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THE CLEVELAND ASSOCIATION OF
BUILDING OWNERS & MANAGERS,
Cleveland, Ohio., February 21, 1964.

Re downtown Cleveland office building vacancy.

Mr. HARRY A. BLACHMAN, 1420 Illuminating Building, Cleveland, Ohio

DEAR MR. BLACHMAN: In furtherance of our telephone conversation of February 20, 1964, according to our office building occupancy report dated January 1, 1964, available office space in downtown Cleveland office buildings reporting 8,367,365 square feet, of which 7,784,409 square feet was occupied or 93.03 percent. Vacancy was 582,956 square feet or 6.97 percent.

Overall office and mercantile available square feet was 10,460,445, of which 9,777,672 was occupied or 93.47 percent. Vacancy was 682,773 or 6.53 percent. On January 1, 1963, available office and mercantile space was 10,568,565 square feet, of which 9,767,735 or 92.42 percent was occupied. Vacancy at that time was 800,830 square feet or 7.58 percent.

At the present rate of expansion it will take 5 years to use availabe office space in the downtown area.

With the completion of the Erieview Office Building and Federal Building 1,300,000 square feet of new space will come on the market with a devastating impact on our industry.

Throughout our industry the general rule is that 90 percent occupancy is the breakeven point. With present occupancy of 93.47 percent someone is going to be hurt when all the proposed office buildings for Erieview are completed. Yours very truly,

PAUL F. ADSIT, Executive Vice President and Secretary.

Senator WILLIAMS. Now, our anchor man, from New Jersey's League of Municipalities, a prominent attorney from Orange, N.J., accompanied by his wife, Nancy, and two daughters, is it, Bill? STATEMENT OF WILLIAM L. BRACH, NEW JERSEY STATE LEAGUE OF MUNICIPALITIES

Mr. BRACH. Two at this time.

Senator WILLIAMS. Why don't they come up?

Mr. BRACH. Would you like to come up? We will make you a part of the record, I also have Mr. Earl Williams from the city of East Orange.

Senator WILLIAMS. I would like to have him join us up here at the table, too.

You girls look hungry, so, Bill, I bet you are going to be crisp and efficient, as always.

Mr. BRACH. I will try and make it short, so that they do not have to eat my words. It is getting a little bit close to lunch.

I appreciate, Senator, the opportunity of appearing here, as a late starter. I realize that we came on short notice.

And I come with some apology that we have not had the opportunity to digest as thoroughly and as comprehensively the many features of S. 2468 as have some of your prior speakers.

I am appearing here in more or less two capacities, one in behalf of the New Jersey State League of Municipalities, and secondarily on behalf of my own city of East Orange, which had opportunity to appear before this committee in past years in the form of our mayor, the Honorable James W. Kelly, Jr.

You may recall when the mayor appeared here, we talked quite a while about the problems that we then foresaw of relocation in the city

of East Orange, and of course in the city of Newark, and other cities throughout the State of New Jersey, and in fact, throughout the Nation.

And he expressed some of the concern and apprehension that we felt then, in appearing here today. In appearing here some 3 years later, the problem has not gone away. It has only become more urgent, because then what was over the next hill is now on top of us in the form of the acquisition and demolition for the East-West Freeway construction and for the interchange with the Garden State Parkway in our city, as well as other highways, and other construction that is taking place in adjoining municipalities.

I would like to deal first, if I could, with some things that are taking place statewide on behalf of our State league.

Our State league, by the way, represents over 90 percent of the State's population of constituent members. There are 567 municipalities, and I understand that all but some 30-those are very, very small municipalities—are members.

Our State League of Municipalities, as befits the most urban State, I believe, in the Union, has long been on record for urban renewal legislation, for middle-income housing, and for low-income housing. And basically, it supports and endorses the type of program that is reflected by S. 2468.

Of particular interest to many of the smaller municipalities in recent years has been the 701 planning program, as well as the community facilities program, and we have participated heavily in that.

I understand that over $52 million in planning has been appropriated on behalf of New Jersey municipalities for the 701 program alone.

I do have occasion within the next 2 or 3 days to go up and meet with 14 municipalities in North Bergen, which have been concerned with trying to get some intermunicipal cooperation.

They have had some problem in their explorations of qualifying for the 701 planning program, which of course is administered through the State, and consequently the new vistas opened up by S. 2468, if enacted into law, would be extremely meaningful to them.

Their problem is drainage, because they have now found that the septic tanks have created some considerable odor in the area, and the beauty of these suburban communities is marred by what the septic tanks have produced.

The problem also is that there is inadequate through highway construction, which would bypass their local streets, and they find that they have traffic problems where there should not be traffic problems.

So now they are doing what our State league is trying to encourage more municipalities and more parks of the State to do, and that is to group together and form associations, both for planning and perhaps for joint projects, of an intermunicipal character.

And I know that I will bring to them whatever I can learn and find out about what we could hope for in the benefits of 2468, and I would certainly send back to this committee in its deliberations any viewpoints that they may express, because this will be the group of the mayors and the members of the planning boards as to where they particularly feel Federal assistance could be helpful in catalyzing joint municipal action.

They certainly do not expect to be bailed out by the Federal Government, but I think that Federal aid as a catalyst for this type of joint action is a very, very substantial constructive step.

I think growing interest in the community development aspects that are emphasized in the 1964 bill was evidenced last year by the programs conducted by the regional planning association in the New York, New Jersey, and Connecticut area.

There the results published just last October indicate an overwhelming interest, an overwhelming preponderance, in the view of those participating, in furthering regional planning and in doing something about the problems of mass transit and of doing something-although most of these people, large numbers of them, lived outside of the central city-for relieving the enormous problems of slum and blight that exist in the central city.

It is always gratifying to find that the people in the other areas do have a concern for the plight of the central city, and they do honor the notion that in a sense they are also their brother's keeper.

Now, I would like to just direct attention for a few minutes to some of the particular aspects of this bill that are of genuine interest, to where perhaps if anything they might fall somewhat short of what we believe could and should be done.

Our mayor has been, as I ventured before, particularly concerned and interested in the problems of relocation. I would like to enter a plea on behalf of our municipalities, and on behalf of my own municipality of East Orange, for what I call relocation justice.

It seems to me that our whole approach to relocation has been a stepwise approach, each year trying in some measure to expand the benefits. But we still, I think, if we face it honestly, have to recognize that we are not making whole those who are in the way of the highways or in urban renewal areas, when they are compelled to relocate. We are only trying partially to ameliorate the impact of this change in their lives and their fortunes.

I have cited in my prepared statement an instance-just as an example, because it could be reproduced many times-of a small business establishment in our city which involves considerable equipment, machinery, has tanks buried in the ground in order to conduct its business, requires shelving, counters, and all of the rest, which will have to move, in this year of 1964, and the estimated cost of that move is well over $10,000.

Now, this establishment is over the border from the urban renewal area, but is in the path of the highway. And, under present legislation, the limitation of their moving expenses, I think, is $3,000 which they can secure if they demonstrate that their costs at least equal or exceed that amount.

Who is going to bear the difference of over $8,000 that this establishment is going to have to pay in order to survive? It certainly seems to us that, when our small business people that have been all their lives in a particular business, and have invested their savings in this means of livelihood, are compelled to move and suffer a loss, the philosophy behind the bill, and what should be embodied in the provisions, is a complete coverage of their loss, not partial or limited

coverage.

This business suffering of $8,000 to $10,000 is a disaster for this particular business owner. And so it goes, down the street; with the druggist, with the drycleaner, with the stationery store, with all of these people who have become part and parcel of our community.

So, I would say that whether we are dealing with the property owner, whether we are dealing with the residential tenant who has invested sometimes to beautify and improve the home in which he lives, whether we are dealing with the business property occupant or with the business tenant, these provisions must be brought into line with actual loss. rather than this piecemeal approach.

And, to that end, I would recommend that there be uniformity in treatment, that those displaced by highways be given the same opportunity of recognition as those displaced by urban renewal. Their problems are exactly the same, and the impact is exactly the same.

I would also recommend that the artificial limitations be eliminated from your legislation, that it be left to administration to determine the size and extent of the loss, and that there be sufficient moneys appropriated to cover it.

It seems to me that, if this becomes too expensive, the answer certainly is not by saying that the unfortunate individual in the way of the highway, or in the way of urban renewal, should be forced to pay the difference that the governmental agencies are unwilling to pay in order to bring these public improvements to fruition.

I would like to pass on next to section 222(d) (3). We note there that there is some liberalization of the provisions as to occupancy. And I would wonder, in the same manner that I have just expressed as to relocation, why there should be different criteria for occupancy under 221 (d) (3), where you are limited to single-person elderly under the bill, than for public housing, which expands single-person occupancy to wherever the need exists.

It seems that if 221 (d) (3) is designed for moderate-income families, moderate income should be the one and only stipulation for occupancy; and, if a person be handicapped, or if he be limited by lack of skills, if he be single, he should have access to this type of rental or cooperative, or limited-dividend housing, in the same manner as his neighbor is, just because he may be older and meet the age limitation.

I think that, to the extent artificial limitations and categories can be eliminated, and the bill can be pointed purely and simply to its objective and to the needs of the community, we on the local level will be better able to adapt this legislation to do the job which has to be done.

The next problem of immediate concern-and I think primarily of the big cities, and to some extent relief has been applied, or provided, in our area by certifying the city of Newark among others as a depressed area, but I do not think that it totally answers the problemis recognition that the urban renewal plans and programing can only go as far and as fast as the local community can raise, from its limited resources, financing to meet its share. And we are struggling to do just that.

I would think, particularly in those areas and communities which are bearing the load of welfare cases and of poverty-people living in "poverty," a very popular term this year-those communities should get some additional recognition and assistance in lessening their required contribution and increasing the Federal contribution.

It would seem that a level of 80 percent Federal, 20 percent local— for communities which have extensive blight, extensive slums, have consequently the basic burden of the problem family, and of the poverty-stricken family, and the low-income family-would be justified.

They cannot impose a raise in taxes any more. The Newark rate this year will probably go up some 80 points. I have just taken an example from our own city, one from Newark, to give you an idea of where we stand on local taxes, and to show how we are really strained to the limit.

In East Orange, if you took a person of $6,000 income, who might own a home valued and appraised at a true value of $15,000, he would be paying a real property tax of $800 per year. That is close to 13 percent of his income, just for real property tax.

This same individual, living in the city of Newark, would be paying an even higher tax-over 15 percent of his income-in property tax. To try and raise the share of the enormous program ahead out of property tax, and out of this kind of home ownership and the income means of these people, is an impossibility.

I would suggest, in addition to a further look at the percentages, a consideration of the problem where land lies fallow and dormant— that there is difficulty in these central cities in procuring a redeveloper willing to undertake the additional risk involved-that there be some recognition, as a noncash contribution, of taxes that would normally be obtained from these lands.

Now, your noncash contribution, for taxes that are not paid, ceases when the buildings are demolished. And we would like to suggest that consideration be given of this loss of taxes being a credit after the buildings are demolished, until they are actually sold to a redeveloper.

On another phase of your program, which is included in S. 2468, on an expanded scale, is the direct loans for the elderly. We happen to be a sharer in that program, Senator.

We have the first project at East Orange. We received a commitment from the Community Facilities Administration. And I now understand that there is a second one planned by one of our church organizations.

I might say, and I think in full fairness to the Community Facilities Administration, they have been extremely helpful. We have gotten full cooperation.

And this might be an odd expression in a hearing such as this: We even felt they were expeditious in processing our application.

The one problem which faces us, and was mentioned by a previous speaker and I think we can certainly add to it-is that there, again, is different treatment under community facilities senior citizens housing on income limits than there is under public housing, and as there is under 221 (d) (3).

We find, ironically enough, that the income limits for tenants, for continued occupancy, in our public housing, will be higher than the income limits for those that can come into our senior citizens housing under the direct-loan program.

We think that they are unrealistic, and will partially frustrate our efforts to provide decent housing for the middle-income group of senior citizens, and we ask that some attention be given to moderating it.

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