I can.
My testimony here really builds upon what you just heard architecturally.
Eric described the physical constraints that come from the 60-foot height limit.
And my testimony is to take it one step further and say, what does that mean from an economic and market perspective?
And I've really looked at three things that speak to that.
The first is that there is discussion about construction techniques.
And I think Mr. Labor referred earlier to 5 over 2 or 4 over 2, the idea that you need some steel or concrete podium.
The idea that you need some steel or concrete podium for structure, and then you can build relatively inexpensive wood framed on top of it.
So the limitation a 60-foot height limit would put on it would be to reduce effectively a seven-story building down to a six-story building.
So what the applicant is proposing is a five over two, five wood frame over two concrete or steel.
And the height limitation reduces that to a four over two.
So the question is, are there any four over twos?
If that's a viable or advantageous configuration, you would expect to see examples of buildings that are built like that for wood frame over to steel or concrete.
And so my team looked at buildings that had been built in the city over the last 10 years to see if we could identify any buildings that matched that configuration.
We went to COSTAR, which is the data source for commercial buildings, including apartment buildings, and identified all recently constructed buildings.
We found 35 six-story buildings built in the city over the last 10 years.
None of them are four over two.
So all the buildings that were built have a different configuration, either five over one.
And so we could not identify any other building that would be configured the way that a 60-foot limit would require this building to be built.
That's the first point.
The second point concerns ceiling height.
So one way of getting in a seven-story would be to reduce the ceiling heights
and use her testimony on the ability to do that
with using very expensive concrete construction throughout.
Another idea is, well, why not just reduce the ceiling height,
and therefore you could cram in an extra floor that way?
And obviously you can do that from an architectural perspective.
If you could have lower ceiling height, but these buildings exist in a marketplace, you
have to be able to rent them.
And a nine-foot ceiling is really a standard ceiling height.
So if you built a lower ceiling building, you couldn't rent it for the same amount of
money, which means their financials go poorly.
So we also looked around to identify recently constructed buildings in the vicinity, and
And all of them had either 9-foot ceilings or 10-foot ceilings.
So that's just speaking to what the market demands.
And the market dictates essentially what you can rent it for.
And what you can rent it for determines how much you can afford to build.
And these points really feed into the final analysis that we did, which is a financial feasibility analysis.
So if you do reduce the number of units that are permissible,
essentially by reducing down to 60 feet you're cutting down the number of units so what does
that mean financially the and we looked at two scenarios one in which we simply lop off the top
floor and lose the 26 units that are up there but keep everything else the same the one-to-one
parking and the rest of the units and removing units reducing the size of the building obviously
reduces how much it costs to build the building
because you're not building as large a structure,
but it also reduces the
revenue potential. And because
there are fixed costs that you
have to incur,
dealing with essentially the
two floors of podium,
the rock outcropping, the need to
preserve the
facade, that
makes this building expensive to build
before you even get to the first unit.
So the revenue goes down a lot
faster than the cost
goes down, which in a technical term messes up your financials. So the current proposal
has a series of financial metrics that are important for investors to realize, otherwise
they're just not going to fund the project. For example, the internal rate return, which is one
of the metrics, is currently 21.4%. It would reduce down to 15.5% if you got rid of the top
floor and the yield on cost goes from seven percent to six point two percent uh we ran another
scenario in which uh we reduced the parking ratio we tried to shave some more costs basically build
a five over one building um but that also uh because the reduced unit count doesn't work
But that also, because of reduced unit count, doesn't work.
The financials are a little bit better.
It goes down to 69% internal rate of return, 6.4% yield on cost.
But those are still significantly lower.
My understanding, in speaking with Mr. O'Day at JLL, which is a consultancy brokerage,
that current market conditions require 7% yield on cost
in order to get financing, this is well below that.
So the conclusion from all of that
is that by shrinking the building down to 60 feet,
you essentially render the building impossible to build
from a financial point of view.
Thank you, Dr. Angelides.
Just for purposes of clarification,
Is it your belief that anything less than a two-story podium at this site is viable?
From an architectural perspective, it certainly doesn't seem that way.
And financially?
Less, no.
But you're not stating that 3 over 1, 4 over 1, or 5 over 1 does not exist in Philadelphia,
just that it's not applicable to this site, correct?
That's correct.
Thank you.
Nothing further from Dr. Angelaitis at this time, Mr. Chairman and members of the board.
Thank you.
Do you have anyone else?
We have JLL only if the board has any questions.
All of us are available for questions.
I know that there are members of the general public who want to speak.
Right, right.
So thank you.
I'll hold concluding remarks if I may.
So what I'm going to do is open it up for discussion, unless there's anybody from the board that would want to have a question.
Obviously, if we get through the discussion, we're probably not going to vote anyway.
I'm going to take it under consideration.
I have two quick questions.
The first one is you guys have been referenced in 11 Shores Lane.
Do you guys know the height of that in relation to this property?
We can go back to that slide.
It's one of the sections.
That's what I wanted to pull up.
That 11 is actually up higher on the hill.
Definitely.
So here we see the section of it, and you can see that it is a four-story structure.
It is a parking level, and I suppose they have a lobby facing the street.
But above that, they have three floors of residential.
And that site is high enough up Schur's Lane that it is outside of the floodplain.
So they had the benefit of that site being raised.
It's right against the railroad.
It's almost misground.
Yeah, if you look at the image here, you can see that building takes up a decent amount of its site,
and it is within very close proximity to both the property line and the railroad.
Right, so I guess I'm trying to figure out, is it going to be, even though I know that it's elevated more,
is it higher than your building, or your building would still be,
with the requested amount of variance that you guys want, would it still be higher?
Well, so in this section, their building is, I think, fairly accurately represented because we were able to see their zoning application drawings and get information from that.
And so you can see on the left where their roof is.
You can see it labeled right at the top of that building.
Mr. Laver, if you could just move the cursor.
That's their roof there.
That's their roof.
Go down a little bit.
That's their roof.
And then you can see on the right-hand side, that is our building adjacent to it.
okay and then my next question is um you guys i appreciate the education with the five over two
for once how much since this uh um how hard can you go up with the two feet of concrete
in general uh i'm trying to i want to make sure i understand your question so the number is five i
mean can it be eight can it be ten can it be eleven over two like uh we've done a building
that's 27 stories tall out of over two oh no no that's what i'm saying so all concrete pretty
much the maximum of the stick frame construction is going to be five stories okay and so you need
to anything below that it's essentially for all intents and purposes it's building one building
on top of the other and the concrete or steel podium so the first two floors would be the more
robust construction pretty much from a well from a structural and a fire code perspective and then
the stick frame which could be metal or wood non-combustible construction essentially would
be five stories above that so it's a lesser it's a lesser construction from a fire safety perspective
but it's a very I mean this is as Dr. Angelides indicated this example of construction is all over
As Dr. Angelides indicated, this example of construction is all over the city.
Okay. And lastly, going up the additional feet will not put any kind of stress restraint on the historic part that you guys are trying to preserve.
Quite the opposite.
Yeah, no, I was going to say that we're really not bearing and we've gone out of our way to not sit this building right on top of those existing walls.
they certainly i think it's safe to say would never support that kind of weight but we are
building our structure behind or within a certain distance behind um and then just uh for lack of a
better way to describe it our structure will reach out to the back side of those walls to make sure
that they don't go back and forth this way it almost cradles it also i'd like to just uh confirm
that 11 shores lane the property that that you were asking about ms graham is is supportive of
the project as presented as the next door neighbor okay questions from our attorney
not at this time mr chair it's from the turnoff uh audience for the virtual audience and john
why don't you come up first glad to see you in person john the last time we had you on video
thank you for remembering that sure so we're sure we remembered it um could you state your
name and spell for the court stenographer actually it wasn't video it was just uh voice recording
you didn't have to look at me we met seeing you um yes uh john hunter there we go john hunter
H-O-N-T-E-R. Do you swear or affirm to tell the truth, the whole truth, nothing
but the truth? I do. And Mr. Hunter, obviously this is
the hearing about the height, and that's where we're going to concentrate on.
I've clarified that with Ms. Emerson. We're quite aware of that, and we won't
get straight on that. Sure. Leach machine, sir. Also, just to note that
we did actually submit a letter of opposition. We have it.
We have it. So, in a way, just to
explain. I'm the zoning chair of Monon neighborhood council, which is the coordinating RCO for this
project. Sure, I understand it's a little. How's that? That's really good. All right.
We have no idea how you arrived at the proviso height. We would love to have been in the room
as a fly on the wall, but a few discussions,
but we know the proviso high that was suggested.
I listened to the testimony given so far,
and it pretty much exclusively, except for one point,
is a repeat of what was conveyed to you before
when you made that decision.
The testimony from Mr. Layton was the same.
The only difference in his testimony was that some additional sections
where he clarified, explained in a little more detail
some constraints that he has been working with.
Obviously, the testimony from Mr. Angelides is different
and more complete than his previous testimony.
But what we want to sort of try and address is the counterman's point,
which is something that he has taken on board
that if you don't got that extra floor
there's no other way that this building will be built
and therefore nothing will be built
and we challenge that.
We don't agree with that.
We're not part of that conversation.
We haven't had a conversation with the councilman
to convey our viewpoint
but as an architect and I'm a registered architect
there are ways of incrementally reducing
the height of the proposed building
without losing all of the unilaterally one floor.
26 units is what is said.
And I think one of the constraints that is suggested
is at the lower level,
which is trying to design the building
around the 12 or 14 historic windows
that are in the wall of that's being retained.
And it's being retained, as in the original testimony,
at the request, so we are led to believe
by the letters submitted of the Littlewoods family
who asked that part of the building be retained.