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July 7, 2014 • Volume 17 • Issue 14 • A bi-weekly email news service

Office Sector News
Construction Begins on New Comcast Center
Liberty Property Trust has officially begun construction of Philadelphia�s tallest skyscraper � the $1.2 billion, 59-story Comcast Innovation and Technology Center at 18th and Arch Streets, the Philadelphia Business Journal reported on July 3.

Comcast has signed a 20-year lease for 982,275 square feet, or about 74% of the 1.33-million-square-foot building. The tower will also include a 222-room Four Seasons hotel.

L.F. Driscoll is the general contractor, and the building is expected to be complete in the first quarter of 2018, the article noted.

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

Demographic and Economic News
Growth in Cities Outpacing Suburbs
Between 2012 and 2013, in the 51 largest U.S. metropolitan areas, including Philadelphia, 19 primary city populations grew faster than their suburbs, according to Brookings demographer William Frey.

In metropolitan Philadelphia, which includes Camden and Wilmington, there was 0.3% growth in the primary city (Philadelphia) and 0.2% growth in the suburbs.

Seven metro areas saw a more than 2% growth rate in their cities. New Orleans led the group with 2.4% growth, and the other six were: Washington, D.C.; San Jose; Austin; Raleigh-Cary; Denver; and Seattle.

To read an article about the report and see the charts, please go to bit.ly/1qsHYTx.

To read the Brookings report, please go to bit.ly/1khERN2.

Sunbelt Cities Taking Jobs From Wall Street
In an analysis of employment trends in financial services, a sector that employs 7.9 million people nationwide, Joel Kotkin and Michael Shires have identified large cities �those with over 450,000 jobs � that are gaining jobs in a sector that used to define Wall Street. The fastest growth has been mostly in low-cost Sun Belt cities, which account for seven of the top 10 large metro areas on their list.

The fastest growth has been in Phoenix-Mesa-Glendale, Arizona, where financial employment has expanded 12.3% since 2008 and 7.2% in the last year alone. Close behind are San Antonio-New-Braunfels, Texas, Austin-Round Rock-San Marcos, Texas, and Nashville-Murfreesboro-Franklin, Tennessee.

The trend is due to a combination of complex issues. Salaries tend to be lower in these smaller cities, benefitting employers, but cost of living is also lower, especially housing prices, which can give the employee a higher standard of living than in larger cities.

For example, the median financial manager in New York or San Francisco costs $90,724 to $98,783, respectively; while one in Phoenix costs only $77,467. The median home price in New York is $375,900 and in San Francisco, $679,200, while in Phoenix, the median home price is $183,600.

To read the article, which originally appeared in Forbes, please go to bit.ly/TEC5ae.

Nonmanufacturing Stable in June
Nonmanufacturing firms reported stable business conditions during June, according to responses to the Federal Reserve Bank of Philadelphia�s Survey of Nonmanufacturing Firms, with 56.5% reporting increased revenues, 6.5% reporting decreases, while 32.6% saw no change. New orders were up for 52.2% of the firms, down for 8.7%, and remained the same for 19.6%. The number of full-time employees remained stable for more than half of the firms (54.3%), increased for 28.3%, and decreased for 15.2%.

U.S. Census: Poverty Increasing
One in four U.S. residents live in poverty areas, according to American Community Survey data collected by the U.S. Census Bureau from 2008 to 2012, up from less than one in five in 2000.

The number of people living in poverty areas increased from 49.5 million (18.0%) in 2000 to 77.4 million (25.7%) in 2008-2012. The 2012 U.S. poverty rate was 14.9%.

Of the people living in poverty areas in the 2008-2012 period, 51.1% lived in central cities, 28.6% in suburbs, and 20.4% outside metro areas. There was a larger increase in the percentage of people living in poverty areas who hold jobs (up 8%) than those who are unemployed (up 3.4%).

To read the Census report, released on June 3, please go to 1.usa.gov/1nWLstL.

Development News
Allan Domb Buys 1801 Walnut
Allan Domb has purchased 1801 Walnut Street, the former Fell-Van Rensselaer mansion that houses the retail store Anthropologie, the Philadelphia Business Journal reported on June 30. Domb owns or has a stake in several buildings on that block, the article noted, including 1805 Walnut, which is home to the Barnes & Noble bookstore.

Anthropologie�s lease was scheduled to expire in May 2016, however, a new lease was negotiated for another 15 years, according to the article.

The 23,598-square-foot property at 1801 Walnut was sold by ARC Properties. The sale price was not disclosed. Jones Lang LaSalle arranged the sale.

To read the article, please go to bit.ly/TAc7nV.

Hospitality News
International Visitors Increased in 2013
Philadelphia drew 673,000 overseas visitors in 2013, marking a 13% increase over the previous year according to data compiled by the U.S. Department of Commerce, Office of Travel and Tourism Industries (OTTI), Incentive Travel reported.

The increase in visitation moved Philadelphia from 14th to 13th for Top 20 U.S. Cities for Overseas Visitation. In 2002, Philadelphia was in 21st place.

The improvement is attributable in part to the Philadelphia Convention & Visitors Bureau�s (PHLCVB) international consumer marketing and public relations team, which offers fully translated websites and international visitor guides in French, German, Spanish, Portuguese, and simplified Chinese.

To read the article, please go to bit.ly/UBjbSj. To read an article in the Philadelphia Business Journal, please go to bit.ly/1lOHTtV.

PHLCVB Moving to New Office Space, Names New Leader
The Philadelphia Convention & Visitors Bureau (PHLCVB) in late December will move its offices from 1700 Market Street to 1601 Market Street, the Philadelphia Business Journal reported on June 25.

PHLCVB has signed a 15-year lease for 12,291 SF on the second floor, downsizing its office space from 17,105 SF.

The new offices will allow PHLCVB to have highly visible exterior signage and give it a place to showcase Philadelphia when meeting planners, tour operators, journalists and others visitors, the article noted.

To read the article, please go to bit.ly/1lsjY2k.

In other PHLCVB news, the Executive Committee of the Board on June 23 announced that Julie Coker Graham was to be promoted to Executive Vice President, effective July 1.

Coker Graham joined PHLCVB in September 2010 after serving as General Manager at Hyatt Regency Philadelphia at Penn's Landing, where she oversaw all operational aspects of the 350-room hotel. Her new responsibilities include overseeing all of the organization's departments and operational duties, as well as continuing her current role heading the PHLCVB's sales and services efforts.

The promotion of Coker Graham is part of a succession plan as President & CEO Jack Ferguson plans to retire in January 2016, the board�s announcement noted.

To read an article in the Philadelphia Business Journal about the promotion, please go to bit.ly/1k79xNl.

Retail News
Independence Beer Garden Opens Thursday
The Independence Beer Garden at Sixth and Market Streets overlooking the Liberty Bell and Independence National Historical Park will open on Thursday, July 10, the Philadelphia Business Journal reported.

The beer garden will have first-come, first-serve communal seating, including two bars, picnic tables, Adirondack chairs, and fire pits, plus 40 taps featuring regional and domestic craft beers and American food.

The beer garden was designed and landscaped by Groundswell Design Group.

To read the article, please go to bit.ly/1z8laxs.

Gaming News
Penn National Drops Out of Casino Race
Penn National Gaming, Inc. on June 27 formally withdrew its proposal for a $480 million Hollywood Casino Philadelphia at 700 Packer Avenue.

The company cited the City's vocal support for a Center City casino location as a contributing reason, along with a declining faith in the market potential of a second casino.

The two Center City locations are the Provence at 400 Broad Street in the former Philadelphia Inquirer building, and Market8 at Eighth and Market Streets.

To read the press release, please go to on.wsj.com/1yVgZoF.

Arts and Culture News
ArtPlace America Awards Three Grants Locally
The Center City District Foundation was among 55 grant recipients chosen by ArtPlace America (ArtPlace) in 2014 to support creative placemaking across the country. The $130,000 grant will help fund Pulse, a dynamic, highly-visible work of art by Janet Echelman, which will engage both adults and children and signal the presence of transit beneath Dilworth Park as curtains of colorful mist move across the surface of a fountain, tracing in real time the paths of three transit lines below as they converge in the center of the city.

Two other projects were awarded grants.

The Pearl Street + DesignPhiladelphia PopUp Place creative space project, led by the Asian Arts Initiative (AAI) in conjunction with the Philadelphia Center for Architecture (CFA), was awarded $644,885. The grant will fund the revitalization of a four-block corridor of Pearl Street � from 10th Street to Broad � in the Chinatown North/Callowhill neighborhood.

The Village of Arts and Humanities received $280,000 for its artist residency program.

For more information on ArtPlace America and the grants awarded, please go to bit.ly/UJLpKV.

Transportation News
Highway Trust Fund Near Insolvency
The Highway Account and the Mass Transit Account of the Highway Trust Fund are nearing insolvency, according to the U.S. Department of Transportation (USDOT).

The USDOT estimates that the highway account of the Highway Trust Fund, which allocated $37 billion to the states for highway projects in the fiscal year that ends September 30, will run out of money in August unless Congress can come up with a solution before then, according to Stateline, a digital news roundup from The Pew Charitable Trusts. The mass transit account of the fund is in only slightly better shape.

In the absence of intervention by Congress, federal officials plan to implement cash management procedures beginning in August that would mean reduced payments to states along with delays in reimbursements.

To read U.S. Secretary of Transportation Anthony R. Foxx�s letter to state transportation leaders, please go to 1.usa.gov/1t29ziW.

To read the Stateline article, please go to bit.ly/1q0ji3y.

Pilot Parking Program for Scooters
The Philadelphia Parking Authority (PPA) on July 2 announced a new pilot program to address the parking needs of motorcycles and scooters. The program will run through the end October 2014, when it will be reevaluated based on data collected during the pilot period.

On commercial streets including all of Center City and University City not posted for Residential Permit Parking, motorcycles and scooters may not park on sidewalks. The PPA has installed 47 corrals accommodating 180 motorcycles or scooters in Center City and University City. During the trial period, there will be no charge to park motorcycles or scooters in the designated corrals.

Also, the PPA�s AutoPark at the Gallery garage at Ninth and Filbert Streets has been equipped with a designated street-level area for parking motorcycles and scooters. The AutoPark at Old City (Second and Sansom Streets), AutoPark at Jefferson (10th and Ludlow Streets), and the lot at 19th and Callowhill Streets will have the locking devices installed shortly. Scooters can park at these facilities for a daily, flat rate of $5.

For complete information, please go to http://bit.ly/1rpGaxs.

Parks and Open Space News
City Closes on Love Park Garage
The City of Philadelphia has completed the $29.6 million sale of the parking garage at Love Park, the Philadelphia Business Journal reported on June 30.

InterPark of Chicago bought the garage that sits under JFK Plaza at 15th and Arch Streets. The garage has 810 spaces. Management of the facility will be handled by LAZ Parking, which will replace all the existing personnel represented by the Teamsters, the article noted. InterPark plans to renovate the garage and work in partnership with the City on the design and renovation of LOVE Park.

Jones Lang LaSalle arranged the transaction.

To read the article, please go to bit.ly/1quIvH8.

PHS Pop Up Garden to Open
The Pennsylvania Horticultural Society�s (PHS) Pop Up Garden will return for a fourth year tomorrow, Tuesday, July 8, and will remain open through mid-October. This year's location is 1438 South Street, where you can enjoy tropical cocktails, cold beer, and flavorful dishes served by the next-door Jamaican Jerk Hut.

Proceeds from the PHS Pop Up Garden support the PHS City Harvest program, which creates green jobs and brings together a network of community gardeners who raise fresh, healthy food for more than 1,200 families in need each week.

The garden will be open Monday through Thursday, 11:00 a.m. to 10:00 p.m., with food and drink served after 5:00 p.m.; on Friday, 11:00 a.m. to Midnight, with food and drink served after 5:00 p.m.; Saturday, from 2:00 p.m. to Midnight, with food and drink served all hours; and Sunday, from Noon to 10:00 p.m., with food served all hours.

For more information, please go to bit.ly/1nIhmeP.

Pier 68 Will Become Park
Pier 68 on the Delaware River waterfront is set for a $1.7 million transformation with a picnic grove, hammocks, fishing and lots of space for outdoor activities, the Philadelphia Business Journal reported.

The pier park will serve as the southern trailhead for the Central Delaware trail, which is in development in segments from Pier 70 Boulevard north to Penn Treaty Park. With funding from the William Penn Foundation, the CCD built a section of that trail in 2010 from Washington Avenue to Piers 68 and 70, adjacent to the shopping center that houses Home Depot and Walmart.

Plans for Pier 68 were released on June 26 by the Delaware River Waterfront Corporation (DRWC). The new park is expected to open in mid-2015.

The DRWC sought proposals for a design and construction plan for improvements to the pier and a team lead by Studio | Bryan Hanes and Bittenbender Construction was chosen.

To read the article, please go to bit.ly/1iKHoR5.

To view renderings, please go to bit.ly/1rEe2Uq.

To see the DRWC�s Pier 68 overview, please go to bit.ly/1qLmN1m.

City Spending Less Than Peers on Parks
The Trust for Public Land ranked Philadelphia's parks system 20th out of the nation's largest 60 cities, noting that the City spends about $60.66 on parks per resident, including local, state and federal funds, while the typical city spends $78, Newsworks reported on June 23.

The City cut parks spending by almost one-third during the Great Recession, the article noted, but has been rebuilding, and for FY15, the City has provided an increase of about $500,000 for Philadelphia Parks & Recreation.

To read the article and view the charts, please go to bit.ly/UBy9Yv.

Government News
City Won�t Collect $22 Million in Taxes From SEPTA
In a letter to Council President Darrell L. Clarke and School Reform Commission Chairman Bill Green, Deputy Mayor for Transportation Rina Cutler defended the City�s decision to abandon efforts to collect $22 million in taxes from SEPTA, saying that a 2003 state Supreme Court opinion left the City in a weak position to collect the money, Philly.com reported on June 30.

The disputed taxes were back taxes owed on properties SEPTA leased to commercial businesses at sites throughout Philadelphia.

In a new agreement, effective July 1, SEPTA agreed to spend more than $50 million to improve city-owned infrastructure and maintain 3.5 miles of the underground concourse, formerly maintained by the CCD under contract to the City.

To read the article, please go to bit.ly/1qs5T84.

More Than Half Paid Higher Taxes Under AVI
About 54% of Philadelphia residential property owners paid higher real-estate taxes this year, the debut of the Actual Value Initiative (AVI) reform effort, than they did the previous year, the Philadelphia Daily News reported on July 1. For commercial properties, the number was 57%. Under AVI, the city reassessed all 579,000 properties in Philadelphia.

About 30% of eligible owners have signed up for the homestead exemption, which deducts $30,000 from assessments for primary residences, the article noted.

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

City Tax Revenues Increase in May
Tax revenues for May totaled more than $296 million, an 8% increase over the same month last year, according to the Office of the City Controller�s Financial Forecast & Snapshot.

Wage, earnings, and net profit collections for the month totaled $34 million, a 3.0% increase over the same month last year. Total FY14 revenues in this category totaled more than $1.5 billion, a 3% increase over the same period last year.

Monthly sales tax collections in May totaled $24.1 million, a 1.6% increase compared to last May. Yearly collections have totaled $241.6 million, an almost 3% increase over last year�s collections.

To read the report, please go to bit.ly/1v9WwI4 [PDF].

City�s Five Year Budget Plan Goes to PICA
The City of Philadelphia on June 26 delivered its FY2015-2019 Five Year Financial Plan to the Pennsylvania Intergovernmental Cooperation Authority (PICA), as required by law.

Tax revenues for FY14 were revised upwards by $9 million due to a $10 million upward adjustment of the Wage and Earnings Tax, and a $1 million downward adjustment of the Sales Tax. The five-year plan was based on these adjustments, the letter to PICA noted.

The plan anticipates balanced budgets, however, with declining revenues after FY15, when revenue is forecast at $4.5 billion, followed by $3.8 billion in FY16, $3.9 billion in FY17, $4.0 billion in FY18, and $4.1 billion in FY19.

Risks to the plan include arbitrations for uniformed employees and continued weakness in the economy, the letter stated.

To view the letter from Budget Director Rebecca Rhynhart, please go to bit.ly/1z2KJzV [PDF].

To view the fiscal year budgets, please go to bit.ly/1jDvwvc [PDF].

In other PICA news, the third quarter City of Philadelphia Quarterly City Managers Report (QCMR) projects fiscal year 2014 (FY14) General Fund revenues at $3,837.0 million, an increase of $107 million from the FY14-18 Five-Year Financial Plan estimate, according to PICA�s Staff Report released on June 24.

Obligations are projected at $3,993.5 million, an increase of $98.7 million from the Plan. The operating deficit is projected at $156.5 million, a decrease from the $164.8 million projected in the Plan. The Plan projected the FY13 year-end fund balance at $223.9 million, while the actual fund balance was $256.9 million, an increase of $33.1 million.

To read the report, please go to bit.ly/1ospuSq [PDF].

Three Senior Staffers Leave Nutter Administration
Mayor Michael A. Nutter on June 27 announced the departure of three senior staff members: Dr. Donald Schwarz, Deputy Mayor for Health and Opportunity and Health Commissioner; Anne Marie Ambrose, Department of Human Services Commissioner; and Suzanne Biemiller, First Deputy Chief of Staff.

He appointed Susan Kretsge, a graduate of Temple University with 39 years of experience working in City government, to replace Dr. Schwarz as Deputy Mayor for Health and Opportunity.

Dr. James Buehler, MD, Drexel University School of Public Health Professor in the Department of Health Management and Policy, is the new Health Commissioner.

Vanessa Garrett Harley, currently the Deputy Commissioner of the Children and Youth Division of DHS, will serve as the new Commissioner for the Department of Human Services.

To read the press release, please go to http://bit.ly/1jWgNLL.

Philadelphia School District Funding Struggles
The School Reform Commission on June 30 adopted a $2.6 billion budget, with $93 million unfunded, in anticipation of the General Assembly (GA) passing a cigarette tax for the City of Philadelphia, The Philadelphia Inquirer reported (bit.ly/1qDVbKl).

On July 2, the state House of Representatives passed HB 1177 that will allow Philadelphia to impose the $2-a-pack tax on cigarettes to help fund the School District of Philadelphia schools. The legislation will now go to the Senate, which is expected to vote this week on the bill.

The cigarette tax is expected to yield about $45 million this year, which means the district will still have a gap in its budget, The Philadelphia Inquirer reported.

To read the bill, please go to bit.ly/1pZMhEK (page 25).

To read The Inquirer article, please go to http://bit.ly/1kirfNR.

Chicago Aspires to Be City of Light
Mayor Rahm Emanuel of Chicago has launched an international design competition for a citywide lighting framework plan that would transform the Windy City into an American version of Paris� City of Light, the Chicago Sun-Times reported.

The deadline is today (July 7) for concept design proposals to illuminate five categories of Chicago�s key locations: the Chicago River, its iconic buildings, 180 bridges, the Chicago Transit Authority�s train system, known as the L system, and Lower Wacker Drive, the article noted.

The lighting framework plan will create connections between those elements that encourage tourists to explore the city�s neighborhoods. [It will] help them in navigating and extending the tourist experience, establishing Chicago as a place to spend a few days � not just a few hours,� the bid document states.

To read the Sun-Times article, please go to bit.ly/1pRfqSL.