COUNCIL OF THE CITY OF PHILADELPHIA2 COMMITTEE ON COMMERCE AND3 ECONOMIC DEVELOPMENT4 5 6 Room 400, City Hall7 Philadelphia, Pennsylvania Thursday, December 2, 20108 12:45 p.m. 9 10 PRESENT: COUNCILMAN W. WILSON GOODE, JR., CHAIR11 COUNCILMAN FRANK DiCICCO COUNCILMAN BILL GREEN12 COUNCILMAN CURTIS JONES, JR. COUNCILWOMAN MARIA D. QUINONES-SANCHEZ13 COUNCILWOMAN BLONDELL REYNOLDS BROWN 14 15 BILL 100756 - An ordinance amending Chapter 17-1300 of The Philadelphia Code, entitled16 "Philadelphia 21st Century Minimum Wage and Benefits Standard," by broadening the17 definition of the "City financial aid recipients" who are subject to that Chapter to18 include certain persons or entities who lease property or equipment from persons or entities19 who receive City assistance, under certain terms and conditions.20 21 - - -22 23 24 25 2 1
Good2 afternoon. This hearing is called to3 order. This is a public hearing of the4 Commerce and Economic Development5 Committee on Bill No. 100756. My name is6 W. Wilson Goode, Jr., Chair of the7 Committee.8 I note that a quorum is9 present. Committee members present10 include, to my left, Councilman Bill11 Green, Councilman Curtis Jones. To my12 right is Councilwoman Maria13 Quinones-Sanchez, Councilman Frank14 DiCicco. Also present is Vice-Chair of15 the Committee, Councilwoman Blondell16 Reynolds Brown.17 The title of Bill No. 100756,18 amending Chapter 17-1300 of The19 Philadelphia Code, entitled "Philadelphia20 21st Century Minimum Wage and Benefits21 Standard," by broadening the definition22 of the "City financial aid recipients"23 who are subject to that Chapter to24 include certain persons or entities who25 3 12/2/10 - COMMERCE- BILL 1007561 lease property or equipment from persons2 or entities who receive City assistance,3 under certain terms and conditions.4 The first witness is Duane5 Bumb, Senior Deputy Commerce Director for6 the City of Philadelphia.7 (Witness approached witness8 table.)9
Good10 afternoon, Mr. Bumb. Please identify11 yourself for the record and proceed with12 your testimony.13
Good afternoon,14 Chairman Goode and members of the15 Committee on Commerce and Economic16 Development. My name is Duane Bumb. I'm17 Senior Deputy Director of Commerce. I'm18 here today to testify on Bill No. 21 Bill 100756 would authorize the22 amendment of Chapter 17-1300 of The23 Philadelphia Code. Currently, The24 Philadelphia Code mandates that25 4 12/2/10 - COMMERCE- BILL 1007561 recipients of City financial assistance2 in amounts greater than $100,000 must pay3 their employees the City's minimum wage4 for five years after receiving the5 assistance. The goal of this amendment6 is to extend the City's definition of7 "City financial aid recipient" to include8 persons or entities that lease property9 or equipment from a City financial aid10 recipient. 15 For example, if a developer16 receives more than $100,000 from the City17 in support of a neighborhood commercial18 center, any retail tenants leasing space19 in that development would be required to20 pay their employees the City minimum wage21 for a five-year period. 3 The intent of this extension is4 to increase the application of the City's5 minimum wage and to ensure that employees6 and workers receive the benefits of City7 financial aid. " The purpose of the Chapter is19 to assure that as many employees as20 possible within the City of Philadelphia21 earn an hourly wage that enables them to22 live with more dignity and increase23 economic self-sufficiency. 25 7 12/2/10 - COMMERCE- BILL 1007561 No waiver may be granted for more than a2 period of more than one year, which3 allows for review of entities' economic4 situation over time. 16 The annual reapplication process will17 prevent tenants from estimating future18 labor costs. If a waiver is not granted,19 the minimum wage requirement may place a20 hardship on certain tenants that may not21 be beneficiaries of the City's financial22 assistance but are constrained by narrow23 profit margins. 6 Thank you for your7 consideration of these comments. I'd be8 happy to answer any questions. 16
Thank you17 for your testimony, Mr. Bumb. The18 amendment is included in the Committee's19 package and it also is at the table. So20 we have it.21 Councilman Jones.22
Thank you,23 Mr. Chairman, and thank you for bringing24 forth this amendment to your original25 9 12/2/10 - COMMERCE- BILL 1007561 idea to try to make it more meaningful to2 people around the City.3 And good afternoon, Mr. Bumb,4 and thank you for not couching this in5 terms of winners or losers. I really6 appreciate that. I don't want to hear7 that anymore this year.8 In effect, we have always had9 these types of covenants in federally10 funded projects, where the federal11 government has given assistance to12 developers, businesses and projects and13 the like, correct?14
So this is16 just trickling to not just the fact that17 they have to deal with sometimes low and18 moderate employees but also the quality19 of that by way of wage that has to be20 paid to them, correct?21
Well, again, the22 sponsor is right next to you, but the23 intent here would have been when the City24 is providing significant financial25 10 12/2/10 - COMMERCE- BILL 1007561 assistance to a company or an entity and2 with the objective there of providing3 permanent new jobs, we always want to4 make sure that those jobs are sustainable5 jobs or family-sustaining jobs.6
My question7 wasn't the intent of the legislation. It8 was more that this is nothing new, this9 is an extension of some of the regs that10 we've always kind of had.11
This is consistent12 with other sort of requirements, whether13 they are state or federal regulations14 that put certain sort of restrictions on15 wage for certain sorts of activities16 based on their funding source, that's17 right. Generally those are prevailing18 wage type of requirements.19
In my20 history, having run an economic21 development corporation in another life,22 that a lot of times everyone would23 benefit except for the person actually24 working in the business, and I think that25 11 12/2/10 - COMMERCE- BILL 1007561 this allows for some of that benefit and,2 therefore, disposable income to be spent3 in and around by Philadelphia residents.4 So I'm interested in seeing if, in your5 opinion, this will, as we leave a6 recession, not hinder development in your7 mind at all.8
I think that with9 the amendments that were proposed, I10 think that we've provided adequate11 protection for small businesses that may12 not have the ability to -- who are either13 entrepreneurs or small non-profits to14 have the ability to sort of pay the City15 minimum wage in the initial years.16
Thank you,19 Councilman.20 Any other questions for this21 witness?22 (No response.)23
Seeing none,24 our next witness is Unite Here.25 12 12/2/10 - COMMERCE- BILL 1007561 (Witnesses approached witness2 table.)3
Good4 afternoon. Please state your name for5 the record and proceed with your6 testimony.7
Nicole Hunt.8 Mr. Chairman and members of the9 Committee, thank you for giving us the10 opportunity to provide our testimony on11 Bill No. 100756 today.12 Unite Here represents over13 6,000 workers in the Philadelphia region,14 including hotel, gaming, stadium, airport15 and school cafeteria workers.16 Even the School District of17 Philadelphia pays less than the living18 wage of 10.88 to over 2,100 public school19 cafeteria workers and noontime aides, or20 85 percent. Close to 2,000 are paid only21 9.52 an hour, and the School District22 adds injury to insult to the 1,60023 noontime aides, who are paid 9.52 and24 cannot receive the District's medical25 13 12/2/10 - COMMERCE- BILL 1007561 insurance no matter how many hours they2 work.3 Local 634 has gone without a4 contract for over a year. In bargaining,5 we have asked that the School District --6 we have asked the School District to7 bring all its workers up to City minimum,8 but they have countered that they are not9 covered by the City ordinance. We need10 your help to enforce this living wage11 standard.12
Thank you. My13 name is Antony Dugdale with Local 274,14 Unite Here.15 The future of the economy in16 Philadelphia is being driven really by17 two sectors, hospitality and ed and meds,18 or universities and hospitals.19 Universities and hospitals tend to20 recruit many employees from outside21 Philadelphia, while hospitality jobs go22 to the folks who live in our23 neighborhoods, Southwest, South, North,24 Kensington, Northwest and even the25 14 12/2/10 - COMMERCE- BILL 1007561 Northeast. That's where close to 902 percent of Unite Here's members live.3 From '96 to 2006, hospitality4 was the City's number one fastest growing5 job creator, and we predict that over the6 next ten years, hospitality will again7 become the number one job creator,8 especially with the opening of the9 Convention Center expansion. Improving10 these hospitality jobs is the number one11 way to improve the standard of living in12 Philadelphia's neighborhoods. But what13 kind of jobs are we creating and what has14 the City done to demand high standards15 for these jobs? Very little.16 Despite the important role that17 hospitality plays in our City's economic18 future, there are currently no19 comprehensive City laws that provide20 hospitality workers with a path into the21 middle class or with the promise of a22 good job that will allow us to support23 our families. Unfortunately, many24 hospitality employers now pay workers25 15 12/2/10 - COMMERCE- BILL 1007561 less than 10.88. The number one way for2 us to strengthen our neighborhoods is to3 improve these jobs.4 Our employers frequently5 receive public subsidies, whether it be6 direct tax income such as the School7 District, management contracts at a8 City-owned facility or public subsidies9 for the construction of a new hotel.10 This bill ensures that the11 living wage not only applies to the12 direct employees of the entity receiving13 the subsidy, like the developer's own14 employees, but would open the door to15 apply the living wage also to the16 operators and subcontractors who will run17 a facility once it opens; i.e., the18 concessions or the hotel workers. We19 understand that applying this law will be20 complicated and fact dependent,21 especially for existing facilities. So22 this law alone is not going to solve all23 of our problems, but we will need to24 continue working together to find25 16 12/2/10 - COMMERCE- BILL 1007561 creative ways to strengthen the quality2 of hospitality jobs. But this bill is an3 important first step, and we urge your4 support.5
Thank you6 for your testimony, Ms. Hunt and7 Mr. Dugdale.8 Any questions for these9 witnesses?10 (No response.)11
Philadelphia15 Security Officers Union.16 (Witness approached witness17 table.)18
Good afternoon.19 Thank you for your time and attention to20 this issue.21 I brought copies of my22 testimony.23 So my name is Fabricio24 Rodriguez, F-A-B-R-I-C-I-O,25 17 12/2/10 - COMMERCE- BILL 1007561 R-O-D-R-I-G-U-E-Z. I am the Campaign2 Director for the Philadelphia Security3 Officers Union. Our union supports Bill4 No. 100756. The recent reaffirmation of5 the Philadelphia 21st Century Minimum6 Wage and Benefits Standard is a testament7 to our City's voters and their values.8 Time and again, Philadelphians9 have spoken up for good wage and benefit10 standards in City dealings, contracts and11 resources. This sentiment should be12 extended to persons and entities that13 lease property and equipment from our14 City.15 The Philadelphia Museum of Art16 is probably one of our City's most17 valuable assets. The land and building18 alone are worth $10 million. That's19 according to the Philadelphia Museum of20 Art's recent financial statement, annual21 financial statement.22 The City's taxpayers are23 generous, because we don't charge the24 Philadelphia Museum of Art any rent on25 18 12/2/10 - COMMERCE- BILL 1007561 the property, but the Museum meanwhile,2 even though we're very generous with3 them, there are a lot of workers at the4 Philadelphia Museum of Art that are not5 being paid the standard. We know there6 are custodians and some cafeteria workers7 that are earning as low as $9 per hour.8 Security guards' wages run between $9.509 and $10 an hour, and there are even some10 direct Museum employees that earn only11 $10 an hour. This amendment would again12 reenforce to employers like the13 Philadelphia Museum of Art that our City14 requires a higher standard.15 In fact, I would say that I'm16 sure some folks in this room remember I17 was here in March talking about this bill18 and our union's support for it. Just by19 this being in existence, it's already20 helped our union move a little bit closer21 to getting our first contract. We came22 and testified our support for this law.23 The Museum leaders were in the room, and24 because of that, they affirmed that they25 19 12/2/10 - COMMERCE- BILL 1007561 planned to uphold at least that standard.2 So it gave them the signal about which3 direction they had to go.4 We're still fighting to get5 that contract. We're aiming to have it6 wrapped up hopefully by the end of the7 year, but we do thank this body for8 standing up for good wages and benefits9 and helping us make a little bit of10 progress over there.11 Thank you.12
Thank you13 for your testimony, Mr. Rodriguez.14 Are there any questions for15 this witness?16 (No response.)17
Seeing none,18 is there anyone here from SEIU?19 (No response.)20
Seeing none,21 is there anyone here to testify on this22 bill? Brian Cohen, Liberty Property23 Trust.24 (Witness approached witness25 20 12/2/10 - COMMERCE- BILL 1007561 table.)2
Mr. Chairman and3 members of the Committee, thank you for4 allowing me to speak before you today.5 My name is Brian Cohen. I am a6 Vice-President at Liberty Property Trust7 heading up all of our development and8 leasing within the City of Philadelphia.9 I'm here today to convey Liberty Property10 Trust's concern regarding the proposed11 legislation --12
Excuse me,13 Mr. Cohen. Do you have copies of your14 written testimony?15
Sure.19 I am here today to convey20 Liberty Property Trust's concern21 regarding this proposed legislation and22 its potential to have unintended23 consequences of negatively impacting24 economic development and employment --25 21 12/2/10 - COMMERCE- BILL 1007561
Excuse me,2 Mr. Cohen. Have you read the3 legislation?4
-- (continued)16 unintended consequences of negatively17 impacting economic development and18 employment in the City of Philadelphia in19 its current form without additional20 amendment.21 Liberty Property Trust has a22 long history of developing large23 buildings within the City, including24 Center City high rises for corporate25 22 12/2/10 - COMMERCE- BILL 1007561 headquarters, large warehouse and2 manufacturing buildings, buildings for3 call center and back-of-house operations,4 laboratory buildings and flex industrial5 building. Many of these projects have6 received some form of City financial7 assistance, such as the ten-year8 as-of-right tax abatement.9 In our 30-year history of10 development in the City, we have11 developed projects totalling more than12 6.8 million square feet occupied by13 companies which employ in excess of14 20,000 people. The jobs represent a mix15 of new employment to the City and16 retained employment. The companies which17 occupy these buildings have a wide range18 of employees, including low-wage19 employees, which would not comply with20 the 150 percent minimum wage requirement.21 However, all of the companies which22 occupy these buildings do pay the City23 wage tax.24 We believe that many of these25 23 12/2/10 - COMMERCE- BILL 1007561 projects could have been severely2 jeopardized if the proposed legislation3 were in place at the time of development,4 resulting in the projects either not5 occurring, the projects requiring6 additional or significant financial7 assistance from the City or the projects8 being significantly scaled back in size9 and, therefore, the number of jobs.10 During a fragile time in the11 national economy and City economies after12 experiencing tremendous job losses and13 with unemployment at its highest level in14 decades, the proposed legislation could15 not only have the unintended consequence16 of jeopardizing job growth but also17 result in further job losses.18
Thank you,19 Mr. Cohen. Mr. Cohen, are you or -- is20 Liberty Trust or has Liberty Trust ever21 been a City financial aid recipient, as22 defined by the original ordinance?23
And does25 24 12/2/10 - COMMERCE- BILL 1007561 Liberty Property Trust pay all of its2 employees $10.88?3
So you don't6 have any employees of Liberty Property7 Trust that do not abide by this standard?8
The problem is the12 tenants within our buildings. It is our13 understanding through reading the14 legislation that buildings which we15 develop and get financial assistance16 for --17
So you pay18 at least $10.88, but you don't believe19 your tenants should pay at least $10.88?20
I don't believe21 that our tenants, all of their employees,22 will pay $10.80, correct.23
That's not24 what I asked you. I said you pay $10.80,25 25 12/2/10 - COMMERCE- BILL 1007561 but you don't believe that all your2 tenants and lessees should pay $10.88 per3 hour?4
I do not believe5 every employee of those tenants should6 pay $10.80.7
Market-driven14 decision is looking at the competitive15 landscape of what those companies could16 pay employees elsewhere.17
Are you18 familiar with living wage ordinances in19 New York, Chicago, Los Angeles,20 Baltimore, Washington, DC and several21 other jurisdictions around the country?22 Have you read those ordinances?23
So how are25 26 12/2/10 - COMMERCE- BILL 1007561 you talking about market-driven issues2 and competitiveness when there actually3 are living wage ordinances across this4 country? We actually are one of the last5 cities in this country to do a living6 wage ordinance. We did it in 2005. So7 actually what you're saying doesn't make8 a whole lot of sense unless you've9 actually examined living wage ordinances10 in those other cities. But I thank you11 for your testimony.12 Are there questions from any13 other members of the Committee?14 (No response.)15
Seeing none,23 we will move from our public hearing into24 our public meeting to consider Bill No.25 27 12/2/10 - COMMERCE- BILL 1007561 100756.2 The Chair recognizes3 Councilwoman Reynolds Brown for a motion4 on the amendment to the bill.5 COUNCILWOMAN BROWN:6 Mr. Chairman, I make a move for a motion7 on the amendment to Bill No. 100756.8 (Duly seconded.)9
The16 amendment passes.17 The Chair recognizes18 Councilwoman Reynolds Brown for a motion19 on Bill No. 100756, as amended.20 COUNCILWOMAN BROWN:21 Mr. Chairman, I move that Bill No.22 100756, as amended, be reported out of23 the Committee with a favorable24 recommendation and further move that the25 28 12/2/10 - COMMERCE- BILL 1007561 rules of Council be suspended so as to2 permit first reading.3 (Duly seconded.)4
It's11 approved. Bill No. 100756, as amended,12 is reported out of the Committee with a13 favorable recommendation and a suspension14 of the rules to allow first reading at15 our next Council session.16 Thank you very much. This17 concludes our public hearing and public18 meeting.19 (Committee on Commerce and20 Economic Development Committee concluded21 at 1:10 p.m.)22 - - -23 24 25 29 1 CERTIFICATE2 I HEREBY CERTIFY that the3 proceedings, evidence and objections are4 contained fully and accurately in the5 stenographic notes taken by me upon the6 foregoing matter on December 2, 2010, and that7 this is a true and correct transcript of same.8 9 10 11 12 --------------------13 MICHELE L. MURPHY14 RPR-Notary Public15 16 17 18 (The foregoing certification of this19 transcript does not apply to any reproduction20 of the same by any means, unless under the21 direct control and/or supervision of the22 certifying reporter.)23 24 25