Philadelphia Tax News
AVI Released, Prompting Four New Council Bills
The City's Office of Property Assessment (OPA) released the new AVI property valuations on February 15 and mailed the information to property owners. The new assessments are the first step in Mayor Nutter's plan to overhaul Philadelphia's property-tax system in 2014. With assessments set at 100% of market value, the millage rate will be adjusted downward, probably somewhere between 1.2% and 1.5%.
CPDC's preliminary analysis suggests that 38% of single-family property owners will see a decrease in their real estate tax, and 27.7% will see annual increases of less than $250 – so that two-thirds of homeowners are not adversely impacted. The biggest increases will occur in the emerging neighborhoods that surround downtown with the most vulnerable groups being long-term homeowners in these areas. But overall, no more than 8% of city homeowners will see increases of more than $1,000 per year in their real estate taxes.
For more information on individual property assessments, please go to phila.gov/opa. For a detailed analysis and mapping of the impact of AVI on commercial and residential properties prepared by Kevin Gillen at the Fels Institute at the University of Pennsylvania, please go to centercityphila.org/docs/AVI_Analysis.pdf [PDF]. For a Philadelphia Inquirer article on the role of AVI in overall tax reform, please go to bit.ly/Z9MCWy.
In response, several bills were introduced in City Council. Councilman Kenyatta Johnson on February 21 introduced Bill #130122, which would create a hardship deferment for "extraordinary" property tax increases and would allow eligible homeowners to defer amounts exceeding 2.5 times their previous tax bill.
The deferral would apply only to primary residences, and owners would have to pay at least $1,000 in property taxes. Deferred payments would be subject to a lien until owners sell their property or can otherwise afford to pay.
To qualify, household income could not exceed 160% of Area Median Income for the Philadelphia metropolitan area, as determined by the U.S. Department of Housing and Urban Development.
To read the bill, please go to bit.ly/15h3bVy.
Three other AVI-related bills were introduced on February 28. Councilman Mark Squilla offered Bill #130142, which calls for phasing in over four years the increases and decreases in property taxes created by the Actual Value Initiative (AVI).
Councilwoman Maria Quinones Sanchez introduced Bill #130139, which would change the rate and computation of the realty use and occupancy tax (U&O), and give businesses a $2,000 exemption on that tax, which would aid small businesses, but shift the costs to all other businesses in the city. Sanchez's bill would leave the U&O rate at its current level - $5.51 per $100 of assessed value – but would divide the taxes between the city and the schools, instead of the current practice of sending all of U&O taxes to the schools. For most downtown office tenants, this could result in a quadrupling of their U&0 bills.
Bill #130141, introduced by Brian O'Neill, addresses property taxes of senior citizens. If their taxes are decreased under AVI, the city would adjust the bill and freeze the amount owed at the lower amount, The Philadelphia Inquirer reported.
To read the bills, please go to phila.legistar.com, click on search, and enter the bill number.
Wage-Tax Reduction to Resume
Mayor Nutter highlighted his priorities for the upcoming year on February 26 at a Greater Philadelphia Chamber of Commerce luncheon, and among them was reinstating the incremental lowering of the wage tax. He said the process would resume in Fiscal Year 2014, which begins in July.
The mayor also vowed to improve the City's performance in collecting revenue owed the city, which FTI, a global business consultant, concluded could amount to $85 million over the next five years.
Council to Consider Delinquent Tax Collection
City Council's Whole Council Committee will hold a two-day public hearing on the City's procedures for collecting delinquent real estate taxes, including those on vacant properties, commercial real estate, and residential investment properties, on Tuesday, March 19, at 1:00 p.m., and Wednesday, March 20, at 1:00 p.m.
The City of Philadelphia is owed more than $541 million in delinquent property taxes, penalties, interest and other fees, according to WHYY/Newsworks and the Philadelphia Daily News. The issue of delinquent taxes has heated up since Mayor Nutter's Actual Value Initiative will be increasing property taxes for many residents.
The hearings reference Resolutions 130088, 130090, 130093, 130097, 130098, 130099, which can be read at phila.legistar.com/legislation.aspx.
City Tax Revenues Up in January
City of Philadelphia tax revenues for January totaled $270.9 million, an almost 15% increase from the same month last year, according to the Office of the City Controller's January 2013 Financial Forecast & Snapshot.
Wage, earnings and net profit tax collections totaled $166 million in January, an almost 27% increase compared to January of last year.
January's sales tax collection dipped by less than 1% over last year's and totaled just over $20 million.
The report also looked at the cost of healthcare from 2008 to 2011, which in Philadelphia rose as much as 21% for treatment of various health conditions, while nationally the average was 13.3%.
To read the report, please go to bit.ly/YB84Xw [PDF].
Tax Credits Permanent for Job Creation
Mayor Nutter on February 12 signed Bill #121039, which makes permanent the amount available for tax credits for creating new jobs, which was increased from 1% to 2% of the previous year's total collection of the Business Income and Receipts Tax.
In December, the mayor signed a temporary measure, Bill #120855, introduced by Councilman W. Wilson Goode, Jr., who also introduced Bill #121039. For individual business owners, the maximum per new job is $5,000 for 2012 and 2013.
To read Bill #121039, please go to tinyurl.com/bb6ouwy.
To view Bill #120855, please go to tinyurl.com/bjaawej.
Business Activity Sluggish for Nonmanufacturing Firms
Nonmanufacturing firms in the region reported flat economic activity in February, according to responses to the Federal Reserve Bank of Philadelphia's January survey of nonmanufacturing.
Despite the downturn, more companies reported increased sales (40.7%) than reported decreased sales (25.9%), although one-third of firms reported a decline in new orders and only 22.2% reported an increase.
Eds and Meds News
Drexel's Five-Year Plan
After a year-long collaborative effort among Drexel University faculty, administrators, students, alumni, funders and other friends, the university has created a new five-year Strategic Plan that challenges the Drexel community on six initiatives, according to President John A. Fry's Drexel University President's Report 2012.
Those initiatives are to invest in academic excellence; intensify and improve the student experience; enhance Drexel's global impact; create an innovation nexus for research, technology transfer, and economic development; develop the nation's most dynamic transportation hub-based university district; and continue to grow Drexel's enrollment.
Citing an Econsult study, Fry notes that Drexel's impact on Pennsylvania's economy totals $2.4 billion per year, 27,400 jobs and $68 million in state and local tax revenues.
To read the report, please go to bit.ly/ZvcF01.
Philadelphia Noted for Life Sciences Successes
The Philadelphia region moved from sixth to fifth place in the Jones Lang LaSalle (JLL) annual ranking of life sciences clusters. Boston retained its first-place ranking and the New Jersey/New York City sector fell five spots to seventh place, trading places with San Diego, which moved up to second place.
JLL's 2012 Life Sciences Cluster Report tracks areas that have heavy concentrations of life-sciences intellectual capital, funding, and facilities. Cities are rated on workforce, academic community, and public spending on research and development.
The report cited the collaborative environment of the area's leading universities and research institutes plus the 1,200 life science companies, among many other advantages.
To read the report, please go to bit.ly/14UHYRp [PDF].
Penn's Campaign Exceeds Goal
The University of Pennsylvania's Making History fundraising campaign has brought in a total of $4.3 billion, surpassing the university's goal of $3.5 billion, the Daily Pennsylvanian reported on February 28. It was the single-largest fundraising effort ever conducted at Penn, the article noted.
The campaign began in October 2007 and involved more than 326,000 individual donors. The campaign hit its overall $3.5 billion goal in September 2011, before the scheduled close at the end of 2012.
To read the article, please go to bit.ly/VTfIMm.
Downtown Has Lowest Retail Vacancy
Philadelphia's central business district (CBD) has the lowest retail vacancy rate, 2.7%, and commands the highest effective rent, $27.32 per square foot (SF), compared to other markets in the city and suburbs, according to Integra Realty Resources' Metro Philadelphia Market Report 4th Quarter. Retail spaces in the city's non-CBD had a 4.4% vacancy rate and brought in $13.67/SF. Suburban Philadelphia saw a 5.3% vacancy rate with effective rent at $14.29/SF.
To read the report, please go centercityphila.org/docs/IRRmktreportQ42012.pdf [PDF]. Retail information is on Page 7.
Center City Home to Most-Booked Restaurants
Nine of the 10 restaurants named in Open Table's Top 10 most-booked restaurants in Philadelphia are in Center City, according to the reservation-booking service's latest report. The rankings were based on more than 807,800 diners.
Del Frisco's Double Eagle Steakhouse at 1426-28 Chestnut Street won the top ranking followed by these other Center City establishments: Buddakan, 325 Chestnut Street; Chima Brazilian Steakhouse, 1901 JFK Boulevard; The Capital Grille, 1338 Chestnut Street; Amada, 217-19 Chestnut Street; Parc, 227 South 18th Street; Butcher and Singer, 1500 Walnut Street; Barbuzzo, 110 South 13th Street; and Dandelion, 124 South 18th Street. Seasons 52 in King of Prussia came in sixth.
To view the list, please go to bit.ly/WtnSh1.
Registration Begins Today for Comment on Casinos
Registration begins today for public comment on the six applications for Philadelphia's second casino. The hearing for the Category 2 stand-alone license, which enables the casino operator to have up to 5,000 slot machines and 250 tables games, will be held by the Pennsylvania Gaming Control Board (PGCB) at the Pennsylvania Convention Center, on Thursday, April 11, from 9:00 a.m. to 9:00 p.m. and will continue on Friday, April 12, from 9:00 a.m. to 3:30 p.m.
Two of the proposals are for Center City sites: Tower Entertainment, LLC's at 400 North Broad Street and Market East Associates' at Eighth and Market Streets.
To register, please go to the PGCB's website, gamingcontrolboard.pa.gov. To view the six proposals and videos of the presentations at the February 12th public hearing, please go to gamingcontrolboard.pa.gov/?p=219#.
Today, PGCB added a third day for the hearing. This one will take place on May 8, at a time to be announced, at Lincoln Financial Field – West Club Level.
Arts and Culture News
Special Offers and Hours at Barnes During Flower Show
The Barnes Foundation is offering extended evening hours and other special offers during the citywide celebration of the Pennsylvania Horticultural Society's Philadelphia Flower Show, Brilliant!, which opened Saturday and runs through Sunday, March 10, at the Pennsylvania Convention Center.
The Barnes' extended evening hours are: Saturday, March 2, 9:00 a.m. – 9:00 p.m.; Thursday, March 7, 10 a.m. – 8 p.m.; Friday, March 8, 10 a.m. – 10:00 p.m.; and Saturday, March 9, 9:00 a.m. – 9:00 p.m.
For more information, please go to barnesfoundation.org/events/march-2013-events/.
City to Host International Catholic Conference
Mayor Nutter and Archbishop Charles J. Chaput on February 25 announced plans for Philadelphia to host the Eighth World Meeting of Families, a Catholic gathering expected to bring significant numbers of people to the city in September 2015, and which Mayor Nutter said could be one of the largest events ever held in the city.
The conference is held every three years, and this is the first time it is to be hosted in the United States, The Philadelphia Inquirer reported. The most recent World Meeting of Families took place in Milan, Italy, May 30-June 3, 2012. The gathering's website, family2012.com, reported that 1 million people attended the conference's Holy Mass on Sunday, June 3rd.
Millions Visit Independence Park
Independence National Historical Park, which includes the Liberty Bell and Independence Hall, hosted 3.6 million visitors and generated about $150 million in visitor spending in 2011, according to the National Park Service (NPS) annual report on the economic impact of NPS parks. That spending supported about 2,000 jobs in the Philadelphia region.
The report, conducted by Michigan State University, shows that the number of visitors was slightly down from 2010's 3.75 million, but spending was up from 2010's $146.5 million.
To read the report, please go to bit.ly/ZEWkWR [PDF].
CPDC Welcomes New Members
The Central Philadelphia Development Corporation (CPDC) is pleased to welcome two new members. They are Douglas Jordan of Alterra Property Group and Jesse Bender of Hanlon Creative.
Public Hearing on Sick Leave Bill
Tomorrow, Tuesday, March 5, at 10:00 a.m., City Council's Public Health and Human Services Committee will hold a public hearing on Bill #130004, introduced on January 24 by Councilman William K. Greenlee. The bill, known as "Promoting Healthy Families and Workplaces," legislation, would require employees in all types of firms to be given sick paid leave. A similar bill passed Council in 2011, but Mayor Nutter vetoed it.
To read the bill, please go to bit.ly/UHekfb.
Panel Will Discuss Energy Efficiency
A panel discussion on commercial building energy efficiency will be presented Thursday, March 14, from 8:00 a.m. to 10:00 a.m. at 1600 Market, 3rd floor.
Panelists from BOMA, the Mayor's Office of Sustainability, PIDC, The Reinvestment Fund and the Energy Efficient Buildings Hub will discuss Philadelphia's new energy benchmarking requirement for commercial properties, as well as low-interest financing and technical assistance available to support energy-efficient measures in existing commercial buildings.
Please RSVP by Thursday, March 7, to Carol Raffa at email@example.com.
Public/Private Partnerships in Real Estate
On Monday, March 18, from 7:00 a.m. to 10:00 a.m., the Pennsylvania Alliance Program of the International Council of Shopping Centers (ICSC)will present a panel discussion, "Using Public/Private Partnerships in Philadelphia Real Estate," at the Hotel Monaco, 433 Chestnut Street.
Panelists will include Craig Grossman, Senior Managing Director, Goldman Properties; and Anne Bovaird Nevins, Senior Vice President, Market Development, Philadelphia Industrial Development Corporation (PIDC).
Michelle Shannon, ICSC Pa/NJ/De Alliance Public Sector Co-Chair, and a Vice President at the Center City District, will chair the event. Ivy Olesh of the Center City District will co-chair.
Cost ranges between $20 and $40, if registered before March 15. To sign up, please go to bit.ly/YytjFg.
Future of Urban Sustainability
On Thursday, March 21, from 5:30 p.m. to 8:00 p.m., a Bicentennial Town Square event at the Academy of Natural Sciences of Drexel University, 1900 Benjamin Franklin Parkway, will focus on "Green City, Clean Waters: What's the Future of Philadelphia's Waterways?"
Can we envision the future of urban sustainability by re-examining our urban past? The program will feature an overview of presentations by the three winners of the nationally juried Soak It Up! competition to create innovative stormwater management solutions; and special guest Eric Sanderson will discuss how Manhattan's ecological past can help envision climate-resistant urban planning for the next 400 years.
The reception is 5:30 p.m. to 6:30 p.m., after which the program begins.
To register, please go to greencleanwaters.eventbrite.com.