Region's Business January 2, 2013 by Independence Media

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REGION’S BUSINESS

PHILADELPHIA EDITION

A JOURNAL OF BUSINESS AND POLITICS

CENTER CITY’S

RETAIL REVIVAL The pace of development in Center City is picking up. AxisPhilly looks at what’s happening on the retail front, with new stores opening and the promise of more.

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CONTENTS

“Buy only because something excites you, not just for the simple act of shopping.” ” — Karl Lagerfield

Center City’s Retail Revival

1900 Arch Street Up to 16,000 SF Retail Space Outdoor Seating Spring 2014 Delivery

17 Dept. Of Commerce, Alliance

Committed To Philly Retail

4 8 18 20

Weekly Briefing Political Commentary

Coming To Terms With America’s Interminable Problem

Real Estate News

Q&A: David Gloss, Here’s Your Chance

PRESIDENT AND PUBLISHER James D. McDonald PHILADELPHIA EDITOR Rich Coleman BUSINESS EDITOR Michelle Boyles CONTRIBUTORS Eric Boehm, Charlie Gerow, Don Lee, Scott Staruch, Tim Holwick, Sandy Smith, Judy Weightman, Juliana Reyes, Brandon Baker, Christopher Wink PROOFREADER Denise Gerstenfield ADVERTISING DIRECTOR Larry Smallacombe

Independence Media Corp. 350 Sentry Parkway, Building 630, Suite 100C Blue Bell, Pa. 19422 Email: feedback@regionsbusiness.com Advertising: advertising@regionsbusiness.com Online: regionsbusiness.com Facebook: /RegionsBusiness Twitter: @RegionsBusiness Subscription & Advertising Information: (610) 572-7109 Copyright 2013 Independence Media Corp. All rights reserved. Use of material within without express permission of publisher is prohibited. Region’s Business is published weekly on Thursdays and online at www.regionsbusiness.com. The publisher makes no representations or warranties regarding the advertising appearing in its pages or its websites.

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DEALBOOK

Wawa CEO: Builds Faster In North Jersey Florida Than In Northeast FINANCE

Bank To Enter Philly

The Philadelphia Business Journal reports that Team Capital Bank, a Bethlehem-based startup with two of its 12 locations in Bucks County, recently agreed to be acquired by Provident Financial Services in Jersey City, N.J. The $7.3 billion-asset Provident will pay $122 million in cash and stock for the $949 million-asset Team Capital. Team Capital, which opened in 2006, will merge into Provident subsidiary, The Provident Bank. The combined bank will have $8.2 billion in assets and 90 branches in 13 counties in New Jersey and Pennsylvania.

Wawa expansion may be heaviest in Florida for 2014, as demand in the area is growing — and the process of building in the area is easier. Chris Gheysens, Wawa CEO, told the Tampa Bay Business Journal: “It’s easier than in the Northeast. It takes at best three years from when we buy a piece of land to when we can start construction” in the Northeast, he said. “That’s measured in months in Florida.” The 2013 plan was 50 stores corporately, he told the Business Journal. Thirty-three of those stores were built in Florida. Twelve of the 25 stores planned to open in 2014 will be in the Tampa Bay area.

FLGov.com

PHARMACEUTICALS

Merck Cutting More Montco Jobs Merck & Co. Inc., is eliminating another 152 jobs based in Montgomery County early next year, according to the Philadelphia Business Journal. The North Jersey pharmaceutical company filed a notice about the layoffs with the Pennsylvania Department of Labor and Industry. The layoffs will become effective February 3, 2014. Merck disclosed last month, in a filing with the state, that its was cutting 500 jobs at its West Point plant between Dec. 23 and Jan. 4. The job cuts involve sales reps based in Upper Gwynedd and are tied to Merck selling the rights to Saphris, a drug used to treat schizophrenia, to Forest Laboratories for $240 million earlier this month.

2 JANUARY 2014 REGIONSBUSINESS.COM

WEEKLY BRIEFING

14% Of City’s Early Childhood Education Programs Are Deemed “High Quality” BY JULIANA REYES While Philadelphia lacks high-quality early education programs all across the board, some neighborhoods need more of these high quality programs than others do, according to a report. Only 14 percent of Philadelphia’s more than 2,000 early childhood education programs are high quality, according to an analysis by Azavea and the Delaware Valley Association for the Education of Young Children. “High quality” refers to ratings given by state and regional associations like DVAEYC and the state’s Office of Child Development and Early Learning. Out of 2,052 early childhood education programs, 58 percent have no quality rating, said Lena Ferguson at a presentation this summer. Ferguson, a recent graduate of Bryn Mawr College, spent the summer as a fellow at Callowhill mapping firm Azavea. Each summer, Azavea holds a “Summer of Maps” program that pairs local college students and nonprofits looking for geospatial analysis. Using DVAEYC data on the city’s early childhood education programs, as well as city and census data on other childhood risk factors (access to farmers’ markets and healthy corner stores, poverty levels and more), Ferguson created the map below. Councilwoman Marian Tasco‘s district, the ninth district covering parts of Northwest Philadelphia, has the lowest amount of high quality early childhood education programs, according to Ferguson’s analysis. Only six percent, or 18, of the 299 programs in the ninth district qualified as high quality. In contrast, the Council districts with the highest amount of high quality programs had 23 percent of their programs rated high quality. Those were Councilman Mark Squilla‘s first district, covering the river wards and Chinatown, and Council President Darrell Clarke‘s fifth district, covering North Philadelphia and Center City. DVAEYC gave copies of the reports to each City Councilperson, Ferguson said. This article was originally published in Technical.ly Philly at http://technical.ly/philly/.

The Park Movement Of The 19th Century

marked by sculptures, frequently of angels, or were designed to look like Roman ruins or temples, all to give the feeling of a place of beauty. Tyson Gardner, a preservationist with Fairmount Today’s urban parks were born out of the ‘English’ picturesque garden design movement of the 19th Park and the Philadelphia Department of Recreation, century. In the 1900s, landscape design moved away is the guide and site manager for Laurel Hill Mansion. For the past five years he has also been researchfrom formal geometric rationale, to the romantic, natural forms with elements added to evoke the ing the families and other historical aspects of the ancient and the picturesque. Houses of Fairmount Park. This new landscape design also created the cemGardner spoke about “Angels in the Garden” during etery which replaced the church graveyard in the a lecture at the Community Garden Club at Wayne city. The cemetery was now parklike, the graves were in November. Check out the video of the presentation

BY JANE GOLAS

below. His book on the aesthetic experience of the garden (rural) cemetery has been in the works for sometime, an interest he has pursued since college, where he studied thanatology (death and dying), and with his graduate work in aesthetic philosophy, (aesthetics) and theology. Mr. Gardner also leads tours of historical sites and structures in Philadelphia for the AIA and the Preservation Alliance. This article was originally published in Plan Philly at http://planphilly.com/.

2 JANUARY 2014

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WEEKLY BRIEFING

BUSINESS

Loews Corner Space To Become ‘Speakeasy’ Come Spring 2014 While the Loews Philadelphia Hotel has temporarily relocated its lobby and restaurant to its 33rd floor, the makeover of the actual lobby and restaurant proceeds apace at 12th and Market streets in Center City. Signs recently appeared announcing the identity of the restaurant that will replace Sole Food in the space that had housed a dress shop when the building was home to PSFS.

A reader informs us that the new restaurant, to be called Bank & Bourbon, will have the atmosphere of a speakeasy. Architecturally speaking, we’re curious to see how this is going to play out. The appeal of the speakeasy is its secretiveness: You have to know where it is, for it doesn’t advertise itself, and it usually presents no identifiable face to the public: there’s a door but no windows, you knock on the door, and if you know the password, you’re in. This space, on the street level of the first International Style building in the United States, is the antithesis of all that: it has a huge expanse of floor-to-ceiling glass fronting it, meant to showcase what’s going on inside. How the architects working on the Loews street floor makeover reconcile these two conflicting design imperatives will be interesting to see. We will have to wait until April to see it, though. That’s when work on Bank & Bourbon is set to be complete. This article was originally published in Philadelphia Real Estate Blog at http://blog.philadelphiarealestate.com/.

Bruised And Battered BY TOM FERRICK Wikimedia Commons

With the Great Recession behind us, Philadelphia is like a boxer who just went 10 rounds. The fight may be over, but the poor guy is still woozy and has a lot of painful bruises. While some aspects of the recession did not hit the Philadelphia hard – for instance, real estate prices did not take a dive here – the city has emerged from the economic downturn if not wiser, then certainly poorer. Stories about the pain caused by the recession can be found in every neighborhood, but when it comes to numbers the best source is the U.S. Census Bureau. Each year, the bureau does a survey of millions of Americans to find out basic information about their lives. It is called the American Community Survey. Think of it as a detailed poll with a huge sample. Like all polls, it has a margin of error, but it provides the best snapshot available of the nation, the states and local communities. The ACS for 2012 was released last week. I compared some of the data to the ACS of 2007, the year before the recession began, to get a before and after comparison. Here is the takeaway: – The number of people who are poor increased substantially. In 2007, the census counted 333,000 persons living in poverty. In 2012, there were 405,000. This is an increase of 72,000 people, a huge jump. The poor are always with us in Philadelphia, but the number had been stable, ranging from 310,000 to 340,000 during the last 25 years. Beginning in 2008, though, it took a huge leap and climbed until it reached a peak of 423,000 people in 2011. If there is any consolation, these latest numbers show a decline. – Income has stagnated. During the recession, while some fell into poverty, other households went from two workers to one, people saw hours cut or wages frozen. As a result, median household income declined. It was $39,400 in pre-recession 2007, using inflationadjusted numbers. It was $36,000 in 2012. This decline in household wealth hurt those at the bottom of the income ladder most . Viewed in the aggregate, Philadelphia is a majority poor/working class city, with 63 percent of households earning under $40,000 a year. – Lack of jobs is a persistent problem. It’s almost hard to believe, but in pre-recession 2007, our unemployment rate was a low 4.3 percent, according to the Bureau of Labor Statistics. Up and up it went during the recession, reaching a peak of 8.1 percent in 2012. So far this year, it has averaged 7.4 percent. Again, another sign the economy is kicking back into gear, albeit a low gear. – Not everyone was a loser. Some Philadelphian’s escaped the recession without a scratch; they kept their jobs, their income rose. The number of households with income of $100,00 or more a year, increased

from 62,000 in 2007 to 75,000 in 2012, the census says. That is a 22 percent rise. These numbers are not adjusted for inflation. – The number of foreign-born immigrants continued to increase. The recession did not stop the inflow of immigrants from Asia, Africa, Latin America and Europe. We had 161,300 foreign-born residents in the city in 2007. This rose to 185,000 as of 2012, a 15 percent increase. In terms of racial mix, the immigrant population is: white (34%) and Asian (34%), black (22%) and Latino (16%). I don’t want to make this a litany of bad news. Despite the downturn, “Eds and Meds,” the city’s biggest economic sector continued to grow and add jobs. Recently, new construction — frozen at a standstill as of 2008 — has resumed, with new commercial and residential projects underway. Center City is beginning to see a revival of its retail sector, as Carla Robinson reports in our new centerpiece. (See page 15) To mention one more trend, it is hard to know if this is an effect of the stress families underwent during the recession or some other broader demographic forces at work, but the number of married-couple families declined 11 percent between 2007 and 2012: it went from 165,000 to 153,000. As of last year, the number of married couples with children and households headed by a single or divorced parent were roughly equal: 154,319 couple-headed families vs. 153,561 single-parent families. When it comes to families with young children — those under 18 — single-parent households are in the majority. There are 73,000 single-parent households with children under age 18, compared to 56,000 mother-father families. This is not a surprise because Philadelphia has a high incidence of out-of-wedlock births. The census tells us that 60 percent of the women who gave birth in 2012 were unmarried. In sum, in terms of economic effects, the worst appears to be over. But no one wants to see a rematch of this fight. This article was originally published in Axis Philly at http://axisphilly.org.

2 JANUARY 2014

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WEEKLY BRIEFING EXECUTIVE BOOKSHELF

WHO TO FOLLOW

Knowledge @ Wharton @knowledgewharton Knowledge@Wharton is the online business analysis journal of the Wharton School at the University of Pennsylvania. knowledge.wharton.upenn. edu RT @knowledgewharton: The Perfect Storm: Brazil’s Economic Climate in the Wake of Social Unrest: http:// bit.ly/Jax8R1 RT @knowledgewharton: From Jugaad to Justice: Endemic Corruption and the Possibility of an Indian Spring: http://bit.ly/JaxxTz

Brick By Brick “Brick by Brick: How LEGO Rewrote the Rules of Innovation and Conquered the Global Toy Industry” tells the saga of how LEGO’s management innovated its way to success with lessons that can be applied to virtually any business. Author David Robertson examined how LEGO, on the brink of bankruptcy, was saved by a new management team. One Amazon reviewer said: “Written in a very pleasant style, it provides an indepth account on Lego, based on a five-year extensive study by the author David Robertson. It’s highly inspirational, excellently documented and very convincing.”

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Discount Tickets Available For Philly Cooks For a limited time, discount tickets are available for Philly Cooks, an event that brings over 40 of the city’s best restaurants together at the Marriott Downtown. Until January 10, general admission tickets to the big event will be $75. After the 10th, tickets will rise to $90. Restaurants participating in the event include: — Alla Spina — Federal Donuts — Circles Thai — Bufad — Fork — Fountain — Pizza Brain — American Sardine Bar — South Philly Tap Room.

2 JANUARY 2014

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

Made In PA: Lawmaker Pushes Bill Touting Local Goods BY ANDREW STAUB The Christmas shopping season is over, but next year state Rep. Neal Goodman wants people to buy Pennsylvanian. Goodman has introduced popular legislation that would create a “Made in PA” program to encourage Pennsylvanian’s to buy products made in their own state. Goods that meet the legislation’s qualifications would receive a trademarked “Made in PA” logo. Goodman, D-Schuylkill, introduced his legislation in the middle of the holiday shopping season, saying he was “convinced” it could help boost the Keystone State economy. If the legislator had to choose between two products, and one was made in Pennsylvania, he would buy locally, he said. “And I’m sure a lot of consumers would feel the same way,” he said. The thought struck Goodman when he noticed products made in Pennsylvania while shopping at home-improvement giant Lowe’s. People may recognize that Hershey and Crayola products are made in the state, but they might not know about something more obscure, he said. Goodman hopes that changes with his legislation. There’s a spinoff, he said, thanks to the prescribed creation of a database of Pennsylvania-made products.

To state Rep. Eli Evankovich, co-chairman of the House Manufacturing Caucus, that data would offer a networking portal for businesses across the state. Companies could search the list and might be surprised to learn they need not look far to find the products they need, he said. “You may not know that there’s somebody two counties over that you can buy the same product from,” said Evankovich, R-Westmoreland. Available on the Department of Community and Economic Development’s website, the list would be updated every three months. Goodman’s legislation would expand upon the PA Preferred program that began in 2004 and promotes food and agricultural products grown, produced or processed in Pennsylvania. “It’s really taken off,” Goodman said. Federal trademark laws would not allow the state to simply place the blue-and-gold PA Preferred logo on other products, leading Goodman to seek a separate designation. The legislation has already gained 90 sponsors. It also has gotten support from Darlene Robbins, president of the Northeast Pennsylvania Manufacturers and Employers Association. She said it would give the state a “sense of pride” and even came up with her own version of “Twas The Night Before Christmas” that featured Pennsylvania-made products including chocolates, bird seed and even

One lawmaker wants to draw attention to goods made in the Keystone State. her own pillow. “People don’t realize … that you can purchase competitively priced products that are manufactured in Pennsylvania,” she said. Rick Bloomingdale, president of the Pennsylvania AFL-CIO, sees the “Made in PA” program as more than just a badge of honor. “Like ‘PA Preferred’ has helped Pennsylvania farmers, this program will give our manufacturers a boost in sales and in new jobs,” he said. Now that the bill has been introduced, Goodman hopes to have a hearing when lawmakers return after the holidays, he said. Andrew Staub is a reporter for PA Independent and can be reached at Andrew@PAIndependent. com. Follow @PAIndependent on Twitter for more.

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CITY COUNCIL

Mayor Nutter Signs Philadelphia Land Bank Bill

Timothy Holwick is a freelance writer covering Philadelphia government.

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

On December 18, 2013, Philadelphia City Council’s long and contentious journey to creating a land bank concluded as Mayor Michael Nutter signed Council’s hard-negotiated bill into law. The bill was the culmination of hours of hearings and weeks of negotiation among city council members, chiefly in relation to Philadelphia City Council’s involvement in the land bank’s dealings. In the end, it was decided that council should approve the sale of vacant property. Early estimates indicate that the land bank may be operational by the end of 2014. In order to get up and running, the land bank will need to be incorporated, stake its claim to city funding during next year’s budget process, and begin acquiring land from the web of city agencies that currently own it. In addition to those steps, the land bank must develop its strategic plan for Council to review. On the matter of the plan, the bill is currently written to require this plan be drafted within one year of passage. The requirements of the strategic plan are outlined in great detail in the text of the bill. In short, the land bank administrators must analyze market conditions

and trends in neighborhoods where the land bank holds, or is likely to hold, property. The plan must also include an inventory and mapping of vacant property, in addition to a five-year plan for determining a

WHOEVER IS APPOINTED TO THE GROUP RUNNING THE LAND BANK HAS QUITE THE TASK AHEAD OF THEM.” proper disposition for this property. In the creation of its goals, the land bank is to sort vacant properties into census tracts and create recommendations for how each tract should be used. In other words, whoever is appointed to the group running the land bank has quite a task ahead of them. The current system for disposing of vacant property in Philadelphia is a mess of various city agencies. In Council President Darrell Clarke’s words, “now comes the difficult

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work of reorganizing an aging, ineffective bureaucracy.” While the setup of the land bank may be complete by the end of 2014, the task of consolidating Philadelphia’s property will not have a timeline until the land bank’s strategic planning team has an opportunity to dig into an analysis of the current vacant property system in Philadelphia. For now, the bill has received Mayor Nutter’s official sign of support: his signature. The mayor’s administration will play a key part in providing the funding and resources necessary to legitimize the land bank and giving it the tools to pursue its goals. The public will also have its input as hearings will occur to discuss topics related to the strategic plan. It is a historic day for Philadelphia in terms of altering its urban planning strategies concerning vacant property, and many will be watching to see if any efficiency or improvements are achieved with this change. For more news on City Council, visit http://philadelphia.regionsbusiness. com/bloggers/

2 JANUARY 2014

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

A Look Back At Business And Politics In 2013

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.

Auld Lang Syne’s last strains have faded, the Mummers taken their final strut and champagne glasses are getting washed. It’s time to take a final look at the business and political year past and a quick look at the one ahead. 2013 was a year marked by an increasingly deep philosophical and political divide in both Harrisburg and Washington. The run-up to the 2014 mid-term elections exacerbated this pervasive tension. In Harrisburg several issues dominated the headlines and paved the way for the 2014 gubernatorial race. Governor Corbett will stand for re-election on the theme of “promises kept.” His record of tackling special interests to keep his promise to control state spending and not increase taxes will be at the center of the campaign. Promoting two consecutive state budgets that cut spending was not tailored to increase his personal popularity. The dip in Corbett’s poll numbers was predictable. Ultimately good policy is good politics. By doing the right thing and letting the political chips fall where they did, Governor Corbett not only created a pathway to prosperity (and nearly 150,000 new jobs in the process) but also built a solid foundation for his re-election campaign. Meanwhile at least eight Democrats have announced candidacies for Governor. Despite the crowded field there is constant buzz about the potential entrance of even more--hardly a ringing endorsement for the current field. As they try to distinguish themselves, the one theme each Democrat stresses is that Governor Corbett has not taxed enough or spent more of other people’s money. Several issues highlight this divide on taxes and spending between Governor

Corbett and his Democratic challengers. First there is natural gas. While the Democrat State Committee is officially on record as supporting a moratorium on natural gas development in Pennsylvania, most of the candidates for governor merely want to impose massive new taxes on it. The old economic maxim that “if you tax something you get less of it” suggests that approach could kill the goose just as it has begun to produce golden eggs. It’s also worth asking how you wring tax dollars out of an industry put out of business by a moratorium. The other is education. The Democratic candidates for Governor are falling over each other promising to reverse Governor Corbett’s alleged “cuts” in education. Each has his or her own idea of new ways to take money from workers to pay for their plans. This despite the fact that Governor Corbett is spending more on basic education than any Governor in history. Additionally the Democratic field is having a difficult time explaining anything beyond the formulaic “more spending means better education.” The coming campaign will undoubtedly force them to identify which education programs produce results and which ones fail. Governor Corbett’s ambitious legislative agenda for 2013 suffered a setback when the legislature failed to privatize the state’s Byzantine liquor sale system despite historic passage in the House. But the Governor put away criticism that he couldn’t get things done in the General Assembly with passage of a major transportation funding bill. Passed with significant bi-partisan support it will not only improve public safety but stimulate economic growth. In the closing days of the year the State Supreme

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Court threw a curve ball at the other two branches of government when they ruled that certain provisions of Act 13, the landmark bipartisan legislation that balanced individual property rights, municipal governments and environmental concerns, were unconstitutional. The Act was challenged by several local governments who argued that their purview over environmental and land use issues had been improperly taken away. Uncertainty now reigns as lawyers for both state and local government, interest groups and the industry sort out the effects of the court’s decision and craft their respective strategies. The fallout promises to be a major issue in 2014 and some predict the decision may affect much more than the natural gas industry, including casinos, landfills and prisons. Another year-end shift was the Administrations announcement that they would allow the bid of a British firm to manage the state’s lottery system to expire. The door was left wide open for a new bid process in the New Year and many observers expect the issue to be raised again with a more solid base the next time around. With control of the state legislature also at stake in 2014 many observers are looking at recent retirement announcements in the State Senate. The senate has been in Republican control for twenty years. But their margin was reduced by three seats in 2012 and a similar loss in 2014 would cost them control of the upper chamber. 2014 will be a watershed year for Pennsylvania. The state’s business climate and ability to attract investors, create jobs and expand existing industry will be significantly impacted by the actions of the General Assembly, the elections for Governor and the legislature and the fallout from the Court’s decision on Act 13.

2 JANUARY 2014

LEGISLATIVE UPDATE

REGIONSBUSINESS.COM

PA Supreme Court Finds Fault With Act 13 Provisions BY SCOTT STARUCH

On Thursday, December 19, the PA Supreme Court said certain provisions of Act 13 are unconstitutional, thereby enabling local governments to enact oil and gas drilling Reform The Pennsylvania House of Representatives had its final ordinances. The Court said, “That Pennsylvania deliberately chose a voting days of 2013 on December 16 and 17. Dominating the House agenda was legislation to amend the Pennsyl- course different from virtually all of its sister states speaks vania Constitution to provide for a reduction in the size of to the Commonwealth’s experience of having the benefit of vast natural resources whose virtually unrestrained the Pennsylvania General Assembly. Following two days of extensive debate, the House exploitation, while initially a boon to investors, industry, passed House Bill 1234 and House Bill 1716. HB 1234 and citizens, led to destructive and lasting consequences amends the Pennsylvania Constitution to reduce the not only for the environment but also for the citizens’ qualsize of the House from 203 members to 153 members; ity of life.” In reaction to the decision, Governor Corbett said he and HB 1716 reduces the size of the Senate from 50 to 38 members. Following the legislations’ passage, Speaker of was “disappointed that the Supreme Court invalidated the House Sam Smith (R-Jefferson/Armstrong/Indiana) some key provisions of Act 13. Act 13 was a bipartisan said, “A smaller legislature means state government will be accomplishment between the Administration and memmore productive and more responsive. This bill will bring bers of the General Assembly, which raised the bar on a greater level of understanding between the people craft- environmental protection standards while respecting the ing legislation. The end product will be more responsive rights of local governments.” Marcellus Shale Coalition President Dave Spigelmyer to the needs and concerns of the people of Pennsylvania.” responded, saying, “We will continue to collaborate with communities across the Commonwealth, today’s decision Energy & Environment Last week Shell Chemical LP announced it was extend- is a disappointment and represents a missed opportunity ing its land-option agreement for its proposed ethane to establish a standard set of rules governing the responcracker in Beaver County. Governor Corbett said the sible development and operation of shale gas wells in “announcement is another positive indication for Shell’s Pennsylvania.” proposed plant in Beaver County and I am committed to working in a bipartisan way to keep this multi-billion dolTransportation lar project moving forward.” News stemming from the comprehensive transporta-

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tion funding package passed in November (HB 1060) continues to materialize throughout the state. This week, an article in the York Dispatch reports that about 64 percent of York’s Rabbit Transit fleet will be past its useful life within the year. Rabbit Transit CEO Richard Farr said the transportation package “couldn’t be passed a moment too soon.” Farr hopes to convert their fleet from diesel to natural gas and renovate Rabbit facilities, as well as create compressed natural gas fueling stations. And the Times Reporter cited the benefits many rural areas will see in the form of funding for dirt and gravel roads. Pa. has more than 20,000 miles of unpaved public roads, and the transportation bill included an increase in funding to $35 million, which is seven times more than seen in previous years.

Election 2014

On Monday, State Senator Bob Robbins (R-Mercer) announced that he will retire at the end of his current term. In announcing his retirement, Robbins said, “While the decision to retire has been a difficult one, I now look forward to spending more time with my family and friends as I move into the next phase of my life.” Robbins has served in the General Assembly since 1982. State Representative Michele Brooks (R-Mercer) may consider seeking the seat, and Michael Muha, an attorney, has announced his intention to run as a Democrat. Contact Scott at sstaruch@quantumcomms.com for additional information on any of the above news.

2 JANUARY 2014

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INNOVATION

Six Ways Entrepreneurship Is Like Jazz

Stephen Goodman, in addition to being a jazz pianist, is a partner in Morgan Lewis’s Business and Finance Practice, where he founded the firm’s Emerging Business and Technology Practice.

This article was originally published on the Wharton Entrepreneurship Blog at http:// beacon. wharton.upenn.edu/ entrepreneurship/

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 a lawyer dedicated to helping early stage entrepreneurs develop and polish their value propositions, I have been struck by the confluence between entrepreneur rap sessions with potential investors and jazz jam sessions (given my parallel career as a professional jazz pianist for over half a decade). My thesis for this piece is that the optimum creative and integrational modalities of a quality jazz jam session may be instructive to prospective and practiced entrepreneurs. 1) Melody. The mission statement for a venture is tantamount to the melody line of a jazz tune, which is to be subject of improvisation. If the melody is not crisply stated the player loses his/her audience—the improvisation, instead of extrapolating on the theme, comes off as random and unstructured sounds. The first paragraph of an Executive Summary expresses the melody, which grabs the listener or reader, and the rest of a Business Plan builds on those themes.

entrepreneurs do not listen carefully to the reaction of the potential investors they are addressing. Instead of welcoming potentially revealing questions or concerns and acknowledging them, they become too stuck in their scripts to turn a performance into more of a constructive Q&A session — with no exchanging of licks in their jam session, these entrepreneurs plunge onward with the notes of their script.

5) Improvisation. Many jazz musicians (like me) do not read music—the wiring indescribably enables the simultaneous development of themes in the mind, which are instantaneously translated into notes on the piano. A jazz jam session is a good test, where a musician may find himself/ herself having a tune called by the leader that he/she has never played before. The most impressive entrepreneurial performances do not portray an ability to deliver a rehearsed compendium of “notes,” but reveal performers who are quick on their feet in response to unanticipated challenges, to which they unhesitatingly respond because of their mastery of the business model and an informed intuition — some would call this an ability to “think outside the box.”

6) Harmony. I have heard acrobatic jazz soloists who do not seem to know when it is time for them to stop soloing and 2) Audience. The jazz musitake on a role as an cian is playing to an audience, accompanist to other and energy and credibility players or engage in springs from knowing and resoa harmonic dialogue nating with that audience, just with them. (This as an entrepreneur making a is akin to issues of presentation needs to know “listening” and “inteenough about the angel group or fund manager to which he/she gration” mentioned is presenting to be responsive in above.) I have too advance to known interests/“hot often heard a CEO buttons” of the listeners/readers giving a “joint” preof their presentation. sentation with the other members of the 3) Listening. A skilled jazz management team musician has to be as acute a where the CEO does listener as he/she is a performnot harmonize with them or gives them er—it is the integration with the other musicians that creates harmony 4) Spontaneity. Jazz is composition on little or nothing to say. It places into and enhances the blend into a cohesively the spot. When well-performed it demon- question the capacity of the CEO to be a pleasing emanation from the aggregation strates the musician’s ingenuity, resource- “team builder” and makes the CEO seem of players. He/she also has to listen for fulness, intuition, creativity, capacity to tone deaf. I have often found jazz to be an anaaudience reactions. synthesize and integrate—and do so with Entrepreneurs often go off on their spontaneity. logue for effectiveness in entrepreneurial beloved set-piece business and industry I have heard VCs describe similarly the settings, and the above is my attempt at a descriptions and do not include or listen entrepreneurial athlete who creates a pre- rendition designed to integrate a splotch to others in the room — including mem- sumption of investability. of synchronous probative data points. That’s jazz!! bers of their own team. Such tone deaf

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NEWS

Electronic Book Borrowing Up 33 Percent Philadelphians are borrowing eBooks so much that the Free Library is changing its policies to ensure that everyone gets a chance to read the books. According to a Free Library blog post: — The loan period will now be 14 days for all OverDrive formats. If there are no holds on your item, you can renew it (or put a hold on it); and you can still return items before they are due. — The number of OverDrive items that can be checked out at the same time will be six (6). eBook downloads are up 33 percent from this time last year, the Free Library said in the blog post. Last month, Free Library members checked out more than 45,000 eBooks. — TECHNICALLY PHILLY

Edtech Startups Can Apply To Competition Win $25,000 to get your edtech business moving. The annual Milken-Penn GSE Education Business Plan Competition, run by Penn’s Graduate School of Education, is now accepting applications. First place wins $25,000 and second place wins $15,000. Applications can be filed at http://nestcentral.org/ submissions by January 15. Autism Expressed, the startup focused on teaching digital literacy to autistic students, won first prize last year. — TECHNICALLY PHILLY

INNOVATION

FastFig: Microsoft Word, But For Math Business: FastFig Founder: Brian Peacock Contact: jhotaling@fastfig.com

BY BRANDON BAKER Figure this: Brian Peacock spent years studying civil engineering at Lafayette College in Easton, Pa., before realizing there had to be a better way to solve a math problem — algebra, calculus, etc. — than scribbling and scrawling on a piece of paper. So, like any instinct-driven entrepreneur, he did something about it: He created FastFig. In short: It’s Microsoft Word for math. “Everything was done on a computer – English, history, everything – and yet he was still having to solve all of his word problems using pencil, paper and a 1980s TI calculator. He was frustrated,” said Jay Hotaling, CEO of FastFig (Mr. Peacock is CTO). “Then [in January] we realized there was a hole in the market where this wasn’t just about people with high-end issues – people want to make mathematics easy. So we said, ‘How can we make it accessible for the general user?’” The answer was to make the cloud-powered platform that’s accessible to everyone from “third grade students to professional algorithm designers.” The company will sell its software to large companies and organizations, as well as school districts and colleges across the country – “Anywhere mathematics is needed,” Mr. Hotaling said. After that, it hopes to supply paid content add-ons for its existing users. “We’re striving to make digital math communication better, easier and more widely accepted. This year, we’d love to have growth of maybe 100 times our userbase. We’re ambitious,” Mr.

Jay Hotaling

Hotaling added. “The market’s there, and there’s a need for it.” FastFig, which launched in October 2012 and is now based out of Eighth and Callowhill Streets’ Venturef0rth coworking space, was first jumpstarted by DreamIt Ventures’ Austin program in November 2012 and is sustained by an additional friends-and-family and angel-investment round of funding. It launched its FastFig Notebook product in August, and will unveil a new beta in the coming weeks. FastFig will take an additional round of funding this year for research and development, along with operational costs.

Initiative To Put 5,000 Panels On 20 Schools BY CHRISTINE FISHER

and budgeting to the vocational aspects of solar energy, like the difference between attaching panels with ballast weights Philadelphia Solar Schools Initiative (PSSI) wants to use versus screws. This year PSSI is working with 30 YouthBuild solar energy and solar energy education to brighten the future students - 15 students in one five-week session and another 15 of 20 Philadelphia public schools and nearly 1,000 students. students in a second five-week session. Next year, PSSI hopes to take their model to the next level. In Next year PSSI, which is already teaching a solar technology course at YouthBuild Philadelphia Charter School, wants to addition to the YouthBuild course, PSSI plans to work with stuinstall 5,000 solar panels on the rooftops of 20 public schools dents to install 5,000 solar panels at 20 Philadelphia schools. and to provide solar energy education programs at each of Solar States will sell each school the energy its panels produce those schools. at a rate guaranteed lower than the schools are currently paying The initiative is being led by Solar States, a South Kens- for electricity. Through Clean Currents, the other PSSI partner, ington-based solar energy provider that Micah Gold-Markel the schools will be able to purchase their remaining energy founded in 2008 with the goal of connecting sustainable energy, needs in the form of windpower. Since PSSI will pay for the solar panel installations - a $1.5 education, and economic development. Shortly after launching, the company worked with Science million infrastructure investment - and then sell the schools electricity at a rate lower than they currently pay, the schools Leadership Academy to develop a solar energy elective. “We saw the power,” Gold-Markel said. “We saw how students, stand to save through PSSI. Education is also a critical comonce they learned about solar energy, they really grasped it.” ponent of the solar project, and PSSI hopes to work with close For the past few years, Solar States has been focusing on its to 1,000 students next year alone. product - perfecting its solar panels and navigating purchase “That’s part of our philosophy - that every solar installation agreements. Now through PSSI, Solar States is back in the is a teachable moment,” Gold-Markel said. classroom, teaching a daily course to YouthBuild students. The This article was originally published in Plan Philly at course teaches everything from business skills like marketing PlanPhilly.com.

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INNOVATION

Harbor Partners Sees 500 Percent Growth BY BRANDON BAKER CEO Jim Sherry of Berwyn, Pa., informationtechnology-company Harbor Partners doesn’t beat around the bush when it comes to dissecting just what landed his team at No. 10 on 2013’s Philadelphia 100 list. In fact, the company’s secret to success, he said, has less to do with “innovation,” and more to do with being a finely brewed latte in a landscape of instant coffee. “I think that, philosophically, like most things in life, and certainly professionally, success comes from being master of the basic fundamentals,” Mr. Sherry said. “So that’s what we try to do here: We give the fundamentals really, really well.” So well, that the company grew 547 percent — read that again for emphasis, it’s a big number — in the past year. Harbor Partners, which has four full-time staff members, provides a three-tiered service offering that includes IT contract staffing, the intention being to custom-match an army of contractors with companies that have skeletally outlined projects in need of being fleshed out — to make IT, as Mr. Sherry puts it, an “enabler” instead of being implemented because

it’s “cool.” He and his co-founder, Michael Restuccia, incorporated the company — which works strictly with regional companies in a 60-mile radius — in January 2010, in the thick of the recession. It’s something Mr. Sherry drew lessons from. “I think starting in that environment helped us — we have to be really on our game all the time. So, when times get a little better, we’re still doing the same things we were doing when times were really tough,” Mr. Sherry said. “It’s always a challenge mentally, but I think companies are a lot smarter, having come through the recession. They can get by with less.” Plans and goals for 2014 are, meanwhile, modest at best. “We’ve been growing pretty significantly year after year, so I’m not putting a number on the growth other than to say we want to have controlled growth where we’re still able to deliver the same kind of services we’ve been delivering,” Mr. Sherry said. “Is that 25 or 30 percent? Sure. I’m sure it is. But I’d rather not put a number on it. It’s the kind of business where you need a long view.” “But if you do the right things,” he added, “the results will follow.”

DIARY OF A STARTUP

SEEKING: New “Diary Of A Startup” Entrants For the past year, Region’s Business has been proud to lend a portion of its margins to four up-and-comers in Philadelphia’s burgeoning startup space — including companies like AboutOne and SpeSo Health, and newcomers like AutoAlpha that, as “Diary” entrant VenturePact might say, learned to “fail fast.” Here, we allow these ambitious founders and CEOs to express the day-by-day goings-on of their startup experience without filter, providing them an outlet to vent and, for readers, a colorful insight into the curious 21st-century world of startup life. But with a new year, comes a new batch of startups: Starting mid-January, we’ll embark on a six-month journey with our third round of “Diary of a Startup” entrants. We welcome submissions from startups of all sizes launched (or about to launch) in the past two years; submissions are printed once a month. Currently seeking: three startups. To inquire about this opportunity, please contact Brandon Baker at bbaker@regionsbusiness.com.

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CENTER CITY’S RETAIL REVIVAL With the Great Recession over, the pace of development in Center City is picking up. AxisPhilly looks at what’s happening on the retail front, with new stores opening and the promise of more. STORY BY CARLA ROBINSON ILLUSTRATION BY DON LEE

16 During this holiday season, Philadelphians are once again hitting the streets in full force, finishing up their gift lists and making last -minute purchases. If they go to Center City, however, their experience is likely to be very different than it has been in the past because shopping there is not what it used to be. For starters, there are a lot more people out — reflecting the fact that Center City now ranks third in the nation in the number of people who live in the downtown area, second only to New York and Chicago. Just as important, there are more, and better, stores. Big shopping is no longer limited to Walnut Street between Rittenhouse Square and Broad Street. High-end national chains like Theory, Madewell and Athleta are opening up along both Walnut and Chestnut on the west side of Broad Street; independent stores pushed off Walnut by higher rents are moving to adjacent streets, and a critical mass of interesting stores can also be found East of Broad Street, a neighborhood now known as “Midtown Village.” People who work closely with retailers and investors say this growth is likely to continue, as Philly’s shopping revival is part of a clear national trend and the city still offers plenty of space to fill. The numbers suggest they’re right. Retail rents have gone up 33.8 percent in the past year, the steepest rise for retail rent in downtown shopping districts among cities anywhere in the country. Just as

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important, the average annual income for all these people now living in Center City has crested $100,000 per household — a tipping point for national retailers. “In today’s economy, an average income of $100,000 is a pretty significant number,” said Jesse Tron, spokesman for the Independent Council of Shopping Center, a national trade group for big retailers. John Conner, president of Brickstone Realty Corp, the company now building 70,000-square feet of new retail space on the 1100 block of Chestnut Street, said the tipping point really happened about 18 months ago, when new census data showing Center City’s new population density and income levels started coming in. “The numbers were pretty shocking,” said Connor. “It suddenly became clear to everyone that Philadelphia is an underserved market, and there are whole classes of retailers who want to be here, and aren’t.” And with the $120 million sale of the Granary Building in Logan Square, institutional investors made it clear they were paying attention. “The institutional financing market has finally found Philadelphia, after all these many years, and we are now seeing a different type of investor,” Connor said. “For a long time, many investors thought of Philadelphia as an Acela stop between New York and DC,” said JohnDavid W. Franklin, senior vice president

at Madison Marquette, a national real estate investment firm that specializes in urban development. “And then all of a sudden everybody realized how affordable it is, and also what a great place it is.” Obviously, these changes haven’t happened at all once. Expansion has happened block by block, often spurred by the addition of a store or restaurant. The corner of 18th —JOHN CONNER, PRESIDENT OF BRICKSTONE REALTY and Chestnut is a case in CORP point. “It was a dead intersection, and then Stephen Starr came in with Continental,” Franklin said. “And suddenly everyone realized it was tures the Milk-n’Honey eatery. “Putting that café there really showed a wonderful block, and look what followed – Allen Edmunds moved in, now that you can monetize the parks – that you have the Camper store, then just a you can take public spaces and make block away you’ll have Nordstrom Rack.” them more vital, things that contribute “I think Camper is particularly tell- to the “buzz’ of the city,” he said. ing,” echoed Stefan Sklaroff, co-owner of Cella Luzuria, a new furniture store Retail jumps Broad Street on the east side of Chestnut Street. The Sklaroff is perhaps the most notable high end Spanish retailer is particularly new example of the fact that this energy focused on design, he said. Its spends a has also crossed Broad Street. The eastlot of money on showrooms and appeals ern side of Center City has historically to a sophisticated “hip” sensibility. more bedraggled than its western counAccording to Franklin, the Center City terpart, and it wasn’t so long ago that District did a game-changing thing when walking 13th Street between Locust and it opened Sister Cities Park, which fea- Chestnut was a depressing, and some-

IT SUDDENLY BECAME CLEAR... THAT PHILADELPHIA IS AN UNDERSERVED MARKET, AND THERE ARE WHOLE CLASSES OF RETAILERS WHO WANT TO BE HERE AND AREN’T.”

AXISPHILLY.ORG

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Dept. Of Commerce, Alliance Committed To Philly Retail “Get In On It,” urges the website of the Philadelphia Retail Marketing Alliance (PRMA). Formed in 2008, this organization often aims to expand the quality and quantity of Philadelphia’s retail selection to enhance the Center City experience for workers, residents and visitors. The organization is made up of representatives from Center City District, the City of Philadelphia Commerce Department, the Office of the City Representative, the Greater Philadelphia Tourism Marketing Corporation, the Philadelphia Convention & Visitors Bureau and Philadelphia Industrial Development Corporation. One of the ways PRMA helps fulfill its goal is by providing prospective retailers with a one-stop shop for information they need to get started in Philadelphia through the website PhiladelphiaRetail.com. The site shares several things, such as: demographic information to pique the potential retailer’s interest; detailed descriptions of some of the city’s most desirable neighborhoods, including Rittenhouse Square and South Street; a list of steps retailers need to take in starting their business; a host of success stories; and, a database of available retail space throughout the city. Also invested in bringing a greater variety of retailers to the city is the Department of Commerce, which is doing everything it can to encourage the growth of

times frightening, experience. Now, with the help of developer Tony Goldman, 13th Street is ground zero for some of the most interesting retail in the city, run by a group of independent store and restaurant owners who call themselves the “Midtown Village” business collective. And that vitality is now turning the corner onto Chestnut. In January, Skarloff opened his high end Cella Luxuria, a 10,000-square-foot furniture store with storefronts on the 1100 blocks of both Chestnut and Sansom Streets. The store, with its focus on sophisticated design and sustainably sourced materials, would be at home in the trendiest districts of either New York or San Francisco. Sklaroff, like Brickstone’s Connor, said he chose Chestnut Street because he sees huge potential. The buildings, many of which were originally designed for shopping, have big footprints, and their facades, now often covered in vinyl or cracking stucco, are elegant. “To me, Chestnut Street should be so much better, and one of the great streets of Center City,” he said. “With Milkboy there at the corner of 11th and Chestnut, Bru, West Elm, all right across the street from Macy’s, there’s no reason this can’t be an amazing spot to be.” Milkboy is a bar and grill; Bru a gastropub and West Elm a furniture store. “You don’t get floor plates like this anywhere else in the city,” said Brickstone’s Connor, whose project on the 1100 block of Chestnut Street will include 70,000-sqaure feet of retail space and 140-feet of storefront. “We’re talking 24,000-square feet of retail space per floor. These are the kind of high quality large format dimensions that appeal to big retailers.” And while the pace of revival may seem slow, it’s definitely happening, now that the effects of the Great Recession are receding. There is word — though it is just rumor now — that Trader Joe’s will anchor the Brickstone Development project on Chestnut Street, which will renovate the old

the retail sector, Ms. Summerville said. It’s her mission as director of commercial investment to help foster continued growth of that sector. To achieve this goal, she attends events such as RECon, the global real estate convention held in Las Vegas each May, to drum up interest among national retail developers. She’s one of the people doing “cold, hard marketing” and “knocking on doors,” she said. She’s listening at community meetings to hear what residents of Philadelphia think their neighborhoods are missing. One of the problems Ms. Summerville’s department is working to correct is its history of keeping its collective lips shut. “We don’t do enough bragging or telling retailers why they should be here,” she said. The Department of Commerce looks for ways to incentivize new retailers to enter the city and helps lower barriers to entry for prospective retailers in a few ways. “We are aware of what our tax structure is. We’re putting in place credits to alleviate some of the burden,” said Ms. Summerville. She named such business-friendly efforts as the revision of the zoning code that went into effect in August 2012, the elimination of a $300 commercial business license fee and the Job Creation Tax Credit. — Rosella Eleanor LaFevre

Oppenheimer Collins Department Store. High-end apartments have replaced the methadone clinic that once occupied the corner of 12th and Chestnut. And all across the neighborhood, a steady conversion of dusty old buildings into upscale loft apartments is bringing more and more new residents. “We have people in here all the time who tell us they just moved in to the neighborhood, into this loft or that, and they need something to hang over their bed, or on their dining room wall,” said Jim MacManiman, co-owner of Absolute Abstract Art and founder of the Midtown Village Business Alliance. “I really credit Goldman for that – he was smart, and made a point of getting creative people into the spaces above the stores. Upstairs in these buildings, there are dozens of web developers, architects and designers,” he said. “And I feel like it’s reached a tipping point for retail. It used to be that you could always pick from half- dozen empty storefronts. Not anymore. It’s finally at that point where you have to wait for something to come open.” Michelle Shannon of the Center City District has spent the last four years leading an effort to market Philadelphia’s retail potential to big investors and retailers with a team that includes the city of Philadelphia’s Commerce Department, Greater Philadelphia Tourism Marketing Corporation, the Pennsylvania Convention and Visitor’s Bureau, and the Philadelphia Industrial Development Corporation. “I feel like years of consistent, and coordinated teamwork are really paying off, and our retail footprint is really expanding,” she said.

Market Street and The Gallery

When it comes to the east side of Broad Street, however, the big wild card has always been what might happen at Market Street’s Gallery, the threeblock behemoth 1970’s-era shopping mall between

8th and 11th Streets that’s currently home to K-mart and Burlington Coat Factory. Despite sitting above a regional rail hub, right next to the Convention Center and Reading Terminal Market with City Hall, Independence Mall, Society Hill and Old City within close walking distance, the mall is hardly a picture of excitement. Owner and developer PREIT (Pennsylvania Real Estate Investment Trust), which recently finished acquiring all the parcels of land that the Gallery sits on, is promising big news for the mall sometime early next year. CEO Joseph Coradino has promised a major renovation that will open the mammoth stretch of concrete with windows to the street, and “transformative” new anchor stores. New development is also promised across the street on the Girard Estate’s property, which spans the entire city block between 11th and 12th and Market and Chestnut Streets. The block was recently purchased from the City Board of Trusts opening that to new projects. Finally, there is still the possibility that big empty lot at 8th and Market streets will be home to the city’s next Casino. Any one of those three developments would be game changer for Market Street, and for Center City as well. Of course, promises are easy. And none of these projects have broken ground. But for those who are immersed in the daily work of putting these deals together, they see a trajectory that’s clearly on the rise. “Look, you’re still going to have plenty of people for whom shopping at King of Prussia is always going to be more convenient,” said ICSC’s Tron. “But there are a number of powerful demographic forces that are driving this revival of interest in downtown urban shopping. And they’re not going away.” This story was originally published in Axis Philly at AxisPhilly.org.

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FINE ESTATES

$3.9M Masterpiece Gwynedd Valley Home A masterpiece home hidden in the heart of Gwynedd Valley. Beautifully designed by sought-after architect Michael Visich, this comfortable, quiet, well-lit six bed, six bathroom home is truly a gem of the Greater Philadelphia Area. Extremely well-appointed, with natural materials used in perfect balance: fieldstone, slate, brick, copper, quarter-sawn hardwoods, marble, limestone, bronze. The exquisite custom millwork throughout complements the fieldstone exterior. The true slate roof of absolute trophy calibre. All amenities included. The home contains a professional chefgrade kitchen, library, movie theater, music room, exercise studio, sauna (never used), wine room, seven fireplaces and much, much more! Fantastic buying opportunity, price is a fraction of the cost to build! Available now. An absolute need-to-see! For more information, please contact Steve DiFrancesco at (610) 347-1000

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REAL ESTATE

‘Ducks Plus’ Modifications Pass Go With NLNA BY SANDY SMITH A brief followup on the latest developments at 818-24 N. Fourth Street in Northern Liberties, the eastern part of the “Ducks Plus” condominium project being built by Onion Flats and designed by its architectural arm, Plumbob: When last we reported on a redesign Onion Flats submitted to the Northern Liberties Neighbors Association for review, the NLNA Zoning Committee in effect told the developer, “Lighten up.” Specifically, the committee objected to what one neighbor called “the Darth Vader look” of the facade and asked that the commercial space on the street level be made more prominent and add safety features to minimize pedestrian risk at the garage entrance. At its Dec. 16 meeting, the committee approved the redesign with the modifications requested by the group, meaning that construction can proceed on the reworked project. This article was originally published on the Philadelphia Real Estate blog at Blog.PhiladelphiaRealEstate.com.

20 Q&A

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DAVID GLOSS:

DOING GOOD IN PHILLY David Gloss, CEO of creative agency, Here’s My Chance, is getting prepared for the Second Annual Philly DoGooder Awards, which motivates nonprofits and for-profits to collaborate with creative personnel in crafting their impact story of doing good in the community. This will be the first year for-profits can be included and nominations can be accepted up until February 1st, with the ceremony itself being held March 12 at Hamilton Hall at UArts. Region’s Business talked with Mr. Gloss about the awards, but also about the trends of the non-profit sector and why “impact sector” will be a more apt name in 2014.

Can you tell us a little about the Philly DoGooder Awards? Philly DoGooder is a celebration of the best impact stories in the region. It’s the first ever local version of the national DoGooder Awards which is a challenge issued by YouTube. We were the first group to set that up. Last year we did it celebrating over 90 local non-profits and created 25 films during our Video Hackathon and we were able to activate over 130,000 people and raise $250,000. It was a really great success. But this year we’re doing the same model where we pay our filmmakers with non-profits, but we’re going to include for-profits as well. That’s the big shift in what’s evolved over the last year or so. If you want to do good things on the planet, a non-profit is great but it’s only a tax-status. There’s so much that can be done in for-profit organizations, so if we can tell those stories, we get a chance to inspire others to take service as part of their mission — whether they’re for-profit or non-profit — to give back to the community.

tions that have bucked the trend of simply donating and are really taking it upon themselves to do some good things.

What are some examples of projects or initiatives that are recognized? What we do is first identify the really unique impact stories. Last year we had a group called Pathways PA that provides workforce development, training, behavioral health for women and families. They came in and had a great story... but at the end of the day that doesn’t get people rallied around the cause and the why. So we created a really powerful film that didn’t just talk about their programs, but told a story about somebody in their community that could be anybody. It was able to garner lots of attention. What we were excited about creating in that was the opportunity to connect with volunteers, donors, supporters, partners — when you have the right asset you can make a huge difference. So, we try to find that right story to get involved and invite those with stories to tell. We also have an individual award component where we recognize emerging DoGooders that are coming out the Millennial generation or established organiza-

What kind of impact do you think non-profits will have in 2014? Are there any trends you see? I think there’s greater collaboration. If you walk away with anything, it’s really dropping “non-profit” and replacing it with “impact sector.” The big shift is forprofit organizations recognizing that they’re problem solvers. They can go after public safety the same way they design the next big, mobile app. That’s the trend to take a look at. The shift is trying to show that there’s an opportunity to really change the game and capitalize on the large market opportunities in a really critical, social impact. So, non-profits are recognizing that they’re becoming more entrepreneurial, entrepreneurs are recognizing they become more social. And there’s a convergence that’s happening in the center.

How did you get involved in setting this up locally? The DoGooder Awards came out of a collaboration with Here’s My Chance and Generosity.org, a local media site that covers the impact sector in Philadelphia. Our collaboration was a really great example of public/private partnerships and organizing the community around a values approach, where we all could benefit and raise awareness for the whole community. Generosity brought in the Foundation Community and United Way, while Here’s My Chance brought in corporate partners like Comcast and Wells Fargo. It was a great example of different sectors getting together, recognizing those in need of better visibility and seeing what different stories were being told within the impact community.

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OPINION

Coming To Terms With America’s Interminable Problem

G. Terry Madonna is director of the Center for Politics and Public Affairs at Franklin and Marshall College

Michael Young is managing partner of Michael Young Strategic Research

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

There’s good news and bad news these days for the Obama administration. The bad news: President Obama’s anemic approval rating has plummeted to 40 percent; the good news, it probably can’t go much lower. But, both the good news and the bad news for Obama isn’t news at all to students of the American presidency. In fact, Obama’s inexorable erosion of political support is a depressingly old pattern in modern American politics. Since World War II, the phenomenon of re-elected presidents losing their support during their second term has become the norm. Obama’s decline is only the most recent example of a fate suffered by most two-term presidents. Consider the record. The final two years of second termers has brought almost unrelieved woe for presidents since Dwight Eisenhower. Lyndon Johnson was elected overwhelmingly in 1964, but by1968, the Vietnam quagmire forced him to withdraw as a presidential candidate. Nixon trounced his opponent in 1972, but by 1974, he resigned facing certain impeachment. Clinton won convincingly in 1996, only to be impeached in 1998. Bush, a 500,000 popular vote winner in 2004 ultimately rivaled Truman for claim to the most unpopular president in modern times. Even Reagan struggled with Iran Contra. Each troubled president encountered unique problems: for LBJ, it was Vietnam; for Nixon, the Watergate cover-up; for Clinton, his personal behavior in office; for Bush, the Iraq War, and now for Obama, health care. But underneath these surface differences lay the common denominator described by one scholar as “the six-year itch:” voters’ patience with the incumbent expires long before the second term does. The causes of the six-year itch are well understood. One is simply time in office. The longer an administration holds power, the more it incurs the costs of governing: poor decisions, policy miscues, staffing changes, and bad behavior bear their bitterest fruit in second terms. Another factor bearing down on ebbing presidencies is the absence of a substantial second term agenda. This lack of exciting proposals is almost endemic to second terms. The big ideas mostly come in first terms. Yet another cause of the six-year itch is the toxic partisanship in contemporary politics. Second term presidents today

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almost inevitably work in a hostile political environment, even while rivals jockey for opportunities to embarrass or harass them. Four years may not be enough for a successful president, but eight years is too much for most presidents. Is there not a happy compromise--a term long enough to be effective, but short enough to avoid painful death watches like the country now endures waiting for Obama’s term to end? Such a compromise does exist and it’s the six-year term: a proposal that would amend the U.S. Constitution to provide a single six-year term for the president and vice president. The six-year term is a good idea, but it’s not a new idea. It was originally proposed in the Constitutional Convention of 1787 and has been advanced intermittently throughout American history. At least nine former presidents have endorsed it, including Andrew Jackson, Andrew Johnson, Rutherford Hayes, William Harrison, and William Taft. In modern times, the six-year term has been advocated by Dwight Eisenhower, Lyndon Johnson, Richard Nixon and Jimmy Carter. Proposals advocating the six-year term usually emphasize its public policy payoffs. Relieved of the need to run for re-election, presidents could tackle those complex national problems which seem so often to elude serious solutions. In short, the six-year term would take electoral politics out of public policy. But an even stronger reason for the sixyear term is that it fits the normal ebb and flow of presidential effectiveness over about six years. Undoubtedly, one of the reasons so

many former U.S. presidents have advocated the six-year term was their personal experience with this inevitable erosion in effectiveness that marks the second term. With so many arguments favoring a six-year term, why don’t we already have one? Sheer inertia is part of the answer. Major institutional change always triggers resistance. We muddle through painful periods like the present Obama interregnum until rescued by a new president and a new day. Then we promptly forget our angst until, almost without fail, it happens again. Beyond inertia, familiarity with the present two-term system causes some to oppose the six-year term. It is the devil we know and some prefer it mainly for that reason. This preference for the status quo carries an enormous cost incurred during the second term of most two termers. When an incumbent president loses the nation’s trust as Obama has done, they almost never regain it. Consequently, President Obama’s present loss of influence means meaningful effort to solve the nation’s most pressing problems must wait until we have a new president. Urgent problems like immigration reform, gun control or reaching a “grand bargain” on budget and debt policy probably can’t be resolved before 2017 at the earliest. This state of affairs is sad and sobering; it is also avoidable. As we hobble through the remaining days of the Obama Presidency, we have ample time to reflect on the costs of the six-year itch. Perhaps in an earlier and simpler time we could afford that cost. Few believe we still can.

2 JANUARY 2014 REGIONSBUSINESS.COM

BY THE NUMBERS

21%

Flickr/See-Ming Lee

decline in store visits during the final week before Christmas, according to a report from ShopperTrak

drop in retail sales during the week ending December 22

30-50%

increase in retail sales during pre- and Black Friday shopping season

$30,000,000

17%

amount of “questionable” federal spending outlined in the “Wastebook,” report released by Senator Sen. Tom Coburn, R-Okla.

increase in Cyber Monday online sales

13%

$1,000,000

increase in online sales between Dec. 15 and 18

price tag of construction of a bus stop in the state of Virginia

$5,000,000 cost of customized crystal stemware

$3,000,000 spent on seminars for NASA employees to understand how Congress works

$1,000,000

grant for the Popular Romance Project, a web/video project celebrating romantic movies, books and songs Flickr/Infrogmation

15%

decrease in overall fitness in today’s kids compared with their parents, according to recent research analyzed by the University of South Australia

Flickr/nomanson

90 seconds

increase in time it takes today’s average kid to run a mile versus 30 years ago

5% Per Decade decrease in heart related fitness from kids age 9 to 17 since 1975

1/3

number of American children age 6 and older who get the 60 minutes of physical activity per day recommended by health experts

25,000,000

children age 9 to 17 in 28 countries from 1964 to 2010 were studied

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