Title
December 19, 2002
To the President and Members
Of the Council Of The City Of Philadelphia:
I am herewith returning to you as disapproved Bill Number 020481, which would amend The Philadelphia Code to require the City Controller to prepare economic impact statements for any public or private development project for which the total project cost is at least $50 million and for which the City or City related agency makes any funding or other contribution for which Council approval is required. The Administration fully supports Council’s interest in being fully informed when considering whether to provide City financial support to major developments. The objection is based on the ambiguity and seemingly expansive sweep of the bill, the absence of any timing constraints on the Controller’s review and the resulting negative signal it sends to our business community. I believe the bill, as drafted, is at odds with the City’s on-going effort to encourage strategic growth and development by making the City’s development process efficient and predictable.
In transmitting this veto, I note that nothing prevents City Council from imposing conditions on its decision making process. City Council has the right to draw upon any resource it deems appropriate in considering the approval of any legislation before it. At issue here is the message sent to those interested in developing businesses, jobs and homes in our City. Either we are going to create an infrastructure and process that encourages development, or we will develop a reputation as a City where it is difficult to do business.
The requirement is triggered for any development project, public or private, when Council is called upon to approve some type of City contribution to the project, however small. The amount of City support going into the project is irrelevant, as long as the total project exceeds $50 million. The reach of the requirement is enormously expansive, because Bill Number 020481 defines the phrase “any portion of the funding” by a City or City-related agency with a very broad brush. According to the legislation, the economic impact statement reporting requirement would be a condition on Council consideration if the City of a City-related Agency either: 1) contributes actual funding, directly or indirectly, to a development project which requires Council approval; 2) makes any in-kind contribution or provides a financial incentive to the project, including, but not limited to, any transfer of any interest in real estate, site improvement, environmental remediation, infrastructure improvements which benefit the project (including, but not limited to curbs, sidewalks, streets, drainage or water and sewer mains), grants, tax incentives, tax abatements, tax increment financing, and economic stimulus funding, which requires Council approval; or 3) involves condemnation or the provision of relocation assistance. This definition is so far-reaching that almost any action by either the City or a City-related agency in any context to support a development project, no matter how small, might trigger the requirement of a time-consuming economic impact analysis.
The Bill also creates further unpredictability, because it does not require that the Controller act within any specific time parameter, creating in effect, a unilateral veto in the Controller, over any proposed development, simply by inaction. A requirement that the Controller act within a certain timeframe, or be deemed to be in support of a project, would eliminate the undue leverage and give a measure of predictability to the City’s development process.
Additionally, the legislation would create a reporting requirement even where the City’s financial role is limited to acting as a conduit for State or Federal funds. For example, the Administration has submitted legislation to City Council several times in the past few years that would allow the City to accept State Redevelopment Assistance Funding for major projects. In nearly all cases, the funds received from the State are matched by non-City sources. Whether those State grant funds are for the National Constitution Center, which is nearing completion, or for large medical research facilities in University City, the City plays an important role in facilitating these financial transactions. For these types of projects, the economic impact statement requirement in the proposed legislation adds an additional requirement to receiving grant funds not sourced to the City.
Again, allow me to emphasize that the Administration fully supports Council’s interest in being fully informed when considering whether to provide City financial and other support to major developments. However, I think that this strict and overly broad measure would hurt the strategic growth and development that is so important to the continued vibrancy of Philadelphia.
Respectfully yours,
JOHN F. STREET
End