Office Sector News
Office Leasing Expected to Expand in CBD in 2017
In 2017's first quarter, the CBD attained an occupancy rate of 89.6%, with $30.39 average asking rent, according to JLL's Q1 2017 Office Insight: CBD. But Dow’s long-anticipated departure from its space at 100 Independence occurred in this quarter, contributing to the CBD’s negative net absorption of 89,482/sf of occupied space.
With 2,558,000 sf currently under construction and several million square feet up for renewal downtown, leasing velocity is expected to increase in the coming year.
In the Pennsylvania suburbs, the occupancy rate was 85.7%; average asking rent, $26.10; and negative absorption, 186,183 sf. Under construction is 540,845 sf of office space.
To read the report, please go to bit.ly/2nIXD61 [PDF].
Delaware Waterfront Properties Sold to NY Firm
Brandywine Realty Trust has sold the 5.3-acre waterfront property known as the Philadelphia Piers, just north of the Benjamin Franklin Bridge, to the New York-based Durst Organization for $21.4 million, The Philadelphia Inquirer reported on March 27.
Brandywine sold the properties to concentrate on its work with Drexel University on the Schuylkill Yards master plan development in University City.
The purchase by Durst is its first outside New York state and is seen as further indication of Philadelphia's growing attraction for investors.
To read the article, please go to bit.ly/2ovgKzK.
Residential Market News
Transit and Apartments: A Winning Combination
Multifamily developers have taken note of the American Public Transportation Association's (APTA) findings that large corporations gained a competitive advantage by locating in areas with both shorter commute times and multiple modes of transportation nearby, according to an update from Integra Realty Resources and the Pennsylvania Apartment Association. In 2015, about 61% of public transit users commuting to work nationally were renters.
Nationally, nearly 66,000 units, or 21%, under construction with 2017 delivery dates, are "transit-oriented," defined as being within a one-quarter mile radius of a public transit rail station. The percentage is more than double the share of five years ago.
New Ballroom for the Rittenhouse
The 118-room Rittenhouse hotel has just completed its latest improvements, a $1 million renovation of the ballroom and two board rooms, the Philadelphia Business Journal reported on March 30.
The 4,500-square-foot grand ballroom was redesigned to attract more corporate business and social events. Since 2012, when Hersha Hospitality Trust bought the hotel, the company has invested $15 million in renovations.
To read the article, please go to bit.ly/2onhWZz.
Arts and Culture News
Art Museum Celebrates Groundbreaking, Sets Fund-Raising Goal
The Philadelphia Museum of Art on March 30 celebrated the groundbreaking of the museum’s $196 million “core project” to renovate the interior of the museum, remove the auditorium and add approximately 23,000 square feet (sf) of new gallery space and 67,000 sf of new public space.
Construction has been underway since the fall, but the ceremony was delayed until a $525 million fund-raising campaign, announced at the groundbreaking, was in place. The museum has already raised $326 million of its goal, which includes the core project's funding, $150 million for the endowment, and other initiatives.
To read the article, please go to bit.ly/2onEwSo.
Parks and Open Space News
Free Activities Begin at Dilworth Park
Dilworth Park resumed its playful water show on Saturday, April 1, as the Air Stream Grille also reopened in the space to the east of the Dilworth Park Café. Tomorrow, April 4, Spring Training at Dilworth Park presented by Rothman Institute begins, offering a variety of free activities on Tuesdays through Thursdays, through May 25, featuring tips and tricks from experts at Rothman Institute and top-notch trainers leading free classes:
Tuesdays, it’s yoga at noon and boot camp at 6:00 p.m.;
Wednesdays, at 1:00 p.m., Silver Sneakers, a fitness program for boomers and beyond, and at 6:30 p.m., City Fit Girls Running Club;
Thursdays at 6:00 p.m., Zumba with music powered by Live Nation.
Spring Training at Dilworth Park is presented by Rothman Institute, with program partners Optimal Sport Health Clubs and City Fit Girls. For complete information on all activities at the park, please go to dilworthpark.org.
Septa Announces Proposed Budgets for FY18
SEPTA on March 27 announced a proposed $727.23 million capital budget and $1.45 billion operating budget for Fiscal Year 2018 (FY18).
The capital budget includes $241.6 million for new buses and $19 million for improvements beginning at City Hall and 15th Street Stations in the fiscal year and continuing through 2023 at a cost of almost $146.5 million. The operating budget assumes service levels will remain the same, though revenue is expected to decrease by 1.0%, or $5.2 million.
SEPTA will conduct public hearings on the capital budget in the SEPTA Board Room at 1234 Market Street, Mezzanine Level, at 11:30 a.m. and 5:00 p.m., on Wednesday, April 26. Comments can be submitted via email at firstname.lastname@example.org, or by sending them to: Director of Capital Budget and Grant Development, 9th Floor, 1234 Market Street, Philadelphia, PA 19107-3780, and must be received by May 2.
To read the FY18 Capital Budget and Five-Year Plan, please go to bit.ly/2nMX3X1 [PDF]. The FY18 Operating Budget and Five-Year Plan can be found at bit.ly/2o8wBIg [PDF].
Comment Period Extended for AMTRAK’s High-Speed Rail Plan
The Federal Railroad Administration (FRA) has received 1,000 letters in response to its release of the Northeast Corridor (NEC) Environmental Impact Statement (EIS) and, in response to requests for more time to respond, will continue to accept comments as it moves forward on preparing a Record of Decision (ROD). The deadline originally had been January 31.
The FRA is weighing how to balance the desire for expanded rail service along AMTRAK’s Northeast Corridor with consideration of the environmental impact. A Tier 2 EIS will be prepared and further planning studies will be evaluated before decisions will be made about how the project will proceed and which sites will be included.
For more information, please see the FAQs at necfuture.com/faqs/ and necfuture.com.
Frontier Airlines to Begin Flights to Puerto Rico
Frontier Airlines on June 11 will begin daily nonstop flights between Philadelphia International Airport (PHL) and Luis Muñoz Marín International Airport (SJU) in San Juan, Puerto Rico, The Philadelphia Inquirer reported on March 28.
Flights will leave Philadelphia at 9:15 p.m., arriving in San Juan at 1:23 a.m. Return flights will depart San Juan at 2:25 a.m., and arrive in Philadelphia at 6:43 a.m. The route will not operate during peak hurricane months, September through mid-November.
To read the article, please go to bit.ly/2ns6vNq.
City's Commercial Properties Reassessed
The first full reassessment of commercial properties since the Actual Value Initiative (AVI) was enacted in 2014 has been completed, and the taxable portion of assessed value rose from $30.23 billion to $45.3 billion, an increase, prior to appeals, that could contribute up to $118 million in new tax revenue to be split between the City and the Philadelphia School District, according to a press release from Mayor Jim Kenney’s office.
Instead of one large leap after four years, the promise of AVI had been for annual reassessments. According to this most recent valuation, the market value of all 580,000 city properties -- residential and commercial -- grew by $17 billion over the last four years to $153 billion, with the biggest increases coming from hotel, apartment, and commercial buildings.
The School District is expected to receive $65 million in new tax revenue, which has the potential to close by one-third a projected $900 million budget deficit in the district’s five-year plan, the article noted.
To read The Philadelphia Inquirer story of March 31, please go to bit.ly/2ojnggA. To read the Mayor's press release, please go to bit.ly/2ot8vbL.
Affordable Care Act Action Guide
A fact sheet released by the Kenney Administration estimated that more than 200,000 people in Philadelphia benefit from the Affordable Care Act (ACA), 160,000 through Medicaid and about 60,000 through the Marketplace, with 1 in every 6 adults in Philadelphia now insured through the Act.
The ACA enables 160,000 additional Philadelphians to receive treatment for mental illness or substance use through the Medicaid behavioral health program, operated by the Department of Behavioral Health and Intellectual disAbility Services.
Almost 25% (nearly 40,000) of new Medicaid enrollees are using behavioral health services, including critical substance use disorder services, making ACA coverage a key component of the City’s drug abuse treatment programs.
For more information prepared by the City about ACA, please go to bit.ly/2opLl5n [PDF].
NYC Offers Proposal for More Homeless Shelters
Last month, New York City Mayor Bill de Blasio announced a plan to open 90 homeless shelters over five years to combat a homeless problem that has grown progressively and visibly worse during his administration, the New York Times reported on March 26.
Since de Blasio took office in January 2014, the number of people in the city's shelter system has grown from 53,000 to 60,000, not including thousands of others living on the street, or young people and domestic violence victims housed in specialized shelters.
To read the article, please go to nyti.ms/2nO9ZvD.
City General Fund Revenues Up in FY17, 2nd Quarter
City of Philadelphia General Fund revenues at the end of the second quarter of FY17 were $4,162.1 million, an increase of $30.3 million from the initial FY17-21 Five-Year Plan, while spending is projected at $4,228.0 million, an increase of $40.9 million from the Plan, according to the second Quarterly City Managers Report (QCMR) for FY17, submitted to the Pennsylvania Intergovernmental Cooperation Authority (PICA).
General Fund tax revenue is projected at $3,090.8 million, an increase of $18.9 million from the Plan, reflecting increases in business income and receipts ($23.5 million); sales ($9.1 million); wage and earnings ($2.9 million); net profits ($2.8 million); and parking ($1.6 million).
Tax revenue declined from real estate transfer ($16.7 million) and real estate ($4.4 million).
To read the report, please go to bit.ly/2mN6giS [PDF].
Wage Tax Refunds for Residents Who Work Elsewhere
Philadelphia residents working outside of Pennsylvania are now eligible to claim a credit against their Philadelphia Wage Tax for taxes paid to localities outside of Pennsylvania, the Philadelphia Business Journal reported on March 30. The new policy is the result of a decision in the U.S. Supreme Court Decision in Wynne v. Maryland Comptroller of Treasury.
Wage Tax refunds for 2016 are claimed by filing an Annual Reconciliation of Employee Earnings Tax return with the City of Philadelphia by April 18 and reporting the allowable credit on line 17. Individuals qualifying for local tax credits for tax years 2013 through 2015 must file Refund Petitions to claim the credits for these years.
To read the article, please go to bit.ly/2oq7uAW.
CPDC Membership Meeting: ‘State of Center City’
On Tuesday, April 25, at 8:30 a.m., at the Union League, Meade Room, 140 South Broad Street, the Central Philadelphia Development Corporation (CPDC) will present State of Center City: Building on Competitive Advantages.
In 2015 and 2016, more than 20% of all office leasing activity downtown came from tenants moving in from outside Philadelphia. While renewals continue in Philadelphia’s Class A space, older buildings and locations east of Broad also are demonstrating renewed appeal. How can Philadelphia build on these trends?
Hear from a panel on why companies are choosing to locate downtown and what the City of Philadelphia is doing to capitalize on this trend.
Panel speakers are Harold Epps, Director of Commerce, City of Philadelphia; Lisha Davis, Innovation Strategy, Vanguard; and Paul R. Levy, Executive Director, CPDC, who will present an overview of the 2017 State of Center City report.
CPDC members are encouraged to invite young professionals and other members of their firms to attend. Please RSVP to Romina Gutierrez by Wednesday, April 19, at email@example.com or 215.440.5543.
The Delaware Valley Regional Planning Commission (DVRPC) will hold a meeting of the Regional Community & Economic Development Forum from 8:00 a.m. to 10:30 a.m., on Friday, April 7, at the DVRPC Main Conference Room, 190 North Independence Mall West, 8th Floor.
The topic is "Equity and Economic Growth: Building Communities through Education, Entrepreneurial Support, and Impact Investing."
Speakers include representatives from Camden's LEAP Academy University Charter School, Rowan University's Center for Innovation and Entrepreneurship, Entrepreneur Works, and Ben Franklin Technology Partners/Impact PHL.
For more information or to register, please go to bit.ly/2opSfYN.