Committee Hearing, June 3, 1998

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COMMITTEE ON LICENSES AND INSPECTIONS - - - Caucus Room, City Hall Philadelphia, Pennsylvania Wednesday, June 3, 1998 1:15 p.m. - - - BILL 980242 - Amending Section 9-205 of The Philadelphia Code, relating to sidewalk sales, by adding a new provision prohibiting sidewalk sales on the 2700 block of American Street, both sides. BILL 980314 - Amending Section 9-205 of The Philadelphia Code, relating to sidewalk sales, by adding a new provision prohibiting sidewalk sales on the 200 block of West Lehigh Ave., both sides. BILL NO. 980343 - Granting permission to Pietrantonio Cassetta trading as Cassetta's Cheese Shop, located at 7401 Castor Avenue, to construct, use, and maintain an open-air sidewalk care o the east side of Castor Avenue directly abutting and contiguous with the aforesaid property. RES. 980349 - Authorizing Council's Committee on Licenses and Inspections to conduct an investigation and hold a public hearing into the recent allegations of consumer fraud levied against Ogden Entertainment, the contractor of record with the City or Philadelphia, regarding the food and beverage concessions at Veterans Stadium. PRESENT: COUNCILMAN JAMES F. KENNEY, Chairman COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN MICHAEL A. NUTTER COUNCILMAN ANGEL ORTIZ COUNCILMAN FRANK DICICCO COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 COMMITTEE ON LICENSES AND INSPECTIONS I N D E X Bill No. 980343 John P. Campbell, Manager . . . . . . . . . . 4 Legislative Regulatory Affairs - L&I Pietrantonio Cassetta, Owner. . . . . . . . . 5 Cassetta's Cheese Shop Bill No. 980314 John P. Campbell, Manager . . . . . . . . . . 8 Legislative Regulatory Affairs - L&I Bill No. 980343 John P. Campbell, Manager . . . . . . . . . . 8 Legislative Regulatory Affairs - L&I Resolution 980349 Donald Russell, Journalist. . . . . . . . . . 16 Philadelphia Daily News 17 Brian Hastings, General Manager . . . . . . . 29 Ogden Entertainment Bruce Ground, Ogden Entertainment . . . . . . 46 Commissioner Michael DiBerardinis . . . . . . 76 Philadelphia Department of Recreation Greg Grillone, Veterans Stadium Director. . . 76 Michael Connelly, President . . . . . . . . . 103 Federal Pretzels Baking Company Vince Termini, President. . . . . . . . . . . 103 Termini Brothers Bakery 3 COMMITTEE ON LICENSES AND INSPECTIONS (Index - cont'd.) Resolution 980349 (cont'd.) Wayne King. . . . . . . . . . . . . . . . . . 114 Hand Craft Jewelry James Tyrell. . . . . . . . . . . . . . . . . 116 Airport Property Manager Philadelphia International Airport Thurston Hyman, Secretary-Treasurer . . . . . Local 274 4 COMMITTEE ON LICENSES AND INSPECTIONS P R O C E E D I N G S

Good afternoon, ladies and gentlemen. This is the Council Committee on License and Inspections. My apologies for the use of this room, however nice it may be. We expected to be in the Council chambers for this meeting, but because of a long-standing hearing that's been going on a while longer, holding the meeting in this room was the only suggestion. After years of being in this Council, I can tell you that the acoustics are not very good, so that any whispering or talking at side bar becomes amplified, and the stenographer and committee members will have a hard time hear the proceedings. So if you need to talk, please walk into the hallway to do so, that would be a big help. The other thing is, when you're testifying, speak directly into the microphone, which will also give us the ability to hear what you have to say. Before we get to the resolution on Veterans Stadium, we have three kinds of 5 COMMITTEE ON LICENSES AND INSPECTIONS - Bill 980343 housekeeping-type bills to do relative to sidewalk sales and other kinds of issues, and then we'll quickly move on the to resolution at hand. The first bill is No. 980343, which is an ordinance granting permission to Pietrantonio Cassetta trading as Cassetta's Cheese Shop, located at 7401 Castor Avenue, to construct, use, and maintain an open-air sidewalk care o the east side of Castor Avenue directly abutting and contiguous with the aforesaid property. Mr. Campbell, please identify yourself for the record.

Good afternoon, Councilman Kenney and members of the L&I Committee. I'm John P. Campbell, Regulatory Affairs Manager, with the Department of Licenses and Inspections. The Department has no testimony on bill 20 980343. This is usually a bill that is handled by the Streets Department 'cause we're talking about encroachments on a footway, and it's usually testimony provided by the Streets Department who talks about issues such as circulation and a study of the possible location of underground utilities. 6 COMMITTEE ON LICENSES AND INSPECTIONS - Bill 980343

So then you have no 3 testimony on this bill?

No. 5

But your department will agree to enforce all of the provisions of the bill if it's approved by Council?

Of course.

Mr. Cassetta? (Pietrantonio Cassetta comes forward.)

Speak into the microphone.

My name is Pietrantonio Cassetta. I have a cheese shop at 7401 Castor Avenue, and I've been in business for 11 years now. It's well-kept, it's clean. So people tell me about two years ago to add water ice to the building. All the customers, they keep telling me that I should have something on the side there, water ice that they can enjoy right there. By the way, I have about 14 feet of space on the sidewalk, so I think I don't stop anybody to walk by.

Thank you for your testimony. 7 COMMITTEE ON LICENSES AND INSPECTIONS - Bill 980242 Any questions for this witness by members of the committee? (No questions.)

Thank you very much for your testimony.

The second bill is No. 980242, which is an ordinance amending Section 9 9-205 of The Philadelphia Code, relating to sidewalk sales, by adding a new provision prohibiting sidewalk sales on the 2700 block of American Street, both sides. Mr. Campbell, isn't it North American Street?

Yes, I believe it is North American Street, Councilman.

Well, the only problem, however, is that -- if the Councilman's staff is here from Councilman Mariano's office, this is a flaw in the title. Mr. Campbell, do you consider it a problem?

Well, actually --

We certainly can't amend the title at the committee. 8 COMMITTEE ON LICENSES AND INSPECTIONS - Bill 980242

That is correct, Mr. Chairman. But again, the street--

And there is a South American, correct?

There is a South American, but I believe the street name is really American Street -- just the north and the south designate the direction. (Anthony Farnon comes forward.)

Can you identify yourself for the record, please.

Anthony Farnon, F-A-R-N-O-N, legislative aide to Councilman Mariano. As far as I believe, I can't -- I'm not experienced enough to tell the Council.

Is anyone from the Law Department here?

I believe they're across the hall.

Let me ask you a question.

Yes, sir.

Do you have a copy 9 COMMITTEE ON LICENSES AND INSPECTIONS - Bill 980314 of the bill as it was introduced?

It's upstairs. I would have to run up and get it for you, sir.

I think what may help us here is, why don't you try to contact the Chief Clerk's office. I think what we want to see is the blue back.

Yes, sir, I'll do it now.

And while he's getting that now, we'll hold the rest of the testimony and move on to Bill No. 980314, which is an ordinance amending Section 9-205 of The Philadelphia Code, relating to sidewalk sales, by adding a new provision prohibiting sidewalk sales on the 200 block of West Lehigh Ave., both sides. Mr. Campbell.

Good afternoon. John P. Campbell, Legislative Regulatory Affairs Manager. The Department has no objection to the enactment of Bill 980314. As it relates to sidewalk and street issues we bow to the will of City Council.

You say that with a straight face, Mr. Campbell. 10 COMMITTEE ON LICENSES AND INSPECTIONS - PUBLIC MEETING

But I also would just like to add that we have been out there a number of times in the month of May. And in the four to five times we went there, we have not seen any vending in these particular locations. Now, it just might be the luck of the draw that the times we were out there that there weren't vendors, and that's happened before.

All right. Stand by. Mr. Campbell, the Chair has decided we're going to recess the public hearing, go into our public meeting, get these two bills out. We're going to hold 980242 to the call of the Chair until we have that problem issue resolved in the title. And the Chair recognizes Councilmember Ortiz for a motion on Bill No. 980314, with a rules suspension.

Mr. Chairman, I move that Bill 980314 be moved out of committee with a request for suspension of the rules and a favorable recommendation. (Duly seconded.) 11 COMMITTEE ON LICENSES AND INSPECTIONS - PUBLIC MEETING

Moved and seconded. All in favor, aye. There are none opposed. Bill No. 980314 is reported out of this committee with a favorable recommendation, and a request has been made for rules suspension so as to allow first reading at our next Council session. The Chair recognizes Councilman Ortiz for a motion on Bill No. 980343.

Mr. Chairman, I move that Bill 980343 be moved out of committee with a favorable recommendation and a request for suspension of the rules. (Duly seconded.)

Moved and seconded. All in favor, aye. There are none opposed. Bill No. 980343 is reported out of this committee with a favorable recommendation, and a request has been made for rules suspension to allow first reading at our next Council session. That will conclude the public meeting of the Licenses and Inspections Committee. 12 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 We will now reconvene the public hearing to deal with Resolution No. 980349, which is a resolution authorizing the Council Committee on Licenses and Inspections to conduct an investigation and hold a public hearing into the recent allegations of consumer fraud levied against Ogden Entertainment the contractor of record with the City or Philadelphia, regarding the food and beverage concessions at Veterans Stadium. Before we begin the hearing, Mr. Campbell, I don't think I need you.

Okay, thank you.

Thank you.

They need you on the other side.

That's right, they need you on the other side. Is there anyone here from the Recreation Department? (No response.)

I'd like to start this hearing today and again apologize our inability to use the main Council chambers, but I 13 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 think this room will be sufficient for our needs. And I'd like to thank everyone for coming this morning. As a result of an investigative story by the Philadelphia Daily News on the quality and cost of food and beverages served at Veterans Stadium, we are convening today's hearing to look into this overall contract, which was entered into years ago with the City of Philadelphia and 11 Ogden Entertainment Company. 12 We also want to use the opportunity to 13 explore ways to reduce costs and improvement of quality and selection of food services at this publicly-owned municipal facility similar to the Philadelphia International Airport. Like so many Philadelphians, I have fond memories of going to Phillies game as a young boy with my family. First at Connie Mack, which I believe I attended twice, and then at the Vet. It was an enjoyable family outing and it was an affordable family outing. And every time I go to the ball game with my children today, it brings back those precious memories to me. However, what was once an affordable 14 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 outing for an average family of four is now a luxury that few can readily afford at today's prices. It costs a family of four over a hundred dollars to go to a baseball game at Veterans Stadium. Aside from the memories, for a hundred dollars, a family gets four lower-level seats, one hot dog and soda per person, two beers, and two programs, and perhaps a souvenir for each child. As we get older, memories of special times in our lives are meaningful and take on a legacy all their own. Some memories get clouded while our ability to recall diminishes, but no 14 matter how old I become, I will always remember how good those dogs tasted at Connie Mack Stadium and at the Vet when it first opened. I know that we can do better and provide better services for the people who live in Philadelphia who are baseball fans and are football fans, in addition to the people who live in the region and come in to visit our stadium venue -- and also, very importantly, for the people who come in from out of town to visit Philadelphia for the first time. We perhaps have a reputation, and 15 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 deservedly so, for some of the best fast food opportunities in this city. From our cheese steaks to our pastries, some of the things that we've become famous for we don't have an opportunity to purchase at that stadium. And one of the purposes of this hearing today is to discuss, as we move towards the expiration of the Ogden contract in the year 2000, the opportunity to reconfigure and to re-specify the mission of the food service at the Vet and also to try to open up the opportunities for local vendors who are purveying famous foods -- food that has made the City of Philadelphia famous, an opportunity for them to come in and perhaps do what was accomplished at the Philadelphia International Airport that experienced the same bad reputation. Not too long ago, the Philadelphia International Airport was known for poor service, poor food, and high prices -- not a very welcoming, wonderful experience. That experience has been changed, dramatically changed, light years ahead of what it used to be. And if you talk to anyone who has been at the airport 16 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 recently, the entertainment value there, the ambience, the food and the pricing has become something that we can be proud of for a major gateway of our city. I believe Veterans Stadium has that same type of opportunity, and I think that we can do that. We cannot do certain things in facilities that we don't own. CoreStates Center, the Spectrum, and other places, we don't own those venues.

But this venue in particular and the airport and others, we do have the opportunity to kind of direct where we want to go with these contracts and to try to determine and to improve and expand upon the level of service and quality and choice that our citizens and our baseball fans have. So what I'd like to do first is, in deference to the organization that first got involved and brought this to our attention, is to ask Mr. Russell of the Daily News to please come up and approach the table. I believe you have a visual. Would you like to -- perhaps the Sergeant-At-Arms is here? ) 17 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

Good afternoon. Please identify yourself for the record and proceed.

Thank you, Councilman. My name is Don Russell. Thank you for having me here today. I come before you as a journalist, as a beer drinker, and as a lifelong Philadelphia baseball fan. And I come before you with a sense of outrage over the rip-off that is being perpetrated at Veterans Stadium. My name is Don Russell, and I write a column called "Joe Six pack" for the Philadelphia Daily News. Six weeks ago armed only with this simple measuring cup, I randomly tested draft beers sold during the Phillies games. At concession booths throughout the stadium, the drafts were plainly advertised as being 18- or 12-ounce beers. After a just a few innings of testing, it became clear that these beers did not measure up. Each 18-ounce cup consistently short by 2 ounces, and the 12-ounce cups were missing one or two ounces apiece. 18 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 Those two ounces may not sound like much. In fact, it's barely a swallow. But at a ballpark that sells three-quarters of a million cups of beer a year, it's ounce after ounce after ounce after ounce. And at either $4 or $5 a cup, Phillies beer is the most expensive in the National League. Each ounce of beer costs the consumer up to 33 cents. A conservative estimate shows that the cost of the missing beer totals perhaps one half a million dollars. When I alerted the City's Department of Licenses and Inspections to the beer racket, a team of inspectors visited the stadium and nosed around exactly 1 of the stadium's 60 concession booths. But just one step ahead of the law, the stadium's concessionaire, Ogden Entertainment, removed the advertising signs that had promised 18- and 12-ounce beers. Luckily, a Daily News photographer had snapped a picture of one of those signs, and it's shown here, along with my first report on the beer scam. With the signs now gone, the L&I 19 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 inspectors told me they could not cite Ogden for false advertising. But had the City inspectors bothered to pour a single beer in the stadium cups, they would have found exactly what I have discovered with this plastic measuring cup: It is physically impossible to fit a properly-poured 18-ounce beer into this cup. With even a minimum half-inch collar of foam on top, this cup can barely hold 11 ounces. 12 There can be only two explanations: 13 Either the stadium's charging the consumers for 14 foam, which is tantamount to charging for air; or 15 the stadium is ripping off fans. 16 Though they were caught red-handed, Ogden never offered any apologies or rebates to beer-drinking fans. The simple solution would have been to pour 18 ounces of brew into larger cups, or just lower the price. Instead, Ogden pulled a slick sleight of hand by removing the signs. " Now, The Daily News has been accused of 20 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 making a big deal about a little beer. And it is true -- it's just suds. But a cup of brew at a baseball game is as American as we get. Other cultures may satisfy themselves with caviar and cricket or souffle and soccer. But here in mirror in Philadelphia, the birth place of America, it's baseball and beer. Beer is an integral part of our national pastime. It washes down the salty peanuts, it spills out of the cup when we reach for a foul ball. " Cheating fans out of an honest measure of beer is an assault on the joy of baseball. Unfortunately, most Phillies fans are quite accustomed to the beer racket at the Vet. In the past weeks, I have been told by many season-ticket holders that only a fool would shell out big bucks ballpark food and beverages. That's a sad commentary, and I can only say that I'm heartened that most fans have wisened 21 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 up to the beer rip-off at the Vet. But what about the out-of-towners that this city is trying to desperately to attract?

In a city that's building its economic future on the development of its tourism industry, the beer scam at the Vet assaults the wallet of every citizen of Philadelphia. How can we expect to promote ourselves as a first-class destination city if we swindle visitors as if they were rubes? We lure them to our ballpark, then stiff them on beer. The experience can't help but leave a bad taste in the mouth of every visitor who shells out his or her hard-earned money for a ballpark brew. Maybe this isn't grand theft, maybe it isn't even a blatant act of consumer fraud. But it is plainly dishonest to gouge a captive audience. Any basketball fan can tell you that the suds scam at the Vet is not fair play. Thank you.

Thank you very much for your testimony. Mr. Russell, during the course of your 22 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 own investigation, how many signs did you come across that indicated the size of the beer specifically for a specific price?

A number of them. The one in the picture here today was on at least one of the stands where they sell pizza products. But throughout the stadium, there were other placards showing 18- and 12-ounce cups, with the prices listed next to them. Those signs are now missing swell.

During the course of your investigation, how many stands did you use your measuring device to investigate?

I went to approximately 8 to 10 stands and tested about 10 beers. That included food court stands and concession stands on all the levels and the Winners Restaurant.

The Winners Restaurant also indicated the same situation that you say you found?

I believe it did, yes.

In the concourse area, there are stands that, I think, run by Red Bell. 23 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

That's correct.

Do you know, are they draft-beer stands also?

The Red Bell stands are drafts also.

Did you have an opportunity to do a similar test at the Red Bell stands?.

They served their beers in a plastic cup, and it measured ounces. 12

Was there a sign 13 similar to -- 14

I don't believe there was a sign there. There was no guarantee of how much you were getting.

Did you drink all ten beers? (Laughter.)

It's a tough job, uh. . .

During the course of your pieces on this issue, you also indicated some other things I'd like to you elaborate on as a result of the food, its quality, and price, and what you've been able to uncover as a result of 24 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 your investigation.

Certainly. Well, The Daily News has focussed on the hot dog situation, in large part, as a perhaps even better symbol of the poor quality of food at the Vet. We found complaints of cold, very expensive hot dogs. We had complaints from ballpark fans of green hot dogs. Another fan complained of finding a wire in a hot dog. And, overall, the general feeling from the many fans that we interviewed was that the food was overpriced and undercooked and not very tasty. We've also reported about the situation involving pretzels down there which are a basic food of Philadelphia. And the pretzels sold at the Vet do not resemble what anybody in Philadelphia would recognize as a pretzel you get from a street vendor. They're not very tasty, they've often frozen, and they're quite expensive.

Councilmembers, do you have any question for Mr. Russell?

I'd just like to make a comment to Mr. Russell. I want to applaud The Daily News for doing an excellent job. 25 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 As far as my I'm concerned, this resolution is well overdue. I have five grandchildren, and believe me, it's tough if you really want to buy a hot dog there, the prices. And I have to agree with everything that's going on what you have reported in The Daily News.

Thank you, Councilwoman Krajewski.

Thank you.

Thank you, Councilwoman. The yellow and blue cup that you have there --

This cup is the one that was being sold up as an 18-ounce cup. The other one is 12 ounces.

Would you mind filling that cup with water?

Actually, I can do better than; that I'll fill it with real beer. This is Budweiser.

I know, I think I've seen that before.

Is it chilled? COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

It's cold. I have to tell that you there may be differences between draft and bottled beer but, uh. . . (Mr. Russell pours beer into cup.)

Take a moment to let it settle.

That may be unfair. I know that the Ogden vendors attempt to serve beers down there as full to the rim as possible. And, frankly, there's probably a good bit of foam in that particular pour.

That's been my experience. I normally ask the employee there not to put the lid on 'cause they usually get do right to the top. And if the lid goes on, it winds up spilling, coming out the straw hole.

Actually, I'm not certain that they have lids for beer at the stadium anymore. My experience is that when they fill it to the top, they tend to splash the beer on your hands on the way back to the stands.

Councilmember Rizzo.

Thank you. I'm not 27 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 sure this is on, let me check. I think I can communicate. Mr. Russell, Don, could you tell me -- I'm a little confused or maybe even disappointed. There's such things as evidence. And that photo to me is evidence that Ogden was advertising a certain-ounce beer for a certain amount of money. L&I said that they couldn't take any action because of the fact that the Ogden people tampered with the signs based on the photos that you have? And they're -- obviously the camera has a date print stamp on it. What was L&I's reluctance in doing anything because the signs had been removed?

I honestly can't answer that, Councilman. The inspectors who went down to the stadium told me that if there were no signs up any longer, that there was no way they could cite. I mean, it was clear. This photograph was in thousands of newspapers around Philadelphia, and L&I only went down when they saw the photographs. So I'm. . .

Well, I'm glad the Police Department doesn't work that way. 28 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 Thank you very much.

Thank you very much.

Just for the record, we're now at about -- well, it's about ten ounces. But, frankly, I think that may be a bit unfair because there is a bit of foam in there. But let me just say that (unintelligible due to acoustics) half-inch of foam in this cup, you're going to get about 12 ounces of beer. 13

All right, fine. 14 Thank you very much. 15 If there are no more questions for this 16 witness, thank you very much for your testimony. If you'd like to, you're free to hang here in the proceeding as it goes on.

Thank you.

We'd now like to now ask the people from Ogden, once he's cleared way items, if they could come up. And you can remove those items. After these witnesses will be the Recreational Commissioner. 29 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

Good afternoon Councilman and Members of Council.

Brian, hold on one second. Are there going to be two people testifying or one?

Just myself.

You can testify and respond in any way you feel is appropriate. Perhaps the best thing to do, if you follow my suggestion, is to respond to the beer issue because the overall issue, in addition to the size of the beers and how many ounces is one part of this discussion. I think the most important part of the discussion, however, is the food service in general, the pricing in general, and what we can do and what you've done to try to improve it, what can be done to try to improve it, and where you think the problems lie. That's where we want to get to in the discussion.

I have a prepared statement.

That's fine. 30 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

I'll be glad to answer any questions, but I think this addresses most of the issues brought up by yourself and Mr. Six Pack. Ogden Entertainment is an internationally-recognized concessionaire serving millions of people around the world. We're proud and honored to have been the concessionaire of Veterans Stadium for the past years. 11 As to the quality of conditions you 12 brought up earlier, Councilman, at the Vet, we 13 offer nearly 200 different selections. In addition to hot dogs and sodas (unintelligible due to acoustics) water ice, our menu selections offer the highest quality. In fact, we're proud to say that in a national survey of ballpark fare by dietitians, little leaguers, and their families done by USA Today, Veterans Stadium was concession rated the best, and won a home run as you can see by this photograph here I have behind me. Our hot dogs are supplied by Hatfield, the best in the business. Hatfield hot dogs exceed national USDA standards and are constantly 31 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 checked for quality of (unintelligible due acoustics). Hatfield has been providing the highest quality product in the food service industry to the Delaware Valley for a hundred years. As far as the pricing, we're also proud to note the pricing of our concessions is among the most competitive in the country. According to the National Baseball Fan Cost Index, Vet concessions ranks third lowest in prices of concessions in America. In fact, it's nearly 13 percent below the national average. Only two 14 ballparks, Montreal and Cincinnati, have lower 15 concession prices than Veterans Stadium. The 16 price for our Phanatic hot dog and soda, our most 17 popular Phanatic menu selection, is also less at 18 the Vet than at any other ballpark in the country. 19 As to the beer issue that Don brought 20 up (unintelligible due to acoustics), the Vet has the largest selection of beer of micro brews than any other stadium in the country. Fans can choose from a variety of hundreds of different beers from around the world America's, including the most popular beers -- Budweiser, Miller's, and Coors. 32 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 We don't sell or advertise our Vet beers by the ounce. Our menu advertises only the price of beer, not the volume. At baseball games, each one of our menu board clearly offers two choices for draft beer -- large and regular. We've never misrepresented the way we advertise or sell beer or any of our products to our customers. Our large beer is served in an 18-ounce cup filled to the top. A regular beer is served in a 12-ounce cup filled to the top. The methods we use to serve beer are specifically recommended by our brewers and (unintelligible due to acoustics) training that every one of our concession servers go through. As to local vendor participation, included in the 200 menu selections at the Vet are offered products from Philadelphia-based local restaurants and food vendors, including Rita's Water Ice, Hatfield, and (unintelligible due to acoustics). All local vendors have the same chance to participate in Vet concessions. A selection process approved by the City is used to select vendors based on a criteria that includes quality, 33 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 pricing, delivery, just to name a few. Our interests have always been to serve Philadelphia fans and their families the best food at the most competitive industry prices, and we're going to continue to do that. To that end, we've established a called "Vet Concession 2000" to examine the concession contract at the Vet going forward. Over the last several months, we've begun to hold discussions to identify ways to improve the terms, structure, and local participation in the Vet so that it continues to develop the well-deserved reputation of the City of Philadelphia. We welcome the input and involvement of City Council, and we welcome the public too.

Thank you very much for your testimony. I have a list of questions I'd like to ask regarding the contract. What I'd like you to do is respond to at least the one picture we saw that would indicate that there was a specific holding out of a specific number of ounces for a specific price. And if you could also respond to the allegation 34 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 that upon the appearance of L&I inspectors, these signs disappeared.

You know, I would call that ludicrous. I'll give you some background. Obviously, there is a picture here of two stands. Of the 120 menu boards we have throughout the stadium, there are two stands for Pizza Hut. Those menu boards were provided by Pizza Hut to fit their specifications when we do business with them. What you see, though, the 18-ounce and 12-ounce that's described is the size of the cup. When we realized that it was inconsistent with our other menu boards we did, in fact, remove them. And now it just says "$5" and "$3."

When did you realize it was inconsistent with your other menu boards?

Actually when we saw The Daily News.

And why wouldn't you with respect to -- if you do know, fine; if you don't, you don't have to speculate. 35 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 But why would Pizza Hut order signs that had specific ounce requirements?

Well, what we did was, we changed the menu there. We added a few different items. We wanted to upgrade the menu board, and when the information was communicated to them, it was communicated in the typical way that we get pricing approved. And they read it line for line with our cup specification on there. Once again, it was inadvertently left up there.

Does that cup specification appear anywhere in the contract?

No, it does not. It's what we submit to the City for pricing on an annual basis.

So there is some documentation, either internal or with the City, that would indicate some size?

Absolutely.

And how long has that been in effect?

We typically, when we submit pricing, we put in a lot of information -- 36 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 size of hot dogs, quantities -- in order to reference, you know, the value.

Is it your contention that the difference, however slight you may believe it is, is one of issue of foam or --

Those cups specifically hold and ounces. We do not misrepresent 9 them. 10 As far as the beers being poured in the 11 cups, we specifically train our employees the 12 proper service and how to pour a beer so that a 13 quality product is going across the counter. 14

Could you discuss 15 for me -- I mean, break down the costs of what 16 goes into, for example, the food items and the 17 liquor items as it relates to the percentage that 18 the City gets, the taxes that are applied. See, what I'm trying to get an idea of is to the listener or the person who would read this story, what exactly goes into the cost of an item when they buy it? How much is taxes, how much is the City, how much is you, how much is labor? What is that exactly?

Well, specifically for 37 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 food items, it's a percent sales tax. In addition to that, depending on where the food item is sold within the stadium, there's a different commission rate that's due the City of Philadelphia. In general, the concession stands, the commission there is 58.21 percent. For food court stands, it's 30 percent. With beer, the tax is percent. It's a City tax. And, once again, the same commission rates apply, depending on where it's sold.

So for the beer, 10 percent is applied on 58.2 percent, and then it's actually 68.2 for liquor and 58.2 percent for food?

Correct. And there's also a 25-cent surcharge the City had agreed to, to finance the outside policing for the L&I detail.

And that's both for Phillies and for Eagles?

Right, right. Well, actually, the Eagles is slightly higher. It's 50 cents. 38 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

So before you even start to make any money on food items, to round the figure off, let's say you have to give the City 60 percent of the gross receipts on all food?

Depending on where it's sold. If it's sold at the food court, that commission is only 30 percent.

And on beer, it's actually 70 percent plus cents. 12

If you consider the 13 taxes, correct. 14

In 1990, the Eagles 15 collected a surcharge of 75 cents per beer. I 16 believe that's also related to the issue of 17 policing and security both inside and outside the 18 stadium. They again collected a surcharge in 19 1994. Was there a surcharge collected between '91 20 and '94? 21

I don't have that 22 information with me but I believe so. I can get 23 you the number. 24

Well, we have 25 representatives from the Recreation Department and 39 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 the stadium. Maybe they know. But if you could find out, I would be interested in knowing that and what that amount was that was turned over to the City.

Absolutely.

Do you know or can you recall or can you find out what the cost of a cup of beer was in 1991?

And when you refer to what it costs us?

No, the cost to the buyer.

In 1991, I believe it was $4.

And in '92?

I believe -- I don't have that in front of me.

Okay.

I believe there was an increase until the actual liquor tax went into effect. I believe it was '95.

In 1992, the Phillies received a surcharge, cents for cup of 25 beer, bringing the cost to $4 a cup, and that was 40 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 in 1992. Was a surcharge collected after 1992?

For the Phillies?

For the Phillies.

Once again, I don't have that information. I'd be glad to provide it for you.

I'd also ask -- don't know, do you have somebody there taking notes on requests for information? I'd appreciate it, you know, if you could get back to the Chair with that if it's not available to you now or if there's no one here who can give you that information.

Yeah, absolutely.

We also need to know what the cost of beer was from '91 through '95.

I can tell you that we did hold the price through the years you're talking about.

Fine.

You have the information right in front of you now.

The issue of 41 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 pretzels becomes something that's mystified me for a long time now. Within a baseball's throw of Veterans Stadium is the birth place of Philadelphia soft pretzels, at Seventh and Federal, Federal Baking Company. We however provide opportunity for customers to buy what is a large frozen -- not frozen -- not always frozen, but a sometimes frozen pretzel, which is obviously not a Philadelphia product. If you could tell me how that happens, why it happens.

Actually, we do offer Federal Pretzels in our suite in our catering department. You know, we've chosen, through careful analysis to go with the J&J which is a quality pretzel. It's a pretzel served in well over 95 percent of the stadiums and arenas in the country. You known, we have strict criteria. We carefully consider every product. We want to sell the best product out there that can meet the criteria specified.

Well, I would argue 42 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 with you, just from a subjective standpoint, as a lifelong Philadelphian, that that's not the best pretzels available.

And as a lifelong Philadelphian, I would agree with you. However, when you deal with a dynamic situation where the attendance fluctuates, the weather fluctuates, and you have storage issues, just the general logistics, we have found that we need pretzels that meet that criteria. When all things are considered -- and we don't make any decisions lightly -- we found that J&J is the pretzel that fits the bill. We would be glad to consider Federal pretzels, and we constantly review these (unintelligible due to acoustics).

Are there any fees that are paid to either Ogden or the Phillies for consideration to sell specific products or requirements to buy advertising in the stadium complex that you're aware of?

I can only speak to what I know of, Ogden. And we pay for the pretzels. Any arrangements otherwise would have to be taken 43 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 up with the Phillies.

Are you aware of whether or not the Phillies have the opportunity to either veto or to suggest or to require a specific product to be sold or not to be sold?

As I'm aware, they do not have that ability, but we would not sell a product that does not meet our criteria. The Phillies -- well, fortunately, we're tied closely with them and we try to work with them wherever possible, but they do not have the ability to dictate what is sold there.

And another issue. Is there any distinct cover charge to the Stadium Club during Phillies games?

No, there's not.

And what about during Eagles games?

During the Eagles games, it's a one-price buffet.

Is there a cover to gain admittance or do you need a reservation? How do you --

You need a ticket. You 44 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 also -- there's also a very long waiting list as a result of how desirable that location is.

Who receives those charges that are charged to get into the Club?

We actually administer the plan.

Is any of it turned over to the City?

Absolutely.

Can you tell me what percentage?

I don't have that information in front of me. Once again, I can get it for you.

Fine. And I don't expect you to be able to -- I have a whole list of questions, and I'm not expecting you to know it all or have it at your fingertips, but if you could get that information back to the chair and provide us with that, we would really appreciate it.

Absolutely, absolutely.

Councilmember Rizzo. 45 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

Thank you, Councilman. Many of the complaints that I hear, besides the pricing, is the quality of the product. You described that you buy one of better hot dogs -- Hatfield, which exceeds the national standards.

USDA.

When you buy the product from them -- and we've heard the word "green hot dog" -- does it come to you fresh or frozen?

It actually comes to us fresh. Another point -- when there's a long break between games, they're frozen, and it's clearly dated.

So you do, in fact, buy fresh product and freeze it?

We freeze it only when necessary. During a long, long break, it could be frozen. Now, when I say "a long break," I mean over two weeks. The shelf life on hot dogs is up to 45 days, so the period when a hot dog may be frozen during the Phillies season is not very 46 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 lengthy.

What other products do you buy fresh and then freeze?

Quite a few products due to the logistics of, you know, feeding 20,000, 60,000 people at a given event necessitates freezing.

How do you manage that something doesn't get, like in my freezer, a year in the back? How is that managed?

As the products come in, they're stamped and dated. We're very careful. Our warehouse people and our stand people are trained professionals. They go through rigorous training. And we rotate the stock properly. We go to great lengths to make sure that it's a quality product.

GROUND: I'm Bruce Ground, and I'm with Ogden Entertainment. The product that we purchase at the Veterans Stadium is not on a home stand basis for baseball. And what I mean by that is when we look at a home stand, whether it be 6 games, 10 games, 15 games, we calculate the amount of product 47 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 that's required for that home stand and purchase only for the home stand, plus percent. 4 So the amount of product we have left 5 over at the end of a home stand is very minimal 6 and is kept down at the main warehouse and is under strict guidelines for refrigeration and freezing.

Bread and pretzels are also frozen?

For the most part, bread is calculated to only to get us through the home stand. And, once again, there's a very a minor amount of bread that may be frozen. Pretzels, they are also calculated -- not on a home stand basis but on a game basis. So these pretzels are coming in specifically for an individual game. And, once again, there's a very modest amount that comes to us frozen.

Is there anywhere in your contract that is indicated that you do freeze product? Is there in the contract -- I was led to believe that you represent the product as being fresh that you sell.

All the product that we 48 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 bring in is in fact fresh.

But not if it's frozen and then sold.

If you're specifically referring to the pretzel, it comes to us in a frozen state. That's the way it is purchased, and that's the way it's purchased across the entire country.

So it's not a fresh pretzel; it's a frozen pretzel.

It is a frozen product that's sold nationally across 95 percent of the stadiums and arenas in the country.

If you bought them from Seventh and Federal, they'd be fresh. Thank you.

We do buy some of them from Seventh and Federal.

Well, that's -- I want to just be fair 'cause I've been both in the stands and in the suite level. I would suspect that the price -- I don't suspect, I know the price for items in the suite level are significantly different than items 49 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 -- higher than items in the stands. So I mean, if you're going to buy -- some of the pricing that I've seen, without hadn't even gone into the suite-level issues, are exorbitant amounts of money for --

If you look at that comparatively, Councilman --

Compared to what?

Compared to other stadiums and arenas, our neighbor up and down, all over, it's not fair to compare it to what you may get at a catered hall.

Why?

The dynamics of the stadium, we're open for one hundred events a year, a good year, but we still have to pay for the overhead, all the capital improvements, all the utilities. And, I dare say, our electric bill is quadrupled when you --.

Not when the building is dark.

Believe me when I tell you, just when the building is dark, our costs are significant. When you have a hundred days to work 50 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 to cover those costs, which are significant, that's why it's not a fair comparison.

But it's also not a fair comparison to take solace in the fact that you're as high-priced as every ballpark in the country.

Well, actually, we're 9 percent below if you're talking about concessions. 10

My next question is 11 on the handout provided which indicates that 12 Philadelphia is below -- it's only higher-priced 13 than Montreal and Cincinnati -- there's a price 14 here of a hot dog for $1.25. 15

Correct. 16

That, I understand, 17 is a children's hot dog. 18 And my understanding from today, when I 19 saw The Inquirer, Mr. Six Pack aside, this is more 20 of a non-biased source, they rated the price of a hot dog at Veterans Stadium as 2.75 to 3.50.

That's inaccurate.

What is the price?

You know, Mr. Six Pack --

No, this is not Mr. 51 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 Six Pack. This is The Philadelphia Inquirer, Mr. Conshohocken.

Okay. The 1998 Major League Baseball Fan Cost Index, they looked at every stadium across the country, every stadium. Philadelphia's here, the third lowest in the country.

That's not my question.

This is comparing apples to apples.

My question is: Is the $1.25 hot dog listed in this stand matrix a child's hot dog or a regular-sized hot dog.

It's called "The Phanatic."

It's a child's hot dog.

However, by the same --

My question is: What is 2.75 and what is the price indicated? I'm sure you read The Inquirer this morning.

Yes, I did.

That got your 52 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 attention.

Yes.

Are they incorrect in that price?

At 2.75?

At 2.75 and 3.50.

They're correct.

Well, then how --

Because if you look at the fan index, can you tell me that the actual cost of a hot dog in L.A. is less? This is an independent survey.

What I'm saying is in this handout, you indicate -- and I'm not going to quibble over a child's hot dog versus an adult hot dog, but if the child's hot dog price gets you two from the bottom and it's not accurate, then I've got to suspect the other numbers.

Well, when they surveyed, they talked to each concessionaire. This is the Fan Team Marketing Index. When they surveyed all the ballparks across the country, they specifically asked for the lowest-price hot dog, the lowest-price beer, the lowest-price 53 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 soda. I would say that that would be consistent to that report. And, naturally, everyone is giving those prices as were we.

And if you compare the 2.75 hot dog once again across the country to a comparable size hot dog, you would find that it is once again in the lowest portion of the --

And I would ask you to refer The Inquirer article.

But that comparison is not made in the matrix handed out and indicated that you are two from the bottom in pricing.

But it is done once again by Major League Baseball Index. They are the ones conducting the survey. It's an independent group that nothing to do with concessionaires. What they specifically look for is --

Major League Baseball?

Major League Baseball.

Is an independent group?

No, excuse me. It's the industry standard to measure pricing across the 54 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 country.

But it's sponsored by Major League Baseball.

No, not necessarily. It's an independent group but they ask for the cooperation of Major League Baseball. In other words, we need to reply to those questions any other independent surveys, it's up to our discretion whether we want to take part in them or not.

Not to belabor this point, but projecting that this is like Consumer Reports or Ralph Nadar, I don't know is necessarily accurate if it's a Major League Baseball-sponsored activity.

But it's more accurate than necessarily a local newspaper would be. I mean, they are doing a survey across the entire country and they are asking the same questions of every ballpark rather than selecting the individual ballparks that they'd like to attend and then looking at selected items which they will either add or delete at their discretion.

I would agree with 55 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 you that maybe The Daily News has an ax to grind.

I don't know if they do or they don't.

Don't believe everything you read in the paper.

Just to stipulate, this is not The Daily News. And the reason that I find difficulty in believing your numbers is because the first set of information I get is based on a child's hot dog 1.25, which puts us way down at the bottom of the list. And then when I read this, which no one's disputing, I find that it's not $1.25; it's 2.75 to 3.50.

Well, once again, the Team Fan Marketing Index, they asked for the lowest-price item. Now, we have every reason to believe, even with the other comparisons, that they are giving their best value. The fact is we do serve a $$1.25 hot dot and a $$1.25 soda. I think that would be fairly representative in this kind of --

And the $1.25 hot dog is not listed as a child's hot dog as it is in many ballparks. It's just listed as $1.25 hot dog 56 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 that's available to any fan that wants to come in, and certainly many fans take advantage of it. In addition to that, there are several events during course of the season where fans can purchase a hot dog for $1, a $1 hot dog.

When did that start?

It started last year.

In the beginning of last year.

And in how many events during the course of last year did that happen?

There were six last year, and there are six scheduled for this year.

Do you have -- not at your fingertips, but can you provide how many Phanatic hot dogs were sold last year as opposed to --

Once again, I'd be glad to provide that.

Councilman Rizzo.

I think you addressed my question. I was interested to know 57 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 how many of the $1 or the --

The $1.25.

The $1.25 hot dogs that you sold versus the more expensive. And tell me again, the more expensive hot dog, how much is it really? Is it 2.75 or 3.50? What's the price of --

The ranging of hot dogs we have is a 2.75 hot dog sold in the general concession stands. The other hot dogs Councilman Kenney was referring to, they range from 3.25 to 3.50. They come with a choice of toppings -- chili, cheese, relish, onions saurkraut.

I don't want to lose track specifically quibbling over hot dogs. In reality, what it is, is family people trying to afford a traditional pastime out in the summer, and it shouldn't be diminished. And, again, I just want to caution the press for what it's worth. This is not simply issue of $1.25 versus 2.75. This is an issue of what it costs a family to enjoy themselves in this muncipally-owned stadium, watching America's pastime.

Well, again, referring to 58 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 U.S.A Today, a major newspaper in this country, it that says Veterans Stadium hit a home run and is the best reason to go to the game.

One question. I go to the stadium, the 300 level or whatever. I have four children with me, myself, and a male. What would it cost me to have one hot dog apiece one beer, and three sodas. Give me the price.

If you're looking for -- you can go to the Phanatic family stand and get lower-priced concessions; otherwise, it's 2.75 a hot dog and 2.75 a soda.

Let's say I'm buying three beers, two sodas, and five hot dogs. Can you just give me a price? Give me the price forget the 2.75, the 1.25. I'm running off to go to the quickest place I see for hot dogs, soda, and beer. What would it cost me? I mean, I'm not going to look around to see where it's the cheapest; I'm going to the first place I see to purchase hot dogs.

Beers are $5 apiece, and hot dogs at 2.75 times 3 is. . .

I want five 59 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 hot dogs.

And, actually, you can get a $4 beer.

Just give me the total.

Can you a add that all up.

I don't have a calculator. If you compare it to the standard in the industry, it's still going to be --

Well, I want to be fair.

So do we.

And so do we.

Comparing it to that industry is not necessarily fair to the average fan. I mean, they pay people $5 million a year out of -- (Unintelligible due to acoustics and parties speaking over each other.)

If you go to a movie theater, the pricing of a movie is $8.

I don't go to a movie theater. The citizens of Philadelphia are 60 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 going to the stadium.

Right.

And they partake in that venue to enjoy themselves and their family. My statement is that we have become accustomed to accepting high prices and relatively poor-quality food and choice.

Well, I would strongly disagree with that.

I know you disagree, I know you strongly disagree.

Strongly.

And I'll tell you something. I've eaten cheese steaks all over the City; the worst cheese steak in the City is the Vet.

I would challenge that.

Well, you may disagree, but --

I disagree. The facts don't measure up. We serve millions of people a year, and --

They have nowhere else to buy it. Where you going to go? 61 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

They can bring their own food to the Vet. There's every opportunity to do that.

That's the second question I have. First of all, how many Phanatic stands are there, how many reduced stands?

Two.

There are two in the whole stadium?

They're open every single game.

Wait, a minute. There's two cut-priced stands in the entire facility?

Right, correct.

And that's an opportunity for anyone to buy. Anyone can buy at that stand.

They're readily available. I mean, it's not like --

But there are only two readily available in five levels.

If you look at 1997, that represents 15 to 20 percent of the stands 62 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 open. I mean, we don't bury them on the 700-level, in the outfield. They're in the infield on the 200-level and --

But there are only two in the whole stadium.

Correct. You know --

Councilman?

I'd like follow up on that.

Sure.

What do you do to -- now, I don't attend a lot of games, baseball games, at the Vet. What do you do to communicate the availability of these Phanatic stands to the average fan that walks through the gate? How do they know that you have an opportunity for them to not spend a lot of money at the stadium? How do you do that? Because, let me tell you, I never knew that there was a Phanatic stand. I never knew about that.

Well, the Phillies can speak to this, but it appears regularly on the message board, it's in all the literature that is 63 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 mailed out to seasoned ticket holders. And since this is a value line situation for the fans, the Phillies certainly do a very good job of marketing and communicating that.

Do you have any responsibility to do that at all?

We would love to sell as many Phanatic hot dogs as people are willing to buy. It's a good value.

But, like the Chairman said, there's just two in the entire stadium. Tell me about football. What do you do now when the place is packed? Do you have a lesser -- do you have a --

The Phanatic stands does not exist for football.

We don't have an Eaglette?

No. 22

Okay.

Once again, an Eagles game is totally different, they attract a different crowd. 64 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

There are still a lot of kids there.

Not proportionately. A different crowds comes for Eagles game.

But there's no 7 breaks at all for Eagles, even for people or adults?

There's a one-size hot dog.

How much is that?

Last year, I believe it was. . . I will have to give you that information, I can't quote it hear.

You can't remember how much a hot dog costs during the football season?.

We sell a lot of different items.

There's more than one size of hot dogs at the ballpark, I mean. And things change from season to season. Even the beer cup that we mentioned before, the beer cup for the Eagles season is different from the Phillies season. 65 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

He just told me there's only one hot dog size for the football reason; is that right?

Well, other than the specialty hot dogs. I mean, there's the foot-long hot dog, New York, and specialty.

Well, I think I'd remember that if I worked for Ogden, how much a hot dog costs in football season.

Have you done any customer survey efforts to find out what people like, don't like, what they buy, what they buy the most of, or what they don't buy?

Absolutely. I mean, it's part of the fan experience. And when we get copies of that, I can tell you just from the limited number of complaints that we get, the facts don't bear out the quality in question. You know, pricing is always an issue, you know, but there's reasons for the pricing.

Well, I want to get to that before you're done. The question I have is, do you have any idea what percentage of your fan base brings food in? 66 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

No, I'm sorry, I don't.

Don't you even ask that question? I mean, isn't that a basic question?

That's a difficult thing to monitor. I mean --

If you asked -- you could ask them in the survey, Do you stop on the way in for a hoagie or do you bring in a sandwich?.

The Phillies so survey that, and information is available. I don't have the answer to that, but I'm sure the Phillies can speak to that.

But as a representative of the food service company, wouldn't you want to know what percentage of your clientele is bringing food into the stadium?

Sure, absolutely. But as far as we're concerned, it has minimal impact on that. By and large, you know, the fact of the matter is that we sell quite a bit of food down there.

Would you sell more 67 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 if the prices were lower?

Would we sell more if the prices were lower?

Yes.

Probably.

Yes.

Absolutely -- probably.

Would you agree that perhaps the most critical factor in the price, despite the argument, the subjective argument of quality aside, would you agree that the single biggest issue relative to the price of food and beverage at that stadium is the City's desire --

Absolutely.

-- to have 60 percent of the gross revenues?

No. 20

No?

No. 22

In the average restaurant in the city, there's a to 27 percent 24 markup on the food, and maybe a 40 or 50 percent 25 markup on the liquor. 68 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 Now, you're going to tell me that a 60 gross revenue skimmed off the top, in addition to 70 percent on alcohol, doesn't make a difference in pricing?

Well, once again, it's not 60 percent. You have to look at --

It's 58.21.

The 58.21 only speaks to a certain percentage of the standard facility. You'd have to look at the blended rate in the ballpark.

What's the blended rate?

And I would have to say that --

What's the blended rate?

-- it isn't that much different than it is at any our facility around the country. If you just look at --

You keep telling me the same thing, about every other facility in the country. This is not every other facility in the country; this is Philadelphia. 69 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

Yes, it is.

How many facilities in the other cities in the country are owned by the municipality or the state government?

I don't have that number.

Well, then how do you know the deal's the same?

Because we operate at a number of facilities like that. Seattle, you know, is one specific example.

How many facilities do you operate in the country?

Do you mean stadiums, arenas, theaters?

How many baseball-like venues do you operate in the country?

Six.

Of those six, how many are owned by the municipality or the state government?

The one that I know of for sure is Seattle.

What is their -- 70 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 what is the Seattle or city government's end?

It's 57.something.

So you can compare that to say that we're the same as Seattle, but the point is -- and I'm not trying to blame you guys for this 'cause I think in the end, the City may be at fault for this -- that 57, 58, 60 percent of the gross is obnoxious.

But the facts are, it's -- whether it's the city, it's a team, or whoever the client is that owns a particular facility, they're all somewhat similar, the contracts. You do have different types of contracts, you have management fees, but any time when you're dealing with a commission structure where it's a high bid, you're looking at a very large number. You may also have some that are negotiated. And, once again, you're looking at millions of dollars invested as well as a high commission. That is why the pricing that you look at across the country is similar. It's -- it's. . .

It's the dynamics of the industry. 71 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

Because it's the dynamics doesn't make it right. And the issue is that 60 or 58.21 percent is obnoxious. And if you drop that back to a reasonable markup, that the City would get a 20, 25, 30 percent, the price has to go down. I mean, it's a -- you don't have to answer that, but it's a simple yes. I mean the answer is yes. If the City didn't get 60 percent of the gross, the prices would be lower. Now, I don't know why you feel you need to defend the City on this because I'm not going to defend it on it.

I mean, we're just pointing out (unintelligible due to acoustics) in the industry, but you're right. If the commission is lower, effectively, the prices will be lower and the profit will drop.

And perhaps there would be the opportunity for more local vendors, people who are smaller in scale, to come in there and pay a reasonable cost -- a payment to the City through a management company like yourself and perhaps offer a better -- not quality -- a better 72 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 selection. Let's get away from quality now and go to selection.

There would be more of a selection.

Yes, we could expand the selection.

And that selection could be expanded, and you could also potentially have the opportunity for local, City, and regional people to be in there if the City wasn't skimming 60 percent off the top.

(Unintelligible).

My word is "skim," not yours.

Potentially it could facilitate more participation.

And maybe you could get Deitz & Watson.

I'm sorry?

And maybe we would have Deitz & Watson, I prefer Deitz & Watson.

Are there any other questions for these witnesses? 73 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

One quick question. You mentioned utility costs. What obligation do you have relating to water, electricity, gas?

We share in the overall (unintelligible). There's a percentage of the building for the tenants. The costs are divided among the tenants and we all share in it.

It's a set percentage by contract.

We didn't determine -- or I think you were going to get back to me or you don't know who gets the money on the surcharges on the alcohol.

That money is, once again, administered by us and it's paid out to police service and/or L&I.

Do you know how much that is? You didn't know?

No. 21

Do I know how much it --

Since you administer it and you pay it out, I assume you cut a check.

It's 25 cents per beer for 74 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 baseball and 50 cents per beer for football.

And what is the amount of the check?

They aren't necessarily directed to the City. In the Eagles' case, to facilitate payments, most of that is now going to the Eagles and they disburse it to the police since they are (unintelligible).

So you write a check to the Eagles.

In some instances. In other instances, we'll pay it directly to either the police and/or L&I. And we can get you that information.

What determines the various methods of payment?

Level of service and what days.

Why is it that you sometimes cut a check to the Eagles and sometimes to the City and sometimes you cut a check to L&I?

Different costs, different costs depending on --

It's who is ordering the 75 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 service at that particular time. If we're ordering L&I and dealing with L&I directly, then we cut the check to L&I.

Do you get invoices from them for what their costs are?

Yes, we do.

Could we get copies of those invoices?

Yes.

For the length of time that that surcharge has been charged?

Yes.

Thank you. And one other question. When was the last time the city audited this contract and its payments?

I believe 1994.

'94?

I believe.

Thank you very much. Are there any other questions for these witnesses? (No further questions at this time.)

Is Commissioner 76 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 DiBerardinis here and Mr. Grillone? (DiBerardinis and Grillone come forward.)

I appreciate your waiting. I wanted to give Ogden the opportunity to come up and rebut some of those allegations. I do want to welcome you and ask you to identify yourself for the record. COMMISSIONER DIBARARDINIS: My name is Mike DiBerardinis, I'm the Recreation Commissioner.

My name is Greg Grillone. I'm the Stadium Director. COMMISSIONER DIBARARDINIS: Councilman, I'm just going to outline our responsibilities at the stadium, and then Greg can do a little more detail on the contracts.

The committee should know that you guys are here because you are the contractee. COMMISSIONER DIBARARDINIS: Right.

Also let the record be clear that when this contract was first written, you weren't around, I wasn't around. So 77 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 what you're able to comment on, we would appreciate. COMMISSIONER DIBERARDINIS: Good. Well, just as a short background, as everyone knows, Veterans Stadium, is municipally-owned and sits under the operational jurisdiction of the Department of Recreation. We have 30 full-time staff at the stadium that are responsible for the general maintenance of the building. We have an administrative staff that oversees the operations of the facility as well as administers all of the contracts, which include our capital projects funded annually by the administration of the City Council. We're also the access liaison between both professional sports teams -- the Eagles and the Phillies -- between them and the City of Philadelphia. And that outlines our role. And Greg will give his formal testimony and go into a little more detail about the current vending contract which was instituted in November of 1985 and runs through 2,000, the year 2000. 78 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349

Thank you very much. Please identify yourself and proceed.

My name is Greg Grillone, I'm the Stadium Director for the City of Philadelphia and the Department of Recreation. Good afternoon, Councilman Kenney and members of committee. As I said my name is agreeing dill grill the Stadium Director for the City of Philadelphia and I'm responsible for the management and the operation of the City activities at Veterans Stadium. I'm here today to speak to you about the food and beverage contract at Veterans Stadium. It is a contract that was entered into by the City of Philadelphia and Veterans Stadium Associates back in November of 1985 and run from 1986 through the year 2000. Veterans Stadium Associates is a partnership comprised of the Ogden Services Corporation and (unintelligible). The contract grants to the partnership an exclusive license, subject to certain special exceptions, to operate and manage the concessions and other food service 79 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 operations at Veterans Stadium. By way of summary, sometime in early 1985, a working committee formed to prepare specifications for food and beverage operations at the stadium. The concessionaire at the time (unintelligible), had the existing contract which started with the opening of the stadium and ran through 1985. With the anticipation of the expiration of the existing contract at the time, the Committee's mission, as I said before, was to prepare new bid specifications. The committee was quite comprehensive. It was comprised of representatives from Finance, Procurement, the Law Department, the Minority Business Enterprise Council, representatives from the two teams, the Recreation Department, and stadium management, and, lastly, a consultant. The consultant hired (unintelligible) a recognized expert in the stadium food and beverage business, whose advice and knowledge were significant in the formulation of the various provisions of the specifications. The committee worked for several months on the preparation of 80 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 the document. It was a comprehensive and thorough process. It was one in which there was pre-qualification fees where prospective bidders were required to submit financial information by the City. The work of the committee culminated in Bid No. C-101-86, which was entitled "Specifications for the Operation and Management of Concessions and Other Food Services at Veterans Stadium" and it was dated June 28, 1985. Among other things, there were several areas of concern in which City opened hoped to make improvements over what the existing situation had been in the stadium. Some of those general areas were: Better variety and quality; A significant capital investment to operate the facility; Minority and women participation in both equity and the operation of stands; Better financial and accounting controls; And lastly, to maximize revenues to the City with reasonable pricing and comparison to 81 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 other stadiums and other facilities in the business. As I mentioned to you before, this process culminated in the aforementioned contract dated November 18, 1985. I might add that there was competition on the bid. Several major companies in the industry submitted bids, all in excess of 50 percent commission rate to the City. And these were major companies. These were not, you know, Johnny-Come-Lately's in the industry. From my perspective, it was a fair and open process. I've been at Veterans Stadium through the life of this contract, at first as Assistant Stadium Manager, and now as Stadium Director. And it would be my observation and opinion that the partnership has by and large complied with their obligations set forth in the contract. That doesn't mean that they're perfect. It is a dynamic situation wherein there's a continuing dialogue among the City, the partnership, and the tenants.

They realize the importance of customer satisfaction in their business and continue to strive towards providing 82 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 high-quality products and service. Moreover, as it was mentioned before, Ogden is an international company, with a highly visible reputation to protect. I believe that the operation has significantly improved over what the stadium situation was prior to 1986. As far as comparison to other stadiums and arenas in the area, I believe we compare favorably. I base that on various sources of data in the industry; one which is the Fan Pricing Index alluded to before, as well as surveys. As I said before, the contract will expire at the end of the year 2000, or roughly two and a half years from now. I believe it is the City's intent to review all of the possible alternatives available to us and decide upon the appropriate course of action at that time. I believe it is the City's intention to begin that process in the near future. And as a matter of information, there have been some informal discussions to that among several City agencies already. I hope this gives you some context and background, and I'd be happy to try and answer any 83 COMMITTEE ON LICENSES AND INSPECTIONS - RES. 980349 questions you may have.

Thank you very much for your testimony. The City portion of the gross revenues, 58.21 or 68.21 of the alcohol, does that go directly to the maintenance, improvement, and upkeep of the stadium?

No. Actually, Councilman, it goes right to the General Fund of the City of Philadelphia. So not only does it fund activities of the Recreation Department, it also funds other City activities.

Do you know how much that number was last year that was turned over to the City General Fund?