COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING - COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, June 2, 2004, 10:18 a.m. - - - 040048 - Resolution authorizing the Committee on Commerce and Economic Development to hold hearings to review annual community reinvestment goals submitted by City depository banks and the role of City depository banks in leveraging private investment from the proposed $500 million Economic Development Capital Fund, and further authorizing the Committee to issue subpoenas to compel the attendance of witnesses and the production of documents and other evidence. 040145 - Resolution authorizing the Committee on Commerce and Economic Development to hold hearings examining small business lending in low and moderate income and minority areas within the City of Philadelphia, and calling on the Small Business Lending Task Force of the Community and Economic Development Committee of the Greater Philadelphia Urban Affairs Coalition, to present tetimony on several potential solutions to lending disparity, including a loan guarantee fund, alternative loan programs, and an information and referral system for small businesses. 040414 - Resolution authorizing the Committee on Commerce and Economic Development to hold hearings to review the findings and recommendations of the Minority Business Development Subcommittee of the 21st Century Review Forum. 2 PRESENT: COUNCILMAN W. WILSON GOODE, JR., Chair COUNCILMAN MICHAEL A. NUTTER, Vice Chair COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK RIZZO COUNCILMAN JUAN F. RAMOS COUNCILWOMAN MARIAN B. TASCO COUNCILMAN FRANK DI CICCO COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN JANNIE BLACKWELL 3 040048, 040145, 040414 - 6/2/04 - - - P R O C E E D I N G S - - -
Good morning. This hearing is called to order. This is a public hearing of the Committee on Commerce and Economic Development on Resolution 9 040414, 040048, and 040145. My name is W. Wilson Goode, Jr., Chair of this Committee. I note that a quorum is present. To my right is Councilman Michael A. Nutter, Vice Chair of the Committee. Other committee members present include Councilwoman Blondell Reynolds Brown, Darrell Clarke, Frank Rizzo, Juan Ramos, Marian Tasco, Frank DiCicco, and Councilwoman Jannie Blackwell is also present. The title of the first resolution to be heard, Number 040414, a Resolution 23 authorizing the Committee on Commerce and Economic Development to hold hearings to review the findings and recommendations of 4 040048, 040145, 040414 - 6/2/04 the Minority Business Development Subcommittee of the 21st Century Review Forum. Before we have our first witness, let me just announce that a couple of witnesses will not be able to make it or may not be able to make it. The Greater Philadelphia Chamber of Commerce... We invited former Governor Mark Schweiker to appear. He sent testimony which I will have read into the record. Mr. Michael Williams, the new Director of the Minority Business Enterprise Council has not yet decided whether he will be able to make it or not make it. But we will see if he shows up or not. (Booing from the audience.)
I will ask the Clerk to now read the Greater Philadelphia Chamber of Commerce testimony into the record. Good morning, Chairman Goode and 5 040048, 040145, 040414 - 6/2/04 members of the Committee on Commerce and Economic Development. For the record, I am Denise Earley, Director of Public Policy for the Greater Philadelphia Chamber of commerce. I come before you today to offer testimony on City Council Resolution 9 040414, authorizing the committee to review the findings and recommendations of the Minority Business Development Subcommittee of the 21st Century Review Forum. The Chamber served on the Regional Cooperation Committee of the 21st Century Review Forum, Chaired by Nick DeBenedictis, and as a regional chamber, is committed to increasing the opportunities for all businesses throughout the region. In conjunction with those findings, the Chamber is working to develop a series of programs which will help small and minority, including women, owned businesses develop skills and relationships that would help them pursue contract opportunities with larger private businesses. This has 6 040048, 040145, 040414 - 6/2/04 been a concern of not only minority-owned businesses, but has been consistently raised the Chamber's Small Business -- raised by the Chamber's Small Business Board. The Chamber hopes to roll out within the next fiscal year initiatives that would create increased value from minority businesses, as well as small and women owned businesses. By helping small businesses understand the procurement standards and opportunities available throughout the private sector, we believe that opportunities will be developed to allow small- and minority-owned businesses to more fully participate in the future growth of the region. These initiatives, hopefully, will benefit not only the City but also the region as well, in the form of increased jobs and tax revenues. Thank you for this opportunity.
Thank you. 7 040048, 040145, 040414 - 6/2/04 We look forward to inviting Governor Schweiker back to testify and to submit to questioning on his testimony. But our first panel of live witnesses is Miss Deborah Moore, Coalition of Voters, Taxpayers, and businesses of the African American Community, Mr. A. Bruce Crawley of the African American Chamber of Commerce. Please approach the witness table. Mr. Crawley, please state your name for the record.
Bruce Crawley, Chairman of the Board of the African American Chamber of Commerce of Philadelphia.
Thank you very much, Councilman Goode, and members of City Council. With the recent leaks of the City of Philadelphia's disparity study update, we all now know that the City has been doing 8 040048, 040145, 040414 - 6/2/04 an absolutely miserable job including minority businesses as part of its economy, no matter who has been the head of MBEC, no 5 matter who has been Commerce Director, no 6 matter who has been Mayor. 7 percent of City contract dollars. percent of City contract revenues. percent of the total. million, point 7 percent. And Asians received and even worse $800,000 or point 04 percent. 3 percent of City contracts, despite those same people representing the majority of the City's population. That being the case, it's easy to understand why their neighborhoods suffer disproportionately high unemployment, why they experience excessively high levels of blighted housing, why the great preponderance of abandoned vehicles are found in their neighborhoods, and why the crime rates in those communities have been so high historically. There's a simple economically based, officially condoned, centrally managed reason why the City has virtually no need to tow abandoned cars from Rittenhouse Square and Chestnut Hill. The residents of those communities for the most part share in nearly 98 percent of City contracts. We certainly recognize that no 23 person currently holds office in this City Council can be accused of creating the historical conditions that have led to 10 040048, 040145, 040414 - 6/2/04 unemployment, blight and crime in many black, Hispanic and Asian communities. We also know, however, that if you -- that if you in the legislative branch of government and the Mayor in the executive branch of the same government choose now to do nothing to change these historical patterns of discrimination, then you will absolutely guarantee that the economic conditions for this City as a whole and for the majority of the City's voters will not improve. We know the Fortune 1000 companies have not been net contributors to job growth in the United States for the past 17 jurors, and that virtually all net job 18 increases have come from small and minority 19 businesses. 20 The Census Bureau also informs us that 85 percent of the employees at a minority owned business are themselves minorities. If we don't stimulate minority business growth here in Philadelphia, 11 040048, 040145, 040414 - 6/2/04 therefore, we are absolutely insuring disproportionately high levels of minority unemployment in our City. I'm especially excited today because in deciding to convene these hearings, this Council has sent the first clear message from our City's public sector that it is time for a significant economic change in Philadelphia. By convening these hearings, the members of this Council have indicated that they are ready to consider a shift from an archaic, racially and ethnically divided economic philosophy that has produced slow growth, excessive bureaucracy, frivolous lawsuits, and an antagonistic set-aside mentality in both the public and private sector. In that context, it is highly appropriate that these hearings are being led today by discussion of the February 12, 2004 report by the Minority Business Development Subcommittee of the 21st Century Review Forum. 12 040048, 040145, 040414 - 6/2/04 Even the genesis of that subcommittee grew out of a recognition that we had to finally begin to include all of Philadelphia's economic resources, not just white but also black, Hispanic and Asian, if we were ever going to have economic vitality, meaningful job creation, and a viable tax base. That subcommittee was established after I was appointed to the Review Forum's Regional Cooperation Committee in January, and found that its mission was to increase business and economic cooperation within the five-county Southeastern Pennsylvania area.
I also found that there was absolutely no plan focusing any of that economic development strategy on black, Hispanic, Asian or Native American communities or in businesses owned by people who lived in those communities. I didn't sense malice or outright hostility with regard to the subject. The people who sat around that table simply 13 040048, 040145, 040414 - 6/2/04 never were asked to include that fundamentally important issue. And they believed that there could once again be a Philadelphia economic planning exercise without any real consideration of the unrealized value of minority-owned businesses. 6 percent of all Southeast Pennsylvania businesses. S. Department of Commerce that said, and I quote, economic growth cannot be sustained without the inclusion of minority businesses and an infusion of capital into 14 040048, 040145, 040414 - 6/2/04 those businesses. Absent broad-based institutional investor participation in minority and immigrant business communities which are assumed to be the new majority of businesses, continued growth in the American economy is impossible, affecting not just minority businesses, but putting the nations macro economy at risk. S. Commerce Department was telling us even then that having discussions about economic development without a meaningful inclusion of the true economic potential of communities of color is essentially a waste of time, and that it can have a disastrous effect on the municipal economy as a whole. Guided by that fact, we notified the Chair of the Regional Cooperation Committee, Nicholas DeBenedictis, and the Vice Chair, Innovation Philadelphia's Richard Bendis, that we would be establishing a new Minority Business Development Subcommittee for the 21st 15 040048, 040145, 040414 - 6/2/04 Century Review Forum. In so doing, we reached out to include the total of persons, including 5 two Hispanic business leaders and two Asian 6 business leaders, representing both the 7 Hispanic and Asian American Chambers of 8 Commerce, along with the African American 9 Chamber. 10 Over a one-month period we produced 11 a 20-page report with 46 pages of 12 appendices, one of which was Councilman 13 Goode's own Greater Philadelphia Capital 14 Access Report. 15 Before we go much further, I have to 16 reemphasize that this is a plan whose goal 17 is not to take economic resources from 18 white businesses or jobs from white 19 workers. Instead, this is a plan whose goal is to grow the pie, to expand the vitality of all businesses in Philadelphia, and increase opportunity for all Southeast Pennsylvania businesses. In order to accomplish any of that, 16 040048, 040145, 040414 - 6/2/04 however, we recognize that we will have to change the economic mind-set of the region, to shift from racial us versus them as relates to business opportunity. We know we will have to move to a region wide realization finally, that whether we personally like or socialize with people of other ethnic groups, we all, for the purpose of building a strong local economy, must be defined as us. We knew we'd need to have our political and economic decision makers finally understand that when a predominantly black neighborhood in North Central Philadelphia suffers job losses and its residents can't afford the upkeep on their property, then our entire Philadelphia economy suffers. If we can just finally get to that, to the realization that we have a shared economic destiny, then we can begin to move in the direction that makes sense for all of us. Let's deal now with the key findings 17 040048, 040145, 040414 - 6/2/04 of the report. 9 percent of the regional population. percent of the City's population. 5. 5. percent. 3 percent of Philadelphia's population. We found that minorities own and operate 15,532 businesses out of a total of 62,894 in Philadelphia. 7 percent of all the businesses in this City. 6 percent of all Southeast Pennsylvania businesses also are minority owned.
Blacks, with 9,285 businesses have the greatest number of minority businesses in Philadelphia. Asians are second with 4,463 businesses, Hispanics at 1,566 businesses, 18 040048, 040145, 040414 - 6/2/04 and Native Americans at 278. Even having been systematically excluded from the private and public sector economy, minority businesses in Philadelphia have created jobs. In fact, 19,392 jobs, excluding those of the principal owners, are maintained by minority-owned businesses in Philadelphia. An additional 16,000 jobs have been created by minority firms in four Southeastern Pennsylvania counties, for a total of 35,073 jobs. 5 percent of the City's jobs. Minority businesses are vital job creators. The City's minority owned businesses carry an annual payroll of $360 million, about two percent of Philadelphia County's annual payroll. 6 percent. 8 thousand. 6 percent of the region's gross receipts. S. economic census data, the most recently available. They include all public and private sector gross receipts. While amazingly close to the recently leaked revenue data for City 20 040048, 040145, 040414 - 6/2/04 contracts, these numbers are different. They do indicate, however, that there is just as much work to do in the area of inclusion in the private sector as there is in the public sector. 7 percent of the county's gross receipts. We have to do more to encourage the growth rate of minority businesses, especially among Hispanics and African Americans. We found that one in every 11 whites in the region owns a business. One in every 13 Asian owns a business. For Hispanics, however, the rate is just one in every 49. And for African Americans the ownership rate is one in every 64. 21 040048, 040145, 040414 - 6/2/04 Recognizing the key role that the financial institutions must play in any proposed economic revitalization of the total business community, the subcommittee carefully reviewed best practices both inside and outside the City, including City Councilman Goode's report, Chase Manhattan's Chase Community Development Corporation, and the recent effort to support minority contractors through the African American Chamber's Emerging Contractor Financial Assistance Program. 5 million in available lines of credit to minority contractors. While each bank has signed on, some banks are more equal than others in the depth of their commitment. And we will have more to share on that front in the not too distant future. 22 040048, 040145, 040414 - 6/2/04 Also demonstrating financial services leadership in this area of minority lending are the Philadelphia Industrial Development Corporation, PIDC, and the City Commerce Department. Those two agencies have joined to provide a unique project starter facility for under capitalized minority contractors. For banks that have chosen to participate, these financing programs are running like clockwork. Bids are won. Financing is made available. Work is successfully completed. And the first loans have already been repaid. We love it. And the program shows that minority businesses can represent profitable business opportunity for the bankers. With the problems and potential now having been outlined, we want to now move to a discussion of the big idea that grew out of our report. The big idea of this proposal which would produce benefits even beyond the projected impact of minority business is a 23 040048, 040145, 040414 - 6/2/04 call for Philadelphia and each of the other four Southeast Pennsylvania counties to adopt a county and region first procurement policy, one that would also include a shift to a mainstream inclusion of minority businesses in both public and private sector purchasing patterns. Such an approach requires an expanded definition of smart government and of good corporate citizen.
Smart county governments, including Philadelphia's, would under this recommendation recognize that every procurement decision transcends a simple fiscal responsibility, and includes the clear potential for job creation within each county and across the region. The same logic would apply to the 200 largest businesses operating in the region. The proposal certainly requires the bench marking of current levels of in-region procurement by the public and private sectors, and the development of 24 040048, 040145, 040414 - 6/2/04 mechanisms to identify appropriate quality vendors, both minority and mainstream, across the region and to manage and monitor the activity over time. Once the aggregate public and private sector procurement volumes are identified by industry, private and service sector, Philadelphia and the region will also be extremely well positioned to retain existent regional businesses, and to attract potential new businesses. Such businesses will be able to quantify specifically the potential for contract opportunity within the City and region, should they opt to remain in or relocate here. Participating governments and companies will be encouraged to calculate the percentage of their in-county and in-region purchases as a part of their overall procurement plan. Such an approach should produce immediate, incremental economic value for Philadelphia, for the region as a whole, 25 040048, 040145, 040414 - 6/2/04 and for minority businesses located here, that would be strategically included in the new purchasing patterns. How can this be implemented? In an effort to glean successful growth strategies for metro areas where there has been strong minority business development, our subcommittee reviewed best practices in a number of areas, including Atlanta, Georgia. Cited was the Atlanta Inner Circle, or the acronym AIC, that we've included the web site for the Atlanta Inner Circle, which was organized in that city in 1993, and which was comprised of business leaders and government officials. Meeting in a minority-owned restaurant, that group discussed and implemented proactive solutions for the challenges facing minority businesses in that area. In 2001, the AIC was incorporated as a 501 C3 nonprofit entity, as a forum for developing strategies and ideas for 040048, 040145, 040414 - 6/2/04 empowering Atlanta's urban communities. AIC was launched by then Mayor Maynard Jackson, who met with businesses and public sector leaders, to drive home the need for the powerful economic development network in the Atlanta metro area. Our subcommittee concluded its report with several specific recommendations. One, as a key component in forging reasonable, that a presentation be scheduled wherein local public and private sector leaders would be introduced to the potential for broad economic growth, through expansion of minority business in the City and the region. In fact, we've already begun to have discussions with Mark Schweiker at the Greater Philadelphia Chamber of Commerce regarding his idea for a procurement summit, where we would bring in the large corporate entities in the greater Philadelphia area to meet with minority 27 040048, 040145, 040414 - 6/2/04 business owners, for the purpose of extending contracts. The next recommendation was that the primary theme of the event be that minority business development should no longer be marginalized as a function of government mandated affirmative active plans, but rather, adopted as a principle source of job creation and tax revenue generation for each county and for the region as a whole. Next, that a priority be made of this strategy with a focus on substantial development over a two-year period. Next, we recommended that regional leaders adopt a plan to increase gross receipts at minority businesses, according to a table that would show a growth that would approximately triple the gross receipts at minority businesses in the Philadelphia area.
We then recommended that regional private sector, led by the Greater Philadelphia Chamber and all regional chambers be encouraged to adopt the county 28 040048, 040145, 040414 - 6/2/04 and region first approach to procurement, thereby contributing to job growth and regional economic development. We recommended that corporate procurement departments be asked to calculate their current percentage of in-county and in-region purchases and to work toward a goal of keeping a significant majority of all purchases within the five-county area; that within the overall county and region first strategy, private sector leaders be encouraged to set a standard for substantial and appropriate inclusion of minority firms within the region; that minority focused chambers assist in matching appropriate high quality minority vendors with corporate procurement departments. We then recommended that Veradyne, a minority-owned IT firm, be commissioned to establish reporting mechanisms for both the public and private sector participants. The subcommittee further suggests that the first report of public and private 29 040048, 040145, 040414 - 6/2/04 sector performance in this area be released in the fall of 2004. We recommended that public and private sector leaders continue to focus on appropriate inclusion of minority workers and businesses in the regional construction industry and in the building trades. We recommended that the regional economic development strategies include a mechanism for enhancing entrepreneurial retail growth in minority communities and by minority business owners. We recommended that Mayor John Street convene an AIC like leadership group to own and manage the ongoing development of minority business growth across the region. And finally, we recommended that a $50 million portion of the Mayor's proposed $500 million economic stimulus fund be devoted to the creation of a capital source for the development of emerging minority businesses. I want to thank each of you for your 30 040048, 040145, 040414 - 6/2/04 invitation to present this concept. It's been disappointing that while we've been attempting since 1995 as a Chamber to present suggestions for the improvement of minority purchasing, that the Mayor and some of the local media have tried to reduce our legitimate interests in this fundamental economic problem to a public debate about the appointment of the Mayor's MBEC nominee. This has constituted a substantial marginalization of this broad and fundamentally important economic issue. In addition to the Minority Business Subcommittee Report, the African American Chamber, and the Coalition of African American Voters, Taxpayers and Businesses sent the Mayor a letter on April 13th, outlining 11 other major issues that impede black and minority business opportunities. They include, among others, the need to establish clear goals for minority inclusion in non MBEC professional services contract. 31 040048, 040145, 040414 - 6/2/04 I saw in a recent article published in the local media, that was the recipient of one of the lead disparity studies, that during the year 2003, $84 million in legal work was contracted out by the City of Philadelphia, $84 million. And of that $84 million, that comprised 56 different legal engagements. And of those 56, one was to an African American owned law firm. And there was no evidence that that conformed contract was actually turned into business. And so, it is probably safe to say that every one of the $84 million in legal work that is let by the City's government without bid, at their whim, was let to white owned firms. And I remember seeing in the article 21 a reference to the Mayor's spokesperson who said, we do this by choice, and we allow these legal contracts to go to friends of the administration. Apparently the administration has no 32 040048, 040145, 040414 - 6/2/04 black friends. On funding City contracts, to facilitate small business bid participation, our problem is...
Our problem is that the contracts are bundled in such a way that de facto you can't have -- and you know when those contracts are bundled de facto you can't have minority bidders on these contracts. I've heard the administration say in recent weeks the problem is that minority contractors aren't bidding on the large contracts in the City. If you bid demolition, for example, in packages of 200 houses per unit, you don't have African American contractors able to carry that kind of financing, to carry that kind of bonding, to do that volume of work. You know that when you package the deal. And so, if you really are serious about including minority contractors, you unbundle some of those contracts. You have to establish goals for 33 040048, 040145, 040414 - 6/2/04 minority inclusion in the skilled trades unions as a prerequisite for union project designation at public works sites. It is incomprehensible to us -- And we've had this discussion with the administration. It is incomprehensible with us that project work sites, public work sites are designated as union only work sites, when the administration knows and the City as a whole knows that 60 percent of the people who are members of the skilled trades live in the suburbs and don't live in the City of Philadelphia, and they're working on Philadelphia projects. And they also know that whenever they've been asked to describe the participation of minority journeymen in the skilled trades unions, the skilled trades say they don't know what those numbers are. We would think that those numbers should be available, and there should be some mandate for inclusion. We are not antiunion. We are absolutely pro union. We understand, though, that when 34 040048, 040145, 040414 - 6/2/04 unions are involved in the employment cycle, the gap, the historical gap that exists in the private sector between minority business -- minority employees and white employees narrows. If you go out and work in the banking community, go out and work in the health care community, you happen to be black, you have the same degrees, have the same experience, you'll make less money. This is statistically provided by the Bureau of Labor Statistics. And the only way that those gaps narrow is when both whites and blacks are on the labor unions. So we're not against unions. We're against racist unions. And we are saying to this administration in our letter to the Mayor that there ought to be more done to include people of color as journeymen and not just apprentices in unions. Providing appropriate levels of financial support to the Progress Plaza Shopping Center redevelopment effort. It 35 040048, 040145, 040414 - 6/2/04 is unconscionable to understand why Progress Plaza should be having a problem getting money to do their redevelopment effort. Reverend Sullivan, who is an icon for minority economic development, he was a world leader in this effort. He created Progress Plaza. And we should do nothing to allow Progress Plaza to whither away and die. We recently had a shopping tour, an African American shopping tour, that boarded buses at Progress Plaza. And people in the neighborhood said to us how strange it was that you had to put African American people on the bus in the parking lot at Progress Plaza to take them somewhere else to find a black-owned shop. There should be more work done at Progress Plaza. Improving report formats to ensure accurate accounting for minority contract participation, we have not been pleased for the past several years with the way that 36 040048, 040145, 040414 - 6/2/04 minority inclusion and participation is counted. There are double counts. There are excessive counts. There are misleading counts provided by the agencies that do the counting, so much so that they have made it very difficult for elected officials like yourselves and for the media to question the minority participation because the numbers are so overblown.
They will take -- As you know, they will take joint ventures where there is an African American or Hispanic partner with a white partner. And if the total value of that contract is $10 million, they will say that the entire $10 million was a minority contract. And that certainly is misleading, and the City officials know that. And we don't understand why those numbers are still used. If we were getting those kinds of contract dollars, as had been disclosed in those kinds of reports, we wouldn't be 37 040048, 040145, 040414 - 6/2/04 sitting here today. We need to ensure that trained neighborhood residents have access to at least percent of construction jobs 6 taking place in their communities. 7 It is absolutely unacceptable that 8 people who live in these neighborhoods, 9 where work is needed, where jobs are needed 10 have to come out of their house where 11 construction projects are taking place and 12 look over an eight-foot high fence and see 13 people from outside their neighborhood and 14 outside their City having exclusive access 15 to the jobs. So we're wondering why the 16 City can't move in that direction. 17 Establishing a City-funded 18 initiative to support the development of 19 African American retailers, including a 20 firm policy to ensure support for African 21 American street vendors. 22 There is now and appears to be a 23 growing trend toward having a dearth of 24 African American street vendors. 25 In some cities street vendors are 38 040048, 040145, 040414 - 6/2/04 considered an attraction. They are certainly a way for people to move from the entry level of retail, to storefront, to wholesale, and up the vertical integrated chain. But it appears that in this City African American street vendors are being discouraged from participating as vendors, even when they have been on our streets for years, providing good service to customers. We need to ensure that there is a policy -- I don't know that there is a policy. But if we're going to have viable retail growth, we have to have a concern and a policy that relates to inclusion for street vendors in our Center City. I see all kinds of street vendors in Philadelphia downtown selling fruit, selling pretzels, selling newspapers. And very few, if any of those people, are African American, who represent, again, 43 percent of the population. Establishing a City government related committee to review the impact of 39 040048, 040145, 040414 - 6/2/04 gentrification on African American homeowners and neighborhoods as part of the City's overall residential strategy. There is great concern in our neighborhoods: north Central Philadelphia, South Central Philadelphia, West Philadelphia, parts of Northwest Philadelphia, great concern about the fact that the development that is taking place is leading to the gentrification of historically minority neighborhoods. Many of the homes are being replaced with market rate housing that the people in those neighborhoods cannot afford. And there appears to be a plan. Somebody appears to have a plan that will ensure that that trend continues. We need to understand if a plan exists, that that plan be shared with everybody in the City. We see people in African American communities, as an example, who are being enticed to sell their properties in North Central Philadelphia for $35,000, and those 40 040048, 040145, 040414 - 6/2/04 properties are flipped and sold again within a mere matter of months for low to moderate six figures. And the reason that the people in the community sell their houses is because they don't know what the plan is. If they knew what the plan was, I think they would be better negotiators at least, and maybe decide to stay in those communities. So, we recommend that the City do that. We want to adopt the government plan that would triple the gross receipts, as we stated before. O. level of our largest private sector entities.
In order for Philadelphia to gain competitive economic advantage, as compared to other municipalities, we do finally have to involve all of our citizens and all of 41 040048, 040145, 040414 - 6/2/04 our businesses in producing goods and services, in creating jobs, and generating tax revenue. Unless that kind of policy commitment to meaningful inclusion is made at the highest executive and legislative levels of City government, it quite frankly won't matter at all who supervises the MBEC staff, whether MBEC exists at all or whether it should be replaced in its entirety with an entity that has an accountable mandate for economic inclusion and the wherewithal to get all of that done. Thank you very much for this opportunity. )
Mr. Crawley, thank you for your very comprehensive testimony. Thank you for your work you've done on behalf of the 21st Century Review Forum and your work at the Chamber, and your continued participation, as this City 42 040048, 040145, 040414 - 6/2/04 begins to look forward to holding an Economic Development Summit, crafting an economic development strategy, supposedly doing a $500 million economic development investment fund. Just as your vision showed that we have to have inclusion in that plan, as outlined by the 21st Century Review Forum, we also have to have inclusion in the future work that's supposed to be done. Let me note for the record we've also been joined by Councilwoman Donna Reed Miller. All members of this committee have attended this hearing. I look forward to questioning this first panel after we hear from Miss Moore. Miss Moore, please state your name for the record and proceed with your testimony.
Thank you. Good morning. My name is Deborah Moore, and I'm part of a coalition...
Okay. I'm part of a 43 040048, 040145, 040414 - 6/2/04 coalition... Now I'm too loud, but then I'm used to that. I'm part of a coalition of voters taxpayers and businesses of the African American community. Who is Donna Reed Miller? (Indicating).
Oh, okay. Because I'm in her District, and I've never met her. I find it interesting that Michael Williams is not here. Is that going to be the representation that we're going to get? He's still making a decision? Very interesting. This is a great report; excellent. I'm going to put it another way. Black folks ain't taking it no more. (Applause.)
I see where we have African American representation here, even though this report says Hispanic and Asians. I never see anybody but black folks fighting for black folks. So I'm representing the African American community 44 040048, 040145, 040414 - 6/2/04 today. Now, I don't know how it sounds but here we are. My position is this: I'm with another community organization called It's a Family Affair. We established a pilot program called Give a Job a Chance. We can only go to black businesses for that because of the non-traditional way we were asking businesses to employ black people from the community. Well, our pilot program didn't last that long because there weren't too many black businesses to go to. Our position is this: We're not voting for Democrats or Republicans or independent parties any more. We're voting for folks that bring contracts and jobs back to our neighborhood. (Applause.)
It doesn't really matter any more about the party's representation. Other neighborhoods, other ethnic groups, they get jobs and contacts. What do we get? We get the opportunity to vote 45 040048, 040145, 040414 - 6/2/04 Democrat. (Applause.)
What's that? My position is this: I guess I keep saying that, but it's because I represent the black vote, the black taxpayer. And our frustration is represented in this auditorium today. You see the signs? They speak for themselves. We're here to represent this report. The African American Chamber has no 13 power without the black community because the African American Chamber is the black community. So, we want the focus to come away from personalities and come into the homes and the personalities of the homes of the people that don't have jobs. We need contracts so we can have jobs. We read and we hear where representatives of other ethnic groups get all kind of money. And they take it back to their community. 46 040048, 040145, 040414 - 6/2/04 So when we voted this last time, we had rallies everywhere. And we were, you know, told that we're going to make sure the African American community is represented. Well, what does that mean? Skin color? We want dollars. We want green. We don't want black. We want green. (Applause.)
Somebody came over to me this morning and said, do you have the paper? I said, no because when I thought about it, I didn't have to write anything down. They can look outside and see what's happening to us. I don't have to write nothing down. (Applause.)
Maybe this is not really the proper way to, you know, represent -- You know, you bring a paper. No. Our representation is proper because the people that standing behind us with these signs. So I'm fighting for 47 040048, 040145, 040414 - 6/2/04 those folks. Am I supposed to say anything else? (Laughter.) (Applause.)
Oh, I'm sorry. I'm sorry. Let me say something else. I know ya'll thought I was finished, Mr. Crawley. (Laughter)
What do we want? Respect. When do we want it? Now. What do we want? Respect. When do we want it? Now.
Thank you, Miss Moore, for your testimony. I'll start with a few questions for this panel.
I'm sorry. I thought I was finished. Am I supposed to stay here?
You can stay there. The members of the committee may have questions for you. 48 040048, 040145, 040414 - 6/2/04
Mr. Crawley, can you please discuss... I know you discussed it somewhat in your testimony... the problems your members have had, the African American Chamber, with access to capital and credit and bonding, and how your group has dealt with that, and what recommendations you have for this Council.
Well, primarily we found that bank lines of credit have across the board -- bank lines of credit -- commercial bank lines of credit have generally not been made available to African American businesses. We've focused in the past year on trying to change that, specifically as it relates to the contracting community. But about two years ago we did a financial services survey of our membership, and found that about 70 percent of them could not have access to a line of credit, although they were running viable concerns. 49 040048, 040145, 040414 - 6/2/04 We went to the banking community, and sat with them, and asked them to consider putting up secured lines of credit for our contractors. They had not done that in the past, had not been interested in doing it. When our people went to them one at a time, some of them had some disastrous experiences. I remember one of our members going to a bank, looking for a line of credit, and he was being denied the line of credit because he worked previously for a company that had an unfortunate experience with that bank. This is a white-owned company, for which he happened to be an employee, in which he had no financial management responsibility. But because he used the name of that company on his credit application as a place where he previously worked, they saddled him with the responsibility for the unfortunate experience they had with the 50 040048, 040145, 040414 - 6/2/04 previous borrower. We had to call that bank and let them understand that they were doing something that was absolutely illegal, and they reconsidered and made him a line of credit. But this kind of thing happens all the time. And so, we find that it's necessary to pull the banks together. And some of them have been very forthcoming and very cooperative. We've got eight of them, as we said, who have agreed to do the lines of credit. We said to them, we started the lines of credit with the contractors, that this should be considered the crack in the door. We want to be able to get them to do similar kinds of credit facilities with people outside the building trades, outside of the construction industry. Because all of our businesses suffer in the same way. They go out and they provide work. They issue an invoice. While they're sitting there waiting to get paid sometimes 51 040048, 040145, 040414 - 6/2/04 for 30 and 60 and 90 days -- and it's not just in the contractor industry -- but they're waiting to get paid, they lose their employee base, they suffer poor credit, and sometimes they have to file a chapter. So, what we've said to the banks is that although we're starting -- although we're starting with the contractor community, we want you to gain sufficient comfort level to begin to move across the board. Term loans have generally always -- Secured term loans have generally always been available. You put up your house, you put up your first two children, you can get a term loan at a bank. But lines of credit, secured or unsecured, have been like pulling teeth. So this is the first step. And our contractors have done an extraordinary job to today, and I think the experience the banks have had so far has been good. 52 040048, 040145, 040414 - 6/2/04 Again, eight backs have signed up. Not only the banks have done an extraordinary job; some, I think, signed up because they felt peer pressure to do so. They felt public awareness to do so. They have put their names on the paper, and they have not yet done the kind of work that they ought do, to be engaged in this profitable business with our community. And so, as we mentioned in the testimony, we will be providing information about the reluctance of some of those institutions to actually do what they promised to do.
But I think that the smart banks, the banks that understand that there is profit opportunity in our communities, understand that our community spends billions of dollars every year, that we do have 9,000 businesses in the City, that they do carry substantial payrolls, those companies, those banking companies, will do well by this inclusion. 53 040048, 040145, 040414 - 6/2/04 We're not there yet. We just got a crack in the door. The report that you did that specified the disparity in lending based on where you were located, if you lived in a predominantly low income, lived in a predominantly minority community, the average loan size was smaller, that information is experienced by people all the time. So, we think that we have a crack in the door. We hope it's going to be a lot better than it is right now. But we are coming off of years and years of neglect and years and years of lack of involvement by the major national institutions in this City.
Can you tell me you have some general estimation of what level of capital infusion is necessary to triple the gross receipts of minority businesses?
Can you tell me your general estimation what level of 54 040048, 040145, 040414 - 6/2/04 capital infusion is necessary to triple the gross receipts of minority businesses?
Well, that would vary. I mean, some businesses are capital intensive; and others aren't. I mean...
I'm talking more of an aggregate number, in terms of how many millions or billions of dollars you think needs to be infused to actually utilize minority businesses in the way they need to be utilized.
Well, you know, I think if you look at the level from your own report, if you look at the levels of investment in loans by banks in communities that are outside our community, if you were to apply that same kind of banking involvement, credit extension, to our communities, we would have more than enough to provide the kind of working capital financing that our community needs. We don't want anything more or separate or different. We want the same kind of credit facilities that have always 55 040048, 040145, 040414 - 6/2/04 been available. Your report outlines just what they get. We need to have the same.
And for the record, you're calling for at least ten percent of the proposed $500 million economic development investment fund to go toward minority businesses?
That's correct. That would include programming for training. One of the things that we're concerned about is retail, both on the vendor side, and on the storefront side, on the wholesale side, the totality of the retail experience. And we're going to need to provide some funds for training, for development, to put together group purchasing programs so that people can benefit by the discounts that would be available by those kinds of volume purchases. All of these things will require money. And it won't be sufficient simply to make the contracts available or to open the store and send in the traffic. 56 040048, 040145, 040414 - 6/2/04 We're going to need economic development stimulus money to ensure that those programs work. The program with our contractors could not have worked without the financing we got from the City Commerce Department. It wouldn't have worked. But we had a great idea. We thought it made sense on paper. We had contractors who are ready, willing and able to do the work. But unless we had that infusion from the Commerce Department, the Emerging Contractor Program would not have been the success it has been.
Okay. Thank you. Last, because I know other members of the committee have questions, as part of that economic development investment fund, do you support the creation of a loan guarantee fund for low income and minority businesses?
Yeah. I -- I think -- I think that loan guarantees are a part of the portfolio; you got to have those. 57 040048, 040145, 040414 - 6/2/04 The Federal Government has done loan guarantee funds, the SBA for years. Those certainly have a place. PIDC has been involved in loan guarantees. I think -- I think it is perfectly appropriate that we have loan guarantee funds that are targeted at minority business stimulation. We would be missing a valuable tool if we didn't happen to have them. There was talk about those kinds of things years ago. I mean, back in the early '70s when I was in the banking business, there was -- there were loan guarantee funds available. But those things have fallen by the wayside. Some of that has happened because the focus has shifted. People don't care about minority businesses. They're not as responsive to minority businesses because they're not as aware of the negative repercussions from not having a viable minority business community. 58 040048, 040145, 040414 - 6/2/04 And quite frankly, we've got some new larger players in the financial services industry here in Philadelphia. I mean, back in those days we had banks that were primarily based in Philadelphia. We had banks that were homegrown. And the people who were presidents of those banks went to school here, went to college here, and spent all of their professional career in those banks, and knew the neighborhoods and knew the people in those neighborhoods. Today the presidents of most of the banks that operate in this City are not the presidents of the institutions as a whole. They are regional presidents. The C.E.O., President, and Chairman of those institutions are in places like North Carolina, Pittsburgh and Boston. And so, we don't have people in the financial institutions who have as much hands-on concern about our communities. So we've got to bring that dialogue up to 59 040048, 040145, 040414 - 6/2/04 them. It's not going to come out of their own deliberations, unless they understand it. It seems as though every two years the leading banks in our community change their presence. They get rotated back to North Carolina or rotated back to Pittsburgh. And so, that causes lack of continuity. We've got to -- We've got to fill the gap in that regard. We can't count on them having the wherewithal, having the experience and the knowledge of this community, to do the right thing. So, it has to come from the public sector, and from the advocacy groups, and from the community itself.
Thank you. The Chair recognizes the Vice Chair, Councilman Nutter; then Councilwoman Tasco, then Councilman Rizzo.
Thank you, Mr. Chairman, and good morning, Mr. Crawley, 60 040048, 040145, 040414 - 6/2/04 and Miss Moore. Thank you both for your testimony. Mr. Crawley, I wanted to ask you about two parts of your testimony, and . If you could enlighten us beyond your written testimony with regard to the Atlanta Inner Circle. And I'm having the web site checked as we speak. Can you tell us a little bit more about this organization: What it did, what it presently does, and how such an entity would work, as you see it, here in Philadelphia.
I think the most important thing about the Atlanta Inner Circle was that it was a commitment to ongoing ownership of inclusion in the City of Atlanta. And they didn't relegate it to the public sector or leave it to the private sector to get its own enlightenment. Both public and private sector leadership came together. 61 040048, 040145, 040414 - 6/2/04 And the most important thing, I think, about it, as we alluded, was that the Mayor of the City of Atlanta played a visionary role in pulling all of those people together. And so, they knew that when they came to the table, that what they were coming to do was not to be involved in a minority set aside program. They weren't there to rob Peter to pay Paul. They were there to grow the pie. They were there to work together to do programs that would ensure that there was full participation and inclusion in projects that took place in the City of Atlanta. As you recall, when Mayor Jackson assumed the leadership of the City of Atlanta, one of his first projects was the Atlanta Airport Project. And he announced that he wanted to have percent of those contracts go to 24 minority business owners. And he got a lot of push-back from 62 040048, 040145, 040414 - 6/2/04 the private sector. He got a lot of resistance from the contractor community and from the labor unions in Atlanta. He got a lot of push-back from other elected officials, who challenged him in the courts, who tried to impede his progress in every conceivable way. And so he realized, as he fought this battle over two years... And finally after two years they realized that he wasn't going to go away, he wasn't going to stop. And again, the position he took, and the most important position that could be taken out of a group like this is to understand that we should not have development unless the development is inclusive. And that was Maynard Jackson's position. His position was unless we have inclusion at the level that we have specified, which we think is appropriate, then there won't be an Atlanta Airport. And so far we haven't heard those 63 040048, 040145, 040414 - 6/2/04 kinds of voices coming out of our City government. And then when he started to make that statement, he drew around him other people who understood that it was well within the enlightened self-interest of not just the public sector, but the private sector of Atlanta, to understand the value of inclusion. And that's how that project worked. It was a leadership group. They came together. They talked about what Atlanta needed as a City as a whole. They talked about the entire economic planning responsibility for Atlanta. And within that, they understood that it couldn't happen unless there was inclusion that came down from the very top of their corporations and from the very top of their government. In this City, we don't have that. There's nobody who's playing that role. We have -- We have some people in government who have been speaking out recently, and 64 040048, 040145, 040414 - 6/2/04 over their entire career we've had some people who have spoken out on this issue. We've had some people in the private sector that you could name on the fingers of one hand who have been really staunch advocates for this. But we don't have people working together, understanding how a combined effort could be good for all of us. And at the same time, we have a media... We have a media environment that reinforces every day the position that if African American, Hispanics and Asians grow their business, that they are taking something away from white people. And that creates a tension. That creates antagonism. I point to the article that was in the Inquirer recently about a man named Graham, who was an insurance brokerage. And the Inquirer took a great deal of time interviewing Mr. Graham and asking him about the ugly underbelly of minority participation.
65 040048, 040145, 040414 - 6/2/04 And he was very forthcoming in saying how much he disliked and resented the fact that the City government made him and the DRPA made him and the state made him and the Federal Government sometimes makes him include minority insurance brokerages. And he said that this was his business, and they shouldn't be allowed to participate. And he said some very mean-spirited things about it. But if you read the Inquirer's first two stories on this, it was clear that the Inquirer's reporters and the Inquirer's editors agreed with Mr. Graham. At no point did they ever ask Mr. Graham how he happened to get his contracts. Mr. Graham wrote a lot of checks to people in the public sector. And at no time did those reporters ask Mr. Graham if he earned his contracts by being an absolutely professionally competent insurance brokerage or whether he also was politically connected. 66 040048, 040145, 040414 - 6/2/04 The feeling that African Americans are the only politically connected people, the feeling that there should be an ongoing schism between people of color who do business and whites who do business is fed by the media. And they do an absolute disservice to our community in encouraging that. I hear people say to me every day, you know, how greedy are these African American businesses. They want to be involved in everybody's contract. 7 percent of the City contracts, and, you know, less than 10 percent -- less than 1 percent of gross receipts as a whole in the City. If you read the Inquirer, if you read the Daily News, you would get the impression that African American businesses are ripping off the business community, robbing all the Procurement Departments. And that has to stop. Unless that stops, we won't be where we are. 67 040048, 040145, 040414 - 6/2/04 And I think another role that an AIC can play is in understanding that -- that an appropriate tone has to be set in the City before we can have the kind of progress and involvement that we need to have. )
The second issue I wanted to raise on was the... You made reference to a letter that you had sent to the Mayor back on April 13th, outlining 11 other major issues that impedes black and minority business opportunity. And then you list them through your testimony. My question is, was there a response to the letter and its various points.
Yeah, there was a response from the Mayor. We sent our letter on April 13th. The Mayor sent his response... And I'm trying to see whether I have it as a part of my collection here. But we were deeply disappointed by 68 040048, 040145, 040414 - 6/2/04 his response. One of his responses, for example, had to do with the issue of the building trades. And he cited a problem with the First Amendment, saying that the First Amendment would prohibit him from --
Mr. Crawley, could you pull the mike a bit closer? The stenographer's having a...
He cited the First Amendment in saying that the First Amendment would prohibit the kind of inclusion that we were seeking for that. We asked him about the full inclusion of goals that would have us triple the volume of business done with minority contractors and businesses in the City. And as you know, it's a very meager volume of those contract dollars now. And we said, you know, would you be able to triple it over the next three years, just to get started? And his response was, I am unable to respond thoughtfully to this question in 69 040048, 040145, 040414 - 6/2/04 the time allotted. An answer will be transmitted under separate cover, after the administration has had an opportunity to review the findings of the disparity study. We are very concerned about the fact that many of his responses tie back to the release of the disparity study. And the disparity study, as we know, has been around for a while now, and has been leaked out. And we think it's well past the time that it should be formally released; and that the administration, one, have comment as to how we generated the numbers, the shameful numbers that exist on that report; but, two, how they intend to use that data to move ahead with some of the things that we have specified. So our great concern is that the tone of the response was not one that gave us much encouragement that this administration is ready to move ahead aggressively, with full inclusion of African American and other minority businesses. 70 040048, 040145, 040414 - 6/2/04
Let me, then, close with finally asking: If you are comfortable, could you forward to the Chair both a copy of your letter to the Mayor as well as his okay?
It just appeared next to me. Request withdrawn. (Laughter.)
But let me... So actually, I know you made reference in your testimony just now that the disparity report had been leaked. That may have been how it came to the news media's attention. But you play recall I actually sent every member of City Council a copy directly, with a cover letter, so that I don't think that qualifies as a leak. So, it is out. It is available.
Yes; I understand. Thank you very much, Mr. Chairman. 71 040048, 040145, 040414 - 6/2/04
Thank you, Councilman Nutter. The Chair recognizes Councilwoman Tasco.
Thank you so much for a very good, poignant, to the point report; quite good. I just want to say that you and I have been on this road, I guess it's the '70s, in trying to improve the participation of minorities in the business and the contracting. And it doesn't seem to be any better off than we were back then. And you look at all this black leadership in this City, and we're no better off than we were. I'd like to say that one of the areas you talked about was the commitment of the banks to participate in your program. 72 040048, 040145, 040414 - 6/2/04 One of our discussions, an ongoing discussion, is while we have the commitment, and you cited the problems now that exist that did not exist back in the '70s, where the bank President did live in Philadelphia but now they're some place else. Even then we recognized the fact that where the commitment came from the top to be inclusive, we never got the message down to the guy who was making the loan or the people who had the day-to-day decision-making powers to approve or disapprove a loan. In your discussions with our local banking institutions, have you thought about asking them to do some sensitivity training and training of their staff who have to make these decisions, so when a contract is turned down or a minority applicant is refused, that you don't have to go to the President of the bank, that there is some sensitivity and barriers that these companies need to know that exist 73 040048, 040145, 040414 - 6/2/04 that keep minorities out of the process. I think that's very important, that you go down below the President and the vice president, to reach to the person who's making those decisions.
You're absolutely right. And in putting together the and a 10 half million dollar line of credit, we had 11 worked with a number of middle management 12 and upper middle management people in the 13 banks over a period of about 15 months. 14 And we were still being delayed, and 15 we were still being avoided, even though 16 they paid lip service to the concept. 17 And finally we had to go directly to 18 the president of each local -- each local president of every bank in this region to get them to make the commitment. And the bank presidents did make the commitment. We do have an ongoing -- with the chamber -- we do have an ongoing periodic review with the staff people, the senior staff people, the lending groups, 74 040048, 040145, 040414 - 6/2/04 the senior vice presidents of the lending departments. We meet with them on a periodic basis, to give them feedback about our experiences, to let them ask any questions they might have of us. But we are so careful and so sensitive to what you just raised. We cannot tell our people simply to go and do business with PNC Bank. Because if they walk into any branch of PNC Bank, the chances are they're going to find somebody who knows nothing at all about the program, who knows nothing at all about the commitment, and who will tell them that we don't do this kind of business. So it is critical for us, one, to know where the commitment actually lies, who is capable of making the credit decision, and who understands the policy. And so, for us, with so many bank branches, with so many ways to access these banks, it's better for us to find out who 75 040048, 040145, 040414 - 6/2/04 in the corporation, who in the banking network is able to do that, and to send our people directly to them, than to try to ask them to train everybody in the institution, because I don't think they're going to do it. What we do is make sure that our people go to the people who have the direct line of communication with the top of the house. Other than that, they're going to have a bad experience.
Thank you. And the other issue is the line of credit really is important because the payment process from contractors to the minority contractors, subcontractor, can put them out of business.
They get delayed and delayed and delayed. And while they're waiting for their money, like you say, they lose their staff. So the line of credit is extremely important so that they can continue with 76 040048, 040145, 040414 - 6/2/04 their business ongoing. I have so many questions. And I don't want to hog the whole thing. But I do want to ask you a question. During the course of the Commerce Director's testimony, she talked about the Economic Development Summit. I noticed that you talked about the Chamber and your organization's doing a procurement summit, which I think is a good thing to do. Is there anyone from your organization on this economic summit? Have you contacted anybody or have you been contacted to serve on the planning committee?
No. We were contacted. We were contacted about the time that the Mayor made his announcement of the new MBEC nominee. We were contacted by Stephanie Nadoff. And we told her that we didn't think that they were ready to do the kind of plan that we needed to have, to have a 77 040048, 040145, 040414 - 6/2/04 comprehensive involvement from the Chamber. So what we're going to do is, as we said before, to go directly at the Greater Philadelphia Chamber of Commerce. We sent a letter that pre-dates Stephanie Nadoff's appointment and pre-dates the MBEC nominee's appointment. We sent a letter on December 22nd -- I think I have a copy of that letter -- to Mark Schweiker, asking him to pull together the heads of his largest corporations -- those are generally people who comprise his executive committee -- and have them to sit down to talk about ways that there could be more procurement involvement with minority businesses throughout the City and throughout the region. And we asked him to get back to us on the 25th of March, give him 90 days to think about ways that that could be done; where at the same time, one day later we sent a letter to the Mayor of the City of Philadelphia, asking him to get back to us, again, on March 25th, to tell us about the 78 040048, 040145, 040414 - 6/2/04 restructuring of MBEC which we had been waiting for for more than a year. To his great credit, Mark Schweiker got back to us with a hand-delivered letter on that day, on March 25th. And among other recommendations, he said he wanted to do a procurement summit. So we knew that that was already going to happen before we heard Stephanie Nadoff talk about her economic summit. Our focus is on what needs to happen for minority businesses and for African American businesses. To this day we have not received a letter from the Mayor responding to that December letter about the restructuring of MBEC. And so, our great concern when there was an announcement that there would be a new MBEC director, without us having sent a letter -- I have a copy of the letter -- having sent letters to the Mayor asking about the restructuring, dated December 22, 2003, and the first thing we know about 79 040048, 040145, 040414 - 6/2/04 MBEC is a leak again of the announcement of the name of the MBEC director. So that's why we have not been involved in the economic summit. We were already planning to do something else. And we hadn't heard anything back from the Mayor, so we began to talk directly with the private sector.
What is the ongoing role of the subcommittee of the 21st Century? Is that abandoned? Are you --
We don't really have an ongoing role, other than the fact that -- I mean, because that was a part of 21st Century Review Forum. And again, we had to create our own subcommittee. We were... There was no minority business subcommittee or no minority business committee established under the 21st Century Review Forum. And when I went to that first meeting, I heard them talk about what they thought the economic agenda would be for 80 040048, 040145, 040414 - 6/2/04 the City and for the region, but there was no discussion, none, of how minorities would play any role in that, how African American businesses would play a role in that. So we told them that we would be establishing a subcommittee. The group of people, the people 10 who came together, are still committed to 11 pushing this agenda, to ensuring that this 12 idea doesn't die. We're not doing it as a 13 part of the 21st Century Review Forum. 14 From what I understand, the Review 15 Forum's report is on the shelf and pending 16 further action. But I don't know what is 17 happening with the Review Forum. 18 All I do know is that the group that 19 we put together is still interested in making sure that the things that we uncovered in our report get implemented, both in the public and private sector of the City.
Let me ask you another question. On of your 81 040048, 040145, 040414 - 6/2/04 report you talked about sent the letter to the Mayor on April 13th outlining issues 4 that impede black minority business 5 opportunities, including... Did you get a 6 response to this? Was that the letter? 7
That we got a letter of response, but it was a disappointing response.
The one that you talked about you can't do anything with the unions because of the First Amendment.
What does the 82 040048, 040145, 040414 - 6/2/04 First Amendment have to do with that?
Somebody may be able to explain that to us. Mr. Chair, maybe you might ask that question.
We want the Mayor to explain it to us. He's the one that wrote the letter. (Applause.)
I certainly think that -- I think that -- And commend you on the report. You've certainly touched on all of the issues that are major issues in this community. One of the problems we have as a Council, in dealing with the professional services contract is that the contracts are let, and they're let for a year with renewals. If they were let with a three year -- under a three-year term, the Council would have to approve them. We 83 040048, 040145, 040414 - 6/2/04 have no approval over those professional services contracts. And a lot of contracts that the Council used to approve are no longer approved because they went -- we went to that process of letting contracts on a one year basis with a three-year renewal which does not give any input by City Council, in terms of what the terms of the contract are, what minority participation. I certainly think that this Council has been in the leadership, going back to Councilman Blackwell, when he established the minority MBEC program in the City, because then we knew that there was a need. But side -- side actions have taken place to undermine any effort by the MBEC office, as you said, no matter who leads it, has been put into place to prevent any meaningful participation of African Americans in the business of this City. And when the message is sent that we're not doing business with African Americans or any other minorities, then 84 040048, 040145, 040414 - 6/2/04 it's okay for the business community to ignore this community. So the message has to come from the top. And I thank you.
Our problem with MBEC is not related to who's going to be the managing or supervisor of the entity. It's whether the entity is still relevant in its current form in the year 2004. When MBEC was put together, the concept was that there would be minority involvement, but the only way that minorities could be involved was that they go through MBEC, which wouldn't include all of the contracts let in the City. The professional services and those other contracts were not even included in MBEC's purview. MBEC had no authority over those, as you know. And even worse than that, the assumption was that all those contracts would first be let to whites because the assumption was also that there were no 85 040048, 040145, 040414 - 6/2/04 black, Hispanic or Asian businesses that could serve as prime contractors. So the only way that we would be able to involve -- And this is the MBEC structure. The only way we would be able to involve minorities is, one, let the contract, let a white bidder bid on the contract, and then find some minorities to participate. That's an outmoded concept. There are certainly African American business owners who can bid as primes on these contracts. And that's another thing that comes out loudly and clearly in the disparity study. There are virtually no black prime, no -- virtually no Hispanic prime contractors bidding on City contracts. That has to stop. That is an outmoded concept. And it denigrates and marginalizes the great professional competence of the businesses that we now have in the City 20 years later. And so, we don't want to work in that kind of 86 040048, 040145, 040414 - 6/2/04 environment any more. And it does create a situation wherein you're giving that contract to the white bidder, and now he thinks it's his contract. And the minority participant has no say in that contract. That contractor, having won the right to exercise that contract, can eliminate the minority participant, even though that minority was on the contract at the time the bid was won. He can simply replace that person at his whim. And that shouldn't exist. So, for a number of reasons, we think it's time to revisit the whole way in which procurement is done. And we need to look at procurement from the top down. And procurement, at the top of this administration, at the top of the government, ought to have an inclusion mandate. Include people of color in all purchase considerations of the City, not just in some ghetto of procurement called 87 040048, 040145, 040414 - 6/2/04 MBEC. That worked for 1983, but it should work in the year 2004. (Applause.)
I just want to make one final comment. (Extended applause.)
I just want you to add in your... another part to your responsibility, is to look at how contracts are given out in the provider community because we're having problems in the Health Department, Department of Social Services, where a number of neighborhood providers, African American minority providers, were doing business, providing services in the community; and they are no longer getting those contracts. Those contracts are being awarded to friends of people in these departments; do not get an opportunity -- And MBEC no 22 longer monitors the nonprofit community. And so, therefore, they also provide employment in the communities while they are nonprofit. They provide the 88 040048, 040145, 040414 - 6/2/04 minority -- They provide access to people of color in the community to access services within the community, and not have to go outside of their community for services. They also provide employment for people in the community to provide those services to the residents of that community. But that is another area that we have to look at, and will be looking at because you will find that those community groups did testify during the course of the budget hearings, about how they are excluded, and how their contracts are taken away and given to other groups. And it's just not fair. And so, it is serious problem in the City that we have to address.
Thank you. 89 040048, 040145, 040414 - 6/2/04 Good morning to both of you. Thanks for being here. I'm working on an issue that makes me look back. And maybe you can help me. I don't know the answer to this question, on how we can do this particular type of business. But we just spent $50 million plus with Motorola Corporation to install a new radio system to support Fire Department, Police, and all the operating agencies of City government, $50 million plus. I don't have a clue whether there was minority participation or how you can even have minority participation, when you're giving a bid to a Chicago-based company that imports, I would assume -- and I'm assuming here -- much of the labor, professional laborers with them. And they come, they do their thing, and they leave. How do we begin to approach -- This is a big deal, $50 million plus. And I have no idea whether or not there was minority participation in that. 90 040048, 040145, 040414 - 6/2/04 Now that I look back, it was installed. Just turned on last year. What do you think about that?
I think that there shouldn't be a single contract that goes through this City government that's not reviewed for its appropriate impact on the City economy, and then the regional economy, and for its potential to provide appropriate levels of inclusion in communities that have been excluded. And that would relate to everything. And if you did it that way, if that was the way business was done in this City, we would simply go about the business of including people in the Motorola contract or whoever it happened to be. There are no brand names that exclude African American participation. There is no industry that includes African -- excludes African American participation. We have people who have gone to the very best business schools, technical 91 040048, 040145, 040414 - 6/2/04 schools, and professional schools in the country for at least the last 35 years. So they can produce anything. They can provide any service. You cannot -- You cannot say to us that $84 million in legal work was done by the City and no black firm did a single dollar's worth of that legal work, without having us have a strong suspicion that we were purposely and conscientiously excluded. So, when I hear you talk about Motorola, I'm simply saying that it doesn't matter what the brand is, it doesn't matter what the product or the service is; if there is a mandate, if we understood that it is well within the enlightened self-interest of this City and its residents to include people who live here in the economy of the City, then we'd simply do it. VOICE IN THE AUDIENCE: That's right.
So when we go out 92 040048, 040145, 040414 - 6/2/04 with a contract -- When we built the stadiums, obviously, we got lots of labor locally. But let's go back.
40 percent of it was City residents. 60 percent were people outside the Philadelphia. 40 percent. Our Philadelphia Phillies.
All the dialogue you guys had in Philadelphia City Council. 40 percent of the employees. (Applause.)
I'd like to have 93 040048, 040145, 040414 - 6/2/04 them bring some of the hay to me. (Laughter.)
But let's talk again about these big national contracts. Are you telling me that you believe if they wanted to, that they could structure a contract for the installation of that radio system, insisting that Motorola subcontract with local technicians, local antenna installers, rather than importing their work force from the midwest?
I think if Motorola knew that that was a part of the local mandate for the procurement process, Motorola would figure out a way to get it done. And in the absence of that, Motorola reverts to business as usual.
And maybe they did that. Again, I don't know whether that occurred or not. So, I want to make myself clear. I don't know the answer to the question whether that occurred or not. I don't know. But we're going to find out. We're going to look back because maybe 94 040048, 040145, 040414 - 6/2/04 looking back can help the future. Thank you. Thank you, Mr. Chairman.
Would the role of MBEC... Would they have informed you as to whether or not there were minority? You know, I don't like that word. If they -- Would they have informed you if block folks were working on that job, if they really led up to their role? (Applause.)
I think that if that were the case, that would have been something that, if I were Motorola or I were the Department of Public Property, that I would have talked about.
And it's not about Michael Williams. 95 040048, 040145, 040414 - 6/2/04
I know. But what I'm saying is, I don't know who you directed your question to, but I'm getting ready to bring you another answer. My position here is what you just questioned. If the elected officials and those other elected officials called ministers, if they were really on top of the business of being about the business of bringing jobs and contracts into the neighborhood, you wouldn't be asking that question. (Applause.)
But let me say this to you, Councilman Rizzo: Your office... I'm'a bring this to the attention of the public. We have reached out to your office, my organization. And you have helped us tremendously. I don't know the rest of these folks. (Applause.)
And that's... I think that's important to know. I mean, we're 96 040048, 040145, 040414 - 6/2/04 steady voting every, you know, four years, whatever it is. I have a report card here. I joined a group of people that make sure that the community knew the position of jobs and contracts for folks that were running for office. We made sure that this information were at -- this information was at the polling places. And a lot of those candidates lost because they didn't support jobs and contracts. So, Motorola, Mickey Mouse, Disney World. None of those folks should be able to come to this town... (Applause.)
Because you should be coming -- You should be coming to us and giving us the answer, not asking us the question. 97 040048, 040145, 040414 - 6/2/04 I'm sorry. But I'm not really sorry. You know, I'm just being...
And because of some recent issues associated with that job, it made me ask the question. And I'm not embarrassed to tell you that I don't know the answer.
And I'm not embarrassed to tell you that you should have known the answer.
And I agree. I agree. (Applause.) 98 040048, 040145, 040414 - 6/2/04
And I'm not trying to trash you, Mr. Rizzo. I'm just trashing the... This is a street fight, Street administration and community.
I'm trashing the process. I'm sorry, Mr. Wilson Goode, but it's time to go there. And like I said, who has the contract to bring the hay to Smarty Jones? Thank you.
Thank you. Chair recognizes Councilman DiCicco. COUNCILMAN DiCICCO: Thank you.
Not because she mentioned Mickey Mouse. COUNCILMAN DiCICCO: Pardon me?
Not because she 99 040048, 040145, 040414 - 6/2/04 mentioned Mickey Mouse. COUNCILMAN DiCICCO: Nothing to do with Mickey Mouse. He did run against me, actually. Thank you, Mr. Chairman. Thank you. Can you hear me? Can you hear me now? ) COUNCILMAN DiCICCO: Thank you, Mr. Chairman. And good morning, Miss Moore and Mr. Crawley. Councilwoman Tasco touched on something. She's talked about 30 years the struggle has been going on. I'm more familiar with it, obviously, for the last nine years that I've been in Council. And I've been at many different hearings. In fact, I even attended the African American Chamber of Commerce one time. I talked about my father's business including African Americans. He was a number's writer, as you remember. But anyway, that being said, in your testimony on is one of the items 100 040048, 040145, 040414 - 6/2/04 that you referenced in your letter to the Mayor, ensuring that trained neighborhood residents have access to at least 5 percent of the construction jobs taking 6 place in communities. 7 For me, that goes to the heart of 8 this whole issue, and this debate that has 9 been going on for decades. 10 Unless people are trained, they're 11 never going to get the job. How do you get 12 them trained, I think, is the question that 13 we really need to be dealing with. 14 There is an historical... It's 15 historical in this City that minorities, 16 people of color are less likely to be 17 trained in the trades to become journey 18 persons, which therefore excludes them from 19 the process. 20 So we can talk about investment and 21 talk about the business community, but 22 unless those jobs are made available to 23 people, we're going to be talking about 24 this for another 30 years. 25 So the question is, how... Do you 101 040048, 040145, 040414 - 6/2/04 have suggestions, recommendations as to how we do we get people into the position so that they're qualified to get the jobs when those jobs are finally let? And let me just finish this thought. Several years ago, eight years ago, I embarked on a mission to do a housing development in my District. I'm happy to say it's under construction. 93 homes were sold in four and a half to five days. Very diverse group of folks bought those homes. My vision was not only to remove the blight and build houses, but my hope was that we were able to employ people from the immediate community, from the Zip Code or two Zip Codes around that section of my District, so that they would become wage earners, which would then give them the opportunity to become homeowners, homeowners for maybe the houses that they were actually working on. See, I think it's very simple. I think if you give people the skills to be 102 040048, 040145, 040414 - 6/2/04 able to participate and to be true job holders, if you will, trades persons, this plan that you mentioned about housing in certain sections of the City could really be a massive... overall of our housing development throughout the City. Because those same people who would be trained to work could be employees on the jobs, and then become homeowners. I don't think it's that difficult. Only if we are able to crack the historical situation that we have in the trades in this City -- And I enjoy support from the trades, so I'm not fighting with them. But we've got to open the door. And unless we open that door, nothing's going to change. Nothing will change. And the key is, do we have the political will to say, it's got to stop. You just can't take care of suburbanites to come in and work in our neighborhoods and leave at the end of the day. And I don't have anything personal against those folks. They're entitled to 103 040048, 040145, 040414 - 6/2/04 work like everybody else. ) COUNCILMAN DiCICCO: But until we open the door and give people who live in this City the opportunity to have jobs, all those other social ills that we have are just going to continue because it's just never going to stop.
So we have to figure out, how do we get the door open into the trades, so that people become trades persons and not the apprenticeships? Because they don't get the jobs. That's just... That's just a lot of -- That's just a lot of fluff at the end of the day. And until we figure this out -- And maybe it's the political will. And I'm not saying it's this administration or any other administration. It's us collectively. We got to figure out -- We got to stand up and say, it's got to stop, and you got to start training those folks. So, you know, it's a question 104 040048, 040145, 040414 - 6/2/04 statement. I have a tendency to do that because I want to let you know what I'm thinking, where I'm coming from. How do we get to that percent, unless we open that 6 door? 7
Councilman, you are 8 clearly singing our song. 9 We explained earlier in the 10 presentation that we were perhaps most 11 disturbed by the Mayor's response to the 12 question about having appropriate levels of 13 inclusion in the building trades. 14 And when he gave us a response 15 that... 16 COUNCILMAN DiCICCO: I didn't get a 17 chance to read the response, so I apologize 18 if it's in there. I just... Is that the 19 Constitutional issue? 20
Yeah. He said the 21 First Amendment kept him from doing this. 22 Oh, here it is. We asked him to 23 establish goals for minority inclusion in 24 skilled trades. 25 He said, as you know, the First 105 040048, 040145, 040414 - 6/2/04 Amendment prevents the City from either requiring or prohibiting that any construction project be undertaken with union labor. Notwithstanding the constraint, the administration has worked in cooperation with the City's building and construction trades to fill over a hundred new apprenticeship positions with minority workers who graduated from a diversity apprenticeship program. See, that's back again to the program that doesn't work. Our issue is not how many people are in the diversity apprenticeship program, because they put people through there every year. The problem is nobody comes out the other end. The problem is, we need people who have journeyman cards. And the problem is -- And we've been discussing this with the School District -- that years ago, before the schools became 106 040048, 040145, 040414 - 6/2/04 85 percent African American and Hispanic, there were metal shops, wood shops, and all those other kind of shops. And when you came out of the public school having gone through that program -- COUNCILMAN DiCICCO: You had a trade.
You would be a journeyman. I know people who are friends of mine who had jobs as union organizers, and they would pull up on a construction site. And they would see four or five people there working. And his job was to find out if they had a union card. If they didn't have a union card, he'd either shut down the project or said, we'll put you in a union. You had a choice. Now, for black people they don't say, we're going to put you in a union. 107 040048, 040145, 040414 - 6/2/04 They say, we're going to put you in the DAP program, we're going to put you in the pre-apprentice program. And it's going to take you two years to finish that, another six or seven years to finish the apprenticeship program, and you will never have the subjective decision made, the purely arbitrary decision made to finally give you the journeyman's card. So the way we get around that -- There's two ways: One, we've got to ensure that we have more minority prime contractors because we have minority prime -- And that's what the Emerging Contractor Program is about. If you have minority prime contractors working in those communities, their first hope would be that they can hire people from their neighborhoods to work on those construction sites. And then if the unions don't have people who are -- who look like them, then these will have to be prevailing wage situations, where people will make the same 108 040048, 040145, 040414 - 6/2/04 wage that they would make in a union, have the same benefit package. They simply wouldn't have the journeyman's card because the union didn't give to it them. So sometimes we need to give them training. And we do have a training program at work with the emerging contractors. But sometimes people have all the training they need. They simply don't have a journeyman's card because the union won't arbitrarily make the decision to give it to them. That's why we're so frustrated because the Mayor says that it's the First Amendment keeping us from having the kind of inclusion we need, to get people in a position to make it work in their own neighborhoods, feed their families, and take care of their children.
Mr. DiCicco, can I respond also? I heard you say that one of the problems is the training programs in the neighborhood. 109 040048, 040145, 040414 - 6/2/04 I just wonder if anybody ever questioned the folks that get the jobs first, if they had training from the neighborhood. I just wonder if anybody thought with Motorola, if anybody there had been trained first. You know, we always have to be trained first and qualified. I'm saying, where is the jobs and the contracts? We're already trained. (Applause.)
You know, that's... See, I conform Mr. Crawley said when he said right away we have to go through the DAP program, and then we got to... By the time we finish, they doing something else. Person don't be trained, that's not the job they're hiring for any more. If you want to know how to approach it, call back to the community and ask us. Believe me; we know the answers. We will be able to help you get all of the training and all of the people that are trained that 110 040048, 040145, 040414 - 6/2/04 you need; believe me. We are already trained, and we are available for these jobs. (Applause.)
I don't know who the question was directed to, but I'm'a keep after it, because I'm not going to be beating around the bush. COUNCILMAN DiCICCO: Let me clarify. In addition to the training or having trained people, what I was mostly referring to was the journeymen. We get into apprentice program, and the journeyman is what I should have emphasized. You never get to that which entitles you to get to the job.
But was I clear? COUNCILMAN DiCICCO: I suspect with Motorola that MBEC applied some of their 111 040048, 040145, 040414 - 6/2/04 criteria to that. I'm suspecting that. But I can tell you that probably a lot of electrical work was involved in that. There was no way that contract was going to move forward unless the electrical workers union had its full participation with that, even -- And I'm not an attorney, and I don't know about Constitutional law, obviously. But the way -- The same way that union could go in and stop -- and keep the job from happening because until they reached whatever agreement they need to for their members, those same members should be included in that local that are minorities. And that's not coming -- I mean, constitutionally, unconstitutionally, there are ways in which we can get things done. And especially when we're letting City contracts out. There has -- There should be a way, there must be a way in which we can contractually guarantee certain participation beyond what MBEC. 112 040048, 040145, 040414 - 6/2/04
We agree with you a hundred percent, Councilman. And we're waiting for the Mayor to give back the appropriate response.
That's right. And the union's that stopping us from getting those jobs. COUNCILMAN DiCICCO: Just in closing, on the gentrification issue on the planning, I'd be willing to sit down with you to talk to you about the housing development I did which addressed that very issue, because when I started the project in 1996, many of the people who live there, mostly people of color, were concerned that I was looking to gentrify the neighborhood. And I realized after many heated meetings that they were the descendants of people who lived in other parts of my District which became totally gentrified. And there were promised 30, 40 years ago that they would be included in the plan and they weren't. We devised a plan that allows for folks whose homes we were 113 040048, 040145, 040414 - 6/2/04 condemning as part of the big plan for neighborhood revitalization to still remain in the neighborhood by using some of the relocation dollars as down payments on the homes, and other things. So I'd be more than willing to share that with you and other members of Council --
We look forward to that. COUNCILMAN DiCICCO: -- who have housing developments going on, where you may be faced with that same issue. We don't want to take people away from their community. We want to make it better for them and the future residents. So thank you. And thank you, Mr. Chairman.
The Chair recognizes Councilman Clarke. The Chair recognizes Councilwoman Brown.
Thank you, Mr. Chairman. 114 040048, 040145, 040414 - 6/2/04 Good afternoon now, Mr. Bruce Crawley, and Miss Moore. First let me start out my comments by underscoring the issue raised by Councilwoman Tasco. It was a very disturbing reality that came to our attention during the recent budget hearings, learning and hearing that many providers of color in our -- indigenous providers of color are in some ways systemically being moved out of providing services to people who look like them. And we are doing what we can from where we sit, but we will welcome helping to get this issue on the radar screen, and in a strong way, so that we do not have those same discussions, conversations and Q and A with the budget process next year. So I need to underscore that. And let me commend you for what I agree, too, is a very thoughtful but factual testimony. I'm particularly drawn by a lot of 115 040048, 040145, 040414 - 6/2/04 the stats here, and in particular on you mention where we are, where African Americans are, in terms of ownership. I am instruct struck by the... There's no mention of women of color in business. And when you cite your strategies, I'm curious to know would those same strategies apply to women of color in business? Because that's another layer, another hurdle that women have to go through when we're trying to get the fair and equity, with regards to the playing field.
We don't spend a special focus on women of color in the African American Chamber because we find that African American women get treated like African American men. They get discriminated against because of their race. And when we did the Emerging Contractors Program, some of our best graduates were African American women, ran the best businesses, had the best 116 040048, 040145, 040414 - 6/2/04 construction sites. They can do everything that everybody else can do. And when the government gives you back their data, the Census Bureau data, when they say women, they mean white women. (Applause.)
Black women are included with black people. Asian people are included with -- Asian women are included with Asian people. And Hispanic women are included with Hispanic people. When you see the category women on the government form, they're talking about white women.
That clarity needs to be pointed out. The focus here is City government. Are there any lessens we could learn from what Carl Green is doing over at P.H.A. or when we consider that the School District is getting ready to do this $5 billion capital campaign and build 11 new high schools, and I think five new elementary schools, and given the some might call it 117 040048, 040145, 040414 - 6/2/04 rumors, others would say facts, that the leadership there at the School District went over and above the stipulations when they did this in Chicago, is there an opportunity to sit down with the School District now and hear how they plan to actually meet some of the recommendations in this report?
On the School District we've been meeting with them since Paul Vallas got off the plane. We met him during the first week he was in Philadelphia. We were very familiar with his track record in Chicago. We knew that he did a very similar construction project with the Chicago School District that he is putting in place with Philadelphia. We knew that he floated a bond issue. We knew that he focused on making sure that African American and Hispanic contractors were involved as prime contractors. And this is a different kind of a 118 040048, 040145, 040414 - 6/2/04 thing than even the P.H.A. program. P.H.A. program has not made a great deal of involvement with African Americans as primes. And we want to see more in that regard from the Philadelphia Housing authority. But we know that it has been Paul Vallas's track record and experience to do that. And those businesses grew and prospered, hired people in Chicago, just as the experience was in Atlanta. And now, one of the things that I was discussing with somebody yesterday is that they said that in the City of Atlanta -- This was from a person at one of the largest private sector corporations in Chicago. And he said -- He was surprised to be in Philadelphia -- and he was here yesterday -- because in Chicago there is a simple understanding that percent of all 23 the businesses done in the City will be 24 done with businesses owned by people of 25 color. 119 040048, 040145, 040414 - 6/2/04 And I would think that people in City government in Chicago -- in Philadelphia should converse with the alderman and the Mayor's Office of Chicago to get that information. We certainly are going to be following up, having heard that. But Paul Vallas comes out of that experience and background. And we know he has a good track record. And we've been working with him ever since. And we fully expect that there will be substantial prime and subcontract involvement, not just on the -- on the -- on the -- on the capital development side, but also on the straight procurement side. You know, the procurement side of the School District had been ignored as to minority inclusion since 1988. From 1988 until Paul Vallas got here, there was virtually no minority business inclusion because there had been a lawsuit. And the School District overreacted and decided that it wouldn't do anything. 120 040048, 040145, 040414 - 6/2/04 You know... And when we hear people in this administration being concerned about lawsuits, when African Americans are getting less than one percent of the contracts, it causes us great dismay, you know. If somebody should be suing somebody, it should be black folk, who sit back and watch 42 percent of the population get 98 percent of the contracts. So to say that you're concerned about a lawsuit, when black people get less than one percent of the contracts, is unconscionable. The people in the School District are not operating out of that mode. In fact, they say if we're not getting sued, we're not doing -- we're not trying hard enough. And I think that's closer to the truth than what has been the case in the School District for the past 15 years.
So when you say you're working with them, you're actually working developing strategies that address 121 040048, 040145, 040414 - 6/2/04 the kind of issues we're confronted with with the City.
Reaching out -- We had -- The African American Chamber had, a vendor meeting for the School District, I guess about three, four weeks ago. We had about 150, 200 African American vendors, contractors, engineers, architects, all kinds of designers, a panel of people from the School District. They have a commitment. We're working with them to ensure that they achieve all their goals.
Very well. My final question is: Discuss, if you will, on -- and I quote -- you called us county and region first procurement policy. Is that a first? Is there some precedent? Just background on that and what that means.
We haven't seen anybody actually do that. I mean, I think we're inspired by two things: One, when I was in the hospitality industry, we were 122 040048, 040145, 040414 - 6/2/04 trying to bring more corporate meetings business to the Philadelphia hotels. And what we found out was that some of the large corporations in town had sales meetings, congratulatory meetings for staff for members that did well, all kinds of corporate business meetings. And they held them in hotels. But they held them in hotels in Miami and Phoenix, Arizona, and all kinds of other places. And we said, you don't have to rule that out entirely, but could you bring some of those corporate meetings back to Philadelphia's hotels? And we were surprised to find out how many of them actually did that. And it accrued to the benefit of the local hotel community. All we're saying is that when you talk about procurement, there should not be a situation wherein our government procurement departments and our private sector procurement departments don't first 123 040048, 040145, 040414 - 6/2/04 look at the probability of purchasing those goods and those services within the county of residents first and then in the region, in the four-county region.
And there should be a goal that we establish as to what would be the appropriate level of that kind of procurement. Maybe we find if we're doing 50 percent now, maybe the goal should be 75, 80 percent across the board. Just doing that with 200 largest corporations for Bucks County, Chester, Delaware, Montgomery and Philadelphia County, we would identify hundreds of millions of dollars that are already allocated, already in the budget, that could be brought back from Cleveland and Detroit and Chicago.
A goal would be useful, because currently Council members will ask of City departments how many of the vendors you're dealing with are from Philadelphia.
But setting a goal takes us to the next level of systemically making a change there.
It has to happen, both on the public and the private sector.
I got to make a... Here I come again. I'd like to make a point. When the black mayors were here... And I heard an interview. And I think it was a representative from the Convention Tourism Bureau? She was very proud to say that they were taking the black mayors up to Franklin Mills Mall. 125 040048, 040145, 040414 - 6/2/04 And I'm saying, I think you should have been proud to be able to say that you're taking the black mayors to the black folks' community, to those businesses, since you want to take about procurement, you know? But nobody asked me that part. Okay. Thanks. And another point. I think that we need to understand how important it is to know that when you bring black businesses to the forefront, it shows the pride of this City because it also represents your better schools, better homes, less crime because that's the position that contract and jobs will take. Thank you.
Chair recognizes Councilwoman Tasco for a point of information, then Councilman Clarke.
I just want to say to you that that is one of the issues I have spoken to, the regional... What's Merrill Levitz's group? 126 040048, 040145, 040414 - 6/2/04 UNIDENTIFIED VOICE: Greater Philadelphia --
To enhance the wonderful stores and the communities we have outside of Center City.
When we had the National League of Cities here in 1997, we had mobile tours. And I insisted that they do a mobile tour up to Ogontz Avenue so they can see the Nia Center, they can see what Dwight Evans had done with a blighted community, and took them to the Hard Shell Cafe so that they could eat.
We now have the Ogontz Grille up. There. We're getting ready to have a jazz festival. All that stuff has to be included.
There are African American stores on Broad Street, on Germantown Avenue.
-- and find a way to take them. I love Franklin Mills, but there are also other stores in the community --
-- that could use the dollars that come into this City. And whenever I have guests, I try to tell them how to go. But they need transportation. So, we have to include that.
-- the package 128 040048, 040145, 040414 - 6/2/04 that we do with the conventions when they come to the City, is provide that information, and give them a list of these various places --
And African American Chamber, they run shopping sprees. And they are specifically to target black businesses, but that also help black people know that there are black businesses in their neighborhood. Like Bruce -- Like Mr. Crawley said, they taking bus loads of folks out of the black neighborhood to take them back into the black neighborhood. There's something wrong with that picture. Thank you very much.
Councilman 129 040048, 040145, 040414 - 6/2/04 Clarke. COUNCIMLAN CLARKE: Good afternoon. I want to thank you for your extremely strong testimony. I know personally I agree with everything you folks said with respects to this issue. I just want to clear up a couple of things, and then just want to talk about a couple solutions. Mr. Crawley, just a point of reference to the testimony. On the average salary of black-owned firms, do you have the number for the average salary for white-owned firms, just for a comparison of analysis?