Office Sector News
Sales Volume Record
CBRE’s Greater Philadelphia Office MarketView for the third quarter of 2014 notes that the largest sales volume (in dollars) of office buildings ever recorded in Center City occurred during the 12-month period ending in the third quarter of 2014. The $2.16 billion in office building sales between October 1, 2013 and September 30, 2014 represents an increase of 385% compared to the previous year.
Counting a downtown inventory of 43,632,159 square feet, CBRE recorded an 86.2% occupancy rate and average asking rent of $26.55. In the Philadelphia suburbs, with 59,302,295 square feet of office space, the occupancy rate was 80.1% and the average asking rent was $24.76.
Among the highlights of the quarter, Liberty Property Trust officially broke ground on the 1.33 million-square-foot Comcast Innovation & Technology Center at 18th and Arch Streets, and Hill International Group announced it would relocate its corporate headquarters from Marlton, N.J., to a 60,000-square-foot space at One Commerce Square.
To read the report, please go to bit.ly/1shqZ9b [PDF].
Ground Broken for East Market Development
Mayor Michael A. Nutter joined Lieutenant Governor Jim Cawley and Councilman Mark Squilla on October 2 to break ground on East Market, a $230 million mixed-use development on Market Street between 11th and 12th Streets, owned by National Real Estate Advisors, JOSS Realty Partners LLC, Young Capital LLC and SSH Real Estate.
The first phase of development will consist of 107,000 square feet of new retail with frontage on Market Street and a 322-unit apartment building above the retail space.
Also included in the first phase is 34 South 11th Street, which will be transformed into 150,000 square feet of office space and an additional 44,000 square feet of ground-floor and second-floor retail space as Family Court exits for their new space on the 1500 block of Arch Street. The project is estimated to create 1,200 construction jobs and 300 permanent jobs.
The City has committed $4 million in capital funding as part of the 2015-2016 capital budget, which will be used for public improvements, and the Commonwealth of Pennsylvania has designated an additional $2.5 million in an Economic Growth Initiative grant for the development, bringing the total state investment to $10 million, the Mayor’s press release noted.
To read the Mayor’s press release, please go to bit.ly/1yI24jW.
Eds and Meds News
SRC Cancels Teachers’ Contract
On Monday, October 6, the Philadelphia School Reform Commission (SRC) unanimously voted to cancel its teachers' contract with the Philadelphia Federation of Teachers (PFT), The Philadelphia Inquirer reported.
The SRC, anticipating a legal challenge, was joined by the Corbett administration in asking state judges to affirm its right to break the contract.
The school district does not intend to cut the wages of 15,000 teachers and other support personnel, but the SRC plans to take over the administration of their benefits. Most PFT members will have to pay either 10% or 13% of the cost of their medical plan beginning December 15, depending on their salaries. They currently make no contribution. This change is expected to save the school district $54 million this school year, and as much as $70 million in subsequent years.
The district, joined by Corbett's Education Department, took steps to affirm the SRC's action, filing a motion in Commonwealth Court for declaratory judgment. The teacher’s union said it will fight the changes.
To read the article, please go to bit.ly/1y05hKk.
Uniqlo Opens on Chestnut Street
Uniqlo cut the ribbon on its new store at 1608 Chestnut Street on Friday, October 3. The new store has three floors and a mezzanine, includes a 2,500-square-foot children's department and is the largest of Uniqlo's 32 stores in the U.S.
The retailer offers mainstay pieces, seasonal goods, in-house designs, and collaborations, according to Philadelphia magazine.
To read the article, please go to bit.ly/1rSt4bE.
Reading Terminal Market Named Great Public Space
The American Planning Association (APA) has designated the 122-year-old Reading Terminal Market at 12th and Arch Streets as one of the 10 Great Public Spaces for 2014, the Philadelphia Business Journal reported on October 1.
One of the factors cited was that 100% of the market's 76 vendors are local, the article noted.
More than 6 million people visit the market annually and generate $50 million in annual sales.
To read the article and see the list of the other nine great public spaces, please go to bit.ly/1BDyUif.
Retail Space Available on Market Street
A 1,975-square-foot retail/restaurant space is for lease at 1701 Market Street. The space is on the ground floor of the Morgan, Lewis & Bockius office building, and will be available in spring 2015.
The retail space is being marketed by MSC as an opportunity to animate the ground floor of buildings along Market Street.
To view a photo and details about the space, please go to mscretail.com/property-listing/1701-market-street.
Formal Groundbreaking for Museum
Though construction began earlier this year, a formal groundbreaking ceremony for the $120 million Museum of the American Revolution was held on October 9.
The three-story, 118,000-square-foot museum will display artifacts from the War of Independence, including George Washington's headquarters tent, a flag that declared his presence as commander in chief, and an array of firearms, swords, and artwork from the period, the article noted. The museum is located at Third and Chestnut Streets across from the First Bank of the United States.
Also at the ceremony, a liberty tree was dedicated to H.F. "Gerry" Lenfest, chairman of the museum's board of directors and primary funder. The museum was designed by Robert A. M. Stern Architects.
To read the Associated Press article, please go to bit.ly/1vRCqou.
Residential Market News
Why Philadelphia Is Not New York City
As Philadelphia approaches the Mayor’s race in 2015, comments by local analyst Kevin Gillen, quoted in the Bond Buyer, about the differences between Philadelphia and New York City’s housing markets provide some perspective on how local housing policy needs to be tailored to local market conditions.
Gillen told Philadelphia analysts that the property tax abatement for development, challenged frequently in City Council, has enabled a 177% increase in housing construction since 2000.
He urged investors to involve themselves with local issues such as the abatement, tax delinquency, vacant land and the ongoing actual value initiative, or AVI, which corrects decades of inaccurate assessments and, Gillen says, makes broader tax reform possible.
To read the article, please go to bit.ly/Zul0CL (Requires registration).
SEPTA Extends Late-Night Service Indefinitely
SEPTA announced on October 8 that it would continue the 24/7 weekend subway service indefinitely. The service was extended between midnight and 5:00 a.m. beginning June 15 on a trial basis and has seen an increase of 9,000 riders over the Nite Owl street-level bus service, during the period.
Over the Fourth of July weekend, 25,000 riders used the service, SEPTA’s press release noted.
Passenger safety was also evaluated during the pilot and SEPTA found that with a proactive increase in SEPTA Police presence on overnight trains, safety issues were minimal.
To read the press release, please go to bit.ly/1ydkibX.
SEPTA Anticipates Growth in Revenue, Expenses
The SEPTA fiscal year 2015 (FY15) operating budget anticipates $1.33 billion in operating expenses, with passenger revenue projected to increase by $7 million, or 1.5%, and ridership to remain level. The state operating subsidy is $586.3 million, with a local match of $88 million.
Expenses are calculated at $1.33 billion.
SEPTA also reports that, based on Delaware Valley Regional Planning Commission (DVRPC) data, for the first time since 1960, public transportation ridership entering and leaving the central business district is increasing, while highway volumes are decreasing. Public transportation trips have increased by 10% percent over the last five years, while highway trips have declined by 2%.
In its five-year plan, SEPTA expects revenue to grow approximately 1% per year, except in Fiscal Year 2017 when the next fare increase is scheduled.
Total revenue is expected to rise to $1.5 billion by FY20, with a subsidy of $918,901 million, and expenses are projected also at $1.5 billion.
To read the proposed budget, please go to bit.ly/1rlMyAi [PDF].
Plan for I-676 Bridges Revised for World Meeting of Families
Construction will halt on August 31, 2015, during Part 1 of PennDOT’s project to replace the I-676 bridges on the north edge of Logan Square. The stoppage is planned to accommodate the World Meeting of Families, which begins Monday, September 21, 2015, and closes on Friday, September 25, and is expected to bring more than one million people to the Benjamin Franklin Parkway. Pope Francis is expected to attend, which could further increase the number of people attending.
The construction project is scheduled to resume on October 1, 2015, and to be completed in June 2017, in time for the Parkway’s Centennial Celebration.
Part 2 (the 18th, 21st and 22nd Street bridges) will begin June 2017. The completion date has not been announced.
To see maps and the latest schedule, please go to bit.ly/1uScqKm [PDF] (Dropbox sign-in required.).
Frontier Airlines to Offer Nonstop Service
Frontier Airlines, which has new owners, will offer nonstop flights from Philadelphia International Airport to Miami, Orlando, and Tampa, FL, and Cancun, Mexico, in December, and to Atlanta, GA; Charlotte, NC; and Chicago, ILL next spring, The Philadelphia Inquirer reported on September 30. Frontier is based in Denver.
Frontier discontinued service from Philadelphia in January 2013, soon after it began flights from Trenton-Mercer Airport.
However, Frontier was acquired last fall by Indigo Partners of Phoenix, whose founder, William Franke, had been chairman of Spirit Airlines. Indigo is remaking Frontier as an ultra-low-cost airline, modeled after Spirit, which offers low base fares but charges extra for everything, including carry-on bags, the article noted.
To read the article, please go to bit.ly/10jrftY.
In other airport news, Spirit Airlines on September 30 announced that it would add a new daily nonstop route from Chicago's O'Hare International Airport to Philadelphia.
To read the press release, please go to bit.ly/1rvTwZy.
Parks and Open Space News
Schuylkill Banks Boardwalk Opens to the Public
The Schuylkill Banks Boardwalk, which serves as a connector for the Schuylkill Banks trail from Locust to South Streets, was opened to the public on October 2, The Philadelphia Inquirer reported.
The $18 million project was paid for with $10 million in federal funds, $3.5 million in state grants, and contributions to the Schuylkill River Development Corporation.
Entrances to the 2,000-foot-long concrete pathway along the eastern shoreline are located on the east side of the Schuylkill River near Locust Street and both the north and south sides of the South Street Bridge.
To read the article, please go to bit.ly/1CHTxw0.
Land Bank Releases Draft Plan
There are approximately 8,000 vacant properties in the public inventory that are not committed to a pending project, and an additional 24,000 privately-owned properties that are both vacant and tax delinquent, according to a draft strategic plan released by the Philadelphia Land Bank on October 1. About 23,000 of the properties are individual lots and about 9,000 are vacant buildings.
The plan offers several recommendations to expedite the reuse of these properties. To read the draft plan, please go to bit.ly/1r8u861 [PDF].
To read the PlanPhilly article about the plan, please go to bit.ly/1CG6Flk.
Pennsylvania Legislature’s Session Nears End
Two voting days remain, October 14 and 15, before the Pennsylvania General Assembly recesses for the November 4 General Election. The Pennsylvania House and Senate both took action last week to expand access to the Educational Improvement Tax Credit (EITC) and the Educational Opportunity Scholarship Tax Credit (OSTC) programs, which provide tuition assistance to economically disadvantaged students in low-achieving schools, the Greater Philadelphia Chamber of Commerce reported in its Weekly Report from City Hall and Harrisburg.
HB 1207 (bit.ly/1EENlXD) was approved 192-6 by the House. The Senate is advancing House Bill 91 (bit.ly/1yXmXYH [PDF]), which includes similar EITC/OSTC provisions, and adds language to expand the City Revitalization and Improvement Zone (CRIZ) pilot program.
Legislation sponsored by Representative John Taylor (R., Philadelphia) to make the Conservatorship Act process easier and faster for non-profits and other entities to eliminate blighted properties in their communities is awaiting the governor’s signature. The bill cuts in half the time a delinquent homeowner has to repair a property and requires the owner to post a bond for the cost of the repairs.
To read HB 1363, please go to bit.ly/ZTP9wb.
Bill Would Regulate Pop-Up Vendors
On October 2, Councilwoman Jannie L. Blackwell, on behalf of Council President Darrell L. Clarke, introduced Bill #140740, which would regulate pop-up shops in Philadelphia. In the bill, a pop-up shop is defined as “an outdoor market consisting of a number of individual stalls or tables where vendors exhibit, display, offer for sale or sell new or used merchandise in an area on a regular basis, on designated days and at designated times.”
The bill would require pop-up vendors to apply for a license from the Department of Licenses and Inspections, which would have 30 days to accept or reject the application.
The bill was referred to the Committee on Licenses and Inspections.
To read the bill, please go to bit.ly/1o45itS.
Econsult Solutions Forges New Partnership With Drexel
Econsult Solutions, Inc. (ESI) and the School of Economics in Drexel University's LeBow College of Business will collaborate as academic and corporate partners and ESI’s partners will expand their teaching of micro and macroeconomics, public finance and international economic development, applied econometrics and business consulting.
As a corporate partner, ESI will contribute to Drexel's tradition of experiential learning, academic excellence and participation in real-world problem solving. ESI will also continue to perform economic analyses related to Drexel's overall development and capital investments.
ESI is working closely with the Drexel Economics Society, a student-run organization on preparing an annual case competition and also a joint conference on urban economics.
To learn more about the new partnership, please go to lebow.drexel.edu/news/econsult-solutions-and-school-of-economics-sign-collaboration-agreement.
Pet-Friendly Family Fun Days at Sister Cities Park
The lively autumn celebration, Fall Family Fun Days with Furry Friends, at Sister Cities Park, 18th Street and Benjamin Franklin Parkway, will continue the next two Saturdays – October 18, and 25, from 10:00 a.m. to 2:00 p.m.
Kids and families are invited to bring their leashed pets to the park for family- and pet-friendly activities, live music, fall-themed food and drinks, demonstrations, and free hayrides around the park.
Throughout the month, a scarecrow festival will bring a host of these original creations to the Children’s Discovery Garden, presented by Philadelphia Parks & Recreation’s after-school program.
Partners from the Barnes Foundation, The Galleries at Moore, the Clay Studio, the Free Library of Philadelphia, the Franklin Institute, Fairmount and Queen Village Art Center, and Philadelphia Parks & Recreation will offer interactive crafts, games, and story-telling, all celebrating the animal theme. The Barnes Foundation will bring art adventures with a new kids' app plus a collage-bag project inspired by Dr. Barnes' beloved dog, Fidèle.
For more information, please visit SisterCitiesPark.org.
OctoberFest at Dilworth Park
OctoberFest at Dilworth Park, presented by Saul Ewing, takes place Saturday, October 18, and Saturday, October 25, from Noon to 6:00 p.m., and on Thursday, October 23, from 6:00 p.m. to 8:00 p.m. The fall festival will fill the park with DJ-hosted music, other fun activities, and ZipCar will host face painting and balloon giveaways. The Franklin Institute will provide live science demonstrations and the City of Philadelphia Mural Arts Program will host pumpkin painting. In addition, there will be oversized games such as Connect 4 and Tic Tac Toe, along with the Saultoberfest Beer Garden hosted by Jose Garces’ Rosa Blanca Café, for those over 21 years old.
For complete information, please visit DilworthPark.org.
GPCC Listening Tour on October 20
The Greater Philadelphia Chamber of Commerce launched in July the Roadmap for Growth campaign, designed to spark a broad, civic conversation about job creation, economic growth, and the next set of elections for Mayor of Philadelphia and City Council. A series of Listening Tours were planned to gather ideas and foster civic engagement.
The next Listening Tour will be Monday, October 20, at Shiloh Baptist Church, 2040 Christian Street, from 6:00 p.m. to 7:30 p.m. Please RSVP to Brittney Miller (email@example.com).
To learn more about the Roadmap for Growth, please go to roadmapforgrowth.com.
Third-Annual School Fair
The third-annual free School Fair, designed to help parents sort out options for elementary schools in and near Center City, will be held October 22, from 5:00 p.m. to 7:00 p.m. at the Franklin Institute, 222 North 20th Street. Admission is free for fair attendants and discounted parking is available.
Representatives from public, charter, independent and parochial elementary schools will be on hand to talk with parents from the neighborhoods represented by the Center City Residents, Logan Square Neighborhood, and South of South Neighborhood Associations.
For more information, please go to on.fb.me/1s9Rqis.