COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING AND PUBLIC MEETING BEFORE COMMITTEE ON PUBLIC PROPERTY, PUBLIC WORKS - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, May 18, 2000 9:25 a.m. - - - BILL 000214 - Authorizing PAID to purchase a certain 18.41-acre tract of land situate at 3101 East Orthodox Street for a consideration not to exceed $874,500, under and subject to the terms and conditions of the Philadelphia Industrial and Commercial Development agreement between the City, PAID, and PIDC. BILL 000215 - Authorizing PAID to purchase a certain 66.4-acre tract of land situate at 4501 Richmond Street for a consideration not to exceed $3,320,000, under and subject to the terms and conditions of the Philadelphia Industrial and Commercial development agreement between the City, PAID, and PIDC. PRESENT: COUNCILMAN JAMES F. KENNEY, Chair COUNCILWOMAN JANNIE BLACKWELL, V. Chair COUNCILMAN MICHAEL A. NUTTER COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO - - - VINCENT VARALLO ASSOCIATES, INC. Registered Professional Reporters Eleven Penn Center, Suite 600 Philadelphia, PA 19103 (215) 561-2220 2 5/18/00 PUB. PROPERTY, PUB. WORKS COMMITTEE I N D E X Edward Duffy, PIDC . . . . . . . . . . . . . . 6 Dennis Dribin. . . . . . . . . . . . . . . . . 10 Dependable Distribution Services, Inc. 3 5/18/00 PUB. PROPERTY - BILLS 000214, 215 P R O C E E D I N G S
Good morning, ladies and gentlemen. We just need your attention for a moment. This is not Council session; this is the committee hearing of the Committee on Public Property. There are about standing committees 9 in City Council; Public Property is one of them. 10 And this committee deals with property that is 11 either owned by the City or property that the City 12 wants to purchase, plus all the other property, 13 the physical property, that's owned by the City. 14 Today we are dealing with two pieces of legislation, which are called "proposed bills," which will, hopefully, become ordinances that will and authorize the City's economic development agency, which is known as the Philadelphia Industrial Development Corporation, to purchase two parcels of land along the river, in Bridesburg, if anybody's familiar with Bridesburg. One parcel is almost 19 acres and the other is a little over 66 acres. And the purpose of the purchase of the land is to allow a company, which is predominantly 4 5/18/00 PUB. PROPERTY - BILLS 000214, 215 doing business in Europe, to establish a cocoa bean import facility, so that the ships will come up the river, unload their cocoa product onto the pier, and then they would create a processing facility right there, so that they would be able to process the cocoa beans into raw material, which would then be shipped to places like Hershey and other types of candy-making companies. They make liqueur, some of the by-product is used to make liqueurs. And it would create, hopefully, about 350 jobs. So what we're going to do is hear testimony, when we open the committee, from representatives from PIDC, and they will tell us why they think we should buy the land. We'll deliberate and give hopefully -- I'm sure we will -- give them approval to go ahead and do the purchase. The reason that we have to do the hearing at this time of the day on a Council session day is that all bills that pass Council are required to be read on two separate occasions. So if we have the hearing in the morning before Council session, we can get the first reading 5 5/18/00 PUB. PROPERTY - BILLS 000214, 215 today, the second reading and final passage next Thursday, and then the people who work for PIDC can move forward to purchase the properties and get this company in the City, get them constructed, and get the people to work. The other interesting thing about this particular bill is that both parcels of land are located in what's called "a Keystone Opportunity Zone," which is a zone established by the Commonwealth of Pennsylvania to really reduce the level of taxes that companies would pay -- state income tax, wage taxes, and other types of business taxes, which makes it more attractive for a company to move into the City and move into these zones so that we can become more competitive with our suburban region and with the rest of the East Coast. So that's the purpose of the hearing today, and you'll hear testimony from Mr. Duffy, who's going to come up right now. This is a committee hearing on Public Property to hear testimony on two bills. One is Bill No. 214 and the second is Bill No. 215. Bill 214 is an ordinance authorizing 6 5/18/00 PUB. 41-acre tract of land situate at 3101 East Orthodox Street for a consideration not to exceed $874,500, under and subject to the terms and conditions of the Philadelphia Industrial and Commercial Development agreement between the City, PAID, and Philadelphia Industrial Development Corporation (PIDC). The second bill is Bill No. 4-acre tract of land situate at 4501 Richmond Street for a consideration not to exceed $3,320,000, under and subject to the terms and conditions of the Philadelphia Industrial and Commercial development agreement between the City, PAID, and the Philadelphia Industrial Development Corporation (PIDC). )
Would you please identify yourself for the record and proceed with your testimony.
Good morning, Mr. Chairman 7 5/18/00 PUB. PROPERTY - BILLS 000214, 215 and members of the committee. My name is Edward Duffy, and I am Vice President of Special Projects for the Philadelphia Industrial Development Corporation. I am joined here today by Mr. Dennis Dribin, who is with the Dependable Distribution Company, our client. And I am here to testify in support of Bills 214 and 215. These ordinances authorize us to purchase two adjacent available industrial properties in Bridesburg. These properties will be added to our land bank and marketed for industrial development. The total acreage being acquired is approximately 85 acres. Both properties are zoned G-2, General Industrial, and there's a small sliver of lease restricted land, also. We have a client who has provided us with his plans for development, and he will develop both of these properties together. Dependable Distribution Company is our client. They are a Philadelphia-based firm, which stevedores Pier 84 in South Philadelphia. They are one of the largest importers and distributors of cocoa beans in the United States and I think, in fact, in the entire world. 8 5/18/00 PUB. PROPERTY - BILLS 000214, 215
Dependable Distribution proposes to create on these properties a state-of-the-art cocoa bean importation warehousing and distribution terminal following procedures that have recently been adopted in Europe but are untried in the United States. Dependable Distribution has interested one of its own customers, Chadler USA, currently located in Swedesboro, New Jersey, to develop a cocoa bean processing facility on the site, which would take the cocoa beans and produce cocoa paste, powder, and liqueurs, which are the basis for the candy industry. We expect that total employment that will be generated on the site by both Dependable Distribution Company and Chadler USA to exceed 350 when full production is achieved. As you have noted, Mr. Chairman, these properties are designated as part of Philadelphia's Keystone Opportunity Zone and they are also within the Port of Philadelphia Enterprise Zone. Access to these properties to and from Interstate 95 will be greatly improved 9 5/18/00 PUB. PROPERTY - BILLS 000214, 215 next year, when the first phase of North Delaware Avenue's extension northward from Lewis Street to Orthodox Street is scheduled to be completed. The proposed purchase prices are consistent with two independent real estate appraisals that have been obtained by PIDC, and the source of funds will be the Industrial and Commercial Development Revolving Fund. I will add that we've had both of these properties go through the environmental review process, and they are both relatively clean, and we will then pursue Act 2. I ask that the committee consider these bills favorably and that the rules of Council be suspended so as permit a first reading at the next scheduled meeting of Council. Thank you again for this opportunity to testify, and I would be very happy to answer any questions you may have regarding these ordinances.
Thank you very much. Is there any other testimony from --
Please identify 10 5/18/00 PUB. PROPERTY - BILLS 000214, 215 yourself for the record.
-- and members of the committee. I represent Dependable Distribution Services.
Dennis, could you do me a favor. Just pull that microphone right up to your mouth there.
I represent Dependable Distribution Services, and I'm here to support Bills 000214 and 215. As stated in Mr. Duffy's testimony, we, along with Chadler USA, which is a company owned by Barry Callebaut, Incorporated, plan to construct processing and support facilities on the site. The combination of stevedoring, warehousing, and processing on one site will generate significant cost savings as compared to the current operation located in South Jersey. As a result of these savings and an ever-increasing demand for chocolate, we project a 11 5/18/00 PUB. PROPERTY - BILLS 000214, 215 major expansion to around-the-clock operations seven days per week. Eventually, we expect to have 300 people working at the site in addition to the ripple effect throughout the region. We believe this project will help to solidify Philadelphia as the port of choice for cocoa beans. Accordingly, we ask the bill to rule favorably on these bills. We would especially like to thank Councilwoman Krajewski and her staff for the expeditious handling of this matter. We also thank the committee for your time and for your consideration, and I too am available to answer any questions. Thank you.
Thank you very much. Did you state in your testimony that this operation is currently being run in South Jersey or South Philly?
South Jersey -- well, the processing plant, run by Chadler, is in South Jersey.
So that represents 12 5/18/00 PUB. PROPERTY - BILLS 000214, 215 actually a stealing of -- not stealing, a relocation.
A relocation of positions from New Jersey to Pennsylvania?
Also, Mr. Duffy, could you expound a little bit on the importance of the development of these kinds of industrial uses for the port. We don't really have a lot of opportunities too often to improve our industrial capacity of the port in this fashion, and maybe you could, just for the record, kind of beef it up a little bit, as far as how important this is to do.
Yes, I will. It turns out that in the United States, most of the candy production is in the State of Pennsylvania, so it is logical to expect that cocoa bean cargos would move through the port of Philadelphia. However, other states -- notably Georgia -- have spent many millions of dollars on the port of Savannah putting in cocoa bean importation and distribution facilities. The port 13 5/18/00 PUB. PROPERTY - BILLS 000214, 215 of New York overhauled a pier right there by the Brooklyn Bridge in Brooklyn specifically for this cocoa bean trade. So I would say in the 1980s, Philadelphia was doing about 60 percent of the United States cocoa bean trade, and I think that dropped down to about 30 percent.
And I have to tell you, Dependable Distribution came into Philadelphia, they took over Pier 84, and they brought the business back to Philadelphia. And this is very labor-intensive stevedoring work, and it's got quite number of ships that will come in and make use of the pilots and the longshoremen, so it is a very useful trade for Philadelphia, a trade we almost lost. And thanks to Dependable Distribution, we're bringing it back. I think we're now up to around 80 percent?
In the sixties, okay, we're in the 60 percent range of the United States cocoa bean trade.
And could you talk 14 5/18/00 PUB. PROPERTY - BILLS 000214, 215 a little bit about the type of hourly wages. These are not only labor-intensive but generally better-paying positions than some of the jobs we've been creating in Philadelphia lately. This is a higher paid industry.
That's correct. Wages will obviously vary with the task, but wages will probably range from $8 to $20 an hour, with a median wage probably in the vicinity of $13 to $14 on average.
Great, okay. Are there any questions from any members of the committee? First of all, for the record, I'd like to indicate that the committee today consists of Councilmembers Rizzo, Nutter, Blackwell, and Councilmember Brown. And the Chair recognizes Councilman Rizzo.
Do you assure a nice chocolate aroma in the neighborhood? Is that going to be a part of the deal?
Often you do have the sweet smell of chocolate. Sometimes it's not so 15 5/18/00 PUB. PROPERTY - BILLS 000214, 215 sweet, though.
Thank you. We will submit it and make sure that the stenographer gets it. Is there anyone else in the room to testify on these bills? (Witness comes forward.)
For the City Planning Commission, my name is Thomas Chapman. 16 5/18/00 PUB. PROPERTY - BILLS 000214, 215 I'm here today without an official position from the Planning Commission, since the Commission has not yet considered these bills. They will be considered by the Commission at its meeting later this afternoon. I can tell you that the staff will recommend that the Commission endorse these two bills. We believe that it's an excellent opportunity for the City to propose industrial development in an area of the City that sorely needs it, and we wholeheartedly endorse the approval of these bills.
Thank you very much. Are there any questions for Mr. Chapman? (No questions.)
Seeing none, is there anyone else to tell on these bills? (No response.)
Now, for the 17 5/18/00 PUB. PROPERTY - BILLS 000214, 215 audience's purposes, there's always two parts to a public hearing for any committee in Council. The first part is the public hearing where, actually, testimony is taken and a record's developed so that anyone in the future who wants to read about what we did today can get from the Chief Clerk's Office a copy of the notes of testimony, and that really kind of sets forth the case for why we're taking action. The second part, which we're going to enter into now, is called the public meeting, where we actually officially vote the bill out. So what I would like to do is if I can get Councilman Rizzo, Councilman? Councilman Rizzo, could you just hang in there one second. I need your help on voting. And, Councilwoman Brown, you can stay, you can do it from there, that's fine. This will conclude our public hearing. - - - 18 5/18/00 PUB. PROPERTY - PUBLIC MEETING
And we will now convene our public meeting. The Chair recognizes Councilmember Blackwell for a motion on Bills No. 214 and 215.
Mr. Chairman, I move that Bills No. 214 and 215 be reported out of committee with a favorable recommendation and also a recommendation that the rules be suspended so as to permit first consideration at our City Council session this morning. (Duly seconded.)
It's been moved and seconded. All in favor there, aye? There are no votes opposed. Bill No. 214 and 215 will be reported out of this committee today with a favorable recommendation. A request will be made for a rules suspension to allow for first reading of Bills No. 214 and 215 today, and that will conclude the business of the Public Property Committee. We thank you for your attendance. We're going into our caucus now, which 19 5/18/00 PUB. PROPERTY - PUBLIC MEETING starts at 9:30. We hopefully will be in here between and 10:15. If you're staying for the 4 entire session or not, but you will hear, during a 5 period of time that we have our session, reports 6 from committee, and you will hear me read these 7 reports to the Chief Clerk about these bills that 8 we heard today. She will then read them and give 9 it as its formal first reading, which would allow 10 it to be heard again -- read again next week and finally voted on. So that's democracy in action, and it's not always extremely thrilling, but it does work. So thank you for being here. (Adjourned at 9:35 a.m.) - - - 20 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 Thursday, May 18, 2000, were reported fully and accurately by me, and that this is a correct transcript of same. RE: COMMITTEE ON PUBLIC PROPERTY AND PUBLIC WORKS BILL NO.'S 000214, 000215 __________________________________, JOSEPHINE CARDILLO, Registered Professional Reporter