COUNCIL OF THE CITY OF PHILADELPHIA PUBLIC HEARING COMMITTEE OF THE WHOLE COMMITTEE ON FINANCE - - - Room 696, City Hall Philadelphia, Pennsylvania Monday, June 2, 2003 11:03 a.m. - - - Bill No. 030372, an ordinance 8 authorizing the Mayor, on behalf of the City, to file applications with the United States Department of Housing and Urban Development (HUD) for a Community Development Block Grant (CDBG) and to use the Section 11 108 Loan Guarantee Program; authorizing the Housing Director to file applications with HUD to participate in the HOME Investment Partnership Program and the Emergency Shelter Grant (ESG) Program; authorizing the Housing Director, on behalf of the City, to file an application with HUD for a Housing Opportunities for Persons with AIDS (HOPWA) grant; authorizing the Managing Director, on behalf of the City, to file an application or applications to obtain grants from The Commonwealth of Pennsylvania, under the Act of April 12, 1956, P.L. 1449, Section 4, as amended, to prevent and eliminate blight; and, authorizing the Mayor, the Housing Director and the Managing Director to enter into all understandings and assurances contained in such applications and take all necessary action to accept the grants, all under certain terms and conditions. - - - 2 Resolution 030306, a resolution approving the annual Program Statement and Budget for the expenditure of the Neighborhood Transformation Initiative Bond Proceeds for Fiscal Year 2004. - - - Resolution 030429, a resolution 7 authorizing the Philadelphia Redevelopment Authority to use NTI bond proceeds to acquire certain properties, under certain terms and conditions. - - - PRESENT: COUNCIL PRESIDENT ANNA C. VERNA COUNCILWOMAN JANNIE L. BLACKWELL COUNCILWOMAN BLONDELL REYNOLDS BROWN COUNCILMAN DARRELL L. CLARKE COUNCILMAN DAVID COHEN COUNCILMAN FRANK J. DI CICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN JAMES F. KENNEY COUNCILWOMAN DONNA REED MILLER COUNCILMAN MICHAEL A. NUTTER COUNCILMAN ANGEL ORTIZ COUNCILMAN FRANK RIZZO COUNCILWOMAN MARIAN B. TASCO - - - V A R A L L O Incorporated Litigation Support Services 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 3 6/02/03 - Whole/Finance P R O C E E D I N G S - - -
The Committee of the Whole and the Finance Committee are now in public hearing regarding Bill Numbers 030372, Resolution 030306, and Resolution 030429. I would ask Mr. McPherson to please read the titles. MR. McPHERSON: Bill No. 030372, an ordinance authorizing the Mayor, on behalf of the City, to file applications with the United States Department of Housing and Urban Development (HUD) for a Community Development Block Grant (CDBG) and to use the Section 108 Loan Guarantee Program; authorizing the Housing Director to file 17 applications with HUD to participate in the HOME Investment Partnership Program and the Emergency Shelter Grant (ESG) Program; authorizing the Housing Director, on behalf of the City, to file 21 an application with HUD for a Housing Opportunities for Persons with AIDS (HOPWA) grant; authorizing the Managing Director, on behalf of the City, to file an application or applications to obtain grants from The Commonwealth of 4 6/02/03 - Whole/Finance Pennsylvania, under the Act of April 12, 1956, P.L. 1449, Section 4, as amended, to prevent and eliminate blight; and, authorizing the Mayor, the Housing Director and the Managing Director to enter into all understandings and assurances contained in such applications and take all necessary action to accept the grants, all under certain terms and conditions. Resolution 030306, a resolution 11 approving the annual Program Statement and Budget for the expenditure of the Neighborhood Transformation Initiative Bond Proceeds for Fiscal Year 2004. Resolution 030429, a resolution 17 authorizing the Philadelphia Redevelopment Authority to use NTI bond proceeds to acquire certain properties, under certain terms and conditions.
Thank you. Miss Smith, you're going to testify first. Please identify yourself for the record. Oh, I'm sorry. Councilwoman Blackwell would like to make a brief statement. 5 6/02/03 - Whole/Finance
Thank you very much, Madam President. Good morning. We are here today to review the Office of Housing and Community Development's Consolidated Plan and the Neighborhood Transformation Initiatives annual program statement. As some of you may know, this public hearing has traditionally been assigned, reviewed and handled by the Committee on Finance, of which I am Chair. However, because of the importance of the issues involved, President Verna has agreed to allow this hearing to be jointly reviewed by the Finance Committee and the Committee of the Whole. Both Committees will be responsible for the approval of the plan and the statement. So that includes CDBG, community development block grant application, as well as NTI or the Neighborhood Transformation Initiative. With that said, what we hope today is that the administration will agree to present their testimony. And if my colleagues will agree, maybe we can have questions and answer to them for 6 6/02/03 - Whole/Finance approximately an hour. We would like to also.. Well, since it's already 11:15... We can only request that. We have so many people here to testify, that maybe we allow them to testify, and the Administration be available all day, to return with question and answer. Also, we have been contacted by all of these dealing with Bill Number 030397 on the Free Library, which deals with the lease, focuses on the leaseback sale agreement. And those folks are all due here to also exacerbate our small space. And they are requesting to go on about 3:00, if the Committee agrees to it, and then go back to deal with the libraries, and then go back to our full hearings on CDBG and NTI. Thank you very much for your consideration.
Thank you, Miss Smith. Kindly identify yourself for the record and proceed with your testimony.
My name is Patricia Smith. I'm Director of Neighborhood Transformation. 7 6/02/03 - Whole/Finance Good morning, Madam President; Madam Chairperson; and Members of the Committee of the Whole and Finance Committee. I'm here today testifying in support of Resolution 030306. Mayor Street's Neighborhood Transformation Initiative, an unprecedented and nationally acclaimed initiative, to make Philadelphia neighborhoods great places to live, learn, shop, work and play, is making a difference. The past year has been an exciting and challenging time for those of us who are part of the NTI team. For me personally, one of the most rewarding experiences is the tremendous amount of collaboration and teamwork that is helping NTI to succeed. I wish to take a moment to acknowledge the hard work and dedication of my colleagues throughout City --
Excuse me. Excuse me, please. The Chair recognizes Councilman Nutter. 8 6/02/03 - Whole/Finance
Thank you, Madam Chair. And Miss Smith, I apologize for interrupting. I think there's a bit of a search going on for some of the testimony. I've seen yours separate. And then is the rest of the testimony in the book that we received? Is that what's going on?
What we've done, we have the Administration's full testimony, which we sent over on Friday, along with some supporting documents that were requested at various points during our briefing. My testimony is an overview, and it should have been given out with these specs. I'm going to highlight the key parts of the program statement.
Okay. Was this sent over on Friday also? 9 6/02/03 - Whole/Finance
Not the... The testimony of the Administration was sent over on Friday. And what's behind it are a series of supporting documentations, items, and information that were requested by various Councilpersons during the course of our briefing over the past week. So we tried to combine --
The rest of the testimony you're talking about, is that behind Tab 1?
Yes. It says the testimony of Administration. We're not planning to read that full testimony. It's very detailed and specific.
So I'm providing the highlights and overview. 10 6/02/03 - Whole/Finance
I wish to take a moment to acknowledge the hard work and dedication of my colleagues throughout City government who have spent countless hours in the trenches executing the administrative details of NTI. I give my heartfelt thanks to each and every one of you. Recognizing that neighborhoods have different needs and priorities, NTI is committed to a community planning effort to inform a public of its revitalization activities. Planning helps communities sort through and prioritize needs, while assisting the City in allocating resources to meet those needs. In Fiscal Year 2003, the City Planning Department began a comprehensive community planning process in neighborhoods and 22 three areas, known as the NTI Planning Areas. 23 Some of these areas had existing 24 community plans completed by neighborhood based 25 organizations or District Council offices. Other 11 6/02/03 - Whole/Finance areas did not. For those with existing plans, the previous planning work served as a framework for the delivery of planning services. Where plans were never developed, where planning was not comprehensive or where planning required updating or greater level of detail and modification, as was in the case in Strawberry mansion, one of our neighborhoods, a greater level of planning services are being provided. Of course, a transformation of neighborhoods cannot take place without private investment. Today, standing with the City under the NTI banner, are Fannie Mae and Freddie Mac, CDCs, the National Trust for Historic Preservation, private developers, and the Philadelphia Housing Authority. Citizens Bank, PNC, Fleet, United, Wacovia/First Union and Beneficial are investing more than $120 million in loans and services. CDCs, the guerrilla fighters in the war against blight and divestment, have built more than 839 units of housing since Mayor Street took office, with another 1800 units planned. 12 6/02/03 - Whole/Finance Because of NTI, there is a renewed interest in the City of Philadelphia by residential home builders. And we are happy to welcome to the NTI team Western Development and OKKS Michaels, a joint venture comprised of residential home builders, Orleans Korman, and the premiere affordable housing developer, Michael's Development Company. Mayor Street is keeping his commitment to make Philadelphia neighborhoods safer and cleaner, by closing down open air drug markets, taking more than 200,000 abandoned cars off the street, removing graffiti from more than 308,000 buildings and fixtures, pruning 15,000 trees, and removing 7,400 dangerous trees, removing more than 25,00 tons of debris from vacant lots, and planting new trees on streets and parks and on vacant lots. But most important, the difference that NTI is making can be seen in a growing community spirit and optimism of everyday people. We had wanted to bring forward, Madam Chair, Mrs. Anita Hahn, but she had a family emergency this morning. She works in Germantown. 13 6/02/03 - Whole/Finance She lives in the 2400 block of Blakemore Street, and she just wanted to be able to tell her story. She may be able to make it for the public testimony component. The remainder of my testimony will be devoted to providing a general overview of our progress since June 2000 when City Council approved the first year NTI budget and the Administration plans for FY 2004. On Friday the Administration transmitted more specific testimony in support of the Resolution, a copy of which we've added to your notebook. For fiscal year 2004 the Administration is seeking City Council authorization to spend up to $106 million of NTI bond funds on a variety of activities to help Philadelphia neighborhoods to meet their full potential by demolishing dangerous buildings, fostering redevelopment through land assembly, investing in housing and neighborhood preservation activities and improving the City's information technology and management information systems.
In addition, NTI will continue to 14 6/02/03 - Whole/Finance tap an array of Federal, state and local resources to help eliminate blight, increase investment and development, and improve neighborhood services. The most significant increase is the acquisition line item to accommodate the demand for land banking and development projects. Originally we allocated $50 million for acquisition. Now we propose committing $74 million over a five-year period. The increase acquisition budget warrants issuing more taxable bonds. As a result, the City now anticipates issuing a total of $275 million in bonds instead of the $295 million over the life of the program. This change is due in part to the fact that taxable bonds require larger annual payments to service the debt and generally carry higher interest rates. Our vacant property demolition and stabilization programs have not progressed as quickly as we projected a year ago. Consequently, the Administration has revised our annual production goals for these activities. 15 6/02/03 - Whole/Finance In FY 2004 the Administration expects to demolish between 1400 and 1600 dangerous residential buildings and stabilize between 150 to 200 properties. We have revised the average per property demolition cost to reflect actual experience during the past year. Because of the pattern of vacancy that are finding in neighborhoods, more hand demolitions are necessary, and this increases costs significantly. The budget for residential demolitions total $28 million and $4 million for large building demolitions. Unfortunately, demolition is a necessary evil. Abandoned for decades, more than 7,000 houses present a serious threat to the public safety. Still, an important lesson learned during the past year is that the success of a large-scale demolition program is heavily dependent upon an informed citizenry, one which understands the factors that are considered when a decision is made to tear down a building. 16 6/02/03 - Whole/Finance Often a person may not see indicators of the structural defect or from the ground they cannot see the gaping holes in the roof, as documented by the flyover photographs of Tioga and interior pictures of eminently dangerous buildings. And you'll find some of these photographs under Tab 3 of your notebook. Good communication takes time. Even if it means falling short of our production goals, the Administration is committed to taking time to listen, to have substantive cooperative dialogue with community leaders and Council Members. Stabilization activities started later than expected, due to the problems that were encountered in launching our residential demolition program. In January the Administration asked the Redevelopment Authority to assume the role of lead agency for the NTI vacant property stabilization activities. Since then, the RDA, Department of Licenses and Inspections, Phil-International, have inspected more than 200 properties to determine if they met the criteria set out for the program. 17 6/02/03 - Whole/Finance And you can find this criteria on in your notebook, and it was also included in last year's notebook -- 32 of your program statement and budget. Also, of the 200 properties, 82 fulfilled the program's eligibility criteria, and notice to proceed to begin stabilization work has been given. are near completion. And we 10 provided status reports on both stabilization and 11 demolition activities in the briefing book which 12 is the notebook. 13 Under NTI the quality of demolition work has improved dramatically. The handheld system has revolutionized field inspections by L & I. We, in fact, have a device here which we're willing to share around and pass with Council or invite you to demonstrations. But this handheld device enables inspectors to transmit data and photos from the field almost instantaneously.
In addition, we have revised the specifications for demolition work, to require grading, installation of stop soil, and planting of grass seed to slow growth of weeds. 18 6/02/03 - Whole/Finance Where appropriate, post and rail wood fencing will be installed on lots resulting from demolition activity. We actually have some photos, again, that we handed out of the post demolition treatments under the NTI new specifications. Improvements to our bidding process are increasing accountability and efficiency. Contractors now bid on the entire demolition procedure, including asbestos removal and party wall extremity. These changes are proving to be effective, in that there has been noticeable decreases in the number of demolition related complaints from neighborhood residents. Also, these changes in bidding processes are helping the Administration to meet our economic opportunity goals. To date, the City has awarded more than $6 million in demolition contracts under the NTI Demolition Program. Of this amount, 40 percent have been subcontracted to MBE firms and 38 percent to WB firms. On the two current NTI demolition projects in Mantua and Frankford, hours worked by 19 6/02/03 - Whole/Finance Philadelphia residents exceed 80 percent. Hours worked by minorities on these two projects represent 55 percent and 63 percent of the total hours worked. In FY 2004 the City will work closely with the African American Chamber of Commerce to maximize the participation of minorities, women, and disabled businesses, and the opportunities that arise out of our demolition activity, particularly focusing on grooming prime contractors. Philadelphia Revitalization Education Program will help with community residents to secure employment on demolition and other construction projects related to NTI. It will work with contractors, union representatives, training providers to maximize employment opportunities. More than 31,000 vacant lots dot the landscape of our neighborhoods. Several years ago, the Pennsylvania Horticultural Society began to systematically address the enormous problem of vacant land in Philadelphia. They conducted studies, brought 20 6/02/03 - Whole/Finance stakeholders together to plan a comprehensive system for vacant land management, and demonstrated effective methods of cleaning and greening vacant land in several neighborhoods, including New Kensington and American Street Empowerment Zone. The Administration is committed to building upon and extending this innovative work. At our request, PHS developed a conceptual framework for the management of open space which we are calling the Green City Strategy. The Green City Strategy is a comprehensive approach that will involve residents, organizations, and businesses throughout the City. You can see examples of the Administration's work with PHS around the City. Altogether 15 acres of land have been stabilized by planting grass seeds and trees, and posts and rail wood fencing. This interim stabilization treatment is reducing short dumping and improving the curb appeal of many neighborhoods. In fiscal year 2004 the 21 6/02/03 - Whole/Finance Administration plans to expand upon its vacant land stabilization work. During the summer we'll be asking District Council members to submit requests for land stabilization work in their district. A committee comprised of Planning Commission, PHS, the Managing Director will review the requests, including the fencing of existing lots. We are aggressively seeking Federal and private funding for greening activity. S. Forestry Services. The City will be contributing about $3 million to its lot cleaning and greening activities. Public ownership means greater control of one of our most valuable resources, land. Public ownership of this land will allow us to manage and more efficiently maintain it more effectively, and over time decide the best way to use it in the future.
With Council's approval, the City is 22 6/02/03 - Whole/Finance acquiring more than 5500 properties in the first year. Before NTI, the City's business practices regarding the acquisition of vacant land were not well organized. The NTI land acquisition team is working diligently with Members of Council to identify thousands of parcels, mostly abandoned vacant lots, to include in this historic land acquisition process. The principles that guide our decision making are set out in your NTI program statement and budget for FY 2004. You can find that on . In addition, the RDA completed work on a baseline data base to track condemnation activity. The baseline system tracks all relevant data about a property such as name, description, Council District, budgets, the developer. It contains a history of actions taken, which will enable anyone to access the record, immediately understand where the property is in the acquisition process. The RDA invites Members of Council and your staff to a demonstration that they are 23 6/02/03 - Whole/Finance organizing for the system in July, on July 10, 2003. The system represents an important step forward for the City in our efforts to manage property acquisition data. The next step is to develop a web enabled and fully integrated system. An RFP has been drafted by Moise and is under review. Strong and healthy neighborhoods will only happen if the City facilitates housing investment, within the context of a comprehensive strategy for both preservation and redevelopment. Based upon an analysis of our real estate markets by the Reinvestment Fund, the Administration is developing and implementing appropriate roles for the City government which facilitate a healthy real estate market by encouraging the buying of homes, preserve existing housing stock by directing resources to blocks and neighborhoods that are showing signs of decline, creating new urban communities by fostering large scale development, and providing quality housing options for individuals of all incomes and needs. Under the leadership of Secretary of 24 6/02/03 - Whole/Finance Housing and Neighborhood preservation, Kevin Hanna, the City is repositioning its housing and community development agencies to meet measurable five-year production goals around these organizing principles. The face of Philadelphia neighborhoods is being transformed by large scale development. Six are under way. We've also provided some background material on those six. They are Mill Creek, Brewerytown, Capehart, Tasker, Grays Ferry, PHA Development, the work by Universal Communities in South Philly, and the Cecil B. Moore Home Ownership Zone. About half of these new units will be rental, including low income and senior. The other half will be home ownership. A crucial component of a vigorous real estate market is the consistent building of market rate housing. Market rate housing is that which is constructed and purchased without using government subsidy. In many parts of the City, private developers are rehabbing and building homes to sell on the open market. 25 6/02/03 - Whole/Finance To help foster market rate transactions, the Administration partnered with Center City District to launch the Neighborhood Marketing Campaign, which was unveiled last week. And it's a pilot program to market six neighborhoods to potential residents in the Greater Philadelphia Region. In addition, the Administration is using NTI bond proceeds to support programs that create home ownership opportunities. Funding for the Settlement Assistant Grant Program is being restored. We awarded a $250,000 contract to GPUAC, to service an intermediary to design and market an employer-assisted housing program. GPUAC will encourage the Philadelphia business community to adopt EHA programs. The NTI partnership with Citizens Bank resulted in a pledge to make more than $50 million available in residential mortgages at below market rates in targeted census tracts over the next five years.
NTI bond proceeds are being used to stabilize neighborhoods and blocks that are 6/02/03 - Whole/Finance beginning to show decline, by rehabbing vacant properties. One such project is the Southwest Revitalization Initiative, involving Presby Homes and the Board of City Trusts. Last fall Council approved the condemnation of 56 properties for rehab, as part of the RDA's home ownership rehab program, and additional properties will be acquired in the next phase to support this initiative in the fall. Under NTI, the City is also offering financial assistance to current homeowners. Perhaps you've seen the Great City, Great Rates billboards advertising the new and improved PHIL loan program. The PHIL program lends up to $25,000 for home repairs. Under the new guidelines, families earning less than 115 percent medium, area medium income, which is about $72,000 for a family of four, can get a three percent loan. 2 million of loans in the last fiscal year or in the fiscal year 2003. Please help us spread the word about PHIL loans. com, as well as a 800 number or 877 number that you can call. In fiscal year 2003, the Administration allocated $2 million for the Targeted Basic System Repair Program. And the organizations, ten organizations, selected to administrate it will be eligible for continued funding in 2004. The Administration's in the process of executing the contracts with these community based organizations who are competitively selected. In addition, $1 million would be available to provide for basic systems repair programs to homeowners who live in areas that are targeted for large scale development activity. A grant from the Freddie Mac Foundation helped set up the public information hotline for homeowners who are planning to take out home improvement loans or debt consolidation loans or suspect they are victims of predatory loans. To date, more than 2300 individuals called the hotline for help. Callers to the Don't 28 6/02/03 - Whole/Finance Bar Trouble Hotline are given advice and are referred to a network of housing counseling agencies, funded by the City, Community Development Block Grants. Because of a generous grant from Citizens Bank, the Don't Bar Trouble Hotline will be promoted through a series of advertisements in FY 2004. NTI bonds help create two new innovative loan products to combat predatory lending. The City has executed contracts with GPUAC, who have brought together a consortium of banks to provide home improvement financing to borrowers who have marginal credit history and may not be eligible for a PHIL loan. The Reinvestment Fund, Acorn, and the Housing Counseling Association are getting $250,000 to help refinance the victims of predatory loans already. In order for the City to better coordinate the delivery of City services and implement cost saving technology reforms, consistent data management practices, and an accurate digital parcel map are needed. NTI Bonds are bringing us closer to 29 6/02/03 - Whole/Finance the implementation of the Unified Land Record System. This system means that any department wishing to access information linked to a specific property will be working from the same exact map of that property, block, or neighborhood as all other departments. Selected for their professional expertise, extensive knowledge of the City's complex data bases, and information systems and cost efficiency, the vendors for this project consist of two prime contractors and three subcontractors and who are minority certified. The total participation to date is percent. 16 Installation of the NTI Project 17 Administration web site has been completed, the 18 server to support that web site. 19 The next step includes the training 20 of the system administrator, data transfer from 21 Hill International and the Reinvestment Fund to 22 the City, purchase of appropriate hardware and 23 software for City Council work stations, and 24 training for City Council staff is being planned for the fall.
30 6/02/03 - Whole/Finance In conclusion, I would like to mention that the transformation of a neighborhood into stronger, better communities involve more than housing development. It requires investments in public safety, schools, businesses, and social services. Under Mayor Street's leadership, the City is investing hundreds of millions of dollars in public safety through Operation Safe Streets and business expansion, by providing a variety of tax incentives and other financial resources through the renewal community, in the construction of new public housing units and new market rate housing, and the renovation of construction, schools, and children, through an array of after-school programs and family support. And as I conclude my remarks, I want to return to what I said in the beginning. The NTI is finding innovative solutions, teamwork, cooperation, and partnerships with a variety of stakeholders. No one person, community organization, government agency, or project can get the job done alone. 31 6/02/03 - Whole/Finance Thank you, Madam Chairperson and Madam President, and Members of the Committee. I would like to turn the mike over to my colleague, Kevin Hanna, who will walk you -- give you an overview of the block grant.
Before you start your testimony, Mr. Hanna, I think the noise level is much too high. I think we have to give the speaker the courtesy of listening to what is being said. Do we have copies of your testimony? Is it in the...
We did bring extra copies over that we can distribute. If we need to make more... I know we've given out quite a number.
What page? Because we just got the book today, so it's rather difficult to... 32 6/02/03 - Whole/Finance
My testimony will essentially summarize what's in the Consolidated Plan. The Consolidated Plan certainly should have been distributed by or before Friday.
We didn't get it. I got Mr. Traylor's testimony by itself, along with a Lee Captain. That came together on Friday. I didn't see anything else.
We did get something about 4 o'clock on Friday; and whatever we received was distributed. And the books were received this morning.
The books were distributed this morning. Mostly they were just supporting documents.
That's what I just said. Is it the same testimony that's in the book? 34 6/02/03 - Whole/Finance
Mr. Hanna, what was delivered this morning? Is that the same testimony that was sent on Friday?
Yes, there was. In addition to -- In addition, this morning, certain other additional background was delivered. But the testimony, that was delivered on Friday. It should have been the same as was delivered this morning.
Does everyone have a copy now of Mr. Hanna's testimony? (Chorus of "no.")
It's in the book under Tab 1. The pages aren't numbered so...
Council President, there are two different testimonies: One testimony that's included in the NTI book. The testimony that I'm about to give now is on the CDBG Con 35 6/02/03 - Whole/Finance Plan.
We're going to have to make copies of this so that we can distribute it.
While we're waiting for the copies of Mr. Hanna's testimony -- It's different... Councilman Cohen, it's different than what's in the book.
Oh, okay. So we're going to have to wait until we get copies of your testimony. And is someone having them 36 6/02/03 - Whole/Finance made now?
I'm sorry. Councilman, I can't hear a word you're saying.
Madam President, I'm asking, in view of the size of this development program, is there any testimony by the Mayor or by the head of the RDA, which is going to administer the program?
Miss Smith has testified on behalf of the Mayor's Office. Mr. Wetzel is here prepared to respond to specific issues, if you have questions about the acquisition, the Encapsulation Program --
Well, I'd like to ask the people that have the final say on the decision-making, which to me clearly is the Mayor, or secondly, the person who is the chair of the agency to which this program is assigned for enforcement. In view of Mr. Dougherty's well-known tendency toward enforcing a discriminatory policy in the union he heads, I'm 37 6/02/03 - Whole/Finance concerned about this program, if it's in the RDA's hands. And I would like to know why the Mayor isn't here. This seems to be a tremendously big program and a very important one to the people in Philadelphia who have needed affordable housing for a long, long time. And the beauty of the NTI program, when it's successful, will be that it's going to afford a lot of affordable housing. But we'd like to know from those that make the decisions what their plans are and know the best -- in the best positions to make the answers. Are they treating this as just a routine little program?
No, sir, we're not. My name is Patricia Smith, for the record. The NTI bond program, while the bonds are issued by the Redevelopment Authority, the oversight of that program is housed within the Office of the Mayor. I'm a member of the Mayor's staff, and I'm the Director of Neighborhood Transformation Initiative. 38 6/02/03 - Whole/Finance There are a variety of departments within the City, as well as the Redevelopment Authority, that are part -- that participate in implementing NTI. As we know, the Redevelopment Authority is that agency of government which is empowered to issue bonds and also to... has the power of eminent domain. So they are an important agency. Mr. Wetzel is here and is available to answer specific questions with respect to his agency. He's the Executive Director.
But suppose there are disputes. Who settles them? Within the Administration, who would be the voice that would make the final decision? Isn't that what Council's entitled to hear?
I am here speaking on behalf of -- If you want to... You know, speaking more directly on behalf of the Mayor.
Well, that's not the same as having the person who actually makes the decision, is it?
No, but the Mayor 39 6/02/03 - Whole/Finance does not plan on coming to testify.
He does not plan on. I believe it's... He's not coming today. If there are questions that I can't answer, we'll try to provide written responses from the Mayor.
All you can do, with respect for yourself as a person and for your position, is give us what you believe is going to be the Mayor's answer. But suppose we wanted to ask the Mayor what his view is and what will he do if a certain conflict develops. You can only express your opinion and maybe your hope as to what the Mayor might do. But the Mayor, I think, is the only one in a position to do it. Seems to me, with this program being the size it is and as important as it appears to be, that the Mayor would be here to come and answer the questions directly. I'd like to know the answer to the question to the role of RDA in this, because the minority community is very interested in every aspect of this. Everybody in Philadelphia is. 40 6/02/03 - Whole/Finance But the minority community has a special interest because the minority community, beyond all other communities, has the most significant problem of affordable housing. And when those questions arise, we ought to be able to ask someone whose record is clear with respect to their interests.
If there are questions that come up that require his specific response, I can get those responses for you.
But you can not serve in the role. We can cross-examine the Mayor as to an answer, but if you give us his answer and we have a question about it, how do we go about questioning that; asking you again for that? And then you go back again to the Mayor? That's not the way you really get answers to questions. (Applause.)
Well, I don't see how Council is going to be in a position to take any action on this unless we get direct answers. The only one I know that can give us the answers 41 6/02/03 - Whole/Finance is the Mayor. And I believe the Mayor ought to be here explaining the program, explaining how we will deal with all the questions, rather than to have surrogates come here, on a matter of this significance.
Well, we've tried to bring to you today the people who have the responsibility for implementing myriad aspects of these programs. Mr. Wetzel is here today. Mr. Wetzel and the staff at the Redevelopment Authority are the ones who have firsthand knowledge and are responsible for the acquisition program. They have managed to put together a program for the acquisition of over 5,000 properties. Miss Smith is here today talking about some of the financing initiatives that have been put in place in connection with various organizations and lending institutions in Philadelphia. She's in a position to give you firsthand information about what's going on in that respect. 42 6/02/03 - Whole/Finance Mr. Hanna is working on the development of over 2,000 units of large-scale development. What the Administration has attempted to do is bring to the table the people who have day-to-day responsibility for implementing the Mayor's initiative. To the extent that there are broader questions that you want to ask, we will try to arrange some other forum for you to engage in that kind of dialogue with the Mayor.
Well, the Home Rule Charter explains a way in which Council and the Mayor resolve questions. The Mayor appears at Committee hearings --
-- and the Council questions him, and they arrive at solutions.
I don't believe... Well, I believe it is not traditional for the Mayor to come to City Council to represent the Administration on a day-to-day basis with issues pertaining to the operations of the 43 6/02/03 - Whole/Finance Administration.
Well, it seems to me something that involves $300 million in loans should not be characterized as a day-to-day transaction. It seems to me to be a major transaction. It's been touted by the Administration as the only one in the country with the daring and the determination and the goal of achieving a change in our neighborhoods. It is to me the presentation by the Administration of the centerpiece of its work. It's a great idea in concept. We want to know how it gets filled out. We know -- We appreciate Mr. Wetzel. We appreciate you. We appreciate Pat Smith. We think you're all fine public servants. But we know one thing: When the rubber meets the road, it's the Mayor that makes the decision. And we think he ought to be here to explain it and be in a position to tell us about the goals of the program and how he's going to deal with each situation. I think that's why so many people are here today. They want to hear 44 6/02/03 - Whole/Finance from the Mayor. (Applause.)
Councilman, I think you've made your point. And we do have not only the people in this room but also people in the anteroom. I think we would want to give them all an opportunity to be heard. So, if Mr. Hanna has copies of his testimony, I would like them to be circulated so we can proceed with the hearing.
We went to get some copies made, Madam President, and they haven't come back with the copies that have been made. If I may, we can talk about that component of the NTI initiative with Mr. Hanna's testimony that was in the notebook. I mean, that is the part which deals with some of the work around the development activity and his role with respect to overseeing realignment.
Does everyone have a notebook? Does everyone have a 45 6/02/03 - Whole/Finance copy of the notebook? Councilman Cohen, do you have a copy of the notebook?
Okay. I think we could refer to Kevin Hanna's testimony in the book. Mr. Hanna, please proceed.
I'm sorry, Councilman, if you don't talk into the microphone, we can't hear you.
I want to say one thing, that my memory that when... When the current Governor and then the Mayor came to Council on the major stadium project which everybody knows I fought against; but at least Mayor Rendell came and openly faced City Council and subjected himself to questions about the stadium project, it seems because that was his major campaign issue and his major mark of his Administration, that public works program. This is a major public works program. And I don't understand presenting this as a great advance, the greatest advance in any 46 6/02/03 - Whole/Finance City in the country, and yet the Mayor is treating it as a routine matter, leaving it to very loyal and very competent subordinates. I have no 5 problem at all with subordinates, except they cannot make the decision. They cannot speak for the Mayor. Only a Mayor can give answer to the questions that have arisen about this program throughout the City. I think everyone in the City would love to support it if they knew more about it and had answers directly from the Mayor about it. This gives the Mayor a great opportunity. So that when you say you don't think the Charter provides for that, Mayor Rendell thought it did. He thought it was an unusual matter, so he came here and openly championed it. Seems to me that's what this Mayor ought to be doing; and that would begin to satisfy a lot of the questions that exist out in the community. Thank you, Madam President.
My testimony, I think, is currently being passed out or distributed. 47 6/02/03 - Whole/Finance
I think we've reached a unique point here this morning. And I'd ask you to at least recognize that Councilman Cohen is truly looking out for Mayor Street, trying to present as many opportunities as possible for him to talk about his program. And I think that you should have a conversation with the Mayor about that so that he can rethink his strategy. It's an incredible forum here to talk. I almost got through it, too. (Laughter.)
Think about what Councilman Cohen is trying to provide for the Mayor and advise him accordingly as his Chief of Staff.
I've often recommended to the Mayor that he come to these Chambers. (Laughter.)
In lieu of some of the rest of us. 48 6/02/03 - Whole/Finance (Laughter.)
Good morning. Council President Verna, Councilwoman Blackwell, and other Members of City Council, my name is Kevin Hanna. I serve as Secretary of Housing and Neighborhood Preservation for the City of Philadelphia. I'm here today to testify on behalf of the Administration on Bill 030372, which permits the City to apply for the Federal Community Development Block Grant HOME or HOME Investment Partnership Funds Emergency Shelter Grant, Housing Opportunities for Persons with AIDS, that is HOPWA funds, and for state funds from the Department of Community and Economic Development. S. Department of Housing and Urban Development, and which details our proposal for spending needs 49 6/02/03 - Whole/Finance and other related funds for affordable housing and other activities. The City is required to submit to HUD one consolidated plan which combines the formerly separate CDBG final plan and statement, the HOME program description, Emergency Shelter Grant application, the HOPWA application, and the Comprehensive Housing Affordability Strategy. With me is Deborah McCollock, the Director of Housing, Office of Housing and Community Development. The Consolidated Plan also incorporates spending proposed for the second year of NTI, the Mayor's blight initiative, which is funded with bond proceeds. Mr. Mjenzi Traylor, First Deputy Secretary of Commerce, is here to address questions dealing specifically with CDBG funds which are allocated to the Commerce Department and which support its activities and those of the Philadelphia Industrial Development Corporation and the Philadelphia Commercial Development Corporation. Mr. Anthony McIntosh, Executive Vice 50 6/02/03 - Whole/Finance President of the Philadelphia Housing Development Corporation and Mr. Herb Wetzel, Executive Director of the Redevelopment Authority are also here to answer questions about the funding and operations of their agencies. The Year 29 Consolidated Plan for the fiscal year which begins July 1st, 2003, details our plan for spending monies from four primary federal sources. In the interests of time, I'll limit my comments here, for the most part, to a brief description of those sources. The first and largest source of federal funds is the Community Development Block Grant, CDBG. 681 million. This decrease is due to the fact that this is the first year for which HUD will use Year 2000 Census information. Before this, to include Year 28, HUD had used Year 1990 census information. 7 million. Reprogramming at this level was at one time -- I'm sorry. However, the budget cut in CDBG resources actually is deeper because the amount of prior years' reprogram funds is also reduced. 7 million in prior years' funds. Reprogramming at this level was a one-time event, and funding at this level is not available for Year 29. Similarly, OHCD's program income for Year 29 will be reduced by $1 million, as compared to Year 28. In the past, the City drew down on Section 108 funds, funds whose unspent balance earned interest, interest which was used for CDBG eligible programs. This year the Section 108 loan funds have been spent on activities for which they were borrowed, leaving little to generate these interest earnings. These reductions in funding have been partially offset by projected increases in program income expected to be generated by a 52 6/02/03 - Whole/Finance one-time sale of land owned by the Redevelopment Authority. 5 million less than was available in Year 28. The reduction in available CDBG funding has forced very difficult choices among competing and often worthwhile initiatives and programs. In particular, community economic development activities have been reduced by $500,000. However, we exceed by $521,000 the requirement of City Council Bill Number 000716, which stipulates that at least five percent of CDBG funds be spent on economic development activities carried out by community development corporations. 1 percent, as compared to Year 28.
The second primary source of funding for Year 29 is the Federal HOME Program. Philadelphia has been told it will receive $17 million from the HOME program in Year 29. That's 53 6/02/03 - Whole/Finance an increase of approximately $1 million, as compared to Year 28. While CDBG funds can be spent for a variety of activities, including construction and rental assistance, the City proposes to use this small increase in HOME funds to offset in part the significant increase in CDBG funds, and to provide small increases in development subsidies available for affordable rental and elderly housing. The third source of federal funding which is included in the Year 29 Consolidated Plan is housing opportunities for persons with AIDS, the HOPWA program, which the City of Philadelphia administers for the five-county metropolitan region, including Philadelphia, Bucks, Chester, Delaware and Montgomery counties. The federal formula for HOPWA funds is based on the historic and contemporary AIDS caseload in the region. 643 million of HOPWA funds for the five-county region. A decrease in new funding will be made up in part by reprogramming unspent funding 54 6/02/03 - Whole/Finance remaining from prior years. The fourth source of funding for housing in Year 29 is the Federal Emergency Shelter Grant Program, ESG. 379 million in ESG funding in Fiscal 2003. These funds which support emergency shelter activities will continue to be administered by the City's Office of Emergency Shelter and Services. The Year 29 Consolidated Plan details the proposed uses of these and other sources in your Consolidated Plan book. I won't go into any detail because, as I said, those are presented in some level of detail in front of you. In order to meet our deadlines, I would respectfully request the Committee to vote Bill 030372 out with a favorable recommendation and with a request to suspend the rules to allow first reading at the next Council meeting. Thank you for the opportunity to present this testimony. I and my colleagues will certainly be happy to entertain whatever questions you may have at this time.
Thank you. 55 6/02/03 - Whole/Finance Is there anyone else from the Administration that will be testifying? Before we start asking questions, on the first go-around, each Council Member will be given five minutes to ask questions, and then we'll have a second go-around for however long it takes. Yes, Councilman Cohen.
I suggest that in this case, because of the tremendous public interest, that we change the procedure to permit the public to testify first. (Applause and cheers.)
I raise that because this is a program which depends on public support, and the answers given by Administration spokespeople should be directed to those questions, as well as to the questions of Council Members. So I would urgently request the President to consider that.
I am certainly in agreement. I think that's a wonderful idea. We were going to do that about o'clock, but certainly we'll be happy to do that 56 1 6/02/03 - Whole/Finance now. And the Administration will please stay so that if there are any questions, we can direct them to you. Mr. McPherson, who is our first witness? MR. McPHERSON: The first Panel is Sue Sierra, Steve Holbertson, Nora Licktash, David Koppisch, Stacy Moore, William Deberry, Juan Perone, and Veronica Howard. Vivian Vanstorick, Sandy Sauceman, John McDonald and Eve Lewis. Will they come to the table, please.
Good morning. Please identify yourself for the record.
Please identify yourself for the record and proceed with your testimony.
Thank you, too, Chairman Blackwell. My name is Susan Sierra, and I am the Policy Coordinator with the Philadelphia Association of Community Development Corporations. I have copies of my testimony here for Members of Council.
Yes. We will be more than happy to have them circulated.
Thank you again, Madam President, and thank you for being so interested in --
Thank you for being so interested in hearing from members of the public; and thank you to Members of Council for being flexible in your scheduling. PACDC represents more than 80 community development corporations who are doing the successful work of Neighborhood Transformation all over the City. We have recently celebrated our tenth anniversary. And as part of our 58 6/02/03 - Whole/Finance celebration, we surveyed our members on their accomplishments over the past decade. And the results are impressive. Over the past ten years, CDCs in Philadelphia have developed nearly 3500 homes and apartments. We have created more than a million square feet of commercial space. We're assisted or created over 2,000 businesses. We've converted almost 1,000 vacant lots into parks and gardens, and we've provided job training for over 10,000 neighborhood residents. This success has come through very successful partnerships between CDCs, government, community residents, and the business sector. And in particular, we recognize and are extremely grateful for the significant investment that the City of Philadelphia has made over the years in the CDC industry. This partnership continued over the past year. And I want to express how appreciative we are for the increased funding for property acquisition for CDC projects that has happened this year. 59 6/02/03 - Whole/Finance We're grateful for the new economic development funding that our neighborhoods are receiving through the CDC tax credit program. We welcome the Targeted Basic Systems Repair Program that's already been referenced. And we want to salute the Administration and Council for these positive steps, and encourage the City to continue working with CDCs over the coming year. There are a few specific issues that I'd like to comment on that are related to the Neighborhood Transformation Initiative and the Consolidated Plan. First of all, I want to say that we strongly support the Administration's proposal to increase the budget for property acquisition under NTI by $24 million, and also again express my thanks for the increased acquisition support that CDCs have received during the spring 2003 acquisition round. The key first step in successful neighborhood transformation is putting vacant property in the hands of CDCs and other organizations that will redevelop it. And we're 60 6/02/03 - Whole/Finance extremely gratified to see such a significant commitment of resources towards this goal. I want to raise the issue that there will be an ongoing need for acquisition funding once NTI bond funds have been used up, and would like to urge the City to develop a long-term strategy to make sure that there will be ongoing funding for property acquisition, and ensure that redevelopment will take place in future years. Secondly, I would like to raise some issues raised by the revisions to the overall NTI budget and to the mix of NTI bonds. Miss Smith has testified as to the revision of the use of NTI bond funds. And we strongly support the use of more bond funds for acquisition, but we are concerned that the reductions in bond fund uses are coming mostly from housing preservation. In fact, the proposed five-year budget revision cuts the overall budget for housing preservation by $36 million, which is almost 50 percent of the total housing preservation and encapsulation budget. And in contrast, the proposal 61 6/02/03 - Whole/Finance reduces the five-year demolition budget by only $8 million, which is about five percent of that budget. We commend the positive steps the City has taken to support neighborhood preservation activity by CDCs. And I want to point out that interest in these programs has far outstripped available funds. For example, the Target Basic Systems Repair Program, which will allow ten CDCs to focus on improving targeted blocks in their neighborhoods actually received more than 14 applications for those 10 slots.
15 There's also been widespread 16 interest in the Community Life Improvement 17 Program, the CLIP Program. And again, interest in 18 that program has far outstripped the original 19 neighborhoods where that program was scheduled to 20 start. So we applaud the increased money for acquisition, but we believe the need to preserve and rebuild our communities is also critical. And we urge the City to consider reprogramming demolition funds, rather than 62 6/02/03 - Whole/Finance housing preservation funds to support acquisition, and to restore support for housing preservation programs. The second issue that I'd like to focus on has to do with administrative savings. We are disappointed that there's been pretty significant increases in spending on City operating costs in the proposed Consolidated Plan, as compared to the preliminary plan. Secretary Hanna referenced the four percent cut in spending on City overhead from last year's Consolidated Plan to this plan. That's true. And we are glad to see the City reducing their overhead. However, in the preliminary plan, the City had planned to make a 13 percent cut in spending on City overhead. 8 million has actually been added to the City's overhead budget. We believe that increased funding for housing production needs to be the City's top priority. And a recent -- There have been many news articles recently about the housing problems that many of our citizens face in Philadelphia, 63 6/02/03 - Whole/Finance including a front-page story in last week's Inquirer. So in order to deal with these issues, we need to produce more affordable housing. And it's troubling to see such a large increase in administrative funding taking place. I also want to point out that increasing our investment in housing production doesn't just meet a social need but it's also financially smart for the City. There were over $6 million in low income housing tax credits that were left on the table unused because the State of Pennsylvania didn't receive enough applications to develop housing tax credit projects last year. That's money that could have been come to the City of Philadelphia if we had been committing the resources necessary to develop more affordable residential housing. In addition, Governor Rendell has just added $10 million in funding to the State's Home Ownership Choice Program. That's money that's available to come to the City, but it requires a one-to-one match in City investment, 64 6/02/03 - Whole/Finance and again points out the potential to leverage outside funds coming to the City if we are willing to make the investment necessary to meet the housing production needs of the City. I would submit that no part of the State deserves to have this money more than the City of Philadelphia. And this money is available to be used, but it requires a commitment on our part in order to put forward the resources we need to get it. Without increased local investment in housing production, we can't take advantage of these resources. The preliminary Consolidated Plan showed that it's possible to identify significant cost savings in the City's Administration. 8 million is a significant amount of money, and it's money that could go do a great deal for our neighborhoods if it were being used on the street. We strongly encourage the City to take advantage of these savings, to increase its investment in housing production. And I'd like to urge the City to follow through on the administrative cost reductions that were originally proposed. 65 6/02/03 - Whole/Finance I'd also like to point out that the City does have several other options available to increase housing production. 4 million more in housing and redevelopment assistance money from Harrisburg than we have in previous years, and it's possible the amount may be increasing even more in the future.
We believe that increased HRA funds should be invested 75 percent in increased housing production which as I said is the greatest need facing the City, and percent in home repair 14 neighborhood preservation. 15 I'd also like to encourage the City 16 to consider reprogramming some of the Neighborhood 17 Transformation Initiative demolition funds towards 18 housing production. 19 Finally, I'd like to urge the City 20 to create a housing trust fund which would 21 generate dedicated revenue to support housing 22 activities in Philadelphia. 23 Currently more than 275 cities, 24 counties, and states around the country have 25 created housing trust funds, which provide more 66 6/02/03 - Whole/Finance than $750 million a year to address critical housing needs in those communities. I'd like to urge Philadelphia to follow in their footsteps, and to point out that even at a conservative estimate, the leveraging effect of increased City investment in affordable housing is at least from three to one to five to one, so we'll be getting resources back to encourage us in making these efforts. Finally, I'd like to thank the Administration for restoring much of the funding that was cut for neighborhood economic development in the preliminary Consolidated Plan. We continue to be concerned about the effect of cutting support for small businesses, that $500,000 cut that the Secretary mentioned, but we're very glad to see the $1 million that was cut from the Neighborhood Development Fund in the preliminary Plan restored. City investment in neighborhood economic development has a high leveraging return, and we encourage continued support of these efforts. So, thank you again, Members of 67 6/02/03 - Whole/Finance Council, Madam President, for giving me the opportunity to testify. And in closing, I'd just like to say that CDCs are the City's experts in Neighborhood Transformation. And if the City and CDCs continue to work together, we'll be able to rebuild our neighborhoods one block at a time. Thank you very much. And I'd be happy to take any questions.
To the Members of the Committee, shall we listen? Are you interested in hearing all of the witnesses and the Panel testify, and then we could ask questions? Or do you want to ask Miss Sierra questions now?
Now? All right. The Chair recognizes Councilman Nutter.
Thank you, Madam Chair. Miss Sierra, thank you for your testimony.
I'm intrigued by a couple of things that you mentioned on your testimony. You make reference to... You say, in fact, the proposed five-year budget revision cuts, the overall budget for housing preservation programs by $36 million, almost 50 percent of the funds. Now, you're talking about the NTI Program at that point, right?
And then I was -- Later in testimony I was referring to the Consolidated Plan.
Right. No; I understand it went back and forth. I was trying to find where you were on that. I'm looking at Table 3, the FY'04 program budget, on of the NTI book. And then --
I'm sorry. I don't have a copy of the NTI book in front of me. I don't know if there are... 69 6/02/03 - Whole/Finance
There are thousands of them floating around by now. (Laughter.)
It's actually going to be over at Borders later on today. (Laughter.)
I understand they're getting the hard copy version of this shortly.
I understand. Actually, Miss Smith later on today is going to be reading from the NTI Program and statement. (Laughter.)
And signing the document, too, you know. All proceeds going on the taxable side of the program. If you go to , there is a 70 6/02/03 - Whole/Finance five-year estimated NTI Program budget. I'm trying to find the cuts that you made reference to. I think it's quite important what you highlighted. But I was trying to follow along. Miss Smith, is that the right page?
I believe -- And Pat is also directing your attention to which has the pie charts, the layout.
And the revised. So if... My figures come from... At the top of the chart shows that initially $80 million was slated to be spent on housing preservation.
And then at the bottom of the page is a total of $44 million will be spent on housing preservation programs. That's a 71 6/02/03 - Whole/Finance combination of the rehab and homeowner assistance piece, and the property stabilization piece. So that's --
Yeah. That's where the 8 net cut of... That's how the net cut of $36 9 million is computed. 10
Okay. And I'll 11 have some questions for Miss Smith on that. 12 Also, that page indicates -- and I 13 guess we've read about this before -- that the 14 program initially was proposed at two fifty, and then Council in its wisdom actually didn't do the borrowing when you asked us to in June. You subsequently did it in the fall. Interest rates dropped over that summer. And the program came back as a $295 million program. We also anticipate interest rate fluctuations around here as well. But now the program appears to be two seventy-five. Can you explain that? .
My name is Patricia Smith, Director of Neighborhood Transformation. 72 6/02/03 - Whole/Finance
The bond proceeds, the amount that we can raise over the life of the program, is really determined by the $20 million in debt service appropriated each year by City Council to support --
So as a result of the 17 adding more dollars into the pot of money for 18 acquisitions, it isn't so much just an interest 19 rate issue; but also, by using more taxable bonds 20 for the program it's like the difference between a 15-year mortgage on your house and a 30-year mortgage. If you decide to take out a 15-year mortgage, your monthly payments are higher.
Tax exempt governmental purpose bonds which support the demolition are like a 30-year mortgage.
And therefore, your annual debt service payment, you know, is different.
Well, to the extent that you make more taxable offerings, we're going to pay higher debt service, right?
Right, because they'll be, I guess, amortized over a shorter term.
I understand that. Therein lies the... That's the balance, I guess. Now, so far we've borrowed 142, right? 74 6/02/03 - Whole/Finance
Okay. Out of that, how much was taxable? How much was tax exempt?
Okay. And taxable, I think your testimony is, is the most flexible; is that correct?
Okay. What are the range of uses that you could use the taxable dollars for that you could not use the tax exempt?
For example, tax exempt public government purpose bonds have to be used for governmental purpose, such as eliminating dangerous conditions. It can't benefit a private party or result in private payments. And that's a very lay person's description.
Of the restraints on it; whereas, with taxable there's more flexibility.
Are you anticipating doing more taxable bonds? 75 6/02/03 - Whole/Finance
Yes. To give us, again -- And to allow us to be the most responsive, in terms of the acquisition needs. For example, there's a second type of financing called qualified redevelopment bonds.