Yes. I'm just talking about in terms of the Penn's Landing, just Penn's Landing.
That's right. We're not using the General Fund or Capital Budget. We are taking a piece of the future tax.
Which won't exist unless we do this project, and reinvesting them in the project. And I would agree with your characterization. This is a bargain in that sense.
Well, if your analysis is right in any sense, I would say. Because the Kvaerner from government money, I think there's something like $400 million involved in federal, State, and local monies.
That will produce, by Kvaerner's estimates, about a thousand jobs. Some people think it's a high figure, some people don't. But here, I gather, there are about 1500 jobs, we're being told, will be coming about, and that the money involved -- even if you use my definition of City money, meaning the TIF money -- it's 69 or 70 million, as against some 400 million. To me, that's a big bargain, you know if it holds. Let me go on to the question of why isn't this City money? You know, based upon what you just said, and that's my feeling. We're taking away tax money that will come later. Say, if this project could be developed without TIF money, when any project gets developed -- there were a lot of hotels in the City that got developed without TIF money, right?
When we look at 198 COMMITTEE OF THE WHOLE - TIF BILLS historically hotel projects, Franklin Plaza -- City-assisted. We bought the land, leased it to 'em and guaranteed that loan. And, in fact --
No. What's happened there is there was a default. The City had to make it up. But since then, we have actually gotten the City off that guarantee it had made to City Hall.
No, not anymore. It's not as if that project happened unassisted. That hotel was assisted. Sheraton Society Hill -- $6.5 million urban development action grant, UDAG, a soft loan. For years, we got no money back. And Omni -- UDAG.
We're getting some money back now on the Sheraton Society Hill?
We got some of it back. 199 COMMITTEE OF THE WHOLE - TIF BILLS As the economy turned around, we got some of it back. The Omni at Independence Mall, urban development action grant. The Belleview, when -- after the second time around -- I think we all know it's been through a number of lives. The second time around, same thing, we did a guarantee of a portion of the financing on that project to make that happen. So it is not the case that hotels have just happened, quote/unquote, on their own. We have, as the public, participated in a number of those transactions. And, of course, in the current environment, we've had lot of people come to us and say, help me do -- you know, can I get some of that TIF money or HUD money or whatever, and we've been saying no more than we have been saying yes.
Could you -- just with respect to the last comment. Would you be able to furnish us with some information as far as requests for TIF money?
That would contain the analysis of why you've rejected it.
If your response in the memorandum could indicate the kind of criteria you use, so that it does not seem to be that anybody who asks gets it. That would be --
Now, in the last analysis, nobody can ever guarantee the success or failure of a business propose, right? You know, 201 COMMITTEE OF THE WHOLE - TIF BILLS it depends on a lot of factors. It could be maybe the design was wrong or maybe the design was right, but the economic times prevent the success. But in a situation like this, we've been talking earlier today about minority employment, minority entrepreneurship, why isn't it also fair to talk about the kind of wages that are paid? I assume in the construction industry that most of the jobs, or maybe all of them, are union wages. And I expect that they will be above what anybody calls this so-called living wage, what the young woman referred to before. But why wouldn't it be appropriate that when we're giving some form of government assistance, some form, without identifying whether it's City or not City money, why wouldn't it be appropriate and good for the City of Philadelphia to talk in terms of what can we do to guarantee or at least make more likely that the jobs will be held by actual Philadelphia residents? What could be done to make certain that there's a certain minimum pay level? Which, in the bill before City Council on living wage, I 202 COMMITTEE OF THE WHOLE - TIF BILLS think, is $7.50, something on that --
Okay, $7.90. What would be wrong, if anything, with our indicating -- maybe we can't enforce it -- with our having a policy saying we would like to have wages paid that would enable the economy of not only the family, you know, to be stronger but the economy of the whole City to be stronger? Because when families gain economic strength, so does the City.
Right. I'll try to make it a short answer, though it's a very complicated question. And as I said before, I spoke a little bit at the living wage hearing. As a personal matter, I'm speaking personally at the moment, I don't think the issue is whether people should or shouldn't earn that amount of money or have benefits. I mean, I have a lot of empathy for those issues for a host of reasons. But the question is, how that is done in a way that makes the most sense for the City long-term overall. And if we take a single 203 COMMITTEE OF THE WHOLE - TIF BILLS project and say, Pay this for this project, and the rest of the world doesn't change their behavior, and now you're the Simon group, and you're attempting to attract a tenant to this project, and they say, Wait a minute, I can put my store at Fifth and Walnut, and I don't have to pay that, and I'm in a competitive disadvantage paying this because my competitors in Cherry Hill or Pennsauken or King of Prussia don't pay that. Then what you do is you don't -- I'm afraid what you do is, you don't actually create 1300 jobs paying a living wage. I think what happens is you don't create 1300 jobs.
Well, isn't that the same answer with respect to minorities? I mean, won't some employers say, 'cause they always have said --
No. 20 (Unintelligible - parties talking over each other.)
This is an economic issue. This is an economic issue and I don't agree. You know, I think the issue with regard 204 COMMITTEE OF THE WHOLE - TIF BILLS to minorities or female firms or disadvantaged firms is one of access. It's not one of pay them more to do the work; it's make sure they have an opportunity to get a piece of that work in a competitive environment. The issue of the living wage bill is whether the City should establish within its 125 square area of miles its own minimum wage in a situation where it's not done everywhere else.
What the bill does is says we're going to do it only where we touch the project.
Well, why isn't fair for government, which represents all the people, the poor as well as the rich, the people who are in the middle class, those desiring to work themselves up to the middle class, every element, the rich people, City government represents all of that. It is using one way or another the power of 205 COMMITTEE OF THE WHOLE - TIF BILLS all of the people to make this transaction economically feasible. What is wrong in the City proposing to say, Look, we'd like to take care of all of the people? Isn't it possible to work out some sort of system? Because I think that any economic analysis would show that the costs would be absolutely minimal. I mean, how many jobs could there be that they would hire that would pay less than $7.90 -- if that's the figure -- an hour? I'm just saying that I don't think the City is making the effort because I think, from what I gathered from Mr. Simon talking here, I get the sense that he has a pride in what the company does. And I think the City would expand the horizons of the companies that it does business with if it would begin raising this issue. Maybe don't need a law if the City were to have a policy, you know, that would move in that direction. Maybe others would decide it's good business because, you know, sometimes companies say that things that pay off for working people are good. Wasn't there that big ad the 206 COMMITTEE OF THE WHOLE - TIF BILLS other day in The Inquirer showing how many years people have worked with them? And said, Whatever The Inquirer has done, the main credit should go to this list of people, who are employees. I'm just suggesting, and I won't belabor this beyond this, Mr. President, I'm just suggesting that the City ought to rethink its approach and maybe begin to raise and maybe with this company, this whole question to see whether -- how close can you get to the 7.90 as a guarantee? What would it cost? I'd like to have an analysis. What would if cost these companies? I think they'd make a -- if it's successful, they'd make a very great profit paying the living wage. And they could get credit not only for a great entertainment complex, but for a great human entertainment complex. Thank you, Mr. President.
Thank you very much. Mr. Hankowsky, is there any way of knowing how many minimum-wage jobs are likely to be created in this proposed Penn's Landing entertainment development? 207 COMMITTEE OF THE WHOLE - TIF BILLS
Our estimate at this point would that be out of that 1350 jobs, about 75 percent would pay greater than the living wage defined, and percent might be less than -- the 6 living wage being the 7.90. 7
So about 25 percent 9 might be between minimum wage and living wage. 10 And 75 percent would be above. 11 That's an estimate. Obviously, it's 12 going to vary by how many tenants actually go in. 13
I understand. Thank 14 you very much. 15 Are there any other questions of any 16 other Councilmembers? 17 (No further questions at this time.) 18
Is there anyone else 19 who wishes to testify? Is there anyone present in 20 the chamber who wishes to testify? Is there 21 anyone who wishes to testify? 22 (No response.) 23
If not, we will 24 stand in recess until tomorrow morning, at 9 25 o'clock a.m. sharp, 9 o'clock a.m. sharp. 208 COMMITTEE OF THE WHOLE - TIF BILLS (Adjourned at 1:32 p.m.) - - - 209 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, May 27, 1998 were reported and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE OF THE WHOLE BILL NO.'S 980238, 980301, 980304, 980305, 980306, 980307 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter