COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON RULES - - - Room 400, City Hall Philadelphia, Pennsylvania Tuesday, February 9, 2010 10:25 a.m. - - - PRESENT: COUNCILMAN JAMES F. KENNEY, CHAIR COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN WILLIAM GREENLEE COUNCILMAN JACK KELLY COUNCILWOMAN DONNA REED MILLER COUNCILMAN FRANK RIZZO COUNCILMAN DARRELL CLARKE COUNCILWOMAN BLONDELL REYNOLDS BROWN BILL 090704 - An ordinance establishing a neighborhood improvement district in an area that generally includes Cheltenham Avenue... BILL 090852 - An ordinance amending Chapter 14-1800 of The Philadelphia Code, entitled "Zoning Board of Adjustment"... BILL 090927 - An ordinance to amend the Institutional Development District Master Plan of the Fox Chase Cancer Center... - - - 2
Good morning, ladies and gentlemen. We now have a quorum and the Council Committee on Rules can begin its hearing on three bills. The first bill is Bill No. 8 090704, which is an ordinance 9 establishing a neighborhood improvement district in the area that generally includes Cheltenham Avenue with boundaries of Wadsworth Avenue on the west and Broad Street on the east, Ogontz Avenue with boundaries of Cheltenham Avenue on the north and 67th Avenue on the south and Wadsworth Avenue with boundaries of Cheltenham Avenue on the northeast and Michener Avenue on the southwest. Who is here from the Administration to testify? Anyone? Whoever is testifying with the Administration. Just for the record, we have a quorum with Councilmembers Goode, Donna 3 2/9/10 - RULES - BILL 090704, etc. Reed Miller, Bill Greenlee, Jack Kelly and Councilman Kenney, who is chairing the Committee on behalf of Council President Verna today. (Witness approached witness table.)
Good morning. My name is Andrew Frishkoff, Director of Neighborhood Economic Development for the Philadelphia Commerce Department. The Commerce Department has previously testified on behalf of this bill. At this point in time, we have no 17 further comments, but we are available for any questions from members of the panel.
Thank you very much for including the record. Any other witnesses to testify on this bill? (No response.)
Any 4 2/9/10 - RULES - BILL 090704, etc. questions from any of the members of the Committee? (No response.)
Thank you very much. We will now proceed to Bill -- also let the record show that Councilman Clarke is also in attendance as a member of the Committee. The next bill is Bill No. 12 090927, which is an ordinance to amend the Institutional Development District Master Plan of the Fox Chase Cancer Center, located at 333 Cottman Avenue, by allowing for the construction of a new building to be used as a comparative medical research facility. (Witness approached witness table.)
Good morning, Councilmember Kenney, members of the Rules Committee. I am William Kramer, 5 2/9/10 - RULES - BILL 090704, etc. Division Director of the Development Planning Division of the Philadelphia City Planning Commission. I am here today to testify on Bill No. 090927, which was introduced by Councilmember O'Neill December 17th, 2009. Bill No. 090927 amends the Master Plan of the Fox Chase Cancer Center Institutional Development District in order to permit the construction of a 25,000-square-foot structure to be used as a comparative medical research facility. The structure will occupy a footprint of 6,000 square feet containing four stories and be located between two existing structures. The new facility will allow for a modernization to a new state-of-the-art facility to continue existing functions already conducted elsewhere on the Fox Chase campus. This amendment is entirely contained in the original campus for the Fox Chase Cancer Center and does not represent an expansion into Burholme Park. 6 2/9/10 - RULES - BILL 090704, etc. The Philadelphia City Planning Commission considered and approved the proposed amendment to the Fox Chase Cancer Center Master Plan at its meeting of November 17, 2009. Bill No. 090927 approves the same amendment and is, therefore, considered consistent with previous policy. Accordingly, the Planning Commission recommends that Bill 11 090927 be approved. At the request of the Law Department, we have a request to change the exhibit. The concern of the Law Department was, the bill was drafted electronically and the original exhibit is not legible electronically when printed out. They have requested that we submit a large copy of the bill to be kept on file with the Clerk's Office for anyone's review that may wish to do so.
Do you know if that requires a formal amendment or just an attachment?
The Law Department 7 2/9/10 - RULES - BILL 090704, etc. indicated it should be an amendment, and I've indicated so in the paperwork.
That concludes my testimony. I'd be happy to answer any questions you may have.
Seeing none, is there anyone else to testify on this bill? (Witnesses approached witness table.)
Good morning, Mr. Chairman, members of the Committee. Carl Primavera. With me is my colleague Darwin Beauvais, and to my right is Gary Weyhmuller, who is the Chief Operating Officer at Fox Chase, who has a very brief statement to read into the record.
Good morning, 8 2/9/10 - RULES - BILL 090704, etc. Mr. Chairman and members of the Committee. My name is Gary Weyhmuller and I'm Chief Operating Officer of the Fox Chase Cancer Center. Fox Chase is one of 40 NCI-designated comprehensive cancer centers in the nation and one of three in Pennsylvania. We provide the highest treatment and care to our patients while providing global leadership and research. Our doctors provide unmatched care to their patients, and our researchers lead the nation in understanding basic mechanisms of normal and abnormal cell development. Fox Chase has a history dating back to 1904 and in the last 100 years has become one of the largest employers in Northeast Philadelphia with over 2,400 employees. Because of its international recognition, Fox Chase has been an internationally recognized center for cancer treatment and prevention, attracting patients, doctors, researchers 9 2/9/10 - RULES - BILL 090704, etc. and skilled employees and funding from around the world to Philadelphia. Our researchers have been recognized for their work with awards and honors, including Nobel Prizes for chemistry in medicine, the Kyoto Prize, the Albert Lasker Award for Clinical Medical Research and the General Motors Cancer Research Foundation Prize and the American Cancer Society Medal of Honor. Today, Fox Chase seeks your approval to amend our IDD, which was previously approved in 2007. Our request stems from us proudly receiving a grant from the National Institutes of Health of approximately $8 million in funding to construct, maintain and promote another cancer research facility on our campus. This grant is a testament to Fox Chase's proud history of being a national leader in cancer research. The specifics of our project include adding a three-story building on our existing campus. Although this is a 10 2/9/10 - RULES - BILL 090704, etc. relatively small project, it is an important part of our ongoing research. Thank you very much for your time and I'll be happy to answer any questions you might have.
I want to take the opportunity to thank you and Fox Chase for your continued commitment to the City despite all that you've been through over the last few years. Just for the record, how many employees are at Fox Chase?
And do you know offhand -- because I think it's been given in testimony before -- the average salary of your employees?
I believe our average salary is somewhere around 60 to 70 thousand dollars.
Not too shabby. And I do recognize -- I mean, I 11 2/9/10 - RULES - BILL 090704, etc. know you've worked very hard with Councilman O'Neill, who is the District Councilperson, and I know you've been through here a number of times and not all of those happenstances have been pleasant for you and your staff, but I can't think of any way else to thank you for your continued commitment to the City. The fact that you're building another building here does make me feel better that some of the thoughts of not being here may be fading, and I can't think of a more medically famous institution in the City, amongst the many that we have, the CHOPs, the HUPs, I don't know if any of them have Nobel Laureates. So thank you again for being here. Thanks for all you've gone through to stay here, and just thanks. We'll get this out ASAP.
Just a point of information. Can you tell me what happened with the lawsuit that involved the parkland?
Well, it's an important question. The Appellate Courts decided that the Orphans' Court was correct and the Park should not be allowed to be either swapped or redeveloped, even though there was serious compensation going to the Park to acquire replacement land. And personally speaking, I think it was not a well-advised opinion, but based on that, I did understand that Fox Chase has abandoned that plan and now they're looking at various other options, the preferred option being to stay in their 13 2/9/10 - RULES - BILL 090704, etc. current location, and they're looking at a variety of configurations, including building up instead of out, that might allow that to happen.
Okay. But at the end of the day, the Appellate Court upheld the original decision?
It didn't go all the way to the Supreme Court of Pennsylvania, which I think would have changed it, speaking for myself, but I think given the long road that they had already plowed to get where they were and it was a distraction to future activity, the uncertainty, so they decided to abandon that aspect and to look at other alternatives. No decision has been made, and I think as Councilman Kenney said, the fact that they're adding to their existing campus with high technology, new buildings is a good indication they see 14 2/9/10 - RULES - BILL 090704, etc. the value of staying here at least in part.
Thank you very much. In your search, I know it's not, again, on your campus site proper, but one of the areas, if you haven't looked at it already, I would urge you to look at the Philadelphia Naval Business Center. The concentration of research and other type of biomedical facilities there, its proximity to the Airport, 95, 76, free parking like a suburban campus location, we'd love to have you in South Philly, and I would urge you to look at those locations also, and PIDC owns a lot of property there. We just want to keep you here and keep you expanding as much as we can. Any other statements or questions from any members of the Committee? 15 2/9/10 - RULES - BILL 090704, etc. Councilwoman Miller.
I'd just like to know in terms of expansion, are you talking about expanding to another location completely or just adding buildings somewhere else?
Well, what's here today is strictly an addition on our existing campus. Ultimately there is a need for newer buildings, and the idea was to have them in a contiguous format, not in a high-rise format. So if it turns out that they need to be low rise, we don't have any more land, so we would have to look for a sister location, maybe at the Naval Yard. On the other hand -- and we have our design team here -- they are looking at building up. Not preferred, more expensive, but building up would allow us to amass the extra space and laboratory and hospital, and we 16 2/9/10 - RULES - BILL 090704, etc. would tear down some of the older buildings, which are 30 years old.
The most important facility that we need to look at next after this small research building is a new hospital. So one of the options that we're considering is to perhaps build a new hospital right next to the existing hospital that we have on the campus, which would mean demolishing one of the buildings there and building a multiple-story structure. But it would allow us to use some of the renovations that we've done in the old hospital and, at the same time, build a new facility that would help us with expansion.
And within the last two or three years, we built a major garage -- we came to Council for that -- and a major hospital addition. 17 2/9/10 - RULES - BILL 090704, etc.
So we are continuing within our own footprint to build. The reason we're here today with this small amendment, we had previously requested money from the National Institute of Health for this and they never approved it, and I think as part of the stimulus package, they came back to us, without even our invitation, and they said, Remember that project, we have money. So given that, we're now going to leverage other funds so we can make it happen.
Good morning, gentlemen. I simply want to underscore Councilman James Kenney's remarks and say thank you as well. I 18 2/9/10 - RULES - BILL 090704, etc. actually toured the Fox Chase Center at the request of Councilman Brian O'Neill now three years ago. So to see that your willingness to circle back and, as he indicated, stay in the City is always huge and something we don't take for granted from any of our business or civic or corporate residents of the City. Thank you very much for your testimony.
And also I know that you and Councilman Kenney are both involved in LEEDs. The grant does specify that they be LEED certified, and we are going to be.
Thank you. Any other comments or questions? (No response.)
Is there anyone else in the room to testify on 19 2/9/10 - RULES - BILL 090704, etc. this bill? (No response.)
Thank you. The next bill is Bill No. 6 090852, which is amending Chapter 14-1800 of The Philadelphia Code, entitled "Zoning Board of Adjustment," to provide that the Zoning Board of Adjustment shall require any persons seeking a variance from the terms of Title to be current 12 on payment of all taxes imposed under 13 Title 19, under certain terms and 14 conditions. The Chair recognizes Councilmember Rizzo for a statement.
Thank you, Mr. Chairman. Mr. Chairman and members of the Rules Committee, good morning. As we all are too well aware, our city is facing yet another serious budget deficit. Although the economic downturn that severely impacted our entire nation appears hopeful, to have already hit its 20 2/9/10 - RULES - BILL 090704, etc. low point, we are not yet out of the economic woods. Bill No. 090852, the subject of today's hearing, will provide the City with tools that can be used efficiently to recover monies that are rightfully due to the City. As introduced on November 19th, this bill would provide that the Zoning Board of Adjustment would not grant any application for a variance unless the property owner submitted proof from the Revenue Department that the applicant's taxes are current. At a civic association meeting I attended last fall, Ms. Maureen Greene, a constituent who will be testifying today, made a suggestion that gave rise to this bill. I ask her to stand and be recognized. Thank you. The great majority of our citizens are hard-working, law-abiding individuals who pay their city taxes, but tax deadbeats don't deserve the privilege 21 2/9/10 - RULES - BILL 090704, etc. of a variance. Those who pay their taxes should be able to seek variances. I understand the Administration has amendments that would broaden the restrictions on access to the Zoning Board of Adjustment for tax deadbeats. At the conclusion of today's testimony, I hope that all my colleagues on the Rules Committee will see fit to move this forward with amendments that are being considered. Thanks.
Thank you very much for your testimony. Anyone else have any comments before we start the witness list? (No response.)
Thank you. Please identify yourself for the record, whoever is going to testify.
Good morning, Chairman Kenney and members of the Rules Committee. I am William Kramer, Division Director of the Development Planning 22 2/9/10 - RULES - BILL 090704, etc. Division of the Philadelphia City Planning Commission. I am here today to testify on Bill No. 090852, which was introduced by Councilmember Rizzo on November 19th, 2009. Bill No. 090852, as introduced, would amend Chapter 14-1800 of the Philadelphia Zoning Code by requiring all property owners seeking zoning variances to be current in their municipal taxes or have a payment agreement with the City. The bill would require the applicant to get a certification from the Department of Revenue to certify that all of the property owner's Title taxes are 17 current or subject to a payment agreement 18 in order to get the variance. 19 In reviewing the proposed legislation, several concerns were raised by the Philadelphia City Planning Commission. First, as written, the provision is limited to zoning variances and, therefore, would not apply to instances where a special use permit or 23 2/9/10 - RULES - BILL 090704, etc. zoning certificate is requested. Second, the Commission noted that if a property owner is tax delinquent, applications for special zoning permission sought by a tenant in that property would be delayed even if the tenant had no legal responsibility for paying the taxes. The Commission also noted that if the tax certification process did not yet exist, implementation of the program could slow down the development approval process. To address these concerns, several meetings and discussions were held with the Department of Licenses and Inspections, the Department of Revenue, the Law Department and representatives of Councilman Rizzo's office. The result is a proposed amendment to the bill, which I have submitted to the Clerk for your consideration. The amendment specifically addresses the first two concerns of the 24 2/9/10 - RULES - BILL 090704, etc. Commission. First, the amendment would make tax certification requirement applicable not only to applications for variances but also to applications for special exceptions, special use permits, ZBA certificates and temporary use certificates. Second, the amended bill would provide that if a tenant makes the application for the variance or certificate, the tenant need demonstrate only his or her clean tax status with the City and not also that the property owner is entirely free from any tax liability, although the tenant would still need to show that no property taxes are due on the specific property for which the special zoning treatment is requested. The Department of Revenue and the Department of Licenses and Inspections have been addressing the third issue relating to making available a system for tax certification, and I have been advised by the Department of 25 2/9/10 - RULES - BILL 090704, etc. Revenue that there will be no problem in having that system in place well before the bill is effective. The Philadelphia City Planning Commission at its meeting of December 8th, 2009 recommended that with these changes, Bill 090852 be approved and the recommendation has been formally submitted to Council. That is the conclusion of my testimony. I will be happy to answer any questions of the Committee at this time.
Thank you very much for your testimony. Any questions for Mr. Kramer? (No response.)
Thank you very much. Whoever is next, please identify yourself for the record. Mr. Haigler, are you offering testimony?
I am not offering testimony. I'm Otis Haigler, Jr., Director of Legislative Affairs for the 2/9/10 - RULES - BILL 090704, etc. Department of Licenses and Inspections. Mr. Kramer offered the Administration's testimony. I'm here to provide any answers to questions that might relate to the departments.
Thank you very much. Mr. Breslin, do you have any testimony today?
No, I have no 12 testimony. I'm just here to -- Frank Breslin from Revenue -- to answer any Revenue-related questions.
Thank you, Mr. Chairman. Good morning, gentlemen. First of all, is there any concern -- is that easily verifiable between your two departments if people owe taxes or not? Is that hard to determine or would that be any burden on anybody?
It's not an easy 27 2/9/10 - RULES - BILL 090704, etc. task, but it's not difficult to determine. The Department has a tax status certification process that they utilize currently, and that's been a successful program.
What about issues like if there's some appeal to the Tax Review Board or something? I mean, I guess if the person shows that, that that would be --
If a person has a valid appeal or a person is in a payment arrangement, they're considered compliant.
One other thing. I know there will be some other testimony about this and we got some letters about it, and I don't know if any of you gentlemen can answer this. I guess it's more a legal question. There seems to be a question about whether we have the right to do this. Now, as a non-lawyer, I think variances or permits are not 28 2/9/10 - RULES - BILL 090704, etc. entitlements, so I don't see why we couldn't. But, Mr. Kramer, was that ever discussed at the Planning Commission, just the legality of this?
It certainly was discussed. Several members of the Commission are in fact lawyers by profession, so certainly there was some concern about the legality of this. I would defer to the Law Department as to a final ruling on that, as I am not an attorney myself.
In a de facto sense, the Zoning Board already does check your tax status when they're adjudicating cases before them. That's not quite the same as what this bill is proposing, but they do certainly look into the matter at this time.
Thank you. 29 2/9/10 - RULES - BILL 090704, etc. Mr. Breslin, it's whose responsibility to get the tax clearance certificate? I mean, do you have to -- when you appear to apply for the variance, do you need to present a tax clearance certificate at that time?
In this case, I would envision it being that the Department of License and Inspections would be able to check the taxpayer's status.
At the desk. What we're working on right now is, we've developed a computer -- a web-based system where you enter the taxpayer's information, and essentially what comes back is a clearance or not clear, and in a not clear situation, they would be forwarded to Revenue.
Which taxes are examined to be in compliance? Like if I want to build a strip mall or I want to build a small office building and I need a variance and I appear at the desk to do whatever paperwork I need for the variance, which taxes are reviewed to determine clearance?
Business tax, real estate tax, wage taxes. It depends on what taxes that particular entity that's seeking the variance is set up for. So if they're set up for business taxes, then we would be checking them. If it's a business, we'd be checking them for business taxes.
Would this apply to residential variance requests also?
Do we have any idea how many variance requests the Department of License and Inspection receives each year?
Otis Haigler, Jr., Director of Legislative Affairs. Roughly in the area between 1,800 and 2,000 variance requests per year.
Thank you, Mr. Chair. One quick question. If a person comes forth and wants to put in for a zoning variance and it comes up that that person has delinquent taxes, they make a tax agreement to pay the City, they get the variance and then six months down the line they break their agreement. What happens? Is there a revocation process in place? 32 2/9/10 - RULES - BILL 090704, etc.
Again, Otis Haigler, Jr., Director of Legislative Affairs. No, we don't have a revocation process in place to revoke a permit that was issued based on the fact of a variance. If you have your permit, you have your permit.
Permits are not renewable like licenses. Licenses are renewable where you can deny the renewal of a license at the next license cycle period, but as far as a permit, once the permit is issued, that's a matter of right to do whatever you're going to do.
Okay. I'm just asking the question. Unfortunately, that will probably happen in some instances. Thanks, Mr. Chair.
Thank you very much. 33 2/9/10 - RULES - BILL 090704, etc. Any other questions for these witnesses? (No response.)
Seeing none, thank you for your testimony. Maureen Greene, please. (Witness approached witness table.)
Good morning. Please identify yourself for the record.
I wish to sincerely thank Councilman Rizzo for listening. It's unfortunately not so common an occurrence that citizens actually feel that we're being heard, but you listened to my exasperation and not only acted as if you understood my frustration, but immediately acted upon it. I have to say that that is most 34 2/9/10 - RULES - BILL 090704, etc. impressive, Mr. Rizzo.
I'm also grateful that most of Council has joined with you in making a small scrap of common sense into law. Again and again tax-paying neighbors find themselves confronted by a zoning issue that is foisted upon their community by someone who has not seen fit to pay the taxes owed on their property before they spend money to make it into something that does not meet the neighbor's approval. With the passage of this bill, at least tax delinquents will not be able to disturb a neighborhood until they are no longer delinquent. Our current zoning situation often causes real angst and expense for neighborhoods who are often up against objectionable proposals made by tax delinquents who nevertheless can afford high-priced zoning attorneys. If all politics are local, so too should be the laws that govern use here in 35 2/9/10 - RULES - BILL 090704, etc. Philadelphia. The specific case that prompted my question to Mr. Rizzo occurred this summer in my Bustleton neighborhood. A recent ZBA decision granted a variance to open a tattoo parlor, and that variance, I would maintain, should never have been granted based on the property's proximity to residents and the current zoning -- but that's another story -- in a building that had most recently been a brothel. That property owner still owes $3,682.68 in unpaid property taxes. This is particularly galling to the real estate office directly next to the new tattoo parlor, where the long-suffering realtor keeps up his property and pays his taxes and is rewarded first with an illegal use and then a variance that allows a tax delinquent to profit from a use that is not in keeping with the neighborhood. That owner has made it clear to the neighbors the high regard that he has for law and decorum. The City should be 36 2/9/10 - RULES - BILL 090704, etc. supporting the tax-paying neighbors, and this law will at least remove the insult of being defeated by a scofflaw. We all paid for the police and the L&I activity that were required to shut down his brothel tenant on multiple occasions. My only concern is that the law applies to all properties owned by an applicant and that it is not to be rendered meaningless through straw purchases and the identity-concealing corporations that populate our zoning notices. While researching the tattoo case, I realized that one owner has five properties in that block and the next. At least one has had zoning activity, and the properties are not all assets to my neighborhood. The owner is delinquent in three of five properties, owing $10,421.02 in back taxes. You need to be sure that he can't just pay on one property before he can create more nuisances for the neighborhood. 37 2/9/10 - RULES - BILL 090704, etc. I thank you for giving the neighbors one small stick to help beat back poor proposals, and hopefully it will at least be a small carrot to help fund our city. I believe that good neighbors pay their taxes and do better for the neighborhood and city. I hope that the change coming to our Zoning Code will further this hopeful sense of doing things that work for the neighborhood, and I really thank you for your attention.
Thank you for your testimony. Any questions for this witness? (No response.)
Paul Levy, please. (Witness approached witness table.) 38 2/9/10 - RULES - BILL 090704, etc.
Good morning. Please identify yourself for the record.
Good morning. My name is Paul Levy. I'm President and CEO of the Center City District. I have copies of my testimony here. I'll be very brief. I'm here in support of this bill, so long as it obviously doesn't slow down a legitimate developer, but I want to suggest that the ordinance be amended to include any outstanding payment of assessments to the special services districts that exist in Philadelphia. More than a dozen special services districts help support the work of the City of Philadelphia, enhancing business and commercial corridors throughout the City. While the City gets about 12 percent of its tax revenue from the real estate tax, most special services districts derive between 70 and 100 percent of their revenues from 39 2/9/10 - RULES - BILL 090704, etc. surcharges on the real estate property tax. Many of the smaller special services districts in neighborhoods across the City must spend a significant amount of their staff time trying to collect delinquent charges. The inclusion in this ordinance 9 of assessments paid to special services districts would provide an additional method of enforcement of payment of charges owed to them. Just as a note, just as title companies routinely call all the special services districts to ensure that property owners are current before a property is transferred, adding this step in and including the special services districts in front of the Zoning Board of Adjustment would be much appreciated. Thank you very much.
Thank you very much for your testimony. Councilman Greenlee.
Thank 40 2/9/10 - RULES - BILL 090704, etc. you, Mr. Chairman. Mr. Levy, just a quick question. When you say that special services districts -- or the applicant needs to ensure that they're current, how do they do that? Is there something that they would have to show that? I mean, I'm not against what you're saying. I'm just trying to figure out how to do it.
Philadelphia is realty unique. In most cities, the city does the collection of the special district assessment and remits it, so it is part of the city records. Here, all the districts collect on their own. So I think it's simply what the title companies do. At the settlement table, we get telephone calls from the title companies saying is this property current. My suggestion here is in the due diligence process in the Law Department, they know where all the special services districts are, they simply call and say, Is this property 41 2/9/10 - RULES - BILL 090704, etc. owner current. It's a small extra step, but I think it would help particularly the neighborhood corridors.
Could another way be that the person has to get some certification from the special service district to present it?
That would not be a problem for us. I've got a fairly large staff, but many of these districts are one-person districts, and I think Cindy Philo here from Old City could just address the logistics of it. I'd hate to add more burden on some of the much smaller districts.
I hear you. All right. Thank you. Thank you, Mr. Chair.
Thank you. Any other questions or comments? (No response.)
Thank you very much. 42 2/9/10 - RULES - BILL 090704, etc. Cynthia Philo, please. (Witness approached witness table.)
I'm Cynthia Philo and I just wanted to thank you all for allowing me here to testify today. I am the President and CEO of the Old City District here in Philadelphia, and I am here to testify on behalf and in favor of Bill No. 090852. In addition, I am testifying to ask you to amend it to put in the assessments for business improvement districts, as Paul Levy just mentioned. The Old City District is a municipal authority special improvement district that started in 1998 by both the state and the city ordinances. Daily, we supplement City services in the area of 43 2/9/10 - RULES - BILL 090704, etc. clean and safe and do it for a 22-square-block area for a zone that encompasses the historic area of Philadelphia, along with some of Philadelphia's finest retail, restaurants and art galleries. Through our annual assessments on commercially owned properties, we are able to accomplish these goals. Aside from grants, which unfortunately are few and far between today not only for us but for cities as well, this is the only source of revenue for the Old City District to maintain clean sidewalks, remove graffiti, illegal posters and pay for additional police services, as well as other supplemental services. Being the head of this organization for the past 12 years, I've seen my share of variance requests come through on many of the properties in Old City. Many development projects from small to large have happened in the Old City District over this time, and many 44 2/9/10 - RULES - BILL 090704, etc. are done by owners who have outstanding taxes, and by the fact that they have ignored the City's responsibility, they more than likely ignore the Old City District assessments responsibility as well. In fact, there are many times when the owners are in arrears for a number of years. Our only recourse is to lien this property and potentially put it up for sheriff's sale. This is not something that we want to do and, as a matter of fact, for a staff of two, takes a great deal of time when you're dealing with 1,158 properties. So the idea put forth by this bill that would allow us another avenue of making sure that our assessments would be collected, especially on those tax-delinquent owners, is just a benefit, and I would request that the bill's language be expanded to include business improvement district assessments. The only way that the District 45 2/9/10 - RULES - BILL 090704, etc. would be able to continue to do what it does with such success is to make sure our assessments are collected, and as such, by expanding this bill to include municipal authority business improvement districts would only be proper. In fact, it could be stated that the owner should be up to date, not only on the City taxes but really on all outstanding municipal tax services, prior to receiving any type of a variance. I would urge the Committee to expand the language of this bill to include that a person seeking a variance must also be up to date on all municipal authority and business improvement district assessments. I want to thank once again this panel. I wanted to thank Councilman Rizzo and, of course, Maureen, the catalyst for this here, for this particular bill, and I wanted to wish everyone a safe and effective snow removal in the present days that are 46 2/9/10 - RULES - BILL 090704, etc. coming before us. I'm willing to take any questions that you may have. And I do have testimony here prepared.
Thank you for your testimony. Any questions or comments? (No response.)
Marjorie Greenfield, John McKeever, Rosanne Loesch? Are they here today? (No response.)
Please come forward. (Witnesses approached witness table.)
Good 47 2/9/10 - RULES - BILL 090704, etc. morning. Please identify yourself for the record.
Yes. Gentlemen, my name is Joseph O'Donnell and I am currently the President of the Old City Civic Association. Seated to my right is Richard Thom, who will also testify and is an architect and head of our Development Committee. Gentlemen, it is my great honor to speak to you on behalf of Bill 090852. We support this bill and believe it should be strengthened to include all applications for land use and construction related to approvals sought from the City, including, but not limited to, all approvals by the ZBA, approvals by the Planning Commission, approvals by the Historical Commission and the rezoning of parcels in the City by City Council. Such a bill, along with the fairly recent legislation that has made it easier for the City to sequester 48 2/9/10 - RULES - BILL 090704, etc. property for unpaid taxes and assessments, will go far to help preservation of the historic treasures in Old City and make it easier to maintain our city as an attractive tourist magnet. As President of the Old City Civic Association, I speak for the residents of Old City, both residential and business neighbors, who through their civic association seek to preserve and beautify a unique place. Unique not only to Philadelphia, but also to the thousands of visitors from all over the world, who walk our streets every day. We appreciate the efforts of our community members who work together with the Old City District and the City to make Philadelphia a great place to live and a wonderful place to visit by cleaning streets and sidewalks, controlling litter, planting trees, planting gardens and maintaining the common areas of Old City for all to see and admire. 49 2/9/10 - RULES - BILL 090704, etc. Needless to say, we are upset by those among us who make things more difficult by not paying their real estate taxes and use the zoning system our taxes support for personal gain. Ms. Kelly, I'm happy to report to you that the OCCA has appealed the zoning decision, is working to remove the psychics from Market Street, is working to eliminate the congestion caused by a parking lot, has done away with the pole dancing and is working to make liquor licenses more difficult to get and to use. Gentlemen, I thank you very much for the opportunity to speak.
Thank you very much for your testimony. Councilwoman Miller.
Hi. Good morning. Thank you for your testimony. I just have a real simple question. What are the boundaries of Old City?
The boundaries 50 2/9/10 - RULES - BILL 090704, etc. of Old City start at the river and they go up to 6th Street. They start at Walnut Street and they continue to Spring Garden Street.
Oh, okay. I represent the Northwest section of Philadelphia, 8th District. So I hear Old City all the time. I've never asked what are the boundaries. So there's evidently another group that picks up from 6th and comes up to City Hall?
You have the special service district, which is the commercial side, and then I guess Wash West to a degree.
Mr. Chairman and Councilwoman, Richard Thom for Old City Civic. Our boundary goes to actually 7th Street, and about five years ago, six, seven years ago, we discovered there was no man's land of no civic groups. So 51 2/9/10 - RULES - BILL 090704, etc. we extended our boundary from 5th Street to 7th. There is the Chinatown Development Corporation. There is Wash West, as Councilman Kenney mentioned. There tend to be little pockets of areas of Center City that do not have representation by civic groups, but are, in effect, represented by the BIDs, the improvement districts and that sort of thing.
Thank you very much. Mr. Thom, please identify yourself for the record.
Good morning, members of Council. My name is Richard Thom and I am a Board member of the Old City Civic Association and, for the past 16 years, Chair of its Developments Committee. This Committee is charged by our Board with considering applications to the Zoning Board of Adjustment, among 52 2/9/10 - RULES - BILL 090704, etc. other development-related issues. OCCA has had over 30 years of experience in dealing with matters of redevelopment in our community. As you are probably aware, the Old City neighborhood was considered by many to be a local ground zero in the recent surge in local development activity, particularly in the residential condominium market. In light of the recent contraction of such activity in our community, we are now faced with leftover project sites of over a dozen potential projects, many of whom are now in tax arrears. The applicants, of course, do not volunteer the status of any tax delinquencies on the proposed projects at the time of appearance before my committee. If they did so, I can assure you all they would be hearing from us would be a sound uprating by many of our honest, tax-paying OCCA Committee members who, like myself, pay all monies due to municipal tax rolls. 53 2/9/10 - RULES - BILL 090704, etc. Given the millions of dollars owed by the City coffers by negligent tax property owners, it would seem wise to consider all mechanisms that may convince the recalcitrant owners, redevelopers and investors in new projects to make whole their tax obligations. That is why I'm here today in support of Bill 090852, but I have a suggested change. We all agree that the applicants to the Board are not only seeking project approval from a planning and architectural standpoint, but to also enhance the value of their properties in the marketplace. Such added valuation cannot take place until a zoning permit reflecting the final decision of the ZBA is issued by the Department of Licenses and Inspection. Required proof of payment of all taxes due at the time of the application for this final permit would have the same enforcement effect as making it a condition of an appeal. Such a change in the timing of the payment 54 2/9/10 - RULES - BILL 090704, etc. will ensure that no one considering the purchase and redevelopment of one of the hundreds of tax-delinquent properties often derelict will feel that they are at risk of failure before the Zoning Board. The bill's approach may have a chilling effect on development at a time when we all need to encourage real estate reinvestment. I would hope the bill 11 sponsors would consider this very reasonable change in adding the same enforcement effect. Thank you for the consideration.
Thank you very much. Any questions for this witness? (No response.)
Gentlemen and ladies. 55 2/9/10 - RULES - BILL 090704, etc.
Gentle persons. I'm very sorry. Let me just state that Mr. Richard Thom we're very proud of. He has received an award from the City for saving the Girard property on Front Street, which is a tremendous addition to Old City. Thank you.
Thank you. Thank you, Richard. David Glancey, Ira Kauderwood, University of Pennsylvania. (Witnesses approached witness table.)
My name is David Glancey. I'm from the Office of Government Affairs and Community Relations at the University of Pennsylvania. Good morning, Councilman Kenney, members of the Committee, Councilman Rizzo. Mr. Kauderwood is with 56 2/9/10 - RULES - BILL 090704, etc. me today. A substantial portion of his practice is before the ZBA and is clearly an expert on the procedures and the practices before the ZBA.
So let me state at the outset that the University fully agrees with the intent of this proposed ordinance. We're fully supportive of the notion that all taxes that are due and owing to the City by any entity or any person must be timely paid. We believe, however, that the language contained in the bill poses some difficulties, both in its applicability and its legality. Let me talk about the applicability first. A plan of development used by many institutions of higher education and other land owners is the leasing of land to a developer who will then construct a building upon that land. It's kind of the opposite of what you've just seen in the amendment that the Administration has 57 2/9/10 - RULES - BILL 090704, etc. passed up. I will tell you that universities such as Temple University, Drexel University, other institutions throughout the Philadelphia region, other institutions of higher education, use this model. The landowner and the developer enter into a long-term ground lease, often for 30 years or more. The University of Pennsylvania, some of them are 50 and I think some of them are 80 years long. So, in essence, that's a fee, because it's that long, that lease is that long. It is then recorded with the Department of Records, and the developer, the ground lessee, pays a transfer tax and, according to the lease terms, assumes all tax liability for this property for the duration of the lease. Since the landowner or the institution owns the land, it continues to be the record title owner or, in the language of 58 2/9/10 - RULES - BILL 090704, etc. the ordinance currently, the person who owns the property according to the City records. The developer, however, controls, maintains and has complete responsibility for the building and for all taxes and fees during the term of the lease. So let us suppose that the landowner were to be an applicant for a variance before the ZBA, and the developer, who is the ground tenant, was delinquent in some tax. The current language of the ordinance would prevent the ZBA from granting that application for a variance even though the landowner is not in any way responsible for the taxes or for the delinquency.
David, I'm sorry. Could you say that again, because you lost me.
Okay. What would happen is, the University applies -- Ira will go before the ZBA applying for a variance. The ground lessee, who has the 59 2/9/10 - RULES - BILL 090704, etc. lease for 30, 40, 50 years, is delinquent in some taxes. We wouldn't know that necessarily. He's delinquent in some taxes. He goes before the ZBA and cannot get a variance for the University because of that delinquency, under the language of the ordinance as it is before us today. Obviously that's not the intent. We understand that. But that would be the result if the current language of the bill was adopted. Quickly to the legality, a long line of cases in Pennsylvania holds that conditions that essentially serve a non-zoning purpose may not attach to a use or special exception, and we would posit to a variance as well. Recently, the Commonwealth Court -- and this is in 2007 -- held that while municipalities may attach reasonable conditions in approvals for zoning uses, the conditions cannot be so onerous as to preclude the use that is before them, nor may broad policy statements form the basis for such 60 2/9/10 - RULES - BILL 090704, etc. conditions. Again, I think the current language of the ordinance seems to violate these provisions and may lead -- and I say "may" because it's not for sure -- but may lead to a de facto unjust and unconstitutional taking of property. Let me reiterate that the University supports the intent of this ordinance, and I just heard today and did not know that de facto that the ZBA would mandate that taxes on the property that was at issue before them must be current prior to the grant of any variance. We think that should be done and maybe that should also be law rather than simply de facto. For the reasons already stated, however, it's our belief that the language of the bill in its current form poses significant problems in its applicability and its legality. Thank you very much for listening to us today. We'll be happy to answer any questions you may have. 61 2/9/10 - RULES - BILL 090704, etc.
Mr. Kauderwood, do you have anything to add? Please identify yourself.
Ira Kauderwood from the Office of General Counsel. I would just like to add from the lucky person who does appear at the counter and before the Zoning Board of Adjustment, I know that there's major efforts being made to streamline the processes, but the idea that the Department of Revenue or the Board of Revision of Taxes would have to issue some sort of a clearance certificate, for example, to the University of Pennsylvania, we have hundreds and hundreds of tax accounts. The Title 19 taxes are extensive and varied, and for us to have to go to the counter and wait for one of those departments to issue one of those clearance certificates, even assuming that everything -- that we attempt to pay all our taxes in a timely manner, but things get mixed up and 62 2/9/10 - RULES - BILL 090704, etc. everything, but for us to add that burden to those departments, to special service districts and then have to make that a prerequisite to either applying for a variance or applying for a permit at L&I I think might create some major problems for us.
The confusion I have in the testimony is, David's testimony is that the potential lessee of the property, which I guess is like kind of a design/build arrangement where you give them a long-term lease and they would come in, take the responsibility of design and construction and then --
They collect the revenue from the tenants. It's two levels. We lease the land, the developer uses their capital to build the project, and then they typically would lease it to third parties.
Back to Mr. Glancey's testimony, he's saying that 63 2/9/10 - RULES - BILL 090704, etc. if the Zoning Board of Adjustment refused to grant the variance based on the lack of tax certification, that that could be potentially interpreted as a taking, as an illegal taking?
If the denial or refusal occurs at the counter, it's never scheduled for a hearing. The Zoning Board of Adjustment never hears it. Do you believe that's similarly an illegal taking? The Department of License and Inspection is the administrative agency of the City that accepts the application and then sets up the hearing. The Zoning Board of Adjustment is the quasi judicial decider of fact and then makes the decision. If the administrative arm of the City government that has responsibility of collecting the taxes says we're not taking the paper, is that the same as the Zoning Board of Adjustment refusing them on the basis of 64 2/9/10 - RULES - BILL 090704, etc. tax delinquency?
If they won't take the paper, then we couldn't even apply for a permit even if a variance wasn't required.
Okay. One other and I know Councilman Greenlee has some questions. It would be interesting for me to know, because we have this -- and this is just an aside. It would be interesting for me to know, because you mentioned a number of tax accounts that the University of Pennsylvania has. There has been ongoing conversation over the years that I've been here and probably before I got here, almost 19 years ago, about the non-profit tax 20 non-paying of the University on real estate. I would be interested -- and maybe this is something that Wharton can do or Fels could do or somebody can do, is really analyze the tax payment that the University makes, just the education, 65 2/9/10 - RULES - BILL 090704, etc. not the health system -- that's another whole story -- vis-a-vis what it saves in real estate because it's a tax-exempt operation. Because I think it would be a very interesting conversation as to what the real tax implications or tax benefits to the City that Penn, Temple, Drexel, LaSalle --
I'm talking about all -- and, again, it's a big project. I would just be interested to see, because when those issues come up about the alleged unfairness of the real estate tax side, I really would like to know wage, business. Because it's got to be an astronomical number.
I think we actually already have that, and I could make sure that got to you.
I'm sorry, 66 2/9/10 - RULES - BILL 090704, etc. Councilman, just to make sure. We have that information probably current as of 2006. We're in the process now of updating that information. I could supply the 2006 quickly to you, and I would do that if that's what you would like.
Thank you, Mr. Chairman. Good morning, gentlemen. I'm probably on shaky ground trying to argue legality with two lawyers, but I'm going to give it a shot. Mr. Glancey, in your statement you say about the Commonwealth Court held while municipalities may attach reasonable conditions in approval, the conditions cannot be so onerous as to preclude the use, nor may broad policy statements. Is the paying of taxes unreasonable conditions? Is that onerous 67 2/9/10 - RULES - BILL 090704, etc. to ask? Is that a broad policy statement, that you need to pay your taxes?
Well, let's say -- I think Mr. Glancey gave you one example, for example, where a ground tenant was, let's say, delinquent in their taxes and then Penn -- but we would be the record owner of the property and we would try and apply for permits, for example, at the hospital and then we would be told, Well, you can't get that permit because there's this other problem.
But I was getting to that. That's the applicability thing. I was going to ask you about that, too. But the pure legality of it, the City doesn't have the right -- I mean, isn't it -- I used the word before. I mean, a zoning permit is, in a sense, an entitlement, right? It's not a right to have. 68 2/9/10 - RULES - BILL 090704, etc.
Councilman, I don't think there's any doubt that the City clearly has a right to ask for taxes that are delinquent. We agree with that. However, the legality comes from the line of cases that we know exist in the state, of the Commonwealth. That might change if somebody challenges that. That was what I was referring to and particularly what the Commonwealth Court stated about broad policy matters attaching to --
But broad policy, it's paying your taxes? I mean, we're not making a statement on global warming or something. We're saying the City government, you should pay your taxes to get a permit; that's all.
Zoning is -- and, again, the Bar Association is here and they can certainly testify more about this than I, but zoning is in rem. It means that piece of property that is before the Zoning Board at that time is what they must look at. 69 2/9/10 - RULES - BILL 090704, etc. So I think what the Commonwealth Court is saying is that you can't bring these other considerations for -- again, taxation is a policy, and we might not want to consider it a broad policy like global warming, but it is a policy. So I think that's what the court was saying there. But, again, for us specifically, it is the applicability of the language as it is currently written that is more of a problem than the overall legality.
Just one last question on legality. Has there ever been a case just like this, though, where a municipality has put in an attachment, if you will, on taxes to zoning, that you know of?
So we don't know exactly? 70 2/9/10 - RULES - BILL 090704, etc.
I'm sorry. I just have one other, Mr. Chairman. On the applicability, I hear what you're saying on that. I'm a little confused too, but I think I know what you're saying. Is there any language or amendment that you can think of that could deal with this? Because, look, I'm not trying to make -- none of us are trying to make innocent people --
Probably. I'm going to let my colleague flesh this out, but it seems to me that it is the opposite of the amendment that was just put before you by the Administration kind of protecting the tenant in that situation. It seems the opposite of that is our problem, because we are the 71 2/9/10 - RULES - BILL 090704, etc. landlord, but it might be that tenant that is causing us not to get the variance.
I think there's two things that come to mind based on Mr. Glancey's testimony. One is that if a ground tenant that has paid transfer tax and is now responsible for the taxes is the one that's delinquent, the owner of the land should not be precluded from applying and obtaining variances. Another situation would be the research -- what you had to be current on, it might -- the applicability might be more streamlined if what you had to be current on were taxes for the particular property at issue, not, for example, if we were applying for a permit at the Center for Advanced Medicine, that they would research properties that we own completely not in proximity to that. It's not only real estate taxes we're talking about. They're also 72 2/9/10 - RULES - BILL 090704, etc. talking about all Title taxes. I mean, if we had to make a list of what they are and how many accounts there were, I don't know how many. It could be -- I mean, we're talking about wage tax, real estate tax, business licenses. I mean, it's a lot.
Thank you, 14 Mr. Chair. 15 Gentlemen, good morning. 16
Real quick. 18 With respect to the constitutional issue, 19 both of you know that in the Zoning Board -- and I have no idea as to how far they are allowed to go, but there are always -- well, not always, but in a lot of instances, there are these things called provisos attached to variances, and sometimes those variances can go 73 2/9/10 - RULES - BILL 090704, etc. quite broad. Is it your suggestion -- because you say that the tax issue is not related to the matter at hand, the property. We disagree. So are you saying that there's a limit in terms of the provisos that can be attached to a zoning variance that sometimes go way beyond simply the use of that property?
Yes, and there have been cases about that in Pennsylvania.
For example, there is a case just in preparation for this hearing, there's a case where they were limiting the hours of a particular operation, and the court found that it wasn't related to the public health, 74 2/9/10 - RULES - BILL 090704, etc. safety and welfare and it was an unreasonable proviso.
I just have a quick question. If one of your tenants falls behind in paying their taxes and whatnot, you as a land owner, would you be able to apply any pressure for that tenant to get up to date and pay his taxes? Is there anything in that respect that you could do?
We do that. There are any number of instances that I have been informed of -- I haven't done it personally -- where that has happened and we have -- for instance, someone from the Public Safety Department goes to try and get a sprinkler and enters L&I to get 75 2/9/10 - RULES - BILL 090704, etc. that sprinkler permit and says, No, you can't have that because you're delinquent in whatever tax it might be. Well, that person gets a hold of the General Counsel's Office or gets a hold of me or somebody, and we attempt then to try and get that tenant to pay those taxes. And we really do, we push them very, very hard, but we don't write the check. I mean, that's their responsibility. So, yeah, while we try to do that, Councilman, there are times you might find somebody who is recalcitrant. Or I'll give you another less onerous example. As we've talked about, there are many hundreds of property accounts that Penn has, some in the model that I described, others where we're tenants, and as a tenant, maybe going before the ZBA for a variance and finding the opposite problem where that owner, for instance, has not paid a tax. So, yeah, that happens. We attempt to do everything we can. And I 76 2/9/10 - RULES - BILL 090704, etc. don't know if Mr. Kauderwood wants to add anything, but we attempt to do everything we can to get them to pay up, because we believe, with the intent of this kind of legislation, everybody ought to pay their taxes, of course, in order to get a variance or to get any other privilege that the City offers. Can I make one suggestion, Councilman Kenney? And I haven't researched this at all, but it might be something that the Committee might want to think about, and maybe it doesn't work. We're non-profit, and most non-profits probably, other than the model I described and being tenants, lots of non-profits are not in the position of paying taxes at all. Maybe an exemption of non-profits from this legislation would be something that you could think about, or tying it maybe to a business privilege account number as opposed to just saying all property owners. I don't know. I mean, maybe that would be 77 2/9/10 - RULES - BILL 090704, etc. something that someone on the technical staff could take a look at. Those are just some suggestions I would make.