- - - COUNCIL OF THE CITY OF PHILADELPHIA - - - PUBLIC HEARING COMMITTEE ON HOUSING, NEIGHBORHOOD DEVELOPMENT AND THE HOMELESS - - - Room 400, City Hall Philadelphia, Pennsylvania Monday, December 13, 2004, 2:50 p.m. - - - RESOLUTION 040797 - Resolution authorizing the Committee on Housing, Neighborhood Development and the Homeless to conduct hearings on the revitalization efforts of the Philadelphia Commercial Development Corporation in West Philadelphia. PRESENT: COUNCILWOMAN JANNIE L. BLACKWELL, Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILWOMAN DONNA REED MILLER - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 040797 - Housing - 12/13/04 - - - P R O C E E D I N G S - - -
Thank you all for your patience. Please forgive us for the delay. We were talking to some ministers. And I recognize who my bosses are. And therefore, we're sorry that we're just beginning. Today's hearing is before the Committee on Housing, Neighborhood Development and the Homeless. Having said that, just so that all of you are all clear, we will have the clerk read the resolution, and the resolution that we're dealing with today. Again, the Committee is Housing, Neighborhood Development and the Homeless. And the hearing we're dealing with today deals with neighborhood development. So we welcome you. We hope that you will have something to say. We know that some of you who deal with various neighborhood issues may want to 3 040797 - Housing - 12/13/04 know that tomorrow we have a hearing on the $35 job fee at o'clock. And we certainly 4 invite you to come back then. And we invite 5 you to stay and hear the hearing, decide if 6 you want to testify, and certainly to testify 7 today. 8 To my left is Councilwoman Blondell 9 Reynolds Brown; to her left, Councilman 10 Darrell Clarke, who are members of this 11 Committee. And Councilman Mariano, as many of you know, is sick; doing better; but is not here. And we would like to let you know that Resolution Number 040797 was introduced and passed on September 23, 2004. This examines PCDC's activities in West Philadelphia. The hearing was originally scheduled on October 20th, but was continued because our witness and the president of PCDC was out of the country. We rescheduled this hearing to November 9th, but continued it due to the proximity of the holiday and all who were 4 040797 - Housing - 12/13/04 being involved in dealing with turkeys and holiday activities; and then again on November 22nd. And so, we are here today. And having said that, we will ask the clerk to read the formal title of the Bill.
Resolution authorizing the Committee on Housing, Neighborhood Development and the Homeless to conduct hearings on the revitalization efforts of the Philadelphia Commercial Development Corporation in West Philadelphia.
Thank you very much. We would now like to ask Curtis Jones to come forward and to testify. He is the president and C.E.O. of PCDC which is Philadelphia Commercial Development Corporation. And we will let him introduce those members who are with him who are also members of PCDC, and they're all welcome to testify. Thank you again all for your patience and for being here. 5 040797 - Housing - 12/13/04
Madam chairman, members of City Council, my name for the record is Curtis Jones, Jr. O. of the Philadelphia Commercial Development Corporation, PCDC. First let me apologize, Councilwoman, to you and other members for not being available for the first scheduled hearing. As you mentioned, I was representing the City of Philadelphia in China, in reference to the Chinese manufacturers' mall, which the City is trying to solicit manufacturers to locate their businesses within the City of Philadelphia, creating jobs and opportunities for its citizens. We were modestly successful with that. Also seated with me in the chambers and available for questions are John Lenahan, who is the vice president of lending, Aqil Sabur, who is the vice president of micro 6 040797 - Housing - 12/13/04 lending in the Small Business Support Center, and Mr. Robert Smith, who is the vice president of Neighborhood Commercial Revitalization. My colleagues and I are here today to testify and present testimony to the Committee for the Homeless in accordance with City Council Resolution 040797, the revitalization efforts of PCDC in West Philadelphia. Let me start with just as background: During the '60s, there was a term that was developed by real estate professionals. It was a theory called tipping points. That concept meant that when a community hit percent or above in a 19 transformation phase, whether it's economic 20 or racial, that the transformation at the 20 percent point would become rapid, and that those changes would occur in a rapid succession. Today many communities are undergoing that same process. Today that 7 040797 - Housing - 12/13/04 same theory of investment, where it begins slow and then as it catches on and hits that magic percent threshold, it becomes rapid. 5 Many neighborhoods in the City of 6 Philadelphia are experiencing dramatic 7 economic change. Property values in some 8 cases have outpaced the ability of existing 9 residents who have historically lived in low 10 to moderate income areas, to sustain their 11 properties. 12 Similar for small businesses, that 13 transformation and that problem is occurring 14 more with large chain stores and franchises. 15 Public policy will determine the 16 future of the residents and the businesses in 17 that area. 18 I'd like to focus my testimony today 19 on four specific areas. Brief overview of 20 PCDC's role in West Philadelphia, you know, related to the economic agenda are access to capital for small businesses, providing technical assistance to small businesses, empowering businesses through the use of technology, and reviewing our role with the 8 040797 - Housing - 12/13/04 business associations and serving as their advocates. I would like to discuss with the Committee also some of the potential that West Philadelphia has and review its inventory of assets and liabilities for development. In addition, I would like to review our strategies for implementation of our initiatives in West Philadelphia, those that we currently have, and those that may be coming on line in 2005. The Philadelphia Commercial Development Corporation was established in 1974 as a quasi public, non-profit economic development corporation. During the past 30 years, PCDC has arranged financing in excess of $267 million for more than 2500 businesses. That total, of which we approved personally -- not personally but our corporation -- $90 million. Many of these businesses that received assistance are small, disadvantaged 9 040797 - Housing - 12/13/04 businesses, and are 100 percent when it comes to West Philadelphia neighborhood based businesses. In our majority lending program which is the Small Business Revolving Loan Fund, SBRLF, we have completed 54 projects, totaling $3,895,000, 70 percent to minority firms, 100 percent to neighborhood based businesses. We've provided, Councilwoman, a list of those businesses enclosed in your briefing packet. 2 million of capital.
And remember, these injections, infusions of capital are $35,000 or less. The average size is about $10,000, usually less than that. From the Small Business Administration we've been able to do five projects totaling $390,000. Through PCDC'S loan program, we have provided additional private financing, by way of packaging to banks, not using any government collars. A. based businesses. And we've done nine deals through them, totaling $200,000. Through all of these loan programs, we have settled $4,732,000 to businesses in West Philadelphia. 7 million. When it comes to neighborhood commercial revitalization, which is our corridor activity, our neighborhood commercial corridor division is responsible for 43 corridors throughout the City of Philadelphia. Over the last two years, we have provided grants to businesses which have totaled $177,000 for storefront improvement. 11 040797 - Housing - 12/13/04 Our capital improvement program has done $726,000. And our corridors are in that area: 40th Street, 60th Street, 52nd Street, and Baltimore Avenue. Through our Acquisition Grant Program we've provided an additional $144,000. Now, keep in mind we can only do the ceiling, $25,000. That's for a non-profit to acquire a commercial property that they can renovate, sell or rent. The 10 West Philadelphia corridors -- and this is an important statistic -- generate 23 percent of the total of $180 million in gross sales. PCDC has provided web site assistance, internet assistance to various commercial corridors around the City of Philadelphia, particularly to 40th Street, 52nd Street, 60th Street and Lancaster Avenue. In addition, PCDC has provided technical assistance to 48 individual businesses. A. project, we were able to work with her to disburse additional capital to some of those distressed businesses out there. And we want to applaud her for her working with those businesses. And a list of those companies are also in the packet provided to you, Councilwoman. Over the years, PCDC has participated in dozens of clean-ups, dozens of promotions -- including parades, workshops and others -- to help stimulate activity in the West Philadelphia area. So what are the economic development challenges for West Philadelphia? Well, we have taken an inventory of some of the strengths and weaknesses, and plan to use that good information, that data, to make good information and better programs working with City Council. West Philadelphia has approximately 220,000 people. 2 square miles. The mean household income in 13 040797 - Housing - 12/13/04 that area is $20,000, compared to $60,000 for the average income of citizen's households in the eight-county area. West Philadelphia has -- and that's a good point -- 58 percent home ownership. 58 percent home ownership. 4 percent African Americans. The average home in West Philadelphia was built in the 1930's. West Philadelphia has a large park system. West Philadelphia has dozens of major institutions, including hospitals and universities, which serve as a potential for economic development. One of the down sides is that we've lost over the past decades 27 percent population. And that's clear, when it comes to some of our commercial corridors and some of the business that they're able to generate from customers. A. C. and other major metropolitan areas. Ten percent of the City's work force resides in West Philadelphia. 67 percent of that work force is in health and education, 6 percent unemployment. West Philadelphia over the past years has done only 223 new housing starts in that area. So what are the opportunities, based on this data? Well, first of all, we got to give a lot of kudos to your housing efforts to start new homes in the West Philadelphia area. Clearly, without new housing starts, we won't be able to attract businesses. West Philadelphia's ten commercial corridors, again, generate $180 million in gross sales. We need to create incentives for mixed use development.
And this is a very important point. And I use the example of Germantown Avenue. If you look at Germantown Avenue, going from Chestnut Hill, all the way down to Nicetown, what you'll note is that 15 040797 - Housing - 12/13/04 the larger -- the better part of, more prosperous part, has mixed use development, meaning commercial downstairs and residential upstairs. We need to mimic that and get more residents into the second floors of those commercial establishments. And that's an important point, because when you begin to look at a thing differently, you begin to change that thing. We've got to look at these assets and start to consider them assets as, opposed to liabilities, and take advantage of them. So what else can we do? We need to work to develop joint ventures with international companies to create job opportunities. I mentioned earlier the trip to China and the manufacturers mall. O. and a key manager. The rest of that employment has to come from the local population. And that is a potential source 16 040797 - Housing - 12/13/04 of jobs for the City of Philadelphia. We need to work better with our agencies, such as the Minority Business Enterprise Council, PIDC, the Philadelphia Housing Authority, to create business contract opportunities for the small businesses that we are funding. We need to develop and increase the development of strip malls these areas and shopping areas. We need to stop the gateway leaking. And what do I mean by that? We're losing a lot of our customer base. There's a lot of income in these areas, but we're losing it to Baltimore Pike. We're losing to it Cherry Hill. We're losing it to areas outside of the City of Philadelphia. And our money, we need to kind of generate means for people to shop in the neighborhoods. And that is why we support every year Spend the Holidays in your Neighborhood Campaign. We view that as a vital, vital strategic message that we send out to consumers. 17 040797 - Housing - 12/13/04 Something that the International Council of Shopping Centers said. They conducted a study of a thousand companies. And they said that in that study, that 93 percent of the respondents said that the inner cities were an important market opportunity, but only a quarter of them responded that they were currently doing business in inner cities. The ICSC also said that the cities, inner cities, needed to do a better job of marketing those opportunities and attracting them to the inner city. We agree with that. And again, that's why we think those kinds of opportunities to showcase our neighborhoods are important. On Cecil B. Moore, that jazz festival did a lot more than just bring entertainment to areas. That jazz festival showcased the best side of what the Avenue could be. And we encourage those kinds of activities all the time. , American cities, the Empowerment Zones, to create shopping centers in and coordinate our work, to create shopping centers that are vibrant. And one of the charts you'll see is that one of the major problems that we have is those railroad trestles that run through our community, that serve as monuments of the rust belt. And until we really start approaching them and holding them accountable for that infrastructure that runs through our community, it will further continue to encourage blight. We need to develop and we applaud Councilwoman Blackwell's efforts to create pedestrian pathways within walking areas within the Mantua area. We think that's a real good idea to improve the quality of life of people who live there. We want to continue to provide technical assistance to businesses, CDC's, through the use of technology. 19 040797 - Housing - 12/13/04 One of the things that we find in our travels -- And Councilwoman Miller has been a part of us hotwiring some of the commercial corridors and providing teleconferencing centers.
When we went through there and did an inventory of what they believed technology was, the number -- the mean use of technology was a calculator and a cash register. Well, they can't be competitive nationally, and now internationally, if they hold that as the highest level of technology that small businesses on average are using. So, we've worked aggressively to work with the Federal Government, to attract money to help them improve their technology infrastructure. And we'll talk about that a little later. We need to work with the Parking Authority, obviously, to deal with congestion in our commercial corridors. We need to work with public utilities, to create some rhyme and reason to some of the infrastructure repair that is 20 040797 - Housing - 12/13/04 killing some of the small businesses in neighborhood corridors. We need to negotiate and work better with the Neighborhood Transformation Initiative, to figure out what they're doing, so that we can meet them at the crossroads, so that we can make sure that once the housing agenda is done, that also the commercial and retail agenda is under way. We need to hold private property owners accountable for some of the blight that they allow to exist in our commercial corridors. We need to spend more than seven percent on economic development out of our total CDBG budget. West Philadelphia, in particular we need to look at how we reclassify some of the buildings there, some of the land there, so that we can get more commercial use. I sincerely believe that West Philadelphia is the next big thing. North Philadelphia has experienced some of that growth and some prosperity in 21 040797 - Housing - 12/13/04 key areas. But we believe sincerely, that with the right coalitions, with the right working relationship with City Council, that West Philadelphia will be the next big thing. PCDC is working closer with state and Federal Government --
You're not telling me you're ready to abandon North Philadelphia, are you?
No. This hearing is about West Philadelphia. If you want me to specifically speak to North Philadelphia, we can.
All right. No. 21 You said that... You kind of implied that we've done enough in North Philly.
Now it's time to go to West Philly. 22 040797 - Housing - 12/13/04
No. For the record, we would never abandon our friends in North Philadelphia.
Not just Germantown. I mean, we have a viable strip, as you mentioned earlier, on Germantown Avenue, all the way down to Nicetown from Chestnut Hill. And then we have our other strips, Broad and Olney, Lower Germantown, et cetera, et cetera. So... And I think you're doing a good job there. 23 040797 - Housing - 12/13/04
Thank you, Councilwoman. One of the things that I would mention -- and I'm coming to the conclusion here -- is that obviously work force development is an integral part of economic development. And we need to work with PWDC, but we also need to remember that what we're seeing is a demographic. And the good news, as was mentioned in a previous hearing, is that retailers are rediscovering the inner city. They are coming back. The bad news -- The potential bad news is that, just like in our corridor when we had it in Manayunk, 98 percent of the businesses that were there when we started development are no longer there. So, we have to be particularly mindful of how we do that development, to save some of the neighborhood businesses, and not just have franchises and CVS's, even we though we appreciate their contribution -- but the character, the flavor of inner city commercial corridors is in the individual, 24 040797 - Housing - 12/13/04 family-owned business. That's it's strength. That's it's character. And we want to work on those kinds of coalitions. Again, we applaud the efforts of Councilwoman Blackwell and this Committee for bringing us here and making sure that we connect to the total City efforts. And with that, we thank you very much.
Absolutely. Some preliminary questions. We'd like to know what PCDC's mandate is and who monitors your organizations activities. We'd like to know how often your board meets, and whether or not these are public meetings. That kind of gets to the parameters of who PCDC is, what it does, and what it's mandated to do.
Okay. You're going to have to help me with some of the questions. There were several. Our mission is to revitalize neighborhoods, low and moderate 25 040797 - Housing - 12/13/04 income neighborhoods, and to do so through the development of small businesses, to be succinct. We meet at least seven times a year. Our board meets seven times a year. We are monitored by both City Council, the Commerce Department, the Federal Government, and our private funders, so we are monitored by all of the people who kind of contribute to that. There was another.
By what entity or... We understand you are a quasi public entity. Or are you a quasi public entity or separate non-profit? And what allows you to receive funding from city, state and federal authorities.
Technically, we are a non-profit, just like any other non-profit. We have an independent, self-electing board. But the reality of it is, 80 percent of our money comes from a contract with the City of Philadelphia. So, you're our boss. I mean, technically we're independent. 040797 - Housing - 12/13/04 Practically, we work for you.
How many people work for PCDC? And would you provide us with their titles and job responsibilities?
Now, how does advertising fit in that? As you know, I've had a big issue with banners. And you know, PCDC advertises in newspapers, prints brochures, does banners, advertises for various organizations, individuals or businesses. What part of your budget is that and how are those decisions made?
There are several sources that we use for advertising. One is the official CDBG portion of advertising, but wherever you see an initiative like, spend 27 040797 - Housing - 12/13/04 the holidays in your neighborhoods, those are funds that we raise independently from that budget. We also get money -- We have got some advertising out of a grant. I mentioned that 80 percent of our budget comes from the City. Another portion of our budget actually comes from the Federal Government, where we were mandated to advertise, for example, those web sites that you see. And those banners were paid for out of that. So, what we were actually trying to do was encourage people to look to the internet, to start to participate with small businesses in the area. And those decisions were made -- And I take full responsibility for the error in the marketing of those web sites.
Well, you know, that's a big issue with us. If you say 80 percent of your money comes from the City, and then the City Council then conceivably has a major responsibility to monitor what 28 040797 - Housing - 12/13/04 you do, we really take offense to not being included in your decisions. I mean, an elected official shouldn't get up and see that a person who's against the neighborhood is funded to the tune of $75,000 to start up a business or that PCDC has banners up reorganizing neighborhood groups, and calling for not only reorganizing them: Renaming them, reorganizing them, and conducting elections. How can you do that, and then expect us, as 80 percent funders, to support your activities and not question it?
It was a mistake of my head and not my heart, not my intention to cause you or any -- or disrespect this Council. I've worked in government -- not as long as you -- but 20 years. And if that was the impact, that was not the intent. It was not the intent. And I want to say that for the record.
Yeah. I don't understand. 29 040797 - Housing - 12/13/04 What was the intention? Why would you -- We'd like to know how commercial corridors are chosen. I have 52nd Street, 60th, Baltimore Avenue, Lancaster Avenue, Chester Avenue, Woodland Avenue, Spruce Street. How were commercial corridors chosen to receive funding, and what criteria do you use? I only mentioned mine. The Councilwoman has Germantown Avenue. Councilman Clarke has Cecil B. Moore Avenue. And we know years ago, because we tried to get another store, the Company Store. We tried to get one out in West Philadelphia when Wynnefield was still alive, for a long time. We want to know who picks these projects, who picks corridors, and under what criteria are they chosen.
I'd like my vice president for NCR, who has been with the corporation now how long?
22 years. This is Mr. 30 040797 - Housing - 12/13/04 Robert Smith.
It has been the policy of PCDC to receive the corridors basically from the Commerce Department. It was our understanding that the Commerce Department had talked with the different Council people and designated -- and determined what corridors would be designated for PCDC to service. The criteria... The previous criteria had to do with a business area had to have at least 55 percent of the active businesses in that designated area had to already be part of some type of formal business association. We used to pretty much follow that rule, up until about eight or nine years ago. And from that point, corridors are basically just designated to us through the Commerce Department.
One other point, that 31 040797 - Housing - 12/13/04 they have to fit a criteria of low and mod income, based on the census data. That's another criteria for that, meaning that the surrounding census tracts had to fall within that.
Well, I am happy to say that I'm looking at Councilwoman Miller, who concurs with me, and Councilman Clarke. Councilwoman Blondell Reynolds Brown is at-large. Nobody confers with us on which corridors are picked. That does not mean that we don't want those who are getting treated to be treated. But, you know, it's very disparaging when somebody makes decisions and groups are funded. You know, I'm looking through this book, and I don't have any problem with it when it's out of my district, but one of my former opponents had opened a store right after I was run against in an election. Come on, now. Politics is in everything we do. And we feel that if we fund it, then we have 32 040797 - Housing - 12/13/04 a right to know what we fund and what we're paying for. And it disturbs us. You mentioned that CDBG is seven percent of your budget. We contact CDBG about corridors when we talk about it, but that's our only opportunity for input, really, in commercial corridors. But Commerce doesn't work with us in that regards.
Councilwoman, if I may, two things: One, when we deal with CDBG dollars -- and I've been accused of having some understanding of politics, but obviously not enough. But let me say this: When we deal with CDBG dollars and the application of these programs, I don't make any political distinctions. Some of my best friends are elected. But when people come into the office, I don't -- I really don't check --
No; but I apologize for 33 040797 - Housing - 12/13/04 that. But what we can not do is make a distinction. If this is a good project, I'm obligated to fund it.
Clarification. What percentage of the dollars are CDBG dollars, 80 percent?
Because you shook your head when Council Chairwoman Blackwell misquoted. I thought the percentage --
But I don't mean CDBG per se. I'm saying that if businesses come to you, you say that generally, until seven or eight years ago, you dealt with 55 percent 34 040797 - Housing - 12/13/04 of it being active businesses, who were part of an association.
Well, that was until eight or nine years ago. So, that means there is apparently no criteria, or whatever criteria, somebody in PCDC determines at the time about who they want to fund. That's just not good enough. There's an association. I went and spoke before a meeting BAWP, Business Association of West Parkside. When I got to the meeting, I found -- This was approximately... I don't know... maybe two or three months ago, there were people there from the 2nd, 3rd and 4th Councilmanic Districts. As soon as I got there, I realized that I was dealing not only with my District, and so whatever I said wouldn't necessarily apply to my people. So, I was very careful. But my point of it is, this also was another organization, like the 52nd Street New Arts and Business organization, that was 35 040797 - Housing - 12/13/04 formed, that Bob Fulton was chairing. And you had people from, again, 2nd, 3rd and 4th Districts, and an election -- a new group, a new election, a new organization. I mean, how can you -- And, of course, I immediately told them I couldn't speak for my colleagues and two other districts; and that, you know, how can you folks come up with new organizations around the City, and not deal with us, and expect us to fund the freight? I mention that as another organization. And the two instances I mentioned and organizations I mentioned are issues that nobody told me about, but issues in which I have been involved and issues that I am sure about. I ask you again about BAWP. How can you again form another organization dealing with three Districts, and expect us to fund whatever it is and conduct elections?
Well, Bob 36 040797 - Housing - 12/13/04 Fulton said you did.
Bob Fulton, for the record, works for the Commerce Department. The only interaction I've had with that coalition of businesses is when Mr. Fulton invited me to speak. And when I found out that that was not necessarily something that the administration was supporting, I refused to go. And again, I didn't organize them. From time to time, I get invited to public events. I did not check. I said, okay. When I found out that that was not the thing to do, I didn't participate. But Bob Fulton clearly does not work for PCDC. Bob Fulton works for the Commerce Department.
All right. Well, okay. He works for your department, not your agency.
He doesn't work... No, he does not work with or for PCDC. He works for the Commerce Department.
Is PCDC 37 040797 - Housing - 12/13/04 under Commerce Department?
He reports to Mr. Traylor and the Commerce Director. He doesn't report to me.
And to your best knowledge, where is he housed? Where is his desk?
You don't report to Mr. Traylor or to the Commerce Director. 38 040797 - Housing - 12/13/04
But I do actually interact with them. They're on my board. Technically -- There's two -- The reality -- Like I said, the reality is, 80 percent of our funding comes from them. So, I report to them. By way of the way we're organized, we were organized to be semi-autonomous.
And the chairman of your board is? 39 040797 - Housing - 12/13/04
So is Bob Fulton with the Mayor's Business Action Team?
All right. Well, Bob Fulton sure enough mentioned you.
He said he had taken his lead from you, in also establishing another organization, with another elected board and another community entity. He compared the two as the same kind of organization, and it is what you all were doing.
Councilwoman, I'm on the record here. He does not work for me. He did not ask me to organize this. I don't know what he was -- why he would even say that. I'm telling you: We didn't organize 40 040797 - Housing - 12/13/04 that entity. Now, the 52nd Street one, yes. That West Philadelphia coalition? No. 5
So you meet about every other month with the board. And these are the people to whom you report. So you don't report to Mgenzi Traylor or to the Commerce Director.
I've worked with and worked for, yes, the Commerce Department. Not technically.
What it means is that we 41 040797 - Housing - 12/13/04 have a contract, but the board I report to is the board of PCDC.
Except your dealing with businesses, as opposed to housing.
So it's wildly believed that Tony MacIntosh, who heads PHDC, works for the City.
Well, their perception is that you work for the City and you report directly to the Commerce Department.
So while we understand technically you don't work for the City --
I do. I mean, 80 percent of my money comes from you guys. I work for you.
Okay. Sorry. So I just wanted to clarify that. I mean, the questions, you know, from a technical perspective may not be correct, but the 43 040797 - Housing - 12/13/04 reality is when there's administration testimony during our budget hearings from the Commerce Department, you're sitting there along Mgenzi Traylor and Miss Naidoff. So the natural assumption is that you're a member of the City's administration.
Well, then, 13 are you unionized, as are his? We've met with their people when they have union problems. So which union are you a part of?
Okay. So, well... Okay. Then when you pick businesses such as are listed in this book, does your board okay them?
Yes, a subset of the board, which is the Director's Loan Committee, meets and evaluates the business proposal, made up usually of a banker and 44 040797 - Housing - 12/13/04 myself and another party.
For informational purposes, you say that 80 percent of your funding comes from the City. Break down for us, if you would, the balance of percent. Where does it come from? 8
The Federal Government, 9 SBA; PMBDA, Pennsylvania Minority Business 10 Development Authority; different grants that 11 we've applied for, private foundations. 12
And the dollars 13 in question that were used for advertising, 14 those dollars came from where? 15
They came from the 19 Federal Government's technology grant to us, 20 SBA.
I see. Just for my own information, to give a little bit of discussion of programs, on of your testimony you've discussed briefly neighborhood railroad trestles and how 45 040797 - Housing - 12/13/04 they -- We know the role they play in blight. But what potential exists if we as a City could move towards getting rid of them?
And while he is approaching, I will note that we found a board of directors list dated '03. And I'll only mention a few names that some people may be aware of because they're active, like Barbara Shabo, President of Advantage; Reverend Campbell from Mount Carmel Baptist Church; Floyd Austin, Beech Corporation; Jerry Walker, President of Walker Communications; David Wang, President of Asia America; Lavina Marshall Blake, Independence Blue Cross; and, of course, yourself and Mgenzi Traylor; Greg Ross from Temple. Just a few people that some people may know. And Mike Driscoll at Finnegan's Wake, with whom I'm working with on stop and gos. Donna Frisbee Greenwood, Executive Director of Inner City Games. That's just a few names from an '03 list. 46 040797 - Housing - 12/13/04
Particularly talking about... One of the things that we found to be disturbing is, for example, this railroad trestle at 82nd and Lancaster Avenue --
And that is in Councilwoman Blackwell's or Councilman Nutter? Help me out. I'm not clear about the boundaries.
One of the things that when we talked to developers, because as you know, we funded the developer at 56th and Lancaster, the shopping center there. We funded a number of businesses along there. We've also paid very close attention to what State Representative Bisher and her organization up there had to say about the Lancaster Avenue corridor. To a developer, they asked about... To a developer they asked about what the disposition was, what the plan for that 47 040797 - Housing - 12/13/04 particular station was. And when we start to look at people who are investing their life savings and sometimes their personal property, you know, it seems to me that we need to hold the Federal Government a bit more accountable. Now, I understand, through my own research, that Congressman Fattah has appropriated some money for the restoration of that particular stop; the money has been appropriated for it.
Well, in instances like that, procedurally, what then happens with the connect, with the... You mentioned the state rep with the city rep, because I think that that's the core of the issue, to ensure that the City Council member is then in the loop of information.
I'm glad you brought that out. One of the main reasons that I'm glad to be here is because insanity is to repeat the same thing over and over again. I do not want to offend this Council not another time. So what I hope to come out 48 040797 - Housing - 12/13/04 of this is a communications process that allows me to let you know what we're trying to do, and you to tell us what you need done, and so that we can avoid this kind of thing.
The Councilwoman is correct, because when it comes to Lancaster Avenue, that's a dividing line between the 4th and the 3rd, myself and Councilman Nutter. So, he has one side. I have a developer for my side. And I will tell you, you know, development is what I like to do, and it's what I enjoy doing, and what I believe in, and where I focus my activities, that and education. So I have a developer for every inch of the 3rd District. We fight hard. It's what I spend my time on. And it presents a problem. I may run into, as I did last week, Councilwoman Bisher, who tells me that 49 040797 - Housing - 12/13/04 they're involved in something in my District. Now, I naturally have a relationship. But I have two state reps already, Waters and Roebuck, who are in mine, and I have a new one, Tommie Blackwell. So I already have three of my own state reps. I have two State Senators, Vincent Hughes and Tony Williams, and then so if I have to deal with another state rep, who's not necessarily... She's not in my District. So I have no need to do that, unless it's on our dividing line. And while I don't know the City dollars are focused there, then that, you know, is different. If Councilman Clarke and I are working on a common area, that's different. We know to work together. But I have no reason to go to somebody, outside of those people I just named. And it does create a big problem, when they're working on something or when the City is funding projects that I don't know anything about. I got enough of my own I 50 040797 - Housing - 12/13/04 want to fund. I may decide that I don't want one funded someplace else or at least have the opportunity to have the discussion. And that's part of the -- That's part of the question. What about State Redevelopment Capital Assistance and the state budget? You've talked about the City budget. How much of those funds --
Well, we've gone after particular -- And again, I want to just underscore how we communicate better in the future. But we've gone after a million dollars in state money, to provide low interest no interest loans to the same distressed businesses that are suffering from the el project. Now, we are going to wait for your instructions on how we kind of work that through the process. But we've applied for that. We have already received a grant for 51 040797 - Housing - 12/13/04 $750,000 to do bus stop shelters. And we want to work on how and where they're -- and particularly for West Philadelphia, in the area that has been negatively impacted by the construction. So we want to work on a plan that makes sense.
That we've already gotten. And we want to work on the design of those shelters, where they're located and when they should be implemented because that construction has a long time to run.
Yeah. In fact, as all of you know, in Cobbs Creek it's off. And they don't even have anyone, nor did they tell us even in our hearings when a new company would be hired. They fired him the day of our hearings. It was obvious they knew he would have big issues about what was happening to 52 040797 - Housing - 12/13/04 the businesses. They fired him that day, saying they were 712 days behind. But we still don't have anybody now doing the work, when the completion date isn't until the end of '08. So we have big problems. And while we're on the S.E.P.T.A. project, as many of you know, this initially started in 1999. We have big problems. We've gone to our... I've gone to both Congressmen. I've gone to our state folks. We've done everything we can to try to ask for dollars for these people. And finally, after there was none forthcoming, we did as I always say, what Booker T. Washington said, lower the buckets where you are. We came to Council and took out our own budget, S.E.P.T.A.'s budget. We didn't want to take out of our budget because the City can't afford it, but out of our S.E.P.T.A. money. The Council saw fit to take out $500,000 last year, and the businesses got a check to between $2400 and $3200. It's 53 040797 - Housing - 12/13/04 actually $3163. And this year we put in a similar bill, but instead of $500,000 in S.E.P.T.A.'s budget, we made it seven fifty, to allow $250,000 for community entity to clean it, so we wouldn't have to keep begging all the time for them to clean, we wouldn't have to fight them like we did to get port-a-toilets where workers were urinating on front lawns, we wouldn't have to fight everything it takes to get it down. And I say this to say that, you know, and now the Mayor... We believe that as part of the S.E.P.T.A. budget money, you know, we don't want to tie it up with the City budget. We don't have those dollars. But the S.E.P.T.A. budget we want those dollars to come from. And we asked... It was our choice as to how we gave the businesses the money. It was our choice, that out of this, all we asked for was that they have a Business Privilege License because it's not enough money to change anybody's life. It's only 54 040797 - Housing - 12/13/04 enough money, we thought, to let the businesses know we care, and they were hoping that somehow they can hold on because as all of you know, the biggest problem with S.E.P.T.A. is that they go a block, and then they work there a month. And then they close it off, and then they go back there again. So, as soon as the people start coming back a month later or month and a half later or two months later, they come back and close it again. So, businesses never get a break. But all of these things, we say we chose PCDC. In spite of all these issues, we asked PCDC to write the check that we signed. You know? No matter how many problems we have, all of this -- You know, PCDC didn't help us come up with the idea. We begged everybody for money. But we have really, really, really been fighting hard. And we tried to work with our City agencies, to try to get these businesses some help. But we signed the check and we made 55 040797 - Housing - 12/13/04 PCDC to pay the conduit for the money. Could have used anybody. We didn't have to use PCDC. We could have used any non-profit, but we try to work with the agencies that are available to us. We just need you to work with us and to, as a point of these hearings, realize that we're here. And insofar as I'm concerned, and I believe I can speak for Councilman Clarke and Donna Miller, when I say when you're working in our districts, we got to be included. We've been around too long. We have our plans. (Applause.)
We can only end up in having problems when we are not included in the issue. You mentioned, too -- We still have a lot of questions. You mentioned something on...
Can you please 56 040797 - Housing - 12/13/04 finish real quickly for me this --
Well, basically, what we want to try to do is, where these gateways are -- And I don't mean to always point out what other communities are doing. If you see these same trestles in Bryn Mawr or in Delaware County, they're painted, they're well maintained, they almost blend into the scenery of the neighborhood. In our neighborhoods, they're not maintained. What we've discovered in some of our clean-ups, Councilwoman, is that the urban budgets for a lot of the maintenance are cut, as opposed to the surrounding counties. And we really need to take a hard look at that and how these railroad trestles and public properties are maintained versus suburban areas versus inner city areas.
Both. In some cases they're state dollars. In other cases they're federal dollars. 57 040797 - Housing - 12/13/04 But it's not just these kind of railroad trestles. And I won't name -- I will not name the large chain store. But we were doing a cleanup in, I believe, your district (Indicating Councilwoman Miller). And we approached one of the major drugstore companies as to allowing some of their employees to help us with the cleanup. And when I asked about, you know, the shrubbery in the area, they told us that their budget for maintenance was cut. But when you go outside of the City of Philadelphia, they maintain it. And at some point we have to address that, and take a look hard look at both these federal transportation bridges and trestles, but also is there an equal application of maintenance funds for suburban shopping areas versus inner city shopping areas. We need -- This Council needs to take a hard look at that.
There is a letter that PCDC sent to various businesses. 52nd, 53rd, 54th and Market, 56th and Market. I have three or four copies of them here. 58 040797 - Housing - 12/13/04 And the letter reads as follows: Dear Miss Johnson: Enclosed is your check for the S.E.P.T.A. transit impact at West Philadelphia Small Business Retention and Financial Assistance Program. During this S.E.P.T.A. project and at any other time, please feel free to contact us here at PCDC and our neighborhood commercial revitalization, NCR division, for any technical assistance you may need. And NCR's direct telephone number is 215-790-2235 or 215-790-2233. What technical assistance are you offering?
We offer a wide variety of technical assistance from contracts, with the City of Philadelphia helping them prepare for that. We offer grants by way of facade rebates. We offer --
For the S.E.P.T.A. transit impact. As you know, since at least the year 2000, we have been asking you all to come up 59 040797 - Housing - 12/13/04 with a program for low interest, no interest or grant for facade treatment. We've been doing that, not only for the S.E.P.T.A. project but overall. So we'd like to know, again, for the S.E.P.T.A. people what that means, and then you can expand the answer.
Well, first we had some dollars that -- Med Cap Funds that were federal dollars. And I think we met some years ago when this first problem started to arise. What we were hoping to do was get those old dollars reprogrammed by the Federal Government, so that we could use that in a fashion and grant fashion. Believe you me, the Federal Government had no interest in doing that. And in fact, when we asked them about it, they then sent us a letter, requesting the return of those dollars. So, we had to do that. So, what we were able to do was work through the local Congressman, Congressman Fattah and Congressman Brady, to get the 60 040797 - Housing - 12/13/04 F.T.A. to re-appropriate new money... to appropriate new money which is $750,000. But specifically what they said that it could be used for was enhancing of transit stops. So the best thing we could come up with was bus shelters for that. And what I was then -- What I then did was contact Senator Hughes up in Harrisburg and asked him if there was any relief. What he was able to do was put in a budget, $1 million for low interest and no 14 interest grant loans to S.E.P.T.A. impact at West Philadelphia businesses.
I understand. And I've been hearing that. But as you said, we've been trying to get money. These letters were sent out as recently as November 1st, offering assistance, you know. And yet I believe that we have to keep hope alive, as Jessie Jackson said, but I also believe that we have to be honest. And I don't offer people assistance 61 040797 - Housing - 12/13/04 I can't provide or I don't put myself in a position to have to respond to something, if it's not the real thing. So if you didn't have money November 1st to --
We have money. We have money. Our loan dollars aren't impacted by the grants that we're talking about. As a matter of fact, we did how many deals last months? In West Philadelphia? UNIDENTIFIED MAN: Six.
Wee, we know that for the S.E.P.T.A. project businesses for the first year were telling me, I'm down percent. 9 The second year they were down 30 10 and 40 percent. 11 A lot of them -- One person they 12 testified the other day, he had 80 people. 13 He was down to 10 last month. 14 He's there by himself. Their credit 15 is bad now. They're having a hard time 16 keeping their lights on, you know. 17 And I'm sure at this point it's very 18 difficult for them to have any collateral or 19 to have the ability to borrow. 20 I don't know if the City would even take some of them. They're trying. But in terms of the S.E.P.T.A. project, I don't know if they would even qualify for them, which is why I asked and have been forever for a grant program or lower note interest program or 63 040797 - Housing - 12/13/04 combination program. You know, I've been asking for this stuff, you know. And then -- But you send a letter out saying, you know, call me. And I don't even know what you're offering. And I'm not putting myself in the position to have to respond to what I don't know that you're offering.
Well, you're right. Our communication needs to be better. So that... You know -- And for the record, we do grants. And we did how many grants last week or last two weeks?
$177,000 worth of grants. Even though they're not specifically S.E.P.T.A. related grants, we still did nine deals last month in that area. And we're going to continue to -- Now, hopefully the cavalry comes and brings us some more money. But until then we're going to use the ammunition we have with our current programs. 64 040797 - Housing - 12/13/04 And we're going to keep lending, and we're going to keep providing grants. And we're not going to wait until the Federal Government decides to catch up to us. (One man applauds.)
Well, I'm glad your clapping. I would like to know where they are, you know. And I'm not saying they're not there. I hope they are. But we really want the information and the dialogue. You mentioned on that in the past years an average of 223 building permits for new housing development happened in West Philadelphia.
Do you know where in West Philly? You're talking about just new housing starts, are you talking?
No. They were -- There were new housing permits for new construction. And that's -- A lot of it has to do with your efforts in developing low and moderate income housing. So the total number of new housing 65 040797 - Housing - 12/13/04 permits were 223. I think it's two years, last two years?
Yeah. We're doing stuff all over my district. At any given point I had developers who are 7 ready to go. 8 You've also mentioned on coalitions with town watch group and dealing 10 with crime prevention. 11 And I wanted to know what your role 12 is in that arena. And crime prevention 13 obviously involves local police district, 14 neighborhood volunteers, et cetera, et 15 cetera, and how PCDC is involved with those 16 organizations and agency, and how you see 17 your role therein. 18
Well, one of the 19 things -- And we have to deal with the 20 reality of budget cuts, just like every other City department, when we start talking about firehouses closing and police being laid off. Our budget was also cut. We used to be the premier, premier anti-crime organization for small businesses. 66 040797 - Housing - 12/13/04 We can't continue to do that. We used to do security rebates for small businesses that added the roll-down gates and things like that. We do a lot less of them. How many did we do...
We only did seven because our budget was cut. But one of the things that we want to do is work with CDC's to create these town watches, connect them with the business associations because -- I don't know. If you read the papers lately, a lot of the NTI impact has driven a lot of the drug dealers off of the corners, but they've taken up new vocations. And one of the new vocations is robbing our inner city merchants. If you read the papers, not a month goes by without somebody being robbed and seriously harmed. And we need to address that, through working together, to try to deal with that. We were in Council -- No. State representative Curtis Thomas had us at 67 040797 - Housing - 12/13/04 Germantown and Lehigh, up there dealing with issues up there. And these businesses are risking their lives in these corridors. And one of the things that we want to do, and with the S.E.P.T.A. money that we're using, is create cameras that actually are security cameras, that are associated with those bus stops, to try to at least stem some of that crime. And that's what we've been --
Well, we would like to have that discussion. One year we even shut down 52nd Street ourselves, took all the vendors, closed them down, pulled down all the grates and painted them to get rid of graffiti, cleaned it up, power washed and all of that. But again, those were just initiatives we believed in. We're always begging up and toughen up all the help we get. But we never feel that there's anybody we can collaborate. We just decided to do it. We took it upon ourselves, shut it 68 040797 - Housing - 12/13/04 down, cleaned it out, power washed it, and painted it all. And all that graffiti has not come back. But crime and security and those security gates are an important issue to us. Having said that, let me defer to someone else. I have other questions, but let me defer to Councilman Clarke.
I want to follow up first on some questions early from the Chair, with respects to your budget. You're funded to the tune of 80 percent by the City. Is that primarily from CDBG dollars?
The contract that you have, is it an annual contract? 69 040797 - Housing - 12/13/04
We have -- We have indeed a contract, and it has performance standards: The number of loans, the number of rebates, the number of technical assistance provided. It is spelled out specifically.
Is that contract open to any entity or is it just solely a contract renewal with your organization? Say, for instance, Joe Blow, not to, you know, imply that's the type of organization you're running, but for lack of a better term...
...was interested in providing a similar service as you are, your agency is, would they be in a position to apply for the grant you get?
All right. Is it an RFP or... 70 040797 - Housing - 12/13/04
We do an application to the City of Philadelphia. That application is either accepted or rejected by the Commerce Department.
Has there ever been any discussion within your organization, providing additional services? Sometimes... Part of the problem in government is that we, I think all of us, get stagnant, as we sometimes don't change with the climate, change with the times, particularly on these annual renewable type of arrangements, when an entity knows they're going to get funded because they always have, and there could sometimes be no need or no 23 thought process that makes them change to address the different concerns. As an example -- And I've spoken to 71 040797 - Housing - 12/13/04 you on a couple of occasions and other individuals about our inability to have businesses flourish in some of our low income neighborhoods, the actual organizations be developers. Earlier I referenced PHDC which is kind of a quasi housing agency that works in the City of Philadelphia, where we put that particular agency in a neighborhood where there is no strong non-profit CDC that provides housing. And we normally require that they form a partnership with a non-profit entity, in hopes of building the capacity of that non-profit neighborhood entity, to ultimately develop properties on their own. And we've been successful in several locations. Have you ever given any thought to focus more from a development perspective, as opposed to just simply a lender, or simply technical assistance or entity? So we are not subject to the whims of some national chain or some statewide chain who may or may not be interested in developing some of our 72 040797 - Housing - 12/13/04 communities.
Let me do a couple of things in answering that question. Number one, our mission is to start fires of development, meaning economic development activity; build capacity for someone else to continue to keep that development going. Good examples where it works really well is like when you have a strong business association, a development association like Ogontz Avenue Revitalization Corporation, their first planning grant they got from us. OARC took that, ran with it, and became masters of development, to the degree that I send my staff up there to learn from them.
Well, Representative Evans would say that he was the one who was the...
No. He got some of his start-up money from us. That's a matter of 73 040797 - Housing - 12/13/04 public record. And he will tell you. We provided -- When other people didn't believe maybe as much as they do now, we were the first monies in. And that's a fact. We also have been that kind of firestarter with a number of organizations. What we hope to do is, there's so much work that needs to be done, if you had ten PCDC's, it would still not be enough to deal with all of the work that needs to be done. So our job is to, in cases where people want to get technical assistance, want to become developers, to work with them so that they can eventually branch off and do the development job that needs to be done. So, we will change our role to assist in any way that you guys here dictate. We will do it. We're not trying to hog it. We're not getting complacent. We don't believe we're going to sit back on our laurels because the second that we do that, you know, we have to -- 74 040797 - Housing - 12/13/04
Are you prohibited under your contract to be a developer?
No. But there are other organizations within the City structure that has taken that mantle because --
You're focusing in on neighborhood commercial corridors.
And frankly speaking, PICD, if you don't talk about seven-figure deals, they act as if somehow they don't want to be involved in it.
And what I'm saying is, in local neighborhoods, small 75 040797 - Housing - 12/13/04 development deals... You know, the fortunate reality is that the ability of local non-profits to become developers is extremely limited. So, I'm saying --
We would love to fill that void. I mean, that's the best way I can answer it. But it is not by circumstance that we do not. And that's what I can tell you. It's not by coincidence that we have not. And that's the best I can tell you.
We would love to be the agents that helps to do strip malls and small developments in neighborhoods. That has not been our role. We are at this point --
I mean, have you asked anybody could you? I mean, you say you're not prohibited in doing it in your 76 040797 - Housing - 12/13/04 contracts. I mean, have you attempted to do it and somebody said no?
Well, there was... Under a different administration we tried to do some things where we got state dollars to do those kinds of organizational grants. And it wasn't until the Street administration that we were even allowed to apply for state dollars. We were told specifically that we couldn't go after certain types of development dollars. One of the advantages that our counterpart agency PIDC has is that when their money gets lent out, there's a certain pool of it, that when it comes back in, they have discretion about how they use it. Us, when we use CDBG do not. What goes in must be lent out, specifically. So that gives them a --
That doesn't prohibit you from changing the nature of your 77 040797 - Housing - 12/13/04 mission. What I'm trying to get you to focus on is this whole development opportunity...
who has technical capacity within house, whereas other local neighborhood groups don't.
What I'm trying to get a sense, if you're saying -- Earlier in your testimony -- I want to ask you about that in another direction, about how you were having difficulty developing the small businesses within communities because we were being basically enveloped by national chains. Then why don't you all do it?
We do do it. And if you look at the -- If you look at the list of 78 040797 - Housing - 12/13/04 businesses...
I'm talking about PCDC as a developer, where you all go out, do a development plan, you go out and get funding, you build, construct the facility that you own.
No, you didn't do 29th and Dauphin. 79 040797 - Housing - 12/13/04
We were involved -- Wait a minute; wait a minute; wait a minute. We were involved.
Okay. We also loaned money to -- Wait a second. Wait a minute. Heritage Shopping Center. So we're involved in it from that capacity.
I understand that. I'm just trying to get you to think out of the box.
Because you -- I mean, it's clearly we have troubled neighborhood commercial corridors. So, we got to do something different. 80 040797 - Housing - 12/13/04 You know, I mean, you spoke earlier about public policy determining the direction of businesses, in your earlier testimony.
And the national trend right now, as the local trend is, is to develop strip shopping malls. There was a story recently in the Daily News to talk about the advent of all of these malls in the City of Philadelphia. Talked about Delaware Avenue, talked about Whitman Plaza. And the City seems like it's supporting those efforts. So, I'm concerned that, understanding that and giving the impression that that's the direction that the City would like to go, who is going to help the small neighborhood commercial corridors, beyond what we're currently doing? Because based on what I'm seeing in the neighborhood commercial corridors that I'm interacting with, it's not nearly enough. I mean, you know, we're putting some money on the table. As a matter of fact, one 81 040797 - Housing - 12/13/04 gentleman, as an example, he actually tried to develop... expand his operations up at Ridge and Cecil B. Moore. And he went to you. That's something else I want to ask you about, this $25,000 maximum loan. More often than not I'm told that's just not enough.
It's not our maximum or our larger loan program. That's our micro loan program.
All right. So what I'm trying to understand is why can't you think out of the box and become a developer, such as PHDC?
We can. We can. Simple answer is that we can. We have not done it but we can.
Well, it's 82 040797 - Housing - 12/13/04 about the neighborhood commercial corridor development, before you move off of that.
Mr. Jones, in your testimony on , about the fourth, fifth paragraph down you talked about the International Council of Shopping Centers.
And their interest in coming into the inner city. And I guess by that I would mean the results of a survey.
That 150 people were interviewed from Fortune 1000 companies that are interested in coming into the inner city?
What happens with that type of information? Is that something that Commerce should pick up on or PCDC? I mean, what happens if there are people that are interested, there are 83 040797 - Housing - 12/13/04 companies interested in coming in to an inner city, than tell me what happens once you find that out, once the City of Philadelphia finds out there are people that are interested in coming into the inner city.
It really depends on what door that information comes through. If we find out about it, based on our capacity and what our area of expertise, we share that often with PIDC or we share it with Commerce. And we let them kind of take the ball and run with it. If they're doing the big strip mall, that's their role. If we're doing the individual transaction between the merchants, that's our role. So, we kind of work with them to do those kinds of things. It really depends on what door, if it's a PIDC deal, what door it comes through. But your point is well taken, that there's no 22 central depository of information, where everybody can kind of say, well, I can help out with this portion of the deal. It doesn't happen. 84 040797 - Housing - 12/13/04
Right. Because I would wonder, okay, if Commerce is pretty much focused on the large strip malls, I think you called them, and you guys are doing more of the individual business development --
-- who is looking at the strip itself, just in terms of developing that? Would it be -- Certainly not the business association. So, it sounds like if there is a business that's interested -- You know, sometimes I go shopping. And if I go into a store that I think I'd like to see in my district, I give them my card. I'll find out who to call. When Krispy Kreme opened on Cottman, I found out who the owner was. I called the owner of Krispy Kreme, and said, hey, I have a strip. I have a place that you could come to, you know, even though they really wanted to be where there's lots of vehicle traffic. And Delaware Avenue... You know, 85 040797 - Housing - 12/13/04 the owner took a lot of time with me, explained, you know, why and where they look. They wanted to open up on Delaware Avenue because of the number of vehicle traffic, and all this other kind of stuff. But who is recruiting businesses -- I guess that's my bottom line question -- to come to the inner city commercial -- neighborhood commercial corridors? Or is it nobody?
Well, no. It's definitely not just us. It's people within the Commerce Department and other agencies. It would depend on where -- what kind of facilities somebody was looking for. If somebody wanted to do a Krispy Kreme and they need a $10,000 -- 10,000 square foot of parking, along with a building, that may not be something that is available in any of our 43 commercial corridors. If that's the case, we would refer them over to Commerce or either PIDC. We would try to help find that individual a 86 040797 - Housing - 12/13/04 location, even though it wasn't in our corridors.
Okay. So I understand. I understand all of your answers, but one of the things that's happening, I guess as I see it -- And you said if someone is interested. It sounds to me -- Well, what's happened to me, I believe that Germantown and Chelten which you know used to be the second best, second only to Center City business corridor in the City. And it's almost like the property owners are the people that's driving the -- who they get as a tenant. I have seven dollar stores. We're getting ready to do special controls, zoning overlay, because I can not witness another dollar store opening at Germantown and Chelten, particularly if there's some other type of business that I don't know about, maybe the CDC there doesn't know about. And I would think that Commerce or somebody would be, you know, filtering out 87 040797 - Housing - 12/13/04 that kind of information, so we can start developing these commercial corridors --
You are right on point. And so is your (Indicating Councilman Clarke) comment, but let me explain what I see from this side of the table. First of all, if you look back maybe a decade ago, we were so happy to get anybody to fill a vacancy that we would have took -- As long as their operation was legal, we would let them go and get into the business. But what happened, as you're pointing out, you get a high concentration of the same type of store, and not necessarily a high quality store. We are in a better position today economically to start to be a bit more discerning and a bit more strategic about how we do it. Councilman Cohen asked me at one budget hearing -- and he asked a simple 88 040797 - Housing - 12/13/04 question but it was profound in this respect. He said what does the perfect commercial corridor look like? What is the mix of stores? What is the -- And it depends. The answer is, it depends on what you view it to be, and what the consumers in the area need it to be. You have a situation... For example, a good example is Girard Avenue right at 29th Street. Those stores are going to change radically because of the different clientele that's moving in, the different consumer preferences that they have. You're in a position (Indicating), you're in a position (Indicating) to kind of regulate some of that through zoning, through L & I, and up the standard. Again, before we were so happy to have anybody in some of the inner city corridors, we were taking dollar stores and some of the stop and gos. But today the economy has changed, and the big stores are beginning to come back. The Starbucks of the world want to do 89 040797 - Housing - 12/13/04 inner city development. Aqil was at a inner city development workshop in New York. And the national trend, the national trend is that these folks are coming back. The key, the gatekeepers are you, and to a lesser extent the PCDC's of the world. So we are not too late to develop that kind of criteria. We're actually right on time.
Can you hear me? Good. Thank you. With respect to the specific question of who's responsible and whether or not we can do that, I would think that it would probably be a special resolution of the PCDC board that would give Mr. Jones and his staff the go ahead to look at that. And also there would have to be some consideration for funding such an initiative, because it takes money to actually put additional capacity on the street. And we would be leveraging the talent that exists within PCDC. There's a 90 040797 - Housing - 12/13/04 considerable amount of economic development talent within PCDC, that would just make it easy segue into that type of development.
Also, with respect Councilwoman Miller, to your concern regarding the big box chains and what not, this is a very appropriate discussion right now that we're having because, as Mr. Jones mentioned, I attended a two-day summit that was sponsored by the Inner City Economic Forum, headquartered in Boston, Massachusetts. And they're underwritten in the line with Harvard University, Rockefeller Foundation, the Ford Foundation and Bank of America. And they're in the process now of putting together a billion dollar fund for investment in eleven cities in the urban areas. Philadelphia was overlooked in those initial target areas because we, according to the census data, we had a one percent 91 040797 - Housing - 12/13/04 population drop in the urban areas over the last decade. But they are looking to come in on the next round. They are looking to make their initial investments in June of 2005, for the very same purposes you mentioned, looking at some inner city retail development, strip mall development, and things of that nature. Now, where we have been very helpful to businesses, and what really doesn't get on your radar screen, and probably on the radar screen of the Councilwoman, Councilwoman Blackwell, is that we do -- we conduct -- provide a considerable amount of technical assistance to businesses. Within the West Philadelphia area, within the S.E.P.T.A. area, we assist companies with tax problems with the Internal Revenue Service. We help keep their doors open. We restructure their financial statements and balance sheets. We work with some of the neighborhoods, the groups and the individual businesses. That capacity can just be repackaged 92 040797 - Housing - 12/13/04 in a developmental process and facilitate what it is that you're requesting.
I just want to follow up on one line of questioning real briefly. With respects to your performance standards, is there a component that has a local neighborhood requirement in your loans or can you legally do that? I know in some of the Empowerment Zone initiatives, there was, you know, certain tax credits available associated with loans to businesses. In your loan requirements, do you have anything that talks about the direct correlation between a loan to a neighborhood business and that business hiring somebody from the local community?
We have two federally mandated requirements. One is a concept called Area Benefit which is that if a low and moderate income neighborhood is benefited by virtue of that business, we can do the loan. The second criteria is the creation 93 040797 - Housing - 12/13/04 or retention of low and moderate income jobs. So the two -- the two things that we can make a criteria --
Is that geographically required, a geographical requirement?
When you say low and moderate, I mean, in reality a lot of these smaller stores, they hire their kids. And that doesn't necessarily -- They may be low income, moderate income. But is there -- Is there some --
That is something -- That is something -- Not with federal dollars I don't think that we could possibly do that. But with a different loan fund we could probably mandate that if you tap into this level of funding, then we require that 94 040797 - Housing - 12/13/04 you do something locally. And I think that that's a good idea.
One last question. With respects to your loan fund, do you have a certain job to loan ratio? Is that one of the performance standards or is that --
In our contract with the City, we're required to show that at a minimum, one new job be created for every $20,000.
I'm sorry. John Lenahan. I'm vice president of the Lending Department for PCDC. That's a contract requirement. So, at a minimum we have to be able to show one new job for every $20,000.
Normally we do much better than that. We show normally -- I think last year was one new job for every $8,000 of loan dollars that we put out on a project, so...
And then, depending on whether it's area benefit or job creation, 51 percent of the jobs would have to be low to moderate income jobs.
In terms of those numbers, is there a breakdown demographics, as it relates to race, neighborhood --
-- by race. We have to have an income certification form that an employee signs when they're hired, indicating 96 040797 - Housing - 12/13/04 what their household income was prior to accepting the job. That normally has an individual's name and the address of where they live. And that's compiled into a quarterly report that we send over to the Commerce Department. They put that into their grantee performance report which they send down to Washington.
Can you provide through the Chair a list, say for the last fiscal year --
-- the job to loan ratio created and the demographics associated with race, ethnicity, and the whole nine yards?
I was wondering if at some point we can get 97 040797 - Housing - 12/13/04 together to take a look at the various business strips in my district, and think of a good mix, and strategize on how we can attract or what we need to do.
There are enough agencies where we could start to do something.
I have to thank Councilwoman Blackwell for this opportunity to present these kinds of options to City Council. I look forward to working with each of the members, in each of their districts, to design what we need to do to help you.
Thank you, Councilwoman Miller. Can you list CDC's? If not, you can provide it. That you partner with? We know you have a relationship with, for example, the Partnership CDC.
And CCD's, that you have provided technical assistance to?
All right. Regarding NTI, and its focus on neighborhood development that involves community based organizations, what has your role been, in terms of NTI, in dealing with private investors and other collaborative organizations? Or have you tried to keep PCDC separate or have you been involved with the NTI agenda?
We've attended a number of their meetings, and we've tried to follow where we believe logically some of the housing initiatives will go. Heretofore, though, we haven't really been directly involved with their efforts. And we had in some ways waited for them to kind of catch up to what we've already been involved with. One of the things that I would find 99 040797 - Housing - 12/13/04 helpful is, as we start to acquire some of these properties, particularly on our commercial corridors, if we could batch those properties together, we would be willing to market them to private developers through the ICSC or through neighborhoods CDC's so that they can get developed. Right now we don't have that kind of relationship.
This is another area why it's so important that we work together. At this point, Alissa Sneed, who's my program director, does that. But we create -- the residential neighborhood cannot be sustained in an island of blight without some commercial corridor regeneration. We realize that, and so we work with businesses, investors, family businesses, private businesses, and people who want to help to increase our neighborhood. One hand has to wash the other for posterity or otherwise we're only in this for the short haul. And so that's another reason why 100 040797 - Housing - 12/13/04 it's so very, very important that we work together, so that our businesses and residential community thrive together. They have to. And that's why it is very, very important that we work together. Do you assist neighborhood based minority owned business in preparing for their procurement opportunities, expansion opportunities or other opportunities and make them sustainable business establishments, in that we're talking now about preparing them so that they're able to make application, and they're able to apply for monies with the City or City related where the City's a conduit for funding.
In 1987, when former Councilman Blackwell and you helped me over at MBEC, which was one of my first real City assignments, I had an opportunity to work with a lot of the minority businesses through certification. In fact, I hold the record on the amount of contracts given to minorities and females by the City of Philadelphia during 101 040797 - Housing - 12/13/04 that tenure. In doing so, I became very familiar. And then when I came over to PCDC, a lot of those are the same contractors that needed money. So, we have two programs that I think really help them. One is the Housing Contractors Assistance Program where businesses that have contracts with PHA, PHDC, are able to finance their contracts through PCDC. So that's one way that we help them. Another way that we help them is that we have one of the best business libraries -- and I encourage you and other Council people to come over and take a look at it -- in the country. We have 250 business plans in our facilities. And Mr. Sabur houses that. We work with them individually to increase their internal capacity. When he talked about working on the books, when he talked about preparing them so that they can take the public scrutiny of 102 040797 - Housing - 12/13/04 doing contract work with the City of Philadelphia, we assist them currently to do that. We also have the Comcast loan fund, which was funded when City Council struck the deal for franchising out some of the cable franchises. We received over a million dollars from Comcast to do short-term lending programs which we specifically give to minorities and females. So, we've been working those programs over the years.
Oh, it's very real. It's probably one of my more successful loan funds. In fact, I think in all of the years that we've had it, we've only lost, what, $800, I mean, and compared to our other programs, that's phenomenal.
Sorry. 103 040797 - Housing - 12/13/04 Please take the microphone.
I'm sorry. In the brochure in the back of the booklet, 2003 year accomplishments, gives a breakdown on the Housing Contractors' Program and the Comcast and the PMBDA Loan Fund program. Comcast and PMBDA are designed to assist certified minority women owned businesses obtain short-term working capital financing, to fund the up front cost of the contracts that they receive either from the City, the state, or the Federal Government. And it's low interest money, and it revolves on a assignment of contract proceeds basis of the payments come into PCDC. We re-lend the money out until the contract is completed. Then any free proceeds go back to the contract. It provides them with the capital they need up front to go after contracts they wouldn't necessarily have the resources to go after otherwise.
We can't 104 040797 - Housing - 12/13/04 hear you at all.
One of the things that we note -- A lot of times when we do stale statistics, you don't really understand or at least a lot of people don't understand the impact of giving them that money. That relates to maybe close to a thousand housing units that were -- closer to 1500 housing units that minority contractors were able to complete, based on them having the working capital to do that. So, the money that we got, based on what City Council did with the cable companies, was empowered those minority contractors through that program.
As you know, I have Urban Cable Works, as does Councilman Nutter. So that's a whole 'nother story. So we don't have the ability -- We don't have the programs that Comcast does. And we have other programs that we have problems that we've tried to let the owners of the cable company know about it. That's a 105 040797 - Housing - 12/13/04 whole 'nother issue. We won't bring that up today. Mr. Sabur. We talked to Mr. Sutton, and et cetera, and those involved, but we still have the issues.
I'm sure you do. There is one bright spot with Urban Cable Works. Most recently we deployed the first $125,000 of $250,000 obligation that had, you know, after ten years. It's just come around. But what we've done is basically put on the street within the last -- the last six weeks close to $100,000 in micro loans to businesses in the West Philadelphia area, 19139, 19143, 19131, et cetera. And pretty much most of the businesses that we funded are in your district. And the model that we used could be replicated with respect to the businesses in the S.E.P.T.A. area. These are no interest loans. The maximum has been about $20,000 per business. 106 040797 - Housing - 12/13/04 They pay up front fees. They pay a one percent fee for commitment fee and administration fee. Then there's a technical assistance fee of three percent. So all they pay is five percent on the loans. And then they pay back the principal over a two-year period. We work with them to make sure that their books are in order, that they're managing the cash properly, that they're filing their tax returns, and that they're really establishing a banking relationship with these dollars. And we feel extremely comfortable that this looks to be a success, with respect to this program. So --
So this isn't about cable. This is about small business loans overall.
We're talking about retailers, fruit and vegetable retailers, restaurants, security companies, cleaning systems. There's one company, a very inspiring story, a young lead by the name of 107 040797 - Housing - 12/13/04 Florence Thompson. She received initially a $10,000 loan from us, received another $4,000 last week. She has a contract to clean the bridge over at 40th and Walnut. And she's employing nine people. And the work has gone so well thus far that they've given her an additional carpet cleaning contract. So... And we're working with her to develop some other contracts in the University City area. So, these -- And these small amounts of dollars are really nothing to sniff at because we have internal studies that support the fact that the average business gets started with about $7500, and most of your Fortune 500 firms got started with less than $10,000. So, we're just really just building on a tradition of entrepreneurship, doing what they do best, and having the capital available to assist them in that regard.
Well, we would like to have a list of those people. And we would also like to have, if you have a 108 040797 - Housing - 12/13/04 general statement or that kind of... or written down that kind of story that goes, the Horatio Alger theme that you can make it. We would really like to have that. We meet with businesses. We've had a lot of -- As you know, we've had two Echoes From Africa that we sponsored in our District. And we have an increasing African population. We've had many meetings with them. We usually meet at University Sciences. We meet with the universities. We met with Penn. We had some problems with people, some individuals, who will remain nameless for the purposes of this hearing, who were harassing these businesses, and calling L & I on them. And, of course, the people who were doing that are no longer in -- no longer have retained their positions who were fighting African businesses because they decided they didn't want them in University City. Those people are gone. But my point is that we're 109 040797 - Housing - 12/13/04 meeting -- we meet with these businesses. We have an ongoing relationship with them. So we really need the opportunity to be able to let them know that they have opportunities to invest, other than those that we kind of independently try to come up with. Thank you. Alissa Sneed, again, is the point person for our African relations. We meet with them regularly. We do a lot with them. And, you know, thank God they're still hanging in there. But we really need the assistance that the City offers, to help them and to help keep them going on a wider scale. I think I've just about completed most of my questions, especially after I got sidelined on questions dealing with the homeless. That always keeps me going. We are very pleased to read about the types of businesses that you do support in my district. I see the pictures. But like I said, we would just like to be included. Many of them -- I use them 110 040797 - Housing - 12/13/04 if they're in my district. You know, I use the district. I go to the Bridge Movie. I shop at places. Of course, one person is a former opponent. Short of that, we want to work with everybody. We just want the opportunity to work cooperatively. You know, I'm in this for the long haul. We're committed to our district. I'm committed to my City. I'm committed to people who live, move here, work here, and I believe in it. And I know it's what God has given me to do. So, we are going to do it anyway, but it just makes it a lot easier when we don't have to fight about helping people because we're going to do our part. And we are going to -- And it's what we're supposed to do. But we're all in the City together. We know there are three branches of government, the executive, legislative and judicial. But we have to try to work together to improve the quality of life for people 111 040797 - Housing - 12/13/04 here. We've done -- You know, God has blessed to do a fantastic job. We've had a couple billion dollars invested in West Philly. And we on the move. We have more meetings today. We you know, I'm on the PHA board. We fought to be on that board. I'm for anybody doing anything on development. And we are going to be there, and we're going to work with people. You have to. And the market is better. You know, people are buying, and people are trying to get housing. People want to develop housing. We have small developers who want to buy one or two or three or eight or ten, on up, properties. They want to invest. We need a little bit of capital. We have private -- We work a lot with the -- with minority contractors, from electricians to you name it, plumbers, to people who want to do drywall, the painters who want the opportunity to work. We're always dealing with the pressure of that relationship, to try to keep 112 040797 - Housing - 12/13/04 them going, and then to try to grow minority developers.
And we're happy to do all of that, because it takes all of us together to help everybody. And it's what we have to do. You know, none of us has the ability to do one thing at a time or to do just one issue, to deal with one issue. We have to deal with all of it because all of it makes up a whole life. And leadership is expected to do that. We've had these hearings only to say that we want to work together, you know. I don't like to fight. I only fight if you make me, but I will fight if I have to. But I'm here. You know, I'm here. I'm trying to do the right thing. And Lou used to say, the late Lucien Blackwell used to say, open rebuke is better than secret love. So I think after these years, that it's time to, you know, put it on the table to say, let's start from here. Let's try to work together, collaboratively, to help people. 113 040797 - Housing - 12/13/04 As you know, again, this is the third time, Alissa Sneed is my project developer. She's out there all the time. We're doing it, you know, one way or the other. And when one door closes, you know, God always opens another. So, we're going to work with the City one way or the other. And after a while, you know who's who. You know who works. We all know who works in government, and we know who doesn't. You know where you go and where you don't go. And you know if you have to go from the back door or front door. But we want to be here. We believe in it. We created this Committee. As you know, it's a new committee, Housing and Neighborhood Development and the Homeless, for this very purpose, so that we have an opportunity to deal with these issues that affect neighborhoods. And we just want the ability to work together to accomplish those ends. So having said that, is there anyone 114 040797 - Housing - 12/13/04 else who would like to testify? )
Is there anyone else who would like to make any statement with regard to the Committee or this Resolution? (No response.)
All righty. We will then recess, subject to the call of the Chair, and we will try to, from here on out, work it out so that we can move on together. Thank you all very much.
Thank you, Madam Chair. (Hearing concluded at 4:35 p.m.) 115 CERTIFICATE I HEREBY CERTIFY that the proceedings and evidence are contained fully and accurately in the stenographic notes taken by me upon the public hearing of The Philadelphia City Council, taken on December 13, 2004, and that this is a true and correct transcript of same. _____________________________ DAVID A. DEIK, RPR and Commissioner of Deeds (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)