July 10-16, 2003
Sam I Am
Photo By: Michael T. Regan
Mayoral candidate Sam Katz purrs about Santorum, Dems who support him and begging for cash.
City Paper Interview with Sam Katz – July 3, 2003
Participants: Sam Katz (SK), Howard Altman (HA), Daryl Gale (DG), Brian Hickey (BH), Dan Brook (DB), Deb Bolling (Dbo), Mary Frangipanni Patel (MP)
DG: So why do you want to be mayor, Sam? Are you just nuts?
SK: Not just nuts. Although being a little nutty I think, is a terrific asset for public life. I have this long-standing interest in cities: professional, political, personal and emotional. And it started when I was a student in college and I had to do this independent project and I decided to go back to Philadelphia from Johns Hopkins in the 60’s. A lot of cities were on fire. Civil rights. Some cities were experiencing demonstrations and riots. And I got interested in what was happening in Philadelphia. The city was sort of one of the few cities that hadn’t blown up. But there was a lot going on. Model cities was a pretty big part of what was going on here. I got interested in cities and then I went to graduate school in urban policy at the new school during the waning days of the [New York City Mayor John] Lindsey administration and I got job working for Lindsey. I was you know, in an internship position literally in city hall. I got to travel with him a little bit. And I really found his role and his presence to be fascinating. Then I came back to Philadelphia and worked for the Philadelphia Partnership and it was during the Rizzo years and I was a pretty strong opponent of Rizzo. I worked for Lou Hill in his primary against Rizzo and found that interesting. I was the research director. And I worked for Bill Gray for Congress and Bill Green for the Senate. And then after that was over, I really wanted to learn about finance because I knew that cities… the biggest problem that most cities face was money and their ability to finance themselves. So I took a job with Public Financial Management, which had just been started. During that entire period, including graduate school, when I was at PFM I felt that I was interning… or getting ready to run for mayor someday and be the mayor someday. And, I think that some people want to be CEO’s of companies and run organizations that are private companies and some people have a dream to be the CEO of a city and I think you can make an impact… a significant impact on a place you live and a place you care about, in this city particularly as a mayor. But, having started that process in 1990, when I decided to run in the Republican primary, I’ve sort of been at it for 13 years and it’s a project that I want to finish. And those are the reasons. I think Philadelphia’s headed in the wrong direction under John Street.
HA: Which direction is that?
SK: Well, if there are two choices, one is right and one is wrong, I think we’re in the wrong direction. I think our stature as a city that’s open for business, one that’s creating economic opportunities for under-represented groups, that’s leading the country in 21st century industries built around knowledge and science and technology, that’s capitalizing on its investments in arts and culture, that’s really one of the talked-about, hot, go-to cities, I think that… that opportunity, that momentum that we had when Rendell finished his term has largely been squandered.
DG: A couple of months ago, Sam, you and I met up at a conference David Oh had called on keeping young people here basically through information technology and biotech industry. You said at the time that you would work to increase Philadelphia’s profile in just those kinds of things: biotech, the sciences, in new technology and new kinds of jobs and businesses that would keep these people here. It sounds real good, but how in the heck are you going to do that?
SK: Well, Daryl, I’ve already started to do it. When I was at GPF, I was one of the founders of the Life Sciences Greenhouse, which is now called BioAdvance, which is taking the 30 plus million tobacco claim dollars that are set aside for investments in post grant, pre-seed medical discoveries that being produced at the medical research institutions in Philadelphia and in smaller companies in Philadelphia. We’ve already made the first 3 million dollars of awards to 8 companies here in Philadelphia. Um… I’m the author of the plan that the greenhouse is now attempting to implement to set up an early stage venture capital fund to invest in life science businesses in Philadelphia at the very early stages of their development. I was the person who promoted the idea of trying to bring the bioindustry organization’s main conference here and they’re coming in 2005. And when they come here, they’ll be 20,000 people from around the country, who will come to the Philadelphia convention center for a week and talk about the latest development in pharmaceuticals, biomedical devices, bioinframatics, and we’re going to organize all the pharma companies, all the bio-med companies, the hospitals, the healthcare institutions to really be ready to promote Philadelphia at that conference. I have a proposal to create a wage tax free zone around the Science Center, the Naval Business Center and Temple, which would induce young companies to locate here in the way we give ten-year tax abatements to real-estate developers. We may have to collect the wage tax, but we could rebate it, that would avoid the constitutional issue of uniformity in taxation.
HA: Would that avoid the Constitutional issue?
SK: Well, I think it would depend… you know… when you talk about subsidizing a business and you may enter into an agreement where the subsidy is set at a certain number of dollars but the dollars equate to wages that are collected and reported, so you could avoid it. I don’t want to tell you that I have the legal strategy entirely worked out, but I’m comfortable that there is a way to… I think you’d have to have an agreement with the company that the wage tax rebate, however it’s structured would be either rebated to the employees or invested in… or the company would invest it in Philadelphia. And it would have to come in exchange for a commitment to stay a certain number of years. It’s easier to do when it’s a real-estate rebate, because the building isn’t going to be picked up and walked away. It’s a harder thing to do when it’s a company-based rebate.
BH: When you were talking about why you wanted to be mayor, initially, in the CEO analogy you used, what specific business achievements, experience that you have would parlay into viewing this city as a business, if that’s how you see it.
SK: I spent 20 years in municipal finance, well 19 years, from 1976 to 1994. My business was working mostly with cities, but also with other public entities that were responsible for everything from schools to airports to convention centers to transit systems to highways. I think everything about my experience is relevant to the city…to a career in cities. For three years I ran a business oriented civic group that was focused entirely on regional issues. Regional economic issues primarily. … I started with a company that was two people when I arrived and 180 people with 16 offices when I left. I was CEO for 16 of the 19 years that I was there. I think the best thing I can say about that is that I was principal in that company and, I think, its principal leader. But, after I left, it didn’t get weaker, it got stronger. That was because of the superb people that we recruited and a reputation for really doing good work. So, it wasn’t a company that just died when I left. Today I think it’s probably the leading municipal finance and investment advisory firm in the country.
Dbo: Could you elaborate some on the business philosophy? You said that you had a business philosophy.
SK: Yes, I do. I do have a business philosophy and I think it is germane to civics… no business can survive for very long without delivering good services or products to its customers. Philadelphia doesn’t do that in my opinion. Philadelphia’s not a customer friendly city. It isn’t customer friendly in city government. People don’t answer the phone in a timely fashion; they don’t tend to have good information when their customers ask them for information. People who have the kinds of normal complaints that go into living in a city don’t find that they can talk to the same person twice about it. There is no tracking of the performance of the complaint… Delivering solutions. We have an unfriendly… not a customer oriented transit system. We have non-customer oriented convention center. There is a mentality here that is pretty much, ‘It doesn’t really matter whether I do a good job, somebody going to protect me. Either the political system’s going to protect me or the union is going to protect me and so I don’t have to perform’. And of course, that’s what’s causing Philadelphia to lose its edge to a lot of other markets. So, you know, one of the things that I really hope I’m going to be successful at doing is changing the culture of Philadelphia. The city is going to be thinking about people who are customers and to try to inculcate a philosophy and a management perspective and a mission and a set of measurable performance indicators that people will, in each department, be relevant to the service that it provides. And, at the end of the day people say, “ You know what, they’re really making a change.” This isn’t what Street calls the ‘we’ll be here when you got here and we’ll be here when you’re gone’ or whatever that phrase is that he says bureaucrats take toward mayors. And, we’re a city that has a lot more government than we can afford, which is why we continue to have a very high tax rate which undermines our business climate, and which drives jobs away. And those people are our customers. So, secondly, I’d say the whole role of a mayor is to be a leader, not the managing director. And I’m not interested in becoming the managing director. A mayor is a person who has to develop a vision, articulate the vision, sell it, hire people who are on board with it and then hold them accountable for the actions that are going to be necessary to achieve it. And I have a vision for Philadelphia. I have the vision of a growing city, a city that’s adding people to its population, a city that’s adding jobs and adding customers and is creating opportunities for who are outside of the mainstream of the economy… a place that young people feel good about, a place that old people feel they can stay in because they’re close to their families. A place that people feel is a good place to grow a family or grow a business. That would be a really significant thing for Philadelphia to have happen to it. And the reason that I feel positive about it is because the assets that we have, I think, are unmatched in the area that are going to matter to try and create momentum in that… towards those goals. You can’t go out and create the college and university environment and the infrastructure that we have in Philadelphia. It’s been created over a couple hundred years and unlike a lot of businesses, colleges and universities are tied in Philadelphia, but unless you make a concession to us on taxes or unless you build us a new stadium or unless x, y or z we’re going to move. They’re not going to move. They’re all physically planted in the ground. Those colleges and universities are to the 21st century what Stetson Hat was to the 20th century: they are the manufacturing agency for the 21st century; manufacture ideas, creativity and talent. And if we can’t keep that energy, that creativity and talent in Philadelphia, than shame on us. And, that generating of activity doesn’t just address the M.D.’s or the Ph.D’s. The whole food chain of public climate by the creation of business, by the creation of enterprise. We have, in Philadelphia, an enormous cultural and arts infrastructure which isn’t going anywhere. You add sports and entertainment to it. So, culture and arts is a huge industry. Every bit is dependent on creativity as is biomedical and information technology. You know, in all these neighborhoods now artists, artisans are creating businesses. They’re small businesses, they’re generally self-employed businesses. But the whole message to that community has got to be that that’s a value added component to the city. We have an enormous under the radar economy. Most of it’s legal, but not all of it. But the micro-enterprise economy in Philadelphia is big and we have lots of women who started companies, whether they’re nail salons or cleaning services or maintenance services, people who are self employed, who have marketing companies that represent an increasingly significant part of the economy that doesn’t get attention and doesn’t get notice. And now we have this other problem: that of the subsidy war for the Center City professional service component of our industry. This is the war we lose. We lose. Because we can’t compete with New Jersey to subsidize CIGNA; we can’t compete with Delaware because these states have significantly more resources than does the city of Philadelphia. What are we doing when we subsidize? You’re recognizing that the structure of our tax system doesn’t work, so, in isolated cases, we go out and we fix the structure, not for everyone, but for the particular problem, that waves the flag that says exit. So, I have a lot of optimism that if we address the tax climate, we address the customer service mentality, the market… I also feel very strongly that Philadelphia has to get in the business of being part of a region. We don’t really have a region in Philadelphia; we have lip service that we pay to the word ‘region’. Every once in a while, Philadelphia needs money for a big project which we call ‘ a regional project’, but it’s always in Philadelphia. But, there are significant regional issues like suburban sprawl that Philadelphia can provide the solution to. The wage tax drives people to the suburbs. Drives more and people in the suburbs to the exurbs, chewing up more and more farmland, putting more pressure on suburban government to raise taxes and find infrastructure and basic services. And we have vacant land, access to lots of great amenities. The amenity package in Philadelphia is a hell of lot better than it is in Malvern. And we need to do a better job of working with the suburbs to try to help manage growth and help the suburban communities begin to realize that we’re not in competition with each other. We need to get a region that competes with Singapore and Chicago because that’s where the game is. And that’s part of the message that I tried to give to those folks that you heard me speak to.
HA: You mentioned lessening government and this speaks to how you want to lessen the wage tax. What part of the government would you lessen? What would you do away with?
SK: I wouldn’t do away with government.
HA: No, no, not the whole government, but how would you reduce the expenditures?
SK: Well, there’s an awful… I would subject a considerably larger portion of the city’s government to competitive bidding. There’s far too much insider baseball in Philadelphia than there needs to be. I think that it’s incumbent upon managers to find ways to reduce their operating expenses by doing more with less, and by creating a reward system for people who can do that. Driving down the cost of city government by one or two percent a year over the next five years has got to be our goal. It’s not about wholesale reductions in service, its about managing the operations of the city more efficiently by getting rid of a lot of the pinstripe patronage, by getting rid of a lot of the waste, by just stopping the game…by collecting things. By collecting the six million dollars in parking fines we’re owed. You know, that’s a lot of money. When you go from a city that had 250 million deficits to a city that’s projecting an 800 million surplus to city that’s projecting an 800 million dollar deficit, well, that goes to the very heart of whether Philadelphia is going to survive. We fought that 10 years ago. So, if somebody’s telling me that there isn’t any way for the city of Philadelphia to reduce its operating expenses by a point to a point and a half, than you don’t have the right people running city government. And we’ll get the right people.
Dbo: I have a two-part question. You said that you worked with Lindsey in New York. I know Lindsey was a Democrat. Were you a Democrat at that time?
Dbo: And you said that in….
SK: They didn’t ask me, though.
Dbo: Excuse me?
SK: Excuse me. I was a graduate student. They didn’t ask me my party registration.
Dbo: No, but I would imagine that if you had admiration for Lindsey as a politician that it would have something to do with your own political affiliation. Maybe not. I was just asking.
SK: Lindsey was a Republican when he was elected mayor. He changed his party registration in 1972 if I’m not mistaken, to run for president and he ran for president as a Democrat, but he was elected as a Republican. I didn’t care about his party affiliation and I don’t care that much about that now. Party affiliation to me is a tertiary interest, to me. I…
Dbo: What do you mean ‘ tertiary’?
SK: Well, I tend to look at people based on their character and their position on issues and I look at all…I try to look at everything about them and there are very few people with whom I agree with everything that they stand for.
Dbo: You consider yourself a Republican? Are you?
SK: I’m a registered Republican.
Dbo: So, it’s tertiary in terms of how you would manage the city but not it’s not in terms of your own affiliation.
SK: Well, in politics in the United States, there are two parties and you choose one.
Dbo: There are also independents.
SK: No one’s ever been elected mayor in Philadelphia as an independent and is not likely to in my lifetime. No one’s been elected mayor in Philadelphia except as a Democrat or Republican in a hundred years. So your question is...
Dbo: Well, I was trying to establish when you became a Republican, if you were always a Republican or was that something new…
SK: February 1990
Dbo: February of 1990, then. Okay, now, also, you’re setting up a business model for city. New York has a very similar mayor kind of mentality in place right now and New Yorkers are rather disappointed in Bloomberg’s leadership because of his business ideology; because they feel that he runs it to be as if he was in a board room as opposed to a town hall. How would you contend with that sort of criticism if that were to be a criticism of you?
SK: Well, first of all Mike Bloomberg made some… and I think in my judgment and I’m not close to him... I haven’t followed this and I guess you have, but I haven’t that closely, but Mike Bloomberg made some very critical comments about labor unions before he even sat down to negotiate with them, on the kinds of concessions he felt they needed to make to deal with New York City’s enormous deficit, which, I don’t think is, ah, arguably the product of much more than the fact that WTC and lower Manhattan essentially collapsed economically. He’s a billionaire and he runs his company in a very top down kind of a way. It is very successful business for him. I’m a collaborator. I’m somebody who’s been a partner. I’ve had…I had 16 partners at Public Financial Management. I guess you can say in that respect it was somewhat more like a law firm than it was like a traditional, hierarchical corporation. I worked with 55 business executives at Philadelphia First, each of whom was the CEO of their business or their hospital or their institution. And I collaborated with them and it was not, ‘I’m going to tell you what to do’. I’d like to think that there was an approach that Ed Rendell had which was sort of being out in the community, being out with people, getting feedback, hiring and empowering people around me who are really going to be good quality professionals at what they do. Good leaders in their own right. I ‘m not unwilling, and there is a certain amount of risk to this, to give people room to make mistakes, hope that …hope…and work with them. Hope that they don’t make them, but work with them to avoid them, but not punish them for making them, as long as they don’t make them repeatedly, because I think if take risk, you’re going to have reward but, you’re also going to have failure.
Dbo: I think I’m asking more of a style question.
SK: Well, I’m trying to answer it stylistically. I think. I’m trying to…what I’m suggesting is that if…if you…if you recruit good people, you give them the mandate to do their job. I intend to be out more, be a more public, hopefully, a more inspirational kind of a leader. Be somebody that’s constantly selling the vision and trying to get people to buy into it, but also open to other people’s ideas in the vision.
Dbo: You’re saying… I just want to see if I understand you…. my imagining CEO it is top down. You’re saying that your management style is collaborative. So it’s never been top down, it’s always been on par, on the level of some sort.
SK: Well, that’s the way I like to work with people and I think its more effective that way. I think at some point, you know as mayor or as an executive, the decision has to be made and ultimately, if I get elected, people are electing me to make that decision. But up, until the point of the decision, I work with people. I don’t mind arguing with people. I don’t people getting in my face and arguing back. I don’t need to be told yes when the answer ought to be no. I don’t need to hear what I want to hear when what I need to hear is different than what I want to hear. And I always found that if you listen, you get a lot more done than if your lips are moving. So, I don’t know… I know a lot of CEO’s. I’m on the boards of a couple of companies in which the CEO’s not a top down person. I think if you look at the most successful companies, the most successful non-profits, those are the organizations in which the workers feel respected, where their opinions matter, where the reward system is set up to benefit good ideas and hold accountable bad performance. And that’s a very different kind of arrangement than Philadelphia city government has and it won’t be easy to get that for Philadelphia city government but I think it’s a goal we can go for.
Dbo: I have another question…
SK: Just one other comment. I don’t think Mike Bloomberg likes being mayor. I happen to know that he doesn’t like being mayor. And that makes it very difficult.
Dbo: When did he stop?
SK: I think once he got his arms around the financial problems of the city. He’s the former chairman of Johns Hopkins University, and I’m a Johns Hopkins’ graduate and so I know Mike Bloomberg. I don’t want to tell you I know him well, but I know a lot of people who do know him well. It hasn’t turned out to be what he….
Dbo: Well, then nobody’s happy then.
SK: Why’s that?
Dbo: Well, a lot of New Yorkers are really bemoaning their vote.
SK: Well, I don’t know enough about how… I know he spent a lot of money. And obviously in that period, between September 11 and November whatever, New York went through an enormous emotional….
Dbo: But I think the appeal for Mike Bloomberg in New York at that time was that business pitch because here was a city that had just been hit…
Dbo: …knocked on its ass…
Dbo: …and as a businessperson, the city looked at him to be able to handle the business end. But, in the translation, they really didn’t really want a businessman at the helm; they wanted somebody that they could talk to. Somebody who was more a people person as opposed to a businessperson. But, in the moment after September 11, he looked absolutely appealing. Now that appeal has faded, so he sounds like… I think that in the role of mayor there’s got to be some handholding, some touching, and some feeling…
SK: Right. I agree, and I think that Philadelphians particularly, even though we haven’t suffered the same trauma, have always…I don’t know if you were here when Rizzo was mayor. He was a very…
DG: I was.
SK: And I was, too. And he was…if you listened to his rhetoric or his politics or his policy you could say ‘God, he’s awful’, but when he walked into a room, even a room full of his enemies, he just filled up the room. And people… I remember when he died. His funeral precession went up North Broad Street and many African-Americans came out of their houses, it seemed like, to pay their respects to him.
DG: They just wanted to make sure he was dead.
(Laughter from all)
SK: (speaks directly into tape recorder) That wasn’t me. I didn’t say that. It was Daryl Gale.
DG: You mentioned the unions as they related to Michael Bloomberg. In order to fix the problems that you outlined, the convention center, the attitudes and customer service ideas of city workers; you’re going to have to go face to face with some very unfriendly union types and you’re going to have to ask them to change their work rules and the way that they do business, which, traditionally, has not worked out well for mayors. How would you do it any differently?
SK: First… non-uniform contracts at DC47 and DC33. And both them have a provision in the contract that they call the RGI provision: Redesigning Government Initiative. The Street Administration has done nothing and the Rendell administration did very little, to use that provision in the contract. To design strategies or policies or programs that would help Philadelphia city government become more efficient. There are lots of practices around the country, there’s a Linda Kabulian, who’s a woman who worked for the Kennedy School of Government who’s a consultant to District Council 47, who’s been in town a couple of times. And in the 4 years since my last campaign, the Kennedy school, working with labor, working with the unions in other cities, have put in place a multitude of projects and initiatives that came from labor that were designed to lower the cost of government, create incentive systems for employees and do things that recognized the declining revenue base of the city and the need to do more with less. And that’s point number one.
Point number two is that Philadelphia has a city charter that was actually created in 1951, in part as a reaction to 60 years of corrupt Republican’s leadership in the city. And it was a good charter and it has a lot of great features in it, but its now 50-some years old and everyday a mayor of a commissioner runs into something in trying to make Philadelphia a 21st century place that the city charter may get in the way of. So, without biasing what kinds of changing to the structure of city government, I’d like to see us implement, I think creating a new charter reform commission, putting people from all parts of the city, not just the business elite, but people from neighborhoods, people from labor, to look at and really reevaluate the appropriateness of this government structure for a 21st century city that 600,000 fewer people than we had in 1951. That’s the second initiative.
A third initiative is in the area of making Philadelphia city government truly more electronic. If you get on the city’s website they have a place where you can go to pay fines. You can’t pay on there. You know, when you send a Federal Express package they take a scanner and soon as package goes out, it gets scanned and if you call up and you want to know where it is, they can tell you whether it’s in the warehouse, its in the airplane or Mary Smith signed for it. What about complaints? It seems to me within the modern age the number of households that have access the Internet is very high in Philadelphia. In libraries you could create kiosks, or in neighborhood retail centers where people could register complaints and could pay by credit card. If you’ve gone in to apply for a permit for something you often times have to wonder ‘ Why do we even need a permit for something like this?’ So one of the other things I want do is get a whole group people involved in a task force to look at and reexamine every permit, every regulation, everything that we’re doing in Philadelphia, whether we need to protect public interest and health safety and what might just be time to get rid of.
Look at the convention center – the convention center, in my view is a situation that has resulted from a lack of an owner. Who owns the convention center? I don’t mean in whose name is the building titled, but who owns it? Who acts as the owner? Because, if you go the First Union Center and you misbehave or you get out of line, they have guys with word “events staff” on the back of their coats, you’ll be out the door in a second. If you create a problem on the floor, setting up the show or a sporting event, Peter Luca comes down from his office, ‘cause he’s the owner, he represents the owner. And the owner of the convention center has been the unions… it’s been those six labor unions. When Street announced in January of 2001that they had solved the labor problem: they set up a project labor agreement and all the unions had signed on to it, a project labor agreement is a construction project document and in fact, the convention center has been operated like a construction project. Its not a construction project, it’s an operating facility. There’s no other union….there’s no other convention center in the country with 6 labor unions representing the workers. The convention center board approved the E-consult report all of it in its entirety and they took a long time but now Mike Nutter has put forward a contract which has all of the provisions of the recommendation in that contract. They’re not willing to negotiate. They’re not talking about negotiating. This is the deal. Take it or leave it. Now, I wish they hadn’t passed the deadline. I wish they had stuck to their guns on the deadline, and I don’t pretend to know all the reasons why they did that but I support what they did. I think whichever unions are prepared to sign that agreement; those are the unions that should represent the workers in the convention center. And if somebody’s going to shut us down or there are going to be labor strikes there because of that, then let’s get it over with because right now, in the absence of labor strikes they’re still killing the convention business in Philadelphia. We don’t have a lot of time left on that clock.
HA: Why not make them state workers?
SK: If they can’t get this done, then that’s the only choice. I mean, that would cause a job action and there will be people picketing and…
HA: And what does Mayor Katz do?
SK: I would never have let this thing get to this point. When Street went public in September with a document that was signed by five unions representing 37 percent of the workers, but not by one union representing 63 percent of the workers and said we have a deal… we didn’t have a deal. How do you have a deal if 63 percent of the workers are not signed on? John Street had an outcome that he had decided that contract had to look like. And he would not have a contract that did not look like that outcome. And one of the unions, the carpenters, wouldn’t agree to that. Whether rightly or wrongly, they thought they weren’t being negotiated with in good faith. I don’t know if they were or they weren’t. But it seems to me that before you announce that you have an agreement, you stay at the table. You couldn’t do the same thing with the teacher’s union because that’s the union you have to negotiate with. So Sam Katz would have stayed at the table, and I would have gotten the agreement. I think at the end of the day, where we are, probably we’re going to have state workers.
DB: A lot of people think the situation at the convention center has been difficult for Street to resolve because he was beholden to a lot of the unions involved through campaign contributions. Your campaign has been very successful thus far at soliciting contributions, but I’ve noticed that many of your funders, including the chairman of your campaign can’t vote for you because they don’t even live in the city. How can you convince people that you’re not just interested in political payback?
SK: I hope you’ll do a really careful analysis of who’s contributed to my campaign and how many of them, or what significant portion of them are actually running businesses that do business with city government. I think you’re going to find that it’s a particularly small percentage because most of the people who do business with city government are not willing or are unable or are afraid to have their name show up on my list. Sidney Kimmel doesn’t do business with city government, Dorrance Hamilton, Steve Kendall, John Haas, Dennis Alter… most of them are more the charitable and health care and educational contributors to the city and are supporting my candidacy because they see leadership for the city important to the institutions that they care about; whether it’s the art museum or CHOP or whatever. I’m saying that John Street told us when he ran for mayor and when he was elected mayor that people that gave me money are the people that are going to do business with me. I’m not saying that. I’m saying that the people who give us the best price and the best service are the people we’re going to do business with. And in the long run, my ability to get re-elected, if I am elected to this job, given the fact of the registration, and given the fact that whoever runs four years from now is not likely to be named John Street, is going to be dependent upon delivering on the things that I’m saying in the campaign and performing in a way that people can overcome party registration when the next opponent is likely to be somebody who maybe is more popular. So everything from my point of view is going to be about delivering on the things that I say and you’re going to have to make that judgment yourself as to what portion and who are these vendors who are contributing to Katz. Who you’re likely to worry about are likely to get all the business because I think you’ll see for the most part that almost all the law firms are supporting both candidates. All the developers are supporting Street. All the contractors at the airport are supporting Street. All the people who do the accounting work and who do all the personal service work are supporting Street, and that’s okay. The more people who are interested in the city, whether they live in the city or not makes no difference to me.
DB: Street’s on record as saying that the campaign finance system in Philadelphia is just fine the way it is. Do you agree with that or do you think…
SK: No, it sucks. It’s terrible. It’s a cesspool. One of the things I think campaign finance laws in Pennsylvania… and it’s not a Philadelphia law, it’s a Pennsylvania law… but we should have not only a requirement that every contributor… I think contributions should be limited, I think they should be closer to the federal limits… I think that the TV stations and the media should be forced under Pennsylvania law to make time available for debates and make significant blocks available so that the amount of money that gets spent on TV advertising, which is what drives the costs of the Philadelphia mayoral campaign becomes much less a significant part of the budget. I think that we should have a check off so that if you contribute you should have to disclose whether you have, are or will, do business with the entities for which the person is running, whether its township, city or state. In the municipal finance business about a decade ago the municipal securities rulemaking board passed a rule which is when I was in the business, which says that if you sought work municipal finance bond work from a government, that the underwriters and the financial advisors, which I was one of, could not make contributions to any election in that government, and I thought that was a good rule. Wall Street was probably the biggest single contributor to government. Today the biggest contributors to politics are the people who manage pension money. If you look closely you’re going to see an enormous amount of giving from companies that are investment this or that. The Philadelphia pension system is so far under water right now it’s a joke. I think that the asset value of the pension fund is less than 50 percent of the liability of the pension fund. This after the city went public in ’98 or ’99 and borrowed $1.2 billion at the height of the bond market so that they could effectively buy securities at margin. So they bought at the height of the bond market and the top of the stock market… they got the ratio of assets to liability up to 75 percent after they did that bond issue. The stock market crashed, now it’s down to 47 percent and the bond still has to be paid off. So I think that we need to find a way to clean this up. I spend most of my time raising money. That’s what I do. I sit on the telephone and make phone calls. Mostly I talk to voice message systems and executive assistants. People know why I call.
DG: Would you publicly denounce the pay for play system? Would you get on TV and say, ‘You know, it’s not going to work like this anymore’?
SK: Yes. I have done that. I’m doing it here, and I’ll do it in the debate.
BH: What do you say then in these calls? Is it a standard approach, or is it better person-to-person?
SK: It’s usually, “Hi, this is Sam Katz. You know why I’m calling. All I can tell you is that until you return this call I’m going to keep calling your voice mail system and you’re going to have to get back to me sooner or later. If you look down, you’ll see a pit bull with its teeth on your leg… that’s me. Please call me back, here’s my cell phone number.’
DB: Just like being a reporter.
SK: When I talk to somebody who I’m asking for money, I say to them generally, you know, the campaign at this point we’ve raised $5 million so far. We’ve done it largely by going to people like you, who are not looking for something, who have the ability to do something significant, and this is the budget, the campaign needs to raise X, and we have lots of events going, lots of small contributors but I need help from people who can do $5000, $10,000 or $25,000. I know that’s a lot, and I know that you don’t live in the city or you don’t do business with the city, or you don’t have an interest in the city, per se, but I hope you’ll support me. And what I’d like to do is send you a letter, and I’m going to put an envelope in here, if you can make a commitment to me today it would be helpful to know, if you can’t, that you’ll do something. Here’s the name of the committee, would you send a check? That’s what I do.
HA: Why would someone with no interest in the city contribute to your campaign?
SK: When I say no interest in the city… well, a guy I know who’s a personal friend said, “ I know I live in the ‘burbs, my company is in the ‘burbs, I don’t even go into the city to eat anymore. Why should I give to you?” I said, “Gee, how about because I’m asking?’ I guess that’s the only reason I could come up with.
DG: But isn’t there something fundamentally nuts about a guy who has to raise five or ten million dollars for a job that pays $120,000 a year?
SK: Well, what do you think the right ratio should be? Ed Rendell raised $42 million for a job that pays $120,000. Ten million dollars sounds like a bargain.
DG: Isn’t that what turns the general public off about politics? When people hear these terms, and the kinds of numbers and what it takes to become mayor, they think back to when they were a kid and people would say, ‘Anybody can run for office. Anybody in America can become president or mayor or whatever.’ Well, you can’t, because you can’t get hold of that kind of dough. Isn’t that why people hate politics?
SK: I used to think that way. But you know, watching Ed as mayor, and I was in his office on more than a few occasions, and I would be in his office talking about a project or something, and the phone would ring, and he would be getting a return phone call from someone he had called that morning because he was trying to raise a million dollars for the Kimmel Center. He was trying to raise money for the Boy Scouts. But he had committed himself to raise money for some cause. And as I was sitting in his office I realized how much the development officer the mayor is. One of John Street’s weaknesses as mayor in my opinion is that he doesn’t have the relationships that a Rendell developed. To be able to pick up the phone and call somebody and say, ‘We need to have a million dollars for X’. And Rendell did so much of that. I don’t mean just for his own political fortunes but also for the city. Rendell personally talked Sidney Kimmel into giving $35 million for the Kimmel Center. He talked Verizon into giving $16 million for Verizon Hall. Going out and raising money for a city that doesn’t have the resources of a Philadelphia that is constantly trying to get private individuals, and there’s a good amount of wealth in the region. Some of its in the city, but a fair amount of it is outside the city. Turns out to be one of the skills that a mayor needs to have.
Dbo: Maybe its not what you know, its who you know.
SK: But when you become the mayor, you can know anybody you want.
Dbo: But your point has been, in order to become the mayor, that you have to know some people who have some money.
SK: Well, let me tell you, because I think that’s a good point. I think that its better for [New York mayor] Mike Bloomberg to be able to write a $65 million check and not notice it was missing. But in 1991 when I first ran for mayor, I made a list of people who were recognized in the Philadelphia area as being fairly wealthy people. I didn’t know any of them. I’ll give you an example of one. I’d like to ask if we could keep her name off the record. Is that…
Dbo: You didn’t win that election, though.
SK: (laughs) I didn’t. I’ve never won an election. But in many ways… can I do that off the record Howard?
(Turns off tape recorder and gives name)
SK: … I put her on my list and I said, she’s a fairly prominent lady, she doesn’t know me and I don’t know her. How can I get to her? So I do a little research and found out she was on the board of the Pennsylvania Academy of Fine Arts and she was on the board of the University of the Arts and a couple of other things. And one of the people on one of the boards was somebody I knew. So I called him and I said could you ask her to take my call? She didn’t know me. I picked up the phone and I called her semi-cold. And because I knew somebody who knew her she agreed to take my call and agreed to see me. And she gave me money in my campaign, and has given money in every campaign. I think it’s a little bit like being a sales person. The people who work for City Paper have to pick up the phone every day and call people who can advertise, who can advertise anywhere, who don’t want that phone call. And you just keep at it until finally people say its better to give the guy what he asks because I’ve got to get rid of him, or give him some support. And I’m like that. In some ways I think that’s an asset in my personality. I’ve been beaten for this job. I’m running in a city where 18 percent of the registered voters are Republican. I haven’t walked away. I didn’t quit in 1999 and say, okay, that’s it, I’m not going to do this again. So I think that determination is really one of my strengths. I worked on a project in Orlando for 13 years, the Orlando International Airport. When I started with that it was a military facility with 14 gates. It was an ugly airport. I’ve been involved with the California Indian Tribe, which has been written about in the papers for seven years. I’m a person who does not walk away from things. I don’t quit, and I think that’s a strength.
MP: I wanted to ask you, money is really nice, but you need votes too. There are lots of groups and organization that you’re reaching out to. One of them is the gay community. I’m talking about only groups that can vote for you. POPEC, Out Front, Log Cabin… do you think the contribution you made to Santorum will come up later, or has anybody said anything to you that they are offended by this? I have called around to different people and I get mixed views, but I would like to just hear what you have to say.
SK: I haven’t heard from anybody about it yet. Obviously the contributions were made before Rick did his most recent comments, although I think that there is a fair amount of antipathy toward him in the gay and lesbian community. I think that most of the people who are interested in gay and lesbian issues whether they’re gay and lesbian or not are going to look at me on the basis of who I am, what I stand for and what I’ve done, and although I’m sure some people will count that against me, my guess is that a lot of people who are going to count that against me will have already decided to vote against me.
HA: Speaking of the $10,000 contribution, you talked about how powerful party politics is only tertiary, wouldn’t a $10,000 contribution to Rick Santorum, and his recent comments are not news to anybody, his political feelings are old news… given that you feel that party is tertiary doesn’t that say that I, Sam Katz, are giving this money to support what Rick Santorum stands for?
SK: Well, I think some people are going to read it that way. There are things about Rick Santorum that I find that I’ve been very pleased about. Rick Santorum is a guy whose position on Israel has changed a lot since he became senator. If you ask me about things that I care about, one of the things that I care most about I would say that’s a real important issue to me.
DG: When he was running, he called Arlen Specter ‘The senator from Israel’.
SK: That was the first time. A number of people, myself included, had a conversation with him about that. In the Jewish community, Rick Santorum did not start his political career viewed as a friend of Israel. I’m sure he sent a lot of people cards, but when he was in Israel, he had a much different understanding not only of…
DG: What did they do to him?
SK: If they did anything to him I guess it was to explain and physically showed him the fragility of their security situation. If you’ve ever been to the Golan Heights, it isn’t hard to see for example, and I don’t want to go too much into Middle Eastern politics, but its not hard to see why Israel is unwilling to cede the Golan back to Syria. Maybe they’ll have to under some peace arrangement.
DG: Did they give him a hotel room within spitting distance from Hamas?
SK: I don’t know if there are any rooms within spitting distance from Hamas, but over time I’ve seen Santorum’s views on Israel change. I’m on the board of City Year, a national service organization. And Santorum has become a big supporter of City Year, in part because I introduced him to City Year. We now have a huge problem with the whole Americorps situation, as I’m sure everybody’s been reading, and we’ve been trying to get Santorum, as a leader in the Republican senate to help on that issue. Rick gets criticized on social issues, on things like abortion and gay and lesbian issues, and people have very strong feelings on those issues, and the City Paper and your readership is going to have a view that’s more consistent with mine. But there are a lot of people in Pennsylvania that have a very strong position that’s on the absolute other side of a lot of these things.
HA: But given his recent statements, would you give him another $10,000?
HA: Would you give him any money at all?
MP: Wouldn’t you want to maintain a connection with him?
SK: I think I have a connection with him, but at this point, he’s probably not too happy with the things that I’ve said about his comments about homosexuality and sexual acts between consenting adults. I would want to keep my private conversations with him private, but the degree to which he was comfortable offending so many people… when the gay and lesbian community had run into a roadblock in the Pennsylvania legislature, they called me and asked for help in taking the hate crimes legislation out of committee and on to the floor to get to Perzel. The Republican caucus in Harrisburg is not exactly a bastion of interest for gay and lesbian causes. There were 17 House Republicans who voted for that bill, I think, on the floor of the House, and Perzel released the bill, and Pennsylvania has today one of the most aggressive hate crimes statutes in the country, to the surprise of a lot of people. My attitude about this was, and I was content to do this under the radar screen, which is what I was asked to do. When it became law it was the gay and lesbian community that decided to publicize the fact that I had done what I did. When John Street was condemning domestic partnership in Philadelphia, I was a person, not yet a candidate, not necessarily thinking about being a candidate, who was saying that domestic partnerships are appropriate and should be supported. I’ve been attending a lot of seminars that Out Front has had on the whole question of civil union and gay marriages. I’m not quite there, I mean, I can’t say today that I’m ready to say let’s allow same sex marriages, but I’m listening to those arguments. From a standpoint of being able to transfer property, being able to enjoy health benefits… the whole question of what is a family, which I think… there’s a kid working in my campaign office whose parents are lesbians. He’s a tremendous athlete, a great kid, he’s doing a lot of work on our website, he is a loved kid. He has two great parents. His next-door neighbors don’t think anything of it. The guys on the Little League team don’t think anything of it. The world is changing.
HA: Is he in Mount Airy?
HA: I probably coached him.
SK: Well, you might have.
DG: But now here’s the thing: Santorum’s personality and all that aside, doesn’t that, or does it, present a different set of problems for you in that there are issues where your philosophy will differ from the Republican platform, and how do you reconcile that if you’re running as a Republican?
SK: Daryl, I’m not running carrying the Republican platform, I’m carrying my platform. And I’m articulating my views, and if you ask me questions I’ll tell you what I think, and I’m going to stand for the things that I believe in. I think the Republican Party is big enough to handle Sam Katz, and the Democratic Party was big enough to handle Bob Casey. Political parties shouldn’t have lockstep participants who only have one point of view. I think the fact that there are Republicans for choice, and there are pro life Democrats, and there are plenty of Pennsylvania Democrats who feel like Rick Santorum on gay and lesbian issues, and there are plenty of Republicans who feel like Sam Katz on gay and lesbian issues. I have to take the good with the bad.
Dbo: The ’99 election was very racialized. Are you expecting that this election this year will have those same components, the race components? And if that is an issue, blacks came out very strongly in support of John Street; whites supported you. What has changed that would make the race any less racial, or is it as racial and how do you contend with that?
SK: You used a word I never heard before, racialized. I think it’s a good word, because it was not racist, which I think is an important difference. The election, the actual contest between me and John was not a racial contest. John went to the Northeast, and I went to North Philly. When we talked in debates, there was virtually no code wording in that election. It was, I think, a very attentive effort on both candidates’ part not to pander and not to play the race card. I think that changed in the last weekend of the campaign. I think that the Street campaign, but more the Democratic Party, recognized that there was a problem, and they raised then a Come home to the Democratic Party’ and there was a subtle message that if John Street has been white that this wouldn’t have been an election because he’s so experienced.
HA: Clinton came up.
SK: Clinton, Rendell, and others. There is a school of thought, and certainly if you looked at Terry Madonna’s poll, you would subscribe to; which says that this election started exactly where the last one finished. 93 or 94 percent of the African-Americans voted for John, and 83 or 84 percent of whites voted for Sam. The key to winning this election is one of us has to get into the other’s base and move people. Neither of us won by enough to say let’s just leave it the way it is, because it’s too close. This is the reason why my campaign has worked so hard to diversify the staff, to build a field operation that’s going to be citywide…
Dbo: I’m not sure what you mean by diversify. Are you trying to integrate more minorities?
SK: That word integrate. That sounds like a legal word.
Dbo: Yes, but by diversify, do you mean that you have short people, tall people…
SK: Yeah, we have those. And African-Americans and whites, we have men and women, we have people who are of high income and people who are not of high income. We have straights and we have gays, and the campaign has made an effort to be more like Philadelphia than I think the ’99 campaign was. The candidates’ schedule… on my official announcement day I went to North Philly and West Philly. In 1999, nobody would have thought that that would make any sense. I had my first interview with a newspaper by Al Dia. I’ve campaigned in North Philly and the Latino neighborhoods. There are Spanish interpretations being done for some of our literature. My first editorial board was The Tribune. Which is to say that I recognize that I can’t win with the formula that I had in ’99. And I don’t think that John Street thinks he can win with the formula he had in ’99. So do I think the voting patterns will be dramatically different? No, but we’re talking about a one and a half point spread, so neither of us is talking about a radical change, we’re talking about a change on the margins.
Dbo: But we’re also not sure what the voter base will be. So if it was 30 percent then, and its 20 percent now, we just don’t know. That’s the wild card.
SK: Well, here’s what we do know, and I find this really interesting. If you look at the presidential election of 2000, the gubernatorial election of 2002, the DA election of 2001, and the ’99 mayoral election, and you take all the people who signed in as voters in either the primary or the general election, and you eliminate the duplicates… you voted in every election, so you would be in there four times, and you’re only one person, so you are one voter… and you add up all the people who voted at least once in the primary and general elections, there are about 607,000 voters in Philadelphia. If you didn’t vote in one of those four elections, the chances of you voting are pretty small. Even though there are now 790,000 people on the voter rolls. Now, there are 607,000 real voters. There were 440,000 votes in the mayoral election in ’99. That’s a pretty good turnout.
MP: You’re out talking to different groups, don’t you get the feeling that minority voters, particularly in certain neighborhoods say, ‘Well, I’m voting for him because I’m black and he’s black’. But I find when I interview different people they’re not looking at color; they’re looking at the person. If you’re a better candidate… a lot of African-Americans are not happy with John Street. I ask them, ‘How do you feel about your own culture, your own race?’ and they say, ‘We don’t.’
SK: What? We don’t vote?
MP: No, we vote but we don’t say, ‘Oh Gee, he’s black so I have to vote for him because I’m black.’ They vote for the candidate. Do you find this?
DB: (to Mary) And is this in specific black neighborhoods where you go?
MP: I do go. I can say from my experience. I’m asking you because I know these people.
(Laughter all around)
DG: Yeah, she has a black maid who’s just like part of the family.
SK: When you talk to 100 people, you might get a snapshot of 100 people but you’re not getting a representation of 100,000 people.
MP: No, but you can only take one group at a time, you can’t just get to thousands of people, it takes a long time.
SK: The Katz campaign is not going to seek to appeal to people on the basis of either the color of my skin or the color of theirs. And we’re not going to limit our campaign to anyplace because of race. We’re going to go where everyone is. I think the point that you made about how people voted, I think its probably more likely that that’s how people will vote. I think there are numbers that can be moved. Are they huge? Probably not. But they don’t have to be huge. We’re not trying to solve a 50,000-vote problem. We’re trying to solve a 10,000-vote problem. There’s two ways to solve it: we persuade people who were not for me last time to be for me, and we persuade people who didn’t vote to come out and vote. Those are the two ways that we can solve it. John has to do the same thing. He’s going to have a harder time persuading people who were for me. All of the stuff that went on four years ago; the President, Rendell, Tipper Gore, Ted Kennedy, all the ministers and labor unions, the Democratic City Committee, all for him. Anyone who was for me four years ago was for me in the face of a lot of stuff. I think he’ll have a harder time moving them. So I have to move people.
HA: We hear that a couple of city council people may come on board with you. Maybe they wear their Democrats for Katz button under their lapel, but Kenney or DiCicco… is that possible?
SK: I’ll let them speak for themselves when they’re ready. They haven’t said to me that they’re ready to be on board publicly.
HA: So you know about this?
SK: Like I said, what I know about is all hopeful, not public. They have to do something. Their relationships with this administration on their best days have been tough. I think its more than those two. I think there’s a coalition of city council people who have been frustrated in their dealings with the Street administration. Would any of them support me privately? I hope. Will any of them support me publicly? I don’t know.
BH: How important will it be to get them to go public?
SK: My strategy is not predicated on any elected Democrat being public for me. I think the prospect of it is wishful, and I’m not going to build a campaign based on wishful. Four years ago, Happy Fernandez and John White, Jr. lost in the Democratic primary. They were not then office holders. Happy had been a councilwoman; John had been at one time the Secretary of Welfare, the head of public housing, a city councilman and a state rep. When they lost the primary, they came out for Katz. We had Democrats for Katz and we had a credible group of two high profile Democrats, both of whom made TV ads, who were Democrats for Katz. But there are hundreds of people now who are Democrats for Katz already, they may not be high profile people, and I don’t care if they are. My election is dependent on Democrats for Katz. I can’t win with just Republicans for Katz. We didn’t have a Republican primary.
MP: You look at the numbers and you hope that you can get …
SK: If you look at the presidential election of 2000, Bush got 100,000 votes. And presidential turnouts are generally higher than mayoral turnouts so I say we got 440,000 people who voted for mayor in ’99 for mayor, and there were 560,000 people in 2000 for president. So if you extrapolate those numbers you can think that in ’99 there were maybe 80,000 Republicans for Katz, with 213,000 votes for Katz. The rest are Democrats. So we got about 34 percent of the Democrats.
Dbo: But here’s the thing: If people, like Mary’s saying, are saying that they’re not happy with John Street, just because they don’t vote for John Street doesn’t mean they’re going to vote for you.
SK: But if they were for John Street, there are two things that happen: If they were for John Street and they vote for me, that’s two. One less for him, one more for me. If they were for John Street and they don’t vote, that’s one. One less for him.
Dbo: Which means that if you’re even, you come out ahead.
SK: That’s what it means. When you look at the, and we’re talking a lot about process here and I’d like to get back to policy, but when you look at the Terry Madonna poll, 52 percent of the people in that poll said they would not vote to re-elect John Street. Not that they would vote for Sam Katz, or they would vote for Queena Bass, or that they would vote for Dwight Evans. Opponents unnamed, his re-elect was 37.
DG: I’d like to touch back on the subject of race, and only because you mentioned the day you announced your candidacy. I was with you out in West Philly that day at Big George’s and a group of protesters showed up who were very vocal, as you recall. I called your opponent’s camp, who said that the protesters were a spontaneous show of community support for Street. Do you expect more such spontaneous shows of community support as you travel through minority neighborhoods?
SK: That’s a little bit unique, because we did send out an invitation with the names and the places and the times that we were going to be there. There was quite a flap, by the way, and a lot of pressure put on Big George to not allow us to come to his place. There were threats about taxes and L & I and all that other stuff. I’m going to campaign in African-American neighborhoods, and if people don’t like me being there and they want to get in my face, that’s their right. If you watched me and you saw me, I tried to keep talking to the people who actually lived there and who work there as opposed to the people who were spontaneously present and who demonstrated community support. There are plenty of people in the community who were there who were very welcoming and very warm. They may or may not vote for me, but they’re certainly going to hear from me. I’ve had a lot of other experiences like that, with a little less publicity, that have been just terrific. People have been happy to have me there, and wanted to talk to me. They had complaints, as you would expect, and they had their own anxieties and their own concerns about me or about Street, and people feel free to tell me.
DG: But you wouldn’t let something like that influence the way you make your campaign stops?
SK: No. I think it’s a mistake for the other guys to send people out to harass me or try to intimidate me, because they’re not going to. It doesn’t bother me. It’s going to show that I’m not afraid, and I think they wouldn’t want to create a set of circumstances in which I could demonstrate that.
BH: I have a two-pronged one for you. One is rewinding when you’re talking about reducing the expense of government. You’ve said you’d cut one or two corners and get the right people in there. Do you know of any names of people you’d like to bring with you now, and whether there are trouble areas within city government right now that you would just totally take a big broom to?
SK: The airport. Big broom. The airport is a disgrace.
DG: Even with the new $285 million or whatever it was overseas facility?
SK: The facilities are magnificent. The operation is an embarrassment.
DG: You’ve tried to park there lately?
SK: No, I park in the remote lot. But I’m just amazed at what’s happening there. There’s a lot of stuff that I’m aware of that’s going to come out…
HA: Like what?
SK: Well, this idea that this guy whose name is in the paper, I guess one of the assistants entering into contracts with people who are supposedly put under contract for Philadelphia Airport Services for maintenance that’s already being paid for. The contract already had those services in them, and then friends of the administration were being given subcontracts to pay the work again, or pay for the work that was already being paid for. Like having lots of no-bid contracts on a construction site. Like having a design built, which by the way is not rocket science that ends up with a $100 million cost overrun. If you want to look at why the city wanted to refinance the outstanding bonds of the parking garages, $240 million of outstanding bonds, the ordinance that the mayor put in front of city council was for $350 million, so that they could fund the $100 million in cost overruns. The city is paying $100 million more for the baseball stadium because he screwed around on the trolley riding around the city looking at sites, so the mayor could make site selection. And then he picked Chinatown and delayed it for a year. So now the project is not going to open…if you go out and look at it… that building is not going to open in April of 2004.
HA: Are you guaranteeing that?
SK: No, I’m not guaranteeing it, but go look at it. Go ask the people who are working on the job site, the people who have some idea about construction management. At a cost considerably higher than would have been the case if it had been done professionally and thoughtfully.
BH: What do you do as mayor of Philadelphia on opening day when the Phillies are playing in the parking lot?
SK: They won’t be playing in the parking lot. Vet Stadium will not be torn down until the new building is open, that’s in the agreement.
BH: But it would be a big civic embarrassment if that were the case.
SK: The whole thing is an embarrassment. The Steelers and the Pirates are going into their third season in their new stadiums before we’re in our first. The bill in Harrisburg to fund stadiums was passed for both cities at the same time. The civic embarrassment is well documented if you ask me. I think people are going to be happy to have those buildings, I think the stadiums are going to be beautiful. I think the Eagles’ building is probably the best designed stadium in the country. Notwithstanding that, the process of getting it there added a significant cost not only to the public but to the private side of the project. I guess all that didn’t really answer your question. Do I have the names of people who I’m going to hire? No. I made the mistake on the Sunday night before the election four years ago of sitting down and thinking about that. So, I promised myself I wouldn’t do that again.
BH: You had flow charts drawn up?
HA: Would you keep [Police Commissioner] Sylvester [Johnson]?
SK: Yes, I would keep Sylvester. And if he’s saying today, which I gather he is, that he’s not sure, I believe that the relationship that I have with him now and the one that I’ve had with him in the past, and the one that I’ll have with him when I become mayor will be adequate to get this done.
HA: Any other holdovers?
SK: I’m impressed with Alba Martinez, I’ve always thought highly of Alba. From what I hear from DHS people, she’s very good. Janice Davis, finance director. Very impressive, not political. Not saying that I would keep Janice Davis but I would think very hard about it. I don’t know her personally but I’ve been around public finance people my whole life and I just have a feeling that she’s a real professional. She’s bright, and very knowledgeable, and a straight talker. I think she’s somebody who’s helped the mayor whether he likes it or not.
SK: Jim Curato is a friend, and has been a friend for a long time. Probably I would make changes there, but I would like to keep Jim Curato in some capacity in economic development because I think he’s good.
DG: You outlined the problems at the airport. How would you fix them?
SK: Competitive bidding. An airport director who’s not only a professional, which I think Charlie is, but a guy who’s not going to be pushed around political people or consultants. The airport, once you finish this international terminal, I believe sooner hopefully than later, the airline industry and the travel business are going to recover. The combination of September 11th, and the threat of terrorism, international issues and war have really crippled the travel industry. Why would people build these massive airports? Because the growth of airline travel is expected to increase exponentially. Now the airlines are in serious financial trouble. US Airways, who took 67 percent of the gates in Philadelphia, wants to renegotiate their lease. You’ve got all this outstanding debt. The problems are more severe, I think, in Pittsburgh. But, the airport is the gateway to Philadelphia. We’re trying to build Philadelphia as an international city. I want to see Fast Ship get the loan guarantees.
HA: Where are we with Fast Ship? Is that a reality? I’ve talked to people who call it a pipe dream.
SK: As far as it being a good idea, it’s a great idea.
HA: But is it do-able?
SK: At this point, the issue is will the United States Maritime Administration provide a Title 11 loan guarantee to back the debt to build the first two ships. That’s a judgment that I hope to be able to influence as mayor, because Philadelphia used to be a port city. And if you think about what you could do to make Philadelphia more competitive than Baltimore or Elizabeth, it isn’t just putting more container terminals in place, because Baltimore and Elizabeth have container terminals. It would be doing something that would sort of break the perception, and one of the things that could do that would be a ship that could cross the Atlantic at twice the speed of any other ship, and do it at a cheaper cost than any other ship. The Delaware River Port Authority has made a significant investment commitment to building a terminal that would allow that ship to dock, get its cargo off in a timely fashion and right to the train, and all of a sudden, you’ve got a signature project in Philadelphia. You have the building of the shipyard which has been a huge investment with very little to show for it.
HA: Speaking of trade….
SK: Let me finish. I think its possible and its something that needs to happen right away in 2004.
HA: Okay. Speaking of trade, are you familiar with the Corporate Council on Africa?
HA: In 2005, there’s a chance they could come back to Philadelphia. What would you do as mayor to capitalize on the potential for that?
SK: I was asked that question the other day by the Global Interdependence Center. I want to explain what we did to get Bio here. It’s an international association of all the bio and pharmaceutical companies. They have a trade association office in Washington. We went and got from Philadelphia 2000, which was the host committee for the Republican convention, but was the organization that put all the stuff together to make the pitch. We got as much of their stuff as we could. We got all the pharmaceutical companies to agree to underwrite a percentage of the cost of this convention. We made a commitment to raise, I think it was three or three and a half million dollars on top of that. We got the hotels to agree to reserve rooms and we said that we would make this convention something that they would be talking about for years, and everybody got on board. We got the city, through Jim Cuorato, we got the Green House, Ben Franklin technology partners, the University City Science Center, Merck, Glaxo, Wyeth and all the hospitals and medical institutions. And everybody said we’ve got to go get this, similar to how the city said we’ve got to get the Republican convention. So going after the African Council strikes me that we get all the consulates organized, there are people who live here from Nigeria, from Senegal, from Chad… Southwest and West Philadelphia has a large African population, many of who have relationships with governments back home. We have an African Studies department at Penn and Temple. You engage the community in something they can get excited about, that will be a way of planting the flag in Philadelphia for having trade and commerce with African countries. I think we go to the public health institutions and we try to bring them on board because of the AIDS epidemic in Africa. I think there’s a lot we can do. I think that you invest in kind and I’ll commit myself to be part of the planning for that and to be part of the host committee when they come and to greet them and to do all the right things from a diplomatic and dignitary standpoint, and creating ambassadors to help the under the radar stuff. And not just for that, but I’ve heard about other groups that have other organizations that they would like to get to come to Philadelphia. We also have to fix the convention center.
DB: What do you think of NTI and what’s your philosophy of neighborhood revitalization?
SK: Good idea and long overdue, for which credit I think is deserved. Bad execution and unwillingness to exercise political will to, among other things, consolidate the numerous housing agencies that result in an excess of spending. A lot of commitment to work with city council to try and compromise to get this thing moving faster. No dog and pony show, no road show for developers. There’s just not an effort to go out to the suburbs. All the homebuilders are based in the suburbs. The one developer here in Philadelphia, Penrose, and a couple of affordable housing companies are here in Philadelphia, but the vast majority of the new construction guys… Reland, Toll, or John Westrum, all those companies are in the ‘burbs. One of the things I think you need to do is you need to take the Philadelphia story out to them, and pitch it. Have a presentation that’s made for the Philadelphia development community. They’re going to want to know how are you going to make the process of our doing business in Philadelphia acceptable to us? Increasingly that process is becoming more difficult in the suburbs. Getting a permit in a township in suburban Philadelphia is like having root canal. You’ve got everybody against growth, zoning codes and building codes that are really complicated, and unless you have the land and had it zoned properly a long time ago, getting it done today is tough out there. How do we compete for that? There’s a customer for us, the homebuilder. How do we get a wage rate for the unions that’s going to make affordable housing more affordable in Philadelphia? When John Street put his political clout behind building a billion dollars worth of stadiums, he had enormous leverage it seems to me at that moment with the construction and building trades industry. What did he want? He had NTI. He wants NTI to be housing production, not just demolishing homes and cleaning lots, because that’s not NTI, that’s setting a base, its getting production. He said there were going to be 16,000 new housing units built. He’s now trying to take credit for PHA housing and for market rate housing, neither of which are NTI. The bulk of NTI is going to be in affordable housing and mixed income housing, and that’s harder to produce. If you don’t clear out the bureaucracy and give people a reasonable turnaround on permits… Kenny Goldenberg takes control of the theater on Chestnut Street and 30 days later he’s got a building permit because he’s got Lenny Klehr carrying his water. Well, a lot of people aren’t going to have the right lawyer who’s made the right campaign contributions. A lot of small developers in West and Southwest Philadelphia can’t get houses. We have families showing up in city council finding out that their house has been condemned by the Redevelopment Authority who never got a notice about it. That’s a hard way to do NTI.
Dbo: What’s your position on Kenny Gamble and Universal, and what’s your relationship with Mr. Gamble?
DG: What Kenny’s doing in South Philly is really a smaller version of his own NTI. Do you agree?
SK: Kenny was… I recruited Kenny to the board of Greater Philadelphia First, and he and I had a very good relationship, as he has a good relationship with the mayor. I have a lot of respect for him. I work closely with Raheem, who’s his principal executive, Raheem Abdul Islam. I work with a number of people in his organization. I think my relationship with him is good but I think you’d have to ask him for his point of view. What I told him was that whatever he needs to get done for economic development; charter schools, housing production, the city of Philadelphia under the Katz administration is going to be a good partner for him. What he wants to do is, he wants to create economic opportunity in that neighborhood. He wants people to have jobs, he wants them building houses, he wants them having construction jobs on city projects, he wants them going to charter schools. There’s probably a faith-based component to a lot of that, but that doesn’t frighten me. The idea of creating self-dependence, which is his theme, is the core value of Universal. His approach and his model is the model that I think NTI should be based on. The problem is, there aren’t that many Kenny Gambles. What the unique thing about Universal is Kenny himself. Kenny Gamble moved out of Gladwyne to move back to his old neighborhood. So where you don’t have a Kenny Gamble you need a Temple, or you need a Penn, or you need an Einstein, or you need a Drexel, or you need a hospital… you need an institutional presence that Kenny Gamble has effectively created in Central South Philadelphia.
Dbo: He’s actually been able to do a lot of stuff because of RDA and imminent domain…
SK: Because he’s powerful.
Dbo: And all those things that have cleared the space and displaced a lot of people, some of whom say they didn’t get their notices, he’s been part of that as well. He was content to let the machine roll through.
SK: He has, and you’re always going to see the benefit of that machine rolling through, but it seems to me that there’s a way to do that. I can’t sit here and say that I went into a house that somebody was living in, that they believe was habitable that was condemned, and said, you’re right, this house shouldn’t have been condemned. One reporter asked me, well if you have 30 houses on a block and 26 of them have already fallen to a state of non-repair, where you can’t economically repair them, why would you let three of them get in the way? I said, well why are we letting the church on the corner of 18th & Arch stay while Bill Rouse is going to build a 47 story building? How come that’s happening? The answer is not, we’re screwing you, because that breed a lot more cynicism and disrespect. The fact that somebody is doing that on behalf of Universal doesn’t excuse anybody for not taking the time to say to those people, ‘Here’s the deal we’re going to offer you. We’re going to build 50 new houses and we want to swap yours for one of them. Would you do that deal?’ Maybe they will.
DG: Isn’t the alternative to do what Trump had to do at the Taj Mahal and build around that one lady’s house?
SK: In the case of a lot of these homes, there was already an exit strategy for the land, because you knew the developer was coming in and what their plan was, then you can make a judgment whether you’re being fair or unfair to those three houses. But if the strategy is to clear the land and let it sit there because maybe somebody’s going to come along and build a property, that’s not a good solution.
DB: The city’s population continues to decline. What can a mayor do to reverse that?
SK: I’ve said that two things I want to accomplish… I want to move toward increasing the population toward the end of the second decade of 1.75 million, and 100,000 more jobs in the city. On the population, there are four target demographics that I look at. First is the million and a half people that are here. We have to slow the exodus; we have to stem the loss of people. Secondly, our students in the city and around the city are here already. They’ve already chosen the city as a place to go to school, they could have gone anywhere but they came to Philadelphia, we have to do a great job of marketing them to stay here. That’s a combination of jobs, affordable housing, marketing the cool of Philadelphia, which cuts across racial and ethnic groups, the scene here is good, the thickness to the labor market is good, and obviously the quality and diversity of housing is good. Thirdly are new Americans. We can do a much better job of positioning Philadelphia as a place for immigrants. We have a large and diverse population of new Americans from the Middle East, from the Far East, from India and Eastern Europe, from Africa, from the West Indies. Those are all populations that we can grow because we have a good story to tell, and I think what we have to do is raise the glass ceiling for a lot of those communities so that those people can feel they can become more of a part of the fabric of Philadelphia. And last are empty nesters. We have a good story to tell them. If you like arts and culture and you don’t like driving home to the suburbs and your kids are grown, and you’re tired of cutting the grass… and we can see the city pushing out, Northern Liberties and north of Girard Avenue people are coming and buying what we used to call row homes. Now they’re called townhouses. They used to cost $30,000-$45,000 now they’re selling them in Bella Vista for $300,000. When you think about growing the population you think about who’s your market and who you’re going after and what are you selling. When you think about growing the jobs base, its retail. The city has lost 10 million square feet of retail in the last 30 years. It is a popular perception that old Northeastern cities can’t recapture retail, but Chicago got retail back and Seattle got retail back, New York’s gotten retail back, Boston’s got retail. We don’t have it. Chestnut Street is starting to come back, but there are no big tenants. Where do you go? You go to Nordstrom’s, you go out to King of Prussia, you go to Willow Grove. Part of that is the parking, it’s the accessibility to downtown, it’s the cost of parking, and it’s the choices of shopping that you have. We’ve got to recover that retail because retail is jobs.
Dbo: But they don’t pay well. That’s one of the problems with keeping the students. You get these wonderful, smart, bright kids coming out of Penn, Drexel, Temple… but you’re not going to pay them enough in retail to stay in Philly. Now they have great educations and they want to start at $50,000, not $30,000.
SK: Retail’s not the place. I’m not talking about trying to connect students with retail.
Dbo: If building the economy is building job bases, you want to appeal to the people who you’ve just trained. You have to give them something that’s a reward factor.
SK: I know we have to cut this short, but we talked about retail, life sciences, pharmaceuticals and health care, biomed and biopharmaceuticals, information technology, media, culture and arts, professional services and financial services. These are industry verticals where I think the city of Philadelphia, not just the region, has a story to tell, and with some targeted marketing and the cooperation of the business communities in those industries that are here, has a chance to grow the city. We have an immediate problem, that’s a 12-month to 36-month problem that will determine whether Philadelphia does or does not have an economic future. That is, the 330,000 jobs in the companies whose leases are coming due in Center City. If we can’t put a tourniquet on that bleeding right now and get those companies to stay, it will be worse than the Phillies or the Eagles leaving. If Aramark or CIGNA or any of those long-term Philadelphia domicile companies decide, ‘We’re getting out of here’, that’s an avalanche waiting to happen.
HA: Have you heard anything about that?
SK: Well, the problem is that the city has a limited financial capacity to cut deals with them, and the governor, who is obviously a deal maker, is pretty busy. So he’s got a whole new team of economic development people and I’ve talked to enough of them to know that all of them have location consultants. They’re out there talking to Delaware and they’re talking to the suburbs, they’re talking to Philadelphia and they’re talking to Camden.
HA: If someone were to place a bet at one of your casinos, that these guys will still be here after 14 months, would the bet be that they would be or won’t be?
DG: And what’s the over and under?
SK: First of all, you would not be able to place a bet at one of my casinos, because I don’t have any casinos. But you could go play cards at the California card club if that interests you. I would say that the key thing is going to be the first two or three. We’re going to have to appeal to Aramark. Another reason why I’m going to be making a very aggressive proposal about wage taxes and business taxes within the next month is that I want to send them a message. Street and I disagree. Street says that it’s a subsidy game. You’ve got to go subsidize. And I’m saying that if you understand why you have to subsidize its because the tax structure is so disadvantageous to Philadelphia business.
DG: I have a quick question.
SK: You get the final question.
DG: A couple of weeks ago [Inquirer editor] Walker Lundy left town and as kind of a parting shot said that the reason Philadelphia is a second-rate city is because we tolerate second-rate, corrupt dullards as politicians. How right was he?
SK: He didn’t actually say that Philadelphia is a second-rate city, what he said was that he didn’t understand why Philadelphians, and he made a point of including the region and not just the city, because he pointed out some other people whose political performance was less than stellar, but I think he was dead on.
HA: What are your thoughts on Penn’s Landing?
SK: (stands) Not to pick a developer right now, to engage in a process that involves both the professional community and the affected community towards the design of a long-term water front plan that includes both Penn’s Landing and north of Penn’s Landing and the industrial water, the public space waterfront, and the commercial residential waterfront. To really get into the question of what period of time and what from what sources we’ll get the funds I think the place to start is I-95, because as long as I-95 is the divide, getting there will inhibit any real significant use; whether its open space and light entertainment or whether its more intensely developed.
HA: Can the city afford to do that on its own?
SK: No. The city of Boston didn’t do it on its own. And let me make a point that I think is really critical. This is a city where politics is so pervasive in everything, and everything is politics. Here we are, we’re now talking about the Schuylkill Valley Metro Rail, $2 billion, half of which would come from Washington. Covering I-95, a multi-billion dollar project… you mentioned the Big Dig. The reason the Big Dig was even possible was because of the political clout that Boston’s Senate and House delegation was able to exercise in Washington. Here, a year ago, we had reapportionment because of population and the Democrats in Philadelphia took the guy with a 20 year history in Congress, the ranking member from Pennsylvania in transportation, and reapportioned him out of his seat into a seat that involved Northeast Philly and Montgomery County where he had no prior experience so he didn’t run again. The next year, the guy who has the seat announces he’s leaving the seat so he can run against Arlen Specter. So we traded off 20 years of clout and the prospects of covering Penn’s Landing, I think, took a real serious hit. In order to save some guy in South Philly who was a party leader and some guy in Montgomery County. You think Massachusetts would have offed their ranking member of the House Transportation Committee? No, they wouldn’t. Long after O’Neill left as speaker, Massachusetts still had money coming in from Washington.
DG: Thank you very much. Would you participate in a City Paper-sponsored debate?
SK: I’m there. You just get John Street.