THE NEWSLETTER OF THE CENTER CITY DISTRICT AND CENTRAL PHILADELPHIA DEVELOPMENT CORPORATION

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Center City Retail: Steady Improvement with Potential for Growth

With a dense concentration of jobs, anexpanding convention and tourism tradeand a large and growing residential base,Center City Philadelphia offers a robustretail environment with great potentialfor growth. In our latest, annual retail survey1,conducted in June, the Center CityDistrict counted 2,146 retail establish-ments, occupying 3.56 million squarefeet. Sixty-seven premises were underconstruction and 255 were vacant, for atotal of 2,468 retail spaces occupying 4.1 million square feet. That number was up marginally from 2004, when CCDcounted 2,433 retail premises.

By comparison, the King of Prussia Mallis home to 375 stores, occupying 2.62million square feet. Moreover, CenterCity has a rich variety of retail businesses,offering everything from fine dining tohoagies, furs to vintage clothing, antiquesto discount houses. Where King ofPrussia currently has the edge is witheight major department stores.The 2005 survey found that the retailoccupancy rate had climbed to 90%, a three percent increase over 2004. Whilethis percentage has fluctuated over theyears, the overall trend has been a steadilyimproving retail environment. CCD counted 212 new retail businesses

this year, occupying 200,000 square feetand representing a wide range of mer-chandise and services. Center Citycontinued to add sit-down dinner restau-rants, growing from 201 in 2004 to 206this year. Jewelry and gift stores addedanother 11 establishments for a total of188, and bank/financial services locationsgrew seven percent from 87 in 2004 to 93 in 2005. There were minimal changes in other retail categories. Center City’s 623 eating and drinkingestablishments continue to account fora large share of the marketplace, repre-senting 29% of downtown retailers. Inaddition to 206 sit-down dinner restau-rants, there were 64 bars/nightclubs, 167outdoor cafes (see article page 4) as wellas bakeries, coffee shops, fast-food, take-out and health-food establishments,sandwich and snack shops and delicatessens.

RETAIL OCCUPANCY RATESRetail Occupancy Rate

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Composition of Retail Market by StoresCOMPOSITION OF RETAIL MARKET BY SECTOR

New and exciting retailers are discovering the value of a Center City location.

This month’s Center City Digest is a specialissue focused largely on the retail environmentin Center City.

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1 The Center City District conducts the annual Center City retail census each year in June, surveying the area from Pine Street to Vine Street between 6th Street and 21st Street, and from 21st Street to the Schuylkill River between Market Street and Walnut Street, and North Broad Street from Vine Street to Spring Garden Street.Every block within these boundaries is walked and every retail business is recorded or updated, based on the results of the previous year’s survey. Information collected includes street address, business name, square footage, type of retail, and for dinner restaurants, type of cuisine. Survey results are used to monitor changes and trends in the Center City retail environment.

2 Center City District personnel use hand-held counters to record the number of people passing by each location in 15-minute intervals between 11:30 and 2:30 p.m. Counts recorded from both sides of the street are averaged to determine an hourly pedestrian count for each location.

One clear trend has been the growth in popular national coffee shops now interested in previously untapped urbanmarkets. In 2000, CCD counted threeStarbucks coffee shops, in 2005, therewere 11. Another notable development has beenthe growth in home furnishings and décorstores which, along with well-establishedart galleries, frame shops and antiquedealers, serve the burgeoning downtownresidential market. (See article page 4.)The retail revival along West ChestnutStreet continued to accelerate in 2005,with a significant number of new retailers.The vacancy rate on Chestnut fromBroad Street to the Schuylkill Riverdropped to eight percent, equal to WestWalnut and nearly half of last year’s15.6% vacancy rate. (See article page 5.)

The CCD also conducts an annual surveyof pedestrian traffic at key locationsthroughout Center City.2 This year’ssurvey, conducted in June, found thatdowntown volumes have been sustained.The busiest pedestrian areas remain Westof Broad, Market West and the Avenue ofthe Arts. Old City, East of Broad and theConvention Center saw an increase. Read more about Center City retail in a special report, starting on page 3. More information on retail, including surveyresults and pedestrian counts, is available at www.centercityphila.org.

The number of restaurants in Center City continues to grow, both in number and variety.

Parents can now make an informed deci-sion about which Center City school bestsuits their child’s needs at the first CenterCity Elementary School Fair. Principals, staff, teachers and involvedparents from over 30 public, parochial,independent and charter elementaryschools in Center City will be on hand toanswer questions about what their schoolcan offer children. There will also befamily entertainment and a festive atmo-sphere to keep the kids entertained whileparents learn about each school, andabout the innovative and exciting changeshappening at downtown schools.

The fair will be held from noon to 3 p.m.Saturday, October 22 in Hall D of thePennsylvania Convention Center, 12thand Arch streets. Admission is free andthere will be snacks and drinks availablefor purchase.The schools fair is funded by the WilliamPenn Foundation and the Common-wealth of Pennsylvania as part of abroader project that the Center CityDistrict is undertaking to enhance educ-tional opportunities in Center City.For more information, call 215-440-5500or visit www.CenterCitySchools.com.

Center City Elementary School Fair

www.CenterCitySchools.com

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Downtown streets are active day andnight with new residents, increasing numbers of visitors and the largest con-centration of office workers in the region.Yet there is a persistent view that retaildevelopment in Center City has lagged.Findings from the Center City District’slatest survey and interviews with key retailexperts tell a different story: while thereare clearly challenges in growing theretail sector, overall retail vacancy is downand there is strong growth both in certainkey types of retail and at some locations,notably Chestnut Street. (See articlespages 4&5.)Experts attribute much of the slow butsteady improvement in Center City’sretail environment to a change in thenational perception of the city. “I thinkwe are starting to chip away at the oldtheory that this is a dowdy city,” saysPeter Iacovoni, manager of SpecialProjects, Office of the CityRepresentative/Commerce Department.The arrival of an increasing number of national chains — and their nationaladvertising campaigns — has started to brand Philadelphia as a viable retaillocation, says John Connors, president of Brickstone Realty, owner of the MarketPlace East shopping center. And nationalsare a boon, not an obstacle, to CenterCity’s unique, small, owner-run shops,the experts stress. “We need to under-stand that a West Elm [a new nationalfurnishings store coming to EastChestnut Street] will bring foot trafficand will help, not hurt, the smallerretailers nearby,” says Iacovoni.Particularly for tourists and visitors,national names lend credibility and cachetto local shops, says Meryl Levitz, presi-dent of the Greater Philadelphia TourismMarketing Corp. (GPTMC). “We needboth,” she says. “There are a lot of peoplewho want the one-of-a-kind shopping weoffer, but there are also a lot of peoplewho want the familiarity and comfort ofnational stores.”The replacement of Strawbridge’s at 8thand Market with Macy’s — well known inretail circles as an aggressive advertiser,smart merchandiser and progressiveretailer — is welcomed. “Macy’s is anideal fit for Center City,” says JosephCoradino, president of PREIT, whichowns the adjacent Gallery at Market East.“It will serve as impetus to reinvigorating

the rest of Market East with small shops,dining and entertainment.”For the Gallery, he adds, Macy’s arrivalbolsters plans to attract more traditionalshopping for a more eclectic tenant mix.“You can lease a broader range of storesadjacent to a Macy’s,” he notes. Iacovoniexpects Macy’s to exceed Strawbridge’ssales at that location. PREIT also plans physical changes at the“fortress-like” Gallery that are bound toenhance Market East, including intro-ducing more glass to the façade and moreentrances from Market Street. “Ourvision for the Gallery is to make it more apart of the streetscape,” says Coradino. Market East, along with South Broad, is also widely viewed as the ideal locationfor big-box retailers such as Target, BestBuy, Costco and Sears who are experi-menting with multi-level stores in urbansettings. “It’s very difficult to get thesetypes of retailers into old buildings,” says Coradino. “They want to build their prototypes and so it’s much easier to sell them from the ground up.” ButConnors notes that barriers that havekept key parcels on Market East tied up for years must be removed to expeditetheir development. There is consensus that Center City isstill underserved by and presents opportu-nities for retail types including movietheaters, sporting goods, electronics,appliances and furniture. Opinion varies

about whether Center City is likely to seethe arrival of a high-end departmentstore, like Neiman-Marcus orNordstrom, any time soon. To coordinate efforts to build CenterCity’s retail environment, the CommerceDepartment, Center City District,Philadelphia Convention & VisitorsBureau, GPTMC, key retail developersand others established an advisory panelthat has met regularly over the past year. But there is a clear sense that the cornerhas been turned. Says Jack Fazio, generalmanager of the Shops at Liberty Place:“The demand for a Center City locationis growing. And from the national view-point, Philadelphia is finally on the map.”

C E N T E R C I T Y R E TA I L : The Experts Speak

Building a wide range of quality retailers is a key economic development goal for Center City.

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One of Center City’s strongest retailgrowth areas, and a sure indicator of a lively urban scene, is the continuedexpansion of outdoor cafes throughoutthe downtown. In its fifth annual outdoorseating survey, conducted in June, theCenter City District counted 167 establishments with sidewalk seating, up12% from 149 in July 2004 and more

than 140% since the CCD first counted69 cafes in 2001.This year the area west of Broad Streetremained the location of the highest share of Center City’s outdoor cafes(34%), although east of Broad grew byalmost 40% since last year and nowaccounts for 23% of the total number of establishments.

The CCD’s full 2005 Sidewalk Cafereport is available online at www.centercityphila.org.

Outdoor Dining Boom is a Boon to Center City

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OUTDOOR CAFES IN CENTER CITY

As Center City’s population swells withsophisticated young professionals and agrowing market of affluent empty nesters,a new generation of stylish home furnish-ings and décor stores is springing up amidlong-time favorites. National retailers and local entrepreneursalike have taken note of the fact that since1998, almost 7,500 new housing unitswere added in Center City, with another3,460 in the pipeline through 2008,adding thousands of new residents.Town Home is one of the new CenterCity-based shops catering to urbandwellers’ taste for good design. “The chic,sophisticated urban customer is alreadyhere in Center City. Now with moreupscale residences than ever before, it willno doubt increase my housewares busi-ness and it’s already been very lucrative,”says owner Dana Bank. Owner Igor Rivlin of Usona saw anopportunity to bring high-end, modernfurniture with an urban sensibility to

Center City 11 years ago when he foundhe had to go to New York repeatedly toget the kind of furnishings he wanted forhis own apartment. “It’s a much moresophisticated city than it used to be,” henow says. “It’s alive.”Other small, local shops that have openedto serve the burgeoning home-furnishingsmarket in Center City include MatthewIzzo Shop, Open House, Kellijane andMetro Living, among others.National home-furnishings retailers arealso discovering the value of a CenterCity location. Design Within Reach specializes in the iconic designs of the20th century at its 3,700-square-footPhiladelphia showroom. Just downWalnut Street is Waterworks, anothernational retailer that offers upscale bathfittings and products. New this fall are Mitchell Gold + Bob Williams and West Elm, both high-end furniture retailers opening onChestnut East.

For more information on these and other great places to shop for furnishings and décor in Center City,including a searchable database, visit www.centercityphila.org.

Soaring Center City Population Brings Growth in Home Furnishings Shops

High-style furnishings shops are filling agrowing market niche in Center City.

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One of the most dramatic turnarounds inCenter City’s retail scene is taking placeon West Chestnut Street where signifi-cant new investment in only the past yearhas injected extraordinary new life intoonce-quiescent blocks.The Center City District’s annual retailsurvey in June 2004 found that 15.6% of the storefronts on Chestnut betweenBroad Street and the Schuylkill Riverwere vacant. This June, the vacancy ratewas nearly halved, to eight percent.One of the lynchpins of change isStephen Starr’s successful ContinentalMidtown, bringing with it a lively eveningscene of bar-goers and diners. A newentertainment district is shaping up here,too, with both the House of Blues and therenovated Boyd Theater in the works.Across the street is the new DiBrunoBrothers gourmet food emporium. Thevenerable Italian Market-based purveyorinvested more than $4 million to outfit its12,000-square-foot store, which openedin May. Besides bringing rare cheeses,homemade chocolates and pastries,

prepared and specialty foods to Chestnut,the store has done much to enliven thestreet with its ground-floor coffee andespresso bar, brisk lunch business andoutdoor seating. On the second-floor,DiBruno’s recently opened a 50-seatBYOB cafe with wireless Internet access. One block west, Boyds is also spendingmillions to renovate its store and expandits women’s department with collectionsfrom ultra-high-fashion designers, manyof whom were not previously available inCenter City. The new store also featuresan in-house Brasserie Perrier cafe andGovberg jewelry boutique.Other new retailers on West Chestnutinclude Breakaway Bikes, Chic Bella,Perry Milou Gallery and Smith Brothers. The blocks immediately east of BroadStreet are also beginning to experienceresurgence. The success of Borders hasbeen a major catalyst, and now two newfurniture stores, West Elm, a division ofWilliams-Sonoma, and Mitchell Gold +Bob Williams, are opening on EastChestnut. West Elm will share the former

Woolworth’s Building with Lucky Strikebowling alley, a new and popular enter-tainment concept. Peter Iacovoni, manager of SpecialProjects, Office of the CityRepresentative/Commerce Department,attributes the new energy on ChestnutStreet to several factors – reopeningChestnut Street to vehicular traffic in thelate 1990s, the Center City residentialboom, high rents on Walnut Street and,finally, achievement of the critical massessential to producing foot traffic suffi-cient to support a whole new generationof Chestnut Street retail and restaurants.

Retail Resurgence on West Chestnut Street

Among the factors in the dramatic resurgence of West Chestnut Street are, from left, the new DiBruno Brothers, the renovated and expanded Boydsand Stephen Starr’s highly successful Continental Midtown.

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Dress (Your Center City Building) For Retail Success

Retail success depends on a complex array of factors, not the least of which is store-front design. Yet on only a small budget, property owners and retail tenants canoptimize their buildings for retail success and, in turn, enhance the image of CenterCity as a vital shopping district. Architect Robert F. Keppel of Cope Linder Architects offers some simple guidelines:• Maximize the use of clear glass. Avoid paper signs and opaque or tinted windows.“Passers-by should see that the store is open for business with interior activity in thesales area clearly visible from the street,” he says. • Keep your storefront and display window illuminated. If the windows above yourstore are dark at night, light them up from the interior. Providing after-hours lightingwithin the store will also create an attractive glow along the sidewalk, enhancing secu-rity and encouraging evening window shopping.• Use the full height of your storefront glass to give your shop a greater presence onthe street. If the interior ceiling needs to be a bit lower for ductwork, hold those ductsback from the store window by about ten feet to allow a ceiling transition. If the highertransom glass has been painted or covered over, consider restoring the clear glass.• Preserve any historic building features and use them to give your store a distinctivequality. These interesting details are part of the experience that makes Center Cityshopping unique.• Conceal security grilles above the interior ceiling, behind awnings or within anarchitectural cornice. An open grille style is required for after-hours visibility.• Your store sign should be simple and distinctive and can incorporate logo artwork.It should be placed appropriately on the storefront above the window — without cov-ering any part of the window area or other important architectural elements.Well-crafted individual dimensional letters are recommended — avoid box signs.Keep the sign text short and simple. Lettering on storefront glass should be sized andpositioned for pedestrian legibility and can include more specific messages such asstore hours.• Keep your storefront clean and uncluttered. “Sparkling clean glass, illumination, attractive window displays and signs — these arethe visual elements that help draw shoppers,” says Keppel. “People are attracted to districts where merchants collectively create a sense of quality and a memorable shopping experience.“At the bare minimum,” he adds, “maintain it and light it up. It requires only a min-imum investment, with a great return.”

These renderings illustrate some basic ele-ments for good storefront design: lots of clearglass, attractive signs and incorporation of distinctive or historic architectural features.

Attracting retail is one aspect of theCenter City District’s mission to rein-force Center City as a thriving 24–hourdowntown, and a premier place to live,work or play. The CCD’s retail locationkit is an invaluable tool to tell prospectiveretailers the benefits of locating in Center City. This year, the CCD has redesigned,reformatted and rewritten the kit, to giveit an updated look and make it easier touse. But it still contains all of the datanecessary to make retail location deci-

sions: up-to-date facts about downtowndemographics, transportation andspending; the CCD’s latest retail surveyfindings; market trends; detailed looks at each of five downtown retail zones; pedestrian counts and maps and listings of all major downtown developmentssince 1992.The kit is free upon request by contacting the CCD at 215-440-5500 or by email at ksims@centercityphila.org.Or download sections of the kit atwww.centercityphila.org.

The CCD also offers a complete listing ofall Center City retailers based on its June 2005 survey, sorted alphabeti-cally, by retail type or by address for $60 each. To order, contact the CCD at 215-440-5500 or by email at ksims@centercityphila.org.

Center City Retail Location KitCh

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The next phase of the Center CityDistrict’s ongoing work to illuminatedowntown sidewalks is underway, withinstallation of $1.6 million in new, orna-mental sidewalk lighting at severallocations in and around Center City. Theproject areas are Washington Square,Pine Street, Market Street Bridge and22nd and Arch streets.Altogether, 157 new, 15-foot-high, pedes-trian-scale lights will be in place by theend of the year. The project is managedby the CCD and funded jointly by theCCD with the generous support of dif-ferent partners in each of the work areas.Since 1996, CCD has completed over $40million in streetscape improvements andhas installed 1,696 ornamental, pedes-trian–scale lights throughout Center City,doubling or tripling the level of illumina-tion of many downtown sidewalks. The Washington Square project includesnew lighting around the perimeter of theSquare and along two adjacent blocks ofLocust Street. The CCD worked closelywith an array of public-sector agencies,including the National Park Service, theFairmount Park Commission and thePhiladelphia Streets Department, toinsure that the lighting plan is sensitive toand appropriate for the historic neighbor-hood. Neighboring private propertyowners have made generous contributionsto make the work possible.

New pedestrian light fixtures will also be installed nearby on four blocks of Pine Street between 9th and 13thstreets. Funding for this portion of the project is from the City ofPhiladelphia, Councilman Frank DiCicco and the Washington SquareWest Civic Association. A new system of pedestrian lighting onthe Market Street Bridge over theSchuylkill River is the first phase of abroad range of pedestrian amenitiesplanned by CCD and the Schuylkill RiverDevelopment Corporation.CCD is also working with a local developer and the Logan Square CivicAssociation to add pedestrian lightsnear a new residential project at 22nd and Arch streets.The project team consists of UrbanEngineers, Pennoni Associates, Inc.,Cope Linder Architects, Seravalli, Inc.and Nucero Electric.

CCD Lights More Center City Sidewalks

In the “what-not-to-do” category comes this example from Broad Street.Planting a bicycle amid downtowngreenery damages the plants and trees,presents a tripping hazard and looksunsightly. The Center City District, with many staff who bike to work,reminds other bike riders to park theirbicycles appropriately.

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Bicyclists: Park It, Don’t Plant It!

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Center City Retail

The Retail Experts Speak

Outdoor Dining Home Furnishings Shops

West Chestnut Street

Practical Matters: How to Optimize Your Buildingfor Retail Success

CCD Lights Sidewalks

Center City District and

Central Philadelphia

Development Corporation

660 Chestnut Street

Philadelphia, PA 19106

www.centercityphila.org

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Pre-sorted First Class MailU.S. PostageP A I DPhiladelphia, PAPermit No. 2545

Fifty of the city’s top arts organizationsare offering half-price tickets to some offall’s most exciting cultural happenings, in addition to hosting free events, duringthe second Center City Arts & CultureWeek, October 20–30.Half-price tickets to an amazing variety of jazz and classical music perfor-mances, theater, dance and museumadmissions are available now atwww.PhillyFunGuide.com — the region’sleading online events calendar. This year’s Arts & Culture Week getsunderway Thursday, October 20 withPhiladelphia’s participation in a NationalFree Night of Theater, sponsored locallyby the Theatre Alliance of GreaterPhiladelphia. Details on how to get free tickets at over two dozen

participating theaters are available atwww.PhillyFunGuide.com.Arts & Culture Week Gallery Night isFriday, October 28. Twenty-one CenterCity galleries will open their doors forspecial talks, complimentary food anddrinks and a wide selection of exhibitions.Special happy hour celebrations are alsoplanned throughout Center City onOctober 21 and October 24–27. Look forlocations and other information atwww.PhillyFunGuide.com. Center City Arts & Culture Week is produced by Center City District, theGreater Philadelphia Cultural Allianceand Rittenhouse Row, and sponsored byMetro and WJJZ.

Sample the Arts During Center City Arts & Culture Week

The Center City Digest is a publication of the Center City District (CCD), a private-sector sponsored municipal authority committed to providing supplemental services thatmake Philadelphia’s downtown clean, safe and attractive; and of Central Philadelphia Development Corporation (CPDC) with 50 years of private-sector commitment to therevitalization of downtown Philadelphia. Editor: Elise Vider Designer: Amy Newnom

printed on recycled paper

Thanks to Husdon United Bankfor our year long partnership.

50% OFF TICKETS, 11 DAYS, 50 EVENTS

OCT 20–30, 2005