State of Center City 2011

State of Center City, 2011

The story of the last 20 years is a tale of successful diversification

It is the story of a 9-5 business district

Whose public environment was in disarray in 1990

1991: created a private-sector-led BID to turn this

Text Text Into this

Today: 69% of survey respondents Say Center City “much cleaner” than rest of the city

1 And with a uniformed presence of CSRs

Working in partnership with police Substantial long-term trend: 1993-2010
45% drop in major crime in CCD
77.3% drop in theft-from-auto
“ Halo” effect outside CCD boundaries

81% feel safe “most of the time” or “always” When in Center City

Clean & safe was the foundation on which we built a 24-hour downtown

1992: investments in arts & entertainment

Today: 3 rd nationally non-profit arts & culture organizations per 100,000 downtown residents

New attractions continue to open National Museum of American Jewish History

President’s House

The Barnes Foundation: opening in early 2012

Several other major projects in the pipeline

PAFA’s new pedestrian plaza linking The expanded Convention Center to the Parkway

Original public investment Pennsylvania Convention Center 1993: We entered the hospitality industry

Prompted a 95% increase in hotel rooms

Generating significant private investment That adapted & reused vacant, historic buildings

Nearly all within 15 minute walk

Of a Center that has just doubled in size Successfully marketed by PCVB

2001: New Independence Visitors Center

2002: New home for Liberty Bell

#1 & #2 most visited destinations in the city

94% increase in occupied hotel room-nights

42% of expenditures of hotel guests Spent outside hotel on shopping & dining GPTMC

328% growth in fine dining restaurants 278 65 in 1992

Even in last five years, through recession 31% increase in all types of food establishments

Total number of vacancies in all retail categories Steadily declined

Flourishing of sidewalk cafes

1995 = zero

2010: 213 outdoor cafes

Outdoor cafes: vote of confidence in quality of public spaces

Downtown that is clean & safe

Visitor- friendly: 683 pedestrian maps & signs

Integrated with 233 signs for motorist that the CCD also maintains

741 trees; 96 planters

. 1 Doubled nighttime illumination 2,046 pedestrian-scale lights

Covering 2/3 of all streets in CCD

Supporting & fostering the evening economy

Speciality lighting to animate public spaces 3 JFK underpasses

Create more destinations within downtown

Even in recession 60% say atmosphere “ somewhat” to “much better” than last year

1996: Residential success story Turning on the Lights Upstairs 4.5 million sf. Vacant Class “C” office space
Retained architect & developer to evaluate buildings
Recommended 10 year tax-abatement
approved in 1997

1998–2010: 171 buildings of all sizes Converted to residential use

Since 1997 added 12,632 new units of housing

27% increase in downtown population since 1990 93,074 residents; helped propel citywide growth Third largest residential downtown in the United States

Diversification of CBD land-use 22,000 residents now living inside CCD boundaries 22,000 71,000 surrounding

Steady outward growth of boundaries of downtown

43% residents: Girard to Tasker work downtown

Education levels have increased dramatically

In the “knowledge economy” exactly the employees that firms want

Household income increased 106% since 1990 5.3% per year

More purchasing power for both housing & retail; $491 million within 30 minute walk of City Hall

Higher levels of education yield broader dividends A 10% increase in the share of a region’s residents with a college degree increases per-capita gross metropolitan product by 22%. More entrepreneurs, More business formation & more opportunities

Increase education level of Philadelphia residents 14.6% 9.7% 5.2% 2.3%

Downtown accounts for 39% of jobs; 43% wages

Because we have an integrated transit system 309,256 riders/day take transit into downtown

20% of city residents living outside downtown; earn $3.5 billion annually working in Center City 12.7% = $1.5 b 10.1% = $1.2 b

89% increase Latino population since 1990 Population 1990 2000 2009 Mexican 3,276 6,220 14,450 % tot. pop. 0.2% 0.4% 0.9% % change 89.9% 132.3% Puerto Rican 67,857 91,527 114,874 % tot. pop. 4.3% 5.9% 7.5% % change 34.9% 25.5% Cuban 2,553 2,730 2,827 % tot. pop. 0.2% 0.2% 0.2% % change 6.9% 3.6% Other 15,507 28,451 36,771 % tot. pop. 1.0% 1.8% 2.4% % change 83.5% 29.2% Total 89,193 128,928 168,922 % tot. pop. 5.6% 8.3% 11.0% % change 44.5% 31.0%

Three clusters of employment; Account for ½ of jobs in Mexican population Mexicans Agriculture 4.91 Mining 8.99 Construction 22.62 Trucking services 0.07 Non-Durable goods manufacturing Groceries 1.02 Retail Grocery stores 1.18 Eating places 20.49 Insurance 1.52 Business and repair services Services to dwellings 3.18 Carwashes 3.08 Automobile repair 2.17 Professional services 10.98

How has Philadelphia fared in the recession?

Housing production dropped dramatically for condos & single family houses

Demand for rental remains strong

Average daily hotel room rates have declined

Expansion complete; 2,000 room shortage Room rates are rebounding

Office occupancy rates have declined

But in general, most CBD office districts have outperformed their suburbs. Philadelphia: #2 behind Houston is holding occupancy levels

Trends in health-care all positive: In-patient admissions downtown hospitals up 21% since 2001

Revenues at Center City hospitals are up +19%

NIH grant revenues are up Thomas Jefferson University received over $75 million in grant money from the National Institutes of Health for the fiscal year 2009

Colleges & universities continue to grow 32,865 students downtown; 104,975 adjacent

Freshman applications risen 87.5% since 2002

58% of seniors are “somewhat” to “very likely” to stay after graduation Campus Philly survey

24% major in health services ; 21% major in visual & performing arts

Eds & meds employment is up 17% in last decade

This has been our primary buffer against recession

Density + accessibility are a second factor

4 th most concentrated CBD for private sector jobs

3 rd in total number private sector jobs downtown Accessible by transit as fuel costs rise

#1 nationally: walk to work 35% walk; 24% public transit = 59% commute without a car

2 nd best in cumulative decline in house prices from peak Citywide

270% increase in value since 1990

So while Philadelphia lost jobs in the recession

Outperformed the region; staying even with nation

Assessment trends 1991-2011: CCD assessments: diversification pays off

Balanced mix: office, health care, education, arts, entertainment, hospitality, restaurants, retail & residential Sectors reinforce each other & cross-fertilize

What are challenges & opportunties in front of us?

Office employment has steadily declined Even during periods of economic expansion

By contrast, it has grown modestly in the suburbs

Less occupied office space than 20 years ago

Rents have been static for decades & can not support new construction

Philadelphia’s concentration in eds & meds A buffer than conceals a potential weakness; Dependency on a sector that is vulnerable to changes in federal & state funding

Philadelphia’s share is double national average of 18% in education & health

Much higher than east coast peers over-concentration in one sector could put us at risk

Center City is more diversified, we need to keep it that way. Create spin-off industries, commercial application of research

We need to end this pattern of divergence

Worth recalling Mayor’s Force recommendations

The debate should not be limited to …………
Whether we restart wage & business tax reduction
in FY 13 versus FY 14
nor focused only on:
Whether the Gross Receipts or the Net Income Portion
of the BPT is more important to cut

Restructuring & realigning what we tax
Because we tax the wrong things
Task Force did not simply propose reducing taxes,
It suggested that we:
Rely less on taxing what is mobile : jobs & firms
Rely more on what is immobile: land & improvements
Rely more on the property tax
We have a tax structure appropriate to a manufacturing city
When businesses could not easily move.

64% of local tax revenue comes from taxing highly mobile wages & profits PICA 55%

If you tax it (and it’s mobile), it will go

It was hard to move an assembly line Or a Baldwin Locomotive

Laptops and cell phones are far more portable

#1: We need a tax policy for a post-industrial city

Move quickly To capture the next cycle of growth in the city

#2: Invest in infrastructure; not just streetscape

We are very proud that $23.7 in CCD funds leveraged $22 million = $55.7 in public area improvements

(a) But we need bigger investments that enhance the competitive position of the region

700 daily flights to 86 domestic cities 39 international destinations Extend reach of the International airport: Within 2 hours flying time of 50% of US population

By expanding runway capacity

Strengthen our position on AMTRAK NE Corridor

68 minutes to NYC 95 minutes to Washington, D.C. Increasing speed & capacity of Acela trains 2 more cars/train = 40% increase 83 weekly trains to Washington D.C. 99 weekly trains to New York City

Preserve & capitalize on national commitment high speed rail 38 minutes to NYC; 67 minutes to Washington DC

HSR stopping both in Center City & PHL Airport Make downtown competitive with Jersey City & Hoboken

(b) Invest to reinforce major employment nodes

Downtown accounts for 39% of jobs; 43% wages

National Institute of Health (NIH) Research Funds: 2007 University City: 53% of NIH Research dollars

Vision: Front - 40 th : one continuous business district Regional center of transit-oriented development

Invest to connect city’s two largest employment & research nodes: 51% of jobs

Link Center City to University City

Fill the gap between the end of the office district..

… and Drexel’s plans to come east

Make it easier for Jerry to walk between his holdings

Enhance transit & highway access

Unlock the development potential

Western end of Center City

(i) Enhance subway-surface & subway lines

With new transit entrances + real time information

(ii) explore more expensive new service stops For SEPTA or PATCO at 21 st or 22 nd Street

(iii) Enhance the public environment

Landscaping & new bike lanes

(iv) Transform Dilworth Plaza

New gateway to regional transit

New green amenities

New events programming

With programs that change with the seasons

$15 million TIGER grant $15.5 million RACP $5 SEPTA $5 million city $5-8 m: 3 foundations $3-5 million private $20 million tax-exempt PNC loan Start of construction this fall

Stimulate spill-over investments

In adjacent office plazas

Tomorrow: reopening a renovated Chestnut Park

(v.) To provide more amenities for growing number of families with children

About to start construction: Sister Cities, Logan Square

$4.6 million children park in front of Cathedral

We have a dense, compact, walkable & transit-oriented downtown

It has been dramatically diversified in the last two decades

It’s the first recession in which we outperformed our suburbs

We finally reversed the decline in residents

Now is the time to begin to add jobs

(1) Tax reduction/reform to retain & expand job opportunities for residents, students & immigrants (2) Plan for & make major investments in infrastructure (3) Continue to improve the quality of public spaces

State of Center City will get even better

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State of Center City 2011

by Center City District on Apr 21, 2011

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State of Center City 2011 — Webinar Transcript