I don't know any member of Council who knows what those goals were.
Right. I don't think it would be productive and I think, therefore, I would respectively decline, and I know that's not a satisfactory answer, to share sort of the character, you know, of all of the back-and-forth negotiations. The fundamentals are, though, we have a deal that struck, and I'm not sure that we can -- we can gain additional provisions as much 290 11/30/00 - STADIUM HEARINGS as we might seek them. To your point about seeking to see the final documents to read the fine print, I totally understand what you're saying. I think you know our position today. I've stated previously we are seeking Council approval for a transaction that would function on the basis of both the terms sheets we've submitted. We believe that we will -- hopefully, in cooperation with Council, be amending those to include certain significant elements of the transaction that we all need to know are in place in there, but we simply won't on the schedule we're on be at a point where the full documents will be done against this calendar.
Well, I don't understand why you can't meet tests. This is -- what is the great emergency here that would justify a legislative body surrendering all of its powers of oversight and previous sight with respect to new transactions to a mayor? I mean, have we elected a mayor of this city or have we elected a dictator? Because you're asking us to forego all of our rights and to sign legislation turning 291 11/30/00 - STADIUM HEARINGS every important decision over to the Mayor. And I personally find it an affront to myself as a legislator, and I think it ought to be so considered by all other members, because we were elected precisely to examine each of these transactions and to render a legislative decision and to have a record on which we run if we choose to reelection, and the voters say yes or no to us. But you're asking us to just trust the Mayor.
Well, we can trust the Mayor but you can't trust public funds. We have -- we're like executors. We have duties of due diligence, we have duties to protect public funding. It's not private funding. With respect to private funds that any individual has, he can or she can decide to exercise no due diligence, or exercise a great deal. But these are public funds you're asking to us close our eyes, take the words that are unenforceable, there will be nothing in writing that will give us any kind of guarantee as to anything which we can take in and enforce against the teams in the circumstance where it may 292 11/30/00 - STADIUM HEARINGS be necessary. All lawyers, all businessmen know the importance of a signed agreement is not when everybody's on good terms. And if everybody's on good terms all the way throughout, it won't matter what the terms of the agreement are; people learn how to work out differences when they're on good terms. But if there are disputes, as for example, when the teams indicate to us that despite ten more years on a lease that everybody had presumed was permanent for 30 years, they say, Well, we're looking at that, maybe it's not so permanent, maybe there's a basis for terminating the lease. That's when the written terms are important and every little word is important. Aren't we entitled to that? You've been dealing with the City Council, you've been representing the Administration in one form or another. Isn't this legislative body entitled to that information?
I mean. Maybe we're asking the wrong person; maybe all of these questions should have been addressed to the Mayor 293 11/30/00 - STADIUM HEARINGS this morning when he testified but, of course, he would have said he doesn't know any of these details and, therefore, he's going to provide everybody in the Administration who has any knowledge of the details to present them. But maybe I'm asking you a question that only the Mayor can answer.
But you haven't made this decision; it's the Mayor's decision that Council ought to be asked to cover its eyes and sign on the dotted line, no matter what the language is above the dotted line.
You're right, the Administration has made the to request Council's action to do this transaction on this basis, you're exactly right. I wouldn't characterize it the way you have. I mean, clearly, we've -- you know, the level of Council involvement in various transactions is different in various transactions, and some full documents have been here and others -- you know, we do tax increment financing, which 294 11/30/00 - STADIUM HEARINGS I know you're also not necessarily comfortable with, Councilman, but we don't bring you project plans but we don't bring you the mortgages and the final loan documents. I mean, you approve a level of funding that the City will do and go no 7 further. And what we're asking is that you consider a level of funding we would do and go no 9 further.
But isn't this the biggest single project we've ever dealt with as far as usage of general fund money? Tell me how wrong I am when I say flatly that it's going to cost the City of Philadelphia net-wise, say, tax increases are very likely, if this deal goes through, because as I see it, a billion dollars minimally, perhaps much more, in the next 30 years is being drained out of our general fund at a time when we have all kinds of needs. The Mayor accurately notes the needs of the School District and the Gas Works. Yesterday morning, it was the library's turn. There are all kinds of needs in the City. And what's going to happen is because of these -- the encumbrance of this tremendously 295 11/30/00 - STADIUM HEARINGS large sum of money from the general fund, other needs are not going to be met, and some of them are going to have to be met, and when that happens, you know there's going to have to -- something is going to have to happen with respect to the tax structure.
Isn't is a billion dollars in public funds that are required to pay off the bond issue that you're asking us to authorize? Let me ask you that very specific question.
I think I've got about five lined up, but let me try to do all of them real fast, if I could. Just give me a minute.
I have never mislead you as to what the number; it's in my table. If you go to my Table No. 2 and go to the column that shows all City expenses, there is a line at the 296 11/30/00 - STADIUM HEARINGS bottom, $980 million. That is our exposure. We're going to spend $980 million to pay off the debt and the Eagles operation and maintenance expenses. That is our obligation.
If I could finish, if I could finish, let me please. That is our obligation. If you want to take the same kind of number of 30-year who has to spend what in the deal, each of these two teams are going to spend about $1.4 billion in equivalent nominal dollars over 30 years to handle their obligations for their debt for their operation for the capital for their buildings. So everybody is making significant exposure over 30 years. In addition, Councilman, when you say raid the general fund, we're taking it away from libraries, rental car tax, it was put there to deal with stadiums. The revenues we're saying we're going to spend are coming by fans, 80 percent of them non-Philadelphians, spending money here that we're going to tax, take that money, and put it into the project. 297 11/30/00 - STADIUM HEARINGS If we don't do the project, if you don't do the project, you don't have $980 million to spend on libraries; you just don't have it at all. In fact, what you have is a world where the general fund is going to be significantly at risk in the next ten years because you're going to be at the Vet and face a series of possibilities, all of which are on the downside, none of which are on the upside. I would say you're -- and this is -- and it is a risk, it is a risk. But the risk you're taking is the possibility of doing okay, which is what we're proposing, maybe even better, and there's a downside risk. Don't do it, that's your election. If you don't do it, if you decide public money doesn't fund stadiums --
Then you have no 21 upside. (Unintelligible, parties talking over each other.)
We come in here today and the person who appeared as an expert 298 11/30/00 - STADIUM HEARINGS witness or a consultant appeared and said, Do it but save some money. This is an easy way to save $180 million for the taxpayers of Philadelphia.
And this is how it's been done, and this is much more costly here in Philadelphia than elsewhere, and why ought it be that way? They raised that proposal, and all we here is a legislative body responsible, responsible for taxpayer money, not wanting to hear of ways to save the money. Have you seen -- you said earlier the teams said to you that's all they can pay, or language of that kind.
Have you seen their books? You said you'd take their word. I've never heard of such a statement from a business negotiator. Even in union negotiations, generally the union, when the company says, as it almost always says, We can't afford to pay the wage increase you want or the health benefits or whatever else, the union says, Show us. If you show us that you can't afford it, then maybe we'll 299 11/30/00 - STADIUM HEARINGS listen. We'll have something to go back to our membership on and explain to them that there's no 4 money for it. Have you seen their books? You say you'd take their word. How do we know (inaudible) that you speak about, 'cause they told you? How do you know that they exist?
What we did, Councilman, is, we ran an independent analysis of what we thought a team would make with new stadiums in Philadelphia, both in baseball and in football. We looked then at the cost they might have to pay for debt service and looked at where was the line of what -- I'll use term, what can the teams afford to do. We did do that analysis, independent of the teams.
We would like to have it, and I would request that you furnish it to the Council President --
-- the documentation 300 11/30/00 - STADIUM HEARINGS which convinced you that you could take the word of the teams with respect to what they can afford. Because that would be important to all of us.
Nobody wants to put the teams out of business. We hope they're going to prosper over these 30 years, but we think they ought to take -- at least I think that they ought to take a much bigger share of this risk because the great gains are going to be their gains. We're going to be very lucky, Mr. Hankowsky if this turns out to be revenue-neutral. It will be considered a miracle as well as a good deal for the City. Tell me, when did the negotiates begin on the Phillies and Eagles contracts and the stadiums? When did the final negotiations -- there was a period of 12th and Vine, months in which the City could have spent time and you could have spent time, and then the fiasco about the Acme warehouse that Councilman Rizzo raised would not have occurred because you would have been working on the deal, you could have checked out 301 11/30/00 - STADIUM HEARINGS everything. Negotiations often take a long time. I admit these are complex negotiations. When you're forced to do it in a brief time to meet a certain deadline, then you've lost most of your negotiating power. Then David L. Cohen -- and I have to turf emphasize the L -- would not have had the time to spend with the teachers' union; he would have been negotiating this contract. Or, on the converse, he might have spent the time with the union contract and not with the Phillies. But all of that time was lost while everybody in the City, except the Mayor and maybe a few people very close to the Mayor and the Chamber of Commerce, kept on talking abut how it had to be 12th and Vine and nothing else would do. Everybody else in the City knew that South Philadelphia was going to get the two stadiums. But I'm asking, when did the real negotiations begin? What period of time has it been? I believe that Councilman Ortiz in his question indicated he thought it was last month. I think it was much less time than that. How long 302 11/30/00 - STADIUM HEARINGS have you negotiated?
It was in October. I'd actually have to just check my calendar. It was in October.
I'm very concerned. I think the City shot itself in the foot when it permitted all of that time to be wasted away on 12th and Vine, on this fantasy that the Mayor had, and everybody all followed in lock step, all of the people close said, Yes, 12th and Vine is mighty important; yes, it's the best place for Center City, everything else. And it's got to be Center City or there's no point in building the stadium. And we all knew that the tale would come to an end and it would be South Philadelphia. I think Councilman Kenney made that statement the 303 11/30/00 - STADIUM HEARINGS very first day that the Mayor talked about 12th and Vine. I raise this because that was important time, and we would not be confronted with being asked to consider and approve something that we know really nothing about that we're asked to take on your good reputation, on the fact that you speak so nicely and pleasantly, and you can lull us into, Well, this is really going to be good, and this is going to be fine, and the view is optimistic. You know, you're very good at that; you do an excellent job in a professional way, as I said yesterday. But I think we need more than that. This is the biggest single tax revenue. Funds, tax money comes into the City, and this is the biggest drain on that over the next 30 years. Maybe there will be miracles produced, maybe the Phillies will decide to have a team that we can be proud of in Philadelphia. I don't think many people can disagree with the consultant's statement about the fact that the Phillies ball team indisputely -- baseball team has had a terrible record for the last hundred years, and 304 11/30/00 - STADIUM HEARINGS not only in financial matters, but in the matters of minority employment. We don't want to get into that, but we'd like to see the Phillies be an up-to-date good baseball team. But we'd like them to assume their proper responsibilities. We would like from you-- could we have it -- could we get a kind of an agenda from you as to when the negotiations took place? And I'd like to know who negotiated for the City and in what form and who negotiated for the teams. I would like to know that and I would like to know who the original proposals were. You said you brought the teams over a good distance from where they were. This deal looks to me awfully good; I don't know where they were. Maybe they wanted the City to pay for everything. But I'd like to, know where did the negotiations begin, how did they transpire, and how did they end? And then I don't understand why you can't give us -- why can't we have a final lease? If you can't show us the final lease now, I think it's because -- not because it can't be done, but because there are provisions in that lease that 305 11/30/00 - STADIUM HEARINGS you do not want made public before there is a decision made by the City Council on that. The Pennsylvania SEC has various broadcasts on TV and radio, and it says, If somebody asks you to act blindly and quickly, that's the time to be suspicious. I'm suspicious. I want to know why it is not possible, with lawyers as experienced as those the City and the teams employ, why they can't bring to us in plenty of time, before our committee action comes up on December 7th, a fully completed lease agreement. And if you can't for, some reason that seems to you sufficient, you can't do it completely, bring us one with all the provisions that you can agree on finally and list those areas where there is disagreement and an explanation as to why you can't agree. I think that's your obligation. Now, we can you go back to the original questions I asked you.
I'm not sure I -- no 24 longer remember what they are, Councilman. I'm sorry, I apologize. 306 11/30/00 - STADIUM HEARINGS
Well, I want to know, why don't we have included a provision like the State provision, that if your optimistic view of revenues that are going to be developed --
It's not a part of this agreement, it's not a part of where ended up in the negotiations. That's why I'm --
We talked about a number of issues in the negotiations. I just don't want --
In certain ways, we did; in certain ways, we did. In other words, not exactly what the State talked about but in different kinds mechanisms going back and forth. But I will get you something about when we started negotiations and who participated and what the process was. 307 11/30/00 - STADIUM HEARINGS
On the car rental tax, to take you away from the major figures to get you back to minor, smaller items.
Studies seem to indicate that 80 percent of car rentals come as a result of people who have automobile accidents and who require a rental during the period of the lack of use of the original car. Some people have insurance policies that is cover it, some don't. It seems to me that with the provision in the law which says that the point of delivery, the tax is applicable only where the point of delivery is within the boundaries of the City of Philadelphia, it seems to me quite easy for a good group of lawyers to figure out how to make that car rental tax inactive. It may not be worthwhile for an individual user, you know, of those services to institute a lawsuit, but it's awfully easy in a class action suit to raise that and to find a way to make this tax ineffective. 308 11/30/00 - STADIUM HEARINGS Has the City given any thought to that?
Well, Councilman, I -- I would -- there's one number you said that just doesn't ring right with me. In fact, in the City of Philadelphia, it's something like over 80 percent of the revenues we get from the rental car tax are generated actually by the rental car operations at Philadelphia International Airport. That's really a function of the fact that the major generator of rental car tax revenues to us are people visiting the City -- tourists or business people come in and rent a car for, you know, their activities. We now have experience because, you know, you enacted this tax in the spring session. So the City began collecting it as of July 1. We're collecting it at the rate of approximately 400,000 a month. So we're beginning to create a track record here. We have the rental car employees under concession agreements at the airport. So that the vast majority of revenue that this tax is based on is, in fact, something 309 11/30/00 - STADIUM HEARINGS that the City has significant control of in terms of getting it via our controls at the airport.
I have many questions associated with the negotiations, and I would like to hold them till Mr. Hankowsky gives you the information with respect to who were the people who participated in the negotiations in the period. And, therefore, I would like to request that Mr. Hankowsky be available, even though he officially leaves the City after tomorrow.
No, no, I'm here through the 22nd, I'm here through this whole press.
That he be available for further questioning with respect to this.
Because it's late, and I would like to have that other information, 'cause I think it's important that the people of Philadelphia know about the negotiations, particularly in view of what may have been unfortunate or maybe not, I don't know, but I had 310 11/30/00 - STADIUM HEARINGS many questions about why is David L. Cohen both negotiating for the schools on behalf of the City in the school situation at the time that he's also counsel for the Phillies. People want to be sure that those who represent the City at all times are only interested in the City's interests, just as those representing the teams should have only been interested, according to all of the oaths we take as lawyers, in the interest of the teams they were representing. May we have that understanding, Madam President, that Mr. Hankowsky will be subject to recall?
The Chair at this time recognizes Councilman Kenney.
Thank you, Madam Chair. Mr. Hankowsky, just a couple of questions on the -- some of the financing issues. The $90 million contribution to the Eagles stadium operation and maintenance costs, will that cover all of the costs of O&M through the course of the deal, and is that $90 million on the City's part capped?
Yeah. One is, it does not cover all of the operation and maintenance costs. I mean, I think when the Eagles come up, you can ask them what their estimates are, but I think it's 75 percent of the O&M costs.
Yes, it is capped. In other words -- actually, what we make, Councilman, is a series of very specific payments that are discrete. It's not a formula, it's a number, it's an absolute number each of the years that are 25 involved. 312 11/30/00 - STADIUM HEARINGS
Okay. A large portion of the City's contribution is obviously derived from the car rental tax.
And we have specific projections over the years as to what that tax should bring in.
There's also, I understand, potential plans for expansion or reconfiguration of the airport --
Right. But, I mean, even in more extensive reconfiguration.
We have a runway problem, we don't have a lot of space down there.
And we need to acquire more. Is there any possibility that those 313 11/30/00 - STADIUM HEARINGS plans down the road could potentially cause the relocation of car rental operations outside of the City limits into Tinicum, into Essington and then, therefore, preclude our collection of tax because it's not in Philadelphia County?
I mean, I understand that the key to this is that these car rental companies stay within the City limits, and I'm not suggesting because we impose this tax that they're flying out of the City tomorrow.
I understand, but could a need at the airport for space create a more remote situation for the car rental companies or some of them that would affect the revenue stream that we project from the car rental tax?
Councilman, this is an issue that we knew that members of Council were concerned about going back to last year. And the way you phrased your question was -- I think you said "could," and certainly, there's no way of 314 11/30/00 - STADIUM HEARINGS foreclosing certain of the eventualities over a 30-year term. There was a letter --
I'm more concerned, and I'm sorry to interrupt you. I'm more concerned about probably the next ten years.
Okay. Well, within the next ten years, there's a letter that Charlie Isdell, who's the acting Director of Aviation, sent to the Council President that was dated -- while it might have been dated yesterday, I think it was delivered today. And the letter makes two points. One is that Mr. Isdell confirms on behalf of the, quote: We presently have six rental car companies on airport in Philadelphia County whose agreements extend until January 31, 2009. And those six companies, when you go look at the companies, they're the major companies that you would be familiar with. And they constitute in excess of 99 percent of the car rental business down there at the airport. Mr. Isdell also confirms to the Council President, quote: Let me confirm to you and the other members of City Council that as acting 315 11/30/00 - STADIUM HEARINGS Director of Aviation, I will take no action or enter into any contract or agreement which will have the effect of reducing the income stream to the City from this tax, close quote. So I think that it's an issue which the City as the -- through its Department of Aviation, can take significant steps to control in being aware of the issue and can plan in such a way that the eventuality could be avoided.
And I understand that the contingents -- for the most part, you feel comfortable that this won't happen, but I do understand the enormous pressure on the airport itself to not only expand but to reconfigure. I mean, one of the problems, I understand, is the way in which the runways are laid out now is that we can't get -- part of our backlog problem with flights taking off and landing is if we had, for example, a spoked-style runway system, we could do maybe five or six runways as opposed to what we have now.
And the airport, obviously, is a major economic engine for the City 316 11/30/00 - STADIUM HEARINGS and for the region. In the event that that pressure causes a reconfiguration of the airport layout over the next three, five, seven years, do we have some concern that we may be displacing some of these companies? 'Cause as you know, down there, you don't have to move too far to get out of the City. I mean, I think half of the -- most of airport's -- some of it or half of the airport's not even in the City now, technically.
Right. So because of the constricted size, if we have to relocate business like Hertz, like Avis, like Alamo, can we potentially put them in a position where we could be putting them out of the City?
I think that it could be addressed based upon where their desks are in the airport, where people take keys, and hang the fine point of delivery of the vehicle and how you structure your contractual agreements with the car rental companies.
Any shortfall in 317 11/30/00 - STADIUM HEARINGS that particular revenue stream that the City would eat out of the general fund?
Yeah. I mean -- by the way, I just want to point out, there's another situation -- and you're very right, Councilman. I mean, we actually have very good historic data on car rentals because, in fact, the airport gets a cut of it as a concession. So we actually have data. The data has shown years when there's been 8, 12 percent growth in those revenues. We didn't run our numbers that way; we ran them at 5 percent through 2005, and then 2.5, which is the five-year plan. So we think we're conservative here in these revenues, that this in fact would allow us to use more of this tax, less of our other taxes to pay down this debt.
Okay, let me turn for a moment to the issue of the demolition of the Vet. The time frame for the Vet demolition should begin when -- hopefully begin when? How 318 11/30/00 - STADIUM HEARINGS long will it take? What would be the proposed method for its demolition? And what contingent plans are there for neighborhood protection, disruption as a result of the debris, all of that kind of stuff. How do you see it playing out?
If the projects proceed on the schedules that they're proposing, you could have a situation where, I guess, it would be September or October of 2003, the Eagles have already moved into their new stadium, the Phillies have completed their last season at the Vet. So that you could be contemplating a demolition of the Vet -- this would assume the Phillies are comfortable that they're opening in April 2004, you know, '04, and, therefore, we can get rid of the -- you know, they're still on schedule themselves. Where you could be doing demolition as early as the fourth quarter '03 and, I guess, as late as second quarter '04, you know, just if you wanted to keep it there to make sure like, you know, they weren't going to miss a date or something on opening day or something like that. We -- there have been a series of conversations with community leaders, including 319 11/30/00 - STADIUM HEARINGS last evening, that have dealt with some of these questions. The City's going to have an engineer look at the question of whether -- what demolition technique makes sense. We understand that implosion might be of concern. Actually, we also should look and just decide whether implosion is simpler and faster instead of having a crane there for months, doing this (indicating). But we'll have an engineer look at that, not -- so there's no decision to implode it. We have also talked about some set of mechanisms that -- I'm not a lawyer -- on whether it's some kind of wraparound insurance policy for the neighbors or whatever, such that, you know, if it happens, then you look and there's cracks, that there's a way to say oh, you know, your -- compensation's available to deal with those kinds of issues.
At the meeting that Mr. Hankowsky refers to last night, the Mayor was very clear in his discussion with the community leaders that he would instruct the City attorneys to ensure that, both through insurance policies 320 11/30/00 - STADIUM HEARINGS and through appropriate indemnifications, that there was appropriate protection given to neighboring residents, both as a result of demolition of the existing facilities and also resulting from the construction of the new facilities.
'Cause I'm aware there are alleged complaints about fireworks. I'm sure Mr. Montgomery has heard about fireworks for quite some time, but this is a much bigger firework than just the 4th of July baseball game.
The issue -- you had said earlier in your testimony that the square footage of the proposed development that Comcast could or may envision office complex, retail, those types of things, would be about -- could you estimate square footage?
Well, what I was actually giving you is the current rights they have under their current agreement.
That's right, that's right. And those numbers -- if you give me a 321 11/30/00 - STADIUM HEARINGS split second, I actually have them somewhere. They currently have rights to -- actually, I was low. They have a right to a 300-room hotel, 200,000 square feet of office, and 375,000 square feet of retail entertainment.
In the event that, as the Council President indicated, a zoning overlay or some other type of zoning protection vis-a-vis the potentiality of switching the development site locations from its current development site to the North Lot, is there any estimation or analysis as to how many parking spaces could potentially be lost due to the development of such a large facility on the North Lot of -- or North Lot of Pattison Avenue, whichever --
In the current Vet complex, what would be the percentage loss of parking? Because it's going to be touted that we're increasing the parking by a 40 percent number.
Does that create a 322 11/30/00 - STADIUM HEARINGS decrease in parking? Obviously, it would, but how much?
Right. Councilman, as I hope I indicated earlier, you know, we don't have any definitive agreement that says we are moving these development parcels. I just wanted to be on record that it's something that people have thought about. The current development with Comcast SpectaCore, in fact, says that if they use these rights, they must replace the parking that the development eats up, you know. And probably the way you do it is with simple one-level decks, you know, that you often see you see, and you'll see it in some malls and offices. So that if you were eating up 300 spaces for a hotel, you create a one-level deck, pick up -- you know, cover 300 spaces, you have 600 spaces, and you're whole. So there's actually a requirement now to make up for any lost spaces so that we stay -- spaces stay the same number of spaces. And at least I would -- I would suggest we keep such a provision in.
Are you talking 323 11/30/00 - STADIUM HEARINGS about structured parking?
I'm talking more about kind of the one level -- I'm not talking about big garages.
For example, the current development right areas for Comcast SpectaCore.
And basically the southeast portion of the corner of Broad and Pattison; is that correct? Southeast of Broad and Pattison?
Southeast of Broad and -- it's actually both sides along Pattison, both sides of the Spectrum.
Yeah, it's parking now, and they could put -- their current development zone is either side of the Spectrum, the area between the two buildings -- 324 11/30/00 - STADIUM HEARINGS
And there's a parcel to the rear of First Union -- it's actually where they-- it's actually like where the trailers were for the RNC, back there.
It's all parking now, and the current development parcel agreement that gives them those development rights say that if you exercise them and displace parking, you must replace it, you know, in like number.
And that would imply in your mind, although we don't have --
I think it would be a good provision to have in a subsequent agreement, yes.
But you couldn't at 325 11/30/00 - STADIUM HEARINGS this point in time determine what kind of footprint that would -- that development would -- it would be too hard to understand whether the hotel is tall or spread out.
Oh, no, I think it would be looking at more tall. Hotels, Councilman, tend to want to have about a minimum of -- you'd like to have a minimum of 60 rooms a floor. It actually deals with maintenance and operation of hotels. So a five-story hotel at 60 rooms a floor. The office, you'd probably want a plate a size, you know, of, say, 25,000 a floor. So maybe if you had 100,000, it's a four- or five-story building, you know, it's kind of low-rise. The retail, we've actually looked at again a first floor, you know, maybe do like a hundred. So maybe it's two up.
Has there been any discussions as to the type of retail and/or entertainment venues that would be appropriate for Comcast interest, if in fact they were going to be -- I mean, is it restaurant, is it retail like a 326 11/30/00 - STADIUM HEARINGS mall?
No, it is not retail like a mall. People are very -- people really think this would be -- this is not a situation -- because of the number of events and the fact that at certain points, you know, if it was the Gap, well, there wouldn't be parking spaces. It's an Eagles game, so on a Sunday, you couldn't go there and go to the Gap. And in fact, that actually drives this because weekends, fall and winter, the sports complex is very busy. Weekends fall and winter are the number one -- I mean, they represent -- to 33 percent of a retailer's trade are those 18 weekends leading up to the holidays. So if you 19 can't get there -- so it's not traditional 20 retails. It's not Target, it's not K-Mart, it's 21 none of that. 22 People have thought, you know, is -- 23 ESPN Zone is an example. I mean, it's a sports 24 arena in it a restaurant facility. You know, 25 there's a terrific one in Boston. There are some 327 11/30/00 - STADIUM HEARINGS products like -- I think it's called Bass Brothers where you actually can go in and test fishing gear do -- you know, so it's kind of got a sports team, it's retail. You would assume the people going to a sport complex would, you know, have those kinds of interests. And, therefore, even before an event, they might want to go in there and --
Is it safe to say it would be primarily entertainment, I mean, with a retail component?
You know, maybe there's a Modell, you know, with jerseys and -- you know, because you're in the complex and you could buy -- you want to buy jerseys.
But the key to this kind of development is keeping people after the game and attracting them early before the game.
Yeah, I mean, that's really as much the market because you really can't be thinking of this thing as a stand-alone, because for a whole bunch of time, you can't get 328 11/30/00 - STADIUM HEARINGS to it, you know, 'cause events are going on.
What is the reason why Comcast would want to flip those rights from its current opportunities to develop now with the two new facilities creating that critical mass that they need? Why would they need to move it from the H Lot and from parking lot that they have the ability to do so now?
I think the simple question is whether there's a better configuration. Given you now the new configuration for the sports complex, you don't have the Vet at the Broad and Pattison corner, you now have baseball, you know, at Tenth and Pattison, you have football at 11th and Pattison. And whether a better configuration would work -- and it needs to work for the complex, it's not just so that the traffic flow works and all of that. And I don't want to sit here today and tell you that we've thought through all through that and, therefore, I'm exactly saying, Oh, it's going right there, because no one has made that --
Is this potential retail entertainment development and the potential 329 11/30/00 - STADIUM HEARINGS flip of development rights in any way potentially part of the way to plug the hole that currently exists in the financing bill?
I'd rather -- I'd rather defer any questions with regard to specific negotiations on additional contributions, just out of respect for the discussions we're having.
But we understand that we have no capacity to make a commitment like that without Council's consent.
See, I think it is because I think it's in the SpectaCore agreement that we can't move where their development rights are.
There's also an agreement, a SpectaCore agreement that says you can't have three concurrent events that go beyond --
Yeah, but this provision is different, Councilman. I mean, I respect the --
Part of the problem in dealing with the community has been -- it's been my experience that --
I can show you in the development lease, it is explicit that if you move the development parcels, you need City Council consent.
I mean, part of the problem in dealing with the community issues and part of the, I guess, the suspicion and bad experience that the neighbors have had there, 'cause I was involved in this issue back in '96 before I came here on this First Union Center is that it seems that whatever is agreed to really at some point in time, as time goes on, is unenforced. And that unless things are kind of specifically written down and then have a mechanism, a penalty mechanism for not adhering to those provisions, it really is kind of a toothless 331 11/30/00 - STADIUM HEARINGS tiger.
Okay. Can you -- but what? Do you have something else to add. You started to say "but."
Okay, I'm sorry. Can you talk about the estimated purchase prices just in a ballpark of the four or five parcels that we're talking about acquiring?
So, I mean, I guess it's -- is it divided evenly, is one worth more than the other or -- all right, I won't --
Councilman, I really do appreciate that that is something that at some point, Council, absolutely has to understand. 332 11/30/00 - STADIUM HEARINGS
Well, we're being asked to authorize the acquisition of them --
-- without really knowing whether it's minus T-Warehouse, whether it's 45 or 54 or 60 maybe, or maybe because a Board of View decisions or lawsuits becomes 70. It's a pretty wide --
Right. I understand that, but I think -- I mean, I actually probably -- I think I'm probably under the advice counsel that given what you have in front of you are protective condemnation ordinances and given that if we can't reach amicable agreement, we will get -- we have appraisal work, we will file Board of View at a certain number. We may -- from a budget perspective, we may be looking at this, you know, a little differently, but we don't want to set our price if we're in an adversarial situation inadvertently with one of these parties. 333 11/30/00 - STADIUM HEARINGS
I mean, wasn't the selection of the site prior to the institution of the negotiations somewhat a strategic error in getting the best value for that land? I mean, it would seem to me that once the owner of that property knows that the City is salivating over those sites for a development of a baseball facility, that the price in their mind is certainly going to be more than it was if it were -- if you had approached them to buy it under different circumstances. I mean, in some ways, when you announced the site, did you not inflate the price?
Well, I think we face that problem every time we take a significant public action. I mean, we -- you know, we condemn four blocks of Center City behind the Reading Terminal to do the Convention Center, we condemned several blocks for the Gallery Tunnel. I mean, it's an unfortunate consequence of the public sector's action, which is, we have to sit here in the public and tell people we're coming, you know, blow the horn, toot the whistle, and sound an 334 11/30/00 - STADIUM HEARINGS alarm. You know, occasionally, we've been capable, you know, once we were --
At the Reading Head House, we were -- we have occasionally been creative enough to do something, but in this situation, given this undertaking, I understand your comment, but we kind of are where we are.
You may have answered this question and I may not have been in the room when you answered it, but can you either dispel or confirm the information that we have that the City had the opportunity to purchase, or was asked about the purchase of the Acme warehouse when Albertson's officially initially decided to move and consolidate their operation in Lancaster during the last administration?
And then, allegedly, during this administration, once there was an offer for the building, that the Albertson people came back again and said, you know, we have 335 11/30/00 - STADIUM HEARINGS an offer, we wanted you to buy it for, do you have any interest yet, or still, or at all? And was told no. And then the option was consummated with the potential new owner. Do you have any knowledge of those calls, contacts, and why we wouldn't purchase a facility that, for example, is 300,000 square feet of refrigerated warehouse space that's one of the requirements -- one of the problems that we had with our port operations during our fruit season when we have this overflow, we need refrigerated warehouse and we can't find it anywhere doing dockside, that it's close enough to dockside to maybe be of some help? Is there any truth to the scenario and is there any reason why we didn't buy it?
Right. I actually did respond to somewhat analogous questions that were raised by Councilman Rizzo, but I'm happy to --
No, no, that's okay. I'm happy to cover this ground again. When Acme positioned itself to vacate the building, which was, I believe, February of 336 11/30/00 - STADIUM HEARINGS this calendar year, in part, because PIDC, you know, is sort of the active steward of the food center, I mean, we sort of pay attention to that stuff, we would have paid attention to it, stadium or no stadium. I mean, we know a building's empty and what's happening.