PHILADELPHIA | Highrise Development Thread IX

[summersm343]

Originally Posted by Knight Hospitaller

This is what I remember: http://articles.philly.com/2016-01-19/bu...nsfer-partners-ellis-preserve-east-texas. Not much going to be left here for all of the "commitment" to Philly.

It is sad, but I think Sunoco is a bit of a dying company. Not a huge loss, but it does speak a lot to the poor business climate in Philadelphia and Pennsylvania. It's amazing elected officials in the state and city government can't see this. Philadelphia could be really strong if we had some politicians with a vision beyond making their locale neighborhood constituents happy and start thinking of the city at a larger, cosmopolitan and international level, instead of a small town level.

[iheartphilly]

Originally Posted by summersm343

It is sad, but I think Sunoco is a bit of a dying company. Not a huge loss, but it does speak a lot to the poor business climate in Philadelphia and Pennsylvania. It's amazing elected officials in the state and city government can't see this. Philadelphia could be really strong if we had some politicians with a vision beyond making their locale neighborhood constituents happy and start thinking of the city at a larger, cosmopolitan and international level, instead of a small town level.

It could be a lot worse. Our port/container business and Liquefied Natural Gas (LNG) industry is doing pretty well. The Navy Yard has a lot of new companies and older companies expanding its workforce. A lot of that doesn't get capture because it is not in Center City. I've been to quite a number of cities across the U.S. and we have a vibrant and diverse city. We definitely won't go by way of Detroit.

[summersm343]

Originally Posted by iheartphilly

It could be a lot worse. Our port/container business and Liquefied Natural Gas (LNG) industry is doing pretty well. The Navy Yard has a lot of new companies and older companies expanding its workforce. A lot of that doesn't get capture because it is not in Center City. I've been to quite a number of cities across the U.S. and we have a vibrant and diverse city. We definitely won't go by way of Detroit.

Oh, I'm definitely not concerned that we will, but I would like to see our city grow a little faster. Better business taxes relate to more companies, more jobs, more people, more construction, etc. Only the elected officials can change that, but it seems they're more worried about such minor, trivial things than actually growing the job/employment base of our city and state.

[jsbrook]

Originally Posted by summersm343

It is sad, but I think Sunoco is a bit of a dying company. Not a huge loss, but it does speak a lot to the poor business climate in Philadelphia and Pennsylvania. It's amazing elected officials in the state and city government can't see this. Philadelphia could be really strong if we had some politicians with a vision beyond making their locale neighborhood constituents happy and start thinking of the city at a larger, cosmopolitan and international level, instead of a small town level.

Not to get too political here (and it's definitely not a partisan issue), but our state and local governments have held us down more than most anything else over the years. The governments did a terrible job of adjusting to Philadelphia's decline as a manufacturing hub and adopted a series of counterproductive policies that stifled development, growth and Philadelphia's ability to thrive in a new economy. Much of this was precipitated or motivated by pandering, myopic power grabs and moves designed to keep power consolidated in council and council members in office. We are only just now recovering with more sound policies being pursued at the city and even at the state level in the last decade or so. End rant.

[Larry King]

end of the day.. Philly will grow as a jobs center mostly because the talent and top executives want to live here rather than us out-bidding camden or slashing our taxes to beat conshy. There's some incremental changes to be made but we'll never out-suburb the suburbs on this sort of thing.

[1487]

Originally Posted by summersm343

Oh, I'm definitely not concerned that we will, but I would like to see our city grow a little faster. Better business taxes relate to more companies, more jobs, more people, more construction, etc. Only the elected officials can change that, but it seems they're more worried about such minor, trivial things than actually growing the job/employment base of our city and state.

These are not easy things to solve, although people speak as if they are. It's hard for me to believe that folks honestly believe taxes are "high" simply because uncaring local politicians just love high taxes. If that helps you sleep at night stick to that story. There are lot of competing interests and needs in play here. I don't think anyone is against low taxes in Philly or anywhere else- its all about how you get there and what is going to be sacrificed in the near term to make it happen.

[1487]

continued growth and the Navy Yard

http://www.bizjournals.com/philadelphia/...dds-jobs-in-2015-axalta-adaptimmune.html

[jsbrook]

Originally Posted by 1487

These are not easy things to solve, although people speak as if they are. It's hard for me to believe that folks honestly believe taxes are "high" simply because uncaring local politicians just love high taxes. If that helps you sleep at night stick to that story. There are lot of competing interests and needs in play here. I don't think anyone is against low taxes in Philly or anywhere else- its all about how you get there and what is going to be sacrificed in the near term to make it happen.

No one said that. But many, cumulative bad decisions were made over decades - some motivated by self-interest - and it's a very hard bell to unring. Though we are making progress. Self-interest does continue to motivate bad decisions still. It's not a problem unique to Philly but is pronounced here.

[PhillySteaks]

1.) Patience with PREIT. I think you forget that Macerich now makes up 50% of ownership and they have a much much much better track record than PREIT. PREITs expertise comes from knowing the local market - Macerich is the expert on urban mall renewal and has the tenant relations to boot. Acquiring properties near by is a very common strategy. You can't sell space to your tenants when there is Cash 4 Gold stores across the street. I'm sorry you just can't. Check Cashing & Gold stores are a DEATH KNELL for any landlord looking for respectable tenants. They usually signal the death of a retail corridor.

2.) Lending is too tight for a a pure speculative office build in philly. The means do not justify the ends - at least for anything resembling class A or trophy. The reason being is that your debt expense would be astronomical. No bank will lend to build a 900k SF tower without a single tenant. That's just crazy risky and regulation is very high these days - banks are on defense. Until rent growth occurs or vacancy seriously drops to super low numbers (yes, lower than today) and there is a somewhat decent pipeline of major credit tenants I wouldn't expect that to change. Any new tower will be a build to suit or mixed use.

3.) Without getting political Phillys taxes are because its a MAJOR metro. There are a butt ton of costs. That being said there is also a ton slippage occuring as a result of the patronage and corruption that the city is just oh so famous for. Costs could easily come down if things were run more efficiently (or if the Rev. Dept actually did their jobs). Also 30% of our annual operating fund goes to pensions...sooo there is that too which has to be paid one way or another. Doesn't help when you are looking to make real investments in your city. Many major metros have this problem though.


All in all I would expect growth in these areas to remain stable. Population growth is a great thing. The city has some real headwinds in front of it, but they are all solvable in my opinion. It's just a matter of getting the right politicians in office to make the right/hard decisions.

[Cro Burnham]

Originally Posted by PhillySteaks

You can't sell space to your tenants when there is Cash 4 Gold stores across the street. I'm sorry you just can't. Check Cashing & Gold stores are a DEATH KNELL for . . . . respectable tenants.

Well, other than Wendy's.

[PhillySteaks]

Originally Posted by Cro Burnham

Well, other than Wendy's.

Personally speaking...Wendy's is my Achilles heel.

[1487]

Originally Posted by PhillySteaks

Personally speaking...Wendy's is my Achilles heel.

Hopefully you are joking. No one smart enough to be on this forum should ever patronize a wendy's. It's not for people like us obviously. This is a wendy's partron free zone. Intellectuals and high salary types- my kind of people.

[Busy Bee]

Eleventh commandment "Thou shall not speak ill of Wendy's"

[Busy Bee]

Side note, a spicy chicken sounds mighty good right now.

[1487]

Originally Posted by PhillySteaks

1.) Patience with PREIT. I think you forget that Macerich now makes up 50% of ownership and they have a much much much better track record than PREIT. PREITs expertise comes from knowing the local market - Macerich is the expert on urban mall renewal and has the tenant relations to boot. Acquiring properties near by is a very common strategy. You can't sell space to your tenants when there is Cash 4 Gold stores across the street. I'm sorry you just can't. Check Cashing & Gold stores are a DEATH KNELL for any landlord looking for respectable tenants. They usually signal the death of a retail corridor.

2.) Lending is too tight for a a pure speculative office build in philly. The means do not justify the ends - at least for anything resembling class A or trophy. The reason being is that your debt expense would be astronomical. No bank will lend to build a 900k SF tower without a single tenant. That's just crazy risky and regulation is very high these days - banks are on defense. Until rent growth occurs or vacancy seriously drops to super low numbers (yes, lower than today) and there is a somewhat decent pipeline of major credit tenants I wouldn't expect that to change. Any new tower will be a build to suit or mixed use.

3.) Without getting political Phillys taxes are because its a MAJOR metro. There are a butt ton of costs. That being said there is also a ton slippage occuring as a result of the patronage and corruption that the city is just oh so famous for. Costs could easily come down if things were run more efficiently (or if the Rev. Dept actually did their jobs). Also 30% of our annual operating fund goes to pensions...sooo there is that too which has to be paid one way or another. Doesn't help when you are looking to make real investments in your city. Many major metros have this problem though.


All in all I would expect growth in these areas to remain stable. Population growth is a great thing. The city has some real headwinds in front of it, but they are all solvable in my opinion. It's just a matter of getting the right politicians in office to make the right/hard decisions.

I think its interesting that people think discussing municipal finance is "political" discussion. That's not the case. It is nice to think that the tax burden is primarily based on greedy and incompetent politicians but that's unlikely to be the case. The reality is harsher and more complicated than that. And simply swapping politicians out doesn't change the underlying issues. Philly is also at a major disadvantage because it's a county- many other large cities are within a larger county. It would also help if PA covered Philly court costs as they are supposed to but they refuse to accept that financial burden- so Philly taxpayers pick up the tab. A host of issues faced here are related to state governance and this is no interest in Harrisburg in leveling the playing field so that Philly can lower its tax burden.

Politicians support taxes when there are people who depend on or like that tax dollars pay for. Which is why cutting stuff is always tricky business. Plenty of people want Philly to cut taxes, but the list of people who can name what services and local infrastructure they are willing to be scaled back is much shorter. Hence the public outcry when Nutter proposed closing and limiting hours in libraries during the recession.

[PhillySteaks]

Originally Posted by 1487

I think its interesting that people think discussing municipal finance is "political" discussion. That's not the case. It is nice to think that the tax burden is primarily based on greedy and incompetent politicians but that's unlikely to be the case. The reality is harsher and more complicated than that. And simply swapping politicians out doesn't change the underlying issues. Philly is also at a major disadvantage because it's a county- many other large cities are within a larger county. It would also help if PA covered Philly court costs as they are supposed to but they refuse to accept that financial burden- so Philly taxpayers pick up the tab. A host of issues faced here are related to state governance and this is no interest in Harrisburg in leveling the playing field so that Philly can lower its tax burden.

Politicians support taxes when there are people who depend on or like that tax dollars pay for. Which is why cutting stuff is always tricky business. Plenty of people want Philly to cut taxes, but the list of people who can name what services and local infrastructure they are willing to be scaled back is much shorter. Hence the public outcry when Nutter proposed closing and limiting hours in libraries during the recession.

Thank you for enlightening us all. The reason I had to post "without getting too political" was to try to prevent the follow up with a bunch of opinion responses not dissimilar to the one you just posted. It seems...I have failed.

[Knight Hospitaller]

Originally Posted by 1487

Hopefully you are joking. No one smart enough to be on this forum should ever patronize a wendy's. It's not for people like us obviously. This is a wendy's partron free zone. Intellectuals and high salary types- my kind of people.

Frosties know no class distinctions.

[BenKatzPhillytoParis]

Originally Posted by PhillySteaks

Thank you for enlightening us all. The reason I had to post "without getting too political" was to try to prevent the follow up with a bunch of opinion responses not dissimilar to the one you just posted. It seems...I have failed.

You both stated opinions. And they both make some valuable points. I don't see why your opinion is more valid than 1487's or why you gotta come with 'tude there.

Anyway, yes—we'd all like to see lower taxes. Revenue dept could do better job, though they made many strides during the Nutter administration. Pensions are certainly an issue. But that is pretty intractable. So is cutting other services, plus whatever the city contributes to the school district's budget. 1487 is absolutely right on state governance not giving us a fair shake. Nevertheless, I think important progress will continue to happen on the margins of these important issues, for example in the form of:

-public schools improving in particular cases due to neighborhood involvement, and overall slightly due to good management by Hite

-perhaps marginal reductions or simplification of taxes affecting businesses in the city

-continued improvements at convention center and related improvements in tourism, especially international, and hospitality

-overall increasing competitiveness of city due to population growth and talent sticking around for quality of life and related demographic changes

I could imagine the revenue picture improving over the long term if wealthier people keep moving into the city. That way, perhaps we could enact deeper tax cuts without cutting anything.

[summersm343]

Originally Posted by 1487

continued growth and the Navy Yard

http://www.bizjournals.com/philadelphia/...dds-jobs-in-2015-axalta-adaptimmune.html

Navy Yard adds companies, jobs to its roster

For the last 15 years, it seems that the Philadelphia Navy Yard has marked one milestone after another and last year was no different.

The Navy Yard added 12 new businesses and more than 500 new employees to its roster. While that alone is significant, taken on a cumulative basis, the Navy Yard now has 152 companies and 12,000 people working from it, according to the Philadelphia Industrial Development Corp.

This year is expected to be another positive one for the Navy Yard as more jobs, investment and companies make announcements to move in and continue to solidify its position as an official office submarket of Philadelphia. It has 7.5 million square feet of office, industrial and manufacturing space.

Liberty Property Trust and Synterra Partners have spent $550 million developing 1.58 million square feet of space at the site. The development team finished building 201 Rouse Blvd., a four-story, 80,050-square-foot building for Franklin Square Capital Partners; built another 45,000-square-foot building for WuXi AppTec, Inc., an existing tenant; broke ground on 1200 Intrepid Ave., a 91,901-square-foot office building; and opened the Central Green.

Among other highlights from last year include Axalta Coating Systems announcing it is locating operations in new 175,000-square-foot building and Adaptimmune Therapeutics moving its headquarters into a 47,400 square foot property.

One of the challenges to the Navy Yard is mass transit access and PIDC has temporarily solved this with shuttles, which saw ridership swell to 314,000 rides last year. PIDC continues to explore getting the Broad Street Line extended to the Navy Yard as well as adding additional shuttles.

http://www.bizjournals.com/philadelphia/...dds-jobs-in-2015-axalta-adaptimmune.html

[summersm343]

Neighborhoods group leader: Too much housing on waterfront site plan

The chairman of a Delaware River neighborhoods association is raising concerns about a developer's apparent plans for the South Philadelphia waterfront site formerly owned by Sheet Metal Workers Local 19.

Matt Ruben said at a meeting of the Central Delaware Advocacy Group Thursday that a plan on the website of K4 Associates for what appears to be a cluster of residential high-rises on the 18-acre parcel would introduce too much new housing to the area too quickly.

On the website are details for the first of the planned towers, a 34-story building with a projected start date between April and June of this year.

K4 acquired the development site from the Sheet Metal Workers local in March of last year. K4 chief executive officer Jeffery Kozero did not return a call seeking comment.

Read more at http://www.philly.com/philly/business/re...front_site_plan.html#tsWIS0DKpJdz4C0V.99