Office Sector News
Two Office Towers Sold
The 29-story 1835 Market Street, with 660,343 square feet (SF) of office space, 26,160 SF of retail, and a three-story, underground parking garage with 176 spaces, was sold for $100 million, the Philadelphia Business Journal reported on December 10.
The building was sold to a partnership between the New York firms Nightingale Properties and Carlton Associates by the California State Teachers' Retirement System.
Klehr Harrison is an anchor tenant. Douglas Rodio of JLL arranged the transaction.
To read the article, please go to bit.ly/1BPUt3v.
Meanwhile, on December 17, the Philadelphia Business Journal reported that the Arden Group had sold Seven Penn Center to Nightingale Properties for $39 million.
Nightingale plans to rebrand the 19-story, 286,574 SF building as 1635 Market Street and will invest $5 million to upgrade the building’s façade, main lobby, and elevators, the article noted.
Jones Lang LaSalle arranged the transaction.
To read the article, please go to bit.ly/1wMotcc.
Accounting Firm Moving Main Office to Center City
The accounting firm of EisnerAmper will relocate its main local office from Jenkintown to One Logan Square taking advantage of the expanded Job Creation Tax Credit Bill (#140641), sponsored by Councilman W. Wilson Goode, Jr. and unanimously approved in October by City Council, the Philadelphia Business Journal reported on December 18.
The latest version of the Business Income and Receipts Tax (BIRT) credit, which has been in place for more than a decade, extends the $5,000 BIRT credit from one year to five years for every new full-time job created, in which the employee is paid at least 150% of the federal minimum wage or $12 an hour (whichever is higher).
EisnerAmper signed a 15-year lease with Brandywine Realty Trust for approximately 42,000 square feet of space and will move into the new offices in November 2015, the article noted.
The deal was brokered by Jeff Seligsohn of SSH Real Estate.
To read the article in the Philadelphia Business Journal, please go to bit.ly/1xw5EwQ.
To read Bill #140641, please go to bit.ly/1wQfKWs.
Study Analyzes Growth Possible Through Innovation, Start-Ups
Econsult Solutions, Inc. and the CEO Council for Growth have released a technology commercialization study that examines the Philadelphia region's future economic growth.
The study sought to create a plan for the Philadelphia region to capitalize on its culture of innovation and entrepreneurship while measuring how the region stacks up with other leading regions in the country.
By one measure, the number of startup ventures, the Greater Philadelphia region ranks seventh behind Boston, New York, the Tech Coast, Pittsburgh, Raleigh-Durham, and Atlanta, the report noted.
The study sets a goal for the region's research institutions to create 10 companies that will grow to a total liquidity of $100 million or more over the course of the next 10 years and recommends government policies that demonstrate a commitment to innovation as an economic driver.
To read a summary of Technology Transfer and Commercialization in Greater Philadelphia, please go to bit.ly/1zXVkx0 [PDF]. To read the entire report, please go to bit.ly/1wBa2HU [PDF].
New Mixed-Use Project East of Broad
The Goldenberg Group has purchased 1213-1219 Walnut Street for $8.2 million from U3 Ventures and is expected to move forward with a 26-story apartment building that will have about 300 apartments and retail space at the ground level, the Philadelphia Business Journal reported on December 16. Goldenberg is reportedly doing the $100 million-plus project in partnership with Hines, a Houston-based development company, the article noted. The parcel is currently a surface parking lot.
The project has the potential to be an anchor east of Broad Street and could accommodate a large national chain store in the retail space, the article noted.
To read the article, please go to bit.ly/1zNZiXO.
Legacy of the Wage Tax
On the 75th anniversary of the passage of this “temporary” tax, Technical.ly Philly takes an in-depth look at the City Wage Tax from its beginning on December 13, 1939, when it was 1.5%, until today when the tax for residents is 3.92%. Philadelphia was the first municipality in the country to have its own income tax.
The article contrasts the perception of the wage tax among major employers and start-up firm employees and notes that for the first time in 20 years, there is no sustained plan in place to reduce the wage tax.
The article cites the CCD’s report, Pathways to Job Growth (centercityphila.org/docs/CCR14_employment.pdf), which notes that two-thirds of municipal tax revenue in Philadelphia comes from taxing “highly mobile” wages and profits, while in New York City and Washington, D.C., that figure is closer to one-third. Additionally, since 1970, employment in New York City, Boston, and Washington, D.C. has grown by double digits. In Philadelphia, the total has declined by nearly a quarter.
To read “Philly’s city wage tax just turned 75. Here’s its dubious legacy,” please go to bit.ly/1GoW53Z.
Unemployment Drops in Philadelphia
According to preliminary data released by the U.S. Bureau of Labor Statistics, the unemployment rate in Philadelphia declined to 6.6% for October 2014, a 3.3% drop from October 2013 and the lowest unemployment rate since April 2008.
The number of jobs in Philadelphia increased from September to October by 8,500, to 672,500.
To read the press release from Mayor Michael A. Nutter’s office, please go to bit.ly/1zAIFic.
Eds and Meds News
Catchment-Based Charter Proposed for Center City
MaST, a K-12 charter school operator, with an established school on Byberry Road in the Northeast, is proposing a geographic-based charter school in Center City that would give priority to students from ZIP codes 19102, 03, 06 and 07 (Vine to Pine). All other charters in Philadelphia draw citywide on a lottery basis. The school, to be named The Partnership School for Science & Innovation if approved by the School Reform Commission, would open in 2016.
MaST's Northeast charter has received an 86 rating from the Pennsylvania Department of Education School Performance, which compares favorably to neighborhood schools such as Greenfield (72), McCall (83) and Meredith (78), and to nearby charters such as Independence and Russell Byers (both at 74).
The school would open the enrollment to remaining neighborhoods should the catchment area not fill the school. The backup catchment areas would include ZIP codes to the north --19130 (Fairmount, Spring Garden, Franklintown); plus 19123 (Old City, Northern Liberties); and to the south -- 19146 (Graduate Hospital and Point Breeze); and 19147 (Queen Village, Bella Vista, and the Italian Market). In addition to providing the novelty of a catchment-based charter option, MaST's K-12 format would give the downtown area its only catchment-based high school.
For more information, please visit mastcentercity.org.
Large Majority of Students Would Recommend Philadelphia
A new study from Campus Philly finds that 73% of local college students, up from 55% in 2010, would recommend Philadelphia as a good place to live, the Philadelphia Business Journal reported on December 12.
However, fewer, 64% of respondents, chose to stay in the region immediately after college, compared to 71% in 2010. Of those who stayed (in the 2014 study), 76% were native to the Philadelphia region while 51% were from out of town. The decrease in students choosing to remain in the city was attributed to the weaker economy of 2010, which discouraged student mobility, the article noted.
In the most recent study, 57% percent reported they stayed for a year or more after graduation, compared to 61% in 2010.
Reported priorities included: post-graduation job prospects (61%); restaurants and nightlife (54%); public transportation (53%); and cost of living (45%).
To read the article, please go to bit.ly/1zuz79S.
SRC Adopts Five-Year Plan
The School Reform Commission (SRC) on December 18 adopted a five-year financial plan for the Philadelphia School District that maintains the status quo, but the SRC indicated that it would push a more-ambitious agenda requiring significant investments from the City and the Commonwealth, the Philadelphia Daily News reported.
The adopted plan shows a projected $30 million budget gap for the fiscal year that starts July 1, compared to a $216 million anticipated shortfall last year and reflects a continued rise in pension costs and charter-school payments. It assumes that health-care benefits imposed on the teachers' union will be upheld, which has not yet been decided by Commonwealth Court.
The district anticipates that some of that money will come from a new statewide fair-funding formula and an adjustment in the special-education allotment for charter schools, the article noted.
To read the article, please go to bit.ly/13Hokxh.
The Gallery To Become Fashion Outlets?
The Philadelphia Business Journal speculates that The Gallery at Market East will be re-branded as the Fashion Outlets of Philadelphia at Market East, according to an article published on December 15.
The article was based on information gathered at the International Council of Shopping Centers conference earlier this month.
Pennsylvania Real Estate Investment Trust (PREIT) and its development partner, Macerich of Santa Monica, California, already have announced an extensive renovation of The Gallery, and Macherich operates Fashion Outlets in other cities, the article noted.
PREIT currently is arranging financing, and expects to have it in place early next year.
To read the article, please go to bit.ly/13DStxi.
Four Seasons Hotel to Close in June
The Four Seasons Hotel at Logan Square will close in early June, undergo a multi-million-dollar renovation, and reopen in the fall as a new luxury hotel as part of the Host Hotels & Resorts Inc. group, The Philadelphia Inquirer reported on December 15.
The new brand has not been announced but Sage Hospitality of Denver will manage the transition.
Sage manages the Eilan Hotel Resort & Spa in San Antonio, Texas, the Nines in Portland, Oregon, Oxford Hotel in Denver, and about 60 other hotels.
The Four Seasons will reopen in the $1.2 billion Comcast Innovation and Technology Center, now under construction in the 1800 block of Arch Street. The foundation was poured on December 13.
The Fountain restaurant in the Four Seasons will stop serving dinner after December 27, but breakfast and lunch will continue, the article noted.
The new Comcast center is expected to open in early 2018.
To read the article, please go to bit.ly/1vWNjSW.
Observation Tower Expected to Open Next Summer
The 57th floor of One Liberty Place at 1650 Market Street, to be renovated to house an observation deck operated by the Paris-based Montparnasse 56 Group (M56), is expected to open next July, the Philadelphia Business Journal reported on December 17, following a press event on December 16 in City Hall.
The observation deck is likely to have a restaurant and space for private events, and will be open seven days a week year-round, the article noted. General admission to the deck will be around $18.
Evan Evans, general manager of the Le Meridien hotel, will leave that post and serve as general manager for the M56 Philadelphia project, the article noted.
To read the article, please go to bit.ly/1AlvUtm.
Company Chosen to Repair I-676 Bridges
Buckley & Company, Inc. of Philadelphia has been chosen by PennDOT as the low bidder to replace seven pedestrian bridges that cross over I-676 at 22nd Street, 21st Street, Benjamin Franklin Parkway/20th Street, 19th Street, 18th Street, and the Free Library and Family Court pedestrian bridges, The Philadelphia Inquirer reported on December 12.
The work, which will begin in February 2015, will be completed over the next five years and will cost $64.8 million, the article noted. Completion of the project is expected to be in fall 2019.
To read the article, please go to bit.ly/1xmlUAq.
In a front-page story in The Philadelphia Inquirer on Sunday, transportation writer Paul Nussbaum describes the expansive nature of this project, noting that it will remodel the cultural spine of the city, add more than 10,000 shrubs and trees, and improve the crossing at 20th and the Parkway. But several critics noted that despite the large construction budget, only one of the four openings between the bridges on the north side of Vine Street will actually be covered.
To read the article, please go to bit.ly/1zR4NX8.
PATCO Station at Franklin Square May Reopen
The Delaware River Port Authority (DRPA) board on December 10 approved $500,000 in the agency's 2015 capital budget to examine the possibility of opening the Franklin Square PATCO station, closed since 1979, The Philadelphia Inquirer reported. The cost of renovating the station beneath Sixth and Race Streets was estimated at $12 million.
A revised cost estimate should be completed by the end of the year and a ridership study should be available by January, the article noted, and the Franklin Square station funding was included in a $146 million capital budget approved to fund major construction projects on DRPA's four toll bridges and the PATCO commuter rail line.
The station now serves as an occasional storage site for construction crews working in the PATCO tunnel.
To read the article, please go to bit.ly/1GhIqM8.
Crowd-Funding a City’s Bike Lane
In Denver, the Downtown Denver Partnership, a business improvement district like the CCD, is leading the fund-raising efforts for a protected bike lane in the downtown that would provide a connector to already completed bike lanes, Next City reported on December 10. The Partnership is using a combination of private grants and crowdfunding to fund the bike lane’s construction.
The Partnership collected $120,000 in donations from private-sector businesses, the Downtown Denver Business Improvement District, and the Gates Family Foundation before going online. The goal is to raise about $36,000 through crowdfunding and just over $30,000 has been collected through the civc crowdfunding site Ioby.
Crowdfunding was also used in Memphis for raising $70,000 to enhance public grants used for building a bike lane, the article noted.
To read the article, please go to bit.ly/137zPOe.
To see the crowdfunding website Denver is using for their project, please go to ioby.org/project/arapahoe-street-protected-bike-lane.
William Penn Foundation to Fund Trail Development
The William Penn Foundation (WPF) will provide $8.6 million to partners Delaware Valley Regional Planning Commission (DVRPC) and Rails-to-Trails Conservancy (RTC) for their Circuit project, which will create 750 miles of bike trails in the region, of which 300 miles already have been built, the Philadelphia Business Journal reported on December 18.
DVRPC will receive $7 million over three years to support the final design and engineering work and RTC will use $1.6 million also over three years to implement a communications program to build awareness, the article noted.
Some of the trails to be completed are along the Delaware River in Philadelphia, Camden, Chester and Trenton.
To read the article, please go to bit.ly/1DRybAn.
With Gas Prices Low, Gas Tax Could Be Increased
With the recent decline in gasoline prices, Steve Lafleur of the Frontier Centre for Public Policy suggests in newgeography that now is the ideal time to raise the federal gas tax to boost the Highway Trust Fund without placing an additional burden on taxpayers.
The Congressional Budget Office estimates that Highway Trust Fund spending will exceed revenue by $167 billion over the 2015-2024 period, the article noted, and the Trust Fund has already received $54 billion in transfers from the treasury since 2008.
The author suggests that a bi-partisan proposal to increase the gas tax by 12 cents per gallon would leave gas prices below $3 per gallon, which is still a substantial overall decline, and indexing the gas tax to inflation would help to ensure that the Trust Fund doesn’t end up in this bind every few years, the article suggests.
An additional benefit would be to create jobs by investing in infrastructure.
To read the article, please go to bit.ly/1wQb8j5.
Parks and Open Space News
Extended Hours at Rothman Institute Ice Rink for Holidays
The Rothman Rink at Dilworth Park is offering extended hours throughout the holidays and will remain open seven days a week through February 22, 2015.
Admission is $3 for children, ages 10 and under, and $4 for adults. Skate rental is $8. The Rothman Institute Ice Rink is open to the public Monday through Thursday, 3:00 p.m. to 9:00 p.m.; Friday, 3:00 p.m. to 11:00 p.m.; Saturday, 11:00 a.m. to 11:00 p.m.; and Sunday 11:00 a.m. to 8:00 p.m., with these special holiday hours:
• Christmas Eve, December 24, 11:00 a.m. – 5:00 p.m.
• Christmas Day, December 25, 1:00 p.m. – 6:00 p.m.
• New Year’s Eve, December 31, 11:00 a.m. – 12:30 a.m.
• New Year’s Day, January 1, 11:00 a.m. – 11:00 p.m.
• Martin Luther King Day, January 19, 11:00 a.m. – 9:00 p.m.
• Presidents’ Day, February 16, 11:00 a.m. – 9:00 p.m.
A four-week Learn-to-Skate program is available on Sunday mornings at 9:30 a.m. and 10:15 a.m. Group rates are available for parties of 10 or more. Please email Groups@RinkManagement.com.
The Rothman Institute Ice Rink at Dilworth Park is operated and managed professionally by Rink Management Services Corporation (RMSC) of Mechanicsville, Virginia. For more information about the rink, please go to dilworthpark.org/rothmanicerink.
Governor-Elect Tom Wolf’s Transition Team
Governor-Elect Tom Wolf has invited almost 300 people to be a part of his transition team, including Edward M. D’Alba, President of the Central Philadelphia Development Corporation (CPDC). Others include Jerry Sweeney, President and CEO, Brandywine Realty Trust; and Nick DeBenedictis, Chairman, President and CEO, Aqua America.
The transition team is led by John Fry, President of Drexel University.
Wolf’s inauguration is set for January 20, 2015.
To view the list of transition team members, please go to bit.ly/16oJYqZ.
Bill Would Prohibit Parking on City Hall Apron
Councilman James F. Kenney on December 11 introduced Bill #141025, which would prohibit vehicles from parking on the north apron of City Hall.
The issue was highlighted in November when several news organizations began running photos of the parked cars on the apron next to the $55 million renovation of Dilworth Park. Kenney characterized the parking area as an eyesore.
To read a report from KYW, please go to cbsloc.al/1z5pBel.
To read the bill, please go to bit.ly/1AqGiOq.
New Sick-Leave Bill Introduced
Councilman William K. Greenlee on December 11 introduced Bill #141026, which would mandate paid sick leave for workers in the city. A similar Greenlee-sponsored bill passed by 11-6 in April 2013, but Mayor Michael A. Nutter vetoed it, and Greenlee did not have the 12 votes to override the veto. Nutter vetoed a similar bill in 2011.
Earlier this year, Mayor Nutter convened a Task Force on paid sick leave and suggested that the economy had recovered sufficiently to make sick-leave pay viable. The mayor said he would sign a bill, if passed. The bill would affect about 120,000 workers in the city, The Philadelphia Inquirer noted.
Businesses employing fewer than 10 workers would be exempt from the mandate as would independent contractors, seasonal workers, adjunct professors, employees hired for less than six-month terms, interns, pool employees, state and federal employees, and employees covered by bona fide collective bargaining agreements.
Under the provisions of the bill, employees could accrue up to 40 hours of paid sick time off per year, or the equivalent of a week off.
The Greater Philadelphia Chamber of Commerce is opposed to the measure, citing issues of competitiveness and the already-existing onerous tax burdens for businesses operating in the city.
The Public Health and Human Services Committee will hold a public hearing on the bill on Tuesday, January 27, 2015, at 10:00 a.m.
To read the bill, please go to bit.ly/1AuxYx6.
To read The Philadelphia Inquirer’s article about the Task Force and its findings, please go to bit.ly/1DQov9o.
Two 'Labor Peace' Bills Passed in Council
City Council on December 11 unanimously passed Bills #140829 and 140860, introduced by Councilman W. Wilson Goode, Jr., which would require “labor peace” agreements at Philadelphia International Airport and some hotels.
Bill #140829 requires ground handling service providers under contracts with air carriers, including subcontractors, to secure labor peace agreements to minimize the risk of service disruptions and lost revenue to the City. To read the bill, please go to bit.ly/1GUPzAp.
Bill #140860 requires a labor agreement in hotel operations that lease property from the City or are financed with City assistance. To read the bill, please go to bit.ly/1wI5uRd.
Labor peace agreements are part of a national campaign led by various national labor organizations in multiple cities.
City Improves Property Tax Collection
In 2013, the City of Philadelphia improved its performance on collecting property taxes, according to a new analysis by The Pew Charitable Trusts.
In 2013, 6% of property owners did not pay their tax bills in the year the money was due, down from 6.8% in 2012 and 9% in 2011, and represents the strongest tax collection performance since 2008, according to City data.
Still, when compared with 35 other cities studied by Pew, Philadelphia’s same-year delinquency rate remained roughly double the median rate of 2.7%. This median rate dropped from 3% a year earlier, and from 3.8% in 2011.
Because Philadelphia’s delinquency rate fell more than the median, the city improved its ranking among the other cities, dropping from the fifth-highest delinquency rate in 2011 to the eighth-highest in 2013. The seven cities with higher delinquency rates were Flint (Michigan), Detroit, Cleveland, Cincinnati, St. Louis, New York, and Miami.
To read the report, please go to bit.ly/1CbYlt9.
Two Fireworks Shows on New Year’s Eve in Center City
There will be two opportunities to see SugarHouse Casino’s New Year’s Eve Fireworks on the Delaware River Waterfront at Penn’s Landing.
The first show is at 6:00 p.m. and the second show is at midnight.
The show, approximately 15 minutes in length, has a beautiful backdrop with the illuminated Benjamin Franklin Bridge and, if viewed from Camden, the Philadelphia skyline.
For more information, please visit visitphilly.com/events/philadelphia/new-years-eve-fireworks/.
Franklin Birthday Celebration Will Honor Laurie Olin
On Friday, January 16, Landscape Architect Laurie D. Olin will be honored with the 2015 Franklin Founders Award at the Benjamin Franklin Birthday Celebration.
A free morning seminar, “Building the City,” will be presented from 9:00 a.m. to 10:30 a.m. at Benjamin Franklin Hall, 427 Chestnut Street.
Panelists will be Paul R. Levy, Executive Director of the Central Philadelphia Development Corporation; and Dr. Sandra L. Tatman, Executive Director of The Athenaeum of Philadelphia. The session will be moderated by Harris M. Steinberg, FAIA, Executive Director of the Lindy Institute for Urban Innovation, Drexel University.
At 11:00 a.m., a procession will leave from the American Philosophical Society Library, 105 South Fifth Street, and walk to Franklin’s Grave.
From 11:45 a.m. to 2:00 p.m., will be the luncheon honoring Laurie D. Olin at the Wyndham Philadelphia Historic District, 400 Arch Street.
Please visit ushistory.org/celebration for more information and registration.
The next edition of Developments will arrive in your Inbox on Monday, January 12, 2015. Happy holidays!