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REGION’S BUSINESS
PHILADELPHIA EDITION
A JOURNAL OF BUSINESS AND POLITICS
CENTER CITY’S
RETAIL REVIVAL Retail in Philadelphia is on the upswing. But after talking to independent store owners, one may wonder: Is it a revival? Is it a shuffle? Or a completely new creation?
FORMER EXEC STUMPS FOR ‘PHILLY RESERVE’ PHILLY TECH HAS EDGE ON SILICON VALLEY
19 SEPTEMBER 2013
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CONTENTS
Center City’s 23 Retail Revival
3 1519 Walnut Street
Former Exec 8 Pushing For NotSo-Radical Idea
4 12 17 35
Weekly Briefing Politics Year Of The Innovator Q&A: Alex Dews
29 36
Fine Estates Commentary
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19 SEPTEMBER 2013
REGIONSBUSINESS.COM
WEEKLY BRIEFING
SEPTA Details Plan to Shrink System Without State Funding Action Without Critical Funding... What Happens to SEPTA Rail Network by 2023
Amtrak to: New York Boston Montreal NJ Transit to: New York New Jersey Points
Lansdale Lansdale
Glenside
Elm St Norristown
Jenkintown-Wyncote
Paoli Daylesford Berwyn Devon Strafford Wayne St. Davids Radnor
Bryn Mawr Bryn Mawr
Fern Rock Trans. Ctr.
Norristown Trans. Ctr. Conshohocken Miquon Manayunk
Haverford Ardmore Ave Ardmore Jct Wynnewood Rd Beechwood-Brookline Penfield Township Line Rd Parkview
69th Street Trans. Ctr.
Eddington
Fern Rock T.C.
Cornwells Heights
Frankford Trans. Ctr. Torresdale
MargaretOrthodox Church Erie-Torresdale
Logan
Ivy Ridge
Villanova Rosemont Bryn Mawr Haverford Ardmore Wynnewood
Bristol Croydon
Melrose Park
Olney T.C.
Spring Mill
Wayne Jct.
Wissahickon East Falls Allegheny
Narberth Merion Overbrook
N. Phila (TRE)
Susquehanna-Dauphin Cecil B. Moore
30th Street Station (Amtrak/NJT)
Millbourne 63rd 60th 56th 52nd 46th 40th
34th
30th
Girard Fairmount Spring Garden Race-Vine
Suburban Station
15th
Wyoming Hunting Park Erie Allegheny
North Philadelphia North Broad Temple U. Berks
Capital Call Line Private Equity Group Wayne, PA
Front
Spring Garden
13th 11th 8th
5th 2nd
City Hall
Lombard-South Ellsworth-Federal
LEGEND
Tasker-Morris Snyder
Market-Frankford Line
Oregon
Broad Street Line
AT&T Sports & Entertainment Complex
Bryn Mawr High Speed Line Regional Rail Lines
(end shows route destination)
Free interchange
(no transfer needed between transit services)
Pedestrian Connection
(additional fare needed for connecting service)
Wheelchair accessible station
Delaware River
INFORMATION Customer Service: TDD/TTY: Website:
©2013 Fox Chase Bank. All rights reserved. This announcement appears as a matter of record only.
215-580-7800 215-580-7853 www.septa.org
© SEPTA 2023
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Trenton Transit Center
River Line to Camden
Levittown
Elkins Park
Main St Norristown
Paoli/Malvern Malvern
Trenton
er Riv
Manayunk/Norristown
e ar w la De
Pennbrook North Wales Gwynedd Valley Penllyn Ambler Fort Washington Oreland North Hills
er Riv
pates having to reduce the size and scope of the rail network over the next ten years by: — Eliminating service on nine of 13 Regional Rail Lines, including Cynwyd in 2014, Media/Elwyn in 2015, and Chestnut Hill West in 2018, followed West Trenton, Airport Warminster, Wilmington/Newark, Fox Chase and Chestnut Hill East lines in 2023; — Truncating service on the Lansdale/Doylestown Line (2018) and Paoli/Thorndale Line (2023); — Suspending service on the Broad-Ridge Spur of the Broad Street Line and eliminating all express service on the Broad Street Line; — Converting all city and suburban trolley routes to bus, and truncating service on the Norristown High Speed Line. Casey and SEPTA Board Chairman Pasquale T. Deon Sr. detailed these needs and the impact of these pending transit cuts in a letter sent earlier this week to state Transportation Secretary Barry J. Schoch. In the letter, SEPTA detailed the $6.5 billion needed over the next 10 years to address the transit system’s state of good repair needs. The letter also noted the impact of shrinking SEPTA on regional and state transportation as a whole, as vehicles are added to roadways, increasing both traffic congestion and roadway maintenance costs.
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Without an infusion of funding for SEPTA’s backlog of critical state of good repair projects, the Authority will have to significantly shrink the transit system over the next 10 years, including major reductions in rail service, SEPTA General Manager Joseph M. Casey said last week during testimony at a Pennsylvania Senate Transportation Committee hearing. Fiscal Year 2014, which began July 1, 2013, represents the fourth consecutive year of reduced capital funding from the state, and the lowest level of capital funding for SEPTA in 15 years. At the same time, SEPTA has seen overall ridership hit its highest levels in over two decades, including an all-time high on Regional Rail last year. To continue safe and reliable operations, SEPTA will have to implement a Service Realignment Plan that the Authority expects to leave 89,000 daily riders – or 40.7 million annually – without rail service. This is due to the critical, immediate need to modernize SEPTA’s rail network, such as replacement of bridges that date back 100 years or more and purchasing new Regional Rail cars, subway cars and trolleys to replace vehicles that already date back 30 years or more and are well beyond their useful service life. Without an increase in state funding for infrastructure improvements and new vehicles, SEPTA antici-
19 SEPTEMBER 2013
REGIONSBUSINESS.COM
WORKFORCE
New Board Of Directors For Philadelphia Works
WEEKLY BRIEFING
Glen Mills’ Firm Gets Jolt With New Contract, Venture Capital BY ELISE VIDER
Philadelphia Works, the city’s lead workforce development organization, has welcomed five new members to its Board of Directors. The new members appointed by Mayor Michael A. Nutter are Jim Gillece, Chief People Officer and Senior Vice President of AlliedBarton Security Services; Margaret Jones, Executive Vice President and Chief Administrative Officer of Children’s Hospital of Philadelphia; Gabriel Mandujano, Founder and Owner of Wash Cycle Laundry; Peter Tubolino, Mid-Atlantic Area Manager for Siemens Building Technologies; and Bud Tyler, Vice President of New Business Development for the EF Precision Group. FINANCE
Exton Finance Firm Gets Gold Exton-based Citadel employees, Kevin McDermott, John Kane, David Layo and Joe Mylotte, registered representatives affiliated with broker-dealer and Registered Investment Advisor CUSO Financial Services, LP (CFS), for receiving Pacesetter Awards at CFS’ Annual Conference. The annual awards are presented by CFS as a way to recognize top registered representatives. COMMERCE
Chamber Offers Business Sessions The Greater Philadelphis Chamber of Commerce will be holding a workshop Friday, Sep. 27 for businesses to learn how to self-certify with Pennsylvania in order to be eligible for future contract opportunities. Specifically, they are looking for businesses in the following industries; services, supplier, information technology and contractors. Visit GreaterPhilaChamber. com for details.
Versify Solutions in Glen Mills is getting a jolt – a good thing for a company that develops software and IT systems for the power industry. In recent weeks Versify announced both a significant venture capital investment and a new, six-year licensing contract with Pacific Gas and Electric Company (PGE), the giant California utility. Versify, says President and CEO Pete Cona, “is really picking up speed in the market.” The energy industry, Cona explains, “is looking to leverage its existing infrastructure. And the question everyone is trying to get an answer for is ‘how can I improve efficiency and profits from my existing infrastructure and how can I absorb emerging technologies?’ “ This is where Versify comes in. Founded in 2005, Versify offers a suite of proprietary software products and services to collect, analyze and report on vast amounts of incoming data in real time. “We believe software is a key piece to integrating dif-
ferent generating technologies, improving operations, integrating with the grid, improving reliability and being compliant [with regulation],” Cona says. Versify’s market includes utilities, energy traders, power schedulers, power developers and compliance officials — “professionals in the power industry who demand a constant flow of data to efficiently navigate an increasingly dynamic sector.” It counts among its clients other big players such as Constellation Energy and Xcel. On the capital front, SJF Ventures announced last month that it is has invested in Versify. Also participating is Potomac Energy Fund, an earlier Versify investor. “The financing will be used to expand the company’s sales efforts and provide customer support in meeting current market demand,” SJF said. Neither SJF nor Cona revealed the dollar amount. Cona says the company is growing both revenues and customers annually and that he expects the workforce to grow by about 30% over the next year. This article was originally published on KeystoneEdge.com.
Bucks County To Welcome Back Fall UFO Conference Visit Bucks County and the Sheraton Bucks County Hotel in Langhorne will be welcoming the Mutual UFO Network (MUFON) of Pennsylvania to Bucks County October 4-6. The twoday conference will bring approximately 600 attendees from across the country and Canada, resulting in 150 room nights. The conference aims to bring together those who are interested in the possibility of intelligent life in the universe for a weekend of education, book signings, documentary viewings and networking. Top speakers in the ufology industry will present on topics, including the Roswell UFO incident, aliens in pop culture, cryptozoology and other key UFO case studies. New this year, the conference will host Pat Uskert, Ted Acworth and William Birnes, the stars behind the popular History Channel show, UFO Hunters, for a special reunion.
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EDUCATION
Pew Education Poll Finds Results Lower Than Usual A new poll commissioned by The Pew Charitable Trusts finds that Philadelphians have a very low opinion of their city’s financially distressed public school district and that most residents think the resulting problems will drive families to seek other educational options or leave the city. Only 18 percent of the Philadelphians surveyed said the schools are doing a good or excellent job. Seventy-eight percent described the schools as “only fair” or poor, and 52 percent of all respondents rated them poor. “In the five years we at Pew have polled the city, the school system’s ratings have never been high,” says Larry Eichel, a director of Pew’s Philadelphia Program. “But these are the lowest yet.” Parents with children in district-run schools gave the public system slightly higher marks: Twenty-three percent of them described the schools as good or excellent. Residents were split on whom to blame for the district’s current funding crisis. Thirty-one percent said Mayor Michael Nutter and the City Council bear the most responsibility, while the same percentage put the blame on Pennsylvania Governor Tom Corbett and the state legislature. Twenty-one percent blamed school administrators and the School Reform Commission. And 11 percent named the labor unions representing teachers and other school employees.
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19 SEPTEMBER 2013
REGIONSBUSINESS.COM
WEEKLY BRIEFING
EXECUTIVE SEARCH
Diversified Search Names New President Philadelphia’s Diversified Search has announced the addition of Dale E. Jones, a seasoned executive search professional, as President and a member of the Executive Committee. Mr. Jones comes to Diversified Search after fourteen years with Heidrick & Struggles, and nearly 20 years in the industry. In his new role, Mr. Jones will serve as one of the key market facing leaders in advancing the CEO Practice and Board of Directors Practice of Diversified Search, and will help implement a three-year strategic plan.
Butkovitz Calls On PICA To Reject City’s Updated Five Year Plan City Controller Alan Butkovitz called on the Pennsylvania Intergovernmental Cooperation Authority (PICA) to reject the City’s Updated Five Year Plan. Responding to PICA’s request for an Opinion on the Updated Five Year Plan, Butkovitz examined the City’s Forecasted General Fund Statements of Operations for the fiscal years ending June 30, 2014 through June 30, 2018 (The Updated Plan) and found that the city’s assumptions did not provide a reasonable basis for the city’s forecast. “Over the life of the Updated Plan there is a steadily declining fund balance to a critically low amount of $8.5 million in fiscal year 2017,” said Butkovitz. The FY14-18 Forecasted General Fund Statement of Operations is prepared by the City’s Finance Office and then submitted to PICA. The decline in the fund balances to extremely low amounts occurred, he said, because the City failed to update the revenue amounts in the Updated Plan for the anticipated favorable financial impact that management assumes will take place because of the ongoing economic recovery. “No recent Five Year Plan has had these critically low fund
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balances,” Butkovitz said. “Any significant deviation because of unforeseen circumstances such as litigations, severe weather, or future unexpected commitments to the School District of Philadelphia could drastically impact city operations.” In addition, he said, the Updated Plan assumes the city will realize $536.6 million of property tax revenue for fiscal year 2014 and $2.26 billion over the remaining years of the Updated Plan. However, these estimated revenues may not be fully realized, because it is difficult to estimate the extent of tax appeals that may arise as a result of the city’s newly implemented Actual Value Initiative and because of more aggressive tax collection efforts implemented by the city with respect to additional current and prior year property tax receivables. “These assumptions could further erode the critically low fund balance available for appropriations if the revenues fall short of expectations and/or union contract settlement cost more than anticipated,” Butkovitz said. “I urge PICA to reject the City’s Updated Five Year Plan as presented because the assumptions are not reasonable.”
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19 SEPTEMBER 2013
REGIONSBUSINESS.COM
WEEKLY BRIEFING
RECREATION
Mt. Airy Silent Auction Returns One of Mt. Airy’s best art institutional assets, the Mt. Airy Art Garage (MAAG), is having its Fourth Annual Silent Auction on Saturday, September 21, from 6-10 p.m. at its home at 11 W. Mt. Airy Avenue. This year’s silent auction will showcase diverse work from both MAAG’s emerging and professional artists alike. The gallery is promising to feature work ranging from painting, photography, mosaic, jewelry, quilts and fiber art to woodwork, found objects, and more. Over 45 local artists have already donated pieces. In addition to the artwork, the auction will also feature gift certificates as well as services and classes by artists, experts in their disciplines. Tickets are $30 in advance and $35 at the door. Visit www. mtairyartgarage.org. This article originally appeared on the Philadelphia Real Estate Blog at blog.PhiladelphiaRealEstate.com. GAMING
Casino Contender Unveils Plan For Family District PHL Local Gaming, LLC, one of six bidders for the available Category 2 gaming license in Philadelphia, announced that, should it be granted the license, it would serve as a cornerstone and catalyst for the development of a new familyfocused recreation and entertainment district in an area between the Stadium Complex, public park land, and FDR Park Golf Club in the west, and the Delaware River in the east. According to PHL Local Gaming officials, an absolute premise for the launch of the LoSo Entertainment Center would be gaining an assurance from public- and private-sector leaders that no currently existing jobs or businesses in the designated area would be eliminated. Instead, every effort would be made to ensure that such jobs/business entities would be preserved and relocated to other, nearby, South Philadelphia sites.
JOBS
‘Philly Reserve Bank’? Former Exec Stumps For Not-So-Radical Idea BY SANDY SMITH In the effort to stimulate needed investment in neighborhoods across Philadelphia, there’s been much talk of banks of various sorts: Land banks. Infrastructure banks. Community development banks. All of these are envisioned as ways to get capital to projects that would keep Philadelphia an attractive, competitive and thriving community. A former business executive and Republican State Committee executive director spoke to an audience in Center City last night about a bank of a different sort: One that’s owned by the citizens it serves, capitalized with the city’s own assets and designed to assist local banks in lending money for new businesses, construction and redevelopment. Known as a “public bank,” this bank would not compete with existing private banks but rather serve as a local reserve bank. Mike Krauss, chairman of the Pennsylvania Public Bank Project, addressed a Neighborhood Networks-sponsored meeting at Liberty Resources devoted to the subject of creating such a bank for Philadelphia. The idea is neither new nor radical: Several countries have created public banks as a way of providing low-cost capital for community needs. So has one American state: North Dakota, where the state-owned Bank of North Dakota (BND) has been financing agriculture and industry in that state for nearly a century. Creating a public bank, Krauss said, would enable the city to deal more effectively with numerous challenges it faces. Krauss noted that the city budget remains in crisis: “The word is that Philadelphia is going the way of Detroit – nearly broke and unable to meet its obligations to its creditors.” Krauss listed most of the conventional strategies for resolving this crisis: “Raise taxes, borrow money, cut services, ask for givebacks from middle-class employees. All bad tools. Here’s a different tool that puts money into the community, puts people to work, and it makes money. The Bank of North Dakota splits its profits: half go to the state treasury and half go to reinvestment.” BND promotes development by making borrowing cheaper for individuals and governments across the state. It also enables the state to avoid exotic investments promoted by Wall Street, such as interest rate swaps that have cost municipal governments much-needed money. While functioning as a reserve bank much like the Federal Reserve, the BND differs from it in several key respects. By law, it must accept deposits from individuals, but it may not solicit them. And instead of being controlled by the bankers it nominally oversees, it has only one stockholder: the State of North Dakota, in whose citizens’ interest it is supposed to act. As Krauss described it, a public bank would be a winwin proposition for everyone save one group: the Wall Street financiers who control the Fed. “The Bank of North
Dakota is North Dakota’s own central bank, disconnected from the Wall Street matrix.” And it has been able to inject $6 billion in capital into the economy of a state whose population is one-third the size of Philadelphia’s. The City of Philadelphia, he said, has that much money already invested in financial instruments that produce far worse returns than BND gets from investing in North Dakota. Krauss rattled off several other indicators that the state bank in North Dakota has been a robust fiscal backstop: “The bank required no bailouts after 2008. North Dakota has had no bank failures in the past 20 years, and the Bank of North Dakota pays rates of return higher than cities like Philadelphia do to their pension funds.” As the city’s unfunded pension obligations account for a good chunk of the budget problem, a public bank throwing off profits for the city treasury could be a game-changer for the municipal budget. It would also be a game-changer for economic development: “This bank would be an enabler of the diversity of the community,” he said. Finally, it would be a game-changer for democracy, which is being threatened by an increasing concentration of wealth and power at the top. “I believe in American democracy. I think it’s being stolen from us,” he said. Kraus came to this view upon returning to the United States after spending several years abroad running a number of foreign companies. The country he returned to, he said, didn’t resemble the one he had left. After reading up on the structure of the Federal Reserve, he decided to become involved in the public banking movement. It’s actually an idea as old as the country – even older, in fact: colonial Pennsylvania operated its own bank that printed money and lent it locally. “Ben Franklin traveled to London in 1750 and let the cat out of the bag,” he said, noting the terrible poverty in London and contrasting it with Pennsylvania’s lack of same. Several audience members raised issues that would have to be addressed in setting up a public bank for Philadelphia, in particular the need to insulate it from political interference from the elected officials who would need to establish and oversee it. Krauss stressed that to be successful, the public bank needed to be not only transparent and accountable to the citizens but independent of the political class: even though it would be a challenge to the big bankers, it should be run by people who know banking first. “I’m not saying this will be easy. I’m saying it is necessary,” Kraus said. The Pennsylvania Public Bank Project will hold an allday workshop for citizens interested in setting up a public reserve bank for Philadelphia on Saturday, Oct. 12, from 8:30 a.m. to 3:30 p.m. at the Arch Street United Methodist Church, Broad and Arch streets in Center City. The meeting is free and open to the public. This article originally appeared on the Philadelphia Real Estate Blog at blog.PhiladelphiaRealEstate.com.
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19 SEPTEMBER 2013
REGIONSBUSINESS.COM
WEEKLY BREIFING EXECUTIVE BOOKSHELF
WHO TO FOLLOW
@exectweets
ExecTweets Presented by Microsoft, this Twitter account is a must-follow for small business owners and business executives. The account tweets quotes from business execs, and helpful blog posts. RT @exectweets: “Ability may get you to the top, but it takes character to keep you there” -John Wooden RT @exectweets: 10 Rules for Building Massive Companies http://bit.ly/ gMH4Wy - great post on entrepreneurship from Linkedin founder @quixotic
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POWER: How J.D. Power III Became The Auto Industry’s Adviser, Confessor, And Eyewitness To History No other individual has had quit the impact on the auto industry during the past fifty years as Dave Power. His persistence in getting auto executives to listen to customer concerns was key to the across-the-board rise in car quality, and the influence of his rankings has permanently raised the bar on customer satisfaction. With anecdotal quotes from Dave as well as dozens of industry insiders, POWER is a compelling study for anyone in the business of pleasing customers.
Stitcher Do you love listening podcasts? Or are you looking for a good entry point? No matter your experience with the world of podcasts, th e Sti tch e r app (Free for Android, iOS) is one of the best methods for listening to your favorite radio shows and podcasts. Stitcher lets you search for your favorite shows, or find your favorite shows through an extensive genre search. When you find some you like, it creates your own personal radio station and even makes suggestions based on what you like. Complete with an intuitive car mode, this app is a must-have for podcast lovers.
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RESTAURANT ROUNDUP
New Cuban Diner Gets Name, Opening Date Foobooz reports that Jose Garces’ new Cuban diner that will be replacing Chifa, a Latino-Asian fusion restaurant on Chestnut Street, now has a name and official opening date. The new restaurant will be called Rosa Bianca and will be opening around October 21. The restaurant will have an integral take-out component, with a counter selling completas and pasteles right inside the door, Foobooz reports. Also included on the menu, being overseen by Yun Fuentes, are Cuban sandwiches and empanadas.
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19 SEPTEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
Kane Needs To Prosecute, Not Politicize
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.
070036_09563 10x5.67 4c
During her campaign for attorney general, one of Kathleen Kane’s starry-eyed admirers gushed that she is a “high-speed political train.” Since her election, the Kane Express has made stops at nearly every high-profile political junction — the lottery, gay marriage, airline mergers and, now, Marcellus Shale. Last week, the attorney general, who campaigned as “a prosecutor, not a politician,” announced criminal charges against XTO Energy for a 2010 spill that, according to the company, was either the result of vandalism or a sub-contractor. XTO says it will vigorously defend against the charges. Hopefully, they will, rather than taking some “deal” that will inevitably be offered. While the facts of the case will be borne out in court, how Attorney General Kane arrived at her decision to prosecute will be much more interesting. The Philadelphia Inquirer reports Myron Arnowitt of the radical environmental group Clean Water Action boasted, “[Kane] has indicated that she is on the watch for a criminal prosecution opportunity in the Marcellus shale.” This simply isn’t what prosecutors should do. It’s what politicians do. There are real dangers in the politicization
of the criminal justice system. The criminal justice system was never intended to promote policy positions or punish political enemies. The business community was swift to denounce the charges brought by Ms. Kane. Gene Barr, president of the Pennsylvania Chamber of Business and Industry, declared, “This decision sends a chilling message to all businesses looking to locate in Pennsylvania that they could be held criminally liable in the event of an unintentional spill by a contractor that resulted in no injury to humans or wildlife and that had no lasting impacts on the environment. It’s an unusual, if not unprecedented, over-reach by the attorney general.” The decision to pursue criminal charges is especially puzzling given these facts: XTO Energy had been working voluntarily and cooperatively with both state and federal authorities to clean up the water, the site had already been fully remediated and the U.S. Department of Justice had chosen not to pursue criminal charges. While a candidate Ms. Kane said, “Using a process known as fracking, these companies pump unknown chemicals into the ground, poisoning our water and harming our children.
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As attorney general I would fight to ensure that this process is stopped...” She’s certainly entitled to that political point of view, even though it flies in the face of the fact that the natural gas industry has created jobs for nearly a quartermillion Pennsylvanians (many of them in union trades), paid more than $1.6 billion in taxes, and significantly improved air quality in the state while distributing more than $400 million to local governments. But when Ms. Kane ceased being a candidate and became attorney general, she swore to uphold the Constitutions and laws of the Commonwealth and nation and to discharge the duties of her office with fidelity. Kane has done little to quell concerns that this prosecution is for political reasons. Her press office told reporters they were busy and that questions about the presentment were to be emailed to her staff. The presentment itself is not on the attorney general’s website. This lack of transparency only fuels the fire of charges that these are political prosecutions. A vigorous debate about the future of our energy policy and fracking in particular is one thing. Using the criminal justice system as a cudgel is another altogether.
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19 SEPTEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
13
Red Light Cameras Could Be Bad Bet For Burbs
Eric Boehm is bureau chief for PA Independent, a project of the Franklin Center for Government and Public Integrity
CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
Red light cameras could be expanding across the border from Philadelphia into Montgomery County. An ordinance approved by Abington Township last week would allow the municipality to become the first place outside of Philadelphia to deploy the red light enforcement cameras. The suburban township just north of the Philadelphia border plans to use the cameras at three busy intersections. But even the township’s deputy police chief doesn’t sound too convinced of the devices’ effectiveness. “I hope the impact is that the red light violations decrease,” Abington police Deputy Chief Michael Webb told PhillyBurbs.com on Monday. The state Department of Transportation still has to sign off on the plan. Before it does so, it should consider some of the red flags raised by the state government and independent observers of the Philadelphia red light traffic camera program. Legislation approved by the state government in 2012 allowed Pittsburgh and about a dozen municipalities in the Philadelphia suburbs to use red light cameras. Previously, only Philadelphia was authorized to use the cameras. The
city began installing cameras in 2005 and now has them at 19 intersections. While Philadelphia has generated more than enough money from violations to cover the $6 million annual price tag of their camera system, a report from the state Transportation Advisory Commission warns that smaller municipalities would not make enough money to pay for a similar program. “According to PennDOT calculations, only the City of Pittsburgh would have the traffic environment necessary to make (red light cameras) a sustainable program,” the commission wrote. The TAC report also shows that violations from red light cameras drop off quickly — with as much as a 50 percent reduction in violations in only one year. A study by AAA Mid-Atlantic echoed those concerns. In Delaware there has been a 41 percent reduction in red light violations at intersections with cameras installed and only a 7 percent reduction in accidents, according to AAA. “The revenue decreases over time as people get used to the cameras,” said Jenny Robinson, spokeswoman for AAA. “To keep the program sustainable, you have to keep adding intersec-
tions, and I think that’s going to be a tough balancing act for some municipalities.” The analysis from AAA shows that Philadelphia is making enough profit to be sustainable for now, but in the long term the city might have to put cameras at new intersections to keep generating enough money. Advocates of red light cameras point to studies from the Insurance Institute for Highway Safety that indicate the use of cameras reduces the number of high speed collisions and fatalities at intersections. But groups like the National Motorists Association warn against red light cameras because they violate drivers’ privacy and create legal problems with due process for offenders. After all, how can you confront your accuser if the accuser is a camera? More safety is always a good thing, but there are better ways to achieve those goals. Station a police officer at dangerous intersections or redesign the intersections to reduce the number of serious crashes. Red light cameras are a boon to the private companies that get the contracts, but a concern for motorists everywhere.
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POLITICS AND BUSINESS
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Unions Echo National Concerns About Obamacare BY ERIC BOEHM HARRISBURG – Union leaders in Pennsylvania are echoing concerns expressed by the national AFL-CIO about the implementation of the federal health care law. At this week’s national conference of the AFL-CIO, an umbrella group for dozens of labor unions, union leaders approved a resolution formally calling for changes to the Affordable Care Act. The AFL-CIO said it’s concerned about the affordability and accessibility of health insurance under Obamacare, and also worries that workers’ hours may be cut back as an unintended consequence of the law. It’s a notable change from 2010, when unions were among the loudest supporters of the Affordable Care Act. “There are still things that need to get fixed,” Rick Bloomingdale, president of the Pennsylvania AFL-CIO, said on Friday after returning from the conference. On the whole, unions’ biggest complaint with the ACA is that the federal government would recognize so-called “multi-employer plans” as employer-based health plans. Those types of plans were legalized by the Taft-Hartley Act and are widely used by labor unions to pool insurance costs between unions and management. Since the Treasury Department says it will view multiemployer plans the same way as other employer-based health coverage, individuals enrolled in those plans will
not be eligible for government subsidies. Without the subsidies, insurance would be more expensive. “Our members have negotiated hard for 50 years to get the good health care provided by our plans, and they shouldn’t lose that,” Bloomingdale said. He said the unions in Pennsylvania are waiting to see what compromise can be reached with the White House and Congress to address their concerns, before starting any grassroots efforts and telling members to contact their congressmen. But unions are not likely to join congressional Republicans and conservative tea party groups in calling for a repeal of the Affordable Care Act. Leaders in Pennsylvania say they still support the overall goal of Obamacare and want to see changes made that would address their concerns. Wendell Young IV, president of the United Food and Commercial Workers Local 1776, noted that the Obama administration made special concessions for the Catholic Church and delayed implementation of the employer mandate after opposition by business groups. Unions want the same kind of flexibility from the administration, he said. “Labor is not against Obamacare. That is absolutely not true,” Young said. “We think that in the sausagegrinder that is Washington, some mistakes were made and those should be corrected.” The AFL-CIO resolution also expressed concern about
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employers cutting back workers’ hours to avoid paying costly mandates created by Obamacare. Business groups have warned for some time that reduced hours would be one of the unintended consequences of the Affordable Care Act. The labor unions say they want the federal government to institute a penalty for employers who cut hours just to avoid offering health insurance. “It’s pretty crappy that a business would cut their employees’ hours in order to avoid giving them health care,” Bloomingdale said. But there could be an upside, he said. Employees upset with their management for reducing hours might look to unionize. This article was originally published on Pennsylvania Independent at PAIndependent.com.
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Local Businesses Becoming Attracted To New Platform
The lure for businesses, Mr. Balin said, is simple: Because the platform makes money solely through the 99 cents asking price for discounts, it doesn’t take a dime from revenue businesses make from the deals themselves. Businesses on board thus far: South Philly Bar BY BRANDON BAKER and Grill, Mac’s Tavern, Xochitl, the Sporting In the eyes of 38-year-old Matt Balin, small Club at the Bellevue and — the biggest catch of businesses are hardly getting a fair shake when the bunch — Valley Forge Casino. “This is for any type of business. It doesn’t need it comes to discount-offer websites like Deal Busters — sites that, many fail to realize, are as to be a restaurant or bar, it’s meant for everything. perfect for deal-snatching as they are for busi- A contractor, a chiropractor, a masseuse, a hair dresser — it doesn’t matter. My vision is that when ness advertising. The problem? In exchange, businesses shell out a higher percentage of their revenue than is worthwhile for offered deals that, more often than not, they don’t get a say in creating. IT’S COMPLETELY DIFFERENT This, of course, is where Mr. Balin steps in. FROM SOMETHING LIKE GROUPON. Picture it: It’s 2 a.m. one morning earlier this I BUILT THIS THING TO BE year, and Mr. Balin is perusing iTunes, all the while trying to understand how he can offer a similar BUSINESS-FRIENDLY.’ discount forum free-of-charge for businesses while —MATT BALIN operating a company that’s still in-the-black. He then purchases 14 songs in bulk — all at the critical price point of 99 cents. Thirty minutes later, customers come to buy offers, they see a diverse staring at the number “99,” the light-bulb goes off: group of businesses, something everyone will want,” These songs represent something much bigger than Mr. Balin said. “Even the name ‘Hooditt,’ it’s meant to represent neighborhood. It’s all about shopping evening-commute jams. In short: They’re the key to his business model local and supporting small businesses.” For customers, Mr. Balin has eliminated what for Bellevue-based Hooditt.com. “Customers can buy offers on Hooditt.com for 99 he considers an outdated trend of “spam” emails cents in the same way you buy music on iTunes — from Groupon and Google Offers that flood email [and for businesses] there’s no other company, no inboxes with undesired discounts. Hooditt, he said, other marketing platform that’s 100 percent free addresses this by setting up a system that has custhat lets them create offers. It’s completely differ- tomers “follow” businesses like they would as an ent from something like Groupon,” Mr. Balin said. Instagram user. Those businesses are then the only ones users receive email offers from. “I built this thing to be business-friendly.” Launched Sept. 9 (at 9:09, no less), Hooditt The five-member Hooditt team’s focus is on strengthening local businesses in the Philadelphia witnessed 117 transactions by the end of its first week. region. Moving forward, Mr. Balin said Hooditt will Businesses can pick and choose what items or services go on sale, how long they go on sale for launch a mobile app, as well as work in partand — most importantly — the quantity of the nership with area universities to boost site trafoffer. It eliminates the obvious problem of paid fic — an effort that, he hopes, will expand the discount-offer sites proposing more special offers platform’s reach to a goldmine market of cashfor, for example, food, than are actually available. strapped college students. Business: Hooditt.com Founder: Matt Balin Contact: mbalin@hooditt.com
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DIARY OF A STARTUP
Lucidity Founder Examines The Startup Narrative Lucidity Health founder and CEO Jake Halpert dishes his commentary on the rags-to-riches narrative so prevalent in mainstream startup coverage.
because the growth under my tenure is so palpable and amazing to watch.
ONE OF THE CHIEF MISSIONS OF THE LEADER OF A STARTUP... IS TO PULL BACK THE CURTAIN.’
In his words: I recently was asked to do a weekly piece on how new businesses are made. A lot of the readership, I’m told, has exposure to start-up companies only —JAKE HALPERT through the occasional front-page mainstream media articles announcing a billion-dollar acquisition or other major deal of some company they’ve One of the chief missions of the leader of a startnever heard of before. As you can imagine, when you see people going up company (as with most ventures and advenfrom zero-to-hero (or $100 million in the bank) tures) is to pull back the curtain on how, as a group, you can get from A to B. The following is, quite overnight, it’s pretty intriguing. simply, how we bring up our new team members I’d like to chip away at some of this intrigue. Sometimes when Lucidity brings on new team and has become one of the pillars of the company’s members they’re intimidated, too. To the naked eye, culture — that is, that success is the result of proit seems like there’s so much to do, so many “big” ductive days and big events. If you take snapshots of the great rises of some players to go up against, and who are we, anyway? I am excited when I have the opportunity to work of the most influential businessmen, one day they with someone facing this insecurity and self-doubt, are regular people, and one day later they have
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fortunes in their bank accounts and are holding an amazing creation in their hands. In between, behind the scenes, is essentially none other than a series of highly productive days by small teams working together. Larry Ellison, Steve Jobs, Bill Gates, Jeff Bezos — the list goes on. Many of them had to pivot from failures as well. Productive days lead to big events. As a company, you want to put yourself in the position to have big events — just like an eligible bachelor choosing among rooms at a party will choose the one with more bachelorettes. Looking back at the first trimester of Lucidity so far, what stands out are a handful of major events — our backing by Penn Medicine, Independence Blue Cross, and DreamIt Ventures in their strategic venture program; our recruiting of key people onto the team; and our key partnership meetings. These are all the result of productive days and focus. These big events are what eventually lead to you hearing about someone on the cover of the New York Times.
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2013: YEAR OF THE INNOVATOR
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GPCC Director Joins Scribewise BY JULIANA REYES Bryan Evans, Director of Policy Communications for the Greater Philadelphia Chamber of Commerce, has left his post to join Center City content marketing firm Scribewise. Mr. Evans, who worked as Select Greater Philadelphia’s Director of Public Relations since 2008 and moved to the Chamber this summer, will run public relations at Scribewise as its Vice President of Outreach. Through his work at Select Greater Philadelphia and the Chamber, Mr. Evans said he had a “great view” of the Philly startup scene and “wanted in.” Joining Scribewise, “a young company with a lot of potential,” is his way of doing that.After about four years at Select Greater Philadelphia, the economic development arm of the Chamber of Commerce, Evans left Select for the Chamber this summer. Why the switch? The Chamber and Select shared Evans’ services, said Select president Tom Morr, and had nothing to do with any budget problems on Select’s side, which had been rumored. Rather, it was “the best way to get the job done.” This article was originally published at Technical. ly/Phily.
Sexism In Tech? TechGirlz Founder Speaks Out BY JULIANA REYES
Bryan Evans
At this year’s TechCrunch Disrupt conference, two app demos called sexist and explicit shocked the crowd. TechCrunch editors apologized and said they’d screen demos beforehand. But that’s not enough, said TechGirlz founder Tracey Welson-Rossman. If you want to create lasting change, she wrote, tell more stories of women in tech. She writes, “The number of job openings versus the number of qualified tech workers is widening. There are not enough men to fill open positions. Women are getting more college degrees and becoming a greater part of the workforce. If you want to make sure your companies will be sustainable for years to come, don’t allow this behavior to continue. This article was originally published at Technical. ly/Phily.
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PeopleLinx CMO Says Philly Has Edge For Tech BY JULIANA REYES Silicon Valley might be jaded but the less established Philly’s tech scene still feels fresh. So said Michael Idinopulos, Chief Marketing Officer for Center City LinkedIn analytics firm PeopleLinx, in a blog post inspired by Curalate CEO Apu Gupta‘s recent open love letter to Philly. Here’s Mr. Idinopulos’s post in full: “Apu Gupta’s article in the Wall Street Journal resonated with me, both professionally and geographically. Like Apu, I’m a Silicon Valley ex-pat. I’ve done venturebacked startups in Palo Alto and in Philadelphia, and I’m much happier doing tech in Philly. Recently, Gartner analyst Carol Rozwell asked me about PeopleLinx’s decision to locate here. Maybe it was my imagination, but I heard some skepticism in her voice. I replied with an unplanned, unscripted, unrehearsed rant on why I love doing a tech startup in Philly. Here, with a tip of my hat to Apu, is a replay of what I said. Silicon Valley is wonderful, but ... it’s very mature. Like many mature entities it wields enormous power.
It’s also insular, entitled, and more than a little political. People aren’t much interested in what happens East of the Dumbarton Bridge. They expect, even demand, workplace perks and big exit valuations. Your personal worth is measured by where you can afford to live and by who looks up when you walk into Coupa Cafe. Silicon Valley is jaded. I love Philly tech because it’s still fresh. People who do tech startups in Philly still feel that giddy sense of wonder and magic that comes from starting something totally new. We don’t take it for granted. We still feel lucky and grateful to be doing what we’re doing. We’re scrappy. Philly tech is the way I imagine Silicon Valley must have been before the personal computer boom, the first Internet boom, and the second Internet boom made startup success feel like a foregone conclusion. In the Valley, most employees don’t remember those days. In tech, the tables are turned. The Valley is experienced and satisfied. Philly is young and hungry. Philly, we’re still living them. I know where I’d rather be.� I’m sure it’s not just Philly. I expect you’d hear similar This article was originally published at Technical. sentiments from startup folks in places like Toronto, Chicago, and tons of other cities East of the Dumbarton. ly/Phily. Michael Idinopulos’ post was originally In America, we’re used to thinking of the East as the published on the Peoplelinx blog at blog.peoplelinx. past and the West as the future. But when it comes to com.
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Startups Must Avoid The ‘Why Them, Not Me’ Attitude
—HENRY FORD
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friend went toe-to-toe with Mark as an equal and that bought my friend some serious airtime with a billionaire. I like to think of entrepreneurship as a game of golf, one that we’re all playing, and that many will win. Like golf, entrepreneurship is a game that we play as individual units, each shooting for our best score. Players fall
Y
Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
WHETHER YOU THINK YOU CAN, OR YOU THINK YOU CAN’T — YOU’RE RIGHT.’
apart when they are constantly checking the scoreboard. Are you going to try to hit a better shot because another player is three strokes ahead? Or if you are in the lead, will you not try to swing as well? No. You should play your best no matter what. The best players confidently go out in the world knowing that they will win the tour championship. And when they meet another great who has just played the game of their life, they genuinely congratulate them on a job well done. Be happy for them. Be the star that you know you are. Own your own success: as Henry Ford so aptly said, “Whether you think you can, or you think you can’t— you’re right.” And when you see Fred Wilson at a cocktail event, expect that he’ll ask for your business card. The column was originally published on the Wharton Entreprenuership Blog at beacon.wharton.upenn. edu/entrepreneurship.
ha t’s
CONTRIBUTE
One potential investor who responded with interest was, as he said, “some guy named, oh, what was it, something like Mark Cuban.” He had no idea who he was. He had a dialogue with Mark like he would with any guy named Mark. My
W
Doug Baldasare is the CEO and Founder of ChargeItSpot. He is an alum of the Wharton VIP program and the Wharton School (2012 MBA).
In my experience interacting with aspiring entrepreneurs, I see a lot of unhealthy onlooking. “Did you see startup XYZ get $6 million from Sequoia?” “Oh man, they just exited for $500 million.” “How the hell did they get Elon Musk on their advisory board?!” There is certainly merit in staying informed of relevant news. Also, to a certain extent, industry-level success can be quite motivating. However, I’ve come across too many entrepreneurs who hyper-consume this type of news and start to form a “why them and not me” mentality. If you are so star-struck by others, how will you be a star yourself ? I have a friend who is starting a business in B2B web services in NYC. He isn’t American and isn’t up-to-date with the who’s who of pop culture. He was telling me about some potential investors his lawyer introduced him to.
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RETAIL REVIVAL The City’s Department of Commerce says Philadelphia is going through a “retail smorgasboard” from apparel to shoes to clothing to supermarkets. Retail in Philadelphia seems to be on the upswing. But after talking to independent store owners, one may wonder: Is it a revival? Or is it a shuffle? Or a completely new creation?
STORY BY ROSELLA ELEANOR LAFEVRE ILLUSTRATION BY DON LEE
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Smak Parlour owners Abby Kessler and Katie Loftus pose in front of their Fashion Truck, the walls of which tell their boutique’s story. SUBMITTED
Northern Liberties’ Art Star, a gallery and boutique owned by Erin Waxman and Megan Brewster, has occupied its 623 N. 2nd St. storefront since 2004. Funded by a set of credit cards, Abby Kessler and Katie Loftus opened their Smak Parlour boutique at 219 Market St. in 2005. London native Elena Brennan opened her BUS STOP Boutique, a rare shoe emporium, at 727 S. 4th St. in 2007. It was in 2009 that Sara Van Aken’s clothing line SA VA got its flagship store at 1700 Sansom Street near Rittenhouse Square. Independent stores like these have successfully done business in Philadelphia for years. The city, once home to Wanamaker’s, Strawbridge and Clothier, Lit Brothers and Gimbels, seems to be experiencing a retail revival that several sources have dated back five years. Since 2008/2009, Philadelphia has seen retail growth in all aspects. Dawn Summerville, the director of commercial investment in the City’s Department of Commerce, said there’s a retail “smorgasboard,” encompassing everything from apparel to shoes, from cosmetics to supermarkets, across Philadelphia. There is renewed interest in the city from national and international brands and local designers are finding their footing in the fashion business. An interesting change in the city’s dynamic is capturing the attention of retailers who want to take advantage of the growth in population that Philadelphia’s seen since 2010, especially among younger generations. The median age of the city is 35.5 years and the average salary in Center City is $103,000, making its residents the perfect customers for many of the independent and chain stores in
the area. “[Developers are] excited about our energy,” Ms. Summerville said. A year ago, Philadelphia got its own Intermix at 1718 Walnut St.; this women’s specialty, multi-brand fashion retailer has stores in other major cities, such as New York City and Los Angeles. In October 2012, TJX Cos. Inc. opened a new Marshalls in the 26,000 sq. ft. space at 10th and Market Streets that used to house Staples. Taking over the ground and second floors of what was once The Lanesborough hotel at 1601 Locust St., SuitSupply, a suiting company founded in Amsterdam in 2000, opened a 4,300 sq. ft. retail space in April of this year. National retailers Theory and Madewell have plans to open stores at 1616 Walnut St. and 1716 Walnut St., respectively. There are several groups and efforts encouraging this new spate of retail investment in Philadelphia, including the Department of Commerce, Center City District, the Philadelphia Retail Marketing Alliance and the Philadelphia Collection, a weeklong series of more than 75 fashion and style events taking place across the city. Helping independent designers build their businesses here is the Philadelphia Fashion Incubator with an 800 sq. ft. production room, showroom and office space at Macy’s Center City in the historic Wanamaker building.
Getting You In On It
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 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
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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 (roughly $5,000 for each full-time employee a company hires).
Turning A Spotlight On Philly’s Fashion Scene When Melanie Johnson was work-
ing as a city representative, she saw a number of independent event producers come through with similar events they were calling “Philadelphia Fashion Week. “If there was demand, it made sense for the city to combine and promote these events as one,” Ms. Johnson said. And so, the Philadelphia Collection was born. Founded by the Office of the City Representative, Center City District and PRMA in 2010, the Philadelphia Collection runs this year from Sept. 18 through Sept. 25 and features a range of events, including runway shows, trunk shows, think tanks and panel discussions meant to spark conversation about the city’s fashion and retail scenes. Through the event, “we’ve been able to send out one collective message,” said Michelle Shannon, vice president of marketing and communication for Center City District, co-chair of PRMA and co-founder of the Philadelphia Collection. Unlike New York City’s Mercedes Benz Fashion Week, the Philadelphia Collection is not about the buyers looking to source products for future seasons, but
about what the customer can find in Philadelphia’s retail establishments right now. The Collection provides the perfect window of opportunity for stores such as United By Blue to host an official launch party for their retail space. The 3-year-old company founded by Chief Trash Collector Brian Linton is hosting a grand opening party for its flagship store at 144 N. 2nd St. on Sept. 25 from 6-9 p.m. “United By Blue has a sense of Old City in our aesthetic, our vision,” said Mr. Linton by way of explaining the choice of location.
Helping Designers Find Their Footing
Modelled after a similar, successful program in Chicago, the not-for-profit Philadelphia Fashion Incubator at Macy’s Center City launched in March 2012. Annually, the program provides business training for four to five Designers-in-Residence who are just a few years out of school. It’s not the place they go to learn the craft of fashion design but
Philadelphia Fashion Incubator designer Moriamo Johnson of designer line Aso Damisi. JIM COTTINGHAM
how to run a successful fashion company headquartered in Philadelphia. The Incubator is led by Executive Director Elissa Bloom, who used to run her own company as a handbag designer whose work was featured in national publications such as Teen Vogue. Ms. Bloom is also an in-demand speaker on the business of fashion. She’ll be speaking about retail at the International Fashion Incubator Conference, which runs October 21-23 in Toronto. Now, the Philadelphia Fashion Incubator has a hand in helping designers like Devin Pauley of Morgia Bridal, a custom wedding gown company, and Leah Delfiner of Pretty Pretty Rebel, a clothing company that produces collections inspired by different musicians, stay in the city. Building a relationship with boutique owners is tops on Ms. Delfiner’s to-do list, she said. Ms. Delfiner, who attended the Art Institute of Philadelphia, is focused on manufacturing and selling her company’s products in Philadelphia. In addition to pursuing relationships with retailers, Ms. Delfiner is also cul-
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REGIONSBUSINESS.COM
Philadelphia Fashion Incubator designers from the inaugural class (2012-2013), Moriamo Johnson and Latifat Obajinmi of designer line Aso Damisi JIM COTTINGHAM
tivating personal relations with her customers. She recently did three trunk shows in three days in an effort to bring her fall 2013 collection directly to the audiences that would buy her clothes.
The Challenge of Rising Rent Prices
The improved mix of retailers in the city has caused rent prices to go up, especially along Walnut Street on the west side of Broad Street, said Ms. Shannon of Center City District. Across the city, street level retail space will run a retailer as much as $9.23 per square foot at Zukin Realty-owned 128 S. 17th St., according to PRMA’s website, though most rents average $2-3 per square foot. The Philadelphia Inquirer’s fashion writer, Elizabeth Wellington, finds this concerning. “What might happen if the City’s not careful is these businesses are going to leave,” said Ms. Wellington, who has worked at the major daily newspaper since 2002. Consider Joan Shepp, an independent boutique named after the woman who founded the store in 1971 in Lafayette Hill, Pa. Earlier this year, Ms. Shepp told Philadelphia magazine’s Victor Fiorillo that she’d have to move her business, which had occupied its 1616 Walnut St. storefront since 1999. “We’re definitely not wanted here,” she told Mr. Fiorillo. The termination of her lease effective this month shocked a lot of customers and local media. Some nail-biting surely took place before Ms. Shepp revealed to Mr. Fiorillo’s colleague Simon Van ZuylenWood at Philadelphia’s ThePhillyPost.com that her
boutique, which counts actress Anne Hathaway among its clientele, will be heading to the Wells Fargo building located at Broad and Walnut Streets (the store will actually be on the backside of the building). Though Shepp will still be in Center City, Ms. Wellington saw its move as the product of real estate development aimed at ever-increasing dollar values to the exclusion of the audience that can afford to pay top dollar for clothing at places like Shepp. “Where the hell [are the one-percenters], Joan Shepp? She used to be their reason to come to town,” she said. Other retailers are getting crafty. Take Smak Parlour, for example. Though Abby Kessler and Katie Loftus still operate their flagship store at 2nd and Market Streets, they’ve recently taken advantage of two cool trends in retail to bring their brand to new neighborhoods and new customers. They operate both the Smak Parlour Fashion Truck on Penn’s campus at Locust and Spruce Streets, and a pop-up shop on 19th Street north of La Colombe, which is a temporary stop Smak Parlour. Both of these satellite locations have driven new traffic to the original storefront, making these viable lower-cost alternatives to opening a second permanent location.
A Revival, a Shuffle or a New Narrative?
Since she was brought to the city, Ms. Welling-
ton’s finger has been on the city’s retail pulse. Though the minds responsible for organizing The Philadelphia Collection see the changing retail landscape as experiencing a revival, Ms. Wellington says it’s more like a retail shuffle. It does seem a stretch to say there’s a retail revival when you consider the wealth of great independent boutiques that have been here for years. “We’ve had, like, for five years, a lot of good stores,” Ms. Wellington said. She named examples such as Knit Wit (1729 Chestnut St.) and Pileggi (717 Walnut St.), both of which are independent stores founded in Philadelphia. Because of the years-long existence of such stores, Rakia Reynolds, the city’s first Philly 360 Fashion Ambassador and president of Skai Blue Media (109 S. 13th St., Suite 119A), wouldn’t even call what’s happening a shuffle. “I don’t think [retail] ever left. We’re just articulating it differently,” said Ms. Reynolds, citing as an example of a new retail narrative the E-Entrepreneur panel her boutique PR firm hosted last night at Benjamin’s Desk, a co-working space on the eighth floor of 1701 Walnut St. The panel discussion, where e-retailers talked about running an online retail business, is part of The Philadelphia Collection. Whatever it should be called, this current thriving of Philadelphia’s retail scene looks promising. “Philadelphia is going to continue to be on the upswing,” Ms. Summerville said. “I have no doubt about it.” Rosella Eleanor LaFevre is a freelance writer living in Philadelphia.
19 SEPTEMBER 2013
REGIONSBUSINESS.COM
FINE ESTATES PREVIEW
$8.2M Rittenhouse Square Family Home Venerable in its history and classic in its Philadelphia brick exterior, this 13,000 square feet single family residence was comprehensively rethought, renovated and renewed by the current owner. Formerly four law offices, the interior was reconfigured to take advantage of its singular ability to have natural light on all four sides. This aspect is absolutely unique amongst Rittenhouse Square homes. The result is a five bedroom, four bath sunlit home of exciting formal and informal spaces and uncompromised finishes; all masterfully executed, making it at ease with being an intimate family home as well as a stately Center City residence, unmatched for large scale entertaining. This is like no other Central Philadelphia offering. This is also being sold with a companion property located at 1921 Manning Street which is a duplex residence with two parking spaces and generous storage. For more information, please contact Lavinia Smerconish at (610) 547-6637.
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Premier Gwynedd Valley location for this classic Sweeney built custom home. Showcasing beautiful millwork and gleaming hardwood floors this home shows pride in ownership. From the luxurious new master bathroom to the expansive rear patio over-looking a parklike rear yard, this gracious home welcomes you. 891 S Penn Oak Rd. Ambler, PA
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Premier Gwynedd Valley location for this classic Sweeney built custom home. Showcasing beautiful millwork and gleaming hardwood floors this home shows pride in ownership. From the luxurious new master bathroom to the expansive rear patio overlooking a park-like rear yard, this gracious home welcomes you. 1225 Forrest Hill Dr. Ambler, PA
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Q&A
19 SEPTEMBER 2013
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35
BETTER ENERGY RESULTS
WITH BENCHMARKS Can you tell us about the Benchmarking Program? Part of our goal is to reduce citywide building energy consumption by 10 percent and over the last several years we’ve been tracking and reporting out on the trends that we’ve seen on building energy use and we found that commercial buildings are still using as much if not more energy than they were several years ago so we want to reverse that trend. And the best way to do that is to get information into the marketplace about how those buildings are using energy. So, in 2012, we worked with a lot of advocates from the utilities and service providers and building owner community to craft legislation to pass a benchmarking and disclosure policy in Philadelphia that requires large commercial buildings to annually track and report on their energy and water usage to the city.
The first deadline for the Building Energy Benchmarking Program for large commercial buildings is quickly approaching: October 31. We spoke with Alex Dews, Policy & Program Manager for the City of Philadelphia’s Mayor’s Office of Sustainability, about the benchmarking program and what it means for building owners and businesses. The key? Visit PhillyBuildingBenchmarking.com for all the tools you’ll need.
Is this mandatory for all building owners? It is mandatory for all covered buildings — those that are non-residential in use and larger than 50,000 square feet. There is a provision for a fine in the law for buildings that aren’t compliant by the deadline ... That being said, there are some opportunities for exemptions ... buildings that are more than half vacant for more than half of the year, buildings that are residential in use and buildings that are manufacturing that have a very high energy process use. There is a final exemption category for national security laws. What would you say to building owners or businesses that feel this legislature is unfair? When we reached out to a lot of the large commercial buildings at the top of the scale, we found that a lot of these people have been using this tool for five, ten years already and are very familiar with the value of it, so this is a very easy process for them. It’s great for them to be recognized for their leadership. For those at the midway or lower end of the scale, they may have no idea how their building performs next to their peers... it’s important for them to understand they have a huge opportunity to save energy and save money.
PhillyBuildingBenchmarking.com/
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REGIONSBUSINESS.COM
OPINION
Despite Tuition Rise, College Education Worth It
Sharon Hirsh is president of Rosemont College.
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 has been difficult to read a mainstream newspaper or an online higher education journal in recent weeks without encountering an article or an op-ed devoted to the rising costs of higher education in America. And, as we all know, President Obama has made the issue one that he intends to address through new national initiatives in the coming years. But, the issue is one that no one knows better than families do. Around the kitchen tables and in the living rooms of millions of American homes, there is constant conversation about the cost of college. How can a family make it possible? Will there be enough federal, state, or institutional aid to cover what a family cannot pay? Does the federal EFC (Expected Family Contribution) really reflect what a family can afford to pay? What about loans and taking on debt? And, the big question, sometimes said aloud and sometimes not: Is it all really worth it? As the president of Rosemont College, and a person who has spent her life’s work in college teaching and administration and who has experienced first-hand over the last four decades how higher education changes lives, I can say emphatically, yes, a college degree is worth it. And the statistics back up my claim: College graduates climb the career ladder faster and make more money over the course of their lifetimes than non-college grads, they report greater satisfaction with their lives and life choices, and they even live longer than those who do not graduate from college. However, it is certainly easy to sympathize with families wrestling with tough choices about the cost of higher education when we, as higher education leaders, face the fact that, according to a recent report by Bloomberg, the costs of higher education have risen a staggering 585 percent since 1985. Compare that statistic to the 121 percent that the consumer price index has risen over the same time period, and we can all collectively gulp in sympathy with what families are going through to afford higher education. As leaders of institutions of higher education, we need to proactively address this issue and become as efficient as possible in our operations. I applaud my colleagues at other institutions who have recently instituted significant reductions in the cost of tuition or have guaranteed tuition rates for multiple years. At Rosemont, we have developed cost-
The Main Building and former Rathalla Mansion located on the Rosemont College Campus. FLICKR.COM/75012107@N05
effective models by reducing administrative oversight. From reducing the number of vicepresidential positions, to outsourcing the delivery of auxiliary services, to budgeting efficiently, we are driving resources to academic and student programs while controlling costs in other areas. This past year, Rosemont instituted three-year formats for nine of our undergraduate majors, allowing students to accelerate their degree completion, with significant savings. Many of the applicants for these programs will come to Rosemont having participated in dual enrollment courses in
their high schools, which Rosemont supports through individual partnerships and through the Diocesan Scholars program in collaboration with other Catholic colleges and universities in the region. And, we are constantly striving to do more. For a Catholic liberal arts college such as Rosemont and all similar small to mediumsized colleges and universities to continue carrying out our missions, it is imperative that we respond to the needs of our students and families, so that higher education will continue to profoundly enhance the lives of Americans in the future.
19 SEPTEMBER 2013
REGIONSBUSINESS.COM
OPINION
37
COMMENTARY FROM ACROSS THE WEB
Proposed Endangered Species Change Foolish
Another Tragedy, And A Louder Refrain
Foolishness among elected officials is never so on display as it is in Harrisburg, the home of the Pennsylvania General Assembly, whose members are incredibly efficient at passing pay raises for themselves but utterly deficient when it comes to bettering the lives of state residents.
The Navy Yard mass slaying in D.C. Monday has gun-control advocates, Newtown parents and Connecticut senators scurrying for new action. And it has pundits wondering what exactly is wrong in American society that produces so many brutal rampages.
Witness the latest example. It has raised the hackles of reasonable state officials and environmentalists, and strikes us as just plain silly. But it is what passes for action in the state capital these days.
Gun rights defenders, meanwhile pointed to failings in a security system that would allow clearance to a man with three arrests and mental health issues. In the end, however, the story boils down once again to “crazed gunman slaughters innocent people.”
The proposed legislation by Republican state Rep. Jeff Pyle could significantly change the laws that protect threatened and endangered species in the state by giving something called the state Independent Regulatory Review Commission a role in the process of listing or de-listing threatened or endangered species. The Pennsylvania Game Commission and Pennsylvania Fish and Boat Commission currently have exclusive authority for birds, animals, fish and other species. Pyle said he’s concerned that the public has “no possible way to contest” decisions by the state commissions. Carl Roe, the executive director of the Game Commission, told legislators last month that the new system could take longer, use up more staff time and jeopardize federal grants. He also said the legislation wasn’t addressing an existing problem since the Game Commission had only added only three species to the lists over the last 10 years. Three in 10 years. That is the biggest flaw we see here. A legislator has decided, for minor reasons, to take up the time of the General Assembly advocating for a cure to a disease that no one ever gets.
The gun homicide rate overall is down 49 percent since its 1993 peak, according to a May 2013 Pew Research Center report. But these mass killings seem to be increasing in frequency — six of them since the Sandy Hook slayings and at least 20 during the Obama presidency. Aaron Alexis, the shooter in the Navy Yard slayings, not only had been exhibiting symptoms of mental illness for a decade but was known to play extremely violent video games all night, acquaintances have said in televised interviews. Easy and alluring mass violence tells us something about technology’s dark side. The indisputable fact is that no-real life rampage — not Virginia Tech, Aurora or Sandy Hook — would be as lethal without a gun. Connecticut took some action of its own on gun control, but the U.S. Senate rejected expanded background checks for gun purchasers, despite public support.
DAILY LOCAL NEWS
THE TIMES HERALD
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@LAURENINTHEHALL
@DPBell
Honored to be named one of the Most Influential Women in #Philly by the @phillytrib 16 SEPTEMBER 2013
@PhiladelphiaGov Do you know a public servant who goes above and beyond? Nominate that person for the #DilworthAward at http:// www.dilworthaward.org . 18 SEPTEMBER 2013
@Michael_Nutter
+ more updates from this wknd’s hackathon: http://ph.ly/O8IA9 17 SEPTEMBER 2013
@BarackObama
We send our thoughts and prayers to all at the Navy Yard who’ve been touched by this tragedy. 16 SEPTEMBER 2013
@indyhall Next week, we’re taking over Frankford Hall to celebrate our 6th anniversary. We hope you’ll join us! http://bit.ly/1aRhmYc 17 SEPTEMBER 2013
News Flash - I don’t decide nor my administration who gets to go into school buildings at all, that’s the School District’s role, not mine. 12 SEPTEMBER 2013
@NoddingHeadBrew Would’ve loved to be involved with @PhilaRestWeek but didn’t want to have to raise our prices. #nodiscountrequired 17 SEPTEMBER 2013
@donovanjmcnabb Countdown to something special. I look forward to enjoying the moment with my friends,former teammates,family and most importantly the fans. 17 SEPTEMBER 2013
@TechnicallyPHL
Let’s get that done first.
REGION’S BUSINESS
Opening ceremony for @PhilaCollection in #philly w/ Mayor @Michael_Nutter and City Rep @DPBell
You can now find Philly tech companies that are hiring on WeWorkInPhilly
EDITORIAL BOARD CEO and President James D. McDonald Editor Rich Coleman
@FakeWIPCaller I’ll let Chip Kelly slide for that loss on Sunday. But just that one. 17 SEPTEMBER 2013
@EconomyLeague Great read: leaders ideas for world class region, starting w/ @STWray http://bit. ly/15qnB0G @RegionsBusiness 13 SEPTEMBER 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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BY THE NUMBERS
RETAIL SPENDING IN CENTER CITY $93,126
Average household income in the core of Center City, according to CenterCityPhila.org
129
Jobs per acre in Center City
73%
Center City residents 25 and older have a bachelor’s degree
$750,000,000
Total demand for Center City shoppers’ goods within one mile of City Hall
46%
1
Job per acre in surrounding suburbs
Demand is driven by tourists
25%
Demand is driven by office workers
24%
Demand is driven by residents in the area
11.6%
Center City’s retail vacancy rate
56.6%
Center City workers making more than $3,333 a month
258,404 Center City employees
$343,031,263
Total demand for overnight visitors in Center City
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