Clean and safe streets. More joy. And certainly a new mayor who hasn’t checked.
That’s what Philadelphia needs to boost its nascent economic recovery, business leaders said last week at a downtown conference.
Real estate developers, store owners and tenants, civic organizations and lobbyists swapped stories at the Union League of Philadelphia at an event hosted by CCD and the Central Philadelphia Development Corp. — and rolled their eyes at what they see as a lack of leadership in city government.
Not in the bedroom? Mayor Jim Kenney, who loomed large in his absence.
“We have a rudderless ship,” said James Pearlstein, chairman of Pearl Properties, a real estate investment and development company.
“Every store on Walnut Street has a security guard,” he said. “Why? There are a lot more violent and petty crimes that could easily be dealt with.”
The Center City District, a business leadership and lobbying organization, has increased its security guards and bike patrols to help and is also meeting with local police officials.
“We need leadership; we need the streets to be clean and safe. We need people to want to come visit us,” said Paige Jaffe, real estate broker and general manager of JLL’s retail leasing practice in the Greater Philadelphia area.
“I have two young children, and my family and I live here downtown. My kids go to public school and my friends out of town ask me, ‘How could I do this? ‘ “If it’s clean and safe, people feel comfortable coming here and living here.”
The city is feeling the ripple effect of Kenney’s lame administration — Kenney’s term ends in 2024 — and his now infamous comments after the July 4 Ben Franklin Parkway shooting.
“I wait for something bad to happen all the time. I’ll be happy when I’m not around, when I’m not mayor, and I can enjoy some things,” Kenney said, which critics said was effective in quitting his job early.
Business leaders want the next mayor to leave behind the Philadelphia shrugs and woe to me is Kenney.
“We need someone who’s smiling,” MSC estate agent Jacob Cooper said to nods and laughter from the audience of about 100 people.
“We are very proud of Philly; we need more joy,” he said. “It will bring in outside capital and visitors who aren’t from Philadelphia to come and spend money. So I look forward to meeting all the candidates” for mayor.
Businessmen were looking to adopt a change-making attitude that would build on encouraging signs in the local economy. Of 1,856 storefronts in the Downtown Central District, about 17% are vacant in June, up from 30% in January 2021, according to Prema Gupta, vice president of the Downtown District.
Half of the 174 new storefronts opened since 2020 are restaurants, and 42 more are expected to open. The city’s “streeteries” are offering 68% more outdoor seating than before the pandemic, even with the return of indoor seating, according to the latest data from the Center City District.
And yet, there is much to do.
“We still have the highest percentage of poverty among major cities at 24%,” said John Usdan, managing director of Midwood Investment & Development. “We need a plan to solve this problem, to invest in social infrastructure.”
Without addressing homelessness, education and the regressive tax system, “you can’t move forward,” he said, citing Houston’s decision to move the city’s entire homeless population from 25,000 in newly built houses.
Office workers are a speed bump towards full recovery; about half of those who worked in Center City did not return. Walnut Street is booming, fueled by foot traffic from Arts Avenue to Rittenhouse, but Market Street, with its mostly empty towers, is quiet.
“The biggest hurdle to recovery is office inventory,” Usdan said.
Additionally, many Philadelphia offices are old and expensive to convert. Tenants want sustainable buildings – carbon neutral with outdoor space, he said.
Pearlstein said the downtown office market doesn’t look set to recover anytime soon, noting that Comcast hasn’t forced workers back into the office full-time, hurting Market and Arch Street tenants. .
“The office market is not great. Rents don’t go up much. We will witness a conversion building by building “into residential apartments, he predicts.
“Just go to 16th and Market streets,” Pearlstein said. “It was like the 50-yard line at lunchtime. But now Market Street has a long road to recovery.
The possibility of a new 76ers arena downtown “could generate mid-afternoon traffic on East Market Street, which struggled even with the fashion district,” Cooper said.
Much like the Capital One Arena in Washington, D.C., a Sixers Stadium on Market between 10th and 11th Streets could “create enough gravity to attract the restaurants, offices, and apartment buildings, which followed the arena’s construction. But we still need improved public transport,” Usdan said.
That said, employers such as OceanFirst Bank, a publicly traded banking firm, said they were expanding into their current Two Logan Square location, roughly doubling the space and adding in-person employees, said Susanne Svizeny, Regional President of OceanFirst Bank.
“We needed to hire and keep growing, and we committed to Philadelphia,” she said in an interview Friday. OceanFirst is a leading lender to Walnut Street retail store developers, and it noted that “Philly is much further along in its recovery than cities like Baltimore. Still, it’s still seen as a tough place to get things done.
As for a new mayor, “the only thing we hear from our borrowers is gun violence, and safety is about people,” said Brad Fouss, president of the banking market for Greater Philadelphia. “We’re not the only city where this is happening, so it’s not unique to Philly. But this is part of the repair and return of office workers to the city.