Matt. Do you have a background in finance? When you say a background, do you mean have
I received business loans? Do you have a degree? Do you have a license? Have you received any
certifications in finance? I haven't, no. Do you have a background? Well, I have my master's in
business administration. I don't know if that counts. Do you have a background in construction
construction estimation? I wouldn't say that I'm an expert in it, but I mean, I've done
some construction projects, certainly. And when did you exactly type up this updated summary?
What's the question, Mr. Toner? When did I type it up? Yeah, the approximate date. How long ago
has it been since you typed up the summary? Oh, it was very recent, two weeks ago. I mean,
you can go to my references and see the last article that was cited, so probably two weeks
ago. Two weeks ago. And did you consult with a professional appraiser when you drafted this
cost summary? The two real estate agents, yes. So the real estate agent, one of them is Dan
McIntosh, is that correct? Correct, yeah. And he's based out in Westchester, right?
He is, but he sells homes in Philadelphia too and owns homes in Philadelphia.
you. Mr. Henderson, do you have a letter from Mr. McIntosh on his letterhead, whatever company
he's affiliated with? I can get that. There was a letter that was submitted, yeah. Okay, so I'm
looking in your packet at Exhibit 12. I just see a letter drafted to whom it may concern, not on
letterhead, and it actually doesn't confirm that $516,000 is a good and fair estimation of the
market value of these nine homes. Do you have any professional who has put on their letterhead or
other formal documentation that $516,000 is the actual market value of the nine homes when they're
completed? I think a way maybe to think about it is, do you know, Mr. Toner, exactly what the homes
will sell for in a year? Do you know the exact number? Mr. Henderson, I don't want to go back
and forth. If you could just listen to my question carefully. Has any professional realtor submitted
a document that's in your packet that says that $516,000, $516,000, $222,000 is a good and fair
estimation of the market value of each of the nine homes when they're completed? Well, I'm going to
pose an objection. That's exactly what this document says of paragraph three, but if he can
answer, I mean, clearly the answer is yes, but if he can answer, go ahead. I'll actually read
paragraph three, the pricing methodology used to estimate the sale price for these homes
at 6995 Pension Street can be viewed as accurate. But as with any home, there are hundreds of market
and product variables to contend with when estimating the sale price. Do you have any
document that says $516,222 is a professional estimation of the market value each of the nine
units when they're completed? I don't, no. And there's a lot of reasons for that, Mr. Toner.
There's a lot of variables that go into what the home will look like, the market conditions at the
time, what's the inventory on the market. There's a lot of variables that go into that.
And you use the consumer price index to estimate the increase in market value from 2018 to 2022.
too. That's correct, right? Yeah, just the inflationary look at money from 2018 to 2022,
correct? You didn't use a sales comparison approach, correct? Objection.
You didn't use a sales comparison approach, correct?
Objection. It's not an appraisal. Objection.
Mr. Turner, continue.
You didn't use a sales comparison approach, did you?
I didn't use a sales comparison approach, no.
are you aware that single family homes in the 19128 and 19127 area code sell in excess of
$800,000 on similarly sized lots objection that's an incorrect statement just ask if he's aware
objection it's not accurate he could answer the question if he doesn't know that he doesn't know
I mean, there's also homes that sell for less than $516,000, Mr. Toner.
There's a lot of variables that go into how a home is sold, and you know that.
Did you ever run cost numbers for the construction and sale of one single-family home on the two lots in question?
We have, and I've gone, as I've submitted, we've gone to three different GC firms.
We've had a PE firm do a geotechnical analysis that was not contested in 2018 and was deemed
to be accurate that there are unusual and unique soil circumstances that have to be
alleviated and fixed before you start any construction.
So we did do analysis on one home or two homes or four homes, absolutely.
And how much money would you lose by constructing a home with an outsell price of $800,000 on either of these two lots?
Objection. Total speculation.
This goes to the core of the minimum variance. Either he has or he has not done a calculation of the profitability of less than nine homes.
And if he has, he should be easily able to tell us in court or at the zoning board today.
Yeah, but there's no way to guarantee that the home is going to sell for a certain price, Mr.
Toner.
I'm just asking if you went through the exercise.
Those who can do, those who can't speculate, that's a speculation.
You believe that a home could sell for a certain price without understanding the market variables
that go into it.
Mr. Hunter, I'm just asking, yes or no, did you go through the exercise of calculating
the profitability of constructing one single home on each of the two lots?
Objection, he answered.
It's a yes or no question, Mr. Henderson.
It's not a yes.
He already answered objection.
Mr. Bergman, I just asked that.
I think Mr. Henderson has answered.
He didn't do that.
I mean, simple as that.
I think his presentation was very clear on what he did.
And so I think he has answered that.
He has not.
No, he has not.
Going back to the consumer price index.
Has any professional told you that the consumer price index is appropriate to use in calculating the appreciation market value of real estate?
I don't understand your question.
Are you saying that that's not an accurate way to view how money values over time?
No, no. I'm asking if the Consumer Price Index, has a professional told you that the Consumer Price Index is an appropriate index to use when estimating the appreciation and value of real estate over time?
Not consumer goods, not cars, not household products, not clothing or energy or oil supplies.
We're talking about real estate here.
Has any professional told you that the CPI is what you should apply when trying to estimate the appreciation of value in real estate?
Do you use money to buy a home?
Mr. Henderson, it's a yes or no question.
has a professional told you to use the cpi yes or no it's an accurate way to view how money
changes over time so if you buy a house with money it's an easy way to say my house sold for
468 000 in 2018 and using the cpi and now on a conservative estimate could outsell for 516 000 in
2022 again i just we're trying to get out of here at a reasonable time
so let me let me interrupt i think i think i think he he described how he did this
and you're saying did someone expert tell him to do it i think he he's he's he's a developer he
does this every day he did it on his own and i think he's fine with that if you want mr henderson
you you didn't go to an expert for that you did this because you thought it was the right way to
do it. I mean, it's as simple as that. So just to answer the question, yes or no.
so just answer the question yes or no so so i did that myself mr toner okay uh mr chairman can i
So I did that myself, Mr. Toner.
share my screen sure there's another participant uh mr demarca can you stop here i did screen share
i did i think you might have to promote him
Okay. Mr. Henderson, let the record reflect that I have now shared my screen with a printout from the U.S. Bureau of Labor Statistics publication fact sheet on rent and rental equivalents measuring price change in the CPI.
I'll object. I didn't see this in any exhibits. Mr. Henderson is seeing this for the first time, and it's not going to be able to answer questions about it, seeing it for the first time on a computer screen in a Zoom context.
This is cross-examination, and I'm going to ask Mr. Henderson if he's aware that real estate is specifically excluded from use in the CPI calculation.
I don't know if that's true from a from a hearsay evidence. It's not. That's not. That's not an evidence.
This is an official publication from the U.S. Bureau of Labor Statistics.
I'm going to object, Mr. Chairman, for those reasons. It's not an evidence. It was not provided in advance, not provided within five days.
He's seeing it for the first time. Those conclusions aren't accepted. And we don't know that that's true.
This is cross-examination, Mr. Byrne.
Well, then you can ask him a question.
So wait a minute. So wait a minute. I agree that he should have seen the documents beforehand.
So I think you should continue your cross-examination without using the document.
And I think, Mr. Tony, you've made some points that he's a guy that's a developer.
This is his project, and he's developed numbers he thinks is the right way to do it.
So I think it's going to be hard to keep the labor in that point with him.
okay mr henderson uh i represent to you that the consumer price index has been
defined as not including increase in value in real estate have you ever heard that from another
uh real estate professional objection we don't know if that's true he mr bergman he prepared
So, wait a minute, Mr. Henderson, you could just answer no.
There's nothing wrong with saying no.
I mean, I think we go back, if you did, you did, if not, just say no.
No, sir.
Okay. So in your initial presentation, you indicated that it's now your opinion that
this project is likely to lose money, correct? Two GCs have said that it will lose money given
current market conditions, correct? So you've been told this is not a feasible project?
I've been told that you need to, I mean, there's a lot of variables, Mr. Toner, that go into how a project is done.
And I have two GCs, one local inside of Philadelphia, saying that the project, if the project's going to lose money, correct?
Have you been provided with any information to lead you to believe that this can be made into a profitable project?
Say the question again, have I been provided information?
provided with any information that would lead you to believe that this can be made into a
profitable project at this point? Well, look, certainly since the first CBA hearing four years
ago, Mr. Toner, we've looked at this multiple angles and multiple ways. We've talked to dozens
of specialists and experts to try to skin the cat a different way. I mean, we've been very patient.
We're not in any rush here, but we've been told multiple times in multiple different ways
this this site has a lot of problems it has a lot of hardship going back to the helical piers
that were at issue in the first hearing um have you done a uh uh calculation on the number of
helical piers that would be needed for one single family home so the uh yes and that's in the
original report from 2018 i don't off the top of my head mr toner i don't i don't know that number
I know that they've certainly gotten more expensive in four years.
And at the last hearing, when Mr. Chairman DiCicco questioned you about how much of a cost savings would be seen if you use less helical piers on less units, have you run those cost calculations on using less helical piers?
As we sit here, take you, tell us if you run those calculations.
I'm sure that I have that data somewhere.
If that question was presented earlier, I could have given you data and given you another.
If that question was, I mean, presented earlier, I could have given you data and give you another
exhibit. I don't know it off the top of my head, Mr. Toner. So you don't know it off the top ahead
and it's not in your exhibit packet, correct? It might be. It might be in there from the
initial 2018. You know, there was 100 pages of documents and exhibits, you know, submitted.
and you don't have any comparable sales that you're looking to for years 2019 2020 2021 or
2022 correct uh like where so where the homes could sell for speculative out sales
a comparable sale analysis yeah objection there is that's the one he started with i mean you know
my question was for years 2019, 2020, 2021, 2022, you haven't run any comparable sales
analysis for those years, correct? I mean, I can tell you 19128, 19127, kind of off the back of my
off the back of my hand. I mean, two blocks away from where we live, there's 40 units that were
built. A quarter mile down the road, there were requirements built. So yeah, Mr. Toner, if you
want me to go, I can run you through the neighborhood, take you block by block and show
you units that sold for less than 515,000 units sold for more than 515,000. There's a lot of
variables that go into how those units sell and comparables. It's part art, part science. Data
without context is kind of useless. Let me take you through the neighborhood.
Oh, listen, I would appreciate the tour of the neighborhood, but really what my question is
today. Do you have any empirical evidence today of a comparable sale analysis for years 2019,
2020, 2021, and 2022? Not readily available, Mr. Toner. If you'd like me to put a packet
together, I'm happy to do that. And do you have a professional appraiser here to testify today?
No, we don't. We'll stipulate. Do you have a professional realtor here to testify today?
I don't, sir, no.
I have no further questions.
Just one redirect.
Just one redirect.
I'll just go back to that one exhibit.
Mr. Henderson, can you hear me?
I got you, sir.
Yeah, the letter from Dan McIntosh.
Did you speak to him about whether the price point that you were using for your analysis was accurate or not?
Objection, this is hearsay.
I did speak to him, yes.
Mr. Bergman, this is your second.
Well, I would say this.
It informs.
I can't testify about what a professional said outside.
So I think his testimony and the letter's fine.
I agree.
We're not going to get into it.
Something that's not in the letter.
Let me ask it this way without asking for what he said.
Did you speak to Mr. McIntosh about whether your methodology was accurate or not without telling me whether it was or not?
i did speak to him yes all right that's all mr demarco do you have other witness i just have
dan pelichotti if he's uh can be i think he's with dave is that right dave he's here he's ready
make sure he sits where you are so we can hear him clearly okay yeah i'm just gonna scoot the
computer maybe one second i'll be very brief with uh mr pelichotti i'm mr pelichotti could
you state your name and spell for the court reporter please yes daniel pelichotti p-e-l-l-i-c-c-i-o-t-t-i
right do you swear for him to tell the truth the whole truth nothing but the truth sir
yes i do i'm sorry there is one additional witness mr chairman i misspoke we also have
mr manganese to testify but i'll we'll be very brief both will be very brief
mr pelichotti i'm going to share my screen here with me
are you a uh in the business of construction mr pelchat mr pelchatty yes sir what do you do
for a living tell the board construction company i'm an owner and did you uh did you speak to dave
henderson uh when you prepared an analysis of whether this property would be uh feasible with
nine units or less yes okay and you provided a an estimate for mr henderson right yes can you
see my screen what i have on my on my screen yes is this your estimate for the construction for