Keystone Opportunity Zone expansion bill sails through City Council

Philadelphia City Council passed a controversial bill to authorize at least 80 new Keystone Opportunity Zones, or KOZs, in the city by a wide margin. 

The zones exempt property owners from certain state and local taxes. Only at-large councilperson Helen Gym voted against the legislation, which councilmembers have said was expedited to meet the state’s Saturday deadline. 

The KOZ program has attracted widespread criticism, most recently from Gym herself, for poor record-keeping and a lack of impact reporting. 

The bill had undergone several revisions, principally due to Councilwoman Jannie Blackwell’s request that one development – a billion-dollar redevelopment of the former University City High School property helmed by Drexel University and Wexford Science+Technology – be exempted from it.

Blackwell had argued for more minority inclusion on the project, but struggled to justify the need for tax breaks in an area seeing a surge in development.

“These are major projects,” she said at an earlier council session. “All around University City, we have so much development, and they need those dollars – they worked hard in applying for them.”

Sources said that Blackwell had confused the project with another development, Hospitality III LLC’s “Study Hotel” project, at 33rd and Chestnut streets, after she quietly tabled an amendment to exclude the project.

Today, Blackwell said she had instead extracted the concessions she desired from the companies in private, causing her to withdraw the amendment. 

“They had 25 percent inclusion...But we got 40 percent,” she said, referring to a percentage of minority employees to be hired by the project. “They agreed to everything.”

She said she intended to extract similar deals from Hospitality III and other notable University City developers, like Brandywine.

However, neither Drexel nor Wexford would comment on the specific nature of this arrangement. Drexel issued only a general statement on its committment to minority inclusion.

"Drexel and its partners remain committed to local minority firms, women-owned firms and veteran businesses," said Niki Giankaris, a Drexel spokesperson. "For three of its recent development projects, Drexel and its development partners awarded $68 million in minority contracts and continues to work with Bittenbender Construction to hire local employees for jobs at its construction sites while also putting together a robust procurement program to work with local vendors.”