CPDC Developments Newsletter - 01.07.20


City Government News

Business Group Struggles To Sustain Pro-Growth Policies

As a new City Council begins its four-year term today, an article in The Philadelphia Inquirer examines how “a new generation of liberal activists has pushed the city further to the left (and) the struggles of big business to influence policy and politics have come into sharper focus.”

The Chamber of Commerce for Greater Philadelphia has recently expanded efforts to increase its engagement with Council members and the building trades, and politically and demographically to diversify its board and staff, the article stated. But these moves “came at the same time that the city’s progressive movement has won a series of upset victories and pushed a ‘pro-worker’ agenda that has rankled many business owners.” This includes recent legislation requiring workers have access to paid sick leave, mandating that service-industry companies give their employees predictable schedules, prohibiting parking-lot operators from firing workers without just cause, and prohibiting employers from asking job applicants about their previous salaries.

Campaign finance reports show the Chamber’s PAC raised about $235,000 in a last minute effort in 2019, while the campaign arm of the Working Families Party – whose candidate Kendra Brooks won one of Council’s two at-large seats held by Republicans since the 1950s – raised more than $1 million from both local and national sources.

However, local lobbyist John Hawkins said the Chamber’s decision to become more politically active and build relationships with city politicians is “moving in the right direction.” In a shift from previous mayoral administrations, the Chamber and other business interests cannot rely on Mayor Jim Kenney to support pro-growth policies, noted Joseph McLaughlin, a former lobbyist and now director of Temple University’s Institute for Public Affairs.

City Scraps Next Round Of Reassessments; Chief Assessor Departs

Following two years of property assessment increases and subsequent tax hikes, the city will not complete property reassessments due in April for 2021 market values, ensuring most will remain unchanged from last year’s values.

The decision comes as the city’s Board of Revision of Taxes (BRT) faces a backlog of appeals filed by more than 10,000 property owners over their 2019 assessments. The city missed its own deadline to have those appeal hearings completed by the end of December.

This announcement was followed late last Friday with the announcement that Mike Piper, chief assessor, was departing from his role and taking a new job in Chicago.

The Office of Property Assessment (OPA) has been facing growing criticism since property values increased 10.5% in 2019 and climbed by another 5% under the 2020 assessments. An independent audit found significant flaws in the city’s assessment practices, prompting changes to the OPA’s assessment methodology. The new methodology, known as trending, was scrapped after initial results showed accuracy issues.

Mayor Vetoes Developer Agreement Mandate, Wage Tax Rebate

Mayor Jim Kenney declined to sign six pieces of legislation at the end of City Council’s four-year term. The bills include Council President Darrell Clarke’s mandate for developers to provide direct benefits to neighborhoods where they build major projects, Councilmember Allan Domb’s proposed wage tax rebate for low-income households, and an expansion of the homestead exemption that accompanied the recently passed phase-down of the 10-year property tax abatement.

The mayor said the upcoming budget season would be a more appropriate time to consider the wage tax credit and homestead exemption expansion, which would expand the property tax break. The vetoed pieces of legislation could be reintroduced when City Council reconvenes with a number of newly elected members.

Kenney Picks Police Chief From Portland, Oregon As New Police Commissioner

Mayor Jim Kenney has chosen Danielle Outlaw as the city’s new police commissioner. Outlaw, who begins in her new role on February 10, is a native of Oakland, California, and most recently served for two years as police chief in Portland, Oregon.

After a first term marked by “shying away from the big decisions that could engender backlash from entrenched, narrow interests,” The Philadelphia Citizen stated that Kenney’s choice of Outlaw “has taken a step toward rewriting that narrative, defying the preferences of the police union as well as many in the department itself.”

In her 2018 TED Talk, Outlaw states that “there can be humanity in authority,” and discusses the value of police departments “owning” their missteps and to police organizations being “learning institutions.”

Office Sector News

NYC’s West Side Turning Into Tech Corridor; 20K Jobs In Pipeline

Four tech companies — Amazon, Apple, Facebook and Google — will soon have 20,000 workers in New York City and collectively are “turning a broad swath of Manhattan into one of the world’s most vibrant tech corridors,” The New York Times reports. The article, published Sunday, also noted that the growth “is occurring largely without major economic incentives from the city and state governments.”

“Tech companies are choosing New York to tap into its deep and skilled talent pool and to attract employees who prefer the city’s diverse economy over technology-dominated hubs on the West Coast,” the Times said. The piece also pointed out that while Amazon scrapped plans in February to build a corporate campus in Queens after criticism of the city’s $3 billion incentive package, the e-commerce giant announced last month that it now plans to lease space for 1,500 workers in Manhattan.

NY Real Estate Firm Pays $65M For Navy Yard Building 

Norvin Healthcare paid $65 million, or $682 a square foot, for Three Crescent Drive, a 96,000-square-foot building at the Navy Yard that is fully leased on a long-term basis by Thomas Jefferson University Hospitals Inc. Liberty Property Trust developed the building and was the seller in the transaction.

The sale price rivals a 2018 deal when Liberty sold the building housing GlaxoSmithKline at the Navy Yard for $130.5 million, or $628 a square foot. In addition to Jefferson Health, the building is occupied by Jefferson Health Surgical Center, which is a joint venture including Jefferson Health, the Rothman Institute and Nueterra Healthcare. The property will be added to the Norvin Core Plus Fund, which targets health care properties leased to credit tenants with long-term leases.

Eds & Meds News

Penn Spinoff Developing Cancer Treatments Raises $1M

Pinpoint Therapeutics, a University of Pennsylvania spinoff focused on developing cancer treatments, has raised $1 million in debt financing, according to documents filed with the Securities and Exchange Commission.

Pinpoint was founded in 2018 by researchers from Penn's Abramson Cancer Center to commercialize their technology for developing potential new cancer treatments. The researchers were able to show through lab experiments that removing a specific enzyme effectively slowed growth of cancerous tumors.

Drexel Takes Entire Building Under Development In University City

Drexel University will occupy a new 450,000-square-foot building for it at 36th and Filbert streets as part of a plan to relocate some of divisions of its College of Medicine to the new structure.

Wexford Science & Technology will develop the new building at uCity Square and construction will begin this spring with Drexel’s nursing school moving in first, by the 2022-2023 academic year. The new development will allow many of Drexel’s health and medical programs to consolidate into a single location and will also include a new elementary and middle school.

Retail News

Bryce Harper Is The Face Of Center City’s New Barbershop-Bar

Blind Barber, a barbershop-and-bar concept that opened its first outpost a decade ago in New York, has just opened a Center City location at 1325 Sansom Street. The three-chair barbershop clips by day, while the two full bars serve drinks and light food in the evening.

Blind Barber, now in five cities, features Philadelphia Phillies star Bryce Harper in its ads and on its line of grooming products.

Residential Market News

Philadelphia Apartment Development Unabated In 2019 

Twelve apartment projects with a total of 1,849 units completed construction this year in Center City and several adjacent neighborhoods, according to Delta Associates' third quarter report. In the 12 months ending September 2019, 1,788 new units were absorbed, compared with 1,611 units during the same period for the year before and rents rose by 2.2%, according to the Delta analysis of newly constructed buildings. Rent growth is so far positive and stands at $2.69 a square foot. Overall vacancy stood at 8.2% but was a healthy 5.1% for projects that are stabilized.

As of Q3, nine projects with a total of 1,178 units were in various stages of planning and approvals and are projected to be completed over the next 36 months. They include the second phase of Edgewater in Logan Square, which will have 240 units, and PMC Group's first phase of Riverwalk on 23rd Street, which will have 321 apartments.

Goldenberg Group Buys Out Partners At 1213 Walnut

The Goldenberg Group has become the sole owner of Center City’s 1213 Walnut apartment tower after buying out its partners on the project, Hines of Texas and Washington, D.C.-based ASB Real Estate Investments.

Goldenberg paid $136.5 million for what was effectively a 90% stake in the 26-story, 322-unit high-rise. That would value the property at $151.7 million. Goldenberg, Hines and ASB completed the tower in 2017 on what had been vacant land on Sansom Street.

Economic News

Manufacturing, Service Industries Level Off In December

Manufacturing activity in the region was flat for the month of December, although indicators for new orders, shipments, and employment remained at higher positive readings, according to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia. New orders up for 34.4% of firms, down for 25.0%, and remaining the same for 38.6%. The number of employees increased for 18.7% of the companies, decreased for 0.9%, and was unchanged for 80.4%.

Looking ahead six months, 42.7% of the firms expected conditions to improve, 7.5% anticipated a downturn, and 38.5% predicted no change.

Business indicators suggest a moderation of activity in the region’s service sector in December, according to responses to the Philadelphia Fed’s Nonmanufacturing Business Outlook Survey, with new orders up for 32.2% of firms, down for 16.4%, and remaining the same for 23.8%. The number of full-time permanent employees increased for 28.2% of the companies, decreased for 6.6%, and was unchanged for 63.4%.

Looking ahead six months, 45.9% of the firms expected regional conditions to improve, 13.2% anticipated a downturn, and 36.5% predicted no change.

Transportation News

American Airlines To Extend Seasonal PHL Routes To Prague, Lisbon

American Airlines is extending the 2020 flying season for direct routes from Philadelphia International Airport to Lisbon and Prague following their popularity a year before. Next year’s flights from PHL to Lisbon will kick off March 28 and the Prague service will launch May 7. Each will run through January 5, 2021.

American Airlines stated that a lower overall operating cost compared to other transatlantic airports including Newark and JFK positions Philadelphia as a prime hub for American Airlines to test out new development markets and determine a route’s growth. As demand for a flight grows, the company boost frequency, upgrades to a larger aircraft offering more seats and ultimately extends the flying season.

Public Space News

‘Oval’ On The Parkway To Become Permanent Park

Eakins Oval in front of the Philadelphia Museum of Art is slated to become a permanent public park. The city is in preliminary talks with designers now, and will issue an RFP and hope to select a firm this year, a spokesman from the Department of Parks and Recreation told WHYY’s Billy Penn.

Since 2013, the space has transformed each summer from an asphalt-covered lot to a family entertainment area called “The Oval.” During the warmer months, the space has featured attractions from miniature golf to beer gardens.

Upcoming Events

January 8: The Athenaeum Presents Alexander Garvin

Alexander Garvin will be speaking at the Athenaeum of Philadelphia on January 8 at 6 p.m. to discuss his new book, “The Heart of the City: Creating Vibrant Downtowns for a New Century.”

Garvin has combined a career in urban planning and real estate with teaching, architecture, and public service. He is currently President and CEO of AGA Public Realm Strategists, a planning and design firm in New York, and has taught urban planning and management for 52 years at Yale University.

January 9: CPDC’s In Conversation: Cities of Tomorrow

Join us at 8:30 a.m. on Thursday, January 9, at Jacobs, 2301 Chestnut Street, for Cities Of Tomorrow: Integrating Buildings, Infrastructure & Technology.

Successful cities are integrating building design, infrastructure and technology. Using examples from other cities, the Jacobs team will illustrate how leaders in the industry are moving from vision to implementation, adjusting and calibrating the latest technologies to the local physical, environmental, economic, social and political context.

The panelists are James Moore, Jacobs Advanced Planning Group; Gary Lapera, FAIA, Jacobs Buildings Architecture; and Mark Bandy, Jacobs Infrastructure. The moderator is Maureen Byrne, LEED AP, Jacobs Buildings Design.

This event is open to all members of CPDC firms. RSVP by tomorrow, January 7 to Romina Gutierrez at or 215.440.5543.