report

State of Center City 2019

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Introduction & Overview

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Philadelphia is enjoying the longest period of economic expansion since the end of the Second World War, adding jobs every year since 2009 – 71,100 in total. The 15,400 jobs that Philadelphia added in 2018 represents the city’s biggest one-year gain since the Bureau of Labor Statistics began tabulating statistics in 1969.

Center City is a prime driver of Philadelphia’s economy, holding 42% of city jobs. Positioned at the center of a multimodal regional system, consisting of  13 rail lines, three rapid transit lines, five trolley lines and 29 bus routes, transit brings nearly 300,000 passengers downtown every weekday. Public transit makes downtown density possible and enables more than 1 million residents of the city and  surrounding counties to live within one mile of a rail station, connecting them to Center City’s employers, restaurants, retailers, healthcare services, and arts and cultural institutions. Center City is also served well by a regional highway network, connecting seamlessly to the major routes on the Interstate system. Our international airport is just 15 minutes away.

Diversification is the defining strength of downtown’s economy. Professional, business and financial services, real estate and 
information – prime office-using industries – provide 40%, 121,300 of down town’s jobs. The completion of the 1.8 million-square-foot Comcast Technology Center and Aramark’s 600,000-square-foot expansion at 2400 Market Street pushed Center City’s office inventory up to an historic high of 43.5 million square feet.

Education and health services, the largest sector citywide, is the second largest sector downtown, accounting for 20% of downtown’s jobs – 61,000 in total. 

Greater Center City has capitalized on the growing national preference for diverse, walkable, live-work neighborhoods. It has become the fastest growing section of Philadelphia with an estimated 193,000 residents in 2018 – up 22% since 2000. Strong employment growth and positive demographic trends spurred the construction of 26,195 new housing units since 2000, including a record 2,810 in 2018.

Despite this rebound, Philadelphia has 21% fewer jobs than in 1970 and is still 22,900 short of its 1990 employment mark. Boston and New York City, like Philadelphia, both lost 85% to 90% of their 1970 manufacturing jobs. However, both have added many more post-industrial positions and are now 26% and 14%, respectively, above their 1970 job levels. Slow growth is what largely accounts for Philadelphia’s much higher poverty rate – at 25.7%, it is second only to Detroit among the top 25 largest cities in the United States.

To read the full chapter, click on the link below. 


Below are presentations from the April 23, 2019, CPDC Meeting.

SEPTA: Investing in Transit Infrastructure

SEPTA_Video_FINAL

Office

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The opening of the 1.8 million-square-foot Comcast Technology Center and Aramark’s 600,000-square-foot expansion at 2400 Market Street pushed Center City’s office inventory up to 43.5 million square feet. Their growth reinforces downtown’s role as the region’s largest employment center, well connected by transit and highways to every neighborhood in the city and to the entire region’s highly educated workforce. 

Since 1990, downtown’s inventory had consistently hovered around 40 million square feet, as nearly all new additions to the market were offset by conversions of older buildings to residential or hotel use. This diversified land-use and has contributed to a dramatically more vibrant, 24-hour downtown. At the same time, health care and educational institutions began to lease other vacant commercial office space. As a consequence, traditional private-sector office using industries, which account for 40% of downtown jobs and offer the  broadest range of opportunities, from high-skilled to moderate wage to entry level maintenance positions, have not experienced any growth. 

While companies everywhere are taking advantage of digital and technological innovations to house more employees more 
efficiently, Center City actually has 12.7% fewer office jobs than existed in 1990, while other downtowns have experienced modest growth in this sector. 

Center City offers very attractive rents, especially for those coming from elsewhere. Center City rates are about one-third those in San Francisco, 40% of Midtown Manhattan and about 
half the price of Boston or Washington D.C. Regionally, asking rents are on the higher end, but lower than in the KOIZs in University City and the Navy Yard, which benefit from key  tax exemptions.

Center City is at an important inflection point. A thriving, livework downtown, rich with amenities, is home to a highly skilled workforce, easily connected by transit to the entire region and just 15 minutes from an international airport. Despite these advantages, Philadelphia’s reliance on a manufacturing age tax structure that taxes heavily what most easily moves – salaries and business revenues – has constrained growth. Nationally the CBD rent premium over suburban rates is 27%, rising to 130% in Boston and 75% in Washington, D.C. Center City rents are just 16% higher than the surrounding suburban submarkets. A 21stcentury tax policy can facilitate 21st-century growth, expanding opportunity for all residents. 

To read the full chapter, click on the link below.  

Healthcare & Higher Education

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Higher education and health care remain the prime engines of Philadelphia’s economy, accounting for 33% of jobs citywide and 20% of Center City's employment – 61,000 jobs downtown. Since 2009, this sector has added jobs at all skill levels at the rate of 2% per year.
Thomas Jefferson University remains Center City’s largest employer with 14,040 employees downtown. Penn Medicine, Drexel University and Children’s Hospital of Philadelphia (CHOP), anchors of the University City economy, have been steadily migrating toward the Schuylkill River, increasing their presence downtown, leasing both office and medical space, and in the case of CHOP, adding a major new building in Center City adjacent to the South Street Bridge. Their combined number of jobs downtown has risen to 9,876. 

In fall 2017, Center City’s 14 colleges and universities reported total enrollment of 33,913 students. Adjacent to Center City, Drexel, Penn, Temple, and University of the Sciences enrolled an additional 78,341 students. Well-connected by public transit, thousands of these students live, shop and socialize downtown. Of the 29,059 students who graduated in 2017, 67% of their degrees were in health, business or STEM (science, technology, engineering, and math).

Philadelphia’s research institutions are driving innovation in diverse fields of health care. According to the National Science Foundation’s Higher Education Research and Development Survey, combined research spending at Drexel, Temple, Jefferson, and Penn totaled $1.9 billion in 2017, up from  $1.8 billion in 2016. Those four institutions, along with CHOP, launched a total of 29 startups in 2017 and applied for 391 patents. 

Philadelphia’s education and health care institutions have long been major generators of jobs and have produced graduates who serve as a powerful lure to employers seeking talent. As Philadelphia’s research institutions strengthen connections with venture capital, commercialize new products and connect with more local suppliers, Philadelphia has a significant opportunity to boost business formation and job growth across the region.

To read the full chapter, click on the link below.  

Conventions, Tourism & Hotels

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Major public and private investments in hospitality made during the last three decades, including the Pennsylvania Convention Center, new hotels, visitor and cultural destinations throughout the down town, have positioned Philadelphia as a highly competitive meeting and tourist destination.  Promoted by sustained advertising and marketing campaigns, the growth in convention, leisure, group and business travel has enabled Philadelphia to add 17,400 hospitality jobs since 2009, an increase of 31%.

The Pennsylvania Convention Center, marketed by the Philadelphia Convention and Visitors Bureau, hosted 22 conventions and trade shows in 2018 and 22 gate shows of 2,000 or more, elevating attendance to 1.2 million. Twenty-two conventions and trade shows of 4,000 or more are slated for 2019, with anticipated attendance of 1.1 million. 

Leisure travel, driven by Visit Philadelphia’s marketing in North America and the Philadelphia Convention and Visitors Bureau’s focus on overseas group travel, accounted for 1.2 million room nights in 2018, up 71% from 2009 levels. Leisure travel now accounts for 34% of the downtown’s occupied hotel room nights, surpassing the commercial share at 29% and on par with the demand generated by group and convention business (33%).

In 2017, 1.2 million international visitors came to the Philadelphia region, generating an economic impact of $1.4 billion. More than a half-million Canadians visit the region annually, while the number-one feeder market for overseas travelers remains the United Kingdom, followed by China. Philadelphia experienced an 18% increase in travelers from South Korea and a 3% increase from both Australia and the Netherlands in 2017. The primary reasons for overseas travel to Philadelphia are leisure, at 72%, with business travel at just 12%.

Leisure, group and business travel combined pushed Center City’s 2018 hotel occupancy rate to a modern-day record high of 79.6% with 3.5 million occupied hotel room nights, even with an 18% increase in supply. 

To read the full chapter, click on the link below.  

Arts, Culture & Entertainment

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Center City attracted more than 18 million visitors from across the region and around the world to an extraordinary variety of arts and cultural destinations in 2018. Center City features 354 museums, theaters, dance companies and other cultural organizations and is third behind New York City and Washington, D.C. in the number of arts and cultural institutions downtown, surpassing Boston, Chicago, San Francisco and Seattle. The vitality of Center City’s organizations helped drive a 19% increase in employment citywide in arts, entertainment and recreation in the last decade, with 12,927 jobs in 2017.

Several of Center City's cultural and performing arts destinations experienced notable growth in attendance in 2018: 1.2 million patrons enjoyed a wide array of performances at the Kimmel Center for the Performing Arts and the Pennsylvania Ballet experienced a 20% increase from 2017. The Wilma Theater, FringeArts, Barnes Foundation, Eastern State Penitentiary and the Mutter Museum all saw increases in attendance. In its first full year, the Museum of the American Revolution attracted more than 312,000 visitors. Indicative of the growing appeal of Center City as a family-friendly destination, about 66% of guests, cumulatively, at downtown institutions enjoyed free admission, with children under 18 comprising 38% of the visitors. 

Center City is an outdoor gallery of public art with more than 460 works displayed downtown. Mural Arts Philadelphia, the nation’s largest mural art program, estimates that their outdoor gallery alone drew 16,000 participants to its tours and events in 2018.

The Center City District unveiled the first phase of Pulse, a unique and interactive public art experience by artist Janet Echelman that delights Dilworth Park visitors during the spring and summer months. The installation of Winter Fountains by artist Jennifer Steinkamp, at Aviator Park, Rodin Museum, Park Town Place and Spring Garden Triangle, served as a centerpiece of Parkway 100, the centennial celebration of the Benjamin Franklin Parkway.

Improvements to outdoor parks in Center City continue to diversify civic and cultural spaces. Center City District has steadily increased the free programming at Dilworth Park, drawing 10.8 million visitors in 2018. In May, the City opened the renovated and reimagined Love Park; the design includes a new restaurant in the former visitors’ center, more green areas, including a lawn and multiple gardens, increased seating, pathways and public restrooms. Across the street, the HorwitzWasserman Holocaust Memorial Plaza completed a $7 million renovation project managed by the CCD. It opened to the public in October; the new civic space includes a Remembrance Wall, Eternal Flame and several interpretive features that create unique opportunities to learn about the history of the Holocaust. The much-anticipated Rail Park in the Callowhill neighborhood opened to the public in June. The CCD completed the transformation of a dilapidated quarter-mile portion of the former Reading Railroad Viaduct into a vibrant green space, serving as a stimulus for a mixed-use, mixed-income, live
work neighborhood unlike any other in Philadelphia.

To read the full chapter, click on the link below.  

Retail

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Center City’s flourishing retail scene builds on more than two decades of mixed-use development, with residential, convention and tourism growth broadening the historic base of retail customers provided by office tenants and educational and health care institutions downtown. Today, 305,000 workers, 193,000 residents, 112,000 college students and 3.5 million occupied hotel room nights combine to create more than $1 billion in retail demand annually.

Downtown Philadelphia’s increased purchasing power has attracted more than 77 national retailers in the last five years. These stores add to the mix of local boutiques and independents, while creating both entry-level and higher-skilled jobs. They also solidify Center City’s status as a regional shopping destination.

While Center City is feeling the pressures that are affecting retailers nationwide, occupancy on the prime retail corridors of Walnut and Chestnut streets from Broad to 20th streets is a healthy 94.6%, sustained by downtown’s desirable demographic of millennials and affluent empty nesters and augmented by visitors and students.

Demand is driving more than 1.4 million square feet of retail currently under construction with development surging east of Broad Street, with some of Philadelphia’s most ambitious retail and mixed-use projects.

New developments on Market East represent a $910 million investment that is creating a continuous shopping and dining experience from Independence Mall to the major Center City convention hotels, just east of City Hall.

Surging pedestrian volumes on major downtown streets are key indicators of change. While most of Center City’s pedestrian traffic peaks during the week around lunchtime and late afternoon, the area between Rittenhouse Square and Broad Street remains animated through the weekend and during evening hours, underscoring its status as a destination for retail and entertainment. New retailers have transformed the area around 16th and Chestnut streets from a less desirable location into one where pedestrian counts have increased by 45% over 2013 volumes. West Chestnut Street’s transformation, as well as the increased growth underway on East Market Street, are powerful indicators that destination retailers can locate anywhere in Center City’s walkable downtown and shoppers will follow. 

To read the full chapter, click on the link below.  

Employment

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Philadelphia has added jobs every year since 2009 – 71,100 in total. The 15,400 positions added in 2018 represent the biggest one-year gain since the Bureau of Labor Statistics began tracking these trends in 1969. The previous high, in 2016, brought 13,600 more jobs. 

Center City is a prime driver of Philadelphia’s economy, holding 42% of city jobs. Diversification is downtown’s defining strength. Professional, business and financial services, real estate and information – prime office-using industries – provide 121,300, (40%) of downtown jobs. Education and health services, the largest sector citywide, is second largest downtown, accounting for 20% of jobs. Entertainment, leisure, hospitality, restaurants and retail hold a 16% share, while federal, state and local government employment provides 12%. Together, these total 305,500 wage and salaried positions with approximately 9,500 more individuals compensated as partners, self-employed, or working freelance. Located at the center of the region’s transit and highway network, 47.5% of downtown’s jobs are held by commuters from outside the city; 52.5% by Philadelphians. The city residents' share has steadily expanded as downtown’s population has grown. Just to the west, equally accessible by transit, University City holds another 11% of city jobs, with 80% in education and health services. 

In Greater Center City, 40% of residents work downtown; another 11% commute to University City; 62% get to work without a car; 38% in the core walk to work. In neighborhoods outside Center City, 25% of workers travel to jobs downtown; another 5% work in University City. In every neighborhood outside Center City, more people work downtown than in the area in which they live. While 37% of Center City jobs require at least a bachelor’s degree, the broad range of other opportunities provided by downtown employers combined with strong transit connectivity, makes 30% of jobs available to those with associate degrees, while another 33% require no more than a high school diploma. 

At the same time, sustained job loss beyond Center City,  University City and the Navy Yard means that every day,  another 40% of working residents of neighborhoods outside the downtown (221,000 Philadelphians) reverse commute to jobs in the suburbs. Philadelphia’s wage tax is structured so that regardless of where a city resident works, their employer is obligated to withhold the full tax. Thus, the commute to the suburbs carries with it an incentive to move to the suburbs and population has continued to decline in many of the city’s outer neighborhoods. 

To read the full chapter, click on the link below.  

Transportation & Access

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Greater Center City is positioned at the center of a multimodal regional transit system consisting of 13 rail lines, three rapid transit lines, five trolley lines and 29 bus routes that carry 300,000 riders every weekday into Greater Center City. Public transit enables more than 1 million residents of suburban Philadelphia counties to live within one mile of a rail station, connecting them to Center City’s employers, restaurants, retailers, health care services, and arts and cultural institutions. Center City is also wellserved by a regional highway network that connects easily to the major routes on the Interstate system.

Half of city residents can commute by transit to Center City in 30 minutes or less; 61% of those who live in Greater Center City can get to City Hall – the geographic center of downtown – in fifteen minutes or less. Since 2001, the number of passengers boarding from stations in the core of Center City is up 25% on SEPTA’s Broad Street Line and 13% on the Market-Frankford Line. 

The Market-Frankford and Broad Street lines currently carry 46% of all inbound Center City transit commuters each day. Both lines have their busiest stations under Dilworth Park, serving a combined 60,000 passengers each weekday. SEPTA’s bus network carries another 27% of inbound transit users each day. Regional rail lines originating from suburban Pennsylvania, New Jersey, and Delaware transport an additional 37,000 (12%) downtown commuters.

Trolley lines serving Delaware County and West and Southwest Philadelphia bring another 7% of commuters each weekday. New Jersey residents riding the high speed PATCO line or NJ Transit buses onto Market Street constitute 7% of Center City’s weekday commuters. 

With 41% getting to work without a car, Philadelphia ranks seventh in non-automotive commuting within large cities, just below Seattle and Chicago, 20% lower than San Francisco, and well behind the country’s leader, New York City. Philadelphia’s auto-commuting is elevated by the 40% of working residents employed in jobs outside the city. While 51% of Philadelphians who work in the city commute by car, 83% of those who reverse commute need to rely on a car. Growing jobs in Center City and University City would not only reduce commute times for many city residents, it would also significantly improve air quality.

Greater Center City now has an estimated population of 193,000, living at densities of 51 persons per acre in the 7.7 square miles between Girard Avenue and Tasker Street, compared to regional densities of just 15 persons per acre. Center City has the highest concentration of residents who get to work without a car, especially in neighborhoods closest to the West Market office district, where 75% don’t rely on a car for their commute. Nearly one-quarter of Greater Center City residents walk to work; 6% bike to work, triple the citywide average. Another 6% are working from home. 

To read the full chapter, click on the link below.  

Downtown Living

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Greater Center City has capitalized on the growing national preference for diverse, walkable, live-work neighborhoods to become the fastest growing residential section of Philadelphia with an estimated 193,000 residents in 2018 – up 22% since 2000. In the core of Center City, population growth has been even more pronounced, increasing by 34% in the last 18 years, as many older office buildings and warehouses have been converted to residential use, and new apartment and condo towers have risen on former parking lots. 

Population growth has been driven by younger adults, with 20 to 34 year olds comprising 45% in Center City’s core and 37% in the extended neighborhoods, supporting demand for thousands of new apartments. But, residents over 60 make up another 21% of the core population, sustaining demand for the higher-end of the market in townhouses, condos and apartment buildings. Living downtown offers Philadelphians of all ages easy access to work, hundreds of restaurants, outdoor cafés, cultural institutions, sports clubs, spas and health care.

The concentration of educated workers in Center City also makes it an attractive location for businesses. In Greater Center City, 61% of residents have a bachelor’s degree or higher. 
Combined with the 14 colleges and universities in and around Greater Center City, this critical mass of talent is exercising a powerful draw on employers and retailers.

The broad range of housing types downtown allows residents to remain within the 8.5 square miles of Greater Center City as their needs and family size change over time. Right now, Center City is benefiting from the large millennial surge nationally that will soon begin to taper down. To sustain recent population growth, Philadelphia needs to retain younger households over the coming decade with more dynamic job growth and more reliable funding for high quality elementary, secondary and high school options.

To read the full chapter, click on the link below.  

Developments

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Across Center City, 61 major projects, representing 21.5 million square feet in new development, were completed or underway between Fairmount and Washington avenues at the end of 2018, approximately $7.1 billion in new investment downtown. More than half are mixed-use projects with a residential component; six are solely residential. Remaining projects include nine commercial/mixed-use developments, seven hospitality investments and six public space improvements with several other retail, education, and cultural developments.

Two high-profile commercial developments completed construction in 2018: the 1.8 million-square-foot Comcast Technology Center and Aramark’s expansion into 2400 Market Street for their new headquarters.

Comcast’s 60-story tower, topped by a Four Season hotel on the upper floors, is now the tallest building in Philadelphia and marks the first major addition to the Center City skyline in over a decade. The next big addition is coming in 2019, in the form of the 51-story hotel opening in 2019 as a co-branded Element and Westin, which can have a significant impact revitalizing two blocks of West Chestnut Street, as well stimulating improvements to South 15th Street. 

To read the full chapter, click on the link below.  

Center City District

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Center City District (CCD) started in 1991 with a mission to make downtown Philadelphia clean, safe and attractive. In the last 28 years, CCD has broadened its services to include physical, streetscape enhancements, park renovation and management  and programming year-round to enhance the vitality of Center City. 

 CCD deploys 147 uniformed sidewalk cleaners and supervisors in two overlapping shifts seven days a week, sweeping litter manually and mechanically, no less than three times per day from each sidewalk in the district.

CCD also deploys 46 uniformed Community Service Representatives (CSRs) who work in partnership with the Philadelphia Police Department, serve as eyes on the street, offer information and directions to visitors, workers and residents, and provide outreach services to those experiencing homelessness.

CCD continues to maintain and update the $148.5 million in capital improvements we have made in the district during the last two decades. This includes cleaning and updating 442 pedestrian directional signs, 240 transit portal signs, 85 bus shelter maps and 54 interpretative signs along the Benjamin Franklin Parkway. CCD maintains 243 of the 2,879 pedestrian light poles we installed in the district (the Philadelphia Streets Department services the remainder). Twenty-three sculptures, 12 Parkway building façades, and 12 Avenue of the Arts building façades are all lit through CCD capital investment. 

CCD has planted 876 trees, including 165 in the four parks we manage. In 2018 alone, CCD planted 285 vines, shrubs and perennials, along with 4,250 bulbs. To further enhance the downtown streetscape, the Center City District Foundation (CCDF) has launched a new fundraising initiative, Plant Center City, to add 200 more trees in the central business district during the next two years.

To read the full chapter, click on the link below.  

Errata

Correction to data in graph on p. 65:
WHY RESPONDENTS FEEL UNSAFE IN CCD
PANHANDLING - 59%
SLEEPING ON SIDEWALKS - 46%
ABSENCE OF UNIFORMED PERSONNEL- 31%
THESE THINGS ARE PART OF URBAN LIFE AND DO NOT BOTHER ME - 25%
APPARENT ILLEGAL ACTIVITY - 21%
OTHER - 14%