Innovation Nodes Fuel Economic Rebirth of Philadelphia
Brotherly love. Cheesesteaks. The 76ers. Philadelphia is the 5th largest city in the U.S. and has no shortage of unique and enduring assets. What has been more fleeting for the birthplace of our independence, is a strong footing for its local economy. That’s changing, however, as Philadelphia ups its innovation game. Our Innovation District series continues with an in-depth look at “Philly” — and how it’s working on multiple fronts to harness the new economy.
The Urban Land Institute descended upon Philadelphia last week for its Spring Conference, providing the chance for urban planners, developers and real estate professionals to use it as a living laboratory. What we witnessed was a vibrant city, not just in its city center, but also its historic Navy Yard, and the west side of town where “Eds and Meds” have combined forces.
Perhaps the most dramatic change is at the thousand-acre Navy Yard, where master developer Liberty Property Trust has been transforming the historic port. While only three miles from downtown, the property’s imposing gates have long separated it from the rest of Philadelphia. But the workplace history is deeply rooted in the city’s identity, beginning in 1912 with a Steel Foundry, and its ultimate role in WWII, employing 50,000 people and constructing 60 ships. The naval base closed in 1996 along with many others across the country, and now serves as a leading example of a successful re-use.
Liberty’s carefully planned business center has focused on highly appointed, LEED rated tech oriented buildings, beautiful “adult play and leisure spaces” and a hotel. The current 12,000 jobs have surpassed those at the time of the base closure, and 30,000 are planned overall. Rents already exceed the City Center, and marquee tenants like GlaxoSmithKline have established a presence. Liberty has also maintained an industrial base, helping the legendary “Tastykake” bakery establish a new LEED certified facility.
Part of the allure of the Navy Yard is that it still includes shipbuilding, with the Norwegian Aker corporation utilizing the port (and employing 1,300 workers). The ships serve as a beautiful backdrop to a more artsy corporate presence — the campus for Urban Outfitters. Their private investment of $300M includesthe painstaking rehabilitation of a dozen historic shipyard buildings into a millennial worker’s dream setting, complete with dogs, restaurants, and plenty of natural light. The Navy Yard also boasts new energy demonstration and training areas thanks to recent federal funding. The Navy Yard can be considered half done, but future plans to introduce multi-family residential may be the most transformational to date.
Meanwhile, Downtown Philly has seen a building Renaissance, thanks in no small part to the central relocation of the convention center which has exponentially increased hotel development. Housing has followed as the urbanized dynamics of the millennial generation have taken root. And like the Navy Yard, historic assets play an important role — chief among them, the 125-year-old Reading Terminal Market which hosts 80 local merchants. The market is the most visited place in Philadelphia, as proven by the long line to snag an Amish doughnut! Much of the Downtown development activity has consolidated on historic Market Street, including the almost 1 million square foot Gallery retail renovation project by the Macerich company.
And it’s Market Street which makes the connection to Philadelphia’s third node — the so called “University City District“, home to University of Pennsylvania, Drexel, and the new Science Center collaborative with over 30 partners in a 15 building/15 acre area. The concentration of university medical uses with a corresponding wellspring of talent, have made it a natural place to incubate research concepts and foster entrepreneurship. And while large corporate anchors have been elusive, the “Eds and Meds” strategy has generated significant development activity and buzz, including private office and residential projects, as well as institutional contributions such as the “Pennovation Works” Center — an innovation space focused on engineering, robotics, and the Internet of Things. Inclusive growth is also a priority with plans for public K-12 STEM facilities underway.
The big takeaway for Fremont is that big cities need multiple centers of energy to serve different audiences. Approximately 85 percent of Philadelphia’s business activity takes place in these three nodes. While Fremont is smaller scale, Warm Springs, Downtown, and Ardenwood serve distinct employment needs.
Lest we collectively be daunted by the scope and importance of these strategic efforts, here’s a parting thought from Drexel’s SVP of Economic Development, Keith Orris, “Momentum means unlimited potential.”