Office Sector News
United Plaza’s 17th Floor Leased
JLT Re (North America) Inc., a reinsurance company that is part of Jardine Lloyd Thompson, has signed a 10-year lease for the entire 17th Floor (31,000 square feet) at United Plaza, 30 South 17th Street, the Philadelphia Business Journal reported on March 18.
JLT Re had temporary space in Centre Square for the last two years under an arrangement that expires in October. The company, which has 120 local employees, considered other cities but decided to stay in Philadelphia because of the convenience of flights from Philadelphia International Airport to London, where the parent company is headquartered.
To read the article, please go to bit.ly/1LzZrXY.
Aging Buildings Reaching Decision Point
The average age of office buildings in Philadelphia’s central business district (CBD) is 58 years old, compared to 32 years old in the region, according to Jones Lang LaSalle’s Chart of the Week for the week of March 9. In the CBD, which has 40.3 million square feet of office space, 12% of the buildings have been renovated since 2005, slightly higher than the 10.1% in the region.
With more dynamic job growth more buildings can be repositioned as office space, rather than being repurposed for hotel or housing.
To view the chart, please go to bit.ly/1ErUuaq [PDF].
Groundbreaking for 500 Walnut Condos
Scannapieco Development Corporation on March 12 broke ground for 500 Walnut, a $180 million residential tower which will overlook Independence Hall.
The 26-story building will have 38 condos ranging in price from $2.5 million to $17.6 million and a two-level penthouse that will have exclusive use of the roof. Units will range from 2,700 square feet (SF) to 4,300 SF, the Philadelphia Business Journal reported.
The project’s designer is Cecil Baker + Partners.
The condo tower will have a 4,000-SF treetop terrace designed by Robert J. Gorman of Mahan Rykiel Associates Inc. of Baltimore. The terrace, which has a direct view of Independence Hall, sits next to a retractable glass wall that leads to an interior lounge, boardroom and billiard room and library.
A completion date was not announced.
To read the article, please go to bit.ly/1FsLztI.
Macerich Rejects Takeover Bid
Mall operator Macerich on March 17 rejected a $16 billion hostile takeover bid from competitor Simon Property Group, the Associated Press reported.
Simon offered $91 per share in cash and stock for each Macerich share, an offer valued at about $22.4 billion, counting Macerich debt. In rejecting the offer, Macerich noted that Simon's offer significantly undervalued the company and wasn’t in the best interests of its shareholders.
Macerich and PREIT are partners in the transformation of The Gallery’s 1.4 million square feet.
To read the article, please go to strib.mn/1CFaaME.
On Friday, Simon Property Group Inc. raised its unsolicited takeover bid for Macerich to about $16.8 billion, or $95.50 a share, calling it a final offer, Bloomberg reported. The offer will be withdrawn if Simon is unable to meet with Macerich to negotiate terms of an agreement by April 1. To read the latest update, please go to bloom.bg/1Hf7K4N.
City’s Job Growth Lags Over Decade
The Philadelphia job market has grown by less than 2% over the past decade, according to U.S. Bureau of Labor numbers analyzed by The Pew Charitable Trusts’ State of the City report.
The number of salaried jobs in Philadelphia increased 0.3% in 2013-2014, while nationally the number rose 2%.
Compared to the metropolitan region and the country as a whole, Philadelphia in recent years has tended to gain fewer jobs during boom times and lose fewer during recessions, the report notes.
To view the chart and text of the report, please go to bit.ly/1be5kts.
Eds and Meds News
Poll: Education Ranks as #1 Issue
Reflecting the huge amount of media coverage of Philadelphia’s public education funding crisis, no surprise that a new poll from The Pew Charitable Trusts’ Philadelphia Research Initiative finds that education is the top issue Philadelphians are concerned about as the mayor’s race heats up. Findings from a survey sample of 1,603 residents showed that 32% of the respondents ranked the issue number one; crime ranked second at 23%, while jobs and the economy ranked third with 22% of the respondents.
Pew’s announcement made no connection to the anemic job growth they reported earlier in the week, the fact that a slow economy results in weak demand for commercial real estate, and an earlier Pew report that noted that as a consequence Philadelphia’s real estate tax base per student was substantially lower than surrounding suburbs.
To read the poll’s findings, please go to bit.ly/18yHzL3.
More College Grads Staying in City After Graduation
Philadelphia has significantly more college students educated in Greater Philadelphia colleges and universities who stay in the region after graduation (64%) than other cities, including Boston (50%) and Baltimore (37%), according to Campus Philly’s report, Retaining College Talent and Spurring Job Growth, released earlier this month.
The report notes that between 2006 and 2012, Philadelphia gained 100,000 new millennials between the ages of 20 and 34, a population twice as likely as older Philadelphians to have a college degree. In addition, Philadelphia ranked #1 among large metro areas in the country in growth of population over age 25 with a college degree.
Almost three-fourths, 73%, of recent college graduates recommend Philadelphia as a place to live, up from 55% in 2010, and strongly correlated to the rise in internships. In 2010, 62% of recent graduates reported having an internship while in college. By 2014, that figure was 81%.
To read the report, please go to bit.ly/1MUV19q [PDF].
SugarHouse Revenue Up in February
Despite record cold weather and a short month, revenue during February at SugarHouse Casino on the Delaware River increased by 7.1%, according to the Pennsylvania Gaming Control Board.
In February, the casino took in $22,983,591, comparing favorably to January’s $21,459,275. The Commonwealth's share of taxes in February was $6,210,422, while January’s was $5,613,715. The City of Philadelphia collected $770,033 in February and $703,614 in January.
To see all casino revenues, please go to bit.ly/16izgf9.
Arts and Culture News
Prince Theater Revived
The Philadelphia Film Society (PFS), the nonprofit that oversees the annual Philadelphia Film Festival and operates the Roxy Theater on Sansom Street, purchased the Prince Music Theater on March 5 with the help of an $8 million grant from the Wyncote Foundation, The Philadelphia Inquirer reported.
The 450-seat theater has a giant screen and digital and 35mm projection systems.
On a night when the combined four screens at The Prince and the Roxy are in use, the PFS will have 768 seats ready for occupancy, the article noted.
Among the programs scheduled are an Alfred Hitchcock program, centered on Dial M for Murder, Rear Window, and To Catch a Thief; Filmadelphia, offering work by area filmmakers; and Passport to World Cinema, an international series.
To read the article, please go to bit.ly/1C2L1JP.
Arts & Culture Lead Nonprofit Groups in Recovery
In a November 2014 survey of nonprofit executive directors in the Greater Philadelphia area, just over half (51.1%) reported little or no economic recovery since the end of the Great Recession, pegged at June 2009, according to the Nonprofit Center at LaSalle University’s School of Business, which conducted the survey.
While arts and culture organizations were among the hardest hit during the recession, the survey found they were progressing slightly better than the group as a whole. Only 11.9% of arts and culture organizations responded that they weren’t experiencing any economic recovery, while 35.7% indicated a good or great recovery, compared to 28.4% for the survey group as a whole.
Respondents attributed their economic recovery to individual giving (75.5%), with 18.5% credited to major donors. Private foundation grants provided the second highest support, with 46.7% of respondents noting their giving.
To read the report, please go to bit.ly/1bo5jTW [PDF].
Philippe Starck to Design SLS Hotel Interior
Carl Dranoff of Dranoff Properties and sbe development company on March 13 announced that French designer Philippe Starck will create the interior design for the SLS LUX Philadelphia Hotel, set to be built at the corner of Broad and Spruce Streets. It is Starck’s first project in Philadelphia.
The 47-story tower will have 152 boutique hotel rooms on the lower floors and 90 condominiums, which will occupy Floors 20 through 47.
Dranoff’s announcement also included a tribute to Kenny Gamble and Leon Huff, whose Philadelphia International Records, home of the Sound of Philadelphia, was destroyed by fire. That property will be absorbed by the hotel development.
Construction is expected to begin this fall.
To read the press release, please go to prn.to/1BpM7Ky.
To Reopen PATCO Station Would Cost $18.5 Million
To reopen PATCO's Franklin Square subway station in Old City would cost at least $18.5 million, about 50% more than transit officials had expected, The Philadelphia Inquirer reported on March 16.
The Delaware River Port Authority (DRPA), parent company of PATCO, long has considered reopening the station beneath Sixth and Race Streets, which has been closed since 1979, and commissioned a study that found an estimated 1,300 riders would use the station, the article noted. The new study makes no recommendation about reopening the station.
The station now serves as an occasional storage site for construction crews working in the PATCO tunnel and has electrical power to operate emergency lights that remain and provide air-compressor power for rail switches.
To read the article, please go to bit.ly/1GYtTYB.
SEPTA Costs Increase
Rising labor and healthcare costs are the biggest drivers of a 2.8% increase in SEPTA's operating budget proposed at $1.36 billion for the financial year that begins July 1, The Philadelphia Inquirer reported.
The budget provides for 70 more employees, mostly in safety and construction-support positions, and would make permanent the all-night subway service on Fridays and Saturdays that began as an experiment last summer.
No fare increases were budgeted and a state subsidy of $658 million is anticipated, up by $29 million from FY15's spending plan.
Hearings on the proposed budget are scheduled for next month and will be held in Philadelphia on Tuesday, April 21, at 11:00 a.m. and 5:00 p.m. at the SEPTA Headquarters board room, 1234 Market Street.
To read the article, please go to bit.ly/19F6kXd.
In other SEPTA news, State Representative Dwight Evans (D., Philadelphia) was named to SEPTA’s 12-member board of directors by Governor Tom Wolf, The Philadelphia Tribune reported on March 1. In 1991, Evans helped establish the Public Transportation Assistance Fund, the first dedicated funding source for mass transit, the article noted.
To read the article, please go to bit.ly/1HYbYPt.
Parks and Open Space News
$1 Million Grant for Reading Viaduct Rail Park
The Reading Viaduct Rail Park project took a major step forward with the March 16 announcement of a $1 million grant, which was part of an $11 million investment being made by the John S. and James L. Knight Foundation and the William Penn Foundation in five Philadelphia parks in their “Reimagining the Civic Commons” initiative.
The grant will help fund Phase 1 of the Reading Viaduct that will turn a dilapidated quarter-mile portion of defunct rail line that runs from Broad Street southeast across 13th and 12th Streets to Callowhill Street into a vibrant green park with walking paths, landscaping, lighting, seating and gathering spaces. The grant helps match other commitments made to the project by the City of Philadelphia, the William Penn Foundation, and the Commonwealth’s Department of Conservation and Natural Resources.
There are just two days left in the public comment period for you to send a letter of support to the Commonwealth in support of the final piece of funding, a $3.5 million Redevelopment Assistance Capital Grant to the CCD. For a letter you can personalize and email today, please download centercityphila.org/cc_cpdc/RACPletter.doc.
SEPTA is leasing the land to the Center City District (CCD) for renovation of the Reading Viaduct Rail Park and when completed, the CCD will turn the project over to the City of Philadelphia, which will own the park and maintain it in a partnership with the Friends of the Rail Park, and the CCD.
The new 25,000-square-foot linear park will provide a much-needed green amenity to the Callowhill neighborhood and support the expansion of both Chinatown and the thriving, mixed-use neighborhood on the expanding edge of Center City.
Designed by Studio| Bryan Hanes and Urban Engineers, the $9.6 million project will be funded through a combination of state, city, foundation and private resources. For more information and to view renderings, please visit centercityphila.org/about/viaduct.php. To visit Friends of the Rail Park, please go to therailpark.org.
Sister Cities Park's Logan Square Cafe Adds Weekend Brunch
Logan Square Café at Sister Cities Park, 18th Street and the Benjamin Franklin Parkway, will begin offering BYOB table service brunch on Saturdays and Sundays from 10:00 a.m. to 3:00 p.m. starting this weekend, March 28 and 29. Walk-up service will still be available with the high-top tables allocated for customers using the walk-up counter while low-top tables will be available for table service. Weather permitting, outside tables will be available for both types of service, with fountain-side tables reserved for table service. For more information on Logan Square Cafe, please go to ccdparks.org/sister-cities-park/logan-square-cafe.
Smartphone Photos on Display at Dilworth Park
Dilworth Park currently is showcasing a selection of international photos from the “Shot on iPhone 6” collection on the six LCD screens of the concourse. The exhibit will run through Sunday, April 12.
While the screens on the surface of Dilworth are devoted primarily to arts, culture, civic and non-profit institutions, the screens on the concourse level, which are managed by Titan, are a place where commercial advertising helps generate operating support for maintenance and public programming in Dilworth Park. A recent ad campaign by Apple blurs that distinction in a very attractive manner, transforming the concourse level into an art gallery for striking photographs taken on an iPhone 6.
To view additional photos in the Apple online photo gallery, please visit apple.com/iphone/world-gallery/.
To learn how your firm can advertise at Dilworth Park, please contact Jon Roche, Titan Vice President/General Manager, at 215.827.8685 or Jon.Roche@titan360.com.
Get in Shape at Dilworth Park
On Tuesdays, Wednesdays and Thursdays through April 30, Dilworth Park is hosting a variety of sports and fitness programs, from bocce to Boot Camp to Zumba, at locations throughout the park. Dilworth Park’s Spring Training programs are mostly free to the public, conducted by experts in the field of personal fitness, and presented by Rothman Institute.
For more information, please visit ccdparks.org/dilworth-park.
Changes to Business Income and Receipts Tax
Starting with Tax Year 2014, businesses in Philadelphia will receive a tax break on their Business Income and Receipts Tax (BIRT). The new tax break exempts the first $50,000 earned by a business and the net income associated with it. The exemption amount increases to $75,000 for tax year 2015; and $100,000 for Tax Year 2016 and thereafter. The “gross receipts,” or the amount of money a business has made in a year, is taxed at a rate of $1.415 per $1,000. The “net income” is taxed at a rate of 6.43% and will be reduced gradually until it reaches 6% in tax year 2023.
These changes reflect several steps that City Council has taken in recent years to carve smaller business owners out from both U&O and BIRT. The impact has been to increase the share of these taxes carried by major owners and large businesses.
In 2014, by exempting the first $177,000 in income, Council cut the number of U&O payers in half in 2014 down to 12,841 taxpayers. The exemption to the BIRT described above will by 2017 reduce the number of BIRT payers to 45,000.
By contrast, there are currently 90,000 properties that pay commercial real estate taxes, making this a much more broad- based tax.
For complete information on BIRT, please go to 1.usa.gov/1md3ITw.
GPCC Queries Candidates on Issues
As part of its Roadmap for Growth campaign, the Greater Philadelphia Chamber of Commerce (GPCC) posed five questions for the city’s mayoral candidates: Lynne Abraham; Nelson Diaz; Jim Kenney; Doug Oliver, and Anthony Hardy Williams.
The five questions are focused on creating new jobs, assisting small enterprises and sole proprietors, finding efficiencies in the city budget, the mayor’s role in schools and the formation of an educated workforce, and Philadelphia’s competitive standing compared to other cities regarding taxes, regulation and jobs.
Many of the candidates’ remarks reference research conducted by the Center City District/Central Philadelphia Development Corporation published in reports such as Pathways to Job Growth (http://bit.ly/1cBNSLv [PDF]) and How Philadelphia Gets to Work: Investing for Growth (http://bit.ly/1xd3WkJ [PDF]) and, in collaboration with the International Downtown Association, Downtown Rebirth: Documenting the Live-Work Dynamic in 21st Century U.S. Cities (definingdowntown.org).
To read the GPCC’s collected responses, please go to bit.ly/18DNyyo.
City Council Hearing on PGW
City Council on March 13 held a seven-hour hearing on Resolution #150072, passed by Council on January 29, which authorized the creation of a Special Committee on Energy Opportunities for Philadelphia and private opportunities for the Philadelphia Gas Works (PGW), The Philadelphia Inquirer reported. The hearing follows the Council’s refusal to hold hearings on the proposed $1.86 billion sale of PGW to UIL Holdings Corporation causing the deal to collapse late last year.
During the hearing, various ideas were introduced, among them: Liberty Energy Trust offered to take control of PGW's infrastructure to replace aging cast-iron gas mains for a fee; and Penn America Energy L.P., allied with former Governor Tom Ridge's firm, Ridge Global, wants to build a $2.1 billion liquefied natural gas export terminal on the Delaware River next to PGW's Port Richmond LNG plant, the article noted.
PGW Chief Executive Craig White told the committee that PGW is preparing a proposal to expand the LNG plant on its own, which could generate $20 million a year in off-system sales.
The Greater Philadelphia Chamber of Commerce offered testimony, bit.ly/1CctFKF, as did Phil Rinaldi, CEO of Philadelphia Energy Solutions, bit.ly/1MVjTxH.
To read Resolution #150072, please go to bit.ly/1CDbtKh.
To read The Philadelphia Inquirer article, please go to bit.ly/18TC8X7.
Goode Renews Call for PILOTs
Councilman W. Wilson Goode, Jr. on March 19 introduced Resolution #150224 that calls on the Nutter Administration to pursue PILOTs (payments in lieu of taxes) or voluntary contributions from large nonprofit institutions to address the City’s school funding crisis.
The resolution notes that Mayor Michael A. Nutter recently proposed a property tax increase to fund a $105 million request from the School
District, and local taxes are used to support essential services provided to nonprofits.
Last year, universities and academic institutions in Philadelphia released a report produced by Econsult Solutions, Inc. that detailed the significant financial contributions and services that the city’s colleges, universities and non-profit institutions contribute to the Philadelphia community.
To read the council resolution, please go to bit.ly/1Ey7co5.
To read the Econsult report, please go to bit.ly/1MVtPY7 [PDF].
UED Signs Now Targeted for Two Locations
City Councilman Mark Squilla last week removed the garage of the Hyatt at the Bellevue at Broad and Locust Streets from the list of possible places for Urban Experiential Display (UED) signs, leaving two locations for the signs, Broad and Race Streets near the Convention Center, and 12th and Arch Streets near Reading Terminal Market, The Philadelphia Inquirer reported on March 19.
Squilla’s bill, #140906, introduced on November 13, 2014, had lost the support of Councilman Kenyatta Johnson, whose district is home to the Hyatt at the Bellevue, based on the number of his constituents who were opposed to the sign. Squilla told PlanPhilly that his office had received more than 300 letters of support from residents who live in the areas surrounding the two proposed signs (bit.ly/1BEZiap).
If the bill is approved, Catalyst Outdoors, a Malvern advertising firm, would erect the two signs and a portion of the proceeds would go to both the adjacent building owners and nonprofit groups. The bill could be voted on Thursday.
To read The Philadelphia Inquirer article, please go to bit.ly/1FN1nY0.
To read Bill #140906, please go to bit.ly/1ExKfl8.
Presentation of Design Concepts for JFK Plaza/Love Park
Tomorrow, Tuesday, March 24, at 6:00 p.m., Philadelphia Parks & Recreation and the Fairmount Park Conservancy will present design concepts for the redesign of JFK Plaza/Love Park, in the Skyline Room of the Free Library of Philadelphia, 1901 Vine Street.
Doors open at 5:30 p.m. and the presentation begins at 6:00 p.m.
No registration is required.
Design on the Delaware 2015: Call for Programs
The 13th Annual Design on the Delaware will be held October 28-30 at the Pennsylvania Convention Center and the Center for Architecture, 1218 Arch Street.
The 2015 Conference Committee has issued an invitation for proposals for sessions that will be of interest to architects, landscape architects, planners, engineers, contractors and others in the building design and construction industry. Program length should be 60 or 90 minutes.
All programs must be submitted by 5:00 p.m. on Thursday, April 30, to be considered.
For more information, please go to http://bit.ly/1GyZcpp [PDF].