Sorry for the delay. I have by job grade. In our executive job grade we have 117 total -- I don't have a calculator with me -- of which 56 are females and 16 are minority. And that's just in our executive top level job grade.
What types of positions do you anticipate having with the 150 future jobs?
Housed here in Philadelphia is a number of things. It's basically our U.S. headquarters, so you 89 Whole - 3/30/04 - Bill 040157 will have executives from our Claims Department, from our Finance Department, from our Underwriting Departments. We have significant accounting staff at Two Liberty Place today, so there will be a lot of professional accountant positions there. And then our Philadelphia region where it's largely underwriters that underwrite insurance risks located in the Mid Atlantic territory is something that we're growing. And a significant portion of the asset staff will be underwriters for the Philadelphia territory.
So, actually, you know, I think Councilwoman Brown mentioned that or someone did, that Philadelphia is trying to retain college students here in the area. But it sounds like that this may not be a company where an entry level person could become employed.
No. Actually, we have a significant plan with Temple and a number of universities here. I think last year 90 Whole - 3/30/04 - Bill 040157 alone we hired in excess of college students just to work here in Philadelphia They are phenomenally bright. And they come in as junior underwriters, and then move up throughout the ranks. They can come in as entry accountants and move up throughout the ranks. One of our major initiatives is basically to grow our staff by training and hiring our own. And Philadelphia and the universities here in the talent pool is tremendous for us to be able to do that.
Okay. Is 15 there an equal opportunity plan for 16 employment, to increase the level of 17 minorities that are employed there, other 18 than the construction jobs? Talk about 19 that. 20
This is Kaywin Gales. He's our head of Human Resources at HUSA.
Thank you. Absolutely. We monitor all of our promotions, as well as our hires within the organization. We post all our positions internally, as well 91 Whole - 3/30/04 - Bill 040157 as externally, using Career Builder and monster.com. As Susan mentioned, we are working actively with Temple University, as well as Drexel University here in the City. We are now establishing a relationship with Howard University in Washington, D.C. for the recruitment of diverse candidates to join our work force. That's ongoing. As I said earlier, we monitor each quarter our movement of our employees within our work force.
Okay. I'd like to have information directed to the Chair on your employment opportunities and knowledge skills and abilities and competency that one must have or should have to seek employment there, to apply for a position. You can give that to the Chair.
Thank you. Thank you, Madam Chair. 92 Whole - 3/30/04 - Bill 040157
And we'll be happy to distribute that information to all my colleagues. Councilman Rizzo.
Thank you, Madam Chair. Good morning. Mr. Fina, I'd just like to go back and refresh my memory on some of the TIFs that we've already granted. Looking back at the Convention Center garage, the Avenue of the Arts garage, the report here suggests that the cost per job for the Convention Center garage was $152,000 for every job, and the Avenue of the Arts garage at $242,000 per job. That's Office of the City Controller. Looking back at those two projects, now that they've been around a while, could you just comment on the requirement for TIFs for those two facilities?
I believe both those calculations were premature calculations by the Controller. At the time the retail had not been 93 Whole - 3/30/04 - Bill 040157 occupied as quickly as the garage, so the employment was slower to occur. Therefore, when you do an earlier calculation like that, it's going to appear that the costs are much higher.
Well, what are the costs? You're saying these are in error, the Controller's report is in error?
Yeah. It's just a matter of how you -- how you calculate. They took the sum of the total TIF revenue stream; not the amount of the TIF note, not the amount of the TIF loan, but the repayment. And we do not calculate job creation on that basis. We don't divide the jobs into the total debt service that's paid. An example, an average person pays two-and-a-half times what their mortgage amount on their house is. But when you look at it, you say your mortgage is X. You don't say it's two-and-a-half times X. And by doing that calculation, that's a calculation that economic development agencies do not utilize. The 94 Whole - 3/30/04 - Bill 040157 Controller decided to do it on that basis.
Yes. Well, I sent a letter -- I sent two letters to the Controller. One was the letter -- his response to his letter just on this TIF on 436 Walnut TIF; and the other was on the annual report that he did. He had a section on TIFs about it. And I pointed out a number of the technicalities that I thought he utilized that economic development agencies would not utilize. And therefore, it made the situation look much more exaggerated than it was.
Let's just go back to the Avenue of the Arts garage. As a professional, looking back at that TIF, based on the, obviously, numbers that aren't correct in front of me, could you 95 Whole - 3/30/04 - Bill 040157 just comment on that particular TIF, the benefit, the job creation --
-- the job retention that has occurred with the Avenue of the Arts garage.
Yeah. Garages are very high because there's not -- you don't need a lot of employees to manage them. Meaning -- High, meaning a lot of public subsidy per job.
Well, because the Avenue garage -- Avenue of the Arts garage was needed for the Kimmel Center. They needed that garage, otherwise the Kimmel Center -- And there's where your indirect jobs were created.
But if it was needed by the Kimmel Center, why did we need a TIF? It was going to make somebody money for somebody that built the garage, correct? 96 Whole - 3/30/04 - Bill 040157
No, no. I'm not talking about the Kimmel Center. I'm talking about the garage. My point being, if it was needed -- Somebody made a decision that it was needed. Now you're telling me that maybe it wasn't needed because the Kimmel Center is not making money?
No. Just the opposite. It was needed to support the Kimmel Center.
I understand that. But why did we have to do a TIF to get somebody to build a garage that was going to be a money-making... Am I to assume the garage is making money?
Yes. But all these 97 Whole - 3/30/04 - Bill 040157 projects make money. I mean, that's --
-- the system. But the capital -- the development cost on a private sector, capital markets basis, was insufficient for that garage to be built.
Do you believe that the strategy for anyone that is planning to relocate, part of the process is to ask for a TIF? Do you believe that that's kind of like the standard operating procedure, that anybody that wants to do anything, go for it, try, you can't -- it can't hurt you to ask? Do you believe that that's become part of the culture, to go after a TIF?
Councilman, that's not so. That has not occurred. It's not part of the culture.
No. We've only closed nine TIFs. We do 100 transactions a year, PIDC does. And we've closed nine since 98 Whole - 3/30/04 - Bill 040157 1996. So you can see that it's a very small percentage of our total transactions.
Thank you, Madam Chair. A couple of these questions are probably more for Susan Rivera or anyone else from the company. Let me just say that I have some -- I have high regards for this company. In the mid to late '50s, I remember as a child this company knocking on my family door selling an insurance policy to a new -- to a new migrant to the area. And the person spoke Spanish. And at that time my parents were not bilingual. And my father still tells the story of this company, of how the insurance man became almost a part of the family, when we knew very few people in this City. 99 Whole - 3/30/04 - Bill 040157 And he kept that insurance policy until just probably less than a decade ago. So, I have a historical piece to contribute through my family with our relationship with this company. And I sure would like -- I sure would not like to see this company leave this town because we have not found a way to keep them in this City. I have been a construction worker most of my adult life. I retired from construction to become a Councilman. And I don't regret it. And I learned a lot in the field as a construction worker. So every time I sit here in this City Council, and I see the possibility of jobs, this construction worker is very interested always in what's going to create jobs, especially in that industry where I acquired a couple herniated discs and a couple nips and scratches here and there over the years. So when I see that you're going to create 206 construction jobs, I say, I know at least 200 construction 100 Whole - 3/30/04 - Bill 040157 workers that are out of work now that can use this work. And that although you talk about providing permanent jobs, I realize that construction jobs are not permanent. But through the eyes of this construction worker, when I see that you're going to start this project in this year, and it's going to wrap up somewhere in the year 2006, I see a good run, and I see the possibility of making some money and being able to maintain my family. And these construction workers are looking at this. I passed it on to some of my -- to my friends. I passed it on to other people, that this -- that there's going to be this major renovation at 436 Walnut Street. Are you going to -- Are these going to be union jobs? I see someone from the company back there nodding this way (Indicating).
Well, then, I'll do the same, Councilman. 101 Whole - 3/30/04 - Bill 040157
Susan Rivera says yes. So these are union jobs. But also you talk about equivalent permanent jobs. And by the description of the work that you do, it seems as though you might, although you have some clerical positions -- correct me if I'm wrong -- that they are many high level management type of positions and executive positions; is that correct?
I believe Susan gave a fairly good presentation of the diversity of the positions that will be offered, from accountants to clerical, to underwriters, to junior underwriters, and to executives.
I guess what I'm getting at is that for you to -- between the clerical and the executive, there's this level of people that need to be highly trained, maybe highly educated. Is that so? 102 Whole - 3/30/04 - Bill 040157
Well, what Susan indicated, that last year they hired 4 individuals that came right out of 5 undergraduate school for positions with 6 them. So, they may be highly educated, but 7 they're probably not highly trained. 8
And even though 9 your -- your work force from Philadelphia 10 is significant, I would ask you to consider 11 a program or maybe you do -- maybe you have 12 it -- a program that will help train 13 Philadelphians in these positions that you 14 have in your company, so you'll have a 15 bigger pool of Philadelphia workers at all 16 levels of your company. 17
Kaywin Gales, Executive 18 Vice President, Human Resources, ACE INA. 19 Presently within ACE we have a 20 variety of training programs for all levels of employees. Those individuals who are hired into underwriting or accounting or whatever function an individual may be hired to, we do have a tuition reimbursement program where we provide 103 Whole - 3/30/04 - Bill 040157 tuition assistance to our employees. It's one of the best in the industry. We're very proud of that. We also have programs in place where employees can get professional designations and take advantage of those programs as well, as well as on-the-job training. So we have put in place an internal program, both for technical training and leadership training for all of our employees.
Do you have any outreach into the Philadelphia community to make known these jobs that you have and these training programs that you provide?
Well, one of the things we're doing, we work with several agencies within Philadelphia. We work with Inroads Philadelphia, as well as Aspira, to increase entry level hires into the organization and reach out to Philadelphians. We are also very active with things such as People's Emergency Center which is 104 Whole - 3/30/04 - Bill 040157 over in West Philadelphia. That is a homeless center for children and youth. We work with volunteerism to train individuals for jobs within Philadelphia.
Have you considered doing something with the public school system or at CCP? Or are you doing anything with the School District or with CCP? We're looking for a Philadelphia work force that you can go to to fill these jobs in your company. I know CCP does a lot of this for many companies in the City. And I would suggest that if you haven't -- if you don't have anything like this, to seriously consider going over there to CCP or maybe another institution. But I know that they provide, and the School District's very much interested in projects where companies come and want to be able to pick of their pool of Philadelphia students to move into the job market. 105 Whole - 3/30/04 - Bill 040157
Absolutely. Through the ACE INA Foundation we've worked very closely with the City of Philadelphia school system. We're also beginning to work with the Urban League of Philadelphia, as well, to look at outreach programs for developing individuals within the Philadelphia area.
Okay. I want to offer myself to be of help to this good company, and anything that has to do with job creation and job training.
You're welcome. The Chair recognizes Councilwoman Brown.
Thank you. Thank you, Madam President. Let me first follow up on Councilman Juan Ramos's reason for not wanting to see the company leave. 106 Whole - 3/30/04 - Bill 040157 When I looked at the enormous number of initiatives you have in the Philadelphia public school system and other civic driven kinds of activities, that's not the reason why I would not want to see you leave. And the number's huge, and that should not be understated or overlooked. I wanted to put that on the record. Secondly, I need to very briefly make it clear of the disconnect that exists between PIDC and our City Department of Commerce around the targeted tax credit piece. And we know in the past my one criteria for supporting TIF have been the impact on the Philadelphia public school system. As we go down this road, I just want it clear on the record that the criteria will grow. To the extent that targeted tax credits are a part of the discussion, that will help me move to a place of wanting to support. And to the extent that is not a part of the discussion, then that will have 107 Whole - 3/30/04 - Bill 040157 some impact on where I ultimately end up. So the disconnect exists. It needs to be fixed. We have a new Commerce Director who I'm sure just learned about that today. So I would hope that PIDC would take the initiative to have us sit down with the Commerce Department and let them know this is a public policy issue that needs to be implemented.
Okay. Item number three. And Councilwoman Tasco wanted to hear from Jim Roundtree. I would like to hear from you, from where you sit, what provisions are in place to ensure the meeting of the goals as stipulated in the letter to President Verna on March 29th. Traditionally, what do you do in-house to ensure the meeting of MBE WBE goals? Let's go with what exists right now in-house around that issue.
Normally there's an 108 Whole - 3/30/04 - Bill 040157 oversight committee. And they have the responsibility to monitor. And if the company fails to meet the goals, that would be -- that are stipulated in the Mayor's recent Executive Order in 17-500, that would be a breach of contract.
It's actually in -- That's a part of the project plan which is part of the legislation, so the answer is yes.
About a year ago, maybe a little longer, City Council required that the economic opportunity plan be part of the project plan which is part of the legislation.
Okay, then. Is this the first TIF project where you have -- Is this the first TIF we've 109 Whole - 3/30/04 - Bill 040157 done since that executive order was passed?
And it was probably because... Okay. Thank you for your testimony. And I'll do follow up to Councilwoman Tasco with Jim Roundtree. Thank you for your testimony.
Thank you. The Chair recognizes Councilman Clarke.
All right. For the witnesses here, the Chair recognizes Councilman Goode.
Thank you, Madam President. 110 Whole - 3/30/04 - Bill 040157 Mr. Fina, you shouldn't have given me that lead in. Actually, the one TIF project I voted for, I'm still halfway convinced that that's the only project that actually needed the TIF, from having worked on a project before coming to City Council. To clarify the record, of the 800 jobs that are being retained, was the testimony that 500 of those people don't even live in the City?
Okay. So, how many of the 150 new jobs are going to be for Philadelphia residents?
Well, PIDC is a little greedy. We hope all 150 are Philadelphia residents.
But not a 111 Whole - 3/30/04 - Bill 040157 guarantee for Philadelphia residents.
How many of the 206 construction jobs are guaranteed for Philadelphia residents?
I don't think any of them are guaranteed, but I would say there would be a large percentage.
Just the nature of the business. And as Councilman Ramos has indicated, he knows many construction workers, and I'm assuming he means very qualified construction workers out of work. And they'll have the opportunity to be hired.
Let's move on. How many of your clients -- Getting back to the job creation tax credit, how many of your clients have been approved for local job creation tax credits?
I don't know that answer right now, Councilman. I'll try to find 112 Whole - 3/30/04 - Bill 040157 out.
Do you know how many applicants have been approved, period, for the job creation tax credit locally?
If I told you it was nine applicants approved, how many jobs do you think have been created through that tax credit?
Let's say 1,065. Let's say of the 9 applicants that have been approved, one company is creating 135 jobs, one company is creating 160 jobs, one company has created 200 jobs, and another company has created 425 jobs. But you're not aware that any of those are your clients.
I'm not aware, Councilman. But, you know, the PIDC is a large staff, and they could be our clients. I'll find out.
In fact, if you could you give me the names, I could find out quickly.
Councilman, would you conclude with the two witnesses first?
Not really, because it's a question related to PIDC. Whoever wants to testify regarding whether they were offered a local job creation tax credit. We're referring to the Commerce Department for local job creation tax credit.
Whoever is able to answer the Councilman's question from ACE, please approach the witness table. Mr. Roundtree, please stay where you are. I'd like to conclude the...
I just want to know whether they were offered a tax credit or not. 114 Whole - 3/30/04 - Bill 040157
Well, why don't I give you my answer, and that will set the frame for --
You've already given me your answer. You told me that you basically refer your clients to the Commerce Department in order for them to be offered a local --
Well, that's in general. But they didn't qualify, since this was a retention business that we were providing incentives to.
They absolutely qualify, if they're creating more than 23 jobs. 24
We presented our 25 project... I'm sorry. 115 Whole - 3/30/04 - Bill 040157
I actually have a very specific question. Were you told that there was a local job creation tax credit available?
I think I have the answer to your question. We presented our project to the City Commerce Department. We got an offer letter back from them saying what benefits. And job creation was not one of the benefits that was outlined in that offer letter.
So are you aware that you actually -- you actually qualify for $750,000 in tax forgiveness, in terms of your business privilege tax?
Councilman, we're taking the Business Privilege tax. So, if that incentive would have been reduced, we'd 116 Whole - 3/30/04 - Bill 040157 have less to provide for the TIF. And we --
And you would have less need for that $750,000 worth of TIF.
The TIF is used for the development capital cost. That's what the loan is. So, that gap would have been filled if they had reduced their tax liability. We needed that tax liability to cover the amount of capital improvements that were going to be made to the property.
You know, that definitely doesn't make sense, particularly in light of what Councilwoman Brown said. Are you saying you can't offer someone $750,000 in tax forgiveness, in terms of Business Privilege tax because you need that money to pay back a loan. But the loan to pay back includes that same $750,000 that they would be saving in tax liability.
The loan repayment 117 Whole - 3/30/04 - Bill 040157 includes that tax liability.
Could I ask ACE this last question. One, are you interested in pursuing a local job creation tax credit?
And two, are you opposed to the clawback being related just to job creation, rather than job creation and retention?
I think I would have to, you know, counsel with our members of our staff to see if that would be something that would be feasible.
But you're not absolutely at this point opposed to having a clawback related just to job creation, as opposed to job creation and retention?
We need to go back and do our homework and see if that's something that would be acceptable to us.
You're 118 Whole - 3/30/04 - Bill 040157 welcome. The Chair recognizes Councilman Cohen.
Thank you, Madam President. Your company is an old company, considering the original foundations were INA. Was INA your predecessor company?
I thought at one time there was a general feeling that businesses of all kinds felt that they were entitled to make profits because they undertook risks; and that they were very proud of that fact, and therefore they stayed away from government help. Has that philosophy changed?
Well, is it that an executive today is tested by how much money he got from the government agency, government source, local, State or Federal, 119 Whole - 3/30/04 - Bill 040157 for example, as against other executives? I mean, I don't really understand why you're asking for assistance in the form of a TIF, because whatever you don't pay in taxes -- and I don't think you ought to pay any more than you should. But I'm wondering why you seem to feel or what is the justification for a successful company, with large numbers of people, not paying its own way in the risk category, you know, or in the costs you use. You're certainly experts on risk analysis and on what makes good sense. Would you move if you had to pay the whole thing yourself?
I'm just trying to get... I'm not being critical of your company particularly. I want to know what if somebody calls companies to try to get tax refunds of any kind? Is it that this is part of a 120 Whole - 3/30/04 - Bill 040157 campaign to lower taxes, and this will go as long as necessary until you get the taxes lowered? And I can understand that. You know, you would want to do that generally, checking on your taxes. But I'm puzzled by the fact that what I regard as a strong point of private business of saying, we're entitled to these profits because we run the risks.
Well, does PIDC go around making these offers to firms?
Not exactly, Councilman. It's a rather involved process which we talked about how, you know, when we analyze 121 Whole - 3/30/04 - Bill 040157 a project. But what happens is that ACE has made a decision at the end of 2006 to leave its current location in Philadelphia. They're not renewing that lease. They looked at a number of scenarios, including New Jersey and other places that were putting incentives on the table to move to. PIDC proposed a TIF for this project to fill a gap between what they were willing to provide --
ACE. ACE is making a $52,500,00 investment in 436 Walnut Street.
PIDC and the State are putting approximately, with the TIF, another $20 million into the project to retain them. The TIF is $8.5 million. The State's providing $13 million. I'm sorry. The State's providing $11.5 million. 122 Whole - 3/30/04 - Bill 040157
Well, isn't it largely a con game, that this is a method by which a private business, any private business that gets involved in this, tries to cut its taxes by getting the government to invest in it? But the government doesn't get any dividend. Do we make any money? Suppose everything works fine. What do they give us, other than interest?
They give us $60 million in Wage Taxes over the course of years. 13 City Wage Tax cannot be TIFed. So that's 14 what we're doing. 15
Don't the people 16 of Philadelphia give you much more 17 altogether? 18
I don't see -- I 20 don't hear of PIDC or anybody else saying to the average homeowner, don't move and we'll get you some form of TIF. I don't understand.
You'd have to make improvements to get the TIF. You don't get 123 Whole - 3/30/04 - Bill 040157 it --
The TIF would be nominal. I mean, they're eligible, if City Council would approve it. But I doubt City Council would approve that because it would be nominal.
Well, I would doubt it because we're told by the Mayor that we are in terrible financial trouble. Therefore, I'm beginning to question on what basis does government, which we're told has to cut back on services, we're going to cut recreation centers, we're going to cut swimming pools. Yet we're going to have money for TIFs? I mean, that seems like a strange thing for a municipal government to do.
Councilman, there's gaps in this project. We're closing it with the 124 Whole - 3/30/04 - Bill 040157 TIF mechanism. There's substantial benefits to the City of Philadelphia if ACE is retained in their 800 jobs.
I just think we very much underestimate ourselves if we think we have to go and beg to have a company stay, and then cut their tax rates. I didn't see anybody from Council jumping up yesterday during hearings when some witnesses who are homeowners said that if the City continues whatever they were talking about doing, they were thinking of moving. I didn't see any government agency present to jump up and say, no, don't move yet; we have something to offer you; you know, we'll make it worth your while; we know you want to get out of here; we're an awful place, Philadelphia; we're not worthy of having anybody live here; so to continue to live here, we're going to give you a real tax break. Nobody said that. And I think for good reason. Because it's not needed. 125 Whole - 3/30/04 - Bill 040157 I'm just worrying whether governments are not being used as... And PIDC -- And I'm not talking personally to you. But I'm questioning the whole philosophy behind the TIF, as to why is it that we have to sort of bribe businesses to stay here. If I had my way, I'd say, you don't want to be here? Go where you want to go. Don't stay here in Philadelphia. We'll do without them. Why don't we say that and see what happens? Because all I think we're doing is creating an incentive whereby an executive, to be considered a success, has to say, you know that company down the street? When they moved here, they only were given $5 million. But we doubled the score to $10 million or $20 million. You know, Philadelphia is so rocky, and it's so anxious to get people because everybody's leaving in droves. Now, I don't believe people leave in droves when treated fairly. But I think 126 Whole - 3/30/04 - Bill 040157 governments are permitting themselves to be beaten into submission by business interests. And that's the reason there's so much skepticism politically on economic matters. Democrats, as well as Republicans, seem to feel the first priority is to get government funding into the hands of business, so that, like President Bush says, there's never going to be any money for things like affordable housing, because that's social planning. You know, once you think about making houses livable for ordinary citizens then that's a crime. But it's no crime at all -- it's the height of wisdom in this country today -- to give money away to big corporations. And to me that's got everything twisted. We started this business many years ago when I was still in Council on the theory of need. If a business proposal came -- and it couldn't have been done except by -- because the company didn't 127 Whole - 3/30/04 - Bill 040157 have the money, and had no means of getting a loan approved by a bank, then we were faced with the reality of: This project can't go unless we give a sum of money, then mostly in the form of tax abasement. But that wasn't enough. It apparently wasn't in the minds of businesses getting them enough money, so they changed the rules to permit these new developments like TIFs and KOZs. You know, the start the KOZ. Wonderful idea. We're going to take care of blight. And then we find the blight is down at 17th and Arch, right in the heart of Center City. Because nobody seems to level truthfully with legislative bodies. And again, I'm not referring to you personally. I'm referring to the whole concept of industries seem to work hard in developing stories, justifying moving all the tax money to business. Now, I say there's a distinction. When we talk -- When people like me talk 128 Whole - 3/30/04 - Bill 040157 about moving money into the hands of those that don't have it, the poor people, we're saying, look, do it in housing. Help disabled people get decent housing. Help poor people live decently. But now this thing at the business end has deteriorated into, I think, a competition. And who can whipsaw a government agency easier? And I think -- I say it respectfully, and not intending to hurt anybody's feelings.
But if I have to hurt your feelings, I guess I have to do it. Just --
Councilman, I take nothing personally. And you make some very good points, but we are in a competition. We're in a competition with New Jersey and Delaware, and Bucks County to keep these jobs and these taxes here in the City. So, we are in a competition. New Jersey offered $32 million, $22 million in cash, and $10 million in tax incentives, to lure ACE out of 129 Whole - 3/30/04 - Bill 040157 Philadelphia.
Maybe a year from now the $32 million in New Jersey will be going up to $40 million, maybe $50 million. We're going to keep on doing it?
Well, they're buying the building. ACE is buying the building and making improvements to that building. They're making huge improvements, $52 million, as I indicated. So, ACE is making a substantial investment here.
Let me say on this Walnut Street business, that building isn't empty, is it, that they're going into, that ACE is going to? Doesn't that place already have tenants?
50 percent occupied. 130 Whole - 3/30/04 - Bill 040157 The building's half vacant.
Well, there are a lot of buildings in Philadelphia that are not occupied at all. Isn't that true also? Isn't the vacancy rate high?
The vacancy rate is not actually high in Center City Philadelphia. It's only about percent. 10
Well, tell me -- 11 Then, let's talk Center City. It seems to 12 me the switch from Center City is your example to the whole range of the City. What's the difference between the two statistics you just gave me? You said the vacancy rate is not high in Center City.
Yeah. The overall vacancy rate in Center City is 12 percent. The vacancy rate at 436 Walnut Street is 50 percent. That building needs a lot of capital improvements.
I'm saying if you continue this, all you're doing is driving the City's finances downward. You're not 131 Whole - 3/30/04 - Bill 040157 helping the City at all because you're using a technique that is increasingly used to divide government agencies, that business is so smart and so big and so powerful and so rich that it's able to compel governments to bid against each other? I mean, that's quite a frightening thing to think that business is that powerful that it can move governments to have to compete with each other, where Pennsylvania gets angry at New Jersey because New Jersey is offering to steal our people away from us. And so, to compete with them, we got to offer more than New Jersey. Such a tale and such a chase after business has no end. It's just going to keep costing more and more money. And I think -- Isn't that the essence of something known as blackmail, if it's done not in a business context? You know, if you permit yourself to be put in a position of demeaning yourself in order to survive, you're going to have 132 Whole - 3/30/04 - Bill 040157 to demean yourself more and more. I'm very troubled by the concept. I have nothing against this particular business, except I'm just stunned that an old reliable company, with hundreds of employees, comes to a City like Philadelphia, where I think the statistics show that one-third of the people who pay taxes live at or below the poverty line, and says to them: You've got to -- With your shortage of tax receipts, you've got to have enough money to wage a successful war against New Jersey or Delaware or Connecticut or God knows who the rival may be. I'm just worried about that whole political picture. And it gives me a different sense of the role of business. I don't understand it. I don't think the company that you're competing for has the same financial need, for example, as the City. The City... They haven't issued any statement, have they, that they're 133 Whole - 3/30/04 - Bill 040157 desperate, that they're going to ask everybody to use the raises more carefully so they'll need fewer of them in the future? Or that they don't ask their customers to come in with paper and pen so that they don't have to buy them for their customers? I mean, we're doing that kind of thing. We're asking people to pay to file 11 an application for a job with the City. Whoever heard of such an insane idea? We think that's normal, while the Mayor, who proposes that people who want to apply have to pay a certain fee to just have their application considered, and at the same time apparently supports this, because PIDC is the -- an Administration run agency, right, Philadelphia agency?
Well, Philadelphia [sic] is a private not-for-profit corporation with contracts with the City of Philadelphia.
Point of 134 Whole - 3/30/04 - Bill 040157 information.
Thank you. I'm sorry, Madam President. Mr. Fina, what do we do to verify that these alleged offers of $30, $40, $50 million are real deals? Do we... I mean, talk is cheap. How do you know that these are real offers? What do you have in your file to show me that New Jersey offered -- Did you say $33 million? And $23 million with $10 million... And how do you really know that this is not a sales hype?
Well, you do the best you can. And we have looked at numbers, Councilman. We've looked at what New Jersey has offered, their incentive packages.
But you wouldn't think that they'd have a letter in their file that they could share with you, signed 135 Whole - 3/30/04 - Bill 040157 by the Governor or signed by the secretary of X, Y, Z, to show that that's a legitimate offer?
I raised before with you the question of whether there was another tenant in the building. Tell me what happens. Won't that other tenant feel that the other tenant never got the benefit of a TIF today? At least I never remember this property coming up before for consideration for a TIF or any part of it. Won't that tenant feel wronged? Is there a tenant currently that has a lease that expands? 136 Whole - 3/30/04 - Bill 040157