Office Sector News
Out-of-City Firms Sign Leases in Center City
A global executive search firm from the United Kingdom has picked Center City for its U.S. headquarters. Miramar Global has leased 5,000 square feet at Three Logan Square for its 10 local employees, with plans to add 10 more.
Miramar was founded in 2009 in London and has since grown to $10 million in revenue and 35 employees. It specializes in searches for clients ranging from privately held, venture-backed startups to multinational global enterprises within technology, industrial, science and engineering markets.
Digital commerce consulting firm SUMO Heavy Industries has opened its new headquarters on North 2nd Street in Old City. Founded in 2010 by local entrepreneurs Bart Mroz and Bob Brodie, the new office marks SUMO Heavy's return to Philadelphia, having previously moved its headquarters to New York City for the past six years.
The new office is located in the Creative Arts building, adjacent to the historic Christ Church. Founded in 2010, SUMO Heavy says it will continue to serve its existing clientele, as well as take on a variety of new projects and strike new partnerships with businesses local to the Philadelphia area.
Archworks Building In Center City Sells
A local investment group, whose name was not disclosed paid $8.3 million for Archworks, an eight-story, 50,000-square-foot office structure at 117-125 N. 8th Street in Center City. The property last traded in 2005 for $5.4 million when the seller, a Jenkintown investor, bought it from Kaiserman Co. The property was fully occupied at the time of the most recent sale, but as the Philadelphia Business Journal noted, is within a block of the soon-to-be-vacated Police AdministrationBuilding.
Apartment Complex Coming To Former Destination Maternity Site
Alliance HSP breaks ground at the end of this month on an apartment building in its Sono development. Plans call for a $15 million, four-story structure on top of 11,000 square feet of retail space on a portion of the site now used for parking. The building will have 50 apartments.
Alliance HSP bought the 220,000-square-foot building at 5th and Spring Garden streets for $14 million in fall 2014, with plans to turn it into creative office space. The company later decided to move forward with a mixed-use project, spurred by new zoning that allowed increased heights and a variety of uses at the property. The development now houses the Philadelphia Department of Records and Archives, Yards Brewing Co. and Target Corp.
Retail, Multifamily Coming To Historic Granary Building
The Pennsylvania Liquor Control Board has signed a lease for a 15,000-square-foot wine and liquor store on the lower level of the towering former Reading Co. Grain Elevator building at 20th Street, north of Callowhill.
The Fine Wine & Good Spirits store, which will be among the state’s largest, is part of developer Alterra Property Group’s renovation plan for the former granary that also will include 24 apartments on its upper three floors. The state liquor store would open among a growing cluster of shops, including new Target and Whole Foods Market locations, to serve a growing number of new multifamily developments along the Benjamin Franklin Parkway.
North Broad Street Mixed-Use Tower Groundbreaking Set For July
Developer Eric Blumenfeld is aiming to break ground in July on a 30-story North Broad Street tower with offices, apartments and a fitness club. Blumenfeld said a deal is being finalized with investors in the $160 million project who will be taking advantage of the Broad and Spring Garden site’s location in an “opportunity zone” under the 2017 tax bill.
The project is slated to include about 205 apartments and 68,000 square feet of office space, according to a brochure prepared by brokerage Precision Realty Group to market the proposal’s ground-floor retail spaces. It would be Philadelphia’s tallest building outside the city’s central core, as well as the latest — and largest — project in the city to be funded under the opportunity-zone program.
Eds & Meds News
Comcast, Independence Joint Venture Gets A Name And A Leader
The digital health partnership established last year by Comcast and Independence Health Group now has a name – Quil – and a CEO, Carina Edwards. Edwards will be responsible for leading the company's efforts to provide both patients and caregivers with personalized content and information related to their individual health care needs. She was previously senior vice president of customer experience and corporate development for Imprivata, a health care information technology company based in Lexington, Mass.
Since its formation in April 2018, Quil has built out its cloud-based platform that it expects to be accessible nationally across multiple distribution channels and devices. The Philadelphia-based company plans to launch its first pilot programs with patients later this year.
Philadelphia In the Nation’s Top Regions for Venture Activity
Powered by the life sciences and software sectors, about $1.4 billion in venture capital was invested in the region last year, according to a new report from Philadelphia Alliance for Capital and Technologies (PACT) and PitchBook.
The report notes that the Philadelphia’s venture capital activity is driven by the growth of its life sciences sector, particularly breakthroughs in cell and gene therapy. Pharma and biotech brought in the most funding in 2018, followed by the region’s growing enterprise software sector.
Drexel Names New Medical School Dean
Drexel University has named Dr. Charles B. Cairns as the next dean of its College of Medicine. Cairns will succeed Dr. Daniel V. Schidlow, who announced last year that he planned to retire this summer. Cairns, a specialist in emergency medicine and critical care research, is currently dean of the College of Medicine and Health Sciences at the United Arab Emirates University in Abu Dhabi. He will begin his new role at Drexel in late August.
The Drexel University College of Medicine ranks sixth nationally in medical school enrollment with about 1,000 medical students. The medical school also ranks in the top 100 medical schools in the country for National Institutes of Health funding, receiving more than $47 million in research awards in the last fiscal year.
CEO Of Health Partners Plans To Retire June 1
The longtime president and CEO of Health Partners Plans (HPP) is retiring, and his successor is being promoted from within at the Philadelphia-based Medicaid and Medicare managed care company. Bill George will step down as chief executive of HPP on June 1, when he will be succeeded by Denise Croce, currently HPP’s executive vice president of clinical and provider management.
HPP currently has 245,000 Medicaid members in the five-county region; 16,000 Medicare members in the same five counties along with Lancaster, Northampton and Lehigh counties, and about 11,500 Children Health Insurance in Pennsylvania (CHIP) members.
Higher Room Rates, Revenue Forecast For Philadelphia Hotels
Hoteliers in Greater Philadelphia are expected to enjoy higher room rates and revenue per available room by year-end and well into 2020. Philadelphia hotels are forecast to experience a 3.6% growth in revenue per available room in 2019, outpacing the national average increase of 2.5%, according to new data from CBRE Hotels Americas Research.
Macy’s Launches New Concept In 36 Stores Including Center City
Macy’s in Center City has just added a colorful 1,400-square-foot space featuring more than 400 products from small businesses and major companies like MAC Cosmetics, Crayola and Levi’s Kids.
Last year, Macy’s Inc. acquired Story, the New York City-based concept store that changed its design and products every few weeks so customers were continuously discovering new items. Last week, that concept launched in 36 stores across 15 states, including on the ground floor of the Center City store. The company expects each theme to last about two months and plans to do about five to six Story changes a year.
Philadelphia Spirits Maker Expanding Through North America
Pennsylvania's top-selling spirit, made by Philadelphia spirits maker Federal Distilling, will soon be available on more store shelves across North America. Federal Distilling, located in a 6,000-square-foot distillery at 1700 N. Hancock St., is known for its Stateside Urbancraft Vodka, the top Pennsylvania-made spirit with over $900,000 in sales, according to the Pennsylvania Liquor Control Board.
Federal Distilling has a new distribution deal with Southern Glazer's Wine & Spirits that will cover North America, company officials announced. Southern Glazer's will represent the company in Pennsylvania. Federal Distilling expects to expand to a handful of states each year.
Report Says Philadelphia Surpasses Boston In Keeping College Grads
Philadelphia has attracted an educated and available workforce but must further stoke its job-growth engine to keep millennials here as they age into their late 20s and 30s and look for higher-paying second or third jobs, according to a new report released by nonprofit Campus Philly.
According to the study conducted by Econsult Solutions, 54% of recent college graduates attending school in Philadelphia between 2010 and 2014, stayed in Philadelphia after graduation, surpassing Boston’s 42% retention rate for the same period.
Lawsuit Challenging Pennsylvania’s Transit Funding Dismissed
A federal judge has dismissed a lawsuit that could have cost Pennsylvania hundreds of millions of dollars a year in transportation funding. The suit was filed in March 2018 on behalf of a trucking industry group, who challenged the use of Pennsylvania Turnpike toll money — about $450 million a year — to fund public transportation. The suit argued that it was illegal to use revenue raised through turnpike tolls for non-highway related projects.
SEPTA depends on the toll revenue for almost a third of its $750 million capital budget. Pennsylvania still faces a transportation funding crisis, however. The turnpike revenue challenged by the suit is creating deep debt for the Turnpike Commission — up to $13 billion — and will expire in 2022. SEPTA Chairman Pat Deon will address these issues at CPDC’s State of Center City forum on April 23 at 8:30 a.m. at The Union League.
Study: Cities With Ride-Share Also See Rise In Fatal Crashes
Serious and deadly accidents have risen 3% in major American cities since ride-sharing platforms have been introduced, according to new findings from researchers at Rice University and the University of Chicago Booth School of Business. The researchers arrived at their conclusions — which Uber and Lyft said were flawed — in an analysis that includes statistics from the National Traffic Highway Safety Administration.
The study noted that ride-share services have clear benefits, like increased convenience for commuters and new income sources for drivers. But the researchers also stated that “costs exist, are not trivial, and can be measured in human lives – specifically, in increased rates of major traffic accidents and traffic fatalities.”
PPA Head Says State Audit Of Uber Doesn’t Go Far Enough
The head of Philadelphia’s parking agency said he agrees with a state audit calling for better safety measures for Uber passengers, but he said legislators should go much further and impose wide-ranging new regulations on ride-hailing services.
Scott Petri, executive director of the Philadelphia Parking Authority, wants the state to grant the PPA power to certify Uber and Lyft drivers in the city — and to conduct background checks before they can take passengers. The companies now conduct the checks themselves and do not have to share data on drivers with the PPA.
PHL To Begin North America's Only Flight To Bologna, Italy
American Airlines this year will begin nonstop flights from the Philadelphia International Airport to Bologna, the capital of Emilia-Romagna. Flights will run June 6 through Sep. 28 from PHL to Bologna Guglielmo Marconi Airport, or BLQ. The new flights would make PHL the only North American airport serving Bologna.
Italy is Philadelphia's seventh-largest overseas visitor market, according to the Philadelphia Convention & Visitors Bureau, which reports nearly 21,000 visitors from Italy traveled to Philadelphia in 2017. The new flights will connect Philadelphia with one of the wealthiest regions in Europe. Emilia-Romagna in 2017 had a total gross domestic product of $157.1 billion, according to Eurostat, making it among the top five wealthiest regions in Italy.
Residential Market News
New Project To Bring More ‘Coliving’ Apartments To Philadelphia
An apartment building featuring suites of so-called coliving units with shared kitchens and bathrooms is moving forward in Fishtown. New York-based Common Living, which manages similar properties in six U.S. markets including New York, Chicago and the San Francisco Bay area, is working with local developer Elk Street Management on the development at 965 Frankford Avenue. The building will have space for 72 residents.
The five-story Common Frankford, as the property is to be known, is scheduled to open in early 2020. The company has earmarked $100 million to invest in projects across Philadelphia. Common Frankford will house coliving suites, studios and one-bedroom apartments, in addition to shared lounges and kitchens, bike storage, and an outdoor terrace.
The development in Fishtown is part of a broader trend of new housing construction in neighborhoods north of Girard Avenue. For details about Greater Center City market, visit the latest housing report from CCD/CPDC, Building Out From the Core.
Parks & Public Space News
Rail Park Named Finalist For 2019 ULI Rouse Awards for Excellence
Urban Land Institute Philadelphia has announced that the Rail Park is a finalist for ULI’s 6th Annual Willard G. “Bill” Rouse III Awards for Excellence. The Rail Park was among 13 projects selected by a national jury of experts comprised of interdisciplinary industry leaders. Winners will be announced on June 12.
Phase 1 of the Rail Park, a $10.8 million construction project that opened to the public in June 2018, has transformed a blighted section of the former Reading Railroad Viaduct into an elevated park with walking paths, landscaping, lighting, swinging benches, and expansive city views. In 2010, CCD began working with the surrounding community, planning, raising funds and overseeing construction of what is now a vibrant green space for the Callowhill and Chinatown North neighborhoods.
Philadelphia Agtech Startup Augean Robotics Raises $1.5M
Augean Robotics, Philadelphia-based makers of a robotics platform for the farming industry, just raised a $1.5 million seed round to grow its staff and scale the deployment of its technology. The company, founded in 2017, makes an autonomous, collaborative farming robot called Burro.
For its seed round, the lead backer is New York-based ff Venture Capital, a traditional tech-focused VC firm that has backed companies such as Indiegogo and Content.ly. But it also received backing from Chicago-based S2G Ventures and San Diego-based Radicle Growth, both investors in the agriculture and food business. Locally, Ben Franklin Technology Partners also joined the round.
Suburban Station Merchants Say Hub of Hope Is Hurting Business
In a series of interviews with Suburban Station vendors, KYW Newsradio reported that most support the recently expanded Hub of Hope homeless services facility but many expressed concerns about seemingly related behavioral issues that have negatively impacted their businesses. Hub of Hope has provided resources for homeless people in Suburban Station since 2012. In the past year, in partnership with the City and SEPTA, Project Home moved to an 11,000-square-foot walk-in facility that provides year-round medical and social services, showers, and laundry facilities that has provided a valuable off-street, full-service location.
Business owners in the concourse told KYW that their complaints to the city have gone unanswered about open drug use, harassment, lewd acts, violent activity and unsanitary conditions. Police and Project Home said investigations have shown the negative behavior is not being caused by Hub of Hope users, but rather by other individuals who use the “cover” of clusters of homeless individuals to conduct illegal activity.
In CCD’s State of Center City 2019 report, being released at the CPDC April 23 meeting (invitation at the bottom of this newsletter), the latest data shows the marked rise in Center City’s daytime homeless and panhandling populations during the last four years. It also outlines the homeless outreach program launched by the CCD last year in partnership with Project Home, the Police Department’s service detail and the City Department of Behavioral Services that helped 134 people to come off the street and access services. That program will be restarting later this month.
City Government News
11 Of 17 City Council Members Score 0 In Business Journal Report
A report from the Philadelphia Business Journal examined votes by City Council members on 10 bills introduced from 2011 to 2019 that were deemed anti-business, scoring lawmakers based on their percentage of votes against those bills. The scorecard gave zero ratings to Cindy Bass, Jannie Blackwell, Darrell Clarke, Derek Green, Bill Greenlee, Helen Gym, Bobby Henon, Kenyatta Johnson, Curtis Jones, Mark Squilla and Blondell Reynolds-Brown. The remaining six City Council members scored as follows: Brian O’Neill, 60; Al Taubenberger, 60; David Oh, 56; Allan Domb, 17; Cherelle Parker, 17; Maria Quinonez Sanchez, 11.
The 10 bills counted in the tally were: Ban the Box Bill (110111-A), First Source Jobs Policy Bill (120009), City Contract Prerequisites Bill (130457), Paid Sick Leave Bill (141026), Limiting Credit Checks Bill (160072), Soda Tax Bill (160176), Salary History Ban Bill (160840), Fair Workweek Employment Standards Bill (180649-A), Minimum Wage Bill (180846), Cashless Store Ban Bill (180943).
PICA: March Tax Collections Up 14% Compared To Last Year
The City collected approximately $382.0 million in General Fund tax revenue in March 2019, compared to $334.6 million in March 2018, an increase of 14.2%, according to a new report from the Pennsylvania Intergovernmental Cooperation Authority (PICA). Real estate tax collections totaled $145.3 million, $30.6 million more than in March of last year, for an increase of 26.6%. This increase, along with increases in most other major tax categories, resulted in a year-to-date increase in total collections of 4.2% – more than double the City’s projection of 2.2%. Growth in real estate taxes could provide an opportunity for the City to accelerate reductions in the wage and business income and receipts tax (BIRT) rates.
Through March, BIRT revenues rose 12.2%, compared to a projected growth of 1.8%; the real estate tax increased 8.7%, compared to a projected growth of 1.5%; but the realty transfer tax decreased by -7.1%, compared to a projected 2.6% decrease; and the City sales tax collections rose by 0.5%, compared to a projected growth of 6.0%.
CCD/CPDC Meeting April 23, With Release Of State Of Center City: 2019
Join us for the release of CPDC/CCD’s annual State of Center City report, where CCD President Paul R. Levy will provide an overview of the report highlighting the enormous strengths and progress in Greater Center City and the challenges Philadelphia still needs to address to make current growth even faster and more inclusive.
Hear from SEPTA Board Chairman Pasquale T. (Pat) Deon about SEPTA’s role as a major generator of economic activity in Center City and the region and the proposals to secure and expand more sustainable, long-term revenue sources for SEPTA’s operating and capital needs.
First Deputy Commerce Director Sylvie Gallier Howard will focus on Philadelphia’s Global Identity Project – a plan to raise our visibility and tell our story more effectively regionally, nationally and globally through a common narrative and visual identity that promotes Philadelphia for business, talent and investment opportunities.
The meeting will take place April 23 at 8:30 a.m. at The Union League, Meade Room, 140 S. Broad Street.
CPDC members are encouraged to invite both young professionals and other members of their firms to attend this meeting. Please RSVP by April 17 to Romina Gutierrez at email@example.com or 215.440.5543.