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REGION’S BUSINESS
PHILADELPHIA EDITION
A JOURNAL OF BUSINESS AND POLITICS
2014 ECONOMIC OUTLOOK:
PHILADELPHIA
We asked four experts to give us their opinions on 2014 and what it means for business in Philadelphia.
DRANOFF ANNOUNCES LATEST GAME CHANGER FOR PHILLY GOVERNOR RACE HEATS UP AT PENN. SOCIETY WEEKEND NEW TECH TO LET CITY PRIORITIZE 911 CALLS
19 DECEMBER 2013
19 DECEMBER 2013
REGIONSBUSINESS.COM
CONTENTS
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“Don’t tell me what you value. Show me your budget, and I’ll tell you what you value.” — Joe Biden
1900 Arch Street
15 2014 Economic Outlook: Philadelphia
Up to 16,000 SF Retail Space Outdoor Seating Spring 2014 Delivery
12 Significant Initiatives To Keep
An Eye On In 2014
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Weekly Briefing Political Commentary
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New Tech Allows City To Prioritize 911 Emergency Calls
Real Estate News Q&A: Shaun Lyons & Steve Jeffries, Precision Realty Group PRESIDENT AND PUBLISHER James D. McDonald PHILADELPHIA EDITOR Rich Coleman BUSINESS EDITOR Michelle Boyles CONTRIBUTORS Eric Boehm, Charlie Gerow, Don Lee, Scott Staruch, Tim Holwick, Sandy Smith, Judy Weightman, Juliana Reyes, Brandon Baker, Christopher Wink PROOFREADER Denise Gerstenfield ADVERTISING DIRECTOR Larry Smallacombe
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19 DECEMBER 2013
REGIONSBUSINESS.COM
DEALBOOK
FINANCE
Community Gets Bank Of America Branches Community Banks System, Inc. announced the acquisition of eight Northeast Pennsylvania Bank of America branch locations, five in Luzerne County, two in Carbon County and one in Lackawanna County. The deal will add over $310 million in customer deposit accounts to Community’s existing $7.3 billion. Based in DeWitt, New York, a Community Banks’ press release indicates the company plans to continue working with the branches’ existing, local staff in an attempt to ease the transition and maintain service.
Sunoco To Move Majority Of Operations From Center City To Newtown Square While the company’s Logistics division headquarters will remain at 1818 Market St., Sunoco Inc. announced it will move most other operations to the Ellis Preserve development in Newtown Square, Delaware County. The relocation includes both the space leased at the Airport Business Complex in Tinicum Township and the company’s offices at Mellon Bank Center at 1735 Market St. in Center City. The move will take place over two years and take with it more than 500 jobs. In 2004, Sunoco’s office occupied 221,000 square feet of the Mellon Bank Center. Today, that number is reportedly about 60,000.
PHARMACEUTICALS
Malvern Pharma Companies Announce Merger
Wikimedia Commons
Following an announcement from Malvern, Pa.-based NuPathe that it would delay release of a new migraine medication until next year, Endo Health Solutions has agreed to purchase the former for $105 million. The migraine treatment, Zecuity, was approved by the FDA in January 2013 around the same time NuPathe relocated its headquarters. Endo plans to leverage its existing pain management pharmaceutical portfolio to launch the drug in the first half of 2014, pending finalization of the purchase agreement. Under terms, NuPathe stockholders will receive $2.85 per share. Stockholders and shareholders will also have rights to additional payments based on the performance of Zecuity.
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19 DECEMBER 2013
REGIONSBUSINESS.COM
WEEKLY BRIEFING
BUSINESS
City Of Brotherly Love A Center For College Champs On the heels of last week’s Army-Navy Game, the NCAA announced it has chosen Philadelphia as the host city for three major sporting events over the next few years:
R. Kennedy for Visit Philadelphia
Lincoln Financial Field will host the 2015 and 2016 Men’s Lacrosse Championships, through a partnership with Drexel University. Women’s Lacrosse will return to PPL Park in 2015 and 2016, hosted by Saint Joseph’s University. The Men’s College Cup, held in Philadelphia this month, will return to PPL Park with Global Spectrum and Villanova University in 2017. Since the year 2000, 14 NCAA championships have been played in Philly.
CMS Gives Five Stars To Area Nursing Centers The Centers for Medicare and Medicaid (CMS) has awarded Mid-Atlantic Health Services’ Cliveden York Nursing and Rehabilitation Centers a five-star quality of care rating, making them among the highest rated in the country. The facilities have provided post-acute, rehabilitation and nursing care services to the residents of Philadelphia’s Germantown and Oak Lane neighborhoods since 2011. Mid-Atlantic owns and operated five such facilities in the city. Developed to educate and inform consumers, the CMS quality rating system is formulated by comparing data compiled on all of the country’s skilled nursing facilities in the areas of inspections, staffing, and a nine-point physical/clinical quality checklist for individual residents. A five-star rating indicates a facility of “much above average” quality.
Dranoff Formally Announces Latest ‘Game Changer’ For Ave. Of The Arts BY SANDY SMITH It’s been a while since City Hall was the tallest building in Philadelphia. Soon, it won’t even be the tallest building on Broad Street. That honor will go to the 47-story tower, rising some 600-odd feet above Broad Street at Spruce, that developer Carl Dranoff formally announced at a noontime press conference at the Kimmel Center for the Performing Arts, across the street from the building site. At the conference, Dranoff called the tower “a gamechanging project for the City of Philadelphia and the Avenue of the Arts.” The proposed development by Dranoff Properties will consist of a 150-room luxury hotel to be operated by SLS International Hotels, one of the hospitality brands of Los Angeles-based sbe Enertainment Group; 125 condominium units on floors 20 through 47; and a partly above-ground, partly underground parking garage. sbe proposes bringing two of its restaurant brands, Katsuya by Starck and Tres by José Andrés, to the hotel. Dranoff noted that condo buyers would enjoy an unparalleled level of service and amenities in the tower, as they will have access to the same faciliites and services hotel guests will enjoy. Those include concierge service, housekeeping and laundry services, 24-hour food service, meeting rooms, banquet facilities, a landscaped terrace and a sixth-floor amenities floor that includes an 85-foot-long Olympic-sized swimming pool and “a day spa you won’t want to leave,” Dranoff said. “Twenty years ago, I could never have imagined such a property on Broad Street.” The announcement drew a Who’s Who of Philadelphia politicos as well. Mayor Michael Nutter gave the project his official blessing in remarks at the event, as did City Councilman Mark Squilla in remarks during the formal program. Squilla, who has offered assistance to Dranoff on some of his other Avenue of the Arts projects, praised
the developer’s willingness Brian Communications to work with neighbors to address their concerns in order to make major projects happen. He cited Southstar Lofts, Dranoff ’s third Avenue of the Arts building now nearing completion, as a prime example. “When he first proposed it, the neighbors were up in arms,” he said. “I said to myself, ‘It’ll never get built.’ But he met with the neighbors and worked things out. Other political notables in attendance included former Mayor, Governor and Democratic National Committee Chair Ed Rendell, City Council President Darrell Clarke and Councilman Kenyatta Johnson. Dranoff also said the development would pay homage to the legendary record label whose home it will replace, Philadelphia International Records. Label founder and Universal Companies CEO Kenny Gamble, who sold the land for this project to Dranoff, said, “What was sad was when someone invaded our space, intending to destroy it by arson,” he said of the fire that heavily damaged the Philadelphia International recording studios two years ago. “Today was a joyful day because there will be new life here, turning tragedy into triumph.” The project has already been presented in preliminary form to the Washington Square West Civic Association, which will review the zoning variances the project will need. Assuming everything flows smoothly, the SLS International Hotel & Residences tower should be complete sometime in 2015. This article was originally published in Philadelphia Real Estate Blog at blog.philadelphiarealestate.com.
CREW Scholarships Promote Female Collegiate Education Commercial Real Estate Women (CREW) Philadelphia’s Scholarship Awards Committee recently presented $2,500 scholarships to local female college students so that they may continue to pursue education in the real estate industry. Immediate past President and Managing Partner of Linebarger Goggan Blair & Sampson, LLP, Sharon Humble served as chair of the committee and presented the awards to four students who were selected from 28 applicants. Criteria considered included a 3.0 or higher GPA, three letters of reference and involvement in community outreach activities. (Right: Elizabeth Crager, pursuing an M.A. in Geography & Planning at West Chester University, Amanda Hasbun, pursuing an M.S. in Construction Management at Philadelphia University, Amanda King, pursuing a Juris Doctorate Degree at Temple University School of Law, and Katelin Kutchko, pursuing her Master of Architecture Degree at the University of Pennsylvania. )
19 DECEMBER 2013
REGIONSBUSINESS.COM
WEEKLY BRIEFING EXECUTIVE SHOP
WHO TO FOLLOW
Penn Press @PennPress The University of Pennsylvania Press publishes 12 journals and upwards of 100 new books a year. Philadelphia · pennpress.org RT @PennPress: The @planetizen 100 Best Books in City-Making includes William H. Whyte’s City. Thanks, @PennIUR RT @PennPress: Hot Off Penn Press: new books on medieval & early modern history, ethnography today, + the future of nuclear weapons
ToBox Tung and Dai To, owners of the newly opened ToBox, designed their shoe shop to resemble a Mad Men era living room to reflect the aesthetic of their growing clientele. The 19th St. store is full of fine leather shoes, boots, sneakers, bags and accessories handpicked by the pair. Dai even puts old suit fabric samples to use creating handmade, original pocket squares and lapels. ToBox carries lines like John Lobb, Cole Haan and Scarpe di Bianco. A Bespoke app allows shoppers to design their own unique shoes from the material and sole color, to lining and embroidery. ToBox: 25 S. 19th Street, 215-6449435.
MUST-HAVE APP
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VSCO Cam
Dubbed by some as the most-anticipated photo-app of the year, VSCO Cam has been released just in time for the holidays. The manufacturers say the utilities are meant to help users take the best pictures with the least amount of effort so that they can enjoy the moment. Features include: fine-tune editing designed to complement, not define photos, before and after comparison at the touch of a button, an array of preset packs, enhanced organization, a community forum with manufacturer tutorials and tips as well as the ability to import/export images without sacrificing image quality.
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RESTAURANT ROUNDUP
Percy Street BBQ Boasts Unusual Holiday Tree Display Annually Missing from our last holiday tree roundup was an unusual sort from restauranteurs Steven Cook and Michael Solomonov, a beer can Christmas tree at Percy Street Barbecue. The unusual holiday decoration features 400 recycled beer cans topped with a galvanized steel bucket and illuminated all around in the traditional style. Percy Street offers a straightforward selection of smoked and barbecued meats along with Southern inspired side-dishes from Chef/Partner Erin O’Shea. Percy Street Barbecue, 900 South St., 212-625-8510, www. percystreet.com.
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19 DECEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
For PA Politicos, It’s Christmas All Year Long
Eric Boehm is a reporter for Watchdog.org and can be reached at EBoehm@ Watchdog.org. Follow @PAIndependent on Twitter for more.
CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
Pennsylvanians are gathering this week to exchange presents with family and friends, but for some residents of the state, Christmas lasts all through the year. From Turkish rugs to all-expense-paid trips to the Super Bowl, lawmakers and other high-ranking state officials rack up all sorts of goodies from lobbyists looking to generate some goodwill for their special interests. And thanks to some of the least restrictive laws in the nation regarding political gift-giving, Pennsylvania’s politicians have a constant stream of expensive presents waiting to be unwrapped. Under state law, elected officials must disclose all gifts valued at more than $250, unless they are given by a family member or friend. Transportation, lodging and hospitality valued at more than $650 also must be reported. Some say those thresholds should be done away with, so all gifts have to be reported, while other reformers favor a policy of no gifts at all. But for now, gift-giving in Pennsylvania politics is big business. Lawmakers reported more than $43,000 in gifts on their 2012 financial disclosure forms, according to an Associated Press analy-
sis. From 2007 through 2011, lawmakers Moran Industries, a Pennsylvania based company that specializes in trucking, rail reported more than $117,000 in gifts, and warehousing. according to the Pittsburgh TribuneCorbett also reported taking a $11,000 Review. trip to France in 2012, with the cost covThough the filings for 2013 will not be available until April, lawmakers in ered by the Team Pennsylvania Foundaprevious years have reported gifts that tion, which sponsors trade missions. would surely be on every Pennsylvanians’ Ten states have full bans on gifts for wish list. politicians, according to the National In 2009, state Sen. Jake Corman, Conference of State Legislatures. R-Centre, reported getting tickets valued Another 31 states have monetary limits, at $4,000 to see the Pittsburgh Steelers ranging from $3 per day in Iowa to the play in the Super Bowl in Tampa, Fla., Texas limit of $500 for gifts and another where they defeated the Arizona Cardi$500 for entertainment per year. Pennsylvania is one of just 10 states nals to win their sixth title. State Sen. Mike Brubaker, R-Lancaster, with no monetary limits on gifts. Several bills have been introduced got a $10,900 trip to Turkey paid for this year to change the state’s law about by a cultural exchange group. Brubaker political gift-giving. Some would ban gifts also has taken trips to Nova Scotia and entirely while others would place stricter Taiwan in recent years. limits on the value and type of gifts that Senate Majority Leader Dominic can be given. Pileggi, R-Chester, and state Rep. Dan But since the September hearing on Frankel, D-Allegheny, attended confertightening the state gift laws and other ences in Ireland and had the trips paid laws pertaining to lawmakers’ ethics, there for by the hosts. has been little movement on the issue. Even Gov. Tom Corbett has reported For Pennsylvania’s public officials, it’s free trips. In 2012, he accepted $1,400 in free travel for a vacation to Rhode Island always the most wonderful time of the year. paid for by John Moran, president of
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19 DECEMBER 2013
REGIONSBUSINESS.COM
CITY COUNCIL
Council Approves Tax Break For Two Center City Hotels
Timothy Holwick is a freelance writer covering Philadelphia government.
CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
At its weekly meeting on Thursday, December 12, 2013, Philadelphia City Council passed a bill that would provide a tax break for the development of two Center City hotels. Specifically, the bill would allow the developers to borrow $33 million which would then be paid back over twenty years through city tax breaks. The planned site lies at 15th and Chestnut Streets, which is currently a parking lot. Once construction begins, the site will be on its way to becoming both a W and Element Hotel. Project officials estimate the hotels will bring approximately 450 jobs to the area, along with 700 hotel rooms, restaurants, and retail space. The rooms have already been heralded as a great potential boon for the Philadelphia Convention Center’s attractiveness to major event planners. During Council’s meeting, a recess had to be called to put one last agreement in place. City Council’s Committee on Finance had recommended that the developers put a “labor peace agreement” into place with unionized workers at the hotels. When Council’s meeting last Thurs-
day began, no such agreement had been reached and Philadelphia unions had urged Council to vote against the plan. During the recess, the labor peace agreement was completed and Council approved the plan.
GOODE SAID IN A STATEMENT THAT [A $76 MILLION] TAX BREAK, DEDICATED TO ONE CENTER CITY SITE, WAS WRONG.” The vote was not unanimous, however. The bill passed by a vote of 15 to 1, the lone dissenting vote being Councilman Wilson Goode. Councilman Goode had issues during the committee portion of the bill’s journey to passage. He had requested numerical figures on how much the hotels stood to make if built, and why they needed municipal money if they stood to make profit. They could not provide him an answer and it eventually contributed to them
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losing his vote. Councilman Goode actually estimates the tax break to be more in the neighborhood of $76 million on the project that is funded by about 25% public money. Goode said in a statement that such a large tax break, dedicated to one Center City site, was wrong. He went on to say that the site could have been developed without the tax abatement. Construction is expected to begin in early 2014, with an estimated completion time of three years. The overall hope is that the city sees a good return on its investment of tax breaks. Some parts of the Center City district are struggling and projects like this are seen as a potential boost to revenue, which will translate into tax dollars for the city. For now, Councilman Goode made his point and construction will begin. For more news on City Council, visit http://philadelphia.regionsbusiness. com/bloggers/
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19 DECEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
Governor Race Heats Up During PA Society Weekend
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.
In the Gilded Age the Pennsylvania Society Dinner featured smoke-filled rooms where the state’s political brokers cut deals and created tickets. Those days are gone but it’s still an opportunity for candidates to showcase their political skills and build relationships. The Pennsylvania Society weekend remains the unofficial kickoff of the gubernatorial election campaign. The Democratic candidates who attended the annual gathering of the state’s business and political leadership sought to distinguish themselves from the already crowded field. They paraded through events stopping only to hobnob with key politicos or chat with reporters. At a few events they got to speak. Allentown Mayor Ed Pawlowski was the only candidate to host his own event, a well-attended soiree at the World Bar. By the time it was his turn to say hello, his voice was so hoarse from trying to be heard over the other events that he was barely audible. Other candidates chose to make the rounds of gatherings hosted by the state’s largest law firms, banks, colleges, labor unions and trade associations. Presumed frontrunner Allyson Schwartz, the Philadelphia area Congresswoman, got a moment in the batter’s box at a premier event hosted by the Pennsylvania Manufacturers Association. But she didn’t really get wood on the ball. She didn’t appear to even try to connect with the
business community gathered in the opulent Metropolitan Club, choosing instead to serve up a litany of platitudes which, although a safe play, was also a missed opportunity. Faring slightly better was State Treasurer Rob McCord, although he, too, chose to play it safe and not venture into outlining any grand vision of how to address the state’s future. Former Revenue Secretary Tom Wolf made minor headlines by announcing that he would donate the money he’d have spent on a party in NY to food banks in his home area. It was an interesting twist and a look into the kind of campaign the largely self-funded candidate will run. Wolf, incidentally, was still prominent in NY. But the announced field of Democrats failed to dazzle most folks. “Undecided” remains the prohibitive favorite in the race thus far. Which candidate can articulate a compelling vision for Pennsylvania’s future and demonstrate the personal skills necessary to run one of the largest states in the union is an open question and the New York getaway provided few answers. This has led to considerable speculation about the potential candidacies of two who have not announced their intentions: former Auditor General Jack Wagner and Attorney General Kathleen Kane. Most of the “buzz” of the weekend wasn’t about the announced eight. Instead there were
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a lot of “what ifs” focused on Wagner and Kane. That says a lot about the Democratic pack already on the track. Meanwhile Governor Tom Corbett had an exceptional weekend. He was cheerfully ubiquitous, running from one event to another with a spring in his step that was not unnoticed by longtime observers of Pennsylvania’s political scene. He sounded like a governor running for reelection. At every stop he outlined his successes in promoting economic growth and creating jobs. He trumpeted the fact that he has done what the people asked him to do: control spending and keep the lid on taxes. And he outlined a vision for future prosperity for the commonwealth. The weekend was also a victory lap for the Governor and his team who put together a winning coalition of business and labor leaders, local government officials and community activists to secure transportation funding. It was not only a major legislative win for him, but a victory for Pennsylvanians who will greatly benefit from safer roads and bridges and less traffic congestion. Many of Pa.’s chattering class have talked about Gov. Corbett’s perceived vulnerabilities going into his campaign. By the end of the Pennsylvania Society weekend few were selling him short. Virtually all acknowledge it’s going to be a horserace. That race is clearly on.
19 DECEMBER 2013
LEGISLATIVE UPDATE
REGIONSBUSINESS.COM
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State House Concludes 2013, Reduces House Size BY SCOTT STARUCH While the state Senate concluded its 2013 voting days last week, the state House of Representatives finished its 2013 voting days on Monday and Tuesday this week.
TAXES
Last week the Senate Republican and Democratic Policy committees held a roundtable hearing on the issue of property tax elimination, largely focusing on Senate Bill 76 by Sen. Dave Argall (R-Schuylkill). Among those testifying was the Pennsylvania Chamber of Business and Industry which is opposing the bills (S.B. 76 and its counterpart in the state House, H.B. 76). On its website, the chamber explains “that rising property tax rates are a burden and that the legislative effort to reduce or eliminate them is well-intentioned. However, …both bills would gradually eliminate school property taxes by increasing the Personal Income Tax and increasing and expanding the Sales and Use Tax to numerous products and services that are currently exempt.”
GOVERNMENT REFORM
This week a government reform bill by Rep. Sam Smith (R-Jefferson County), House Bill 1234, was featured on the House’s agenda. H.B. 1234 would reduce the size of
the House of Representatives to 153 members from the current 203 members. The House Republican Caucus explains, “At 203 members, the Pennsylvania House of Representatives is the second largest, and second most expensive, legislature in the country. H.B. 1234 would create 153 House districts as part of the 2021 redistricting process (following the 2020 federal census). With a current population of 12.7 million (according to the 2010 federal census), the 153 districts would represent approximately 83,022 people per district, which is not considered a significant change from the current 62,573 with 203 districts.”
ENERGY & ENVIRONMENT
Congressman Charlie Dent (R-15th District) joined America’s Natural Gas Alliance and UGI Utilities for a Think About Energy Briefing on Tuesday in the Lehigh Valley. The event showcased opportunities and benefits available to local businesses converting to natural gas. Attendees learned how the price and reliability of increasing natural gas supplies from formations such as the Marcellus Shale offer a new competitive edge to U.S. commercial and industrial customers. Learn more at www. thinkaboutit.org and at www.ugi.com. On Tuesday, Reps. Gene DiGirolamo (R-Bucks), Tom Murt (R-Montgomery/Philadelphia), Harry Readshaw
(D-Allegheny) and Pam DeLissio (D-Philadelphia/Montgomery) announced a plan to impose a drilling tax within the Marcellus Shale natural gas formation in Pennsylvania. According to Reps. DiGirolamo and Murt, “The proposed legislation calls for a 4.9 percent severance tax to replace the impact fee that was enacted in 2011.” On Monday, the House Democratic Policy Committee held a public hearing in Harrisburg “to consider options for addressing climate change.”
GAMING
The Pennsylvania Gaming Control Board announced this week that “Revenue from table games played at the 12 Pennsylvania casinos was $63.7 million in November 2013 … That amount represents a 14.1% increase in revenue from table games played during November of this year compared to November of 2012. It was also the second largest monthly table games revenue amount trailing just the March of 2013 total of $67.4 million.” The Gaming Control Board’s monthly report, posted at www.gamingcontrolboard.pa.gov, also shows $9,131,899 million in tax revenue generated from table games last month. Contact Scott at sstaruch@quantumcomms.com for additional information on any of the above news.
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19 DECEMBER 2013
EMPLOYMENT LAW
REGIONSBUSINESS.COM
Significant Initiatives To Keep An Eye On In 2014
Rick Grimaldi and Lori Armstrong Halber are partners in the law firm of Fisher & Phillips LLP. Follow them on twitter @LoriRickHRLaw.
Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
In light of President Obama’s recent speech that he intends to focus the remainder of his term on income inequality and his pronouncement that “workplace fairness is the key to economic growth,” employers can be sure that there will be a lot to keep watch on in workplace law in 2014, and beyond. As a result we can expect the Administration and Congress, along with the states, will be very busy with legislation and regulations that will impact business; some positively, some not so much. At this time of year when everyone is making lists and checking them twice, here is a (non-exhaustive) list of some of the most significant initiatives that may affect business in the coming year. Possible amendment to Title VII The Employment Non-Discrimination Act (ENDA) would prohibit discrimination in hiring and employment on the basis of sexual orientation or gender identity by employers with at least 15 employees. ENDA, which has been introduced in every Congress since 1994 except the 109th, was approved by the Senate on November 7, 2013, 64–32. However, House Speaker John Boehner (R-OH) has already said he will not bring it up for House consideration, effectively killing the bill for the foreseeable future. Expect this, however to eventually get done as more and more pressure is put on the states and federal government to remove what most call the last area of legalized discrimination in this country. The NLRB is back in business There is now a fully constituted Board, a confirmed General Counsel and no questions as to the legitimacy of any appointments. Employers can expect the Board to seek reversal of Bush-era precedents. Among other things, the Board is expected to take decisions which will give it the opportunity to reverse decisions that: FZ]^ bm ]bù\nem _hk ngbhgl mh hk`Zgbs^ temporary workers; Ikhab[bm^] ^fiehr^^l Zg] ngbhgl _khf using company e-mail for union solicitations; K^lmkb\m^] Z\\^ll mh ^fiehr^k ikhi^kmr for union organizing efforts; and FZ]^ bm fhk^ ]bù\nem _hk ngbhgl mh organize smaller, more union-friendly bargaining units. By the same token, it would not surprise anyone if the Board decided to revisit
whether Weingarten rights (the right of a union employee to have a representative present for a meeting which he reasonably expects to involve discipline) apply in a non-union setting — a rule which seems to change from administration to administration. Remember, the President owes a lot to organized labor who twice poured significant resources into his campaigns. They want a return on their investment. Expect to see some form of easing of union election rules and “card check” processes, making it easier for unions to gain a foothold in non-union businesses. Use of Criminal Records in Hiring The state of Texas has sued the U.S. Equal Employment Opportunity Commission in federal court in Lubbock asking the Court to bar the agency from enforcing the guidance it issued in April 2012 concerning the use of arrest records and criminal convictions when making employment decisions. This is an example of some of the backlash from the states to “overactive” federal agencies. Expect to see more challenges to the EEOC’s and other federal agencies overreaching into the business practices. New Benefits Obligations In 2013, the U.S. Supreme Court ruled in United States v. Windsor that federal laws that apply to opposite-sex spouses must apply equally to same-sex spouses. This ruling invalidated a key provision of the Defense of Marriage Act which defined marriage under federal law as between one man and one woman. Employers need to understand how their obligations under the Family and Medical Leave Act and any other benefits laws have been impacted by this ruling, and modify their policies accordingly. Expect that with media scrutiny and as we enter a new political season, these and other issues involving same sex couples will remain in the fore. Minimum wage President Barack Obama is throwing his support behind congressional Democrats’ proposal to raise the minimum wage (which has not increased since 2009) to $10.10 and peg it to inflation. At least 20 states and some major localities have already increased their minimum wages above the federal level of $7.25. A handful of states have chosen to index their statutory minimum wages to measures of inflation over time. This issue is critical to
the President’s income equity pronouncements. He and organized labor, along with a willing media are attempting to make this the social issue of our time as exemplified by the fast food strikes. At issue is the very legitimate concern that the cost of living has far outstripped the ability to survive on the current minimum wage. Opponents suggest that the market should be able to sort this issue out. New OFCCP Requirements In late 2013, the OFCCP released final rules with substantial new requirements for government contractors relating to the employment of veterans and of individuals with disabilities. These rules impose major new obligations relate to hiring [^g\afZkdl% ZùkfZmbo^ Z\mbhg% k^\hk]keeping and other compliance measures, and contractors will be required to comply by March 2014. These new requirements are not as sexy as some of the other initiatives on the list but nonetheless will have major impact on businesses that directly or indirectly do business with the federal government and could lead to increased costs. Closer to home in Pennsylvania, we have already seen a positive change in the Prevailing Wage Act threshold for public projects. There has renewed talk of Right to Work legislation but it is expected that there is no political will; particularly as we approach an election year. There are also a handful of Workers Compensation reform bills making their way around the General Assembly. Again, any meaningful reform will be off the table until after the election but, in what might be considered a New Year’s gift to business, the legislature could eliminate a little known loophole in the workers’ compensation law that, based on a decision by the Pennsylvania Supreme Court, forces Pennsylvania businesses to pay for the same workplace injuries twice, in contravention to the spirit of the Workers’ Compensation Act. By amending the socalled exclusivity provision of the Workers’ Compensation Act, Pennsylvania would be on equal footing with other states competing to attract industry. So have a wonderful holiday and (with apologies to Charles Dickens) before you dot another “i” cross another “t” put coal on the fire and get ready for what is expected to be a very interesting year ahead.
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NEWS
Tech Impact Wins $200K BOA Grant Tech Impact, the Callowhill nonprofit that helps other nonprofits use technology, won a $200,000 grant from Bank of America, the organizations announced at an event earlier this month. It’ll use the money to expand its services nationally, a goal of the organization’s and one reason why the organization rebranded nearly a year ago, as well as expand its ITWorks young adult tech training program. People’s Emergency Center, the Powelton Village nonprofit that serves the homeless, also received the $200,000 grant, which comes with leadership training. PEC will use the money for a rebranding campaign that will help the organization reach more people. PEC was an early KEYSPOT partner and ran public computer labs as part of the KEYSPOT program. — TECHNICALLY PHILLY
‘News Before It Happens’ Pitch Wins $7,500 Make a prediction and have users vote on the likelihood of it happening. That effort to gamify news engagement is called ‘News Before It Happens’ and won University of Pennsylvania senior Samara Gordon $7,500 in seed funding to test the project. She competed against a dozen of her peers in an Entrepreneurial Journalism class taught by Penn professor Sam Apple, himself a one-time media startup leader in a semester-end pitch night last week. — TECHNICALLY PHILLY
INNOVATION
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CoLabination Brings Storytelling To Brands Business: CoLabination Founders: Scott Latham, Ryan Erfer Contact: alexiscanary@colabination.com
BY BRANDON BAKER Scott Latham didn’t find his business idea, so much as it found him. Upon launching his street-wear clothing label in Philadelphia, he realized he faced a serious brand problem while trying to expand: Explaining not just the face value of his products, but the story behind them that made them unique. “I realized there was a massive problem — not just with my brand, but with all of these [local] brands trying to grab exposure. I knew there had to be a solution,” Mr. Latham said. “There’s a massive demand right now ... for unique storytellerlike brands. All of these small businesses usually represent a unique culture or some sort of interesting backstory, and that’s what really creates value with customers and local brands.” In the coming weeks, Mr. Latham and his team of ten will launch the beta version of ecommerce site CoLabination, a branding platform that benefits both small businesses and consumers. Each participating brand — to start with, Philadelphia businesses — will host a virtual showroom on the website that explains its history and introduces staff, company culture, etc. Consumers view products through “The Rolodex,” a collection of products, and they can also add products to a virtually stored “X Collection.” The company will then take a percentage of all transactions originated through the site. Long-term, Mr. Latham hopes to use social media as a bigdata tool to tailor the experience for users. Thus far, he empha-
CoLabination team
sized, the company’s drafted a pool’s worth of “letters of intent” to small businesses and received “dozens” of positive responses from businesses in cities across the country. “What we want, is to solve this problem of fragmentation emerging companies are facing right now,” Mr. Latham said. “We hope that in a year we’re able to move from what we’re trying to accomplish locally here in Philadelphia to a mass level.” CoLabination, which is based out of the Science Center at 37th and Market streets, is seeking a funding round of $750,000.
New Tech Allows City To Prioritize 911 Calls BY JULIANA REYES
spokesman for the national firefighters’ union told the Daily News. Implementation will cost the city between $400,000 to The city responded last year to about 235,000 calls about medical emergencies. Every 911 call got the same response from $500,000, as well as other training and long-term costs, said Eryn Santamoor, a former Fire Department official who led the city paramedics, paramedics have said. project before she left the city this month. This spring, that will change. Used in major cities across the United States, as well as LonThe city launched a contract in late October that will allow the Fire Department’s dispatchers to prioritize calls and deter- don, Sao Paolo and Dubai, Priority Dispatch‘s technology is a mine the appropriate response for each call, said Michael Resn- 30-year-old, tried and true system, Santamoor said in an interview before she left the city. It’s one the city tried and failed to ick, the city’s director of public safety. “Every call that comes in now gets a response with lights and implement in the late 90s because it couldn’t get buy-in from sirens,” Resnick said, but not every call requires that. Not every everyone necessary, Santamoor said. Now is always going to be better than later because the city call requires the most highly-trained employees or the most expects the number of 911 medical calls to increase by two to sophisticated equipment, either, he said. The new technology, from Salt Lake City, Utah-based Priority three percent every year, Santamoor said, adding that hopefully, Dispatch, will prompt dispatchers to ask a series of questions. the city will be able to use data from the new system to design They’ll then enter the answers into a computer system that will better ways to respond to 911 calls. The Police Department uses a dispatch system that Penn determine the appropriate response. The new system will help the city more efficiently use its and Temple police have had access to since 2000. That way, resources and respond to citizens more quickly and more effec- university police can respond to 911 calls that city police have yet to get to. tively, Resnick said. This article was originally published in Technically It’ll also hopefully bring relief to the city’s paramedics, who are “likely among the most overworked in the country,” a Philly at Technical.ly/Philly.
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INNOVATION
Brio Solutions Refocuses For Success BY BRANDON BAKER The roots of Fort Washington, Pa.-based Web services company Brio Solutions, which nestled into the No. 30 spot on Philadelphia’s Fast 100 list this year, are about as all-American as they come. Founders David Rose and Adam Cohen grew up in Bucks County and, after surviving the rigors of high school, college and post-grad work, decided to open their own business — a “Why not?” realization. “We were friends from high school, and had always talked about starting a business when we were in college,” Mr. Rose said. “Then we both got full-time jobs out of school and were talking to each other about doing something — starting a company — and, having built websites on the side, it kept snowballing and referrals happened and then we left our full-time jobs to work for the company.” But no all-American story is enticing without rocky waters: The two finally opened shop in 2008, when waters were at their most uproarious, and they — to say the least — hit a snag. “It was a terrible time to start a business,” Mr. Rose said. “I think we were just throwing darts at the wall initially; we didn’t know what we were doing, and it started slow because of the recession. We wasted a
lot of money along the way, but in the past four years, we’ve had some pretty good traction, and now I think we’re structured to continue to grow quickly.” The reason for the uptick? A refocusing from small web design with startup-sized business to customsoftware development with medium-sized companies — those that rake in $10 to $50 million in revenue per year. Included in its client roster: FocusPoint Global, Belvedere Books and Tozour Energy. The company has since witnessed revenue growth of 60 to 100 percent per year. The broader solution the team offers, Mr. Rose said, is a new take on how companies take advantage of their IT departments. “IT is typically not involved in the decision or the conversation, so a lot of times they’re saddled with decisions that were not informed decisions that [take technology into account],” Mr. Rose said. “That’s why we get involved at the executive level, to make sure ... clients understand what technology is doing for them and what considerations need to be made in making decisions moving forward.” Brio Solutions currently boasts five full-time employees, and is currently looking to hire another. It will also expand its IT support services in the year ahead.
DIARY OF A STARTUP
LifeVest Reflects On Health Expo On Tuesday, we were fortunate to be invited by Towers Watson, a global professional services firm in the line of HR and risk management, for their Technology Health Engagement Expo. It was an event that would pull together several of the pioneering companies in the digital health arena who are looking to revolutionize the way the industry works. For us, the event provided an invaluable opportunity to network with prospective clients and promote the LifeVest idea in which we so strongly believe. It also served as a prime opportunity to network with companies invested in similar goal. In attendance were companies like FitBit, a line of wristbands that track fitness and other health factors in order to encourage people to stay active. Also present was Teladoc, a 24-hour doctor service via phone or video, which allows users to avoid the high rates of emergency care for low-risk conditions. Corporate health is clearly shifting towards the digital world, and the field is apt for startups. The challenge is keeping people engaged and producing real, beneficial results. It’ll take innovation and full utilization of the social and instantaneous nature of the digital worlds to produce those real improvements in health and substantial ROI. — JON COOPER, LIFEVEST FOUNDER AND CEO
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REGIONSBUSINESS.COM
ECONOMIC OUTLOOK: PHILADELPHIA What does 2014 hold for Philly business? Four experts gave us their forecasts for next year. STORY BY JUDY WEIGHTMAN ILLUSTRATION BY DON LEE
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16 The View From The Fed
The Federal Reserve Bank of Philadelphia tracks big picture economic data, and regional economic adviser Luke Tilley is seeing some encouraging trends in the Philadelphia metropolitan area, which covers the city and adjoining suburbs, plus southern New Jersey and northern Delaware. Overall he’s projecting slightly stronger growth than in 2013. “Unemployment is still fairly high — 7.8 percent in October — but trending downward,” Tilley said, with Philadelphia’s rate moving pretty much in step with the national rate. “I think that will continue. I’m currently predicting it might be as low as 7 percent by the end of 2014.” The strongest growth sector locally is in education and health, mainstays of the Philadelphia region’s economy. “We’ve seen about 14,000 new jobs” in the education/health sector in 2013, Tilley said. The majority of those jobs were in health care, in settings ranging from large institutions to small ambulatorycare providers. This makes health care a major driver of economic growth in the region, especially, he points out, since it is driven by demographics rather than the business cycle. He expects health care to remain strong in 2014. The impact of the Affordable Care Act will be felt in the long term. In the short
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term, Tilley predicts hiring in call centers and similar non-medical support staff. In 2014, people will be responding to “the adjustment that’s going on for affordable care,” he said. Many employers will postpone hiring decisions until the implications of the ACA become clear. The prospects for the other half of that sector, education, are not quite so rosy. “We’re still experiencing adjustments for anything funded by state and local government,” Tilley said. “The cycle lags behind what’s happening in the private sector, so it’s harder to gauge what’s going to happen.” Also strong, regionally, is the sector that includes professional and business service jobs, everything from architects and engineers through administration and clerical staff to waste management workers. “This is a long-term driver of growth in a service-based economy,” Tilley said, and he expects it to stay strong after adding about 9,000 jobs in 2013. Asked to speculate about the economic impact of the transportation bill recently passed in Harrisburg, Tilley pointed out that both the costs and the benefits will be more significant over a longer term than just 2014. “It’s going to take several years to implement the gas tax in full,” he said. Pennsylvania is currently 12th or 13th nationally in the amount of tax paid on gasoline; Tilley thinks it’s possible the substantial increase in the gas
tax will move the state up on that list. And although people in the Philadelphia region have the option of going out of state to buy gas, the majority of the state doesn’t, so gas purchases will take away from other spending.
Entrepreneurial Ferment
THERE’S A HUNGER AND DESIRE TO GET INVOLVED IN CREATING YOUR OWN BUSINESS, NOT SO MUCH HEADING TO WALL STREET.”
The Economy League of Greater Philadelphia has two missions: conducting research and —STEVE WRAY, ECONOMY LEAGUE OF GREATER analysis and convening PHILADELPHIA EXECUTIVE DIRECTOR local business, government and nonprofit leaders to make the region’s future competitive. “We serve as a civic catalyst,” said Steve Wray, a program launched last May that will the league’s executive director. He sees provide up to $10 million in loans in the region and support mentorship and idea exciting developments ahead. “Philadelphia is a center for entre- generation. Local universities and business schools preneurial activity,” Wray said, listing Drexel’s new school of entrepreneurship; play a crucial role in this ferment. “Peothe Blacksone Foundation’s LaunchPad ple are taking ideas out of the classroom,” partnership between the Science Cen- Wray said. “There’s a hunger and desire ter, Temple University and Philadelphia to get involved in creating your own University; and the Innovation Center at business, not so much heading to Wall the University of Pennsylvania’s South Street.” The combination of PhiladelBank campus in Gray’s Ferry. Another phia’s location, between New York and highlight, Wray added, is the Goldman Washington, and its affordability make Sachs 10,000 Small Businesses initiative, it a great place to set up shop. “We need
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Informatics Changing Professional, Consumer Experience The field of information “technology” is changing dramatically as the focus shifts from just storing data and crunching numbers to an ever more subtle understanding of how people — both professionals and end users — interact with that data. One reflection of that change is the emergence of a new term for the field: informatics. “I’d define [informatics] broadly as the utilization of all of the data that is being collected,” said Somesh Nigam, chief informatics officer at Independence Blue Cross. “It’s way beyond data storage — it’s gaining insight through applying a variety of different analytic tools. We use both standard statistical approaches and also some of the newer techniques, such as machine learning and predictive modeling.” Not only does informatics provide new ways to predict what’s going to happen in the future, it also provides “creative ways to visualize data. The data we’re working with is often so complex and interlinked that it’s hard to visualize it so that you can look for the insight, the needle in the haystack,” Nigam said. New kinds of software are being developed that enable this visualization and modeling.
to make sure that we’re taking care of the policy side, though,” Wray said, “including taxes, regulations and oversight, not just in Philadelphia but in the surrounding counties and across the river” in South Jersey. Two other recent developments will affect the region in 2014. Wray predicts that the transportation bill that just passed in the general assembly will release pent-up demand. “It will create jobs for local companies and hopefully begin the process of bringing road and transit infrastructure up to snuff,” he said. The merger of American Airlines and US Airways will also have a local impact, since they are the dominant providers at Philadelphia International Airport. “I hope we’ll see more and better service,” Wray said, “especially for international flights.” Asked about the governor’s race coming up in 2014, Wray responded, “We need to continue making the case that we’re the engine of the state’s economy. No matter who’s elected, the state will succeed based on this region succeeding.” Thus, he said, the important point is “how to facilitate the debate so we get [the candidates] focused on how they can help us.”
The health of the health care sector
Health care costs account for about 18-19 percent of the GDP, according to Somesh Nigam of Independence Blue Cross (IBC), and have grown in excess of inflation. Nigam, IBC’s chief informatics officer, says that better information — for both consumers and providers — can help with these runaway costs. “These will, we hope, combine for both better quality of care and better coordination of care,” he said. “We’re celebrating some success in the moderation [of costs], but we hope that we can not only control the trend [of rising costs] but also lead to a decline.” Some of these developments reflect national changes, but many of them are coming out of work being done here. “As our CEO [Daniel Hilferty] says, Philadelphia is the Silicon Valley of health care,” Nigam said. “Our region is very rich in resources and assets, both in health care and analytics.” For instance, “one of the most exciting developments in health care delivery is the patient-centered medical home [PCMH],” which uses registries, information technology, health information exchange and other means to provide better primary care. The National Committee for Quality Assurance, which writes the certification guidelines for medical homes, “mined the data that we published showing that PCMHs are making a clear difference in price and quality” of care, Nigam said. The most dramatic results were with diabetic patients, who had 21 percent lower total medical costs, driven by a 44 percent reduction in hospital costs. “Philadelphia leads the country” in this move toward PCMHs, Nigam said. “Most of the major medical institutions around us were participants in original pilot program.” IBC recently formalized its longstanding relationship with one of those institutions, the University of Pennsylvania. The new partnership “will allow us to take care of how to exchange data, how to govern and how to fund” projects. “Almost a dozen
The informatics approach is useful not only for strategic planning and other internal uses, it’s also changing the consumer experience as well. The software, based on incredibly sophisticated programming, is getting more predictive. Couple this with easy and intuitive interfaces, and the front end is presenting consumers with fast, specific results that we’re already starting to take for granted, whether it’s on Amazon, where buying patterns are used to make truly relevant recommendations for other products, or on Google, which uses browsing history and previous searches for auto-completion that speeds up new searches. As the ways businesses deal with these massive amounts of data have changed, the personnel has changed as well. “In major organizations, a decade ago, the CIO made it into the boardroom. Now that’s standard for both major and medium-sized companies,” Nigam said. “Today, in data-intensive industries like financial services, we’re seeing a new set of titles. ‘Chief analytic officer’ and ‘chief data scientist’ are pretty common, but I’ve seen other variations — just yesterday, in fact, I encountered a new one: someone whose title is chief mathematics officer.”
projects have spawned already,” Nigam said, all in different stages. One of these projects is developing technology to improve drug adherence, since “poor drug adherence is a huge health factor, leading to worse health and increased hospitalization, especially for heart attacks,” Nigam said. Through Bluetooth technology, it’s possible to monitor that the medication is being taken on time and at the right frequency — if not, the container will signal the patient (“it’s hard to ignore a beeping bottle”). It can also let the physician know about problems with compliance, or signal a family member to follow up. These, and other projects, are “part of our culture of encouraging start-ups,” Nigam said.
The role of government
Philadelphia is a little more recession-proof than other areas of the country, according to David Fiorenza. The great mix of business and industry — plus the arts, sports, and entertainment — put it in a position to take advantage of the improving economy, says the Villanova University economics instructor. With his background — Fiorenza has extensive experience serving as a financial consultant for municipalities in Chester and Montgomery County — he sees the role of local government as crucial to what happens next. “The business community, when it comes to expansion, will depend on the City of Philadelphia,” he said, “what it does with tax incentives, abatements and enterprise zones.” He is concerned, however, with some of the region’s smaller municipalities. “Norristown is a county seat, it shouldn’t be struggling,” he said. Coatesville and Chester face similar economic challenges. “No disrespect to Dominic Pileggi [the Pennsylvania Senate majority leader, who represents the 9th district], who helped bring the stadium and casino to Chester, but those will not be factors that will drive business and manufacturing,” Fiorenza said. The stadium and casino only brought “one, two hundred jobs — we need infrastructure, not casinos.” That infrastructure, he predicts, will be strengthened as a result of the transportation bill just passed, though the results won’t really be felt until 2015 or 2016. The space is available for expansion — Fiorenza points to the shipyard, for instance — and incentives are in place. “Most of the counties, especially Chester County, are trying to hold the line on tax increases for both individuals and businesses,” he said. “They’re competing to keep business in their counties through tax rates and other incentives.” Fiorenza predicts “not a surge of employment, but a steady, gradual increase as people are getting more confident in the direction of the economy.” There are still uncertainties, of course, including the impact of the Affordable Care Act and the possible changes in minimum wage legislation at both the federal and state level. The other thing that might help improve the region’s economy? “We could also use a championship team,” Fiorenza said.
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FINE ESTATES
$3.3M Beautiful Chester County Estate Overlooking a picturesque golf course in Chester County with incredible views and sunsets, this five bedroom, six bathroom home offers beautiful detailing, extensive landscaping and fabulous living areas. The courtyard entry leads to a separate carriage style garage. The inviting foyer, elliptical arches, Gothic transoms and grand staircase opens to a spacious living room, complete with fireplace. The dining room leads to a charming butler’s pantry while the roomy kitchen boasts a sunny breakfast room, and leads to a comfortable family room. The upstairs features a comfy master bedroom with a large dressing area with many built-ins, refrigerator-style drawers, his and her closets and a beautiful bathroom. Three additional bedrooms, three bathrooms and a large study/den area round out the rest of the top floor. You may never want to leave! For more information, please contact Danielle Py-Salas at (215) 627-3500 ext. 1057
19 DECEMBER 2013
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REAL ESTATE
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Raw Deal In Works At 11th Street In MidtownVillage BY SANDY SMITH With at least four restaurants offering sushi in a four-block radius, including RAW Sushi & Sake Lounge, one of the city’s best, you’d think the last thing the Midtown Village-Gayborhood-Jefferson Hospital area of Washington Square West would need is another sushi joint. You would be wrong, according to the owners of this one now under construction in the space that had for years been occupied by Philly Style Pizza in the 100 block of South 11th Street. From the looks of the storefront, Hoshi’s doesn’t aim to compete at the rarefied level of RAW, or even the slightly less swanky but still upscale Aki and Hokkaido on Walnut. Instead, it will fit in with its more modest 11th Street neighbors: Wendy’s, NYPD Pizza, Chick-a-Lic, Panda Garden, Philly Pretzel Factory, Primo Hoagies and the venerable Midtown II, the neighborhood’s all-night diner. We also note the restaurant plans to offer “espresso and more” in addition to Japanese fare. A sushi bar and a coffee house: now that’s a novel combination. No firm word yet as to opening date. This article was originally published on the Philadelphia Real Estate blog at Blog.PhiladelphiaRealEstate.com.
20 Q&A
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PRECISION REALTY GROUP:
PHILLY’S AGGRESSIVE BROKERS Precision Realty Group has the reputation for being the area’s most aggressive brokers, due to Precision’s goal of assisting developers and investors who are acquiring or disposing of real estate. It’s also established a strong reputation for professionalism, strong results and seeing significant returns for clients. Region’s Business sat down with Shaun Lyons, president, and Steve Jeffries, co-founder and partner, to learn more about their firm and its latest news.
What’s the elevator pitch for Precision Realty Group? Steve Jeffries: Precision Realty Group is a full-service real estate company in Philadelphia but also with offices in New Jersey and Delaware. We handle investment sales, all facets of leasing and land sales to development companies. In Center City, I think we’re very in tune with the retail market, where we represent both retailers looking to expand and grow their business or landlords that are looking to lease their retail space in their office or retail building. What differentiates Precision from the rest of the competition? SJ: I think that what separates us is that we are focused on being on the streets and hearing first-hand from tenants and we focus on all neighborhoods in the city whereas other firms tend to center on the central business district, which is obviously thriving. We make it a focus to conduct transactions and know the market in all neighborhoods, being from South Philadelphia to North Philadelphia, river to river. Shaun Lyons: We also specialize in off-market opportunities and physically cultivating relationships, being in front of people. We have the expertise and market knowledge of an institutional real estate company, and we work with our customers in a more hands-on approach. What’s been the biggest news for Precision in 2013? SL: We represented a significant transaction in Center City involving the former AAA building. We helped work with Philadelphia management on obtaining all of the retail tenants in that building and fully leasing that. We value the PMC Property Group relationship very much. We’ve handled numerous commercial transactions for their firm and we continue to do so today where we are helping them with their new construction project at 1900 Arch Street, which is similar to
AAA in that it’s a very large, mixed-use project and we’re handling the commercial retail space on the ground floor. That continues to be one of our preferred relationships in Center City. Based on what you’ve been seeing lately in retail, what’s your outlook for Center City retail in 2014? SL: I think the retail market is strong in Center City, Philadelphia, predominatly the major blocks in Rittenhouse Square, Old City, Market East, Market West. The city itself is expanding, there isn’t a lot of vacancy. Rental rates are going up. If you look at the Chestnut corridor, rental rates are high. Market East is signficiantly different from what it’s been. And that’s without the casino. Retailers are coming into Center City without the knowledge of where the casino will be. SJ: We were seeing, three years ago, rental rates for corner properties in specific neighborhoods typically go for about $20 a foot. We’re seeing that up near $25 to $30 a foot now in neighborhoods and that’s because the inventory isn’t there. Like Shaun said, there’s no vacancy on the west side of Broad, so now they have to take a leap of faith [with Market East]. And I think Philadelphia is adding enough residential, that the leap of faith is real. What does Precision have planned for 2014? SJ: One of our focuses is meds and eds. We’ve made medical real estate a focus for us and in 2014 you’re going to see Precision represent both buyers that want to develop medical property, as well as tenants in the medical field that want to expand. With what’s going on with healthcare, Precision Realty Group is on the front line of helping doctors expand their businesses. Specifically, urgent care where Shaun and I have been responsible for three separate tenant roll-outs within urgent locations — 25 total locations.
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IDEAS
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3 Constructive Ways To Manage Distracted Employees
Dr. Marty Martin is Director of the Health Sector Management MBA Concentration and Associate Professor in the College of Commerce at DePaul University and author of “Taming Disruptive Behavior.” For more information, visit DrMartyMartin.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.
As all managers know, workday distractions are everywhere, stealing your employees’ precious time and productivity. Between new technologies that beg for people’s attention to the prevalence of shortened attention spans, everyone on your team has the opportunity to be more distracted today than in the past. Of course, being distracted at work creates numerous problems from missed opportunities to strained business relationships. Therefore, you need to effectively manage your employees so their distractions are minimized. First, realize that there are two categories of distraction. One is internal distraction, and the other is external distraction. Internal distractions include any physiological, emotional, attitudinal, biological, or physical discomfort. Some examples include having an upset stomach or a headache, worrying about a personal or professional matter, feeling overwhelmed with tasks, sitting in an uncomfortable chair, experiencing anger toward a co-worker, grieving a loss, etc. Any of these things can quickly take an employee off track from his or her tasks. External distractions include other people and technology. Some examples include co-workers who stop by someone’s office to chat, social media and text alerts ringing on a smart phone, email notifications popping up on a computer screen, other employees who talk loudly in the office, etc. These seemingly innocuous items easily divert people’s attention. The real challenge is that most employees aren’t experiencing just one or two of these distractions. They’re facing multiple each day. Consider this common scenario: A customer service representative is responsible for telephone, email, and chat communications. When a customer calls in, the rep has scripts to follow for each scenario. In addition to working from the memorized scripts, she is also instant messaging with customers and answering emails. In fact, her computer screen is divided into quarters: one quadrant has the details of the caller on the phone, and the other three quadrants are active chats she’s engaging in simultaneously. She’s also in an office space where the physical difference between her and the next customer service representative may be 5 to 8 feet. Even though she’s wearing a headset, she can still hear the other reps talking. The person to her right likes to stand while he talks,
so that visually distracts her. The chair she is sitting on is old and uncomfortable. And because the company is trying to save money, they have the thermostat set to 80 degrees in the middle of summer. The distractions seem never-ending! On top of all the internal and external distractions, organizational structures have changed over the years, packing in more duties and responsibilities to every job description. That means your employees today have to spread their attention thin just to complete their expected workload. With all of these factors, it’s no wonder so many people feel distracted at work. Fortunately, most distractions can be eliminated from the workplace, if you take the time to manage them. Here’s how:
Design or redesign a job from a distractibility point of view.
When a manager has a distracted employee, it’s natural to blame the person and say things like, “He’s not a team player,” “She’s not motivated,” or “He doesn’t work well here.” The manager may even reprimand the individual for poor performance. But before you go that route, take a good look at the job and environment to see if it’s making the employee distracted. In other words, look at the job from a distractibility point of view. What are the job duties, both the ones explicitly stated in the job description and the ones that person just always seems to do? What’s the working environment like? What visual or auditory distraction triggers are present? How is the office set up? How are the lighting, the chair, and the desk layout? What other factors impact the employee’s efficiency, effectiveness, and performance? Realize that if the work environment and the job are poorly designed, you will continue to bring in highly talented individuals who will not do well—not because of them, but because of the bad job design. Therefore, before you reprimand, analyze! What you find may surprise you.
Create a Distraction Elimination Plan.
Think back to your elementary school days. You likely had a few kids in the class who always bothered others, threw spit balls, or just stared out the window for hours. What did the teacher do? She had a plan. If the kids were disruptive to the class, she’d move them up front near her. If they were window gazers, she’d orient their desk so
they could no longer see the window. No matter what the disruptive behavior, she knew what to do because she had a plan in mind for it. Good managers do the same. They sit down with the distracted employee and together create a Distraction Elimination Plan (DEP). By working together, they may decide on some physical changes in the office that can help, such as moving to a new cubicle or changing the lighting, or they may figure out some strategies the employee can use to maintain focus, such as not having an email program always open or disabling smart phone alerts. The great thing about a plan is that it gives you something concrete to reference and use as a benchmark to gauge progress. Additionally, all organizations have risk management plans, strategic plans, operational plans, and business plans … so why not also have distraction elimination plans? Remember, distractions rarely self-resolve. So the better the plan, the better the results.
Offer other resources when needed.
Sometimes, even with the manager’s help and a solid DEP in place, the employee is still distracted. In these cases, the manager has to know when to offer additional resources. If your organization has an employee assistance program, you may want to consider making a recommendation to an appropriate resource or service. If your organization does not have an employee assistance program, then present the idea of additional help in a supportive and neutral fashion. You could even suggest it as a step in the DEP, as in “If the outlined steps in this plan don’t resolve the issue, then the employee will seek outside assistance in the form of a counselor or therapist.” The key is to help the employee find the needed resources in order to determine if their situation is more serious than simple distractions.
No More Distractions
The next time you notice you have some employees who are underperforming, don’t immediately reprimand them. Instead, take the time to determine if there’s something you or the company can do to remove the distractions from the workplace. Distractions don’t have to be a major part of the workday. You can help minimize them. Remember, the fewer distractions people have, the more productive they’ll be.
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19 DECEMBER 2013
REGIONSBUSINESS.COM
BY THE NUMBERS
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$1,000
Cost of the failure to stick to New Year’s resolutions for 70% of people, according to an online survey conducted by author, Joseph Grenny
30 Days
Point at which nearly half of respondents have given up on resolutions
90 Days
45%
Point at which 75% of people have given up on resolutions
Number of Americans who plan to travel during the 2013-14 holiday season, according to the results of TripAdvisor.com’s annual December survey
77%
Number of respondents who say they have given up on New Year’s resolutions annually for the last five years
53%
Number of travelers who will drive to their destination (vs. 48% in 2012)
42%
Number of travelers who will travel by air (vs 46% in 2012)
25%
Number of respondents who said the cost of airfare impacted their decision to drive instead of fly to their destination this year
43%
Number of people who said the December holidays are the most stressful time of year to travel
FLICKR/RIACALE
15%
FLICKR/SALFALKO
38%
Respondents who knew a growth entrepreneur
Respondents who knew a growth entrepreneur that were entrepreneurs themselves
37%
Respondents who reported knowing an entrepreneur, according to a recent Ewing Marion Kauffman Foundation survey of 2,000 Americans, “Getting the Bug: Is (Growth) Entrepreneurship Contagious?”
20%
43%
Respondents who reported knowing an entrepreneur that were entrepreneurs themselves
Respondents in the Northeast U.S. reported knowing an entrepreneur, the highest rate in the country
Respondents age 25-34 who knew a growth entrepreneur
36%
49%
Respondents age 45-54 who knew an entrepreneur
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