COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON PUBLIC PROPERTY AND PUBLIC WORKS - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, February 1, 2006 1:30 p.m. - - - PRESENT: COUNCILMAN DARRELL L. CLARKE COUNCILMAN JACK KELLY COUNCILMAN MICHAEL A. NUTTER COUNCILMAN JUAN RAMOS COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO BILL 051231 - An ordinance authorizing the Philadelphia Authority for Industrial Development (PAID), notwithstanding any contrary requirements of the Philadelphia Industrial and Commercial Development Agreement between the City, the Philadelphia Industrial Development Corporation (PIDC), and the PAID, to convey fee simple title... BILL 050505 - An ordinance authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to extend the term of a sublease agreement with the Philadelphia Municipal Authority for space... - - - 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 afternoon. This is the Committee on Public Property and Public Works. We now have a quorum. To my left is Councilman Frank Rizzo. To my right is Councilman Kelly, Councilman Juan Ramos, and Councilman Michael Nutter has been appointed by the Council President for purposes of this hearing to this Committee. Will the Clerk please read the title of the first bill.
Bill No. 050505, an ordinance authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to extend the term of a sublease agreement with the Philadelphia Municipal Authority for a space that the City of Philadelphia subleases from the Philadelphia Municipal Authority located on the second and third floors of 111 South 15th Street, under certain terms and conditions.
Thank you. 3 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. Our first witness, will you please state your name for the record. COMMISSIONER SCHLOTTERBECK: Joan Schlotterbeck, Public Property Commissioner.
Please proceed. COMMISSIONER SCHLOTTERBECK: Good afternoon, Chairman Clarke and members of the Committee on Public Works and Public Property. My name is Joan Schlotterbeck. I am the Commissioner of Public Property. I am here today to testify in support of Bill No. 050505, an ordinance authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to extend the term of the sublease agreement with the Philadelphia Municipal Authority for the space that the City of Philadelphia subleases from the Philadelphia Municipal Authority located on the second and third floors of 111 South 15th Street, under certain terms and conditions. 4 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. This bill will permit the City to continue to lease certain office space located at the Packard Building for use by the City and its affiliated offices and/or agencies. The Department of Public Property supports this measure, and, accordingly, I respectfully ask that the Council approve Bill No. 050505. I also ask that the rules be suspended so that the ordinance may be passed on the second reading at Council. Thank you. I will be happy to answer any questions you may have.
Thank you, Commissioner. Commissioner, I have a couple of brief questions that I'd like to run through for you, then we'll open it up for other questions by members of the Committee. To some degree, you've summarized some of it, but can you kind of summarize the history of this building 5 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. and the involvement with the City leasing space and any dispute that has come as a result of these parties being involved in this lease arrangement? COMMISSIONER SCHLOTTERBECK: Absolutely. The lease's effective date was November the 8th of 2002. It terminates June 30, 2012. We occupy approximately 29,000 feet. It's the second and third floors of this building. The original tenant that occupied the space was the Office of Behavioral Health for the Health Department. Basically, what happened was, no sooner did I become Commissioner, I became aware of some unhappy tenants in one of my leased buildings. It was extremely unpleasant what they were dealing with. It had life safety implications for them. It was unhealthy. So they came to me, and I began a process to try to figure out if I could terminate the lease and relocate the tenants. So I met with the Law 6 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. Department to see what possibilities there were for me to terminate, and basically what happens next is that I get into a litigation situation with the owner, and basically we have a settlement agreement, which I think is in the best interest of all parties, and we continue to lease the space. And I'm here today as part of the agreement to have this introduced as a ten-year ordinance.
Okay. You said Behavioral Health was the original tenant? COMMISSIONER SCHLOTTERBECK: That's correct.
Any subsequent tenants? COMMISSIONER SCHLOTTERBECK: Yes. We have PCDC right now. And the other floor, I'm looking to see if I could put the administrative offices for the Emergency Shelter, Rob Hess's group. I'm hoping to put those folks in there, just administrative people, on the other 7 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. floor.
Can you summarize the precise terms of the settlement between the two parties? COMMISSIONER SCHLOTTERBECK: Basically we agreed --
If there is a settlement. COMMISSIONER SCHLOTTERBECK: No; there is. It's a lease amendment, and basically the summary is that we have agreed to introduce the ordinance. We've agreed to stay in the space. We've got a financial arrangement where I get approximately $400,000 back in rent credits over the term. We have very strong language in the lease protecting us in the event of another environmental incident in the building.
And if we didn't enact this bill, what would happen? COMMISSIONER SCHLOTTERBECK: We would continue to stay there until the 8 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. term ends.
Would it have any negative impact on our ability to have leased space? COMMISSIONER SCHLOTTERBECK: No. No negative impact at all.
These questions were obviously prepared for me, so I'm kind of paraphrasing. I usually shoot them off the top of my head. Is the primary reason for Bill 13 050505 through the need to resolve the potential litigation, or the City needs the space? Is it one or the other, or is it a combination of both? COMMISSIONER SCHLOTTERBECK: It's actually both. We need the space and it's also part of the settlement agreement, yes.
Settlement agreement? COMMISSIONER SCHLOTTERBECK: Yes.
Okay. Any 9 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. questions of this witness by members of the Committee? (No response.)
There being none, thank you. COMMISSIONER SCHLOTTERBECK: You're welcome.
Anyone else to testify on this bill? (No response.) COMMISSIONER SCHLOTTERBECK: No; just me.
Will the Clerk please read the title of the next bill.
Bill No. 051231, an ordinance authorizing the Philadelphia Authority for Industrial Development, notwithstanding any contrary requirements of the Philadelphia Industrial and Commercial Development agreement between 10 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. the City, Philadelphia Industrial Development Corporation and the PAID, to convey fee simple title to a certain property containing approximately 6 acres located between 50th and 52nd 7 Streets south of Parkside Avenue, for a 8 consideration of $400,000 to the West 9 Philadelphia Financial Services 10 Institution, under certain terms and 11 conditions. 12
Thank you. 13 Let the record reflect that Councilwoman 14 Tasco has joined the Committee. 15 Councilman Kelly. 16
Thank you, 17 Mr. Chairman. 18 Before the Commissioner gets 19 out of here, I would just like to know if 20 there was a request for a suspension of 21 the rules. 22
Yes. Sorry. Thank you, Councilman. Is there a need for a suspension of the rules? 11 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. COMMISSIONER SCHLOTTERBECK: Yes.
Thank you. Thank you, Councilman. Anyone to testify on this bill?
Good afternoon, Mr. Chairman. My name is Tom Dalfo with the Philadelphia Industrial Development Corporation. I'm here to represent PIDC, the Philadelphia Industrial Development Corporation, and the Philadelphia Authority for Industrial Development. I'm here today to support Bill No. 15 051231. This bill authorizes PAID to sell 22 acres in the vicinity of 52nd Street and Parkside Avenue to the West Philadelphia Financial Services Institution, WPFSI, for a consideration of $400,000. WPFSI, working in a joint venture with the Goldenberg Group, will develop a 300,000 square foot retail shopping center, including a full-service 12 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. supermarket, a Lowe's Home Improvement Center, smaller neighborhood retail stores and restaurants on this property. The total investment in the project is estimated to be $50 million. The project will employ 400 people during construction and approximately 640 full-time equivalent positions once opened. I would ask that the Committee consider this bill favorably and that the rules of Council be suspended to permit first reading at the next regularly scheduled meeting of Council. Thank you for the opportunity to testify. If you have any questions, I would be more than happy to answer them.
It's a lesser value because of the non-profit's 13 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. involvement?
Because of the non-profit involvement and I think the cost of assembling the property.
Actually, sometimes we actually convey properties for nominal to non-profits for purposes of development.
Thank you. Any questions of this witness by members of the Committee? (No response.)
There being none, I think we've heard enough on this particular project today.
No. That's all right. Get out while you're ahead. Thank you so much. Anyone else to testify on this bill? (No response.) 14 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC.
Thank you, Mr. Chairman. I won't need to go through any Q and A because we did that in the previous hearing of the Committee of the Whole, but, again, as a part of this record, I'd like to make a part of the record the letter that was referred to earlier with regard to the offering of certain information that is relevant to Bill 050613 on financial assistance. The bill in front of us today would trigger that legislation if it were in effect, and so I'd just like to add that document to this record as we did to the previous bill.
Thank you. Having no one else to testify, we will now move from the public hearing to the public meeting. 15 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. Councilwoman Tasco, could I please ask for a motion on Bill No. 4 050505.
Mr. Chairman, I move that Bill 050505 be reported out of Committee with a favorable recommendation and a request for the suspension of the rules.
Thank you. Bill 050505 will be reported out of Committee with a favorable recommendation with a rules suspension as to allow reading at the next session of Council. Councilman Kelly, can you please give me a motion on Bill 051231.
Yes. Mr. 16 2/1/06 - PUBLIC PROPERTY - BILL 051231, ETC. Chairman, I move that Bill No. 051231 be reported out of Committee with a favorable recommendation. I also ask for the suspension of the rules in order that this bill may be heard at the next session of Council. (Duly seconded.)
Thank you. Bill 051231 will be reported out of Committee with a favorable recommendation with a rules suspension as to allow reading at the next session of Council. Thank you very much. This concludes the public meeting on Public Property and Public Works. Thank you all. (Committee on Public Property and Public Works adjourned at 1:40 p.m.) - - - 17 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on February 1, 2006, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)