¡›î› COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE OF THE WHOLE - - - Room 696, City Hall Philadelphia, Pennsylvania Wednesday, May 14, 2003 10:50 a.m. - - - BILL 030222 - an Ordinance creating the Progress Plaza Tax Increment Financing District. - - - PRESENT: COUNCIL PRESIDENT ANNA VERNA COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN MICHAEL NUTTER COUNCILMAN ANGEL ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN TASCO COUNCILMAN DARRELL CLARKE - - - V A R A L L O, INCORPORATED LITIGATION SUPPORT SERVICES 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 ¡›î› I N D E X BILL 030222 PAGE JAMES CUORATO, Director of Commerce ......... SAM RHOADS, PIDC ........................... 11 ALVIN TUCKER, Progress Investment Assocs. .. 22 JUDITH ROBINSON ............................ 26 PAULA PEEBLES .............................. 35 PAMELA PENDLETON-SMITH, Yorktown Community Organization .......................... 40 DONALD DUCKY BURKES, PIA ................... 48 3 ¡›î›
Good morning, everyone. This is the public hearing of the Committee of the Whole regarding Bill No. 030222. I would ask Mr. McPherson to please read the title of the Bill.
An Ordinance creating the Progress Plaza Tax Increment Financing District.
Thank you. Mr. Cuorato, good morning. Please identify yourself for the record and proceed with your testimony.
Good morning, Madam President and Members of the City Council. My name is James Cuorato. I'm City Representative and Director of Commerce for the City of Philadelphia, and I am appearing here today to testify in support of Bill No. 030222, creating the Progress Plaza Tax Increment Financing District. Also here with me this morning are the representatives of the developer, and the Philadelphia Authority for Industrial Development, which is responsible under the TIF Act for preparing and submitting the Project Plan. Progress Plaza, located at 1501 North 4 ¡›î› Broad Street between Oxford and Jefferson Streets, was originally developed by Progress Investment Associates in 1968 as a 65,000 square foot shopping center. As Council Members may recall, construction of Progress Plaza had been led by the late Reverend Leon Sullivan in what was then an innovative structure recognized around the country for its melding of community control and for-profit economic development. After 35 years in operation, the site remains in community control, but is now largely vacant and in need of substantial renovation. Creation of the Progress Plaza TIF will enable Progress Investment Associates, in association with Progress Trust, Inc. and the Kravco Company, to demolish the obsolete grocery store and portions of the existing retail and office buildings, construct a modern 46,000 square foot supermarket, and renovate and add to the remaining retail and office space. In all, the minimum build-out will total approximately 93,000 square feet. The development plan further authorizes construction of a 67,000 residential tower that would be located above the supermarket on Broad 5 ¡›î› Street. Ultimate construction of this element is still under consideration. 1 million. This investment translates into between 124 and 225 construction jobs, and approximately 200 to 230 full-time equivalent permanent jobs. I might point out that the testimony that was submitted in advance to City Council contains a number of construction jobs that is somewhat higher than the numbers that I just gave you. The numbers that I just gave are the correct numbers, which is our calculation of between 124 and 255 construction jobs. The range that we are estimating for construction jobs for the project is between 124 and 255. million for the City. Beyond these additional revenues, the redevelopment of Progress Plaza ¡›î› represents a key element in our overall development strategy for North Broad Street. We are currently working on a number of projects, including the legendary Blue Horizon, a new mixed-use project at Broad and Cecil B. Moore Avenue, the expansion of the Pennsylvania Academy for the Fine Arts, and additional housing for Temple University, just to name a few, in an effort to spur the revitalization of North Broad Street. While the Avenue of the Arts South has enjoyed great success, it is now time for us to turn our attention and resources to Avenue of the Arts North. Progress Plaza can be a keystone of our efforts in this area. 5 million to be repaid from the new real estate, City sales, business privilege, and half of new use and occupancy taxes. 5 million to fund all or a portion of the TIF note. The developer will obtain the balance of the project funding. Since introduction of the Bill, PIDC has met with City Council staff, representatives of the School District, the Department of Revenue, and 7 ¡›î› representatives of the Controller's Office to review the Project Plan. School District staff has indicated that they will recommend approval of the Plan to the School Reform Commission at their meeting this evening. In closing, I would like to note that today's hearing is required by the Pennsylvania Tax Increment Financing Act to create a TIF District, and that the Act requires City Council to wait at least three weeks for final consideration.
Under the State Act, Council will not be able to act on this Bill until the regularly scheduled meeting on June 5th, 2003. In order to expedite redevelopment of Progress Plaza, I am respectfully requesting your approval of Bill No. 030222, creating the Progress Plaza Tax Increment Financing District prior to Council's summer recess. That concludes my testimony, Madam President. I would be glad to answer any questions that Councilmembers may have. As I said, also with me today are representatives of Philadelphia Industrial Development Corporation, who can also answer questions. 8 ¡›î› As I mentioned to you prior to the hearing, Madam President, I have an engagement that I'd like to try to get to by 11:30, but I will stay as long as I can, if necessary. And representatives of PIDC can answer these questions, as well.
Fine. The Chair at this time recognizes Councilman Ortiz.
Mr. Cuorato, in terms of the development and the construction, I'd like for the record -- as you know, we've approved new legislation in terms of the set asides. And I'd like to find out the percentage of individuals, the goals that we're trying to achieve in terms of minorities in the building of this, and contracts. How many minority contracts are we looking at? What is the participation of minority contractors in all phases of the development from the architecture drawings, all the way down to engineering; all the way to actual contracts in terms of steel, roofing, whatever it is; and then in the skill trades. Not just in the laborers. I'd like to know what's going to be the participation of minorities in all of the different skill trades that 9 ¡›î› are going to be put forward.
Councilman, as part of the TIF approval, an Economic Opportunity Plan is required, and City approval of that plan is required as a condition prior to closing on the financing. The development team has submitted an Economic Opportunity Plan. This is not the final plan and is still subject to negotiation. But at this point, I can provide you with the goals that have been set. And, again, I would emphasize this is not the final plan, but what the developer has presented to us thus far.
First, I would note that the development ownership equity is 60 percent minority. For construction management, the developer will make good faith efforts to engage a construction management team with at least 50 percent participation by a minority firm. For architecture and engineering and design, the stated goals are 29 percent minority, 10 percent female, percent disadvantaged. 10 1 ¡›î› For other professionals, the same percentages would be sought. For subcontracts --
Who's going to be the general contractor? Has that been established?
I don't believe a general contractor has been selected yet, Councilman.
Is the general contractor going to be from the City of Philadelphia?
I hope so. As you know, the retention of City of Philadelphia firms for all contracts is an issue that is very important to me.
Are minority contractors going to be considered for being the general contractor?
Again, I would hope so. And we can certainly ask the developer that question. I would certainly hope so. For all subcontracts, the goals are, again, 29 percent minority, 10 percent female and percent disabled. 24
The Chair 11 1 ¡›î› recognizes Councilman Clarke for a point of order.
Madam President, I don't think those numbers are the corrected version. If I can, I'd like to ask Mr. Rhoads from PIDC to talk about the agreed upon numbers as it relates to contracts and employment.
My name is Sam Rhoads. I'm with the Philadelphia Industrial Development Corporation. As the Commerce Director indicated, the Opportunity Plan, we've had some productive discussions, and the numbers that he put forward is what we had talked about to date initially. And the numbers that we are considering at this point would be in terms of labor. In terms of employment on hours would be 40 percent minority and 5 percent female. In terms of the contracting --
When you say hours, that's at the different skill levels?
Yes. That would be blended all together between skilled and 12 ¡›î› semi-skilled. The blended rate put together would be 40 percent and percent that we would aim to 4 hit. 5
Well, that bothers me a little bit. Because usually when you blend them like that, you raise up the numbers of the lower levels. I like to see a separation of those, not blended. I'd like to see a separation of laborers and the trades, and I'd like to see a higher percentage of minorities along those lines.
The Opportunity Plan does discuss the difference between unskilled and skilled labor, but sets in place those overall goals.
When you say blending, blending really leads to the distortion.
Thank you, Madam President. Is the Opportunity Plan attached to this legislation? 13 ¡›î›
It is not attached to the legislation. But the City Code requires that there's an Opportunity Plan in place prior to settlement.
So you don't intend for the Opportunity Plan to be approved by City Council?
But you do not intend for the Opportunity Plan to have to be approved by City Council?
The Opportunity Plan has been circulated to the Council District person and to technical staff.
That's a mistake. It won't pass in this Council without the Opportunity Plan being passed by City Council. Thank you, Madam President.
One thing I think we can talk about it is whether we would circulate it to you prior to the vote.
You will provide an Opportunity Plan to Council before it passes?
The Economic Opportunity Plan has to be part of the legislation, has to be approved by City Council in order for us to pass it within this Council. Period.
Okay. What we have at this point, we obviously do have a Plan that we've been in discussions with the developer on, and we can circulate a copy of that Plan.
Well, I think that Plan should be circulated. I think it has to be. Before we vote for approval of this, we need to be able to approve the Plan and attach it to the TIF.
Is it the corrected Plan, the final negotiated number?
You have discussed this with the District Councilperson?
Do you have that 15 ¡›î› revised and final Plan, so that we can take a look at it?
The Sergeant-at-Arms will make copies for Members of the Committee.
Could you explain to me -- the general contractor has not been hired, right?
But you have a general plan in terms of the utilization of subcontractors within the project?
And how are these subcontractors going to be divided and what's going to be the participation of African Americans and Latino contractors within the building of Progress Plaza?
The numbers in the Plan that are being circulated to you now contemplate 35 percent in terms of minority contracting, and I believe it's 10 percent female controlled businesses, and percent disabled controlled 16 1 ¡›î› businesses.
Do you have that in terms of a job division in terms of contracts? Do you have a schedule of how these contracts are going to be done? And 35 percent, why so low?
I mean, 35 percent we thought was a relatively aggressive goal and thought that that would require the developer to stretch, and is what we sought from the developer.
I'll have more questions after I see the Plan, Madam Chair.
Thank you. Mr. Cuorato, do we have ample parking spaces between a supermarket and the residential tower?
The answer is yes. There are 240 parking spaces that will be available in the project on the parcel.
Thank you. The Chair recognizes Councilman Clarke. 17 ¡›î›
Thank you, Madam President. Mr. Cuorato -- and I don't know if Mr. Rhoads may need to answer this. There was a letter circulated to Members of Council from the City Controller's Office that referenced various wage and business taxes, and he indicated that some of the language in the proposal was inaccurate. Can you explain that and clear that up?
Yes, Councilman. I'll be glad to do that. The Controller raised several issues following their review of the Project Plan. They asked about the fact that our wage tax revenue projections were based on a calendar year rather than a fiscal year, and asked if that discrepancy had any impact on our cost benefit balance. And the answer is, no. We did the recalculations on a Fiscal Year basis, and the difference is that we underestimated wage taxes by $5,000 over the 20-year term, which is basically negligible. So for all intents and purposes, that number remains the same. The Controller also asked why we did not compute the net revenue portion of the Business 18 ¡›î› Privilege Tax. And the answer is simply it's nearly impossible to calculate the net profit without a detailed knowledge of the specific business. We made some projections and calculated the gross revenue portion of the Business Privilege Tax only. So that's all we've included. So our number is effectively a more conservative estimate, since it doesn't include the net profits portion of the Business Privilege Tax. The Controller also referenced the construction job estimates. As I've already mentioned in my testimony, we do agree that the number that was originally submitted in the Project Plan was high due to an inadvertent error on our part. We are confident with the new numbers, which is, again, a range between 124 and 225 jobs, if we do the maximum build out. The Controller asked if future wage tax reductions would effect our projections, and the answer is, yes, that we have calculated our wage taxes based on the current approved Five-Year Plan for the City. And finally, the Controller raised some questions about whether or not there's a City 19 ¡›î› guarantee at stake in this particular TIF. We pointed out that it is the developer that's at risk if the project fails. There may be a HUD 108 Loan, which would be the source of financing for this project. If that is the case, then PIDC would underwrite that loan through it's normal due diligence process and be assured that we have sufficient collateral. Councilman, I believe those are the issues that the Controller's Office raised.
Yes. In a recent community meeting, there was, to my understanding, some issues raised about the proposed residential aspect of the project. Could you address that? Because I'm not sure that the information that was put out in various sources -- it could be accurate. It may not be accurate. I just need for the record for you to reference that housing component.
Councilman, I will give you my answer. If you want more information, I'd be glad to ask the developer to address that issue directly. The base project, the minimum project, is the entire retail portion of the development, 20 ¡›î› which is the supermarket and, I believe, another 25,000 square feet or so of retail space. If a residential component of the project proves feasible, that would be the maximum build out, and that's why we provided ranges in this TIF proposal. That would add about 67,000 square feet of residential development to the project. It would be market rate rental units. And, again, that would be the full build-out scenario. That is our understanding of the development.
Councilman, within 90 days, and certainly prior to closing on the TIF, because that would determine whether we're in the low range or the high range of the TIF amount. So that decision would be made within 90 days.
Is there a particular process that we will utilize to make that determination, not just from the economic side of the project, but also in terms of its impact on the community?
Obviously, it would be acceptable to the owner. And as the Councilman 21 ¡›î› knows, the ownership of this project is 60 percent controlled by a community group. So it effectively would have to be acceptable to the community.
I'm not talking about just the owner of the development. I'm talking about the surrounding community, the elected representatives of the community. Understanding that the ownership obviously has to do his due diligence to determine the feasibility of the project, but I'd like to talk about what process will be used in terms of having the necessary support for the expanding project that will include the residential portion? Because initially, when the project first came to us, it was simply a commercial development. And here recently there was a proposal to include housing. I'm just trying to find out what the process will be in terms of the surrounding community, not the community organization or the non-profit developer.
In terms of settlement on the ultimate loan, when the developer has made their determination about what the ultimate project is, we will make a determination with the Administration and with the District Councilperson that it's within the confines of the TIF Project Plan.
Well, since we have a representative from the non-profit, quote/unquote, community entity in this deal, can we ask them speak to the process? While I'm very excited about the possibility of having a supermarket, I just want to make sure that it's clear, first, what's being proposed; and secondly, what it's impact will be on the community. And at the end of the day I'd like to have consensus of both the community and the developer on proceeding with the project with the residential component.
Good afternoon. My name is Alvin Tucker. I'm the Treasurer of the Board for Progress Investment Associates. Progress Investment Associates owns and operates Progress Plaza, and we also are the developers in partnership with the Kravco Company for this redevelopment and expansion project. 23 ¡›î› In terms of the tower, residential tower, that was introduced in the testimony this morning, that's part of the expansion that's still under consideration. Last week, we had a community meeting, Progress Investment Associates had a community meeting where we went through our plans. And that part of the plan was introduced in that community meeting. Now, it's our understanding, as a result, there's some misconceptions that we, Progress Investment, will continue as we have since then -- in fact, I was on the radio yesterday with WHAT, and we promise -- we have a date for our next scheduled community meeting where we are going to continue to have these community meetings to not only explain our project, but also to get community feedback and acceptance and to dispel all of the misconceptions that seem to have filtered in this process to date. Progress Plaza, founded by the late Leon Sullivan, has been for over 30 years a very good neighbor in the North Central Philadelphia area. In fact, our neighbors, most of them, are part of our close to 4,000 shareholders that actually owns 24 ¡›î› Progress Investment Associates. Therefore, we intend to continue to be good neighbors. The issue on housing, as it was introduced at this Council hearing this morning, is continuing to be studied in terms of the economic feasibility because Progress Plaza, owned by Progress Investment Associates, is the only Leon Sullivan entity that's for-profit. Reverend Sullivan has many OICs and other organizations. But he chose to create, over 30 years ago, a for-profit organization to introduce to the community that model in hopes that the community will be able to learn and demonstrate asset creation and all other kinds of things that make economic sense in America. So when we embarked on this project, we looked at it from a business standpoint. But as I mentioned earlier, we're good neighbors. And our shareholders are our neighbors. So we would never do anything to create a problem or to harm our neighborhood. So we are going to have a process of community hearings. We're going to have a process of community feedback and approval.
June 5th. Anyone who wishes to attend that meeting, it will be on June 5th, 7:00 at Progress Plaza.
I would like to have that meeting before we pass the Bill.
We'll change the date, make it earlier, and everyone will be notified.
Thank you. If anyone has any questions of Mr. Cuorato, I would appreciate it if you would ask him now, because I think he has to be somewhere at 11:30. Are there any questions of Mr. cuorato? (No response.)
Thank you. Do we have anyone else to testify on this Bill? Would anybody like to testify? Please approach the witness table. Good morning. Please identify yourself for the record and proceed with your testimony.
Good morning. My name is Judith Robinson. I am a resident of North Philadelphia, North Central. I'm here today to testify on Ordinance 030222. I have three areas of concern. Most importantly is the neighborhood benefit strategy. I understand there's an economic opportunity strategy put forth. I would appreciate if we could have a copy of that, as I will be taking that back to the community to discuss, prior to this meeting coming on or before June 5th. We're very much concerned that these 200 to 220 jobs, permanent jobs, that these jobs will 27 ¡›î› be -- members of our community will be considered for these jobs. Not only considered, but that they do receive part of these jobs. Because as you know, a community cannot grow and develop if there's not economic development and benefit strategy for the general community. In addition, I'm concerned about subcontracting. I'm sure that will be addressed in this economic opportunity strategy that we will receive. That's an area that's very much of concern to me, from professional services that are starting at this point, to subcontracting opportunities. I contend when African Americans contractors have contracts, they bring African American workers. We know that from past experience. There was an Executive Order recently let down by our Mayor. I would like to know, how does this Executive Order affect this project? I understand the Executive Order was to take place immediately, and I'm concerned that this project and all other projects in the future come under this Executive Order. It's only 180 days that the Mayor has allowed for us to gather information as to remedial measures that may be needed in the future. 28 ¡›î› So I want to make sure that we have all projects, small and big, taking place under the Executive Order. The other area of concern is this Temple student housing. I am a real estate broker. And in the past, this project, along with the one at Broad and Cecil B. Moore, was presented to me, and it was presented as having student housing. I saw that with my own eyes. It was presented as very much a possibility. I live in the area. I'm very much interested in development. I am happy about it. I would be able to walk to the supermarket and partake in all of the retail that's in there, and I'm happy about that. But the impact of student housing in a community must be considered, especially in light of the fact that I know for sure Temple is looking for housing for 5,000 students and faculty. That is no 19 secret. If there is to be student housing as a part of this project, we just want to know. We want to deal with the impact that student housing will have, not just on the immediate community, but the general community of North Central. We don't want to feel like we're being overrun by student housing, while the residents and homeowners are disrespected. We 29 ¡›î› want to be real clear on that. In the past, Councilman Nutter had a Bill related to college students because there was an issue in his district. I want to know how that Bill will come into play in the area near Temple University. Because, for instance, we will have student housing, as it's being proposed at Broad and Cecil B. Moore near the movie theater project. There will be student housing at this particular project, which is about half a block away, and we know that Amirah Jeffries (ph), which was a long-term care home, there will be student housing, and that's one block west of this project. So that's a high concentration of student housing. Temple is a great employer in our community, and we welcome the opportunity to work with them. However, to have such a high concentration of student housing and not have some interaction with the community beforehand would be totally out of order and very disrespectful. We are homeowners. A lot of us. Although our neighborhood is tattered, we're on the rise. We're being revitalized and we're going to be very much a part of it.
30 ¡›î› In addition, an area of very much grave concern to me is that we have a quality of these resources. As a matter of fact, I'm sitting here with the developer from our area, who I know 6 years. She's worked very hard to get a supermarket 7 near 12th and Girard. I would like to know why 8 these same resources that are pushed to help this 9 particular developer are not pushed -- and I'm 10 asking PIDC and the Commerce Department and all of 11 you to help her to get -- not just her, but the 12 community, because we support her. Why aren't you all putting your resources behind her and behind that project? I'm not going to get personal about it, because I don't know anything personal. All I want to know is about a project that's in our community, that one of our residents is working very hard to see through, and it's not getting the same kind of support. I understand you're giving a HUD 108 Loan. I know from sitting through OHCD hearings, that you're taking money from OHCD to pay off the 108 Loan. I thought there wasn't that much money left to be giving out loans. If these are scarce resources, we need to make sure that we're putting money in projects in an equitable manner. 31 ¡›î› A big supermarket, I understand, would be a value to our community, as well as a smaller market, such as this Green Grocer will be, like the Green Grocer over in the University of Penn area. It's more like a smaller specialty type of market. The market that's being proposed by the Renaissance CDC -- and I don't want to put Paula on the spot. She's just one person. But there's many people involved with her as the community. I just would like to know about resources being allocated in our community in an equitable manner. That's pretty much all I have to say. I hope I can get a copy of that economic opportunity proposal that has been advanced for this project. In addition, I would like to make sure that the trust board understands that you're not just dealing with a small area. You're dealing with the whole of North Central, because you all are going to expect that I and other residents will come and shop at the Progress Plaza, and we certainly will. That's why we want to make sure we know what's going on along the whole process. Thank you very much. 32 ¡›î›
Thank you very much. The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. Ms. Robinson, you made mention of one piece of legislation that I had introduced in this Council, and this Council supported, the Educational Housing District Bill. And I believe your question was, what impact would that legislation have with regard to this particular proposal. The response is the Educational Housing District legislation that I introduced only pertains to the 4th Councilmanic District, which I represent. So that legislation would not extend to the area that you're concerned about with regard to this legislation, as that location is in the 5th Councilmanic District. I just wanted to respond to that particular issue.
Yes. But I think Councilman Clarke will respond to that particular issue.
Thank you, 33 ¡›î› Councilman. Good morning. Ms. Robinson, actually, as a result of Councilman Nutter's passage of his Bill, I've been getting numerous inquiries from people around the university about a similar Bill or a comparable Bill to address the concerns, and I've actually talked to the Planning Commissioner about possibly doing an overlay or a similar Bill, a student housing Bill. We will be introducing in the near the future the difference is as it relates -- I want to say that, in this particular case, Temple University is cooperating with us on this Bill in that they foresee that it is problematic for them because of the concerns that are raised as a result of their students creating problems in communities. And Mr. Adamati (ph) is going to be supportive of the legislation, so we don't have to fight them at least. Not that I don't mind having that fight. But we will be introducing something for this particular neighborhood. It's a little different environment. I want to tailor it specifically to that area. But it is a problem; the parking, the cutting up of properties in Yorktown, making them 34 ¡›î› into multi-family units. That's why I want to put the zoning aspect in there, because some of the things that they're doing are creating a problem as it relates to the fabric of the community, not necessarily just the behavior. But when you have probably the most stable housing development in the history of North Philadelphia being turned into apartments, that's problematic, regardless of the behavior of the students. So we're looking at the zoning aspect. We will be introducing something very shortly for the 5th Councilmanic District.
Yes. All of the recent proposals -- there's about three of them of significant size -- none of them will be completed, I don't believe, frankly speaking, by the end of year. I think all the projections are for to meet the student population or the resident population in 2004. So there's more than enough time to have the legislation in place before any of these units are completed.
Thank you very much, Ms. Robinson. 35 ¡›î› Good morning. Please identify yourself for the record and proceed with your testimony. Before you do that, I would like to recognize Councilman Kenney.
Thank you, Madam President. I must leave the Chamber on business and would like in my absence to leave my yes vote on all amendments and the final Bills, getting them out of Committee. Hopefully, I will return before the end of the hearing. But if I'm missing when you vote, I would like to be recorded as voting aye.
I have to leave also to take care of some Council business outside of the building, so I'm going to leave my vote also. Hopefully, I'll be back before the end of the hearing. But I'm going to be here for about another 15, 20 minutes, then I'll be leaving.
Good morning, Madam President and Members of City Council. My name is Paula Peebles, and I am a lifelong resident of North Central Philadelphia, residing on the east side of 36 ¡›î› Broad Street where Progress Plaza was built by the late, great Leon Sullivan presently still stands. I am here on behalf of the residents, vendors and businesses that oppose a TIF being approved for Kravco, the for-profit development company for the proposed new Progress Plaza. For the record, we support community progress to revitalize, to rebuild and entrap reinvestments into North Central; however, not at the cost of displacement or forced removal of the indigenous people due to gentrification. We oppose the approval of the TIF for the proposed Progress Plaza project, as the developer has been less than honest with the residents of the community regarding their intentions to rebuild Progress Plaza, accompanied by the development of an upscale Temple student apartment complex at the location known as Progress Plaza presently. We oppose this plan. We believe no tax increment financing should be given to the project under its present proposal. On May 1st at a meeting, with limited distribution of flyers in the community, was convened by Kravco and Progress Investment Corporation. Several times during the meeting, Mr. 37 ¡›î› Louis Gammons (ph) from Kravco was asked by the community residents of their intention to build housing at the Progress Plaza site. Mr. Gammons, in his arrogance, refused to confirm or deny Kravco's intentions to institute this plan. Again, we oppose the TIF of Kravco. No tax breaks should be granted to Progress Plaza under their current intentions. Why do we oppose a plan that would incorporate development of upscale Temple student housing? Temple University continues to encroach on the North Central community. We have learned from the University of Penn, now University City, which removed primarily black families from West Philadelphia. We do not intend to allow Temple Town to be developed under the guise of progress for North Central Philadelphia. Under the immediate past president Peter Liacorus (ph), we, the residents of North Central, spent over three decades of fighting to keep our homes and to keep Temple from displacing our entire community. Constance Clayton, the former superintendent of the School District, his family was displaced by Temple's forced expansion into North Central. Today, Temple's new president is 38 ¡›î› more covert with the Temple plan in that he uses for-profit developers to expand Temple into our community. A more recent exam of this is with the old Cardon (ph) Building at 10th and Berk Street. We, the community, were not informed about this project until it was well underway when we were actually informed. We were told that this building renovation would provide apartment housing for all -- and that's underlined -- all residents. Nothing could be further from the truth. In fact, the rents were set, not to accommodate our children, residents' children, or working class families of North Central. Amirah Jeffries, a senior care facility that provided long-term healthcare to area seniors located at 15th and Jefferson has now been closed by Temple and is presently being renovated to provide housing for Temple students in September. Another Temple expansion effort. My point being, Temple alleges to get involved in projects for one purpose, to camouflage their real intentions, which is to expand further into North Central, thereby displacing more and more families. 39 ¡›î› In closing, we want to appeal to you to deny the TIF for the Progress Plaza project until the developers confirm their full intentions regarding the proposed project. We shall not be moved.
Yes, today the developer may state that Temple's relationship would only be to direct students to the new proposed housing; however, just as in the case of Amirah Jeffries on the west side of Broad, and the Cardon facility on the East side of Broad, trust us, if you fail to deny the TIF request, the red and white Temple flag will be flying all around what was once a national example of black economic empowerment, Progress Plaza. We request that this be tabled until such time a full community meeting could be held where the developers will have an opportunity to fully disclose their plan. We thank you for this time.
Thank you very much. Are there any questions or comments from Members of the Committee? (No response.)
Thank you very 40 ¡›î› much. Do we have any other witnesses to testify? Please approach the witness table. Good morning. Please identify yourself for the record.
Good morning, Madam President, esteemed Members of Council. My name is Pamela Pendleton-Smith. I am the treasurer of the of the Yorktown Community Organization. I am here this morning on behalf of the President of the Yorktown Community Organization, by her authority, because she could not be here herself. Also, I am here on behalf of people who have signed petitions in support of Ordinance 030222, on behalf of 36 shareholders' letters of support -- that's in addition to the 373 petition signatures in support -- and also my fellow community members, who accompanied me here today. We, as residents of Yorktown Jefferson Manor, Harrison Plaza, Richard Allen Homes, Zion Garden Apartments, Gladys B. Jacobs Apartments and other parts of the local community, strongly urge you to pass this Ordinance creating the Progress Plaza Tax Increment Financing District. 41 ¡›î› I have copies for Madam President and for Councilman Darryl Clarke for the signatures and the letters of support. Those of us in the aforementioned communities support the development plan for a new Progress Plaza in keeping with the vision of the late Pastor Leon Sullivan to improve services to the North Central Philadelphia community and prevent the further blight in our community. Our expectation is that the Ordinance will allow Progress Plaza to reach the goal Pastor Leon Sullivan originally intended when he named it Progress. That is, to have a local, full service supermarket to service the needs of the community; to have a large construction project that creates a large number of construction jobs for local minorities; to make several management job opportunities available to African Americans; and to provide opportunities that will encourage the growth and success of local entrepreneurs. The proposed TIF District is an area that would otherwise not be adequately developed to meet the well-documented needs of our community as a whole. This community has been without a 42 ¡›î› supermarket for several years, which creates a hardship for residents, especially for the handicapped and the elderly of the community, who have to shop for basic grocery items, such as milk and bread, at the local Rite Aid and pay a premium price for it. Other residents have to travel miles to a supermarket each week, adding a travel expense they would not normally have incurred. Since I drive, I shop in South Philadelphia each week to get the fine quality of food stuffs I am used to buying. It is time to stop the hemorrhage of community retail dollars. It is time for qualified members of the community to have the opportunity to have permanent jobs locally. It is time for Progress Plaza to be restored to the glory that it enjoyed as the first major African American sponsored shopping center in the United States. It is time for Progress Plaza to represent the Avenue of the Arts North. The new Progress Plaza promises to do all of that by developing a full service supermarket that offers fresh produce, well-stocked groceries, a bakery, deli, fresh meats, and fresh seafood. It is my hope that the Progress Plaza area becomes a destination for everyone, rather than 43 ¡›î› becoming blight in our community. So in conclusion, we ask that you approve this Ordinance so that the injustice of leaving our community so long without a supermarket can be abated by developing and opening the Fresh Grocer Supermarket, by designing the plaza in such a way that will bring vitality back to the community, by offering construction jobs to local skilled craftsman and un skilled laborers, by providing opportunities for a significant amount of permanent jobs for qualified local residents that include managerial and entrepreneurial opportunities. Thank you.
Thank you very much. The Chair recognizes Councilwoman Tasco.
Thank you. Good morning. I just have a couple of questions to ask you, particularly around the involvement of construction jobs to local skilled craftsman. You know we have been in City Council working very hard to include more local people, be they African American or majority, but particularly African American and Latino, in construction 44 ¡›î› projects. What is your enforcement mechanism with the developer? Because I read the contract where it says that they will make good faith efforts. They will try. What have you all looked at in terms of how you can enforce the participation of minorities on the contract?
To date we have nothing in place in terms of enforcement. We had one meeting that was referenced on May 6th, I think was the date. That was our community meeting where the proposal -- that the renderings were introduced to the community. There were other meetings that were set up that the community is waiting to be notified of, hoping that we could bring something to the table in terms of having the project proceed according to the community and the developers coming together.
Mr. Rhoads, do you mind coming to the witness table to address this?
Again, my name is Sam Rhoads with PIDC. The Economic Opportunity Plan would be part of the loan documentation when we settle on the 45 ¡›î› TIF loan, so it would become part of the legal documentation for this project. In the Project Plan you'll see that there's provisions for reporting throughout the construction process as we're dispersing money into the project. So that would be the means for monitoring those numbers.
Given the state of the membership of minorities in some of the skilled trades, have you looked at how you might attain these goals? If the goals are not obtained, what is the enforcement mechanism? Do you have the ability to stop the project until the goals are met?
We have not looked in detail at how we would obtain those because a detailed construction budget has not been done yet. But as the plan contemplates, we would be sitting down with the developer, which again is a partnership between Kravco and Progress Investments, to look through the project budget in detail to come up with the plan for attaining those goals.
We've been going through many, many hearings over the last few years to get opportunities for Philadelphia residents, specifically minorities, in all of these projects that get built in our neighborhoods. And for you to say that it's monitoring -- I think the word Councilwoman Tasco used was enforcement. Enforcement, not monitoring. If the goals are not met, in terms of minority contracting and minority hiring, not the lower skilled job, but in terms of the high skilled jobs, the ones that really produce money, if those goals are not met, what is the enforcement? Not monitoring.
There -- I understand your question, and you're right. We've obviously discussed this many times.
The new law that we passed requires enforcement, and there are penalties in the new law. And I want to know whether that new law is going to be applied and enforced?
The contract will require them to comply with all laws of the City and State, absolutely.
Let me just finish here. I'll be finished in a minute. What I want to say -- because a lot of my people I know are in the audience, and I'm not into whether it's Temple or anybody. That's not my issue. I think the project is a fine project, and I support it. But I just caution you in trying to negotiate a contract with a developer, that if your goal is to have minorities on this project, that you are able to enforce the contract; that you look at some mechanism so that the individuals that you want working on this project are people from the community. There are skilled tradesmen out there, women, that you want on this project. And that's what my concern is. I support your project, but be very mindful. We're having this experience in my community with a project that's being built. There was a discussion about minority participation, but when the folks looked up, the workers were not 48 ¡›î› there. So you have the ability as you negotiate this contract to make sure that it's enforceable. That's the key word, enforceable. That's why I asked the questions. I yield to Councilman Clarke.
My name is Donald Ducky Burkes (ph). I'm a member of the Board of PIA. I'm a member of the Trust Board. I was the first black contractor with Reverend Sullivan in 1968 when Progress Plaza was first built. I'm a stockholder. My family is a stockholder. I will guarantee, Councilman, Mrs. President, there will no Progress Plaza if the blacks are not getting the contracts, are not digging the dirt, not putting the bricks up, not doing the plumbing. There will be no Progress Plaza. There will be no deal if the blacks do not get a piece of it. We're not going to pussyfoot around here with this 5 percent, 10 percent, 20 percent. The blacks are going to get the action or there won't be no Progress Plaza. Period.
Councilman Clarke, did you have something? 49 ¡›î›
I think I like Mr. Burkes' method of enforcement. I think that's better that anything we at the City can do. I did want to add that under the recent Executive Order and the law that Council passed, that it authorizes the City to disbar or terminate a contract of any entity or any individual who does not adhere to the existing participation goals and Ordinances that are currently on the books, so there is a mechanism within government to allow that. We just have to make sure that we implement that mechanism in time to effect this project. I just want to add that to the discussion.
Thank you very much. The Chair recognizes Councilwoman Brown.
Yes. I have to acknowledge and say that I appreciate the frustration expressed by Ducky Burkes because he was there when the first Progress Plaza was built. To underscore the remarks of my colleague, Councilman Darrell Clarke and Angel Ortiz, it suggests that benchmarks need to be written in the contracts so at different intervals 50 ¡›î› there is a look-and-see to ensure that the provisions are being honored. And I think the word that troubled me most was the word "contemplate." Because it's not really up to the developers to contemplate. The law is written as it is with the stipulations and the enforcement mechanisms built in, so it's really not something up for negotiation. That needs to be adequately shared with the developers, if they indeed want the support of the community and of this legislative Body.
My apology. The use of the word "contemplate" wasn't to soften it. Obviously, the Opportunity Plan speaks for itself and it does put in the mechanism for monitoring that throughout.
Thank you very much. Do we have anyone else to testify? The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. This is not directed at the PIDC as an agency, because there are a number of others who would be included within the context of my comments. 51 ¡›î› Councilman Ortiz and Councilman Clarke and Councilwoman Reynolds Brown and Councilwoman Tasco have asked a series of questions. The President has asked questions. My colleagues are surprised and stunned that I have not asked questions. And the reason is that my colleagues have covered all the territory. But I guess what I would say is, it seems to me that at some point we would actually start to get this right. And it would become so easy, so commonplace for us with these projects. Because all of the time and effort that goes into putting these projects together by obviously well-meaning and smart people to make these things work, all of the elements, all of the components, the numbers, the analysis, the marketing studies, all of it, is always done ahead of time. It's always done ahead of time. No one comes here to this table and says, "You know, we're thinking about maybe contemplating talking about having a project, and we'd like to come to Council and see what you think about it." I mean, there are serious people in this 52 ¡›î› room, both from the community and from the development side who have studied this thing. They've figured out that the economics work. They've talked to banks, financial institution, a whole host of folks, and put a project together. And every one of them that comes over the past few years, we always end up in a long, drawn-out, painful debate about this minority hiring and minority contracting. Half of the time we're not even paying that much attention to, you know, what's the project really about. How big is it, how wide is it, how many square feet is it, what kind of furniture are you going to have, or what color the walls are going to be. One, half the time that's none of our business. Two, we figure you guys know how to do that in the first place. But we always end up in this fight at the end with this last little piece on the minority side. And it just gets tiring after a while. I'm saying to the collective government, because we have our responsibility in this, the Commerce Department, the direct part of the government, PIDC, quasi-agencies and all the rest, if you would spend a little more time and effort on this particular piece like you do on the 53 ¡›î› financing -- no one has ever come over here and said, "You know, we have this project. We're not sure if it's going to work. We don't know if the numbers are going to add up. We're not sure if we're going to make any money, but we'd like to do it anyway." No one has ever come here and said that to me. They already know that it's a winner. Do the homework on the minority piece. Come with the full package. Give people the assurance up front when they walk in the door that all of the pieces and elements are already in place. So, what I'm going to say now is just suggest that maybe there should be some opportunity between the Council and the Administration and all of the economic development agencies, that we have a chance to sit down with you and tell you basically up front what it is that we need, what we're looking for, what do we want when you bring a project over here. If it's not completely ready, take an extra week, take another 10 days, take a month, and get it right. So that when you come, everybody is working in concert. We know what the deal is and there are no mysteries. It's not, "what can I bull you about today. How do I have to hold you, jack you up, beat 54 ¡›î› you in the head, talk about your family, follow you home." We all got other stuff to do. I'm not trying to have a fight here. (Applause.)
I would say if the interest rate is important and if the financing is important and if who you're borrowing your money from is important, then just acknowledge and accept that the minority participation or the neighborhood participation or whatever participation is as important as all the elements, and let's move on from this issue. You're going to do what we end up asking you to do anyway. What are we fighting about? Thank you.
Thank you. The Chair recognizes Councilman Ortiz.
I was just perusing this quickly, so I haven't even taken an in-depth look at the Economic Opportunity Plan. But words -- I'm a lawyer -- words have meanings. Words turn a contract one way or the other. I previously said that I don't like the aspect of the combining of the hours. I think you 55 ¡›î› have to separate that because you don't get a clear record of real minority participation along those lines. The word "encouraged" is used throughout different paragraphs. The word "encourage" means absolutely nothing. Absolutely nothing. I would suggest you replace the word "encourage" with "require." Wherever that word is at, you replace it. Those are just the Paragraph A in Section 1 and 2, and it appears a few times. I haven't looked at this. But wherever it is, it isn't an encouragement. I think Ducky said it very well. It is a demand, a requirement. If you don't meet it, you don't do it. If you don't do it, you're out of the contract. That's it. We'll get somebody else to build Progress Plaza. Because there's other people who are willing to come in and develop and do it. And it's going to be done with the TIFs and the loans. And those loans will be there for whatever developer that does the things that we're asking them to do. So I would suggest that before we approve this legislation, this Economic Opportunity 56 ¡›î› Plan be well written in order to express the thoughts that this Council has expressed, the thoughts that Mr. Burke has expressed, and then come forward with it. We don't want any nebulous words, any vague words that can be interpreted in many, many myriads of ways. We want very specific words that say, "We are going to do this; if we don't do this, this is the penalty."
Thank you. The Chair recognizes Councilwoman Brown.
Thank you, Madam President. I put my light on, not knowing Councilman Ortiz had done the same. But my sentiment is absolutely the same. I've been here for three years now, and I can clearly remember supporting the first TIF, even though I had a lot of reservations about it. And my colleague and I, Councilman Goode, talked many, many times about supporting future TIFs. And now with the legislation in place, that all members of this Legislative Body supported unanimously, overwhelmingly, the legislation authorized by Councilman Angel Ortiz, the message we believe has 57 ¡›î› gone forth throughout this entire City for those who want to do business in this City. It's part of a bigger picture to the extent that you employ people from neighborhoods, to the extent that you give young people and those who want to do the training, get the training done, jobs. The periphery domino effect is priceless. So it's unacceptable for those who want to come here and ask for TIFs any more in the future to think that someone on this Body is not going to raise the question, and what are you doing for the local community. It's unacceptable. (Applause.)
Are there any other questions or comments from Members of the Committee? The Chair recognizes Councilman Clarke.
Thank you, Madam President. I didn't hear the testimony of Councilman Ortiz, but I'm assuming that he was referencing the Economic Opportunity Plan. What I'd like to do -- and I need to talk to you about the timing of it, because there is a time limit in terms of when we need to get the Bill out. I think there 58 ¡›î› may be one or two issues in the Plan that needs to be addressed. So I would like to either amend the Bill, to have as a part of the Plan in the Bill, either on the 5th or the 29th, if we can talk about the scheduling, so we can make sure that it gets passed in a timely way. But I would like to have a little more lengthy discussion about Economic Opportunity Plan with all of the pertinent parties.
Didn't I understand that it's to be passed by the 5th?
It can't be passed until the 5th. And the only day is the 12th. So the question is, do we amend it on the 5th, then final passage on the 12th, or suspend the Rules on the 29th and amend it at that time? But there are a couple of issues that I'd clean up. And then obviously the issue with respect to the community meeting to deal with the housing, so I would offer that amendment at that time.
Great. Thank you. Any other questions or comments from Members of the Committee? (No response.) 59 ¡›î›
Seeing none, I thank you all for coming in. We really appreciate your attendance. This Committee will stand in recess until tomorrow, Thursday, May 15th at 9:30. Thank you very much. (Council adjourned at 5:00 p.m.) - - - 60 ¡›î› C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of May 14, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE OF THE WHOLE ___________________________ Lisa C. Bradley, RPR and Notary Public