Region's Business ­- 21 February 2013

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REGION’S BUSINESS

PHILADELPHIA EDITION

A journal of business and politics

GROWTH PLANNED AFTER 2012’s HOTEL

ROOM BOOM Center City’s 2012 occupancy rates were sky high and several new hotels will open in 2013.

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21 FEBRUARY 2013

REGIONSBUSINESS.COM

CONTENTS

3 1519 Walnut Street

Philadelphia’s Room Boom

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2012 was a great year for hotel occupancy in Center City and, with more hotel openings planned for 2013, there’s plenty of room for growth.

23

Art Scene Helps Drive Occupancy The city’s robust collection of museums helps drive tourism dollars into the region.

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Hiring Foreign Nationals Is Good For Business With all the rhetoric over immigration, it often gets lost that hiring foreign nationals is good for business and good for the country.

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2013: YEAR OF THE INNOVATOR

28

Budget: Who Lawmakers Stand Behind

The special interests will lobby state lawmakers hard to get more money, but taxpayers stand the most to lose.

18

Science Center Raises $1 million for ‘Clubhouse’ The University City Science center has raised more than $1 million for Quorum, the entrepreneurs’ clubhouse, and surpassed its Open The Doors campaign goal.

in 16 ‘Happening’ Brooklyn

A Bucks County-based startup takes its media muscle to Brooklyn while simultaneously running its wildly popular “Happening List” promotion in Philadelphia.

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Although they are arguing about the details, both President Obama and the Republican Congress have committed to another $1.5 trillion of deficit reduction over the next decade, just about guaranteeing a prolonged period of high unemployment, an under-performing economy, and flat or declining wages for most working people.”

ROBERT KUTTNER ON HUFFINGTONPOST.COM

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1900 Arch Street

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PRESIDENT AND PUBLISHER James D. McDonald

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EDITORIAL DIRECTOR Karl M. Smith

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ASSOCIATE EDITOR Terrence Casey CONTENT EDITOR Alexis Sachdev CONTRIBUTORS Brandon Baker, Chris Weeden, Don Lee,

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

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21 february 2013

Regionsbusiness.com

editor’s desk

Minimum Wage Debate, From the Middle

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

You can contact him at ksmith@regionsbusiness.com.

Once the furor over Sen. Marco Rubino’s post-State of the Union thirst subsided, my inbox saw a steady flow of press releases about the president’s proposal to increase the federal minimum wage.

I wasn’t moved on the subject until I saw a tweet from Arianna Huffington. More specifically, a response to her tweet.

Ms. Huffington quoted President Obama’s speech – “no one who works full-time should have to live in poverty” – and someone retweeted it, adding, “Pay the people who work for you.”

The retweet referenced how Ms. Huffington built her immense Huffington Post empire largely on the backs of unpaid bloggers. As someone who views most political discussions from the center, this crystallized the debate over the minimum wage.

Few people are going to argue that everyone should make more money. But the debate breaks down when it gets to imposing political will. The left says the government should force employers to pay more. The right says that’s government unfairly altering the free market.

You don’t have to look hard to see that wages have not kept pace with inflation over the decades. That’s bad in a lot of ways, in particular for businesses that depend on consumer spending to fuel profits. So why haven’t businesses plowed more profits (in an era of record-breaking profits) into increased salaries?

Liberals will immediately point to corporate greed and while that may be a factor, let’s put at least part of the blame on you and your 401(k).

Yes, you could be part of the problem.

Institutional investors like your typical mutual fund look for stocks that will generate good returns. And stocks that generate good returns are with companies that can hold the line on expenses while increasing revenue.

Of course, an inspection of most any company’s books will reveal that personnel costs are among the biggest line items. And with the cost of health insurance skyrocketing over the years, that means the only way to keep personnel costs under control has been controlling wages or reducing headcount. Those steps, of course, are what many companies have followed. If you mix

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in the fact that there’s so much competition that most industries have some sort of pricing war going on, you see the pressure increase.

Companies that pull those levers are typically rewarded for their fiscal prudence. The market is very much rewards-based and if a company is rewarded for something, whether through increased profits, higher stock prices or more customers, they are going to keep repeating the action that produces those results.

As long as the market rewards business for containing personnel costs, there’s no reason to expect a dramatic increase in wages. Honestly, why should Ms. Huffington pay for something she gets for free? AOL didn’t (over)pay for the company because it’s costs were too high, it bought it because expenses were under control.

In a nutshell, the best road to increased wages is a strong and growing economy. As we’ve seen over the past six years or so, the government appears incapable of helping to make that happen. And as long as you expect your 401(k) to increase in value, don’t expect Corporate America to support a higher minimum wage.

21 February 2013

Regionsbusiness.com

Education

Revised School Closures Plan Spares 10, Adds 2 Philadelphia School District Superintendent William Hite released a new list of proposed school closures Tuesday that spares 10 schools from the original list but adds two new schools.

An original list recommended closing 37 Philadelphia public schools, and nearly 40 alternative plans were sent to Superintendent Hite’s office in response.

The School Reform Commission is planning on voting on the recommendations next month.

Penn State Sex Abuse Scandal

Sandusky Scandal Cost PSU $27.6M Penn State University footed a $27.6-million bill that covered the costs of internal investigations, including the Freeh Report ($13.1 million), university legal services and defense ($7 million), and external investigations ($1.3 million), according to a recently released itemized report of funds allocated during the continuing fallout over Jerry Sandusky.

These figures don’t include the $60-million fine the NCAA imposed as part of its sanctions.

Higher Education

Dance Marathon Raises $12.37M Pennsylvania State University’s annual student-run dance marathon — the Penn State IFC/Panhellenic Dance Marathon — came to a close on Sunday, having raised a record-breaking $12.37 million, up from last year’s record-breaking $10.68 million.

“Thon” kicked off Friday at University Park, and more than 700 dancers danced the weekend away, raising money for the Four Diamonds Fund at Penn State Hershey, which distributes funds to help children with cancer.

Weekly briefing

Just How Much Will You Owe Under New Tax Assessment?

By Sandy Smith Now that the city has finally told property owners how much their land and buildings are really worth, everyone can get around to answering the real question: So how much will I owe?

That the reassessment will produce clear winners and losers has long been understood.

An analysis of tax bills in The Philadelphia Inquirer shows that residents of a few neighborhoods, mostly on Center City’s southern fringe, will see large increases in their property taxes now that property values are accurate citywide.

But most city residents won’t see such large increases, and many will see their taxes fall, though by only modest amounts.

All this is a perhaps painful but necessary corollary to the effort to update property assessments citywide to reflect actual market values.

But that, we’re sure, doesn’t matter as much to you as what will happen to your own tax bill.

The City of Philadelphia has released an AVI Calculator (avicalculator. phila.gov) that lets you see what will happen.

Enter your address, and the calculator displays the old and new assessed values.

The tools on the right side let you see your tax bill under several different scenarios — with and without homestead exemptions and at varying tax rates. (The actual tax

5

By The Numbers

37

Recommended number of school closures under the original recommendation by Philadelphia School District Superintendent William Hite

38

Alternative plans submitted to Superintendent Hite’s office after the initial recommendation

29

Recommended number of school closures under the new recommendation Doug Kerr

For decades, the property tax system in Philadelphia has unfairly undervalued and over-assessed properties across the City.” —Mayor Michael Nutter rate will be set by City Council later this spring.

The process is supposed to be revenue neutral — that is, the total revenue raised under the 2014 rate will be no different than that raised in 2013.)

If you believe your property has not been accurately assessed, the city has an appeal process that you can pursue.

If the only beef you have is with the size of your new tax bill, your options are to voice your concerns to your City Council member or to Mayor Michael Nutter.

This column originally appeared at philadelphiarealestate.com.

By The Numbers

$580,000 Previous value of 2036 Delancey Place

$16,572

$27.6M

Amount spent by Penn State so far on the fallout from the Jerry Sandusky child sex abuse scandal

$13.1M

Amount spent by Penn State on the Freeh Report

$60M

Fine imposed by the NCAA on Penn State

$12.37M

2013 tax for 2036 Delancey Place

Record amount raised by Penn State students for the Four Diamonds Fund at the school’s annual dance marathon last weekend

$1.56M

700

New value of 2036 Delancey Place

Dancers who participated in the three-day marathon

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21 February 2013

Regionsbusiness.com

Weekly briefing

Liquor Control Board

PLCB Chairman Wants to Drop State Brands

Corbett Continues Fight After AG Nixes Lotto Deal

Pennsylvania Liquor Control Board Chairman Joseph Brion said the board is discussing whether to drop the controversial eight in-house brands of wine and spirits, the Pittsburgh TribuneReview reported.

“I do not believe the LCB needs its own label and should compete with the industry labels,” Mr. Brion told the Tribune-Review. “But that’s my opinion.”

Gaming

Navy Yard Looks To Nightlife In Development Vice President Will Agate of the Philadelphia Industrial Development Corporation said that in three to five years, he wants to convert some of the Navy Yard’s older buildings into apartments and repurpose others for restaurants, bars, and entertainment.

“One of the exciting components that do not exist presently is this residential component,” he said to CBS. PIDC is also currently accepting proposals for restaurants and bars for the Navy Yard.

Transportation

Lawmakers Ask FAA to Consider Pennsylvania for Air Traffic Control Site Pennsylvania’s senators and nine House members have asked Federal Aviation Administrator Michael Huerta to consider Pennsylvania as a possible air traffic control facility, PhillyBurbs.com reported.

No sites were named by the political delegation, but the PhillyBurbs.com report points out that the former Willow Grove Naval Air Station Joint Reserve Base would fulfill the requirements set by the FAA.

Pennsylvania Independent

By Alexis Sachdev New Pennsylvania Attorney General Kathleen Kane knocked down Gov. Tom Corbett’s push to privatize the Pennsylvania Lottery last Thursday, but the governor has not yet given up on his plan.

Attorney General Kane, the state’s first Democrat to hold the title, said the contract between the state and British firm Camelot Global Services failed to meet constitutional standards, Pennsylvania Independent reported.

The contract is “unlawfully infringing on the General Assembly’s power to make basic policy choices,” she said last week.

But Gov. Corbett is full steam ahead.

The $34 billion, 20-year contract that was set to expire February 16, stayed afloat after the administration persuaded Camelot to hold onto its bid.

The British firm has agreed to the terms negotiated over the weekend, and

My job is to protect Pennsylvania’s seniors, and we will continue to do that.’

—Gov. Tom Corbett

will keep its bid until Friday, the Associated Press reported.

“I don’t agree with the attorney general’s analysis and decision, and we will review our legal options,” Gov. Corbett said. “My job is to protect Pennsylvania’s seniors, and we will continue to do that.”

With the extension, the governor has bought time to strategize how to overcome the attorney general’s ruling.

Some speculate he will challenge her in court, according to a Philadelphia Inquirer report, but the administration has not confirmed this.

Pennsylvania’s lottery is the only in the nation to dedicate all of its proceeds to senior programs, including low-cost prescription

drugs, free transit and reduced-fare shared rides, and rent-rebate programs.

Critics of Gov. Corbett’s motion to privatize declare that the lottery is one of the most regressive taxes.

Despite benefits delivered to older Pennsylvanians, studies indicate that the games target low-income or compulsive players, who end up costing the state millions for additional social services, according to The Inquirer.

Gov. Corbett said the state would lose $50 million for this year’s budget if the deal with Camelot falls through.

The PA Lottery recorded more than $3.5 billion in sales last fiscal year, and sent more than $1 billion in profits to programs that benefit the elderly.

Energy

Bill Would Push Renewable Energy Use State Representative Greg Vitali recently introduced legislation that would increase the amount of electricity companies such as PECO and PPL must obtain from renewable sources such as wind and solar.

“Superstorm Sandy was a reminder of the consequences we face if we ignore the climate change issue,” Rep. Vitali, Democratic chairman of the House Environmental Resources and Energy Committee, said in a statement. “We will not solve this problem without increasing our use of renewable energy.”

15%

The minimum amount of power from renewable sources that Pennsylvania electric companies would have to use by 2023

8%

The current minimum amount of power from renewable sources that Pennsylvania electric companies have to use by 2021

4%

The minimum amount of power from renewable sources that Pennsylvania electric companies must use in 2013 Rep. Vitali said his legislation has another benefit: It would create good, green jobs during a time when unemployment in Pennsylvania remains high.

21 FEBRUARY 2013

REGIONSBUSINESS.COM

WEEKLY BRIEFING EXECUTIVE BOOKSHELF

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21 February 2013

Regionsbusiness.com

DEALBOOK Telecommunications

Gaming

Transportation

Trump Plaza Sold for $20M

American, US Airways Merge

Atlantic City’s Trump Plaza was sold last week for $20 million, the lowest price ever paid for an Atlantic City casino, according to an Associated Press report.

The purchaser, the Meruelo Group of Downey, California, said it will close the deal by May 31.

The 39-story Trump Plaza was built in 1984 at a cost of $210 million.

January’s winnings fell short of $5 million, down more than 40 percent from January 2012, according to the Associated Press report.

The year’s winnings were slightly more than $102 million, according to the report.

$525M

Verizon’s 2012 investment in Pennsylvania wireline networks and information technology infrastructure

50%

American Airlines and US Airways formally announced a merger creating the world’s largest airline.

US Airways, Philadelphia International Airport’s primary carrier, employs more than 6,000 people in Philadelphia.

The regional African-American Chamber of Commerce and other

Philadelphia International Airport

groups have expressed concern over potential loss of jobs.

But Mayor Michael Nutter said the merger would be good for Philadelphia.

“Increased air service means more opportunities for jobs at the airport and, ultimately, our region,” Mayor Nutter said in a statement.

U.S. consumers who said Internet service is their home’s most important convenience, according to the Verizon FiOS Innovation Index

1.7M

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21 February 2013

political Commentary

Regionsbusiness.com

11

Liquor Privatization A Necessary Victory for Corbett

Charlie Gerow is CEO of Quantum Communications, a Harrisburg-based public relations and issue advocacy firm.

Contribute Send comments, letters and essays to feedback@ regionsbusiness.com.

Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

It shapes up as an epic battle.

On one side is the administration of Governor Tom Corbett, many of the state’s business leaders and the editorial boards of newspapers. Across the aisle is an unusual triumvirate of retail clerk union leaders, anti-alcohol groups and beer distributors.

At stake is the state’s antiquated liquor control system, an 80-year throwback to the days of Prohibition. Only one other state in the union has a system that resembles Pennsylvania’s — Mormon-dominated Utah.

Gov. Corbett wants the state out of the liquor business. He’s promoting a plan to privatize both the wholesale and retail sale of wines and spirits that are now controlled by the state.

Other governors have tried.

Milton Shapp gave it a whirl more than 40 years ago. Dick Thornburgh pushed hard for privatization 30 years ago. Tom Ridge did, too, 20 years ago.

Yet a bizarre and outdated

system often described as an odd combination of prohibitionism and socialism still exists. So is this time going to be different?

The Corbett administration is staking a lot on this fight. The governor badly needs a “signature” legislative victory, and the plan he’s cobbled together looks ideal. During the four decades since Gov. Shapp first floated the idea, virtually every poll of public opinion has shown that the overwhelming majority of Pennsylvanians support privatization. They want a modern, convenient and consumerfriendly system.

Support for privatization cuts across political and geographic lines. Even in union households there is strong support for privatization. Yet the legislature has never had the political will to accede to the wishes of their constituents on this issue. The iron triangle of the retail clerks union, “temperance” groups and beer sellers has held serve.

This time should be different. In addition to all of the reasons consumers already want privatization, the Liquor Control Board has added some. Internal problems, ethical investigations, failed computer and administrative systems and debacles like the infamous “wine kiosks” have all provided more fodder for those who say that privatization is common sense and overdue.

Additionally, Gov. Corbett enjoys a legislature where his party is firmly in control. Conventional wisdom is that passage in the House will be less difficult than in the Senate. The true politics of the fight will likely center in urban areas where support for privatization runs high, but where a large number of retail clerk union members and politically well-connected beer distributors live.

The governor essentially wants to sell an “enterprise,” which is not a core function of government, a business in which the

state should not be. (See Ronald Reagan’s “Yellow Pages” test: If you can find it in the phone book business listings the government probably shouldn’t be doing it.)

With the proceeds of the sale, estimated to exceed $1 billion, he wants to fund a core function of government: education. The Corbett plan calls for the money, received over three or four years, to be sent to public schools through block grants for school safety, K-3 reading and math programs, customized learning programs, or science and math initiatives for grades 6-12.

For consumers, privatization would mean greater convenience, better selection and pricing, and a competitive market instead of a government monopoly.

For Gov. Corbett it would be a major legislative victory the benefits of which would help bolster his re-election effort. A loss for his privatization plan would be a serious setback at a time when he can ill afford one.

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21 FEBRUARY 2013

PENNSYLVANIA POLITICS

REGIONSBUSINESS.COM

Kane Should Be Able To Answer Questions About Lottery Decision

Eric Boehm is bureau chief/news reporter for Pennsylvania Independent.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com.

Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

HARRISBURG — Kathleen Kane has sure got some explaining to do.

Ms. Kane, the state’s newly-inaugurated Attorney General, and the first Democrat ever to hold the post, had her first exchange with the press last week and the first volley in what could become a fascinating political battle with Republican Gov. Tom Corbett over the next year-and-a-half as he approaches re-election.

On Tuesday, Attorney General Kane threw out the contract signed by the Corbett administration and the would-be private manager of the state lottery, Camelot Global Services, a British firm.

She called the contract unconstitutional on several grounds, stated that her office does not rubber stamp any of the 5,000 contracts it reviews every year and apologized to the state’s senior citizens who will now lose out on additional revenue promised by Camelot that would have funded programs for older Pennsylvanians.

Then, she turned and walked directly off stage.

There is a bit of an unwritten rule regarding interactions between the press and politicians in Harrisburg.

Maybe Attorney General Kane isn’t aware, since she is a newbie, but it goes something like this: If you want to make a major announcement and do not want to deal with questions from the press, send out a press release and a statement. Sure, you will still get phone calls with questions, but that’s exactly why you hired media flacks in the

contracted-out to the private sector?

What is Attorney General Kane’s view of privatization in general, since Gov. Corbett intends to pursue other deals in the same direction?

These are questions the new attorney general should answer.

During Gov. Corbett’s time in the attorney general’s office, his press team was known for being tight-lipped, as most attorneys general have first place.

Those questions can be more easily — and less conspicuously — dodged than questions at a press conference.

On the other hand, if you want to command the attention of the entire Harrisburg press corps and make sure your face and voice show up on every television news outlet from Philadelphia to Pittsburgh, then call a press conference — but the tradeoff is that you are expected to take questions.

And, believe me, there are plenty of questions here.

Did Attorney General Kane allow her significant campaign contributions — $30,000 worth — from the union that represents lottery employees affect her legal understanding of the contract that would result in about 200 members of that union being laid off ? We don’t know, so it seems fair to believe that it may have.

Does ruling this contract out-of-line with the state constitution have repercussions for other parts of the state lottery’s operations, many of which are already

to be.

But when he held press conferences to announce indictments in the Bonusgate scandal — a far more legallysensitive issue than Attorney General Kane’s rejection of the lottery contract — he took questions from the media.

This is something Attorney General Kane needs to learn about being attorney general — she’ll face a lot more scrutiny than she did when she was an assistant district attorney in Lackawanna County.

And she’ll face even more of it because she campaigned almost exclusively on a promise to turn her new office into a political cudgel to wield against Gov. Corbett.

It’s possible her next public appearance — and next volley at the governor — will be something to do with her long-awaited review of how Gov. Corbett handled the Jerry Sandusky child sex abuse investigation at Penn State.

Hopefully, by then she will have learned that taking reporters’ questions is part of her new job description.

VOTER ID

A web advertisement leads Pennsylvania’s voters to more information on the new Voter ID law.

Voter ID Law Postponed Until After Primary

BY MEGHAN CHECK Lawyers involved in the pending Voter ID lawsuit decided last week that Pennsylvania voters will not need to show ID as a condition for voting in the May primary on the grounds that the court has not yet ruled on the measure.

The lawsuit challenges the constitutionality of requiring already registered voters to provide a government issued photo ID to election officials prior to voting.

The May primary will therefore follow the model of the November election.

Local election officials may ask voters to show ID but cannot prohibit them from voting if they decline to show documentation.

The constitutionality of the law is expected to be decided in a state Commonwealth Court trial scheduled to begin on July 15.

The voter ID requirement has had a turbulent year since it was first signed by Governor Tom Corbett last March.

It was suspended by Commonwealth Court Judge Robert Simpson twice via injunction due to the question of “liberal access.”

Voter rights activists have said that the measure would disenfranchise groups of voters such as the sick or elderly.

Voter ID advocates have promoted the measure as in the public’s best interest to prevent occurrences of voter fraud, the prevalence of which has been debated.

This article was originally published on PoliticsPa.com.

21 February 2013

political Commentary

Regionsbusiness.com

13

Council Unveils Plan For Advertising on City Property

Timothy Holwick is a freelance writer covering Philadelphia government.

Find more coverage at citycouncilmatters.com.

Contribute Send comments, letters and essays to feedback@ regionsbusiness.com.

Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

At last week’s Philadelphia City Council meeting, Councilman Bobby Henon introduced a bill on behalf of City Council President Darrell Clarke that would allow for the placement of advertisements, including digital advertisements, on municipal property.

The bill outlines a general plan, which, if passed, will be implemented through regulations by the Philadelphia Planning Commission.

As if insisting that the plan to allow ads on municipal buildings is not as financially motivated as it sounds, the rationale in the bill outlines how digital advertisements will be controllable by the City of Philadelphia as a way to relay important emergency information and announcements to people

nearby. property.

While the bill will generate — The city will be entitled to needed revenue for the city, it a percentage of the regularly will chiefly mimic cities like scheduled programmable time New York, Chicago, Dallas, San in addition to having the ability Francisco, Boston and St. Louis, to override the signs on a citywhich have implemented similar wide or localized basis in the programs, known as event of an emergency. coordinated municipal The bill will reserve secadvertising programs. tions in the Philadelphia Under the bill, the Code for limitations on following requirements size and placement of the would apply to a digital signs, but that will be up advertising sign: to the Planning Commis— The sign shall be sion to define specifically.

Henon capable of receiving and In addition to those transmitting both programmed requirements, each operator of and real time images, and shall digital signs must enter into an be operated as a changing image agreement with the city that will sign. focus on the particular prefer— The sign must be inteences for those signs, such as grated into the city’s emergency intensity of light and overall response network, along with aesthetic impact on the area of the signs. other digital signs on municipal

The bill contemplates that typical locations for signs include, but are not limited to, bus shelters, information kiosks, trash receptacles and public restrooms.

The bill argues that allowing digital signs on municipal property provides new revenue, as well as a way to better reach citizens with important information in the digital age.

The bill makes no mention of how much money might be generated by this project but the reality is that it will be funds that were not coming in before, as advertising on municipal space is fairly limited at this time.

If the bill passes, council will review Requests for Proposals from city departments looking to take advantage of advertising on municipal property.

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14

Calendar Thursday, February 21 6 to 9 p.m.

Syscom Technologies 490 Norristown Road Suite 151, Blue Bell, Pa. Philadelphia Entrepreneur Meetup Group Each member will be allowed two to four minutes to pitch an idea to the group.

Later, members can pitch questions or problems to the group for five to 10 minutes.

Friday, February 22 6:30 to 8:30 p.m.

Azavea, 340 N. 12th Street, #402, Philadelphia, Pa. TechCamp Philadelphia Kick-Off TechCamp Philadelphia: Education, to be held Saturday and Sunday, brings together the School District of Philadelphia and education leaders to discuss challenges in the region’s education community and possible solutions.

Steadily, but almost quietly, Philadelphia has become a hotspot for entrepreneurs.

The combination of great ideas, available capital and a welcoming environment have set the stage to make 2013 a breakout year for innovation and new businesses.

To Learn More ...

For more information on sponsorship opportunities or to suggest story ideas, call our main office at 610-940-1656.

The web: RegionsBusiness.com Facebook: Facebook.com/regionsbusiness Twitter: @RegionsBusiness Sponsored by

21 February 2013

2013: Year of the Innovator

Monday, February 25 6 to 7 p.m.

Raw Sushi and Sake Lounge 1225 Sansom St., Philadelphia, Pa. PA Entrepreneurs & Angels Networking Party The venue is open exclusively to the Pennsylvania Entrepreneurs & Angels Network for its networking party. This event is free with RSVP. Wednesday, February 27 8 a.m.

Corner Bakery Cafe 2 Coulter Ave., Ardmore, Pa. Main Line Professional Development Group Breakfast Meeting This group supports members’ professional development and attempts to improve business practices to increase business using a sounding board and focus group for each other’s strategies. meetup.com

Regionsbusiness.com

Wharton Announces Seed Award Winners

By Alexis Sachdev The Wharton School of Business recently announced the three recipients of the Snider Seed Award. The winners, members of Wharton’s Venture Initiation Program (VIP), have been developing venture projects; the grants comes to them as seed capital, and Wharton takes no equity in the student companies.

Dan Fine, class of 2015, founded Glass-U, a sunglasses company built on the premise of customization. The company, launched in the summer of 2012, “produces custom folding sunglasses targeted at fans [and] students,” according to Glass-U’s website.

Dorie Golkin and Emelyn Northway, both class of 2013, cofounded Of Mercer, a women’s fashion brand targeted at young female professionals, in 2012.

Facebook.com/glassuco

Though the website is live, no items are currently available to purchase.

Parry Bedi and Sami Kalpa, both class of 2012, are cofounders of SocialGlimpz, which “delivers a dynamic question/answer platform that makes the gathering of insightful market data simple, social and instantaneous,” according to Wharton’s website.

These three winners have all been members of VIP for at least one semester, have participated regularly in the student entrepreneurial environment, and are making significant progress on their ventures.

Startup PHL Selects Finalists

By Alexis Sachdev Startup PHL, a collaborative initiative by the Philadelphia Department of Commerce and the Philadelphia Industrial Development Corporation, announced its finalists for the 2013 Call for Ideas competition.

Among the Top 20 include: Philadelphia Bootstrapper Conference: BaconBizConf | Slash 7 and Indy Hall The BaconBizConf is the self-proclaimed only conference of its kind for bootstrappers selling software, e-books, videos, training resources, and tools. What sets BaconBiz apart?

It’s “relentlessly focused on helping you create, market, and support a product your customers will love,” according to Startup PHL’s website.

Open Source Legal Documents | The Entrepreneurial Law Clinic at the Earle Mack School of Law at Drexel University Aiming to continue supporting startup legal ventures, the Entrepre-

neurial Law Clinic plans to offer an open source set of customizable organizational documents for regional startup lawyers.

Formalize and Expand the Regional Affinity Incubation Network (RAIN) | The University City Science Center RAIN aggregates a network of more than 50 regional research parks, support organizations, and shared work spaces to support and better connect Philly entrepreneurs. By expanding the network, the startup community can develop more ideas, form more companies, and create more jobs.

The full list can be found at StartupPHL.com

21 FEBRUARY 2013

2013: YEAR OF THE INNOVATOR

REGIONSBUSINESS.COM

15

BY BRANDON BAKER

GETTING THE

TEXT MESSAGE ACROSS

Inspired by an overdue phone bill, Relay Network connects companies and customers via everyone’s most trusted sidekick: their smartphone

@RelayIt

/RelayNetwork

T

hree years ago, Matt Gillin received a text message that would change his life forever — from his phone company. “[AT&T] sent me a text, and they said, ‘Matt, we’re going to shut your phone off — we’ve been trying to reach you. Click here, and pay your bill,’” Mr. Gillin said.

“It was the most incredible customer service experience where I clicked on a link, and within 45 seconds my bill was paid but, more importantly, my business idea was formed.”

Mr. Gillin, who formed Relay Network in 2009 with members of a previous — and massively successful — prepaid card solutions company eCount, has developed a mobile platform that connects businesses with their consumers, and vice versa.

Mr. Gillin described the functionality of the mobile application as akin to iMessage or Twitter for business-customer relationships in industries such as health care, finance and retail, creating an open line of digital dialogue that keeps tabs on a customer’s history.

“We literally have an invitation and an acceptance model upfront,” Mr. Gillin said.

“The business invites a customer to connect, and all the customer has to do is accept that invitation by either dialing in or texting in, and Relay does the rest — it’s like magic.”

“Today, for example, you go in and you buy a car, and then they bombard you with emails and forms and websites I have to [visit] to fill out [feedback] forms.

“Imagine if I was connected with them, and all I had to do was respond to an experience just like I would if I were messaging a friend?”

The Radnor, Pa.-based Relay Network currently works with more than 50 brands, one of its biggest being Independence Blue Cross, headquartered in Philadelphia.

“That example’s really powerful. IBC had a major problem,” Mr. Gillin said. “Health care’s going retail, and they [had to determine] how they could better serve by going from a payer to a partner.

“They’re now directly connecting with customers so that consumers can ask questions about whether a procedure’s covered, and [IBC] can send messages saying, ‘Hey Matt, it’s February, but it’s not too late for a flu shot’ — valuable information that can flow back and forth.”

Mr. Gillin hopes that in five years’ time the company will build upon its technology and extend its service to “hundreds of millions” of users to drive meaningful well-cultivated customer-business relationships in even more industries.

info@relaynetwork.com

www.relaynetwork.com

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21 February 2013

2013: Year of the Innovator

Regionsbusiness.com

Happenings Media Founders Launch Brooklyn Happenings

Happenings Media cofounders Angela Giovine, left, and Tina Paparone.

Submitted

Tina Paparone of Happenings Media continues to focus her efforts on pumping out quality digital magazine content while developing a transparent and dynamic company culture.

Since we last checked in with Ms. Paparone in January, the media company has successfully launched its Brooklyn Happening website and, in the Greater Philadelphia region, has recently opened nominations for its annual “Happening List” of noteworthy local businesses, events, and people in Bucks and Montgomery counties.

Region’s Business caught up with Ms. Paparone to

gauge the scope of the comWith an overall focus on pany’s growth as well as get an growth this year at Happenidea of what lies on the hori- ings Media, the first quarter zon for the string of hyper- of 2013 has been all about local magazines. proactive preparation — creating a strong operational Led by the 2013 Happen- foundation while establishing ing List competition in the clear, efficient lines of comGreater Philadelphia region, munication throughout the February has been a big network at the management month at Happenings Media, level, the licensee level and with record-breaking traffic the advertising level. Creatand engagement levels across ing that framework is a key the network. It’s extremely component in our ability to rewarding to watch regional build the lean, truly localized licensees gain such strong organization we envision for momentum in their markets, the network. and from the top level, a clear Never ones to use an example of the power a net- achievement as an excuse to work approach can yield. It sit back and relax, we confeels great. tinue to set more ambitious

Diary of a Startup

goals each month. Next up, we’ll be launching in Berks County as well as Western North Carolina, as well as introducing The Happening List competition into new territories. Regionally, we’ll soon see the return of our biggest live event of the year, the Happening List Red Carpet Bash, where we’ll honor and celebrate the contest winners, finalists, and nominees.

Capital Seekers

Business, Investor Pitch at Tech Meetup Acclaim

Edison Ventures

Originally a tool for educators to critique presentations, the Acclaim web app (www.getacclaim.com) has a new purpose.

As Acclaim co-founder Aksel Gungor explained during his demo, the new market is comprised of everyone from freelancers to large agencies.

Used in industries that require a high video throughput, Acclaim helps to streamline communication between clients and production teams as they collaborate on video projects.

With Acclaim’s system of in-project annotations linked to individual frames within videos, the need for lengthy, confusing email threads is a thing of the past.

At just three months old, Acclaim has built a base of beta clients that are putting the service through its paces.

Acclaim offers a tiered subscription service, from $29 for 100 minutes of uploaded video per month to a more robust option of 2,000 minutes of uploaded video per month for $400.

In addition to the regular startup demos, those in attendance at February’s PTM also heard an investor pitch from David Nevas, a principal at Edison Ventures (www.edisonventures.com).

Mr. Nevas is part of the eCommerce & Interactive Marketing team at Edison and has been with them for five years.

Edison Ventures is an expansion-stage venture capital firm that focuses on software and internet businesses located on the East Coast.

It has $850 million under management and is investing out of the $250 million Edison VII that was closed last year. The company typically invests $5 million to $10 million in businesses that have demonstrated significant revenue traction and are looking for that extra push to grow even faster.

Edison focuses on FinTech, Healthcare IT, eCommerce & Interactive Marketing, and Enterprise 2.0.

By Stephanie Ogozaly, social media specialist for Philly Tech Meetup.

More information and videos of the meetup available at www.meetup.com/philly-tech.

Greekdex A social media site for Greek life Business: Greekdex Founders: Charles Moyes and Anthony Diepenbrock IV Contact: tdiepenbrockiv@gmail.com

By Brandon Baker After building momentum during a Philly Tech Meetup demonstration earlier this month, Anthony Diepenbrock IV and cofounder Charles Moyes are just two weeks from launching what could be considered Facebook for Greek life: Greekdex.

The website’s existence is largely attributed to the closing of collegiate gossip forum College ACB, which inspired the duo to fill its void in an innovative way.

“When College ACB shut down in 2011, it was both good and horrible in that every person at [University of Pennsylvania] was on the site every day, but there were a lot of nasty things being said [on the site],” Mr. Diepenbrock said. “We wanted to build something better that didn’t have the bomb threats

or the STD comments.”

The website verifies users’ Greek status through a special algorithm called the “Frat-Finding Algorithm,” which they’ve spent eight months perfecting.

The algorithm analyzes a Facebook friend graph and works in sync with a confirmation process from other users to determine whether someone is part of a particular fraternity or sorority — not entirely unlike early-stage Facebook’s invitation-oriented sign-up process.

Greekdex will launch at University of Pennsylvania and Cornell University, with Mr. Diependbrock currently focusing on having each user invite 50 friends.

Though the company’s current cost of operation is minimal, Mr. Diepenbrock said Greekdex is seeking an unspecified amount of funding and will also be eying First Round Capital’s Dorm Room Fund as a possible financial resource.

21 FEBRUARY 2013

2013: YEAR OF THE INNOVATOR

REGIONSBUSINESS.COM

17

Hiring Foreign Nationals Good for US Businesses

Brian H. Getson, Esq. leads the nationwide immigration practice of Getson & Schatz,

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com.

Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

As President Barack Obama noted recently, “we define ourselves as a nation of immigrants,” and yet, many Americans mistakenly consider immigrants a threat to prosperity.

Businesses all too often view the regulations governing the process of hiring foreign nationals as forbiddingly complex, and as a result job applications from highly skilled foreign nationals who could obtain work authorization through employer sponsorship and contribute services of great value are rejected.

Employers should understand that immigration laws provide an opportunity to lawfully hire qualified foreign nationals.

As immigration lawyers, we guide employers through the immigration sponsorship process. We explain available employment-based immigra-

tion options, timing issues with regard to when a foreign national can begin employment, the feasibility of a foreign national obtaining the appropriate work visa, the legal requirements involved in hiring a foreign national, the costs involved in the sponsorship process, and how to comply with all regulations once the foreign national begins employment.

We also prepare petitions with government agencies for temporary and permanent employment of foreign nationals.

As the U.S. population becomes ever more multicultural and multi-ethnic, businesses benefit by maintaining a workforce that reflects the diversity of the population.

Fresh ideas from foreign nationals on management, work flow, and employee relations can

Providing the most unique meeting and event experience.

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make a business more dynamic.

Foreign nationals, especially those with science and engineering backgrounds, provide a diverse range of perspectives to the exchange of ideas. The linguistic and cultural knowledge of foreign nationals, along with their specific international networking ties, can assist businesses expand into foreign markets or immigrant populations in the U.S.. Additionally, most foreign nationals are highly motivated and hard-working which benefits business.

The fear that foreign nationals are “taking away jobs from American workers” is based on the assumption that the number of jobs in the economy is fixed.

The number of jobs in the economy is limited only by the number of capable individuals in the economy willing and able to

work to meet specific demand.

As the U.S. fertility and workforce participation rates continue to decline, hiring foreign nationals will be increasingly advantageous for businesses and a matter of necessity for economic success.

Comprehensive immigration reform will enable U.S. businesses to hire a greater number of foreign nationals. Regardless of the ultimate outcome of proposed reform, immigration laws should be embraced to hire qualified foreign nationals that can help businesses grow.

Hiring foreign nationals contributes towards making the 21st century what President Obama calls “an American century welcoming of everybody who aspires to do something more, and who is willing to work hard to do it.”

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21 FEBRUARY 2013

2013: YEAR OF THE INNOVATOR

Philly Founded Highlighting Local Startups New website Philly Founded is launching a project to feature “the best that the Philadelphia region has to offer” in the tech startup community, featuring different startups and community members daily for 50 days.

The startups and individuals featured on the site will be invited to participate in an event during Philly Tech Week.

From the group’s website: “Philly Founded’s mission is [embarking] on the second great revolution in our city’s history. The birthplace of the first startup nation and original business plan will once again assemble its great thinkers and innovators to make a bold statement: we ARE the Original Startup City. We are surrounded by a region full of thriving companies, a strong ecosystem and passionate and dedicated entrepreneurs and technologists. Forget Silicon Valley, New York, Boston and Austin, Philadelphia is redrawing the map of technology meccas.”

“Each day for 50 days, a tech startup, a success story and a member of the Philly region’s startup ecosystem will be featured via the Philly Founded website, live demos in public venues, local and national press coverage and a strategic word of mouth marketing and social media campaign. In addition, all 50 startups will participate in an Expo style event during Philly Tech Week with invited national and local business and entrepreneurial leaders, investors, government officials, academic leaders and the general public.”

Organizations interested in applying to be featured startups, success stories and supporting organizations can submit applications at phillyfounded. com.

Startups include technology companies started and remaining in the Philadelphia 11-county region.

Supporting organizations include companies, law firms, accounting firms, marketing and tech agencies, venture capital funds, angel investors, coworking facilities, incubators, accelerators, meetup groups and all of the other organizations that support the region’s technology startup community.

Volunteers and sponsors should contact the PhillyFounded committee at info@phillyfounded.com.

Applications are currently open.

Participating companies and organizations will be notified on a rolling basis.

REGIONSBUSINESS.COM

Science Center Raises $1M for ‘Entrepreneurs Clubhouse’

BY THE NUMBERS

50

Years since the University City Science Center’s founding

350

Organizations that have graduated from the University City Science Center since 1963

15,000

Employees working for the 93 graduate companies in the Philadelphia region FACEBOOK.COM/QUORUMSC

The University City Science Center has raised more than $1 million for Quorum, the entrepreneurs’ clubhouse, and has officially surpassed its Open the Doors Campaign goal.

Recent commitments made by Morgan Lewis, NewSpring Capital, Quaker Partners and Safeguard Scientifics triggered a challenge grant presented by the University of Pennsylvania, enabling the Science Center to close its first major fundraising campaign.

“These five dynamic players in the entrepreneurial ecosystem embody Quorum’s goal of connecting entrepreneurs and innovators to investors and advice. With the involvement of firms such as NewSpring Capital, Quaker Partners and Safeguard Scientifics, we’re incorporating another component essential to the startup community — funding — into Quorum’s DNA,” Science Center President and CEO Stephen S. Tang said.

Recognizing the Science Center’s push to close the Open the Doors Campaign, The Perelman School of Medicine, the Office of the Vice Provost for Research, and the Office of the Executive Vice President — joined forces to offer the challenge grant to help the Science Center meet its goal.

“Our premise that Quorum would become a clubhouse for entrepreneurs has been validated,” said Craig R. Carnaroli, chairman of the Science Center Board of Directors and Executive Vice

OUR PREMISE THAT QUORUM WOULD BECOME A CLUBHOUSE FOR ENTREPRENEURS HAS BEEN VALIDATED’ —CRAIG R. CARNAROLI, CHAIRMAN OF THE SCIENCE CENTER BOARD OF DIRECTORS

President of the University of Pennsylvania. “Quorum is enhancing the vitality, creativity and entrepreneurial spirit of the neighborhood and the region.”

Support from a total of 34 sponsors has allowed the Science Center to develop programming specifically designed to connect entrepreneurs with the people and resources necessary to help grow their ideas and businesses, ultimately creating jobs that positively impact the region’s economy.

Since the launch of Quorum in 2011, more than 12,000 entrepreneurs, scientists, programmers, resource organizations and business leaders in the region have attended more than 250 events held in the space.

“We may have reached our Open the Doors campaign goal, but our work is not over,” Mr. Tang said. “We’re now focused on converting our inaugural sponsors into annual supporters of Quorum so we can continue to support entrepreneurs and innovators for years to come.”

$89,000

Average salary of employees of the graduate companies

40,000

Regional jobs generated overall by graduate and resident companies from the Science Center

$64.5M

Tax revenue generated by graduate and resident organizations

$9.4B

Annual regional economic output generated by graduate and resident companies

Q&A

21 FEBRUARY 2013

REGIONSBUSINESS.COM

19

NEIL THEOBALD’S

TEMPLE VISION

Temple University’s new president plans to decentralize the budget and make college more affordable for students after years of success at Indiana University.

What’s the elevator pitch for Temple University?

If we only had a few floors on the elevator, the most important message would be Temple’s high quality.

We are well known for our value and an increasingly residential experience, but most people don’t know that we have world-class faculty and researchers.

If I had a few more minutes in the elevator, I would talk about our commitment to keeping student debt as manageable as possible, by containing costs, creating incentives for students to graduate in four years, and teaching basic financial literacy to our students.

How does your professorship in education finance complement your role as university president?

Financial issues are vitally important for public universities. Our commonwealth can commit only so much to higher education, so we must be responsible stewards of the public dollars we are privileged to receive. Temple will be moving to a decentralized budget model that shifts budgeting decisions into the hands of the deans and faculty to reward decisions that are efficient, entrepreneurial and creative. Having had two decades of experience with that model at Indiana University, I can tell you that it works very well.

Why are student scholarship opportunities essential?

It goes back to something I mentioned earlier — helping students get a world-class education and graduate with a manageable amount of debt.

Think of it this way: The amount of debt students have when they graduate affects everything, from buying a house to starting a family. We also need graduates who can contribute to the economy to help build our recovery.

So having a smaller amount of debt will make that possible. Student scholarship is an important piece of the puzzle.

What are you doing to assess tuition costs and affordability?

The Commonwealth of Pennsylvania, through Governor [Tom] Corbett and the leadership in the state General Assembly, have committed to keeping our appropriation level for the coming year.

At the same time, the public institutions of higher education in the state have pledged to keep tuition increases as low as possible.

Having a stable base from the state will help us tremendously to plan our budget going forward and ensuring that Temple remains an affordable option.

— Melissa Brooks

20

21 february 2013

Regionsbusiness.com

ROOM BOOM Center City hotel occupancy rates neared pre-recession levels in 2012, generating strong revenue numbers in a tough economic climate.

More hotel openings are planned this year, which will create even more opportunity.

text by chris weeden illustration by don lee

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21 february 2013

Regionsbusiness.com

T

he Philadelphia tourism industry continues to set records with the resulting spillover, creating a boom in hotel growth in 2012 that had not been seen since prerecession years.

On February 13, The Greater Philadelphia Tourism Marketing Corporation (GPTMC) released the 2012 travel statistics, reporting there were a record 2.9 million room bookings in Center City alone in 2012 – 28 percent of which came from individual leisure travel. Total revenues exceeded $88 million, and the 73.4-percent occupancy rate approached the 74.1 percent all-time high established in 2007.

With the booking rate not quite at prerecession levels, but revenues and sheer volume were higher, that could only mean one thing: There are more hotels.

Peter Tyson, an expert on the hotel industry in Philadelphia and vice president of PKF Consulting, said the factors are aligned to stimulate growth among developers.

“The limited amount of new hotel supply in recent years, primarily due to the dearth of financing for lodging properties during and immediately after the recession, in conjunction with the resurgence in demand post-recession in part due to the opening of the [Pennsylvania] Convention Center expansion all combined to boost demand levels and occupancies, which are attractive to developers,” he said.

Philadelphia saw two new hotel openings in 2012: the Hotel Monaco in Independence Hall and Homewood Suites in University City.

This year’s figures will surely illustrate the continuance of an upswing in the industry.

Four hotels are in various stages of construction, two of which should open by the year’s end. Home2Suites is a 246-room hotel at 12th and Arch streets, and a Courtyard by Marriott in the Navy Yard nears completion.

Hotel Indigo at 1218 Chestnut Street and a W Hotel at 1441 Chestnut Street are scheduled to open in 2014 or beyond.

“The future of the lodging industry in Philadelphia is bright,” Mr. Tyson said. “With room demand at record levels, an expanded Convention Center, more attractions added every few years and the city still a relative price bargain vis-à-vis Boston, New York, and Washington, Philadelphia is an ever more attractive destination for all types of visitors.”

Hotels sprouting indicate a larger trend.

Simply, more people are coming to Philadelphia and need a place to stay. The root cause is that the city continues to thrive in multiple industries. Unprecedented investments in

improving the Convention Cenhas showed few signs of slowing.

When the fiscal year in 2012 ter yielded the largest influx of concluded, Philadelphia saw 38 visitors. Leisure tourism also is million visitors for the year. thriving thanks to developments When the Convention Center in the arts, food, and entertainopened in 1993, it spawned the ment. growth of a downtown hotel Such conditions did not arise industry capable of supporting accidentally. Consider it a good the demand it required. In late piece of strategic planning by the 2010, a two-year renovation saw city’s leadership. a space increase of 62 percent.

When manufacturing vacated According to Danielle Cohn, Philadelphia in the mid-1990s, vice president of marketing and then-Philadelphia Mayor Ed The future of communications of the ConvenRendell and Pennsylvania Governor Tom Ridge devised a way the lodging tion Visitor’s Bureau, the sales for the city to survive the job industry in team has surpassed its sales goal losses and move into the 21st Philadelphia for the first time in eight years century successfully. as bookings line the calendar is bright.’

Doing so required rehabilias much as 10 years in advance.

—PETE TYSON, tating the tourism industry by PKF consulting There are 834,000 future room marketing the city’s historical bookings stemming from conattributes and developing a hip, vention sales. desirable arts scene. Perhaps more than “Philadelphia is the complete package, anything, it required a desirable convention everything is walkable,” she said. “That’s a big atmosphere for guests from abroad needing selling point for Philadelphia. [Out] one door an attractive meeting space. to the Convention Center, you have Market The results have been unequivocally a sucStreet and Walnut Street. Conventions love accessible cities. On Broad Street, you have cess. Since 1997, the city has seen a 41 percent the Avenue of the Arts. There are wonderful increase in tourism with a major impetus amenities in the city and a great value. A new, of late coming from the newly refurbished state-of-the-art convention center is a plus as Convention Center, growth of museums and well located right downtown.” cultivation of an entertainment scene. All of The 113th Annual Army-Navy football this was aided by a marketing push by all the game in 2012 represented one of the largstakeholders who raised the funds to market Philadelphia around the world. est revenue generators for the city. Held the “Every year there seems to be something weekend of December 8th, the traditionnew,” said Ed Grose, executive director of filled contest totaled $35 million in economic the Greater Philadelphia Hotel Association. impact according to Ms. Cohn.

“In 2012, it was the Barnes Foundation that Such an event is a microcosm of what moved to the Benjamin Franklin Parkway, Philadelphia has become known for. With and that’s getting a lot of attention from forAmerican history as its backdrop, the pereign travelers from Europe.” ceptions of the city from a day-trip to an He also cited the addition of several new sports stadiums, the Constitution Center, and other museums as a source for growth in recent years. The Made in America music festival held on the Benjamin Franklin Parkway during Labor Day weekend last year filled rooms on an otherwise slow weekend.

Innovations have become the norm during the last 15 years.

When GPTMC was formed by the Pew Charitable Trusts in 1996, Philadelphia hosted less than 27 million visitors. The next year, the “This is My Philadelphia” campaign debuted and generated a seven percent increase in foot traffic. The pace

The top floors of the Loews Philadelphia Hotel, the 583-room luxury property in the PSFS building, offer a dramatic view of the Philadelphia skyline. Photo by K. Ciappa for GPTMC

by the numbers

2013 Lodging in Philadelphia The numbers show 2012 was a record year for Philadelphia hotel lodging.

73.4%

Occupancy rate for Center City hotels in 2012, just shy of the pre-recession peak of 74.1% in 2007.

$488M

Revenue generated by 2.9 million room nights.

28%

Percentage of downtown hotel room nights accounted for by leisure travel. This segment has more than tripled since 1997 when the Greater Philadephia Marketing Tourism Corporation began marketing Philadelphia as a leisure destination.

$123

Revenue per available room in 2012, up 6.9% from 2011.

SOURCE: GPTMC

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21 FEBRUARY 2013

REGIONSBUSINESS.COM

BY THE NUMBERS

In Bucks County Lodging establishments in Bucks County also experienced a strong 2012.

2.3%

Increase in occupancy for Bucks County lodging establishments in 2012 compared to 2011.

7.6%

Increase in lodging revenue in Bucks County for 2012 compared to 2011.

5.5%

Increase in revenue per available room in Bucks County in 2012.

3.2%

Increase in Bucks County’s average daily room rate in 2012 versus 2011.

KEY HOTEL INDICATORS SHOW THAT TOURISM IS THRIVING IN BUCKS COUNTY.’ —JERRY LEPPING VISIT BUCKS COUNTY

overnight destination location have changed.

The GPTMC oversees various marketing entities aimed to entice leisure travel, which represents nearly 30 percent of all travelers to the city.

“Philly does so well with these nostalgic, tradition-based, historic events,” said Cara Schneider, GPTMC director of media relations. “We’re becoming known for a contemporary foods and art scene but we have a historic pull.”

The $787 million improvement at the Convention Center represented the costliest investment in the Commonwealth, but the figure has been worth it. By boasting the largest exhibit space in the Northeast – and 14th largest nationwide – Philadelphia has become a hub.

In the fiscal year ending in June, the largest convention was for the American Diabetes Association. It attracted more than 17,000 attendees grossing more than $40 million.

Five additional conventions brought in more than $30 million. The total economic impact of the conventions represented $1.5 billion, according to the annual report by the Philadelphia Convention and Visitor’s Bureau.

The convention segment holds 39 percent of regional tourism, the component of the demographic. Individual leisure (26), individual commercial (31) and airline crews (4) comprise the industry.

Individual or group business travel has remained constant for years, experts said.

With manufacturing leaving and industry relatively stagnant in the recession, it’s been up to the other segments to draw revenue.

“We’re not bringing in any corporate demand because it’s an unfriendly place to do business,” Mr. Grose said. “Things such as the high wage tax and business privilege tax hurt. That’s why our group business and tourism industry is so important because corporate demand has been flat for the last 20 years, and that’s because if anything we’re losing our corporate base as we continue to tax business. That’s why it’s important to have a healthy group and tourism rate.”

This was a concentrated effort on behalf of the city as a whole. In 1998, the city enacted a hotel tax with the expenses going to marketing efforts aimed at improving the city’s visibility domestically and internationally and to improving the Convention Center. At that time, the state allowed for up to a 15.5 percent tax that the city could enact. It started modestly in time, increasing to 8.2 percent in 2009. In December, it reached its maximum allowed by state law, a modest increase from 15.2 percent, or roughly 50 cents based on the average cost of a room night in the city.

This move has been, for the most part, supported by the industry. It provides 64 percent of the resources needed for the GPTMC while

“Philadelphia is fortunate as it offers ‘districts’ where certain qualities are concentrated ... thus, the museum and Historic Districts can maintain relatively low key, individual characteristics.”

- PETE TYSON

PHOTO BY J. FUSCO FOR GPTMC

additional funding goes to the CVB. 86 percent of the GPTMC’s allotment gets siphoned toward marketing.

Certainly some hotels stand more to gain from these ventures than others. According to Ethan Conner-Ross, GPTMC vice president of planning and research, three-quarters of the hotel rooms reside in Center City. As construction on new hotel projects continue, the tax burden is not viewed as a barrier to entry. The development throughout the city reflects an eclectic mix of demand.

Mr. Tyson saod this makes the market so strong. Now that investment capital is available, the hotel industry grows accordingly.

“Philadelphia is fortunate as it offers ‘districts’ where certain qualities are concentrated,” he said. “The museum area along the Ben Franklin Parkway is one area; the Historic District around Independence National Historical Park is another; the sports/stadium district is another. While each area has its own restaurant, club, arts and shopping elements, most of the ‘action’ is along Broad and Walnut Street corridors south of City Hall.

Thus, the museum and Historic Districts can maintain relatively low key, individual characteristics.”

Late last year, Mayor Michael Nutter visited China, and a new website launched aimed at attracting potential tourists from the world’s largest country. In FY 2012, 613,000 of the city’s 38 million tourists came from abroad, a figure that was down 3 percent from 2011. Overall though, the city rose from 13th nationally to 12th, part of an upward trajectory when in 2001 the city ranked 21st.

Prior to Thanksgiving, the Convention and Visitor’s Bureau launched its latest marketing effort Discover PHL – tying in Philadelphia International’s Airport code with the appeal of the city as a whole.

“The research that we had done over the last year through PHL when it comes up as a code,” said Ms. Cohn of the Convention and Visitor’s Bureau. “Philadelphia is under the headline of Renaissance of Modern Renaissance City and positioning the city as a place that there is an inspired young, creative culture that’s blooming and partnering with

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21 february 2013

Regionsbusiness.com

high energy innovation. The spirit of where independence lives.”

Forty-one percent of the conventions come from the life science industry, while trade associations at 19 percent make up the No. 2 most common utilizer of convention space.

These initiatives come at a time when the airport is growing. As part of a multibillion dollar improvement project, greater air travel and increased efficiencies should provide greater numbers coming into the city.

Direct flights to San Francisco and Los Angeles by Virgin American and Seattle

by Alaska Airlines reflect an increased demand by both coasts, said Mr. ConnerRoss.

“The airport is important,” he said. “We’re always looking at flights and where they’re becoming available. It is a positive sign for the way Philadelphia is being regarded.

They’re identifying their growth markets, especially to premier West Coast destinations.”

Domestically, the bulk of business is done within a four-to-five-hour drive radius where a quarter of the nation’s population resides. Such a solid geographical footprint provides a base from which to expand and draw supplementary business.

“The US Travel Association released a case study looking at Michigan as the state and Philadelphia as the city how marketing can lead to greater ROI,” said Ms. Schneider. “Overnight visitation in Philadelphia has grown six times greater than the national average.”

Philadelphia’s success was part of a nationwide trend under the Brand USA program, which was enacted in 2010 following the Travel and Promotion Act, the first piece of federal legislation assessing tourism as a means of economic growth. It launched DiscoverAmerica.com advertising destinations in each state that would be attractive to tourists locally and globally.

Philadelphia is emerging into national consciousness. Events such as NCAA Men’s Basketball Tournament next March and golf’s US Open in June expedite that process.

“Any time people come here, maybe they come back again with their families. People that come here often have a better impression when they leave than what they came with,” Mr. Conner-Ross said. “We have seen a transformation. We started in 1997. The reputation Philly had was a day-trip destination type of city. People knew about the Liberty Bell but didn’t know what to do.”

Chris Weeden is a Wilmington, Del.-based freelance writer.

The Art of Increased Occupancy The With Art Philadelphia campaign is midway through its run, and thus far, the results have been encouraging.

“It’s not simple to coordinate something on the backend, but the beauty of it is that it’s simple on the front end for the user,” said Cara Schneider, media relations director for the Greater Philadelphia Tourism and Marketing Corporation (GPTMC). “There was a serious commitment between the museums and the city and us to not only promote any single museum but promote that the city is bubbling up with great cultural experiences. As a visitor from anywhere, you can do a cultural visit any number of ways. The Barnes opening was really a spotlight on Philadelphia art, but the city was primed for all the people and all the press that came to town for the event to say, ‘Oh my god, this is how much they have here.’ ” Enjoying the momentum created by the Barnes Foundation and other exhibits, the city, a group of museums, and the hotel industry collaborated to stimulate interest in an otherwise slow part of the Chestnut Hill’s Woodmere Art Museum tells the story of Philadelphia’s art and year. artists. Photo by J. Fusco for GPTMC For a city in a colder climate, the first quarter often represents a slower period. Travel season dissipates reputation. This campaign should bolster it further. with the holidays, and warmer destinations are often more While the package is available every day through the end lucrative. But the hotels need people to occupy rooms, espe- of March, potential visitors must be wary of the museum cially as when there are more of them than ever before. And schedules prior to booking. The Philadelphia Museum of museums, with often their rotating exhibits, need visitors. Art closes Mondays and the Barnes Foundation Tuesdays.

Both Ms. Schneider and Mr. Ethan Conner-Ross of the The city is dependent on the revenue.

The With Art package, which is available every day of the GPTMC are careful not to describe such initiatives as disweek including weekends, couples hotel pricing at the Wes- count marketing, instead categorizing it as value-added tin, Four Seasons, Le Meridien, Sonesta, Windsor Suites, activities. Such a philosophy has been instrumental in Crowne Plaza, Sofitel, Latham, Loews, and Monaco with developing the Philadelphia brand.

They each said that one of their most popular hotel packa pass to the Barnes Foundation, Philadelphia Museum of Art, the Pennsylvania Academy of Fine Arts, or the Penn ages through the years has been Philly Overnight, which Museum. provides free parking for stays of two nights and is accessible “The Barnes Foundation and some of the larger museums through a booking online feature at visitphilly.com powered may not benefit as much,” Schneider said. “They already by Travelocity. have such a high demand and are well-known. But for the “A package deal can deliver a certain kind of press coversmaller ones, this is a great opportunity.” age and a certain type of visitor,” Ms. Schneider said. “They Ethan Connor-Ross, vice president of research and plan- may come for a visit for multiple museums. You can come ning for GPTMC, which oversees the With Art campaign, down on a Friday night and do a visit with a cocktail and said that there was an 18 percent increase in museum atten- visit a museum on the next day.”

It also positions the city relative to its nearby competidance at the Philadelphia Museum of Art. He also said that the Barnes Foundation was at capacity with the exception tors. Combining creativity, convenience, and savings, the of when Hurricane Sandy came through the region at the city becomes more attractive. Of course, it still has to have end of October. the end product, which Philadelphia boasts. Promotions The Barnes Foundation did wonders to attract interna- like With Art at an affordable price point simply reinforce tional attention that augmented an already-strong regional existing strengths.

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Real Estate

How to Find The Best Company When Moving

By David Shapiro Now that you have finally closed on your new home, the real fun begins. It is time to find the best moving company to take your belongings from your existing home to your new property.

Because you treasure your possessions, you will want to put a good amount of thought and research into your search. That way you can be relatively sure that everything will get from point A to point B in good shape.

Here are some tips to help you find the best moving company to help you transport your belongings to your new home: 1. Start by talking to friends and family.

Word of mouth is the best way to find a quality local or national moving company to move your possessions to your new home.

After all, your friends and family can tell you exactly how their experience with their mover went. If they were quite pleased with their mover’s service, chances are good that you will be happy with their mover as well.

2. Get at least three quotes from three different moving companies.

The more quotes you get, the better able you will be to find the best deal.

Furthermore, talking with representatives of each company can give you a good idea as to how they compare with one another in regards to customer service.

3. Have each company give you an in-person estimate.

The first time you contact most moving companies, they will give you an estimate over the phone. You will get an estimate that is more accurate when moving company representatives come to your home and actually see your stuff.

4. Ask about insurance.

Most moving companies offer to insure your possessions during the move in case of damage, but you need to know exactly what the coverage amounts are. Often, your homeowner’s policy will have moving insurance built in, or it will offer better coverage at a lower cost.

5. Check into transfers.

If [family and friends] were quite pleased with their mover’s service, chances are good that you will be happy with their mover as well.’

If you are making a long-distance move, the mover you choose will likely transfer your possessions from one truck to another at least once. The more transfers there are, the greater the chance that your belongings will get lost.

6. Be clear about any extra fees.

Many moving companies will charge additional fees depending on whether there are stairs in the residence, the ease of access, and more. Get a list of these possible fees up front, and you will be able to compare different moving companies more accurately.

7. Look into ratings from the Better Business Bureau (BBB).

You can save yourself a lot of headaches if you check out each potential company and its service rating with the BBB. 8. Make sure the moving company is registered with the U.S. Department of Transportation (DOT).

Your mover should be able to give you its DOT registration number. You can use that number on the Federal Motor Carrier Safety Administration’s website — ProtectYourMove.gov — to investigate its history, customer service ratings, and more.

9. Visit the offices and warehouses of your mover.

A clean, well-organized office and warehouse is a sign that the mover is probably a good one. A dirty, disorganized office and warehouse tells you the opposite.

10. Find out about any relationship with subcontractors.

Many moving companies subcontract different parts of their moves to smaller movers. Get the names of these subcontractors, and research them to make sure they provide quality service as well.

This column was originally posted on www.phillyliving.com.

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21 FEBRUARY 2013

REGIONSBUSINESS.COM

OPINION

Budget Allows Lawmakers to Show Who They Stand For M

Nathan A. Benefield is director of policy analysis for Commonwealth Foundation, Pennsylvania’s free-market think tank. Learn more at CommonwealthFoundation. org.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com.

Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

ost Pennsylvanians probably weren’t aware – or don’t care – that Governor Corbett delivered his 2013-14 budget proposal earlier this month.

But they should.

Spending $20,900 per family of four, the decisions of Harrisburg politicians affect every household across the commonwealth. Yet over the next few months, it is not taxpayers, but special interest groups who financially benefit from taxpayer-funded subsidies that will descend upon the state capitol with rallies and hired lobbyists demanding more.

How will taxpayers compete with these special interests? Pennsylvania families have no such lobbyists working on their behalf, and few have the luxury of taking time off work or away from their families to travel to Harrisburg. Like the Biblical David taking on the Goliath of Big Government, in this battle the hardworking taxpayers of the commonwealth have only a few small stones to cast.

Lawmakers must choose who they will stand with. But if they want to put taxpayers first, here are a few principles to equip them.

Produce a sustainable budget: Spending has exceeded state revenues in each of the last five state budgets.

By using temporary federal stimulus dollars, exhausting the state’s “rainy day fund,” and taking money from other one-time sources, lawmakers have lived beyond their means. Even the current year’s budget spends $239 million more than the state will collect in revenues.

This trend cannot continue. Like any family trying to live within their means, lawmakers need to act now to bring spending in line with revenues. The Independent Fiscal Office predicts that unless we change course, the budget shortfall will reach $2.2 billion by 2018.

Prioritize government spending: Gov. Corbett’s proposal to privatize the government-run wine and liquor stores will get government out of the business of selling, marketing, and producing wine and liquor, and restore it to its proper role of enforcing

... while special interests clamor for more taxpayer money, lawmakers will be challenged to stand strong with taxpayers in their spending decisions. liquor laws. Pennsylvanians are tired of an archaic and inefficient system and ready for 21st century changes.

Protect taxpayers now and in the future: Over the next few years, taxpayers’ contributions towards government pensions at the state and school district level will rise by nearly $1,000 per household.

These pension costs will consume a growing share of state, school and local tax dollars.

While Governor Corbett’s proposed reforms will stop the bleeding and create a retirement system with affordable and predictable costs for future government workers, more will need to be done to defuse the

ticking pension time bomb.

By recommending against expanding Medicaid, Gov. Corbett further protects taxpayers. Medicaid expansion under the Affordable Care Act would cost state taxpayers an additional $1.3 to $5.5 billion over the next eight years – with the rest paid for with federal tax hikes hitting Pennsylvania families.

Moreover, Medicaid provides poor quality of care and long wait times to those it is intended to serve and shifts costs to families with private insurance. Pennsylvanians simply can’t afford to finance this failing system.

Preserve job growth: Government cannot create jobs; government policy can encourage or hinder robust private sector economic growth.

Already, Gov. Corbett’s fiscal restraint has helped Pennsylvania’s economy recover from our national recession, resulting in thousands of new jobs for Pennsylvanians seeking employment. Critics point to a state unemployment rate higher than the national average, but this stems from an explosion in the number of those reentering the workforce in Pennsylvania. Over the past year, Pennsylvania’s labor force grew at a rate 17 times that of the other 49 states. Compare this to a loss of 137,000 jobs in Gov. Rendell’s second term, filled with bloated budgets, tax hikes, and additional debt.

The lesson? You can grow the government or you can grow the economy, but you can’t grow both.

Improving our economy further, Gov. Corbett’s proposal to lower Pennsylvania’s onerous corporate income tax – amongst the highest in the world – will reduce burdens on Pennsylvania business owners and help open the doors to new businesses. Even better, if lawmakers were willing to eliminate all corporate welfare, this tax relief could happen sooner, bringing an immediate boost to Pennsylvania’s economy and creating more well-paying jobs.

Spending plans designed in Harrisburg affect real families across our commonwealth. So while special interests clamor for more taxpayer money, lawmakers will be challenged to stand strong with taxpayers in their spending decisions.

21 FEBRUARY 2013

REGIONSBUSINESS.COM

OPINION

29

Corbett’s Steamroller Slowed by Political Twists, Turns

G

ov. Tom Corbett rolled into this year with an aggressive agenda focused on a number of high visibility issues. He did this despite some of the worst approval ratings on record.

He laid out his plans in his annual budget address and, not surprisingly, the reaction from both sides was swift. As the dust has settled, though, it appears his plans to steamroll through the agenda have made mixed progress.

On the upside, Gov. Corbett has a great deal of support for his proposal to privatize the state’s liquor industry.

Aside from the squawking from unions representing liquor store employees, it seems clear that this is going to happen. Finally. The plan to use proceeds from privatization to help fund education, slashed in previous budgets, is a shrewd move.

But privatization isn’t always going to be easy. Witness Gov. Corbett’s plans to privatize the lottery system.

Met with skepticism by lawmakers: Attorney General Kathleen Kane squashed the deal with Camelot Global Services. So that plan goes back to the drawing board.

Gov. Corbett is to be applauded for his intention to address the impending pension crisis and presenting an actual plan instead of rhetoric.

In the days following his address, though, came scrutiny over the plan.

A Reuters analysis painted Gov. Corbett’s solution as a cure that is potentially worse than the illness.

Similarly, kudos to Gov. Corbett for addressing transportation. The state’s crumbling infrastructure

represents a public safety concern as well as an impediment to economic growth. The initial plan was fairly well-received, though some have called for more money to be directed at this important issue. His plan to restructure taxes around fuel to fund the initiatives created another sub-debate.

Taken as a whole, that’s a great deal of activity in just the first seven weeks of the year. It’s as if Gov. Corbett believes he has a bundle of political capital to spend, instead of the historically dismal approval ratings he finds himself lugging around.

Political analysts G. Terry Madonna and Michael Young astutely point out that the next few weeks will not only shape Gov. Corbett’s legacy, but also the course for Pennslyvania for years to come.

Creating a positive outcome on either count won’t be easy. He must generate political support for his core initiatives while holding steadfast to his political principles. Taking on any one of those issues would consume a great deal of time; taking on all of them concurrently could easily become overwhelming.

Gov. Corbett must abandon his disinterest in assembling political support if he is to succeed. This is not about simply propping up poll numbers. It need not be a matter of compromising on core values, nor need it be old-school political horsetrading. His broad visions are strong and have the state’s best interests at heart, but Gov. Corbett will need to work to bring them to fruition.

REGION’S BUSINESS A JOURNAL OF BUSINESS AND POLITICS © COPYRIGHT 2012 INDEPENDENCE MEDIA 600 GERMANTOWN PIKE, SUITE 400 PLYMOUTH MEETING, PA 19462 610.940.1656 | WWW.REGIONSBUSINESS.COM

COMMENTARY FROM ACROSS THE WEB

Attorney General Kane Has Sites Set Much Higher [While Attorney General Kathleen Kane] said she has no interest in seeking Democratic nomination for governor in 2014, she hasn’t taken a future bid for elected office off the table.

The two previous attorneys general, Corbett and now U.S. District Judge Mike Fisher before him, used it as a springboard for governor.

Kane, who is smart and ambitious and telegenic and – even more importantly – outpolled every other Democrat on the ticket last fall including President Barack Obama, has to have her eyes on a bigger prize.

JOHN L. MICKEN ON PENNLIVE.COM, 15 FEBRUARY 2013

Only Government Can Increase Demand Now For without rising household incomes, and private sector businesses that aren’t reinvesting, only the government can boost the demand for goods and services.

There is no simpler explanation for the employment picture. There cannot be more private sector growth if the government

EDITORIAL BOARD CEO and President James D. McDonald Editorial Director Karl Smith Associate Editor Terrence Casey

@pkerkstra

I had my house appraised this month. AVI thinks it’s worth 130,000 less than the appraiser did. I win? 15 FEBRUARY 2013

continues to shrink spending, since household incomes aren’t growing that control most of the aggregate demand (70 percent) for goods and services. Businesses account for approximately 20 percent of total demand, and government spending accounts for the other 10 percent.

Lower taxes can help if they go to the right households, but most tax cuts enacted since 1980 have benefited the wealthiest, or corporations’ record profits, rather than economic growth overall. In fact, corporations have been hoarding their profits -- some $2 trillion in cash -- rather than reinvest it in the economy. Overall buying power has been significantly reduced, in other words. And the 2 percent payroll tax increase just enacted [will] further cut consumer spending.

HARLAN GREEN ON HUFFINGTONPOST.COM 15 FEBRUARY, 2013

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

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21 FEBRUARY 2013

REGIONSBUSINESS.COM

BY THE NUMBERS

2,900,000

Room nights purchased at Center City hotels in 2012, representing the highest total ever.

Occupancy was 73.4%, near the pre-recession peak of 74.1% in 2007.

46.2%

92%

Percentage of marketers who say that content is either “very effective” or “somewhat effective” for Search Engine Optimization.

50%

Percentage of adults in Southeastern Pennsylvania who daily watch television for three or more hours.

Percentage of marketers who say that web pages are “very effective” for Search Engine Optimization.

28.9%

40%

Percentage of marketers who say that white papers are “very effective” for Search Engine Optimization.

Percentage of children in Southeastern Pennsylvania who daily watch television for three or more hours.

27,000,000

41.5%

Pieces of online content shared daily.

20%

Percentage of adults in Southeastern Pennsylvania who daily watch television between one to two hours.

Percentage of social media messages that include a link to other web content.

55.4%

61%

Percentage of children in Southeastern Pennsylvania who daily watch television between one to two hours.

40.2%

Percentage of children in Southeastern Pennsylvania who, in their free time, use a computer less than an hour a day or not at all.

PUBLIC HEALTH MANAGEMENT CORP.

Percentage of consumers who are more likely to purchase goods from businesses that offer custom content.

$168

Average daily rate for Center City hotels in 2012, up more than 4% from 2011 when the average rate was $161.

Chicago hotels had an average daily rate of $187, up 5.6% from 2011.

81%

Occupancy rate for Center City hotels on weekends in 2012. Saturday night was the busiest night of the week at 85% and Friday night occupancy was the strongest in years at 76%.

HOTEL NUMBERS FROM GPTMC, SELECT CHICAGO

73.4%

Overall occupancy rate for Center City hotels in 2012.

Chicago hotels had a 75.2% occupancy rate, a 4.2% increase over 2011.

52%

s sumer of con e g d a a t h n e Perce gs hav ay blo buying ir who s e t on th c a p an im ns. decisio

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