Office Sector News
Philadelphia Office Inventory Growth Outpacing Peers
Once construction of the Comcast Innovation and Technology Center and the renovation of 1900 Market Street is complete, the CBD office inventory will grow to 44,450,000 SF, an all-time high, according to the Philadelphia CBD Office Market Report, 2014 2nd Quarter from Newmark Grubb Knight Frank.
Philadelphia’s inventory is growing by 4%, more than New York City’s (1.7%) and Boston’s (2.2%), but well below Washington, D.C.’s (8%), the report noted.
The vacancy rate decreased to 13.08% and year-to-date positive absorption was 150,000 SF. Almost two-thirds (60%) of CBD building owners have reported occupancy levels higher than the citywide rate of 87%.
Rental rates have increased 2%, led by Class B increases of 2.5%, for an average rental rate of $26.88 in the second quarter.
Chicago–Based Coworking Company Expands to Philadelphia
Industrious, a Chicago-based coworking space co-founded by two New York City entrepreneurs, will open a two-floor, 20,000-square-foot shared office space on the 17th and 18th floors of 230 South Broad Street in November, Technical.ly Philly reported on August 29.
Industrious plans to open another 20,000-square-foot space in Old City, the article noted, though that lease is still being finalized and the address was not released.
Industrious is the second out-of-town, shared office space provider to announce a Philadelphia expansion. Pipeline of Miami, Florida, will open a 21,000-square-foot space this fall on the 15th and 16th floors of the 25-story Graham Building across from Dilworth Park. Other out-of-town groups are also in discussion with local developers.
To read the Technical.ly Philly article, please go to bit.ly/1qo5Vfb.
Nonmanufacturing Is Stable
Responses to the Federal Reserve Bank of Philadelphia’s survey of nonmanufacturing firms suggest that overall activity in the local economy in August increased, though many categories were stable.
New orders were up for 36.4% of the responding businesses, down for 15.9%, and remained the same for 31.8%.
Full-time employees increased for 18.2% of the firms, decreased for 6.8%, and remained the same for 72.7%.
Looking ahead six months, 77.3% of the reporting companies expected business to increase, 4.5% anticipated a decrease, and 9.1% foresaw no change.
Construction on Rodin Square Begins
On August 27, ground was broken for developer Neal Rodin’s $160 million luxury apartment complex Rodin Square, which will include 293 luxury apartments, underground parking for a 55,000-square-foot Whole Foods, and a parking garage for residents, The Philadelphia Inquirer reported.
The new development will cover almost three acres on the site of the old Best Western Hotel, which is being torn down.
The project promises to further transform an area that 20 years ago was a dead zone, the article noted. Nearby are the Central Branch of the Free Library of Philadelphia, the Barnes Foundation, and Sister Cities Park at 18th Street and the Benjamin Franklin Parkway.
To read the article, please go to bit.ly/1qNrAOV.
The burgeoning Spring Garden area was the subject of a previous article by The Philadelphia Inquirer (bit.ly/1vuHRM8).
Developments along and adjacent to the Benjamin Franklin Parkway will be the subject of the next general meeting of the Central Philadelphia Development Corporation on Tuesday, September 16. (See details below in Upcoming Events.)
Construction Jobs Lead Employment Growth
The Philadelphia region ranked third nationally in the number of construction jobs added in a year, The Philadelphia Inquirer reported on August 28.
The Associated General Contractors' analysis of the numbers showed that construction jobs in the area grew 12.5%, faster than job growth in all other sectors, the article noted.
Philadelphia, along with Bucks, Chester, Delaware, and Montgomery Counties, has added 8,500 construction jobs from July to July. Only Houston and Dallas have added more.
The young-adult generation's desire to live in the city is fueling growth both in residential and in commercial development, the article noted, as businesses continue to locate in the city to be near talent.
To read the article, please go to bit.ly/1llGDPL.
Revenue at SugarHouse Is Up
Revenue at SugarHouse Casino on the Delaware River rebounded in July, according to the Pennsylvania Gaming Control Board (PGCB).
In July, the casino took in $21,521,160, compared to $20,462,847 in June. The Commonwealth’s share was $5,852,254 in July, compared to $5,519,406 in June. The City of Philadelphia received $724,044, up from $684,269 in June.
To see all casino revenues, please go to bit.ly/16izgf9.
Arts and Culture News
Dîner en Blanc Lands on Avenue of the Arts
The third-annual Dîner en Blanc on August 21 drew an estimated 3,500 people to the surprise location, which turned out to be the Avenue of the Arts between Pine and Chestnut Streets.
The event celebrates dinner as an art form and the art of re-creating public space and showing it off. This year's dinner had as its backdrop the Center City District's colorful lighting of 12 facades on the Avenue of the Arts.
For the Philadelphia Business Journal article and video, please go to bit.ly/1s9WRd8.
Convention Center Bookings Improve
The National Black MBA Association, which canceled its 2014 convention booked in Philadelphia and moved it to Atlanta because of concerns about labor issues and inefficiencies, has booked its 2017 convention here in response to new management and work rules at the Pennsylvania Convention Center, The Philadelphia Inquirer reported on August 22. The Atlanta convention booked more than 10,000 nights in Atlanta's hotels.
In addition, the Academy of Management, which held its convention here from August 1 to August 5, has informally agreed to return in 2021 and 2026. Each convention would bring about 10,000 attendees.
To read the article, please go to bit.ly/VKQbru.
Plan for I-676 Bridges Revised
A revised construction sequence for Part 1 of PennDOT’s project to replace the I-676 bridges on the north edge of Logan Square has been developed to minimize the impact of construction during the Pope’s anticipated visit in late September 2015.
The project will be advertised for construction in October 2014, construction work will start in early spring 2015, but will be halted during the month of September 2015 and resumed in October. This schedule anticipates completing the work on Part 1 by June 2017, in time for the Parkway’s Centennial Celebration.
Part 2 (the 18th, 21st and 22nd Street bridges) will begin June 2017. The completion date has not been announced.
To view the construction sequencing, please go to
Parks and Open Space News
Dilworth Park Opens This Week
Matt Welbes, Executive Director, Federal Transit Administration, Lt. Governor Jim Cawley and Mayor Michael A. Nutter will join the Center City District and other local funders to cut the ribbon on a transformed Dilworth Park at 11:00 a.m. on Thursday, September 4.
The ribbon-cutting on the west side of the city’s historic City Hall will be followed by an all-day community arts and culture festival featuring performances and talent from neighborhoods across the city, organized by the CCD and supported by Comcast. This will be followed by two additional days of festivities. On Friday, September 5, from Noon to 7:00 p.m., there will be a Picnic in the Park, presented by American Express, for Center City’s office workers. Picnic-style lunches will be available for sale and live music will enliven the park. Sips in the Park will begin at 5:00 p.m. and continue until 7:00 p.m., with more live music and happy-hour drink specials. On Saturday, September 6, from 11:00 a.m. to 4:00 p.m., it’s Playtime in the Park, presented by KidsInCenterCity.com, with family-friendly activities including music, storytelling, games, and more. The park will have ongoing programming and activities to appeal to diverse audiences of all ages throughout the fall and will feature winter ice-skating. To see a list of all activities, please visit DilworthPark.org.
To read an article in The Philadelphia Inquirer about the opening, please go to bit.ly/1ljTZMJ.
Spruce Street Harbor Park Extends Season
The Delaware River Waterfront Corporation (DRWC) has extended the season for the Spruce Street Harbor Park, which opened on June 27 and was expected to close on Monday, September 1. The DRWC saw such enthusiastic demand for the park that it decided to keep the park open through Sunday, September 28.
The park was designed for DRWC by Interface Studios, Digsau, and Groundswell Design Group.
To read the notice of extension on Visit Philly’s blog, Uwishunu, please go to bit.ly/1nD02qN.
City of Philadelphia Tax Revenue Update for June 2014
City of Philadelphia General Fund tax collections totaled $166.5 million in June, an increase of $31.6 million from June 2013, according to the Pennsylvania Intergovernmental Cooperation Authority (PICA).
Overall FY14 tax collections total $2,818.5 million, an increase of $90.5 million (3.3%), compared to FY13. The tax collections that increased were: wage and earnings ($49.2 million); real estate transfer ($21.0 million); business income and receipts ($18.8 million); sales ($6.5 million); parking ($1.6 million); amusement ($1.4 million); and real estate taxes ($0.9 million); offset by a $1.6 million decline in net profits tax collections.
The current FY14 tax revenue estimate, contained in the PICA‐approved Five‐Year Financial Plan for FY15 through FY19, is $2,788.7 million, a $26.2 million (0.9%) increase from the adopted budget.
To read the report, please go to bit.ly/YF8m3R [PDF].
City Reaches Deal With Council 33
The City of Philadelphia has reached a tentative agreement with AFSCME District Council 33, the City's largest municipal union, The Philadelphia Inquirer reported on August 22.
Under the terms of the agreement, the union's 10,000 trash haulers and other blue-collar workers will receive a 3.5% wage increase effective September 1 and an additional 2.5% raise next July, plus a $2,800 lump-sum payment within 30 days of ratification.
The contract would expire June 30, 2016, and would replace the one that expired in 2009. Members have been without a contract since that time and have not had raises for seven years. The contract includes union concessions on healthcare costs and pensions, the article noted.
Administration officials projected the deal would add $127 million to the City's costs over five years.
To read the article, please go to bit.ly/1wi7TDI.
To read the press release from Mayor Michael A. Nutter, please go to bit.ly/1ztI5Ax.
Is Panhandling Protected Speech?
In its June decision, the U.S. Supreme Court struck down a Massachusetts law that banned protesters within 35 feet (known as the buffer zone) of abortion clinics, ruling that the law infringed upon the First Amendment rights of antiabortion activists. After the decision was handed down, the American Civil Liberties Union (ACLU) of Massachusetts sued on behalf of three homeless men living in Lowell -- challenging the city's ban on panhandling within 400 acres of the Downtown Historic District because it violates their First Amendment right to free speech, the Lowell Sun reported. The ACLU also filed a similar suit in Worcester.
The ACLU wrote that the ban on aggressive panhandling is targeted only at particular speech -- that requesting an immediate donation of funds.
U.S. District Court Judge Douglas Woodlock will decide the case, but no hearings have been scheduled.
To read the article, please go to bit.ly/1nzgXdQ.
On a related front in Denver, the city this summer partnered with private and institutional investors, foundations and social welfare organizations on a program to put private money to work on the homeless problem, the Denver Business Journal reported.
Called the “Social Impact Bond,” the program organizes investors who provide upfront financing for organizations that build housing, provide mental health, case management, and other services to the hardcore homeless population.
The City projects that investors will be paid back from the savings realized by local government when the most chronically homeless aren’t repeatedly arrested, jailed, or sent to detox or the emergency room.
To read the article, please go to bit.ly/1lEOEzN.
Tax Revenue Rebounds in Some States
Nationally, total state tax revenue has recovered from its plunge during the Great Recession, despite a slump in receipts in early 2014, according to a new report from The Pew Charitable Trusts. The recovery, however, is uneven, and tax collections in 26 states had not fully rebounded by the first quarter of 2014.
In Pennsylvania, in the first quarter of 2014, revenue was down -2.4%, while neighboring New Jersey was down -10.3% and New York was up 7.4%.
Alaska’s revenue fell by -66.3%, Wyoming’s by -26% and Florida’s by -20.2%. On the plus side, North Dakota led all the states, thanks to an oil boom, and increased its tax revenue by 113.5% above its highest point during the recession. Other large rebounds occurred in Illinois (23.5%) and Minnesota (15.0%).
To read the report, please go to bit.ly/1vUKELL.
Center City District Restaurant Week
The 2014 Fall Center City District Restaurant Week will take place September 7-12 and September 14-19, with more than 120 restaurants in Center City offering three-course dinners for only $35 per person and three-course lunches for $20.
Newcomers to this year’s lineup include the yet-to-open Abe Fisher — the brand-new spot from James Beard Award-winning chef Michael Solomonov — as well as Bank and Bourbon, Entrée BYOB, 4 Fathers, Mixto, and Stella Rossa.
You can make reservations and look up menus on the go with the Center City District Restaurant Week mobile site, and keep up with restaurant week events on Twitter @PhilaRestWeek.
For more information , please visit centercityphila.org/restaurantweek/.
CPDC Meeting in September
The Central Philadelphia Development Corporation (CPDC) will hold its next general membership meeting on Tuesday, September 16, at the Union League, Meade Room, 140 South Broad Street. Registration and Breakfast is at 8:00 a.m., with the program to follow at 8:30 a.m.
The subject will be “What’s Next on The Benjamin Franklin Parkway.”
In the decade since CPDC produced a master plan, the Parkway has been transformed with new institutions, new parks, and with significant adjacent residential development. As we look forward toward the boulevard’s 100th anniversary, join us for a panel discussion on future developments and plans for a centennial celebration. Panelists will include Gail Harrity, President and COO, Philadelphia Museum of Art; Siobhan Reardon, President and Director, Free Library of Philadelphia; and Alan Greenberger, Deputy Mayor for Economic Development and Director of Commerce, City of Philadelphia.
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. Please RSVP no later than September 4 to Carol Raffa, email@example.com or 215.440.5500.
Forum on Innovative Use of Transportation Funds
On Thursday, September 18, the Economy League of Greater Philadelphia and the Delaware Valley Regional Planning Commission will present a World Class Council Forum, “Going the Extra Mile: Leveraging Smart Financing and New Funding Tools for Transportation in Greater Philadelphia," at the Liberty View Ballroom, Independence Visitors Center, Sixth and Market Streets.
With the passage of transportation funding legislation in Harrisburg last fall, southeastern Pennsylvania is slated to receive an additional $10 billion in state funds by 2040. Learn how new state transportation funding will be deployed in southeastern Pennsylvania and explore innovative financing and funding approaches that our region can pursue to ensure that we're making the most of new transportation dollars.
Tickets are $25 in advance and $35 on day of forum.
To register, please go to bit.ly/1AOgYCR.
Dilworth Artist Janet Echelman to Speak at Moore
On Friday, September 19, from 6:30 p.m. to 8:00 p.m., Moore College of Art & Design, 1916 Race Street, will present a “Studio Conversation with Janet Echelman,” in Stewart Auditorium. The Studio Conversations series is presented by Graduate Studies at Moore's MFA in Studio Art. At 5:30 p.m., there will be a Graduate Studies Kick-Off Reception.
The CCD is still fundraising for Janet Echelman’s public sculpture for the new Dilworth Park. The art will be embedded in the 11,600-square-foot fountain and will trace above ground in real time the paths of the three transit lines below. Described by the artist as “a living X-ray of the city’s circulatory system,” the work creates moving 4-foot-tall curtains of mist, which glow at night when illuminated by multiple layers of colored light. For a presentation by the artist about the work, please go to bit.ly/1uakbtz.
Admission to the Moore event is free.
For more information, please go to bit.ly/1pWn0O4.
The Center City District would like to thank Comcast and American Express for their sponsorship of activities during the opening of the new Dilworth Park.