Now let's19 deal with the issue of funding gaps and20 gap financing. Is that really primarily21 what you do?22
Primarily23 what we do in the Commerce Department24 or -- I don't understand the -- primarily25 72 10/5/11 - COMMERCE - BILL 110557, ETC.1 what I do, primarily the Commerce2 Department?3
Primarily4 what's done in terms of economic5 development subsidy. Is it really gap6 financing or providing a funding gap?7
When it comes8 to incentives, yes, it is primarily gap9 financing. We don't do any primary10 lending.11
That doesn't24 really mean that that's the last funding25 73 10/5/11 - COMMERCE - BILL 110557, ETC.1 in or that it's gap financing. That's2 how it's characterized. Because in3 reality, what happens is, you're simply4 writing down the interest rate for the5 banks. You're allowing the bank to get6 the interest rate that they want.7
So the banks14 stay in the deal with the interest rate15 that they want.16
Well, what we21 do is we close gaps where projects can't22 close them through the normal private23 sector means.24
And maintain25 74 10/5/11 - COMMERCE - BILL 110557, ETC.1 the interest rate that the banks want.2
We don't --3 that's right. We do not influence the4 interest rate the banks want.5
Thank you.11 What would you say is the12 number one, two and three impediments to13 job creation, business attraction and14 business retention in the City of15 Philadelphia?16
It may not be17 in the order of one, two and three, but18 I'll put a few of them out.19 I think that we are -- for a20 variety of reasons that have to do with21 the perception of the culture of the22 City, the tax structure of the City, we23 are not seen as a business-friendly city.24 I think that is the largest impediment.25 75 10/5/11 - COMMERCE - BILL 110557, ETC.1
I wouldn't4 say it is only our business tax5 structure. I think it's a whole host of6 things.7
I'm10 repeatedly told that people don't want to11 come here because they think the12 environment is difficult. They think13 it's an unfriendly environment. They14 think it's too political.15
It means18 that, for example, on real estate19 development, they're worried that there's20 not a level playing field, that the rules21 are not consistently applied. I hear22 that repeatedly.23
From24 developers?25 76 10/5/11 - COMMERCE - BILL 110557, ETC.1
From2 developers and businesses who are3 thinking about coming here.4
What is the8 Administration doing to counter the9 complaint that we're not a -- that10 there's not a level playing field if you11 want to do business in the City of12 Philadelphia?13
Well, one is14 we're telling them that that's not the15 case, first of all.16 Secondly, we are trying to17 reform a number of systems to make them18 more citywide predictable. That19 includes --20
How are you21 telling them that's not the case? In22 other words, it's only businesses that23 are considering coming here that have24 shared that with you. What is the25 77 10/5/11 - COMMERCE - BILL 110557, ETC.1 Administration doing to get rid of that2 perception from people who, because they3 have that perception, don't even bother4 to talk to you?5
Exactly, and6 that's a very fair point and something7 we're greatly concerned about, and the8 way you do that, I believe, is you have9 to get the message out there through10 examples by attracting businesses to the11 City, who can then turn around and create12 an environment in which it is clear that13 that is not the -- that this myth -- that14 this comment is mythology, and you do it15 by example.16 So, for example, we've been17 working very hard with some out-of-town18 developers to try to get their projects19 going so that they're living proof then20 in fact you can do this, you can make21 money and it will work.22
But isn't23 the very concept of PIDC providing24 incentives and gap funding for particular25 78 10/5/11 - COMMERCE - BILL 110557, ETC.1 projects political in nature? Isn't the2 fact that we do provide these incentives3 to some people and not other people part4 of what creates this misperception? In5 other words, the very colloquy that6 you're having with Councilman Goode about7 gap financing means that there are some8 people who get it and some people who9 don't, and really the question is, what10 can we do to change the business11 environment so the City -- and cities are12 and states are notoriously bad at this13 based on every academic study I've ever14 read -- so that the City is not picking15 winners and losers in terms of who gets16 gap financing? What's the number one17 thing we can do as a city to not need gap18 financing for people to want to come19 here?20
So that22 there's not a perception that you have to23 come into the City and do that.24
The reason --25 79 10/5/11 - COMMERCE - BILL 110557, ETC.1 let's go back to the original point. The2 reason that there is gap financing is3 because the margin between the cost of4 development or the cost of doing business5 is, particularly development, is razor6 thin.7
I'm going to10 get to your question. Give me a chance.11 It's razor thin between that12 and the revenues that come with it. So13 our costs of development are high. The14 revenues that back it up are15 insufficiently high. So, therefore, the16 gap is marginal, and anything that pushes17 it over the gap generally creates these18 kind of gaps that we wind up having to19 fill. Now, we're not the only city that20 does this. All cities have to do this at21 some level. It's a particular problem22 for us. So increasing -- at a theory23 level, increasing the value of the City24 and at the same time trying to decrease25 80 10/5/11 - COMMERCE - BILL 110557, ETC.1 development costs is helping the2 equation.3
Development4 costs are not the problem, right? It's a5 demand problem. Not enough people want6 to be here. Rents in Boston are 67 bucks7 a foot. They're 27 bucks a foot in the8 City of Philadelphia --9
So what can16 we do to drive demand that is going to17 eliminate the need for gap funding18 because projects won't be on razor-thin19 margins? What's the number one thing we20 can do as a city to change the demand21 equation to have people want to be here22 and not need gap financing?23
I think it24 comes on the back of several things that25 81 10/5/11 - COMMERCE - BILL 110557, ETC.1 make the City more desirable. More2 livable, more people wanting to live here3 is very much a part of it. Quality of4 life is part of it. Streamlining5 regulations is part of it.6
You began7 the conversation when I asked what the8 top three things were and you only9 mentioned two discussing what we need to10 do as a city to -- the three things that11 are impediments to business retention,12 attraction and job creation. You13 mentioned taxes and you mentioned the14 perception of people out there. The15 perception is in part created because16 people have to come to you in order to do17 anything because of the razor-thin18 margins. The perception we perpetuate,19 because in order to have a project pencil20 in the City of Philadelphia, it needs gap21 financing. Everything big does, whether22 it's a hotel for the Convention Center,23 the Convention Center itself.24
Everything2 needs public subsidy. The question is3 what's the one thing we can do to get4 away from the public subsidy that's not5 necessary. And you're not going to6 answer, because we both know what the7 answer is, because you listed it in your8 first two. It's change our tax9 structure. But the reality is, the10 cities that have these kind of bills that11 we're talking about, they don't have12 business taxes and, therefore, they have13 huge demand and, therefore, when they14 have a sick leave bill or they have a15 minimum wage bill, it's not a problem in16 those cities in terms of job creation,17 business attraction and business18 retention, because they're not one of19 four cities in the country with a net20 income tax. And it seems to me that21 that's what we need to address, not22 complain about sort of fairness and23 equity.24 Thank you, Mr. Chairman.25 83 10/5/11 - COMMERCE - BILL 110557, ETC.1
Before we go2 to Councilman Jones, Mr. Greenberger,3 1700 Market, the building there just4 sold.5
Yeah. I'm6 just trying to put a mental image in my7 head. Tall office building, yeah.8
I'm not aware22 of there being public money in the sale23 of the property.24
Councilman25 84 10/5/11 - COMMERCE - BILL 110557, ETC.1 Jones.2
I don't know3 if sometime public back and forth like4 this is helpful or not. I don't know,5 because the public is watching this, but6 I have to say that I spent a couple years7 on that side of the table in the economic8 development committee. What I found is9 that different developers will say the10 reason development is good or bad to11 different people in different rooms,12 because they don't want to embarrass13 either the political side or the14 administrative side, because at the end15 of the day, they're trying to make money16 and they're trying to do it with the17 least amount of impediment. But some18 recurring themes I have heard is that it19 is difficult also to navigate some of the20 economic development entities that are21 responsible for it. I've heard22 complaints that there's not a level23 playing field. I've heard complaints24 that some communities are sought after by25 85 10/5/11 - COMMERCE - BILL 110557, ETC.1 way of doing business while others are2 taken for granted. I've heard people3 from emerging nations suggest that to me,4 that when some entities come in from out5 of town, they're showed the Navy Yard,6 but they never see Hunting Park or they7 never see Parkside or they never see8 parts of the waterfront.9 So there's enough of this to go10 around, and I don't know if it's helpful11 to do, but I think one of the things that12 we can do is really go in a session or a13 room. We are sponsoring legislation to14 look at the question from top to bottom.15 Some people have mentioned that it costs16 more to build in Philadelphia than it17 does in New York and less yield by way of18 square foot by way of at the end of the19 day. So I've heard a number of things.20 I've heard that, Oh, I would love to21 build in New York, but where will my kids22 go to school?23 So there is enough of this kind24 of pointing the finger stuff, but I think25 86 10/5/11 - COMMERCE - BILL 110557, ETC.1 at the end of the day for this city to2 grow, all of us better come together and3 figure it out and figure out how to put4 the best face, the best tax, the best5 open-for-business-with-economic-6 development-agencies foot forward for all7 people. It is MED Week. There are8 minority developers that are qualified9 that say they can't get a shot with you10 guys, because they won't get the same11 kind of information that others are12 afforded.13 So there's enough of this to go14 around to say why can't Johnny or Jannie15 read, but what I will say to you for the16 future of this city, as the Mayor talks17 about and as Rob talks about shrinking18 revenues, we better get in a room and get19 it right. And I would suggest that it's20 not one thing but a plethora, a whole lot21 of things that we need to correct.22 That's what I'll say.23 Thank you.24
I would agree25 87 10/5/11 - COMMERCE - BILL 110557, ETC.1 with you. Thank you.2
Yes.5 Thank you.6 Good morning. Councilman Green7 raised an important question that we've8 seen debated and asked in a number of9 different forums around attraction of10 businesses. What would you identify as11 the three incentives or attractions for12 why businesses might ultimately select13 Philadelphia as a place to do business?14 What would be the top two or three?15
Well, you16 know, it's sort of -- this is a bit of a17 sort of multi -- it's got two sides to18 this first answer, and, that is, the cost19 of doing business here is indeed lower.20 The real estate rents are lower. It also21 means that making those equations work is22 more difficult.23 We have our centrality relative24 to a very large population is desirable.25 88 10/5/11 - COMMERCE - BILL 110557, ETC.1 So organizations like Teva2 Pharmaceutical, in part the reason they3 came here is because this is a great4 central location from which to do their5 distribution, and, in fact, they found6 not only land availability in the City of7 Philadelphia, they also found that8 working with us was relatively easy, and9 so that transaction got concluded.10 So I think the nature of sort11 of the administrative response to12 business is really important. People13 need to feel that they're both welcomed14 and that they're going to be treated in a15 fairly predictable and efficient manner.16 I think our centrality on the17 East Coast is very important to us and is18 an asset. I think our workforce is an19 asset and the resources that we have in20 the City by way of educational resources.21 Councilman Jones, for instance, mentioned22 a point that in fact does come up from23 time to time where you said, I'd like to24 be in New York, but I can't either afford25 89 10/5/11 - COMMERCE - BILL 110557, ETC.1 to be there or I have a school problem.2 We probably have more options than many.3 That's particularly attractive to4 international folks.5 The research capacity of6 Philadelphia and the ability to integrate7 with that asset is a big plus for us, and8 I think also just the nature of the City,9 the fact that the population increased10 because we are a desirable place to live,11 that there are -- and in my former12 business, we heard -- we were pretty13 regularly able to attract people from14 places in the Midwest and the South15 because they liked the big city16 atmosphere of Philadelphia, but it wasn't17 New York. They didn't want that.18
So I think20 all those things are assets, and there21 are probably several others that make us22 a very attractive place to be.23 That said, we're also in pretty24 serious competition with a lot of places.25 90 10/5/11 - COMMERCE - BILL 110557, ETC.1
Sure. The2 one I would like to punctuate is the3 Greater Philadelphia -- called the4 Greater Philadelphia Cultural Affairs5 Alliance has done in their portfolio --6
Where our9 rich arts and culture community as well10 is becoming increasingly a factor that11 corporate execs consider when attempting12 or making decisions about moving their13 company here as well. So thank you for14 that.15 The second question raised by16 Councilman Green or the observation made17 was this notion/perception, which is not18 often reality, that you have to be19 connected to do business here. Having20 heard that, has there ever been a21 sit-down with the Greater Philadelphia22 Chamber of Commerce or like interest23 groups where collateral can be -- written24 collateral, written PR brochures can be25 91 10/5/11 - COMMERCE - BILL 110557, ETC.1 developed where you have personal2 testimony from businesses who actually3 moved here and learned that that is4 really not the case always in ultimately5 wanting to make a decision here? Because6 when we hear those type of observations,7 for me that's just homework has to be8 done to counter what we know is not9 always true.10
And, in fact,11 we do take those kind of testimonials and12 use them both in our brochure materials,13 Smart City, Smart Choice, our Commerce14 Department annual report, and we've had15 also -- I can think of several press16 conferences where we've asked individuals17 who run businesses in the City to come18 forward and talk about it, including a19 whole series of them recently made20 related to Smart City, Smart Choice on21 video.22
I'll be happy25 92 10/5/11 - COMMERCE - BILL 110557, ETC.1 to make sure that you get copies of that.2
Please.3 Thank you very much.4 Thank you, Mr. Chairman.5
Thank you.8 I think Teva is a perfect9 example of what I'm talking about. What10 was the public subsidy involved in11 bringing Teva to Philadelphia?12
Two and a18 half million dollars. And the19 alternative for them was looking just20 outside the City lines, because they21 already have --22
And the main25 93 10/5/11 - COMMERCE - BILL 110557, ETC.1 difference between just outside the City2 lines and the City lines, other than our3 land is slightly cheaper, is what?4
The main5 difference in that particular instance6 was the process and the time it would7 take to get the entitlement on the land.8 They were facing pretty significant9 difficulties in Bucks County related to10 road improvements and opposition from the11 local community that they did not receive12 in Philadelphia. They had both the13 infrastructure and the support.14
I spoke to15 people from the company during that16 process, and one of the main factors17 involved in their decision was the tax18 burden in Philadelphia versus outside19 Philadelphia. Would you agree that that20 was a major consideration of theirs in21 your discussions with them?22
I'm not sure23 what you're saying. If you're saying --24 you were saying before you thought the25 94 10/5/11 - COMMERCE - BILL 110557, ETC.1 tax burden was heavier here.2
Well, but8 RACP is a state grant. It could have9 gone to Bucks County as well, but there10 were additional expenses in Bucks County11 that we didn't have, mostly related to12 infrastructure.13
Well, okay.14 We're not going to agree on that. The15 point is, they came to Philadelphia and16 they came with subsidy.17
Any more20 questions for this panel?21 (No response.)22
Thank you,25 95 10/5/11 - COMMERCE - BILL 110557, ETC.1 sir.2
Our next3 panel is Marianne Bellesorte and Rebecca4 Foley.5 (Witnesses approached witness6 table.)7
Good morning,8 everyone. My name is Marianne9 Bellesorte, and I'm the Senior Director10 of Policy for PathWays PA, a non-profit11 organization serving 6,000 women and12 families in the Greater Philadelphia13 area. 1 cost-effective, quality goods and2 services. Yet, jobs without access to3 paid sick days offer neither of these4 options. 11 Without paid sick days, the12 City also loses money in payments made13 for health services that otherwise might14 not be needed. Workers without access to15 earned sick days are twice as likely to16 go to the emergency room to get medical17 care. The cost of emergency services add18 up quickly. Just one preventable19 hospitalization for asthma can cost up to20 $13,000. 2 The City also risks a public3 health crisis by not taking action on4 paid sick days. As long as two in five5 Philadelphians lack earned sick days,6 five out of five working Philadelphians7 will be exposed to illnesses in the8 workplace. 15 Instead of losing money under16 this amendment, it actually represents a17 way to save money. First, paid sick days18 are not a pre-determined19 one-size-fits-all plan. Workers earn the20 time, and businesses choose how to21 implement the time. 1 competitiveness. In fact, San Francisco,2 a city that offered paid sick days since3 2007, was just named by4 PricewaterhouseCoopers as the third best5 city for business opportunity in the6 world. Businesses continue to operate in7 San Francisco, even though they have8 different regulations than surrounding9 municipalities, just as businesses10 continue to operate in Philadelphia under11 our Wage and Benefits Standard. 50 per hour, a single18 business offering paid sick days under19 this bill could save nearly $2,000 a20 year. These savings come from increased21 productivity and decreased turnover. 1 In addition to these saving2 estimates, we have support letters from3 non-profit City contractors stating that4 this amendment will not affect their5 ability to provide services or affect the6 cost of those services. I will add that7 PathWays PA is also a non-profit8 contractor with the City. 4 When families struggle to reach5 the standard, they may end up not paying6 their electric bill, running up their7 credit cards past the breaking point or8 taking medicine infrequently to make a9 prescription last longer. 16 In looking at the facts around17 paid sick days and their potential18 effects in Philadelphia, the fiscally19 responsible choice for the City is to20 move forward with this amendment. 5
Thank you6 for your testimony.7 Please identify yourself.8
Thank you very much12 for having me here today, Chairman Goode13 and members of the Committee on Commerce14 and Economic Development. I will be15 testifying in support of Bill No. 1 Philadelphia region, where I serve as2 Director of Public Policy. 11 In Philadelphia, 40 percent of12 workers do not have a single earned sick13 day to take care of themselves or their14 loved ones. Women continue to be15 overrepresented in these jobs that are16 less likely to offer earned sick days,17 the low-wage jobs. Further, industries18 that are often dominated by women are19 among the least likely to provide earned20 sick days. For example, 72 percent of21 child care workers and 73 percent of22 food-service workers have no access to23 earned sick days. 1 and for many women, having a sick child2 or elderly parent means losing a day's3 pay or their job altogether. 8 I'm sure it will come as no9 surprise to you that half of working10 mothers miss work when their children get11 sick, and of these working mothers, half12 do not get paid when they take this time13 off. The problem becomes worse for women14 in poverty. 18 Many of the clients Women's19 Way's funded agencies serves are working20 mothers in low-wage jobs just trying to21 make ends meet. These women struggle22 daily to meet their basic needs and the23 needs of their family. 1 put on the table or paying rent or the2 heating bill. 5 In addition to having a6 significant impact on workers' economic7 security, earned sick days will also8 greatly benefit businesses. Research9 shows that employers who offer earned10 sick days have higher productivity,11 reduce absenteeism and higher employee12 loyalty, which reduces turnover. 16 And I won't go -- Marianne did17 a very good job at covering all the18 health savings. 19
Thank you20 both for your testimony. I only have one21 question. Last year the voters22 overwhelmingly confirmed City Council's23 authority on this issue. You also24 conducted a poll on earned sick leave.25 106 10/5/11 - COMMERCE - BILL 110557, ETC.1 Could you just state for the record what2 the results of that poll were?3
I don't have4 the poll directly in front of me at the5 moment, but I will say that a very high6 percentage of Philadelphians, I believe7 around 70 percent, were in support of8 paid sick days.9
Thank you.10 Any more questions for this11 panel?12 (No response.)13
Our next17 panel is Denise Earley and Ed Donaghy.18 (Witnesses approached witness19 table.)20
Good morning,21 Chairman Goode and members of the22 Committee on Commerce and Economic23 Development. 1 Chamber of Commerce works to attract,2 retain and grow jobs for companies and3 residents of the region. We believe that4 future job growth in our region will be5 driven by the for-profit and non-profit6 sectors, not from increased government7 payrolls. In an effort to advance this8 agenda, the Chamber has recently9 developed a list of principles which we10 believe will foster job growth and11 competitiveness. We plan to use these12 principles as a tool and guide for13 assessing legislative measures at all14 levels of government. 21 These regulations should be appropriate22 for the level of government enacting23 them. 13 An educated workforce is key to14 the long-term success of the business15 community and acts as a catalyst to16 attract and retain businesses in the17 region. It is important for us to be18 active in a significant evaluation of the19 effectiveness and efficiency of public20 education as it applies to producing a21 quality education for students as well as22 a job-ready workforce. 1 along with TD Bank and Work Ready2 Philadelphia, sponsors paid internships3 for teens living in Philadelphia and4 Chester. In its fifth year, the5 initiative encourages companies of all6 sizes to change the life of a young7 person by providing them a job. 10 Our region should strive to11 provide efficient services with the12 lowest possible tax rates. 20 And quality of life issues21 impact both the business environment as22 well as serve as a positive factor in23 talent recruitment. 1 the arts and culture and tourism sectors,2 which are proven job creators for large3 portions of our population. 7 In a perfect world, all8 employees would be able to earn paid sick9 day benefits. Let me congratulate the10 sponsors of Bill 080474-AA for their11 diligence and untiring efforts to pass12 this legislation. 17 The bill before us, Bill18 110557, serves as a pro worker19 contract-based alternative to that bill20 which covers full-time, non-seasonal21 employees. 1 universe of employers than Bill2 080474-AA. However, with no surrounding3 counties implementing these regulations,4 clearly Philadelphia is put in a less5 competitive position. Should companies6 be required to adhere to the provisions7 of this bill, any increased cost will be8 passed through the company, potentially9 leading to increased costs for City10 contracts. 22
Thank you,23 Ms. Earley. The first question is,24 unfunded mandated for who?25 113 10/5/11 - COMMERCE - BILL 110557, ETC.1
It can't be3 both an unfunded mandate and cost the4 City. You actually have to choose.5 Either the City is going to assume the6 cost or the business is going to assume7 the cost, but you can't say that both are8 going to happen. Would you agree with9 that?10
I think11 employers -- it would be an added cost12 for employers if they had to pay sick13 time to their employees.14
Okay. The15 Chamber is aware this bill only covers16 businesses that benefit from City17 support. Does the Chamber support any18 specific job quality standards for19 employees of City-supported contractors?20
Does the23 Chamber support any job quality standards24 for employees of City-supported25 114 10/5/11 - COMMERCE - BILL 110557, ETC.1 contractors?2
Job quality,9 though. I understand the quantity of10 jobs. Are you concerned about the11 quality of jobs? And what is the Chamber12 doing in terms of public policy on the13 issue of quality of jobs?14
That's17 quantity. That's not quality. A good18 job that pays a living wage with19 benefits. The Chamber has no specific20 position on that?21
Does the24 Chamber offer earned sick leave for its25 115 10/5/11 - COMMERCE - BILL 110557, ETC.1 employees?2
Do you4 expect the Chamber's sick leave policy to5 change as a result of the public policy6 position you're taking today?7
So the9 Chamber will continue to offer earned10 sick leave to its employees?11
I do not know the15 cost of this bill. I think it's hard to16 get your arms around the cost of it, only17 that it could potentially, as I said in18 my testimony, add increased cost to City19 contracts.20
Has the21 Chamber ever tracked the cost of the22 original ordinance from 2005?23
Not that I'm aware24 of.25 116 10/5/11 - COMMERCE - BILL 110557, ETC.1
So in fact2 you don't have any hard data for us3 today, and this bill could actually be4 cost neutral?5
You don't8 have any hard data for us, and in fact9 this bill could be cost neutral?10
Do you have12 any testimony on the economic opportunity13 bill?14
Oh, no,19 Councilman, I do not. I only have a20 statement on one other bill that's being21 considered today.22
But you23 don't have any testimony on the economic24 opportunity bill?25 117 10/5/11 - COMMERCE - BILL 110557, ETC.1
Good morning. My6 name is Ed Donaghy. I'm with The Hankin7 Group, a regional developer and property8 management firm. 1 the tri-state area. In the City of2 Philadelphia alone, BOMA member buildings3 provide approximately 44 million square4 feet in office space for over 200,0005 building occupants and employees. 9 As a civic-minded organization,10 BOMA Philadelphia endorses and promotes11 those courses of action that will help12 create and maintain a safe, positive and13 forward-looking environment for all who14 live and work in the City and throughout15 the Greater Philadelphia region. 22 While Bill No. 1 legislation, both in terms of its scope2 and in terms of its economic impact on3 the City and the region. As currently4 written, the Philadelphia 21st Century5 Minimum Wage and Benefits Standards is6 ambiguous in terms of who is an affected7 party. 16 BOMA has attempted to receive17 clarification as to the affected parties,18 as well as the types of City incentives19 which would trigger the 2st Century20 requirements. 4 From a business perspective,5 Bill No. 110557 stands to become yet6 another impediment to local economic7 development. To the extent that it8 inhibits the preservation of existing9 jobs as well as the creation of new jobs,10 this legislation will adversely affect11 the very workers it seeks to assist. 14 The economic realities of15 recent years have impacted us all,16 individuals and businesses alike. 12 Furthermore, City programs and13 incentives that have been instituted to14 encourage development should be allowed15 to do just that. serves to increase the City's cost of2 doing business. Placing these additional burdens on firms5 which conduct business with the City6 means only one thing, higher cost of7 service. 12 You can't keep raising real13 estate taxes and other fees to fund the14 City's increased costs of business15 without having a deleterious impact to16 the City's revenue streams. 3 BOMA Philadelphia and its4 member buildings have a vested interest5 in seeing the City move forward and to6 continue to create a truly vital living7 and working environment. The public and8 private sector should collectively be9 endeavoring to create a market that is10 flush with opportunity and full11 employment for all. 19
Thank you20 for your testimony, Mr. Donaghy. You are21 Chair of BOMA?22
Can you tell24 me which of your members are covered25 124 10/5/11 - COMMERCE - BILL 110557, ETC.1 under this bill?2
That's one of our3 questions. We still don't know. We're4 looking for an answer from the --5
I can give6 you the answer to that question. None of7 your members are covered under this bill.8
Okay. If we have9 representatives that are tenants of our10 buildings, are they included?11
No one is12 covered under this bill until July 1st,13 2012. And so if you don't receive any14 City benefits before July 1st, 2012, you15 are not covered. So currently none of16 your members are covered under this bill.17
We were waiting18 for that answer from the Law Department.19
So do you20 expect any of your members to be21 receiving City support after July 1st?22
Moving forward,23 any one or multiple developer members of24 our organization can receive at some25 125 10/5/11 - COMMERCE - BILL 110557, ETC.1 point.2
But you3 don't anticipate, you don't know that4 they're going to receive money. There's5 no way to know that they're going to6 receive City money after July 1st?7
At that time, no,8 but I would assume that at some point9 moving forward, with the expansion of the10 economy and everything, that there will11 be some sort of incentive programs that12 somebody in our organization will reach13 out to the City of Philadelphia and look14 to use.15
So you are16 aware of the fact that 1700 Market just17 sold, aren't you?18
And you're20 aware of the fact that it sold for 14421 million?22
This24 original ordinance was passed in 2005.25 126 10/5/11 - COMMERCE - BILL 110557, ETC.1 We have amended it on several occasions.2 Did that stop the sale of 1700 Market?3
Does BOMA10 offer earned sick leave to its employees?11
Mr. Donaghy,15 I want to thank you for your testimony.16 BOMA clearly, based on previous testimony17 before City Council, recognizes that the18 impediment to job creation and business19 attraction in the City of Philadelphia is20 highly related to its tax structure. And21 so I just want to thank you for that22 previous testimony.23 Ms. Earley, I was struck in24 your testimony that you are creating a25 127 10/5/11 - COMMERCE - BILL 110557, ETC.1 comparison in terms of job creation in2 Philadelphia with the surrounding3 counties, and in your testimony you said4 that because the surrounding counties5 don't have this same sort of regulatory6 burden for people doing business with7 those counties and the municipalities8 they're in, that it would cause jobs to9 go to the surrounding counties. I'm just10 interested on the Chamber's perspective11 on what the number one difference in12 terms of -- the number one, two and three13 differences between people being willing14 to come into the City of Philadelphia15 versus the surrounding counties, because16 you drew that comparison.17 So in your view, what's the18 number one thing that makes Philadelphia19 less competitive vis-a-vis the20 surrounding counties?21
Well, Councilman,22 I think the tax structure is probably23 right up there as number one.24
Thank you.25 128 10/5/11 - COMMERCE - BILL 110557, ETC.1
Thank4 you, Mr. Chairman.5 Very quickly, Mr. Donaghy, you6 refer in your testimony many times about7 how this bill would ratchet up costs,8 lose jobs, that kind of thing. Do you9 have any figures to back that up?10
We don't have any11 hard data. It's just more of a12 philosophy of if you're putting more13 burden on an owner, that there is going14 to be some give and take and they have to15 make up for that at some point.16
Because17 in Ms. Bellesorte's testimony, she has a18 chart here, and you could disagree with19 it, but at least there's some figures20 here that say that that would not be the21 case. So maybe you could look at that22 and see if you have anything to counter23 that. Because I'd be interested to know.24 Because I know that is generally thrown25 129 10/5/11 - COMMERCE - BILL 110557, ETC.1 out, it's going to cost, it's going to2 cost, it's going to cost, people are3 going to leave, businesses aren't going4 to come in, but it doesn't seem to be any5 data that people present really backing6 that up, that I could see. So I'd just7 like to hear that, because there seems to8 be some data both projected here and in9 other cities showing that that's not the10 case, that that's the fear but not the11 case. It's not backed up in real12 numbers. So I just throw that out there13 that maybe you can --14
I haven't seen15 her charts, but it's more of a philosophy16 of understanding the building owners that17 we have and talking to them and hearing18 their responses. If I have more costs,19 I'm going to have to lose a person or20 raises aren't happening next year. We've21 seen that across our whole organizations22 over the last couple years with the23 economy that we've had. The development24 and real estate economy, it's been hit25 130 10/5/11 - COMMERCE - BILL 110557, ETC.1 pretty hard.2
Okay. I3 won't go back and forth, but obviously4 the counter argument that if people are5 provided the right benefits, they're more6 productive, respect the job more, that7 kind of thing. And that has been shown8 in other cities. So I'll leave it at9 that.10 Thank you, Mr. Chairman.11
Thank you.15 I don't have any questions for16 these witnesses. I do have a general17 question. I don't know who can answer18 this for me, and, that is, if a business19 has a standard that is above the standard20 that is required by this bill in terms of21 number of days of sick leave earned, do22 they have a record-keeping requirement to23 demonstrate that or is there no24 record-keeping requirement as long as25 131 10/5/11 - COMMERCE - BILL 110557, ETC.1 they have a minimum standard that is in2 excess of this bill? Because that's been3 raised by several people as a concern.4
There is no5 record-keeping requirement within this6 bill. There's a separate record-keeping7 requirement associated with the law8 that's already on the books and those9 people are covered by it. The only10 provisions of the previous bill that are11 contained within this bill relate to the12 amount of days that can be earned.13 In the bills I originally14 introduced, they used the term15 "equivalent." So there was some16 misunderstanding about whether equivalent17 meant that all the provisions of the18 previous bill applied or just a number of19 days that could be earned. The amendment20 clarifies the fact that this only applies21 to the number of days that can be earned.22 So those people who are covered under the23 existing law will be required under this24 new bill, if it's enacted, to provide25 132 10/5/11 - COMMERCE - BILL 110557, ETC.1 those number of sick leave days.2
And that3 will just be their corporate policy and4 there will be no record-keeping policy5 with respect to that?6
Yeah. It7 does not speak to how it should be8 accrued or how it should be used or how9 it needs to be recorded, other than10 what's in the existing law as it is.11
Are there14 any other questions for this panel?15 (No response.)16
Thank you17 very much.18 Our last panel slated is Wendy19 Chun-Hoon and Andrea Lemoins.20 (Witnesses approached witness21 table.)22
1 today in support of the proposed earned2 sick leave standard. My name is Wendy3 Chun-Hoon. I am here representing Family4 Values @ Work, a national network of5 cities and states working to win paid6 sick days and other policies that support7 families' economic success. 15 Philadelphia's proposal is part16 of this national movement to bring17 workplace policies in sync with the18 realities of today's workforce and the19 values of the public. 1 advocates for children, seniors, women2 participate in each of our cities' and3 states' coalitions. 10 We hear a lot about family11 values and personal responsibility, and12 yet in the United States today, being a13 good family member can cost you your job14 or career opportunity, health or economic15 security. And being a conscientious16 employee can jeopardize loved ones. 23 When the recession hit, family stress24 levels skyrocketed. 7 Every day workers who need a8 day off to take care of a loved one are9 told if you don't get to work, you will10 lose this job. 19 Fortunately, most kids don't20 drag themselves to school with broken21 bones, they don't get leukemia or some22 other life-threatening illness, but they23 do all get the flu. 9 So I believe this is a story10 about risk. Every day parents face the11 dilemma of sending their kids to school12 sick, knowing that they will infect other13 kids. 21 Over the past 30 years, the22 average worker has seen the value of23 their wages decline, their job security24 and job-related benefits eroded. 3 According to a recent study,4 the loss of a few days' pay for low-wage5 workers can equal a month's worth of6 groceries. 15 Multiple economists have pointed out that16 job retention policies like paid sick17 days help reduce unemployment and18 strengthen the economy. 1 universally. And here's also what we2 know. There's been several questions3 about this. 7 This policy proposed is8 important. We have evidence from San9 Francisco, who implemented this policy,10 that shows that the predictions of higher11 costs and job loss actually didn't12 happen. San Francisco in fact13 outperformed the five other surrounding14 counties. 5 percent15 despite a recession, and this was true16 for big businesses and small businesses17 alike. 4 I'll just close by saying that5 work cannot pay if it doesn't last, and6 it can't last if it jeopardizes families7 and kids. Passing a law in Philadelphia8 that allows workers at companies who9 receive contracts or subsidies from the10 City to earn paid sick time is a smart11 way to mitigate this risk. We need to12 make work work for families. 23
Thank you24 for your testimony.25 140 10/5/11 - COMMERCE - BILL 110557, ETC.1 Ms. Lemoins.2
Hello. Thank you3 for letting me speak today before all of4 you. My name is Andrea Lemoins and I'm5 the Co-Coordinator of the Restaurant6 Opportunities Center here in7 Philadelphia. We are a national8 non-profit. We just started here in9 Philly. We are a non-profit focused on10 making the restaurant industry11 economically sustainable for owners and12 for workers. 21 In my past life, I was a pastry22 chef. 1 I've worked at some of your favorite2 restaurants, and I have served many of3 you. I've actually served Mayor Nutter4 once for his birthday. I made him a5 chocolate cake and served him, while two6 of my co-workers were sick and sneezing7 in the kitchen. 11 I have also served Governor12 Rendell. I have served him a pecan13 cheesecake at a time when I was actually14 sick with pneumonia. I could not take15 the time off. 18 Now, this sounds very crazy,19 but it is extremely -- it happens all the20 time in restaurants, in the food-service21 industry, period. Restaurants are no22 different than any other place of23 employment. same thing at those businesses. I want to let people know just4 because that eat at a high-end5 restaurant, just because you spend $1006 or more on a meal does not mean that you7 are paying for healthy workers. 14 I'm sure that many of you have15 heard from business owners saying that16 they cannot afford to supply their17 employees with paid sick leave due to our18 current recession. However, when I saw19 the list of food-service businesses who20 are contracted out by the City, I notice21 that many of them already provide some22 kind of paid time off. 1 several of them already supply their2 employees with paid time off and that3 this bill will have little impact on4 them. S. will6 tell you that the food industry itself is7 booming. S. 13 workforce. 16 Food-service sales are expected to reach17 a record $604 billion and post positive18 growth in 2011. 1 Philadelphia, yes, we are in a deep2 recession. 9 I'd like to say a vote to pass10 this bill is a vote for job security for11 low-wage workers. 83, and most kitchen and18 staff are paid minimum wage generally to19 come in the doors. So thank you so much.
Thank you9 for your testimony.10 Any questions for this panel?11 (No response.)12
Thank you13 very much.14 Is there anyone else to testify15 on this bill?16 (No response.)17
Thank20 you, Councilman. I too want to echo some21 of the comments that were made earlier22 today, and thank you for allowing me the23 opportunity to co-sponsor this. I know24 there's been a lot of debate about the25 146 10/5/11 - COMMERCE - BILL 110557, ETC.1 stats and the numbers. I think this bill2 takes us to a place where we could work3 with the Administration and we can begin4 documenting the facts versus the5 perceptions. It would allow the6 Administration to be prudent in issuing7 waivers for those companies that we8 understand have sick policies and have9 standards but, at the same time, sets a10 bar for anyone who wants to do business11 in the City of Philadelphia that we12 expect some minimum standards in paying13 people not only a living wage but14 affording them the opportunity for sick15 leave.16 So with all of the debate and17 all of the work that Bill Greenlee and18 Councilman Clarke did with the previous19 version of this bill, I think government20 sometimes has to step in and begin to21 pose the questions and use its hammer and22 its economic thrust to get us to a place23 where we can document and get away from24 the misperceptions that exist.25 147 10/5/11 - COMMERCE - BILL 110557, ETC.1 I want to thank you for2 providing us this opportunity and this3 open dialogue. I think being open for4 business as a city and providing5 standards of living wage and sick leave6 are not conflicting statements, but they7 are a testament to providing real8 opportunities for Philadelphia's working9 class and, in many cases, underemployed10 population. So thank you, Chairman.11
Thank you,12 Councilwoman.13 We will move from our public14 hearing into a public meeting.15 The Chair recognizes16 Councilwoman Brown for a motion on the17 amendment to Bill No. 110557.18
Thank you,19 Mr. Chairman. I move that Bill No.20 110557 be amended.21 (Duly seconded.)22
All in23 favor?24 (Aye.)25 148 10/5/11 - COMMERCE - BILL 110557, ETC.1