Paul Levy, president and CEO of the Center City District, likes to refer to Philadelphia’s success as similar to driving a car. When looking in the rear-view mirror, you may think how far the city has come. But when looking out the side, Boston, New York, and other cities are passing us by.
“In reference to our own past, we’re doing really well,” Levy said. “And in reference to peer cities, we should be doing much better.”
Levy tried to emphasize this point in the Center City District’s annual report, released Tuesday, which highlights Center City’s growth in jobs and population, expanding shopping corridors, and number of transit lines, among other topics.
The 71,100 jobs since the end of the Great Recession represents the city’s “fastest and most sustained growth since the end of the Second World War,” the report states. But it is much less than the growth rates of other cities.
New York City, Washington, and Boston all outpaced Philadelphia’s 1.5 percent annual growth in private sector jobs from 2009 to 2018. The average growth rate of America’s largest cities was 2.3 percent, the report states. If Philly had just met that, the city would have added 117,700 jobs, instead of 71,100 since 2009.
At the same time, more shopping, entertainment, dining and workplace options in Center City are popping up beyond Rittenhouse Square, expanding the retail corridors eastward.
Shopping centers and brick-and-mortar stores nationally continue to try new ways to attract customers even as online shopping chips away at their foot traffic. But Center City’s retail scene continues to do well, the report concludes.
Walnut and Chestnut Streets from Broad to 20th Streets are the “prime retail corridors” in the report, which states that this area is at 94.6 percent occupancy. Retail occupancy nationwide is running about 5 percent less, according to estimates cited in the report.
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While not all retail in Center City is thriving — apparel and bookstores have seen declines since 2013 — boutique fitness, quick service restaurants, and click-to-brick tenants, like Warby Parker, have increased in the last five years. The former Gallery is being redeveloped by local mall operator Pennsylvania Real Estate Investment Trust (PREIT) and Santa Monica, Calif.-based Macerich, into the new Fashion District Philadelphia. This more-than-$400-million project will drop 838,000 square feet of retail onto Market Street between 8th and 11th Streets.
This new development on Market East, the report states, “is creating a continuous shopping and dining experience from Independence Mall to the major Center City convention hotels just east of City Hall."
The Fashion District is scheduled to have a grand opening on Sept. 19 and has announced tenants such as Forever 21, Francesca’s Holdings Corp., Guess, Round One, AMC Theatres, and City Winery. PREIT chief executive officer Joseph Coradino called this the company’s “marquee project” on a February call with investors.
Retail growth is also happening south of Walnut, with grocers like Giant’s Heirloom Market and Sprouts opening in the Graduate Hospital area. Carlisle, Pa.-based Giant, which has more than 170 stores in Pennsylvania, Maryland, Virginia, and West Virginia, chose Center City for the company’s first urban format store at 2303 Bainbridge St.
“It proves that we are serious about serving Philadelphians," Bertram said. “We’ve already got a strong e-commerce business, we love our store on Grant Avenue [in the Northeast], and we love our business in the suburbs.”
New stores also popped up on the traditional shopping blocks in Center City, like Champion and Brandy Melville on Walnut and MM.Lafleur on Chestnut, where average rent per square foot is $125 for Walnut and $80 for Walnut Chestnut.
Even as Center City continues to attract national retailers, a total of 243 in 2018, the report emphasizes that there are 743 boutique or independent retailers. In the last five years, Center City gained 77 national retailers.
This growth is supported by the $1 billion in retail demand annually from workers, residents, college students, and tourism, the report states. Center City has 42 percent of city jobs. It also has 13 rail lines, 29 bus routes, 43.5 million square feet of office space, an almost 80 percent hotel occupancy rate, 18 million visitors, and 193,000 residents.
“If you keep your lens just on Center City, it’s extremely good, but what we try to do with this report is put Center City in context,” Levy said. “Having been in the city for more than 40 years, I just want to see it do better than it’s doing.”