Saturday, September 20, 2014
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Recession didn't dampen Center City District's outlook

The special-services district's 20-year view shows how far Philadelphia has progressed, but also addresses headwinds, including the city's tax structure.

Recession didn't dampen Center City District's outlook

April showers seem to be bringing lots of opinions about the state of Philadelphia.

Mayor Nutter presented his “State of the City” address to a business audience at the Union League of Philadelphia last week. A few days before, the Pew Charitable Trust’s Philadelphia Research Initiative released its sobering report on how the city is performing, or more precisely underperforming, vs. other cities.

On Tuesday, it was the Center City District’s turn to spin the numbers with its annual glossy publication that certainly sells its subject well.

While the 2011 State of Center City Philadelphia doesn’t delve into the significant poverty and education challenges raised by the Pew report, I’ll credit Center City District president and chief executive officer Paul R. Levy for pointing out a couple of elephants that may not be in the room, but are wandering around the neighborhood.

The first is something I’ve ruminated on in this space previously. The economy of the Philadelphia area, and the city in particular, has had a nice fluffy cushion in its health-care and higher-education sector. They buffer our fall during recessions.

According to the report, available on the Center City District’s website, the health-services sector added 40,300 jobs between 1990 and 2010, reaching 137,200. Patient revenue at Center City hospitals rose 59 percent, to $1.96 billion in 2009 from $1.23 billion in 2000.

Between 2002 and 2009, applications to the 16 higher-ed institutions in or near Center City soared 88 percent, to 90,000. Levy called that a sign of strong demand by students wanting to study here.

If there is one fear I have about the “eds and meds” juggernaut in Philadelphia, it is that the economy may have become too dependent on them. The Center City District report states that health-care and higher-ed employment accounts for 35 percent of all Center City private-sector jobs now.

At times, it feels like colleges and hospitals are the only game in town buying, building, leasing, and expanding. Something could halt that work.

As happy as Levy is with the diversification of the labor force in Center City now compared with 20 years ago, he emphasized that the city needs to begin attracting more office employment from outside the education and health-care sectors to avoid overreliance on them in the future.

He noted that the city had lost fewer jobs during the recent downturn than the suburbs - the first time that’s happened. Philadelphia lost 1.17 percent of its private-sector jobs between 2005 and 2010, according to data from the federal Bureau of Labor Statistics. The 10 counties that make up the suburbs lost 4.34 percent.

Still, a loss is a loss. And that brings up a second point that Levy wanted to make: Philadelphia’s elected leadership needs to resume serious discussions on modernizing its industrial-strength tax structure to address the highly mobile work world of today.

If the city doesn’t, then those 214,433 private-sector jobs the Center City District says make up the third-largest downtown-employment base in the United States will migrate elsewhere. And not necessarily to the immediate suburbs.

Mike Armstrong Inquirer Columnist
About this blog
Mike Armstrong blogs about Philadelphia corporations and business-related topics. Contact him at 215-854-2980. Reach Mike at marmstrong@phillynews.com.

Mike Armstrong Inquirer Columnist
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