COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, May 26, 1999 10:26 a.m. - - - BILL 990249 - Creating the Whitaker Tax Increment Financing District. . . BILL 990253 - Creating the St. James Court Tax Increment Financing District. . . (Full text of both ordinances contained herein.) PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN AUGUSTA A. CLARK COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DAVID COHEN COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN RICHARD MARIANO COUNCILMAN JAMES F. KENNEY COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN MARIAN B. TASCO COUNCILMAN FRANK DICICCO COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN FRANK RIZZO CHARLES MCPHERSON, Chief Financial Off. - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 5/26/99 COM. OF WHOLE - 990249, 253 I N D E X Robert Fina, Senior Vice President . . . . . . 3 Philadelphia Industrial Development Corporation 3 5/26/99 COM. OF WHOLE - 990249, 253 P R O C E E D I N G S
Good morning. This is the public hearing of the Committee of the Whole. I would ask the clerk to please read the title of Bill No.'s 990249 and 990253.
Bill No. 990249, creating a Whitaker Tax Increment Financing District and approving the project plan of the Philadelphia Authority for Industrial Development for the redevelopment of the Whittaker Tax Increment Financing District being the area generally bounded by Cheltenham Avenue on the north, Somerdale Avenue on the east, the right-of-way Conrail's former Frankford Branch on the south, and Whitaker Avenue on the west; and making certain findings and declarations, all in accordance with the Tax Increment Financing Act. Bill No. 990253, amending an ordinance 21 approved December 30, 1998 (Bill No. 980719), which created the St. James Court Tax Increment Financing District by approving the amended project plan for the redevelopment of the district submitted to City Council by the Philadelphia 4 5/26/99 COM. OF WHOLE - 990249, 253 Authority for Industrial Development, and making certain findings and declarations, all in accordance with the Tax Increment Financing Act.
Good morning, Mr. Fina. Please identify yourself for the record and proceed with your testimony.
Good morning, President Verna and members of City Council. My name is Robert Fina. I am a Senior Vice President of the Philadelphia Industrial Development Corporation, and now I am appearing on behalf of the Philadelphia Authority for Industrial Development ("PAID"). I have additional copies of my testimony if any Councilmember did not bring that with them. I did try to transmit that in advance.
I am here today to testify in support of Bill No. 990249, creating the Whittaker Tax Increment Financing District; and Bill No. 990253, amending the St. James Court Tax 5 5/26/99 COM. OF WHOLE - 990249, 253 Increment Financing District. The St. James TIF was previously approved by Council on 12/10/98 and signed by the Mayor on 12/30/98. Today's hearing is required by the Pennsylvania Tax Increment Financing District Act to create or amend a TIF District. Should the committee approve these bills, the Act requires that Council wait at least three weeks for final approval, which means that Council cannot approve the bill until its meeting of June 17, 1999. Since introduction of these bills, PIDC has met with City Council, has met with Council staffs and representatives of the School District to review the proposed and amended project plans. On Monday, May 10, 1999, the School District agreed by resolution to participate in the districts should they be amended or created by Council. 4-million- square-foot building for manufacturing uses, and adding over 600,000 square feet in new 6 5/26/99 COM. OF WHOLE - 990249, 253 construction over the next eight years. Completion of the retrofit alone is expected to add approximately 400 jobs and $700,000 in new annual taxes. 5 million in net revenues to the School District. Since introduction of the bill, 990249, the Whittaker TIF, several changes have been made to the project plan based on PAID's conversations with City Council, the Administration, and the School District. In specific: The value of the tax increments were prorated such that 100 percent of the authorized tax increments will inure to the TIF fund in the first four years; and thereafter, tax increments will be reduced to the extent that Cardone fails to meet or create at least 500 new jobs over and above the existing citywide employment, calculated on a full-time equivalent basis. Presently, Cardone's citywide employment, as of this morning, 7 5/26/99 COM. OF WHOLE - 990249, 253 is 4,262 jobs. Proviso language contained in the project plan was clarified to indicate that amendment to the project plan will not be required prior to settlement of financing so long as changes to the scope or the project costs are less than percent, and such changes in costs are not 9 funded by City or City-related funds which all but 10 prohibit any kind of City involvement in the 11 project. No amendment shall be required for 12 changes after settlement of financing. 13 City sales taxes and City sales tax 14 increments, which were projected to be zero in the 15 initial project plan, were eliminated altogether in this revised plan. And in effect, if they would inure or would accrue, they would inure to the benefit of the City. The project plan has been amended and restated to reflect these changes and is on file 21 with the clerk of City Council for review by the public. I'd like to talk about the St. James Court amendment now and then answer any questions on either. 8 5/26/99 COM. OF WHOLE - 990249, 253 Amendment to the St. James Court TIF is required to accommodate several changes in the project's scope and financial structure. Use and occupancy taxes previously dedicated to the TIF fund are dedicated to fund the TIF project cost will inure to the benefit of the School District under this amendment and will not inure to the benefit of the TIF fund. The originally planned 328-unit, 332-parking space apartment complex is now projected to include 270 units and 285 parking spaces, albeit the units are larger. 5 million. The amendment authorizes changes of the developer to St. James Walnut Street Associates and further authorizes future transfer of any portion of its interest in the project to a new private entity. The increased project costs are expected to generate a 30 percent increase in real estate and use and occupancy taxes to the School District and to the City. Over 20 years, PAID 9 5/26/99 COM. 3 million by this amendment.
In closing, I wish to assure City Council that PIDC will assist the Mayor in employing with the employment reporting requirements as stipulated in Bill No. 990181, should it be approved. I ask again for your approval of Bill No. 990249 and 990253, and remind Council that the TIF Act requires a three-week wait before Council's final approval. And I'll be happy to answer any questions that Council may have, and I am joined today by my colleague Sam Rhoads of PIDC.
Thank you. Mr. Fina, on of the project plan, it indicates that $28.5 million in tax increments will be used to fund project costs for a minimum build-out and $30 million for the maximum build-out. Why the difference since the TIF notes in both scenarios is $8 million?
That's a good question, 10 5/26/99 COM. OF WHOLE - 990249, 253 Madam President. We've capped, somewhat at your question and somewhat at the School District's, the amount of the TIF to reflect a note that the maximum participation in TIF would occur to the project. If the developer decides to expand further and increase to the maximum possible, now you knowing what that maximum is, it does not necessitate and will not be permitted to increase the TIF note financing. Although there will be more taxes generated, we do not do that calculation to show the net positive benefit to the City.
What is the breakdown by funding source -- State, City, etc. of the additional public funding? I do know that at the briefing that we had, you stated that $1 million would come from economic stimulus. What is the maximum amount of funds that the City will provide, and why isn't that stated in the project plan?
One reason when we were formulating the project plan, we were not sure exactly where the public dollars were, where they 11 5/26/99 COM. OF WHOLE - 990249, 253 would be generated from, other than between the State and the City. We were very cautious to maximize the public dollars because many times, members of City Council had asked that rather than using TIF revenue, that some would inure to the benefit of the School District without maximizing all public sources. Our expectation at the time we wrote the plan was that 6 million would be derived from State programs, whether they be debt or grant; and $1 million would be Economic Stimulus Program funding. I can at this point state that the maximum Economic Stimulus Program funding for this project will be $1 million. We've reached that conclusion as of today, or earlier this week.
If in the future that should change and we'd need $2 million, would you come back to City Council?
By this project plan, we are required to because if there are increases in costs other than -- they could be funded by City or City-related funds -- excuse me. They cannot be funded by City or City-related funds. 12 5/26/99 COM. OF WHOLE - 990249, 253 Ergo, if there are increases in costs within percent, they must be nine City-funded 4 sources. So we would have to come back to do 5 that. And if they are over 15 percent and not 6 funded by City, we must come back. So we would be 7 back, to answer your question. 8
Thank you. 9 Your testimony indicates that any funds 10 in the TIF account reverts back to the City and 11 the School District when the TIF note is paid off. 12 What happens to the interest these funds have 13 earned? 14
The interest where the 15 dollars sit for a portion of a year in the TIF fund, they would remain with the TIF fund until the completion of the term of the TIF, and then return to the City.
That would sit there on the Whittaker for 20 years, on the St. James Court for 12 years if they were available. And that means the only way they would be available is if the business is doing so well and the taxes are being 13 5/26/99 COM. OF WHOLE - 990249, 253 generated and not needed for the TIF fund and that there's a surplus in effect in the TIF fund.
You indicate on , Section G, that the tax increment will be reduced if the number of new jobs in the District goes below 500. What is the formula that you will use to reduce the tax increment by? And tell us what happens to any accumulated funds in the existing TIF account.
The formula generally is that, as of today, as I mentioned, there are 4,262 jobs. And within 4 years, the developer must create 500 new jobs citywide. Anytime after that or from that point on, if the developer has not created those 500 jobs, we would divide through the TIF portion -- the 100 percent of the TIF by the 500. And anything less than 500 or 1/500th of the TIF for every job that's lost would be reduced from the TIF fund and returned to the City for that year and any subsequent years that the jobs were not at 500 net citywide above the 4200 that I mentioned.
I'd like to refer to the St. James Court TIF. The proposed 14 5/26/99 COM. OF WHOLE - 990249, 253 amendments of that TIF will increase the private dollars that are being committed to this project and the public commitment is staying the same, is it not?
Yes, it is. The TIF, on face value, the note is staying the same. We believe the interest rate on the TIF note, in discussing this with lenders, will increase some, and that will be covered by the additional TIF fund revenue. But there are still more tax revenues to the City and the School District now by the amendment than what was originally proposed.
Does anyone have any questions? Do any members of the committee have any questions? The Chair recognizes Councilman Cohen.
First for the record, I find it confusing to be talking about St. James and Whittaker at the same time, so forgive me if I get them mixed up as we go along. Let's talks first about St. James. 15 5/26/99 COM. OF WHOLE - 990249, 253 That's largely a residential property; is that what it's intended to be?
Right now, it's being discussed. Somewhere between $1,000 per month and $4,000 per month, depending on the size of the apartment and the market and the final debt structure when they close the private financing.
Well, if I were to make an economic analysis from the tenant's point of view, does the tenant in any way, and if he does or she does, do tenants in any way benefit from this? What is the benefit to the tenant? Or is this a project in which the only benefits will accrue to the developer? 16 5/26/99 COM. OF WHOLE - 990249, 253
Councilman, it's always very difficult to answer that type of question because there are benefits for either. If I would take a mathematical formula and say that the TIF revenue over the years, 7 the maximum amount is 20.8 million and I divided 8 that by the 270 apartments and then that equaled 9 $77,351 per apartment, then further divided that 10 on a yearly basis for the 12 years, that means 11 each apartment would have $6,445. And then you 12 could divide that further each month, and it would equal a $500 subsidy to that apartment, 'cause I think that was a question that you had raised previously to us before. That's what the dollar amount per apartment is for the TIF. However, two developers have previously tried to develop this particular property with a TIF, and they had failed 'cause they could not get a return on their equity that supported the risk for investing in this project with an economic return. Without the TIF, this project would not be developed by the developer. And, therefore, you might also say the benefit of the TIF goes to the developer to respond to a return on his equity 17 5/26/99 COM. OF WHOLE - 990249, 253 and to compensate him for the risk of such an expensive project of $83 million.
Well, let me go back first to the tenant 'cause I want to visualize what this project really is. If this tenant were to go to a purely private enterprise operation, meaning, you know, the real tough private enterprise who don't want government to do anything for anybody. If they went to that, what kind of apartment could they get for the same amount of dollars that they're spending here?
I'm not a housing expert but I would say that that tenant would be somewhere in Bucks County, Montgomery County, or Delaware County because new construction on luxury apartments is not occurring in the city of Philadelphia now.
New construction of luxury apartments is not being created in Philadelphia by the private market at this time.
Well, is there an 18 5/26/99 COM. OF WHOLE - 990249, 253 existing market for luxury apartments in Philadelphia?
I would say that is probably 100 percent occupied, whatever the --
But there is an existing market, right? There are existing apartments?
Excuse me, Councilman Cohen, there's a point of order.
Madam President, I really don't believe that Mr. Fina is qualified to answer questions to the extent that the Councilmember is asking relative to real estate occupancy rates and luxury occupancy rates. Perhaps if we want to bring in an expert to answer those questions then --
Then I would like to 19 5/26/99 COM. OF WHOLE - 990249, 253 have --
I just -- I just -- let me finish my point. I mean, to put Mr. Fina in this position, I don't think is appropriate. He's here to testify on what PIDC wants us to do, which I think he's done quite well. If there's another line that we're going in, then maybe, you know -- I don't really know where it is, but maybe we need somebody else to answer these questions 'cause I don't think it's fair to him.
I have no objection to Council obtaining experts on this area because I think it's fundamental, before we take any action, that we understand what we're doing. And I take Councilman Kenney's point of order to be an effort to prevent the facts from coming out about this development. I'm trying to find out what the development is all about. If this witness is not competent to answer the questions that I deem as relevant, then I'm going to request that no action be taken on this bill 24 until there are experts who Councilman Kenney deems are qualified to testify on these various 20 5/26/99 COM. OF WHOLE - 990249, 253 subjects.
Thank you very much. I would not like the Councilmember to characterize my point of other as anything other than making a point that Mr. Fina is trying to struggle with the questions that Councilmember Cohen is asking. I have no problem with moving forward with this. We've been briefed totally on this issue over the last couple days and prior to that. So, I mean, if Councilmember Cohen needs more information, that's up to him, but for this particular Councilmember, I'm ready to move forward with this. If Councilmember Cohen has some other line of questioning in some other --
No, no, I believe that this witness is competent to answer, but if he cannot answer, it indicates that the project is not clear in the minds of the City officials who 21 5/26/99 COM. OF WHOLE - 990249, 253 are dealing with the project.
That's not accurate, Madam Chair. What he's not able to answer is the occupancy rate level -- the vacancy rate level --
No, I think he can answer these questions. I think your line is --
The question that the Councilmember asked Mr. Fina was --
Is he still on the Point of order, Madam Chair? I object to Councilman Kenney trying to limit the questions on this development.
The witness is very competent. He's been executive vice president for many years; he does not need Councilman Kenney to protect him --
You asked him if the -- (Unintelligible, parties talking over each other.) 22 5/26/99 COM. OF WHOLE - 990249, 253
Please, gentlemen. Mr. Fina, can you answer the question?
I can tell you again, Councilman, that the vacancy rate of luxury apartments in the city of Philadelphia is very low. I can have that statistic for you within the next week or so to find out from Cushman & Wakefield or someone who tracks that particular statistic.
Well, I would like to have that information. I don't know how I'm going to be able to act on a bill if I can't get information. It would seem to me -- I want to know the nature of this development. I cannot understand and I'm asking questions so maybe I will be able to understand how it could be in the interest of the City to subsidize wealthy people's occupancy. And I want to know what the justification is.
Councilman Kenney, I have a right to ask my question. I kept quiet 23 5/26/99 COM. OF WHOLE - 990249, 253 when you were defining your question.
Well, to me, it's a question. To you, it may be a statement.
Mr. Fina, when did you say you could have the information available to members of Council?
I would have that 19 information within 24 hours, but all that would do 20 is give you a figure that supports my statement 21 that the vacancy rate of luxury apartments is very 22 low, it's in the -- 23
It would seems to me when you say that it indicates there is a need for luxury apartments, right?
All right. Then would it seem to me that the ordinary principles of private enterprise ought to apply. You make a determination as to whether or not there is sufficient private funding in order to make a project stand. I can't understand why if there's a need for these apartments --
Councilman, that philosophic argument you're raising deals with every economic subsidy program, every economic incentive program that the city of Philadelphia and every city that's competing for jobs, housing, and residents in the United States -- in fact, even in Europe, they're copying our programs to replicate and to create incentives. So what you're saying, the reason the private enterprise system doesn't work in certain urban areas is because there are problems with 25 5/26/99 COM. OF WHOLE - 990249, 253 those urban areas that do not exist in non-urban areas, in the suburbs. And what we do is, we use our economic development programs to make it an even playing field, to balance the differences between the two. That's our -- all our programs do that, Councilman.
We have already approved the TIF on this, have we not?
And what we're doing today is amending that so that the developer could add an additional -- a little over $21 million to the project.
That is correct, Madam President. It is $21 million of totally private funding.
Madam President, I am unaware of the fact that once this Council acts, forever that subject is verboten, that it means that we have acted forever. I am raising questions about this 5/26/99 COM. OF WHOLE - 990249, 253 project and stating that I have serious questions as to whether the project should continue. The fact that we made a decision once may merely indicate we made a mistake on one occasion. And I'm, therefore, when the subject comes up again, I am asking to -- I am seeking to raise questions. I think this is a, from what I understand as of now, it seems to me that at a time when our neighborhoods need so much infusion of economic strength, that this is a very poor use of government funding.
Isn't it true, Madam Chair, that in this particular amendment request, there is no additional money being put into this project from a TIF standpoint?
It's simply the amount of money that's being additionally added by the developer --
$21 million. 27 5/26/99 COM. OF WHOLE - 990249, 253
It's $21 million in private money, and no additional tax dollars. So, Councilmember, I believe, unless he voted no on the first TIF, supported the $8 million towards the TIF that's --
And I believe we approved the TIF for St. James Court on December 30, 1998.
Well, I'm reraising the question. I want to know whether this -- apparently, this project is not prepared to move forward unless there is an amendment. Therefore, there is a question. Suppose this amendment does not go forward, what happens to the development?
Councilman, a couple things. One is -- to answer that directly, the developer would have to make a decision to go back to what you already approved, and as a matter of right, continue that previous project. That seems unlikely in the fact that they now see they need to add $21 million. 28 5/26/99 COM. OF WHOLE - 990249, 253 What they might do is reduce the need of private dollars down to the percent level 4 that you've authorized and try to do a less luxury 5 apartment and go to the marketplace there. I'm 6 not sure what the developer would do. 7 But I will say this: that the 8 $7 million that we're proposing isn't available to 9 us to put into another project and only is created 10 by the fact that new incremental taxes at this 11 location, at this precise location, are available 12 from the fact that there's new development that 13 raises the value of the property there. Property 14 taxes only are increased on this project, and 15 therefore, we take a portion of these taxes and we fund the improvements to make certain that it gets billed. We don't have $7 million, it's not a $7 million grant from another -- from a City Council-approved treasury. We don't have $7 million. We're only taking $7 million of taxes that could inure to the City if this project is built. And if it is not built, we will not have those taxes or the other taxes.
I know but there's 29 5/26/99 COM. OF WHOLE - 990249, 253 nothing to be said, there's nothing to establish the fact that something won't be built in the normal course of private investment.
You present it as 8 this is once forever, like you present 9 DisneyQuest. If DisneyQuest doesn't take this 10 space down in Center City, you -- I mean, by 11 "you," I don't mean you personally. The City 12 acts as if nobody's going to want this space. 13
I believe this space 15 is prime space. If this development does not go through --
Mr. Fina, how long has this building been vacant?
This building has been vacant approximately 15 to 20 years in some form or another, 15 to 20 years, and it's now an eyesore and it is a blighting influence on the neighborhood at this point because there has been 30 5/26/99 COM. OF WHOLE - 990249, 253 no --
And would you say that we have a line of people waiting to invest over $76 million to rehab some of these old properties?
And would you also say that the City and School District would be the beneficiary in that we would be generating more money?
That's always the pie in the sky that we hear about from every developer.
We would not have to wait 12 years for the increase?
It would start within 2 years from now, possibly even 18 months. We would 31 5/26/99 COM. OF WHOLE - 990249, 253 not have to wait any longer or gamble that there would be private investment, 'cause it hasn't happened for to years so far. 5
Madam President, I 6 would suggest that these tax revenues are as 7 ephemeral as the jobs we're always told will be 8 created by these developments. And when we go 9 hunting to try to find whether these jobs have 10 been created, we never find them. 11 I suggest that these tax revenues into 12 the future are -- 13
But the City 14 has insulated itself in this TIF in that if the 15 gentleman does not hire X-amount of people within 16 a certain period of time -- or is that on the 17 other one? That's the other one. 18
That's part of the 19 Whittaker. 20 But there is net new employment here. There is net 25 new permanent jobs associated with this project. There are hundreds of construction jobs associated with this project moving forward now, this summer, as opposed to delay caused by any reason. 32 5/26/99 COM. OF WHOLE - 990249, 253
And I do believe that city commerce does attract luxury apartments, and they believe it is in the single digits, the vacancy. I was just given that information so that may suffice. They have that on annual basis, the City Commerce Department. So, Councilman --
I think there may well be a need for luxury apartments in Center City because I think Philadelphia, contrary to the indication from your earlier statement, that Philadelphia Center City is a very attractive place to live in. And I understand from a lot of different sources that there's great demand for apartments, not only luxury apartments, but all level of apartments in the Center City area. For that reason, I just don't understand why we have to get involved with additional government aid for people's whose income is as high as the people --
There's point of order, Councilman Cohen. 33 5/26/99 COM. OF WHOLE - 990249, 253
There is no 3 additional government aid in this amendment, and if you keep on --
I do not appreciate being interrupted in the middle of a sentence Councilman-at-large Kenney. I think I have a right to make my statements heard. And I resent your always rising because, obviously, you feel there is no justification for this development, and you're trying to prevent any public analysis.
Point of order. Councilmember Cohen stated clearly that there was additional public aid being requested for this project; that is not in fact true.
I didn't say there was any additional public aid; I said there is public aid to this project. Are you trying to deny that the original project is receiving tax dollars?
Well, that's what I'm talking. I'm raising now whether or not we ought to amend, because it's my opinion that if we do not amend, this project will fail. And if this 34 5/26/99 COM. OF WHOLE - 990249, 253 project fails, I think that there will be other ventures that come forth that will produce the same kind of revenue, maybe more revenue, without the use of public-assistance dollars, which ought to be used for the neighborhoods in Philadelphia and for lower-income citizens.
I'm just getting fed 11 up with the continuous efforts to pour money into 12 the pockets of rich people and to prevent poor 13 people from getting what they need. 14
I think it's very accurate. And your efforts to prevent an analysis which would demonstrate that seems to me pretty good evidence that you agree with my conclusion.
We voted for this already, we voted for it once. What are you 35 5/26/99 COM. OF WHOLE - 990249, 253 talking about? When you're voting, you don't you know what you're voting on?
Thank you, Madam President. Mr. Fina, how did the figure of 500 jobs over and above the existing citywide employment come up? Is there some formula or was that determined -- how was that determined?
The developer was proposing in this particular project to create at least 400 new jobs.
The developer has other proposals. In fact next Wednesday, there will be another TIF known as the Ashton TIF public hearing in which we will talk about this developer doing an additional expansion and new creation there. And what we did was, we looked at the job creation that the developer thought 36 5/26/99 COM. OF WHOLE - 990249, 253 optimistically from both projects that he could achieve, and then we took a conservative number, a fair number, and came up with 500. At that time, we thought the developer had 3,000 jobs in the city of Philadelphia. The developer has been expanding jobs over the past 6 months, creating more, and it's at 462. So we've really pressed the developer hard to say, "You must create in 4 years another 500 jobs." It was somewhat negotiated with Cardone Industries and PIDC acting on behalf of --
Mr. Fina, I believe that at the briefing, if my memory serves me correctly, you did indicate that just about all of the employees do reside in the city of Philadelphia?
Madam President, point of order. Could I ask that these two bills be considered separately? I'm just getting confused when we run from Whittaker to St. James and then back again. I think each bill ought to stand on its own merits and ought to be debated separately, 37 5/26/99 COM. OF WHOLE - 990249 and I would ask that they be considered one at a time.
Okay. So we will now question the Whittaker TIF. Councilwoman, are you finished?
Councilman Nutter, is your questioning on the Whittaker TIF?
Does anyone have any questions on the Whitaker TIF?
We know quite a bit of information, Councilman. They are a long-term business that has grown from a few hundred jobs over the last 15 years to the 4,262. We know that they had a -- they had a very diverse labor force. We know they're a blue-collar worker. They're the fastest-growing blue-collar worker paying living 38 5/26/99 COM. OF WHOLE - 990249 wages in the city of Philadelphia. They've been an excellent corporate citizen, and they would like to maintain a low-key profile. But I could go on and talk about details. If you could be more specific, I could tell --
Well, tell me something about what you know about their labor history, for example. And then when you finish that, tell me what you know about their practice of bringing ministers of probably various faiths in aimed to conduct religious services during working time.
They have very good labor relations, Councilman. That's what I know. They do have, at the request of their employees, have various chapels because they do shift work, so they have various chapels and they have an extended work week at times, so they have various religious chapels on their premises as a private enterprise. So that way, their workers can worship when it's convenient. To give you a mix of their current 39 5/26/99 COM. OF WHOLE - 990249 employment: 28 percent is Asian, percent is African-American, 33 percent is Hispanic, and 26 percent is "other."
Do you know anything 6 about their labor history, the efforts by labor 7 organizations to organize and what the result 8 was? And do you know anything about the protests 9 by employees of their practices of bringing in the 10 religious ministry and compelling people to 11 participate in religious observances during 12 working time? 13
I know they have not violated anyone's Constitutional amendments.
I know they have not violated anyone Constitutional amendments.
Because they have not been cited by the federal government for doing this.
That doesn't mean 40 5/26/99 COM. OF WHOLE - 990249 they haven't done it; it means that they have -- that there may be no proceeding which found that they had done so.
Well, there would be no way for any of us, sir, to know that unless someone brought that case through the judiciary system.
Right. I'm raising the issue of the desirability of a company that engages in the kind of practices this company engages in.
Well, I'm telling you, it is my understanding that they require the attendance by workers at religious observances taking place on company time, and that workers get paid to attend those services.
And that is not as a result of worker request, but as a result of company requirement.
And I hear Velma Diaz behind me saying that is not true, they 41 5/26/99 COM. OF WHOLE - 990249 are not required to -- is that what you're saying?
You said there's somebody here that will testify from the company?
Well, I said there's somebody from the company here. It would be up to Madam Chairwoman whether she wants them to testify on this issue. But they have said that it is not true.
Well, I can just tell that you that there is a sharp difference of opinion among their employees as to whether that is true or not. And I don't think that's a company that ought to be the beneficiary of any kind of public funding.
Miss Diaz is saying she knows the chaplain and she knows people 42 5/26/99 COM. OF WHOLE - 990249 who work there and that it's absolutely untrue that people are compelled to take part in any religious service.
There is someone from Cardone here, and they have advised me that those statements, Councilman, are totally and completely untrue. And as I said, there is --
I can tell you flatly that I do not believe them for a moment, having been involved in matters, you know, in investigating those matters some years ago and having met with many employees.
Of that company. And I know that they're right on Rising Sun Avenue, just south of Adams Avenue. I live relatively close to that area.
Madam Chair, I appreciate being recognized. I just want to say to the people from Cardone who are here, on behalf of me as a Councilmember of this body, I want to apologize 43 5/26/99 COM. OF WHOLE - 990249 for any of this that's happened over the last few minutes. I just appreciate you being in the city, growing the way you've grown and giving your employees the opportunities to express their religious faith as they see fit. I hope you stay here and I hope you take no offense to what was just said 'cause it's just totally --
I'm speaking for myself now, I'm speaking for myself now, if I may. I apologize for any misunderstanding that one member of this Council may be portraying to you that this body perhaps as a whole does not feel. And I thank you for your commitment and investment in the City. Thank you.
Point of order. I don't believe Councilman-at-large Kenney has any right to act on behalf of this body. I do not know that he has been elected to any representative position so I don't know how he can apologize on behalf of --
I'm speaking for 44 5/26/99 COM. OF WHOLE - 990249 myself. (Unintelligible, parties talking over each other.)
I think Councilman Kenney said he was speaking for himself. That closes this issue. I would also like to make a statement that Councilman Mariano called earlier and said that he had a funeral to attend and that he would try to get here as soon as possible, and he was very much in favor of the passage of this bill. At this point in time, the Chair recognizes Councilman Nutter.