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