37 million. I think that's right -- no, wait a minute, no. 13
Yeah. I have all the data here but it's not assembled the way you're asking the question.
I apologize for that. But this is out of the loan pool -- what I just gave you is out of the loan pool.
So it's out of the loan pool, 37 million. There's also -- we've settled the Hawthorne Suites in the Loews Hotel. That's roughly another million. 7 We're working to settle four others 8 there and then six more are on the pipeline that 9 have been approved and haven't settled. 10
If you gave me a day, I 12 could assemble it the way you're asking the question.
Through the Chair every HUD 108 loan that is -- you're terminology is "settled." I'd like to know about them. They may not be settled, but they've been designated, right?
So the general assumption is that most of these, if they've been designated, they're going to settle.
That's right. 1497 2/23/99 - WHOLE COMM. - Budget - 990023
So from the start of the administration and the HUD 108 Loan Program, I'd like to know every loan that's been made, who it's been made to, what the project is, jobs, all the other information that goes with that. Now, is there a cap on the total dollar amount of 108 loans you can grant?
343. And what would you say off the top of your head -- how close are we to the 343 million cap?
In response to the Council President's question, I walked through what's approved, what's submitted, and what we think is going to happen in the upcoming Community Development Block Grant project, which I don't think you have yet. But in talking with OHCD, what they're thinking they're doing with housing, if all that happens, as laid out, by the end of year 25 of the 1498 2/23/99 - WHOLE COMM. - Budget - 990023 CDBG program, which would be, I guess, July 2000, all their capacity would be used.
Your testimony is that by July of next year, we will have no HUD 108 loan capacity.
We will have -- I want to be very precise. We will have borrowed from the federal government or that total number. There will still be money in the loan pools to loan out for transactions; all that won't have been committed.
Well, you're making a distinction, I guess, here today with which I AM apparently somewhat unfamiliar. What is the difference between the loan pool that you continue to talk about, which sounds like individual businesses getting loans, and how is that different from Hawthorne Suites, any one of the TIFs that we've done? I mean, don't we have a HUD 108 loan in the Kvaerner project?
I'll try to do it 1499 2/23/99 - WHOLE COMM. - Budget - 990023 briefly, but I may not be able to do it completely briefly. The HUD 108 Program has been used in one of three ways in Philadelphia, three generic ways. One is for housing projects. I mean I think 70 -- almost 79 million to date in housing projects, and there's about million in the 9 pipeline that OHCD has worked on. So housing is 10 one generic category. 11 A second is -- Hawthorne Suites is 12 probably a very typical example -- a single 13 transaction where we apply to the federal 14 government, get an approval, take the money, loan 15 it to the project. So it's approved by project by 16 the federal government. We, in our jargon, call 17 those "stand-alones." In other words, they stand 18 individually transactionally. 19 The third generic category is -- and I 20 believe this remains the case -- we're the only 21 city in the country that they had to approve a 22 program where we could actually draw the money 23 down from HUD, have it in Philadelphia, have negotiated lending criteria with HUD, and be able to loan it as a company comes in. Asia Food is an 1500 2/23/99 - WHOLE COMM. - Budget - 990023 example up on American Street. So there's a transaction, we can look at it and say it meets the lending criteria that we -- the underwriting criteria that we have with HUD, and we can loan it into the transaction. We do not go back to HUD for approval.
To date, we have borrowed 50 million from HUD for the loan pool.
And that first number I gave you when you began questioning was the 12, have come out of the pool.
-- of the 50 1501 2/23/99 - WHOLE COMM. - Budget - 990023 million.
Right. There's a 7 pipeline, which I'm happy to share, and the report 8 will provide you of what's in the pipeline. And 9 you have -- 10
-- just for accuracy? And we also have an application at HUD for another, quote/unquote, round of money to go into the loan pool. And I'll show that in a report, too.
All right. Let's go back to -- the cap is $343 million.
It is a statutory 1502 2/23/99 - WHOLE COMM. - Budget - 990023 provision that you take five times a community's annual Community Development Block Grant allocation. And whatever that math is -- in Philadelphia's case, it's this number -- is your cap of how much you can have outstanding in HUD 108 borrowing at any one point in time.
Of which you've set aside $50 million as a loan pool amount.
To go to different businesses. And the remaining $293 million just goes into projects?
Well, 79 million is 1503 2/23/99 - WHOLE COMM. - Budget - 990023 going into housing projects. Another 82 million has gone into projects. And then -- and that's in terms of projects that HUD has approved. Again, in a report, we'd be happy to provide you. We can show you applications submitted and applications being worked on.
Again, I walked through these and I'd be happy to do it again. HUD has approved 214 million in applications we've submitted from Philadelphia, 214 million. Now, 82 million are these individual transactions, 50 million's the pool, 79 million is housing, and there's a small 3.9 million that goes to that first round of 108s that was done in the early '80s. So they stay on the books until they're paid off. There's $85 million in applications currently pending at HUD that have been submitted but have not been approved. 1504 2/23/99 - WHOLE COMM. - Budget - 990023
Well. . . I mean, this is not too high a math here. But there's $214 million in applications -- you said submitted or approved?
All right. Now, you've not a statutory limit of times what your 4 CDBG allocation is. 5
-- you anticipate in hand and allocated and in the pipeline intended to be allocated, we will be at the statutory cap. Is that your testimony?
That's right. And I want to be -- 'cause I'm -- I don't -- that's also based on information I've received from the Office of Housing and Community Development.
Let's say you're very close. 1506 2/23/99 - WHOLE COMM. - Budget - 990023
So in the past 4 years, you have run potentially right up -- it 5 will be 7.58, you will have run right up to the 6 line of the cap. What do we do after that? 7
As I said, there will still be funding in the pool. Again, I hope I'm not making a mistake. I'm not trying to be bureaucratic, but there'll be money in the pool for individual transactions that come along.
And there will be -- in effect, as loans are paid off or projects are paid off, you'll recreate capacity, if you think of it as a borrowing limit or, you know, like a debt ceiling for bonds.
As it gets paid down, we could go back and put something back under it. In fact, loans are being paid off now. So, again, when Madam Chair asked, I took a snapshot on February 1st.
To pick any date, it 1507 2/23/99 - WHOLE COMM. - Budget - 990023 will be slightly different as we retire some loans.
Well, as you give information back to the Chair, then why don't -- I think then what I would like to see is a schedule that lays out in a post-June 30, 2000 environment, say, for the next years, what the yearly 9 repayments are from the previously issued loans 10 and how much will then be in the pool and available to be re-lent.
Okay. We can do that. But, you know, it will be somewhat projecting.
Right, I understand. I mean, I'd just like to have a sense of -- I mean, you know, in its hey day, maybe, you know, two or three years ago, while there are always more projects than there is money available, it's nice to know that you have a large chunk of cash that you can put into projects. And your testimony here today is essentially those days are over.
And they will be 1508 2/23/99 - WHOLE COMM. - Budget - 990023 much smaller in comparison --
-- to dollars available for these kinds of projects going forward because there's been tremendous activity over the past three, four years.
That's right, you're exactly right. Doing another $20 million loan would be extremely difficult; doing another or may not be on an order of magnitude. That's right.
You might be able to do a 20, but that's the only one you're going to do.
All right, okay. Thank you, Madam Chair. I do have another question but I do know that my time expired about five minutes ago.
Thank you. The Chair recognizes Councilman Ortiz.
Thank you, Madam Chair. Director, in terms of the Empowerment 1509 2/23/99 - WHOLE COMM. - Budget - 990023 Zone, the stories that in terms of investment and buying up properties that have come out of the Daily News, what are the systems in place to be able to check whether the taxpayers' money is being invested wisely in terms of monies being spent?
Basic systems that we have in place, there are normal procedures, you know, for acquiring property -- more often than not to go through either the Redevelopment Authority or PIDC or sometimes PCDC, just --
Why was there not appraisals and the usual things that take place when you're buying real estate in this case?
Right. I don't know. We are looking to find out exactly what happened with those transactions.
Shouldn't that be a matter of concern that we're spending taxpayers' money, and the process that a run-of-the-mill real 1510 2/23/99 - WHOLE COMM. - Budget - 990023 estate person takes to check market value or appraise the properties and so on before they enter into negotiations and business, we're not taking.
I think you're question was, Shouldn't that be? and my answer is yes. And that is, we're looking into --
That leads to, what are we doing with the other investments in terms of the Empowerment Zone? And I'd like to begin looking further into that, and I would like to see how much money has been sent, the process of expenditures, how many jobs have been created. Because this is -- obviously, the Empowerment Zone is about creation of jobs and the loans that have been given, the grants that have been given through the Empowerment Zone. And get that to the President.
Yes. And I'll note that's both on specific projects as well as the loan programs from the financial institutions that were set up.
And they are all three now 1511 2/23/99 - WHOLE COMM. - Budget - 990023 in the three subzones, they are all three now actively engaged. Just one year ago, we still weren't -- at least one of the three zones still did not have its financial institution -- Community Bank, essentially -- up and lending, but now we do, and we can provide that information for both direct out of the Zone as well as through the financial partnership.
Yeah, the contracts that have been given from the Zone and so on. Before the budget process is over, I really would you like to have a full discussion and -- because -- and if you can get those materials so that when we have the discussion, the Council people here can have a sense of what we're talking about. Because right now, we get more information from the newspaper than we get from the Administration in terms of the Empowerment Zone. I don't know about you, Madam Chair, but I get absolutely nothing in terms of how this money is being spent and whether it's being used properly. All right?
Yes, we will provide that 1512 2/23/99 - WHOLE COMM. - Budget - 990023 information.
As we all know, today is PAL Day, and Martina Nash, who is 17, is the President of City Council today. She is a five-year member of the Ford PAL Center at Seventh and Snyder Avenue and also attends -- she is a senior at Bok Vocational. We certainly welcome you here today. And at this point, I will recognize Councilman Rizzo. And I will relinquish my chair to Ms. Nash for just a few minutes.
Madam President could I have an extra minute? (Laughter.)
Thank you. Welcome. My question to Mr. Mullin is the entertainment center that currently is having some problems on the 1500 block of Cecil B. Moore. Last fall, an oversight committee was made up of Administration officials and was formed in an 1513 2/23/99 - WHOLE COMM. - Budget - 990023 effort to get the project back on track. Could you bring us up to speed on what went wrong and what we're doing to hopefully restart such a very important project that apparently got off to a very bad start?
Perhaps I could -- if I may summarize where -- I think where we found that it went off on the wrong -- sort of in the wrong direction. And where we think it went off in the wrong direction were basically costs associated with some change orders in the project as they were developing and changing the project during the course of its initial construction; the most significant of those being a desire to add a basement to the facility that would allow space for day care and connect with the rest of the facility. The conditions and -- it flooded, and it basically ended up where there were significant cost overruns. At that point -- at that point, that's when we got together and called all the parties together said, Okay, what's going on here, let's take a look at what options do we have for the future given what we've already put in, what our 1514 2/23/99 - WHOLE COMM. - Budget - 990023 potential tenants are going to be. About that same time, we found out that we couldn't use the word Billy -- and I'm using royal "we" here, but we couldn't use the name "Billie Holiday." And then that original idea of the center changed into now a restaurant-nightclub with offices above. We looked at a variety of possible alternatives there, including a one-story building, a slab-on-grade continuing. And we decided that the best possible direction would be to continue -- to scale the building down slightly but keep it a multistory building. And we are working out now with the construction company and construction management -- new construction management exactly what are the costs and the timetable for that.
Did you or the developer hire the construction manager from Baltimore?
I think the developer and the Empowerment Zone actually hired, but it was through the oversight group that was set up to identify them, I believe.
We made an effort to 1515 2/23/99 - WHOLE COMM. - Budget - 990023 try to find someone local?
I don't know -- I don't know all of the details on that. My strong guess is that yes, we did take a look locally. I'll have to find out. There were some specific -- the Baltimore construction management company had some specific workings in this type of building and in this type of project.
Has the committee concluded its internal audit of the expenditures at this point?
I think they have. There's not been a final audit, but they're wrapping things up, yes.
Okay. And according to a media report, it indicates that the project should soon restart?
We're hoping that it will restart very soon. I can't say whether that's in the next month or so, but I hope it will begin this spring, or restart this spring.
My final question is in reference to the Airport, Mr. Isdell. Could 1516 2/23/99 - WHOLE COMM. - Budget - 990023 you explain briefly to me the police that are assigned to the Philadelphia International Airport, the police officers. Are they completely funded by the Aviation Fund? Do the airlines pay the entire tab for the Philadelphia police that are assigned to the Philadelphia International Airport?
Yes. I believe that that includes personnel cost, employee benefits, vehicles. I would assume that they get some support from the Central Police Headquarters downtown. But for the most part, our entire police contingent is budgeted through the Aviation Fund. Let me just double-check. (Mr. Isdell confers with someone off mike.)
So I was actually wrong. We actually reimburse Police Headquarters for central service costs in addition to the on-site staff.
Do you know how many 1517 2/23/99 - WHOLE COMM. - Budget - 990023 police officers are assigned to the Philadelphia International Airport total? Because that's a number that we need to subtract pretty much out when we talk about how many police officers that we have in the City. How many police officers, without revealing -- I'm not talking about undercover -- approximately how many officers?
We have 116 budgeted positions, and they are kept filled almost 100 percent of the year, we try to keep them filled.
So when we talk about 6800 police officers, we should factor out that number of police officers that are committed to the Airport, they stay at the Airport. If there's a parade, the airlines don't want their officers that they're paying for to go to the St. Patrick's Day parade. So I would assume that those -- you say 168 officers.
That those 116 officers are assigned to the Airport and aren't pulled away. 1518 2/23/99 - WHOLE COMM. - Budget - 990023
Yes. I'm sorry, the very last thing you said, Councilman? I thought --
Those officers are not reassigned. If there's a parade,, they don't pull officers from the Airport to cover a 7 parade. My point is, if the airlines are paying 8 for them, they expect them to be there. 9
That's correct. And if 10 there were a rare occasion where an Airport police officer were pulled to do duty in a different part of the City, that would not paid for by the Aviation Fund; that would have to be paid for by the General Fund. I'm not aware of any situation where that's happened in the last five years or so.
When a police officer has to work overtime, is summoned to court, does the airlines also pay for that?
So there's no 22 expense for the police officers, 116, from the taxpayers; it's all funded through the Airport.
Right. There's no expense to the General Fund whatsoever. 1519 2/23/99 - WHOLE COMM. - Budget - 990023
With the expansion at the Airport and the terminals and all the facilities, have we added any police, have any police been taken? Has that number increased in the last year or two?
It's really held pretty steady, and I would say that's a credit to our captain, Captain John MacArthur and the management of the available resources. We have done some creative things such as, you know, acquisition of carts and vehicles that enable them to be more mobile. But we have not done any increased staffing over the past four or five years.
May I take this opportunity to introduce the new Acting Director a of Aviation, Lorenzo Jackson, who's to my right, and he's a student at Central High School, 15 years old, a junior-varsity basketball player, and I believe he's participated in AIDS walks and other events at Central High School. And welcome.
Nice to see you. (Lorenzo Jackson stands for 1520 2/23/99 - WHOLE COMM. - Budget - 990023 recognition.) (Applause.)
Thank you, Madam Chair. MISS NASH: You're welcome. The Councilman recognizes -- oh, the Chair recognizes Councilman Nutter.
She's a very quick study, Madam President, yes. She'll probably cut me off when the buzzer goes off, too. Mr. Mullin, I'd like to talk about. . . some time ago, there was a meeting with the Roxborough Business Association to talk about a business marketing study for Ridge Avenue. Is it my understanding that there's funding available for these types of studies from time to time that have been performed in other neighborhoods across the City?
Yes, under our -- what 1521 2/23/99 - WHOLE COMM. - Budget - 990023 I've been referring to as our "Expanded Commercial Corridor Program."
Okay. And is it a particularly exhaustive process to go through to get funding for one of these market studies?
There shouldn't be. There was an exhaustive process that preceded our actually setting up the program itself, but there shouldn't be an exhaustive process in identifying -- in proposing projects like that and getting our funding or requests that the proposing entity go back and find some matching funds or restructure things.
Well, could you put some time and attention toward figuring out how I could get grant funding for a market study for the Roxborough Business Association and the Ridge Avenue corridor? It is a corridor that is stable but needs some support. And given the host of other things that we are able to find funding for, there's no reason why we should not be able to support this particular effort. Ridge Avenue is a commercial corridor surrounded by a whole lot of residential and 1522 2/23/99 - WHOLE COMM. - Budget - 990023 potential customers. We're trying to upgrade the area, but having a business marketing study would be very helpful. I'd like to try to get that done as soon as possible and no later than the spring.
I'd be happy to do that. In fact, I'm a bit surprised. If you had asked me that in the hallway or here officially, my first response would have been, "I thought we had already processed and approved that," so I will double-check.
Well, I appreciate the quick approval. If you could share that with the folks that need to get the money to them, I'd appreciate that as well.
All right, thank you. Madam Chair, I return my time. I don't know who you'd like to allocate it to.
Thank you. Thank you, Madam Chair. I understand, Mr. Mullin and Mr. 1523 2/23/99 - WHOLE COMM. - Budget - 990023 Isdell, you mentioned the Economic Stimulus Fund in the Section 108 and that you'll get us a listing. I am also interested in the detail about the Commercial Revitalization Program and Facade Improvement in the Small Business Revolving Loan as it affects my district. If I could have that.
Also, I'm interested in the Mortgage Loan Neighborhood Development Fund. So those are my areas of interest.
Such as they affect my area. As you know, we've started a West Philadelphia on the Move initiative. We've established a corporation, and we need all the information that we can because 52nd Street and 60th Street are our anchors.
And this third issue that I would like to mention, we mentioned the other day that we were concerned about the Paul Robeson House being mainstreamed for the City. They are one of the newest agencies. They 1524 2/23/99 - WHOLE COMM. - Budget - 990023 have their marker outside. They're still fighting for funding, and they need to be put on the register as one of the sites for our city, the main sites. Also, I met with Belmont Mansion and Audrey Johnson-Thornton. And she is concerned about the yearly threat that they may have to move. And, you know, Belmont Mansion's done a lot in recent years, but they're still always threatened every year that they may have to move, and other related issues, which relate to the parks in our city, and we want to get past that. And, finally, the Freedom Theater. I don't know whether there's some funding issues involved that we hope are resolved, and we would appreciate it if you would check into those cultural institutions for us.
The Chair recognizes Councilman Rizzo. 1525 2/23/99 - WHOLE COMM. - Budget - 990023
Mr. Mullin, I'd like to go back to the Entertainment Center. I neglected to ask a question, that I need to help compose a response to a letter that I received. The nightclub. There supposedly was going to be a nightclub in the basement. I heard you mention a day care center. I understood that the basement was going to accommodate nightclub. This is a nonprofit. Could you explain to me how a nightclub fits into the mix of things as it pertains to that facility? Who is going to operate it? Is the nonprofit going to operate a nightclub?
I think the original idea was to have that as a Billie Holiday Center, which would include a nightclub and be part of development on both sides of the street there, that it would sort of resurrect a jazz and music theme and a potential for a radio station in the building, so I think it was a part of the overall theme. I can certainly find out and I will find out who was envisioned to be the management, but I don't believe that it was supposed to be 1526 2/23/99 - WHOLE COMM. - Budget - 990023 managed by the City agencies or the Empowerment Zone. I don't believe that. But I'm not exactly sure.
We expect to spend $3.4 million, maybe close to $4 million to build this facility? Thirty jobs, is that kind of a little out of kilter?
It's a little -- well, it depends on which kilter, and I think those numbers -- we don't know what the final numbers are but I think those are definitely in the order of magnitude that it will be. It is a particular type of development that really is -- we're hoping, that this will spur development along the rest of the lock and continue the development, both in the beach interplex and the Jump Street further to the east. So we're hoping that this is not just a stand-alone 30 jobs but instead, a part of the redevelopment of the entire avenue for several blocks there.
So is it safe for me to understand that normally, you would hope to 1527 2/23/99 - WHOLE COMM. - Budget - 990023 employ more than 30 people for an investment of $3.5 million?
For our loan programs, for example, we usually have a number of how much will we lend during our grant programs per job, and they can be -- for various programs, they can be $25,000 per job, $50,000 per job, on that order of magnitude -- and in some special cases, a little bit more. This one, partly because of the cost overruns, when you divide the total project cost by the number of jobs, it will be higher definitely than our average. But we're hoping again that part of the benefits will not be just at that particular site but for helping spurring redevelopment on all sides of the site.