News

CPDC Developments Newsletter - 10.31.17

Office Sector News

Philadelphia Submits Formal Pitch for Amazon HQ2
Philadelphia has formally submitted its proposal for Amazon's second headquarters. As part of the proposal, Philadelphia officials launched public.philadelphiadelivers.com, a website with videos and interactive maps detailing three potential Philadelphia sites for Amazon’s campus and touting the city’s talent pool, affordability, and strategic location.

The pitch offered no tax incentive specifics, though the Commonwealth announced it would offer Amazon more than $1 billion in tax incentives should it select a Pennsylvania site.

To read more, please go to bit.ly/2zClWYp.

Amazon received 238 proposals from cities and regions across North America.

A Different Perspective: Diverse Business Ecosystem Bests Amazon Monoculture
While praising the coordination and energy of the City’s pitch in a Philadelphia Inquirercommentary on October 26, Chris William Sanchirico, professor of law, business, and public policy at Penn, urged city leaders to look beyond luring a mega-company “monoculture” and instead strive to build a “diverse ecosystem” of small- and medium-sized businesses.

If Philadelphia isn’t chosen as HQ2, Sanchirico suggests using the $1 billion earmarked as Amazon incentives to court “an array of businesses, none of which will have us over a barrel, each of which will sink or swim on its own, and not all of which will simultaneously threaten to, or actually, leave en masse.”

To read more, please go to bit.ly/2z6xsPz.

More Office Space Along East Market Put Up For Sale 
Pennsylvania Real Estate Investment Trust is looking to sell a commercial office condominium totaling 214,000 square feet on floors three, four and five in 907 Market St.The space is owned in partnership with Macerich Co. and could sell for as much as $45 million, according to one estimate.

The space, which runs from 901-907 Market St., is directly over the former Gallery, which is being redeveloped by PREIT and Macerich, and is occupied on a long-term basis by Health Partners Plans Inc. There is interest from investors for such assets that have long-term leases in place, said Mike Margolis of Newmark Knight Frank, who is marketing the property.

To read more, please go to bit.ly/2iq93xf.

1776 and Benjamin’s Desk Announce Merger
Washington, D.C.-based incubator 1776 and Philadelphia co-working chain Benjamin’s Desk have merged into a new company that will retain the 1776 name.

Under the deal announced October 16, former 1776 CEO Evan Burfield will become Executive Chairman, with Benjamin’s Desk co-CEOs Anthony and Jen Maher taking their former titles in the new company. The combined network will manage or operate roughly 250,000 square feet of office space, including 94,000 square feet currently part of the 1776 brand and more than 138,000 square feet managed by Benjamin’s Desk and its licensing partners.

To read more, please go to bit.ly/2xcgudW.

Development News

Archdiocese Announces Basilica Property Redevelopment Plan
The Archdiocese of Philadelphia has released a Request for Qualifications (RFQ) from developers interested in redeveloping 2.32 acres of the nearly 4-acre property between Race and Vine Streets from 17th Street to 18th Street, fronting on one side on Logan Square.

The Cathedral Basilica of Saints Peter and Paul, its chapel and the archbishop's residence would remain. Archdiocese officials said any project would need to respect those distinctive structures.

Initial concepts included potential redevelopment or demolition of three buildings: the Archdiocesan Pastoral Center (built in 1969), the Holy Family Center (1960) and the cathedral’s former convent (1957).

To read more, please go to bit.ly/2xZVPya.

Toll Bros. Submits New Application For Jewelers Row 
Toll Bros. has filed a new application for zoning approval to build a residential tower on Jewelers Row, a spokesman for the Horsham developer’s urban-focused City Living division told The Philadelphia Inquirer on October 26. No details were released.

The company first announced plans in August 2016 to demolish several jewelry store buildings on the 700 block of Sansom Street for a 16-story condominium tower. Toll later sought zoning for a 29-story building at the site. The city’s Department of Licenses & Inspections ceased consideration of the proposal in July, after waiting for requested project details.

To read more, please go to bit.ly/2lkkW8R.

Work Starts On North Broad Apartment Tower
Crews have begun work on an 18-story apartment building near Temple University that will share a North Broad Street block with the historic Blue Horizon boxing venue and New Freedom Theatre.

Bock Development Group said the 192-unit tower near the corner of Broad and Master Streets will also include ground-floor commercial space. The 1324 N. Broad St. building is scheduled for completion in August 2019.

The developer, led by Ernest Bock & Sons Inc. president Tom Bock, acquired the site in 2015 for $2.2 million from New Freedom Theatre Inc.

To read more, please go to bit.ly/2hc8tzy.

Eds and Meds News

Jefferson Announces Job Cuts Following Recent Expansion
Thomas Jefferson University is reducing its workforce by what it estimates will be fewer than 300 people. “Our growth, along with the changes in technology, health care, and education, present Jefferson with the opportunity and the responsibility to effectively manage limited resources,” President and CEO Stephen K. Klasko said in a statement.

Jefferson has grown in three years from a three-hospital system with 13,000 employees to a 13-hospital system with 30,000 employees and recently completed acquisitions of Philadelphia University and Kennedy Health System in South Jersey.

To read more, please go to bit.ly/2yNLhSk.

NeuroFlow Raises $1.25 Million In Seed Funding
NeuroFlow, a Center City-based digital health startup, has raised $1.25 million in seed funding. Investors include Safeguard ScientificsBen Franklin Technology Partners of Southeastern Pennsylvania and Independence Health Group.

NeuroFlow combines wearable technology, biometric sensors and data analysis to evaluate user levels of stress, anxiety, relaxation and focus. After a trial through the University of Pennsylvania’s Platt Labs, the product is now in beta trials.

To read more, please go to bit.ly/2zDTyWw.

Residential Market News

Residential Tower 500 Walnut Opens
Philadelphia’s newest luxury residential tower has opened at 500 Walnut, a 26-story high-rise across from Independence National Historical Park. Bucks County-based developer Tom Scannapieco purchased the 18,155 square foot site in May 2014 for $8.5 million.

Scannapieco said 500 Walnut’s 35 condominiums are more than two-thirds under agreement and the most expensive unit, the 8,900-square-foot penthouse, is under agreement for $17.85 million.

To read more, please go to bit.ly/2im06ox.

JLL: Occupancy, Rents Stable Of Newer Apartment Buildings
JLL’s analysis of September data from 35 multifamily properties delivered since 2013 concludes that while Center City supply outpaces absorption in 2017, the performance of projects completed in this recent market cycle is strong.

Buildings completed in 2013-2016 have an overall occupancy of 94.9% across 4,500 units. The 1,647 units delivered year-to-date are slightly less than half leased, with pricing at the 2017 deliveries remaining above the five-year average despite the slow absorption.

While growing supply will lower asking rents, JLL said steady employment growth indicates that Philadelphia can fill these units, though it will take longer without an uptick in the job creation rate.

To read more, please go to bit.ly/2y6GsiC.

Philadelphia House Price Index Continues Rise In Q3
The Philadelphia house price index rose 2.9% in the third quarter of 2017, a slight slowdown from 3.2% in the second quarter and from 5% in the first quarter, according to a recent report from the Lindy Institute of Urban Innovation at Drexel University.

However, the Philadelphia house price index is up 10.6% from a year ago, compared to its average historic appreciation rate of 4.5% per year. It is also high when compared to other large U.S. cities, for which house prices are up only 5% from one year ago.

The median house price in Philadelphia rose to $159,900 in Q3 -- only a 1.2% increase from Q2, and a marked slowing down from Q1, when the median price increased by nearly 15% over the previous quarter.

To read more, please go to bit.ly/2yHVptc.

Philadelphia Housing Affordability Scores High In New Report
Philadelphia ranks as the second-most affordable U.S. city in which to buy or rent housing, behind Houston, according to a recent Bloomberg report comparing housing costs in 105 major metropolitan areas around the world.

The Bloomberg Global City Housing Affordability Index calculates the affordability of renting or buying in city centers and suburbs. Rankings are based on self-reported data, including net salary and mortgage interest rates, compiled by Numbeo.com, an online database of city and country statistics.

To read more, please go to bloom.bg/2inc2pU.

Retail News

Reading Terminal Market Plans Revamp For 125th Anniversary
The Reading Terminal Market will mark its 125th anniversary with a rollout of new initiatives driven by rising competition including Whole Foods, Amazon, and MOM’s Organic. The market will install distillery kiosks, support farm-to-table entrepreneurs, develop the market’s outside area, and eventually deliver food to customers’ homes. The market also intends to raise $2 million to complete a façade restoration project unfinished since the 1990s.

General manager Anuj Gupta said the goal is to reinvent the terminal while staying true to its culinary roots and its focus on family-owned businesses. The market’s official 125th anniversary is Feb. 22, 2018. A yearlong celebration of special events is planned.

To read more, please go to bit.ly/2yD2PzE.

Arts and Culture News

Philadelphia Contemporary Hires Artistic Director
One of Philadelphia’s newest arts organizations, Philadelphia Contemporary, has named an artistic director to guide its transition from pop-up projects into a permanent home. Nato Thompson, a Philadelphia resident who has been artistic director at Creative Time in New York for a decade, will assume his new role in November.

Philadelphia Contemporary was founded in 2016 by Harry Philbrick, former museum director of the Pennsylvania Academy of the Fine Arts. It currently hosts performances, site-specific art installations, and interactive projects in temporary locations.

To read more, please go to nyti.ms/2gIq9SM.

Transportation News

$30M Renovation Complete at PHL Terminal B
An 18-month, $30 million redesign is completed at Philadelphia International Airport’s Terminal B, which now features amenities including 1,000 iPads in the gate areas and a half-dozen new restaurants.

The renovation of one of PHL’s busiest terminals, home to American Airlines’ 390 daily flights, covers 60,000 square feet inside security and was completed by New York-based food and beverage provider OTG Management, in partnership with American and PHL.

OTG has undertaken similar redesigns in 10 airports including New York’s LaGuardia and John F. Kennedy, and New Jersey’s Newark Liberty.

To read more, please go to bit.ly/2iqJtYN.

Parks and Open Space News

Rothman Institute Rink Season Opens November 10 
The Rothman Institute Ice Rink at Dilworth Park will reopen on Friday, November 10 for its fourth year of seasonal skating. The ice rink is open to skaters of all ages and skill levels. Also returning on November 10 is the Rothman Cabin, a heated tent located at the northern end of the ice rink offering seasonal cocktails, a variety of craft beer, and food options including poutine and chili.

America’s Garden Capital Maze is back for a second season at Dilworth Park. The maze-meets-garden, created in partnership with Greater Philadelphia Gardens, features twinkling lights and a variety of seasonal plants.

To read more, please go to dilworthpark.org/wintergarden.

Christmas Village Returns to LOVE Park; Construction Continues
LOVE Park will be partially open by Nov. 18 for the first day of the Christmas Villagepreview, as work continues on a $16.5 million overhaul that started in February 2016.

A Department of Parks and Recreation spokeswoman told Billy Penn that the reopening will be a “soft” opening, and the grand opening of the park won’t happen until next spring. While hard surfaces will be installed in time for the Christmas Village preview days on Nov. 18 and 19, the visitor center isn’t yet complete and plantings are still in progress.

To read more, please go to bit.ly/2ivDD8C.

Gaming News

September Revenue Rises at SugarHouse
Revenue at SugarHouse Casino on the Delaware River rose in September to $24,055,145 from August’s $23,069,925, according to the Pennsylvania Gaming Control Board.

The commonwealth collected $6,297,117 in September, compared to $6,033,267 in August. The City of Philadelphia collected $188,163, compared to August’s $181,051.

To read more, please go to bit.ly/2uMroWC.

Economic News

Manufacturing, Service Industries Continue Expansion in October
Manufacturing improved in the region in October, according to responses to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia, with new orders up for 36.9% of firms, down for 17.3%, and remaining the same for 43.6%.

The number of full-time employees increased for 30.6% of the companies, decreased for 0.0%, and was unchanged for 69.4%.

Looking ahead six months, 52.9% of the firms expected conditions to improve, 6.5% anticipated a downturn, and 35.2% predicted no change.

Business activity continued to expand in the region’s service sector in October, according to responses to the Nonmanufacturing Business Outlook Survey, with new orders up for 28.0% of firms, down for 16.6%, and remaining the same for 28.5%.

The number of full-time employees increased for 27.6% of the companies, decreased for 10.2%, and was unchanged for 54.5%.

Looking ahead six months, 55.6% of the firms expected conditions to improve, 17.6% anticipated a downturn, and 18.9% predicted no change.

To read the Manufacturing report, please go to bit.ly/2yN5fKC. To read the Nonmanufacturing report, please go to bit.ly/2zPgTVo.

Philadelphia Ranks 24th On Kauffman Index
The annual Kauffman Growth Entrepreneurship Index, which ranks metro areas based on a composite of data points related to entrepreneurial business growth, listed Philadelphia at No. 24, down two spots from last year. Washington D.C. and Austin topped the list, followed by Columbus, Ohio and Nashville.

However, he report’s separate ranking of venture capital-backed exit density placed Philadelphia at No. 7.

To read more, please go to bit.ly/2yHEHdF.

Government News

CCD 2018-2022 Plan & Budget Introduced In City Council
A bill to approve Center City District’s 2018-2022 Plan and Budget was introduced October 26 in City Council. The ordinance calls for approval of CCD’s continued management and maintenance of its streetscapes and parks and seeks an extension of CCD’s boundaries to include Phase 1 of the Rail Park, allowing the CCD to work in partnership with the Department of Parks & Recreation and the Streets Department to support its maintenance.

The CCD in July held a public hearing on the Plan and Budget at which a broad cross-section of representatives from the office, hotel, retail, civic and education sectors testified in support as well as representatives from Center City residential civic associations. At the end of a 45-day formal comment period following the hearing, the CCD had received only two objection letters from the same owner of two different properties within the District. The owner objected to the amount of his estimated 2018 CCD charge, which had increased largely because the property had been reassessed by the Office of Property Assessment. The two properties represent 0.12% of the 1,688 benefitted properties within the CCD and represent 0.007% of the total assessed value of the CCD in 2018.

To read more, please go to bit.ly/2zTQpBU.

Upcoming Events

Tech Women Take The Stage On November 2
Technologists, tech founders and other experts are coming together on November 2 to discuss opportunities in the tech industry for women of color. The HUE Tech Talk is taking place at WeWork’s 1601 Market St. location.

A lineup of women of color will speak about their professional paths at companies like Philadelphia Gas WorksTemple University and JPMorgan Chase. The event will feature a panel discussion, dinner and discussion with Eloise Young, SVP of Strategic Planning and Information Services at Philadelphia Gas Works.

To read more, please go to bit.ly/2yLgq8B.