Office Sector News
City Council Passes Bills for New Comcast Tower
On March 27, City Council passed the three remaining bills needed to enable the building of the $1.2 billion Comcast Innovation and Technology Center at 18th and Arch Streets.
The bills were introduced on January 23 by Councilman William K. Greenlee on behalf of Council President Darrell L. Clarke and addressed issues regarding the height of the building, the extension of the SEPTA regional rail concourse across 18th Street, and various other issues.
Bill #140003, bit.ly/1avBAHn, was passed by Council on March 13 and signed by Mayor Michael A. Nutter on March 21. Bill #140005, bit.ly/1avAN9t and Bill #140009, bit.ly/1jK9Kay, were passed on March 20 and are in the mayor's office awaiting his signature.
The remaining bills, Bill #140004, bit.ly/1bmKPnP; Bill #140007, bit.ly/1g9cFvm; and Bill #140008, bit.ly/1fbYH97; passed 15-0 on Thursday.
East Market Project to Begin This Summer
NREA Development Services, SSH Real Estate, Classic Management, Inc., and JOSS Realty Partners, LLC have teamed up to develop the $230 million first stage of East Market, a mixed-use development for the 1100 block of Market Street, The Philadelphia Inquirer reported on March 20.
The plans call for leveling the entire block, beginning this summer, in order to build two new retail buildings topped with apartments. Later, existing buildings south of Market will be renovated.
Retail stores are planned for the first floor of the nearby 12-story Girard office building, with the upper floors upgraded for office, hotel, or apartments, the article noted.
The development would help create an important connection between Independence National Historic Park and the Pennsylvania Convention Center. The entire project is estimated at $500 million and the architect is BLT.
To read The Philadelphia Inquirer article, please go to bit.ly/1fYA38D.
To read the Newsworks article, please go to bit.ly/OVjPay.
CHOP Plan Presented to PCPC
The Children's Hospital of Philadelphia (CHOP) on March 18 presented the Philadelphia City Planning Commission (PCPC) with its plans for a research and office facility at 700 Schuylkill Avenue along the eastern bank of the Schuylkill River, PlanPhilly reported.
Phase I of the project would include a 24-story office tower, which would accommodate CHOP's needs through 2022, the article noted.
The metal and glass building was designed by Pelli Clarke Pelli and Cooper Robertson & Partners, and would include several public and green areas. A pedestrian bridge is planned that would allow people to walk from the green areas across the CSX railroad tracks and connect to the Schuylkill Banks trail.
To read the PlanPhilly article and see a rendering, please go to bit.ly/1jnUWlB.
Manufacturing Improves in March
Manufacturing activity rebounded in March, according to firms responding to the Federal Reserve Bank of Philadelphia's monthly Business Outlook Survey.
New orders were stronger as 31.8% of the companies reported an increase, while 26% reported a decrease.
The number of employees rose slightly, as 16.7% of the reporting firms indicated they had expanded employment, while only 15% saw a decrease.
Looking ahead six months, more than half of the companies, 52.2%, expected business to improve, while 16.8% were anticipating a downturn.
To read the report, please go to bit.ly/1fVrfjO.
Nonmanufacturing Strong in March
The regional nonmanufacturing economy vigorously rebounded in March, according to responses to the Federal Reserve Bank of Philadelphia's survey of nonmanufacturing firms.
The regional index for general business activity was up for 52.5% of the reporting firms, while 9.8% reported decreased activity.
Sales/revenues rose for almost half of the firms (49.2%), and dropped for 18%. New orders rose for 41% of the firms and fell for only 16.4%.
Full-time employment was stronger, with 27.9% of companies reporting an increase and 16.4% indicating a decrease.
In the next six months, 85.2% of the reporting firms anticipated an increase in business, while only 1.6% expected a downturn.
Morr to Step Down from Select Philadelphia
Thomas G. Morr, who has served as president and chief executive of Select Greater Philadelphia since 2005, will leave at the end of June, the Philadelphia Business Journal reported on March 19.
Select Philadelphia is an affiliate of the Greater Philadelphia Chamber of Commerce, which has hired a consultant to evaluate Select and make suggestions about what to look for in the next leader.
To read the Business Journal article, please go to bit.ly/1m2MJk5.
Eds and Meds News
Jefferson Leases Former Restaurant Space
Thomas Jefferson University Hospital has leased the former Chops steakhouse space at Seventh and Walnut Streets to expand outpatient services, the Philadelphia Business Journal reported on March 28.
Jefferson has not yet finalized its plans, the article noted. The building at one time was home to the Philadelphia Savings Fund Society and has been through several restaurant incarnations in the last decade.
To read the article, please go to bit.ly/1g7L1Zp.
School District Changes Staffing Guidelines
In a major move to implement management and principal control of teacher selection, the Philadelphia School District on March 24 announced that it was implementing new guidelines for the 2014-15 academic year that end the practice of using seniority as the only factor in decisions concerning staffing in schools.
Also on March 24, the School District filed a 60-page motion asking the state Supreme Court to issue a "declaratory judgment" to affirm the District's legal right to make these changes. The School District has negotiated a new agreement with the union representing school principals. Contract negotiations with the Philadelphia Federation of Teachers have stalled.
The District also wants to contract out substitute teaching services, The Notebook reported.
To read the School District's press release, please go to bit.ly/1gxSW88.
To read The Notebook article, which details other changes, please go to bit.ly/1l0gx0H.
SRC Signs Off on Sale of Vacant School Buildings
The School Reform Commission (SRC) on March 20 signed off on the sale of eight closed buildings belonging to the Philadelphia School District, deals that will bring in about $30 million, The Philadelphia Inquirer reported.
Douglas High School will be sold to Maritime Academy Charter School for $2.1 million; Shaw Middle School to Mastery Charter for $2.7 million; Alexander Wilson Elementary to Orens Bros. Real Estate, Inc. for $4.6 million; Harrison Elementary to Independence Mission Schools for $1.4 million; and Childs Elementary to Metal Ventures Inc. for $1.2 million, according to the article.
The University City, Drew Elementary, and Walnut Center buildings in West Philadelphia will be bought by Drexel University Development for $25.1 million.
The sales will gross over $37 million, but fees will cut into the district's profit, the article noted.
To read the article, please go to bit.ly/1mtiWnF.
SRC Forecasts $320 Million Funding Gap for District
The School Reform Commission (SRC) on March 27 adopted a budget for the fiscal year beginning July 1 for the Philadelphia School District, a budget that forecasts $2.8 billion in expenses and revenue that, at $2.5 billion, creates a $320 million shortfall, the Philadelphia Daily News reported.
The anticipated revenue assumes $120 million from an extension of the extra 1% sales tax approved by the General Assembly last year, but not yet adopted by City Council.
The district needs $100 million just to maintain staffing levels, while the full figure requested would allow the district to begin implementing the initiatives in Superintendent William Hite's Action Plan 2.0, focused on preparing all students to graduate prepared for college and careers.
To read the article, please go to bit.ly/1pgUODA.
New Dean for the Wharton School
Geoffrey Garrett, a former faculty member in the Wharton School's management department and currently dean and professor of business in the Australian School of Business at the University of New South Wales (UNSW), has been named dean of the Wharton School, effective July 1, the university announced on March 17.
Before joining UNSW, Garrett served as dean of the Business School at the University of Sydney and as founding CEO of the United States Studies Centre at the University of Sydney, an important hub that brought together scholars of business, economics, politics and the humanities to deepen understanding of contemporary American issues across Australia and the Pacific Rim.
To read the Penn News article, please go to bit.ly/1lIlFX4.
New President for CCP
Donald Generals Jr., the vice president for academic affairs at Mercer County Community College in West Windsor, N.J., has been selected as the next president of the Community College of Philadelphia (CCP), The Philadelphia Inquirer reported on March 25.
The appointment must be ratified by the college's board, which will meet on April 3. Generals is expected to begin his new job on July 1.
Generals previously held posts as provost of the Katharine Gibbs School in New York City, vice president for academic and student affairs at SUNY Rockland Community College in Suffern, N.Y., and dean of student and cultural affairs at Passaic County Community College, the article noted.
To read The Philadelphia Inquirer article, please go to bit.ly/1l1rLCd.
Rendell to Lead Bid for 2016 DNC
Former Governor Edward G. Rendell will lead a nonprofit that will be formed for the purpose of developing the City's bid for the 2016 Democratic National Convention (DNC), the Philadelphia Daily News reported.
Rendell held a press conference on March 21 to announce plans to raise $50 million to make the bid and host the event at the Wells Fargo Center.
Columbus, Ohio, is considered a front-runner for the convention because of that state's importance in presidential politics, but Atlanta, Cleveland, Orlando, San Antonio, Brooklyn, Pittsburgh and St. Louis are also possibilities, according to the article.
The City of Philadelphia will not have to put up any money for the 2016 bid, the article noted, and expenses would be covered by federal funding for security.
To read the Daily News article, please go to bit.ly/1dnJ0gQ.
SugarHouse Revenue Surges Upward in February
Revenue at SugarHouse Casino on the Delaware River increased substantially in February, according to the Pennsylvania Gaming Control Board.
In February, the casino took in $22,088,590, compared to $19,987,560 in January. The Commonwealth's share of taxes was $5,971,188 in February, compared to January's $5,328,389. The City received $750,157 last month, compared to $662,347 in January.
To see all casino revenues, please go to bit.ly/16izgf9.
DVRPC Approves Act 89 Funds for Two Center City Projects
The Delaware Valley Regional Planning Commission (DVRPC) voted March 27 to approve the first $99.7 million from Act 89 state transportation funding dollars, which will be used for fiscal year 2014, PlanPhilly reported.
The funds will be added to the Transportation Improvement Program (TIP) and bring $20.7 million to three existing Philadelphia projects: John F. Kennedy Boulevard bridges over 21st, 22nd, and 23rd Streets, and Spring Garden Street Bridge over the Schuylkill River, both in Center City; and the Holme Avenue Bridges over Roosevelt Boulevard.
The Spring Garden Street bridge will absorb $8,525,000 of the TIP funds, and work will begin this summer with completion due in fall 2015, according to the article. One lane of traffic in each direction and one sidewalk will remain open.
Another $500,000 will fund right-of-way and utility work at JFK bridges over 21st, 22nd and 23rd Streets and will add improved pedestrian connections from the bridge to street level. Construction for that project will begin in early 2015 and end in early 2016, the article noted.
To read the article, please go to bit.ly/1pjK7QI.
Amtrak to Buy New Acelas
Amtrak is in the process of buying new high-speed Acela trains that will be put in service on the Northeast Corridor (NEC) by 2018, The Philadelphia Inquirer reported. The new trains are expected to be more reliable and to carry more passengers, but will travel at the same speed, about 160 miles per hour on the NEC.
Amtrak is currently seeking proposals that are due by May 17, the article noted, with a contractor to be selected by year's end. Each train will cost approximately $50 million.
Amtrak is currently rebuilding a 23-mile stretch of track in central New Jersey that will permit 160-mile-an-hour travel, the article noted, as the trains now generally travel up to 150 miles per hour on a short stretch in New England, but the top speed between New York and Washington is 135 miles an hour.
To read the article, please go to bit.ly/1ly14rn.
Denver's Novel Approach to Building a Downtown Transit Hub
While new transit systems typically use financing from a combination of federal, state and local money, the city of Denver chose another path, analogous to Tax Increment Financing, and used $301 million in low-interest loans from the Federal Railroad Administration's Railroad Rehabilitation and Improvement Financing program (RRIF) and the Transportation Department's Transportation Infrastructure Finance and Innovation Act (TIFIA), according to an article in The Wall Street Journal on March 26. The loans will be repaid with money collected from property-tax gains from the blocks surrounding the hub.
In May, Denver will open its redeveloped downtown Union Station, which was converted into a multimodal, mass-transit hub where connecting multiple train and bus lines can bring hundreds of thousands of passengers into the downtown, the article noted.
The hub consists of a 22-bay, underground bus station, public plazas connecting bus and rail services, a light-rail hub, and Amtrak rail service. The historic train station is being renovated into a hotel, shops and restaurants and is set to open in July.
Development of the hub began in 2006 and since then, 1.5 million square feet of office space has been built, along with 2,500 apartments now under construction, in the district surrounding the hub.
To read the article, please go to on.wsj.com/1flKpzW.
New PATCO Schedule for Service Across Benjamin Franklin Bridge
PATCO changed its construction schedule on Friday, March 21. PATCO is now closing one track across the Benjamin Franklin Bridge from 10:00 a.m. on Fridays until 4:30 a.m. on Mondays. PATCO trains will run on a regular schedule from Monday morning rush hour through Friday morning rush hour.
At some point after Memorial Day, the PATCO train schedule will change again to include a seven-day, 24-hour, one-track closure - or track outage - which will continue for approximately two months.
PATCO began work in January on a two-year, $102.8 million track rehabilitation project of the bridge.
To see all PATCO schedules, please go to ridepatco.org.
Residential Market News
Edgewater Complex Sold
The Edgewater apartment complex and a companion development parcel at the northwestern edge of Center City, have been sold to an affiliate of JPMorgan for about $113 million, the Philadelphia Business Journal reported on March 18.
The complex includes 270 apartments in a 13-story building and 20 townhouses at 23rd and Race Streets. The adjacent site has been approved for the construction of a 22-story building with up to 240 apartments on an existing surface parking lot at the ramp off 23rd Street, the article noted.
In a press release, Holliday Fenoglio Fowler, L.P., which represented the seller, noted that “Center City Philadelphia is one of the most highly sought after markets on the East Coast right now.”
To read the Philadelphia Business Journal article, please go to bit.ly/PMqXXx.
To read the press release, please go to on.mktw.net/1j3wrrf.
Atlantic Building Under Agreement
Jefferson Apartments of McLean, Virginia, has agreed to buy the Atlantic Building at 260 South Broad Street for more than $50 million, the Philadelphia Business Journal reported on March 17.
The purchase of the 21-story, 330-square-foot building will be the company's first in Center City, the article noted. The company focuses on multifamily development in urban, transit-oriented markets.
Post Brothers bought the property for $27 million in July 2012 to redevelop it into residential use, according to the article.
To read the article, please go to bit.ly/1haF2aX.
City's Population Grows in 2013
The population of Philadelphia rose again in 2013, though at a slower rate than in previous years, according to the American Community Survey estimates from the U.S. Census, released on March 27.
Estimates show Philadelphia's population increased by 4,518 in 2013 – the seventh consecutive year of growth, with the population as of July 1, at 1,553,165, the article noted. According to census estimates, however, that increase is less than the 10,150-person increase in 2012 and the 12,491-person increase in 2011.
To read the article, please go to bit.ly/1pBSx4g.
Strong growth in Center City has helped drive this trend, offsetting population losses in other parts of the city. For an update on Center City trends, please go to centercityphila.org/docs/CCR14_housing.pdf [PDF].
Startup PHL Awards Announced
Mayor Michael A. Nutter on March 20 announced the winners of the second Startup PHL Call for Ideas Awards, which support entrepreneurs and improve student engagement with Philadelphia's tech community.
The awards foster and connect talent to thriving companies and demonstrate the City's support for entrepreneurs as they develop their businesses, the press release noted.
Among the awards was a $25,000 grant to the Philadelphia Fashion Incubator, a collaboration of the Center City District, the City of Philadelphia, and Macy's Center City, to create a series of monthly seminars, panels, and interactive workshops focused on the business of fashion for the design community.
Other recipients were: PennApps Fellows Internship Program, up to $25,000 to fund 10 internships; Zivtech Developer Boot Camp, $24,000 to teach a six-week developer class of 30; NextFab Fellows Coop Program, $25,000 to support four co-op fellowships; and Technical.ly / Philly Startup Leaders, $25,000 to create and execute a series of eight workshops to better connect the PHL tech community to students and universities.
To read the mayor's press release, please go to bit.ly/1fVAlgp.
February Tax Collections Mixed
Tax revenues for February totaled $469.7 million, a 2% decrease from the same month last year, according to the Office of the City Controller's Financial Forecast & Snapshot.
However, wage, earnings and net profit tax revenues, at $127.5 million, were up by 7%, and for the entire FY14 thus far, revenues were $1.1 billion, almost 3% higher than at this point in the previous fiscal year.
Monthly sales tax collections in February totaled $26.7 million, the highest one-month collection in the City's history for sales tax revenues, outpacing the previous highest collection by about $1.8 million, which was recorded last February.
To read the report, please go to bit.ly/P6rO4g [PDF].
April CPDC Meeting: 'State of Center City'
The Central Philadelphia Development Corporation's (CPDC) first Membership Meeting of 2014 will take place Tuesday, April 22, in the Grant Room at the Union League of Philadelphia, 140 South Broad Street. Registration and breakfast begin at 8:00 a.m., with the program beginning at 8:30 a.m.
Please join us for the release of the CCD/CPDC's 2014 State of Center City report and an accompanying panel discussion on the future of the downtown economy.
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 April 15, to Carol Raffa, email@example.com or 215.440.5500.
Two Panels to Discuss Region on the Rise
The Greater Philadelphia Chamber of Commerce (GPCC) will present two panels on Thursday, April 3, at the Radisson Plaza-Warwick Hotel Grand Ballroom, 220 South 17th Street. Registration is from 8:00 a.m. to 8:30 a.m., and the program is 8:30 a.m. to 10:30 a.m.
The first panel will delve into the opportunities presented as a result of proposed projects such as Comcast's new Innovation and Technology Center, development around University City, and the revitalization of Market East.
The second panel will provide real-time insight into the latest details on the $2.4 billion investment in Pennsylvania's infrastructure. Representatives from PennDOT and SEPTA will also be on hand to discuss local contracting and subcontracting opportunities.
The first panel on Real Estate and Construction will be moderated by Steven S. Lakin, President, General Building Contractors Association. Panelists will be David Adelman, President and CEO, Campus Apartments LLC; John Gattuso, Senior Vice President and Regional Director, Liberty Property Trust; John Grady, President, Philadelphia Industrial Development Corporation; J. Bradford McIlvain, Partner, Archer & Greiner; and Stephen P. Mullin, President and Principal, Econsult Solutions.
The second panel, on transportation infrastructure, will be Christopher J. Holliday, Senior Vice President, Philadelphia Office Manager, STV Group, Inc.; Jeff Knueppel, Deputy General Manager, SEPTA; Jim Ritzman, Deputy Secretary, PennDOT; and Joe Serbu, P.E., Senior Engineer Project Manager, Pennsylvania Turnpike Commission.
Ticket prices are $45 for members, $90 for non-members. Registration ends Wednesday, April 2. For more information or to register, please go to bit.ly/1o1XSWT.