Monday, December 15, 2008
How We Do Business
Today I want to talk about how Philadelphia does business with corporations and developers.
Last week, Philadelphia Orphans Court Judge John W. Herron ruled that the Fox Chase Cancer Center, currently located in Northeast Philadelphia cannot expand into neighboring Burholme Park to build new hospital facilities. According to the Inquirer:
“Herron said that public parks were protected by a common law rule, known as the ‘public trust doctrine,’ that has been part of Pennsylvania law since the early 1900s.’Simply stated, so long as a community or neighborhood actively uses dedicated parkland, the city is required to hold such land in trust for their use,’ the judge wrote.”
This issue has been hot in the Philadelphia papers recently, but has been brewing for years now. I bring this issue up because it is the latest example of a legal or quasi-legal body making a decision that stood against the wishes of the Mayor, City Council, and/or other public bodies, with the prospect of losing jobs and development as a result of the decision.
The Inquirer reported:
“Fox Chase wanted an 80-year lease for a $1 billion expansion over 25 years that would create more than 4,000 jobs, proponents said./Plans called for construction of ‘as many as 18 large buildings between four and nine stories high through the very center of the lush park,’ … ‘Mayor Nutter, City Council, and the Fairmount Park Commission had approved the park lease. Nutter spokesman Doug Oliver said that the mayor still supported Fox Chase's using the park but that he was willing to work with the center to locate other land or facilities in the city. ‘The decision could have a devastating impact’ on Fox Chase's expansion efforts, Oliver said, adding that the administration would ‘do everything we can to insure Fox Chase's continued presence in Philadelphia.’”
In some ways, this scenario is similar to the issue of Unisys’s proposed move to Center City back in September (that I blogged about here). Unisys was considering moving its corporate offices to Two Liberty Place, downtown, where it would have leased less than 10% of the building space. As an incentive to seal the deal, the City Commerce Department promised Unisys that it could violate the site’s zoning and install a corporate sign two-thirds of the way up the building tower.
This promise annoyed the building’s lead tenant, Cigna (who had no sign on the skyline). Also, many saw this as setting a dangerous precedent. If every minor tenant could have a sign somewhere on the shaft of the building they lease, Philadelphia’s skyline would become a monstrosity of advertising. No city in America allows this – instead restricting signage to the bottom or top of a building. Even in sign-crazy places like the strip in Las Vegas and Times Square there are very careful sign controls.
It turns out that the Commerce Department had no authority to promise a zoning change. The Mayor's office exerted pressure on the Zoning Board of Adjustment to make the exception and grant the variance. However, the Zoning Board is a quasi-legal entity, with the sole job of judging whether there is financial or physical hardship. There clearly was none, the board ruled against Unisys, and the company decided not to locate in Philadelphia.
These two episodes bring up the tenuous issue of how much we are willing to sacrifice (and in these cases, bend the law) in the name of economic development. In both cases powerful City leaders urged the deciding body to rule in favor of a company that would bring jobs and cachet for the city. However, in both cases the deciding bodies made their judgment based on their legal purview, not the potential for economic stimulus.
Generally, we do want our legal and quasi-legal bodies to follow their mandated roles, and not make exceptions whenever a big company knocks on the door. However, as a city we don’t want to keep losing business to the suburbs. The question is: How do we balance these two concerns?
The answer has less to do with the decisions themselves, and everything to do with the consistency of the decisions. If public agencies and elected officials give companies the perception that they will get what they want, then companies will spend the time and money to go to court or to the Zoning Board. In both of these examples, the companies ended up frustrated, because they had the support of the Mayor, spent valuable resources, then lost.
Wouldn’t it be easier if our public bodies encouraged companies to look for alternatives in the beginning, rather than putting their support behind actions that could end up in failure?
Of course, similar efforts in the past to push through projects have been successful — a fact that surely emboldens public officials to keep trying. However, pushing companies to pursue these uncertain endeavors is not a viable way of doing business. Perhaps episodes like Fox Chase and Unisys will start to change the perception of how much risk is really involved.
At least in the case of the Zoning Board, it is a new thing that the board values its mandated role over all else. In the past, the board’s decisions were much more arbitrary, factoring in issues such as architecture, interior amenities, and yes, economic development. However, Mayor Nutter’s promise of a new day and a new way resulted in his appointing a Zoning Board that would stick to the letter of the law — even, it turns out, when the letter of the law contradicted the will of the Mayor.
Companies want nothing more than consistency. They care less about how much it costs, and more about getting a dependable timeline and schedule for what steps a project needs to go through, what hoops need to be jumped through. In Boston, for example, that city’s development review process, Article 80, is much more cumbersome than Philadelphia’s. However, it generally runs smoothly and consistently.
A new day and a new way is not just about appointing the right people. It is about changing the way we do business. It is time for the administration and other public bodies to stop leading corporations down an uncertain road. The City should only promise what it can really deliver. Otherwise, the Commerce Department should help companies find a viable alternative, at the beginning of the process, not after they have spent time and money on a lost cause.
If the Commerce Department had not offered a zoning variance it could not deliver… If the Mayor, City Council, and other public bodies had tried to talk Fox Chase out of pursuing its Burholme Park plan, and pushed for alternatives early on… If every time a company or developer comes to town they know exactly what they’re getting and how long it will take… then Philadelphia will have embraced a new way, and will be on the road to spurring economic growth.
Posted by Greg Heller