CPDC Developments Newsletter - 03.17.20

Developments for March 16, 2020

Developing News

Guidance Regarding Coronavirus

Given the fast changing nature of the situation, here are some links that can guide decision making around personal safety and business operations.

Economic News

Nasdaq Picks Navy Yard As Precautionary Backup

Nasdaq has prepared a backup trading floor and secure data facility at the Philadelphia Navy Yard business center as a precaution if the COVID-19 coronavirus leaves Wall Street systems vulnerable. The Philadelphia Inquirer reports that the securities-trading giant has stepped up training in recent days to add dozens of personnel at its League Island Boulevard center, if needed.

Nasdaq bases its futures and options trading businesses at the FMC tower in University City. Nasdaq and its counterparts, including the New York Stock Exchange, have expanded their back offices and recovery centers since Hurricane Sandy flooded parts of lower Manhattan in 2012.

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Eds & Meds News

Philadelphia Biotech Firm Joins Effort To Develop COVID-19 Vaccine

Philadelphia-based life sciences company Integral Molecular has joined the effort to help develop vaccines and therapeutics for the new strain of the coronavirus. Integral Molecular of Philadelphia said it is using two of its key technology platforms to gain understanding of the immune response to the virus, and to identify the biological factors that allow the virus to spread so quickly.

Integral Molecular responded in a similar fashion to previous emerging epidemics, including Zika and Ebola viruses, supporting vaccine and therapeutic discovery efforts throughout industry and academia. Founded in 2001, Integral Molecular last year expanded in University City with a 26,000-square-foot research facility at 3624 Market Street.

Amicus Unveils $25M Research And Gene Therapy Center

Amicus Therapeutics has opened a $25 million global research and gene therapy center in University City. The biotech company last year entered into a 10-year lease deal under which it will occupy 75,000 square feet and take the top three floors at 3675 Market Street in University City.

The 14-story building, which opened in November 2018, was developed by the University City Science Center, Wexford Science and Technology, and Ventas. Amicus has already hired about 100 people, mostly research scientists. That number is expected to grow to about 200 over the next several years.

Office Sector News

Independence Blue Cross Tower Comes Up For Sale 

Piedmont Office Realty Trust Inc. has put 1901 Market Street up for sale. The 45-story office building totals 801,000 square feet and was developed in 1987 for Independence Blue Cross, which has a lease on the space until 2033. It has two 10-year options to extend the lease.

Piedmont, an Atlanta-based real estate investment trust, bought the building in 2003 for $174 million and in recent years invested $100 million to upgrade the lobby, an outdoor plaza and mechanical systems. The real estate company also renovated the building's floors to a more contemporary style, and added cafés and other gathering areas.

Keystone Selects Cushman & Wakefield To Lease The Washington

Cushman & Wakefield has been named leasing agent for The Washington, a 20-story office tower at 5th and Walnut streets. Keystone Property Group has owned the property since 2016. Building amenities include a 3,000-square-foot fitness center, a conference center and on-site daycare via Chesterbrook Academy.

Adjacent to Washington Square Park and Independence National Historic Park, The Washington is 85% leased. Current tenants include Chubb Insurance, BDP International, the Superior Court of Pennsylvania, the American Board of Internal Medicine, Urban Engineers and AKF Group.

Dechert Takes Space At Mellon Bank Center 

Dechert has signed a lease for 34,987 square feet at 1735 Market Street and is subleasing the space from CDI Corporation. CDI was acquired three years ago by AE Industrial Partners and no longer needed the space as a result of the merger, the Philadelphia Business Journal reported.

Dechert has been on the hunt for new office space for nearly two years. The law firm currently occupies roughly 240,000 square feet at Cira Centre at 2929 Arch Street. The 1.3-million-square-foot 1735 Market tower, which is also known as Mellon Bank Center, landed international law firm Akin Gump Strauss Hauer & Feld as a tenant and expanded long-term tenant Robert Half International at the end of last year to push occupancy above 90%.

JLL: Market West Rents Up 5.7% Year-Over-Year

After two straight years of Market East’s Class A asking rental rate placing above its historically more expensive neighbor, the west side’s renewed momentum has moved the Market Street West submarket ahead in Center City. JLL states that Market West’s asking rate is just under $34 per square foot, with Market East about a half-dollar less than that.

Market West rents are up 5.7% year-over-year, one of the strongest rates of any submarket locally, but also pacing ahead of many other CBDs nationally. Market West’s rental rate is 20% higher than in 2014, and though Market East’s increase since that year has been steeper, the repositioned properties most responsible for that climb, including 1100 Ludlow, are largely leased up, JLL noted.

Transportation News

SEPTA Fare Restructure Plan Proposes Free Transfer

SEPTA has announced plans to increase its Travel Wallet base fare from $2 to $2.50, while also proposing one free transfer to riders. Riders previously had to pay $1 for all transfers. Under a fare restructuring proposal released last week, riders would pay $2.50 for one ride and a transfer, rather than $3.

The change, which is part of SEPTA’s larger fare restructuring plan, requires approval from the transit system's board. A public comment period will begin April 10, with 10 public hearings scheduled for across the region. The full SEPTA restructuring plan will be posted online March 20.

New Advocacy Group Examining Ideas To Improve Transit

A coalition of local organizations has launched Transit Forward Philadelphia, an advocacy group that will focus on improving public transportation. The group has been working together for the past six months on a plan to make the city’s transit network accessible, affordable and convenient, and is now seeking public input. 

Transit Forward Philadelphia is a collaboration of AARP Pennsylvania, the Bicycle Coalition of Greater Philadelphia, Clean Air Council, Conservation Voters of Pennsylvania, 5th Square, the Philadelphia Association of Community Development Corporations, Service Employees International Union 32BJ (SEIU32BJ), the Sierra Club and Philadelphia Climate Works, PenTrans and the Sustainable Business Network.

Hospitality News

New Restaurant Is Coming To East Market Development

A new restaurant called The Wayward opens next month at 1170 Ludlow Street, inside the Stephen Girard Building as part of the new East Market development. The menu will include French and American fare as well as a raw bar.

In addition to a 90-seat dining room, the restaurant will have seating for 30 on an outdoor patio. The Wayward will serve lunch and dinner daily.

Development News

West Walnut Street Property Comes Up For Sale 

A building on West Walnut Street that most recently housed British retailer Jack Wills has been put up for sale. Located at 1617 Walnut Street, the property totals 6,916 square feet and is listed for $7.5 million. According to city records, the building last traded in 1996 for $300,000 and is owned by the Rosenberg Family Partnership.

The property, designed by Seeburger & Rabenold and built in 1921, is zoned CMX-5, which allows for dense development and additional stories to be constructed atop the structure.

Government News

PICA: February Tax Collections Up 6.8% Compared to Last Year

The City collected approximately $599.8 million in General Fund tax revenue in February 2020, compared to $561.8 million in February 2019, an increase of approximately $37.9 million, or 6.8%, according to preliminary figures from the Pennsylvania Intergovernmental Cooperation Authority (PICA). The overall gain was driven by increases in the City portion of the wage, earnings, and net profits tax ($10.4 million, or 8.8%), real estate tax ($23.8 million, or 6.1%), realty transfer tax ($6.6 million, or 47.3%), parking tax ($318,463, or 4.1%) and amusement tax ($815,903, or 70.0%), compared to February 2019.

Fiscal year-to-date collections are ahead of last year by 8.2% through February. BIRT rose 33.3%, compared to a projection of no change thus far in FY2020; the real estate tax rose 9.2%, compared to a projected rise of 0.8%; the realty transfer tax rose 7.5%, compared to a projected 2.4% increase; and the city sales tax collections rose 5.8%, compared to a projected growth of 5.4%.

CCD News

Just Released: New CCD/CPDC Report On Philadelphia Budget

A new report by Central Philadelphia Development Corporation (CPDC) and the Center City District (CCD), Investing the Proceeds of Growth, looks at the City’s budget and tax policies for the last two decades to help frame an evaluation of how to use the municipal budget more strategically to grow more family-sustaining jobs, while supporting needed services.

To review a summary of the report, download the 22-slide presentation.

Click the link below for a Q&A with Larry Platt of The Philadelphia Citizen and CCD President Paul Levy on the report.

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.