COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT Room 400, City Hall Philadelphia, Pennsylvania Thursday, June 3, 2010 1:10 p.m. PRESENT: COUNCILMAN W. WILSON GOODE, JR., CHAIR COUNCILMAN DARRELL CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN BILL GREEN COUNCILMAN CURTIS JONES, JR. COUNCILMAN JAMES KENNEY COUNCILWOMAN MARIA D. QUINONES-SANCHEZ COUNCILWOMAN BLONDELL REYNOLDS BROWN BILLS 100134, 100135, 100201, 100304, 100341 and 100369 - - - 2
Good afternoon. This hearing is called to order. This is a public hearing of the Commerce and Economic Development Committee on Bill Nos. 100134, 135, 201, 304, 341 and 369. My name is W. Wilson Goode, Jr., Chair of this Committee. I note that a quorum is present. Present is Vice-Chairwoman Blondell Reynolds Brown, also Councilman Curtis Jones, Councilman Frank DiCicco. The title of Bill No. 100304, authorizing the City Representative, on behalf of The City of Philadelphia, to enter into agreements with the Philadelphia Authority for Industrial Development and the Philadelphia Convention and Visitors Bureau, both for purposes of hosting the Army-Navy intercollegiate football game in certain years, under certain terms and conditions. Our first witness is Melanie Johnson, City Representative. Please 3 6/3/10 - COMMERCE - BILL 100134, etc. approach the witness table. And Larry Needle. (Witnesses approached witness table.)
Good afternoon, Ms. Johnson. Please state your name for the record and proceed with your testimony.
Good afternoon, Mr. Chairman. Melanie Johnson, City Representative for the City of Philadelphia. Mr. Chairman and members of the Committee on Commerce and Economic Development, I am here today to testify in support of Bill No. 100304. Also available to answer questions is Larry Needle, Executive Director of the Philadelphia Sports Congress. This bill would authorize the City Representative, on behalf of the City of Philadelphia, to enter into agreements with the Philadelphia Authority for Industrial Development and 4 6/3/10 - COMMERCE - BILL 100134, etc. the Philadelphia Convention and Visitors Bureau, both for purposes of hosting the Army-Navy intercollegiate football game in certain years, under certain terms and conditions. The Army-Navy game has been a storied Philadelphia tradition since 1899, with the City playing host to 82 of the 110 games played in this rivalry. The game represents a wonderful tradition of pageantry and recognition for the men and women of our armed forces. Recently, after a very competitive RFP process, the City of Philadelphia was honored to be selected by the Army and Navy academies as the chosen site for five of the next eight Army-Navy games. Beyond the long history that the game and Philadelphia have shared, the event represents a major economic development priority of the Administration. The game attracts approximately 500,000 visitors each year, creating one of the biggest annual 5 6/3/10 - COMMERCE - BILL 100134, etc. weekends for the City's hospitality industry and 17,000 hotel room nights annually. In 2006, the Army-Navy game generated an estimated $35 million for the City of Philadelphia. Specifically, that figure includes 19.2 million in direct expenditures and 15.8 million in indirect and induced expenditures. The total impact statewide is calculated as a $50.8 million economic impact, including an estimated 2.44 million in tax revenues. Moreover, the event represents a tremendous opportunity to market Philadelphia on a national stage. In 2009, the game was broadcasted by CBS in 4.2 million households across the United States. The bill presented before you today will enable the City of Philadelphia to continue one of its most venerable traditions in honor of the men and women who serve our nation's armed forces, while at the same time supplying 6 6/3/10 - COMMERCE - BILL 100134, etc. the City with a much-needed economic boost. We thank you for your consideration of this very important bill. We are available to answer any questions you may have.
Thank you for your testimony. Are there any questions for this panel? (No response.)
Seeing none, thank you very much. Let me note for the record that Councilman Clarke is also here. Thank you.
Is there anyone else to testify on this bill? (No response.)
The title of Bill No. 100369, amending Chapter 20-1700 7 6/3/10 - COMMERCE - BILL 100134, etc. of The Philadelphia Code, entitled Philadelphia "Re-Entry Employment Program ("PREP") for Ex-Offenders," and amending Chapter 19-2600 of The Philadelphia Code, entitled "Business Privilege Taxes," by modifying the duties of certain City officials with respect to the PREP program; by expanding eligibility for the PREP tax credit and modifying the terms of the PREP tax credit; and by providing for the participation of certain tax-exempt organizations in the PREP program, all under certain terms and conditions. Our panel is Deputy Mayor Everett Gillison and Turk Thacher from Baker Industries. They both can approach the witness table. (Witnesses approached witness table.)
Good afternoon, Mr. Gillison. Please state your name for the record. DEPUTY
Good 8 6/3/10 - COMMERCE - BILL 100134, etc. afternoon, Councilman Goode, members of the Commerce and Economic Development Committee. My name is Everett Gillison and I am Deputy Mayor for Public Safety. Thank you for the opportunity to appear before you today on behalf of the Nutter Administration to testify on Bill No. 9 100369. This bill provides changes to the Philadelphia Re-Entry Employment Program, which is also known as PREP. When Mayor Nutter first took office, he made good on his campaign promise to work on crime from two perspectives. The first was to ensure the public safety through smart and preventive policing. The second was to place an emphasis on prisoner re-entry in Philadelphia. I am here today to discuss the latter, particularly this revised version of the Philadelphia Re-Entry Employment Program (PREP), a tax credit incentive to employers who hire and retain ex-offenders. Specifically, we are 9 6/3/10 - COMMERCE - BILL 100134, etc. discussing those ex-offenders who are trying to do the right things for themselves, their families, their neighborhood and our city so they are able to successfully transition and live up to their social contract. First off, I want to put PREP in the context of prisoner re-entry. Prisoner re-entry in Philadelphia is about helping those people coming home from jail or prison to stay out, by helping them enter and stay in the labor market. The most critical aspect to success is a job. Getting and keeping a job are paramount, as is connecting to supports that may be necessary to stay employed, whether they are substance abuse counseling, healthcare, housing, family reunification or mental health services. This was our theory of change when we started, that work was the most important part of prisoner re-entry, and if we helped people transition in a uniform way back home and emphasized 10 6/3/10 - COMMERCE - BILL 100134, etc. work, that we would begin to see crime and recidivism go down. By now we are all becoming too familiar with the grave statistics we face with prisoner re-entry in Philadelphia and nationally. 2 million people incarcerated in the United States. Seven hundred thousand will be released from prison this year across the United States and millions more from jails. Another way to look at it, 97 percent of the people who do end up in prison get out. Of those that return, 65 percent will end up being rearrested or reconvicted. What a waste of lives and resources. 84 billion on corrections each year. We know that it is important to meet people with services as soon as possible to their release dates. Our local Philadelphia Public/Private Ventures operated Ready4Work, which was a 11 6/3/10 - COMMERCE - BILL 100134, etc. national prisoner re-entry initiative demonstration in 2005. Ready4Work emphasized work mentoring and support, and its outcomes lowered recidivism rates by 34 to 50 percent below national averages. Similarly, in Indiana, research showed that those that earned at least $5,000 in the first six months after release had significantly lower recidivism rates, 35 to 52 percent was the number, than those who did not become employed. In New York City, the organization Center for Employment Opportunities used the transitional jobs model to employ people upon return from Riker's Island and it too decreased felony convictions and incarceration for new crimes. So this is why Mayor Nutter is focusing on work as the central piece of his prisoner re-entry plan. The PREP tax credit and the enhancements we are making to RISE are dramatic signals to employers and people returning from prison to 12 6/3/10 - COMMERCE - BILL 100134, etc. Philadelphia that we are serious about ratcheting up success for this population. Prisoner re-entry is a difficult challenge for all those involved, including ex-offenders, the employers, the families and the victims.
Even though these are difficult fiscal times, it is important for us not to be lackadaisical when it comes to prisoner re-entry and shy away from big tasks. When we came to office, we worked closely with our colleagues in City Council to rapidly initiate PREP, and while I am glad we followed through on this campaign commitment, we have learned much from our stakeholders, employers, vendors, ex-offenders and advocates about how we can make this program more successful. The amendments offered to PREP in Bill 100369 address many of the problems that made the existing legislation unworkable. The changes offered in this bill include allowing for 13 6/3/10 - COMMERCE - BILL 100134, etc. more flexibility about what counts as work. This includes allowing part-time work and work that is in line with what other co-workers are earning for a similar job; The opportunity of non-profits to work with for-profits by selling part of the credit. This will allow non-profits who serve ex-offenders a chance to get more investment from the private sector into what they do; And eliminating the mandate for the ex-offender to pay back the credit. The main purpose of the credit was to help ex-offenders get a fair chance to compete for jobs. Asking them to pay back the credit was well intentioned, but ultimately it discouraged people from participating in the program; And the fourth is changing the name of the Mayor's Office or the Re-Entry of Ex-Offenders to RISE, and giving RISE the lead role in administering this credit, ensuring the 14 6/3/10 - COMMERCE - BILL 100134, etc. eligibility, marketing to employers and verifying results. We in the Mayor's Office have to redouble our efforts to market and execute this credit if it's going to be a way to be used by employers and easy execution for our Department of Revenue. Again, we spend a great deal of effort taking measure of PREP, its limitations and its potential by drawing on the suggestions and recommendations from local employers, advocates, service providers and even our own City agencies. I am grateful for their time and energy sharing with us their experience with this tax credit. As such, this revised legislation will make it easier for employers to use the credit and make it less burdensome on ex-offenders. Concurrent with making these recommendations, my office is also revamping how the credit is being marketed and executed. We are redoubling our efforts to engage as many 15 6/3/10 - COMMERCE - BILL 100134, etc. organizations as possible that work and employ ex-offenders, including those funded through the Workforce and TANF systems, to understand the credit and use it as a tool to place people in jobs. Also, we are revamping RISE, which will include providing the RISE team with more support, as well as insisting on accountability to determine the eligibility of employers and ex-offenders for the credit, marketing the credit and tracking its success. We have done a lot around prisoner re-entry during the last three years. We have lowered prison rates, we have worked on diversion efforts, and our RISE center is working with an inventory of local program providers, among other achievements. The amendments offered today in Bill 100369 to PREP will continue to refine these efforts in general and to create a more comprehensive and comprehensible system to those who use it in Philadelphia. 16 6/3/10 - COMMERCE - BILL 100134, etc. Now, there are still challenges that we face, including tens of thousands of ex-offenders in our community who are not getting fair access to compete for jobs, but we are moving forward in dealing with these issues, and the changes offered today to the PREP legislation helps ensure that employers will look favorably on ex-offenders as prospective employees. I'll be glad to answer any questions the Committee or the Chair may have.
Thank you for your testimony. Mr. Thacher, we'll take your testimony as well. Please state your name for the record and proceed with your testimony.
Thank you, Councilman Goode. My name is Turk Thacher. I'm President of Baker Industries, a non-profit workforce development program with a facility at 17 6/3/10 - COMMERCE - BILL 100134, etc. 3506 F Street, Philadelphia, Pennsylvania 19134, and we are very much in favor of Bill No. 100369. Baker Industries saves lives. The purpose of our 30-year-old workforce development program is to instill a strong work ethic in our population of low income, vulnerable adults, which in our Philadelphia operation includes ex-offenders, former substance abusers and homeless people. In doing so, we try to build their self-esteem and work skills to the point where those who are ready are able to move into the real workforce. Through such vehicles as our temporary employment program, we have been able to help an average of 67 individuals each year to do just that, 67 individuals who become one step closer to becoming independent and productive members of their communities. For those who are unable to be mainstreamed, we provide long-term employment at our work sites. Each year, 18 6/3/10 - COMMERCE - BILL 100134, etc. depending on the level of work that is outsourced to us, we touch between 100 and 200 individuals in Philadelphia. Approximately 60 to 70 percent of our revenue comes from the work that we do for our customers. The rest we raise privately. We do not believe there is another organization in this country that does what we do, blending these vulnerable adults in a work rehabilitation program and doing it without any government support. In a typical year, it costs us approximately $2,500 to support the employment of a single ex-offender. As a non-profit, we do not benefit from any tax credits. The proposed legislation gives us the opportunity to further serve this underserved segment of our vulnerable adult population through the proposed sponsorship of ex-offender employment. Thank you very much for this opportunity to express our view of Bill 19 6/3/10 - COMMERCE - BILL 100134, etc. 100369. We sincerely hope you give it favorable consideration.
Thank you, Mr. Chairman, and thank you for putting forth this effort as the Chair of the Economic Development. The one thing that I can say during my membership here is that there has been an equal balance of different types of opportunity, whether it's entrepreneur, whether it's work training, and I think that needs to be said on the record. Thank you for that. I want to also acknowledge you and your commitment in the private sector to help us in that endeavor and say to you thank you publicly for taking a risk on -- or an investment in a vulnerable population. Also, I've always respected you as an individual and a human being, but have learned over the last three years to 20 6/3/10 - COMMERCE - BILL 100134, etc. respect your intelligence and integrity as a professional. So I say all of that in context so that you understand the spirit of my comment. And I reflect on what a young man who was in his third year at Del State said to me. We're right at the crash of the financial markets and they withdrew credit for his student loan. And we were talking, and I was talking with a bunch of mixed group of individuals, some of them ex-offenders, some of them college kids, because they tend to blend in the same group sometimes. They don't put on their resume, I'm an ex-offender or I'm a college student. It just happens like that. But the young man pulled me aside and we were talking about ex-offender opportunities and things like that, and he says, You know, I went to school every day in high school when other guys were cutting class and stealing cars and doing some other 21 6/3/10 - COMMERCE - BILL 100134, etc. things. He said, I went and applied for college and made my mother sign over a parent plus loan, and she's in debt for me, and when the market collapsed, I wound up not being able to pay my tuition, not being able to go back and finish my senior year. And when you start talking about employment opportunities for ex-offenders, what do I have to do to get a job? Be an ex-offender? And when he said it, it was like he hit a mule in the head with a two-by-four, because what I think I said in my beginning comment about this committee is balance. So I say that when we start talking about income tax credits for interns that are in a different path, that we be able to answer that young man that there's a pathway for you too. Some of my best friends are ex-offenders, and I hang in the same crowds with them or grad students, and I judge people on the individual person, 22 6/3/10 - COMMERCE - BILL 100134, etc. not their resume. But we have to be able to answer that question with a balance to be able to say that, no, you don't have to get on the wrong track to get on the right track with a job. And I say that and I thank you again, Mr. Chairman, for all the ways putting different venues to success and different highways to success for our most vulnerable and our most accomplished, and that's my only comment for the day. DEPUTY
Thank you, Councilman. Mr. Gillison, while the tax credit over the years has not been as successful as you would have like it to have been, could you please elaborate for the record some of the other employment opportunities actually created by RISE and this Administration. 23 6/3/10 - COMMERCE - BILL 100134, etc. DEPUTY
Yes. Obviously over the last -- especially the last months, we've been able to, as a 5 way of reemphasizing work, about 1,000 6 people have come through the doors, 7 1,000, 1,200 have come through the doors. 8 We have been able to place them on the 9 case management level and have provided 10 services to them directly for about up to 11 about 700, and of that 700, we've 12 actually provided job opportunities for 13 just over 375 to 400 individuals. 14 They are working today, and 15 their recidivism rate, which is the one 16 that I'm always looking at, is less than 17 four percent. And I will even go further 18 to say that I drill down. The recidivism for what they were -- what they actually dealt with is usually drug related and it's usually marijuana related. So we've had one or two felony issues that I've had to deal with, and, quite frankly, it was a disappointment to see someone go through and still make the wrong choice 24 6/3/10 - COMMERCE - BILL 100134, etc. at the end, but as I went to and as I said to the individual personally, I'm still not giving up on you. You might have given up on yourself, but you need to be a testament to everybody else that's in this jail that even if you went the wrong way and you're going to pay for that, whatever happens is going to happen, but as a society, I still don't want to say that we give up on you. And so I think that we've had a very good track record. We currently, having moved the location from 54th and Woodland, now the RISE program is located at 11th and Market Streets, we are centrally located. We are getting somewhere on the order of to 30 19 drop-ins a day. We have co-located in 20 the RISE center as a one-stop center a mentoring program with five churches that are now providing mentors. We have the America Works program, which is a rapid attachment to work, jobs training program working with us. And in addition to the 25 6/3/10 - COMMERCE - BILL 100134, etc. RISE staff; that is, while we're going to get out of direct services, we're still providing it until we can get additional money so we can bring more people on that can help us do the job. In addition, we have now gone -- and we start behind the walls. Obviously public safety is my part of the portfolio. The prisons come under my, basically, supervision, and as a result, we start the RISE program behind the walls, getting people ready three to six months outside and getting them prepared by doing both internal job training as well as kind of like what I call the attitude training to get them ready to get back out. So I think that with more time and with more partners, we should be able to even do a better job of getting things going. I'm also -- I can tell you that we have made a change in bringing on Kerry Solano. She has now joined the RISE staff and really my staff in the 6/3/10 - COMMERCE - BILL 100134, etc. Office of Public Safety, and her job literally is going to be my commitment, a stated commitment, to getting people in the private sector to begin making a commitment to hire ex-offenders. That's what she's going to do 24/7. Much as I try to bring this attention to this population, we're now having Kerry work out initially and have championed CEOs join a board to help us bridge the gap. So we've done quite a number of different things in the last months. 14 I wish we would have had more success in 15 getting more employers to join up. We've 16 had six go through the process. None 17 have actually take advantage of it for 18 reasons that the changes here pretty much go forward, but I am heartened by the fact that each of them have said that with these changes going in, that they feel that they would be in a better position to take advantage of the credit and, therefore, employ more ex-offenders, which is what it's all about. 27 6/3/10 - COMMERCE - BILL 100134, etc.
Thank you. Let me note for the record we've been joined by Councilwoman Sanchez and Councilman Green. Councilman Clarke.
Mr. Gillison, one quick question, and I, like Councilman Jones, would like to commend you on your great work, having had the occasion more recently to work with you on a number of matters. You're truly an asset to the Administration. The City of Philadelphia put in an application for stimulus dollars for short-term job opportunities, and I believe we're having a hearing on the transfer ordinance next week to put in place the mechanisms to draw that money down. And I know during the course of 28 6/3/10 - COMMERCE - BILL 100134, etc. the conversations with Jennie and Lance and the folks who are working on that, the question was will ex-offenders have an opportunity for those job opportunities, all be them temporary, but the fact of the matter is, they're jobs and it's a good way to develop a work ethic and some track record as it relates to resume building. Are you involved in that or is RISE -- DEPUTY
Oh, yes. I'm involved in making sure that, as I said -- and I get rather personal with it. I said, You're not going to be able to do this unless you open it up to my guys. Jennie Sparandara has come. I meet with her about this. I said, There's got to be a way for us to provide job opportunity and work for the people that I basically represent. And I understand and -- I understand Councilman Jones' point. Literally people should not have to be categorized ex-offenders 29 6/3/10 - COMMERCE - BILL 100134, etc. and non-ex-offenders and then only certain people get jobs as opposed to I'm going to look at the individual. It's a holistic view of how the individual needs to be maintained. So, yes, I've been -- I haven't been part of the direct negotiations of how this is going to work, but I have been insistent that ex-offenders be given an opportunity to compete for jobs and not be thrown out, just dismissed and say that they can't even be put forward. So, yes, I'm a part of that.
Well, have you gotten a response? Because to date, given our involvement in the process, I know Councilman Jones and myself and our staff members have been working prior to the application process, and we didn't get a real definitive sense of who and how people will be eligible. And I guess I want to talk more particularly about the jobs that possibly the City's departments will take advantage of, those 30 6/3/10 - COMMERCE - BILL 100134, etc. working for Tommy Conway and the Mural Arts Program. Have you gotten a sense of what -- DEPUTY
Those are the areas that I kind of made sure that they're using, because currently I use those areas with my ex-offenders that are in prison currently. It is not well known, but I think that it should be, that about a year ago I approached the CLIP program with Commissioner Giorla and I said that I am not a fan of people who have both talent and opportunity and will who want to work, to begin the process of learning how to use their skills, and I knew CLIP needed additional persons. I said, I've got a whole prison full of people that are sitting here. They're willing to work. All they need is somebody to end up giving them some training and giving them an opportunity. And I know that Commissioner Giorla sends out on a weekly basis anywhere between five and ten work crews, and they clean 31 6/3/10 - COMMERCE - BILL 100134, etc. up wherever we basically and Tommy needs assistance. They clean up all over the City. We're trying to expand it. I'm hoping to use those dollars to get that program expanded, and I want my guys to be able to use that, even if they're outside, not just be on the inside, but the outsiders to be able to be using some of that money as well and get those opportunities. That's where I've been focusing my efforts. I have not -- I had my last talk with Jennie, I think it was, two weeks ago. I've been busy on a couple of other things that I'm sure you're aware of, so I'll get my staff to get a direct answer to where we stand. I do know that I have a briefing coming up on Tuesday on the transfer ordinance and I hope to have my answers before then.
Okay. Because I know that's an opportunity, one that we, frankly speaking, have some level of control over and I think that we 32 6/3/10 - COMMERCE - BILL 100134, etc. need to maximize that opportunity. DEPUTY
Although we didn't get as many jobs as I would have liked, but whatever we have, I think it should be shared in a meaningful way. DEPUTY
Thank you, Councilman. Are there other questions, comments from the Committee? Councilwoman Brown.
Thank you. Good afternoon, gentlemen. Mr. Thacher, tell us briefly what your company does, services provided, et cetera.
We are strictly a workforce development program. In Philadelphia, we hire primarily 33 6/3/10 - COMMERCE - BILL 100134, etc. ex-offenders and we get work from approximately 100 different customers, work that's outsourced to us, and our focus is on teaching basic work skills, work ethic. We don't focus on job skills, with one exception, and you have that right before you. That's one of our really exciting new projects. We're working with the Center City District in Philadelphia. Every time there's an event in the City, you see their banners hanging from the streetlights, and they have some 40,000 banners, and we have begun to convert them to tote bags. Wonderful, colorful, exciting banner bags, as we call them.
Sustainable. The banners are first laundered at Philacor, which is Philadelphia Department of Corrections, wonderful training program run by Howard Doherty, does a great job, and then they come to us, where our 34 6/3/10 - COMMERCE - BILL 100134, etc. ex-offenders are being taught how to cut and sew. We're very excited about that and hope that perhaps it's an opportunity to bring a little of the needle trade back to Philadelphia, which used to be a wonderful hub in the garment industry. But our focus normally is just on work skills, and we have a wonderful woman who works with all our folks and tries to help them to find jobs, to work with them to get e-mail addresses and voicemail, and then mentors them as the ones that leave our program successfully for jobs. And just as Deputy Mayor Gillison, our program indicates that those folks that leave our program successfully with employment have a recidivism rate of exactly four percent.
So does the linkage happen prior to their release from a correctional facility?
No. We get our 35 6/3/10 - COMMERCE - BILL 100134, etc. people primarily from halfway houses. There are probably halfway houses 4 within a five-mile radius of our facility 5 in West Kensington. We're on the Mayor's 6 Second Chance list. We've hired 7 individuals from RISE in the past. Right 8 now our big focus is the Way to Work 9 program, which is also a subsidized wage 10 program. 11
So for 12 ex-offenders that contact our office and 13 are looking to get back on track, to 14 quote Councilman Jones, can that be a 15 direct referral from our office to 16 your -- 17
Absolutely. 18 Absolutely. Work is the engine that 19 drives our program. As long as we have 20 work, we're hiring. And when our work 21 drops off, we try to spread the pain and 22 bring people in alternately so that we 23 don't kill them all. 24
How long 25 have you been in this business? 36 6/3/10 - COMMERCE - BILL 100134, etc.
I've been doing it for eight years. The business was established in 1980 by two wonderful people, Charlie and Weezie Baker.
Thank you, Councilwoman. Any other questions? Councilwoman Sanchez.
I have to take this opportunity. Councilman Green and I had an opportunity to visit Baker Industries almost a year ago when we were looking at ways in which the City could take advantage of what has been a great program in West Kensington -- and 37 6/3/10 - COMMERCE - BILL 100134, etc. that's why I brought the bag down, because I wanted you to know that I still use it -- and just show the opportunities and the creativity if we allow to take a product, recycle it, create a job opportunity. But really what Mr. Baker and what they do is provide hope for the folks who come in and an opportunity to really turn their lives around. So I want to thank you, on behalf of my constituents, the many that you serve. Thank you.
Thank you, Councilwoman. Any other questions or comments? (No response.)
Is there anyone else to testify on this particular bill? (No response.)
Seeing none, 38 6/3/10 - COMMERCE - BILL 100134, etc. thank you. DEPUTY
The title of Bill No. 100134, amending Chapter 17-1600 of The Philadelphia Code, entitled "Economic Opportunity Plans," by modifying the monetary threshold triggering the requirement of an economic opportunity plan on City funded projects or contracts. The title of Bill No. 100135, amending Chapter 17-1600 of The Philadelphia Code, entitled "Economic Opportunity Plans," by establishing minimum standards of "best and good faith efforts" to be employed in the development and implementation of Economic Opportunity Plans. The title of Bill No. 100201, amending Chapter 17-1600 of The Philadelphia Code, entitled "Economic 39 6/3/10 - COMMERCE - BILL 100134, etc. Opportunity Plans," by establishing standards for approvals of certain transactions involving the Philadelphia Authority for Industrial Development, including commitments to Economic Opportunity Plans. The title of Bill No. 100341, amending Title of The Philadelphia 10 Code, entitled "Contracts and 11 Procurement," by amending Chapter 12 17-1600, entitled "Economic Opportunity 13 Plans," by expanding the definition of 14 "Covered Project or Contract," to include 15 certain projects and contracts that 16 require resolutions of Council to 17 proceed. Our next panel is Angela Dowd-Burton, Kevin Dow and Terry Gillen. If you all could approach the witness table. (Witnesses approached witness table.)
Ms. Dowd-Burton, please state your name 40 6/3/10 - COMMERCE - BILL 100134, etc. for the record and proceed with your testimony.
Good afternoon, Chairman Goode and members of the Committee on Commerce and Economic Development. My name is Angela Dowd-Burton. I am Executive Director of the Office of Economic Opportunity. I am here today to provide testimony on Bill 11 No. 100134. This bill amends Chapter 12 17-1600 of The Philadelphia Code by modifying the monetary threshold triggering the requirement of an economic opportunity plan on City funded projects and contracts. The Administration is dedicated to maximizing the opportunity for minority, women and disabled-owned businesses to contract with the City of Philadelphia. The Economic Opportunity Plan is an effective tool for leveraging the portfolio of OEO-registered companies and those certified by PA-UCP and other certifying agencies. We recognize that 41 6/3/10 - COMMERCE - BILL 100134, etc. in order to turn this economy around, we must facilitate the growth of businesses designed to put people to work. As introduced, Bill No. 100134 would lower the threshold of projects and contracts requiring EOPs from $1 million to $100,000. We support the opportunity to expand the role that EOPs play in helping to achieve our Inclusion Works Strategic Plan. The Administration believes, however, that lowering the threshold to $100,000 would not be productive. Strategically, the greatest application of the Economic Opportunity Plan is on the largest contracts and projects. These transactions tend to have components that can easily be assigned or subcontracted out to minority, women and disabled businesses. There are more opportunities to bring on employees for various operations and functions on a big contract. The focus of OEO is to develop 42 6/3/10 - COMMERCE - BILL 100134, etc. and grow the capacity of businesses. There are fewer options for designing a business relationship around a shrinking pie. We would prefer to concentrate our efforts and our limited resources where we can have the greatest impact. Based on contracting figures from 2007 through 2010, reducing the threshold from $1 million to $100,000 would almost triple the number of contracts covered. We would prefer a less significant reduction in the threshold. We have discussed a reduction in the threshold to $250,000 with the bill's sponsors and are prepared to work with that requirement. I would like to offer the Committee an amendment to the bill that would make that change. And I do have a copy here, if you would like it. Please note that whatever level the EOP threshold is set, the Administration will continue to develop and consider subcontracting inclusion 43 6/3/10 - COMMERCE - BILL 100134, etc. goals for all contracts. We believe that Bill 100134, with this proposed amendment, will certainly challenge our current operations, but the Administration also believes it will give us an opportunity to aggressively pursue our mission to foster the growth and sustainability of minority, women and disabled businesses, as well as facilitate diversity within the local workforce. I thank you for this opportunity to testify and propose amendments to Bill 100134. I will be happy to address any questions you have at this time.
This bill 22 amends -- Bill 100135 amends Chapter 23 17-1600 of The Philadelphia Code, entitled "Economic Opportunity Plans," by establishing minimum standards of "best 44 6/3/10 - COMMERCE - BILL 100134, etc. and good faith efforts" City contractors and developers must agree to utilize in economic opportunity plans submitted to the City in order to demonstrate their attempts to reach inclusion goals established by the City in connection with City contracts and development projects. Bill 100135 seeks to strengthen the best and good faith efforts requirements as defined in Section 13 17-1603. The Administration supports and applauds the objective of ensuring that contractors and developers of City-owned property make real and substantial efforts to increase the participation of minority, women and disabled-owned businesses in the economic growth and vitality of this city. It also enthusiastically supports efforts to ensure that our contractors and recipients of property share our commitment to ensuring actions that provide real opportunities to add 45 6/3/10 - COMMERCE - BILL 100134, etc. minorities and women to the workforce. This legislation should drive the development of more productive business relationships for those seeking to do business with the City and result in the success of the OEO Inclusion Works Strategic Plan. We offer several amendments to strengthen this bill and assist you in achieving these objectives. The Administration first seeks to exempt from the requirements of demonstrating best and good faith efforts a contractor or a recipient of property who commits in their economic opportunity plan to meet the City's established participation ranges. These participants would not be required to complete a Best and Good Faith Efforts form on the contract or project. Participants who have demonstrated their ability to secure participation are presumed to have made their best and good faith efforts. Secondly, the list of actions 46 6/3/10 - COMMERCE - BILL 100134, etc. geared to secure participation includes some that are more effective at building business relationships and participation than others. The Administration would suggest the list of best and good faith actions included in Bill 100135 be divided into two categories. One category would be mandatory requirements to show best and good faith efforts and include a high impact list of actions expected to generate substantial participation. A second category would include steps that provide opportunities for the contractors to explore more creative participation strategies, which would be expected to be pursued by the contractors if the high impact list does not yield sufficient results. Contractors not achieving participation ranges would be required to explain why any efforts to generate participation described in this second category were not taken. Finally, we recommend some 47 6/3/10 - COMMERCE - BILL 100134, etc. technical amendments to provide consistency throughout Chapter 17-1600. The amendments have been provided to the Committee, but I also have a copy of those if you would like to have a copy at this time. The Administration appreciates Council's efforts to help us build an infrastructure that promotes the OEO Inclusion Works Strategic Plan as a cornerstone for building minority, women and disabled-owned businesses, as well as putting minorities and women to work. Thank you for considering my testimony and these proposed amendments to Bill 100135. I'm happy to answer any questions you may have at this time.
Good morning, Chairman Goode and the members of the Committee on Commerce and Economic Development. My name is Kevin Dow and I am the Chief Operating Officer of the 48 6/3/10 - COMMERCE - BILL 100134, etc. Department of Commerce and am appearing here today to testify on Bill No. 100201. This bill sets forth a requirement that Council will not approve real estate transactions involving the Philadelphia Authority of Industrial Development unless the transaction contains a commitment from PAID that it will require any recipient of property to adopt an Economic Opportunity Plan compliant with Section 17-1603 of The Philadelphia Code. This bill also requires subsequent developers of the property to make comparable commitments. We support the bill's spirit of improving minority and disadvantaged business participation rates in construction work and the workforce associated with businesses that will operate in property formerly controlled by the City. We recommend several amendments to strengthen the bill, which have been provided to -- which I can provide to the Committee at this time if 49 6/3/10 - COMMERCE - BILL 100134, etc. you'd like to have copies. With these proposed amendments, Philadelphia will remain true to the critical objective of promoting a diverse workforce in our construction and building industries, while also continuing to promote economic development and the redevelopment of the large pool of property currently in the City's hands. First, the bill, as drafted, would apply to all real estate transactions in which PAID is involved. PAID is sometimes used as a conduit for real estate transactions that have a relatively small value and will not result in large development projects. In our view, there is a diminishing return to requiring EOPs in projects that may have very small contracting or workforce opportunities. For this reason, the Administration recommends the bill's scope be narrowed to transactions involving a property or properties valued in excess of $250,000 or for projects 50 6/3/10 - COMMERCE - BILL 100134, etc. anticipated to exceed $250,000 in value. By establishing a minimum project size to which the EOP requirement is attached, the bill's language will also be more consistent with existing legislation governing the contracts and projects in connection with which the City's EOP requirements apply. Secondly, as the legislation currently reads, the EOP requirement will be built into land transactions at fair market value. As you know, the City has a very large inventory of unused properties and we are working very hard to get those properties into private hands so that they can be put to use and, more importantly, put on our tax rolls. We are concerned that imposing the full EOP requirements on sales for fair market value will lower the attractiveness of the City's real estate stock and make City sales anti-competitive in relation to private sales in the City or sales of properties in the surrounding counties. 51 6/3/10 - COMMERCE - BILL 100134, etc. Finally, the component of the bill requiring subsequent developers of property, after the initial purchaser, to make comparable commitments compliant with EOP guidelines should be modified from its current open-ended term. It is our concern that imposition of the requirement for an indefinite period of time represents a deed restriction, which, in turn, will adversely impact the attractiveness of those sites subject to the legislation and potentially the developer's ability to secure private financing. To mitigate this concern, the Administration proposes amending the bill 17 so as to bind subsequent developers to the EOP requirement for a period of five years from the date of conveyance by PAID. Thank you very much for taking my testimony and your consideration of the Administration's proposed amendments to Bill No. 100201, and I am happy to answer any questions you may have. 52 6/3/10 - COMMERCE - BILL 100134, etc.
Good afternoon, Councilman Goode and members of the Commerce and Economic Development Committee. I am Terry Gillen, the Executive Director of the Redevelopment Authority, and with me is Deborah McColloch, the Director of the Office of Housing and Community Development. We are here on behalf of the Nutter Administration to testify on Bill No. 15 100341. This bill would expand the requirement that Equal Opportunity Plans be prepared from activities requiring a City Council ordinance to ones for which Council approval by resolution is required. From a practical point of view, the change will apply to two kinds of transactions handled by the Redevelopment Authority. The first kind of transaction is the disposition of City-owned 53 6/3/10 - COMMERCE - BILL 100134, etc. properties pursuant to recommendations to the VPRC, the Vacant Property Review Committee. Under the Home Rule Charter, disposition of City-owned properties, absent an auction, may be made through either the Redevelopment Authority or through PAID. The RDA acts on behalf of the City for VPRC properties conveying at fair market value or for nominal consideration. City Council approves VPRC transactions by resolution. VPRC properties are typically single vacant lots or vacant residential properties in poor condition. Occasionally larger properties of some value are also conveyed through the VPRC process. The takers of VPRC properties include neighbors wishing vacant lots as side yards, community development corporations developing affordable housing, and private parties, including businesses and for-profit developers. Depending on the monetary threshold -- and I understand that Bill No. 100134 also under 54 6/3/10 - COMMERCE - BILL 100134, etc. consideration today may reduce that threshold to as little as 100,000, although I understand we're also talking about maybe 250,000 -- some VPRC transactions may trigger EOPs under Bill 7 100131. For example, a CDC assembling a site for an affordable housing development would probably exceed the monetary threshold and would be required to submit an EOP, depending on what the threshold is. In this case, the developer would almost certainly be receiving City subsidy for the development and the development would be underwritten by RDA staff and ultimately approved by the RDA Board. RDA Board actions for affordable housing development already require the preparation of EOPs. If this bill were adopted, the timing of the EOP would be significantly earlier, however, at the site assembly stage, a point at which CDCs are usually seeking funding and have 55 6/3/10 - COMMERCE - BILL 100134, etc. not finalized plans or financing. We believe that requiring EOPs at this early stage for these projects could be burdensome, particularly since EOPs will be required before the project comes to fruition. Another kind of VPRC transaction that might also trigger EOPs would be developments in which a private developer is paying fair market value for a property. In the case of fair market transactions, the City and the RDA do not impose other requirements on purchasers. For example, if a developer purchases a vacant lot and constructs a single-family residence on it for personal use, rental or resale, that transaction is not subject to long-term affordability requirements or to prevailing wage requirements. The developer takes on the risk of development and reap whatever rewards he or she can. A development venture like this could easily exceed the monetary threshold, depending on what 56 6/3/10 - COMMERCE - BILL 100134, etc. threshold is established. So the Administration believes it would be inconsistent with a fair market value transaction to impose EOPs on transactions like these, especially for smaller transactions. Also, a purchaser could argue that requiring EOPs might reduce the value of the property and the City could receive less income from fair market value sales.
A second kind of Redevelopment Authority transaction would be -- that would be affected by Bill 100341 is the disposition of real estate that was acquired through eminent domain. The condemnation process requires approval by City Council through resolution rather than by ordinance. So these transactions would be covered if Bill 100341 is adopted. The same concerns outlined for VPRC properties would also apply to properties acquired by condemnation. Projects which are receiving City support through the RDA require EOPs in any 57 6/3/10 - COMMERCE - BILL 100134, etc. event. We believe that requiring EOPs before a project is fully defined or has received all funding awards; for instance, Low Income Housing Tax Credits, is burdensome to the developer and serves no purpose. Fair market value transactions should remain unencumbered by additional requirements such as the preparation of EOPs. If the RDA is selling property acquired through condemnation at fair market value, it is inconsistent to put requirements on these transactions as well. So for these reasons, the Administration does not support Bill No. 17 100341 and asks that it be held in Committee today so that we can work with City Council to address these concerns. We are happy to answer any questions that you have, and thank you for the opportunity to testify today.
Thank you for your testimony, Ms. Gillen. Several members of the 58 6/3/10 - COMMERCE - BILL 100134, etc. Administration met with the primary sponsors of the bill and staff yesterday. Were you invited to that meeting?
I was told about it, but was -- we made a joint decision that Deb would go for all of us.
Okay. Ms. McColloch, what do you think was decided at that meeting with regard to this bill? MS. McCOLLOCH: My name is Deborah McColloch. I'm the Director of Housing. I don't think there was any decision made about this bill at that meeting. There was some discussion, and we were going to continue to discuss the bill.
And so the idea was that negotiations would continue; is that correct? MS. McCOLLOCH: That is my understanding.
And it was 59 6/3/10 - COMMERCE - BILL 100134, etc. understood that if we did not reach some compromise, that we were going to move forward. Was that understood? MS. McCOLLOCH: That the bill 6 would be presented today, yes, and we would present testimony on the bill.
No; that we were going to move forward on the bill if there was not a compromise that could be reached. MS. McCOLLOCH: That was not my understanding that it was going to be --
We reached a compromise on every other bill. MS. McCOLLOCH: Yes.
We did not -- MS. McCOLLOCH: And we did not reach -- I'm sorry. I didn't mean to interrupt you.
No. Go ahead. MS. McCOLLOCH: We did reach a compromise on the other bills, and we had 60 6/3/10 - COMMERCE - BILL 100134, etc. not had the opportunity to submit proposed amendments back and forth as you had on the other two bills. I wasn't involved in those discussions. I only know what went on yesterday at the meeting, but there had clearly been work before yesterday's meeting on the other two bills. We had not had the opportunity to have that work on this bill.
The other three bills. MS. McCOLLOCH: On the other three bills. I beg your pardon. On the other three bills, and we had not had that opportunity on this bill, and so it was my understanding that we were going to continue to have discussions about this bill.
That was a two-hour negotiating session. MS. McCOLLOCH: That was a two-hour negotiating session on the other three bills, yes. 61 6/3/10 - COMMERCE - BILL 100134, etc.
Was the testimony on this particular bill written before or after that meeting? MS. McCOLLOCH: The testimony was written before that meeting.
I have a problem with that. Even if we had not come to a compromise, there were things that came out of that meeting in the discussion of this bill that should not still be in this testimony. Do you agree with that? MS. McCOLLOCH: The only change that was agreed upon yesterday was the threshold that, as Ms. Gillen said, it was her understanding it in fact was no 18 longer being discussed at $100,000, it was being discussed at $250,000.
Let me jump back to Ms. Gillen for a second before I get back to the line of questioning. Ms. Gillen, what should the threshold be? If you have a number, fine. If you don't, fine, but if you 62 6/3/10 - COMMERCE - BILL 100134, etc. have a number in terms of what you think the threshold should be, just state it for the record.
Thank you. Ms. McColloch, in discussion of affordable housing projects done by community development corporations, can you explain that process for the record. MS. McCOLLOCH: The community development corporations, CDCs, submit proposals in response to a request for proposals submitted by the Office of Housing and Community Development. Those proposals are reviewed and evaluated, funding awards are made, and we work with the CDCs to move those projects forward. The actual financing is provided through the Redevelopment Authority, so ultimately the CDC goes through a loan closing with the Redevelopment Authority, which provides the construction subsidies, and the Redevelopment 63 6/3/10 - COMMERCE - BILL 100134, etc. Authority is responsible for monitoring the construction of the development and inspects the work and makes the payouts and so on and so forth, and the CDC builds whatever the development is that we're talking about.
So the Administration puts out an RFP? MS. McCOLLOCH: Yes.
And there are respondents to the RFP? MS. McCOLLOCH: Yes.
And they submit plans that are not detailed? MS. McCOLLOCH: In the RFP, they submit a commitment -- excuse me. Are you talking about a plan for the development or for the EOP?
Do they have a detailed project? MS. McCOLLOCH: They have a detailed project at the time of the --
Do they have a detailed plan? 64 6/3/10 - COMMERCE - BILL 100134, etc. MS. McCOLLOCH: Yes.
And they know what they want to do. MS. McCOLLOCH: Yes.
But they're not prepared to say what type of inclusions they're going to have on the projects? MS. McCOLLOCH: They don't have the general contractor --
That's ridiculous. Go ahead. MS. McCOLLOCH: They don't have a general contractor under contract to them at the time -- 65 6/3/10 - COMMERCE - BILL 100134, etc.
It doesn't make a difference. They can set goals for a project without having hired a specific contractor. And we had this discussion yesterday in the meeting too and we're going to go through the full discussion here. Since you want to offer the same testimony, that's fine. How many different general contractors does the CDC community really use? MS. McCOLLOCH: There are a variety of contractors, although I would say there are three, quote, big contractors that the CDCs --
So there are three big general contractors that the CDC community generally uses? MS. McCOLLOCH: Yes.
And they are majority prime contractors? MS. McCOLLOCH: Yes.
And do they have a good track record in terms of 66 6/3/10 - COMMERCE - BILL 100134, etc. inclusion? MS. McCOLLOCH: I believe they do, but I don't know -- I don't have the figures in front of me. In fact, I don't have the figures at all. I don't know.
What do you believe their level of inclusion is? I can tell you from having reviewed it for several years that it's horrible. MS. McCOLLOCH: You have more information on this than I do.
But you believe that their track record is good? MS. McCOLLOCH: They are required at the time that they go to loan closing with the Redevelopment Authority --
My question is about their track record in terms of inclusion. We talked about three large majority prime contractors that are used that keep getting the same business from the CDC community for affordable housing, and the question is, the same CDCs get 67 6/3/10 - COMMERCE - BILL 100134, etc. the work, the same general contractors get the work. How can you really say that if you put out an RFP, there are respondents that are selected based upon a detailed proposal and that proposal cannot include economic opportunity goals within it? I can tell you that's why we're just going to move forward with the bill. So you can respond however you want, but we're just going to move forward anyway. MS. McCOLLOCH: If you're just going to move it forward, then I suppose there's no reason for me to respond.
Thank you. I just have one quick question. It really maybe is more for Councilman Goode. The EOP process that Ms. Gillen described with respect to the RDA Board, does that go through the Office of Economic Opportunity or is that a 68 6/3/10 - COMMERCE - BILL 100134, etc. separate process that the RDA just does on its own? MS. McCOLLOCH: There is an economic opportunity officer at the Office of Housing and Community Development that reviews all of the materials, and that recommendation of that person is part of the package that is presented to the Redevelopment Authority Board. So that work is done through OHCD rather than through the Redevelopment Authority.
Does it go through the Office of Economic Opportunity? I mean, do they go through the normal process for the way they set goals for --
No. Their process typically does not go through the Office of Economic Opportunity for housing.
Okay. So how are we getting consistency in goal-setting across different agencies in 69 6/3/10 - COMMERCE - BILL 100134, etc. the City if we're not coordinating that effort through one channel? MS. McCOLLOCH: The goals are set in the request for proposals by the Office of Economic Opportunity. So before OHCD issues an RFP, we get the goals from the Office of Economic Opportunity. So the goals are established in the RFP, and then the staff person at the Office of Housing and Community Development has to review the materials submitted by the contractor in connection with those goals that have been established, sign off on that, and then that package is submitted to the Redevelopment Authority Board.
Excuse me, Councilman. Very quickly. Ms. Dowd-Burton, the goals that have been traditionally set for the housing agencies for RFPs, how are they developed? 70 6/3/10 - COMMERCE - BILL 100134, etc.
The City of Philadelphia has an overarching goal, and we do collect information from the quasi-public agencies on their performance on the economic opportunity goals, and we provide service to the quasi-public agencies upon request, but our resources are primarily dedicated internally to the operating departments. So there is a communication that goes across the City. There is an accountability that goes across the City and a monitoring process.
The question is more so what are those goals based upon and who develops them?
The goals are based upon the disparity study and the types of contracts that the City is engaged in.
I'm talking specifically for the housing agencies and RDA specifically.
The goals are 71 6/3/10 - COMMERCE - BILL 100134, etc. set based on the kinds of work that are done for the housing authority and the Office of Housing and Community Development.
And we've been through this before. I'm going to let Councilman Green continue his questioning. Who sets the goals?
-- within the Office of Economic Opportunity working with the operating departments. I'm not sure that you're interested in -- I'm not sure exactly what your question is, other than that collaboration.
So I guess I'm trying to understand -- it seems to 72 6/3/10 - COMMERCE - BILL 100134, etc. me the process that was described to Councilman Goode or the process that was just described, there's a joint setting of goals for the project before the RFP goes out. The CDC, or whoever is going to develop it, is aware of the goals at the time that they are submitting their response to the RFP, because it's in the RFP. So are these goals goals for OHCD with respect to what it must meet in all of its projects in the aggregate or are these goals goals for each specific project? MS. McCOLLOCH: They're goals for each specific request for proposals. So each RFP that's issued would say that there's a goal for participation. At the time that the CDC responds to the RFP, it generally does not have the -- because it hasn't --
It knows what the goals are? MS. McCOLLOCH: It knows what the goals are -- 73 6/3/10 - COMMERCE - BILL 100134, etc.
Because the goals are in the RFP. MS. McCOLLOCH: Correct. And what it does at the time of RFP is commit to trying to achieve those goals.
Okay. So in the RFP, they commit to try to achieve those goals, but at that stage in the process, they don't have to submit their plan to achieve those goals? MS. McCOLLOCH: Correct.
And that is, I guess, in theory, because you would have five people maybe spending time and money on economic opportunity plans prior to knowing whether or not they have the project? MS. McCOLLOCH: And because they don't have their contractors lined up at the time that they submit to the RFP. So they don't know who the GC is going to be, who the subs are going to be, so forth, at the time they submit to the RFP. But at the time they submit to 74 6/3/10 - COMMERCE - BILL 100134, etc. the RFP, they commit to the goals generically.
So you don't object -- but then once they develop the EOP, it is not referred to the Office of Economic Opportunity? MS. McCOLLOCH: No. It is reviewed by the economic opportunity officer at the Office of Housing and Community Development.
Okay. So is that the case with respect to all of the EOPs in the City or do you review the other ones normally?
We have various levels of EOPs. The higher level EOPs for projects like SugarHouse or the Youth Study Center, there's an overarching oversight committee, and so we are actively engaged in monitoring those projects, but there are smaller projects, some that have EOPs, and we do not monitor those.
That's done 75 6/3/10 - COMMERCE - BILL 100134, etc. by an officer within various departments or agencies?
Okay. So it seems to me, if I'm boiling down the difference here between the Administration and Councilman Goode, it is simply the timing of submission of the EOP? MS. McCOLLOCH: Yes.
It seems like it wouldn't take two hours to work that out in a meeting, Councilman. Thank you.
Thank you, Councilman. I'm not sure the issue is just that, but I think you were right to point out that that could be considered the issue, although I'm not sure the legislation defines it as an issue. I'm not sure the timing factor is within this particular legislation. So I don't think it could be an issue. 76 6/3/10 - COMMERCE - BILL 100134, etc. One of the issues might be threshold, but if the Administration is not willing to discuss what the threshold should be, then we'll just determine what the threshold should be. Any other questions or comments from the Committee? (No response.)
Thank you. Is there anyone else to testify on this bill? (Witnesses approached witness table.)
Good afternoon. Please state your name for the record and proceed with your testimony on any of these bills.
Good afternoon, Chairman of the Committee and other members of the Committee of Commerce and Economic Development. My name is Jihad Ali. I'm a citizen and I'm involved in construction on a regular basis. I regularly attend the RDA 77 6/3/10 - COMMERCE - BILL 100134, etc. Board meetings on a monthly basis. I think I've been doing that for over three years. I regularly attend the PAID meetings. I think I've been doing that for almost four years. Of all the testimony that came forth today on these bills, I almost had to laugh when you laugh, because most of the reasons that they talked about, you had to say, Are they kidding? When you look at development -- and I do have experience as a developer, and I've recently completed three affordable housing projects, two in Philly and one in Chester. I've done market-rate developments. One of the things about a developer is, the land is the land. The land is the most important resource that the developer is going to come to the City for. So to say that a developer is not going to want land because there's a requirement that there's a diversity, in fact a developer would expect the City -- 78 6/3/10 - COMMERCE - BILL 100134, etc. if the City is serious about development and diversity, you would expect to have that. He's not going to turn down -- I wouldn't turn down land because it said I had a diversity requirement, because you're talking about, as the Chairman pointed out, competent developers with capacity, and those developers are going to have -- when we talk about capacity, we're talking about financial capacity and experience on doing these type of developments. So a developer is not going to turn down land because it has a diversity requirement. On some of these thresholds, when we talk about land, you have to keep in mind that some developers are buying land for a dollar. So really if we're talking about a threshold when it's in regards to land, that threshold could be as low as one dollar, because there's some -- in one of these bills they talk about the grant, financial assistance. I think it's Bill No. 100341, where you 79 6/3/10 - COMMERCE - BILL 100134, etc. talk about economic opportunity plans, you talk about the definitions. On the land value, that value should be included to be -- one dollar should be the threshold on some of that stuff. I think that as a citizen and as -- one of the unknown people that you don't regularly think about are the men and women that are involved in construction every day in the City of Philadelphia. This room would be filled with them had they had the opportunity to be here, but most of them are making a living. So I wanted to support this Committee for all the good work that you've done, and I also want to recognize the voters who voted on this issue on the last election. I think you're doing a great job. I think you have to have that leadership that you have. You have to be able to see that the Administration -- I think all the individuals that testified today, they're all decent, honorable 80 6/3/10 - COMMERCE - BILL 100134, etc. people, but this is really the Administration you're talking about. Now, this Administration has been in place for two years. So the Mayor, he could have had leadership on some issues, but to say now, when you're ready to move forward, that there's an exemption this, they want to revise this, I think this Committee should move forward, exercise the good leadership that you have and make a decision and grant no exemptions, except for whatever you consider is appropriate. But I think that you're doing a great, tremendous job. And there's almost like an Army of workers out there, and the sad part about this is, most of those workers don't reflect the diversity of the City, and this is a step to correct that, and I thank you on behalf of all those people who don't know what you're doing. CHAKA: Thank you, Jihad. That was strong. 81 6/3/10 - COMMERCE - BILL 100134, etc. Is my mike on?
Yes. Please state your name for the record and proceed with your testimony. CHAKA: My name is Chaka from Skills Bank Building Association. And I inherited a construction company. I was born with a shovel in my hand. My father had his own construction company and I have my own. I've built houses for the top ten builders in this country, David Cutler Builders, (unintelligible) Engineering, a whole list of them, a whole list of them. And to sit here and hear this testimony that they only have two to three prime contractors that they consistently go to, Jihad reflects only one thing, they're part of the "good old boy" network. And this Committee I support wholeheartedly. Give me my marching orders and, you know, it will be done. But you have to have a more 82 6/3/10 - COMMERCE - BILL 100134, etc. inclusive -- you can't have this illusion of inclusion when you only have two to three primes doing all the work. What happens is, you build not only a giant, but a monster, and it becomes so entangled and weaved that they can buy property, acres, for one dollar. That opportunity will never be given to a small construction company like my own. But I want to thank you for having the courage. Some people have to commit political suicide. They're not going to be reelected again, so they might as well commit themselves to making change while they have an opportunity, and this is the whole atmosphere, to make change. This is -- well, this is an opportunity to make change. I'm just going to say that. But I want to thank you so very much for having the courage to take this position, and I support this Committee. Thank you so very much.
Thank you 83 6/3/10 - COMMERCE - BILL 100134, etc. both for your testimony. Any questions of this panel? (No response.)
Thank you very much. Is there anyone else to testify on these bills? (No response.)
Thank you, Mr. Chairman. Before we go into the public meeting -- and, Mr. Chairman, as you know, I'm usually a little more involved in the conversation, particularly as it relates to this particular issue, but sometimes you get to a point where it's so redundant, that enough is enough. And I think that our willingness and our ability to simply act on these bills to send one message, because being in government for more than 20 years, I clearly understand that there are different processes throughout 84 6/3/10 - COMMERCE - BILL 100134, etc. different departments, and that sometimes creates confusion and creates an inability to adequately monitor what should be taking place to move, working with you and other members of this -- not only this Committee, but this Council, to provide some level of consistency so the message that's sent throughout the City of Philadelphia and the surrounding counties is one message from one city and one legislative and administrative body. So I think it's important as it relates to these particular ordinances to add to some of the things that we've already done to make it, frankly speaking, a lot easier for Ms. Dowd-Burton and Mr. Kevin Dow and people who are responsible for monitoring and ensuring that we have reasonable opportunities. So I guess I say all that to say that I'm through with the conversations, frankly speaking. I think this should move forward, adopt the 85 6/3/10 - COMMERCE - BILL 100134, etc. appropriate amendments, and at the end of the day, shift the responsibility to the people who are actually seeking either land or subsidized housing opportunities or other things from the City of Philadelphia and make it more of a burden on them to do the right thing. So we look forward to -- I know personally I look forward to voting on both the amendments and the bills, and hopefully we can move forward and shift that level of responsibility on those entities that come before this legislative body. Thank you.
Thank you, Mr. Chairman. This Committee will stand in recess for 30 seconds. (Pause.)
We will move from our public hearing to a public meeting to consider these bills. The Chair recognizes 86 6/3/10 - COMMERCE - BILL 100134, etc. Councilwoman Brown for a motion on Bill 3 No. 100304.
Mr. Chairman, I move that Bill No. 100304 be reported out of Committee with a favorable recommendation and further move that the rules of Council be suspended so as to permit first reading at the next scheduled session. (Duly seconded.)
The ayes have it. Bill No. 100304 is reported out of Committee with a favorable recommendation and a suspension of the rules to allow first reading at our next Council session. The Chair recognizes Councilwoman Brown for a motion on the 87 6/3/10 - COMMERCE - BILL 100134, etc. amendment to Bill No. 100369.
Mr. Chairman, I move that Bill No. 100369 be amended. (Duly seconded.)
The ayes have it. The Chair now recognizes Councilwoman Brown for a motion on Bill 17 No. 100369, as amended.
Mr. Chairman, I move that Bill No. 20 100369, as amended, be reported out of Committee with a favorable recommendation and further move that the rules of Council be suspended so as to permit first reading. (Duly seconded.) 88 6/3/10 - COMMERCE - BILL 100134, etc.
Bill No. 9 100369, as amended, is reported out of Committee with a favorable recommendation and a suspension of the rules to allow first reading at our next Council session. The Chair now recognizes Councilman Clarke for an amendment to Bill No. 100341.
Thank you, Mr. Chairman. I move for the adoption of the amendment to Bill No. 100341. (Duly seconded.)
Those opposed? 89 6/3/10 - COMMERCE - BILL 100134, etc. (No response.)
Bill No. 4 100341 is amended. The Chair now recognizes Councilman Clarke for a motion on Bill 7 No. 100341, as amended.
Thank you, Mr. Chairman. I move that Bill No. 10 100341, as amended, be moved out of this Committee with a favorable recommendation, with rules suspension as to allow reading at the next session of Council. (Duly seconded.)
Bill No. 23 100341, as amended, is reported out of the Committee with a favorable recommendation and a suspension of the 90 6/3/10 - COMMERCE - BILL 100134, etc. rules to allow first reading at our next Council session. The Chair now recognizes Councilman Clarke for an amendment to Bill No. 100134.
Thank you, Mr. Chairman. I move for an adoption for the amendment to Bill No. 100134. (Duly seconded.)
The Chair now recognizes Councilman Clarke for a motion on Bill No. 100134, as amended.
Thank you, Mr. Chairman. I move that Bill No. 22 100134, as amended, be reported out of Committee with a favorable recommendation and request for rules suspension as to allow reading at the next session of 91 6/3/10 - COMMERCE - BILL 100134, etc. Council. (Duly seconded.)
Bill No. 11 100134, as amended, is reported out of the Committee with a favorable recommendation and a suspension of the rules to allow first reading at our next Council session. The Chair now recognizes Councilman Clarke for a motion on an amendment to Bill No. 100135.
Thank you, Mr. Chairman. I move for an amendment -- a motion for an amendment to Bill No. 22 100135. (Duly seconded.)
All in favor? 92 6/3/10 - COMMERCE - BILL 100134, etc. (Aye.)
Bill No. 7 100135 is amended. The Chair now recognizes Councilman Clarke for a motion on Bill 10 No. 100135, as amended.
Thank you, Mr. Chairman. I move that Bill No. 13 100135, as amended, be reported out of Committee with a favorable recommendation with rules suspension as to allow reading at the next session of Council. (Duly seconded.)
Bill No. 25 100135, as amended, is reported out of 93 6/3/10 - COMMERCE - BILL 100134, etc. the Committee with a favorable recommendation and a suspension of the rules to allow first reading at our next Council session. The Chair now recognizes Councilman Clarke for a motion on the amendment to Bill No. 100201.
Thank you, Mr. Chair. I move for the adoption of an amendment to Bill No. 100201. (Duly seconded.)
Bill No. 20 100201 is amended. The Chair recognizes Councilman Clarke for a motion on Bill No. 100201, as amended.
Thank you, Mr. Chair. I move that Bill 100201, as 94 6/3/10 - COMMERCE - BILL 100134, etc. amended, be reported out of Committee with a favorable recommendation with a request for rules suspension as to allow reading at the next session of Council. (Duly seconded.)
Bill No. 14 100201, as amended, is reported out of Committee with a favorable recommendation and a suspension of the rules to allow first reading at our next Council session. Thank you very much. This concludes our meeting. (Committee on Commerce and Economic Development concluded at 2:30 p.m.) - - - 95 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on June 3, 2010, and that this is a true and correct transcript of same. -------------------- MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)