Region's Business 30 August 2012

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REGION’S BUSINESS

PHILADELPHIA EDITION

A JOURNAL OF BUSINESS AND POLITICS

TIME TO START CLEANING UP PENN STATE’S REPUTATION Financial repercussions loom and change is needed, though debate continues over what steps should be taken.

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CONTENTS

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Time to clean up Penn State’s image

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Part 2: Visions of a world-class Philadelphia

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Weaknesses have become strengths for the city and economies built around innovation and creativity are fueling growth across the region. But the cost of development continues to be a problem

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PRESIDENT AND PUBLISHER James McDonald EDITORIAL DIRECTOR Karl M. Smilth ASSOCIATE EDITOR Terrence Casey CONTENT TEAM Brandon Baker, Emily DiCicco, Victoria

Marchiony CONTRIBUTORS Jay Bevenour, Joel Hammond, Elissa Vallano ADVERTISING DIRECTOR Larry Smallcombe ACCOUNT MANAGER Charles Coltan

© Copyright 2012 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 Web sites.

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EDITOR’S DESK

See The Ol’ Alma Mater With Clear Vision

Karl Smith is the Editorial Director for Region’s Business.

You can contact him at ksmith@regionsbusiness.com

The arrival of September ushers in football season, and for many that rekindles excitement about the old alma mater.

I’m keen to see what Dave Clawson comes up with for my Bowling Green State University Falcons and, like with most schools at the onset of a new season, optimism is running high.

Wins or losses, however, won’t change my view of the alma mater, because pride in one’s university shouldn’t be so narrowly focused as to sway on the ups and downs of a team, let alone an athletic department.

Friends and acquaintances have mocked my school on more than on occasion, usually because it doesn’t rank with the “big time� programs in the major sports.

I can only laugh, because that sort of thing doesn’t matter. I get

excited when the football team wins, disappointed when they lose, but my love for the orange and brown remains unwavering.

Pride must run deeper, and that’s the test put for the Penn State alumni. Yet, it cannot be blind pride. Given recent events, it is impossible not to keep a healthy perspective on events.

It is time to get past the shocking headlines and move forward, and move forward with purpose.

That’s why we asked Joel Hammond to take a hard look at Penn State’s situation, not to look at what happened — that’s all been well-documented — but to look at a culture where these events could transpire and, finally, how the university can move forward.

It’s important for alumni and supporters to truly understand what led the university to this

point and also to understand what needs to happen for the university to clean up its tattered reputation.

We’ve also asked two alums to check in with their thoughts, and I’m humbled to have their perspectives in this week’s issue.

Mike Poorman gives us a longer view, having graduated in the early 80s, while Jenna Ekdahl’s diploma still has that new degree smell, having left State College at the end of 2010.

There’s much more in our second issue, including the final installment of our two-part series looking at Philadelphia’s worldclass aspirations. Elissa Vallano wraps things up nicely with a great look at how the innovation and creative economies are driving growth and energy across the region.

There’s great content in our regular features as well, and I hope you’ll make them a habit.

The Weekly Briefing and Capitol Report have great stuff this week and By The Numbers should provide you some fodder for discussions over a cup of coffee in the coming week.

We’re still tweaking things in the second edition of Region’s Business and I appreciate all the excellent feedback so many of you have provided so far.

Keep it coming by writing to ksmith@regionsbusiness.com.

In the meantime, dig in and enjoy. I’ll be pulling my BGSU apparel out of the closet in anticipation of the opening kickoff, remembering that, at the end of the day, it’s just a game and only a small part of what makes my alma mater special. Roll Along!

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WEEKLY BRIEFING

COURTS

ATLANTIC CITY GAMING

Moody’s, S&P Drop Revel Credit Rating

Supreme Court Will Hear Comcast Case The U.S. Supreme Court has agreed to hear an appeal of a class-action lawsuit settlement previously arranged in early June between Comcast Corp. and roughly two million Comcast cable-TV subscribers in the Philadelphia region.

The suit, originally filed nearly a decade ago in 2003, makes the case that Comcast monopolized cable in the Philadelphia area, sharply increasing cable subscription rates amongst its customer base as a result.

A settlement agreement had been signed on June 13 of this year.

“The parties are pleased to inform the court that they have reached a tentative agreement to resolve the above-mentioned actions,” read the settlement letter. “As noted, the parties plan to file preliminary approval papers shortly after final settlement papers are completed on June 30.”

The Supreme Court intervened two weeks later on June 25, agreeing to hear the Comcast v. Behrend case during the court’s already jam-packed fall session of hearings, possibly setting a significant new precedent as the first Comcast case to be heard by the highest court in the nation, in addition to being an unusual case of a suit being reviewed while in the settlement process.

The Supreme Court ruling is thought to be potentially detrimental to the case of the plaintiffs, as the court examines the more detailed factors of how to determine the exact amount of damages to plaintiffs involved with the case.

5

Open House, in Midtown Village, is a modern shelter shop and gift boutique.

(C. GABELLO FOR GPTMC)

Official: Zoning Changes Benefit Businesses, Residents In the last 50 years in Philadelphia, style, culture and politics have evolved dramatically.

The city’s 642-page zoning code, however, had not until last week.

In February 2007, city council unanimously approved a proposal to create the Zoning Code Commission. During April’s primary, almost 80 percent of voters agreed.

In December 2011, Mayor Michael A. Nutter signed the first legislation in 40 years to update Philadelphia’s zoning code.

The Zoning Code Commission had the job of enacting this reform.

‘This modern code will help Philadelphia, in the years to come, to ensure healthy, sustainable development that protects our neighborhoods and grows our city,” Mr. Nutter said after in the law’s passage.

The ZCC attempted to create a “more user-

friendly” zoning code with a “reduced number of zoning classifications,” an “incorporation of a civic design review process” and an “established role of citizens in the zoning approval process.”

The ZCC has also implemented new areas, such as sustainability, not considered in the 1962 code.

For example, the ZCC included provisions to reduce vehicle miles traveled, encourage water and energy conservation, encourage urban food production and promote community health.

“If you are a homeowner, and you want to use solar panels or wind generator turbines, there is a way you can do that without going to the Zoning Board,” ZCC Executive Director Eva Gladstein explained.

To spread the word, , the Citizens Planning Institute is holding training workshops.

Ms. Gladstein said business owners will also benefit: “One specific benefit for businesses, small and large, is that the new zoning code regulates uses by categories (i.e., retail sale of consumer goods) rather than by specific uses (i.e., toy store, stationery store).

This will make it easier for new businesses to locate in appropriate locations without having to apply for a variance.”

“Another benefit for businesses is that there are two new zoning districts: one is ... designed specifically to support vibrant neighborhood commercial areas. The other ... will permit a range of residential and commercial uses in former manufacturing areas that are transitioning to mixed-use. Both of these will allow more “byright” commercial development for businesses.”

— Emily DiCiccio

Revel, the underperforming Atlantic City casino resort, saw a credit rating decrease to Caa1 from B3 on Aug. 22, courtesy of Moody’s Investors Service.

The report described the resort’s cash intake as inadequate, with a similar report coming from Standard and Poor’s shortly after Moody’s determination, lowering Revel’s credit rating to CCC from B-.

From here, the much-hyped resort will continue to plea to lenders for a $100 million sum that would support operations through 2013.

This is on top of the $70 million it reportedly has already received.

BUSINESS MOVES

First Round Capital Moving Into Philly Venture capitalist and technology entrepreneur Josh Kopelman will be transplanting his First Round Capital firm to University City from West Conshohocken, raising questions about what the move means for tech business start-ups in Philadelphia.

Kopelman’s New York City-originated venture capital firm will soon occupy a 10,000-square-feet building on 40th and Locust streets, formerly the home office of Urban Outfitters.

Kopelman, who wrote on his blog that he previously believed making Philadelphia more like Silicon Valley was akin to asking “how can I make Philadelphia Chinatown more like China,” cited changes in tech start-up affordability and changing trends in the region as a source of inspiration for the move.

“I’m done sitting on the sidelines. And so is First Round Capital,” he wrote.

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WEEKLY BRIEFING

TECHNOLOGY

Robin Hood Ventures Completes OneTwoSee Funding EDUCATION

Partnership Halfway to Fundraising Goal of $100M The Philadelphia School Partnership announced August 24 the accomplishment of reaching the halfway point of meeting its $100 million fundraising goal, reporting a cash flow amounting to $51.9 million in two years.

The nonprofit partnership, which came following public outcry for improvements in the Philadelphia school system, dedicates itself to bolstering and broadening strong schools — charter, public, or private — in the Philadelphia area.

Mayor Michael Nutter touted the significance of the fundraising benchmark in a news conference, emphasizing the importance of leaving contentious political debates over Philadelphia School District funding in the dust.

“These are esoteric debates that ultimately don’t mean anything to these young people,” he said in a press conference.

The University City-based Robin Hood Ventures, a collection of angel investors, fulfilled its promise of $625,000 to up-and-coming social technology company OneTwoSee. The investors joined Ben Franklin Technology Partners of Southeastern Pennsylvania and Mid-Atlantic Angel Group recent months, in donating to the company, two compa- partnering with Comcast Sports Group to nies located in The Navy Yard. The former launch a computer-accessed application approved a $150,000 investment. encouraging audience participation during OneTwoSee has led the social TV pack in MLB sports events broadcast on the network.

Philadelphia’s Middle Class Shares National Concerns The American Dream has taken a belowthe-belt hit to its middle-class morale, according to a new Pew Research Center survey, The survey, which polled 1,287 selfdescribed members of the middle class across the nation and used the U.S. Census Bureau as a supplemental guidepost, found that 85 percent of those questioned expressed a growing view that it is now more difficult not just to ascend, but also to maintain their middle-class status they had in 2000. Only about 6 percent claim their ability to stay in the middle class is “about the same.”

This view comes at a striking moment for the American middle class, where for the first time since World War II the yearly household income has decreased for every income bracket. The middle-class bracket in particular is estimated by Pew Research to be at least double the national median, serving as the only class to shrink in size in the 10-year period.

In Philadelphia, the 2010 U.S. Census shows the percentage of households in the $25,000 to $99,000 per year income category at 51.2 percent, with a staggering 36.8 percent of Philadelphia County residents below this middle-class standard — well above the national average of 29 percent.

Philadelphia’s middle-income average, meanwhile, is on par with Pew’s estimated national average of 51 percent, but is still lower than it was a decade ago. Moreover, only 11.9 percent of households in the Philadelphia area are perched above the middleincome line — a stark contrast to the 20 percent average across the nation.

People gather for a drink and something to eat on Market Street.

(B. KRIST FOR GPTMC)

Those asked to describe the necessary annual household income believe $70,000 per year is ideal for living a middle-class lifestyle in an urban setting. By this standard, only 37.4 percent of Philadelphia County residents would be in or above the middle class tier.

Meanwhile, those surveyed by Pew looking to attach fault were more than happy to scold incumbent legislators. Sixty-two percent hold the belief that “a lot” of the blame for their economic woes should be attributed to Congress, which clocked in a record-low approval rating of 10 percent according to a Gallup poll released in mid-August — the legislative body’s lowest rating in nearly four decades.

When asked specifically about their financial prospects post-recession, 42 percent of middle-class citizens surveyed expressed a bleak forecast, claiming their finances had worsened since 2007.

Further dampening the spirits of the onceoptimistic American outlook, less than half of middle-class individuals surveyed express they are “somewhat confident” their children will have a higher standard of living than they do, with 23 percent not at all confident about the prospect going forward.

— Brandon Baker

MEDIA

Inquirer, Daily News to Shrink Page Sizes Continuing a streak of downsizing, the Philadelphia Inquirer and Daily News will cut down the breadth of their news pages beginning in November.

Width of the publications’ news pages will be shrunk to 44 inches, a four-inch decrease from its current 48-inch pages.

As a result, story lengths will be — according to a memo sent to employees last week — shortened by editors expected to now be “much more judicious” with word count and design.

The changes come as the Inquirer and Daily News reported a 2011 net loss of $17 million following disappointing revenue intake.

2013 US OPEN

Zoning Board Gives Official Go-Ahead to 2013 US Open The Haverford Zoning Hearing Board gave the final tee-off for the U.S. Open Golf Championship to operate its events next June at Merion Golf Club.

The approval officially gives the Golf Association the OK to use college property alongside Haverford Road between the time frame of November 1 to August 2013.

The Association will use the land for catering tents and compact office trailers, with a strict requirement that any land used be restored to its original condition by the date of August 1.

Hank Thompson, 2013 U.S. Open Championship director, reassured the board in testimony by saying that the event would have “about a $125 million impact to the region.”

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WEEKLY BRIEFING

MEDIA

9

TRANSPORTATION RETAIL

Patriot-News to Eliminate Daily Print Schedule

Delaware Cabela’s Store To Create Up To 150 Jobs

The Pulitzer Prize-winning Patriot-News announced Tuesday that it will cease daily publication.

The Harrisburg newspaper, which gained national recognition for its coverage of the Penn State child sex abuse scandal, will print on Sunday and two other days each week, beginning in January.

The second and third days of publication will be decided after polling readers and advertisers, the company announced.

“We are not making this move lightly,” Publisher John Kirkpatrick said in a statement on PennLive.com.

“We understand how important the daily print paper is to a large number of people in our region. However, this is a major step to make sure we are leading, not trailing, in the world of innovation and solutions.”

Christiana Mall in Delaware will soon have outdoor sports chain Cabela’s join its retail ranks just off of I-95.

The 110,000-square-foot space is expected to open in 2014, employing upwards of 150 employees.

The chain’s newest store comes without any state funding and is expected to draw incentive for the masses as a Delaware-located, suburban branch of the store.

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sales,” Cabela’s spokesman Wes Remmer told Philly.com. “We try to build in spots where we have a high concentration of customers.

“It’s not uncommon for people to drive a couple of hours to visit our stores.”

Pa. Turnpike Debt Exceeds $7 Billion The Pennsylvania Turnpike is more than $7 billion in debt, up from $4 billion three years ago, the Associated Press reported.

The turnpike has been losing money each year since the 2007 implementation of Act 44, which required the turnpike to pay for some road and bridge repairs across the state, even though tolls have doubled the cost of driving the turnpike over the last 10 years.

Its debt in 2002 was $2 billion, according to the Associated Press.

“Because of insufficient sources of cash flows from current operations, the commission plans to issue debt for the foreseeable future to finance its required payments to (the Pennsylvania Department of Transportation),” the commission’s auditors reported in the agency’s current annual report. “There can be no assurance that the commission will be able to continue to issue debt on terms that are acceptable, or at all, to finance these obligations.”

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WEEKLY BRIEFING

TRANSPORTATION

BUSINESS

SEPTA Looks At Extending High Speed Line Into KOP

Leadonomics Leads Regional Businesses on Inc.

The Southeastern Pennsylvania Transportation Authority is considering the extension of the Norristown High Speed Line into King of Prussia, the company announced this week.

A team led by Los Angeles-based engineering firm AEOCM will study the feasibility and environmental impact of such an undertaking.

Federal appropriations combined with money from PennDOT, Montgomery County and the King of Prussia Business Improvement District would fund the study, according to Norristown Patch.

The study seeks to analyze possible routes to the King of Prussia Mall and First Avenue in the King of Prussia Business Park, consider possible station locations and begin the federal environmental approval process, according to Patch.

The Delaware Valley Regional Planning Commission will develop a model of possible ridership to gauge the project’s likelihood of qualifying for federal funding. This phase of the project should last 15-18 months.

The fastest-growing companies in the Philadelphia metropolitan area, according to the 2012 Inc. 500 are: — Leadnomics (No. 26), had a three-year growth of 6,429 percent and earned $11.3 million in revenue.

— Accolade (No. 33) had a threeyear growth of 5,866 percent and earned $17.9 million in revenue.

— WebiMax (No. 37) had a threeyear growth of 5,651 percent and earned $7.1 million in revenue.

— The FlexPro Group (No. 104) had a three-year growth of 2,958 percent and earned $3.7 million in revenue.

— Drivers History (No. 151) had a three-year growth of 2,194 percent and earned $2.3 million in revenue.

— Aardvark Event Logistics (No. 165) had a three-year growth of 2,018 percent and earned $2.2 million in revenue.

— Techwave Consulting (No.

197) had a three-year growth of 1,827 percent and earned $8.2 million in revenue.

— RTA Cabinet Store (No. 237) had a three-year growth of 1,504 percent and earned $4.1 million in revenue.

— Transcend United Technologies (No. 254) had a three-year growth of 1,406 and earned $37.4 million in revenue.

— New Penn Financial (No. 310) had a three-year growth of 1,200 percent and earned $47.6 million in revenue.

— Free For All (No. 316) had a three-year growth of 1,187 percent and earned $3.9 million in revenue.

— Pacific Global (No. 318) had a three-year growth of 1,177 percent and earned $6.5 million in revenue.

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— Evolve IP (No. 321) had a three-year growth of 1,171 percent and earned $17.2 million in revenue.

— FluidEdge Consulting (No. 376) had a three-year growth of 989 percent and earned $5.5 million in revenue.

— Macro Energy (No. 380) had a three-year growth of 985 percent and earned $2.9 million in revenue.

— Prudent Infotech (No. 419) had a three-year growth of 886 percent and earned $2.4 million in revenue.

— HeadStream (No. 492) had a three-year growth of 774 percent and earned $4.4 million in revenue.

In the coming editions, Regions’s Business will feature some of the Philadelphia metropolitan area’s fastest-growing businesses, as determined by the 2012 Inc. 500.

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WHO TO FOLLOW

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WEEKLY BRIEFING

11

MUST-HAVE APP EXECUTIVE BOOKSHELF

Smith’s New Narrative Paul Smith aims to inspire with what could be considered an unconventional tactic for leading in the business world: storytelling. Smith, a research executive at Procter & Gamble, explains in his new book, “Lead with a Story: A Guide to Crafting Business Narratives That Captivate, Convince, and Inspire” how pathos can inspire fellow leaders and employees to maximize their working efforts, eliminating the standard and increasingly uninspired bullet-point method, shaking-up the rules of corporate culture. “[Paul Smith] provides the literary tools to create great stories that can teach, motivate and lead.”

– Wharton Magazine

Super PAC App Political advertisements don’t need to be 100 percent false to be considered 100 percent misleading. The Super PAC App looks to lead voters back to the truth.

The free iPhone app works similarly to Shazam — identifying a political ad based on its audio. It then tells the viewer who paid for the ad and how much it cost. It also itemizes the ad’s claims and gauges how truthful they are. Finally, it allows the viewer to rate the ad.

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Little Printer Litter Printer brings your online world to life, printing receipts, to-do lists, or coupons right from your smartphone. It runs on new cloud platform called BERG Cloud that pulls input from selected web services. You can pre-order one now ($315) and be one of the first to have one. The little guys will be available in mid-October.

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DEALBOOK

WEDDING APPAREL

LAW

TECHNOLOGY

Equity Firm Buys David’s Bridal For More than $1B

Philly Firm Acquires Freeh Group

IBM Buys Kenexa for $1.3B in Cash

David’s Bridal, of Conshohocken, has been acquired by equity firm Clayton, Dubilier & Rice, the companies announced this week.

The company was valued at about $1.05 billion, per the agreement. Additional financial details were not released.

Leonard and Green & Partners will remain a minority partner in the company.

“David’s Bridal is a unique and wellpositioned specialty retailer competing in a large and stable industry,” Richard J. Schnall, a partner at CD&R, said in a statement.

“We look forward to working closely with the company to build on its market leadership and scale advantages to grow in new market segments, channels, and geographies.”

“The CD&R team has a reputation for operational excellence and we welcome their ownership as we accelerate our growth strategies for the company and continue our commitment to providing the highest levels of style, quality and value to our customers,” Robert D. Huth, president and CEO of David’s Bridal, said in the joint press release.

CD&R Operating Partner Paul Pressler, former CEO of the GAP and former senior Disney executive, will assume the role of chairman at the close of the transaction, expected in the fourth quarter.

The law firm of Louis Freeh — Freeh Sporkin & Sullivan, LLP — has been acquired by Philadelphia’s Pepper Hamilton, effective September 1.

Mr. Freeh, the former director of the Federal Bureau of Investigation, was most recently known for his investigation into the Penn State child sex abuse scandal.

“We are delighted to join forces with Judge Freeh and his talented team,” Nina M. Gussack, chair of Pepper Hamilton LLP, said in a joint press release.

“The Freeh Group will deepen and broaden Pepper’s already substantial corporate investigations, white collar advocacy and enforcement practice in key markets.

“With this merger, Pepper and the Freeh Group have enhanced their world-class capabilities to provide key services with a global reach.”

Ms. Gussack said the two firms had already had a history together.

“We know our partners share a commitment to excellence and have experienced the benefit of working together as colleagues to enhance the value for our clients,”

Penn State students hold a candlelight vigil November 11 for the victims of the school’s child sex abuse scandal. Louis Freeh’s investigation, known as the Freeh Report, led to serious NCAA sanctions for the university.

(PENN STATE)

she said.

“Pepper Hamilton is the ideal firm to combine with the Freeh Group,” said Mr. Freeh in a statement. “We know each other well, having worked closely together on significant matters in a number of arenas, including white collar, pharmaceutical/ medical device, education, and financial services, both in the US and globally.”

Kenexa has been purchased by IBM for $46 per share — about $1.3 billion total — the companies announced this week.

The Wayne-based, publicly held company was sold in a cash transaction, according to a statement.

Kenexa uses Cloudbased technology and consulting services to engage a better workforce for critical business functions.

A recent IBM study showed that 57 percent of CEOs identified social business as a top priority.

“Every company, across every business operation, is looking to tap into the power of social networking to transform the way they work, collaborate and out innovate their competitors,” Alistair Rennie, general manager of social business for IBM, said.

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DEALBOOK

TELECOMMUNICATIONS

Verizon-Comcast Airwave Deal Approved The Federal Communications Commission voted 5-0 to allow Verizon Wireless to purchase unused airwaves intended for use by Comcast Corp.-led cable providers.

The Verizon purchase, which cost $3.6 billion, paves a clear path for future partnerships with Comcast and its runnerup in the cable market, Time Warner Cable Inc. According to unnamed sources from Bloomberg, the deal comes with the stipulation that Verizon will have restricted geographic access for cross-

approval in conjunction with the recent Consent Decree negotiated with the Department of Justice, will promote innovation, marketing and that the investment, competition, duration of this access be and consumer choice for video, voice, high-speed limited.

“We are pleased that the Internet, and wireless Federal Communications services in the ways we Commission has now planned when the deal voted unanimously to was announced.”

The FCC- and Departapprove the spectrum sale and transfer by Comcast ment of Justice-led and other cable compa- restrictions ultimately nies to Verizon Wireless,” aim to limit the ability of said David L. Cohen, companies like Verizon executive vice president of and Comcast to monopoComcast Corp. in a press lize the telecommunicastatement. “This timely tions market.

HOSPITALS

SENIOR LIVING

Prime Healthcare to Acquire Lower Bucks

Sunrise Senior Living Sites Purchased

RegionsBusiness.com Covering Philadelphia 24/7

Prime Healthcare Service will acquire Lower Bucks Hospital in Bristol Township, the company announced Tuesday.

The for-profit chain also recently took over Roxborough Memorial Hospital.

As part of the deal, Prime will “honor all contracts, liabilities, and union agreements,” according to Philly.com. The 156-bed facility employs 400 doctors and 1,400 “employees and volunteers,” Philly.com reported.

Prime also agreed to continue “the same level of charity care for indigent and low-income patients,” the companies announced in a news release.

The hospital, which was founded in 1954, had been in bankruptcy protection from 2010 until January of this year.

Sunrise Senior Living Inc. was purchased by Health Care REIT Inc. for $14.50 a share — a total sum of $1.3 billion.

Health Care REIT will take over all 14 sites located within a 30-mile radius of Center City, in addition to the two health care real estate ventures it has already invested in, including nursing home and assisted living operators Genesis Healthcare Corp. (Kennett Square) and Brandywine Senior Living (Moorestown).

SHARE YOUR NEWS Share news about your business by sending it to Brandon Baker at bbaker@ regionsbusiness.com

30 AUGUST 2012

REGIONSBUSINESS.COM

POLITICS

15

CONVENTIONS

ADVERTISING

Nutter Invited to Address Democrats

Conservative PAC Pulls Television Ads

Mayor Michael Nutter has been invited to speak at the Democratic National Convention in Charlotte, NC, next week.

The president of the U.S. Conference of Mayors joins convention Chairman Antonio Villaraigosa of Los Angeles, Rahm Emanuel of Chicago, Cory Booker of Newark, NJ, Anthony Foxx of Charlotte, Julian Castro of San Antonio and R.T. Rybak of Minneapolis.

The details of Mayor Nutter’s speech have not yet been released.

STATE

Judge Denies Second Trial After DeWeese Conviction Dauphin County Judge Todd Hoover denied former state Rep. Bill DeWeese the option of another trial last week.

DeWeese was convicted in February of using state-paid employees for election work during the time he served as House minority leader.

Although he ran unopposed in this year’s primary and remained on the ballot, a Pennsylvania judge ruled last week he was no longer eligible for re-election due to his crimes.

Additionally, Judge Todd Hoover denied a motion to modify DeWeese’s 2 1/2-to-fiveyear prison sentence.

Polls show Gov. Tom Corbett’s approval ratings on the decline. PHOTO COURTESY OF PENNSTATELIVE.COM

Latest Poll: Corbett Down, Casey’s Lead Holds Steady

The newest poll from the Philadelphia Inquirer finds that Governor Tom Corbett, after enduring low poll results all year, is down in the numbers again.

The telephone poll, held statewide last week with 601 participants, talked politics, nationally and regionally.

Fifty-two percent of voters disapprove of the governor’s job performance, while 38 percent approve. The poll also revealed that 56 percent of responders believe the state is headed in the wrong direction.

These low ratings could be due to a number of factors, most notably Gov. Corbett’s involvement in the Penn State child abuse

scandal and his deep cuts to the state budget. Only 17 percent of responders said they approved of how Gov. Corbett handled the scandal investigation while he was attorney general.

Senator Bob Casey, Jr. and Democratic Attorney General candidate Kathleen Kane received more favorable feedback.

Sen. Casey has a 19-point lead over his Republican opponent Tom Smith, similar to other polls held throughout the summer.

Ms. Kane held an 11-point lead over her own Republican opponent, Cumberland County District Attorney Dave Freed.

PHILADELPHIA

PLCB

State Cuts Homeless Project Funds

Report: PLCB Officials Took Gifts, Favors

The Corbett administration, known for lean budgets, has cut state funding to Philadelphia’s Homeless Advocacy Project, which assists disabled homeless people.

In late May, the Department of Public Welfare informed the Advocacy Project that it would lose $772,000 in one month.

The money had allowed the Project to administer SOAR, a national program that streamlines the Supplemental Security Income (SSI) application process, which can take up to

two years.

The Project gave those approved for SSI their benefits in an average of 32 days. According the federal Substance Abuse and Mental Health Services Administration, that’s the fastest rate in the country.

These funding slashes come just a month after the state cut funding to General Assistance, a safety net who the poor who didn’t qualify for other public assistance.

The Philadelphia Inquirer reported three high-ranking officials within the Pennsylvania Liquor Control Board improperly took gifts and favors from vendors, according to a report from the state Inspector General’s Office.

Chief Executive Officer Joe Conti, board member Patrick J. “P.J.” Stapleton III and Marketing Director James Short were named in the report, the Inquirer reported.

Americans For Prosperity is reportedly pulling its ads from Pennsylvanians’ airwaves and televisions.

NBC political reporter Chuck Todd tweeted, “Americans for Prosperity (the Koch group) has cancelled the rest of their PA TV ad buy. Still up in other swing states including MN and NM.” While AFP has not confirmed how long its ads will be absent, documents from the Federal Communications Commission filed Monday show that AFP is removing spots from 6ABC and NBC10.

Without AFP spots, Super PAC Restore our Future (ROF) is the sole significant conservative force in Pennsylvania. ROF has not yet announced any new videos.

FORMER U.S. SENATOR ARLEN SPECTER

I’M BATTLING CANCER. IT’S ANOTHER BATTLE I INTEND TO WIN.’ — ARLEN SPECTER

U.S. SENATE ELECTIONS

Spotlight on Smith After Abortion Comments Republican Tom Smith, hoping to unseat Senator Bob Casey, recently came under fire for comments comparing the birth of a child out of wedlock to a pregnancy caused by rape.

When asked if he was saying the two were similar, he said “no, no, no,” but followed by saying, “yes, it is similar.”

Mr. Smith opposes all abortions.

VOTER ID

PennDOT Issues Free Voting Cards Voters who lack certain documents required for a standard Pennsylvania Photo ID can now receive a Department of State voter ID card for free from PennDOT Driver License Centers.

This ID is valid only for voting purposes. If a resident has the necessary documents, PennDOT’s primary focus is to issue a secure Pennsylvania identification, according to a news release.

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30 AUGUST 2012

PRESIDENTIAL POLITICS

PENNSYLVANIA BALLOT

Third-Party Candidates Out After Republican Challenges Although Libertarian Major parties? Only Party presidential nomi- 2,000.

The Constitution Party nee Gary Johnson, former governor of New Mexico, removed Virgil Goode from the state submitted ballot Tuesday about 50,000 after Republisignatures, his cans threatened eligibility is to challenge still being chaltheir signatures. lenged.

Because the parThe voters, ty would have acting for the been forced to state GOP, are cover the cost questioning Gary Johnson of legal fees, those 49,000some signatures — they which could run as high as will be looked at in Com- $100,000, on their own, it monwealth Court. If the withdrew its candidate.

If Republicans succeed court finds in the voters’ favor, Mr. Johnson will be and Mr. Johnson is omitted from the ballot, Jill removed from the ballot.

To be on a Pennsylvania Stein, Green Party canballot, third party candi- didate, will be Pennsyldates must collect more vanians’ only third party than 20,000 signatures. option.

REGIONSBUSINESS.COM

Obama Leading Romney in Regional Fundraising Regionally and nationally, President Barack Obama has the lead over Republican candidate Mitt Romney in campaign donations.

According to Federal Election Commission reports, the Obama campaign generated $4.3 million from individuals donors in the Philadelphia region during a 15-month period this year. During that same time, Romney collected a lesser, but substantial amount of $3 million.

This figures include both donations made directly to campaign organizations and contributions made through fundraisers held by the candidates’ political parties.

Additionally, Obama has out-

raised his opponent nationally, with $348.4 million to $193.3 million.

These numbers don’t tell the whole story, however. They do not include Super PACs, which can raise unlimited sums as long as they don’t directly donate to the candidate for whom they are advocating.

According to Opensecrets.org, the liberal Priorities USA Action has raised a total of $25,502,719, while the Restore Our Future Super PAC, backing Gov. Romney, has collected $89,654,176.

Obama isn’t quite where he was during his last campaign in 2008, either. As of July 31, Obama was $893,000 behind his efforts in the last election.

POLLING

VP Pick Ryan Not Helping in Pennsylvania Republican candidate Mitt Romney’s much-anticipated VP pick, Wisconsin Representative Paul Ryan, does not appear to be paying off in swing state Pennsylvania.

Rep. Ryan was announced as Gov. Romney’s runningmate on August 11. An August 23 Muhlenberg College poll found President Barack Obama in a lead over his opponent 49 percent to 40 percent among Pennsylvania’s registered voters.

Almost half, 49 percent, of those surveyed have a negative opinion of Gov. Romney, and only 37 percent have a an overall favorable impression of him.

Gov. Romney and Rep. Ryan have a long road ahead of them if they wish to win Pennsylvania; a Republican candidate hasn’t won the state since 1988.

30 AUGUST 2012

REGIONSBUSINESS.COM

POLITICS

BUCKS COUNTY

Race for Congress Heats Up in Suburbs

One of the area’s more intense races is taking place in Bucks County, where U.S. Rep. Mike Fitzpatrick is challenged

by Democrat Kathy Boockvar.

The Daily News reported that Rep. Fitzpatrick raised $1.9 million as of last month and Ms. Boockvar has raised $673,000.

Ms. Boockvar spent $38,000 on her first television ad, which aired last week, according to The Daily News, which predicted “a flood of airtime... marked at congressional races in the suburbs.”

REPUBLICAN NATIONAL CONVENTION

UNDER PRESIDENT OBAMA THE DREAM OF FREEDOM AND OPPORTUNITY HAS BECOME A NIGHTMARE’ —RICK SANTORUM, FORMER U.S. SENATOR FROM PENNSYLVANIA

TO REPEAL, TO REPLACE, TO RESTORE — VOTE ROMNEY-RYAN, AND — IN WESTERN PENNSYLVANIA — ROTHFUS.’ —KEITH ROTHFUS, REPUBLICAN CANDIDATE FOR PA’S 12TH DISTRICT

Send political news tips to Emily DiCicco at edicicco@regionsbusiness.com

STATE HOUSE

17

CONGRESS

Democrats Move to Replace Brennan Daniel McNeill, a former Whitehall Township executive and commissioner, is likely to replace state Rep. Joe Brennan on the ballot, the Associated Press reported.

Mr. McNeill was chosen by Democratic county committee members in Lehigh and Northampton counties. The final decision will be made by a state Democratic committee. The selected candidate will be up against Republican Dave Molony.

Mr. Brennan abandoned his bid after facing drunk driving and assault charges.

Rep. Jim Gerlach

Dr. Manan Trivedi

Incumbency Helps Gerlach Maintain Sizable Advantage Rep. Jim Gerlach has a lead of almost 25 percentage points over his Democratic opponent, his campaign announced this week.

The internal survey showed 54 percent of responders favoring the incumbent. About 30 percent favored Manan Trivedi, a veteran and

surgeon. Seventeen percent said they were undecided.

Rep. Gerlach has the advantage of being an incumbent. More than 90 percent of those polled recognized him by name; only 36 percent recognized his Democratic challenger.

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PENN STATE’S IMAGE REHAB Everyone knows what happened. But there is no consensus on whether or not there is a cultural or systemic problem and no agreement about how to move forward.

BY JOEL HAMMOND

S

ixty-four years ago, the United States was divided, still, nearly a century after the Civil War. Until 1950, black military men served in different units than their white counterparts.

School segregation officially ended in 1954, with the landmark Brown vs. Board of Education Supreme Court decision, though it would take many years after the decision for the process to be fully eradicated. Jackie Robinson broke Major League Baseball’s color barrier in 1947.

The issue remained on college campuses, too, and within football teams on those campuses. In 1946, Penn State University’s football team voted unanimously to cancel a came against segregated University of Miami.

Two years later, then, when Southern Methodist wanted to meet with Penn State before the 1948 Cotton Bowl — an attempt to convince Penn State to leave its two black players home — there was little doubt what the Nittany Lions’ response would be.

We all play, or none of us play, guard Steve Suhey said then, according to one of two black teammates, Wally Triplett.

We are Penn State.

Those four seemingly simple words today have become wildly complicated: While until Nov. 3, 2011, they’d united Penn State students and alumni across the country and world — not to mention State Collegians and other Pennsylvanians who feel bonded to their state’s largest school — today they serve as a highly charged point of division.

Of a school whose academic and athletic success should be championed, held up as a model.

Of a school where athletic largesse and the egos that go with excess success create a culture in which a pedophile can operate unchecked, ruining the lives of children and their families.

This is a story about where Penn State has been, and where it’s going. And not everyone agrees -- on either point.

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Iconic Old Main on the Penn State campus, steeped in history. PHOTO COURTESY OF PENNSTATELIVE.COM

L

s

ast November 21, the Penn State Board of Trustees officially contracted the law firm Freeh, Sporkin & Sullivan LLP to investigate the actions of university officials in response to allegations against Jerry Sandusky, the now-convicted former defensive coordinator of the school’s football team. Led by former FBI director Louis Freeh, the firm eight months later issued a scathing 267page document, at the end of which it made recommendations for the university going forward.

Chief among its conclusions, Freeh & Co. lampooned the “Penn State Way” and a “resistance to seeking outside perspective, and an excessive focus on athletics that can, if not recognized, negatively impact the university’s reputation as a progressive institution.”

Penn State detractors, and those who believe college athletics in general have grown too large, agree with Mr. Freeh, citing that culture as the culprit in enabling Sandusky’s crimes to grow. Why else, they argue, would four men — first, the former Senior Vice President of finance and business Gary Schultz and former Athletic Director Tim Curley, followed by the

late legendary football coach Joe Paterno and since-ousted university President Graham Spanier — not do more to stop Sandusky’s serial abuse of children?

On May 4, 1998, according to the Freeh document, Mr. Schultz was notified of a report to the university police department of a mother who said Sandusky assaulted her 11-year-old son on campus. He, in turn, notified Dr. Spanier and Mr. Curley, the latter of whom informed Mr. Paterno. A month later, the district attorney declined to bring charges against Sandusky, a point emphasized by Penn State supporters who absolve the school of wrongdoing in this first case, given the police department’s involvement.

But critics say the administrators’ unwillingness to address the topic then — Sandusky at the very least acted inappropriately with one of the youths he’d built his life around helping — allowed the 45 other counts of sexual abuse for which Sandusky eventually was convicted on June 23.

Why the inaction?

Start with money, critics say. Penn State’s athletic department reported more than $116 million in revenue in the 2010-11 fiscal year, according to the latest data available from the U.S.

Department of Education; profits, meanwhile, registered at just under $32 million. The football program alone had profits of more than $53 million that year.

Continue onto Mr. Paterno’s legacy, which included a now-deconstructed statue on the Penn State campus and Big Ten trophies and buildings named after him. Add in a nationwide obsession with all things football — not limited to State College, of course — and the result is “hero worship,” as it was termed by NCAA president Mark Emmert in remarks on July 23 after announcing penalties against Penn State that included a four-year bowl ban, 40 lost scholarships and a $60 million fine.

“These programs have become too big to fail, to borrow a phrase,” said Jason Lanter, the past president of the Drake Group, the goal of which is to “help faculty and staff defend academic integrity in the face of the burgeoning college sport industry.” Mr. Lanter also is a psychology professor at Kutztown University. “Joe Paterno was directly responsible for the university and the city itself.

“These officials made conscious decisions at each step along the way in deference to the institutions of Joe

Paterno, Penn State football, the university and this idea of ‘Happy Valley.’”

Perhaps most striking were the observations in 2000 and subsequent failure to act by custodians who, according to testimony at trial, saw Sandusky assaulting a boy in the Lasch Building showers. A supervisor told the first custodian he could report what he saw, but that man declined, saying, “No, they’ll get rid of all of us.”

Later, a colleague commented to Mr. Freeh that reporting the situation “would have been like going against the President of the United States in my eyes.”

“In any other setting, there would be no hesitation on the moral imperative, but they were fearful,” said Lew Margolis, a member of the University of North Carolina’s Athletics Reform Group, faculty members who meet to discuss the role athletics play on campus. (UNC currently is embroiled in its own academic scandal.) “The power of JoePa’s image distorted people’s ability to take appropriate steps. The cultural force of athletics and football in particular is so strong that it’s made it impossible for people to realize when they’re doing wrong.”

Penn State alumnus Mark Jinks admits the football team’s outsized role

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Did Big Ten Membership Change Penn State for Better or Worse?

BY JOEL HAMMOND

P

enn State clearly had established itself as a football powerhouse before the school voted in 1989 to join the Big Ten and started Big Ten play in 1993: eight finishes in the top three of the postseason Associated Press poll, including a national championship in 1986 after an upset over fellow independent Miami.

What was less clear at that point was Penn State’s immediate academic future: what now is a massive research institution with a nearly $1.8 billion endowment and 119,000-plus applicants per school year.

Many have criticized the rapid growth of the school’s athletic department — now an operation that brings in $116 million a year in revenues — and the power that goes with that amount of money as a culprit in allowing the Jerry Sandusky scandal to careen out of control.

But has the school’s academic growth — also seen by many as a direct offshoot of entering the Big Ten and keeping up with the conference’s elite research institutions, such as Ohio State and Michigan — also had a negative effect on campus?

Only 66.3 percent of undergraduates — 25,839 — enrolled at Penn State’s main University Park campus in the 2011 school year hailed from Pennsylvania, down from 77 percent (26,600) of undergraduates enrolled on the main campus in 2001, the oldest data Penn State could provide by Region’s Business’ deadline. Meanwhile, tuition now totals $15,562 for an undergraduate at the school’s main campus, which represents the school’s lowest increase in 45 years, according to school spokeswoman Lisa Powers. Yet that figure still is 26.7 percent higher than the $12,284 it cost the same freshman to enroll five years ago.

“The demographics definitely have changed, and I’m not sure if it’s for the best,” said Lou Prato, a 1959 Penn State graduate who helped create the Penn State All-Sports Museum and has written books such as “The Penn State Football Vault” and “What It Means to be a Nittany Lion.” “I run into students along the way, on campus, in town. I’m surprised where they’re from.”

He said the school’s “state-related” status — granting it independent control while still receiving some state funds — has forced the school to look for a different student demographically and seek out more private donations. The school will receive $227 million, or about 5.2 percent of its $4.3 billion budget, and the quarter of schools that hold “state-related”

I DON’T THINK THERE IS A NEXUS BETWEEN INCREASED ACADEMIC QUALITY AND THE BIG TEN MEMBERSHIP.’ —MARK JINKS

status, including Pitt, Lincoln and Temple, often have much higher tuition rates than other state schools.

Mark Jinks agrees that fewer Pennsylvanians have access to the university, and says the trend of increasing tuition has played a part, along with declining state aid. Nationally, according to a report by the College Board Advocacy & Policy published last October, tuition at public, four-year colleges increased 8.3 percent from the 2010-11 school year to 2011-12; that far outpaces an often-used comparison, the Consumer Price Index, which grew 3.6 percent from 2010-2011.

“Penn State has gotten away from its roots in providing higher education for PA high school graduates from lower and middle income households” because of those factors, said Mr. Jinks, the deputy city manager for the city of Alexandria, Va., and a Penn State alumnus and former student government president.

“I don’t think there is a nexus between increased academic quality and the Big Ten membership.”

ENDOWMENTS FOR BIG TEN SCHOOLS According to the National Association of College and University Business Officers and Commonfund Institute as of March 12, 2012.

Michigan: Northwestern: Minnesota: Ohio State: Purdue: Wisconsin: Penn State: Illinois: Indiana: Michigan State: Nebraska: Iowa:

$7,834,752,000 $7,182,745,000 $2,503,305,000 $2,120,714,000 $2,120,714,000 $1,872,933,000 $1,725,138,000 $1,725,138,000 $1,574,815,000 $1,400,380,000 $1,241,577,000 $1,044,097,000

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REGIONSBUSINESS.COM

This year marks the Penn State football team starting a season without Joe Paterno for the first time in many fans’ memory. PHOTO COURTESY OF PENNSTATELIVE.COM

on campus and in the community was a significant part of Sandusky’s crimes going unreported by the school’s most prominent officials.

But Mr. Jinks, now the deputy city manager for the city of Alexandria, Va., said in college towns like State College — where the university often becomes the sole focus — it’s easy to become disconnected, and for officials to lose the ability to look objectively at operations, to become unwilling to rock the boat.

“One of the chief problems with the school is that it’s isolated,” said Mr. Jinks, a State College native and former Penn State student body president. “You can see that a lot of the people involved in the scandal were there for a long period of time.

There’s not a lot of experience in other organizations or settings. That limits your ability to handle something that’s out of the ordinary.”

It was doubly problematic when it embroiled the football program, which, for better or worse, had become Penn State’s identity, its national calling card.

“The football program was the chief symbol of how good of a school Penn

State is,” Mr. Jinks said. “You can’t excuse it, but you can see how these officials were taking a risk of hurting the brand had they taken the appropriate steps.”

P

s

ent ever since 1970, when Standing Order IX, in Mr. Novak’s words, created a structure in which “the whole governance of the University … has made this scandal not only possible but almost inevitable.” Prior to 1970, the student body, faculty and president each had “their own responsibility, scope of action, lines of authority and ways of doing things,” Novak wrote.

Each group had a “large degree of discretion in how they handled their responsibilities,” and “could bring people together to solve problems.”

Dean Phillips can attest to the students’ power at this juncture. Mr. Phillips, a State College native and the first Penn State student to be elected to the State College borough council, now is a shareholder at Elliott Greenleaf in Philadelphia. Mr. Phillips, elected to

borough council with the help of the Penn State student body, led an effort to pressure the university to bring regional bus service to Centre County.

“Student pressure in the early 70s forced the university to join forces with the local governments to provide a permanent regional transportation authority,” Mr. Phillips said. “In those days, students, led by savvy student leaders, were at the high point of their power. But it has eroded since then.

Students were more powerful, and in an organization as large as Penn State, having different interests represented at the table helped decision makers not lose their perspective. That is why it is critical that the administration and the board listen to students, faculty and alumni

enn State supporters, meanwhile, argue that a cover-up to protect the football program and its vast influence didn’t exist, that the school’s governance structure, rather, proved faulty and allowed a small group’s failures to corrupt the entire campus.

“No one who knew Joe thinks that he would have consciously overlooked something like this for the benefit of the football program,” said Ben Novak, a 1965 Penn State graduate who served as student government and later as a member of the school’s board of trustees from 1988 to 2000.

Mr. Novak in January wrote his ... IT IS CRITICAL THAT THE ADMINISTRATION own response to the scandal, a AND THE BOARD LISTEN TO STUDENTS, 25-page takedown of the school’s governance titled, “Reflections of FACULTY AND ALUMNI AND THAT THEY WORK WITH a Former Trustee: How the Penn THE GOVERNOR AND GENERAL ASSEMBLY TO MAKE State Board of Trustees Really SURE THAT PENN STATE FULFILLS ITS MISSION Works.”

AND ACTS MORALLY AND LEGALLY AT ALL TIMES.’ In that piece, Mr. Novak argues that the school has been differ- —DEAN R. PHILLIPS

22 and acts morally and legally at all times.”

Instead, Penn State’s new governance structure “concentrated all the power and information flow in the hands of the president,” Mr. Novak wrote. Mr. Paterno, the Freeh report notes, even cited those procedures to a (Harrisburg) Patriot News reporter, saying, “I didn’t know exactly how to handle it and I was afraid to do something that might jeopardize what the university procedure was. So I backed away and turned it over to some other people, people I thought would have a little more expertise than I did.”

The Freeh report repeatedly cites failures by the board to monitor the situation at the university, in 1998 and 2001 when Sandusky was investigated, and later in 2011 when it knew of a grand jury investigation but “failed to perform its duty of inquiry.” Generally, Freeh said, the board did not have regular reporting procedures and structures in place to ensure disclosure of major risks.

The report also harshly criticizes Spanier, who at many junctures failed to inform the trustees of Mr. Sandusky’s actions and that 2011 grand jury investigation, even though in the latter case, for instance, the board did seek information. Mr. Spanier, instead, worried to colleagues at one point that if the school approved the board’s idea of an independent review that “we’ll never get rid of them.”

“Now, we have this bureaucratic procedure, which Paterno used,” Mr. Novak said. “Well, those bureaucratic procedures are what caused this in the first place. In the old days, this would have been handled by grabbing Sandusky by the collar and punching him out. But Paterno reviewed Penn State policies and did what state law said he had to do, namely report the incident to his superiors at the University. Today, Joe Paterno is being crucified because the law’s procedures didn’t work.”

(Mr. Spanier, in his first public comments since being fired, told The New Yorker last week that the Freeh report was “wrong … unfair … (and) deeply flawed. They interviewed, they say, over four hundred and thirty people; many of those folks have spoken to me about their interviews. Many of them describe those interviews to me as a witch-hunt.”)

Meanwhile, the board’s final mistake, Mr. Novak said, was calling for a full, independent investigation — what turned into the Freeh report — and then a day later firing Mr. Paterno. In Mr.

30 AUGUST 2012

REGIONSBUSINESS.COM

THE BOARD DECIDED PATERNO WAS GUILTY. THEY GAVE LEGS TO THAT NARRATIVE, FED THE FREEH REPORT...’

—BEN NOVAK

PHOTO COURTESY OF PENNSTATELIVE.COM

Novak’s view, the Freeh investigation might have been different had the board not essentially determined Paterno’s guilt before Freeh & Co. even started; in turn, Freeh & Co. found “that it is more reasonable to conclude that, in order to avoid the consequences of bad publicity, the most powerful leaders at the University … repeatedly concealed critical facts relating to Sandusky’s child abuse.”

The NCAA subsequently fed off the Freeh report in slamming Penn State with its most severe penalties since imposing the so-called “death penalty” on Southern Methodist University in the late 1980s.

“The board decided Paterno was guilty,” Mr. Novak said. “They gave legs to that narrative, fed the Freeh report, and in the end, we now have a split and divided alumni base.”

Mr. Phillips, the Elliott Greenleaf shareholder, wonders how things would have been different if lawyers had been more involved along the way. After the 1998 incident, according to the Freeh report, Mr. Sandusky committed assaults in 1999 and 2000, and in February 2001, former assistant coach Mike McQueary reported to Mr. Paterno that he’d seen Sandusky involved in another incident on campus. Mr. Paterno reported it a day later to Mr. Schultz, who consulted outside counsel Wendell Courtney; Mr. Courtney “conducted legal research”

and later that day reconnected with Mr. Schultz.

But after that meeting, Messrs. Spanier, Schultz and Curley together formed an action plan that at first included informing the Second Mile (Sandusky’s charity for helping children), reporting to the Department of Welfare and prohibiting Sandusky from bringing children alone into the Lasch Building.

But later, that plan changed to simply offering Sandusky “professional help,” assist him in informing Second Mile and, if Sandusky was amenable to those requirements, not informing the welfare department.

“By 2001, whatever you think McQueary saw or heard, you have no choice,” Mr. Phillips said. “Charges were not filed in 1998, and maybe they didn’t know he’s a serial child molester at that time. But they knew something inappropriate happened. They had to report to child welfare and they should have reported to law enforcement. It wasn’t up to them to show mercy towards Sandusky.

“I don’t think ‘pedophilia’ and ‘sodomy’ were in his vernacular. If he believed Sandusky was a child rapist, I don’t think he would have supported a decision not to report. That still does not excuse him for a very bad decision that had tragic consequences. As for the others, especially President Spanier, after hearing

McQueary’s accounts, I would think their next step should have been to either call the authorities or if they had any doubt at all about what they were obligated to do, call the University lawyer.

That lawyer then should have said, ‘You don’t have a choice here. You have an overriding legal (and moral) obligation to the children, once you have knowledge of suspicious behavior.’ As best I can tell, that call never took place and that advice was never given.”

s Penn State has done plenty right in the scandal’s aftermath, supporters say.

On Aug. 15, the school announced it would play host in October to a national sex abuse panel, featuring experts on childhood abuse and contributions from former boxing champion Sugar Ray Leonard and Elizabeth Smart, each of whom suffered abuse. Ms. Smart was abducted from her home at age 14 and held in captivity for nine months.

The panel is the latest effort by the school to support those who have and will suffer from sexual abuse: The school’s $60 million fine will go to programs designed to prevent and treat child abuse, and Penn State also will use $1.1 million to create the Center for the Protection of Children; donate $1.5 million to the Pennsylvania Coalition

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Financial Hit Will Likely Be Temporary

BY JOEL HAMMOND

F

ines totaling $73 million that Penn State University collectively must pay to the NCAA and the Big Ten conference likely are just the tipping point in the financial consequences the school will feel as a result of the Jerry Sandusky sexual abuse scandal.

The athletic department will feel some effect, insiders say, with some sponsors distancing themselves and a decline in the always-robust licensing and merchandise sales arena. Penalties from anticipated civil suits filed by Sandusky victims, too, should be quite punitive.

Meanwhile, one of the university’s insurers, the Pennsylvania Manufacturers’ Insurance Association, filed to deny or limit its liability coverage in a Common Pleas Court filing in Philadelphia last month.

Yet if early metrics provided by the school are any indication, the Penn State brand – and its robust fundraising track record -- could continue on as strong as ever, if not stronger.

The university announced in early July that alumni and friends had given $208.7 million -- the second-highest total in its history -- in fiscal year 2012, behind only 2011, when the numbers were skewed a bit due to Terry Pegula’s massive gift to start men’s and women’s hockey programs.

The 2012 total, Penn State spokeswoman Lisa Powers said, included 191,712 supporters providing 323,271 gifts, both Penn State records.

That total, in the face of the damaging Sandusky scandal, is no surprise to Rae Goldsmith, the vice president of advancement resources at the Washington, D.C.-based Council for Advancement and Support of Education. Ms. Goldsmith, who joined the nonprofit after 22 years in higher education marketing and communications – with a specialty in crisis communications – said often in crisis, if a scandal does affect a school, it’s not for very long.

“And, often,” she said, “people have long-term relationships and beliefs that the school closest to them will recover; donating is their way of expressing confidence.

“People step back, look for leadership and a commitment to correct the things that have gone on and continue to show support.”

While the school’s fundraising remains strong, Penn

Last year, more than 191,000 supporters donated more than $208 million to Penn State, a record fundraising total for the university. PHOTO COURTESY

State’s Ms. Powers said last week said the school won’t need to touch any of that pile to fund costs related to legal defense or public relations efforts in the wake of the Sandusky scandal. Instead, those penalties will be paid with monies from its athletic reserve fund, its capital budget and internal loans, not taxpayer funds, donations or the university’s endowment, which as of June 30 totaled $1.76 billion.

Meanwhile, Ms. Powers also noted that Pennsylvania Manufacturers is only “one of several carriers with whom we engaged. We believe we’re adequately insured and we also believe this individual’s claims are without merit.”

Still to be determined, though, are the penalties associated with lawsuits brought by victims and their families.

Marc Sanchez, a lawyer at Frantz Ward LLP in Cleveland who specializes in insurance cases, said damages related to those suits could be “unlimited.”

“It’s great for those plaintiffs’ lawyers,” he said, “because you know what’s happened; how can those suits be defended?”

On the athletics side, despite some initial anticipated pullback from licensees, athletic revenues should remain robust, unless Beaver Stadium is half full – very unlikely – or the Big Ten kicks the Nittany Lions out – even more unlikely, given the school’s massive alumni and fan bases.

Penn State drew an average of 101,427 fans per game in State College last year, down from 104,234 in 2010.

But 107,282 watched the Nittany Lions in Nebraska the weekend after the scandal broke, and ticket sales remain steady. The Big Ten, meanwhile, while missing Penn State from its list of potential bowl teams for four years, shows no signs of slowing: It paid member schools, including Penn State, a record $25 million apiece last year, up from $22.8 million in 2010 and $18.7 million in 2008. Those payouts are a combination of bowl revenues, Big Ten Network money and other sources.

Where the school initially could be hurt is in the sponsorship and licensing areas, with companies reluctant to be associated with the scandal-tainted school.

“There is no manual for current sponsors, since this is the most infamous scandal in collegiate sports history,” said Eric Wright, the vice president of research and development at Ann Arbor, Mich-based Joyce Julius & Associates, which measures and evaluates sponsorships and promotional programs. “Initially, some sponsors want to distance themselves; but in time, if the Penn State fan base remains passionate, others may see the school as an opportunity.”

That applies to merchandise sales as well, said Matt Powell, an analyst with SportsONESource, a Charlotte,

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N.C. company that tracks merchandise sales and licensing deals. Mr. Powell’s data show Penn State merchandise sales of about $80 million in 2010, compared with $60 million in 2011 and an even bigger drop this year, after the Freeh report was released.

But given the school’s wide reach and the massive amounts of money at stake – Mr. Powell estimates yearly sales of collegiate-licensed materials at $5.5 billion -potential corporate partners likely won’t stay away for long.

“After the shock wears off, people will return. Licensees are used to ebbs and flows,” Mr. Powell said, noting the case of Michael Vick. “If the brand felt their reputation would be harmed, like Nike, it will move away. But Nike has returned to Vick.”

Back on campus, the university, one of four “state-related” schools in Pennsylvania, remains healthy financially despite a lag in state funding felt all across the country: Penn State will receive $227 million from the state for the 2012-13 school year, which Ms. Powers compared to 1995-level funds.

Yet the university, for this school year, instituted the lowest tuition hike in 45 years and will propose another “very modest increase” next month for the 2013-14 school year, Ms. Powers said.

Against Rape; and push alumni to donate to the Rape, Abuse & Incest National Network, an effort that netted about $550,000.

But what the school’s board of trustees got wrong was allowing the Freeh report’s contention that Penn State’s culture was the problem to go unchallenged, said Kevin Horne, a Williamsport native and junior journalism major who writes for the popular OnwardState.com blog. In a statement after the Freeh report was released on July 12, the Penn State board said, “the focus of all of our actions going forward will be on driving a culture of honesty, integrity, responsible leadership and accountability at all levels and within all units of our institution.”

But in what it didn’t say, the board indirectly furthered the already wide divide felt by Penn State stakeholders.

“Rightfully, I think the university felt it had an obligation to be a national leader in child abuse prevention,” Mr. Horne said. “But it would have served the school, the board and (new president Rodney) Erickson well to say, ‘We accept the findings from the Freeh report and whatever penalties may go along with it, but we don’t accept that our culture created this.’

The “Penn State Way,” others agree, is what will help the school and its far-flung supporters recover and should be treated as such by the university. While critics often have spoken the loudest, the school quietly had its second-highest donation total in the fiscal year that ended June 30, raising $208.7 million in support from alumni and friends.

That figure included new records of 191,712 supporters making 323,271 gifts, and the fiscal year 2012 total ranked behind only 2011, which included what ended up being a $102 million donation from Terry Pegula in September 2010 to establish men’s and women’s Division I hockey programs and build a state-of-the-art ice arena.

Elliot Greenleaf ’s Mr. Phillips said the university must “remind people of all that Penn State does for the people of Pennsylvania ... (and) talk about all the programs at Penn State that contribute to the health, welfare and education of the Commonwealth’s citizens.

“We have been condemned for our slogan,” an impassioned Mr. Phillips said, “because most of us are loyal and proud and we still believe in winning with honor and with academic excellence. For most of us, when we say, ‘We are Penn State,’ we mean to be inclusive and we embrace anyone who comes into contact with our community.

“The solution here is long-term commitment to change the culture and to put in place policies and procedures to make sure this never happens again.”

s There still are hurdles to clear, and actions will speak louder than any words. Earlier this month, the Middle States Commission on Higher Education — which serves as the accrediting body for 530 schools, including Penn State — placed the university on warning, a very unusual step for a Division I school, according to a commission spokesman.

Additionally, the school also is under more scrutiny from lawmakers, who 10 days ago said they would push for greater transparency from Penn State, Temple, Pitt and Lincoln, Pennsylvania’s four “state-related” schools.

Those legislators want the quartet to be fully subject to the state’s Right to Know Law, which, according to the state, “provides for access to public information … (and) for reporting by State-related institutions.”

At an impromptu retreat last weekend, trustees discussed those issues, along with “governance issues, including financial duties, risk oversight, conflict of interest, board structure and leadership, and governance ‘best practices,’” according to an agenda obtained

by The Centre Daily Times.

Those trustees also most certainly discussed ways to mend Penn State’s broken reputation, though early metrics show support hasn’t waned yet: In addition to the $208 million raised in fiscal year 2012, student applications showed a modest jump in 2012 over 2011, despite the scandal, according to school spokeswoman Lisa Powers.

Plus, there is no shortage of people who want to help fix things. Take the school’s most recent board elections, of which Tom Sharbaugh was a part. Mr. Sharbaugh, a 1973 Penn State graduate who currently is the managing partner of Philadelphia law firm Morgan, Lewis & Bockius, last year started a microfinance loan fund for students in financial emergencies, such as a parent losing a job. The fund has raised about $225,000 so far, and students can access it for up to $3,000.

Wanting to have more of an impact, he ran for a spot on the board in May, and lost. But more surprising to Mr. Sharbaugh was the interest in the election: In 2010, with three vacancies, six people ran. Last year, with three vacancies, eighty-six ran.

“There are a lot of people who want to get things right,” he said.

Mr. Phillips, the Elliott Greenleaf lawyer, said the school should pour even more resources into its youth programs — with even more oversight of those involved, of course. According to the university, over 220,000 youth participate each year in the school’s youth outreach programs, which include music, communication, weather, cooking and architecture camps, along with a science and humanities symposium And count Mr. Jinks, the former student body president who now is deputy city manager for the city of Alexandria, Va., among those with ideas. His plan is simple: As Pennsylvania, like most states, struggles with its economy, use Penn State’s vast resources to make a tangible impact in communities across the state.

“Branding and marketing are fine,” Mr. Jinks said, “but how can the university help towns across the state function better, help them deal with their issues?

“The university should be touching people’s lives, not just in public relations, but in actual actions it takes People see those actions.”

s Freelance journalist Joel Hammond can be reached at hammond_joel@yahoo.com.

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VISIONS OF A WORLD-CLASS PHILADELPHIA Innovation and creativity are driving significant economic growth - and plenty of excitement across our region. Could they be the catalyst that vaults our city over the top?

The conclusion of our two-part series.

BY ELISSA VALLANO

“People that age today want to be riding their bicycle to work, using transit and being conscious of n recent years, Philadelphia has shifted their impact on the environment.” gears and surged forward along a new And thus the new downtown was but exciting path. The typically tradiborn. The current landscape tional city has embraced its two greatof Center City Philadelphia est assets — creativity and innovation — and is filled with a generation of the results have been dynamic. Regional people choosing to be in the city tourism has exploded, the creative sector not only for the arts and culture, is flourishing, and a city once famous for but also because they want to live manufacturing has built a name for itself as a sustainable lifestyle. an innovation hub. The old black-and-white “This is a pre-automobile vision for Philadelphia is now bursting with street grid,” Mr. Levy said. color, and that means big changes for the city.

“Intimate scale, walkable In part two of Regions Business’ series, Philadelphia’s power players discuss prob- — easiest city in the world to jaywalk in. That made us totally lems and possibilities as the city tries to uncompetitive in the ’50s and ’60s compete on the world stage. when it was all about how many Paul Levy automobiles and trucks you could move in and out PRESIDENT & FOUNDER OF CENTER CITY DISTRICT of place. By simply doing “I was reading Motor Trends magazine nothing, we become suswhen I was 18 and wanted a GTO or a Mustang,” Paul Levy, president tainable. We stand still and founder of and suddenly that grid Center City is re-infused with value.”

District, That is not to say Philasaid. delphia has done nothing to encourage this Center City rebirth.

“The fact that we have preserved a good human WE HAVE A TAX STRUCTURE THAT IS scale of the city was not PERFECTLY SUITED by accident,” Mr. Levy said. “We’ve built over TO A 19TH CENTURY the last 30 to 40 years INDUSTRIAL this wonderful Jane Jacobs mixed-use enviECONOMY.’ ronment, and that has —PAUL LEVY been the result of a lot CENTER CITY DISTRICT of good work on a lot of different people’s parts.”

In addition to its eco-advantages, Center City appeals to those who place a high value on diversity and vitality — especially residents looking to start

I

a family. Between 1990 and 2010, the total amount of children born to Center City parents increased by 58 percent.

“We’ve had a huge bulge of young people who have been coming in,” he said. “Add on top of that a group of people who grew up in the suburbs who do not want to raise their own kids in a homogenous environment because they understand the 21st century economy is global. To grow up in a homogenous environment is not to prepare your kids for this world.”

Another way Center City strengthens Philadelphia is through employment. Downtown accounts for 39.6 percent of all private-sector jobs in the city and 43.5 percent of all sala-

TOP 10 FINISH

Millennials <3 Philadelphia 10 best cities for millennials (born 1980 or later).

Seattle Houston Minneapolis Washington, D.C. Boston Dallas New York Tampa Philadelphia (tie) San Francisco (tie) MILLENNIAL BRANDING/PAYSCALE

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that is set to be completed in the spring of 2014. ries, but there are still challenges to growth.

“We have a tax structure that is perfectly suited And while there have been several high-profile to a 19th century industrial economy,” Mr. Levy incidents of crime in the typically safe area, said. “So much of work today is mobile, and two- most Philadelphians have noticed substantial thirds of city tax revenue is taxing wages and improvements to Center City.

In the Center City District’s latest survey, profits. We way under-depend on the real estate tax and taxing land, so that has been working so 56 percent of residents described the general atmosphere of Center City as “much better” or much against us.”

Mr. Levy also shares some of his colleagues’ “somewhat improved” over last year, and only 3 concerns over the effect of rising taxes on busi- percent described it as “worse than before.”

“Any crime is one too many,” Mr. Levy said. ness growth.

“We were improving for eight years under “But the reality is that over the last two decades, [former mayors Edward G.] Rendell and [John non-violent crimes have been reduced in Center F.] Street, and now [Mayor Michael A.] Nut- City by 74 percent. This downward trend has ter, who was elected under that platform, con- occurred as the population has increased by 26 fronts the recession,” he said. “Now he’s stuck in percent, the number of hotels has gone up by 95 a mode that is not unlike the mode of the late percent, tourism has increased dramatically, the ’80s, which is to continue to raise taxes to try to number of fine dining restaurants have gone up work your way out of a problem. Taxes support by 322 percent, and arts and cultural instituservices, but tax policy shapes an environment tions have flourished.” in which business grows or doesn’t grow.”

Despite its outdated tax structure, PhiladelJohn Fry phia is a city that still manages to attract and PRESIDENT OF DREXEL UNIVERSITY inspire. There has been more than $12.3 billion “There’s an intimacy here, a smaller town feelin development in Center City and Univer- ing,” John Fry, president of Drexel University sity City since 2007, and four major projects — said. “Philadelphia feels more accessible and Independence Hall, the Delaware River’s edge, friendlier. We do a good job of quickly acclimatthe Pennsylvania Academy of the Fine Arts and ing people to the community.” the Curtis Center — were completed last year.

Since taking office in 2010, Mr. Fry has made “Culturally, people value authentic places, and it his mission use Drexyou can’t get more authentic than Philadelphia el’s power for in terms of history,” Mr. Levy said. “You have to good. go to Europe to get older.

But we haven’t just been a city that preserves everything; we’ve built new, we’ve integrated it with the old.”

I THINK WHERE Among the brisk develCENTER CITY IS opment shaping downtown, the Center City District MORE DEFINED BY continues to focus on the TRADITIONAL two most important facets PROFESSIONAL of any city: cleanliness and SERVICES FIRMS, safety. And the cornerstone WE’RE GOING TO to that mission is creating more parks and green spac- SEE UNIVERSITY CITY BECOME HOME es throughout Center City.

“The suburban promise TO AN INNOVATION is your own backyard and ECONOMY.’ great schools, playgrounds, fields,” Mr. Levy said. “We —JOHN FRY need three more Ritten- DREXEL UNIVERSITY house Squares. It’s part of a competitiveness strategy, but it’s more than just parks being nice and green.

They are part of reinforcing this as a live/work environment.”

After the success of Sister Cities Park in Logan Square, the Center City District has undertaken its most ambitious project to date: a $50 million renovation of Dilworth Plaza

Philadelphia: The Next Great Innovation City?

Philadelphia is a city with stellar universities that attract students from all over the world, but harnessing those intellectual assets has been a longstanding challenge for the city. But after years of battling the “brain drain,” it seems as though the tides are finally turning in Philadelphia’s favor.

Over the last 10 years, Philadelphia has added more than 16,000 people between the ages of 25 to 34 with a college degree or higher — all within three miles of Center City. That number is especially positive since it beats Washington, Atlanta, Seattle, San Francisco and Chicago. Though Boston and New York City have managed to average a higher retention rate for graduates, Philadelphia has finally been able to lay the groundwork for an innovation Venture investor Josh Kopelman economy with the Navy Yard as is bringing First Round Capital its centerpiece. into the city.

“This area was lifeless and look at it now — it’s really special,” Dave Ziel, chief development officer of Urban Outfitters, Inc., told CNN in June. “The isolation is what gives it the opportunity itself.”

A U.S. Department of Energy grant allowed a $30 million full-spectrum retrofit of Building 661 at the Navy Yard in South Philadelphia. It will be the new headquarters of the Energy Innovation Hub for Energy-Efficient Buildings (EEE Hub) — one of only three such hubs in the entire country. Another promising sign comes from the U.S. Economic Development Administration. Its Innovation Index ranks Greater Philadelphia as the third highest for innovation capacity among the ten largest metros in the nation (Boston and Washington, DC took the top two spots, respectively).

Because research institutions have proven to be an invaluable economic resource, and Philadelphia has more than its fair share, there is a momentum building from the Navy Yard to University City. With Center City as its engine, the innovation economy in Philadelphia is surging forward. And the movement is continuing with First Round Capital, led by leading venture investor Josh Kopelman, moving its headquarters to Philadelphia.

“The arrival of Josh Kopelman in Philadelphia is a game changer,” said Mayor Michael Nutter. “When one of America’s leading entrepreneurs and investors sees Philly as a place of ideas and innovation, a place where those ideas can be transformed into successful businesses and jobs, and feels the need to be part of it, he sends an incredibly powerful message about what is going on in our city.”

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As a tax-exempt organization, Drexel is responsible for giving back to the community, he said, adding he is inspired by the limitless possibilities that University City possesses.

“I believe in the service dimension of our mission,” he said. “We do education, we do research, but when we think about what service means, that’s where we can tie our mission directly to the growth and development of the city.”

Mr. Fry led Penn’s neighborhood revitalization 10 years ago, and he is taking the same initiative with Drexel. There are currently $300 million in development projects underway, including a $97 million student-housing and retaildevelopment plan along Chestnut Street.

Drexel’s dedication to growth is clearly good for the university, but it also means good business for Philadelphia.

“We try to think very carefully about how we include as many different Philadelphia-based or regional companies in the work that we do,” Mr. Fry said. “In some cases, maybe there isn’t the expertise. But in many cases, there is.

And we’re trying to become much more intentional about our spin, and how our spin not only allows us to achieve our work, but also allows us to enhance existing businesses.”

As a leader of an established educational institution, Mr. Fry understands the importance of a quality school system in strengthening a city. It’s an issue many are focused on, and he is no exception.

But despite the school district’s precarious situation, Mr. Fry sees hope.

“And I think we have a very difficult situation here,” he said. “The good news is we have a lot really talented people, like those on the School Reform Commission, producing good results. People are giving it their all. There are some good stories out there. The bad news is this has been allowed to deteriorate for a long time, and it’s not an easy thing to turn around.”

The long-term dedication universities have to bettering their neighborhoods is a powerful tool for any city, and Drexel is contributing to Philadelphia in a way many businesses aren’t capable of doing.

“We’re very focused on what we’re doing in the next year, the next five years, but we put as much attention and time into what happens 10 to 25 years from now,” he said. “We can afford to do that because we’re longstanding institutions.

Mine has been around for 120 years. To achieve the kind of things we want to achieve, we have to think in many cases in terms of decades. That gives you the

phia. Many have wondered if West Philly is going to become the next Center City, but Mr. Fry sees the two as separate personalities that don’t compete, but complement.

“I think where Center City is more defined by traditional professional services firms, we’re going to see University City become home to an innovation economy,” Mr. Fry said. “Our calling card will be more about innovation, and building new companies and partnerships between existing companies.”

For Mr. Fry, the key to transforming University City into a powerful innovation economy lies in its location.

“We have this wonderful opportunity to develop the area around 30th Street Station, and it’s like a blank canvas right now,” he said. “Our aspiration is to put the beginnings of this innovation neighborhood into place there, which would be not only universities and healthcare organizations, residential and retail companies, but also homes for companies.”

It seems that all eyes will be on University City as Philadelphia pushes forward through this challenging economy, and Drexel is more than up to the task.

“We’re full of confidence about what can happen in the future,” Mr. Fry said.

“Not only on our traditional campus, but on this great, new campus that we can build as our innovation neighborhood.

Surrounding what is the second busiest rail station in the United States — an innovation neighborhood right next to a transportation hub — that will serve all of Philadelphia, not just Drexel.”

Jane Golden FOUNDER OF THE MURAL ARTS PROGRAM

“One of Philadelphia’s best kept secrets has been its cultural assets,” Jane Golden, founder of the Mural Arts Program said.

“But over the last four years, there has “One of Philadelphia’s best kept secrets has been its cultural assets,” Jane Golden, founder of the Mural been unprecedented growth.”

Arts Program said. “But over the last four years, there has been unprecedented growth.”

There’s no question that Philadelphia’s opportunity to be a bit bolder, more spawned the ideas that have spawned creative sector has been a powerhouse strategic. And also to build a case over new businesses,” Mr. Fry said. “That’s for the local economy. According to time with investors and builders that can something in Philadelphia that we Arts, Culture, & Economic Prosperity in result in some really exciting possibili- haven’t had a level of success that we’re Greater Philadelphia, the city’s cultural capable of. It’s certainly not because we organizations and their audiences spend ties.”

But it’s not just about fostering talent; don’t have the academic assets, because $1.3 billion annually. It’s also generated it’s also about keeping that talent in the we have an abundance. We just haven’t 40,000 jobs and returned $158 million city. Philadelphia has long suffered from had a proper focus on that continuum of in taxes to state and local communities.

“People are drawn to Philadelphia,” a “brain drain” despite its top-notch edu- responsibility from the inception of good cational institutions, and it affects more research all the way through to commer- Ms. Golden said. “They’re coming to the orchestra, the opera, the ballet. And than just existing businesses. cialization.”

“If you take a look at the success of To be able to harness that intellectual they’re not just coming to see the big places like Cambridge and Silicon Valley, property would mean a new world for institutions; they’re also coming to see what’s happened is the universities have University City, and in turn, Philadel- the smaller and mid-sized organizations

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Cost of Development a Persistent Problem Development in Philadelphia has been a complicated issue for the city, its leaders and business owners. The battle between union vs. nonunion, high business taxes, and old-fashioned views about how the city should progress has resulted in a less than favorable building environment.

According to the Center City District, if Philadelphia brought its share of regional office space in line with other major northeastern cities, downtown would add 4.5 million square feet of new space and 27,000 office jobs. And adding a mere 500,000 square feet of new office space would result in at least $12.5 million in wage and real estaterelated taxes to the municipal budget.

There’s no question that development equals growth, so why isn’t Philadelphia doing more to encourage it?

Philadelphia currently leads the region in business taxes with a 19 percent take, and the result is office rents far below the level required to support new development. The killing of the American Commerce Center also set the tone for development in Philadelphia — meaning the sky is not the limit. It was a long-shot proposal to begin with, but it also garnered an unprecedented amount of excitement in the city. Finally, something big and bold was coming to Philadelphia, and

struggling contractors and construction workers would be back in business.

But that is now a faded memory, and the real estate at 1800 Arch Street has been left in limbo.

In an interview with the Metro in April, Philadelphia developers complained about the lack of government money that is necessary to get many projects off the ground. Alan Domb, luxury condo developer extraordinaire, said that “if jobs were subsidized then real estate development would not have to be.” Joseph Zuritsky is building an extended stay hotel near the Convention Center and pointed out, “With construction costs in the city of the Philadelphia as high as they are, we needed six state subsidies to make the project a go.”

Bart Blatstein, the president and CEO of Tower Investments who wants to turn the old Inquirer-Daily News building into a casino, insisted “construction costs need to be subject to the free market.”

There has been more than $12.3 billion in recent development in Center City and University City since 2007, and developers are refocusing on the Delaware River waterfront for two new projects. One is a plan for a 164-unit apartment complex on Piers 34 and 35 on Columbus Boulevard, and the

as well. We had close to 20,000 people come on mural tours last year. That’s important for the economic life of the City of Philadelphia.”

The addition of the Barnes Foundation to Center City will only contribute to the success of Philadelphia’s creative economy, but it comes down to more than just money. Ms. Golden looks at the two greatest challenges she feels Philadelphia is facing right now — public education and public safety — and sees arts and culture as a major catalyst for change.

“Over the past six months, I feel that there has been progress with public education,” she said. “There is a sense of optimism that did not exist for a while. Philadelphia still has a lower crime rate than many years ago, however any violent crime is unacceptable. The mayor, Commissioner [Charles] Ramsey and Edward Gillison are all so open to innovative solutions because we all can agree that sometimes just using traditional means doesn’t make enough of an impact. There is an openness to explore different solutions, and I’m heartened by that.”

Ms. Golden believes the Mural Art Program has the

other is a more ambitious proposal for 1,458 rental units and retail space on 5.3 acres at Delaware Avenue and Callowhill Street. Unfortunately, the Philadelphia Planning Commission doesn’t seem to share the developers’ enthusiasm.

On a promising note, a new (and some would argue improved) zoning code in Philadelphia will be revolutionizing development in the city. Everyone from developers to homeowners will be affected.

Changes include a new code language that would reduce the number of zoning classifications, incorporate a civic design review process, and integrate the community into the zoning approval process.

“The new code will make it easier for developers to get projects moving and create jobs, and it will provide a real path for citizens to become involved in the growth of their neighborhoods,” Mayor Michael Nutter said. “This is an historic achievement, and the credit belongs to the many ordinary citizens and neighborhood groups who worked with us to produce a code that will stand the test of time.”

opportunity to make a substantial difference in the community — a way to unite all Philadelphians.

“We’re working in prisons, we’re working in shelters, we’re in schools,” she said. “We believe all citizens deserve to have art in their life, so we’re doing everything we can to make that happen. In the end, art is sometimes what connects us all to being human, and it’s also a wonderful reflection of who we are as citizens. I love that you can drive into any neighborhood in the city and see outdoor murals that reflect people’s lives, stories, struggles, histories, aspirations, and triumphs. And that’s just the murals.”

Ms. Golden’s passion for Philadelphia is contagious, and it all goes back to its people.

“Philadelphia has a certain spunk, a scrappiness that is all its own,” Ms. Golden said. “When I came here from LA and started meeting block captains and community leaders, I couldn’t believe it. I was overwhelmed by the amount of passion and dedication that people had for their neighborhood and city.

It was unlike anything I had ever experienced. I also thought that people were not just passionate, but fear-

THE NEW [ZONING] CODE WILL MAKE IT EASIER FOR DEVELOPERS TO GET PROJECTS MOVING AND CREATE JOBS.’ —MAYOR MICHAEL NUTTER

less. When you’re fearless, that means you’ll embrace change and innovation and really look at the importance of tapping into the imagination. All of those things make Philadelphia a truly unique city.”

While there’s no denying that the arts and culture scene in Philadelphia is thriving, it’s not merely a self-contained trend. It can be a kickstarter for other sectors of the local economy.

“I think a city that is culturally rich is a healthier city,” Ms. Golden said. “I also think it’s a safer city. It’s cumulative because success breeds success. So there’s a wonderful sense of momentum and excitement about the art scene, and that’s like a self-fulfilling prophecy. The more our creative sector is acknowledged and supported, the more it thrives, and the more Philadelphia thrives.”

As for what the future holds, Ms. Golden predicts even more positive change for the city thanks to the creative economy.

“I really think the sky is the limit,” she said. “Philadelphia is unique in its vision. It’s between New York and Washington. It’s affordable. It’s a city that embraces

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creativity, and so I feel that over the next few years, the growth we’ve seen is just going to keep happening.

I find it hugely exciting.”

Arts & Culture: Philadelphia’s Economic Savior The power of Philadelphia’s creative economy has been a source of optimism and inspiration during an otherwise bleak economy. Travel + Leisure voted Philadelphia the No. 1 city in the nation for culture, and National Geographic Traveler declared it “the Next Great City.” With such a strong buzz, many are looking at the cultural sector to usher in a new era.

Philadelphia is not just a city with culture, but one that lives and breathes it. According to Arts, Culture, & Economic Prosperity in Greater Philadelphia, residents are strong supporters of — and enthusiastic participants in — the creative economy. Philadelphians’ attendance is 10 percent higher than the national average, and nearly 83 percent of regional residents attended an arts and cultural event last year.

“When you look at the artistic and cultural institutions around Philadelphia, what you really see is the autobiography of the city,” said Ms. Golden. “And that is so wonderful and rich, and such an indication of the spirit of Philadelphia. People are drawn to our city because of that.”

The new Barnes Foundation is the crown jewel in Philadelphia’s arts and culture scene. Some were concerned that the move would destroy the integrity of Albert C. Barnes’ artistic vision, and there was even a documentary called The Art of the Steal that detailed the controversial decision to break his will and relocate the collection from Lower Merion to Philadelphia. But after a painstaking process, the Barnes Foundation has found a new and successful home adjacent to the Philadelphia Art Museum. Barnes President Derek Gillman said more people have visited the collection in its first two months (67,435 to be exact) on the Benjamin Franklin Parkway than it did in all of 2009 in Lower Merion.

While there are a multitude of cultural heavyweights playing alongside the Art Museum and the Barnes, such as the Rodin Museum, Kimmel Center, Franklin Institute, National Constitution Center, and Independence Visitor Center, other smaller institutions have also stepped up to the plate. First Person Arts, Bowerbird, Underground Arts and PhilaMOCA are just a few of the up-and-coming names transforming the city’s arts and culture scene and attracting a new generation of followers.

This all translates to big bucks and even bigger hopes for Philadelphia. With more than 200 arts and cultural institutions generating revenue of more than $1 billion a year, it appears a world-class Philadelphia may be born directly from its unstoppable creative economy.

Janet Milkman

EXECUTIVE DIRECTOR, DELAWARE VALLEY GREEN BUILDING COUNCIL

“The more green building you have, the healthier your city is,” Janet Milkman, executive director of the

auto-unfriendly design, but that same design has now helped the city better adapt to a sustainable lifestyle.

And that is only one of its advantages.

YOU CAN LIVE IN THE CITY, “I think we have a really great combination of urban BUT REALLY KNOW YOUR grit and livability,” Ms. Milkman said. “We are an NEIGHBORS AND FEEL LIKE YOU’RE intensely urban city with lots of great cultural instituPART OF A COMMUNITY. I HAVEN’T tions running the full spectrum, from underground graffiti to the Barnes Foundation on the Parkway. We SEEN A CITY THAT DOES THAT AS also have these wonderful neighborhoods that are WELL AS PHILADELPHIA.’ almost the scale of a small town. You can live in the —JANET MILKMAN city, but really know your neighbors and feel like you’re part of a community. I haven’t seen a city that does that as well as Philadelphia.”

The condition of the school district is a huge concern for everyone in Philadelphia, including Ms. Milkman, which also ties back to another major issue for the city — an extremely high poverty rate.

“We have incredible income inequality,” Ms. Milkman said. “We, like many other large cities, have not figured out how to build a good education system in a city where so many people are poor and don’t have enough to eat. But no major city has figured that out either.”

That is where Ms. Milkman hopes the Green Schools program comes into play.

“The goal is to have every child in a green school within a generation,” she said. “We think it’s the most important thing we can be working on because 20 percent of Americans go to school everyday. Either to learn or work, so that’s a single place where so many of us go everyday. And it’s a place where we can help our kids not only have a better learning environment, but also become the green builders of the future.”

In addition to greening the city, the DVGBC is also focused on promoting Philadelphia and attracting new businesses. The annual Greenbuild event, the world’s largest conference and expo dedicated to green building, will be held in Philadelphia next year. It will feature three days of speakers, networking opportunities, industry showcases, LEED workshops and tours of the city’s green buildings.

“We’re going to have 30,000 or more green building practitioners in our city, and it’s an opportunity to give Philadelphia a brand that we don’t really have,” Ms. Milkman said. “When you go to NYC there’s a brand, when you go to Chicago there’s a brand, when you go to San Francisco there’s a brand. But when you come Delaware Valley Green Building Council, said.

In his January 2008 inaugural address, Mayor Nut- to Philadelphia, we don’t really have one. So it’s an ter pledged to make Philadelphia the greenest city in opportunity for us is to leverage the incredible susthe nation. Ms. Milkman has been helping him do just tainability efforts that are already going on, the better that, spearheading the DVGBC’s Green Schools cam- stories that haven’t been told, and help promote them paign, as well as the Coalition for an Energy Efficient and Philadelphia.”

Ms. Milkman also praised Mayor Nutter for his dediPhiladelphia and Utility Benchmarking initiatives.

“It’s a combination of indoor and outdoor elements cation to green building efforts. that make people more productive at work, kids more “He’s saying Philadelphia is going to be the greenproductive at school, and provide healthier places to est city in the world, and he’s taking steps everyday live,” she said. “Green building live/work spaces just to make it happen,” she said. “And I think the more support our city in so many ways that are almost people who hear it, the more they start talking about it, unquantifiable.” and the more they see it — whether it’s a bike lane or a Philadelphia is a city that lends itself well to green green roof on a bus stop or a solar garbage can — we’re building. During the automobile boom in the 1950s, going to start to believe it.”

Philadelphia struggled to attract residents with its Freelance journalist Elissa Vallano lives in Philadelphia.

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32

Q&A

30 AUGUST 2012

REGIONSBUSINESS.COM

FRAN HELD’S

OUT OF THE BOX CHARITY

When it comes to people in need, she doesn’t ask questions, she just helps. What started with a supermarket cake headed for a dumpster in 1999 has turned into a bustling warehouse, a lot of phone calls and untold changed lives.

Technically, Fran Held is on the board of directors of Mitzvah Circle. More practically, she lives Mitzvah Circle (mitzvahcircle.org), a selfproclaimed “non-traditional” charity that serves people across the region.

What’s the elevator pitch for Mitzvah Circle?

There is no elevator pitch, really. We help those who aren’t helped by traditional organizations, people who don’t fit in the box of a traditional organization. We don’t turn anyone away.

You’re very active on both Twitter (@MitzvahCircle) and Facebook. What role does social media play in your efforts?

It’s a great way to reach out to people who need help and people who can help. It’s a great way to empower people who are struggling, because sometimes people have a problem reaching out and asking for help directly.

If you could get in front of a group of business executives, what would you tell them?

You can make a huge difference even if you only want to help out one time a year. In 10 minutes, your office could make 200 peanut butter and jelly sandwiches, and that could have a huge impact on a local community with little effort. We support days of service, and you’d be amazed how little effort it can take to make a difference. Sometimes it’s as simple as putting a bin in the lobby to collect things.

What’s your take on all the talk this election season about social services?

It doesn’t have any impact at all because it won’t change our mission. There will always be people in need, and there will always be people who are not at all plugged in. Just yesterday I helped a woman

who was living in her car. She was a former professional who had lost her job a number of years ago.

How did you secure warehouse space for your operation?

You have to ask questions. I knew people had warehouse space and don’t think they understood that they could help. So when someone asked, “how can I help?” I said, “I need a warehouse.” Everything we have is 100 percent donated.

Is there a meaning behind the name Mitzvah Circle?

Mitzvah can mean a commandment or good deed. And we like to think of it as a circle of kindness.

We all need to receive help and we all have the opportunity to give help. We wanted the name to reflect that. There’s no stigma in asking for help. And if you can’t ask, we’ll ask for you.

For more information, check out MitzvahCircle.org

30 AUGUST 2012

REGIONSBUSINESS.COM

FINE ESTATES PREVIEW

33

Condominium Boasts View of Washington Square

The arched entry to the formal dining room has beautiful faux-painted columns.

The chefâ&#x20AC;&#x2122;s kitchen features cherry cabinetry; granite countertops; under-counter and recessed lighting; center island with breakfast bar; and stainless steel GE Monogram gas range with electric oven and hood, Bosch dishwasher and Sub-Zero refrigerator with freezer drawer. dditional home features include oak floors in the 220 West Washington Square is a boutique luxury building with only one home per floor; each condominium comes with a spectacular view of Washington Square. The condominium comes with one parking space in a secure lot adjacent to the building and two storage spaces. The residence is 3720 square feet. Offered at $1,995,000. Offed by Allan Domb Real Estate, 215-545-1500

The large sun-soaked living room offers west- and south-facing windows.

living areas and carpet in the bedrooms, twelve foot ceilings and eight foot windows throughout, two Bose sound systems and a spacious laundry room.

E M O H ER V O C R U O

Gwynedd Valley

Classic estate with old world craftsmanship and elegant surroundings - this Michael Visich designed home on 2.76 private acres is intended for full-scale entertaining and comfortable living. Unique architectural design delights you at every turn. Sumptuous bedroom suites on the 2nd and 3rd levels. Walkout basement w/home theatre, gym, sauna, fully appointed bar, playroom and walk-in Wine Cellar.

Carriage home completes the package. Price upon request. Call Linda 215-205-0181.

Huntingdon Valley

This truly luxurious estate is an invitation to distinctive living. Situated on 2.33 acres this 6 yr young home features 3 stories that include 5 bedrms, 7 full and 2 half baths, a first floor master suite, solid mahogany doors, and a mahogany elevator to all levels. Chef 's alike will appreciate the state-of-the-art kitchen, palatial dining room and a caters kitchen. Picture leisure after-noons in the separate spa/solarium room or party in the lower level custom bar or movie theatre. Price upon request. Call Linda 215-205-0181.

Linda Gedney Direct: 215-205-0181 Office: 215-542-2200 www.GedneyGroup.com Linda@GedneyGroup.com

EastSide,West Side,We’reAllAroundTheTown

East side condos: Pier 3, Pier 5, 22 Front, Society Hill Towers, The Bank Building,The Lippincott at Locust Walk,Independence Place, Hopkinson House, 220 W. Washington Square, Center City One.

West side condos: Academy House, The Rittenhouse Savoy, The Lanesborough,The Warwick, Parc Rittenhouse,The Barclay, The Dorchester, 250 S.18th Street,1820 Rittenhouse Square, 1830 Rittenhouse Square,1900 Rittenhouse Square, 220 W. Rittenhouse Square, The Rittenhouse, Rittenhouse Plaza, Wanamaker House, 250 S.17th Street, The Philadelphian.

The Bank Building: Brand new 2 bedroom plus den, 2.5 bath condo with high-end contemporary kitchen and baths, custom finishes throughout. 2025 square feet. $1,100,000.

220 West Washington Square: Entire floor home with 360 degree views including a Washington Square vista, amazing entertaining space, no detail has been left undone. 3720 square feet. $1,995,000

Society Hill Towers: Completely renovated and furnished corner one bedroom with dramatic city views, chef’s kitchen and designer bathroom. 803 square feet. $379,900.

The Barclay: 3 bedroom, 3.5 bath showplace, marble foyer, open living space, chef’s kitchen, high end appointments throughout. 3293 square feet. $2,900,000.

The Warwick: 3 bedrooms, 3 baths, 270 degree city views, open kitchen, lots of entertaining space, marble bathrooms. 2000 square feet. $1,050,000.

Parc Rittenhouse: Brand new 3 bedroom, 3 bathroom condominium with all rooms overlooking Rittenhouse Square, lavish finishes throughout. 1709 square feet. $1,475,000.

AllanDombRealEstate

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WRIGHTSTOWN TOWNSHIP Custom home on 2.6 acres ~ Over 5,000 square feet of luxury living space ~ Amazing finished lower level ~ 3 car attached and 5 car detached garages~ $725,000

UPPER MAKEFIELD TOWNSHIP Exceptional 5 yr young custom home with superb details & amenities ~ 5 bedrooms & 5.1 baths ~ Custom cabinetry and tile work, arched entries, Lyptus hardwoods, lavish master suite, finished walkout basement & more ~ $1,500,000

WARWICK TOWNSHIP Car enthusiasts and hobbyists must see!

Two homes and outbuildings for the price of one!

Historic stone home plus Carriage/Tenant house ~ Beautiful Bank Barn ~ Corn Crib ~ 2.11 acres ~ $539,900

Belamour

NEW CUSTOM CONSTRUCTION UPPER MAKEFIELD TOWNSHIP, PA 29 beautiful home sites (10 magnificent lots still to choose from) 1-2.5 acres Just 3 miles from I95 Pisani Builders Associates, Inc.

DOYLESTOWN TOWNSHIP New custom construction by Michael J Sullivan, Inc. ~ PERMITS ISSUED ~ BUILDING HAS BEGUN 1.25 acre lot ~ 3,400 square feett ~ 3 1/2 bath ~ 3 car garage.

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30 AUGUST 2012

REGIONSBUSINESS.COM

IDEAS

41

C-level Executives: Use Social Media Savvy to Create New Opportunities

Dave McGurgan is a social media strategist and web content manager based in Wilmington, DE. His online business card can be found at davemcgurgan.com.

At this very moment, thousands of people are talking about thousands of organizations and their brands. These individuals do not need, nor seek, permission to do so. They expect brands will engage them. The control over brand discussions and messaging no longer belongs to an organization.

Customers now take ownership in brands.

Individuals freely profess brand loyalty over networks on which their voice is easily amplified and, should dissatisfaction arise, these individuals are also ready to share negative sentiment. Today’s consumer has a seat in the executive boardroom.

Half of the world’s population is on Facebook and more than a third use Twitter, yet CEOs are reluctant to jump into the social media space. In a 2012 study by IBM of more than 1,700 CEOs, only 16 percent were active on social media. In five years, the IBM analysis suggests that 57 percent of CEOs will use social media. By 2017, four of every 10 CEOs will continue to sit on the sidelines, benched by their own ignorance.

CEOs stand to gain by tuning into the channels where their strongest brand advocates are broadcasting. According to Ann Charles, CEO of BRANDfog, the correlation between social media activity, purchase intent and brand loyalty is significant. In the report, “CEO, Social Media & Leadership Survey,” Charles says, “50 percent of consumers stated they were more likely to purchase from a company and recommend a brand to others after following

the company’s tweets.”

Those social media-savvy CEOs are also more likely to be seen as better leaders according to Charles, who says, “C-Suite executives who engage in social media are better equipped to lead a company, communicate values and shape a company’s reputation in today’s changing world.”

The paradigm shift has occurred. Social media has become mainstream. It’s past time that CEOs get involved.

The CEO/social media inertia creates huge opportunities for those more agile executives and adept companies to use social networks as tools that generate more leads, convert more sales, and delight customers.

Companies that haven’t made efforts to increase transparency and become more nimble as organizations face the prospect of losing touch with their constituency and outpaced by their competitors who leveraging social media.

For those CEOs who have embraced social media, congratulations! You’re directly connected to a pipeline with customers and staff and you’re well positioned to interact with influencers and be an influencer yourself in the social media space. For those CEOs who remain undecided on committing, remember the catch-up game is a hard one to win.

Top Five Social Media Tips For CEOs Listen: Before you jump into the social media conversation, you must listen. Observe how people are talking about your organiza-

tion and how your organizations responds.

Monitor your competitors on social media.

See who is broadcasting one-way messages and who is actually participating in the conversation. Then emulate the latter.

Follow: Start following your favorite brands on social media and learn how they engage and interact with customers. For example, check out how Nabisco has transformed Oreo into an social network superstar that generates excitement and passion among more than 27.5 million fans on Facebook. All for a cookie.

Learn: The beauty of social networks is the ease in which information and knowledge can be disseminated and consumed. Check out Zappos CEO Tony Hsieh @zappos and his book “Delivering Happiness.” Social media helped him build Zappos revenue from almost no sales to over $1 billion in gross merchandise sales annually.

Two-way conversation: Companies and professionals who use social media solely as a platform to get their message out simply don’t get it. Incessant marketing messages get tuned out on social media. Treat customers with dignity and respect.

Be genuine: Social media allows organizations to humanize their brand. In turn, CEOs can position themselves as leaders of companies that aren’t afraid to engage their customers in the social space. Customers are waiting to be your company’s brand advocate.

Don’t let them down.

Because Capitalism Works.

to subscribe, call 877.700.6245 or 215.627.6397

42

30 AUGUST 2012

REGIONSBUSINESS.COM

CHAMBER REPORTS

GREATER PHILADELPHIA CHAMBER

Official: Private Sector Should Be City’s Priority Darrell L. Clarke, Philadelphia City Council president, recently addressed the Greater Philadelphia Chamber of Commerce about his first session as president and his goals for the next year.

Mr. Clarke applauded the sitting council for its energy, diversity and productivity, citing cooperation with key players in Harrisburg as a major success.

“It showed in some of the legislation we were able to get out of Harrisburg to support our budget plan,” he said.

Job creation and revenue generation are main

goals for the coming year.

Mr. Clarke said a thriving private sector “should be the number one responsibility of the government in the city of Philadelphia.”

With approximately 30 percent of Philadelphia’s land base exempt from property tax, a heavy burden falls on business owners. Mr. Clarke said he hopes to foster a more business-friendly environment by increasing flexibility in Philadelphia’s tax codes.

Additional public policy news from the GPCC can be found at relayphilly.com.

ITALY-AMERICA CHAMBER

MAIN LINE CHAMBER

‘Make More Save More’ Branding Event Planned

(R. KENNEDY FOR GPTMC)

The Main Line Chamber of Commerce will begin the quarter with a branding event as part of their “Make More Save More” series on September 7 at the Philadelphia Marriott West.

The event, “Beyond Personal Branding: Business-Boosting Strategies,” will begin with introductory remarks from Nick Sakiewicz, founder of the Philadelphia Union and PPL Park, and will be followed by a presentation from personal branding expert Martin McLaughlin.

Those interested in registering should visit www.mainlinebusiness.us.

Trade Mission to Rome Set The Italy-America Chamber of Commerce of Greater Philadelphia has opened registration for a weeklong trade mission to Rome this November.

The goal is to foster relationships between Italy and the Greater Philadelphia area in life sciences, tourism and small business sectors.

Located in the center of the Balkans, Mediterranean and Western European markets, Italy is ranked second in Europe in manufacturing companies and boasts the EU’s fourth-largest economy.

For a $350 fee, mission participants will spend seven days learning about a variety of business models and investment opportunities. They will also have the chance to network regional government agencies and prospective business partners.

Those interested in participating should email info@iaccgp.org or call (215) 7903673 before September 30.

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30 AUGUST 2012

REGIONSBUSINESS.COM

OPINION

Penn State Alums Reflect, Look Ahead The message of the O’Brien Era We Are ... all responsible for is simple: Time to move forward making this comeback happen Penn State has 645,693 None of that has graduates. That’s second changed. in America, behind only Then there’s football. the University of Illinois.

That has changed.

We all can’t be bad.

Beyond the sanctions In fact, very few of us and the Sandusky trial are. and the Paterno saga, In one way or another, Penn State – and espeI am like almost every cially Penn State football other graduate of Penn — will be changed forState – as well as its curever. However, I know this be true: rent 96,000 students and Penn State football 12,000 faculty and staff Mike Poorman is a senior players have always members system-wide. lecturer and director of alumni been “real” students, I am an alumnus (Class relations for Penn State’s and I would expect they of 1982), former sports College of Communications. will continue to be so. editor of The Daily ColI had undergraduate legian, a donor, a former volunteer member of two Penn State classes with All-Americans and guys alumni boards, a current faculty mem- who sat the bench. I have taught stars ber, a PSU staff member working with and third-stringers. They are like all alumni relations, faculty adviser to two Penn State students – mostly good and student groups, and a guy who has writ- conscientious, occasionally hung over, ten about Penn State football since 1979. sometimes lazy.

Actually, across the board, as stuI’m a Penn Stater.

That’s been tough for some people to dents I have found varsity athletes at say – or to wear on their sleeve or sweat- Penn Stater to be harder-working (not smarter), more engaged in shirt or hat -- over the past the classroom (not always nine months. We’ve been correct in their answers) taking a pounding. and more consciousness There’s a number of reaSURE, THERE’S A about not missing class sons for that, and very few are the making of most of CULTURE AT PENN (although with a higher STATE. A GOOD propensity to wear sweats) those 645,693 people. than the average kid.

Sure, there’s a culture at ONE, A SHARED I write columns about Penn State. A good one, a ONE, WITH Penn State football for shared one, with common COMMON ROOTS.’ StateCollege.com, so I’ve roots. Due in large part to had a front-row seat for the school’s solid lowerthe 237 days of the Bill and middle-class, small town and agrarian Pennsylvania roots O’Brien Era. He has nothing to hide.

His office door is always open, not that extend back to 1855, Penn State has always had a common person’s feel to it. only to players and staff, but to media It’s a culture of pride, hard work, and alumni as well. Many practices are excellence and yes, fun (although not open. He’s a big e-mailer and texter and cellphoner. His culture is an open one. recently).

In many ways, on behalf of those Penn State as a whole have very little to apologize for. Its students raise mil- 645,693 Penn Staters, he’s taking it on lions for children’s cancer, its research- his considerable chin for what transers invent artificial hearts and strategies pired before he arrived on campus. “I for halting global warming, its alumni get that,” he says. comprise the future of an aging ComSo do we.

“It’s time to move forward,” he adds. monwealth and its economic engine is And I certainly agree. the touchstone for the Keystone state.

entirely warranted.

I was brainwashed On Sept. 1 Beaver Stafrom an early age, as many loyal Nittany Lions dium will still be filling are. As a child, I trotted up nicely. The band will around tailgates with a still high-step out and homemade sign hung perform their famous over my neck that read: “Floating Lions” drill.

“9-year-old Penn State The players will be idenfan needs one ticket.” tified by name in addiOnce, a man even gave us tion to numbers, giving one for free. them more recognition What’s happened in and accountability. A the past nine months is 2010 Penn State graduate Jenna few noteworthy figures a classic tale of growing Ekdahl is a freelance journalist. will be absent from the up. Children often start sidelines, but there are out believing the people strong, confident men in in their lives are perfect, guiltless. Some- their place ready to take the hard work where along the road they’re struck by these boys have put into preseason and the reality that the world, their heroes enchant us again. Because, when all included, is flawed after all. Sometimes the pieces of Penn State football come it’s a slow onset, like butter melting in a together, isn’t it a mystical, magical, skillet, and sometimes it comes fast, like irreplaceable experience?

Maybe that’s what we’re all searching the floor dropping out from underneath for and maybe that’s what we’re trying you at the Tower of Terror.

Penn Staters are in the process of to protect.

The university has been tasked with moving past our initial disenchantment and learning how to live in the real the whopping responsibility of a comeworld, where legends are just men and back, and that isn’t going to be meathey too make mistakes. sured in touchdowns alone. It has to be I want my Dear Old State to once a combination of transparency and a again give us something honorable to continual record of choosing good over believe in. Like Shel Silverstein’s Giv- evil. By the way, everyone is watching.

But we have a part to play in this as ing Tree, the university must adapt and become what we need it to be: upstand- well. Penn Staters can’t let others’ pity ing, honest, unfathomably wholesome. or pessimism affect our team spirit. We The new leaders have to realize there’s can’t be united without the efforts of all.

Now, more than ever, I’m burstmore to damage control than public apologies and pink slips. ing with pride for this place I still call And what could be more uniting than home. If my opinion has changed, it’s the magnetic atmosphere of Penn State only become a deepened affection for football? what I know my school can accomplish.

Unity is being a part of the crowd’s Before, our program was revered, perroar, 110,000 strong. It’s knowing that haps undeservingly, but now we’re the wherever we travel, there’s probably underdog. We have so much fight left in another alumnus nearby who will hap- us and such a powerful capacity to prove pily answer our “We Are” battle cry. It’s ourselves.

I’m ready for the new roar. the steadfast confidence that Coach Paterno, our fearless and longtime JOIN THE CONVERSATION unblemished leader, instilled in us by simply rolling up his khakis and taking Share your thoughts the field each Saturday.

Perhaps we have relied on the hardy Region’s Business welcomes comments, muscles of tradition to hold us steady for letters and essays. Send them to too long, and that’s why some change is feedback@regionsbusiness.com.

30 AUGUST 2012

REGIONSBUSINESS.COM

OPINION

45

Time For Leadership to Set Penn State On The Right Track

T

he fallout from the Jerry Sandusky scandal continues to mount for Penn State. The civil suits are starting to make their way to the headlines and at least one insurance company is asking two courts to absolve it from financial responsibility well before the final financial totals have been tallied.

What happened has been painfully documented during Sandusky’s criminal trial. What led him to perpetrate the unspeakable deeds, we may never know.

What also remains somewhat clouded is how this behavior was allowed to continue in such a high-profile community for such an extended period. However, the root cause comes down to something that the university needed then and now needs to move forward: leadership.

On the football field, Penn State never lacked for leadership. Joe Paterno, flawed and tragic hero though he was exposed to be, provided on-the-field leadership for his teams, setting clear and rigid standards by which his studentathletes were to be measured.

That led to more leadership from the players themselves. The annals of Nittany Lion football are peppered with players who distinguished themselves through word and deed. In short, there was

an expectation of excellence that started at the top.

There appears to have been no such leadership from neither the board of trustees nor the school’s top administrators. That’s what Penn State needs to move forward.

To move forward, Penn State needs to look forward and do so with an unflinching focus on excellence and by setting an ethical standard that is both beyond reproach and woven into the very fabric of every facet of the university, athletics included.

It cannot suffer nonsense such as former President Graham Spanier’s lambasting the Freeh report in an apparent effort to clear his name. That does nothing to help Penn State, only bringing more unwelcome attention to the darkest moments in the university’s storied history.

Penn State needs to be forward thinking and aggressive in its efforts to restore its reputation.

It needs strong, bold leadership, leadership that will not accept compromise from excellence or firm ethical boundaries.

The gauntlet has been thrown down. It is up to the trustees and the administration to accept the challenge. And it is up to the alumni, other school supporters and all Pennsylvania taxpayers to hold them all accountable.

EDITORIAL BOARD CEO AND PUBLISHER | JAMES D. MCDONALD EDITORIAL DIRECTOR | KARL SMITH ASSOCIATE EDITOR | TERRENCE CASEY © COPYRIGHT 2012 INDEPENDENCE MEDIA 600 GERMANTOWN PIKE, SUITE 400 PLYMOUTH MEETING, PA 19462 610.940.1656 | WWW.REGIONSBUSINESS.COM

Philadelphia’s Unexpected Optimism Rooted in Realism On the flip side, I have Philadelphia has been my seen the deterioration of home on and off now for 10 many of the city’s neighyears. My mother was born borhoods - including my and raised in the city, and family’s. The crime and after graduating from Vilpoverty plaguing Philadellanova University, I stayed phia is a major issue, and in the area for another few I have nothing but respect years. Next came New York for those who are working and then Los Angeles, but I to make this city a better unexpectedly found myself place to live. It takes money back in Philly after being for these much-needed gone for almost five years. improvements, and in this Writing ‘Visions of a Freelance journalist Elissa economy, there isn’t much World-Class Philadelphia’ Vallano lives in the Philadelphia to go around. It’s clearly not was my way of getting reac- area. an easy road, but I see just quainted with the city. I learned what I had missed over the years, how many people are determined to ride it and how Philadelphia had evolved since out. It’s admirable and inspiring.

Everyone I spoke to for this series is I’d been gone. The 13th Street strip in Center City that I once called home is so differ- passionate about Philadelphia and motient - booming with amazing restaurants vated to make it better. They all see the city and shops. And after living in New York for what it is and what it can be. It was and Los Angeles - two of the most creative a perfect balance between realism and cities in the world - I was blown away by optimism that’s needed to bring about real the energy of the arts and culture scene. I change. No one was ignoring or downplaynow have a laundry list of all I want to do ing the problems, but they were all enthuand see in Philly and not nearly enough siastic about the future of the city.

It’s a contagious feeling. time to do it.

Region’s Business welcomes comments, letters and essays. Send them to feedback@ regionsbusiness.com. You can also reach Editorial Director Karl Smith at 610.940.1656.

46

30 AUGUST 2012

REGIONSBUSINESS.COM

BY THE NUMBERS

$170

The cost of a ticket, centerstage, first row beyond the orchestra to see “La Boheme” presented by The Philadelphia Opera Company September 30, found on their website earlier this week.

$7,000,000,000 Debt load of the Pennsylvania Turnpike Commission

88%

According to PennDOT, the percentage of Pennsylvanians who buckled up last year.

$150.85

The cost of a ticket for a west side upper deck to see the September 15 Navy at Penn State football game at Beaver Stadium, according to Ticketmaster earlier this week.

52%

The percentage of Pennsylvanians who either somewhat disapprove or strongly disapprove of the job done by Gov. Tom Corbett, according to The Pennsylvania Poll published by The Philadelphia Inquirer.

58%

The percentage of Americans who believe the rich should pay more taxes, according to a Pew Center poll.

28.6%

$30

The cost of a general admission ticket to see the October 12 Navy at Central Michigan football game at Kelly Shorts Stadium in Mount Pleasant, Michigan, according to the Navy athletics website.

$63.35

The cost of a standing-room-only ticket to see the Baltimore Ravens play the Philadelphia Eagles at Lincoln Financial Field on September 16.

$5

Typical minimum bet at a Las Vegas sports book.

The percentage of Pennsylvanians who are obese, according to an expert at the University of Pittsburgh.

$39.10

The cash toll to go from New Jersey to Ohio on the Pennsylvania Turnpike as of January 2013. That’s up from $14.70 in 2003, a 266-percent increase.

532

The length in miles of the road managed by the Pennsylvania Turnpike Commission.

$15,000,000 Donation from The William Penn Foundation to the Philadelphia School Partnership. That helped the two-year-old nonprofit get more than halfway to its goal of $100,000,000 to fund projects in Philadelphia schools, though not necessarily schools that are part of the School District of Philadelphia.

21%

According to a recent Harris Poll, the percentage of Americans with at least one tattoo, up from 14 percent in 2008.

19

Sen. Bob Casey’s lead over opponent Tom Smith in a recent poll by The Morning Call and Muhlenburg College.

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