CPDC Developments Newsletter - 02.19.19

Office Sector News

Economic Development Debate in Wake of Amazon Loss

Amazon’s decision to cancel its plans for opening part of its HQ2 in Queens, New York, has prompted and highlighted a major debate in economic development circles and within national political parties about the most effective and equitable ways to prompt job growth in America’s cities, summarized in yesterday’s New York Times.

Co-Working Operator Expands In Center City

Co-working space operator Spaces, a unit of the European shared-office giant IWG, has signed a lease to occupy the entire six-story Stein Bellet Building at 1626 Locust Street and plans to open there at the end of this year. Spaces will fill 48,000 square feet in the building that formerly housed the Philadelphia division of the American Cancer Society, according to real estate services firm CBRE, which represented the company in the deal. Stockton Real Estate Advisors represented the building’s owner, Cross Properties.

Spaces’ first Philadelphia location is the historic Hale Building at Chestnut and Juniper Streets, where Brickstone leased them all the upper floors in the building, 37,735 square feet.

New Office Building To Rise Next To Stadiums 

Comcast Spectacor of Philadelphia and the Cordish Cos. of Baltimore are collaborating on plans for an $80 million office building adjacent to the Xfinity Live! entertainment complex in South Philadelphia. The proposed 200,000-square-foot building, dubbed Pattison Place, will have 20,000 square feet of retail space.

The proposed site for the building is now a surface lot where the former Spectrum once stood. No tenants have been lined up yet for the building, which is slated to open in early 2020. The office project is designed by Beyer Blinder Belle of New York and BLT Architects of Philadelphia.

Eds & Meds News

France’s BioMeriéux buys Philadelphia biotech firm for $75M

BioMérieux, a French firm considered a leading player in diagnosing infectious diseases worldwide, has acquired University City-based Invisible Sentinel for $75 million.

Founded in 2006, Invisible Sentinel sells Veriflow, a patented technology that provides rapid detection of pathogens and spoilage organisms in food and beverages. More than one million of its tests have sold since they went on the market in 2014. Invisible Sentinel will remain at its headquarters in the University City Science Center and the company’s 40 employees will be retained.

Jefferson To Support Israeli Med Tech Developers; $1M For Startups

Thomas Jefferson University is teaming up with the Israel Innovation Authority on a competition that will award four Israeli startup companies with a total of $1 million to advance their health care technology.

The startups selected to participate will receive up to 50% of their approved pilot expenses budget from the Israel Innovation Authority. Jefferson will provide in-kind services, expertise and its use of facilities in exchange for equity in the successful applicant or a share in revenues generated by a product or service it develops.

Pharmacy Benefits Manager To Buy N.Y. Direct-Delivery Business

Center City-based Enclara Pharmacia has entered into a deal that will strengthen its presence in the New York City area. The privately-held pharmacy benefits manager and mail-order medication supplier, which specializes in serving the hospice community, signed an agreement to acquire Avanti Health Care Services. Financial terms of the deal, expected to close during the first quarter of this year, are being kept confidential.

Enclara is headquartered at 1601 Cherry Street. It has about 350 employees in the Philadelphia region and more than 500 nationwide. Avanti, based in New Hyde Park, N.Y., is a direct delivery pharmacy provider that serves the home care market in the New York City area.

Penn Biotech Startup Wins Grand Prize In National Competition

A University of Pennsylvania biotech startup has won the $100,000 grand prize in Arizona State University’s third annual Innovation Open competition. Strella Biotechnology was awarded the prize for developing sensors that measure fruit ripeness by calculating ethylene gas production to reduce food waste and increase fruit quality for packers and distributors.

Strella has won $250,000 in previous competitions and has done trials with two of the largest fruit packers in Washington state. Strella has seven new contracts signed for the year.

Community College Of Philadelphia Unveils $7.2M In Lab Upgrades 

Community College of Philadelphia (CCP) has completed $7.2 million in upgrades in its laboratories at its main campus in Center City. CCP officials said the renovated labs and new equipment are vital for bolstering and diversifying the region’s STEM (science, technology, engineering, mathematics) workforce.

For more than 18 years, CCP has worked with the Wistar Institute to train its students in biomedical technician skills. More than half of the 152 graduates of the program so far have been students of color, and 72% are women. The renovations in both lab and teaching spaces were funded through sources including state and city funding, as well as from CCP’s own funds, including tuition and private donations.

Attorneys Donate $1.65M For Drexel Community Lawyering Clinic

Attorneys Andy and Gwen Stern have gifted $1.65 million to Drexel University’s Kline School of Law for enhancements to its community lawyering clinic that will now bear their name. Located in Drexel’s Dornsife Center for Neighborhood Partnerships, the clinic allows law students to represent individual clients and families in nearby Mantua and Powelton Village facing legal issues, provide training to residents who face common problems and publish reports that advocate for policy changes.

Andy Stern is partner at plaintiffs personal injury firm Kline & Specter, whose co-founder, Thomas Kline, had Drexel Law named after him after he gifted the school $50 million in 2014. Gwen Stern serves as director of Drexel Law’s trial advocacy program.  

Hospitality News

2 Big Conventions Returning To Philadelphia In 2019

Pittcon, last held in Philadelphia in 2013, returns March 17-22 to the Pennsylvania Convention Center, bringing 15,000 biotechnology researchers, chemists and scientists to Center City. The Philadelphia Convention & Visitors Bureau estimates Pittcon will generate $14.6 million in economic impact and 20,251 total hotel room nights.

BIO, returning June 3-9, was the second-largest convention held in Philadelphia during its last visit in 2015. This year's BIO is projected to attract 15,500 attendees, generating more than $41 million in economic impact and 28,466 hotel room nights.

Nineteen citywide conventions are expected to take place in Philadelphia this year. Center City's hotels in 2018 hit record highs in occupancy, average daily rate and revenue per available room.

Philadelphia OIC, PCCA Mark 25-Year Partnership

Philadelphia OIC's hospitality training program is marking a 25-year relationship with the Pennsylvania Convention Center Authority. OIC’s Hospitality Training Institute was founded in 1989 to train students seeking careers in the hospitality and culinary industry. With the financial support of the PCCA, the institute annually trains 200-plus students.   

In recognition of the 25th anniversary, the PCCA has allocated two $5,000 scholarships for alumni of the program to further their education in the hospitality industry. Hospitality Training Institute has trained more than 5,000 people since its inception.

Retail News

Retail Gaming Arcade Coming To Fashion District Philadelphia

Japan-based Round One Entertainment Inc. plans to open its first arcade and entertainment venue in a U.S. city center at the upcoming Fashion District Philadelphia shopping and entertainment complex on East Market Street.

Round One centers offer arcade games, billiards, bowling, karaoke and other activities, along with food and drink. The Philadelphia location will occupy more than 60,000 square feet on the third floor of the complex’s westernmost building, which it will share with an AMC Theatres cinema. Fashion District, a joint venture of PREIT and Macerich of Santa Monica, Calif., is scheduled to open in September. 

Chase Seeks New Branch In South Broad Mixed-Use Project 

JPMorgan Chase & Co. is seeking regulatory approval to open a branch in the new Lincoln Square mixed-use development in South Philadelphia. 

Citing documents filed with the federal Office of the Comptroller of the Currency, the Philadelphia Business Journal reported that the nation’s largest bank, which has plans to add 50 locations in the Philadelphia region over the next five years, is seeking approval for a branch on the northwest corner of Broad Street and Washington Avenue. That is the location of Lincoln Square, a $160 million development of 322 apartments and 100,000 square feet of retail space including Sprouts Farmers Market, Target and Starbucks.

94-Year-Old Swiss Haus Bakery Has A New Owner

The Swiss Haus Bakery in Rittenhouse Square has a new owner. Ronald Simms of FJS Capital Management acquired the bakery at 35 S. 19th Street, which first opened in 1925. Financial details of the sale were not disclosed.

The second location in Old City, which opened in 2015, was required to close as a stipulation of the sale; it closed late last year. Swiss Haus will still operate as a kosher bakery, but Simms plans to convert the Rittenhouse location into a café where customers can eat on-site.

Giant To Open 3 More Stores in Greater Center City

After the successful recent launch of Giant Food Stores’ first urban format store in Philadelphia, the Carlisle, Pa.-based company said it will open three more stores throughout the city. The three new Giant Heirloom Markets will occupy 9,950 square feet in University City at 3401 Chestnut Street, 9,500 square feet in Northern Liberties at 1002 N. 2nd Street, and 17,000 square feet in Queen Village at 201 South Street.

Giant expects to open the location in University City in the summer, Northern Liberties in the fall, and Queen Village in the winter. Its current location at 2303 Bainbridge Street opened in January. The four stores will create about 150 full- and part-time jobs.

Transportation News

Report Finds Philadelphia In Top 10 U.S. Cities For Congestion

Philadelphia had the ninth worst traffic congestion in the United States in 2018, according to an annual survey conducted by mobility data company Inrix.

Inrix bases its rankings on two things: hours and money lost due traffic (Inrix defines hours lost as "the total number of hours lost in congestion during peak commute periods"). According to those metrics, the average Philadelphia driver lost 112 hours and $1,568 to congestion in 2018. For 2018, the five most congested U.S. cities for 2018 were Boston; Washington, D.C.; Chicago; New York City; and Los Angeles.

Residential Market News

The Hamilton Residential Tower Opens This Month

The Hamilton, a new 10-story residential development in Logan Square, is planning its official opening at the end of February. Radnor Property Group’s two-phase, $160 million project broke ground in fall 2017 and is about halfway through completion.

The completed tower at 440 N. 15th Street has 279 rental units, along with amenities like an interior courtyard, communal lounge space, and smaller common rooms for working or studying. The developer said the design stage for the second tower is underway, with construction scheduled to begin in late 2019.

Rittenhouse Square Tower Opening 2021 Has Sold 25% Of Units

Southern Land Company has announced that 25% of the units have already been sold in its residential tower currently under construction at 1911 Walnut Street.

The 48-story building, dubbed The Laurel, broke ground last fall and is slated to start deliveries in 2021. It will include retail on the first several floors, with rental units on the floors directly above. The top stories will feature 60 condominiums, ranging from 1,700 square feet for $2.4 million to 9,000 square feet for $15 million.

CookNSolo Announces Plans For Pearl Properties' The Harper

CookNSolo and Pearl Properties have revealed plans for a bakery, bar and cafe that will occupy a ground-floor space at The Harper, Pearl Properties’ 25-story mixed-use tower currently under construction. The new Michael Solomonov concept, named K'Far, translates in Hebrew to "village," referencing the central role of the bakery in Israeli life.

The Harper at 110 S. 19th Street will include retail and office space along with a fitness center, basketball court, outdoor pool and other amenities. Pastry chef Camille Cogswell, who won a James Beard Award last year for her role at Solomonov’s Zahav, will be at the helm for K'Far.

Development News

Council Approves $10M Land Transfer Of Provident Mutual Building

City Council voted on February 7 to allow the $10 million transfer of the long-vacant Provident Mutual building at 4601 Market Street. Iron Stone Real Estate Partners have plans to buy the land from the city and redevelop it for tenants University of Pennsylvania, Children’s Hospital of Pennsylvania, Public Health Care Management Corporation, and the YMCA.

The fate of the 13-acre site has been in flux for years. The city spent about $50 million renovating the building for the new Police Department headquarters, before deciding instead to relocate in the former Philadelphia Inquirer building on North Broad Street.

Parkway Condo Project Wins Key City Approval

The Philadelphia Art Commission has voted to allow developer Ernest Bock and Sons to move forward with their proposed condominium project 2100 Hamilton Avenue. The 10-story building will overlook the 89-year-old Rodin Museum and occupy one of the last slices of developable land on the Benjamin Franklin Parkway. Plans also include capping over the rail cut behind the building^.

Officials from the Rodin Museum have expressed concern about the development’s effect on the works of art and neoclassical façade. The developer conducted a light study, which concluded that the reflective glass exterior of the building would have minimal effect. Project architect Cecil Baker told the Art Commission that the least reflective glass possible was chosen for the project.

Public Policy News

City Journal Examines Drug Policies in San Francisco

A recent article in City Journal includes a reaction to what the article refers to as “the unintended consequences of harm reduction” policy in San Francisco. The opinion piece expresses concerns about San Francisco’s approach and questions its public health impact on both the community at large and the individuals who are in need of help.

Government News

PICA: January Collections Drop 7% Compared to Last Year

The City of Philadelphia collected $305 million in General Fund tax revenue in January of FY2019, compared to $328.4 million in January of last year, a decrease of 7.1%, according to preliminary figures from the Pennsylvania Intergovernmental Cooperation Authority (PICA).

While wage, earnings, and net profits collections remained level, decreases in the business income and receipts tax (BIRT), real estate tax, and realty transfer tax collections resulted in the overall decrease in January collections. January was the second month of FY2019 to see a decrease in total collections over the previous year; as a result, year-to-date collections for FY2019 are slightly higher (0.1%) than what was collected at the same point last year. PICA stated that because many major tax collections occur in the spring, it is too early to project revenue growth as compared to FY2018.

Through January, BIRT decreased by -0.1%, compared to a projected growth of 12.9%; the real estate tax decreased by -17.2%, compared to a projected growth of 3.5%; the realty transfer tax decreased by -5.5%, compared to a projected 6.5% growth rate; and city sales tax collections rose by 1.5%, compared to a projected growth of 3.0%.