COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON PUBLIC PROPERTY and PUBLIC WORKS - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, June 14, 2006, 1:10 p.m. - - - 060113 - An Ordinance authorizing the Commissioner of Public Property to execute and deliver to the Philadelphia Authority for Industrial Development, for nominal consideration, a deed conveying fee simple title to a certain tract of City-owned land with buildings and improvements thereon, situate 5928-30 Germantown Avenue in the City of Philadelphia, for further conveyance at fair market value. PRESENT: COUNCILMAN DARRELL L. CLARKE, Chair COUNCILMAN JACK KELLY COUNCILWOMAN DONNA REED-MILLER COUNCILMAN JUAN F. RAMOS COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 Bill 060113 - 6/8/06 - - - P R O C E E D I N G S - - - COUNCILMAN CLARKE (Chair): Good afternoon. This is the Committee on Public Property and Public Works. Will the Clerk please read the title of the Bill.
Bill Number 060113, an Ordinance authorizing the Commissioner of Public Property to execute and deliver to the Philadelphia Authority for Industrial Development, for nominal consideration, a deed conveying fee simple title to a certain tract of City-owned land with buildings and improvements thereon, situate 5928-30 Germantown Avenue in the City of Philadelphia, for further conveyance at fair market value.
For the record, we have a quorum. Councilwoman Tasco, Councilman Rizzo, Councilman Ramos, Councilwoman Miller and Councilman Kelly 3 Bill 060113 - 6/8/06 are present. The Chair recognizes Councilwoman Donna Reed-Miller.
Thank you. Thank you, Mr. Chair. It's good to be here today to finally talk about and discuss this public property in Germantown which we all know as Town Hall. And certainly as a child, I actually snuck into the Town Hall because they used to have a PAL Center, and they didn't allow girls in. And when my cousins went, I had to sneak in with them. But anyway, this building has been vacant for, I believe, at least 15 -- somewhere between 13 and 15 years. And we finally have a developer that's interested enough to have done a good job of due diligence and move forward. So, I know that the Commissioner has to leave at 1:30, so I'm going to end my remarks so she can testify. Thank you. 4 Bill 060113 - 6/8/06
Thank you, Councilwoman. Commissioner, please state your name for the record.
Good afternoon, Councilman Clarke, and members of the Committee on Public Property and Public Works. My name is John Schlotterbeck. I'm the Commissioner of Public Property. I am here today to testify in support of Bill Number 060113, an Ordinance 14 authorizing me as Commissioner to execute and deliver to PAID a deed for nominal consideration conveying fee simple title to a certain tract of City-owned land, with the buildings and improvements thereon, situated at 5928-30 Germantown Ave. in the City of Philadelphia, for further conveyance at fair market value. This Bill will enable the City to convey this property to PAID for sale to a developer at fair market value, with the proceeds being deposited into the General 5 Bill 060113 - 6/8/06 Fund. The property was formally used as a municipal building, housing various City agencies. The building is currently not in use. The department supports this measure. And accordingly, I respectfully ask that City Council approve 060113. I also ask that the rules be suspended so that the Ordinance may be passed upon the second reading of Council. Thank you. I'm happy to answer any questions. With me today is Deputy Commissioner Jeff Cardwell. In case I have to run, he can take over for me. And also, we have the developer here, who has interest in the property.
Thank you. So, the developer is already selected for the property.
And there was a negotiated settlement agreement -- 6 Bill 060113 - 6/8/06
Well, actually in this particular case, each one of these assets tends to have its own story. But this happens to be this gentleman came to us, extremely interested in the property. We explained that we have a surplus list, that the deal is that every asset gets two appraisals, and the cost of the property is the average between the two. He agreed to continue. He came in with a business plan. And basically, that's the end of the story. Councilwoman -- As always, it goes to the Councilmanic District. Councilwoman is in support of it. The community is in support of it. The asking price is acceptable to 7 Bill 060113 - 6/8/06 the City of Philadelphia. So, I'm here today to hopefully pass this through Committee.
All right. Does this disposition come before this body again? Once we dispose of it and PAID enters into an agreement with the developer, does it come back here for a final disposition?
Well, it will have to come back for final disposition in the fall, yes.
So there's nothing new -- This is just the beginning of the process.
Okay. So before it's actually sold to the developer, it must, by Ordinance or resolution, come before this body.
Commissioner, I know that property fairly well. And I think that there's a very small street, or I'll call it an alley, that takes you back to the 14th District's parking area. Is there going to continue to be an easement for that access?
Actually, that's part of the negotiations right now. It's not settled. We have to accommodate the police, and we also want to accommodate the development and have parking for that use. So, that's another piece of the Ordinance of this process that has to be settled. We want to make sure the police have enough parking places and also the new development.
Thank you. What about the easement? Is that part of your negotiation also? 9 Bill 060113 - 6/8/06
Yes. And this is an additional approximately $50,000 we're talking about. That hasn't been ironed out yet. And I need to make sure that the police are comfortable with what we're proposing, and I haven't done that yet. I do owe them that. And they are completely aware of this whole situation.
I don't think that that would totally -- And I'm trying to just take a snapshot in my brain about that. I think they still could get access to that lot in the back without that street, but I see a lot of the police vehicles do use that little street north of Haney.
Actually, you can call it a driveway, might be a better term. And that driveway has always been used by the 14th District, the occupants of Town Hall, and when the farmers' market next to the Town Hall site was open, that was actually a way you entered into the farmers' market lot and exited.
And there's always been... We're not sure who owns it. When there's been big craters, then the City has come out and filled it. But it's always been bare because all three of those institutions: Town Hall, the Police Department, and Town Hall, and the farmers' market needed to use that. It's like a driveway. And that's what Councilman Rizzo is talking about.
And I'm sure that the developer -- I haven't talked to him about this, but there would be no 5 purpose to close it.
So it would, you know, serve everybody's purpose to keep that.
Thank you, Councilwoman. Any other questions by members of the Committee of this witness? (No response.)
There being none, thank you very much for your testimony.
One other question I just want to put on the record.
I'm sorry. Councilwoman Miller. 12 Bill 060113 - 6/8/06
And I know you haven't been the Commissioner that long, but is there anything in the records that talks about any other developers that have... I know, as a Council member, people have called me over ten years, to talk about an interest, showing somewhat of an interest, but none really followed through. Do you have any indication of any other developers that have been seriously interested in pursuing the acquiring, the acquisition of Town Hall?
Well, actually, I could review the files, because I do know in my long tenure with Public Property and as a facilities director, I was always responsible to maintain that building.
And because it was vacant, it would always pose a great deal of problems. So, yeah, there have been a number of people expressing an interest, but a lot 13 Bill 060113 - 6/8/06 of times they wanted for nominal, and they weren't willing to deal with the historical aspects. So, I can look through the file 5 and get that back to the Committee.
I assume, Commissioner, that this building will qualify for tax abatements, the ten-year tax abatement. How are you going to negotiate, if that is the case, the value of the land? Because that's what you pay for. That does not go away, the assessed value of the land. So, is it fair to say -- And I'll ask -- If you don't know, I'll ask the developer if this would qualify, if there is a conversion done there, to be tax abated. 14 Bill 060113 - 6/8/06
To be honest, the details of the deal, John Hersens has been work working on them, and he's actually out sick today.
My name is Gordon Houston. To answer your question, the ten-year tax abatement would be an avenue that we would pursue, but without this process being completed or without having an agreement of sale, we would not be able to effectuate any of those type of plans.
But that really is something that you need to know because that is a significant... 15 Bill 060113 - 6/8/06
...significant issue. But I would assume... And, you know, assume only gets us in trouble, that if you purchased this and you do what you say you're going to do, that you'd be eligible for the tax abatement. So, let's hope that you are because that's going to be a significant help to you to develop this building.
Because I assume your tenants would benefit by it, along with you.
He will do it. He is a man of his word. He will do what he said when he takes the building over.
Thank you, 16 Bill 060113 - 6/8/06 Councilman. Any other questions of this witness by this Committee? (No response.)
Since you're up there, sir, you might as well... Do you have any testimony you want to put into the record?
My name is Gordon Houston. And I intend to renovate Town Hall into a commercial building. I believe that it's in the best interests of Germantown, the residents, as well as the business owners there, that this building be energized, and be brought back to the rolls of the City. 17 Bill 060113 - 6/8/06 So, that's my testimony at this point.
I've spoken to several people who seem very interested in the property. It's my intent to make sure that the best tenant is in the building. Ideally, I would like to have one, maybe two tenants for the building. And there seems to be a good enough amount of interest to make that happen.
And the assumption is that you are in close contact with the elected officials, particularly the Council person from that particular area, as it relates to the ultimate tenant in the facility, something that is conducive --
-- to the use on that particular commercial -- 18 Bill 060113 - 6/8/06
Yes, I would be working with the Councilwoman, as well as state rep John Myers, keep him abreast of everything that's happening as we move along in the process.
Okay. Thank you. Any questions of this witness by the members of the Committee? (No response.)
There being none, thank you very much for your testimony, sir.
My name is John Gallery. I'm the Executive Director of the Preservation Alliance. I appreciate the property to testify here today. 19 Bill 060113 - 6/8/06 The Preservation Alliance recognizes that the City does have no continuing use for the Germantown Town Hall and doesn't have funds to rehabilitate it itself. So, it does seem appropriate to look for other ways in which the property might be restored and preserved. So, we have no real objection to the idea of a transfer to PAID to facilitate this property. However, we feel this property is more historically significant than any other property that the City has transferred to PAID. And because of that, the sale needs to proceed cautiously and with a very clear public process. Germantown Town Hall, as I think you all know, is a very significant property. It was built in 1923. The sale of the property includes both the building and the parking lot, being used by the Police Department presently. 20 Bill 060113 - 6/8/06 We really feel that the procedures that should be followed are the following: The property should be publicly advertised by PAID, as PAID is doing for other properties that have been transferred by the City. The reason for this is that the building has been vacant since 1995. There never has been any public indication that the City was willing to sell it, nor has there been any public indication of what price the City would be willing to sell it for. We feel this property is so significant that there needs to be a public process to determine who is the best developer to do it. If Mr. Houston is the best developer, it will be a safer process for him and the City and PAID, if that's confirmed by an open process in which others have the opportunity to express interest. This is a typical procedure that's followed. We're not asking for 21 Bill 060113 - 6/8/06 anything different than what's normal. Secondly, the ownership of the property should not be transferred to any private owner unless that owner is able to indicate that there are actual tenants and financing, to be able to rehabilitate the property. Again, this is too important an historic property for the City to lose control if there isn't a real project with real financing, not just for the acquisition, but for the full historic rehabilitation of the property. These are also conditions that are typically followed by PAID or by agencies like the Redevelopment Authority. We recognize that a potential developer, like Mr. Houston, might need to have what's normally referred to as site control, to secure tenants or other financing, but that can be accomplished without having an actual transfer of ownership. This condition of financial... 22 Bill 060113 - 6/8/06 complete financing for the project should be an absolute requirement of any sale of the Germantown Town Hall. Secondly -- Thirdly -- excuse me -- There are some specific historic objects in the building which need to be protected and spelled out by themselves. This includes the Isaiah Lukens clock, the John Wilbank bell, and the World War I memorial tablets. There needs to be a way in which those are identified, that they are historically protected and linked with the building. In our opinion, it would be better if all of these provisions were included in the City Council Bill, but they might also be included in a separate agreement between Public Property and PAID. I'd also like to point out that there is $10,000 available that has already been appropriated to be used for a feasibility study of the Germantown Town Hall. This could examine the architectural needs for renovation, as well as the 23 Bill 060113 - 6/8/06 potential market conditions for use of the property. I informed Councilwoman Miller's office of this about a few weeks ago. The consultants who have been hired to do the larger study of which this is a part are ready to begin immediately.
I don't understand why it would not be in the interests of the City or PAID or even of a future developer to help someone else do that exploratory work. So, we're asking you to proceed more cautiously that's being proposed, and to really ask PAID to use a public process, to see if there are in fact other interests or confirm that there's only one interest, and to use that process to determine whether there is financing to do this project. It was mentioned by Commissioner Schlotterbeck that the community is in support. I think that's not the case. I have an e-mail here, copies of which I also have, which was sent to Councilwoman Miller by the Germantown Historical Society, the 24 Bill 060113 - 6/8/06 most significant of the community interest relative to this property. I won't read the entire letter. I'll just read an e-mail. I mean I'll read a paragraph. I would like to encourage you to include in the Bill provisions that would guarantee the preservation of Town Hall and the important historical objects contained therein. Any buyer must be required to demonstrate an ability to finance the rehabilitation of Town Hall and to present a proposal for adapted reuse that preserves the historical architecture of the building. That's the community view at the moment. Again, we're not opposed to the idea of the transfer to PAID, but we believe this property is simply too historic not to be treated in a more careful way, to ensure that we have the best way to preserve and restore it. Thank you.
Thank you for 25 Bill 060113 - 6/8/06 your testimony. Again, real briefly, I believe that PAID has and will continue to do due diligence, as it relates to any conveyance in any deal, particularly that they're given a charge to ensure that any publicly owned property that has been designated as surplus is sold for its highest value, if at all possible. So, the assumption is that they're going to do that. With respect to that property, I believe that it is not only of state historical significance. It may actually be Federal historical significance?
It certainly is a building that would be eligible to be on the National Register, if it isn't already; you're correct.
So I think that there is a requirement, in terms of the restoration of the building, to ensure that it maintain some of the historical significance, particularly as it relates to the facade of the building. Bill 060113 - 6/8/06
So, I'm assuming that, you know, given your position, that you and the people that you interact with will make sure that it is adhered to.
And with respects to the vacancy of the building, you've indicated in your testimony that the building was vacant since 1995. But there was no market -- apparent marketing of the building. I don't live up there, but I know that that building was always a building that had municipal uses in it. So, if anybody is interested in real estate whatsoever, I'm sure if they had an interest in it, that they would have inquired over the period of some 13, 14, 15, 16 years. 27 Bill 060113 - 6/8/06 So, you know, the assumption is that, you know, that building sat vacant for a long time. And this particular developer has stepped forward. And, you know, I don't know the gentleman. I do not represent the area, but I'm happy to see that someone's willing to step to the plate and look at developing a building that's been vacant for a long, long time.
It has been vacant since 1995. That's 11 years. But it is a public building. And while some people have come forward and expressed interest in it, up until this recent discussion, it's never been clear that the City was really willing to sell it, as opposed to retain ownership in the public sector and lease it. That piece of information is not known, has not been known to any parties 28 Bill 060113 - 6/8/06 that might have an interest in it. So I think there is a different circumstance here.
Well, Mr. Gallery, we in Council have been talking about it. I don't want to belabor the point. We've been talking about selling surplus real estate for the last couple of years, as a result of our budget shortfall. So, if anybody who's seriously interested in real estate doesn't know that, then they probably shouldn't be in that business. I mean, you know, this is not something --
I'm just saying, this particular building has not been identified individually in those discussions.
The second thing I'd like to ask you is, you said that PAID 29 Bill 060113 - 6/8/06 would perform due diligence to determine that they could sell it at the highest price possible. The only way to do that is to publicly advertise the property. There may be someone out there willing to pay higher than the commitment that Mr. Gordon has already made. Will PAID take due diligence to determine if that's the case?
Right. That's their charge. And if you know of anyone who's interested in the building, then maybe you want to send them to PAID.
That would be great. I'll be happy to work with PAID in terms of that.
Let me just add something. 30 Bill 060113 - 6/8/06
Yes. Thank you, Mr. Chairman. I just want to follow up what the Chairman was saying. I'd like to know how Mr. Houston was aware of this building being available. That's the question that I have for the developer, more so.
Because I think that somehow he found out about it. And I don't know why anyone else in that profession, whether they be a developer or interested in real estate or whatever, they would -- if they have some -- if they had at least some opportunity or at least a thought that would be a great opportunity to develop, I'm sure they would have contacted someone from the City. 31 Bill 060113 - 6/8/06 Mr. Houston, how were you made aware of this building being available?
I've lived and worshipped at church services in Mt. Airy and Chestnut Hill, which are adjoining neighborhoods, over the last 30 years. And I was always aware of the property and always felt that it should be re-energized for the people of the community. And so, I made the necessary contacts to go about to try to do that.
And that's how I knew about the property, just from my own community knowledge.
Well, that's good. Well, it just seems that I question that since this building has been vacant for 11 years, I would think that someone in that community or throughout the City would be aware of it, that it was vacant. And any vacant building in this City would... I'm sure if a developer is interested or 32 Bill 060113 - 6/8/06 person who wants to invest in real estate would contact someone from the City, knowing full well it was a City building at one time. I just want to thank you for being interested in it. And I'm hoping that it is going to be developed and put some -- put to a more useful purpose than just a blank vacant building. Thank you, Mr. Chairman.
Okay. You know, I used to work right down the street from Town Hall. And I've been here in City Council since '95. The building's actually been shut down prior to 1995. I worked with Representative Richardson, and I remember we were helpful in helping some of the Mock's office find alternative space. There have been people that have been interested in Town Hall. I think -- I 33 Bill 060113 - 6/8/06 believe Mr. Gallery also said that -- No. 3 Public Property testified to that effect. But once they found out that there was not lots of public money to help them renovate, then they lost interest. And since I've been a Council member, people have called me continuously about Town Hall, but most do not have the capacity. Gordon is the first person to go in and actually do due diligence. I think it was about 90 days or 120 days.
Well, we're not under a contract as of yet, but we've done preliminary investigations, as to what is there and what would need to be done, as far as bringing the building back to life.
Okay. And so, we get plenty of complaints, you know, all year, particularly in the summer when the trees and bushes are just growing and overgrown and all on the sidewalk, for Public Property to come out and repair. 34 Bill 060113 - 6/8/06 I think it's a good move. Last Friday I had Gordon meet with another group of community people. And we are, Mr. Gallery, proceeding very cautiously, because we treasure Town Hall in the Germantown community, just like anybody else does of these Federal preservation registry or state registry. We also cherish Town Hall. So... Hopefully, though, I'm hoping that this building does get developed. We have the summer to work on additional issues, and then we'll move forward.
And one more thing, if I may add. We did meet with the members of the Germantown Historical Society.
And their Executive Director. And they voiced their support for the renovation of Town Hall for the proposed uses.
And I'm glad you said that. Actually, I did not get a copy of 35 Bill 060113 - 6/8/06 this e-mail and because it was actually sent to an e-mail account in my office that's been shut down, because this person no longer works there. I did talk to Mr. Ritchie and the President of Germantown Historical Society. In fact, I had a discussion last night with Alex Humes, who's the President, about another matter. But no one raised this. I was at Germantown Historical Society, I guess, about a month ago, to look at one of the exhibits. We again talked about Town Hall. So, this is of interest to us. We live -- I go past Town Hall every morning. So, I am probably more interested than anybody, because my decision is something that I have to live with because I'm going to see it every day. I go past Town Hall every morning coming to work. So, I'm just glad that we finally have someone interested enough to move forward on, you know, helping us to get rid of that blight there at the corner of 36 Bill 060113 - 6/8/06 Germantown and Hanes.
Thank you, Councilwoman. Any other questions of these witnesses?
I just have one other comment I want to make. I greatly appreciate the support that Councilwoman Miller has given to the preservation of this project, for this building in the past. I know she's absolutely committed to it, and I know City Council is, too. I don't mean to suggest anything different. Secondly, I have no opinion about Mr. Houston as a developer. He may be the exact right person. I'm delighted that he's come forward with an interest. I'm merely saying, this building is of far more historic significance than anything you have turned over to PAID; and therefore, there needs to be the type of due diligence, open process that you are alluding to. That's the only point I'm trying to make. 37 Bill 060113 - 6/8/06
We've heard you. Thank you. Any other questions? (No response.)
There being none, that concludes the public hearing on the Committee of Public Property and Public Works. (Public hearing concluded at 1:44 p.m.) 38 CERTIFICATE I HEREBY CERTIFY that the proceedings and evidence are contained fully and accurately in the stenographic notes taken by me upon the public hearing of The Philadelphia City Council, taken on June 14, 2006, and that this is a true and correct transcript of same. _____________________________ DAVID A. DEIK, RPR and Commissioner of Deeds (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.) 1 COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC MEETING COMMITTEE ON PUBLIC PROPERTY and PUBLIC WORKS - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, June 14, 2006, 1:44 p.m. - - - 060113 - An Ordinance authorizing the Commissioner of Public Property to execute and deliver to the Philadelphia Authority for Industrial Development, for nominal consideration, a deed conveying fee simple title to a certain tract of City-owned land with buildings and improvements thereon, situate 5928-30 Germantown Avenue in the City of Philadelphia, for further conveyance at fair market value. PRESENT: COUNCILMAN DARRELL L. CLARKE, Chair COUNCILMAN JACK KELLY COUNCILWOMAN DONNA REED-MILLER COUNCILMAN JUAN F. RAMOS COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 Bill 060113 - 6/8/06 - - - P R O C E E D I N G S - - -
We now move into the Public Meeting. Councilwoman Miller, I ask for a motion on Bill Number 060113.
Thank you. I move that Bill 060113 be reported out of this Committee with a favorable recommendation, and further move that the rules of Council be suspended so as to permit first reading at our next session.
It being moved and seconded, all in favor? (Chorus of "ayes.")
The ayes have it. Bill 060113 will be reported out of Committee with a favorable recommendation, with a rules suspension, to allow reading at our next session of Council. Bill 060113 - 6/8/06 Thank you very much. (Public Meeting concluded at 1:45 p.m.) CERTIFICATE I HEREBY CERTIFY that the proceedings and evidence are contained fully and accurately in the stenographic notes taken by me upon the public meeting of The Philadelphia City Council, taken on June 14, 2006, and that this is a true and correct transcript of same. _____________________________ DAVID A. DEIK, RPR and Commissioner of Deeds (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)