GEROW: DON’T LET PUTIN’S RHETORIC SWAY YOU — WE ARE EXCEPTIONAL
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IN THE POCONOS? As the economy gradually recovers, people are beginning to revisit the idea of the vacation home. But are Philadelphians still going for the shore house? Or something more mountainous?
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CONTENTS
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Liquor, Lodging 12 Lobbies Say No On Drink Tax
4 11 13 15
Weekly Briefing Q&A: Tom Olenzak Political Commentary Year Of The Innovator
24 28
Fine Estates Commentary
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WEEKLY BRIEFING
Wawa Reopens On Walnut: Remodels A Sign Of Move Back To City? BY SANDY SMITH Wawaphiles in the vicinity of Thomas Jefferson University in Washington Square West got their prayers answered Sept. 5 when the Wawa at 912-16 Walnut Street in Jefferson’s Barringer Residence Hall reopened after two and a half months of reconstruction. The rebuild brought Wawa’s latest design – and an additional 10 jobs – to one of its oldest surviving Center City locations. The redesign features the wider aisles, expanded sandwich ordering stations, improved grab ‘n’ go cases and other features that made their Center City debut at the Wawa in the 1700 block of Arch Street, which got a makeover earlier this spring. There’s been some speculation on local discussion boards that these makeovers signal a renewed interest in urban stores on the part of Wawa, which had spent much of the last decade closing smaller in-city stores while opening larger locations with gas stations in more suburban locales. While pursuing this course, rival 7-Eleven has aggressively expanded its presence in the urban core of Philly. We decided to put the question to Wawa corporate PR directly. Wawa spokeswoman Lori Bruce respond-
ed with copies of recent news releases and a statement that at once answers and avoids the questions, “Do these renovations signal a resurgence of interest in Wawa’s part on serving city residents and fans? Does the company have any plans to add urban stores back to its roster?” The answer to the first question, from Bruce: “These [remodelings] are our most recent examples of our commitment to our Philadelphia stores and remodeling to better serve customers.” And from Wawa President and CEO Chris Geysens, in a news release announcing the Walnut Street store’s reopening: “We are thrilled to show the City of Philadelphia we are more dedicated than ever to keeping our unique brand of appetizing convenience alive and growing in our hometown.” And the answer to the second question? We didn’t get one. So here’s a direct plea to the brass in Wawa: We urbanophiles “gottahavaWawa,” too! We’re thrilled that the company has rediscovered its loyal fans in Center City. Now, how about adding a few more locations back to your roster of in-city stores as well? This article was originally published on the Philadelphia Real Estate blog at Blog.PhiladelphiaRealEstate.com.
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WEEKLY BRIEFING
ENVIRONMENT
AG Kane Absent From EPA Lawsuit Pennsylvania Independent reports that Pa. Attorney General Kathleen Kane is notably absent from a list of attorneys general from more than a dozen states that are threatening to bring a lawsuit against the Environmental Protection Agency because of new rules they say will harm the coal industry. “Pennsylvania was not contacted by participating states and asked to join the letter submission to the EPA,” said Joe Peters, Kane’s spokesman. “The Office of Attorney General will continue to monitor this important issue.”
Marcum Warns Of Tax Headaches For Pa. Married Same-Sex Couples Recent court action halting the marriage licenses to same-sex couples in Montgomery County underscores a complex and potentially expensive tax scenario for legally married same-sex couples in states where same-sex marriage is not recognized, David H. Glusman, Partner-in-Charge of the Philadelphia office of Marcum LLP and a member of the Firm’s national Lesbian, Gay, Bisexual & Transgender Practice group said. Marcum was the first national accounting and advisory firm to establish a tax and estate planning practice dedicated to the LGBT community. “Because Pennsylvania does not recognize same-sex marriage, same-sex couples legally married in other jurisdictions but residing in Pennsylvania face a time-consuming, potentially expensive and complex challenge in filing their state and federal tax returns,” Mr. Glusman said. “Since the IRS now recognizes all legal same-sex marriages for federal tax purposes, such couples in Pennsylvania and other states where same-sex marriage is not legal will need to file federal and state tax returns using different calculations. That means double the effort, greater cost and lots of issues to be sorted through — especially since the do-it-yourself tax
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programs have not yet caught up with all this.” For example, a married same-sex couple in Pennsylvania cannot take advantage of the tax free transfer of property between spouses. A same-sex spouse who owns a home cannot transfer the home to joint ownership without paying the Pennsylvania real estate transfer tax. A heterosexual married couple would be able to make the transfer tax free. “It is extremely important for same-sex married couples to understand their options under various tax alternatives, so that any potential risk can be mitigated. Deductions may receive different treatment for married vs. single filers for state tax purposes,” Mr. Glusman advises. “The 118 same-sex couples who married with licenses issued by Montgomery County Register of Wills D. Bruce Hanes prior to the court ruling last week will remain in tax limbo until a clarification is issued,” he said. “For now, they appear to be married for Pennsylvania state tax purposes but need to plan for the possibility that there will be a different ruling before tax returns are filed, or even thereafter.”
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26 SEPTEMBER 2013
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WEEKLY BRIEFING
EDUCATION
PSU Regains Scholarships Various sources reported Tuesday, September 24, that the NCAA said it will reduce the sanctions against Penn State’s football program by gradually restoring scholarships starting next season. Officials did not rule out future modifications, such as reducing the four-year postseason ban. Penn State had faced a cap of 65 scholarships starting in 2014, but instead will have 75 scholarships in 2014, 80 in 2015 and the full allotment of 85 in 2016, ESPN.com reports. “The executive committee’s decision to restore football scholarship opportunities for more student-athletes at Penn State is an important recognition of the university’s progress -- and one I know it was pleased to make,” NCAA President Mark Emmert said. He insisted the reductions didn’t come because the original sanctions were deemed too severe
Philadelphia Sisters Come Out On Top At Harrisburg Startup Weekend BY SUSAN L. PEÑA
evening, judge and organizer Chuck Russell said the second Startup Weekend Harrisburg will probably be schedFueled by plenty of coffee and assorted candy, 33 hopeful uled for October 2014. (Earlier, in an informal discussion, entrepreneurs packed the top of Harrisburg University of Russell had mentioned that there were few university Science and Technology’s beautiful building in the heart of students in attendance last weekend, possibly because it the city’s downtown for the inaugural Harrisburg Startup happened so early in the school year.) Sheila Waples, whose job as a leasing consultant gives Weekend this past Friday-Sunday. her an inside edge on the apartment business, said this The result was pretty sweet. Seven teams, while boasting no designers, came up with was her first experience with Startup Weekend, and she app and internet solutions to problems ranging from how was thrilled with her team’s success. “My sister and I and the team are going to continue with to get people organized for a workday lunch to how to help this,” she said. “We feel it’s a good idea.” angst-ridden teens get dressed. Second place went to the mobile app Wear It’s At, which The first-place winning team, a website and mobile app called DateMyApartment, was headed by twin sisters helps teens mix and match clothes from various stores and Sheila and Sharon Waples of Philadelphia. The idea is to includes recommendations from other teens. The third-place winner was SurveyRT, another mobile connect landlords and future tenants, providing the former with a background check and the latter with 24 hours app designed to give restaurant owners real-time instant customer feedback through brief surveys, which could also to try out the apartment before signing a lease. Participants came from as far away as New York, New be used to increase traffic through discounts and promoJersey and Washington, D.C. The general consensus was tions. This article originally appeared on Keystone Edge at that the teams overall had strong ideas for their businesses. In his introduction to the final presentations Sunday KeystoneEdge.com.
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WEEKLY BREIFING EXECUTIVE BOOKSHELF
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TheAfter5Edge This blog leverages your “entreprenuerial spirit” to achieve the edge in business, with a focus on left-brain logic and rightbrain creativity. Great posts for business owners looking for inspiration and tips. RT @TheAfter5Edge: Effective communication is 20% what you know and 80% how you feel about what you know. - Jim Rohn #communication RT @TheAfter5Edge: Survival Skills Everyone Should Have http://ow.ly/ p5DPS
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MUST-HAVE APP
Venmo How many times have you been eating out with a group, only to find a lengthy process of figuring out how to split the check. Venmo aims to solve that problem with its free iPhone/Android app. Founded by University of Penn students, Venmo allows users to link their debit, credit cards and bank accounts to the app and pay other Venmo users for anything. Simply put in the amount and send it over. Users can easily cash out their balance. It works great for roommates who are splitting utility bills or rent payments, or for the next time you’re splitting the bill.
Florida Wine Bar And Eatery Comes To Wayne Philly.com reports that the Carmel Cafe & Wine Bar (372 W. Lancaster Ave.) opened earlier this month and is providing a step up from the previous HogFish Bar & Grill and its predecessor, Flavor. Carmel has five locations in Florida and its cuisine is Mediterranean-inspired. The 160-seater location has three communal tables and a semi-private wine room. This location adds to the overall upgrade of Radnor township, which includes White Dog’s Cafe, Peppercorn and forthcoming Pietro’s CoalOven Pizza.
Q&A
26 SEPTEMBER 2013
REGIONSBUSINESS.COM
IBX’S CONTINUED
FOCUS ON INNOVATION Independence Blue Cross believes the Greater Philadelphia Region can be the Silicon Valley of healthcare. There may be no other person who believes that more than Tom Olenzak, Director of Innovation at Independence Blue Cross. He sat down with Region’s Business to discuss what strides IBX is making in terms fostering the community for healthcare innovation.
What’s the elevator pitch for IBX’s Innovation Department? Our innovation program has three main goals — building an internal culture of innovation, making our 7,500 associates ask, “What if?” and “How do I make things better? How do I make our members healthier?” We’re doing that through training, consultants, innovation ambassadors. Secondly, we’re looking to bring innovation in from the outside, so that’s building relationships with Penn, providers, the innovation community. And it’s not just looking for technology or ideas that we can bring in to make business better, but it’s also looking for new energy — ways to bring creativity into healthcare. And our third pillar stems from the fact that we’re a 75-year-old non profit. We believe this region has the core elements to become the Silicon Valley of healthcare tech-
nology... We’re sponsoring a lot of events within the startup community. We really believe that with corporate leadership we have a lot of what it takes to build up this area. With healthcare reform coming up, how important is innovation for the industry in order to ease the transition? In some ways, reform is a challenge. The vast majority of our investment dollars have to go to mandates — that’s the nature of our business. The tax we’ll have to pay on some parts of our business will be north of 80 percent, and that draws money out of the system. In that way, it’s a challenging business to innovate in. On the flipside, there are pieces of reform that have really brought in drivers of adopting new business policies. A good example is innovation we’ve seen with hospital readmis-
sions. Now that hospitals are financially responsible for any readmissions within 30 days on certain conditions, hospitals are incentivized to invest in ways to prevent those and I’ve seen dozens of startups that are using fantastic workflow, infomatics, mobile technology to address that problem. Not all are going to survive — some are not even going to work — but the energy and creativity going into solving that problem is very impressive. For you personally, what’s some of the most impressive bit of innovation you’ve seen in the healthcare technology community recently? That’s a tough one! I’ve seen a lot of this technology, a lot of the ideas, I’ve seen for 15 or 20 years. And it’s sort of a little bit of a paradox within health and IT, that the ideas, honestly, are pretty obvious. The execution in being able to put it together and creating a business model that works is what’s really hard. And there is no viral adoption, Facebook, Groupon kind-of model that exists in healthcare — it’s a very fragmented, very regulated customer base. It’s got a lot of data silos. There’s a lot of creativity and a lot of energy. It is very rare, I think, that you see a groundbreaking idea. But what’s really interesting, and a big opportunity in healthcare, is applying things that we’ve learned in other industries. You take ideas from financial services, retailing, any customercentric business, healthcare can learn from it.
IBX.com/company_info/innovation/index.html
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BUSINESS AND POLITICS
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Liquor, Lodging Lobbies Say No To Drink Tax BY MELISSA DANIELS HARRISBURG — A proposal to add an extra tax on alcoholic beverages in Pennsylvania’s financially distressed municipalities has drawn the ire of the liquor industry. David Wojnar, vice president of the Distilled Spirits Council, said “enough is enough” for taxes on drinks in Pennsylvania. Even New York, which boasts some of the highest taxes in the nation, has a lower state tax burden on spirits, he said. “At a time when restaurant patrons are worrying about their wallets, and small businesses are deciding between raising prices or laying off bartenders and busboys, this tax increase would make life that much harder for a lot of people,” Wojnar said in a press release. The Local Government Commission Act 47 Task Force is prepping draft legislation that would give municipalities a way out of Act 47, the state-run program for fiscally distressed cities, townships and boroughs. The proposal gives a five-year exit plan for Act 47, which includes the option to enact three different taxes, with a court’s approval. One is the “Optional Distressed Municipality Alcohol Consumption Tax,” an up-to-10 percent tax on alcoholic beverages sold at retail in bars and restaurants. Similar taxes already exist in Philadelphia and Allegheny County.
The Pennsylvania Restaurant & Lodging Association also voiced opposition to the proposed tax. Government affairs representative Melissa Bova said giving an option to levy the tax is no different than “signing new taxes on the dotted line.” “Enabling municipalities to adopt drink taxes would quickly lead to a patchwork of local drink taxes across the commonwealth, hurting Pennsylvania consumers and businesses at a time when they simply can’t afford it,” Bova said. The council’s release pointed out the taxes Pennsylvanians already pay on alcohol: a federal excise tax ($13.50/ proof gallon), the Johnstown flood tax (18 percent), state sales tax (6 percent), and local sales tax (up to 2 percent), plus a variable rate bottle handling fee. Sen. John Eichelberger, R-Blair, co-chair of the task force, said Tuesday the tax is meant to give municipalities a variety of options as they navigate their way out of fiscal distress, including taxes “that would most benefit their economic progress.” Other optional taxes are a local services tax on those who work in the municipality’s borders, or a payroll preparation tax paid by businesses. Co-chair Rep. Chris Ross, R-Chester, said this allows municipalities to pick a tax that won’t necessarily push out their existing businesses. “These are giving people options to try to figure out how to get the revenues in ways that make the most
The “Optional Distressed Municipality Alcohol Consumption Tax” is under consideration for Act 47 cities. sense for them, and actually give them the strongest opportunity for economic development,” he said. The legislation could be introduced in the General Assembly as early as this fall, as the Legislature returns for session Monday, Sep. 23. This article was originally published on Pennsylvania Independent at PAIndependent.com.
26 SEPTEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
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Don’t Let Rhetoric Sway You: We Are Exceptional
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.
Recently Russian President Vladimir Putin took a break from shirtless horseback riding, judo workouts and treasure diving to pen an essay. In it Putin sought to remind Americans that it is “extremely dangerous to encourage people to see themselves as exceptional.” The fact that it ended up on the precious real estate of the New York Times op-ed page is no great shock. The Times wasn’t likely to blanch at the thought of providing a forum for an ex KGB agent. The more interesting story is how it got there. The piece didn’t sound like it was written by a Russian. The reason it appeared as highly polished King’s English is that it probably wasn’t. It was placed by a high-priced U.S. public relations firm, Ketchum. Ketchum’s responsibility for the placement of Putin’s jabs at American exceptionalism in the most important section of the Old Gray Lady is curious. The New York Times receives thousands of submissions of letters and op-eds each year. Only a handful are selected for publication. For those not familiar with the practice of public relations, here’s a little background. It’s not unusual for pieces to be ghostwritten by professionals who parse every word, triple check every fact and assure that every dotted “i” and crossed “t” conforms to the AP Style Manual. Behind this army of professional wordsmiths is another phalange who have cultivated relationships with the media. Their job is to encourage or “pitch” the placement of the pieces written by their colleagues. In this case the PR folks who pitched and arguably wrote Putin’s op-ed worked for Ketchum Inc. Founded in 1923 by a pair of
Pittsburgh brothers eager to get into a nascent advertising industry, the company is now one of the 10 largest PR firms in the world. Their client list has included the U.S. Army, HewlettPackard, Wendy’s and IBM. They also represent the Russian government. According to public filings, Ketchum netted $23 million in fees and expenses from Mother Russia between 2006 and 2012. They’ve picked up more than $1.9 million so far this year. The firm also represents Gazprom, the Russian controlled energy organization that has often made headlines for slugging dependent countries with exorbitant rate hikes. That account has landed Ketchum another $20.7 million since 2006. According to the PR firm’s spokeswoman, the company sent the translated version to the New York Times’ editorial section for consideration. This is standard operating procedure; the firm has also penned op-eds for third-party voices to promote Russian interests in other media, as well. One of the goals of Ketchum’s work was to promote the country as a “place favorable for foreign investments.” There’s some evidence that they were successful. Russian government statistics show direct foreign investment up dramatically this year. Putin claims that he had the idea to write this piece “completely by chance.” Given his controlling nature and the lengths to which he’s gone to project his public image with photo ops from harpooning whales to firing huge assault rifles, this is hard to believe. Understanding the power of PR makes it impossible. After taking a back seat to advertising for many years, PR has emerged as the dominant discipline in the business of getting attention.
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Unlike advertising where media is paid to place items, PR has to earn exposure. Because PR projects clients’ positions and messages through the news media, it carries more credibility and is thus more powerful. The goal of successful public relations is to promote a positive image for the client, in other words to make them look great. No doubt that’s why a megalomaniac like Putin wanted a PR giant on his payroll. There is, of course, the nagging question of whether Ketchum should represent a repressive regime in the first place. There’s also the issue of where the red line should be drawn by the PR industry when it comes to promoting the views of dictators. The jury of public opinion has spoken pretty clearly. Critics have taken the Times to task for printing pure propaganda. Sen. Pat Toomey said he was “deeply skeptical about the motivations.” Sen. Bob Casey called it “obnoxious and misleading.” Sen. Bob Menendez of New Jersey summed it up most eloquently. He said the piece made him want to throw up. Rhetoric is in the top drawer of every PR toolbox. But mere words can’t change facts. The fact is that we are exceptional. We are exceptional not only because of our people but because of our system. We didn’t become such a prosperous, successful and free country by accident. The American free enterprise system allowed us to create the greatest wealth, the highest standard of living and the most charitable people in the history of the world. Our Constitutional system and the American way of life let us earn the right to believe in American exceptionalism.
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POLITICAL COMMENTARY
REGIONSBUSINESS.COM
Fall Session Begins With Return Of Spring’s ‘Big Three’
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.
They say sequels and remakes are never as good as the originals. But when the original was a dud, surely the sequel has to be better. Lawmakers returned to Harrisburg this week for the first of a nine-week legislative session that will stretch from now through early December — they take a few weeks off for Columbus Day and a few more for Thanksgiving, because doesn’t everybody — and the agenda looks a whole lot like what they tried (and failed) to do during the spring. It’s Gov. Tom Corbett’s “Big Three: Part Two.” Here’s where we stand: In February, Corbett said he wanted to privatize the state liquor stores, reform the state pension system and increase funding for transportation projects like roads, bridges and mass transit. The state House passed a liquor privatization bill in March. The state Senate passed a transportation funding bill in June. And nobody did anything on pensions. As any fourth grader can tell you, bills have to be passed by both chambers before they can become law. So despite their claims that they accomplished a small step towards two of the three big initiatives — the Legislature went home for the summer with an “oh-for-three”
hanging around their necks. And Corbett disappeared for a summer of kayaking in the Alleghenys and vacationing in Hilton Head, S.C.. Don’t count on any of the big three making it to the finish line this fall, but transportation funding probably has the best shot. House Majority Leader Mike Turzai, R-Allegheny, on Monday said he wanted a straight up-or-down vote on a $2.5-billion spending plan passed by the state Senate in June. If it passes, the bill would go straight to Corbett. Sounds easy. That is, until lawmakers realize that voting for the $2.5-billion transportation package means voting to increase taxes on gas stations and drivers, along with an increase in vehicle registration fees and drivers’ license fees. Oh, and the plan also includes a new $100 surcharge on all moving violations. The calendar plays a role, too. Lawmakers would have to vote for all those fees and fines and taxes within a year of running for reelection in 2014. And Democrats already are making some noise about wanting to include a tax on natural gas drilling companies as part of the transpor-
tation bill, so they might not go for Turzai’s “up-or-down vote” idea. Things in Harrisburg have a way of getting complicated even when they seem easy. Pension reforms are desperately needed, but that is even more complicated. Turzai voiced support on Monday for a plan that would see all newly hired state workers and public school employees placed in a 401(K)-style pension plan. The Republican leaders in the state Senate have authored a similar proposal, so it seems like there may be some common ground there. Except the real pension issue is the $45 billion unfunded liability — and moving new hires into a new plan does nothing to deal with that cost, a cost that lots of school districts are having a hard time swallowing. What to do about the liability? No one wants to cut benefits for existing workers or retirees, and borrowing to cover that cost is like paying one credit card with another. And those seem like the only two ideas out there right now. That leaves liquor privatization. And after more than 30 years of effort by multiple administrations, that hasn’t been accomplished. I’m not holding my breath.
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2013: YEAR OF THE INNOVATOR
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Local Graphic Design Firm Tactile Busy With Big Projects
PGW’s new website, designed by Philly-based graphic design firm, Tactile.
BY BRANDON BAKER Philadelphia Gas Works’ website received a spiffy new redesign earlier this month, courtesy of Web development agency The Tactile Group. The revamp is intended to not only create a more dynamic Web-browsing experience on all platforms, but enhance online Pay Your Bill options and integrate a Pipeline Improvement Map into the site’s design. Tactile tag-teamed with fellow Philly-based, social-media-juggernaut ChatterBlast Media to promote the redesign on Facebook and Twitter. Tactile was formed in 2004 by CEO Marc Coleman using, he said, $75,000 of personal funds and $25,000 from friends. The company has grown from two to nine employees since 2007 — a team that spends its days working primarily with government-agency clients to make their websites compatible with today’s ever-growing and mobile-oriented media landscape. “We consider ourselves cutting-edge, not bleeding-edge,” Mr. Coleman said. “We want to adopt technologies and strategies that are effective, and not necessarily fresh out of the box. … I’m not looking to impose problems upon clients, I’m looking to solve them.” Included in their client roster: the U.S. Depart-
Steadily, but almost quietly, Philadelphia has become a hotspot for entrepreneurs. The combination of great ideas, available capital and a welcoming environment have set the stage to make 2013 a breakout year for innovation and new businesses.
Tactile CEO Marc Coleman
ment of Education, the Philadelphia Department of Health, the Philadelphia Department of Bureau Pensions and the Philadelphia School District. To boot, Mr. Coleman emphasized that Tactile — in a more recent attempt to broaden its horizons in the Web development industry — also works with commercial and nonprofit groups like the Philadelphia Orchestra and the Pennsylvania Arts and Education Partnership. He’s also projecting monumental year-over-year growth moving forward: a surge to $5 million in revenue and an uptick to 20 employees by the end of 2014.
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2013: YEAR OF THE INNOVATOR
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21-Year-Old Launches New Shared AboutOne Founder Shares Metalworking Studio In Fishtown Lessons On Networking DIARY OF A STARTUP
Joanne Lang, founder and CEO of family-planning software AboutOne, ruminates on her difficulties with networking, and how she’s learned to improve. In her words: I’ve often said that the reason I had the courage to leave my job at SAP and found AboutOne was because someone believed in me and gave me a chance. For any startup, support from others is critically important and I have benefitted greatly from the willingness of investors and established companies to bet on my ability to turn the vision of my company into reality. Just last month, I was invited to present to NCET2 for their “GLOBAL 1000” startups showcase and conference. This event is a transaction-based conference for startups to meet the most active Global 1000 venture investors to make deals with them in their various areas of interest. Five companies from my portfolio were asked to present and I was the one lucky enough to be selected by 10 of the Global 1000 companies to fly to San Mateo this week for meetings at the event. To be honest, there are times when I just don’t feel like going to an event – no matter how great the perceived opportunity. Sometimes it’s because I’m nervous about meeting new people while I am sure people don’t think this of me, I am actually quite shy and networking does not come easily to me. Sometimes I don’t want to go because I’m just too busy. In this case I had to travel for 18 hours and take a red-eye so I could get back home in time for back-to-school night for three of my sons — in addition to a branding workshop and preparing for a board meeting. Just writing this makes me break into a sweat, especially when you add in homework, soccer, band, piano and swimming for four boys. (Whew!) In spite of these conflicting feelings, I’ve found that when I force myself to go to an event I don’t feel like attending, it turns out to be very worthwhile. The NCET2 event was just that kind of experience. I met interesting startup support teams from American Airlines, Microsoft, Dell and The National Cancer Institute, as well forward-thinking managers from Reckitt Benckiser and Schlumberger. I’ll learn more about the outcome of attending this event and I am happy to share, so you can learn with me, which events add value and which do not. In the meantime, here are my lessons learned about preparing for and attending events like these: 1. Prepare in advance as much as possible. Research backgrounds of the people you know will be there. We printed one sheets on each of the attendees and companies I wanted to meet, but we did not give ourselves enough time to prepare for this. 2. Smile at people. I always forget this, but I know that when I am nervous and people smile at me it’s such an icebreaker. I met lots of new people but I want to work harder at just walking up to someone new and introducing myself. 3. Set a goal for your event — the minimum you would like to come away with. My biggest takeaway is that without the support of others who are willing to take that step forward and give you a try, you can never be successful. Have you believed in someone, and given them a chance?
Dave Wade Brann, founder of the Carbon Collective, cuts a piece of metal with an oxy-acetylene torch. TECHNICALLY PHLLY
BY JULIANA REYES When his mentor, metal sculptor Bob Phillips, passed away last year, Dave Wade Brann couldn’t stand the idea of Phillips’ Fishtown studio getting into the wrong hands. “I didn’t want to let it become a condo or get gutted,” Brann said. “I wanted it to continue to be an art space.” So he worked with Phillips’ widow, Cheryl Levin, to turn the 3,000 square foot space into a shared metalworking and educational space. Brann, 21, who studied under Phillips in his studio from the ages of 13 to 15, is calling it The Carbon Collective at Phillips Metal, paying homage to the prominent local artist whose metal work can still be seen along Girard Avenue, near Fairmount Park and inside the Rittenhouse Hotel.said. The Carbon Collective, a membership-based studio for makers of all levels, is another iteration of the collaborative “makerspaces” that are cropping up in the riverwards, like The Philadelphia Sculpture Gym and 3rd Ward. The space, which is grittier than the polished urban chic of 3rd Ward, is equipped with welders, power hammers, plasma cutters and a forging station, as well as a sound system that filled the walls with electronic music when Technically Philly visited recently. Since its launch in July, hobbyists, professionals and amateurs have all approached Brann about using the space. There was the guy who wanted to build motorcycles in the studio, one who wanted to make chef ’s knives
and another who created lamps with found objects. There were also the two separate people who wanted to learn how to make engagement rings out of meteorites. So Brann found someone to teach a workshop on it. For Brann, The Carbon Collective is about democratizing the workshop landscape. “Not everybody has the option to have a workshop,” he said. “And they should.” The Audobon, N.J. native used to work as an electrician and now does custom metal work, from high-end light fixtures to intricate wrought-iron gates to large scale art installations at festivals. He hopes The Carbon Collective can become a place that artists come to do big metal sculptures and a place to be inspired, much like he was when he first stepped foot in the space when he was 13. This article was originally published on Technically Philly at Technical.ly/Philly.
Carbon Collective’s forging station. TECHNICALLY PHLLY
2013: YEAR OF THE INNOVATOR
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The One Clause Every Loan Agreement Should Include
Nicholas J. Speers is a Certified Public Accountant in the Philadelphia office of Citrin Cooperman, an accounting, tax and business consulting firm. He can be reached at nspeers@ citrincooperman.com.
CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
Accounting standards are an ever-changing landscape in today’s world. At the recent G20 summit in Moscow, world leaders made a renewed push for the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board to complete their convergence efforts. As this project progresses, we are likely to see significant changes to various aspects of accounting rules. Many business owners tend to view these changes as compliance issues that don’t fundamentally impact their business. However, depending upon the structure of a company’s debt agreements and covenants, these accounting changes can have a serious impact on a business. For example, the FASB is proposing a new standard on accounting for leases that would require the present value of many operating leases to be recorded as debt on the balance sheet. The recording of additional debt and the associated interest expenses could impact a company’s ability to comply with financial covenants included in their loan agreements, many of which use ratios of debt and earnings. In this case, an otherwise healthy business may move from being compliant to being non-compliant with their covenant simply as a result of changes in accounting rules. Companies have faced this issue in the past. In 2007, accounting rules were changed to require companies to recognize the unfunded portion of their defined benefit pension plans as a liability on their balance sheet with a corresponding reduc-
tion in equity. As a result, many companies found themselves in violation of minimum equity covenants and needed to renegotiate their borrowing agreements. When a covenant is breached, a bank often will simply grant a waiver of the covenant as a courtesy to their client. Some business owners may have encountered this in the past and might therefore view breaching a covenant as “no big deal.” However, the manner in which banks respond to such matters can change very quickly depending upon the interest rate environment. Business owners, therefore, should not rely on being able to obtain a waiver from the bank. For example, the market currently is predicting interest rates to rise as the Federal Reserve winds down the stimulus measures that were put in place at the height of the recent recession. During times of rising interest rates, banks see their margins compress as they begin paying higher rates to their depositors at the same time their income on fixed-rate loans remains unchanged. This may lead them to become very aggressive in enforcing covenant violations and forcing borrowers to pay significant waiver fees or to renegotiate the agreement on terms that are more favorable to the bank. This is particularly true for fixed-rate debt agreements, which are a key factor in banks’ margin compression. Similarly, if the financial condition or the risk profile of the business has increased, the bank also
may ask for more favorable terms instead of granting a waiver. By taking an active role in negotiating loan agreements, business leaders can protect themselves from artificial covenant violations that may occur due to changes in generally accepted accounting principles, or GAAP. The key to preventing such issues is to negotiate a “frozen GAAP” clause into all loan agreements. This clause simply states that the covenant will be evaluated excluding the effect of any significant changes in GAAP that occur after the agreement is signed. Such a clause is usually fairly easy to get a bank to agree to and can prove invaluable in avoiding the costs of breaching a covenant, such as obtaining waivers from the banks, being forced to renegotiate loan agreements on less favorable terms, or having loans called. Obviously, there is no way to guarantee against covenant violations caused by economic downturns and the resulting changes in business performance. However, negotiating a frozen GAAP provision into your loan agreements is a simple, low-cost way to make sure that any violations that do occur are driven by economics and not the decisions of the FASB. A significant number of changes are expected to occur to GAAP over the next few years as the project to reconcile U.S. and international accounting standards progresses. It is prudent, therefore, for all business owners to consider negotiating a frozen GAAP clause into their next loan agreement.
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Local Startup To Develop Graphene Solutions were awarded a Nobel Prize in 2010 for their experiments with the material. “There are two parts of our business: The first is just the [development of the] material itself, and then the use of graphene as a conductive film for electronBY BRANDON BAKER ics — specifically for flexible electronics,” said Mike With Philadelphia’s wealth of service companies and Patterson, CEO of Graphene Frontiers. “We’ve seen app-based tech startups, it’s easy to forget that founda- Samsung bendy phones at the Consumer Electronics tionally cutting-edge, problem-solving companies like Show, but the reason you can’t buy one of those today, is there’s a materials problem. Graphene Frontiers still exist — and thrive. “That’s a problem we can solve.” Graphene Frontiers, a carbon-materials supplier The ambitious goal is to standardize graphene as based out of University City’s Science Center, was formed in 2010 by A.T. Charlie Johnson and Zheng- a production material with companies ranging from tang Luo on the back of University of Pennsylvania’s Lockheed Martin to Sony. Graphene has devoted additional resources — as UPStart program, an initiative that combs through the university’s most promising researchers and connects part of a previous NSF grant and a $500,000 friendsthem with business managers. Graphene Frontiers has and-family funding round — to developing a bio-sensor since expanded to five employees and, just last week, application that Mr. Patterson hopes will “disrupt” the received a $744,600 grant from the National Science life sciences industry. Graphene Frontiers will use its latest grant to not Foundation. To simplify the long-winded textbook explanation of only further develop that bio-sensor technology, the company’s signature material, graphene is a single, but scale graphene production in conjunction with honeycomb-shaped atomic layer of carbon that’s been a “major advanced materials company” that he left highly valued by the electronics industry since Ukraine unnamed. “I like to make bold claims about the business, and I researchers Andre Geim and Konstantin Novoselov Company: Graphene Frontiers Founder: A.T. Charlie Johnson and Zhengtang Luo Contact: paige@graphenefrontiers.com
Graphene, a single honeycombed-shape atomic layer of carbon highly valued by the electronics industry.
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really think we’re going to change the world,” Mr. Patterson said. “We’ve got some work to do, but I’m working harder than ever in my life these past two years, and I’m so excited about it. Graphene is a big deal, we’re great at making it, and we’ve got killer applications in the pipeline.”
48 Days to the Work You Love www.conniepheiffspeaks.com Do you find yourself caught in a maze without a plan? Can you imagine going to bed Sunday night, eager for Monday morning to come and your workday to begin? Prepare to rock your world and get into the grove when you uncover the work you love in 48 Days. 48 Days to the Work You Love is a 6-week coaching program designed from the best selling book 48 Days To The Work You Love and No More Mondays. You will discover your unique calling and create a plan to fulfill your passion. If this sounds like you or someone you know then Connie Pheiff has the solution! Find your IDEAL WORK – and LOVE it! www.conniepheiffspeaks.com P: 570.341.2002 ~ M: 570.906.4395 connie@pheiffandsome.com
S AV E T H E D AT E
Inaugural MARCUM
I N N O V A T O R of the Year AWA R DS Celebrating Advancements in Technology, Healthcare/ Biotech, Business Management and Energy Honoring companies that have positively impacted Philadelphia’s economy with their latest ground-breaking innovations Please Mark your calendars!
On Thursday, November 14, 2013 6:00 PM - 9:00 PM Franklin Institute | 222 North 20th Street | Philadelphia, PA 19103 Tickets are on sale for $40. Please contact Jim McDonald at 610-572-7109 or jmcdonald@regionsbusiness.com for more information on purchasing tickets.
We hope to see you there!
Discover the Difference www.marcumllp.com/innovator International Member of Leading Edge Alliance Sponsored by
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WILL THE POCONOS BE THE NEW HOME AWAY FROM HOME? When it comes to vacation homes, a house at the beach is widely considered the best bet for most Philadelphians. But with new factors looming — natural disasters in the face of economic recovery, for starters — more and more Southeastern Pennsylvanians are displaying a new real estate trend... and it involves going north. STORY BY JUDY CURLEE ILLUSTRATION BY DON LEE
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BY THE NUMBERS
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The Poconos’ ranking on the Wall Street Journal’s Top Ten Places To Buy A Second Home
42% Second-home buyers paying for real estate in cash
49% Investment buyers paying for real estate in cash
29 Assets. Investments. And a return on that investment. When looking for a place to park money, real estate is, finally, once more becoming a solid investment opportunity. Especially if its prime real estate. For the affluent investor seeking a diversified portfolio, an affordable vacation home can be part of the financial mix. A second home is more sensible than the complicated mortgage backed securities. More important, the investor has beneficial use, and can generate rental income. And the Pocono Mountain area is emerging as a sound opportunity for second home and investment buyers from the Philadelphia area and beyond, following the 2008 mortgage crisis. Buying a second home, whether as a vacation home or as an investment, has become a positive trend in the U.S. real estate marketplace. According to the 2012 Investment and Vacation Home Buyers Survey prepared by the National Association of Realtors, three market conditions explain why: Mortgage rates are low, home prices are down from their pre-crisis high, and that crisis turned many of those vacation homes into distressed properties. And prepared, prudent buyers in the metropolitan Philadelphia area are pay-
ing attention. Nationwide, many of the buyers are choosing and able to pay cash. For second home buyers, 42% pay cash, and for investment buyers, 49% pay cash, making a mortgage unnecessary. Satisfied with their decision, one third of vacation home buyers say they would like to buy another property within the next two years. They see the growth potential. The Wall Street Journal’s Market Watch places the Pocono Mountains third in its list of the top ten places to buy a second home. Relying heavily on research, it recognized the potential of the Pocono Mountains, reporting last month that “…the Pocono Mountain region features beautiful fall foliage and winter-skiing. And it is a popular destination for people looking for a getaway from Manhattan.” For potential buyers from the Northeast and Mid-Atlantic looking to buy a vacation home or investment property, that ringing endorsement comes as good news. One Philadelphia business executive, Jim Krebs, did his own research and is capitalizing on it financially and personally. Mr. Krebs, Vice President for Software Devlopment at Berwyn-based Vertex, Inc. considers his vacation home in the gated community of Timber Trail
at Lake Naomi Club as one of the best decisions of his life. Bearing out the NAR survey findings cited earlier, he recently bought another lot in Timber Trail with the thought of building a larger home than his current one, or using it as an investment. Only 29 lots remain in Timber Trail, and as with any land bound by geographical features such as mountains and waterways, limited availability increases value. In the wake of natural disasters in New Jersey and Florida, a second home in the Pocono Mountains seems like the safe bet. Coastal areas in the aforementioned states have been damaged by Hurricane Sandy and other storms, causing property insurance to soar. Lakefront property located inland sounds better and better to many hardcharging individuals such as Mr. Krebs. The accessible Pocono Mountain region, within two hours from both Philadelphia and Manhattan, has experienced an upsurge in homebuyers purchasing highend homes in communities with amenities that are more affordable than resort areas associated with high price tags. Putting it simply, there is more bang for the buck. And the place is beautiful, after all. Lake Naomi is the second largest lake, and does not permit power boats, making
Lots that remain in Timber Trail, a gated community at the Poconos
3,000 Acres contained at Lake Naomi resort
1,628 Families with properties at Lake Naomi
$150,000 The minimum price for a property at Lake Naomi resort in the Poconos
$1.3M The maximum price for a property at Lake Naomi resort in the Poconos
22 it ideal for bass fishing and sailing. The club’s general manager, Robert Jones said Lake Naomi boasts 3,000 acres for a total of 1,628 families. Home prices range from $150,000 to $1.3 million for some of the lakefront homes, and amenities are abound. Lake Naomi Club includes the largest heated Olympic pool in the country, a 48,000 square foot community center, a bed and breakfast for overflow guests, and a security team staffed by EMT trained paramedics and retired police officers, as well as several restaurants. Perhaps its most popular feature is a comprehensive activity program for children, so they can learn to sail. But those who want power boating have options, too. The nine-squaremile Lake Wallenpaupack — the largest lake in the Poconos — has many communities offering a great range of home prices. At both lakes, potential buyers visit, and often rent first, before selecting a home from the housing stock.
The Economy Recovering
As the economy regains its traction, people with cash have few choices to park their money, so real estate in desired locales becomes an exciting investment option. As the saying goes, real estate comes down to location, location, location.
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In the case of the Pocono Mountains, this truism makes sense. With time being the most elusive aspect for many hard-charging professionals and successful entrepreneurs, a two-hour drive beats a plane trip. And being able to use a vacation home every weekend makes financial sense. A Bucks County business owner, who asked to be anonymous, is experiencing buyer’s remorse for his purchase of a $2 million home in Jackson Hole, WY. He has visited fewer than ten times in three years, loving it when he and his family are there, but hating the travel it entails. Poconos homeowners include retirees, active boomers looking to buy property that is increasing in value, and families with young children, such as Carolyn Kopchains. The new home is a second generation vacation home. She and her husband owned a vacation home in Killington, VT, before starting their family. Its remote location prompted them to purchase in the Pocono Mountains, where skiing is 15 minutes away. Overall, the vibe is getting more upscale across the region. Lake Naomi Club’s tennis center is nationally ranked, and the region has many gold courses, spas, wineries, and restaurants. And the natural splendor distinguishes the region, whatever the
season. Robert Bussyut, a developer and realtor for Lake Naomi, says that the carefully managed development at many of the newer communities and resorts protects the investment of homebuyers. At Lake Naomi, governance is handled through many committees, including finance and membership marketing that moves up through the board. Members are very involved, as in the case of the midSeptember purchase of a restaurant adjacent to the club. Its decision to buy and refurbish the property was put up for vote, and 94 percent voted yes to the purchase, gaining control to ensure quality development. So the vibe is not only upscale, but also focused on the future of the area. And developers have taken notice.
Development Continues
In the next three years, a half billion dollars of investment is slated to occur throughout the Pocono Mountain areas as developers build convention centers, vacation homes, spas, water parks, and upgrade existing amusements. Anchoring all this carefully planned development, is, in the words of Visitors’
Bureau Vice President and avid skier David West, “our number one asset, the Pocono Mountains themselves.” Properties are selling, homes are being refurbished, and some are even being razed to be replaced by more luxurious houses. Mr. Jones knows firsthand the appeal of a year-round resort. A graduate of the Culinary Institute of America at Hyde Park, he has worked in the hospitality industry for nearly three decades, and recognizes what people want from a vacation community. The club constantly is upgrading facilities and adding activities. Rick Golden, a broker at USA Realty in East Stroudsburg, also owns PoconosBest.Com, an online compilation of the best restaurants, activities, and events the region offers to residents and visitors. Some retro activity at SkyTop includes Iditarod dog sledding. It hosted the National Alaskan Iditarod a few years back. NASCAR racing at the racetrack draws tourist dollars, and Mount Eyre Casino provides plenty of shows and entertainment, along with gambling. Limited lot availability, uncertainty about pending mortgage rate increases, have increased sales at both the low and the high end. Remodeling is up, and
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with tear-downs and new construction. Real estate opportunities are there, and the upside is considerable. Mr. Golden specializes in lakefront homes and has sold 24 lakefront homes in the past eighteen months. Mr. Golden says the number one thing he hears from potential buyers is the desire to own a vacation home that feels different from their primary residence, and the cares of their workaday lives. The relaxed, bucolic splendor of the region is a respite for people who work in high-paced industries and professions. Mr. Bussyut, a lifetime skier who raised his family here, loves that his daughter’s children from Arizona call Lake Naomi home on their very frequent visits. He has clients, like the Kopchains, who are second, third and even fourth generation vacation home owners. The year-round vibrancy of the Poconos make it a cost-effective place to invest in a second home, as homeowners can stay busy with the range of outdoor sports and indoor activities in any season. Vacation home owners and visitors can enjoy the nine state parks and two national parks. Of these, Lehigh Gorge State Park is among the best-loved. The Pocono Mountains served as a vacation and recreation destination for wealthy industrialists, who dammed the river that made Lake Naomi, and built the Harry Packer Hotel in Jim Thorpe. Another part of its history is President Theodore Roosevelt’s Secretary of the Interior Gifford Pinchot, instrumental in establishing the vast parks, including the Lehigh Gorge with its waterfalls. There is history here. And the chance that Philadelphians are now questioning the sure thing of a beach house in favor of a house in the Poconos is materializing. The Pocono Mountains prove to be a a prime asset, providing an investment opportunity in the purchase of a second home, investment property, or part of longterm estate planning. And the most valuable dividend of an investment that has no price — time well spent with family and friends.
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FINE ESTATES PREVIEW
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Historic $1.2M Downingtown Farmhouse This Stock Grange Farm in Downingtown epitomizes historic Chester County, embodying the dignity and simple beauty of its era. The colonial farmhouse is surrounded by age-old stone walls and rolling open fields. The original house dates to 1747 with additions dating from 1812 and 1820. It has been home to a colonel in Washington’s army, the actor Claude Raines, notable authors and accomplished artists. Within 20 thick stone walls are four bedrooms and three baths, and fully updated systems. Nine fireplaces, beamed ceilings, black oak and chestnut floors and a pub with a walkin fireplace convey a poetic sense of history. Situated on 11.5 acres and adjacent to 73 acres of conserved open space, Stock Grange Farm includes a renovated barn/ studio with heating and cooling; a pole barn/garage with water and electricity; a 1 bedroom tenant house; a converted spring majestic stone barn ruins. For more information, please contact Georgianna Stapleton at Georgie.stapleton@prufoxroach.com
891 S Penn Oak Rd. Ambler, PA $1,885,000 MLS#6222361
1308 Meetinghouse Rd. Lower Gwynedd, PA $8,495,000 MLS#6219384
1225 Forrest Hill Dr. Ambler, PA $1,075,000 MLS#6225071
1632 Kriebel Mill Rd. Collegeville, PA $975,000 MLS#6193021
5 Beds / 3 Full and 2 Half Baths
4 Beds / 5 Full and 2 Half Baths
5 Beds / 3 Full and 2 Half Baths
4 Beds / 4 Full and 2 Half Baths
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 park -like rear yard, this gracious home welcomes you.
One of the Delaware Valley’s premier residences “Sonrisa (Smile)” is a gated Art Deco inspired masterpiece designed by Krass & Associates. Sitting on 3.4 acres and offering 14,342 square feet of stunning details designed to meet the most discerning preferences. Rarely does a home of this caliber come to market.
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.
Vacation year round at your own private oasis in tranquil Worcester. Surrounded by 2 acres of manicured natural beauty, this cedar and stacked stone custom home boasts a perfect Southern exposure. Inspired design allows open views from most rooms of the rear yard paradise. Masterfully crafted and maintained a must for the perceptive buyer.
FOR MORE INFORMATION CONTACT JAMIE ADLER or GARY SEGAL KELLER WILLIAMS REAL ESTATE 910 Harvest Drive, Suite 100 Blue Bell, PA 19422 Jamie Adler Direct: 215-654-6016 Gary Segal Direct: 215-646-1600 Office: 215-646-2900 www.garysegalteam.com
Gary & Chris Segal, Joanne Bidwell, Gwen Dyer, Jamie Adler, Daniel Kluger, Steve Adler and Lisa Hasson
NEW LISTING
Each office is individually owned and operated. Information deemed reliable however, subject to errors and ommissions.
MOORESTOWN Magnificent 5 BR, 5 full & 2 half bath estate home loc on 6.5 acres. The gated entrance takes you down a private tree lined drive. The grounds feature a lighted tennis ct, a gazebo overlooking a pond, i/g pool & hot tub surrounded by a bluestone patio. 2 story foyer w/grand staircase is open to the living areas. Features include HW flooring, recessed lighting, 4 FPs, Study, Sunroom, custom kitchen, fin 3rd floor, & a full fin w/o basement w/ full bath. Newer roof (2013). 5 Zone HVAC, security, & phone systems.
NEW LISTING
CHERRY HILL Beautiful custom eclectic home on cul de sac w/4 BR. 4.5 baths & fin w/o basement. Hardwood floors, recessed lighting, 3 FPs & custom finishes t/o. Gourmet kitchen w/ custom cabinetry, granite tops, large island w/ seating & comm grade appls. Large breakfast room with views of the private back yard. Theater & 2 studies all on the main level. Master w/ cathedral ceiling, gas fireplace, walk in dressing room & custom master bath. Laundry hook up on 2nd floor or basement. Fin w/o basement w/full bathroom & sliding glass door to rear yard.
MEDFORD/WOODSFIELD Gary Gardner built estate home w/5 BRs, 5 full & 3 half baths & 3 a car garage on 2.3 acres of professionally landscaped property. 10’ ceilings, 7 gas FPs, Corel “smart house” system & Audio system t/o. Custom kitchen w/commercial grade appliances & butler’s pantry. 2 Story Family Room w/wall of windows. Pool & cabana house. Finished lower level w/bar, gaming area & theater. Perfect home for entertaining. ….
MOORESTOWN Stunning French Traditional home completely renovated in 1999. 4 BR, 4 full baths & 2 half baths. 1st Floor Master Suite & Master Bath w/radiant heat marble floors. Great Room w/gas fireplace. Joanne Hudson designed Kitchen w/ professional appliances. Heated inground pool & Cabana house w/ professional appls & granite. 3 car garage on private drive. 4 zone heat/ AC & fin. lower level w/entertaining & storage rooms. …..Realistically priced at $1,999,000
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OPINION
Greater Philadelphia’s Manufacturing Future Is Promising
Joe Houldin is founder and CEO of Delaware Valley Industrial Research Center
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 is an increasing reference in the general public and business media to a macro trend in our early 21st century national manufacturing economy. It is described as entering the Second Industrial Revolution. With terms like re-shoring, on-shoring and back-shoring, it suggests that a major reinvention of how and where what is made—what is manufactured—is well underway. Manufacturing activity continues to be viewed by economically emerging countries as the doorway to broad-based national prosperity. As such, it is cultivated in many different ways by government policy in countries throughout the world. Of course the world stage in 2013 is very different from the one in 1850 but is still very important to understand where and how developed countries and regions will continue to play. The foundational threshold for a seat at this new, larger table, is and will continue to be some mix of price, quality and service advantage where the plusses of one help offset the minuses of another. Also, we have come to understand or remember that innovation, or an increase in the rate of positive change from the norm, is the secret sauce that produces sustainable competitive advantage. The nation’s manufacturing base has been weathering ongoing global shifts in production, intense international price competition, major demographic shifts and frenetic world markets. Greater Philadelphia’s manufacturing sector, once heralded as the “Workshop of the World,” has also weathered these elements and has done so (in large part because of its diversity) better than many other regions. With a manufacturing renaissance underway, Greater Philadelphia is poised yet again to become a premier region in the business of making things. The Delaware Valley Industrial Resource Center (DVIRC) has witnessed these changes over the past twenty-five years and will continue to provide high value-added services focused on helping companies with profitable growth. In addition to helping companies with operational efficiencies, we now offer a robust suite of services for strategy and new market development focused on growing business value.
The Workshop of the World
From the Greater Philadelphia area perspective, what is happening can just as easily be described as its Third Industrial Revolution. The Philadelphia area was the center of manufacturing for the 13 original colonies and at the center of the “first” industrial revolution. It was in the forefront of the period
when things were made in a low volume, highly customized, craft-based production model; it was in the forefront of the shift to a more mechanized, high volume and low customization model; and it is now at the forefront of the current revolution to a high value-added mass customization model. Just as the 19th and 20th century companies and industries grew to be national in scope and stood on the shoulders of a diverse base of existing companies that were seeded in the 18th century, Greater Philadelphia’s 21st century manufacturing sector will grow, once again, from the existing large and diverse base of manufacturers on the ground today. The future belongs to the entrepreneurs from every size company with an overall environment that enables them to do what they do—make things. The Philadelphia region has that environment and those entrepreneurs.
IF YOU DON’T THINK GREATER PHILADELPHIA IS A MANUFACTURING REGION, TAKE ANOTHER LOOK.’ —JOE HOULDIN
Workshop Redux — A Manufacturing Region
DVIRC and others in the region are helping to usher in the impact and benefits of this next revolution for the Philadelphia region. As a result, our region is again becoming a premier manufacturing region because the firms we work with are cultivating the characteristics that support growth and an increase in individual business value. Profitable growth, innovation in every aspect of the business, greater international market shares, increased productivity, a commitment to lifelong learning and steady job growth—these are the features of the firms that are making Greater Philadelphia a premier manufacturing region. After nearly four decades of unprecedented challenges, manufacturers in the region are poised for growth, reinventing themselves to compete in markets at home and around the world. New products, new processes, new technologies, new markets and new business models—all are ways in which our clients are competing to sound
the message that our manufacturing base is alive, well and formidable. If you don’t think Greater Philadelphia is a manufacturing region, take another look. What you’ll see are companies representing the best American manufacturing has to offer—strong leaders in innovative enterprises with design genius and engineering know-how. Business men and women who want to define the next generation of advanced manufacturing, and who are ready to put Greater Philadelphia on the world map as a premier region in the business of making things. These are our clients: innovative companies selling all over the world, combining world class front-end engineering, design and production with back-end installation and customer service. They are innovative leaders that are unleashing the creativity and imagination of the people they employ. They make things. And they make things happen. We have great respect for the men and women running and working in these companies—their future and the future of their companies are tied to those of the citizens of our region. Greater Philadelphia is emerging once again as a premier manufacturing region—as one of the great workshops of the world. Our mission remains the same: to grow the business value of companies through consulting services, training and education, and networking programs. More than ever, we know that growing individual business value improves the standard of living and quality of life for those who live and work in this great manufacturing region. To learn more, join DVIRC for National Manufacturing Day — Made in America, Industrial Revolution 3.0. Learn how regional manufacturers are innovating, growing, and competing in the global economy. National Manufacturing Day on October 4, 2013 at the Penn State, Great Valley, Musser Auditorium. Industry experts will present, discuss and demonstrate advanced technologies related to 3D Printing, Robotics, Composites and Digital Technologies. Keynote speaker William Taylor is a New York Times best-selling author and cofounder of Fast Company. Bill will provide an engaging talk on leadership, creating value and embracing change. Ryan Sweet from Moody’s Analytics will provide a global, national and regional economic outlook on US manufacturing.
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OPINION COMMENTARY FROM ACROSS THE WEB
Political Clout Counts In Education Struggle Supporters of public education are rallying to demand that the Legislature end its highly political way of paying for public schools and replace it with a predictable, rational formula that is fair to all districts. Their diagnosis of the problem is 100 percent accurate. The question is whether the politicians in power will change a system that gives them the clout to reward favored districts and pet education causes. If a school system is having financial challenges and is well-represented by the party in power in Harrisburg, odds are good it will get special help. When the complaining from constituents about education funding gets too loud, legislators find it easier to placate them with ad-hoc adjustments rather than overhaul a broken system that routinely produces unfair results. It’s a system that works for politicians – it makes them saviors and helps them get re-elected. But it does not produce the “thorough and efficient” system of public education required by Pennsylvania’s Constitution.
II that the presence of the law and the absence of the jury commissioners in our county, because of the commissioners’ vote to do away with the office, will have no discernable impact on the fairness of jury trials held in the county Justice Center, be they civil or criminal. But what the court’s decision, handed down by order without opinion last week, truly signals is the beginning of the end of the state’s outdated Row Office system. Chief Justice Ronald Castille has indicated that his court would look closely at any law passed by the state Legislature doing away with those positions – clerk of courts, prothonotary, register of wills, recorder of deeds, coroner, treasurer – that seemingly have no purpose as elective offices other than for the two major political parties in our state to reward their faithful supporters. As fine a job as our county row officers may do, we agree with those who see no reason why their terms in office should be determined by a ballot box and not a merit review. DAILY LOCAL NEWS 22 SEPTEMBER 2013
To The Buses!
“It’s a dream job and a dream come true,” Ryne Sandberg, Manager, #Phillies @PHILLIES
@PhillyEducation
Hite: in an effort to improve customer service, SDP launched AskPhilaSD today. Visit http://ask.philasd.org for more info #phillyeducation 23 SEPTEMBER 2013
@SDPHite
per math student.” 22 SEPTEMBER 2013
@MichaelZammuto
With the importance of having an online presence becoming more important, it is crucial to be active online to achieve maximum success. 20 SEPTEMBER 2013
We need counselors in all schools. High schools also desperately need school operations officers. 17 SEPTEMBER 2013
@MikeVick We will redeem ourselves 20 SEPTEMBER 2013
PENNLIVE.COM 23 SEPTEMBER 2013
The End Of Jury Commission The state Supreme Court’s decision upholding the law passed by the General Assembly this past summer and signed into law by Gov. Corbett allowing counties in Pennsylvaia that wish to abolish the antiquated office of jury commission to do so is a victory for reason and modernity, and not the end of justice as we know it, as some who opposed the law would contend.
If the Legislature is back in Harrisburg, talk of property tax reform can’t be far behind. Our elected representatives returned to the Capitol Monday. Today it’s the taxpayers, tired of the albatross of property taxes around their necks, who will once again raise their voices asking for change. If the past is any harbinger of the future, they shouldn’t hold their breath. Could this year be different? Many in this region of Pennsylvania are holding on to hope that it will be. Busloads of them will travel to Harrisburg to tell legislators to eliminate property taxes once and for all.
We agree with the assessment passed by President Judge James P. MacElree
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DELCO TIMES
@Michael_Nutter Here’s my permanent educ funding plan $ - liquor ($22M), cigarettes ($80+M), sales tax ($70M), + the additional $155M = $327M/yr in new $ 18 SEPTEMBER 2013
@christopherwink I have a band. I just need someone who knows how to play music. = I have a tech startup. I’m just seeking a technical cofounder. 19 SEPTEMBER 2013
@mims “The United States routinely spends more tax dollars per high-school athlete than
23 SEPTEMBER 2013
CONTENT PARTNERS
@GonzoCSN Donovan McNabb coming out of inflatable Eagle-head with smoke billowing everywhere. Please, if there’s a God, McNabb will do the air guitar 19 SEPTEMBER 2013
@PHLVisitorCntr Ghost tours in Philadelphia have gotten a bit more hi-tech. They’re now offered on a Segway! 23 SEPTEMBER 2013
@StartupGrindPHL Hey @startupleaders, let us know who we should be interviewing next. 17 SEPTEMBER 2013
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BY THE NUMBERS
18%
68%
Consumers said they’d purchase an autonomous, “self-driving” vehicle, according to a survey from ORC International for the Chubb Group of Insurance Companies
Survey respondents that agreed innovation and collaboration within government and between government and industry will be negatively affected by the Obama administration’s cost-cutting curbs on agency travel to conferences and trade shows, according to a survey by Boscobel Marketing Communications and Market Connections
66%
Consumers said they wouldn’t feel safe being a driver in name only
72%
Government employees reporting they have attended less conferences and events in 2013 than in 2012
66%
Respondents agreed that “it will be more difficult to maintain best practices in their fields and that government will become more siloed”
22%
77%
Consumers said they would not feel confident allowing their loved ones to ride in a self-piloted car
Agency respondents agreed that industry will need to become more creative in informing and educating government customers
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53%
The average age that men stop caring about their appearance, according to the survey
U.K. married couples who have stopped caring as much about their spouse’s looks as they did before marriage, according to a Beneden Healthcare Society survey
59
66%
People surveyed who thought it was completely acceptable to give up worrying about looks once entering into a serious relationship, according to the survey
Average age that women stop caring about their appearance, according to the survey
88%
Consumers said they’d pay extra for lane departure warning systems that signal a driver when the vehicle is inadvertently crossing highway lane marker
77%
Consumers said they’d pay extra for a forward collision warning system that can automatically apply the brakes to avoid or minimize effects of a crash
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