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/

1. State of Center City 2013

2. Headline: There are huge competitive advantages
of Center City’s density, diversity & walkability

3. Highest job densities in the region
167 jobs/acre; less than 1 job/acre suburbs

4. 279,412 jobs: largest center of employment &
opportunity in the region

5. Density maximizes choice for residents of
surrounding neighborhoods

6. Facilitated by a regional transit system brings
305,238 riders/day into downtown

7. Distributing them to multiple locations
across Center City

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. Density reduces transportation costs for businesses
Facilitates chance encounters on street

10. Greater Center City: Girard Avenue to Tasker Street
233,900 core45,500
extended

11. 2.4 x residential density of rest of city
63 persons/acre around Rittenhouse Square
>2/ acre
suburbs

12. Extraordinary concentration of arts & culture
organizations second only to midtown Manhattan

13. Most diversified employment node in the region

14. 32% office; 21% eds/meds; 21% public sector;
14% hospitality & entertainment

15. Diversification: greatest buffer against recession
& provides greatest opportunity for growth

16. 34% of all small, emerging businesses in
Philadelphia are located downtown

17. Diverse sectors reinforce each other & perform differently

18. Success is affected by the investments we make:
Decision to put the Center at the center & not at the margins

19. By the quality of services we provide

20. By what we choose to tax to support those services

21. By educational levels of workforce
14.6%
9.7%
5.2%
2.3%

22. By macro factors like the national economy & cost of energy
We inherit a human-scale, walkable city…..

23. This made us obsolete: 1950s-1970s

24. 1964 VW, purchased 1970 – Full tank $3.10

25. In a context of rising energy costs…

26. Re-infused with value in the post-petroleum age:
Dense, diverse & walkable = sustainable

27. Success is contingent on how we capitalize on advantages;
make strategic investments & remove barriers to growth

28. Largest employment sector: 32% of downtown jobs

29. .
41.5 million square feet of office space

30. Well-linked to the region by highway & rail

31. Well served by AMTRAK
SEPTA & PATCO ridership up by 3%

32. 15 minutes from Philadelphia International Airport

33. 88.6% occupancy rate: above national average
for both CBD’s & suburbs

34. Recovering well from the recession:
Vacancy rates

35. Significant number of lease transactions
primarily west of Broad as tenants upgrade space

36. Significant transactions, page 14

37. Rents rising in “trophy” buildings by 16.4%

38. But: 22 years of almost no growth in supply
41.5 million square feet

39. While we were adding Cira & Comcast

40. 44 office buildings, 6.5 mil sf converted to other use
Year Name Address SIZE
1997 220 S 16th St 220 S 16th St 185,000
1998 1600 Walnut 1600 Walnut St 86,658
1998 Empire Building 1231 Walnut St 27,680
1998 Exchange 1411 Walnut St 118,879
1999 1220 Sansom St 1220 Sansom St 41,000
1999 Avenue of the Arts Building 1338 Chestnut St 314,000
1999 Pennsylvania House (Now the Ellington) 1500 Chestnut St 241,000
2000 1700 Walnut 1700 Walnut St 72,000
2000 Phoenix 1600 Arch St 450,000
2000 PSFS 12 South 12th street 557,000
2001 1835 Arch St 1835 Arch St 176,000
2001 Chestnut View 1939 Chestnut St 29,912
2002 1920 Chestnut St 1920 Chestnut St 45,000
2002 311 S Juniper St 311 S Juniper St 75,000
2002 Green Tree 400 Walnut St 64,390
2002 Lofts at Liberty 1600 Chestnut St 38,016
2002 Society Hill Building 116 S 07th St 160,020
2003 Nippon Building 610 North Broad 225,000
2003 1930 Chestnut St 1930 Chestnut St 110,000
2003 415 S 19th St 415 S 19th St 30,000
2003 Grande 111 S 15th 241,291
2004 Victory Building 1001 Chestnut St 80,000
2004 The Bank 421 Chestnut St 55,430
2005 2043 Walnut St 2043 Walnut St 8,000
2005 Belgravia 1881 Chesnut 35,000
2006 Chelsea 1513 Locust St 55,851
2007 Ayer 210 W Washington Sq 151,435
2007 Western Union Building 1101 Locust St 162,893
2007 White Building Condominiums 1130 Chestnut St 55,000
2007 1401 Walnut 1401 Walnut St 125,450
2007 1530 Chestnut 1530 Chestnut St 75,177
2007 Aria 1419 Locust St 195,000
2007 Bank Building 421 Chestnut St 55,430
2007 Residences Two Liberty Place 1650 Chestnut St 263,000
2008 Robert Morris 100 N 17th Street 100,000
2008 Architects Building 100 South 17th 113,000
2010 Lafayette Building 441 Chestnut 144000
2011 1201 Chesnut 1201 Chesnut 101000
2011 2040 Market Street 2040 Market Street 128,000
2011 1616 Walnut 1616 Walnut 158,000
2011 former State Building 1400 Callowhill 240,000
2012 260 South Broad 260 South Broad 330000
2012 Inquirer Building 400 North Broad 450,000
2013 Three Franklin 1601 Race 225,000

42. Conversions brought us new hotels in vacant &
underperforming buildings

43. Conversions brought us more residents
on the streets at night

44. Diversification good; but has to be accompanied by growth;
Western suburbs have now grown 35% larger than CBD
Added 10 million sf in last decade while city added only 1.9 million
41% regional share of office in 1993; 33.7% in 2012

45. Office job growth much stronger in suburbs

46. Despite our competitive advantages
Overall rents are flat in the downtown
Demand is largely flat

47. Our rents are much lower than comparable cities
Which is why assessed value of commercial
buildings are not higher

48. Other east coast cities have larger share of
their economies in office employment

49. A change in municipal tax policy can have major impact
We maintained tax structure left over from industrial age
When it was hard to move an assembly line
Or a Baldwin locomotive plant

50. Laptops and cell phones, office work in general is
far more portable, flexible & footloose

51. Much smaller percentage:
35% in Washington DC
34% in NYC
18% PHL from RE TAX
64% Baltimore
41% NYC
36% Washington DC
where commercial sectors
are more robust
66% of municipal tax revenues come from taxing
what easily moves: wages & profits

52. Pew: 2013 State of City
An over-dependence on taxing what moves

53. It may help explain this phenomenon
1,326 commercial
office jobs
7,953 commercial
office jobs

54. Part of a bigger picture of loss of
regional office market share

55. “Only by making a wholesale shift & lowering the burden on
people & businesses & placing a greater emphasis on land
& improvements can we guarantee a future of growth.”

56. AVI has been a challenge, but need to look at whole
All public
discussion
focused here

57. Health care & education: a very different story

58. More tied to fixed assets; labs, beds, technology, classrooms

59. Exempt from 2 largest taxes on employers:
property & BIRT

60. Citywide Eds & Meds employment grew by 14%
averaging 1.7%/year through the Recession

61. Out-performed the region in job growth
City has 57.5%
regional share of jobs

62. 35.5% of citywide employment

63. 2nd largest: 21% of Center City employment

64. In-patient admissions at Center City hospitals up
2010-2011

65. Center City hospital revenues up by 50%
in last decade

66. Research expenditures up, 2010 to 2011

67. Robust activity with new patent applications
& patents granted

68. Five major institutions expanding downtown
11,000 employees
3,700 students

69. 14 major colleges & universities in Center City
1. Academy of Vocal Arts
2. Art Institute of Philadelphia
3. Community College of
Philadelphia
4. Curtis Institute of Music
5. Metropolitan Career Center
6. Moore College of Art &
Design
7. Peirce College
8. Pennsylvania Academy of
the Fine Arts
9. Temple University, CC
10. Temple University,
School of Podiatric Medicine*
11. Thomas Jefferson Univer.
12. University of the Arts
13. Drexel University
14. Drexel College of Medicine

70. Students drive demand for retail, restaurants &
apartments + attractive to employers

71. Hospitality industry

72. Big story: Convention Center has doubled in size

73. Accommodating larger & simultaneous shows

74. Decision to put the Center at the center
& not at the margins

75. With nearly all hotels within 15 minute walk

76. Means that crowds inside, routinely….

77. Spill out onto the sidewalks of the surrounding city

78. 59% of expenditures of hotel guests
Made outside hotel on shopping & dining

79. Expansion prompted other new development

80. Lenfest Plaza

81. 246 room: Hilton Home2Suites

82. Investments in new tourism facilities yield dividends
2001: New Independence Visitors Center

83. New home for Liberty Bell

84. New Constitution Center

85. Top 2 visitor destinations in the Center City

86. Monaco Hotel: 5th and Chestnut Streets

87. Diversification of demand has yielded dividends

88. Hotel occupancy fully rebounded from recession

89. Average daily room rates almost fully rebounded

90. Hospitality employment more volatile;
outperformed suburbs
City has 34.8%
regional share of jobs

91. Big story: opening of the Barnes Foundation

92. Part of major improvements on the Benjamin
Franklin Parkway 2007-2014
Supported Pew, William Penn, Knight Foundations
Commonwealth & the City

93. Restoration of park;
supported by creation of Café Cret

94. Restoration Aviator Park & Sister Cities Park

95. Aviator Park

96. Sister Cities Park

97. Restoration of Rodin Museum & gardens

98. Franklin institute is under construction..

99. $23.3 million expansion on south side

100. Many institutions reinvesting & expanding

102. Center City today is rich with cultural amenities

103. 2nd behind only Midtown NYC
Number of Arts & Cultural organizations downtown
One of the major attractions of downtown living

104. Attendance strong: overall up 6.7%
majority seeing increases 2011 to 2012

105. Arts & entertainment employment up 26%

106. Retail is the beneficiary of these diverse sources of demand

107. Plus impact of downtown residents
$751 million in retail demand within one-mile of City Hall

108. Supports broad range service & destination retail
2,645 premises: 80% boutique & independent operators

109. Retail occupancy trended upward to 88.4%
despite recession (South Street To Vine Street)

110. Continuous growth in fine dining restaurants
419
2005 2010 2012
400
350
300

111. Broad offering of bakeries, groceries, coffee shops,
prepared food & take out

112. Flourishing of sidewalk cafes

113. 1995 = zero

114. 2002

115. 2005

116. 2007

117. 2010: 213 outdoor cafes

118. 296 cafes in 2012

119. People attract people

120. Track pedestrian volumes to support
retail attraction efforts

121. Installed 14 non-recording pedestrian counting
cameras at end of 2011

122. Growing evening peak, extending later

123. Seasonal 24-hour average counts
24,696 springtime peak on 1700 Walnut
East Chestnut & Market greatest opportunities for growth

124. Take the vitality, energy….

125. And the quality of South 13th street

126. Bring it around the corner onto East Chestnut

127. Make Market Street: primary hospitality &
destination retail/entertainment corridor

128. Transform the Gallery

129. With destination & entertainment retail

130. Animate the sidewalks with outdoor cafes

131. Gateway & connector to Chinatown & Convention Ctr

132. State of Center City 2013: Switch to part 2