PHILADELPHIA-The City's Business Privilege Tax came under fire during a forum titled, "Creating a Competitive Office Sector," hosted by Central Philadelphia Development Corp. "It's time to think big again," said Paul Levy, CPDC's executive director.

He cited Cira Centre, the new, fully leased tower at 30th Street Station, as an example of the benefits that can come from elimination of the BPT. Cira Centre is located in a Keystone Opportunity Zone, which provides tax breaks for approximately a decade.

Estimating that the BPT adds the equivalent of $5 per sf to Downtown office tenants, Christopher Leinberger, a Philadelphia native who is now a Brookings Institute fellow, said the current rental rate of $24 per sf "does not justify new office construction. If that $5-per-sf went to rent rates, developers could justify building." Leinberger, who is also professor in the University of Michigan's graduate real estate development program, outlined a 20-year timeline for making Downtown office markets competitive.

The earliest components, which include urban entertainment and rental housing, followed by for-sale housing, are in place here, he said. "If anyone had forecast 10 years ago what has taken place in Center City, no one would have believed them." He rated Philadelphia a "gold" city versus "platinum, because office is not back." He also urged for more affordable Downtown housing, calling it "vital. We don't want to create another Upper East Side."

Improvements to the subway system and "work on the ruinous tax system," were among his other recommendations. He also said, "water is the gold of Philadelphia, which has not focused on its water. Give up on the Delaware for now," he advised, "and concentrate on the Schuylkill, which could be the most romantic river in the country." He urged a merger of University City, which is west of the Schuylkill, and Center City to the east.

The quality of life that created suburban sprawl "is increasingly difficult to sustain," said John Gattuso, SVP of Malvern-based Liberty Property Trust. "Baby boomers are less enamored with their cars." Gen X, and Gen Y like Center City and towns like West Chester, he said, adding, "it's been difficult to draw graduates from Harvard or Penn to suburban offices."

The argument that taxes are needed to provide services "is a false choice," he added. "An increase in the number of businesses raises tax revenues." Both Gattuso and Levy said that regardless of opinions about gaming, gaming revenue will help reduce the BPT.