COUNCIL OF THE CITY OF PHILADELPHIA CONTINUED PUBLIC HEARING COMMITTEE ON RULES - - - Room 696, City Hall Philadelphia, Pennsylvania Thursday, December 12, 2002 1:50 p.m. - - - BILL 020737 - an ordinance adopting an amendment to the Articles of Incorporation of the Old City Special Services District... BILL 020738, an ordinance to amend the Philadelphia Zoning Maps by changing the zoning designations of certain areas of land located within an area bounded by Snyder Avenue, Christopher Columbus Boulevard, Porter Street, Weccacoe Avenue and Vandalia Avenue. BILL 020684 - An ordinance to amend the Philadelphia Zoning Maps by changing the zoning designations of certain areas of land located within an area bounded by Roosevelt Boulevard, Grant Avenue and Blue Grass Road. - - - PRESENT: COUNCILMAN JAMES KENNEY, Chair COUNCIL PRESIDENT ANNA C. VERNA COUNCILMAN DARRELL CLARKE COUNCILMAN DAVID COHEN COUNCILMAN FRANK DICICCO COUNCILMAN MICHAEL NUTTER COUNCILMAN BRIAN O'NEILL COUNCILMAN ANGEL ORTIZ - - - 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 I N D E X BILL 020738 PAGE JAMES CUORATO, Director of Commerce ......... COUNCILMAN FRANK DICICCO .................... 9 3 12/12/02 - RULES - BILL 020738
Good afternoon, ladies and gentlemen. This is a reconvening of a recessed hearing of the Committee on Rules on Bill 5 No. 020738. The Chair will now recognize Commerce Director Cuorato for additional testimony. Please identify yourself for the record.
Thank you, Mr. Chairman. Good afternoon, Mr. Chairman, Members of Council, my name is James Cuorato and I'm the City Representative and Director of Commerce for the City of Philadelphia. As the Chairman said, we would like to supplement our testimony and the record on Bill No. 15 020738 just to reflect the developments of the last day or so. Let me just begin by speaking for all of the parties involved in this transaction, and there have been quite a few, and express our appreciation for the patience that has been shown by City Council in allowing us the time to work this transaction out and your willingness to accommodate our schedule. And I am very pleased to be able to announce to you that we have reached an agreement that I believe meets the goals and interests of all parties. 4 12/12/02 - RULES - BILL 020738 What we have done is responded to the issues that were raised here specifically by Members of City Council at the hearing.
Excuse me. I'm sorry. I would respectfully ask, as the signs on walls in the hallway by the door say, to please turn off or put on vibrate your cell phones and pagers. It is extremely confusing and annoying to continually hear these things going off while people are testifying. I appreciate your cooperation. Sorry for the interruption, Mr. Cuorato. Please proceed.
What we have done, Mr. Chairman and Members of Council, is responded to the issues that have been raised at the public hearing and worked through those issues. It is admittedly a very complex transaction that involves, as I said, numerous parties, but I can report to you this afternoon that we have reached an agreement that will satisfy all parties' interests and hopefully enable these projects to proceed. The goal that we had was to ensure that the port had access to land to expand in South Philadelphia. At the same time, I stressed the 5 12/12/02 - RULES - BILL 020738 importance of being able to rezone the entire CSX site in order to enable the full shopping complex to be built with Ikea, Lowes, and Best Buy as the anchors. We turned our attention to the issues of enabling port expansion, and there really are two components to that process. One represents dollars issues, if you will, and making dollars available to the PRPA in order to enable them to acquire these properties. As a corollary of that, it was establishing a price by which those properties would be acquired, and there were a lot of discussions about fair market value and how to determine that price. And then finally, a willingness to convey those properties to the port on the part of CSX and Conrail. What I would like to do, with the Chair's permission, is just provide a very brief, admittedly non-legal summary of the agreement. And then certainly if Members of Council have any questions about the specifics, there are people here who can answer those questions.
The agreement will be submitted for the record, but please proceed with 6 12/12/02 - RULES - BILL 020738 that overview.
The situation that we are in with this agreement does give us the proverbial win/win in that it achieves the mutually exclusive goals that we talked about in the prior portion of this hearing which is to say that the port will have the ability to expand in the area of Packer Marine Terminal, will have the resources to acquire the parcels that they need, and a process has been put in place to make that happen. In addition, the CSX site, with the amendment that we have requested and pending this Council's approval, will give us the ability Ikea and over 1,000 new jobs to Philadelphia. So it is a very, very positive development for which we are very grateful. The parties have basically reached an agreement that provides for the following: An approximate valuation of the properties in which the port is interested in, in the packer Avenue area was determined to be $7 million or in the $7.5-million range. In order to allow some leeway, we set a goal of finding a way to make $7.5 million available to the port. Those dollars have been made available 7 12/12/02 - RULES - BILL 020738 and they will come from two sources: $5 million will come in the form of credits from the Port Development Fund established as part of the Conrail CSX Norfolk Southern transaction that was set up in 1997. As had been previously testified, that fund was originally approximately $15 million. Approximately of it was used as part of the 9 Kvaerner transaction. That remaining $5 million 10 will be devoted to this transaction and will be made available to PRPA in the form of credits since Conrail will be selling parcels land to the port. The other $2.5 million will be provided in the form of cash or a letter of credit by the developer of the CSX site, the Goldenberg Group. So the funding issues have been put in place and that enables the port to have access to the resources that they need. We spent a lot of time and a lot of hours discussing the whole process of fair market value and determining the price by which these properties get conveyed. There is a process that is in place. It basically involves each side hiring an appraiser. If they can't reach an agreement, a third independent appraiser is hired. But ultimately, and I think this is really the key to 8 12/12/02 - RULES - BILL 020738 the agreement, the PRPA would have the right to condemn any of these properties that they need. The condemnation process would ultimately set the value. And CSX and Conrail have agreed not to contest such condemnation except in the area of valuation. So the bottom line of that provision is that PRPA will have access to these properties. Although we've put processes in place to determine value if it ultimately gets to condemnation, the condemnation process will set the value but CSX and Conrail will not oppose the condemnation on its merits. So what the agreement does is give the port the resources that it needs and give them accessibility to these parcels. The most immediate acquisition that the port will look at is Pier 124. That very likely will be a condemnation proceeding, but again, CSX will not contest that condemnation. It will be strictly a valuation process and the port will be able to move forward with its plans for growth in South Philadelphia. So that is a very brief summary. I can tell you on behalf of the Administration, we are extremely pleased that all parties were able to work these issues out. I once again will thank Council 9 12/12/02 - RULES - BILL 020738 for its patience. I will especially thank Councilman DiCicco for his determination in pushing this to a conclusion, and it is a very favorable conclusion for all parties.
Thank you very much, Mr. Cuorato, for your testimony. I'm glad the outcome is what it is. Does anyone have any questions for Mr. Cuorato? (No response.)
Seeing none, I would recognize Councilman DiCicco at the witness table for the purposes for making comment and also for formally offering the amendment.
Frank DiCicco, Councilman for the 1st District of Philadelphia. Good afternoon, everyone. And thank you, Mr. Chairman for the opportunity to speak to this Council. A little over a year ago, Ikea came to Philadelphia looking for a site in which to open up a store. And they were determined from that day 10 12/12/02 - RULES - BILL 020738 going forward to find a site that was suitable in the City of Philadelphia. The first site they looked at was at Delaware and Reed Streets. After a few weeks they found out that the site was not available. There were commitments and leases that had that site tied up for the next to years. 8 The second site that they were desiring to build 9 their facility on was the former incinerator site at 10 Delaware and Spring Garden. After a two or 11 three-month period trying to negotiate with the EPA 12 and other environmental and zoning issues, they 13 found and realized that they would not be able to do 14 the development at that site. Subsequent to that, 15 and as fate would have it, a developer who is in 16 this room today, Mr. Ken Goldenberg was looking to 17 do a land deal for a parcel known as the CSX Yard at 18 the intersection of Delaware and Snyder Avenue. It 19 is the 44-acre site that we've all been hearing 20 about, listening to testimony about for the last few weeks. It would have been very easy for me at that time to do what many people were suggesting I should do, which was to introduce a bill that would have changed the zoning classification for the CSX 11 12/12/02 - RULES - BILL 020738 Yard from industrial use to commercial. And that would have obviously provided the opportunity for Ikea to come to Philadelphia. What was more important in my mind or just as important in my mind as bringing Ikea and the jobs and the recognition that Ikea will bring to Philadelphia as a major retail destination was a preservation, protection, and the potential growth of the port-related jobs and the activities that go on in our port. And by chance, I guess, at the same time almost simultaneous to that, the Philadelphia Port with the help of State Representative Keller and others became designated as a strategic military port. And that in my mind convinced me that we needed to do everything we had to do to preserve or enhance the ability for the Philadelphia Regional Port Authority to continue to do the job that it has been commissioned to do, and that is to create and preserve port jobs in Philadelphia. So I would just like to take this time to recognize the many people who have spent tireless hours over the last several weeks, as recent as maybe 45 minutes ago, to getting the deal, if you will, signed so that everyone's interests are 12 12/12/02 - RULES - BILL 020738 protected. And bear with me; it's a rather lengthy list, but I would be remiss if I did not take this opportunity to thank all the individuals who participated in this, I think, major success story for the City of Philadelphia. Brian Preskey, Chairman of the Board of Directors of the Philadelphia Regional Port Authority who is not here today; to my right, just to the right of Jim Cuorato, is Jamie McDermott, the Executive Director of the Philadelphia Regional Port Authority. Right behind me on the left, Bob Blackburn, a Deputy Executive Director, Philadelphia Regional Port Authority. Bill McLaughlin, the Director of Government Affairs for the Philadelphia Regional Port Authority. Peter Tucci, he had to leave. Peter Tucci is the Council for Reed Smith who represents the interests of the Philadelphia Region Port Authority who has done a magnificent job, constantly on the phone day in and day out. This has been a 7-day-a-week, 24-hour day operation. Sal Candelaria who is my neighbor who explained to you in testimony that his house was too small to get regular furniture in and he has to Ikea furniture and was hoping that this deal would happen so he can 13 12/12/02 - RULES - BILL 020738 at least get his furniture in and out of his house.
But more importantly, Sal is a gentleman who represents the International Longshoremen's Association Local 1291 whose men and women, their jobs dependent on us coming to a reasonable conclusion to make the deal work for everyone's interest. And I want to thank Sal for sending me a letter a few months ago urging me to keep the CSX yard, keep it zoned industrial until we can assure that his members and future members of Local 1291 will have jobs and real jobs that will provide economic benefits to all of his employees and help the City of Philadelphia grow the port. State Representative Bill Keller whose district encompasses the area where the CSX yard is and the other sites that the Commerce Director Jim Cuorato spoke to. Council President Anna C. Verna. A lot of the attention is on me because of the CSX Yard is in the 1st Councilmanic District. But the other parcels of land that we have spoken about, the two piers, the Whiskey Yard, the Savage Yard are in Council President Verna's district as well, and she has played an integral part in this proceeding, 14 12/12/02 - RULES - BILL 020738 although she may not have gotten the limelight or the attention that I did.
You didn't need any, I know. Sometimes I wonder if I need it. But anyway, she played an integral part in all of that. Eddie Hanlan is here today, he's port Liaison for Senator Fumo on the Board for the Philadelphia Regional Port Authority. Senator Fumo is not here. I spoke with him about an hour ago. I can't -- and I know a lot of people draw different conclusions about Senator Fumo, but I can say this: Not only is he representing the district which has the Whiskey Yard and all the piers and the CSX yard, but his invaluable support and guidance to me and to the Regional Port Authority through this whole process, I don't think we really could have gotten it done without him. He understands the needs of the port. I believe he's one of the folks who several years back, back in 1989 or so, was the creator of the Philadelphia Regional Port Authority. He needed to be in the deal because he understood the intricacies 15 12/12/02 - RULES - BILL 020738 and the importance of what it is we were trying to accomplish. I can't thank him enough for his support. Councilman Jim Kenney -- we're all from the same neighborhood in South Philadelphia -- who chairs this committee along with the Council President for his willingness and patience and patience of this Rules Committee as well as the patience of all of my colleagues in letting me do what I thought was the right thing to do, following my lead, giving me the respect that at the end of the day, my lead, my involvement in this whole process would lead to a fair conclusion to everyone. So I want to thank you, Councilman, as well. Jim Cuorato who spoke very eloquently, in brief, on the details of the deal for his support. Mayor Street for his support. We've had some conversations on this. To Pat Smith who is the Regional Manager for Ikea who has -- I wonder sometimes after listening to all the things he had to go through why he decided that it was still in their interest to stay here, but I think I know why. Ikea anticipates 16 12/12/02 - RULES - BILL 020738 anywhere between 80 and $100 million in sales. They're a fine company. They're going to be involved in a community reinvestment. We're still working on some of those issues, but they will be fair and equitable community reinvestments for all Philadelphians to enjoy. " I thought the man was going to have a heart attack. But thank you, Ken, for your willingness to stick it out with us and for your willingness to make this kind of investment in Philadelphia, understanding all the hurdles that you have to go through sometimes to get these things done. Lenny Clare who is sitting in the back. Carl Primavera who is sitting to my left next to Ken Goldenberg who was the lead counsel for a number of the entities, CSX, the Goldenberg Group, and Ikea. m. and started up this morning somewhere around 7:30 8:00, and we've been going at it all day. Thank you, Carl, for working with us. To Kevin Hurley and Rick Hood from CSX 17 12/12/02 - RULES - BILL 020738 who are not here with us today. A lot of this stuff which really took a lot more time today was because many of the people I'm mentioning were not in Philadelphia. So there were phone calls, there were faxes and e-mails going back as recent as the last half hour, so that took a little bit more time than we had hoped for. To John Einright (ph) from Conrail and the Norfolk Southern staff, because there were three rail entities involved in this whole process. I want to thank them all for their cooperation. And, again, I want to thank this Council for its patience and understanding and allowing me and affording me the opportunity to work with all of the people I mentioned here today. And I apologize if I left anyone out, but I had a few people look at this list and I think we covered just about everone that we needed to cover. Thank you for the opportunity to bring Ikea to the Philadelphia and protect the port of Philadelphia and the jobs that are there.
And hopefully, and I'm more than confident, the strategic port designation and all the other things and hopefully we can work out a deal with Ikea to 18 12/12/02 - RULES - BILL 020738 bring their product through our port as well, that we're create real jobs for Philadelphians that will be represented by every group in the City of Philadelphia. And if I'm not mistaken, Mr. Candelaria, your local is represented by about a 60 percent minority representation. And some of the things we heard in there today do not apply to Local 1291. So they are a Philadelphia local and they are representative of all Philadelphians. Thank you again for this opportunity. Congratulations to all of us. )
Thank you, Councilman DiCicco. As everyone knows that's on the committee here, the amendment to Bill 020738 has been circulated, and I would suspect that you'd like to use this opportunity to formally introduce that amendment.
I'm submitting amendment to the original Bill 020738. I'm offering an amendment to the original bill, Bill 020738. Basically what the amendment does is take the entire 44-plus acres of land known as the CSX Yard at the 19 12/12/02 - RULES - BILL 020738 intersection of Delaware and Snyder and will change the zoning from industrial to commercial use.
That amendment has been circulated to all Members of the Committee. I'd like to thank you for your comments and for your hard work. And everyone who was mentioned here at the table did a terrific job. And the one thing I would like to say as the Chairman of this Committee, as I think this is a perfect example of this Council when left alone, when not interfered with, have the ability to do their job, to discuss public policy issues in a sensible reasonable way, to exchange views, to understand each other, and to work hard to balance everyone's interests. This is a day that I'm very proud to be a member of this body. It's not often in the last few years that that's been the case, but I think today in watching the process that we've gone through uninterrupted and allowing us to do the job we're elected to do makes me proud to be here today. And I thank you all for your cooperation in that effort.
Likewise. Thank you. 20 12/12/02 - RULES - BILL 020738 (Applause.)
Are there any questions for Councilman DiCicco? Council President Verna.
This is not a question. I simply want to say to Councilman DiCicco, though he's thanking Members of Council, we certainly want to applaud you for your time, effort, energy, and I know you's received a lot of aggravation in this process. But I'm sure it's well worth it because we're now going to see Ikea coming to Philadelphia. And I personally want to thank you for being as patient as you were during this entire matter. And we have seen something positive happen today. And I applaud you for that and everybody that worked with you.
Are there any other comments or any requests for additional testimony? (No response.)
Seeing none. That will conclude the public hearing of the Rules 21 12/12/02 - RULES - BILL 020738 Committee. We will now convene a public meeting. - - - 22 COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC MEETING COMMITTEE ON RULES - - - December 12, 2002 - - - Public Meeting conducted by the Committee on Rules, held in Room 696, City Hall, Philadelphia, Pennsylvania, on the above date, to consider action on the following: BILLS 020684, 020737, 020738. - - - PRESENT: COUNCILMAN JAMES KENNEY, Chair COUNCIL PRESIDENT ANNA C. VERNA COUNCILMAN DARRELL CLARKE COUNCILMAN DAVID COHEN COUNCILMAN FRANK DICICCO COUNCILMAN MICHAEL NUTTER COUNCILMAN BRIAN O'NEILL COUNCILMAN ANGEL ORTIZ - - - 23 12/12/02 - RULES - PUBLIC MEETING
The Chair recognizes Councilmember DiCicco for a motion to approve the amendment to Bill No. 020738 which he has offered.
Thank you, Mr. Chairman. I propose an amendment to Bill No. 7 020738. I believe all members of this Committee have received a copy of that amendment. (Duly seconded.)
There are none opposed. The amendment to Bill No. 020738 has been approved. The Chair recognizes Councilman DiCicco for a motion on the amended Bill 020738.
Thank you, Mr. Chairman. I move that Bill No. 020738, as amended, be reported out of this Committee with a favorable recommendation and a further recommendation that the Rules of Council be suspended so as to permit first reading this day of Bill NO. 020738. (Duly seconded.)
It's been moved and 24 12/12/02 - RULES - PUBLIC MEETING seconded. All in favor? (Aye.)
There are none opposed. Bill No. 020738, as amended, will be reported out of the Committee favorably, and a request will be made for rules suspension to allow for first reading this day at our conclusion of our Council Session. The Chair recognizes Councilmember DiCicco for a motion on Bill 020737.
Thank you, Mr. Chairman. I move that Bill No. 020737 be reported out of this committee with a favorable recommendation and a further recommendation that the Rules of Council be suspended so as to permit first reading this day in City Council. (Duly seconded.)
There are none opposed. Bill No. 020737 reported out of this 25 12/12/02 - RULES - PUBLIC MEETING Committee with a favorable recommendation and a request will be made for Rules suspension to allow for first reading at our next Council Session. The Chair recognizes Councilmember O'Neill for a motion on Bill No. 020684.
Thank you, Mr. Chairman. I move that Bill No. 020684 be reported out of this Committee with a favorable recommendation and rules suspension to allow first reading when we get back in session. (Duly seconded.)
Bill No. 020784 will be reported out of the Committee with a favorable recommendation and request will be made for Rules suspension to allow for first reading at our next Council Session. That concludes the business of the Rules Committee. Thank God. I appreciate all your efforts. Thank you very much. (Council adjourned at 2:20 p.m.) C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of December 12, 2002, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE ON RULES ___________________________ Lisa C. Bradley, RPR and Notary Public