“Good news is good news. Crossing that line to restore all the job lost in 2020 is a good sign,” noted Center City District (CCD) President Paul Levy in the kick off presentation of our April Central Philadelphia Development Corporation (CPDC) meeting. 

Following a presentation by Levy and CPDC Executive Director Prema Katari Gupta highlighting the newly released State of Center City Philadelphia 2023 report, a discussion on Center City’s recovery featured insights in real estate, housing, arts and culture and more, from a panel of experts:

• Patricia Wilson Aden, President & CEO of the Greater Philadelphia Cultural Alliance;
• Ryan Ade, Senior Managing Director and Philadelphia Office Co-Head at JLL;
• Rija Beares, Greater Philadelphia Market Leader for CBRE;
• Gianni Parente, Regional Investment Officer at EQT Exeter, who recently worked on the new One Cathedral Square project by Logan Square; and
• Matt Rader, President of the Pennsylvania Horticultural Society, whose recent Philadelphia Flower Show returned to the Pennsylvania Convention Center for the first time since the pandemic 

Read along for several key themes from the discussion, and learn how you can join CPDC to get access to these exclusive conversations.

This idea of changing habits continued throughout the discussion. While remote work and hybrid work will have a lasting impact, what matters for continued vitality in the downtown is restoring older habits. Gupta said: “Whether it's seeing arts and culture, going to work, taking the train, taking the bus … that interdependent ecosystem is what makes downtown the place of opportunity in the heart of the city.”

Office Usage Based on Functions, Not Industries

As expected, there have been many shifts in the status of the idea of a downtown office. Our December 2022 CPDC discussion noted the need for building owners and downtown businesses to transform the perception and make the office a destination, rather than an obligation. This trend has continued, with Beares and Ade noting how buildings that have capital are investing it into their spaces to differentiate themselves from the traditional workspace by making their buildings more collaborative and incorporating amenities to attract employers. 

Opportunities with Open Spaces

Historically, Philadelphia has had a strength in terms of adapting historic buildings and office spaces into other uses like residential, hospitality, or, more recently, life sciences. However, complications remain.

For many buildings, an obstacle may be the current occupancy. While a building may be 70% vacant, that does mean 30% of it is occupied. And with average lease times being approximately seven years, landlords simply can’t empty out the remaining tenants and need to think further ahead in terms of adjusting their weighted average lease terms, which can have an impact on loans and financing.

One opportunity explored more internationally is the potential to split usage by floor. While Center City’s CMX-5 zoning provides more flexibility than seen in most other major downtowns across the nation, which allows for retail and residential uses in a building, Parente pointed out even larger opportunities to consider: “Recently in a building there was a hotel on one floor, then an office, then another hotel floor above. So it does happen in other places. I think there's no reason it couldn't happen here.”

The economic impact for these experiences in the city is massive. As noted in our Spring Vitality Report, foot traffic during the Flower Show quadrupled in the Pennsylvania Convention Center area, and nearly doubled in Chinatown. Aden described it as “the magnet and the multiplier,” where people come to Center City for the arts and culture, but stay and do much more: “What did those people do? They parked, they ate in restaurants, they sometimes spent the night in our hotels. So that dollar turned over again and again and again, because of that arts and culture offering.” 

However, budgets for these organizations remain tight; even for major events, such as the Flower Show, Rader said, “These were breakeven businesses at best historically, and so you have to think of them more like infrastructure like SEPTA.”

For most of these, a majority of funding comes from paid attendance, not from philanthropy as one would commonly assume. That means that for continued viability and success, there needs to be an emerging, clear leader, who helps integrate new audiences and businesses into the vibrant arts and culture community.

For arts and culture moving forward, Aden notes the need for a champion, who doesn’t just rely on philanthropy to sustain arts and cultural institutions: “We're looking for a leader who will understand that the public sector also has a role in supporting arts and culture through policies, through public funding, through being that champion, that voice that says ‘arts and culture is that valued asset.’” 

Despite all of these diverse perspectives and needs, it is all achievable. Beares noted there’s an opportunity for a revolution of innovation instead of stagnation: “The baseline [to become agile] is collaboration and public private partnerships… If we start to come to meetings, asking questions rather than coming with solutions and our own initiatives, we start to make change.” 

The need for innovation reflects Rader’s sentiment, when his team needed to plan for the Flower Show after the pandemic began: “The only way through a crisis is to innovate and grow. There simply is no sitting and waiting to see what happens next. You … put it aside, get over it, and figure out what you're going to do next.”

Innovations and collaborations have always been part of our city. Most recently, 2022’s 10.6% decrease in major crimes within the CCD resulted from partnerships between the CCD, public agencies and private organizations. The robust expansion of the life science sector is cultivated by growth across communities and the diverse benefits of Philadelphia. As Beares noted, “Cities are living organisms that need to continue to change.” 

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