PHILADELPHIA | Highrise Development Thread IX

[hammersklavier]

Originally Posted by PhilliesPhan

When I was in what remains of The Gallery about an hour ago, I saw a sign advertising the renovations that The Gallery will undergo. When I looked at a section of the advertisement, one picture displayed the rendering complete with three towers attached to the top! Could this be an indication that the towers on top of The Gallery might actually be constructed?

Well...that depends.

I can tell you this much: the Gallery I tower pad isn't going to be built on. Yet. That's because the design process on major projects usually takes about a year, and Gallery I renovations are (supposedly) ready to go. Since we haven't seen a tower proposal, and a tower there would trigger design review -- which means it must be made public -- whether or not it's on the drawing boards, it isn't part of the project's initial phase.

That said, there is still an off chance they might be considering building on one of Gallery II's pads. That project is still a year away, and that project has one literally right across the street that proves you can get financing for a rental tower on Market East.

I say an "off" chance because PREIT doesn't typically do residential, and they haven't partnered with anybody who does do residential. Still, a year's a fair distance away -- still plenty of time to complete the design and permitting processes for a Gallery II tower before the Gallery I renovations are finished.

I would hope they would; I think it would be successful and lead to development on the other two tower pads.

[Skyscraper.Phanatic]

I think Gallery towers are only a matter of time. And I think it is wishful thinking that we will get anything that looks like the Hyde Hotels on the previously mentioned posting's link. They were in Miami, Fort Lauderdale and L.A. We could only hope to get something that looks that good here on South Broad St. knowing who the developer is... Time will tell.

[Outta here]

The Philadelphia City Wage Tax -- A "Special Case" Income Tax
Local Governance
Tags:
Government Structure, Taxes
Philadelphia's unique Wage Tax has long complicated tax reform efforts. What is different, and why is it a problem?

(July 2003) No examination of income taxes in Pennsylvania - or the quest for local tax reform - is complete without a closer look at Philadelphia’s city wage tax. Historically, it’s been a key stumbling block. Why? IssuesPA sought answers.

Why is Philadelphia different?

Local income taxes in Pennsylvania are fairly straightforward - a flat percentage, usually 1%, levied on wages and salaries. Philadelphia, however, imposes a local income tax that’s taken on a controversial life of its own for city residents and suburban residents who work in the city.

A 1939 state law - The Sterling Act - gave Philadelphia authority to impose the wage tax as a temporary measure to help cope financially with The Depression. Since then, its role has grown significantly. In Fiscal 2003, Philadelphia expected to collect 52% of all local tax revenues from the wage tax.

A wage tax in major cities isn’t common. Only four of the nation’s 10 largest cities levy a wage tax, and virtually no major cities have enacted a new wage tax in the last 40 years. No city relies on a wage tax like Philadelphia does.

Philadelphia’s city government levies the tax on city residents and non-city residents working in the city. City residents pay 4.5% on all wages and salaries earned regardless of their job location. Non-residents pay 3.9127% on wages and salaries they earn within the city limits. Since Philadelphia’s wage tax applies to workers living in the city as well as those commuting to the city, it’s actually a regional tax. However, because Philadelphia retains all wage tax proceeds for its own use, non-residents receive for their tax dollars only the benefit of services provided within the city limits.

What are the real implications of this tax?

The state law establishing the city wage tax gives Philadelphia’s government first claim on wages earned in the city. In 2000, this removed $7.9 billion from the earned income base of the four suburban counties surrounding Philadelphia - Bucks, Chester, Delaware and Montgomery. This represents $314 million or 25.4 percent of wage tax revenues collected by Philadelphia. According to Philadelphia’s Department of Revenue, 68.2% of non-resident taxes came from wages earned by residents of Philadelphia’s Pennsylvania suburbs, with the rest from non-residents living elsewhere, primarily New Jersey.

Many believe the wage tax is responsible for a steady, undesirable exodus of jobs and people from Philadelphia. Robert Inman, Professor of Finance and Economics at the Wharton School of the University of Pennsylvania, estimated Philadelphia lost 207,000 jobs over the past 30 years solely due to increases in the city’s wage tax rate.

PS ; Second only to Bridgeport Conn .

[cafeguy]

http://mobile.philly.com/beta?wss=/philly/business/real_estate/commercial&id=363375861

This is kinda crazy right? $354 Million purchase? The IRS pays 32.1 million a year? I suppose those numbers make sense, but it just seems like SOOOO much money for such a small building. At these prices, it just seems like it would have made more sense of the IRS to build something in the burbs.

[Arch+Eng]

Originally Posted by cafeguy

http://mobile.philly.com/beta?wss=/philly/business/real_estate/commercial&id=363375861

This is kinda crazy right? $354 Million purchase? The IRS pays 32.1 million a year? I suppose those numbers make sense, but it just seems like SOOOO much money for such a small building. At these prices, it just seems like it would have made more sense of the IRS to build something in the burbs.

$350 Million for a whole city block right out side of the core doesn't seem too out of line to me.
Now why the IRS didn't just decide to buy the building and have it paid off in ~12 years or so. I do not know. They have a 20 Year lease, seems like that would make the most sense.

[summersm343]

Originally Posted by cafeguy

http://mobile.philly.com/beta?wss=/philly/business/real_estate/commercial&id=363375861

This is kinda crazy right? $354 Million purchase? The IRS pays 32.1 million a year? I suppose those numbers make sense, but it just seems like SOOOO much money for such a small building. At these prices, it just seems like it would have made more sense of the IRS to build something in the burbs.

It is not a small building at all though. It is 867,000 square feet 100% leased. That's the size of a 700 foot skyscraper. This is a MASSIVE building. The price definitely makes sense.

[kingtut]

This investment by a Korean Investment firm has got to be one on the largest capital investment by a foreign firm in Philadelphia

[hammersklavier]

Originally Posted by cafeguy

http://mobile.philly.com/beta?wss=/philly/business/real_estate/commercial&id=363375861

This is kinda crazy right? $354 Million purchase? The IRS pays 32.1 million a year? I suppose those numbers make sense, but it just seems like SOOOO much money for such a small building. At these prices, it just seems like it would have made more sense of the IRS to build something in the burbs.

It's not small at all, though. Au contraire: it's enormous. Don't forget, this Post Office building was basically built as a giant sorting and warehousing complex, back in the days when most mail moved by train.

Paying that much moolah for this building seems like a fair bargain.

[Knight Hospitaller]

Originally Posted by summersm343

That's the size of a 700 foot skyscraper.

Just for an IRS branch office. That's quite an illustration of the immensity of the Federal tax apparatus.

[br323206]

Originally Posted by Knight Hospitaller

Just for an IRS branch office. That's quite an illustration of the immensity of the Federal tax apparatus.

It's not "just" a branch office though. It's one of only ten service centers in the entire country where the tax forms actually go to be filed. I've heard that is is by far the largest, though I can't confirm that.

[Knight Hospitaller]

Originally Posted by br323206

It's not "just" a branch office though. It's one of only ten service centers in the entire country where the tax forms actually go to be filed. I've heard that is is by far the largest, though I can't confirm that.

I'm not exactly sure of their role, because PA residents send their returns to Hartford, CT.

[jsbrook]

Outta Here, I hate the wage tax as much or more than anyone. And think it, along with other poor tax policy, does act as a stranglehold on development and job growth in Philly. But why are you copying text from a 2003 article. Those rates are no longer accurate. They are lower now and a push to decrease the wage tax and achieve tax reform generally is finally starting to gain traction.

[kilbride102]

Don't know if this is old news and just new to me but I ran across a fb page "Old images of Philadelphia" lots of great shots from 1930s and up. Market street near 30th St station with the El still there, moyamensing prison at 10the and reed, subway contruction photos. Good way to kill some time.

[mja]

Originally Posted by Knight Hospitaller

I'm not exactly sure of their role, because PA residents send their returns to Hartford, CT.

Once upon a time, when right out of college, I worked at this branch when it was located on Roosevelt Blvd. It's been a long time, but that office, or rather, those offices, do a ton of different work. I worked in underreporting, which was only one dept out of many. We'd go through tax returns that computers had flagged with math that didn't work (usually through human error) and try to resolve the issues. Sometimes it was something minor and we closed out the case. Sometimes people owed more taxes and we sent out a notice. Sometimes they owed less and we cut a check. We did this for a huge chunk of the country as I recall.

[ChezCre]

A sweet view of the skyline looking south from the top of the Divine Lorraine Hotel.

[IMG]http://[url=https://flic.kr/p/Cvzwcg][/url]divine loraine by Christopher Buonomo, on Flickr

[Outta here]

Originally Posted by jsbrook

Outta Here, I hate the wage tax as much or more than anyone. And think it, along with other poor tax policy, does act as a stranglehold on development and job growth in Philly. But why are you copying text from a 2003 article. Those rates are no longer accurate. They are lower now and a push to decrease the wage tax and achieve tax reform generally is finally starting to gain traction.

Umm , my title for the article was , " Is this part of the problem " . I did not read any other article ( recent or otherwise )
that stood as a correction to this one , although I suspect there may be dozens of corrections or up dates to this particular
article .
The part about it that begged me to ask is , whether it is current or 12 years old , the fact of the matter is , more than
207,000 jobs were lost probably in large part due to the second largest wage tax in the nation . Not being a statistician
I can only assume a large portion of those jobs were for decent middle and upper middle class positions ...... Maybe even
a gaggle of six figure career slots .
It may than be safe to assume , they were " head of household " types that contained two , three or even four other
family members ........ Thus accounting for a loss of hundreds of thousands of citizens .

If you know the ( rates are lower now ) maybe you can also explain why the city still counts on more than 50% of it's tax
revenue from the city wage tax ??

I know things are beginning to " get better " but , it has been a slow and painful process that has lasted longer than it
should have ...... And yes , it is a number of policies that have dulled the spot light on Philly . Hopefully that will change
for the better too .

Sorry if most of my comments , reports and ideas are Neanderthaloid , but your just going to have to live with it .......
........................ Happy frigging New Year .

[McBane]

Originally Posted by cafeguy

http://mobile.philly.com/beta?wss=/philly/business/real_estate/commercial&id=363375861

This is kinda crazy right? $354 Million purchase? The IRS pays 32.1 million a year? I suppose those numbers make sense, but it just seems like SOOOO much money for such a small building. At these prices, it just seems like it would have made more sense of the IRS to build something in the burbs.

Proceeds from the sale will pay off the $177.4 million mortgage remaining on its nearby Cira Centre South parking garage. The sale was among $395.5 million in transactions Brandywine announced Wednesday, including properties in King of Prussia, Wilmington, and Carlsbad, Calif.

This to me is the most important paragraph of the story, and I'm surprised no one's mentioned it.

So here's what we know and/or have speculated:

1. Rumors that Brandywine is wooing Dupont or Chemours

2. Rumors that Brandywine is aiming to build the city's tallest at the Cira complex

3. Rumors that Brandywine is working on a project that not even Summers knows more about (which is consistent with the foreman's description of the project in the post above as being kept under tight wraps)

And now they've unloaded $400 million in properties? Gee, why is all that cash be needed??? Something's a brewing but what?

[kingtut]

Would like to add one more possibility to McBane 's list of reasons for Brandywines shedding of real-estate for cash .They got to have a strong commitment by a large corporation to build office space . University City is one of the fastest growing tech centers in the county now with two great engineering schools side by side combined with unparalleled access to high speed rail to N.Y.C. and D.C. Intuitively I'm thinking GE.GE rejected Atlanta and Dallas , they want to remain in the N.E. and are very serious about leaving Connecticut .

[StreetsDept]

Hey guys!

Had the incredible opportunity to go to the top of the Comcast Center last night, and I took a ton of photos as the sun set. Thought that might be of interest to some of y'all!

Check out all the photos on my blog here: http://streetsdept.com/2015/12/29/the-view-from-the-top-of-the-comcast-center/

[Cro Burnham]

Originally Posted by McBane

This to me is the most important paragraph of the story, and I'm surprised no one's mentioned it.

So here's what we know and/or have speculated:

1. Rumors that Brandywine is wooing Dupont or Chemours

I love the other two points, but I can't see Brandywine staking $100s of millions on Chemours, a spin-off legally engineered to shield the rest of DuPont assets from billions in potential environmental liabilities. I mean is seems like that entity is designed to fail. It'd be like wooing an AIG HQ after the 2008 collapse.

Now, this GE idea is fascinating. I wonder if any other tech giants are looking at University City?