Don't you trust the courts that are going to hear the dispute if the City believes -- or whoever is involved as a party -- believes that the asking price is too high? Don't they have a right to go before a board of judges?
Don't we have any confidence in the judge's decision as to what it's really worth and what these new investments in it meant, that it meant an effort to grab more money, if that's their decision?
We already have an example of one developer who purchased a vacant warehouse building -- and again, I guess I'm kind of going against what I 71 03/23/04 - RULES - BILL 040024 originally believed in -- that if you give a developer a tax incentive, they will come and they will develop, so the 10-year tax exemption in this case is working against us. He bought the building. He's converting it into condos because he gets the tax abatement on the improvements. But at the same token he knew -- he's a local developer from Philadelphia -- he knew that at some point -- he's hoping at least that the Convention Center expansion will take place and he's going to have a windfall on that property. And what we're asking is that we prevent that from occurring because the taxpayers, whether you like it or not, Councilman Cohen, will ultimately pay the price.
We're trying to keep them from being as shafted as they may if we don't do something soon.
I have great difficulty seeing any difference in this situation than in a developer scouting around 72 03/23/04 - RULES - BILL 040024 and reaching his own decision. He takes into account everything he knows, including likely government actions to acquire property. Does it mean that we're going to pass this kind of a law with respect to maybe the airport? Because there's talk that maybe the City will sell to the State or maybe the State will grab on its own. We don't know what form it will take. But isn't that just a fact of life that things happen? Sometimes the City is involved. Sometimes private properties are involved. I just have great difficulty in seeing any difference in this situation and the other one.
At great risk to myself, I'll venture into this. But I think the Councilman is also quite well aware that, again, from a zoning and planning standpoint the government in many instances does seek to restrict the type of uses, conversions, activities. 73 03/23/04 - RULES - BILL 040024 I mean, one of the things that I know drives the Planning Commission crazy, for instance, is the multiple zoning overlays that we have in a wide variety of places in the City. There are places in the City where you have a laundry list of prohibited uses in some places and not in others. The government is always seeking to contain or restrict certain activities in certain places. I can't really comment on what happened from '86 to the time that the present Center opened, and I know you were not thrilled about that particular location but, you know, one of the beauties of our jobs is that we function in a continually changing live environment and new ideas and new theories and new concepts come along all the time. This particular idea comes out of some of the concepts of good land use planning and zoning to seek to at least create a bit more of a balance from the complete free market environment. Look, if private property owners or a person who is kind of in that business can 74 03/23/04 - RULES - BILL 040024 anticipate something happening at a future point in time and guesses right, they're the beneficiary. Now, we've had the experience here, especially in downtown -- I don't want to get into any names -- where that kind of activity went on and it did have to some extent a blighting impact on various parts of the City. Operating with the best information available, we do have reason to think that a governmental entity will go into a particular area. And so, trying to strike the balance between the property owners and what they should rightfully get in the marketplace -- which ultimately will be decided by a judge -- but again looking at the most recent example, I don't think it's a stretch to say that it was a high motivator for a person in the face of a known project to make such improvements of an extraordinary nature which once you pull the building permit and once you start the activity, you've already to some extent started your argument on what the value is. But at least for me, if you have a tool available to you to stop someone from 75 03/23/04 - RULES - BILL 040024 causing the public to pay not $2 million for a piece of property -- and you know you're going in that direction -- but now upwards of to 5 $12 million for the same piece of property 6 because the person, I guess, was smart enough 7 to try to take advantage, that horse is out of 8 that barn. But if we know that it's going on 9 and still take no action whatsoever, there 10 will come a time of, I guess, kind of the reckoning and the final adding up of what the value was at a particular point in time and what it will be when all these people decide -- if they decide to sue or go into court. And I guess the difference between those two is what we're trying to narrow down. I think we do have some obligation, if there's something legally available to us, to take some action to protect the overall interest of the taxpayers. The property owners ultimately are still going to make out better than they would if nothing goes on in that particular section. The argument here is about how much more could they have gotten based on no action from this government, 76 03/23/04 - RULES - BILL 040024 believing under the best of circumstances that a positive situation will develop in that area going west to Broad Street. I think that's kind of basically the question here. If you know that it's happening, you see that it's happening, you have a recent example of it happening, You have reason to believe that it's going to continue to happen, the question is, what did you do once you knew what was going on?
We can do nothing and let the market do whatever it's going to do and ultimately somebody's going to complain legitimately that either this City Council or some other governmental entity, you knew this was going on, You had a tool available to you, You did nothing about it. It comes at a price. And all I'm saying is, what extent can we narrow that price down? It's not like any of these people are going to go without food. It's not like any of them are going to claim that somehow we caused a demise of their financial or real estate empire. They're going to go make out somewhere. I'm just trying to cut down on the 77 03/23/04 - RULES - BILL 040024 cost of it to the same people who are ultimately going to pay the tab. But I think it is outrageous.
It is outrageous for someone to knowingly go into an area west of the Convention Center in the path of our expansion, knowing that we're going there, to convert a building that's been sitting vacant for a long period of time, put 65 condo units in it that they're going to go out into the marketplace and sell and we're now going to pay upwards of $12 million for the real estate plus relocation costs. That is outrageous.
But that doesn't have to happen. The State and City can come together quickly. Why do you put the burden on the system of developers, which you generally support and the Council generally supports it? I happen to be the one who least supports it, but in this case I think it's very unfair to select out this situation and say we're not going to follow the principles 78 03/23/04 - RULES - BILL 040024 of capitalism. The State and the City government had means to do it. They could sit down tonight and resolve the problem by making it clear what it's going to be, whether there's going to be money for it from the State or not. You're saying let the State and City dawdle all they want and let them dawdle without having to pay a price.
No, Councilman, actually, I'm not. What we are saying, in fact, without being rather explicit about it is we're actually trying to get the parties to focus on this particular issue because it does set a particular timetable. As I said earlier, if we don't know what we're doing, both the City and the State, on this particular project somewhere in the course of the next two years, it probably won't happen. It's either now, soon or never.
It's a highly political question as well as an economic question. In the area of doubt I don't know what's going to happen.
Every major 79 03/23/04 - RULES - BILL 040024 government, Councilman, is a political question. It was a political question as to whether we were going to build two stadiums. It was a political question whether we were going to build this Center. It's a political question for anything else that we're going to do. That's the business that we're in. We're politicians. It's what we do. So we're making a calculated bet, not to get into the gaming situation.
Well, I think it's a disadvantage of developers in this case. We're altering the rules in this one situation.
We either think it's going to happen or we don't think it's going to happen. But I cannot sit around and knowingly let people rip off this government, whether it's the City taxpayers or the State taxpayers, because they're all the same taxpayers and it's all coming out of the same pocket. And not try to take some action that might cause somebody to say, "You know, they got that bill over there, Maybe I'm not going 80 03/23/04 - RULES - BILL 040024 to mess with that" --
So you've taken action. Now I'm saying it's not an automatic decision. Each of us has to make that decision. I don't know how you change the rules in mid-game. That's what you're doing.
Councilman, let me go back. If this bill were to pass and somebody owns a building in that square, they can still file an application for a zoning variance. They can get over to the Zoning Board. And the bill says the Board shall not grant a variance to change the use of the building unless it results in an unconstitutional taking of the building. That's their judgment. That's a legal standard that has to be met. And if the Zoning Board says that the only way that this person can function and operate their building is by getting that variance, then they're 81 03/23/04 - RULES - BILL 040024 going to get the variance and there's nothing we can do about it. So we have set a threshold and built in, I think, protections. If you go and get a permit and you're denied by L&I, the first thing you're going to do is go right back through the same process and you're going to appeal. And you'll be right back over at the Zoning Board or the Board of L&I Review. And if they determine that the only way that you can legally use your building is by granting that permit, because to not grant it to you is an unconstitutional taking, you're going to get it. Now, it would be a little difficult if this bill were in place, it would be a little difficult for a guy with an industrial building that's been vacant for a long period of time to go to the Zoning Board or go over the counter and say, the only way I can use my building is to convert to 65 luxury apartments or condominiums. Now, that's a little bit of a stretch of an argument. That's what we're talking about. So you're not taking 82 03/23/04 - RULES - BILL 040024 completely away anybody's property rights. There is a process still for you to go through. It just requires you to go through a higher standard, which is the same thing that's in our Zoning Code right now. You've got a laundry list of prohibited uses. You go over to the Zoning Board, they're going to deny your variance when you go across the counter. If you can make an argument that the only way you can use your property is to have lap dancing going on in that building because you're in violation of 14-1605 when you went in to apply and the only thing that you can have is a dance parlor in that place, then I think you're going to get it. It's a slightly high standard to meet, though.
That will be in another hearing. We have a single subject here. 83 03/23/04 - RULES - BILL 040024
I think the selective use of this technique -- and I think I would support the notion that this apply to all development, but to just pick out this one development and say, "We're going to change the rules for this development," I don't see. I think it's unfair to the developers.
Actually, the bill is structured such that it only -- first, it only applies to governmental entities, and it requires that entity to pass a resolution 13 or have authorization that they've taken a position to support a particular project. Now, notwithstanding your particular position on the issue, I think it is well known that there is a proposed expansion of the Pennsylvania Convention Center. There are 9 million documents that go with it. There have been people hired to do work on it. There's active lobbying work going on; Democrats, Republicans, Independents, black, white, in the City, out of the City, and any other configuration that you can imagine. So it's not just a thought. It's not somebody 84 03/23/04 - RULES - BILL 040024 just had an idea, "Oh, we'd like to go westward." There are things in place. And that's a requirement, that someone of authority has to show that there is commitment for it. The Board of the Pennsylvania Convention Center Authority last Wednesday at the board meeting in public voted unanimously to support this. The Board two meetings ago passed resolutions encouraging the General Assembly and the Governor to fund expansion and specifically asked for the money that Councilman DiCicco was talking about, which would allow us to actually start the condemnation process sooner as opposed to later so we can get the properties under control. I agree with you. If we had the money in hand, we wouldn't be here. We'd be issuing condemnation notices because some people may actually want to move and want to move earlier than later. We're trying to get a building built, hopefully, by the end of 2008. That's a very compressed time period 85 03/23/04 - RULES - BILL 040024 for the size of building that we're talking about. We need to get condemnation, relocation, demolition, asbestos and all that other stuff out of there as quickly as possible. We're trying to create an environment where both sides recognize there's a time period here for people to start taking action. Because we also want the folks in Harrisburg -- not that they're not paying attention to this -- but every time we take an action to help support it, I think it helps them move that ball down the road. It's the same presentation we gave the State Legislature three weeks ago.
You make a good argument. It happens not to convince me. It's a good argument, but it's not a convincing argument to me. I don't see why the State deserves or the City or the combination of the State and City deserves special treatment. I think we either make it available for everybody or we make it available to none.
I have a 86 03/23/04 - RULES - BILL 040024 one-word comment as to why the state and the City deserve special consideration. It's called the taxpayers.
Well, we don't show concern for taxpayers elsewhere. Why in this situation do we want to show special consideration? We didn't in the sports stadiums. This Council voted in the other direction. They knew everybody involved were millionaires. They said, let's help make them billionaires. That would be better for the country, I guess. But I don't see the difference.
But I commend you for your efforts on behalf of the stadiums.
I didn't have the idea before. I just came up with it. What do you want from me?
Thank you, Madam President. 87 03/23/04 - RULES - BILL 040024 I have a couple of quick questions. One, I just want it for the record, there were references made to overlays as a comparable in the discussion. I do not believe the overlays are comparable. Although we prohibit certain uses, it is more of a permanent nature with no 8 intent to ultimately take any of those properties, so I want clarify. Because I've used overlays a substantial amount.
So it's not the same as what you're attempting to do here?
No. I think what I was trying to explain, Councilman, is that the idea has elements or bits and pieces of various zoning concepts that were like the first items of discussion, about how to get to this point. We have provisions in the Code that prevent certain activities. We were trying to prevent certain activities. We have a planning tool called RC-6 for future development. So it's not any one thing.
I just want it for the record. 88 03/23/04 - RULES - BILL 040024
If we introduce an overlay, I don't want somebody to get nervous and think ultimately we're going to suppress the value of their property.
No. No. One has nothing to do with the other. It was me sharing for the record the thought process of how you get from point A to whatever point we're at.
The other question, if anyone here can answer this, is more from a legal perspective. Who ultimately would receive the court notice? Because I believe we're going to be in court with this. I just fundamentally believe that a property owner, some property owner, will take us to court for this. Who would be in the chain of liability? I know that on occasions I've had opportunities to ask the City to be a pass-through for properties that could potentially have some environmental issues. 89 03/23/04 - RULES - BILL 040024 Right now there's an old school in my district. It was owned by the School District and the community group wants it and the City is reluctant to take title because they can ultimately be in the chain of title as it relates to environmental issues. And I guess on this particular legislation, since the Council is being asked to pass this, Council, with individuals on Council, the City of Philadelphia, although it will ultimately -- if this happens -- be the Convention Center Authority that would provide the financing. And I don't know if the City is going to do it because the last time I checked we don't have any money.
Who would be in the chain of liability as it relates to this? Would I receive a court notice one day that says, Darrell Clarke, Councilman, 5th District, voted for a bill to suppress my real estate value or my ability to enhance my real estate value? Who ultimately will be 90 03/23/04 - RULES - BILL 040024 responsible and will be the recipient of a subpoena to appear in court?
Not to give you legal advice, Councilman, but in the performance of your duties I think you know that you're basically immune from suit. But I think the short answer to your --
I'm being sued as we speak by a developer in the district who was not able to develop a property, so it's not the first time.
I'm sure you're getting legal representation from the Law Department.
I've been hauled into court on a couple of occasions. So I'm asking that question, not necessarily of you guys. At some point I need to get an answer.
I think the first part of your question, though, the simple answer on this is someone's going to file whatever they're going to file with the Convention Center and I'm sure with the City. That's the only two logical parties. We're 91 03/23/04 - RULES - BILL 040024 intertwined in our general relationship.
Okay. With respect to this whole pending acquisition process -- I guess I want to ask this question of maybe you, Mr. Wetzel, as it relates to the broader issue, because this is the bill that was passed last year that gave authorization to Councilmembers on a City-wide basis to introduce and pass a Pending Acquisition District, and that brings me back to this whole issue about neighborhood development. Right now it is my belief, and I think other Members' belief, that there is going to be a limited amount of acquisition money as we proceed under this NTI process. I guess my question is, could this be implemented in the neighborhood as opposed to utilizing very limited dollars that we have under the NTI? So if we have an area that we anticipate developing somewhere down the line but we don't have the money, could we get some agency to file a notice of intent and basically lock in prices or the ability of anybody to enhance the value or to convert 92 03/23/04 - RULES - BILL 040024 properties, but put us in a position if we got the resources to ultimately acquire that land? Could this bill be implemented in such a fashion?
It's possible. I think the distinguishing characteristic, at least for the one that's on the table now, is that there is a public entity that's going to build a public building. And so the acquisition is from private parties into the public's hands and it will remain in the public's hands. I think it gets trickier --
Well, say for instance PHDC was the developer -- and I know that the thought is that they will ultimately be terminated -- but say for now PHDC is our development arm as it relates to housing, and PHDC will be interested in building 100 houses in a location. We don't have any acquisition money. We now say we're going to do a pending acquisition zone in this targeted area to basically suppress any property owner's ability to enhance the value of their property. 93 03/23/04 - RULES - BILL 040024
I think my answer would be this is going to be a very interesting case because I do think that there will be a court challenge to this. It's a very difficult matter to deal with in the sense of, if you took a particular area that was going to be acquired, conveyed to another public entity like PHDC, who's the ultimate conveyance to private parties, are they going to build home ownership units and sell them to private parties.
Let's go the next level. The Philadelphia Housing Authority.
Well, one of the things I will double-check, I believe they actually have eminent domain powers, but I will double-check on that to be sure.
Let's go back to PHDC, and it would be rental properties that would be owned and maintained by PHDC.
That's getting close to this. There's a major difference with condemnation that occurs where the land and 94 03/23/04 - RULES - BILL 040024 the subsequent buildings become part of the public's ownership. Libraries, schools, fire stations, and in this case the Convention Center. That type of acquisition is distinguished from the powers that are granted to redevelopment authorities, which is to acquire private land and convey to private parties. If the School District has eminent domain power, but only for the express purposes of acquiring land for the building of schools or administrative buildings and it's limited to that, so they must acquire and then retain ownership of that land in that public entity. I would assume -- but I could be wrong -- that the Convention Center's condemnation powers are probably limited to the acquisition of land for the Convention Center itself. And that land must stay in public ownership. And I think that's a very important distinction here if there's going to be a court challenge. I'm assuming the case in Nevada -- and these gentlemen can answer that -- that the land was set aside for some 95 03/23/04 - RULES - BILL 040024 public purpose. Is that the case, Councilman Nutter? Do we know that?
Yes. But ultimately it was never taken and the court basically said, look, you still have your land. There was a temporary interruption in your rights. It was years. 10
I do think that's an 11 important distinction if you were in front of 12 a judge or jury, that this particular 13 situation is a public act for a purpose of 14 acquiring land to be in the public domain in 15 perpetuity for however long that is to be. 16
I'm just looking 17 at the application in another instance where 18 there's a public entity, quasi-public entity 19 looking to develop a site. We don't have the 20 money as we don't have the money in this particular case, could this bill be applied in such an instance?
But in this particular instance -- and those who know the bill better can answer it -- if I owned a series of rental 96 03/23/04 - RULES - BILL 040024 properties in this area that you're describing, and it may be zoned appropriately and everything and they're vacant now, I don't think anything in this bill would prevent you from, A, bringing them up to code and, B, renting them out.
But if you have an industrial property you couldn't convert it to residential?
That's what it's seeking to prevent. Again, to do that you'd have to get a zoning variance. If the Board determines that not granting you that variance is an unconstitutional taking they have to give you the variance, so you'd be able to do it.
If you owned 10 single family houses there that were vacant over the last 10 years, you bought them, nothing would prevent you from bringing them up to code and selling them, thereby this would not control value in the same kind of way that I think the 97 03/23/04 - RULES - BILL 040024 distinction here is, which is converting from one use to another and that conversion creates substantial value increase. In the case we're talking about --
I'm going to test it because I have a site. I'm going to introduce a pending acquisition bill for that site where I hope to develop, and we'll find out through its application. I don't have any more NTI acquisition money and this is my way of testing the case and the ability to acquire additional land without money.
Are there any other questions from Members of the Committee? (No response.)
Do we have anyone else to testify on this bill? Please approach the witness table. Kindly identify yourself for the record and proceed with your testimony.
Goode morning, Madam President, Members of the Committee. My name 98 03/23/04 - RULES - BILL 040024 is Brett Feldman. I'm an attorney with the law firm of Klehr Harrison, and I am here on behalf of the owners of 144 North 13th Street.
Excuse me, sir. Would you mind pulling the microphone closer to you?
Again, Brett Feldman from the law firm of Klehr Harrison, 260 South Broad Street, Philadelphia, Pennsylvania, here on behalf of the owners/developers of the Lithograph Lofts project at 144 North 13th Street, which I believe is the project that Councilmembers Nutter and DiCicco have mentioned as the inspiration for this ordinance. We also share the same concerns as identified by the Planning Commission regarding the failure of a notice of intent to be filed. This Committee hearing today did not come out of nowhere. This was previously scheduled at least three weeks ago. There was no letter of intent at that point. There still remains no letter of intent or statement of intent to condemn here or intent to 99 03/23/04 - RULES - BILL 040024 condemn. I don't know why, but that's something that the Planning Commission has identified as a concern. We share that. We obviously also share the concern about the condemnation in taking issues. But my testimony is brief, is just to clear up some of the misconceptions about this residential project. I believe it was referred to as -- there's a sense given in the testimony so far that this is something that is just beginning or just kind of percolating along. This is a project that is essentially done. While this ordinance might have been inspired by this project and concerns, I think the phrase was, the horse is out of the barn on this one. That's what we've been led to believe from press accounts and also from Councilmember DiCicco's office on this. This is a project that I believe is almost 95 percent done. We're expecting certificates of occupancy within the next several weeks on this project and a temporary CO within the next week or two. They received zoning for this project. 100 03/23/04 - RULES - BILL 040024 They have received all the necessary building permits, we believe. The zoning allowing this conversion on changing uses was approved. The number of residential units has been approved by zoning and then the building permits were issued. So we just want that made clear on the record that is our understanding. While this ordinance potentially was inspired by this project, that this project is now, regardless of what you think about it, is now one that will continue to go forward. There are active pre-sales now going on in these units. There are new buyers for these condominium units. These are very nice, high quality condominium units. This isn't something that was done on a shoe string here. This is something that there is a market for and buyers are now in the process of signing papers on these units. So I just wanted to be here on behalf of the clients to express where this project is and that there be no 24 misunderstanding regarding the status, and this is something that is essentially done and 101 03/23/04 - RULES - BILL 040024 to answer any questions on that, if the Committee might have any.
I don't know exactly. There is a range, Madam President, on these units.
I don't know. I don't know that, but I know there is a range. I've been told that. And that is information that I'm sure is available market wise and we could pass on.
Thank you. The Chair recognizes Councilman DiCicco.
Thank you, Madam President. Thank you, Mr. Feldman. Just let me say that there was never any suggestion -- and I hope that's not what you or your client 102 03/23/04 - RULES - BILL 040024 believe -- that there was any suggestion that the permits were not properly acquired and that you did not go through the normal legal process that enabled your client to develop this building. It was never my intention. My intention was to point out the fact that to prevent this from reoccurring because of the cost that it will be to the taxpayers should the Convention Center expansion move forward was my only concern. And that if in fact your client sells all of the units, we are then faced with additional relocation issues that we would not have to consider today because the building is basically, even though it may be 95 percent complete in terms of renovations, it is not occupied for the most part. Council President Verna asked about sale price. How many units?
I think it's somewhere in that 65 to 70 units that was mentioned. I don't have the exact number. I can get that to the Committee. That would be as per the zoning for that. 103 03/23/04 - RULES - BILL 040024
Do you know what the developer paid for this property when he first purchased it?
Do you know what the value of the improvements have been?
Do you know if any agreements of sales have been completed yet or is it just pre-sale stuff they're going through now?
I understand that they're in pre-sales. I don't know the number.
Are they actively advertising through a realtor or are they doing it in -house?
I would appreciate if you could supply the Chair with answers to those questions. I think that's very important to us.
I don't have 104 03/23/04 - RULES - BILL 040024 any other questions right now.
Madam Chair, before Councilman O'Neill starts, I just want to say I know the developer. He's a friend of mine. I have no malice towards that individual. He was a smart business person. He did the right thing. And if I were not in this seat, I would probably have tried to do the same thing myself. So I just want you to know it's not a personal thing. It's just a question of fiduciary responsibility to the taxpayers and limiting what the cost going forward would be to the taxpayers in terms of the expansion. Thank you, Madam President. Thank you, Councilman O'Neill.
Yes. Just a point of clarity. Mr. Feldman, you said at the beginning that COs were pending. You used the 105 03/23/04 - RULES - BILL 040024 term COs, right, certificate of occupancy?
In response to Councilman DiCicco's question, you said that you weren't sure if there had been any agreements of sale yet. I'm just trying to get from maybe no agreements of sale yet and COs pending. COs pending would mean the construction is essentially finished on some of the units. You would have to have more than a -- you mentioned that the first thing before the agreement of sale, frankly, that you would just plop down a deposit or something to hold it. With an agreement of sale, you're the owner.
We are far beyond construction. We're at the end of construction.
So you have to have agreements of sale. I'm just trying to 106 03/23/04 - RULES - BILL 040024 -- you can't get to that point without agreements of sale. Nobody's building units with deposits without commitments to buy.
My understanding is that they are at the point of agreements of sale being reached on particular units.
People are ready to move in is just about what you're talking about?
I can't say exactly what that status is. But as far as the L&I issuing certificates of occupancy to allow the whole building to be used for residential, that is --
I just wanted some clarity there. My question was, does the developer disclose to the buyers in this case -- this is just curiosity. I don't know whether it's a legal requirement or not, which is not what I'm after. That could be the buyer's problem or issue. Do you regularly tell potential buyers that they're buying in the path of a Convention Center expansion that may happen, or do you -- you know, if somebody 107 03/23/04 - RULES - BILL 040024 is coming in from Nebraska and buying a unit -- I mean, if they live around here they probably have some kind of constructive notice of it since it's in the paper every other week. But do you formally notify the tenant that, oh, by the way, they're not building a stadium across the street, but they're going to tear your place down for the Convention Center?
Councilman, I don't know. I'm not involved with their sales.
I'd almost like to have this hearing continued -- I know we're going to get this bill out -- to bring the developer in because now I've got much more interest that -- we weren't picking on you. The developer is a business man. There's nothing stopping him from doing that. The Zoning Board exercised --
-- questionable judgement, but that wasn't the developer's judgement. 108 03/23/04 - RULES - BILL 040024
Point of information, Councilman. I think I know exactly where you're going with your question. Drawing from my real estate experience, which is very limited, I believe that the seller is required under the Full Disclosure Act to let a potential buyer know if there is some development, as you speak to, that will be coming down the path of the property that you're buying. And there's obviously -- the public has heard enough about this in print and electronic media. So again, from my recollection -- and I'm a licensed salesperson, although I don't sell many properties -- but I believe that full disclosure is required here, would be required.
There's certainly a possibility. Some people actually move into the City from outside the area, that they wouldn't have any idea. But as you're getting back to the Chair with information on the range of sales, could you also get some information on the number of agreements, cost 109 03/23/04 - RULES - BILL 040024 of the land as was asked, cost of improvements and also this question of disclosure? Thank you.
Thank you. The Chair recognizes Councilman Kenney.
Thank you, Madam President. Mr. Feldman, did your client go before the Zoning Board to get the approval to develop this property as a residential property?
My understanding is that this project did require Zoning Board approval.
So the Zoning Board heard testimony and formally voted on it?
That's my understanding. I was not there, nor did I participate in that hearing.
Who advises the Zoning Board -- is it the Planning Commission that attends the Zoning Board hearings to 110 03/23/04 - RULES - BILL 040024 advise the Board on issues as to relative to City policy and other things?
I just know from my general zoning background that the Planning Commission does attend the Zoning Board hearings.
Are you aware whether or not the Planning Commission had any advice or counsel to the Zoning Board as a result of this request to change the zoning of this building?
Do you know who would know? The concern I have is that the Zoning Board, if they didn't know that the Convention Center was expanding in that direction, they should have known. And if they didn't know, certainly the Planning Commission knew and should have brought it to their attention on the record so that maybe 111 03/23/04 - RULES - BILL 040024 they could have held the decision in advance until they got more information. It seems almost incredible to me that they didn't know that plans to expand the Convention Center were in the works and that the Planning Commission would be there and not raise their hand and say, well, wait a minute, maybe you should be aware of this. You can understand -- despite the developer's right to make a profit -- you can understand some of the concern of Members of this Council and the public may have with the fact that this kind of occurred in a wink and a nod -- or a wink and a smile. It's going to cost the taxpayers an awful lot of money to make whole the owners of this property and to relocate the 65 or 75 condo owners or tenants, whatever they are, that you're going to have. You would think someone on the Zoning Board or someone at the Planning Commission would have said, maybe we should think about this before we do it. I know you represented the client and the client wanted what they wanted, but it 112 03/23/04 - RULES - BILL 040024 doesn't make it right and it doesn't make it fair to the taxpayer. I don't think in fact that the Planning Commission or the Zoning Board did their job too well on this particular case. Is their anyone on your firm that attended the hearing that could provide us with some information as to what happened? I know, Councilman Nutter, you're over there all the time. Are there notes of testimony or is there a public record? Maybe you should ask for the public record to see exactly what was said, because I have trouble believing a lot of intelligent people didn't know what they were doing when they maneuvered this zoning change. Madam President, I would like to see if we could make a request for the notes of testimony of that zoning hearing just to see who knew what and who said what.
Very good. The Chair recognizes Councilman Cohen.
During the work on the stadiums there was some discussion 113 03/23/04 - RULES - BILL 040024 about a parking garage or an Acme lot or something, and the City was informed by developers, they told us later that it was likely that that be would be needed for some purpose in connection with the sports stadium. They offered to sell it to the City at a very low price. The City, as governments often do, can be pretty arrogant. The City said, no, they were sure it wasn't going to be and they weren't interested. Later of course the developer turned out to be right and the City, I think, had to pay about three times what they originally were offered their property for. Does that come back at all? Is that the situation that you're aiming at? Because that's one that stands out in my mind as an example of bad judgment by the City. I can never figure out why the City's judgment was so bad at the time.
Councilman, if the question was directed to me, I recall there was an issue about at least one the properties and that there had been maybe some preliminary City discussion. Somewhere in the 114 03/23/04 - RULES - BILL 040024 course of that story the bottom line, I think, ended up being that we could have taken an action at one point in time and acquired the property for one amount of money. We didn't. And then I think through subsequent negotiation, we may have actually paid more. I think that has not too much to do with this. It may just have had something to do with when you make your judgment about when you need a particular piece of property. I don't remember all the details on that one, but there was something about one of the properties down there.
You're absolutely correct. The Acme Market warehouse was the one that the City eventually probably paid about three times more than the original sale price. And the developer knew eventually, I guess, that the stadium would need that site to develop and bought it and just sat on it. I don't think he's been paid yet. I think it's still being disputed.
Madam President, I'm sorry to interrupt. 115 03/23/04 - RULES - BILL 040024 On the additional point that Councilman DiCicco is making, the last owner of the property never even paid a dime for the property. They had an option to buy the property. It was all paper transactions. No 7 money changed hands until they found out that they needed -- I still don't think they needed it -- but they decided to acquire it as a result of the stadium deal and he made three times the amount of money profit.
Are there any other questions of the attorney at the table? And I know that Councilwoman Miller is getting rather nervous because she does have some of her constituents here to testify. I would ask, Councilman Nutter --
I'll be very quick. Mr. Feldman, you indicated that your client did in fact have an application at the Zoning Board, went through a Zoning Board process and received approval by the Zoning Board? 116 03/23/04 - RULES - BILL 040024
Do you know what the zoning classification was for the property before you went to the Zoning Board?
Mr. Feldman, if I can, I guess, try to say this in as respectful a fashion as possible, what was the purpose in your coming to the hearing today? You seem not to have much information.
My purpose today was to simply correct the type of, I think, misperception on this project as far as how far along this project is. 117 03/23/04 - RULES - BILL 040024 I know at one point it was said that it was 35 percent or 40 percent as far as construction. That is not the case. From what I'm most recently told, it's approximately up in the mid to upper 90s now. That's all I'm here for at this point.
I understand. I've never believed that this piece of legislation would have any direct impact on your particular project once you got started. I think that was pretty much the end of that discussion. One last thing. Do you happen to know where the file is for this particular property? There's apparently been a number of attempts to locate the zoning file for this particular site. Do you have any idea why it's not where it's supposed to be?
I have no idea. It should be as you can imagine, down at L&I zoning.
The questions that I've asked you -- and this will be my last question, just to wrap this up. The 118 03/23/04 - RULES - BILL 040024 questions that I've asked you, can you provide to the Chair answers to those questions? I asked you when you were at the Zoning Board, when was it approved, when did you apply, what was the zoning classification before this started, and how long was the building vacant.
I believe that most of those questions I've already got down on a list here. Most of those are public record.
I know you indicated that you were not at the Board. Who was?
You must have been standing in the wrong place at the wrong time this morning and you drew the very short straw. You may want to check about your status at the firm to get sent over here for a hearing like this with no information under these circumstances. Somebody does not like 119 03/23/04 - RULES - BILL 040138 you. Thank you very much.
Mr. Feldman, could we have responses in writing by tomorrow, please? I don't think that would be difficult.
Thank you. Are there any other questions from Members of the Committee? (No response.)
Do we have anyone else to testify on this bill? (No response.)
Seeing no 18 one, I would ask Mr. McPherson to please read the title of Bill No. 040138.
An ordinance 21 approving the first amendment of the redevelopment proposal for the Wister III Urban Renewal Area.
Please identify yourself for the record and proceed 120 03/23/04 - RULES - BILL 040138 with your testimony.
Madam Chairperson and Members of the Committee, Herbert Wetzel, executive director of the Redevelopment Authority of the City of Philadelphia, and I'm here today to speak in support of Bill No. 8 040138, the first amended redevelopment proposal and the first amended urban renewal plan for the Germantown Redevelopment Area and the Wister III Urban Renewal Area. This bill would authorize the Redevelopment Authority to acquire a total of 10 properties, six abandoned lots and four vacant and vandalized structures in support of Greater Germantown Housing Development Corporation's Wister Commons Project. The Wister Commons project is a two-phased affordable housing development proposed by the Greater Germantown Housing Development Corporation in collaboration with Conifer Realty. While Phase I consists of the construction of 10 new townhouses and substantial rehabilitation of three 121 03/23/04 - RULES - BILL 040138 properties, the overall project will include the acquisition and construction of a total of at least 75 units which will be rented and subsequently sold to low and moderate income buyers. GGHDC plans to finance this project through the sale of low income housing tax credits. Acquisition of the properties 9 will require one demolition. Since all 10 properties are vacant this development will require no relocation. Madam Chairperson and Members of the Committee, I respectfully request favorable consideration of Bill No. 040138 and would ask for the suspension of Council Rules to allow first reading on March 25th, 2004.
Once again, Madam Chair and Members of the Committee, for the City Planning Commission, my name is Thomas Chapman. This bill approves the first amendment of the redevelopment proposal for Wister III Urban Renewal Area. This bill 24 authorizes the acquisition of 10 properties for residential use. The Planning Commission 122 03/23/04 - RULES - BILL 040138 approved this amended redevelopment proposal at its meeting of February 17th, 2004. Thank you.
Thank you. The support detail states that three single family homes will be rehabilitated and that new townhouses will be constructed. 9 Since the proposed ordinance only specifies 10 that 10 properties are to be acquired, are the acquisitions only for the new townhouses or do they also include the three properties that are to be rehabilitated?
I would ask that the developer who's here today to provide more detail. But this is an additional acquisition to other acquisitions that have been undertaken on behalf of this project. So there's more properties -- these are the last 10 that round out the overall project that's going to be developed at the site.
Are we led to believe that all of the properties are vacant?
The bill 3 states that there are certain relocation costs, but in the support detail there are no 5 relocation costs. Would you please explain?
Well, I'd like to look at it. It would be an error on our part if it does indicate relocation costs because all these are vacant.
I think you ought to look at that, and if there are corrections to be made they should be made.
The bill 15 states that condemnation is not eminent, but the support detail on states that the Redevelopment Authority proposes to condemn. Please explain.
I'm going to defer that. I'd like to get back to you. I think that's a legal question regarding the notion of what's in a redevelopment proposal under state statutes, and I'd like to be able to answer that. Your question is specifically about condemnation is not eminent, and if 124 03/23/04 - RULES - BILL 040138 Madam Chairperson would allow me, I would like our legal counsel to address that.
I think that's something we should do. Are there any questions from Members of the Committee? The Chair recognizes Councilman Cohen.
On some previous occasions after testimony by RDA that houses were vacant, owners suddenly appeared and said they were living there. To make sure of that, how do you determine that the properties are vacant? What's your documentary evidence of that?
Staff at the Redevelopment Authority go out there. We also work with the developers. But there's the very real possibility, Councilman, that during a process, for example, what was vacant today, a month from now, could very well be occupied. So that's sometimes what happens. In many cases in working with the Councilperson when that happens, properties are re-vested or not 125 03/23/04 - RULES - BILL 040138 taken in some cases. But we make a good faith effort --
I heard you say that the houses that were vacant become occupied. How do they become occupied?
I can't answer specifically, but I would make the assumption that some people move into a property. Sometimes properties are sold while this process is going on and people move into them. There are a variety of ways that could happen.
Well, I would rather City Council did not act on assumption, but acted on knowledge and documentation. Therefore, I would like to ask you to put into document form of some kind your statement that these properties are vacant, and if that condition changes, you will notify City Council. Because I'm going to be raising quite frequently the question as to whether or not, are there any properties occupied by an owner or a tenant, and if so, do they agree or do they disagree so that we avoid the situation at the last minute when a bill comes 126 03/23/04 - RULES - BILL 040138 in for ultimate approval to find property owners or tenants stating they've lived in property for a long time. This would give us the basis for knowing. I don't think the RDA ought to operate on assumptions. I think you've got the operate on knowledge. I don't think the RDA ought to rely on developers. The developers have their own interest to protect. The statement may be what the developer wants. It may be true. It may not be true. Or the developer may have been sloppy in his fact finding. So we'd like to have something. I certainly would before I support any of these actions further. I'd like to know what the situation is and documentation to establish that there is no homeowner or tenant living there currently who's faced with eviction against his or her will. Could you do that?
Councilman, let me answer it this way and ask if this is appropriate. Last year Council asked us to change our process to expand notice beyond the public ads that are required under state 127 03/23/04 - RULES - BILL 040138 statute to sending certified letters to the owners of the properties. In this particular case, certified letters were sent to the owners of the properties and we also research and see if there's an off-site address as well. Because sometimes tenant-occupied properties, the landlord has an off-site address. So we do have evidence that regular and certified mail was sent to each of these properties. Is that sufficient over and above --
If there's a possibility that a homeowner or a tenant may be turned out of a lawful possession, that they're entitled to more than certified letters, and I cannot imagine my voting for -- and I don't remember the matter ever coming up that Council would be satisfied with a certified letter. Maybe that happened. Maybe my memory is not good on that. I don't know. But I know if I were aware of that issue I would certainly say ownership or rights of tenants to occupy property is worth more than certified letters. It certainly seems to me 128 03/23/04 - RULES - BILL 040138 that RDA can send out somebody from their staff to check out each one. These are 4 units that are very close, aren't they? 5
So you don't have 8 to worry about that. So you have four left? 9 Is that the 10, 6 and 4? 10
Are the four united, close by, either on Sheldrake or on a cross street of it?
It would seem to me that the citizens of Philadelphia are certainly entitled to assurance that before any action is taken where they live, either by right of tenancy or ownership, that they're going to receive a personal check to make sure that nobody lives there. And then we can accept your word. It seems to me I'd be asking for a very fair thing if I ask for documentation from you that the house is vacant or from an appropriate official of the 129 03/23/04 - RULES - BILL 040138 RDA.
If you could do it in this case, that would be good because that settles the problem and then we know we're not going to have an aftermath of having people coming to this Chamber accusing RDA or accusing us of being cold and callous with respect to handling their needs. Thank you very much. Would you send that to the President? She'll see that we get it.
Thank you, Madam Chair. I'm sure when the developer and executive director for the Greater German Housing Development Corporation gets up they can confirm that these dwellings are vacant and have been vacant for some time and does not have anyone residing in them because of their personal visitation, not a certified 130 03/23/04 - RULES - BILL 040138 letter.
I'm trying to just set up a general procedure that would apply to all homes to make sure that we don't make human errors.
Do we have any other questions from Members of the Committee? (No response.)
Gentlemen, thank you. You'll remain until the conclusion of the hearing, please. Mr. Wetzel?
Hello. My name is Bill 19 Guzman. I'm one of the owners of the properties that's planned to be condemned. I do not live at the property. We purchased it through sheriff's sale, which was a few months ago. And we planned to develop it and sell the property. So my question to people here is to find out what exactly we have to do to 131 03/23/04 - RULES - BILL 040138 be able to develop it, or is the property just going to be taken by condemnation and that's it?
Mr. Wetzel, do you want to approach the witness table and respond to the question, please?