Committee Hearing, April 25, 2007

COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON RULES - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, April 25, 2007 10:30 a.m. - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN WILLIAM GREENLEE COUNCILMAN JACK KELLY COUNCILMAN JAMES F. KENNEY COUNCILWOMAN DONNA REED MILLER COUNCILMAN BRIAN J. O'NEILL COUNCILMAN JUAN RAMOS COUNCILWOMAN BLONDELL REYNOLDS BROWN BILL 070005, An ordinance establishing a neighborhood improvement district in an area that generally includes both sides of Germantown Avenue from 6300 to 7631 and certain blocks of streets that intersect that portion of Germantown Avenue... BILL 070168 - An ordinance approving the redevelopment proposal of the Redevelopment Authority of the City of Philadelphia for the redevelopment of the 9th and Ellsworth Urban Renewal Area... 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, everyone. Sorry for the delay. This is a public hearing of the Rules Committee. I would ask Mr. McPherson to please read the title of Bill No. 070005. MR. McPHERSON: An ordinance 9 establishing a neighborhood improvement district in an area that generally includes both sides of Germantown Avenue from 6300 to 7631 and certain blocks of streets that intersect that portion of Germantown Avenue, to be known as the Mt. Airy Business Improvement District; designating Mt. Airy Improvement District, Inc., a Pennsylvania non-profit corporation, as the Neighborhood Improvement District Management Association for the District; approving a plan for the District, including a list of proposed improvements and their estimated cost, and providing for assessment fees to be levied on property owners within the District; authorizing 3 4/25/07 - RULES - BILL 070005, ETC. the Director of Commerce, on behalf of the City, to execute an agreement with Mt. Airy Improvement District, Inc. relating to the District; and authorizing Mt. Airy Improvement District, Inc. to assess property owners within the District a special property assessment fee to be used in accordance with the approved plan; all in accordance with the provisions of the Community and Economic Improvement Act, and under certain terms and conditions.

Thank you. Please call our first witness. MR. McPHERSON: I don't have a witness list.

I believe Eva Gladstein will be testifying. Good morning. Welcome.

Good morning.

Please identify yourself for the record and proceed with your testimony.

Good morning. 4 4/25/07 - RULES - BILL 070005, ETC. My name is Eva Gladstein. I'm Director of Neighborhood Transformation for the City of Philadelphia. Good morning to members of the Committee and President Verna. I previously testified in support of this bill before it was amended, and so rather than repeat that testimony, I just want to reiterate the Administration's support for the creation of a neighborhood improvement district in Mt. Airy. We believe that the business association there and other neighbors have worked diligently to reach agreement and that it will be a great partnership that will support our efforts to restore Philadelphia's commercial corridors. I believe you have a copy of my written testimony as well.

Thank you very much, and that will be given to the stenographer and it will be transcribed in full. The Commonwealth's Community 5 4/25/07 - RULES - BILL 070005, ETC. and Economic Improvement Act requires that an additional hearing be held, which is today, if the bill is amended while awaiting approval -- that is the purpose of this hearing -- of the bill as amended and reported to the full Council. Because the state Act requires that a bill be held over for 45 days before final approval is given, the final approval should not be given prior to June the 14th, 2007 at that Council session. I would ask, have all the objections during the March 14th hearing been resolved? There were several issues, and I'm asking if they have been resolved. Councilwoman Miller.

Yes, Council President Verna, they have been resolved.

Thank you very much. Do we have anyone to testify on 6 4/25/07 - RULES - BILL 070005, ETC. this bill? MR. McPHERSON: Yes. The next witness is Ken Weinstein -- all three together -- David Young and George Butler.

Good morning. Please identify yourself for the record.

Good morning. Ken Weinstein.

Good morning. David Young.

And last, but not least, George Butler.

Thank you. Are you all testifying?

Yeah. Good morning, Council President, Councilmembers. Thanks again for having us here. We also, like Eva Gladstein, will not repeat our testimony, but we do have it available and ask that it be included in today's testimony from 7 4/25/07 - RULES - BILL 070005, ETC. myself, from Paul Levy, from David Young and from George Butler. We're happy to answer any questions you had, but, again, we are here to reiterate that the process to establish this has been a very open, fair process, very long process. We're glad to be here at the finish line. Our bid, once it's enacted, will increase retail sales and property values and provide a cleaner, more attractive and safer area for shoppers in Mt. Airy. So we appreciate your support and happy to answer any questions you have.

Thank you. Are there any questions from members of the Committee? (No response.)

Thank you very much. The Chair recognizes Councilwoman Miller. 8 4/25/07 - RULES - BILL 070005, ETC.

Just for the record, I'd like people to know that this discussion started probably two years ago, and it's been very open. There have been people that called me to verbally say that they are not that supportive. However, I haven't seen anything in writing from any of the property owners along that corridor. So today is an opportunity for those that object to this to come forward and testify. And we do have another witness, Council President Verna.

Do we have anyone else to testify on this bill?

Brenda Foster, I believe.

Good morning, Ms. Foster. Please identify yourself for the record.

Yes. My name is Brenda Foster and I'm at 6373 Germantown Avenue. We have a travel agency. We've 9 4/25/07 - RULES - BILL 070005, ETC. been in the area for 15 years, and I just -- I think I staged my complaint the last time, but I just want to reiterate that I oppose it 100 percent. We're already taxpayers, and I think we need more of an investigation to find out how our money is going to be used, although they have clearly stated it, but I have doubtful reasons to believe that it might not be so.

You have reasons to believe?

Reasons to believe that it might not be so.

The Chair recognizes Councilwoman Miller.

Thank you, Ms. Foster, for coming in. You did state your concerns the last time we had the hearing. I would suggest that someone from the Committee meet with you. Have you been going to those meetings?

Unfortunately, I'm 10 4/25/07 - RULES - BILL 070005, ETC. never notified of any meetings, and maybe that's why I'm not as well abreasted as I should be in reference to what's going on. For some strange reason, I have called Mt. Airy's office many times and left my name and the name of the travel agency, but no one ever seems to get back to me at all.

All right. Well, we have --

And I have a document. I have a telephone log of the times that I've called, the dates that I've called and who I spoke to, but for some strange reason, I never get a return call.

Well, we have people here today that's been very active on the Committee, and maybe I'll ask Cecily Mangum to get back with you personally. Mt. Airy USA is not really running the bid, but it is a good place to start when you're looking for 11 4/25/07 - RULES - BILL 070005, ETC. information. Representatives from that organization are a part of the Planning Committee, and I'm going to ask that Cecily, who is coming up to the mike now -- Cecily, please identify yourself for the record.

Good morning, Councilwoman Verna, Honorable Councilwoman Verna, Councilmembers. My name is Cecily Peterson-Mangum. I'm Director of the Avenue Project at Mt. Airy USA, and I'd just like to reiterate what David Young said in his testimony regarding how comprehensive the communication has been. Ms. Foster, I apologize. I was not aware that you had called me.

Many times.

And you said you had the person who you spoke to?

Yes, I do. I document everything. I have the log and the time. I don't have it with me, but I do have it in my office, and I would be 12 4/25/07 - RULES - BILL 070005, ETC. glad to give it to you.

I'd be happy to receive that, but I was not aware of that. I'd like to know who in my office with whom she spoke to just so we can make sure that we have our operations in place that people are leaving messages properly.

Thank you.

The reason I called you up, Cecily, is because I want you to make sure that Ms. Foster has an opportunity to get questions answered and understand the full depth of the bid, and I also have Michael Moore and perhaps -- Michael Moore of my office and Jeanne Bethune from the Department of Commerce to make sure. We want to make sure that everybody's issues and concerns are addressed.

Thank you. Thank you, Councilwoman. 13 4/25/07 - RULES - BILL 070005, ETC.

You're welcome. MR. McPHERSON: We have another witness, Julian Wells.

Is Julian Wells here? Good morning, Mr. Wells. Please identify yourself for the record and proceed with your testimony.

Sure. Good morning. My name is Julian Wells and I'm with Century Wells Real Estate. Our 14 business is located in the proposed 15 district and has been so for the past 22 16 years. 17 I just wanted to come forward 18 to say that there is some opposition to 19 this initially, because despite the 20 claims by the witnesses so far that this 21 has been an open process, other than receiving this in the mail and almost assumably junk mail, without giving it a second look, we're a block away from Mt. Airy USA and I haven't heard one thing 14 4/25/07 - RULES - BILL 070005, ETC. about the business district or any other proposals, and I think there should be more time to contact homeowners that are going to be affected by this, because I think that it's predominantly residential properties that are in this district and I don't think these people are aware of what is going on. And I understand you said you haven't had anything in writing. You will shortly, because there's at least one business that is going to be putting it in writing, and we'd like to contact some of the homeowners to find out and make sure that they are aware of what is going on and there's a little bit more public knowledge about this situation before we lay claim to taxes on people's properties that may or may not want the business district. Okay? Mt. Airy is a wonderful place. It's a great place, but there have been attempts, most recently the Ambassador Project, which appeared to be a vicious 15 4/25/07 - RULES - BILL 070005, ETC. failure that our business did pay into it. It was sporadic cleanings of the streets. I don't know what happened to the program. We were never fully notified in writing what the situation was, except that the program was ending. I'd hate to see another situation like that come about where we're just fueling somebody's idea that they think is good for Mt. Airy but truly may not be in the best interest of the business district in Mt. Airy.

The Chair recognizes Councilwoman Miller.

Thank you, Madam President. Mr. Wells, I'm very familiar with Wells Realty there at Century 21. I know you've been there for a long, long time, and I know your mother, the owner of that business. I would ask the same for you, to have those same individuals that I named before sit -- I mean, you can 16 4/25/07 - RULES - BILL 070005, ETC. submit your written opposition and that's fine, but I also want to make sure that you have the information that's been available. So I would ask the same arrangements for Ms. Foster to also have you and your mother or whomever from your business included. This district only impacts businesses. It does not impact homeowners. And we do know that Germantown Avenue in that area, in most areas, is very residential also, has many residential properties, but we don't want any businesses to feel like they have not been included and had a voice. So I'm really glad you came today. You have the right to object, but you also have the right to information, and that's what I want to make sure you get. Okay?

Okay.

Thank you.

Thank you. 17 4/25/07 - RULES - BILL 070005, ETC.

Thank you, Madam President.

Thank you. Are there any other questions or comments from members of the Committee? (No response.)

Thank you, sir. Do we have anyone else to testify on this bill? (No response.)

Do we have anyone else to testify on this bill? (No response.)

Seeing no one, I would ask Mr. McPherson then to read the title of Bill No. 21 070168. MR. McPHERSON: An ordinance 23 approving the redevelopment proposal of the Redevelopment Authority of the City of Philadelphia for the redevelopment of 18 4/25/07 - RULES - BILL 070005, ETC. the 9th and Ellsworth Urban Renewal Area being the area generally bounded by Washington Avenue on the north, Darien Street to the east, Federal Street to the south and the rear of properties fronting on the west side of 9th Street to the west; approving the urban renewal plan and determining that such plan and redevelopment proposal conform to the general locality plan and make adequate provisions for individuals, business concerns and families who are displaced; determining the necessity for changes in and for zoning streets, alleys, public ways, street pattern location and relocation of public utilities; determining that the urban renewal plan and the redevelopment proposal meet all non-discrimination requirements of Federal, State and Local Laws and the regulations and policies promulgated with respect thereto; declaring that certain expressly designated and provided for condemnation is not imminent with respect 19 4/25/07 - RULES - BILL 070005, ETC. to the project; and declaring the redevelopment undertakings in the Project to be an important part of the City's program to remove and prevent the spread of urban blight.

Good morning. We will first hear from City Planning. COUNCILMAN DiCICCO: Madam President?

I'm sorry. I didn't see your light on. COUNCILMAN DiCICCO: May I be permitted to have a brief opening remark?

Yes. COUNCILMAN DiCICCO: I will try to be brief.

Thanks. COUNCILMAN DiCICCO: Thank you, Madam President. Good morning. There are a number of people in this audience today, in these Chambers today, who are here as 20 4/25/07 - RULES - BILL 070005, ETC. a result of an anonymous letter that had been put out in the 9th Street community within the last to 48 hours. The 5 letter indicates that the bill in front 6 of us today would provide for the City 7 Council and/or the Redevelopment 8 Authority to do a massive taking of 9 properties, somewhere in the vicinity of 10 80 individual properties. 11 For the record -- and this will 12 come out in testimony as we go forward -- 13 I just want to remind everyone again and 14 those folks who I met with in my office 15 for about an hour and a half yesterday 16 that this bill is specific to one 17 property, and the address of the property 18 is 1109 through 33 South 9th Street, 19 formerly known as the Ice House. 20 Very quick history of what 21 we're doing here. Shortly after I was 22 elected and sworn in in 1996, I met with 23 the Rendell Administration in an attempt 24 to find funding to renovate the 9th Street corridor. As many of our 21 4/25/07 - RULES - BILL 070005, ETC. commercial corridors in the City of Philadelphia, 9th Street had seen its better days. We were able to, with the cooperation and support of the Redevelopment Authority and other City agencies, do a massive renovation of the Market from Federal Street north to Christian. In addition to underground utilities, water, gas, electricity, et cetera, new sidewalks and curbs were installed, as well as new metal canopies for the entire length of the Italian Market. 1 million. And we did that, as I said, in an attempt to revitalize the 9th Street Market. We're still trying to do our best to make that Market what it once was. There are a number of buildings that have remained vacant on that corridor for a number of years, and the bill in question today is specific to a property that has been vacant for about 40 years. 22 4/25/07 - RULES - BILL 070005, ETC. Several years ago, shortly thereafter the renovations were completed, this City Council, at my request, authorized a TIF for the property that we're hearing today. The developer of that property, in spite of the fact that he had received a TIF from City Council, from the City of Philadelphia, never did anything to develop the property. In the interim, there's a local church known as St. Marons, which is a Lebanese-American church, one block off the 9th Street Market. Its pastor and I have been talking for a number of years about looking to create a senior citizen housing complex within the general vicinity of his parish. I looked at this building, realized that despite everyone's best efforts and a TIF, we were not able to get this property developed. I thought it might be worthwhile for us to look at the possibility of getting this building and 23 4/25/07 - RULES - BILL 070005, ETC. converting it into a senior citizen rental complex. I will fast forward for the purposes of time. We had an agreement. We have a developer. We have the non-profit, which is St. Marons, who would be the manager of a 51-unit residential rental senior citizen complex, with anywhere from five to seven retail stores on the ground floor. We have met with 9th Street Merchants Association. We have met with the civic association known as the Passyunk Square Civic Association. All of those folks have met and agreed that this is the best use, given the fact that up until today there has been no other interest in this property. The purpose for my speaking is that I know there's a lot of anxiety out there. I apologize for the person who sent that anonymous letter. I, for one, don't put any weight or faith in 24 4/25/07 - RULES - BILL 070005, ETC. anonymous letters, but given the fact that it's an election year, I can assume where it probably has come from.

That being said, again, for the record, I want everyone to understand this is specific to the one property and one property only. At the conclusion of yesterday's meeting with the Empowerment Group, I agreed that I would ask the Rules Committee to hear this bill, vote it out favorably, and I will on the record state that I will not move this bill or call it up for final passage until such time the Empowerment Group and the folks that they represent meet with the Italian Merchants Civic Association and, if need be, with the Passyunk Square Civic Association as well to talk about this project. But, again, the anxiety and the fear here based on that anonymous letter that approximately 80 properties were going to be condemned and taken -- and 25 4/25/07 - RULES - BILL 070005, ETC. that's not just commercial properties. They were talking about residential properties as well. So, again, I appreciate the opportunity to have this few minutes to talk to you a little bit about the history of why we're here today and why there's so many people in here who have an interest in this matter. Thank you, Madam President.

Thank you, Councilman. We will now hear from City Planning.

I think Redevelopment Authority should go first, Madam President.

I beg your pardon?

Should the Redevelopment Authority go first with the testimony?

It doesn't matter. 4/25/07 - RULES - BILL 070005, ETC. Redevelopment.

Good morning. My name is Nicholas Dema. I'm the Deputy Executive Director of the Redevelopment Authority. Madam Chairperson and members of the Committee, I am here to speak in support of Bill No. 070168, which would create a 9th and Ellsworth Urban Renewal Area and approve a Redevelopment Proposal and Urban Renewal Plan for the area. This bill would authorize the Redevelopment Authority to acquire one blighted vacant property. The property, a vacant warehouse structure, has been a blighting influence along the southern portion of the 9th Street Italian Market for many years. The Redevelopment Authority will acquire the property as part of the NTI program, and the acquisition will be financed through NTI bond proceeds. Anticipated acquisition costs are estimated to be $2.7 million. Once acquired, it is 27 4/25/07 - RULES - BILL 070005, ETC. anticipated that this property will be demolished and redeveloped as affordable senior apartments, with ground floor retail. Madam Chairperson and members of the Committee, I respectfully request favorable consideration of Bill No. 9 070168.

And I think the Redevelopment Authority knows the rules. We never got a copy of your testimony until late yesterday afternoon. So hereafter, I would appreciate our receiving them at least 48 hours prior to the hearing. Thank you. Now can we hear from City Planning? Thank you.

Good morning, Madam President and members of the Rules Committee. My name is Richard Redding, Director of Community Planning at the Philadelphia City Planning Commission. I'm here to testify in support of Bill 25 No. 070168. 28 4/25/07 - RULES - BILL 070005, ETC. The bill approves the redevelopment proposal for the 9th and Ellsworth Urban Renewal Area. It authorizes acquisition of a vacant site on the east side of 9th Street, eventually to be developed as senior housing, with ground floor commercial space. Relocation is not required. The Planning Commission approved this in February of '07. It is consistent with the 9th and Ellsworth Redevelopment Area Plan published by our agency in September of '06. Thank you very much.

You're welcome. Do you know if there is a developer for the senior citizen commercial use project?

Yes. A developer has been identified.

And how many housing units are to be built?

The proposal is 29 4/25/07 - RULES - BILL 070005, ETC. for a 51-unit senior housing.

51?

51, with ground floor commercial space.

And will they be rental?

Yes, they would. COUNCILMAN DiCICCO: Madam President, if I may. The original intent was to make those commercial spaces rental, but there is discussion that it's possible that they would condo those retail parcels out as well. Whatever works best for the developer and the managers, which will be St. Maron CDC. Those discussions are happening going forward.

That's fine. What is the cost of the project for the record, can you tell us?

The acquisition cost or the total development cost?

The 30 4/25/07 - RULES - BILL 070005, ETC. acquisition cost.

The acquisition cost today is estimated at $2.7 million.

And the source of funding?

That would be NTI bond proceeds.

Do we have a completion date for this project?

I'm not aware of that date.

Okay. Do we have any questions from members of the Committee? The Chair recognizes Councilman O'Neill.

Who is the current property owner?

Carmel Realty Associates.

What is it?

Carmel Realty Associates. 31 4/25/07 - RULES - BILL 070005, ETC.

Do you know who the principal is?

Councilman O'Neill, I'm Stephen Pollock. I am here on behalf of the current owner of the property to discuss --

Please. You can come up to the witness table or wait until you're called.

Whatever the Chair --

I think the question is being asked. You have the answer to it, so I would invite you to come up to the witness table. Identify yourself for the record, please.

Good morning, Council President Verna, esteemed members of this Committee. My name is Stephen Pollock. I'm an attorney in the City of Philadelphia with the law firm of Ballard, Spahr, Andrews and Ingersoll. I represent the owner, Carmel Realty, of the property that is before you today. 32 4/25/07 - RULES - BILL 070005, ETC. And I'm here to ask for your consideration of what's fundamentally fair both to the City of Philadelphia and its taxpayers and to this particular property. 25 million, $2,250,000. It was just signed on April the 23rd, calling for the property buyers to do some due diligence, but are interested in exactly and precisely what is being presented, a mixed use that will have commercial on the first floor, residential up above. What's happened here, Madam President and members of this Committee, is that Councilman DiCicco and his office has been fabulous over the years. They've done their duty. They've worked diligently with my client over the years. It's a sad tale, but my client was unable, despite all his good efforts and this Council creating an atmosphere that 33 4/25/07 - RULES - BILL 070005, ETC. would allow TIFs, that would allow real estate abatements, that private enterprise and private market forces hadn't yet come together to allow the old Ice House to be privately developed. So that what we're saying is that the tax dollars of taxpayers of Philadelphia might not have to be used, because the market forces have now finally come together to potentially have a development that is fitting with the Ellsworth Area Redevelopment Plan that this Planning Commission approved in September of 2006, because it specifically says the vacant building at 1109 to 1133 South 9th and adjoining parking lot are recommended for mixed-use mid-rise development. The new building should retain commercial use on the first floor, 9th Street and Washington Avenue. Residential and related uses are appropriate for the upper floors. And then there is a call to change the zoning from C2 to C3. And I'm sure that all of 34 4/25/07 - RULES - BILL 070005, ETC. you are familiar with that having dealt with it in your districts or dealt with it on an at-large basis. It allows a higher development. And since this is a bigger building that's been there -- and these are tax-paying people. I dare anybody -- I've been told -- and I got put on this case late yesterday, but I've been told that their taxes are paid. So this is not a property where the owner hasn't kept up his taxes. What was happening here -- and I'm sorry it's the last minute, it's the 11th hour, so to speak, because it's a salutary effort and it's a salutary thing that Councilman DiCicco is trying to achieve. I checked with my client, and I understand that -- I don't know if -- and I don't know because I wasn't involved. We didn't do the transaction. We didn't do this Agreement of Sale. We're just here on this end. I don't know whether there was ever a communication from the 35 4/25/07 - RULES - BILL 070005, ETC. church or the private non-profit that wants to develop this piece to the developer -- or the owner to say, Hey, is there a basis that we can move together and develop this piece together. But what I'm saying is, somebody has put down a deposit. It calls for about a six-month period, and then after that six-month period, ten days afterwards there would be a settlement. 7 million of taxpayer dollars quite yet. I understand it's the last minute, and as I said, my client told me to express this. And I'll look Councilman DiCicco directly in the eye. You and your office have been great. You've been fabulous. There's nothing more you could ever ask of Councilman DiCicco with regard to this. It's just that we're saying here today at this moment that -- I was reading a book about the Yom Kippur 36 4/25/07 - RULES - BILL 070005, ETC.

War, and Ariel Sharon remembered this phrase that Napoleon said, that in a war, there's only one time when a moment presents itself, and it's our job, is to seize the moment. And it's never too late to do the right thing, and we suggest to you that the right thing is to table this. Let us see if these private market forces that this great Council set out and allowed to happen in this city that finally private dollars are willing to do exactly what this bill is asking you to do with public dollars.

Councilman O'Neill, would you say your question was answered?

It was a long answer. COUNCILMAN DiCICCO: Still didn't get the name.

I did. I said Carmel Realty.

I was just trying to complete the record. What I 37 4/25/07 - RULES - BILL 070005, ETC. would always ask somebody who says they represent a realty company is, who is the realty company. I'm just trying to get a name, a person. Who is your client?

Carmel Realty.

When you get a call, the person doesn't say, My name is Carmel Realty. Who is the person that's --

Gerald Goldfein.

Charles?

Gerald, G-E-R-A-L-D, Goldfein, Esquire. It's the company that owns the Valu-Plus stores, which are stores similar to McCrory's or Woolworth's.

Okay. How long have they owned it?

My recollection from just being told is, I think they've had it since the early '90s. And when it started out, it did have tenants on the first floor at the typical Italian 38 4/25/07 - RULES - BILL 070005, ETC. Market, different little businesses that were using the first floor with the canopy and everything like that. Market forces apparently caused these little businesses to close down. They've had several efforts to try and revitalize this. And, as I said, nobody can thank this Council more than this land owner, because you tried with a TIF and Councilman DiCicco tried with a TIF to see if they could get something kick started around the year 2000, I believe, was when that occurred, but efforts never came to fruition. No Agreements of Sale were ever signed. They at one time did look at it to see they were going to -- because there's about -- I think it's about a 13,000 square foot footprint that this area has, and they were thinking about maybe at one point renovating it to do a Valu-Plus store there. They abandoned that because of certain costs and everything like that. So they've always 39 4/25/07 - RULES - BILL 070005, ETC. been out there looking to try and do something. Now, as I said, I know it's the last minute, but here's a taxpayer of the City of Philadelphia that has its property. This is the use of the property. This fits within the declarations of your ordinance, of the proposed ordinance. It's to try and get things done --

Mr. Pollock, who is your proposed --

-- by private enterprise. And this is private enterprise. This is the actual owner, taxpayer of the City of Philadelphia.

Who is your proposed purchaser or developer?

Proposed purchaser is an entity known as the 9th Italian LP.

Do they have a name? If they call somebody, they don't say, This is 9th Italian LP. 40 4/25/07 - RULES - BILL 070005, ETC.

There's a Michael Markovitz, who is an attorney who has been serving as their --

We don't know who the principals are?

I don't know who the principals are, Mr. O'Neill. I understand that there's another parcel next door that is used as a parking lot. It borders along Washington Avenue, and I understand or there's some thought out there that there might be an assemblage going on also that could take not just this parcel but the next door parcel and make this something really new and exciting for the City through private enterprise that would have to go through the same process of the Italian Market Civic Association, the Passyunk Square Civic Association, going through Councilman DiCicco, working with him. And, again, nobody has worked harder on this property than Councilman DiCicco with our owner. I'm just saying 41 4/25/07 - RULES - BILL 070005, ETC. here at the last minute, a tax-paying citizen of the City of Philadelphia is -- finally the market forces are allowing something to happen here.

You're a full-time real estate attorney.

Zoning, land use, real estate, been Chair of the --

How many years have you been doing it? I know you've been doing it for a long time.

Thirty years. I'm almost reaching Irv Standard and Paul Zucker age.

Maybe that would qualify you as an expert for this question. You mentioned that your client has an Agreement of Sale for 2.25 million. Not getting into the question of why are we appraising something at 2.7 if the market thinks it's only worth -- that's a different area for another day.

Well, they knew -- 42 4/25/07 - RULES - BILL 070005, ETC.

Why would your client not want to take the offer that's on the table for 2.7 and tell the Italian LLP, whatever, 9th Street LLP and Mr. Markovitz, their attorney, that, You're four and three-quarter million dollars short. Sorry. I've got an NTI bill coming up in Council. If you can't beat the 2.7, there's nothing to talk about? What's going on here that we don't know that we should know?

Councilman O'Neill, the only --

Nobody in their right mind does this.

Councilman O'Neill, the one number I had heard thrown out to me from my client's perspective was that he had heard that the proposed offer might be in the realm of $800,000, not 2.7. Is that correct?

The total 43 4/25/07 - RULES - BILL 070005, ETC. acquisition cost is 2.7, but the appraised value of that is approximately 813,000. But the process of condemnation, there's other costs that go into that. For example, there's a 200 percent value of the cost of condemnation or the appraised value in the event that the owner would challenge the condemnation, as well as appraisal fees and all the other fees that go along with the act of condemnation.

So we, the City, could get out of this at substantially less than 2.7, but you got to reserve 2.7 for all the different things that happen in your world?

That's right. That's the total acquisition cost, not just the value of the real estate.

Well, thank you. And I think at least from my end, the record is more complete than it was.

Or to follow that 44 4/25/07 - RULES - BILL 070005, ETC. up, the other end of it is that you could be sparing yourself $2.7 million for the potential of private enterprise and private development doing what has been proposed here today.

Well, the next anonymous letter that Councilman DiCicco would see if this record hadn't completed would be that there's a 2.25 buyer and we're putting up 2.7. It's actually 800,000, is the appraisal for it. Okay. That's all.

Right.

Thank you. The Chair recognizes Councilman Clarke.

Thank you, Madam President. Eight hundred thousand is the appraised value?

That's correct.

And how do 45 4/25/07 - RULES - BILL 070005, ETC. you get to 2.7?

Good morning, Council President, members of the Committee. My name is Troy Adams. I'm the Project Manager for the Redevelopment Authority. We had a budgetary appraisal done that estimated the cost at $813,500 just for the real estate. The bulk of the other costs to add up to $2.7 million are legal fees and a 200 percent condemnation bond, which basically acts as a cushion to the Redevelopment Authority.

That's 1.6.

Right.

So you're telling me that we're spending a million dollars in legal fees?

The eminent domain code for Pennsylvania stipulates that we do have to have a bond of 200 percent built in.

That's the 46 4/25/07 - RULES - BILL 070005, ETC. 1.6. You're at 1.6. How do you get to 2.7?

Correct. And then we estimate -- I think on this one we factored $15,000 to $20,000 in legal fees, $15,000 in advertising fees and then costs to hire the appraiser and title work.

How do you get to 2.7 from 1.6?

It's approximately $1.6 million plus the cost of the real estate, which was 813,000 and then the advertising --

You're saying that the 200 percent is above and beyond the 800?

Yes.

Are you sure? That's not my understanding. And I know you guys work there and you're the lawyers, but I always thought that it was inclusive of the appraised value. Because that makes no sense to me at all. 47 4/25/07 - RULES - BILL 070005, ETC. I really need to see that statute that requires that you have 200 percent above the appraised value. You're sticking to your guns on that one?

Yes.

All right. The issue with respect to the taxpayers' dollars going to a project that could possibly be done by the private sector, the sales price, assuming that the Redevelopment Authority acquired it, what would the sale price be? Because I understand based under NTI we must sell it for market value. Is that additional $2 million incorporated into the -- I'm actually asking the RDA this question. Is that $2 million incorporated into the sales price?

Because it's for affordable housing, the actual purchase price to the developer may be for nominal consideration.

So this 48 4/25/07 - RULES - BILL 070005, ETC. might be a non-profit nominal deal?

Exactly, because of the public purpose of providing affordable housing.

Okay. And I know we've gone through this whole RDA condemnation thing for a while. It just amazes me that we pay so much more for a property -- in this particular case three times the cost of the parcel -- for condemnation. That makes like no sense to me.

Again, that is only for budget purposes. The purpose of the 200 percent is that if we're condemning somebody's property, we have a financial responsibility to make sure we have adequate funding to compensate the owner if he were to challenge the value. So the safe harbor to that is approximately that if you have 200 percent of the value of the property, you've kind of met the safe harbor that you have the financial resources to actually go ahead and 49 4/25/07 - RULES - BILL 070005, ETC. acquire the property.

Right. And there's a possibility that if challenged by the property owner, that that's a likely scenario where we will have to end up spending that, particularly if this offer has any --

It's not an offer. It's a signed Agreement of Sale.

So I got to think that that has to be taken into account. So it's probably going to be that much. All right. We'll get into this in, I guess, the CDBG hearings again, about this whole cost of condemnation. It makes like no sense to me how we end up spending three times the cost of properties. All right. Thanks, Madam President.

You're welcome. The Chair recognizes Councilman 50 4/25/07 - RULES - BILL 070005, ETC. Kenney.

Thank you, Madam President. The Agreement of Sale was signed yesterday, the day before?

April 23rd.

What day was that?

Monday.

Would the potential of an Agreement of Sale for $2.5 million in some way bolster a potential opposition to a condemnation as a result of the negotiations that will take place for the condemnation? I mean, is this not the first exhibit in a case to oppose the condemnation, to argue that the $800,000 appraisal is not appropriate because we have an Agreement of Sale for 2.5 million? Are you able to get out of an Agreement of Sale if both parties agree? If both parties agree in the Agreement of Sale -- 51 4/25/07 - RULES - BILL 070005, ETC.

If both parties agree, under this Agreement of Sale, it would be on -- certain things would have to happen. I mean, there would have to be certain conditions. You just can't say now that you've signed an agreement. They did put up $50,000 that's there as good-faith deposit money.

But if both parties agree, you could dissolve the Agreement of Sale?

Both parties could at some point.

It's an agreement between --

Under the terms of the agreement.

It's a pretty simple question. Two parties agree not to proceed. You don't proceed.

If they decide to rescind the agreement, they could.

Same thing I just said. 52 4/25/07 - RULES - BILL 070005, ETC.

You'll never get a straight answer out of a lawyer, because there has to be a step --

But, see, I have to wonder when we have an $800,000 appraisal -- that's the City's or the Redevelopment Authority's going-in price. They're going to say, This is what it's worth. We're going to condemn it. We're going to give you 800,000. The owners of the property, who have had it since the early '90s and has been abandoned for 40 years -- it's been unused for 40 years, according to Councilman DiCicco, who lives in the neighborhood --

My understanding was that the first floor level, at the Italian Market level, there were shops there in the '90s.

It's not been the highest and best use for the past 40 years. Is that a safe assumption? Councilman DiCicco -- 53 4/25/07 - RULES - BILL 070005, ETC.

Let's make that assumption for today. COUNCILMAN DiCICCO: I'm sorry. I didn't hear the question.

The property has been underused for at least 40 years? COUNCILMAN DiCICCO: There was some point in the last years a little 11 bit of the floor space that was used for 12 some retial, but, generally speaking, the 13 building has been vacant for at least 40 14 years, if not longer. 15

So two days 16 ago, we have an Agreement of Sale for 2.5 17 million, which would to me indicate that 18 the owner is going to resist the 19 condemnation. And could the Agreement of 20 Sale act as an argument that the City should pay more than the $800,000 it's appraised for in order to condemn it?

The argument is there, definitely, but the argument is also there that, as I said, better late 54 4/25/07 - RULES - BILL 070005, ETC. than never. Here's something that the market forces have finally dictated. I mean, there are places on -- I always marvel walking along Chestnut Street, how come there's some properties between Front and 2nd on Chestnut Street that are still sitting there and we're not taking them by eminent domain at this time. Because this is the heart of our district. So there are -- you can probably going anywhere in any of your districts or areas that you come across as you campaign throughout the City and your services, at-large members of the City, and you see buildings that are sitting there, but we're not really pushing at this point, but market forces are changing things. There are areas probably in your districts that you thought may stay dormant, but because of different things, they've come to life. So just because something has come here -- I mean, if you were here with a delinquent taxpayer who is 55 4/25/07 - RULES - BILL 070005, ETC. thumbing his nose at the City of Philadelphia and didn't do anything -- and I haven't heard anything. I don't know this -- and I shouldn't say this, because lawyers are taught not to say anything you don't know, but I haven't heard anything yet, Councilman, about that there are L&I violations against this property. COUNCILMAN DiCICCO: You can go down that record and I can tell you the problems. This has been a nuisance problem for years.

But they pay their taxes. Now, whether or not this is -- you can look at the timing and everybody can ascribe motives to it, but I've got to ascribe the motive that this is a legitimate offer that's been signed. There's money that's been put down. There's an effort. If the non-profit had wanted to develop this for the laudable goal, that could have been somebody that could have been put together with this 56 4/25/07 - RULES - BILL 070005, ETC. owner, because the property has been out there all these years, and they could have tried to see if there had been some meeting of the minds that could have gotten it for that purpose without going through this process.

A skeptical person would view this Agreement of Sale as a way to bolster a claim of the owner that the taking and the price for the taking is not appropriate. I mean, that's where I think -- that's what I think that's all about, but I am not being a skeptical person. I'd be willing to have -- but I've got to believe that these guys said they're taking this for real now and they want to give us 800,000, we think it's worth more, let me show you a document that says it's worth more and then we can start the argument from there. So, I mean, we'll see how it goes, but that's my view of it. COUNCILMAN DiCICCO: Could I 57 4/25/07 - RULES - BILL 070005, ETC. have a point of order? I know I'm not a member of that Committee, but...

The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President. Did your client, the current owner, ever notify the potential buyer that the condemnation proceedings were moving forward?

Exhibit B of the Agreement of Sale is the letter signed by my good friend Michael Koonce, who is Executive Director of the Redevelopment Authority, addressed to Carmel Realty dated March 21st, 2007 notifying them of -- and I'll leave this copy with the panel, with this honorable committee, if it wants it, but put them on notice that there was these pending proceedings, and they still signed an Agreement of Sale for 2.25 million. It's attached, and they were put on notice. My understanding -- and as I 58 4/25/07 - RULES - BILL 070005, ETC. said, this is all what I've been advised by my client, because we did not participate in the Agreement of Sale process at all -- is that this buyer came forward sometime in February of this year. COUNCILMAN DiCICCO: And your client never -- all the accolades that your client has offered to me and you have offered on his behalf -- never thought it was important enough to call me to let me know that it was not exercising a TIF that we had approved several years ago and he may be entering into an agreement to sell this property, which he has not maintained since he's owned it?

All I know, Mr. -- COUNCILMAN DiCICCO: Citizens Alliance for Better Neighborhoods has cleaned that property at least twice a week --

Councilman 59 4/25/07 - RULES - BILL 070005, ETC. DiCicco, all I know is that the minute I got on the matter at about o'clock 4 yesterday or 3:30, my first call was to your office to let you know. COUNCILMAN DiCICCO: I understand.

Sometimes we find in our business that clients don't have the good sense to get their lawyers involved because we'll get them -- we'll tell them they have to call you or call the District Councilman and then get the process rolling. So that sometimes we're dealing with a situation after the fact. COUNCILMAN DiCICCO: So you'll know, Mr. Pollock, your client knew enough to call me when he bought the property. He knew enough to call me and ask me to introduce a TIF. He knew enough to call me and ask me not to put the canopies on the face of that building, to hold off because he was going to renovate the building. He knew enough to ask me to get the stands, the 60 4/25/07 - RULES - BILL 070005, ETC. vending stands, removed from the front of his building so that he could create a loading zone for the business that he intended to open as a result of the TIF, but he didn't know enough to call me to let me know he had a $2.5 million deal on the table to build housing? And by the way, do you know if this is affordable housing?

I don't know. COUNCILMAN DiCICCO: Or is it market rate?

I don't know what the particulars are that way, Councilman DiCicco, at all, whether it has that salutary purpose of being affordable housing, but I do know that they're willing to do the mixed use, and that's about what I've been told so far. COUNCILMAN DiCICCO: One other question --

All we're asking for is if this Committee would delay the vote for 30 days, let us see if this is 61 4/25/07 - RULES - BILL 070005, ETC. really a real situation so that the skeptics on this Committee maybe have some of their feelings responded to. That's all I'm saying. COUNCILMAN DiCICCO: One other question. The buyers, the potential buyers, are they the same folks who just settled on the property adjacent to this and to the rear of this property on Monday of this week?

I do not know that for a fact. My indications are just from as, again, sources out there that have been relayed to me by my client indicate there may be an assemblage going on. COUNCILMAN DiCICCO: They're land banking. Okay. Thank you.

I don't know if they're land banking. I think it makes a bigger footprint. It makes a more usable building that would be valuable, because I think it goes from about 13,000 square feet to about 30,000 square foot. 62 4/25/07 - RULES - BILL 070005, ETC. COUNCILMAN DiCICCO: But you don't know if the potential buyer is the same entity that made settlement on the Anastasia's Seafood Restaurant and the parking lot behind it on Washington Avenue?

I think -- is it the 804 Washington Avenue parcel? I do not know that for a fact. COUNCILMAN DiCICCO: Thank you. Thank you, Madam President.

Councilman Kenney, are you finished?

I want to ask a hypothetical scenario from your legal expertise. Is it illegal in the event that an Agreement of Sale is crafted or executed, signed, and that that Agreement of Sale results in a dispute between the Redevelopment Authority and the current owner, which potentially inflates the acquisition price from $800,000 to a million two, for argument's sake, and the owner agrees and 63 4/25/07 - RULES - BILL 070005, ETC. the potential buyer agrees to dissolve their Agreement of Sale and the City settles with the current owner for a taking valued at a million two, would the owner of the property in any way be violating the law if they paid the proposed buyer some type of fee or payment?

As a subterfuge, you're saying?

No. I'm asking a hypothetical. I'm not implying anything. I'm asking, would it be illegal for the owner of the property settling with the Redevelopment Authority for a million two instead of 800,000 to give the proposed buyer a hundred thousand dollars? Would that be an illegal activity?

One can only speculate on that one. It might be. There may be -- there could be. It would be something you'd have to look into.

Is there 64 4/25/07 - RULES - BILL 070005, ETC. anything illegal about that transaction? It doesn't seem like there would be. If I own a building and I settle with the Redevelopment Authority for a number and I want to give some money away to somebody else, that doesn't seem to be illegal, does it?

Well, I would think you'd want to come forward with a legitimate offer and say that this is --

But we've agreed as two parties to a legitimate offer to dissolve the offer, and I walk away unharmed, and now as the owner of the building, because of that potential evidence in a courtroom or in a procedure, that a judge may say, Well, you had a $2.5 million offer and the City is only offering $800,000, so maybe we have to go up a little bit. I mean, is that scenario a hypothetical possibility?

I guess it's a possibility.

Thank you. 65 4/25/07 - RULES - BILL 070005, ETC.

As we say in the law, anything is possible.

I'm just asking if it's a hypothetical possibility.

But there is an eminent domain clause.

And as long as there's nothing illegal about it, it's fine. Thank you.

The Chair recognizes Councilwoman Brown.

Thank you, Madam President. In spite of Councilman Clarke's and Councilman Jim Kenney's questioning to help us understand how we start at 800,000 and get to 2.5 million, I failed to see the connect. Are there any numbers broken down in your testimony that would illustrate how one goes from 800,000 to 2.5 million?

Thank you, 66 4/25/07 - RULES - BILL 070005, ETC. Councilwoman. The exact budget, the acquisition budget that breaks down the cost, is not in with the testimony, but I'd be happy to provide that to the Committee.

I would ask that you submit to Madam President all of the numbers breakdown that show us how we get from 800,000 to 2.5 million.

I can do that this afternoon.

Secondly, you indicated in your testimony that this is intended for a non-profit purpose. Elaborate on that.

We've been in preliminary discussions with a developer to do affordable senior citizen housing, and it's a partnership between a developer that has expertise in doing affordable housing and the local St. Marons CDC that's been formed.

And the developer would be? 67 4/25/07 - RULES - BILL 070005, ETC.

I don't have the exact -- the name of the developer. It's St. Marons. I don't know the legal entity that's been formed or if in fact one has even been formed yet. It's still been preliminary.

It being preliminary, are you in discussions with just this particular developer on just this non-profit or are there other possible scenarios, alternatives for the ultimate use?

There has been no 15 selection by our Board of Directors for a developer, so we could entertain other options.

And would those options be purely non-profit or for some other use?

Within the urban renewal controls, we could look at any different scenario of developments or developers.

I thank 68 4/25/07 - RULES - BILL 070005, ETC. you for your testimony.

Thank you.

Councilman Kelly.

Gentlemen, the use of this, you say it's going to be for what?

Senior citizen apartments that are targeted --

They're apartments, they're not condos, in other words?

Right now it looks like they would be apartments where they would pay a monthly rent that is below the market rate. COUNCILMAN DiCICCO: Point of order, if I may.

Councilman DiCicco. COUNCILMAN DiCICCO: I believe that under the tax credits that are going to be provided to the project, that it's mandatory that they're rental. The only 69 4/25/07 - RULES - BILL 070005, ETC. portion that may be -- and I'm not all that familiar -- that may be condo'd out might be the retail on the ground floor, but the residential units must remain rental.

That's correct, Councilman.

Would they be subsidized?

Yes, they would.

years. 13

Correct. 14

15 years. 15

It seems to me -- is this currently vacant, this building?

Yes, it is.

How many units would you have in there?

The developer has stated that they would do 51 apartment units, and then on the ground floor there would be -- you could work a couple different scenarios for retail space, one 70 4/25/07 - RULES - BILL 070005, ETC. up to maybe five retail spaces on the ground floor of the building.

That's after the redevelopment?

Correct.

The building now consists of what? Does it have apartments?

No, it doesn't, Mr. Kelly. It's an -- COUNCILMAN DiCICCO: It's an empty warehouse.

It's an empty warehouse building.

It's an empty warehouse?

The first floor used to have some commercial units. The rest of the building is --

How long has this property been vacant?

My client was telling me somewhere in the early 1990s was the last time there were tenants on 71 4/25/07 - RULES - BILL 070005, ETC. the street level, but it's been vacant probably before that on the upper levels. COUNCILMAN DiCICCO: 40 years.

So it's been vacant for 40 years and now all the sudden, there seems to be an interest. I find it -- I don't know. I find it very questionable that due to the market itself, the way it was really escalating over the last five or six years, that there wouldn't be an interest in redeveloping this property before this, but all the sudden now, we seem to, since the RDA wants to take this over, that everyone is starting to climb on board. I just don't know the reason or the rationale behind it. Thank you, Mr. Chairman.

Thank you, Councilman Kelly. Real briefly, I want to follow up on the line of questioning, the skeptical issue aspect of this debate. The 2.5 offer that -- 72 4/25/07 - RULES - BILL 070005, ETC.

2.25.

2.25. Traditionally in a real estate transaction of that magnitude and actually for a simple row home, there's normally a lender involved, and even when there's not a lender, I suspect that someone would have gotten an appraisal to determine whether or not that was a reasonable offer. Is there an appraisal that justifies the 2.25?

I don't know.

Because that's relatively important, because the City's appraiser has said it's 800,000 and now you have an offer of 2.25, and I'm trying to understand why the level of disparity between that offer and the City's appraised value is so wide.

I don't know if there's an appraisal done by -- the buyer just signed the document on the 23rd and I wasn't -- as I said, unfortunately, I don't have the benefit of having been 73 4/25/07 - RULES - BILL 070005, ETC. involved in the transaction, nor was any other attorney in my office involved in putting this together, so I couldn't have picked the brain of anybody to tell me if there's anything like that. I don't know if Councilman DiCicco knows anything about the adjacent property, which is the 804 Washington, if he's heard anything about a purchase price.

The appraisal is traditionally based on comps, and I guess separate and aside from that particular property and that offer, are there any comps in that area?

Well, that's what I was saying. I mean, I've heard -- again, I don't have anything concrete, but I've heard that the price for the adjacent parcel may be in the vicinity of what this offer is. That's the vacant parking lot and the building that wraps around this. COUNCILMAN DiCICCO: The recent 74 4/25/07 - RULES - BILL 070005, ETC. sale of 804 Washington is actually multiple properties as well. It is an active -- the corner of 9th and Washington Avenue, which is the southeast corner, is a restaurant, Anastasia's Seafood Restaurant, that is operating. So there's rental income. And there are two or three adjacent properties going south on 9th that abut with the 1109 property that are also active retail establishments. To the rear of 1109 is an active parking lot. It's a parking lot that's used for customers who shop on 9th Street. So the value of that would certainly be higher as a result of the fact that there's income.

You have an active business. COUNCILMAN DiCICCO: That sold for somewhere around 3 million, I am told. I don't have any documents to back that up. But what I'd like to also point out is that the 1109 through 33 property, 75 4/25/07 - RULES - BILL 070005, ETC. the property in question today, had been on the market for about two years, maybe even longer. The asking price, the asking price, was somewhere between 800,000 and $1.2 million, but we wind up with a buyer two days ago that's going to double that price. One point two was the maximum number, I think -- the lowest number he was willing to accept, the buyer, from what I understand. It was listed with a realtor.

And that's a comparable site? COUNCILMAN DiCICCO: I would suggest probably. I actually thought that was a high number, given the fact that it's an empty building that can't be salvaged. You have to -- demolition people were out there and looked at the building. You need to demolish the building. It's just ready to go anyway. So you have to demolish the building. Taking that demolition cost into consideration, which runs somewhere 76 4/25/07 - RULES - BILL 070005, ETC. between 300,000 and 500,000, the cost would probably -- if you paid 800, you'd be at the 1.2, 1.3, which was the asking price. But somehow miraculously two days ago, a buyer comes up with an Agreement of Sale for 2.5.

Thank you.

I just want to just clarify for the record, I know Councilman Kenney asked me about could you make an arrangement where you would get paid some sort of commission if there was a deal struck and you got some money from the Redevelopment Authority. Under the terms of this agreement, which is pretty standard, the purchaser could get out of this agreement if the property gets taken by eminent domain or they could take the property and "if the purchaser does not elect, the seller shall convey title and assign any award for such taking to the purchaser." So the agreement and the arrangement are that either they could 77 4/25/07 - RULES - BILL 070005, ETC. get out or they could take the property as is and they would succeed to the award.

Thank you. Any other questions of these witnesses? (No response.)

There being none, thank you very much, gentlemen.

Thank you very much. I appreciate your time and patience.

Mr. McPherson, any other witnesses? MR. McPHERSON: Yes. The next witness is Domenic Vitiello.

Does the Committee want to have a copy of the Agreement of Sale? We'll offer into the record a copy of the Agreement of Sale dated April 23.

Thank you.

Thank you.

Good morning, 78 4/25/07 - RULES - BILL 070005, ETC. Councilmembers, Councilman DiCicco. Thank you for giving me the opportunity to testify about Bill 070168. I teach in the Urban Studies and City Planning programs at the University of Pennsylvania and I'm a Board member of a South Philadelphia community group called Juntos/Casa de los Soles, which works with Latin American immigrants in South Philadelphia, including some of the business owners and operators on South 9th Street within this redevelopment area and proposed urban renewal area. I've been doing two things lately. I'm writing a book about community development in immigrant communities in the Delaware Valley and I work with colleagues at Penn on something we call the Philadelphia Migration Project studying immigration to the region. And I'm here both as a researcher and a city planner, as well as a Board member of Juntos, and I want to 79 4/25/07 - RULES - BILL 070005, ETC. say, first of all, that Juntos has nothing to do with whatever the letter is that Councilman DiCicco has been discussing. We didn't know of it before this morning, and so we have no 7 association with that. We have really two concerns as an organization. The first is about the process here. The merchants that we work with on South 9th Street really, until we approached them over the last week, had no idea that this was happening, and secondly is with the creation of this urban renewal area based on certain assessments of vacancy and a blight certification done in the year 2000 that we feel and that I feel as a professional are no longer accurate. I will say that we as an organization and I personally wholeheartedly support the development of affordable seniors housing in this area and the redevelopment in particular of that one blighted property at 1109 to 80 4/25/07 - RULES - BILL 070005, ETC. 1133 South 9th Street. However, we feel that the rest of the area is really no 4 longer blighted. As a planner, I understand that urban renewal areas, their designation and blight certification are really standard tools for effecting the sort of redevelopment project. However, I also know that designation of an urban renewal area makes it easier and removes certain steps for public takings and redevelopment in the future beyond the proposed project today. My central concern is this: I wish to make it clear in the public record that the blight certification of this broader area no longer really accurately reflects the actual conditions on this block, with the exception of this one property at 1109 to 33 South 9th. I realize that this bill under consideration today is to take that single property, but I want the record to show that the urban renewal area to be 81 4/25/07 - RULES - BILL 070005, ETC. approved is, again, based on outdated and inaccurate information about vacancy and blight. So I'd like to share a very little bit of my recent research with you and submit into the record both a letter and a brief report that I have. And I'll read just the first page and a half or so of that report. My research assistants and I have spent the past several months, since January, surveying Latin-American commercial and economic development in South Philadelphia from about Broad to the Delaware south of Christian. Our research is supported by the Penn Institute for Urban Research and it's part of my larger book project on community and economic development in immigrant neighborhoods of the greater Philadelphia region. We have performed a detailed survey of both buildings and businesses, including extensive interviews with 82 4/25/07 - RULES - BILL 070005, ETC. business owners and property owners along 9th Street, as well as surrounding areas of South Philadelphia, and we have also used the City's neighborhood information system to track data on real estate and L&I, everything that I imagine you know is in the City's database.

We have partnered with Juntos and Casa de los Soles and with the Empowerment Group, which is an economic and small business development intermediary, in our research, and Juntos has requested that we summarize the findings of our research pertaining to commercial development in the 9th and Ellsworth Redevelopment Area, with specific reference to the blight certification, vacancy and land-use patterns reported in the redevelopment proposal for the area and its supporting documents, and that's what this report that I'll submit does. I'll just read one more page of it that summarizes our findings. 83 4/25/07 - RULES - BILL 070005, ETC. The blight certification for the 9th and Ellsworth Redevelopment Area was effected seven years ago, in 2000, at a time when there was considerable vacancy in this area. The occupancy rates, physical conditions and commercial activity in the area have really changed significantly since then. Our research finds that today the properties in this area, with the exception of the property again at 1109 to 33 South 9th Street, are no longer blighted. Over the past seven years, entrepreneurs from Latin America, Asia, the United States and Europe -- and I hope I'm not leaving anyone out -- have renovated and reopened the great majority of storefronts in this area. This renovation and business activity has developed organically, driven by private individuals' and companies' decisions in the marketplace, without the aid of City programs or taxpayer dollars. We have interviewed the proprietors of ten of the 84 4/25/07 - RULES - BILL 070005, ETC. Latin-American-run businesses in the 9th and Ellsworth area and our interviews have turned up not a single business that relied on public sector assistance for its start-up and development. Some of these businesses actually constitute foreign investment in our neighborhood-based economic development in Philadelphia, something I think we should be proud of. The reinvestment and revival of these blocks by a diverse group of entrepreneurs from immigrant and receiving communities has made the Italian Market area one of Philadelphia's most ethnically diverse commercial districts. Indeed, the 9th and Ellsworth area was the subject of a tour during the American Planning Association's National Conference in Philadelphia last week, which was focused on -- the tour focused on best practices of small-scale commercial revitalization in immigrant neighborhoods. 85 4/25/07 - RULES - BILL 070005, ETC. Renovation and business development are proceeding at a rapid pace along South 9th Street between Washington Avenue and Federal Street. The Latin-American businesses in these blocks, which until recently were limited to restaurants and grocery stores, have begun to diversify, now including a sporting goods store, barber shop, party supply store, music and DVD shop. In short, a more mature commercial mix that serves a great variety of consumer needs both within the neighborhood and within the broader region, as the Italian Market, as you know, is really a regional destination. Several new stores have opened up just in the past few months, making the City's January 2007 land-use map no 21 longer accurate in its assessment of vacancy on these blocks. This land-use map, which accompanies the redevelopment proposal, lists 15 properties as vacant structures, and of these 15 properties on 86 4/25/07 - RULES - BILL 070005, ETC. the land-use map, today three are operating businesses, eight are presently being renovated, at least four of which have engaged commercial tenants that expect to open new stores in the summer of 2007, so in the coming months. Three are renovated and for sale or rent and one is vacant with no apparent activity at the property, and that one is, as I'm sure you know by now, at 1109 to 1133 South 9th Street.

In conclusion, I'd like to reiterate that really no accurate assessment of the current conditions on these blocks could reasonably conclude that the properties and the broader 9th and Ellsworth area, again, with the exception of this one property, the Ice House, are blighted. And the rest of the report shows pictures of each and every property that is listed as vacant in the redevelopment proposal and shows their renovation, the stores that are there and lists their current conditions. 87 4/25/07 - RULES - BILL 070005, ETC.

Okay.

Thank you.

Thank you. One quick question. And I'm happy that the majority, if not virtually all, of that particular Model Cities Area or urban renewal area has been developed over the period since 2000 when it was designated. Real briefly, do you know if in that Models City Area there were any new construction or conversions?

There were certainly conversions. I don't think they were quite shell conversions. There has been and there continues to be a great deal of investment and rehab of existing buildings, but I know of no 20 demolition or new construction.

But there are abatements?

With the exception, sorry, of one building that is built within the parking lot along 9th 88 4/25/07 - RULES - BILL 070005, ETC. Street that is the grocery store, sort of partner of the Veracruzana Restaurant.

But you know there are certain abatements for certain conversion and new construction and there are government subsidies, although people don't like to characterize it that way?

That are for shell rehabs on that block?

Yes.

No, I was not aware of that, but that should show up in my BRT maps, right?

Just somehow this whole abatement issue -- and I know it's probably not the appropriate time to have this level of discussion, but this tax abatement issue somehow is characterized as the government not being involved at giving people subsidies.

No. And I was not aware of that and so I wouldn't have characterized it in that way. 89 4/25/07 - RULES - BILL 070005, ETC.

So you may want to revise --

Yeah.

All right. Okay. Thank you.

Do you know how many of those buildings are?

I don't know. I just know that in substantial parts of the City there's a lot of new construction, and a lot of it is market-rate housing, high-end housing. And somehow when we talk about affordable housing and it being subsidized by the government, somehow this high-end housing is not being viewed as subsidized when they are in fact being subsidized by the government.

Absolutely. I'm unaware of any buildings in these particular blocks that have either been shell rehabs or new construction eligible for the ten-year tax abatement.

Or 90 4/25/07 - RULES - BILL 070005, ETC. conversions.

But all around that area -- right, or it could be. All around that area certainly, especially north of Washington, there have been such.

All right. Thank you so much for your testimony. Any questions of this witness by members of the Committee? (No response.)

Thank you so much, sir. MR. McPHERSON: The next witness is Fred Eller.

My name is Fred Eller. I'm a property owner on the 1100 block of South 9th Street, and my main reason to call here is -- I mean to come here is, it just seems like the activities going on, even though the Councilman -- and he's a good man -- said people knew, nobody knew. And it isn't about the place across the street. It's 91 4/25/07 - RULES - BILL 070005, ETC. about what can happen after this area is claimed as a redevelopment area that there were projections by the Planning Commission to actually do some things that would affect all the business owners, like maybe some mass condemnations and stuff like that, and this is what most of these people here fear. They're all for getting rid of this building, but nobody wants to face the fact that, hey, they might condemn a whole block and put this shopping center in that the Planning Commission said could be done. And the other thing as far as being a blighted area, I bet since 2000 most of the property values went up at least 20 to 50 percent. You know, a blighted area, they should have went down 20 or 30 percent. I think that's about it as far as I'm concerned.

Right. 92 4/25/07 - RULES - BILL 070005, ETC. It's my understanding -- and I hear what you're saying -- is that via ordinance 4 and the Redevelopment Authority approval, the designation of an urban renewal can be removed, or am I incorrect? I guess I'm looking at my RDA representatives. Mr. Dema? Somebody has to know. Mr. Koonce? Not to suggest that -- that's clearly under the Councilman's jurisdiction, but I guess that is the question that has been raised by a number of -- COUNCILMAN DiCICCO: Mr. Chair, if I may, while Mr. Koonce is coming up, that's one of the concerns as to why there's so many people here today. They're concerned and they're anxious about the title being a blighted area, that this will be the tool that we'll use just to take properties at random, and I've been trying to assure them that that's not the case. They've asked me yesterday in that meeting that took place in my office, Why don't we decertify the 93 4/25/07 - RULES - BILL 070005, ETC. area as being blighted. I'm not convinced that that's the right thing to do, because there's still a significant number of properties that are blighted and why give up the tools that would enable us to take those if there is a development project that makes sense at this time. I mean, it's not that the whole entire area has been redeveloped. There's still some parcels. It's not unlike any other community that has a redevelopment plan where you have a lot of activity, but you still have some holes in the process where things have still been left unattended or blighted.

No. We actually had a similar situation in my Council District, in the Brewerytown section. As a result of the Westrum Development, the commitment from the City was to build additional affordable housing in the existing community, and when we attempted to proceed on acquiring the vacant properties for rehab for 94 4/25/07 - RULES - BILL 070005, ETC. affordable housing, we found that that area did not have an urban renewal designation. So when we attempted to expand that area to allow us to do more affordable housing, there was a lot of concerns raised by the residents because of that blight certification, and they didn't feel confident or comfortable with that designation for their community. Although they understood it had some challenges, they didn't want to have that. COUNCILMAN DiCICCO: There are certain areas in Bella Vista -- and I know the folks in here are familiar with that neighborhood, which is a high market value of properties in there -- that are still designated as blighted. So it just is an opportunity to use that tool. But I'll certainly entertain that going forward. I just don't want that to have an impact on this piece of legislation before us. And I offered to have a meeting with the folks here -- 95 4/25/07 - RULES - BILL 070005, ETC. Mr. Eller was in my office yesterday as well -- to talk about the possibility of doing a decertification.

All right. Mr. Koonce, real briefly, because we have to move. I know we have a number of witnesses. Can you just briefly tell us what the process would be to decertify an area as an urban renewal area?

It would essentially be the same process that we're going through now. It would start with Redevelopment Board action. City Planning would have to approve the redevelopment proposal decertifying, and then we would have an ordinance here at Council.

Okay. Just the reverse. Okay. Thank you, sir.

See, as I said to the Councilman, Frank, is that they could even keep the certification as long as there was no gross condemnation. When I 96 4/25/07 - RULES - BILL 070005, ETC. mean "gross condemnation," I mean taking the good, bad and the ugly, whereas spot condemnation, you take a building or a situation that is grossly run down and in need to be condemned. You take it, but you take instead of -- my fear is that they're going to take three or four places, say this isn't enough square feet for us, we need to condemn ten units along a road to put in what we have planned to put in, and there's a lot of good properties in there, because the good properties won't fit the overall scheme of the developer.

Right.

That's what I'm afraid of, gross condemnation, like they say we got to knock this whole block down.

Right.

Because of our overall plan to do something somewheres else, like in the rear of the block, like the parking lot or something. 97 4/25/07 - RULES - BILL 070005, ETC. See, the Planning Commission had these grandiose plans of like putting a shopping center on a parking lot and stuff like that. And I just -- they're going to have to condemn a lot of properties to do that.

Well --

A lot of good properties.

Well, I can say, having worked with Councilman DiCicco as a Councilperson for the last seven and a half years, he is an honorable and a very fair person, and I don't think, based on my understanding of the man, he would use the condemnation process or allow it to be abused. At the end of the day, regardless of what recommendations the Planning Commission or the Redevelopment Authority make, it must pass through the Councilperson's office prior to any designation or any taking of a property using the powers of condemnation. I know the Councilman is 98 4/25/07 - RULES - BILL 070005, ETC. real good working with people, and I don't see any opportunity for abuse on the existing designation.

Excuse me, Councilman, if I may. In order for the Redevelopment Authority to acquire any additional properties, even adjacent properties, even though they're within the footprint of the redevelopment proposal, we would have to duplicate this process all over again. We would have to send a redevelopment proposal to this body asking that these properties be acquired, these additional properties be acquired. This legislation will only affect the one property.

And no 19 properties can be added without going to the Redevelopment Authority for broader approval, and it can't even be added until this particular transaction is completed, right?

That's correct.

Thank you. 99 4/25/07 - RULES - BILL 070005, ETC. Thank you, sir.

Thank you. MR. McPHERSON: The next three witnesses, if they would please come to the table, Joe Tartaglia, Angel Rodriguez, Silvestre Torres.

My name is Joe Tartaglia, Vice-President of the Italian Market. Excuse my appearance. My suit got burned in a fire. I got no ties either.

Sorry about that.

I might be asking the same questions. I can't hear too well, so I might be asking the same questions that everybody else spoke of. So if I do, please excuse me about that. The only concern I'm here about -- I'm 100 percent for the factory, and our organization is 100 percent for the factory to be done. They were only concerned about the immediate area, where somebody else might have explained 100 4/25/07 - RULES - BILL 070005, ETC. already. Everything has been done pretty well, great. Mr. DiCicco has been very good in the neighborhood. He's been cleaning up the neighborhood. He's been cleaning in front of the Ice Factory for the last five years. They've been leaving a mess there. And the City won't pick up the trash, and the Citizens Alliance go down and pick up the trash and try to keep the place pretty well clean. That's about what I wanted to know and why we wasn't -- we were notified at a meeting six months ago about what was going on here, but most of the people are Asian and Mexican. It's hard for me to explain to them exactly what's going on. So I did give out a few flyers that someone else gave me and handed to them so that they could bring somebody here to be a spokesman for them so that they can understand exactly what is going on. I'm for the project. The Ice 101 4/25/07 - RULES - BILL 070005, ETC. Factory was offered to me one time for $250,000. I don't know how they got 2,700,000. There ain't too much I want to say. That's about it.

All right.

Thank you.

Thank you, sir.

If I might, I'm here to translate/interpret for this fellow here, Silvestre Torres.

Sure.

My name is Peter Bloom. I'm the Director of Juntos, an organization in South Philadelphia. So if it's okay with the members of Council, he'll read a paragraph, I'll give you the interpretation of that paragraph.

Yes.

Thank you. Honorable members of City Council, good afternoon and thank you for 102 4/25/07 - RULES - BILL 070005, ETC. hearing our voice. My name is Silvestre Torres and I am from Mexico and I'm also the owner of the recently opened restaurant Los Taquitos de Puebla at 1149 South 9th Street. I'm very concerned and want there to be some clarification relating to the renovation project scheduled for 9th Street between Washington Avenue and Federal Street. Neither myself as a business operator nor the owner of the building ever received any notice about the details of this project. These plans, which I've become aware of thanks to some organized neighbors, directly affect me and that I, along with my business partners, have invested a lot of money in creating our restaurant. It was four years ago when I came to establish myself on these streets, which were abandoned. Before there used to be a lot of crime in the form of drug dealing. There was not sufficient lighting and there was trash 103 4/25/07 - RULES - BILL 070005, ETC. everywhere. We have all worked very hard over the last years to ensure that our street is a place where our neighbors can walk safely and find products and services that they need. We serve the entire community and we are proud to attend more than 50 customers on a daily basis. We clean up in front of the restaurant and we help light the street at night. Together with Asian, Latino and Italian businesspeople, we've been able to bring new life to this area of the neighborhood. Through our own efforts and hard work, we are realizing the American dream and are supporting our families. Furthermore, we directly contribute to the vitality of the City by paying taxes. I stand before you, honorable members of City Council, today to tell you that we are more than 14 Mexican business owners and many more residents of South 9th Street who know that our street is not abandoned. We are making 104 4/25/07 - RULES - BILL 070005, ETC. the street work. We pay taxes. And we would like to invite you to come and visit the area yourself in order to see with your own eyes how much progress our street has made, thanks to our efforts and those of our neighbors. Thanks for your time.

Thank you. Any questions by members of the Committee?

Just one comment. As a South Philadelphia resident who frequents this area of the City on a regular basis, I do recognize and thank the businesspeople who have come here, not only the long-term businesspeople from a lot of Italian-American merchants but also the new Asian-American and Mexican-American merchants that are there. I think it's important that we understand that the governmental term of "abandoned" or "blighted" is not directed at any individual business or street. It 105 4/25/07 - RULES - BILL 070005, ETC. is a term that's needed to be used because the federal and state governments require that terminology. It's not a judgment on the business or the neighborhood or anything else. It allows for the mechanism to take a blighted building, like the one at 9th and Washington Avenues, to improve it, but in no way designates you or your business or the neighborhood as a blighted neighborhood. And I think it's the terminology that confuses people and frightens people, because it's not a blighted neighborhood. It's a productive and important neighborhood and pays a lot of taxes and does a lot of good things. So sometimes the government needs to use certain phrases because the law requires it, but we are tremendously happy you are there and thriving and making the neighborhood a better place. And the hope is that this project will improve the neighborhood even more to 106 4/25/07 - RULES - BILL 070005, ETC. bring more customers and more people to your business and to the street. So gracias. COUNCILMAN DiCICCO: Mr. Chair?

Councilman DiCicco. COUNCILMAN DiCICCO: Thank you. Mr. Bloom, does Mr. Torres understand? I mean, I thank Councilman Kenney, by the way, for his explanation and his comments. I certainly agree. Having understood all the issues that have been presented today in conversations with him, I assume, after yesterday's meeting, is he supportive of the taking of this property for the purposes that I've described?

He said yes. What he wants is for there to be some change. What he's saying is, if in fact this project is to make the street better, we're very supportive of that and of the taking of the building. Again, 107 4/25/07 - RULES - BILL 070005, ETC. the main concern is about this designation. COUNCILMAN DiCICCO: I understand. We're going to work on that interpretation.

He said we are committed to making sure that this street gets better, and in another year, none of the things that could even be possibly considered vacant will be vacant, if we're given the opportunity to make that happen. COUNCILMAN DiCICCO: And we all agree on that and we're all going to work to accomplish that. Thank you. Thank you, Madam President.

He finally said, and we want as much help as we can possibly get from you. So thank you very much. COUNCILMAN DiCICCO: Thank you.

Thank you, Councilman DiCicco, for agreeing to meet with us on such short notice. 108 4/25/07 - RULES - BILL 070005, ETC. COUNCILMAN DiCICCO: You're welcome.

Okay.

One more statement, if it's all right. I know Frankie a long time, Mr. DiCicco. He's been a man of his word. If he says something, he means it. COUNCILMAN DiCICCO: I want to be in your next movie.

We take care of our good brothers, our next-door neighbors. They're our next-door neighbors all these years of the United States and Mexico. So they're here now. They're going to be our future for our children.

Thank you, gentlemen.

Honorable Councilmembers, Councilmember DiCicco, my name is Angel Rodriguez. I'm here today as Executive Director of the Empowerment Group. I come with in-depth experience 109 4/25/07 - RULES - BILL 070005, ETC. of housing development in the City, previously with non-profits and low-income housing and also with community economic development, and I'm well aware of the process that Councilman DiCicco is trying to accelerate here. I'm also a South Philadelphia resident and I'm well aware of the eyesore that the Ice House has been over the years. As Executive Director of the Empowerment Group, we wholeheartedly support Councilman DiCicco's effort to revitalize and rehab that property. What we are here to clarify and offer our services as well is to assist Councilman DiCicco and his staff and any other Councilmembers in helping to foster an understanding of the development process with the Latin-American community along Washington and 9th Street. As far as our work in that area, we don't see it as blighted per se, but we understand the technical terminology for redevelopment purposes. 110 4/25/07 - RULES - BILL 070005, ETC. We also are aware through this whole process and I guess, hypothetically speaking, some bailed gamesmanship, what's happening here is small business owners are being bandied about and we are getting a lot of excitement. A lot of that has to do with understanding the process and translation of the process to Mexican business owners and other business owners along the corridor, in which case Empowerment Group here offers our services as doing that, since we are one of two organizations that do support small entrepreneurs in doing that and offer services in Spanish. What I'd like to say, though, is that we'd hope that Council would accept our offer and also pay attention to the value that the small business owners are providing here. I think it would be a great complement to a senior center. I'm well aware, with consolidated plan, the need for housing for seniors in the City. It would be a 111 4/25/07 - RULES - BILL 070005, ETC. great location, but it would also be a great complement to have small businesses thriving around that development at affordable prices with older residents who are on fixed incomes. So I ask that the City Council please take the time, actually take our offer to help bring the local business owners along and assisting and helping this happen and also allaying their fears of mass condemnation on the blocks. Thank you.

Thank you. Councilman DiCicco. COUNCILMAN DiCICCO: Thank you. Thank you, Mr. Chair. Thank you, Mr. Rodriguez, and thank you for the offer. I think what came out of yesterday's meeting was an understanding that there is a lack of communication, and I'll take some of that responsibility. When I called for the meeting with the 9th Street Merchants Association 112 4/25/07 - RULES - BILL 070005, ETC. several months ago, my understanding is that a flyer or some sort of notification gets put out to all the merchants. I'm not sure if that happened or did not, if that occurred or not. What we're going to do is, Mr. Tartaglia, who spoke earlier, is the Vice-President of the Association. We're going to reach out and maybe we can use your office, your services, to get the notification out. We welcome -- the 9th Street Merchants welcome the new business entrepreneurs. They're part of the fabric of the 9th Street Market, which is much more of an international market than it is an Italian Market these days. But in any event, that I think has been the problem here. And they need to understand, the merchants, the new merchants, understand that it's important for them to attend those association meetings, because they are businesspeople on that corridor and they have just as much of an interest and a say in what 113 4/25/07 - RULES - BILL 070005, ETC. happens on that 9th Street corridor as anyone else, long-time business folks as well. So I welcome the opportunity. And if you can, if you have a card, if you could give me your card before you leave, I'll reach out to you and we'll put a meeting together and bring everyone into the room to start talking about these things.

I appreciate that. Just for the record, I'd like the Councilmembers and Councilman DiCicco to know that the Empowerment Group is in receipt of a grant from the Department of Commerce here in Philadelphia to study the Washington Avenue area and businesses, specifically Mexican businesses, and the growth in that corridor. So we have a dedicated staff, and that's what we do day in, day out, is focus on small businesses and small business growth, because we believe that's the backbone of Philadelphia. I 114 4/25/07 - RULES - BILL 070005, ETC. mean, it's about neighborhoods. It's about the people invest in the local neighborhood and say, We're not going to let it become blighted, and take care of the sidewalk in front and also their neighbor's. So thank you for that offer.

Thank you very much. Are there any questions or comments of these witnesses? (No response.)

Gentlemen, thank you very much. MR. McPHERSON: The final three witnesses I'd ask to come to the table, Ellen Somekawa, Jinhuo Chen and Kuang Sang Lin.

Good afternoon. Welcome. Please identify yourself for the record.

I'm Ellen Somekawa from Asian-Americans United.

115 4/25/07 - RULES - BILL 070005, ETC. Welcome. Please proceed with your testimony.

I am from Asian-Americans United. We found out very recently about this bill and we've been in contact with several Chinese organizations and with Chinese land owners, residents and businesses in the impacted area. We were concerned to find that none of them had heard about this bill or the hearings today. We question a process in which the people are not given the chance to learn about, much less to have a say about, decisions that are being made that will have an impact on their lives and livelihoods. We have been told to stop worrying. We have been told that this bill is really only about one problematic building. We have been told that City Council's move to approve the designation of this area as an urban renewal area is of no consequence. We have been told 116 4/25/07 - RULES - BILL 070005, ETC. that there is due process available for people whose property is being taken by eminent domain. The problem with these glib assurances is that we know people who have been displaced by eminent domain. We know the retired homeowner who was planning to live out her life in her comfortable home with a paid-off mortgage, and we've talked to her about her years of struggling with the RDA, with everything from the taking to the settlement to getting eviction notices for rent that was supposed to have been paid by the RDA. We've talked to people who have built a lifetime of friendships and memories in their neighborhood, only to have their little piece of security taken away, because putting their bulldozed property into a land bank was deemed to be a better use of the land than allowing their small community to exist. We've spoken to the family 117 4/25/07 - RULES - BILL 070005, ETC. whose three generations were living off of income from their small storefront whose livelihood was taken by eminent domain. We know people. We've spoken to them. And we have learned that the so-called due process that is supposed to protect people consists of little more than a small ed in the Daily News, a letter saying to vacate and a chance to show up at a City Council meeting where the decision on the taking is already a foregone conclusion. Forgive our skepticism, but if gentrification keeps making its way south and if a big developer wants the property of a small Mexican grocery or a Chinese hairdresser, frankly, we don't like our chances very much. Who will get to say what's more important? An immigrant family's lifetime of savings and dreams that have been poured into a small storefront or a multi-story multi-use condo development? Who will get to say? 118 4/25/07 - RULES - BILL 070005, ETC. This is our chance. This Rules Committee hearing right here right now is our chance to have public elected officials act on our behalf in a public process. The bill calls for the taking of only one property, that's true, but City Council's approval of this urban renewal area has the effect of taking away rights from all of the property owners, residents and businesses in the area. And I'll say it again. This bill 14 has the effect of taking away the rights from all the property owners, residents and businesses in the area. It is shocking to think that this body would contemplate an action that takes away people's rights based on information that you now know to be outdated and incorrect. Maybe it's convenient to call this an urban renewal area and to continue to call it blighted so that you can get control over one building. Many 119 4/25/07 - RULES - BILL 070005, ETC. of us wish that there were a way to take the offending property at 1109 South 9th Street away from an uncaring owner and a bad neighbor, but the very same rules that allow you to take away that person's property apply to every other property in the area. We know from past meetings with RDA staff that this process right here, the creation of the urban renewal area, is the time when there's the most accessible and transparent process for public input.

But what kind of process is it when the people most impacted haven't been informed and haven't been given a chance to have a say? The Redevelopment Authority's own plans stated that slightly less than a quarter of the population of the neighborhood is Asian, yet, to our knowledge, there was no outreach to the Asian residents of the area to inform them of these plans that could impact their lives and livelihood. 120 4/25/07 - RULES - BILL 070005, ETC. Approximately 40 percent of the parcels on the 1100 block of South 9th Street are owned by people with Chinese names, yet we talk to Chinese community organizations who have members who live or own property in the impacted area and they were not notified. We walked down the street and talked to residents and business owners. None of the Asian residents or business owners we talked to had heard of this plan. It is unconscionable to rush to take away people's rights in order to meet someone's construction timeline. Please vote to delay action on this bill 18 until people get a fair notice of these proceedings. Thank you. )

Good afternoon. Please identify yourself for the record. PATTY: His name is Jinhuo 121 4/25/07 - RULES - BILL 070005, ETC. Chen. He's the Director of China Association. My name is Patty. I'm the interpreter for Jinhuo Chen. Good morning. My name is Jinhuo Chen. I'm the Director of the China Association, which represents more than 10,000 members in the greater Philadelphia area. My organization is one of more than half a dozen organizations representing Chinese immigrants from Fuji Province. We are one of the fastest growing immigrant communities in Philadelphia. Our estimates show that we have over 30,000 Fujanese living in Philadelphia today. Chinese immigrants are making an important contribution to Philadelphia. We are moving here, fixing homes, creating new business, raising our children and paying taxes. We are proud to be Philadelphians and we are proud to know that our people help Philadelphia in many ways that you may not even see. 122 4/25/07 - RULES - BILL 070005, ETC. I'm here today because I'm concerned about what may be proposed at South 9th Street, without our knowledge or any discussion with us. Mr. Sears is here with me as one of our members who owns a property, a house, of South 9th Street in that area. We have been working in the South 9th Street neighborhood for over six years fixing up properties and investing our savings into making this area a better place. Until we were informed by a local committee organization, we have no 15 idea that the City had plans to call this area blighted. We are concerned that you have not visited this place recently and talked to the owners of these properties. Otherwise, how can you call this area blighted? Why didn't the City inform the hard-working owners of this area about what is going on? We are worried that the City might take our properties just because it decides there's a better use for it. We 123 4/25/07 - RULES - BILL 070005, ETC. are also worried that because we are new and we do not speak English, that people feel they do not have to talk to us about these important issues. But we are still Philadelphians and we still care. Our life and business are on the line with your decision. We have the right to know about these big decisions and to talk about them. Please delay your decision until more people have the chance to be informed about your plans. Thank you.

Thank you very much. (Applause.)

Mr. McPherson, do we have any other witnesses? MR. McPHERSON: No, no more witnesses.

Does anyone else want to testify on this bill? Would you just approach the 124 4/25/07 - RULES - BILL 070005, ETC. witness table, please. Please identify yourself for the record, sir.

My name is Samuel Spear. I represent the property owner of 908 to 918 Washington.

Please proceed with your testimony.

Thank you. Looking at the plan, one of the problems has been identified as the lack of notice. My client only heard about this because she received one of the anonymous flyers on Monday, so she immediately came to see me. So we've had very limited time to do anything to prepare testimony. I apologize, but I appreciate your listening to us. Looking at -- I was able to get off the Internet, fortunately, the September of '06 Planning Commission plan, and it shows apparently that my client's property seems to be, in terms of area, the biggest property involved in 125 4/25/07 - RULES - BILL 070005, ETC. this area. What she does is, she owns -- or she and her husband are Korean immigrants. They own that area, which is a parking lot, with three commercial properties. One is a restaurant, one is a grocery, one is a check cashing. She supplies parking --

I'm sorry. Point of information, because I'm getting confused. I don't mean to interrupt you. Is the property that you're describing part of this bill? Is it being taken?

It's not being taken yet, but my understanding --

Is there a plan to take it?

No. 20

Because I understand the issues of notice and the issues of communication, which obviously have been falling short in many cases, but I keep on getting confused, because we're talking about the one property 126 4/25/07 - RULES - BILL 070005, ETC. that's being asked to be taken.

Well, Councilman --

I just want to make sure that the record is clear that no one is taking your client's property or intending to take your client's property.

Well, we're not clear on that, and that's why we decided to come today. We needed to come because all we know is, we looked -- we were able to read the ordinance or the proposed ordinance and it doesn't even mention, as far as I can tell, the Ice House. And we certainly have no objection to taking the Ice House.

Because that's what's before us today. I just want to make sure.

But the bill, I thought, is to approve the whole plan, and the plan --

But you can't take this one single blighted 127 4/25/07 - RULES - BILL 070005, ETC. property unless you approve the plan. If you don't approve the plan, you can't take the blighted property. So it's kind of a Catch 22.

And that's why we're trying to seek clarification, because part of the plan involves possibly taking our property. I know it doesn't -- it says it won't be imminent, but of the plan has a proposed usage or -- what's it called? An illustrative site plan, and it proposes putting a new building right in the middle of our parking lot and our property. My clients have owned this for years, and so they're understandably 18 worried, and we came here for 19 clarification. 20

You 21 shouldn't have learned about this 22 particular bill because their property is 23 not in this bill. 24

Okay.

So I want 128 4/25/07 - RULES - BILL 070005, ETC. to make sure the record is clear, that even though we're having this very worthwhile discussion, that property is not in this bill and will not be taken. As a matter of fact, there's no other properties in this bill other than the blighted Ice House.

And we appreciate the reassurances, but that's why we came, because we didn't receive notice. We didn't know what it was about, other than reading the ordinance, which does not, as far as I can tell, specifically talk about the Ice House. And I know Councilman DiCicco has clarified that now, and that's great, and we don't oppose that. We don't oppose redeveloping blighted properties, but my client's property is certainly not blighted and is used and taxes are paid on it and it's used by the community. COUNCILMAN DiCICCO: Sir, I'm very familiar with your property. I know it's a thriving -- there's thriving 129 4/25/07 - RULES - BILL 070005, ETC. businesses there. I actually go there to eat sometimes. The last thing we need to do is eliminate off-street parking for the 9th Street Market.

I would think. COUNCILMAN DiCICCO: Again, it's been said many, many times this morning this bill is specific to that one property. And if decertifying the area as an urban renewal area is something that people want to talk about, I am willing to have that discussion, but for the purpose of today -- we've been here for two and a half hours, and I appreciate the fact that everyone has an opportunity to speak and should be heard -- it's only concerning 1109 through 33 South 9th Street. No other properties.

And we appreciate that. COUNCILMAN DiCICCO: If there was an attempt at a later date to take properties, hypothetically, an entire new 130 4/25/07 - RULES - BILL 070005, ETC. bill would have to be created and a whole new public process would have to be -- we'd have to entertain a whole new public process.

And we understand -- COUNCILMAN DiCICCO: And we're not there.

I understand that. I appreciate it. My client appreciates it very much. Believe me, we understand the process, but part of this bill 14 approves the underlying plan. The underlying plan does have a diagram, the only diagram it has, which shows that at some point in the far future -- we know not in the near future. COUNCILMAN DiCICCO: Or never.

We know you have to go through an awful lot else to get there, but it shows that possibly their business could be taken. COUNCILMAN DiCICCO: Or never.

That's right. 131 4/25/07 - RULES - BILL 070005, ETC. Sure. COUNCILMAN DiCICCO: Or never happen.

We understand that. COUNCILMAN DiCICCO: Because this plan has been in place since 2000.

And believe me, we -- COUNCILMAN DiCICCO: It's seven years it's been in place. This is the first opportunity we have to use this for this property, and you heard all the testimony earlier. So it could be a future tool, but it may never be a tool in the future. And if it does become a tool, there will be a public process.

We know that and we appreciate the reassurances. And just thank you. We wanted to put our comments on the record and thank you for your attention. COUNCILMAN DiCICCO: Thank you.

Thank you. 132 4/25/07 - RULES - BILL 070005, ETC. Good afternoon. Please identify yourself for the record.

My name is Edward Newton. I'm here as both a taxpayer and as a resident of one of the homes within this suggested area. If I could speak as a taxpayer first just regarding the questions about the real estate deal. This just happened this week. Questions why is the price suddenly jacked up. Certainly it does smell a little fishy. I wonder why on the eve of this bill being passed that these things are happening. However -- well, just for the record, I'll just add that the current owner and hopefully soon to be former owner acquired the property in 1993. They paid $280,000 for it. Just that was a question earlier. I would point to six storefronts across the street from the Ice House. According to City property records, just last October, just seven months ago, the properties at 1108 to 133 4/25/07 - RULES - BILL 070005, ETC. 1118 South 9th Street -- these are directly across the street from the Ice House. They're single level, commercial storefronts. 8 million used to acquire these properties by the same private investment group. In the ensuing seven months, they have renovated those properties. Those properties are currently actively being -- they're seeking tenants for them. I think this does give some indication that there is substantial private development money coming into the area. So, yes, a little fishy about the Ice House. You have to wonder why, but nevertheless, there also is evidence that developers are willing to pay premium prices for properties in our area, with the expectation that that is a good deal. So there's some evidence on both sides on 134 4/25/07 - RULES - BILL 070005, ETC. that. Now, if I could speak as a private homeowner. We've been talking about the Ice House, but according to the map -- and I know we talk about the fact that this is only the one property involved, but unless there's additional language, I've gone through the ten pages of this bill. I do not see anything that explicitly limits this bill to the Ice House property, nor do I see anything in the City Planning Redevelopment Area Plan from last September that explicitly limits it to this. In fact, it calls this the Phase I, with the expectation that possibly it will be continued development in the area around. There are a lot of private residences included in this zone that aren't even adjacent to the Ice House. I have to question why those private residents are in there. Interestingly enough, not all of them are. For instance, on Ellsworth Street, there's a 135 4/25/07 - RULES - BILL 070005, ETC. row of houses that are carved out. If you were just doing the redevelopment zone as a straight line, it would go this way, but not -- it painstakingly zigzags up and carves out this row of private residences on the 900 block of Ellsworth Street. Now, why are those houses exempted from being included in this and others aren't? I don't know why. My house is. I live on South Darien Street, the 1100 block of South Darien Street. Every single house on that block is occupied. Indeed, every single house on Federal Street and on Ellsworth Street that are included in this development zone are occupied. My wife and I have lived there for 14 years now. Some people on the block have lived there for longer; others have lived there shorter. One of the houses on our block sold for $225,000 in the last year. So, clearly, there's plenty of private money coming into the neighborhood. 136 4/25/07 - RULES - BILL 070005, ETC. So I just question, why is this? Despite all the verbal assurances that this will not be a problem in the future, the fact is that this -- that our homes are included within this redevelopment zone. That gives certain legal status to them. Now, consider if you wanted to buy a home and you discovered that the home you wished to buy was within one of these developments zones, that the first step had been taken to potentially -- taking of the home, eminent domain or whatever. Wouldn't that give you a bit of hesitancy about buying that property?

I feel this does affect our property values. It puts a cloud over us. It puts some anxiety into us, and particularly since the development in question for the Ice House has no 22 connection to our homes. So I just do not understand. I think it's very understandable that we have this anxiety. So given this new development 137 4/25/07 - RULES - BILL 070005, ETC. in terms of the private developer of the Ice House, I would hope that Council would table this bill for a period of time to see what develops. Rather than use the blunt instrument of declaring the redevelopment zone, use lesser and more cost-effective means that the City has at its disposal to help this private development. Let's see what happens. And as a homeowner, I would ask, take our homes out of this. There's no reason for them to be there. Indeed, I believe it is detrimental to put the private homes in the area within this, because our property values suffer. There's no reason for us to be there, so I would ask that you redraw the boundaries of this economic zone and exclude our homes from it. Thank you.

Thank you. Good afternoon, sir. Please identify yourself for the record and 138 4/25/07 - RULES - BILL 070005, ETC. proceed with your testimony.

Glenn Doebler. I live at 1174 South Darien. I'm here also because as I look at this plan, it includes my home. I'm inviting you all, please -- you have my name now on record -- come for dinner, see my house. You will not tear it down once you're in it. It is unbelievable. But here I am reading this and it says you have the right to do it. That's what bothers me. I don't want to lose my home. I mean, the Councilman here, he planted the tree in front of my house. I was the first one as part of his plan for new trees. I just don't understand. And also, I didn't know about this until Monday when I got a little flyer in my mailbox. Now it's only Wednesday, not even 48 hours later. I took a day off from teaching second grade. I haven't taken off in four years, but if I knew this was only about the Ice House, I probably wouldn't be here, but the way 139 4/25/07 - RULES - BILL 070005, ETC. this reads, it has my little house right here, and I'm way back on Darien Street, like a block and a half away from that place. I just don't want to lose my home. I put too much time into it. That's all. Thank you. And I'll be waiting for you to call. Come on over.

And I'm sure that the Councilman would like to see that happen. (Applause.)

The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: I'm just wondering if Mr. Koonce or someone could just kind of go over this again. Nobody is going to take your -- I planted trees a year ago on Darien Street.

You did, in front of my house. I'm the first one you did. I had a college class that day or I would have been there. 140 4/25/07 - RULES - BILL 070005, ETC. COUNCILMAN DiCICCO: We're not going to take your home. I apologize for the anonymous letter. I can't control that. I mean, I couldn't control that from happening. Obviously it created a lot of anxiety in the community, as I said earlier. I just ask Mr. Koonce if there was a way in which we can carve out the Ice House, but we can't do that, and Mr. Koonce maybe could explain that.

Could I go back to my seat? I'm nervous up here.

This bill actually is both general and specific. It's general in that the redevelopment area is described in a larger neighborhood context, but it's specific in that it asks for approval to acquire one specific property. In each redevelopment proposal, in order for the Redevelopment Authority to actually file a Declaration of Taking in Court of Common Pleas that would allow 141 4/25/07 - RULES - BILL 070005, ETC. us to acquire the properties, the properties have to be specifically listed in the redevelopment proposal for acquisition. This requires one property -- or this bill lists one property for acquisition. The only way that we could acquire additional properties would be if we went through a similar process to this in the future.

If I may ask, why is the block south of the Ice House also included in this proposal?

The redevelopment area was defined in 2000, I believe. I believe that's correct, Rick?

That's right.

I mean, I might add, all of Center City pretty much is a redevelopment area and it hasn't affected the property values there. It's just not our experience that that actually happens.

So I just question why the map is drawn as it is. We're 142 4/25/07 - RULES - BILL 070005, ETC. talking about this area. Why is this area there and why are these houses excluded?

Perhaps in the future maybe we could have discussions with the Planning Commission and the neighborhood and discuss redrawing the area, but this bill does not allow us to acquire -- it only allows us to acquire the one specific property that's actually listed.

Well, I hope we can move forward with excluding the homes from the area.

The Chair recognizes Councilman Kenney.

I just have a question relative to process. Can you decertify and recertify at will or is there a limit on the ability to -- my thought is, if somehow we pass this bill and then decertified the area as a blighted area, could we then, if we needed to, on a case-per-case 143 4/25/07 - RULES - BILL 070005, ETC. basis recertify it again? Or is there a limit to the number of certifications and decertifications you could do?

I would have to defer to the Planning Commission on that for that answer, but my understanding is that once this bill becomes law, we can then go back and redraw the area.

Could the Planning Commission please come up. Did you hear the question?

Once again, Richard Redding. When areas are certified as blighted, we have not decertified in the past. It has not been our practice. It has not been done.

How many areas of the City are certified that way?

Approximately 75.

Can you run down just from your memory besides Center City what other areas have been certified as blighted for purposes of redevelopment 144 4/25/07 - RULES - BILL 070005, ETC. work?

Three-quarters of West Philadelphia, all of lower North Philadelphia, much of the Germantown area --

Any areas in South Philadelphia besides this particular area?

Yes. Point Breeze, South Central, everything between Washington Avenue and South Street --

Let me ask you a simpler question. How many areas of the City are not certified as blighted?

Well, I think in terms of total geography of the City of Philadelphia, roughly one-third of the geography is certified as blighted and eligible for redevelopment.

Right.

We do this in order to establish the urban renewal process as a tool, as one of the tools in 145 4/25/07 - RULES - BILL 070005, ETC. the City's toolbox to facilitate community development projects.

In your memory, how many residential properties have been taken in opposition to the owners? I mean, do we take a lot of residential property as a regular course of business? I mean occupied residential property.

The objective is to keep any relocation to an absolute minimum, and I don't have an exact number of how many residential takings have been done that were contested.

So generally when we take a residential property for whatever reason, it's not occupied; is that a safe standard?

Well, the vast majority of condemnations affect vacant properties. Is that what you're saying?

Yes. All right. I'm done. Thank you.

If I may ask a 146 4/25/07 - RULES - BILL 070005, ETC. question, please. Since vast areas of the City seem to be categorized as blighted, I just want to make sure I have the definitions clear. A redevelopment area in terms of this, like three square blocks, is this the same as declaring like a broader area? You're saying everything from South Street to Washington Avenue is a blighted area. Is that the same legal characterization as this three-block redevelopment zone?

Yes, it is. It is the same legal characterization. It's a terminology that's required under state redevelopment law in order for the area to be eligible for the use of condemnation in support of these kinds of neighborhood improvement projects.

The Chair recognizes Councilwoman Miller.

Thank you, Madam President. Mr. Redding, doesn't it need, 147 4/25/07 - RULES - BILL 070005, ETC. too, that you would not be able to use those NTI bond proceeds, or how does that tie in, if it ties in at all, in terms of the funding for the acquisition?

The presence of a redevelopment area or urban renewal area is not related to the ability to use NTI bond proceeds.

So you can use any funds to do the acquisition for that particular property, correct, at 9th and Ellsworth?

You could use City funding, funding from other levels of government or NTI bond proceeds, yes.

So whether it's blighted or not has nothing to do with acquiring the building? When it's designated --

Well, yes. It has a lot to do with acquiring, the ability to acquire. In fact, that's the purpose of the bill today, is to authorize acquisition of that Ice House 148 4/25/07 - RULES - BILL 070005, ETC. property.