Office Sector News
1700 Market Street Sold
Shorenstein Properties of San Francisco has closed on its purchase of 1700 Market Street, a 32-story, 842,000-square-foot office building, the Philadelphia Business Journal reported on January 7. The seller was Nightingale Properties of New York. The sale price was not disclosed, the article noted, but was reportedly slightly less than $200 million.
This is Shorenstein’s second purchase in Philadelphia, following last year’s purchase of 1818 Beneficial Bank Place for $185 million, with an additional $20 million committed for upgrades. Shorenstein expects to renovate its newest purchase.
To read the article, please go to bit.ly/1mJ2O47.
Former Post Office Building Sold
The Seoul-based Korea Investment Management Company is under contract to buy the 862,700-square-foot former post office near 30th Street Station from Brandywine Realty Trust for $354 million, The Philadelphia Inquirer reported on December 25.
Brandywine will continue to manage the building, now called Cira Square, for Korea Investment after the conclusion of the sale, expected in the first half of first quarter 2016, the article noted. The IRS moved into the building in 2010 on a 20-year lease after $225 million in renovations.
To read the article, please go to bit.ly/1MY27cf.
CBD Asking Rents Up in 2015
Average asking rent for office space in the central business district rose 4.1% in 2015, with Market West leading the submarkets with a 5.9% increase, according to JLL’s Chart of the Week for January 4.
Market East’s asking rents grew by 3.7%, the Navy Yard’s by 3.9% and University City’s by 0.4%. To view the chart, please go to bit.ly/1MnTEDp.
Service Economy Slightly Stronger than Manufacturing
Manufacturing conditions in the region showed slight weakening in December, according to firms responding to the month’s Manufacturing Business Outlook Survey, while the service economy stayed positive, according to the Nonmanufacturing Business Outlook Survey. The Federal Reserve Bank of Philadelphia conducts both monthly surveys.
In manufacturing, new orders were up for 22.4%, down for 31.9%, and remained the same for 41.0%. In nonmanufacturing, new orders were up for one-third (33.3%), down for 13.7%, and remained the same for 31.4%.
In manufacturing, the number of full-time employees increased for 15.6%, fell for 11.4%, and remained the same for 70.8%. In the service sector, 27.5% reported an expanded number of employees, 9.8% indicated fewer, and 60.8% reported the same number.
Looking ahead six months, 35.3% of manufacturing respondents were optimistic about future business conditions compared to 49% in the service economy;12.2% in the manufacturing sector and 9.8% in the service sector anticipated a downturn, while 47.2% and 37.3%, respectively, foresaw no change.
For the manufacturing report, please go to bit.ly/1OgN9PF. For the nonmanufacturing report, please go to bit.ly/1S8LzX2.
Two-Building Apartment Complex Coming to North Broad
Parkway Corporation of Philadelphia and Hanover Company of Houston will develop Hanover North Broad, a multifamily project that will occupy opposite corners at Broad and Callowhill Streets, the Philadelphia Business Journal reported on December 16.
A six-story building at the southwest corner will have 229 units, 11,000 square feet of retail space and a parking garage. Across the street on the southeast corner, a smaller, six-story building will have 110 apartments and 6,000 square feet of retail. Work has begun and is expected to be completed in two years.
The forthcoming Viaduct Rail Park was a factor in the developers’ decision to pursue the project, the article noted. The two parcels are currently surface parking lots and were sold by Parkway for $13.5 million to the development partnership.
To read the article, please go to bit.ly/1NW4gXR.
Residential Market News
Why Buying a Home Is Difficult for Philadelphia Millennnials
With a median income of $39,413 and a net worth of $1,167, according to U.S. Census data, Philadelphia millennials can afford to spend $45,700 buying a home, which qualifies them only for a house of approximately 497 square feet, the Philadelphia Business Journal reported, based on a data analysis from SmartAsset, a personal finance technology company headquartered in New York.
New York millennials have a median income of $42,108 and a median net worth of $2,431; those in Washington, D.C. have a median income of $47,380 and $3,586 in savings; and in Seattle, their median income is $41,167, with $8,066 in savings.
To read the article, please go to bit.ly/1K0j1Hj. To read SmartAsset’s report, please go to bit.ly/1TQCL5q.
A separate study on millennials and money, from Bank of America/USA Today, found that a large majority, 84%, of millennials, are “somewhat” or “very” confident in their ability to manage their personal finances, however, 41% are “chronically stressed” about money.
Among the top millennial worries: not putting enough into savings (43%); spending more than they should (30%); debt from student loans/college education (27%); and paying rent/mortgage (21%).
The study found millennials base their decision about where to live on: desire to be near family (42%); work/job/career opportunities (41%); where they grew up and financial reasons (both 28%); relationship/partner/spouse (24%); quality of life (21%); and desire to be near friends (18%).
To read the report, please go to bit.ly/1Zgpdr0 [PDF].
Eds and Meds News
Philadelphia and Thomas Jefferson Universities to Merge
The boards of trustees of Philadelphia University and Thomas Jefferson University voted to sign a letter of intent to merge in order to drive innovation in health and science along with architecture, design, fashion, business and engineering, the Philadelphia Business Journal reported on December 17. The merger is expected to be completed this summer.
Thomas Jefferson University has about 3,800 students and Philadelphia University about 3,700.
To read the article, please go to bit.ly/1NRZE7c.
Hite’s Contract Extended for Five Years
The Philadelphia School Reform Commission on December 17 voted 4-0 to extend the contract of Philadelphia School District Superintendent William R. Hite Jr. for five more years, through August 2022, The Philadelphia Inquirer reported.
Hite will receive raises only if District teachers do, and at the same rate. Teachers have been without a contract since August 2013, the article noted. To read the article, please go to bit.ly/1ITt6uQ.
School Boards Association Files Suit
The Pennsylvania School Boards Association, which represents each of the state's 500 school districts, filed legal suit Friday in Commonwealth Court claiming it's illegal and unconstitutional to cut off Commonwealth schools from funding when other programs and state employees continue to be paid, despite the lack of a final budget, Newsworks reported.
To read the article, please go to bit.ly/1Zbo12R.
CHOP Has New COO
Children's Hospital of Philadelphia named Douglas G. Hock as its new Executive Vice President and Chief Operating Officer (COO), effective February 1, The Philadelphia Inquirer reported.
Hock is currently COO of Children’s Medical Center Dallas and is originally from Philadelphia. To read the article, please go to bit.ly/1O712AL.
New Hotel Proposed at Broad and Pine Streets
Dranoff Properties and SBE of Los Angeles, partners in the development of the SLS LUX Philadelphia Hotel currently under construction at Broad and Spruce Streets, are proposing a new $75 million hotel project one block away, at Broad and Pine Streets, The Philadelphia Inquirer reported on January 4.
The new 22-story hotel, the Philadelphia Hyde, will house 76 boutique hotel rooms and 83 apartments and will be marketed at a lower price point, with room rates approximately $50 to $60 less expensive than the SLS, the article noted. Construction is expected to begin in about one year.
To read the article, please go to bit.ly/22Hgc9M.
DNC Given Hotel Assignments
Hotel assignments for delegations attending the Democratic National Convention in late July have been completed, with the Pennsylvania group taking rooms at the Doubletree at Broad and Locust Streets, CBS Philly reported on December 30.
Delegations from 57 states and territories were assigned to 26 hotels from Lansdale to Center City to the airport. Other hotels and their delegations include New Jersey at the Renaissance Philadelphia Airport, Delaware at The Inn at Penn and California in the Marriott Downtown.
To read the article, please go to cbsloc.al/1ZCilB4.
Target Announces Third Store for Center City
Target Corporation has signed a lease to open its third Center City store in space now occupied by the Callowhill Whole Foods at 2001 Pennsylvania Avenue, after the food retailer moves to its new 55,000-square-foot store in Rodin Square, currently under construction at 22nd Street and Hamilton Streets at Pennsylvania Avenue, the Philadelphia Business Journal reported on December 18.
Target previously announced plans to open a 19,000-square-foot store in a Pearl Properties project at 19th and Chestnut Streets and one in the Brickstone Companies’ mixed-use project at 12th and Chestnut Streets.
To read the article, please go to bit.ly/1JJSmhR.
Revenue Stable at SugarHouse in November
Revenue fell very slightly (-0.6%) in November at SugarHouse Casino on the Delaware River, according to the Pennsylvania Gaming Control Board.
In November, the casino took in $21,414,008, compared to $21,545,646 in October. The Commonwealth’s share of taxes in November was $5,509,937, compared to $5,731,053. The City of Philadelphia collected $693,738, compared to $714,635 in October.
To see all casino revenues, please go to bit.ly/1I0aqlt.
Arts and Culture News
New President of PHS
The Pennsylvania Horticultural Society (PHS) on January 5 announced that Matt Rader, former Executive Director of the Fairmount Park Historic Preservation Trust and the East Passyunk Business Improvement District, will serve as the 37th President of PHS beginning today. Rader, a Center City resident, most recently served as a management consultant with McKinsey & Company.
Among Rader’s top priorities will be the 2016 Philadelphia Flower Show, themed “Explore America,” March 5 through 13 at the Pennsylvania Convention Center.
To read the PHS press release, please go to bit.ly/1JVZyrg [PDF].
City Unemployment Rate Hits Seven-Year Low
Philadelphia's unemployment rate dropped to 5. 9% in November, the lowest rate in the city in more than seven years, the Philadelphia Business Journal reported on December 31. The preliminary data are not seasonally adjusted, meaning holiday hiring likely helped drive the rate down.
The number of Philadelphians employed rose to 650,108, a rise of 6,224 since October 2015, the article noted. Since October 2015, 4,300 more jobs have been added to the city's economy bringing the total to 691,800.
To read the article, please go to bit.ly/1TKa6iH.
Monthly Cap Raised on RideECO Benefit
On December 18, the U.S. Congress passed and President Barack Obama signed H.R. 2029, the Consolidated Appropriations Act of 2016, which included a provision that on January 1 increased the monthly cap on RideECO from $130/month to $255/month and retroactively increased the cap for 2015 to $250/month, RideECO announced.
This increase in the cap allows employees taking the maximum allowed to realize an annual savings of nearly $1,000, and employers to enjoy an annual savings of more than $230 per employee, per year, RideECO noted. To read the announcement, please go to bit.ly/1ITi1d5.
Leadership Team for Airport
Mayor Jim Kenney on December 15 announced a new leadership team at Philadelphia International Airport that will work with new airport CEO Chellie Cameron.
Folasade "Sade" A. Olanipekun-Lewis, chief financial officer for City Council President Darrell L. Clarke, will fill the newly created position of chief administration officer; and Diego Rincon will be deputy aviation director for capital development, overseeing airport construction and expansion.
Keith J. Brune will continue as deputy aviation director for operations and facilities and Tracy Borda will remain the airport's acting chief financial officer.
To read the article, please go to bit.ly/1VqhLUv.
Frontier Adds 10 New Routes
Frontier Airlines this spring will add 10 new nonstop destinations from Philadelphia International Airport that include Indianapolis, New Orleans and Raleigh-Durham (April 14); Cleveland, Nashville and St. Augustine (April 15); Cincinnati (May 13); Austin (May 15); and Kansas City, Missouri, and Milwaukee (June 2), The Philadelphia Inquirer reported on January 7.
Frontier offers lower base fares, but charges extra for everything, including a carry-on bag in the overhead bin, advance seat assignments, extra legroom, and beverages during the flight.
To read the article, please go to bit.ly/1THUyfk.
Study Would Examine Capping I-95
The Delaware Valley Regional Planning Commission approved the City of Philadelphia’s request to spend $4 million to study the upcoming reconstruction of I-95 between Spring Garden and Broad Streets, including the possibility of connecting Penn’s Landing with the rest of the city by capping I-95, PlanPhilly reported on December 17.
The Delaware River Waterfront Corporation (DRWC) released a study last April suggesting that building a four-acre park over I-95 would cost approximately $250 million and would provide a direct pedestrian path from Independence Hall to Penn’s Landing. DRWC has been working quietly to assemble project financing.
To read the PlanPhilly article, please go to bit.ly/1JY3sQm. To read the DRWC study, please go to bit.ly/1ldmFnf.
Most-Used Routes for Indego
The five most popular departure points in the Indego bike-share program are Rittenhouse Square, with 15,327 trips, followed by 15th and Spruce Streets, 13th and Locust Streets, 11th and Pine Streets, and 23d and South Streets, according to an analysis of Mayor's Office of Transportation and Utilities (MOTU) data by The Philadelphia Inquirer published on January 1.
MOTU cataloged the details of 308,000 rides on Indego bikes from the day the program debuted on April 22, 2015, to the end of September. The city's 700 bikes are available at 73 docking stations, with the largest density of stations in Center City.
To read the article, please go to bit.ly/1n53ocL.
Number of Public Parking Spaces Reduced
Between 2010 and 2015, the number of publicly available parking spaces in Center City has been reduced by 7.2%, or about 3,623 spaces, while parking occupancy declined by 1.7% during the period, from 75.6% to 73.9%, PlanPhilly reported on December 31.
Daily parking rates of $25.50 in Philadelphia ranked 10th of 10 large cities; $13 hourly rates ranked fourth. The article was based on the Philadelphia City Planning Commission’s (PCPC) 2015 Center City Parking Inventory.
To read the PlanPhilly article, please go to bit.ly/1VR69dq. To read the PCPC report, please go to 1.usa.gov/1Rx9vnd [PDF].
Parks and Open Space News
December Was Dilworth Park’s Busiest Month
A daily average of 75,000 pedestrians visited Dilworth Park during December, the busiest month yet for the park that opened in September 2014, according to the Center City District’s pedestrian counts in the park.
The month also was notable because it was the first time the number of weekend pedestrians, averaging 85,000 daily, exceeded that of weekdays (averaging 73,000 daily), when almost 300,000 workers commute to Center City jobs.
In addition to the Rothman Institute Ice Rink and the Rothman Cabin, the park was enlivened during the month by the Made in Philadelphia Holiday Market on the park’s south end.
For complete information on Dilworth Park and its activities, including the new Center City District Sips and Skate on Wednesdays from 5:00 p.m. to 9:00 p.m., please go to dilworthpark.org.
Spring Groundbreaking for Memorial Park
A memorial park to honor those killed and injured in the 2013 building collapse of the Salvation Army Thrift Store at 22nd and Market Streets is slated to break ground this spring after the City signed a “License and Donation” agreement that enables the volunteer fund-raising committee to set the date, The Philadelphia Inquirer reported on December 30.
As part of the agreement, the City will transfer $700,000 in capital funding to the park construction fund. In addition, $600,000 has been raised in private donations and pledges and about $445,000 has been donated in materials and services from companies and building trade labor unions, the article noted.
The goal is to complete the park by the third anniversary of the tragedy, June 5, 2016. To read the article, please go to bit.ly/1Reas3h.
Official: Mayor Kenney, Council, Police Commissioner, Others
Newly elected state Supreme Court Justice Kevin Dougherty on January 4 presided over the swearing in of Jim Kenney as the 99th Mayor of Philadelphia. Also taking the oath of office were the 17 members of City Council, who quickly re-elected Darrell L. Clarke as Council President, The Philadelphia Inquirer reported, bit.ly/1PIzHtf. Councilman Bobby Henon, who represents the Sixth District, was elected Majority Leader.
In the days before his inauguration, Kenney made a dozen appointments, the Philadelphia Business Journal reported. Vaughn Ross will serve as Deputy Chief of Staff, Debra McCarty as Water Commissioner, Charles Brennan as Chief Technology Officer, Jane Baker as Acting Health Commissioner and Trevor Day as Acting Procurement Commissioner.
Four others will continue in their roles – Dr. Arthur C. Evans, Jr. as Commissioner of the Department of Behavioral Health and Intellectual Disability Services, Thomas Conway as Deputy Managing Director of Community Life Improvement Programs, Bridget Collins-Greenwald as Commissioner of Public Property and Tim Wisniewski as Chief Data Officer, bit.ly/1Rmqg2t.
Miriam Enriquez and Hani White will lead the City's Office of Immigrant Affairs and Services as Director and Deputy Director, respectively, and Kelly Lee will lead the Office of Arts and Culture, bit.ly/1O0WfTH.
Earlier in December, Kenney selected a federal prosecutor, Sozi Pedro Tulante, to serve as Philadelphia’s next City Solicitor, bit.ly/1Rj9kM6.
On January 5, the City's new Police Commissioner, Richard Ross, was sworn in at his alma mater, Central High School, bit.ly/1S2ufml.
Nowak: Four Suggestions for Increasing Revenue for the City
In an article titled “Jim Kenney’s Money Challenge,” published in The Philadelphia Citizen, Jeremy Nowak discusses ways Mayor Kenney can pay for new programs and projects while increasing the quality and quantity of public services in the City of Philadelphia. Nowak suggests one way is to leverage public-private partnerships that increase the value of City-owned properties, citing Dilworth Park and Sister Cities Park as examples.
To read Nowak’s other innovative suggestions, please go to bit.ly/1PJ3ja2.
Wolf Uses Line-Item Veto and Signs Budget Bill
Governor Tom Wolf on December 29 vetoed pieces of a $30.26 billion budget passed by the Pennsylvania General Assembly, and agreed to release six months' worth of emergency funds for schools and more than $9 billion for human services, The Philadelphia Inquirer reported.
Wolf returned HB 1460 signed but with sharp words about the budget and a list of items vetoed.
To read The Philadelphia Inquirer article, please go to bit.ly/1O9wAZ9. To read the Governor’s 24-page letter and the items he vetoed, please go to bit.ly/22QMjnr [PDF]. To read HB 1460, please go to bit.ly/1Oh8edD.
On the same day the Governor signed the budget bill, Standard & Poor's (S&P) issued a warning that Pennsylvania's fiscal challenges remain and the Republican legislature must act responsibly to balance Pennsylvania’s budget.
“The $30.3 billion budget passed by both the house and senate is, in our view, structurally unbalanced and does not include pension reforms negotiated in the previously agreed-upon budget framework,” the S&P Bulletin noted. “As proposed, the budget had a $500 million budget gap for fiscal 2016 and left a $2 billion budget gap for fiscal 2017.”
To read the S&P Bulletin, please go to bit.ly/1OvbUri.
The House will reconvene today at 1:00 p.m. and the Senate will reconvene on Tuesday, January 19, at 1:00 p.m.
Andrew Stober Joins UCD
Andrew Stober, former Chief of Staff for the Mayor's Office of Transportation and Utilities, has been named Vice President for Planning and Economic Development for the University City District (UCD), the organization announced on January 6.
At UCD, Stober will oversee a portfolio that includes public space development and management, commercial corridor development, and pedestrian and transportation improvements for University City.
To read the announcement, please go to bit.ly/1IQZFJK.
CCD Restaurant Week
Center City District Restaurant Week takes place over two weeks this month, January 17-22 and 24-29, with participating restaurants offering three-course dinners for only $35 and three-course lunches for $20.
To view a full list of restaurants along with their menus and to make online reservations, please go to centercityphila.org/life/RestaurantWeek.php. While you are there, take a moment to enter the contest for 52 gift certificates from Center City restaurants.
Also, during Center City District Restaurant Week, you can take your Restaurant Week receipt to the Rothman Institute Ice Rink in Dilworth Park and receive $1 off admission. Skaters can also enter to win gift certificates from participating restaurants.
For complete information on the Rothman Institute Ice Rink, please go to dilworthpark.org/rothmanicerink.
Bacon Brothers to Play Special Benefit Concert for Viaduct Rail Park
The Bacon Brothers, Philadelphia natives Michael and Kevin Bacon, will play a special benefit concert to support the construction of the Viaduct Rail Park, Phase 1, on Thursday, February 4, at 8:00 p.m. at Union Transfer, 1026 Spring Garden Street. Proceeds of the first concert the Bacon Brothers have played here in recent years will go to the CCD-managed project, carried out in partnership with the City of Philadelphia and the Friends of the Rail Park.
Final plans and renderings by Studio |Bryan Hanes and Urban Engineers can be viewed at bit.ly/1Z9GvpV.
Tickets are $35 for General Admission and $125 for the VIP package, which includes open bar, hors d’oeuvres, parking and exclusive mezzanine viewing section. To purchase tickets, please go to utphilly.com or baconbros.com.
Save the Date!
In 2016, we will celebrate the 25th anniversary of the Center City District as well as the 60th anniversary of the founding of the Central Philadelphia Development Corporation and the launch of the Center City District Foundation. We are planning a special evening event in Dilworth Park on May 5, 2016. To become a sponsor and reserve your table, please contact Nancy Goldenberg at 215.440.5523 or email@example.com.