COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING & MEETING BEFORE THE COMMITTEE ON RULES - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, March 17, 1998 9:50 a.m. - - - BILL 980024 - Ordinance approving redevelopment proposal of the Redevelopment Authority of the City of Philadelphia for the redevelopment of a portion of 49th and Locust Redevelopment Area, 49th and Locust Urban Renewal Area, being the area generally bounded by Walnut St. on the north, So. 50th St., and St. Bernard St. on the west; Locust St. and Spruce St. on the south; and So. 49th St. on the east; approving urban renewal plan and determining that such plan and redevelopment proposal conform to general locality plan and make adequate provision for individuals, business concerns and families who are displaced; determin- ing the necessity for changes in and for zoning, streets, alleys, public ways, street patterns, location and relocation of public utilities; determining that urban renewal plan and redevelop- ment proposal prohibit discrimination because of race, color, creed, sex, sexual orientation, national origin, ancestry, or handicap; declaring that condemnation is not imminent with respect to the project, except as otherwise expressly provided for in the proposal; and declaring the redevelopment undertakings in the project to be an important part of the City's program to remove and prevent the spread of urban blight. PRESENT: COUNCILMAN JAMES F. KENNEY, Chairman COUNCILMAN DAVID COHEN COUNCILWOMAN ANNA CIBOTTA VERNA COUNCILWOMAN DONNA REED MILLER COUNCILMAN W. THACHER LONGSTRETH - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 I N D E X Bill No. 980024 Noel Eisenstat, Executive Director, Redevelopment Agency. . . . . . . . . . . . . 4 Blaine Stoddard, Executive Director, Partnership CDC in West Philadelphia. . . . . 13 Betty Revis, President, Walnut Hill Community Association . . . . . . 14 3 Committee on Rules, Bill No. 980024 P R O C E E D I N G S
Good morning, ladies and gentlemen. This is the Council Committee on Rules, which will hear testimony on Bill No. 980024, which is an ordinance approving the redevelopment proposal of the Redevelopment Authority of the City of Philadelphia for the redevelopment of a portion of the 49th and Locust redevelopment area, 49th and Locust Urban Renewal Area, being the area generally bounded by Walnut Street on the north, South 50th Street, and St. Bernard Street on the west; Locust Street and Spruce Street on the south; and South 49th Street on the east; approving the urban renewal plan and determining that such plan and redevelopment proposal conform to the general locality plan and make adequate provision for individuals, business concerns, and families who are displaced; determining the necessity for changes in and for zoning, streets, alleys, public ways, street patterns, location and relocation of public utilities; determining that the urban renewal plan and redevelopment proposal prohibit discrimination because of race, color, 4 Committee on Rules, Bill No. 980024 creed, sex, sexual orientation, national origin, ancestry, or handicap; declaring that condemnation is not imminent with respect to the project, except as otherwise expressly provided for in the proposal; and declaring the redevelopment undertakings in the project to be an important part of the City's program to remove and prevent the spread of urban blight. And, Noel, identify yourself for the record.
Good morning. My name is Noel Eisenstat. I'm the Executive Director of the City's Redevelopment Agency. I have provided you written testimony concerning Bill 980024. I would just like to briefly explain my testimony; that this is for the acquisition of one property known as the Chatham Apartment Building. This building has been vacant for numerous years. And there was a proposal that the City of Philadelphia, through its Office of Housing and Community Development sought funding in 1993 and 1994 for the rehabilitation of this building, which is also a part of the City of Philadelphia plan for West Philadelphia published by the City 5 Committee on Rules, Bill No. 980024 Planning Commission in 1994. There have been numerous attempts to acquire this property through mortgage holders and negotiations, which have been unsuccessful. This property more recently spent considerable time in bankruptcy court. And after intervention by the Law Department to dismiss the bankruptcy, the Redevelopment Authority and the City's Office of Housing and Community Development wish to move forward to acquire this property through urban renewal taking. At the end of the day, this property will house approximately 40 units of housing and be rehabilitated up to current codes and standards. This property is a very specific blight on a neighborhood that has undergone substantial investment over the year. Do you have any questions?
The developer is actually a joint venture of the Ingerman Group, the West Philadelphia Partnership CDC, along with 6 Committee on Rules, Bill No. 980024 the Walnut Hill Community Association.
Fine, thank you. Are there any questions for Mr. Eisenstat? Councilman Cohen.
The amount of funds -- the project, as originally proposed, which goes back a few years ago and has a number of components, the acquisition cost of the property is, I think, around 2 to 300,000 -- I'm sorry. The total development cost is about $5.4 million. The total construction cost per square foot is about $68 a square foot. Construction cost per unit is about $86,000 per unit. This is a relatively sound structure. Although the actual -- although the building needs substantial rehab, the building itself is a relatively solid structure.
It's about $86,000 per unit. 7 Committee on Rules, Bill No. 980024
Generally families and individuals who meet the requirements of the low- income housing tax credit, which are formula-based at about 60 percent of families who make approximately 50 percent of median income.
Well, can you specify in general terms what that means? Does a family have to have an income of 20, 30,000, 40,000, or thereabouts?
Those numbers change annually. And I would tell you that -- I would have to -- let me give you an exact schedule per family. The numbers are changed annually, but I would tell you it's substantially less than that. I would think a family of 4, probably families who make anywhere between and $27,000 20 a year. But let me get you an updated schedule 'cause it recently changed.
That sounds like a low figure. To what extent -- or is it intended that the rents received will pay all of the costs? Or is this a federal subsidy? And, if so, 8 Committee on Rules, Bill No. 980024 to what extent is it subsidized?
There'll be two forms of subsidy involved in this project. There'll be a CDBG loan of a maximum of $1.5 million, which has been --
-- which would represent no more than approximately 27 percent of the entire development. However, that number will probably be adjusted because the anticipated tax credit -- this was based on the original analysis when we initiated the project a number of years ago. To offset that, the --
Could we have an updated analysis? I don't know what it means when you say this was based on the original --
Well, let me just -- 9 Committee on Rules, Bill No. 980024
-- so you'll know what question I'm trying to get an answer to. You indicated that this project has been around for a number of years so that I assume that the costs have changed over the years and that there must be a current update. So when you talk in terms, I'd like to know what that means today. Is it 1-1/2 million of public funds or is it 5.4 million that's involved?
We cap our public funds in projects like these at no more than 1.5 million. The reason that we wouldn't have a fully updated schedule today is because we have no 19 capacity to inspect the buildings because we are not owners of the building, and this has been a relatively litigious owner. We believe that --
It trades by a 10 Committee on Rules, Bill No. 980024 partnership name that I -- unfortunately it escapes me. It's now. . . I'd have to double-check the name. It's an owner that has a history of a fair amount of litigation as it relates to zoning codes and property issues in the City.
Perhaps I misunderstood you. I understood, from what you've testified to, that we've already purchased the property and that the cost was something like 3 or $400,000.
No, that's what we estimate the cost will be; we have not purchased the property. The purpose of today's bill before Council is to allow the Authority to acquire the property through an urban renewal taking process.
It involves this ordinance that -- submission of a redevelopment plan for this building that was adopted by the 11 Committee on Rules, Bill No. 980024 Redevelopment Authority, by the Planning Commission, and then introduced by Councilwoman Blackwell, and after consideration of a public hearing, as required by the Urban Renewal Statute. And if Council then adopts this ordinance, the Redevelopment Authority could then proceed with a formal appraisal and then acquire the property through eminent domain.
I see. And if the owner disputed the amount that was involved, he could go through a court proceeding?
He would start at a Board of View hearing and would be given, under State statute, a de novo or an automatic appeal to a Court of Common Pleas to challenge cost. The owner --
But we would have the right to proceed in the meantime?
Correct, although the owner could also challenge the procedural aspects of the acquisition as well.
Well, my questions are not aimed at any opposition to the development 12 Committee on Rules, Bill No. 980024 'cause I think it's a great thing. I'm just trying to find out what the financial base is.
Yeah. Would you like me to explain the rest of the federal subsidy?
There are really two subsidies. There is the CDBG funds I had previously mentioned, as well as the low-income housing tax credits that the project applies for through the Pennsylvania Housing Finance Agency. The tax credits, along with the subsidy, along with other equity, and a first mortgage, support the total development of the building, which is at about $5.4 million.
Well, perhaps, Mr. Chairman, we can get additional information. I have difficulty in understanding how families with an income level that you've stated could meet this -- you know, could meet the financial test of making this work. But I'd appreciate it if you could furnish to the Chairman an updated explanation of how it's going to work.
Thank you very 13 Committee on Rules, Bill No. 980024 much.
Thank you, Mr. Cohen. Are there any other questions for this witness? (No further questions for the witness.)
Yes, sir. The Chair calls Mr. Blaine Stoddard and Betty Revis. (Blaine Stoddard and Betty Revis come forward.)
Good morning. Would you please identify yourself for the record and proceed with your testimony.
My name is Blaine Stoddard. I'm Executive Director of the Partnership CDC in West Philadelphia. 14 Committee on Rules, Bill No. 980024 With me is Betty Revis, the President of the Walnut Hill Community Association, in which this property is located, the property in question.
I did not have any prepared statements today. But as the Director of the Partnership CDC, we have a community strategic plan that we have been working on for five years in the Walnut Hill Community. That plan has been accepted by the Planning Commission and by OHCD (Office of Housing and Community Development) and the Redevelopment Authority. And in that plan, this building, the Chatham, is the last remaining major vacant structure in our target area, which runs from 46th Street to 52nd Street, from Market to Spruce. And so we support this urban renewal area. And we strongly support and ask that the Rules Committee approve it. Just on the aside, in terms of what our real estate interests are, the Partnership CDC owns 4912 Locust Street, 4913 Locust Street, 216 South 49th Street, as well as we have other real 15 Committee on Rules, Bill No. 980024 estate interests in terms of our home ownership initiatives in that area with the Office of Housing and with the RDA. At this point in time, even though we're fixing up -- we're rehabbing most of these buildings for first-time home buyers, we cannot fix up some of the adjacent properties because we can't sell them because of the blight that's been created by this building known as the Chatham at 49th and Locust Streets. And with that, I'll end our testimony and take any questions that you might have.
Thank you very much for your testimony. Ms. Revis, would you like to offer anything in addition to Mr. Stoddard's testimony?
Thank you for being here this morning. Are there any questions from other -- Council Member Cohen.
I've been in the 16 Committee on Rules, Bill No. 980024 business for five years, the CDC business. Miss Revis might want to answer that question. It's been vacant as long as I've been around.
Thank you very 9 much. 10 Are there any other questions for these 11 witnesses? 12
Thank you very 14 much. 15 Is there anyone else in the room to 16 testify on this bill? 17 (No response.) 18
Seeing none, that 19 will conclude the business of the Rule Committee's 20 public hearing. - - -
We will now convene a public meeting. And the Chair recognizes Councilwoman Verna for a motion on Bill No. 25 980024. 17 Committee on Rules, Bill No. 980024
Thank you, Mr. Chairman. I move that Bill No. 980024 be reported out of committee with a favorable recommendation; also a recommendation that the rules of Council be suspended so to as to permit first reading at our next session of Council. (Duly seconded).
All in favor? All opposed? There are none opposed. Bill No. 13 980024 will be reported out of this committee with a favorable recommendation, and an additional request will be made for rules suspension to allow for first reading at our next Council session. That concludes the business of the Rules Committee. The Committee of the Whole is starting shortly. Thank you. (Adjourned at 9:59 a.m.) - - - 18 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Tuesday, March 17, 1998, were reported and accurately by me, and that this is a correct transcript of same. RE: Committee on Rules Bill No. 980024 __________________________________, JOSEPHINE CARDILLO, RPR