Q&A: TONY RICCI, PARX CEO GUIDE TO GUBERNATORIAL CANDIDATES
Are you running your business like a monster?
Learn more at peco.com/SmartIdeas.
REGION’S BUSINESS
PHILADELPHIA EDITION
A JOURNAL OF BUSINESS AND POLITICS
BUSINESS AS USUAL? The Philadelphia Sheriff ’s Office finds itself involved in backdoor deals regarding the sale of foreclosed homes. Find out who’s benefitting and who’s getting hurt.
GAS TAX INCREASE MAY HURT CORBETT MORE THAN HELP BREAKING GROUND IN UNIVERSITY CITY LESSONS LEARNED FROM IRELAND SUMMIT
5 DECEMBER 2013
5 DECEMBER 2013
REGIONSBUSINESS.COM
CONTENTS
3
“Power does not corrupt. Fear corrupts... perhaps the fear of a loss of power.” — John Steinbeck
15 Business As Usual In Philadelphia Sheriff’s Office
1900 Arch Street Up to 16,000 SF Retail Space Outdoor Seating Spring 2014 Delivery
13 Lawsuit Aside, PhotoMedex
Sees Major Growth
4 8 18 20
Weekly Briefing
21
Political Commentary
The Dirty Truth About New Year’s Resolutions
Real Estate News Q&A: Tony Ricci, Parx CEO
PRESIDENT AND PUBLISHER James D. McDonald PHILADELPHIA EDITOR Rich Coleman BUSINESS EDITOR Michelle Boyles CONTRIBUTORS Eric Boehm, Charlie Gerow, Don Lee, Scott Staruch, Isaiah Thompson, Andrew Staub PROOFREADER Denise Gerstenfield ADVERTISING DIRECTOR Larry Smallacombe
Independence Media Corp. 350 Sentry Parkway, Building 630, Suite 100C Blue Bell, Pa. 19422 Email: feedback@regionsbusiness.com Advertising: advertising@regionsbusiness.com Online: regionsbusiness.com Facebook: /RegionsBusiness Twitter: @RegionsBusiness Subscription & Advertising Information: (610) 572-7109 Copyright 2013 Independence Media Corp. All rights reserved. Use of material within without express permission of publisher is prohibited. Region’s Business is published weekly on Thursdays and online at www.regionsbusiness.com. The publisher makes no representations or warranties regarding the advertising appearing in its pages or its websites.
1429 Walnut Street, Suite 1200 Philadelphia, PA 19102 866-Walnut 4 www.precisionrg.com
4
5 DECEMBER 2013
REGIONSBUSINESS.COM
DEALBOOK
BUSINESS
Quality 1st Basements Moves to NJ With headquarters in Seymour, Ct., Basement Systems Inc. has completed the move of its Quality 1st Basement Systems division to a new facility in Cliffwood, NJ. Construction on the larger, more energy efficient location began in mid-2012. In addition to a fully-enclosed concrete plant and warehouse, the 10,000-square-foot space features a cafeteria and exercise facilities for 100 employees in the company’s customer service, sales, production, service and marketing departments. The new headquarters houses all of the Basement Systems divisions including Foundation Supportworks, CleanSpace and Quality 1st.
University City Breaks Ground On New Building This week, Radnor Property Group and the Philadelphia Episcopal Cathedral will break ground on mixed-use building with a variety of components. The 326,000-squarefoot space will feature 25 stories of residential space as well as a new Episcopal Cathedral Center that will include a three-story office building, community center and early-learning childcare. Located at 13-19 South 38th St. in the University City neighborhood, the $110 million project will be known as 38 Chestnut. The residential portion of the property will offer 276 units in the form of studio, one- and two-bedroom apartments and include a fitness center, green rooftop with a zen garden and outdoor lounge. The 15,000-squarefoot office space will include a retail component on the first floor in addition to an outdoor seating area in
Doing what counts for your business. At Susquehanna Bank, we’re doing what counts to offer competitive financial products and services, local decision-making and outstanding customer service to build lasting relationships — with people like you. Susquehanna combines the strengths of a community bank with those of a diverse financial services company. Thanks to our regional structure, we have local leaders with lending authority and teams who are committed to providing personalized service. Plus, we have the resources to provide funding ranging from small business loans to complex financing packages. Call 800.311.3182 or stop in to talk about what we can do for you.
Doing what counts™. susquehanna.net | Member FDIC
front of the building, upon completion, targeted for 2015. BLT Architects
RETAIL
SA VA Will Close Retail Location In a letter to the press, designer and owner, Sarah Van Aken, announced this week that she will close SA VA boutique. The shop has offered Aken’s designs to stylish Philadelphians for the last four years, with retail sales that have been up over the last eight months. However, Aken and investors determined the time and capital necessary to maintain the brand’s wholesale division was impractical. “SA VA was in fact a success,” Aken writes. “Our thousands of customers and years of growth are evidence of that. This choice to close, is just that, a choice.” The retail location will close by December 22 of this year, offering customers discounted merchandise until then, as well as a farewell party and total clearance sale on the evening of Wednesday, December 11.
“I was running my business like a monster without even realizing it.” Bad energy habits are bad for business. Let PECO Smart Ideas for Your Business help you save energy and improve your bottom line. Learn more at peco.com/SmartIdeas. PECO. We put our energy into helping you save energy and money.
©PECO Energy Company, 2013
57-13-102046_PECO_Monster_10x11.5_4C_r1.indd 1
www.peco.com
10/1/13 11:22 AM
6
5 DECEMBER 2013
REGIONSBUSINESS.COM
WEEKLY BRIEFING EXECUTIVE BOOKSHELF
WHO TO FOLLOW
@BELFORGroup BELFORGroup The global leader in property restoration. 24/7 Hotline: 800.856.3333. Join us on Facebook to share #LettersofKindness: http:// fb.com/BELFORGroup RT @BELFORGroup: Keep foundation problems at bay and prevent the no. 1 weakening culprit, #waterdamage, with @ HouseLogic: http://bit. ly/1beYMTi RT @BELFORGroup: Lights out? Know how to stay safe before & during a power outage: http://bit. ly/1b6lcw0 #tips #safetytip
Accountability Citizenship Author Stephen P. Tryon is a politically aware, army veteran and executive. In his new book, “Accountability Citizenship,” he outlines a guide for citizens who want accountability in their relationships with elected officials. “The fact that more of us vote during national presidential election years reflects a misunderstanding of the relative importance of our votes and our opinions,” says Tryon. In an interview format, the author discusses the rise of voter apathy, the importance of Congressional accountability and transparency, and simple ways in which Americans can BE more involved in the political process.
MUST-HAVE APP
SaleSorter The holiday shopping season is upon us. The SaleSorter app is a free, locationbased service that will help you keep up with deals, as well as compare prices for the same item at different stores. T he ser vice allows you to personalize results by adding your favorite retailers to receive sales alerts and search for shops by name, category or location. The app’s map view function allows you to discover sales in your neighborhood, then sign into Facebook and share the information with friends. Daily updates and posts from other shoppers help round-out the real-time sales scoops near you.
RESTAURANT ROUNDUP
Passyunk’s Plenty Now In Rittenhouse, Too Building on the success of Plenty Cafe, a South Philly breakfast/lunch purveyor opened in 2012, brothers and co-owners, Anthony and Damon Mascieri, have opened Plenty Cafe Rittenhouse at 1602 Spruce St. The bi-level space features sandwiches, salads and cafe fare in addition to espresso and drip coffees, an extensive loose tea selection and variety of fresh juices. Plenty prepares every dish from scratch and then labels them with the country or region of inspiration. Coffee beans are sources from several of the area’s artisan roasters, including Rival Bros, La Colombe Torrefaction and ReAnimator.
5 DECEMBER 2013
REGIONSBUSINESS.COM
BUSINESS
Solar Schools Initiative Seeks Crowfunding The Philadelphia Solar Schools Initiative (PSSI) announced the launch of a crowdfunding campaign for a joint program between Solar States and Clean Currents that aims to bring together sustainable energy, education and economic development. The goal: bring solar power and renewable energy to Philadelphia schools at no up-front cost. Two companies will provide 20 area schools with solar panels, renewable energy courses for students and wind power to fill any remaining energy needs. Additionally, Clean Currents will offer residents a 100% Pennsylvania clean energy mix, tentatively titled “Neighborhood Green,” which will draw energy from the PSSI schools’ wind and solar resources. ON THE MOVE
Reese: Firm’s 18th Attorney On Staff Krasno, Krasno & Onwudinjo announced that Sarah Reese has joined the law firm, working from its Philadelphia office. She will focus exclusively on workers’ compensation law in Upper Darby, Delaware County, and neighboring communities. Ms. Reese earned her law degree from Capital University Law School in Columbus, Ohio, in 1983 and previously held the position of equity shareholder at Philadelphia’s Post & Schell P.C., for 26 years. BANKING
TD Bank Opens Delaware Facility In an effort to support the growth of its North American credit card business, Cherry-Hill-based TD Bank has opened a new office in Wilmington, Del. Approximately 75 employees will ultimately work from the facility including professionals in the departments of risk management, compliance, legal and technology resources.
WEEKLY BRIEFING
‘Financial Football’ Tests Students’ Money Management Skills State Treasurer Rob McCord and Philadelphia Eagle Brent Celek came together to announce the rollout of Financial Football to Pennsylvania’s library system. The free, educational video game was developed by Visa Inc. as part of a nationwide educational initiative in partnership with the NFL. The game simulates combines NFL structure and rules with financial education question in varying degrees of difficulty, helping players identify their financial blind spots.
Previously distributed to the states public middle- and highschools, the offering of the game in libraries and online is expected to extend its reach. The game is accompanied by a classroom curriculum and is available as an iTunes app as well. With the addition of Pennsylvania, Visa now has definitive partnerships to distribute Financial Football throughout the public educational sector in a total of 40 states and the District of Columbia.
Philadelphia Decks The Halls: Lighting Christmas Trees Starts The Season Philadelphia celebrates the holidays in a big way. lobby for the remainder of the month. Washington Square: The historic Morris House Whether you enjoy the site of a lit-up Boathouse Row, ice skating at Penn’s Landing, the Macy’s Holiday Hotel, modeled after the original White House, gives light show or the myriad festive window decorations, visitors a sense of what Christmas and trees were like there are many ways to make merry this season in the when the country was still new. East Passyunk: This South Philly community’s City of Brotherly Love. This week, Philly rings in the season with tree-light- tree is situated at the neighborhood’s iconic singing fountain. ings in neighborhoods across the city and beyond: Manayunk: Canal View Park is home to this ManaThe Piazza: Northern Liberties residents can enjoy a new ice-skating yunk’s marrink this year, set quee holiday beneath the twintree. Citizens kling light of the Bank Park: Piazza at Schmidt’s Who bettree. Rittenhouse ter than the Square: ContinuPhilly Phaning the tradition atic to light the of giant Christannual tree at Citizens Bank mas trees, this Park, home of year’s Rittenhouse the Phillies. Square will feature Headhouse a 35-foot everThe Shops at Liberty Place Amit Gabai District: The green. Headhouse The Shops at Square ShamLiberty Place: 2013 marks the bles at 2nd and first year that The Pine Streets Shops will place provides a hisan enormous tree toric backdrop in the center of the for the holiday shopping rotunda. tree for this Love Pa r k : historic neighTraditionally, the borhood. official City Hall Woodmere Christmas tree Art Museum: The Morris Hotel East Passyunk Avenue BID is located at DilThis Chestnut Hill-attraction worth Plaza. During construction, the tree has joined the Christmas boasts myriad trees awash with lights until midJanuary. Village at Love Park. Suburban Square: Ardmore’s premier shopping 10 Arts at The Ritz-Carlton: From December 4 through 29, The Ritz Carlton will host the Festival of center at Anderson and Coulter Avenues already has Trees. Twelve trees, each decorated by a local designer this year’s tree on display. or institution, will decorate the restaurant and hotel
7
8
5 DECEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
Gas Tax Increase Might Hurt Corbett More Than It Helps
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.
The prevailing logic in Harrisburg was that Gov. Tom Corbett desperately needed to get one of his “big three” legislative items — transportation funding, pension reform and liquor privatization — across the finish line before the end of the year. Without getting any of them finished he would head into the final year of his term looking impotent, unable to get a Republican-controlled Legislature to follow through on the biggest items of the Republican governor’s agenda. Well, he got one of them. But it might end up hurting him more than it helps. Last month, the state Legislature put the finishing touches on a $2.4-billion transportation funding package that promises to improve PA’s roads, bridges, mass transit and other modes of transportation. Corbett campaigned hard for the bill in the final weeks before it passed, even appearing with former Gov. Ed Rendell, the Democrat that Corbett spent most of the 2010 campaign blasting for raising too many taxes and spending too much money. Now, some conservative political groups might do the same to Corbett and Republicans who voted for the bill. The Independence Hall Tea Party, a
home on election day. Philadelphia-based group, encouraged And it’s worse for him, because he’s the drivers to fill up in Delaware, Maryland, one with the high-profile “no tax pledge” New Jersey and elsewhere in order to on his resume. “spoil the plans of our elected tax collecCorbett agreed to the pledge, a political tors,” the group said in a statement. gimmick shopped around by conservative Meanwhile, The American Future Fund crusader Grover Norquist and Americans PAC, a national conservative campaign for Tax Reform, the Washington, D.C.group, released the first in a series of ads based group he leads, during the 2010 targeting PA state lawmakers. Among gubernatorial campaign. the group’s key issues was the “massive Since then, Corbett’s administration has tax increase and transportation bill.” The raised taxes on natural gas drilling compagroup says it will target lawmakers who campaigned on a free-market agenda and nies — cleverly disguised as an “impact fee” then abandoned those principles in office. — and on online retailers in the name of On one hand, Corbett has a major “tax fairness” for brick-and-mortar stores. legislative accomplishment to talk about But he was likely to get away with those during his re-election campaign. It had increases because they weren’t broadbeen 16 years since the General Assembly based tax increases that everyone would passed a major transportation bill, and not notice. The transportation issue is differeven Rendell’s love of infrastructure and ent, because if gas prices at pump go up by taxes could get a measure passed. 26 cents, people will notice. On the other hand, if conservative Of course, that’s a bit extreme. Since Republicans see Corbett as a tax-raiser, are the gasoline tax increases are phased in they less likely to support him next year? over five years, it’s unlikely there will be an It’s not as if they would vote for a Demoimmediate political backlash over higher prices. If there is one thing all politicians crat. But with Corbett’s approval rating in are good at, it’s figuring out ways to avoid the 20s, he can’t afford to lose any more taking the blame for things they know will support or have potential supporters decide to stay out of the campaign and stay be unpopular.
Quantum Communications Welcomes Kevin Harley - former Director of Communications and Press Secretary to the Governor Kevin Sunday - former spokesperson to the PA Department of Environmental Protection
WE'RE EXPANDING OUR TALENT TO BETTER HELP OUR CLIENTS WIN 717.213.4955
Facebook.com/QuantumComms
@QuantumComms
5 DECEMBER 2013
REGIONSBUSINESS.COM
POLITICS
9
Pig Protester Back After Pay Increase, Transportation Vote BY ANDREW STAUB Giant inflatable pigs that protest government fraud, waste and abuse have little time to rest. “Pignelope,” a 25-feet-long inflatable hog, is back, protesting legislative cost-of-living increases, higher gas taxes and so-called “walking-around money.” Gene Stilp on Monday brought the giant swine out of retirement and planted him — or her — outside the state Capitol to protest what he called the “overwhelming abuse” state officials have inflicted on residents. “It’s going to hurt a lot of people, and we’re back to square one in regard to taxpayers being abused,” he said. Stilp criticized the 0.3 percent COLA for lawmakers, but the protest is mostly targeted toward a new transportation spending law Gov. Tom Corbett signed last week. While eliminating the retail gas tax, the law increases taxes at the wholesale level to help fund $2.3 billion in transportation initiatives. One supplier, Sheetz, has already told the Associated Press it intends to pass the increased costs along to motorists. The average driver could eventually pay an extra $2.50 a week for fuel, the Pennsylvania Department of Transportation has said. The transportation funding package includes $40 million that Stilp equated to WAMs, the grants for legislative pet projects Corbett eliminated. The Commonwealth Financing Authority, which is composed of political appointees, will dole out the money. Stilp believes the money will be used to fund projects
based upon political expediency, rather than need. “This is the worst place to throw money around,” he said of the Capitol. State Rep. Daryl Metcalfe, R-12th District, has been critical of a provision that would give Secretary of Transportation Barry Schoch $20 million in discretionary funds in fiscal 2014-15, and $40 million the next fiscal year. The administration could use that pot of money to influence Gene Stilp’s ‘Pignelope’ urges voters to remember higher gas taxes funded transportation legislators, Metcalfe argued durimprovements when they go to the polls. PA INDEPENDENT ing a floor debate over the transportation funding. Jay Pagni, a spokesman for the governor, said the trans“Ultimately, it would corrupt the portation funding does not include WAMs, but rather process,” he said. Richard Kirkpatrick, PennDOT spokesman, said the “program dollars.” He said Corbett returns the COLA. As Stilip stood guard with his protest partner Monday secretary in the past year had the flexibility to use discretionary money to fill funding gaps for regional projects. he urged people to remember that, come February, they He cited the 2006 softening of “Dead Man’s Curve” on can collect signatures to run against the lawmakers behind Interstate 83 near York, saying the $57.9 million project the “triple threat” of issues. “The people will remember this,” he said. wouldn’t have been completed with only the typical fundThis article was originally published in PA Indepening allocation. “That is not something that is new,” he said, adding that dent at PAIndependent.org. money in recent years was dedicated to bridge repairs.
VERSATILE SECURE LOCAL NearCloud ® – Your data center next door. To learn more about private dedicated cloud hosting, visit www.nearcloud.com.
Philadelphia U New York
www.PickITS.com U 215.886.7166
10
5 DECEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
The Top Tier, Longshot Gubernatorial Candidates
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.
The ink was barely dry on the tally sheets of November’s election when intense media focus shifted to the 2014 race for Governor. Pennsylvania has a longstanding tradition for gubernatorial elections. For more than two generations the Commonwealth has elected Governors of opposite Parties every eight years. This unbroken skein dates back to before Pennsylvania governors could succeed themselves. No governor has ever lost a bid for re-election. Some pundits have suggested that 2014 may be the most severe test of the historic run. Governor Corbett took on the special interests and, as a result, his poll numbers currently lag behind where he’d like them. He waits to face the winner of a crowded Democratic primary. Right now there are at least eight announced Democratic candidates. They fall into three tiers: those with the money, name identification and organization to show well in early polls, a second group right behind them and those who are long shots. What is most interesting about the field is who’s not currently in it. There’s constant speculation that either former Auditor General Jack Wagner or Attorney General Kathleen Kane will be a late entry into the Democratic sweepstakes. Either would dramatically alter the dynamics of the Democratic primary. Here’s a brief look at the field:
is southeastern PA-centric. Early polls show him leading in the Pittsburgh area, but trailing both Allison Schwartz and Katie McGinty statewide, albeit by narrow margins. Katie McGinty The former Secretary of the Pennsylvania Department of Environmental Protection doesn’t begin the race with the name ID that elected officeholders enjoy. But she has strong backing from some national Democrats from her days in the Clinton White House. She is positioning herself to win a large share of the woman’s vote, a strategy that seems to be working. She spent the critical early months of her campaign quietly building an impressive organization and campaign war chest and many report that she was very effective in Pittsburgh and western Pennsylvania.
SECOND TIER
LONGSHOTS Jo Ellen Litz A Lebanon County Commissioner from Lebanon she touts herself as the local government voice in the race. But those aren’t issues being talked about over morning coffee and with two other women at the top of the chart Commissioner Litz has little running room. Max Myers The Cumberland County pastor is little known even in his home base and has little money and organization. Although he is articulate and positions himself as a centrist, it’s highly unlikely that he factors into the race.
WAITING IN THE WINGS
Jack Wagner The popular former Auditor General has done little to tamp down speculation about him running. John Hanger Another former Rendell cabinet member (DEP He says he’ll make an announcement by the end of Secretary), Hanger has laid out the most specific the year. Wagner faces a couple of challenges: 1) He policy plans and is hoping enough Democratic was recently defeated in the Democratic primary voters warm to his uber-policy wonk persona to for Mayor of Pittsburgh and 2) he has historically struggled with fundraising. If Wagner chooses to win. His cutting edge issue is his call for decriminal- run he will enjoy wide name identification and izing marijuana, a tenuous political proposition. some organization. As the only candidate from Yet Hanger leads (although within the margin of the West he could enjoy a situation similar to the error) the field of “second tier” candidates who Republicans in 1978 when several high-powered candidates from the southeast (Specter, Butera, hover in the high single digits in current polling. TOP TIER Marston) slugged it out while the sole candidate from the west (Thornburgh) waltzed through. Ed Pawlowski Allyson Schwartz The Allentown Mayor sees his path to victory Schwartz has emerged as the frontrunner for Governor Tom Corbett the Democratic nod and is working hard to solidify built on his record as executive of a mid-sized city The Governor enters the race with soft pollher base in southeastern Pennsylvania, build on and without ties to either Washington or Harrisher fundraising base and make inroads into other burg. ing numbers. But he enjoys all the advantages of parts of the Commonwealth. A recent poll by The early stages of his campaign have been very incumbency and a war chest of $30 million. He Pennsylvania firm Harper Polling shows Schwartz aggressive, including a high profile event during is a fierce competitor who has enjoyed tremenin the early lead with a 7 point advantage over her the Pennsylvania Society weekend and an ambi- dous electoral success over the years (In the 2010 closest rival. But while her support is strong in the tious statewide “jobs” tour. Whether or not he can Obama landslide he was re-elected Attorney GenPhiladelphia media market, in other parts of the raise the money and build an organization neces- eral with more votes than any Republican has ever state she sits at the bottom of the heap. Whether sary to sustain his momentum and carry him into gotten in Pennsylvania) or not she can sell voters west of Paoli on her liberal the lead group is a big question. Governor Corbett has cut taxes by more than views and history could well determine whether a billion dollars, a figure that will climb to more she is the nominee or ultimately gets elected. than $6 billion if his initiatives remain in place. Tom Wolf Yet another former Rendell Cabinet secretary Most recently he won passage of the transportaRob McCord (Revenue), Wolf is building his campaign on the tion funding bill which will improve public safety, State Treasurer Rob McCord is positioning foundation of his central Pennsylvania roots, his decrease traffic congestion and contribute mighthimself as the most viable Democrat in the fall record as a successful businessman and a prom- ily to the state’s economy. He also proved that he election. ise to inject $10 million of his own money into his can work with the legislature to get things done. The only Democrat in the race (so far) who’s campaign. Governor Corbett will face the winner of a won a statewide election, he was a successful busiIf Wolf honors his commitment to pour 8 fig- potentially bloody and bruising Democratic Prinessman before entering the political world, it’s a ures into his effort he will be a strong contender mary. He will have the resources and organization strong narrative. With considerable fundraising for the nomination. Ask Tom Smith, the obscure to tell his story. ability and the early backing of several significant businessman who vaulted to the GOP nomination A year from now he may well be able to paralabor unions, McCord is working to build a base for the U.S. Senate in 2012, what 10 million bucks phrase Mark Twain and say that reports of his in Western Pennsylvania. This would separate will do for your political fortunes. political demise were grossly exaggerated. the Montgomery County native from a field that
5 DECEMBER 2013
LEGISLATIVE UPDATE
REGIONSBUSINESS.COM
11
Several Bills Signed Into Law As Senate Returns To Capitol BY SCOTT STARUCH The Senate returned to Harrisburg this week, and the House returns next. The Senate’s remaining 2013 voting days are December 9th, 10th and 11th. Meanwhile, the House will be in Harrisburg on December 9th, 10th, 11th, 16th, 17th and 18th (the 18th is a non-voting day). Last Wednesday, Governor Corbett signed several bills into law. Including: Ahnl^ ;bee +2) !I'G' +/.*" Ç :f^g]l Eh\Ze Himbhg LfZee @Zf^l h_ <aZg\^ :\m Zeehpbg` ^eb`b[e^ hk`ZgbsZtions to conduct new small games of chance known as ÉihhelÊ Zg] ÉkZ\^ gb`am `Zf^lÊ Zg] mh nl^ ma^ ikh\^^]l mh _neÕee ikhfhmbhg h_ in[eb\ bgm^k^lm inkihl^l' Ahnl^ ;bee *)21 !I'G' +/,2" Ç :f^g]l ma^ Eh\Ze Himbhg LfZee @Zf^l h_ <aZg\^ :\m mh Zeehp _hk ma^ ink\aZl^ h_ k^mZbe eb\^gl^l _hk ma^ inkihl^ h_ ahlmbg` mZo^kg `Zf^l Zg] mZo^kg kZø^l' >eb`b[e^ ^gmbmb^l phne] [^ Z _hk&ikhÕm ahm^e% k^lmZnkZgm% ikboZm^er hpg^] in[eb\ \hnkl^% [k^p in[ hk fb\kh[k^p^kr ^Zmbg` ieZ\^ eb\^gl^] mh l^ee ebjnhk ng]^k ma^ Ebjnhk <h]^' Ahnl^ ;bee **+1 !I'G' *,00" Ç :f^g]l Mbme^ *+ !<hfmerce and Trade), 7 (Banks and Banking) and 42 (Judi\bZkr Zg] Cn]b\bZe Ikh\^]nk^" \h]b_rbg` ikhoblbhgl h_ ma^ Fhmhk O^ab\e^ LZe^l ?bgZg\^ :\m Zg] ma^ @hh]l Zg]
L^kob\^l BglmZeef^gm LZe^l :\m mh \hg_hkf ma^ eZpl pbma bg]nlmkr ikZ\mb\^l Zg] _^]^kZe lmZmnm^l' Ahnl^ ;bee *,-1 !I'G' +/1)" Ç :f^g]l ma^ F^]b\Ze IkZ\mb\^ :\m Z]]k^llbg` ma^ e^o^e h_ lni^koblbhg iarlb\bZgl fnlm ikhob]^ mh iarlb\bZg ZllblmZgml [r k^jnbkbg` fhk^ ^qm^glbo^ k^ob^p h_ iZmb^gm k^\hk]l _hk e^ll ^qi^kb^g\^] iarlb\bZg ZllblmZgml' Ahnl^ ;bee *,.* !I'G' +/1*" Ç :f^g]l ma^ Hlm^hiZmab\ F^]b\Ze IkZ\mb\^ :\m Z]]k^llbg` ma^ e^o^e h_ lni^koblbhg iarlb\bZgl fnlm ikhob]^ mh iarlb\bZg ZllblmZgml [r k^jnbkbg` fhk^ ^qm^glbo^ k^ob^p h_ iZmb^gm k^\hk]l _hk e^ll ^qi^kb^g\^] iarlb\bZg ZllblmZgml' L^gZm^ ;bee 1)+ !I'G' *0.*" Ç :f^g]l ma^ ;hbe^k NgÕk^] Ik^llnk^ O^ll^e EZp Z]]bg` ]^Õgbmbhgl mh \eZkb_r ma^ l\hi^ h_ ma^ eZp% ni]Zmbg` ma^ eZp mh \nkk^gm gZmbhgZe lmZg]Zk]l Zg] ikhab[bmbg` ma^ hi^kZmbhg h_ [hbe^kl Zg] ngÕk^] ik^llnk^ o^ll^el nge^ll bgli^\m^] Zg] \^kmbÕ^] [r ma^ =^iZkmf^gm h_ EZ[hk Zg] Bg]nlmkr
Ellen Ferretti has been serving as acting DCNR secretary since June 13, 2013. She came to DCNR from the I^gglreoZgbZ >gobkhgf^gmZe <hng\be pa^k^ la^ l^ko^] Zl ob\^ ik^lb]^gm h_ I><Ìl Ghkma^Zlm K^`bhgZe Hù\^' <akblmhia^k :[knssh aZl [^^g l^kobg` Zl Z\mbg` =>I l^\k^mZkr lbg\^ :ikbe *.% +)*,' Fhlm k^\^gmer% a^ l^ko^] Zl Z ]^inmr \ab^_ h_ lmZû mh @ho^kghk <hk[^mm' Ikbhk mh l^kobg` bg ma^ @ho^kghkÌl Hù\^% Fk' :[knssh pZl Z \ab^_ ]^inmr Zmmhkg^r `^g^kZe bg ma^ I^gglreoZgbZ :mmhkg^r @^g^kZeÌl Hù\^' M:Q>L Hg Fhg]Zr% ma^ =^iZkmf^gm h_ K^o^gn^ k^e^Zl^] Z k^ihkm hg bml Gho^f[^k +)*, \hee^\mbhgl' Ma^ lmZm^ \helected $1.7 billion in General Fund revenue in November, 1))%))) fhk^ maZg Zgmb\biZm^]' ?bl\Ze r^Zk&mh&]Zm^ @^geral Fund collections total $9.9 billion, which amounts to -+'/ fbeebhg% hk )'- i^k\^gm% Z[ho^ ^lmbfZm^' ?hk fhk^ ]^mZbel% oblbm ammi3((ppp'k^o^gn^'lmZm^'iZ'nl'
GHFBG:MBHGL Yesterday, the Senate Environmental Resources and ELECTION 2014 Energy Committee considered the nominations of Ellen K^i' Iareebl Fng]r !=&Ens^kg^" Zgghng\^] a^k ]^\b?^kk^mmb Zl l^\k^mZkr h_ ma^ =^iZkmf^gm h_ <hgl^koZmbhg lbhg hg Fhg]Zr mh k^mbk^ _khf ma^ lmZm^ Ahnl^' K^i' Zg] GZmnkZe K^lhnk\^l !=<GK"% Zg] <akblmhia^k :[kn- Mundy serves the 120th District and has served in the ssh Zl l^\k^mZkr h_ ma^ =^iZkmf^gm h_ >gobkhgf^gmZe House since 1990. Ikhm^\mbhg'
SINGER FINANCIAL CORP.
a second generation hard money lender that stands the test of time
REAL ESTATE SECURED COMMERCIAL and BUSINESS LOANS
877-SINGER-6
$ Millions Available for lending now! Starting Interst Rate at 11% -Direct Portfolio Lender Fast Closing (Within 5 -7 Business Days) - Brokers Protected (Earn 3-5 pts.)
Singer Financial Corp.
A Private Financial Institution
1708 Locust Street | Philadelphia, PA 19103 P: (215) 893-9722 F: (215) 893-9725 Email : paul@singerfinancial.com
12
5 DECEMBER 2013
REGIONSBUSINESS.COM
INNOVATION
Lawsuit Aside, PhotoMedex Sees Major Growth BY BRANDON BAKER
“Our growth strategy has been to build out our consumer platform with our market-leading ‘no! no!’ system. We’ve sold more than five million units in more than 55 countries, and we’re continually entering new markets,” said Dolev Rafaeli, CEO of PhotoMedex, who cited Germany and Brazil as two emerging markets the company’s launched its products in. “We’ve got several more countries on the planning horizon, and following the successful launch of the ‘no! no!’ system in these developing countries, our aim is to use this now-established marketing platform and introduce more consumer products from our pipeline of patented and FDA-registered products.” The original logic behind the merger, Mr. Rafaeli said, was to “cross-pollinate” hair-removal products with existing marketing and the company’s reach with physicians. Its next step is to move forward with what the company is banking on as a breakthrough product for the more than 10 million psoriasis and vitiligo patients in the U.S.: XTRAC, which is touted as a non-invasive, targeted medical therapy
With good news, inevitably comes a dose of the bad. Though wellness products company PhotoMedex has come out of the recession alive — with the No. 143 spot on the Deloitte 2013 Technology FastGrowing 500, to boot — it’s also experienced some growing pains, courtesy of a class-action investors’ lawsuit filed last week. The suit alleges, among other claims, false and misleading statements regarding Japanese sales prospects of the company’s “no! no!” hair-removal device. The investors’ lawsuit is represented by New York, N.Y.-based firm Levi & Korsinsky, LLP. But that’s not to ignore the significant growth the company’s gleaned from its December 2011 shakeup, when it merged with hair-removal company Radiancy, Inc., and added the in-question, brandname “no! no!” line to its arsenal of proprietary health products. Since 2009, the Montgomeryville, Pa., headquartered company, which employs 50 of its 175 worldwide employees in Pennsylvania, has expeIs your company involved with innovation? rienced a 92 percent cumulative annual revenue growth, coming out of the recession with not just Email us at feedback@regionsbusiness.com to pitch your story. a heartbeat, but a new lease on life.
FULL SERVICE ADVERTISING AGENCY s Strategic Planning s Media Buying
s Web Development s Creative Design
s Marketing Consulting 255 Great Valley Parkway, Suite 150 Malvern, PA 19355
219 Cuthbert Street, Suite 500 Philadelphia, PA 19106
p: 610.644.8637 s f: 610.540.6433
StreamCompanies.com
Dolev Rafaeli
5 DECEMBER 2013
REGIONSBUSINESS.COM
INNOVATION
13
AboutOne Founder Shares Lessons From Dublin Summit While at the Summit, I was mingling and taking Ever the busy bee, AboutOne’s Joanne Lang trekked it all the way to Dublin, Ireland, to intro- in as much information as possible. I wanted to duce herself to some of the top business leaders in share my three favorite lessons learned: 1. Business and Strategy: One of the stronthe world. Here, she shares her experience, and a few handy business tricks she learned along the gest presentations came from Debbie Weinstein, way. global brand manager with multinational Unilever. Unilever has been around since 1872 and is In her words: responsible for developing and managing some of I think the AboutOne team is amazing. So, it’s the most enduring brands in the world including an honor when other organizations recognize our Dove, Knorr, Hellmann’s, Omo, Persil and Flora. work. Debbie walked us through Unilever’s simple marWe started the month with the exciting news keting strategy, which is focused on three basic pilthat AboutOne had been selected as one of the 20 lars: Put people first, build brand love and unlock coolest startups in Philadelphia by Philadelphia the magic. To demonstrate this strategy in action, magazine. This was a great opportunity for us to Debbie peppered her presentation with some of shine online and in print. I also got to rub elbows Unilever’s most successful campaigns. This year’s with other “cool startups” at ThinkFest at the Kim- Dove Sketch campaign generated 150 million views in a 45-day period and the world’s most successful mel Center. AboutOne was also selected as one of the top 150 advertisement ever. 2. About the Exit: Gentry Underwood just tech companies in the world by the prestigious Web Summit, an invite-only event held once a year in exited his company Mailbox to Dropbox for $100 Dublin, Ireland. This was a not-to-be-missed event million. He talked about why and also the lessons as I knew thousands of global startup creators, learned of having to close down his previous app. tech leaders and all-sized businesses would be in From that experience he learned that relationships attendance. The attendance numbers were off the are everything. He also shared that it’s really, really, charts: More than 10,000 attendees with upward really hard to build a company. If you’ve got hopes of 300 speakers from all over the world made the of being a successful entrepreneur, brace yourself now. He stressed that there will be excruciatingly pilgrimage to Dublin for the Web Summit.
hard moments ahead and it will not always be fun. You will not always love your job every single day, as you’ll deal with crises and conflicts and problems bigger than you could ever imagine. Gentry reminded us that you’ ll be told “no” more times than you ever thought possible but to do it anyway — especially if you are in love with a dream. 3. Inspiration: Elon Musk, EO and CTO of SpaceX and CEO and chief product architect of Tesla Motors, was interesting because he shared his fear of failure and challenges that took him close to failure, admitting his struggles to find investors for Tesla. His talk made me realize that everyone has down days, and it’s perfectly normal. While I was in Ireland, I was also invited to the Women in Tech Leaders Lunch. One of the speakers was Caithriona Hallahan, the MD of Microsoft Ireland. Padmasree Warrior the CRO and CSO of Cisco was another speaker at the lunch. She had some wonderful tips. It was a pleasure to see two very successful startup gaming companies, Rina Onur, CEO of Peak Games, and Diana Moldavsky, CRO of ZeptoLab. I didn’t get to see a lot of Ireland while I was there as I had to work each and every night; however, what we are working on next is an RFP for the AboutOne platform to be used for cancer research. It’s work like this that keeps me going.
State-of-the-art trophy LeeD-pLatinum office BuiLDingS
2.0 univerSity pLace 30 n. 41St Street, phiLaDeLphia, pa top fLoor avaiLaBLe (21,000 Sf) 20univerSitypLace.com
BNY Mellon Center 1735 Market Street Suite 4000 Philadelphia, PA 19103
Jack Soloff Senior Managing Director 215-246-2764 jsoloff@ngkf.com
keyStone opportunity Zone
Craig Scheuerle Executive Managing Director 215.246.2752 cscheuerle@ngkf.com
in
univerSity city
3.0 univerSity pLace 4001 market Street, phiLaDeLphia, pa 185,000 Sf avaiLaBLe BuiLD-to-Suit 30univerSitypLace.com Matt Guerrieri Director 215.246.2709 mguerrieri@ngkf.com
14
5 DECEMBER 2013
REGIONSBUSINESS.COM
INNOVATION
Benjamin’s Desk Seeks To Be Innovation Epicenter BY BRANDON BAKER What a difference a year makes. When Michael Maher and his wife Jennifer launched Center City coworking space Benjamin’s Desk last October, it was an empty — and in-need of a facelift — 3,000-square-foot, seventh-floor space tucked away at 17th and Walnut streets. Its client roster: a modest four companies. Today, that number’s been multiplied by 15. “It all just happened at a much more rapid pace than we anticipated,” Mr. Maher said. “What we’ve shifted from our Day One model, though, is we’ve gone from being a traditional coworking space to being what we’re calling the ‘epicenter of innovation.’ … We get so tied into startups here in Philly; it’s a great buzzword, and it’s a really awesome burgeoning community, but we love the broader term of ‘innovation,’ and that encompasses all entrepreneurs and small-business owners — even nonprofits, which are doing cool stuff. That’s the thesis we’re floating around in 2014: ‘How do we create [Philadelphia’s] epicenter?’” Benjamin’s Desk expanded its space in June after raising $150,000 in funding and leasing the eighth floor of the building, which is currently an events space — hosting name-brand ‘preneurs like Bob Dorf — and, phasing
The eighth floor of Benjamin’s Desk is the venue for many community events.
into the space’s second year, will also be incorporated as part of its coworking environment. Mr. Maher also teased possible revamps of its currently open-air roof deck, hinting at expanded events space. To better manage the space, with all of its added services and spiffy new digs, he will also bring on an events manager and a sales manager in 2014, snowballing to make up a staff of five. Though Mr. Maher remained mum about what
specifically lies ahead for 2014, he assures all interested parties that the space is one to watch, with corporate sponsors on board, twists to its events lineup and a big-league client soon to inhabit the coworking space. “What we want,” he said, “is to be a place you need to be in Center City, rather than just a place to meet up and work together.”
15
5 DECEMBER 2013
REGIONSBUSINESS.COM
BUSINESS AS USUAL
Advertising Sheriff sales is a lucrative business. But on closer inspection of methods used by the Philadelphia Sheriff ’s Office, one has to wonder: Who’s really benefitting from this lucrative business? And who’s losing out in the end? STORY BY ISAIAH THOMPSON ILLUSTRATION BY DON LEE
In the Philadelphia Sheriff ’s Office, “reform” looks a lot like business as usual. Three years ago, Barbara Deeley, a deputy under former Sheriff John Green, became the first new Sheriff of Philadelphia in more than two decades, taking control of an office surrounded by allegations of cronyism, financial mismanagement, and even fraud, with the promise of cleaning it up. Among her first priorities was to clean house when it came to the lucrative business of advertising sheriff sales. In Pennsylvania, properties that are foreclosed upon for mortgage or tax debts have to be sold in a public auction by the county sheriff. Those sales, by law, must be advertised ahead of time. This advertising, paid for with deposits required by the banks or city taking the properties to sale are worth money – a lot of money.
It’s a pile of money over which the Philadelphia Sheriff has a great deal of influence. Under Green, millions of dollars in sheriff sale ads were distributed among as many as a dozen newspapers — some with wide circulation , like the Inquirer and Daily News, some with smaller audiences, such as the Public Record, the Sunday Sun, and the Philadelphia Tribune. For more than a decade, a single company – Reach Communications, owned by a friend of and political contributor to Green — was granted the lucrative business of placing those ads, earning a 15 percent commission for each. It was Reach Communications that became the focus of two audits of the Sheriff ’s Office under Green, done by City Controller Alan Butkovitz. Within days of becoming interim sheriff after Green stepped down following the first audit, Deeley terminated the office’s
business relationship with Reach Communications. A second “forensic” report accusing Reach of overcharging the Sheriff for its services, according to the City Controller’s website, “led to a complete structural and procedural overhaul of the Sheriff ’s Office.” But, two years later, the “new” structure established by Deeley and preserved by current Sheriff Jewell Williams looks a lot like the old one. Take the friendly — and lucrative — relationship between the Sheriff ’s Office and a group of papers organized into a coalition — the Philadelphia Multicultural Media Network — organized by longtime Democratic politico Kenneth Smukler. Smukler, a campaign consultant and erstwhile spokesman for Democratic party boss Bob Brady, was brought into the Sheriff ’s Office under Deeley as an unpaid consultant to help her with the transition. After
16
5 DECEMBER 2013
REGIONSBUSINESS.COM
THE SHERIFF ABSOLUTELY IS REQUIRED TO GO THROUGH THE NORMAL PROCUREMENT AND FINANCE REQUIREMENTS — IT’S IN THE CHARTER. THE SHERIFF ISN’T ALLOWED TO JUST GO OUT ON HIS OWN, NO WAY. IF YOU’RE THE FINANCE DIRECTOR, YOU’VE GOT TO PUT A STOP TO THAT. YOU DON’T HAVE TO BE BLIND IF YOU DON’T WANT TO BE BLIND.” —MARK ZECCA, LAWYER FOR CITY OF PHILADELPHIA
Sheriff Jewell Williams
Deeley booted Reach Communications from its job as advertiser, it was Smuker who brought suggestions for a new company to take up an “emergency contract” to handle advertising placement, a contract still in place though the emergency is long over. Among several companies Smukler said he recommended was CardenasGrant Communications— a firm owned by Luz Cardenas and Barbara Grant, both former spokespeople for Mayor John Street. Cardenas-Grant was awarded the contract to place ads and, like Reach, get a commission on every ad placed. Not a bad business, since monthly ad sales can amount to hundreds of thousands of dollars. Within months of being hired for the job with Smukler’s recommendation, Cardenas Grant turned around and hired Smukler — as an employee. Smukler describes the arrangement as a way that he, effectively working fulltime for Sheriff Deeley, he says, could be paid for his help without becoming a city employee — “I simply worked out a way to be compensated without using taxpayer dollars,” he explained in a recent interview. Smukler worked for CGC, coordinating ad placements and receiving a salary, for much of 2011. And then, in early 2012, he left the company to form his own — “Liberty City Press,” devoted almost entirely to publishing sheriff sale ads, business which Cardenas Grant appears to have been
TECHNICALLY PHILLY
happy to send Smukler’s way. Within about a year, in other words, Smukler had helped Cardenas Grant Communications secure a contract, gone to work for the company, and then became a major beneficiary of its business. Documents showing Smukler placing ads in several local papers as agent for Cardenas Grant, and then invoicing the Sheriff ’s Office for ads placed as a representative of those papers first emerged in several reports by a local blogger, and were featured on the blog Philadelinquency.com, published by Christopher Sawyer. Smukler’s company, Liberty City Press, essentially acts as a central publisher for sheriff sale ads that run in several local minority and ethnic newspapers: the Philadelphia Gay News, Al Dia, The Jewish Exponent, The Metro Chinese/Viet Weekly, and the Sunday Sun, a paper owned and run by Philadelphia NAACP president Jerry Mondesire. Essentially, Smukler provides an insert containing sheriff sale ads for these papers — for, of course, a commission. Smukler says the idea was to bundle advertising within this network of papers and, using their combined circulation, sell ads to corporations and others interested in reaching minority readers. About a year in, however, Liberty City Press has only found one such client: the Sheriff ’s Office. A typical issue includes between one and four pages of “news” content (“Avoid Common Exercise Mistakes,” was a recent example) and then
pages and pages of sheriff sale ads. The latest issue consisted of a single front page opinion piece and 10 pages of sheriff sale ads. The ads appear to be worth at least around $160,000 monthly — or roughly $2 million a year — for the network’s members, according to documents obtained and first published by Philadelinquency.com blogger Chris Sawyer. Of course, they’re not the only ones to capitalize on the willingness of the current sheriff to exceed the advertisement requirements laid out in state law. That law states that all sheriff sales have to be advertised in the Legal Intelligencer, a subscription newspaper which primarily serves the legal community, and another paper of “general circulation.” Despite repeated requests by AxisPhilly, the Sheriff ’s Office has declined to reveal how many papers it advertises in or how much it pays for the service. A survey of available print publications revealed sheriff ads in at least the following publications, all of which have ties to local politics. The Public Record, a newspaper owned by former Councilman Jimmy Tayoun, which has deep ties to political interests. The Independent Voice, a free weekly newspaper, run by James Foster, a former Independent candidate for City Council and the Second Congressional District seat occupied by U.S. Rep Chakka Fattah The Neighborhood Leader, a tiny
newspaper published by Heshimu Jaramogi, a former reporter who has also handled advertising for U.S. Sens. Bob Casey and Arlen Specter, as well as Congressman and Democratic party boss Bob Brady. How the Sheriff chooses these publications is unclear — the office has refused to answer specific questions about its advertising practices. At one point, spokesman Joe Blake said a list of the publications was posted on the Sheriff ’s website. In fact, the website mentions only the Legal Intelligencer, Inquirer, and Daily News. Smukler defends his own network’s lucrative arrangement as an antidote to what he characterizes a sweetheart deal for the larger “papers of record,” notably the Legal Intelligencer and Inquirer. The newspapers in his network “live in the neighborhoods and support small business in the neighborhoods,” Smukler said. “Is it really a bad thing to distribute advertisements beyond the Inquirer and the Daily News, particularly when their circulations are tanking?” Smukler points out that the Sunday Sun recently implemented a searchable database of sheriff sale listings — a clunky feature, but one not found on the Sheriff ’s Office website. (The Legal Intelligencer also has a search engine.) “The Inquirer and the Daily News, … they could have come up with a searchable database too — did they?” To advocates of reform of the Sheriff ’s Office, the issue is not how the advertising pie is sliced, but the fact these ads
17
5 DECEMBER 2013
REGIONSBUSINESS.COM
add costs to the foreclosure process that are ultimately born by distressed homeowners. Advertising – by far the bulk of fees added in the sheriff sale process – may be paid by the banks, but they are simply added to the judgment against homeowners. They stand as one more hurdle to getting out of foreclosure. According to Philadelphia Legal Assistance attorney Irwin Trauss, who has advocated for homeowners in foreclosure, advertising costs have actually gone up since Reach was ousted. “At least with Reach, there were some economies of scale,” Trauss says. Irv Ackelsberg, another attorney who’s advocated for reform of foreclosure policies, agrees. In addition to delinquent mortgage payments and lawyers fees for homeowners to reckon with, Ackelsberg says, ”now there’s a judgment against them for fees to the sheriff.” “So what’s going on here? Well obviously, what’s going on is not the Sheriff finding the most cost effective way to do this.” *** Two years ago, Mayor Michael Nutter and Philadelphia Sheriff Jewell Williams made a deal. The sheriff agreed, among other things, to follow city regulations that require that all contracts go to the city’s Law Department for approval. The mayor, in exchange, agreed to continue to fund an embattled office whose elimination has been called for various times over the last few years. It was a truce that would allow the city to at least claim a victory for transparency: Nutter’s push to dissolve the Sheriff ’s office followed a report by City Controller Alan Butkovitz accusing former Sheriff John Green of allowing an outside company without a valid contract to essentially run the office’s real estate division for millions in commissions. The company, Reach Communications, disputes this and claims it operated under a valid agreement made under Sheriff Green. The matter is under litigation. Under this new deal, enshrined in a Memorandum of Understanding and signed by Mayor Nutter and Sheriff Jewell Williams, there would be none of that: “All contracts of the Sheriff ’s Office,” the agreement stated, “shall be in writing and shall require approval” by the city’s Law Department — almost word for word what’s already required by the City Charter.
There is evidence the Sheriff ’s Office is not complying with that 2011 agreement. AxisPhilly has found that it is assigning significant no-bid contracts to companies and individuals without city approval. How this could happen — why the Sheriff hasn’t cleared these contacts with the city, and why the city hasn’t taken steps to intervene —isn’t clear. The Sheriff has repeatedly refused to answer questions about its contracting procedures, and the city declined to comment as well. Contracts for at least four companies with which the Sheriff has acknowledged doing business are not listed in city records as being approved by the Law Department. Other documentation, as well as information from sources close to the office, suggests that the number of individuals and companies who have been on the Sheriff ’s payroll — without the approval or scrutiny of the city — is much larger than that. The City Charter requires contracts from all agencies — whether city Departments or independently elected, like the Sheriff ’s Office – to be approved by the city’s Law Department. And all contracts sent to Law are supposed to be marked “conformed,” (approved, essentially) in the city’s electronic contract database before the city will issue a check. Yet several companies currently working for the Sheriff aren’t listed as having approved contracts in the city’s database. At least three contracts the Sheriff ’s office has acknowledged having — with Cardenas Grant Communications, City Line Abstract Company, and Philadelphia Search and Abstract, LLC — were never fully approved by the city’s Law Department. And not one of 14 contracts submitted by the Sheriff to the city’s electronic contract database for approval by Law was ever actually approved. This is not to say these companies aren’t doing legitimate work, or working under good-faith understanding that their contracts are valid. The fact that the city hasn’t approved the Sheriff ’s contracts is really a question for the Sheriff and the city. But it’s a question where the answer matters. The fact that at least some these companies were paid without their contracts ever having been approved indicates that the Sheriff ’s Office has been paying these vendors using its own funds, avoiding the system of built into the city’s normal
contracting procedures. Normally, before the city can issue a check it has to pass approval from the city’s Law Department and the City Controller. It’s part of the system of internal controls practiced by the city for years for every expenditure by every department and agency. It’s also required by city law. The Philadelphia Home Rule Charter explicitly states that for all city offices (including the Sheriff ), “The [Law] Department shall prepare or approve all contracts,” and that the “Director of Finance shall approve” contracts as well. In its lawsuit against Reach Communications, the city cited these very clauses, maintaining that those contracts would have been denied had they been submitted to the Law Department. Circumventing the city’s contracting and procurement processes means circumventing the scrutiny of those offices — in exactly the same way the city and Controller accused former Sheriff Green of doing shortly before he resigned under pressure. The Controller’s audit revealed an agency that had lax accounting standards and that had skirted normal contract procedures for no-bid contracts – contracts which the Sheriff can assign more or less at will, and which have often gone to companies owned by or connected to political players. The 2011 memorandum was designed to halt non-transparent finances by putting all contracts under routine scrutiny by the Law Department and the Controller. The City Controller’s office, which is supposed to act as an independent auditor of all city agencies, noted in an email that if contracts are being issued outside of normal practices, they would never come across the Controller’s desk. “If a contract is not prepared or reviewed by the City’s Law Department as required by …. the Home Rule Charter then payments on that contract would not come through the city’s finance system or to the City Controller’s Office,” said Harvey Rice, a deputy to Controller Alan Butkowitz. The Law and Finance Departments, as well as Mayor Nutter’s office, declined to comment on these apparent violations of the Memorandum of Agreement. Nutter Spokesman Mark McDonald cited “ongoing litigation,” as a reason for the silence. But the litigation to which McDonald refers is a pair of lawsuits between the city, former Sheriff Green, and Reach Communications, which are
seemingly unrelated to new contracts entered into by Green’s successors, interim Sheriff Barbara Deeley and Jewell Williams. When pressed for clarification, McDonald wrote only that AxisPhilly’s questions about current Sheriff ’s office procedures “are still issues squarely at the center of pending litigation.” He declined to elaborate. But these explanations, says Mark Zecca, a longtime top lawyer for the city who ran for Controller this year, don’t hold up – and don’t take the city or Controller off the hook. “The Sheriff absolutely is required to go through the normal procurement and finance requirements — it’s in the Charter. The Sheriff isn’t allowed to just go out his own, no way,” Zecca said. “If you’re Finance Director, you’ve got to put a stop to that. You don’t have to be blind if you don’t want to be blind.” Zecca says the city’s Law and Finance departments should be enforcing the rules of the City Charter – and that the Controller, as an independent check, should be raising alarms about city inaction as well as investigating the Sheriff ’s contracts himself. City Controller Alan Butkovitz, meanwhile, declined to comment on the specifics of AxisPhilly’s findings but says that another audit is underway. “We are currently engaged in an audit of the Memorandum of Understanding,” Butkovitz said in a statement. Sources in City Hall and City Council, speaking on background, suggest that while there may be private frustration with the Sheriff ’s Office, the political will to publicly criticize the Sheriff simply isn’t there. Behind the scenes, the city has been working to help the Sheriff implement a much-needed new computer system (named “JEWELL,” just like the Sheriff). And city agencies like the Revenue Department appear to have absorbed some of the contracts for work previously done by the Sheriff. AxisPhilly shared these findings with the Sheriff ’s Office for comment but received no explanation as to why so many contracts do not appear in city records as having been approved. In an email on Sunday, Sheriff spokesman Joe Blake wrote that he had already answered our questions. AxisPhilly disagrees and has re-submitted them for comment. This article was originally published in Axis Philly at AxisPhilly.org.
18
5 DECEMBER 2013
REGIONSBUSINESS.COM
FINE ESTATES
$2.7M Spacious Rittenhouse Square Condo 1820 Rittenhouse Square is a stunning condominium residence set on the south side of Rittenhouse Square. Residence 1201 is 3,217 square feet with three bedrooms, den and three and a half baths. The gorgeous living room and dining room face Rittenhouse Square and one of the on site garage parking spaces is included in the purchase price. Enter an elegant foyer with a large coat closet and powder room. There is a terrific wet bar with refrigerator and large wine refrigerated storage for approximately two hundred bottles of wine. The fabulous living/dining room space is magnificent for entertaining. Off the living room/dining room is a den which adds to the entertaining/living space. There is a great spacious eat in kitchen. There is a great master bath and extraordinary closet space. The two additional generous bedrooms have ensuite baths.
For more information, please contact Joanne Davidow at (215) 790-5656
5 DECEMBER 2013
REGIONSBUSINESS.COM
REAL ESTATE
19
Start Holding Your Breath On Chestnut St. — Maybe BY SANDY SMITH A recent development concerning a highly anticipated redevelopment project on Chestnut Street in Washington Square West’s Midtown Village-Gayborhood section offers an occasion to—well, maybe not unchain our hope completely, but at least let its leash out a little bit. Last week, a bright orange demolition notice appeared on the front of 1118 Chestnut Street. That’s the easternmost of the three properties a unit of Brickstone Realty seeks to turn into an 80-unit apartment building with retail on the street floor. The notice states that demolition of the properties will begin on or after Dec. 10. That means that work will get under way soon on what promises to be the single most transformative project announced to date for the slowly renewing stretch of Chestnut from Independence Hall to Broad Street. According to previously published reports, the developer will tear
down two of the three buildings on the four lots spanning 1118-28 Chestnut Street and renovate the third, westernmost structure. Or will it? We are optimistic because so far, Brickstone has had no problem following through on projects it commits to building. But we must nonetheless temper that optimism in light of what’s happened a few blocks away at 15th and Walnut streets. There, a demolition notice was also posted in connection with a previously announced and approved four-story retail structure. Today, months later, the buildings still stand. Given what the developers’ representatives have said in the press, however, we expect something better to happen here. This article was originally published on the Philadelphia Real Estate blog at Blog.PhiladelphiaRealEstate. com.
20 Q&A
5 DECEMBER 2013
REGIONSBUSINESS.COM
TONY RICCI:
MORE ‘LIVE!’ IN SOUTH PHILLY
Tony Ricci, CEO of Greenwood Racing, which owns Parx Casino, is convinced that Philadelphia’s next gambling destination will be built in South Philadelphia, near the stadiums. Parx and partner company, Cordish, have experience here in the entertainment industry and use Xfinity Live! — owned by Cordish — as an example of the potential revenue that could come from the eight million plus annual visitiors to the stadiums. Not only that, Mr. Ricci says the Live! casino would bring serious economic development to the area. What is the key differentiation between Live! casino and the other proposed projects? I think there’s two key factors. One is our location: We believe the stadium district is the only viable location for a second casino in Philadelphia. It’s the only location that offers significant incremental business as opposed to cannibalization of existing properties that would occur with the downtown proposed properties. That is because you have more than eight million visitors to that stadium district and the success of Xfinity Live! proves that you can tap into that visitation without a very large percentage of people needed to make it a successful operation. So, we would be able to serve people who don’t necessarily live within five to ten miles of our casino, because, as you know, people come to the stadium district from two hours plus away for events and we’re very confident, particularly with the success of Xfinity, that we’ll be able to tap into that and create something that’s unique and, in fact, unique to this area. The other part of it is we’re the only operator — Parx and our partner Cordish — that actually operates in the entertainment business in this market. We know this market very well, we’re the number one casino in PA. The Cordish Company has the number one casino in Maryland and they operate Xfinity. We both know this market. The other operators are either novices to the casino industry, or, in the case of Penn National, they don’t operate in this market and don’t understand
it as well as we do. Other than tax revenues, what type of economic growth will Live! create in the area surrounding its proposed location? The nice thing about it is that area is already set up for significant volumes of traffic. We’re going to create a parking garage, so we’re not going to exacerbate the parking problem on game day because we’ll have the ability to accommodate the guests right on our property. They won’t spill out into the neighborhoods. From an economic standpoint, we’re obviously going to cause significant tax revenue for the state, there’s going to be construction jobs and investment when we initially open, and we believe we’re going to invest 150 million dollars in this project. We will then create approximately 2,000 jobs within this operation. There will be a knock-on effect for services that will support the business at the casino operation. It’s very similar to what we have here at Parx. We’re very proud of the fact that we work very closely with local businesses to make sure they benefit from our operation. Here in Bensalem we’ve developed a significant relationship with the community and in Bucks county and also Northeast Philadelphia. So, people close to us are given preference for contracts and even jobs.
5 DECEMBER 2013
REGIONSBUSINESS.COM
OPINION
21
The Dirty Truth About New Year’s Resolutions
Joe White is an author, speaker, international trainer, and founder of Get Life Coaching. Learn more at www.getlifecoaching.com.
How many times have you had this conversation? As the New Year approaches, everyone will be asking the same thing…. What are your New Year’s resolutions? Losing weight, stop smoking, and get a better job are usually the top choices. The problem lies in the fact that most resolutions only set you up to fail. New Year’s Resolutions should not be about reinventing yourself. Often you have heard the phrase, “New year, new me.” Although the phrase is catchy, it suggests that something is wrong with the “old you.” That is not the case. Instead, think of the New Year as bringing new patterns, new commitments, new strategies, and new emotions that, when combined, help create a “better you.” The biggest problem with making resolutions is that, in reality, 90% of all New Year’s resolutions fail. The majority of these resolutions fail not for a lack of desire but rather a lack of commitment. Most people say they want something but are not willing to put the work in to achieve it. In fact, most people start out strong on their resolutions but quickly lose momentum. Once an individual begins to lose this momentum, they become emotionally flooded by resistance and overwhelmed with the fear of failing. Resistance is the driving force behind your success. Challenging ourselves to rise to the occasion will be the dividing line between those who succeed and the 90% who fail. When making a new year’s resolution follow these steps: 1. “Plan out your Resolution” In order for your New Year’s Resolution to be successful, you must strategically plan how you will achieve your goal. No one has ever accomplished any complex task without an agenda. Take it step by step and remember the saying “slow and steady wins the race”. 2. “Embrace the resistance” Resistance is a good thing, it is a sign that you are headed in the right direction, and whatever you are doing is working. The path to greatness is often one you have to pave yourself. Hard work pays off no matter what the situation.
CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
3. “Take Massive Action” Don’t be afraid to fail. If you surround yourself with good people and positive energy, they will pick you up when you fall. Dive in head first and without hesitation, your biggest enemy is yourself. (FLICKR.COM/UB1
Have a safe and happy new year. Live free!
22
5 DECEMBER 2013
REGIONSBUSINESS.COM
BY THE NUMBERS
21,000
Number of emergency department visits related to energy drinks in the US in 20011 (vs. 10,000 in 2007), according to a report published earlier this year by the Substance Abuse and Mental Health Services
6,996
45%
Number of Americans living with one more chronic health conditions, reports the Pew Research Center
Energy drink-related ED visits involving adverse reactions in 2007
14,042
Energy drink-related ED visits involving adverse reactions in 2011
3,060
Energy drink-related ED visits involving misuse or abuse of drugs in 2007
6,090
Energy drink-related ED visits involving misuse or abuse of drugs in 2011
6,996
Energy drink-related ED visits involving adverse reactions in 2007
14,042
Energy drink-related ED visits involving adverse reactions in 2011
FLICKR/CANADIAN PACIFIC
92,000,000
141,00,000
Unique visitors shopped over Thanksgiving weekend (vs. 139,000,000 in 2012), says a National Retail Federation survey conducted by Prosper Insights & Analytics
45,000,000
$407.02
Shoppers made purchases on Black Friday 2013, compared with 89 million last year
Average amount spent by customers during the Thursday through Sunday period, down from $423.55 last year
People shopped on Thanksgiving Day this year, versus 35,000,000 last year
59,000,000 Customers made purchase online over the holiday weekend
Credit: Photo by J. Fusco for Visit Philadelphia
FLICKR/RWALTHAMPUBLICLIBRARY
31%
Number of U.S. adults living with some type of chronic condition who reported going online to attempt to self-diagnose
60%
Number of those who said they spoke with a medical professional after such online research
72%
Number of older American adults living with chronic conditions who reported using the Internet as a medical information tool
GIVE THE GIFT OF WINNING! Holiday gift cards available now. Call 1.888.588.PARX for details.
PULL FOR PRESENTS TUESDAYS
SPIRIT OF GIVING WEDNESDAYS
DECEMBER 10 & 17 2PM â&#x20AC;&#x201C; 10PM
DECEMBER 11 & 18 NOON â&#x20AC;&#x201C; 8PM
Earn 30 entries to receive a pull tab game card worth up to $5,000 free play!*
Donate a new, unwrapped gift to receive $10 free slot play!*
THIS WEEKEND AT 360!
Visit parxcasino.com/calendar for full band list!
FRIDAY, DECEMBER 6 Blue Label & DJ Sev One
NEW YEARâ&#x20AC;&#x2122;S EVE Earn entries 12/2812/31 for your chance to win a share of $100,000! Watch the ball drop at 360â&#x20AC;&#x2122;s Swinginâ&#x20AC;&#x2122; Soiree with Bigg Romeo & Fish Out of Water playing live til 3am!
# % Go Ham, Modern Bliss & DJ Eric Vanderslice
MANAGEMENT RESERVES THE RIGHT TO CHANGE OR CANCEL THESE PROMOTIONS AT ANY TIME. MUST BE PRESENT TO WIN. VISIT XCLUB FOR ADDITIONAL DETAILS, RULES AND REGULATIONS. *ONE REDEMPTION PER GUEST PER WEEK. GAMBLING PROBLEM? CALL 1.800.GAMBLER
ability
Noh-uh-bil-i-tee
Reference checks. Credit reports.
our Landlord Cooperation Program for residential landlords and our Program for commercial landlords. Together these programs keep property
Visit: Email: Click: