COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON RULES - - - Room 400, City Hall Philadelphia, Pennsylvania Friday, April 4, 2008, 10:33 a.m. - - - Bill 080027, Amending Philadelphia Zoning Maps by changing zoning designation of certain areas of land located within area bounded by Christopher Columbus Boulevard, (former) Reed Street, the Delaware River, and Tasker Street (extended), under certain terms and conditions. Bill 080028 - Approving plan of development for a Commercial Entertainment District in area generally bounded by (former) Reed Street, Tasker Street (extended), Christopher Columbus Boulevard, and the Delaware River. COMMITTEE MEMBERS PRESENT: Anna C. Verna, Chair James F. Kenney, Vice Chair Frank DiCicco William K. Greenlee Curtis Jones Also Present: Councilman Bill Green - - - V A R A L L O Incorporated Litigation Support Specialists 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 4/4/08 - RULES COMMITTEE - 080027, 080028 I N D E X WITNESS Lynn Fox, Bus. Mgr., Unite Here....... Roger Van, Director, Unite Here....... 11 African-American Hiring Initiative Dr. Robt. Goodman, Hampshire College 25 Rene Goodwin, Philadelphia............ 50 Philadelphia Neighborhood Alliance Carl Primavera, Esquire, Foxwoods..... 58 Jim Dougherty......................... 66 General Manager, Foxwoods Casino Nicholas F. Moles, Esquire............ 72 V.P. and Gen. Counsel, Foxwoods Casino Patricia Georgio Fox, First Deputy.... 95 Commissioner, Police Department Mayor Michael A. Nutter............... 120 Fire Commissioner Lloyd Ayers......... 143 City Residents with Flooding Issues John Moraski, 110 McKean Street....... 157 Lou Carberry, 1929 East Moyamensing... 168 Kerry Nelson, 1100 Shackamaxon Street 177 Bernard Brunwasser, Water Commissioner 193 Steve Furtek, Chief Engineer.......... 198 Water Department Ed Kerlin, Pennsport Civic Association 204 Frank Morelli, Survey Bureau Manager 215 Department of Streets Mark Cilloni, Civil Engineer.......... 224 Pennoni Associates (Everett Gillison testimony attached.) 3 4/4/08 - RULES COMMITTEE - 080027, 080028
Good morning, everyone. Thank you so much for your patience. This is a continued public hearing of the Committee on Rules regarding Bill No.'s 080027 and 080028. I would ask Mr. McPherson to please read the title of the bills. MR. McPHERSON: Bill No. 12 080027, an ordinance amending the Philadelphia Zoning Maps by changing the zoning designation of certain areas of land located within an area bounded by Christopher Columbus Boulevard, (former) Reed Street, the Delaware River, and Tasker Street (extended), under certain terms and conditions. Bill 080028, an ordinance 21 approving the plan of development for a Commercial Entertainment District in the area generally bounded by (former) Reed Street, Tasker Street (extended), Christopher Columbus Boulevard, and 4 4/4/08 - RULES COMMITTEE - 080027, 080028 the Delaware River. Do you want me to call the first witness?
Yes, please. MR. McPHERSON: The first witness is Lynn Fox, Unite Here. (Witness comes forward.)
Good morning. Please identify yourself for the record and proceed with your testimony.
Good morning, Madam President, and members of the Rules Committee. My name is Lynn Fox. I'm the business manager for Unite Here, which is the hospitality union, and that's the union that welcomes you to Philadelphia, and so I'd like to thank you for welcoming us to testify here today about the Foxwoods Casino proposal, which our union cannot yet support. And behind me, I have some 5 4/4/08 - RULES COMMITTEE - 080027, 080028 members who are representing all of us here today and took time off from work to be here today. And I'd like you to look, 'cause this is what our union looks like, these beautiful faces.
I'd like to say welcome and thank you for coming.
Thank you. Forty years ago today, Reverend Martin Luther King, Jr. was marching with sanitation workers in support of their union, when violence took him away from us. And he understood that collective bargaining was the keystone to a strong economic future for workers of all races, but especially for the economic future of the African-American community. So, it is appropriate today that we gather to discuss whether Philadelphia's newest industry, gaming, will produce an economic future of prosperity or poverty and 6 4/4/08 - RULES COMMITTEE - 080027, 080028 whether this opportunity will be limited or will be made available to everyone from our great city. We have two primary concerns. Number: Number one, Foxwoods has not committed to hiring a workforce that is representative of the City of Philadelphia. The City should hold Foxwoods to the highest possible standard during their current negotiations of the economic opportunity plan. And two, Foxwoods' job quality commitments are inadequate. They have not agreed to work with our union on the permanent jobs and have not made commitments to job standards comparable to other unionized casinos in Atlantic City or Chester, Pennsylvania. Our union, Unite Here, represents almost half a million workers across North America, about two-thirds of them in the hospitality 7 4/4/08 - RULES COMMITTEE - 080027, 080028 industry such as hotels, gaming, and food service. We represent over 100,000 casino workers across the country from California and Las Vegas to Detroit, Mississippi, from Rhode Island, and even Chester, Pennsylvania. We represent the workers in every Atlantic City casino. We are the casino works union. And in Philadelphia, Unite Here's 9,000 members clean the hotels, wash the laundry, sew the uniforms, and serve the food in the Philadelphia school system, at the airport, in the stadiums, at the Convention Center, and at Harrah's Chester. Eighty-five percent of our members not only work within the City limits but also live within the City limits. We are Philadelphia. And we vote in Philadelphia. Our overall membership is majority African-American and three- quarters minority. Because it's most 8 4/4/08 - RULES COMMITTEE - 080027, 080028 relevant to the Foxwoods comparison, we've broken out the demographics of the workforce at all of the unions hotels in the attached slide, you will see 63 percent African-American 7 percent immigrant; and altogether, the 8 unionized hotel workforce in the City 9 is 83 percent minority. And remember, 10 that number, 83 percent, when you 11 evaluate the commitments that Foxwoods 12 is proposing. 13 And Foxwoods' own commitments 14 over time have eroded. For example, in April of 2006, Foxwoods testified before the State Gaming Commission that in Pennsylvania, the facility will consist of 40 percent of minorities. However, in the November 2007 agreement with Philadelphia, Foxwoods agrees only to aspirational participation ranges of 30 percent for the operations staff. So please remember that their goals are aspirational, not contractual. 9 4/4/08 - RULES COMMITTEE - 080027, 080028 And an aspirational goal of just 30 percent is even more problematic when we consider that the City's union hotel workforce is over 80 percent minority. For a city like Philadelphia, that 30 percent is just wrong; we can do better. And the City has to address this concern, and you have an opportunity to address it because, according to Foxwoods' January 2008 agreement with the City, they're required on or about March 21, 2008, to adopt an economic opportunity plan reasonably acceptable to the City, and it's our understanding that such a plan has been submitted to the administration but not yet been approved, and strong standards really need to be established here. At the end of the day, however, the strongest and most enforceable commitments are those established in a collective-bargaining 10 4/4/08 - RULES COMMITTEE - 080027, 080028 agreement.
The best way to really achieve a strong record of minority hiring is to use a bargaining relationship to secure an employer's commitment to fair hiring practices. And although we currently have strong minority representation in our unionized hotel workforce, we have recently witnessed a trend towards hiring immigrants rather than African-Americans for new job openings. And we have sustained strong levels of minority representation primarily due to the seniority and hiring protections in the union hotels. But we're concerned by the trend and so we intend to pursue a diversity initiative during our upcoming negotiations with the Center City hotels to make sure that Philadelphia retains its stellar record. I'd like to introduce for just a few brief moments Roger Van, who is 11 4/4/08 - RULES COMMITTEE - 080027, 080028 the national director of Unite Here's African-American Hiring Initiative, and he can speak about our initiatives in other cities and to preview some of what we hope to accomplish here in Philadelphia. Thank you, Roger.
Thank you, Lynn. Good morning, Madam President and members of the Rules Committee. My name is Roger Van. I'm the director of Unite Here's African-American Hiring Initiative. And Lynn has already discussed the numbers of African-Americans in Unite Here's workplaces with the hospitality industry in the city. And I have to say the numbers in Philadelphia do look good compared to the national trend; and to date, Philadelphia seems to be bucking the national trend in these unionized workplaces. Not too long ago, the hotel 12 4/4/08 - RULES COMMITTEE - 080027, 080028 industry in most American cities had a racial makeup similar to Philadelphia's, but over the past 5 years, as the industry has grown 6 significantly, the number of 7 African-Americans employed in hotels, 8 restaurants, and gaming facilities has 9 dropped steadily. 6 percent of the 12 hospital workers are African-American. 6 14 percent. And in both San Francisco 15 and Los Angeles, it's less than 5 16 percent. 17 And for most African-Americans 18 who are able to find work within the 19 industry, job quality is a very 20 serious issue. Nationally, more than 80 percent of the African-Americans employed in the hospitality industry are stuck in non-union, low-wage jobs with limited or no benefits, according to a recent study from U Cal-Berkley. 13 4/4/08 - RULES COMMITTEE - 080027, 080028 So African-American numbers are down significantly throughout the industry, but the picture is worse in unionized workplaces nationally. Reversing this trend is a national priority for our union. Beginning with our 2006 contract negotiations, we convinced employers in several cities to join us in a commitment to increased African- American hiring. As a result, the African-American Hiring Initiative has been launched in four cities: Boston, Chicago, Los Angeles, and San Francisco. And we hope to have similar contract language here in Philadelphia in the very near future. Our basic program involves the creation of a local task force comprised of employers, union representatives, and community members. This body is responsible for developing an outreach program that informs and educates the community 14 4/4/08 - RULES COMMITTEE - 080027, 080028 about job opportunities and workplaces covered by agreements with the union. They review hiring data and procedures and make recommendations about aspects of the application process that may present obstacles to members of the African-American community. They work with existing community job development and training programs to identify potential job applicants. And in two of our cities, they're beginning to hire staff to oversee the task force process. Our long-term goal in each of these cities is to replicate the success of the Culinary Training Academy in Las Vegas Nevada. The academy is a joint management partnership representing over 30 resort and gaming properties. The culinary union, Local 226, and the bartenders union, Local 165. Founded 1999, CTA is the country's leading and hospitality 15 4/4/08 - RULES COMMITTEE - 080027, 080028 training center. The academy is made up of several departments. The chefs, stewards and food and beverage departments are designed to produce employable entry-level workers, while incumbent workers are offered more advanced training courses to prepare for advancement. Each year, the academy trains approximately 3,000 students, and participating employers hire more than 85 percent of their graduates. And these are all union jobs with good wages and good benefits. CTA draws its students from Clark County, Nevada, which is only 9 percent African-American and 38 percent minority, but it graduates 17 percent African-Americans and 68 percent minorities in their classes. The Culinary Training Academy was not an overnight success story; it's been a 15-year work in progress. The trends in the African-American 16 4/4/08 - RULES COMMITTEE - 080027, 080028 hiring will be difficult to turn around in four initiative cities.
However, Philadelphia can be different, but this city cannot be content with the status quo. The numbers might look good today, but if the national trend is any indication, it is only a matter of time before African-Americans begin to disappear from the workforce in the hospitality industry. This city has the luxury of attacking this issue prospectively and proactively, and we want to help. Our international union is enthusiastic about partnering with Philadelphia to implement an African-American hiring program. In order to lay the groundwork for such a collaboration, we urge you to support Lynn's recommendations so that we can secure and build upon the union jobs in Philadelphia's hospitality industry. Thank you. 17 4/4/08 - RULES COMMITTEE - 080027, 080028 Lynn?
Are there any questions from members of the committee?
Thank you very much. Thanks, Roger. There's more -- the reason why is 'cause there's more at stake here than just who gets hired. We also need to be attentive to the quality of jobs that are created. Three years ago -- I guess it was three years already -- I had the honor and privilege of serving on the Mayor's Gaming Advisory Task Force. And in our final report, the task force laid out clearly that the anticipation that these jobs should be high-quality union jobs and the report also describes a path for building 18 4/4/08 - RULES COMMITTEE - 080027, 080028 such a labor/management partnership. I excerpted a couple of pages from that report and gave it to you in the materials. And in it, you'll see a number of reasons why it's important that these permanent jobs become unionized gaming jobs. Achieving those good jobs is vital to our city's economic future. As you can see on this graph, the hospitality industry is the fastest- growing industry in Philadelphia. These are the jobs that will determine whether Philadelphians can own their own home, spend evenings at home with their children instead of at their second job, and can invest in their neighborhoods and churches. We are a city of neighborhoods and the quality of our neighborhoods depends upon the quality of our jobs. But that's not all. Half of our City budget comes from wage tax. Higher wages means more tax revenue 19 4/4/08 - RULES COMMITTEE - 080027, 080028 and lower tax rates for everyone. Low wages produce budget crisis. So we can see we're all in this together. And unionize gaming jobs are some of the best jobs in the service sector. Unions set the job-quality standard in this industry. In general, unionized gaming workers earn wages that put them squarely in the middle class. They have full family health insurance entirely paired by the gaming employer, which is a rarity today -- you can read the headlines and see for yourself about the health care crisis in this country -- and they enjoy defined benefit pension plans that, again, are paid for by the employers. Only 8 percent of service workers in the country can say the same. And in Las Vegas, for instance, roughly 70 percent of our membership reside in a home that they own, which is the epitome of the 20 4/4/08 - RULES COMMITTEE - 080027, 080028 American dream that's often too far out of reach for service workers. And in addition, service workers in the gaming industry are some of the few that, in partnership with Unite Here, have developed substantial training and growth opportunities for its employees. Roger spoke of the Las Vegas Culinary Institute. The same is true in Atlantic City, where we have joint apprenticeship programs that work with the criminal justice system to move people into steady employment. ) and PWDC. In short, the fastest-growing sector of our economy is the service sector. If we can create service- sector jobs that help people into the middle class, that have health and pension benefits and a path to a 21 4/4/08 - RULES COMMITTEE - 080027, 080028 better future for workers and their families, then we will prosper. Harrah's in Chester County agreed to work with our union and granted their employees a free and fair process to decide whether they wanted to join the union. The process worked, the employees joined the union. We're currently in negotiations, but I'm pleased to report that we have reached agreement on diversity language that puts into the contract assurances that the workforce will continue to reflect the community and specifically on African-American hiring in the community. So there's a number of outstanding questions about the permanent jobs at the Foxwoods development: Will Foxwoods work with our union, as described in the Mayor's Task Force report? 22 4/4/08 - RULES COMMITTEE - 080027, 080028 Will they make a contractual commitment with our union to support African-American hiring? Will they provide a family health care? Will they provide a defined benefit pension plan?
Will they commit to provide wages and benefits that meet or exceed those at the Atlantic City casinos or Harrah's Chester? We encourage you to hold Foxwoods to the highest possible standards, and we stand ready, when invited, to join in and help make this world-class facility be what it should become with these good jobs. So I thank you very much.
Thank you. Are there any questions? The Chair recognizes Councilman DiCicco.
Thank you, 23 4/4/08 - RULES COMMITTEE - 080027, 080028 Madam President. And good morning.
You may have mentioned this in your remarks. I apologize if I was not paying complete attention. Sometimes these things are good and then sometimes they're rather distracting. Have you had any contact with the local people who are -- who would be the operators of the Foxwoods Casino here? Have you had any discussions with them to date?
We have met a couple of times. Those conversations have not led to any meaningful discussions, and so, the answer to that is: Yes, but not in substance.
Could you, without divulging anything that may not be appropriate, give us a sense of what those conversations were about and where Unite Here is and where the Foxwoods people are in relationship to 24 4/4/08 - RULES COMMITTEE - 080027, 080028 what we're trying to accomplish?
I don't know if I have any further questions, but thank you for coming in and --
You know we've worked well in the past in projects in my district. And if this becomes a reality, we'll certainly be at the table, all of us, to try to work through this as well.
Thank you very much. MR. McPHERSON: Our next witness is Dr. Robert Goodman.
(Addressing Ms. Fox.) Just a moment, please. I'm sorry. I am told that Mayor Nutter 25 4/4/08 - RULES COMMITTEE - 080027, 080028 will be coming up to testify between and o'clock today so that if, in 4 fact, your group would like to stay to 5 hear what the Mayor is going to -- 6
Our 12 next witness, please. MR. McPHERSON: Dr. Robert Goodman. (Witness comes forward.)
Good morning Madam President and Councilmembers. My name is Robert Goodman. I'm a professor at Hampshire College in Amherst, Massachusetts. I'm the former director of the United States Gambling 4/4/08 - RULES COMMITTEE - 080027, 080028 Research Institute and director of a two-year study funded by the Ford Foundation and the Aspen Institute on the economic impacts of gambling. I also worked with the late Senator Paul Simon from Illinois, Democrat, and Richard Luger, Senator of Indiana, and others in the Congress on setting up the National Gambling Impact Study Commission. And I appreciate the opportunity to come here again to talk to you about some of the research that's been done on the impacts of casino gambling throughout the United States and give you an opportunity to think about how that might impact your situation here. I know that this has been a very controversial issue in this state. As you probably know, it's been controversial in other states, but you have a unique situation here, if I understand it correctly, where a 27 4/4/08 - RULES COMMITTEE - 080027, 080028 city is -- seems to be against having casinos but is being forced by the state legislature to have casinos. I'd like to talk about three points today: I'd like to talk about the economic impacts of casinos; I'd like to talk about city planning issues, how they would affect the City of Philadelphia; and then I'd like to talk about something that I've often been asked to address, and that is, since we're desperate for jobs -- and this is a situation not unique to Philadelphia, as you probably know -- what other alternatives are there, if we can't have these casino jobs, if we can't bring in money for public services, what else can we do. I should say right off the bat that my research doesn't focus on gambling issues. I happened to get involved in this because I was offered a grant to look at this because my background is in how cities and states 28 4/4/08 - RULES COMMITTEE - 080027, 080028 do economic development more generally. Right now, I happen to be studying the transportation industry, looking at how jobs are being affected in the automobile industry, how union jobs are being affected, as well as in other transportation industries and what the prospects are for the future. I've often been accused, I have to say, by the gambling industry of having made a career out of research in gambling, and it's only been a very -- if it's been a career, it's very a very short-term one, and I'm hoping that I won't remain characterized that way in the future. So in terms of economic impacts -- and I think most researchers will agree on this, they will disagree on the numbers. And, in fact, the gambling industry itself on some of these issues has conceded that this is true. There are two kinds of 29 4/4/08 - RULES COMMITTEE - 080027, 080028 impacts. One has to do with the costs of dealing with problem-gamblers. The problem-gambler is, in terms of the clients in a casino, a relatively small number, and it really depends on what part of the country you're in and how much gambling is available in that part of the country. All of the research shows that essentially the more gambling you have available to people, the more problem-gamblers you're going to have. S. study, which was a $5 million, two-year study, said that having gambling within a 50-mile radius of a population will double the prevalence of problem-gambling. Now, this was a commission, I should say, that had members of about the Indian gambling community, a member from the union that just spoke to you now and from the private casino industry as well as opponents to casino gambling. So the reason -- 30 4/4/08 - RULES COMMITTEE - 080027, 080028 that was probably the most objective and diverse research that had ever been done. But what are these costs?
Well, the costs -- very often what people talk about is the cost of dealing with problem-gamblers, that is putting money into an 800-hotline, having compulsive-gambling groups, providing therapy for compulsive gamblers, et cetera. That actually is a very small percentage of the cost. And, in fact, if that were the problem, it could be eliminated with a very tiny percent of -- a fraction of gambling-industry revenues. The real costs are to people other than the problem-gamblers. What happens when people get in trouble over their gambling is, they'll engage in activities that are costly to other people. They write bad checks, they embezzle money where they work, they commit fraud on insurance, on credit 31 4/4/08 - RULES COMMITTEE - 080027, 080028 cards. In some cases, they engage in outright robbery. In many cases, they go bankrupt. When that happens, those are costs to other people. They're costs to contractors, who don't get paid for work that they've done; they're costs to governments that don't pay taxes, et cetera. There are also the criminal-justice costs of prosecuting people. Now, an interesting thing here is that many times, criticisms of casinos have to do with the involvement of organized crime and other really abhorrent criminal behaviors. What we found in our research was that most of the crime related to casino gambling is white-collar crime. And in most of the cases, it is people who have never had trouble with the law before; these are sort of first-time offenders. Those costs, if you include 32 4/4/08 - RULES COMMITTEE - 080027, 080028 the criminal-justice costs in our study, came up with $13,200 per problem-gambler per year. We've looked at a lot of other studies, and they're also in the same range. So in general, as a rule of thumb, we've said it's in the range of about $10,000 per problem-gambler per year. Now, as I said before, it's a relatively small percentage of the population, but they account for a greater -- a major part of casino revenues. Depending on the part of the country you go to, it will be anywhere from to 50 percent of 17 casino revenues coming from 18 problem-gamblers. So this can be a 19 very expensive cost to other people. 20 Now, what percentage is it? 21 Well, if you go to a part of the 22 country that's had very little 23 gambling, it's in the range of about 24 or 2 percent of the adult population. 25 If you go to a place Louisiana -- 33 1 4/4/08 - RULES COMMITTEE - 080027, 080028 which not only legalized casinos but legalized slot machines at racetracks, legalized slot machines at bars and restaurants, and even legalized slot machines at truck stops -- their prevalence of problem gambling is 7 percent of the adult population of that state. Now, Louisiana is an interesting example and, I think, might be useful to think about in Pennsylvania as well as other states. The original proposal was simply to have casino gambling. The race tracks came in and said, That's not fair to us, we should have slot machines at racetracks. The bars and restaurants came in, the bar and restaurant associations came in and said, That's going to reduce our revenues at bars and restaurants, and so we would like to have slot machines. Then the truck stops came in. 34 4/4/08 - RULES COMMITTEE - 080027, 080028 So one after another, these different businesses that were going to be affected by the casinos got slot machines. And slot machines, as you may already know, are the major part of a casino's revenue. So whether it's in a racetrack or in a casino or are in a bar, the critical thing is that it's a slot machine. And a casino something on the order of about two-thirds and in some cases 75 percent of the revenues will come out of slot machines. So we can call it casinos or racinos, or whatever you want, but it's basically a slot machine industry. Now, what's the other major cost? And you probably heard a lot about this, and that's the substitution effect.
Casinos depend on discretionary revenue; that is, people spending their money in the casinos that they might have spent on some other activity. 35 4/4/08 - RULES COMMITTEE - 080027, 080028 The kinds of activities that usually are impacted would be furniture sales, automobile sales, restaurants, bars, clothing sales, sports events, movie theaters. The interesting thing here is -- and I'm very curious. This is the only state -- and I don't know if the State did it or if it's just the Greater Philadelphia area, but it's the only place in years of looking at this where a Chamber of Commerce has come out in favor of casino gambling. Most of the members of the Chamber of Commerce have been against it. I've been to Rhode Island, to Ohio, to a whole host of other states where I've been invited by Chambers of Commerce to look at what the impacts would be on their local businesses. And why -- I haven't had any conversations with the Chamber of Commerce here but, why the Chamber of Commerce -- and I believe it's the 36 4/4/08 - RULES COMMITTEE - 080027, 080028 Greater Philadelphia Chamber of Commerce -- came out in favor of this I can't understand from an economic perspective. And if someone could elucidate me on that, I'd be very happy to understand it. The predictions -- when I looked at some of the predictions before Pennsylvania got casinos and slot machines at racetracks, there were different predictions. Roughly in the range of $250 million would come out of the State's other businesses and then go into casino and slot machine gambling. Now, here's an interesting phenomenon. Right now, on a -- if you go to Atlantic City, and you've probably read about this in the newspapers, I'm sure you're aware of it, the revenues in Atlantic City are down roughly in the range of 10 percent. Now, as I recall, the 37 4/4/08 - RULES COMMITTEE - 080027, 080028 arguments here, in Pennsylvania, were that the reason for putting slot machines here, or one of the major reasons, was to try to keep the money that was flowing down to Atlantic City here in the state, that all of those millions of dollars would be trapped here in the state and people could gamble at home. When you look at the actual figures, it's running in the range right now of about -- Atlantic City runs at about $5 billion a year. 5 billion a year. So the impacts in terms of how much you're holding back here is actually quite small. Most of the money, over a billion -- roughly in the range; I shouldn't give you any precise figures 'cause this is just a rough calculation, but roughly in the range of about a billion dollars now in 38 4/4/08 - RULES COMMITTEE - 080027, 080028 Pennsylvania are coming out of gamblers from new gamblers, not people going to Atlantic City, but new gamblers in Pennsylvania. Now, if that's the public policy that the state legislators wanted to have, they certainly didn't promote it that way. I mean, basically, it's a policy of saying, We can get people in Pennsylvania to gamble a lot more than they do now. It's not just bringing those jobs -- the jobs -- the revenues that they brought back from Atlantic City are a small percentage of the revenues that are going into those slot machine parlors or racinos, or whatever they're called here in Pennsylvania. So if that, indeed, is the policy, I think it ought to be transparent, and that's the way the legislators ought to promote it, not as a way of simply trapping dollars that might have gone someplace else. 39 4/4/08 - RULES COMMITTEE - 080027, 080028 Now, getting to the second issue I mentioned -- and that is the planning and where you place casinos in a city -- I was very surprised that the City Planning Commission here -- this was the second surprise; one was the Chamber of Commerce decision.
But then I looked at the Planning Commission decision, and I've never seen a decision like that, putting an activity with an enormous amount of traffic, pollution, noise next to a very -- or very close to, I should say, a residential community. If you look at the history of zoning -- and I teach a course in zoning. If you go back to the early part of the 20th Century, and the whole purpose, the reason that the cities -- the states and then the cities were given power to zone was to keep unattractive activities away from residential communities. If you look at the first decision, the Euclid 40 4/4/08 - RULES COMMITTEE - 080027, 080028 decision, by the Supreme Court, and that had to do with keeping unattractive activities -- protect residential communities. So here you have a case of professional city planners saying that it's a good thing to put an activity that has some extremely negative aspects to it next to a residential community. This is very difficult, at least from a city planning point of view, to understand. So before I see if you have any questions, I'd like to get to this last point, which is -- which, I guess, is the most interesting to me, I should say, since I'm interested broadly in how cities and states do economic development, not just gambling. The one thing that's interesting is that in just about every study that I've seen and that we've done, there's never been any 41 4/4/08 - RULES COMMITTEE - 080027, 080028 group, any popularly mandated group that's put together a citizens group that's argued for bringing casinos to a state. No group, other than the casino industry and legislators, has said, We don't have enough gambling opportunities. What we've seen -- we've looked at this. We've seen groups that are arguing in favor of marijuana, we've seen groups saying that people shouldn't use fur, a whole host of different groups about the environment, but never a single group saying, The state is not giving us enough opportunities to gamble and please locate casino or other gambling opportunities. What we have seen is states that are actively trying to deal with their job problems, with their economic problems. And certainly I don't have to tell anyone that we have some serious economic problems, 42 4/4/08 - RULES COMMITTEE - 080027, 080028 especially at this time, when we've -- depending on who you talk to, are either deeply into a recession or just entering it. Now, here's an interesting thing. In Massachusetts -- and I think this relates to your dilemma here, although they had a much easier time in Massachusetts. Just recently, a very popular governor proposed three major casinos for the state. As in many other states, race tracks were asking for slot machines, but the proposal was for three major casinos, and everyone I spoke to, when this was proposed, said, This is a done deal. Our economy is in bad shape, we need the jobs, we're going to create 20,000 jobs, we're going to bring in $400 million a year to the state budget to help pay for people's real-estate taxes, similar to what was going on here in Pennsylvania. And this was supposed to be a 43 4/4/08 - RULES COMMITTEE - 080027, 080028 done deal. When the legislators looked at this, even though the Governor was pushing this very hard, the legislators looked at this, and they realized the economic impacts, they realized the social impacts, and they decided against it; by an overwhelming vote, they decided against this. Now, I was asked during that time to debate this issue with people from the administration, from the governor's office, and I have to say that I voted for the governor, I actually contributed to his campaign and got other people to vote for him, and I think he's a very good governor. On this particular issue, I don't think he or others in his administration understood carefully the economic impacts; when other legislators looked at it, they did understand that.
And here are some of the 44 4/4/08 - RULES COMMITTEE - 080027, 080028 arguments during these debates that I had. I talked to people in other businesses. One person who runs an entertainment venue, a major entertainment venue that's been going on for years, his complaint was that if casinos come in, what he's seen is that in order to attract -- he was going to have a difficult time attracting entertainment talent. We're very close to Foxwoods and Mohican Sun casinos in Connecticut. He says that at Foxwoods, what happens when a performer comes in, they have to sign a contract. First of all, they can pay the -- because they are -- they're being subsidized by their casino revenues, they can pay their entertainment much more than any local entertainment venue can pay for this. So they'll bring in top-name stars. They have to sign a contract that essentially says they will not perform 45 4/4/08 - RULES COMMITTEE - 080027, 080028 in any other venue within X-amount of miles of that casino for a number of years. His complaint was that that essentially, that kind of competition is something, if they didn't have slot machines, they could never go up against. So he saw the end of his business. It's a business that had been operating for many, many years. And I've heard similar stories about that. In Saratoga, New York, the Chamber of Commerce there, which turned down casinos, they bring in entertainment from New York City and other places, New York City Ballet, and other major entertainment enterprises. Again, they recognized that if casinos came in, that would be the death of those enterprises. So you have major impacts on these local businesses. I was asked some years ago -- when Howard Dean was governor of 46 4/4/08 - RULES COMMITTEE - 080027, 080028 Vermont, and he was trying to keep casinos out of Vermont and so were a number of other legislators. "
Doctor, excuse me. Your testimony is really very, very enlightening and very interesting. However, we do have a number of witnesses --
-- that would like to testify. And we would like to hear from all of them.
So if you could conclude your statements -- 47 4/4/08 - RULES COMMITTEE - 080027, 080028
Okay. I'll summarize what I was going to say about the future of jobs and to say that I recently came back from Wyoming and Montana where I had work, looking at the creative economy, where people are trying to create jobs in entertainment, the arts, and other things that they think of as the future. There are other jobs in other states, including Pennsylvania by the way, that are green jobs that are now expanding. The future is that over the next ten years, the predictions are that about 5 million jobs in green industries will be created, and the question is whether they will be in this country or elsewhere. That's jobs in solar panels, wind energy, 48 4/4/08 - RULES COMMITTEE - 080027, 080028 alternative energy, weatherization of buildings, et cetera. My own sense is that a state, if it really wants to create jobs for the future, is going to be looking at those kinds of jobs and the ways that it can support it. Pennsylvania's already doing that. You have companies coming here from Germany, from Spain, from Taiwan locating manufacturing operations here. So I think that's the kind of jobs we're likely to have in the future. I'd just like to -- in summing up, I'd just like to show you just a few pictures. I just happened to be looking at a casino in Hollywood, Florida. This is a major casino. This is the Seminole Casino. I wish I had bigger pictures to show you there. They talked about attracting other businesses to this casino, from an economic perspective, having a 49 4/4/08 - RULES COMMITTEE - 080027, 080028 multiplier effect. If you go across the street from this casino, this is what you'll see. (Dr. Goodman holds up pictures.)
A half a dozen pawn shops. This is called Players Pawn Shop, Casino Pawn Shop, Quick Cash Pawn Shop, Family Pawn Shop, et cetera. I have other pictures. You only have to go down the street to Atlantic City to see the same thing, and that's the kinds of businesses you're likely to attract here in Philadelphia to this casino -- these casinos. I appreciate the opportunity.
Thank you very much. Are there any questions from members of the committee of the doctor? (No questions.) (Applause.) 50 4/4/08 - RULES COMMITTEE - 080027, 080028
Our next witness? MR. McPHERSON: Dr. Everett Gillison. (Dr. Gillison is not present.) MR. McPHERSON: The next group is the Philadelphia Neighborhoods Alliance. (Witness comes forward.)
Good morning. Please identify yourself for the record and proceed with your testimony.
My name is Rene Goodwin. I'm a resident of the Pennsport area and I'm also a member of the Philadelphia Neighborhood Alliance. There is another member to join this panel who should be here any moment; hopefully, he will come in while I am testifying. 51 4/4/08 - RULES COMMITTEE - 080027, 080028 I want to, first of all, start out by saying I'm not anti-casino; I just support resiting the casinos to other sites. And I also want to start out by saying it is truly a pleasure to be here with you today, today in particular, because it's good to know that somewhere in the State of Pennsylvania, there are elected officials who uphold democratic principals. (Applause.)
And believe in government for the people and by the people. (Applause.)
"Public safety," under prior city administrations, was an umbrella term referring to various services provided by police and fire departments. Examples of quality-of-life crimes addressed proactively by policy by the police 52 4/4/08 - RULES COMMITTEE - 080027, 080028 included panhandling, car break-ins, snatch-and-grabs, prostitution, drugs, public intoxication, and public urination. The Fire Department provides services in three categories: fire suppression, EMS (emergency medical services), and special-events response teams including, hazmats. Existing resources are not adequate to address an increase in any of these services. The services are already strained and barely able to keep up with the demand for services placed on them. The new administration is seeking ways to maximize its resources so is that police presence can be felt. Several years ago, there were threats to close fire stations, and that brought quite strong responses from the community. It is a given that casinos will bring significant increases in 53 4/4/08 - RULES COMMITTEE - 080027, 080028 the number of people traveling through the city, particularly to the waterfront area. Where will the resources come from to serve them? The existing level of service won't be adequate. In the Stadium District, for example, if an event draws 80,000 people or more, the generators of that event, including Wachovia, Spectrum, and Citizens Bank Park, are assessed $10,000 per event to offset the cost of demand for the services. The Nutter administration takes a broader view of what comprises public safety, as evidenced by the Mayor's appointment of Everett Gillison as Deputy Mayor and Public Safety Czar. An article in the Philadelphia Inquirer, dated March 23, 2008, stated that Mayor Nutter regards public safety a far broader issue than law enforcement. New Deputy Mayor Gillison stated in that same article, 54 4/4/08 - RULES COMMITTEE - 080027, 080028 quote: The way to look at city services. The crisis may be one of education or of mental health services, but if those things break down, then you're going to have a crisis in public safety. If one considers more police will be needed as a result of the six to nine million people that will come to casinos, one must also bear in mind that added police results in more work for an already overburdened judicial system. For instance, for each assistant district attorney that may be needed to be hired, one must also add investigators, paralegals, and clerks. Just this week, Foxwoods was asked what plans they had to deal with safety issues beyond their own perimeter. Their answer was, quote: On services outside the Foxwoods perimeter, this is an example of the kind of issues that can be addressed 55 4/4/08 - RULES COMMITTEE - 080027, 080028 by the $1 million in Special Services District funding we are committed to providing. So it would seem that casinos feel they have no real stake in public safety for this community. It can either guarantee that the million 9 customers a year coming through their facility will need public-safety services only within their perimeter; or, if it doesn't happen on their property, it just won't be their problem. On the issue of the expanded scope of services under the public- safety umbrella, remember also that services provided by Department of Human Services are not adequate primarily as a result of the cuts under the Bush administration. In fact, this is the biggest challenge in meeting those needs. There are some miscellaneous facts I would like to point out. 56 4/4/08 - RULES COMMITTEE - 080027, 080028 Engine at Moyamensing Avenue and 3 Washington Avenue has a very small local area to be covered because it only has one engine and no paramedic. An EMT, an emergency medical technician, is on a fire truck, while paramedics are on a medic truck. EMTs receive approximately three weeks of training after fire school. Paramedics receive to weeks of 12 training.
A paramedic is on a medic 13 truck, but they are not at every fire 14 station. One out of every four or 15 five fire stations may have a medic. There is a rescue squad at Fourth and Snyder but not at all stations. And there are less EMTs on duty at night than in the daytime, except that casinos are hours a 21 day. 22 I'd like to close with a 23 statement made by Deputy Mayor 24 Gillison. " I attached with my testimony a chart which indicates the average response time right now, given the demand on the emergency services and the population we serve, and also an estimate, which you probably saw before, of the actual cost of one police officer. I don't know where my other colleague is, but are there any questions? )
Again, we thank you. I know you've been coming in to just about every hearing we've had, and I certainly want to thank you for your interest and your dedication to this issue, and thank you again for coming in today and sharing your thoughts with us.
We 58 4/4/08 - RULES COMMITTEE - 080027, 080028 appreciate it.
And I want to thank the members of Council. It is gratifying to know that somebody's listening to us.
Our next witness? MR. McPHERSON: Our next witness is the Philadelphia Entertainment -- I'm sorry. (Witnesses come forward.)
Good morning, Council President Verna and members of the committee. Carl Primavera on behalf of the Foxwoods Casino. With me is Jim Dougherty, whom you've met before, and David Sander from my office. We will be very brief because we know that there's been a lot of testimony. And, really, what we're 59 4/4/08 - RULES COMMITTEE - 080027, 080028 here for today is just to submit some information into the record, which we think will be hopefully responsive to some of the things you've heard already. So if I have my materials properly in hand. First of all, we have materials which are responsive to Professor Goodman. And there's other information that you'll see in the bibliography that talks about public safety and gaming and a lot of interesting social issues. We think that our response to all of this is very, very responsible. So we've have that in the record. Also, we have heard the concerns about public safety on the level of policing and fire and emergency, and we're handing up materials in response to that, which Jim Dougherty has prepared along with the head of public safety for Foxwoods so that you'll have a little bit of 60 4/4/08 - RULES COMMITTEE - 080027, 080028 the flavor of their very positive experience where they currently operate. So we think both in the local level and in the literature that casinos, quite frankly, add tremendous value, and the adverse negative impact is very limited. You'll even see in the data -- (Jeers.)
You'll even see in the data that they've surveyed areas that have gaming, and 75 percent of the elected officials have said that, based on their experience with gaming, they would like to -- they would make that same decision again to have gaming. So it shows that, like most other things, whether they're stadiums or whether they're shopping centers, once they're up and running, it's really more about the jobs and about making it as good as it can be. And, again, we also heard from 61 4/4/08 - RULES COMMITTEE - 080027, 080028 Lynn Fox, who we have a great relationship with, and we will work -- we're not anti-union. We will work with them and we look forward to providing the great jobs that are going to be a part of this casino. And we have nothing but good intentions with regard to unions, minorities, neighbors. We want people to be stakeholders in the great success that Foxwoods will be. So I want to make sure that information is passed up. And then the only other thing I do have -- and I probably put some of this out of order, but David, you'll straighten me out if I'm -- we have a letter that we sent to Shelly Smith, the Solicitor, and we're going to send a copy of it for the record, which, as Councilman DiCicco recognized when I saw the newspaper here today, we're here really as a sign of respect for Council, to share 62 4/4/08 - RULES COMMITTEE - 080027, 080028 information. The Supreme Court ruled yesterday and it speaks for itself, but we want to be seen as a positive and cooperating partner as we move forward, and we're not going to sit behind any opinion of the Supreme Court or be unavailable on any issue. And that's a commitment we made when we first came into City Council, and that's the commitment we make from here forward. So we're passing that up as well. And with that, I don't have any other testimony. Jim's here, but we know that there's a lot of people who want to be heard, and we are here also at the appropriate time to talk in detail about the water and sewer issue, and we have Pennoni lined up to talk about that; that's one of these big issues that we know the community has concerned about. And we think, after our testimony, hopefully they'll 63 4/4/08 - RULES COMMITTEE - 080027, 080028 feel as good about this situation is we are, that we're really going to be a helpful participant with those infrastructure issues. So with that, we're inclined to just go back and listen and, hopefully, be a helpful part of the process.
There's a lot of information that we have to review.
And most of it has to do with the original, I guess, legislative decision as to whether there should be gaming, and I think, to some extent, that decision's been made, but we want you to know that the literature is very positive, that the anecdotal information from Wyoming and from Biloxi -- you know, Philadelphia's the fifth-largest city in the United States, and we expect the experience here to be world-class. Philadelphia's a world-class city, and some of these 64 4/4/08 - RULES COMMITTEE - 080027, 080028 anecdotal references to places that -- Vermont, for example, there are places that we love and we respect, but Philadelphia is a huge, huge city with important job needs and tax needs, and I don't think that some of the examples you heard today are really apples and apples.
Thank you, Madam Chair. And good morning. Good morning, gentlemen. Mr. Primavera, I'm referring to the letter statement of Foxwoods Casino Philadelphia regarding the impact of casinos on public safety. It's signed by Mr. Dougherty, obviously. I just want to bring your attention to the last paragraph on the first page. "Foxwoods Casino Philadelphia will have more than 65 4/4/08 - RULES COMMITTEE - 080027, 080028 adequate means to police our own property. We intend to coordinate closely with Philadelphia police, fire, and other emergency-management officials to complement the City's services. The casino will assist in training police officers and other emergency personnel." Could you expound on that? What do you mean, you will assist in training police officers --
Is that Philadelphia police officers, I would assume? Or not.
This goes toward the development agreement if you want to address that.
Councilman, the issue would be making sure they understand the casinos layout, that we be able to work together, and if there was anything that happened that the 66 4/4/08 - RULES COMMITTEE - 080027, 080028 Philadelphia police were responding to, that we'd be able to work together hand-in-hand with them in solving those issues.
The development agreement that was worked out and executed at the end of last year makes sure that there's a hand-in-glove relationship. Part of the issue will be the multi-levels of police authority. I guess the State police has control over the gaming floor. We will have private security within our premises. The police respond, I guess, to non-gaming-floor events.
So to some extent, the idea is to coordinate and manage to make sure that each enforcement agency understands its job and that we are a helpful part in coordinating so that there's no gap between what the Philadelphia police 67 4/4/08 - RULES COMMITTEE - 080027, 080028 would be responsible for, the state police, and then our own security force.
See, that confuses me because -- I don't mean to interrupt you but, I think it's become said that we would need an additional 160 to 168 police officers, that we would undoubtedly need a new facility or a renovated existing facility to have a new police unit. We also need additional equipment. You talk about what agreement was made. We have no knowledge what that agreement was, so can you expound on that more clearly, please.
We can. I thought that was going to be for another day of testimony. We actually have someone who is going to address the development agreement in detail. Nick, do you want to summarize it? I know we have a copy that's in our materials, or Nick Moles might be 68 4/4/08 - RULES COMMITTEE - 080027, 080028 able to do that. But basically what we saw today for the first time from Deputy Commissioner Gillson reminded me of, you know, if you ask a general, Well, how many troops do I need? you know, they say, Well, I want as many as I can get. Dealing over a year with the administration before, we were pretty comfortable that the funds that were provided in the development agreement plus the host fees would more than cover any anticipated future needs. We'll look at what we saw for the first time today in terms of the anticipated assistance, but to some extent, I don't think that -- I don't think there's a suggestion by Deputy Commissioner Gillson that the casinos are going to take over funding the police functions for the City of Philadelphia. I mean, that's for Council's budget. 69 4/4/08 - RULES COMMITTEE - 080027, 080028 We want to be helpful in that regard, but the development agreement calls for -- and Nick can tell us in more detail, you know, the great collective amount of compensation going to the City for these anticipated increased expenses. (Witness comes forward.)
You know, Nick says that Ira Gubernick, who negotiated the agreement, and Romy Diaz have both agreed to come in and testify -- we thought it was going to be on the fourth day -- to go into the details of the document. I don't know whether you want to reserve that and get more specific information or --
Well, we have Mr. Gillison's testimony before us, and I think that's what we were considering today, about the safety issues.
Well, public safety, yes, but the budget, which we 70 4/4/08 - RULES COMMITTEE - 080027, 080028 have just seen for the first time, or the proposed budget, we're digesting it as you are. I'm not prepared to say that we've seen it before or that we can react to it. I'm sure it's a good- faith attempt to outline what they believe would be some costs that they would experience. I don't think it's been vetted by any particular group, and I don't even know if the City has looked at it. But the development agreement does call for significant cooperation and expenses to the City, plus the whole gaming legislation is designed to return money to the host communities that would not only help defray the costs associated with gaming, but obviously, they're anticipating a huge surplus beyond those costs that would be premiums back to the City. So to some extent, you know, we can obviously look at it, but I 71 4/4/08 - RULES COMMITTEE - 080027, 080028 think what we're seeing today from the first time from this administration, or at least from one person in this administration, seems to be kind of out of step with a lot of the prior information. The task force -- I know you have the task force information; that was a year's worth of work. We know the people and the quality of the people who were on the task force, we've heard the reports from Steve Mullin, we've seen the reports from other people. So we're happy to look at any information and respond, but, I guess, looking at those numbers today for the first time, it's hard for us to be specific other than to say they look to me like someone who, in any business, you say, Well, how much do you want for what you would like to do? and we all want the sun, the moon and the stars -- a new police station, 72 4/4/08 - RULES COMMITTEE - 080027, 080028 new trucks, new officers. That's just being a --
Well, don't you think before that statement was prepared that they looked at all of the information that was given to us, so that -- and --
We hope that they did. Now, didn't talk to the casinos, which would have been helpful, to understand really what they're talking about. They may have done --
Well, what is the difference between the agreement that had been made with the previous administration and what we're being presented with today?
We're not being -- 73 4/4/08 - RULES COMMITTEE - 080027, 080028 we're not presenting anything different today, Madam President.
So you do agree that we would need 160 to 168 more police?
Well, what are your figures? What did you talk to about with the last administration regarding this one issue?
Yeah. As Mr. Primavera indicated, we have a witness who will testify as to the negotiations of the development agreement. We're not prepared to present that testimony today. Our understanding was that it was to be presented at the next hearing. We'll be prepared to do that. The development agreement was presented to this body at the time of the first hearing. The development 74 4/4/08 - RULES COMMITTEE - 080027, 080028 agreement stands for itself. As far as the impacts on local public safety and issues of those natures, it's my understanding that that's what the host fee is designed to contribute to, to allow for specialized police force specialized for the areas where the casinos are located as opposed to drawing police force personnel from other areas. It's also my understanding that the study of the task force that Mr. Primavera referenced indicated that of the various sites that had been considered, the impact on public safety of this particular site was about percent less than the other 19 sites that had been considered on 20 average. So I cannot speak to the specifics of the calculus that went into the provisions and in the development agreement because I did not negotiate that, but we will 75 4/4/08 - RULES COMMITTEE - 080027, 080028 present a witness who can give you those details.
And we wanted to present Romy Diaz, who was the City Solicitor and who worked for over a year with all of the operating arms of government -- the police, the fire emergency services -- and he'll have that detailed information. But it was not a cavalier understanding. We worked long and hard on the development agreement to make sure that the City got the best possible deal that it could. In many instances, the development agreement has contributions, assessments and exactions for which there really was no legal basis, but quite frankly, it was done in order to move the process forward. So we think that ultimately, when we have that information available, you'll see that this was not anything other than a very 76 4/4/08 - RULES COMMITTEE - 080027, 080028 generous sum of money along with the other monies inherent in the legislative program. So we'll have more detailed information. And we will go back and look at what the Deputy Commissioner presented today, and we'll also ask him, what did they base that on? Hopefully -- they didn't talk to us, but hopefully, they did look at what we presented. Hopefully, they also spoke to the people in government; not all of them left when Mayor Street left. So, hopefully, the people who are really doing the job of government, who, quite frankly, have been here and are here today, we haven't seen mass changes of captains and commissioners and the like. So I don't think that there's any legitimate basis to, in effect, ignore what's been a year's worth of work in coming up with this development agreement. 77 4/4/08 - RULES COMMITTEE - 080027, 080028
Oh, I'm sorry. The Chair recognizes Councilman Green.
Thank you, Madam Chair. I appreciate that. Can I ask a question that I'm not sure the answer to as a new Councilmember? Is it in order to swear these witnesses before I ask some questions?
Did you say "swear at them" or did you "say swear them"? (Laughter.)
You know, we -- I've wanted to do that with the witnesses we've been hearing from the 78 4/4/08 - RULES COMMITTEE - 080027, 080028 community and others, and I didn't have the audacity. (Jeers.)
But I would say this: As a member -- (Council President Verna bangs gavel.)
As a member of the bar and as well an established former chancellor of the Philadelphia Bar Association, head of the Justinian Society, I think my word has been good in this Council, and I say my word speaks also for Jim Dougherty, who I think we all know, and my colleague Dave Sanders. So I'm not going to ask that you be sworn and I know you're a member of the bar, so I don't think that it would be appropriate, although if it's the President's desire to do that, I'm happy to speak under oath. My word is my oath, and I think everyone in City Council knows that. 79 4/4/08 - RULES COMMITTEE - 080027, 080028
Well, there are people up there who aren't attorneys. Mr. Primavera, I accept your word.
It's at the Chair's discretion, and I don't think we want to do that today.
Thank you, Madam Chair. You mentioned the task force in your testimony and how you worked with the task force. You submitted a report to the task force that talked about the potential economic impacts, which was the subject of testimony today, of the only casino entertainment facility proposed fronting the South Delaware River in the City of Philadelphia. It is prepared by Econsult Corporation, and it has a date of March 2006. Are you familiar with that?
Yes. And I 80 4/4/08 - RULES COMMITTEE - 080027, 080028 remember Mr. Mullin, the former commissioner director, testifying at the last hearing on that.
Okay. Well, I may have -- I missed that hearing and I apologize for that. In that report, on , it says that the real-estate taxes that are going to be paid to the City of Philadelphia -- are you familiar with that?
It assumes that the Foxwoods Casino will be paying one hundred percent of the real-estate taxes based on the assessed value -- in other words, that you would not be taking the tax abatement -- does it not?
It says "potential annual local revenues," and it looks like it does count all of the real-estate tax in there as a 81 4/4/08 - RULES COMMITTEE - 080027, 080028 potential.
So you did -- why was it put -- you put it in as a potential, but you didn't mean to pay it?
Well, this was the original report of 2006, and then the development agreement dealt with that issue, and the development agreement specifically talks about what portion of the taxes would be paid. And, Nick, do you want to talk a little bit about that? I have the paragraph in front of me from the development agreement. It's paragraph 12, and it talks about payment of taxes.
Yeah. Well, you know, what you presented to the City was that you were going to pay your taxes. Is it fair to say that the Street administration favored your operation; in other words, was in agreement that your casino should go 82 4/4/08 - RULES COMMITTEE - 080027, 080028 where it's going, et cetera, wanted the casino there?
Well, if you look at the record of the litigation, there was a huge amount of litigation and --
I think there was. There was a lot of litigation early on. And then I think, as a result of signing the development agreement, the City decided that if you signed the development agreement and if they otherwise felt that your plan of development had been fully approved by the Planning Commission, then they would endorse the development. And ultimately, that's what happened. We had a development agreement that was signed with the City. I believe we even waived some tax abatements. 83 4/4/08 - RULES COMMITTEE - 080027, 080028
Didn't the Street administration file briefs in your favor in court?
Ultimately, they did, but that was a modification of the position.
Wasn't it before the signing of any development agreement that they filed briefs in your favor?
If I can answer that, the Street administration actually opposed us in three pieces of litigation before the Pennsylvania Supreme Court prior to the current litigation --
And what were they related to? 84 4/4/08 - RULES COMMITTEE - 080027, 080028
They were related to zoning issues, and the specific issue was whether or not we were entitled to build under C-3 zoning versus CED zoning. So there was a period of time when there was opposition from the Street administration as to the position that we took.
Was there any opposition from the Street administration with respect to tax issues?
Absolutely, because we appealed our tax assessment; we felt that it was unreasonable.
And part -- if I may finish, sir. Part and parcel of the development agreement is a tax-claims settlement and a development agreement. There are many avenues in there in which we've agreed to pay 85 4/4/08 - RULES COMMITTEE - 080027, 080028 sums that another developer developing a project of this size would not have had to pay under the tax-abatement program. So part and parcel of what we agreed to is to pay more --
You don't -- you don't have a tax abatement because you haven't applied for building permits and you're not entitled until to apply for a tax abatement until you do so.
And that may well be the law, sir; I don't want to argue with you on that.
Okay. So can you please explain to me what the case in controversy was that was settled between the Street administration and Foxwoods at the time that the settlement agreement was signed?
Among other things were issues related to what the true 86 4/4/08 - RULES COMMITTEE - 080027, 080028 value of the property was. We had a tax appeal pending.
And we resolved that issue as to what we felt the true market value of the property was --
-- and what the appropriate taxes would be today with an escalator provision as well.
Right. So what you did was you -- the case in controversy was what current taxes you have to pay, what the value of the property is today. So why is the settlement agreement broader than the issue for which you were in controversy with the Street administration?
I was not part and parcel to that aspect of the negotiation, so I don't feel qualified to speak on that. Certainly, Mr. Diaz would be 87 4/4/08 - RULES COMMITTEE - 080027, 080028 in a better, were he here to testify, and Mr. Gubernick, who we will present as a witness on the development agreement, could probably provide further -- (Indiscernible; parties talking over each other.)
Are you aware that under the City's Charter, nobody can enter into an agreement longer than a year unless there's a case in controversy, which there was not, with respect to whether or not you'd get an abatement. Nobody can enter into an agreement with the City of Philadelphia longer than a year that is not approved by City Council.
Well, I can shed some light on what happened. We were moving ahead in what we thought was based on the Gaming Commission's decision for Foxwoods and our license with what we thought were the appropriate approvals so that we 88 4/4/08 - RULES COMMITTEE - 080027, 080028 could move forward. The City, under the then-administration, said that they would not authorize any approvals unless we signed a development agreement, which, in the City's then-mind, addressed a variety of issues pertaining to the development plan, which ultimately was approved, the taxes, and also, many things in the agreement that arguably were beyond what Foxwoods was obtain gaited to do. I mean, the agreement was basically to address what the City felt was its requirements so that they had what they felt was the best --
Well, it was a couple of them. We had zoning cases, which were on appeal, that went to the Supreme Court and the tax appeal. 89 4/4/08 - RULES COMMITTEE - 080027, 080028
They were all -- the City had already filed suits by the time you filed -- filed in your favor in all of that litigation prior to --
Prior to the time you signed this agreement, three days before the end of the last administration, the City and you had no 13 dispute.
This agreement was reached in principle in November. A settlement agreement was reached, and ultimately, this development agreement was signed.
Prior to November, the City filed briefs on your behalf.
I believe it is, but the point is, there is no case 90 4/4/08 - RULES COMMITTEE - 080027, 080028 in controversy with respect to the City's tax abatement program. There is no case in controversy with respect to many of the issues raised in the development agreement. And, I submit to you, the City Solicitor in the previous administration had no authority to enter into most of what it contains.
We respectfully disagree. We -- we're here not to argue legally because we believe the law in all respects has rendered moot many of the things we're talking about today, but we're here to be helpful and to be cooperative. We respect everyone's right to read the law as they believe appropriate.
Are you at all embarrassed that you submitted a report to the City of Philadelphia saying you'd be paying real-estate 91 4/4/08 - RULES COMMITTEE - 080027, 080028 taxes and then reached an agreement with the Street administration basically saying you wouldn't?
No, because we don't -- as the question's framed, we don't believe that was correct. This is an analysis that was submitted at the time showing taxes. Obviously, as things move forward, many of the things that would be in any report were changed, would be modified by real time and real events. We don't think there's any inconsistency. Basically, Mr. Mullins is talking about a wide variety of financial information, he's talking about proposed sales tax, wage taxes. All that's going to change based upon market conditions. So the fact that there's an inconsistency or a potential inconsistency is the nature of forecasting. These are financial forecasts. 92 4/4/08 - RULES COMMITTEE - 080027, 080028
Whether or not you pay taxes -- real-estate taxes to the City of Philadelphia doesn't change based on market conditions, Mr. Primavera.
Well, the assessment could go up, it could go down. If the market continues to go --
Well, whether or not you pay at all does not change based on market conditions.
You're not paying based on the improved value based on that -- under the terms of the tax supplement agreement.
If and when we get the abatements, we're paying over and above what the City abatements would otherwise provide, so we're 93 4/4/08 - RULES COMMITTEE - 080027, 080028 paying land tax and we're paying some additional tax and --
Are you paying based on the fair market value of your property?
Yeah. Nick's saying we think it's more than the fair market value.
After the improvements? You're paying more than fair market value after the improvement?
You're paying based on the -- you're paying as if the property's worth 300 to $400 million?
I would have to go back to see what the appraisals actually read, but I can tell you that what we agreed to was well in excess of what our appraisers felt the property 94 4/4/08 - RULES COMMITTEE - 080027, 080028 was worth at the time of the assessment.
At the time of the assessment? At the time of the assessment is prior to the improvements that you'll be making.
And we'll just -- the tax and claims statement and settlement in the development agreement is basically Pages 14 and 15, goes through a lot of detailed information. So it's something that, hopefully, you'll all be able to look at. And we'll revisit it as well.
Thank you very much. 95 4/4/08 - RULES COMMITTEE - 080027, 080028
Are there any further questions from members of the committee? (No further questions.) MR. McPHERSON: Our next witnesses are representatives from the Police Department.
Mr. Primavera, are you going to be staying for the conclusion.
Good afternoon. Welcome. Please identify yourself for the record and proceed with your testimony. DEPUTY COMMISSIONER FOX: My name is Patricia Georgio Fox. I'm First Deputy Commissioner of the Philadelphia Police Department.
Yes. Are you going to be testifying on -- 96 4/4/08 - RULES COMMITTEE - 080027, 080028 DEPUTY COMMISSIONER FOX: I can certainly make remarks if that's what you would prefer.
That would be fine. DEPUTY COMMISSIONER FOX: Okay.
You need them too (referring to Deputy Fox putting on reading glasses). DEPUTY COMMISSIONER FOX: I can't help it; it's age. When possible casino locations were originally developed, the Philadelphia Police Department did site surveys of each of the locations to determine a possible deployment strategy for each. To that end, we have developed a vision for the proposed sites, which includes three basic police concerns: traffic control, which certainly was our primary issue when we did our site surveys; pedestrian and crowd control based on the events at the location; 97 4/4/08 - RULES COMMITTEE - 080027, 080028 and what we call "perimeter crime problems." We did site surveys at each, and I imagine what we're discussing specifically is Foxwoods today. Traffic patterns and congestions along Delaware Avenue are the most immediate problems that will face the Police Department. This site does feed in from Delaware Avenue, which faces congestion even now during peak hours. Also, I-95 will affect the flow onto the Delaware Valley, as it currently does. When a problem develops on I-95, Delaware Avenue becomes a major detour route. With the state police now handling I-95 through the City, coordination with them will become critical in terms of our traffic plan. We've also discussed with other facilities -- with other areas that have gaming facilities such as 98 4/4/08 - RULES COMMITTEE - 080027, 080028 these the issues of crime. In most of those areas, crime would initially rise in the area of property crime, and once the police deployment was placed out there, those crimes diminished. The point that I'd like to make from the Philadelphia Police Department standpoint is that everything that we've done here has been done in theory. We've spoken to as many places as we could, and the figures and numbers that we have on paper are actually that; they're on paper. Until infrastructure is begun, until we have a chance to see what the facilities are actually going to be able to provide, that would certain make a difference in our deployment strategy. We do believe that we have a fairly good starting point with this. There are three factors that will 99 4/4/08 - RULES COMMITTEE - 080027, 080028 certainly affect our deployment plans: the length and capacity of the valet parking; external cameras, if there are any, and their positioning; and the security that's hired by the casino and their extent of coverage. And I'd also like to point out that, as is the case with most of the gaming facilities throughout this country, the state police are normally responsible for that crime which occurs on what's called "the gaming floor." And so any area that's either on the floor itself or connected to the floor would be the responsibility of the Pennsylvania state police. Anything that does not attach directly to the gaming floor would be the responsibility of the local --
So it would just be the interior? DEPUTY COMMISSIONER FOX: It's the interior and any facility such as a restaurant that has an opening onto the 100 4/4/08 - RULES COMMITTEE - 080027, 080028 gaming floor; as long as there's direct access onto the gaming floor, it's considered the gaming floor.
Okay. DEPUTY COMMISSIONER FOX: And so that had to be taken into consideration as well. This plan had been looked at in theory during the prior administration, and I have had an opportunity to sit down with Commissioner Ramsey and discuss the vision that the Police Department has, and he is in total agreement with the vision that we believe would be consistent with what we would need to do to police these types of facility. Basically, what we're talking about is the need for a dedicated unit. We don't believe that we can use officers that are already assigned geographically to the areas surrounding any of the facilities, be we have one, two or five. We need 101 4/4/08 - RULES COMMITTEE - 080027, 080028 individuals who are specifically trained and, in fact, cross-trained in all three of the responsibilities that I discussed. And so, in order to make that unit viable, we would need to have them located together. They would need to be, as I say, cross-trained. We would need specific types of officers. For example, it would be important to have bike officers, because perimeter crime would most of effectively be handled by the use of bike officers. As I think you all know, Commissioner Ramsey is a very huge fan of Segways and we've added Segways to our proposal for this -- for these facilities. And so in general, what we've put together is what we believe is a good starting point in terms of a visionary deployment plan. And as I've promised, many of the community 102 4/4/08 - RULES COMMITTEE - 080027, 080028 groups that I've visited over the years, that plan would be in place prior to opening of any facility. And in closing, it's also important to note that as the construction or the advancement of these facilities took place, we would need to be in constant contact with them, because the variables that I spoke of are just the three that we can think of that will affect our ultimate deployment plan.
Thank you very much. Commissioner, we did receive a copy of a testimony for Mr. Gillenson today, and he mentioned, as you did, projected traffic patterns and congestion along Delaware Avenue as an immediate problem that would face the Police Department, but that no 23 decisions or commitments have been made to deal with the problems since the infrastructure has not been 103 4/4/08 - RULES COMMITTEE - 080027, 080028 completed. He did, however, make some assumptions regarding what the department's needs may be. DEPUTY COMMISSIONER FOX: Mm-hmm.
And I don't know if you saw his testimony. DEPUTY COMMISSIONER FOX: Yes.
Okay. He indicated that there would probably -- this was an assumption. There would be a need for 160 to 168 police. Now, I am assuming, would this just be for Foxwoods or would it be for both casinos? DEPUTY COMMISSIONER FOX: Okay. The 160-to-168 figure was based primarily on having two facilities on Delaware Avenue. And, quite frankly, that figure was originally based on the Foxwoods/SugarHouse facilities. Each facility carried with it 104 4/4/08 - RULES COMMITTEE - 080027, 080028 a certain number of traffic officers based on the layout of the area. And so, when we came up with this figure of 160 to 168, it was based, at least in theory, on those two facilities. Foxwoods alone would have required a minimum of, I believe it was, 65 officers. So, again, this is -- and I don't know how else to word it. This was based on our experience with the area, our contacts with other jurisdictions that have this type of facility, and what we believed was our best guesstimate for what we would need. Each of those facilities has a number attached to it. And the primary difference is access from Delaware Avenue, the amount of congestion in the area, the entrance ways and valet spacing of the vehicles, and the closeness of the neighborhoods to the facilities. 105 4/4/08 - RULES COMMITTEE - 080027, 080028 (Applause.)
Now, can we assume that the 160 police officers would be new officers to be trained? I'm sure that we couldn't take -- and I know I kept hearing you say more than once about deployment strategy. DEPUTY COMMISSIONER FOX: Mm-hmm.
Well, you mean to tell me we're going to deploy 169 officers? DEPUTY COMMISSIONER FOX: 16 hours a day, 7 days a week it would 17 take that. And, certainly, the 18 Commissioner's vision and mine had been 19 that this would be a dedicated unit 20 made up of officers that we currently 21 don't have in our police department. 22 So the thought had been, at 23 least when the vision had been put 24 together, that these officers would be hired to be placed into that unit. 106 4/4/08 - RULES COMMITTEE - 080027, 080028
Oh, so you're going to hire 160 new officers? I mean, when you say "a deployment strategy," I will tell you how we agonized in Council to try to get 200 new police officers in the budget, and now we're going to be taking 165 from what we thought many, many of the districts were in dire need of. (Applause.)
And if we deploy them from the neighborhood districts, I think that is wrong. I think it's absolutely, totally wrong. DEPUTY COMMISSIONER FOX: As you know, Your Honor, we do not have the hiring capability, but the proposal that had been put into the previous administration had made it fairly clear that it needed to be a dedicated unit. Whether we hired or whether we used officers that were currently in that geographic district, either way, it 107 4/4/08 - RULES COMMITTEE - 080027, 080028 would be taxing on us. And so the number that we projected, we assumed, would have to be new hires.
And, Commissioner, isn't it likely that you would need a new facility or a renovation of an existing facility to have this new police unit housed? DEPUTY COMMISSIONER FOX: Yeah. Quite frankly, our vision was that if both locations are on Delaware Avenue, that we don't have a facility in the area that would be able to house anywhere near that number of officers. And so, it would require some additional facility, and then that had been built into our projection for the previous administration.
So along with the new facility, we would also need additional equipment, would we not? DEPUTY COMMISSIONER FOX: We 108 4/4/08 - RULES COMMITTEE - 080027, 080028 need the facility itself; we would need the IT needs for that facility, which have become expensive over the years because, luckily for us, our IT capabilities have increased. And we would need a variety of pieces of equipment, not the least of which are vehicles and the MDT's for the vehicles, radios for the officers. It's been very -- it's been clear to all of us, as we've looked at this, that the bicycle officers will be critical to the neighborhood comfort level, and so we would need bicycle officers and their gear and their bicycles. And so we've pried that out very well. And they are the basics; they are what we could envision now before having seen the facility. The issues of cameras and other equipment that we can't even gauge right now because we haven't seen --
109 4/4/08 - RULES COMMITTEE - 080027, 080028 Commissioner, for the record, can you tell us how much that would cost? DEPUTY COMMISSIONER FOX: I believe that the startup costs for personnel and equipment for the first year, coupled with the facility and the IT needs for the facility, is $17,994,000. That's our guesstimate.
I'm sorry, million? 12 DEPUTY COMMISSIONER FOX: I 13 believe this part of -- 17 million -- 14
Is 15 that for the first year? 16 DEPUTY COMMISSIONER FOX: 17 That's the startup costs, yes.
Okay. When plans are finalized and approved and construction of facilities and infrastructure are ready to begin, how long will it take to identify a location for a new police facility, build the facility, and equip and staff it? 110 4/4/08 - RULES COMMITTEE - 080027, 080028 DEPUTY COMMISSIONER FOX: Oh, I'm -- that's -- that's beyond my pay grade, ma'am. I know that -- our thought had been that we would be able to find an already-built facility that we would be able to convert, or at least that was our suggestion to the previous administration, that rather than starting from the ground up, that we would be able to convert some facility that was somewhere convenient to whatever the two locations were. And I don't know how long that would take. I'm... That's not something I can answer for you. The training of the officers, however, we would be able to have done well before the opening of any facility, and I believe that in this testimony, it's pretty clear that once construction were to begin, that there would have to be ongoing consistent meetings with the Police Department 111 4/4/08 - RULES COMMITTEE - 080027, 080028 for us to better gauge our needs.
It is being said, as you estimated, the cost to the City, excluding land acquisition and environmental cleanup costs, are approximately $17 million for the first year. I am being told that it will be $12.8 million annually thereafter. Would you concur? DEPUTY COMMISSIONER FOX: I think that's a fair estimate, and I can tell you that what we prepared, quite frankly, were estimates based on Foxwoods and SugarHouse, but I've priced each one separately. So the Foxwoods site would cost us somewhere, if our guess is right about what we would need, somewhere in the area of $5.5 million a year.