News

CPDC Developments Newsletter - 02.18.20

Office Sector News

Merck To Open Outpost At Center City WeWork

Merck & Co. is opening a Center City office at a WeWork location in Center City. Merck, which is headquartered in northern New Jersey and has locations in the Philadelphia suburbs, will occupy a 25,000-square-foot space with 205 desks, comprising an entire floor of WeWork’s three-story location at the 1100 Ludlow office building in the East Market mixed-use development.

Merck is among a number of national and multinational companies that have begun to use coworking as a way to establish a presence in Philadelphia without having to fit out its own space or sign a long-term lease. Others include IBM in WeWork’s 1900 Market Street location and Lyft Inc. at the Joynture coworking offices on South Street. The more that Philadelphia moves toward a more competitive citywide tax structure, the greater the chance of their firms signing longer-term leases.

https://www.inquirer.com/real-estate/commercial/merck-wework-center-city-1100-ludlow-national-real-estate-coworking-corporations-20200211.html

Navy Yard Building Trades For $61.2M

Liberty Property Trust has closed on the sale of a building that houses Axalta Coating Systems Ltd.’s Global Innovation Center at the Navy Yard for $61.2 million, about $350 per square foot. The buyer is Apex Capital Management, a subsidiary of Dimah Capital of Kuwait.

Axalta moved more than 200 engineers and scientists from Delaware into the 175,000-square-foot research facility in fall 2018. It is Axalta’s largest such facility and is believed to be the largest coatings R&D center in the world. Axalta signed a 20-year lease that expires in 2037.

https://www.inquirer.com/real-estate/commercial/axalta-building-navy-yard-dale-kuwait-dimah-apex-liberty-prologis-20200206.html

Eds & Meds News

Philadelphia Gene Therapy Startup Plans $125M IPO 

Passage Bio, a Philadelphia gene therapy startup, plans to go public through a $125 million initial public stock offering. Passage Bio was founded in 2017 by Penn Medicine researcher Dr. James Wilson, Alexion Pharmaceuticals co-founder Stephen Squinto and Takeda Pharmaceuticals and GlaxoSmithKline former executive Dr. Tadataka Yamada.

Passage Bio has a research, collaboration and license agreement with the University of Pennsylvania and its gene therapy center for rare diseases, both of which are led by Wilson, who serves as the company's chief scientific advisor. Its goal is to develop gene therapies for central nervous system diseases.

https://www.fiercebiotech.com/biotech/after-bagging-200m-2019-passage-bio-guns-for-125m-ipo

Adaptimmune Raises $78.1M In Public Stock Offering

Philadelphia-based cell therapy developer Adaptimmune Therapeutics has raised $78.1 million through a public stock offering, which closed January 24. According to documents filed with the Securities and Exchange Commission, Adaptimmune plans to use the proceeds from the public offering to advance the development of its immunotherapies in clinical trials.

Adaptimmune, which has 430 employees, is developing a variety of new drugs to treat cancer by using a patient's own immune system to target and destroy cancer cells.

https://finance.yahoo.com/news/adaptimmune-therapeutics-plc-announces-closing-213010648.html

Temple University Health System Names New CEO

Temple University has appointed Michael A. Young as chief executive officer of Temple University Health System. He succeeds Stuart McLean, who had been serving as acting CEO since Dr. Larry Kaiser stepped down from the post late last year.

Young, whose appointment is effective immediately, has served as CEO of Temple University Hospital since the start of 2019. He joined the medical center as its chief operating officer in 2018. Young will continue to hold the titles of resident and CEO of Temple University Hospital.

https://temple-news.com/temple-health-system-gets-new-ceo/

Residential Market News

Student Housing Portfolio Near Temple Sells For $23.7M 

Govberg Realty has sold a 253-bed student housing portfolio near Temple University for $23.7 million. An undisclosed buyer from New York bought the nine buildings, which were built within the last five years and have a total of 92 furnished apartments. It is the buyer’s first acquisition in Philadelphia, the Philadelphia Business Journal reported.

The sale breaks down to around $93,700 per unit. The units are fully occupied for the current school year. Rents range from $609 to $745 per month for a bed. Temple's full-time enrollment was 36,423 in fall 2018, up nearly 6% from fall 2015.

https://www.bizjournals.com/philadelphia/news/2020/02/13/student-housing-portfolio-near-temple-university.html

Mixed-Use Development Planned For Lot At 7th And Girard

A newly formed development team plans a 36-unit apartment building with about 3,000 square feet of ground-floor retail space at a long-vacant lot near 7th Street and Girard Avenue.

R&M Development anticipates spending about $10 million, including the $1.55 million paid for the 8,800-square-foot site, to build the six-story project. The group aims to begin construction this spring, with completion scheduled by the end of 2021.

https://www.inquirer.com/real-estate/housing/girard-ludlow-apartments-biddle-tester-r-m-development-20200204.html

Development News

Hotel Conversion Planned For 3 Properties On West Market Street

Lubert-Adler has acquired three early 20th-century industrial loft buildings on West Market Street with plans to convert the properties into an upscale hotel. The investment group is proposing a hotel with as many as 180 guest rooms with dining space and 50,000 square feet of office space for lease, The Philadelphia Inquirer reported.

The hotel building would be constructed as an “overbuild” atop the three- and four-story buildings on the southwest corner of the 2300 block of Market Street, including the former home of the Philadelphia Art Institute’s culinary school. The hotel would share the southern side of Market Street’s 2300 block with Aramark’s new headquarters building. To the site’s immediate east, a new headquarters tower for law firm Morgan Lewis & Bockius is under development across 23rd Street. Collectively, these projects help strengthen the connections between Center City and University City.

https://www.inquirer.com/real-estate/commercial/lubert-adler-hotel-2300-west-market-street-pmc-aramark-art-institute-culinary-school-20200204.html

Judge Approves Refinery Sale To Chicago-Based Developer

A U.S. Bankruptcy Court judge has approved the sale of the shuttered Philadelphia Energy Solutions (PES) refinery complex in South Philadelphia to a Chicago-based developer with a history of redeveloping industrial sites.

Hilco Redevelopment Partners placed the winning $252 million bid for the 1,300-acre PES site, which closed after a massive fire last summer. Hilco’s experience in redeveloping industrial properties includes acquiring old power plant sites in Boston and New Jersey, and building warehouses on a former steel mill site in Baltimore.

https://whyy.org/articles/bankruptcy-judge-approves-pes-refinerys-sale-to-developer-assuming-no-new-objections/

Economic News

Philadelphia Startups Raised $1B In 2019

Last year was a record breaker for Philadelphia startups, which raised $1.7 billion in 2019 – 187% more than in the previous four years combined, a recent JLL analysis found.

After e-commerce company goPuff’s record breaking venture round of $750 million, the city’s biotech and therapeutics companies dominated the list in terms of total fundraising, with $765 million raised by 15 different startups in 2019. They include Century Therapeutics raising $250 million, Passage Bio with $225 million, and Limelight Bio and Tmunity Therpeutics each with $75 million.

https://www.us.jll.com/en/views/snapshots/philadelphia-snapshot-2-10-20-jll

Philadelphia Ranks #3 In Cities With The Youngest Entrepreneurs

Philadelphia comes in third of major cities in the U.S. with the youngest business founders, jumping from 11th place a year ago, according to Lending Tree. Using anonymized data from business owners seeking loans through the online lending marketplace, researchers compared ages of business founders on their companies’ dates of origination in the 50 largest U.S. cities.

The average age of Philadelphia business founders is 37.9 years old, down from 39.03 last year. The analysis noted that “several accelerator and incubator programs are open to startup founders in Philadelphia looking for assistance, including the Philly Startup Leaders accelerator for early-stage ventures and the Ben Franklin Fintech Accelerator for financial technology businesses.”

https://www.lendingtree.com/business/small/places-with-the-youngest-entrepreneurs/

Retail News

Barcade, The Arcade-Bar Hybrid, Coming To Center City

Barcade, the New York-based chain that mixes vintage arcade games with a full bar, has signed on for its second Philadelphia location, and it’s in Center City. Barcade, which opened in Fishtown in 2011, is taking the street level at 1210 Chestnut Street.

Co-owner Paul Kermizian said the Chestnut Street location, which will have a fuller menu than Fishtown’s and a private room, could open this fall. He said Center City would attract more daytime and happy-hour business than Fishtown, which is busier late nights and on weekends.

https://www.inquirer.com/food/barcade-bar-arcade-philadelphia-chestnut-fishtown-20200207.html

Transportation News

SEPTA To Increase Train Frequency On Market-Frankford Line

SEPTA will soon roll out a new schedule for the Market-Frankford Line designed to add more train service in the early evenings. Beginning February 24, MFL trains will arrive every six minutes on weekdays from 6 p.m. to 7 p.m. and every eight minutes from 7 p.m. to 8 p.m. — a change from the current arrival times every 10 minutes.

The schedule change will begin at the same time as another big service change to the line — the end of the long-running A and B “skip-stop” system at rush hour. SEPTA said both changes were designed to address overcrowded trains and platforms caused by population growth and increased ridership in West Philadelphia, Kensington and Fishtown neighborhoods.

https://www.iseptaphilly.com/blog/abstops

PHL Sets New Record For Passenger Traffic In 2019

Philadelphia International Airport flew to an all-time passenger record in 2019, growing total traffic by 4.2% over the prior year. Some 33 million passengers passed through the gates at PHL last year, a number boosted by increased volume to Las Vegas, Key West and Myrtle Beach. Internationally, new routes were added to Germany, Scotland and Croatia.

Domestic passengers rose 4.5% year-over-year to 28.9 million, and international traffic increased 1.9% to nearly 4.1 million. PHL also grew air cargo volume by 9.4% in 2019, marking the second-highest year ever. The city estimates the airport has a $16.8 billion economic impact on the region, generating 106,000 jobs with average earnings of more than $51,000.

https://www.phillyvoice.com/philadelphia-international-airport-annual-passenger-record-2019/

American Airlines Reports Its Best January On Record At PHL

American Airlines reported its strongest overall January performance on record at Philadelphia International Airport, setting new records at its Northeast hub last month for percentage of on-time departures, number of flights taking off before 9 a.m., and efficiency in turning around arriving flights for their next departures.

American's PHL operations also led all of the carrier's major hubs in on-time departures for international flights. American departed nearly 79% of flights from PHL on time in January – up one percentage point from the previous year – and had 85% of incoming flights arrive on time.

https://www.bizjournals.com/philadelphia/news/2020/02/07/american-airlines-reports-its-best-january-on.html

Federal Government News

House Democrats Won’t Resurrect Earmarks This Year

Following weeks of internal discussions among House Democrats on Capitol Hill, lawmakers will not get to insert special projects for their districts into spending bills – commonly referred to as “earmarks” – this year.

The decision marks the second consecutive time that House Democrats appeared close to resurrecting the practice, which has been absent from appropriations bills for more than a decade after falling into political disfavor. Watchdog groups, however, argue that earmarks never really went away, and intended reforms have created a lack of transparency making earmarks more difficult to identify and evaluate.

https://www.rollcall.com/2020/02/07/house-democrats-wont-resurrect-earmarks-this-year

City Government News

PICA: January Tax Collections Up 6.3% Compared to Last Year

The City collected approximately $324.7 million in General Fund tax revenue in January 2020, compared to $305.4 million in January 2019, an increase of approximately $19.3 million, or 6.3%, according to preliminary figures from the Pennsylvania Intergovernmental Cooperation Authority (PICA). The increase was driven by the City portion of the wage, earnings, and net profits, real estate, parking ($633,741, beverage, and other miscellaneous taxes, compared to January of last year. However, decreases for the month in the business income and receipts tax (BIRT), realty transfer, City sales and amusement taxes tempered January’s gains.

Fiscal year-to-date collections are ahead of last year by 8.8% through January. Thus far in FY2020, BIRT rose 38.1%, compared to a projected decrease of -2.1%; the real estate tax rose 20.3%, compared to a projected decrease of -0.8%; the realty transfer tax rose 4.7%, compared to a projected 2.7% increase; and the city sales tax collections rose 8.5%, compared to a projected growth of 5.8%.

https://www.picapa.org/2020/02/just-released-monthly-tax-revenue-update-for-january-2020/

Time Is Now To Reach Consensus On PICA’s Future

A recent gathering of experts and officials who have worked for or with PICA say that discussions about the future of the state agency, which has overseen Philadelphia’s finances and since 1992 is slated to shut down in three years, need to begin now.

Participants at the gathering organized by The Pew Charitable Trusts agreed that PICA’s existence has helped the city establish and maintain fiscal stability and the credibility of its budget estimates. Building a consensus on its future could prove challenging, however, because the city is not facing a dire fiscal crisis, as it was when PICA was created nearly 30 years ago. Local officials are not in full agreement about whether the authority should continue to exist and, if so, in what form.

If it is reauthorized to continue its oversight after 2023, changes to PICA could include expanding its purview to include the ability to conduct financial analyses of the cost of ordinances proposed by City Council or the mayor’s office; using its borrowing authority to fund the city’s capital program and/or help the school district deal with aging infrastructure; or giving it additional enforcement tools.

https://www.pewtrusts.org/en/research-and-analysis/articles/2020/02/04/whats-next-for-fiscal-oversight-in-philadelphia

City Commerce Chief Epps To Return To Private Sector

Harold Epps, who has served as Philadelphia Commerce Director since January 2016, is leaving his position on March 6. Epps is leaving the city to explore new opportunities in the private sector, where he spent more than three decades with such companies as PRWT Services, serving as its CEO. Epps also spent time as an executive at Quadrant, Menasha Corp., and Polaroid.

Sylvie Gallier Howard, who serves as first deputy commerce director and has been with the department for the last seven years, will assume the role of acting commerce director until a replacement is named. Gallier Howard helped to oversee Philadelphia’s response to Amazon’s HQ2 search.

https://www.phila.gov/2020-02-05-mayor-announces-departure-of-commerce-director-harold-t-epps/

Philadelphia Citizen Urges Restraint On City Charter Amendments

The Philadelphia Citizen, in a recent opinion piece, is urging the newly-seated City Council exercise restraint as its members begin considering the latest round of proposed amendments to the Home Rule Charter for inclusion on the April ballot.

“Many of the amendments adopted in recent years, including some under consideration now, actually chip away at the very animating idea behind our 1951 reform-era Home Rule Charter. They run counter to the principles laid out in the Charter itself, and, in many cases, they represent Council, rather than legislating, conducting politics by Charter amendment means,” Citizen co-founder Larry Platt states in the piece.

https://thephiladelphiacitizen.org/the-charter-follies/

City Spends $48M Annually Trying To Stop, Clean Up Litter

Philadelphia spends $48 million per year dealing with litter and illegal dumping, according to a report from Keep Pennsylvania Beautiful. Philadelphia is five times the size of Pittsburgh, which is the second-highest spending Pennsylvania city at $6 million, but we spend eight times more on curtailing litter.

Roughly 88% of the $48 million goes towards cleaning up litter and illegal dumping, while approximately 7% is dedicated towards prevention programs. The remaining 5% funds education and outreach.

https://www.keeppabeautiful.org/wp-content/uploads/2020/02/KPB-Litter-Cost-Study-013120.pdf

NYC Introducing Reforms To Commercial Trash Pickup Rules

A story in The New York Times outlines changes that aim to make commercial garbage pickup safer for pedestrians, workers and the environment. A new law — the most sweeping overhaul of New York City’s commercial garbage hauling rules in 30 years — is set to sharply increase city control, reversing decades of policies that effectively left companies competing to offer clients the lowest prices with little regulation.

Commercial trash makes up more than half of New York’s garbage. The city will be carved into 20 commercial waste zones, with just three companies working in each, essentially forcing trucks to drive more efficient routes. Haulers must obtain licenses from the city to operate by following rules aimed at reducing traffic deaths, greenhouse gas emissions and environmental and labor violations.

https://www.nytimes.com/2020/02/15/nyregion/nyc-garbage.html

Graffiti-Removal Company Hires Homeless, Formerly Incarcerated

A recent article in The Philadelphia Inquirer profiled Todd Kelley, whose seven-year-old company Graffiti Removal Experts exclusively employs homeless or formerly incarcerated workers to paint over graffiti and scrape stickers off of signs, trash bins, and other public property.

Among his clients are Center City District, along with several neighborhood associations, property managers, individual businesses and homeowners. Kelley’s 11 employees – three in management and eight in the field – work as many hours as they want per week and earn at least $20 per hour.

https://www.inquirer.com/life/graffiti-removal-experts-todd-kelley-20200211.html

CCD News

Center City District Names New VP For Parks & Public Realm

Center City District is pleased to announce that Prema Katari Gupta will assume the role of Vice President for Parks and Public Realm, effective February 24. Gupta most recently served as Senior Vice President of Navy Yard Planning and Real Estate Development for PIDC.

In her new role, Gupta will direct and supervise the operations of the four parks currently owned by or leased to CCD: Dilworth Park, Sister Cities Park, Cret Park and John F. Collins Park. She will oversee the day-to-day management and continuous improvement of these parks, as well as the extensive streetscape enhancements that the CCD has made during the last two decades and continues to maintain. She will also oversee any new capital projects that CCD undertakes.

https://www.centercityphila.org/pressroom/center-city-district-names-new-vp-for-parks-public-realm

New Features Coming This Spring to Sister Cities Park

Center City District has begun work on enhancements to Sister Cities Park. After surveying dozens of parents and caretakers, and observing how children use the park, CCD developed plans to enhance the Discovery Garden with more ways for children to play while maintaining its intimate and natural feel.

The new and improved Discovery Garden will open in late April. The enhancements will include a climbing net and platform, a “hiding” nest, a stream dam, and push-button operated water jets, in addition to an extended area for plantings and additional stone benches. Transformed by CCD in 2012 from a forgotten space into one of the nation’s leading multigenerational parks, Sister Cities Park is a favorite destination for families with children, school and day care groups, local workers, seniors and visitors to nearby cultural institutions.

https://centercityphila.org/foundation/our-work/sister-cities-park

For additional details on this project and to learn about how you can support it, click below.

https://center-city-district-foundation.networkforgood.com/projects/74572-sister-cities-park]?fbclid=IwAR2RDhdBnV-TZ_vqvhLdtWdOR0q-pZRBA5HNqfRUDRvB6QFRyq4MGbCRMBg

Upcoming Events

February 20: CPDC’s In Conversation: Fostering Philadelphia’s Tech Growth

Join us at 8:30 a.m. on Thursday, February 20, at Lift Labs PHL, 1801 Arch Street, for Fostering Philadelphia’s Tech Growth: Comcast NBCUniversal LIFT Labs PHL.

Learn from Danielle Cohn, head of LIFT Labs, and Luke Butler, senior director of LIFT Labs PHL, about how Comcast supports and partners with Philadelphia’s startup community to position Philadelphia as a hotspot for startup growth and development. They will discuss how LIFT Labs helps startups not only launch and expand, but eventually become demand-drivers for work space in Center City, through programs including the Comcast NBCUniversal LIFT Lab Accelerator, powered by Techstars.

Sumorwuo Zaza, founder and CEO of NICKLPass, an alumnus of the 2019 LIFT Lab accelerator class, will discuss his experience in the program and his decision to stay in Philadelphia.

This event is open to all members of CPDC firms. RSVP to Romina Gutierrez at cpdc@centercityphila.org or 215.440.5543.