Office Sector News
Axalta Moves Headquarters to Center City
Axalta Coating Systems, which supplies paints and powder coatings to carmakers and appliance manufacturers, has moved its global headquarters and about 100 employees from Wilmington, Delaware, to three floors of Commerce Square at 20th and Market Streets in Philadelphia. The City of Philadelphia provided business tax relief for two years, and a $885,000 loan to help with capital costs, according to KYW. Axalta indicates that they chose Center City in part because of the nearby universities and their engineering and business talent.
To read the KYW article, please go to cbsloc.al/1dWFma6.
Spring Garden Office Building Sold
Nightingale Properties and Carlton Associates Inc., both of New York City, have agreed to buy 1500 Spring Garden Street for an estimated $185 million, the Philadelphia Business Journal reported on October 7. The 12-story building, which has 1.1 million square feet, was put on the market this summer and the sale is being handled by Jones Lang LaSalle.
The building is 88% leased to tenants including Day & Zimmermann, CBS Broadcasting and Stantec Architecture Inc., the article noted.
Philadelphians Have Dim View of Taxes
A poll from The Pew Charitable Trusts shows that there is still widespread uncertainty and confusion among residents about the impact of the Actual Value Initiative (AVI), despite the fact that most analyses show that about two-thirds of all homeowners in the city will see a decrease, stay the same, or increase by less than $250 per year, while another 14% will see increases in the $250 to $500 range.
By a margin of 65% to 26%, respondents said they favored reducing local taxes on wages and businesses as a way to spur job creation, but due to the impacts of AVI, they opposed the idea of raising their property taxes to offset those reductions by a margin of 59% to 33%.
On the whole, Philadelphians appear to view taxes and government less favorably than they did in the four previous years that Pew polled residents in the city. To read the report, please go to bit.ly/GLXdW2 [PDF].
Logan Square Development Moves Forward
The Zoning Board of Adjustment on October 9 approved the variances needed for developer Neal Rodin's $140 million project featuring a new Whole Foods market and 293 high-end apartments in Logan Square. The project, designed by MV+A Architects of Bethesda, Maryland, will occupy almost the entire block between 21st and 22nd Streets, Spring Garden Street to Pennsylvania Avenue and Hamilton Street.
The food market will occupy 55,000 square feet and include a 5,000-square-foot café. The balance of the project will include nine stories of apartments, a five-story parking structure for residents, and below-ground parking for customers of Whole Foods,
Construction on the project, Rodin Square, is expected to begin in early 2014 and will take about two years. While the project is just a block north of the Rodin Museum, The Philadelphia Inquirer reports that project is taking its name from its developer, Neal Rodin. The site is currently occupied in part by a Best Western hotel.
To read the article and see a rendering of the project, please go to bit.ly/18PVx79.
UCD New Developments Documented in Report
The University City District (UCD) on October 1 released The State of University City, 2013/2014.
The 52-page report notes there are 25 new development projects (5.1 million square feet) either completed or advancing, including residential, medical, office and academic spaces.
Also, new housing construction is expected to increase the neighborhood’s population by approximately 10% over the next two to three years.
To read the report, please go to bit.ly/1eXDDEn.
New Definition of Downtowns and Their Live-Work Connections
On October 7, the Center City District presented a new, groundbreaking analysis that examines 231 major employment centers and their adjacent residential neighborhoods in 150 of America's largest cities, defined by total number of jobs, tracking their changes in the last decade.
The report was one of the featured presentations at the International Downtown Association's World Congress, October 6-9 in New York City. The 56-page report, Downtown Rebirth: Documenting the Live-Work Dynamic in 21st Century U.S. Cities, documented that America's 150 largest cities hold 30% of all jobs in the country; and that the 231 major employment centers within these cities contain 18.7 million jobs — 14.4% of all U.S. employment.
On average, the population of the 10 largest of these urban live-work areas grew by 17.2% between 2000 and 2010, while the U.S. population grew by only 9.7% during the same period.
The report was written by Paul R. Levy, CCD President and CEO, and Lauren M. Gilchrist, Manager of Research & Analysis at the CCD, with research support from the CCD staff. To read the report and for more information, please go to definingdowntown.org.
Eds and Meds News
Drexel Opens LeBow Hall
Drexel University on October 3 officially opened its new $92 million Gerri C. LeBow Hall, a 12-story, 177,500-square-foot, limestone and glass building at 33rd and Market Streets. The new building will house the LeBow College of Business, which will include a new school of economics that will offer master's and doctoral degrees in economics.
The new building was designed by Voith & Mactavish Architects of Philadelphia and Robert A. M. Stern Architects of New York.
Nordstrom Rack to Open in Center City
Nordstrom Rack will open a 39,000-square-foot store in fall 2014 at 17th and Chestnut Streets, in the former Daffy's building. Larry Steinberg and Paige Jaffe of CBRE Inc. brokered the 10-year lease, The Philadelphia Inquirer reported.
The store will be the Seattle-based Nordstrom's first in Philadelphia, the article noted. The retailer will renovate the first three floors for a shopping area and use a fourth floor for storage and offices. Plans for the additional five floors above Nordstrom Rack have not been announced.
To read the article, please go to bit.ly/15IPYt6.
Urban Outfitters Expanding
Urban Outfitters on October 7 announced that it was expanding its headquarters at the Navy Yard, where it will add an additional 2,000 jobs over the next few years, and will open a distribution center in Lancaster County, where the company will hire another 500 people, The Philadelphia Inquirer reported.
The company will invest $210 million in the projects to refurbish a 250,000-square-foot structure at the Navy Yard and construct a 1.2 million-square-foot distribution center in Salisbury Township.
Urban Outfitters is seeing growing catalog and online sales and also will expand into Asia with a store opening in Tokyo in the next few weeks.
To read the Inquirer article, please go to bit.ly/18K6DKP.
Arts and Culture News
New FringeArts Headquarters Opens
The new FringeArts Building at Race Street and Columbus Boulevard opened Friday night, though Phase One construction is not quite complete. The 240-seat theater is across the street from the Race Street Pier, and formerly was a municipal pump house. The FringeArts year-round programming will feature regional talents.
Phase two, which should begin in January, is the construction of the restaurant with a liquor license and outdoor garden plaza, Newsworks reported.
Bill Would Create TIF for Hotel Project
On October 3, Councilman William K. Greenlee on behalf of Council President Darrell L. Clarke, introduced Bill #130686, which would create a Headquarter Hotel Tax Increment Financing District for a proposed 700-room hotel that would include a 240-room W Hotel and 460-room Element by Westin at 1441 Chestnut Street, across from City Hall and next to the Ritz Carlton.
The hotel is being developed by Brook Lenfest's Chestlen Development, L.P., and will cost an estimated $280.4 million, of which $33 million would come from the TIF. Financing for the project is expected to be in place by January 1, 2014, also the effective date of the TIF. Construction is targeted to be completed by January 2017.
The development is projected to create 1,800 construction jobs and 450 permanent jobs.
To read an article about the project from Philadelphia Business Journal, please go to bit.ly/1hxr1Rt. To read the bill, please go to bit.ly/1bDhDy6.
State Legislature to Vote on Critical Transportation Bill
An all-important transportation bill is expected to be brought to a full-floor vote next week in the state House. Passing the bill would mean critical funding for roads, bridges, and mass transit in Pennsylvania.
The stakes are high because the bill, if not passed, probably will not come up for a vote again this year. The House and the Senate have been unable to agree on how to raise the money - or how much to spend, according to The Philadelphia Inquirer. Earlier this year the state Senate passed SB 1, which would increase transportation funding by $2.5 billion annually. That would mean about $400 million more a year for SEPTA to rebuild failing rail bridges, stations, and power equipment.
Without the new funds, bridges in disrepair are likely to be weight-restricted, mass-transit systems, such as SEPTA, will have to scale back both operations and capital projects, and shoddy roads will mean more traffic headaches for motorists.
To read the Inquirer article, please go to bit.ly/1gEobMT.
Amtrak Issues RFP for 30th Street Station Development
Amtrak, in partnership with Drexel University and Brandywine Realty Trust, on October 7 issued a Request for Proposals (RFP) for a master plan for redeveloping 30th Street Station and improving connectivity of the station to its surrounding area. The plan may include the development of air rights above the rail yards.
A Coordinating Committee made up of area stakeholders in the vicinity of 30th Street Station has been established to provide input and guide the master planning process. Committee participants include SEPTA, PennDOT, City of Philadelphia, the University of Pennsylvania, CSX Corporation, Philadelphia Industrial Development Corporation, Schuylkill River Development Corporation, and the University City District.
Parties interested in submitting a proposal should contact Carlton Myers at email@example.com. The closing date for proposals is November 18, 2013, at 2:00 p.m. For more information about the RFP, please go to procurement.amtrak.com.
To read the press release, please go to bit.ly/GJkp6t.
Host a Bike Share Station
The Mayor's Office of Transportation and Utilities (MOTU) is asking interested property owners, institutions, and businesses to submit an Expression of Interest if they are interested in hosting or sponsoring a bike share station. If your business or organization is interested in having a station located on or near your property, send a non-binding response to Aaron Ritz at firstname.lastname@example.org in the Mayor's Office of Transportation and Utilities.
For information on sponsoring or hosting a bike share at your location, please go to 1.usa.gov/18ttjyX [PDF]. The official City of Philadelphia Bike Share Website is phila.gov/bikeshare.
The deadline for expressing your interest has been extended until Friday, October 18.
Regional Rail Increases Property Values
Houses near SEPTA Regional Rail Stations in four suburban-Philadelphia counties have an average property value premium of $7,900 per house, according to a new study from Econsult Solutions, Inc. With 754,000 houses in this category, the aggregate value of these homes' premium value is about $6 billion, the study noted.
In some communities with high levels of rail service and parking capacity, the property value premiums can be as high as $37,300. The study was commissioned by SEPTA.
To read the Econsult Solutions report, please go to bit.ly/18S1ekT.
Parks and Open Space News
$5 Million Grant from William Penn Foundation for Waterfront
The Delaware River Waterfront Corporation (DRWC) has received a $5 million grant from the William Penn Foundation to further implement the DRWC's Master Plan for the Central Delaware, which advances "public access" to the Delaware River waterfront, the organizations announced on October 3.
The grant is expected to allow DRWC to continue its work on key projects, including a design for the central section of the Delaware River Trail between Spring Garden Street and Washington Avenue, and design and construction of a new park at Pier 68 in Pennsport.
A $5 million grant in 2010 was the catalyst for implementation of the Master Plan and yielded more than $14 million in capital investments for the waterfront from the Commonwealth of Pennsylvania and the City of Philadelphia.
To read a PlanPhilly article about the grant, please go to bit.ly/1cdSBVS.
Third Tax-Abatement Bill Would Require SRC to Approve
Councilman W. Wilson Goode Jr., continuing a legislative campaign to alter the city's successful residential real estate tax abatement program, introduced Bill #130724 on October 10. The legislation authorizes the School Reform Commission (SRC) to have the power, beginning July 1, 2014, to sign off on any tax abatement of the school district portion of the property tax. To read the bill, please go to bit.ly/GJSm7c.
This is Goode's third attempt to curtail the tax abatement. On September 19, the councilman withdrew his Bill #120651, and put his energy behind his second curtailment bill, introduced on September 12, Bill #130586. This legislation, still in council, would eliminate entirely the portion of the abatement of taxes going to the Philadelphia School District, cut the value of the incentive by more than half, and limit the exemption to the cost of construction or improvements. To read the bill, please go to bit.ly/1aI0SkV.
Meanwhile, five City Council members on September 30 officially requested a "Fiscal Impact Statement" to determine the financial effects of proposed changes to the City's tax abatement program.
The Council members are Democrats Bill Green, Kenyatta Johnson, Curtis Jones and Mark Squilla, along with Republican David Oh.
Council passed legislation last spring that enabled this request for a financial analysis, to be produced by Director of Finance Rob Dubow. This will be the first such analysis.
Currently property tax revenues are split roughly 55% to the School District and 45% to the City.
Council's Plan to Fund Schools Advances
City Council on October 10 gave preliminary approval to Bill #130577, which would allow a budget transfer of $50 million in City funds and make the money available immediately to the Philadelphia School District. In exchange, the School District would transfer to the City school properties no longer in use, and the City would sell them. Council believes there are at least eight school properties that have immediate sales potential and have a combined assessed value of $106 million. The bill, introduced by Councilwoman Jannie L. Blackwell on behalf of Council President Darrell L. Clarke, could come up for a final vote as early as Thursday, October 17. Mayor Michael A. Nutter opposes this approach to funding the schools.
Also on October 10, Councilman Bobby Henon, on behalf of Clarke, introduced Bill #130718, enabling legislation that authorizes the Commissioner of Public Property to accept title to the properties owned by the School District of Philadelphia and to convey them to the Philadelphia Authority for Industrial Development (PAID), for sale. After the first $50 million is cleared from sales, PAID can return the properties to the school district, if requested, or continue to market the properties.
For Bill #130577, please go to bit.ly/162Chjj.
For Bill #130718, please go to bit.ly/18VuuHz.
City Finance Director Rob Dubow testified at a recent hearing that Mayor Nutter prefers to follow the state funding package for Philadelphia schools that was approved by the General Assembly in June. Under the state funding plan, the City would extend its existing 1% sales tax (set to expire next June), and use the annual revenue stream to create a sustainable funding source for city schools. The first $120 million generated by the sales tax extension would go to the School District, the next $15 million would pay debt service on a short-term $50 million bond sale for the District's FY14 operations, and any sales tax revenues above that would go to the City's underfunded pension fund.
Cigarette Tax Bill Introduced in State House
State Representative Cherelle Parker (D., Philadelphia) on Friday introduced HB 1751, enabling legislation for a $2-a-pack cigarette tax passed by Philadelphia City Council last spring. The tax would provide an estimated $45 million for City schools. The bill is similar to SB 944, introduced last spring by state Senator Anthony H. Williams. That bill was passed by the Senate Finance Committee.
To read the new bill, please go to bit.ly/1agjTVx.
City Tax Collections Mixed in August
City of Philadelphia tax collections were $150.5 million in August, a 0.7% increase over the same month in 2012, according to the Pennsylvania Intergovernmental Cooperation Authority (PICA).
Wage and earnings tax collected was $116.5 million in August, a 5.3% decrease over the previous August.
Real estate transfer tax collected was $13 million in August, a robust 27.5% increase over August 2012.
To read the PICA report, please go to bit.ly/19yepUZ [PDF].
Opening Reception for Philly Green
On Thursday, October 17, from 5:30 p.m. to 7:30 p.m., the Philadelphia Center for Architecture, 1218 Arch Street, will host an opening reception for Philly Green.
Philly Green is a showcase exhibition for the best sustainable design from Philadelphia firms and will be on display from October 1 through November 22.
Explore the diverse range of trend-setting architectural, landscape, commercial, residential, and civic designs being produced today by Philadelphia-area firms and learn how Philadelphia is leading the way to a more sustainable built environment.
The opening reception is free and does not require registration. It will include light refreshments, music, and an opportunity to meet many of the architects and designers represented in the exhibition.
For more information, please go to PhiladelphiaCFA.org.
CPDC Young Professionals to Meet
On Thursday, November 7, from 5:30 p.m. to 7:00 p.m., the CPDC Young Professionals will meet at the Blank Rome Marvin Comisky Conference Center, One Logan Square, 130 North 18th Street, First Floor.
Jerry Sweeney, President and Chief Executive Officer of Brandywine Realty Trust, will be featured and will speak about why his company has invested strongly in Philadelphia and why tax reform is essential for job growth in the City.
Network with other young professionals and enjoy complimentary appetizers along with a wine and beer open bar.
The event is generously sponsored by Brandywine Realty Trust.
Please RSVP to email@example.com by 12:00 p.m. Thursday, October 31.