COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT - - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, December 15, 2004 10:30 a.m. - - - - RESOLUTION 040827 RESOLUTION 040977 RESOLUTION 041014 PRESENT: COUNCILMAN W. WILSON GOODE, JR., Chair COUNCILMAN MICHAEL NUTTER, Vice Chair COUNCILWOMAN MARIAN TASCO COUNCILMAN JUAN RAMOS COUNCILWOMAN DONNA REED MILLER COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN FRANK RIZZO - - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2 I N D E X RESOLUTIONS 040827, 040977 MICHAEL SKINNER...................... DIANE WALKER......................... 6 ROBERT MCGOWAN....................... 19 ROSALIND HENRY....................... 26 7 NORASIS WILLIAMS..................... 27 GEORGE KINGS......................... 28 8 VINCENT DOUGHERTY, Commerce.......... 30 DUANE BUMB, Commerce................. 58 9 ANGEL ORTIZ.......................... 79 JOHN MACKLIN......................... 10 ROSCOE MURPHY........................ 94 BRUCE CRAWLEY........................ 112 11 ANTHONY FULLARD...................... 112 NICK SHENOY.......................... 150 12 LUIS CRUZ............................ 153 EDDIE CHISOM......................... 164 13 EDDIE BATTLE......................... 164 PHILIP HARRIS........................ 174 14 LARRY MITCHELL....................... 182 DAVID ESPOSITO....................... 186 15 THOMAS TRAVICK....................... 194 DEBORAH COBB......................... 204 16 TINA KING............................ 208 CAROL ROBINSON....................... 214 17 MICHAEL P. WILLIAMS, MBEC............ 223 3 12/15/04 - COMMERCE - RES.040977, 041014
Good morning. This hearing is called to order. This is the public hearing of the Commerce and Economic Development Committee on Resolutions No. 6 040827 and 040977 and No. 041014. My name is W. Wilson Goode, Jr., Chair of this Committee. I note that a quorum is present. To my left is Majority Leader Marian Tasco; to my right is Vice Chair Michael Nutter; also present are Committee Members Blondell Reynolds Brown and Frank Rizzo. The title of the first resolution, No. 041014, a resolution authorizing the Committee on Commerce and Economic Development to hold hearings to examine and investigate the City's provision of assistance and services to businesses through the Commerce Department and the Mayor's Business Action Team. The title of the second resolution, No. 040977, a resolution authorizing the Committee on Commerce and Economic Development to hold hearings to examine the Minority Business Enterprise Council with regards to 4 12/15/04 - COMMERCE - RES.040977, 041014 Chapter 17-500 of the Philadelphia Code and Executive Order No. 103, and to assess the efforts to improve participation levels and utilization goals for minority, women and disadvantaged business enterprises in City contracting and procurement and the effectiveness of attempts to eliminate related discriminatory and unfair practices. The third resolution, No. 040827, is not being considered today. I'll ask the primary sponsor of the first resolution if she has any opening comments. Afterwards she can call her first witness.
Thank you, Mr. Chairman. Good morning, everyone. I'm Councilwoman Marian Tasco, and I represent the 9th Councilmanic District. Both of these are my resolutions. We're going to have the one on the Mayor's Business Action Team because it's not as extensive as the MBEC, so we want to move along quickly. 040977, 041014 Business Action team, known as MBAT, and how it provides services to businesses in this City. As an example of this provision of services, we will use this hearing to discuss, among other issues, Mutual Industries, a business located in my Council district. More than two years ago my office contacted the Department of Licenses and Inspections, L&I, regarding neighbors' complaints about Mutual Industries. In fact, I have three pictures that show the community before Mutual Industries expanded in the community and after. I'll show them to my Committee Chairs, and we'll show them to the first witness when he comes. These pictures illustrate how a residential neighborhood has been a commercial nightmare. When we contacted L&I we learned that the Mayor's Business Action Team of the Commerce Department was providing business assistance to Mutual Industries. Prior to that, my office was not aware of nor informed by MBAT that they were assisting Mutual Industries. 040977, 041014 In addition, my office held several community meetings with residents and representatives of Mutual Industries, L&I and the Police Department in an effort to discuss the neighbors' complaints and bring about a resolution to the issue. Due to various code violations, L&I issued a notice of intent to cease operations to Mutual Industries' president, Edmund M. Dunn. In response to this notice, Mutual Industries filed a petition with Judge Esther Sylvester to prevent the City from enforcing this notice. During court hearings regarding their petition, I personally appeared to testify and appealed to Judge Sylvester to take action against Mutual Industries and to give relief to the neighbors from the nuisance activities taking place. In addition, my office provided Judge Sylvester with various photographs that illustrated the conditions of Mutual Industries' properties. 040977, 041014 community, Judge Sylvester decided to grant in part Mutual Industries' petition to prevent the City's enforcement of the cease operations notice until the Zoning Board hearing. On January 8th, 2003, Mrs. Marian Johnson of my office, who represents the 9th District before the Zoning Board, appeared before the Zoning Board, along with neighbors, and strongly opposed Mutual Industries' application. At the end of the hearing, the Zoning Board stated that they would release their decision at a later date. On January 30th, 2003 I forwarded a letter to the Zoning Board to follow-up and reiterate my opposition regarding Mutual Industries' application to expand its present operation. I pointed out to the Zoning Board the following: One, the expansion plan was not compatible with the R9-A zoning at 5700 and 5800 North 7th Street that surrounds the business. Particularly I oppose the open air storage that Mutual Industries uses for its products that would affect the neighbors. 040977, 041014 offered to assist Mutual Industries in locating a more appropriate site. I opposed Mutual Industries' proposal for a nine foot barb wire fence and stated to them that I would not ask my constituents to conform to such an indignity in their neighborhood, which is already a besieged community. There has been no such approval of a similar design in any residential area in the City, and therefore the approval of Mutual Industries' application would be inconsistent with previous Zoning Board decisions.
Even with all of the presentations and evidence presented to the Zoning Board pointing out the reasons why I, the District Councilperson, and the community residents were opposed to the application, the Zoning Board still granted Mutual Industries' application and only addressed a portion of our concerns. 040977, 041014 provide a buffer for the neighbors, maintain all trash in an enclosed area within their property line and ensure that their properties satisfy the Fire Code. For the record, the photographs that I am circulating to the Committee show that prior to the expansion of Mutual Industries, the neighbors enjoyed green grass, a place for their children to play and no involvement or encroachment of the company. They tore all the greenery away and constructed concrete driveways and put up this fence with all of this material behind it. It just changed the whole quality of life for those people. To this day my office continues to receive complaints from constituents -- as a matter of fact, every day -- regarding the business operations of Mutual Industries in their neighborhood. We have contacted the Managing Director's Office. He has sent us letters saying that they're in compliance when they're not. I mean, I don't know how we can get that many complaints from a community when this company is not being cooperative. 040977, 041014 Considering this information and all that we have gone through and the frustration of the constituents in my district and the people who live near this place, we will use this hearing to discuss this matter and determine whether this example is indicative of the way services were provided by MBAT. If so, we will also discuss what measures can be taken so MBAT's provision of services are not done in a way that negatively affects constituents and disrupts communities. Also, we want to know what MBAT can do to work with Mutual Industries to change some of the ways they're doing business and improve the quality of life for the people in that community. So this morning we're going to first call on the two residents from the community prior to calling on MBAT. We're going to ask Mr. Michael Skinner, Block Captain of 5700 North 7th Street Neighbors, and Nicholas Brown, 5700 North 7th Street Neighbors, to come forward. Are they here? 040977, 041014 Mr. Skinner, would you come forward to the table, please.
Let me quickly note for the record that we are also joined by Committee Member Donna Reed Miller.
Are there other neighbors from the community you want to bring up?
They can come up. Have all of them come up at the same time, please. You may have a seat. You may all have a seat in the black chairs there. Two of you can sit at the witness table and then as others may want to testify you can just exchange seats. We also have Robert McGowan, who is the Ward Leader of the 61st Ward here. You can proceed, Mr. Skinner. First identify yourself for the record. Speak into the microphone. You can pull it toward you.
Good morning. My name is Michael Skinner. I live in the 5700 block of North 7th Street. 12 12/15/04 - COMMERCE - RES.040977, 041014 The problems we are having with Mutual Industries is what Ms. Tasco said. Our way of life has been extremely affected by the way they conduct business. We cannot enjoy our way of living in our homes. We have structural damage since these people have started their construction. Rodents are coming in and out of our houses. Our wives and our children are being cursed at when the trucks come through our neighborhood. If we say that you can't come, they come through our neighborhood and they use all type of language towards us. We ask the police for their cooperation. We can't get any response from nobody. We called L&I a number of times and asked for them to help us. Instead they granted them a license to do whatever they want. Now, our thing is, if the law doesn't apply to Mutual Industries, then if I want to extend my deck -- which I have started the project -- why should I have to pay $300 to extend our deck to the City? I don't feel 13 12/15/04 - COMMERCE - RES.040977, 041014 as though it's fair. None of us feel as though it's fair for us to sit on our decks and have to look at this type of stuff. In October of 2000 we had a fire, which was the second fire. o'clock at 7 night. We had to leave our homes.
The fire was right in back of our homes, which these pictures will prove.
No. The fire was in back of our homes where they tore down and use as an open air storage facility.
If you want to say that, in the yard, yes. But our yard is about from here to where you people are sitting. As you can see, the smoke and stuff is blowing towards our way. If we had more wind our whole block would have went up. Like I said earlier, this is the 14 12/15/04 - COMMERCE - RES.040977, 041014 second fire. In 2000 we had the first fire, which was in the 5800 block. That fire lasted about six hours. These materials that these people have stored in this open air facility are flammable. You cannot just put it out with water. You have to have a special chemical to put this stuff out. The fire marshal came there several times and told these people beforehand that they couldn't put this stuff out here without sprinkler systems, without this stuff being stored in an enclosed area, not in an open area, that it definitely would affect our way of living and they were taking a strong risk of burning up our neighborhood. Mutual Industries' argument was that children set it. It's probably true. We're not denying that. But the point I'm trying to make is, if you take a decent neighborhood and change the way of living of that neighborhood where people are already accustomed to living a certain way and you change that neighborhood, yes, you're going to get undesirables. You will get people that do 15 12/15/04 - COMMERCE - RES.040977, 041014 stupid things, malicious things. And this is what was happening. We never had that problem until Mutual Industries took it upon themselves to do what they wanted to do. It's just a number of things that, you know, goes on with this company and how it's affecting our way of life. Our insurance, for instance, is going up. Our equity in our neighborhood is going down. If I pay a certain amount of money for my home, which is an investment, I would like to receive a profit from that when I'm ready to move on, which I cannot do now because nobody wants to buy a house that's in the back of a bunch of trash. It's as simple as that. What attracted me to my home -- I looked at that home for two years, my wife and I. We came through that neighborhood surveying the neighborhood night and day. What attracted me to that home, like I figure everybody else, was the fact we had this park, that we had use of this park. When I bought my home, my real 16 12/15/04 - COMMERCE - RES.040977, 041014 estate office told me that I was responsible for certain parts of that park. They even measured off and showed me what I was responsible for. People had gardens back there. If you go in our neighborhood and you go around my neighborhood within, say, a three-mile radius, you see people have similar parks in the back of their homes. They have swimming pools. They have swings. It's a place where we know where our children are. Now they're forcing our children to be in the streets. These trucks can't stop like cars. If you got a stop sign saying stop and you've got an 18-wheeler shifting gears, there's no 17 way for that truck to break down if a child just runs out in front of that car like that. These are the problems that we have. I thank you for your time.
Thank you so much, Mr. Skinner. Would you identify yourself for the record, please?
Good morning. My name 17 12/15/04 - COMMERCE - RES.040977, 041014 is Diane Walker. I live at the 5700 block of North 7th Street. My problem is the driveway, on either end you can't get out. I'm going to work. I work shift work. I work for the Police Department. I'm trying to get out to go to work. I have to come out extra early, sit there and wait for these people to move. They won't move these trucks. They even park them and take parts off of them that can't be moved unless the front part that drives is there to pull it along. Therefore, I've got to back up. I never know what I'm going to hit backing up. You can't turn around. Back all the way out of the driveway to the other end. Now, that's all blocked up. I live right here. This fence is there, and all this plastic all over this fence is flying like flags and everything, making all this noise. The trash blows up against the gate, so therefore there's a lot of trash; soda bottles filled with urine, all kinds of crazy crap. I looked in there -- 18 12/15/04 - COMMERCE - RES.040977, 041014 they look like they tore up -- they made this, I guess some kind of -- where they store their stuff out made out of stone. It looks like they were back there breaking that up and just left it there. They never came to haul it away or anything. It's full of trash inside the gates. Not just outside the gates. Inside of the place it's filthy. People are coming in there stealing. The products that they have back there are out in the open, so anybody can just park their truck and start loading this stuff, breaking in the gates and taking the stuff. And that means you don't know who's coming in. Somebody told me you can go and steal this. And it's easy. There's no guards there. So anybody from anywhere can just come in and knock you in your head while they're going over there to steal. If you look and are watching, you know they're going to be upset because nobody wants to be identified, you know, if you take a picture or get a video camera and film these people stealing. Of course being in neighborhood I have to turn my 19 12/15/04 - COMMERCE - RES.040977, 041014 head and act like I don't see what's going on, that I don't know who these people are. They get upset. The place is just a mess. They park in the street. I try to go out Grange Street. One will be coming this way and one will be coming that way. So where am I going to fit? They can't pull over because they're so big. You have to wait on these people, whatever they're doing. It's a mess back there. It's a total disaster. There's no trees or anything. I thank you for your time.
Good morning, everyone. My name is Robert McGowan. I'm the Democratic Ward Leader of the 61st Ward. This has been brought to light through the Committee people. There's two divisions, the 6th and the 7th Division. This was brought through my Committee people to me because it is a problem. I notified Councilwoman Tasco. We've had meetings with 20 12/15/04 - COMMERCE - RES.040977, 041014 Mutual Industries at the school. They seem to want to help the neighbors. It started on the 5800 block with the noise from their 3:00 to 11:00 shift, especially in the spring and the summertime with the loud music out the windows. It was disrupting the neighbors. In the past couple of years, the problem with the 5700 block is where they're storing everything. That just came to light in the past couple of years. They've had a couple of fires. The first fire was at the factory itself in the 5800 block. Two years ago they had the fire where they just started storing. That storage area was just built about three years ago. There was problems with that. We had another meeting. They were supposed to do some things. I don't believe everything that was discussed at the school has been rectified. The whole quality of life down there has changed. Being the ward leader, I get a lot of phone calls, probably a lot more than the Councilwoman does, because they see me in 21 12/15/04 - COMMERCE - RES.040977, 041014 the neighborhood. You know, the properties are going for about $60,000 and up in that area. It's row homes. I know the factory has been there since, I believe, 1923. I went back to the previous ward leader -- he wasn't there back when it was first built -- but Charles Murray was the previous ward leader. We discussed a lot of this. I know there was an ordinance put through where the tractor trailer trucks could only use Grange Street from 5th back to the facilities for entrance and exits. But they also come down Nedro and Chew Street and go over. Now, as far as the parking back there, they should know how many trucks they have coming in and how long it will take to unload them so they can get them in and get them out as to not disrupt the traffic. Because where the properties are is on the west side of 7th Street and their back is to Mutual Industries. What happens is their driveways are blocked as they go in from 7th 22 12/15/04 - COMMERCE - RES.040977, 041014 Street back into Mutual Industries, they're are blocked by these 18-wheelers. In the beginning we were getting complaints because they were idling their vehicles. And if you idle a tractor-trailer truck at 4 o'clock in the morning when you're trying to sleep, that's not a nice sound to here. So a lot of things can be worked out, I believe, with the City's help and Mutual Industries to help the neighbors out, to keep the community back to where it's supposed to be. I don't want to see any industry leave Philadelphia, because I believe they handle 100 employees. I could be off on that figure. I'm trying to remember what they said. I don't want to see jobs leave the City and everything, but I don't want to see a community disrupted, where you keep the company but you don't have any neighbors. Then the homes go down. I don't want to see that. I'm hoping through your Committee, 23 12/15/04 - COMMERCE - RES.040977, 041014 Councilman Goode, that we can work something out with the City and Mutual Industries to help the neighbors of the 6700 and 6800 block, and also Nedro, Range and Chew Avenue because of the problems with the tractor-trailer coming in off of 5th Street. Thank you very much for your time.
I'd like to add something. Like this gentleman said about the tractor-trailers on Grange Street. The problem we have with the trailers running on Grange Street is, at the top of the hill an elementary school sits there. This is where our children travel every day to go to school. As I said earlier, these trucks cannot even see these little people. The crossing guards have problems with directing when they come down to do it. Now, they have two entranceways. They are using Grange Street and they're using Chew. They built a cement block where they 24 12/15/04 - COMMERCE - RES.040977, 041014 put a loading dock up. Everything they just did was illegal. We do not want to say that Mutual Industries can't grow. To give you an example. Your wife or girlfriend starts out in a one-bedroom apartment. You start to have children. Common sense tells you you have to move and get a larger house. We don't have a problem with Mutual Industries growing, but we have a problem with Mutual Industries when they start to affect our lives. Marian Tasco offered to help these people find a better location within the City that they can operate without disturbing nobody. I know several locations that they can go to myself. All we're simply saying is that we're not trying to put anybody out of work. Everybody needs work, especially in this day and time. We know that. But when your work affects our way of living and we pay taxes and we set laws to protect us as neighbors and citizens and nobody is responding to that, then it becomes a problem. 25 12/15/04 - COMMERCE - RES.040977, 041014 Like I said earlier, we as neighbors are starting to turn against ourselves because where our children had the freedom to play and people had places to park their cars, they don't have that no longer. So there becomes a lot of tension now because my alarm is going off because the kids put up their basketball court and the ball accidently hits the car or something. Now you've got people who don't speak to each other. We have a community that's diverse with all types of nationalities. A lot of people are not here because they can't speak English. Some are senior citizens. It's a bunch of things. I'm not making up no excuses or apologizing for no big crowd. We're dealing with one block, which is the 5700 block. Yes, Mutual Industries, the building has always been in the 5800 block. But it was never what it is now. It was a knitting mill. It was a number of things. As they said earlier, never in history as any 18-wheelers been allowed to travel in our neighborhood 12/15/04 - COMMERCE - RES.040977, 041014 that freely. I thank you very much.
Thank you very much. The problem has been that we haven't been able to get the cooperation of the City to help with this issue. That's why we brought this here today. We want them to hear what you have to say. You and the neighbors have attended all of the meetings when the community meetings have been held. All the neighbors have come out. It is difficult getting out today, but Mr. Skinner and Mr. Brown have been in court. We all have been in court. We've been before the Zoning Board. So it's just their frustration that brought this hearing here today. We'd like the other three to come forward, if you have anything to say, briefly.
Good morning. My name is Ms. Rosalind Henry from the 5800 block North 7th Street. I'm the block captain. Basically the concerns that we have 27 12/15/04 - COMMERCE - RES.040977, 041014 have been covered. I'll just briefly say that in back of our block is Mutual Industries. Since the expansion, there has been a disruption in our lives. The open storage of the materials, we did have a fire that did threaten our homes. They have trees in the back. There are tree lines back there. The trees caught on fire, which extended over onto our decks. There is the big problem with noise from round-the-clock shifts and also tractor-trailers. A lot of neighbors have brought their concerns to me, which have been covered, so I would just like to reiterate that.
Good morning, Panel. My name is Norasis Williams (ph). I reside in the 5700 block of North 7th Street. As stated by my other neighbors, I'm miserable. The tractor-trailers are robbing our homes. We have a problem with rodents coming in. I have absolutely no idea what the industry actually has in that open area. I do hope that our problems will be solved so that 28 12/15/04 - COMMERCE - RES.040977, 041014 we can reside in our neighborhoods peacefully and calmly. I thank you for your time and your interest.
My name is George Kings. I live in the 5700 block of 7th Street. Some of the neighbors say they have problems since they've been driving them down the driveway with the forklift and cracked up some of the driveway. The drain lines have been clogged up. When me and my wife first bought the house, we bought the house because the land that was behind the driveway, you could do certain things out there, like in the summertime have cook outs or whatever, have friends over. You had trees there. It was like a little park there. But now all that's been gone. They took down all the trees. When we came to the Zoning Board hearing, I think they said they had to put up shrubbery or something. They haven't done nothing that was said at the hearing. They got just a big, ugly fence there. 29 12/15/04 - COMMERCE - RES.040977, 041014 You had the trees that would block off the air from your house in the wintertime. Now that's all wide open and you feel a lot of air in your houses that causes your heating bill to go up in the wintertime. It's all been a lot negative as far as I'm concerned. I think it needs to be rectified one way or the other.
Are there any questions fr the people on this panel? (No response.)
We'd like to have Vincent Dougherty, the MBAT Director. Is Mrs. Naidoff here? Is she coming? You all might want to wait and hear Mr. Dougherty, who is the director of the MBAT office, before you leave. Good morning.
Good morning, Mr. 30 12/15/04 - COMMERCE - RES.040977, 041014 Chairman and Members of the Committee on Commerce and Economic Development. My name is Vincent Dougherty. I'm the Assistant Director of Commerce for the City of Philadelphia and the Acting Director of the Mayor's Business Action team, MBAT. I've submitted written testimony about MBAT and how we work, who we are, what we do. Basically we are the one-stop shop for business and business advocates and we work with businesses to grow and expand here in the City. We have a team of five staff members who are spread out throughout the City. Each have a geographic area that they handle and are the primary liaison for that particular area with the business community. In short that's who we are and what we do. We could get to your specific case, Councilwoman, if that's appropriate.
We didn't know that MBAT was working with this company in my district. I want to know how you interact with District Councilpeople when you're 31 12/15/04 - COMMERCE - RES.040977, 041014 interacting or you're working with a business to grow or come into a neighborhood.
Councilwoman, in this particular case, if I may, I'll tell you what I know firsthand. This issue came to my attention shortly after I was appointed Acting Director, and we had a meeting over at your office to discuss it. Prior to that, probably a year or so before that, one of the MBAT-ers came up to me. I was doing Enterprise Zone Program or the Keystone Opportunity Zone Program, but I had a lot of knowledge about how businesses acquire properties, either through sheriff's sale or lien sale or condemnation, et cetera. I did the basic research for this young staffer, who was an inexperienced staff person who didn't know. Basically the first thing that jumped out at me, quite bluntly, that jumped out at me is this particular lot, which was an old, I guess, coal siding to serve that building on the 5800 block. It was vacant. It was privately owned by a company called RPU 32 12/15/04 - COMMERCE - RES.040977, 041014 Company, who bought a lot of ConRail's old siding. What jumped out at me right away was it was zoned R9-A. From the aerial photos and maps at L&I, you can see the row of houses that sit there with a common driveway behind them. The first thing I said to the staff member was, this company has got to work with the Councilwoman's office because they are going to need the zoning variance to do whatever they want. They're going to have to work with the community, as you have often suggested to me on certain issues. You recommend that I meet with the community. So that's the last I heard of it, actually, this last particular case, until it was brought to my attention, like I said, a few weeks or a month after I became the Acting Director of the Mayor's Business Action Team. Going backwards, what I found out was that this company bought the property at lien sale. They acquired it and then did whatever they wanted to do. We did do a phase one environmental on the property, which is 33 12/15/04 - COMMERCE - RES.040977, 041014 just an environmental preview to see what the former use, if there were any blatant environmental issues there. Then from my understanding, the Mayor's Business Action Team representative who was working with the company advised them on the things they had to do. Again, contact you and the community to work with this, how to get permits, how to get things like that taken care of for this expansion to move forward. To the extent this company did or did not do that, that is, quite bluntly, on the company. We can advise, but we cannot force them to do anything particular. We are not an enforcement agency.
Did you work with the enforcement agencies to make sure that they do what they're supposed to since you are responsible for bringing them or helping them to expand?
That, I can't speak definitively to. I know there were community meetings that I understand became rather contentious. And I understand that the 34 12/15/04 - COMMERCE - RES.040977, 041014 company walked away from those meetings and had no subsequent meetings. That's my recollection of the situation. Again, I was not part of it at that particular time.
If I may take one step backwards. After the meeting with you basically they hired at that point a -- I don't even remember who it was -- but I just remember that it was a high-priced, well-known lawyer in the City of Philadelphia who does zoning. At that point we walked away. They elected to ignore our recommendations and do whatever they chose. We had recommended additional meetings with you, et cetera. We tried to set up a meeting with the business and you and leaders of the community and they elected not to do it. So at that point we walked away and basically there's nothing we can do. They chose their own fate, and that's what it is. We've not been involved with them whatsoever 35 12/15/04 - COMMERCE - RES.040977, 041014 since then. I'm sorry. I'm wrong. Actually, you brought up the issue at a budget hearing, I guess, months ago with Jim Cuorato, the 6 Commerce Director at the time, and Mr. Cuorato 7 and I went out to survey the situation. We 8 went with some of the residents and tried to 9 address some of their issues. At the time Mr. 10 Cuorato was going to talk to the lawyer and 11 see if some of the issues could be addressed. 12
Where is the 13 City's responsibility to these neighbors? 14 That's what I want to know. That's what we 15 haven't been able to get, is anybody from the 16 Administration to accept the responsibility 17 for the quality of life in the community for 18 these neighbors. You all helped them expand. There was a meeting held and your staff went to the meeting. You might not have been there. My staff person came back and said, well, the City is representing them. Because it was a contentious meeting. You brought them there. Yes, we want businesses to remain in 36 12/15/04 - COMMERCE - RES.040977, 041014 the City and, yes, we want them to expand, but at what cost to the quality of life to the people in the neighborhood? What effort was made to move them to another site? These people are here. They have been in court. We have been in community meeting after community meeting. I want to know what is the City going to do to enforce this company to stop some of the illegal behavior that they're doing. L&I will come back and tell us, oh, they're in compliance, and they're not. You know that. But where is the City's responsibility to these neighbors?
Councilwoman, I can't address that specifically. I'm certainly not an expert in L&I.
What is your interaction with other agencies in the City? You should not be acting alone. If you're going to bring a business or help a business, is there any effort to look to see if they owe any taxes? Do you look to see if they have any Code violation? Do you do any of that before you proceed to help them? 37 12/15/04 - COMMERCE - RES.040977, 041014
We do not have the authority to pick and choose necessarily, who we serve and who we do not. With that having been said, we do that research. There's a lot of pressure points as to where we can use those things. L&I needs to violate them. As far as back taxes are concerned, if they're doing public financing, they need a revenue check.
But who does that? Who is coordinating all of that? If your job is to help businesses in the neighborhood, what is your responsibility in coordinating the City services to bring bear on whether or not you help them, or how you help them or if they pay their back taxes or if they meet the zoning requirements?
Again, a lot of this is processes in the sense, like I said, if they're getting public financing, part of the process itself requires a revenue clearance from the unit before the public financing will be finally approved and authorized. That's my understanding about PCDC and PIDC. 38 12/15/04 - COMMERCE - RES.040977, 041014 As I said, Councilwoman we are not an enforcement agency.
You say here the Mayor's Business Action Team is the division of the Department of Commerce that provides Philadelphia businesses with a source of reliable and comprehensive business assistance. MBAT is the primary point of contact between the Department of Commerce and the business community. MBAT account executives are familiar with a wide range of business-related information, such as start-up requirements, licensing and permit issuance. You also bring together City departments and agencies to resolve business concern and ensure full delivery of City services. With Mutual Industries, why wasn't all this stuff provided to them and to the community?
Councilwoman, it generally was. As you mentioned to before, R9-A just jumped out at me so fast, that they need to go through the zoning process. We 39 12/15/04 - COMMERCE - RES.040977, 041014 advise them how to go through the zoning process.
Mr. Dougherty, there are several Members of the Committee who want to question you. I just want to note for the record that Committee Member Councilman Juan Ramos is also present. I'll start off. In your written testimony, which I had a chance to read even before coming to the hearing -- and I'm fairly familiar with the Mayor's Business Action Team, having worked with the Commerce Department -- you specifically cite two things. One, it says troubleshooting, working with the operating departments, agencies and facilities, as well as other government and private organizations to cut through red tape for businesses, which means that you in fact serve some sort of coordinating and enforcement role in terms of cutting red tape for businesses; is that correct? 40 12/15/04 - COMMERCE - RES.040977, 041014 I believe you stated a couple minutes ago that you don't decide which cases you take on, which is not necessarily true.
No. I was saying that officially we do not have that authority to pick and choose.
You absolutely take on that authority at cutting red tape for businesses. You say that in your testimony.
You also say in your testimony, a business services case involving cutting through the red tape for a business, the source of the red tape can be an operating department, a utility, another business or another level of government. It sounds as if you take on a certain level of authority there as well.
A certain amount of authority in what we do is try to hook up the two parties, L&I, in this particular case. I guess a good example would be a building permit. Someone is caught in government red 41 12/15/04 - COMMERCE - RES.040977, 041014 tape trying to get a building permit. What our effort would be is to try to --
Mr. Dougherty, lastly you say in your testimony, the final type of MBAT case is a project. A project is a case that can be generally classified as being of longer duration, complicated and requiring significant coordination. The client could be an individual business or, in many cases, may be a collaboration involving a business association, the Community Development Corporation and the Councilperson.
Correct. In this particular case I will tell you, quite bluntly, probably the way it should have been handled was first and foremost have a meeting with the Councilwoman's office and address these issues. Bring L&I perhaps to the table and the appropriate players to the table with this business to look at the project as a whole.
Let me ask you a more pointed question. Do you have more authority or was more authority vested in you 42 12/15/04 - COMMERCE - RES.040977, 041014 when in fact it is a case of aiding a business as opposed to aiding a community? Do you feel you're not authorized to actually engage operating departments on behalf of the community because your job is to help businesses?
It's not our specific job. We do not ignore the community.
My question is, do you feel you have the authority to cut red tape for business, but not the same authority with the same agencies to help the community?
To the extent I can, I'm always happy to. Again, it's not our primary role, but I am more than happy to.
I'm asking what you directives are. Since the Commerce Director chose not to show up, though she was invited, I'm asking what your directives are. Do you feel a lack of authority when it comes to resolving problems for the community as opposed to being empowered to cut red tape for businesses.
I feel empowered to 43 12/15/04 - COMMERCE - RES.040977, 041014 solve problems. And to the extent of the community and a business's concern, I feel empowered to help the community where I can. To the extent I can mitigate any one of these problems that were in this particular case with Mutual Industries, I would be more than happy to do so.
Thank you, Mr. Chairman. You said something that has me wondering. Earlier you said that this company bought this additional parcel at a sheriff's sale.
A lien sheriff's sale. Then you said that the City -- correct me if I'm wrong -- paid for a phase one environmental study?
Why would we pay and what did that cost us for a private 44 12/15/04 - COMMERCE - RES.040977, 041014 company? Why would we pay for an environmental study? I don't get it.
We often have state and federal grants. One of the biggest impediments to development in the City of Philadelphia is brown fields, and to the extent we can take that uncertainly off the table for businesses by identifying what the environmental issues may be with a parcel, then we do that regularly. We have grants from DVP and the EPA to do so.
I get a kick out of people -- no disrespect to you -- that we talk about federal and state money like it comes from heaven. It's the people in this room. It's mine. It's yours. I just don't understand why we subsidize a company that wants to expand their business and we have to pay for an environmental study. Could you provide to the Chair what we spent in dollars, federal, state or local money, on an environmental study for a private company? 45 12/15/04 - COMMERCE - RES.040977, 041014 I'd really like to know about that. I think I know a little bit -- not as much as Councilman Goode -- about MBAT, but you refer to this title, account executive, that that account executive saw this deteriorating, the red flag should have come up immediately that there's going to be a problem. I think that that account executive should have been on the case and watched very carefully what was going on there. If they're building temporary loading docks without permits, the account executive should have come to you as the Acting Director and said, L&I needs to get out there to take a look at what's going on. They went maverick. They're out of control. I think you have a responsibility when you see someone not cooperating and they're doing things that affect the community, that you have a responsibility -- I know you don't want to be tagged the dime dropper -- but you must do that if you see a company that has walked away from negotiations, not cooperating and then 46 12/15/04 - COMMERCE - RES.040977, 041014 trashing the neighborhood.
Councilman, I agree with you 100 percent. In this particular case, again, when I got involved in this, my understanding was that we already had a zoning hearing on this, and that was in the hands of the Zoning Board, what they would allow and would not allow on this particular parcel. As far as whether this loading dock was legal or not legal, again, that's an L&I issue. That is a zoning issue. If the Zoning Board says that they're allowed to put this loading dock there, I have no authority to --
We're not suggesting you're going to send inspectors out, but I think your account executive needs to jump in a car, go look at the various projects that you're associated with, and when you see things that are occurring that aren't supposed to be occurring, come back to you. You have the responsibility, in my opinion, to pick up the phone, call the L&I Deputy Commissioner, and say, we really would 47 12/15/04 - COMMERCE - RES.040977, 041014 appreciate you sending someone out there. I'm not suggesting that you're going to do the enforcement, but you certainly can facilitate the enforcement.
Councilman, we do this often. I have a file this thick with bad businesses that will not comply. Generally, this is a unique case where lots of things went wrong. Policy America Street, which I initiated, was what I call an open-handed, clenched fist approach. When businesses are not maintaining their property and dragging down every other business and the neighborhood, et cetera, I will, depending on the level of -- if the building falling, of course I take proactive steps immediately. I will send a letter to them and say, business owner, this is a problem. Your condition of your property is a detriment to everything we're trying to accomplish in this particular area. Please address this promptly. I may do a second letter if he or she does not take care of the issue. The 48 12/15/04 - COMMERCE - RES.040977, 041014 third, I will sick the appropriate authority after them. I'm trying to be business friendly and not crush businesses, but get the problem solved because they do have a negative impact on every other business in that area.
Again, I'm going to end it. There's a balance. I love to be business friendly, but we need to be community and neighborhood friendly.
I absolutely agree. I'll say one thing to this Committee. It's something that I fought for quite often -- and Ms. Johnson at the Zoning Board has heard me say this often -- residential and industrial do not mix. No one wins in that situation. And we have a lot of older neighborhoods where they're just right next to each other.
I'll bet we're going to be staggered by what it cost to do this phase one. Why did we even allow the 49 12/15/04 - COMMERCE - RES.040977, 041014 acquisition of this property to occur and expand if you know that it's going to be a failure? I think your policies need to be reviewed.
Councilman, we don't have the authority to stop a private entity from bidding at sheriff's sale.
You have the authority to pay for a phase one environmental study. Thank you, Mr. Chairman.
Councilwoman Reynolds Brown and then Councilman Nutter.
I would like to go back to Councilmember Tasco's initial opening question. 50 12/15/04 - COMMERCE - RES.040977, 041014 What is the standard operating procedure at Commerce when it comes to companies that want to do business in residential areas with regards to the interaction with the District Councilperson, the standard operating procedure?
The standard operating procedure would be to alert the Councilperson's office to this potential project.
How is that done; phone call, e-mail, formal letter, form? How is that established?
It's generally not a formal letter, but an e-mail to a staff person who is the general contact, or a phone call to the Councilperson.
Councilwoman, I can't address that. As I said, I was not involved in this case until I got into the MBAT area, and that was after 99 percent of this, I would suggest, had happened. 51 12/15/04 - COMMERCE - RES.040977, 041014
Just over two years ago. Directly involved. And that was again at the request of Councilwoman Tasco, who brought this to my attention. So it was immediately after I became Director of the Mayor's Business Action Team.
And you say, and I quote, "When I got involved, I believe that certain things had taken place." What led you to those impressions; meetings, documentation, a file? What led you to believe that all of the prerequisite steps had been covered?
Interviews with the staff member that was handling it, notes in the file, et cetera, is my recollection. I think that's what you're talking about. How do I know the background?
That's what it would be from, discussions with the staff member who was handling it, letters, et cetera. 52 12/15/04 - COMMERCE - RES.040977, 041014
Again, to Councilwoman Tasco's subsequent question, where then is the City, the Commerce Department, MBAT responsible for fiascos like this place because, your quote was, "We walked away from it"?
We walked away from the interaction with the company. They were not being responsive to us. They were not taking the issues that we brought to them. There's not much I can do for a company that refuses to hear us. And so when I say, walked away from them, I guess what I'm trying to say is --
So MBAT is in the business of facilitating business and creating business, but when they begin to transgress with the community in a way that's inappropriate and illegal, MBAT has no 21 responsibility or authority?
It's two parts. MBAT has a responsibility for, as your 53 12/15/04 - COMMERCE - RES.040977, 041014 testimony says, providing Philadelphia businesses with a source of reliable and comprehensive business assistance. At the point that there is illegal, inappropriate interface with the community, where does MBAT's responsibility end or begin?
Again, I can't force a business owner to do something they refuse to do. We absolutely encourage them to meet with the Councilwoman and the community leaders --
If it's an L&I issue, the L&I inspector has. If it's a zoning issue, if they needed certain permits and they were approved by the Zoning Board -- and the one issue you bring up, Councilwoman Tasco, is the trees, which seems to me to be a no-brainer as a good faith effort to shield that site from the community. It just seems a 54 12/15/04 - COMMERCE - RES.040977, 041014 no-brainer. If they refused to do so, I don't have the authority to do so if the Zoning Board approved it.
Final question. Were the agencies you just mentioned informed of what was happening with the particular company and advised to discontinue providing them any kind of assistance that would further move them to expanding their business? Were they officially informed?
It is my understanding from the Councilwoman that she had L&I come out --
They did not, to my knowledge. The Councilwoman was taking the lead on this.
Thank you, Councilman Nutter, for yielding to Councilwoman Tasco. And then Councilman Nutter.
There's a weakness structure here in this whole ability 55 12/15/04 - COMMERCE - RES.040977, 041014 to bring businesses in and to work with them. It seemed to me from the beginning that this company was wired, because everything went to their favor. So they don't feel any responsibility for respecting these neighbors or doing anything. We opposed the expansion. They were given the expansion. The neighbors came down and opposed it. They were given the expansion. We went to court on their injunction. They were granted against the City. Then we can't get any L&I enforcement against this company for any of the complaints that the neighbors bring. They don't have any sense of responsibility because nobody has done anything to them.
Well, that's just an observation. You don't have to comment.
No. You shared that with me before and I certainly appreciate it.
I told you that 56 12/15/04 - COMMERCE - RES.040977, 041014 before and I still believe it. These neighbors are calling me every day about this company and the Administration is not doing anything, anything about it. I wrote to the Managing Director. He writes me back, well, they're in compliance. They are not.
Again, I don't know the specifics. Are they in compliance with everything? I'd be more than happy to go back and review with you, Councilwoman Tasco.
We'll let Councilman Nutter make his comments because it's his time for this, but what I want you all to do is figure out how, before you bring anything else in my district, what your role is going to be from beginning to the end and beyond in dealing with these companies, because we're not going to have another fiasco like this. Or we're going to have to find a way that you don't even stay in business if you're not going to be effective. (Applause.)
Councilwoman, I'll reconfirm the commitment I made to you and to 57 12/15/04 - COMMERCE - RES.040977, 041014 all the Councilpeople of my commitment to work on projects such as this. I will absolutely make sure that you are in the loop.
I think, Mr. Dougherty, with all due respect to you -- and I do have respect for you and your commitment -- but it's a systemic problem. What happens when you leave? You came in after the other people left. They left no clear records. They probably left some notes. They went and helped this company to come into the City and do what they had to do. They're no longer there. So I'm sitting here talking to you after the fact. The responsibility should rest with the rules and procedures of the department and not an individual.
Councilman Nutter. 58 12/15/04 - COMMERCE - RES.040977, 041014
Thank you, Mr. Chairman. Mr. Dougherty, I have a series of questions based on either testimony, news stories or the discussion that's taken place so far. You and I've worked together on a number of projects. We have one pending. Do not take personally anything that I ask you.
The Chair of the Committee asked, and I thought I saw on the list, the witness list, that the Commerce Director was going to be here? Do you know the whereabouts of the Commerce Director? Her name is on the list.
Duane Bumb, Deputy Director of Commerce. I don't know where she is.
But someone asked you to be here? 59 12/15/04 - COMMERCE - RES.040977, 041014
This is legislation that impacts our Department so I've been monitoring it, and I was in touch with the Chair yesterday on this hearing.
Let me ask some background questions first. What's the name of the owner of this business?
No, Councilman. I have not been involved in this in 18 months.
When you were involved 18 months ago, do you know who was in charge?
I knew the name, but I had never had any contact with that person.
What's the 60 12/15/04 - COMMERCE - RES.040977, 041014 address?
I didn't know necessarily that there was a need for her to be here.
Well, Mr. 61 12/15/04 - COMMERCE - RES.040977, 041014 Dougherty, I think it's been made pretty clear that you were not initially involved. It's been very difficult at best for you to answer any of the questions by the sponsor of the resolution, the Chair and other Members of this Committee. How are we ever going to get to the bottom of all this if we don't have access to the person who was actually involved?
Councilman, if I may -- and let me extend this to the entire Committee -- no disrespect is certainly meant by certain people being here or not being here. I didn't know the full extent of this Council hearing. I knew it involved --
I knew this issue, but I didn't know the extent of this issue was going to go into this much detail.
I did see her right before I left. 62 12/15/04 - COMMERCE - RES.040977, 041014
Let me ask this question. Is it true that the former Commerce Director, Mr. Cuorato, worked with the company, as a newspaper story indicates, helped Mutual Industries arrange to buy the land next door, an open triangular-shaped lot that once housed deer as well as opossum at sheriff's sale; is that correct?
I'm sorry, Councilman. I was trying to get Dawn on the line.
Did the former Commerce Director help Mutual Industries buy this property?
I don't believe so, no. I don't remember his involvement in any depth on this.
I'm not saying it's 63 12/15/04 - COMMERCE - RES.040977, 041014 not true. I don't remember it being so.
I can tell you I was involved in the very beginning, as I mentioned in my testimony, in response to Councilwoman Tasco's question, early on when the MBAT rep was looking at this company and this particular piece of land. I did some of the basic research. To the extent I was involved at that point, I knew who owned it. I knew what the situation was, did the necessary research on that with this person to try to get this taken care of. And advising on the zoning was a particular.
I advised the MBAT representative at that time. Like I said, I was not the MBAT Director.
Well, that was 18 months ago and this project started about four years ago.
Yes. It's been a 64 12/15/04 - COMMERCE - RES.040977, 041014 long while.
Right. Well, it would seem to me that when someone purchases a piece of property, even at sheriff's sale, the zoning classification is somewhat important as a part of that process, right?
No. Some people actually like to know the zoning before they buy something.
Did the Department check, when they were helping Mutual Industries purchased the property? Did they check to see what the zoning was at that time before the purchase?
No. No. Before. This is when they were looking to acquire this property. I did the basic research on the 65 12/15/04 - COMMERCE - RES.040977, 041014 property itself. Who owned it, what the tax status was --
Wait a minute. I thought you said you were involved months 6 ago, and everything had already taken place by 7 the time you came on board. Now, wasn't that 8 your testimony earlier? 9
No. I'm sorry if I 10 wasn't clear. When I was MBAT Director I 11 became involved 18 months ago. Four years 12 prior to that, in a very peripheral way, they 13 came to me and asked -- the MBAT 14 representative who was working on this case, 15 who did not have a lot of knowledge on -- 16
You were involved prior to the purchase? 66 12/15/04 - COMMERCE - RES.040977, 041014
My role was to do the basic research on this particular triangle.
Who the owner was, what the tax status was and what the zoning was were the three basic things.
You knew at the time prior to the purchase that is was zoned residential?
Correct. And looking at sand born maps, I not only knew it was residential, I knew that the houses that the neighbors are talking about abutted --
Just answer the question. Did you tell the company at the time prior to the purchase that it was zoned residential?
After doing the research I did nothing more on this case. 67 12/15/04 - COMMERCE - RES.040977, 041014
Wait a minute. You did the research. What did you do with the research?
So the account executive knew what the zoning was prior to the purchase?
Did anyone tell the company prior to the purchase what the zoning was, based on your research and your turning the information over to the account representative who walks people through the process?