Hotel and Condo Tower Coming to Broad and Spruce
Developer Carl E. Dranoff will partner with SBE Entertainment Group of Los Angeles to build a $200 million, 47-story, mixed-use luxury hotel and condominium tower at Broad and Spruce Streets, across from the Kimmel Center, The Philadelphia Inquirer reported on December 17.
The building, to be named SLS International, is being designed by the firm Kohn Pedersen Fox Associates. The 422,838-square-foot tower will be 562 feet tall with separate lobbies for the hotel and residences. It will have street-level retail and a 6,000-square-foot glass ballroom on the fifth floor overlooking the Kimmel Center, along with 220 spaces for parking.
The hotel will have 149 rooms on the lower floors; 125 residential condos will occupy the upper floors. To read the news article, please go to bit.ly/1jAqPan.
Council Approves Hotel TIF
City Council on December 12 passed Bill #130686, which will create a Headquarter Hotel Tax Increment Financing District for a 700-room hotel that will include a 240-room W Hotel and 460-room Element by Westin at 1441 Chestnut Street.
The vote on the bill was delayed nearly two hours after Council President Darrell L. Clarke called a recess to give the developers and union representatives more time to hash out a "labor peace agreement," which they accomplished, The Philadelphia Inquirer reported.
The Philadelphia Convention & Visitors Bureau, the city Commerce Department, and the Philadelphia Industrial Development Corporation supported the bill.
The hotel is being developed by Brook Lenfest's Chestlen Development, L.P. The project is expected to cost $280.4 million to construct, of which $205 million – or 73% – would be financed privately, while $75 million – 27% – would come from public financing, including the $33 million in tax increment financing, along with other public investments, including $25 million in RCAP funding from the Corbett Administration.
Construction is targeted to begin in early 2014 and to be completed by January 2017. The development is projected to create 1,800 construction jobs and 450 permanent jobs.
The enabling bill was introduced on October 3 by Councilman William K. Greenlee on behalf of Council President Darrell L. Clarke. To read the bill, please go to bit.ly/1bDhDy6.
Eds and Meds News
Drexel Opens Research Institute
Drexel University on December 16 announced the opening of the A.J. Drexel Institute for Energy and the Environment, a 50,000-square-foot renovated space for offices, labs, and collaboration rooms at 3101 Market Street. The institute will focus on the science, economics, and politics that influence decisions about energy and the environment and will serve as a resource for decision makers both in the region and around the world.
The institute will bring together researchers from Drexel's various colleges along with its Academy of Natural Sciences.
The six designated research areas will be: Energy, Environment & Society; Energy Scenarios; Energy-Effective Design; Energy Storage Technologies; Energy Systems, Analytics and Control; and Energy Sources.
The University is conducting a national search for a director.
To read the press release, please go to bit.ly/18wFaj3.
For an interview in which John Fry outlines his ambitious economic development plans for areas adjacent to the Drexel campus, see a recent interview in Hidden Philadelphia: bit.ly/1bQhLnx.
Restaurant Week Arrives in January
The next Center City District Restaurant Week will take place January 19 – 24 and January 26 – 31, 2014. More than 100 restaurants will offer a three-course dinner for only $35, and some of the restaurants also will offer a three-course lunch for $20.
For a complete list of restaurants, please visit centercityphila.org/RestaurantWeek, where you can make a reservation through OpenTable.com. Also, you can use the mobile website, m.centercityphila.org, to browse menus, get maps and make online reservations from any smartphone. Keep up with the latest Restaurant Week news on Twitter @PhilaRestWeek. Make your reservations early!
South Broad Retail Space Available
With the closing of Robinson Luggage on the southeast corner of Broad and Walnut, a prime Center City retail location has become available. The first-floor space is nearly 5,000 square feet and has 148 feet of glass windows.
For more information on this choice location, please contact Michael Gorman or Steven Gartner at 215.893.0300.
Former Convention Center Leader to Help With Transition
Ahmeenah Young, who recently stepped down as president and CEO of the Pennsylvania Convention Center, will remain with the center for 18 months as a consultant, the Philadelphia Business Journal reported on December 18. Young will aid in the transition, as SMG, the private company hired to manage the center, takes over operations.
John J. McNichol, vice chairman of the Pennsylvania Convention Center Authority board, will serve as acting president and CEO until a permanent replacement can be found.
To read the article, please go to bit.ly/19VpTDq.
SugarHouse Revenue Rises Slightly in November
Revenue at SugarHouse Casino on the Delaware River increased for the second month in a row, though November's rise was less pronounced than October's, according to the Pennsylvania Gaming Control Board.
In November, the casino took in $21,801,671, compared to October's $21,313,889. The Commonwealth's share of taxes was $5,811,985 in November, compared to $5,733,352 in the previous month. The City of Philadelphia collected $722,899, compared to the $712,332 of October.
To see all casino revenues, please go to bit.ly/16izgf9.
Manufacturing Activity Positive for Seven Months
Manufacturing activity in the region in December was similar to November's with positive readings in most indicators, according to firms responding to December's Business Outlook Survey, produced by the Federal Reserve Bank of Philadelphia.
The overall outlook has been positive for seven consecutive months with the number of firms reporting an increase in new orders this month (35.4%) outpacing the 20.0% that reported a decrease.
The number of companies reporting an increase in full-time employment (17.0%) was slightly higher than those reporting a decrease (14.8%).
Firms' employment forecasts for the next six months remained optimistic, with 27.3% expecting to add workers and only 11.3% planning to reduce the number of employed.
To read the report, please go to bit.ly/19fIgsu [PDF].
Manufacturing Task Force Offers Analysis and Recommendations
On December 19, Mayor Michael A. Nutter presented the findings of the Manufacturing Task Force's study, a 97-page report with recommendations for making the city more competitive for manufacturing.
Among the findings: Philadelphia city manufacturers pay $1.3 billion in annual wages to 23,000 employees, who earn an average of $58,997 a year, The Philadelphia Inquirer reported. The 750 manufacturing firms in the city include 575 that employ fewer than 20 people.
The city's transportation infrastructure is an advantage, while the city's complicated tax structure is a source of complaints.
The report recommends expanding technical training programs in community colleges and increasing high school and technical education programs in science, technology, engineering, and math (STEM).
The report suggests financial incentives such as new loan and/or equity funds targeted specifically to small and mid-size manufacturers investing in product development and innovation.
To read the report, Manufacturing Growth Strategy for Philadelphia, please go to bit.ly/19CpoC1 [PDF].
Arts and Culture News
Survey of Cultural Groups Released
A new study commissioned by the Greater Philadelphia Cultural Alliance suggests that arts and culture organizations have stabilized in the last year, as 43% of organizations surveyed said they expect their business outlook to improve in the next year, while just 7% expect things to get worse, the Philadelphia Business Journal reported.
In addition, staff levels seem to have leveled off, with 72% reporting they haven't reduced staff size or hours in the past year and don't expect to in "the immediate future."
The study, 2013 Cultural Alliance Salary & Benefits Report, also examined compensation of the organizations' leaders. The median salary for an executive director was $100,000, according to the article. The survey was conducted by Gallagher Benefit Services Inc.
To read the article from the Philadelphia Business Journal, please go to bit.ly/1fhqwev.
To order a copy of the report, please go to .philaculture.org/research/2013-salary-benefits-report. The cost of the report is free for participants in the survey; $50 for Cultural Alliance members, $75 for non-members.
Airline Merger Finalized
American Airlines AMR Corporation and US Airways Group on December 9 announced the completion of their merger to form American Airlines Group Inc., the world's largest airline, The Philadelphia Inquirer reported.
The new company is incorporated in Delaware, but will be based in Fort Worth, Texas. About 6,600 US Airways employees are based in Philadelphia, and the airline plans to maintain the Philadelphia hub and eight others in the U.S., the article noted.
The new American will have 6,700 daily flights to more than 330 destinations in more than 50 countries, and more than 100,000 employees, according to the article.
To read the Inquirer article, please go to bit.ly/Jkvhcv.
SEPTA Planning for Capital Improvements
The $2.3 billion state transportation bill signed by Governor Corbett in November has enabled SEPTA to create a new budget that will provide for repairs to aging vehicles and infrastructure, and to keep trains and trolleys running on routes that had been threatened with shutdown, The Philadelphia Inquirer reported on December 20.
SEPTA is working on doubling its annual spending for vehicle purchases and construction projects to $600 million (from $300 million) within five years, the article noted. Among the shorter-term goals are replacing the 43-year-old Silverliner IV railcars that make up two-thirds of its fleet, the article noted.
Among the longer-range plans is the rebuilding of the subway station and the pedestrian concourses beneath City Hall that connect to the Dilworth Plaza improvements.
To read the article, please go to bit.ly/1l9GOHO.
PATCO to Test Refurbished Cars
PATCO announced on December 11 that it had taken delivery of the first two of its refurbished cars to be used on the commuter train line between South Jersey and Philadelphia, Newsworks reported. Six more are to be delivered and all will be put into service after testing.
The cars have bicycle and wheelchair parking areas, brighter colors, new seats, and upgraded heating and cooling systems, as well as upgraded brakes and new security cameras.
PATCO is planning to refurbish all its cars over the next three years at a cost of $194 million, of which about $70 million will come from federal money.
To read the article, please go to bit.ly/1cp9N5G.
In other PATCO news, PATCO officials on December 11 agreed to pay SEPTA $100,000 to repair elevators at stations in Center City and South Jersey, The Philadelphia Inquirer reported. A $1.39 million maintenance contract approved in September with the escalators' manufacturer fell through, the article noted, leaving six of PATCO's 14 elevators out of service.
To read the article, please go to bit.ly/19twI2R.
Residential Market News
Center City Luxury Condos Gaining Attention
Center City's luxury condo towers such as 10 Rittenhouse Square and 1706 Rittenhouse have vaulted Philadelphia into a sphere of luxury competitive with New York, according to an article in Bloomberg published on December 13.
This year so far, eight units at $3 million or more sold at either 10 Rittenhouse Square or 1706 Rittenhouse Square, the article noted, and most of the sales were in cash. All but six of the 143 units at 10 Rittenhouse Square have been sold. At 1706 Rittenhouse, the 7,725-square-foot penthouse traded for $12.5 million in June 2010, one of the highest prices on record in the city, according to the article.
Luxury retailers such as Stuart Weitzman, Swarovski, and Ulta boutiques have followed the luxury residences into Center City.
To read the article, please go to bloom.bg/19K0HzH.
Parks and Open Space News
Bryan Hanes to Design New Pier Park
Studio Bryan Hanes and his team, many of whom worked on Sister Cities Park, 18th Street and Benjamin Franklin Parkway, were chosen to create a new park at Pier 68 in South Philadelphia, PlanPhilly reported on December 9. The pier is near the Walmart on Columbus Boulevard.
Seven firms responded to the request for proposals (RFP), and the Delaware River Waterfront Corporation's board of directors executive committee made its choice at the recent December meeting, the article noted.
The new park will have wetlands, fish-cleaning stations, and places to temporarily dock small boats, such as kayaks.
Others on the team include Bittenbender Construction, DIGSAU Architects, and Azavea, a GIS firm.
Work is expected to begin as soon as the contract is finalized, and the park is scheduled to be completed by the second week in August, when the Bassmasters fishing tournament comes to Philadelphia.
To read the PlanPhilly article, please go to bit.ly/1gWXjqD.
City Launches Tax-Relief Program
The City of Philadelphia has launched a new program to help longtime homeowners manage large increases in their property taxes as a result of the City's Actual Value Initiative. The Longtime Owner Occupants Program (LOOP) is designed to help approximately 80,000 Philadelphia senior citizens and homeowners in financial need.
The program was enabled by HB 390, introduced by state Representative Michael H. O'Brien (D., Philadelphia), and was signed into law by Governor Tom Corbett on November 27. To read the bill, please go to bit.ly/18knnvw.
The requirements to qualify for LOOP include: you must have owned your house since at least July 1, 2003; the tax year 2014 market value of the property minus the $30,000 Homestead Exemption must be triple the 2013 property value; real estate taxes must be up to date; the property cannot be tax-abated; and household income guidelines must be met. For example, the maximum household income for a family of four is $118,800.
The deadline to apply was January 15, but City Council passed and Mayor Michael A. Nutter signed Bill #130854, introduced by Councilman Curtis Jones, Jr., on behalf of Council President Darrell L. Clarke, that extends the deadline from January 15 to February 17 of each year. To read the bill, please go to bit.ly/INQB9O.
For an application or complete information on LOOP, please go to the City's website at phila.gov/loop/Pages/default.aspx.
Land Bank Bill Passes
City Council on December 12 unanimously approved the creation of the Philadelphia Land Bank, which will expedite the process for turning over 40,000 abandoned properties (10,000 of which are publicly-owned) to responsible tax-paying owners.
Affordable housing advocates and community organizations, including the Greater Philadelphia Chamber of Commerce, supported the idea of a land bank not only to dispense vacant land to community groups that can use them to enhance their neighborhoods, but for the economic impact of putting vacant parcels into developers' hands to create housing opportunities.
To read Bill #13015601, introduced by Councilwoman Maria Quiñones-Sanchez on March 7, please go to bit.ly/1cr5NoL.
Bill to Change Business Income and Receipts Tax Advances
After a lengthy hearing, the Finance Committee of City Council on December 11 approved Bill #130530, introduced by Councilwoman Maria D. Quiñones Sánchez and Councilman Bill Green, which would eliminate the net income portion of the Business Income and Receipts Tax (BIRT) over five years and quadruple the gross receipts portion, from the current 1.415 mills to 5.27 mills in fiscal year 2019.
The Greater Philadelphia Chamber of Commerce, along with the African-American Chamber of Commerce, the Greater Philadelphia Hispanic Chamber of Commerce, the Asian-American Chamber of Commerce of Greater Philadelphia, and the Greater Northeast Philadelphia Chamber of Commerce, testified that they support tax reform. However, they stated they would prefer that council waited until the Nutter administration completed its economic impact study of the bill before Council votes.
To read the bill, please go to bit.ly/19TfbNS.
To read the testimony of the GPCC and others before the Finance Committee, please go to 1.usa.gov/18XdP7P [PDF].
Leadership Changes in Nutter Administration
Mayor Michael A. Nutter on December 13 announced changes in the senior leadership of his administration. Thomas Knudsen, Chief Revenue Collections Officer, who is leaving the job, will be replaced by Revenue Commissioner Clarena I. W. Tolson, who will hold both positions.
The mayor named David Perri, P.E., as the new Commissioner for the Streets Department. Perri replaced Tolson when she moved to the Revenue Commissioner's job in April.
Also, Brian Abernathy was named Executive Director at the Philadelphia Redevelopment Authority (PRA). Abernathy manages PhillyLandWorks, the single point-of-contact for the sale of publicly owned property, and in the coming months, he will focus on transitioning this system and its properties to Philadelphia's new Land Bank.
To read the press release, please go to bit.ly/1dnlgo3.
AVI-Related Bills Passed In General Assembly
Two bills that were part of the Property Tax Relief Package in the Pennsylvania General Assembly have become law.
On November 27, Governor Corbett signed into law HB 388, introduced by Representative Cherelle Parker (D., Philadelphia), which amended the Municipal Claim and Tax Lien Law, so that a lien could be placed against all of a property owners' real estate located within the Commonwealth, rather than just the specific property on which taxes are delinquent. When the property owner attempts to sell any of his/her property located within the state, the lien must then be satisfied. To read the bill, please go to bit.ly/15MYYMs.
HB 391, introduced by Representative Michael P. McGeehan (D., Philadelphia), allows eligible homeowners in Philadelphia to pay property taxes in installment payments. The City will be allowed to set the frequency and eligibility of these payments. The bill can be read at bit.ly/15Rm4kL.
State Facing Budget Shortfall in Next Fiscal Year
The Commonwealth of Pennsylvania could be facing a budget shortfall of at least $1.2 billion in the next fiscal year (FY2015), which begins on July 1, 2014, State Budget Secretary Charles Zogby said in his mid-fiscal year update presented on December 18.
The rapid increase of pension costs plus the growing costs for healthcare for the poor were pegged as contributing reasons for the projected gap in the state finances. However, Zogby signaled that there was little appetite for more of the deep spending cuts for public schools and social services of the recent past, The Philadelphia Inquirer reported.
Zogby did not indicate how additional money would be raised, although there have been discussions about postponing some of the state's immediate pension fund payments, legalizing and taxing online casino gambling, introducing keno to the lottery games, and privatizing the state's liquor stores.
To read the article from The Philadelphia Inquirer, please go to http://bit.ly/1fV2xCX.
To view the Power Point charts from the presentation, please go to bit.ly/1fpYjSN [PDF].
State Bill Alleviates AVI Effect on CCD Assessments
Following approval in the House, the Pennsylvania Senate on December 11 passed HB 1644, which will enable the Center City District to calculate its assessments on residential owner-occupants in a manner that will minimize the impact of the City's Actual Value Initiative. The Governor is expected to sign the bill today.
In 2012, a change to the Commonwealth's Municipality Authorities Act (the state law that governs the CCD) enabled the District to reduce by 50% the charges that are levied on residential single-family, cooperative and condominium properties. This reduced the share of the CCD's annual budget assessed to residential owner-occupants from 10% in 2012 to 5% in 2013, while having minimal impact on commercial properties. HB 1644 permits the CCD to use the same 50% formula authorized by the 2012 amendment, but now to ensure continuity, to add the goal that the total aggregate assessed value of residential owner occupied properties will not exceed 5% of the CCD's annual assessed value in any year, in order to address the impact of the City of Philadelphia's Actual Value Initiative.
To read the bill, please go to bit.ly/1cWGgE7.
Fireworks for New Year's Eve
There will be two opportunities to enjoy New Year's Eve fireworks at Penn's Landing on the Delaware River Waterfront.
The first show will light up the sky at 6:00 p.m. and the second will help welcome the new year at midnight.
The show is approximately 15 minutes in length, has a beautiful backdrop with the illuminated Benjamin Franklin Bridge and, if viewed from Camden, the Philadelphia Skyline.
Happy New Year to all!