Office Sector News
New Comcast Tower Approved by PCPC
The Philadelphia City Planning Commission (PCPC) on February 18 voted unanimously to recommend five bills needed for the development of Comcast's proposed $1.2 billion Innovation and Technology Center at 18th and Arch Streets, PlanPhilly reported. On February 26, the bills were approved by two City Council committees and could come up for a vote before the full Council this week. The project will also need approval from the Civic Design Review committee.
The bills, introduced on January 23 by Councilman William K. Greenlee on behalf of Council President Darrell L. Clarke, are: Bill #140003, bit.ly/1avBAHn; Bill #140004, bit.ly/1bmKPnP; Bill #140005, bit.ly/1avAN9t; Bill #140006, bit.ly/1cbhEYT; Bill #140007, bit.ly/1g9cFvm; Bill #140008, bit.ly/1fbYH97; Bill #140009, bit.ly/1jK9Kay.
Construction is expected to begin this summer and to be completed by the end of 2017. It will include a 222-room Four Seasons hotel, two restaurants, and a water-and-glass sculpture inside the main entrance facing 18th Street.
The project also entails the extension of the SEPTA regional rail concourse across 18th Street, for which the state and city have contributed a combined $40 million dollars, according to the article.
The new building will include expansive parking for bicycles, with 175 spaces.
To read an article from PlanPhilly on the fast-tracking of approvals for the project, please go to bit.ly/1eAhp66.
National Economy Slows
After a strong third quarter in 2013, the national economy slowed at the end of the year, according to federal Commerce Department estimates, reports The New York Times. During third-quarter 2013, the economy grew at an annual pace of 4.1%; the third quarter had been projected to grow at 3.2%, but only grew at a rate of 2.4% in October, November and December. Despite the slowing, the Federal Reserve Bank is expected to continue easing back on stimulus efforts: nyti.ms/1eF8L6n.
Regional Economy Slips in February
The harsh winter weather negatively impacted regional nonmanufacturing activity during February with more firms (33.3%) reporting decreasing activity than increasing trends (26.2%), according to the Federal Reserve Bank of Philadelphia's Business Outlook Survey Nonmanufacturing for February.
Full-time employment increased at 14.3% of responding firms and decreased at 11.9%. New orders were positive as well, with 31.0% indicating an increase and 26.2% a decrease. Comments collected along with the survey indicated that weather seemed to be a factor, the report noted.
In the next six months, 83% percent of the respondents expect activity in the region to increase, while only 2.4% see business decreasing.
Pew Studies Middle-Class Philadelphia
The size of Philadelphia's middle class has stabilized over the past decade after a period of long decline and it is better educated, less blue-collar, and more diverse, albeit smaller, than the middle class of 1970, according to a new report by The Pew Charitable Trusts.
In 2010, 42% of the city's adults qualified as members of the middle class, as defined by household income, almost unchanged from 43% in 2000. In1970, the middle class comprised 59% of Philadelphia, and the city had 400,000 more inhabitants than it does now, the article noted.
The city's upper class became smaller after 1970 when that group represented 11% of the population, but from 2000 to 2010, that group rebounded so that it claimed 10% of the city's residents, up from 8% in 2000. However, the city's lower class grew from 30% of the total population in 1970, to 49% in 2000, and 47% in 2010, an increase of about 25%.
A Pew poll found the issues that continue to push the middle class out include crime, safety, and drugs (25% of middle-class residents), jobs and career issues (24 %), and schools (20%).
To read the report, Philadelphia's Changing Middle Class: After Decades of Decline, Prospects for Growth, please go to bit.ly/1hlK6Jp [PDF].
City Slips in Economic Vitality Rankings
In 2013, Philadelphia slipped 19 points to 109th of 379 metropolitan statistical areas in the 2013 Best-Performing Large Cities analysis, according to Best-Performing Cities 2013 – Where America's Jobs are Created and Sustained, released on December 5, 2013, by the Milken Institute. Philadelphia ranked 159th for job growth between 2011 and 2012. A brighter spot was Philadelphia's 2012 High-Tech GDP Concentration for 2012, in which the city ranked 42nd.
The Best-Performing Cities index was designed to measure which U.S. metropolitan areas are promoting economic vitality based on job creation and retention, the quality of new jobs, and other criteria. The index indicates that technology and energy are the biggest forces behind America's booming cities, with the top five cities enjoying vibrant tech economies.
Austin, Texas, ranked first; Provo, Utah, second; San Francisco, third, (up from 36th); San Jose, fourth; and Salt Lake City, fifth.
To view the report, please go to milkeninstitute.org/pdf/Best-Performing-Cities-Report-2013.pdf [PDF]. Printed copies are available for $20 at best-cities.org.
Luxury Apartments Coming to Broad and Chestnut
The residential portion of the Avenue of the Arts building at the corner of Broad and Chestnut Streets has sold for a reported $33 million, the Philadelphia Business Journal reported on February 24.
The buyers are MRP Residential, a division of MRP Realty of Washington, D.C., and Principal Real Estate Investors, who plan to redevelop floors 4 through 17, totaling 209,095 square feet, into 220 high-end apartments, the article noted. Ashkenazy Acquisition Corporation of New York, which bought the building in December 2004 for $45 million, was the seller.
The space is currently used as student housing by the Art Institute of Philadelphia. Jim Galbally of Jones Lang LaSalle arranged the transaction along with colleagues John Plower, Doug Rodio, Joe Garibaldi and Jim Vesey.
Construction is expected to begin late this year with completion targeted for 2016, according to the article.
To read the article, please go to bit.ly/1gx10SA.
Residential Tower Proposed for Lit Brothers Building
Brickstone Realty has proposed a $102 million MIC Tower—Mellon Independence Center Tower—that would rise 30 stories behind the restored Lit Brothers building at 719-721 Market Street.
Stantec Architecture of New York City has designed the building to defer to the existing Lit Brothers structure, and the addition would be set back 180 feet from Seventh, Market, and Eighth Streets, protecting Market Street views, according to an article in Hidden City Philadelphia. But The Philadelphia Inquirer reports that the architectural review committee of the Philadelphia Historical Commission suggested that the tower was too deferential and urged the designer to consider a bolder design.
A new basement and lobby would provide the residential component with an entrance, the ground floor would feature new retail, and the first five floors above it would be converted for office use. Above that, 29 floors of residences would rise to 410 feet, with a 19-foot screen masking the mechanical unit on top.
To read the Hidden City article, please go to bit.ly/1fdLAWH.
To read the Inquirer article, please go to bit.ly/1dTxsfW.
Eds and Meds News
Master Plan for Penn's South Bank Campus
The University of Pennsylvania on February 26 presented its master plan for 23 acres along the Schuylkill River that will serve as a business incubator and hub for innovation and will anchor the University of Pennsylvania's South Bank campus, the Philadelphia Business Journal reported on February 27.
The "Pennovation Center" will be built on land formerly owned by the DuPont Company in Grays Ferry and will provide cutting-edge facilities and professional services for the university's community of innovators.
The South Bank also will include the Penn Vet Working Dog Center, the Penn Dental Research Greenhouse, the Penn School of Arts & Sciences Bio Garden, and a "sustainable fueling station" for Penn Transit, the university buses already stored on the site, The Philadelphia Inquirer reported. To view the renderings and for more information, please go to pennconnects.upenn.edu.
Four Deals in the Works for School District Buildings
The Philadelphia School District announced on February 27 that it is negotiating four deals for closed school buildings, The Philadelphia Inquirer reported.
Anna Shaw Middle School, 5400 Warrington Avenue in Southwest Philadelphia, would be sold to Mastery Charter for educational use; Alexander Wilson Elementary School, 1300 South 46th Street in Southwest Philadelphia, to Orens Brothers Real Estate Inc. for retail and residential use; Stephen Douglas High School, 2700 East Huntingdon Street in Port Richmond, to Maritime Academy Charter School for educational use; and University City High School, Charles Drew Elementary, and The Walnut Center to Drexel University Development, LLC for residential, retail, office and educational uses.
These sales would net the district about $25 million, the article noted.
The School Reform Commission is required to sign off on the deals.
To read the article, please go to bit.ly/MznaKF.
Green Sworn In As Head of SRC
Former At-Large Councilman Bill Green on February 18th was sworn in as the new chairman of the School Reform Commission (SRC) and Farah Jimenez also has joined the five-person commission, The Philadelphia Inquirer reported. Jimenez is executive director of the People's Emergency Center in West Philadelphia.
Because Green held an at-large seat, Council President Darrell L. Clarke is not obligated to hold a special election to fill Green's seat, and the council president has not yet indicated his intent. KYW reported that should there be a special election, it most likely would coincide with the May 20th primary.
To read the Inquirer article, please go to bit.ly/1kgIe4n.
To read the KYW article, please go to cbsloc.al/1fr7XlF.
Beer Garden to Open Across from Liberty Bell
Chef/restaurateur Michael Schulson of Sampan in Midtown Village will open a 30,000-square- foot beer garden at Sixth and Market Streets in the Dow Chemical Building across from the Liberty Bell, Philly.com reported.
To be called the Independence Beer Garden, the outdoor restaurant is scheduled to open on July 4 and remain open seven months a year. It will have the positive impact of drawing visitors towards East Market Street. Groundswell Design Group will create the garden with pergolas, trees, and a tent. The space will also include outdoor sports and games, such as shuffleboard, the article noted.
To read the article, please go to bit.ly/1lljYl4.
Movie Theater Proposal Moves Forward
The Philadelphia Historical Commission Committee on Financial Hardship granted preliminary approval last Thursday to a Florida entertainment company, iPic, which plans to renovate the Boyd Theater at 1908 Chestnut Street as a high-end multiplex serving dinner and movies.
In reaching its decision, the Committee concluded that the existing movie house with one large screening room could not be redeveloped nor operated at a reasonable cost without substantial public subsidies.
New Hotel in Family Court Building
Mayor Michael A. Nutter on February 18 formally announced the selection of the Peebles Corporation and P&A Associates as the developers of a new hotel in the Family Court Building at 1801 Vine Street. The $85 million, 199-room Kimpton Hotel also will have 16,000 square feet (SF) of spa and fitness space, 14,000 SF of meeting and event space, and 5,800 SF for a restaurant and bar. It is expected to create more than 600 construction and permanent jobs.
The building is on the Philadelphia Register of Historic Places, and the planned redevelopment will preserve the building's 37 historic interior murals. The hotel will be particularly convenient for the arts and culture attractions along the Benjamin Franklin Parkway, and is across the street from Sister Cities Park at 18th Street and the Parkway.
To read the mayor's press release, please go to bit.ly/1dmDjKC.
To read The Philadelphia Inquirer article, please go to bit.ly/1msQ8ch.
SEPTA Considers After-Midnight Service
SEPTA is considering restoring after-midnight service on the Broad Street and Market Frankford Lines this summer because of the increased residential and nightlife activity in Center City, The Philadelphia Inquirer reported on February 22.
SEPTA would limit the added service to Friday and Saturday nights and possibly would extend the hours to 3:00 a.m. in a pilot program to measure use during those hours, the article noted.
SEPTA offered after-midnight service in the early 1990s, but discontinued it because of security and cost issues, according to the article. At the time, there were about 3,600 riders who were transferred to "night owl" buses that run between midnight and 5:00 a.m..
SEPTA general manager Joseph Casey cited changes in the city – new restaurants, residents returning – as the motivation for restoring the service.
A Philadelphia Inquirer editorial on February 26 endorsed the idea.
To read the Inquirer article, please go to bit.ly/1cVX2DY.
To read the Inquirer editorial, please go to bit.ly/1bOSocy.
Philadelphia Tax Burden Among Highest in U.S.
Philadelphia has the second-highest tax burden of any city in the United States, based on the report, Tax Rates and Tax Burdens in the District of Columbia — A Nationwide Comparison.
A typical family of three earning $50,000 per year pays $8,781, or 17.6%, in taxes. Bridgeport, Connecticut, has the highest taxes at 19.3%, while New York City ranked 19th, with 10.3% going to taxes.
When the salary is doubled to $100,000, Philadelphia ranks third on the list, paying $17,248 or 17.2 %, while New York City was 13th on the list, paying only 12.1%. Bridgeport remained first with 21.7%, with Milwaukee ranking second, paying 17.4%.
To read the report, please go to 1.usa.gov/Mdg6TR [PDF].
PGW Sale Moves Forward
UIL Holdings Corp. of New Haven, Connecticut is the City's preferred buyer for the Philadelphia Gas Works (PGW), reports The Philadelphia Inquirer. UIL has agreed to buy PGW, the nation's largest municipally-owned gas utility, for $1.86 billion, a price at the upper end of the range that the city's financial advisers estimated last year. After paying off PGW's debts, Mayor Nutter said the sale would provide at least $424 million, which the Administration has proposed to use to shore up the city's underfunded pension program and reduce the share of the City's budget which goes to make pension payments. But approval is far from certain, reports the Inquirer, noting that City Council is hiring consultants to help analyze the bid and examine alternatives to a sale.
Between 2010 and 2012, CPDC hosted several meetings at which experts who had handled asset sales in other cities shared their experience. One timely message from Chicago is that after they set aside the lion's share of sale assets for their stated purposes, smaller-scale, needed park, playground and infrastructure improvements across the entire city were also funded.
To read the Inquirer story, please go to bit.ly/1mQdL23.
Bill Would Shift More of Property Taxes to School District
On February 27, Councilwoman Maria Quinones Sanchez introduced Bill #140132 that would change the way property tax revenue is divided between the City and the Philadelphia School District. Currently, 45% of property tax revenue goes to the City and 55% goes to the School District. Sanchez's bill would change the real estate millage so that 40% of property tax revenue would go to the City and 60% would go to the School District.
Sanchez anticipates the shift could generate at least $50 million in additional revenue for the School District. Sanchez introduced similar legislation during the last session, but the bill was not passed into law. By reducing the amount municipal government gets from the real estate tax, the bill would likely reduce the City's ability to lower wage and business income taxes and would increase pressure on other taxes like Use and Occupancy.
To read the bill, please go to bit.ly/1mKHqJX.