COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON PARKS, RECREATION AND CULTURAL AFFAIRS - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, June 8, 2005, 9:55 a.m. - - - 050016 - An Ordinance amending Chapter 10 19-1400 of The Philadelphia Code, entitled "Realty Transfer Tax," by excluding from the tax certain sub-subleases of property by the Fairmount Park Historic Preservation Trust, Inc. ("Trust") pursuant to a Master Sublease Agreement between the Philadelphia Authority for Industrial Development ("PAID") and the Trust, and pursuant to a Master Lease Agreement between the City and PAID, all as authorized by Bill No. 16 505 (approved June 8, 1993), under certain terms and conditions. V A R A L L O Incorporated Litigation Support Specialists 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 050508 - An Ordinance authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to purchase from the Philadelphia Authority for Industrial Development all of its right, title and interest, in a parcel of real estate known as part of the Kensington & Tacony Industrial Tract; and amending Title of The 7 Philadelphia Code, entitled "Parks and Recreation," to place the parcel 8 under the care and jurisdiction of the Fairmount Park Commission upon 9 completion of the conveyance of the parcel to the City; all under 10 certain terms and conditions. 11 050509 - An Ordinance authorizing the 12 Commissioner of Public Property and the Executive Director of the 13 Fairmount Park Commission, on behalf of the City of Philadelphia, to 14 enter into an agreement to lease to Friends of Father Judge High School, 15 Inc., for further sublease to the Archdiocese of Philadelphia, approximately .398 acres of ground located east of the intersection of Rowland and Solly Avenues, and, in consideration thereof, further authorizing the Commissioner of Public Property and the Executive Director of the Fairmount Park Commission, on behalf of the City of Philadelphia, to enter into an agreement to sublease from the Friends of Father Judge High School, Inc., approximately .40 acres of ground located east of Rowland and Solly Avenues, under certain terms and conditions. 3 PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN BLONDELL REYNOLDS-BROWN COUNCILMAN W. WILSON GOODE, JR. COUNCILWOMAN MARIAN B. TASCO COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN JACK KELLY 4 Parks, Recreation - 6/8/05
Good morning. We have a quorum for the City Council Committee on Parks, Recreation and Cultural Affairs public hearings to hear testimony on Bill Nos. 050016, 050508, and 050509. With us at this hearing this morning is Council President Anna C. Verna, Vice Chairman of the committee W. Wilson Goode, Jr., and committee member Councilman Frank DiCicco. We will now ask the clerk to read the title of Bill No. 050016.
050016, an ordinance amending Chapter 19-1400 of the Philadelphia code, entitled "Realty Transfer Tax," by excluding from the tax certain sub-subleases of property by the Fairmount Park Historic Preservation Trust pursuant to a Master Sublease Agreement between the Philadelphia Authority for Industrial Development (PAID) and the Trust, and pursuant to a Master Lease Agreement between the City 5 Parks, Recreation - 6/8/05 and PAID, all as authorized by Bill No. 3 505 approved June 8, 1993, under certain terms and conditions.
Thank you. I introduce Bill No. 050016 which will allow the properties held through the Fairmount Park Historic Preservation Trust to be leased for longer than 30 years and be exempt from the real estate transfer tax. Currently if a lease is for 30 years or longer, real estate transfer tax must be paid. FPHPT is a nonprofit created by the City to ensure the well-being of many of our city's park structures, houses, and mansions in Fairmount Park. They actively look for tenants that will pay for the maintenance and preservation of these historic buildings, which we know to be quite expensive. While the Trust does a commendable job, many of these buildings remain vacant. One impediment is that prospective tenants cannot take advantage of the federal historic 6 Parks, Recreation - 6/8/05 preservation credits and dollars that require ownership or lease terms longer than 30 years because it triggers a real estate transfer tax which would wash out any benefit from the federal government. The best way to describe this bill is that we are not receiving tax dollars on the properties currently. No leases have been made for over 29 years due to the real estate transfer tax issue. However, if the bill does pass, we, the City, will be in a better position to obtain federal monies and credits for much needed preservation of these structures. I hope you will join me in supporting this bill, which is smart for the city, smart for our parks, and smart for historic preservation. We will now bring up testifiers. And I'm pleased to indicate Councilwoman Marian Tasco and Councilman Jack Kelly have joined us for this committee here. We please now invite up all of 7 Parks, Recreation - 6/8/05 our testifiers: Matt Rader, executive director of the Fairmount Park Historic Preservation Trust; Karen Borski, executive director of the Fairmount Park Commission; and Nancy Kammerdeiner, commissioner for the revenue department. You may be seated. We will start with Matt Rader, who before your testimony state your full name for the record.
Good morning. My name is Matthew Rader. Thank you, Councilwoman Brown, and other members of the committee for introducing this ordinance and inviting us to speak. I am the executive director of the Fairmount Park Historic Preservation Trust. As the City's partner for historic preservation in Fairmount Park, the Trust works with private nonprofit and for profit organizations to lease, invest in, and revitalize the park's historic buildings to benefit all park users. Created by City Council in 1993, the Trust's 8 Parks, Recreation - 6/8/05 long-term leasing program has revitalized buildings citywide for over $10 4 million in rehabilitation in operation of 5 historic buildings in Fairmount Park. 6 With the assistance of the proposed 7 legislation, the Trust intends to grow 8 that number to over $20 million within 9 the next three years. 10 The Trust's leasing program 11 authorized by City Council Bill 505 in 12 1993 provides a streamlined user-friendly 13 system for private organizations to 14 invest in publicly owned assets in 15 Fairmount Park. Leasing benefits the 16 city by relieving the Fairmount Park 17 Commission of the capital expenses 18 operating buildings, generating new 19 activities and amenities in diverse 20 sections of the park at no cost to the 21 city, and creating opportunities for 22 entrepreneurs to develop the park's 23 historic buildings to encourage tourism, 24 create jobs, and revitalize neighborhoods. 9 Parks, Recreation - 6/8/05 If currently leased properties returned to the city's care, we can estimate the Commission would require more than a million dollars to maintain the level of care provided by lessees. The proposed legislation will create a significant incentive to invest in Fairmount Park and reinforce the Commission's and the Trust's dedication to preservation of Fairmount Park demonstrated by City Council Bill 505. With the proposed legislation and other improvements currently underway, the Trust intends to generate an additional $10 million in investment in the park's historic resources, create over $200,000 in rent over the years, and transform some of the park's most distressed buildings into vital activity centers and contributors to the regional city economy. Thank you for considering this legislation. I look forward to working with the City of Philadelphia. 10 Parks, Recreation - 6/8/05
Thank you for your testimony. Any questions for this witness? Councilman Frank DiCicco. COUNCILMAN DiCICCO: Thank you. Good morning. Is your entity the entity that's responsible for negotiating the lease or is it a cooperative effort between the Park Commission and the Trust? How does that all come about?
The Trust is responsible for negotiating and managing the leases. They're approved by the park Commission And they're actually authorized through a three-tier leasing structure through which the City leases buildings in the park to PAID, PAID leases to the Trust, and the Trust subleases to the end user. That's the system set up by the original Council bill. COUNCILMAN DiCICCO: There are a number of developers, in fact, two or 11 Parks, Recreation - 6/8/05 three in the room this morning are here for our next committee, the rules committee hearing, concerning zoning matters with development along the river. One developer I don't see in the room yet has a proposal to develop a parcel that is adjacent to Penn Treaty Park. With the interest in developing along the river, there's also a concern from the community groups and the City to provide public access so that all these don't become gated communities and the public is basically cut off from their river. If the developer of that property adjacent to Penn Treaty Park wanted to provide that access -- because currently under the plan that I see it looks almost impossible for the public to have access without really going through the condominium association property to get there, but there may be a way to create an easement between Penn Treaty Park and the development site with a partial easement or some sort of lease -- could 12 Parks, Recreation - 6/8/05 that be arranged?
Absolutely. Actually, this question was just raised this morning. The Trust could potentially manage the easement. The other situation could be that the developer could donate the land to the City and sign a management agreement with the Park Commission, But either of those scenarios could work quite well. COUNCILMAN DiCICCO: And the Trust would be the first step in that process?
If it was an easement, I assume the Trust could be the holding entity. COUNCILMAN DiCICCO: If the developer needs to approach someone about getting this discussion underway, who should they contact?
Thank you. 13 Parks, Recreation - 6/8/05 Any other questions? (No response.)
Please, Karen Lloyd Borski, executive director of the Fairmount Park Commission.
Good morning. My name is Karen Lloyd Borski. I'm the director of the Fairmount Park Commission and pleased to be here to testify today in support of Bill 050016. Since 1993, the Park Commission has worked closely with Fairmount Park Historic Preservation Trust to attract private entities to lease and invest in the park's historic buildings. Each long-term lease relieves the Commission of significant capital and operating costs associated with managing a historic building. The proposed legislation will attract investment to the park's most threatened historic buildings by limiting financial obstacles to securing a lease longer than 30 years. This legislation is a critical step in 14 Parks, Recreation - 6/8/05 the Commission's continuing efforts to secure private investment to leverage City investment in managing and maintaining Fairmount Park. I request a suspension of the rules for the next session of Council. Thank you.
We thank you for your testimony. Let me seize the moment and personally congratulate you both for your stewardship and leadership at the Philadelphia Fairmount Park. Your good work has not gone unnoticed.
Nancy Kammerdeiner, commissioner of the revenue department.
Good morning. I'm Nancy Kammerdeiner, revenue commissioner. I provided copies of written testimony and much of what I have in there has already been mentioned so 15 Parks, Recreation - 6/8/05 I'll just skip through to a few that have not gone on record already. By agreeing to forego some limited likely revenue, the City would provide an incentive for potential tenants to pursue lease agreements that will ensure preservation of City-owned property. Though it's not possible to provide a precise estimate of the number and value of the sub-sublease transactions that might ultimately be exempted as a result of this bill, I did ask the Trust if they could give me an idea how many possible transactions there would be and I was told there would be 10 to 15 properties that might possibly come into this area. But we have to remember that this might not happen at all if the long-term leases would not be available. Not only would these tenants preserve the properties, but their activities would also generate other taxes both during construction and future operations. Those would be taxes that are not currently available to the City today. 16 Parks, Recreation - 6/8/05 So you need to balance that against revenue that might not otherwise come in. And so the situation here is we would probably not forego much revenue but actually generate revenue for the City. That's my testimony. I'll be happy to answer any questions.
Any questions for any witnesses? Councilman Frank DiCicco. COUNCILMAN DiCICCO: Thank you, Madam Chair. The 10 to agreements, 15 leases, what have you, do you have a list of those?
I do not. I was just told that would be the maximum number of properties that are under control of the Trust that might attract a long-term lease that could come in. That doesn't mean that any or all would go in that direction.
There's one negotiation currently pending which would 17 Parks, Recreation - 6/8/05 be affected and I can give that to you. I can also provide you a list of all the properties. COUNCILMAN DiCICCO: If you would provide a list to the Chair, that would be helpful. That would be very helpful.
You say 10 to 15 on line. That is out of the total of how many historic structures in the park currently?
Thank you, Madam Chair. The 10 to 15 of these historic buildings, how are they being maintained today or are they being maintained?
Any building not in a long-term lease in Fairmount Park is under the direct management of the Park Commission and in many cases lack active 18 Parks, Recreation - 6/8/05 uses. And the park commission's very limited in its ability to provide maintenance, but they're being maintained.
What would you say the condition of these properties are?
I would just like to know what type of I guess people who would be interested in taking over these properties.
We have a pretty wide range of potential candidates. Currently, all tenants are nonprofit organizations ranging from professional groups to even actually the School District has a property at Fox Chase Farms in the northeast. Tenants that we're looking at that would be affected by this legislation are potentially for profit tenants, developers that might be interested in investing in these buildings and subleasing them to 19 Parks, Recreation - 6/8/05 nonprofits as a way of helping us to bring capital into the park. We've looked at bed and breakfast operators and a variety of uses, each use subject to the neighborhood surrounding it. We take it to the public to make sure the use of this building is actually a positive improvement rather than any kind of liability to the neighborhood.
As I said, we have one deal currently pending. And we are in the process of marketing our properties. We're going to enhance the leasing program and create more incentives. These are the properties that are requiring very significant investment, a million dollars or more in most cases, so the incentives have to be stronger as well.
Thank you. I just want to make one comment. I'm sorry to see that Ms. Borski will be 20 Parks, Recreation - 6/8/05 leaving. You're going to be leaving as executive director of the Fairmount Park?
I'm sorry to see you go. You're doing a tremendous job. Thank you.
So there is a process in place for community input?
We take every Trust proposal -- there's a proposal system. Ideas come into the Trust. We take it to the neighborhood organizations, seek written approval, public meeting. Then it also goes to a community-based meeting of the Trust that reviews the issues and then Fairmount Park Commission. So there's a number of checks in place to make sure everything is above board.
Very good. Anyone else to testify on this bill? (No response.)
21 Parks, Recreation - 6/8/05 Thank you very, very much. That concludes testimony on Bill No. 050016. Thank you very much. We will now take testimony of Bill No. 050508. Will the clerk please read the title of the bill.
Bill No. 050508, an ordinance authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to purchase from the Philadelphia Authority for Industrial Development all of its right, title and interest in a parcel of real estate known as part of the Kensington & Tacony Industrial Tract; and amending Title 15 of the Philadelphia Code entitled "Parks and Recreation" to place the parcel under the care and jurisdiction of the Fairmount Park Commission upon completion of the conveyance of the parcel to the City, all under certain terms and conditions.
Thank you. We will now ask Carolyn 22 Parks, Recreation - 6/8/05 Wallis, director of the Southeast Pennsylvania Environmental Council. Welcome. Please be seated.
Good morning, Councilwoman Brown. I'm Carolyn Wallis for the Pennsylvania Environmental Council and I am pleased to be here today to testify in favor of Bill 050508 specifically authorizing the City of Philadelphia to acquire approximately a half an acre parcel of the Conrail line known as Kensington & Tacony Industrial Tract from the Philadelphia Authority for Industrial Development. This abandoned tract will be redeveloped into a pedestrian and bike trail on the Delaware riverfront. This is part of a large revision for a riverfront corridor providing public access for city residents along 10 miles of the river. This section between Robbins and Levick Street just south of the Tacony-Palmyra Bridge is in the middle of this trail having been purchased by PAID from 23 Parks, Recreation - 6/8/05 Conrail over a decade ago for a project that never came to fruition. The Fairmount Park Commission and PAID are here today if anyone has any questions of them. I just want to add, and I've given written testimony, this trail is a key component of the Delaware River greenway that may also include public marinas, active recreation, civic event spaces, habitat restoration, and parks along the length of the riverfront, and a green infrastructure is key to creating the river becoming the front door to redevelopment of the major vacant parcels into new communities for city residents and others we hope will move into the city instead of going to open spaces in the suburbs. We have been involved as Pennsylvania Environmental Council for over ten years in work on the greenway corridor working to get funding for trail acquisition, design, and construction, 24 Parks, Recreation - 6/8/05 which we're happy to say is in place. I am pleased to answer any questions at this time and thank you for your consideration of this bill.
You're welcome, Ms. Wallis. Any questions for this witness?
I have one question. You say you have an agreement with Conrail?
I think it's tremendous that I hear something favorable coming from our rail lines because we're fighting them. CSX, I just hope somewhere along the line they get 25 Parks, Recreation - 6/8/05 the same -- we can get the same cooperation from them in other areas that we're trying to develop as you are into making this a great thing for the people of Philadelphia to use as recreation.
Actually, the other transaction is a charitable donation from CSX and Norfolk Southern of the 9.26 acres with a slight administrative fee. That agreement's been signed by the City and we hope to --
They made a charitable contribution of the property they valued at $375,000. That is the rest of this trail, not this. This section will be purchased and PAID given back the funding for which they initially outlaid to buy this particular parcel. Parks, Recreation - 6/8/05
I wish they would just be this cooperative with the Schuylkill River project we're working on as they are in your project. And I can just hope that we get the same cooperation as Conrail has shown you. Thank you. Thank you, Madam Chair.
Any other questions for this witness? Anyone else to testify on Bill No. 13 050508? (No response.)
Thank you. That concludes testimony on that bill. We will now hear testimony on Bill No. 050509, and we invite to the table Karen Borski, the executive director of the Fairmount Park Commission, and Reverend Peter Naccarato, Father Judge High School. Good morning.
Bill 050509, an 27 Parks, Recreation - 6/8/05 ordinance authorizing the Commissioner of Public Property and the Executive Director of the Fairmount Park Commission, on behalf of the City of Philadelphia, to enter into an agreement to lease to Friends of Father Judge High School, Inc., for further sublease to the Archdiocese of Philadelphia approximately 0.398 acres of ground located east of the intersection of Rowland and Solly Avenues, and, in consideration thereof, further authorizing the Commissioner of Public Property and executive director of the Fairmount Park Commission, on behalf of the City of Philadelphia, to enter into an agreement to sublease from the Friends of Father Judge High School, Inc., approximately .40 acres of ground located east of Rowland and Solly Avenues, under certain terms and conditions.
Thank you. We will now hear testimony from 28 Parks, Recreation - 6/8/05 Karen Borski.
Thank you again. I am Karen Borski, director of Fairmount Park Commission, and I am pleased to be hear to testify in support of Bill 7 050509, which would authorize the department of public property and the Fairmount Park Commission to enter into lease agreements with the Friends of Father Judge High School and ultimately the Archdiocese of Philadelphia for land adjacent to Pennypack Park in northeast Philadelphia. In November of '03, the Fairmount Park Commission approved a request from Father Judge High School to build a portion of their new activity center on a piece of land under the park's jurisdiction in Pennypack Park. This land is adjacent to Judge's campus and is currently undeveloped. In exchange for this opportunity, Judge has agreed to swap with the Park Commission an equivalent piece of undeveloped land 29 Parks, Recreation - 6/8/05 that they own in the same area which is also adjacent to Pennypack Park. This exchange of land and subsequent development would have no negative impact on the existing park land or nearby Pennypack Creek. Further, Judge will maintain both parcels of land as it is in their best interest to do so because of the proximity to their campus. Further still, Father Judge High School has agreed to provide public rest room 13 facilities as an external feature of the new building and this will support public park use in this area. The maintenance and security of the rest rooms will be the responsibility of Father Judge High School. On behalf of the Park Commission, I am pleased to express the commission's support of this project. I can also assure the Council that this project like all those considered by the Commission has been reviewed with the best interest of Fairmount Park, the 30 Parks, Recreation - 6/8/05 local community, and the City of Philadelphia as its highest priority. I ask that this ordinance be amended to add Exhibit A, including a ground lease and sublease which affect the swap that we spoke of. And I further request a suspension of the rules to allow for a reading at the next session of Council. Thank you.
Any questions for this witness? (No response.)
Good morning. I am Peter Naccarato, the project manager on this project. I'm here today representing Father Campalone, who is at the Father Judge graduation today, couldn't be with us. I'm here to answer any questions.
You just answered my question because I wanted to 31 Parks, Recreation - 6/8/05 know where Father Joe was.
Very well. Anyone else here to testify on Bill No. 050509? (No response.)
Very well. We thank you for your testimony. This concludes our public hearing. We will now move into our public meeting. I would like to ask Councilman W. Wilson Goode if I could have a motion on Bill No. 050016.
Thank you, Madam Chair. I move that Bill 050016 be reported out of committee with a favorable recommendation and further recommendation that the rules of Council be suspended to permit first reading at our next session. (Duly seconded.)
32 Parks, Recreation - 6/8/05 Thank you. Bill No. 050016 has been moved and properly seconded. All in favor say aye. (Chorus of "ayes.")
Bill No. 050016 will be reported out of this committee with a favorable recommendation and a further recommendation that the rules of Council be suspended so to allow first reading at our next scheduled Council meeting. I would like to ask Councilman Frank DiCicco to please give us a motion on Bill No. 050508. COUNCILMAN DiCICCO: Thank you, Madam Chair. I move Bill No. 050508 be reported out of this committee with a favorable recommendation and a further recommendation that the rules of Council be suspended so as to permit first reading at our next session of Council. 33 Parks, Recreation - 6/8/05 (Duly seconded.)
Bill No. 050508 has been moved and properly seconded. All in favor say aye. (Chorus of "ayes.")
Bill No. 050508 will be reported out of this committee with a favorable recommendation and a further recommendation that the rules of Council be suspended to allow first reading at our next scheduled Council meeting. It is my understanding that we have before us a ground lease which was not ready when the bill was introduced, so this ground lease has to be amended into the bill. May I have a motion on the amendment? COUNCILMAN DiCICCO: On Bill 24 No. --
34 Parks, Recreation - 6/8/05 Forgive me. Bill No. -- amendment to the Bill No. 050509. COUNCILMAN DiCICCO: Thank you, Madam Chair. I move that the amendment be approved. (Duly seconded.)
Please welcome Councilman Darrell Clarke to our committee hearing. I would like to ask Councilman Jack Kelly to please give us a motion on Bill 050509 as amended.
Madam Chair, I move Bill No. 050509 be approved by this committee as amended and further recommend that rules of Council be suspended in order that this bill may be heard at the next session of Council. 35 Parks, Recreation - 6/8/05 (Duly seconded.)
Bill No. 050509 has been moved and properly seconded as amended. All in favor say aye. (Chorus of "ayes.")
Bill No. 050509 as amended will be reported out of this committee with a favorable recommendation and the further recommendation that the rules of Council be suspended to allow first reading at our next scheduled Council meeting. This concludes the meeting of the Parks, Recreation, and Cultural Affairs Committee. Thank you for your attendance and your interest. (Whereupon the hearing adjourned at 10:20 a.m.) - - - 36 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence, and objections are contained fully and accurately in the stenographic notes taken by me upon the hearing taken on June 8, 2005, and that this is a true and correct transcript of same. _____________________________ Kimberly A. Overwise Certified Realtime Reporter Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means unless under the direct control and/or supervision of the certifying reporter.)