News

CPDC Developments Newsletter - 10.01.19

Economic News

Why Do People Leave Philadelphia? Jobs Top List

Approximately 60,000 residents leave the city each year—at least 10,000 more than domestic in-migration, according to census department data. Philadelphia continues to add residents because of the impact of foreign immigration and local births. A new survey by The Pew Charitable Trusts of those who left found that jobs topped the list of reasons for departing.

Of the 1,000 people surveyed, 26% mentioned jobs; public safety was second, at 14%, followed closely by cost of living, housing, and schools. For those who left the region, 44% attributed their move to “inability to find the right position in Philadelphia or the availability of better options elsewhere.”

Reasons for leaving varied widely based on respondents’ age, educational attainment, income, ties to the area and destination. But among respondents under 30 years of age, 34% cited job opportunities as their number one reason for living the city, scoring it almost three times as high as the second highest choice, to get closer to family/friends. For those with a bachelor’s degree, 36% cited job opportunities as their number one reason for living the city, scoring it more than three times as high as the two next highest reasons which were tied at 11%, better schools for my children and to get closer to family/friends. Even after moving out, 70% of respondents rated Philadelphia a good or excellent place to live.

https://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2019/09/whos-leaving-philadelphia-and-why

Poverty Rate Falls, But Philadelphia Remains Poorest Of 10 Biggest U.S. Cities

Philadelphia’s poverty rate has dropped to its lowest level since 2008 and median household income has risen, according to newly released data from the U.S. Census Bureau. The report said the city’s poverty rate declined from 25.7% in 2016 to 24.5% in 2018; the number of Philadelphia residents living in poverty dropped from 391,653 to 377,116; and median household income (adjusted for inflation) increased from $43,372 to $46,116.

However, Philadelphia remains the poorest of the 10 most populous U.S. cities, the data show. The city’s childhood poverty rate was 34.6%, compared with around 20% nationwide. And while its deep poverty rate — a measure of people living at 50% of the poverty line or below — dipped somewhat in 2018, it came in at 11.1%, the highest among cities with a population of one million or more. The poverty line for a family of three in 2018 was $20,780.

https://www.inquirer.com/news/poverty-median-household-income-philadelphia-pennsylvania-new-jersey-census-american-community-survey-20190926.html

Regional Service Industries Continue Growth in September

Business indicators suggest continued expansion of activity in the region’s service sector in September, according to responses to the Philadelphia Fed’s Nonmanufacturing Business Outlook Survey, with new orders up for 21.8% of firms, down for 12.1%, and remaining the same for 38.5%. The number of full-time permanent employees increased for 31.3% of the companies, decreased for 9.3%, and was unchanged for 55.3%.

Looking ahead six months, 37.0% of the firms expected regional conditions to improve, 19.7% anticipated a downturn, and 39.2% predicted no change.

https://www.philadelphiafed.org/research-and-data/regional-economy/nonmanufacturing-business-outlook-survey/2019/nbos0919

Office Sector News

Philadelphia Surpasses 1M Square Feet Of Coworking Space

Philadelphia’s inventory of flexible coworking space has reached a record 1.1 million square feet, according to a report by CBRE. The city reached that number by the end of Q2, an increase from just 233,000 square feet five years ago.

The leading coworking management companies, in terms of square footage, are WeWork with 193,000 square feet in Philadelphia, the Cambridge Innovation Center (CIC) with 127,000 square feet and 1776, with 119,000 square feet.

https://www.cbre.com/agile-real-estate/Lets-Talk-About-Flex-US-Flexible-Office-Market-2019

Development News

Goldenberg Group Selected To Develop 500 S. Broad Street Site

A team involving the Goldenberg Group has been tentatively selected to buy and develop the South Broad Street site where a city-owned health center had operated for nearly 60 years. If approved, the deal would give the team near-complete control of a full city block in one of Center City’s most active areas of real estate development.

The Philadelphia Industrial Development Corporation (PIDC) is handling the property’s sale on the city’s behalf. Goldenberg and Robert and Harvey Spear, owners of parking operator E-Z Park Inc., teamed up to bid on the property at 500 South Broad Street. The selection must be approved by City Council and the Philadelphia Authority for Industrial Development, a subsidiary of PIDC.

https://www.phillytrib.com/news/local_news/the-goldenberg-group-selected-to-redevelop-south-broad-street-health/article_65d6e5e7-8764-5735-8c9d-9607b3a02602.html

Philadelphia Navy Yard Starts Search For New Development Partner

The Philadelphia Industrial Development Corporation (PIDC) has released a Request for Qualifications document with the purpose of finding one or more development partners for two sites at the Philadelphia Navy Yard totaling 110 acres. Part of PIDC’s vision for its next phase will include residential and mixed-use properties for the first time.

https://www.prnewswire.com/news-releases/pidc-releases-request-for-qualifications-seeking-new-development-partners-for-the-philadelphia-navy-yard-300926473.html

The move comes after developer Liberty Property Trust decided to focus solely on industrial real estate and step away from further work at the Navy Yard. Under PIDC’s watch, Liberty turned a centrally located 80-acre section of the Navy Yard into what’s known as the Corporate Center, a collection of contemporary buildings housing 15,000 employees and comprising 800,000 square feet of office and lab space. Click below for a link to the RFQ.

https://navyyard.org/rfq

Comcast, Cordish In Talks For Naming Rights Of $50M Esports Arena

Comcast Spectacor and the Cordish Cos. have broken ground on the $50 million Fusion Arena, a project the organizations expect will serve as a global destination for esports events on the East Coast when it opens in January 2021.

The company is in discussions with multiple businesses about acquiring the naming rights for the 3,500-seat venue, which is being built next to the Xfinity Live! complex adjacent to the Wells Fargo Center. Representatives from Baltimore-based Cordish said the venue will be the first of its kind for esports in the Western Hemisphere.

https://technical.ly/philly/2019/09/26/overwatch-fusion-esports-arena-south-philadelphia-sports-complex-2021-broke-ground-comcast-spectacor/

Eds & Meds News

Drexel, Tower Health To Buy St. Christopher’s For $50M

Drexel University and Tower Health have entered into an agreement to acquire St. Christopher's Hospital for Children for $50 million. Drexel and Tower Health will be equal partners in the ownership of St. Christopher’s Hospital, physician practices and graduate medical education program.

In their proposal, officials from Tower and Drexel expressed their commitment to strengthen the 144-year-old institution. Tower Health and Drexel will assume operations of St. Christopher's Hospital by the end of the year and have assured a seamless transition with St. Christopher's existing partners, physicians, medical professionals, students, residents, fellows and staff.

https://drexel.edu/now/archive/2019/September/Drexel-Tower-to-Assume-Ownership-of-St-Christophers-Hospital/

Wistar Awarded $4.6M NIH Grant For Studying Antibiotic Resistance

The Wistar Institute has been awarded a $4.6 million grant to support its current research of antibiotic-resistant pathogens. The four-year grant was awarded by the National Institutes of Health to a team of researchers led by David B. Weiner, Wistar executive vice president and director of its vaccine and immunotherapy center.

Wistar’s research involves the use of synthetic DNA technology to combat multidrug resistance by some bacterial strains. The grant will allow Wistar to continue its preclinical studies, with the goal of moving the experimental therapy into human studies.

https://wistar.org/news/press-releases/major-grant-awarded-wistar-supports-development-novel-therapeutic-approach

Hospitality News

Direct Spend From Overseas Tourism Hits Record $723M In 2018

In 2018, nearly 700,000 overseas visitors came to the Greater Philadelphia region and generated $723 million in direct visitor spending, marking the fourth consecutive year of growth in overseas visitation to the region, according to a newly published analysis from PHLCVB.

Nine of the 10 countries with the most visitors to Philadelphia saw a year-over-year increase in visitation, including the United Kingdom, China and Germany. China, second only to the U.K. in total visitors, led all markets in visitor spending with $136 million. In total, overseas visitors represent 57% of all international visitation and 79% of all international visitor spending. Over the next five years, overseas visitation to Philadelphia is expected to increase by 13%.

https://phl.travmedia.com/VPR/showPressRelease/100065394

Retail News

6,000-Plus Restaurants In Philadelphia; More Per Capita Than NYC

A new survey from the Philadelphia Department of Health has counted more than 6,000 restaurants in the city. At 3.8 restaurants for every 1,000 residents, Philadelphia surpasses New York City (2.8 per 1,000), Chicago (2.5) and Washington, D.C. (2.8).

The Health Department tallied Philadelphia’s dine-in options via restaurant inspections and online searches. Establishments that are characterized as “primarily on-premise consumption” and within the city limits are included. The majority of the restaurants are located in Center City and University City. Between Vine and Walnut streets around City Hall, the map reveals clusters of up to 164 restaurants in a single Center City “block group,” which is roughly 0.1 square miles.

According to a CCD analysis, employment in food services and drinking establishments is the second fastest category of job growth in Philadelphia, with this sector adding 14,451 jobs citywide between 2009 and 2018. Look for a full report from CCD on city job growth next month.

http://phl.maps.arcgis.com/apps/MapSeries/index.html?appid=ab8597d96ece43be97e718f919e79194

Trader Joe’s Opening Second Center City Location

Trader Joe’s will be opening a store at 1324 Arch Street, according to the company’s website. The grocery store chain plans to open the store in October, The Philadelphia Inquirer reported. The location is on the ground floor of a parking facility across from the Pennsylvania Convention Center.

Trader Joe’s already has a location at 2121 Market Street. Other grocery chains have recently opened or announced new stores in Center City, including German grocer Lidl and Pennsylvania-based Giant Food Stores’ main chain and its urban format stores called Giant Heirloom Market.

https://locations.traderjoes.com/pa/philadelphia/618/

Bagel Shop Teams With Brewery At New Center City Space

Spread Bagelry, the Montreal-style bagel shop with multiple locations in Philadelphia, has opened its latest location with a new concept at 2401 Walnut Street. Spread shares the street-level space, once a Jose Garces-owned pizzeria, with a tasting room by Workhorse Brewing Company.

The so-called Spreadquarters space will host will house a pop-up bar from Workhorse Brewing alongside its fast-casual restaurant, corporate offices and commissary in the 8,000-square-foot location. The brewing company will offer a variety of beers to pair with Spread’s bagels. Though conceived as a six-month pop-up, Workhorse officials said they are looking to stay with Spread in Center City.

https://www.inquirer.com/news/spread-bagelry-workhorse-brewing-2401-walnut-spreadquarters-beer-philadelphia-20190926.html

Residential Market News

New Plumbing Code Expected To Cut Construction Costs Up To 20%

Changes to the city’s plumbing and fire codes signed into law last week could reduce the costs of some residential projects by as much as 20%. The changes will make it easier to use plastic piping in mid- to high-rise residential buildings, easing construction costs that are among the highest in the nation. The updated code goes into effect tomorrow, October 1.

Previously, city code required costlier cast iron and copper piping in any building taller than three stories. Plastic piping will now be permitted in residential buildings up to 75 feet, or about five or six stories. In high-rise residential buildings up to 150 feet, plastic piping can be used for water supply. Metal pipes are still required for sanitation in residential buildings over 150 feet, and in all commercial buildings.

https://whyy.org/articles/flush-that-new-plumbing-code-expected-to-cut-construction-costs-by-20/

Transportation News

PHL’s Economic Impact Reaches $16.6B In 2019

A new economic assessment from the PennDOT Bureau of Aviation estimates that the 2019 economic impact of Philadelphia International Airport will total approximately $16.6 billion. PHL employs 207,812 people, resulting in a payroll of nearly $6.3 billion.

PHL is the state’s largest airport and thus provides the largest economic impact. Statewide, the economic impact of airports continues to grow across the board since the last time the study was conducted in 2011, the report noted.

https://www.penndot.gov/Doing-Business/Aviation/Planning%20and%20Zoning/Documents/2019%20PA%20Interim%20Annual%20Update%20Economic%20Impact%20of%20Aviation.pdf

City Government News

PICA: August Tax Collections Up 1.9% Compared to Last Year

The City collected approximately $215.0 million in General Fund tax revenue in August 2019, compared to $211.0 million in August 2018, an increase of 1.9%, according to preliminary figures from the Pennsylvania Intergovernmental Cooperation Authority (PICA). Several tax categories saw increases in collections compared to last August, such as the City sales, parking, and business income and receipts (BIRT) taxes. However, several tax categories experienced decreases in collections, such as the amusement, realty transfer, and real estate taxes, as well as a rare decrease in the City portion of the combined wage, earnings, and net profits taxes.

Through August, BIRT rose 146.4%, compared to a projected decrease of -1.2%; the real estate tax fell -1.0%, compared to a projected growth of 0.2%; the realty transfer tax decreased by -10.8%, compared to a projected 1.4% increase; and the City sales tax collections rose 16.7%, compared to a projected growth of 5.9%.

http://www.picapa.org/2019/09/just-released-monthly-tax-update-for-august-2019/

Domb Proposes $43M Tax Break For City’s Poorest Families

Councilmember Allan Domb wants to create a wage tax refund for about 60,000 low-income Philadelphia households. Domb has introduced legislation that proposes wage tax rebates from $360 to $1,700 to families living in poverty. A similar law passed in 15 years ago, but was repealed before it went into effect due to what lawmakers cited as significant budgetary constraints.

Philadelphia’s wage tax is the highest of its kind in the nation. Domb argues the city budget has boomed in recent years, and the city should not be tapping its poorest residents for tax dollars. Councilmembers Maria Quiñones-Sánchez and Jannie Blackwell support the legislation. Others in Council said they needed to take a closer look at the numbers.

https://billypenn.com/2019/09/26/a-43-million-tax-break-for-people-in-poverty-philly-is-thinking-about-it/

CCD/CPDC News

Available Now: CCD/CPDC’s New Report Developments 2019

Center City Philadelphia Developments: 2019 is an in-depth report on current and upcoming major projects in Center City. This report includes a map and full-color photos or renderings and project descriptions of all 62 major developments in Center City Philadelphia, categorized by type.

Building upon a decade-long, sustained national economic expansion, 23 development projects totaling $2.8 billion were completed in Center City between Fairmount and Washington avenues, river to river, in the period from January 1, 2018 to August 31, 2019. Eighteen projects totaling $3 billion in new investment were under construction as of September 1, 2019. Another 21 projects with a total estimated development value of $1 billion are in the planning or proposal phase.

New for 2019, our Developments report includes an interactive online component: a sortable map that features all of the information found within the publication and which will be continually updated as Center City development projects are announced, modified and completed.

https://www.centercityphila.org/research-reports/developmentsma