Philadelphia 2019 An in-depth review of the key issues facing the Bucks, Chester, Delaware, Montgomery and Philadelphia counties’ economies featuring the exclusive insights of prominent industry leaders
City of Philadelphia: Philadelphia has become a hub for innovation. Communities citywide are seeing growth and attracting businesses. This city of neighborhoods is as walkable as ever, and residents and tourists alike are attracted to the history and cultural offerings. Philadelphia is no longer being overlooked as people pass from Washington, D.C., to New York City. It is now a destination in its own right.
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City of Brotherly Love: Built on the foundation of tolerance, Philadelphia has grown into a powerful urban center with a diverse economy and population The city of Philadelphia encompasses 142.71 square miles, 8.53 square miles of which are water. It sits along the Delaware River to the east, with the Schuylkill River running through the city to the west. Known for its tasty cheesesteaks, passionate sports fans and the Declaration of Independence, the City of Brotherly Love has a lot to offer residents and businesses alike. With a growing food and beverage scene that boasts some of the best restaurants in the country, housing prices that are more affordable than most other major cities on the Northeast corridor and plenty of museums, walking trails and transportation options, Philadelphia is proving itself to be a city that has it all. Rich history While Philadelphia is renowned for being the site where our founding fathers signed the Declaration of Independence and for serving as the nation’s first capital, its history started much earlier than that. Philadelphia was originally home to the Lenape (Delaware) Indians, but with the Europeans’ arrival in the early 17th century, they were forced to move west and north. 76 | Invest: Philadelphia 2019 | CITY OF PHILADELPHIA
The Dutch settled the Delaware Valley in 1623 and considered the entire area part of their New Netherland colony. In 1638, Swedish settlers arrived and built a fort in present-day Wilmington, Delaware. Soon they spread throughout the entire Delaware Valley. In 1664, the valley fell under English rule and remained there until 1682, when William Penn established Philadelphia as a city through the Charter of 1701. Penn hoped that Philadelphia would be a rural town, but with its accessibility by river and growing population, there was no stopping it from becoming a bustling city. It became an important trading center in the 1750s. Benjamin Franklin is credited with leading Philadelphia to the high standards it is still known for today, introducing new industries and growing its economy. From 1790 to 1800, Philadelphia served as the temporary capital of the United States while the District of Columbia was under construction. In 1793, it saw the largest yellow fever epidemic in U.S. history. This epidemic killed between 4,000 and 5,000 people, or 10 percent of the population. At the time, Philadelphia was the largest city in the U.S.
CITY OF PHILADELPHIA OVERVIEW
Greg DeShields Executive Director – PHL Diversity, A Business Development Division of the Philadelphia Convention and Visitor’s Bureau Philadelphia has continued to evolve in its development as a city. The city values and supports the significance of its diversity and multiculturalism. We are a city of neighborhoods, and we are easily accessible. As a visitor you can walk from Chinatown to South Philly and have multiple cultural experiences along the way. The city, uniquely, has a chief diversity and inclusion officer, which allows us to prioritize the significance and importance of that as an economic engine.
The 1800s saw an increase in industrial jobs and manufacturing companies in Philadelphia. These industries dominated the economy for much of the later half of the century and into the 1900s, as they did in much of the Northeast. From 1880 to about 1920, the industrial districts in Philadelphia enjoyed a diversity in activity that was unparalleled in the history of manufacturing. Counting all the plants, mills and factories in Philadelphia, there were upwards of 300 categories of industrial activity happening in the city. The population continued to grow as these industries boomed. Philadelphia was dubbed the “Workshop of the World,” as a little bit of everything was made in the city and surrounding suburbs. The city’s port system played an integral role in the success of these industries. By the 1980s, most of the factories and manufacturing had left the city. Philadelphia struggled with finding jobs and industries to replace those lost. Today, Philadelphia has a strong, diversified economy that is particularly robust in healthcare and education but boasts offerings across all sectors.
In November 2018, legislation was introduced to city council that would enable the city to enter a purchasing power agreement with a renewable energy developer to purchase solar power. The city has a commitment to have 100 percent of its energy come from renewable sources by 2030 — a lofty goal that would be easier to reach with this agreement. If approved (at the time of print, it had not yet been voted on), a 70-megawatt solar facility would be built in Adams County. This facility would be the largest in Pennsylvania by a wide margin, and the city would be able to purchase energy at a fixed, competitive price for 20 years. Also in November 2018, Philadelphia was a winning city in the Bloomberg American Cities Climate Challenge spearheaded by Bloomberg Philanthropies. This challenge is a $70 million program that helps 20 cities in their climate change and sustainability efforts. Philadelphia was chosen because of the city’s ambitious clean action plans to reduce carbon emissions and air pollution. As a winning city, Philadelphia is accepted into a twoyear acceleration program that will provide new resources to put initiatives into effect.
Sustainability Sustainability is a huge focus for the city of Philadelphia. Recently, the Office of Transportation and Infrastructure Systems (OTIS) went through a name change; now OTIS stands for Office of Transportation, Infrastructure and Sustainability. Philadelphia’s sustainability efforts focus largely on accessible food and drinking water, healthy air indoors and outdoors, clean and efficient energy, climateprepared communities, zero waste solutions, access to safe and efficient public transportation and more.
Innovation hub University City is the easternmost neighborhood in West Philadelphia. Situated directly across from Center City over the Schuylkill River, this neighborhood is home to some of the city’s — and the country’s — leading academic institutions and medical centers. A hotbed for development, University City is becoming an extension of the downtown area on the other side of the river. With a diverse demographic of residents and with job opportunities increasing, this is a neighborhood to watch.
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CITY OF PHILADELPHIA OVERVIEW
Saul Behar Vice President and General Counsel – University City Science Center
The University City Science Center has been undergoing a process of transformation over the last few years. We have been around for about 55 years, and historically we have been known for the real estate side of what we do. The Science Center was established in 1963 as part of an urban redevelopment project, and over those 55 years we have had a mandate to oversee the development of Market Street between 34th and 39th Streets. To date, we have overseen the development of 15 buildings along that corridor. According to U.S. Census data, University City’s population grew almost 3 percent between 2000 and 2014. The 2.4-square-mile neighborhood has become known for not only its outstanding “meds and eds” population but also its emerging science and innovation spheres. Approximately 79,692 jobs are supported by the neighborhood, spanning a wide range of industries. University City is considered one of the leading employment hubs in the region, with over 33,000 jobs per square mile. According to a report by the University City District (UCD), in 2018 the neighborhood counted 53,884 residents with a median age between 22 and 24. There were five universities and colleges and four hospitals, with 43,267 college and university students and 85,048 hospital inpatient admissions as well. Since 2016 there has been almost 1.5 million square feet of real estate development completed. Philadelphia as a whole is attracting millennials in droves, and University City is no exception. According to the same report by UCD, the number of millenials is up 13 percent since 2000. The population in the neighborhood in general has increased by 11 percent since 2010. Innovation is a huge focus for Philadelphia as a whole. “Philadelphia has a growing innovation movement, and we wanted to be a part of that,” Lisha Davis, head of Vanguard’s Innovation Studio, told Invest:. “It made sense for us to open our
Innovation Studio in Center City because it’s an economic hub for the region and is in proximity to academic institutions, the entrepreneurial community and transportation hubs, among other attributes. We are excited to be a part of the city in the innovation space.” University City is a particularly bustling innovation hub. With places like Pennovation, uCity Science Center and Cambridge Innovation Center, University City is exporting innovation in a variety of industries and is considered a pacesetter across the country. “We are seeing opportunities come from places like Pennovation and other incubators that are helping to foster new companies in the city,” Ken Wellar, managing partner at Rittenhouse Realty Advisors, told Invest:. “We have an active involvement in University City, so we are seeing that growth firsthand. As these startups begin to grow and create more jobs, they attract more people, which can only benefit the area. It is something that will draw more international investors.” Development is happening in droves in University City, as well. The $3.5 billion Schuylkill Yards project, overseen by Brandywine Realty Trust in conjunction with Drexel University, is one of the largest development projects the city has seen in years. Drexel Square — the first phase, which broke ground in 2017 — is a 1.3-acre park near 30th Street Station. ( )
Since 2016, there has been almost 1.5 million square feet of real estate development completed.
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CITY OF PHILADELPHIA INTERVIEW
Resurgence How the Greater Northeast Philadelphia Chamber of Commerce is promoting Northeast Philadelphia as a great place to do business and experience history, art and culture
Pamela Henshall President – Greater Northeast Philadelphia Chamber of Commerce What role does the chamber play in representing the Greater Northeast area? The Greater Northeast Philadelphia Chamber of Commerce is focused on representing the region and is the single voice for business. Our goal is to serve our region positively with a focus on marketing, programming and events to strengthen the engagement among all industries. We lead our regional businesses and community by establishing relationships to create competitive advantages for sustainable economic development, provide advocacy by representing our members in city and state political affairs and connect leaders, developing a coalition to execute the community’s vision. What makes Northeast Philadelphia unique? Economically Northeast Philadelphia has the highest concentration of multigenerational family-owned businesses, manufacturing and companies selling their products and services locally, nationally and internationally within the city. To support these companies and their leaders, we offer a Harvard University Leadership Academy Development Program offered through Holy Family University, and our Executive Alliance Council provides roundtable discussions and a network for CEOs facing similar regional challenges. What is one of the biggest challenges the chamber is combating today? As baby boomers continue to face the challenges of caring for their aging parents, the healthcare industry is grappling with the problem of developing a stable workforce to support the increasing senior population. Our chamber is working with the State of Pennsylvania to offer a grant program to train entry-level healthcare
support staff. In 2019, we will launch our apprenticeship program focusing on healthcare with the goal of expanding into additional industries and professions. What is your outlook for Northeast Philadelphia in 2019? Northeast Philadelphia has seen a resurgence in recognition of our rich history, arts and culture. The region has a deep history, and efforts are underway to promote tourism. Activities and events include a bus tour of the Kings Highway (otherwise known as Frankford Avenue, the road that the British used to get into Philadelphia), Northeast Philly Art on the Avenue in Mayfair, pop-up beer gardens and food truck festivals and a Deco on the Delaware (a 1920s-inspired event located at Glen Foerd each summer). Also new for 2018, Welcome America selected Pennypack on the Delaware as its first Northeast Philadelphia celebration location.
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Matt Bergheiser President University City District
How does University City District contribute to the growth of the neighborhood? Our work in the University City District parallels the growth and transformation of this neighborhood. We are a partner of the anchor institutions here in the academic and medical fields, as well as developers, businesses and residential communities. What we are most proud of is the investment in public space and civic infrastructure. We create value horizontally so that developers can create value vertically. We’re builders of public spaces, taking spaces that were once concrete super blocks and instead creating parks and walkable spaces. We want to shape welcoming and creative spaces in West Philadelphia for residents, commuters and visitors to enjoy. Philadelphia is all about neighborhoods. University City is a neighborhood where people come to work and learn, and we are now adding more places for them to live and play. All of these aspects are important to the growth of the neighborhood and ultimately the city. How does University City impact the rest of the city? The economic future of the region can be shaped here in University City. If Philadelphia is going to continue to grow, to reverse old trends and private sector job loss, a lot of that progress is going to happen in this neighborhood. This growth is going to happen because of the intellectual assets of our universities and health systems, and it takes talent to fuel that. Talent has choices, so we are working hard to make sure that the exceptional talent Philadelphia needs chooses to be in University City. We are setting the stage. The next phase for us is to take the intellectual discoveries and the research that is happening here, to take the knowledge being generated at our academic and medical institutions and translate that into jobgenerating commercial ventures. Commercial ventures need space to grow. That is what Schuylkill Yards is about, and that is what uCity Square is about. University City has room for growth.
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( ) Overall, Schuylkill Yards will be a 14-acre project that will transform University City. The project consists of open space, retail, residential, office, lab and innovation space. The idea is to connect University City with the rest of Philadelphia while making West Philly a destination for travelers and visitors. Drexel Square opened in the fall of 2018, and the estimated completion date for the entire project is 2036. “We have a big project in the works that we are calling One uCity Square, which is on the site of the old University City High School,” Joseph Reagan, Jr., Northeast Region executive senior vice president at Wexford Science and Technology, told Invest:. “We are bringing in North South connectivity that was lost previously and adding new streets in, as well as a park. The idea is to connect the residential community to the retail and office community that it was previously cut off from. That is a project that we are very excited about.” Living monument Philadelphia’s original Navy Yard was not where it stands today. Originally on Front Street at Federal Street in what is now the Pennsport neighborhood, it was the first naval shipyard in the United States. Now an industrial park, the current Navy Yard is a hub for business and industry. The United States Navy ceased most of its operations at the Philadelphia Navy Yard in the 1990s. Today, this historic living monument sits below the stadiums on the water and is home to about 150 companies with nearly 13,000 people employed there. Companies include Urban Outfitters, Tasty Baking Company, GlaxoSmithKline, Adaptimmune, WuXi, FS Investments, Philly Shipyard and more. Since 2000, more than $1 billion has been invested into the Navy Yard, which has the reputation of being the region’s most dynamic business campus. PIDC is the master developer for the campus and has overseen the transformation of the Navy Yard from active naval ship base to innovation hotbed. With 6.3 miles of waterfront space, the Navy Yard is a unique part of the city. The whole living monument contains about 20 acres of space that includes historical buildings, new construction, 13 LEED-certified buildings and industrial spaces. Currently the Navy Yard lacks a residential element; however, there are hotels on the campus. The city’s ever-expanding sustainability initiatives do not stop at the blue gates that welcome employees
CITY OF PHILADELPHIA OVERVIEW
and visitors to the Navy Yard. Due to the subway line stopping at the stadiums and not continuing to the yard, there is a shuttle that brings employees to the business campus so they don’t have to drive. According to a report by PIDC, 10 percent of employees take the shuttle to the campus instead of driving. Green energies were used during the construction and renovation of many buildings, and adaptive reuse has been the trend for the navy-built buildings that have been converted into office space. Currently, the big development project happening in the Navy Yard is the redesign of the Broad Street Entrance and Langley Avenue. The three-phase project addresses a huge focus for the Navy Yard: maintaining the safety and efficiency of access to the Navy Yard by bicycles, pedestrians and vehicles. The first phase was completed in 2017 and consisted of relocating utilities — some that were over 100 years old — along Broad Street. In the summer of 2018 phase two was completed, which included moving the entrance to Broad Street where it meets Langley Avenue from its former location at the River Basin Wall intersection at League Island Boulevard, as well as the reconstruction of Langley Avenue. Phase two was a $13.4 million project in conjunction with PennDOT. The third phase will see a reconstruction of Broad Street from Langley Avenue to Intrepid Avenue. The improvements are supposed to be dramatic, as the 130-year-old timber platform that supports a majority of Broad Street in that area will be replaced, in addition to all four vehicle lanes being restored, as well as a two-lane bike path and an elevated walkway. At the time of print, construction had not yet started.
Philadelphia is well known as the birthplace of democracy, but it is also the birthplace of the U.S. Navy.
The Northeast While still very much a part of the city of Philadelphia, the Northeast can seem like a different city at times. This neighborhood holds a sizeable percentage of the city’s overall population, with over 425,000 people calling the area home. The Northeast covers about 50.8 square miles, making it almost half of the city in terms
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Dennis Davin Secretary, Department of Community and Economic Development Commonwealth of Pennsylvania
What advantages does Philadelphia offer to residents and businesses? When you take the four major cities along the Northeast Corridor — Boston, New York, Philadelphia and Washington, D.C .— Philadelphia is set up perfectly. The cost of living is so low compared to these other places. What that means is those making $50,000 or $60,000 have more disposable income so they can live better. They can go out to eat more, they frequent brew pubs and shops more and they’re in a better position to fuel the local economy. Philadelphia has an abundance of those offerings for its residents and visitors, which makes it an ideal city in which to live. That is why we are seeing more and more people relocate from places like New York. It’s a vibrant and affordable place for people to live. Another significant advantage that Philadelphia has over many other cities is its port infrastructure, which ensures the city can reliably and quickly move goods and products to market to give our businesses a global competitive advantage. Why is community development so important to this administration? Part of what the Wolf administration and our department get involved in is things like looking at downtown centers and main street opportunities and funding those opportunities. Some of these are projects that happen outside of Philadelphia in some of the suburban communities, and some are in the city itself. We are involved with street-face opportunities, helping with façade improvements for businesses so an area is attractive, distinctive and a place where workers and customers want to be. We help develop trail systems. We help with accessibility and infrastructure improvements. We do this because Governor Wolf and this administration understand that community development and economic development go hand in hand.
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of area, and is home to companies like Parx Casino and auto parts manufacturer Cordone. Until 2017, when it was demolished after ceasing production in 2015, the Nabisco Biscuit Company factory was an iconic landmark for the region. In the 1980s, due to demographic differences, the Northeast section of Philadelphia wanted to be considered a separate county. The secessionist movement was led by State Senator Frank Salvatore. He introduced a bill that, if passed, would have made the Northeast its own county. Many residents in the Northeast did not agree with paying the same high city taxes that the rest of the residents paid, especially since the Northeast was split fairly evenly between Republican and Democrats, while Center City and the surrounding area tended to swing blue. The bill was never passed. As the overall economy of the city began to stabilize under Governor Ed Rendell’s leadership, the discontent in the Northeast subsided. Some of the city’s largest real estate for office space lies in the Northeast. In March 2018, the former site of the Budd Co. railcar plant sold for $18 million. The 138acre vacant warehouse property was sold to Commercial Development Corp., a developer from St. Louis, Missouri, that specializes in the adaptive reuse of industrial sites. Like the rest of Philadelphia, the Northeast had a large manufacturing and industrial industry that migrated away from the city in the 1980s. With that departure, there were vacant warehouses and unused spaces that have yet to be transformed. In the Northeast, Commercial plans to develop three warehouse spaces, totalling 1.6 million square feet, that will be used for office space. That is an area larger than the Comcast Tower and Liberty One, two of the dominating towers in the Philadelphia skyline. The city has worked to make the Northeast more accessible by public transportation, with one of the main projects discussed in the Aviation and Transportation chapter (see page 83). By making the Northeast more accessible by public transit, the Boulevard becomes safer for pedestrians and the neighborhood opens up to more jobs to residents. Looking ahead With its diversified economy and rich history, Philadelphia keeps attracting residents and visitors in droves. Areas like Fishtown, Northern Liberties and Grays Ferry continue to see both new residents and new development. America’s first capital city still stands strong today, with major companies and startups thriving across the region. From river to river, one can find a little bit of everything in Philadelphia.