL 000535 legislative body, whether the public and the people really are for this or not? Because ultimately, it comes down and will come down as to what it is that the public gets back from any investment that we make. And I think before we make a decision, we have to know very clearly what it is that we get back and what we don't get back and what is the -- because we don't want to be able to build another white elephant in which we create richness for one side but the public gets zero and gets even locked out of the stadiums. So when do we begin to get that information as to what is the payback? Because I know that right now, we entered into a deal that very early on, without all of the information, that we may have to buy off, and I think a lot of people here were talking -- I know Frank DiCicco said if we pass the practice field facility and we pass this, we lose some leverage in terms of negotiations. And now we're faced with a situation that I don't see how we're going to meet a November 30th deadline, I don't see how we're 74 9/20/00 WHOLE COMMITTTEE - BILL 000535 going to meet a September deadline in terms of stadiums, so we're going to be stuck with a deal that everybody knew was a bad deal from the beginning. And before we keep on making investments, I think this body and this city and the citizens need to know all the financial connotations that we're talking about. Thank you.
Thank you. The Chair recognizes Councilwoman Tasco.
How close -- and this question may have been asked -- are we to limit of our capital borrowing?
Well, right now, we have $342 million of capacity available, as we speak.
To the Chief of 75 9/20/00 WHOLE COMMITTTEE - BILL 000535 Staff, on the blight program, will that take us over? What impact does this have on the possibility of floating the bonds for the blight program?
We are still in the process of putting together that program, and we're exploring various alternatives. In terms of respective financing vehicles, we are not necessarily sure that we're going to finance these bonds through GO, so I'm not -- I'm not -- I can't answer that question in terms of the vehicle we're going to use, as we're still exploring those options right now.
There's some of the things that we want to be able to do under the blight program that might require that we issue private activity bonds. That does not go against, you know, the City's debt. And at this point, we have not refined a budget for that, so we don't have the specific information.
And any or all of that activity would require Council approval?
That's right, because it's going to involve at some point the City 76 9/20/00 WHOLE COMMITTTEE - BILL 000535 committing to, you know, some kind of lease arrangement or service arrangement that obligates the City to pay the debt service over time. So we'll have to bring that back to City Council before financing that.
If we are to -- this capital requirement of $82 million, 40 this year and 40-plus next year for a 10-year period, plus the construction of the practice facility if we do not do a stadium today, is there any sense to continue with the discussion of the stadium in view of the request for the expenditure of this type of (inaudible)?
Well, I guess the question is, if you're asking us, if we're making a 10-year commitment to -- it's (inaudible) somewhat to what Councilman's question. Here we are being asked to approve the bond deal for 40 million this year and 40 million the following year, that's for a 10-year capital improvement, and the payment for the practice facility, that's a lot of money being expended in public funds. 77 9/20/00 WHOLE COMMITTTEE - BILL 000535 Would it be prudent to even continue the discussion of the possibility of constructing stadiums in light of this?
It's an either/or scenario. If we're able to conclude successfully negotiations over the new stadiums, we probably will have to spend some money on in order to -- maintenance at the Vet, but we wouldn't anticipate spending anything close to the $80 million, probably, you know, not close to half that, you know, because we would only be talking about remaining in the Vets Stadium for, you know, for a two-, three-, four-year period on the outside. But the $82 million is money that would have to be expended if in fact we're not going to build new stadiums and we have, you know, an obligation to make the facility available to the teams through the end of the lease term, which, I guess, is in 2011. And so it's an either/or scenario. It's not -- you know, to some extent, it's not trying to do both. But, you know, as the report details, there are things that we have to do now. We have 78 9/20/00 WHOLE COMMITTTEE - BILL 000535 some leaking problems that have to be corrected, we have, you know, issues in the stands that have to be addressed. Those things have to be addressed even if we're going to only be in the building for two or three more years.
So the maintenance for five years, that's the cost out of what you would target for a five-year period maybe?
That was actually at the beginning of an exercise to try to figure out if we're only going to be -- you know, if, in fact, there are going to be new stadiums, there are some kind of costs that we know we're going to incur over the short term and what might those be. That requires a lot of refinement before we would actually be in a position to mount some kind of capital program. Yesterday at the briefing, you know, people made the observation that it doesn't make any sense to undertake some of the more extensive repairs that might be fairly, you know, you know -- repairs that need to be made now if, in fact, you can't get the construction completed until 2003 and you're looking at abandoning the building 79 9/20/00 WHOLE COMMITTTEE - BILL 000535 in 2004, you know. And so if, in fact, there are going to be new stadiums and we're only going to be in occupancy of the building for a short period of time, we would have to develop alternative scenarios for, you know, for addressing those items of need. It may not be full-blown, you know, capital projects, you know, that we normally think about, where, you know, you strip off a whole roof and complete a new system. It may be something short of that, but that -- we have not begun yet to work that out in any detail. And what was passed out yesterday, I think, is a kind of planning, working document that helps us think through some of those kinds of issues and make decisions about, you know, how it is that we proceed at this point.
Okay. I had another question; I lost my train of thought. Oh, I know, I know. What -- how much have we spent annually on the maintenance of the Vets Stadium? Was it just minimum, maximum or based on need or (inaudible) before we decided what we would do? 80 9/20/00 WHOLE COMMITTTEE - BILL 000535
Councilwoman, Linda Berkowitz, City Budget Director. We have been spending approximately a million dollars on maintenance at the Vet annually. This report indicates that we need to be spending approximately $1.5 million over and above that. If going through and understanding all of Ewing Cole's assumptions that underlie its maintenance cost estimates, if we agree, then I think that it speaks for itself that we have not been spending sufficient funds on the operating side for preventive maintenance at the stadium.
But there also have been capital expenditures made on the property over the course of the years. I don't have the total amount but there have been items that we've funded out of the capital budget on an ongoing basis, and we can provide you with that list of expenditures that have been made over the last decade, if that would be --
(Inaudible, off-mic.) 81 9/20/00 WHOLE COMMITTTEE - BILL 000535
I thought we were spending approximately $6 million a year.
My recollection is, I think the first or second fiscal year of the Rendell administration, I thought there was a number of like $31 million out of PICA funding in either '92 or '93. When the City had no capital budget, we used PICA money.
And I seem to remember there was one year where it was like $30 million.
In the spring hearings, we got into a lot of those issues.
It would be very interesting to know what that (inaudible).
You're welcome. The Chair recognizes Councilman DiCicco.
Thank you, Madam President. The more I listen to what's going on in this room this morning, the more -- I don't want to say confused I am becoming, but I'm really beginning to wonder, and my questions are probably in line with where Councilman Kenney and Councilman Ortiz were going. We know from the report from the engineers and architects that immediate repairs are necessary to maintain the safety and the integrity of the Vet. And at minimum, should we build new stadiums, I guess that really is the biggest question here. If we're going to do it, we probably don't need to have all of these conversations, but we're not sure what we're doing, so we'll waste a lot of time, I guess, going through something that by November 30th, we'll wonder why we were here today to begin with. But my point is, if -- I want to 83 9/20/00 WHOLE COMMITTTEE - BILL 000535 fast-forward a minute. Councilman Ortiz said that we have a responsibility, and we all know we have a responsibility to the taxpayers of the City as to what investment we should make at the Vet. If we don't build two new stadiums, and based on the report that the architects and engineers have given us, we're talking $82-plus million to maintain the integrity of the Vet. What happens to the Vet, or the integrity of Vet, after ten years? Are we just putting somewhere in the vicinity of $100 million, less the annual capital maintenance that goes into it, which bring us probably to $116, $120 million over 10 years, only to have to do a new stadium, or stadiums, 10 years out? Don't we have a responsibility now for the citizens, not only today, but going forward? And I may not be here, some of us may be here, some of us may not. Don't we lay the groundwork today for what that investment should be going forward? I mean, you can take an old building and do repairs to it, the Band-Aid approach, or even extensive repairs. But at some point, that building will have to be taken down. I don't know 84 9/20/00 WHOLE COMMITTTEE - BILL 000535 enough maybe about stadiums to understand what their real life expectancy is, even with the best maintenance care. And at the end of years, is 5 somebody going to be back here -- someone will be 6 back here saying, We can't even fix it, it's 7 beyond maintenance, it's beyond another two 8 years. We have to build new stadiums. And at 9 that point, based on the way inflation is and 10 everything else that occurs, it will be even more expensive for the taxpayers to have to build two new stadiums. So I wonder if we really should just be saying, Let's hold off on this discussion until we know if we're going to do two new stadiums and then make the decision, do we do -- how much we need to keep the building up and running for the next two or three years. And if we're not, then we got to figure something else out.
The Administration -- you know, the Administration's position is that it supports the development of two new stadiums. We want to do stadiums if we can negotiate a deal that makes sense for the City. We, however, have an obligation to 85 9/20/00 WHOLE COMMITTTEE - BILL 000535 provide maintenance at the Vet. And what we're trying to do is put something in place in the event we don't -- we are not able to conclude two new stadium deals and have to spend money to renovate the Vet. You know, our goal is to have two new stadiums. I think the Administration's analysis is, you know, similar to the one you've just been through. We have a building that's, you know, marginally, you know, acceptable under today's standards, there are certain benefits the City could get from having a new facility; why spend $80 million now only to have something, you know, that is, you know, barely acceptable? And at the ends of 10 years, you know, what are we going to do? You know, we want new stadiums, but it may be that we can't reach an agreement with the teams and have an obligation to provide maintenance at the Vet, and it's that funding facility that we're trying to put in place now.
I guess my frustration is that after all of this discussion, we're still that far away that we don't know if we 86 9/20/00 WHOLE COMMITTTEE - BILL 000535 have a deal or at least close to a deal?
You're welcome. The Chair recognizes Councilman Kenney.
Thank you, Madam Chair. I would argue that you'll never get a deal if you're not talking. And I don't see how hurdling towards November 30th and the self-imposed deadlines that put on ourselves at the request of the Mayor and still have no 17 conversation going on at all about new stadia either at 12th and Vine or some other scenario, is never going to get us to that point. I would have never voted for the deal, for the practice facility deal, putting a November 30th deadline on ourselves if I had any inclination that the Mayor would unilaterally stop discussions based on what apparently are legitimate reasons -- in his mind legitimate 87 9/20/00 WHOLE COMMITTTEE - BILL 000535 reasons, but -- and not have any discussions between now and November 30th. Now we're hurdling towards this other scenario that Councilman DiCicco has just alluded to, and I think it's really insane. I mean, when I first -- my first car was a '67 Buick, and it had cancer on the floor boards and cancer in the trunk. And every time I rode in the rain, the car would fill up with water. Well, the last thing I was going to do with that car was put in a new transmission, a new radiator, new brakes, and, you know, a new muffler in there. I was going to get rid of the car. And the problem that we face with the Vet is, we've got to admit that it may be, most likely will be, a bad public investment to invest this amount of money into a building that's going to, at some point in the relative near future, be obsolete and unusable. I think that's probably a worse public policy investment than getting a stadia deal done now, whether it's 12th and Vine or someplace else. I mean, that's the frustration level, that we're going to wind up throwing good money 88 9/20/00 WHOLE COMMITTTEE - BILL 000535 after bad because we've self-imposed a deadline on ourselves of November 30th, and the Administration has self-imposed a moratorium on not talking to the teams to make a deal. I mean, we're at a self-fulfilling prophesy of defeat, and that's the frustration, and that's why, I guess, everybody's aggravated about being here and voting on this issue. I have a 12th and Vine question. When the Mayor announced the 12th and Vine site as his choice, it's been estimated -- and Mr. Hankowsky can tell me if I'm wrong -- to be approximately a $350 million premium on the cost of doing it, for example, at the north lot and the T warehouse. Is that really out of bounds, that number, as far as a premium number on what it would cost to do, for example, north lot, T warehouse? Will we be spending approximately $350 million more?
I'm going to do this a little bit off the top of my head. I would actually have to come back and sort of do the math. I don't think the number is quite that large. 89 9/20/00 WHOLE COMMITTTEE - BILL 000535
There's a differential, there's clearly a delta. But let me just -- and the reason I say it's not quite that large is because there would be some costs you'd incur in a, quote, north lot scenario, so you'd sort of subtract that, 'cause the number you're citing is sort of the studies number to do 12th and Vine. And it assumes, you know, you, quote, would save it all by abandoning that site; you wouldn't quite save it all. But it would be, you know, probably in a kind of the 250 to 350 range. That's without doing the math.
It's according to how you look at 250 million as substantial or not, but it's substantially more expensive.
I'll provide the facts; I won't characterize them, all right. 90 9/20/00 WHOLE COMMITTTEE - BILL 000535
The 12th and Vine site was also linked with the T warehouse site for football.
And the T warehouse for acquisition, as I understand it -- and this has been numbers that have been coming from either the State Senate or from PIDC -- is a 40 to $50 million number? Is that --
-- out of bounds? To acquire the T warehouse for football at 12th and Vine Street?
Yeah. You know, Councilman, my normal approach would be as responsive as I could be. But I'd be hesitant to put a number out here because there is a single property where we would have to have a single discussion with the property owner where we might end up in an adverse --
Tens of millions of 91 9/20/00 WHOLE COMMITTTEE - BILL 000535 dollars.
Is there any possibility -- and I would like a commitment today, if possible, either from the Chief of Staff or from PIDC -- that a 12th and Vine scenario, if it could be accomplished, would not include the possibility at all of a football facility being on the north lot in an effort to save the tens of millions of dollars necessary to acquire the T warehouse site? Because one of the things -- I mean, we've had different discussions in South Philadelphia, in Council President Verna's office and in DiCicco's office and the neighbors down there that are willing to perhaps look at the possibility of a football facility further away from their homes, south of Pattison Avenue, on a T warehouse site. What I need is some commitment from you, or at least some assurance, that there will not be the economic pressure on the north lot to save the money in acquiring the T warehouse in 92 9/20/00 WHOLE COMMITTTEE - BILL 000535 order to do 12th and Vine for baseball. Do you understand the question?
I thought that commitment was made in the spring. However, I would like that to. . .
I don't think we have any -- we're not exploring that, we have no 9 interest in doing that. I think we're just talking -- I mean, let us make sure we can say it with a categorical, just to be safe, but you're right. I mean, we -- I think we were clear even in the scenarios --
Even before we picked sites, if you recall, the committee, the site selection committee, when it made its recommendation to the Mayor, under kind of any scenario, quote/unquote, said the Eagles should be at T warehouse. So we'll just affirm that. I just --
Okay, I just wanted to make sure the record was clear that there would be no backslide to the economic pressures at 12th 93 9/20/00 WHOLE COMMITTTEE - BILL 000535 and Vine to allow, require the citizens who live adjacent to the north lot to put up with football, because it's a different scenario than a potential baseball facility there, if that could be worked out at all.
If 12th and Vine doesn't work, can't be done, it's not feasible, can't do a deal, is there a Plan B? Is there a Plan B scenario for the construction of a baseball facility and a football facility, whether it's north lot or somewhere else? Or are we just in an all or nothing 12th and Vine scenario?
I guess, again, to be responsive, the only scenario that has been working on has been the 12th and Vine scenario, and that's where we stopped, and I -- we have not -- there is not a Plan B in somebody's pocket, if that's the question.
I mean, if there's no Plan B, then I guess there is no Plan B, but I 94 9/20/00 WHOLE COMMITTTEE - BILL 000535 think, if you, self-impose this November 30th deadline, which we've done, and we only have 12th and Vine to discuss, which is Herculean at best -- and everybody admits that, even the people who support it admit that it's Herculean -- what happens November 30th? I mean, do we fix up my '67 Buick and go forward?
The only thing way I know to respond to that is that we anticipate that the PFT contracts, you know, that those issues will be resolved within the next -- within a very short time period, and that we'll be in a position to, you know, address the issues that you've raised.
The issues of doing the due diligence for 12th and Vine, but we are not aware of any other fall-back position.
And, you know, if there are other scenarios, you know, those will be developed at that point.
Has there been any discussion as to if we acquire the Eagles Novacare -- is it still Novacare?
The Eagles Novacare facility because of the November 30th deadline being missed, and the Eagles, over a period of a year or two or three, figure out another scenario in which to move their practice in and executive operations into another county or state, what we would, in fact, would do with that $30 million state-of-the-art sports complex? I'm sure Southern High School wouldn't mind it being there, but as a practical use --
No, there's not been a development of an alternative scenario. I mean, as we're all aware, it was left in the spring that should that occur, should we become the owners of it, that we would sit down with the Eagles and see if we could enter into a transaction that would then be subject to the consent of this body, that would provide for their long-term occupancy. That would be clearly the first choice, and so we have not developed it.
Okay, so the Eagles 96 9/20/00 WHOLE COMMITTTEE - BILL 000535 don't desire to enter into a long-term occupancy in an effort to protect their interest in potential recouping of wage tax dollars. And what is that number that -- the estimate number on the loss of wage tax on Eagles due to loss of duty days and the executive office moving into, for example, Delaware County?
If you could give me a second, I have it in my briefcase, so I don't know if you want to ask --
Councilman, I think in that vein, I think that is why City Council was attempting to require the Eagles to remain at the practice facility until the end of their contract with the stadium, but we're not there. And I would just like to remind the Administration, we heard today receiving about receiving a list in November, and November seems to be the magic date. And it may sound very far off, however, in looking at our stated meetings, I think there are only about six Council sessions left until the 97 9/20/00 WHOLE COMMITTTEE - BILL 000535 end of November, so I am urging the Administration to please get any and all information to Councilmembers in a very timely fashion so that we have the opportunity to review what is given to us. Councilman, while you're waiting, perhaps we could recognize --
I was, but I just saw Mr. Grillone sitting there, and I wanted to say one thing. I had the opportunity in the winter of this year to go to Busch Stadium in St. Louis. Busch Stadium is almost an exact replica of the Vet -- it's -- I think it's three or four years older than the Vet. And during the course of the life of Busch Stadium, the Busch family, which privately owned it, put in scores of millions of dollars in maintenance upkeep and upgrades. I think that if Greg and his staff had been given the resources that were appropriate 98 9/20/00 WHOLE COMMITTTEE - BILL 000535 over the past few administrations, this building would not be anywhere near the condition that it's in, and I don't want the condition of this building to be reflective at all of the effort and energy and desire that they have and their staff have to keep that place as nice as possible. They just haven't been given the resources, and I just wanted to make that publicly stated.
I think any of us would agree with you. While we're wait for Mr. Hankowsky to get the information, I would like to recognize Councilman Rizzo.
Thank you, Madam President. I think I need Mr. Hankowsky but I'll ask a question and maybe the Chief of Staff can answer it. I think we're all pretty much familiar with the funding scenarios with the State, City, and the teams. I'm curious in reference to a Plan B. Have either of the teams, especially the Phillies, since the 12th and Vine Street site appears to have a premium associated with it, have either of the teams come forward to say that 99 9/20/00 WHOLE COMMITTTEE - BILL 000535 they're willing to do more to make new stadiums work? I would hope that the teams would have a B Plan in the event that we can't come up with funding to provide these two new facilities. So I'd like to know from Mr. Hankowsky what the teams are doing or what they may be prepared to do in the event that there is a funding problem. And I hope he heard that question.
Mr. Hankowsky, did you hear the question, and are you prepared to respond?
Are the teams willing to come up with more money to make this deal work?
Well, I mean that's why we were meeting. That is to say, the discussions that were held were discussions where the parties were talking about what did each -- you know, what 100 9/20/00 WHOLE COMMITTTEE - BILL 000535 did people think was a reasonable investment by the teams in the prospective facilities. I wouldn't want to when -- I mean, you say more money more money than, I guess, what. But the teams -- and given we don't have concluded negotiations, all I can say is that both teams were clearly willing to make substantial investments in new facilities that would be their obligations. The teams -- neither team was looking for -- I should be clear about this. Neither team is looking for the public to 100 percent pay for the cost of the facility. They were both looking to provide a significant portion of those costs through their own resources.
But it appears to me that there's a crisis developing to get this done, and I would hope that the teams would be willing to do more -- and I don't know how much more -- to meet the timelines and the financing required to build two new stadiums. I look around this room today. This is a very important, I think, hearing for the teams. And I look around here, and I think I know most of 101 9/20/00 WHOLE COMMITTTEE - BILL 000535 the people involved in the issue, and I don't see anyone here from the Eagles -- well, McLaughlin is here from -- it's obvious. But I wish I would -- I wish I could -- I wish we would know more about the ability of the teams to make this deal work. 'Cause most of the people that I talk to resent the fact that government's going to pay for a new stadium for the Phillies and a new stadium for the Eagles, and, like you said, they are willing to make a substantial contribution, but is that contribution sufficient?
Well, that will only be known at the point where we can conclude the negotiations. I mean, you know, we are where we are.
Well, let's talk about, then, something we know. We know that there's a premium on the 12th and Vine Street location. Have the Phillies agreed to contribute more to make that site work?
Again, Councilman, I'm not trying to be evasive, 'cause that's not my -- you know that's not my style.
I know that's not 102 9/20/00 WHOLE COMMITTTEE - BILL 000535 your style.
But we're in the middle of negotiations. It would be -- it would probably be unfair to everybody involved to get particularly specific. Let me just say, though, that -- that the Phillies have been willing to do more than they -- than had been discussed in the past and to the degree that it in part covers the cost of the site, I mean, there has been movement by the Phillies forward. That's all -- I mean, that's the best that I can tell you, in terms of what they're prepared to do. Could I, just for the record answer -- though I'm not sure where Councilman Kenney went. The answer to the question of what would you lose if the Eagles ended their practice facility function in the City of Philadelphia, the one number that I was able to immediately get, you should lose immediately $1.5 million in wage taxes based on the duty day computation. There would be additional taxes you would lose because also in that function is their corporate offices, and so there's a certain computation that deals with the 103 9/20/00 WHOLE COMMITTTEE - BILL 000535 BPT and how that's calculated when you move, quote, your business offices out of, and they would have the right to do that. And there are also -- what I was dealing with was duty days based on players' salaries, which you actually can know because of the salary cap, at least that's a public number. There's also wage taxes related to management, employees, and others. I think our last calculation was, you'd be somewhere around a $2.5 million gross impact immediately -- in other words, kind of the calendar 2000, and that number would escalate every year as the salaries increase, the loss. I'm sorry, Councilman, I just wanted to. . .
You're welcome. The Chair recognizes Councilman Goode.
Thank you, Madam President. I'm finding this discussion kind of interesting this morning in the fact that we are 104 9/20/00 WHOLE COMMITTTEE - BILL 000535 isolating the issues ourselves in discussing only $40 million of the $162 million capital budget, and the fact that in that discussion, we would discuss the issue of rehab versus new construction. We take on issues in terms of development related to rehab versus new construction all the time, but we discuss the rehab, spending millions of dollars on rehab on houses for low- and moderate-income individuals. We don't discuss doing only new construction, rather than doing rehab. We make a conscious financial decision because of financial considerations to rehab houses for low- and moderate-income people. But here we're making an argument, just new construction. Here we're making an argument over $42 million of $162 million capital budget authorization, when, in fact, I believe we're going to report this bill out of committee with a favorable recommendation. So while we're here spending time trying to determine the Mayor's agenda, I'd like to make a request to the Administration that we not necessarily engage in stadium discussions 105 9/20/00 WHOLE COMMITTTEE - BILL 000535 right after the teachers' contract, but that we move on to blight removal first and look out for interests of low- and moderate-income individuals and look at what we're going to do in terms of new construction versus rehabbing for those people. Thank you very much.
You're welcome. The Chair recognizes Councilman Nutter. Is he in the room?
Thank you, Madam Chair. I'd like to talk a little bit during this time actually about the report and the documents that we received both Monday, the day before, and then Tuesday, the shorter sheet with the different breakdowns of --
Councilman Nutter, I'm sorry to interrupt you, but apparently, we haven't worked out the kinks on this sound equipment. Could you talk directly into the mic. so that we could all hear you. I think the stenographer is even having a hard time hearing you. 106 9/20/00 WHOLE COMMITTTEE - BILL 000535
Let the record reflect the President made a funny. Thank you, Madam President, I'll try to do this. Now I know how Richard Nixon's secretary felt. I'd like to talk about the report in the big binder as well as the stapled smaller report with the five-year and ten-year components to it. I think in yesterday's briefing, Councilman Clarke had raised an issue about this item A 14, which was -- which is the replace field turf, (inaudible) tracks, and a host of other things, which are probably more detailed in the report. The 10-year column says $6 million, the 5-year column says $3 million. I'm assuming that we're not getting less turf covering. So what is the difference? And can you tell me why we only got five years out of the turf that we presently have? And think the turf that 107 9/20/00 WHOLE COMMITTTEE - BILL 000535 it replaced had been on the field longer.
My understanding from both the management and Greg Grillone from the stadium and also from our consultants is that the turf has a useful life of only about seven years, six to seven years of useful life. So what you're really looking at is replacing that turf every six years or seven years. The difference is, in the 5-year plan, it's due to be replaced. That $3 million represents replacement of it. Once -- if we're there over five years or ten years, that would be two replacements. So that's why it's $6 million in the 10-year column.
And you have it on here twice because you're anticipating doing it at least twice during --
Right, for that term. 108 9/20/00 WHOLE COMMITTTEE - BILL 000535
Okay. With all of the numbers that are in these various reports, is there -- how do you -- when we have a five-year plan here, although there's been some discussion about only wanting to be in the Vet as long as it takes to get the stadium deals done, which could have at least potentially one of the parties who doesn't have a site dispute problem out of the Vet in potentially an even shorter period of time, it could be three years, are all of these items viewed as capital eligible because of the -- if there's a capital rule about it's got to be at least a five-year life span?
We're reviewing that now, trying to get clarification on which of the items can be funded out of the capital budget and which can't and how that rule applies in this particular case.
The work that we've been doing, and I may have misspoke earlier on the eight-year investment that we talked about back in the spring in terms of capital dollars into Veterans Stadium. I think when Councilwoman Tasco was discussing that issue, I may have said upwards 109 9/20/00 WHOLE COMMITTTEE - BILL 000535 of $80 million. I now think my recollection now is it may have been 64. For some reason, that number seems to be in my mind. But in any event, what kind of warranty do we get with any of this work? I mean, has anyone made any determination, I guess -- if we had been making the kind of capital investment that we've been making in Veterans Stadium over the past eight years, as -- whether it's been sufficient or not, you know, could be debated for the ages, but with the fairly sizeable dollars over a relatively short period of time, why is the place in the condition that it is in?
The best way I can answer that is I believe that the major capital investments that had been put into Vets Stadium over the past, say, five to seven years, I think part of that work had to do with the sprinklering of the facility, which initially did not have a sprinkler system and did have to have that added as a result of the high-rise sprinkler code in the Meridian fire years ago. So that was -- that was a whole system put into the building that was never there initially, and that was a major 110 9/20/00 WHOLE COMMITTTEE - BILL 000535 capital investment. The work outlined in the report, as Linda Berkowitz said earlier, covers a lot of systems that had been there since the building was originally built and are at the end of their useful life. I mean, your major HVAC system may have a 20- to 25-year useful life, and we've gotten to that point in time. If the discussion goes forward on the new stadiums site and we're told that it looks like that's the direction we're going to go, naturally, we're going to go look at even the five-year plan to see what can be pared down off of that to get us through to the point time that the new stadium will be up and operational. I look at the column listed as "Immediate Requirements," that $31 million column, as something that is -- that we should concentrate on and even possibly be able to pare that down somewhat if, in fact, the stadium goes forward and we're not there five years from now. So as both the Chief of Staff and the Budget Director said earlier, this is really a working document by which we need to use as a 111 9/20/00 WHOLE COMMITTTEE - BILL 000535 starting point and revise it based on the direction we go in with the new stadium.
Let's go back to the financial side of this transaction for a second. What's the total amount of outstanding debt on Veterans Stadium?
What's the total amount of the 30-year cost? I'm assuming most of our GO obligations are 30 years?
Let's say this transaction goes forward, we borrow the money, you put the 40 million in, three to four years from now, Veterans Stadium is demolished. A couple questions. One, what is the debt service on the $40 million?
I haven't done that actual calculation since it's basically the sizing of the debt, the entire bond financing. When we do the sizing, I'll get that information to you. 112 9/20/00 WHOLE COMMITTTEE - BILL 000535
Okay. And along with that, could you tell me what the total costs of the $40 million in borrowed funds will be over that 30-year period?
My concern, naturally, is that -- and we will always run this risk. Again, the question is, how much we actually put in the Vet. We will borrow money now; we will make an investment; three or four years from now, hopefully, we will demolish the Vet and continue to have to pay for Vet repairs 15 years later. 16
So you want to know 17 exactly what the true value of the cost of the 18 bond $40 million is over the next 30 years to the 19 City? 20
Let's talk about 23 the question. Presently, the question is, as you 24 have laid out, which is an attachment to your 25 testimony on . Am I correct, though, in 113 9/20/00 WHOLE COMMITTTEE - BILL 000535 reading the bill, that there is no question in this bill?
Come on up and join the party. Everybody else is having a good time. (Laughter.) (Witness comes forward.)
Good morning. I'm Paul Rucci, from the City Solicitor's Office. The ballot question is not usually a part of the loan authorization ordinance. Actually, under the Election Code, the formation of question is the duty of the City Commissioners, but the Council prepares the question, in fact.
Council, as in City Council? Or counsel as in you, counsel?
Yes, City Council. After the enactment of the ordinance, the Clerk of council sends the question to the City 114 9/20/00 WHOLE COMMITTTEE - BILL 000535 Commissioners.
And the in response to a question that I asked in the first go-round, I asked the Treasurer about the wording of the question and the very general nature of the categories, and I am certainly familiar with these questions from the past, and they usually do have fairly broad categories, and the voters, I think, generally support these questions in the 70-plus or so percent range, and it's kind of the in the realm of who could be against rec centers, libraries and a wide variety of municipal facilities. Was there any feeling expressed or concern that in this particular case, given the nature of one of the items in this question, which I think, as we all know, if that item wasn't in this particular loan authorization, this hearing would have probably been over about two hours and ten minutes ago. Did anyone think that maybe there should be some specific mention of an item of such great concern to the populace that the notion that this question, and given the complex and controversial nature of one of the items, do 115 9/20/00 WHOLE COMMITTTEE - BILL 000535 you think that there is legitimacy in saying that we are asking the voters to approve something of which they have virtually no knowledge?
Well, Councilman, how to characterize the project is a judgment call initially of the Finance Department when it submits the loan authorization ordinance. Section 9 2 contains the various allocations. About five or six years ago, an effort was made to streamline the categories of projects that would be detailed in these loan authorization ordinances. It is entirely within Council's prerogative, as the legislative body, to formulate Section 2 of the ordinance and to determine a particular identification of categories. What was introduced in Bill 000535 does not seem to me to be a departure from common practice of the past. I cannot tell you whether anyone in the Finance Department considered that Veterans Stadium improvements should be somehow highlighted.
Actually, in one of its components, it is certainly significant and somewhat extraordinary. I think I asked the 116 9/20/00 WHOLE COMMITTTEE - BILL 000535 question earlier, is there any recollection in recent times of such a sizeable project -- one project taking percent of the authorization 5 solely? I mean, maybe the Convention Center? 6
Well, I -- I don't want to 7 stray too far, but in the distant past, we used -- 8
I don't want to stray too 11 far from the present. But in the distant past, 12 when all we had was general obligation bonds, we 13 would have included high-priced airport or water 14 or gas projects in this type of questioning. 15 But in the last 25 years, we've had 16 revenue bonds, and as you know, we often come to 17 City Council with ordinances asking for hundreds 18 of millions of dollars for those enterprise funds 19 capital projects. So that we've kind of taken the 20 big stuff out of the general obligation category. 21
But if I understood 22 your earlier statement, one, there's nothing to 23 prevent some mention or separate detail that 24 Veterans Stadium is a component of this; or for 25 that matter, based on, I think what I understood 117 9/20/00 WHOLE COMMITTTEE - BILL 000535 you to say in terms of the formulation of the question, there would be nothing to prevent an entirely separate question on that particular issue. Is that correct?
Yes. At yesterday's briefing, I did tell you that my understanding of the law is that depending upon the type of ordinance that Council enacts, its statement of the amounts to be borrowed and the purposes on which it is to be spent, it would it quite possible to cause two separate ballot questions to go on the ballot, because each of them would be a separate loan authorization by the Council. That's a matter of the structure of the legislative act.
So based on what you're saying, you could have one question that said, Should the city borrow $122,135,000 for all of those five categories? and you could have a second question that says, Should the City borrow $40 million specifically for Veterans Stadium renovations to be used by professional sport teams?