The construction timeline for a new arena in the South Philadelphia Sports Complex could accelerate now that the city has been awarded a WNBA expansion team.

Philadelphia will be getting a new WNBA team in 2030.

News about the franchise set to debut in the 2030 season came in a Monday press release. It will be owned by Harris Blitzer Sports & Entertainment, the parent company of the Philadelphia 76ers.

The WNBA is also adding new teams in Cleveland and Detroit. All three cities paid a $250M expansion fee, five times the $50M the Golden State Warriors paid to bring the Valkyries to the Bay Area in October 2023. All three teams plan to invest in building practice facilities and other amenities, though few specifics were available Monday.

“Philadelphia is a city with unmatched passion, rich basketball tradition, and an unwavering love for its teams,” WNBA Commissioner Cathy Engelbert said in a statement. “It’s only fitting that this iconic sports town is finally home to a WNBA franchise.”

Other cities that bid on a hometown franchise include St. Louis, Austin, Nashville, Miami, Denver, Charlotte, Houston and Kansas City, Missouri.

Philly’s new team will play at the same new venue set to house the Sixers and the NHL’s Philadelphia Flyers.

Construction is set to wrap up in 2031, but HBSE Managing Partner Josh Harris told The Philadelphia Inquirer he would like to expedite the project so the new team can play there during its inaugural season.

If that doesn’t come to fruition, the team will debut at the Wells Fargo Center, where the Sixers and Flyers play now.

“Philadelphia is one of the most storied basketball cites in the world and our region is home to some of the best women’s players and coaches to ever grace the hardwood,” Harris said in a statement. “It’s only right that this city gets the WNBA franchise it deserves, and we’re humbled to help usher in a new era of Philadelphia basketball.”

Professional basketball dominated headlines in Philadelphia much of last year as the Sixers worked to garner support for a controversial new arena on Ninth and Filbert streets in Center City.

The team ultimately gained city council approval before pivoting back to South Philly in January.

The arena replacing the Wells Fargo Center is a joint venture between HBSE and Comcast Spectacor, which used to own the Sixers and regained a small stake in the team through the agreement.

The pivot away from Center City raised big questions about the future of the struggling Market East corridor, most of which remain unanswered six months later.

City officials have announced a master-planning process for the neighborhood, but few details have been shared with the public.

Transwestern Real Estate Services (TRS) closed the sale of Hudson Medical Center to Hammes Partners, a private investment platform focused exclusively on healthcare real estate.

The seller, Hudson Medical LLC, was represented by Transwestern’s Frank Richie, Mike Salmen, Erik Coglianese and John Huff. Completed in 2023, Hudson Medical Center is a 160,000-square-foot, multi-specialty medical office building and ambulatory surgery center located in a high-growth corridor in Hudson, Wisconsin, within the Minneapolis-St. Paul metropolitan area.

“Although capital markets were disjointed in 2023, the seller capitalized by offering a high-quality product along with excellent tenancy to drive a strong sale price,” said TRS Vice President Frank Richie. “Additional proceeds from an interest rate swap delivered a strong yield for the project as well.”

Featuring an ambulatory surgery center and orthopedic field house, Hudson Medical Center was awarded the 2023 Medical Project of the Year by the Minnesota Real Estate Journal.

Photo courtesy of Brandon Stengel

An Amtrak train in Los Angeles

Amtrak is on the verge of significant expansion to as many as 160 new communities thanks to the new trillion-dollar federal infrastructure bill.

The $1.2 trillion Infrastructure Investment and Jobs Act, passed late Friday by the House of Representatives, will deliver more than $100B in investment to passenger and freight rail, Construction Dive reported. Of that amount, $19.2B specifically will be earmarked for Amtrak investment, the American Public Transit Association said. 

By 2035, the nation’s passenger rail service could reach more cities with 30 new routes and establish more frequent service on at least 20 existing lines. Major projects include a new $11B Hudson River Tunnel between New Jersey and New York that could begin construction in 2025.

Amtrak over the summer projected a $117B price tag for massive expansion by 2035, including shoring up the important Northeast Corridor, which it said was overdue for renovation.

“The Northeast Corridor is such a massive part of the Northeast economy, and the Northeast economy is such a huge driver of the national economy,” Real Estate Board of New York Senior Vice President for Government Affairs Reggie Thomas told Bisnow earlier this year.

Plans to upgrade the 450-mile corridor from Washington, D.C., to Boston by 2035 could spur $195B in economic activity and support more than 26,000 permanent jobs, Amtrak’s study earlier this year found.

Amtrak could also introduce service between thriving Southeast metros like Atlanta to Charlotte and Atlanta to Nashville, as well as farther north between Cleveland and Detroit. The nation’s largest metro without Amtrak service, Columbus, Ohio, could also get service with a new Cincinnati-to-Columbus-to-Cleveland route. 

The routes would reach previously underserved communities, which could come alongside improved public transportation and transit-oriented development, William Murdock, executive director of the Mid-Ohio Regional Planning Commission, told Construction Dive. 

The trillion-dollar infrastructure bill will also send $110B toward roads and bridges and $39B for public transit improvements. Biden said he would sign the bill once lawmakers return from a weeklong recess, Time reported. 

The coronavirus pandemic created a work-from-home revolution that may lead to a decline in tax revenues from commercial properties, and cities will suffer as they cannot provide important services to residents, a new report warns.

If current trends persist, demand for commercial real estate space could drop by 12% to 25% in key cities, leading to a correlated drop in assessed values, and thus in city property tax revenue. The full effects haven’t yet been felt because federal funding from the American Rescue Plan has so far cushioned the blow, but city leaders should prepare.

That’s the takeaway from a new report titled “Impact of Work From Home on Commercial Property Values and the Property Tax in U.S. Cities,” commissioned by the Communications Workers of America.

The pandemic could result in empty workspaces.

The report was authored by researchers from the City University of New York and the University of Illinois at Chicago and released Thursday by the Institute on Taxation and Economic Policy.

“Though magnitudes vary somewhat across cities, all face significant fiscal risks,” the report says.

Researchers focused on eight cities — Atlanta, Austin, Charlotte, Chicago, Los Angeles, Miami, New York and San Francisco — where commercial real estate accounts for an average of 37% of property taxes, ranging from 26% in LA to 56% in Atlanta. A high proportion of white-collar jobs in these places can be performed out of offices and have a ripple effect on the economy.

Using data from the Bureau of Labor Statistics Quarterly Census of Employment and Wages, the researchers tracked employment changes in 2020 by city and industry. Even with no change in space per worker, employment effects alone will cause the value of commercial real estate to fall by an average of 6% — from 1% in Austin to 13% in San Francisco — they found. With two days or less of work-from-home, that number rises to 12%, and three or more days of work-from-home, it’s 25%.

The report found that New York and San Francisco are the most vulnerable of the eight cities, with predicted commercial price drops ranging from 25% to 43%.

“Declines are smaller, but still significant, in the other cities,” the report says. 

Using a special database on city finance, the researchers translated the decline in CRE property values into effects on property tax and city revenues. Larger cities with diversified revenue structures won’t feel as much impact, but smaller cities like Austin and Miami, which are more dependent on property tax, will have to adjust.

The analysis found that Atlanta will have the largest revenue effect, with an estimated 5.7% loss. Austin, New York and San Francisco face revenue losses between 2% and 4%.

Cities and states have gotten fiscal relief this year under the federal American Rescue Plan, but those funds will phase out between 2022 and 2024. The report’s authors say that one future solution may be to divert funds away from suburbs to city centers most affected — but warn that any reallocation is likely to draw “furious resistance” from jurisdictions that would be the perceived losers in any such shift.

The authors said there’s a “paradox” in cases like Florida and Texas. Political leaders tout low taxes and no income tax, but those states will soon see economic detriment in their major cities as they face negative impacts from the increase in working from home.

Some leaders have long predicted these problems. In Texas, lower taxes, light regulation and cheap housing lured 4.2 million people and hundreds of corporations in the past decade, but left little revenues for infrastructure improvements and social services — deficiencies that were evident during a winter storm and a massive power outage last winter.

“We are not sufficiently looking down the road. And we’re not sufficiently investing,” former Houston Mayor Annise Parker, who led the city from 2010 to 2016, told Bisnow in February.

“The bill will come due,” University of Houston Political Science professor Brandon Rottinghaus told Bisnow.

Now that remote work has proven to be a viable option for millions of American workers and the companies they work for, a migration from more expensive places to less pricey ones has begun.

San Francisco. Though prices have dropped a bit recently, it remains the most expensive place to rent an apartment in the country.

As yet, evidence of a permanent work-from-home movement is still largely anecdotal. Facebook, for instance, has said that it plans to enable as much as half of its 45,000 workforce to work from home. Twitter and Shopify are allowing most of their employees to work remotely as well.

Roughly 75 million U.S. workers have jobs that could be done remotely, or about 56% of the total workforce, according to Global Workplace Analytics.

The company further estimates that at least a quarter of the U.S. workforce, and perhaps as much as 30%, will work at home at least a few days a week by the end of 2021 because workers will want that and managers have lost their previous reluctance about it. It doesn’t estimate how many will be full-time remote, but it seems probable that some millions of the total will be.

It turns out that there are economic development agencies and other organizations nationwide that are willing to help the process along by paying remote workers to move. The movement of such workers is only a trickle now, but considering the sharp difference in the cost of living in various places, that migration has the potential to grow.

“From everything we see in our data, the migration to higher-quality of living hubs is going to be real,” Zumper CEO Anthemos Georgiades told Bisnow in an email. 

“That doesn’t mean that San Francisco residents are all about to move to outer Montana, unlike what you may read on Twitter,” he said. “[But] the migration is real.”

In short, people are interested in leaving expensive places like the San Francisco Bay Area, where a one-bedroom averages $3,360/month. Zumper data hints at the beginning of the trend: Bay Area residents’ searches to move have increased 11% between January and April.

At the same time, the relatively low-priced metros of Charlotte, North Carolina (one bedroom, $1,170/month), Indianapolis ($860/month) and San Antonio ($870/month) were the top cities renters were interested in moving to so far this year, according to Zumper. Of those, 40% or more of inbound searches came from outside of their respective metro areas.

The cost of housing isn’t the only component of a region’s cost of living, but it is a critically important one, and in some places, it can be a millstone around the necks of workers already burdened with the likes of student loan debt and high healthcare costs.

“There will be movement away from more expensive places because the remote workforce model has arrived,” said TransparentBusiness Chief Transparency Officer Moe Vela, whose company specializes in tech that facilitates remote work. 

“It’s a permanent change,” Vela said. “Not everyone will work remotely, of course, but many more workers will do so in the future. It took a tragic circumstance to move us in that direction, but businesses have seen that efficiency and productivity go up among remote workers. So more employees are going to be relocating, and they’re going to be looking for the best cost of living.”

A number of places are explicitly trying to recruit remote workers to relocate. Typically the programs offer cash upfront to workers who are already employed full time, but are able (and willing) to relocate.

Tulsa, Oklahoma, kicked off a program in late 2018, Tulsa Remote, funded by the locally based George Kaiser Family Foundation, that offers $10K distributed over the course of a year to eligible remote workers willing to move to the city. The program also provides a year membership at a local coworking space.

The first year of the program had 100 slots, and its organizers expected 1,000 applications altogether. That many applications came on the first day of the program.

“The response to Tulsa Remote has consistently blown away all expectations each year,” Tulsa Remote Executive Director Aaron Bolzle said. “We currently average nearly 10,000 applications a year and continually evaluate and expand our program based off of demand.”

Rather than reduce interest in the program, the coronavirus pandemic has increased it, Bolzle added. The 2020 version of the program will offer awards to 250 participants, he said.

“Applications are now rolling in and driven, community-minded individuals with the ability to work remotely are encouraged to apply,” Bolzle said.

Tulsa, Oklahoma, which has a program that pays remote workers to move there.

In northwest Alabama, the Shoals Chamber of Commerce and the Shoals Economic Development Authority launched Remote Shoals with a similar goal in mind: attracting remote workers to come to either Colbert County or Lauderdale County, Alabama, and offering $10K to each worker who does so.

The economic component of the program’s pitch is clear: It is a lot cheaper to live in this part of the country. The program’s website offers a way to scroll through comparable costs between Shoals and other places. 

For example, the overall cost of living compared with San Francisco is 58.2% less, with an average rent savings of $2,125 or an 86% average lower cost for those wanting to buy a house. That is only the most extreme example, with the site also comparing the Shoals favorably in terms of cost to Atlanta, Chicago, Nashville, New York and other places.

“We stress the quality of life, which is good here, but what really seems to get people’s attention is the cost of living,” Shoals Economic Development Authority President Kevin Jackson said.

The program began last year with 10 remote workers paid to move to the area, Jackson said. This year, the total will be 25.

“We’ve had a good response this year, despite COVID, with over 250 applications, and we haven’t done any advertising or a social media push yet,” Jackson said, with people interested from all over the country, including some high-priced places like San Francisco and New York.

“Not all of the applicants are from expensive places to live, but a lot are,” Jackson said. “People are tired of making almost six figures, but still living almost at poverty level. They’re also looking to start families, the Shoals is a good place for that.”

Other programs to persuade remote workers to relocate include a statewide initiative in Vermont, launched in early 2019, that is paying about 70 relocating remote workers as much as $10K over two years. It is a reimbursement program rather than upfront grants, and as of 2020, had awarded all of the funds allocated, though the state legislature might authorize additional funding.

Last year, Colorado’s Office of Economic Development and International Trade unveiled Colorado’s Mutual Prosperity Program, which doesn’t pay workers directly, but it incentivizes businesses to hire people who live in rural parts of the state to do remote work. 

Under the program, rural and urban economic development organizations work together to solicit new or expanded businesses that hire employees in both locations. The incentive will be paid at the end of five years, based on the number of permanent new rural jobs created.

The Colorado program, which started in early 2019, pays on a sliding scale according to how many net new jobs are created. For one to 10 new jobs, it shells out $2.5K/job; 11 to 15 jobs, $3K/job; and if more than 16 jobs are created, it will pay $5K/job.

Other remote-worker incentive programs are specific to the tech industry. In Savannah, Georgia, the Savannah Technology Workforce Incentive, which was unveiled just this month, will offer $2K for moving expenses for remote tech workers coming to the city. It will pay as many as 50 workers to relocate by the end of this year.

“This incentive is a great way for technology workers that can work remotely to think about relocating to Savannah as a permanent location,” Savannah Economic Development Authority CEO Trip Tollison said in a statement. “We know once these technology workers arrive, Savannah, and its diverse offerings and high quality of life will sell itself.”