CEPP Video.wmv

Uploaded by UBStrategicStrengths on 04.03.2010

This video is from the University at Buffalo's Strategic Strength in Civic Engagement and Public Policy.
Civic Engagement Research Fellow 2009-10 Professor Christopher Mele, UB Department of Sociology, describes his field work and research on Publicly Subsidized Urban Development and Environmental Justice Concerns in Chester, PA
Ok, I'm (Christopher Mele) in Chester, Pennsylvania which is 15 miles south of Philadelphia.
and what you're seeing is the construction site for a major league soccer expansion team stadium
called the Philadephia Union. It is supposed to open in March 2008.
The stadium costs about $115 million, $47 million comes from the State of Pennsylvania, $30 million comes from a county bond
and I guess what's interesting about this soccer stadium is that it is located in what is called a Keystone Opportunity Zone or KOZ.
which is a tax abatement zone for incentives for developers for abandoned, unused or underutilized land in distressed areas within the State of Pennsylvania.
So, there are certain incentives for developers to build upon these spots.
First of all, they pay no municipal, school district or county taxes for businesses that locate there or developers that build on these spots
and they earn, sorry, they pay no taxes on earned income or net profits or sales or wages or even any payroll taxes until the year 2014.
So, what is the purpose of the KOZ? Well the first thing is job creation and the second is economic development that is supposed to spill over into distressed communities.
That first KOZ (points) is if you zoom back here is this power plant which was built in the early 1900s and has since been converted using KOZ development money into an office building.
And the KOZ are supposed to spill over economic development into the community which I'll show you in a minute.
This project I'm working with a group called the Delco Alliance for Justice which is a community based organization that has done a lot of work in Chester over the years.
And their question is what is the likelihood of the spillover benefits for Chester City? And if not necessarily benefits then what are the costs?
This town are all along the waterfront. The Delaware River is on the other side. There's the bridge the Commodore Barry that goes to New Jersey.
And the two big KOZ zones: the first one is this soccer stadium and office building I just showed you and the second is Harrah's Casino and race track.
To my right is Harrah's Casino and Racetrack which is built on the second KOZ zone which again has all the development incentives.
It was built and opened in 2007. There is 100,000 square feet of gaming floors. During the construction period alone Harrah's saved $8 million in taxes that would have otherwise been paid if it was not in a tax abatement zone.
Now this is on the site of what used to be called Sun Ship Building Company. It was the largest employer in Chester during the second world war.
They employed up to 10.000 people building ships for supplies going to Europe.
Now the results of this project since it opened in 2007 and it is now 2010, the results for the community have been mixed.
The city itself receives $10 million in fees that were negotiated from the start that go into the general coffers. So that is about 20 percent of its annual budget so it is quite significant.
Harrah's does use local vendors for much of its supplies and it does endow some local scholarships in high schools.
But the expectations for new restaurants, gas stations, shops nearby that were supposed to spill over into the community has not happened at all.
And as a matter of fact part of it might have to do with the fact that right across the street is a state prison.
Which is only about half a block away. So that's our second KOZ zone.
Ok, now we're in downtown Chester which you can see is pretty empty, abandoned. This used to be a vibrant town.
There are 36,000 people that live in Chester now. At it's peak during the second world war there were 80,000.
The current population is about 76 percent are black, there is no grocery store here, the poverty rates are the highest in Pennsylvania, as are its crime rates which are the highest per capita in this state.
Now, the interesting thing I supposed in relation to the KOZs is this: in order to get a KOZ designation, in order to be eligible, a distressed area has to meet certain criteria.
It has to be 20 percent, a minimum 20 percent abandoned, 20 percent of the population has to be below the poverty level and 20, at least 20 percent population decline over the past 30 years.
So you can see that Chester certainly meets those criteria more than enough.
But the other odd relationship between the KOZs and downtown is that there are no requirements for those developments that we just saw: the casino, the stadium and others that have been built
to address any of the social problems, any of the economic problems that allow for those tax abatements to come in the first place.
So on one hand you have the criteria that in order to receive these benefits but on the other there is no performance standards,
there are no requirements, there is no reporting of the companies that move into those zones to actually have to do anything to address those levels of poverty etc.
So, in my analysis and what I am doing for the Delco Alliance of Justice I am emphasizing two points:
The first one is the kind of economic development that is happening on the riverfront are actually the worst kind of development for getting a downtown to come back.
Casinos and soccer stadiums, the literature shows are typically the least likely to produce any kind of economic benefit spillover effect into a community.
That's the report I'm working on. The second point I'm trying to make in this report is that there is actually a negative consequence to all this waterfront development.
Because the waterfront is separated from this ghetto district that we're standing in by a swath of abandoned buildings that have been cleared
and it is turning into basically overgrown strewn lots and there is no real plan for that right now and a large dividing road called route 291.
So, the developments are island like. They are separate, they are cities within cities, within the city of Chester.
So you have this area in which the ghetto sits in contradistinction to the two areas that are being developed right now
and the intended users of those spaces are visitors, tourists, sports fans and for the higher end residential buildings that are supposed to be there eventually, middle and upper-class residents.
So, rather than try to bridge the gap of economic and class and racial segregation that has occurred in this city for decades, it is actually ending up enhancing it.
So, those are the things that we are working on right now this semester. My name is Chris Mele and I'm in the Department of Sociology (at the University of Buffalo).