State House Still Negotiating on Transportation Bill
Speaker of the state House of Representatives Sam Smith (R., Jefferson) on October 22 held a press conference to discuss SB 1, the transportation bill that was passed in the Senate and is awaiting a vote in the House. The bill would provide funding for bridges, roads and transit infrastructure across the state.
Smith said his caucus would be motivated to move the bill along if there were a rollback of wages for union workers.
Prevailing wage laws require contractors on state-funded construction projects costing more than $25,000 to pay specific wages to various tradesmen. The wages are set by the state Department of Labor and Industry.
Some labor leaders have indicated they would be willing to raise the prevailing wage threshold from $25,000 to $100,000 on state-funded transportation construction projects. According to PennDOT the state funded 17 projects of $100,000 or less last year, for a total expense of $1.1 million, the Pittsburgh Tribune-Review reported.
Other issues being debated in the House include how much money should go to mass transit, where the sources of revenue should come from, and a shifting away from the tax at the pump to an uncapped wholesale tax on gasoline.
The House ended its session Wednesday, October 23, and will not reconvene again until Tuesday, November 12.
SEPTA Signs Off on Labor Pact
The SEPTA board on October 24 approved a new five-year labor contract for Regional Rail conductors and assistant conductors, effective October 27, The Philadelphia Inquirer reported.
United Transportation Union Local 61, which represents 363 conductors and assistant conductors, ratified the pact earlier this month after rejecting a similar deal in April.
The contract provides for an immediate 8.5% pay increase over the wages of October 2009, the end date of the current contract, and a 3.5% increase in September 2014, the article noted.
To read the article, please go to bit.ly/17OETCa.
City Issues RFP for Bike Share Program
The City of Philadelphia has issued a request for proposals (RFP) for companies interested in designing and running a proposed bicycle sharing program.
A pre-proposal meeting will be held Wednesday, October 30, at 1:30 p.m. at the Municipal Services Building, Room 1450, 1401 JFK Boulevard.
Final questions are due by Friday, November 1, at 5:00 p.m., and final proposals are due Tuesday, November 26, by 5:00 p.m.
To read the announcement of the RFP, please go to 1.usa.gov/Hk41e3 [PDF].
City Council's Finance Committee will hold a public hearing on Bill #130686 on Thursday, November 7, at Noon, to create a Headquarter Hotel Tax Increment Financing District for a proposed 700-room hotel that would include a 240-room W Hotel and 460-room Element by Westin at 1441 Chestnut Street, immediately to the west of the Ritz Carlton. The hotel is being developed by Brook Lenfest's Chestlen Development, L.P., and will cost an estimated $280.4 million, of which $33 million would come from the TIF. Financing for the project is expected to be in place by January 1, 2014, also the effective date of the TIF. Construction is targeted to be completed by January 2017. The development is projected to create 1,800 construction jobs and 450 permanent jobs.
The bill was introduced on October 3 by Councilman William K. Greenlee on behalf of Council President Darrell L. Clarke. To read the bill, please go to bit.ly/1bDhDy6.
Residential Market News
Housing Prices in Center City Higher in Third Quarter
The median sale price in Center City was $413,750, 2.8% higher than the previous quarter and 6% higher than the same quarter last year, according to the Econsult Solutions, Inc. Philadelphia Housing Index – 2013 Q3. City-wide, the prices for single-family homes decreased by 0.5% this quarter but are up 2.9% from a year ago.
Overall, there were 3,728 arms-length sales of single-family homes in Philadelphia this quarter, which is up 0.3% from the previous quarter, and 14% from the same quarter a year ago.
To read the report, please go to bit.ly/17ehy2h [PDF].
Councilman Makes Case for Continuing Tax Abatement
Councilman Kenyatta Johnson's op-ed article in The Philadelphia Inquirer on October 16 presents a strong endorsement of the benefits of the City's current tax-abatement law.
Various bills have been introduced in Council to dilute or do away entirely with the abatement, in order to send more tax money to the Philadelphia School District. In the article, Johnson urges caution in moving to "scale back a policy that has coincided with Philadelphia's biggest real-estate boom in many of our lifetimes."
To read the article, please go to bit.ly/1g103oE.
Walnut Street Retail Rents Are Quickly Rising
Walnut Street has the fastest-rising retail rents in the country, according to Colliers International, the Philadelphia Business Journal reported on October 17. Rents rose by 34% in the past year, the article noted, as national brands increased their presence on the street.
But Walnut Street retail rents, at $107 per square foot, continue to be low, the report noted, when compared with the $3,052 SF on New York City's Fifth Avenue, internationally the top retail rent, and $1,325 SF on NYC's Madison Avenue.
To read the article, please go to bit.ly/1fGA9qc.
SugarHouse Revenue Falls, Expansion to Begin
Revenue at SugarHouse Casino on the Delaware Riverfront dipped in September after a robust August, according to the Pennsylvania Gaming Control Board.
In September, the casino took in $19,513,358, compared to August's $22,257,611. The Commonwealth's share of taxes was $5,414.321, compared to $6,065,128 in the previous month. The City of Philadelphia collected $665.763, compared to $750,122 in August.
To see all casino revenues, please go to bit.ly/16izgf9.
In other SugarHouse news, site preparation for the casino's $155 million expansion could begin by the end of the year, followed in the spring with the construction of a new garage, restaurants, and an expanded casino, The Philadelphia Inquirer reported on Friday.
The enhanced casino will include a gaming floor of 85,000 SF (formerly 58,000 SF), a second-floor banquet hall with a wall of windows and a riverside balcony, plus a seven-story parking garage, the article noted. For details on the expansion as reported in The Inquirer, and to see a rendering, please go to bit.ly/1ampa1i.
Philadelphia Vital Statistics
CPDC/CCD's latest edition of Vital Statistics features newly updated data on Philadelphia employment.
Between July and August 2013, the number of people employed in Philadelphia decreased by approximately 8,500, contributing to an increase in the city's unemployment rate from 10.9% to 11%. Philadelphia has the highest unemployment rate among major East Coast cities and was the only one to see its unemployment rate increase between July and August. For more information, please visit centercityphila.org/business/vitalstats.php.
Regional Manufacturing Activity Dips But Still Strong
Manufacturing growth in the region continued in October, according to firms responding to this month's Business Outlook Survey, conducted by the Federal Reserve Bank of Philadelphia.
The number of firms reporting an increase in new orders (40.6%) was substantially higher than those reporting a decrease (13.0%). The number of companies reporting more employees (23.1%) was well above those reporting fewer employees (7.6%).
Looking ahead six months, a majority of the firms (63.1%) expected an increase in business, while 2.3% expected business to decrease.
In a special question on employment, 34.8% of respondents indicated their regular, full-time workforce had increased over the past year, while 15.9% reported a decrease.
To read the report, please go to bit.ly/GZQWGk [PDF].
Nonmanufacturing Remains Positive in October
Responses to the Federal Reserve Bank of Philadelphia's survey of nonmanufacturing suggests that, while October was not as robust as September, general activity in the region remained positive.
Sales were up for 52.4% of the companies in October and down for only 11.9%. The number of firms reporting an increased number of full-time employees was 28.6%; while 9.5% reported decreases.
Respondents remained optimistic about activity over the next six months: 78.6% of the firms expected economic activity to increase, while only 7.1% expected it to decrease.
Parks and Open Space News
Sister Cities Park Design Honored
AIA Philadelphia presented its annual Awards for Design Excellence on October 14. Digsau, the Philadelphia architecture and environmental design firm that created the Pavilion and Children's Discovery Garden at Sisters Cities Park, 18th Street and Benjamin Franklin Parkway, was a recipient of an Honor Award.
The Center City District (CCD) completed the $5.3 million renovation of Sister Cities Park in May 2012. The park is managed and programmed by the CCD. To learn more about park activities, please go to SisterCitiesPark.org.
To see a complete list of winners, please go to bit.ly/16qPrXD.
School District News
Governor Releases $45 Million to School District
Governor Tom Corbett on October 16 announced the release of $45 million in state funds to the Philadelphia School District, citing "fiscal, educational and operational reforms" that the District has been implementing to eliminate a large, structural budget deficit in a school system serving 200,000 children.
The governor was responding to a letter dated October 15 that Philadelphia School District Superintendent William Hite sent to acting Pennsylvania Secretary of Education Carolyn Dumaresq.
Hite's letter highlighted his action in reducing the role of seniority in assigning and transferring teachers after some were recalled from layoffs this summer, as well as other steps the District has taken, according to the Greater Philadelphia Chamber of Commerce. Corbett's administration had cited the elimination of seniority in teacher assignment and strengthening the ability of principals to select their faculty among the changes that it wanted the District to make.
Hite said that with the state's release of the $45 million, the District would be able to rehire approximately 400 District personnel, including 50 teachers, and 350 school counselors, nurse's aides, and other aides.
Meanwhile, in Philadelphia, the Mayor and City Council remain at odds on how the pledge of $50 million to the School District from the City of Philadelphia is to be realized. City Council on October 10 gave preliminary approval to Bill #130577, which would allow a budget transfer of $50 million in City funds and make the money available immediately to the Philadelphia School District. In exchange, the School District would transfer to the City school properties no longer in use, and the City would sell them. The Mayor supports an alternative plan that would secure the $50 million through a bond issue that extends and pledges 1% of the sales tax that was due to expire on July 1, 2014. However, no member of Council has agreed to introduce a bill to authorize that action.
On Saturday, The Philadelphia Inquirer reported that the Washington real estate investment firm Municipal Acquisitions had offered $100 million to buy more than 30 of the school buildings that are now empty. Initially cast aside by the School District after it was delivered by Council President Darrell L. Clarke, the offer is now being reviewed by Mayor Michael A. Nutter.
To read the news article, please go to bit.ly/HnuAht.
To read Bill #130577, please go to bit.ly/17nzp7e.
Bills in Harrisburg To Aid School District Budget and Address AVI Issues
Three key tax bills advanced in the Pennsylvania General Assembly last week, and are supported by the Greater Philadelphia Chamber of Commerce to help address the Philadelphia School District's budget and other Actual Value related issues. The bills now await Senate approval.
HB 388 authorizes the City to file a lien against all properties located inside and outside of Philadelphia but owned by a party delinquent on city taxes. To read the bill, please go to bit.ly/HkcMVv.
HB 390 allows the City to use age and financial need when considering property tax relief for long-term owner-occupants. To read the bill, please go to bit.ly/1086bD7.
HB 391 provides eligible Philadelphia homeowners with the option to make property tax payments in periodic installments. To read the bill, please go to bit.ly/17j03Oz.
School-Supplies Fund Exceeds Goal
A new fund established by Mayor Michael A. Nutter to raise money for school supplies has received nearly $531,000, exceeding its October 15 goal, The Philadelphia Inquirer reported on October 20.
Two large anonymous donations – of $125,000 and $100,000 – came in recently and helped the fund top the goal of $500,000, the article noted. The long-term goal is to raise $2.5 million over five years.
The money will be used to support School District, charter, and Catholic schools. Schools are being asked to apply for money from the fund by November 5.
To read the article, please go to bit.ly/164bOFm.
Hearings on Education in City Council
On Tuesday, November 19, at 1:00 p.m., City Council's Education Committee will hold a public hearing enabled by Resolution #130260, introduced by Councilman David Oh, which calls for examining best practices in education on a global basis to find out how to improve public education in Philadelphia.
To read the resolution, please go to bit.ly/166h8Im.
On Wednesday, November 20, at 10:00 a.m., the same committee will hold a public hearing to examine the Commonwealth of Pennsylvania's approach to education funding.
The hearing is the result of the passage of Resolution #130638, introduced by Councilwoman Jannie L. Blackwell, which states that on average, state governments across the country fund 43.5% of the total amount spent on public elementary and secondary education, and the Commonwealth of Pennsylvania is below the national average, contributing only 35.8%.
To read the resolution, please go to bit.ly/Hh7sSP.
Chair of SRC Resigns
Citing family concerns, Pedro Ramos, chair of the School Reform Commission (SRC) for the past two years, resigned his post on October 21. Under Ramos' watch, the district hired Superintendent William R. Hite Jr. and closed dozens of schools, The Philadelphia Inquirer reported.
The five-seat SRC is made up of three gubernatorial nominees and two mayoral appointments. Currently, Joseph Dworetzky and Feather Houstoun are the remaining gubernatorial picks; Sylvia Simms and Wendell Pritchett were appointed by the mayor, the article noted.
At this time, no one has been named to succeed Ramos.
To read The Inquirer article, please go to bit.ly/18CvwJm.
City Tax Policy News
Should Large Non-Profits Pay the City in Lieu of Taxes?
Philadelphia's Higher Eds' annual economic impact within the city is estimated to be $10.9 billion, supporting 84,000 jobs and generating $211 million in City tax revenues, according to a new report from Econsult Solutions, Inc., released on October 17, for the Philadelphia Higher Education Government Relations Officers Group.
The report, The City of Philadelphia and Its Higher Eds: Shared Goals, Shared Missions, Shared Results, states that the "Philadelphia Model" of cooperation between the City and the nonprofits benefits the city and its residents.
The study was released as PILOTS (payment in lieu of taxes) for nonprofits, used in other cities, are being discussed as a way of funding the Philadelphia School District.
Tom Ferrick, Interim Director and Editor of Axis Philly, an online news website, offered a critique of the report and compares Philadelphia to other cities using PILOTS.
To read the Econsult Solutions, Inc., report, please go to bit.ly/1bTgBtW [PDF].
To read Tom Ferrick's commentary, please go to bit.ly/1c8V9Fv.
Council Approves Bill to Sell Liens on Delinquent Properties
City Council on Thursday passed Bill #130531-A, which allows the City to assign or transfer to third parties tax-delinquent properties, enabling the City to sell liens to private investors and collection agencies.
A recent study from The Pew Charitable Trusts determined that $515 million in back property taxes, interest, and penalties was owed to the City, but that only about 30% was collectible. To read the Pew report, released in June, please go to bit.ly/19GnUoc [PDF].
To read Bill #130531-A, please go to bit.ly/HlRCFA.
CPDC Young Professionals to Meet
On Thursday, November 7, from 5:30 p.m. to 7:00 p.m., the CPDC Young Professionals will meet at the Blank Rome Marvin Comisky Conference Center, One Logan Square, 130 North 18th Street, First Floor.
Jerry Sweeney, President and Chief Executive Officer of Brandywine Realty Trust, will be featured and will speak about why his company has invested strongly in Philadelphia and why tax reform is essential for job growth in the City.
Network with other young professionals and enjoy complimentary appetizers along with a wine and beer open bar.
The event is generously sponsored by Brandywine Realty Trust.
Please RSVP to email@example.com by 12:00 p.m. Thursday, October 31.
Panel Discussion on the Reading Viaduct
On Thursday, November 21, at 6:00 p.m. at the Locks Gallery, 600 Washington Square South, there will be a presentation of Rethinking Trestletown: A Panel Discussion on the Reading Viaduct. The gallery is currently hosting through November 23, 2013, an exhibition of 17 new and recent paintings and drawings by Philadelphia artist Sarah McEneaney that focus on the Reading Viaduct and surrounding area. Panelists will be Sarah McEneaney, who is also Co-founder of the Reading Viaduct Project; First District Councilman Mark Squilla; and Bryan Hanes, Landscape Architect and Urban Designer. The moderator will be Paul R. Levy, President and CEO of the Center City District.