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Eager to deal, but not like Ed

Katz and Street say they would bring less-flashy styles to the table.


By Susan Warner
INQUIRER STAFF WRITER

What Ed Rendell wouldn't do to make a deal.

He danced on a stage at the Hard Rock Cafe, spelling out Y-M-C-A with his body to the Village People song, at a bash for Democratic Party officials considering Philadelphia as a convention site.

He posed with Mickey Mouse and Goofy in announcing a deal that included $25 million in tax breaks for a Disney entertainment center.

And when McDonald's agreed last spring to open a regional headquarters in Philadelphia, Rendell starred in a promotional video announcing the deal.

Time was when mayors were judged on their ability to deliver basic services - to get the snow plowed and the trash collected. Ed Rendell added a new element to the job description - deal-maker.

He negotiated development packages for hotels, theme restaurants and entertainment complexes that have transformed Center City and generated jobs. Rendell hammered out these agreements personally in many cases, with legendary gusto and command of detail.

The two candidates vying to succeed him, Democrat John F. Street and Republican Sam Katz, are not likely to match Rendell in pizzazz and salesmanship, say developers and businesspeople who have dealt with all three men.

But they say both Street and Katz have a strong commitment to economic development and ample experience putting together complex packages.

"Neither one has the flamboyant personality of Ed Rendell that has attracted the whole world," said Mark Rubenstein, chief executive of the Rubenstein Co., one of the largest office landlords in Center City. "But I don't have a problem with either one of them."

Street has been involved in nearly all the major projects of the Rendell era. As City Council president from 1992 through 1998, he was a crucial player in downtown development because he controlled the flow of legislation in Council - including the tax breaks, low-interest loans and other incentives central to many deals.

Katz is a professional deal-maker. During a 24-year career as a financial adviser to cities and developers, he has nursed to completion complex agreements for stadiums and transit projects across the country, including Philadelphia's First Union Center.

Both candidates praise Rendell as a master deal-maker, but say they would approach that part of the mayor's job differently.

Both say they would put more emphasis on sparking development in neighborhoods. Both say they would delegate more of the detail work - the wee-hours negotiations fueled by fast food and diet soda - than Rendell did.

Street said he would focus less on individual deals and more on creating a business environment conducive to development, to minimize the need for special incentives. Key to such an environment, he said, is keeping the city budget balanced and taxes stable or falling.

Katz said he would try to curb the reliance of private developers on city subsidies. Every major deal of the Rendell years, from the Philadelphia Marriott to the mega-entertainment center planned for Penn's Landing, rested on loans, tax breaks or other financial assistance.

Katz also said he would move away from Rendell's emphasis on tourism and hospitality and try to stimulate development in the city's manufacturing, transportation and technology sectors.

Street, in an interview, called attention to the parts of his record that show support for development.

He cited the projects he helped develop as Council president - the Convention Center, the Marriott, the First Union Center, and the proposed DisneyQuest entertainment center at Eighth and Market Streets.

"I've been a part of every major development deal in this city in the last 20 years," said Street, who was a Council member from 1980 until he resigned last December to run for mayor. "I think I have a real idea of the role the mayor has in all of that and some of the things that you can do and that you can't do."

In 1984, Street supported the landmark ordinance to allow buildings higher than the statue of William Penn atop City Hall, until then the city's informal height limit. That change, along with city tax abatements, led to a burst of high-rise construction that remade the skyline.

Street also backed a controversial tax abatement that helped revive The Rittenhouse hotel and condominium on Rittenhouse Square, which had sat vacant for years after two developers ran into financial problems.

And Street said he bucked political pressure to support development of what is now the Philadelphia Marriott, at 12th and Market. The hotel was crucial to the success of the Convention Center.

Street recalled a meeting with city and Marriott officials to discuss the hotel chain's proposal to take over the project.

"I was sitting right in the room. I was right there and we had to make a judgment," he recalled. "Marriott had a national reputation for being anti-union and I was a significant part of a small group of people who said we have to do this. We did it, and we got criticized."

Street was less eager to point to the other part of his record, which shows a willingness to delay development projects until his conditions are met.

He held up construction of the Apollo of Temple sports arena for nearly a year until he reached agreement with Temple University to provide $5 million for low-income housing in the North Philadelphia neighborhood.

He killed a plan to sell the city-owned Civic Center to the University of Pennsylvania Medical Center because, he said, Rendell's asking price of $10 million was too low.

Street defended his and Rendell's record of deal-making, saying that the incentives granted were worth the economic benefit to the city.

"We have done studies, and I don't think we have been as generous as other cities," Street said.

Street said he would continue to shepherd high-profile developments downtown, but would also add more neighborhood projects to the mix.

"I feel very strongly that we need to prepare some of our neighborhoods for economic development," he said.

David Marshall, developer of The Rittenhouse hotel and condominium, said he was confident Street's commitment to the neighborhoods would not come at the expense of Center City.

"There is a level of comfort that John is gaining in the Rittenhouse Square world," Marshall said. As a councilman, "it's something he never had to go out of his way to appeal to," Marshall said. "But now he knows he's got to appeal to the entire city."

Katz, too, has a list of public-private deals he has played a hand in: Orlando International Airport, transit systems in Los Angeles, Atlanta and Raleigh-Durham, the First Union Center, and stadiums in Cleveland, Denver and Baltimore.

As co-chief executive of Public Financial Management Inc., and later as an independent consultant, he advised local governments on financing stadiums and other projects. He has also been on the other side of the table, representing team owners and developers.

"My whole professional career has been spent in economic development and financing - structuring and negotiating deals, putting the deals together and finding the money.

"If that's an important component of the job," he said, "I don't think anybody will bring more credentials to the job."

Like Street, Katz said he would look beyond the Center City hospitality and cultural projects that have been Rendell's hallmark.

He said Rendell pushed development in those areas because, when he took office in 1992, he inherited the just-completed Convention Center, courtesy of the state legislature and mayors before him.

"That was the card dealt to him and on which he effectively capitalized," Katz said.

Today, Katz said, "I think there's a certain momentum in tourism, culture, the arts. They will require less attention and support of the mayor."

Katz said he would turn his efforts to other areas, particularly the city's manufacturing, transportation and technology industries. He said the 1,200-acre Navy Yard represents a tremendous opportunity to develop new businesses beyond the hoped-for shipbuilding operation.

Katz also said he would try to capitalize on the city's universities and hospitals to create technology businesses.

"The city has become a gigantic center of medical research and biotech," Katz said. "There are business incubation possibilities that I think we've only begun to recognize."

The city also should make better use of the Delaware River port and its many freight rail lines to lure employers that need to be near a shipping hub, Katz said.

He cited two transportation projects he would support - an intermodal rail yard planned for South Philadelphia, where cargos would be moved among ships, trains and trucks, and the proposed FastShip line, which backers say will transport goods across the Atlantic Ocean at high speed by 2003.

Katz also said he would turn more attention to neighborhood retail districts. He envisions bustling commercial activity on Germantown and Cheltenham Avenues in Northwest Philadelphia, on Frankford Avenue in the lower Northeast and Passyunk Avenue in South Philadelphia.

"The people who are going to work in these various industries I'm talking about aren't all going to live in Center City. They're going to live all over Philadelphia," he said. "Jobs are the key."

Sam Greenblatt, president of Pinnacle Real Estate in Center City, a Katz supporter and business partner, said that Katz, though he has never held elective office, understands politics on many levels. He recalled Katz's work on a sports arena in Florida.

"There were major politics in that - public politics and private industry politics," Greenblatt said. "Sam was the glue in that and got it accomplished."

Inevitably, both candidates' personal styles are compared with Rendell's. Both are more reserved than the garrulous Rendell, who rode a circuit of ribbon cuttings and cocktail receptions.

Katz and Street downplayed the importance of personality in deal-making.

"If the numbers aren't right, if you can't get close, it doesn't matter how warm and friendly you are and how charming you can be," Street said.

Referring to the art of the deal as practiced by Rendell, Katz said: "I think it's something this mayor has enjoyed doing as compared to other mayors, and he's done it well.

"But there are a lot of other things that a mayor has to do as well. A lot of time devoted to the deal-making is time spent away from things the mayor ought be doing."




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