FOR IMMEDIATE RELEASE
State of Center City 2023: Does Philadelphia Have What It Needs to Recover?
Center City District/Central Philadelphia Development Corporation report highlights Philadelphia’s signs of recovery and examines the serious challenges that must be addressed
PHILADELPHIA (April 19, 2023) – At today’s meeting of the Central Philadelphia Development Corporation (CPDC), Center City District (CCD) released State of Center City Philadelphia 2023, an annual report organized by sector that examines the latest trends in both in Center City and in the broader Philadelphia economy.
“Center City is rebounding well from the turbulence of the last three years, but full recovery is constrained by challenges that were left unresolved at the start of 2020,” CCD President Paul R. Levy said. “Philadelphia is a city with extraordinary assets, amenities and advantages, but only committed, proactive private and public leadership will enable the city to realize its full potential.”
Distilling the most recent data available from city, state, and national agencies; local organizations and businesses; and CCD’s own in-depth research and analysis, this comprehensive 72-page report makes policy recommendations for the next mayoral administration on how Philadelphia can fully recover from the last three years of disruption and catch up with peer cities in the long-term to grow jobs and create opportunity for all.
Among the key findings in State of Center City Philadelphia 2023:
The Recovery So Far:
- Average pedestrian volumes downtown in March 2023 returned to 77% of March 2019 levels.
- There were 35% more residents living in the core of downtown in March 2023 than in March 2020.
- Ground floor retail occupancy continues to rebound, increasing to 83% in 2023, slightly below the 2019 levels.
- The Pennsylvania Convention Center welcomed 552,000 visitors in 2022 and has projected a total attendance of more than 1 million in 2023.
- After a 15% decline in private sector employment from 2019 to 2020, Philadelphia by February 2023 had regained all of the jobs it held in February 2020.
- Research institutions in Philadelphia received $1.22 billion in National Institutes of Health funding in 2022, fourth in the nation.
The Ongoing Challenges:
- Philadelphia’s rate of job growth from 2009 to 2022, while positive, places it 25th out of 30 among major U.S. cities.
- Work-from-home policies have negatively impacted downtown vitality and the many in-person jobs that rely on office workers. Peer cities like New York, hard hit initially, have rebounded more quickly as public officials have prioritized cleanliness and safety, while emphasizing the importance of the office sector to the overall economy.
- Only three of the top 15 employers in Philadelphia are for-profit businesses.
- Vacancy rates in the downtown office district have increased to 18.6%.
- High wage and business taxes, levied on both gross receipts and net income—like no other major U.S. city or surrounding county—create disincentives to locate here. This is exacerbated now by options for remote and hybrid work.
The To-Do List For Recovery:
- Increasing job growth and business density citywide reduces unemployment and poverty. In Center City, maximizing the return of office workers restores employment in transportation, building services, retail and restaurants, jobs that can’t be performed remotely.
- Conversions of obsolete inventory, supported by more competitive tax policies, can reduce vacancy, while affordable rental prices and competitive wages can enhance demand for office space.
- Reducing over-dependence on wage and business taxes, which create disincentives for firms and workers to locate or expand in the city, will attract and retain businesses and grow jobs at all skill levels.
- Renewing citywide focus on back-to-basics — clean, safe and vibrant public spaces, and enhanced emphasis on public safety — will restore confidence and the return of remote workers back to downtown office buildings.
- Well-trained, community-based policing, hand-in-hand with education, job training and social services, will address neighborhood challenges and prepare all of our residents for the jobs of the 21st century.
This year’s State of Center City includes detailed economic and vitality indicators we have tracked in quarterly and monthly reports for the last three years. Those indicators document the state of recovery of major employment sectors and transportation systems, highlighting the remarkable resilience of housing markets and the continuing confidence of investors and developers in Philadelphia’s downtown. The final chapter of the report highlights the role of CCD’s expanded cleaning, safety and homeless outreach services, in addition to streetscape enhancements and programs animating parks and public spaces, and promotions supporting downtown restaurants and retailers, as well as tracking and encouraging the full return to office.
“Our strength in education, health care and emerging life science is very encouraging, but not yet a significant contributor to a tax base robust enough to support our public schools. The next mayor has a significant opportunity to build on recent momentum around tax reform to shape new policies that foster growth of the full range of jobs and industries across the city,” Levy stated. “New leadership can rejuvenate public safety strategies that residents and businesses across the city are demanding.”
State of Center City 2023 is available at centercityphila.org/socc.
In The News
- April 18, 2023 | Guest Commentary: How Can Center City Achieve Total Recovery, Philadelphia Business Journal
- April 18, 2023 | Center City Report: Philly’s Dual Business Taxes Are Making Its Downtown Office Drain Worse, Bisnow
- April 19, 2023 | Center City's jobs, retail and tourism are recovering - but not everything is at pre-pandemic levels yet, The Philadelphia Inquirer
- April 19, 2023 | Center City job growth ‘more urgent than it ever was before,' Paul Levy says, Philadelphia Business Journal
- April 19, 2023 | Philadelphia office market is just now starting to reset, experts say, Philadelphia Business Journal
- April 19, 2023 | State of Center City report, CBS News Philadelphia
- April 24, 2023 | Center City District annual report highlights Philadelphia's economic recovery, The Philadelphia Tribune
Center City District, a private-sector organization dedicated to making Center City Philadelphia clean, safe and attractive, is committed to maintaining Center City’s competitive edge as a regional employment center, a quality place to live, and a premier regional destination for dining, shopping and cultural attractions. Find us at www.centercityphila.org and on Facebook and Twitter.