CPDC Developments Newsletter - 10.16.18


BNY Mellon Bank Center Hits The Market 

BNY Mellon Bank Center, one of the defining office towers in the Center City skyline, has come up for sale. Equity Commonwealth has put on the market the 54-story, 1.3-million-square-foot building at 1735 Market St., which represents the last remaining property the Chicago real estate company owns in Center City.  The tower is 91% occupied.

Equity Commonwealth has systematically been selling its portfolio nationwide and has sold $6.1 billion in real estate assets since 2014. Earlier this year it sold 1600 Market St. for $160 million, or $194 a square foot.


$50M gift is Wharton's largest ever

The University of Pennsylvania's Wharton School of Business has secured the largest gift in its 137-year history, a $50 million donation from Marc Rowan and his wife Carolyn Rowan. Marc Rowan, co-founder of private equity firm Apollo Global Management, graduated from Wharton with a bachelor's degree in 1984 and MBA in 1985.

The gift will specifically go toward helping Penn attract the world's top business school professors through the establishment of three Rowan Distinguished Professorships and several Rowan Fellows who will support Wharton faculty during five-year terms.

Spark Therapeutics Planning To Add 500 Jobs In 5 Years

Spark Therapeutics is expanding its research-and-development operations in a move expected to create nearly 500 high-paying jobs in five years. The gene therapy company spun out of Children's Hospital of Philadelphia is getting a $2 million Department of Community and Economic Development grant and a $7.5 million grant from the Redevelopment Assistance Capital Program to support the project.

Spark will be relocating to a larger space on Market Street in Drexel University’s $3 billion Schuylkill Yards development project. Its existing offices are at 3737 Market St.

Penn Medicine To Deploy Precision Medicine To Study Parkinson's

Penn Medicine has launched the Molecular Integration in Neurological Diagnosis Initiative to bring use of “precision medicine” to Parkinson's disease research. Precision medicine refers to the use of genetic or molecular profiling to find out how a patient’s genetic make-up can be analyzed to improve a clinician’s ability to diagnose Parkinson’s and select the correct type of treatment.

Penn's goal with the initiative is to enroll all patients in its Parkinson’s Disease Center in order to identify biomarkers and better categorize the disease. If the program reaches its goal of enrolling 2,500 patients by 2020, Penn said, it will be the largest Parkinson’s disease research cohort in the world with direct patient contact.


Plumbing Code Changes Aim To Reduce City Construction Costs

Of the 50 largest U.S. cities, only seven including Philadelphia still require the use of expensive, heavy metal pipes in high-rise residential construction at a time when less expensive and more eco-friendly plastic infrastructure is now the norm for builders.

After months of negotiations between residential builders and the plumbers union, an agreement has been reached to update the city’s plumbing code to allow for more extensive use of plastic pipes. The two groups negotiated with facilitation from the Department of Licenses and Inspections, and have drafted a memorandum of understanding that will be incorporated into the city’s new building code next year.

Plan for Italian Market Apartment Building Grows To 8 Stories, 182 Units

Midwood Investment & Development is scaling up its proposal for an apartment building in the Italian Market. The New York developer’s latest plan for the site on the southeast corner of 9th Street and Washington Avenue calls for an eight-story building with 182 apartments, up from the five-story, 70-unit building proposed in 2015.

The building would occupy the current location of the Anastasi Seafood fish market and restaurant, which is moving elsewhere within the market, and surrounding vacant land. New York-based architecture studio Morris Adjmi has revised its building plans, which called for a facade of undulating brick, with a design that emulates the area’s multistory industrial buildings.

Construction Begins For 8 Townhouses Near Rittenhouse Square

Work has begun on a row of eight townhouses at the former site of a parking garage on Lombard Street between 20th and 21st streets. U.S. Construction Inc. aims to have the houses that make up what it calls the Moderna at Rittenhouse ready for occupancy by August 2019.

The four-story, 5,000-square-foot houses, which will be listed at a starting price of $2.8 million, will have five bedrooms, an office, two-car garages and other amenities.

Delta Q3 Report: Philadelphia Rental Market Remains Strong

The demand for quality rental apartments in Philadelphia remains strong thanks to lifestyle, economic, and demographic trends that favor apartment living, according to Delta Associates’ newly released Q3 report on the Philadelphia market. The report notes that absorption remained above 1,500 units for the fourth consecutive quarter – 1,611 units in the 12-month period ending September 2018 compared to 1,618 units in the prior year, while rents over the year increased by 2.3%.

New construction activity has experienced a slight decrease since this time last year – four construction starts occurred in the third quarter of 2018. The development pipeline also decreased, though it remains elevated. As of September, 4,131 units are in the 36-month development pipeline after attrition, a decrease of 4% from a year ago. The report predicts that in the near-term, this supply/demand relationship indicates that stabilized vacancy will be slightly higher in three years than today and rent growth will fluctuate over this period, at times exceeding the long-term average.

Report: Land prices fall amid softening housing market

Prices paid for vacant land in Philadelphia have fallen to their lowest levels in three years after peaking in 2017. Buyers of bare development sites paid an average of $31.72 per square foot during the first six months of 2018, down more than 46% from last year's average of $59.23, according to public data compiled for The Philadelphia Inquirer and Daily News by Kevin Gillen, senior research fellow at Drexel University's Lindy Institute for Urban Innovation.

The January-to-June prices were the lowest since 2015, when land averaged $26.94 per square foot for the year. The decline comes as apartment landlords face a surge in supply, while homebuyers face increasing interest rates and other challenges, Gillen said.


Shakespeare & Co. Opens Its First Non-NYC Location At 1632 Walnut

Shakespeare & Co., an independent bookseller for over four decades in New York City, has opened its first store outside its home city at 1632 Walnut St. The shop offers 15,000 titles in stock and features a print-on-demand machine that can print millions more.

About 2,800 square feet of retail space is split across the ground floor and a mezzanine of the building, which was a former branch of the Fidelity Trust Company bank. The store is planning to host events including local author talks, book club sessions, poetry readings and writing workshops.

Giant To Open New Grocery Concept In Center City

Ahold USA announced plans for a new grocery concept in the Graduate Hospital neighborhood. The first of what is dubbed the Giant Heirloom Market brand will open later this year at 2303 Bainbridge St. – with possible future locations at Abbott’s Square in Society Hill, Schmidt’s Commons in Northern Liberties and 3401 Chestnut St. near Drexel University.

The Bainbridge store will total 9,500 square feet and will employ 60 people. Giant Heirloom Market enters Philadelphia at a time of major growth in the grocery market. Sprouts Farmers Market, which opened last month on South Broad Street, became the 56th new supermarket to open in Philadelphia since 2015.

Fitness Studio Backed By A-Rod Coming To Former Beer Distributor Site

A fitness chain backed by former New York Yankee Alex Rodriguez is set to open its first Philadelphia location as part of an apartment building project planned at the site of a shuttered Northern Liberties beer distributor. Las Vegas-based TruFusion will occupy the ground floor of a six-story apartment building that Spain Property Group is preparing to construct at Germantown Avenue and North American Street.

The $17 million project with 93 apartments will replace an industrial building that had long housed the Global Beer Distribution retail store. Work is expected to start at the site in the next few months.


Nasdaq CEO: “We Want to Grow In Philadelphia”

Nasdaq Inc. is hiring in Philadelphia and will continue to expand its options-trading and technology-services groups based here, CEO Adena Testa Friedman said. Nasdaq has added 80 jobs since moving to three floors of the FMC Tower at 2929 Walnut St. last spring from the Philadelphia Stock Exchange building at 1900 Market St. The new site now employs 230, plus scores of options traders at independent and national firms.

At a recent meeting Friedman said Nasdaq is making a concerted effort to grow in cities with a lot of colleges and she noted that Philadelphia’s proximity to Nasdaq's New York base is an advantage. "We want to grow in Philadelphia, and on the Acela, it's super-easy to get there," she stated.


Philadelphia Among Country’s Top 10 Rising Cities for Startups

Philadelphia has been named one of the country’s top 10 rising cities for startups, according to an analysis by AOL co-founder Steve Case’s venture capital firm Revolution, together with Forbes magazine. Philadelphia made the list due to its “convenient access to the East Coast hubs of Boston, New York and Washington, plus more affordable business costs,” in addition to its large number of universities.

The ranking purposefully leaves out the areas where the most venture capital flows – including Silicon Valley, New York and Boston – and picks a lineup of rising cities based on 13 quantitative markers like education levels, entrepreneurship rates, size of venture deals and working age population growth.


Philadelphia Inquirer story examines truck congestion in Center City

A recent story in The Philadelphia Inquirer examined the role delivery trucks are playing in Center City’s worsening congestion in the estimated 18,000 deliveries that happen each day just in the downtown’s four core ZIP codes.

The city’s Streets Department this year expects to finish the first comprehensive map of parking in the two most dense areas — Center City and University City. Meanwhile, the city is exploring funding recommended in a recent Delaware Valley Regional Planning Commission report and has a $100,000 grant to study truck parking issues in Center City.

Meanwhile, the Philadelphia Parking Authority is seeking to make illegal parking more costly to delivery companies. The Inquirer report, however, noted that local and national experts say “in the long term, the solutions lie with close planning and coordination with the businesses and people receiving deliveries.”

State Gives $3M For East Market Street Improvements

Philadelphia is the recipient of a $3 million state grant to construct multimodal safety improvements to Market Street east of 6th Street, changing from four travel lanes to three, adding a protected bike lane in each direction, constructing floating bus islands and pedestrian islands, and improving two intersections.

The grant will advance Old City District’s goal of a more walkable and bikeable neighborhood by removing one of Market Street’s two westbound travel lanes between 6th and 2nd streets to make way for a pair of parking-protected bike lanes. The project is one of six Philadelphia projects awarded Multimodal Transportation Fund (MTF) grants by Pennsylvania Department of Transportation.

City Releases New 7-Year Transportation Plan

The City of Philadelphia has released a seven-year transportation plan dubbed CONNECT, which details proposals for addressing current challenges that include worsening congestion, falling bus ridership, and declining bicycle commuting.

The proposal advocates for increasing local contributions to SEPTA’s budget; providing free transit passes for college students; ending SEPTA transfer fees; introducing dynamic pricing to on-street parking; and deploying “speed cushions” and other traffic-slowing interventions to create “Neighborhood Slow Zones.”

PATCO Releases Timetable For Franklin Square Station Overhaul

PATCO’s Franklin Square Station, which has been closed since 1979, is getting an overhaul and an opening date. PATCO is in the design stage now, and officials anticipate that construction will start on the project in April 2020.

The subway station at 7th and Race streets is slated for a $26 million renovation project, which will wrap up in December 2022. PATCO’s recently released renderings for the new station will include a green roof and open design.


Franklin Square Fountain To Get $2M Renovation

The 180-year-old fountain at Franklin Square in Chinatown will undergo a $2 million renovation. Historic Philadelphia Inc., the nonprofit managing the 7.5-acre park, said the renovation project includes new waterworks, LED lighting and several different types of water effects.

The upgrades will allow for a new lighted “fountain show,” which will debut next summer. Built in 1838, the fountain is the oldest restored and in-use fountain in the country, according to Historic Philadelphia.


City Council OKs $71M Housing Bill, Sends To Mayor For Approval

A new package of housing bills passed by City Council, and expected to be signed by Mayor Kenney, include a proposed inclusionary zoning bonus that would give developers a chance to construct larger buildings in exchange for payments to the Housing Trust Fund, which officials project will total $18 million over the next five years.

The legislation also includes a transfer ordinance that would send $19 million of a promised $53 million from the city’s general fund for use on affordable housing; a bill committing to the larger projection of $71 million over the next five years from the general fund and zoning bonuses; and a bill that would ensure money secured from those two sources can be spent on housing for the working- and middle-class, as well as for the city’s poorest residents.

City Releases 10-Year Plan To Build, Preserve 100K Housing Units

City officials have released a proposal to create or preserve 100,000 housing units over a decade. The new Housing Action Plan includes a rubric of differing policies for strong market areas, middle neighborhoods, and disinvested communities, and assumes that there will be little to no funding assistance from the city or the state to implement the plan.

In neighborhoods where incomes are low and investment scarce, it proposes additional dollars for housing repair, a beefed-up eviction prevention plan, and small rent subsidies. The report also suggests implementing accessory dwelling units, a zoning change that would allow homeowners to provide additional housing on their properties.


CCD Annual Customer Satisfaction Survey: We Want Your Input

Each year, the Center City District surveys our constituents about our performance. What can we do better or differently? What are your perceptions of Center City’s cleanliness and safety? What changes would most help make Center City a better place to work or live?

Take a five-minute online survey and you can enter for a chance to win $250 in restaurant gift certificates. The survey closes November 30.