Region's Business -- 07 March 2013 by Independence Media

TRANSPARENCY NEEDED AT UNIVERSITIES 2013 BRINGS MORE TAX CHANGES

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REGION’S BUSINESS

PHILADELPHIA EDITION

A JOURNAL OF BUSINESS AND POLITICS

LOOKING FOR MORE

GREEN

The Flower Show’s move to two weekends will increase its economic impact.

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7 MARCH 2013

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7 MARCH 2013

REGIONSBUSINESS.COM

CONTENTS

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Going Green

! After years of

prodding, the Flower Show will run across two weekends. The result will be a greater economic impact, though how much is up for debate.

Society Puts Fresh Face on City

! The Horticultural Society has put its skillls and knowledge to practical use, beautifying numerous spots across the city.

“The problem with political jokes is they get elected.” WILL ROGERS

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13 Transparency

2013 Brings Needed More Tax From State’s Changes Largest What a difference Universities a year makes. Take a

2013: YEAR OF THE INNOVATOR

18 Protecting

Social Media Accounts

look at how nine taxes changed between 2012 and 2013 and how that might have an impact on your business. Some of them may surprise you and it’s just the beginning.

Penn State, Pitt, Temple and Lincoln receive more than $500 million in taxpayer money, but aren’t required to answer requests about how that money is used. It’s time for some transparency ... and some answers.

REGION’S BUSINESS Independence Media Corp. 600 West Germantown Pike, Suite 400 Plymouth Meeting, PA 19462 feedback@regionsbusiness.com Online: RegionsBusiness.com To subscribe: 877.700.6245 or 215.627.6397 Circulation & Distribution: CCN - www.ccndelivery.com Advertising information: 610.940.1656

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Philadelphia City Council approved a bill that would protect employees’ social media accounts.

Risky Business

! Reading the crystal ball of risk management.

PRESIDENT AND PUBLISHER James D. McDonald EDITORIAL DIRECTOR Karl M. Smith ASSOCIATE EDITOR Terrence Casey CONTENT EDITOR Alexis Sachdev CONTRIBUTORS Brandon Baker, Karen Fratti, Don Lee,

Charles Gerow, Timothy Holwick, Eric Boehm, Rebecca Savedow PROOFREADER Denise Gerstenfield ADVERTISING DIRECTOR Larry Smallacombe DIRECTOR OF BUSINESS DEVELOPMENT Deirdre Affel ADMINISTRATIVE COORDINATOR Zelinda Barnes

© Copyright 2013 Independence Media Corp. All rights reserved. Use of material within without express permission of publisher is prohibited. Region’s Business is published weekly on Thursdays and online at www.RegionsBusiness.com. The publisher makes no representations or warranties regarding the advertising appearing in its pages or its websites.

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7 MARCH 2013

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EDITOR’S DESK

Applying Some Basic Math to SEPTA

Karl Smith is the Editorial Director for Region’s Business. You can contact him at ksmith@regionsbusiness.com.

As much as I loathe driving into the city, I love taking the train into the city. I’m not sure if it’s the fact that we didn’t have any real regional train options growing up in the midwest or just the practicality of it, but I love it. So last Thursday was a good day - not only did I get to hang out with some great people at a Philadelphia Bar Association event, it gave me an excuse to jump on the R3 (and, as an added bonus, pick up some treats at the Reading Terminal Market). The train was packed, with our car featuring people filling a good two-thirds of the aisle. This is a good trip for SEPTA, I thought. When a train is that crowded, though, I start to look to see if anyone wins the game of SEPTA Roulette - that’s when someone manages a free ride because the conductor never gets around to asking for a pass or a fare, a symptom of the antiquated, non-automated fare system. As it turns out, the young lady next to me was a winner. She jumped on at the stop after me, exited just before I disembarked and the

conductor never even gave her a second look. Being a sports junkie with an MBA, the numbers started rolling around in my head. Join me on this numeric stroll. For the sake of this exercise, I simplified the rail map down to seven lines (Trenton, West Trenton, Doylestown, Chestnut Hill, Norristown, Thorndale, and the southern tier Elwyn, Delaware and the airport). From there I figured a minimum of three cars on each line at this particular time of day. That’s 21 cars. Next, I arbitrarily picked three as the number of packed trains per morning, making 63 total cars. Now, let’s figure that each car will have at least one winner of SEPTA Roulette and that each winner was ready to pay the $14 roundtrip fare just like me. The result is $882 in lost revenue for SEPTA. That’s not a ton, of course, but there’s no reason to stop there, because that’s just one day; a work week totals $4,410. And over the course of a year, that’s $229,320. That’s not a huge amount, amounting to

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only 0.05 percent of SEPTA’s overall revenue. Still, it’s a conservative number and, after all, revenue is revenue, especially since SEPTA is so heavily subsidized. On the other side, I thought about the impact of an automated pay system, one that would eliminate SEPTA Roulette and ensure that the $229,320 ends up in the coffers. The system should lessen the need for conductors and their hole punchers. Just sticking with these three rush hour trains, let’s eliminate one conductor from each of those trains and assume that means one less man-hour for each train. At roughly $22 per hour, that’s seven lines times three runs (21) or $462 a day. Multiply it out to $2,310 a week or $120,120 a year. Again, all extremely conservative. In the end, it’s clear that the long-awaited automated, pre-payment system for SEPTA will save a great deal of money and generate even more on the revenue side. The only downside is we’ll have to find a replacement for our game of roulette.

7 MARCH 2013

REGIONSBUSINESS.COM

WEEKLY BRIEFING HEALTH CARE

SMALL BUSINESS

Region’s Best Hospitals

Groups Merge, Form Greater Art Museum Business Alliance The Fairmount Area Business Association recently expanded to include the Francisville, Spring Garden and Brewerytown neighborhoods to create the Greater Art Museum Business Alliance, a volunteer alliance of business owners and real estate developers. MEDIA

‘Philly Sports Talk’ Show to Replace ‘Daily News Live’ Following a similar move in Chicago, “Daily News Live” will be replaced April 8 on Comcast SportsNet by “Philly Sports Talk,” powered by the Daily News. The new show in Philadelphia will feature about five Daily News writers each week — as opposed to the currently required 13 — and will also use NBC radio and television personalities to discuss sports and entertainment, the Daily News reported. “Chicago Tribune Live” was replaced last month by “SportsTalk Live.” TOURISM

Washington Crossing Center Set To Reopen Washington Crossing Historic Park’s Visitor Center will reopen March 10, Visit Bucks County announced. The upgraded visitor center will feature a 2 47- s e a t auditorium, a state-of-the-art artifact storage system, dedicated exhibit galleries, an expanded gift shop and a new multi-purpose event and

MARKET EAST ASSOCIATES

Proposals By The Numbers: Market 8 This proposal banks on the old real Each week, Region’s Business will feature one of the six proposed casinos vying estate saw that the three most important for Philadelphia’s second gaming license. features of a property are “location, location, location.” You’d be hard pressed to find a more BY SANDY SMITH central location than the southwest corner of 8th and Market streets. It has Project name: Market 8 plenty of pedestrian traffic passing by, Developer: Market East Associates excellent transit access and good access Operator: Mohegan Sun by car — it sits atop a major subway juncLocation: 8th and Market streets Particulars: tion and is just a few blocks away from Gaming hall: 100,000+ square feet, the Ben Franklin Bridge and ramps to with 2,400 slot machines, 82 table games, I-676 and I-95. 30 poker tables and VIP lounge The backers estimate their project will Hotel: 168 rooms, with spa and fitness generate 6,167 full- and part-time jobs club, owned and managed by Hersha Hos- and have a total annual economic impact of $909 million. pitality Management They also tout an “unparalleled private Other ancillary facilities: Concert and banquet hall managed by AEG Live; sector public interest and community eight restaurants run by noted local and reinvestment program.” national chefs; Ultra Lounge with live This article was originally published music, dancing, food and beverage service. Underground parking garage with 1,000 on the Philadelphia Real Estate Blog, www.PhiladelphiaRealEstate.com. valet and 340 self-park spaces.

Gaming Board Expands Public Input Schedule The Pennsylvania Gaming Control Board added another date and location for public input on Philadelphia’s second casino license. In addition to hearings scheduled for April 11 and April 12 at the Pennsylvania Convention Center, a third day of hearings will be held May 8 at Lincoln Financial Field, West Club Level. Those interested in registering to speak can do so on the Board’s website, www. gamingcontrolboard.pa.gov, under “Philadelphia Casino Applicants Information.”

SCHEDULE FOR HEARINGS 9 a.m. to 9 p.m., April 11 Pennsylvania Convention Center Room 114 9 a.m. to 3 p.m. April 12 Pennsylvania Convention Center Room 114 May 8 (Time TBD) Lincoln Financial Field West Club Level

(Located in Philadelphia unless otherwise noted) 1) Hospital of the University of Pennsylvania 2) Thomas Jefferson University Hospital 3) Penn Presbyterian Medical Center 4) Christiana Care (Newark, DE) 5) Pennsylvania Hospital 6) Fox Chase Cancer Center 7) Albert Einstein Medical Center 7) Magee Rehabilitation Hospital 7) MossRehab (Elkins Park, PA) 7) Wills Eye Hospital 11) Hahnemann University Hospital 11) Temple University Hospital 13) Abington Memorial Hospital (Abington, PA) 13) Lankenau Hospital (Wynnewood, PA) 15) Paoli Hospital (Paoli, PA) U.S. NEWS AND WORLD REPORT

Region’s Best Medical Schools for Research

University of Pennsylvania’s National Rank

Temple University’s National Rank

Jefferson Medical College’s National Rank

Drexel University’s National Rank U.S. NEWS AND WORLD REPORT

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7 MARCH 2013

REGIONSBUSINESS.COM

WEEKLY BRIEFING

GREATER PHILADELPHIA CHAMBER OF COMMERCE

Cooperation Needed Between Chambers, Official says Each Chamber of Commerce in the Greater Philadelphia region has a role to play in the team sport that is the economy, Select Greater Philadelphia CEO and President Thomas Morr said recently at Regional Spotlight. Noting recent hacking of government and private website allegedly by China, Mr. Morr said “we are in a competitive fight in a very competitive world.” Mr. Morr presented the regional update before a Greater Philadelphia Chamber of Commerce panel discussion on major science parks. In his update, Mr. Morr said Philadelphia’s “eds and meds did not suffer at all” through the nation’s recession. “In fact, they grew slightly,” he said. PHILADELPHIA REDEVELOPMENT AUTHORITY

Executive Director Submits Resignation Ed Covington, executive director of the Philadelphia Redevelopment Authority, submitted his resignation Friday without explanation, Philly.com reported. Mr. Covington had held the position since November 2010. GAMING

Slot Machine Revenue Drops 9 Pct. in February Revenue generated from Pennsylvania’s slot machines during February was down 9.2 percent compared to the amount generated a year ago, according to the Pennsylvania Gaming Control Board. Slot machine revenue at Pennsylvania’s 11 casinos was $195,945,210 compared to $215,687,739 of gross revenue in February 2012. Tax revenue generated in February of this year just from slot machine play was $105,113,514. February 2013 had only 28 days; February 2012 had 29.

School Closings Move Forward WHO TO FOLLOW

AxisPhilly.com recently ranked Philadelphia’s top neighborhood groups and civic associations on Twitter, as of February 28

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IT’S OUR CITY

BY THE NUMBERS

School Closings The Philadelphia School Reform Commission was scheduled to meet Thursday to vote on the school closures proposal

Schools slated for closure under the latest recommendation

Elementary schools

Middle schools

High schools

$24.5M

Proposed annual savings for the school district

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BY ALEXIS SACHDEV After several weeks of discussion between area activists, Philadelphia School District administrators, and city councilmembers, it is becoming increasingly likely that no agreement will be made before a vote. The Philadelphia School Reform Commission is scheduled to meet 5:30 p.m. March 7, when it will likely vote on the fate of 29 city schools slated for closure. If the commission votes in favor of the plan, those 29 schools will close between June 30 and September. An original plan called for the closure of 37 schools. To make up the difference, the district proposed new contracts for its employees and administrators. The district needs nearly $180 million in labor givebacks annually to avoid a five-year deficit of more than $1 billion, the Philadelphia Inquirer reported. The demands include a pay cut of up to 13 percent and Kihn longer workdays for teachers. Teachers’ current contracts are set to expire in August. “This is an incredibly challenging set of circumstances,” Deputy Superintendent Paul Kihn told the Inquirer. He added that the financial part of the plan “should come as no surprise.” Outside City Hall early this week, protesters gathered to hear speeches from Councilwoman Blondell Williams Brown, Jerry Mondesire, state NAACP president, and several other groups who called for a one-year moratorium on school closings.

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7 MARCH 2013 REGIONSBUSINESS.COM

WEEKLY BRIEFING

EXECUTIVE BOOKSHELF

Conquest, Famine, War, Death — the four horsemen are coming, in the form of the national debt, widespread dependence on government, turmoil in the Middle East, and the expansion of the bureaucratic state, according to syndicated columnist David Harasanyi. In Obama’s Four Horsemen, Mr. Harsanyi takes a provocative look at how the Obama Administration allowed four big problems to mushroom into looming disasters we can no longer avoid or postpone. In his famous conversational, fact-driven, and humorous tone, Mr. Harsanyi argues that President Obama’s handling of both domestic and foreign crises has set the stage for a disaster of Biblical proportions. Obama’s Four Horseman is a provocative expose on how we got here, and a chilling prediction of what’s to come. Amazon.com

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Brewer’s Plate More than 20 area restaurants and 20 local craft breweries will come together for Brewer’s Plate.

GOTTA-HAVE-IT GADGET

GL1 Vehicle Diagnostics Using a GL1 cable and an iPhone, iPad or iPod Touch, drivers can reliably diagnose engine problems, check for vehicle-specific recalls, and stream live performance data. Apps then provide repair suggestions, layman’s terminology, and safety analyses to ensure peace of mind and moneysaving insight.

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7 MARCH 2013

REGIONSBUSINESS.COM

DEALBOOK

UTILITIES

Aqua America Acquires 2 Water Systems Bryn Mawr, Pa.-based Aqua America, Inc., acquired the water and wastewater system assets of Total Environmental Solutions, Inc. for $11.8 million, the company announced this week. The two assets were acquired in separate deals, according to the company. Total Environmental Solutions, which sold its Beech Mountain water and wastewater systems to Aqua America in May 2012, serves 6,000 people in Clearfield County. Aqua America now serves 31 counties in Pennsylvania and about 3 million residents in Pennsylvania, Ohio, North Carolina, Texas, New Jersey, Indiana, Virginia and Georgia.

RETAIL ENERGY

First Power Signs Solar Contract During Acquisition First Power & Light, of Bridgeport, Pa., recently signed a $275,000 solar installation contract that is part of what is expected to be an eight-contract, $2.2 million deal, the company announced. First Power is in the process of being acquired by Mainstream Entertainment, Inc., which will take on First Power’s name, pending an audit. “Once the acquisition agreement is signed off, Mainstream will be able to take on solar projects from across the U.S. to the Caribbean,” said Lindsay Hertzog, national sales director. “Our goal is to be an industry leading solar installation service provider.”

TastyKake’s Parent Buys Wonder Bread Flowers Foods, the parent company of the Tasty Baking Company, has purchased Wonder Bread of most Hostess bread brands for $360 million, the companies announced last week. Hostess suspended production of Wonder Bread, Twinkies and other products in November after declaring bankruptcy. Flowers Foods will acquire Nature’s Pride, Merita, Home Pride and Butternut bread brands, as well as 20 bakeries, according to CNN.

BANKING

First Priority Acquires Affinity Bancorp First Priority Financial Corp. (FPFC), of Malvern, Pa., completed the merger of Affinity Bancorp, Inc. and Affinity Bank of Pennsylvania into FPFC and First Priority Bank, respectively, the company announced this week. FPFC also issued $6.6 million of new common equity through a private placement offering made in conjunction with the merger. Under the terms of the merger, FPFC acquired all of the outstanding shares of Affinity in a stock for stock transaction and Affinity shareholders received 0.9813 newly issued shares of FPFC for each share of Affinity.

7 MARCH 2013

REGIONSBUSINESS.COM

POLITICS

Court Releases Opinion Upholding Firefighters’ Arbitration Award

Timothy Holwick is a freelance writer covering Philadelphia government. Find more coverage at citycouncilmatters.com.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

On March 1, the Court of Common Pleas for the County of Philadelphia released the written opinion of Judge Idee Fox, which upheld an arbitration award won by the unionized firefighters of Philadelphia back in 2010. The decision to uphold the award was first made in November of 2012, but with the release of the written opinion, the public is given its first detailed look into the logic of Judge Fox. The initial cause of the dispute concerns retroactive pay raises and other benefits won by the International Association of Fire Fighters (IAFF) Local 22 in an arbitration decision against the City. Mayor Michael Nutter’s Administration then argued, and still argues, that complying with the arbitration award is simply not possible because the City does not have the funds in its tight budget. This decision actually marks the City’s second trip to the courts. Initially, the decision was sent back to the arbitration panel by the Commonwealth Court. The arbitration panel then tweaked the award, but otherwise left the City on the hook to implement the raises and benefits. The City again refused, and is now one step closer to another Commonwealth Court appearance. The Pennsylvania Intergovernmental Cooperative Association (PICA), which is Pennsylvania’s fiscal watchdog, criticized the Nutter Administration’s Five-Year Plan last year for not including the awards in its budget.

As the Mayor continues pressing his appeal, the stakes are high for Philadelphia’s short-term budgetary integrity. Judge Fox’s written opinion nicely illustrates a major tenet of appellate review of arbitration decision: the arbitrators were the ones who heard and evaluated the evidence and testimony firsthand, so their decision should be treated with a certain deference. Judge Fox reasoned that the arbitration panel had certainly heard their share of testimony concerning the City’s financial constraints, as it is was one of their main arguments against the award. Having heard that evidence, Judge Fox wrote, it was not the position of a reviewing court to overturn their decision assuming they paid adequate attention to all relevant evidence. It is likely most of the parties involved in the dispute are sympathetic to the City’s financial woes. However, the IAFF Local 22 has twice convinced an arbitration panel to grant them the pay raises and benefits which are theirs by right under a labor contract. To make matters worse for the members of IAFF Local 22, they have been working without a contract since 2009, a situation familiar to other unionized workers of the City. Mayor Nutter continues to argue that the City simply has its hands tied, and everyone is sacrificing under the tight budget. The Commonwealth Court will be next to hear that argument, for the second time.

GUBERNATORIAL ELECTION

Schwartz Launches 2014 Campaign Bid Congresswoman Allyson Schwartz declared her 2014 gubernatorial campaign late last week, saying she “intends to run for governor,” the Associated Press reported. Rep. Schwartz said she is preparing to create a state fundraising committee as her first official step toward the campaign. She has also stepped down as fundraising chairwoman of the Democratic Congressional CamSchwartz paign Committee, a position to which she was named two months ago. She remains a member of the Ways and Means and Budget committees. Among the democratic party’s governor hopefuls, Rep. Schwartz has taken the lead as top pick to face Gov. Tom Corbett. In a straw poll at the Pa. Progressive Summit last weekend, she took 36.6 percent of the 172 voters; State Treasurer Rob McCord followed with 16.9 percent, and Rep. Joe Sestak took third with 11.6 percent of the votes, as reported by PoliticsPA. Sen. Bob Casey plans to hold a fundraiser for Rep. Schwartz in northeastern Pennsylvania on March 22, the Delco Times reported. However, Rep. Schwartz has said Sen. Casey has not endorsed her for governor.

Republican Castor Makes Election Moves While the democratic party has been abuzz with its potential gubernatorial candidates, the GOP’s Bruce Castor launched a website Monday hinting that the Montgomery County Commissioner intends to throw his hat in the ring. Mr. Castor’s site, BruceCastor. com, outlines his plan to break down the state’s administrative “Iron Triangle,” of career politicians, bureaucrats and specialinterest groups. The commissioner’s platform Castor includes reforming the state’s legislation to a part-time, term-limited body, capping annual spending growth in all levels of government, repealing former Gov. Ed Rendell’s tax hike, ending property taxes, and abolishing forced union membership.

7 MARCH 2013

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

Media: Get Back To Serious Topics, Discussions

Charlie Gerow is CEO of Quantum Communications, a Harrisburg-based public relations and issue advocacy firm. CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

He wasn’t wearing his wedding dress, but there was Dennis Rodman with enough metal attached to his face to keep him out of any airport, yuck yucking it up with Kim Jong Un, the Communist boy dictator of North Korea. Never mind that Kim Jong Un is a brutal thug who, along with his father, has systematically starved 3.5 million of his own people. Overlook the fact that North Korea is the world’s most repressive regime. And forget that it is a rogue nuclear power, threatening the region and the U.S., as well. According to Dennis Rodman, he’s a swell guy who “really loves his wife.” How Rodman and the Harlem Globetrotters got sucked into being PR shills for a little dictator who keeps his people in poverty and misery is curi-

ous. Why the American media thinks this story is newsworthy is beyond belief. Rodman made the rounds, including ABC’s “This Week,” a show ordinarily reserved for serious people with things of value to say. Granted, George Stephanopoulos asked Rodman some of the right questions about the brutality of the Kim Jong Un regime. But when asked about the brutal prison camps of the little dictator, Rodman responded, “We do that here.” This wasn’t the state-run media of North Korea. This was ABC. Why would it provide a forum for such nonsense? Even White House Press secretary Jay Carney ripped into Rodman. But that didn’t slow down the media. Again and again there was “The Worm” in some goofy getup, spouting non-

sense about how misunderstood Kim is and asking the president to just give him a call. The circus doesn’t usually spend this much time in town, but this show goes on and on. And it’s not the only one in town. About the same time Rodman was discovering the joys of life in North Korea, Daryl Hannah was doing her best to get arrested protesting the Keystone XL pipeline — for environmental reasons. This as the Obama State Department was finally declaring that the pipeline has “no significant impact” on the environment and suggesting that the project move forward. Of course, listening carefully to Ms. Hannah, it’s clear that her real “concern” is not dependence on “foreign oil,” but rather her disdain for use of “fossil fuels.” She and her Hollywood pals

don’t turn off air conditioners or forego private jets, but that is apparently beside the point. What is to the point is the media’s fascination with their own creation: the cult of celebrity. There are almost as many embarrassments as there are stories of celebrities venturing into the public policy arena. Many of them have later apologized, as did Mariah Carey when she was duped into performing at a love fest for Moammar Gadhafi’s kid. “I was naive and unaware...” she frankly admitted. Enough said. The media’s preoccupation with the incantations of the celebrity world is easy to understand. They believe it sells. If consumers showed them otherwise, we would be well on the way back to serious talk about serious issues.

7 MARCH 2013

REGIONSBUSINESS.COM

POLITICS MEDICAID

Gov. Corbett to Discuss Expansion with HHS

Gov. Tom Corbett said in a February 5 budget address that he could not recommend the expansion of Medicaid. But he recently said he plans to meet with federal officials on the matter, while GOP state senators are looking into the details of expansion. PENNSYLVANIA INDEPENDENT

BY MELISSA DANIELS HARRISBURG — After Gov. Chris Christie of New Jersey announced his state would accept the federal Medicaid expansion under the Affordable Care Act, many eyes turned westward. Will Gov. Tom Corbett, a fellow northeast Republican, follow suit? For months Gov. Corbett has said the expansion would be too costly for Pennsylvania, citing a $4 billion figure through 2021. The governor has also said the rules for the expansion are not clear, or too inflexible, for the state to take on. His administration sent multiple letters to the federal government requesting information that Gov. Corbett has said was not responded to. And, in his February 5 budget address, Gov. Corbett said he could not support the expansion “at this time.” This sealed the deal for many, who considered the statements a rejection. As the saying goes, time can change everything. Gov. Corbett said in Harrisburg last week that he’ll soon meet with Health and Human Services Secretary Kathleen Sebelius to discuss the concept. For proponents of the expansion, this means the door is still open for Pennsylvania to take part, as eight other GOP-led states have done. They explain how joining the expansion is too good an opportunity to pass up, as it would bring in billions of federal dollars a year — as much as $43 billion in the next decade, according to the Pennsylvania Budget and Policy Center. Some House Republicans, though, are critical of the recent swell of support or interest in the expansion, calling Gov. Corbett’s hesitation “sound” and federal funding promises “dubious.” This article was originally published at PaIndependent.com.

Transparency Should Be Required At State’s Biggest Universities HARRISBURG — Pennsylvania’s right-to-know law is a crucial piece of governmental transparency that allows residents of the state to see how the government spends their money, and for what purpose those dollars are used. It’s one of the best such laws in the nation — part of the reason why Pennsylvania recently received some of the highest marks for governmental transparency on a national scorecard — but there are still some blind alleys where taxpayer dollars can be hidden away. One such alley is Pennsylvania’s four largest publicly funded universities. Penn State, Pittsburgh, Temple and Lincoln universities received more than $500 million from taxpayers in the 2012-13 state budget and are scheduled to receive at least that much again in 2013-14, yet they are not required to answer right-to-know requests about how those dollars are used. And if you listen to the leaders of the universities, well, they think that’s just fine. “We are already subject to a significant amount of disclosure,” University of Pittsburgh Chancellor Mark Nordenberg told members of the Senate Appropriations Committee at a budget hearing last week. He was referring to the schools’ annual “right-to-know disclosure” that includes the salaries of the 25 highest paid university employees and some basic information about large line items in the university budgets. I don’t like to quibble over language, but I’d suggest Nordenberg find a word other than “significant” to describe the transparency at the state-related colleges. Penn State President Rodney Erickson said his school is “fully committed to accounting to every public dollar,” but in the next breath said he opposed an expansion of the right-to-know law — so he must be using the same

Eric Boehm is bureau chief/news reporter for Pennsylvania Independent. CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

dictionary as Nordenberg. Robert Jennings, president of Lincoln University, said the school does respond to requests for information, when they come from “legitimate sources,” which is another way of saying they like being able to control who gets access to information. The universities have long opposed full disclosure under the right-to-know law because they fear donor information and important research data

could be subject to the law. But surely there is a way to carve out smaller exemptions for such sensitive data without a blanket exemption for the entire school. At the very least, any program that gets a portion of the public’s $500 million annual investment should be covered by the law. In the wake of the Jerry Sandusky child sex abuse scandal at Penn State last year, there was a wave of support for changing the disclosure requirement at the four schools — after all, if Penn State had hidden a monster in their ranks for decades, who knew what other secrets were hiding in the school’s secret files. Auditor General Eugene Depasquale, then a state representative, said it should be “a no-brainer” for the schools’ exemptions to be removed. His predecessor in the auditor general’s office, Jack Wagner, said the state should withhold future public dollars from the schools unless they complied with the right-to-know law. Both men were, and are, correct. The state Senate is set to examine the state’s open records law in the coming months aiming to make a series of changes for the first time in nearly a decade. If the special exemption for the state-related universities is not included, our elected officials have failed the public interest.

7 MARCH 2013

2013: YEAR OF THE INNOVATOR

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2013 And The Tax Change It Brings

Kevin Ryan, CPA, is a partner with Citrin Cooperman in Philadelphia. He provides audit, tax and business consulting services to clients. He can be reached at kryan@citrincooperman.com or (215) 545-4800.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

Steadily, but almost quietly, Philadelphia has become a hotspot for entrepreneurs. The combination of great ideas, available capital and a welcoming environment have set the stage to make 2013 a breakout year for innovation and new businesses. To Learn More ... For more information on sponsorship opportunities or to suggest story ideas, call our main office at 610-940-1656. The web: RegionsBusiness.com Facebook: Facebook.com/regionsbusiness Twitter: @RegionsBusiness Sponsored by

Well into 2013, it is important to be cognizant of tax changes that have been put into place this year — especially as you think about tax planning. Below you will find some of the new tax changes and differences between 2012 and 2013. Social Security Payroll Taxes: The employee share of Social Security taxes has been increased to 6.2 percent from the 4.2 percent that was withheld in 2012 from payroll checks. The Social Security wage base for 2013 is $113,700. Medicare Payroll Taxes: The Medicare tax rate is 1.45 percent with no limit to the amount of wages subject to the tax. New for 2013, an employer must withhold an additional Medicare tax at the rate of 0.9 percent from wages it pays to an individual in excess of $200,000 during a calendar year, without regard to the individual’s filing status or wages paid by another employer. Medicare Surtax: Beginning in 2013, high income households will start paying a 3.8 percent Medicare surtax on at least a portion of their net investment income such as realized capital gains, dividends, interest, rents and royalties, along with other passive income. The surtax will apply to the lesser of net investment income or the amount by which modified adjusted gross income exceeds $200,000 for individuals or $250,000 for married taxpayers. Itemized Deductions and Personal Exemptions: Itemized deductions and personal exemptions will be limited for adjusted gross incomes over $250,000 for individuals or $300,000 for married couples. The calculations are complex, but it is estimated that the phase-outs will effectively increase marginal tax rates for affected taxpayers by 1 to 1.5 percent.

Capital Gains: For tax years beginning after 2012, the top rate for long-term capital gains and qualified dividends will be increased to 20 percent from the previous 15 percent for married taxpayers with incomes exceeding $450,000 or single taxpayers with incomes exceeding $400,000. Taxpayers whose income is below those thresholds will be eligible for the 15 percent rate. Federal Estate and Gift Taxes: The federal estate-tax exclusion now is set permanently at $5 million and is indexed for inflation. The top federal estate-tax rate on the largest estates is now 40 percent, up from 35 percent in 2012. The annual gift tax exclusion has been increased from $13,000 to $14,000. Qualified Charitable Distributions from an IRA to a Charity: In 2013, individuals older than 70.5 years of age can contribute up to $100,000 directly from their IRA to a charity without the distribution being treated as taxable income by the IRS. Additionally, if these distributions were made by February 1, 2013, they can be counted for the 2012 tax year. Income Tax Rates: For tax years beginning after 2012, there will be a new 39.6 percent income tax rate for individuals with taxable income above $400,000 or married taxpayers with taxable income above $450,000. Tax brackets for taxable income below those amounts will remain the same as they were in 2012. Medical Expense Itemized Deduction: In 2013, the 7.5 percent income threshold for deducting unreimbursed medical expenses increases to 10 percent for taxpayers under age 65. Those 65 and older may continue to use the 7.5 percent threshold through the year 2016. The changes listed above are not all of the new tax changes for 2013, but they are some of the most widely discussed and may impact you and your businesses in 2013 and beyond. Be sure to speak to your tax professional to appropriately analyze your taxes and plan accordingly.

7 MARCH 2013

2013: YEAR OF THE INNOVATOR

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VIEWING ALL F DIMENSIONS THREE GLASSES-FREE Stream TV CEO Mathu Rajan believes 1080p isn’t worth your time, and he’ll prove it ‘before football season’

IF YOU’RE WATCHING THE EAGLES GAME ON THIS, IT JUST LOOKS INCREDIBLE. YOU CAN SEE THE PLAYERS SWEATING.’ —STREAM TV CEO MATHU RAJAN

@UltraD3

/UltraD3

contact@streamtvnetworks.com

BY BRANDON BAKER

or the top-tier developers at Stream TV Networks, the 1080p television in your living room is old news, and the Nintendo 3DS in your 12-yearold’s backpack is — CEO Mathu Rajan says — “a joke.” Five years ago, after acquiring a small technology company in Silicon Valley, Mr. Rajan and his team decided to invest in researching technology for a glasses-free 3-D experience, in addition to perfecting high-definition technology so as to more than double the resolution of 1080p to 2160p. The result has the company working in cahoots with global manufacturers Hisense and Pegatron, the latter of which is also responsible for manufacturing Apple’s iPhone and iPad Mini. “What we’ve done is developed a revolutionary technology we call Ultra-D, which is not only 3-D without glasses, but 2160p resolution,” Mr. Rajan said. “Basically, you can take content and put it into one of our devices and, through a combination of proprietary hardware, if you put in 1080p — let’s say Blu-Ray — it’ll come out 2160p without the use of scalers.” The first products that will be released include 50-inch, 60-inch and 68-inch televisions, which Mr. Rajan said will launch “before football season.” In the lead-up to the launch, several restaurants and bars in the Philadelphia region will have the 2160p, glasses-free television sets on display. “If you’re watching the Eagles game on this, it just looks incredible. You can see the players sweating,” Mr. Rajan said. The company, which employs more than 100 people, was originally founded in Philadelphia, but has since opened offices all around the world. Remaining staff in the region consists mostly of sales people. Eventually, Stream TV’s technology is expected to take over tablets and smartphones as well. “This technology, we think, is as big as going from black and white to color TV,” Mr. Rajan said. “The biggest companies in the world have seen it, and they conservatively think we’re five years ahead of everyone else.”

streamtvnetworks.com

2013: YEAR OF THE INNOVATOR

MEETUP CALENDAR

#NotAtSXSW 6:30 to 8:30 p.m. Tuesday, March 12 Drink Philly 239 Chestnut Street, Second Floor, Unit B Philadelphia, PA “Come celebrate being #notatSXSW with your favorite groups of people who are in the SXSW target demographic but love Philadelphia a little too much to leave at the moment.”

EdTech Meetup 6:30 to 8 p.m. Thursday, March 14 Location TBD “We will meet in small groups around common interests and have short, 15-minute discussions around these topics. Attendees will present ideas during the first 20 minutes and then attendees will vote on the topic they want to talk about.”

MIT Enterprise Forum of Philadelphia 6 to 9 p.m. Thursday, March 14 University City Science Center 3711 Market Street Philadelphia, Pa. “MIT Enterprise Forum of Philadelphia is proud to present an Evening of IT Intrigue. Join us for some fun networking and a panel discussion hosted by Global Thought-Leaders in the Cyber-Crime and Intellectual Property Rights Enforcement. Attendees include leading Venture Capitalists, Representatives from Microsoft and many other organizations. Tickets for this event are starting at $50.” MEETUP.COM

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In Their Own Words: AutoAlpha Adavances In School Competitions BY BRANDON BAKER When we last checked in with David Wynne and his business partner, Evan Hamlin, they were still forming the foundations of their enterprise platform startup, AutoAlpha. Four weeks later, they’ve advanced to the final rounds of two Wharton business competitions and continue to speak with well-versed startup entrepreneurs in a solid effort to keep their eyes on the ball. Region’s Business caught up with the pair to find out the results of their tireless efforts and how, in the midst of it all, they’re holding up as students. In their words: DIARY OF A STARTUP Starting a company while in school is decidedly less glamorous than “The Social Network” would have you believe. After months of studying and traveling for interviews, many of our friends have landed prized summer internship positions and they are off globetrotting for spring break. In contrast, we swallowed cancellation fees for our spring break plans to continue building our business. Despite the twinge of jealousy we feel as photos from exotic places stream into our Facebook feed, we’re thankful for the opportunity to focus. We’ve advanced to the semifinals of the Wharton Business Plan Competition and the finals of the Wharton Venture Award, and have been speaking with entrepreneurs, industry insiders, VCs, incubators and lawyers to stay ahead of the field. We’ve gotten great advice on various ‘challengesdu-jour’ such as how to approach enterprise sales, technical advisors, pricing, licensing arrangements, incorporation, and more. One of our best meetings was with Brett Topche of MentorTech Ventures when he helped us learn to better articulate our product. The result? “We’re an enterprise platform that helps investors manage operating portfolios by automating data collection, integrating work flows, streamlining reporting, and delivering actionable analytics.” We’re currently interviewing many investing professionals to further quantify our value proposition. It’s been a tough but educational road and our excitement continues to grow. In the next week we will speak with a startup attorney about intellectual property and several more prospective clients about how we can help them.

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2013: YEAR OF THE INNOVATOR

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Reading the Crystal Ball of Risk Management Business: Near-Miss Management Founders: Ankur Pariyani, Ulku Oktem Contact: pariyani@nearmissmgmt.com

CAPITAL SEEKERS

â&#x20AC;&#x153;All it takes is one bad accident, and a plant will shut down,â&#x20AC;? Mr. Pariyani said. â&#x20AC;&#x153;Every year in the U.S., just in the chemicals industry alone, these outages cost billions.â&#x20AC;? Founded in August 2011, Near-Miss BY BRANDON BAKER targets the oil and gas markets, the Hiring the team at Near-Miss Man- power industry, commodity chemiagement is about as close to hiring a cals and, most recently, the insurance psychic in the business world as you industry. A near-miss, Mr. Pariyani said, can can get. Describing their work as opening â&#x20AC;&#x153;a be as simple as an avoided accident new era in process risk management,â&#x20AC;? after driving through a yellow light, or Near-Miss specializes in the analysis of as complicated as a microscopic leak big data to determine risks and prevent in a power plant that can wreak havoc on both the work environment and a accidents in the workplace. This elimination of risks, co-founder companyâ&#x20AC;&#x2122;s financials. â&#x20AC;&#x153;At a power plant, they have hunand Wharton grad Ankur Pariyani said, can not only prevent BP-level accidents, dreds of thousands of areas to keep but also boost a companyâ&#x20AC;&#x2122;s bottom line track of, and there are a lot of units in the plant in which they are constantly at the end of the month.

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monitoring. That data is recorded, but they are not making use of it,â&#x20AC;? Mr. Pariyani said. â&#x20AC;&#x153;So, thatâ&#x20AC;&#x2122;s why everyone is talking big data analytics. How can we use all of this data?â&#x20AC;? Mr. Pariyani, along with his co-founder Ulku Oktem and a team of six part-timers at 18th and Arch streets, use a special algorithm to remove the elusive factors of chance and make good fortune more of a science. Near-Miss Management is currently seeking funding of $500,000 to $1 million. Have a suggestion for our Capital Seekers series? Email Brandon Baker at bbaker@ regionsbusiness.com

7 MARCH 2013

2013: YEAR OF THE INNOVATOR SXSW 2013

Local Attendees at SXSW 2013 Technically Philly rounded up a list of Philadelphia-area attendees headed to this year’s South by Southwest conference this weekend in Austin, Texas. Nelly Arnold, Interactive Manager at the Philadelphia Convention & Visitors Bureau David Dylan Thomas, co-producer of the documentary series on Philly’s tech scene Developing Philly ElectNext, who’s pitching at a TechCocktail event Jeff Puthoff, executive director of Camden nonprofit Hopeworks DreamIt Ventures, whose inaugural Austin class (that includes two Philly-region companies) will be demoing at SXSW. Lou DuBois, formerly NBC Philadelphia‘s Social Media Editor and now NBC News‘ Social Media Editor For the complete list, visit TechnicallyPhilly.com.

REGIONSBUSINESS.COM

Proposed Council Bill Would Protect Employees’ Social Media Accounts BY HARRY COOPERMAN Proposed legislation in the Philadelphia City Council could finally prohibit employers from requiring access to potential and current employees’ social media accounts. The bill — introduced February 21 by Councilmember William Greenlee — would amend Title 9 of the Philadelphia Code entitled “Regulation of Businesses, Trades and Professions” and was referred to the Committee on Rules upon its introduction. It provides that employers cannot require workers or job applicants to disclose their account information — including usernames and passwords — in order to gain access to their social networking site profile or account through an electronic communication device. It also bans employers from asking personnel to log onto a social networking site in their presence in order to access their account and from accessing their profiles indirectly through a social networking contact. Anyone who feels that his or her rights granted under this bill have been violated will be able to file a report with an office or agency to be designated by the mayor. The proposed bill is meant to combat the growing trend of employers asking prospective and current employees for access to their social media accounts, Councilman Greenlee’s Legislative Director Noelle Marconi said. “People have been coerced into giving up their passwords, and this legislation is aimed

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at preventing that from happening,” she said. University of Pennsylvania Law School professor Sophia Lee wrote in an email the legislation “will fill a gap in the existing protections for employees’ and job applicants’ online privacy” because there are no comparable federal or state laws on the books. However, Ms. Lee said that there were significant limits on the extent of the bill’s reach under the current draft of the legislation. One restriction she noted is that the ordinance is worded in such a way that it could allow employers to “request usernames and passwords, even for social networking sites, as long as the information will be used to access the employee/applicant’s account via a desktop computer.” This article was originally published in The Daily Pennsylvanian, www.thedp.com.

RegionsBusiness

BEN FRANKLIN TECHNOLOGY PARTNERS

Franklin Group Issues RFP for Renovation/ Retrofit Projects Ben Franklin Technology Partners of Southeastern Pennsylvania has issued a request for proposals for funding investments of up to $400,000 for building retrofit/renovation projects to improve energy efficiency. Private, for-profit companies with fewer than 500 employees in BFTP/ SEP’s five-county region (Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties) are eligible. An email notice of intent to apply is due by noon March 15. The completed proposal must be submitted by noon April 15. The BFTP/SEP Advanced Energy Retrofit (AER) Demonstration Program promotes retrofits in commercial buildings smaller than 250,000 square feet. The Program is funded by the Commonwealth of PA’s Alternative Energy Development Program (AEDP). The AER Demonstration Program is being issued in partnership with the Energy Efficient Buildings Hub (EEB) at The Navy Yard, including the new Hub Commercialization Center launching this year.

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7 MARCH 2013

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!"#!$%&$'()"*$+)(!!, ,--./!)(!,0*$%&$10*$-""

!"##$ THINKING

The Flower Show is finally going across two weekends, which should increase its economic impact. How much will that impact be? Only time will tell.

rilliant! That’s the theme of this year’s Flower Show, coming up on it’s second weekend this year at the Convention Center. The Philadelphia Flower Show, put on by the Pennsylvania Horticultural Society, is the longest running flower show in the country. It’s first show was held in 1829 at a building called the Masonic Hall on Chestnut Street. It’s gone through many a makeover and changes in leadership throughout the centuries. Since moving into the Convention Center in 1996 it just keeps getting bigger. It’s a part of Philly’s heritage. Every frosty, mid-March, Philly residents get a chance to enter a wonderland of Spring, with flower displays, garden layouts, sustainable building plans, and vendors showing off their blooms. I don’t know about you, but piling into the car with the family for a day at the Flower Show should be at the top of the “All Things Philly” list for every resident. But it’s not just us Philly folk who attend the show, Drew Becher, the president of the PHS since 2010, has his eye on making the Flower Show a “destination definer” for the city. Last year, the show drew upwards of 260,000 visitors from the region and beyond. A week before the show’s kickoff this year, ticket sales were up by almost 15%, meaning that this could be the biggest turnout yet. Last year boasted the highest attendance since the late-nineties. This year is also the first year that the show is running for two full weekends, instead of the usual one and a half. That means more chances of getting visitors into the city. Meryl Levitz, CEO of the Greater Philadelphia Marketing Corporation, is excited. “After years and years of want-

ing the Flower Show to last two full weekends, we are watching it very closely this year, because that gives us the opportunity to market it that way. It spreads it out a little, draws in more people,” she hopes. T he economic impact of the show is twofold. A study done by KPMG in 2011, commissioned by the PHS, calculated that the Flower Show is a 61 million dollar affair. Says Mr. Becher, “They looked at how many people come into the show and the average spend. It’s a huge formula. Everything from paying the parking garage, paying to eat, taking SEPTA, all of that stuff is included.” When you have over 250,000 visitors

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DETAILS

BRUCE TUTEN

Who benefits? Proceeds from the Philadelphia Flower Show, including ticket sales, directly support City Harvest and other vital programs.

180,000

Pounds of fresh produce grown and distributed by City Harvest.

1,000

Families fed by City Harvest during the growing season.

25,000

Number of hotel rooms sold for the show, according to a KPMG study.

5,000

Estimate of the number of hotel rooms sold for the show, according to Ed Grose, Executive Director of Greater Philadelphia Hotel Association.

1829

Year of the first Philadelphia Flower Show. More online at TheFlowerShow.com

R. KENNEDY FOR GPTMC

over the course of a week, everyone benefits. The show employs 700 people year round, and there are an additional 3,500 volunteers who trek into the city to help the show get off the ground. The second aspect of the economic impact of the event is being able to show the city and the region off. In fact, both SEPTA and AMTRAK add trains to their schedule for the weeks of the show. Hotels offer packages with tickets and access to behind the scenes events. This year, the show’s theme, Brilliant!, is a play on the tradition of British gardens. That means hotel packages including events like tea time at the Sofitel and a way for museums and attractions throughout the region to taut their British collections and connections. We have a lot of them. The region also has around twenty eight gardens worth visiting later in the year. “The show makes all the gardens sparkle. If you like flowers in March, it’s time to get your garden on when it warms up,” says Ms. Levitz. Many of the displays are teasers of plants and gardens that will take root within city walls later in the year. It’s also about reminding people that the surrounding region has warm weather appeal. That’s a lot of what Drew Becher and his

team brought to the show. “[Becher] really sees it on a scale that is beyond the walls of the Convention Center, like putting the topiary on the Parkway last year and the pop up gardens throughout the city. People don’t remember when the azalea garden at the Art Museum didn’t exist, or the community gardens throughout the city,” reminds Ms. Levitz. “That’s the other reason why the show exists: to beautify the region.” The British theme helped this year in marketing the event. Says Ms. Levitz, “People have an affinity for the ‘old country,’ but it also helps the show do the two things that good flower shows do. One is to show visitors something beautiful. But there’s also the applied science of horticulture, all these other additional benefits. It becomes a total experience that you can bring back home and I think that’s a really good approach for this show.” There are events aimed at everyone brides, children, LGBT cocktail hours, ‘girls nights out’ programs, and even a man cave exhibit. Shopping, dining, and special speaking events run throughout the course of the two weeks. As Ms. Levitz puts it, there’s more “show” in the show than ever before.

Mr. Becher sees the show as an image maker for the city, “In the coming years, we’re going to use it to promote sustainable design, green design, and to introduce new products and techniques to the marketplace, much like Fashion Week in New York.” But as much as the show continues to grow, and the tourists keep pouring in, not everyone is totally convinced that the show is drawing many of the “stay the night” tourists. The Greater Philadelphia Hotel Association is not as busy as the numbers suggest. Executive Director Ed Grose says that hotels, for one, are not benefiting. The KPMG study, commissioned by the PHS two years ago, reported that 25,000 hotel rooms were booked with Flower Show travelers. Mr. Grose says that’s not the case. It’s not easy to calculate exactly how many people are staying in town for the Flower Show. But Mr. Grose estimates that the KPMG study was about 20,000 rooms off the mark, “From what I’m hearing from my hotels, we’re just not seeing that many rooms sold from the Flower Show. We think its great for the city, and it brings people in to see the Convention Center, but overall we’re

7 MARCH 2013

REGIONSBUSINESS.COM

R. KENNEDY FOR GPTMC

not seeing a lot of people staying over,” he says. Of course, it’s all about the methodology. Other events, like the Auto Show, do exit surveys to calculate how many people are staying in town. The KPMG study used ticket holder numbers and credit card billing addresses to assess how many Flower Show visitors were staying the night. The difficulty in calculating exactly how many visitors are staying over is that not everyone buys blocks of rooms like corporate convention attendees and the leisure traveler is not prone to cite the Flower Show as their reason for being in town. For those tourists, they’re just in Philly for the weekend. Mr. Becher isn’t worried about the exact numbers, “I know for a fact that I have 400 vendors. A half, if not more of those, are from out of state. They are staying here. I can give you thousands of people that are staying here. But they’re not saying they’re here for the show - they’re saying they’re here for business or something else.”

“Our numbers are regional, and they’re talking about Center City numbers. A lot of our folks might not be staying in Center City. The suburban hotels make up a huge part of the total hotels in the region. People that are coming to the Flower Show are not buying blocks of rooms. Our travelers are not saying ‘I’m here for the Flower Show,’ so it’s hard to track who’s coming to town for the show or not. All I know is that we bring close to 300,000 people into the city. If you can’t make money off of that many people in the city, we have bigger things to figure out,” says Mr. Becher. The good news for the Hotel Association is that the average room rate in the city is about $160 per night. Already, room prices during the period of the Flower Show are higher than that -- starting at around $170 on aggregated booking sites like Expedia and Hotwire. It’s more of a battle for the Convention Center. Ms. Levitz says that not every event or venue can “hit all the marks” for every-

one. She explains, “Last year, 38 million people came to the region and they came for 38 million different reasons. This is a big city that has to multi- task, and not every event or attraction can hit all the buttons. Some things fill hotels, some things fill more restaurants, some things are better for the historic area, some things are better for the waterfront. What you want to do, at the end of the year, is ask, ‘did we cover all of our bases?’ Because then people like [GPTMC] can ask if we need more family attractions or a new museum, or if we need anything else. The hotel numbers are a specific indicator for a specific type of business that is the expected kind of business that should be in the Convention Center. Anything that’s going into the Convention Center is going to be subject to that kind of measurement just because of where it is.” The PHS is hoping they exceed attendance estimates this year and get a chance to run another study to calculate the tourism and economic impact of the show. Mr. Becher is happy to have people in town. “My focus with the hotels is that, I hope, in a very bad time of year for people to visit the Northeast, we’re bringing thousands of people into the city. If you just give me 5,000 of those folks that are staying the night, that’s my focus,” Mr. Becher says. Filled hotel rooms or not, the Flower Show has been consistent in turning out visitors. That is, as long as the weather holds, and mid-March blizzards and rain don’t keep day-trippers stuck in the suburbs, as they have done in the past. Mr. Becher used to bring colleagues in for the Flower Show from Chicago and New York to get ideas for urban planning initiatives. Now that he’s putting it on, he just likes to see people in awe of the displays. And he has big plans for it. “There are not too many cities around this country, that have events like this that can be such a positive image for them. And other cities have capitalized on them - the Indianapolis 500, Art Basel in Miami, the Aspen Food and Wine Festival, the Kentucky Derby in Louisville. I think with the Flower Show in Philadelphia, there’s the opportunity to make it one of those signature things the city focuses on,” he says. “This region has some of the best gardens in the whole country, I call it the “horticultural hand basket” of the U.S., it’s where horticultural started. No one can take that away, it’s something to focus on and that’s what we’re trying to do with the show.” Hopefully, turnout will be just as brilliant this year.

QUOTABLE

THERE ARE NOT TOO MANY CITIES AROUND THIS COUNTRY, THAT HAVE EVENTS LIKE THIS THAT CAN BE SUCH A POSITIVE IMAGE FOR THEM.’ —DREW BECHER, PHS

LAST YEAR, 38 MILLION PEOPLE CAME TO THE REGION AND THEY CAME FOR 38 MILLION DIFFERENT REASONS.’ —MERYL LEVITS, GPTMC

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Horticultural Society Turning Philadelphia Green BY REGION’S BUSINESS STAFF

unofficial title of “The Cradle of Horticulture.” The PHS has a number of proAt its most basic level, the Philadelphia Flower Show is essentially grams in pursuit of this mission, a giant fundraiser for the Pennsyl- including Pop Up Gardens, Plant vania Horticultural Society, allow- One Million and Public Landscapes ing the organization to continue Design and Management. Pop Up Gardens create temporary its mission of making other cities green with envy over Philadelphia’s green spaces in vacant lots each

summer. In 2012, a Rittenhouse lot was used for the program. The group will create another Pop Up Garden this summer. Plant One Million’s goal is to plant one million trees in the 13 counties in Southeastern Pennsylvania, South Jersey and Delaware, bringing the area’s canopy cover to 13 percent. Public Landscapes Design and Management targets high-profile landscape projects in downtown Philadelphia, such as the Philadelphia International Airport, Logan Square, 30th Street Station and the Philadelphia Museum of Art. More information on all PHS initiatives can be found at phsonline. org. A “PHS Pops Up Garden” was constructed at 20th and Market streets in 2011. PENNSYLVANIA HORTICULTURAL SOCIETY

Perspective. Delivered weekly. $40 annually. To subscribe, call 610.940.1656

REGION’S BUSINESS A JOURNAL OF BUSINESS & POLITICS

7 MARCH 2013

REGIONSBUSINESS.COM

STEPHEN TANG’S

50 YEARS OF INNOVATION Don’t tell the president and CEO of the University City Science Center that Philadelphia is in a new stage of innovation. His organization has been fostering entrepreneurship for five decades in the city whose innovation built a nation.

Q&A What’s the elevator pitch for the University City Science Center? For 50 years the way you could describe our mission is, we’ve been community builders for innovation and entrepreneurship. The way we advance that community is by connections. Obviously, 50 years ago, networking wasn’t what we called it. We’ve been very successful at incubation for 30 years now. We have now focused in the area of preincubation. Helping innovators, inventors, entrepreneurs connect with the people who can help ignite their ideas into ventures and actual companies. How do you that? The way you do that is, we have this program called Quorum, which is essentially an entrepreneurs’ clubhouse. It’s a wonderful facility; there’s a lot of flow through it and it’s designed to match ideas with people with capital. We have a QED proof of concept program. We also have an outreach program called BreadBoard, which is designed to connect the community in science, technology, engineering, arts and math. Arts? So you know the STEM subjects; we added the A for arts, and so it’s really the STEAM initiative. All those things mixed together make us what I would describe as an innovation mediary. We are essentially a marketplace where ideas or innovation can meet the demand for that technology. We’re matchmakers, if you will. Is it exciting or frustrating to hear people talk about “the age of innovation” in Philadelphia? All of that. It’s not like innovation never happened before. You could argue that the greatest innovation in this country is this country itself, and that actually started here. So there were civic innovators and civic entrepreneurs — our founding fathers, who got together and did that. But I think as Philadelphians what we tend to do is we view that as so incredibly awesome that nothing could ever eclipse that. So it’s as if nothing ever happened here since 1776. And in fact, innovation’s come through Philadelphia in waves. We were the design center of the world at one point. We were the manufacturing center of the world at one point. But as those industries and those technologies matured and declined, then we were put into the bucket of old Rust Belt kind of city trying to reinvent itself. So I think that notion that innovation hasn’t been here probably started as manufacturing declined in the ‘70s. As a matter of fact, we started in the early ‘60s. For the complete interview, visit www.RegionsBusiness.com.

7 MARCH 2013

FINE ESTATES PREVIEW

REGIONSBUSINESS.COM

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REAL ESTATE

Tips for Selling BY JEN HELLER MESERVEY

he temperatures are warming up, and spring will be here before we know it. If you’re thinking of selling your home, spring is the best time to do it. Buyers love shopping for a new home in the spring because they can time their purchases so that they’re ready to move in the summer. This makes moving easier due to the nice weather and break from school. The bright, sunny spring weather also makes selling easier by making your home look more appealing. Most buyers would rather picture themselves moving into a new home bathed in bright sunlight and surrounded by colorful flowers than one that is covered with snow and veiled in dim winter gloom. The warmer temperatures mean

more people will be willing to go out to open houses and that you’ll never have to reschedule due to a looming snowstorm. This coming spring is an especially perfect time to sell your home. The number of homes on the market has been decreasing over the past year. In Philadelphia, inventory has dropped by 15 percent. This means that buyers have fewer choices, and your home is more likely to stand out. The lower inventory has contributed to a rise in home prices for the first time in years. The median sales price in Philadelphia has risen by almost 22 percent in the last year, which means more money for sellers. However, mortgage rates remain at historic lows, which means more savings for buyers. You can take advantage of the increasing temperatures and improving

Find more Fine Estates Preview at RegionsBusiness.com

REGION’S BUSINESS A JOURNAL OF BUSINESS & POLITICS

7 MARCH 2013

REGIONSBUSINESS.COM

REAL ESTATE

Your Home As Market Heats Up market trends by selling your home this spring. Follow these tips to make your home look its best in warm, sunny spring weather. Let the Sun Shine Quick Fix: Use the bright spring sunlight to your advantage by making your windows look their best. Clean all of your windows both inside and out to avoid highlighting dust and smudges. Clean and press your drapes, and wipe down your blinds, then open them all up to bring a little bit of spring inside. Big Project: A skylight is a great way to add warm sunlight to your home and show it off in the spring. Consider adding a skylight, or replacing an old one with an updated model. Adding an energy-efficient skylight can even earn you a credit on next year’s taxes.

Spruce Up the Outdoors Quick Fix: Keep the outside of your home neat and tidy, rake leaves, trim hedges, and remember to mow your lawn regularly. Plant colorful flowers around your entryway for an inviting look. Set up chairs and tables in your backyard so potential buyers can picture themselves lounging outside on a warm spring day. Big Project: Decks are one of the most sought after amenities among home buyers, and adding one can enhance the value of your home and appeal to spring buyers. Build a deck outside your back door or around your pool, or upgrade an existing deck with new balusters, lighted post caps, built-in seating, or planters full of bright flowers. This column originally appeared on www.phillyliving.com.

“Most buyers would rather picture themselves moving into a new home bathed in bright sunlight and surrounded by colorful flowers than one that is covered with snow and veiled in dim winter gloom.”

The Philadelphia real estate market and the weather are both heating up, which means Spring 2013 will likely be the best time in years to sell a local home.

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7 MARCH 2013 REGIONSBUSINESS.COM

OPINION

Vacant Land Continues to Be a Drag on Philadelphia V

Lee Huang is Senior Vice President and Principal of Econsult Solutions. Learn more at EconsultSolutions.com.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

acant land isn’t usually thought ... all told, there are some 40,000 vacant parcels throughout the of in economic terms. Rather, it tends to City, each exacting their cost on City government, City residents, provoke a visceral reaction: there’s an eyesore in and the City’s visual appearance and public reputation. your neighborhood, and you’d like it dealt with as soon as possible. But framing the issue of vacant land in economic terms may be what is needed to best understand why and how to address the problem. After all, vacant land produces not only negative visceral reactions but also very real negative economic consequences: Vacant land drags down neighboring property values, destroying individual household wealth and shrinking the tax base for the City and School District; Vacant land is expensive for the City to maintain, safeguard, and clean, diverting scarce resources away from other essential public services; Vacant land is likely to also carry tax delinquencies, further diminishing MIKE LINKSVAYER the funds available to the City and increasing taxes sure vacant parcels can be e ciently and (Northern Liberties, Italian Market, Unifor other residents and businesses. productively converted into some positive versity City), and businesses are forming or Take Philadelphia, for example: all told, use. By doing so, we will minimize the relocating in every month. With this posithere are some 40,000 vacant parcels negative economic consequences of vacancy tive momentum comes the opportunity to throughout the City, each exacting their – diminishing property values, increased turn our vacant lots from negative influenccost on City government, City residents, maintenance costs, and accumulating tax es to positive ones: development opportuniand the City’s visual appearance and public delinquencies. And, we will add public ties for residential or commercial purposes, reputation. amenities and private development to these or other public uses for broader benefit. The We didn’t get this way overnight. The locations, further beautifying the City and Pennsylvania Horticultural Society (PHS) City reached a population of 2.1 million in growing its population and tax base. Dealand other non-profits are also stepping up 1950, planning to max out at 2.5 million in to the plate and turning run-down lots into ing with Philadelphia’s vacant land will lead 2000. Instead, over the next 50 years, it lost clean, open green spaces. to a virtuous cycle of improvement. over half a million residents. That’s a lot of Vacant land in Philadelphia therefore How this kind of reform can happen is, closed businesses, boarded up homes, and brings us back to a simple question: what is admittedly, a complex policy question. But unused lots. the cost of doing nothing? This is the ecowhether and when such reform should be But that’s not Philadelphia’s story anypursued can be answered with simple economic argument for addressing the probmore. We are seeing population increases lem of vacancy in the City, and for making nomics. in neighborhoods throughout the City

7 MARCH 2013

REGIONSBUSINESS.COM

OPINION

With Sequester In Effect, Time to Put Away Childish Things

t was only a matter of time, really, because every child has been taught that if you play long enough with matches, you are going to get burned. The childhood analogy is eminently appropriate in a discussion of the passing of yet another self-inflicted fiscal deadline, in this case the automatic spending cuts that went into effect last week. The scenario played out much like the fiscal cliff nonsense only weeks earlier. The Democrats ran about like Chicken Little, shrieking in apocalyptic terms about the devastating impact of falling off the so-called cliff. President Obama, apparently believing that his convincing November election victory secured him the right to rule with impunity, smugly scolded Republicans for not falling in line with his every whim. Things were no better on the other side of the aisle, as the Republicans took their typical aloof position that, as it has for more than four years, comes down to simply doing the exact opposite of what the president wants. The fact that the automatic spending cuts went into effect is not, in and of itself, bad, but let’s set that aside for a moment. Because the way in which it went into effect remains the real story. Perhaps both sides knew that negotiations were pointless and that the automatic spending cuts were inevitable. But that alone is a problem. The fact that both sides have become so entrenched in ideology

that they find political paralysis more acceptable than debate and compromise does not bode well for a country facing a series of significant, ongoing challenges. The Democrats must put aside the notion that November’s victory allows them carte blanche to rule with impunity. The Republicans must come up with reasonable solutions that go beyond saying no. Neither party has put forth solutions that appear to be able to address needs in both the shortand long-term. If either side could put aside their childish disposition, that would lead them to the inevitable conclusion that negotiation and compromise are more likely to produce effective results. In the meantime, we are living in a post-sequester world. The Democrats Doomsday Scenario has not played out. Airports have not shut down. Terrorists are not swarming the borders. But the Republicans have no reason to strut about in victory. There are some very real and painful - consequences to these across the board spending cuts and, once we start to feel that impact, the momentum may be hard to stop. Enough with the artifical deadlines and self-inflicted economic crises. Americans don’t want a Democratic solution, nor do they want a Republican solution. They want a practical solution, one that puts politics aside and addresses both bloated spending and revenue shortfalls. In short, it’s finally time for an adult conversation.

REGION’S BUSINESS A JOURNAL OF BUSINESS AND POLITICS !"#$%&'()*+",-.,""(/01%1/01/#1"210(3 4--")1'23/+$5/"%(617"89(+1":--" %;&2$9+*"211+(/)7"%3".<:4, 4.-=<:-=.4>4""""?""""555='1)($/8@98(/188=#$2

COMMENTARY FROM ACROSS THE WEB

Paid Sick Leave Might Now Be the Right Medicine Should hourly workers be able to earn paid sick days? A bill in City Council that mandated businesses to provide paid sick leave was vetoed by Mayor Nutter in 2011, but it may be having a second wind: Council holds hearings Tuesday on an amended bill. Back when the bill was first promoted by Councilmen Darrell Clarke and Bill Greenlee, many business leaders complained that it would be another obstacle to job creation in a city that already has a punishing wage tax to contend with. We agreed. Today, we’re not so sure. DAILY NEWS EDITORIAL, 5 MARCH 2013

Libertarians Too Extreme Now, I enjoy talking with libertarians. They bring an intellectual rigor to their views mostly lacking among garden variety liberals and conservatives. But there’s a reason they get to pretend that statements such as “all taxation is theft” are a serious proposition. It’s that, thank God, we’ve never come close to actually turning the keys of government over to them. For they would surely

EDITORIAL BOARD #1$"ABC"%DEFGCEBH"IAJEF"0="2K0LBAMC 1CGHLDGAM"0GDEKHLD"6ADM"8JGHN 3FFLKGAHE"1CGHLD"+EDDEBKE"#AFEO

@ PAIndependent

Safe to say that Schwartz will need a lot more votes to win a Democratic primary, to say nothing of the general election #PA2014 #PaPolitics 22 FEBRUARY 2013 run the car into the ditch. CHRIS SATULOO ON NEWSWORKS.ORG, 2 MARCH, 2013

Government Rewards Union Shakedown “Ding Dongs” aren’t merely the popular snack cakes of erstwhile baker Hostess. They’re also a fitting moniker for government’s union coddlers, who have sweetened the mix for the bakery union that drove Hostess out of business. Under the federal Trade Adjustment Assistance (TAA) program, the bakers who rejected Hostess’ requested contract concessions will get a slew of publicly paid benefits for a “job action” that put 18,500 people out of work, The Heritage Foundation reports. EDITORIAL ON TRIBLIVE.COM, 4 MARCH, 2013

HOW TO CONTRIBUTE To contribute, send comments, letters and essays to feedback@regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business. We reserve the right to edit all submissions for content, style and length.

7 MARCH 2013

REGIONSBUSINESS.COM

BY THE NUMBERS

$8M

Money that could be saved by reducing the size of Pennsylvania’s legislature (the largest full-time assembly in the nation), according to a TribuneReview study.

$53.5B

Warren Buffett’s net worth, according to Forbes magazine, who determined he is the richest investor on the planet.

253

Members in Pennsylvania’s General Assembly.

$59,380

The amount collected by Erie Democrat Rep. Patrick Harkins over two years. Combined with $30,398 in per diems, his travel costs of $89,778 were more than his $83,802 salary.

The percentage of their wages that Pennsylvania legislators pay for their health care coverage.

$17,162

Amount collected by Washington County Democratic legislator Pete Daley for gas and oil reimbursements over two years, more than $7,000 more than the legislator with the next-highest total. INFORMATION: TRIBLIVE.COM

Warren Buffett’s age.

$2.1B

$2,000,000,000

Amount the U.S. Postal Service expects to save by eliminating Saturday delivery.

193,000

Net worth of Sixers owner Joshua Harris, who ranked 52nd on the Forbes list.

Number of jobs eliminated by the USPS since 2008.

Joshua Harris’ age.

$15,900,000,000 USPS losses in its most recent fiscal year.

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46.1%

Percent of Americans who will die with less than $10,000 in assets according to a study by Harvard professor David Wise.

$298B

Amount of charitable giving by Americans in 2011, more than the GDP of all but 33 countries in the world.

$3,900,000

Cost of the Lamborghini Veneno, built for the the company’s 50th anniversary.

Number of Venenos built. They are sold out. INFORMATION: THE MOTLEY FOOL

The ranking on the Forbes list of wealthiest investors of the highest-ranking woman, Isabel dos Santos. The 40-year-old Angolan has a net worth of about $2 billion.

$19.2B

The net worth of hedge fund manager George Soros, which according to Forbes, makes him the richest hedge fund manager in the world. He’s 82.

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