1 1 2 COUNCIL OF THE CITY OF PHILADELPHIA 3 PUBLIC HEARING - COMMITTEE ON PUBLIC PROPERTY 4 AND PUBLIC WORKS 5 - - - 6 Room 400, City Hall 7 Philadelphia, Pennsylvania 8 Wednesday, June 15, 2005, 11:35 a.m. 9 10 Bill 050575 - An Ordinance authorizing the Commissioner of Public Property, on behalf of 11 The City of Philadelphia, to enter into an agreement to sublease from the Philadelphia 12 Municipal Authority a building located at 4508 Chestnut Street, under certain terms and 13 conditions. BILL 050576 - An Ordinance authorizing the 14 Commissioner of Public Property, on behalf of The City of Philadelphia, to enter into an 15 agreement to sublease from the Philadelphia Municipal Authority a building located at 6901 16 Woodland Avenue, under certain terms and conditions. 17 PRESENT: 18 COUNCILMAN DARRELL L. CLARKE COUNCILMAN JUAN F. RAMOS 19 COUNCILMAN FRANK RIZZO COUNCILWOMAN DONNA REED MILLER 20 COUNCILWOMAN MARIAN B. TASCO COUNCILWOMAN JANNIE L. BLACKWELL 21 22 23 V A R A L L O Incorporated Litigation Support Services 24 1835 Market Street, Suite 600 Philadelphia, PA 19103 25 215.561.2220 215.567.2670 2 1 6/15/05 - Bills 050575 & 76 - Public Property 2 COUNCILMAN CLARKE: Good 3 morning. 4 COMMISSIONER SCHLOTTERBECK: 5 Good morning. 6 COUNCILMAN CLARKE: We are 7 convening the Committee on Public Property and 8 Public Works public hearing. 9 Will the clerk please read the title 10 of the first bill. 11 THE CLERK: Bill No. 050575, an 12 ordinance authorizing the Commissioner of 13 Public Property, on behalf of the City of 14 Philadelphia, to enter into an agreement to 15 sublease from the Philadelphia Municipal 16 Authority a building located at 4508 Chestnut 17 Street, under certain terms and conditions. 18 COUNCILMAN CLARKE: Let the 19 record reflect we have a quorum. We have 20 Councilwoman Tasco, Councilwoman Miller, 21 Councilman Ramos and Councilwoman Blackwell. 22 Please proceed. 23 COMMISSIONER SCHLOTTERBECK: 24 Yes. Good morning. Before we begin, I'd like 25 to introduce as an amendment to the original 3 1 6/15/05 - Bills 050575 & 76 - Public Property 2 bill the proposed lease. You have that 3 document in front of you, I believe. 4 COUNCILMAN CLARKE: Yes. 5 COMMISSIONER SCHLOTTERBECK: 6 Proposed lease/terms and conditions. 7 Good morning, Chairman Clarke and 8 other members of the Committee on Public 9 Property and Public Works. My name is Joan 10 Schlotterbeck. I am the Commissioner of the 11 Department of Public Property. I am here 12 today representing the Department to testify 13 in support of Bill No. 050575 -- 14 COUNCILMAN CLARKE: Excuse me, 15 Commissioner. We have the letter, but I don't 16 think we have the lease. We have the letter 17 referencing the lease. 18 COMMISSIONER SCHLOTTERBECK: 19 It's a letter of intent for the lease, the 20 terms and conditions, yes. 21 COUNCILMAN CLARKE: Letter of 22 intent, okay. 23 COMMISSIONER SCHLOTTERBECK: My 24 apologies. I called it a proposed lease 25 because that's the subject in the line. 4 1 6/15/05 - Bills 050575 & 76 - Public Property 2 COUNCILMAN CLARKE: Fine. 3 COMMISSIONER SCHLOTTERBECK: An 4 ordinance authorizing me as Public Property 5 Commissioner, on behalf of the City of 6 Philadelphia, to enter into an agreement to 7 sublease from the Philadelphia Municipal 8 Authority a building located at 4508 Chestnut 9 Street, under certain terms and conditions. 10 This bill will permit the City to 11 lease space located at 4508 Chestnut for use 12 by the City's Office of Emergency Shelter 13 Services. 14 The Department supports this 15 measure, and, accordingly, I respectfully 16 request that City Council approve Bill No. 17 050575. 18 Thank you. I'm here for any 19 questions you may have, and joining me is 20 Deputy Managing Director Robert Hess. 21 COUNCILMAN CLARKE: Thank you. 22 Mr. Hess, do you have any testimony? 23 DEPUTY DIRECTOR HESS: 24 Mr. Chairman, thank you for the opportunity to 25 appear before you on this bill today. I would 5 1 6/15/05 - Bills 050575 & 76 - Public Property 2 just say that this is the culmination of a 3 year-long effort to find a replacement 4 facility for the Luther Settlement House that 5 you may recall had the steeple collapse 6 tragically last August, and so we're very 7 pleased to support and present this to you 8 today. 9 COUNCILMAN CLARKE: Thank you. 10 Any questions of these witnesses by 11 members of the committee? 12 (No response.) 13 COUNCILMAN CLARKE: Anyone else 14 to testify on this bill? 15 DEPUTY DIRECTOR HESS: I think 16 there are a couple folks that want to testify. 17 COUNCILMAN CLARKE: Yes. 18 Please come forward. 19 MR. McGILL: Hi. My name is 20 Bill McGill, resident of 4428 Chestnut. I'm 21 Block Captain of the 4400 block of Chestnut, 22 which is the block adjoining it. I've also 23 been active in the Sansom Street Coalition, 24 which represents the 4400 and 4500 blocks of 25 Sansom Street. The 4500 block of Sansom 6 1 6/15/05 - Bills 050575 & 76 - Public Property 2 Street is immediately behind this structure. 3 The 4500 block of Sansom Street is currently 4 under renovation by the Partnership CDC for 5 market-rate properties, which they expect to 6 sell in the $400,000 range. 7 COUNCILMAN CLARKE: Is that the 8 group headed by Blane Stoddard? 9 MR. McGILL: Yes. There are 10 two groups active. Blane's is one of the 11 groups and I don't recall the other group's 12 name offhand. 13 But at any rate, the $400,000 price 14 tag that they expect to receive for those 15 properties is going to be directly impacted by 16 backing up on a homeless shelter. The 17 neighborhood already is inundated with 18 homeless shelters. We have -- I don't recall 19 the number, but there are quite a few in the 20 form of Travelers Aid Society and a variety of 21 others in the neighborhood that have been 22 subject of comments, questions and concerns 23 from the Spruce Hill organization through the 24 Sansom Street Coalition and others. 25 So we are not in favor of this 7 1 6/15/05 - Bills 050575 & 76 - Public Property 2 facility being used as a homeless shelter. 3 COUNCILMAN CLARKE: I'm 4 assuming there's been some sort of public 5 discussion in the community? 6 MR. McGILL: As much public 7 discussion as there has been here. The only 8 notice that anyone in the community has 9 received was the fact that one of the 10 neighbors happened to have read this bill in 11 Wednesday's Inquirer last week and mentioned 12 it to people. To date, nobody knows anything 13 about it. The Partnership does not know 14 anything about it. The real estate agents in 15 the neighborhood do not know anything about 16 it. The Spruce Hill Community Association 17 does not know anything about it. Calls to 18 Councilwoman Blackwell's office have not been 19 returned. The people who supposedly know 20 about it have all been on vacation or out. 21 There has been no public discussion 22 by anyone about this operation. It was 23 vehemently opposed when the idea was first 24 proposed over a year ago, and right at the 25 moment, West Catholic, which is directly 8 1 6/15/05 - Bills 050575 & 76 - Public Property 2 across the street from this facility, is 3 undergoing a change of presidents. The 4 current president has left literally as of 5 today. The new president will take over on 6 July 1st. 7 So to us in the community, this 8 looks very much like the City is trying to 9 pull a fast one again. 10 COUNCILMAN CLARKE: Okay. Let 11 the record reflect that Councilman Rizzo has 12 joined the committee meeting. 13 Councilwoman Blackwell. 14 COUNCILWOMAN BLACKWELL: Thank 15 you, Mr. Chairman. 16 I do not know about this gentleman 17 or anybody calling me. I'm in the 4400 block 18 of Chestnut Street every morning at quarter to 19 6:00. Every morning I'm there. 20 Certainly it is not our practice and 21 given our commitment to the community, we 22 would never be in partnership with anyone 23 trying to, quote/unquote, pull a fast one on 24 our neighbors or the residents in that 25 community. 9 1 6/15/05 - Bills 050575 & 76 - Public Property 2 All those who want to know know. 3 I've heard the inside discussion about people 4 in the community who want to know. We've had 5 discussions in general about it. I don't know 6 that -- my understanding -- in fact, I know 7 that all of this has been in negotiation for 8 quite some time and it didn't come together 9 until just now. But we would never be in any 10 collusion to certainly hide any project from 11 the community. 12 Blane Stoddard keeps up with 13 everything in the area, and certainly the 14 whole area of the Lutheran Church that all of 15 you saw on TV that was crumbling when the 16 steeple fell down, they've been looking at 17 this since it happened, and I've not heard 18 any -- maybe you called today or yesterday or 19 something since we're in hearings all day, but 20 I regret if somebody called, I didn't get the 21 message, because I've heard of no complaints 22 about it. 23 Everybody knew it was a Lutheran 24 Church and the Lutherans who were coming 25 there, nobody complained. And most of the 10 1 6/15/05 - Bills 050575 & 76 - Public Property 2 other programs that you reference are behind 3 the walls at 48th and Market at the Kirkbride 4 Center. So that is where many programs exist, 5 and that's always been used kind of that way 6 from the old days, many, many years ago, 7 before all of us were born, when it was used 8 by movie stars for mental health reasons. 9 So the many programs that exist at 10 the Kirkbride Center have been there. We 11 haven't heard any community complaint about 12 it. I regret that the gentleman feels that 13 way, but Blane Stoddard and everybody in that 14 area keeps up with everything in that area, 15 and certainly we have nothing but respect for 16 them, happy to work with them. We believe in 17 working, trying to get more done on areas 18 adjacent to the Partnership, the Partnership 19 CDC, and their housing agenda, and feel that 20 we've done all that we should do to try to 21 support the project, and all those who wanted 22 to know knew. 23 I regret the gentleman's feelings. 24 We would never undermine or disrespect them, 25 but certainly hope that the committee will 11 1 6/15/05 - Bills 050575 & 76 - Public Property 2 consider reporting this out today so that we 3 may move forward. Thank you. 4 COUNCILMAN CLARKE: Thank you. 5 Any questions from members of the 6 committee for this witness? 7 (No response.) 8 COUNCILMAN CLARKE: Sir, as it 9 relates to the schedule of this particular 10 bill in this Council, this bill at its 11 earliest can have its first reading in the 12 Council session tomorrow, if it passes 13 committee. It cannot have a final vote until 14 we come back in September. So between now and 15 September, it's my hope that members of your 16 organization meet with any interested parties, 17 particularly members from the City and the 18 Councilwoman's office, so we have 19 approximately two and a half months to give 20 you some opportunity to get more involved in 21 this process. 22 MR. McGILL: Okay. Question, 23 my understanding from the reading of the 24 notice is the City already either owns or 25 leases this property since it's to execute a 12 1 6/15/05 - Bills 050575 & 76 - Public Property 2 sublease? 3 COUNCILMAN CLARKE: Mr. Hess, 4 do you want to respond to that? 5 DEPUTY DIRECTOR HESS: No, 6 that's not correct. There is no lease in 7 effect on this property at this time, 8 Mr. Chairman. 9 MR. McGILL: Then why would it 10 be being subleased? 11 DEPUTY DIRECTOR HESS: I think 12 that's a technical question the Commissioner 13 can probably answer, but all of the leases the 14 City holds are technically subleased to a -- 15 I'll stop there. 16 COMMISSIONER SCHLOTTERBECK: 17 It's a legal process. We're going to be 18 leasing it from PMA and they're going to 19 sublease it back to us, but at this point in 20 time, we have no legal ownership of that 21 building. 22 MR. McGILL: Okay. PMA, at 23 least as of the last time I checked the Bureau 24 of Revision of Taxes records, also does not 25 own or lease that property apparently. 13 1 6/15/05 - Bills 050575 & 76 - Public Property 2 COMMISSIONER SCHLOTTERBECK: 3 That's correct. 4 MR. McGILL: So where does PMA 5 come into this? I'm trying to line up who the 6 ducks are that are in this thing, because as 7 of 10 o'clock this morning, neither Blane 8 Stoddard, Guy Orens, nor the University City 9 District had any clue what this was all about. 10 COMMISSIONER SCHLOTTERBECK: 11 Rather than me -- I'm going to have my 12 attorney sit here and articulate it for you 13 better than I have. 14 MR. SILVERMAN: Thank you, Mr. 15 Chairman. Ryan Silverman, Assistant City 16 Solicitor. 17 The owner of the building is 4508 18 Chestnut Street Associates, and then PMA, if 19 Council so authorizes, will be leasing the 20 property from 4508 after Council gives their 21 approval. Then the City will sublease it from 22 PMA. 23 So right now, there is no 24 relationship between 4508 Chestnut Associates 25 and the City or PMA in any respect. That's 14 1 6/15/05 - Bills 050575 & 76 - Public Property 2 why we're here today. 3 MR. McGILL: Okay. I guess 4 it's kind of confusing why the City doesn't 5 just lease it directly. 6 MR. SILVERMAN: Well, that's a 7 technical legal matter with regard to what's 8 called the "four-year out," a provision that 9 allows the City to get out of any deals longer 10 than four years. 11 COUNCILMAN CLARKE: Sir, we do 12 many confusing things in the City of 13 Philadelphia, so you shouldn't be surprised. 14 Councilwoman Tasco. 15 COUNCILWOMAN TASCO: Yeah. I 16 just wanted you to explain that again. We own 17 the building? 18 MR. SILVERMAN: No, we do not 19 own the building. 20 COUNCILWOMAN TASCO: The City 21 does not -- 22 MR. SILVERMAN: The City 23 doesn't have any interest in the building. 24 COUNCILWOMAN TASCO: Who owns 25 the building? 15 1 6/15/05 - Bills 050575 & 76 - Public Property 2 MR. SILVERMAN: A partnership 3 called 4508 Chestnut Street Associates. And 4 they will be leasing it to the Philadelphia 5 Municipal Authority, who will then sublease it 6 to the City, provided Council gives us 7 authority. 8 MR. McGILL: Did 4508 just 9 acquire the property? Because that's not who 10 owned it six months ago. 11 DEPUTY DIRECTOR HESS: Mr. 12 Chairman, I think the Managing Partner of that 13 entity is here and I think is prepared to 14 testify, if that's helpful. 15 COUNCILWOMAN TASCO: So what 16 are we approving today? We're approving the 17 right of the City to sublease to PMA? 18 MR. SILVERMAN: Sublease from 19 PMA. 20 COUNCILWOMAN TASCO: Sublease 21 from PMA. 22 MR. SILVERMAN: Correct. 23 COUNCILWOMAN TASCO: And then 24 the City would enter into a lease with the -- 25 MR. SILVERMAN: The structure 16 1 6/15/05 - Bills 050575 & 76 - Public Property 2 would be, the owner of the building would 3 lease the property to PMA and PMA would then 4 sublease it to the City for use as a shelter. 5 COUNCILWOMAN TASCO: Okay. 6 COUNCILMAN CLARKE: I think the 7 question is, if I'm hearing everyone, the 8 question is, does PMA already have a 9 relationship with 4508? 10 MR. SILVERMAN: No, they do 11 not. 12 COUNCILMAN CLARKE: So we are 13 authorizing both the PMA arrangement and the 14 sublease to -- 15 MR. SILVERMAN: At the same 16 time, correct. Almost like a PAID 17 transaction, same realm. 18 COUNCILMAN CLARKE: 19 Councilwoman Miller. 20 COUNCILWOMAN MILLER: Yes. Who 21 is PMA? I mean, it's an entity evidently. 22 MR. SILVERMAN: Yes. 23 COUNCILWOMAN MILLER: Do you 24 use PMA in order to sublease -- 25 MR. SILVERMAN: To lease 17 1 6/15/05 - Bills 050575 & 76 - Public Property 2 properties, City space and that kind of thing. 3 That's what they're normally used for. 4 They're municipal authority, state authority 5 that we use just like the Philadelphia 6 Authority for Industrial Development, but PAID 7 is used for more economic development and PMA 8 is used for leasing of space. 9 COUNCILWOMAN MILLER: Okay. 10 Thank you. 11 MR. SILVERMAN: You're welcome. 12 COUNCILMAN CLARKE: Does any 13 City agency have a direct lease or do all 14 leases go through PMA? 15 MR. SILVERMAN: Does any City 16 agency -- I'd have to check into that for you 17 and get back to you. I'm not positive, but I 18 think we do enter into direct leases, 19 sometimes with long-term arrangements that are 20 longer than four years. 21 COUNCILMAN CLARKE: With a 22 department? 23 MR. SILVERMAN: Right, with a 24 department. 25 COUNCILMAN CLARKE: Directly 18 1 6/15/05 - Bills 050575 & 76 - Public Property 2 with a department? 3 MR. SILVERMAN: Yes. 4 COUNCILMAN CLARKE: Is it 5 advantageous to be in this arrangement with 6 PMA? Does the master lease -- what's the 7 advantage of doing it as opposed to having a 8 direct lease with a department? 9 MR. SILVERMAN: Through the 10 City Charter, it provides that any contract 11 entered in for longer than four years must 12 have an out for the City at any time to be 13 able to get out of the contract. When a 14 landlord comes to us and they want a long-term 15 commitment, they cannot get the financing to 16 do the proper fit-out and improvements unless 17 they have a longer commitment than the four 18 years. 19 The provision would allow the City 20 to, at any time after that four years, to get 21 out of the deal with no consequences, which 22 landlords do not like. However, if we do a 23 deal with an authority, that provision may be 24 waived as put forth in the Charter. 25 COUNCILMAN CLARKE: The 19 1 6/15/05 - Bills 050575 & 76 - Public Property 2 provision is waived between the authority and 3 the department? 4 MR. SILVERMAN: And the 5 department, yes. 6 COUNCILMAN CLARKE: So the 7 question is, PMA must continue that lease 8 arrangement that's longer than four years? 9 MR. SILVERMAN: Well, the 10 City's sublease with PMA will not have that 11 four-year provision because we're doing a deal 12 with an authority. 13 COUNCILMAN CLARKE: I 14 understand that, but the question is, if you 15 need to enter into an agreement beyond the 16 four-year period, therefore allowing the 17 property owner to get financing for the 18 facility, you must enter into a lease term 19 longer than four years. 20 MR. SILVERMAN: Yes. 21 COUNCILMAN CLARKE: Is PMA 22 required to maintain that lease beyond the 23 four-year period? 24 MR. SILVERMAN: Yes; for the 25 term that they sign up for with the landlord. 20 1 6/15/05 - Bills 050575 & 76 - Public Property 2 So it would be a ten-year term between PMA 3 and -- 4 COUNCILMAN CLARKE: So if the 5 City department decides to terminate its lease 6 arrangement at the end of the four-year 7 period, it's then PMA's responsibility to find 8 a new tenant? 9 MR. SILVERMAN: No, because by 10 doing it through PMA, the four-year provision 11 is waived. We are doing a deal with an 12 authority. We're -- 13 COUNCILMAN CLARKE: I'm not 14 talking about the City. I'm talking about the 15 authority's arrangement with the property 16 owner. 17 MR. SILVERMAN: But you're 18 saying the four-year out. There is no 19 four-year provision in the deal between PMA 20 and the City, is what I'm telling you. So the 21 City -- 22 COUNCILMAN CLARKE: I 23 understand that, but I'm talking about the 24 arrangement between PMA and the property owner 25 is longer than four years? 21 1 6/15/05 - Bills 050575 & 76 - Public Property 2 MR. SILVERMAN: Correct. 3 COUNCILMAN CLARKE: So once the 4 City department says, We're out after four 5 years or whatever -- 6 MR. SILVERMAN: But they can't, 7 because we're going to be signing a sublease 8 at the same time for ten years with PMA that 9 will not have that provision in it. 10 COUNCILMAN CLARKE: I thought 11 you said we wanted to have an out. 12 MR. SILVERMAN: We are having 13 an out. 14 COUNCILMAN CLARKE: But we 15 don't want to have an out, which is why we're 16 entering into the arrangement -- 17 MR. SILVERMAN: No. We do want 18 to have an out. That's why we're entering 19 into the deal with PMA. 20 COUNCILMAN CLARKE: I'm saying 21 if the City department chooses to take the out 22 after four years, what's PMA's relationship 23 with the property owner? 24 MR. SILVERMAN: They're still 25 on the -- we can't take it out after four 22 1 6/15/05 - Bills 050575 & 76 - Public Property 2 years. If City Council approves the deal for 3 ten years and the Commissioner signs a 4 document with PMA for ten years, we're subject 5 to that deal for ten years. 6 COUNCILMAN CLARKE: Okay. 7 You're confusing me. 8 Sir, as I said to you earlier, there 9 are many confusing things in the City of 10 Philadelphia. 11 PMA -- I hate to keep going on with 12 this, because I thought this was actually 13 going to be like a five-minute public hearing. 14 MR. SILVERMAN: By doing the 15 ten-year agreement between the landlord and 16 PMA and then a ten-year agreement between PMA 17 and the City -- 18 COUNCILMAN CLARKE: Is the City 19 required to do a ten-year agreement? 20 MR. SILVERMAN: By this 21 ordinance, they are, yes. 22 COUNCILMAN CLARKE: So -- 23 MR. SILVERMAN: So they will 24 not be able to get out of the deal prior to 25 the ten years. 23 1 6/15/05 - Bills 050575 & 76 - Public Property 2 COUNCILMAN CLARKE: So you 3 can't utilize the four-year out? 4 MR. SILVERMAN: Right. 5 Correct. Sorry. Sorry for being confusing 6 there, Councilman. 7 MR. McGILL: You earlier said, 8 though, that the City Charter required a 9 four-year out. 10 MR. SILVERMAN: With the City 11 directly dealing with a landlord, but PMA is 12 an authority that's getting involved in the 13 transaction. 14 COUNCILMAN CLARKE: So that's 15 why we do the sublease? 16 MR. SILVERMAN: Correct. 17 COUNCILMAN CLARKE: Okay. It's 18 more clear to me now. 19 Councilwoman Tasco. 20 COUNCILWOMAN TASCO: And so if 21 the City decides to get out before the ten 22 years are up, who is responsible for the 23 lease? 24 MR. SILVERMAN: The City 25 cannot. The City would be signing a ten-year 24 1 6/15/05 - Bills 050575 & 76 - Public Property 2 document with PMA. 3 COUNCILMAN RIZZO: Can I ask a 4 question? 5 COUNCILMAN CLARKE: Certainly. 6 Councilman Rizzo. 7 COUNCILMAN RIZZO: Just 8 listening here, is this a way to circumvent 9 the City Charter? I mean, why would we do 10 this to circumvent the City Charter? I mean, 11 I know lawyers get very creative. Why can't 12 we just do it the way that -- 13 MR. SILVERMAN: It's based on 14 financing, and in order to be able to do the 15 kind of -- for the kind of needs that we want 16 to use a building for, the landlord has to 17 know that it's going to be a longer deal than 18 four years. 19 COUNCILMAN RIZZO: Well, you 20 could charge us more. 21 MR. SILVERMAN: That's a 22 business -- 23 COUNCILMAN RIZZO: I just don't 24 understand. I don't like being a part of -- 25 this is manipulation. This is like a shell 25 1 6/15/05 - Bills 050575 & 76 - Public Property 2 game here, at least that's how I'm 3 interpreting it. We have a City Charter. 4 Some sharp lawyer came up with a way to 5 circumvent the City Charter to create PMA and 6 do all these things that you describe to 7 create a loophole. Bottom line? 8 MR. SILVERMAN: PMA was 9 actually created by City Council based on the 10 Municipal Authority's Act of 1945. 11 COUNCILMAN RIZZO: But to do 12 what? 13 MR. SILVERMAN: To lease 14 property for the City. 15 COUNCILMAN RIZZO: I don't 16 think it was created -- I don't think PMA was 17 created to do this. 18 MR. SILVERMAN: That's one of 19 its -- 20 COUNCILMAN RIZZO: One of them, 21 but I think somebody figured out a way to do 22 what you're doing here. I don't think PMA was 23 created to do what we're trying to do here 24 today. 25 MR. SILVERMAN: City Council 26 1 6/15/05 - Bills 050575 & 76 - Public Property 2 gave it that power, to do that. 3 COUNCILMAN RIZZO: Gave it that 4 power, but not necessarily originally was PMA 5 created to do what you described today. 6 MR. SILVERMAN: That may be 7 correct, not originally, but at some point, 8 City Council changed the bylaws of the group 9 to be able to do that. 10 COUNCILMAN RIZZO: So why 11 couldn't we live with a conventional deal that 12 goes away in four years again? Because 13 there's significant improvements required that 14 would be prohibitive to do a four-year deal? 15 MR. SILVERMAN: Well -- 16 DEPUTY DIRECTOR HESS: Well, 17 that's much more expensive, Councilman. What 18 happens -- and this property is not unusual in 19 our experience. We were fortunate enough to 20 be able to locate a facility that is 21 appropriate for use as an emergency shelter. 22 That very often requires some retrofitting of 23 the building. That has expense associated 24 with it, and then you have to look at whether 25 you're going to pay for that over one or two 27 1 6/15/05 - Bills 050575 & 76 - Public Property 2 or three or four years or you can spread that 3 expense out over a longer period of time. 4 When we run the numbers, we see it's 5 much more economically feasible for the City 6 to enter into a ten-year arrangement than a 7 two- or three- or four-year arrangement. 8 COUNCILMAN RIZZO: I 9 understand. I just want to make sure that I'm 10 understanding that what you're doing here is 11 to circumvent what originally was established 12 by Charter. And I understand. It's not this 13 project. It's just the mechanics of it that's 14 very interesting to me, that we can always 15 figure a way to get around something, and 16 that's very interesting. 17 DEPUTY DIRECTOR HESS: We try 18 in this case, Councilman, to find a way to 19 save the City a significant amount of money 20 each operating year and have a safe, quality 21 facility that will be a good neighbor. 22 COUNCILMAN RIZZO: This is not 23 about this project. This is about the way 24 we're doing the deal that's interesting to me. 25 COMMISSIONER SCHLOTTERBECK: 28 1 6/15/05 - Bills 050575 & 76 - Public Property 2 Councilman, Joan Schlotterbeck, Public 3 Property Commissioner. 4 I think that we're all best served 5 by getting you a more formal response from the 6 Law Department specifically related to why we 7 are leasing the way we are. 8 COUNCILMAN RIZZO: I'd like 9 that. 10 COMMISSIONER SCHLOTTERBECK: We 11 can do that. 12 COUNCILMAN CLARKE: That will 13 be helpful. 14 Councilwoman Tasco. 15 COUNCILWOMAN TASCO: It's not 16 the deal, it's just the process of doing this. 17 Why are you doing ten years as opposed to 18 seven years or six years? 19 DEPUTY DIRECTOR HESS: When we 20 looked at this facility, Councilwoman, and we 21 looked at the retrofitting that is necessary 22 and we looked at our needs over time, we felt 23 that the best economic deal and operational 24 deal for the City was a ten-year arrangement, 25 and so that's what we were able to negotiate 29 1 6/15/05 - Bills 050575 & 76 - Public Property 2 with the Partnership. 3 COUNCILWOMAN TASCO: I haven't 4 read the improvement. You are the landlord 5 now, you will become the landlord? 6 DEPUTY DIRECTOR HESS: No, 7 Councilwoman. 8 COUNCILWOMAN TASCO: 4508 will 9 become the landlord? 10 DEPUTY DIRECTOR HESS: Yes. 11 COUNCILWOMAN TASCO: Will they 12 do all the upgrading and retrofitting and all 13 that? 14 DEPUTY DIRECTOR HESS: Yes, 15 Councilwoman. Under the terms that are before 16 you, the Partnership would do all of the 17 improvements to the building. They would also 18 for the next ten years be responsible for all 19 of the maintenance that is required in the 20 building to keep all the operating systems in 21 good operating order. 22 They are also responsible for 23 essentially anything else in the building that 24 would need to be done during that period of 25 time to keep it up to code and operational. 30 1 6/15/05 - Bills 050575 & 76 - Public Property 2 And so it's that kind of arrangement over a 3 longer term that makes a lot of economic sense 4 for us. 5 COUNCILWOMAN TASCO: How many 6 facilities like this do you have in the City 7 for emergency shelter? 8 DEPUTY DIRECTOR HESS: For 9 emergency shelter at the moment, Councilwoman, 10 I believe the number is 29. Yes. 11 COUNCILWOMAN TASCO: 29? How 12 many people on average? 13 DEPUTY DIRECTOR HESS: Last 14 night, Councilwoman, we had housed in the 15 emergency shelter systems of this City 2,515 16 men, women and children. And tragically now, 17 for the last two years, that number has been 18 growing at a rate of about eight percent a 19 year. 20 COUNCILWOMAN TASCO: What would 21 you say was the major cause of the shelter 22 population? What drives the population up? 23 DEPUTY DIRECTOR HESS: Poverty 24 is the primary driver. The lack of living 25 wage or family sustaining jobs tends to be the 31 1 6/15/05 - Bills 050575 & 76 - Public Property 2 biggest factor, and then, of course, there are 3 a variety of other social service needs that 4 many of our individuals and families have that 5 they need support with. 6 COUNCILWOMAN TASCO: Okay. 7 Thank you. 8 COUNCILMAN CLARKE: Thank you, 9 Councilwoman. 10 COUNCILWOMAN BLACKWELL: 11 Mr. Chairman? 12 COUNCILMAN CLARKE: 13 Councilwoman Blackwell. 14 COUNCILWOMAN BLACKWELL: If I 15 may, I understand that with our authorities, 16 whether it be stadiums or other issues, with 17 our authorities, we do do this routinely. I 18 mean, we don't always talk about it for 19 shelter use, but we do it. But it's kind of a 20 routine way we deal with business, and it 21 gives us a long-term tie-in for rehabilitation 22 and maintenance of facilities. 23 COUNCILMAN CLARKE: Yes. I 24 agree, because I know that particularly in the 25 case of PAID, we use them on a substantial 32 1 6/15/05 - Bills 050575 & 76 - Public Property 2 number of transactions. It does protect us 3 against certain Charter provisions as it 4 relates to acquisition and the ability to 5 dispose of property. So that is something 6 that we use it for quite extensively. 7 COMMISSIONER SCHLOTTERBECK: 8 That's correct. That's why I think it's wise 9 if we get a written opinion from the Law 10 Department articulating exactly why we do it, 11 for the record. 12 COUNCILMAN CLARKE: Any other 13 questions by members of the committee? 14 (No response.) 15 DEPUTY DIRECTOR HESS: 16 Mr. Chairman, I think there are a couple of 17 additional people that would like to testify. 18 COUNCILMAN CLARKE: I was going 19 to do that next. 20 Anyone else who wants to testify on 21 this bill? 22 MS. VIEIRA: Thank you. My 23 name is Beatriz Vieira. I'm the Executive 24 Director of Lutheran Settlement House, and our 25 mission at Lutheran Settlement House is to 33 1 6/15/05 - Bills 050575 & 76 - Public Property 2 empower individuals, families and communities 3 through education, employment and social 4 services in order to achieve and maintain 5 self-sufficiency. 6 We were founded in 1902. In the 7 year 2000, we opened Luther House at 43rd and 8 Chestnut, which is Christ's Memorial Church 9 that collapsed on August 3rd. 10 We provide intensive services for 11 families to move families into permanent 12 housing. Since the collapse, 30 families were 13 displaced, including eight newborns. We are 14 now proposing to move two blocks west to 4508 15 Chestnut Street. 16 Since the beginning, Lutheran 17 Settlement House has strived to strengthen the 18 fabric of the communities in Philadelphia in 19 which we work, and we welcome the opportunity 20 to do it again. 21 MR. SORACCA: Good afternoon. 22 I'm John Soracca. I'm Pastor at Christ 23 Dissension Lutheran Church and I just wanted 24 to speak on behalf of my colleagues who are 25 Lutheran Pastors in the City of Philadelphia 34 1 6/15/05 - Bills 050575 & 76 - Public Property 2 and the Southeastern Pennsylvania Senate of 3 the Evangelical Lutheran Church in America. 4 I just want to attest to the work 5 that the Settlement has done over the last 100 6 years. One of the amazing things is the way 7 in which they've been able to maintain 8 families staying together who are in need of 9 shelter and also maintaining dignity and 10 empowering people to get back on their feet. 11 To address the issues that were 12 mentioned earlier about poverty and job 13 placement, the Settlement House also works 14 with the families to get them back on their 15 feet, and I think it's a wonderful work that 16 they do in terms of not only providing the 17 shelter but also the empowerment that they do 18 to get people back on their feet. 19 COUNCILMAN CLARKE: Thank you. 20 MS. VIEIRA: Thank you. 21 COUNCILMAN CLARKE: I just 22 would like to thank you for the wonderful work 23 that you do in the new part of my district 24 over in Fishtown. Continue to do the great 25 work there. 35 1 6/15/05 - Bills 050575 & 76 - Public Property 2 MS. VIEIRA: Thank you very 3 much. 4 COUNCILMAN CLARKE: Any 5 questions of these witnesses by members of the 6 committee? 7 (No response.) 8 COUNCILMAN CLARKE: There being 9 none, thank you very much. 10 Anyone else to testify on this bill? 11 DEPUTY DIRECTOR HESS: No, 12 Mr. Chairman. 13 COUNCILMAN CLARKE: There being 14 none, will the clerk please read the title of 15 the next bill. 16 THE CLERK: Bill No. 050576, an 17 ordinance authorizing the Commissioner of 18 Public Property, on behalf of the City of 19 Philadelphia, to enter into an agreement to 20 sublease from the Philadelphia Municipal 21 Authority a building located at 6901 Woodland 22 Avenue, under certain terms and conditions. 23 COUNCILMAN CLARKE: Before we 24 proceed on the testimony on that bill, 25 Mr. Hess, you'll make sure that you get in 36 1 6/15/05 - Bills 050575 & 76 - Public Property 2 touch with that gentleman and other 3 individuals, and I know Councilwoman Blackwell 4 will continue to have interaction with the 5 community -- 6 DEPUTY DIRECTOR HESS: Yes, 7 Mr. Chairman. 8 COUNCILMAN CLARKE: -- before 9 final passage so we can make sure people know 10 what it is that's being proposed. 11 DEPUTY DIRECTOR HESS: 12 Absolutely, Mr. Chairman. We will work 13 closely with the Councilwoman's office to 14 reach out to all the community associations. 15 COUNCILMAN CLARKE: Thank you. 16 DEPUTY DIRECTOR HESS: Thank 17 you. 18 COUNCILMAN CLARKE: Please 19 proceed. 20 DEPUTY COMMISSIONER HERZINS: 21 My name is John Herzins, Deputy Commissioner 22 of Public Property. I'm here on behalf of 23 Commissioner Schlotterbeck to read our 24 testimony in support of Bill No. 050576, an 25 ordinance authorizing the Commissioner of 37 1 6/15/05 - Bills 050575 & 76 - Public Property 2 Public Property, on behalf of the City of 3 Philadelphia, to enter into an agreement to 4 sublease from the Philadelphia Municipal 5 Authority a building located at 6901 Woodland 6 Avenue, under certain terms and conditions. 7 This bill will permit the City to 8 lease space located at 6901 Woodland for use 9 by the City of Philadelphia's Office of 10 Emergency Shelter Services. 11 The Department supports this 12 measure, and, accordingly, we respectfully ask 13 that City Council approve Bill No. 050576. 14 Thank you. 15 COUNCILMAN CLARKE: Thank you. 16 DEPUTY DIRECTOR HESS: 17 Mr. Chairman, this facility has been in use 18 for a number of years as a shelter for single 19 men. This lease will allow us to do some 20 renovations and to provide a higher quality of 21 space to the single men that are in need of 22 emergency shelter in the West Philadelphia 23 area. 24 We strongly support it and we ask 25 favorable consideration. I think there are a 38 1 6/15/05 - Bills 050575 & 76 - Public Property 2 couple folks here to testify. 3 COUNCILMAN CLARKE: 4 Councilwoman Blackwell. 5 COUNCILWOMAN BLACKWELL: 6 Mr. Chairman, I worked with the President over 7 the years, President Verna, with regard to 8 this shelter at this location, and I told her 9 that I would stay around and speak for 10 President Verna, in whose district it 11 technically is. She does support the project 12 and support the legislation today. 13 COUNCILMAN CLARKE: Thank you. 14 COUNCILWOMAN BLACKWELL: Thank 15 you. 16 COUNCILMAN CLARKE: Any 17 questions of these witnesses for this 18 particular bill? 19 (No response.) 20 COUNCILMAN CLARKE: There being 21 none, anyone else who wants to testify on this 22 bill? 23 Good afternoon. Would you please 24 state your name for the record and proceed 25 with your testimony. 39 1 6/15/05 - Bills 050575 & 76 - Public Property 2 MR. ROBINSON: My name is Nate 3 Robinson, Vice-President of Program for Self 4 Incorporated. 5 Chairman Clarke, City Council, thank 6 you for the opportunity for allowing me to 7 speak to you this afternoon. I just wanted to 8 ask for your support, your continued support, 9 for the ten-year lease for the property at 10 6901 Woodland Avenue. 11 As you know, we do a lot of great 12 things there in supporting the men to become 13 self-sufficient and independent there. We do 14 a lot of good neighbor stuff in terms of 15 working with the community. So we have strong 16 support from the community for the continuing 17 of utilizing this particular property as a 18 homeless shelter for men. 19 I have Ms. Audrey Allen here, who is 20 a long outstanding community leader within 21 their community that would like to say a 22 couple words. 23 MS. ALLEN: My name is Audrey 24 Allen. I've lived in my community for over 75 25 years, and I support Outley House 100 percent. 40 1 6/15/05 - Bills 050575 & 76 - Public Property 2 The fellows there are very good to the 3 neighbors in the neighborhood. They clean up 4 for the elderly people. They clean the 5 streets. They also go to the churches and do 6 things, and I'm for them getting the 75 beds 7 and also for the senior housing that's coming 8 in. I think it's great, because we need it, 9 and that will be just like a little community 10 right there in that center, and I have fought 11 many a years for them. 12 COUNCILMAN CLARKE: Thank you. 13 COUNCILWOMAN BLACKWELL: 14 Mr. Chairman, if I may. 15 COUNCILMAN CLARKE: 16 Councilwoman Blackwell. 17 COUNCILWOMAN BLACKWELL: We 18 worked with Mr. -- in fact, we've worked with 19 both of them over the years, and as was said, 20 Outley, they not only live at that location or 21 come out of that location, but they also work 22 with us across the City on many community 23 projects. They're very positive. They really 24 teach them well. They're polite. They work 25 hard. They help us to clean our communities. 41 1 6/15/05 - Bills 050575 & 76 - Public Property 2 They do all kinds of things to support 3 neighborhood revitalization, and it's a very, 4 very positive group. They've grown so much 5 over the years, and we are happy to support 6 this project. 7 COUNCILMAN CLARKE: Thank you. 8 I, too, would like to thank you for the work 9 you do in my councilmanic district and look to 10 continue to have a long working relationship. 11 MR. ROBINSON: With pleasure. 12 COUNCILMAN CLARKE: Any 13 questions of these witnesses? 14 (No response.) 15 COUNCILMAN CLARKE: There being 16 none, thank you very much for your testimony. 17 MR. ROBINSON: Thank you. 18 COUNCILMAN CLARKE: Anyone else 19 interested in testifying on this particular 20 bill? 21 (No response.) 22 COUNCILMAN CLARKE: There being 23 none, this concludes the public hearing on the 24 Committee of Public Property and Public Works. 25 (Public hearing of Public 42 1 6/15/05 - Bills 050575 & 76 - Public Property 2 Property and Public Works concluded at 12:10 3 p.m.) 4 - - - 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 43 1 6/15/05 - Bills 050575 & 76 - Public Property 2 CERTIFICATE 3 I HEREBY CERTIFY that the 4 proceedings, evidence and objections are 5 contained fully and accurately in the 6 stenographic notes taken by me upon the 7 foregoing matter on June 15, 2005, and that 8 this is a true and correct transcript of same. 9 10 11 12 13 14 ______________________________ 15 MICHELE L. MURPHY 16 RPR-Notary Public 17 18 19 (The foregoing certification of this 20 transcript does not apply to any reproduction 21 of the same by any means, unless under the 22 direct control and/or supervision of the 23 certifying reporter.) 24 25 44 1 6/15/05 - Bills 050575 & 76 - Public Property 2 COUNCIL OF THE CITY OF PHILADELPHIA 3 PUBLIC MEETING - COMMITTEE ON PUBLIC PROPERTY 4 AND PUBLIC WORKS 5 - - - 6 Room 400, City Hall 7 Philadelphia, Pennsylvania 8 Wednesday, June 15, 2005, 12:10 p.m. 9 10 Bill 050575 - an Ordinance authorizing the Commissioner of Public Property, on behalf of 11 The City of Philadelphia, to enter into an agreement to sublease from the Philadelphia 12 Municipal Authority a building located at 4508 Chestnut Street, under certain terms and 13 conditions. BILL 050576 - an Ordinance authorizing the 14 Commissioner of Public Property, on behalf of The City of Philadelphia, to enter into an 15 agreement to sublease from the Philadelphia Municipal Authority a building located at 6901 16 Woodland Avenue, under certain terms and conditions. 17 PRESENT: 18 COUNCILMAN DARRELL L. CLARKE COUNCILMAN JUAN F. RAMOS 19 COUNCILMAN FRANK RIZZO COUNCILWOMAN DONNA REED MILLER 20 COUNCILWOMAN MARIAN B. TASCO COUNCILWOMAN JANNIE L. BLACKWELL 21 23 V A R A L L O Incorporated Litigation Support Services 24 1835 Market Street, Suite 600 Philadelphia, PA 19103 25 215.561.2220 215.567.2670 45 1 6/15/05 - Bills 050575 & 76 - Public Property 2 COUNCILMAN CLARKE: We will now 3 move into the public meeting. 4 Councilwoman Miller, can I please 5 ask for a motion on Bill 050575. 6 COUNCILWOMAN MILLER: Thank 7 you, Mr. Chair. I move that Bill No. 050575 8 be reported out of this committee with a 9 favorable recommendation and further request a 10 rules suspension so as to permit first reading 11 at our next session. 12 COUNCILMAN RAMOS: Second. 13 COUNCILMAN CLARKE: It being 14 moved and seconded, all approved? 15 COUNCIL MEMBERS: Aye. 16 COUNCILMAN CLARKE: All 17 against? 18 19 20 21 22 23 24 25 46 1 6/15/05 - Bills 050575 & 76 - Public Property 2 (No response.) 3 COUNCILMAN CLARKE: The ayes 4 have it. Bill 050575 will be reported out of 5 this committee with a favorable recommendation 6 with a rules suspension as to allow reading at 7 the next session of Council. 8 Councilwoman Miller. 9 COUNCILWOMAN MILLER: Thank 10 you, Mr. Chair. I move that Bill No. 050576 11 be reported out of this committee with a 12 favorable recommendation and further move that 13 the rules of Council be suspended so as to 14 permit first reading at our next session. 15 COUNCILMAN RAMOS: Second. 16 COUNCILMAN CLARKE: Thank you. 17 All approved? 18 COUNCIL MEMBERS: Aye. 19 COUNCILMAN CLARKE: Those 20 opposed? 21 (No response.) 22 COUNCILMAN CLARKE: I'm sorry. 23 Did you want the lease -- 24 COMMISSIONER SCHLOTTERBECK: 25 Yes. I was going to ask -- 47 1 6/15/05 - Bills 050575 & 76 - Public Property 2 COUNCILMAN CLARKE: -- 3 incorporated as amendments? 4 COMMISSIONER SCHLOTTERBECK: 5 Yes, I do. 6 COUNCILMAN CLARKE: We have to 7 go back. It was on the first bill; is that 8 correct? 9 COMMISSIONER SCHLOTTERBECK: 10 Correct. Both have amendments and both have 11 the terms and conditions. 12 COUNCILMAN CLARKE: We have to 13 start all over again. 14 COMMISSIONER SCHLOTTERBECK: As 15 an amendment to the original bill. Correct. 16 COUNCILMAN CLARKE: 17 Councilwoman Miller, we're going to ask for a 18 motion on the amendment that was the exhibit 19 that will be attached to Bill 050575. 20 COMMISSIONER SCHLOTTERBECK: 21 Correct. 22 COUNCILWOMAN MILLER: I move 23 that the amendment to Bill 050575 be approved. 24 COUNCILMAN RAMOS: Second. 25 COUNCILMAN CLARKE: It being 48 1 6/15/05 - Bills 050575 & 76 - Public Property 2 moved and seconded, I ask for a vote on the 3 amendment to 050575. 4 COUNCIL MEMBERS: Aye. 5 COUNCILMAN CLARKE: Those 6 opposed? 7 (No response.) 8 COUNCILMAN CLARKE: The ayes 9 have it. 10 Councilwoman Miller, can I ask for a 11 motion on Bill 050575 as amended. 12 COUNCILWOMAN MILLER: I move 13 that Bill 050575 as amended be reported out of 14 this committee with a favorable 15 recommendation -- 16 COUNCILMAN RAMOS: Second. 17 COUNCILWOMAN MILLER: -- and 18 further move that the rules of Council be 19 suspended so as to permit first reading at our 20 next session. 21 COUNCILMAN CLARKE: It being 22 moved and seconded, all approved? 23 COUNCIL MEMBERS: Aye. 24 COUNCILMAN CLARK: Those 25 opposed? 49 1 6/15/05 - Bills 050575 & 76 - Public Property 2 (No response.) 3 COUNCILMAN CLARKE: Bill 050575 4 will be reported out of committee with a 5 favorable recommendation and a rules 6 suspension as to allow reading at the next 7 session of Council. 8 Councilwoman Miller, can I please 9 ask for a motion on the amendment to Bill 10 050576. 11 COUNCILWOMAN MILLER: I move 12 that the amendment for Bill 050576 be 13 approved. 14 COUNCILMAN RAMOS: Second. 15 COUNCILMAN CLARKE: It being 16 moved and seconded, all approved? 17 COUNCIL MEMBERS: Aye. 18 COUNCILMAN CLARKE: Those 19 opposed? 20 (No response.) 21 COUNCILMAN CLARKE: The ayes 22 have it. The amendment to Bill 050576 has 23 been approved. 24 Councilwoman Miller, can I please 25 ask for a motion on Bill 050576 as amended. 50 1 6/15/05 - Bills 050575 & 76 - Public Property 2 COUNCILWOMAN MILLER: I move 3 that Bill 050576 as amended be reported out of 4 this committee with a favorable recommendation 5 and further move that the rules of Council be 6 suspended so as to permit first reading at our 7 next session. 8 COUNCILMAN RAMOS: Second. 9 COUNCILMAN CLARKE: It being 10 moved and seconded, all approved? 11 COUNCIL MEMBERS: Aye. 12 COUNCILMAN CLARKE: Those 13 opposed? 14 (No response.) 15 COUNCILMAN CLARKE: Bill 050576 16 will be reported out of committee with a 17 favorable recommendation. 18 This concludes the public meeting. 19 Thank you all very much. 20 COMMISSIONER SCHLOTTERBECK: 21 Thank you. 22 DEPUTY DIRECTOR HESS: Thank 23 you, Mr. Chairman. Thank you, committee. 24 (Public meeting of Committee on 25 Public Property and Public Works concluded at 51 1 6/15/05 - Bills 050575 & 76 - Public Property 2 12:15 p.m.) 3 - - - 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 52 1 2 CERTIFICATE 3 I HEREBY CERTIFY that the 4 proceedings, evidence and objections are 5 contained fully and accurately in the 6 stenographic notes taken by me upon the 7 foregoing matter on June 15, 2005, and that 8 this is a true and correct transcript of same. 9 10 11 12 13 14 ______________________________ 15 MICHELE L. MURPHY 16 RPR-Notary Public 17 18 19 (The foregoing certification of this 20 transcript does not apply to any reproduction 21 of the same by any means, unless under the 22 direct control and/or supervision of the 23 certifying reporter.) 24 25