Phila.'s aerial act a good sign

Posted: August 08, 2012

Mayor Nutter took me for a ride the other day. He wanted to show off a ballet, the aerial sort that requires a little distance and altitude to see.

So we drove up to Broad and Cecil B. Moore, where Temple is building a high-rise dorm, and soared 21 stories in an open cage.

There, we could see river to river and beyond, a breathtaking view of energy and sprawl. The mayor was looking for tower cranes.

He said he'd noticed a few of these massive steel supports around the city as he made appearances at groundbreakings, and a few is a lot, given how much investment each one represents.

From our perch, Philadelphia looked like post-Wall Berlin. Thirteen tower cranes bopped in the skyline, starting in the east, with Penn Medicine's expansion at Washington Square, and ending with projects at Penn, Drexel and Children's Hospital.

"I haven't seen cranes like that in who knows when," the mayor said.

We couldn't see the smaller cranes - part of 30 major construction projects taking place now that represent more than $2.2 billion of investments in Philadelphia.

As you'd imagine, higher ed and health care institutions are building the most. Eight apartment complexes and condos are also rising, with the money from places like Chicago and Washington.

Most striking is the fact that 26 of the projects receive no public subsidies. They're making it on their own.

When was the last time Philadelphia saw so much construction? Here's one view:

The tower crane business dried up in 2009, several months after the economy melted down in 2008, said Bill Pace, vice president of sales for AmQuip. His company scrambled to mothball its 130 massive cranes.

In December AmQuip leased out its first tower in Philadelphia in several years, to Temple. The company has since rented five more, and has orders for an additional seven for jobs beginning over the next six months.

"I've been doing this 27 years," Pace said, "and never have I seen this many tower cranes up at one time."

Lenders, he explained, are finally opening their wallets.

Nutter's take is that Philadelphia is a good investment.

"It's a sign of confidence," he said "It's a sign of what they think of us."

I thought they saw us as a closed shop with brutal labor costs.

Kevin Gillen of Econsult Corp., an economic-research firm in town, figures that the $63 an hour that union workers here make, on average, is twice as much as their brethren get in Washington, and just $10 an hour less than the rate in New York.

One cost of doing business has been unavoidable this spring if you've passed by 12th and Wood, where the Pestronk brothers are converting a loft into apartments. Their desire to mix union and nonunion labor has led to pickets, beatings, tire-slashings, and extra policing.

Because the mayor was a captive audience, I asked him what he thought of the confrontations.

"What's happening at 12th Street is unusual," he said. "It's not the common experience here at all." He said the developers never asked for the city's input or help with their plan of mixing the workforce.

"Obviously, something's gone a little haywire. People have a right to protest. No one has a right to violate the law. The violence," he said, "is certainly not acceptable and doesn't help in terms of our reputation."

Deputy Mayor Alan Greenberger, along for the aerial tour, suggested that looking at the costs makes no sense without considering revenue. Obviously, he said, developers have figured out ways to make a profit here.

Jim Pearlstein is building two projects in town without public subsidy, the Granary shops and apartment at 20th and Callowhill, as well as the Sansom, on that street's 1600 block. I asked him about the numbers.

"The investments are working with the high cost of construction," the Center City developer said by phone. "Construction is very expensive, whether union or nonunion. The key is that the demand for tenants is there. Rents are going up. That brings institutional investors. Philadelphia is now an upper-tier city for investment. The difference between Philadelphia now and eight years ago is night and day."

Gillen said he'll be fully impressed when he sees people building market-rate office spaces.

"Philly hasn't had any such development on a meaningful scale in 20 years," he said. "When we start adding new office space that doesn't require any special tax breaks or subsidies, that will be the true mark of commercial building revival."

Daniel Rubin:

In Wednesday's Inquirer: When crime shakes the confidence of those who sell Philadelphia.


This column about growth will be followed by one about crime. Confident in Philadelphia's future? Concerned about its present? Comment on my Facebook page, at We're looking for ideas.


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