Office Sector News
FMC Tower Pushes Asking Rents Higher
Average asking rents for Center City office space are projected to hit a record $28.80 per square foot during the second quarter of 2016, up from $27.80 in the first quarter of this year, The Philadelphia Inquirer reported on June 17, based on a report from CBRE. The rise in asking rents is related to the high rates commanded by the remaining space in Brandywine Realty Trust’s FMC Tower at Cira Centre South, the article noted.
Asking rents for Class A office space are projected to rise to $31.01 in the second quarter, up from $29.86 in the first quarter.
To read the article, please go to bit.ly/28YtA5B.
Comcast Expanding in Denver
Comcast Corporation is expanding not only in Philadelphia but also in Denver, where it will lease 212,000 square feet (sf) of office space in a building expected to be completed in the first quarter of 2017, the Denver Business Journal reported on June 13.
Last year Comcast leased 300,000 sf to consolidate its suburban offices and add 300 jobs, as it strove to create a Comcast campus in Denver and expand its western U.S. division, the largest outside Philadelphia, an earlier article reported. Given the multiple number of technology firms in Denver, the city already has a strong tech labor pool making it easier to attract talent.
To read about Comcast’s newest lease, please go to bit.ly/28SNNtN. To read about last year’s consolidation, please go to bit.ly/28TGQI9.
30th Street Station District Plan Finalized
Amtrak, Brandywine Realty Trust, Drexel University, PennDOT and SEPTA on June 16 released the final 35-year, $6.5 billion Philadelphia 30th Street Station District Plan that includes 40 new acres of open space and 18 million square feet of new development, including a new mixed-use neighborhood anchoring the district atop 88 acres of rail yards along the western bank of the Schuylkill River.
The plan proposes a $2 billion investment in roads, utilities, parks, bridges, and extension of transit services and $4.5 billion in private investment, in addition to the $3.5 billion for Drexel’s Schuylkill Yards project being developed by Brandywine Realty Trust.
One of the shorter-term projects is the Station Plaza concept, which calls for development of a new public space on the west side of 30th Street Station in the former Bulletin Building parking lot.
To read the press release, please go to bit.ly/23eKkIr.
Record Visits to Philadelphia in 2015
Greater Philadelphia welcomed a record 41 million domestic visitors in 2015, up 3.1% from 2014, with 36.2 million (88%) arriving for leisure purposes, Visit Philly announced on June 15, noting that 2015 was the sixth straight year for record visitation.
The 2015 visitors spent $6.7 billion, with the majority of it going toward food, beverage and lodging, and supported 93,340 jobs.
Of the 3.1 million hotel room nights occupied in Center City, 32% were leisure stays. To read the report, please go to bit.ly/1XXOZ2u.
Ritz-Carlton Renovation Complete
The Ritz-Carlton Philadelphia on June 23 celebrated its grand reopening after a $25 million renovation of the hotel guest rooms, meeting spaces, lobby and public spaces, the Philadelphia Business Journal reported. The hotel lobby has a new, 206-seat restaurant, Aqimero, by Chef Richard Sandoval, which has a wood-burning grill and features seafood, steaks, ribs and poultry.
MJ Settelen Construction was the general contractor for the project. To read the article and see photos of the updated hotel, please go to bit.ly/28Qay0p.
Residential Market News
City House Prices Rising Faster than Prices in the Suburbs
The typical Philadelphia home increased in value by 3.9%, while the average suburban home fell in value by 1.3% during the first quarter of 2016, according to Kevin C. Gillen, Senior Research Fellow with the Lindy Institute for Urban Innovation at Drexel University, in a new report, Philadelphia Regional Housing Report: Q1 2016, released on June 17.
Since prices hit bottom in the first quarter of 2012, they have risen 23% in Philadelphia County compared to just an average of 4% in the surrounding suburbs, bringing city prices 1% above their 2007 pre-recession peak. Suburban prices need to rise another 21% before they can erase their losses, a reversal of a decades-long trend that saw suburban house prices consistently outpacing city house prices.
To read the report, please go to bit.ly/1V82QRb.
Eds and Meds News
Drexel Breaks Ground on Expanded Korman Center
Drexel University on June 14 announced it was breaking ground on the expansion of its Korman Center, a popular gathering place for students at 15 South 33rd Street, built in 1958.
The expansion, designed by Gluckman Tang Architects, was made possible by an $8 million gift from the Hyman Korman Family Foundation, matched by $8 million from the University. A campus green space to be named the Korman Quadrangle was designed by Andropogon Associates.
For more details on the project and to see renderings, please go to bit.ly/1UO8KF9.
Report: Science Center Is Strong Economic Driver
A new study suggests that the University City Science Center contributed nearly $13 billion in economic activity in the region in 2015, up from $9 billion in 2009, the Philadelphia Business Journal reported on June 15.
The report, The University City Science Center: An Economic Catalyst for Greater Philadelphia, was produced by the Science Center, the Economy League of Greater Philadelphia and Econsult Solutions, Inc.
To read the article, please go to bit.ly/263FeAK. To read the report, please go to bit.ly/1Xq6mYQ [PDF].
Arts and Culture News
American Revolution Museum to Open in Spring 2017
The Museum of the American Revolution announced it will open on April 19, 2017, and that Board Chairman H.F. "Gerry" Lenfest had made a $10 million challenge grant, bringing his total gift to the museum to $50 million, the Philadelphia Business Journal reported on June 16.
Located at Third and Chestnut Streets, the museum will feature galleries, theaters and re-created environments to bring the events of the Revolutionary War to life. Robert A.M. Stern Architects is the designer.
To read the article, please go to bit.ly/1YuAx0t.
Parks and Open Space News
Dilworth Park Honored with ULI Award
Dilworth Park was awarded a Willard G. “Bill” Rouse III Award for Excellence at ULI Philadelphia’s 3rd Annual Awards on June 15.
The 15-member jury cited the park’s creativity, emphasis on physical activities, sustainability, high visitor volume, great social equity, and feeling of excitement, noting that, “by engaging the community through 60 public meetings, this project reflects a ‘cosmopolitan canopy’ where people from different backgrounds can join together.”
Among the other seven winners was evo Philly, a student residential tower that is part of Cira Centre South and was developed by Brandywine Realty Trust.
To a see a list of all the winners and finalists, please go to on.uli.org/2663vGa.
New Executive Director for Fairmount Park Conservancy
Rick Magder, founding Executive Director of Groundwork Hudson Valley and the Executive Director of Groundwork USA, both based in Yonkers, N.Y., and focused on urban open space, waterways, and community renewal, has been named Executive Director of the Fairmount Park Conservancy, replacing Kathryn Ott Lovell, who was appointed Commissioner of Philadelphia Parks & Recreation earlier this year, the Conservancy’s Board of Directors announced on June 21. Magder will begin his new job on September 1.
To read the Conservancy’s press release, please go to bit.ly/28NhEmw [PDF].
Slight Dip in Revenue at SugarHouse Casino
Revenue in May fell by 4.0% over the previous month at SugarHouse Casino on the Delaware River, according to the Pennsylvania Gaming Control Board.
In May, the casino took in $25,244,569, compared to $26,299,933 in April. The Commonwealth’s share of taxes was $6,630,070, compared to $6,826,331 in April. The City of Philadelphia collected $828,687, compared to April’s $856,949.
To see all casino revenues, please go to bit.ly/1I0aqlt.
Static Manufacturing Activity, Modest Growth in Service Industry
Business activity in the manufacturing economy suggested little growth in June, according to firms responding to the month's Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia, with new orders up for 20.6% of the respondents, down for 23.6%, and unchanged for 54.7%.
The number of full-time employees was up for 8.7% of the firms, down for 19.6%, and remained the same for 71.6%. Looking ahead six months, 46.2% of the firms anticipated improved business activity, while 16.4% expected a downturn and 31.7% foresaw no change.
To read the report, please go to bit.ly/1QbRXNN.
The pace of growth for the regional service economy was slightly stronger than manufacturing’s, according to firms responding to the Bank’s June Nonmanufacturing Business Outlook Survey, with new orders up for 29.8%, down for 20.4%, and unchanged for 28.9%.
The number of full-time employees rose for 28.9%, fell for 10.6% and remained the same for 60.5%. Looking ahead six months, 42.2% expected improved conditions, 15.4% declining conditions, and 15.4% replied no change was anticipated.
To read the report, please go to bit.ly/28R4pjb.
Analyzing the Economic Success of Minnesota’s Twin Cities
The Philadelphia Business Journal takes a look at the success of Minnesota’s Twin Cities, Minneapolis-St. Paul, in attracting the corporate headquarters of 16 Fortune 500 companies, compared to 12 in Greater Philadelphia, which has twice the population.
Among the Twin Cities’ advantages are a diversified regional economy, diverse and skilled workforce, and the absence of local wage and corporate income taxes, the analysis noted.
The economic success has increased the population of the Twin Cities by about 6% over the last five years, compared to Philadelphia’s 1.6% growth during the same period, well below the national rate of 3.9%.
To read the article, please go to bit.ly/28MjGWx (requires subscription).
Walt Whitman Bridge Closings This Week
The Walt Whitman Bridge will close to traffic for 20 minute intervals between 10:00 p.m. and 5:00 a.m. tonight, Monday, June 27, through Thursday, June 30, to install a temporary roadway shield to protect vehicles from overhead work during the bridge's $56 million painting project, the Delaware River Port Authority (DRPA) advised on Friday.
At 9:00 p.m. on closure nights, bridge traffic will be reduced to two lanes in each direction, and at 10:00 p.m., the first 20-minute closure will occur. In between each closure, the bridge will reopen for 10 minutes. In case of inclement weather, the closures will be postponed. Motorists are advised to use the Ben Franklin Bridge or Commodore Barry Bridge.
For additional information, please go to bit.ly/28U9MSZ.
I-676 Detours for Bridge Construction
I-676 will be closed and detoured in both directions between the I-76 and Broad Street (Route 611) interchanges today, Monday, June 27, through Thursday, June 30, from 11:00 p.m. to 5:00 a.m. the following morning for overhead bridge construction, PennDOT announced on Thursday.
The overnight operation is part of the four-year, $64.8 million project to replace seven structurally deficient bridges over I-676 between 22nd and 18th Streets, and to make landscaping and streetscape improvements above the expressway. Construction began in April 2015 and will finish in fall 2019.
For more information on the I-676 project, please go to bridgesover676.com. For detours and other information, please go to 511PA.com.
SEPTA to Shut Down Trolley Tunnel for Nine Days in July
SEPTA will close down the Center City trolley tunnel for repairs from 10 p.m. on Friday, July 8, until 4:00 a.m. on Monday, July 18, Philadelphia magazine reported on June 22.
Service on trolley routes 10, 11, 13, 34 and 36 will begin and end at 40th and Market, where riders can transfer to the Market-Frankford Line to reach Center City.
Workers will remove and replace 1,500 feet of wood protection board and track on the westbound side of the tunnel between 19th and 22nd Streets, as well as clean stations, repair tile, and test emergency generators and lighting.
To read the article, please go to bit.ly/28Q3NM5. To read SEPTA’s announcement, please go to bit.ly/28R6ITM.
I-95 Restrictions During the DNC
Commercial vehicles weighing more than five tons, motor homes, and recreational trailers for personal use will be prohibited from traveling between Exits 13 and 22 on I-95 from Saturday, July 23, at noon through midday Friday, July 29, Philadelphia magazine reported on June 23. Also the I-95 exit ramps at Broad Street will be closed during the week of the Democratic National Convention taking place July 25-28.
To read the article, please go to bit.ly/28WHK91.
$33 Million in Savings for SEPTA
SEPTA’s expenses for the fiscal year ending June 30 were $33 million less than anticipated, due to dramatically reduced lawsuit payments and a relatively mild winter, PlanPhilly reported on June 22.
The installation of surveillance cameras and a recently launched body camera program for SEPTA police officers has helped the authority refute bogus injury claims, leading to more dropped lawsuits and fewer settlements, the article noted.
SEPTA will transfer the $33 million to its service stabilization fund, used for unexpected costs, bringing the fund’s total to $82 million.
To read the article, please go to bit.ly/292hkj9.
PA House Committee Unanimously Approves HB 1871
The Pennsylvania House Finance Committee on June 14 unanimously approved HB 1871 sponsored by Representative John Taylor (R., Philadelphia) and State Representative William Keller (D., Philadelphia), that would amend the state Constitution to create an ability for Philadelphia to modify the Uniformity Clause for real estate taxes to enable, but not require, Philadelphia to levy a 15% increment on properties used for business purposes so long as those revenues are used exclusively to reduce wage and business taxes.
The bill was approved by the full House on Thursday, June 23, with one technical amendment, requiring a second and final vote, today, June 27. If that occurs, the bill can move immediately to the Senate for a vote before the General Assembly’s summer recess, scheduled to begin on July 1.
A broad coalition of business, labor and civic groups, along with the Tax Commissions of both 2003 and 2009, have concluded that in order to grow the number of jobs in Philadelphia, the city must reduce wage and business taxes and shift to greater reliance on the real estate tax for businesses, Representative Taylor’s press release noted.
To read Representative Taylor’s press release, please go to bit.ly/1YsuYQ2. To read testimony presented by members of the Philadelphia Growth Coalition at the June 2nd Finance Committee hearing, please go to bit.ly/1YsuKIO.
To read an explanation of how the amendment will work for Philadelphia, please go to bit.ly/290YHhr [PDF]. To read Econsult’s evaluation of the economic impact of the plan, please go to bit.ly/28Zhhbk [PDF].
City Council Passes Variety of Tax Bills, Adjourns
City Council, on June 16, its last full session before summer recess, considered more than 100 bills, and approved most, including Bill #160171, the Capital Budget (bit.ly/28ZBZTG), and Bill #160172, the Operating Budget (bit.ly/1skX04f), as reported in The Philadelphia Inquirer, bit.ly/28PheJe. Other tax bills passed included Bill #160173 (bit.ly/28PpuIS), authorization of the Realty Use and Occupancy Tax, and Bill #160174 (bit.ly/28Or4Na), authorizing the real estate tax. Bill #160175 (bit.ly/24QCCoY) reduced the Wage and Net Profits Tax.
Bill #160176 (bit.ly/1WvR4Bn), the “soda tax” bill that imposes a 1.5 cents an ounce tax on all sugary or artificially sweetened drinks sold by distributors, drew national attention to Philadelphia as the first major city in the U.S. to pass such a tax, noted by The Philadelphia Inquirer, bit.ly/28PoGUF, and the New York Times, nyti.ms/28SMmww. Related legislation, Bill #160552 (bit.ly/28RDWGr), initiated a credit of up to $2,000 toward Business Income and Receipts Tax liability for the sale of healthy beverages.
Additionally, Resolution #160622 (bit.ly/28PMeNA) authorizes action to establish the Headquarter Hotel Neighborhood Improvement District (NID) at the northeast corner of 15th and Chestnut Streets, where Chestlen Development is building a W Hotel and Element by Westin. The purpose of the NID is to create a guaranteed mechanism for the development's tax increment financing plan.
City Council will return from summer recess on Thursday, September 8.
State House Passes Pension Reform, Senate Rejects It
The Pennsylvania House on June 14 passed SB 1071, bit.ly/28PLsM5, intended to redesign benefits for future public employees. The bill created a stacked-hybrid plan, similar to the current defined benefit pension offered to state employees, up to a salary limit of $50,000, with a 401k-type defined contribution layered on top for all income earned after 25 years of service. On June 23, however, the state Senate rejected the pension proposal, bit.ly/28Wes8y, The Philadelphia Inquirer reported.
Tomorrow! CPDC Membership Meeting: Transit and Downtown Competitiveness
Tomorrow, Tuesday, June 28, at 4:00 p.m., the Central Philadelphia Development Corporation will hold its Membership Meeting in the Meade Room at the Union League, 140 South Broad Street. (The date was changed from June 21.)
The CPDC will release a new report, Getting to Work, highlighting the residential and commuting patterns of downtown workers and the transit system that brings 290,000 riders into Center City every weekday. An increasing number of employers want to be at the center of the region and close to the highly educated workforce that now lives downtown. At the same time, 23% of the working residents of every Philadelphia neighborhood outside of Greater Center City are commuting to work downtown. But who is reverse commuting and why?
Speakers will be Paul R. Levy, Executive Director, CPDC, offering highlights from the transportation report; Lori F. Reiner, Partner-in-Charge, Philadelphia Office, EisnerAmper on why EisnerAmper opened an office in Center City; and Jeffrey D. Knueppel, General Manager, SEPTA, with an update on upgrades and improvements planned for the regional transit system.
Business casual attire required. No denim.
CPDC members are encouraged to invite both young professionals and other members of their firms to attend this meeting.