INVESTING IN PHILADELPHIAS FUTURE JEFF HORNSTEIN FOR CITY COUNCIL Latest revision: Thursday, April 14, 2011 OUR

POTENTIAL: Philadelphia is a city on the verge of true greatness. It is a walk-able and bike-able city. We have great restaurants, great housing stock, and human-scale architecture. We have tremendous cultural diversity, growing immigrant communities, and venerable traditions. Our arts and culture scene is vibrant and growing. We have world-class art, music, dance, and theater. We have a burgeoning artisanal and creative economy. There are more than 90 colleges and universities in the region, many of them world-class, with 250,000 students, second only to Boston. OUR CHALLENGES: At the same time, our city faces immense challenges. We have a shrinking tax base, stubbornly high unemployment, and unacceptable levels of blight, poverty, and violence. Lazy economic development policies and political cronyism have produced half-empty condo towers, the worlds only waterfront Walmart, an underperforming, bigbox casino, thousands of vacant lotsand very few family-sustaining jobs. Our economic development policies are akin to shuffling the chairs on the deck of the Titanic firms move from one part of the city to a tax-sheltered opportunity zone in another part of the city, and very little net growth occurs. Meanwhile, in the neighborhoods, public safety suffers from browned-out firehouses, libraries face drastic cuts in hours, and public pools are closed. And right now, with both Harrisburg and DC cutting support to Philadelphia, we need to figure out how to utilize our resources here at home. OUR REAL PROBLEM: Our fiscal policies, our zoning code, and our political culture remain mired in the mid-20th century. We tax the wrong things, we put up unnecessary barriers to job-creating development, and we expect far too little from our elected leaders, especially on City Council, when it comes to economic development and job creation. We are at a critical juncture in our citys history. Either we continue to do the same things over and over again and expect a different result the classic definition of insanity - or we chart a dramatically new course. My campaigns economic development plan might be summed up as: Lets make Philly less weird when it comes to fiscal policy, zoning, and political culture.

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ACHIEVABLE POLICY IDEAS THAT CAN TRANSFORM OUR ECONOMY 1) Fix Phillys anomalous business and property tax systems so we look more like our peer cities. Shift the tax burden away from things that can move wages, profits, and homeowners to things that cant, like land and receipts. Nurture small and local business. Get rid of the Net Profits side of the Business Privilege Tax. Among other major cities, only New York, DC, and Detroit levy a tax on business profits at the local level. The Net Profits side of the BPT provides particularly powerful incentives for companies to leave the city. Phase out this part of BPT entirely, raise Gross Receipts commensurately but exempt small business income up to a reasonable level from all BPT. Switch to a quarterly assessment system so business owners have some breathing room. Ease the burden on wage and salary earners. Phillys 4% wage tax is a full point higher than any other major city. We need to at least achieve parity by bringing the wage tax down below 3% within 4 years. Ease the tax burden on homeowners. We tax buildings and improvements too heavily and land far too lightly. This incentivizes land owners to hold onto vacant land for very long periods of time and actually encourages owners of vacant buildings to allow them to deteriorate. Lets move toward a property tax system that places more of the burden on land values. Lets come up with a fair system for taxing homes, one that has some relationship to market value, but lets be sure to protect our seniors and others on fixed incomes.

2) Put Philadelphias municipal pension funds to work creating jobs in Philadelphia. The Philadelphia Municipal Retirement System currently holds about $4 billion in assets. While we certainly need to address the well-documented problems facing the PMRS, including underfunded liabilities, our larger problem is that our economy does not produce enough jobs. Growing our tax base must be job #1. Lets follow the examples set in California and New York State and allocate 10% of the PMRS to a Philadelphia Initiative Fund, dedicated to investments in enterprises that create quality jobs in our city, for the residents of our city. Lets also make sure that our pension funds, wherever possible, are invested by local investment fund managers. Keep the management fees here in Philadelphia, stimulating our local economy.

3) Put our Green Money where our Green Mouth is. The Nutter administrations Greenworks plan is ambitious in scale and scope. Lets encourage a few demonstration projects to capture the public imagination. And lets use fiscal policy wisely to encourage green behavior. Transform the PIDC-owned Port Richmond railyard site into a Green Industrial Park powered entirely by alternative energy sources. Create a wind farm on the northern Delaware waterfront. With just 4 or 6 turbines, we can power thousands of homes or several large factories.
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Explore the feasibility of the latest generation hydro-power, windmill-like marine turbines that are environmentally sound. New York City is experimenting with this technology right now, in the East River. Nurture the growth of solar power through tax credits and other incentives. Help community development corporations and other neighborhood-based groups acquire or use vacant city-owned property to install solar farms. Replace all fluorescent and incandescent lighting fixtures in City-owned buildings and all sodium street lamps with the latest generation LED lights, which use 80% less power and last 50% longer. Use our newly created Municipal Energy Authority to help underwrite these altenergy ideas. Use tax abatements and credits to encourage sustainable construction and energy efficiency, and consider changing the building code as well. Why shouldnt major buildings have solar panels on their rooftops? Why should there be impermeable pavements in 2011?

4) Get vacant city-owned properties back into productive use. There are dozens, if not hundreds, of salvageable buildings in this city, many of them city owned. And of course there are over 40,000 abandoned lots costing us tens of millions of dollars in lost revenue. Consolidate control over vacant property under one agency, lets call it the Philadelphia Land Bank. Pass an Industrial Homestead Act that would allow a business or group of artisans or artists to apply to take an abandoned building off the citys property inventory if they agreed to make improvements, and if done successfully, to file for deed of title. Pass Community Land Trust legislation that would allow community groups to acquire and manage land for parks, gardens, and affordable housing.

5) Invest in a modern port. In 2014, the Panama Canal will be widened to allow huge container ships to travel from Asia to the East Coast for the first time. With our strategic location in the middle of the eastern seaboard, first-rate refrigerated warehouses, and excellent intermodal transit networks, we could become a world-class port again and create thousands of good-paying jobs. 6) Make the Central Delaware Waterfront a beautiful and economically vibrant place. The Central Delaware Advocacy Group/PennPraxis Civic Vision calls on us to balance the public good, access to the waterfront, open space, and quality urban development. These principles must be our guide. So far, we have a fabulous plan to create an emerald necklace of parks along the river, and a walking and biking trail to connect them. We must extend the grid to the waterfront and do whatever else we can, short of a prohibitively expensive, Boston-style Big Dig, to mitigate the impact of the barrier posed by I-95. But we must also facilitate the development of small-scale, local commerce along the way. We have gorgeous municipal pier buildings and other historic structures that are currently either empty or grossly under-utilized. Seattle has Pikes Market. Why cant we have our own version, full of funky, quintessentially Philly shops and cafes and amusements? And of

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course, we need to tie it all together with a riverfront streetcar line that stretches from Girard Avenue all the way down to the stadium district. We have the tracks already! Work to develop a Small Business Plan for the waterfront. Use the Philadelphia Initiative Fund to help create financing for small business development, perhaps to capitalize a Philadelphia Community Development Bank. Work with DRPA and SEPTA to expedite the development of a riverfront transit line, in accordance with the Civic Vision and the master plan being crafted by the Delaware River Waterfront Corporation. Ensure that the reformed Zoning Code contains a Central Delaware Overlay that accords with the Civic Vision and master plan. In particular, the 100 setback and the extension of the street grid to the waterfront must be incorporated into the CDO. Ensure that riverfront communities continue to have a voice in the development process by creating permanent seats on the DRWC for CDAG.

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