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July 10, 2017 • Volume 20 • Issue 14 • A bi-weekly email news service

Office Sector News
CBD Office Market Outperforms Suburban’s
The office occupancy rate in Philadelphia’s central business district (CBD), including University City, was 89% in the second quarter of 2017, with a year-to-date loss of 250,027 occupied square feet (sf), average asking rent of $30.39/sf, and 2,558,000 sf under construction, according to JLL’s Philadelphia Office Insight, Q2 2017.

The negative absorption is attributable to CHOP’s move from 3535 Market into its own property at 700 Schuylkill. Also, stalled plans for the residential conversion of a portion of the Public Ledger Building brought several hundred thousand feet of space back on the market.

In the Pennsylvania suburbs, the occupancy rate was 86.2%, with 430,683 sf absorbed, average rent of $26.52/sf, and 369,614 sf under construction.

To read the CBD report, please go to bit.ly/2t8Z5RS [PDF]; for the suburban report, bit.ly/2spOogZ [PDF].

In a related report, leasing in Philadelphia’s CBD during the second quarter of 2017 was approximately 40,000 sf under the historical average for the same period over the last seven years, following a first quarter that was 250,000 sf below average, according to JLL’s Snapshot of June 29.

Annual leasing activity has been averaging 2.7 million sf in the CBD, but at the halfway point, 1.1 million sf has been leased, well below the 1.35 million sf expected by this time of year.

A large wave of lease expirations is likely to push activity up during the second half of the year, especially during the fourth quarter, JLL predicts. To read the analysis, please go to bit.ly/2sVUAf2.

Employment News
Labor Market Trends Positive
The national labor market surged back in June with a hefty monthly gain in jobs, and revisions that added 47,000 more jobs to April and May than previously estimated, the New York Times reported. Over the past three months, job gains have averaged 194,000 a month. Although the unemployment rate ticked up from the previous month, it did so because more people joined the work force.

The local figures for Philadelphia are a month behind, but the pattern, according to CPDC research, is similar to national positive trends. Philadelphia has added jobs in every year except one since 2005, and the figures from the first five months of 2017 indicate Philadelphia is on track to do it again this year.

Philadelphia added 11,200 jobs between January and May 2017, and is up 16,200 jobs since May 2016. Eds and Meds continue to lead the way with an expansion of 9,500 jobs in the past year – nearly 60% of all jobs added in the period. Every sector of the Philadelphia economy has been growing except manufacturing – which continues to decline, and retail, which is essentially flat when compared to last year.

The unemployment rate in Philadelphia in May was 6.7%, down significantly from its post-recession high of 12.0% in July 2012, however, Philadelphia’s unemployment compares unfavorably with the national rate, which stood at 4.4% in June 2017. So, too, compared to the average rate of job growth of 2.8% in the last five years for the largest 25 cities, Philadelphia’s rate of job growth has been 1.1% per year, though it has recently been trending upward faster.

To read the article in the New York Times, please go to nyti.ms/2tPnezU.

Development News
Bill Seeks to Require More Affordable Housing
On June 22, Councilwoman María Quiñones-Sánchez introduced Bill #170678, which would create more comprehensive standards for building permanently affordable housing units in exchange for increased height, density, and floor-area ratio limits, PlanPhilly reported.

The legislation would increase height limits to 45 feet on lots zoned for smaller-scale multi-family buildings and would increase by 50% the maximum number of dwelling units allowed.

The bill also would require one unit of affordable housing for every nine market-rate units in buildings of 10 or more units. One-fourth of the affordable housing would be required to be included in the project, but others could be built elsewhere, or the developer could choose to pay into the Philadelphia Housing Trust Fund or lease or sell units to the Philadelphia Housing Authority.

To read the article, please go to bit.ly/2sj3Oys. To read Bill #170678, please go to bit.ly/2thE5KV.

Brandywine Realty Trust Sets Diversity Goals
Brandywine Realty Trust has committed to imposing a financial penalty of 0.1% on contractors who do not live up to the developer’s diversity goals for its $3.5 billion Schuylkill Yards project proposed in partnership with Drexel University, The Philadelphia Inquirer reported on June 27.

Brandywine also will give $675,000 to an apprenticeship program to help West Philadelphia residents enter building trades, and $750,000 to community-benefit corporations that team up with the company as co-developers on Schuylkill Yards.

Also, Brandywine will donate $3.1 million to a consortium of community organizations for affordable housing and small-business development, and $500,000 to the Grow Philadelphia Fund, a low-interest credit line to help minority entrepreneurs start businesses. To read the article, please go to bit.ly/2tliamx.

Brandywine’s Neighborhood Engagement Initiative, which comprises the above programs, was fashioned during the approval process in City Council, PlanPhilly reported on June 29. To read the article, please go to bit.ly/2u3buqJ.

Toll Bros. Will Reduce Height of Proposed Condo Tower
Toll Bros. is proposing to reduce its Jewelers Row condominium development from 29 stories to 23 and not pursue zoning permission for the taller building, The Philadelphia Inquirer reported on July 6.

The decision to reduce the building’s height was made as part of Toll’s planning process, the article noted. The company had received word from the City’s Department of Licenses and Inspections that it had ceased consideration of Toll’s request for permits to build the 29-story tower.

To read the article, please go to bit.ly/2uzMTdq.

Eds and Meds News
Jefferson and Philadelphia Universities Complete Merger
The merger of Thomas Jefferson University and Philadelphia University became effective July 1, creating the fifth largest university in Philadelphia and operating under the Thomas Jefferson University name, the Philadelphia Business Journal reported.

The combined university will encompass nine colleges and three schools and serve more than 7,800 students and employ 4,000 faculty members.

Stephen K. Klasko, President and CEO of Thomas Jefferson University and Jefferson Health, will be president of the combined institution. Stephen Spinelli, Jr., president of Philadelphia University, will serve as chancellor.

To read the article, please go to bit.ly/2tugR5h (requires subscription).

PA Supreme Court Rules Against School District
The Pennsylvania Supreme Court on July 5 ordered Montgomery County Court to reconsider a decision that allowed the Upper Merion Area School District to selectively appeal only the assessments of commercial properties, such as apartment complexes, while choosing not to appeal the assessments of other types of property, such as residential properties, several major law firms, as well as The Philadelphia Inquirer reported.

Owners of the complexes sued the district in May 2014 after the district appealed their assessments, which it argued were too low.

The Supreme Court held that the statute, which permits taxing authorities such as the school districts to file assessment appeals, is valid. Nevertheless, that authority violates the Pennsylvania Constitution if the district chooses to selectively challenge one classification of property to the exclusion of others.

Some attorneys suggest that school districts can be selective in their appeals if they focus on value of the property and not its use and classification.

To read the article, please go to bit.ly/2tvfb8U.

Transportation News
Three SEPTA Updates
SEPTA on June 28 released its board-approved fiscal year 2018 (FY18) capital budget totaling $727.23 million (compared to $548.63 million in FY17) and its 12-year capital program totaling $7.3 billion, unchanged from the previous 12-year plan.

SEPTA’s capital budget is focused on rehabilitating and replacing infrastructure and systems such as bridges, stations, substations, and vehicle-maintenance facilities, plus modernizing communication equipment, providing real-time information for customers, adding safety and security enhancements, and fully activating SEPTA Key. To view the 80-page budget, please go to bit.ly/2ujEZ78 [PDF].

The news site Billy Penn reports on SEPTA’s transition from its TransPass system to SEPTA Key. Between June 1 and June 27, there were 69,451 Key card purchases, bringing the total number of Key cards in circulation to 207,000, the article noted. However, only about 56,000 accounts exist, meaning only about a quarter of SEPTA Key cards are registered online and receiving the account protection perks SEPTA offers, such as the ability to cancel a lost or stolen card.

The SEPTA Key website, septakey.org, has gotten mixed reviews and is reportedly difficult to use on mobile devices. SEPTA hasn’t set a timeline for phasing out the sale of tokens. To read the article, please go to bit.ly/2uTgj5q.

Also, SEPTA this month expects to provide riders with vehicle-location data that refresh every 30 seconds, faster than the three- to seven-minute updates currently available at train stations and on SEPTA’s app, The Philadelphia Inquirer reported on July 6.

The more accurate information should start showing up at stations and on apps by the end of July and will continue to be expanded through 2018. SEPTA has spent $5.6 million installing cellular modems in its almost 1,400 buses and 159 trolleys, which will enable the new data transmission. To read the article, please go to bit.ly/2sVLPhU.

Lyft Adds Luxury Service
Philadelphia is among the cities where ride-sharing service Lyft is adding Lyft Lux and Lyft Lux SUV, targeted for the business community, the Philadelphia Business Journal reported on June 29.

Lyft Lux vehicles must comfortably seat six or more riders and be a designated luxury vehicle of 2011 or newer. Prices for the new service will be higher than normal Lyft service.

To read the article, please go to bit.ly/2tpHXtX.

Arts and Culture News
DAG Receives $75,000 Grant
The William Penn Foundation (WPF) has awarded a $75,000 grant to the Design Advocacy Group (DAG) to support enhanced advocacy, public events and communications, DAG announced on July 2.

DAG will use the grant to hire consultants as needed to conduct research; investigate alternative design strategies for proposed development projects; manage and design charrettes; launch a new website; and create a DAG fellowship for communications.

To see all the grants from WPF, please go to bit.ly/2u0HO0u.

Parks and Open Space News
Summer in the City: Dilworth Park
Philadelphia's center stage shines every Wednesday, from 12 noon to 1:30 p.m., with PNC presents Live @ Lunch, a showcase of local music. July performances celebrate Philadelphia femmes, showcasing the innovative styles of rising stars: July 12, Members of Prometheus Chamber Orchestra; July 19, Brianna Cash; and July 26, Laura Lizcano.

Also, on Fridays beginning July 21 and continuing through August 25, at 8:30 p.m., Dilworth Park will host Pictures in the Park. Have a cocktail or beer while watching movies on the big screen al fresco. Be sure to bring your own blanket or chair. Here’s the lineup: July 21, Beauty and the Beast (2017); July 28, Central Intelligence; August 4, Jurassic World; August 11, Trainwreck; August 18, Avengers: Age of Ultron; and August 25, Fantastic Beasts and Where to Find Them.

For information on all the summer activities in Dilworth Park, please go to dilworthpark.org.

Continued Progress for the Rail Park
Warm weather has enabled the Viaduct Rail Park construction to accelerate. Utility work on Noble Street has been completed. Foundations for pedestrian lighting, stairs, and platforms will follow.

The contractor is well along the way to installing all the support structures on the edges of the viaduct that will enable the surface area to be expanded with boardwalks and viewing platforms.

The team is anticipating sealing the bridge surfaces with concrete by mid-July. Once the concrete pour has cured, the contractor will install structural bases for the swings, lights and benches.

The first in a series of videos produced and donated by Urban Engineers chronicles the Rail Park's construction and can be seen at bit.ly/2suwQv5. To learn more about the Rail Park, please go supportccdf.org/our-work/rail-park.

Center City firms can help in many different ways in the final phase of fundraising. Some have made outright contributions. CBRE is encouraging employees to donate directly. For a list of major donors to the Rail Park, please go to centercityphila.org/ccd-services/streetscape/rail-park.

USA 250 Announces First Major Gift
USA 250, the nonprofit organization preparing for the U.S.’s 250th anniversary in 2026, on June 28 announced its first major gift, a $380,000 donation to the National Park Service to underwrite the planting of 76 trees at Independence National Historical Park, a gift from the Daughters of the American Revolution.

The trees will be planted over the next three years. To read the announcement, please go to bit.ly/2svfu14.

Government News
City and CCD Address Aggressive Panhandling
The City of Philadelphia on June 12 announced a new plan to address the significant increase in panhandling in the downtown, with a text-to-give campaign that encourages people to stop giving money to panhandlers and instead donate $5 by texting the word “share” to 80077, The Philadelphia Inquirer reported. The money will go to the Mayor’s Fund to End Homelessness and will be matched by the City’s Office of Homeless Services.

Before the City announced the new plan, the Center City District (CCD) worked with the City to test-pilot the program by setting up information tables in strategic locations. Community Service Representatives from the CCD made available to pedestrians Make Your Change Count cards that suggested better ways to help people in need than dropping change in a cup, including the text-to-give message, plus phone numbers for those who feel threatened (911) and who want to call for Homeless Outreach (215.232.1984).

Starting today, the CCD will display the “Show You Care” campaign on 21 transit shelters in Center City, Community Service Representatives will be handing out cards at strategic locations, and CCD is distributing the Make Your Change Count cards and posters to building managers, hotels, businesses and retail associations.

To read the article in The Philadelphia Inquirer, please go to bit.ly/2snD1EC. To request “Show You Care” cards or posters for your employees or customers, please contact Linda Harris at the CCD at lharris@centercityphila.org.

State Revenue Budget Still at Impasse
The Pennsylvania General Assembly on June 30, the last day of FY2016-17, voted to send a $31.99 billion FY 2017-2018 spending plan to Governor Tom Wolf; however, no agreement has been reached on how to fund the bill. The bill would increase funding for public schools, but also calls for savings through consolidating several state departments.

Among the issues are: how to close last fiscal year’s $1.5 billion shortfall; how much to expand gambling in the state; and whether to borrow money against a state fund for a tobacco settlement.

To read The Philadelphia Inquirer’s article of July 5, please go to bit.ly/2u0cj70.

Complicating the budget negotiations, S&P Global Ratings on July 6 threatened to cut Pennsylvania’s AA- general-obligation bond rating a notch, which would likely drive up taxpayers’ annual borrowing costs. The warning reflects Pennsylvania’s eroding financial position, the article noted. To read The Philadelphia Inquirer’s article, please go to bit.ly/2sxUbNw.

City Combines Agencies
The City of Philadelphia last week reorganized its housing, development, and planning agencies under the new Department of Planning and Development, PlanPhilly reported on July 7, which will include the Philadelphia City Planning Commission, the Historical Commission, the Art Commission, and staff for the Zoning Board of Adjustment.

Development Services, formerly housed in the Commerce Department, will be expanded and housed in its own division.

The Division of Housing and Community Development will coordinate with the Philadelphia Redevelopment Authority, the Philadelphia Housing Development Corporation, and the Philadelphia Land Bank.

To read the PlanPhilly article, please go to bit.ly/2u0Q1lC.

Upcoming Events
Public Hearing for New CCD Plan and Budget
The Center City District (CCD) will hold a public hearing on July 18, from 12 noon to 6:00 p.m., on the CCD’s new proposed multi-year plan and budget (including proposed services and improvements, estimated costs and proposed method of assessment). The hearing will be held at Temple University – Center City Campus, 1515 Market Street, Room 322. (Enter through Temple University entrance on the plaza side of 1515 Market Street. Per Temple policy, ID is required for admittance.)

The CCD welcomes anyone who would like to testify on the many benefits the CCD provides. If you are interested, please contact Linda Harris at 215.440.5546, or email lharris@centercityphila.org.

To read the 2018–2022 Plan and Budget for the Center City District, published on June 13, please go to bit.ly/2uoxueU.

Amtrak Open House
Amtrak is hosting a public Open House on Wednesday, July 12, from 4:30 p.m. to 7:00 p.m. at 30th Street Station, North Waiting Room, to continue the planning and design process for the 30th Street Station District Plan, Station Plaza, a grand civic place surrounding all four sides of 30th Street Station.

Amtrak is seeking to choose a preferred concept for the plan; the Open House will offer the opportunity to review refined concepts, meet the project team and provide input. No registration required. For more information, please go to bit.ly/2tqipME.

Downtown Delivery Symposium
On Wednesday, July 12, from 9:30 a.m. to 12 noon, the Delaware Valley Regional Planning Commission (DVRPC) is hosting a Downtown Delivery Symposium to explore strategies to accommodate deliveries in traditional downtowns. The free forum will be held at the DVRPC Main Conference Room, 190 North Independence Mall West, 8th Floor.

To register, please go to bit.ly/2tqHXcG.

Developing a Design for the City Hall Courtyard
On Thursday, July 13, from 8:00 a.m. to 9:30 a.m., at the Center for Architecture + Design, 1218 Arch Street, the Design Advocacy Group (DAG) will present “Rethinking City Hall Courtyard: Options for the Future.”

Currently the Kenney Administration has a grant to implement short-term animation strategies for the City Hall Courtyard. In 2015-2016, the Center City District (CCD) retained Wallace Roberts & Todd (WRT) to work in partnership with City agencies and SEPTA to develop a vision for long-term improvements that might be synchronized with the next phase of renovation work for the Broad Street subway station.

Paul R. Levy, President and CEO of the CCD, will discuss the findings and recommendations from the WRT work.

The event is free. Registration not required. For additional information, please go to bit.ly/2rYttxc.

CPDC Young Professionals at Reading Terminal Market
The Central Philadelphia Development Corporation (CPDC) invites young professionals at member firms to CPDC’s Young Professionals Networking Series with Anuj Gupta, General Manager of Reading Terminal Market, on Thursday, July 20, from 5:30 p.m. to 7:00 p.m., Rick Nichols Room, Reading Terminal, 51 North 12th Street.

Network with other young professionals and learn about Philadelphia’s original farmers’ market and how a 19th century institution stays competitive in the 21st century. Enjoy complimentary appetizers from various Reading Terminal vendors, along with a wine and beer open bar.

To register, please go to bit.ly/2rLvLQ5.