COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE THE COMMITTEE OF THE WHOLE - - - Room 400, City Hall Philadelphia, Pennsylvania Weds., 5/30/01, 5:52 p.m. - - - BILL 010331 - To acquire by amicable negotiations or by condemnation fee simple title to certain parcel of real estate with improvements situated therein. BILL 010332 - Placing on City Plan No. 44-S of three certain contiguous rights-of-way for drainage, water, utility purposes, extending from intersection of Pattison Avenue and 11th Street BILL 010333 - To execute and deliver a non- disturbance agreement with the Phillies which may accept leasehold mortgages granted by the Phillies upon its leasehold interest in certain parcels of land owned by the City. BILL 010334 - To enter into ground lease agreement with PAID providing for leasing by the City to PAID of certain parcels of land owned by the City. PRESENT: COUNCIL PRESIDENT ANNA C. VERNA, Chair COUNCILWOMAN JANNIE BLACKWELL, Vice Chair COUNCILMAN DAVID COHEN COUNCILMAN FRANK J. DICICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN JOAN L. KRAJEWSKI COUNCILMAN RICHARD T. MARIANO COUNCILMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN BRIAN O'NEILL COUNCILMAN ANGEL L. ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 5/30/01 - COMMITTEE OF THE WHOLE I N D E X Peter S. Longstreth, President, PIDC . . . . 5 William F. Martin, Esq. . . . . . . . . . . 10 Joseph Syrnick, Chief Engineer and Surveyor 49 Streets Department 3 5/30/01 - WHOLE - 010331, 332, 333, 334 P R O C E E D I N G S
Good evening, everyone. I really want to apologize to our witnesses. I never realized that the previous hearing would be so long. I would ask Mr. McPherson, is there any reason why we cannot consider all of the bills at one time? I could have Mr. McPherson read them all. Thank you. Mr. McPherson, would you please read the titles of the bills before us.
Yes. Bill No. 010331, an ordinance 15 authorizing the Commissioner of Public Property, on behalf of the City of Philadelphia, to acquire by amicable negotiations or by condemnation fee simple title to a certain parcel of real estate with the improvements situated therein. Bill No. 010332, an ordinance 21 authorizing the placing on City Plan No. 44-S of three certain contiguous rights-of-way for drainage purposes, water purposes, and utility purposes collectively extending from the intersection of Pattison Avenue and 11th Street and in an easterly 4 5/30/01 - WHOLE - 010331, 332, 333, 334 and southeasterly direction and intersection with Tenth Street between Pattison Avenue and Packer Avenue, under certain terms and conditions. Bill No. 010333, an ordinance 6 authorizing the Director of Commerce and the Commissioner of Public Property, on behalf of the City of Philadelphia, to execute and deliver a non-disturbance agreement with the Phillies, a Pennsylvania limited partnership, and other parties which may accept leasehold mortgages granted by the Phillies upon its leasehold interest in certain parcels of land owned by the City. Bill No. 010334, an ordinance 15 authorizing the Commissioner of Public Property and the Director of Commerce, on behalf of the City of Philadelphia, to enter into a ground lease agreement with the Philadelphia Authority for Industrial Development, providing for the leasing by the City to PAID of certain parcels of land owned by the City and further providing for the subleasing of said lands from PAID to the Phillies.
Mr. Longstreth, you're going to testify first? Oh, Councilwoman Miller? I'm sorry. 5 5/30/01 - WHOLE - 010331, 332, 333, 334 You want to be recognized?
Yes. Thank you, Madam President. Madam President, I'd like to be excused to attend to Council business and would like to be recorded as voting aye on these bills and the amendments.
Good afternoon, President Verna and members of City Council. My name is Peter S. Longstreth, and I'm honored and pleased to appear before you today in my new capacity as President of the Philadelphia Industrial Development Corporation. I've been at PIDC for approximately three months now and I'm energized by the role which PIDC has played, and will continue to play, in improving the City's business environment and fiscal health. I hope and expect that this will be the beginning of a long and productive relationship with City Council as regards our common interest in economic development. 6 5/30/01 - WHOLE - 010331, 332, 333, 334 On a personal note, I am especially honored to participate in a forum which has defined my father's long and satisfying career in public service and, frankly, I'm sorry he's not here to hear that, but I'm here today, of course, to testify in support of City Council Bills No. 010331, 010332, 010333, and 010334, which are related to the stadium development project. As you know, my predecessor at PIDC, William P. Hankowsky, represented the City's interests in the stadium approval process until his resignation in January 2001. And since then, William F. Martin, who is seated on my right, has assumed those responsibilities and has effectively negotiated the contents of the several bills before you today. These four bills relate to certain technical aspects of the football stadium and baseball park development project and are completely consistent with the financial and business terms of the agreements which were approved by this body in December and January. As these bills are necessary preconditions to commencing construction and financing the project, I would respectfully request your favorable recommendation and final approval of 7 5/30/01 - WHOLE - 010331, 332, 333, 334 all four bills prior to summer recess. Following, I will briefly describe each bill and Mr. Martin and I will then respond to any questions which you may have. Bill No. 010331 is required to authorize acquisition of a portion of the former Acme warehouse parcel. In December, City Council approved the condemnation or amicable acquisition of five parcels of land to expand the existing sports stadium district. The package of bills included Bill No. 000730, which authorized acquisition of the former Acme warehouse parcel. The survey information available at that time, however, did not include a strip of land at the southern boundary of the property that is approximately 1200 feet in length and varies in width between approximately 10 and feet. The land will be acquired at no 19 additional cost to the City and will ensure that the 20 City holds good title to the entire parcel. Bill No. 010332 is required to relocate certain utilities related to construction of the baseball park. Earlier this spring, Council approved Bill No. 010180 to strike Tenth Street between Pattison Avenue and Hartranft Street in 8 5/30/01 - WHOLE - 010331, 332, 333, 334 order to make way for the Phillies baseball park. The bill authorizes changes to the City Plan necessary to relocate existing utilities in the closed portion of Tenth Street to rights-of-way that are now in the southeast corner of the Veterans Stadium parking lot, and which will follow the western edge of the new ballpark. The work will be performed at the Phillies' direction and is included in their budget presented to City Council this past winter. Bill No. 010333 authorizes the City to deliver non-disturbance agreements with the teams and their lenders in connection with the new facilities. A non-disturbance agreement confirms the teams' right to occupy their facilities under the sublease and development agreements. Such agreements are standard prerequisite of lending institutions and are, therefore, necessary for the team to obtain their private financing. " And, finally, Bill No.
010334 authorizes the City to ground lease the land under Veterans Stadium and the surrounding parking lot to the Philadelphia Authority for Industrial Development, or PAID, which, in turn, will incorporate this land into its sublease and development agreement with the Phillies. This bill enables the Phillies to redevelop and operate these parcels for parking, including the Veterans Stadium and after demolition, consistent with the agreements approved by the City Council this past December and January. Due to several technical changes in Exhibits A and B of this bill, I have amended versions here on the table for distribution to Councilmembers. In closing, I would like to reiterate my statement that these bills are fully consistent with the financial and business terms of the stadium and ballpark agreements which this body approved in December and January. Therefore, I respectfully request your favorable consideration of City Council Bills No. 010331, 010332, 010333 and 010334, with final approval prior to Council's summer recess, and 10 5/30/01 - WHOLE - 010331, 332, 333, 334 towards that end, request suspension of the rules to allow for first reading at Council's session tomorrow.
Thank you. Did I understand you to say that you had amendments?
Yes. There are amendments are right here. This concludes my formal testimony. I'd be happy to answer any questions that Councilmembers may have for me or Mr. Martin.
Thank you. I would like you or Mr. Martin to confirm that the agreements that the four bills before us today are really technical in nature and fully consistent with the financial and business terms of the stadium and ballpark agreements as approved by Council.
Mrs. Verna, I believe your 11 5/30/01 - WHOLE - 010331, 332, 333, 334 characterization is correct. They're technical and it's -- we need this body's approval to proceed in the fashion laid out that's consistent with everything that was presented in December and January.
Thank you. Bill No. 010334 would authorize the City to ground lease certain land to PAID for sublease to the Phillies. As part of Bill No. 722, the City has already approved a ground lease between the City and PAID for sublease to the Phillies. How does that ground lease differ from the ground lease approved as part of Bill 722 and why was this matter not handled as part of Bill No. 722?
The bill you refer to, 010334, sets in place the same structure as contemplated by 722. The reason it was not included as part of 722 is that, at that time in December and January, there was some uncertainty as to this particular land as a legal matter, whether it would go from the City to PAID and then to the Phillies or how it would be handled in the context of amending 12 5/30/01 - WHOLE - 010331, 332, 333, 334 and restructuring the parking agreements at the sports stadium complex with SALP. So the reason it was not included in December and January was because of the uncertainty that existed at that time regarding the final legal structures, but it is in all -- in essentially all respects putting in place as to this land the same structure that had already been approved as to certain other land at the sports complex.
Thank you. Immediately after this hearing, there will be a briefing on a proposal for an additional ordinance to revise various aspects of the parking arrangements at the sports complex. As I understand it, that proposal would, among other things, redirect to the Phillies certain parking revenues that, under certain contractual agreements, would become City revenues beginning in year 2027. Is Bill No. 010334 in any way related to that proposal, and specifically, would Bill No. 22 010334 in any way affect revenues that, under current contracts, are City revenues, or would the bill in any other way decrease potential City revenues or increase potential City liabilities? 13 5/30/01 - WHOLE - 010331, 332, 333, 334
My only comment is that the briefing is intended to clarify all of those points, but Bill, you may want to make the relationship.
But my question is, is Bill No. 010334 in any way related to that proposal?
It is a necessary part of the overall structure. There is nothing about 010334 that addresses the issues you alluded to in your question regarding parking revenue and the extent to which parking revenue would be made available to the teams as opposed to perhaps coming back to the City at some point in the distant future. Those issues are addressed in the amendments to a variety of documents which are exhibits to the other legislation that you referenced. So there is nothing about this that arguably takes any money away from the City that otherwise would be going to the City.
Thank you, Madam 14 5/30/01 - WHOLE - 010331, 332, 333, 334 Chair. Just a point of clarification. I heard your question and I thought the first part of the answer was that the bill you were asking about, 010334, I thought that Mr. Martin said that that was a necessary element or necessary component; I don't remember the exact words that he used. And then subsequently, he continued on to say that 010334 had nothing to do with the issues you had raised relative to either revenues coming to the City or going to other places or increased City liability. So I'm not clear, quite honestly, about the answer as it relates to the question and the start of the answer versus the conclusion.
Okay, let me try again. I apologize if I wasn't clear. This ordinance will provide for the ground lease of certain land down there at the sports complex from the City to PAID, and it is anticipated then from PAID to the Phillies. The issue which the Council President alluded to regarding how the parking revenues will flow is part and parcel of the other ordinance that we hope to have introduced tomorrow and that we hope 15 5/30/01 - WHOLE - 010331, 332, 333, 334 to brief Council on after this session. So without this ordinance, the whole structure in essence has a technical hole, but there is nothing about this ordinance that requires any particular flow of parking revenue. I would describe it as a necessary, but not sufficient, component.
All right. So to allow for the benefit whatever the new piece of legislation that may be introduced to be effective, you're saying that Bill 010334 has to be in place or has to be a part of a larger strategy to allow for the particulars of this other legislation to go forward.
You're welcome. The Chair recognizes Councilman Cohen.
Thank you, Madam 16 5/30/01 - WHOLE - 010331, 332, 333, 334 President. Does -- you described these four bills as being fully consistent with the bills that were passed back in December and January and that they change nothing basically. Will you be able to say the same of the other two bills on which we are going to be briefed, or is that the difference between the two sets of bills?
No, I will make the same representations and assertions as to the other two bills. The other two bills, which are -- I don't think it's our purpose to get into debating them at this point, but the other two bills are in the same way consistent with what was presented to this Council in December and January.
Consistent? You mean the other two bills will not in any way change the flow of revenue away from the from the City to the teams?
The other two bills will provide for the flow of revenues consistent with the testimony that was provided to this Council in December and January.
My understanding of 17 5/30/01 - WHOLE - 010331, 332, 333, 334 that testimony -- my memory was that the City would not contribute any additional funding. Is my understanding consistent with the purpose of those two other bills?
So the other two bills are not going to require, even in 2027, any diversion of funds away from the City?
The other two bills provide -- one of the two other bills that we're talking about provides for the parking revenues at the sports complex to run to the benefit of the teams. It was clearly testified before this Council that the teams would receive the parking revenues at the sports complex under the new transaction.
Well, we'll wait for the next two bills on that; my understanding is to the contrary. And my understanding was that there was an absolute commitment by the speakers for the Administration that what we dealt with back in December and January constituted a final statement as to the responsibilities of the City and that they would not be increased, and that that meant that there would be no diversion in the future of any 18 5/30/01 - WHOLE - 010331, 332, 333, 334 monies away from the purposes stated in that legislation back in December and January. And I don't recollect anything in that legislation that authorized the diversion of parking fees. We'll see what happens with the two bills.
It may just be an inappropriate time to have this discussion, but I'm sure we'll an opportunity in the near future.
Let me ask you about the additional land that you referred to with the bill that ends with a 1. Did we know at that time that it was going to be necessary to do something about this piece of land that you described as being 1200 feet long and of varying width?
Which, incidentally, represents about a quarter of an acre just to put it in a --
I don't recollect any indication that there was going to be any need for any further demarcation of the land. 19 5/30/01 - WHOLE - 010331, 332, 333, 334
I think this was just a discrepancy between materials in the deed and materials in the survey that was available at that time, and obviously, the significant point here is that there is no additional cost.
Well, I like that and I like the statement that Mr. Martin made -- and welcome, Mr. Longstreth.
I am clearly an example of a proud father and I'm delighted that Councilman Longstreth is part of the club and Councilman DiCicco, even though we were battling very hard just a few moments ago. But I thought the clear difference between the two sets of bill related to what was happening to the revenue, but you say that's not the case and we'll have to wait for the further briefing and the further evidence. Tell me, what's this -- I must have missed it when we were having the hearing, this special kind of a non-disturbance agreement.
That I'll leave to the lawyer 'cause that's really just a legal stature 20 5/30/01 - WHOLE - 010331, 332, 333, 334 that --
It enables the teams to operate in the facility without being disturbed, but, Bill, why don't you expand on it?
It's a document necessary for the teams and their private financing sources so that in the event there is -- because the underlying fee continues to be owned by the City subject to the lease to PAID, this document will ensure that if there is a technical break in the leasehold between the City and PAID, so long as there's not a break in the leasehold between the PAID and the teams that the teams and their lenders continue to enjoy the benefits of the buildings, so long as they are performing under their subleases.
You mean if at some point in time, the City and PAID, even though all of PAID appointees serve at the will of the Mayor, that somehow or other they clash in some way?
If PAID were to technically breach its lease with the City, while at the same time the teams were fully complying with their 21 5/30/01 - WHOLE - 010331, 332, 333, 334 sublease to PAID, the City could not rely upon that to essentially kick out the teams.
It is a requirement that we're anticipating that this technicality will attempt to be addressed by the teams' lenders. So we are confirming through this ordinance that the delivery of the non-disturbance is permitted by the City. We're seeking this body's authority for the City's delivery of the non-disturbance at such time it is requested, and we anticipate it will be requested by the teams' private lenders.
I have great difficulty with that concept. Am I right that the members of PAID are mayoral appointees?
And that they are subject to dismissal at the will of the Mayor, that they do not serve any fixed periods of appointments?
Perhaps, for example, a lender would want to be protected against some kind of shenanigans between the City and PAID in an 22 5/30/01 - WHOLE - 010331, 332, 333, 334 attempt to work to the disservice of the teams and their lenders.
Was this, to your memory, discussed at all at the December and January hearings?
I believe the delivery of non-disturbances is anticipated by the forms of subleases that were approved by the body.
You mean that there may have been language to that effect?
But I was asking whether there had been any oral discussion.
Are you saying that with respect to the parcel of land -- I'm just going to call them Bill 1, 2, 3, and 4 'cause they end conveniently with those numbers. And Bill 1 does not involve an additional land acquisition; it's part of correcting deeds?
We had always talked about acquiring the Acme parcel. When the bill that this body approved in December that authorized that 23 5/30/01 - WHOLE - 010331, 332, 333, 334 acquisition had a property description that at that time we thought was the accurate one. After Council acted, but before closing, we saw that this gap existed between what we had the authority to acquire and what, in fact, we wanted to acquire. So we acquired what we had authority to do, we took a deed from the seller and kept it in escrow, pending receipt by the City of formal authority to acquire the real estate. And the City can't buy real estate without this body acting. We only had the authority to acquire that 98 percent. This is the other 2 percent. But we've anticipated the next step by receiving the deed from the seller, having it in the lawyer's office in escrow. Once we receive authority to take the acquisition, we'll put it in the record and complete the acquisition. There's no 19 additional money involved.
Well, for all practical purposes, has that acquisition been completed?
Has it been completed by agreement or by condemnation? 24 5/30/01 - WHOLE - 010331, 332, 333, 334
By agreement. And it is now completed subject to this very last parcel?
With respect to the overall status, the land has been -- has all the land necessary for the stadium project been acquired? I understood, I think, originally there were going to be five major parcels. Have they all been acquired?
No, sir. Let me affirm the status for you. Two of them have been acquired.
All of this is by agreement. Two have been acquired. A third is under agreement with closing to follow. A fourth is very close to agreement, and I would say the agreement will be signed within the next week or so. All the business terms have been confirmed, and we're in the process of finalizing the documentation. The fifth has not been acquired. The owner of the real estate is in bankruptcy, and we 25 5/30/01 - WHOLE - 010331, 332, 333, 334 are waiting for the bankruptcy to shake out so it's clear who the proper party in interest is that we need to deal with. So two are done, one's under contract, another is close to being under contract, and there is a fifth which we still have some work to do on.
There have been some newspaper reports about a ground-breaking ceremony. Can that occur prior to the final acquisition of all five sites, or is it contingent upon the settling of all five?
There is a ground-breaking scheduled by the Eagles. The Eagles site has been acquired and they're doing work there pursuant to an access agreement, and they intend to schedule their ground-breaking -- or have scheduled their ground-breaking for June 7th.
So the non-completed part relates to the Phillies agreement, not the Eagles agreement.
The non-completed part is a portion of the parking; it's not a part of the Phillies ballpark but it's a portion of the parking 5/30/01 - WHOLE - 010331, 332, 333, 334 site.
Does PAID, under the current December-January agreement, does PAID get any of this parking revenue currently? Will they get it or were they just going to get it beginning with 2027?
Once again, I mean, we're dealing with this in detail in the briefing and would be happy to respond in detail, are prepared to respond in detail with a lot of materials and visuals in the -- I guess it's the Mayor's caucus room.
Well, let me ask this: Assume for the moment that the next two bills run into trouble here and don't get through Council, would these four bills be necessary, or are these four bills tied in with the two so that the --
My understanding is any one of these bills could be fatal to this project.
Any one of the six. All right, thank you, Madam President.
I see that Councilman Goode's light. Is on is he in the room? (Councilman Goode not present. 27 5/30/01 - WHOLE - 010331, 332, 333, 334
Thank you, Madam President. Mr. Martin, a couple issues relative to the property acquisition. Of the four properties that have either been agreed to and have been acquired or an agreement to acquire or those that are poised on agreement, I assume you cannot discuss the purchase price of any of those properties at this point?
No, I understand that. As part of the agreement and the purchase price, is there still an option for any or all of these owners to appeal to the Board of View for additional monies? I mean, is there an agreement to get it done and then an opening for them to go to the Board of View and seek additional dollars?
As to the property that was acquired from Tower Investments, Tower Investments has retained its rights under the agreement to 28 5/30/01 - WHOLE - 010331, 332, 333, 334 appeal valuation to the Board of View.
Do any of the other three completed or potential agreements include a similar provision?
I assume we expect -- since he's reserved the right, we expect Mr. Blatstein (ph.) will be moving forward to appeal that, I would suspect. I mean, there's no sense in retaining your rights unless you're going to use 'em.
We have no notice of appeal, but you could draw your own conclusions.
Okay. I know we're going to be briefed, I assume, today on the additional SALP agreement. The only thing that I would caution, or at least mildly caution, the Administration and you guys on is that there seems to be developing a method -- a position that somehow, this was always going to be the case, that the parking revenues, which were part of an agreement between, I guess, Ed Snyder and then First Union and then whoever the succession of owners of that building are, and the rearrangement of those 29 5/30/01 - WHOLE - 010331, 332, 333, 334 revenues and the redirection of those revenues back to the Phillies, and the loss of those revenues potentially at 2025 or 2027 out was always understood to be the case. And the only thing I would ask is if that was always understood to be the case, why is there a special piece of legislation coming back here at the eleventh hour to get it done, and why was none of this discussed in any way until the potentiality of Comcast being involved in the deal came to the fore? If this was something that was understood from the beginning, why wasn't it a part of the agreement that we approved back in December in the first place? 'Cause I don't mind considering doing it and I don't mind making the effort to get it done to get the deal done, but it's somehow insulting to us to say, Well, you know, this was always going to happen any way, you guys should have known this. And if that were the case, it would have been part of what we voted on in December of 2000. So do you have a comment or opinion on it?
The reason it was not 30 5/30/01 - WHOLE - 010331, 332, 333, 334 included as part of what was voted on in December and January is that what we needed to vote -- what we needed to ask Council's approval of was a completed document which restructured the respective rights and responsibilities of the Comcast Spectacore and the teams and the public. In December and January, with what else was going on, there was in essence a germ of an idea at that point, but there was not a structure and arrangement to come to Council and ask for approval.
That's not what I'm talking about. What I'm talking about is the people that I have talked to relative to this deal privately have indicated to me that, Well, you know, in fact, that was always the case, didn't you know that? And I guess I didn't know it, number one. Number two, if it was always the case and we all knew it, why wasn't it part and parcel of what we approved?
I mean, I can obviously get off the hook here by saying I wasn't there and I'll only say it a few times. But, I mean, obviously, there was a $53 million gap in December and January and -- 31 5/30/01 - WHOLE - 010331, 332, 333, 334
I think the assumption was that certain sources of revenue would be identified to support the capital necessary to fill that gap, but it wasn't defined at the time.
That was made extremely clear to all of us and it was said innumerable times prior to our final vote that we would not be back here again.
Councilman, it was also said clearly that the teams were to receive parking revenue.
Well, not all the 32 5/30/01 - WHOLE - 010331, 332, 333, 334 parking revenue in 2027 that we were supposed to get back as a result of the expiration of the agreement that we made with Ed Snyder, First Union, Comcast back when Spectrum II was being constructed.
We laid out in significant detail the benefits that were to accrue to the City as a result of these transactions. We certainly didn't suggest in any respect that any portion of the parking revenues, as distinct from the parking taxes, were to come to the City either now or in 2025. And there were -- in one case during testimony, Councilman DiCicco asked Bill Hankowsky, have we considered parking surcharge as a way to generate revenue for the City contribution? And Hankowsky's specific comment was that the deal was structured to allow for the teams to retain the revenue sources, including parking because the teams were taking on the risk of development, the risk of cost overruns, and that that was part and parcel of the basis of the bargain. And perhaps we could have been more explicit at that time, but I think a fair reading of the record that existed back then is that it was 33 5/30/01 - WHOLE - 010331, 332, 333, 334 clear that the teams were to receive parking revenue, and perhaps we -- to be honest, this issue, the 2025 money, I don't think was contemplated one way or the other, but I think what is being suggested as to that money is consistent with the testimony of December and January.
I just -- no matter how I vote on this in the end, I don't want it to characterize that somehow -- you guys knew this, this was clear. I'll tell you what, back in December 2000, there wasn't much that was clear, I can assure you, and this was not clear to me, and I just want to make that statement for the record right now. Secondly, have the teams signed the leases yet?
It will be necessary in connection with the execution of the leases to finish identifying all of the additional contributions.
But we're buying 34 5/30/01 - WHOLE - 010331, 332, 333, 334 land, we're committing City resources, and wouldn't it be a sign of good faith for the teams to at least sign the lease? I mean, they're beginning -- the Eagles are actually in the ground to a degree --
-- without a signed lease. I mean, we're acquiring Acme, we're acquiring T, we're acquiring all of these parcels at our cost, and they haven't even given us the courtesy of signing a lease yet.
I think it's clear that both of the teams have went significantly out-of-pocket at this point in anticipation of the transaction going forward. Both the Phillies and the Eagles have spent millions of dollars, especially the Eagles in terms of the money going into the demolition of the T Warehouse and also the work that is going on in anticipation. We are meeting with representatives of the teams essentially on a daily basis at this point and we're very confident that everything will proceed.
When do you expect that they're going to sign? 35 5/30/01 - WHOLE - 010331, 332, 333, 334
Okay. Let me ask you one final question on the SALP issue. In the event everything is approved as requested, is there still a gap?
Where is that coming from? Since you're not coming back here again, where is that coming from?
The City is continuing to work to identify sources and hopes to complete that process within the next several weeks and would certainly be sharing that information with Council as soon as it's in hand.
And if I could add one thing. The Mayor has been very clear to us that that money is not to come from the City. 36 5/30/01 - WHOLE - 010331, 332, 333, 334
I'm sorry you added that last comment 'cause it was made very clear to us back in December that none of the 53 million was coming in any way from the public -- 54, sorry, from the public. See, I consider taxpayers' money and people who are in the public going into their pocket and paying, that's also public money, they're public contributions. Whether you're paying a $12 parking fee or whether you're taking the money out of the City treasury, I still think it's public money. And what we're basically being asked to do on the SALP issue is to allow that cap to come off and for the open-ended charge of parking rates that could amount to at least $12 a car by the time Phillies open and perhaps, you know, the sky's the limit from there on end. I understand it's what the market will bear, but sometimes people's markets vary as to whether they want to park in a parking lot for $15 or park on somebody's street for free. And I recognize Council President Verna has worked very closely with the neighborhood groups and the Administration to ensure that this level of 37 5/30/01 - WHOLE - 010331, 332, 333, 334 service, including towing, is part and parcel of the special services district, the higher you move up those parking rates, the more likely it is that people ingeniously try to find a way to park somewhere else other than in a paid parking lot, and those are serious concerns. Thank you.
Thank you. The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. Mr. Martin, a while ago, in response to Councilman Cohen, you made reference to some of the items that were a part of the topic of discussion back in the December-January time period related to parking. First, if you covered any of this territory in the questions that Councilman Kenney asked, I apologize and you can just tell me that. But what is your recollection of what we were told about parking revenues or fees back at that time?
Councilman Nutter, I 38 5/30/01 - WHOLE - 010331, 332, 333, 334 mean, once again, we do have a briefing schedule that really has kind of chapter and verse on most of these things in the next room, so. . .
Councilman, if you have the opportunity, you might want to take a look at the notes of testimony from the hearing of December 5, 2000, which was a meeting of the Committee of the Whole. And during that hearing, Councilman DiCicco, and I'll quote, he says: "Why are we not considering a parking surcharge, which is really a user fee, that would hopefully reduce maybe the City's contribution to the stadium project going forward?" Now, that was a part of a longer question. Now, Hankowsky responds, and now I'm on , Line 10 of the transcript. He says: "To your second question, which is the issue of the inclusion or non-inclusion of a parking surcharge in the transaction, I mean, fundamentally, there are a variety of revenue streams in the transaction, and a parking surcharge to some extent is simply another way to say that we should raise the parking rate. 39 5/30/01 - WHOLE - 010331, 332, 333, 334 And where this transaction ended up was requesting the teams to do more than they had been prepared to do in the past. On the Phillies' side, that dealt significantly with increasing their contribution to the building and taking on various responsibilities. On the Eagles' side, it dealt with increasing our commitment to operation and maintenance funds as well as both teams picking up the inflation. And so we could have called it a 'parking surcharge,' collected it, used it to pay for a contribution, or we could simply say, 'Teams, you get the parking and you make your contribution go up,' and we did the later." That's what we're doing here.
Okay. So from that portion of the testimony, and maybe there were other references, you're saying that was the definitive testimony on what was going on with parking fees or revenue?
I'm sorry to interrupt. When I went through all of the records based upon the index looking at the word "parking," that was really the -- close to the only but definitely the clearest reference to parking and revenues and where 40 5/30/01 - WHOLE - 010331, 332, 333, 334 they went and why they went there. What I just read to you, I think, is consistent with Mr. Hankowsky's understanding back in December and consistent with my understanding back in December and, I believe, consistent with the transaction that we're seeking introduction of tomorrow with these other two ordinances.
Well, I understand that, but, I mean, you would, as the good attorney that you are, and you know I'm not, so I'm at a disadvantage with you. I mean, you would, I think, at least have to admit that Mr. Hankowsky responding to a question asked by a member about a surcharge -- and I don't know whether that was early in the hearing, late in the hearing or after multiple days of hearings. Mr. Hankowsky responding to a question asked by a member about a parking surcharge would not necessarily qualify as a full-blown presentation as a part of his prepared remarks about where revenues are going or who's using what revenues or who's getting credit for what revenues. You would agree that that's not necessarily an affirmative part of a broad presentation as opposed to an offhand response to a 41 5/30/01 - WHOLE - 010331, 332, 333, 334 question that may or may not be asked in the course of a public hearing.
I would agree, Councilman, but I would also say that if I went and pulled out the materials that were circulated to Council that were intended to demonstrate the public benefit of this transaction, you would see charts that would show all of the --
I'm not -- just so we're clear, I'm not questioning the public benefit of the transaction. You made a statement in response to a question by Councilman Cohen that we had been told certain things at the time. I tried to pay a fair amount of attention to the transaction back at the time. I didn't have a lot of recollection about extensive conversation, as we had many extensive conversations about many topics back at that time. I didn't recall one that was particularly extensive about parking. Your response to that was -- and you were very prepared and I give you credit for that -- to tell me about an exchange between Councilman DiCicco and Mr. Hankowsky for an offhand question that was asked, as opposed to, Here's the testimony, 42 5/30/01 - WHOLE - 010331, 332, 333, 334 it was mentioned, it's direct, it's on of the testimony or something like that. So, I mean, we will go into all of those other issues either in the briefing or when we get to the bill, but I just kind of wanted to have a sense of what was said back at the time because, I mean, I could have been anywhere at the moment. I don't even remember that particular testimony. I'm sure there are many other parts of the testimony if you read the first three words, I'd know where the rest of it was going, but I didn't remember that particular portion. And your testimony is that that was a kind of definitive moment about what the transaction was going to be as it related to parking.
Thank you. The Chair recognizes Councilman Ortiz.
Just following up on Councilman Nutter's 'cause I don't recollect it either, but if you knew at the time that the gap 43 5/30/01 - WHOLE - 010331, 332, 333, 334 wasn't really $54 million because this revenue was included, why didn't you say so at that time?
I mean, you knew this was going on, right? And you kept maintaining that the gap was $54 million. Why weren't you forthcoming at that point and say actually, Look, it's not $54 million, we're going to get the teams and we're going to get all of this revenue from the parking and they're going to be able to charge whatever they want from the taxpayers, and the gap is going to be close to 9 million. Why wasn't that information given?
Because you're suggesting that all of the elements that we talked about involving the filling of the gap, which was an additional contribution from the Commonwealth, DRPA. I mean, none of those pieces were -- this piece was not in place, nor were those other pieces in place at the time. And Comcast Spectacore has certain legal rights as it relates to parking revenues and the parking lots down there. And we anticipated, Councilman, and you would have seen -- I'm sure you 44 5/30/01 - WHOLE - 010331, 332, 333, 334 did see in the leases that this body approved that there was a condition to the parties proceeding that there had to be an amendment to the SALP agreement. Okay, that was not something that we tried to hide from you. We put out there that we had to amend the SALP agreement because their rights needed to be rationalized with the rights that we wanted to give to the Phillies and the Eagles. So, you know, it was not a matter of not disclosing something that we were aware of at that point because it would have been inappropriate to talk about money coming through the cooperation of Comcast at that time because there had not been a dialogue with Comcast.
It's very funny, the lack of information that we had at the time that we approved the thing and the lack of information that currently keeps on cropping up. Thank you, Madam Chair.
You're welcome. The Chair recognizes Councilman Cohen.
Back in the dim, dark days of December and January, when most of us felt 45 5/30/01 - WHOLE - 010331, 332, 333, 334 we were in the dark, and still sort of feel that we were in the dark at that time, we were told that no 4 part of the funding gap was going to come from the City. Then you just referred to the DRPA loan. Isn't there talk now that that loan is going to be repaid by the City, I guess by PAID from the rental funds? And would that money otherwise be coming to the City's General Fund if it weren't being used for that?
But PAID is a part of the City. You know, sometimes PAID becomes in integral part of the City, sometimes you have it hanging out there to dry as a separate organization, but if PAID is an asset of the City, the money would have been to PAID, and the City, including PAID, would be -- is the DRPA loan worth 9 or 10 million?
All right, a $10 loan. Isn't the City, including PAID as part of the 46 5/30/01 - WHOLE - 010331, 332, 333, 334 City, going to be $10 million less rich than it would be if we didn't pay back the loans with the rental proceeds?
Councilman, I can't accept your premise that PAID is a part of the City. I mean, I just -- that question isn't one that makes sense to answer to me because I know PAID is a State authority separate and apart from the City.
Oh, you mean the Governor controls PAID, not the Mayor?
Well, other than the fact that it's established under State law, tell me how it works for the State.
I'm tired of that kind of legal nonsense because I think that's all it is. All an authority is is a City instrument incorporated under the State law for the purpose of whatever purposes there are, avoiding civil service 47 5/30/01 - WHOLE - 010331, 332, 333, 334 provision maybe, political patronage maybe, avoiding the debt, the constitutional debt limits to the City, but it's an authority that we create for the purpose of doing City work and it does only City work and has no obligation to the State at all. Isn't that a fact? Other than complying with the filing reports that the State requires of all corporations organized under State law?
Councilman, let me go back a couple of steps. The DRPA loan, which was a loan to PAID, is no interest for 30 years. It's only payable out of the rents, which may be paid by the teams upon their renewals of their leases at the buildings. Now, your point is -- I don't want to say what your point is, but your argument is to me that that loan is being paid with City money. I disagree with you. I respect your opinion, but I disagree with you. That DRPA loan as additional contributions is consistent with the representation and the positions that were stated here in the hearings in December and January.
So the authority does City work but is not a City agency. And the City -- 48 5/30/01 - WHOLE - 010331, 332, 333, 334 and any revenues PAID has don't belong to the City, we have no relationship with it? Is that what you're saying?
It's hard for me not to speak as a lawyer, Councilman. As a matter of law, whether the City has legal rights to any particular money is a matter of contract or a matter of agreement as between PAID and the City, and it varies, depending on the circumstances.
But isn't the chief executive officer of the City the top official in real life of both groups? He can change the membership of PAID tomorrow morning if he wants to to negotiate with the City officials that he designates as the negotiators on behalf technically of the City and he names the negotiators who are going to negotiate on behalf of PAID? It's only a legal fantasy for the purpose of avoiding other obligations. Sometimes you use an authority in the executive level to avoid having to deal with City Council, 'cause if you have to finance something through the regular budget, you have to come to City Council, so you try to get an authority to deal with something 'cause you avoid 49 5/30/01 - WHOLE - 010331, 332, 333, 334 coming to City Council. I submit to you that when we talk PAID, we're talking the City, and when we're talk PAID money, we're talking City money. And I believe that when PAID money is used to pay off the DRPA loan, if and when that happens, they're using City assets. Thank you, Madam President.
You're welcome. Are there any other questions from members of the committee. (No further questions.)
Do we have any other witnesses to testify? (Witness comes forward.)
Good evening. I also want to thank you for your patience. I know you've been here for quite some time.
Good evening, Madam President and members of Council. My name is Joseph Syrnick. I'm Chief Engineer and Surveyor of the City and I work out Streets Department. The Department would like to offer the following testimony on Bill No. 010332. 50 5/30/01 - WHOLE - 010331, 332, 333, 334 This is an administrative ordinance 3 sponsored by the Department of Streets. The purpose of the ordinance is simply to place three contiguous rights-of-way on the City Plan to facilitate utility relocation for the construction of the new Phillies ballpark. This ordinance is supported by the Department of Streets and is recommended to the committee for favorable recommendation. Thank you.
Thank you. Do we have anyone else to testify on the bills before us? (No response.)
Seeing no 16 other witnesses, this will conclude the public hearing. We will now go into public meeting. The Chair recognizes Councilwoman Blackwell regarding Bill No. 010331.
Madam President, I move that Bill No. 010331 be reported.
That's all 51 5/30/01 - WHOLE - 010331, 332, 333, 334 right.
And Mr. Martin, please come back to the table. (Witnesses return to witness table.)
I know that we just received the copies of the amendments. I think you're going to have to say what the amendments are for the record and offer them, if you will.
Right, yes. Thank you. And the amendments are changes to the exhibits. Exhibit A is the form of ground lease agreement, and there have been several technical changes in the form of the ground lease agreement, and we've distributed both the proposed amendment and also a black-lined copy showing the changes from the prior draft. And most significantly, it makes it clear that the ground lease is subject to the existing 52 5/30/01 - WHOLE - 010331, 332, 333, 334 agreements with Spectrum Area Limited Partnership. Exhibit B changes -- replaces the legal description with a new legal description. And the difference is in looking at it again, we needed to include the area which are the two current Eagles practice fields and the practice bubble, which had not been -- that land had not been included in the prior legal description. It is now included. So those are the two amendments -- the one amendment to the two exhibit changes.
Thank you. Thank you. - - - 53 5/30/01 - WHOLE - PUBLIC MEETING
We are now in our public meeting. The Chair recognizes Councilwoman Blackwell again regarding Bill No. 010331.
Madam President, I move that Bill No. 010331 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit consideration at our next session of Council. (Duly seconded.)
It has been moved and seconded that Bill No. 010331 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit first reading at our next Council session. All those in favor will signify by saying aye. Those opposed?
The record will indicate that Councilman Cohen has abstained. All other Councilmembers have voted in the 54 5/30/01 - WHOLE - PUBLIC MEETING affirmative. The motion passes. The Chair recognizes Councilwoman Blackwell again regarding Bill No. 010332.
Madam President, I move that Bill No. 010332 be reported out of committee with a favorable recommendation and also a recommendation that the rules be suspended so as to permit consideration at our next session of Council. (Duly seconded.)
It has been moved and properly seconded that Bill No. 010332 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit first reading at our next Council session. All those in favor will signify by saying aye. Those opposed?
The record will indicate that Councilman Cohen has abstained.
You're 55 5/30/01 - WHOLE - PUBLIC MEETING abstaining?
You didn't say that. The record will indicate -- Councilman Ortiz, please. Are you abstaining on all four bills?
The record will now indicate that Councilmembers Cohen and Ortiz are abstaining on Bills 010331 and 010332. All other members have voted in the affirmative. The Chair recognizes Councilwoman Blackwell regarding Bill No. 010333.
Madam President, I move that Bill No. 010333 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit consideration at our next session of Council.
Thank you. Is there a second? (Duly seconded.) 56 5/30/01 - WHOLE - PUBLIC MEETING
It has been moved and seconded that Bill No. 010333 be reported out of committee with a favorable recommendation and also a recommendation that the rules of Council be suspended so as to permit first reading at our next Council session. All those in favor will signify by saying aye. Those opposed?
The record will indicate that Councilmembers Ortiz and Cohen have abstained. All other members have voted in the affirmative. The Chair recognizes Councilwoman Blackwell regarding Bill No. 010334.
Madam President, I move that Bill No. 010334 be --
I'm sorry, Councilwoman. We have to vote on the amendment first.
I move that the amendment to Bill 010334 be approved. (Duly seconded.) 57 5/30/01 - WHOLE - PUBLIC MEETING
It has been moved and seconded that the amendment as submitted by Mr. Longstreth be approved. All those in favor will signify by saying aye. Those opposed? The ayes have it and the amendment has been adopted. The Chair recognizes Councilwoman Blackwell.
Thank you, Madam President. I move that Bill 010334, as amended, be reported out of committee with a favorable recommendation and also a recommendation that the rules be suspended so as to permit consideration at our next session of Council. (Duly seconded.)
It has been moved and second that Bill No. 010334 be reported out of committee, as amended, and also a recommendation that the rules of Council be suspended so as to permit first reading at our next Council session. All those in favor will signify by 58 5/30/01 - WHOLE - PUBLIC MEETING saying aye. Those opposed?
The record will indicate that Councilmembers Cohen and Ortiz abstained. All other Councilmembers have voted in the affirmative. This concludes our public meeting. Thank you all for your patience. I urge all members to go directly into the caucus room so that we can all attend the briefing. Thank you. (Adjourned 6:50 p.m.) 59 C E R T I F I C A T E I HEREBY CERTIFY that the foregoing proceedings of the Council of the City of Philadelphia of Wednesday, May 30, 2001, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COUNCIL COMMITTEE OF THE WHOLE BILL NO.'S 010331, 010332, 010333, 010334 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter