COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE COMMITTEE ON FINANCE - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, 5/29/02 12:53 p.m. - - - BILL 020275 - Authorizing the Mayor, on behalf of the City, to file an application with the United States Department Housing and Urban Development (HUD) for a Community Development Block Grant (CDBG) as required by Section 104 of the Title I of the Housing and Community Development Act of 1974 (P.L. 93-383), as amended, including all understanding and assurances contained therein... RES. 020285 - Approving the annual program statement and budget for the expenditure of the NTI bond proceeds for Fiscal Year 2003. (Hearing continued from 5/28/02) PRESENT: COUNCILWOMAN JANNIE BLACKWELL, Chair COUNCILWOMAN MARIAN B. TASCO, Vice Chair COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DICICCO COUNCILMAN JAMES F. KENNEY COUNCILMAN MICHAEL A. NUTTER - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 5/29/02 FINANCE - BILL 020275, RES. 020285 I N D E X WITNESSES Luis Cortes, President, Nueva Esperanza CDC Patricia Smith, NTI, Director, NTI.......... 6 Herbert Wetzel, Executive Director, RDA..... 65 7 Debra McCullough, Director, Housing......... 81 8 9 10 11 12 13 3 5/29/02 FINANCE - BILL 020275, RES. 020285
This is to resume our hearing from yesterday regarding NTI and community development block grant application. We have a quorum. To my left is Councilman DiCicco; to my right is Councilman Kenney and Councilman Nutter; and also to my right is Councilman Darrell Clarke. The bill numbers are 020275 and 020285. Is there anyone here who -- I understand there was a Reverend Cortes who wanted to speak; we will permit Reverend Cortes. We said we would not have any public testimony, but for one individual, certainly, we're happy to let you make your testimony now, Reverend Cortes. And after that, we will have questions from members of the committee for the Administration. Is there anyone else here who's asking to testify? (No response.) (Witness comes forward.)
Okay. Reverend Cortes, we'll ask that you identify yourself for the record, and we're happy to receive 4 5/29/02 FINANCE - BILL 020275, RES. 020285 your testimony.
My name is Reverend Luis Cortes, and I'm the President of Nueva Esperanza Community Development Corporation, and I want to thank City Council for the opportunity to address you regarding NTI. The establishment of the neighborhood initiative is a sound one as it begins to address fiscal blight problems of our city and the way in which we think of our neighborhoods. I want to request for you today that the community of Hunting Park, east of Broad Street and west of Front Street, be included as a part of the NTI action plan. I believe that the exclusion of our community is an error, given the investment that many organizations and other businesses and nonprofit groups and individuals have made in turning around a neighborhood with many abandoned commercial and residential properties. Nueva Esperanza alone has acquired over eight acres of 5 5/29/02 FINANCE - BILL 020275, RES. 020285 distressed or abandoned properties in order to reclaim this neighborhood. In the last four years, we've had major plans for the coming five years. I'm here hoping that you would include us in the NTI action plan. I'm here because in the document that has come forward, we were distressed to find that there were various communities. If you look at the map that we have included, you will see that Nueva Esperanza's community was skipped over; whereas, the entire area around us was, in fact, included in the City Planning's proposal. The neighborhood has strong nonprofit organizations and businesses that are committed to turning it around. We have in this community Aspira, the oldest educational organization; Casa del Carmen, the second oldest Latino social-service organization; Roberto Clemente, Taylor, McClure, Cayuga, Central East, Barton, Sheridan, Stetson, Aspira, Nueva Esperanza, Edison, and the public schools. All of these schools are in the community that was skipped over. We have the largest educational community in the City, with over 15 percent, or 20,000, of Philadelphia's school children within 6 5/29/02 FINANCE - BILL 020275, RES. 020285 our boundaries. Aspira and Casa del Carmen have invested over $3 million in the community in the last four years. The public school system has invested over $18 million of rehabilitation of the existing schools. Tierra Colombiana, regarded as one of the best, if not the best Latino restaurant in Philadelphia, has also invested over half a million dollars in their business. Nueva Esperanza is an anchor in this community that can and has led significant community-development efforts and can deliver community change. * We have invested close to $7 million in a four-block area over the last four years. 7 million that now contains over 250 jobs. 1 million. An additional $3 million will be invested at the industrial site and high school, totaling close to $9 million. * The City of Philadelphia invested 7 5/29/02 FINANCE - BILL 020275, RES. 020285 $100,000 of that $9 million through a Department of Commerce grant that represents Nueva Esperanza leveraging $9,000 for every City dollar that we have received. Neighborhood transformation requires this kind of leadership and not just demolition. 2-acre lot, which at the time of purchase, was a large, blighted industrial building. The building cost Nueva Esperanza $450,000. We had the State of Pennsylvania invest over $50,000 in remediation, an additional $50,000 in a site development plan. Nueva Esperanza has already paid over $40,000 in back taxes from the previous owner. The building suffered arson, and we now face a City bill for the demolition, and we are being charged for additional taxes and fees by the City of Philadelphia. Nueva Esperanza has a $28 million development plan to create a Latino corridor in North Philadelphia. That plans is included in the back of your packets. We continue to work closely with HUD and with the House and Senate at the federal level 8 5/29/02 FINANCE - BILL 020275, RES. 8 million of the project cost.
And, as I mentioned, the proposal is in fact in the packets we handed out. 4 million loss. HUD, Housing and Urban Development, is interested in developing a partnership with us. We need to have our city be a part of this development and treating us in a fashion similar to for-profit developers downtown where tax revenue, its collection and assessments, are seen as part of a development package. The collection of taxes and placement of liens and court appearances only lend to the problem of development. We have tried to dialogue on this issue, but to no avail. Neighborhood-development projects must get similar treatment to the Kvaerner and stadiums and other development projects. Tax relief to support commercial development is good in the neighborhoods as well as downtown. The Federal Home Loan Bank in Pittsburgh is considering the Nueva Esperanza community as one of three in the state to invest in 9 5/29/02 FINANCE - BILL 020275, RES. 020285 a strategic-development initiative. They are willing to assist us through both funding and technical assistance. This neighborhood has a strong core of commercial and residential owners and is strategically located off of the Roosevelt Boulevard. There are many viable businesses in this area, including restaurants, auto-repair shops, bank branches. In addition, most residential properties in this community are, in fact, not abandoned. This neighborhood can become a popular destination for first-time homeowners. Our request. Nueva Esperanza has a successful track record of development and investment in North Philadelphia. We have managed to do very much with very little City of Philadelphia investment. We ask City Council to award our past and current efforts with a vote that we will be included as a City of Philadelphia NTI planning area; that particular attention be given to the tax and demolition relief at 4530 North Fifth Street in order to assist, and not to squash, that development. We also encourage Council to examine 10 5/29/02 FINANCE - BILL 020275, RES. 020285 development of tax treatment to encourage neighborhood economic development. Finally, we hope that the HRP project that has not had enough funding for nonprofits not be open to for-profit organizations without assuring those who have made the program successful in lower-income communities continued access. Thank you for holding these hearings and thank you for allowing me to speak to you this afternoon.
Thank you very much, Reverend Cortes. And let me say that, obviously, your representation has preceded you in the way that Nueva Esperanza has been wonderful for our city and for the community. Do we have any questions from any members of the committee? Councilman DiCicco.
On of your testimony, you referenced that the City is 11 5/29/02 FINANCE - BILL 020275, RES. 020285 insisting on collecting $53,000 in taxes and an additional $15,000 in fees.
Could you be a little more specific as to what that represents.
Yes. When we purchased the property, there were $60,000 in back taxes.
60. We have paid 45 of those 60. Other taxes have accumulated, and as they have accumulated, they've also accumulated liens as well as fees. So in addition to the -- we have about $15,000 in additional fees in addition to the $53,000 in outstanding taxes.
Yes, due to the fact that it's an empty lot. 12 5/29/02 FINANCE - BILL 020275, RES. 020285
No liens, there aren't any liens -- are demolition liens --
Thank you very much. Any other questions? (No further questions.)
Thank you, Reverend Cortes. Now we're ready for the questions for the Administration, so we ask you to come forward. (Administration witnesses come forward.)
Councilman Kenney? 13 5/29/02 FINANCE - BILL 020275, RES. 020285
Thank you very much. Just a few follow-up questions relative to yesterday's discussion. When Council passed NTI originally, there was a $20 million advance, I guess, on the money to get work started. Could you tell me what the status of the $20 million is, what work it accomplished, and if there's any left.
The closing on the bond issue occurred about two weeks ago, and out of that, the cost of issuance and other transactional costs would have been deducted; that would have been about $4 million.
Yeah. So that's connected to the actual issuance of the bonds and the closing and all of the transactional costs. That's been the only monies spent thus far.
So there's $16 million of that original approval left?
Yes. And in addition, as we testified yesterday, we are in the process of restructuring the PHIL Loan bond, and would include 14 5/29/02 FINANCE - BILL 020275, RES. 020285 approximately $2 million of NTI bonds as a part of that restructuring so that we could lower the interest rates to and percent. That bond closing, I think, is tentatively scheduled for sometime at the end of this month or at the beginning of --
A there a list available of the professionals involved and the fees paid?
I can talk to the City Treasurer's Office; they usually handle that part of it.
I would like to see a breakdown of who got what work and what they were paid and what they did and what services they perform; in addition, what professional corporate, legal, or other professionals have been engaged on the $2 million -- was it $2 million fees on the --
Okay? Also, on the issue of -- one of the 15 5/29/02 FINANCE - BILL 020275, RES. 020285 concerns I had yesterday is, as far down the road as this is, we still don't have bid packages and pre-qualification issues relative to contractors. That's a concern to begin with from my perspective, but the other question I have on that is, will this work go to the lowest bidder?
Yes. This is being issued pursuant to the City's standard procurement process, and that standard, as dictated by the Charter, is the lowest responsible bidder.
The lowest responsible; not necessarily the lowest bidder.
The Charter requirement is, you know, out of the Procurement Department.
Who will review the bids and who will make the final decision on who gets awarded what?
That work is let out of the Procurement Department. I don't know if they have a committee structure or how they actually review it, but it will be the work of -- it will be treated as our current demolition contracts and reviews are done.
Well, is it 16 5/29/02 FINANCE - BILL 020275, RES. 020285 envisioned that a larger kind of general contractor would be hired, and then that contractor would then hire subs? Or would each individual job be bid separately? Will there be an overall large construction or demolition company that would have the authority to hire subcontracting demolition firms?
I think -- I mean, I can't speak to how contractors respond to our bids, but it will be in the same manner as are traditional demolition contractors. I assume GCs sometimes bring in subcontractors; I assume some people, you know, bid and they do all of the work. But there's no, like, requirements that it has to be done one way or the other. It's the standard, you know -- what we can do is make available to you, you know, the standard bid packages and the requirements and the technical specifications that will be issued as a part of this.
But is it envisioned in a general sense that a large overall construction manager or a general contractor would be hired through the competitive bidding process, 17 5/29/02 FINANCE - BILL 020275, RES. 020285 and that individual would then have the ability to hire subcontractors to do the actual work?
I really can't answer that type of question; I, you know, must plead a little bit of ignorance between GCs CMs and subcontractors. As I said, we can make available to you the actual bid specification.
My concern is that we may engage in a competitive bidding process, as the Charter requires, but as a result of things that we've seen in the -- this is the demolition side, but on the construction side of it, what we've seen in the past are lowest responsible bidders being awarded the bid, and then through a process called "change order," and other negotiations, the bid itself, in some ways, changes: The scope of the work changes and the price often changes. So what I need to know is what the specific process is going to be from the response to the bid to the evaluation of those bids to the Awards of those bids, and then further down the road, to what happens to allow that scope of work to be changed during the course of this process. 18 5/29/02 FINANCE - BILL 020275, RES. 020285
'Cause I've seen construction bids, maintenance bids, stuff at the airport come through the airport, for example, wind up being one number, and a year later, it's doubled that because we've had a change order process. And one of the reasons why I was skeptical and voted against this in the first place is because I don't want the continued process of the way bids are awarded in this city to be part and parcel of this NTI if this is going to be successful. Because too many times, those contracts change without anyone's approval other than a small group maybe on the second floor. But Council, once we approve it, it's out of our hands, and then people have the ability to manipulate it the way they see fit, and I want to try to avoid that if we can, to avoid problems down the road with NTI's success or lack thereof.
Okay, I will follow up and provide that type of information as to what the City's procurement process is and the review process.
And, I guess, the initial Strawberry Mansion is the initial area we're going to be doing a large amount of --
What we've historically called "the prototype area" was to try to test out the, you know, new bids specs, things of that nature.
In the package that we are putting together, we're looking at all vacant buildings.
Okay, all vacant buildings. Is there a relocation plan?
A plan for individuals who need to move out of their homes or be located while the demolition is going on.
Well, there's always the issue of what we call "emergency and temporary relocations." For example, one of the things that we talk about is, prior to demolition occurring, to 20 5/29/02 FINANCE - BILL 020275, RES. 020285 do assessments and surveys of the neighborhood. You know, if there's an occupant next to a property that's going to demolished, to make sure that there's not a elderly person or someone with special, you know, health issues and, therefore, may need to be temporarily located to make sure that occupied house will be okay. That work will be lead, you know, by the Office of Adult Service, in partnership with Risk Management, doing what we call "a social survey assessment." And then depending on the outcome of that, if it's necessary, working with the person, we think their health or something may be at jeopardy, there may be a temporary, you know, or a emergency relocation. Historically the of Department of Licenses and Inspections has on occasion, you know, had to move somebody on an emergency basis.
Well, obviously, this is a larger number of properties that are being demolished in one period of time, and I would guess that over the course of the two years of planning, we would have some idea on the potential number of people that need to be relocated? 21 5/29/02 FINANCE - BILL 020275, RES. 020285
I really think it's going to vary from neighborhood to neighborhood, from community to community and the situation within each. And that's why, you know, we built in time to do those inspections.
We have not done the field- survey inspections on social services; we've just done the building-condition inspections, and then once we are clear about which properties will be, you know, included in the bid package, then the next step will be to begin to deploy -- to do the social-services assessment.
Right, and I do believe we included a percentage number to acknowledge that, and it would just be, you know, for hard costs. Like, for example, if you have to put somebody with -- you know, a lot of times, I believe, the Office of Emergency Services works with agencies like the Red Cross and other providers to provide temporary housing. 22 5/29/02 FINANCE - BILL 020275, RES. 020285
I assume the Housing Authority will be involved in any potential relocations?
They're not supporting -- they're not going to be providing any support?
The Housing Authority can and may be asked to do some stabilization work on houses that we want to preserve, but they will not be involved in the relocation work; that is through the Office of Emergency Services.
They were all -- I guess if there's a tenant, that if the property is PHA- occupied with a PHA tenant, they would then be responsible for handling that person, but if it's a privately-owned property, no. 20
And will the Section 8 Program be utilized in any way?
No. As we stated in the NTI bond program, that we would not be using Section 8 certificates out of bond proceeds to do permanent relocations. 23 5/29/02 FINANCE - BILL 020275, RES. 020285
You indicated in your testimony yesterday that the generally stable neighborhoods would -- what is "a generally stable neighborhood? Could you give me some ideas on which neighborhoods by name you would you believe would be generally stable?
I mean, basically what we've been saying with respect to some of -- we said neighborhoods and blocks, that there are a lot of blocks in the city and neighborhoods in the city where you just see one or two vacants on the block and, you know, they're all across the city. I'm thinking they're in the lower Northeast and in areas of Northwest Philadelphia, Southwest Philadelphia, South Philly, but even in North Philadelphia, where you may even have a significant amount of vacancy, you also have a significant number of blocks where there's one or two vacant properties on that block. And so what we want to do is to make sure that -- you know, if it's feasible and it's likely that that property can be rehabilitated, can we stabilize it in such a way, get title to it, get it back into the private marketplace. 24 5/29/02 FINANCE - BILL 020275, RES. 020285
Okay. Yesterday's Daily News article indicated that Westrum (ph), a very successful developer generally, has been trying to do more and more in Philadelphia, is looking at Brewery Town as a potential for market-rate residential housing. There were some indications in there from Mr. Westrum and also from Toll Brothers that they believe that right now, the climate and the environment in Philadelphia is not terribly suitable for the construction of market-rate housing at a profit to the developer. What discussions are going on as we speak, or will be going on, in an effort to deal with the construction costs associated with, I guess, Phase II of what comes after demolition?
What is going on to have those discussions? who is having the discussions? and what are the results of those discussions?
Again, the issue of labor costs, I think, again is a complex one, particularly where, you know, the City's not directly involved in one of our own projects. We 25 5/29/02 FINANCE - BILL 020275, RES. 020285 have begun to look at what are some, what people call, "cost drivers" for construction costs. I believe there's been some work done to say, you know, is it just the differential and wage rate? I think someone mentioned yesterday about the A rate and the B rate. You know, some people say it's work rules, are there other cost drivers, you know, permitting processes and the like. So, you know, there's been some work done with respect to that. The solution, I think, is one that, you know, the Mayor, I know, is very much committed to looking at, and probably himself personally would take the leadership on an issue like that.
It is a major part of the success to this project, is it not?
I think the issue of the cost of housing and the cost to build in Philadelphia, the same as with the Convention Center and others, is an issue, and we do have to 5/29/02 FINANCE - BILL 020275, RES. 020285 grapple with it. And sometimes I know there's been progress, and sometimes there hasn't been.
But I'm not, you know, I'm not in the leadership on that particular issue so I --
But without progress in that area, the potential of experiencing a situation where we have a lot of vacant land and nothing being built on it should be a concern for anybody involved in approving money for this or involved in the implementation of the program.
And that's the other -- the final question I have is, what happens during the course of the two, three, five years that we're talking about, when it comes to the securing, cleaning, and maintaining of these vacant parcels we're going to create over the next two to three years?
Mm-hmm. Well, as you know, we've incorporated into the beginning last year a process of going through and cleaning the current 27 5/29/02 FINANCE - BILL 020275, RES. 020285 vacant lots in neighborhoods. Because of the amount of debris and the scale of debris, it was very clear that, you know, we in government had to tackle that problem. I believe that as of today, we're probably about at least two-thirds through the approximately 31,000 lots. I believe the numbers -- and this work is being led by the Managing Director's Office -- is approximately more than 20,000 tons of debris have been removed. And then at the same time --
We budgeted, if I remember correctly, in that fiscal year budget somewhere in the area of $6 million to undertake this -- and it also included graffiti abatement. I mean, it wasn't just lot cleaning but a number of that type of work that you're seeing in neighborhoods. Then going forward, having gotten it dawn to a manageable position, we have been working to identify both private and other resources. We've done, you know, some pilot projects in some neighborhoods. I believe the Philadelphia Green 28 5/29/02 FINANCE - BILL 020275, RES. 020285 people yesterday testified about some work that's been done in New Kensington in the Empowerment Zone, where we learned that sometimes by tree-planting and basic seeding of the lot and low-rail fencing, you're able to maintain that. Working with the Horticultural Society, we were able to get monies from some of the private foundations. We've submitted proposals and have received a grant. At the federal level, there's also proposals going out to some of the other federal agencies like Urban Forestry and the Environmental Protection Agency. So we're beginning to try to mine the federal budget because increasingly, the issue of urban land is not one -- and the management of that is not one that is unique to Philadelphia. Cities like Chicago have been successful in getting a significant amount of federal resources to do different types of what people call "greening projects," and we've had some interest by the, you know, private banking community about playing a role, you know, where their offices are in this type of land maintenance.
The City of Chicago 29 5/29/02 FINANCE - BILL 020275, RES. 020285 also makes money from towing abandoned so -- and we pay money to have 'em removed while the City of Chicago makes money to have them removed, so I don't always want to be compared to Chicago 'cause I don't think we're right up there with them. But I guess the question is, what are we putting aside in the way of budgeting money to maintain these lots? If, in fact, they stay vacant for two, three, five years, you know that the refrigerators and the car tires and the other things grow off those lots.
Yes. We did include in this year's fiscal budget to go through it on a periodic basis, to continue to make sure the lots remain reasonably free of debris. So I don't -- I think it was around 4 or 4.5 million, but I can check.
Well, I think the annual budget is they budget it out in the Five-Year Plan for, you know, over the five years. But I will check it.
Thank you, Madam Chair. In the area of cleaning vacant lots, encapsulating vacant buildings that are not City-owned, that are privately owned, are we liening the owners?
And we'll continue if we have to go back time and time again?
That's the only question I have. I wanted to make sure. Thank you.
Good afternoon, Ms. Smith and Ms. McCullough and Mr. Traylor. 31 5/29/02 FINANCE - BILL 020275, RES. 020285
Councilman, would you pull your mic. closer because we absolutely can't hear you.
From the earlier hearing, Madam Chair, it was pointed out that I was being unusually quiet, and that has continued into this hearing. In response to an earlier question, I could not -- I was actually having trouble hearing over on this side -- you were responding with a question with regard to relocation, and I only heard a part of what you said, that there was an office of "something" services that was working with people, and I couldn't hear what that word was.
Okay. And usually they work very closely with the Office of Risk Management 'cause sometimes, you know, it gets to, you know, whether or not it's a dangerous condition 32 5/29/02 FINANCE - BILL 020275, RES. 020285 or something for the occupied property.
Okay. I had asked you yesterday about -- and I again want to say that while some of the questions may make reference to the current pilot area, which is in Strawberry Mansion, obviously. That's not in the area that I represent. At the same time, I will make a little bit of an assumption, which is that whatever may be going on in the pilot area, to some extent, is probably going to go on in other parts of the City when the plan is fully operational. So my questions are not so much directly about the Strawberry Mansion area but only in the context of whatever it is you're doing, and you happen to be doing it there, and it's probable going to be pretty much the same in another part of the City, and whenever it rolls over into the 4th District, I'd like to better understand better what the program is. So if you could answer the questions in that context, I'd appreciate it. I asked you yesterday about the upcoming pilot area activity, and I think you told me that there were a hundred properties that were going to be demolished, all of which were vacant. 33 5/29/02 FINANCE - BILL 020275, RES. 020285
Okay. But in previous materials or in earlier news accounts about the pilot area, I thought that I had actually read that it was 120 properties.
I can't speak to what's in the previous accounts, but as we've been doing the inspections and analyzing the building, having conversations with the District Councilperson, the number moves up and down basically. As we committed to in both the framework document that, you know, the District Councilperson we're going to be working very closely with in terms of identifying properties. You know, sometimes for example, you know, people raise the question that that particular property needs to be demolished, someone may assert they can rehab it, you know, it may make sense to take it off. So the numbers do go up and down. And even after we kind of size the package, you know, it's still possible that something can happen and a property gets taken out or added, but it really is a consultive process that we try to have with the District 34 5/29/02 FINANCE - BILL 020275, RES. 020285 Councilperson.
Right, and I understand that. And is there any expectation that there will be relocations in the pilot program?
I mean, you know, once you're out of your house, you're kind of relocated.
Okay. Well, there's -- what we always acknowledge and want to be sensitive to -- and we talked about it in the program description -- is two types of relocation. One could be temporary in emergency. The reason why, as I explained to Councilman Kenney, is due to, you know, a health issue, the presence of a elderly household. We really do kind of, since we're going to be working on a geographic basis, kind of want to be able to anticipate those issues, identify any special needs, and then make sure we have an appropriate response for that. You know, in addition --
I hate to cut across you, but we would temporarily relocate 35 5/29/02 FINANCE - BILL 020275, RES. 020285 someone because we're going to be doing a lot of work in the area and it's not safe for them? Or, I mean, what --
Yeah, I think if it's -- if we think there may be, for example, you know, say, someone has an asthmatic condition, and due to the dust that may result from the demolition activity, we do want to be in a position to move that person temporarily from their house, if they want to be moved, or find some other way to kind of accommodate those needs.
The Office of Emergency Services has, you know, worked with a number of providers that can provide temporary shelter or, you know, hotels, things of that nature. It really is a case-by-case type of determination. And one of the things that we said in the program framework was that any relocation or need also would be reviewed with the District Councilperson so that they're aware of the situation.
So, again, in that situation, the District Councilperson will decide 36 5/29/02 FINANCE - BILL 020275, RES. 020285 whether someone gets relocated?
What we said is that we will review and discuss that issue, but we do have to be sensitive to health issues. Sometimes there's concern, as I understand it, that a house, if you're demolishing an adjacent house, even if it's being done by hand, is there a risk of, you know, the other -- some houses may not be in very good condition, and if there's going to be a risk there, I know L&I historically will, you know, try to move people out. So, as I said, it's a case-by-case thing, and we're allowing for it if it's needed and necessary and recommended.
Now, what happens in a situation where -- I mean, I guess some element of common sense just makes it such that if you're going to take down -- I mean, if there are properties on the side of a street, 20 of which 21 are vacant and dangerous, 3 are occupied, and the 22 other 3 are already vacant lots, I mean, what 23 happens with the 3 people who would technically be 24 left after the 20 properties come down and you've 25 now got 26 parcels and 23 of them are vacant? 37 5/29/02 FINANCE - BILL 020275, RES. 020285
Well, again, I think this will vary from, you know, neighborhood to neighborhood, district to district. But, like, in the past, in those situations, you might explore the possibility of permanent relocation. In order to do that, just as the City has done in West Poplar, I think even in the Jefferson Square community, there's a whole process. I mean, we would have to initiate, you know, an eminent domain taking that has to be approved by City Council, you have to buy the person's house out, you have to compensate them, you know, for the value of the home. There's, you know, there's very stringent requirements around what they call "the uniform relocation code," when there's the taking of property for redevelopment purposes. And, again, it --
I can't really answer that, and the reason why I can't really answer that, I really do believe those types of issues you've 38 5/29/02 FINANCE - BILL 020275, RES. 020285 really got to deal with on a case-by-case basis, looking at the situation, seeing if it makes sense. So to project a number would be to project a number artificially and superficially. I mean --
As we're looking in partnership with the District Councilperson, looking at that neighborhood, looking at, you know, are there immediate needs for redevelopment opportunities for that neighborhood, is there -- you know, that's the type of thing that I envision, that there's a type of dialogue and a conversation going back and forth on, 'cause these are not, you know, simple or easy issues to deal with. And that's what we and the administration have committed to. I know historically, the Redevelopment Authority has worked on relocation in Jefferson Square and historically have done it in other parts of the City. It's a complex process, it's not a easy one, it's a sensitive one. And so it's not done, 39 5/29/02 FINANCE - BILL 020275, RES. 020285 and cannot be done, in a heavy-handed manner.
When would you anticipate this dialogue and these conversations taking place?
As we, you know, are sitting down with the District Councilpeople and looking at the target areas, looking at where demolition is going to occur, what the issues are; you know, that's when we would see that, that's when you start having the conversation. And so we've, you know, begun to talk. First we got to do the field inspections, you know, just getting the conditions of the house: Is it vacant, is it occupied, is it structurally dangerous? And then, you know, we tend to map that information out, update it when we have a target area, and that's why we're trying to work within a defined geographic boundary.
And some people may elect to say you know even though there's three properties left there on block, you know, we, for whatever reason, you know, and the City has in the 40 5/29/02 FINANCE - BILL 020275, RES. 020285 past, you know, done demolition if it's need be around that.
Well, I understand you're going to handle them on a case-by-case basis. I mean, since there is a schedule and we talked about this yesterday and I know you might be a little behind because that's just how things happen sometimes. I'm still hopeful that in this process, even with a schedule that might be a month or so behind, can you give me some idea of when these kinds of conversations, based on the bid package timetable or the demolition timetable, when will this activity start?
Well, the first step that we've done is, we sit down and try to identify the geographic target area that we want to focus on in the first year, and there's been a couple of meetings already in the process.
Do you have a deadline by which you want to have that done?
Well, sometimes it's been going back and forth with the District Councilperson. It was my hope that we could at least have the initial meetings done in April, May, 41 5/29/02 FINANCE - BILL 020275, RES. 020285 and June with each Councilperson in that target area identified. As I said, I think it has not gone as quickly; Councilmembers have been very busy and this has been, you know, a very busy time of year in catching everybody and so forth. Then second, once we kind of define the geographic boundaries, then they deploy L&I inspectors who go out and do a reinspection of the areas as to the physical buildings: Is the building dangerous, unsafe; is it a vacant lot; does it appear to be occupied? Then we update, you know, the existing -- they take the existing records which, you know, again, things don't stay stagnant, you know, things move. They update that, and then there's a sitdown, again, with the District Councilperson to begin to look at what may make sense in terms of, you know, a demolition package: What do we move forward with? At the same time there's existing vacant lots, do we identify those parcels for acquisition? You know, we stated that we wanted to demolish -- acquire prop -- take title when we do demolition, but are there other vacant parcels in 42 5/29/02 FINANCE - BILL 020275, RES. 020285 that community that it makes sense to take title. Maybe there's just a vacant lot on the block that could be a potential side yard, what's the current ownership. You know, are there any -- you know, what would be the -- so then you start kind of sizing. Again, it's experience -- it's a kind of a give-and-take type of a process that goes back and forth. Then you can -- and then we also have committed to in our documents that we, at the direction and in partnership with the Council office, you know, have community meetings. So, again, I think each District Councilperson takes that part differently. You know, you have big meetings, small meetings, leadership meetings. So that gets built into it at the same time. It's a very dynamic process, I'm finding, of going back and forth. It's not a simple, straight line.
There was a story in today's paper, which, I guess, was some combination of a bit of reports from yesterday's hearing, and then there seemed to be some 43 5/29/02 FINANCE - BILL 020275, RES. 020285 information that had nothing to do with yesterday and more generally about --
Okay. Well, there was a story in the Inquirer this morning which made reference to some of the activity, I guess, going on in the pilot area, and you were quoted as basically saying -- I'm going to paraphrase and possibly not do a good job -- that you had learned a great deal through the process, there are a number of residents who are expressing, I think, some concern about getting information either outside, or it may have even been at yesterday's hearing.
But also that there may be a need to slow things down a little bit in the context that getting additional information might be helpful and will actually make things better going forward. Do you remember that?
Yeah. You know, they grab you as you're walking out, so -- 44 5/29/02 FINANCE - BILL 020275, RES. 020285
So basically what I was saying was that -- I guess the things I've learned is that it's not a linear process, it's not a simple --
A linear process. You know, you do A, you do B, you do C. That it's dynamic, that it goes back and forth. And you just have to be open to those processes. You know, I mean you -- it's -- that was the gist of it. And whenever you have processes, you know, sometimes they don't stick to timetables, and there has to be flexibility. That was kind of, like, the gist of our remarks. It really is a dynamic process between the Administration and trying to package the bids and put things together and move things with just working with the District Councilpeople, getting that input, working with the community.
As they say, these processes sometimes are, you know, messy, and 45 5/29/02 FINANCE - BILL 020275, RES. 020285 they're not simple or straightforward.
I just re -- that was -- I just reconveyed what my sentiment was, and I didn't read the actual report.
Okay, and when you said that you might want to slow some things down, what actually did you mean?
Well, that it's clearly the process of reviewing the properties and does it make sense; at what point, you know, are you getting feedback from community; you know, getting meetings set up. And all of that takes time. So that's what I was referring to when I said things, you know, took longer. We initially, again, had plans and timetables, but they slip sometimes. That's what I mean. It's not, like, intentionally slowing it down, but you have to allow for the process and how that process plays out. And I think it's going to play out differently in different community. And that's why we really welcome and are happy about the partnership with District 46 5/29/02 FINANCE - BILL 020275, RES. 020285 Councilpeople, 'cause they help us with those processes. And it's always maintained that, you know, it's not one size fits all, one process fits all. It really isn't.
Well, yeah, I mean, that's fairly clear, and I think that that has been part of the discussion both on the record and off the record over some extensive period of time about this in the first place. There's been a lot of consternation, if you will, about getting this done, getting it done, getting it done, and now that you're in the middle of a process, people are now maybe coming to the realization that some of this work probably could have been done at an earlier point in time, some of this work and information could have been gathered at an earlier point in time when we were arguing about whether we should do something or not do something, have a bill or not have a bill, when, clearly, there's still more work to be done and there's more information to be gathered. Is that accurate?
Well, I think, again, but then it changes, time changes the information. As 47 5/29/02 FINANCE - BILL 020275, RES. 020285 we've said, you know, we've done surveys before and things like that just in terms of that.
But because conditions change and environments change, you still need to update. So, yes, you know, we've had surveys, and that's a good start, like we're not going out from scratch. So we're confirming or affirming information. If you had something happen, you know, there could have been intervening factors.
So I don't know if that would have really changed some of those steps.
Okay, but you do know more today than you did a year ago.
And that was the whole purpose of what we had always envisioned, what we call that "prototype project." We built into our processes the idea of trying to work through some of those operational issues.
You know, it's easy to sit in a room and, you know, make a plan and say this, that, and the other, but when you put it -- test it 48 5/29/02 FINANCE - BILL 020275, RES. 020285 in the field, other things change, and it was one of the reasons why we built in this concept of the prototype project.
Okay. Tell me a little bit about the budget on of the -- you told me yesterday this is the program statement and budget. How was this budgeted put together?
Basically it was myself working with various individuals within the operating departments. So, for example, for residential demolition, which took the number that's been historical experience, allowed for the fact that we are changing bid specs to do additional treatments -- you know, like some post-demolition treatments -- and then base than on a per-unit and average it out. So in that sense, it's a flat number. We allocated the --
It is -- the number, depending on whether or not, when you say "demolition," if you're including party wall treatments and the like and -- 49 5/29/02 FINANCE - BILL 020275, RES. 020285
Yeah. Well, some people don't; sometimes they give just the number for the demolition activity, and it will be around 6 or 7,000, and I think it's around or 9,000. 8
The reason why is that in looking at the number -- the past experience has been the combination of some machine and the lot. We wanted to look at -- make sure that we had enough resources to make sure we do appropriate treatments for party wall and how you're finishing off things. I mean, the historical complaint has been how occupied properties have been left behind. We also wanted to make --
Given the massive size of what you're planning to do, my sense would be that there would be fewer party walls given the amount of demolition, especially string demolition, than we would normally have in the present environment where we pretty much do them on a complaint-driven basis as opposed to in any 50 5/29/02 FINANCE - BILL 020275, RES. 020285 significantly coordinated fashion.
I mean, there's no 5 stucco to worry about if you take 20 properties down at the same time.
Yes, but in a lot of neighborhoods there aren't vacant properties in 9 a string like that. 10
There may be five in a 13 string and then some properties and then three in a 14 string. So that's one variable. 15 And I have to admit I do -- 16
You're going to 17 have more string demolition in this program than 18 we've ever had before, though, right? 19
Yes, in some neighborhoods; 20 in other neighborhoods, maybe not.
You know, and as I said, we're also beginning to try to contemplate different treatments on party walls and edging, and we're also trying to budget for things like, you 51 5/29/02 FINANCE - BILL 020275, RES. 020285 know, what can we do around some of the post- demolition treatment. You know, there's the environmental costs component of this that's starting to go up, you know, how we allow for that and landfill. And what I can do is, again, you know, get back to you and talk about you know, having somebody put together a short paper about how the types of things that we are looking at and do them somewhat differently than we've done before to make sure that when we leave a neighborhood that we're trying to leave it, you know, without a lot of issues that have been raised in the past.
Well, I mean, I'd be glad to read the paper. I'm trying to understand -- I mean, some of this goes against some of the fundamental laws of economics, that -- I mean, we have a tremendous supply here of product and I don't understand why the price is going up as opposed to down.
Again, I mean, we may be -- until we actually test the market, we don't know. Again, I'm being very conservative. I understand your point of view. I -- 52 5/29/02 FINANCE - BILL 020275, RES. 020285
I mean, if you budget $11,000, I think you could pretty much anticipate that that's probably what they're going to charge us, right?
Mm-hmm, mm-hmm. And if we budgeted -- I mean, I think it's a question of how you want to budget. I mean, the other side of the coin is if you budget low and then you get the issue of, you know, the bids coming in a lot higher, and then since we have to approve this each year, you know, with Council, how do we -- you know, we have to come back and things like that. So it was just a decision on my part on how to budget this.
I understand, and I'm not questioning your ability to budget; I'm just saying that, mean, you're going to set the floor wherever you're going to set the floor, and it seems to me that for what it is that we're trying to accomplish with quality and with good standards, we want that floor to be as low as possible.