On the other are three of the region's biggest, most powerful real estate companies and several large employers that want to rent space in their new buildings.
Both sides have hired powerful law firms, lobbyists and business associates to advance their positions. All are putting pressure on Gov. Rendell and Mayor Street as well as members of the Pennsylvania General Assembly and Philadelphia City Council.
The most visible issue is the proposed tax breaks and other public assistance to help build three office buildings:
Liberty Property Trust's One Pennsylvania Plaza next to Suburban Station on John F. Kennedy Boulevard, between 17th and 18th Streets.
Brandywine Realty Trust's Cira Centre next to Amtrak's 30th Street Station.
Oliver Tyrone Pulver Corp.'s Parkway Plaza at 15th and Arch Streets.
But the tax breaks did not start the hubbub. The stage was set long before the cable-television giant dreamed of taking over Walt Disney Co. or moving into the proposed 60-story One Pennsylvania Plaza.
The key ingredient, real estate experts say, is that dozens of major leases, including those of Comcast and other major Center City employers, are expiring about the same time.
"If you're going to put up a brand-new building, you've got to do it when leases are rolling. There's not going to be an opportunity to do that again for a long time," said Hether Smith, manager of the Philadelphia office of the Julien J. Studley Inc. real estate firm.
In this cycle, several other factors are adding intensity. First, economically depressed Camden has made enough progress that its boosters say it is time for a big step forward. And 40-plus expiring leases just across the river give it a rare opportunity to bring a high-profile business to its waterfront.
Second, the possible departure of one or two major employers from Philadelphia and downsizing of those who stay could leave the equivalent of two skyscrapers vacant when this lease-renewal cycle is over, a chilling prospect for owners of older buildings. Adding new towers would make things even worse. By some estimates, vacancy rates could reach 20 percent within a few years.
Third, the report of the Philadelphia Tax Reform Commission, which was created by voters in 2002, was delivered in the heat of this cycle. Its systematic plan for a "tax structure that no longer inhibits and impedes economic prosperity" is a once-in-a-lifetime opportunity to deal with the city's high and outdated set of business and wage taxes. Its backers worry that the proposed skyscraper tax breaks will leave the city too poor to implement the commission's proposed broad tax cuts.
And there is also the rupture in the long-standing relationship of Rendell, who needs Republican allies to get things done in Harrisburg, and Street, who is seething over the state takeover of the city parking authority led by Republican House Speaker John Perzel.
Virtually all new Center City skyscrapers have required substantial government assistance to offset the initial rental gap between new and old buildings, said Peter Longstreth, president of the Philadelphia Industrial Development Corp., the city's economic development agency.
But this new-building window comes at the end of a recession that has left state and local governments with little money to spend on development incentives. So they are left to offer controversial tax breaks.
The proposed Comcast deal would exempt it from many city and state business and property taxes until 2018. Its employees would continue to pay the city's wage tax.
Another controversy has been stirred by breaks given two law firms, Dechert L.L.P. and Woodcock Washburn L.L.P., that have announced plans to move to Brandywine's Cira Centre. Because law firm partners receive a share of the profits instead of wages, their deal would have a more significant impact on the city treasury than a similar break granted a corporation.
Government-backed low-interest loans have been a common way to help launch new development, and they usually stir little controversy. But with interest rates already low, these have little value, Longstreth said. Putting Comcast in a new skyscraper, taller than any other between New York and Chicago, will usher in a new era of growth for the whole region, Rendell declares.
Rendell and the developer of Comcast's new building have promised to link the tax break to creation of new jobs. Comcast, which now has 1,100 employees in Center City, would, if the deal goes through, move 900 jobs here from other states, Rendell said.
Comcast is seeking options for additional space at One Pennsylvania Plaza that would allow it to grow to 4,000 jobs over several years, he said.
Some real estate executives, particularly those who represent tenants who benefit from increased competition among landlords, agree with Rendell.
"We should do everything we can do to encourage Comcast to grow . . . it would attract so many industries," Julien J. Studley's Smith said.
The cost difference, which must be reflected in rental rates, between old and new office buildings is dramatic.
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Comcast is now in Centre Square, the two-building complex with the giant clothespin on its plaza at 1500 Market St. That building was acquired by HRPT Properties Trust of Boston for $180 million in 2002, according to CoStar Group, the real estate information provider. That is about $100 per square foot.
Comcast's proposed new headquarters, 60-story One Pennsylvania Plaza, would cost an estimated $385 million, or more than $320 per square foot.
The overall impact of new buildings would be positive, proponents say.
"The tenants in C class buildings will have a chance to move up to B class, while many in B class will move to A's, and A's will move to A-plus buildings," said Smith, the Julien J. Studley manager.
Rental rates in some older buildings may fall low enough to lure jobs back to Center City from the suburbs, she added.
The feared exodus from Center City will not happen, Rendell said last week. The PIDC's Longstreth agrees. "We're making a lot of progress on all fronts," he said.
City Commerce Director James J. Cuorato, who has resigned effective early next month, said he, too, was confident. His main worry is Towers Perrin, which has aggressive offers from Cherry Hill and Chesapeake, Va.
Towers Perrin says it will keep all 1,400 jobs, now in Centre Square and Mellon Bank Center, in Center City if it can be in Parkway Plaza, an office building Oliver Tyrone Pulver Corp. wants to build at 15th and Arch.
Donald Pulver, chief executive of the Conshohocken-based company, has hired Skidmore, Owings & Merrill L.L.P., the renowned Chicago architectural firm that designed the Sears Tower, to design the building for Towers Perrin. Because the building is what its developer calls "the economical size" - at 16 stories not so tall that it needs a second bank of elevators, for example - the old-new cost differential there is less than at One Pennsylvania Plaza.
Cuorato said the city was working hard to craft a deal with Towers Perrin, fast enough to meet its schedule.
This storm will blow for several more months. By summer, the major real estate decisions will have been made, the brokers involved believe.
Contact staff writer Henry J. Holcomb at 215-854-2614 or hholcomb@phillynews.com.
