And how does that compare to the original construction of the Convention Center?
The original goals on the Convention Center were 20 percent, 20, 25 percent. 98 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994
No, I'm actually referring to -- I shouldn't use the word "goals." How does that compare to the actual participation by MBEs and WBEs in the original construction of the Convention Center?
In the original construction of the Convention Center, we reached about 28 percent. We had about 28 to 30 percent of participation.
I want you to break it down, I want you to break it down. What was MBE participation on the original construction of the Convention Center?
MBE participation was about 18 or 19 percent, and DBE participation was the remainder of that that got us to 28 or 30 percent.
So MBE participation on the original construction of the Convention Center 99 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 was or percent, but your goal for the Convention Center expansion is 12 percent? 5
12 or 13 7 percent. 8 SOLICITOR DIAZ: Councilman, 9 could I perhaps anticipate your 10 question, sir. 11 One of the things that 12 Ms. Young alluded to was the fact that 13 the disparity study was done as a 14 consequence of new legal requirements. 15 One of the changes that 16 post-dated the original construction 17 was the U.S. Supreme Court Case in 18 Crozen versus City of Richmond, and it 19 was that case which established the legal guidelines by how the ranges are now developed. I'm not saying that the ranges are going to be any less --
I understand that, and I understand you did a disparity study, but you can 100 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 utilize the disparity study to explain to me why there was to percent 4 MBE participation on the original 5 construction of the Convention Center, 6 and you're proposing 13 percent for 7 the Convention Center expansion. 8 SOLICITOR DIAZ: I think what 9 I was trying to point out, if I may -- 10 then I'll turn it over to Amina -- is 11 that the disparity study was not a 12 requirement by law at the time the 13 original Convention Center was 14 constructed, so the discipline that is 15 required to develop the -- 16
I 17 originally asked you about the goals 18 for the original construction, then I 19 asked about the actual participation. SOLICITOR DIAZ: Right.
And so I want you to compare the actual participation of the original construction and why it has dropped from 18 to 19 percent MBE 101 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 participation to a proposed 13 percent for the expansion. SOLICITOR DIAZ: But those are goals, sir.
Again, Councilperson, the last time around when we built the Convention Center, disparity studies were not required.
No, no, it does not, it does not. I asked about actual participation on the original construction. You -- there's no -- I don't need to discuss whether there was a disparity study for the original construction, I don't need to discuss whether there was goals set for the original discussion; I asked about the actual participating on the original 102 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 construction. So -- and what I believe actual participation means is that MBEs got to percent of the 6 contract dollars; is that what it 7 means? 8
Why? 17 SOLICITOR DIAZ: I think the 18 difficulty, sir, is that you're 19 comparing participation to goals, and I think what I tried to explain was how the goals are now required by law to be set. The result --
Are you serious? SOLICITOR DIAZ: -- are the 103 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 participation by --
Are you serious? Are you serious? SOLICITOR DIAZ: I am very serious, sir, in connection with what the U.S. Supreme Court requirement is in connection with the establishment of participation goals.
Let me ask you the question a different way: Did the disparity study suggest that you could only achieve 13 percent MBE participation?
The disparity study is -- we're viewing it as the floor, not the ceiling. We plan to be as aggressive as we were the first time around. On the first time around --
Did the disparity study suggest that you could only achieve 13 percent MBE participation? That's a yes or no 25 question. Either the disparity said 104 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 that or it didn't.
Okay. So -- and we could have gotten here a lot quicker. What I believe it actually means, based upon the court decision but also based upon the lack of aggressiveness by the City since the original construction of the Convention Center, you probably put a lot of people out of business since then. So capacity may have actually dropped during that time period, and I'm almost willing to accept that.
But let's be honest about the goals are and why they are what they are if we want to talk about how we build for the future. So if you're saying that there is less capacity than there was twenty years ago, that sort of leads to the 105 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 discussion that we had before this hearing, the part of the discussion that Councilman Clarke wants to engage in and I'm sure several other members want to engage in terms of what is actually possible in terms of participation.
That is exactly what I'm saying. That is exactly what I said. I didn't call them anything else; those are the numbers. I thought I was answering the question, sir.
Yeah, but the follow-up question was: What was the participation twenty years ago and why are the goals lower? If the goals are lower because the disparity study says there's less capacity, you could have just answered it that way absolutely. Is there less capacity than there was at the time of the --
Yes, yes, yes. 106 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994
I'm sorry, Councilman Rizzo. The Chair recognizes Councilman Clarke.
Thank you. I actually have more questions after that debate than I did before, and I don't quite understand. Let me start with Mr. Diaz, first of all, with respects to the legal issue. And it sounds like to me 107 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 that you're saying that as a result of the recent Supreme Court ruling that the current requirement for City Council to ask for an equal opportunity plan that talks about goals attached to any legislation that we pass, it sounds like you're saying that we're not able to do that unless it's consistent with a disparity study? And the reason I asked that is because we just had the Fox Chase, and they committed to percent minority 15 participation in their EOP plan, and 16 I'm wondering why we're not able to do 17 something similar with the Convention 18 Center. Is it a legal issue? 19 SOLICITOR DIAZ: Let me see if 20 I can express it this way, Councilman. 21 The Supreme Court has 22 basically said that you have to look 23 at the underutilization of the 24 minority and women contractors, 25 workers, et cetera, in the community 108 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 to determine what is the under- representation of those skills in the workforce or the contractor force that you employ. And what we have here, I believe, is that empirically-based study that Ms. Young talked about earlier led to the development of these particular goals, but what I also heard is that the results that are expected will be higher than that. That's the floor. And --
So let me just cut you off. So you're suggesting that the fact that we didn't have a disparity study with the Fox Chase and actually the Cira, 'cause they actually committed 50 percent, we didn't have the disparity study with that, and they submitted the equal opportunity plan that had much more significant goals than what we're hearing today. We probably shouldn't have had 109 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 a disparity study here 'cause that would have allowed you to have a more significant goal attached to your equal opportunity plan. I mean, are we required by law to do that, have the disparity study to have an equal opportunity plan? SOLICITOR DIAZ: Well, one of the things we try to do, Councilman, to anticipate these legal requirements is to have the Minority Business Enterprise Council review these proposed participation plans, the each the EOPs, the economic opportunity plans, in advance of Council hearings. And the requirement that I alluded to in Exhibit J of the bill 19 before you today requires an MBEC (inaudible). I think what we've tried to do in trying to achieve the changes that have been suggested by Council is that we've tried to be as flexible as possible to reflect those desired outcomes. 110 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 But as a strictly legal matter, it has to be based in terms of what the empirical evidence would suggest is the under-representation and the utilization of skills.
In order to submit an equal opportunity plan for any developer or whatever that comes in here, are you saying -- I'm going to ask it very -- are they required to have a disparity study before they can set these goals in their equal opportunity plan? SOLICITOR DIAZ: Well, we have conducted -- the answer is yes, but we have conducted on a recurring basis in the City a disparity --
So you're saying yes. SOLICITOR DIAZ: That is a requirement but the City has conducted disparity studies and has updated them in order to --
I'm not 111 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 asking what about what the City did. I'm asking you, if a developer comes in here and wants to submit an equal opportunity plan, as required by the law of Council, an ordinance passed by Council and signed by the Mayor, are you saying that they have to have a disparity plan before they can submit their equal opportunity plan? SOLICITOR DIAZ: What I'm suggesting is -- the answer is yes, but the City has already done that, and we continue to update.
I don't understand that. You just said they have to have a disparity plan. SOLICITOR DIAZ: The answer is: Yes, there has to be a disparity analysis to support the imposition of these economic opportunity plans. The City has done that because we have the information relating to this particular metropolitan area. So whether it's Fox Chase 112 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 that's seeking approval --
I hate to keep cutting you off 'cause I like you, Mr. Diaz, but you get on a roll when you start talking in legal terms and you kind of go off the -- a little off the very precise subject matter. So are you saying that the equal opportunity plans that have been submitted to this Council since the passing of that law are challengeable 'cause if a person out of the -- SOLICITOR DIAZ: No, no. 15
-- willingness and the need to be fair, as it relates to this crucial issue, says, I'm going to do this, then you're going to say that the Supreme Court is going to step in and say you can't do percent; you can only 22 do -- if they agree that they want to 23 do 25 percent, you're telling me that 24 the federal government is going to 25 step in and say you got to go back to 113 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 12 percent? SOLICITOR DIAZ: No. What I'm trying to say, Councilman, is that the City has undertaken the responsibility to provide the empirical basis for your approval of economic opportunity plans. That's the responsibility of MBEC. They have updated the disparity plans. Any particular employer or anyone who might contract with contractors to do work as part of a City-related project doesn't have to conduct its own individual disparity study. It's still the same Philadelphia workforce. We have that problem.
But we're the problem -- MBEC is the problem because MBEC is established through whatever disparity plan that they've conducted an extremely low number. And the fact that you're saying that the disparity plan shows -- not that 114 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 you actually got one done somewhere else, Miss Young, it showed that there's a similar disparity between minorities and WBEs?
Excuse me. You're going to have to speak into the microphone.
Actually, they had a -- what they call the methodology of doing. And, yes, that's what the numbers were. They went out for us, for instance, because we were -- we didn't do a lot of contracting, they actually went in and they asked to give us the areas of subcontracting and contracting that would be on the site, and then they went out to find minority and females in those areas who were willing and able to do the work. And those were the numbers.
See, 115 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 that's where we get to the earlier issue about capable or able, however you want to characterize it. So if you're saying that because there are only a certain number of people who currently are qualified to do that work, then you'll never get to a reasonable goal, and that's why in the earlier statements, I said that sometimes there's not these contractors out here that could perform these services, and you have to figure out a way to make 'em. So if a study was done based on that, then, I mean, how do you get a higher number?
They gave us a number that we take as the floor, and they have a way of, if we have to go to court, they will say, Here's the information that we've used in terms of coming up with that number.
That there only a certain of number of -- 116 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994
Because we've contracted with the experts in the field to go out and do the work to give us the numbers.
But if they're only doing an analysis of who's available, then how are you going to get to a higher number? I don't understand. SOLICITOR DIAZ: Madam Chair --
Particular ly when you understand that the reason why there's the lower numbers is because the --
-- unwillingness of individuals to give 117 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 more opportunities. I mean --
Sorry. Councilman Goode has a point of information.
I'll be quick as I can be. One, do you have a copy of the disparity study here?
We don't have it here, but we have a copy of it here that we certainly will share with you.
The second question is: When you refer to "they set a goal," who are you referring to as "they"?
And the last question about the disparity study: When they determined capacity and dealt with utilization or 118 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 under-utilization, was it based on the City of Philadelphia, was it based on the region, was it based nationally? Do you know the methodology in terms of how to determine capacity?
And so there may actually be MBE firms, say, for example, in Atlanta that could come into Philadelphia, possibly serve as not just a subcontractor, but a general contractor, that would take that participation up greatly.
Okay, thank you. SOLICITOR DIAZ: Madam Chair? I'm sorry, Madam Chair, if I could request that the document that's been previously testified to, the antidiscrimination policy for the Pennsylvania Convention Center Authority's expansion project, be an 119 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 amendment to the bill to meet the request of Councilman Goode.
I asked for an economic opportunity plan to be attached to the bill, and I would like it to be done. That doesn't mean we want that plan to be attached to the bill.
Okay. Councilman Clarke, do you still want to be recognized?
Madam President, because of a prior commitment, I'm going to have to leave. I will leave my vote on this bill and the other bills as a yes. But I do have a follow-up question to this discussion I'd like to ask Ms. Young, and Councilman Clarke's allowing me to do that. 120 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994
You talked about the apprenticeship program and the hours. How do you give -- have you identified that there is a diverse pool of apprentices in the City of Philadelphia that will be utilized? And how do you -- will that be a racially diverse pool, given the fact that you're going to -- some of the unions or training programs, have you looked at the diversity of those organizations so that your pool of apprentice will be diverse?
Yes, we have. And, in fact, we are going to the programs that have focused on minorities in women for training, so there's like the DAP Program, there's a program in the Hispanic Latino community, there's a program out of the University of Pennsylvania. We have about six programs that all have 121 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 a diversity of gender -- pre-apprentice program that have a diversity in them. And we are funneling through -- we are not going to start another training program. What we want to do is move these folks who have been trained in the past but there was no jobs for them to be placed on.
As Charlie Solomon said, they're sitting home, waiting for the phone call?
Okay. That was about three years ago when we had our discussion about this whole business upstairs on the sixth floor. I certainly thank you for your testimony, but I have to leave, but I do leave my vote as yes on all of the bills that have been introduced today. Thank you. (Councilwoman Blackwell takes 122 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 over as committee chair.)
Thank you. Councilman Clarke, have you completed your questions?
Wow. Every response requires an additional question. All right. I'll go back to this disparity -- this disparity issue. I set a goal, 30 percent. The contractor says -- you select the contractor and he says okay and I can't make the 30 percent, the contractor can't make it, and he ends up and he dips down to 20, 15, and then he goes below your what disparity calls for 13 percent. Does that then disqualify the contractor? Because the disparity 123 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 says you have to -- based on the analysis of the disparity study, you have to meet at least percent. 5
If a contractor 6 signs on at 30 percent and that is the 7 goal that he says that he says that 8 he's going to meet, that's the goal 9 that we are holding him to. 10
Yeah, but 11 you can't legally require makes -- 12 see, I think you're -- 13
We're not legally requiring it. If the contractor says he's going to do 30 percent --
Right, that's what I'm saying. If the contractor says I'm going to do 30 124 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 percent based on your goal, that contractor can't meet 30 percent and that contractor comes in at 20, you can't withhold that contractor's pay or throw that contractor off the job legally. Am I correct, Mr. Diaz? Mr. Solicitor, am I correct?
Madam Chair, I didn't mean to interrupt the Councilman, but I would like to introduce Bob Archie, Esquire, who's counsel for this program, and ask if he could also participate and answer questions as well.
My name is Robert Archie. I'm a partner at Duane Morris. We were engaged by the Pennsylvania Convention Center Authority to look at the -- the current antidiscrimination program. 125 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 What we did was to survey across the country all of the cases which have dealt with particularly challenges to goals and aspirations in construction contract, major construction contract, and then we looked at what the State was offering, or at least what the State had undertaken to do in conducting, Councilman Clarke, a disparity study. We then asked the same consultant, which had been engaged by the Commonwealth, to conduct a disparity study, or we called it a goal-setting study, here in the City of Philadelphia based upon the disparity study or the methodology they had utilized for the Commonwealth of Pennsylvania. And that's how we -- based on those goals setting requests, that's how we arrived at the numbers which have now been adapted by the Pennsylvania Convention Center 126 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 Authority. All of the cases say that you cannot take an arbitrary number, 30 percent, percent, and mandate in 6 your bid documents that your 7 contractors and subcontractors adhere 8 to this arbitrary number that you pull 9 out of mid air. 10 The simplistic approach to 11 this was to look at the number of 12 racial minorities here in the City of 13 Philadelphia. If that's 46 percent, 14 most operations would say to the 15 contractors, on major projects of this 16 size, you have to meet that goal. 17 The Supreme Court has said, 18 since 1998, an arbitrary setting of 19 those goals are unconstitutional. You 20 must, in, fact engage a consultant to 21 conduct the disparity study. Then 22 once you conduct the disparity study 23 and arrive at an underutilization of 24 MBEs and WBEs, those are the goals 25 that you can set and mandate your 127 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 contractors and subcontractors to meet. If you exceed those goals arbitrarily --
Mr. Archie, Mr. Archie, can I cut you off. One quick question. In part of your explanation you say "mandate," and in a part of you explanation you say "setting of goals." I understand that you can't mandate anything below the 13 percent. The question is: Can you set a goal without a requirement? And I believe you can do that. What I'm trying to find out is why you are setting the goals so low if you can, in fact, set the goal at a much higher number, understanding that you can only require 13 percent based on your disparity study and the Supreme Court ruling.
Right. The problem is, Councilman Clarke, if you 128 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 set a goal higher than a mandated goal, higher than the disparity --
I'm not asking you to set a mandated goal; I'm asking you to set a goal.
If you set a goal, then that goal is challengeable, it's challengeable.
Because a contractor who says I bidded on the project, you had a goal of 30 percent, your disparity studies show that you had 15 percent, that's all that's available in this area, your goal is unrealistic. Therefore, I'm an unsuccessful bidder and I only bidded -- I can reach percent. He 24 could challenge that goal on the 25 concept that it's a violation of the 129 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 Constitution.
So if you set -- SOLICITOR DIAZ: Councilman, could I jump in here if I may. You know, I believe that Bob Archie knows this backwards and forwards and is saying what the law is, but I think what I heard you asking is: If there is an aspirational goal, let's say, not a mandatory goal --
Right. SOLICITOR DIAZ: -- but an aspirational goal, this is what aspire to --
Right. SOLICITOR DIAZ: And if you have someone as a contractor voluntarily accepting that voluntary goal that we have not mandated on them but they have offered to achieve that goals, that is something that I believe legally can be imposed on that 130 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 contractor through the contract but it cannot be mandated. But I understand your point to really say, if we really want to tell people this is what we would like them to achieve but we can't force them to achieve it and have punitive measures to make it possible through the contract, is that legal? If that's the question, the answer, in my opinion, is yes.
Mr. Archie, talk into the mic; we can't hear you. 131 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994
I don't differ with you, Councilman Clarke. You can set a goal which is not mandated, but you cannot set a mandated goal not based upon a disparity study. You're correct.
Councilman, I think it's important for us to get on the record -- and Chairman Riley alluded to this before. We succeeded in getting bids for the demolition work through the Redevelopment Authority that were hired. And then the numbers we've been citing here, those were voluntary obligations of the demolition contractors, and the RDA has held the contractor -- and, in fact, we do monitor. And when we saw in one quarter that they were not meeting the goal that they had voluntarily taken on, we withheld payment until they corrected that. 132 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 And that is the -- as I understand it, as a board member, that is the policy and intention of the Convention Center Authority in terms of how we will carry out the expansion project.
One of the things -- I think that this -- I'm not sure that this is going to be a satisfactory answer, but I think that this is something that we should all take into consideration. This is the biggest project that the State has ever funded, and so there are reasons why we should be interested in the things that you're talking about, Councilman Clarke, and we are. We've made a commitment to the Governor, we've made a commitment to the current mayor, and we've made a commitment to the incoming mayor that 133 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 this is not only going to be a structure edifice, but this is going to be an edifice for economic opportunity. The last time this was done, the Convention Center was sued and -- because it is a very highly visible project. We've come to the conclusion that we want to take as conservative position as we can --
Because of contractors suggesting that they were deprived of the ability --
And Amina was the principal witness during the course of that suit. We want to provide -- and we've committed, I've personally committed to Michael Nutter, committed to the current mayor, and on behalf of 134 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 the board committed to the Governor, who is adamant that this program be a model program. We don't want to get ourselves in a position where we're exposed to somebody filing a lawsuit and maybe creating a situation where the very people we want to include become subject to being not included. And so it's like the coach at the beginning of the year, where the general manager and the press comes to him and says, What are you going to do this year? Oh, we're going to go to the playoffs, we're for sure going to be in the playoffs. Nobody's going to say we're going to win two games. But here, we have taken what we think are the legal steps to give us as solid a groundwork as we possibly can. This team has produced before, headed by Amina and the other folks who were involved, and this team can produce again, and we think that this team can produce really good 135 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 result. We don't want to take a chance on having those result destroyed through some kind of a lawsuit, because we put out a goal and say, We'll go to the playoffs, what number do you want? What number do you want us to put on the table? You know, we'll accept that number.
Mr. Chairman, you're saying that you don't want to be sued. How, in fact, can you keep from being sued?
Well, we can never -- obviously, Councilman Goode, we can never keep from being sued, but if we are sued, we want to have a basis that we can say that we have followed the precept of the law all 136 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 the way through. That doesn't prevent us from achieving higher goals --
Mr. Chairman, Mr. Chairman, the precept of the law is that a disparity study be conducted. There are several different ways to conduct that disparity study. I've already illustrated one. You said that you're pulling from a pool of minority-owned businesses from within the State. If you are pulling from a pool of minority-owned businesses from around the country, you will find that other places around this country are not as backwards as Philadelphia. There are places where African-Americans actually serve as general contractors on major construction projects. Therefore, if we want to move forward on minority participation goals, my thought would be, on the 137 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 largest state project in the history of the Commonwealth, that you would look to pull from around the country and do a disparity based upon the availability there. So I'm challenging your disparity study and saying it's a bunch of crap. I'm telling you outright you could say that you're following every legal course you have to follow in doing the disparity study; that doesn't mean your disparity study is right.
I understand. And I'm sure that -- I'm sure that there can be differences of opinion as to how the disparity study is approached, and I think that the important thing to note is that the organization that was chosen has a track record which was chosen by the State, has a track record, and --
Well, the State has a bad track record as well 138 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 as the City in the area of minority participation. So, I mean, doesn't make a difference who's the best in the State. The question is: If there are people doing a better job of economic opportunity around the country, then we should look to what can be done based upon what's being done in other places. We recently did a disparity study locally --
Excuse me. We recently did a disparity study locally regarding City contracting, and they used utilization numbers that was based upon the region. I asked our consultant, which is a solid consultant, e-consult, had they used numbers simply based upon the city where those numbers would be different. They conceded that they would. 139 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 For the purposes of City contracting, it would probably raise our numbers and raise our goals. And so we've asked them to go back and change their disparity study because it was wrong. And this disparity studies is wrong. And that's the simple truth.
Councilman Goode, I don't think that you will find any point of disagreement from us from the standpoint that there may be differences of opinion as to how the study was done and whether it could be different if different factors were taken into consideration. But I think the important thing is, we don't mix apples with oranges. This study was done to form a basis to make sure that we were okay in a lawsuit. This study wasn't done to form a basis that this is all we want to achieve. I mean --
That's 140 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 irrelevant to me. What's relevant to me is what you're basing your number upon. If you're basing it upon a disparity study and the disparity study is wrong, then that's a problem. What you're asking me to do is to vote for percent MBE 10 participation, and I won't do that. 11
No, we're not 12 asking you to vote for 13 percent; 13 we're asking you to vote for confidence in a group that has achieved more than that in the past and will achieve more than that on this job, maybe the best group that's ever been put together in the City of Philadelphia.
That means nothing to me. The best group in the City of Philadelphia or the best group in the Commonwealth of Pennsylvania, when you're talking about the issue of economic opportunity, that means 141 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 absolutely nothing to me. And so I -- Madam President, I asked to be excused on Council business, and I'd like to leave my vote as no. 7
Thank you. At this point, if I have no 10 objection from members of the committee, we will get back to the people who are sitting at the table at the present time, but we do have other witnesses that have been patiently waiting to provide us with their testimony. So if no one has objection, we will -- they will be very brief, I'm told. So if you don't mind, I would ask Mr. McPherson, then, to please call the name of the next witness. MR. McPHERSON: Mr. Frick, CEO of Independence Blue Cross and Tom Muldoon. And then after them will be Delilah Winder and Valerie Ferguson. 142 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994
Thank you very much for your patience. Kindly identify yourself for the record and proceed with your testimony.
Madam President, thank you. I'm here in my capacity as Chairman of the Greater Philadelphia Chamber of Commerce, and has been noted throughout the proceedings today, the Convention Center expansion is a very important economic development project for our city and our region. The Chamber of Commerce, on behalf of its member companies and organizations, recognizes the importance of the growth of the hospitality and tourism industry to our continued economic vitality. It also recognizes the transformational 143 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 impact that this will continue to have on keeping our city and region viewed as a world-class destination for tourism. And, most importantly, as the Chamber continues to work with the leadership here at Council in city government and in state government, to continue to grow and attract companies and employment to the City and to this region, the opportunity to create new jobs and to continue to sustain growth within our existing companies within this region, the Chamber is wholeheartedly in support of this exciting project for the region. Thank you.
Or 144 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 good afternoon.
I'm Tom Muldoon, I'm President of the Philadelphia Convention and Visitors Bureau, and I'm here representing thousand members of the bureau, paid members, who are a part of the hospitality industry. And in particular, and everybody has a set of documents here, but representing the -- besides the Philadelphia Convention and Visitors Bureau, the Greater Philadelphia Hotel Association -- and Ed Gross is here; and Bill Welsh from the Marriott Hotel; and Valerie, who will speak in a moment, representing Loews; Paul Stancke with the Reading Terminal Market; the Shops at Liberty, Jack Fazio had to go book to work; Bob Nelson with OIC; Greg DeShields, with Temple's Hospitality School; and Delilah Winder, representing both the market, the restaurants, and the African-American Chamber of Commerce. 145 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 So we strongly urge the passing of this. And there are one-page documents from all of those groups that are in this, and I would like to turn it over to the vice chair of the Philadelphia Convention and Visitors Business Bureau and the general manager of the Lowe's Hotel.
Good afternoon, Madam President and City Council. I'm delighted and honored to be here today. Just to tell you a little bit of the story of Loews Philadelphia hotel and the impact that this property has made not only on the community but what the community has done for our economy also, when we decided to come to Philadelphia in 1998, we decided to come to Philadelphia because there was a beautiful convention center that had 146 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 half a million square feet of beautiful space that was being copied all over the United States. People were flocking here to see exactly what had happened. At that time, Philadelphia was one of the top highest demanded market without enough hotel rooms, so we felt it was a great opportunity for us to expand our brand and our company. We found a building that was an icon, an architectural icon, the PSFS Building. It had been boarded up for 12 years, and we were very elated and delighted to be able to reopen and revitalize that building as a 583-room 18 hotel with 45,000 square feet of space. More importantly when, we opened the hotel, we opened its doors to 350 employees initially. Over 20 percent of that opening team were people that were formerly on public assistance, on welfare. And I am 147 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 delighted to say that today, many of those individuals are managers in our hotels, managers and chefs in other hotels, and some even have moved on to other cities in very highly regarded positions. We worked with various agencies. We went to 10 community-based agencies, looking for 11 candidates. We primarily worked with 12 the Greater Urban Philadelphia 13 Coalition, we worked with OIC and we 14 continue to work with them, Congreso, 15 the (indiscernible) Center and the 16 Lighthouse. 17 When you look at how we 18 solicit for employees today, we are 19 soliciting opportunities, we are 20 giving individuals opportunities that 21 heretofore didn't have them. 16 an-hour, which is not a living wage. People were going from making nothing or $300 a month on public assistance to making to $30,000 a year. 8 We are in a region that has a 9 tremendous amount of people that don't 10 have a formal education, that we have, 11 unfortunately, 49 percent public high 12 school dropout rate. 13 We are able to create jobs 14 that get people back in the system, 15 that -- we no longer are just running 16 a business; we're educating people, 17 and we're giving them an opportunity 18 to really have an economic independent 19 opportunity for the rest of their life 20 and for their children. 21 In addition to that, we 22 followed a very strict -- it was 23 imposed as well as something that is 24 self-imposed right now in our company, 25 but a minority procurement plan that 149 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 30 percent of every dollar that was spent on the development of this hotel, $115 million went to minorities and women operators and owners. Many of those people who were given those chances are now really realizing huge benefits from those opportunities. Kia Dickerson, who is now a major designer nationally, who's on a national show, "Trading Spaces," her very first contract was Loews Philadelphia, and it was doing the draperies. James Brown, who owns Alpha Printing and Office Supplies, we started with him in this community as well as the Marriott, when they opened. He now has every Loews Hotel, and his company has grown. We believe in minority procurement. Our bonuses are based upon it, our bonuses are based upon promoting women and minorities. Forty percent of our management staff are 150 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 women and minorities. So we're very proud of what we have been able to do for this city and what this city has been able to do for us and for our employees.
We now employ over 500 people, and it is just -- it's a blessing to watch people come in at very humbling starts and be able to grow and continue their growth and ultimately become executive committees and general managers of other small properties. As an industry, we provide over $90 million in taxes. We employ over 50,000 employees in this hotel-within this city in the hospitality industry. With this expansion, we will be able to sustain those jobs as well as enhance and grow them. I just want to remind everybody that the hospitality industry, you know, is not an industry made up of minimum-wage jobs. These 151 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 jobs pay and $12 an hour. And they give people the second and third chance that they so sorely need to continue to grow and make up for whatever happened in their past. I thank you for giving me the this opportunity to speak to you today, and I urge you to please pass this bill.
If I just could add, as part of Convention Center expansion, we project it will conservatively be 2500 new hotel rooms. On a rule, being very conservative, for every 100 hotel rooms, you get 70 permanent jobs. That's 17 to 1800 jobs, and none of those are really mixed into those numbers that you've heard earlier; they were basically on the center. And I'd maybe ask Delilah to speak from the restaurant and the 152 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 market end and the chamber.
Good afternoon, Madam President. I'm Delilah Winder Chairwoman of the African-American Chamber of Commerce, also a small- business owner in restaurant and hospitality in the City of Philadelphia in the Reading Terminal Market since 1984. So I'm here today basically to speak on -- from the African-American Chamber perspective, the expansion of the Convention Center we look at as being an opportunity for additional business for our businesses. There is growth potential and business available from all facets as well as the starting and the design process and going all the way through to servicing the building. As a small-business person in the Reading Terminal Market, being 153 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 there since 1984, I've gone through the building of the current convention center, the transformation of the Reading Terminal Market, which I could say, if it were not for the current convention center, the Reading Terminal Market today probably would not be in existence. The building at that time was deplorable and probably would have been closed down. So what that convention center -- the current convention center has done for our businesses in the Reading Terminal Market, which is a makeup of probably 80 different small businesses all from the Philadelphia area and surrounding area, is gave us the opportunity to have businesses today and to grow to where we are today. The expansion of the Convention Center would actually be an additional shot for our businesses to continue to grow because each time 154 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 that a convention comes into the City, our sales go up, we have to bring a little more staff. There have been times where we've had conventions that my business directly was affected with probably a 300 percent growth in sales over the period that that particular -- or those conventions were in the City. And it may not seem like a lot, but it is -- really makes a big difference when these tourists come in and when these conventions come in that it does help to grow our businesses. So I thank you today. And I am here in support of the Pennsylvania Convention and Visitors Bureau, which I also serve on the board of.
Thank you very much. Are there any questions from members of the committee of the witnesses of the table? 155 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 Councilwoman Brown.
Thank you, Madam President. Good afternoon, everyone. To the leadership of the chambers, could you please speak to the nature of any discussion that has been had with the leadership of the Convention Center, either at the board level or the staff level, that addresses a role for the chambers in the ultimate construction, design, and rollout of the next convention center.
We, of course, want to see the highest participation. We want a commitment of the highest participation that we could possibly see because we do represent African- American businesses. There has been -- in the current convention center, there has been participation, and we think that they have done an admirable job as to where it sits today. 156 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 Of course, with the expansion, we want to see more. Sitting here as chairperson for the African-American Chamber of Commerce, our businesses want inclusion at all levels. And I would say I believe that the team that you have here today is working to see that that happens.
Partly. More specifically, has there been discussion that will say in the body of the legislation, in the actual text of the document, that there will be a formal relationship with the African-American Chamber, the Hispanic Chamber, and the role that those chambers will play in meeting the goals that have been articulated by Councilman Clarke and Councilman Goode? 157 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994
Councilwoman, in response to your current question, I don't believe there has been any formal documentation, but I will tell you, in the whole planning for the Convention Center expanding, the Philadelphia Greater Philadelphia Chamber of Commerce, in that a large portion of our membership is small business, we continue to recruit minority and small-business owners into the chamber. And as you also know, one of the priorities of this chamber today is to continue to provide opportunities for at-risk youth to work in our companies, small and large, and there has been ongoing dialogue about how this convention center expansion will promote 158 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 opportunities for employment. And our continued linkages with the workforce development professionals in this city and this region and our linkages with the employers and the folks at the Convention Center will continue to cultivate opportunities for more and more of our young people to find employment within this region. But we have not documented that formally, but there has been active, ongoing conversation about employment, mentoring, development of youth, and networking of our membership with the Convention Center.
Well, we're looking in the same crystal ball because my next question was going to be just that: Has there been discussion about how we can get young people in the pipeline, if you will, on a career path for the hospitality industry as a whole what? 159 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 And what I know in the seven years I've been here is, if you don't raise it at this level, then it doesn't happen. My best example is: With the stadiums, we made it with clear that in some way, shape, form or fashion, you needed to be a part of the -- one of the beneficiaries. It's in the language, it's actually in the text of the document, so that hold everyone accountable, if you will. So for the administration, Madam President, there will be the request and expectation that there be formal actual language in the legislation that stipulates the roles of the chambers in meeting the equal opportunity plan goals.
Right. Let me just say that I don't think any of us here could -- 'cause we don't represent the Convention Center Authority, we represent the hospitality industry, could officially 160 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 address that. I will just say, if you look at the testimony, you have representatives here from OIC who have had a great success in the hospitality industry. The academy schools, both public and Mercy Catholic, which, I think, come under Lisa Nutter's responsibility, have also been very -- we work with our multicultural affairs congress on that. We've recently done a study working with the hotel that's showing, I think -- I could be corrected, but about 40 percent of the management of all hotels are minorities. And if you put in women, it would be that much higher because it's a business that's obviously now dominated by women, and there are just a couple of old guys that are left in the middle. So your education and your training component, your hospitality industry in general, I think, is a 161 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 tremendous success story and just gets better every year. But we do not officially represent the Pennsylvania Convention Center Authority to address your question.
Thank you all very much. Councilman Rizzo, do you have questions of this group or the next group?
Thank you, thank you. MR. McPHERSON: Valerie Ferguson and Dan Fitzpatrick. And then we'll get back to the Commerce Department.
Valerie just spoke. MR. McPHERSON: Oh, I'm sorry. 162 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994
Dan put his name in and had to go off to get his physical so he could work for Citizens Bank. MR. McPHERSON: Okay. Then if the Commerce Department could come back to the table.
The Commerce Department and the City Solicitor in a group testifying earlier, please come back to the table so that we could continue the discussion.
Okay. (Previous panel of witnesses return to table.)
Madam Chair, our apologies. We were having a decision with Councilman Clarke.
That's fine. I understand. Thank 163 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 you.
Thank you, Madam President. I'm not sure who will answer this question, but I'd like to go back to the Liberty Trust Building. Initially, I understand that that property was a very desirable acquisition for the Convention Center expansion. I would like to know why it was so desirable early on and why now -- I think I heard today that it was no longer needed for the expansion. Well, I've been around long enough to know that probably five years from now, we're going to be hearing that you've paid five times as 164 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 much for the property because five years from now, you'll need it. Could somebody explain to me how we could let this go. Is it just about money? You don't have the money to acquire it? What exactly is the reason for our record her of why we're not going to acquire the Liberty Trust Building? which, again, I understand would be a valuable asset to this probably expansion.
Councilman, I think that I can answer that hopefully satisfactorily for you. When we originally looked at that building, the thought was that there were going to be -- the current offices of the Convention Center are pretty sparse and may not be adequate for the expansion. The original thought was that the Liberty Trust Building would be a viable building in which to put the executive offices of the Convention 165 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 Center. When it was further expanded, because of the makeup of the floors -- and I'm not a contractor, but because of the makeup of the floors, where the elevators shafts were and that type of thing, the utilization of the building would have been not even close to being adequate to turn into being offices. That was the purpose the buildings was looked at in the beginning. And so at that point, on -- there was a decision that it didn't make any sense to acquire the building because it didn't fit in to the -- it wasn't going to be usable for anything else.
Wouldn't you think, though, based on the expansion, that any near properties would be a valuable asset even if to control that area? Again, I've been around this 166 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 long enough now to look down the road and say that I can envision that you're going to need to grow those executive offices. And even if this property won't work -- allegedly won't work -- that there's a way to make it work, and I don't mean just by throwing a ton of money at it. But anything near the expanded Convention Center, to let it go at this point, someone's going to hold us hostage five, eight years from now and triple and quadruple the price, and we're probably going to buy it.
Can I just take one second. Mr. Eisenstat really more had to do with the decision-making process, but this was also wrapped into the agreement from the folks from the Historic Commission as well, and I'd like him to answer the question if I may, Councilman. Madam Chairwoman, Noel 167 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 Eisenstat was a consultant with the Commonwealth who's been working with us on this, and if I may ask that they participate as well. (Witness comes forward.)
Is he in the room? Is he in the room? That can't be Noel Eisenstat. (Laughter.)
Yes. This is what the project has done to me. My name is Noel Eisenstat, for the record. A little bit of background to address Councilman Rizzo's question. When the Convention Center, as we know it today, was originally acquired, it was acquired by the City under a new redevelopment agreement. And as a redevelopment agreement, the ability 168 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 of the City to direct an area to be acquired could be acquired because a property was blighted. This acquisition was not undertaken as a blight. The acquisition here is being done by the Commonwealth through the Department of General Services and is being undertaken through the powers of the Commonwealth to achieve the public purpose of a convention center. As Chairman Riley discussed earlier, the Convention Center included that the floor plates of the buildings would not provide a use for the Convention Center that was practical or economically feasible. Therefore, once that decision was made by the Authority and communicated to the Commonwealth, the Commonwealth did not have the legal authority to acquire the property. While it might be a good redevelopment strategy and it might be 169 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 a good business strategy, the Commonwealth could not acquire the property once the Convention Center Authority said it had -- could not utilize the property for the expansion project.
Could you please provide the document that you just described from the Convention Center to the committee, to the Chair?
Councilwoman Brown, did you want to be recognized?
I do, Madam President. 170 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 I have related follow-up questions to the line of questioning that was posed by my colleagues Councilman Clarke and Councilman Goode. And just to put this in context and to put this in context and to put it on the record, we now have a -- it is a matter of practice for us that we have what I might call an informal SOP, standard operating procedure, where we really do have an expectation that those coming before us seeking support have an equal opportunity plan, have specifics of the plan, and are prepared to submit the plan to the Chair so that we have a chance to review it prior to the hearing. That said, I too look forward to the written equal opportunity plan that would be a part of this bill. I have a few questions. One, what provisions, protections, or 171 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 clawbacks do you have in the body of the legislation to protect MBEs and WBEs who many times ultimately get jammed by contractors who do not honor the tenet of the contract they engaged in? SOLICITOR DIAZ: Well, as I said earlier, Councilwoman, there is a legal requirement, which is part of Exhibit J of the bill, which requires these protections to be implemented, including, among other things, the requirement for payment.
Okay. SOLICITOR DIAZ: Now, we've been talking about having a formal amendment of the bill to address the EOP issue, and I'll come back to that. But I think that the policy that Ms. Young was addressing and describing earlier is essentially the implementation of the legal requirement that's reflected currently 172 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 in Exhibit J to the bill.
Okay, all right. One question. The witnesses prior to you I posed a question regarding any discussions around strategy or potential roles for the Hispanic Chamber of Commerce and the African-American Chamber of Commerce. Have there been any discussions at any level and what are they? Or better yet, what's the bottom line?
What we have for them in particular is, we have an oversight committee. The oversight committee reports directly to the board, chaired by the vice chairman of the board, and that oversight committee does just what it says. Everything that has been done the month before and the month previous, they review. Administratively, as you raise 173 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 the issue of ensuring that people are being paid on the job, small contractors, everything will come through this committee. Currently on that committee, we have representatives from the Hispanic Chamber of Commerce and the African-American Chamber of Commerce. Both the chairs of those committees are on that group. And it's about ten or eleven prominent folks in Philadelphia who have an understanding of the process and a mandate to ensure in an advocacy capacity that we have and we are paying, first of all, those who are participating in our project and, of course, outreach to ensure that we are getting as many minority and women into the mix as we possibly can.
Okay. And that's preconstruction. What will be their role, formal role, once the project is underway and once 174 11/30/07 COMMITTEE OF THE WHOLE - BILL 070994 the project is completed?