Committee Hearing, October 7, 2003

COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT - - - - Room 696, City Hall Philadelphia, Pennsylvania Tuesday, October 7, 2003 11:18 a.m. - - - - BILL 030561 - An Ordinance amending Chapter 19-2600 of The Philadelphia Code, entitled "Business Privilege Taxes," by making permanent and expanding the pilot program under which a credit against business privilege taxes is given to certain businesses that contribute monies to community development corporations undertaking economic development activities within the City of Philadelphia; all under certain terms and conditions. PRESENT: COUNCILMAN MICHAEL NUTTER, Chair COUNCILMAN FRANK DICICCO, Vice Chair COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DARRELL CLARKE COUNCILMAN W. WILSON GOODE COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN TASCO - - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 I N D E X BILL 030561 PAGE RICK SAUER, PACDC ........................... CARLOS PERAZA, LISC ......................... 9 JOHN MACDONALD, Impact Services .............. 14 TRACY HUNT, Coca-Cola ....................... 20 SHAHIED DAWAN, Universal Companies .......... 22 GINA SNYDER, East Falls CDC ................. 24 SHELLI PENNICK-HOWARD, Project H.O.M.E. ..... 28 FARAH JIMINEZ, Mt. Airy USA ................. 33 SCOTT KRISANDA, Kensington South CDC ........ 43 DAN JENNINGS, Partnership CDC ............... 49 JOHN UNGAR, Ogontz Ave. Revitalization Corp.. 53 MAJEEDAH RASHID, Nicetown CDC ............... 60 CHRISTOPHER PATUSKY, Fairmount CDC .......... 69 D.K. JOHNSTON, United Communities CDC ....... 74 DONNA HENRY, Southwest CDC .................. 77 3 10/07/03 - COMMERCE - BILL 030561

Good morning, ladies and gentlemen. This is a committee hearing on the Committee on Commerce and Economic Development, Bill 5 No. 030561. I'm Councilman Nutter, Chair of the Committee. There is a quorum of members present: To my left, Councilwoman Blondell Reynolds Brown, Councilman Goode, Councilwoman Blackwell, Councilwoman Miller, Councilwoman Tasco and Councilman Rizzo. We have a series of panels which I will call you up in the order on the list that I was given. Let me read the title and we'll be ready to go. This is Bill No. 030561, amending Chapter 19-2600 of The Philadelphia Code, entitled "Business Privilege Taxes," by making permanent and expanding the pilot program under which a credit against business privilege taxes is given to certain businesses that contribute monies to community development corporations undertaking economic development activities within the City of Philadelphia; all under certain terms and conditions. The first panel is Mr. Rick Sauer and 4 10/07/03 - COMMERCE - BILL 030561 Carlos Peraza. Please identify yourselves for the record and begin your testimony.

Thank you, Chairman Nutter and Members of the Committee and City Council. Thanks for the opportunity to testify today. My name is Rick Sauer and I'm the Executive Director of the Philadelphia Association of Community Development Corporations. I'm here today to express our strong support for Bill No. 030561 sponsored by Councilman Goode and Councilwoman Blackwell and Reynolds Brown. I do have copies of my testimony here to share with Committee, and we did circulate an advanced copy of the report we recently released. If anyone doesn't have that report, we have additional copies of that as well. In the fall of 2001, City Council unanimously passed legislation to create an innovative, new pilot program encouraging partnerships between community development corporations, businesses in the City of Philadelphia. And the program is designed to both strengthen the tax base of the City as well as spur economic growth in our neighborhoods. In return for supporting economic development through CDCs in 5 10/07/03 - COMMERCE - BILL 030561 Philadelphia neighborhoods, businesses receive credit against their business privilege tax from the City. And in last fall, due to the overwhelming demand for the program from both CDCs and businesses, Council agreed to expand the program to five additional different neighborhoods. Currently, there are partnerships 9 between CDCs and business engaged in economic 10 development through this vehicle in return for 11 contributing $100,000 a year to support a CDC's 12 economic development activities. As mentioned, the 13 business receives credit against its City tax 14 obligation each year. 15 The net effect of this, though, will be a stream of more than $15 million in new private investment flowing to support Philadelphia's neighborhoods and their economies. A very important issue that we've been working to address here in Philadelphia. As I mentioned in my introduction, we just recently completed a report highlighting what's been accomplished during the first year of this program. And what we found is that even though the program is only just up and running a little bit 6 10/07/03 - COMMERCE - BILL 030561 less than a year, there's already some impressive results. CDCs have been using their tax credit funds to strengthen commercial corridors, to develop commercial real estate, to help new businesses get started, assist existing businesses, to market their neighborhoods and help residents obtain jobs. Hundreds of businesses have been assisted already, and over $3 million in additional funds have been leveraged from other sources as a result of the tax credit commitment. Many CDCs are here to testify about their economic work, so I'm not going to try to capture that myself in my testimony; I'll leave that up to them. But I would like to use the remainder of my time just to emphasize a few quick observations about the importance of this program overall. The CDC Tax Credit Program provides an ongoing stream of revenue that CDCs can count on to plan and carry out neighborhood economic development. And the flexible nature of these funds also enable CDCs to use that funding to leverage resources for a wide range of projects and programs as well as to support their staff to coordinate 7 10/07/03 - COMMERCE - BILL 030561 economic development activities in their neighborhoods. Both the long-term nature of this funding as well as the flexibility that it provides is critical to enabling CDCs to facilitate strong neighborhood economies. In addition to the fact that the program has encouraged many businesses to develop partnerships with CDCs for the first time, one of the most encouraging findings from our report is that the strength of the partnerships being farmed between the businesses and CDCs is very impressive. It's not just a financial commitment that these businesses are making; they're getting involved in their partner's work through a number of other ways.

For example, one CDC has received help in leasing its newly completed commercial building. Another partnership assisted with creating a wireless computer network in its neighborhood. In fact, of the 12 businesses that we were able to survey that are participating in the program right now, 10 are involved with their partners in other ways beyond that financial commitment. The neighborhoods participating in the program are already reaping its benefits. And in 8 10/07/03 - COMMERCE - BILL 030561 May 2003, PACDC recommended expanded the CDC Tax Credit Program as part of our invest in neighborhoods policy agenda, which I believe City Councilmembers hopefully remember, since 6 Councilmembers actually endorsed those 7 recommendations. There are a number of CDCs and 8 businesses interested in participating in this 9 program. The map on both the back of the report as 10 well as reproduced up here at the front of the room 11 shows the location of both the CDCs currently 12 participating in the red dots, as well as additional 13 groups that could participate in the program if it 14 were expanded in the green circles. 15 The bill before you today would do just that - span the CDC Tax Credit Program to 25 partnerships and make it permanent. CDCs have a long-term commitment to their neighborhoods. The CDC Tax Credit Program provides long-term, flexible funding to support that commitment. This program is already having a strong impact on the City. We think this program deserves to be expanded and made a permanent part of Philadelphia's economic development strategy. So we encourage the Committee on Commerce and Economic Development to favorably 9 10/07/03 - COMMERCE - BILL 030561 report this bill from Committee today. Thank you.

Thank you. Mr. Peraza, before you start, let me note for the record that Councilman DiCicco, the Vice Chair of the Committee, is here and also Councilman Clarke is with us. I think we have the entire full complement. If we get another member or so, we may have a Council Session right here this afternoon and just get the week started early. This is at least one matter that a lot of us are pretty interested in. Please go on with your testimony.

Good morning, everyone. Really glad to see all of you here today. My name is Carlos Peraza, and I am the Senior Program Director of the Local Initiative Support Corporation in Philadelphia. I'm here today also to express my full support for the proposed expansion of the tax credit bill; that's Bill 030561. As many of you know, LISC is the largest national community development funder or provider of technical support to CDCs. We work in some 40 cities around the country, and our program support the development of housing and economic development 10 10/07/03 - COMMERCE - BILL 030561 initiatives in invested neighborhoods. Today we have helped finance 110,000 homes and million 4 square feet of commercial space. And many of the 5 local offices have comprehensive community economic 6 development programs that support CDCs and help 7 stabilize neighborhoods. 8 In Philadelphia about a year ago LISC 9 began the Philadelphia Commercial Corridor 10 Redevelopment Program. The program is a partnership 11 between LISC and CDCs to help revitalize eight 12 commercial corridors around the City. LISC plans to 13 invest a total of $4 million, including 1 1/2 14 million dollars in grants in the next three years or so in the commercial corridors. We provide grants for commercial corridor managers, marketing strategies, cleaning programs, and to improve building facades. We also target loans and investments to redevelop commercial properties and provide training and technical support to CDCs. In the proposed tax credit expansion and the tax credit as it is, is a critical component of the work that CDCs are doing in community economic development and it certainly helps leverage the 11 10/07/03 - COMMERCE - BILL 030561 investment that LISC can put into commercial development and community economic development. I think it also puts Philadelphia in the forefront naturally of supporting community economic development initiatives. I know Councilman Goode, Jr., is going to speak tomorrow at a national conference that we're hosting and hope will be speaking about this tax credit program. We're going to have 500 people here tomorrow from around the country that are going to be looking at strategies on how to expand commercial strategies in neighborhoods and community development strategies. So I think you should be commended for this program, and I hope that you will expand the program and support additional CDCs in their work on community economic development. Thank you very much.

Thank you. Any questions? (No response.)

I just have a couple. I'm trying to refresh my recollection. Two years ago wasn't that long ago. 12 10/07/03 - COMMERCE - BILL 030561 Now when this started, we started with the -- 10 and then we went with 15, okay. 4 And you may have touched on some of this 5 in your testimony. This is for Mr. Sauer. Can you 6 tell us a little bit based on your experience what 7 some of the initiatives or programs that many of the 8 CDCs have been able to do as a result of -- if you 9 have any specifics -- as a result of the program? 10

Sure. It's varied by group. 11 I think it is important. And that relates back to 12 the flexible nature of the funding. So what I think 13 CDCs have done is they've looked at what their 14 neighborhoods need, and the program provides the 15 flexibility for them to respond to the particular needs in their neighborhood. So some CDCs had been working to rehab commercial space in their neighborhood so they can attract new businesses in and they can have a larger impact on the physical look of the neighborhood. Related to that, as Carlos mentioned during in his testimony, a number of groups are working to strengthen the commercial corridor overall, and there's a number of different activities they're doing to pursue that. Beyond commercial real estate 13 10/07/03 - COMMERCE - BILL 030561 development, some folks are hiring safety ambassadors, cleaning up the streets. They're marketing the neighborhood, doing festivals, things along that line. So it's both sort of the hard things of building new buildings as well as some of the more softer things of improving -- strengthen the commercial corridor to make it a more attractive place both to shop and for businesses to locate to. And then some groups are also involved in making sure that neighborhood residents are actually getting trained and placed in new jobs that are being created or are available. And certainly, the CDCs that will be testifying today can speak more in depth to the specifics of what they've done.

Thank you. And I did get the report which I will read through. It does have a good amount of information in it, but it's just helpful for the record to have your perspective on that. Any other questions? Councilwoman Miller.

Thank you. How are businesses recruited to participate in this 14 10/07/03 - COMMERCE - BILL 030561 program? Or is up to the CDC to go out and find a partner?

In most cases, it has been up to the CDC to go out and identify a business that has that level of tax liability and would have an interest to participate in the program. And clearly, the CDCs in the program so far were able 9 to do that. A number of additional CDCs have either 10 in the process of lining up a partner if the program 11 were expanded already have a potential partner 12 identified. So there is a lot of interest in both 13 the CDC as well as the business community to 14 participate and expand their program. 15

Is there some type of recruitment packet?

There are regulations that were put together for the program. There is an application form. And then there is also a contribution agreement between the business and the City that can certainly be made available.

Okay. Thank you.

Any other questions? (No response.)

Thank you very much. 15 10/07/03 - COMMERCE - BILL 030561 The next panel will be Mr. John MacDonald, Ms. Tracy Hunt and Rahim Islam.

Good morning. I am John MacDonald. I am the President and CEO of Impact Services Corporation. Tracy Hunt is representing our partner, and Tracy is the Vice President for Human Resources for Philadelphia Coca-Cola Bottling Company and member of our Board of Directors. I do have copies of the testimony here. And again, trying to cite some key examples what we've been able to do as a result of having the opportunity to have a partner to provide some dollars to us that are flexible. I won't belabor the point. I'll kind of skip over this for you. When we made our application, we said that we would improve the employment prospects of unemployed and under-employed area residents by running community job fairs and offering free GED and ESL classes to community residents. This program support has helped us launch a community job placement program and serve 449 area residents who did not qualify for any of the other nine employment programs and training programs that Impact runs. We ran evening and weekend workshops that produced 16 10/07/03 - COMMERCE - BILL 030561 resumes and taught people how to find jobs, how to act in interviews and how to land jobs. We had our job developers match residents with job openings that they uncovered and we let residents ride our vans to go to interviews. Over 40 percent of the 449 people who attended the workshops did get jobs or better jobs. We also said that we would organize and off ESL and GED programs for interested community members. And we ran and run that twice a week, both in the afternoon and during the evenings. It's hard to get a picture of better many employment levels in the area. It was a substantial area of the accomplishment and achievement that we were proud of and given the job situation during the year. Impact's Loan Fund started operating in 2002 with some assistance from this funds and was able to make five loans to small businesses in the area. We also were able to work with PIDC, and we thank them for significant help in this endeavor. The picture that Randy is showing here is just of one of the businesses that we were working with. It's Lamboro Motors (ph). And they 17 10/07/03 - COMMERCE - BILL 030561 were able to expand their business activity with the establishment of a new garage to add to their business and increase their market share in the area. On the physical side of things, we were going to work to reduce blight, improve cleanliness, reduce commercial vacancy, retain current businesses, and attract new businesses to the area. We did this as well. We continued our work with both the America Street Erie Avenue Business Association and Kensington and Allegheny Business Association. We purchased as a result of these funds a cleaning machine. And twice a week the clean of cleaners go out and clean the streets that are defined by the Whitaker and Erie Business Task Force commonly known now as the WEB. The important part of this is that we had 50 companies actively support the program by allowing us to, in a nuts-and-bolts way, put the trash in their dumpsters without being required to go ahead and purchase that service or just leave bags sit for the City to come on the appointed trash day. We also were able to enlist the services 18 10/07/03 - COMMERCE - BILL 030561 and money from Senator Tartaglione who contributed $4,000 to buy trash receptacles for the area that we put at key locations. In addition, we had new 5 businesses join the association as a result of the 6 increased outreach and effort in the area that was 7 made possible through the availability of these 8 funds. 9 And Philadelphia Coca-Cola Bottling has 10 increased its level of involvement and leadership in 11 the outreach part of the business by hosting all of 12 our monthly WEB meetings at their location; again, 13 taking the burden of finding locations and then 14 taking care of the refreshments that we all know is 15 key to these meetings in getting people out.

16 Around the K & A business community, we were really excited when we had the new Walgreens come in at the corner of Kensington and Allegheny, and that created 30 new jobs. In our relationship with them, through the whole endeavor of getting them into the neighborhood, especially, as many of you know, there were some significant problems from a labor standpoint and trying to nurture them not to get discouraged because it had nothing to do with Walgreens; it had more to do with the people that 19 10/07/03 - COMMERCE - BILL 030561 own the property. So we're delighted to have them in the area. It is one of the best start-up stores that they've had. Very few locations exist for a Walgreens where every couple of minutes another El Train stops at the corner of K & A and people feed right into their parking lot. So they're delighted with their location. In addition, what we've done is the K and A Business Association twice a year has tried to increase marketing efforts to the community so that they would return to that commercial strip. And Lenny has pictures of two activities that we ran that drew 3700 people to the area of K and A. And one is a festival that we run in June that now, frankly, has over 3500 folks that are attending. And both moms, dads, folks in the neighborhood, kids, a lot of rides, a lot of activities, a lot of food and a flee market as well. And the merchants are really kind of latching on to this as a real key marketing effort for the strip. In addition, in the winter months right prior to Christmas, we have the other picture presented there. We have a photo shoot for the kids and their families with Santa Clause. And again, 20 10/07/03 - COMMERCE - BILL 030561 the help of the Commerce Department PCDC and 22 sponsoring businesses have made all that possible in addition to Philadelphia Coca-Cola Bottling. And then one other additional thing that we're looking at in working with is a planning effort in the neighborhood to work on some of the vacancies that exist, and we hope to acquire four of what will become 60 units through the NTI effort that will provide additional families that would do shopping on a commercial strip that are only located one block off of K and A. And finally, we've been working on bringing in a new business actually from Australia looking to locate and build a brand-new state-of-the-art warehouse facility. We're hoping to have that done in one of our KOZ sites in the neighborhood. And everybody is kind of excited about the prospects of bringing in 40 additional jobs there. With that, I'd like to turn it over to Tracy Hunt and give you a perspective from the corporate side.

Good morning. I'll be very brief. As we know, we place a major focus on 21 10/07/03 - COMMERCE - BILL 030561 economic development. And when we originally went into this partnership with Impact, of course, our senior staff was asked what our opinions were. And my first response was that if we're going to enter a partnership, we want to enter a partnership with one of the top notch CDCs in the area. And having had some experience in dealing with John MacDonald, we thought that it was the perfect match for us. I happen to sit on the Board of Impact and have been for almost a year now. And I have the opportunity to see firsthand the diversity of their initiatives. They touch the community in so many different ways. I see them touch the single moms. I see them touch the people who are unemployed to get them to a point of being employ. I see them partnering with us on the Web, the Whitaker Erie Business Association, that's part of the American Street Association. And they play a major role. They were ready to get out there and give us the resources we needed from them to make our initiatives happen as a result of us being on this particular Committee. And what that did was -- you know what the Coca-Cola name does, but then when you see us jumping out there and partnering with a CDC 22 10/07/03 - COMMERCE - BILL 030561 to make some things happen in the neighborhood, it kind of sparked a new interest from all of the local businesses. So I think what we see happening is a community of businesses making the determination that it's going to take them along with the CDCs to make things happen. So I think that if you were to expand the program, based on the relationship that they witness between Philly Coke and Impact, it would not be that much of a surprise as to what they believe the outcomes would be. So you would probably have additional corporations ready to jump at the opportunity to do such a thing. As I said, John has been phenomenal. The entire Board that Impact has has been impressive. So I think as long as you've got the CDCs that are worthy of carrying out the initiatives and you get some good business partners, I can't see why you wouldn't want to expand this program. Thank you.

Thank you. Joining us and taking the place of Mr. Islam is and Shahied Dawan who's the Chief Operating Officer for Universal Companies. 23 10/07/03 - COMMERCE - BILL 030561

Good morning. I'm pleased to be here in support of this program for Universal Companies, for our Chairman Mr. Kenneth Gamble and our Chief Executive Officer Rahim Islam. This program supports one of the very important aspects of our comprehensive approach to community development, and that is economic development. Besides the education initiative, our real estate initiative, our home buyers initiative, and all of the other initiatives that we are engaged in in South Philadelphia, this program is very, very important to us because it supports the small businesses which helps us create jobs. A couple of the things that we're engaged in now are with the Point Breeze network of businesses on Point Breeze Avenue and the South Street Business Association. We support these organizations in helping them to maintain their wherewithal to do business on the corridors, because they are the ones that are employing our people, the small businesses in the corridors. We have, through this program, increased our support of businesses. We've had 538 businesses to come into our small business development center, and that is an increase 24 10/07/03 - COMMERCE - BILL 030561 of 200 percent over last year. We have been able to increase our outreach for our micro loan program. We have also been able to leverage this funding with other financial institutions, including Commerce Bank, Wachovia, and First Trust. They have come in to help us to develop our loan pool for the CDFI. So in short, I'm just here to say that we support this program because of its importance in helping us to continue to develop our small businesses in the region. Thank you.

Thank you. Any questions? (No response.)

Thank you very much. We appreciate your testimony. The next panel is Gina Snyder, Carolyn Placke, Farah Jiminez, and Steve Culbertson. Please proceed. You can identify yourselves for the record.

Good morning, Councilman Nutter. I'm Gina Snyder from the East Falls Development Corporation. Thank you for the opportunity to testify today. The East Falls Development Corporation is a not-for-profit 25 10/07/03 - COMMERCE - BILL 030561 organization that's existed since 1995 and is really dedicated towards addressing the blight and deterioration and under-utilization of the commercial corridor in East Falls. And under the direction of our Board of Directors, in partnership with many City agencies and LISC and the business association, the Community Council, we have comprehensive plans for development in East Falls. I think in contrast to the some of the prior statements you've heard, East Falls comes to you as an extremely small CDC. Is it really through the Business Privilege Tax Credit Program that we have the capacity to have staff and an office and to move projects forward. While the development corporation was started in '95 and had a comprehensive master plan funded by DCED in 1998, it was not until last year that we had staff on board with capacity to move projects forward. We are very fortunate in East Falls to have a number of small businesses. And as folks probably are aware, small business owners, while they might be an entrepreneurial spirit for their business, they may not have the capacity to cut through the City's red tape and to understand where to go to move their 10/07/03 - COMMERCE - BILL 030561 business forward. We have helped four businesses expand their businesses by getting community approval for outdoor seating, cafe seating, which is a long process that involves a lot of community negotiation in our community. We have also helped a couple other business, again, small residents-owned businesses starting up and creating jobs in the community and helping them through the zoning process. Another issue that has been a serious concern has been criminal activity. Most of the businesses in the commercial district have been subject to crime, including a new business which was robbed in the first couple months of being open. We now have secured increased police patrol in the area and have been successfully working with the police. It's those kinds of things that eat away at small business owners and their willingness to take risk in the community. Business privilege tax credit has also helped us move forward in developing a parking lot that will be used for employees, businesses, and recreation users. And we hope those recreation 27 10/07/03 - COMMERCE - BILL 030561 users will come and use the businesses in East Falls. It's also helped us with up-front design costs in a program that we have through the DCNR and the Schuylkill River Greenway Association to have a new plan for East Falls called East Falls Reconnects. And so we are spending a lot of time working on making the infrastructure in East Falls appropriate for development. While a lot of investment is going on, it's also at a standstill because of real concern about the infrastructure, the traffic congestion, and the lack of amenities in the community, in the commercial district in particular. One benefit to our partnership with the Pep Boys has been really new-found investment in a relationship in the community. And I have a statement from the Director for Development, Glen Fink from the Pep Boys to provide to you today. I would draw to your attention that they now sit on our Board. They have provided us with real assistance, both design assistance, marketing assistance, public relations assistance, all because they have a very large professional staff. They 28 10/07/03 - COMMERCE - BILL 030561 also now advertize in the local newspaper, which they hadn't done previously. So there are a number of ways that the Pep Boys is connecting to the East Falls community. They are a national headquarters and they've been in the community for years, but we haven't had this kind of opportunity and this has created a wonderful opportunity for them.

That's all I have to say. I'll just give you my written comment from the Pep Boys. Thank you.

Thank you. Any questions? (No response.)

Good morning. My name is Shelli Pennick-Howard. E. I'm here in place of Carolyn Placke. E. and from our corporate sponsor. E. is a multi-service agency providing street outreach, supportive housing, comprehensive services, affordable housing, and community and economic development. I come before you today to offer testimony concerning the 29 10/07/03 - COMMERCE - BILL 030561 CDC Tax Credit Program. E. E. thanks Councilman W. , and cosponsors Councilpersons Blackwell and Reynolds Brown for making the strategic decision to develop a program that credits business taxes to local companies that contribute to community development corporations. Through the ongoing flexible funding of the CDC Tax Credit Program and the generous support of our corporate sponsor, Klehr, Harrison, Harvey, Branzburg & Ellers, LLP, we have seen a measurable increase in overall stability of our commercial corridor, Ridge Avenue. E. provides technical assistance to the Cecil B. Moore Ridge Avenue Business Association, which focuses on marketing, quality of life, and physical improvements along the corridor. These investments of money and time and talent has contributed to increasing the business occupancy rate from 69 percent in 2002 to approximately 72 percent in 2003. This increase in occupancy has helped to strengthen past investments and will help secure the long-term viability of Ridge Avenue and the surrounding 30 10/07/03 - COMMERCE - BILL 030561 neighborhoods for future generations. Additionally, Philadelphia Association of CDCs city-wide survey clearly demonstrates the far-reaching benefits of the CDC Tax Credit Program. Economic benefits ultimately link with housing and neighborhood services that will help preserve and rebuild neighborhoods which will result in a stronger Philadelphia. I'm now going to read the testimony from our corporate sponsor, Klehr, Harrison, Harvey, Branzburg & Ellers. E. in exchange for a credit on the firm's City business privilege tax. E. to boost economic development along the Ridge Avenue commercial corridor. The boundaries of the Ridge Avenue commercial corridor include Ridge Avenue from 21st to 30th Street and Cecil B. Moore Avenue from 21st to 24th Street, an area that has suffered from years of economic neglect. 31 10/07/03 - COMMERCE - BILL 030561 "Other than the obvious benefits of the tax credit and the opportunity to give back to the community, the firm sees numerous benefits from this project. "Economic development is good for the City, for us, and for our clients. The project is designed to create opportunities for private sector, and many of our clients are developers who will make productive use of these opportunities. E. was selected from the NTI/PHS Green City Strategy Program on Ridge Avenue. They developed a civic park and gateway along the core commercial node. They have designed and installed promotional banners along Ridge Avenue. They have provided technical assistance to the local business association. They've constructed affordable housing and rental housing. They've established adult and youth education and enrichment programs. They've established community-based healthcare services. And in the future our commitment will help to support streetscape and facade improvements along the commercial corridor, which we plan to begin later in the fall of this 32 10/07/03 - COMMERCE - BILL 030561 year. "Klehr Harrison believes that this is an incredible positive project which should be made permanent and expanded to participants. We are 6 very much in support of Councilman Goode's Bill No. 7 030561, cosponsored by Councilwomen Blackwell and 8 Reynolds Brown. " 11 And I thank you for this opportunity. 12

Thank you. 13 Questions? 14 Councilwoman Reynolds Brown. 15

Good morning, 16 ladies. I'm curious to know how old is the 17 relationship with each one of your partners? 18

Our relationship is one 19 year old, and it is based on this partnership. 20

When you say this 21 partnership, you mean? 22

The Business Privilege Tax 23 Credit Program. It was the beginning of our 24 relationship. 25

Is it fair to draw 33 10/07/03 - COMMERCE - BILL 030561 the conclusion that this bill sort of sparked the interest? You saw the value in it and the need to, therefore, bring on a partner?

Absolutely.

Well ours have been around -- our partner has been a donor for four years and then increased their funding level. They used to give us a thousand dollars a year. They increased it, obviously, as a direct result of this and continue to make the original commitment every year as well.

And ours has been involved approximately a year and has been definitely because of the Tax Credit Program.

So the tax credit has in every way served as a great incentive?

Yes.

Prior to this, what would have been the hurdle or hurdles for partnerships like this to develop?

My testimony speak to it, but I guess if I can give you a little preview, one of the realities is that a lot of businesses don't partner with the CDCs because there's no real 34 10/07/03 - COMMERCE - BILL 030561 incentive to do that. They may not be located or headquartered in the community. A lot of us are serving neighborhoods which means we don't have really large employers. So it's very difficult for them to have a significant impact on the mainstream unless they're incentavised in a different way. So often, when CDCs have partnered with larger funders through other kinds of tax credits, it's really been because they've been direct beneficiaries of our work, for example, lending institutions or insurers who have been hit with obligations because of past red lining activities. This has allowed us to expand our relationships to businesses who typically wouldn't have partnered. Our partner is Rittenhouse Claridge LLP. They have no investments in Mount Airy, they have no 18 reason to really invest in Mount Airy except for the fact that we have a personal relationship with them and this was an opportunity for them to grow that relationship and now start also providing us technical assistance.

My final question is around process and the identification of the partners. Did you do the outreach, or did they see 35 10/07/03 - COMMERCE - BILL 030561 the value and look to connect with a CDC? Where was the initial outreach, on whose side? I'm just curious.

Well, actually, the initial outreach was our side for the project, but they were more than willing to come aboard once they saw the benefit and what we were going to be able to do with their funding.

And the same for the others.

We reached out, but I have to tell you, we were rejected by at least four businesses before we got to our last one. And often it's because they are gun shy about partnering because they don't understand the industry. What this has allowed us to do is at least 15 organizations have showed that there's value for the private sector to partner with CDCs, that we have capacity to deliver on our promises and to improve the neighborhoods and, therefore, the economic vitality of the City as a whole.

Congratulations. Thank you for your testimony.

My name is Farah Jiminez. 36 10/07/03 - COMMERCE - BILL 030561 I'm the Executive Director of Mount Airy USA and I thank you for the opportunity to testify in support of the tax credit legislation and the expansion of it. This is really an exciting opportunity to do this publicly because we were one of the five CDCs that boo-hooed after the last drawing when we thought we weren't going to have an opportunity to be part of the Tax Credit Program. And as I drove through my tears from Harrisburg to Philadelphia to discover that information, one of the things that was really fortunate is that Councilman Goode was always thinking about ways to make it better for us to help expand resources for CDCs. So I want to thank you, Councilman Goode, for your early and continued commitment. Mount Airy USA's mission is to improve the quality of the life of the residents in Mount Airy through community development. Our theory of change has always been that if we improve the commercial corridor, that will improve the residential community that exists right off of Germantown Avenue. One of the realities is that when we think about neighborhoods and we think about neighborhood transformation, we do a lot of talk 37 10/07/03 - COMMERCE - BILL 030561 about housing. But when we start thinking about those neighborhoods in Philadelphia that have had the most impact and most change, we think about Manayunk and, therefore, Main Street. We Old City and, therefore, Second Street and Market Street. We think with Center City and then we think about Rittenhouse Square and the vitality on Walnut or Chestnut Street. Northern Liberties, we think about Second Street. So we think about the commercial corridor; that's what comes to mind. It's not necessarily the housing stock. So we really need to, as a City, be focused on ways that we can improve economic development in Philadelphia. The funding sources have been quite limited. In the early stages, we had Community Development Block Grant dollars which are dollars that cost you money to take advantage of because they come with unfunded mandates and primarily become a difficult source to utilize. And the alternative, there was through a creative invention, an Economic Stimulus Fund that was created under the Rendell Administration that continues now under the Street Administration, albeit at a reduced level. So we have about $5 million that are available. 38 10/07/03 - COMMERCE - BILL 030561 Those are wonderful delicious dollars because they don't come with restrictions and they often are administratively very easy to use and also to access. But it's only $5 million for an entire city so, as you can see, it's not very much in terms of resources. And usually, those dollars go to the project with the most cachet, which means more focus on Center City than in neighborhoods. But our neighborhoods need a resource. And CDCs have traditionally been neighborhood transformers. And being able to use these tax credit dollars have allowed us to not choose to use a hundred thousand dollars in our main streets but to leverage those dollars beyond that. Our project, the way we used our hundred thousand dollars -- which over 10 years is a million dollars so you can imagine how it starts multiplying in terms of leveraging -- is that we've decided to acquire a complex of buildings, four buildings that are historic. After four years in negotiation with a lender who knew he was going to start taking a bath on it, but we also saw the opportunity to take these buildings and transform them.

And we're doing a 15,000 square foot mix-use project which includes 39 10/07/03 - COMMERCE - BILL 030561 ground floor retail and apartments above, introducing a new product to Germantown Avenue, Mount Airy, where we have large, spacious apartments and bilevel with an elevator building, dedicated parking, fireplaces, washer and dryer, and start really transforming our neighborhood, transforming what it is to live on Germantown Avenue, energizing and exciting people about the potential. In the past, using City dollars we were able to have a 18,000 square foot commercial and retail development project and now houses Mount Airy's post office with a 20-year lease. It has Nationwide Insurance office, the Philadelphia Federal Credit Union, and it is a daily buzz at that location. And we're starting to see additional investment that is created as a result of that project. We've had three storefront sells within months of our building opening. One is going to be opening this weekend as a Mount Airy Violin and Bow Shop, with clients all over the country with a fabulous feature in the Philadelphia Inquirer. We have a Chinese restaurant that's opening up and a mosaic art studio and supply house. So we're starting to see that economic development can 40 10/07/03 - COMMERCE - BILL 030561 leverage additional private investment. And our work in the past five years has introduced $20 million of private investment to Mount Airy. So this Tax Credit Program, what it let's us do is it lets us leverage flexible funds on our Main Street, invest in economic development, which means greater vitality for our neighborhood. And what it also lets us do is increase our capacity. So in addition to using the dollars to put the down payment on the purchase of this 15,000 square feet of buildings, we also were able to hire a director of real estate development. So we really expect that in the next several years we're going to be seeing another $20 million investment over a much shorter time period. I really want to thank, again, Councilman Goode for his leadership and creativity in creating this vehicle. I also want to thank our partner, Rittenhouse Claridge, LLP, for deciding to take a leap of faith with us and partnering in helping us be able to take advantage of these dollars, but also in continuing their commitment to Mount Airy USA and our neighborhood through continued technical assistance. 41 10/07/03 - COMMERCE - BILL 030561

Councilman Clarke had a question.

Thank you, Mr. Chairman. Mr. Chairman, I just want to briefly commend and thank representatives from Project H.O.M.E., the wonderful work you've done in our community. And I want to thank you. And continue to do that wonderful work. The greening project Saturday before last was wonderful. It stimulated participation in the neighborhood, stimulated the participation particularly of the business association, so I want to congratulate you on that wonderful work that you're doing. Thank you, Mr. Chairman.

Any other questions?

I just have a question.

Councilman DiCicco.

Thank you, Mr. Chairman. Ms. Howard, I believe it is -- or maybe anyone else up there might be able to answer. I'm a little bit confused. In your testimony, Ms. Howard, you testified that the law firm of Klehr, Harris and Harvey contribute $100,000 annually or donating 42 10/07/03 - COMMERCE - BILL 030561 $100,000 annually to the Project H.O.M.E. And I'm not sure, maybe I had this wrong. In this program annual report it indicates $30,000. Is that the money that is leveraged against the hundred thousand? I'm just not clear on that. MS. PENNICK-HOWARD I believe it was an error.

So that $30,000 should actually be -- someone's shaking their head in the back.

The chart is indicating the amount leveraged in addition to the 100,000 given by the -- in our case it's $500,000.

I thought it was. I just wanted to double-check. Does Project H.O.M.E. or any of the entities who benefit by this program have any legal support? Or is there one law firm that oversees all of these different entities that are part of this Tax Credit Program?

No. We all work with different law firms.

We actually work with Regional Housing Legal Service. They provide 43 10/07/03 - COMMERCE - BILL 030561 legal support for our organization.

So for the most part, would I be correct in saying that no one is really paying any legal fees to any of these law firms that we know of? Because that would be kind of self-defeating if we're taking money from a law firm and then paying them back for legal services. Things like that do happen occasionally.

I would add that the Pep Boys has provided free legal services to the East Falls Development Corporation.

Okay. Thank you. No further questions. Thank you.

I'm sure that was a quite interesting exchange. I'm sorry I missed it. Any other questions? (No response.)

I'll read the record, though. Thank you very much. Sandy Salzman, Scott Krisanda, and Dan Jennings.

Good afternoon. My name is Scott Krisanda. I'm the Director of Kensington South CDC. Kensington South is not as widely known 44 10/07/03 - COMMERCE - BILL 030561 as maybe Old City Northern Liberties, but it is bounded, so that you know where it is, by Girard on the south, Berk Street to its north, Frankford Avenue to the east, and we serve all the way to about Sixth Street to our west. I'm here today to testify on behalf Kensington South Community Development Corporation and also for our corporate sponsor in the program Wolf, Block, Schor & Solis-Cohen, LLP. In anticipation of maybe a question, we used Regional Housing Legal Services as well. Kensington South CDC is pleased and very grateful for the opportunity to participate in the CDC Tax Credit Program and the testimony today in support of perpetuating the program that has had such a tremendous impact on our community. Historically, Kensington South has been an industrial neighborhood. In the past decades, our community has seen the decline in this industrial activity, especially in regard to the businesses that occupy the large buildings a century or more old. The vertical design and high cost of maintaining or rehabilitating these structures is no 25 longer desirable to new or expanding businesses in 45 10/07/03 - COMMERCE - BILL 030561 our area. Hidden costs relating to possible contamination of these sites from vague and sometimes undocumented prior use furthermore inhibit the entrepreneurial spirit of private businesses that can easily avoid all of these challenges by starting from scratch on a fresh and untainted site. As a part of our CDC's strategic plan for economic development and because Kensington South residential neighborhood has always been intertwined with industrial structures and uses, Kensington South CDC sought to advocate and actively participate, where possible, in the reclamation of this now under-utilized or abandoned industrial property so that these barren expanses and architectural gems were not lost to blight and further deterioration. Kensington South found its first opportunity to pilot this reclamation strategy in its Putnam Building Economic Development Project. The Putnam Building is a 100-year-old five-story mill style building occupied by a business that had downsized over time to the point where it could no longer prevent the elements and harsh conditions of an urban environment from 46 10/07/03 - COMMERCE - BILL 030561 overwhelming their ability to keep pace with the necessary maintenance required to do so. We know how it happens. It is evidenced to all when you look at the landscape of an industrial neighborhood like Kensington South. It starts with replacing the first broken window with a piece of plywood and then it diminishes from there. As I mentioned earlier, Kensington South CDC privately negotiated the purchase of such a building with its previous owner. The retainage of existing business in Kensington South is essential to our economic strategy as establishing new businesses. Therefore, Kensington South CDC was able to retain this existing business by assisting in its consolidation to one floor of this building. The Michael J. Woldow Company remains as one of our commercial tenants today and services operating tables for Philadelphia area hospitals. Our CDC offices were relocated here also, relieving the cramped conditions of the borrowed space out of which we facilitated our programs. Because of our efforts in the economic development of Kensington South, especially our work to transform the Putnam Building into a place of 47 10/07/03 - COMMERCE - BILL 030561 commerce and community resource, Kensington South CDC was eligible to participate in this Tax Credit Program. Since its introduction and implementation, our CDC has welcomed five additional commercial tenants to the Putnam Building Project. Six new jobs have been created as a result of this occupancy since the CDC first took possession of the building in December 2002.

Once the full potential of the building is realized, Kensington South CDC expects to have created a total of 35 new job opportunities and 10 to 15 new businesses and community resources. For the first time ever, Kensington South CDC has forum in which to meet with its local residents and stakeholders. On July 17th our CDC hosted an open house for the Putnam Building and kicked off a new era in community and corporate participation in the physical and economic development of our neighborhood. It is now a place for conducting the business of overall community development. Prior to the Tax Credit Program, our CDC's organizational operations relied exclusively on revenues generated by the seven homeownership rehabilitation projects developed since its start-up 48 10/07/03 - COMMERCE - BILL 030561 in May of 2001. For a little over a year, our CDC led a modest existence, streamlining every operation in order to stay the course and follow through with its strategic plan. Today, although efficient operations remain a must, the Tax Credit Program has not only leveraged the potential of our Putnam Building Project and created a model to replicate this effort, it has afforded our organization the tools and the resources for a sustainable effort towards community and economic development in Kensington South. Our hope is that this program has afforded its other participants the same tremendous and far-reaching opportunity for community revitalization as it has Kensington South. We hope that the cooperation that they receive from their corporate sponsors and the program does go beyond the financial contribution as it does with ours. New resources, more potential, and increased capacity to deliver the community services and economic stimulus needed for our neighborhood are what Kensington South has received from its partner in this powerful program. 49 10/07/03 - COMMERCE - BILL 030561 Because of the benefits the Tax Credit Program has had for our organization and our community as well as because of the benefits shown City-wide by PACDC's survey of this program, the Tax Credit Program should be made permanent and Bill No. 7 030561 should be passed. I thank you again for the opportunity to testify today in support of sustaining this program in which we are most grateful to be participating.

Thank you. Please identify yourself for the record.

My name is Dan Jennings. I'm the Director of Economic Development for the Partnership CDC, filling in for our Director Blaine Stoddard. First, we'd like to acknowledge and thank the Council Committee for holding this hearing on this very important initiative. We at the Partnership CDC believe this pilot program is very important for three reasons: One is it puts the investment directly where investment is needed most, and that's in the neighborhoods. And I think we all agree that in order for the City to grow, we have to continue to strengthen both the residential and 50 10/07/03 - COMMERCE - BILL 030561 economic base of our neighborhoods. And investing in CDCs through this legislation will help accomplish this goal. The second important reason is ever CDC here today can testify how difficult it's become to raise funds in this current environment. And not only does this program provide the needed dollars, but it also provides the kind of flexible funding that is very difficult to obtain. This is the partnership CDCs first year under the pilot program and the law firm of Reed Smith is our partner. And to address Councilman, we've had this relationship for eight years. In addition to the contribution that Reed Smith will provide, they give the Partnership CDC pro bono legal services every year. We're using the contribution from Reed Smith for three of the Partnership CDC's economic development initiatives. And these initiatives are borne out of the economic development strategy for West Philadelphia. The first initiative is the 60th Street Project. Under the leadership of Councilwoman Blackwell and with support with State Senator 51 10/07/03 - COMMERCE - BILL 030561 Anthony Williams and Councilman Mike Nutter, we're working with City and State agencies and the community to craft and implement a revitalization plan for the 60th Street corridor. The corridor is bordered by Arch Street to the north and Katherine Street to the south. Over the last several decades this corridor, like others, has suffered major disinvestment and blight, but we at the Partnership CDC believe that this corridor is poised for a major turnaround. The City and State is investing over a million dollars on infrastructure improvements. SEPTA is Spending hundreds of millions of dollars to upgrade the Frankford El. And the Commerce Department is funding a major facade initiative which will begin soon. The partnership CDC is beginning to identify projects to support the revitalization of this corridor, and the contribution that we will use from Reed Smith will support some of the pre-development work associated with these projects. The second initiative that the contribution will support is the Mercy Special Service District. The MSSD, like most special services districts around the City, provide 52 10/07/03 - COMMERCE - BILL 030561 supplemental cleaning, mainly sidewalk cleaning and graffiti removal. The MSSD cleans more than 300 blocks per week, including the commercial corridors of 52nd Street and 60th street. In the case of 52nd Street, the MSSD has had a huge impact. 52nd Street is now one of the most vibrant commercial corridors in the City. The third initiative the contribution will support are the Partnership CDCs activities around 40th and Market Streets. To date, we have renovated three mix-used buildings on the 4000 block of Market Street and it's made a big difference. We are pursuing a retail development for 4100 block of Market Street, and we're also working with property owners in the area to develop a retail strategy for the area that would address both the unmet needs of community residents and also the students at the local universities. The Partnership CDC is confident that this $100,000 contribution will leverage another $500,000 in investment.

In the case of the Mercy Special Services District, we know that the contribution has helped retain six jobs directly and scores of jobs more indirectly through the 53 10/07/03 - COMMERCE - BILL 030561 businesses that the MSSD benefits. Our activities on the 40th Street and the 60th Street projects, we believe will create more than 100 permanent full-time jobs. Again, we'd like to thank the City Council for their leadership on this important issue and we look forward to its expansion and we fully support its passage. Thank you.

Thank you very much. Councilwoman Blackwell.

Thank you very much. Obviously, we work daily with the Partnership CDC. This is your drawing?

No. 16

Certainly, we want to commend them for the work we have done and certainly for all we hope to do on Samson Street and other areas West Philadelphia. Thank you for your presentation.

Thank you very much, Councilwoman.

Any other questions? (No response.)

Thank you. 54 10/07/03 - COMMERCE - BILL 030561 John Ungar.

Thank you very much. I just want to point out at this point I think you're switching from the groups that are participating in the program to those of us who want to be in the program. So I desperately want to join that group. My name is John Ungar. I'm the Director of Housing and Economic Development with the Ogontz Avenue Revitalization Corporation. We've been around since 1983 serving the West Oak Lane community of Philadelphia, and that is located in the northwest part of the City. As I said, we were founded back in 1983. Our mission is to create and stimulate economic development and improve the quality of life in West Oak Lane. We do that through working in four areas, which is housing education, community and economic development and workforce development. We believe it requires all of these things to stimulate and revitalize a neighborhood. I just briefly want to talk a little bit about the neighborhood itself. It's a working and middle class African-American community that borders Montgomery County. It is not completely blighted. 55 10/07/03 - COMMERCE - BILL 030561 It has problems, individual problems. It's exactly the type of neighborhood where strategic investment can leverage additional dollars and really just turn it around. It's really a perfect opportunity for private dollars and a group to target a specific area and make a real difference. In our 20-year history, we've developed over 207,000 square feet of commercial institutional educational space. There are projects valued at over $24 million. Between work and our related entities and projects we've completed, we're providing full-time employment to approximately 240 people in the community and providing educational and social services to approximately 1,000 children per year. Some of the developments we've accomplished over the past years include the 18 rehabilitation of an abandoned shopping center. 19 When we first started in the early '80s, the main 20 shopping center Ogontz Plaza was just a shell of its former self with no services. It was our first project. We brought it back up to a decent standard, filled it, and we're now in the middle of actually a second renovation of this same plaza. It is good shape. We're giving it a facelift, 56 10/07/03 - COMMERCE - BILL 030561 attracting some new tenants and trying improve the quality of services available to tenants and residents in the neighborhood. One of our other projects was a multi-purpose community center with social service and day care. Also currently has a School District of Philadelphia Day Care Program, one of the best in the area with a long waiting list. We've helped establish two charter schools, one of which we actually are affiliated with. The West Oak Lane Charter School, and we have developed space and helped sort of develop the curriculum for the Hope Technology and Training Center, which serves high school age students. We've developed a restaurant on the avenue, 46 units of affordable rental housing and we're one of the eight CDCs funded by LISC for their Main Street Program. That has been a tremendous boon to the neighborhood. We have a full-time business district manager now who is out there every day working with the businesses, attracting new businesses. We've done some landscaping. Not related to us, but we've also been fortunate to have Ogontz Avenue repaved which was desperately need. But that in conjunction with our 57 10/07/03 - COMMERCE - BILL 030561 effort is helping to revitalize the corridor. It's turned into a very vibrant corridor. It will be one of the neighborhoods featured in the LISC conference this week. We've had articles written about the corridor in the City Paper and the Philadelphia Tribune. We work on having events such as jazz concerts, poetry nights, farmers market, a lot of excitement and basically making this the kind of place people want to come to shop to open their businesses. And Ms.

Jiminez had mentioned if you have a vibrant commercial corridor, obviously it's going to make it more attractive for people to live nearby. We're really trying to address all these things at once because we believe it's very important. Finally, in the last couple years, we've also focused on housing. We have some spot vacancies in the neighborhood and some homes that have been in bad shape. So through our housing efforts, we've been able to rehabilitate about seven houses so far. Obviously we'll be working on a lot more and provide needed home improvements and repairs to about 36 owner-occupied homes. By helping to provide support for 58 10/07/03 - COMMERCE - BILL 030561 organizations such as OARC and other CDCs, I believe this is a good investment for the City. We're getting a good return on the investment. We create jobs, housing opportunities and retain and attract families to our community. Many of the projects we work on, we also ourselves try and leverage private dollars. I don't have numbers of how much we've leveraged in total, but some current examples, a few years ago we develop Amoco McDonald's on a former brown field site. Obviously, we put in our piece through grants and loans, but the combination of Amoco and McDonald's put in their own money to develop the site. We cleaned up another brown field in that same corner, and now a Rita's Water Ice franchise will be there and the operator is going to invest 400,000 of his own dollars into that project. Finally, we're also developing a full-service restaurant on the avenue with the owner/operator of the Chestnut Grill in Chestnut Hill. It's going to be called the Ogontz Grill, outdoor dining. Again, we're putting in some money, but this is someone who's coming from Chestnut Hill and felt that West Oak Lane is the kind of place he wants to be, he wants to put his money in it, he 59 10/07/03 - COMMERCE - BILL 030561 believes this is a neighborhood on the rise. And again, the last point, I'm just going to repeat what others have said. This kind of funding, this flexible funding to help support the operation of CDCs is the hardest kind to get. Obviously, we've been able to do it, but it's a struggle. If we're going to continue doing the work we do, it's very important we have this kind of general operating support. And by expanding the program and allowing groups like ourselves with a proven track record to get in, I believe there will be a real turnaround in many of these City neighborhoods. Thank you very much.

Thank you. Any questions? Councilwoman Tasco.

I don't have any questions. I just want to thank Mr. Ungar for coming in to testify. OARC has done an outstanding job in the West Oak Lane community in the last -- since 1983, just amazing work in revitalizing the corridor, and not only working to stabilize and revitalize the business corridor, but looking at housing opportunities and taking vacant buildings 60 10/07/03 - COMMERCE - BILL 030561 that sat for years and made homes for people. So we work very closely together, and I have to say that they are just a prize in the City. And when we had the National League of Cities here in 1997, they included the Ogontz area on their agenda for a mobile tour and we took two bus loads of councilmembers and mayors from around the country to show what community effort can result in that kind of redevelopment and revitalization. And so we're just real pleased to have a good relationship with them and certainly support their request to become part of this whole economic development Tax Credit Program. And I have to give kudos to my partner State Representative Dwight Evans for his leadership. Thank you.

Thank you Councilwoman. Any other questions? (No response.)

Thank you. The last panel that I have on the list -- and if there is someone who would like to testify after this particular group, if I do not call your name, please identify yourself. I have Ms. Rashid, 61 10/07/03 - COMMERCE - BILL 030561 Mr. Patusky, Mr. Johnston, and Ms. Henry. Is there anyone's name I did not call who wishes to testify on this particular bill? (No response.) Please identify yourself for the record and proceed.

Good afternoon. My name is Majeedah Rashid. I'm the Chief Operating Officer of the Nicetown CDC and also serve as the Executive Director of the Nicetown Neighborhood Advisory Committee, the NAC. I wish to take this opportunity to thank the Council for allowing me to testify today and bring some attention to the Nicetown community, its need and its promising potential. The Nicetown CDC is a member of the Philadelphia Association of CDCs, and we do agree in our belief that neighborhood economic development benefits the City of Philadelphia through this CDC Tax Credit Program and it's already, as people have testified previously, it's shown its success in supporting Philadelphia neighborhoods. And we also believe that this program expanded and made permanent. When asked to describe our experience in 62 10/07/03 - COMMERCE - BILL 030561 jobs created and businesses assisted, the Nicetown CDC has been engaged in assessing the business corridor that runs down Germantown Avenue through our service area, which is between Hunting Park and Germantown Avenue to Germantown and Windrim. We have been heavenly engaged in supporting the education of business owners in the stabilization of their business association. We have held community meetings that have focused on business with the assistance of PCDC and EMBEC. With the revitalization of our business corridor, we project that there will be more than 50 new opportunities for employment in the initial phases of our strategic planning, and this will be the catalyst to stimulate our economic base. The Nicetown CDC has been awarded a $25,000 planning and marketing grant from the Department of Commerce in order to develop a commercial revitalization plan for Nicetown. There is abundance of vacant lots and properties along our business corridor that have been an eyesore for decades, and we have submitted a list of them to the Redevelopment Authority for acquisition. Further, we have hired a consultant, 63 10/07/03 - COMMERCE - BILL 030561 Beverly Harper Portfolio Associates who is going to assist us with expediting our plan, and we also have identified a fully capable developer that shares in our vision. This summer we will provide a gap funding from the Commerce Department in order to produce our Give Back to the Community Festival and Concert, which drew hundreds to our historic Stenton Park and Recreation Center. The festival was also an opportunity for our neighborhood businesses and vendors to be a part of our efforts to mobilize and stimulate interest in our area businesses. Our chairman and CEO Zachariah Abdul Rakman (ph) has been a successful Nicetown business owner for almost 10 years with businesses that have employ more than 25 people. His primary business, Z & Z Distributors is the largest African-American owned snack and beverage distributorship in the area. It is with his guidance and diligence that we are directed towards a vision of economic self-sufficiency for Nicetown. The Nicetown CDC also has employed a project manager who is our liaison to the community, with the business community in particular. 64 10/07/03 - COMMERCE - BILL 030561 Various other projects have allowed us to hire neighborhood residents and others on an as-needed basis. The tax credit program would allow us to do this permanently, giving employees job security and, more importantly, the fringe benefits that they need such as medical insurance. It is our experience that economically stable and healthy employees are more effective employees as stakeholders in the community. And when asked to describe the work that we could do in our neighborhood if we were to participate in the program, we would reply that the Nicetown CDC would be allowed the capacity to more effectively address the more than 70 vacant properties that we have identified on several block-by-block street assessments of Nicetown.

With the support of our Councilwoman Donna Reed Miller, we have submitted these properties for acquisition under the NTI Program. Even though we have that number of blighted and abandoned properties, Nicetown still has a homeownership rate of 71 percent. We want to sustain and even enhance that rate, and the rehabilitation of these and other properties will help to do that. 65 10/07/03 - COMMERCE - BILL 030561 The Nicetown CDC was not able to participate in the targeted Basic System Repair Program, but we will be able to replicate the concepts of the program incorporating with the Basic System Repair Program to some degree. We are currently participating with the Philadelphia Neighborhood Housing Service and Model Blocks Program which gives homeowners up to a 70 percent subsidy to get repairs and renovations done on their homes. The Tax Credit Program will also allow us to support our area schools, boys and girls clubs, churches and other institutions and organizations. Since October 1, 2002, we have been fiduciary agent for the Nicetown Advisory Committee, which is social service arm. The NAC is contracted by the Office of Housing and Community Development to engage the residents of Nicetown as well as serve as a resource for housing counseling, food programs, energy assistance, PHA resident advocacy, and neighborhood conditions monitoring, among other things. The Tax Credit Program will allow us to enhance the services of the NAC, which is under the administration of a community-elected board. I also want to point out that the 66 10/07/03 - COMMERCE - BILL 030561 Nicetown CDC has a community outreach initiative that has identified more than block captains of which have been participating in Livable 5 Neighborhoods Program, which is a program that we 6 collaborate with in order to develop and train our 7 block leaders. It is our intent to assure that all 8 of our block leaders have been trained in this 9 methodology which engages residents and teaches them 10 how to more effectively utilize existing City 11 agencies for more positive outcomes. 12 We also want full utilization and 13 marketing of our brand-new portal system that we 14 received from PCDC which has the capability of video 15 conferencing with other CDCs, businesses, 16 universities, prisons, and boardrooms all over the 17 world. For example, our new principal at Gartz High 18 School, Dr. Delores Williams, has expressed an 19 interest in having her staff professional 20 development conferences be held there instead of a 21 much further away university where they usually go 22 for their video conferencing. 23 The Nicetown CDC also want to establish 24 a business support and technology center in a 25 facility that we're trying to rehabilitation at 4300 67 10/07/03 - COMMERCE - BILL 030561 Germantown Avenue we have just acquired from PHDC, and this will have a base featuring a computer lab that will be used for professional development and training for our staff, students, and area businesses and institutions. Our goal is to be the hub that will link all of these area institutions, including the Gratz High School Service Learning Center, Triumph Baptist Church, the Nicetown Business Association, Steele Elementary School and both of our Nicetown Boys and Girls Clubs. This network will also produce and expand our quarterly newsletter which will keep the residents accurately informed of current initiatives in Nicetown and how they can get involved in this transformation. As you've heard from previous testimony, the benefits and opportunities for leverage of additional funds is absolutely phenomenal. These positive outcomes of the program is proof that expansion of the program will benefit our neighborhoods tremendously as well as the entire City. Understanding of this program is essential.

And I did hear our Councilwoman Donna Reed Miller inquire earlier in the testimony about 68 10/07/03 - COMMERCE - BILL 030561 an application process or recruiting process for potential partners. Its has been our experience that corporations have little or no understanding of this Tax Credit Program and, therefore, do not express interest in a timely manner. An example of that is our current attempts to partner with a corporation that seems to think they maybe overextended in their tax credit liabilities, and we're currently waiting on an answer from them for that. We have a couple other interested parties and we're trying to educate them in that regard as well.

I'm sorry, could you say that again or could you explain that? They said they were overextended?

They think that they're already overextended in their tax credit, what they can actually do. They think they're already up to the limit.

Councilman Goode.

I'm assuming what she's saying is that they're already doing enough tax credit contributions that they don't have enough liability left to justify that participation.

All right. I 69 10/07/03 - COMMERCE - BILL 030561 understand.

Are there any other questions?

No. Thank you for your testimony.

You're welcome. Mr. Johnson or Mr. Patusky.

Thank you, Councilman. My name is Christopher Patusky. I'm the President of the Fairmount Community Development Corporation, which is a volunteer position at this point. I'm also the Deputy Director of the Fels Institute of Government at the University of Pennsylvania. That's my day job. I first want to tell you I think this program is so important and inspired and then tell you what Fairmount CDC is doing very briefly. First, I think this is a truly inspired program, and I want to congratulate and thank Councilman Goode for this initiative. It works on so many different levels in a way that other City programs are not able to that may attempt to but cannot. It, first of all, directs public monies toward problems that the City is not really designed 70 10/07/03 - COMMERCE - BILL 030561 to address or handle or even know about because they're localized. And it also brings corporations into the partnership, which they really need an incentive to do because their job is to make money for their owners. And this gives them a reason to come in. And once they're in, they become interested and the people work there become interested and they can expand their commitment in many ways. To combine those two things together in this way, I've never heard of anyone doing this before, so congratulations. First, I want to say I have three reasons why I think this is an important project. First, neighborhoods need the tools to help themselves. The City needs the help of the neighborhoods to solve their problems. Cities are very good and city government is good at solving city-wide problems, problems that are uniform across the City like trash and our police protection and our fire protection and our streets and our utilities all of these things the City is very good at doing and should do. However, when you get down to the smaller neighborhood level, each neighborhood has it's own idiosyncratic concerns. One 71 10/07/03 - COMMERCE - BILL 030561 neighborhood is worried about housing, one neighborhood is worried about commercial blight, another neighborhood wants a park fixed up or a community center. And the City representatives do a great job trying to identify some of them and solving them, but really there are dozens of them. And only the residents know what these problems are. Only we know day-to-day what can be done and how to go about getting sort of the resident consensus, the neighborhood consensus on what should be done and moving forward with it. What we need as CDCs is the capacity to organize and address these problems. So my first reason for supporting this program is it gives tools to the neighborhoods to solve the problems themselves. The second thing is, it has a long time frame. And dreams are not achieved in one day or one year; they're achieved many years of sustained effort by people who are deeply committed to their neighborhoods. And no one is as committed to a neighborhood as the people who live there. So this program allows people to achieve their dreams over time. It takes 10 years to rebuild a commercial strip. It takes years to build a community center 72 10/07/03 - COMMERCE - BILL 030561 and to get programs into the community center. You can't just take a shot at it and then leave. And this program addresses by sustaining over time. The third is the partnership strengthens neighborhoods. We need the corporations to be involved in our neighborhoods, as I have described before. They have expertise. They have money. They have volunteers. They have advice. They can move jobs into the neighborhood. So this encourages them to do that and gets them involved. So I salute this program. Now I want to talk briefly about Fairmount and the CDC. Fairmount CDC was founded two years ago. On the Board are the President of the Girard College, the head of Philadelphia LISC, myself, some business owners in the neighborhood, elderly. It's just a representative group.

In addition, we have created a 15-member neighborhood advisory panel planning Committee to give us more input to make sure that we represent the neighborhood and not a few individuals in the neighborhood. What we've done in the past two years is get our 501(c)(3) status, and then we raised money. 73 10/07/03 - COMMERCE - BILL 030561 We had a big fund-raiser at Girard College, which was successful, and we filed other grant applications. We have hired WRT which has just completed a major plan with about 50 recommendations of what we're going to do next, and we're ready to go. First off, we're deeply involved on Girard Avenue, on West Girard with the Girard Avenue Coalition. We were one of the key players in the effort to get a supermarket at 27th and Girard. I was one of the litigants in that case. Also, up on Girard, we're active in all of the Girard Avenue Coalition meetings to ensure the neighborhood is represented in what's happening there. And we're also raising money for that effort. It is also a big concentration of blight and abandonment between Poplar and Girard Avenue. And that is our primary focus. We don't believe that Girard Avenue will be able to revive unless that abandonment is taken care of. And a CDC is necessary to make that happen, and we are ideally situated to eliminate that blight. We have a plan to do that, and we're meeting with our councilman, Councilman Clarke, on that and we appreciate all of his assistance as well with this. 74 10/07/03 - COMMERCE - BILL 030561 In addition to the removal of the blight between Poplar and Girard, which we believe will kick off the development of West Girard Avenue, we're working on a parking study to improve parking because the Art Museum has overflowed. The Rodan is there and all of this is only going to increase this problem. Somebody has to solve it, and we have set ourselves up to solve that. So what we would do with the funding would be hire our first part-time staff, leverage that money and that staff to obtain additional funds to complete our removal of the blight between Poplar and Girard, fund our parking study to green our streets, improve our parks, provide a community center and do all of the things that the other CDCs have been doing such a great job on. Fairmount is a healthy neighborhood. And it can serve as a base for the growth of health in the City, and we're looking forward to working with you on that. Thank you.

Mr. Johnston.

Good afternoon. My name is D.K. Johnston. I'm Executive Director of United Communities Community Development Corporation in 75 10/07/03 - COMMERCE - BILL 030561 South Philadelphia. We were founded in 1996 as an outgrowth of United Community Southeast Philadelphia which operates four community centers, settlement house, social services agency. And up to this time, we have focused primarily on affordable housing. We do, however, have a major commercial strip in the target neighborhood that we're working on. That's South 7th Street. A portion of it is severely blighted, north of Snyder Avenue, the 1900 and 2000 blocks. And a portion of it, south of Snyder Avenue which would be the 2100, 2200 and 2300 blocks has been somewhat revitalizing on its own in the last 10 years or so. We have come to call it the Asian Market. The reinvestment is primarily southeast Asian businesses, Cambodian, Laotian, Vietnamese and Indonesian investors taking over buildings there and opening stores. There's still a level of disinvestment down there. There are vacant buildings in that strip. And simply put, I think this is a great program. I think the neighborhood commercial strips in the City have been long neglected. I commend Councilman Goode for having the idea to start this and Councilwoman Blackwell and Reynolds Brown for 76 10/07/03 - COMMERCE - BILL 030561 supporting the expansion of this very fine program. As an example of what had happened in the past without this program, in reorganizing some portions of our archives, I came upon these boxes in a corridor at the Houston Community Center where I work that were labeled "The Business Support Program." And I've been there only a year, and I asked some of my coworkers what was this about. Well, United Communities got a grant in the mid-1990s for one year from a foundation who typically the foundations like to fund something for one year as a pilot program. At the end of that one year, a certain level of enthusiasm and growth had taken place and it was not refunded. So the people who were working on business development in this neighborhood went somewhere else and took other jobs. If we were to be able to apply to the CDC Tax Credit Program, the types of activities that we would like to undertake would be a litter and cleaning program and a neighborhood safety program similar to what some of the other CDCs have talking about. We would certainly want to be able to rehab some of the vacant store fronts, initiate a facade 77 10/07/03 - COMMERCE - BILL 030561 improvement program, a business district identify program of banners or signage, some off-street parking development. I'm sorry Councilman DiCicco is not here to hear that because I know that's one of his interests in supporting the Asian market. And some activities simply to market the district that has already established itself there so that it can grow and prosper. Clearly there would be more jobs added to the neighborhood. We would expect that the crime and drugs and prostitution in the more blighted blocks might decrease on a natural basis because of the increased activity. And I think that we're currently undergoing an community organizing activity with the business district as part of an overall neighborhood planning effort. The Seventh Street Business Association that existed some years ago has been largely dormant, needs to be reactivated incorporating the Asian businesses that are there today, and this would be a stepping stone for our efforts with redevelopment and reinvestment in that district. And we would definitely apply to this program if it's expanded. Thank you. 78 10/07/03 - COMMERCE - BILL 030561

Any questions? (No response.)

We have one more person. Please identify yourself for the record.

Good morning. I'm Donna Henry, the Executive Director of the Southwest Community Development Corporation. I am here to support the request to expand the Tax Credit Program to make the permanent. The most difficult type of funding to raise is unrestricted funds that can be used for operations in specific projects. CDC tax credits would be unrestricted and capable of supporting a variety of economic development activities, as already mentioned this morning. Southwest CDC began economic development planning in 1998. We now have multiple documents outlining development strategies. Southwest CDC has created a subsidiary, Southwest Initiative for Transformation to help redevelop Southwest through site assembly of vacant and under-utilized industrial properties to attract developers, spur economic investment and create jobs. Swift is currently focusing on the 90-plus acres of developable land along the west shores of the 79 10/07/03 - COMMERCE - BILL 030561 Schuylkill River below Bartram's Garden. The Woodland Avenue Revitalization project will address the need for a variety of improvements along the three-mile stretch of Woodland Avenue, including the creation of a Special Services District in the 10-block core retail area. A task force has been created to develop Woodland Avenue between 45th and 52nd Streets. The Southwest Business Partnership was created in 2002 to bring together southwest businesses, primarily those Eastwick Industrial Park to discuss their needs. Since beginning, we have address short dumping, auto thefts, street lighting, drag racing, and the new post office facility. Other initiatives needing to be implemented and could use the additional resources the Tax Credit Program would bring is the Business and Employment Expansion Improvement Program. Southwest has more than 29,000 private sector full-time jobs, but only 12 percent of Southwest residents fill these positions. The goal is to expand the economy of Southwest by encouraging and supporting business development opportunities by establishing a Southwest Employment Resource Center and 80 10/07/03 - COMMERCE - BILL 030561 establishing procurement opportunities among Southwest businesses. Second initiative is ways in recycling business zoning. Approximately one-third of all the City's waste and recycling businesses are located in Southwest. We plan to review, update, and enforce zoning, encourage designation of waste and recycling business zones and establish screening and signage guidelines. The third initiative needing to be implemented is the auto-related businesses. Southwest Philadelphia has over 130 separate auto-related businesses, many of which make a negative impact on the residential communities. We plan to review and enforce zoning codes, establish screening and signage guidelines, and designate and develop auto-related business zones. We do have a corporate partner lined up, a local business that is interested in being a partner with Southwest CDC. We just need the program expanded to take advantage of that. Thank you.

Thank you. Any questions? 81 10/07/03 - COMMERCE - BILL 030561 (No response.)

Seeing none. Is there anyone else who wishes to testify on Bill 5 030561? (No response.)

Seeing none, we will move into our public meeting. And adjourn the public hearing. - - - - 82 COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC MEETING COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT - - - - Tuesday, October 7, 2003 - - - - Public meeting conducted by the Committee on Commerce and Economic Development, held in Room 696, City Hall, Philadelphia, Pennsylvania, on the above date, to consider action on the following: BILL 030561. PRESENT: COUNCILMAN MICHAEL NUTTER, Chair COUNCILMAN FRANK DICICCO, Vice Chair COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DARRELL CLARKE COUNCILMAN W. WILSON GOODE COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN TASCO 83 10/07/03 - COMMERCE - PUBLIC MEETING

The Chair recognizes Councilman Goode for a motion on Bill 030561.

Thank you, Mr. Chairman. I move that Bill 030561 be reported out of the Committee with a favorable recommendation, with a further recommendation that we have first reading of this bill at our next Council Session. (Duly seconded.)

All in favor indicate by saying aye. (Aye.)

Any opposed, say nay. (No response.)

The ayes have it. Bill 030561 will be reported out of this Committee with a favorable recommendation and a further recommendation for Rules of Council to be suspended so as to permit first reading at our next session. That completes the business of the Committee. Thank you very much. - - - - (Council adjourned at 12:55 p.m.) 84 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of October 7, 2003, were reported fully and accurately by me, and that this is a correct transcript of the same. RE: COMMITTEE OF COMMERCE AND ECONOMIC DEVELOPMENT _________________________ Lisa C. Bradley, RPR