I think there are a lot of different pieces. I'll take one. There is an economic opportunity plan that's attached to the program statement. It is more aggressive than the City has ever attempted before. As it was put together, we had people walk around and interview to determine what the maximum opportunities really are in every aspect of NTI, at least those parts that we knew about. And so, you know, we've thought about the hauling opportunities, we've thought about the laborer opportunities, we've thought about the various, you know, opportunities that might be available. We are sizing our bid packages in a way that provides maximum opportunity for people out of neighborhoods. I think we are -- we are constantly 217 12/11/01 FINANCE COMMITTEE - BILL 010694 looking for other leveraging points off of NTI. So for example --
What is the plan to revitalize, for example, the corridor that goes up and bring in new job opportunities and new entrepreneurial opportunities for those individuals who have been there for years and now may see an opportunity, and even a CDC coming in and being a part of a profit-making, you know, operations?
We agree with you that it's more than just housing. There are a couple things that are happening. One, the Planning Commission is working with the Commerce Department to begin to look at basically a neighborhood-corridor strategy for our neighborhood corridors. I mean, again, I think in many ways, our neighborhood corridors, some have bustled and continue to grow, and I think particularly ones like the Fifth Street Corridor, and others are, you know, just stable, and others are on the decline. And so they're beginning to look at that strategy. I've also been approached -- I mean, one of the exciting things, I guess, about NTI in the 218 12/11/01 FINANCE COMMITTEE - BILL 010694 paper and newspapers and the excitement is that a lot of times, people come forth and say, you know, we want to contribute and help, and there are some individuals at Temple University that's also interested in thinking about neighborhood-corridor strategies, I mean, you know, the role that the neighborhood corridor -- do you look at, you know --
Shouldn't that have been a part of the very basis of what we're talking about? When we're talking about neighborhood revitalization, shouldn't this have been a core aspect of it?
I think there are several things that are critical to neighborhood revitalization, and I think the whole economic-development piece is one of them. I think that there are people that we've met with that say the buildings are nice, but what about the fabric of the community? That's a Pat DiCarlo point of contention. Those are issues that we still have to get to. I think that we've got to begin locking 219 12/11/01 FINANCE COMMITTEE - BILL 010694 down pieces so that we're not trying to plan all of government in one fell swoop. What we've learned is that what we've bitten off is an enormous undertaking. It's not that we don't acknowledge and recognize that this is a fundamental piece of what have we need to do and that the success ultimately of rebuilding neighborhoods is also, some of it, economic opportunity. I think it is not in place more because of just the sheer magnitude of each one of these undertakings than it is our not understanding how fundamental that is to the ultimate well-being of a neighborhood.
We went through a process a couple months ago looking at renewal communities application regarding economic development. I just want to put this out there and lay it out there just to be honest about it. In preparation for that application, the City Planning Commission and the Reinvestment Fund 220 12/11/01 FINANCE COMMITTEE - BILL 010694 and other people had met at different economic-development anchors and avenues, they mapped the Empowerment Zone, they mapped the Enterprise Zone, they mapped the Keystone Opportunity Zone, but they didn't map the commercial corridors. So I asked the question: Why didn't you map the neighborhood commercial corridors? The answer was something to the effect "we didn't think about it." And I don't understand how when people look at targeting economic development, they look at the Empowerment Zone, they look at the Enterprise Zone, they look at the Keystone Opportunity Zone, and always forget to map the neighborhood commercial corridors. And it's not just a matter of, why isn't there a perfect strategy? Do you not believe that we can actually stabilize and revitalize neighborhood commercial corridors? And if so, when is that discussion going to begin? because it's obviously not a part of this. I mean, does this part of the planning has been pushed off to the Commerce Department, and the Commerce Department continues to focus on the Enterprise Zone and 221 12/11/01 FINANCE COMMITTEE - BILL 010694 basically industrial development rather than commercial development and never puts the focus on neighborhood commercial strips.
And let me follow up on that. I do not believe that you can't revitalize neighborhoods because we try to -- and this is a question I asked over and before that to Ed Schwartz. You could build the housing but unless people in the neighborhoods have the jobs, unless we revitalize that aspect, we are not going to get the blight removal that we need. We have built housing, but with an unemployment rate in every neighborhood of 60, 50 percent or more, and a high school dropout rate of 50 to 60 percent... So unless you have those two things, you are not going to be able to do it. And to me, it's surprising that -- this has to be a core principle of any blight removal plan. If you don't revitalize Fifth Street, then you have lost an incredible opportunity of investment and entrepreneurial aspect of business in one neighborhood.
Councilman, if I may, I absolutely agree with your comments and Councilman 222 12/11/01 FINANCE COMMITTEE - BILL 010694 Goode's comments. Perhaps it wasn't clear in the outline of the planning process, but we intend to look at, and are looking at, in terms of review of the 32 plans we have, all of the elements that make up a good neighborhood, including economic development. You might notice in our standards document, which was distributed some time ago, and we can get you another copy, we also have economic development standards there. The map that you refer to, I think it was a TRF map that looked specifically at housing markets, which was perhaps why economic development zones were not there -- it was not a City Planning map.
So it's specifically focused on economic development, yet it only mapped the Empowerment Zone, the Enterprise Zone, and the Keystone Opportunity Zones. They did not take the time until I asked for neighborhood commercial corridors. And furthermore -- just let me make it 223 12/11/01 FINANCE COMMITTEE - BILL 010694 plain. Some of the plans you will be reviewing, neighborhood strategic plans, because of OHCD's historical bias toward housing, they will not include neighborhood commercial corridor development or a whole lot of it to the extent which is necessary. Furthermore, there's this whole division in community development between housing and economic development that we've tried to bridge through CDCs -- it's not bridged yet. So when you approach what you're trying to do in terms of neighborhood transformation, which has the same housing bias, and then you pass off the economic development part of it to the Commerce Department, they're going to do the same thing they've always done: They focus on industrial parks, they focus on enterprise zones, and the same backwards stuff they've done for years has nothing to do with creating opportunities, providing goods and services and opportunities on a neighborhood level. (Applause.)
Let me punctuate that. 224 12/11/01 FINANCE COMMITTEE - BILL 010694 That unless we do create the jobs mechanism, unless we leverage money so that that unemployment rate at the neighborhood level really begins to come down -- we could build housing that will deteriorate along with the years because if people don't work, they will not maintain.
And I think it's something that has to be really emphasized and prioritized in whatever way we go, because unless we empower certain of the CDCs to become the business agent or the community developer or whatever it is in terms of this or bring in new monies and let the market come in, I don't see how we are going to really begin tackling the blight programs that we have in the City of Philadelphia.
I would appreciate feedback on our economic opportunity plan. We've tried to draft something that anticipates community opportunities for -- business opportunities for CDCs, for individuals. And we have, you know, one of the benefits we hope we get out of having a project manager is that we can integrate a lot of, you know, what's traditionally viewed as bells and 225 12/11/01 FINANCE COMMITTEE - BILL 010694 whistles into the very fundamentals of how we operate the programs so that we really have the time and the wherewithal to identify organizations that might be able to do some of the construction work. We're putting landscaping contracts out there, you know, that these ought to be opportunities for businesses and the community. And so, you know, I think we can have a dialogue. The Administration shares the commitment to creating spin-off opportunities for people having, you know, having input and feedback from Councilmembers about specific opportunities you can think about would be helpful to the people that we have whose sole task is to --
But beyond business opportunities, we're talking about neighborhood commercial corridor development, we're talking about developing specific avenues of economic opportunity within neighborhoods that are not basically PIDC clients and what they're going to do and how we're going to subsidized them and stuff that's home-grown by CDCs or neighborhood-based entrepreneurs. That's what we're talking about. We're talking about --
Just job creation. It 226 12/11/01 FINANCE COMMITTEE - BILL 010694 is job creation at the neighborhood level in order to be able to facilitate the individuals that can buy a house. And in order to, you know, in order to bring a working-class and begin building homes that are marketed within the area and people can begin to develop that working-class neighborhood that we need to maintain.
Thank you. Thank you very much. Councilman Clarke, you are next, and Councilwoman Miller is wondering if you will defer to her for one question.
How could I not defer to the Councilwoman. Councilwoman?
Thank you, Councilman Clarke. I have a couple quick questions, but I understand we're going to recess, so I have some questions I'll hold until tomorrow. And those questions tomorrow are specifically related to this question I'm going to ask. I'd just like to know really quickly if there is some type of timeline for how soon -- I know that you've already started, you know, NTI activities, demolitions, abandoned cars, 227 12/11/01 FINANCE COMMITTEE - BILL 010694 vacant lots, and all of those kind of things, but I'd like to know if you have some date in mind or month in mind that the expanded NTI activities that will be funded by the bond proceeds will begin. Do you have a realistic month that you believe that some of this will start?
With respect to the demolition activities, we were looking to over -- to begin to launch the program, large-scale funded and we've gotten the money, in the spring, so I would say April or May. We want to use those first two months after we get the money to test two types of bid packages -- one that's fairly large in size, 150 properties; and one that's small in size. One of the methodologies we're using is in order to meet some of our objectives about participation, we don't want to have bid packages of all the same size and that some people can't effectively compete for that business opportunity. So we want to run those, kind of get the kinks out of the system. I want to again emphasize that the City has never, for example, ever done a 150-property bid package. We also want to make sure that we work 228 12/11/01 FINANCE COMMITTEE - BILL 010694 with the Councilpersons in planning neighborhood meetings and getting notices out and doing questions and building that into the timeline. We want to make sure that we appropriately allocate the right amount of time to do asbestos removal as that's necessary or get State approvals and signoff. So our plan calls for April and May, you know, to be the prototypes, get the kinks out of the system, and then beginning every two weeks, putting out bid packages shortly after that.
Madam Chair, tomorrow, I'm -- I know I'm using Councilman Clarke's time, but I'd like to know how the amendments that's just been proposed will impact the process of getting started. I don't need that answer today though. But at some point we have to tie the amendments in --
Ms. Wilkerson or Ms. Smith, would you be prepared to answer in detail that question? Unless you feel you can simply answer it now, but if it requires a --
I think it's a long answer. 229 12/11/01 FINANCE COMMITTEE - BILL 010694
Okay, all righty. Thank you, thank you. And that would kind of put us back on point as well tomorrow. Councilman Clarke, thank you for your patience.
Thank you, Madam Chair, it's no problem. First of all, Madam Chair, I'd like to add to Councilman Goode and Councilman's Ortiz's concern about our inability to adequately develop commercial corridors in our neighborhoods, but what I don't want to do is for us to minimize the need to develop those communities around those commercial corridors because every time I have an opportunity to meet with a developer to attempt to get that developer to build a commercial development in that neighborhood, the first thing they do is pull out the chart, they do the half-mile, the one-mile, the two-mile radius to determine the demographics, both the level of vacancy/density, the level of spending power. So while I agree that we need to put additional emphasis particularly in the Commerce 230 12/11/01 FINANCE COMMITTEE - BILL 010694 Department, and I definitely agree with you, Mr. Goode on that one, we really need to focus on developing those communities around the parameter of those commercial corridors. First I'd like to ask a question to kind of follow up on Councilwoman Tasco's question earlier -- I just needed some clarity on that with respects to staff at OHCD and the possibility of some of this financing, particularly the private-activity financing being housed in OHCD. Is it -- it was always my understanding that staff that was funded by HUD dollars were restricted to work on HUD-funded projects; similarly in the Philadelphia Housing Authority, Philadelphia Housing Authority employees are restricted to working on Philadelphia Housing Authority developments. Can you give me some clarity on that? 'cause I'm not clear if those staff people over at OHCD will in fact be able to work on projects outside of the traditional scope of services legally. MS. McCOLLOCH: That is accurate that the regulations governing Community Development Block Grant flow administratively from the staff people 231 12/11/01 FINANCE COMMITTEE - BILL 010694 that work on them. If it's a program that's staffed by people who are funded with CDBG funds, those regulations flow based on our current interpretation from HUD. One of the things we're trying to talk to HUD about is whether there's another way to look at that -- I don't know the answer to that. And also to think through what other -- how staff people could be funded, their salaries and fringe benefits and so forth funded in part with the private-activity funding, then it would -- it wouldn't apply. So there could be people working at OHCD who are not -- whose salaries are not being funded with Community Development Block Grant funds, and then there would be no restrictions on the activities in which they engage.
Yeah, I mean, we're looking at that. You know, one of the things we want to accomplish by having the taxable and private-activity and GO bonds is, you know, getting relief from all of the CDBG restrictions, so we're 232 12/11/01 FINANCE COMMITTEE - BILL 010694 looking at, you know, trying to get an interpretation out of HUD. I think it's more probable we would fund staff out of the operating budget as opposed to using bond proceeds, you know, to pay staff cost. You know, I don't think we would be inclined to do that. So, you know, we're working through those issues, those are a part of the detail that we're looking at right now. The City is committed to having a market-rate housing program and are simply trying to figure out the best way to fund it.
Mm-hmm. Okay, thank you. With respects to vacant properties and vacant lots currently in the City of Philadelphia -- and I forget what the number are 26,000 and the other number is 15,000, 14,000?
It's 26,000 vacant houses, nearly 31,000 vacant lots, and this was based on the January 2000 survey, and that's just a snapshot. And there was, like, 2900 large commercial or industrial buildings -- something over four stories usually falls into that category.
Okay. Has there been 233 12/11/01 FINANCE COMMITTEE - BILL 010694 an analysis done based on your projections in terms of development scenarios for either commercial, residential conveyance of vacant properties to side-yard property owners, some other entity that if in fact -- say maybe 50 percent of those properties came back on line on tax-collecting rolls, has there been an analysis done on what the revenue associated with that would be?
We have begun to do an economic analysis. I can pull that information out. And basically, I think the EPOP looked at the impact that abandoned property can have on tax revenues, and we've begun to do some of that type of analysis.
There's also one other document. The Horticultural Society had a study done that projected what kind of revenue might be generated by putting properties back into productive use, and actually in their formulation, I believe that it paid for the entire demolition undertaking that the City would have to otherwise fund, you know, the way we're proposing to fund it. I can make that available to you. It's a study that's about a year and a half old, two years old. 234 12/11/01 FINANCE COMMITTEE - BILL 010694
So assuming that they're marginally correct, they could raise some substantial revenues and those revenues would go into the General Fund and subsequently be in a position to fund other issues, other initiatives that we find ourselves needing?
That's correct and I'll provide you a copy of that. I think we haven't -- our strategy -- what we're -- you know, our justification has not relied on that, although I think that is worthwhile to look at that.
Yeah, I would just like to know what that number would be. The last issue I have for today centers more around the proposal associated with the Project Review Team. I don't know who to ask this question of, but I just wanted to indicate my potential concerns as a District Councilperson. The language in the amendment -- and I truly believe that this amendment in this particular section was crafted to protect the District Councilperson. I'm somewhat concerned because this is not -- this recommendation of the District Councilperson or comment is not binding, and I guess 235 12/11/01 FINANCE COMMITTEE - BILL 010694 my concern is that currently, under today's regulations, a District Councilperson, particularly in land acquisition and disposition and Redevelopment Authority agreements, has the wherewithal to be in a position to try and muster eight additional votes to support that resolution or that legislation that that person introduced. And I'm concerned that with this additional level of bureaucracy: A, that it may take that jurisdiction out of the District Councilperson's hand; B, that it may create an additional level of bureaucracy that I'm somewhat concerned about as a District Councilperson. And I guess the question to the team is to kind of talk me through what this potentially this could impact on. In your earlier slide presentation, there was mention of $50 million for a land assembly and acquisition if I'm correct. And my understanding there currently -- the current process in place allows the District Councilperson, with the addition of a minimum of eight other members, to deal with that scenario. Could you kind of talk me through what the potential for that, this new Project Review Team 236 12/11/01 FINANCE COMMITTEE - BILL 010694 could be? And, I don't know, maybe you're not the right person for me to ask this question. I guess -- I don't know, Mr. Wetzel, 'cause you're in the acquisition business. I'm just concerned, you know, that there could be another level that, you know, we could as a District Councilperson could not be involved in beyond recommendation. For right now, we have a little more than that.
I think on the acquisition, I don't know that the project team is involved in the acquisition disposition process. The project -- the acquisitions that are going to be funded by bond proceeds that are not part of a legislative process would now require City Council approval by resolution, and I think that would impact properties that where a CDC, for example, might be given a grant in order to do negotiated acquisitions, those negotiated acquisitions currently would not require action by City Council. Until the land bank issue is resolved finally, those acquisitions would require action by City Council. I think the project team, from my understanding of the legislation, the project team 237 12/11/01 FINANCE COMMITTEE - BILL 010694 is most directly involved in the creation of bid packages and in the approval of contracts for -- I think it's limited to construction in connection with the demolition activity, but I would need clarification on that.
Well, all right, and that was my understanding in discussions within the earlier testimony that said anything related to bonds. And then when I saw the presentation, $50 million in bonds will actually go towards the acquisition and potential disposition and the land, and I just want to find out what your understanding of --
My understanding is that the project team is not involved in acquisition disposition decisions, that those, as I indicated, for the time being, until a land bank is approved, would require approval by City Council, if that approval is not already a part of the acquisition disposition process. My understanding of how the legislation is drafted is that the project team has a couple of important roles. One is in the review and approval of the bid packages, and my understanding of the 238 12/11/01 FINANCE COMMITTEE - BILL 010694 legislation is that it's bid packages in connection with the demolition. My -- my -- and also the contracts associated with demolition activity. It's not my understanding that it's involved in encapsulation. If I'm wrong -- (Ms. Wilkerson confers off record with colleagues.)
Any contract in connection with bond proceeds, you know, and that was not my understanding. I think that creates a problem. For example, if bond proceeds are used in a tax credit development, that would require that a transaction being done by a private party, the bid packages would have to be reviewed by Council. That's -- that's the kind of -- that's the kind of bureaucracy and oversight that I think will, in the long run, kill a lot of development in the City, if bond proceeds are used to fund a private development. You know, and you can talk with the private developers in the room about whether or not, you know, review and approval of every contract for construction would go to the City Council, you know, what impact that would have on development. It was not my understanding that that was 239 12/11/01 FINANCE COMMITTEE - BILL 010694 the intent of the legislation. I -- it was my understanding that it was intended to be limited to simply bids in connection with demolition.
Point of information just so the record's clear. It's not my understanding of what that particular Project Review Team does. My understanding is that Council approves the budget, and the Project Review Team makes sure the budget's enacted the way it was presented. So basically, it acts as a project manager, as it would on any major project in the expenditure of public funds, and there's project managers that make sure through the process that contracts are being let properly, are being delivered properly, and that the budget is being followed. 'Cause it's not uncommon to what happens in private-development projects or public- development projects or public-development projects. It is simply oversight to make sure that what is said would be done through the budget that was approved by Council, is in fact done in practice when we get on the street. 240 12/11/01 FINANCE COMMITTEE - BILL 010694 I mean unless that's different --
Well, that's not the way people are portraying the legislation, but it's the way it's read, the way it's written.
And I'm trying to understand now why currently as a District Councilperson on -- and I'm kind of okay with the demolition 'cause we've never done this before, but currently under land assemblage and potential development initiatives, why I need a Project Review Team to approve anything before it comes to me as a District Councilperson, I don't understand that.
Even, in fact, when 241 12/11/01 FINANCE COMMITTEE - BILL 010694 they come to me, if I make comments or recommendations, then that Project Review Team will simply say, Well, we don't agree with you.
Under the Mayor's legislation, they don't have to agree with you either.
No, it says they'll take input and comment, but it doesn't mean there's any -- (Unintelligible, parties talking over each other.)
Frankly speaking, I think that there are currently laws in place that require Council involvement.
No, there's custom in place, Councilmatic courtesy is a custom.
I introduce at least one resolution a week related to acquisition and disposition, and I have to fortunately be --
-- supported my 242 12/11/01 FINANCE COMMITTEE - BILL 010694 resolutions and -- (Indiscernible, parties talking over each other.)
Excuse me, please. Excuse me, please. I think the questions are supposed to be directed to those at the table. Let's not debate ourselves.
I'm just trying to get clarification on the characterization of the Administration's --
Your point of information should go to those at the witness table.
I originally did, but then a member or person on the committee injected --
I think the Administration did not sponsor the legislation. I think it's probably most appropriate for the sponsor of the legislation to talk about what the language means, what the intent is. We would be in a position to respond with how we think it would impact the implementation of the program and what effect we think it might have on some of the other initiatives 243 12/11/01 FINANCE COMMITTEE - BILL 010694 under way in the City, but I think the --
When you speak of the program, what would that program be? I mean, I'm not aware of any program at this point; I think the program, in your own words, is evolving, so how could you impact the program when you don't even know what the program is?
For example, we anticipate doing encapsulation and housing rehabilitation. If every time a homeowner gets a housing rehabilitation grant that's funded out of NTI, they've got to come to City Council for review of contracts, and that would be a problem. But I don't know --
You know, I did not draft the language. My understanding of the language was it was limited to demolition packages. I clearly am completely wrong about that, and it would be helpful to have somebody who drafted it to explain what the intent is.
Do we have a staff person to explain it so that we're all pretty clear?
Councilman 244 12/11/01 FINANCE COMMITTEE - BILL 010694 Clarke, would you like to go to your next question until staff who dealt with that issue is present?
Oh, that was actually my last question. I didn't anticipated that it would spur a debate.
As a District Councilperson, I'm just concerned. I mean, we've had this discussion. I'm concerned that myself, as a District Councilperson, now has an additional team appointed by the Council President that has to authorize anything in my district, and I can make recommendations or suggestions, but they do not have to adhere to that, and I don't understand why, as a District Councilperson, I need that. I can understand if I need assistance by a project manager, as Councilman Kenney characterized it, but when you have a team that has final approval, I, as a District Councilperson, frankly speaking, don't understand why I need that.
I think that's a very important issue. It has always been custom and practice that when it comes to property within each person's district that the District Councilperson's 245 12/11/01 FINANCE COMMITTEE - BILL 010694 the one who has the say. That supersedes Councilmen-at-large, supersedes the US Congress, supersedes the Senate, the State House, everybody else. (Laughter.)
And we hold that and guard that power jealously. That's part of what we are.
So obviously we need clarification on this issue. Councilwoman Miller, you wanted to speak with regard to this issue?
Certainly. Councilwoman Miller, then Councilman Cohen.
Councilwoman Miller was asking a question and then Councilman Cohen. Hold on, Councilman Cohen. Councilwoman Miller? 246 12/11/01 FINANCE COMMITTEE - BILL 010694
I think this is a issue that is important to be clear and clarify. Everybody does not have the same understanding. And last week, when we read the proposed amendments, myself and my staff were concerned that this too would just add another layer of bureaucracy, and this blight project will never get done. We've already been talking about it for two years; it will be another two years before we get these projects off the table. Neighborhoods are falling down as we speak, so I agree that we need to get this clear. If in the past, it's just been customary that Councilpeople were given the opportunity to be involved, then now we have to do more than just state that we're going to also be given a reasonable opportunity for review, comment, and recommendation. We're either going to be in this or we're not going 247 12/11/01 FINANCE COMMITTEE - BILL 010694 to be in this. As a District Councilperson, I am in this. If I'm going to be in this -- and I want it to say it in here that I, Donna Reed Miller, a District Councilperson, my constituents are going to call me. They call us now and everybody knows that. So this part has to be real, real clear in terms of our role. If we're going to write something, we have to be as clear as we want the Administration to be. When they first wrote the RFP for the project management, it wasn't real clear about where Councilpeople were going to be involved and have input. And I read the revision of the Administration's RFP in terms of the project management things, and it's very clear where Council's spelled out. The amendments have to be very clear of the role the District Councilperson has when they say there's a project team and decisions. And I don't want to be a part of a reasonable opportunity for review. Comment or recommend. We're out there working in these streets every day dealing with our constituents. I want more than a reasonable opportunity. I want to be in it. 248 12/11/01 FINANCE COMMITTEE - BILL 010694
Thank you, Councilwoman Miller. Councilman Cohen on this issue and then Councilman Goode on this issue.
I want to make it clear -- and I don't know that there will be time enough this afternoon since we're about ready to recess -- that this is a matter that involves all 10 Councilmembers, not just the 10 District 11 Councilpersons. I've been both -- I'm the only 12 member on City Council who has been both a District 13 Councilperson and a Councilman-at-large. And both 14 play a role, we both vote. 15 A District Council Councilmember who tries 16 to be reasonable and fair with all other districts 17 in the City may well be accused of being a traitor to his or her own district because the main responsibility of a District Councilmember is to make sure that that district gets properly taken care of and not so much to worry about all other districts. But the beauty of the Home Rule Charter is that there is a provision to protect all Philadelphians through the Councilmembers-at-large. 249 12/11/01 FINANCE COMMITTEE - BILL 010694 We're concerned about every part of the City. It's our job to see that all of the districts are appropriately taken care of. And I don't hear a word about the role of the Council-at-large, and if anybody in the Administration or in City Council or anywhere else in the City thinks that Council is going to be ruled soley by District Councilmembers, I want them to 10 be notified that from this moment on that the war is on. (Laughter.)
That's not going to be the case because we who are Councilmembers-at-large were elected by the same electorate that elects the Mayor, holds us responsible to make sure that Philadelphia is regarded as a whole city and that rights pertain to all members, to all people who live in the City of Philadelphia, not just the particular districts. I support the rights of District Councilmembers. They ever a real responsibility to their district. That's their number-one role. But the Council-at-large role is the responsibility to everybody throughout the whole city to see that the 250 12/11/01 FINANCE COMMITTEE - BILL 010694 whole thing is worked out fair. So I wanted to say that Madam President and Madam Chair of this committee. I think that better be very clear in the minds of everybody who's proposing this kind of legislation.
Thank you, Councilman. I believe that the -- and I'm speaking now for myself and not as Chair of this committee, I'm speaking as a District Councilperson. I believe that the framers of the Charter understood that and so that is why we have districts and at-large people. As we all know, when it comes to property transfers and dispositions, it has been the role of the District Councilperson to make that decision, it's always been respected. We know that it takes all of to us help make this city what it is and we respect the rights of each and every person here. Councilman Goode on this issue.
On this issue, I will say I completely concur with Councilman Cohen. I know I'm already outvoted on that, so I'm not going to raise that issue. 251 12/11/01 FINANCE COMMITTEE - BILL 010694 (Laughter.)
I do have a separate Vacant Property Review Committee bill tomorrow that I want support for, but I will respect the rights of District Councilpeople but say that there should be a role for at-large people as well. I want to deal very quickly with a line of questioning regarding attracting private capital.
Councilman, if we could, because we're going to recess this hearing until 8:30 tomorrow morning.
There's been talk about this being market-driven, about this whole process being investment of public funds in neighborhoods to attract private capital. We know that part of the problem in many of these neighborhoods has been bank redlining. We know from studies from my own office that most of the money that's invested in redevelopment comes from the private sector, a great portion comes from the banks. So I want to know 252 12/11/01 FINANCE COMMITTEE - BILL 010694 which banks you've talked to and what they've committed to in this process. Since we've been doing neighborhood transformation for two years, have you talked to First Union? have you talked to PNC? have you talked to Mellon, which is now Citizens? have you talked to Sovereign? have you talked to Commerce? have you talked to Summit, which is Fleet? What specifically have you talked to the them about doing in terms of reversing the redlining that's existed in this city and other urban centers for decades?
Let's take them one by one. Have you talked to First Union?
Has anyone from -- you're the director of neighborhood transformation. Has anyone talk to First Union with regard to neighborhood transformation?
Yes. As I said, a number of people, as part of the research for this initiative, have reached out to a variety of banks -- 253 12/11/01 FINANCE COMMITTEE - BILL 010694
I'm talking about putting up some money for redevelopment.
And Commerce, you haven't asked for a check, you haven't asked for a commitment, you haven't asked what sort of products they're going to put out there in terms of community development investments, in term of mortgages, in terms of small-business loans, you haven't done that. Yet my office released a report over a year ago studying five community development corporations, reputedly the top, except for maybe APM, maybe the top five, showing $134 million in 254 12/11/01 FINANCE COMMITTEE - BILL 010694 investment. $84 million of that came from the private sector, a significant amount of that money came out of the banks. In fact, through that report, the investment attracted to those areas by CDCs, it was more money put in there by banks than by the local government. Yet you haven't talked to the banks.
As I was going to say, while we haven't asked for specific checks and funding commitments, we have been reaching out to banks through a variety of our -- through the reinvestment fund, which, as you know, is a major community development Block Grant financial institution to begin to look at strategies, like creating acquisition funds for CDCs and for-profit developers. We've been thinking --
Were you talking to the Reinvestment Fund or are you talking to banks?
No, what I was saying is, the Reinvestment Fund has been having conversations with various bankers throughout the City about roles that they can play in NTI.
That's their normal business, though. In fact, that's kind of crazy. 255 12/11/01 FINANCE COMMITTEE - BILL 010694 You're saying there's a private community development financial institution that is talking to banks about money invested in the normal course of business on behalf of the public sector. The Reinvestment Fund can't talk to the banks on behalf of the public sector when it comes to money; yet they're a financial institution themselves.
Well, often -- and we can bring Mr. Nowak to the table to talk about it. Often banks like to use, particularly when it comes to community development lending, they like to use an intermediary. In one conversation --
I'm just explaining some of the things that was told to me, Councilman. I was going to speak specifically. I did have a conversation with Mr. Lynch, who is the president of Fleet for this region, and one of the things that he talked about in our conversation is what kind of structure one could put together. And we were thinking about, for lack of better word, a collaboration of banks or a consortium of banks. He pointed to work that Fleet had done in Boston with a 256 12/11/01 FINANCE COMMITTEE - BILL 010694 community development bank there, a woman by the name of Gail Snowden, which he thought would be a perfect model. He thought that after we completed the hearings on the NTI initiative in the beginning of the year, it would be a great opportunity to get together with Miss Snowden But we also -- and in my conversations with them, they focussed --
Miss Smith, for the record, I hate to have to put it on the record, I'm trying to be real brief. This Council approved and the Mayor, by executive order, established a the Philadelphia Community Reinvestment Commission over a year ago, which met in the beginning in April that had six banks on it. This Council approved investments and community development financial institutions, this Council approved the Philadelphia (indiscernible) Fund. This Council just appropriated money to the Philadelphia (indiscernible Fund. I'm just asking, have you talked to the 257 12/11/01 FINANCE COMMITTEE - BILL 010694 banks about putting up some money? It's a yes or no 3 question in terms of each bank that I've named. Are they going to put up some money or not? And have you talked to them or not? And what is the strategy to get the banks to take deposits of Philadelphians and reinvest it in the community?
As Miss Smith indicated, the only bank we've talked to directly is Fleet.
And I think, thought, it might be interesting we have had other conversations. We've met with the foundations in town. We, you know --
I understand. I'm just trying to, you know, give you a sense of --
Dr. Nowak, what do you think the strategy of the Administration should be with regard to the conversation with banks? 258 12/11/01 FINANCE COMMITTEE - BILL 010694 (Witness comes forward.)
Jeremy Nowak, N-O-W-A-K, President of the Reinvestment Fund. I think it depends on the product is the question. Right after the NTI strategy was unveiled, Pat and I went and met with people from the -- actually from different parts of the private sector. Some were banks, in the case of Jim Lynch. We went and met with the new Federal Reserve chair, the head of the Federal Reserve in Philadelphia, Tony Santimarro (ph.). We then went to people that had equity, that did equity investing in both commercial -- in fact, both commercial and residential. And we laid out what we thought were products that if this was going to be successful would be needed, including some products that are quite high-risk, high-risk acquisition products. We also looked at the issue, which is I know is near and dear to Councilwoman Tasco and others, the issue of subprime lending, and then tried to work -- speak to them about what would be 259 12/11/01 FINANCE COMMITTEE - BILL 010694 the right ways or what would be possible ways to come out with better-priced subprime lending products. So I think the answer, unfortunately, is that it depends on the product. It's not -- and in some instances --
You're saying it should be product-based in terms of how we engage in community reinvestment.
And how it's delivered, I think mostly. So in some products, what you would want, is you wouldn't want it to be wholesale, because the constraint for the bank is twofold. It's the transaction cost of the delivery or if they need a credit enhancement. In other cases, I think it's the matter of saying in the public sector and, in fact, on the issue of the subprime lending, we threw out some ideas. If the public sector used a credit enhancement, maybe using the private activity but maybe using something else, did a credit enhancement and it laid out these criteria, would you make these kinds of loans, and we sort of played that thing out a little bit. So -- 260 12/11/01 FINANCE COMMITTEE - BILL 010694
In terms of product development, how many banks have you talked to?
Well, I have talked to around this program, I think, actually every bank that you mentioned.
That's right. If I bill them, it's on behalf of the Administration. (Laughter.)
In view of the discussion here, do you believe we should have let Citizens Financial come into this market without a community reinvestment agreement? And should we specifically talk about what products we're going to need for NTI?
Well, I don't -- that's a -- the first question, I think it gets back to the 261 12/11/01 FINANCE COMMITTEE - BILL 010694 issue of what -- I think Citizens actually did a quite -- from what I can see, a quite aggressive job of talking to people and laying out what they were going to do. There was no specific agreement.
That's right, that's right. And there's, you know, strengths and weaknesses to that. But as to whether we should have done it that way, I mean, I don't know, you could argue -- I mean, frankly, you can argue both sides, 'cause I've also seen agreements where then it doesn't get monitored and then nothing happens and "blah-blah-blah."
If this was Chicago, do you think can-do or other people in Chicago would let any bank come into their town without negotiating some statement of goals in terms of --
I think in Chicago, it wouldn't have happened, but you're asking the question, did the Administration -- it's not the Administration's job to do that.
I know it's not. It's usually intermediaries. 262 12/11/01 FINANCE COMMITTEE - BILL 010694
But I'm talking about in the town here in terms or community development. Would any other town, major town, have let a bank come in here without stating reinvestment goals or negotiating an agreement?
Well, I think it depends. Yeah, some do. Some do and some don't.
No, I was just in Baltimore, and they would I mean, I think it depends, really.
Thank you very much. We are now going to ask Mr. Rick Auerbach, Council technical staff, to take the -- all right, I've been corrected. Charlie McPherson and Tom Erekson will now take the witness seats. These will be the -- this will be the last issue of the day. We were to recess at -- Joyce and Pat, would you please stay. They will take the two other seats. 263 12/11/01 FINANCE COMMITTEE - BILL 010694 This will be the last issue of today. I do not promise it will be resolved, but I will frame a question. The Chair will take the prerogative of framing the question. The question is, and I ask everybody to listen to it. The question is, is this a matter of semantics? is it a matter of how we form the issue? Or is the Project Review Team destined to make decisions for the District Councilperson? Let's cut to the chase 'cause we don't have time. And certainly if it is going to require a detailed response, then I suspect it will have to be tomorrow. (Witnesses come forward.)
I see at our witness table is Charlie McPherson and Rick Auerbach. So is it a matter of language and how the language is framed in the amendment to the bill? Or is the question that a Project Review Team made up of one member of the administration and one member of Council will, in fact, speak for the District Councilperson? That's the question if we cut to the chase. 264 12/11/01 FINANCE COMMITTEE - BILL 010694
Charles McPherson, Chief Financial Officer for City Council. The way that the ordinance was drafted, the Project Review Team, which has one representative appointed by the Mayor and one representative appointed by the Council President -- and this ordinance says that all they have to do is have a consultation with the District Councilperson; it does not say that they are being bound by whatever the District Councilperson had indicated, is the way that this ordinance is drafted and --
All right, but I will say that even for me that that's a problem.
And the second item, I understood on my way over here as I was listening, was the issue of what it is that the Project Review Committee approves. The Project Review Committee approves anything that is a bid package and/or contract, which would include, I would assume, since it would be contract, encapsulation. The one area that would not be brought before the Project Review Team would be for the acquisition of land because that was specifically talked to us as to how that was being handled. 265 12/11/01 FINANCE COMMITTEE - BILL 010694
So you're saying property disposition would not be within the purview of the Project Review Team; is that correct?
Because it requires the approval by resolution and ordinance of City Council.
It's Rick Auerbach, Council staff. There's a separate provision that governs acquisitions, which is F of the amendments, which says that real estate acquisitions may occur with approval of Council by resolution or ordinance.
All right, then there is a follow-up question then, how this land bank -- Ms. Smith and Ms. Wilkerson, how that relates to this whole question of the Project Review Team.
The provision says that there cannot be acquisitions until the Mayor shall have submitted and Council shall have approved a land bank program, but until that occurs, the 266 12/11/01 FINANCE COMMITTEE - BILL 010694 amendment would also permit acquisitions to proceed if approved by Council, otherwise by resolution or ordinance.
In the current process, it would be permitted prior to final approval of the land bank.
All right, so I will restate it for the members of the committee. Where we are now is that the Council will use the existing system that we do for property acquisition and disposition until a land bank -- until a land bank has been created. And then what happens? let me ask Ms. Wilkerson and Ms. Smith. Where does the whole issue fit there?
We don't have those details in place. If we use the Cleveland model, any disposition would require City Council authorization; that is why we're content not to put the land bank in place until we seek approval of City Council, because those are critical issues and, you know, so we wouldn't put that into place until we have resolved the acquisition disposition control 267 12/11/01 FINANCE COMMITTEE - BILL 010694 issues with Council.
All right. I think that what will need to happen is that the amendments that deal with the whole land bank issue have to be clear so that District Councilperson and at-large Councilperson are clear on the purview with regard to the two so that there is not a question when the bill passes. We don't want to debate it after the fact. It's good that it's come up now while we're in the amendment phase so that we can become clear on this before it gets reported out of committee.
Can I just ask one clarification question on the first issue?
As it exists today, and this is for our technical staff people, as it exists today and as it is envisioned in the Administration's blight plan, without the amendments from City Council, other than Councilmatic courtesy, other than the custom of the City Council Councilmember having the ability to veto or to approve a project development in their district, is 268 12/11/01 FINANCE COMMITTEE - BILL 010694 there any language memorializing the Councilperson's right to be involved in a de facto way with the acquisition of property, the establishment of some development plan, of anything that goes on with what happens after demolition, other than the custom of Councilmatic courtesy? There's no language in that that says --
So theoretically -- well, no, practically, under the Administration's plan, without amendments, and similarly to what we're trying to clarify here with the District Councilmember's involvement under our amendments, there's no automatic right for veto or approval under the current system or the Mayor's plan without amendments; is that correct?
So the District Councilperson can advise the Administration, they could express their opinion, they can jump up and down and hold their breath if, in fact, the Administration, without any checks, currently without the amendments, can just ignore the District Councilperson and move forward in theory. 269 12/11/01 FINANCE COMMITTEE - BILL 010694
Let me say also that when we established, for example, the VPRC, and Mr. Coates is here in, what, '85 or something like 1985, that is a Council-created committee to permit the disposition of properties. I, for one, have no 10 intentions of undermining my own right as a District Councilperson to dispose of properties through that process or any other. We can't be used to undermine our own rights that we've gained, and certainly -- and I know -- and Joyce, we'll call on you right away, but we have no intentions of having this committee be used for that purpose. Certainly, as I said, the Home Rule Charter defines our roles and all of us make a city.
May I suggest, Madam Chair, that you look at the amendments under F. It says, "No real estate or any interest in any real estate shall be acquired with the proceeds of any bonds until the Mayor shall have submitted to Council and Council shall have approved by 270 12/11/01 FINANCE COMMITTEE - BILL 010694 resolution a land bank management program, unless Council shall have specifically approved such acquisition by resolution or ordinance." So there is nothing being taken away from Council regarding the acquisition or the -- we would still have to do it by resolution and/or ordinance.
That's not the issue that I raised. I didn't raise --
I think that Councilwoman Blackwell was raising an issue that I wanted to address.
My issue continues to be, or starts off it -- and you know, earlier when I asked my question, I really said I was going 271 12/11/01 FINANCE COMMITTEE - BILL 010694 to hold these questions until tomorrow as it related to amendments 'cause I knew it would take some time for discussion, but I was specifically -- I started out specifically talking about amendment number C under what I believe is 7, under Section 7. And to be more specific, following Councilman Kenney's remarks regarding nothing's ever been written and Councilpeople were only included as a courtesy, or whatever word you used, I can't remember.
I'm sorry, let me clarify just what I said, with all due respect. The Councilmatic courtesy issue, the custom of that, exists because the Council sticks together on that issue.
And it is not an issue of legislative requirement, it is not an issue that mandates the Councilperson being able to sign off. The only reason that courtesy exists is because Council as whole sticks, both district and at-large, and agrees with the position, or hopes to support the position, of the District Councilperson. So I don't think anything would change 272 12/11/01 FINANCE COMMITTEE - BILL 010694 under these amendments because all of us who are not -- well, not us, but all those who are in a district would continue to support the issues and their colleagues when it comes to issues of district prerogative.