COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE COMMITTEE ON PUBLIC PROPERTY AND PUBLIC WORKS - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, December 9, 1999 10:55 a.m. - - - BILL 990818 - Authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to enter into a lease agreement with the Philadelphia Parking Authority for certain underground public garage facilities located at the southwest corner of 15th and Arch Streets (JFK Plaza), all under certain terms and conditions. PRESENT: COUNCILWOMAN AUGUSTA A. CLARK, Chair COUNCILWOMAN JANNIE BLACKWELL COUNCILMAN DAVID COHEN COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN MARIAN TASCO COUNCILMAN FRANK DICICCO COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 12/09/99 PUB. PROP./PUB. WORKS - 990818 I N D E X Andres Perez. . . . . . . . . . . . . . . . . Commissioner of Public Property Rina Cutler, Parking Authority. . . . . . . . 7 8 9 10 11 3 12/09/99 PUB. PROP./PUB. WORKS - 990818 P R O C E E D I N G S
Good morning, ladies and gentlemen. The Committee on Public Property and Public Works is now convened. The clerk will please read the one bill 7 that is before this committee.
Bill No. 990818, an ordinance authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to enter into a lease agreement with the Philadelphia Parking Authority for certain underground public garage facilities located at the southwest corner of 15th and Arch Streets, JFK Plaza, all under certain terms and conditions.
Thank you. Before we take testimony, I need to establish a quorum for the record. Present at the table today is Councilman Frank Rizzo, Councilwoman Augusta Clark - the Chair, Councilwoman Donna Miller, Councilman Michael Nutter, and Councilman Frank DiCicco. And present in the room is Councilman David Cohen. Thank you. (Commissioner Andres Perez comes 4 12/09/99 PUB. PROP./PUB. WORKS - 990818 forward.)
Good morning, Commissioner. How are you? COMMISSIONER PEREZ: Good morning, Councilwoman.
I'm good, thank you. Please introduce yourself to the record, spell your name for benefit of the stenographer, and proceed with your testimony as you see fit. COMMISSIONER PEREZ: My name is Andres Perez, A-N-D-R-E-S, P-E-R-E-Z, Jr., and I'm Commissioner of the Department of Public Property. And I'm here today to testify in support of Bill 21 No. 990810. This is an ordinance authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to enter into a lease agreement with the Philadelphia Parking Authority 5 12/09/99 PUB. PROP./PUB. WORKS - 990818 for certain underground public garage facilities located at the southwest corner of 15th and Arch Streets, also known as JFK Plaza, all under certain terms and conditions. This bill will permit the City to lease that certain property to the Philadelphia Parking Authority for a term of 29 years. The garage facility is located below the JFK Plaza and fountain, and will be used by City agencies and for general public parking. The Philadelphia Parking Authority is authorized to make improvements to the premises with prior written scent from the Commissioner of Public Property. All costs of improvements and repairs will be borne by the Philadelphia Parking Authority. Annually, the Authority shall pay to the City as rent 75 percent of the net revenue received by the Authority from the use of the premises. The Department of Public Property supports the measure and accordingly, I respectfully ask that City Council approve Bill 24 No. 990818, and I also ask that the rules be suspended so that the ordinance may be passed upon 6 12/09/99 PUB. PROP./PUB. WORKS - 990818 the second reading of Council. Thank you, and I'm ready for questions. Also present is the Parking Authority's Director, Miss Rina Cutler.
I do not, but I am here in support of bill and to answer any questions that you may have.
Okay. Mr. Rizzo? Mr. Rizzo, excuse me. Before you speak, may I introduce some guests who are present in the room. Forgive us. I do need to do it. We're pleased to welcome today three members of the City Council in the Ukraine and an adviser to the Mayor of their city. They're in Philadelphia for the next two weeks examining tourism for their city's economic development, and they are also seeing how we have citizen 7 12/09/99 PUB. PROP./PUB. WORKS - 990818 participation in the government process. Please join me in welcoming these honorable guests from the Ukraine. (Applause.)
I had the extreme pleasure of visiting the Ukraine about five years ago, and it was a perfectly lovely city. You were very kind to me, and I'm very happy to have the opportunity to reciprocate. Thank you. Come back soon, come back often. Now, thank you. Please proceed, please proceed.
Commissioner, you indicated that the JFK parking facility will accommodate both private and City use. I've had an interest in this issue, and I'd appreciate you providing the Chair information pertaining to the number of parking lots that we have contracts with to park City-owned vehicles in the Center City area. From what I understand, the JFK Plaza parking lot is not well-utilized in parking City vehicles, and you know the problems we have with 8 12/09/99 PUB. PROP./PUB. WORKS - 990818 City vehicles parked around MSB, around City Hall. And I'd like to know, has there been an analysis done to determine the ratio of City versus private before we enter into this agreement to try to relieve some of the monies that were being spent with private parking lots and better utilize the JFK facility? COMMISSIONER PEREZ: In very general terms -- of course, there's a long history associated with this garage -- the Department, and primarily during my tenure as commissioner, has had minimal use of that facility despite the fact that even the existing agreement guarantees us a number of parking slots, which I believe is 150. The new agreement with the Authority will guarantee us up to 200 slots. The reason for the lack of utilization following the initial litigation surrounding the conditions of the garage are economic. The operator and my Real Estate Unit were never able to come to terms that were competitive with surrounding parking lots. And although the lot itself, for obvious reasons, its proximity now to the Municipal Services Building, to City Hall, 9 12/09/99 PUB. PROP./PUB. WORKS - 990818 it's actually flanked by the Municipal Services Building and our new One Parkway Center. It certainly would have improved the logistics of getting a number of City vehicles in and out, particularly those City workers who have to go in and out of a lot a number of times during the day to perform their field functions. Taking that into consideration, the Authority in its proposed agreement will guarantee us the 200 slots and we will have a discount rate. The terms haven't been finalized. But, again, in summary, most of the surrounding lots have cheaper rates than the current operator, who is not the Authority and tried to negotiate with us. And, secondly, a number of our vehicles can't meet the clearance requirement at the entrance of this garage, so those departments that have slightly larger than minivan type vehicles can't use that garage anyway. We've got to keep them on open-surface lots. And certain other lots will give us 24-hour availability access and use. And those are the principal reasons why we're in other places rather than in this garage. 10 12/09/99 PUB. PROP./PUB. WORKS - 990818 Some of those conditions, obviously, will remain the same except for the economic issue of --
Commissioner, could you provide the information that I requested to the Chair? COMMISSIONER PEREZ: Yes, certainly.
Yes, Madam Chair. Commissioner, who is the current either owner or operator of this particular lot? And is this a lot that you access primarily from driving north on 16th Street and then turning east on Arch Street and accessing to go underground? Is that the lot we're talking about? COMMISSIONER PEREZ: That's correct. That's the main public entrance. It's operated by Parkway Corporation.
Who owns it? COMMISSIONER PEREZ: The City of Philadelphia.
We own the lot. COMMISSIONER PEREZ: The City of Philadelphia owns it. There's an agreement with 11 12/09/99 PUB. PROP./PUB. WORKS - 990818 the Authority, and there's an operating agreement between the Authority and the Parkway Corporation. And for any other details, of course, Miss Cutler would be in a better position to provide.
All right. So by way of this bill, the lot is now going to be operated by the Parking Authority?
Councilman Nutter, if I may, there is under an agreement that currently exists, which has existed since 1963, the current agreement with Parkway expires in 2000. We are on the street at the moment with a request for qualifications for all of our Center City garages, including Love Plaza. We expect within the next several weeks to award management contracts for all of those facilities, including this, one at the expiration of the current agreement. So there has been a long-standing, since 1962, lease that's been in place, and we have changed the format for the future from a lease to a management agreement at much more favorable economic terms to the City than in the 12 12/09/99 PUB. PROP./PUB. WORKS - 990818 previous lease, and we expect to award a bid to operate it at the expiration of the current agreement.
Well, having nothing to do with this particular company or any other company, but, I mean, can you just briefly explain, I guess, the mechanics of -- we, the City, own parking facilities.
Sublease it to the Parking Authority and then you sub-sublease to private entity to manage and operate it?
I mean, you are the Parking Authority; why do we do this?
I have no idea why this happened in 1962, and it is certainly not a system that we would do in the future. All of our garages are currently operated private operators, but they're done under management agreements, which essentially pay a flat fee to a parking company to operate them on 13 12/09/99 PUB. PROP./PUB. WORKS - 990818 our behalf. The current agreement that --
Well, I guess that's the part that I'm trying to understand. I know we have a time issue. Why does the Parking Authority contract out parking management services when you are the Parking Authority and you're in the parking business? I mean, that's what you do.
In 1994, the Parking Authority, based on an analysis, put all of its garages that it had previously operated itself out to contract. And, in fact, what we found after the first year was between a reduction in expenses and additional income of a million dollars increase. And so at this point, I do not believe that the Authority will revert back to operating them on their own. It appears to work better, frankly, when they're operated privately.
Because Parking Authority people are civil servants, and you need people who are laypeople in parking and who you contract with -- 14 12/09/99 PUB. PROP./PUB. WORKS - 990818
The Parking Authority employees are not civil-service employees.
The Authority does better managing the facilities, the capital construction and repairs of the facilities and the management of the contracts.
Miss Cutler, lastly, through this process that you're going through with regard to the RFPs, there have been various newspaper stories and just personal accounts regarding parking rates and parking fees at the various garages. Now, does the Parking Authority, through these contracts with the private operators, do you determine or control what the rates are at the City-owned, although privately- managed, garages?
It is, in fact, a 15 12/09/99 PUB. PROP./PUB. WORKS - 990818 requirement in the bond indentures that the Authority retain control of the rates, yes.
And do you have an estimate on the number of parking spaces, off-street parking spaces, garage spaces there are in what's generally referred to as "Center City"?
I will give you an exact number. It's thousands, several thousand, probably somewhere around 3500.
Those are the ones controlled by the City. I'm sorry, that's what I thought your questions was.
No, I was asking for the universe, if you know it, of off-street parking.
Oh, I have no idea what the universe is, but the City and/or the Parking Authority control a very small share of the off-street parking in downtown Philadelphia. 16 12/09/99 PUB. PROP./PUB. WORKS - 990818
If you get any estimates on what the universe of parking is downtown, I'd like to see that in comparison to what the City owns, and I'd like to see a comparison between our rates and the private public rates.
I'll be happy to provide it. In fact, we're very conscious of the fact that we -- and tend to set our rates slightly below market, you know, surveying all of the surrounding lots as we go through each year. So I'll be happy to provide it.
What is the current level of employees at the Parking Authority? 17 12/09/99 PUB. PROP./PUB. WORKS - 990818
Realizing they're not civil-service employees, is there a residency requirement?
There is not because, as you are aware, the Parking Authority was established under State-enabling legislation, and we do not fall within the residency requirement.
Do you happen to know the number of employees who are not Philadelphia residents?
So then more than 99 percent do reside in Philadelphia?
But my colleague Councilman Nutter is suggesting that the question is, you could establish a residency requirement. "You," meaning the authority.
I am not sure that that is correct because the agency is considered a State agency, and I am not sure that that is correct.
Do they have to be 18 12/09/99 PUB. PROP./PUB. WORKS - 990818 at least State residents, residents of the State? 'Cause I know there are some authorities that have been established by the State, and I'm thinking of the Convention Center Authority, where there are employees who are not even State residents.
And I will have to check it and get back to you on it. I actually am not even sure that there is a State requirement language in the original legislation which created it.
If you can get that information to the Chair, I would appreciate it. Thank you, Madam Chair.
Although I would just volunteer that any performance that reaches 99.something is pretty good. The next person on my list to speak is Councilwoman Marian Tasco. Did you mean to speak? Your light is flashing?
Okay. The next is Mr. Rizzo, but hold on one minute please, Mr. 19 12/09/99 PUB. PROP./PUB. WORKS - 990818 Rizzo. I would like the record to reflect that Councilwoman Jannie Blackwell has joined us and is at the table. And after Mr. Rizzo's brief comment, then you, Mr. Cohen, recognizing that the President is circling because she is telling us that we're running very, very, very, very late, and we do need to get to caucus.
Then I'll get right to the point. Commissioner, this is the information I'd like provided to the Chair. In this new deal, we're going to get 200 parking spots. I'd like to know who we plan to park, what departments we plan to utilize those 200 spots for. I'd like to know the dollar amount that we spend and the location of the parking lots that we park and pay to park City vehicles. And I'd like to know the number of vehicles that we're parking in these pay lots rather than utilizing a facility that we already own. COMMISSIONER PEREZ: Certainly. 20 12/09/99 PUB. PROP./PUB. WORKS - 990818
With reference to your comment that you're a State agency, that distresses me. It happens that the Parking Authority is organized under State law, but does sole business for the City of Philadelphia.
Right, right. And, therefore, I just want it clear that we get very distressed when we hear somebody -- at least I get very distressed -- when I hear somebody, in answer to a question about a City policy, saying, Well, I don't know whether we have to follow it 'cause we're a State agency. For all purposes, you're a City agency. And if you seek to get away from the City requirement like the City residency, I think you ought to have some legal opinion through the City Solicitor. We take very seriously that since 21 12/09/99 PUB. PROP./PUB. WORKS - 990818 we're the only client and we set up the Parking Authority that you're a City agency. But I don't want to get into an extended discussion on that; I just want to make it clear that --
(unintelligible) separate State agency. Now, secondly, is there any set requirements that you follow in determining whether a garage ought to be leased out to a private operation instead of being run by Parking Authority employees? What makes you decide that one garage should be the subject of a lease arrangement and another garage should be operated by City employees?
All of the Parking Authority garages at this point are done under private contract.
That's correct. All of the Parking Authority's surface parking lots are still operated by the Parking Authority.
So the split is surface versus covered. If it's a surface lot, 22 12/09/99 PUB. PROP./PUB. WORKS - 990818 PPA; otherwise, it's under management agreement.
Could you give us the reason for that? I can't imagine the distinction but I'm sure there must be one.
There is, and it's predominantly financial. The Parking Authority operates 43 neighborhood parking lots. Many of them bring in little or no revenue. If we were to hire private operators to run them, we would operate at a loss; no one would bid on them.
All right. There was a lawsuit at one point several years ago with respect to the garage at 15th and Arch. What was the outcome?
When I got here in 1994, we settled it. It had been going on for eight years at that point.
That lawsuit. And wasn't the operator the same operator?
That is correct, who currently has it, yes -- and will have it until the year 2000.
And were all the 23 12/9/99 PUB. PROP./PUB. WORKS - PUB. MEETING problems worked out?
Thank you very much. There being no further -- are there any other questions by members of the committee? (No questions.)
Madam Chair, I move that we adjourn the public hearing and move into the public meeting.
Thank you, Madam Chair. I move that Bill No. 990818 be reported out of this committee with a favorable recommendation and that the rules of Council be suspended so as to permit first reading at the 24 12/9/99 PUB. PROP./PUB. WORKS - PUB. MEETING next meeting of Council. (Duly seconded.)
All in favor say aye? There are none opposed. Then Bill No. 990818 has been reported out of this committee with a favorable recommendation and with the recommendation that the rules of Council be suspended so as to permit first reading this day. I thank the committee very much and I thank the members of Council who helped us with this record.
All members of City Council shall report immediately to the caucus room. It's been a very long day and we're getting a late start on it. (Adjourned at 11:16 a.m.) - - - 25 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Thursday, December 9, 1999, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COMMITTEE ON PUBLIC PROPERTY & PUBLIC WORKS BILL NO. 990818 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter