PHILADELPHIA | Highrise Development Thread IX

[summersm343]

Report: Commercial property tax rate change could bring nearly 80K jobs to Philly

A new report has concluded that an increase in commercial real estate taxes could help create 79,000 new jobs in Philadelphia over the next 10 years.

The Philadelphia Growth Coalition, a group of business leaders and other economic development groups that formed earlier this year, just released a study that bolsters its case for changing how commercial and residential properties are taxed in Philadelphia.

Philadelphia Growth Coalition hired Econsult Solutions Inc. to analyze the affect of its proposal to raise additional revenues by increasing the tax rate on commercial real estate, which would generate enough funds for the city wage tax to drop below 3 percent by 2025, the report said.

Lowering the wage and business taxes, combined with the revenue from the higher commercial real estate tax, according to Econsult, would potentially create 79,000 jobs over a decade.

“That compares to an increase of just 18,000 jobs over that same period if the changes are not enacted,” the report said.

An amendment to the state’s constitution would be needed to allow Philadelphia to charge a higher tax rate for commercial real estate than for residential. Under state law, all property must be taxed at the same rate.

Philadelphia City Council approved a resolution calling on the state legislature to seek the amendment and a proposal is expected to be introduced to the legislature this fall.

http://www.bizjournals.com/philadelphia/...alition-property-tax-rate-jobs-wage.html

[jsbrook]

Originally Posted by summersm343

Report: Commercial property tax rate change could bring nearly 80K jobs to Philly



http://www.bizjournals.com/philadelphia/...alition-property-tax-rate-jobs-wage.html

Halleujah! These chuckleheads in Harrisburg better approve this. And fast track it. No excuse not to.

[Kfmcshan]

Alterra, Stockton join to buy Market Street office building

Alterra Property Group and Stockton Real Estate Advisors have purchased the 1760 Market Street office building in Center City from an affiliate of Swiss pension-fund advisor AFIAA.

The joint venture closed on the 14-story building on Sept. 3, Alterra managing partner Leo Addimando said.

Addimando declined to disclose the purchase price. The AFIAA affiliate paid $19.3 million for the 137,000 square-foot building in February, 2006, according to city records.

Altera and Stockton will invest in a cosmetic upgrade of the building, which will remain in use as an office property, Addimando said.

http://www.philly.com/philly/business/re...office_building.html#7s5u15yvodoL3z5s.99

[AbortedWalrus]

Originally Posted by jsbrook

Halleujah! These chuckleheads in Harrisburg better approve this. And fast track it. No excuse not to.

Even fast tracking a constitutional amendment is going to take a long time, sadly.

[allovertown]

Originally Posted by AbortedWalrus

Even fast tracking a constitutional amendment is going to take a long time, sadly.

Pennsylvania State Government has a deep seeded hate for Philadelphia. Fast track? I'd be surprised if they did it at all, even though more jobs in Philly is good for all of Pennsylvania. Philadelphia should secede.

[McBane]

I'm somewhat optimistic about the new tax structure. For decades, we've been seeing the same old story about jobs and taxes. But this time, it's different because there seems to be concerted effort to bring about change that includes politicians, civil leaders, and, most importantly, business leaders.

As an aside, Clarke is off his rocker. He wants the ability to increase real estate taxes without the requirement to lower business taxes. That would be EXTREMELY dangerous and I don't see anyone getting behind that idea. His stance is so backwards and idiotic. While people are trying to improve the city's tax structure, Clarke's idea would make it doubly worse. Thankfully, Harrisburg would never ever allow Clarke's version to see daylight. But it goes to show what kind of leader he is. If ever runs for Mayor, he would likely win, and it would be very painful but at least he'd be out of sight after eight years. I personally think that the Council speaker is more powerful position and one that he could maintain until he dies, retires, or is sent to prison.

[Knight Hospitaller]

Originally Posted by allovertown

Pennsylvania State Government has a deep seeded hate for Philadelphia. Fast track? I'd be surprised if they did it at all, even though more jobs in Philly is good for all of Pennsylvania. Philadelphia should secede.

Then we'd be West Camden, New Jersey.

[summersm343]

Axalta to build $85M research facility at Philadelphia Navy Yard

Axalta Coating Systems Inc. will bring an estimated $85 million global research-and-development facility to the Philadelphia Navy Yard and relocate 190 jobs to the site with the expectation it could double the number of its employees at the South Philly campus over the next five to seven years.

The Philadelphia-based maker of liquid and powder coatings signed a 20-year lease with Liberty Property Trust (NYSE:LPT) on what will be a two-story building totaling 175,000 square feet. It will serve as Axalta's “Global Innovation Center.”

Liberty expects to complete construction by late 2017 and the facility should be fully operational by 2018. Axalta (NYSE: AXTA) has the ability to extend its lease, as well as an option to expand the structure by one level if growth warrants it. Erdy McHenry Architecture designed the building.

The facility will house Axalta’s global research, product development and technology operations.

Employees now working in Glen Mills, Pa., and Exton, Pa., will relocate to the facility. Upwards of 400 people could eventually work from there. The jobs are high-paying with starting salaries of $100,000 or more.

http://www.bizjournals.com/philadelphia/...a-to-build-85m-research-facility-at.html

[AbortedWalrus]

Originally Posted by McBane

I'm somewhat optimistic about the new tax structure. For decades, we've been seeing the same old story about jobs and taxes. But this time, it's different because there seems to be concerted effort to bring about change that includes politicians, civil leaders, and, most importantly, business leaders.

I am pretty optimistic too, particularly because this particular plan has not only the support of business leaders and civil leaders, but it also has the support of labor leaders. It's flat out shocking when you see unions and construction management essentially trumpeting the same ideas. IBEW, Building and Trades, SEIU, and the Carpenters are on board. Obviously they like any idea that can lead to more construction, but it's a sign that they realize that new construction is only going to happen if the city gets the tax rate straight and can grow the business sector. The plan essentially has the backing of pretty much every constituency in the region.

As you mentioned, it seems like the only person NOT backing it is Clarke, which is a colossal mistake.

[PhillySteaks]

Originally Posted by summersm343

Report: Commercial property tax rate change could bring nearly 80K jobs to Philly



http://www.bizjournals.com/philadelphia/...alition-property-tax-rate-jobs-wage.html

I agree that this would be an incredible and desperately needed change. But we all shouldn't forget that Philadelphia as a job center doesn't exist in a vacuum. I wouldn't be surprised at all to see other legislators from surrounding counties come out in full force to protest - as it is clearly defined in the state constitution it will most likely be an uphill battle - not to mention the pace at which Harrisburg moves (and yes many of those in the capitol still hate Philadelphia). The city after all, does compete directly with many of the surrounding suburban counties for jobs. To think they would roll over and take this is a bit naive. This change ideally would not only attract new tenants from other states - but also have an impounding impact on relocation's from the greater Philadelphia area to center city. Considering more and more of the talent is relocating to the urban core, this legislation would be even more of a draw for companies to relocate. I'd expect to see some push back. Obviously anyone linked to the Philadelphia job market would be all for it i.e labor/business leaders, politicians, etc. This wouldn't necessarily be the case outside Philadelphia.

[Insoluble]

Originally Posted by summersm343

Report: Commercial property tax rate change could bring nearly 80K jobs to Philly

I know I said this in the other thread, but I just want to point out again how ridiculous that number is. No one has any idea what the impact on job creation would be from this change. It does sound like it would be a positive change, but I highly doubt it would make as big a difference as they are making it out to be. (Of course those with a vested interest in changing the tax policy in their favor will try to exaggerate its benefits, and it's already been pointed out that the numbers cited in these articles are essentially made up.) Job creation in the city has been going quite strong for the past five or six years. It will probably continue to go strong for a little while regardless of if this gets past or not.

Originally Posted by McBane

As an aside, Clarke is off his rocker. He wants the ability to increase real estate taxes without the requirement to lower business taxes. That would be EXTREMELY dangerous and I don't see anyone getting behind that idea. His stance is so backwards and idiotic. While people are trying to improve the city's tax structure, Clarke's idea would make it doubly worse. Thankfully, Harrisburg would never ever allow Clarke's version to see daylight. But it goes to show what kind of leader he is. If ever runs for Mayor, he would likely win, and it would be very painful but at least he'd be out of sight after eight years. I personally think that the Council speaker is more powerful position and one that he could maintain until he dies, retires, or is sent to prison.

Yes, this 100%. Changing the makeup of city council would have a much greater long term impact on the growth of the city. Clark is definitely one of the worst, but there are plenty of other members of council who continue to perpetuate backwards policies that hold the city back. I'm not going to get all excited about the proposed change to the tax code, but if someone told me there was a good chance for serious turnover at city hall I'd flip. That would be seriously good news for development.

[summersm343]

Originally Posted by Insoluble

I know I said this in the other thread, but I just want to point out again how ridiculous that number is. No one has any idea what the impact on job creation would be from this change. It does sound like it would be a positive change, but I highly doubt it would make as big a difference as they are making it out to be. (Of course those with a vested interest in changing the tax policy in their favor will try to exaggerate its benefits, and it's already been pointed out that the numbers cited in these articles are essentially made up.) Job creation in the city has been going quite strong for the past five or six years. It will probably continue to go strong for a little while regardless of if this gets past or not.



Yes, this 100%. Changing the makeup of city council would have a much greater long term impact on the growth of the city. Clark is definitely one of the worst, but there are plenty of other members of council who continue to perpetuate backwards policies that hold the city back. I'm not going to get all excited about the proposed change to the tax code, but if someone told me there was a good chance for serious turnover at city hall I'd flip. That would be seriously good news for development.

I agree we need to change up City Hall, and get more forward thinking politicians in there, but at the same time it's a proven fact that the business tax structure in the city has held back the growth of companies in the city, has made it difficult for small companies to operate and get off of the ground, and the relocation of companies into the city which in turns has impeded job growth.

While the job growth has been strong for the region in the city, it's still a far cry for what it could be. And it's still far off from other cities and other regions like Seattle, Boston, DC, Houston, Dallas, Atlanta, San Francisco, etc. I believe a better business tax structure would accelerate job growth.

It's worth noting however how slow job growth has been in the region as a whole, which may have a lot more to say about the State business tax structure than the city solely.

Edit: here is exactly what I mean.

PA Has Second-Highest State Tax for Corporate HQs in the U.S.

Pennsylvania charges the nation’s second-highest effective state tax rate for corporate headquarters, 23.1%; third-highest for an independent retail store, 22.9%; fifth-highest for a distribution center, 41%; and fourth-lowest for capital-intensive manufacturers, at 4.2%, according to a new report from the Tax Foundation and the auditing firm KMPG LLCanalyzing and comparing effective tax rates for corporate headquarters and manufacturers in all 50 states, and reported by The Philadelphia Inquirer on August 26.

http://www.centercityphila.org/pressroom/ccnews090915.php

[iheartphilly]

Does anyone have job numbers created in our Navy Yard? I know that area is like an island and not connected to Center City, but I'm pretty sure the job growth there is impressive as well as construction of new office space. This is really what is not capture when the media talks about Philly job growth, new office construction, etc. And, it's unfair to characterize Philly that way, especially for those not familiar with the area.

I've personally seen the city/Philly area grow in the past 5 years with all the new residential construction, small tech firm connected to healthcare, health science, and great public spaces developed or improved. We are in an exciting time and at a point where if these trends (e.g., positive employment numbers, number of people moving into the city, etc.) continue, Philly will take off and more of this positive feedback will perpetuate itself.

[summersm343]

Originally Posted by iheartphilly

Does anyone have job numbers created in our Navy Yard? I know that area is like an island and not connected to Center City, but I'm pretty sure the job growth there is impressive as well as construction of new office space. This is really what is not capture when the media talks about Philly job growth, new office construction, etc. And, it's unfair to characterize Philly that way, especially for those not familiar with the area.

I've personally seen the city/Philly area grow in the past 5 years with all the new residential construction, small tech firm connected to healthcare, health science, and great public spaces developed or improved. We are in an exciting time and at a point where if these trends (e.g., positive employment numbers, number of people moving into the city, etc.) continue, Philly will take off and more of this positive feedback will perpetuate itself.

It's easily up to 15,000 by now.

[relnahe]

Originally Posted by McBane

If ever runs for Mayor, he would likely win, and it would be very painful but at least he'd be out of sight after eight years.

No he wouldn't just like Bob Brady and Fattah failed miserably and every time Johnny Doc runs for something he fails too. There is a reason why he didn't run this last cycle and never will.

[1487]

Originally Posted by AbortedWalrus

I am pretty optimistic too, particularly because this particular plan has not only the support of business leaders and civil leaders, but it also has the support of labor leaders. It's flat out shocking when you see unions and construction management essentially trumpeting the same ideas. IBEW, Building and Trades, SEIU, and the Carpenters are on board. Obviously they like any idea that can lead to more construction, but it's a sign that they realize that new construction is only going to happen if the city gets the tax rate straight and can grow the business sector. The plan essentially has the backing of pretty much every constituency in the region.

As you mentioned, it seems like the only person NOT backing it is Clarke, which is a colossal mistake.

what he wants at this point is irrelevant and he doesn't seem to get that. This is a State issue for now. And it will take years to make the necessary changes- if they can even get the support in Harrisburg. Honestly, all the local lobbying is pointless at this stage so I don't get the point of all the press releases and press conferences touting the plan. Who are they preaching to at this point?

[1487]

Originally Posted by Insoluble

I know I said this in the other thread, but I just want to point out again how ridiculous that number is. No one has any idea what the impact on job creation would be from this change. It does sound like it would be a positive change, but I highly doubt it would make as big a difference as they are making it out to be. (Of course those with a vested interest in changing the tax policy in their favor will try to exaggerate its benefits, and it's already been pointed out that the numbers cited in these articles are essentially made up.) Job creation in the city has been going quite strong for the past five or six years. It will probably continue to go strong for a little while regardless of if this gets past or not.



Yes, this 100%. Changing the makeup of city council would have a much greater long term impact on the growth of the city. Clark is definitely one of the worst, but there are plenty of other members of council who continue to perpetuate backwards policies that hold the city back. I'm not going to get all excited about the proposed change to the tax code, but if someone told me there was a good chance for serious turnover at city hall I'd flip. That would be seriously good news for development.

Well lets not overstate the power these people have. I find it interesting when people infer that we "would" be seeing a lot of projects and activity if only we had better politicians which suggests we don't see a lot of activity now. I'm not seeing much evidence that city council actually has much ability to affect the level of development in the city. The zoning code was already changed, the tax abatement has been in place for years and there is national demand for urban living. Those are the facts. Could you see marginally better conditions if you had a pro-development council that only cared about seeing more construction but little else? Possibly. Will you ever see a council like that in a city with so many pressing needs and competing interests? No.

[lsksl]

Originally Posted by 1487

Well lets not overstate the power these people have. I find it interesting when people infer that we "would" be seeing a lot of projects and activity if only we had better politicians which suggests we don't see a lot of activity now. I'm not seeing much evidence that city council actually has much ability to affect the level of development in the city. The zoning code was already changed, the tax abatement has been in place for years and there is national demand for urban living. Those are the facts. Could you see marginally better conditions if you had a pro-development council that only cared about seeing more construction but little else? Possibly. Will you ever see a council like that in a city with so many pressing needs and competing interests? No.

Miami?

[jsbrook]

Originally Posted by 1487

Well lets not overstate the power these people have. I find it interesting when people infer that we "would" be seeing a lot of projects and activity if only we had better politicians which suggests we don't see a lot of activity now. I'm not seeing much evidence that city council actually has much ability to affect the level of development in the city. The zoning code was already changed, the tax abatement has been in place for years and there is national demand for urban living. Those are the facts. Could you see marginally better conditions if you had a pro-development council that only cared about seeing more construction but little else? Possibly. Will you ever see a council like that in a city with so many pressing needs and competing interests? No.

This is really not about construction. Not directly, anyway. Construction is of many types and spurred by many needs: residential, retail, corporate, etc... Notwithstanding buildings like CITC and FMC, we are seeing a largely residential boom. It is apparent when compared to some other cities. The tax policy debate is about encouraging corporate growth and job growth, which yes, can encourage construction of office buildings. As a by-product. We are getting off-topic, though. These debates about tax policy never end well on these forums. People are pretty set in their views about its impact. My personal view is that Pennsylvania and Philadelphia's retrograde tax policies place a significant damper on corporate and job growth in Philly, and I think there's plenty of strong evidence. But it's only indirectly relevant to construction and skyscrapers and what these forums are about. The government will do what it will do and we shall see what happens. We should stop now.

[Insoluble]

Originally Posted by summersm343

I agree we need to change up City Hall, and get more forward thinking politicians in there, but at the same time it's a proven fact that the business tax structure in the city has held back the growth of companies in the city, has made it difficult for small companies to operate and get off of the ground, and the relocation of companies into the city which in turns has impeded job growth.

Great, if it's a proven fact can we cite the evidence for it and stop creating puff pieces with BS numbers having no basis in reality? I'm not disagreeing that the tax code in Philly could be much better. The problem I have is with the borderline propaganda pieces talking about how passing this tax reform will create 80,000 jobs!!!!1. No. It very well could increase job growth, but that number has no basis in reality. Tell me why and how the tax reform will be beneficial instead of tossing BS at me. For example, there was a proposal not that long ago (By councilwoman Quinnones-Sanchez if I remember correctly) to change the balance of the gross receipts tax and tax on net profit. The justification was that one of those taxes disproportionately impacted companies with local Head Quarters and small businesses, while multinational companies could easily weasel out if it (the net profit one). I realize the article in question mentions that taxing property rather than profits places the burden on things that are unable to leave the city, but I'm still not quite seeing how this in itself will encourage businesses to grow and stay here. Will the total tax burden on businesses go down? It doesn't sound like it since they propose balancing revenue loss from the taxes cut with increased property taxes on commercial real estate alone. There will be winners and losers with this proposal, so tell us who's who. Which businesses will gain from this and which ones will lose?

And please don't think I'm targeting this at you summers; I have nothing but the utmost respect for you and realize that you are just the messenger posting this article to the forum so that we can have a discussion about it! The target of my ire is the Philadelphia Growth Coalition and the PBJ for trying to pass this off this fluff to us rather than try to actually explain why they think this will be beneficial. It may be my natural skepticism, but the fact that a coalition

Originally Posted by 1487

Well lets not overstate the power these people have. I find it interesting when people infer that we "would" be seeing a lot of projects and activity if only we had better politicians which suggests we don't see a lot of activity now. I'm not seeing much evidence that city council actually has much ability to affect the level of development in the city. The zoning code was already changed, the tax abatement has been in place for years and there is national demand for urban living. Those are the facts. Could you see marginally better conditions if you had a pro-development council that only cared about seeing more construction but little else? Possibly. Will you ever see a council like that in a city with so many pressing needs and competing interests? No.

Two words: "Councilmanic Prerogative". No doubt there has still been a tremendous amount of development in the city. But when individual council members have the ability to block or change projects based on their own uninformed opinions that is a problem. I have no doubt that, especially outside of Center City, we would be seeing more and better projects if it weren't for certain members of city council. Also, while the new zoning code has been passed, you'll note that large swaths of the city have not been re-zoned yet. Let's get specific. Washington Avenue. Why has that not been re-zoned yet? Several large scale proposals for Washington Ave (especially on the West side of Broad Street) have died or languished because of zoning issues and NIMBYs. These are projects that should have and could have gone through by right if the zoning had been appropriate for the area. The councilman for the district (we all know who this is) has no interest in rezoning because he wants to maintain tight control over what gets developed.