Office Sector News
Coworking Firm Mindspace Coming To Wanamaker Building
Global coworking provider Mindspace will launch its first Philadelphia location at the Wanamaker Building later this year. The deal was announced after the company reached a new management agreement with Rubenstein Partners.
Israel-based Mindspace will operate workspaces for companies of various sizes under its own brand on behalf of Rubenstein. The 42,000-square-foot location is expected to open in the third quarter of 2020 and will include events areas and tenant lounges.
Charter School Building In Center City Put Up For Sale
The Center City building housing the Charter High School for Architecture and Design (CHAD) has been put up for sale as part of a process that involves the eventual closing of the school, which had been facing declining attendance and other challenges.
CHAD bought the five-story, 125,000-square-foot building for $10.3 million in 2004. The building is being marketed as a potential conversion into residential or hospitality uses and as a development opportunity. Proceeds will be used to pay off the bonds, brokerage and legal fees involving the sale and any other costs associated with closing the school.
Eds & Meds News
CHOP Announces $3.4B Expansion
Children’s Hospital of Philadelphia has unveiled plans for a $3.4 billion expansion that includes a new inpatient tower. When it opens, the 22-story tower will have 300 beds — with space for 200 more — all in private rooms.
CHOP, currently with 560 beds, is often at capacity. With the new inpatient tower, there will be a total of 700 beds after double rooms in the older building are converted into private rooms. In an article about the plans, The Philadelphia Inquirer noted that the latest plans “will solidify the nonprofit’s status as one of the largest children’s hospitals in the nation and add to the billions that CHOP and the University of Pennsylvania have already poured into that section of the city.”
Penn Gene Therapy Spinout Exceeds Projections With $216M IPO
Passage Bio, a gene therapy developer seeking to commercialize technology developed by Penn Medicine researchers, raised $216 million through an initial public stock offering on Friday. The Philadelphia company sold 12 million shares at $18 per share.
Passage Bio went forward with the IPO despite the current turmoil on Wall Street amid fears about the spread of the coronavirus. Still, the IPO price was at the top of the range projected by the company in documents filed with the Securities and Exchange Commission in early February.
Region’s Manufacturing, Service Industries See Increased Activity
Manufacturing activity in the region increased for the month of February, according to the Manufacturing Business Outlook Survey conducted by the Federal Reserve Bank of Philadelphia. New orders up for 50.3% of firms, down for 16.7%, and remaining the same for 33.0%. The number of employees increased for 18.0% of the companies, decreased for 8.1%, and was unchanged for 73.7%.
Looking ahead six months, 55.6% of the firms expected conditions to improve, 10.2% anticipated a downturn, and 31.6% predicted no change.
Business indicators suggest continued expansion of activity in the region’s service sector in February, according to responses to the Philadelphia Fed’s Nonmanufacturing Business Outlook Survey, with new orders up for 38.2% of firms, down for 10.1%, and remaining the same for 21.0%. The number of full-time permanent employees increased for 25.9% of the companies, decreased for 4.4%, and was unchanged for 61.4%.
Looking ahead six months, 54.6% of the firms expected regional conditions to improve, 10.4% anticipated a downturn, and 35.1% predicted no change.
VC Funding In Philadelphia Reaches Record High
The Philadelphia area saw a record year for venture capital in 2019 with $2.5 billion invested in local companies, according to a new report from PitchBook and the Philadelphia Alliance of Capital and Technologies (PACT).
The number of angel and seed rounds are down slightly, from 94 in 2018 to 91 in 2019, but the funding rounds are for larger dollar amounts. Angel and seed deals brought in a 10-year high of $160.7 million in 2019, up 29% from $124.5 million the previous year. In 2015, when the number of deals peaked at 103, the dollar amount raised totaled just $82.6 million.
Dim Sum House Picks Center City For New Location
The team behind the popular Dim Sum House in University City has opened a new location near Rittenhouse Square. The 4,000-square-foot restaurant can seat more than 140 guests. The bar accommodates 12 people, while outdoor sidewalk seating provides room for 20 more diners.
The Center City location will create about 12 full-time and 15 part-time jobs. The spot will test a new ordering system where guests can place orders via a checklist they can hand off to their server, which the restaurant hopes will be helpful when serving large parties.
Four Seasons Philadelphia Makes Travel + Leisure ‘It List’
The Four Seasons Hotel Philadelphia is among the world's best new hotels, according to a recently released “It List” from Travel + Leisure magazine. The hotel opened in August atop the $1.5 billion Comcast Technology Center, making it the highest hotel on the continent. An express elevator takes hotel guests directly to the hotel lobby on the 60th floor.
The Four Seasons also made the shortlist for USA Today’s “Readers’ Choice Best New Hotels of 2019,” in a review that lauded its views and restaurants.
Residential Market News
LCOR Moves Ahead With Plans For 31-Story Tower
LCOR Inc. has closed on a $12.3 million purchase of One Dock Street, where it wants to build a 31-story apartment building. The real estate company bought the parcel from the Buccini/Pollin Group, which acquired it in 2018 as part of its purchase of what had been known as the Society Hill Sheraton.
When Buccini/Pollin bought the hotel for $95 million, it separately paid $3.4 million for the 9,651-square-foot undeveloped parcel that LCOR purchased. LCOR said construction drawings are in the works for the development, which would have 272 apartments.
13-Story Apartment Tower Planned In Northern Liberties
The development team behind the Whole Foods-anchored apartment building near the Philadelphia Museum of Art have a deal to buy the strip mall across Spring Garden Street from Yards Brewing Co., with plans for a 13-story residential project at the site.
The plans by developers Neal and Victor Rodin for 501-39 Spring Garden – now home to a Dollar General store and other retailers – call for 382 apartments and 60,000 square feet of ground-floor retail space. The proposal also involves 206 parking spaces in an underground garage.
Arts & Culture News
Alexander Calder Collection Coming To The Parkway
A new cultural space dedicated to showcasing the work of Alexander Calder, the sculptor and artist known primarily for his mobiles, has been planned for the Benjamin Franklin Parkway.
The architectural firm Herzog & de Meuron has been selected to design the space. Plans are expected to be unveiled this summer and construction is slated to begin in early 2021. Funding for the project has been raised by philanthropic organizations that include the Neubauer Family Foundation, The Pew Charitable Trusts and H.F. Lenfest.
Academy Of Natural Sciences To Open New $3M Gallery
After a yearlong renovation, the Academy of Natural Sciences of Drexel University will open its first new large-scale exhibit space in a decade on March 29. The venue’s Library Reading Room is being converted to the William B. Dietrich Gallery as part of the $3 million remodel.
The approximately 3,000-square-foot gallery is named after The Dietrich Foundation, a Pittsburgh-based organization that helped finance the renovation. The gallery will display rotating exhibits oriented toward adults.
Philadelphia Ranked 8th Least Car-Dependent City In U.S.
A new study conducted by Compare Car Insurance has found that Philadelphia is the eighth least car-dependent city in the nation. On average, Philadelphia drivers travel about 9,600 miles annually.
Memphis, Nashville and Oklahoma City topped the list of most car-dependent metros, while Seattle, New York and San Jose topped the list of metro areas that are the least dependent on cars.
PPA Continues Center City Rollout of ‘Pay-By-Plate’ Parking Kiosks
The Philadelphia Parking Authority is preparing to launch the second phase of its “pay-by-plate” parking kiosk expansion, poised to become the norm throughout Center City by the end of the summer. The PPA began installing 1,600 new, solar-paneled kiosks in the fall, concentrated around Arch and Race streets between 4th and 12th streets.
The method requires motorists to enter their license plate number and parking zone. While it is no longer necessary to display receipts on the dashboard, drivers can opt for a printed or texted receipt.
Bottom of Form
Next To Arrive: Real-Time Countdown Clocks On SEPTA
SEPTA is in the process of implementing real-time countdown clocks at every subway and trolley stop. The clocks will let riders know how long they must wait until the next train arrives in the station.
Broad Street Line stations will have the countdown clocks in place by November. The Market-Frankford Line and trolley stations will have them by the end of 2022, SEPTA officials said. The countdown clocks will be similar to the ones installed in New York City subway stations.
City Government News
City Finances Not Strong Enough To Weather Severe Recession
Ahead of Mayor Jim Kenney’s budget address this coming Thursday, administration officials and the watchdog agency overseeing the municipal budget said that a modest economic downturn would quickly trigger painful cuts to city services.
Harvey Rice, head of the Pennsylvania Intergovernmental Cooperation Authority (PICA), told the City Council Committee on Fiscal Stability and Intergovernmental Cooperation that he doubted the city’s finances could weather a severe economic downturn and warned the city was not putting away enough reserves. The city’s reserve balance last year was 9% of General Fund spending – second lowest among the top 25 largest cities in the U.S., compared to the standard benchmark of 17%.
Philadelphia’s high poverty rate, weak tax base, and large fixed costs put the city in a vulnerable position, Budget Director Marisa Waxman said. “In all but the mildest recession scenarios, the city’s fund balance would quickly turn negative with deficits over $100 million as early as fiscal year 2022 and the city would be forced to make painful budget choices,” she said.
City Controller Report Voices Concerns About City Spending
City Controller Rebecca Rhynhart has released a new report that also raises concerns about what is described as steep spending increases during Mayor Kenney’s tenure. From 2017 to 2019, a time when price inflation in the Philadelphia area grew only 3%, the budget increased by more than 7% each year.
The report’s conclusion states, “Rather than increasing spending in discretionary areas, the City could address long-standing challenges with the City’s finances and tax structure while stimulating job growth, like increasing the wage tax reductions or building an equitable, fair, and accurate property tax assessment system.”
City Spending Projected To Outpace Revenues In FY2020
City revenues for fiscal year 2020 are projected at $5.0 billion and expenditures are projected at $5.1 billion, according to a new PICA analysis. These estimates increased over the projections in the City’s FY2019-FY2023 Five Year Plan by $91.4 million and $90.4 million, respectively, according to PICA’s Quarterly City Managers Report (QCMR) for the first quarter ended December 31.
Better-than-expected tax collections are the primary driver for the projected increase in revenues, while anticipated increases in wages and outside contracts are the primary causes for the projected increase in spending. The estimated year-end General Fund balance for FY2020 increased to $352.0 million, $142 million higher than in the Five Year Plan, PICA noted.
City Has Spent $23.6M More In OT Compared To Last Year
In its separately released overtime update for the second quarter of fiscal 2020, PICA reported that City overtime costs total $113.1 million, $23.6 million more than through the same period last year. City departments spent 67.9% of their total allocation for FY2020 overtime, with half of the fiscal year still remaining.
FY2020 marks the fifth year in which PICA has advocated for an improved budgeting process, as the City’s target budget for overtime this year is now $33 million more than its original projection. While some overtime costs within the Police Department may be reimbursed, the City projects it will for the first time approach $200 million in overtime spending in a fiscal year.
Former Commerce Chief Harold Epps Joins Bellevue Strategies
Harold T. Epps, who stepped down as director of the Philadelphia Commerce Department, will be joining government relations firm Bellevue Strategies on March 9 as an adviser on economic development projects. The position will include assisting Bellevue’s business clients in dealing with state and local government.
Bellevue, one of the few minority-owned government relations firms in Philadelphia, is led by Mustafa Rashed. Bellevue's clients have included Starbucks, Shift Capital, Philadelphia Federation of Teachers, AARP, Mike Bloomberg 2020 and GCI.
Center City District Celebrates 29 Years
Twenty-nine years ago this month, Center City District began providing services to keep downtown Philadelphia clean, safe and attractive. Since 1991, we have been providing security, cleaning, streetscape improvements, park improvements and much more.
Through our Center City District Foundation, the Plant Center City initiative is CCD’s newest effort to improve Center City by planting 200 street trees by the end of 2020, and we’re halfway there. You can help us reach this goal and make Center City greener.