COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON COMMERCE & ECONOMIC DEVELOPMENT - - - Thursday, June 16, 2005 9:25 a.m. - - - Room 400, City Hall Philadelphia, Pennsylvania - - - BILL NO. 050337 - An Ordinance authorizing the Commissioner of Public Property and the Director of Commerce to enter into a least agreement with Tinicum Township, Delaware County. - - - PRESENT: COUNCILMAN W. WILSON GOODE, JR., Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN JUAN F. RAMOS COUNCILMAN FRANK RIZZO COUNCILMAN FRANK DiCICCO COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN MARIAN B. TASCO - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 BILL NO. 050337 - 6/16/05
This is a Public Hearing, Committee on Commerce and Economic Development, on Bill No. 050337. My name is W. Wilson Goode, Jr., Chair of this committee. I note that a quorum is present. To my left, Councilwoman Marian Tasco, also Councilman Frank Rizzo, Councilman Frank DiCicco, and Councilwoman Donna Reed Miller. The title of Bill No. 050337, an Ordinance authorizing the Commissioner of Public Property and the Director of Commerce, acting on behalf of the City of Philadelphia to enter into a lease agreement with Tinicum Township, Delaware County, for the lease from Tinicum Township of an approximately 21.8 acre parcel of land adjacent to Philadelphia International Airport which is currently intended for use as a safety area at the end of a runway, under certain terms and conditions. I will ask Mr. Isdell to approach the witness table. Good morning. Please state your name for the record and proceed 3 BILL NO. 050337 - 6/16/05 with your testimony.
Good morning, Mr. Chair and members of the committee. My name is Charles Isdell, Director of Aviation. And on my right is Mark Gale, Deputy Director of Aviation for Operations And facilities; on my left is James Tyrrell, Deputy Director For Property and Business Development. I want to ask Mr. Gale to read the testimony, with your permission, as this runway safety area project has literally spanned his entire 20-year career with the airport and he is intimately familiar with Philadelphia's airfield better than anyone else. So, Mark, if you will.
Thank you, Charlie. Good morning, Mr. Chairman and members of the committee. As Charlie stated, my name is Mark Gale. I am the Deputy Director of Aviation Operations and Facilities at Philadelphia International Airport, and I am pleased to 4 BILL NO. 050337 - 6/16/05 appear before you today to testify in support of Bill No. 050337. 8 acres of real property located adjacent to the western end of Philadelphia International Airport's Runway 9 right and the Delaware River from Tinicum Township for use as a runway safety area that would meet current FAA standards. The property will be leased through an agreement that was negotiated by the law department and Tinicum Township's legal counsel. The lease agreement provides for a ten-year lease term, with the option to renew the lease agreement for an additional ten-year term. The lease contains the appropriate four-year termination clause as is required by Section 8-200 of the Home Rule Charter. The rent for the property will be 5 BILL NO. 050337 - 6/16/05 $85,000 per year, subject to adjustments set forth in the lease agreement. The rent will be paid with monies from the aviation fund and will have no General Fund impact. FAA regulations require airports to provide a safety area for each runway and taxiway. A runway safety area, or RSA, is generally described as an area that is cleared and graded, free of ruts, humps, depressions, and other surface variations, and should be capable of supporting the occasional passage of aircraft, firefighting equipment, and snow-removal equipment without resulting in damage to these vehicles. The RSA is primarily intended to provide a measure of safety in the event of an aircraft's excursion from the runway by significantly reducing the extent of personal injury and aircraft damage during overruns, undershoots, and veer-offs. At the time of its construction in 1970, Runway 9 right complied with the standards of the Federal Aviation Administration. However, in 1988, the FAA 6 BILL NO. 050337 - 6/16/05 changed its regulations and placed greater emphasis on upgrading airport runway safety standards. In 1990, a study conducted by the FAA found that only 35 percent of runways used by air carriers met the new standards. Another study conducted by the FAA in 2000 increased the compliance number to 55 percent, but also found that 86 percent of the surveyed airports had the potential to achieve standard RSAs. Philadelphia International Airport falls into this category. In order to comply with the FAA's current regulations, we are seeking to lease the property and develop it into a standard RSA with grant monies provided by the FAA. Since 1981, the Division of Aviation has sought to increase the dimensions of the Runway 9 right safety area. 8 acres needed by the airport to establish the standard RSA was owned by Viacom as part of a much larger parcel, encompassing more than 100 acres. Viacom was not willing to subdivide the parcel to satisfy 7 BILL NO. 050337 - 6/16/05 our needs. Tinicum Township recently acquired the parcel and was willing to negotiate a lease for the property. If this ordinance is voted out of your committee today with a positive recommendation, the Division of Aviation, in consultation with the law department in Tinicum Township, intends to enter into a one-year lease for the property. This will enable the Division of Aviation to gain access to the property for preliminary design work pending approval of the long-term lease contemplated by this ordinance by City Council in the fall. We have made safety and security of our traveling passengers the foremost priority of our airport. This lease of this property will serve as a valuable, necessary improvement to the safety of those who use our airport, as well as our neighbors in Tinicum Township. There have been several instances in the recent past at other airports where 8 BILL NO.
050337 - 6/16/05 airplanes have slid off or overshot runways, resulting in personal injury and extensive property damage. We wish to avoid that type of incident in Philadelphia. In order to improve the safety area at the airport and comply with the current FAA regulations, I urge the committee to approve the lease of the property for use as a runway safety area. I greatly appreciate the opportunity to speak to you today in support of Bill No. 13 050337, and my colleagues and I will be happy to answer any questions that you may have. Thank you.
Thank you for your testimony. Let me note for the record that Councilwoman Reynolds Brown and Councilman Nutter are also present, and Councilman Ramos. The Chair now recognizes Councilman Rizzo.
Thank you, Mr. Chairman. You explained that this was owned by 9 BILL NO. 050337 - 6/16/05 Viacom and now acquired by Tinicum Township; correct?
It is unlikely that this piece of ground could ever be developed, correct, because it is at the end of an airport runway?
It is not really desirable. It is kind of like throw-away land.
It most likely would not be developed, Councilman, due to its location of the runway and restrictions that are placed on development of land that close in, height restrictions and noise restrictions and whatnot.
Now, you are leasing it for a term, the first term, with a renewable of what? To be able to renew it, how many years, the first lease?
The first term is ten years, and then there is a ten-year option.
It is unlikely 10 BILL NO. 050337 - 6/16/05 that we are ever going to need to give this back. You have a runway there. Are you planning to close right at some point? 5 In other words -- I guess I will get 6 right to the point -- why aren't we just 7 buying this? Why would we get involved in a 8 lease that is required for safety purposes for 9 an airport? Why would we lease it? It doesn't make any sense. Why don't we just outright buy it, unless you plan to close this runway years 13 from now? 14
We would prefer to buy 15 it, but the township is not willing to sell 16 the property, is my understanding, Councilman. 17
Well, do they 18 have it as hostage here, they know we need it? 19 And 80,000 a year to lease a piece of land 20 that can never be built on, it seems to me that -- I mean, I don't blame them, to squeeze us for as much as they can here. But, are you confident that we have tried to buy this land?
Oh, absolutely. 11 BILL NO. 050337 - 6/16/05 And we do have representatives from the law department who can give more detail about the very extensive and lengthy negotiations that have led us to the point where we are today. We do believe that the economics are in the best interest of both the airport and the city, and that our ability to accomplish this project would be a tremendous safety enhancement both for the airport and Tinicum Township, as well, Councilman.
Let's talk about just for a second now, I don't want to belabor this, you made the effort with Viacom. And they said no because they were a business that potentially -- and I can't see how they would even ever utilize it, even legally to park cars on it, it didn't seem to be appropriate. Now, here is my question: Once it became the custody of Tinicum Township, I would like to hear about how serious the negotiation was to buy it, we own it, we're not involved in leases at 80,000 a year. Because I can't imagine per acre, 12 BILL NO. 050337 - 6/16/05 the value being more than -- I mean, I don't even know the value. But it would be, I think, to your advantage to own it; correct?
Yes. We would prefer to own it, Councilman. But we reached a point where we felt that that was an impossibility. And I would like, if possible, Jim Tyrrell could probably give you more detail about how -- what our efforts were to accomplish that. And I just did want to clarify. We have been talking about Viacom. Viacom basically inherited the property, because it previously belonged to Westinghouse as part of the Westinghouse plant that was located in that area. And Viacom ultimately, I guess, bought all of Westinghouse's assets or something. So they weren't planning on using it for any, you know, entertainment-related purpose, as far as I know.
Do the same standards apply to 9 left and 27 right and also the other end of the runway? Now, will 13 BILL NO. 050337 - 6/16/05 all the standards be equal in every possible safety area?
This is the only area that you don't have a safety area that complies with the new regulation?
That's correct. So with four runways, we have eight safety areas. Seven of them are compliant with FAA regulations today, and this would be the eighth one.
The only thing I would like to hear from, the question of how serious did we negotiate with Tinicum just to buy it outright?
Mr. Councilman, we actually made Tinicum a series of offers to purchase this property. And, in fact, we agreed to buy three or four different sized parcels, whichever would work best for the township. And, quite frankly, they declined our offers on each and every count.
Other than financial, that it is a better deal for them 14 BILL NO. 050337 - 6/16/05 to grab the 80,000 a year, what would be their motivation not to sell it? They are never going to be able to utilize this for anything; am I right?
They have indicated they would utilize part of the parcel for parking of automobiles. I'm not sure how much of the 21.8 acres they could actually use to park cars, but they did insinuate that use.
So if you had to come up with a rationale, that would be a good one, that you would use it for a parking lot.
Also, if I could add, my personal impression is that there is a general sense in the township, there is a general opposition, if you will, to the notion of expansion of the airport, per se, by actual acquisition of land. And this lease, essentially, was a compromise that would enable us to make the safety enhancement at what we thought was a reasonable economic price without literally selling us the land and ultimately defying the will of their populous, if you would. 15 BILL NO. 050337 - 6/16/05
But this expansion you really couldn't do much with because the next step is the river?
Are there any other questions from members of the committee? Thank you. Is there anyone else to testify on this bill? Good morning.
Good morning, Mr. Chairman, members of the Committee on Commerce and Economic Development. My name is John Herzins, Deputy Commissioner of the Department of Public Property. I am here today on behalf of the Commissioner, in support of this bill 20 authorizing the City of Philadelphia, through its Department of Commerce, Division of Aviation, and Department of Public Property to control approximately 21.8 acres of real property located adjacent to the Philadelphia Airport for expansion of the safety area at 16 BILL NO. 050337 - 6/16/05 the end of the runway. Rent will be paid with monies from the aviation fund, with no General Fund impact. The Department of Public Property supports this measure. And, accordingly, I respectfully ask that the City Council Committee on Commerce and Economic Development approve Bill No. 050337. Thank you.
Any questions from members of the committee? Is there anyone else to testify on this bill? Seeing none, we will move from our Public Hearing into a public meeting to consider Bill No. 050337. (Public Hearing concluded.) - - - 17 COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC MEETING of the COMMITTEE ON COMMERCE & ECONOMIC DEVELOPMENT - - - Thursday, June 16, 2005 - - - Public Meeting conducted by the Committee on Commerce & Economic Development, held in Room 400, City Hall, Philadelphia, Pennsylvania, on the above date, to consider action on the following: BILL 050337 - - - PRESENT: COUNCILMAN W. WILSON GOODE, JR., Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN JUAN F. RAMOS COUNCILMAN FRANK RIZZO COUNCILMAN FRANK DiCICCO COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN MARIAN B. TASCO - - - 18 PUBLIC MEETING - 6/16/05
And I will ask Councilman DiCicco for a motion on the bill. COUNCILMAN DiCICCO: Thank you, Mr. Chairman. I move that Bill No. 050337 be reported out of this committee with a favorable recommendation and a further recommendation that the Rules of Council be suspended. (Duly seconded.)
All those in favor? Those opposed? Bill No. 050337 is reported out of committee with a favorable recommendation, and further recommendation that Rules of Council be suspended so as to permit first reading of this bill at our next Council session. This concludes our public meeting. Thank you very much. (Public Meeting concluded at 9:40 a.m.) - - - 19 C E R T I F I C A T I O N I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Thursday, June 16, 2005, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COMMITTEE ON COMMERCE & ECONOMIC DEVELOPMENT _________________________ DEBRA A. WHITEHEAD