Q&A: DAVID SOLOMON, GOLIA VODKA COPHILLY: CROWDFUNDING’S SAVIOR?
Are you running your business like a monster?
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REGION’S BUSINESS
PHILADELPHIA EDITION
A JOURNAL OF BUSINESS AND POLITICS
BATTLING RED TAPE IN PHILADELPHIA
What is holding back business in Philadelphia? Red tape. We take a look at the tax system and regulations in Philadelphia, and see just what is needed to ensure business can be done in the city.
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CONTENTS
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“We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.” — Winston Churchill “I like to pay taxes. With them, I buy civilization.” — Oliver Wendell Holmes, Jr.
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20 What’s Holding Back Businesses
In Philadelphia?
16 coPhilly Looking To Boost 4 10 24 27
Crowdfunding Success
Weekly Briefing Political Commentary Fine Estates
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City Taxes No Excuse For Avoiding Philadelphia
Q&A: David Solomon, Golia Vodka Co-Founder
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DEALBOOK
TECHNOLOGY
Apple Opens Second Care Center In PA A new, 2,500 square-foot, Apple-Care repair facility in Carlisle, Pa., may mean repairs for Apple customers on the East Coast or Midwest region are completed faster. Prior to the newly-opened PA-plant, the only AppleCare repair center in the country was located in California, requiring under-warranty products coming the Eastern half of the U.S. to spend a day or more in transit back and forth. The East coast center will mean less travel time for such products and improved workflow could potentially speed up repairs country-wide.
Wynn Resorts Pulls Out of Pennsylvania Development Following a Board of Directors mee ting in Las Vegas, Wynn Resorts announced its decision not to pursue any developments in Philadelphia and the withdrawl of its licensing applications in the state of Pennsylvania. Discussions and rumors about the potential construction of a Wynn property in the city have been circulating for months. In a news release, the company said Philadelphia’s market performance over the past year and the recent
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approval of gaming in the state of New York, among other factors, played a part in its decision to pursue opportunities outside the Keystone State.
HEALTHCARE
Shire Pharma Will Buy Exton PA’s ViroPharma In an effort to strengthen its rare disease drug portfolio, Shire PLC will spend $4.2 billion to purchase Exton, PA biopharmaceutical company, ViroPharma Inc. The Irish drug-maker plans to pay $50 per share, representing a 27% premium of the company’s closing price before the deal was announced. ViroPharma’s therapeutics focus on serious diseases with limited treatment options, including the seizure drug Buccolam and antibiotic Vancocin. The company’s Cinryze, a drug used to treat hereditary angioedema, a rare genetic disorder that can cause dangerous swelling of the throat or larynx, generated the majority of the compnay’s $428 million in worldwide revenue last year.
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WEEKLY BRIEFING
TOURISM
‘Visit Philly’: More Than A Campaign Following the 2010 launch of visitphilly.com and the success of the website since, the Greater Philadelphia Tourism Marketing Corporation (GPTMC) announced this week that it will officially change its name to Visit Philadelphia. The site is currently the most-visited among the ten largest cities’ destination websites, the organizations behind which have been taking on more actionoriented names for years. GPTMC will continue to run its tourism campaigns like the popular, “With Love, Philadelphia XOXO,” but will be doing business as Visit Philadelphia with a new logo that will reinforce the brand’s new identity.
Survey Says: Pennsylvanians Support Private Liquor Sales Results of a telephone survey of more than 1,100 Pennsylvania residents age 21 and over found that not only do the majority support the move from a statecontrolled system to the privatization of liquor sales, but over 50% say they are more likely to vote for state legislators who support the effort. Broken down by party lines, 70% of both Republicans and Independents, nearly 60% of liberals and 55% percent of union households surveyed favored abolishing the state-run liquor monopoly. Among the public perceived benefits of privatization were reduced consumer costs, increased job pool, and an end to
border bleed, where residents cross state lines to purchase spirits. Respondents rejected the idea that the change would result in job losses, decreased state revenue and an increase in dangerous neighborhoods. Approximately two-thirds of consumers support fully removing government involvement in the sale of liquor over other measures that would permit wine and spirit sales at current retailers, such as beer distributors. The survey was conducted by Heart and Mind Strategies and co-sponsored by the Commonwealth Foundation and Keystone Politics.
HOSPITALITY
Phila Hotel Association Opposes New Construction In a letter to City Council President Clarke, the Greater Philadelphia Hotel Association opposed legislation that would allow construction of a new hotel at 15th and Chestnut St. The group cites declining revenue in the city’s hospitality industry and concern that more competition will detrimentally impact existing hotels. The letter also places blame on the Convention Center.
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WEEKLY BRIEFING EXECUTIVE SHOP
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@bcgp The Bicycle Coalition of Greater Philadelphia. Promoting bicycling as a healthy, low-cost, and environmentally-friendly form of transportation and recreation. RT @bcgp: You should know that Philly law allows 20 min load/unload in bike lanes. PPA vehicles included in that. RT @bcgp: PhillyPedals Joins Ranks of PhillyFocused Bicycle Websites http://dlvr.it/4H7Rq7 #bikePHL
SEE Eyewear’s new Philadelphia location is the company’s 31st in the country. For 15 years, SEE’s focus has been on making high-quality, high-design fashion eyewear available at a fraction of the cost of traditional sources. Founder Richard Golden and staff work with top designers to create and manufacture the store’s private collection and each location is stocked with a selection of hundreds of frames. But you’ll only find a few of each pair locally available, meaning your frames will stand out from the crowd. 37 Coulter Avenue, Ardmore, PA 19003 (267)-319-1741.
Vine for Windows Twitter’s popular video sharing app, Vine, is now available for Windows Phones. Vine allows users to take short video clips to share with others on the social network. Video creators on the WP platform will have access to all the same features as in other versions, such as Ghost and TimeTravel.w There are also exclusive Windows Phone features like the ability to “pin” favorite accounts to your home screen and pivot to switch through apps quickly. In August, Vine announced that it had reached 40 million users.
RESTAURANT ROUNDUP
New Rittenhouse Area Restaurant In The Works Restauranteur Alex Capasso and partner Michael Franco are in the process of developing a casual barrestaurant at 267 S. 19th St., previously C19. The pair met 13 years ago at an upscale New Jersey restaurant and have extensive industry experience including establishments in Collingswood, Cinnaminson, New York and of course, Philadelphia. The yet unnamed restaurant will have a casual feel with rustic design elements like exposed brick walls and a bar made from reclaimed wood and stone. The spot is scheduled to open in early 2014, according to a Philly.com report.
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14 NOVEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
City Council Committee Approves Hotel Tax Break
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 a meeting of the Philadelphia City Council Committee on Finance on November 7, 2013, the committee voted to approve a tax incremented financing plan for a new 700-room hotel to be built at 15th and Chestnut Streets. The development plan would convert a parking lot at the intersection into Center City’s newest hotel, which is intended to boost rooms in support of the Philadelphia Convention Center. The plan will actually include two new hotels. The financing plan will be worth about $33 million but will cost Philadelphia taxpayers approximately $12 million. The majority of the opposition at the hearing came from existing hotel owners. Their position was that the new hotels, built with the financial assistance of the city, would hamper the business of existing hotels through increased competition. There was support for the plan at the hearing. Julie Coker of the Convention and Visitors Bureau explained that the Philadelphia Convention Center has missed out on bookings because there was a lack in available hotel room blocks in the areas around the event space. She stated that over 15 such associations
passed on Philadelphia. The new rooms, according to Coker, would allow the Convention Center to host one particularly large convention or even two smaller conventions simultaneously.
WHAT COUNCILMAN GOODE WAS CONFUSED ON IS WHY THESE DEVELOPERS WHO STAND TO MAKE QUITE A BIT OF MONEY, NEED HELP FROM THE CASH-STRAPPED CITY.’
The developers behind the project also testified before the committee. They stated emphatically that the project would not proceed without the requested funding assistance from the city. Some members of Council were not enthused about the idea. Councilman Wilson Goode repeatedly asked what profit margin, or net potential profits the hotel developers stood to make on the project. No one could give him a
numerical answer. Councilman Goode stated that he found this funny and commented that he would be voting no on the funding plan. The committee did however end up voting in favor of the plan, but with some minor changes. The developers agreed to increase their goal for hiring Philadelphia residents from 50 percent to 75 percent. Furthermore, they would have to negotiate and implement what is called a “labor peace” agreement with unionized workers at the hotel. Throughout the hearing, it was clear that everyone saw the benefits of large hotels being built in Center City. The businesses bring jobs, visitors, and tax revenue. What Councilman Goode was confused on is why these developers who stand to make quite a bit of money, need help from the cash-strapped city. Since the plan is going forward, hopefully the city sees a good return on its investment. For more City Council news, visit http://www.regionsbusiness.com/bloggers.
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14 NOVEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
11
Scranton Is Running Out Of Time And Money
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.
Scranton has tried to borrow its way out of debt. And that strategy has worked just about as well as most people would expect. Sometime this week, the financially troubled city about two hours north of Philadelphia is going to have to pass a new budget for the 2014 fiscal year, which begins on January 1. Before that budget can be balanced, however, the city will have to deal with an expected $20 million shortfall. The City Council and outgoing Mayor Chris Doherty will have to reach some kind of an agreement on hiking taxes — probably a new tax on commuters, though a tax on alcoholic drinks also could be considered, in addition to increases in existing taxes — to close the budget gap. If they don’t, a nightmare scenario could begin unfolding. According to Moody’s, Scranton could default on its debt or even slide towards bankruptcy before the end of the year. If the budget gap isn’t closed, two financial institutions propping up the cash-strapped city government likely would pull out of their
financing deal, which was struck in July 2012 when the city was in the middle of its last fiscal crisis. At that time, Doherty had slashed all city workers’ paychecks to minimum wage because the city literally did not have the money to pay its bills. A stop-gap solution was found when two banks agreed to loan Scranton the necessary cash to keep operating — provided they would be paid back with interest, of course. If the city finishes the year with an unbalanced budget and defaults on those debt payments, there is little reason to think other banks will step in to fill the void. “The resulting liquidity squeeze would leave the city with few options to meet its financial obligations, raising the threat of default or bankruptcy,” Moody’s analysts warned last week. Compared to the crisis in July 2012, this has the potential to be more severe, they warned, possibly triggering multiple defaults. Scranton has been in financial trouble for decades, but even though it has been part of the state’s Act 47 program and has worked through several state-supervised recovery plans, things
seem to only get worse. A major culprit is Pennsylvania’s Act 111, which prevents cities and other municipalities from even considering cuts to public-sector workers’ pay and benefits as part of an overall recovery plan. In Scranton, where the cost of pensions for retired public workers already has climbed above $100 million, the public employee issue is sure to be put to the test if another crisis ensues. Lawmakers in Harrisburg have spent the past five years studying various solutions to the problems facing Act 47 cities. They may soon be thrust to action, if Scranton’s mess worsens by the beginning of the year. The solution, if there is one, will be complicated and difficult for all to swallow. But the high levels of borrowing that has allowed Scranton to teeter onward for the past few years — the city borrowed $39 million to make ends meet this year, while bringing in about $50 million in tax revenue — must come to an end. Boehm is a reporter for PA Independent and can be reached at Eric@PAIndependent.com.
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14 NOVEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
What To Consider When Choosing Philadelphia
Rick Grimaldi and Lori Armstrong Halber are partners in the law firm of Fisher & Phillips LLP. Follow them on twitter @LoriRickHRLaw. CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
You are a business owner. You have a choice to make — lease space in Philadelphia or take advantage of an opportunity on the other side of City Avenue — in Montgomery County. Besides city wage and business privilege taxes, if you operate your business in Philadelphia, you will be subject to several employment-regulating ordinances passed or amended within the past two years — none of which apply if you choose the space on the other side of the street. If you are a company doing business with the city, under the Philadelphia 21st Minimum Wage and Benefits Standard, you are required to pay 150 percent of minimum wage and, as of July 1, 2012, you must provide paid sick leave as well as benefits to the life partners of your employees pursuant to the Equal Benefits ordinance. However, if you do business within the city but not with the city, you do not have to provide paid sick leave because that ordinance — called “Promoting Healthy Families and Workplaces” or “The Paid Sick Leave Ordinance” — was
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defeated earlier in 2013. Got that? This is the problem when local municipalities try to regulate the employment relationship — such ordinances are often confusing, redundant or unnecessarily restrictive. Just this year, Philadelphia enacted the LGBT Equality Bill, which prohibits discrimination based on sexual orientation and gender identity and makes it unlawful for any employer to fail to permit employees to dress consistently in accordance with their gender identity. Congress, however, is close to passing the Employment Nondiscrimination Act, which would afford the same protections under federal law. And on October 3, 2013, three Philadelphia City Council members introduced legislation amending the City’s Fair Practices Ordinance that, if passed, would require Philadelphia employer’s to reasonably accommodate pregnant employees. The federal Pregnancy Discrimination Act and the Americans With Disabilities Act already
protect pregnant workers. Employers on the Montco side need not be concerned with Philadelphia’s January 2013 “Ban the Box” law which restricts the ability to ask applicants about criminal records. But if you choose the space in Philadelphia, you will not be able to avoid the preliminary interview with an applicant for your controller job who has a conviction for embezzlement. That’s because your application cannot include questions about criminal convictions and you cannot ask about criminal convictions during the first job interview, even though that information may legitimately disqualify the applicant. To be sure, some regulation is necessary to protect consumers, investors and even the safety of workers. But when local government attempts to impose its will upon business, it is often done haphazardly and results in unintended consequences, for example, by discouraging jobcreating employers from choosing its side of the street.
14 NOVEMBER 2013
LEGISLATIVE UPDATE
REGIONSBUSINESS.COM
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Legislators Still Hopeful On Transportation Deal BY SCOTT STARUCH The legislature returned to Harrisburg on Tuesday and eyes are focused on transportation funding negotiations. There are now eight session days remaining through the end of 2013. Should legislators fail to reach an agreement, many political analysts believe it will be challenging to get passage of a transportation funding package in 2014 — an election year. However, many thought, and opinion leaders are hopeful, a deal can be reached this year.
Courts
On Tuesday, State Reps. Bryan Cutler, R-Lancaster; and Brian Sims, D-Phila., introduced legislation to establish a merit-based system for appointing statewide judges.
Energy & Environment
House Bill 1576 was scheduled for a vote in the House Game and Fisheries Committee on Wednesday. The bill, known as the Endangered Species Coordination Act, was the focus of a press event last Thursday with opponents saying it is contrary to public interest and “a dangerous and unprecedented attack on wildlife,”
according to Steve Stroman of PennFuture, an environmental group. However, Pa. Chamber of Business and Industry President Gene Barr counters that “The legislation promotes accountability, transparency and uniformity by requiring the Game, and Fish and Boat commissions to follow a procedure for species management and protection that every other state agency goes through in promulgating regulations.” The Bill’s sponsor, Representative Jeff Pyle, explained “We are simply asking for sufficient burden of proof that a species is truly endangered or under a threat of extinction…Not all state agencies are required to play by the same rules when it comes to these designations, and my bill would essentially level the playing field.”
Alternative fuel vehicles
Last Thursday more than $3 million in Alternative Fuel Incentive Grants (AFIG) was awarded to 33 companies, counties and organizations converting to compressed natural gas (CNG), liquefied natural gas (LNG) or propane for medium to light-weight fleet vehicles. Visit www.depweb.state.pa.us for a full listing of grant recipients.
Health Care
This week the House Professional Licensure Committee met. On the docket was HB 1603 that, according to the Pennsylvania Medical Society, “assures patients that anesthesia will be administered by an anesthesiologist or other highly trained physician, or by a nurse anesthetist under the supervision of such a physician.”
Gaming
Companion bills HB 290 and HB 1098 (that would allow small games of chance in hotels, restaurants and other businesses) were scheduled for votes in the House this week. Last week — in response to increased competition in the region — Senate President Pro Tempore Joe Scarnati introduced a resolution to have the Legislative Budget and Finance Committee conduct a study on the future viability of Pennsylvania casinos.
2013 Election
A few highlights: Supreme Court Chief Justice Ron Castille and Justice Max Baer won their retention elections, as did Superior Court Judges Jack Panella and Susan Gantman; Republican Vic Stabile was elected to the Superior Court.
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14 NOVEMBER 2013
POLITICAL COMMENTARY
REGIONSBUSINESS.COM
New York Made A Mistake By Turning Down Marcellus
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.
There are lots of things to love about the Big Apple. One is their pizza. New York’s famed crispy crust pizza — think Brooklyn’s Grimaldi’s or Lombardi’s in lower Manhattan — comes hot out of a brick oven fired by coal. But environmental regulations bar new coalfired ovens. So the city’s best pizza makers have to rely on ovens that were firing before the regulations took effect or find new sources of energy. A city with more than eight million people uses a lot of energy. With so many people relying on a steady source of power and heat, there has always been an urgent need to provide energy to the city’s families and businesses without adversely impacting their air quality. Readers of a certain age recall a dense blanket of smog that descended on New York City the last week of November 1966, contributing to dozens of related deaths. But that is a story from another era. Today, the Marcellus Shale — the second largest natural gas field in the world — sits below Pennsylvania and New York. Both states have the technology to safely and economically extract it, deliver it to market and use it. But the commonality ends there. While Governors Rendell and Corbett promoted the safe and responsible development of natural gas in Pennsylvania, their counterpart in New York simply said ‘no’ to drilling — at a tremendous cost to his citizens.
By doing so, New York Gov. Andrew Cuomo has left tens of thousands of jobs and billions of dollars in local economic impact and tax revenue on the table. So far, in Pennsylvania, the Marcellus Shale supports more than 200,000 jobs, generates more than $1.8 billion in tax revenue, brings in an additional $400 million to state and local government coffers, and pays more than a billion dollars to landowners. Pennsylvania natural gas also provides a clean, reliable and affordable source of heat and power to the commonwealth’s families and businesses. Electric and gas utility costs have gone down statewide. And the state’s air quality has dramatically improved. In just a few short years, emissions of sulfur dioxide, have fallen by nearly half a million tons per year, meaning $14 to $37 billion a year in lower medical costs, fewer sick days and related economic impacts. New York? Not so much. At least one Gotham City policy maker seems to get the stark contrast. Pennsylvania businesses and families are reaping the huge rewards of safe and responsible development and use of our natural gas. Because our gas is so abundant, there’s a surplus. That surplus finds its way to new markets. One enterprising firm, Spectra Energy, recently completed an interstate pipeline that is carrying gas from northeastern Pennsylvania into New York City. A sizeable number of homes and busi-
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nesses in New York City still rely on oil — less clean and more expensive than natural gas. New York Mayor Michael Bloomberg knows what increased use of natural gas means for his city. A man worth more than $30 billion knows a thing or two about good deals. More natural gas means less home heating oil burned in the city, helping keep the air clean and putting more dollars in residents’ pockets. That’s one reason Hizzoner called the pipeline “something we desperately need.” Mayor Bloomberg has gone further, defending hydraulic fracturing, the process by which natural gas is extracted. “The production of shale gas through fracking is the most significant development in the U.S. energy sector in generations,” he wrote in the Washington Post. “It’s good for consumers’ pocketbooks...spurs economic growth... reduces U.S. dependence on coal, which is one of the best things we can do to improve air quality... and allows more renewable power to be integrated into the electricity grid. “Thanks to fracking,” he concluded, “our national production of natural gas is up 25 percent... Fracking for natural gas can be as good for our environment as it is for our economy.” As more natural gas heats and lights the nation’s largest city, New York will learn what Pennsylvania has been teaching: smart, safe and responsible extraction and use of natural gas yields tremendous rewards.
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coPhilly Creates Program To Boost Crowdfunding Success Rate Business: coPhilly Founder: Kevin Provost, Whitney Krape, Julia Cummings Contact: info@crowdfundingcampuses.com
BY BRANDON BAKER
Steadily, but almost quietly, Philadelphia has become a hotspot for entrepreneurs. The combination of great ideas, available capital and a welcoming environment have set the stage to make 2013 a breakout year for innovation and new businesses. To Learn More ... For more information on sponsorship opportunities or to suggest story ideas, call our main office at 610-572-7112. The web: RegionsBusiness.com Facebook: Facebook.com/regionsbusiness Twitter: @RegionsBusiness Sponsored by
Though the concept of crowdfunding is hardly new — Joseph Pullitzer collected $100,000 in 1884 to fund the Statue of Liberty, after all — its shiny new coat of digital paint certainly is. Sites like Kickstarter.com have become breeding grounds for entrepreneurs both young and old, spanning the spectrum of media wannabes to video-game startups. But if online crowdfunding has been solidly burgeoning to this point, it’s on the brink of exploding if the Securities and Exchange Commission passes proposed rules in late October that would allow equity crowdfunding. Or, in other words, rules that could allow for more of a return-on-investment than just a free T-shirt. Banking on this uptick in crowdfunding usage is coPhilly, an entrepreneurial crowdfunding bootcamp of sorts based out of Benjamin’s Desk at 17th and Walnut streets. An offshoot of its national, campus-crowdsourcing-oriented brand CrowdCampuses, Kevin Provost founded the company in mid-2012 as a happy accident. “I stumbled upon the crowdfunding industry almost by mistake — I had been telling a friend about an idea I’d had to film a documentary about festivals in America, and he said, ‘Hey, you should put that on Kickstarter!’ And I said, ‘… What’s Kickstarter?’” Mr. Provost said. “He’d shown me the site at about 10 p.m. one night, and by 6 a.m. I was still on the website and had moved on to Indiegogo and other crowdfunding sites that cater to all audiences — I was just fascinated that there was this whole industry I didn’t know about.” After perusing the crowdfunding selections online, he realized nothing specifically fit what he was looking for — which, he further came to understand, poses a problem in the industry, with an estimated 2,000 crowdfunding websites to choose from and countless more entrepreneurs who have no idea how to build a successful campaign. “I decided that this needed to be taught not only in colleges, but to entrepreneurs everywhere. The best practices in industries should be distributed everywhere so that everyone can get a handle on what this industry is,” he said. “But the problem is that there is no data. There’s no data about an industry that’s less than five years old, with 2,000 portals that are less than five years old.” In an attempt to break through this barrier, he
and his team of five at coPhilly — a localized version of what will eventually be a city-bycity incubator-like program — are embarking on a private beta with 50 clients, whose progress he will document as part of both offline panel-style training Kevin Provost conferences and a video-training program to be consumed by paying clients. Mr. Provost said he will charge between $250 and $2,000 for one year with the program, depending on the stage of business for each client. Partners of the program include: Philadelphiabased firms Offit Kurman and Shechtman Marks Devor PC, along with several academics from area universities and a bevvy of social-media connoisseurs. “Our goal as educators and trainers is to increase the success rate of the crowdfunding industry, and improve the quantity and quality of deal flow,” Mr. Provost said. “We’re trying to facilitate more deals to leading funding portals, but educate them in such a uniform fashion that it doesn’t matter if you’re going to Kickstarter or Indiegogo.” When it comes to equity crowdfunding, coPhilly hopes to piggyback off of the potential new model to become a go-to source for entrepreneurs left scratching their heads. “Starting next year, everyone and their mother is going to start making a company — going onto these websites, putting up info and trying to raise funds for equity,” said Connor Garlic, sales and marketing director for coPhilly. “We’re going to provide the base system for vetting, so when [proposed rules are implemented] you’re going to need to provide two months of past financial transactions, a business plan, etc., to the SEC.” Next spring, coPhilly aims to employ 50 student interns who will collaborate with entrepreneurs — the idea being that business students, for example, will be best equipped to educate a creative-economy entrepreneur on how to build a business model. Mr. Provost said he’s shooting for a client list of 500 local companies within the next year. And though the project has been bootstrapped to-date, Mr. Provost is hopeful that he can accrue capital in order to operate as an application-based program. coPhilly will officially launch in January.
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2013: YEAR OF THE INNOVATOR
REGIONSBUSINESS.COM
DIARY OF A STARTUP
From Intern To Developer: Why Leaving Your Comfort Zone Matters In late October, Lucidity Health founder CEO Jake Halpert did something unthinkable in the business world: He sent an intern to pitch to investors. So, how did the intern-produced spiel turn out? Former intern Imran Cronk — now a business developer at the company — explains.
In his words: Last month, Lucidity Health was invited to present at the 20th annual Philadelphia IMPACT conference, one of the mid-Atlantic region’s premier venture capital conferences. Our CEO, Jake Halpert, was unable to attend due to an out-of-town meeting — the only people available to attend were Nikhil Das and myself. We are both students at the University of Pennsylvania who started working as interns at Lucidity this past summer. Neither of us have much experience in delivering presentations to potential
investors, so I was surprised when Jake asked us to deliver the 10-minute pitch at IMPACT. In the days leading up to the conference, as we finalized the deck and prepared for the presentation, I learned some lessons on leadership. Jake was taking a significant risk by putting an investor presentation in our hands. However, he never once expressed any doubts about our ability to represent the company and to get the job done. This trust showed me that he was confident in our potential and wanted to give us an opportunity to develop new skills in a real-world setting. Challenging inexperienced team members to stretch out of their comfort zones by taking ownership of an important project or opportunity, I came to understand, is a great way to develop talent and foster confidence. Although it might sound cliché — bear with me — the experience showed me firsthand how believing in another person truly is contagious. The presentation went without a hitch. At the gala afterward, Nik and I talked with people from companies large and small. They were full of advice for Lucidity and seemed interested in the company after watching the presentation. The next time we attend and present during a conference
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or other event, we will look back on this experience for its lessons on leadership and leaving one’s comfort zone. And one day, I hope to foster the same belief in someone else by giving them similar opportunities to learn and grow.
2013: YEAR OF THE INNOVATOR
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City Taxes No Excuse For Avoiding Philadelphia BY CHRISTOPHER WINK Next time some entrepreneur tells you that she is taking her small business to another city or to the suburbs because of the taxes, tell her she must not know what she’s talking about. That’s because the impact that the burdensome City of Philadelphia tax structure has on startup businesses, particularly venture backed technology firms, is way overblown, said First Round Capital managing partner Josh Kopelman during ThinkFest this weekend. This is a place to start something, even if the later stage is something worth managing. It’s something echoed by other business owners: for example, e-commerce company WebLinc has three buildings and more than 100 staff in Old City. “Everyone complains about taxes, but if that’s what’s stopping you from building a business, you have a problem,” said WebLinc cofounder and CEO Darren Hill over coffee last week. “It could be better, but when it comes to talent and culture, you get something for being here.” Think of it this way, as Kopelman described it during a Q&A session during the Philadelphia magazine event:
The most criticized city-specific taxes are those for revenue and profits, which startup businesses traditionally have less of, as they develop a customer base. Even a bootstrapped product-first company that eschews venture funding will still likely have less profit in the beginning than later on. Nonetheless, the city’s revenue and profits tax structure is not far off from other cities like Chicago and New York, as we’ve reported before using PICA data. To clarify, that doesn’t include the wage tax, which has been as much as double New York’s in recent years. The hated city wage tax is still kicking, but if you’re also offering employees company equity, either through shared ownership or in a traditional venture-backed employee incentive arrangement, those returns are taxed through the state’s capital gains tax, which is actually lower than the perceived startup business magnets of California or New York state. Meanwhile, the standard cost of living and recruitment benefits are low, something that Curalate CEO Apu Gupta has frequently cited as a reason he’s building a company here. Despite the wage tax, things have gotten better for individual residents of the city too, as Pew has reported.
That’s not to say there isn’t a challenge in tax structure. Startups that grow to 15 or more employees are less likely to go to other regions, Kopelman has said, but as businesses grow their profits and size, that’s when a city begins competing with its outlying suburbs. That’s one big reason why since 1970, Philadelphia has lost a quarter of its jobs while Boston, New York and D.C. have seen an increase in real jobs. Companies in the city apply for tax credits — the state has spent $4.8 billion annually since 2007 — and there are calls for more in the technology sector. That’s why Councilman Bill Green has been working to update the city’s tax structure, though his focus has been on these young startups that might not be the most affected. Others have pointed to the idea that simply better collecting what money the city is already owed could be a big boon. But whatever the case, the struggles are likely not a core issue for all young companies. “Starting a business in Philadelphia makes a lot of sense,” Kopelman said. The challenge is keeping them. This article was originally published in Technically Philly at Technical.ly/Philly.
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WHAT’S HOLDING BUSINESSES BACK IN PHILADELPHIA?
Some believe Philadelphia’s tax system is doing too much to drive businesses out and hurting the city as a whole. It’s been ten years since the Tax Reform Commission suggested a slew of changes to improve the tax system. How has the city responded? STORY BY ROSELLA ELEANOR LAFEVRE ILLUSTRATION BY DON LEE
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THE TAX STRUCTURE [IN PHILADELPHIA] DOES NOT MAKE IT CONDUCIVE TO ATTRACTING NEW BUSINESSES.’ —BILL GLAZER, PRESIDENT AND CEO OF KEYSTONE PROPERTY GROUP
In November 2002, the Philadelphia Tax Reform Commission was established with the votes of nearly 170,000 Philadelphians who liked the idea of a commission that would “recommend methods to reduce the taxes of residents, workers, and business.” Ten years ago this month, the Commission released its report containing recommendations for “fundamental” tax reform to be carried out over a ten year period. At a high level, the commissioners found that the City of Philadelphia taxes what other cities do not, Philadelphia’s taxes are too high and they are unfairly imposed. “We have also found that Philadelphia compounds the problem of a high overall tax burden by relying too heavily on wage and business taxes, the taxes that are most likely to drive residents, businesses, and jobs from the city,” wrote Commission chairs Edward A. Schwartz, Raymond Jones and Al Taubenberger in the report’s cover letter, dated Nov. 15, 2003. The City’s high wage and business tax rates damaged Philadelphia’s economy over the three decades preceding the 2003 report, according to the cover letter. These damages impacted Philadelphia’s tax revenue and the ability of the City and its School District to finance citizen services. The Commission concluded that Philadelphia’s tax system was broken and in need of fixing. “It didn’t break overnight and it can’t be fixed overnight,” wrote Mr. Schwartz, Mr. Jones and Mr. Taubenberger.
Proposed Reforms
Chief among the Commission’s recommendations
for reform were the following: Revise the real estate assessment process. In order to reduce taxes for most residents while removing an obstacle to economic development, the Tax Reform Commission suggested adopting a land-value taxation system. The Commission also proposed establishing a Taxpayers’ Advocate to represent property owners in assessment appeals. Implement a budget-based real estate tax system. The Commission’s appeal: “ensure that the City collects only the taxes it needs to provide valuable and essential services to residents.” Revamp, then eliminate the Business Privilege Tax. This tax is levied against a business’ gross receipts and net income, something no other City does. While it still exists, the Commission hoped to “level the playing field between companies inside and outside the city and between incorporated and unincorporated firms, and to help startup firms manage early operating losses,” according to the report’s cover letter. Reduce the Wage, Earnings, and Net Profits Tax rates. The goal was to equalize resident and nonresident tax rates at 3.25 percent by 2014.
Implemented Changes
With the implementation of its suggested reforms, the Tax Reform Commission hoped to see Philadelphia change for the better. Their vision for Philadelphia included a vibrant economy, new employment opportunities for residents, a City government offering quality public services and a fair and simple tax structure that
makes the City an engine for economic growth in the region. While the Commission’s vision of Philadelphia still feels like a dream we haven’t quite achieved, there have been some successful reforms to previous tax legislation. Those changes include: A new entity in charge of real estate valuation. In early July 2010, the responsibility of assessing Philadelphia’s property transitioned from the Board of Revision of Taxes to the Office of Property Assessment. A new land-value tax system. With the Actual Value Initiative, property owners received new assessments that base their taxes on the full value of the property they own. AVI has its opponents who criticize Mayor Nutter for implementing this system without making it revenue neutral by reducing the millage rate, which is why property owners saw such huge tax hikes. Renamed the Business Privilege Tax. It’s now called the Business Income and Receipts Tax with a rate of 1.415 mills on gross receipts and 6.45 percent on taxable net income.
How Businesses Feel About Philadelphia’s Tax System
A lot of these problems still exist, despite steps taken toward reform. Many business owners still refer to the Business Income and Receipts Tax as the Business Privilege Tax, and consider it, along with the City’s high Wage and Net Profit taxes, to be a burden. Some of the City’s foremost businessmen have said that the tax structure is outdated. Carl Dranoff called Philadelphia’s tax structure “archaic” in a September interview with Region’s Business. “The tax structure [in Philadelphia] does not make
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Business Considerations Regarding Location The president and CEO of the Pennsylvania Business Council, Dave Patti, explores some of the different ways of doing business and what companies consider as they decide where to locate their business. When businesses make decisions about where they’re going to locate or where they’ll expand or which of their locations they’ll close, they’re going to look at the cost of doing business. Business owners will ask themselves questions such as, “What does regulation require me to do in the first place? Can I still manufacture my product and sell it at a price that makes sense for me? Can I comply with that regulation and still sell at a competitive price?” Settling in a specific area might mean using certain equipment or providing protections for employees, neighbors or the environment. It might determine what kind of materials you can use or the modes of transportation for moving your products. Then they have to ask, “What’s the compliance cost itself ?” Maybe, as a business owner, I don’t have to change a single way I do business but I have write it all down so they can approve of the way I do business. And maybe I have to record it in three different ways for the city, state and federal governments. That paperwork compliance can be costly. It can be particularly costly when it is similar to but not the same as other governments.
it conducive to attracting new businesses,” said Bill Glazer, president and CEO of Keystone Property Group. Mr. Dranoff noted that Philadelphia relies on heavy taxation of things that are mobile, such as jobs, instead of properly taxing permanent fixtures, such as real estate. Bob Moul, CEO of Artisan Mobile, also noted this taxation practice in a recent interview. “Philly is kind of the reverse of most other major cities, we tax things that can move more than taxing things that can’t move, so we tax people more so than real estate property,” Mr. Moul said. “If you look at other cities, it’s the exact reverse. In New York, much more of the taxes are on real estate and property than people. If the burden is put on things that can move, you know, they move. People move out of the city.” Although owners of some of the City’s smaller startup firms emphasized the steps Philadelphia has taken to become more business friendly, as with its new Startup PHL seed fund and legislation that exempts businesses from the Business Income and Receipts Tax based on the number of jobs they create in the first two years of business, others talk about how outdated the tax system is. That’s a foundational problem that it seems the City is trying to dress up. And yet, for as much as the City’s tax system still needs reform, Philadelphia does a lot of things right. Fox Rothschild’s Michael Harrington emphasized the “tremendous and vibrant community around the startup scene.” Startup founders agree and were hesitant to say a bad word about Philadelphia. “Mostly, so far, the City has been terrific to/for us,” wrote Lucinda Duncalfe of Real Food Works in an email response. Apu Gupta, CEO and co-founder of Curalate, also said via email, “It certainly seems the Mayor and his team are making a concerted effort to foster a thriving tech startup community.” “I think the guys that are here are here because they love the vibe, they love being in the city, they love, you know, the talent and the people that are here,” Mr. Moul said. Rosella Eleanor LaFevre is a freelance writer living in Philadelphia and can be reached at Rosella.Eleanor@gmail.com.
I think it’s completely legitimate for Mayor Nutter and the City Council to want to keep workers safe, for example, but there’s already OSHA at the federal level and Pennsylvania’s Department of Labor, each with their own regulations for employee safety. If the city adds to these regulatory burdens, it doesn’t mean the workers will be any safer. And there’s the logistical problem of meeting standards set by three different governments. If I’m submitting safety paperwork, I may put in the Philadelphia form and use the same for the state and I might get a fine for not strictly following the state’s paperwork requirements. The goal is or should be to train staff one time, manage them the same way and provide the same oversight wherever my business is located. We actually do a better job protecting workers, consumers and the environment if we have one unified plan of this is how it’s always done. Businesses look for that conformity, with owners asking, “How similar is this to what we’re doing in other places?” as they consider new locations. The City of Philadelphia does have some rules that are unique to the city. Are Philadelphians better off with the City having different regulations? It’s really a matter of whether regulatory differences are based on a different set of circumstances and needs or just because, “Hey, that’s the way we do it here.” -As Told to Rosella Eleanor LaFevre
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TAXATION THROUGHOUT THE YEARS
1932
The Sterling Act is enacted, granting Philadelphia the power to tax any person, transaction, occupation, privilege, subject or personal property, so long as those items are within the City’s geographic limits and not taxed by the state or subject to a license fee.
1939
The current Wage, Earnings and Net Profit Tax (the “Wage Tax”), an annual tax on net profits intended to add to the City’s general revenue, is enacted. It was introduced to opponents as a temporary means of helping the City weather crises brought on by the Depression. With this legislation, Philadelphia became the first city in America to impose a personal income tax.
1940
In the first year the Wage Tax is collected. It accounts for 28 percent of all City and School District tax revenues. This made the tax revenues an important factor in the City’s budget process.
1947
The state’s General Assembly passed Act 481, the “Tax Anything Act,” which allowed most local jurisdictions outside of Philadelphia to possess the same taxation powers granted to the City by the Sterling Act.
1953
The Mercantile License Tax is signed into law.
1963
1994
The legislature enacts the First Class City Public Education Home Rule Act, also referred to as the “Little Sterling Act,” which authorizes City Council to grant the School District the power to tax anything the City is permitted to tax, except the wages or net income of nonresidents.
General Assembly passes legislation requiring the suburban employers of Philadelphia residents to withhold the Wage Tax and turn it over to the City, which significantly improved Philadelphia’s tax revenue.
1969
2012
The Wage Tax rate hits three percent, doubled from January 1960’s Wage Tax rate of 1.5 percent.
1971
Pennsylvania enacts the Personal Income Tax, the state’s first tax on wages. The First Class School District Liquor Sales Tax Act passes, authorizing the City to impose a dedicated 10 percent tax on retail sales of liquor to benefit the School District.
1984
The legislature permits Philadelphia to impose a privilege tax measured by net income, which previously could only be taxed by the state, with the enactment of the First Class City Business Tax Reform Act. Also, the Mercantile License Tax is terminated.
1991
Pennsylvania’s General Assembly establishes the Pennsylvania Intergovernmental Cooperation Authority (“PICA”), with oversight of the City of Philadelphia’s finances. The City must submit fiveyear financial plans to PICA each year.
Properties throughout Philadelphia are reassessed by the City’s Office of Property Assessment as part of the Actual Value Initiative.
2013
Philadelphia’s residential property owners will see their property taxes hit 60 percent under the Actual Value Initiative, up from 54 percent under the old system, according to analysis from Pew.
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27
DAVID SOLOMON:
WELCOME TO THE VODKA BUSINESS
David Solomon is having fun. “If I had known how much fun this business is, I would have done this years ago,” he told us recently. The Philly-based serial entreprenuer behind Redbox and several other ventures is now getting in the vodka business with Golia vodka, which he first tasted when visiting a business associate in Mongolia. Now Golia is the official vodka for the Philadelphia Flyers, Buffalo Sabres, Adirondack Phantoms and Syracuse Crush. We talked with Mr. Solomon about this new vodka and his journey into the vodka business. From a business standpoint, what made you look into Golia vodka? I’m probably best known for doing retail and consumer products. Probably best known for the DVD vending machine business, now called Redbox that I sold. That turned out pretty well and I see some parallels with that and the vodka, actually. When we first started talking about the vodka, there were people... who said, “God, why does the world need another vodka?” There’s so much competition out there. When we went into the DVD business, we heard a lot of the same thing. “The big box stores are going to crush you and if they don’t then video ondemand and the cable guys will kill you. If they’re not the ones to finish you off then surely Amazon and Netflix and the Internet will.” Today that business has 40,000 plus units. So, my feeling is there’s always a place in business for the mouse who’s willing to tapdance around the elephant. And I think that’s Golia in a nutshell. What is Philadelphia’s role with Golia? My company [is in Philadelphia], I’m a Philadelphian, born and raised. Basically all of marketing and sales is run out of Philadelphia. The production is in a distillery in Mongolia, so we have operations in Mongolia. We make our bottles in China, so there is some Asian operation overseeing bottle production and production of vodka and shipping and logistics and that kind of stuff. But the biggest
market is North America and that’s all centered here in Philadelphia. Golia is the official vodka of some hockey teams, including the Philadelphia Flyers. Why did you look to hockey for marketing? This is the best vodka I’ve ever had ever. We’ve won medals all over the world in competitions: Moscow, London, Brussels, San Francisco, most recently in New York. We won the New York World Wine and Sprits competition... To really enjoy a fine vodka, you have to taste it on its own. This is one you don’t need to crap up with flavors and sugars — you can enjoy it the way it was meant to be. That explains the hockey side because we’re marketing in a large part to adventurous family men, 25 to 54, who don’t yet have an ultra premium vodka to call their own — and the women who love them, of course. It’s ultra premium... but we tried to make the price accessible to everybody... to make it an affordable luxury. And we felt like hockey in many ways tied into that. It comes from a land that’s rugged and icy cold, a little more male-centric in our marketing and we felt that tied into hockey. The nice part about the arenas, where the teams play, is that it’s great exposure for the brand. You have 2.6 million people a year go through the Wells Fargo Center. The exposure from a brand perspective is tremendous.
GoliaVodka.com
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OPINION
Pennsylvania’s Bad Penny: Property Tax Reform
G. Terry Madonna is director of the Center for Politics and Public Affairs at Franklin and Marshall College
Michael Young is managing partner of Michael Young Strategic Research
CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.
It’s baack! Indeed, it never went away. The “it” here is Pennsylvania’s perpetual debate over property tax reform, a debate in modern times that traces to the early 1970s. Further back, we have been arguing about the property tax since the 19th century. It’s a bad penny that seems to keep turning up. One current version of tax reform sponsored by Rep. Seth Grove (R-York) recently passed the state House. It provides school districts the option of replacing some or all of their property taxes with three other taxes, including the earned income tax, and two business taxes. That bill was sent to the Senate for concurrence and then the fun began. Once in the Senate we learn that Senate Majority Leader Dominic Pileggi prefers a different version of tax reform. Pileggi’s proposal would freeze property taxes for seniors; paying for the freeze with offsetting revenues from allowing Keno in state casinos. Game on. For 40 years now the Pennsylvania legislature has struggled to reach consensus on a way to provide property tax relief while funding schools. In 1989 it did actually agree on a plan, one that would have replaced partially the property tax with hikes from sales and income taxes. Voters promptly rejected that proposal in a statewide referendum, three to one. The memory of that debacle offers a vivid lesson in why statewide tax reform has been difficult to achieve. Later in 2006, school districts were authorized to hold local referenda asking voters to substitute earned income or personal income taxes for reduced property taxes. In subsequent referenda across the state, however, voters have routinely turned down this option. Now in 2013 the issue emerges yet again: steady rate increases over many years have put enormous pressure on ordinary property owners, many on fixed incomes, who pay the tax — as well as on Pennsylvania’s 500 school districts who depend upon it. Property owners and school districts are not the only critics of the tax. Economists, policy makers and most scholars also condemn it — labeling it regressive, hard to administer fairly, economically unstable and politically unpopular. Pennsylvania’s property tax paradox poses a genuine mystery: If voters hate the property tax, politicians’ rail against it and policy makers criticize it, why is this tax we love to hate still in place, in fact raising
more and more revenue year after year? The short answer is that our legislators haven’t figured out how to abolish or substantially reduce the tax while still funding the schools The long answer is more complicated. Fundamentally no one yet has resolved how simultaneously to solve three vexing problems — problems that left unsolved, preclude meaningful tax reform:
Sustaining Local Government Viability
The property tax is the largest source of revenue available to school districts and local governments. Consequently, if it is reduced or abolished, lost property tax revenues must be replaced. If wholly replaced by state taxes, school districts and local governments would become mere administrative units of state government, shorn of meaningful power or decision making. A government without its own sources of revenue ceases to be a government at all.
Money, Money and More Money
If property taxes were abolished, it would take an estimated 11.5 billion dollars annually to replace the lost revenues. Raising that amount of money would likely mean huge increases in income and state sales taxes. One estimate projects the state income tax might be raised from 3.07 percent to 4.34 percent, the state sales tax would be raised from 6 percent to 7 percent. Hence the property tax conundrum: how to raise the billions necessary in new revenues to replace lost property tax revenues — but do it in a way acceptable to voters, without harming the economy or reducing local governments and school districts to sheer sycophantic status.
Sorting out the Winners and the Losers
Just as there “ain’t no” free lunch, there also isn’t any way to reform the property tax without producing both winners and losers. Under any proposal to reduce or abolish the property tax, some would pay less and others would pay more. Everyone of course wants to be among those who pay less, while
no one wants to be among those who pay more. The inevitable consequence is a deepening political schism among voters amid arguments about tax fairness and unfairness. Daunting as these dilemmas are, there are reasons to think real reform might be possible. Increasingly, ordinary Pennsylvanians are having a harder time keeping up with their property tax bills, putting growing pressure on them and on their elected representatives in Harrisburg who hear from them early and often. At the same time, more and more policymakers and educators realize the traditional property tax base has reached its limit to finance schools. Somehow, public schools of the 21st century must be financed mostly by broad based state taxes or fees. Driving both of these trends is the rapidly spreading sense among Pennsylvanians that it’s no longer just a “good” idea to reform the property tax. Instead, it has become urgent that we do so. Colossal catastrophes potentially threaten both local government and public education if we fail. Mr. Madonna and Mr. Young encourage responses to the column and can be reached, respectively, at terry.madonna@ fandm.edu and drmikelyoung@comcast. net. To submit a response to this column for Region’s Business, please email feedback@ regionsbusiness.com
14 NOVEMBER 2013
REGIONSBUSINESS.COM
OPINION COMMENTARY AROUND THE WEB
Time For Obama To Take His Lumps On Healthcare Deception President Barack Obama deserves forbearance on the bungled rollout of his health care initiative. After all, Republicans have dedicated themselves to sabotaging the law — withholding funds required for a smooth inauguration, harassing the experts hired to explain the law to consumers, and even threatening the National Football League when Obama asked teams to advertise it to their audiences. Still, Obama deserves all the blame for the deception that may be the biggest threat to his signature legislative achievement -- and his legacy. He must have known better when he told Americans repeatedly over the past five years that they could keep their insurance policies if they were happy with them. As countless policyholders have learned over the past few weeks, that’s simply not true. Writer Peter Richmond, who has purchased his health insurance through a small group affiliated with a local Chamber of Commerce in upstate New York, was stunned to learn recently that his insurer was dropping the group. At a recent congressional hearing, Sen. Barbara Mikulski, a liberal Democrat from Maryland, weighed in, contending that the cancellation notices were creating a “crisis of confidence” about Obamacare. She’s right. Obama needs to stand up and admit that he misled consumers about keeping their health care plans. He needs to take his lumps and promise to give the public straightforward and truthful answers. If he keeps prevaricating, he will be doing as much damage to Obamacare as its harshest critics.
TWITTER REACTS
Anti-Piracy Now Being Taught In Classroom? The Motion Picture Association of America, in conjunction with the Record Industry Association of America and big Internet providers, has commissioned an elementary school curriculum to teach children the value of copyright and the evils of online piracy. As if the schools need another thing to teach. The proposed curriculum for kindergarten through sixth grade, called “Be a Creator,” is still in draft form. But a leader in the effort told a House subcommittee she hoped the curriculum would be tested in California this academic year and eventually adopted nationwide. It stresses the “importance of being creative and protecting creativity,” with topics such as “Respect the Person: Give Credit” and “Copyright Matters,” the Los Angeles Times reported. As Wired.com first reported, the curriculum is being prepared by the California School Library Association and the Internet Keep Safe Coalition in conjunction with the Center for Copyright Infringement, whose board members include executives from the MPPA, the RIAA, Verizon, Comcast and AT&T. Two observations: The motion picture industry is so influential that it can lead its own anti-piracy campaigns, and doesn’t need to take up classroom time. But if students wind up being subjected to such a curriculum, it should also stress the importance of reading the original work of reporters and editorial writers on the websites of the newspapers that employ them, rather than on the sites of content aggregators or search engines. Not that we’re being self-serving or anything — at least no more so than the MPAA.
CYNTHIA TUCKER — PENNLIVE.COM
LOS ANGELES NEWS GROUP
12 NOVEMBER 2013
12 NOVEMBER 2013
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Wynn No Longer In Philly, But Still Active Elsewhere Twitter was a flurry of activity this week after Wynn Resorts announced its decision not to pursue any developments in Philadelphia and the withdrawl of its licensing applications in the state of Pennsylvania. Discussions and rumors about a the potential construction of a Wynn property in the city have been circulating for months. In a news release, the company said Philadelphia’s market performance over the past year and the recent approval of gaming in the state of New York, among other factors, played a part in its decision to pursue opportunities outside the keystone state. The announcement drew the attention of news outlets in a variety of industries. There are now five remaining developers contending for the city’s only available casino gaming license. The Philadelphia Business Journal reports: In a separate statement released through a spokesman, Blatstein said: “I respect Mr. Wynn and his
track record of success in the gaming industry, but I never felt that he was truly invested in our marketplace.” GamingToday.com writes that dropping Pennsylvania leaves Wynn Resorts with only one pending casino license application in the state of Massachusetts. But The Press of Atlantic City reports, Wynn Interactive LLC has also applied for a license to enter New Jersey’s Internet gambling market, but that it needs a partnership with an existing casino, which it has not yet attained. William N. Thompson, a professor and gaming expert at the University of Nevada in Las Vegas, told The Boston Herald that the cancelled construction could mean more money for the Massachusetts project, “... the Philly decision should serve Everett well.” The multimillion dollar project was expected to impact the city’s economy via job creation, tourism, tax revenue and city services.
@MarcVetri I guess Wynn figured out what we already know. Putting a casino here is a big waste of time, quick fixes don’t work. 11 NOVEMBER 2013
casino. I’d like to see Provence then, or Market8. 11 NOVEMBER 2013
@philebrity Steve Wynn says “You know what? I don’t even want that casino anymore
@mikegreenle Hopefully Wynn’s exit will further temper the over-the-top rhetoric #Philly hears about casino rev/dev potential 11 NOVEMBER 2013
@iPhillyChitChat Kinda bummed about Wynn Resorts takes its hat out of the run for a
CONTENT PARTNERS
11 NOVEMBER 2013
@tferrick Everyone loves to hate Steve Wynn but he is right to spurn Philly for NY. Better deal for owners under new casino law 12 NOVEMBER 2013
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14 NOVEMBER 2013
REGIONSBUSINESS.COM
BY THE NUMBERS
4.5
Average years delay in onset of dementia symptoms in multilingual people, say the authors of a study published in the journal Neurology
648
71,000
Participants followed by Danish researchers in a study examining obesity and metabolic syndrome
Diagnosed dementia patients studied
391
Patients in the study spoke more than one language
61.1
Average age of symptom onset for monolingual patients
65.5
increase rate in heart attack risk for overweight patients without metabolic syndrome
520,000,000
1.88
49%
Number of residents who would be more likely to support an increase in state transportation funding if it results in job creation
increase in heart attack risk for overweight patients with metabolic syndrome
33%
Number of respondents who would be more likely to support the measure if half of those jobs created were in industries other than construction
2.33 40%
Percentage of citizens would be more likely to support increased spending if it would directly improve their local communities.
FLICKR.COM/CHBERGE
increase in heart attack risk for obese patients without metabolic syndrome
1.7
FLICKR.COM/ ERIC NISHIO
Increase in driving expenses the majority of Pennsylvanians would accept, according to polling data recently released by Franklin and Marshall
1.26
Average age of symptom onset for bilingual patients
Number of Americans age 65 and over estimated to suffer from dementia
$2.50
FLICKR.COM/ MARFAM
increase in heart attack risk for obese patients with metabolic syndrome
1.39 increase in heart attack risk for patients of normal weight with metabolic syndrome
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