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June 10, 2013 � Volume 16 � Issue 12 � A bi-weekly email news service

Hospitality News
New Management for Convention Center
The Board of Directors of the Pennsylvania Convention Center Authority (PCCA) voted on June 5 to privatize management of the Pennsylvania Convention Center (PCC).  

SMG, a leading provider of private management for more than 220 public-assembly facilities worldwide, was the firm selected and will assume responsibility for managing the operations of PCC within the next three to four months. SMG has extensive experience working with organized labor in Pittsburgh, Providence, Chicago, and Detroit, and will work closely with the Philadelphia Convention & Visitors Bureau to increase bookings at PCC by developing new business and bringing back past customers.   

The $787 million renovation and expansion of PCC was completed in 2011, but concerns about bookings have mounted in recent months. The board�s privatizing of management was presented as a first step in addressing this challenge. 

Development News
PPA to Renovate Garage at Eighth and Filbert
The Philadelphia Parking Authority (PPA) released plans to renovate a parking garage it owns at Eighth and Filbert Streets, adjacent to where its new office headquarters are located at Eighth and Market Streets. The garage was built in 1964 to support the Strawbridge & Clothier department store and other Market Street retail.

The $15 million renovation is being designed by O�Donnell & Naccarato, Wallace Roberts & Todd.  The renderings show new Arch Street and Filbert Street façades and new lighting and other enhancements to improve the ground-floor retail and animate the Eighth Street underpass beneath the garage.

The retail and streetscape work is expected to be completed in early 2014 and the façade improvement will follow in early 2015, an article in PlanPhilly noted.

To view the renderings provided in a Philadelphia Inquirer article, please go to bit.ly/194YyCo.

Proposed Apartment Tower for Market West
Brandywine Realty Trust will be presenting their proposed 28-story, 278-unit rental apartment tower at the northeast corner of 20th and Market Streets to the Center City Residents� Association at a meeting to be scheduled before July 31.

The first two stories of the building will contain 25,000 square feet of retail/commercial on both Market and 20th Streets.

Brandywine Realty Trust is aiming for a LEED silver certification and hopes to begin construction in the fall of this year, with completion anticipated for March 2015. The project will require some variances and, under the new Zoning Code, will be subject to a Civic Design Review.

To see a rendering of the proposed tower, please go to bit.ly/197FZhc [PDF].

Residential Market News
Philadelphia Housing Market Improving
In Philadelphia, the volume of sales of residential properties is up and some houses are attracting multiple offers, according to an article in the June 3 edition of The Philadelphia Inquirer. Prices are also rising, due to the low inventory of homes on the market, the article noted.

Based on data from Prudential Fox & Roach's HomExpert Market Report, there were 18.7% more sales in April 2013 than the previous April, while the median price of a home was 2.5% higher than at the same time last year.

To read the article, please go to bit.ly/1b05xZX.

Multifamily Building Permits Up Substantially
Multifamily (MF) building permits for privately-owned housing units in the Philadelphia metropolitan area rose 38.6% in the past 12 months ending with April 2013, according to an Axiometrics Inc. analysis of U.S. Census Bureau information. The number of permits was 1,975 compared to 1,425 in the 12 months ending with April 2012. The number of permits for the same period in 2011 and 2010 were well under 1,000, at 667 in 2011 and 686 in 2010.

Nationally, the number of MF building permits rose by 43.5% from the comparable period a year ago, and urban infill locations accounted for the bulk of the increase.

Single-family building permits were up by 16.1% in the Philadelphia metropolitan area to 3,253 in the 12 months ending with April 2013, which put the area in 69th place out of 83 ranked metropolitan areas.

To read a summary of the report, please go to bit.ly/13DeG8C.

Economic and Employment News
Increasing Employment Growth in Small Scale, Proprietor Firms
According to a recently released analysis from New Geography, the U.S. economy has experienced a dramatic increase in the number of individuals who are self-employed and file IRS Schedule C forms for their taxes, while at the same time, salaried employment with larger firms has declined. Nationwide, between 2000 and 2011, sole-proprietor jobs grew by nearly 11 million, while wage and salary jobs declined by approximately 1 million. The sole-proprietor share of employment grew from about 11% of all jobs nationally to more than 20% of all jobs during this same period.
CPDC�s analysis of Bureau of Economic Analysis data suggests a similar trend in Philadelphia. Between 2000 and 2011, citywide full- and part-time proprietor employment grew from 46,131 to 95,100 jobs. At the same time, full-time job growth has been much slower (See "Houston Leads the Race Out of the Recession, Philadelphia Job Creation Still Lagging" below.).

Houston Leads the Race Out of the Recession, Philadelphia Job Creation Still Lagging
In a recent blog post, Economic Modeling Specialists International (EMSI) used their proprietary economic data software to analyze job growth in the 10 largest metropolitan areas in the U.S. following the most recent recession. At the regional level, while nine out of the 10 largest U.S. metro areas have added jobs since 2009, the Philadelphia region is still down -0.4% from 2009 job levels.

To understand changes at the city level, CPDC analyzed September 2012 wage and salary jobs (the last month available) from the Bureau of Labor StatisticsQuarterly Census of Employment and Wages in the City of Philadelphia and the nine other principal cities of these metropolitan areas. (Note:  In cases where cities are not contiguous with their counties, the county most closely aligned with the city area was used.) While the City of Philadelphia posted 2.2% growth in wage and salary jobs since 2009, considerably better than the region overall, Philadelphia is the slowest recovering city among America�s 10 largest. Boston, Atlanta, Washington, D.C., Dallas, Miami, New York City, and Houston all gained wage and salary jobs at more than twice the rate of Philadelphia between 2009 and 2012.

Center City District Releases New & Improved Vital Statistics
Center City District is pleased to release this month�s Vital Statistics publication in a new online, interactive format. Vital Statistics now includes more city-to-city comparative data, more time series information, as well as improved data interactivity. Vital Statistics provides the most up-to-date data on Center City�s office and hotel market trends as well as job and industry sector information for the Philadelphia economy. Please contact Lauren Gilchrist, Manager of Research & Analysis, with questions or comments on this new format. centercityphila.org/business/vitalstats.php

Nonmanufacturing Stronger in May
Nonmanufacturing business activity rose in May on both the company and regional levels, according to the Business Outlook Survey Nonmanufacturing conducted by the Federal Reserve Bank of Philadelphia.

A majority of the respondents to the survey, 57.5%  reported an increase in new orders, while only 7.5% reported a decrease.

More companies reported they had added full-time employees (37.5%) than companies that had reduced the number (10%).

Looking ahead six months, 85% anticipated improved business conditions in the region, and 72.5% saw improvement on the company level.

Transportation News
State Senate Passes Transportation Bill
By a vote of 45-5, the Pennsylvania state Senate on June 5 passed with strong bipartisan support SB 1, a $2.5 billion transportation-funding bill.

The bill now goes to the House, where things will be more complicated. The Associated Press (AP) reported that Republican leaders in the House are strategizing to tie passage of the transportation bill to the Senate�s passage of HB 790, which the House passed in March and which would privatize the state liquor store system. To read the AP story, please go to bit.ly/11hXUIW. To read HB 790, please go to bit.ly/XKeyAD.

SB 1 (bit.ly/17JuR6T), introduced by Transportation Committee Chairman John Rafferty (R., Montgomery), provides roughly $1.9 billion a year for highways and bridges; $500 million a year for mass transit; and $115 million to be shared among airports, ports, rail freight, and walking and biking routes. The bill notes that 9,000 miles of roads owned by the Commonwealth are in poor condition and that 4,400 bridges owned by the Commonwealth are rated structurally deficient.

To pay for the improvements, the bill calls for an increase of 28.5 cents in the gas franchise tax, which most likely would be passed on to consumers; a $100 surcharge on moving violations, plus increases in fines. Motorists would pay $50.50 for a driver's license that would be valid for six years, instead of the $29.50 for the current four-year license; and vehicle registration would cost $104 for two years instead of $36 annually. Passage of the bill could create approximately 60,000 jobs, supporters of the bill estimated.

Drexel President Testifies on Importance of Amtrak�s NEC
On Friday, June 6, John A. Fry, President of Drexel University, testified in support of improvements to Amtrak�s Northeast Corridor on behalf of the Chamber�s CEO Council for Growth at a U.S. House of Representatives Committee on Transportation and Infrastructure hearing in New York City.

Fry�s testimony, which can be read at 1.usa.gov/18d86Mn [PDF], underscored the vital importance of Amtrak to the Greater Philadelphia region. (Fry will be the featured speaker at the Tuesday CPDC meeting.  See below.)

Eds and Meds News
July 1 Deadline for Educational Improvement Tax Credit
The Center City District Foundation (CCDF) is a state-approved Educational Improvement Organization (EIO), a vehicle for businesses seeking to make contributions through the Educational Improvement Tax Credit (EITC) program to support the public, elementary schools of Center City. For FY2014, tax credits can equal 75% of a business' contribution, up to a maximum of $750,000 per year. Tax credits of up to 90% are available for businesses that contribute the same amount for two consecutive years. Contributions to the CCDF for this purpose can be used to expand arts and cultural initiatives and foreign language programs, and increase financial literacy and entrepreneurial skills in Center City public schools.

Applications are due July 1 and are processed on a first-come-first-served basis, until funds are exhausted. For additional information or to apply, please visit newpa.com/eitc.

Thousands to Be Laid Off by School District of Philadelphia
As funding at both the state and city level remains uncertain, Superintendent William R. Hite, Jr., on Friday announced that the District was mailing layoff notices to 3,783 employees, including 676 teachers, 283 counselors, 127 assistant principals, and 1,202 noontime aides, The Philadelphia Inquirer reported. Additional layoff notices are to be mailed next week to more workers who provide support to the teaching professionals.  To read the article, please go to bit.ly/11AVdXb.

New COO for School District
Fran Burns, executive director of the Pennsylvania Intergovernmental Cooperation Authority (PICA), will resign her position there to become Chief Operating Officer of the School District of Philadelphia, PICA board chairman Sam Katz announced on May 29.  Burns served as L&I Commissioner before joining PICA.

Parks and Open Space News
PCPC Approves Rittenhouse Improvements
A lighting project for Rittenhouse Square was unanimously approved by the Philadelphia City Planning Commission (PCPC) on June 5, PlanPhilly reported. The project also includes retrofitting existing lampposts and the installation of security cameras. The lighting is part of an overall  $1 million investment in the park by the Department of Parks & Recreation and the Friends of Rittenhouse Square. This year marks the 100th anniversary of the Square's redesign by Paul Cret.

To read the PlanPhilly article, please go to bit.ly/1b5wonq.

Municipal Tax News
Public Hearing on AVI-Related & Other Tax Bills in City Council
The City Council Committee of the Whole will hold a public hearing on Wednesday, June 12, at 2:00 p.m. to hear testimony on 10 tax bills.

Of major concern is Bill #120651, introduced by Councilman W. Wilson Goode, Jr., that would reduce the tax abatement for new single-family and residential condo construction from 10 years to eight years and cap the amount that could be abated for owner-occupied residential properties at $200,000.

Real estate developers consider the full tax abatement critical to the continued growth of the downtown and note that properties coming off the abatement will contribute $88 million in additional property tax revenue, in addition to the jobs created by construction, the taxes that these jobs generate, as well as the substantial real-estate transfer taxes generated by major condominium projects.

The bill can be read at bit.ly/12p3EnY.

Other Bills on the Wednesday Agenda:
Bill #120338  (Curtis Jones, Jr. on behalf of Council President) Providing for deferrals of payment of a certain portion of Real Estate Taxes due the City of Philadelphia or the Philadelphia School District. bit.ly/18U4Mmc

Bill #120339  (Curtis Jones, Jr. on behalf of Council President) "Special Real Estate Tax Provisions for Low Income Taxpayers," providing for credits against real estate tax for some low-income taxpayers. bit.ly/11pqetS

Bill #120341 (Curtis Jones, Jr. on behalf of Council President) Providing for installment payments of real estate taxes. bit.ly/18czIkB

Bill #130142 (Mark Squilla) Calls for phasing in over four years the increases and decreases in property taxes. bit.ly/1be7Rwz

Bill #130150 (James F. Kenney) Authorizing real estate taxes for the City of Philadelphia and the School District of Philadelphia at a combined rate of 1% for Fiscal Year 2014. bit.ly/Z0r11T

Bill # 130163 (David Oh) Providing for deferrals of payment of a certain portion of Real Estate Taxes due the City of Philadelphia or the Philadelphia School District, for owner-occupied properties that are the owner's primary residence, with a limitation of five years. bit.ly/18cAUV5

Bill #130183 (Curtis Jones, Jr. on behalf of Council President) This bill would continue reductions in the Wage and Net Profits Tax through 2017. bit.ly/19PULrq (Another bill, #130444,  bit.ly/Zje0rw, would effectively undo the proposed restart and five-year planned reduction of wage and business taxes that were in the Mayor's plan.)

Bill #130254 (Mark Squilla) Would phase in the effects of AVI over a period of years. bit.ly/13qzy3X

Bill #130447 (Curtis Jones, Jr. on behalf of Council President) Raises the tax on alcoholic drinks served by the glass in any hotel, restaurant, or club. bit.ly/18oGGzz

(On Friday, state Senator Anthony Williams (D., Philadelphia) introduced SB 945bit.ly/19Qeqrg, that would provide the necessary enabling legislation for the drink tax. Williams also introduced SB 944bit.ly/17vsB5U, that would provide the necessary enabling legislation for the proposed cigarette tax, Bill #130446 bit.ly/13QQe5m.)

Three Bills Passed By Council
On Thursday, June 6, City Council passed three tax bills.

Bill #120054-A, sponsored by Councilman Bill Green, creates the opportunity for a property owner who is delinquent on taxes to set up an installment plan and requires the City to take action if the owner does not set up such a plan.  To read the bill, please go to bit.ly/17u3kcb.

Bill #121037-A, sponsored by Councilman Bill Green, defines the source of receipts from the sale of products and services of a software company as the location where the recipient receives the benefit of the products and services, known as market-based sourcing. To read the bill, please go to bit.ly/11JEXyU.

Bill #130141, sponsored by Councilman Brian J. O�Neill, provides for senior citizens who are in a tax-freeze program and who would owe less tax as a result of a reduction in the tax rate, to be able to re-enter the program at the lower rate.  To read the bill, please go to bit.ly/18bdI9Q.

Other Developments in Council
As part of the Actual Value Initiative, Council approved a real estate tax rate of 1.34 and included a Homestead exemption of $30,000. Also, Council took no action on a bill proposed by Councilwoman Maria Quinones Sanchez that would have raised substantially the U&O tax on the business community.

Other Government News
Steep Increase in City Tax Revenue
City of Philadelphia tax revenues for April totaled $516.6 million, a 42% increase from the same month last year, according to the Office of the City Controller's March Financial Forecast & Snapshot.

Wage, earnings, and net profit tax collections for the month totaled almost $169 million, an almost 10% increase compared to the same month last year. Monthly sales tax collections totaled $19.3 million, 4% less than was collected last April.

To read the report, please go to bit.ly/15vTzWX [PDF].

PICA Releases Third Quarter Report
General Fund revenue for the City of Philadelphia is projected to be $3,675.6 million, an increase of $57.2 million over the previous quarter and $107.8 million over the Fiscal Year 2013-Fiscal Year 2017 (FY13-FY17) Plan, according to the Pennsylvania Intergovernmental Cooperation Authority�s (PICA) report on the Quarterly City Managers Report for the third quarter of FY13, released on June 7.

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

Upcoming Events
Tomorrow! Drexel University's Ambitious Plans
The next Central Philadelphia Development Corporation Membership Meeting will be Tuesday, June 11, at the Four Seasons Hotel Philadelphia, One Logan Square. Breakfast will be offered at 8:30 a.m. and the program will begin at 8:45 a.m.

John Fry, President of Drexel University, will be the guest speaker.

Drexel University has ambitious plans to expand its West Philadelphia campus east while creating a mixed-use residential and innovation district adjacent to 30th Street Station. On both sides of the Benjamin Franklin Parkway, the Academy of Natural Sciences of Drexel University and Drexel's health-care facilities are growing. University President John Fry will outline a vision for an expanding university that can have very positive impacts for both the western edge of Center City and northwest quadrant of Center City between the Parkway and North Broad Street.

CPDC members are encouraged to invite both young professionals and other members of their firm to attend this meeting.

Highlights of Two of PCPC's District Plans
On Monday, June 17, from 6:00 p.m. to 7:30 p.m., at the Center for Architecture, 1218 Arch Street, the Philadelphia City Planning Commission (PCPC) will present "Visions for Our Metropolitan Center," which will examine the PCPC's University Southwest District Plan and the Central District Plan.

Speakers will include Alan Greenberger, Deputy Mayor of Economic Development and Commerce Director; Jim Pearlstein of Pearl Properties, who will present "The Developer's Perspective"; and PCPC's Laura Spina and Andrew Meloney, who will present highlights of the two district plans.

A reception will follow. The event is free. To register, please go to bit.ly/11bkU0n.


The Central Philadelphia Development Corporation (CPDC) is a strategic planning, research and advocacy organization whose mission is to strengthen the vitality and competitiveness of Center City Philadelphia as the region's central location for business and innovation and to reinforce Center City as a vibrant 24-hour hub for art and culture, a premier place to live and a dynamic destination for shopping and dining.

Central Philadelphia Development Corporation

T 215.440.5500 � F 215.922.7672


For corrections, suggestions, comments, etc., contact Linda Harris, at 215.440.5546 or lharris@centercityphila.org.

For changes of address or contact name, contact cpdc@centercityphila.org.

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