Plus we still have some dollars left in the aquisition of stabilization of properties. So it shows up in two places in the budget.
Where is the second one? Are you talking about under neighborhood preservation? Are you talking about vacant property stabilization?
The acquisition of stabilized properties, 3.5? So is that the whole 67 12/6/02 - NTI FY '03 Program Statement and Budget 50?
I know those two numbers add up to 50. Small numbers I'm pretty good on the math. So that is the 50?
So all $50 million -- from the original budget we are anticipating spending $50 million on acquisition and that 50 is now being captured in the first year's budget?
Appended -- because right now, as of November 15, including the ordinances that were approved and those that are being prepared to be sent over to City Council, we are looking at $43.9 million in acquisition requests. That is on the last two pages.
Okay. Now, all the properties that are listed on here are all the -- in some instances it is not so much properties; it 68 12/6/02 - NTI FY '03 Program Statement and Budget seems to be more neighborhoods or designated development areas. I mean all dollars are I guess kind of spoken and accounted for. We know what the project is or we know why we are acquiring the properties?
The last group of properties which ordinances have not been prepared for, the last group actually represents properties that we will start reviewing January.
When you say "the last group," are we talking about down at the bottom, the group that starts with approximately 61 side yards? Is that what you are talking about?
Yes. Those are requests that we have not completed reviews on.
Well, if almost all the acquisition money is accounted for or designated to go somewhere by way of this last sheet, then it would appear that there is not much left for anything else; is that correct?
That's correct. And as we acknowledge this fact, one of the things that we are looking to do is to create this funding mechanism, what we have been calling the recycling, acquisition 69 12/6/02 - NTI FY '03 Program Statement and Budget recycling, fund, and the intent of that is since we are taking NTI bond proceeds to condemn property, most of which probably either have delinquent taxes and/or demolition, other liens, when we condemn a property, when RDA condemns the property, the City gets to collect its delinquent liens first, and so what we envision with the approval of Council is to appropriate -- budget how much we project to collect in delinquent taxes as well as municipal liens on an annual basis and then appropriate that to fund acquisition outlying years.
We have not finalized those budgets because we have not finalized the condemnation costs, but my estimate on $12 million, that we can probably collect 4 or 5 million.
That is what has been 70 12/6/02 - NTI FY '03 Program Statement and Budget transmitted to Council and approved at a hearing.
What's the basis for your anticipation of $4 million in taxes or outstanding municipal liens? What is that based on?
Just based on past experience. Unfortunately, Mr. Wetzel had to go to Harrisburg, but based on past experience he says that we get somewhere in the area of about three-quarters or two-thirds of the property that has been condemned has been tax delinquent. We can put together a finite budget, but we have to complete the research on all the tax delinquencies on the properties that are listed for this to get an estimation. But the intent here is to reappropriate each year an amount of money that is equivalent to what we collect. Because the intent here is we are basically taking -- but for the fact that we were condemning these properties, the tax delinquency may never have been collected. And I tried to describe that in the footnote to the five-year budget.
Yeah, I saw that. Well, let me go back then to the question that is I guess a combination of question and statement that Councilman Goode had raised with 71 12/6/02 - NTI FY '03 Program Statement and Budget regard to a particular project, for instance, that we have, that both of us share an interest in West Philadelphia. If -- what's the number? If basically $44 million is already spoken for out of the 50 -- right?
We have requests in for that. million of those requests we still haven't 11 completed the review on. So things could drop off. 12 You know, circumstances change. We will begin that 13 process in January. 14
But you know 15 generally your experience with us is it is a fairly 16 rare instance that anything ever drops off any of 17 our lists as opposed to we just add on. 18 The $44 million is spoken for. Then 19 if -- whether it is a faith-based organization or a nonfaith-based organization or any kind of organization that has the appropriate paperwork and designation, has its own CDC or 501-C-3, if in the first year 44 million out of the $50 million is already spoken for, what is the true likelihood that additional requests are actually going to be 72 12/6/02 - NTI FY '03 Program Statement and Budget approved? From the next-to-the-last page it would appear that half of the City has no money allocated for it.
Again, it is our proposal and plan to take the revenues generated as a result of the condemnation activity by the repayment of delinquent taxes and municipal liens and then appropriate -- ask Council for Council's approval because it would require an appropriation by Council as part of the general operating budget or a separate ordinance to appropriate that amount in fiscal year '04.
Right, but that is -- I mean, the 50 we know is solid because we have that.
All we are asked for is extra that we are going to hope for based on payment of these delinquent taxes. I guess are we in some way, shape or form -- you are going to take NTI bond proceeds, condemn the property, and if I'm understanding kind of the following the money, basically you are going to, in essence, transfer NTI funds back over to the City to compensate us for our 73 12/6/02 - NTI FY '03 Program Statement and Budget outstanding municipal and real estate tax liens; is that what's going to happen?
Under the current redevelopment laws of the state, if there are any outstanding real estate taxes and/or municipal liens, they were kind of like a priority interest, so the authority under state law either has to pay into court the appraised value of the property. Let's say, for example, it is $5000 on that property, and since most of this is abandoned and vacant property, there is usually outstanding tax delinquencies and/or municipal liens and sometimes they exceed even the actual appraised value of the real estate. So the City then -- that's repaid back into the City's --
-- general fund, but what we are proposing is then allocating that money as part of an acquisition fund to fund going forward.
Now you are talking about a designated or segregated account for these repayment of NTI bond-proceed-funded acquisitions and you are now -- is there a statute or ordinance 74 12/6/02 - NTI FY '03 Program Statement and Budget that allows or requires those real estate tax dollars to be separated and segregated from the general fund to now go back into this recycling fund. How are you going to do that?
The way it would work is that Council as part of -- the administration would propose in our annual budget, let's say, $10 million because we have looked at what we expect to collect as a part of the operating fund, so it is really two separate, I guess, roads that are being traveled, but we are trying to keep them cognizant of one another so it won't go into like a specialized fund.
It would have to be appropriated and approved each year by Council.
But you said at the moment you don't know with any specificity what you're anticipating collecting in the next fiscal year?
I can have the Redevelopment Authority come up with a preliminary number.
If you could give us the five-year schedule, I would be very interested 75 12/6/02 - NTI FY '03 Program Statement and Budget to see what that looks like. I'm assuming for the properties in the first -- whether it is the $12 million group or the $11 million group or the $19 million group, I'm assuming we can know now --
-- what the outstanding tax dollars are and match them up --
So now when the group from West Philadelphia identifies their properties and fills out the new easy-to-fill-out form, give me a sense of the timing of when something will actually happen.
As we described in our program statement as well as in hearings before Council, we are trying to set up a mechanism where we look at acquisition requests twice a year, so that we are kind of in sync with other funding resources, so the next group is going forward. I would imagine it would take us between January and 76 12/6/02 - NTI FY '03 Program Statement and Budget March, looking to introduce ordinances or transmit ordinances to Council around March; hearings held sometime between March and the end of the fiscal year. If Council approves --
We are talking about a process somewhat similar to the 2500?
Yes, the same way, and what we have talked about is what we are calling the fall cycle and a spring cycle, taking into account Council's legislative agenda. One of the things that we are learning or had learned is that a lot of times people come forth with an acquisition request late in the spring and we are not in the position to process it because of the recesses and often they felt they were disadvantaged for applying, for example, for tax credits. But having this kind of predictable schedule when we are looking at things, our objective is to have ordinances passed twice a year, one in the wintertime and one in the summertime, and then it's about another 60 days to file the declaration of taking.
The last package, or I guess the first package, but this most recent round, when did you put together that list? 77 12/6/02 - NTI FY '03 Program Statement and Budget
We began reaching out and requesting information in the summer, around June of this year. We reviewed it -- if I remember correctly, I think we had about eight meetings, some of them three hours long, in August and September. Then it went to the Redevelopment Authority board in October, and then it has to go through Planning Commission approval, and we transmitted ordinances in November, so it's basically a three-month process.
The reason I was trying to get a sense of the timetable is I have had a number of meetings with a variety of individuals including yourself. I had actually sent a request over during the course of the summer, but it did not make the fall package. I have had some followup discussions about it, and while there may be a need for I think it is urban renewal designation, that I learned most recently, so can you tell me why if a package -- and I think with a form -- was sent over during the course of the summer, why it would not have been a part of this past winter's round?
I'm not specifically familiar with all the details, but I think maybe one 78 12/6/02 - NTI FY '03 Program Statement and Budget of the issues is maybe the properties were outside of an existing urban renewal area. That's my assumption. Okay. It was outside an existing urban renewal area. One of the things that --
Well, one of the things that we would suggest as a first step is the creation -- particularly if you are going to be taking large numbers of properties within the area, the creation of an urban renewal area and redevelopment plan and proposal gives us the power to do eminent domain. Otherwise, we are doing individual Act 94 condemnations and that's much more from a management standpoint difficult to manage, so it is my understanding the RDA will probably be working with your office around the creation of an urban renewal area. I'm beginning to remember some of that conversation. And then once that is in place -- and that also I believe requires Council approval. The creation of an urban renewal area requires Council approval too, and then we have the broadest possible condemnation powers to deploy in support of the 79 12/6/02 - NTI FY '03 Program Statement and Budget project.
I understand that and I appreciate the additional explanation. My question I guess was more at the heart of when things come in, when do they get in the process, and if there are other processes that we have to pursue, does that stop our ability to get a certain number of parcels in a round of acquisition, and I guess it is not clear to me, short of having an urban renewal area created, why those properties could not have been a part of this first round of 2500 while we are simultaneously working on an urban renewal, since you were looking at properties during the course of the summer?
Councilman, all of the requests that you submitted last summer except for the Phoenix project, none of them were actually inside an urban renewal area, so they fell outside. Once we committed to doing the acquisitions that we briefed you on, we then -- actually they became -- they didn't go into the list of 2500 properties. There is a separate list for Act 94 properties, but 80 12/6/02 - NTI FY '03 Program Statement and Budget those properties are being taken -- they are in the process of being taken through a separate process. The 2500 referred to is strictly urban renewal, which requires Council approval.
According to the old program statement, at what point do you notify the Councilman that has made a request that their request is not moving forward?
We have briefings after the individual -- after the IR committee has reached decisions, then we brief each district Councilperson.
I didn't use the term "district councilperson." According to the program statement as it is, before we make these amendments to it, if we choose to make these amendments, according to that process, at what point do you tell the Council member that has made a specific project request that their project request is not moving forward? And I will refer you to of the program statement, the part that is being stricken.
What we did was we meet with 81 12/6/02 - NTI FY '03 Program Statement and Budget each Councilperson with a request and in, I believe it was, late September, early October we sat down with each district Councilperson that had a request.
I'm reading it. We say, "Each Councilperson that requests acquisition funds to support a specific development project."
Then it says "On a quarterly basis the administration will meet with the Councilperson requesting the funds, discuss any problems that are delaying acquisitions."
My first question is, was that done with regard to properties in the Phoenix project? And the second question is why is this part being stricken and what is it being replaced by?
We actually had discussions last fall about the Phoenix project. I had discussions with Councilman Nutter last fall concerning the Phoenix project. We received that request actually late last spring from the Office of Housing and Community Development that we go out and 82 12/6/02 - NTI FY '03 Program Statement and Budget do research on this project. Our concerns in the fall dealt with the development of the properties, who would actually do -- who would be responsible for developing the projects.
My question is really centered around whether the Council member who made the request was notified within a quarterly basis.
We are just completing the first quarter, which was in October, so we did meet that --
Right, and we just haven't had -- I mean part of this has been going through. This is the second quarter, and my understanding through the Redevelopment Authority, there is ongoing conversations.
Under the program statement as approved it says "On a quarterly basis the administration will meet with the Councilperson requesting the funds, discuss any problems that are delaying acquisitions." Did that happen within a quarter?
Within the second quarter 83 12/6/02 - NTI FY '03 Program Statement and Budget I'm not aware of that. In the first quarter we did because, as I said, it is part of the review process. In the second quarter, which ends the end of this month, we haven't had the opportunity.
The second question is why is this part being stricken and what is it being replaced with?
And it says, "On a quarterly basis the administration will meet with the Councilperson requesting the fund to discuss any problems that are delaying." I just carried that section over.
On right above the interagency acquisition review team. Because that's new language. I just carried the language over, trying to make it all one --
It says, "On a quarterly basis the administration will meet with the 84 12/6/02 - NTI FY '03 Program Statement and Budget councilperson requesting funds to discuss any problems."
Now it is situated -- it comes after the point at which acquisitions are funded. So it doesn't read the same way and it doesn't mean the same thing.
I'm happy to make that adjustment. It wasn't something intentionally done. I was just trying to rewrite the document.
I guess part of my question -- I'm sorry to take so much time from Councilman Nutter --
On it says "On an annual basis the administration will request from City Council members, meaning all members district and at-large, a list of properties from which acquisition funds are requested to assist specific development projects within their respective districts." I'm assuming that means the at-large district as well. On it say, "The administration will meet with each Councilperson that requests 85 12/6/02 - NTI FY '03 Program Statement and Budget acquisition funds and supports specific development projects in order to discuss the projects development strategy. On a quarterly basis the administration will meet with the Councilperson requesting the funds, discuss any problems in delaying acquisitions." The language is very different in the new version of the program statement and I think you know what my specific problem is.
Whether you have inadvertently or on purpose eliminated the role of at-large Councilpeople.
As long as we correct it, I don't have a problem with it, and as long as projects that district Council members may have interest in and at-large members may have interest in as well, we are notified within a few months, as the original statement said, I don't have any problem with that either.
Thank you. 86 12/6/02 - NTI FY '03 Program Statement and Budget
No, Madam President, unfortunately. Members, I have a fair number of questions. I would like to at least get through the first one and then I can come back. I know other members may have a few questions, but Miss Smith or Mr. Kunz, I guess what I am still trying to understand is given the requests made during the summer -- and I have no complaint about the number of meetings that we have had -- if it was clear during the summer that an urban renewal area needed to be created, which I am fairly certain I did not know in the summer, I believe we could have upon our return in September sought to create such an area, have that moving through the process, and at least -- and I don't know what your definition of large is. I know that there are -- I have seen in the bill that we did for the 2500 properties there were some very large acquisition components put together. This particular one involves Allegheny West. It's 20 properties, which I think is probably on the low side in terms of anyone's comparison of large number of acquisitions versus a small number. 87 12/6/02 - NTI FY '03 Program Statement and Budget I want to better understand how we can do things in as timely a fashion, if not simultaneous fashion, as possible so that we, or at least I, don't end up in a situation where the train is moving out of the station and I don't particularly want to be standing on the platform, at least by myself. If people have things that they are trying to get done, if there are other processes or steps that we need to take, I would at least like to know about them in a timely fashion, and if we can legislatively address them, I would like to be able to do that, but in looking at at least the last two pages, which tell a fair amount of the story, if $44 million is already out the door or on its way out the door out of 50, I don't necessarily know that that leaves a lot of prospect for many of us that have nothing at the moment.
Councilman Nutter, with respect to the forgotten blocks project in Allegheny West, we had originally scheduled those properties to go through what we would call the administrative process, which would be Act 94.
Is this the other process that you were mentioning in our earlier 88 12/6/02 - NTI FY '03 Program Statement and Budget round before the point of information? Is that what you are talking about?
Yes, the project is budgeted. That's not the issue. We have the funds for that. What we are trying to do now, the reason we are creating the urban renewal area, is that we believe that we can take these properties within six to nine months. Our hope is to have the properties acquired and conveyed prior to the summer recess. With Act 94 we don't believe that we can do that. It is a much larger process right now. If we had started the urban renewal process in the fall, we probably wouldn't be much further than we are now simply because the City Planning Commission would have to recertify -- would have had to certify the areas blighted and go through a very long process to get to where we introduced the final ordinance in the Council. And given the number of properties, we really didn't have the manpower to do lots of these things, not simultaneously, and neither did the Planning 89 12/6/02 - NTI FY '03 Program Statement and Budget Commission. The projects of which urban renewal areas had to be recreated or had to be created are just coming out of City Planning now for blight certification, Frankford Creek being one of them.
That leaves us with anticipating acquiring the property. We have the budget. We have the funding. It leaves us with the properties being acquired and conveyed by the summer.
And with regard to the earlier project that was discussed, which is the project in West Philadelphia primarily centered, or at least one of the main participants is the Mt. Carmel Baptist Church, that does have its own CDC, is that in an urban renewal area? Do we need to create a new one? Where does that go in terms of the number of properties that are involved and the timetable that actually makes some sense and are there dollars allocated for that, or do they have to come out of the 50, of which 44 are already spoken for? 90 12/6/02 - NTI FY '03 Program Statement and Budget
Good morning. My name is Debra McCullick. I'm the director of housing.
I just wanted to answer the question specifically about the Phoenix project. The Mayor and some other folks met with representatives from the Phoenix project earlier this fall and we gave them five potential sites of publicly owned land to look at in West Philadelphia which would not -- which are currently in public ownership, would not need condemnation or need to go through this process at all, and I'm actually awaiting a response from them about which of those sites they think would be the best ones to move forward with and then we can begin the process to convey those.
There were four or five sites that were given to them. I think it was five, but it might have been four.
No; larger parcels, development parcels. 91 12/6/02 - NTI FY '03 Program Statement and Budget
Yes, to build or 5 units, in that range, and they are reviewing those 6 and I'm waiting for a response on that now. 7
Madam Chair, I will 8 relinquish, but I would like to have the opportunity 9 to come back. 10
On , and this might go on to what Councilman Nutter was talking about, the Fourth District and the Ninth District under the stabilization of the general fund, besides my deep affection for those two Councilpeople, why is theirs so whacked out? Why is one 500,000 and another 600 and everyone else is 250,000? Is that because of these projects that were already budgeted or projects that aren't budgeted?
This budget that is the original budget that was in the program statement approved is not changing and basically the way we allocated resources for stabilization, which is a 92 12/6/02 - NTI FY '03 Program Statement and Budget higher level of treatment to a building with the intent to acquire for rehabilitation, we tried to look at it in comparison with the number of dangerous buildings within that district and then also in reverse of the demolition activities, so that's how we derived that budget back in May.
Miss Smith, if you add up the dangerous buildings, the total number of dangerous buildings, the one with the most is the Fifth Council District and then it is the First Council District, I think, or the Third, the Third and the First.
Essentially what we do is the reverse of that, and that was in part -- the intent of the stabilization program was to look at neighborhoods throughout the City where there was lower vacancy where it didn't make sense nor would we want to try to demolish a vacant building but we wanted to stabilize it, acquire it, and get it through a rehab program like our home ownership rehab program, so it was kind of like the reverse when we did the budgeting for that.
President Verna, may I ask 93 12/6/02 - NTI FY '03 Program Statement and Budget for a five-minute break?
Sure. We will stand in recess for five minutes. (Short recess.)
Councilman Mariano, are you finished with your questioning?
Miss Smith, in looking at the original ordinance, Council was supposed to be getting reports on activities. We have never gotten a report to the best of my knowledge.
We are in the last stages of finalizing what is going to turn into the first and second quarterly report. I apologize. The staff person that was part of my unit who would have been responsible for that left and it took a while to replace them, so we are working on that. I hope to have it to you by the end of this month.
Please. Let's not forget about the monthly reports.
I won't. We are actually working on them and I apologize for that. 94 12/6/02 - NTI FY '03 Program Statement and Budget
Let me ask one question, if I may. Will this amendment to the NTI budget require the RDA to issue any additional bonds this year and, if so, when and for how much?
Yes, we would be issuing additional bonds to help finance the acquisition activities. We have just begun to even think about a timetable and what that would mean in terms of how much depending on some of the outcomes of our acquisition. We want to put together a draw schedule and a time schedule that, you know, made sense. I would suspect we could be -- when Council reconvenes in January, that we will be in a better position. We will work with Mr. McPherson and your office and make sure that he is part of any financing meetings that we are having, but we are just in the very preliminary stages of thinking through what that would look like.
Thank you. The Chair again recognizes Councilman Nutter.
Miss Smith, earlier there was some discussion about minority and female either employment or business opportunities, and I 95 12/6/02 - NTI FY '03 Program Statement and Budget think you had in response to a question that Councilman Goode had asked indicated that NTI had met its goals or projections. Is that your response?
I was speaking specifically to the first report that we have gotten that was in relationship to the demolition of approximately 30 properties in Strawberry Mansion. So, yes, and we did meet that.
At the moment that's the measurement, 30 properties in Strawberry Mansion?
The economic opportunity plan set goals of I believe it was 45 percent for contracting opportunities and I believe it was around 70, 80 percent for employment participation, so I'm just saying with respect to that specific activity for demolition.
45, 47, whatever, but I don't know what that is of. What's the 96 12/6/02 - NTI FY '03 Program Statement and Budget category?
For minority and female, disadvantaged and disabled business opportunities.
And you said something about 70 percent for employment?
You have a budget presently for $68 million for NTI for this year; is that right?
Actually spent, I have a report, and it is just not -- thank you.
It is really good to have people like that sitting next to you, isn't it?
I have a new staff person. There's a lot of detail to keep. It is about $8 million that has actually been drawn down from the trustee. That is some of the information that we are including in the quarterly reports that I owe.
What did you spend the $8 million on? 97 12/6/02 - NTI FY '03 Program Statement and Budget
So far it has been primarily spent on things like the titles, market studies and title reports connected with the acquisition. Emergency demolition activity is funded out of that line item. It also includes the wrap-up insurance costs and program management costs.
Tell me about that wrap-up insurance. What's the story? We're paying for the insurance for the demolitions?
Right. If you recall, when we approved the original program budget, in it we talked about what we call owner control insurance program, and the way I explain this in the most simplest way is that basically the City is a third-party insurance. We go out -- because we can buy it at bulk and therefore reduce the costs, we buy the insurance for the demolition contractors as opposed to in the past where they went out and then they had to provide proof of insurance. There were two motivating reasons for that. One is that one of the barriers to smaller business and minority contractors participating had been the cost of insurance per project and then even after 9/11 some of it just wasn't even available. 98 12/6/02 - NTI FY '03 Program Statement and Budget The insurance market did change significantly. And then, secondly, it was related to being both costs -- we felt that we would get a better cost overall by buying like a group insurance as opposed to individually.
This wrap-around insurance program, I mean I'm going to assume -- you will correct me if I'm wrong -- all the properties in the City that are being demolished on pretty much a daily or every-other-day basis, they are not all driven by NTI activity or funded by NTI bond proceeds, are they?
So all demolitions in the City are being funded by NTI bond proceeds?
Yes. In the initial general operating budget I believe there was about $2 million in general operating funds for emergency demolitions and then we also programmed 2 million out of the NTI bond proceeds, basically replacing the demolition budget, and I believe in the first quarter we expended the general operating dollars, so now we are using the NTI dollars.
So we are taking 99 12/6/02 - NTI FY '03 Program Statement and Budget care of the insurance issue for the companies. They don't have to worry about insurance because there is a wrap-around insurance product available.
He has been wanting to jump up to the table for a while.
Lance Rothstein, capital program office. The wrap-up insurance program does not cover the standard curbside program. The contractors under curbside still have to provide the regular insurance that has historically been required by the City.
When you refer to curbside, you are talking about emergency demolitions?
Emergency demolitions, the day-to-day demos that you are talking about, yes.
Let me ask this question: If we are covering the cost of insurance, and I'm not sure what other costs we may be covering, why does it appear that the cost of 100 12/6/02 - NTI FY '03 Program Statement and Budget demolitions is increasing?
First of all, inflation. It's a nice easy answer, but if you look at the requirements in our specification package, an example that I can cite is that on the party wall repairs, for example, at the top of the party walls we now have a very nice detail that was implemented at L & I about a year ago and we are using that now as part of our standard spec. That costs some extra money to be able to seal the top part of that wall properly. Other examples are --
We were using just regular sheet metal wrapping over the top, sealing it with a little bit of muck and a couple nails, and now what we are doing is a standard roofing detail which includes barge, boards, wrapped aluminum, a couple of bolts. We are doing it right so that these properties can withstand the test of time after we are gone.
What is the average demolition cost these days? 101 12/6/02 - NTI FY '03 Program Statement and Budget
The average demolition cost at Strawberry Mansion -- in fact, our experience just the past few weeks is showing that we are hovering just over the 11,500 mark in Strawberry Mansion. One of the bids that we recently opened, those prices were coming in more, as Miss Smith indicated earlier, about 14,000 plus, so we are seeing that range in the bids that we have received recently.
You are not attributing all of that to inflation, are you?
No, absolutely not. We have a spec package, like I said, that includes certain pieces that were hitherto not necessarily requirements. Another one that I haven't mentioned, six inches of fertile topsoil with grass seeding. That was not something that we were requiring of our demolition contractors in the past and now it is. We also have wrapped in -- the all-inclusive nature of it now is that all of those costs include asbestos, party wall, post site treatment, any fencing in the rears. There is some fencing; it's a very limited amount, but it is to seal off the rears of the properties that we end up 102 12/6/02 - NTI FY '03 Program Statement and Budget leaving exposed. So these are all kind of little things that we have been adding to the package that make the finished product much more acceptable in the neighborhoods.
I must commend you. There are not many hearings where we hear the word hitherto utilized in the course of public testimony, and I want to recognize you for that. The package in Strawberry Mansion, was that a bit of a gap tooth demolition, or was that a string?
One thing that we had hoped when we first started looking citywide at all the demolitions was that we would be able to identify more strings. What we have discovered is that L & I in fact has done a good job over the past several years of taking care of many of the larger strings that were available for demolition and the vacancy pattern that we have seen as we have gone into several of these neighborhoods is much more diffuse and you end up having a couple of vacant buildings and then an occupied building and then a couple of vacant buildings and an occupied building 103 12/6/02 - NTI FY '03 Program Statement and Budget and clearly in that instance we can't afford to do all the relocation that would be required in order to make it a string. So part of what's driving our costs right now is the revelation that a larger percentage are going to be hand demolitions than had been previously thought at the beginning of the program.
Am I reading this correctly then on of the new statement you're anticipating spending $34 million to demolish approximately 2000 dangerous and unsafe residential properties throughout the City? And even without my calculator, I think that comes out to $17,000 a property? Is that the new number?
Yes, but it also includes the other soft costs, contingency fund, things of that nature.
I understand that, but they go with the cost of the demolition, right?
They do go into the cost of demolition, but we are maintaining those as separate line items.
Maintaining those what? 104 12/6/02 - NTI FY '03 Program Statement and Budget
The soft costs such as the wrap-up insurance is still being shown as a separate line item instead of wrapping it into the overall cost of demolition.
I understand that, but you wouldn't have the line item unless you were doing the demolition; is that correct?
The original budget I think, I seem to recall, had it at 11.
That was just on the hard side. I think we added the soft costs in. I think we are at about the same per unit. We are not that different off the original budget.
Is there nothing that can be done to drive that cost down? There is a fair amount of supply out there. Did I read a story in the paper where we have people reluctant to bid on our demolition packages? Is that for the 105 12/6/02 - NTI FY '03 Program Statement and Budget purpose of driving the costs up further?
I think it is fair to say we are early enough in the program so that there are a fair number of potential bidders out there who are waiting on the side lines to see how it plays out on the first couple of packages. They want to know are we really going to stick by what we say we are going to do and are we really going to have an inspector out there full time? Are we really going to make them cross their Is and dot their Ts on all their paperwork, and the answer is yes, by the way, and that's what they are trying to see. And once they learn the ins and outs of how the contract is being handled, we hope to see more bidders. One positive note is that as a result of that article last week we were contacted by three additional interested contractors, one of whom in fact was outside the City of Philadelphia and that contractor had indicated to me that he thought the package was a fair package. He had looked at it and he was interested in coming into the City and building on the work as well, that he thought we had a concise specification package and he looked forward to bidding against some of the other 106 12/6/02 - NTI FY '03 Program Statement and Budget bidders.
Well, as this governmental game of NTI chicken proceeds, if the contractors, for whatever reason, don't show up or continue to hang out on the side lines waiting to see if you are going to implement what the bid package says, how do you get any demolition activity going on if you don't have any demolition companies?
We believe and we are confident as we move further along the process that we will get more responses. The administration feels that -- and this is in part responses from letters and complaints that we received over the year that we really did need to rethink how we package and bid out our project. Instead of having a lot of separate projects bid packages going out where it would have been more difficult to coordinate the timing of it, everything is in one package to make things more accountable. Our payment in the demolition specification packages came at the end of the process so that a person -- so now we will have a unit per house cost. The contractor is paid when the project is completed. What we have heard and we 107 12/6/02 - NTI FY '03 Program Statement and Budget are in a continuing conversation with the contracting community, can we break it into a dual payment instead of having everything at the end for each house so that they can build a little bit earlier in the process. So we are making those type of adjustments, but we always felt from the beginning that this was an opportunity to put in place a demolition program and methodology to address many of the concerns that we often heard from communities.
How many demolition companies do we have that are based in Philadelphia?