Office Sector News
Occupancy Rate Steady in CBD
The occupancy rate in the Philadelphia CBD office market remained steady between 88.3% and 88.5%, and total average rents for the CBD were $24.69 per SF, according to The Flynn Company's 3rd Quarter Center City Commercial Real Estate News.
The quarter ended with 62,644 SF of additional office space occupied, in contrast with negative absorption of 250,000 SF in the second quarter. The positive turnaround can be attributed to Drexel University's taking 117,464 SF at Three Parkway, and The Carlyle Group leasing 30,000 SF at Two Commerce Square, according to the report.
Companies are continuing to focus on more efficient space, resulting in smaller offices and cubes, and support functions are being consolidated, the report noted. Also some employers are responding to employees' requests to be within urban, central markets. To read the leasing section of the report, please go to bit.ly/1dlPeO9 [PDF].
The sales portion of the report noted that the Dow Chemical building at Sixth and Market Streets recently sold to Keystone Property Group for approximately $45 million, or $128 per SF. Also, 1500 Spring Garden sold in November 2013 to Nightingale Properties of New York for approximately $185 million or $168 per SF. To read the sales report, please go to bit.ly/17NMYg2 [PDF].
Manufacturing Activity Remains Positive
Manufacturing growth in the region continued in November but did not match the more robust pace of October, according to firms responding to November's Business Outlook Survey, produced by the Federal Reserve Bank of Philadelphia.
The overall outlook has been positive for six consecutive months with the number of firms reporting an increase in new orders this month (34.9%) outpacing the 23.1% that reported a decrease.
Companies reporting an increase in full-time employment (12.5%) was slightly higher than those reporting a decrease (11.4%).
Firms' employment forecasts for the next six months remained optimistic, with more than one‐third expecting to add workers.
To read the report, please go to bit.ly/19KNSV1.
Waterfront Development Wins PCPC Approval
Waterfront Renaissance Associates' plan to build a four-tower, residential mixed-use development at Callowhill Street and Columbus Boulevard won approval from the Philadelphia City Planning Commission (PCPC) on November 19, PlanPhilly reported.
Construction on the first 292-foot tower of Renaissance Plaza is expected to begin in approximately one year. The first phase of development will include streetscaping, landscaping, a public green space, and lighting, the article noted.
Waterfront Renaissance Associates is an affiliate of Carl Marks Real Estate of New York City.
To read the article, please go to bit.ly/1cGRo5X.
Eds & Meds News
Buyers Sought for Shuttered Schools
The Philadelphia Industrial Development Corporation (PIDC) has announced that the School District of Philadelphia is seeking qualified buyers for its shuttered schools. An RFQ for offers to purchase the entire portfolio of closed and available properties has been issued for serious bids from credible and capable buyers, who can close the transaction by July 2014.
There are also five RFQs for specific properties/locations available for individual sale, to be conducted on the same timetable.
Responses are due December 17. To read the PIDC announcement, please go to bit.ly/17AOtvQ.
For more information on the sales, please go to philasd.org/real-estate/.
City Students Achieve More Despite Lack of School Funding
School District of Philadelphia (SDP) students achieved slightly better scores with far less funding than their peers in similar districts, but they were doing so despite a shortfall of adequate funds that was four times bigger than that of their nearest counterparts, according to a study presented to City Council's Committee on Education on November 20.
SDP's adequacy gap was $5,478. The adequacy gap for the school district's nearest peers in terms of math achievement was $1,396, the report noted.
The study found similar results in reading achievement.
The study was conducted by Matthew P. Steinberg and Rand Quinn, assistant professors in the Graduate School of Education at the University of Pennsylvania.
To read the Washington Post article about the study, please go to wapo.st/HZmjRi.
Restaurant Week Arrives in January
The next Center City District Restaurant Week will take place January 19 – 24 and January 26 – 31, 2014. More than 100 restaurants will offer a three-course dinner for only $35, and some of the restaurants also will offer a three-course lunch for $20.
For a complete list of restaurants, please visit centercityphila.org/RestaurantWeek, where you can make reservations using opentable.com. Also you can use the mobile website m.centercityphila.org to browse menus, get maps and make online reservations from any smartphone. Keep up with the latest Restaurant Week news on Twitter @PhilaRestWeek. Make your reservations early!
SugarHouse Revenue Rebounds in October
Revenue at SugarHouse Casino on the Delaware Riverfront increased substantially over September, according to the Pennsylvania Gaming Control Board.
In October, the casino took in $21,313,889, compared to September's $19,513,358. The Commonwealth's share of taxes was $5,733,352, compared to $5,414.321 in the previous month. The City of Philadelphia collected $712,332, compared to $665.763 in September.
To see all casino revenues, please go to bit.ly/16izgf9.
Minority Groups Support Market8 Casino Proposal
Four groups representing African American interests in Philadelphia announced they are supporting the Market8 Casino proposal, one of five projects competing for the city's second Category 2 casino license, The Philadelphia Inquirer reported following a news conference on November 19.
The groups supported Market8's developer Ken Goldenberg for setting "aspirational and attainable" goals for minority and female participation in the development and staffing of a new casino, with a goal of 40% to 45% for minorities and women in contracting and employment, and an operations goal of 24% of contracts to firms owned by women or minorities, with employment at 45% minorities, women, disadvantaged and disabled individuals.
To read the article, please go to bit.ly/1b8I2TN.
Arts & Culture News
Liberty Museum Receives Grant
The National Liberty Museum, 321 Chestnut Street, received a $2.5 million grant from the John Templeton Foundation to create an interactive and audio-visual exhibit for its entry way, the Philadelphia Business Journal reported on November 15. The exhibit will challenge visitors to "live like a hero" and be responsible stewards of the freedoms they have inherited, according to the article.
The grant also supports independent evaluation of the museum's education programs.
To read the article, please go to bit.ly/17J8Pjt.
New Management at Convention Center
The Board of Directors of the Pennsylvania Convention Center Authority (PCCA) announced on November 20 that it has officially signed a new contract with SMG to manage and operate the Pennsylvania Convention Center.
Lorenz Hassenstein will serve as General Manager for the facility and oversee the company's management and operations staff of approximately 85.
The Board has identified four areas to focus on to improve its ability to compete in the global convention and meeting industry: management operations, the existing labor supplier model, work rules, and billing transparency for customers.
SMG has more than 30 years of experience at more than 200 facilities and 72 convention centers, according to the press release. To read the complete announcement, please go to bit.ly/1cIkdPs.
For a story on how hospitality industry leaders have reacted to the management change, please go to bit.ly/1aMT7rR.
And for a commentary essay on remaining challenges on Market East, please go to bit.ly/IcYNR6.
GPTMC Changes Name To Visit Philadelphia™
The Greater Philadelphia Tourism Marketing Corporation (GPTMC), the region's official destination marketing organization, on November 11 announced it was changing its name to Visit Philadelphia™.
The name Visit Philadelphia™ focuses more on the relationship between the destination and visitor, according to the press release.
The organization changed its website name to visitphilly.com in 2010 and now is the most-visited destination website network of the 10 biggest cities in the U.S., the release noted.
The new name is in line with the industry trend of using action- and inspiration-oriented names that emphasize the destination.
To read the press release, please go to bit.ly/1bnR9y2.
Legislature Passes Transportation Bill
After a dramatic reversal, the Pennsylvania state legislature on Thursday passed HB 1060, which it voted down last Monday.
Governor Corbett is expected to sign today the $2.3 billion transportation bill, the state's largest transportation funding bill in 15 years. It will provide $1.65 billion for repairing bridges and roads and approximately $475 million for mass transit by 2018. Supporters of the bill heralded it as a major economic-development driver that will generate as many as 50,000 jobs.
The money will be raised by gradually removing the limit on the wholesale tax on gasoline (now capped at $1.25 per gallon, while the actual wholesale price is about $2.70 a gallon) and to eliminate the current 12-cent-a-gallon retail gas tax, according to The Philadelphia Inquirer. Within five years, if wholesalers pass on the full increase to consumers, the gas tax would increase by about 28 cents a gallon, to 59.2 cents a gallon, the article noted.
Other revenue will come from higher fees on licenses, permits, and traffic tickets, as well as registration fees for passenger vehicles, light trucks, and motorcycles. In addition, fines will be raised from $25 to $150.
To read the bill, please go to bit.ly/1aJcam0.
To read The Philadelphia Inquirer article, please go to bit.ly/I5SBur.
US Airways and American Airlines Merger Cleared
US Airways Group Inc. and American Airlines' parent company, AMR Corporation, reached a settlement in the U.S. antitrust lawsuit that was seeking to block the airlines' $17.2 billion merger, The Philadelphia Inquirer reported on November 12.
Under the settlement, the airlines will divest 52 takeoff and landing slots, known as slot pairs, at Reagan airport in Arlington County, Virginia, and 17 slot pairs at New York LaGuardia airport, as well as certain gates and related facilities to support service at those airports. The airlines also will divest two gates and related support facilities at Boston Logan International Airport, Chicago O'Hare International Airport, Dallas Love Field, Los Angeles International Airport, and Miami International Airport.
The divestitures will occur through a Justice Department-approved process after the merger closes.
The new American is still expected to generate more than $1 billion beginning in 2015.
To read the article, please go to bit.ly/1anioaN.
Renovations Complete at West Entrance of 30th Street Station
The west entrance of 30th Street Station, which has been closed for renovation for a year, reopened to travelers on Friday, The Philadelphia Inquirer reported.
Scaffolding will remain on much of the rest of the station as it awaits a $60 million renovation, not yet funded.
The $30 million Amtrak-funded project just completed included renovations to the plaza on the 30th Street side of the station and added improved lighting, parking, bike racks, outdoor seating, and a five-foot diameter medallion with the Amtrak logo and 20-inch bronze inlaid lettering spelling out "Philadelphia."
A Shift to Transit Commuting into Center City
The Delaware Valley Regional Planning Commission (DVRPC) released a new report in September, 1980 – 2010 Travel Trends in the Philadelphia Central Business District, which documents a decline in highway traffic coming into Center City and an increase in the use of public transit.
The report noted that more than 1.8 million people enter or exit Center City Philadelphia each weekday, with 67% traveling by automobile, 27% by public transit, 5% as pedestrians, and 1% on bicycle.
Between 2005 and 2010, highway travel to and from Center City declined by 9.3%, while public transit ridership to Center City increased by 3.2%, and regional rail trips to Center City increased by 15.7%.
The report also noted the Benjamin Franklin Parkway has 31,657 vehicles per day (vpd) and South Broad Street had 17,504 vpd.
To read the report, please go to bit.ly/HVfqkj [PDF].
For a detailed CPDC/CCD report on commuting by Center City residents and workers, please go to centercityphila.org/docs/CCR13_transportation.pdf [PDF].
Update on RideECO Monthly Cap
The Delaware Valley Regional Planning Commission's RideECO program is alerting clients that the monthly benefit may be lowered as of January 1, 2014.
In January 2013, the DVRPC began using the brand RideECO brand to offer and promote its long-time commuter benefit program. The program allows employers and commuters to save money by putting pre-tax dollars toward fares on public transportation. This year, commuters could save up to $900 per year, and employers also could save by reducing FICA taxes for each participating employee.
Due to the IRS's annual cost of living review, the benefit will be reduced next year, unless Congress passes new legislation to maintain the current level.
For more information, please visit rideeco.org.
Direct Flights to Edinburgh Coming in 2014
US Airways on November 18 announced that it would add daily nonstop service this summer between Philadelphia and Edinburgh, Scotland. The flights will be offered in 2014 between May 23 and October 1 on Boeing 757 aircraft.
Flights from Philadelphia will leave at 8:50 p.m. and arrive in Edinburgh the next day at 8:40 a.m. Flights from Edinburgh will depart at 10:50 a.m. and arrive in Philadelphia at 1:35 p.m.
To read the press release, please go to on.wsj.com/183qaJz.
Parks & Open Space News
Sister Cities Park Winterfest
On three Saturdays next month – December 7, 14, and 21, from 11 a.m. to 2 p.m., Sister Cities Park, 18th Street and Benjamin Franklin Parkway, will celebrate the holiday season with Sister Cities Park Winterfest!
The celebration will include visits with Santa, Christmas wreaths and garlands for sale from Urban Jungle, holiday food and drink, seasonal arts and crafts, holiday gift shopping for kids from Whole Foods Market, Callowhill, and festive performances and music.
The Center City District's partners are Urban Jungle, Walnut Street Theatre, Academy of Natural Sciences of Drexel University, and the Franklin Institute.
Sister Cities Park is maintained and programmed by the Center City District. For complete details on the park's events and schedules, please visit SisterCitiesPark.org.
Uncertainty Over Sale of Garage Beneath Love Park
Mayor Michael A. Nutter on Thursday sent a bill to City Council that would enable the sale of the parking garage under JFK Plaza at Love Park to InterPark Holdings of Chicago for $29.6 million and the improvement of the park on the surface. At least two Philadelphia firms submitted unsuccessful proposals. Under the agreement, the City would pay $16.5 million toward improvements in the park and would control the design, according to The Philadelphia Inquirer. The selected bidder will improve, own, and manage the garage. However, the bill has not yet been introduced by anyone on Council. The Nutter administration sought bids for the project over the summer, with the aim of getting Council to approve it in December before the six-week winter break. But Council has just two meetings in December, so the bill will not have time to navigate the process before the break, according to the article. Council President Darrell L. Clarke has expressed his support for selling some of the City's assets, including the aging garage, the article noted, so there is uncertainty about the cause of delay. To read the article, please go to bit.ly/1bP8Xz5.
Franklin Square's Holiday Light Show
Franklin Square, 200 North Sixth Street, opened its new Electrical Spectacle: A Holiday Light Show, on November 14.
Using 50,000 lights, the show uses a 20-foot kite structure with kite string and key, as a tribute to Ben Franklin's invention of electricity, and with a holiday soundtrack by The Philly POPS®, conducted by Music Director Emeritus Peter Nero.
The show runs from 4:30 p.m. to 8:00 p.m. every night except Thanksgiving and Christmas Day, through December 31.
In addition, during the same time period on Saturdays and Sundays through December 29, adults and children can ride the Bolt Holiday Express through the park.
For more information, please go to bit.ly/pP5XbN.
Long-Term Plan Presented For Baltimore's Inner Harbor
Baltimore city leaders on November 13 unveiled a long-term plan for upgrading the highly successful Inner Harbor, the Baltimore Sun reported. The plan calls for constructing new pedestrian bridges, adding a green park with gardens, playgrounds, and a performance space, creating an underground parking garage, and improving connections to the city. The green park would have amenities such as a kayak launch, bike share program, and an urban beach, featuring a floating swimming pool.
The plan, which could take 30 years to complete, has no precise timetable and no established costs or budget. The Inner Harbor, of which portions turns 40 this year, also needs upgrades to crumbling brick promenades, deteriorating bulkheads, and unreliable light fixtures.
In 2012, about 14 million people visited the Inner Harbor, the article noted. To read the article, please go to bsun.md/1btexu3.
Tax Lien Bill Passed
The state Senate on November 20 passed HB 388, introduced by Representative Cherelle Parker (D., Philadelphia), which allows the City of Philadelphia to place liens on any property in Pennsylvania owned by tax delinquents. When the property owner attempts to sell any of his/her property located within the state, the lien must then be satisfied.
The bill was passed in the Senate by a vote of 50-0 and now goes to Governor Corbett to be signed.
To read the bill, please go to bit.ly/15MYYMs.
Looking for New Startup Ideas
Mayor Michael A. Nutter on November 14 announced that Startup PHL is now accepting applications for the second round of Call for Ideas, a grant program to fund innovative proposals that support Philadelphia's startup ecosystem.
The Call for Ideas program provides small grants to organizations with ideas or initiatives that best meet the objectives of Startup PHL, which include increasing business and job creation in Philadelphia; enhancing collaboration between organizations that support entrepreneurs; fostering networks and creating space for entrepreneurs to develop businesses and connect with mentors, advisors, talent and capital; and continuing integration between Philadelphia's higher education institutions, students, and the startup community.
For application details, please go to startupphl.com.
To read the mayor's press release, please go to bit.ly/1d2cMHA.
Digital Divide Improves in Philadelphia
More than 8 in 10 Philadelphia adults (82%) now have access to the Internet through a home computer or a mobile phone, up from 76% three years ago, according to the latest poll from The Pew Charitable Trusts. Nationally, 85% of adults use the Internet.
However, only 54% of adults over age 65 in Philadelphia have Internet access and only 21% have cellphones with access to the Internet, compared with 65% of all adults in Philadelphia, the report noted.
Household income also affected Internet use, according to the report: 92% of the households with incomes of $100,000 or more had Internet. When the income was less than $30,000, Internet use dropped to 73%.
To read the report, please go to bit.ly/1fCl6vb.
The Central Philadelphia Development Corporation's (CPDC) Membership Meeting will be held Tuesday, December 10, at 8:30 a.m., in the Grant Room at the Union League, 140 South Broad Street.
The program will be "Projects in the Pipeline — Looking Forward to 2014."
What is the state of the downtown office market? Will we see new construction in 2014? Will there be a major resurgence of retail on East Chestnut and East Market?
While many developers are focused on the rental market, who is buying the new townhouses under construction in Center City? What are the long-term trends for downtown's live-work environment?
Panelists will focus both on current projects and look into their crystal balls for 2014: Wayne Fisher, Executive Managing Director, Newmark Grubb Knight Frank; John Connors, Managing Partner Brickstone Realty; and John Mangano, Regional President, Toll Brothers, Inc.
Business casual attire required.
CPDC members are encouraged to invite both young professionals and other members of their firms to attend this meeting. Please RSVP no later than December 4 to Carol Raffa, email@example.com or 215.440.5500.