Mr. Chairman, I was not involved before that lawsuit was brought; that was my first involvement. But since that lawsuit was brought, being the Right to Know Act, we provided box upon box of information to the community, and there was reference to us only doing it pursuant to order. That was simply not the case. There was one document, the Master Development Agreement, which was not a signed complete document. 125 11/19/01 COMMERCE/ECON. DEV. - RES. 010218
I understand that, and I don't mean to interrupt you. The only reason I raised that is in the context, if the case is going to be, We've always been open and honest, we've shared everything anybody ever wanted, I just think it's important to at least note for the record that at some point in time, that wasn't the necessarily the philosophy, the result of which resulted in the filing of that kind of action. So, I mean, it hasn't been a complete free flow of information from the start. Maybe that's the new -- you know, maybe that's the benefit of you guys being there that information is flowing, and now, because of this other action, I'm sure you've had to truncate to some extent what you're sharing. Let me go back to the last question that I asked. You have a matter pending in Federal Court; whatever is going to happen with that is going to happen with that, and you will battle that out in a different forum. What I want to know is, when that matter is disposed of, when do you propose to bring your client to this chamber and give testimony before this committee?
Mr. Chairman, we will -- 126 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 Mr. Greene is ready, willing, and able, when that matter is disposed of, to come before this committee and testify.
And what are you prepared to offer us today? Are you in a position to now take questions about the matter in front of us?
Mr. Chairman, again, because of litigation, I think what we can offer is to provide to this committee Mr. Greene's written testimony. It's going to be understood again that it's not going to -- it's not going to be as complete or specific as it -- or detailed as it might be absent the litigation. And secondly, I think we're prepared to recommend or suggest that if this committee were to forward written questions to Mr. Greene, that those questions Mr. Greene could review with counsel and respond to.
And, Mr. Chairman, let me just jump in here. This is not a case where the subject matter of your resolution is tangential to the subject matter of the litigation; they're totally consistent. I mean, the questions that 127 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 you're asking are exactly the issues that the plaintiffs have brought an action about. So that just heightens the sensitivity of giving testimony in that situation.
Well, Ms. Fletman, I think as long as we understand that the resolution 8 itself and the components of it were introduced back in April of this year -- I don't remember when the lawsuit was filed, but I am sure that you are not at the moment trying to make any connection between the resolution introduced in Council in April and the pending litigation, notwithstanding any similarities that you may read into it or the like. Are you trying to say something that you're not saying?
No, Mr. Chairman, I was not, I was not. All I was saying is that the subject matter of the questions here is exactly the subject matter of the federal lawsuit. I certainly didn't intend to suggest that there was a connection; only that that is the source of our concern in terms of having our client come and testify.
With regard to the issue of submitting questions, you know, I think the last time I sent a paper into the teacher was about 128 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 4th grade. And so I'm not going to get into sending a whole host of questions over and then we're going to have a poring over them by three expert lawyers and whoever else might be involved in this particular process. The job I do in this kind of forum is, I ask my questions. I haven't even thought of all the questions that I might have for Mr. Greene in this particular circumstance. What I want is the director and all of the pertinent people associated with PHA or any other agency that's been involved in this process, I want them here, I want them in those chairs, and I want to ask my questions directly. I'm not going to send over a list of questions and get back whatever response is legally allowable at the time.
Mr. Chairman, I didn't mean to suggest that if we were to proceed in that fashion, written testimony, written questions, that would be the end of it. What I meant to suggest is kind of an interim measure, that that's what we would suggest or recommend, an interim measure until, as you suggested, the litigation is disposed of. 129 11/19/01 COMMERCE/ECON. DEV. - RES. 010218
Well, again, that will be handled by, you know, other parties, and certainly not by myself. Let me ask this question, then. I don't necessarily know that this is either the subject of the suit, because I haven't read the suit, I'm not in the suit, but I think it is pretty much a yes or no issue. There's been a lot of discussion here this morning, for instance, about the issue of the self-sufficiency part of this HOPE VI application. Can you tell us, based on whatever knowledge or information you have, what is going on with that, who's doing what with that, and is that component working?
No, Mr. Chairman, I don't have information that I can provide you on that issue.
Okay. Do you have any information with regard to the Delta report that was done during, I believe, the course of the summer that was forwarded to me back in July?
Can you respond to any questions about it? Have you read it, have you 130 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 looked at it?
That report is part of and is a potential piece of evidence in the litigation that is ongoing. I don't think any member of this panel is prepared at this time to discuss that particular report.
Because I think the circumstances surrounding it, whatever you mean by "information," could lead to certain avenues of inquiry that would not be appropriate, given the pendency of the litigation.
Well, let me ask this question, 'cause it's mentioned in the director's letter that there are some, I guess, counter suits that may have been filed against some of the individuals who live in the neighborhood. Now, why is it that they're able to be here with us today and testify about whatever it is that they want to testify about, but on the PHA side, there's no 23 ability to say anything about anything about documents that are kind of signed, sealed, and delivered from many, many years ago that I assume 131 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 are not going to change? Can you explain that to me>
I assume they either have not consulted with their counsel or they have gotten different advice from their counsel as to what is appropriate in this forum.
Okay, all right. So what -- why don't we -- let's kind of cut to the chase. What is it that you want to share with us today other than the fact that your client can't be here today?
The willingness of Mr. Greene to -- and the Housing Authority to respond to written inquiries at this stage, and the commitment, once the federal litigation is resolved, for Mr. Greene and other members of the Housing Authority to appear before this committee and make whatever appropriation is appropriate at that juncture and to answer whatever questions might be appropriate at that juncture.
Okay, let me ask this question. Let me go back to the Delta report for a second; you've seen this report?
Do you have any reaction to the statement in the report that East Falls is an average location?
Mr. Chairman, I think what you're hearing -- we are counsel, and I appreciate your stating that maybe we've been helpful in expediting somewhat the flow of information. What we think or don't think is, with all due respect, not entirely relevant. It's the Housing Authority, you know, that is -- that is the party that's going to make things happen or not, and what it thinks about that report or doesn't think is what's relevant. And what we've tried to say is had the residents, had the community not seen fit to file 19 the federal litigation, but instead, play out the proceedings that were authorized in April, and then they weren't pleased or happy with the testimony, perhaps then filed suit, we'd be in a much better position to answer your questions. We understand you want answers, you want information. We've tried to do that in an informal 133 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 context. We can't do that, we don't believe, in a formal context.
Give me a sense of the status of this much-discussed litigation.
We have a fully briefed motion to dismiss pending before Judge DuBois of the Eastern District of Pennsylvania.
And do you have a sense of what's going to happen either way, or when, or is there a schedule, a timetable
There's not -- a federal judge decides when he or she decides. I mean, there's no schedule, you know --
If the judge rules against our motion, the litigation would proceed, and we 134 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 would go into discovery.
Okay. And what happens as it relates to the development while all of that is going on?
The plaintiffs did not move for a preliminary junction, so construction goes forward.
So you just keep doing whatever you want to do. (No immediate response from panelists.)
They keep constructing, consistent with the plan that's been approved by the various regulatory agencies. There is nothing at this stage, nor was there when the lawsuit was initiated, that precluded the plaintiffs from bringing a temporary restraining order motion and/or a preliminary injunction motion seeking to stop the construction at the site. They chose, for whatever reason, not to do that. Therefore, the construction is proceeding on phase one, which, as you know, is fully financed upon closing, it was in December. 135 11/19/01 COMMERCE/ECON. DEV. - RES. 010218
Why would you start it if you don't know how you're going to end it?
There are a number of factors that go into deciding what will and will not be built in phase two, contingent in part upon phase -- the completion of phase one successfully. That is a matter that is at issue in the lawsuit and the other ancillary pieces of litigation.
Okay. Do you have any anticipated -- now, you filed your motion to dismiss in August.
Correct. And then the plaintiffs responded. 136 11/19/01 COMMERCE/ECON. DEV. - RES. 010218
So everybody's responded to what they need to respond to.
So we've got a July filing and we've got an August motion to dismiss, and everybody's fully briefed on that.
There are, in fact, two motions to dismiss. Outstanding there is a motion from the Housing Authority and a motion from the United States Department of Housing and Urban Development.
I -- you're asking -- I'm not sufficiently versed in the difference between the two. I know that there were machines moving earth 137 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 about.
Construction generally means that something is actually built, site prep usually means something's either being taken down or earth is being moved around. Those are -- I mean --
And my answer is, I don't know the difference. With respect to what I personally viewed at the site, which is what I'm basing my answer on -- I don't know the difference -- I assume that they are engaged in site preparation.
Well, this has been very fruitful. Thank you so much. (Laughter.)
Are there representatives from the various development companies here? (Witnesses come forward.)
Mr. Chairman, Councilman 138 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 DiCicco, my name is Robert Totaro, T-O-T-A-R-O. I am Vice President of Penrose Properties. Penrose Properties has partnered with Universal Community Homes through an entity known as Penrose UCH LLC, which is the managing member of the developer entities, Schuylkill Falls Redevelopment, LLC. Thank you for the opportunity to appear this morning, or this afternoon. I would be --
Why don't we get the other gentleman identified and then we'll know who's who.
My name is Shahied Dawan, and I'm the Chief Operating Officer of Universal Community Homes.
Mr. Chairman, I would be happy to do a variety of things, whichever you think is more useful to you. I would be happy to address the --
Do you want to spell those things or do you want to leave it to my imagination?
Either way. I would be happy 139 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 to address the provisions of the resolution, the comments that various parties testifying this morning have made, and/or respond to questions that you or other committee members may have.
Why don't we do a combination of that, although, again, to the extent that you can --
-- kind of not -- well, it's a fairly long story. If we can, you know, operate, maybe within the last year or so and not go back to the history of clock-making, I'm sure we'd all appreciate it.
That's convenient for me because we have only been involved -- that is, Penrose UCH LLC -- since February of the year 2000.
We were invited by the development of record, Integral Group, in partnership with Enterprise Social Investment Corporation to compete with three other locally-based -- that is Philadelphia-based -- developers to be admitted to the partnership they 140 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 had established to act as developer.
I honestly don't recall. I believe one was Michael's Development Corporation. Another one may have been Beacon, although I believe they declined to participate.
The process was that Integral Essex circulated a RFP, if you will, a document to which they asked each prospective developer to address in written form. We did that, were subsequently contacted by representatives of Integral Essex, and negotiated an agreement by which we would be admitted as the controlling member of the developer entity.
We -- the very first thing I did was to meet with the Schuylkill Falls Resident Council leadership, even before meeting with 141 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 Integral and Essex, and even before meeting with Director Carl Greene. And as a matter of fact, for the next two weeks, met seven times with the Schuylkill Falls residents to determine their needs and interest in moving the development forward.
Well, let me ask this question: From your perspective, what are the changes or the differences between the 1997 plan and the plan that you're embarking upon now?
There is more unsubsidized market-rate housing in our current plan than there was in the application itself. That's the basic difference.
There was no -- not a single unit in the HOPE VI grant application was an unsubsidized housing unit, not a single unit. And in our current proposal --
The document is very clear, and it's a shame because language is subject to interpretation, and I'm not here to argue any 142 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 particular definition of specific phrases. I have no vested interest in the original plan. We are essentially mechanics, we are implementers. We would love to see the project achieved, the interest of all of the constituencies in this development, and I think you recognize there are many, and their interests vary, and it is a difficult and delicate balancing act.
Let me make sure I'm understanding what you're saying. Are you saying that the original plan, and as we've heard from many of the people testifying today, in the concept of the 50/50, 50/50, are you saying that the original plan did not include 50 percent home ownership and 50 percent rental, 50 percent subsidized and 50 percent unsubsidized?
It did include 50 percent rental and 50 percent home ownership. However, 100 percent of the rental and home ownership -- that is, 100 percent of all the units -- were subsidized in some fashion. And I've heard some of the comments about what constitutes market rate, and it means no 25 subsidy in support of the housing. I mean, Society 143 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 Hill Towers was heavily subsidized through the urban renewal program. Every suburban development which occurs is heavily subsidized.
Are they $500? I mean, do they sell for $40,000, do they sell for $200,000? I mean, what are you talking about?
Are you saying that there is any public money in something, it is, quote/unquote, subsidized?
Okay. And do you think that the average person would consider -- oh, let's say the Rittenhouse, which was the subject of a massive tax abatement, do you consider that to be subsidized housing?
Okay. Do you think that any average, regular person walking up and down 144 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 the street would consider the Rittenhouse over at -- I don't know what the address is over there -- 210 Rittenhouse Square, that that would fit anyone's normal definition of, quote/unquote, subsidized housing, as compared to this discussion about public housing?
No, I do not. And that makes the point that the phrase has meaning to various people.
And we're dealing with programs that have specific definitions and specific limitations and specific constraints, and we have to live within those. Again, seriously, we would welcome any modification to the plan or proposal which adequately addresses the interests of all of the constituents, not one side or the other, which is financially feasible for implementation.
And which the agencies involved will approve. And that includes the PHA, the City, the Pennsylvania Housing Finance Agency, the Redevelopment Authority. 145 11/19/01 COMMERCE/ECON. DEV. - RES. 010218
The U.S. Department of Housing and Urban Development, they all have a say.
I understand that. So tell me, what steps have you taken to try to make that happen?
We convened a meeting with the director of the program, the federal program
Eleanor Bacon at the time was the director of the program. We worked with her staff and with Senator Specter's staff.
I'm going to say summer of the year 2000. And we proposed converting 50 of the home ownership units to market-rate units without subsidy and without restriction on the income of the buyer.
Okay. So tell me what's happened in almost a year and a half since then. 146 11/19/01 COMMERCE/ECON. DEV. - RES. 010218
Well, that has yet to be formally approved through the official process of modifying the revitalization plan, and we have --
Do you have a formal application or a formal request to do that?
And it's been there for a year and a half, and you have no approval?
Well, now, you're working with the Housing Authority, right?
It's your project, 147 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 right?
All right, but you don't know whether they've actually made a formal request to HUD about your project?
I don't know whether a formal submission for revision to the home ownership plan has yet been made. Understand, Councilman --
Because of the continuing discussion regarding what shape and form the home ownership on this site will take, because of the pending litigation, because of the --
Don't, don't -- Mr. Totaro, don't insult me now, okay? We could have a fairly decent session here or we could really, like, get into something.
All right, okay. Because the litigation was just filed in July and you tell me you had the meeting with HUD in Senator Specter's office in July of 2000. 148 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 So tell me, before the litigation was filed, tell me what happened for that year that you guys were having these discussions.
Well, I can tell you that I convened meetings in our offices with the representatives of the East Falls Community Council, and I'm going to guess --
I'm not interested in those meetings at the moment. You said you had a meeting with HUD and Senator Specter's office, trying to get a proposed amendment, which was your idea for 50 non-subsidized for-sale houses.
What I want to know is, in a year, what happened to that request and what did you do to get to try to get to the bottom of it?
And have they said yes or no? 149 11/19/01 COMMERCE/ECON. DEV. - RES. 010218
They have said that they're considering it, and they're taking into account all of the discussions and deliberations affecting the ultimate shape of that program.
So in the course of a year, you have not gotten a straight yes or no 8 answer to that question, which is central to what might happen at this particular site.
It is essential; however, it is part of the phase two development for which --
Yes or no? Is phase two funded? Tell me where the funding is.
It's funded from the anticipated proceeds of the sales of the housing units and subsidization through the HOPE VI Program. 150 11/19/01 COMMERCE/ECON. DEV. - RES. 010218
Is it fully funded money in hand or in the bank, similar to the funding for phase one? 'Cause you have the money for phase one, correct?
Okay, do you have the money today as speak we speak for phase two?
Well, whenever you're doing financing of market-rate or partially subsidized sales housing units, a major portion of the financing is going to come from private mortgage sources.
No, I'm asking -- you're telling me that it's funded and that the money's going to come from mortgage lenders. That means to me that you have talked to them, you've identified them, and you can tell me where the money is coming from for phase two, because you know where money is for phase one. See, in my universe, "fully funded" means identified, encumbered, available. Three elements. I think you've thought about where it would come from, you don't have it specifically identified, and it is clearly not available at the moment; is that correct?
Do I have legal access to it at the moment? If you mean that by availability, then no, it not available. Is it available in the marketplace, have we had discussion with prospective lenders? Yes, we have. Are they interested? 152 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 They're banging-down-the-door interested.
Well, if they're so interested, then what's the problem?
Because we don't have a project to close; we don't even have the infrastructure funding for the phase two, which constitutes the majority of the home ownership development at the site.
Well, you're not going to build the houses if you don't have the infrastructure, right?
Okay. So let me ask one more time: It is not fully funded; is that correct?
Thank you. Go ahead, tell me something else. What else do you want to tell us?
I think important, in view of 153 11/19/01 COMMERCE/ECON. DEV. - RES. 010218 some of the comments, to understand that there were 714 public-housing units on that site, and even at the time of the HOPE VI grant application --
Okay. Now, when you entered the universe, how many occupied houses were there on that site? 'Cause didn't the towers have like a few hundred?