Center City District says ‘it might be time to stop talking about recovery’ and start looking toward Philly’s new reality

For the last few years, Center City District has focused on measuring the strength of Philadelphia’s downtown compared to what it was before the COVID-19 pandemic.

The business improvement district’s latest annual State of Center City report, released Wednesday, continues to make those comparisons. But four years after the start of the pandemic, the organization wants to use its latest data as more of a benchmark for future progress in a new reality rather than a look back at what Center City was in 2019.

Prema Katari Gupta, president and chief executive officer of Center City District, said looking back at Center City’s successes and challenges over the last four years is important, but “it might be time to stop talking about recovery.”

“Maybe our cities will never go back, no matter how hard we will them, to where we were in 2019. And it’s time to embrace the unanticipated strengths but also the exposed vulnerabilities and really work hard to build a downtown that our region needs and that also is the sort of place that it should be,” Gupta said.

“We can build a downtown that is more competitive, more joyful, more equitable, more resilient, and more connected,” she said. “That is really what we’re focused on. So we’re hopeful that this will really begin to start a conversation about the future.”

» READ MORE: Philly is seeing positive trends on income and jobs, but intractable problems remain, ‘State of the City’ report says

Greater Center City remains Philadelphia’s fastest-growing residential area, has 43% of the city’s jobs, and is a regional and international draw for its concentration of arts and cultural institutions, according to Center City District’s report. Its health is vital to the health of the city as a whole.

Pedestrian volume, office occupancy, and retail occupancy have been increasing but aren’t back to where they were before the pandemic.

In the short term, Gupta said, Center City District may use data from its latest report as a baseline to measure growth.

Attracting residents, visitors, and businesses through “improving both the reality and perception” of quality-of-life issues such as ATVs and trash is “top of mind” for the organization, Gupta said.

Here are some takeaways from the report.

» READ MORE: Many people say Center City is unsafe, but Prema Katari Gupta wants to change that perception in her new role

The daily volume of people walking around Center City — including residents, commuting workers, shoppers, and tourists — is now 84% of what it was in 2019. That’s about 375,000 people on any given day.

Gupta said Center City District is considering whether it should still be talking about that missing 16% or should focus on finding new residents and companies.

In February, the daily average volume of pedestrians in Center City was back to January 2019 levels on weekdays between 6 and 11 p.m. and on weekends.

Center City restaurants have more outdoor seating than before the pandemic, despite City Council’s limiting of streeteries.

About 11 million of the almost 26 million people who visited Philadelphia in 2023 stayed in or visited Center City.

Hotel occupancy downtown was about 61% last year, up from 56% in 2022. Most of Center City’s arts and cultural organizations attracted more visitors in 2023 than the year before but fewer visitors than in 2019.

» READ MORE: 42.9 million people visited Philly region in 2023 — but tourism officials hope more are on the way

The number of people who live in and around core Center City continues to grow. More than 201,000 people live in greater Center City.

More housing units were completed in greater Center City last year than in any of the last five years.

Philadelphia has one of the largest populations of people living downtown in the country, and its mixed-use nature “is the envy of many peer cities,” Gupta said. She pointed to Philadelphia’s rank as a top converter of buildings from nonresidential to residential uses.

To help Center City attract residents to fill the record number of new homes, Gupta said Center City District is thinking about doing something the organization has done in the past: marketing Philadelphia’s downtown to people living in other cities.

Office occupancy rates are down from a peak of 91% in 2018 to 82% at the end of 2023.

The volume of workers who don’t live in Center City who are back in their downtown offices on a given day hit 70% of 2019 levels at the end of 2023.

“It’s not perhaps where we want to be, but it is where we are,” said Center City District’s vice president of economic development, Clint Randall, who added that Philadelphia’s downtown has done a better job recovering office workers than other major cities.

» READ MORE: The three emptiest office buildings in Philadelphia

He pointed to large employers such as Comcast and Independence Blue Cross that have required workers to be in the office more. Center City District is hopeful that more companies will follow, and the number of workers downtown will creep up further.

Even as some companies pull back on office space, the insurance firm Chubb plans to occupy an 18-floor tower under construction at 2000 Arch St.

But about 8 million square feet of office space in Center City is vacant, compared to about 5 million in 2020.

Center City District found that people with shorter commutes are more likely than people with longer commutes to be back in offices. Workers who live within two miles of their Center City office are back at more than 90% of 2019 levels.

Greater Center City’s residential boom “is basically future-proofing us as a work destination,” Randall said.

Center City District highlighted its programs aiming to add value for office workers, such as the 20-year-old Center City Sips happy hour promotion and new morning pop-up events with giveaways and entertainment near office buildings and transit centers.

» READ MORE: What employees returning to the office means for Center City: Highlights from our Reddit AMA

Retail occupancy across Center City hit a record low of about 55% during the summer of 2020, down from a peak of 89% in 2019. It’s been rising since 2021.

As of January, about 85% of Center City’s storefronts were occupied.

» READ MORE: West Elm and Kitchen Kapers are Center City’s latest retail vacancies. But don’t call Philly’s downtown dead.

Some legacy retail brands, such as West Elm and Kitchen Kapers, have left Center City. Other businesses, such as the athletic apparel brand Alo Yoga, the miniature golf venue Puttshack, and the athletic apparel brand Vuori, have come to Center City. Figs, a scrubs and medical apparel company, is one of the businesses scheduled to open there this year.

Digital-native brands opening brick-and-mortar stores are helping to drive retail leasing downtown, according to Center City District.