PHILADELPHIA | Highrise Development Thread IX

[giantSwan]

Originally Posted by Outta here

Philly’s city wage tax just turned 75. Here’s its dubious legacy
Three-quarters of a century ago (tomorrow, to be precise), Philadelphia became the first city to implement a local income tax. Since then, the wage tax has been seen as both a major job killer and, in startup circles, a minor consideration. Here's why it's still around — and how some hope to kill it before it turns 100.

Being #2 in some cases may be commendable , like winning the silver medal in your favorite Olympic sport ,
but being 2nd. in this particular event ...... sucks .

I'm not for or against the city wage tax...but how to you explain NYC or other extremely successful cities with wage taxes. I think you need amenities, lifestyle, culture, talent, geography, infrastructure....it's not such one-dimensional argument....

I'd actually argue that since Philly has decided to invest in itself and take care of planning/zoning issues and make improvements to it's infrastructure - it's starting to turn around and attract more world class business (even with the wage tax)

[Philly-Drew]

Originally Posted by giantSwan

I'm not for or against the city wage tax...but how to you explain NYC or other extremely successful cities with wage taxes. I think you need amenities, lifestyle, culture, talent, geography, infrastructure....it's not such one-dimensional argument....

I'd actually argue that since Philly has decided to invest in itself and take care of planning/zoning issues and make improvements to it's infrastructure - it's starting to turn around and attract more world class business (even with the wage tax)

That is a fair argument.

[Philly-Drew]

Originally Posted by summersm343

^^I just want to take the time to say fuck this state. Just when Philly is starting to get going and get off of the ground with it's renaissance, the state law makers still find a way to mess things up. We think the Philadelphia City government is bad... the state government is even worse, and may truly hold Philadelphia back from ever achieving it's full potential.

This could jeopardize some major important developments including the SLS, Gallery redevelopment, Chinatown Eastern Tower, Divine Lorraine redevelopment, 1300 Fairmount, Reading Viaduct trail, among others.

Not to mention the effect it's having on schools and businesses state wide.

I just wish that Gov Wolf could negotiate a fuckin' deal. I voted for the guy, but damn, where is Ed Rendell when you need a deal done. WTF

[UrbanRevival]

Originally Posted by Jayfar

Budget stalemate puts a damper on developers' big plans for Philadelphia | Philadelphia Inquirer

Not that I am in any way defending the tragedy that is Pennsylvania's state government, but I do highly question several developers' claims that a lack of RACP funding will have a significant impact on their development proposals.

Essentially, even if the budget was actually passed in a timely manner, the standard award total, as the article points out, is usually somewhere around 25% of what is initially requested statewide. Clearly, that's a very competitive pot of money, and a great majority of projects will not be funded even when the money is released.

I get that, for example, a very expensive hotel project like SLS needs additional underwriting given the disproportionately high Philadelphia labor costs for construction, but you're telling me that an experienced developer like Dranoff didn't think to have a Plan B? He's certainly no stranger to this process, both in terms of funding major projects and the RACP program itself (see the One Ardmore Place fiasco).

These developers cannot be that clueless or naive to think they'd receive such a robust level state support with no issue. And if there was any potential doubt about their projects being built as initially envisioned without public funds, perhaps they should be much more forthright about this fact with media when these proposals are first introduced to the public, instead of pretending that the rug has been swept out from under their feet many months later.

This just doesn't add up.

[1487]

Originally Posted by UrbanRevival

Not that I am in any way defending the tragedy that is Pennsylvania's state government, but I do highly question several developers' claims that a lack of RACP funding will have a significant impact on their development proposals.

Essentially, even if the budget was actually passed in a timely manner, the standard award total, as the article points out, is usually somewhere around 25% of what is initially requested statewide. Clearly, that's a very competitive pot of money, and a great majority of projects will not be funded even when the money is released.

I get that, for example, a very expensive hotel project like SLS needs additional underwriting given the disproportionately high Philadelphia labor costs for construction, but you're telling me that an experienced developer like Dranoff didn't think to have a Plan B? He's certainly no stranger to this process, both in terms of funding major projects and the RACP program itself (see the One Ardmore Place fiasco).

These developers cannot be that clueless or naive to think they'd receive such a robust level state support with no issue. And if there was any potential doubt about their projects being built as initially envisioned without public funds, perhaps they should be much more forthright about this fact with media when these proposals are first introduced to the public, instead of pretending that the rug has been swept out from under their feet many months later.

This just doesn't add up.

My sentiments exactly.

[1487]

Originally Posted by Outta here

Philly’s city wage tax just turned 75. Here’s its dubious legacy
Three-quarters of a century ago (tomorrow, to be precise), Philadelphia became the first city to implement a local income tax. Since then, the wage tax has been seen as both a major job killer and, in startup circles, a minor consideration. Here's why it's still around — and how some hope to kill it before it turns 100.

Being #2 in some cases may be commendable , like winning the silver medal in your favorite Olympic sport ,
but being 2nd. in this particular event ...... sucks .

The State authorized the wage tax. And the bottom line is if the money wasn't taken in that form other taxes and fees would be higher to compensate. Every city takes in tax revenue, it just takes different forms. People act as if the wage tax didn't exist everything else would remain the same. The state of VA has lower taxes than PA, but you pay a tax on owning a car annually that is based on the valuation of your car. 6 of one, half dozen of another. DE has no sales tax but their top marginal tax rate on income is like 7% vs 3% flat tax in PA.

[jsbrook]

Originally Posted by 1487

The State authorized the wage tax. And the bottom line is if the money wasn't taken in that form other taxes and fees would be higher to compensate. Every city takes in tax revenue, it just takes different forms. People act as if the wage tax didn't exist everything else would remain the same. The state of VA has lower taxes than PA, but you pay a tax on owning a car annually that is based on the valuation of your car. 6 of one, half dozen of another. DE has no sales tax but their top marginal tax rate on income is like 7% vs 3% flat tax in PA.

No one acts like that. There is a huge body of economic research that higher taxes in other forms and lower in wage tax (and taxes like the BIRT) makes a far healthier economy. For one thing, taxes on commercial real estate need to go up disproportionately to residential taxes. In Pennsylvania, that is a problem because of the Uniformity clause in the state constitution. There is bill to amend the constitution to change to more closely mimic other thriving states. With these chuckleheads in our government, who know if or when this will pass or how long it will take. A true discussion on tax policy and its impact on development (a more tenuous and less certain but very real link) is probably beyond the scope of these forums.

[cafeguy]

Is there a map of all of the CMX 5 parcels in Philly that could actually end up housing a skyscraper at one point? ie...not just parking lots but also single or two story buildings that no one would ever fight being demolished?

I'm just curious to know how much the city skyline might change one day and how much longer until the only way to build up is to tear down first.

[1487]

Originally Posted by jsbrook

No one acts like that. There is a huge body of economic research that higher taxes in other forms and lower in wage tax (and taxes like the BIRT) makes a far healthier economy. For one thing, taxes on commercial real estate need to go up disproportionately to residential taxes. In Pennsylvania, that is a problem because of the Uniformity clause in the state constitution. There is bill to amend the constitution to change to more closely mimic other thriving states. With these chuckleheads in our government, who know if or when this will pass or how long it will take. A true discussion on tax policy and its impact on development (a more tenuous and less certain but very real link) is probably beyond the scope of these forums.

well you illustrate my point. The big push now is for a SHIFT in tax burden from wage and income taxes to commercial property taxes. That is essentially what I am saying, you have to replace the revenue in some way. Reducing business income taxes may indeed be smarter, but again we see very little city to city data to get a real idea. What we have now is a coalition that has basically made up job projections based on their hopes and beliefs about how Philly will miraculously grow if this change in enacted. If it works, I'm all for it but at the end of the day SOMEONE is still paying the taxes.

[br323206]

Originally Posted by jsbrook

No one acts like that. There is a huge body of economic research that higher taxes in other forms and lower in wage tax (and taxes like the BIRT) makes a far healthier economy. For one thing, taxes on commercial real estate need to go up disproportionately to residential taxes. In Pennsylvania, that is a problem because of the Uniformity clause in the state constitution. There is bill to amend the constitution to change to more closely mimic other thriving states. With these chuckleheads in our government, who know if or when this will pass or how long it will take. A true discussion on tax policy and its impact on development (a more tenuous and less certain but very real link) is probably beyond the scope of these forums.

I agree that the wage tax is bad for business, but I think this is overstating its effect. It would be more correct to say that there is some economic research that shows that higher taxes in other forms and lower in wage tax can be one contributing factor to a healthier economy.

Taxes are one small cog in the wheel. Much more important are things like the presence of an educated workforce, amenities, access to markets, infrastructure, etc.

[jsbrook]

Originally Posted by br323206

I agree that the wage tax is bad for business, but I think this is overstating its effect. It would be more correct to say that there is some economic research that shows that higher taxes in other forms and lower in wage tax can be one contributing factor to a healthier economy.

Taxes are one small cog in the wheel. Much more important are things like the presence of an educated workforce, amenities, access to markets, infrastructure, etc.

Fair.

[3rd&Brown]

Originally Posted by 1487

well you illustrate my point. The big push now is for a SHIFT in tax burden from wage and income taxes to commercial property taxes. That is essentially what I am saying, you have to replace the revenue in some way. Reducing business income taxes may indeed be smarter, but again we see very little city to city data to get a real idea. What we have now is a coalition that has basically made up job projections based on their hopes and beliefs about how Philly will miraculously grow if this change in enacted. If it works, I'm all for it but at the end of the day SOMEONE is still paying the taxes.

Indeed.

But I think it is also fair to say the balance is off. Philadelphia tends to tax things that can move (i.e. income) in favor of things that can't (property). It also has a bunch of million little regressive taxes (NPT, BPT, etc) that could probably just be eliminated and rolled into another, more straightforward tax (i.e. corporate, property, or income).

It feels like death by a thousand cuts sometimes. I wouldn't be surprised if some of these taxes generated less revenue than they cost to collect/administer.

[summersm343]

Apartment occupancy rates

Riverloft - 96%
The Sterling - 95% (excluding redev floors)
Park Town Place - 75% (excluding redev tower - still in lease up)
The Commonwealth - 97%
AQ Rittenhouse - 74% (still in lease up)
3601 Market - 33% (still in lease up)
The Pepper Building - 98%
Museum Towers - 95%
777 South Broad - 95%
Icon - 95%
St James - 94%
2116 Chestnut - 95%
3737 Chestnut - 57% (still in lease up)
One Franklintown - 98%
The Arch - 98%
1500 Locust - 94%
1835 Arch - 96%
Tower Place - 96%
Edgewater - 98%
The Metropolitan - 96%
Lofts at Logan View - 97%
The Packard - 99%
1900 Arch - 97%
2040 Market - 95%
SouthStar Lofts - 95%
Locust on the Park - 96%
The Granary - 95%
Evo - 94%
The Franklin - 97%
Touraine - 95%

[jsbrook]

For the most part, pretty great. I'm surprised at 3737 Chestnut. I'm NOT surprised at AQ Rittenhouse. Terrible, small floorplans. And I think only studios or 2 bedrooms. No or barely any 1 bedrooms. But what exactly does it mean to be in 'lease up'?

Originally Posted by summersm343

Apartment occupancy rates

Riverloft - 96%
The Sterling - 95% (excluding redev floors)
Park Town Place - 75% (excluding redev tower - still in lease up)
The Commonwealth - 97%
AQ Rittenhouse - 74% (still in lease up)
3601 Market - 33% (still in lease up)
The Pepper Building - 98%
Museum Towers - 95%
777 South Broad - 95%
Icon - 95%
St James - 94%
2116 Chestnut - 95%
3737 Chestnut - 57% (still in lease up)
One Franklintown - 98%
The Arch - 98%
1500 Locust - 94%
1835 Arch - 96%
Tower Place - 96%
Edgewater - 98%
The Metropolitan - 96%
Lofts at Logan View - 97%
The Packard - 99%
1900 Arch - 97%
2040 Market - 95%
SouthStar Lofts - 95%
Locust on the Park - 96%
The Granary - 95%
Evo - 94%
The Franklin - 97%
Touraine - 95%

[Sgalla04]

Originally Posted by jsbrook

For the most part, pretty great. I'm surprised at 3737 Chestnut. I'm NOT surprised at AQ Rittenhouse. Terrible, small floorplans. And I think only studios or 2 bedrooms. No or barely any 1 bedrooms. But what exactly does it mean to be in 'lease up'?

It's incredible the demand for studios right now. Pearl Properties is converting the Latham Hotel into 100% studio units. I live at 1700 Chestnut (above Nordstrom Rack), it's also a Pearl Property and almost half the units are studios. Our 1 bedroom doesn't seem that small when we have a huge amenities floor and so close to everything in Rittenhouse Sq. but some of the studios at the Lathem are going to be 350 sq ft!

[Urbanity]

Originally Posted by jsbrook

For the most part, pretty great. I'm surprised at 3737 Chestnut. I'm NOT surprised at AQ Rittenhouse. Terrible, small floorplans. And I think only studios or 2 bedrooms. No or barely any 1 bedrooms. But what exactly does it mean to be in 'lease up'?

LEASE UP: The time period for a newly available property to attract tenants and reach stabilized occupancy.

[iheartphilly]

Originally Posted by Sgalla04

It's incredible the demand for studios right now. Pearl Properties is converting the Latham Hotel into 100% studio units. I live at 1700 Chestnut (above Nordstrom Rack), it's also a Pearl Property and almost half the units are studios. Our 1 bedroom doesn't seem that small when we have a huge amenities floor and so close to everything in Rittenhouse Sq. but some of the studios at the Lathem are going to be 350 sq ft!

Basically the size of a hotel room.

[jsbrook]

Originally Posted by Sgalla04

It's incredible the demand for studios right now. Pearl Properties is converting the Latham Hotel into 100% studio units. I live at 1700 Chestnut (above Nordstrom Rack), it's also a Pearl Property and almost half the units are studios. Our 1 bedroom doesn't seem that small when we have a huge amenities floor and so close to everything in Rittenhouse Sq. but some of the studios at the Lathem are going to be 350 sq ft!

The size of some of these new places definitely wouldn't work for me, but I'm glad if there's a market for it! I have several friends who looked at AQ Rittenhouse and went elsewhere because they were put off by the size. seems AQ Rittenhouse does now seem to have some 1 bedrooms, though.

http://www.aqrittenhouse.com/Floor-plans.aspx

I think they were previously dubbing the 1 bedrooms with dens as 2 bedrooms and then realized the den was unjustifiably small to label as a second bedroom and they had no 1 bedroom floorplans so changed it.

[hammersklavier]

Originally Posted by cafeguy

Is there a map of all of the CMX 5 parcels in Philly that could actually end up housing a skyscraper at one point? ie...not just parking lots but also single or two story buildings that no one would ever fight being demolished?

I'm just curious to know how much the city skyline might change one day and how much longer until the only way to build up is to tear down first.

http://www.phila.gov/map

Click on "Land Use" and zoom in until you can see colors. That's the city's official zoning map.

[Xiubee]

Originally Posted by summersm343

Apartment occupancy rates

Riverloft - 96%
The Sterling - 95% (excluding redev floors)
Park Town Place - 75% (excluding redev tower - still in lease up)
The Commonwealth - 97%
AQ Rittenhouse - 74% (still in lease up)
3601 Market - 33% (still in lease up)
The Pepper Building - 98%
Museum Towers - 95%
777 South Broad - 95%
Icon - 95%
St James - 94%
2116 Chestnut - 95%
3737 Chestnut - 57% (still in lease up)
One Franklintown - 98%
The Arch - 98%
1500 Locust - 94%
1835 Arch - 96%
Tower Place - 96%
Edgewater - 98%
The Metropolitan - 96%
Lofts at Logan View - 97%
The Packard - 99%
1900 Arch - 97%
2040 Market - 95%
SouthStar Lofts - 95%
Locust on the Park - 96%
The Granary - 95%
Evo - 94%
The Franklin - 97%
Touraine - 95%

Just curious, what's the source for these numbers?