PHILADELPHIA | EVO @ Cira Centre South | 407 FT | 33 FLRS | U/C

[winxs]

Keystone Opportunity Zone Program Expanded

By: Bradley Vasoli, The Bulletin
07/11/20
Allentown - Gov. Ed Rendell (D) yesterday signed Senate Bill 1412, a broadening of the Keystone Opportunity Zone program providing relief from state and local taxes on sites the commonwealth considers difficult to redevelop.
Twelve business development sites, designated by the Department of Community and Economic Development (DCED) already exist under the program. The new law will permit DCED to create 15 new sites.
"The development community really came to us and said this is what we need to get things done," state Sen. John Pippy (R-Allegheny), the Urban Affairs and Housing Chairman, told reporters.
The measure also extends the time during which sites may enjoy KOZ status. Current zones will all get seven-year extensions on their benefits and companies occupying new sites before 2015 can maintain their KOZ designations for ten years.
"[The program] was running out," Mr. Rendell said. "Like all good programs, there were time limits on it. I knew that we had to extend the time."
Of the 12 existing KOZ sites, two are in southeast Pennsylvania. The software manufacturer AdminServer has been establishing operations in a building once used as a power plant in Chester City. An Urban Outfitters headquarters in Philadelphia has also benefited from expanding into a site at the Philadelphia Navy Yard.
Public officials from both parties lauded Mr. Rendell's signing the legislation and noted the broad support the effort received in both houses of the General Assembly. Each chamber passed the measure nearly unanimously.
But some economic policy experts like free-market Commonwealth Foundation policy researcher Nathan Benefield suggest that if lifting the burden of taxes and regulations is good for areas deemed worthy of KOZ status because of environmental damage or other blights, the state should apply that logic more broadly and lighten the tax and regulatory burdens for all Pennsylvania businesses.
Mr. Benefield also lamented what he deemed an element of patronage in determining which companies get to enjoy KOZ incentives.
"A lot of times they're set up for specific companies," he said. "They're kind of using it to help specific firms for their benefit" as opposed to targeting the program toward tracts that are difficult for businesses to utilize.


Bradley Vasoli can be reached at [email protected]

[theWatusi]

another small step closer...

[Jes44]

Anyone have an updated pics of the demolition/construction? Also, anyone have inside connection as to whether Black Rock has made the announcement official for their move?

[pwp]

Originally Posted by Jes44

Anyone have an updated pics of the demolition/construction? Also, anyone have inside connection as to whether Black Rock has made the announcement official for their move?

An official announcement may be farther off than we think. Believe you me I'd love to see it happen but am afraid they'll use Philly as a bargaining chip against NJ. New Brunswick and Trenton are both courting Black Rock and may up the ante after the KOZ extension passes. From what I've read, BR's employee base in Plainsboro mostly comes from those towns in the Central Jersey region. With that said, New Brunswick has much to offer in terms of location and accessibility, as well as being a relatively hot area. But of course it comes down to dollars and cents. I'm pulling 100% for Philly but am afraid that they recognize the hit taken with a move 40+ miles away during a time when gas prices are through the roof.

Keeping my fingers crossed.

[cubanChris]

Oh this makes me sad - no nail in the coffin but not positive news either

Monday, July 14, 2008
BlackRock adds jobs in Delaware
Delaware Gov. Ruth Ann Minner, who's presided over the sale of the state's biggest white-collar employer, MBNA Corp., and several thousand job cuts, and is bracing for the planned closing of the sprawling Chrysler plant in Newark, Del., hopes BlackRock Inc. will make good on its promise to move 300 jobs to Delaware if the state enacts a new tax law.
Minner trumpeted the promise in Feburary -- release here -- and she's signing the bill later this month.
That's the same BlackRock that said last month it'll move more than 1,000 Jersey jobs to Philly if the state and city give it tax breaks.

http://www.philly.com/philly/blogs/inq-phillydeals/BlackRock_adds_jobs_in_Delaware.html

[scalziand]

Even if the 300 jobs slated for Delaware are part of the 1000 originally slated for Philly, that should still leave 700 for Philly.

[Don098]

Originally Posted by pwp

I'm pulling 100% for Philly but am afraid that they recognize the hit taken with a move 40+ miles away during a time when gas prices are through the roof.

Both of those New Jersey cities are directly connected to the NE corridor, which is right where Cira Center South is. Car commuting from those areas would not be necessary so I don't really buy that argument. If Blackrock wasn't serious about coming to Philadelphia, they wouldn't have pushed so hard for that KOZ extension and pushed around a mayor and governor. I don't think companies bluff on that kind of scale...if they were lukewarm on Philly to begin with, they would have crossed it off their list without the hassle of going through this whole process. Plus, a company with their profile would be better suited in a major city inside a cool skyscraper, and I think they know that. Remember, these employees are business people, highly concerned with their image and status. Nothing speaks to status more than a skyscraper.

[We Got Five]

Don098,

I politely disagree on the skyscraper status comment - if they were only concerned with the building, they would only look in CC or NYC. It comes down to taxes, safety, and location. Does the recent population decline play a factor? No, not in my opinion. But years of stale business growth do not make "us" attractive to folks who do not live in Philadelphia. Now with that said, I still believe BlackRock will be here in 2012. We need them more then they need us and the Mayor will make this happen. I'm sure he'll be criticized by many for focusing on recruiting "big business", but we are in desperate need of financial services and technology jobs.

[pwp]

Don98,

To some extent I agree with you but consider the following points:

Originally Posted by Don098

If Blackrock wasn't serious about coming to Philadelphia, they wouldn't have pushed so hard for that KOZ extension and pushed around a mayor and governor. I don't think companies bluff on that kind of scale.

Possibly, but keep in mind it was the State that went through the motions to extend the KOZ, BlackRock simply asked for it.

Originally Posted by Don098

Plus, a company with their profile would be better suited in a major city inside a cool skyscraper, and I think they know that.

The majority of their workforce is located in NYC, 4k jobs I think. If they wanted to anchor a building then this would seem the logical place (with the exception of the cost). It doesn't seem right to me that a company would place it's flagship building in a different city from it's headquarters.

Originally Posted by Don098

Both of those New Jersey cities are directly connected to the NE corridor, which is right where Cira Center South is.

This is true but it'd be one thing if they were connected directly, however it requires a connection in Trenton. I've taken the R7 before and it's a frustratingly long 40 minute ride just to Trenton. So area workers would be driving to Trenton, parking then commuting to Cira. In terms of commuting it'd make more sense to have it's headquarters in Central Jersey.

I want this building to happen in Philly. But for some reason I feel pessimistic. I usually don't play devil's advocate on this forum either.

[Don098]

Originally Posted by pwp

This is true but it'd be one thing if they were connected directly, however it requires a connection in Trenton. I've taken the R7 before and it's a frustratingly long 40 minute ride just to Trenton. So area workers would be driving to Trenton, parking then commuting to Cira.

I suppose you're right. Amtrak is still prohibitively expensive to use on a daily basis, even for $100K+ employees. Perhaps that will change with time. I do tend to be stubbornly optimistic by nature

[bucks native]

July 11, 2008

Compromise softens opposition to controversial Pa. KOZ

Philadelphia Business Journal - by Natalie Kostelni Staff Writer

Brandywine Realty Trust and Philadelphia moved closer to setting the stage for luring a sizable operation of BlackRock Inc., a mega-investment management firm operating out of Plainsboro, N.J., to Cira Centre South.

A controversial measure to extend the Keystone Opportunity Zone at a site in University City was hashed out among legislators, Gov. Ed Rendell, Brandywine and Center City landlords as part of the state budget signed off on during the first week of July. The 14-acre site is where Brandywine Realty is planning to build Cira South, an $800 million mixed-use development that will include offices, residences and retail space.

It appears that, through a political tug-of-war, a deal was struck that appeases all sides.

Up for debate was the expansion of the number of opportunity zones as well as the extension of existing undeveloped parcels that lie in zones across Pennsylvania. In Philadelphia, the issue had more gravity. Landlords feared a repeat of Cira Centre, where tax-paying tenants from Center City jumped across the Schuylkill River into basically a tax-free office building. However, City Council, the state, economic development officials, Brandywine Realty and even existing landlords didn't want to lose a chance at attracting BlackRock -- a heavy hitter that could bring about 1,000 jobs to Philadelphia.

Cira South, a proposed office project by Brandywine Realty, sits in an opportunity zone that expires in 2018, which is too limiting for a big tenant to lease space.

To allay existing landlord's fears of companies office hopping to tax-free space, a new regulation was attached to the KOZ legislation passed in the latest state budget. The regulation mandates that if 500 new office jobs are created at Cira South, the building will have the opportunity zone extended by another seven years, or out to 2025. That also applies to a site referred to as Cira II, which Brandywine controls and could be another option for BlackRock or another major company looking at Philadelphia.

Those additional years make Cira South more attractive to prospective companies. For example, if a tenant signed a lease to move into Cira South, which is under construction, beginning in 2010, it would get a minimum 15 years of tax breaks under the zone. Many large firms desire such long-term leases for planning and financial purposes.

The new regulation tied to the KOZ legislation was tailored to BlackRock, which is evaluating relocating one of its divisions and is seriously considering Cira South, according to those involved in the process. That timeframe also works with what BlackRock has told city officials, said Duane Bumb, senior deputy director of the Philadelphia Commerce Department. BlackRock said it has yet to make a decision and has plenty of time to make a decision since its leases don't expire until 2012, said Bobbie Collins, a spokeswoman.

The additional time on the opportunity zone also sends a message to other firms that the state and city can muster up incentives, said Jerry Sweeney, president and CEO of Brandywine.

"They made it clear they needed the extension for Pennsylvania and Philadelphia to be considered," Sweeney said. "It creates an entrée to be in the game."

The extension is a "very proactive" move, Sweeney said.

It wasn't without a fight. Existing Center City landlords engaged in a two-and-a-half-week political skirmish to ensure their interests were preserved in the bill.

"The fight was intense," said Dave Campoli, vice president at HRPT Properties Trust, which is one of the city's largest office building owners.

Campoli and his downtown counterparts feared a repeat of Cira Centre. The 728,000-square-foot building quickly leased up with a majority of Center City law and investment firms whose partners now don't have to pay taxes. Such a hefty tax-break is an unfair advantage to existing office owners who compete in the open market with no state or city incentives, the landlords argued.

"I think overall it's a win for everybody," Campoli said, adding that companies who do move into an opportunity zone should be held to a higher standard and be required to produce new jobs in the city.

It wasn't just the landlords who wrangled over the issue during the state budget hearings. It exhausted Rep. Dwight Evans, D-Phila.

"This was one of the more tortuous budgets I've been through," Evans said.

"No one minds eating something but no one wants to know how it was cooked in the kitchen," he said. "You hope it's healthy and safe but you don't go back into the kitchen to see how it was prepared. That's the same thing when putting the KOZ together."

[cjPhilly]

Not to get anyone's hopes up, but

BlackRock close to Pennsylvania move
by Ian T. Shearn and Josh Margolin/The Star-Ledger
Wednesday July 16, 2008, 12:01 AM

BlackRock, one of the world's largest investment funds, is "very close" to a deal to move 1,200 employees from Plainsboro to Philadelphia, according to three executives with knowledge of the negotiations.

New Jersey officials had made a strong bid for the project, offering a lucrative package of tax breaks if the company agreed to move to New Brunswick.

But the bi-state bidding escalated in recent weeks, when Pennsylvania offered a better package of tax breaks to move to the center-city location in Philadelphia, according to the executives, who requested anonymity because a final deal has not been inked.

"All I can say is there is no formal agreement," said Kevin Ortiz, spokesman for the Pennsylvania Department of Economic Development.

Sean Darcy, a spokesman for New Jersey Gov. Jon Corzine, said the state has not been notified of a decision.

"We're still making a good-faith effort to convince Black Rock that New Jersey is the best place for its business," he said. "We've tried to make our case on every front, including all available tax and finance incentives. We have sweetened the deal where it made sound financial sense to do so, and we believe in the end the company will realize that New Jersey is the best choice."

http://www.nj.com/business/index.ssf/2008/07/blackrock_close_to_pennsylvani.html

[wally]

More news from today...

http://www.nj.com/starledger/stories/index.ssf?/base/news-4/1216269412262650.xml&coll=1


Plainsboro not too sad as BlackRock plans to pack up
Investment fund to move 1,200 staff to Philly

Thursday, July 17, 2008
BY SUE EPSTEIN
Star-Ledger Staff

The anticipated loss of BlackRock and its 1,200 employees is disappointing to Plainsboro officials, but one of the world's largest investment funds was never considered a permanent tenant in the township.

"We didn't anticipate they'd stay long-term," said Mayor Peter Cantu. "Merrill Lynch moved out and BlackRock moved in."

Merrill Lynch moved to Hopewell in 2002 and put its Plainsboro campus up for sale. After the site was sold, BlackRock, which had formed an alliance with Merrill Lynch in 2006, moved into the building.

The investment giant reportedly is close to a deal that would move its Plainsboro employees to Philadelphia, capping a bistate bid ding effort between New Jersey, which offered tax incentives to keep BlackRock in the state, and Pennsylvania. But New Jersey's efforts to keep BlackRock focused on finding it a new home in one of the state's transit hubs, notably New Brunswick, not in a suburban loca tion like Plainsboro.

"We knew the company wanted to move closer to a transit hub," Cantu said. "New Jersey offered tax incentives for transit hub locations. Obviously, we would have loved to see them stay, but also obviously it was not happening, even if they chose to stay in this state."

Neither Trenton nor Plainsboro has been officially notified of any decision by BlackRock to move, according to Cantu and a spokesman for Gov. Jon Corzine.

Despite the lack of any formal notification, Plainsboro is not anticipating that BlackRock will be staying past its current lease.

"We know the new owners of that facility are aggressively seek ing tenants," Cantu said. "My understanding is that BlackRock still has three or four years on its lease."

The mayor said the loss will not have a negative impact on the township because existing compa nies are expanding and the township has been chosen as the new location for the Princeton Medical Center.

"We think we'll weather this loss," Cantu said.

Sue Epstein may be reached at [email protected] or (732) 293-4925.

[SJPhillyBoy]

Cira Centre South here we come. Can anyone else smell a 700+ footer?

[theWatusi]

Originally Posted by wally

"My understanding is that BlackRock still has three or four years on its lease."

They best get cracking on finalizing the design so construction can start.

[cubanChris]

Small additional article from PBT

Thursday, July 17, 2008
BlackRock gains as others lose

BlackRock Inc. is winning new business to its bond and stock funds, even as Legg Mason and other money managers lose customers in the bear market, says Bloomberg here.
That's probably good news for Philadelphia, which is primed to pick up 1,200 BlackRock jobs as the company prepares to vacate back offices in Plainsboro, N.J. Gov. Rendell and Mayor Nutter are eager to give BlackRock the tax breaks it demands, even though the New York company earned $1 billion last year.
The job move could be confirmed later this month, and Plainsboro isn't too upset about BlackRock leaving, says the Newark Star-Ledger here.
If we were Brandywine Property Trust, or the prospective new investors in its Cira office complex in West Philadelphia, we'd be hoping BlackRock signs a lease on its planned Cira South space before Legg Mason, a big tenant in the existing Cira tower, is forced to cut back.
Delaware's also waiting to clinch 300 new BlackRock jobs after changing its tax code to BlackRock's specs.

http://www.philly.com/philly/blogs/inq-phillydeals/BlackRock_gains_as_others_lose.html

And the mentioned Star Ledger Article is a few posts above ^^^^

[wally]

While it looks like Plainsboro officials aren't too concerned about losing BlackRock, state officials seem to be pretty upset about it. I wonder if NJ can/will do anything at this point to stop the move?

NJ officials-Stop BlackRock's move to Philadelphia
Wed Jul 16, 2008 3:40pm EDT

NEW YORK, July 16 (Reuters) - New Jersey state senators on Wednesday called on the governor to hold an emergency summer session to stop companies such as BlackRock Inc (BLK.N: Quote, Profile, Research, Stock Buzz) from moving out of state.

Sen. Thomas Kean, the Republican state Senate leader, said it appeared that the legislature's effort to encourage companies like BlackRock, to expand around existing mass transit centers such as Trenton and New Brunswick were "inadequate."

BlackRock, the largest publicly-traded U.S. asset manager, now has about 1,200 asset managers in Plainsboro, New Jersey, a suburb of Princeton. Kean cited newspaper reports that said these high-income earners will move to Philadelphia.

A report in Wednesday's edition of The Star Ledger said BlackRock was "very close" to a deal for new offices in Philadelphia, citing three executives "with knowledge of the negotiations."

BlackRock declined comment while a spokesman for Gov Jon Corzine, a Democrat, had no immediate comment. A spokesman for Pennsylvania Governor Ed Rendell, also a Democrat, was not immediately available.

"The exodus of jobs and capital from New Jersey is reaching epidemic proportions," Kean said in a statement.

In 2005, BlackRock bought Merrill Lynch's (MER.N: Quote, Profile, Research, Stock Buzz) asset management business, which serves institutional investors. BlackRock must find a new new home by late 2011 or early 2012, before the lease for its Plainsboro offices expires, according to a source familiar with the company.

For years, New York City and New Jersey have vied for financial companies because they and their well-paid employees give tax revenues a boost. The Philadelphia area is home to a number of such companies, including the Vanguard Group, while one of Pennsylvania's biggest banks, PNC Financial Services Group (PNC.N: Quote, Profile, Research, Stock Buzz), has a major stake in BlackRock.

© Thomson Reuters 2008.

[We Got Five]

Complete the deal Mayor Nutter - it's 4th and goal on the 1. Give it to Westbrook.

[cubanChris]

Originally Posted by We Got Five

Complete the deal Mayor Nutter - it's 4th and goal on the 1. Give it to Westbrook.

I hear that. This is the umpteenth time I've (and others) have said this, but getting BlackRock to come would have such great repercussions for the city. I mean the additional construction related jobs (on top of those already employed for the Post Office renovation) would be great for workers in the city. Additionally it would provide a second step towards an invigorating effort in University City -

UPenn and even Drexel do a lot there, but having another jolt to the system would, needless to say, be great. Heck, maybe Drexel's hotel project may come to fruition more swiftly...

[Ninjawho]

Can the state government "stop" a company from leaving the state? Last time I checked isn't it a free country?

or does he just mean make the deal sooooo sweet for Blackrock that they don't want to move?