Office Sector News
Some Reservations About Future Office Occupancy
While Class A office buildings in Center City are at near record occupancy levels and commanding increased rents, guest blogger Glen Blumenfeld, Principal at Tactix Real Estate Advisors, writing in the Philadelphia Business Journal suggests that, in the absence of job growth, these favorable conditions are likely short-lived as new office towers come to market and other local and national trends tilt toward occupying less office space.
In mid-2016, FMC Tower at Cira Centre South will open with about 200,000 square feet of speculative office space, the author notes, and Comcast's new Innovation and Technology Center, slated to open in 2017, will free up about 500,000 square feet of office space Comcast is temporarily utilizing until the new center opens.
In addition, companies, especially law firms, are downsizing their office footprints, a national trend, as companies adopt new workplace traditions such as hoteling and telecommuting.
To read the article, please go to bit.ly/1zuB7Qj.
Lower Manhattan Encouraging Media, Tech and Start-up Companies
The Alliance for Downtown New York and Lower Manhattan tech leaders on October 30 unveiled plans for Lower Manhattan HQ (LMHQ), a 12,500-square-foot event, meeting and social gathering space where start-up and tech companies can come together to collaborate, activate, and accelerate their growth.
The Alliance for Downtown New York, the CCD’s counterpart, has embarked on a long-term strategy to fill Class B buildings not only with housing, but also with tech, advertising, media, and information (TAMI) companies. The Wall Street area, which used to be dominated by financial services, is now home to 800 TAMI firms, according to the Alliance, with more TAMI companies relocating in 2014 to the area than in the previous five years combined.
Among its amenities, the LMHQ will provide members a 140-seat event space and a range of programming from partners, including New York Tech Meetup, New York Technology Council, and the Center for an Urban Future. Pace University will serve as educational partner. It is expected to open next spring.
The Center City District has a grant from the Knight Foundation to analyze similar trends in three cities, including Philadelphia, and to recommend strategic responses.
To read the Downtown Alliance’s press release, please go to bit.ly/10P0VbK [PDF].
1919 Market Street Set to Begin Construction
Brandywine Realty Trust has formed a partnership with LCOR and the California State Teachers’ Retirement System to construct 1919 Market Street, the Philadelphia Business Journal reported on October 27.
The partnership is expected to soon begin construction on the 29-story, 455,000-square-foot, mixed-use project and anticipates completing it by spring 2016. The development will have 321 apartments, a 315-car parking garage, and 24,000 square feet of office and commercial space that is 90% pre-leased to Independence Blue Cross and CVS, the article noted.
As part of the arrangement, Brandywine contributed the land to the development team, and it will manage the retail and parking components of the project. Barton Partners designed the building. Hunter Roberts Construction Group is the construction manager.
To read the article, please go to bit.ly/1x4PAjy.
500 Walnut Wins Conceptual Approval
The Philadelphia Art Commission on November 5 granted conceptual approval for a 26-story residential tower planned for Fifth and Walnut Streets by developer Tom Scannapieco and designed by architect Cecil Baker, PlanPhilly reported.
The building will be a glass tower with residential units of approximately 4,000 square feet on floors five through 13, and units of approximately 8,500 square feet on the floors 14 through 26. Ground-floor retail will anchor the corner of Fifth and Walnut. A parking garage will be fully automated.
The project already has received zoning approval and the Art Commission is expected to vote on final approval before the end of the year, the article noted.
If the project is approved, groundbreaking is scheduled for spring 2015, with completion expected by 2017.
To read the article, please go to bit.ly/1z3fUd9.
Eds and Meds News
Jefferson and Abington Health Plan to Merge
Thomas Jefferson University, Jefferson Health System and Abington Health signed a letter of intent on October 29 to merge, a move that would create the region's largest healthcare provider, with five hospitals and a geographically diverse network of ambulatory-care centers in southeastern Pennsylvania and South Jersey, the Philadelphia Business Journal reported. Dr. Stephen Klasko, Jefferson's President and CEO, will serve as President and CEO of the combined organization.
The combined group last year handled 84,000 hospital admissions, 1.1 million outpatient visits, and nearly 249,000 emergency room visits.
Jefferson is the parent company for Thomas Jefferson University Hospital, Methodist Hospita, Jefferson Hospital for Neuroscience, and the Sidney Kimmel Medical College. Abington Health is the parent for Abington Memorial Hospital and Lansdale Hospital, both in Montgomery County.
The combined number of employees in the two health systems is more than 13,000. The merger is expected to be completed in 2015.
To read the article, please go to bit.ly/1sLO4fU.
State Awards Grant for Drexel’s 30th Street Station Plan
Drexel University President John A. Fry on October 30 announced that the university had received a $2.5 million award from the Commonwealth of Pennsylvania to support the Philadelphia 30th Street Station District Plan, which aims to create a roadmap for an Innovation District with transportation and commercial development at 30th Street Station and its environs and includes the possibility of developing air rights above the rail yards.
The master plan is being developed by Skidmore, Owings & Merrill LLP, Parsons Brinckerhoff, OLIN and HR&A Advisors. The process launched in summer of 2014, with completion expected by fall of 2016.
In addition to the Commonwealth, funding for the plan has been provided by Drexel and Brandywine Realty Trust. Amtrak is overseeing the project team and managing coordination among the various stakeholders.
To read the announcement in Drexel Now, please go to bit.ly/1t8j6yB. (Other recipients are mentioned in the item below under Transportation.)
In other news from Drexel, the university has opened a $3.7 million outpatient-care and research center, Parkway Health & Wellness, on the second and third floors of Three Parkway at 1601 Cherry Street, the Philadelphia Business Journal reported on November 4.
The center will offer primary care services, serve as a faculty practice site, and provide clinical training for students in Drexel's College of Nursing and Health Professions.
Research activities will center on the biomechanical aspects of back and shoulder pain, different treatments for osteoporosis, depression and breast cancer survivors, and music therapy for chronic pain.
To read the article, please go to bit.ly/10tITuy.
Temple Presents New Master Plan
Temple University on October 31 made public its master plan that calls for a new library, an interdisciplinary science building, and a full city block of green space, The Philadelphia Inquirer reported.
The library, which will be built with $140 million in state aid and $50 million in university money, is to be completed within the first five years of the 15-year plan. The new structure will include a "robotic text-retrieval system" in which students order a book online and a robot goes into the stacks to get it. The Paley Library will remain, but will become a welcome center, with a cafe, classrooms, and gathering spaces.
An expansion of the College of Engineering and a new home for the College of Public Health, to be located at Cecil B. Moore Avenue and 12th Street, also would be undertaken within the first five years, the article noted, though the large green space would not.
Community and town hall meetings are being scheduled. An updated plan incorporating neighborhood input will be considered for final approval by the board of trustees in December.
To read the article, please go to bit.ly/1E7T3QD.
Residential Market News
Regional House Prices Up, But Lag Behind Those in City
As prices moderated in the July through September period, Philadelphia performed better than surrounding suburbs. The typical Philadelphia-region home that sold increased in value by only 0.7% during the third quarter of 2014, following a particularly strong second quarter in which average prices grew by 4.9% in the region, according to the third quarter regional housing report of Kevin C. Gillen, Senior Research Consultant at the Fels Institute of Government, and released on October 28. This contrasts with an increase of 1.4% in the third quarter for the average house value in the City of Philadelphia, following a 6.3% appreciation in the second quarter.
But the moderation in price may be a result of increased volume, as the number of homes sold continued to grow significantly in the third quarter after running well below average for most of the last five years. Just over 18,300 homes sold, up from 16,000 in the second quarter, up significantly from 11,000 this past winter.
The average number of days it takes for a listed home to sell in the Philadelphia region continues to hover near its post-recession low of just over 70 days. Homes in the City of Philadelphia sold on average in 68 days.
In the third quarter, there were 241 home sales at a price of $1 million or more, up from 184 such sales in the previous quarter, and tied with the all-time record of 241 million-dollar sales that occurred in 2006.
To read the report, please go to bit.ly/1skzHjP [PDF].
To view the charts, please go to bit.ly/1xlloyP [PDF].
PGCB Sets Meeting on Second Casino License
The Pennsylvania Gaming Control Board (PGCB) will conduct a public meeting in Room 201 at the Pennsylvania Convention Center at 1:00 p.m. on Tuesday, November 18, to award a license for Philadelphia's second casino, The Philadelphia Inquirer reported on Friday.
Two of the four remaining proposals are in Center City: Bart Blatstein's Provence at 400 North Broad Street, and Ken Goldenberg's Market8 at Eighth and Market Streets, but the Inquirer story highlighted rumors that the license would be awarded to Live! Hotel & Casino, a joint venture of The Cordish Companies of Baltimore and Greenwood Gaming and Entertainment, Inc.
Meanwhile, SugarHouse Casino has renewed its legal challenge to the awarding of a second casino license in the city, the article noted, and the casino has asked the PGCB to reopen the record to consider post-December 2013 information. Four casinos in Atlantic City have closed since then.
To read the article, please go to bit.ly/1oCxqEe.
Hudson Hotel Headed for Center City
City Councilman Kenyatta Johnson on October 30 introduced Bill #140858, which would rezone the block bounded by 16th, 17th, Chancellor, and St. James Streets to allow for the development of a $125 million boutique 12-story Hudson Hotel. The original Hudson Hotel is in Manhattan.
The hotel will contain 300 rooms and 40 executive suites and is being designed by DAS Architects. The penthouse floor will house an exclusive dining venue with panoramic city views, and two stories of luxury retail shops are planned. All parking spaces at the hotel will be underground.
The Philadelphia City Planning Commission (PCPC) is expected to address the zoning issue at its November meeting. If PCPC approves the plan, it will proceed to a hearing in Council's Rules Committee, with the aim of having it approved by the end of the year, the article noted.
The hotel is expected to open in 2016.
To read the PlanPhilly article and view a rendering, please go to bit.ly/10FKUof.
To read the bill, please go to bit.ly/10aCtQN.
Bicycle Commuting Increases Dramatically in Center City
During the past two years, the number of bicyclists traveling northbound into Center City increased 33.4%, based on a new survey conducted by the Center City District. An average of 1,165 riders entered downtown at Spruce Street in the hour between 8:00 a.m. and 9:00 a.m. on the northbound streets between Third and 22nd Streets in mid-September, up from 873 in 2012.
The rise in the number of bicycle commuters can be attributed in part to gas prices that have remained consistently above $3 per gallon since January 2011, neighborhoods surrounding Center City growing in numbers of young people, and more amenities such as bike storage being offered at the workplace.
To read the 2014 edition of Center City Reports: Bicycles, produced by the Center City District and the Central Philadelphia Development Corporation, and released on October 27, please go to centercityphila.org/docs/CCR14_bicycles.pdf [PDF].
Mayor Establishes Bike Advocacy Board
Mayor Michael A. Nutter on November 5 signed an Executive Order establishing the Philadelphia Bicycle Advocacy Board, which will advise the Mayor on ways to promote and protect recreational and professional cycling in the City of Philadelphia.
The Philadelphia Bicycling Advocacy Board will advise the Mayor on a variety of issues, from public policies that affect cyclists, to fostering volunteer efforts that promote cycling and maintain cycling trails, and encouraging private-sector support for cycling.
To read the press release, please go to bit.ly/1GtAus5.
PennDOT Announces Multimodal Grants
Eighty-six projects in 35 counties, including 10 projects in Philadelphia County, have been awarded grants to improve safety and mobility. The funding comes from $84 million in Multimodal Transportation Fund investments from Act 89, the state’s transportation plan, PennDOT announced on October 28.
The projects require a 30% match from local sources.
The Philadelphia projects in Center City and nearby neighborhoods are: Delaware River Waterfront Corporation, $200,000 for pedestrian and bicycle facility improvements on Spring Garden Street between Columbus Boulevard/North Delaware Avenue and Second Street; Schuylkill River Development Corporation, $1.7 million for the extension of the Schuylkill River Trail; City of Philadelphia Mayor’s Office of Transportation and Utilities, $1.5 million to complete lighting improvements for a 40-block grid of streets directly surrounding the Pennsylvania Convention Center; Drexel University, $2.5 million for the Philadelphia 30th Street Station District plan; Maritime Exchange for the Delaware River and Bay, $100,000 to upgrade software; and University City District, $51,378 to construct a new multimodal hub at the 40th Street Trolley Portal.
For more information about the program, please visit bit.ly/1wP23Xp.
SEPTA and Union Reach Labor Agreement
SEPTA and union negotiators on October 31 reached a two-year agreement that averted a strike and gave workers a 5% raise over the life of the contract, The Philadelphia Inquirer reported.
The agreement awaits approval by the SEPTA board and the membership of Transport Workers Union Local 234, the largest of SEPTA’s 17 unions.
The deal affects 5,000 bus drivers, subway and trolley operators, cashiers, and mechanics, represented by TWU. They had been working without a contract since March and April, when the previous contracts expired.
By agreeing to a two-year deal instead of a five-year agreement, SEPTA and the union were able to postpone decisions on pension and healthcare issues, which had been major sticking points, the article noted.
To read the article, please go to bit.ly/1zyADIZ.
Project Will Improve Traffic Flow in Center City
The City of Philadelphia Streets Department announced that it was initiating on October 27 the construction of the Traffic Signal Improvement Project, which will take two years to complete and will cover Callowhill Street south to Market Street, and from Broad Street east to Second Street in Center City. The overall goal of the project is to improve roadway and traffic safety for both motorists and pedestrians, according to the Streets Department’s press release.
The City will replace all traffic signal equipment at 16 intersections, install a new traffic signal at 10th and Filbert Streets, traffic management cameras at 15 intersections, and fiber optic interconnect between the intersections. The project also includes the installation of ADA compliant curb ramps in the designated area.
Construction is expected to be completed by summer 2016. The project’s cost of approximately $10.6 million is being 80% funded through a federal grant and 20% with City Capital funds.
To read the press release, please go to bit.ly/1xZBAWC.
Discussion on Options for Northeast Corridor
Federal Railroad Administration (FRA) planners have refined their choices for the future of the Northeast Corridor's passenger rail service and have outlined four broad alternatives for upgrading the corridor over the next 25 years, The Philadelphia Inquirer reported on November 6.
Options include maintaining the status quo; increasing the capacity of train service to match population growth; increasing capacity to grow ridership and building a new station in Center City Philadelphia; and building a new high-speed track adjacent to current tracks and dramatically decreasing the amount of time trips require.
The FRA is holding a series of "open house" meetings this month in major corridor cities and will be in Philadelphia on Wednesday, November 19, from 4:00 p.m. to 7:00 p.m. at SEPTA headquarters, 1234 Market Street.
Any action to implement the FRA's plan would require approval and financing from Congress.
To read the Inquirer article, please go to bit.ly/1vVcc1H.
To read the FRA report, please go to necfuture.com.
Parks and Open Space News
FrostFest at Sister Cities Park
FrostFest, the Center City District’s celebration of wintertime and holidays, comes to Sister Cities Park, 18th Street and Benjamin Franklin Parkway, on three Saturdays in December – December 6, 13, and 20, from 10:00 a.m. to 2:00 p.m.
Come celebrate with music, family-friendly activities, free carriage rides around the park, ice carving demonstrations, a chance to see Santa Claus, and sweet treats from Logan Square Café. Among other activities will be the Franklin Institute Traveling Science Show – Hot and Cold; Costumed Carolers from Dickens' A Christmas Carol at the Walnut Street Theatre; and crafts from the Philly Art Center.
In addition, there will be coloring sheets from Disney On Ice presents Frozen presented by Stonyfield YoKids Organic Yogurt, and a chance to win a family four-pack of tickets to the show at the Wells Fargo Center, December 25 through January 4.
All visitors also will receive a special discount coupon to Center City’s newest “ice” attraction, the Rothman Institute Ice Rink at Dilworth Park.
For more information, please go to sistercitiespark.org. For a recent article in the newsletter of the International Downtown Association about the evolution of the CCD into an organization that manages parks, please go to bit.ly/1xdh8ol.
Council’s Handing of PGW Proposed Sale Creates Outrage
After months of refusing to introduce a bill that would allow public hearings on the sale of the Philadelphia Gas Works (PGW), City Council President Darrell L. Clarke on October 27 notified the Nutter administration by letter that City Council would not even hold hearings on the proposed $1.86-billion sale of PGW to UIL Holdings, a utility company based in New Haven, Connecticut. As the sale needed council approval, Clarke’s move has put the whole deal in jeopardy. (bit.ly/1008JGp)
Council’s handling of the PGW proposed sale set off a series of very strongly worded editorials. The Philadelphia Tribune’s editorial, for example, led with this statement: “City Council members abdicated their responsibility by killing the proposed sale of Philadelphia Gas Works (PGW) without holding a public hearing or vote on approval of the proposed sale.”(bit.ly/1AbBCA9)
The Philadelphia Inquirer called Clarke’s move “an exercise in sheer power” and asked why Council members spent almost half a million dollars for a consultant’s study, if they had no interest in the deal. (Some council members had not read the consultant’s report at the time they voted.) (bit.ly/1srXdu4)
The Committee of Seventy issued a statement saying the “action violates every principle of transparent and effective governance” and that killing the deal without a public hearing was “an affront to the taxpayers of Philadelphia.” (bit.ly/10qxhJ2)
In general, the labor unions supported Council’s action. (bit.ly/1sdpSUF)
PGW has spent more than $2 million on financial, legal, and communications consultants, to organize an auction supervised by investment bankers to attract bids from more than 30 potential buyers.
UIL has spent $21.3 million on costs related to its anticipated purchase of PGW, and will decide within two weeks whether it will terminate its agreement with the City to buy the utility, The Philadelphia Inquirer reported on November 5. (bit.ly/1tIgbSD)
City Council will hold its own hearings on PGW on November 13 and 14. Those hearings will overlap with similar hearings set up by the state Public Utility Commission. (bit.ly/10RYqoX)
Rothman Institute Ice Rink to Open at Dilworth Park on Friday
The new Rothman Institute Ice Rink at Dilworth Park will open to the public this Friday, November 14, at noon, with free skating until 3 p.m. It will remain open seven days a week through February 22.
Admission will be $3 for children, ages 10 and under, and $4 for adults. Skate rental will be $8. The Rothman Institute Ice Rink will be open to the public Monday through Thursday, 3:00 p.m. to 9:00 p.m.; Friday, 3:00 p.m. to 11:00 p.m.; Saturday, 11:00 a.m. to 11:00 p.m.; and Sunday, 11:00 a.m. to 8:00 p.m. The Rothman Institute Ice Rink will be open on all holidays. A four-week Learn-to-Skate program will be offered on Sunday mornings at 9:30 a.m. and 10:15 a.m.
The Rothman Institute Ice Rink at Dilworth Park will be operated and managed professionally by Rink Management Services Corporation (RMSC) of Mechanicsville, Virginia. RMSC was competitively selected by the CCD and operates 33 ice rinks in 17 states and Washington, D.C. Center City District staff and RMSC will program a range of events at the rink that will offer entertainment and fun for people of all ages. RMSC also will offer birthday party packages and group sales discounts.
VISIT PHILADELPHIA™, which promotes Philadelphia to 39 million annual visitors to the region, is pleased to include the Rothman Institute Ice Rink at Dilworth Park as one of the city’s outstanding New Winter Attractions.
Both PNC and 6abc (WPVI) have provided additional generous support for the Rothman Institute Ice Rink.
For more information, please visit dilworthpark.org/rothmanicerink/.
CPDC Young Professionals: Imagine, Network, Be Inspired
Young CPDC professionals are invited to attend a panel discussion and networking reception on Wednesday, November 19, at 5:30 p.m. at Morris Café in the United Plaza building, 30 South 17th Street (entrance on 17th Street, between Market and Chestnut Streets).
The topic of the panel discussion will be Millennials & Young Professionals: What Impact on Local Elections in Philadelphia? What is the potential impact of Millennials and Young Professionals on the 2015 Mayoral and Council primary elections in Philadelphia?
Paul R. Levy, President and CEO of the Center City District, will moderate a panel with Neil Oxman, founder of The Campaign Group and principal media architect of two Presidential primary campaigns and behind the scenes of dozens of candidates elected to city, statewide, and federal offices; and Steve Huntington, Executive Director of Center City Residents’ Association and Chairperson of the Philadelphia Crosstown Coalition, a federation of 20 civic associations in Greater Center City.
Enjoy complimentary appetizers along with a wine-and-beer open bar.
As a benefit of your CPDC membership, please forward this invitation to young professionals in your office.
Please RSVP to firstname.lastname@example.org by 12:00p.m., Thursday, November 13.
GPCC Issue Forum: Ensuring a Well-Educated Workforce
The Greater Philadelphia Chamber of Commerce launched in July the Roadmap for Growth campaign designed to spark a broad, civic conversation about job creation, economic growth, and the next set of elections for Mayor of Philadelphia and City Council.
The first Issue Forum, “Ensuring a Well-Educated Workforce for Philadelphia,” will be November 19, from 5:00 p.m. to 7:00 p.m. at Morgan Hall, Temple University, 1601 North Broad Street (at Cecil B. Moore Avenue).
Each partner organization will receive one free ticket to the Issue Forum. You can use the code “FORUM1” to register and receive your complimentary ticket.
To register, please go to bit.ly/1tN0ny5.