We did a regionwide search about a year ago, came up with about 600 contractors in the entire region, that's a multistate region, and something like 150 to 200 within a 20-mile radius of downtown, and of those, probably at least half actually City of Philadelphia contractors.
150 in a square 25 mile radius. Okay, 75. And how many of the 75 have 108 12/6/02 - NTI FY '03 Program Statement and Budget bid on any of these packages?
To date we have, I believe it is, 12, maybe as of late last week 5 contractors who are qualified to bid on this work. 6 Of those 13 it is a little less than half who are 7 from the City of Philadelphia who are potential 8 bidders. Of the couple of bids that we have 9 received, we have typically seen four to six 10 bidders, and of those four to six bidders about 11 half, maybe even more, have been Philadelphia 12 bidders. 13
There are a lot of halves going on here. Is the final number like 3?
No; actually the one that is coming to mind, which is the Mantua project, I'm pretty sure that four out of the six bidders -- I don't have the information in front of me. I can get it for you if you like, but four out of the six were local bidders and two were out of the state.
Have any sense of why so few Philadelphia-based companies are bidding on this work?
Again, I think it comes back to the fact that we have repackaged our 109 12/6/02 - NTI FY '03 Program Statement and Budget specifications. It is something that looks new to them even though by and large what's contained in it has been around for a while and they are honestly, from what I have heard, waiting to see how the first few come out.
I hear you. Can you forward to the Chair, the committee, a very easy-to-read, maybe in bullet point fashion, layout of what the general specifications are for demolition and what you should see if you were to go out to the site or what the remaining constituent who is living next to the now demolished building, vacant lot, what they should expect in terms of what the site should look like and how their house should be treated when that demolition is completed?
Yes. So if I understand you correctly, what you want is kind of a bulletized version of what they should expect to see when it is done, not necessarily how it is done, not the process of demolition, but am I supposed to see a clean edge on the front of my building, am I supposed to have cracks in my sidewalk, that kind of thing?
What should their 110 12/6/02 - NTI FY '03 Program Statement and Budget house look like and what should the vacant lot look like when it is all done. That's what I would like to know.
Absolutely. And we can even provide pictures as documentation for you.
That would be good. Let's talk about market rate housing. Where does that come in in the whole scheme of things? When does that part start?
In the overall NTI five-year plan we talked about facilitating -- let me explain. When we use the phrase "market rate housing," we are referring to housing that are not receiving direct public subsidies in connection with the construction of that project. So it includes sort of like the sale that takes place in the general marketplace. It will include a number of new construction projects that are coming -- that will be coming on line like the Kaypart project and others that people are beginning to look at. And then, as we indicated in the overall five-year plan about NTI, it is an important part of our housing strategy. So how does that tie into some of the things that we are doing? One thing we think that 111 12/6/02 - NTI FY '03 Program Statement and Budget could be a very important stimulus to the regular real estate market functioning and functioning well are employer-assisted housing programs. Just based on the experience of the employer-assisted housing program that the University of Pennsylvania developed and funded with the support of, I think it was, Fannie Mae, that became a very good catalyst I think in the real estate market in and around the institution, so we would like to design and put into place a program that will reach out to other large and smaller employers to do something similar and then to find the role that the City plays. So we issued an RFP around that. Secondly, in terms of, let's say, larger-scale, new-construction development we meet regularly or fairly regularly with developers who are interested in opportunities in the City. A major piece is land, a sufficient amount of land, where they can carry out a market rate project at a cost that is -- I wouldn't call it high end, but it would be more probably in the range of 200,000. In some instances they are looking at older industrial parcels to see if they can secure land on their own and where necessary. We entertain the request to 112 12/6/02 - NTI FY '03 Program Statement and Budget support any land assembly activities. So, again, as a part of the plan, I think as we get more land in public inventory is an opportunity to go out even more through our RFP process or proactively market land for redevelopment at market rate.
So is there a plan for market rate housing for the City?
When you say "a plan," initially we have been putting our focus on land assembly work and facilitating, meeting with developers, talking about opportunities in Philadelphia, hearing what their requirements are, what parts of the City they are interested in, those types of questions. A lot of times what I would call market rate nonsubsidized housing developers tend to go out and assemble land or attempt to assemble land on their own where they think the economics of the project would work. The most active person who has been pursuing this, as everyone knows and has been reported, has been the Westrom companies. They have been looking at numerous sites throughout Philadelphia and doing their own due diligence with 113 12/6/02 - NTI FY '03 Program Statement and Budget respect to that.
There was recently an announcement actually out of New York City about new housing proposed I believe in lower Manhattan and a plan had been assembled in New York. So we don't have a plan per se for new market rate housing. We have a lot of discussions and we have had some meetings?
I think one of the things -- and I don't know the specifics. I just heard about the New York program, but I think one of the specific differences -- and Cleveland is another City that has benefitted a great deal from what we call market rate middle income housing -- is that they already had the land in hand. New York goes back to the '70s, always aggressive in public ownership land which they can proactively market, and I think what they are doing is putting together a variety of different types of mortgage products to help facilitate the sale of those properties.
You are not taking a position that until we know that we have the land in hand we shouldn't try to plan for where we might want market rate housing or where we would like to 114 12/6/02 - NTI FY '03 Program Statement and Budget see it go --
-- or actions that we should take to try to make it happen?
It's a very interesting question. It is almost which comes first. Some private developers, in fact a number of them that I have met with, tend to say just because you -- that this is our business and we like to figure out where as opposed to us saying, you know, here, new market rate housing there, because they may feel for economic reasons or how they are looking at their project that doesn't make sense. So what we have been doing is getting information and trying to work with individual developers from Hanavian to the Westrom companies to see where they are interested and if there's a need for governmental assistance to assist with land assembly, then we will try the system with that part of it.
Councilman Nutter, excuse me. When you talk about the New York plan, are you talking about the City having given these big brownstone properties to developers for a 115 12/6/02 - NTI FY '03 Program Statement and Budget dollar? And I think at the end of the completion of the rehab work they were sold for somewhere in the vicinity of $400,000?
Madam President, I wasn't specifically talking about that. There was actually an announcement I believe just last week by Mayor Bloomberg in New York City. Some of this naturally, unfortunately, comes as a result of post 9/11 events and availability of some land in the lower Manhattan section but also just taking a look at that general area, and they have decided in New York that they want to push or promote -- I believe the number was upwards of ten and a half billion dollars' worth of development activity in that area. A fair amount of that money is actually going to come as a result of Federal Government reimbursement to New York City for many of their 9/11 costs, but the City has just decided that they want to promote development in certain areas and have asked their planning people to take a look at how they would do it. That was the most recent announcement out of the Bloomberg administration. And so I just wondered of our folks here how we look at the planning process, and I 116 12/6/02 - NTI FY '03 Program Statement and Budget understand the whole what comes first, but it seems to me that if we at least lay out a vision for what we want to see happen, you can from time to time actually get some people to buy into it or assist you in making it happen --
-- as opposed to just leaving them out there on their own to say, I want to be over here and we would really like someone to be in a slightly different place and make a case for why it works for a number of reasons.
As I said, we have had innumerable conversations with a variety of developers at different points in time where they thought they saw opportunities, what type of things they are interested in and the like and how, for example -- it goes back to we did articulate the importance of doing land assembly in areas which, you know, clearly are adjacent to Center City. I think the Mantua area is an example of that. It builds off a very strong real estate market. Land is still relatively inexpensive. It's close to the park and other amenities. Those are the types of conversations that we have been having. 117 12/6/02 - NTI FY '03 Program Statement and Budget
Is Mr. Hanna here today? We have a new secretary of --
That's correct, and I believe his office is in the process of beginning to set up meetings to speak with each of the Councilpersons individually. He arrived last week.
Acquisition disposition. I heard at the hearing last week Mr. Wetzel talked about one of the changes that had taken place at the state level, and I think it was mentioned this morning, about the five-year holding of dollars down to one year. Has any action taken place to actually lessen the amount of time it takes for acquisition and disposition of properties? Where is that issue?
Some of the things that we are doing administratively is putting together, as I said, the concept of the predictable cycle and then tying that in, giving priority to acquisitions around -- these are the policy things and then there is also work happening in terms of the actual 118 12/6/02 - NTI FY '03 Program Statement and Budget nitty-gritty detail of a project.
I'm actually more interested in the nitty-gritty detail from start to finish.
In the nitty-gritty detail what has been done is that the staff master has completed what we call a detailed data flow process and chart which goes through and not only maps the steps but what individuals do with respect to acquisition and disposition activities and so it becomes a road map. That is being evaluated to then say where can we save time? A perfect example could be that often we may take five or six steps and get a no decision on something or research decision and you end up going back to Step 1, and now that we kind of mapped this in such a way, we can say, Maybe we need to do Step 1, 5 and 10 at the beginning of the process, give all that information up front so that when we reach Step 5 we don't have to double-back, but that's the type of work that has been done.
On average how long does it take to acquire and dispose of a tax-delinquent property in Philadelphia? 119 12/6/02 - NTI FY '03 Program Statement and Budget
On average I would say it takes about a year after the developer has or the recipient of the property actually has plans prepared.
If the clock starts when we actually have the funding and if they can come up with plans about nine months later, it would take about a year.
I want to make sure I'm clear. Is that the nine months --
Nine months' acquisition and approximately three months for disposition.
That is if you have the funding and the person has plans?
And this is the 120 12/6/02 - NTI FY '03 Program Statement and Budget issue where you have to put the money in court.
The reason I say if you have the money is because we can't really proceed to do anything as far as condemning the property until we actually have a funding source.
I understand. Is it also through that process that you have this whole put up certain funds in court and the issue that you raised earlier about the money staying with the court five years versus one year? Is that the same process?
That is the same process, but that speaks more to when we can -- when the City can actually go in and recoup the property if there is no owner of record or if the owner of record doesn't appear.
Do we use sheriff's sale to acquire property as well, or acquire and dispose of?
We have not used sheriff's sale as a primary means for acquiring properties 121 12/6/02 - NTI FY '03 Program Statement and Budget where we envision the development. The sheriff's sale can still be used. For example, any individual can initiate a sheriff sale by paying $800 and then that goes through the VPRC process, but in terms of using that as an acquisition tool to support redevelopment type activities, that is not the primary engine in Philadelphia we have been using to --
I think for several reasons. The ability to manage particularly multiple parcels. If you are trying to do site assembly, each one is sort of an individual project in and of itself and some things -- maybe a property could be bidded up to our tax delinquent and we would get outbid and we don't have control over it. I mean in terms of order of priority, the eminent domain process, you know, at the end of it you have good title, you have control, and the steps involved in it are fairly predictible, and by trying to set up our declaration of taking that to occur within two months after the ordinance is approved by Council and by trying to get Council approval in December and June of each year, we are 122 12/6/02 - NTI FY '03 Program Statement and Budget trying to get that, as we always said, more predictability and transparency. And that also we hope means to the development community that as they look at and analyze and evaluate their projects, that they will try to piggyback on those time lines.
A couple last questions. Has the funding been made available for -- I think on there is a consultant to work with Council, Council members, on projects in their district.
That money was appropriated at the time of the approval of this budget. I don't believe we received any specific requests yet to -- I'm not sure what the process is of drawing that down, but that is still there. It's still available.
Tell me what is going on with the study of curbs, sidewalks, driveways and alleys.
We have been focusing primarily on the retaining wall. We at our last meeting with the managing director's office began to talk about what could be some other ways to look at 123 12/6/02 - NTI FY '03 Program Statement and Budget the curb and sidewalk and driveway issue. There we are going to be doing some best practices research and also looking at what other jurisdictions are currently doing and I intend to make this issue an important part of any of the conversations that we have in Harrisburg. We call it the issue of private infrastructure. It is my hope that we are able over the next 60 days to be able to really document within the State of Pennsylvania and other particularly aging urban centers. Even though they may not be as large as Philadelphia, we are quite sure that they are confronted with some of the similar issues and then can we look at a way to create a statewide program around funding or supporting infrastructure improvement like this.
Your testimony indicates that apparently the CLIP program has been -- I'm going to assume that it is being successful given some of the numbers, 5700 L & I violations, 2600 street violations. Again, just from what I have read in various news accounts, I understand 124 12/6/02 - NTI FY '03 Program Statement and Budget that the program has now been expanded beyond the Sixth and the Tenth Districts into the Third District. Can you tell me how the program is functioning over there and when will it be expanding over into the Fourth District?
Can I bring someone from the managing director's office to begin talking a little bit about that?
Sure. Actually I don't mean to leave the question so narrow because the testimony previously indicated that at some point in time the program would expand citywide, but I think it was also stated at that point that you were looking at the Sixth and the Tenth and then you would proceed with potential expansion. If the program is expanding, I would like to understand how my constituents can benefit from it.
Basically what that initiative was trying to do was to rethink how we did quality of life code enforcement activities. My understanding is that the program in the Third District was a program that I think there may be other resources being put on the table privately. I'm not as familiar with the details. And then we, 125 12/6/02 - NTI FY '03 Program Statement and Budget as part of the FY '04 NTI activity, we are going to look at how we can then begin replicating the concept of CLIP in other districts, and I know the managing director's office, because it really is more of a redeployment issue than just a funding issue.
I think one of the exciting parts actually of at least the news account and as articulated -- and I commend my colleague for it, for pointing this out. The councilwoman specifically indicated that the opportunity to expand the CLIP program in the Third came as a result of the flexibility of NTI funding and it is what you can utilize to make these things happen, so I would just like to better understand how the dollars can be used in this way to make a program happen in another district.
For example, I know that we said we are going to do a target basic system repair program. We are issuing an RFP for that, but in terms of things like the code enforcement related work, we expect the streets and some of these quality of life type of things, that is general operating dollars and it is more of how we are 126 12/6/02 - NTI FY '03 Program Statement and Budget deploying people in a more targeted fashion to issue those citations as opposed to on a complaint-driven basis.
You are talking about over in the Sixth and the Tenth?
I can't speak to the extent that it was expanded to the Third. Maybe there were some conversations about that. I would have to ask Laurie.
Good afternoon. Laurie Jones with the managing director's office. You are asking a question about how we are thinking of expanding CLIP to other areas of the City. The next area that we are looking at is part of West Philadelphia and it is a program that is somewhat different than what we have with CLIP. The idea is to take the concept of Neighborhood Transformation Initiative, the concept of improving the quality of life throughout the city and we will be deploying a second group of people to address issues that have arisen. 127 12/6/02 - NTI FY '03 Program Statement and Budget It's very different from CLIP in that it is not just going around and issuing citations. It will involve more conversations with communities where neighbors in the community or the Councilperson in the community are identifying some of the areas of concern and then together we are working in a concerted way and a more directed way of correcting some of those concerns and addressing those issues. That's something that I am sure very soon we will be able to expand to other parts of the City and we can have conversations about that.
I'm sure you will be coming back to testify in front of us on many occasions. The only thing I have to ask you to do is slow down a little bit. Tell me that last part again. You are going to be expanding?
What I was saying is that what we are doing now with going into a section of West Philadelphia is working with community residents, with the Councilperson in the area, 128 12/6/02 - NTI FY '03 Program Statement and Budget working together with a group out of the MDO to address quality of life issues in a controlled, concerted effort to improve those quality of life issues there. It's very different from CLIP in that we are not going across the board and issuing violations. It is something that we were doing in consultation with the residents, which is somewhat different. In terms of how we can expand that to other parts of the City, we can definitely have conversations about how we do that.
I guess my question then is when will those other conversations start and when can I anticipate similar enforcement of quality of life improvement efforts in the district that I represent?
One of the things I would do is I would suggest that I can have a conversation with somebody in your office and we can start talking about how we can do that.
Excuse me, Councilman. When you do that with Councilman Nutter, would you make sure you do that with me too, please?
I think what we will do is I will have the managing director's office maybe schedule meetings with all of the Councilpeople to talk about how do we do this prioritization of I think major problems that affect quality of life in the district. I think again because of capacity issues what they are attempting to do is to say what are the top 10 to complaints or issues that 15 impact quality of life. Let's deal with those, developing a prioritization list as we move forward.
Thank you. Miss Smith, when you responded to Councilwoman Miller, she asked you about fencing, and I was left based on that discussion with the impression that fencing was being handled on a case-by-case basis but that there did not appear to be a fencing program here in the City and that out of demolition it's either left I guess to the Councilperson to inquire about it or it is left to 130 12/6/02 - NTI FY '03 Program Statement and Budget the discretion of either L & I or possibly the managing director's office to decide based on whatever those criteria may be as to whether or not a fence will go up. Is that our policy?
For larger projects we are trying to put in place resources and programs.
Just as in the past where we work with the district Councilpeople around the demolition activity, there have been conversations I think or requests that will come through and the decision is made. There is not a separate line item budget just for fencing or fencing programs to say we will fence always in these circumstances, but we are trying to focus on the larger lots. We are doing things where there is security issues and the like and also begin to raise private funds as well as -- and in one instance even got a small federal grant to do larger scale treatments of the vacant land to secure it or stabilize that lot.
If the neighbor recognizes that demolition is about to happen, who do they call if they want a fence on the property 131 12/6/02 - NTI FY '03 Program Statement and Budget next door because in most cases there are some security-related issues. They generally don't like people standing next to their house or standing in their backyard.
With the emergency demolition we usually again work through and with the district Councilperson when we take those properties down. With the NTI we also put together budgets and indicate how we are going to do the post demolition treatments on the land so that -- those are the bigger projects.
of the -- we are still calling this the program statement, right? talks about --
No; the document in front of me, the 12/12/02 document. I guess this is the amendment to the original program statement.
talks about a five-year strategic plan to implement a green city strategy, complimentary treat and manage vacant land. What's going on with that? 132 12/6/02 - NTI FY '03 Program Statement and Budget
What we are beginning to do is select -- two things. We are beginning to work with the Horticultural Society to identify about six target areas for the next two years around which we can raise money. The greening activity is essentially modeled on the work that the Horticultural Society has done in partnership with the empowerment zone and community-based organizations, what we call a basic cleaning and stabilization and greening. The signature for that type of treatment has been tree plantings around the rim as well as low-level fencing. We expanded that through the small grant we received from -- the Horticultural Society received from the William Penn Foundation to do some areas outside of the empowerment zone. I believe there was one in your district around 54th Street and Hunter. The other part is to begin to look at strategies for raising funds. That would include what federal resources we can bring to bear, looking at what resources, for example, may be within like the USDA forestry programs and other resources to augment that pool. Straight up vacant land 133 12/6/02 - NTI FY '03 Program Statement and Budget maintenance and stabilization are not activities that we can simply do out of bond proceeds and, as you know, the general operating budget is also -- we are doing a lot cleaning out of that, but that next level of treatment is what we are working on.
So you have a contract with Pennsylvania Horticultural Society?
We have a small planning contract that I think was through the Office of Housing and Community Development to help work with us on that. They have also put out -- in fact, I will be happy to get copies for City Council -- manuals on vacant land management and treatment that kind of captures the history of their work in this area over the last three to five years.
I think my last question is going to be about encapsulation. How many properties have we encapsulated since the budget was approved and who is in charge of that? Because I have not had a conversation with anyone in recent times about encapsulation.
I will ask Mr. Rothstein to talk a little bit about that. 134 12/6/02 - NTI FY '03 Program Statement and Budget
Councilman, to date, and again I don't have the number in front of me, I believe it is encapsulations that have taken 5 place up in the Frankford area. That was work which 6 was executed by the PHA a couple months ago. Quite 7 frankly, we have concentrated our efforts on the 8 demolition side of the program and clearly we are a 9 few months behind on implementing the stabilization 10 strategy. 11
Is it anticipated 12 that these activities again will be simultaneous, or are they going to be serial in nature?
It is anticipated that they will be simultaneous and I think you will see in a very short term here a lot more activity. We have been having some discussions with the Redevelopment Authority to help us provide a level of staffing for the stabilization program that will allow us to look simultaneously in several districts at once, and by the end of the fiscal year I think you will see that they will be caught back up with each other.
Lastly, is there a designated person -- I have had this conversation 135 12/6/02 - NTI FY '03 Program Statement and Budget with both the Mayor and with Mr. Wetzel. Is there a person who is specifically designated to work with Council members on all of the various components of NTI, or do you just deal with whoever you need to deal with about the individual components of NTI?
We have been working -- I have been working with the chief of staff and individuals within the various housing and City departments to identify individuals to be the point person or liaison on a district-by-district basis. You know, it's a question of who is available and what other job responsibilities they have as well as their ability to work within or outside of their current job descriptions. So we are still putting that together. We recognize it is a key need in terms of helping coordinating activities because one thing about NTI, it is not just one type of activity; it involves a range of activities.
No, I understand, and I will apologize to you upfront if you find it difficult to find anyone who ends up either volunteering or possibly is assigned to work with me. I will try not to be as difficult as the person might anticipate under these circumstances. Okay? 136 12/6/02 - NTI FY '03 Program Statement and Budget Thank you. Thank you for your responses. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilman Clarke.
I just want to ask a couple of quick questions about market rate housing. That term is thrown around in various quarters. Can you define market rate housing with respect to your understanding of that term?
The way we have used it in connection with NTI is housing that does not receive direct construction subsidies in order to make the development project work.
To the unit itself. Because in Philadelphia many of our neighborhoods, the fair market value is significantly lower, even after rehab or after sale, than the development costs we have to put in public subsidies to make up the 137 12/6/02 - NTI FY '03 Program Statement and Budget difference. If you are able to sell a property -- a house at or near the cost of developing it, you won't need a public subsidy, and that's how we use market rate. It is not just -- some people think, oh, it is high-end housing. When people say "high-end sales housing," that is housing that costs 300,000 or 350,000 or above. It is possible depending on the development costs -- I guess in Philadelphia market rate without subsidy could probably end up in the area -- I know there has been some development maybe around 150 or 200. That's what your residential home builders say, it would be about a $200,000 housing project.
Are you familiar or anyone from the administration or any other supporting agencies familiar with suburban development? It is my understanding -- and correct me if I'm wrong -- that a lot of suburban complexes and particularly the onslaught of houses in the perimeter of the City of Philadelphia, although they may not have received some levels of direct subsidy to the particular unit, but in a lot of instances the townships, the states, the counties may have 138 12/6/02 - NTI FY '03 Program Statement and Budget provided subsidy in terms of the way of access roads, in terms of utility infrastructure improvement, that without that being in place, those units would not be marketable units? I can recall Governor-elect Rendell in one of his speeches he was talking about a particular location that happened to be a quasiresidential and industrial complex, at least the potential for one, that he wanted to ensure that one of the first priorities is that he would make sure that there was an access road to that particular location. Can you talk to me about that, in the suburbs how dollars are spent indirectly to support those types of things?
Often, and I'm not sure if this is the correct terminology, but sometimes their fees excess, so they are called exaction fees I believe or development fees that end up paying for the putting in of sewer lines and the infrastructure to support the development.
Yes, it is like an extra fee on top of the development and I guess the developer 139 12/6/02 - NTI FY '03 Program Statement and Budget gets that back in the home ownership association fees and the like for that.
So you are saying that the home purchaser is paying for a road?
Now, I'm not talking about a road in the complex. I'm talking about a road that is commonly used by everyone who happens to potentially pass by. I'm not talking about a road within the complex. I'm saying an access road meaning it could potentially be a highway. I know there are a number of -- 309 is an example and I think a couple of other roads leading out of Philadelphia. There were a number of improvements that happened on 611 that happened to the road and shortly thereafter it was a substantial development initiative taking place out there, and I'm just wondering --
I would imagine it is either federal funds, you know, from the Department of Transportation probably could be a source for that type of road building, or the county's general fund or capital funds. 140 12/6/02 - NTI FY '03 Program Statement and Budget
Some level of subsidy; i.e., taxpayer dollars, just done in a different way?
Yes, still taxpayer dollars, but it comes out of the Department of Transportation or out of the county's capital program.
If in some neighborhoods you take a look at neighborhoods whereas you may be in a position to provide some outside, quote/unquote, subsidies separate and aside from the particular housing development that would make properties marketable as an example. You have a neighborhood that there may be some peripheral problems associated with that neighborhood, transportation, access roads, other lighting conditions, that if those particular impediments were removed, then this would be a marketable neighborhood whereas the property would sell on the market without a subsidy directly to the property. Do you understand where I'm going with this?
I'm just wondering if there are other ways that we can provide subsidy. The reason I ask that question, in some areas in my 141 12/6/02 - NTI FY '03 Program Statement and Budget district as an example, we, meaning the City, with its various agencies, PHDC and similar agencies, will go into a neighborhood and we will acquire a vacant property and we will spend upwards of 80, 90, a hundred thousand dollars to renovate that vacant property, and in that particular neighborhood properties tend to sell between 30 and $35,000, and. I guess what I'm trying to say is is there a way that we can create some sort of program that will require or enhance the likelihood that a private individual will buy a property in that neighborhood on the private market as opposed to us going in and buying the house and spending a hundred thousand dollars and selling it for 30,000, creating a $70,000 subsidy? I guess what I'm trying to say, is there a way we can spend our subsidy dollars a little differently to have properties sell for what they should sell for and not have us in the construction end of the property themselves? Because I think that is problematic in terms of the cost of those units.
I would have to look a little more into that because, again, it might get 142 12/6/02 - NTI FY '03 Program Statement and Budget -- it depends on what dollars we are using and whether or not we can just give a grant to an individual to do rehab without triggering other issues. I would have to look at that.
My problem is that when we develop units we pay, I believe, three times more than they would if the private sector developed the unit. And I had actually talked to you about this to some degree earlier on, about a strategy that would allow or create an environment where an individual could rehab the property themselves or purchase the property themselves on that private sector tract where if there is a property that is in a reasonable condition, that a person can purchase it for 25, $30,000 on the block, which homes are selling for on that block, instead of us allowing the properly to deteriorate and we end up going in and rehabbing it for a hundred thousand.
That is the intent behind something that we called the home ownership rehab program. It's one of the reasons why we opened that program up to individuals, small contractors, and didn't limit it to CDCs, where the individual can go and get the property off the private market, access 143 12/6/02 - NTI FY '03 Program Statement and Budget up to, I believe it is, $25,000 in subsidies, and because they are single transactions, they trigger --
That's not what I'm talking about. What I'm talking about is the property becomes vacant, right? The property is in virtually move-in condition, but what we did was we allowed the house to sit there and it deteriorates over a period of time and then it becomes a, quote/unquote, vacant house in the truest tradition of the word, at least in our minds, and then that requires that $25,000 subsidy from HRP. What I'm talking about is a property becomes vacant. That property is livable. Is there a way that we can get access to the property through the heir or somebody so that we can get somebody in that property early on before we have to spend $25,000 in subsidy?
Again, we would have to go through either a condemnation -- and, most likely, properties that tend to -- that you are talking about are in areas that are outside of urban renewal areas so we would use an Act 94 condemnation process unless -- 144 12/6/02 - NTI FY '03 Program Statement and Budget
I'm assuming the individual who owns the vacant property, is that person around?
I don't know. It is normally a situation where you have some family member that doesn't care. The grandmother passes and the kids don't want to move into the neighborhood, you know. They are not interested and there is some heir or title problems. We don't know who owns it, but the property is a livable property. Is there a way we can intervene immediately?
We would still need to get the legal title to that property. For example, if it was an estate property and there's three children and no will and the three children cannot get together and agree to sell the property, in order for us to get control of that property, "us" being the government, to give it to someone else, we would have to use our condemnation powers.
I hear you, but I'm saying there are instances, believe it or not, where people may want to get rid of the property, but there is no link between those heirs or that 145 12/6/02 - NTI FY '03 Program Statement and Budget individual or family member. People just don't want to be bothered with the house. Can we do an early intervention?
If the person wants to offer it to -- I would think it would be better to keep the government out of it. If there is an individual or a group who is able to pick up that property, go to them, then it should be a direct sale as opposed to selling it to the government, which means we have to bring it into our ownership and then dispose of it. Then there is the donor/taker program where there is tax delinquency. They can use that one where they donate it to a particular person, but there has to be tax delinquency, right? Yeah.
Debra McCullick, director of housing. The other place where we tried to do some of those connections, we have a small program called the vacancy prevention program where we have tried to enlist people's aid, particularly for elderly homeowners, to both help them with what you might call financial literacy about what do you do with your house so that people will have wills and know what -- make some plan for what to do with 146 12/6/02 - NTI FY '03 Program Statement and Budget their house and then also we have sort of a small databank where people have connected up with local CDCs where they know in the event that something happens to this person, this is who to contact through the CDC. You know, I have a son who lives in California. He is not going to want the house. We will sell it to the CDC, but that is all just a voluntary sort of trying to provide information.
And as an incentive for a home purchaser, we can give them a $5000 basic systems grant or -- I guess what I'm trying to do is minimize the subsidy and intervene on those properties early on in the process before they become deteriorated, and if it calls for us to do a 5, $10,000 subsidy to the home purchaser to rehab the house on their own where they hire John Q electricians or whoever, it is going to decrease the cost I believe by at least 50 percent and get that property back on line as opposed to us acquiring the property, paying the market value for the condemnation and then going and rehabbing the property at some exorbitant cost, and selling it for the 30,000 that it could have sold for in the private market early on. We need to get a little 147 12/6/02 - NTI FY '03 Program Statement and Budget more creative than the traditional --
More brainstorming, yes. And I think the first step in that is to get control of the property either through a public action or through a private transaction because if we don't get the title to the property --
My purpose is to get -- I would rather the private transaction strategy because once the public gets in it, it's a whole other story and it escalates the price about 50 percent whatever you end up doing. I know too often in the neighborhoods, and since we are talking about Strawberry Mansion, which I'm somewhat familiar with, that properties become vacant and, you know, the kid may be in California. They don't care. It's a headache, and if they simply got a phone call from somebody saying, "Look, we understand you are an heir to the property, if you have any problems cleaning up the will, we will help you with that. Are you interested in selling the property? This is the market value for the property." The person says now they have the assistance of getting involved in disposing of the 148 12/6/02 - NTI FY '03 Program Statement and Budget property. That could be the difference in them saying it is a headache, this is an area that I used to live in 30 years ago, I don't want to move back, and then that property just declines. So I'm trying to say is it more prudent for us to try to have that minimal intervention and even offer some financial incentive, to give somebody 5 or $10,000 to fix the house up, as opposed to ten years later spending a hundred thousand dollars.
We can definitely look into that. Maybe part of the housing counseling agencies, they could be the type of agencies that could search out individuals, but from experience a lot of times, I mean, if the person has already left or already hasn't made provisions or haven't filed letters of administration, things of that nature, it is harder to track down. Maybe people in the community, that could be a little bit of an organizing type of approach you could take where people may have information about how to locate heirs and things like that.
They tend to know more than just about everybody. They know who 149 12/6/02 - NTI FY '03 Program Statement and Budget the kids are, where they moved to. Now, we had this conversation about a year ago and nothing happened. Can we follow up on this for real?
I think there is stuff happening in the vacancy prevention program where some of that work is going on. We just haven't thus far taken it to scale. Maybe what we can look at is as a part of next year's budget and resources is is that a role that housing counseling agencies -- I think you would want somebody, in my opinion -- this is -- I don't know if this is something that we, government, sit around and try to track down people or do you find somebody who is a little bit closer to the ground who can do that type of outreach and organizing, and then the question is who, and maybe since we have an existing network of housing counseling agencies that work with people who are interested in buying houses anyway, that might be available for us.
In another part of my district I have an area that a certain CDC has been very aggressive in identifying vacant properties and they have a person whose sole 150 12/6/02 - NTI FY '03 Program Statement and Budget responsibility it is to track down the heirs or the owners and they have been able to successfully acquire properties in a private transaction and then through one strategy or another put the property back on the market and I don't necessarily, frankly speaking, want to have government as that entity whose responsibility it is to track that heir down or that owner. I think sometimes if you have someone from the private sector and that whole acquisition or that notification or strategy is fee driven, that it will enhance the likelihood that that person is going to find that individual who owns that property or the heir to that property and to figure out a way to get these home purchases together with an incentive, small financial incentive, and the person who was interested in getting rid of a problem and decrease the subsidy involved at a substantial level. I think we need to -- I guess I'm just concerned where we go in the neighborhood and there is a property on the block selling by Josephine Q Real Estate Company for $25,000 and then we go and acquire a vacant property down on the same block and rehab it for a hundred thousand dollars and sell it 151 12/6/02 - NTI FY '03 Program Statement and Budget for 20, $25,000, and I think we need to look at that other approach to stretch that subsidy dollar. Who's going to follow up on it?
I will ask Debra to follow up maybe with the specifics of that.
Like I said, we have what we are calling the vacancy prevention program. We can try to expand it a little bit and get some other ideas from you.
I think we need to really aggressively attempt to implement that strategy because, as you know, I don't have to tell you, we continue to get a decrease in our federal community development block grant.
I think $5 million again we are losing this year and I anticipate if this soon to be had war starts, we are going to continue to suffer a decrease in our block grant dollars and our HUD-assisted dollars. 152 12/6/02 - NTI FY '03 Program Statement and Budget Thank you, Madam President.
You're welcome. Councilman Nutter, do you want to be recognized?
Yes, Madam President. I just have a couple other questions. Miss Smith, I want to focus on the last page or possibly the last two pages. Take me through for ordinances introduced in November 2000 -- actually I just noticed this for the first time. I'm assuming that should probably say ordinances introduced in November 2002?
I just saw that. I'm not getting into that particular issue. That group, 12,499,555, these are all live projects?
This represents a group of properties that were reviewed by the Rules Committee on December 9 and voted out.
I understand that. My question was, these represent actual projects that are anticipated? 153 12/6/02 - NTI FY '03 Program Statement and Budget
Some of them were actual projects and some of them also include acquisition zones where we were taking every vacant lot within that zone for landbanking purposes, and I believe the Redevelopment Authority has transmitted, as requested by Council, a break-out of the ones that were projects -- I believe you were interested in both nonprofit and for-profit developers as well as the ones that were being landbanked, and I believe if that hasn't been transmitted, it is in route.
In the second section, ordinances to be transmitted in February 2003, what are these? Are these projects?
Some are projects and some of them also represent landbanking I believe also. Mr. Kunz can talk to the specifics of that.
There are actually four specific ordinances. They are the Logan ordinance. I believe there's 985 properties there. There is an ordinance for West Mill Creek and 44th and Aspen. Together they account for about 339 properties. It's for a PHA Hope 6. There is an ordinance for Frankford Creek for 24 properties for a development there and there is a Kingsessing ordinance which 154 12/6/02 - NTI FY '03 Program Statement and Budget has, I believe, three different projects included in there, PHDC, City Board of Trust, and I can't remember --
I thought that was in the round that we did just the other day? When you made specific reference to the Board of City Trusts, I thought that was in the package that we did the other day.
The Board of City Trust project that we did the other day was in Model Cities area. That is in North Philadelphia.
Okay. And then this last group, the pending request as of 11/15 -- I'm sorry. Let me back up. So all five of these, the Kingsessing, 49th and Locust, Mill Creek, Frankford Creek and Logan, these are all live projects?
The Logan project is probably the -- we don't have a specific developer for that project. We don't have a specific developer for 49th and Locust. The other projects -- the other 155 12/6/02 - NTI FY '03 Program Statement and Budget ordinances have live developers.
And obviously the members who are concerned about those are concerned about them and they should be concerned about them and they will manage their process, but in a couple instances we are allocating dollars to do certain things in certain areas but we do not have a live or formal development project, but we are anticipating that something might happen; is that the way it is being conducted?
For example, it was my understanding that we received several expressions of interest in developing what I guess historically has been known as the Logan Triangle, where we did significant demolition but never took title to that land, by some commercial developers, so there is not -- there is expressions of interest, but you need the assembled parcel to move it forward, and I believe in consultation with the district Councilperson for the Ninth District you could do either an RFP or expression of interest or RFQs to kind of take it to the next step.
Tell me about this last group. 156 12/6/02 - NTI FY '03 Program Statement and Budget
This last group represents requests that came in beginning in the summer and some of them as late as October and November and to many degrees continue to come in.
And do they represent specific development activity, or are you just anticipating putting the dollars aside so that if something happens you are able to --
In some instances like, for example, the Neighbor Restorations LP project, that is a specific project for -- that will use tax credit and no public subsidies and they want to be in a position I think to apply for tax credits in October. Universal Community Homes will be a specific project. So it is a combination of both. Some of them will be just to have title to the properties since we approved it and then maybe there are interests like, for example, like the Neighborhood Garden Association Trust to take over the early NTI action sites that we have done some improvement on. So there's a whole host of -- and some of them are, as indicated, just may be simply landbanking so that we can proactively market for 157 12/6/02 - NTI FY '03 Program Statement and Budget development.
So you are putting the dollars aside so that you have them available?
Yes, yes. And, again, these are not complete. These are not finalized estimates. The work that we would do between January and March would be, you know, to further vent the requests.
So let me ask this question: A couple of these in the last group, the approximately 61 side yards in the first Councilmatic district, there is an actual list of the 61 to be acquired?
I believe we received probably by property on the acquisition form.
And the various Eighth District landbank for $2 million and the Seventh District commercial.
Yes, we have actually received requests for all of these. 158 12/6/02 - NTI FY '03 Program Statement and Budget
Now let's go back to the earlier questioning. With regard to either Allegheny West or the discussions that we have had in Wynnefield or West Philadelphia, with the exception of I believe it was some site cleaning work at this 54th and Hunter, which is just a big lot, none of those projects are listed anywhere in any of these. So how are they being paid for or what proceeds are being utilized or what budget is the funding coming from and right or wrong, good or bad, why would they not be here as opposed to somewhere else?
Yes, but Allegheny West, the forgotten blocks project, was previously funded. It was funded from a transfer ordinance. I believe that was FY '02. So that was previously funded.
Not the 20 properties that we were talking about earlier from the transmittal this summer?
I'm not sure what it 159 12/6/02 - NTI FY '03 Program Statement and Budget is being called. It may be. I'm talking about the letter that I sent during the course of the summer, blocks, and we had the discussion earlier about 5 the need to create an urban renewal area and all of 6 that discussion. 7
But the acquisition dollars 8 had already been committed for that project. 9
So then they 10 wouldn't be listed here because they are coming from 11 somewhere else? 12
When I go through 14 the sheets here and it seems to line up -- and 15 hopefully I have done this correctly, but out of the 16 three categories you have a million seven for the 17 First District, 3.8 for the Second, 18.4 for the 18 Third, 21,000 in the Fourth, 9.4 million in the 19 Fifth, 1.4 million in the Sixth, 4.1 in the Seventh, 20 3.1 in the Eighth, 1.8 in the Ninth and zero in the Tenth. Is that correct?
You are talking about the summary that precedes it where we broke it out by Council district?
No. I took your 160 12/6/02 - NTI FY '03 Program Statement and Budget last page, and based on the categories and the districts and the totals, in a district-by-district accounting added it up. If you have it in a cleaner version --
The report is slightly different from what you did. I attempted to do the same thing. I still tried to keep the three separate categories separate.
Separate, put hem together or whatever, but in a district-by-district accounting do those numbers make sense?