Philadelphia Tax Policy Changes
A significant number of bills of wide-ranging impact, prompted by the impact of the Actual Value Initiative (AVI), are under discussion in City Council in the coming month.
Public Hearing on U&O Tax
City Council's Committee on Finance will hold a public hearing on Friday, May 17, at 9:30 a.m., in Room 400, City Hall, to hear testimony on Bill #130161, introduced on March 7 by Councilwoman Maria D. Quiñones Sánchez.
The Nutter Administration has proposed a post-AVI Use and Occupancy (U&0) tax rate of 0.92%, which they suggest is revenue neutral. Bill #130161 proposes a combined rate of 1.77%, effectively doubling U&0, following last year's 19% increase. The bill proposes to allocate 1.32% to the School District of Philadelphia and .44% to the City.
With the goal of buffering small businesses, the bill includes an exemption of the first $125,000 of assessed value, which protects many retailers in three-story buildings on neighborhood commercial corridors in moderate-income and working-class neighborhoods. But the impact is very different for large office tenants, small office tenants, and ground-floor retailers throughout Center City where assessed values range from $5 million to several hundred million. The credit of $125,000 per building, is to be divided by the number of tenants in a building, not on a square-foot basis.
To read the bill, please go to bit.ly/15OMe5h.
Ten-Year Tax Abatement Reconsideration
The impact of AVI on the neighborhoods that surround Center City has fueled some resentment against the 10-year tax abatement. A bill introduced last fall by Councilman Wilson Goode, Jr., may come up for a vote in Council in the coming weeks. Goode's bill proposes to reduce the abatement to five years and cut the amount of the abatement over the course of those five years: a 100% abatement would be taken in the first year and then reduced by 20% each of the remaining four years. To read the bill, please go to bit.ly/12p3EnY.
See a subsequent summary of a recent study on the impact of the abatement below.
Public Hearing on Taxing Businesses of Nonprofits
City Council's Finance Committee will hold a public hearing on Thursday, May 23, for Bill #130009.
Introduced on January 24 by Councilman Bill Green, the bill would allow the City to collect the Business Income and Receipts Tax from the for-profit activities of nonprofit organizations. The bill references income from activities that are not directly connected to the organization's religious, charitable, or education purposes. To read the bill, please go to bit.ly/WmVDwr [PDF].
City Council Passes Two AVI-Related Bills
Bill #130306, introduced on April 18 by Councilman Curtis Jones, Jr., on behalf of Council President Darrell L. Clarke, would change the date to apply for the homestead exemption from July 31 to September 13 (amended from September 30) to encourage more property owners to apply. The bill notes that those who have failed to apply are from areas of high concentrations of low-income, elderly, and non-English speaking residents. To read the bill, please go to bit.ly/17RONVl.
Bill #130298, introduced on April 18 by Councilwoman Jannie L. Blackwell, would provide an extension to apply for the homestead exemption for buyers who purchase a home after the annual deadline for application has passed. To read the bill, please go to bit.ly/199c9Ew.
Study Analyzes Value of 10-Year Tax Abatement
At $128 per foot, the cost of residential construction in Philadelphia is 25% higher than the national average and makes Philadelphia's building costs the fourth highest of the large cities in the United States, according to a study of the 10-year tax abatement conducted by Kevin Gillen, Senior Research Consultant with the Fels Institute of Government at the University of Pennsylvania. At the same time, Philadelphia's median household income is 34% below that of other high-cost cities, and 26% below the U.S. average.
The study, commissioned by the Building Industry Association and the Greater Philadelphia Association of Realtors, noted that when the abatement was implemented, it catalyzed a 263% surge in new construction in Philadelphia County.
From 2002-2004, new construction increased 417% in Philadelphia County, while only growing 1.2% in Philadelphia's suburbs.
Under the Actual Value Initiative (AVI), previously abated properties will immediately begin contributing an additional $10.5 million per year to property tax revenue collections, and within five years after implementation of AVI, other properties coming off of abatement will be contributing an additional $70 million in property tax revenues.
Without the existence of the abatement and the real estate development it has encouraged, the millage rate under AVI would need to be 1.44% instead of 1.32% to capture the same amount of tax revenues, the report suggested.
To read the report, please go to bit.ly/YswfrM [PDF].
1616 Walnut Repositioned as Residential
The Center City office building 1616 Walnut Street has been renamed Icon, in anticipation of its transformation from office to apartment building, the Philadelphia Business Journal reported on May 7.
The partnership that owns the building, Federal Capital Partners of Chevy Chase, Maryland; and Cross Properties and Alterra Property Group, both of Philadelphia; have begun construction on 206 apartments in the 25-story, 279,770-square-foot building. The conversion will also include 23,000 square feet of retail space and 150 parking spaces.
The partnership is also restoring the building's façade. The building was constructed in 1929 and is on the National Register of Historic Places. The first apartments will be move-in ready early next year.
Edgewater II Wins Approval
The Civic Design Review Committee of the Philadelphia City Planning Commission (PCPC), on May 7 unanimously recommended approval of Edgewater II, the second phase of the Edgewater apartment complex at 23rd and Race Streets, PlanPhilly reported.
The new phase includes construction of a 22-story, 240-unit building that is 263 feet tall, in excess of the 125-foot height limit imposed by the Benjamin Franklin Parkway Area overlay controls of the zoning code. Both the PCPC and Logan Square Neighborhood Association supported the project and the height variance.
The building will have green roofs as well as rain gardens in an inner courtyard area, and parking will be provided in an existing parking garage built in the first phase. The project is being developed by Realen Properties of Berwyn. The 295,073 square-foot building is being designed by Kyle Litzke of the Design Collective of Baltimore.
A construction start date has not been announced. To view the renderings, please go to 1.usa.gov/13k2F9G [PDF].
City Home Prices Remain Steady
In the first quarter of 2013, the average home sale price in Philadelphia increased by 0.9%, according to the latest data from the City's Recorder of Deeds, analyzed by Kevin Gillen, Senior Research Consultant at Penn's Fels Institute of Government.
House prices in Center City/Fairmount were down slightly (2.2%) and up significantly in University City (16.5%).
Market activity was skewed toward high-end properties, attributed to tighter credit and a sluggish economy discouraging younger and lower-income buyers from entering the market. There were 13 sales of $1 million and higher homes, almost double the seven such sales in the same quarter last year, and the highest volume since 2008.
Inventories fell to 7,000 homes, down from their peak of over 12,000 in 2007 and close to their lowest level since 2005.
To read the report, please go to bit.ly/105Zi6p.
PREIT Public Offering
Pennsylvania Real Estate Investment Trust (PREIT) announced on May 1 that it planned to raise approximately $200 million through a public offering of 10 million common shares at $20 per share. The joint managers announced were Wells Fargo Securities, BofA Merrill Lynch, Citigroup and J.P. Morgan. PREIT granted the underwriters a 30-day option to purchase up to an additional 1.5 million common shares. The offering was expected to close on May 6.
The money will be used to repay debt and be used for other development purposes.
PREIT recently closed on a $59.6 million purchase from Vornado Realty Trust of 907 Market Street, enabling them to consolidate ownership of the three-block-long Gallery regional shopping center at Market East.
To read an article about the announcement, please go to aol.it/ZCy0DN.
Top Cities for Young Professionals
The career site CareerBliss.com ranked Philadelphia seventh in its top 10 list of happiest cities for young professionals, based on an analysis of more than 45,000 employee-generated reviews between 2012 and 2013.
Factors included in the rating system were work-life balance, relationship with the employer and co-workers, work environment, job resources, compensation, growth opportunities, company culture, company reputation, daily tasks, and job autonomy.
San Jose, California, ranked first. Washington, D.C. (3rd) and Boston (10th) were the only other East Coast cities on the list.
In the State of Center City, 2013, the Center City District reported that 28.7% of Center City's population is between 25 and 34 years old, which is twice the national average and significantly more than Philadelphia's average of 16.1%.
To see the complete list of top 10 cities, please go to tinyurl.com/ache5h4.
Philadelphia Vital Statistics
For a snapshot of Philadelphia's static employment situation as well as other trend data please see this month's Vital Statistics, compiled by CCD/CPDC staff: centercityphila.org/docs/CCRVitalStats0513.pdf
Record Number of Visitors to Philadelphia
A record 38.8 million visitors visited the Philadelphia region last year, according to the Greater Philadelphia Tourism Marketing Corporation's (GPTMC) annual report for 2013, The Evolution of a Destination and Its Marketing, released on May 9. The previous record was set in 2011, when there were 38 million visitors.
The report also noted that Philadelphia was ranked fourth on Lonely Planet's "Top 10 U.S. Travel Destinations for 2013" and that on Saturday nights, downtown hotel occupancy was 85%.
To read the report, please go to bit.ly/194p0rw [PDF].
Report Supports Need for SEPTA Funding
SEPTA supports nearly 26,000 jobs, contributes $3.21 billion in economic output, and generates $62.5 million in state tax revenues, according to a report released on May 3, commissioned by SEPTA and developed by the Economy League of Greater Philadelphia and Econsult Solutions, Inc.
Among the report's findings: while SEPTA's capital funding is at a 15-year low, ridership is at a 23-year high; SEPTA carries 77% of transit riders in the state and receives 62% of state transit funding; and SEPTA's 2013 capital budget of $304 million is significantly smaller than those of its peer group, for example Boston's, whose MBTA 2013 capital budget exceeds $800 million.
Without an infusion of capital funding, SEPTA will not be able to provide current levels of service, which could cost the region nearly 25,000 jobs, $96 million in tax revenue, and $8 billion in property value, the report noted.
To read the 64-page report, Understanding Septa's Statewide Economic Value, please go to http://bit.ly/17McuhL [PDF].
Qatar Airways Will Add Service to PHL
Qatar Airways is scheduled to begin nonstop service from Philadelphia International Airport (PHL) to Doha, the capital of the State of Qatar in the Southern Arabian Gulf, in March 2014, Mayor Nutter announced on May 6. Boeing 777 aircraft will serve the route.
Qatar Airways will be the fourth non-U.S. airline to serve PHL, and has service to more than 120 cities in Europe, the Middle East, Africa, Asia and North and South America.
To read the press release, please go to bit.ly/YsMRzK.
Grant Will Fund Contest for Bike-Rack Design
Philadelphia's Office of Arts, Culture and the Creative Economy in partnership with the Bicycle Coalition of Greater Philadelphia will launch an open competition inviting artists and designers to create unique and creative bike racks for Philadelphia. The project is made possible by a $50,000 grant from the John S. and James L. Knight Foundation, as part of its Knight Arts Challenge, the City announced on May 1. Of the country's 10 largest cities, Philadelphia has the most bicycle commuters per capita, the announcement noted.
Potential designs will be judged by an independent selection panel. Details of the contest have not been announced. For more information, please go to creativephl.org or call 215.686.4596.
Arts and Culture News
New Website Maps Arts Data
Mayor Nutter on April 30 launched a new website, cultureblocks.com, a free online tool that maps cultural activity throughout the city, drawing information from more than 50 databases into a single interactive map. The information can be organized geographically by neighborhood, council district, or school catchment. The data-mapping website is not designed for consumers, but rather for business, policy, and place-making organizations.
The first of its kind in the country, CultureBlocks was created by the City's Office of Arts, Culture, and the Creative Economy, which will manage the website, and is a public-private partnership of that office, the Department of Commerce, The Reinvestment Fund's (TRF) Policy Map, and the Social Impact of the Arts Project (SAIP) at the University of Pennsylvania. It is supported by grants from the National Endowment for the Arts and ArtPlace.
To read the Mayor's press release, please go to bit.ly/Ybssz4.
New Leader of Constitution Center
The National Constitution Center (NCC) Board of Trustees announced on May 6 that it had appointed prominent Constitutional scholar and law professor Jeffrey Rosen to serve as president and chief executive officer of NCC.
Rosen succeeds David Eisner, who stepped down from the position in October 2012. The Center's chairman is Jeb Bush.
Rosen is a professor at George Washington University Law School, where he has taught since 1997, and is the legal affairs editor of The New Republic. He received the 2012 Golden Pen Award from the Legal Writing Institute for his "extraordinary contribution to the cause of better legal writing."
To read the release, please go to bit.ly/10nDVZO.
Other Government News
City's Tax Revenues Up
City of Philadelphia tax revenues for March totaled $299.6 million, an 11% increase over March 2012, according to the Office of the City Controller's March Financial Forecast & Snapshot.
Wage, earnings, and net profit tax collections for the month were $128.8 million, a 4% percent increase compared to the same month last year. So far in Fiscal Year 2013, collections have totaled almost $1.2 billion, a 4% increase over the prior year.
Monthly sales tax collections totaled $19.3 million, a less than 1.0% decrease from March 2012's total. Total collections for the year thus far have been $192 million, a 3% increase over the prior year.
To read the report, please go to bit.ly/12nNyIk [PDF].
Council Votes to Sell Ads on City Property
City Council Bill #130109, which would amend the zoning code to allow for advertising on municipal properties such as city-owned buildings, trash trucks and other city vehicles, to generate revenue for the city, on April 25 passed City Council by a vote of 15-0.
The bill was introduced on February 14 by Councilman Bobby Henon, on behalf of Council President Darrell L. Clarke. A consulting firm hired by City Council estimated the advertising could bring the city $10 million annually. To read the bill, please go to bit.ly/YbC4Fk.
CPDC Elects New President
The Central Philadelphia Development Corporation (CPDC) has elected Urban Engineers' CEO, Edward M. D'Alba, PE, to serve as the organization's President.
D'Alba has been an active member of CPDC since 1990, serving on the board as vice president and chair of the organization's transportation committee.
New Book on Ed Bacon
On Thursday, May 16, from 6:00 p.m. to 7:30 p.m., the Philadelphia Center for Architecture, 1218 Arch Street, will present author Gregory Heller and his new book Ed Bacon: Planning, Politics, and the Building of Modern Philadelphia (2013).
Heller will share highlights from the biography of world-renowned city planner Ed Bacon (1910-2005), one of Philadelphia's most controversial public figures and a giant force who shaped much of the Philadelphia we know today. This book will be available for sale, and the author will be signing books.
Registration is required. Please go to hellergreg.ticketleap.com/edbacon/.
The Role of Horticulture in Vibrant Cities
On Friday, May 17, from 9:00 a.m. to 5:00 p.m., the Pennsylvania Horticultural Society and the Cultural Landscape Foundation will present "Civic Horticulture," a conference featuring national and international experts who will trace the evolution of horticulture's role in creating healthy, vibrant cities.
Setting the stage will be Drew Becher, Charles Birnbaum, and David B. Brownlee.
Moderators will be: Eric Kramer; James F. Lima; and Harris M. Steinberg. Speakers will be Elena Brescia; Raymond Jungles; Mia Lehrer; Keith McPeters; Matthew Urbanski; Susan K. Weiler; Henry M. White, III; Peter Wirtz; and Thomas Woltz.
The conference will be held at the University of the Arts, Elaine C. Levitt Auditorium at Gershman Hall, 401 South Broad Street.
For more information or to make reservations, please go to bit.ly/WVEFDH.
Also, you can celebrate the opening of the conference and get the first look at the 2013 PHS Pop Up Garden on Thursday, May 16, from 6:00 p.m. to 8:00 p.m. at a cocktail reception with the landscape architects, historians, architects, and horticulturists who will participate in the conference. The reception will take place at 313 South Broad Street, site of the 2013 PHS Pop Up Garden. Cost is $50. To register, please contact Suzanne Garza at Suzanne@tclf.org.
Hidden City Festival
Hidden City Festival 2013 takes place May 23 through June 30 at nine locations throughout the city.
The festival will showcase art in 10 selected projects ranging from participatory social experiments to massive sculptural installations to experimental music performances and will present them in nine locations, including the vacant Germantown Town Hall; Shivtei Yeshuron, a 19th century row-house synagogue in South Philadelphia; and the Kelly Natatorium in Fairmount Park.
All sites will be open Thursday to Sunday from Noon to 7:00 p.m. during the weeks of the festival.
Ticket prices range from $15 for a one-day pass to $70 for an all-festival pass. For tickets and information, please go to festival.hiddencityphila.org.
Center City District Sips Returns in June
Center City District Sips begins June 5 and continues every Wednesday from 5 to 7 p.m. through August 28, at 89 bars and restaurants in Center City.
A kickoff party will be hosted by Pagano's Market and Bar, 2001 Market Street. This year the bargain prices return with $5 cocktails, $4 wines, $3 beers and half-price appetizers. At the kickoff party, you also can try cocktail samples from DonQ, this year's sponsor of Center City District Sips, and enjoy live music from 61 North, all while taking in the beautiful outdoor courtyard at Commerce Square.
Follow @CCDSips on Twitter for updates and all the latest news. Bars, specials, maps – all the details you need for you and your friends is easy to find on your mobile device at m.centercityphila.org. Or you can go to centercityphila.org/life/Sips.php.