‘It Doesn’t Help When Somebody Gets Stabbed To Death’: Rising Crime, Neglect Threaten Center City's Future

Sometimes a locked door is just an inconvenience. But a barred Market Street entrance at the Philadelphia Marriott Downtown last week symbolized a city teetering on the brink of decline for some panelists at Bisnow’s Philadelphia 2024 Forecast.

Amid a wave of sometimes violent retail theft that has been blamed for shuttering storefronts across the country, the locked door was a potent reminder of an incident that occurred steps away from the event venue 10 days earlier. On Dec. 4, a security guard at a Macy’s store in the nearby Wanamaker building was killed and another injured when a suspected hat thief attacked them with a knife. 

Philadelphia is at a crossroads between recovery and potential spiral, according to Lubert-Adler co-founder and CEO Dean Adler, who characterized it as a “50-50 city” poised somewhere between all-the-way-back metros like Dallas and Boston and the “hemorrhaging” locales of Los Angeles and San Francisco. 

New city leadership has an opportunity to turn things around. But a growing perception of Center City as a hub of crime and neglect threatens to tank its chances of a full comeback.

“It doesn't help when somebody gets stabbed to death across the street at Macy's,” Peter Linneman, principal at Linneman Associates and a former professor at the University of Pennsylvania’s Wharton School, said during a wide-ranging discussion with Adler about Philly’s future. “You can say that's typical or not typical, but that's a headline that reverberates. And that [door] wasn't designed to be closed, right? It's closed for a reason.”

A shift to hybrid and remote work has hollowed out many American business districts, transforming them from vibrant, walkable communities into relative ghost towns where offices sit half leased and actual usage is even lower, foot traffic dwindles and urban cores grow dangerous, Adler said. 

Cities like New York, Boston, Miami, Denver and Dallas have seen robust bounce backs, showing there is a way back, he said. But downtown areas in L.A., San Francisco, Seattle and Portland, Oregon, are headed in the opposite direction.

“And what does it mean to the street level if they’re not vibrant, safe and clean? Cities die,” Adler said.

Philadelphia falls somewhere in the middle of the spectrum, he said, boasting thriving areas like Rittenhouse Square and Fishtown and significant tourist attractions like Independence Hall, which still averages 4 million visitors a year. Yet main corridors like Broad and Market street have become, in a word, “shitty,” Adler said.

Meanwhile, perceptions of lawlessness are on the rise. Those feelings are partially backed by statistics as the city experiences a sharp increase in retail crime but a downward trend in homicides and violent crime this year. Linneman said both he and his wife fell victim to random street violence over the past two years after more than 40 years in the city without incident.

“I got punched while I was walking on Washington Square,” Linneman said, adding that the varied reactions from his urban and suburban friends were telling about the state of the city. Suburban friends all asked how the police handled the situation when they arrived.

“Now, those of you from the city are all laughing, right?” he said. “Because all the city residents said, ‘I hope you didn't try to do anything, I hope you weren't hurt and I assume you didn't report it.’ And that captures the ethos.  … It captures the gap, if you will, in the comfort levels.”

Comfort levels and safety concerns are beginning to have a real dollars-and-cents impact on where retailers spend their leasing dime. In the past year, a growing list of retailers, including Starbucks, Walgreens and Target, have closed down stores, citing shoplifting and organized crime. Target announced in late September it would close nine stores nationwide.

Target's announcement coincided with the National Retail Federation publishing a damning survey on retail crime and a slew of Philadelphia stores, including Apple, Lululemon, Foot Locker and GameStop, being looted overnight.

Though violent incidents are down, Philadelphia retail crime has risen this year. About 8,300 shoplifting incidents had been reported as of this fall, putting Philadelphia on track for a 37% increase and a new retail crime record in 2023, according to a Philadelphia Inquirer investigation. That follows a 50% year-over-year increase in such crime in 2022.

That crime spike hit home for Adler when Lubert-Adler Real Estate Funds’ Sporting Club at the Bellevue lost a major tenant the day after the September looting incident. Spanish retailer Zara had been all set to sign a 40K SF lease when a video of the incident went viral.

“I got an email the next morning saying, ‘Dean, we are so sorry. But after we saw the video, we decided not to come to downtown Philadelphia. We'll go to King of Prussia,’” Adler said. “And I was just shocked. We will survive it. But here we had a chance to really solidify Walnut Street with a major anchor, 40K SF. And we lost it.”

Recounting a recent lunch meeting with Starbucks founder Howard Schultz, Adler lamented the closure of so many coffee shops that had become America’s “urban living rooms.” The chain shuttered 16 store locations across the country over the summer, including one in Philadelphia, after store managers reported a surge in drug use among customers and outsiders as well as an increase in crime in certain areas.

The National Labor Relations Board has since alleged that the coffee giant unlawfully closed at least some of those stores to suppress union activity, but Adler said Schultz told him the decisions stemmed from a reluctance to put young employees in harm’s way and the treatment of shops as public bathrooms by homeless people.

“‘If I put one seat in there, I must provide the bathrooms, so in order to avoid providing the bathrooms, we're gonna do the soulless Starbucks,’” Adler said Schultz told him of the company’s decision to replace stores with pickup-and-leave locations. “This is where companies are going until things turn around.”

To avoid the same fate for Philly retail, Adler called on new Philadelphia Mayor Cherelle Parker’s administration to embark on a beautification initiative for Center City urban corridors in addition to boosting security measures. 

The next five years will be critical in turning the area around or continuing down the wrong path, he said.

“People don't have pride in where they're walking. They don't give a shit,” Adler said. “They'll take their wrapped-up tacos or burgers and throw them on the street because they don't care. So you’ve got to first beautify something so people care. Then when you add the safety and security, it could work. ... [Parker’s administration] can either elevate us closer to the New York model or take us to the Seattle-San Francisco model.”