COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Saturday, December 2, 2000 10:15 a.m. - - - BILL NO.'s: 705, 706, 721, 722, 723, 724, 725, 729, 730, 731, 732 733 Related to New Stadiums (Full text of all bills attached hereto.) PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN JANNIE BLACKWELL, Vice Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN FRANK J. DICICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN W. THACHER LONGSTRETH COUNCILMAN RICHARD T. MARIANO COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN J. O'NEILL COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 12/2/2000 WHOLE - STADIUM BILLS I N D E X Boston City Councilmembers Maura Hennigan and Chuck Turner. . . . . . . . Leonard Tose . . . . . . . . . . . . . . . . . 94 NAACP Jerry Mondesire. . . . . . . . . . . . . . . . 102 Clinton Connor . . . . . . . . . . . . . . . . 114 Robert Sklaroff, 30th St. Station Proponent 116 Michael Sklaroff, young son of R. Sklaroff 120 Herbert Sumsky, Private Citizen. . . . . . . . 125 Beth McConnell, PennPIRG . . . . . . . . . . . 126 John Vago, Private Citizen . . . . . . . . . . 135 Bob Sorel, Philadelphia Urban League . . . . . 139 Chris Randolph, Philadelphia Green Party . . . 148 David Gleason, Northern Liberties Resident . . 158 Dan McShain, Northern Liberties Resident . . . 162 3 12/2/2000 WHOLE - STADIUM BILLS P R O C E E D I N G S
Good morning, everyone, and welcome. This is a continued public hearing of the Committee of the Whole regarding Bill No.'s 705, 706, 721, 722, 723, 724, 725, 729, 730, 731, 732, and 733. Our first guests, I certainly want to welcome them. They are two members of City Council from Boston, and I would ask that they please approach the witness table. Their names are. . .
Councilmembers Maura Hennigan and Chuck Turner. (Witnesses come forward.)
Members of the Council, ladies and gentlemen, it is a pleasure to be here in your beautiful city. We 4 12/2/2000 WHOLE - STADIUM BILLS flew down from Boston this morning. For the record, my name is Maura Hennigan. I am a City Councilor in Boston. I serve as a District City Councilor. Although I was first elected when I was years old, I can say that I am the 7 longest-serving member of the City Council, first 8 serving as an At-Large Councilor, and then when we 9 changed our form of government to at-large and 10 district, have been a District Councilor for the 11 past 16 years, so it's a total of 19 years that I 12 have served. I presently chair the Ways and Means Committee for the City Council. And we are here today because Councilor Cohen, as well as Councilor Ortiz, brought to our attention that you are taking up this matter possibly on Thursday for a vote, and that we, in our city in Boston, and at least five of our -- AUDIENCE MEMBER: Go back to Boston.
Excuse me. I am not going to tolerate -- I am not going to tolerate this. We did have guidelines. And anybody that disrupts anyone testifying will be escorted out of the chamber, and possibly arrested if they refuse to leave. 5 12/2/2000 WHOLE - STADIUM BILLS Now, we're -- this is a very important issue, and I am asking that we respect each other, please. Please proceed. BOSTON
Thank you. I am here, in addition to my colleague Councilor Chuck Turner, who will speak after me. I also am here to present testimony to each and every one of you, Madam President, from three other colleagues, who were unable to come down today, given that we just found out about this yesterday: Councilor Francis Mickey Roach, At-Large City Councilor; Councilor Peggy Davis Mullen, At-Large Councilor; and Councilor Michael Ross, who is a District Councilor, and he is the District Councilor where the facility in Boston is being proposed to be sited. Councilor Maureen Feeney, who I do not have a letter from today but was unable to reach her until last evening and her office staff had gone home, asked me to express her opposition to public subsidy of stadiums as well in my testimony here today. Let me say that I certainly am not 6 12/2/2000 WHOLE - STADIUM BILLS familiar with the specific details, as obviously you are with your legislation. What I feel that I can comment on is that there is a common bond that I believe should be established with municipalities across the country as more and more sports teams and major league baseball continue to put a burden on our tax base and our taxpayers by asking municipalities to fund stadiums with their own dollars or by creating revenue streams. In the case of the City of Boston, they have asked the City to create a subsidy through a $212 million proposal that has already been passed by the state legislature; and although not physically before the City Council, the City Council is hoping this coming Wednesday to take a symbolic vote to send a message to the Red Sox, to major league baseball, and to other municipalities that it is time to say no to public subsidies. The $212 million that our plan is asking for includes $140 million for the City to take private property by eminent domain and displace those businesses; and in addition to that, take $72 million to construct a 3,000-car parking garage. 7 12/2/2000 WHOLE - STADIUM BILLS I know that your city has burdens itself, both financially with your library systems; certainly in our city, in addition to our libraries, our housing is a major concern for our residents, our schools, our infrastructure. And although the City of Boston is in very, very good financial order and actually has a substantive undesignated fund balance in excess of 100 million, we are very, very much needing resources to deal with ongoing issues that I just mentioned. So that is why our constituents are very strongly urging us to reject that, and I am here as one of at least five councilors whose testimony I have before me that are asking for this to be rejected. And what you should know is that we have a 13-member body, and unlike you, we only need 5 members to block a loan order; a two-thirds super majority is needed from our body in order to pass a loan order. And as in the case with yours, it is two separate readings which have to be separated by at least a week's time. I know that the time is limited today, and I don't want to take more time than is 8 12/2/2000 WHOLE - STADIUM BILLS necessary. I know my colleague Councilor Turner has a statement to make as well. But we are more than happy, as far as our ability allows us, to answer questions, which you may have. But once again, in closing, let me just say that it's so important that we as cities stand together. And although I am a Red Sox fan, and probably in Philadelphia, I am sure you can understand that, as I'm sure each and every one of you cheer your respective teams on, let me say that it is not -- you can be a sports fan without believing in public subsidies. Major league baseball and sports teams and the players have more than adequate resources to make these deals work. What we should not be doing is burdening our tax payers.
We should be about the business should be about: helping the people who need the help, stimulating economies, but at the same time, making sure that our first priority are our people. Thank you very much for the invitation to be here today, and more than happy to help in any way that we can.
Thank you. 9 12/2/2000 WHOLE - STADIUM BILLS BOSTON
My name is Chuck Turner. I am a City Council representative of the 7th District in the City of Boston. I support wholeheartedly the statements that were made by Councilor Hennigan, and I thought that perhaps what I could offer to the record that might be of some help in your deliberations would be a few statements from a recent study that we would urge the City Councilors to get and examine carefully. It's called "The Stadium Gambit and Local Economic Development," by Dennis Coates and Brad Humphrey. They are professors in economics at the University of Maryland who undertook the study because of their concern and interest in the effect of the stadiums in Baltimore, on the economics of the situation in Baltimore. I'd like to just read a couple of sections to give you a gist of the conclusions that they come to after studying 37 cities, 37 cities that had stadiums built over a period of time. "They say that in stark contrast to the results claimed by most perspective economic 10 12/2/2000 WHOLE - STADIUM BILLS impact studies commissioned by teams or stadium advocates, the consensus in the academic literature has been that the overall sports environment has no measurable effect on the level of real income in the metropolitan area. Our own research suggests that professional sports may be a drain on local economies rather than an engine of economic growth." And, again, I understand that those statements might be very startling, given the general train of thought, but we really urge you to look at the data and the research that they use to back up those conclusions, because it's not just based on feelings; it's based on their analysis of stadium construction and operation around the country. They go on to say that "Our results indicate that the professional sports environment in the 37 metropolitan areas in our sample had no 21 measurable impact on the growth rate of real per capita income in those areas." And, secondly, that "The professional sports environment has a statistically significant impact on the level of real per capita income in our sample of 11 12/2/2000 WHOLE - STADIUM BILLS metropolitan areas, but that the overall impact is negative." Again, that mix might seem startling but their conclusions are backed up by facts. I'd like just to conclude by saying that those of us who have the responsibility of representing people in the urban areas across this country are facing very, very difficult situations. Whether we're looking at issues of housing, looking at issues of education, looking at issues of health care, transportation systems, we have to acknowledge that there's some severe issues and concerns that we have to use the public dollars very carefully to deal with. As I've looked at the data around not only the situation in Boston but the situation in other urban areas where stadiums have been built and developed, unfortunately, what you see is the sports teams moving forward in terms of their work and value but the economics of the cities declining. When you look at the City of St. Louis and see that their school system is in receivership, when you look at Cleveland and see what's happening to their school system, when you look at other cities and see the kind of economic 12 12/2/2000 WHOLE - STADIUM BILLS problems that those cities are having, where the sports teams re flourishing with public subsidies, you say that this has to come to an end, we have to begin to reverse this policy of putting public subsidies into private ventures while the people of our cities suffer. Thank you very much.
Thank you. Is Fenway Park privately or publicly owned? BOSTON
Fenway Park has the majority interest presently owned by the (unintelligible) Trust. There are a number of other limited partners. You may be aware that Mr. Harrington, who is the executor of the trust, has recently put the Red Sox up for sale. What we feel is very, very important, and I don't want to elaborate too much 'cause I know you didn't ask this question, is that we really feel that this is a wonderful opportunity, given the fact that there are so many deep pockets out there and that the Red Sox is a very desirable team, that we would hope that a private entity not only would buy the Sox and be able to fund it 13 12/2/2000 WHOLE - STADIUM BILLS themselves but also be able to fund a new stadium, and we are hoping to send them that message, that prospective owners would realize that is what they're going to have to deal with when they take it.
Thank you. The Chair at this time recognizes Councilman Goode.
Thank you, Madam President. Thank you for coming this morning. I have a few questions. Over the last few days of these hearings, we've been discussing the issue of public financing, and the points I've tried to raise over those days is that public financing has come -- discussion of public financing has come without a discussion to public benefit. Most people have come to talk against this deal and not talk in terms of any cost benefit analysis or really examine what type of benefits can come from public finance and what type of public investment we should make. I have a few questions about Boston as it relates to whether there's a similar model here 14 12/2/2000 WHOLE - STADIUM BILLS with Philadelphia. What's the African-American population of Boston? BOSTON
The African-American population of Boston is approximately 120,000.
And the Asian population is about 5 to 5.8 percent. So calculations are that in the census data that's going to come out in the next year, we expect that 15 12/2/2000 WHOLE - STADIUM BILLS Boston will show itself to be 50 percent of color -- Asian, Latino, African-American.
And what percentage of women are there in Boston? BOSTON
I really couldn't -- I couldn't tell you that. I don't know.
Let's say for a second that you did believe in public financing of stadiums and major economic development projects because you saw it as a means of infusing investment in minority and women-owned businesses. What type of goals would have to exist for you to buy into the public subsidy of 16 12/2/2000 WHOLE - STADIUM BILLS projects for that multi-million-dollar fusion of business capital? BOSTON
From my perspective, you would have to look at the issue of the multiplier; that is, you would have to look at the businesses where the investment is going to be made, the number of employees that those businesses have, and the spin-off to the particular communities that those businesses are located in and the employees are coming from. I have two reactions. One is that in terms of the Red Sox investment in relationship to the communities of color in Boston, their past practices have not indicated that there would be significant economic spin-off from the development of the new stadium by them; and secondly, when we look at the problems that we're having with education in Boston, when we look at the problems we're having with housing and the fact that many of our people are being --
My question is actually directly related to, if you were to actually look at public subsidy of major economic development projects, major economic development 17 12/2/2000 WHOLE - STADIUM BILLS projects, and consider that there could be a level of investment, public investment, that would bring the type of benefit to disadvantaged businesses, at what level would that investment have to be? At what percentage of participation for disadvantaged businesses would there have to be for you to support public subsidy? BOSTON
At this point, I'd say I -- personally, I couldn't support the use of bonds, the use of tax-free bonds, to accumulate capital that would be going into businesses in my community as opposed to schools, as opposed to affordable housing, and as opposed to transportation systems.
I'm asking you to speak about economic development projects -- not about education, not about the housing development, but specifically speak to this -- I'll change the line of questioning a bit. What are the participation goals in Boston for minority and women businesses? BOSTON
In terms of the City's policy, it's a 15 percent -- they have a 15 percent guideline in terms of participation 18 12/2/2000 WHOLE - STADIUM BILLS of businesses owned by people of color. In terms of workers on public construction projects --
It's 15 percent for 9 minorities and I believe it's 5 percent for women; 10 is that correct? 11 BOSTON
Are you aware that 14 there is actually a 49 percent participation goal 15 here within this project for disadvantaged businesses, 35 percent for minorities, 12 percent for women, and 2 percent for disabled-owned businesses? BOSTON
I'm asking, are you aware of those participation goals for this project here? BOSTON
No, but I think if you -- I wasn't aware of that rate, but 19 12/2/2000 WHOLE - STADIUM BILLS if you look at the size of the project, I think it's essentially a billion dollars, and $500 million going to private businesses in the minority community, to businesses owned by women is very substantial. However, the question -- the question I think we have to really look at, and it's a question that we have to look at in each city, is what is the situation in the schools of our city? The schools of Boston --
Actually today, you are on that side of the table and I'm on this side of the table. BOSTON
I feel that as a legislator, I do respect you as legislator, but actually, I'm posing the questions to you. You made your testimony. I'm asking, really, did you know of those participation goals, and does that make a difference to you? I mean, can you imagine any major economic development project in Boston one 20 12/2/2000 WHOLE - STADIUM BILLS day having 35 percent minority participation, percent women participation, and percent disabled? Can you imagine that? BOSTON
At this 6 time, given the racial politics of Boston, it's 7 difficult to imagine. 8
Well, clearly, this 9 is a different city, and these two teams have 10 committed to -- 11 (Applause.) 12
I don't think that there is any other major economic development project, economic development initiative, that we could be considering in this city at this time that could infuse hundreds of millions of dollars into minority and women-owned businesses. There are people within this city, people within other urban centers around this country that talk about creating economic opportunities but don't know how to do it. Until you can suggest to us how we otherwise would infuse hundreds of millions of dollars to minority and women-owned businesses, I thank you for your advice as it relates to public 21 12/2/2000 WHOLE - STADIUM BILLS subsidy, but you're not needed here. (Applause.) BOSTON
Well, in Boston, we give people who have come to testify an opportunity to give a response to statements that have been made. Would I have an opportunity to give an opportunity to respond?
What's very important that the City Council look at is the effect of public investments over a long period; that is, you're talking about a 30-year period of a financing. So while you can, I think, applaud appropriately the fact that there's going to be a major investment in businesses owned by women and people of color -- and that's significant and major -- you have to also raise the question of whether the public financing of this project will, in fact, weaken your ability to educate your children, effectively provide health care for the people of your city, effectively provide transportation so that people, working people of 22 12/2/2000 WHOLE - STADIUM BILLS the city, can move back and forth, provide affordable housing. And if in your analysis, you can see that you cannot only guarantee over the lifetime of this project that the public subsidies will be there so that you can have what you want in education, health care, transportation, and other areas that are very important to the life of the city, as well as have the economic investment, then you should go ahead. My understanding is that the details of this plan have not been worked out, that the Mayor is saying to the Council of Philadelphia, Trust me, let me work out the details. I think that suggests that there is not a solid financial strategy that's been worked out and that you're treading on very dangerous ground -- not for yourself as Councilpeople, but for the people of your city, and you need to be aware the lures that come from major investments in businesses which could in the long run be really devastating to the people of your neighborhoods.
Thank you. The Chair recognizes Councilman 23 12/2/2000 WHOLE - STADIUM BILLS Mariano.
Thank you, Madam President. Well, along the lines of Councilman Goode, I grabbed them before this started, and I said, you know, you're aware that this chamber is packed with building trades people and -- (Applause.)
This is obviously not going to be an easy thing for you, so the gloves are off. I'm glad Wilson went first. BOSTON
But -- and I appreciate your, you know, your rebuttal back to Councilman Goode. But, you know, I didn't know you were going to be here till I walked in these chambers today, so I didn't have fully have time to prepare. And my first thought, which is very emotional, and some people around think I'm too emotional -- I don't know where they get that from, but this is a big deal. Why would you listen to two Councilpeople who are obviously 24 12/2/2000 WHOLE - STADIUM BILLS against this project, fly you all the way down here, on maybe their campaign funds or City funds, and then you sit here and try to tell us what's good for us. And I believe it's from the goodness of your hearts. You have a letter here from Councilman Roache who I know, wait till I talk to him. Next time he needs me to come up there and talk about something, I mean, that doesn't happen. But it just amazes me that you would only talk to two people. When I asked Miss Henniger -- Hennigan? BOSTON
Hennigan? I said, you know, there's -- mostly everybody here is for this project, and you said you understand there's some people in the middle. It's my understanding there's nobody in the middle -- there's two against and everybody for, okay? (Applause.) BOSTON
No, no, let me -- 25 12/2/2000 WHOLE - STADIUM BILLS BOSTON
I'm sorry, I thought you were finished, I apologize.
After this is all done, you'd have been better off letting Councilman DiCicco and I take you to the Four Seasons for a nice breakfast, because what's going to happen here is, you're going to come down here -- you're going to come down here and we're going to go, Oh, geez, you know, things are nice in Boston. And probably we have a lot in common, especially Chuck and I, 'cause we both represent the 7th Council District, and I do know a little bit about the 7th Council District in Boston -- Dorchester, the Irish Riviera. It's a beautiful place. You know, and we're pretty -- we're a lot like Boston because it's a very parochial town. We're much more like Boston than we are like New York City; New York's too busy. But one of things I hate -- and this is my naive Philadelphia roots -- is when people come from other cities and tell us how to coach our sports teams, how to run our politics, or how to build our stadiums. 12/2/2000 WHOLE - STADIUM BILLS (Applause.)
The main thing that concerns me is how two Councilpeople would let somebody else bring them down here. I would check it out before I went to Boston. I'd say, Yo, Chuck, if I'm coming up there, I need to know who it looks like, what's -- are you dealing 2-4? 'Cause if you are, I got to see who's with you, maybe there's somebody -- you know, maybe the majority has a sense here, maybe not. I mean, Councilman Goode, that's something that was very important to him and that's important to me and it's important to a lot of these Councilpeople. We do things differently in Philadelphia. And believe me, this is no rubber stamp, this is no rubber stamp for any stadium deal. We can nitpick this deal apart forever and it never gets built, and these guys sit here -- and look, take a look, turn around, look at the front row here. These are building tradesmen, they have the same color skin you have, but everybody seems to forget that. You know, it's not a shot at you, believe me. They're working, 27 12/2/2000 WHOLE - STADIUM BILLS they're raising their family, they're coming back to invest the money in this community. This is the best deal we can get at this time. Now, if everybody wants to be (unintelligible) and negotiate their own deals, that's not what it's about for us. So I appreciate you coming down here, but I'm going to give my -- both of youse my phone number. Next time, save the airplane fare, call me, and I'll tell you what the lay of the land is before you come here. (Applause.)
I got some serious questions about Boston stadium, and these are stuff that the union and I worked out, like, in the mad last five minutes 'cause we didn't know you were going to be here. This is like, what's behind door No. 4? BOSTON
We didn't know we were going to be here until yesterday.
That's pretty good. In fact, I would fly to Boston tomorrow if you told me you had somebody pay my way, but 28 12/2/2000 WHOLE - STADIUM BILLS that's not the way it is. BOSTON
How much -- how much does a councilman make in Boston? BOSTON
$62,000? Okay. Now, here's the question. The stadium we're talking about in Boston -- now, I know absolutely nothing -- I've been to Fenway many times, Fenway's a nice place. I picked up a hot dog there at Yakkie (ph.) and walked around, and it was great. And I spoke with you. I know one of my ex in-laws is a policeman in Boston, and 29 12/2/2000 WHOLE - STADIUM BILLS it's a very interesting town. I go up there -- sometimes Wayne -- is Wayne Miller here? I go up with Wayne sometimes. It's a great thing to see a Red Sox game. I've never been to -- what's it, the Fleet Center? BOSTON
Let's just do Fenway Park, if I could call it. Is Fenway -- are you talking about building it in town? BOSTON
Fenway is a neighborhood of the City of Boston, yes.
But I want to know, are you going to knock down the original Fenway? 30 12/2/2000 WHOLE - STADIUM BILLS BOSTON
And this is all financed by the original plan that you guys aren't for up there, is it all financed by public funding -- bonds or -- BOSTON
Bonds, revenue streams created by the legislature should the Council pass the --
But by that trust. Is that trust involved in it too? BOSTON
The South Boston Veteran Trust -- (Unintelligible, parties talking over each other.)
I don't have that Boston accent, so every time I say "Yakkie" (ph.), it sounds like I'm saying something bad. BOSTON
If I could just give you a short breakdown, would that be all right?
I don't 31 12/2/2000 WHOLE - STADIUM BILLS want to cut you off before you finish your question.
The funding of the Fenway proposal, which calls for the demolition of the existing Fenway Park and building approximately a 15-acre facility next to the existing park, the Sox would put into actually build the park approximately 3-plus million dollars of their own dollars. The City of Boston would take by eminent domain approximately 12 acres of property that currently has businesses, operating businesses, located on it and in addition and donate at the approximate value of $25 million for three acres of City-owned land. And within that footprint would also build in addition to the stadium, a 3,000-car parking garage for a cost of approximately $72.5 million.
And this would be one of them old-time stadiums that we're all getting back to now, with the perfect site lines for baseball, the kind they did in Camden Yards? That's the kind Fenway is, right? 32 12/2/2000 WHOLE - STADIUM BILLS BOSTON
We're all trying to get to Fenway and you guys are knocking it down. That makes no sense to me, but I guess it's because -- BOSTON
Well, actually, our colleague, Councilor Ross, who is not here today, his constituents are proposing a build-in-place model that would preserve the existing Fenway. And within the Fenway community, there are a number of people who support retaining that, but the Red Sox have continued to say that they cannot afford to do that and that it is unfeasible. So that is their position. There are people who agree with that, there are people who disagree with that.
And the reason I asked you about that and you seem to know a whole lot about that, I know absolutely nothing about Boston except what I know when I was there. You can see I know nothing about what you're doing with Fenway. I can't even tell you who the Red Sox manager is. That's how long it's been -- it's 33 12/2/2000 WHOLE - STADIUM BILLS been a couple of years since I've been up there. And I don't expect you to know anything about Philadelphia, except for, you know, this is it. And do you know who the Phillies manager is? BOSTON
We didn't beat the Packs yet, did we, in the playoffs?? (Laughter.)
All right, but, you know, I mean, that's where I'm getting at. I mean, you come down here, you come down here, and with all good intentions, again, I want to make sure, but I think you were let down a primrose 34 12/2/2000 WHOLE - STADIUM BILLS lane that doesn't exist. BOSTON
Well, let me just -- if I may, Councilor. And, certainly, I can only speak for myself, and Councilor Turner certainly is very eloquent and can speak for himself as well. We are not here to tell you what to do. We know that you are accountable to your constituents who elect you, as I am accountable to my constituents who elect me.
And I have constituents who are in the building trades, I have constituents who are not in the building trades, I have teachers, I have firefighters, I have police officers, I have people who are white-collar, blue-color, rich, poor, black, white, Latino, every possible -- I come from a very diverse district. Again, I was a former at-large councilor representing an entire city. I would never think of telling you what to do. What we are trying to do, and that is why, when Councilor Cohen called me, I told him I would be delighted to come down here 'cause I feel 35 12/2/2000 WHOLE - STADIUM BILLS strongly that this is not just a one-city issue. And the concern I have when I chaired the Ways and Means Committee just last week and the Red Sox came in and made their case and their pitch for these huge dollars, millions of dollars of public money, or public revenue streams, what they use as excuse is that every other city does it so you should too. And what I say is, just 'cause John jumps off a bridge, it does not mean I have to follow him off the bridge as well. And these teams, these players, they do not have salary caps, they have -- and we love Pedro and we'll put him up against your pitchers any day of the week. But let me just say, we are not here to tell you what to do. What we are saying is, we feel public subsidies have to stop. We believe these deals can be done privately. And when they are done, they should be done with union labor. And in the case of our city -- and we're not here to tell you what you should do in your city; we are here to say we hope we can stand together as municipalities, saying that because we 36 12/2/2000 WHOLE - STADIUM BILLS have the kind of problems that my colleague Councilor Turner alluded to with education, with housing, with health care, with infrastructure, it is incumbent upon us first to help those, because then they can help themselves and further stimulate our economy. And we are not against stimulating the economy. For instance, in our neighborhood, we are for the first time in the history -- it's probably a hundred years -- building a brand-new neighborhood that will call for million square 13 feet of development, which I support -- 14
Let me ask you this question. I mean, this is all politics 101, I learned that at St. Joseph's when I went to night school there, after I, you know. You forgot the most important thing: All politics are local. BOSTON
This is local, this is us. And we appreciate you coming. Like Wilson said, you're not really needed here. If you want to go out and go to the Four Seasons afterwards, we'll show you the real side of Philadelphia. Maybe the Council -- the two Councilpeople that brought you down here have you up in something else in mind, but, you know. . . (Applause.) BOSTON
Well, Councilor, I'm not here for that purpose. I am here because I am trying to protect the tax base not only of the residents of my city --
Councilor, Councilor, maybe you could join the League of Cities.
Maybe you could join the League of Cities for that, and I appreciate it, but this is Philadelphia and this is what we're doing.
Excuse me, excuse me, Mr. Mariano. I think Councilman Rizzo is asking for a point of order. 38 12/2/2000 WHOLE - STADIUM BILLS
Thank you, Madam Chair. Councilors, you said you just found out yesterday that you were to come here today, and I hope that you weren't misled, I truly don't. But I really would like to know, and I asked for a point of order because I hope we can move on and change the tone. What motivated you to do this? I can't imagine you spending your money to come here. I just can't understand the motivation. I wouldn't think of coming to Boston to do what you two are doing here. I just -- I just don't understand the motivation, and if you could explain it, I'd appreciate that. BOSTON
Let me be very clear about my motivation. And that is that I've spent the last 30 years, not as a person in public office, but as a person working in the community, trying to change and improve conditions in a community that's primarily black and Latin. 39 12/2/2000 WHOLE - STADIUM BILLS And, unfortunately, what I see, both as a resident of that community and as a City Councilor, is that we are in a difficult situation in Boston. And as I look at other cities -- and I taught in a community economic development program at New Hampshire College that Horace Smalls and other people from the City of Philadelphia and other urban areas participate in to get their graduate degrees. As I'm looking at the situations in other urban areas, what I see is, we're in a very difficult situation in terms of our schools, in terms of the housing situation, and transportation. And what is particularly unfortunate is that I don't see help at the national level coming to the City of Boston, to the cities in Massachusetts that -- at the level that we need. And so given the scarcity of resources coming from the national level to the cities, to urban areas, I think those of us who are representing urban populations have to be the guardians of our city resources in a way that we perhaps haven't had to be in the past when there 40 12/2/2000 WHOLE - STADIUM BILLS were federal resources flowing more abundantly. We also don't have State resources in Massachusetts flowing in a very significant amount. And so we have to look at each dollar and how that dollar is being spent. Therefore, when this issue of building the Red Sox stadium came up, what I thought was a responsible position to take was to look at research on how those stadiums have affected economically the other urban areas. You know, look at the experience that other people have had in order to determine whether the spending of public money on the stadiums really was a sensible response for a City Councilor. As I looked at the data and as I looked at research, what was really astounding was that city after city where I have looked at the stadiums and, you know, just kind of looked at the teams and the stadiums and thought everything was wonderful, as I began to look at the economics, what you see is the other teams are wonderful, the stadiums are doing well, but the cities are declining. Educational systems are being taken over by the state in St. Louis and in Cleveland 41 12/2/2000 WHOLE - STADIUM BILLS because they -- the city can't run them effectively in situations where they're investing in ballparks and in teams that are doing very well. That doesn't make sense. I have no ability to say what's going on in Philadelphia, but given what I've seen in the research that I've done in looking at other cities where they have built these stadiums with strong public subsidies, I have to say that it's bad public in terms of the old practice. And the only reason I'm down here today is to say to look at the research that people are doing. And when you look at that research, I think you will begin to have some of the same concerns that we have in Boston. Perhaps not because you're in Philadelphia. But what we urge you to do is look at what has happened to city after city, where they've made these public investments and where today, the situation for the people of these cities are worse, where the owners of those teams are better.
Thank you, Councilman. 42 12/2/2000 WHOLE - STADIUM BILLS BOSTON
If I could just briefly as well. I want to be very clear that Councilman Cohen when he extended that Councilman Cohen, when he extended the invitation to me, as well as Councilor Ortiz, were very candid, that they were the two strong votes in opposition, that they felt -- and, again, although they say all politics -- every city is different, politics from city to city is probably very, very similar. And in our own body, we do not have unanimous support for opposing it. So we have people who are for, we have people who are against, and then you also have people who are in between. And sometimes people don't always feel comfortable coming out front right away, sometimes they need a little bit more information, sometimes they need the kind of details and kind of the expertise that has been done by -- for instance, in our city, in Boston, Citizens Against Stadium Subsidies, and they have a wealth of information. And when we told them we were coming down here today, they just wanted to let you know, should you desire, information that they have available 43 12/2/2000 WHOLE - STADIUM BILLS to help you make your decision, they are more than happy to supply it. I understand -- and I spoke yesterday with Dr. Zimbalist and I understand -- from what he told me, he testified and provided information to you. Dennis Zimmerman, who is a senior analyst for the Congressional Budget Committee, actually analyzed our legislation. He does that upon request, so if that is something that you would like him to do for you, you can request him to have that. So we are really here to try to be a resource, not to tell you what to do. But just so that you're very clear, I was under no impression that this was something that was unanimously supported as far as opposition by the Philadelphia City Council. But what I was hoping is that we could share the experience and the process that we have been going through the past months to try to act responsibly as far as we are concerned in our city and, hopefully, see, because this is not just a Boston issue, this is a national issue, and we know we cannot do it alone, because major league baseball and the individual sports teams, they do 44 12/2/2000 WHOLE - STADIUM BILLS have those resources, but if they're not asked for them, they certainly aren't going to volunteer them. Thank you.
Councilman Mariano, are you finished with your line of questioning?.
Maybe this is statements more to Councilman Cohen and Councilman Ortiz. Next time don't surprise us. You could have saved the people the air fare. You know, come on, you come here in the morning and you're surprised. (Applause.)
It's not an insult. (Unintelligible, parties talking over each other.) 45 12/2/2000 WHOLE - STADIUM BILLS
Either we have your attention and we respect each other. (Unintelligible, parties talking over each other.) (Councilman Cohen stands up, addresses audience members off-mic.) (Audience members boo.)
Councilman, Councilman Cohen, Councilman Cohen. Councilman, please, please.
Excuse me, Councilman. If there is another outburst, I will recess this hearing and it's only going to hurt the project and we will never be able to make a determination by December 14th. I ask you all to be very cooperative, please. The Chair now recognizes Councilman Cohen.
Thank you, Madam President. I just want the people sitting behind here to know that the person you're booing is the person who spent his lifetime in support of labor 46 12/2/2000 WHOLE - STADIUM BILLS organizations. There has never been a City Councilman in the history of the City of Philadelphia who has fought for labor harder or longer or been more in the trenches for labor than I have been. And I just want you to know that. So when you boo, boo loudly. (Audience members boo.)
I'm sorry. I don't think I've made myself very clear. We are not going to tolerate this. Either you cooperate or I'm going to recess. I mean that sincerely.
If we're going to have Councilpeople intimidating the audience, this is going to happen.
What do you mean, Councilpeople intimidating the audience --
Well, Councilman, you can't play it both ways here. The people in the audience --
This is the man who 47 12/2/2000 WHOLE - STADIUM BILLS called me a vampire.
Nobody's calling you anything, Councilman. (Unintelligible, parties talking over each other.)
Councilwoman, my point is -- excuse me, could I have your attention. My point is, we come here day in day out. This is my fifth year here, all right?
Councilman, you're out of order, Councilman. You're out of order, okay?
Why can't we be out of order when you are? Now, let's be gentlemen about it. We can agree to disagree. Come on. Council President --
I don't think Councilmembers are supposed to be having 48 12/2/2000 WHOLE - STADIUM BILLS conversations between themselves.
Whatever you have to say, please direct the Chair. And with another outburst -- this is the last warning -- I'm going to recess.
Council President, my point is, we've been -- I've been coming here for five years, and we've let all kinds of groups in here and they've made all kinds of statements. And with different issues, some I've been for, some I've been against. I have never seen Councilpeople people stand up and intimidate the audience. But this works both ways. If a Councilperson -- and I'm not saying what particular Councilperson -- stands up and does this and then they boo and you clear the audience, we must be very careful about it. They need to be heard too, Council President.
We will respect each other. 49 12/2/2000 WHOLE - STADIUM BILLS
And to Councilmembers and people in the audience, and as I've said, this is a very important issue. We are -- we have crunch time here to consider this issue. If we recess today, we're not going to be able to meet our deadline. So that's on everybody here to make the determination whether we go forward or whether this issue simply dies. Councilman Cohen, you're next to be recognized.
Thank you, Madam President. I want to thank the two councilors from Boston. I want you to know you are in the United States, though it may seem as if you're not. It may be that you have the impression that Philadelphia wants to secede from the rest of the country, but really, we don't. There was a point in time when a portion of the City wanted to secede to something called "Liberty County," but that was successfully opposed. I think both councilors have expressed 50 12/2/2000 WHOLE - STADIUM BILLS views that are held by the overwhelming majority of the people in the City of Philadelphia. I think you've spoken really for the people of Philadelphia as well as for the City of Boston, because this matter is not going out on a referendum, but we know there are serious questions about whether the people of Philadelphia would support any public funding if they had an opportunity to vote one way or the other. It's also clear that in the last point that the Councilor made concerning the fact that the sports teams operate on a national basis, and what they do is play off one city against the other city and put us in competition, threaten to move, only because there's more money being made in one place, they have no loyalty to anyplace. The people in Philadelphia have tremendous needs in the neighborhoods, in the schools, in the housing, as both of you have spoken about. We in Philadelphia have the same problems. Philadelphia is like every other city with respect to the needs for infrastructure, for more support for police and for their facilities and for the fire people, for their facilities. 51 12/2/2000 WHOLE - STADIUM BILLS While we're spending over a billion dollars in the next 30 years, a billion dollars of tax money for the stadiums, the firemen who save our lives every day of the week are confronted with a health problem. And just yesterday, the City of Philadelphia pleaded that it didn't have the money to take care of the health needs of the fire people, went to court to throw out an arbitrator's decision, which said that the City has the responsibility for the involvement of so many firemen with hepatitis C. So you see that we have serious problems just as you have in Boston. I think it's great that you are here. And while you are here, I would like to ask you one question concerning eminent domain. I understand you had some experiences in that field. I would like to ask you what your feeling is about the use by City authorities with respect to eminent domain proceedings in matters where the public interests is really a masquerade, because while stadiums for sports are very important, I'd love to see every high school in Philadelphia have 52 12/2/2000 WHOLE - STADIUM BILLS a sports field, and most of them don't. While it's important in that regard, it certainly doesn't seem to be at the level of importance that would justify the use of public power to take property from people to convert it into public stadiums. Would you respond to that comment. BOSTON
Certainly, if I may, and I'm sure Councilor Turner will follow up. In the City of Springfield, there was a legal suit where Springfield built a sports facility and used public funds, took the land by eminent domain, and a lawsuit ensued, and it was found in the courts that it was illegal because a sports facility did not constitute a public purpose. Now, I am not an attorney. So what I would be more than happy to make available to you is the court decision. Our former corporation counsel for the City of Boston did an analysis of the law on that and the court decision, and he concurs that in our instance -- and, again, I can't speak to what would be the case in your 53 12/2/2000 WHOLE - STADIUM BILLS state or your city here. But in the instance of the City of Boston and the City of Springfield, he concurs that such a taking of eminent domain for the purposes of a sports facility was illegal. And what happened at that point is, they took the land, they took the businesses, and then they stopped them. And the City of Springfield had to pay huge restitution costs, and the stadium was not built. So I can't tell you that would pertain to what you are doing here, but what I will tell you is that our former corporation counselor who was hired by the activists in the Fenway neighborhood has reviewed that case and is very confident that our legislation would not withstand and, therefore, would be a violation of the law and is not a public purpose.
Thank you. I have no further questions. And, again, I express my deep gratitude and thanks for your understanding that all cities 54 12/2/2000 WHOLE - STADIUM BILLS are involved in this problem. BOSTON
Thank you. The chair now recognizes Councilwoman Brown.
I do not (inaudible) the benefit of exactly what's happening in Boston, so give me some background before I pursue my questions. How far along is Boston with regards to the reviewing of stadium proposals? Where are you? BOSTON
The project has been approved by the State legislature. The State legislature passed what they call "enabling legislation" that laid out guidelines for the development of a ballpark in Boston, including a commitment from the State for $100 million of 55 12/2/2000 WHOLE - STADIUM BILLS infrastructure investment. It's now up to the City of Boston to put together a package within the framework of the legislation passed by the State. The legislation does not have a time limit in terms of having to be completed by March of 2001. The Mayor has suggested that he will put a package before us perhaps in April, perhaps in May, perhaps in June of this coming year. But Council, because of our concern for people being clear where the Council stands on it, as soon as the State legislature approved the legislation authorizing the building of the park, filed an order that focussed on the issues of bonding public funds for the development of the stadium. We have had two hearings on those issues, and on this coming Wednesday, we are prepared to vote on the question of whether the Council is supportive of public funds being invested in the park. The way that legislature -- the way the bonding is handled in Boston is, you only need 5 of -- 5 of the 13 City Councilors to oppose it in order to stop bonding from going forward. At this 56 12/2/2000 WHOLE - STADIUM BILLS point, there are seven councilors who have said that they do not support the project going forward. And so we expect on Wednesday, there will be seven votes that will clearly -- from City Councilors, clearly showing that the majority of the City Councilors of Boston are opposed to the project going forward. That won't end the Mayor's opportunity to come back to us, but what we hope is that it will send a clear message to the investors and to the Red Sox that the Council is not ready to support the project as it has been framed by the State legislature.
So you're treating the issue of public investment apart and totally separate from a total stadium package where you get a chance to examine the pros and cons of a total stadium package, correct? BOSTON
We're taking this action focused on the question of the value of public investments. In terms of the investments, in terms of the investments that will be made in the community, that is clear: That is that the State has proposed $100 million in 57 12/2/2000 WHOLE - STADIUM BILLS infrastructure that would come into the area of the Fenway that -- to where the park would be built. And that essentially would be the benefits to the community.
So following that particular approach, you will never have an opportunity to examine a scenario of what if you do stadiums, what the public benefit potentially may be and compare that against what if you do not do stadiums and what the long-term public benefit may be. BOSTON
The Mayor actually will have an opportunity next year to present an expanded package, to present a package developed by the City in terms of how he would propose the stadium going forward. His package would be framed, however, within the confines of the State legislation, so that he does not have total latitude in terms of what we can bring before the City Council, because the State legislature has already set up the framework that will guide the development of the park. If that's helpful.
The one thing you 58 12/2/2000 WHOLE - STADIUM BILLS may want to be aware of is that in our approach in examining this complex economic development issue, we were presented both scenarios, and that has helped us in trying to determine what we all want to do, and that is, strike a delicate balance between public investment and public benefit. BOSTON
Now, we have to agree with you that there are a range of other issues that should be given priority with regards to public investment, but right now, what is before us at this hour of the next ten days are stadiums. And recognizing that everything comes with a price and nothing is free in America, we are again confronted with the challenge of trying to ensure that the City gets public benefit. Now, you mentioned that you've done a lot of analysis on what has happened with other stadiums being built in cities. Have you had a chance to look at the public benefit that has been yielded from the building of new stadiums in those cities, apart and separate from the public investment, the public benefit? BOSTON
The article 59 12/2/2000 WHOLE - STADIUM BILLS that I quoted from earlier called the by Dennis Coates and Brad Humphrey is probably the most comprehensive study that tried to look at that. That is -- they're economists at the University of Maryland, so they did an economic analysis of the benefits that flowed from the investment in the stadiums. And as I quoted, their reaction was that there really -- they couldn't determine a significant investment, a public growth based upon the public investment in the stadiums. That is, when they looked at the economic analysis of what happened after the stadiums were built and measured that against the amount of monies that the cities were putting in, they couldn't determine that there was, in fact, an economic benefit to the area, either on a per capita basis or to the area as a whole from those investments in those 37 cities that they examined. That's why we're suggesting that it really would be helpful to look at their study, because they tried to -- they tried to do the analysis, I think, that you are raising questions about, really looking at what was the investment, 60 12/2/2000 WHOLE - STADIUM BILLS what happened from the investment, and then can we say that there was really a growth in revenues for individuals and for the region as a whole from that public investment? And their conclusion is no. 7 And all we can do is suggest that all of you take a look at that and then think about how the conclusions that they come to, based on those 37 cities, related to your situation here in Philadelphia, and that will help you be clear in terms of the very hard decisions that you have to make.
Well, I'm compelled to then re-ask Councilman Goode's question. In all of those 37 cities, did any of them yield 49 percent participation of MBE/WBE activity? BOSTON
I can't say, although understanding Mayor Smoke (ph.) down in Baltimore and his zealous pursuit of the economic benefits for the African-American community, I would imagine there were significant benefits that came from those projects but -- and Cleveland, I would imagine, but I don't have the details on 61 12/2/2000 WHOLE - STADIUM BILLS that.
In any of the assessment of those 37 cities, did any one of them yield public benefit for children and youth? BOSTON
I know for a fact that the only other city that was aggressive in assuring that children and youth would be factored into the equation was San Francisco. Philadelphia becomes the only other city that may ensure that that happens. And so that's one of the public benefits members of this body cared about and made sure that that was a part of the negotiations. In any of the cities, did the school district yield public benefit from the final deal? BOSTON
The -- you'd have to -- you know, you've have to look at the -- I would suggest looking at the study. In terms of dealing with the 37 towns, it's difficult for me to answer those specifically without the study in front of me.
Well, you 62 12/2/2000 WHOLE - STADIUM BILLS mentioned a number of other quality-of-life issues that we as a body should be concerned about, and education was certainly one of them. As a result of this deal, $70 million will now go to the Philadelphia public school system. And but for the building of new stadiums, that would not come to pass. BOSTON
If I could. I chaired the Ways and Means Committee in the City of Boston, and there's a couple of points I wanted to raise, because I know that each and every Councilor, whether they are for public subsidies of stadiums or they are against it, each and every one of you wants to help your constituents, you want to do the right thing, and you feel very strongly about that, and you just 63 12/2/2000 WHOLE - STADIUM BILLS say, This is the way you think that you get there. Well, let me say, what's difficult about our legislation -- and it appears from what I know of your legislation, it may be the same situation -- is that you have to take a leap of faith. In the case of our legislation, as Councilor Turner alluded to, we have a financial piece which is the bonds and then we have an economic development plan, which the Mayor has to put for us. And the Economic Development and Industrial Corporation would take the garage piece after we -- if we voted, should I say, to support that. And once we vote to support that, then they take control and we give up control. What I can tell you, and for those of us you who listened to the national news the other evening if you watched "The Fleecing of America," and they talk about what is promised and what is delivered. And they talked in our city, as I'm sure you're all aware of, "The Big Dig" and what it promised it was going to cost. And then in the end, what it actually did cost -- and I think it started out somewhere around 6 billion, and just 64 12/2/2000 WHOLE - STADIUM BILLS the other day, and I'm sure you all hear about it, we're up to $14.1 billion. So I think what we are trying to be cautious of in our city is what we are promised and what is delivered. And the problem is, if the numbers are not what is promised, then, unfortunately, you as elected officials and I as an elected official then are unable to deliver what we want to deliver for our constituents. So that is why we are trying to provide you with resources should you choose to look at them. You can choose not to, you may feel you have enough information now. But what we are saying is, our experience and my experience in the years that I have been on the City Council, 17 most recently with the Convention Center that I 18 just voted for happily two years ago that was 19 supported by our building trades, supported unanimously by our Council, and then two years later, you start to see the cost overruns, whether it's with the cost of steel or other things. These things are unanticipated costs. But what happens is, our constituents pay for these unanticipated costs, and usually the 65 12/2/2000 WHOLE - STADIUM BILLS promises that are made -- and certainly I know the promises that you are advocating to deliver for your constituents -- then they are promises broken. And we are the ones, as elected officials, who are held accountable. And what happens is, when we give away our power, as we have to take a leap of faith and give away our power in our legislation, should we vote for the economic development plan and possibly -- and again, in your legislation, depending on how it is structured, if you have to give away your power, you don't get that second bite of the apple, and I think that is something universally as elected officials. I think what we do have similar in our city, in Boston, in Philadelphia, is we have a strong mayor, and I don't like to say a weaker Council; what I say is "a less strong Council." But once we give away our power, we should be darn sure that there are the checks and balances needed to ensure that what we want to do for our constituents -- I have no doubt you want to do that, but then actually, will you will be able to do? And, unfortunately, that history has 66 12/2/2000 WHOLE - STADIUM BILLS shown that that doesn't happen. So I just wanted to follow up with that 'cause I sincerely believe in your heart that you are very sincere in wanting to deliver that for your constituents.
Well, more than a promise, what we are requesting -- demanding is that the lease terms actually reflect those public benefits that I've stated. So as you members of your body proceed to examine the issue of sports stadiums, I would suggest that you examine the what-if-you-do- stadiums, what those public benefits may or may not be and what if you do not do stadiums, and then measure that and make a determination on where you should end up. BOSTON
Could I raise one financial issue, one financial concern in Boston that I think that you have here. And that is that the Mayor was very concerned in the negotiations with the Red Sox that the City of Boston not be burdened with the possibilities of cost overruns that would come from the acquisition of the land. Based on past experience, there are 67 12/2/2000 WHOLE - STADIUM BILLS usually lengthy court battles around those issues of what does the land cost, and so he took a very firm position that the Red Sox had to accept that. The Red Sox did accept it, grudgingly. At the hearing that we had with them last week, I asked the representatives of the Red Sox whether they had worked out their problems around the possibilities of cost overruns. They said no. 10 And, in fact, it was one of the major problems that investors were having in their discussions with the Red Sox. That is, that the investors -- he said that the investors were very worried that the cost overruns that Red Sox had accepted would make the deal financially impractical as an investment. The question I raised with him, as you're saying to us, that at this point, you don't have a financial -- you don't have a deal because of the cost overruns, even if the Council wanted to go ahead and support it. And he said yes, that's the truth, we do not have a -- we have not been able to come to an agreement with the possible financiers, particularly because of their fear of the cost overruns. 68 12/2/2000 WHOLE - STADIUM BILLS When I heard that the City was taking responsibility to pay for any cost overruns on the land, you know, I said the to the person I was with, This is very dangerous. That is, you have to look very carefully at taking responsibility for those cost overruns, given what the history has been, not only in Boston but in other places. And so one thing I would suggest that you look at is if you are going to think about going ahead with it, is to make sure that the teams take that responsibility. I think it's really unfair to put that question of the cost of the land and overruns on public -- on the public, given what our experience have been on the Big Dig and a number of other large capital investment projects.
I will yield to Councilman Frank DiCicco. I would submit that all parties have been very, very circumspect in covering every nuance of the detail with regards to the deal. And cost overruns were one of those items that were fully discussed in the information presented to us. 69 12/2/2000 WHOLE - STADIUM BILLS BOSTON
Thank you. The Chair now recognizes Councilman Clarke.
Thank you, Madam Chair. Good morning, Councilors. BOSTON
Councilors, what's the existing lease arrangement with the Boston Red Sox and Fenway Park? BOSTON
They own it. You mean the existing or what's the proposed lease arrangement?
I'm operating out of ignorance on the facility. BOSTON
So any O&M, 70 12/2/2000 WHOLE - STADIUM BILLS operations and maintenance, capital improvements is the responsibility of who? BOSTON
All right. Are you familiar with our arrangement here -- BOSTON
-- in the City of Philadelphia with respects to the Vet Stadium? BOSTON
Not at all? That relates to the capital size of the facility? BOSTON
The only thing I'm aware of essentially is the number of facilities you have, that presently you have a shared facility for both football and for baseball, and that your proposal is to build both a new park for football and baseball, and that you would not demolish the existing facility until the two other facilities are constructed.
All right. In this 71 12/2/2000 WHOLE - STADIUM BILLS particular instance, for your information, we are currently responsible for the capital improvements of the Vets Stadium -- "we," meaning the City of Philadelphia. It's my understanding that a few years ago, it was kind of the intention of the City building new stadiums, and a lot of capital improvements to those particular stadiums essentially just didn't happen 'cause it didn't make sense to invest at the level that it needed to if we were going to build new stadiums. Right now, we are wrestling with an issue. If the teams do not stay, we will probably be liable and, depending on whose numbers you believe, upwards of $125 million for capital improvements to the existing Vet. And that factors into a part of this discussion considerably. BOSTON
Particularly given the nature of our limited debt capacity on borrowing. BOSTON
So I was wondering if you had a sense of that either/or as it relates 72 12/2/2000 WHOLE - STADIUM BILLS to our particular deal. And you're saying that you didn't, and I guess I would wonder, would that impact on your decision as it related to whether or not we should proceed? 'Cause it's not a situation that if we decide not to build new stadiums, we no longer have any liability or responsibility to the particular Vets Stadium. BOSTON
Could I go back to the statements, previous statements, by Councilor Hennigan. And that is that, when we came here, we came with two objectives. One is to share with you our concerns in terms of the eminent domain and the use of public subsidies for the development of stadiums based on our analysis and research around the Boston situation and our conclusion that in our situation, it did not make sense to do it. And as we looked at the research in other areas, it seems like places that had made the decision to go ahead with heavy investments of public subsidies found themselves in a difficult situation. And so our objective is to share with you that information on what we're seeing now in Boston and what the analysis of people's 73 12/2/2000 WHOLE - STADIUM BILLS experience in other areas suggests are the difficulties so that could you look at that -- at those experiences as you go forward to see if those experiences have any relevance or relationship to yours. Because as we look at the experiences of those other 37 cities where there have been public investments, it seems like in almost every one of them, there are major difficulties that follow from public investments. That's not to say that we're predicting that in Philadelphia that will happen, but we're just suggesting that there's a pattern, you know, in the financing of stadiums that leave the teams whole and healthy and leave the cities in difficulty. And as City Councilors, we can't afford, wherever we are, to ignore that history as we try to wrestle with these very difficult issues.
I understand, and you now know that our situation's a little different 'cause we, in fact, own the stadium. So it's not a situation where, you know, as I said earlier, we can ignore that. We -- and I think 74 12/2/2000 WHOLE - STADIUM BILLS most of us simply essentially inherited this particular issue as it related to Vets Stadium. So there will be a substantial amount of capital invested either in the existing stadiums or in new stadiums. So I would like for you to take that when you go back to Boston and think about today's hearing, take that into consideration as we deliberate here in Philadelphia. BOSTON
If I could just follow up a little bit on what Councilor Turner said and actually in response to your question. That is one of the major reasons why we are so concerned. And what we keep saying is, Well, what happens if we take by eminent domain, we level the ground, and for whatever the reason, the project goes south or we have problems, or worse yet, all of a sudden, the major sports team, if the Red Sox left and went someplace else, you know, we are up for sale. And we don't want our citizens to be in a position where once you buy it, you own it.
But I 75 12/2/2000 WHOLE - STADIUM BILLS guess the question, if it's appropriate --
Well, we already own it. (Unintelligible, parties talking over each other.) BOSTON
-- if it's appropriate to ask to you is where you mentioned that you are responsible for capital improvements. And, clearly, if it's anything like our city, and I would doubt that it is, and do you, therefore, have to choose between whether you fix up your stadium or you fix up your schools. And the only similar scenario that may be helpful to you that I can think of, given your --
I don't necessarily agree with that, that assessment. BOSTON
Well, I can't speak to how -- why someone decided to forego capital improvements if they didn't do it.
Because we thought we were going to build new stadiums. So we essentially -- and I say "we," although I was not here at the time as a Councilperson. We essentially made a decision to not invest in the 76 12/2/2000 WHOLE - STADIUM BILLS Vets Stadium to the degree that we assumed that it would continue throughout the lease until 2011. And that was a decision that was made based on the thought of building new stadiums. But if we don't build new stadiums, we are ultimately responsible for a substantial level of capital improvement, if we don't build them, or if we build new stadiums. BOSTON
Right. What I was going to comment on -- and that's helpful for you to add that to it -- is that it's not so different from, for instance, we have Mattipan (ph.) State Hospital in the City of Boston and Mattipan Health Rehab Center, where we invested substantial money that we owned and then was going to sell it to a private entity, and it was like, Well, do you continue to rehab it, 'cause you're still using it, or do you just forego it? So there's a little bit of similar analogy there. But one of the things that we asked was if we went forward with our legislation and if we took it by eminent domain and if something happened in the middle, what would we do to try to 77 12/2/2000 WHOLE - STADIUM BILLS recover our investment or what kind of liability we had. And the indication is, if you own the land, in addition to being responsible for the capital improvements -- and I don't know if that is the case in your situation. Clearly, there is a value to that asset, and possibly that is an ability to be able to recoup some of that, as far as if that is an issue at all. So I guess that is the only other analogy that I could think to respond to that. And, again, I don't know all of the details. It's a little bit difficult to be able to respond in a vacuum.
We have very different scenarios than Boston. One quick question, if you can respond in summary, particularly Councilman Turner. You had made references earlier on in your debate with Councilman Goode about other issues relating to the City of Boston and your concern as it relates to the City of Philadelphia on housing and schools and other issues as it relates to it, but can you kind of tell me, what's the fiscal health of the City of Boston? And if it's good, how did you get 78 12/2/2000 WHOLE - STADIUM BILLS there? And if it's not that good, how did you get there, as it related to the decisions that you made as Councilpeople over the years? BOSTON
The City of Boston, I'd say, in the early '90s was in a -- well, actually, Councilor Hennigan, you know, has been there on the Council, so perhaps she could speak to it more precisely, but let me give you my overview. My sense was that the City of Boston was in a somewhat difficult situation in the early '90s in terms of the attitudes of the investment community and the bonds and the interest rates that would be charged for bonds, but that we've had the benefit of an economic upsurge of activity, particularly relating to the computer industry and financial activity in the downtown area of Boston. So that there have been there has been a surplus of funds -- of tax funds over the last five years that have enabled us -- have enabled us to create a much sounder economic footing where our bond ratings are very good and where we have a good surplus and have tight financial administration. 79 12/2/2000 WHOLE - STADIUM BILLS So at this point, the City has gone from a somewhat rough period in the '90s to a stabilized period, given the economic growth during the last five to six years. The dilemma that we have, though, is that when we are -- our tax revenues are very good, so that at a city level, we just took $30 million out of our surplus property fund and invested it in housing. Why did we do that? Because that's a major -- from our perspective, that was a major investment out of the city, you know budget in housing. In fact, the State only invested million. 15 And the reason we did it was that as we 16 looked to the federal government, there is no help 17 that we see coming in major amounts to deal with 18 the housing problems that we have in the City and 19 the fact that people are being driven out because 20 of the lack of affordable housing. There's no 21 help coming from the State level. And so, as the City of Boston, we're now having to reach into, you know, the surpluses that are being created through the good times and make major investments in areas of housing. In 80 12/2/2000 WHOLE - STADIUM BILLS education, we have major problems; we have a $600 million-a-year education budget, but we need more money being invested in education. The infrastructure issues are there. So that even though we're on a good basis and the economy is healthy and robust, what we're finding is that given the absence of strong support from the federal government and the State government, we're having to dig deeper and deeper into the -- you know, into our own resources. And, therefore, we feel the need to be particularly cautious about spending tax dollars in ways that don't relate to the basic needs of the people, and we see the Red Sox not in that category.
What was the proposed State contribution to the new stadium proposal? BOSTON
A hundred million. We are putting 212. That would be paid back by user fees and such and --
Oh, the 81 12/2/2000 WHOLE - STADIUM BILLS total cost? 212 from the City, 100 million from the State, and the Red Sox would invest 312, so it's about 624 million. It's the most expensive stadium ever built in the history of this country, we've been told.
Thank you. The Chair recognizes Councilman Ortiz.
Thank you, Madam Chair. There's no one more blind than those who refuse to see and those who do not abide by the experiences of other cities that are very similarly situated to us. The other day in the city, we had hearings in this Council about the library. The public library in this City, the main public library, is one of the jewels of any library in the country. It needs around $120 million in infrastructure repairs. The private sector is willing to contribute $60 million to that. It's whether the City of Philadelphia can find the 82 12/2/2000 WHOLE - STADIUM BILLS other $60 million to be able to complete the job. We had the hearing on the library, and the next day, we began the hearing on the stadiums. It really confronts legislators with very clear public-policy issues as to where it is that public dollars should be invested. And whether what are going to be the benefits of the investment of those public dollars. And I think everyone knows, because this project began over a year ago, saying that it was going to produce jobs and new income. Now we have a project in which those claims are not made. It was a claim that it was going to be an economic motor for economic development. That claim is no longer being made. The public policy question is that we're building two stadia, that the main benefactors of those stadiums will be the owners of the teams, that the cost of attending the games will be such that it probably will be out of the price range of the average working-class person of the City of Philadelphia. The issue is not about Philadelphia; I think this issue is about how we begin to deal 83 12/2/2000 WHOLE - STADIUM BILLS with public monies and whether we continue down the road of corporate welfare. There are no 4 benefits. Every study -- and if we refuse to believe them, that's fine, but there are no 6 economic benefits that will accrue to the City of Philadelphia in the long term by building these stadiums. We can refuse to believe the studies that have been done. There will be some contracts that will be gotten, some contracts. But that is not going to change the basic quality of life and the basic economic structure of the City of Philadelphia. If we invested in building an industrial park for the cybernetics industry or whatever, if we invested in the school system -- we have a structural deficit in our school system right now of at least 80 to $100 million, a structural deficit. The average age of our schools is 65 years old. The stadium is only 30. I think maybe 25, something like that, all right? We are -- it is -- what is the benefit? And we have refused to listen to facts, we have refused to listen to every economic indicator and analysis that comes before us that 84 12/2/2000 WHOLE - STADIUM BILLS it is going to spend $300-plus of taxpayers' money than spend them in places where they're going to do long-term benefits to all of the citizens, and not just to the owners of the teams. We have gone from Center City to two teams down in South Philadelphia really surrounded by parking spaces. I want to thank you for coming. I haven't talked to you until I saw you this morning here. But Boston is very similar to Philadelphia. Ethnically speaking, we're very similar. We are similar in the terms of when the cities really took off. You have John Adams, we have Ben Franklin. And we have to be able to learn from the experiences of other individuals. My colleague is correct. I think -- I think what the fear is, is that we will ask the questions, that we will begin to get the answers. It is not about whether the stadiums are needed to be built. I think the stadiums will be built with public subsidy or without.
The owners, as long as we are willing, as long as government is willing, to fall for the extortion, to fall for the playing off and playing on the sentiments of the people, and as long as 85 12/2/2000 WHOLE - STADIUM BILLS legislators and mayors are willing to say, We'll give you millions of dollars, no one is going to say no to that. They will come down --. And yesterday, by the way, I asked -- I asked the owner of the Eagles, the chief executive officer, to give me details about the financial conditions of the Eagles, the football team, to see, so that the citizens of Philadelphia could gauge whether they actually needed help from the City to build a stadium or not. Or are they rich enough to be able to build a stadium on their own, because they are the only ones that are going to benefit, and we know that. There may be some individuals who get contracts, like I said, but the terms of the overall benefit to the City and the citizens is going to be to the owners. They refuse to give those details. Now, we can choose to approve this plan, and I imagine that there is a majority of people in this body that are willing to do that. But let us not fool ourselves, let us not fool ourselves and fool our citizens by saying that there is an economic benefit that will accrue to the people of Philadelphia because we built two 86 12/2/2000 WHOLE - STADIUM BILLS stadiums; there is not, there will be not. So I -- I thank you for your vision because you're asking the right questions and you're demanding the right answers. And I believe that later on, as we go down the road, after we have made this investment, we will begin to see if we go down the road of the public subsidy. And it isn't -- and I'm really not that much against giving the teams something, but it is the level, it is the level of the subsidy, the level of the subsidy. And I just cannot, without having every detail, financial and otherwise -- and we were warned yesterday by our fiscal overseer -- we have a body because we were going bankrupt around 1989, 1990, and we have a fiscal board overseer. At the end of it, Joe came over and said, This is a very, very slippery slope. And we're not in as good of financial condition as Boston is and we don't have as great a senator as Boston has in Ted Kennedy. But I think your experience, and I think if we just ignore what is happening in other cities that are very similar to us, because I've gone to Boston to speak on issues that are 87 12/2/2000 WHOLE - STADIUM BILLS affecting Philadelphia and so on, invited by political bodies. If we refuse to learn from the experience of other cities, then we are fools. And I thank you again for coming. And when you go back, don't think ill of us. BOSTON
Thank you, Councilman. I have just been informed that our visiting Councilmembers are going to have to leave very shortly because they do have a plane to catch. However, there are two Councilmen would who would like to be recognized at this time. What time do you have to leave? BOSTON
The Chair at this time recognizes Councilman Goode.
Thank you, Madam President. I will try to be brief. 88 12/2/2000 WHOLE - STADIUM BILLS Let me agree with Councilman Mariano in some of his opening comments that our problem is actually not with your coming here to offer us advice, but we believe that you have been mislead. Boston is not a top-ten city in terms of population, is it? BOSTON
And you rank -- you rant what, in terms of population? BOSTON
I couldn't tell you what our ranking is; I just know that's our population.
Well, while you look at examination of 37 cities around the country, you might find that Philadelphia is number 5 in population, and we believe eventually we'll be seen as a model in terms of how we built new stadiums and number in terms of public benefits for major economic projects. But as this discussion begins to move from what we thought it was going to be in terms of discussion of pending stadium legislation to a broader discussion of political economics, I can 89 12/2/2000 WHOLE - STADIUM BILLS tell you that I can -- I am very sensitive to some of the issues that you've raised. As you present your background in terms of community economic development, you may or may not know -- I probably believe that you do not know that my background is in community economic development. I believe you've been mislead because as you discussed the problems of urban centers around this country, you probably have not looked at Philadelphia as a model in terms of what's being done just this year. Were you informed that we're also thinking of doing a $250 million bond issue for neighborhood transformation? BOSTON
Were you aware that this Council just unanimously passed a resolution 19 -- a bill creating a community reinvestment commission to leverage private investment from depository banks and from all of the type of development that we do in the City, that we're actually going to bring those banks to the table to make sure that we not only do a $250 million bond issue for neighborhood transformation but 90 12/2/2000 WHOLE - STADIUM BILLS that it's leveraged into a billion dollars of development in neighborhoods around the City. BOSTON
I knew through Horace that that kind of work has been discussed over time. I didn't know where it was but I --
I would -- as you tell us to lock at 37 other cities around this country, I would tell you to look at Philadelphia, what we're doing. We're not just talking about doing an investment in terms of a billion dollars in new stadiums; we're talking about doing a billion dollars of investment in neighborhoods. And through that billion dollars of investment in stadiums, we're talking about infusing investment of hundreds of millions of dollars into minority and women-owned businesses. And I would say that really our problem probably is not with you but the fact that we think you have been mislead, that some of our more liberal colleagues here who are just beginning to learn economic development still have not offered any bills whatsoever to create economic opportunity. 91 12/2/2000 WHOLE - STADIUM BILLS What we are here today to discuss is economic opportunity, if you want to have that type of political economic discussion. And what we think Philadelphia will provide as a model for you is that for our billion-dollar stadium construction, we will infuse an investment of hundreds of millions of dollars for minority and women businesses; and beyond that, we will do a billion dollars of investment in neighborhoods. As you ask us to look at 37 other cities, we ask you to look at Philadelphia. Thank you. (Applause.)
Just one comment. And I wanted to thank you not only for being here but for even advising us with respect to final liability on land acquisition, because in Philadelphia, we apparently have not had the same foresight as Boston, because Philadelphia is responsible for any overruns in costs on site acquisition. 92 12/2/2000 WHOLE - STADIUM BILLS We have considered -- the Mayor has stated we are allotting $95 million for site acquisition, but if the cost is higher, it is not the team's burden, it is the City's burden, whether the cost is higher as a result of negotiation or land condemnation. So we thank you for reminding us to be very vigilant in addition to all other considerations on that one consideration. Again, thank you very much, and Tim keeps reminding me that your plane leaves at 12:30, I understand. BOSTON
And it is already a quarter of 12. So, Madam Chair, I believe it's really essential for them to leave now if they're to get to the plane on time. BOSTON
Thank you, Councilors and Madam President, and to all of 93 12/2/2000 WHOLE - STADIUM BILLS the ladies and gentlemen here. We appreciate the opportunity to share our experience, and I will leave copies of my colleagues' testimony with you, with the Sergeant-at-Arms. Thank you once again. It was a pleasure to be here. BOSTON
Thank you. We welcome and we thank you for coming to Philadelphia. BOSTON
The next witness will be Leonard Tose. (Witness comes forward.)
Good morning. Please identify yourself for the record and proceed with your testimony. (No response.)
Mr. Tose, would you please identify yourself for the record and proceed with your testimony. 94 12/2/2000 WHOLE - STADIUM BILLS
I said please identify yourself for the record and proceed with your testimony.
Thank you. My name is Leonard Tose T-O-S-E. I was born and raised in Bridgeport, Pennsylvania, and I was born on a truck. I am pleased to be here and I thank you for the invitation. I'm bewildered by some of this conversation today. What they say is close the door, give up your store, and go home and go to bed. I don't believe that, and I don't believe that we can't build the stadiums, that there isn't funds; there are funds. And let me take the time to read it to you, please. I do not want to give the impression that I know more than anyone in this room because I don't. The reason I stress the signing of a lease is that it takes the pressure off of everyone. The League and its members have never tolerated moving anyplace without their permission. I know three different groups of 95 12/2/2000 WHOLE - STADIUM BILLS individuals that would be pleased to buy the Eagles if they are for sale. By the way, the Eagles are never going to move while I owned them. There was a member of my family who was so inclined, but there was only one vote and it was mine. That move could have never happened. There is $80 million coming to the Eagles this year, which was not there before. There is also a real possibility of another $250 million which they are not aware of, and it's unfortunate. I have tried to call the Mayor times and never have gotten one call. A lot of 14 this aggravation on the part of you, gentlemen, 15 and you, ladies, could have been avoided. 16
Mr. Tose, 17 where would the $250 million come from? 18
You said 20 there is $250 million that the teams could 21 receive? Where would that come from? 22
But it's available. 96 12/2/2000 WHOLE - STADIUM BILLS (Laughter.)
It's available and it was available last year, and nobody made a move. But it's available, and that could certainly be shared with the schools that need the money as well. And this money goes on, it doesn't stop. Am I shocking you? May I proceed for this (unintelligible) reading?
I am owed $1,600,000 from the City, which Mayor Wilson Goode agreed to pay to complete 80 super boxes in which I advanced. It could come tomorrow with 5 percent interest applied. I would be glad to discuss this in private. Many of you are aware of what the Eagles did in regard to Eagles Fly For Leukemia and the Ronald McDonald Houses. The lives of many children are being saved every day with the help of Eagles players along with the rest of our staff 97 12/2/2000 WHOLE - STADIUM BILLS and coaches as well as the community. The one disease that I take a personal interest in finding is a cure for N-E-U-R-O-B-L-A-S-T-O-M-A. It's usually fatal to children, especially if they've contacted this disease after two years. Dr. Audrey Evans, Professor of Pediatrics, Division of Oncology In Children's Hospital of Philadelphia -- I'm sorry. She works for the Hospital of Philadelphia, the Children's Hospital, and she worked with the Eagles for Leukemia, and she solved the leukemia problem and is once against ready to work on a cure for this new disease. I have a special interest in finding the cure for neuroblastoma because my great-grandson had this disease and, unfortunately, he is not yet one-year-old. Dr. Evans is sure as me that he will have a full recovery. I will invest some of the money owed by me -- (Audience member coughs.)
Is that applause or get out? (Laughter.) 98 12/2/2000 WHOLE - STADIUM BILLS
I will invest some of the money owed by me to the City (sic) to cure this disease and make the public aware of the horror of this disease. I'm sure we'll get the same backing by the people of Philadelphia as well as others. I think that's about all I have to say, except that there is one other thing that I should mention. The football teams this year for the first time get $80 million that they never got before because of the ads that are being played on the TV. Now, that $80 million should be available here. They never had it before, why wouldn't they -- why wouldn't Lurie come up with it? I guess no one asked him. (Applause.)
I'm not finished yet. I don't see any reason why -- I've listened to all these reasons -- why the stadiums can't be built; that's nonsense. Let's take the money that I talked about -- it's available -- and let's get on with it. The thing that puzzles me is a couple things. One is -- I have this in bad order. The fact that it could have been so easy to take the 99 12/2/2000 WHOLE - STADIUM BILLS heat off of everyone if the people negotiating would have just signed the lease. If you sign a lease for years -- the lease that I signed when 5 I sold the team still is in practice and it 6 doesn't expire till 2011. You can't get the 7 newspapers to write it and you've got a lot of 8 people worried about it. It's not true, they 9 can't move. And if this thing that I say should 10 be signed before any contract is fully completed 11 is to sign another 25-year lease. 12 Now, the League doesn't believe in 13 teams moving. You have to get the membership to 14 okay it; they would never okay the move anyway. 15 But it seems to be a topic of concern here, and 16 there's no concern necessary. 17 If we can get our good mayor to take 18 some coaching -- which I think he doesn't need, 19 but we all need coaching at sometime -- we could 20 get this thing, I think -- I think it's owed to 21 the people of Philadelphia -- I've heard 22 conversations in this meeting saying that -- what 23 good will this do Philadelphia? It will do a lot 24 of good for Philadelphia: It brings a lot of 25 people in, it -- what a -- I got a big joke about 100 12/2/2000 WHOLE - STADIUM BILLS -- to myself when I read. It is that the new stadiums going to help baseball team. What's going to help the baseball team is to let 'em win some games. (Laughter.)
That's what bring the people in, and the Eagles have proven it this year. Can't somebody call me for two tickets for Sunday? I said I couldn't get 'em, but I guess I could have. I would be pleased to try to answer any questions anyone has. And what I'm telling you is absolutely true. If not, you can string me up.
Thank you. Thank you very much, Mr. Tose. (Applause.)
The Chair at this time recognizes Councilman Mariano.
Thank you, Madam President. Mr. Tose, one quick question.
That $250 million, 101 12/2/2000 WHOLE - STADIUM BILLS can you writ it down on a piece of paper and give it to the Council President and tell her where to get it before you leave?
No, could you tell her where it is? You don't have to say it publicly, but write it down on a --
I have one better than that. We have Mr. Burrell here. And Mr. Tose --
Mr. Burrell will meet you on the side of the room here, and maybe you could share some of that information with him because --
Is he going to try to beat me up? (Unintelligible.) (Laughter, applause.)
Madam President, that won't 102 12/2/2000 WHOLE - STADIUM BILLS even play in Peoria. I should have brought some of my truck drivers along. (Laughter.)
Mr. Tose, thank you very much. Mr. Burrell will be happy to talk with you; he represents the Mayor in these hearings. Thank you again for coming.
He represents the Mayor? Well, that's better -- I'm -- I'm moving up in class, then. (Laughter.)
Christ. When I tell you that I called the Mayor times, get the representative to get the Mayor 17 here. 18 Thank you very much. 19
Thank you for 20 coming in, sir. Our next witness is Jerry Mondesire. (Applause.) (Witness comes forward.)
Good morning, Council 103 12/2/2000 WHOLE - STADIUM BILLS President.
Please identify yourself for the record and proceed with your testimony.
Good morning again. My name is Jerome W. Mondesire, President of the Philadelphia branch of the NAACP. And I am joined at the witness table by Clinton Connor, who's Co-chair of the NAACP branch's economic development committee. Good morning. As president of the Philadelphia NAACP, the City's oldest and largest civil rights organization, I am pleased to have an opportunity to testify before this legislative body today to express our concerns about the proposed two sports stadiums in South Philadelphia. At over $1 billion, and still counting, these stadiums represent the largest public works project in the history of this city. We at the NAACP clearly recognize that the time for a sane and rational conversation about the propriety and efficacy of these projects has long since passed. The political frenzy pushing you to cut a stadium deal long ago 104 12/2/2000 WHOLE - STADIUM BILLS outstripped concerns over rebuilding the City's neighborhoods or repairing the decaying roster of public school buildings. In fact, some political and civic leaders seem so anxious to cut a stadium deal that they promise the taxpayers that building the two shiny stadiums will cure just about every urban problem except for the common cold. That these public hearings have been fast-tracked to a few days before the Christmas holidays also appears to lend credence to the widely-held notion that rushing to pass these bills will decrease the likelihood that there will be time to count the numbers and make sure the taxpayers are not being ripped off. The City Controller has already sounded this alarm; however, if this body's not prepared to listen to his expert advice, then we accept the futility of trying to stop this impending stampede. But before the Council trips over its own political self-interests to hand over nearly a half a billion dollars in taxpayer funds, even before it knows where all the money is coming from, the NAACP insists that proper attention be paid to the fact that all Philadelphians -- black, 105 12/2/2000 WHOLE - STADIUM BILLS yellow, brown, and white -- will be required to pay this enormous bill. Accordingly, the NAACP demands that all Philadelphians -- black, brown, white, and yellow -- share in how this project is built, managed, leased, and operated. Gone are the days when the tax dollars of Philadelphians of color will be utilized to pay for public projects where the benefits are limited to only a select few. The NAACP is here today to express our sentiments in strong language because history has taught us that no other kind of communication will suffice. The history of public works project in Philadelphia is not one of inclusion. Furthermore, when the NAACP examines the history of the Eagles and especially of the Phillies, we are dismayed by how few examples there are of where team owners and executive staff have utilized local companies and workers in the operations and management. And when we examine the Center City tunnel project and Galleries I and II of a generation ago, or even the hotel construction explosion in more recent months, the number of 106 12/2/2000 WHOLE - STADIUM BILLS blacks and other person of color who have participated in the building and management of these facilities was, and still is, woefully inadequate by any reasonable standard. Even the City's own compliance officer in the office of OHCD admits the poor performance of hiring of African-Americans on recent commercial projects over the past several years. That officer testified in this chamber recently that at the Loews Hotel project, a total of only four new hires participated in the construction phase of that project, out of several hundred construction jobs made available, thanks in part to public financing.
And at the Hyatt Hotel, even with the inclusion of a non-white developer in partnership with the prime contractor, saw only 14 percent of the hours work shared by persons of color, with only 27 percent of that labor force residing in the City of Philadelphia. According to OHCD's own figures, of the 741 workers employed at that site, only or were new hires. Thus, on the two most recent hotel projects, a total of 8 local low-income individuals were hired. Finally, a recent OHCD study of 107 12/2/2000 WHOLE - STADIUM BILLS employment participation at the Marriott Courtyard construction at the old City Hall annex shows that women made up 1 percent of the workforce, white men were 74 percent of the workers, and that black men comprised 23 percent of the total, most of which was in the category of laborers. However, construction hiring is just one of the NAACP's many concerns. While only two actual super structures will be erected in South Philadelphia, everyone in this chamber recognizes that many millions of dollars in food products, sundries, and other types of merchandise will be sold. Who will be the concession owners? Does ARA, as usual, get to gobble up the whole concession deal, while small and white concession owners get left in the cold? And what about ARA? How does this Council explain itself to a city that his nearly half black and brown that it will continue to tolerate giving lucrative contracts to ARA while it maintains one of the worst affirmative action records of any Fortune 500 company in America? Have not the multi-million dollar discrimination lawsuits against other corporate giants like 108 12/2/2000 WHOLE - STADIUM BILLS Texaco, Adams Mark Hotels, or most recently, Coca Cola USA, taught us that discriminatory behavior is not only morally wrong but it is also hurtful to the bottom line? And then there is the maintenance of the stadiums. Since taxpayers are being asked to shell out nearly $260 million in maintenance costs over the 30-year period, how many contracts will be let to maintain, clean, repair, and update the stadiums during their effective lifespan? What provisions have been included to ensure that all of Philadelphia has an equal chance at obtaining one of these lucrative deals? To date, nothing has come from the Administration that specifically speaks to any affirmative action language. When the Honorable Mayor John Street spoke here on Thursday, he asked you to trust him, that he could find the money to fill the $54 million shortfall. "Don't ask me for the details right now," the Mayor asked you, "Trust me that we will find the money in time," he said several times. Well, the NAACP can instruct this honorable body on where to put its trust; however, 109 12/2/2000 WHOLE - STADIUM BILLS we can tell you that when it comes to big-ticket projects in Philadelphia, we trust written comments a lot more than verbal responses. We want to see an affirmative action plan in writing. We are not going to settle for vague promises. Similar promises were made in Pittsburgh for that city's $700 million stadium deals, and to date, very little has been achieved for the inclusion of black contractors and black workers. In fact, the FBI is investigating a number of major contractors in that city for setting up minority front corporations which were used to circumvent the affirmative action language adopted by the local officials. According to Senate Bill No. 10, which authorized the Commonwealth's contribution for the project in both cities, the teams -- both the Phillies and the Eagles -- were instructed to develop and disseminate written plans to show how local residents and corporations were to be utilized in all phases of these major projects. Again, to date, no such plans have been seen in Philadelphia.
110 12/2/2000 WHOLE - STADIUM BILLS Even more disturbing is the total failure thus far by the Street Administration to publicly enunciate whether they have asked the Eagles or asked the Phillies to publicize their affirmative action inclusion plans. The NAACP strongly supports the language contained in a letter by three members of this body sent to Mayor Street on November 7th which said in part, quote: "We believe that the City of Philadelphia should be able to have minority participation at 50 percent of the total value of contracts related to the development of new professional stadia. One important issue that deserves more discussion is the issue of minority participation in Philadelphia's unions. " That letter was signed by Councilmembers Clarke, Goode, and Donna Reed Miller. In conclusion, the NAACP hopes to work 111 12/2/2000 WHOLE - STADIUM BILLS with the Administration, this City Council, the unions, and the eventual contract winners to ensure that inclusion is among the paramount issues connected with such a huge expenditure of taxpayer dollars. We hope to work through consultation, negotiation, and deliberation to achieve these aims. We do not seek a confrontation, but it should also be noted that neither will we shy away from insisting that inclusion not be swept under this billion-dollar carpet of political promises and luxury sky boxes. In summary, our short-term goals include the assurances that: 1. An affirmative action that an African-American enters into a joint venture as a prime contractor on both stadium contracts; 2. That the labor force and subcontractors are each comprised of a minimum of 35 percent of African-Americans; 3. And that professional contracts are held to a minimum of 20 percent African-Americans;. 4. Our long-term goals include securing a joint venture between the concession 112 12/2/2000 WHOLE - STADIUM BILLS operators and African-American food operators;. 5. Long-term operating and maintenance contracts with similar rights of inclusion equal to the non-white population of this city; and 6. That the so-called Children's Fund be in fact governed by a board that is racially diverse and which reflects the ethnic mix prevalent in our neighborhoods. This board should also be set up as an independent tax-exempt organization with a charter which allows it to operate free of domination of the teams or of any particular political alliances. The NAACP will not sit idle and watch the creation of a $60 million slush fund to be used only for the friends of the team owners or by those politicians who are fated to free sky boxes because they, quote, vote right way. A lot is at stake in these deals. A lot of people are going to have to pay these enormous bills, the total of which is not fully known even today. The NAACP knows that this body is ready to cut this deal. Our position, therefore, should not be misunderstood: cut everybody in. 113 12/2/2000 WHOLE - STADIUM BILLS Since you're rushing ahead to cut this deal before your holiday recess, the NAACP respectfully insists that you take a moment to remember that more than a third of the taxpayers to whom you will soon pass on this enormous debt will never be able to buy a ticket to either stadium. The price of today's sporting events have outstripped the ability of many working-class American families to pay; yet, you will force them to pay for building luxurious playpens for the wealthy and the well-heeled. This Council can bring some level of equity to the issue of jobs and concessions. The taxpayers are counting on you. If you don't protect the average Philadelphia family, who will? Cut us in, cut in all of us: the blacks, the Latins, the Asians. As we are all being asked to pay for it, it's only right and proper that all of us share in its benefits, whatever they might add up to. Thank you. )
Thank you. Mr. Connor, do you want to be 114 12/2/2000 WHOLE - STADIUM BILLS recognized?
Yes. Because there is also something else that we are seeking from --
I'm sorry, just identify yourself for the record.
Clinton Connor, co-chair of the Economic Development Committee of the NAACP.
There is also something that we are seeking from the Phillies and the Eagles that is something tangible, something that you can put your hands on. What we are seeking from them as well, we are seeking the development of five educational recreational facilities located in the Germantown, Kensington, Northwest, and South Philadelphia areas. Now, the reason we are requesting it -- and we want these facilities to be furnished with state-of-the-art computers and recreation equipment and fully staffed. Now, the reason we're asking for this is, as Mr. Mondesire has stated, the price of the tickets, by the time they finish adding on the 115 12/2/2000 WHOLE - STADIUM BILLS personal seat licenses, your sky boxes, your increased game ticket prices, it's out of the reach of the children in these communities; they will never be able to attain this. This could be the beginning of at-length development type partnership between any project that has public funds in it and our communities, especially those -- we never got it from the hotels, and we want it from this week. We cannot not continue to set up banquet tables paid by the public, having the same group come to the table and gorge themselves while others stand around and starve. That policy has to end with this project, and it will end with this project. So we are next week contacting Mr. Montgomery of the Phillies, Mr. Banner of the Eagles to go forth with this end of this.
Thank you very much. Are there any questions from members of the committee of our two witnesses? (No questions.)
Gentlemen, thank you very much. 116 12/2/2000 WHOLE - STADIUM BILLS
The next witness is Robert Sklaroff. (Witnesses come forward.)
Good morning. Kindly identify yourself for the record and proceed with your testimony.
I'm Robert B. , and I'm testifying for the third time -- third session, actually fourth incident, regarding this issue, perceived as the largest construction project in Philadelphia history. I am a taxpayer. I was first in line to testify at both stadium site selection hearings held April 11th and 25th, and I spoke on June 20th at the stadium financing hearings. I have researched this issue as extensively as could any private citizen, and I'd like to report additional reasons for my strong suggestion that the Phillies 117 12/2/2000 WHOLE - STADIUM BILLS ballpark be constructed at the already-cleared site northwest of 30th Street Station. My view of Veterans Stadium represents an idea that merits study, even if the City must be forced to purchase the Eagles practice field and be empowered to charge rent until the matter is settled. With me are my son Michael David Sklaroff and his friend Jake. You will note that Jake feels the stadia rank in priority below the City's other festering problems related to health, education, and welfare; yet these issues are not sexy and, thus, have not received notice by yourselves or the media. Nevertheless, to ensure they are again placed on the record, please note the Health Commissioner needs -- these are examples: A million dollars for prescription drugs, a request issued this year; The schools need $750 million to fund deferred maintenance, a request issued about five years ago: And Licenses and Inspections need $250 million to fund initial efforts to lessen urban blight, a request issued this year; 118 12/2/2000 WHOLE - STADIUM BILLS And the infrastructure receives only one-fifth of the annual funding needed to maintain the buildings that service the people according to the City Planning Commission. With this in mind, I called Philadelphia Industrial Development Corporation and asked to review the documents submitted for public review; no one called back. I then left a message for William Hankowsky to discuss the matter; he did not call back. Thus, I have not had the opportunity to review the plans of the site, merely to ensure the Phillies stadium measures less than 800 square feet, sufficient to be relocated to my preferred site at the current underutilized railroad site north of the old Bulletin building. I'm also told City Council has not received such documents along with such details as the lease agreement that would bind the citizenry to commitments they could not even imagine. Meanwhile, a friend who lives in Pittsburgh told me yesterday that the teams have just announced the cost of seat licenses, and those who have successfully killed the public 119 12/2/2000 WHOLE - STADIUM BILLS funding referendum are gaining renewed attention. It may even be recalled that Pittsburgh politicians were able to obtain State funding last year, even if Philadelphia received nothing. And this conduct apparently reflects how they defied the voters and found a Plan B to obtain City funding. In any case, Michael and Jake join me in submitting a copy of my prior testimony and copies of two op-ed pieces -- one that was published in the Philadelphia Public Record and one that awaits consideration. Also, we ask that you check out the details of our idea on the Internet at my Web site -- you have the site there. Michael would like to hop a train to a Phillies located at 30th Street Station, and Jake would love to see other projects that now receive skeletal funding supported. Absent attention to basic detail, City Council abrogates its responsibility to uphold fundamental public interests. This plan should be reconsidered. The City should study how a refurbished Veterans Stadium, without the Phillies with a dome, could 120 12/2/2000 WHOLE - STADIUM BILLS enhance the City's fabric, much as a Phillies ballpark located at 30th Street Station would redefine the City's rhythm for the decades.
In the interest of time, I will not read my other op-ed pieces, but the bottom-line point is that I really feel that when you look at what happened when we built the commuter tunnel, the whole idea was not just to develop Center City but to allow the railroad stations in the neighborhoods to be stimulated for development. You put the Phillies at 30th Street Station and the whole image of the City will grow, and the other neighborhoods would develop in fashions comparable to what other people have suggested such as the previous speakers. Michael?
Excuse me, Michael, you're going to have to pull the microphone closer to you, please. MICHAEL SKLAROFF: I am Michael David Sklaroff. I testified twice to City Council about smoking. I feel money should go into helping people stop smoking. It worked in California, where the incidence of lung cancer has dropped 121 12/2/2000 WHOLE - STADIUM BILLS percent during the past decades. Jake here is a former smoker. I would go to a lot more Phillies games if I could take a train to the game at 30th Street Station rather than being forced to take a car. Thank you.
Are there any 12 questions? 13 (No questions.) 14
Oh, I'm sorry. The Chair recognizes Councilman Longstreth. Doctor, please leave your testimony at the table and we will distribute it. Councilman Longstreth has a comment to make.
I was chairman of the committee on the selection area for the 122 12/2/2000 WHOLE - STADIUM BILLS Phillies, et cetera, about 30 years ago, and we were authorized at that time by Mayor Tate to investigate possible sites, and the one that we came up as the most desirable was the 30th Street site. At that time, we were talking about using the various -- vacant land that already existed there and, of course, the air rights were much talked about. And we took this to Mayor Tate and he thought it was a pretty good idea. And then the great University of Pennsylvania, God bless 'em, except when they play Princeton -- and he -- Penn just felt that it would be destructive to their best ends and that it was not something that could fit into the proximity of the ballfield, etc. So we withdrew -- needless to say, we withdrew our recommendation.
But I just did want you to know that that idea has been advanced before. It's a good idea, it's a good site, but I don't think that it would work out because of the people that -- or Penn is doing so much in that 123 12/2/2000 WHOLE - STADIUM BILLS area and that whole -- the advancements that are being made now compared to what was there 25, 30 years ago are such that I don't think it really makes much sense anymore.
Okay. I researched that issue rather aggressively. Number, one you heard Judith Rodin speak her in testimony, and she covets the area which is where the post office is, which is south of 30th Street, number one. Number two, the zoning of the area in which I'm interested was changed last year by this body from P-2 to C-5, high-density commercial. So, therefore, it is not zoned for the University. The area to which I'm referring is to be developed ultimately by Amtrak, and I spoke with their real estate attorney regarding it. And the point I'm trying to make, therefore, is that the land sits sallow. The land could be a gigantic Madison Square Garden, the land could be used properly to develop spin-off ideas such as using the old Conrail building for a sports mall, et cetera, et cetera. So it has to be looked at.
This is post 124 12/2/2000 WHOLE - STADIUM BILLS office land?
I'm talking about the area north of the Bulletin building, which is a CSX high line, better known as the "Powelton Yards." That area north of JFK Boulevard is the area that sits ready for construction. It's called by this body "underutilized railroad yards," and that's the site where this should be built, and you could start next year. There are two little buildings on there -- one little tiny power plant and one, a blue building; it looks like they use it for storage of tools to fix the trains, and that stuff could easily be relocated. And, otherwise, it's 99 percent the land of Amtrak and percent land owned by SEPTA.
Thank you very much. 125 12/2/2000 WHOLE - STADIUM BILLS
Good afternoon, sir. Kindly identify yourself for the record.
My name is Herb Sumsky, and I'm a citizen and taxpayer of Philadelphia. I've lived here all my life and represent myself, and I'm a retired member of the Steam Fitters Local 420. And I agree that new stadiums should be built. The reason why, it would enhance the city and it would increase tourism to come in. A lot of business people like new facilities -- it attracts quality players and people, just like they would go to Broadway shows. Also, it's an ideal situation where it's located. You have the public transportation, the highways, airport nearby, hotels nearby. And where it's going to be built, it's an ideal situation. 126 12/2/2000 WHOLE - STADIUM BILLS Plus during the construction, all of the wage taxes that are collected from the construction workers is recouped by the City and can be used to defray a part of the cost of the construction. And that's my case.
Thank you very much for coming in to express your view. (Applause.)
Is Beth McConnell here? (Witness comes forward.)
My name is Beth McConnell, and I'm an advocate with PENNPIRG, the Pennsylvania Public Interest Research Group. PENNPIRG is a nonprofit, nonpartisan public- interest advocacy organization, with 12,000 citizen members across the State. I'm here today to testify in opposition 127 12/2/2000 WHOLE - STADIUM BILLS to the current proposals which would allocate close to $400 million to the Philadelphia Phillies and Philadelphia Eagles organizations. Whether they are first in their division or last in the league, Philadelphians have a great amount of pride in our sports teams. Few can deny that having these teams in our city adds a certain amount of social and economic benefit, and most would like to see our teams in new world-class facilities. However, the question before City Council today is soley a consideration of whether or not the proposal before you now is a valuable investment of taxpayer dollars. The financial forecast documents prepared by PIDC and provided to you assert that the proposed stadium financing plan will result in a net gain to the City's general fund of approximately $159 million over the next 33 years. However, PENNPIRG asserts that this document greatly overestimates attendance increases to be expected, thus overstating all tax revenue that the City can expect to receive over the life of the project. Additionally, these financial forecast 128 12/2/2000 WHOLE - STADIUM BILLS documents fail to consider that not all of this revenue can be considered as new to the City's general fund. Furthermore, the investment in sports stadiums pales in comparison to other economic development projects in which the City could engage. All economic revenue generated from stadiums is driven by attendance. If the fans do not attend games, then the teams earn no revenue, the concessionaires sell no products, and no wages or sales are taxed. Therefore, the attendance figures used by City must reflect realistic expectations in order four us to rely on any of the projected tax revenues. According to the analysis prepared by Arthur Anderson and used by the City, attendance at a new baseball stadium for the Philadelphia Phillies is expected to increase by an average of 50 percent over the next 30 years, including luxury boxes and club seats. This translates into an average of more than 900,000 additional seats sold each year. While it is appropriate to assume some initial increase in fan attendance following 129 12/2/2000 WHOLE - STADIUM BILLS occupancy of a new stadium, assuming one of this magnitude is overly optimistic, especially considering that some teams with new ballparks saw no long-term increase in fan attendance. This is evident in the case of the Toronto Bluejays. The Bluejays took occupancy of the Sky Dome in June 1989. 8 million fans in the 2000 season, which is a 31 percent decrease from attendance in the old stadium. In other cities, the experience has been similar. Following occupancy of Turner Field, the Atlanta Braves have not seen average attendance figures better than an 8 percent improvement. And despite moving into a brand new stadium in 1995, the Colorado Rockies have seen their attendance figures decrease steadily each year. Even the Baltimore Orioles at Camden Yards, which has been held up as a prime example of a successful stadium project, averaged just a 31 percent increase in fan attendance during the 130 12/2/2000 WHOLE - STADIUM BILLS 2000 season from pre-Camden Yards seasons. Assuming that the Phillies will realize an increase in average attendance far surpassing the experience of these teams is overly optimistic. This overstatement in fan attendance likely results in a significant overstatement of several other areas of the City's financial forecast study, including concession taxes, individual income, and corporate taxes, as well as parking. Additionally, the City's analysis counts all tax revenue as new money that would not have been received without the new stadiums. This is an enormous error.
Consumers have a limited amount of money and time to spend on leisure activities. Therefore, monies spent attending professional sports games is money often not spent pursuing other entertainment options such as visiting local bars and restaurant, attending concerts, et cetera. According to research done by Dr. Rosentraub, only percent of this revenue can 24 truly be considered new and can appropriately be 25 considered as a benefit of the stadiums. The 131 12/2/2000 WHOLE - STADIUM BILLS other 75 percent is money that would have made its way into the City's coffers anyway. Also, shifting this money away from local businesses and towards sports franchises further negates the impact on the local economy. Money earned by local businesses is primarily respent in the local economy, which multiplies its impact; whereas, money earned by sports teams is often saved or spent outside of the local economy, where it will have little to no impact on the City's general fund. The failure of the City to account for this substitution results in a significant overstatement of the true benefits that can be anticipated to the City's economy. Proponents of taxpayer-financed subsidies for sports stadiums often argue that the facilities stimulate spending, thus creating jobs both in and outside of the venue. However, one must consider the cost of creating these jobs compared to other potential economic investments. The federal maximum spending per job in order to receive a loan from the Small-Business Administration is $35,000 per job. 132 12/2/2000 WHOLE - STADIUM BILLS In comparison, it costs more than $127,000 per job to create approximately 1400 jobs as a result of a new stadium for the Baltimore Ravens. Meanwhile, Maryland's Sunny Day Fund for Economic Development has created over 5,000 jobs at an average cost to taxpayers $6,250 apiece. Other examples include Cleveland, where it cost $231,000 per job created as a result of the Gateway Complex for the Indians, and Arizona, where it cost $700,000 per job created due to construction of a stadium for the Arizona Diamondbacks. If the purposes of the City's investment in this stadium project were to stimulate economic development and increase tax revenue to the City's general fund, PENNPIRG would assert that this goal could be achieved through more direct investments in our communities. Few would disagree that investing heavily in education delivers significant long-term economic benefit. Closing the digital divide and providing free Internet access at our public libraries will result in an better informed and connected public, surely stimulating the economy. 133 12/2/2000 WHOLE - STADIUM BILLS Improving the quality of our air and drinking water will result in a healthier community and lower health care costs. Investing in clean and efficient and affordable public transit will improve tourism and help low-income residents get to work. However, gambling public money on a subsidy for a wealthy special interest, which may or may not contribute to any true economic development in Philadelphia, will not only prevent our city from making other critical investments now, but may in fact result in a cutback of other important programs. In a time of relative economic prosperity, the City still faces severe economic and social challenges. Schools are on the verge of failure, population continues to decline at an alarming rate, and buildings are literally crumbling around us. At this moment, the City has an obligation to use our tax dollars wisely to solve these problems. This requires managing finances responsibly and only venturing into projects that will bring measurable benefits to residents. Leading economists across the nation have asserted that stadiums fail to pass this 134 12/2/2000 WHOLE - STADIUM BILLS test. Should the Phillies and Eagles decide that they must build new stadiums in Philadelphia, they must do so without using residents' hard-earned tax dollars.
Thank you for giving me the opportunity to comment on this very important issue.
Thank you for coming in to express your views. (Applause.)
Are there any questions of this witness? (No questions.)
Before we call the next witness, may I just make a statement. The noise level is really much too high. I think if you're going to have conversation, do so in the corridors so that we could hear the witness testifying. Thank you very much. The next witness is. . .
The next witness is 135 12/2/2000 WHOLE - STADIUM BILLS Scott Maits. (No response.) UNIDENTIFIED SPEAKER: He's not here, he left.
I'd like to very briefly preface my remarks. I am a resident of Philadelphia, work at an hourly wage to support a family --
I'm sorry. Kindly identify yourself for the record before testifying.
Yes. My name is John Vago. I am a 24-year resident of Germantown, a mechanical engineer in the Water Department, and a shop steward in AFSME District Council 47, Local 2187. Though, as I was starting to say, I am here as an individual, a resident of Philadelphia, a wage-earner supporting a family. In considering the issue of financing for new stadiums, I think we need to consider the factors which affect all workers, regardless of their occupation or where they work. My union and 136 12/2/2000 WHOLE - STADIUM BILLS the others which represent City workers made sacrifices in past years to help the City's finances. Now there is a City budget surplus, but this was not reflected in our new contract this year. Instead, we were again compelled to sacrifice. Meanwhile, it is proposed that City funds assist the construction of new stadiums. The issue should not be whether or not sports facilities should be built. What is the issue is whether or not City funds should be spent to subsidize a private profit-making corporate enterprise to promote corporate welfare. Many of our municipal services are understaffed. What effect does continuing sacrifice by City workers have on our ability to compete with other employers to adequately staff our operations? Our city and its working class have many unmet pressing needs: public schools, public housing, mass transit, public health facilities, neighborhood recreation and sports facilities, and many others. Building facilities to meet these needs would not only provide a great many jobs to build them, but also jobs to operate and service them. 137 12/2/2000 WHOLE - STADIUM BILLS As the parent of two young people who went through the Philadelphia public schools, I heard more times than I could remember when we called for improvements in the public schools, "There's no money." The problem is not money. This is still the world's richest money, there is plenty of money, but the priorities for allocating it need to be changed. From all that I have heard and read thus far, the financial aspects of the stadium proposal are still quite unclear, its cost and the anticipated payback. That kind of a gamble with City funds while other needs go unmet would be irresponsible. In addition, some of the proposed locations would have disastrous effects on our city, destroying jobs and communities and further overloading already overloaded services. In recent years, we have seen many major projects which were supposed to bring prosperity to Philadelphia. For Philadelphia's working class, where is that prosperity? It appears to me that one of the reasons why those who can do so are leaving the City is the inadequacy of basic public services. What is this 138 12/2/2000 WHOLE - STADIUM BILLS doing to the tax base? If the professional sports teams feel that they need new facilities, why shouldn't they practice the self-reliance, the non-dependence on government handouts which we have all heard advocated as virtues for us. All research and evidence tells us that the teams can build the new stadiums with their own revenue and credit, both of which are very substantial. The only reason they are seeking local government money is because they feel they can get it and it will make them wealthier. Such corporate freeloading on public funds to boost their already-substantial profits is outrageous. Finally, for us to subsidize stadiums could create a dangerous precedent. It could encourage other private corporate interests to demand the same. Thank you.
Our next witness? 139 12/2/2000 WHOLE - STADIUM BILLS
Good afternoon, Council President and members of Council. My name is Bob Sorel. I am President of the Philadelphia Urban League. I have a written testimony.
So that I will not read it. (Mr. Sorel's testimony is distributed.)
Thank you, I'm sorry, you're not going to read your testimony; is that what I heard you say?
Yes, ma'am, I'm not going to read that. There are just a couple of points that I'd like to make. 140 12/2/2000 WHOLE - STADIUM BILLS
The Philadelphia Urban League has -- since 1907, we've been in the business of moving people to self-sufficiency, towards self-reliance; that means helping people to find jobs, helping them take advantage of training opportunities, helping to deal with their housing needs. This issue becomes real, real important to us as an organization and the constituents that we represent because it represents economic opportunity: hopefully, opportunities to work, opportunities to do business. When this issue first arose, we supported it conditionally at the State level for those same reasons, and our conditions were simply that this was going to be something so big and so significant, it held potential for opportunities, and there had to be built-in inclusion. Whether you call that you affirmative action or whether you call that making sure that there's a diversity in the participation and that diversity shares in the benefits, that those were the conditions that had to be a part of this. And I think that's been 141 12/2/2000 WHOLE - STADIUM BILLS a part of the some of the testimony that you've heard today that this is large, and what we're really talking about is how to do this and how to do it well so that it involves inclusion and we create a win-win situation. We have gone through this before in the early '80s when the Convention Center was the issue. At that time, it was probably Philadelphia's largest public-private venture. And the same debate took place. Opposition was pretty much the same, that we had to come up with a way to, one, make sure there was inclusion, make sure that people had access to the jobs, to the business opportunities, and also had a chance to participate in the policy-making end of this. We did it right, I think. If you look at the record of the Convention Center Authority, if you take a look at the participation and the jobs, if you take a look at the record of the participation in the minority participation in the contracts, you'll find that the Convention Center is an example that everybody points to with some pride. That's an example of where we did it right. 142 12/2/2000 WHOLE - STADIUM BILLS There are also some enlightened companies in this city who have made significant commitments to diversity. You might want to take a look at those companies to see how they have gone about structuring their commitments to diversity and making sure that we create a win-win situation and an opportunity for everyone to participate. And so we simply want to say that, again, that what you hear is that we support it conditional on working out the details, on how to guarantee participation, how to guarantee diversity in the participation. I might -- I might refer you to at least one company, Independence Blue Cross, one that I've work we had over a long period of time, who I believe has an excellent diversity program, and one of the key ingredients is the commitment at the top and the ability to monitor what goes on. It's not good enough just to have a commitment of a certain percent; you have to be able to monitor what happens, and are those numbers being hit. So there's a company that makes a commitment. It monitors, it sets targets, 143 12/2/2000 WHOLE - STADIUM BILLS it monitors its progress, and it has a very successful program. So we're giving those two examples to you to take a look at as you wrestle with not only where the money comes from, but how do we make sure that this is a win-win situation for diverse communities throughout the City. I thank you.
Thank you very much. The Chair recognizes Councilman Goode.
Thank you, Madam President. Mr. Sorel, you reference in this testimony (unintelligible) power of leveling the playing field, which I was one of 15 authors.
I'm sorry. Mr. Sorel, you reference in your testimony "The State of Black Philadelphia Report of Economic Power: Leveling the Playing Field," of which I was one of 15 authors, which really talked about affirmative action and minority 144 12/2/2000 WHOLE - STADIUM BILLS set-aside. And my piece specifically talked about that, but I'm curious as to why in your written testimony you only cite fiscal year (inaudible).
I'm curious as to why in your testimony, you only cite fiscal 1985 numbers.
The -- the -- our focus was not so much on the numbers in this and I have the report, which I -- first let me say thank you for it, for your participation in the report and in making sure that we had the numbers. I didn't want to focus so much on the numbers 'cause I don't really think this is a debate about the numbers so much; it's a commitment to how we do this, a commitment to diversity, a commitment to inclusion. Yes, we need to have some numbers. We have some examples of where the numbers are good. In the Convention Center, there's some private-sector numbers that are good. It's a commitment that you really need in --
But you do 145 12/2/2000 WHOLE - STADIUM BILLS acknowledge that.
In the Goode Administration, there was over a half a billion dollars of contracts in minority and women-owned business.
And it is not told in your testimony, and I just wanted to complete it .
But, you know, I'm always willing to bring -- to supply numbers if you so desire.
Thank you, Madam Chair. Mr. Sorel, in the area of open union membership to all groups, would you tell us what 146 12/2/2000 WHOLE - STADIUM BILLS your conclusions are as to what's happened, say, since the beginning of the Philadelphia Plan that was tried back in 1971 that Councilman Longstreth testified against and I testified in support of at that time. We're both still here.
You both embody much of the history -- not all of the history, but much of the history of the City of Philadelphia. We made some -- it's a good news/bad news story. We've made some progress in those areas, just as we've had made progress with diversity in the City. We made some progress, but we need to make more progress. At a time when we're pushing people to be more self-reliant, it's work, welfare, or crime, and there's going to be little welfare, and we've got to have these options available to move people into so that they can become more self-reliant. Therefore, while we we've made some progress, there's a whole lot of progress we need to make in order to be able to offer to everyone an opportunity to fulfill the American dream. So progress, yes, we need a whole lot more. 147 12/2/2000 WHOLE - STADIUM BILLS
Is Terry Simon here from the Americans for Democratic Action? (No response.) 148 12/2/2000 WHOLE - STADIUM BILLS
Do we have anyone else in the audience that would like to testify? Please approach the witness table, sir. (Witness comes forward.)
I was on the list for today. My name is Chris Randolph, and I am a member of the Philadelphia Greens; that is to say the Green Party, although I'm not speaking in the capacity today as an official spokesman for the group. As I said I am a lifelong Philadelphian and I actually grew up two blocks from Councilman Krajewski on Shellmire Avenue. Yes, you may be interested to know. I'd originally written about -- I'd like to thank City Council for allowing this additional comment period, but seeing as many of the Councilmembers are not here and many of the ones who are here have not been paying very full attention and --
Excuse me, 149 12/2/2000 WHOLE - STADIUM BILLS sir.
All Councilmembers are present. And if they're not in the room, they can certainly hear what you're saying because they may be in their offices.
Okay, all right. Well, that's comforting. In short, I urge Councilmembers to vote against this proposal for funding the construction of professional stadiums in the City with public funds. My position is based upon the anti-democratic nature of the decision-making process, the misappropriation of public funds for private profit, the questionable constitutionality of any Commonwealth of Pennsylvania funding for the project, the need of the City to spend its limited resources for the public's best interests, the poor economic returns the area could expect to receive from stadiums in general, and the ridiculous contention that Veterans Stadium indeed needs to be demolished. Let me quickly address that last point first. Just a few months ago, I was in at the 150 12/2/2000 WHOLE - STADIUM BILLS Roman Coliseum in Tunesia, in North Africa, and that facility is roughly 1800 years old. It is constructed of unreinforced, untreated (unintelligible) stone and at one time seated 30,000 spectators. It is still in use today as a venue for outdoor orchestral and traditional concerts. Veterans Stadium was completed in 1970. It was designed by modern architects and built using steel-reinforced concrete and chemical weatherizing treatments. I assume that because over 60,000 people will be packing into it tomorrow for an Eagles home game, we can assume the stadium to be structurally sound, and that the Eagles organization, nor the City does not expect any immediate collapse. It's my understanding that in the referendum question we had just this past November, that the -- that we were in fact approving funds for millions of dollars worth of improvement in part to be made to Veterans Stadium before the next football season, including an admittedly needed replacement to the turf. It is nothing less than insane to make such improvements 151 12/2/2000 WHOLE - STADIUM BILLS to a facility you plan to demolish quickly thereafter. I believe the Vet could easily continue to operate for many decades to come as a fine municipal venue if proper maintenance funds were appropriated from time to time. Team owners are squeezing municipalities across the country for new stadiums to obtain high-cost sky boxes, club seating, and other fancy stadium appendages the Vet cannot be reconstructed to accommodate any more than it has been. This seating yields absurdly high profit for the teams, but local taxpayers foot the bill for building and maintaining it. These same taxpayers can ill afford to attend games in these seats, a classic case of taxation without access to a public venue, which, if on racial instead of purely economic grounds, would be clearly unconstitutional. It's no secret that Philadelphia's wealthier citizens who can best afford seats at sporting events have fled to the suburbs over the past 50 years. These stadium attendees will pay none of the Philadelphia share of stadium 152 12/2/2000 WHOLE - STADIUM BILLS construction costs; and in the case of South Jersey residents, won't even pay the Commonwealth's share. I'm angered that as a Philadelphian, I may have to pay to construct stadium seating for people who fled this city and helped destroy our tax base, seating which I can't afford to occupy. The citizens of Philadelphia and of the Commonwealth have had no direct input in the stadium funding issue. Businessmen from the teams have been negotiating with government officials on the issue for years and have concocted a plan presented to those of us who will be paying for it is a done deal. We have had not had the opportunity and we cannot have the opportunity for a referendum on that issue. In 1997, 530,000 citizens of 11 western Pennsylvania counties soundly rejected a measure to fund Pittsburgh's stadiums through local taxation and money through the Commonwealth, although subsequent Machiavellian tactics by Pittsburgh team owners have managed to get them sweet deals at taxpayer expense regardless.
I'll point out that in those 11 counties, not a single 153 12/2/2000 WHOLE - STADIUM BILLS county of those 11 voted in favor of funding Pittsburgh's stadiums; in addition to a majority in all 11 taken as a whole voting the measure down. That includes Allegheny County, where Pittsburgh itself is located. I have every confidence that if we had the opportunity to vote on the referendum soley to appropriate funds for stadiums in Philadelphia, we would also defeat the measure here. Philadelphians love our sports, but we don't like being mugged by the rich. I would like to see the City of Philadelphia and Philadelphia County, where Pennsylvania was founded and its first capital, do what Harrisburg refuses to do and honor the constitution of the Commonwealth. If I may quote from Article 8, Section 7 and 8 of that document, Commonwealth Credit Not to Be Pledged. " As the Philadelphia Eagles and 154 12/2/2000 WHOLE - STADIUM BILLS Philadelphia Phillies are both private corporations, this deal is clearly in violation of the spirit, if not somehow technically the letter of the law. This plan finances a private venture with public risk, a much different arrangement than the tenant-landlord sort of arrangement we have with the Vet. It is the height of obscenity to me that we would seriously consider giving a few hundred million dollars in economic assistance to professional sports teams rolling money, when just over a month ago, Mayor John Street told the Philadelphia public teachers union that there was simply no more money available from the City. This same mayor now not only has nearly $400 million to spend to tear down a municipal facility and build two privately-held ones, but we also have the issue of a shady mystery of 53 or $54 million for which no one else seems to be able to account. It is the height of stupidity that the City would even consider trading an $11 million annual income from stadium concessions and $300,000 in annual property taxes from the 155 12/2/2000 WHOLE - STADIUM BILLS proposed sites for $2 million per year from the teams for recreational facilities (unintelligible) for children. Any first-year economics student can explain why this is an even worse deal than it appears on the surface. That $2 million will be worth less through time as inflation rises, while the property tax assessment and concessions revenue could be assumed to rise along with inflation. I find it highly insulting that the teams would, not doubt, be credited in the local press each time recreational facilities are improved over the next 30 years as if somehow, we're all being done a favor. That's even assuming the teams decide to stick to the plan for the next three decades, which I rather doubt, as the City is doing nothing to make the team honor its current lease at the Vet, which runs through 2011. We need to recognize that cities such as Philadelphia don't reap much in the way of economic benefits from stadium financing. The executives, players, and staff, who are paid absurd salaries do not choose to live within the 156 12/2/2000 WHOLE - STADIUM BILLS City and, therefore, fail to strengthen our tax bases investment and other areas might. The building trades could find much more work for many more years building up just about any of the other parts of Philadelphia which are crumbling for that total of 3 or $400 million. And those of us who live here might fully reap the benefits of a supported infrastructure much more than we could from a football-only stadium which would get used by professional teams an absurd eight guaranteed days per year. I'll also point out that the Commonwealth Foundation, which is a nonprofit research foundation, published a study which states that Maryland taxpayers financed the creation of jobs to the tune of over $363,000 each, in paying for the baseball-only Camden Yards facility. 9 million annual rate and they make over $23 million in profit from that operation.
Philadelphia is the fourth largest TV market in the nation in both the NFL and major 157 12/2/2000 WHOLE - STADIUM BILLS league baseball and would continue not having a team here. We should be in the driver's seat on this one. If the City is still intent on wasting millions of dollars, I might suggest a better method of doing so would be to hand out $300 million in cash to incoming tourists at the airport over the next few decades. This would likely have a better impact on the local economy than the stadium proposal and is no less insane. Thank you for your time. I urge you to vote against this plan, and I do have copies of my testimony if anyone would like it.
Thank you very much, sir. Councilman Longstreth, your light is on. Do you want to be recognized?
Thank you. If you leave copies of your testimony on the table, I am certain that we will have them distributed to members of Council.
Thank you 158 12/2/2000 WHOLE - STADIUM BILLS very much for your patience.
And thank you so much for coming in to testify. Do we have anyone else to testify on the bills before us? Please approach the witness table and identify yourself for the record. (Witness comes forward.)
Council President and members of Council, friends of labor, and representatives of the Mayor, my name is David Gleason. I live in Northern Liberties, and I am a member of our local community development corporation. I just wanted to take a brief moment to just say a couple of words. I was -- I'm not naturally a sports fan myself and I was naturally skeptical of the stadium concept at first. I now recognize it as a very powerful tool for achieving some of the development goals that I think the City clearly has and clearly needs. I'm concerned that the plan before Council represents a bit of a triumph of suburban 159 12/2/2000 WHOLE - STADIUM BILLS interests over urban interests, and I have been -- become aware of an interesting plan that I think, much like the Mayor's original intent for the 12th and Vine site, I think there was definitely a genuine desire there to try to achieve something that was very much in keeping with or perhaps giving birth to a new urban vision for the City. We know that pressure from suburb development over the last 40 years has not necessarily been friendly to the City's goals, and we're still just recovering from them ourselves someone. I would have to describe myself as someone who's interested in good economic development. I think that some of the goals, generally speaking, of urban development could be achieved if, in fact, another site were considered for the baseball stadium. I am interestingly aware of a situation in my neighborhood, where there's a large vacant site that is almost completely demolished and ready for construction. Its referred to as the old Schmidts Brewery site. It's at 2nd and Girard. It's about three times closer to Center City than the current proposed site in South Philadelphia. It has the ability to 160 12/2/2000 WHOLE - STADIUM BILLS gain financing support from a more diverse group of participants than the South Philadelphia proposal. It would bring in players like the DRPA. I know Congressman Borsky is very supportive of it and has pledged that he would do everything he could do at the federal level to help finance that site. I'm confident that this body is industrious and will probably be able to close the gap that exists in the current plan for South Philadelphia, so that may not be the utmost concern in the larger context of such a large public works project. I think a great deal of industriousness will probably be brought to the table here in the closing hours. What I might like to do, though, is encourage City Council to perhaps strengthen its hands a bit and consider proposing an amendment that would make it possible to consider the site in our neighborhood, which has recently actually been willing to consider the possibility of putting a stadium there. We face a kind of an interesting flipside of urban challenge. Right now, we have a large developer who is planning a 161 12/2/2000 WHOLE - STADIUM BILLS large suburban-style shopping center, which really won't do too much for our urban fabric. Many people in the neighborhood have concluded that a good neighborhood ballpark-style development would help us much, much more. In any event, I know we're in the closing hours of this whole debate and it's been a bit of gritty process. It's tough bringing together so many different constituencies, I know, but I'd certainly like to encourage City Council to perhaps strengthen its hand with respect to some of the price negotiations for land acquisition in South Philadelphia, to consider proposing an amendment that would propose the Schmidts site as an alternative for the baseball stadium. I think it would be a good strategic move. I think it would be much more in the long-term interests of the City to have it a little bit closer to the center of town, have a deal that's a bit less beholden to the suburban fan base of the Phillies in particular. And I think the financing could be rather achievable as well. I know that I had a very pleasant meeting with Jonathon Saidel.
He 162 12/2/2000 WHOLE - STADIUM BILLS shared the general intent of what I'm saying. Councilman Kenney was very receptive and open to discussing this as well, and I want to thank everyone for considering it. Thank you.
Thank you very much, Mr. Gleason. We appreciate your waiting and testifying and expressing your views. Do we have anyone else to testify? (Witnesses come forward.)
Good afternoon. Please identify yourself for the record.
Yes. My name is Dan McShain and I am also a business owner in Northern Liberties and a member of the Liberty Yards Association. And I promise everyone here that this is the last you'll hear of me on the Schmidts Brewery, I promise. We started out the Liberty Yards Association with a great idea and we spent a hell of a lot of money and a lot of time and a lot of community activism to bring that idea to your attention. We did the best we could. The net 163 12/2/2000 WHOLE - STADIUM BILLS result of that was one official meeting with one Councilperson. In fact, that Councilperson's name is Jim Kenny. And while we didn't always agree with Jim Kenny on his representations and his concept behind this project, we greatly appreciate Jim Kenney's stepping out into the fray on this issue. I think that it's incumbent upon Council, now that this is sitting in your venue, to step out on this issue. You know, we have a railroad -- a car careening towards a wall here that's been set up by deadlines that are ill-advised with hammer clauses by the Eagles, pressure from the NFL, of which Leonard Tose earlier stated it wasn't as big a pressure as necessarily we all think, and by a parity clause in a lease that allows the Phillies to coattail themselves onto a very fine proposal from the Eagles and sneak their way into a ballpark that is nothing more than a $500 million parking lot ornament designed for suburbanites, because suburbanites are the only fans left willing to go to that place and watch that horrible team. That doesn't have to be the case. 164 12/2/2000 WHOLE - STADIUM BILLS On the evening that the meeting was made, just two weeks ago, to appease the neighbors of South Philadelphia, on that very evening, a neighborhood poll went around Northern Liberties, and Northern Liberties, that at one point voted to 0 against the stadium, voted better than 2 8 to 1 to please request that the Mayor come to the 9 Schmidts Brewery and to place the stadium there 10 and they join three other communities that already 11 in various ways endorsed concept of a stadium at 12 Schmidts Brewery. 13 I see a lot of union guys here. Now, 14 look I obviously am big-time -- I'm a baseball fan, I still play. I want to see these ballparks built. But I would ask you to ask your leadership which ballpark poses the real tens of millions of dollars in alternative spin-off development? I'm talking about the Delaware waterfront and I'm talking about the City-owned incinerator site. We have an incinerator site that's virtually across the street from our parking facility. If Ron Rubin and Comcast, by the way, who have more money than God, and who the hell cares where they build their corporate center. 165 12/2/2000 WHOLE - STADIUM BILLS They better build their corporate center, they owe it to us. They should build -- they should propose their corporate center to be on the incinerator site, right across from the new ballpark, which would develop three neighborhoods. Look, we -- And I'll conclude 'cause I don't want to bore everybody with my rhetoric. The Schmidts Brewery site is currently planned and has an $8 million tax incentive financing bill that is going to impose a double-decker K-Mart, a pharmacy, who knows, a Pep Boys, a thousand parking spaces on Second Street, historic Second Street. The first patent in the United States history was made on that site, on Schmidts Brewery, which is our town's beer -- we all know about Schmidts, it's a great beer, it's a historic place. It's -- this is not the type of neighborhood where Paul Levy identifies as the natural extension of growth of Center City. This is not the place to put the double-decker K-Mart, it's not in keeping with general development. We are trying to avoid that case as well. 166 12/2/2000 WHOLE - STADIUM BILLS Lastly, the amendment -- we have a hundred lawyers on the City's payroll running around here. It would be a very complex amendment.
And Raheem Islam told me the other day that he believes that there's only one person who has the staffing to accomplish such an amendment. We should allow the Phillies to build -- the Eagles to build their ballpark, we should pass this legislation. The Eagles should be allowed to move forward and build a ballpark. Their deal has never been in question -- not the citing, not the zoning, not the concept, not the financing. We should then allow a 90-day oversight period, approving the deal for the Eagles, thereby accomplishing the parity clause and allow Council 90 days of oversight too. At the minimum, examine the financial issues related to building in South Philadelphia. I want to see the Eagles, whose shovels are about to hit the ground, I want to see 'em stick with Phillies on this one, 'cause what we've needed to do all along is separate the Eagles. If you take away naming rights, the Eagles are putting up less than 20 percent of their 167 12/2/2000 WHOLE - STADIUM BILLS ballpark. They don't even put a winner on the field and they don't deserve this much power and this debate, and Council has the power right now. It has to be creative and it has to be forceful and it has to take the lead now. And that's what I came here to say and I appreciate your time.
Do we have anyone else to testify on the bills before us this afternoon? (No response.)
Seeing none, Council will stand in recess until Monday, December, 4th at 6 p.m. on this particular committee. (Applause.) (Adjourned at 1:06 p.m.) - - - 168 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 Saturday, December 2, 2000, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE OF THE WHOLE STADIUM BILLS HEARING __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter