One factor that has discouraged Center City job growth has beentaxes. "The city's tax structure--the combined impact of the wageand business privilege taxes--historically undermined thisadvantage, pushing growth and new firm creation beyond cityboundaries and shifting jobs that had been accessible toneighborhood residents beyond the reach of regional rail lines."However, the report saw "a strategic opportunity for officebusiness growth and attraction" in Mayor Michael Nutter'scommitment to regulatory simplification and reductions in theBPT.

As GlobeSt.com reported earlier this month, developer WalnutStreet Capital is planning a 1,500-foot mixed-usetower across the street from the Comcast Center, currentlyPhiladelphia's tallest tower, and other skyscrapers are planned forCenter City. "The fact that other developers are proposingadditional office buildings is clearly a sign of confidence andinterest in the downtown," Paul Levy, president and CEO of CCD."The fact that they are exploring how to connect that building tothe transit concourse underground shows the importance of theregional transit system that brings almost 300,000 people downtowneach day. The fact that Philadelphia elected a mayor who was astrong proponent of wage tax reduction and is now proposing to cutthe BPT and reduce regulatory barriers also sends a strong messagethat Philadelphia is business-friendly."

Office vacancy rates continue falling, reaching 10.6% byyear-end '07 and projected to reach 9.6% by year-end '08, accordingto the report. Positive absorption was 887,111 sf. "Over the last23 years, Center City has averaged net positive absorption of421,288 sf per year," according to the report. "But with new localpolitical leadership committed to more aggressive tax reduction andwith a well-funded, regional business marketing campaign, downtowncould be poised for more growth, so long as there is no significanteconomic downturn."