Office Market Expanding in CBD, Along with Other Sectors
Integra Realty Resources' (IRR) research suggests that nationally, 47% of office markets will see the value of buildings increasing by more than 2% in the next 12 months, while a few, including Philadelphia, can expect growth greater than 4% in the CBD, according to IRR's Viewpoint, 2017 Commercial Real Estate Trends Report.
Philadelphia is in the middle of a three-stage office market expansion cycle, according to the report, with expansion defined by decreasing vacancy rates, moderate/high new construction, high absorption rates, and medium/high rental rate growth.
In other sectors of commercial real estate in Philadelphia, IRR finds the multifamily market cycle in the final stage of expansion, tending toward over-supply, with retail, hospitality and industrial still in the first phase of expansion.
In the overall economy, the expectation is for an acceleration of jobs, incomes, corporate profits, and after-tax wealth, conditions under which commercial real estate should prosper, the report noted, adding, however, that with Brexit and the election of Donald Trump, “prognostication has never seemed more iffy.”
To read the report, please go to bit.ly/2kWNEaK.
Creative Design Firm Expands
Think Company, a creative design firm (formerly known as Think Brownstone), has opened a second office in Center City at the Philadelphia Building, 1315 Walnut Street, where it is housing approximately 30 of the company's more than 75 employees, with the expectation that it will continue to add more staff this year, the Philadelphia Business Journal reported on January 31. The company, founded in 2007, has offices at 15th and Chestnut in the Packard Grande building and in Conshohocken. To read the article, please go to bit.ly/2kie1IY.
Equus Leaving, Taking 110 Employees to the Suburbs
After keeping its headquarters in Center City for 30 years, Equus Capital Partners Ltd. is relocating its 110 employees to Newtown Square, the Philadelphia Business Journal reported today. Equus currently is housed in 35,000 square feet at Centre Square, with a lease that expires in April 2018.
The company’s leadership is dissatisfied with what they see as the city’s unfriendly business taxes, quality of life issues including a rise in panhandlers and homeless populating the sidewalks, as well as some recent City Council legislation that creates an overly burdensome regulatory environment for a business to operate.
To read the Philadelphia Business Journal article, please go to bit.ly/2jU9oIa.
Toll Brothers Offers New Design for Jewelers Row Tower
Toll Brothers has made public its latest plan for its Jewelers Row development, a $100 million, 29-story condominium tower with 2,600 square feet of retail space to be named 702 Sansom Street, The Philadelphia Inquirer reported on January 24.
The tower will house 115 residential units and has no on-site parking, though spaces will be available by valet at a garage at Seventh and Market Streets.
New York-based SLCE Architects has adopted design elements from surrounding buildings, but facades will not be preserved, the article noted. Four existing Jewelers Row merchants have expressed interest in leasing retail space.
To read the article, please go to bit.ly/2jfFKbo.
Peebles’ Plan for Hotel Approved by Park Service
The National Park Service in December finally approved Peebles Corporation’s plan to convert the former Family Court building at 18th and Vine Streets into a hotel, making the company eligible for more than $14 million in federal tax credits, The Philadelphia Inquirer reported on January 31.
A previous plan had been rejected last May. It called for an $85 million Kimpton Hotel & Restaurant with 199 guest rooms, a 3,500-square-foot ballroom, meeting and board rooms, a spa and fitness center, along with a restaurant and bar. Changes to the plan have not been made public. When the hotel opens, it can play a significant role in animating the north side of Logan Square and helping better to connect the Parkway to the new residential developments occurring north of Callowhill Street.
To read the article, please go to bit.ly/2jx541C.
Condos Sold in Comcast Technology Center
On the 45th floor of the $1.5 billion Comcast Technology Center are three residential condominiums that recently sold for $976/sf, or $7.6 million, $3.6 million, and $3.2 million, to FSP Realty LLC, the Philadelphia Business Journal reported on February 2. The residential space had not been announced previously, the article noted.
Also on the south side of the 45th floor is a 5,207-square-foot terrace and, on the north side, a terrace with a green roof, both for use by residents.
The 1.7 million-square-foot tower will have 1.33 million sf of office space, a Four Seasons hotel, 2,682 sf of retail space, and is expected to be completed in early 2018.
To read the article, please go to bit.ly/2k4R8rM.
PCCA Re-Elects Fox as Chair
The Pennsylvania Convention Center Authority (PCCA) Board of Directors announced it had voted unanimously to re-elect Gregory J. Fox as Chair and elect Heather A. Steinmiller as Vice Chair, replacing Joshua D. Shapiro, recently sworn in as Pennsylvania's new Attorney General. Shamyune Jones was reappointed as Secretary and Carol Hunt as treasurer.
Fox has served as chair of the 15-member board of the PCCA since 2011 and led a range of board initiatives, including the Customer Satisfaction Agreement in May 2014, which modernized work rules and expanded exhibitor rights.
School Repairs Would Cost $5 Billion
The average Philadelphia public school is 70 years old, only one-third of district schools are considered in good condition, and it would cost $5 billion to bring all the schools up to good repair, members of the state Public School Building Construction and Reconstruction Advisory Committee (PlanCon) learned at a meeting and tour on January 23, The Philadelphia Inquirer reported.
One of the issues is that the Philadelphia School District often doesn’t meet requirements for reimbursement from PlanCon, the state's process for paying a portion of the cost of construction and reconstruction, because its money is allocated only for educational programs.
To read the article, please go to bit.ly/2gFLxen.
Music Education Grant Announced
The Andrew W. Mellon Foundation has awarded a total of $2.53 million to 10 music education organizations in Philadelphia, to help young musicians prepare for post-secondary-school music study, the Philadelphia Business Journal reported on January 31.
Among the grantees are the Philadelphia Youth Orchestra, the School District of Philadelphia Office of Music Education, The Philadelphia Orchestra, and the Temple University Music Preparatory Division.
The program will launch this spring with recruitment of approximately 75 students. A national search is underway for a program manager.
To read the article, please go to bit.ly/2ky3bRN.
Winter Activities at Dilworth Park Continue Through February
There are just a few weeks left to enjoy ice skating, food and drinks at the Rothman Institute Ice Rink and Rothman Institute Cabin, both of which will close for the season on Sunday, February 26. Exciting programs this month include the Sweetheart Skate on Sunday, February 12, at the Rothman Rink, from 4:00 p.m. to 8:00 p.m., featuring buy-one-get-one-free admission, a complimentary rose and a keepsake photo from the photo booth, plus Make-and-Take Valentines at the Rothman Cabin.
In addition, the America’s Garden Capital Maze will remain open through Sunday, February 26.
Through February 25, Greater Philadelphia Gardens will continue to present free horticultural programs for both families and adults. Programs will be held in the Rothman Institute Cabin on the north side of the park and are made possible by generous funding from the William Penn Foundation. Whether you have a large backyard, a small roof deck, or a sunny apartment window, you will enjoy these programs:
Seed Bombs for Valentine’s Day, February 7, Noon – 1 p.m. (Adults)
Valentine’s Day Floral Arrangement, February 11, 10 a.m. – 11 a.m. (Family); February 14, Noon – 1 p.m. (Adults)
Flowers to Wear, February 18, 10 a.m. – 11 a.m. (Family)
Seed Starting, February 21, Noon – 1 p.m. (Adults); February 25, 10 a.m. – 11 a.m. (Family)
The Winter Season at Dilworth Park is presented by Rothman Institute, William Penn Foundation and through the generous support of Subaru, Capital One, The Philadelphia Orchestra, Temple University and 6abc.
For up-to-date schedule and information on all activities at Dilworth Park, please visit dilworthpark.org.
Infrastructure Investment Proposed, Debated
Much discussion has centered on the Trump administration’s proposal to invest $1 trillion in infrastructure across the U.S. The National Governors Association in December was given a preliminary list of infrastructure projects proposed by the incoming administration, including 15 bridges on I-95 in Pennsylvania, wapo.st/2l1XGHS, Washington Post.
In January, the Trump team compiled a list of approximately 50 priority projects, including the 15 bridges on I-95 in Pennsylvania, and totaling at least $137.5 billion bit.ly/2ktnCM2, Kansas City Star.
U.S. Senate Democrats followed with their own proposal to spend $1 trillion on infrastructure, of which $210 billion would be designated for bridges and roads, bit.ly/2jIAjSF, Better Roads.
Nationally, highway, transit and park groups have all weighed in with recommendations, while Brookings examined how the infrastructure plan would impact jobs, brook.gs/2k0VNLm. SEPTA has also prepared its list of shovel-ready projects in case a spending bill should pass. CPDC is also working on its list of priorities.
U.S. House Speaker Paul Ryan announced the House couldn’t start on infrastructure until spring, cnb.cx/2kXlzBb, CNBC.
On Friday, PlanPhilly reported that the Delaware Valley Regional Planning Commission is awaiting more guidance on how environmental reviews could be expedited and infrastructure projects designated “high priority,” as prescribed in the Trump executive order. To read the article, please go to bit.ly/2kaA06h.
New SEPTA Regional Rail Schedules
As of January 29, SEPTA has new Regional Rail schedules that are intended to alleviate chronic lateness, due in part to the introduction of Positive Train Control, a federally-mandated safety system for commuter and freight rail, PlanPhilly reported.
In December, 81% of Regional Rail trains were on time, well below SEPTA’s targeted 90%. Overcrowding at stations also contributed to lateness, due to the Silverliner V cars that were out of service, creating overcrowded platforms.
PATCO Adjusts Rush-Hour Service
PATCO announced that it has changed its weekday, rush-hour service, effective January 28.
In the evening between 4:40 p.m. and 5:15 p.m., two eastbound departures from 15th/16th and Locust Streets in Center City have been canceled and departure times have been adjusted. The weekend schedule remains the same with trains running every 20 minutes on Saturdays and every 30 minutes on Sundays.
To view the new schedule, please go bit.ly/1wAE5ji.
Michael Carroll Named Transportation Deputy
Mayor Jim Kenney on January 23 announced the appointment of Michael Carroll as Deputy Managing Director for Transportation and Infrastructure Systems (oTIS).
Carroll, a registered traffic engineer with a quarter-century of experience in transportation planning, policy and multi-modal analysis, will oversee the Streets Department, the Philadelphia Water Department and the newly-created Office of Complete Streets.
His most recent position was Acting Commissioner of the Department of Streets.
To read the announcement, please go to bit.ly/2j66gUz.
‘Philadelphia: An Incomplete Revival’
A new report researched and produced by Center City District/Central Philadelphia Development Corporation and released on January 30 offers an explanation of how and why the city has lagged in job growth and has one of the highest urban poverty rates, despite more than two decades of vibrant growth and development in Center City and University City.
Philadelphia: An Incomplete Revival documents how Philadelphia’s nearly unique reliance on wage and business taxes to finance the lion’s share of local government has inhibited job creation across the city, pushed residents to the suburbs, shortchanged schools and resulted in the highest poverty rate among the nation’s 25 most populous counties. While peer cities such as New York, Boston, and Washington, D. C. have forged ahead, replacing jobs lost to de-industrialization and surpassing their 1970 employment levels, Philadelphia still has 26% fewer jobs than it had in 1970 and has not yet regained its 1990 job level. The report suggests that a plan for comprehensive tax reform offers a path to more robust, inclusive and citywide growth.
Last summer, both the Pennsylvania House and Senate overwhelmingly passed HB 1871, a bipartisan effort that will provide Philadelphia with the flexibility to assess properties used for business purposes up to 15% higher than residential properties, so long as all the incremental revenues raised are used to lower the City’s wage and business taxes. The constitutional amendment, if passed again in the current session in Harrisburg, will provide a framework that enables Philadelphia to implement the recommendations of two previous tax commissions, while ensuring no gap opens in the City’s budget. The goal is to get the wage tax below 3% for the first time in 50 years and cut the net income portion of the Business Income and Receipts Tax in half.
To read the 12-page report, Philadelphia: An Incomplete Revival, accompanied by colorful maps, photos and charts, please go to centercityphila.org/incompleterevival. To learn more about the bipartisan effort in the Pennsylvania General Assembly, please go to philadelphiagrowthcoalition.com/.
Mayor Signs Wage Equity Law
Mayor Jim Kenney on January 23 signed Bill #160840, the controversial Wage Equity Law, which prevents employers from asking about a potential employee’s previous salary or wages, The Philadelphia Inquirer reported. The bill, passed unanimously in City Council in December, is intended to address the ongoing discrepancy between compensation paid to men and women, noting that “in Pennsylvania, women are paid 79 cents for every dollar a man makes.”
Critics of the bill suggested it would drive businesses away. The law goes into effect 120 days after signing, May 23.
City Joins Annual Count of Homeless on Streets
Philadelphia on January 26 joined cities around the U.S. in conducting an annual census of the homeless living on streets, as part of the national Point in Time (PIT) count, an annual initiative of the U.S. Department of Housing and Urban Development (HUD). More than 250 trained volunteers canvassed areas in every ZIP code throughout the city.
Final numbers won’t be available until the spring, but the opiate crisis is having an impact, with more people experiencing addiction problems, KYW reported. In 2016, the PIT count was 705 people, compared to 670 in 2015, the article noted. Philadelphia Police overnight counts showed that in 2016 Center City had the highest number of people sleeping overnight on the street than any time in the last six years.
To read the KYW article, please go to cbsloc.al/2jnamaT.
PICA: City Overtime Costs on the Rise
The Pennsylvania Intergovernmental Cooperation Authority (PICA) on February 1 released its FY2017 First Quarter Overtime Update and identified seven key departments that together spent $49.2 million in overtime in the first quarter, exceeding their combined estimates by $13.9 million from July 1, 2016, to September 30, 2016.
The Police Department and Parks & Recreation spent more than half of their annual overtime budget in the first quarter of FY2017, with overtime spending across all departments at $53.3 million, $9.7 million more than budgeted by the City for the first quarter. The other five of the seven identified were Fire, Prisons, Streets, Public Property, and the Free Library.
The Democratic National Convention was held in Philadelphia during the first quarter, and PICA suggested that the City could perform a comprehensive personnel needs assessment for each special event in an effort to more accurately project overtime costs.
To read the report, please go to bit.ly/2jZvCXG [PDF].
Mayor Names 21 to Millennial Advisory Committee
Mayor Jim Kenney and the Office of Public Engagement (OPE) on February 1 announced the members of the City’s newly formed Philadelphia Millennial Advisory Committee, a group of 21 people between the ages of 23 and 34 years old. More than 400 applied to join the committee.
The committee will advise the city on policies, programs, and actions affecting millennials and help develop various initiatives to attract and keep millennials in the city.
To read the announcement and view the names of the people on the new committee, please go to bit.ly/2kTP9qZ.
The Center City District (CCD) is very saddened to announce that William P. Hughes, Sr., Vice President of Public Safety and Cleaning Operations, died on Wednesday, February 1, after a long illness.
Mr. Hughes joined the CCD in June 1998, after retiring from the Philadelphia Police Department as a Lieutenant with more than 25 years experience in patrol, training and administration. At the CCD, he oversaw all of the CCD’s on-street cleaning operations and public safety initiatives, which included a staff of more than 45 Community Service Representatives (CSRs) and five CSR managers, who act as ambassadors to the public and jointly stand roll call with the Philadelphia Police Department, and more than 120 uniformed personnel on the street using pan and brooms, Green Machines, and power-washing equipment to keep Center City clean and attractive for residents, workers, and visitors.
Mr. Hughes initiated proactive deployment strategies utilizing computerized crime-mapping data and led the start-up of a program to identify and process in partnership with City agencies to address public-space issues that affect the quality of life throughout Center City Philadelphia.
“Bill Hughes brought so much to the CCD, creating a strong, professional structure for the CSR and cleaning programs, excellent coordination with the Philadelphia Police Department, training and promotion opportunities for his staff and, with his soft-spoken, friendly manner, setting a great example for the on-street ambassadors that have made Center City such a welcoming place,” said Paul R. Levy, President and CEO of the CCD. “He was committed to working with businesses, residents and workers in Center City and to solving problems. He will be greatly missed, but we are extremely grateful for all his many contributions and the legacy he leaves for our staff.”
A service was held Tuesday, february 7, at St. Martin of Tours Church, 5450 East Roosevelt Boulevard
In lieu of flowers, the family requests donations to Little Flower Catholic High School, 1000 West Lycoming Street, Philadelphia, PA 19140.
DVRPC to Host Meeting on Climate Change and Public Health
The Delaware Valley Regional Planning Commission (DVRPC) will host a meeting of the Healthy Communities Task Force on Tuesday, February 7, in DVRPC’s Main Conference Room at 190 North Independence Mall West, 8th Floor.
The meeting will focus on climate change and public health. Confirmed presenters include Jessica Caum, Philadelphia Department of Public Health; Clifford S. Mitchell, Maryland Department of Health and Mental Hygiene; and Kevin McNally, President of the New Jersey Public Health Association.
Networking/Registration/Coffee is 9:00 a.m. to 9:30 a.m.; the program, 9:30 a.m. to 12:00 p.m.; and lunch, 12:00 p.m. to 1:00 p.m.