Archive for January, 2012

Small is beautiful: An opening for an urban retail resurgence?

Monday, January 30th, 2012

The growth of online retailing has led to a shift in the world of brick-and-mortar retail: Behold the incredible shrinking big-box store.

Best Buy store

Retailers like Best Buy are downsizing stores in the face of declining customer traffic. They might find new opportunities and eager shoppers in urban spaces where they once could not fit.

According to an article in the current issue of Realtor magazine, discount giant Walmart is shrinking the footprint of its Supercenters from 180,000 square feet on average to a mere 105,000. At the same time, the retailer is experimenting with an even smaller store: the “Walmart Express” concept features stores averaging 10,000 to 15,000 square feet in size. This past summer, struggling electronics retailer Best Buy Co. announced plans to shrink the size of its stores and sublet excess space to other non-competing retailers while expanding a new chain of smaller stores specializing in profitable mobile devices. Here in Philadelphia, office-superstore chain Staples has already announced plans to consolidate its two Center City stores into one smaller location at 15th and Chestnut in keeping with this trend – in turn opening the way for off-price retailer Marshalls to enter the urban core for the first time.

These moves, made in response to a growing propensity for customers to use physical stores as “showrooms” where they can try out merchandise before buying online, could bring with it an unexpected side benefit: a return of a truly diverse retail mix to America’s big-city shopping districts.

Old-timers may recall a time when 15,000 square feet was big for a supermarket, and in Manhattan, it probably still is. Specialty chains like Whole Foods and Trader Joe’s don’t need much more space for their stores, which can already be found in a number of in-city locations, including three in Center City Philadelphia. A Wal-Mart Express would likely find ready patronage in similar locations – and parking would not be such a necessity.

The kinds of retailers that might sublet from Best Buy have stores that also fit well in urban settings, such as Sephora, also found in Center City. And a smaller Best Buy might work better at a site such as 16th and Vine, where a developer had envisioned such a store a few years back.

The shrinking of brick-and-mortar retail stores may be a sign of trouble for large-format retail, but it’s an opportunity for cities to capture more shoppers. All that’s required for this to happen are developers willing to bet on urban shoppers and city governments smoothing the way for redevelopment of vacant retail real estate.

–By Sandy Smith

Public domain image from Wikimedia Commons

Let’s Do Brunch: 10 of Our Weekend Best

Friday, January 27th, 2012

And on the seventh day, ye shall rest. That means no cooking for you. Instead, treat yourself to a leisurely brunch at one of these great places. Whether you’re in the mood for a breakfast favorite or something more dinner-y, but on the light side, these stars of the weekend offer everyone living in Philadelphia a delightful, casual dining experience – and then some, in a few cases.

Weekend BrunchCarman’s Country Kitchen, 1301 South 11th Street (at Wharton), Passyunk Square. At this quirky, intimate diner, the best down-home cooking in Philadelphia comes with something special on the side: running conversation with the chef, who loves to mix it up on current events and whatever else is on her mind with the patrons. (Your blogger has had more than one super-cheap therapy session with Dr. Carman, who is guaranteed to remove whatever blues you may be feeling.) In good weather, you can dine al fresco at the picnic table mounted in the back of the pickup truck parked in front of the restaurant. Breakfast and brunch specialties served 7 days a week, 8 a.m.-2 p.m. BYOB.

Sam’s Morning Glory Diner, 10th and Fitzwater streets, Bella Vista. This “finer diner” is a daytime-only destination beloved by locals and lovers of fresh, local, seasonal ingredients. The weekend brunch menu features egg dishes, cakes and breads, salads and “samwiches” sure to please just about everyone. Steak lovers will appreciate the bargain-priced steak and eggs, and carb fans will find the challah French toast divine. Brunch served Saturdays and Sundays, 8 a.m.-3 p.m.

Sabrina’s Cafe, 910 Christian Street, Italian Market; 1804 Callowhill Street, Logan Square/Art Museum Area; 34th Street and Powelton Avenue, Powelton Village. Classic comfort food is Sabrina’s stock in trade, and the long lines of diners waiting for tables attest to its quality. Breakfast lovers will find their favorite meal served all day, and there are vegan and vegetarian items on the menu as well. Brunch specials include a burger of the week, eggs Benedict Florentine, and a continually changing menu of cleverly named creative items.Brunch served Sundays, 8 a.m.-4 p.m. BYOB.

Valanni, 1229 Spruce Street, Washington Square West. Cocktail lovers will find this uber-cool Gayborhood mainstay as much to their liking as diners will, with a drink menu that goes well beyond the standard Bloody Marys and Mimosas. The kitchen is incapable of turning out a mediocre meal, and brunch is no exception. The Monte Cristo sandwich is to die for. Outdoor seating in season. Brunch served Sundays, 11 a.m.-3 p.m.

Jones, 700 Chestnut Street, Washington Square. Stephen Starr’s Mom-food eatery does everything with a nudge-nudge, wink-wink attitude, with the only difference being that you are in on the joke at this very Brady restaurant. The food, however, is serious – all your favorite classics are on the brunch menu, or you can order items from the all-day menu as well. Chicken-and-waffles fans, take note. It’s also a great place to dine with the kids. Brunch served Saturdays and Sundays, 10 a.m.-3 p.m.

Honey’s Sit ‘n’ Eat, 800 North 4th Street, Northern Liberties. Bet you didn’t know there was such a thing as “Southern Jewish food.” Well, there is, and Honey’s has it. It might be more accurate to say that the best traditions of Southern and Jewish cookery coexist side by side on Honey’s extensive menu, which features breakfast, brunch and deli favorites all made with ingredients sourced from some of the best local farms, including East Kensington’s Greensgrow Farm. But there are some interesting intersections of the two: brisket soft tacos, for instance. Brunch served Sundays, 7 a.m.-5 p.m. BYOB.

Jake’s and Cooper’s Wine Bar, 4365 Main Street, Manayunk. Feeling like doing something grownup for brunch? Here’s the place to do it. This Manayunk pioneer offers the full white-tablecloth, fine-dining experience and a menu of more than 30 items, all emphasizing sustainably grown, local ingredients. If you prefer wine to a Bloody Mary with your brunch, Cooper’s offers 35 different wines by the glass and 50 by the bottle, including several excellent values. (Jake’s will undergo a total makeover starting in the spring of 2012.) Brunch served Sundays, 10:30 a.m.-3 p.m.

The Swann Lounge at the Four Seasons, One Logan Square. $73 per person and worth every penny, the Swann Lounge’s Sunday brunch buffet is the most sumptuous in the city. Patrons enjoy an embarrassment of riches: traditional breakfast favorites, a global appetizer menu, salads and classic entrees, all prepared with French flair and served with one of the city’s loveliest views as a backdrop. Service, as one might expect at an establishment of this caliber, is super-attentive without being intrusive. Brunch served Sundays, 10 a.m.-2 p.m.

Mixto, 1141-43 Pine Street, Washington Square West. From the owners of Tierra Colombiana in North Philly’s Zona del Oro comes this delightful Cuban-Latin-Caribbean fusion alternative to the standard weekend brunch. Sure, Mixto offers plenty of traditional items for the less adventurous, but the Creole, Cuban and Caribbean dishes on the restaurant’s weekend breakfast menu offer a break from the ordinary. The wood-and-brick décor and exterior plantings will make you think you’ve left Philly for the tropics – and for a while at least, you have. Try their bacon Bloody Mary as well. Brunch served Sundays, 8 a.m.-3:30 p.m.

Farmicia, 15 S. 3rd Street, Old City. Imbibers, do your wallet a favor: Dine here and take advantage of the only weekend brunch Happy Hour in town, with half-price drinks from 11 a.m. to 2 p.m. Saturday and Sunday. Farmicia – the marriage of former White Dog Cafe chef Kevin Klause’s and Metropolitan Bakery owners James Barrett’s and Wendy Smith Born’s visions – offers simply prepared artisanal fare in a relaxed environment, with an emphasis on local ingredients. Brunch served Saturdays and Sundays, 10 a.m.-3 p.m.

–By Sandy Smith

Photo by Alice Park from Wikimedia Commons, used under a Creative Commons license

Should we give the banks a haircut to jump-start the housing market?

Wednesday, January 25th, 2012
Foreclosure

Perhaps there’s an alternative to this as a way to revive the housing market.

While the market for real estate in Philadelphia and nationwide has shown signs of slow but steady recovery since the bursting of the housing bubble in 2008, the housing market recovery is nowhere near as robust as it needs to be to power a general economic recovery.

One reason why: Homeowners remain over their heads in debt, and until that debt is cleared, many who might otherwise enter the market will remain on the sidelines. How to clear that debt has suddenly become a topic of conversation. Foreclosure, a relatively slow process, is right now the only method being used to reduce the debt overhang. Recently, though, a growing number of observers are calling for a faster method, but one that will be more painful for the lenders: Forgiveness.

That’s right – the banks should simply write off the debt as uncollectible, take the losses, forgive the debt and move on.

At a campaign stop in Florida recently, Republican presidential candidate  Mitt Romney actually broached the subject with struggling homeowners there:

 “We’re just so overleveraged, so much debt in our society, and some of the institutions that hold it aren’t willing to write it off and say they made a mistake, they loaned too much, we’re overextended, write those down and start over. They keep on trying to harangue and pretend what they have on their books is still what it’s worth.”

Similar calls for debt write-downs have been made by MSNBC commentator Dylan Ratigan. Forbes contributor E.J. Kain even went so far as to invoke a practice dating back to Biblical times – the declaration of a jubilee year in which all debts were forgiven and debtors released from their obligations – in calling for a general debt write-down in order to spark recovery.

The downside of a large-scale write-down of debt is that it will send some banks down the drain. That fear has so far kept bankers from even considering such a step. But one reason the recovery in the housing market – and the economy in general – has been relatively anemic is because the excess debt has not been dealt with expeditiously. Instead, as Romney noted, we have tried to prop up tottering banks by acting as if the debts were still worth something. If, instead, we took the losses and forgave the debt, we might see broader, faster and stronger recovery across the board – and nowhere more than in real estate. Of course, there will be short-term pain, just as there was when the Federal Reserve sent interest rates soaring in the early 1980s to wring the inflation out of the economy. But the gain afterwards will make that pain just a memory in short order.

–By Sandy Smith

Highlights from the Philly Living Market Action Report, 4th Quarter 2011

Monday, January 23rd, 2012

On the whole, it’s still a good time to buy if you are in the market for real estate in Philadelphia. But some market conditions are beginning to trend more favorably for sellers as well.

That’s our reading of the data in the latest Philly Living Market Action Report.  Our quarterly guide to real estate market trends in Center City and surrounding Philadelphia neighborhoods offers grounds for cautious optimism in the months to come. While sales volume is down for the quarter relative to the previous year, it is up significantly from the previous month and quarter, running counter to the usual end-of-year downturn. The average selling price for homes in Center City and environs rose significantly from last quarter and one year ago, while the median selling price fell slightly in both cases. This suggests that buyers on the whole are still looking for value, even though a few opted for properties at the upper end of the scale.

In terms of prices, the highest prices continue to be commanded in the city’s two most desirable neighborhoods: Rittenhouse Square (19103) and Chestnut Hill (19118). Worth noting, however, is a continued, sustained upward trend in median selling prices in Southwest Center City and Point Breeze (19146), reflecting especially increased activity in the latter neighborhood.

Inventory continues to decline, offering the prospect of better prices for sellers in the months to come, but days on market rose slightly, suggesting buyers are still waiting sellers out. Sale price-to-list price ratio also dropped slightly from last year and last quarter but held steady from the previous month.

For full details on activity in Philadelphia’s neighborhood housing markets, request a copy of the latest Market Action Report at phillyliving.com/report.

Philadelphia street scene by Adam Jones, Ph.D., used under a Creative Commons license

Fortunate Philly home owners may get property tax cuts – if…

Thursday, January 19th, 2012

Philadelphia Real EstateAccording to a watchdog we watch, onetime City Controller candidate Brett Mandel, Philadelphia real estate owners may be able to slash their property tax bills by up to 44 percent, thanks to the city’s sloppy real estate assessment regime.

In his email newsletter today, Mandel reported that the Board of Revision of Taxes ruled that Philadelphia property owners who appealed their assessed valuations as too high were eligible for reductions in their tax bills. The basis for the reductions is a ruling issued last summer by a state board that reviews city and county property assessments for conformity with state guidelines. The Commonwealth requires local jurisdictions to assess property at 32 percent of market value for tax purposes, and property owners in any jurisdiction that fails to meet this standard may appeal to have their taxes based on whatever rate the state determines is the local standard. Last summer, the state board determined that Philadelphia assessed property at 18 percent of market value on average. Following state law, a number of city property owners appealed their tax bills, and today, the BRT found in their favor.

This has several ramifications for City Hall. The first has to do with plugging the hole these lower tax bills will blow in the city and School District budgets. If the ruling stands, property tax receipts will fall by up to $80 million in the coming year, a large hole for the city to fill. However, according to Mandel, the city plans to appeal the decision on the grounds that the numbers the city gave the state last year are inaccurate and that the real numbers will show the city passes the state threshold.

If the folks in City Hall are smart, though, it will also light a fire under the new Office of Property Assessment to proceed with the full reassessment of property citywide that just about everyone agrees is needed to ensure city property is fairly valued. Right now, similar properties in the same neighborhoods may vary widely in their assessments, leaving longtime owners with ridiculously low taxes while newer residents face much higher bills. Politically connected property owners have also been known to benefit from the discrepancies in local property assessments. When the BRT handled both assessments and appeals, this problem got swept under the rug, so to speak; with the separation of the asseessment function into a new city agency last year, the problem can no longer be hidden that easily. Rather than appeal a flawed system, the city should take the opportunity to put an accurate and fair assessment system in place before more taxpayers get their bills lowered.

–By Sandy Smith

10 Rittenhouse lands in the lap of its lenders

Monday, January 16th, 2012

One door closes, another door opens. The 10 Rittenhouse Square luxury condominium tower on Rittenhouse Square is now mostly in the hands of the lenders who financed it.

Foreclosure proceedings came to an end on Jan. 10 when senior lender Istar Financial purchased the building’s 129 unsold condos at sheriff’s sale. Developer ArcWheeler agreed in May 2011 not to contest the foreclosure after spending several months trying to forestall it after Istar first moved to foreclose in the fall of 2010. Carl Dranoff, the Philadelphia developer who had been named receiver of the building at Istar’s request, had no success selling units in the building – he told The Philadelphia Inquirer’s Al Heavens that only one individual had attempted to buy a unit since the filing, and that person was rejected because the purchase was part of a bulk sale.

In addition to its financial woes – the developers owed more than $208 million to its lenders; Istar, based in New York, was owed $175 million and mezzanine lender Delaware Valley Real Estate Investment Trust was owed about $33 million – the building had also been tied up in litigation over the past few years. The sheriff’s sale brings these woes to an end, but it brings with it a challenge for the lenders: Move units that no one else has yet been able to move, despite their being located in a signature building at the most fashionable address in the city. Are the sluggish sales a byproduct of the slow Philadelphia real estate market, or were they the product of problems with the original developer and marketing team? The lenders are about to find out for themselves.

–By Sandy Smith

Just in time for Restaurant Week, Marc Vetri delivers a raspberry

Wednesday, January 11th, 2012

In case you have been living under a rock, the Center City District’s semi-annual Restaurant Week is just around the corner. Actually, “Restaurant Week” is now a misnomer – this popular event, now in its 10th year, runs for two weeks – from Jan. 22-27 and Jan. 29-Feb. 3 for the winter edition. (Another two-week Restaurant Week takes place in the fall.)

Le Bec-Fin

Maybe we could dine at Osteria for $65 a head, but we doubt we could get out of Le Bec-Fin for that little.

Philadelphia-area food lovers devour this event, and with good reason: more than 100 of Center City’s best restaruants offer special three-course prix fixe menus for just $35 for dinner – and many of them also offer special $20 lunch menus. (Tax, gratuity and alcoholic beverages are not included in the package deal.) For adventurous diners, Restaurant Week offers a chance to sample unusual fare and high-end dining experiences ($35 for dinner at Le Bec-Fin? Sign us up!) they might not otherwise consider.

The event draws large crowds to the participating restaurants. Many restaurateurs love Restaurant Week for the exposure it gives their restaurants to new patrons. So does the Center City District. Echoing economic development officials in other cities that run such events, the CCD’s Kristen Linker told Forbes last fall, “Since its inception in 2003, Center City District Restaurant Week has generated over $23.9 million in additional revenues for the restaurants and pumped over $90.7 million into Center City Philadelphia’s economy.”

Not among the fans, however, is Marc Vetri, quite possibly the most celebrated chef in Philadelphia today. In a status update on his Facebook page, Vetri said that the discount dining deal really isn’t that much of one, especially after figuring in the wine, tax and tip. You could dine at his Osteria restaurant in Fairmount, he said, for about what the Restaurant Week special would run per person after throwing in all the rest. (The full text of his complaint can be found on Foobooz.) Add the crowds and the harried waitstaff to that, he said, and you might be better off dining at the restaurant of your choice on a normal night.

To some, these are fighting words. To others, Vetri has revealed the emperor has no clothes. What do you think? Share your comments here.

–By Sandy Smith

Photo of Le Bec-Fin by TexasDex from Wikimedia Commons, used under a Creative Commons Share-Alike 3.0 license

It’s Official: Philly Housing Market Is Improving

Tuesday, January 10th, 2012

Residential street in Center City PhiladelphiaThere are now 76 markets where the real estate picture is expected to look better in the months to come, according to the latest National Association of Home Builders/First American Improving Markets Index, released Jan. 9. The Philadelphia real estate market is one of those 76.

The addition of 40 metro areas to the monthly list of improving markets suggests that the fitful housing market recovery is spreading beyond the smaller markets that were not as heavily affected by the bursting of the housing bubble in 2008. Last month, there were 41 cities on the list. (Five of those – Anchorage, Alaska; Fort Wayne, Ind.; Canton, Ohio; Scranton, Pa., and Charleston, W. Va. – dropped off the list.)

“While relatively small metropolitan areas continue to dominate the list of improving housing markets, it’s important to note that several major metros in diverse parts of the country have now joined the field as well – including such metros as Dallas, Denver, Honolulu, Indianapolis, Nashville and Philadelphia,”NAHB Chief Economist David Crowe said in a news release. “This is an encouraging sign that gradually strengthening economic conditions are starting to take hold across a broader swath of America.”

The NAHB and title insurer First American base the index on trends in three categories: employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac, and growth in single-family housing construction permits from the U.S. Census Bureau. A metro area that has had six consecutive months of growth from a prior trough in all three areas gets added to the index.

What does this mean for you, the Philadelphia home owner or buyer? If you are in the latter camp, we suggest you accelerate your house-hunting timetable if you can. While home price growth is forecast to be modest for the year ahead, prices are expected to rise, and that means that you are more likely to get the home you want at a great price now than later. If you are a home owner, talk with your Realtor about the ideal time to put your home on the market if you are still weighing your options. Our team of real estate experts can assist you in determining when and how to best take advantage of a rising market.

School Report Card: Universal Institute Charter School

Thursday, January 5th, 2012

Location: 801 South 15th Street, Philadelphia, PA 19146

Enrollment: 705 students in grades K-9 in 2010-11

Student-teacher ratio: 19.7 in 2010

Demographics: African-American, 99%; White, 0%; Asian, <1%; Latino, <1; all others, <1%. 99% of Russell Byers students come from economically disadvantaged backgrounds.

Metrics:

Attendance rate (2010-11) 94%.

PSSA performance (2011, percentage of students scoring proficient or advanced):

Subject This School District Public Schools State
Math 64.3% 58.6% 77.1%
Reading 60.3% 52.0% 73.5%
Science 48.6% 34.8% 60.9%
Writing 69.4% 51.2% 75.0%

Profile: The Universal Institute Charter School’s curriculum is based on the School District of Philadelphia’s Core Curriculum, employs a project-based approach to learning and emphasizes career readiness, civic responsibility and community involvement. UICS uses the “School to Career” model to structure its instructional program; the model is a K-12 program that is designed “to prepare students for success in the world of work, further education, employment, enterpreneurship and/or service to the community.” UICS also draws on community resources and institutions in its Graduate Hospital-area neighborhood to enrich its offerings.

School Report Card: Russell Byers Charter School

Thursday, January 5th, 2012

Location: 1911 Arch Street, Philadelphia, PA 19103

Enrollment: 418 students in grades preK-6 in 2010-11

Student-teacher ratio: 16.0 in 2010

Demographics: African-American, 81.8%; White, 11.5%; Asian, 2.4%; Latino, 3.8%; all others, 0%. 67% of Russell Byers students come from economically disadvantaged backgrounds.

Metrics:

Attendance rate (2010-11) 91%.

PSSA performance (2011, percentage of students scoring proficient or advanced):

Subject This School District Public Schools State
Math 71.0% 58.6% 77.1%
Reading 65.1% 52.0% 73.5%
Science 70.2% 34.8% 60.9%
Writing 84.8% 51.2% 75.0%

Profile: Founded in 2001 to honor the memory of the Philadelphia Daily News columnist who passionately championed both his hometown of Philadelphia and better public education, Russell Byers Charter School is the only school in the state to adopt the Expeditionary Learning Schools model of instruction, which emphasizes learning by doing, teamwork, discovery and accountability. The model sets high expectations for students, teachers and school staff and builds character as students engage in collaborative projects that engage them with not only subject matter but the world around them. Spanish language instruction is an integral part of the curriculum as well.

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