Okay. If the Phillies' preferred site from Day 1 had always the been the North Lot of Veterans Stadium, correct?
There was a time when Broad and Spring Garden was a preferred site.
Okay, well, besides Broad and Spring Garden, their preferred lot was the North Lot of Veterans Stadium.
Once they were -- again, I just want to be careful because the Phillies have always believed that a Center City ballpark would have been a good idea, they always 208 11/30/00 - STADIUM HEARINGS believed that there would have been some premium value to it. They were willing to either endure time or cost or something to enjoy the benefit of that premium value. They thought Broad and Spring Garden could have worked; we all know this we didn't get there. We thought that 12th and Vine had some of the same characteristics, and I think the Phillies did too. But when you have to start with the proposing that there was no viable Center City site, then, yeah, I think they would have said, Okay, if there's no viable Center City Site, we might well be in the sports complex versus somewhere else.
So we're talking about July 2000, August 2000, that July-August 2000, when that epiphany became clear to everybody? I mean, I'll say July or August of 2000.
Wouldn't it have been possible to have legislation to us the very first day of our return in September of 2000 for two South Philadelphia sites? And I think -- and 209 11/30/00 - STADIUM HEARINGS I want to -- I want to characterize my question by --
I want to characterize my question that saying that we're doing this site now within a period of two weeks, so I would have thought anywhere from August till mid-September would have been sufficient time for us to have these bills in front of us for a period of three months' worth of deliberation, neighborhood meetings, nighttime meetings here at Council, an effort to kind of get everybody behind the good reasons why we should be building these stadiums, which, I agree, we should be building -- both for the employment, the construction employment and the permanent jobs and the tax ratables and the fact that we wouldn't lose our teams. Wouldn't there have been a three-month period for us to have this legislation before us, to do our due diligence, and to convince the community out there that this is, in fact, a good thing for them? 210 11/30/00 - STADIUM HEARINGS
Councilman, we know each other way too long and way too well. Don't take --
I will -- and this is -- where I'm going with this question is that I believe there would have been sufficient time in that three-month period to deal with the neighborhood complaints of the Veterans Stadium neighbors as it relates to the potentiality of a baseball facility on the North Lot of Veterans Stadium. You certainly don't have enough time in a period of two weeks or three weeks to convince those people who have suffered 30 years with the Vet that this would be a good thing. But I believe -- and you don't have to answer the question -- that three months would have been sufficient time, even though it's a short period, for us to have talked with them, dealt with them on special service district issues, dealt with them on perhaps some tax incentives of some kind, and convince them that the North Lot was something that they could accept based on the fact -- and you can correct me if I'm wrong -- that the Phillies facility is roughly 211 11/30/00 - STADIUM HEARINGS two-thirds the side --
-- of Veterans Stadium? So even in the worst-case scenario, they would have had a smaller, less dense lower-rise facility on the North Lot of Veterans Stadium.
Excuse me, but in that event, wouldn't we still have had to buy other properties for additional parking?
Yeah, okay. I think I should. 212 11/30/00 - STADIUM HEARINGS I think that in any scenario where we were going to place two stadiums in South Philadelphia, understanding that we were making at a minimum a 33-year decision, if not a 50-year decision or 60-year decision, 'cause in real time, to step back and say, What do we need to do complex? I mean, maybe we should have done it when we built the second arena, you know, when we really didn't add any land, we just added a building. So I think, Council President, you're right. I think any thoughtful analysis of four buildings down there, you'd want to add to the parking, you'd want to add to the circulation, and make that place work better. It just would have to happen.
So I guess the continuation of my question is that -- and may I say that the Vet goes away in the scenario; in every scenario, the Vet is demolished.
And the space for 213 11/30/00 - STADIUM HEARINGS the Vet is, in fact, parking --
-- for those facilities, so we would have had perhaps not the amount of increase that this plan suggests, but if there would have been an increase --
Well, it depends on the scenario. A scenario that would have placed a new baseball stadium somewhere on the current Vet lot would not have netted significant new parking because you would have replaced one building for another.
Well, what happens -- it's two-thirds -- remember, it's lower.
It's 17 acres versus 36, right? 214 11/30/00 - STADIUM HEARINGS
Well, but now -- but that's not even -- I'm not -- I mean, I'd be happy to show you. The 36 acres includes the 1,000-car VIP around the Vet. And because the Vet is set up the way it is, the ramping system, which lays on the exterior, creates a bigger box. Depending on how you build the baseball -- you can ramp inside, you get the smaller 15-acre-ish kind of building. If you ramp on the outside, you'd need a bigger footprint. But the other part of it is, I think we all agree -- I mean, if nothing -- if we simply look north of the Vet lot and we look at the First Union parking lots, the First Union parking lot's clearly better than the Vet lot. I mean, they just work better: they have more lanes of circulation, they have aisles, they're divided into smaller lots. That's what you want to do: have small lots of several hundred cars. So when you try to lay it out right on the north, you end up with the same number of spaces.
Well, on the Jetro site, have you had the time to do the traffic 215 11/30/00 - STADIUM HEARINGS analysis and traffic study and traffic that would indicate that the Jetro site is going to be any better for traffic flow than the North Lot would be? I can't imagine that in this smaller frame of time, we've had the ability to do that kind of analysis on parking and traffic flow.
No, I -- let me -- 'cause I know I'm running out of time.
Is Councilman Kenney willing to yield to Councilman Ortiz? Is Councilman Kenney willing to yield?
Is it now the placement -- isn't the placement now of the stadiums far less accessible to public 216 11/30/00 - STADIUM HEARINGS transportation, much more accessible now to car transportation and parking, but less accessible to the SEPTA and public transportation people taking the train to going to the stadium because they're so far away from the train station?
That's like saying that somebody who comes to Suburban Station, you know, won't walk to the PECO building, or somebody that comes to -- no, a half a mile is the distance from City Hall to about the Litts building. I mean, are we saying that people don't walk those distances? It's what you'd walk in a large mall. You walk that at King of Prussia Mall when you park there at the holiday season to come to the store.
(Inaudible, off-mic.) UNIDENTIFIED SPEAKER: How would you know about that?
Well, I'm told about it, I never go there. All right. 217 11/30/00 - STADIUM HEARINGS
Thank you very much. What is -- on the Phillies, on the original scenario for the North Lot, what was the closest home to the building -- to the facility? I understand it to be about 500, 490 to 500.
Okay. And there was also a very extensive plan, which I understand still exists, for landscaping and berming and insulating the back end of the VSN neighborhood from any facility there.
Yes, it still exists because we want to create a buffer between them and the parking areas.
So the distance between the Jetro, Maggio, 777 site that we're 218 11/30/00 - STADIUM HEARINGS considering today is about an additional 650 to 700 feet.
Do you believe -- well, how many homes are in the Veterans Stadium neighborhood?
220 homes? I would imagine that about 150,000 maybe, low-end?
Probably 150 low-end. I think we've sort of paid attention to some of their -- I think there's been recent sales of over 200.
So if we say $200,000 for 200 homes, even I'm -- and I'm -- and it's a beautiful neighborhood, there are lovely houses there and the people there have suffered tremendously.
But just in a really hypothetical situation, it would have been cheaper to buy all of those homes than it would be 219 11/30/00 - STADIUM HEARINGS to purchase the land that we're being asked to purchase now if the issue was only one of distance from the neighbors.
Well, if the issue -- if the issue were make the neighbors go away, yeah, I mean --
The issue is if a facility was placed on the North Lot and neighbors are that unhappy with it and we gave them the opportunity to purchase that home, it would probably -- probably? -- I think it would definitely be cheaper than what we're doing now to purchase four additional properties that we wouldn't have needed under the old scenario.
Well, my only cautionary note there, Councilman, is actually reflective of the Council President's question, which is, I'm not sure you would have picked up any significant parking in that; you would have eliminated the homes. 220 11/30/00 - STADIUM HEARINGS
The homes don't actually take up much acreage. If you look at them, you actually see they're -- you know, they're row homes; I mean, they don't take up a lot of space. So that if you still wanted to address a more efficient, effective four-building sports complex, I still think you'd be looking at buying some property to add to your parking inventory and make the place work.
Could you say today here, as you said in a definitive way, that the North Lot of Veterans Stadium, the area of land that is not going to be used for a Phillies site, will remain parking in perpetuity?
No, not in perpetuity; how about over the next 30 years?
The entire -- the North -- I'm sorry, Madam Chair, I'm having trouble over here. The North Lot of Veterans 221 11/30/00 - STADIUM HEARINGS Stadium and the lot that would be created by the demolition of Veterans Stadium --
-- are you saying today that over the next 30 years, those lots will be used for parking only?
Yes, they were going to be used for parking. The only outstanding issue -- and I say it's an outstanding issue 'cause there is not an agreement on it -- has been whether there would be any thought of ancillary development to the sports complex along Pattison Avenue. This is an issue that has been raised of some concern to the affected communities. We haven't said we're doing it. I don't want to sit here and say -- you know, until it's resolved, I don't want to say -- I mean, we'd like to think 222 11/30/00 - STADIUM HEARINGS about it. It would be limited in --
Excuse me, excuse me. And while you're thinking about it, we are thinking about putting in a zoning ordinance.
So that it would go back -- any application would have to come back to Council and be approved by the area residents.
I mean, 'cause I wanted to make sure my answer was full too, Council President, which was, in fact, even if --
No, no, I -- that's fine. But even if we wanted to do that, I just want to make it clear for the record here, we would have to come to this chamber to make it 223 11/30/00 - STADIUM HEARINGS happen.
We're not saying that as part of this bill, you're giving us the right to do it.
Under what scenario would you have to come back here unless it's amended into this bill?
Well, because we -- the only scenario where you might want to consider doing it is a scenario where you would, I'll use the term, "rearrange" the current development rights that Comcast SpectaCore has, and that would require an amendment to the Comcast SpectaCore agreement, which you -- which, in fact, if you go to the development lease, it says we can't move that development -- it's specific in the sentence -- without City Council approval.
If you didn't want to flip the development rights, you wouldn't have to come back.
But when was that potentiality made known to the neighbors who so heartily cheered the movement of the stadium across to Tenth Street into the Jetro lot? Were they made clear from the get-go that, in fact, this could be used for something other than parking?
I'm trying to think of the sequence of events. When we announced -- when we made the announcement of the site, which was on a Tuesday, I think, I believe we said at that press conference that one of the possibilities, but it was not a certainty, was that you might have some ancillary development because you'd put four buildings in the sports complex.
I listened to that press conference very closely and never heard that, but let me just --
Excuse me. And I attended a community meeting, and I don't believe that was ever said then either.
But let me ask you 225 11/30/00 - STADIUM HEARINGS a question about -- just one final question on site selection and ancillary spin-off development. Theoretically, if you were to create two critical masses of building, theoretically, on the North Lot of Veterans Stadium and a football facility on the T-Warehouse site, would you not expect that property around that complex would -- (Interruption by sounding of many cell phones in chambers.)
They're cell phones. That the property around that complex would, in fact, through a private sector initiative, experience development? For example, the value of the Jetro property, I would think, in a two-stadium scenario North Lot and T-Warehouse, may in fact create economic pressure on the owners of the Jetro to say, whoa, wait a minute, this property has increased in value because people may want to develop this site and maybe I'll sell it myself and have some private development. The owner of the Acme warehouse could say, you know, rather than have a refrigerated warehouse, which I'm having trouble filling with 226 11/30/00 - STADIUM HEARINGS tenants, perhaps I could do some retail or ancillary entertainment development at that site. The theory -- the bottom-line question is, besides this issue much distance from the neighbors, we do not have to invest money in creating economic spin-off private- sector development because the investment we're making is in the two critical masses of stadia, which in fact create that kind of opportunity naturally, not with our help. And the other thing I want to say is that the $54 million, the $60 million and possibly more for the acquisition of those properties is our hole. Is it not representative of the hole in this entire deal, the shortfall of this deal? Is it not represented almost exactly by the amount of money we're going to need to acquire four properties that, in another scenario, we never had to acquire?
Well, let me just make 227 11/30/00 - STADIUM HEARINGS a couple comments. And without disputing Council's prerogatives obviously on zoning or any of this, to the degree we want to create a plan -- (Interruption by sounding of many cell phones in chambers.)
-- a plan for the area, I mean, currently, we have zoning in the food center that says you can't, in fact, do this, you know, kind of ancillary development on food center property. And, in fact, you know, it's a very specific zoning overlay that we did, and I -- and it's one of the things I am actually, you know, was thanking Council yesterday. I mean, it was one of the things that we did that was the right thing to do. I mean, we preserved that food center --
No, my point is, so you need to figure out what's the food center and what's the sports complex. You know, they happen to abut each other. On the one side, you might 228 11/30/00 - STADIUM HEARINGS want to allow certain development; on the other, you probably can't or else you're going to drive out a whole other couple thousand jobs, you know, which we all know are very active.
In the food center side of the world; you know, the produce market, seafood. I mean, those are happening places, people make living wages there. And so -- and to the question of does the additional property, quote, equal the need for additional contributions, I mean, you know, you can go to the math at the table and pull out certain numbers that say, well, these add up to 53 million so they must be what's, you know, they must be what's causing the problem.
You could say that we should take out the demolition of the Navy Hospital. I could say -- you know, we could create a set of numbers that --
Well, could someone 229 11/30/00 - STADIUM HEARINGS argue rationally that that is in fact what happens? I mean, I can't see how you can dispute the fact that we're acquiring four properties that were never in any scenario for South Philadelphia, which creates a number, which happens to be almost exactly the number of the shortfall. I mean, you don't have to answer it, but I think it's clear. Okay, I have one other request before I finish questioning for Mr. Hankowsky. I would like to know today the amount of real estate taxes, use and occupancy taxes, wage tax, and 1 percent sales tax that is generated from the current operation of Jetro, 777, Maggio. I know the Acme probably doesn't generate much real estate tax 'cause it's -- there's no one in there. And what T-Warehouse generates in those numbers. And I want to know whether or not that was taken into consideration when we looked at the revenue, increased tax revenue coming to the City that we also go to the other side of the ledger and say no more T-Warehouse.
Yeah, we did do that, Councilman. What we did in the tables -- in Table 2, which is the table of the future world, column 7, is called "Foregone Tax Revenues." And that column represents the real estate tax value of the five subject properties and a proportional share of business taxes that come out of those buildings today. And I can get you the backup.
Thank you. The Chair recognizes Councilwoman Blackwell.
Thank you. Mr. Hankowsky, some of the testimony indicates that we'll be talking about site preparation for the Eagles and demolition of the Navy Hospital and construction of the parking lot, indicates additional funds might be needed beyond the bond proceeds -- $18.5 million and $8 million respectively. Where will they come from? 231 11/30/00 - STADIUM HEARINGS
Councilwoman, those are the -- those funds -- and there are certain additional funds needed for the Phillies site work that total $53 million. As I indicated in my testimony, and as I think the Mayor indicated in his testimony, we are working to put in place that funding. We are talking to several sources, both public and private, that could assist us in doing that. We have not concluded those discussions. What is absolutely clear in the transaction, though, is the City will not be filling the need for additional contributions.
Okay, thank you. Well, where will additional funds come from if we have to spend over the proposed cost for acquisition of properties? I know one property's still not settled.
Right. If we need more money for the properties, it will come from one of two places. It would either come from our currently budgeted $10 million contingency line item. And if that proved to be inadequate, then 232 11/30/00 - STADIUM HEARINGS there would be a provision that the Board of View awards over that amount would be on obligation of the City.
Okay, thank you. I only have two more questions, Madam President. I'm really short. Mr. Montgomery referenced in the attachment of his Phillies presentation that Council would be presented with a scheduling report in assuming that we would need to see that to address pedestrian and traffic congestion concerns. Is that schedule ready, and has there been a traffic engineering impact report done?
We're on our second draft of the scheduling report, and I would hope to complete it shortly and get it to Council. We have a traffic study underway right now, which has not yet been completed. It's a full-blown traffic study.
I think that might be a couple weeks. The full traffic study? That might be a couple weeks away. 233 11/30/00 - STADIUM HEARINGS
Has the Commonwealth guaranteed the grant amounts listed in proposal? And what is the contingency plan if those funds are not enough? Who's liable for this risk, the City or the teams?
I'm sorry, Councilwoman, I just didn't hear the beginning the question.
Has the Commonwealth guaranteed the grant amounts listed?
Oh, I'm sorry, the Commonwealth amounts. The Commonwealth has approved a capital budget that provides for those amounts. We have, in fact, been in contact with the Commonwealth, with the Commonwealth's attorneys who are actually talking to them about the grant agreements that are necessary to do this mechanically. One of the actions you have before you is actually the authorization to submit the application, which has to be done. They did -- they funded 75 million to the stadium in Pittsburgh, so they have fulfilled their commitment there. We would have every expectation 234 11/30/00 - STADIUM HEARINGS they would fulfill their commitment here. We have copies of the agreements from Pittsburgh, and they don't seem to present any reasons why we wouldn't get the grants here.
Would we be liable if something happens, or the teams?
I think if we don't get the grants, the whole project isn't proceeding. We're not proposing to fill any -- if those grants aren't there, we're not stepping in to fill the need for the State money.
I will yield -- since Councilwoman Reynolds Brown hasn't had a turn, I will yield. I won't yield to Ortiz, but I will yield to Brown. (Laughter.) 235 11/30/00 - STADIUM HEARINGS
Thank you, Councilman DiCicco. Good afternoon, gentlemen.
My few questions are actually a follow-up to questions that have already been raised by President Verna regarding specifically the Children's Fund and those kinds of conditions that may impact the finalizing of the deal.
Okay. And I would be remiss not to say thank you to the Mayor and the negotiators for making a commitment and then following through, 'cause I think that's the issue for some of the terms, that the follow-through happens. In Exhibit D of your -- the documents that you sent to us, at the top of the page in italics, and I quote, it reads: "Key terms of this agreement are subject to change due to finalization of the transaction." Given what is in writing with the lease 236 11/30/00 - STADIUM HEARINGS terms for both the Phillies and the Eagles and specifically as it relates to the Children's Fund, is that in jeopardy?
No. I think, Councilwoman, this provision was put in front of the term sheets at the point where they were literally completed -- I mean, quite candidly, within an hour of the announcement -- to make sure that when we went back and had all of the right lawyers read them -- for example, we state local law and tax-exempt, we need bond counsel to read all this. I believe it's fair to say that this provision will come out and should come out when you adopt this, that these will not be subject to change. This was a catchall so that as we had lawyers read this and make sure that nothing did here, you know, was amiss of something, that we would have that provision. But our intent is that these are the provision; there shouldn't be no 22 such caveat when they are approved by Council.
It has also been expressed that we know that we have the gap of approximately -- I've 53 in one area and 54 in the 237 11/30/00 - STADIUM HEARINGS other. And an appeal has already been made for us to acknowledge that but possibly proceed with the adoption of this in spite of that. Are there any other outstanding unresolved matters like the gap that currently exists that may also break -- or potentially break the deal?
Well, I want to answer that question, but maybe I'll be given an opportunity to talk about the additional contributions. I mean, one way to look at the additional contribution situation is to analogize to exactly what the State did. The State of Pennsylvania -- and it's actually not that long ago, it was January of 1999 -- enacted legislation that provided for $85 million for each of these two buildings. I mean, they were actually kind of the first people in. What we're asking Council to consider is authorizing the City contribution, okay? Now, the teams have to put up their contribution, and we have to collectively find the contributions. If that doesn't happen, it doesn't happen. But the State isn't moving its number and 238 11/30/00 - STADIUM HEARINGS we're not moving our number. I mean, that's kind of where we are. In terms of other things that have to get worked out, I mean, we have to work -- that are significant to the transaction, we -- and I'm trying to think. Well, obviously, we've got the property owners we have to deal with, we've got to put in place a parking arrangement between ourselves and Comcast SpectaCore 'cause we're rearranging that old parking situation from the old deal for a new deal. I mean, there's obviously all kinds of documents, but --
But all of those things that are outstanding in no way will impact what currently has been put in writing and would be -- (Unintelligible, parties talking over each other.)
Eagles lease terms. The sports complex services district will enjoy the same cushion of protection as the Children's Fund?
Thank you. The Chair recognizes Councilman Clarke.
I was out of the room a couple of times, and I don't know, this question may have been answered. With respects to your calculations as it relates to the usage of both facilities, did you calculate different scenarios, like a hundred percent occupancy, attendance?
Or 80 percent, 60 percent as it relates to the numbers?
Yeah. We did take a look at that. One of the big variables is the Phillies, the baseball stadium. So the Phillies -- and they'll be, obviously, testifying at some point over the next day or so -- are actually anticipate that they would draw about 3.3 million at the opening of their facility. And what we -- 240 11/30/00 - STADIUM HEARINGS we talk about stabilize, you know, kind of come down and proceed at 2.9? 2.9 million. We actually run our numbers, our tax numbers, we actually start them at 2.9, and then we take 'em down to 2.5. So we've already said it would be great if you do what you say you're going to do, but we're going to base the City's analysis on being conservative.
No, we took 400,000 off where they started and where they ended per year of attendance that we discounted, we sort of threw out the window. If it happens, it makes our numbers look better, but we took it out. When Rob spoke about the five-year plan analysis and the impact on the five-year plan, the Finance Department took yet another, I'll use the term, "cut" and took -- you have to help me, I always forget. It took 80 percent of my numbers, not the Phillies numbers, the Arthur Anderson numbers for the Phillies, 90 percent for the Eagles, and 50 percent of the other events to calibrate what would happen in the five-year 241 11/30/00 - STADIUM HEARINGS plan. So it took even another, you know, worse-case or, you know, more conservative or pessimistic scenario, and said that even if that happens, what happens to our five-year plan? And those are the numbers that Rob presented a little bit earlier.
So those are the final numbers that we see before us today.
That was how we've looked at the five-year plan and then the Arthur Anderson numbers. We took -- we took the Phillies numbers down. The Eagles football numbers are -- have been pretty consistent, so we let those be with. We did use the Eagles numbers on other events, which is an increase over historic averages from about 400,000 people to about a million. So about a 600,000 increase.
Thank you. The Chair recognizes Councilman 242 11/30/00 - STADIUM HEARINGS DiCicco.
Thank you, Madam President. And, Bill, I'm reluctant -- not reluctant, I apologize for not offering you my congratulations and sincere wishes in your next endeavor. I want to thank you for the patience you've had with me over the few years, explaining to me what PIDC's role for the City's future is and TIF financing and all those other things. Our loss, as they say, will be Willard Rouse's gain. But thank you for all of your help.
There are a number of projects that have been approved by this City Council, and many of them are in my district. Some of those projects have yet to begin, for various reasons; some of them are still looking for additional finance, whatever.
And there are maybe one or two projects that are dependent on outside funding sources aside from what the City's 243 11/30/00 - STADIUM HEARINGS contribution is and other government entities have already pledged to the project. My question is, and I'm not asking you to divulge any information that may be still considered confidential or still in the negotiation stages: Do you in your opinion believe -- or have any opinion, I should say, do you have an opinion as to any of the projects that have not yet begun but are still awaiting some contractual agreements between themselves and some other parties that may be affected by similar deals that may be looked at to the stadiums? You and I know what I'm talking about without being too specific. Do you in your opinion feel as though that some of the considerations to fill the $54 million funding gap at the stadiums may jeopardize another project or projects that are still awaiting final approvals? You're shaking your head, Craig.
I've become aware, I guess, in the last -- actually sort of almost the last 24 hours that there may be some inter- relationship between a couple of projects that, I, 244 11/30/00 - STADIUM HEARINGS quite candidly, between briefings and hearings, haven't had the opportunity to explore in any death, so I can't really characterize -- I'm not sure I have a full sense of how interrelated they are at the moment.
So from what you know to date, you're not aware of anything that would or could jeopardize any of the other deals that we have?
I don't know enough to answer is what I'm saying. I want to be honest, and I just don't know enough -- particularly as you're using the word "jeopardize." To me that would mean I would really need to know more than I know now to characterize that.
I mean, 'cause I am one -- for the most part, I'm supporting this stadium deal and I've been very patient, as you know, with the 12th and Vine site.
And I worked very hard on some other deals to hopefully make those things happen. I don't want to see us be in a position to make stadiums happen that we are now 245 11/30/00 - STADIUM HEARINGS taking resources from other projects that we have worked very hard on --
To find that all that work has really been -- is literally going down the tubes just to get the stadium deal done.
I understand. I -- you and I understand each other totally.
All right. The other question I had is, and this may have been asked 'cause I got back about around 5 after 1, I returned around 5 after 1. Have you had any opportunity to analyze Professor Rosentraub's report on the stadiums?