COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE OF THE WHOLE Room 400, City Hall Philadelphia, Pennsylvania Monday, March 11, 2024 1:00 p.m. PRESENT: COUNCIL PRESIDENT KENYATTA JOHNSON COUNCILWOMAN NINA AHMAD COUNCILWOMAN KENDRA BROOKS COUNCILMAN MICHAEL DRISCOLL COUNCILWOMAN JAMIE GAUTHIER COUNCILWOMAN KATHERINE GILMORE RICHARDSON COUNCILMAN JIM HARRITY COUNCILMAN CURTIS J. JONES, JR. COUNCILWOMAN RUE LANDAU COUNCILWOMAN QUETCY M. LOZADA COUNCILMAN ANTHONY PHILLIPS COUNCILMAN MARK F. SQUILLA COUNCILMAN ISAIAH THOMAS COUNCILMAN JEFFREY YOUNG, JR. RESOLUTIONS: 240029, 240038, 240075, 240078 240079, 240129 - - -
Members, please take their seats. Good afternoon. (Good afternoon.)
It's good to see everyone today. This is the public hearing and public meeting of the Committee of the Whole regarding Resolutions 240075, 240078, 240079, 240029, 240038 and 240129. I want to thank everyone for being here today. Mr. Christmas, will you please call the roll to take attendance.
A quorum of members are present, Councilman. And Council Lady Gauthier is now present.
Thank you. A quorum of the hearing is present and the hearing is now called to order. Mr. Christmas, will you please read the titles of the resolutions.
Resolution 15 240075, appointing Paul Levy to the Board of Directors of the Center City District. And Resolution 240078, appointing Louis Tice to the Board of Directors to the Old City Special Services District. And Resolution 240079, appointing Elizabeth Woods to the Board of Directors to the Old City Special Services District. And Resolution 240029, confirming the appointment of Adam Geer as the Chief Public Safety Director. And Resolution 240038, confirming the appointment of Renee Garcia, Esquire as the City Solicitor. And Resolution 240129, re-appointing James Aros to the position of Chief Assessment Officer of the Office of Property Assessment. This resolution is being held at the request of the Administration.
Thank you, Mr. Christmas. Will you please call the first witness to testify on Resolution No. 240075.
Good afternoon, Mr. Paul Levy. Can you please state your name for the record and please proceed with your testimony.
I have extra copies of it unless you have it. Good afternoon. My name is Paul Levy and I'm honored to be here this morning. And, Council President, congratulations. It's my first time being in Council since you've been Council President. Good to see so many people.
I would really be honored to serve on the Board of the Center City District. The CCD was first authorized by City Council in 1990 when the late Ron Rubin was the founding Chair and he incorporated or became the first Business Improvement District in the City of Philadelphia formed under the Municipality Authorities Act of 1945. I was appointed in January 1991 to serve as the first Executive Director of the CCD. Since that time I've had the pleasure of working closely with members of this Council and five different mayors as the CCD grew from a clean and safe organization to one that markets restaurants and retail, established the Homeless Outreach Partnership in partnership with Project HOME, has carried out more than $150 million in streetscape improvements and created five new parks, including Dilworth Park just outside the doors of this building. During this same period of time, you have supported the creation of more than a dozen other Improvement Districts serving diverse neighborhoods throughout this City. After 33 years of serving in a role as CEO of the CCD, I was pleased to hand off the leadership of the organization to Prema Gupta, who was appointed by the Board to serve as the new CEO effective January 1, 2024. And if you know Prema, she has extensive experience in economic development and public space management, working for both the University City District and for PIDC, and then for three years at the CCD starting just before the pandemic. She has hit the ground running as an excellent new leader of the organization. The CCD Board asked me if I would be willing to consider serving in an advisor role, and I would be pleased to do so as a new Board member of the Center City District. Thank you very much for this opportunity.
Thank you very much. Before I turn it over to my colleagues for questions, just from your perspective, and I know that this is an organization that is very near and dear to your heart and we watched you work to revitalize Center City, in terms of the future of Center City in your role as serving as a Board member of the Center City District, what's your perspective in terms of the obstacles and things that you believe that could be beneficial and thus revitalizing the health of Center City, which you will contribute as a member of the Center City District?
That's an excellent question. Having just come back from the West Coast and San Francisco, we're in much better shape than a lot of cities. Let me just start there. There are many cities that are having a much harder time recovering. And I think we are recovering as a city, one, because of the much greater diversity of our economy, health care and education, hospitality, the commercial office sector. Those cities with the greatest difficulty in recovery are heavily dependent on information technology, which is really what characterizes San Francisco. So, one, the diversity of our economy obviously is a keystone point. I think we also have -- this Council approved in 1997 a 10-year tax abatement for the conversion of vacant office to residential. Now, cities are trying to figure out how to do that. We converted more than 10 million square feet here in the last 25 years to residential. And I want to tell you a really key point that we've learned from a national study about recovery of downtowns before I talk about the rest of the City, is even in the city of San Francisco, which has the lowest recovery rate of the largest cities, those people who 4 live within to miles of their downtown office are back at 94 percent. Those who live miles 7 away are back at 40 percent. 8 Our numbers here are about 9 95 percent for those people who 10 live close by and about 50 percent for those who live 10 miles away. So the live, work downtowns that we have all been building has not only made good use of vacant real estate and converted that and animated downtowns, it has increased the return to work. And why I think that is so important as you all know is it's not just office building jobs. It's the janitor jobs. It's the security jobs. It's the building engineering jobs. It's the retail jobs. It's the transit jobs that come back. And so, my takeaway first of all is that the recovery will be better and is better here. We're No. 5 in the nation in terms of recovery. The cities that recovered the most are cities like Nashville, which are almost entirely dependent on entertainment and sports. Those are convention center, those are important parts of our economy, but they're mostly low-wage jobs. So the diversity of our economy has been really helpful. I know you are focused and you'll focus today on public safety. That is the number one issue, but it's not necessarily crime. It's the perception that things are not safe. And when you ask people what they're concerned about, obviously dealing with the mental ill or an aggressive, addicted person are at the top of the list, but people are also concerned about the absence of other people on the street, the absence of visibility. So the more we bring people back as tourists, as visitors but as workers, as students, the safer people will feel. And so, clearly at the CCD in the last two years we doubled the number of public safety people we've had on the street, uniformed unarmed individuals. Clearly, this Administration I think has made a really important statement about clean, safe and green as a city- wide priority. If we can't deal with that, we're not going go back to as a city. So I'm not sure if that's fully responsive to what you've asked. But as challenging as it is here, having seen a variety of other cities we are ahead of a lot of ones. We ought to be proud of what we've achieved and we need to build on that in every neighborhood in the City.
And just one other question: Just on some data I've been looking over, in Center City we have between to commercial 6 buildings that are either in 7 receivership or bankruptcy. Just 8 from your perspective, how do we 9 best utilize those spaces in the 10 future where it's obvious all of the buildings can't be converted into residential because the footprint just doesn't allow it?
But just being an expert in that, particularly in the Center City area, how best do you think we should utilize that in the future, those buildings?
Let's start with the fact that -- and I don't want to minimize the challenge if you're the owner of that building or if you're the City and looking to collect taxes. There's a calamity sitting there. All right. But the newspapers and the media tend only to report on the buildings in trouble. And the Class A office space while challenged is doing fairly well, so it's a whole inventory of older buildings and they obviously -- we took as I said 10 million of them out of inventory, so there's a significant more we're probably going to have to convert. I think there are areas that are near our universities and research institutions where life sciences is going to be a major new user of those. So there is going to be real estate that we don't have a clear future use for, and I don't particularly predict where it will go. But if you look at the Class A office space that's in much better shape than the really older buildings, and I think the particular challenge which is compounding this right now which is short term, is interest rates are incredibly high, and still coming out of the pandemic, construction costs, supply chain costs, so we have a public storm. And again, having lived through -- we created the Center City District in 1990 in a severe downturn. Many of us lived through 2008 and 2010 at the bottom of the cycle. It's about as depressing as can be and three years later we forget about it. I don't mean to minimize that. We're at a down-point. There are serious problems, but I think the reuse of these buildings for residential, for hotel, for life sciences and for the things we haven't invented yet. One of the things about being in the Bay area, they're inventing industries I've never heard about there. We need to be focused on what those are. I don't know yet. But I would be less pessimistic than some of the worst news I read, fully recognizing if you own one of those buildings, it's a very painful time.
And one last question: A recent report showed that in Center City, particularly in Rittenhouse Square area, we've seen a significant increase in residential growth and development. What do you think were the key contributors to actually individuals moving downtown in that particular area?
So there's been an increase of individuals moving in the Rittenhouse Square/Center City area most recently. And so, from your perspective what are the key contributing factors even in the midst of public safety that you put out there for individuals still moving downtown in that particular area?
I think, look, in every neighborhood in which we have great quality amenities, great parks or great schools, people will want to live there. The advantage of Center City and University City is that's half of the jobs in the City. And so, people want to live near their work. They don't want to commute that much, but they want to live near amenities. So that's true for all of the Center City and the surrounding neighborhoods at this point. And clearly, I know we'll be talking about this in terms of job growth and tax reform. We need to deal with the short-term issues. But with a more competitive tax structure we will have more robust job growth city-wide as well. But that's the driver of housing for me, people with decent jobs.
Thank you very much. The Chair recognizes Councilman Curtis Jones.
Thank you, Mr. President. Mr. Levy, and I call you Mr. Levy --
I call you Mr. Levy because you've earned it. And thank you for your service --
-- to our city. Thank you for your commitment to want to do a second tour of duty of being on the Board, and I know that doesn't pay at all. So thank you again.
Give us your perspective on relocating the Sixers Stadium to Market Street. Where are you at on that?
Is that going to affect your judgment on whether I get appointed to the Board or not?
Clearly that's not my decision to make. That's your decision to make. Let me start there. We're all familiar with what may be the challenges. I'm trying to focus on both. Okay. I think the opportunities are -and I just came back from the city of Sacramento. That's a city where more than half the employment is in state government and they're not back and the city is empty except the arena is a driver of lots of downtown activity and more people on the street. And Market East is a challenge street, right. So I'm less interested in the Sixers Arena alone. But if it's going to go there, if you decide that it goes there, it's the residential, it's the retail, it's the hotels. It's sites like 8th and Market that have been vacant since 1977 or 13th and Market that's vacant since '82, that could be a driver. I fully appreciate and understand the huge concerns that Chinatown has. And having just come back from visiting San Francisco, Chinatown was threatened in the '70s and '80s by the expansion of their financial district. They imposed height controls and historic preservation, and they have probably the second largest Chinatown in North America because controls were put in place to protect the place from the encroachment of high density commercial. So I see those as potential tools. Clearly, SEPTA's ridership is back at 55 to 60 percent. I see the advantage of putting an arena on the top of the Regional Rail System. It's a way of getting new riders, but I fully appreciate the concerns of surrounding neighborhoods of traffic congestion. We are able to accommodate 25,000 to 30,000 people at the Convention Center, at the Flower Show, but they come throughout the whole day. Games are peak arrival and peak departure. So I wouldn't put an arena downtown unless I had a very strong public transit plan, unless I had a really strong transportation management plan. It's not a one-and-done decision. Either put it there or don't put it there. If you put it there, you need to think about the redevelopment of the entire area. You need to think about transit. I would love to brand any new building there as the gateway to transit, not hide it. People remember what the old Amtrak station looked like in New York City before the new one? This is an opportunity to get a gateway to transit. I think we could have a gateway to Chinatown on Market Street. So I see the concerns. I understand the disadvantages. I see huge advantages. And again, what I would want to contribute to the thinking is don't just think about yes or no on the arena. If yes, what are all the other things needed to do. And if no, what's the plan for Market East which is lagging.
Good point. My only other question is you were a part of a strategy for nonviolent crimes alternatives to incarceration called Community Courts.
And what impact did that have on Center City's quality of life and would you recommend us to --
Yes, yes and yes. Just to be clear for those who were not here because it operated for about 12 years, and it was much more than Center City. It served almost a third of the City of Philadelphia. And what it was, was an alternative to incarceration. People who were picked up for a whole range of crimes could choose to plead not guilty and go the traditional system. But the overwhelming number of people who were dealing with drug addiction, mental health problems or just repeat offenders could plead guilty but be sentenced to alcohol treatment, get access to job training, get access to mental health services. We and many organizations provided work sites for temporary work. It got us out of the either-or choice. It's not criminal or social services. It's how you blend those together. And so, during the time it operated we had a dramatic reduction of quality-of-life crimes. I would strongly urge the reconsideration of putting it back together. And let me just say at the time we did it, Ellen Greenlee was the public defender and Lynne Abraham was the district attorney. It took us three years to get the two of them to agree. We had to go to New York City and look what they did. So anyone who wants to take this on needs to understand it's not snap your finger. That's a lot of coalition building, a lot of overcoming of very different points of view, but that's frankly one of the things I would more than prepare to work on because I absolutely think we need to restore it not only for Center City and as I said, it was a third of the City, it is exactly the tool of today. Not pure criminal justice, not pure social services, but the integration of those with job training and treating people in trouble as full human beings, not just punishment but services, et cetera. So please do consider bringing it back.
Thank you, Mr. President. COUNCIL PRESENT JOHNSON: Thank you very much. The Chair recognizes in attendance Councilmember Isaiah Thomas and Councilwoman Nina Ahmad. The Chair recognizes Councilmember Jeffrey Young.
Thank you, Council President. And good afternoon, Mr. Levy. A follow-up question regarding the commercial real estate in Center City, the state of the commercial of the real estate here: So you mentioned our Class A is doing wonderful in comparison to some other cities, but it's more our Class B and C properties that are in distress. So what are some things the City can do to attract more I guess property owners, business owners to come to rehab those facilities into a better commercial space, a better use? And what are some of those -- you mentioned you were on the West Coast and you may not know what those uses are, but can you give us some examples of industries you think that we should be trying to attract here to those Class B and C office spaces?
Yeah. I don't want to do that superficially, and that would take a lot more time. But we know, for example, that older buildings so long as they are near either Thomas Jefferson or Drexel or a Penn which have heavy research and medical capability have life science potential. So clearly understanding -- and those are really a broad range of very diverse jobs. So, one, you need to think geographically about the other uses. Clearly the closer you are to the Convention Center, the more potential it is for hotel. The 10-year abatement for conversion is in place. People always confuse the changes that were legislated downward for new construction. The full 10-year abatement is in place. Does that need to be combined with some maybe other additional state incentives or federal ones given where interest rates are? That would require more study. It may be we need slightly more powerful tools. Again, I don't want to offer that as an opinion without looking at the numbers. But the more we can put those jobs back, those buildings back to use, it's more construction jobs. And again, I always like to emphasize that any office building is not just high wage and midlife wage jobs. It's entry-level jobs, it's janitorial jobs, it's security jobs. So it's how we think about this real estate not just from the owner's point of view, and they have serious challenges. It's what's the economic development potential. So again, I don't want to be superficial. I think we need to look almost building-by-building. I was just talking with Job about the ensemble of buildings he has in Old City. Those need to be looked at uniquely in that setting given the location of the hospitality industry. But we need the focus of our Commerce Department and PIDC and this Council to think strategically about that.
Thank you. A couple more questions. Can you talk to us about the diversity of the Board and executive leadership at Center City District and its staff excluding those that are contracted workers?
I said can you talk to us about I guess the makeup, the Board's compilation of CCD, the demographic of the Board, the staff at CCD?
Okay. Absolutely. Starting with the Board, the Board is approximately a third African American, a third women and a third Caucasian men at this point. That's sort of a break-up of the Board. From a staffing level, our sidewalk cleaning program, all the cleaners are represented by SEIU. That's largely a minority workforce. Our community service representatives are our uniformed unarmed individuals, also unionized workforce are a very balance mix of African American, Hispanic, Asian and Caucasian workers. Professional staff, I don't have those numbers in my head, but it has grown steadily more diverse. And with my replacement as CEO with Prema, we're doing a whole lot better on that front now too.
Thank you. So if it's helpful, if you're able to provide us those numbers, that would be --
And outside the street sweepers, I know they are not Center City District employees, per se. They're contracted out. So can you provide us the numbers that are actually Center City District employees?
Absolutely. Great. And just to be clear, our sidewalk cleaning is an outsourced function. The bike patrol is outsourced. The community service representatives are our direct employees. Our homeless outreach teams are our direct employees and professionals, so I will give you that breakdown.
Thank you. And one more question: Can you tell me, just give the Council an overview just in your opinion on how does Center City's improvement impact our communities and our neighborhoods that are beyond Center City.
Sure. If we start with the fact that 42 percent of all jobs in the City are downtown, another 10 or 11 percent are in University City, they are at the center of our transit system. percent of the working residents 20 of each of your Districts work in 21 Center City. And the interesting 22 mix of jobs in Center City is they 23 are one-third that require a 24 college degree, one-third require 25 an Associate's degree and one-third require only a high school diploma. So we have going back to what I said before between office, health care, education, hospitality and retail an incredibly diversified economy creating very, very diverse jobs. So we're incredibly fortunate to have a hub-and-spokes transit system that feeds this. And when we have this many jobs here connected by transit, it I think gives us the most accessible jobs in the region in many ways. Is that responsive to your question?
You're welcome. First, I want to also acknowledge Councilwoman Kendra Brooks who's in attendance and also Councilman Mark Squilla. The Chair recognizes Councilman Isaiah Thomas.
Good afternoon, everybody. Thank you, Council President. Good afternoon, sir.
Couple quick questions for you. You talked a little bit about sale of buildings and real estate values of buildings. If we do not do anything and continue on the same trajectory that we're on, can you give us an estimate, an approximate, how much revenue in City dollars will be lost based on the value of those buildings going down because those other spaces aren't filled?
Yeah. No, that's a great question. I can tell you exactly within the boundaries of the CCD we have lost about 15 percent of the assessed value since 2020 in office buildings, but that was offset by a percent increase in residential apartment buildings, so that diversification is really key. And again, from the CCD's point of view an apartment building is paying like an office building. Because the City is so much more dependent on the wage tax, that to me is the most vulnerable location, I think most vulnerable source. I think you know that the City refunded 90 million in wage tax revenue to suburban residents in 2021. They refunded 85 million in 2022 and 45 million last year when the City mandated you had to be directed to work from home in order to get a rebate. But the City is collecting much less wage tax from suburban residents who used to work downtown. Think about the accounting firms, the law firms, the engineering firms who have offices in the suburbs. All right. I live in the suburbs -- not me, I live in Center City. But if I lived in the suburbs and I could go to my suburban office, the City no longer withholds wage tax for me. So I think we've lost about 40 to 50 million in suburban residents who are choosing not to come downtown right now because they can work in a suburban office. Again, I believe we need to look particularly at this moment at our overall tax structure. I mean, I have long felt that we don't fund ourselves in quite the right way. But I think we're incredibly vulnerable now on the wage tax because those numbers -- which are national by the way. People who live miles away are back at half the rate of people who live 3 miles away, if you add on top of that work from home and get a 2.5 percent raise because you're not paying the City wage tax. So we have a vulnerability on real estate in downtown. If we continue to lose residents from any neighborhoods, the biggest tax base is really the residential tax base, which we need to be careful about. So I don't want to be doom and gloom here. We formed the District in 1990 when people were incredibly pessimistic. We lived through 2008 and '10. We are on a similar crisis now and we need to be strategic. The questions you're asking are exactly the right ones, where are our points of vulnerability but what are the investments we as a City need to make as we did with the Convention Center, as we did with sports teams, as we did with the 10-year abatement, as we did with office buildings. We can lead the recovery here, but the status quo will not be our way out of this.
-- I know that a lot of my colleagues in this legislative branch of government are optimistic as well. One of the things that we've done over the last couple of years is gradually reduce the BIRT and the wage tax. And if you can talk to us a little bit about decisions that this legislative body has made --
-- and the impact that you think it has on the recovery of our economy right now --
-- as well as that optimistic perspective that we're both talking about as it relates to the future.
Sure. Let me start with a non-optimistic perspective. In this morning's Inquirer in the Business section 6 was a major technology firm which signed a lease in the suburbs because all their workers were out there and they were excluded from the wage tax. All right. That's the negative side. We have lots of advantages of living and working in the City, living in its neighborhoods, et cetera. I think the key issue, we need the wage tax, we need BIRT, we need real estate to support the services in this government. Absolutely the case, and you can't slash things and cut people's services. But we are among the slowest growth cities in jobs, right, we grew less than percent the couple of years. There are other cities growing at 2, 3, percent a year. We need more robust job growth. And if I'm a business person making a decision about where to locate my business, I don't want to know this year's numbers. I'm going to look around for the length of my lease, or years. 10 So if Council sends a signal that we have a plan over 5 and 10 years for a gradual reduction in taxes, that is predictable. That's not every year what's going to happen, but you develop a five-year plan and say this is what we're going to support, predictability gives assurance. You need to create a schedule that you can afford, that we can afford. But taxing a declining base of jobs and residences, which is what we did in the '70s and '80s, is a formula for failure, right. So I think we need to be strategic about tax reform. We need to meet current needs, but we need to say that we want to send signals for all types of businesses, small business, minority businesses, large businesses, that we want you here and we have a plan, not necessarily tomorrow, but next year, the year after, it's going to get more competitive. That's a general question, I know. But I'll be more than glad to talk about that in more detail.
Thank you. Last question, I'm going back to the building. So I'm wondering there's been dialogue about the City purchasing some of the bigger buildings as the value has gone down to avoid bankruptcy. Based on your expert opinion, is that a good philosophy for us to try to essentially brainstorm or does it create a slippery slope of unanticipated problems that will possibly put us --
I want to give a lot of thought to that. My quick reaction is if you don't have a use for it -- what will you do as a City with a vacant building if the private market couldn't do something? You figured how to use the former Inquirer building, right. I mean, there are buildings that could have other uses. But I think that requires -- let me not give you -- that requires a very careful analysis. I think again if you're the owner of a building and you've been foreclosed on and you're taking a beating, right, that's an awful situation. But if you're the buyer of that building at one-third of what it was before, you have the opportunity to bring in tenants at a lower rate. It's very painful. I mean, I don't want to wish this on anyone. The private market can be very entrepreneurial with low-cost buildings, so I wouldn't automatically assume that the government needs to step in and buy out buildings unless you have a strategic plan for them.
Thank you. The Chair recognizes Councilmember Rue Landau.
The Chair recognizes Councilwoman Jamie Gauthier. Excuse me, Audio Visual, she is on the screen. Did you touch your button? COUNCIL TECH SUPPORT: (Inaudible).
Okay. The Chair now recognizes Councilmember Katherine Gilmore Richardson.
-- acquiesce to Councilwoman Gauthier if you don't mind.
Since we're on this topic, the tax structure, I just wanted to ask you a question. I understand the argument for reducing the City's reliance on the wage tax, but in your opinion as we continue to reduce the wage tax and the BIRT tax, what do we replace that revenue with in near term and how do we replace it in a way that's more than speculative, I guess independent on businesses that might come if they catch our signal?
That's a great question. And let me be very clear, having spent the last 33 years running an assessment district, we can't deliver services unless we have tax revenue. So I fully appreciate and identify with that question. You can't wish away taxes and then pretend services will come. I want to be clear about that. We are very unique among American cities in being as dependent on the wage tax as we are.
Most cities frankly rely more on the real estate tax. And it's not that they charge more in real estate tax. They have a more robust job base. So my big picture is that because we relied so much on wage and business taxes, we have driven down demand for businesses to be here and lowered the real estate tax base of the City, which obviously supports the school as well as City government. So I am not saying raise real estate taxes. That's why I think it's got to be strategic. If you have a more competitive tax structure -- and by the way, our real estate taxes are cheaper than in the suburbs, right.
But our cost of doing business between wage and BIRT and several other taxes are much higher, so we give ourselves a competitive disadvantage to support very needed services. So to me it's long-term when you drive down the dependence on wage and BIRT. You increase the tax base of the City without actually raising taxes. I have had that experience. The CCD has never raised its rates in 33 years. But we started with a $6.5 million budget in 1991. We have a $31 million budget this year, because of the diversification, the growth in demand, the more people who want to live and work, hotels and investments that you've made. So again, it's not snap your fingers and solve the problem. It's have a strategic plan. There's only one city that's reliant on the wage tax other than Philadelphia and that's Detroit, and Detroit doesn't have a very strong job base either. So I think again we need those revenues today, but we need to diversify and expand other revenue sources. And I think the real estate tax, not raising my real estate taxes as a resident of yours but having more businesses want to be here, generating more demand for commercial and industrial real estate, I think, is the long-term strategy.
The Chair now recognizes Councilmember Katherine Gilmore Richardson.
Thank you, Council President. And thank you, colleagues. And thank you so much, Mr. Levy, for your service with City Center District --
-- and for all the work you do. I certainly enjoy hearing some of the concerts at lunchtime in --
Okay. I thought you were going to complain about how loud the music was so we're okay. Good.
No, I'm not going to complain today. And all of the Center City SIPs programs that I think have been very popular as well as Restaurant Week and all the things that you all do in Center City District.
I wanted to go back to one thing you talked about relative to the slow rate of job growth in the City of Philadelphia. If you could talk about specifically in your area in Center City the type of jobs that have grown. Even if it's been slow, have they been low-wage positions? Are they middle-market jobs? Are they high-end? What's the trend there?
Look, I think we all went through the awful experience of 2020 and 2021. We are back at a higher level of jobs in 2024 than we had in 2019. And the good news is we went way down and we came back up again, so let's say we're in recovery. But if you drew that line, there are many cities where that line goes much faster upwards, so that's my bigger picture. I think we've been fortunate until this particular period in which we've grown all of the above, which is when you grow high-wage office jobs, you also as I said drive support jobs within those buildings. You drive jobs for the transit workers, for the janitors, the security guards, the building engineers. You drive retail demand. Those tend to be lower-level jobs obviously. The hospitality industry, that's been a great investment this City has made, the Convention Center and tourism marketing. And those are very diverse jobs. So again, I go back to those numbers. In the downtown, it's one-third, one-third, one-third. One-third requires a college degree. One-third requires an Associate's degree. One-third requires only a high school diploma. We've done well in all those, but we've not done fast enough growth in all of those areas.
Okay. So we've done well but the speed is what's lagging, right, the speed of --
Exactly. I mean, the diversity of jobs we've done well at. And we have lots of good programs to engage people and train people for those. It's the rate of growth, it's the speed of growth, which we need to do much better about if we're going to solve poverty in this City.
Okay. Great. And then my last question since some of my colleagues already addressed some of the other questions I had, it's relative to the contracts that you all have with Center City District, recognizing that your budget has grown sizably over the years, even since I've been here. If you could talk about some of the -- or not some, but the percentage of contracts that you have with minority vendors, with women business owners and also disadvantaged business owners?
Let me do what I promised Councilman -- the other Councilmember. I'll get you those numbers specifically because they're not in my head, but I want to give you an accurate count. But we have a very strong commitment on the construction side, on the service side for making sure that our contracts are diverse. But let me give you -- I promise to follow up with detailed numbers.
Okay. And even specifically for particularly the contracts that are in and around City Hall for folks that are working here. I'm interested in all of them, but obviously the folks that are working on the quadplex in some regard.
Thank you very much. The Chair recognizes Councilman Mark Squilla.
Thank you, Mr. President. Thank you, Mr. Levy. Appreciate your work and ideas. On the front of the vacancies, as we see our Market East, even Chestnut Street and Walnut Street, we have a lot of vacancies. Years ago Center City District had a plan with some art installment and things like that, working with South Street and some other folks on how to incentivize storefronts, how it looks, how to encourage more people to rent, but also there are certain landlords and people who are comfortable leaving these places vacant. What are some incentive things that we as a City can do? And I know New York had vacant property fees and fines and increasing over time. What are things that we could do to encourage people to rent these and maybe if it's not at the top rent that they want or other ways to really fill in these vacancies or let the people know we don't want to have these vacancies for long periods of time?
Yeah. I mean, let's start with the simple thing, that -- and it's something we've tried to do and I think we need to do in each neighborhood, which is don't just put up brown paper and block the window, right. You need to animate the window even short- term. I don't know if we need ordinances or just all the outreach by the Improvement Districts maybe. A little bit of graphic design services could be donated so that we could get these things to look better. And I want to be clear, I was just in as I said San Francisco and I was just in Sacramento. This is a problem across the country. It's not just unique here. I think rather -- I mean, I think what we probably can do is a number of -- there's a lot of people in the real estate brokerage community. I think a couple of simple public forums for some of the commercial corridors about who's in the market, what are rents, you know. If you're still holding on to whatever that number was, I want $40 a square foot when the markets $12, nobody likes -- it's like you don't want to lose value in your building, but as a strategy I think we need some good information coming to owners about where the market is, who the tenants are in the market. We're not going to mandate people rent to somebody, but giving them good information. And we're more than glad to help with that in that process as well. Just to put in the minds of those owners, here are some of the options that you have. Now, they're clearly types of businesses that you and I would be glad to prohibit from happening in a lot of these areas, and that's another tool. But I think we need to give people information. We don't have that many incentives for retail, but we may need to look at that in some neighborhoods as well.
How about as far as certain landlords that own a lot of properties that have no interest in that? Is there any option that we have?
I mean, clearly making sure that they're current on their permits, on their regulations and their taxes is the leverage that you do have. And we all get frustrated, and some of them are truly in trouble and I don't want to beat up on them because it's a difficult time. But some owners are less than responsible owners. And I think in City government you have some of that information that becomes leverage.
Yeah. You don't want to throw the baby out with the bath water and --
-- you know, hurt the people who you really want to try to help, but in the other --
You don't want to create an environment where a business says I'm not coming to Philadelphia because they just beat the hell out of me, right.
On the other hand, there are people who are irresponsible with properties. I've seen it for years.
And I think we need to wrap our heads around it and come up with some -- whether it's working with Commerce. I know we have Storefront Improvement programs. I know we have other programs, and maybe it could be for a vacant property program. Maybe we work through Commerce to get a grant out to people who are interested and we can help market that.
Absolutely. This is the time to be creative. One of the people who I worked with out in -- I was on a ULI Technical Assistance Panel with the former Mayor of Pittsburgh Tom Murphy. And Tom, those who remember him basically said, look, when we took over with declining steel mills we said, let's take percent of our operating budget and instead of spending on operations, spend it on strategic investments for the future. We're at that moment. This is a crisis moment for this and all cities. We need to reimagine our commercial corridors. We need to imagine many business areas. We need good intelligence, but we need some strategic investments here in industries that will grow. That's not easy, but we're a new Administration committed to that. I think that's the strategy now. It's not necessarily to be punitive. It's to be strategic about how we grow this economy again.
And last but not least, and I know we can have meetings and discuss it, but 2026 is coming soon and we're not going to wait for new developments and things like that to happen. As we market our City and look to encourage folks or people who live here to enjoy all the activities that are going to be coming throughout the City of Philadelphia, but also visitors, you know, putting a plan together for East Market, our Center City areas, and even our neighborhoods, we need to start thinking about that. It's only a year away. So --
You know that's music to my -- I just invite you all to go to 6th and Market today and walk west of City Hall and imagine you're a visitor from out of town, right. What are we offering, what are we showing or pick any area which we know is a major tourist destination that's near commercial businesses in your Districts. What's that walk? How do we improve that walk? We can't solve the market, but we can clearly improve the cues, whether it's landscaping, the good signage in windows. It's not the huge expensive stuff, but it's seeing not through our own eyes but through the eyes of somebody who's not from here, what signals are we sending them. These are easily done things. And obviously, you know I'm very focused on how we can do that on Market East, but I'm trying to help the folks down in Headhouse how do we do that and on South Street as well. Absolutely.
Thank you. The Chair now recognizes Councilmember Nina Ahmad.
Nice to see you in this setting. I had a quick question. You mentioned some tools like tax abatements. What about TIFs and can they be used effectively in this --
And also, the value that is given ahead from the future tax utilization, can some of it be earmarked to do public investment, public infrastructure rather than just to the developer?
Exactly. That's music to my ears, that idea. Because I think we've tended to use TIFs as a tool to assist individual development and that is an important use. Most cities create districts where they make public area improvements, whether it's streetscape, landscaping, lighting. I am very interested in the work we're looking at for the next phase of the Rail Park and what I call a pay-as-you-go district, in which we're developing revenue to maintain the park, potentially developing revenue to support affordable housing. We needed a tool for individual development, but there are cities that have done a much better job at spreading the benefits through TIFs. Now, there are cities that have abused it too. They've gone way too far and they've committed way too much money so it's a middle ground. But in the absent -- if you're as old as I am, you remember redevelopment money from the federal government. That's disappeared. Most cities have created tax increment financing districts to stimulate broader developments that the broad community benefits. I think that's exactly the right direction to go. I think there's an opportunity to do that. If you're going to put an arena on Market East, I think a TIF district is the way to address Chinatown issues, it's a way to address other issues. I mean, any other major project, how do you capture that increment and get immediate benefits. Again, it can be abused. They can be overreached, but finding the middle ground. I'd love to talk to you more about it.
So do you see your BID, PIDC, the City sort of creating a transparent system where we can actually see where the part that's set for the public investment is going? Is Chicago one of those cities that have done it --
Well, Chicago is a city that I think made very creative use and then probably went off the deep end --
-- a little bit, right. I mean, but I admire -- if you go to State Street in Chicago which was essentially their Chestnut or Market Street, they completely redid the street with tax increment financing and maintained it for a really long period of time and addressed many of the issues that we have today on East Market or East Chestnut. They used them very successfully in neighborhoods across the city. And then after Mayor Daley was there forever, it just got out of control as --
-- I think is the criticism. In California, they completely shut down TIFs because they felt they went too far, but there are many cities -- so my suggestion is to bring people in from the cities that made great strategic investments as well as people who made mistakes and kind of learned from the best and the worst and figure out how we use this as a tool. We need new redevelopment tools for all of our neighborhoods as well as the downtown. That's one that's within our reach, it's state law, but we need to use it well. And because the City's Budget Director is not sitting here, we're not taking his money, it's public money. It's the same issue, it's how you make strategic investments and meet current needs as well.
And a follow-up in terms of TIFs could be used for foreclosed buildings, all of those things. But could we also envision a fund set aside for this space where we are feeling so much of this foreclosure pressure, which is sort of invested in by all entities, particularly our philanthropic and our nonprofits, which are the corporate nonprofits. We do not have pilots really. So is there a way we can envision creating that to offset some of the paying debt that can occur with these financing structures?
Again, I don't want to overpromise what they can do. But we need to look at this as a tool to generate jobs, to generate public area improvements, to generate maintenance of areas. You don't want to just treat it as the City operating budget; here's an entity that's short on money, let's get them TIF revenue. There needs to be a reason, job generation, animation, et cetera. But I think it's really worth it and again with the new Administration strategically to look at this as a tool and learn from other cities.
Thank you. The Chair now recognizes Rue Landau.
No. 18 Not that I don't want to say thank you for all of your work --
Some spirit somewhere wants you to participate. But thank you, Nina. That's it at the moment. Are there any other witnesses to testify on Resolution No. 240075? (No response.)
Thank you very much, Mr. Levy. (Witness approached Witness table.)
Job, how are you doing today. Just state your name for the record and I have you testifying on Resolution 18 Nos. 240078 and 240079.
Good morning, Council President Johnson and all members of Council. My name is Job Itzkowitz and I'm the Executive Director of the Old City Special Services District. I'm here to testify in support of Resolution No.s 240078 and 240079, appointing Louis Joe Tice and Elizabeth Lizzie Woods respectfully to the Board of the Old City Special Services District. Joe Tice works in Old City as a practice manager at Accelalpha and he is also a long-term resident of the neighborhood. He has served for several years on Old City District's Economic Development Committee and Clean and Safe Committee. At its May 17, 2023 meeting, the Old City District Board of Directors unanimously voted to support the nomination of Mr. Tice. Lizzie Woods is the Senior Vice-president of Strategic Planning and Real Estate Development at the Delaware River Waterfront Corporation. Ms. Woods has served for several years on the Old City Economic Development Committee. As one of our nearest organizational neighbors, DRWC has played an important role in the growth and appeal of Old City, most notably with the currently under- construction I-95 Park CAP. DRWC has been an Old City District strategic partner participating in our Vision2026 framework and related studies and plans. At its July 19, 2023 meeting, the Old City District Board of Directors unanimously voted to support the nomination of Ms. Woods. This concludes my testimony and I'm happy to answer any questions you may have.
Thank you. Any other questions or comments from members of the Committee? (No response.)
Okay. I'll take one small question on behalf of Rue Landau regarding streeteries. (Laughter.)
Regarding streeteries, you had led the movement during the pandemic to help revitalize our neighborhood corridors, particularly in Old City around the concept of streeteries and there's a renewed interest in this body led by Councilwoman Rue Landau to look at the process on how we streamline streeteries in the City of Philadelphia to make it more vibrant to do business here in our city. Can you just briefly give us an update and your perspective on that particular process and the benefits of streeteries through our economy?
Sure. Thanks, Council President. And thanks to Councilmember Landau. I haven't drafted my testimony yet for that hearing, but I intend to be back right here at this table. We actually founded the Philadelphia BID Alliance in March of 2020, anticipating that we were going to have to have restaurants open at some point and there would have to be a way to serve customers without them being inside the rooms, inside the dining areas. And we looked at four solutions. One was allow tables and chairs outside. We live in a city. Just let someone set out cafรฉ tables and seats right in front of their business because the (inaudible) at the adjoining business, and then also in the street. And Old City in fact was the first neighborhood that had a street closure on Second Street between Market and Chestnut to allow for all of the restaurants to come out every weekend, largely with the generosity of the Parkway Corporation. We had to shut down one of their lots every weekend for an entire year. And those allowed our restaurants to survive. Our restaurants would not have survived throughout that year and into 2021 without those streeteries. But what we learned was that people loved them, right. Residents loved them. The businesses obviously loved them. We also had recommendations -- so the BID Alliance put out a 2023 policy agenda that spoke to this a bit, had some recommendations. It's at philabidalliance.org. I'm happy to share it in advance of that hearing. But one of the ways to make it I think is to pre-approve some designs. There are a lot of national companies that manufacture them. There's no reason they have to be national. Shift Design can build streeteries. DIGSAU in Philadelphia can approve streeteries. And while I had hoped that would come out in the regulations, it is possible to put it in the legislation that says, here's three things, here's the craft crash standard that you need, here's the width you can have, here's the depth you can have depending on the width of the parking lane. And I think it's just something that makes living in the City great, but clearly there's been a problem with the process where no one has returned back to building streeteries. So we had maybe a dozen in Old City. I don't think we have any right now.
Thank you very much. The Chair recognizes Councilwoman Katherine Gilmore Richardson.
Thank you so much, Council President. And thank you, Job, for your testimony. I just had a very quick question, something that I actually saw on social media this morning. And I hope that this particular business is in your service territory. How do you all work to support businesses who have impacted by vandalism? I saw something on social media Cray Taste being vandalized. And so, I just wanted to put that on the record to ensure that they are receiving appropriate services and assistance from --
Great. Thanks. I'll check for that. I haven't seen that yet. We do a few things. Our street cleaning crew, our ambassadors are able to do basic graffiti removal with property owner permission. If we can't get that permission, we'll call it into CLIP and CLIP is really -- everyone here knows how great CLIP is and how quickly they can come out to remove that. We've had a couple of issues with broken windows. Sometimes if someone has limited mental capacity and it's not --
We actually -- I'm not sure if any other neighborhoods have this. We have a daily foot patrol officer, Officer Al Macchione. He works the District Monday through Friday 10:00 to 6:00. And so, he'll come in and review tape. We have cameras in our office, so sometimes I'll find someone. If it's the same individual, he knows who that person is. And then when that happens, if their insurance isn't covering it, we'll refer them to the Storefront Improvement Program because there's no reason that that program can't be used to support some of the expenses related to some of the damage that may have been caused.
Okay. Well, thank you so much for the follow-up, but I just wanted to mention that because they are an important minority business in Old City, and I think they've been doing a wonderful job. So thank you very much.
Thank you. Are there any other questions or comments from members of the Committee? (No response.)
Hearing none, are there any other witnesses to testify on Resolution Nos. 240078 and 240079. 2