State of Center City 2013 Press Briefing - Part One

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Part one of Center City District President and CEO Paul Levy's press briefing for the State of Center City, 2013 report. It's Center City Philadelphia’s “annual report” that looks at all aspects of the downtown economy and makes recommendations to enhance its attractiveness and competitiveness. Download or order a copy at http://centercityphila.org/socc/

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State of Center City 2013 Press Briefing - Part One

  1. 1. State of Center City 2013
  2. 2. Headline: There are huge competitive advantagesof Center City’s density, diversity & walkability
  3. 3. Highest job densities in the region167 jobs/acre; less than 1 job/acre suburbs
  4. 4. 279,412 jobs: largest center of employment &opportunity in the region
  5. 5. Density maximizes choice for residents ofsurrounding neighborhoods
  6. 6. Facilitated by a regional transit system brings305,238 riders/day into downtown
  7. 7. Distributing them to multiple locationsacross Center City
  8. 8. Center City has concentration of high-skilled jobs,But 22% of jobs are held by those with no more than a HS diploma
  9. 9. Density reduces transportation costs for businessesFacilitates chance encounters on street
  10. 10. Greater Center City: Girard Avenue to Tasker Street233,900 core45,500extended
  11. 11. 2.4 x residential density of rest of city63 persons/acre around Rittenhouse Square>2/ acresuburbs
  12. 12. Extraordinary concentration of arts & cultureorganizations second only to midtown Manhattan
  13. 13. Most diversified employment node in the region
  14. 14. 32% office; 21% eds/meds; 21% public sector;14% hospitality & entertainment
  15. 15. Diversification: greatest buffer against recession& provides greatest opportunity for growth
  16. 16. 34% of all small, emerging businesses inPhiladelphia are located downtown
  17. 17. Diverse sectors reinforce each other & perform differently
  18. 18. Success is affected by the investments we make:Decision to put the Center at the center & not at the margins
  19. 19. By the quality of services we provide
  20. 20. By what we choose to tax to support those services
  21. 21. By educational levels of workforce14.6%9.7%5.2%2.3%
  22. 22. By macro factors like the national economy & cost of energyWe inherit a human-scale, walkable city…..
  23. 23. This made us obsolete: 1950s-1970s
  24. 24. 1964 VW, purchased 1970 – Full tank $3.10
  25. 25. In a context of rising energy costs…
  26. 26. Re-infused with value in the post-petroleum age:Dense, diverse & walkable = sustainable
  27. 27. Success is contingent on how we capitalize on advantages;make strategic investments & remove barriers to growth
  28. 28. Largest employment sector: 32% of downtown jobs
  29. 29. .41.5 million square feet of office space
  30. 30. Well-linked to the region by highway & rail
  31. 31. Well served by AMTRAKSEPTA & PATCO ridership up by 3%
  32. 32. 15 minutes from Philadelphia International Airport
  33. 33. 88.6% occupancy rate: above national averagefor both CBD’s & suburbs
  34. 34. Recovering well from the recession:Vacancy rates
  35. 35. Significant number of lease transactionsprimarily west of Broad as tenants upgrade space
  36. 36. Significant transactions, page 14
  37. 37. Rents rising in “trophy” buildings by 16.4%
  38. 38. But: 22 years of almost no growth in supply41.5 million square feet
  39. 39. While we were adding Cira & Comcast
  40. 40. 44 office buildings, 6.5 mil sf converted to other useYear Name Address SIZE1997 220 S 16th St 220 S 16th St 185,0001998 1600 Walnut 1600 Walnut St 86,6581998 Empire Building 1231 Walnut St 27,6801998 Exchange 1411 Walnut St 118,8791999 1220 Sansom St 1220 Sansom St 41,0001999 Avenue of the Arts Building 1338 Chestnut St 314,0001999 Pennsylvania House (Now the Ellington) 1500 Chestnut St 241,0002000 1700 Walnut 1700 Walnut St 72,0002000 Phoenix 1600 Arch St 450,0002000 PSFS 12 South 12th street 557,0002001 1835 Arch St 1835 Arch St 176,0002001 Chestnut View 1939 Chestnut St 29,9122002 1920 Chestnut St 1920 Chestnut St 45,0002002 311 S Juniper St 311 S Juniper St 75,0002002 Green Tree 400 Walnut St 64,3902002 Lofts at Liberty 1600 Chestnut St 38,0162002 Society Hill Building 116 S 07th St 160,0202003 Nippon Building 610 North Broad 225,0002003 1930 Chestnut St 1930 Chestnut St 110,0002003 415 S 19th St 415 S 19th St 30,0002003 Grande 111 S 15th 241,2912004 Victory Building 1001 Chestnut St 80,0002004 The Bank 421 Chestnut St 55,4302005 2043 Walnut St 2043 Walnut St 8,0002005 Belgravia 1881 Chesnut 35,0002006 Chelsea 1513 Locust St 55,8512007 Ayer 210 W Washington Sq 151,4352007 Western Union Building 1101 Locust St 162,8932007 White Building Condominiums 1130 Chestnut St 55,0002007 1401 Walnut 1401 Walnut St 125,4502007 1530 Chestnut 1530 Chestnut St 75,1772007 Aria 1419 Locust St 195,0002007 Bank Building 421 Chestnut St 55,4302007 Residences Two Liberty Place 1650 Chestnut St 263,0002008 Robert Morris 100 N 17th Street 100,0002008 Architects Building 100 South 17th 113,0002010 Lafayette Building 441 Chestnut 1440002011 1201 Chesnut 1201 Chesnut 1010002011 2040 Market Street 2040 Market Street 128,0002011 1616 Walnut 1616 Walnut 158,0002011 former State Building 1400 Callowhill 240,0002012 260 South Broad 260 South Broad 3300002012 Inquirer Building 400 North Broad 450,0002013 Three Franklin 1601 Race 225,000
  41. 41. Conversions brought us new hotels in vacant &underperforming buildings
  42. 42. Conversions brought us more residentson the streets at night
  43. 43. Diversification good; but has to be accompanied by growth;Western suburbs have now grown 35% larger than CBDAdded 10 million sf in last decade while city added only 1.9 million41% regional share of office in 1993; 33.7% in 2012
  44. 44. Office job growth much stronger in suburbs
  45. 45. Despite our competitive advantagesOverall rents are flat in the downtownDemand is largely flat
  46. 46. Our rents are much lower than comparable citiesWhich is why assessed value of commercialbuildings are not higher
  47. 47. Other east coast cities have larger share oftheir economies in office employment
  48. 48. A change in municipal tax policy can have major impactWe maintained tax structure left over from industrial ageWhen it was hard to move an assembly lineOr a Baldwin locomotive plant
  49. 49. Laptops and cell phones, office work in general isfar more portable, flexible & footloose
  50. 50. Much smaller percentage:35% in Washington DC34% in NYC18% PHL from RE TAX64% Baltimore41% NYC36% Washington DCwhere commercial sectorsare more robust66% of municipal tax revenues come from taxingwhat easily moves: wages & profits
  51. 51. Pew: 2013 State of CityAn over-dependence on taxing what moves
  52. 52. It may help explain this phenomenon1,326 commercialoffice jobs7,953 commercialoffice jobs
  53. 53. Part of a bigger picture of loss ofregional office market share
  54. 54. “Only by making a wholesale shift & lowering the burden onpeople & businesses & placing a greater emphasis on land& improvements can we guarantee a future of growth.”
  55. 55. AVI has been a challenge, but need to look at wholeAll publicdiscussionfocused here
  56. 56. Health care & education: a very different story
  57. 57. More tied to fixed assets; labs, beds, technology, classrooms
  58. 58. Exempt from 2 largest taxes on employers:property & BIRT
  59. 59. Citywide Eds & Meds employment grew by 14%averaging 1.7%/year through the Recession
  60. 60. Out-performed the region in job growthCity has 57.5%regional share of jobs
  61. 61. 35.5% of citywide employment
  62. 62. 2nd largest: 21% of Center City employment
  63. 63. In-patient admissions at Center City hospitals up2010-2011
  64. 64. Center City hospital revenues up by 50%in last decade
  65. 65. Research expenditures up, 2010 to 2011
  66. 66. Robust activity with new patent applications& patents granted
  67. 67. Five major institutions expanding downtown11,000 employees3,700 students
  68. 68. 14 major colleges & universities in Center City1. Academy of Vocal Arts2. Art Institute of Philadelphia3. Community College ofPhiladelphia4. Curtis Institute of Music5. Metropolitan Career Center6. Moore College of Art &Design7. Peirce College8. Pennsylvania Academy ofthe Fine Arts9. Temple University, CC10. Temple University,School of Podiatric Medicine*11. Thomas Jefferson Univer.12. University of the Arts13. Drexel University14. Drexel College of Medicine
  69. 69. Students drive demand for retail, restaurants &apartments + attractive to employers
  70. 70. Hospitality industry
  71. 71. Big story: Convention Center has doubled in size
  72. 72. Accommodating larger & simultaneous shows
  73. 73. Decision to put the Center at the center& not at the margins
  74. 74. With nearly all hotels within 15 minute walk
  75. 75. Means that crowds inside, routinely….
  76. 76. Spill out onto the sidewalks of the surrounding city
  77. 77. 59% of expenditures of hotel guestsMade outside hotel on shopping & dining
  78. 78. Expansion prompted other new development
  79. 79. Lenfest Plaza
  80. 80. 246 room: Hilton Home2Suites
  81. 81. Investments in new tourism facilities yield dividends2001: New Independence Visitors Center
  82. 82. New home for Liberty Bell
  83. 83. New Constitution Center
  84. 84. Top 2 visitor destinations in the Center City
  85. 85. Monaco Hotel: 5th and Chestnut Streets
  86. 86. Diversification of demand has yielded dividends
  87. 87. Hotel occupancy fully rebounded from recession
  88. 88. Average daily room rates almost fully rebounded
  89. 89. Hospitality employment more volatile;outperformed suburbsCity has 34.8%regional share of jobs
  90. 90. Big story: opening of the Barnes Foundation
  91. 91. Part of major improvements on the BenjaminFranklin Parkway 2007-2014Supported Pew, William Penn, Knight FoundationsCommonwealth & the City
  92. 92. Restoration of park;supported by creation of Café Cret
  93. 93. Restoration Aviator Park & Sister Cities Park
  94. 94. Aviator Park
  95. 95. Sister Cities Park
  96. 96. Restoration of Rodin Museum & gardens
  97. 97. Franklin institute is under construction..
  98. 98. $23.3 million expansion on south side
  99. 99. Many institutions reinvesting & expanding
  100. 100. Center City today is rich with cultural amenities
  101. 101. 2nd behind only Midtown NYCNumber of Arts & Cultural organizations downtownOne of the major attractions of downtown living
  102. 102. Attendance strong: overall up 6.7%majority seeing increases 2011 to 2012
  103. 103. Arts & entertainment employment up 26%
  104. 104. Retail is the beneficiary of these diverse sources of demand
  105. 105. Plus impact of downtown residents$751 million in retail demand within one-mile of City Hall
  106. 106. Supports broad range service & destination retail2,645 premises: 80% boutique & independent operators
  107. 107. Retail occupancy trended upward to 88.4%despite recession (South Street To Vine Street)
  108. 108. Continuous growth in fine dining restaurants4192005 2010 2012400350300
  109. 109. Broad offering of bakeries, groceries, coffee shops,prepared food & take out
  110. 110. Flourishing of sidewalk cafes
  111. 111. 1995 = zero
  112. 112. 2002
  113. 113. 2005
  114. 114. 2007
  115. 115. 2010: 213 outdoor cafes
  116. 116. 296 cafes in 2012
  117. 117. People attract people
  118. 118. Track pedestrian volumes to supportretail attraction efforts
  119. 119. Installed 14 non-recording pedestrian countingcameras at end of 2011
  120. 120. Growing evening peak, extending later
  121. 121. Seasonal 24-hour average counts24,696 springtime peak on 1700 WalnutEast Chestnut & Market greatest opportunities for growth
  122. 122. Take the vitality, energy….
  123. 123. And the quality of South 13th street
  124. 124. Bring it around the corner onto East Chestnut
  125. 125. Make Market Street: primary hospitality &destination retail/entertainment corridor
  126. 126. Transform the Gallery
  127. 127. With destination & entertainment retail
  128. 128. Animate the sidewalks with outdoor cafes
  129. 129. Gateway & connector to Chinatown & Convention Ctr
  130. 130. State of Center City 2013: Switch to part 2

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