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April 1, 2013 � Volume 16 � Issue 7 � A bi-weekly email news service

Development News
Groundbreaking for Southstar Lofts
Dranoff Properties on March 20 celebrated the groundbreaking of Southstar Lofts, a new high-end multifamily, mixed-use property at the corner of Broad and South Streets. Southstar Lofts will feature 85 luxury, loft-style apartments and 10,045 square feet of street-level commercial space.

Southstar Lofts will be the company's third major development on South Broad Street and its second "green" building on the Avenue of the Arts, following the Silver LEED certified 777 South Broad, which opened in 2011 on Broad Street between Fitzwater and Catharine Streets.

Southstar Lofts will be located next to the South Street subway stop, as well as two bus routes. Residents will also have access to the complimentary Dranoff Bike Share program, which will expand to Southstar Lofts upon completion of the building.

PCPC Approves Development Plan for Whole Foods
The Philadelphia City Planning Commission (PCPC) on March 19 approved a bill to rezone the area around 22nd Street and Pennsylvania Avenue to accommodate about 300 new apartments in a new development with a large Whole Foods on the ground floor and underground parking. The current site is zoned RM-4, and the bill, if passed by City Council, will make it mostly CMX-4, PlanPhilly reported. Developer Neal Rodin will team up with Toll Brothers, Inc. on the mixed-use project at the Best Western site in Center City.

The new 55,000-square-foot Whole Foods will replace the 30,000-square-foot store currently at 20th and Callowhill Streets, freeing up that site immediately behind The Barnes Foundation for new development.

Center City Home to 'Creative Class'
The top 10 "creative-class" locations in the Philadelphia Metro Area are in Center City, according to the Atlantic Cities' "Class-Divided Cities: Philadelphia Edition," ninth in a series of articles exploring demographics across America's largest cities, based on the work of Richard Florida.

While the metropolitan area claimed a 34.6% creative-class share, Center City neighborhoods ranged from 75.6% to 87.5%. The national average was 32.6%

The "creative class" is defined in Florida's work as people who work in science and technology, business and management, arts, culture, media and entertainment, law, and healthcare professions. They are skilled and highly educated, averaging $76,694 per year in wages and salaries, higher than the national average of $70,890.

In Center City, where 44% of Philadelphia's jobs reside, 74% of residents have at least a college degree, according to a CCD analysis, and the average household income in the core of Center City was $103,246 in 2011.

To read the Atlantic Cities' article, please go to bit.ly/XWB5xr.

Hospitality News
Convention Center Authority Issues RFP for Management Services
The Pennsylvania Convention Center Authority on March 28 issued a request for proposals (RFP) for managing and operating the Pennsylvania Convention Center (PCC). The winning proposer will be responsible for maintenance of the land, building, furniture, fixtures and equipment; local sales and marketing of the PCC as well as coordinating with the Philadelphia Convention & Visitors Bureau; management of various product and service providers; and scheduling, negotiating and licensing of events, among other things.

A proposers' conference and site tour is scheduled for Thursday, April 4, at 2:30 p.m. at the center. Deadline for the proposals is May 3 at 5:00 p.m. To read the RFP, please go to bit.ly/163Z0ex [PDF].

Eds and Meds News
New Charter School to Focus on Performing Arts
GlaxoSmithKline's former North American headquarters at 16th and Vine Streets has been sold to the nonprofit DeMedici Corporation II, which intends to open a new performing arts charter high school in the building, The Philadelphia Inquirer reported on March 28.

The nonprofit will pay $29 million ($129 per square foot) for the 225,000-square-foot building and make $10 million-$12 million in improvements, the article noted.

The school will be called String Theory High School and will specialize in arts, science and technology, and will be the first charter high school in the city with a focus on the performing arts. The school will open in the fall with 350 ninth graders and add a grade each year.

To read the article, please go to bit.ly/YKXRoB.

Universities Team Up in Center City
On March 18, leaders from the Pennsylvania State System of Higher Education (PASSHE) joined with Mayor Nutter to open the Philadelphia-Multi University Center (PMUC) on the third floor of the Mellon Independence Center, 701 Market Street.

Cheyney, East Stroudsburg and West Chester Universities will offer 11 undergraduate degree-completion programs as well as graduate degrees to adults living and working in the Philadelphia metro area. Areas of study will include business administration and public health, and graduate programs in special education and public administration. The center will expand its program offerings in Fall 2013 with a fourth partner school, Millersville University, with additional expansions after that.

To read the press release, please go to bit.ly/X5HAyC.

Economic and Employment News
Philadelphia Vital Statistics
For a snapshot of Philadelphia's static employment situation as well as other trend data, please see this month's Vital Statistics, compiled by CCD/CPDC staff: centercityphila.org/docs/CCRVitalStats0413.pdf [PDF].

Nonmanufacturing Firms Report Strong March
Nonmanufacturing business activity was robust in March, according to the Business Outlook Survey Nonmanufacturing conducted by the Federal Reserve Bank of Philadelphia. The diffusion index of general activity rose dramatically from 0 to 31 in just one month (The index has a maximum value of +100 and a minimum value of -100.).

More than one-fourth (28.6%) of nonmanufacturing companies surveyed saw an increase in the number of full-time employees, while only 2.4% saw a decrease. In spending on equipment and software, 38.1% of the responding firms indicated they were spending more, while only 7.1% said they were spending less.

Looking ahead, 73.8% of the respondents indicated they expected increased business activity over the next six months in both the region and at their companies.

Manufacturing Activity Improves Slightly
Manufacturers responding to the Federal Reserve Bank of Philadelphia's March Business Outlook Survey reported slight increases in business activity in the region in March.

The survey's broadest measure of manufacturing conditions, the diffusion index of current activity, moved into positive territory, from a reading of -12.5 in February to +2.0 in March (The index has a maximum value of +100 and a minimum value of -100.).

While 16.7% of the firms reported an increase in the number of employees, 14.1% indicated they had fewer employees. The number of shipments improved, with 24.9% of the firms reporting an increase and 21.5% reporting a decrease.

Predictions of future conditions were mixed but continued to reflect general optimism about growth over the next six months.

To read the report, please go to bit.ly/YqMR2G.

Retail News
Privatizing Alcohol Sales Passes House
The Pennsylvania House of Representatives on March 21 passed HB 790 by a vote of 105-90. The bill was introduced by House Majority Leader Mike Turzai (R., Allegheny) and provides for the gradual phasing out of state-run liquor stores and for the sale of liquor licenses to the private sector.

Beer distributors, supermarkets, big-box stores and gas stations, in addition to smaller private stores, would be allowed to sell beer, wine and liquor, depending upon the licenses they purchase. The bill provides for 1,200 wine and spirits retail licenses that will first be offered to beer distributors, then after 12 months, to the general public at double the cost to the distributor. In addition, the new law would allow for out-of-state purchases of alcohol so long as Pennsylvania taxes were paid.

The legislation would create a Transition Assistance Committee to help displaced State Store employees with their search for new employment.

The bill now goes to the state Senate. To read the bill, please go to bit.ly/XKeyAD.

Gaming News
SugarHouse Revenues Improve in February
Revenue at SugarHouse Casino on the Delaware Riverfront rose in February after a sluggish January, according to the Pennsylvania Gaming Control Board.

In February, the casino took in $23,829,862, compared to January's $22,074,983. The Commonwealth's share of taxes was $6,537,867, compared to the $5,929,037 collected in January. The City of Philadelphia collected $806,308 in taxes in February, compared to $737,226 in January.

To see all casino revenues, please go to bit.ly/Smpoyp.

Transportation News
SEPTA Proposes $1.32 Billion Budget
SEPTA has proposed a $1.32 billion operating budget for Fiscal Year 2014 (FY14). The budget assumes a $24 million increase in revenue from higher fares that are to go into effect July 1, when the new fiscal year begins, coupled with a $38 million increase in costs, including $34 million more for labor and benefits. While revenue from riders is expected to increase, SEPTA is anticipating a 2% decrease in ridership, due to the higher fares.

Capital projects have been budgeted for $308 million, using a combination of federal, state, city and county funds. In comparison, the capital budget for Washington, D.C.'s Metropolitan Area Transit Authority is $997 million. Boston's Massachusetts Bay Transportation Authority has budgeted $815 million, while Chicago's Regional Transportation Authority is planning to spend $1.7 billion on capital projects.

In Philadelphia, SEPTA provides a network of 86 subway, subway-elevated, trolley, trackless trolley and bus routes. SEPTA will hold a series of hearings on the proposed budget at various locations, including one in Center City on April 17 at 11:00 a.m. and 5:00 p.m. at the SEPTA Board Room, 1234 Market Street.

To read the Fiscal Year 2014 Operating Budget Proposal, please go to bit.ly/YEMxh2. To read the Fiscal Year 2014 Capital Budget Proposal, please go to bit.ly/10iNc6c.

Parks and Open Space News
Flea Market in Sister Cities Park
The Center City District (CCD) is sponsoring the Sister Cities Park Flea Market at the park at 18th Street and Benjamin Franklin Parkway, on Saturday, April 20, from 9:00 a.m. to 5:00 p.m. Thirty vendors will participate offering antique and vintage merchandise. Milk & Honey Café will be open for coffee, lunch or snacks. Sister Cities Park is part of the Fairmount Park system and is managed and maintained by the CCD. Please visit SisterCitiesPark.org.

Government News
Bill in State Senate Would Lower Corporate Income Tax
On March 26, state Senator Bob Mensch (R., Bucks, Montgomery and Lehigh Counties) introduced SB761, which would lower the Corporate Net Income Tax in 2013 from 9.99% to 8.99%; to 7.99% for 2014; and 6.99% in 2015 and thereafter.

Known as the "Jobs Initiative Package," Mensch noted that Pennsylvania's tax policies have hurt job growth and rendered the state uncompetitive, and that the independent Tax Foundation ranked Pennsylvania 50th this year in business tax competitiveness for mature companies and 49th for new firms.

The bill was referred to the Finance Committee. To read the bill, please go to bit.ly/15VoJ8F.

Report Compares Philadelphia's Tax Sources to Other Cities
Philadelphia's tax burden on residents remains higher than most major cities and Philadelphia is far more dependent on taxing income than peer cities, according to the Pew Charitable Trust's Philadelphia 2013: The State of the City.

The share of household income paid in city wage, property and sales taxes did fall slightly from 2000 to 2012 (from 10.7% to 9.8%) for a family of four with an income of $60,000, due to decreasing wage tax rates and the failure of property assessments to keep up with changing market values.

The City of Philadelphia's largest source of revenue remains the wage tax, which provides 46% of the city's total income, while real estate taxes provide only 16% of local revenues. By contrast, Boston collects 80% of its revenue via real estate taxes and Phoenix gets 62% of its revenue from a sales tax and 19% from real estate taxes. Neither of the comparison cities has a wage or income tax, the report notes.

To read the report, please go to bit.ly/14lEfyk [PDF].

Region's Economic Vitality Ranks Low
The Philadelphia region ranked 72nd in March among the nation's 102 largest metropolitan areas on the American City Business Journals' On Numbers Economic Index, designed to measure economic vitality. The region had the same ranking in February.

Austin, Texas, came in first for the second straight month. Austin is the only market with growth rates of better than 3 percent in four key categories: private-sector jobs over the past year and the past five years, and personal earnings during the past year and past five years.

Other East Coast cities outperformed Philadelphia. Boston ranked eighth, New York City was 53rd, and Washington, D.C. placed 28th.

To see all the rankings, please go to bit.ly/16rxedK.

Schedule Set for Council Budget Hearings
Philadelphia City Council will continue budget hearings through May 6 for Fiscal Year (FY) 2014-2018 Five Year Plan, FY14 Capital Budget and Program, FY14 Operating Budget, City's Revenue Adjustments, and FY14 School District Budget and Tax Reauthorization.

On March 14, Mayor Nutter presented his $3.75 billion Fiscal Year 2014 (FY14) Budget and Fiscal Year 2014–2018 Five-Year Plan proposing a restart in wage tax reductions, taking the resident wage tax from the current 3.9% to 3.7% by 2018 and reducing the net income portion of the Business Income and Receipts Tax from 6.45% to 6.3% in 2018. The Mayor also introduced a 1.32% property tax rate to be implemented under his Actual Value Initiative, which is proposed to go into effect in 2014. City Council must approve the rate by June 30, as FY14 begins July 1. With the move to Actual Value assessments, the Administration has also proposed to reduce the Use & Occupancy rate from 5.51% to 0.92%.

To view the schedule of Council budget hearings, please go to bit.ly/YdjFg6.

To read the full Five-Year Plan and Budget, please go to phila.gov/pdfs/FiveYearPlanFY14-FY18.pdf [PDF].

City Tax Revenues Show Slight Improvement
City of Philadelphia tax revenues for February totaled $479.8 million, a less than 1% increase over February 2012, according to the Office of the Controller's Financial Forecast & Snapshot. Yearly collections thus far in Fiscal Year 2013 (FY13) have totaled almost $1.1 billion, a 4% increase over FY12.

Sales tax collection in February totaled almost $25 million, a 4% increase over the same month last year.

The report included a section on employment in Philadelphia and noted that the city had 2,600 more jobs in February than it did during February 2012. The "eds and meds" industry accounted almost entirely for the year-over-year gain, with 2,500 additional jobs. Government jobs accounted for the biggest loss, 2,300 jobs.

To read the report, please go to bit.ly/160yx1d.

Comments Open on Draft of Central District Plan
The City should build on recent investments in Lenfest Plaza, Dilworth Plaza, and Sister Cities Plaza, and continue to create a cohesive network of public spaces that provide programming that appeals to all groups, according to the Central District Plan, created by Philadelphia 2035, the Philadelphia City Planning Commission's long-range planning project. Philadelphia 2035 has released both the Draft Central District Plan and Draft Zoning Appendix, which offers zoning recommendations for all of Center City Philadelphia.

The Central District Plan calls for improvements to LOVE Park, Reyburn Plaza, Penn Center Plaza and City Hall Courtyard. In addition, the plan recommends improving connections to the burgeoning West Callowhill neighborhood, converting the Reading Viaduct into a park, revitalizing North Broad Street, and developing a new neighborhood around Franklin Square.

The public is invited to comment on the Central District Plan until Wednesday, May 15, by emailing Laura Spina, project manager, at laura.spina@phila.gov.

To read the Draft Central District Plan, please go to bit.ly/X9OzaC [PDF].

To view the Draft Zoning Appendix, please go to bit.ly/16VEu2R [PDF].

Fund to Encourage Innovation
Mayor Nutter on March 19 announced a partnership between the Philadelphia Industrial Development Corporation (PIDC) and the First Round Capital investment firm, to invest in and manage the Startup PHL Seed Fund, a new effort by the City of Philadelphia and PIDC to increase the availability of investment capital for Philadelphia-based startups, entrepreneurs, and small businesses.

Both PIDC and First Round Capital will invest $3 million and First Round Capital will manage the fund, but will not receive a management fee.

Six local organizations were chosen from 115 applicants for Startup PHL grants. They are: Ben Franklin Technology Partners/Campus Philly - $25,000; The Enterprise Center, Center for Culinary Enterprises, Philly Food Innovation Program - $15,000; Greater Philadelphia Chamber of Commerce – $18,400; PhillyCORE Leaders - $15,000; Startup Corps - $20,000; and VentureF0rth - $25,000.

To read the press release, please go to bit.ly/13bYQFV.

New Website to Track Potential PGW Sale
The City of Philadelphia and Philadelphia Gas Works (PGW) on March 22 launched exploringasale.com, a website that will track all aspects of the potential sale of PGW, including analyses, news reports, how a sale would affect PGW customers, employees and the business community, background material, and an FAQ.

The website has a section for submitting comments and asking questions or requesting that additional information be posted on the site.

A financial adviser last year estimated that a sale could net the city as much as $496 million after PGW's liabilities of about $1.3 billion were paid off, The Philadelphia Inquirer reported.

Naming a broker is the next step in the process of pursuing the sale.

Upcoming Events
Hearing Set for Bill Allowing Signs on Public Property
City Council's Rules Committee will hold a public hearing on Thursday, April 11, at noon, for Bill #130109, introduced by Councilman Bobby Henon, on behalf of Council President Darrell L. Clarke, on February 14.

The bill would amend the zoning code to allow for the placement of advertising on municipal properties such as city-owned buildings, trash trucks and other city vehicles, as a way of bringing in revenue for the city. A consulting firm hired by City Council estimated the advertising could bring the city $10 million annually.

Under Clarke's proposal, a committee would be established to help determine both the content and location of ads on city properties.

To read the bill, please go to bit.ly/YbC4Fk.

Retaining Families with Children in Center City
On Tuesday, April 16, at 4:00 p.m., the Central Philadelphia Development Corporation will hold its Membership Meeting at the Union League, Grant Room, 140 South Broad Street.

Guest speakers will be William R. Hite, Jr., Superintendent, School District of Philadelphia; and Christine Carlson, founder of the Greater Center City Neighborhood School Coalition.

As the number of school-age children increases in Center City and adjacent neighborhoods, how does the School District of Philadelphia, whose resources are challenged, work together with parents' groups and the business community to support neighborhood schools to keep families from leaving the city? Come hear Superintendent Hite speak about the challenges facing the School District and his plans for the District's future. Christine Carlson will follow with the Center City parents' perspective.
Business casual attire required. No denim.

CPDC members are encouraged to invite both young professionals and other members of their firm to attend this meeting. Please RSVP no later than Tuesday, April 9, to Carol Raffa, craffa@centercityphila.org or 215.440.5500.

Farnese Event Will Focus on Small Businesses
State Senator Larry Farnese will hold a networking and informational event, Business Leadership Series, Small Business Funding & Opportunities, on Thursday, April 18, from 11:00 a.m. to 1:00 p.m. at the Moore College of Art & Design, Great Hall, 20th Street and the Benjamin Franklin Parkway.

There will be two panel discussions. "Funding Options for Small Businesses" will be led by Anne Bovaird-Nevins, Senior Vice President, Marketing & Business Development, Philadelphia Industrial Development Corporation (PIDC).

"How to Succeed in the Government Market – a Small Business Perspective" will be led by M. Clyde Stoltzfus, Director, Government Marketing Program, University of Pennsylvania.

Lunch will be provided. Please RSVP to George Farrell at 215.952.3121 or gfarrell@pasenate.com.

Pedestrian and Bicycle Summit
On Tuesday, April 30, the Delaware Valley Regional Planning Commission (DVRPC) and the Philadelphia Mayor's Office of Transportation and Utilities (MOTU) will host the Greater Philadelphia Pedestrian and Bicycle Summit at 190 North Independence Hall West, Eighth Floor.

Attendance is limited and registration will be required. Details will be forthcoming. If you have questions, concerns or would like to be placed on the Summit's email distribution list, please contact Ariel Ben-Amos, at ariel.ben-amos@phila.gov or 215.686.9001, or Cassidy Boulan, at cboulan@dvrpc.org or 215.238.2832.