PHILADELPHIA | Highrise Development Thread IX

[3rd&Brown]

also, the sleeping giant in the metro is fin tech.

essentially all of the major banks in nyc have moved their IT departments to northern delaware....chase, bank of america, capital one, black rock, etc. the people who work in these companies are not typical "back office" workers. they're highly educated ph.d.'s. banks have essentially become tech companies. i guarantee you there are a lot of ideas brewing in the heads of those people, and my sense is, as someone who's parents live in an area where many of these transplants are moving (Southwestern Delaware County), that by and large they like it here. especially after moving from the nyc metro where their property tax bill (there) is their entire mortgage here. the schools are quite good, the cost of living low-ish, and the amenities of the area very high.

one of these people is going to create the next google or amazon. and they're going to do it in this area.

[Urbanthusiat]

Philly is well positioned for long-term success and the big movers and shakers (i.e. national real estate investment companies and office users) are realizing it more and more and I have little reason to believe that won’t continue. That’s why in the last year we’ve seen Durst, Nightengale, Thor, etc. enter the market. There’s a ton of potential for Philly to poach small companies and people from NYC, because more and more people are realizing you can get 90% of the same things (at a more comfortable scale) for 50% of the cost. Philly will “make it” in a 21st century economy. In the last year the city added about 24k jobs, which is 43% of the total jobs added in the MSA. There will be more towers built, eventually...I mostly agree that anything less than 600 feet would be disappointing at 8th and Market.

[Nova08]

All good points. My post was not meant to imply that Philadelphia will not ever attract new homegrown companies or companies from outside the area. I was implying that if the 8th & Market lot was to get off the ground in 1-3 years, I have a tough time believing that we'd find the commercial tenant to command a 700 footer.

[jsbrook]

Originally Posted by Nova08

All good points. My post was not meant to imply that Philadelphia will not ever attract new homegrown companies or companies from outside the area. I was implying that if the 8th & Market lot was to get off the ground in 1-3 years, I have a tough time believing that we'd find the commercial tenant to command a 700 footer.

I'm sure I will get panned for this as it's in close proximity to wealth, but make the damn thing a Federal Opportunity and Koz Zone to get things moving. If they really want to see it built. It's the hole in the donut that is Center City revitalization.

[iheartphilly]

^
What are the stipulations for a Federal Zone or KOZ? And if it can be done for 8th and Market, who wants to score political points for doing it. One can then tout good paying jobs were brought into the city...construction projects begets more jobs, etc.

As I have said before, it is hard enough to attract an HQ or sizable outpost to the city because we have not just competition outside of this metro area, but that we have established places outside of Philly like Conshy, Radnor, Malvern, Exton, West Chester, Camden, Wilmington to name a few, that for whatever reasons are attractive to big businesses. So when they shop to re-locate, they are not just looking in the city.

[jsbrook]

Originally Posted by iheartphilly

^
What are the stipulations for a Federal Zone or KOZ? And if it can be done for 8th and Market, who wants to score political points for doing it. One can then tout good paying jobs were brought into the city...construction projects begets more jobs, etc.

As I have said before, it is hard enough to attract an HQ or sizable outpost to the city because we have not just competition outside of this metro area, but that we have established places outside of Philly like Conshy, Radnor, Malvern, Exton, West Chester, Camden, Wilmington to name a few, that for whatever reasons are attractive to big businesses. So when they shop to re-locate, they are not just looking in the city.

They're both supposed to be for "distressed areas", but I think how that is defined is pretty loose, and it's mostly a matter of getting government buy-in and selling the benefits of investment in that area. https://www.irs.gov/pub/irs-drop/reg-115420-18.pdf KOZ zones are a little bit looser, I believe. A federal opportunity zone needs to have poverty rates of at least 20 percent or median family incomes of no more than 80 percent of statewide or metropolitan area family income. If that is satisfied, the governor has almost complete discretion to designate it subject to a cap of 25%, i.e. can designate up to 25% of the census tracks in the state meeting those criteria. https://dced.pa.gov/programs-funding/federal-funding-opportunities/qualified-opportunity-zones/ I'm not sure whether East Market/Chinatown area would qualify or not, but it's worth looking into it. Philly's median household income is $41,449. As of 2013, anyway, Chinatown looks to meet the poverty metric, coming in at 23.9% http://media.philly.com/storage/special_projects/income_and_poverty_in_the_philadelphia_region.html

[skyscraper]

I wonder how many larger companies in Philadelphia have offices split up into several different builidngs instead of having them all under one roof, as Comcast has had? Or even spread throughout one building but not contiguously? If there were a spec office building, like 1300 Market, some of these companies could consolidate there, which would leave lots of smaller office areas that smaller companies coudl take up because rents would probably go down. Then occupancy rates would increase, and cause the need for another large office building; when they hit around 90% in a market, that's when you build.
Just a thought.

[iheartphilly]

Originally Posted by jsbrook

They're both supposed to be for "distressed areas", but I think how that is defined is pretty loose, and it's mostly a matter of getting government buy-in and selling the benefits of investment in that area. https://www.irs.gov/pub/irs-drop/reg-115420-18.pdf KOZ zones are a little bit looser, I believe. A federal opportunity zone needs to have poverty rates of at least 20 percent or median family incomes of no more than 80 percent of statewide or metropolitan area family income. If that is satisfied, the governor has almost complete discretion to designate it subject to a cap of 25%, i.e. can designate up to 25% of the census tracks in the state meeting those criteria. https://dced.pa.gov/programs-funding/federal-funding-opportunities/qualified-opportunity-zones/ I'm not sure whether East Market/Chinatown area would qualify or not, but it's worth looking into it. Philly's median household income is $41,449. As of 2013, anyway, Chinatown looks to meet the poverty metric, coming in at 23.9% http://media.philly.com/storage/special_projects/income_and_poverty_in_the_philadelphia_region.html

Thanks, JSBrook. I'm just wondering when they draw up the boundaries for the Federal Op Zone or KOZ, how far they have to stretch the boundaries to meet the criteria? I think it is more suspect if they just went with a few blocks here and there and it covers say 8th and Market, rather than fanning it out to be more representative. Companies paying market rate rent would not be happy because it seems unfair so maybe other stipulations such as if you are a start-up and not an established business yet, or if your revenues are below a certain amount, you would qualify as a tenant there. I just don't know and I'm just speculating here. However, I think when they designated Mantua for the Federal Op Zone, that section of the city covered many city blocks in each direction that are impoverished.

I think Market East probably not with the apartments that came online, I'm pretty certain the folks renting there make well above 41K. Chinatown, maybe, since lot of seniors live there on fixed incomes, and the rents there or condos for sale are a bit less compared to say Logan Circle or Fairmount Sections.

[Jayfar]

Originally Posted by iheartphilly

Thanks, JSBrook. I'm just wondering when they draw up the boundaries for the Federal Op Zone or KOZ, how far they have to stretch the boundaries to meet the criteria?

The federal Opportunity Zones are designated strictly on Census Tract boundaries. I could be wrong, but I believe PA has already nominated the full number allowed.

This snippet from NYT article from last year is relevant:

The new tax law provision plays to that sweet spot. It instructs governors in each state and territory, along with the mayor of the District of Columbia, to designate Opportunity Zones from a pool of low-income, high-poverty census tracts, subject to certification by the Treasury secretary. States cannot nominate all their qualifying tracts for that status — they are limited to only a quarter of eligible tracts.

https://www.nytimes.com/2018/01/29/business/tax-bill-economic-recovery-opportunity-zones.html

[jsbrook]

Originally Posted by Jayfar

The federal Opportunity Zones are designated strictly on Census Tract boundaries. I could be wrong, but I believe PA has already nominated the full number allowed.

This snippet from NYT article from last year is relevant:

The new tax law provision plays to that sweet spot. It instructs governors in each state and territory, along with the mayor of the District of Columbia, to designate Opportunity Zones from a pool of low-income, high-poverty census tracts, subject to certification by the Treasury secretary. States cannot nominate all their qualifying tracts for that status — they are limited to only a quarter of eligible tracts.

https://www.nytimes.com/2018/01/29/business/tax-bill-economic-recovery-opportunity-zones.html

Is it a one-time deal? Once the initial nominations have been made, that's it? The program is over with no possibility of later additions after a period?

[Jayfar]

Originally Posted by jsbrook

Is it a one-time deal? Once the initial nominations have been made, that's it? The program is over with no possibility of later additions after a period?

That's my understanding. States were allowed to apply for an extension to make their submissions, but I believe each state would submit everything in one batch.

Of course future congressional action could expand it.

[McBane]

One could argue that the corner of 8th and Market is distressed, having been vacant for close to 4 decades and is therefore a good candidate for KOZ status. On the other hand, that's no guarantee to get thing going. The Cira complex and Schuylkill Yards are KOZ zones and, after what 20 years(?), there's two buildings to show for it? And how much of that space is a result of tenants playing musical offices vs. actual, real growth or moves from outside the region?

I'm no expert in KOZ, but I'd like to see it tiered with the tax benefits increasing based on geography. Companies based in the city should be awarded a very modest tax benefit while companies from outside the region/country entirely should be given very generous tax benefits. Somewhere in between, the program can offer tax savings to companies based in the PA suburbs as well as DE and NJ.

I'm not really a fan of tax breaks but frankly, I don't see the city's leaders implementing a city-wide plan to reduce taxes, ease burdensome regulations, and make the city more business friendly. Growth from outside the region, will likely rely on tax giveaways.

[summersm343]

This is interesting. I wonder what this is about. Found this while surfing the web. 1700 looks to be 8 floors, and 1726-50 looks to be 20 floors

1700 Germantown Ave



and 1726-50 Germantown ave on the back of the site


https://www.flow.gives/development.html

[summersm343]

Also found this. Looks to be 12 floors tall. Unsure if this is the plan there or not.

300 N Columbus Blvd



https://www.flow.gives/

[summersm343]

Also curious, but it seems like a 12-13 story multifamily building is now being considered as a part of the 1401 S Columbus Blvd project.











https://www.nria.net/investors-content-summary/2018/12/9/update-on-1401-s-columbus

[mcgrath618]

Originally Posted by summersm343

This is interesting. I wonder what this is about. Found this while surfing the web. 1700 looks to be 8 floors, and 1726-50 looks to be 20 floors

1700 Germantown Ave



and 1726-50 Germantown ave on the back of the site


https://www.flow.gives/development.html

Wow. 1726 Germantown Ave looks amazing. THAT is how you do glass architecture.
Interesting company too. It seems like they not only own the parcels they plan for, but design in-house too. Very holistic.

Normally I would make a thread for this but seeing as I've heard nothing about it on the news or seen it anywhere in city documentation I think we should wait. Sometimes firms like to show off what they CAN do, rather than what they WILL do.

Still, if anyone can find out more I would love to hear it.

[summersm343]

Platinum Corridor - West Philly

Future potential University Place office buildings. This is an ambitious plan, and would be incredible if it were to happen.



https://www.upaphila.com/

[mcgrath618]

Originally Posted by summersm343

Platinum Corridor - West Philly

Future potential University Place office buildings. This is an ambitious plan, and would be incredible if it were to happen.



https://www.upaphila.com/

Oh wow. That's huge. Awesome.

[jsbrook]

3.0 University Place is happening sooner rather than later, and there has been a slight redesign. Groundbreaking by the end of this year. Ambitious plan. Would be great if it all gets off the ground. Aren't those plots for buildings 7 and 8 already earmarked for Ucity Square or is that one block over?

[mcgrath618]

Originally Posted by jsbrook

3.0 University Place is happening sooner rather than later, and there has been a slight redesign. Groundbreaking by the end of this year. Ambitious plan. Would be great if it all gets off the ground. Aren't those plots for buildings 7 and 8 already earmarked for Ucity Square or is that one block over?

That's the next block over. This development implies that they tear down those god awful townhomes. No complaints here.