Jefferson Health CEO Floats Moving HQ Out Of Center City
The Philadelphia region’s largest hospital operator might be moving its headquarters out of Center City in the latest potential economic blow to the area.
Jefferson Health CEO Joseph Cacchione said he’s considering the shift following the system’s merger with the Lehigh Valley Health Network last year.
“One of the things we have to think about, as much as I hate to say it, is does it make sense for our headquarters to be [in Center City],” he told the Philadelphia Business Journal. “A third of our health system is in the Lehigh Valley, so there's an inefficiency to that.”
Jefferson’s headquarters occupies about 230K SF at 1101 Market St., where it moved in 2019. There are currently about 2,000 employees working at the site.
While a move is not imminent, Cacchione told PBJ he’s discussed the plans with Mayor Cherelle Parker.
“She is quite concerned about it,” he said, according to the PBJ. “Jefferson is probably the largest employer in Center City right now. We have probably $96 million of wage tax that are paid to the city.”
Should it move, the system will retain a “strong presence” in Philadelphia, where it was founded more than two centuries ago, Cacchione said.
The mayor’s office and Jefferson Health did not immediately respond to Bisnow’s requests for comment.
Jefferson and LVHN officially announced their plans to merge in December 2023. The deal was finalized the following August.
The joint system now has 32 hospitals and more than 700 care sites stretching from Northeast Pennsylvania to South Jersey.
The potential move out of Center City comes as Jefferson and other hospital operators expect to see their profits slip amid the Trump administration’s ongoing pruning of the federal government.
“The headwinds are strong, and they’re absolutely going to impact our bottom line,” Jefferson Central Region President Dixie James said at a Bisnow event last month. “The changes that are coming down are going to take revenue away while costs continue to increase.”
In many cases, large companies can save money by moving out of Philly to avoid city taxes.
The city’s Tax Reform Commission convened by Council President Kenyatta Johnson recommended significant business tax cuts in its report that it released last month.
“It is well known that if you are small or experience modest success, you can stay in Philly,” said an unnamed business owner quoted in the commission’s report. “Once you reach a certain level of income, the burdensome tax system means you need to move your business across City Line Avenue.”
News of Jefferson’s potential departure from Market East comes just weeks after Macy’s announced it would be closing its store in the Wanamaker Building.
Meanwhile, many lawmakers and stakeholders had hopes for revitalizing Market East. These hopes were pinned on a new Philadelphia 76ers arena slated for the corner of 12th and Filbert streets.
The team reversed its plans after gaining city council approval. It is now building a new arena in South Philadelphia with Comcast Spectacor and the Philadelphia Flyers.
