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Minutes

Committee Hearing, March 13, 2006

Philadelphia City Council Committee HearingsMar 13, 2006

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COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON RULES - - - Room 400, City Hall Philadelphia, Pennsylvania Monday, March 13, 2006, 10:25 a.m. - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILMAN DARRELL CLARKE COUNCILMAN JAMES KENNEY COUNCILWOMAN DONNA REED MILLER COUNCILMAN BRIAN O'NEILL COUNCILWOMAN BLONDELL REYNOLDS-BROWN Bills 060043, 060044, 060054, 060055, 060107, 060116 and 060117 V A R A L L O Incorporated Litigation Support Specialists 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2

Council President Verna

Good morning, everyone. This is a public hearing of the Committee on Rules. And I would ask Mr. McPherson to please read the title of Bill No. 060054.

The Clerk

Bill No. 060054: An ordinance amending Section 14-1624 of The Philadelphia Code entitled "North Delaware Avenue Special District Controls," by changing the district boundaries to the area generally bounded by the south street line of Spring Garden Street on the south, the west bank of the Delaware River on the east, the north street side of Lehigh Avenue on the north, and the east street line of 5th Street on the west.

Council President Verna

Mr. Kramer, before I recognize you, I would ask if there are copies of the testimony. Do we have copies of your testimony, Mr. Kramer?

Council President Verna

Very 3 Committee on Rules - 3/13/06 well. Please identify yourself for the record and proceed with your testimony.

Mr. Kramer

Good morning, Madam President and members of the Rules Committee. My name is William Kramer. I am the senior zoning planner for the development planning division of the City Planning Commission. I am here to testify on Bill 060054. Bill 060054 was introduced by Councilmember DiCicco February 2 of 2006. This bill amends Section 14-1624 of the zoning code by amending the boundaries of the North Delaware Special District Controls. Under the provisions of the bill, controls would cover an area bounded by the north street line of Spring Garden Street on the south, the west bank of the Delaware River on the east, the south street line of Lehigh Avenue on the north, and the east street line of 5th Street on the west. This is being done in order to remove an overlap of zoning overlays created with the passage of Bill 4 Committee on Rules - 3/13/06 051200, which extended the area of the Old City Residential Special District Controls. Bill 060054 changes the boundary of the North Delaware Special Control District by moving the southerly boundary northward from Vine Street to Spring Garden Street and extended the westerly boundary from Frankford Avenue to 5th Street. The Planning Commission at its meeting of February 16, 2006, considered this bill and recommended that Bill 14 060054 be amended to reflect no extension of the already existing North Delaware Special District Controls. The Planning Commission believed that the area between 5th Street, Girard Avenue, Frankford Avenue, and Lehigh Avenue would be economically harmed if these controls were to be extended into this area. An amendment indicating this change has been drafted and I submit it to Council for your approval. The amendment would change the boundaries to be as follows: 5 Committee on Rules - 3/13/06 The north street line of Spring Garden on the south, the west bank of the Delaware River on the east, the south street line of Lehigh Avenue on the north, and the east street line of Frankford Avenue, the north street line of Girard Avenue, and east street line of 5th Street on the west. With this amendment, the Planning Commission recommended that Bill 060054 be approved. I would be happy to answer any questions of the committee.

Council President Verna

Thank you, Mr. Kramer. You stated that if the proposed boundaries were expanded to include the area between 5th Street, Girard Avenue, Frankford Avenue, and Lehigh Avenue, economic harm would occur because of the controls imposed by being included within the district. Would you please explain for the record what this harm would be and who and how many properties or individuals might be harmed?

Mr. Kramer

I can't answer the 6 Committee on Rules - 3/13/06 second part of that. I don't have enough information to tell you an exact number. Testimony at the Planning Commission meeting essentially came from the commerce department as well as other members of the Commission wherein the concern was by placing the controls, which these controls limit takeout restaurants, restaurants, nightclubs, and make a lot of those type of uses go to the Zoning Board of Adjustment, it was concerned that what would happen is a lot of these uses would then simply move out of the area of the overlay. And they did not feel that there was enough economic -- enough of an economic engine to sustain that. And that was coming from Commission members.

Council President Verna

Thank you. Are there any questions from members of the committee?

Councilman Kenney

Yeah, I do.

Council President Verna

The Chair recognizes Councilman Kenney. 7 Committee on Rules - 3/13/06

Councilman Kenney

Thank you. Would this only affect businesses going forward or existing businesses?

Mr. Kramer

It would affect businesses going forward, but the portion of the bill that also prohibits extensions and expansions.

Councilman Kenney

So there was a concern that businesses would move out even though they weren't affected?

Mr. Kramer

There was some concern. It was not necessarily our staff concern, but it was a concern of members of the Commission.

Councilman Kenney

Thank you.

Council President Verna

Thank you. Any other questions or comments from members of the committee? (No response.)

Council President Verna

Do we have anyone else to testify on this bill? (No response.) 8 Committee on Rules - 3/13/06

Council President Verna

Seeing none, before we read the next bill, I would like the record to reflect that we do, in fact, have a quorum. To my extreme left is Councilwoman Miller. Next to Councilwoman Miller is Councilman Clarke. To my extreme left is Councilwoman Brown and Councilman Kenney. I would ask Mr. McPherson to please read the title of Bill No. 060055.

The Clerk

Bill NO. 060055: An ordinance amending Bill No. 040369, which became law June 21, 2004, as amended entitled An ordinance amending Chapter 14-1600 of The Philadelphia Code entitled 'Miscellaneous,' by adding a new section prohibiting the demolition of buildings or other structures located within an area.

Mr. Kramer

Good morning, Madam President, members of the Rules Committee. I am senior zoning planner in the development planning division of the City Planning Commission. I am here to 9 Committee on Rules - 3/13/06 testify on Bill 060055, which was introduced by Councilmember DiCicco February 2 of 2006. This bill is amending Bill 040369 so that the provisions prohibiting the demolition of buildings or other structures located in an area bounded by Locust Street, 5th Street, Washington Avenue, and the Delaware River would not expire until June 30, 2006. The purpose of this bill 12 is to allow representatives of the Queen Village neighborhood and the Planning Commission to complete the provisions of a neighborhood conservation district for this area. Proposals and discussions have been ongoing and a culmination of the process in an ordinance creating a neighborhood conservation district is expected in the foreseeable future. The Planning Commission staff believes it is appropriate to continue the demolition prohibition to allow for the creation of this zoning district. I would be happy to answer any questions of the committee. 10 Committee on Rules - 3/13/06

Council President Verna

Thank you. Mr. Kramer, will anyone be adversely affected by this prohibition? And, if so, who and to who extent?

Mr. Kramer

I don't have -- I don't believe that there's anyone currently I'm aware of that would be negatively impacted. I believe the prohibition does not apply if it's imminently dangerous, so subsequently it would not provide an instant problem for anyone or shouldn't.

Council President Verna

And this would extend to June 30?

Mr. Kramer

June 30, yes, ma'am.

Council President Verna

Of this year?

Mr. Kramer

Yes, ma'am.

Council President Verna

Any questions from members of the committee? (No response.)

Council President Verna

Do we have anyone else to testify on this bill? 11 Committee on Rules - 3/13/06 (No response.) COUNCILMAN DiCICCO: Madam Chair, if I may, I would ask for a suspension on both bills. And thank you for hearing those bills first.

Council President Verna

We'll certainly consider it. Thank you. COUNCILMAN DiCICCO: Thank you.

Council President Verna

I would ask Mr. McPherson to please read the title of Bill No. 060043.

The Clerk

Bill No. 060043: An ordinance approving the fourth amendment of the redevelopment proposal for the 45th and Sansom Urban Renewal Area.

Council President Verna

Good morning. Please identify yourself for the record and proceed with your testimony.

Mr. Wetzel

Good morning. My name is Herbert Wetzel. I'm executive director of the Redevelopment Authority of the City of Philadelphia. Madam 12 Committee on Rules - 3/13/06 Chairperson and members of the committee, I'm here to speak in support of Bill No. 4 060043, which is the fourth amendment to the redevelopment proposal and urban renewal plan for the 45th and Sansom Redevelopment Area and the 45th and Sansom Urban Renewal Area. This bill 9 would authorize the Redevelopment Authority to acquire two vacant structures for future development as part of the neighborhood transportation initiatives. No families or individuals will be displaced or relocated as part of this development plan. Madam Chairperson and members of the committee, I respectfully request favorable consideration of Bill No. 060043 and would ask for the suspension of Council rules to allow a first reading on March 16, 2006.

Council President Verna

Thank you. (Inaudible.)

Council President Verna

I'm 13 Committee on Rules - 3/13/06 sorry. I didn't realize --

Mr. Wetzel

Are you asking for the budget?

Council President Verna

What amount?

Mr. Wetzel

The budget for this is $161,400.

Council President Verna

I'm sorry. 164?

Mr. Wetzel

161,400.

Council President Verna

Is there a developer for these properties? If so, what is the projected cost for the development?

Mr. Wetzel

Madam Chairperson, Partnership CDC, we've been working with them for a number of years and they are the intended developer but not -- we're not obligated to convey to anyone as a result of this, but we've been working with Partnership CDC. We've acquired additional properties around here. The one property on Sansom Street is a stand-alone and it's an area where 14 Committee on Rules - 3/13/06 there's been some significant subsidence and the City has had to demolish in that area. So we're just assembling parcels. They have not finalized their entire project plan at this point in time.

Council President Verna

Is the development of these two properties part of a more widespread development project? If so, would you please elaborate?

Mr. Wetzel

I'd like to ask a member of Partnership CDC to come forward who can give you more details on what their plans are for this particular area.

Council President Verna

That would be fine. Thank you. Good morning. Please identify yourself for the record and proceed with your testimony.

Mr. Johns

My name is Rob Johns. I'm the housing director for the Partnership CDC. I have some prepared testimony which may answer some of your questions. 15 Committee on Rules - 3/13/06

Council President Verna

All right. I think that was just given to us. I don't know whether you have to read it. We'll give a copy of it to the stenographer. It will be transcribed in full. And may I suggest you simply abbreviate, please. Thank you.

Mr. Johns

Sure. I think the question that brought me up here was is this part of a larger project, and it certainly is. In September of 2004, we acquired properties for redevelopment 14 on the 4500 block of Sansom Street and 15 have been working with the RDA to 16 assemble a phase 2 package that would 17 total 18 properties. These are the final 18 two pieces of that 18-property package. 19 Everything else has either been acquired by the RDA or has been approved by Council and is in the process of acquisition. You were concerned about a budget. At this point we are waiting for appraisals to come back which will tell 16 Committee on Rules - 3/13/06 us what the cost of the project is going to be, at which point we can turn around and produce a budget. So we don't have really even a meaningful budget because the appraisal is such an important part of the cost. But this is a market rate project and we have paid for the properties at market rate. Depending on the value of the property, I think in total for phase 1 we paid $374,000 for the 19 properties and would expect to pay something related. (Inaudible.)

Mr. Johns

No. It's being done by using NTI funds but conveying to the Partnership CDC at fair market value and then those funds go back into the NTI pot.

Council President Verna

Any questions or comments from members of the committee? (No response.)

Council President Verna

Seeing none, I thank you, Mr. Johns. 17 Committee on Rules - 3/13/06

Mr. Johns

You're welcome.

Council President Verna

Good morning. Please identify yourself for the record and proceed with your testimony.

Mr. Bowser

Yes, good morning. My name is Ortellin Bowser. I'm here on behalf of the Samaritans, Incorporated. We are the owners of the property, one of the properties they're speaking of, the only existing standing structure. The only other property that's existing is a vacant land, a vacant lot that I guess someone else has possession of. We have been going through this with the Partnership CDC going on now almost two years. We are the outright owners of the property. We bought the property actually and acquired the property at sheriff sale, you know, through all ordinary processes. And our company, our organization is we are a development corporation ourselves. What we do is we provide housing for women that are coming 18 Committee on Rules - 3/13/06 out of shelters and, you know, domestic abuse situations. In 2005, we had plans to shore the property as well as to develop the property ourselves for affordable housing, but because of the legal battle that we incurred with the Partnership CDC, all of our funds were exhausted for rehabbing the property. I have a letter here from our legal counsel that was copied as well to Blaine Stoddard and Mr. Johns where their legal representation made us an offer for our property and wanted to negotiate with us to basically, you know -- for us to sell the property. They tried to -- once that didn't work, then they tried to take us through license and inspection. Then they tried to basically say that the property was imminently dangerous through the board of standards. We hired a structural engineer to prove and verify that the property wasn't imminently dangerous. Like I said, we have been fighting this battle to retain our 19 Committee on Rules - 3/13/06 property and develop our property ourselves, not for them to acquire it, you know, at a very low market value for them to turn around and develop it themselves.

Council President Verna

Do you mind reading your attorney's letter for the record, please?

Council President Verna

And to whom is it addressed and when?

Mr. Bowser

Okay. Here it is. Regarding the Partnership CDC versus Ortellin Bowser/Samaritans, Incorporated, Philly CCP, January Term 2005, Docket 3442, Dear Attorney Lipsky, pursuant to our conversation today, I am enclosing the praecipe to settle, discontinue, and withdraw the above-captioned litigation. Principals of my client would like to discuss with representatives of your client a possible business accommodation regarding the parties' respective properties on the block of Sansom Street, 20 Committee on Rules - 3/13/06 including the possible purchase. In light not just of their common proximity but because of the subsidence geologic issues all these parties face in common, I and they would appreciate if your principals of your client would either call Blaine Stoddard or Robert Johns at 215-662-1612 to discuss this and other matters relating to the Sansom Street properties. Thank you for your efforts in arranging for such discussions. Very truly yours, ReedSmith LLP, Ira S. Lefton, Attorney Ira S. Lefton.

Council President Verna

You indicated that you acquired this property at sheriff's sale. When did you acquire it?

Mr. Bowser

We acquired the property I believe it's in '04, ma'am, sometime in '04. I don't have the exact date in front of me, but it was in early '04, 2004. Actually, I'm sorry. The property, ma'am, was acquired in '03. My apologies. September of '03. 21 Committee on Rules - 3/13/06

Council President Verna

Mr. Wetzel, did you indicate how many properties you're trying to acquire on this block?

Mr. Wetzel

Two. One on this block. We've previously acquired others.

Council President Verna

So is it this property and a lot or are there two standing properties?

Mr. Wetzel

There's one standing property my understanding facing Sansom Street.

Mr. Johns

It's actually facing 45th.

Mr. Wetzel

Okay. I'm wrong.

Council President Verna

And the other is a lot?

Mr. Wetzel

No. The other one is a vacant structure as well.

Council President Verna

But the property this gentleman's referring to is occupied, is it not? Is your property occupied, sir?

Mr. Bowser

At this present 22 Committee on Rules - 3/13/06 time, ma'am, we actually had someone that was living in there. Actually, that was a person that was squatting in the property. And we, you know, allowed the person to inhibit the property through the winter months as we were actually planning to rehab the property.

Council President Verna

So you haven't done any rehab at all on the property?

Mr. Bowser

Yes, we have, ma'am. Yes, we have. We have receipts and everything. We had to basically shore the property. We structurally made the property secure. We secured the property as well as gated the property off and boarded the property up. Basically, like I said, our entire budget was exhausted fighting the legal battle for this. So, yes, we did make --

Council President Verna

What were the legal fees that you paid?

Mr. Bowser

We incurred legal fees upwards over $20,000, you know, to 23 Committee on Rules - 3/13/06 just fight the battle.

Council President Verna

Over what period?

Mr. Bowser

It was over a year and a half.

Council President Verna

The Chair recognizes Councilman Clarke.

Councilman Clarke

Thank you, Madam Chair. You say you have an individual living in the property?

Mr. Bowser

Well, again, we weren't aware. Like I said, we were basically slighting the property. We sealed the property up. And in the process of getting the property prepared to, you know, rehab the property, someone else basically was able to -- they were already living in the property before.

Councilman Clarke

Squatting?

Mr. Bowser

Yes, they were squatting in the property. So once they got out of the property, basically that person just said, listen, I've been here 24 Committee on Rules - 3/13/06 whatever the case may be, you know, for a little while, you know, could I just stay here through the winter months. And basically we agreed.

Councilman Clarke

So is the building up to code? Is the property up to code?

Mr. Bowser

Yes, the building is up to code. We have no L and I violations or anything.

Councilman Clarke

So you have a certificate of occupancy?

Mr. Bowser

Again, there's no 15 one living in the building at the present time.

Councilman Clarke

When the Council President asked you the question was it occupied, you said yes. You gave us the impression -- there's a difference in condemnation for an occupied property versus a vacant property because we take very seriously having to relocate individuals from a property. But if it's a vacant property, there's a different 25 Committee on Rules - 3/13/06 level of standard as it relates to the decision-making process. So the property is vacant?

Mr. Bowser

Again, that's what I'm saying. The property was vacant in respect to, you know, in our possession, but, again, there was someone that was able to gain access into the property and, you know, they were squatting there. We were aware of that. As to this point in time as to whether or not someone's there right now today, again, that's anyone's guess.

Councilman Clarke

Okay. Thank you, Madam Chair.

Council President Verna

I would like the record to reflect that Councilman O'Neill has joined the committee. Councilwoman Blackwell, did you want to add anything to this testimony?

Councilwoman Blackwell

We've been supporting the Partnership CDC in this regard. We've been working with the Committee on Rules - 3/13/06 Redevelopment Authority. I just heard Friday that somebody would come up with some other agenda, but we've been working with Herb Wetzel. As all of you know, Lisa Sneed is now director of the Partnership and we met Friday and this issue came up. So I have no idea, frankly. I don't know this gentleman. I have no idea what he's talking about. I know we've been working with RDA for some time with regard to these two properties and we would like to move ahead as scheduled to get this project -- this is part of an urban renewal area. I mean, I'm always happy to meet with the gentleman. I have no idea who he is, but we would certainly ask that the committee move ahead with the 45th and Sansom Street Redevelopment Area and the urban renewal issue.

Mr. Bowser

Councilwoman Blackwell, I've been to your office on a few occasions. I've called your office on several occasions, spoken to your 27 Committee on Rules - 3/13/06 assistants. I don't know what more I could have done to make it clear to you that we were interested in working in conjunction with the Redevelopment Authority as well as, you know, the NTI, the Partnership CDC, and anything we could do to actually work in conjunction, you know, because our interest was in doing the exact same thing that they're interested in doing, which is developing the property for affordable housing. So, you know, again, like I said, I have letters from their office stating that they were looking and willing to work with us, you know, once they realized that all the means that they tried to use to take the property, you know, weren't going to work. And everyone else that they got out of the properties, they actually told the residents in this community that this neighborhood was sinking. Okay? They told these residents -- they don't care about the residents. They don't care about the 28 Committee on Rules - 3/13/06 people here. They only care about their initiative that they're claiming is an affordable housing initiative when there's properties in the 4400 block selling for $400,000. I've seen their plan. I've seen their layout. I've been in the Partnership's office. I've seen what they're intending to do. They're claiming this to be an affordable housing project and it's nothing of the sort.

Mr. Johns

I'd like to object to that characterization. We're not claiming this to be anything but what it is, which is a market rate development.

Council President Verna

I'm sorry, sir. I don't know that the stenographer knows who's talking.

Mr. Johns

My name is Rob Johns again from the Partnership CDC. I'm sorry. And I feel that was a mischaracterization of our project. It is not represented as an affordable housing initiative. It is a market rate housing initiative under NTI. We have 29 Committee on Rules - 3/13/06 some affordable components to the project, but we have never misrepresented it as an affordability housing project, pure and simple. Furthermore, we have not simply tried to take the property from the gentleman next to me. We've made every effort to make a good faith offer to purchase the property at fair market value as the letter that he read indicates, which was a letter from our attorney to him trying to make an offer. So I just feel we need to set the record straight.

Council President Verna

Thank you.

Councilwoman Blackwell

Madam President.

Council President Verna

Yes, the Chair recognizes Councilwoman Blackwell.

Councilwoman Blackwell

Thank you. This is a case where I'm reminded and you may remember we had an individual who came in here and complained about 30 Committee on Rules - 3/13/06 really all the problems she had had with the City and finally we prevailed upon the Partnership to kind of -- we argued with them and got them to agree to try to in advance -- because she just couldn't sustain it, to pay her. I think that the Partnership at that time gave her somewhere in the neighborhood of $30,000 because I insisted that they continue to not abuse this poor woman who couldn't handle it. Then you have someone in the middle who wants to come in and said, look, they're developing this block and wants to come in and say, hey, maybe if I can get it and charge, get a hundred thousand or something like that. It's that kind of situation where blocks are being developed. You get someone wants to come in the middle and make a big profit on the development project. That's the issue. That's what's at the heart of the issue and that's why we really want to continue on with the initial plan. It's been years. There 31 Committee on Rules - 3/13/06 was a woman who owned this property. She came here. She pled with this Council such to the extent I said you better in advance, Blaine Stoddard, give her this money because she can't handle it. And then somebody in the middle manages to kind of weasel in and try to come in and make a big profit in a development area. So, you know, we're happy to work with him in some other area in some other project but not this area and this project so far as I'm concerned, Madam President. We hope the committee will consider it.

Council President Verna

Thank you. The Chair recognizes Councilman Clarke.

Councilman Clarke

Thank you, Madam Chair. Just a couple quick questions. You purchased the property at sheriff's sale?

Mr. Bowser

Yes, through 32 Committee on Rules - 3/13/06 sheriff's sale. So I don't know what she's talking about.

Councilman Clarke

What was the cost?

Mr. Bowser

The cost of the property was actually $22,800.

Councilman Clarke

22,000 at sheriff's sale?

Mr. Bowser

Yes, at sheriff's sale.

Councilman Clarke

Mr. Wetzel, has an offer been made or an appraisal been done?

Mr. Wetzel

No, we're not at that stage.

Councilman Clarke

What were the numbers on the appraisals on the other properties that were acquired?

Mr. Wetzel

Previously to this?

Councilman Clarke

Yeah. I understand it was a multiphase acquisition.

Mr. Wetzel

I do not have 33 Committee on Rules - 3/13/06 those numbers with me, but I can deliver them.

Councilman Clarke

Anyone from the Partnership know?

Mr. Johns

The properties that we acquired to be rehabbed generally appraised around $24,000. We have not acquired properties in this exact circumstance so there isn't a comparable appraisal that I could give you that would sort of enlighten you.

Mr. Bowser

Just to give you, Mr. Councilman, the idea, a lot that's next door adjacent to the property that I own was selling for $130,000.

Councilman Clarke

For a vacant lot?

Mr. Bowser

Yes, a vacant lot. There's properties up the street right now selling for $400,000. Everyone knows this area. It's 44th, 45th and Sansom Street. It's the Penn catchment area, Drexel University, Penn University. And again, I don't understand why 34 Committee on Rules - 3/13/06 Councilwoman Blackwell is making this as something I'm doing. It's no different than the thousands of other people that go to sheriff's sale every month and acquire properties. I think it's very unfair for even that type of accusation to be made when this is just a situation where myself and a corporation -- it's not just a person here. This is a corporation, okay, that acquired a property for the interest of what we already do. We have a proven record. We work with 1260 housing. We work with several programs. This is a multi-unit property as well. So we have an intention of putting three families in this house. It's already zoned as a multifamily house. Again, they're making this like something that it's really not when in actuality it's just the mere case that I acquired a property. They had intentions -- because the City obviously doesn't communicate properly, the property should have never went up to 35 Committee on Rules - 3/13/06 sheriff's sale. That's not my fault.

Councilman Clarke

Yeah, it seems to be a lack of coordination with the judicial sales division not knowing that the City was interested in acquiring it on behalf of the CDC, which is unfortunate.

Mr. Bowser

Unfortunate but...

Councilman Clarke

So, Mr. Wetzel, is it my assumption assuming that the gentleman's indication that the appraisals are upwards of 130 for a vacant lot, 400 for an existing occupied structure, that the comps that will be done by the Redevelopment Authority will reflect those numbers?

Mr. Wetzel

If those are sales.

Councilman Clarke

If they're sales?

Mr. Wetzel

They have to be sold. They can't be on the market asking that. They actually have to be real transactions that become comparables. 36 Committee on Rules - 3/13/06

Councilman Clarke

Is there an approved budget for acquisition dollar amount?

Mr. Wetzel

There's a budget of 161,000 right now, but as with every budget if the appraisals come in higher, we would go back asking the City in this case, the office of housing and neighborhood preservation, do you want to continue and --

Councilman Clarke

I'm sorry. 161?

Mr. Wetzel

For the two properties.

Councilman Clarke

For the two properties?

Councilman Clarke

What's the breakdown on that?

Mr. Wetzel

I don't have the individual breakdown between the two properties.

Councilman Clarke

What are we basing that budget on? 37 Committee on Rules - 3/13/06

Mr. Wetzel

On a base estimate of the properties plus advertising costs and other contingencies.

Councilman Clarke

That's an internal appraisal?

Mr. Wetzel

That's correct.

Councilman Clarke

How much of the 161 is for administrative fees and advertisement and how much is for compensation?

Mr. Wetzel

I don't have that number, but I can get it for you. Councilman, also, unless there's some other indicators that this property is not subject to it, the reason that the majority of the properties were demolished on this block was a subsidence issue. I'm trying to remember the name of the creek.

Mr. Johns

Isn't it Mill Creek?

Mr. Wetzel

It might be Mill Creek that runs under this area.

Mr. Bowser

But yet they're 38 Committee on Rules - 3/13/06 still going to build on top of it.

Mr. Johns

Well, and speaking of that, we commissioned a geotechnical survey which confirmed the problems and also provided remedies for new construction. Our obvious concern is we don't want to build property next to a building that's falling down and incur further liability as a result of something like that or put people in danger. There's also the issue of the continuity of the project. This is the only building standing on what is now a vacant block. And for us to build new construction, certainly it makes more sense to us to build that project so that the new housing is uniform and attractive in appearance.

Councilman Clarke

Sir, I'm sorry. Your name?

Mr. Bowser

Ortellin Bowser.

Councilman Clarke

Mr. Bowser, if you've exhausted all your funds for legal fees, what's the likelihood -- 39 Committee on Rules - 3/13/06

Mr. Bowser

Actually, we just acquired financing through a business loan actually of $200,000 to rehabilitate the property.

Councilman Clarke

Okay. Thank you. Thank you, Madam President.

Council President Verna

The Chair recognizes Councilman Kenney.

Councilman Kenney

Mr. Wetzel, I'm a little confused as to how we get to this point asking for legislation for acquisition of property when you haven't done any appraisals and you've done guestimates I guess or -- wouldn't you have to do the appraisals first so when we give you approval to take the property you'll have a real budget to work with?

Mr. Wetzel

No. We do estimated appraisals. And again for many years that wasn't an issue. In some areas where there's a dynamic market, we could have done an appraisal four months ago that wouldn't be accurate today. The 40 Committee on Rules - 3/13/06 fact is that if you point out that things are on the market for that price, that doesn't mean anything. They've actually had to sell. You know, a lot on a block where there's a subsidence issue may be on the market for $100,000, but buyers wouldn't know there's a subsidence issue.

Councilman Kenney

But have you looked at comparables in that neighborhood?

Mr. Wetzel

Yes, we do when we do these initial budgets.

Councilman Kenney

What were the comparable sales?

Mr. Wetzel

That's how we based the budget.

Councilman Kenney

How many sales were done in the neighborhood in the last year?

Mr. Wetzel

Don't know.

Councilman Kenney

How would you not know if you were doing comparables?

Mr. Wetzel

Because you only 41 Committee on Rules - 3/13/06 look at ones that are close by.

Councilman Kenney

Well, how many houses have sold or properties have sold close --

Mr. Wetzel

Nothing on those blocks because --

Councilman Kenney

Then how do you do a comparable? His issue aside, I'm more concerned about the process. How do you do comparables when you don't have any sales?

Mr. Wetzel

You go and you start on that block and you reach outward.

Councilman Kenney

Now, you reached outward to properties that haven't been sold?

Mr. Wetzel

No; to properties that have been sold.

Councilman Kenney

And where was the closest property sold?

Mr. Wetzel

I don't have the appraisal here, but I can get that answer. 42 Committee on Rules - 3/13/06

Councilman Kenney

Why do you come here then when you can't tell us answers to the questions of the process? This gentleman, whatever he did, he went into sheriff's sale, he bought a property, he has it, he's got ownership of it and you're trying to take it. That's fine. I understand all that. But you come here and tell me about comparables and preliminary budgets and there's no comparables that you're aware of. How do you pull this number out of the air?

Mr. Wetzel

No. We look at sales in that particular area but they're not formal appraisals.

Councilman Kenney

Let's stop. You look at sales in the area. How many sales in the area in the last year?

Mr. Wetzel

I don't have the answer.

Councilman Kenney

You have an answer, you just don't have the answer.

Mr. Wetzel

With me. 43 Committee on Rules - 3/13/06

Councilman Kenney

So there are comparable sales in the neighborhood. Since these are mostly vacant lots and dilapidated buildings, how far do you have to go out for a comparable sale?

Mr. Wetzel

I don't have that answer, but I can get that answer for you. This is not --

Councilman Kenney

I know it's not scientific, but it should be more than this.

Mr. Wetzel

It is at this stage a rough estimate because we have no 15 authority to spend money under NTI until an ordinance is passed. So we have no 17 authority to order an official appraisal until that.

Councilman Kenney

I have no 20 authority to buy a property unless the bank approves my loan, but I still go out and check out the comparables sales. I check out what sold recently, what I expect to have to buy it for. You can do the research without the approval. You 44 Committee on Rules - 3/13/06 have the ability -- you have the inability to do appraisals without us approving this?

Mr. Wetzel

We cannot spend money on appraisals without an NTI ordinance approving the acquisition.

Councilman Kenney

So we have to approve it first before you go appraise it? That's a little ass backwards, isn't it?

Mr. Wetzel

That's how the ordinance was structured, though.

Councilman Kenney

Well, I voted no for the ordinance.

Mr. Wetzel

The ordinance says we can't spend NTI bond proceeds without either a resolution of Council or an ordinance of Council to acquire property.

Councilman Kenney

That should be changed because I don't know how you can come here with no equipment and have a discussion and ask us to approve something.

Mr. Wetzel

I think it would 45 Committee on Rules - 3/13/06 be beneficial to change that, but as of now the ordinance does not authorize us to spend any money on a property until it's been approved by Council.

Councilman Kenney

All right.

Mr. Bowser

Madam President, I'd like to just also add I have here a regular mail -- not even certified, mail that this organization just sent to me on this past Thursday for this hearing today. My attorney wasn't advised. I wasn't advised. I got this on Saturday and I'm here today only because I received this on Saturday. Had I not gotten this on Saturday, I wouldn't even be here today to represent myself. This is the type of business that these people who are acting as though they're acting in the best interests of our community, these are the type of tactics that they're doing, not even certified mail, regular mail sent out on Thursday, March 9 for a hearing today. I ask that this ordinance be striked and just 46 Committee on Rules - 3/13/06 removed from the record.

Councilman Clarke

What's the normal time line, Mr. Wetzel, on notification? I know we had this big issue a couple years ago about notification.

Mr. Wetzel

There is no legal time line for notifications on these. It's not part of the statute.

Councilman Clarke

Do we treat it differently if it's an occupied property versus a vacant property in terms of notification?

Mr. Wetzel

What we do is do the research to look for both -- especially if it's a vacant property, we look for research for off-site addresses because we know they're delivered to vacant properties, it's unlikely the person will be noticed. In this case, two letters went out, one to the property itself and then one to the off-site address in Jenkintown, which is I believe probably where you received the letter. 47 Committee on Rules - 3/13/06

Mr. Bowser

Yes. That's my business address.

Council President Verna

Sir, you indicated that you went out for a $200,000 loan?

Mr. Bowser

Yes, ma'am.

Council President Verna

Have you signed for that loan?

Mr. Bowser

We are actually right now approved for the loan and we are in the process right now for signing for that loan, yes, ma'am. That will be done before the end of this month.

Council President Verna

Thank you. Any other questions or comments from members of the committee? (No response.)

Council President Verna

Thank you.

Mr. Bowser

Thank you very much.

Council President Verna

Do we have anyone else to testify on this bill? 48 Committee on Rules - 3/13/06 (No response.)

Council President Verna

Seeing no one, I would ask Mr. McPherson to please read the title of Bill No. 6 060117.