Pearl Properties Consolidates Ownership
Pearl Properties has bought floors three through 12 at 1401 Walnut Street for $15 million, consolidating their ownership in the building, the Philadelphia Business Journal reported on July 8. The 76,596-square-foot space sits above strong ground-floor retail oriented towards Broad Street with 36 apartments on eight floors plus two floors that are vacant office space, which can be converted into residential. Kimco Realty Corporation of New Hyde Park, N.Y., was the seller. CBRE Inc. arranged the sale.
Additional Signs of Revival on East Chestnut Street
Brickstone Realty Corporation has purchased 1122-28 Chestnut Street for $8 million, the Philadelphia Business Journal reported on July 9. The three adjacent buildings total 135,000 square feet. Jones Lang LaSalle arranged the transaction. The article noted that the properties had been the site for a proposed 21-story tower and hotel, but the recession put an end to the plan. Brickstone is considering residential development above ground-floor retail.
Also, the former Beneficial Savings Bank building, a 24,000-square-foot structure at 1200-1202 Chestnut Street was bought by local attorney Thomas R. Kline for $4 million, the same article reported.
To read the article, please go to bit.ly/15ee8Xg.
Three Groups Vie for Family Court Building Development
Three groups of developers have responded to the City's request for proposals presenting plans for converting the Family Court building at 18th and Vine Streets into a luxury hotel, The Philadelphia Inquirer reported on July 13. Each group is aligned with a hotel operator. They are:
Fairmont Hotels & Resorts, teaming up with Logan Square Holdings, a limited partnership that includes the Goldenberg Group; Starwood Hotels & Resorts, working with Dranoff Properties and HRI Properties of New Orleans; and Kimpton Hotels, aligned with P&A Associates and the Peebles Corporation of New York City.
The City owns the property and will appoint a committee of officials from its planning, commerce, public property, and historic preservation departments to select a development plan for this building that faces Logan Square, just north of the restored Sister Cities Park. The Philadelphia Industrial Development Corporation (PIDC) is managing the sale. The City would like to have an agreement by year's end.
To read The Philadelphia Inquirer article, please go to bit.ly/1aoz0OO.
Three Development Proposals Presented to Civic Association
Three development proposals for the Logan Square area were presented to the Logan Square Neighborhood Association on July 16.
Museum Towers II, proposed by Forest City, would be constructed at 18th and Hamilton Streets, and would border on Baldwin Park, just north of the Family Court site.
The project would be similar to the existing Museum Towers and would be a 16-story apartment high rise with 270 units and 16 two-story townhomes, constructed around a four-story, above-ground parking garage that is to be hidden from the streetscape by the townhomes. No retail space was proposed.
An apartment development at 2100 Hamilton Street in back of the Rodin Museum is in the early stages of planning by Cross Properties. The project would be an 11-story building with 250 apartments, 75 below-grade parking spaces, and 17,000 square feet of retail.
A third proposal was made by Hanover Properties and the Parkway Corporation for Broad and Callowhill Streets, which would locate two buildings across the street from each other on the southeast and southwest sides of the intersection. The plan includes 339 high-end apartments with 17,000 square feet of retail on Parkway's existing surface lots. Parking would be underground with 0.6 spaces per apartment, plus additional public parking. These apartments would be just south of the former Philadelphia Inquirer building, which Bart Blatstein has purchased and has proposed to develop as Philadelphia's second casino, and one block west of the proposed Reading Viaduct park.
Office Sector News
Law Firms Growth Sluggish
Law offices are seeing limited to no growth in employment and are reducing the size of their extensive libraries as they move to digital storage, suggesting the need for less office space in the future, according to Law Firm Employment and Space Trends, a national report by Studley Insights, released this month.
The report looks at top law firms in four major cities – New York City, Chicago, Washington, D.C. and Philadelphia – and notes that since 2005 only six offices have grown by more than 20 attorneys and seven have been reduced by more than 20 attorneys.
In Philadelphia, Morgan Lewis & Brockius LLP had 14 more lawyers in 2012 than it did in 2005, and Cozen O'Connor had three more. Dechert, Duane Morris and Drinker Biddle all saw reductions, with Dechert down by 112 by 2012.
The amount of office space occupied by the top five law firms in Philadelphia has increased just slightly from 2005 to 2012, though Drinker Biddle contracted for downsized space in Washington, D.C. for 2013. The report suggests, however, that downsizing should be anticipated for the future.
To read the report, please go to bit.ly/13nhkkX [PDF].
Eds & Meds News
CHOP Named Best in U.S.
U.S. News & World Report has named Children's Hospital of Philadelphia (CHOP) the number-one children's hospital in the country in its 2013-14 rankings of the nation's best hospitals.
The survey looked at 10 specialties. CHOP was the highest rated for pulmonology and urology. It came in second or third place in seven of the 10 specialties including cancer, cardiology, and neurology. U.S. News surveyed 179 pediatric centers. Three other East Coast cities made the top 10. Boston Children's Hospital was ranked second, Johns Hopkins Children's Center in Baltimore was ninth, and Children's Hospital of Pittsburgh of UPMC was tenth.
To read the article, please go to bit.ly/14Rrp6w.
Leader of Jefferson Health System to Step Down
Joseph T. Sebastianelli, chief executive officer of Jefferson Health System, will leave his post at the end of the year after 11 years at the helm, The Philadelphia Inquirer reported.
The health system is the largest in Southeastern Pennsylvania and, during Sebastianelli's tenure, total annual revenue more than doubled to $3.1 billion, the article noted.
The system recently was named one of the top-five health systems in the country by Thomson Reuters, and also enjoys a AA bond rating, according to the article.
New leadership has not been announced.
To read the article, please go to bit.ly/13SLEH1.
Philadelphia Loses Leisure & Hospitality Jobs While Sector Jobs Grow Nationwide
Using data from the Bureau of Labor Statistics, NPR's Planet Money blog noted that the U.S. has added more than 500,000 jobs in the Leisure & Hospitality sector since 2007. However, CPDC/CCD analysis shows that within the last year, Philadelphia has lost 6% of its jobs in this sector. For the NPR Planet Money blog, please see n.pr/18c396H. For Philadelphia statistics, see the latest edition of Vital Statistics (below).
Philadelphia Vital Statistics
CPDC/CCD's latest edition of Vital Statistics features newly updated data on Philadelphia employment and the office and hospitality sectors. Now with more city-to-city comparative data, time series information, as well as improved data interactivity, keep up with Philadelphia's latest economic trends at centercityphila.org/business/vitalstats.php.
Manufacturing Improves in Region
Manufacturing firms responding to the Federal Reserve Bank of Philadelphia's Business Outlook Survey for July reported substantially increased business activity during the month.
The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 12.5 in June to 19.8, its highest reading since March 2011. (The index has a maximum value of 100 and a minimum value of -100.)
Prices received for goods increased for 14.2% of the firms and decreased for only 7.3%.
Employment also was stronger with 17.9% of the businesses reporting they had more employees, while 10.2% reported they had fewer.
In a special series of questions about the impact of the Affordable Care Act (ACA), 70.8% of the respondents indicated they had not made any changes to their workforce in anticipation of ACA, and 54.2% said they expected to make minimal changes in the next year.
To read the report, please go to bit.ly/12zEpgQ [PDF].
House Prices on the Rise in City
The median house price in Philadelphia increased to $132,000 in the second quarter of 2013, a 6.3% increase over the median price of $124,000 in the previous quarter and a 5.5% increase over the median price of $125,000 one year ago, according to a report issued on July 15 by Kevin C. Gillen of the Fels Institute of Government at the University of Pennsylvania.
Days-On-Market, the average number of days it takes for a listed home to sell, is down to 70 days from its peak of 95 days just over one year ago.
House prices in an area Gillen defines as Center City/Fairmount increased 3.8% in the second quarter over the first quarter, while in University City house prices fell 7.8% during the same time period.
To read the report, please go to bit.ly/18o9pbJ.
SugarHouse Revenue Falls in June
Revenue at SugarHouse Casino on the Delaware Riverfront dipped in June, according to the Pennsylvania Gaming Control Board.
In June, the casino took in $21,064,966 compared to May's $22,645,976. The Commonwealth's share of taxes was $5,720,744 compared to $6,161,381 in May. The City of Philadelphia collected $708,075 in June compared to $763,648 in taxes in May.
The casino also took in slightly less in fiscal year 2013 (FY13) than in the previous fiscal year. SugarHouse's total for FY13 was $269,602,150, down from FY12's $271,025,001. The Commonwealth collected $73,495,505 in FY13, compared to $75,906,818 in FY12. The City of Philadelphia was paid $9,077,707 in taxes in FY13, down from $9,216,831 in FY12.
To see all casino revenues, please go to bit.ly/Smpoyp.
US Airways Merger Approved
US Airways Group, Inc. on July 12 announced that its shareholders approved the merger agreement with AMR Corporation, the parent company of American Airlines, Inc. More than 99% of the shareholders voted in favor of the merger, the press release noted.
Doug Parker, chairman and CEO of US Airways, will serve as CEO of the combined company. Together, American Airlines and US Airways are expected to operate a mainline fleet of almost 950 aircraft and employ more than 100,000 people worldwide.
Headquartered in Dallas-Fort Worth, the new American Airlines is expected to offer more than 6,700 daily flights to 336 destinations in 56 countries.
The merger is subject to regulatory approvals, other customary closing conditions and confirmation of AMR's Plan of Reorganization by the U.S. Bankruptcy Court for the Southern District of New York. The companies continue to expect to complete the combination in the third quarter of 2013.
To read the press release, please go to prn.to/18exUYG.
Transportation Secretary Urges Action on Transportation Bill
Barry Schoch, Pennsylvania's Secretary of Transportation, writing an opinion piece in the Pittsburgh Post-Gazette on July 14, warns of the consequences of the General Assembly's lack of action on three different transportation proposals put forth in the most recent legislative session.
"Pennsylvania's roads, bridges and public transportation systems are in trouble," Schoch writes. Bridges may be weight-posted creating detours and traffic jams, mass transit will face curtailed service, and construction workers will be facing layoffs instead of the possibility of as many as 50,000 new jobs, he noted.
"A bill that everybody knows is needed – and needed sooner rather than later – died in a haze of special-interest lobbying," Schoch wrote.
The transportation secretary urges citizens across the state to put pressure on the members of the House and Senate when they reconvene in the fall and demand action on the transportation funding bill.
To read the article, please go to bit.ly/13FYgtT.
SEPTA Proposes Budget That Includes Shortfall
A SEPTA committee on July 18 proposed a $640 million operating budget that would carry it through December, as it awaits action from the state legislature, The Philadelphia Inquirer reported. The agency is anticipating a $38 million shortfall in fiscal year 2014 (FY14), so unless the legislature passes a transportation funding bill, more service cuts will ensue next July. Fares were increased this year on July 1. The full board is expected to approve the plan this week.
The SEPTA board also is expected to approve a capital budget of $308 million for new vehicles and major construction projects for the full fiscal year. The proposed budget won't include funds for a $5 billion backlog of "state of good repair" needs and won't permit major fixes, according to The Philadelphia Inquirer.
Parks & Open Space News
More Improvements for Schuylkill Banks
The Schuylkill River Development Corporation (SRDC) has three capital projects in various stages of development to improve Schuylkill Banks.
Beams are now being placed for the 2,000-foot-long, 15-foot-wide boardwalk south of Locust Street that will connect with a 460-foot ADA-accessible ramp, providing an important link to the Schuylkill River Trail and Center City from University City and West Philadelphia.
Concrete for the ramp is expected to be poured in the coming months. The project, in partnership with the City of Philadelphia, is expected to be complete in late 2014.
For more information on this project, please go to bit.ly/18nnpyX.
The Millennium Bridge Lighting Project is under way and will upgrade and restore the enhancement lighting that was installed as part of the City's millennium celebration. This will include flood lighting, LED string lighting, and pier lights for the Walnut Street, Market Street, JFK Boulevard, and SEPTA Bridges. The work will be performed by Carr & Duff, Inc. and is expected to be complete by the end of September. For more information, please go to bit.ly/14jxqOy.
Currently in the conceptual stage is a plan to extend the trail south to Bartram's Garden, which would require a link from the Grays Ferry Crescent to the west bank of the Schuylkill, and would employ an abandoned railroad bridge, just south of the Grays Ferry Bridge. To see a Concepts Studies Report, please go to bit.ly/15qhK8X [PDF].
City's Trails Prioritized
The Philadelphia City Planning Commission (PCPC) has adopted a Philadelphia Trail Master Plan (PTMP), which prioritizes the 75 trails in the City of Philadelphia, a move that could impact the way both government and foundation funds are allocated, PlanPhilly reported on Friday.
The PTMP was created in collaboration with the Mayor's Office of Transportation and Utilities (MOTU).
The city currently has more than 200 miles of trails, many of which flow through park lands or watersheds. Top priority proposals include portions of the Tacony Creek, Frankford Creek, Poquessing Creek, Schuylkill Banks and Central Delaware River trails, the article noted. To read the PlanPhilly article, please go to bit.ly/12LU6VL.
A Plan to Reduce Poverty in Philadelphia
Mayor Michael A. Nutter and Eva Gladstein, Executive Director of the Mayor's Office of Community Empowerment and Opportunity (CEO), on July 11 announced the City of Philadelphia's new, anti-poverty strategy, Shared Prosperity Philadelphia, which will bring together governmental, private and philanthropic agencies already working to reduce poverty, which at 28% in Philadelphia, is among the highest poverty rates in the country. The new plan is designed to help lift citizens and communities out of poverty and increase opportunities for low-income individuals and families.
The initiative focuses on five strategic goals: job creation for adults, expanding public benefits, ensuring learning opportunities for children, increasing housing security and affordability, and strengthening economic asset building.
To read the Shared Prosperity Philadelphia report, please go to bit.ly/16EqabF [PDF].
In a co-authored op-ed article in The Philadelphia Inquirer on July 19, Jeremy Nowak and Paul R. Levy suggest that there is another required path to reduce poverty, and that is to grow jobs. To read the op-ed piece, please go to bit.ly/14myPDK.
City Tax Revenues Rise in FY13
City of Philadelphia General Fund tax collections were $154.8 million in June, according to the Pennsylvania Intergovernmental Cooperation Authority (PICA). During fiscal year 2013 (FY13), which ended June 30, overall collections of taxes totaled $2,747.8 million, an 8% increase over FY12.
Wage and earnings tax collections for FY13 were up 4.1%, from $1,527 million in FY12 to $1,589.3 in FY13. Net profits tax increased 51.1%, rising from $20.5 million in FY12 to $30.9 million in FY13. Real estate transfer tax revenue reflected the improvement in the residential housing market and rose 23.5% in FY13 to $146.9 million, up from $118.9 million in FY12.
The numbers may change after end-of-year accounting adjustments are made, the report noted.
To read the report, please go to bit.ly/17j6c8y.
Local Judge Rules Protests at Liberty Place Can Continue
Common Pleas Court Judge Ellen Ceisler on July 18 ruled that the Israelite School of Universal Practical Knowledge could continue its public protests in front of Liberty Place, as long as the members stayed on the public portion of the sidewalk. Lawyers for Liberty Place had argued that the sidewalk was too small and the controversial black religious group was shouting hate messages and practicing ethnic intimidation.
"They preach about how they hate white people and how they hate gays," attorney Jason Gosselin, told Channel 10 news. "They're calling women whores. Really hostile language that makes people feel intimidated and fearful. That's not protected by the First Amendment."
"We don't hate white people," Commander General Yahanna responded on Channel 10. "But God hates white people." Yahanna added that members of his group have never physically harmed anyone at the demonstrations.
Ceisler ruled that this group, which has carried out similar activities in front of the Centre Square office towers and in front of the Reading Terminal Headhouse entrance to the Pennsylvania Convention Center, had a First Amendment right to its loud protests.
To read the Philadelphia Daily News article, please go to bit.ly/13OsTx8. To view a video of the group on Market Street, please go to bit.ly/1dPFHtj.
Microsoft Chooses Philadelphia for Tech Initiative
The City of Philadelphia was named a Showcase City as a part of Microsoft Corporation CityNext, a global initiative to empower cities to re-imagine their futures and cultivate vibrant communities, Mayor Michael A. Nutter announced on July 16. Philadelphia was one of 13 cities selected and the only one in North America.
As a Showcase City, Philadelphia will receive at least three years of priority attention and support from Microsoft and its network of more than 430,000 technology experts to help the City adopt innovative technologies.
Potential support areas include creating a "municipal innovation lab;" awarding a software grant to a STEM (science, technology, engineering and mathematics) education non-profit; and creating a technical program to support minority students.
To read the press release, please go to bit.ly/1bGzAJr.
Pennsylvania House Passes 'Fiscal Code'
The Pennsylvania House passed SB 591, known as the "fiscal code," on July 15 that directs $45 million in additional state aid to Philadelphia schools, Newsworks reported. However, the money comes via forgiveness of an old debt with the federal government and the details have not been finalized.
Among the stipulations is one that requires the Pennsylvania Secretary of Education to determine if the district has "begun implementation of reforms that will provide for the district's fiscal stability, educational improvement and operational control," the Philadelphia Daily News reported.
To read, the bill, please go to bit.ly/17qXxRD. To read the Newsworks article, please go to bit.ly/1aLw02J.