I don't know what their basis was. And you and I have had a number of conversations about this. I don't know what their basis was for recommending the repealing the non-utilization tax. I'm going to assume that no one 117 Whole - Bills 040255, et al - 5/18/04 remembered or possibly did the research to realize that you had made an amendment to the bill in 2001. I think it's inappropriate to repeal the non-utilization tax, especially if you're going to come back with another piece of legislation to make sure that it actually gets enforced. With regard to the TRC and whether they looked at tax abatements, TIFs, KOZs and the like, I believe it was within their charge... I do not remember what they said about any of them, but I don't know that any of them have to do with tax rates or lessening the tax burden on residents, people who work here, and people who do business here. I don't even recall if there's a specific recommendation on those particular issues, which may have been the reason that you did the resolution that you did. I don't recall.
That wasn't the reason I did the resolution. 118 Whole - Bills 040255, et al - 5/18/04
And I don't know, because I didn't see anything in any of the documents that referenced their analysis of the existing...
My question today is essentially, if we're going to look at a more comprehensive approach, and referencing several occasions throughout this hearing process, individual concerns about our targeted approach on these various tax incentive programs, should we, in fact, not look at possibly changing, terminating or doing whatever to some of those programs that currently exist?
I understand that. But none of those programs have anything to do with the wage tax, none of 119 Whole - Bills 040255, et al - 5/18/04 them.
Okay. Well, that's not the only tax in front of us. They don't have anything to do with --
I said we're talking about a comprehensive package. I'm simply referencing a particular part of that comprehensive package.
I understand. I don't think -- I think the report is what it is and does, you know, speak for itself. They gave us 13 bills. And, you know, they got introduced. We're in a public hearing. And we'll do whatever we're going to do with them. And if there are other hearings about TIFs, KOZs, KOIZs, Empowerment Zones or anything else that we come up with, tax abatements and the like, you know, that's 120 Whole - Bills 040255, et al - 5/18/04 kind of what we do for a living.
You're welcome. The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President. And I don't want to belabor the record much longer, and appreciate you folks sticking around. But I want to engage in this because of the issue of the tax abatement. And I think it speaks to the very issue of creating an incentive, creating an opportunity for a business and investors to do things in the City of Philadelphia. And I hesitate sometimes to talk about the ten-year abatement, primarily because I don't want anyone to be of the opinion that I'm out promoting myself because I was the sponsor of those bills. But since someone else raised it in 121 Whole - Bills 040255, et al - 5/18/04 this Council, I think it's important to understand that very similar to the tax reform package that we're debating now, which basically says we will reduce certain taxes in certain areas and certain categories, in the hope that it will encourage and stimulate additional business, create more jobs which will increase revenue, but for the abatement which was a tax cut, call it what you want, those buildings, the conversion piece in 1997 would never have been converted to useful buildings. It was a bold, a dramatic step that we took back in 1997. And at the time I remember then Mayor Ed Rendell wasn't really warm to the idea at first. There were a number of members of Council who expressed some concern that it would be lost revenue to the School District, et cetera. But we made the case that if we don't do something now -- and this is back in 1997 -- those buildings, those empty 122 Whole - Bills 040255, et al - 5/18/04 buildings that are throughout the City and in particular Center City, during some great times under the Rendell Administration, had not yet been put to use. They were sitting there vacant. The bill passed in '97. We're three years away from getting the full tax benefit of that legislation. But as a result of that, some 70-odd buildings are now occupied. They were put to use. People are residing in then. The majority of the people who reside in them were not Philadelphia residents in the first place. So I kind of look at that abatement bill, and the bills before us in the Tax Reform Commission's report, very similarly. What do we need to do to encourage development, to create an environment that will encourage people to stay, grow, or come into the City. It's an incentive. Call it what you want. There's a lot of tags you can put on -- names you can put on it. But it's an incentive. 123 Whole - Bills 040255, et al - 5/18/04 And I think what we did in '97, we all know the results of that. And Councilman Clarke, you just spoke to a considerable amount of conversions that took vacant buildings in your District and made those into useful buildings. And they're on the tax roll. And a lot of good things are happening. So, I don't -- See, for me it's very simple: We either do something, and we put the carrot out there, and we invite people to come in and taste the water, test the water, if you will, is the same thing we did in '97. That's why I support tax reform, but for no other reason. Because if we don't -- And I sound like a broken record because I said this earlier today, said it last week when Mr. Schwartz testified. The status quo is unacceptable, should be unacceptable because history has proven that we are not doing anything, in terms of job growth, because of this tax structure that we have been strangled with 124 Whole - Bills 040255, et al - 5/18/04 for the last five decades or so. So, why not take this opportunity which I don't even consider a risk because we can always pull back on these bills if we find that there's some dire consequences as a result of our enacting these tax bills going forward. We can always pull them back, adjust them, repeal them, call it what we want. This is not set in stone for perpetuity.
Let's give it a chance, to see if it will make a difference because we certainly know, again, to do nothing will result in nothing but further job losses for the City of Philadelphia, translates into less revenue. And more rec centers, additional rec centers, additional cultural institutions and the like, all the things that we're talking about this year will only be exaggerated in the years going forward. Thank you, Madam President.
Thank you. The Chair recognizes Councilman 125 Whole - Bills 040255, et al - 5/18/04 Kenney.
Thank you, Madam President. I just want to make a statement. Governor, I appreciate you coming back in here today and clarifying the position of the Chamber. I think we're much more clear now on the Chamber's position; respect certainly the Chamber's position in this issue, and pledge to do my best to get all or most, if not all, of these bills passed in a timely manner. Do you know what the largest employer is in the City of Philadelphia, who the largest entity is? I believe it's the University of Pennsylvania. GOVERNOR SCHWEIKER: You got it right.
And I also believe that probably the second largest employer in the City of Philadelphia, I think, is the City of Philadelphia. GOVERNOR SCHWEIKER: Yeah.
If not the 126 Whole - Bills 040255, et al - 5/18/04 School District of the City. Doesn't -- Doesn't that -- those two facts alone allow you to draw some conclusion about what's happening to our economy, what's happened to our economy over the years? GOVERNOR SCHWEIKER: Yeah. I think that they reveal two things. I think one is a positive and one you have to watch. The positive is that we are attractive in an entire world when it comes to world class medical care and life sciences and biotech development, of that kind of thing. And U of P, along with the University of Pennsylvania is -- the hospital, along with the University is, unlike 50 years ago, a big, big, big economic engine.
But it is a nonprofit, so to speak. GOVERNOR SCHWEIKER: Yeah, but -- yes, they are, in a sense. But when you look at their impact and how they endow and bring about commercial and company spinups 127 Whole - Bills 040255, et al - 5/18/04 and job growth, they're a big, big economic engine. But yeah; on the side, Councilman, the idea of the public, the government's being the biggest employer, yeah, it's something to watch. But I would tell you across the Commonwealth, and to a great extent in other jurisdictions, that is often the case where the public enterprise is a big employer.
Yes. I guess -- And I've been here since '92, and I think since '95 we've been tinkering with the tax rates in a small, you know, incremental way, both business and wage. And also, we've been doing things like TIFs, and abatements, and KOZs, and KOIZs, KOEZs. Your Administration was helpful in expanding those programs. And a lot of the criticism that we've gotten or we've heard as a result of doing these kind of targeted tax cuts is that it's not fair. 128 Whole - Bills 040255, et al - 5/18/04 It may be fair and important and helpful to get the project going or to get that thing built or to get that building or to keep somebody here, but it's just not fair overall to the business community because we're just helping individual companies and not the entire climate. GOVERNOR SCHWEIKER: Yeah.
And as we've seen, based on -- I guess unofficially yesterday we became the sixth largest city in the country. And I know that there's some apples and oranges comparison there because Phoenix is a much larger metropolitan area, and Philadelphia's metropolitan area has actually grown more than Phoenix has. But our problem, again, as we discussed the other day, is that Philadelphia has a border. And even though the region is growing, the City is shrinking. And even with all the things that we've done, all the things we've attempted 129 Whole - Bills 040255, et al - 5/18/04 to do, whether Council members have agreed with them or not agreed with them, voted for them or against them, it still hasn't worked. We're still losing our population, and we're still losing our jobs. And I sit here, and I listen to very sincere individuals in this Council who have a sincere concern about social welfare programs, the poor, people who are in need. But I honestly believe that over the next five, seven, ten years without a change in anything we're doing, a drastic change, there's not going to be any money around for anyone to have any programs to help anyone. And what I would really -- what I really believe is going do happen, if we were to have the courage to pass these bills, is there's going to be some pain, and we're going to take some grief, and we're going to have some complaints. But I would suspect that over a decade, a decade or two, we're going to see those private employer numbers jump. And 130 Whole - Bills 040255, et al - 5/18/04 the people that will be providing the tax revenues to pay for services for the homeless -- and hopefully we can reduce that. GOVERNOR SCHWEIKER: Yeah. COUNCIMLAN KENNEY: Services to people in need; people who, you know, children and youth, all those issues that are a growing burden on any city, that those tax revenues will be coming from private sector employment and not from nonprofit and public sector employment. And I'm willing -- I'm willing to take that chance. And as Councilman DiCicco said and some others have said, we can adjust, we can tinker down the road. But a bold statement -- And this is not business versus, you know, the tax -- This is not business versus poor people. This is not taxpayer versus poor people. These are not fixed income senior citizens who own their homes versus anyone else. This City will not survive without 131 Whole - Bills 040255, et al - 5/18/04 major tax reform. And I think this is not drastic tax reform that we've had. The TRC has done a terrific job in considering all of the factors involved and coming up with a program or a plan that is not drastic. It's not drastic at all. As a matter of fact, it probably could be more drastic. Probably could be more drastic than it is. GOVERNOR SCHWEIKER: Yeah.
So, I think that we get caught up in the micro picture of how we actually do this if we pass these bills, as opposed to the macro picture of what happens to the City if we put ourselves in a level playing field with just the people surrounding us. Just the counties and the state surrounding us, if we can get in a more level playing field, I think we retain those jobs, we attract jobs, we grow jobs, and people who work in the private sector, as opposed to working for the government. So, again, I'll listen to your 132 Whole - Bills 040255, et al - 5/18/04 comment, but I want to thank you for clarifying the position of the Chamber. I think it's very important that you came back here and did that today. GOVERNOR SCHWEIKER: Well, if your point is, to paraphrase, a long-term gain with some short-term pain, then...
Or long-term death. GOVERNOR SCHWEIKER: ...we would agree.
Or long-term death. GOVERNOR SCHWEIKER: Yeah. And I really do think that, as you kind of compare the relative positions of a very dedicated Mayor and a very dedicated Council, it's probably a matter of degree that is the difference, not so much intention and direction. It's a matter of degree. I mean, to be specific, I mean, on the wage tax, the difference between what Mayor Street espouses and what the Council 133 Whole - Bills 040255, et al - 5/18/04 does is relatively small. So, you make a good point. I would just finish, Madam President --
Let me just -- I want to say one other thing. We've gone -- And again, from '95 on, we've gone slow. I mean, some of what we're being cautioned to do now for the Administration and some members of Council who sincerely believe, you know, what they're saying is that we should still continue to go slow. We've gone slow since 1995. GOVERNOR SCHWEIKER: Yeah. Well, that gives --
Time to speed up the train a little built. GOVERNOR SCHWEIKER: Well, it gives me the opportunity to say, yes, if my remarks were reduced to anything last Wednesday, it was that... essentially saying be careful. That wasn't the same thing as saying slow.
I understand. 134 Whole - Bills 040255, et al - 5/18/04 GOVERNOR SCHWEIKER: So it did give me the opportunity to come back and offer that clarity. Councilman Kenney, I just want to mention one other thing, just to end on an encouraging note, as far as what the region and the City, what it can do. You know, Shire Pharmaceuticals is coming to this region. Parenthetically, they will hire Philadelphians soon. And to listen... And their C.E.O. will be here Monday of next week, I believe, for a WHYY event. But to listen to their assessment as to why they've come here is to listen to the game plan for winning economically. You know, as you know, life sciences and biotech, pharm, that's our sweet spot. We can grow it even more. We have to work together. And I think having a more affordable tax model helps that particular cause. But I guess what I'm trying to raise here at the conclusion is that we do have 135 Whole - Bills 040255, et al - 5/18/04 it all. And I don't mean in the proverbial sense. We still have a mighty attractive location in the mid Atlantic area. We've got hard working folks. I mean, we're known for that. We make things and make things well. And you throw in, I think, an important element of the recipe for being competitive and outstanding, a more affordable tax model, we will win. And, of course, to get to that promised land, if you can call it that, there are some tough decisions that the Council would make. And I would offer a final remark, that this Chamber is very eager to work with Mayor Street. Our support of Mayor Street's endeavors on many other counts, and certainly with what the City Council must accomplish, we're in there pitching with you, even though ultimately you've got to make, officially speaking, the final choices and the final decisions. And we thank you. 136 Whole - Bills 040255, et al - 5/18/04
Thank you. Again, we thank you for coming in again. We really appreciate it. GOVENROR SCHWEIKER: Thank you.
Thank you so much. Thank you. Commissioner Tartaglione was due to give testimony on her budget today. However, she's in Harrisburg. She has submitted written testimony which has been circulated to all of the Council members, and a copy will be given to the stenographer. At this time I would like to call upon the Managing Director, please. Good afternoon. Thank you for coming back again this afternoon.
Could I just say one thing before the Council people leave, that I want to thank Governor Schweiker and Bill 23 Sasso for taking up my offer and Sister Mary's offer to go on a tour of our homeless shelters tomorrow or Thursday to 137 Whole - Bills 040255, et al - 5/18/04 see some of the great work we're doing in the City, and some of the great challenges we have ahead of us. Thank you.
Wonderful. The Chair recognizes Councilman Clarke.
Yes. Thank you, Madam President. Good afternoon. Managing Director, in your earlier testimony, I had requested a list, a flow chart of your employees, the hierarchy because there was some confusion in my mind whom reported to whom, and who I needed to contact about a particular issue. And I haven't personally gotten that, but I believe I was told it was forwarded to the Council President today.
I had requested in the earlier testimony a flow chart of the hierarchy of the Managing Director's Office. And it primarily centered around 138 Whole - Bills 040255, et al - 5/18/04 my inability to determine who was in charge of what particular part of the Managing Director's Office who was responsible.
And did I understand the Managing Director to say that I received it today?
I don't see it. Maybe Sharon has it. I'll check. It is my understanding from Sharon Ortiz that she did make copies, and that they have been circulated to each of the Council members' offices.
I'm sorry. I can't hear you. 139 Whole - Bills 040255, et al - 5/18/04
We received some information yesterday which was circulate to all Council members.
-- today was copied and circulated to all Council members.
All right. I can't question you about it because I haven't seen it.
Okay. And Councilman, I'd be glad to sit down with you, if you want, after you've seen it. 140 Whole - Bills 040255, et al - 5/18/04
All right. We are -- Our time is running out on the hearing process. Let me talk to you about another issue.
The vacant lot department... Talk to me about the history of it, and how it was created, how its employees were hired, where they are, who they report to.
I would need help in answering that question because I was not here for the creation of it. But the vacant lot folks report to Tumar Alexander who works with Tom Conway and the whole Clip program. I can't give you the history of it. I would need some help on that.
I don't know. Miss Jones, my Chief of Staff, may have a better answer. 141 Whole - Bills 040255, et al - 5/18/04
Laurie Jones, Chief of Staff, Managing Director's Office. Again, I wasn't here, as the Director wasn't, for the inception of the program. But what our plans are for FY '05 are that the vacant lot crews will be divided up throughout the City geographically. And there will be a number of crews that will report to Tumar Alexander, and a number of other crews report through supervisors to Tom Conway.
As of... During most of fiscal year '04, they all reported to Tumar Alexander.
All of them. Are any of those employees full-time now or receive benefits?
I believe that there's some people who were a part of other programs that were transferred into vacant lot that have benefits, but for the most 142 Whole - Bills 040255, et al - 5/18/04 part no. 3
There are some people that are... who work in the vacant lot program now, who were parts of other programs in the City that had benefits before, that work in vacant lot now, that have benefits. But for the most part, those employees do not.
So are there employees that were hired after current employees who are... temporary -- Well, not temporary. They don't have benefits. And they got hired after the employees who do not have benefits. Now those employees have benefits working in the program. Did you understand that? I know it was kind of a convoluted question.
I'm not sure I understood it. But I would answer you this, that there are a number of employees that do not have benefits.
In that program. It's an issue that we're aware of; we're trying to address.
But there are a number of employees who do have benefits.
Some of which do not have seniority over the other employees.
Can you find out? What I'm trying to understand, if there are individuals who work in their department, the vacant lot, who report to Tumar, how some of these individuals have benefits; some don't. Some of the individuals who have more seniority don't have benefits; and some who have less seniority do have benefits.
We will find out. I thought, but I'm not sure... I can't say 144 Whole - Bills 040255, et al - 5/18/04 I'm a hundred percent correct. I thought it had more to do with position, as opposed to, for example, supervisors. But I'm not sure I'm correct. We will find out the correct answer.
I -- I -- I don't know the answer to that. We will find out. I think... I know that there's an issue with it, and we've addressed -- we've discussed how to address that issue in the context of the budget process.
Well, I think to me there's an issue when some people are getting something and other people aren't. And, you know, when that's always the case, you've got to have clear --
Well, who created that issue? I'm trying to understand... My understanding is there were people who got hired as recent as a 145 Whole - Bills 040255, et al - 5/18/04 year ago. They have benefits. And people who have been working with the program for three or four years have no benefits.
I don't know how that -- how that occurred. I would have to find out for you.
Excuse me, Councilman. Don't we have employees at MOCS, I think. They have a budget of $1.9 million. And we're told that they clean the vacant lots also. Is that so? I believe it's in your budget.
Some of them are assigned to the vacant lot program. That's my understanding.
I don't know. I would have to -- I don't want to sit here and give you answers that I'm not sure of. I would have to go back and find out who has benefits, who does not, and why those that do not, why they don't and why those that do do. 146 Whole - Bills 040255, et al - 5/18/04
Okay. So, let me understand what it is you're getting. You're getting the employee list. If I'm incorrect, please correct me -- and the tenure of the employee, who has benefits, who doesn't have benefits, and geographical location, because I understand you have a number of teams.
And why those that have benefits have benefits, and why those that don't don't.
Okay. I'm sorry. I actually thought I got your chart. Never mind. Actually -- Okay. Well, did -- Unfortunately, I can't have follow-up questions because there are a number of things that you're unclear.
So I'm assuming you'll get whatever -- 147 Whole - Bills 040255, et al - 5/18/04
Thank you. The Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam President. Good afternoon. Topic of discussion, I know, is very dear to the Recreation Commissioner. Camp William Penn. Nothing personal, Commissioner, but I've been on this for a couple weeks now. Last I think we spoke, Mr. Goldsmith, we talked about you were engaged in the investigation of the possible sale and looking for an appraisal. Could you bring us up to date. Is there any information that you can share -- that you may be able to share with us today?
We -- We do not -- I 148 Whole - Bills 040255, et al - 5/18/04 probably misspoke. And I thought that we were further along in the appraisal process than -- than we are. I think we have -- trying to get a ballpark figure, but we're also in the process of retaining or just have retained someone to do the actual appraisal. So I misspoke when I said the appraisal was being done and it would be done shortly. I apologize for that. COUNCILMAN DiCICCO: I understand that. No problem. I appreciate that. But I do really think it's important that we pursue this. When you look at the issues that are before us today, the issue of the Tax Reform Commission and the bills that this Council is deliberating on, and you look at what the Administration says that the gap in the budget will be if those bills were enacted, for this year it would be probably in the area of $3 to $10 million is the shortfall in the budget. So, conceivably, without putting a price on Camp William Penn, if we were to 149 Whole - Bills 040255, et al - 5/18/04 get $10 million for it, that would satisfy the issue for the budget deficit for this year, notwithstanding the other issues that we have to look toward for the future. But just in the simplest of terms, if we sold that asset, we would have enough in return for that sale that would at least get us over the hump for this year, and quite possibly even the second year of the five-year plan. So, that's -- that's the reason for my insisting, if you will, on coming up with the number. Now, we still would have to sell it. We'd have to find a buyer. I understand that. But I really think this is something we need to do, because it really fits into this overall discussion of budget deficit, cuts in services, facility closures, et cetera. I mean, that one place is not the silver bullet, not the magic wand for perpetuity, but it could really help us for the next two, maybe even three years, as we 150 Whole - Bills 040255, et al - 5/18/04 deal with there wage Tax Reform Commission issues that we have in front of us.
I understand. COUNCILMAN DiCICCO: So that's the reason why I keep insisting on that.
I understand. I think your... And I don't know if the Budget Director is in the room here. Rob? But I think you underestimated what the... if all the tax cuts are passed this year, what the '05 problem is. I think it's significantly more than that. But I'd have rather have the... I just want the record to be clear, as I understand it, so we're not... and we understand the magnitude of the problem. The other thing I would say is that... And I always hate to put a number on what we may get in selling something because that sort of becomes a ceiling, then. COUNCILMAN DiCICCO: I understand that. And I misspoke last week or the week before when I said $10 million. 151 Whole - Bills 040255, et al - 5/18/04
Yeah. COUNCILMAN DiCICCO: Not suggesting that that's what it was worth. But that's a preliminary response I got from someone off the cuff who's somewhat familiar with the area --
I just -- COUNCILMAN DiCICCO: -- not necessarily doing an appraisal.
I just heard yesterday that -- an amount considerably less than that, so... But that's why we need an appraisal. But I understand some of that land may not be developable, and so forth, so I think -- COUNCILMAN DiCICCO: Right?
And whatever we receive in that -- And I'm not going away from the basic concept of asset sales -- would be a one-time -- COUNCILMAN DiCICCO: Yeah.
-- as opposed to a recurring thing. COUNCILMAN DiCICCO: I understand. 152 Whole - Bills 040255, et al - 5/18/04 But also... And this, I guess, goes to the Commission of Recreation, Vic Richard, is the cost of maintaining which is $500,000 a year, so you have to factor that in as well. And I understand the Commissioner's sentiments and the fact that young urban kids get to have this great experience. But we have to make decisions all the way around. And for me, if I can keep the pools open for the next year, two years because of some of the sales or at least the reduction in maintaining that facility, the options -- If those are the two options, I would certainly opt to keep the pools open because a lot more kids would get the use of those pools than our being given the opportunity to use Camp William Penn. It's a hard decision but it's one that we have to make --
There's a lot of 153 Whole - Bills 040255, et al - 5/18/04 hard ones. COUNCILMAN DiCICCO: The question was, Mr. Dubow, was that I had posed to the Managing Director that the sale of -- the possible sale of the Camp William Penn, the price of the sale might be around $10 million -- we don't know for sure, but just using that as an arbitrary figure -- would be enough to cover the budget deficit for this... for 2005 which is somewhere around... under $10 million. If the tax cuts -- If the tax cuts that are proposed and the Tax Reform Commission were implemented, what is the negative revenues for the budget?
Let me... There's a two-part answer to that. First, because of the loss of the PGW revenue, there's about a four-and-a-half million dollar deficit before the impact of the Tax Reform Commission proposals. COUNCILMAN DiCICCO: Before --
Before. COUNCILMAN DiCICCO: -- the impact? 154 Whole - Bills 040255, et al - 5/18/04
Before. And our analysis of those proposals, is they'd cost about $15 million in '05. COUNCILMAN DiCICCO: Additional to the four and a half?
Yeah. COUNCILMAN DiCICCO: So it's $20 million in round figures.
$20 million. The other thing to point out is that in the plan we assumed that we will successfully complete asset sales in '05 in January to about $30 million off of them. So for us to do better than planned, we'd have to have more than $30 million in asset sale proceeds during the year. COUNCILMAN DiCICCO: Okay. Thank you for clearing that part of it up for me. I have no further questions. Thank you, Madam President.
Are there any other questions of the Managing Director? Any comments? The Chair recognizes Councilwoman 155 Whole - Bills 040255, et al - 5/18/04 Miller.
Yes. Good afternoon. How many vacant lot cleaning crews do we have left now or how many people? Didn't we start off with 200?
I don't know the answer to that. I'll have to get you the answer. That sounds like an awful lot, but...
Or a hundred. I think it was a hundred, wasn't it? COUNCILMAN DiCICCO: Will you repeat that question again?
It was the number of people that are still with the vacant lot cleaning program. I think it was a hundred, actually. Okay.
Thank you. 156 Whole - Bills 040255, et al - 5/18/04 The Chair recognizes Councilman Cohen.
Yeah. Just one question about billboards, Mr. Goldsmith. Does the City have any policy which supports the notion that no matter what the courts do, we're going to keep billboards going; and if the Supreme Court of Pennsylvania says it's illegal, just ignore it?
No, I don't think that's the City's policy. I think the Mayor's asked the City solicitor and I to recommend to him a policy, but part of that policy will obviously be adhering to whatever the highest court of this Commonwealth says the law is.
Then I should take the matter up with the City Solicitor.
I'm not passing the buck to the City Solicitor, but I think he and I are supposed to make a recommendation to the Mayor on what the -- our policy should be. 157 Whole - Bills 040255, et al - 5/18/04
Well, you know, sometimes those of us that are lawyers have had experiences with the Supreme Court, and maybe for a moment or two we feel we'd like to thumb our nose at them. And then we realize, well, after all, that's the Supreme Court of Pennsylvania, and that would get you nowhere, and it would not be polite. So you overcome that feeling, and you do what the court tells you to do. But the City seems to just feel free to ignore that, because the Supreme Court has found billboards illegal and they -- in certain locations, and it has no impact on what the City does. And the City goes its own way and ignores it, even when the billboard is on City property.
Well, could I ask you and the City Solicitor, you for your part, to look at it? 158 Whole - Bills 040255, et al - 5/18/04
And the City Solicitor. Maybe there's just a lot of mistaken notions about things.
As I indicated last time when I testified, I actually have a tool in my car, which I promised some of you that I would get, that I actually take down illegal signs on utility poles, and so forth, because I think they're blights. So I'm not one personally in favor of billboards, particularly illegal billboards in our City. But that's the recommendation that the City Solicitor and I will make to the Mayor, and be glad to discuss it with you.
Thank you. Any other questions of the Managing Director? (No response.)
Thank you 159 Whole - Bills 040255, et al - 5/18/04 very much.
Thank you. It was my understanding that Council members wanted the Law Department, MBEC and Procurement to come back at the same time. Oh, before... Is that so? Before we do that, do we have someone from the Airport here? Good afternoon.
How are you, Mr. Iszdell? Good afternoon. Thank you for coming back. I was asked for your return. I believe Councilman Nutter had some questions of you, if you don't mind waiting just a moment, please.
Thank you, Madam Chair. Mr. Iszdell, we received a copy of a 160 Whole - Bills 040255, et al - 5/18/04 very large package not too long ago, which represents the... I guess is it a lease agreement between the City and a private company to oversee concessions at the Airport?
Mr. Iszdell, excuse me. You're going to have to identify yourself, please.
Good afternoon. I'm Charley Iszdell, Director of Aviation. And I'm going to ask Deputy Director James Tyrell to assist me in answering your first question.
Good afternoon, Madam Chairwoman. My name is James Tyrell, Deputy Director of Aviation for Property Management and Business Development. Mr. Councilman, there are approximately 153 locations at the Airport under the Marketplace Redwood Concession Program. 161 Whole - Bills 040255, et al - 5/18/04
Okay. And what is the term of the agreement with Marketplace Redwood?
The term of the agreement is years. The commencement 9 date is June 4, 1998. 10
Okay. And are 14 there any provisions in that? You said, 15 again, it's a lease?
And just for the record so I can understand, was that lease approved by City Council?
I do not believe the lease was ever approved by City Council.
Okay. Well, it probably wasn't because it probably did not need to be; is that correct?
Yes, Mr. Councilman. 162 Whole - Bills 040255, et al - 5/18/04
Okay. So you we have a 15-year lease agreement. Commenced June 4, 1998, you said?
And what's the technical term for Marketplace Redwood, in terms of this contract? Are they a master concessionaire? Are they... What are they called?
A developer. Okay. And prior to this agreement, was there a developer for the Airport?
How long was it? 163 Whole - Bills 040255, et al - 5/18/04
The Marketplace Redwood 7 contract was actually executed in 1994. 8 The term, the 15-year term, began running 9 after the opening of the BC Mall, which 10 was -- 11
After the opening of 13 the -- what we called the BC Mall which was 14 the core or the majority of the lease 15 concessions. 16
On June 4, 1998, the BC 164 Whole - Bills 040255, et al - 5/18/04 Mall opened, which represented approximately 33 stores. The lease itself term -- The term commenced as of that date, the secondary term.
So we're talking about an initial term and then a secondary term?
The initial term was from 1994 until the opening of the BC Mall which actually occurred on June 4, 1998, yes. There was not a specific period spelled out in the lease for the initial term.
Well, what was the difference between this initial term, the '94 to '98 time period, and then the 15-year term? I mean, what was the purpose -- What was the significance, I guess, of the BC Mall opening? Why was that relevant?
If I could elaborate, 165 Whole - Bills 040255, et al - 5/18/04 during that initial period, we had a major construction period, during which there was, in fact, no retail mall in existence. We built the mall in the years between '94 and '98. So the way the agreement was originally structured, the 15-year term did not -- was not set to start until that retail mall and food court which is in the core space of the Airport was actually open and ready for business.
Aramark actually had two leases with the City at the time. One was for food and beverage, and one was for retail. They both had different expiration dates. I believe one was in '93 and one was in '95. I don't recall exactly, but they actually were going to overlap the Marketplace Redwood contract.
So, when these leases expired, did you put this developer agreement out to bid? 166 Whole - Bills 040255, et al - 5/18/04
The RFP for a developer was actually issued in December of 1993.