PHILADELPHIA | Schuylkill Yards Future Phases | 1,095 - 375 FT | 70 - 28 FLOORS

[jsbrook]

Are any of the buildings specifically dependent on Dechert as an anchor tenant? Which buildings again has Brandywine announced an intention to break ground on soon?

[jsbrook]

Originally Posted by eixample

Dechert will never leave the city. Big law firms wouldn't do that. It's disgusting that they were ever allowed to use the tax credits and would be doubly so if they could use them again.

It certainly was not disgusting for them to use them initially and the served their purpose as far as getting the Schuylkill area going. Using them a second time to stay in the same area is much more suspect.

[allovertown]

Originally Posted by jsbrook

It certainly was not disgusting for them to use them initially and the served their purpose as far as getting the Schuylkill area going. Using them a second time to stay in the same area is much more suspect.

Agreed. I mean sure, they weren't leaving anyway, but they qualified for the tax credits and took a bit of a chance by leaving the central business district to a very unproven area when they did. If you don't want a company like Dechert to use the tax credits, word the law so they can't use them.

But totally agree that if they receive credits again 20 years later to move a block, that would be a major issue and if actually legal should be a loophole that is immediately closed.

[Capsule F]

Originally Posted by eixample

Dechert was a law firm already in center city when they moved to the Cira Center. Big law firms like Dechert are never going to move out of the general downtown areas of the city they are located in. They didn't need an incentive to stay. I am anti-corporate tax welfare in general (not all incentives - some are appropriate, like TIFs on brownfield sites), but they in no way should be used for existing businesses that are never going to leave.

That would be true if all things were equal. Unfortunately other cesspool states use them all the time to great effect, so we now have to use them. Its half the reason firms move to Texas, or NJ locally.

[City Wide]

Originally Posted by allovertown

Agreed. I mean sure, they weren't leaving anyway, but they qualified for the tax credits and took a bit of a chance by leaving the central business district to a very unproven area when they did. If you don't want a company like Dechert to use the tax credits, word the law so they can't use them.

But totally agree that if they receive credits again 20 years later to move a block, that would be a major issue and if actually legal should be a loophole that is immediately closed.

After Dechert and other CC outfits used the tax credits almost 20 years ago I believe the City and the State passed or tried to pass laws to prevent that from happening in the future. The present tax credits might be based on a different set of underlaying laws, or maybe the City and State weren't successful in making a change.

Its clear that getting well established firms to move across the river wasn't the intent of law/tax credits, but I've learned its not to be expected that our lawyer/law makers will do a very good job of protecting the publics interest. I think that far and away most people, including most landlords, think using tax credits in this way is mistaken.

[iheartphilly]

^
Did FMC take the credit?

[jsbrook]

Originally Posted by allovertown

Agreed. I mean sure, they weren't leaving anyway, but they qualified for the tax credits and took a bit of a chance by leaving the central business district to a very unproven area when they did. If you don't want a company like Dechert to use the tax credits, word the law so they can't use them.

But totally agree that if they receive credits again 20 years later to move a block, that would be a major issue and if actually legal should be a loophole that is immediately closed.

I think they actually might have left in 2001/2003. It was a different time and a different city. At this time, I think there's no chance they'll move the lawyers out to the suburbs. Good luck hiring talented junior and mid-level associates if they do. It doesn't even seem like this is a deal breaker to go to that building. It looks like this is about moving 150-200 admin over. That's what the article actually says. There are 400 employees. The article is poorly written, but it seems to me like all the lawyers and some admin will be moving to the new buildings and this is just about whether the rest of the admin will go. Morgan Lewis has had admin in different buildings. Some firms have had a lot of admin functions offsite centrally located in some cheap state. Should probably just call their bluff and see what they do.

[Nova08]

Originally Posted by Capsule F

That would be true if all things were equal. Unfortunately other cesspool states use them all the time to great effect, so we now have to use them. Its half the reason firms move to Texas, or NJ locally.

This. You can agree or disagree with the incentives, the principle of them and the loopholes, but there are 10+ other cities and states lined up to try a poach these types of companies.

[iheartphilly]

^^^
Right, on principle it shouldn't be allowed, but in reality and practice, it probably will...

[allovertown]

Originally Posted by Nova08

This. You can agree or disagree with the incentives, the principle of them and the loopholes, but there are 10+ other cities and states lined up to try a poach these types of companies.

Yea I get it. It's like unilaterally disarming. You're not doing any good if you're the only city taking a stand and in the end you're just shooting yourself in the foot.

It really highlights the need for some federal laws to start to reign this in and standardize this in some way. Otherwise, this is just gonna get worse as states and municipalities compete against each other in a race to the bottom.

[eixample]

Originally Posted by allovertown

It really highlights the need for some federal laws to start to reign this in and standardize this in some way. Otherwise, this is just gonna get worse as states and municipalities compete against each other in a race to the bottom.

I agree it's a difficult problem to address. One of the downsides of our federal system. The same problems arise with right to work laws and other laws weakening union rights.

The Cira Center opened in roughly 2006. It wasn't that long ago. I know it might have contributed to the rise of buildings on the other side of the river, but maybe if we hadn't gotten the Cira Center then, we'd have gotten another building on the center city side of the river. Or maybe if we used the tax cut money to lower the wage tax across the board we'd have more jobs in the city now than we do. In any case, I'm extremely suspect of these "existing companies making empty threats they are going to leave for a tax break" situations. While they might not be illegal (although in NJ some of the Norcross related relocations seemed to cross the line), they are repugnant on a moral level (to me, I know most of you disagree).

[Insoluble]

Before we get too mired in a "Philadelphia tax burden" discussion, let's all remember that for the past decade or so Philadelphia has been adding jobs just as fast or faster than it's been adding population:
https://data.bls.gov/timeseries/SMU4...de_graphs=true

Even if you narrow in on the "Professional and Business Services" sector we've been adding jobs very steadily for at least a decade now. I hope they call Dechert's bluff. Recent history has shown the city will be just fine even if they do shoot themselves in the foot and decide to leave.

[PHL10]

From Saturday (the sun wasn't hitting the building so it's hard to see how bold that red is):

[arkitect13]

Any news on brandywines 2 towers for... JFK was it? Anyways any news, was their groundbreaking?

[allovertown]

Originally Posted by arkitect13

Any news on brandywines 2 towers for... JFK was it? Anyways any news, was their groundbreaking?

They have their own thread: http://forum.skyscraperpage.com/showthread.php?t=230614

No groundbreaking yet, but one or both is expected to start in 2020. Both have permits and are ready to go. Unclear when exactly they'll start though.

[iheartphilly]

^
If Dechart law firm can take the KOZ credit and leasing negotiations get finalized, it will materialize.

[SPM2856]

Note that Dechert wouldn't see their overall expenses on space go down---they'd just be paying more for the rent, which means the tax benefits flow to the developer who can now build and what the public gets for the tax expenditure is another modern office building, and the city's modern office supply increases.

[Jawnadelphia]

https://www.instagram.com/p/B9PGRYyD2Bu/

[PhillyDreamsReturns]

Looks like rich mahogany.

[City Wide]

Originally Posted by SPM2856

Note that Dechert wouldn't see their overall expenses on space go down---they'd just be paying more for the rent, which means the tax benefits flow to the developer who can now build and what the public gets for the tax expenditure is another modern office building, and the city's modern office supply increases.

The possible tax breaks go to the company moving in, not directly to the buildings owner.* Unless Dechert's space needs have greatly changed, these tax benefits are probably the only reason they'd be moving, IMO. I like many people doubt the wisdom of tax breaks in general but I imagine only a few are in favor of using them to just move the same players around on a slightly larger board. If anything they should be used to bribe out of area companies into moving into the City. But that's not the way corporate socialism works.

*unless the owner is taking advantage of the newer capital gains deferment set up.