Center City is on the mend but it still has a long way to go and its biggest challenge may come after New Year’s.
The economy in Philadelphia is still reeling from COVID-19 pandemic and the mandatory restrictions on business activity. But a recent report issued by the Center City Business District shows several rays of hope, despite another record wave of illnesses sweeping through the region.
“We’re in better shape than most East Coast cities,” said Paul Levy, founding executive director of the Center City District. “On the curve to recovery, we’re about a month ahead of Manhattan. This will be a slow and gradual process, but we’re committed to the long haul.”
Levy is optimistic for Philadelphia’s long term future, though he foresees a rough three to five months ahead. Pennsylvania reported over 2,700 new cases on Tuesday, and is now averaging 1,939 new cases a day over the past seven days, the highest rate of new infections during the pandemic.
“This city will recover,” said Levy, whose organization provides services to 220 blocks. "I’m old enough to remember when we lost a quarter million jobs in the 70s and 80s. I can recall the recession of the 90s when we lost 26 percent of the assessed value of the District. And I remember the months after after 9/11 when we wondered if people would ever return to work in office buildings.
“We will survive.”
The District’s latest economic snapshot offers plenty of data and some cheer for the most beleaguered Center City merchants. “But the next few months will be very challenging,” Levy said. “We need to be ready. The biggest challenge will be after the holidays.”
Here are some of the highlights from the report.
Merchants and restaurateurs are preparing for the return of commerce this holiday season, Levy said.
Dilworth Plaza, which suffered $3 million in damages by looters in late May, has been restored. The plaza’s traditional holiday attractions are returning, albeit in a scaled back form to assure residents and visitors alike that their health remains the city’s top concern.
The Christmas Village will have half as many holiday vendors and they’ll be spaced to limit crowds and ensure social distancing, Levy said. The skating rink on the plaza will offer timed, 90-minute tickets and tightly control the number of skaters on the ice. The Wintergarden on the Greenfield Lawn, with its whimsical topiary garden of reindeer, is scheduled to open on Friday. “We’ll have a wine garden, but seating will be farther apart.”
Open-sided “cabins” and several cafes and eateries retrofitted with plexiglass barriers will serve Center City residents, workers and shoppers.
“Even with all the anxiety surrounding the pandemic, we feel like we know how to manage this,” Levy said. “And if we have to dial things back , we’ll dial things back.”
Jobs are (partly) back
More broadly, employment is returning to normal but still weak. Nearly 101,200 Philadelphians lost their jobs between March and April. But by August, 43,400 of those were back to work. Total employment in the city has slowly returned, rising to 690,200 in August. During the same month in 2019, there were a total of 739,400 employed in Philadelphia.
“We’re still 50,000 jobs below our August 2019 numbers,” said Levy. “We’re improving, but by no means are we completely there.”
There’s been a “slow, steady but fragile” recovery for restaurants and retail. Between July and late September, the number of Center City businesses that were open to customers rose from 54% to 79%, Levy said.
The hospitality and entertainment sectors, however, continue to struggle, having lost 30,700 jobs or nearly 40% of the total.
New retailers and eateries
At least 13 new businesses were optimistic enough to launch new storefronts during the past three months, although many long standing restaurants and retailers have shuttered for good.
Among those seeing opportunity in the post-pandemic chaos are the Canopy Hotel by Hilton, a Kate Spade New York Outlet, Allbirds Sustainable Shoes and Clothing, and the Brickworks North American Design Studio. More than a half-dozen new eateries, including another outpost by Federal Donuts and three upscale restaurants -- Steak 48, Morea, and Sueno -- also are banking on a speedy recovery.
At the same time, the number of small businesses open in Philadelphia has plummeted by 24% compared to January 2020, according to Opportunity Insights, a Harvard-backed research institute.
Foot traffic is up; boards are down
Center City no longer looks like it’s bracing for a hurricane. More than 276 businesses boarded up their windows after looters rampaged through Center City at the end of May. That number of boarded up businesses has fallen to 55. “There’s significant recovery there,” Levy said.
Foot traffic has rebounded. The Center City District manages 20 pedestrian counters, placed on prime retail corridors and in the office district on west Market Street. Just before the city went into Stay-at-Home mode in mid-March, the devices reported a daily average of 101,730 . The week of March 28 the number of walkers plummeted to 17,161, rendering the city a ghost town. But in late-September the counters reported about 91,000 walkers. Though fewer than half of 214,000 recorded daily in 2019, it indicates street life is slowly resuming.
The pandemic spurred demand for the city’s Indego bike share program. With most people avoiding public transportation, the number of monthly bike share trips spiked more than 20% year-over-year in June, rising from about 81,000 to 98,000.
Septa ridership, though down precipitously, is stronger on city buses than on the trains. “Buses are at about 58% capacity. Regional Rail is only 18%,” Levy said. “That speaks to who those who are hourly essential workers and who is salaried and able to work from their homes in the suburbs.”
The ‘silver lining’
Street closures on the weekends, Levy said, have led to “a reclaiming of the public environment.”
Swaths of Center City have been closed off to traffic so restaurants can increase outdoor seating. Those include stretches of 13th and 18th Streets, parts of Sansom and Arch Streets, and Drury Lane. With additional spaces reclaimed from parking spots along major thoroughfares, total outdoor seating expanded from 3,000 in June to over 5,100 in September.
“The silver lining is people thinking ‘why we don’t do this more regularly'?” Levy said.
The demography of dining has evolved quickly.
“In July it was only 20- and 30-year-olds gathering outside to eat,” Levy said. “By August, there were people in their 70s joining them as they became more comfortable with it. You look at who’s out now on the weekends along 18th Street. It’s really diverse by age.”
Masks, hand washing, and social distancing have helped keep the infection rate relatively low in the city.
“There are still legitimate concerns,” Levy said. “There are also many irrational concerns. But I think we can contain and manage the problem. And I think the same thing can happen with a gradual return to work.”