Region's Business September 12 by Independence Media

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REGION’S BUSINESS PHILADELPHIA EDITION

A JOURNAL OF BUSINESS AND POLITICS

VISIONS

OF A WORLD-CLASS REGION Over 25 movers and shakers in the Greater Philadelphia region have written down their thoughts on what their vision of Philadelphia looks like. Challenges surely lie ahead in many sectors, but many agree — we have the tools for a world-class region.

PHILLY DEVELOPMENT IN THE NEXT TEN YEARS GE, DOW MAKE MEGA INVESTMENTS IN PA

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

CONTENTS

Visions Of A 21 World-Class Region

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Philadelphia’s 60 Development In Ten Years

5 12 16 68

Weekly Briefing ‚" ‚"

Politics Year Of The Innovator Q&A: Matt Feeney

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Fine Estates

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Commentary

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Daring Greatly: “It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” Theodore Roosevelt ‚" ‚"

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PRESIDENT AND PUBLISHER James D. McDonald ASSOCIATE EDITOR Rich Coleman CONTRIBUTORS Brandon Baker, Eric Boehm, Charlie Gerow, Don Lee, Juliana Reyes, Rosella Eleanor LaFevre, Alex Rudinski, Julia Bergman PROOFREADER Denise Gerstenfield ADVERTISING DIRECTOR Larry Smallacombe DIRECTOR OF BUSINESS DEVELOPMENT Deirdre Affel

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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 published makes no representations or warranties regarding the advertising appearing in its pages or its websites.

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12 SEPTEMBER 2013

PUBLISHER’S NOTE

REGIONSBUSINESS.COM

Perspectives On A World-Class Region

James McDonald is founder and publisher of Region’s Business. He can be reached at jmcdonald@ regionsbusiness.com.

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It’s been an exciting year for REGION’S BUSINESS. Skeptics were everywhere, but we persevered. The quote on page three seems quite fitting as we publish this issue. We stuck to our vision to create a media product providing perspective on business and public policy for senior level businesspeople and policy makers. We believe now more than ever that we can engage in dialogue on how to make this a more business friendly region. There is much to be done in the region to achieve the lofty goal of creating a better business environment. Through the eyes of some of the area’s smartest people, this issue offers insight towards this lofty goal. Over the next year we’ll continue to focus on INNOVATION, VISION and PUBLIC POLICY. We’ll provide meaningful coverage and perspective. I encourage you to let us know if there are important issues we should look at along the way. As for Philadelphia, I see some key areas of focus. Going on the premise that no idea is a bad idea here are some thoughts for the future of the region:

SCHOOLS If we don’t fix the school system, we don’t compete on a world stage for business. It’s a complex issue that goes well beyond funding and unions. Perhaps we can create a partnership between business, our acclaimed university system, community organizations and the public school system. If you put these groups together with one common purpose, I believe they can come up with priorities that will move the conversation beyond the common themes of “we need more funding” and “changes to union work rules”. Perhaps they will determine that those changes are needed as well, but if they look at it comprehensively, and they see potential for real results, perhaps, we can get public policy makers behind a successful approach.

GOVERNMENT Clearly by all metrics vs. comparative markets we have too many government employees. We need a strong leader to come forward and run the city that will restructure this archaic organization. There is a need to streamline departments, but this should be done with the clear intention that the city

must fulfill it’s promises to its’ residents on service provision. I also envision a leader who will take to task the cumbersome regulatory framework that has been built and added to in every administration. We need to look at outdated and unnecessary regulations and make it easier to do business in the city.

THE CITY Lastly, I would like to see a priority on INNOVATION ZONES. Putting our considerable capital to use here in this region, with real incentives for entrepreneurs will create jobs and stimulate economic vitality. Add to this a push to attract a strong creative economy, and we’ll retain and recruit the best and the brightest. This region has enviable assets: art, culture, entertainment, sports, visionaries, universities, access to capital and so much more. It’s time we advocated key solutions to critical problems instead of just moving the same issues to the next year or administration. It will be hard, but the benefits will create a world-class region.

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

WEEKLY BRIEFING

TRANSPORTATION

SEPTA Receives Grant For Rail Improvements SEPTA will receive a $10 million federal grant for a critical project that will improve safety and service on the West Trenton Regional Rail Line, SEPTA officials announced last week. The award will be made through the U.S. Department of Transportation’s TIGER V program, to help fund the SEPTA-CSX Separation Project. The project has a total estimated cost of approximately $38 million. This effort will separate passenger and freight rail operations along a six-mile portion of track owned by CSX between the Woodbourne and West Trenton Stations. Currently, this shared segment of track carries 57 SEPTA trains each day, serving riders on the West Trenton Line. STOCK MARKET

ARAMARK Files Statement For IPO ARAMARK, a world leader in providing food, facilities and uniform services, recently announced that ARAMARK Holdings Corporation has filed a registration statement with the U.S. Securities and Exchange Commission (SEC) for a proposed initial public offering of its common stock. The number of shares to be offered and the price range for the proposed offering have not yet been determined. The company intends to use the net proceeds from the offering to repay debt. ENTERTAINMENT

Comcast Exec To Head Universal Jeff Shell, a former Comcast Corp. programming executive in Philadelphia, will head the Universal film studio, the Inquirer reports. Mr. Shell is the latest top executive installed by Steve Burke, the CEO of NBCUniversal and a confidant of Comcast chief executive Brian Roberts. Shell headed entertainment programming at Comcast before the it acquired NBCUniversal.

GE and Dow Make Mega Investments In Pennsylvania BY ELISE VIDER Two global giants – GE and Dow – have made significant investments in Pennsylvania, with major physical expansions, retaining and possibly creating new jobs. Dow opened its new, 800,000-squarefoot Northeast Technology Center in Collegeville last month. By the end of next year, about 800 employees and contractors, most transferred from Dow’s Spring House location, will work at what will be one of Dow’s three largest R&D campuses. The facility has room for growth and can accommodate up to 1,300, says Dow spokesman Justin M. Land. Dow has a large presence in the Delaware Valley with about 2,000 employees and four of its 13 global businesses headquartered in the region. “The NTC will play a pivotal role as an innovation hub for many businesses in Dow’s Advanced Materials portfolio – a business unit headquartered in Philadelphia, which brings differentiated solutions to customers in key end-markets including electronics, consumer and lifestyle, infra-

structure and transportation and energy,” Dow said in a statement. Nearly 500 miles away, in Lewistown, GE has opened a $10 million, 52,000-square-foot Customer Solutions Center “to meet the growing demand for industrial and infrastructure inspection technology solutions worldwide.” The center, which opened in June, is the North American hub for GE’s Inspection Academy, which trains GE employees and customers in non-destructive testing (NDT). Critical in supporting safe operation and quality control, NDT enables the detection and evaluation of flaws in materials or structural properties, without producing harmful effects on the subjects being tested. Jill Queenan, a GE spokeswoman, says the company does not disclose its hiring numbers, but that “GE has already significantly grown its workforce in Lewistown [currently above 250] to better support the world’s growing need for non-destructive testing solutions.” This article was originally published on KeystoneEdge.com.

Atlantic City Casino Revenue Down 5 Percent In August Though the Borgata, Revel and Resorts Casino all reported gains in casino revenue, the overall number is down five percent, the Press of Atlantic City reports. Altogether, Atlantic City’s casino industry posted $298.1 million in total slot and table games revenue in August, a 5 percent decline compared to $313.2 million a year ago, according to figures released Tuesday by the New Jersey Division of Gaming Enforcement. Slot winnings fell 3 percent, to $219.5 million, while table game revenue declined nearly 11 percent, to $78.6 million. For the first eight months of 2013, Atlantic City’s 12 casino hotels have posted nearly $2 billion in gambling revenue, down 9 percent from the same period last year. However, the local economy is showing some strength in other areas. At the Atlantic City Convention Center, attendance rose 138 percent in August, to nearly 3,500 delegates.

EDUCATION

State Auditors Warned Of School District Problems In ‘87 State auditors warned of financial accountability problems at the Philadelphia School District in periodic audits since at least 1987, foreshadowing some of the issues that underpin the crisis in the district as it opens its doors to students Monday. The district is running a $300 million deficit this year and was only able to ensure it would open its doors on time thanks to an emergency loan secured by the city of Philadelphia in August. The district is receiving more than $1.3 billion in state and federal aid this year. But the district has had problems tracking students, accounting for state dollars and keeping accurate finances for much of the past two decades, according to audits conducted by the state auditor general’s office. The auditor general is required to audit all 500 school districts in Pennsylvania at least once every four years. “The district was unable to provide us with the documentation necessary to verify that it correctly reported its membership and attendance data to the Department of Education,” wrote auditors in the most recent review of the Philadelphia School District, which took place in 2011. “A district’s failure to accurately maintain and report this data calls into question the legitimacy and appropriateness of the bulk of its state taxpayer funding.” PA INDEPENDENT

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

WEEKLY BREIFING EXECUTIVE BOOKSHELF

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RESTAURANT ROUNDUP

MUST-HAVE APP

Any.DO While there are an assortment of “to-do” apps for iPhone that aim to help you stay productive and on top of your schedule, there’s one that really stands above the rest. Any.DO is a free app and features a simple interface that makes it easy to add tasks. In fact, this is where the app excels — in its simplicity. You can enter new tasks with the sound of your voice, share tasks with others, sync your to-do list to the cloud (helpful if you also have an Android device), set task deadlines and reminders and quickly pospone tasks with a few simple taps. For those with both iOS and Android devices, Any.DO is our go-to “to-do” app.

Doing what counts for your business.

Kevin Sbraga Opening 2nd Restaurant This fall will see the opening of Kevin Sbraga’s second restaurant: The Fat Ham. Mr. Sbraga is the chef-owner of Sbraga on the Avenue of the Arts and a past winner of Top Chef. The new Southern cuisine restaurant will be coming to University City and will be replacing the Tria Wine Room at 3131 Walnut Street. Foobooz reports that Mr. Sbraga was inspired to open a Southern cuisine restaurant in Philadelphia after the reception his country fried lobster received at his eponymous restaurant.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

WEEKLY BRIEFING

JOBS

DEVELOPMENT

Waterfront Eyed For Trade Center Waterfront Renaissance Associates that had planned to build a World Trade Center in Philadelphia is now looking at the former prison site on Camden’s waterfront as a possible location, according to a statement. WRA said Monday it is in talks with state and local officials to determine the feasibility for developing the site. WRA is the developer of the residential towers directly across the river, north of the Benjamin Franklin Bridge. “The preliminary project design includes 2.3 million square feet of space, consisting of four stand-alone phases which is planned to be built in accordance with a design and marketing plan to create sub-campuses which create a feel of small commercial neighborhoods,” the firm said in a statement. Potential tenants include companies involved in international trade and private sector technology development. SPORTS

Eagles Game Was Highest-Watched In Eight Years

Philly.com reports that the Philadelphia Eagles Monday night season opener was the highest-rated Monday Night Football opener in the eight years that it’s been on ESPN. The game was watched by 17 million viewers . It was even more prevalent in Philadelphia and Washington, D.C. Variety.com reports that in Philadelphia, the game delivered an 11.0 rating on ESPN and a 24.1 rating on ABC station WPVI, for a combined 35.1 rating in the market.

5-Story Project Proposed To Replace Parking Lot On Washington Avenue

PHILADELPHIA REAL ESTATE BLOG

BY ALEX RUDINSKI Plans for the lot were presented at last month’s meeting of the South of South Neighborhood Association (SOSNA) Zoning Committee, where attorney David Orphanides unveiled plans for a five-story mixed-use structure, roughly 60 feet in height, with about 40 residential units and 3700 square feet of commercial space on the first floor. According to the presentation, if development proceeds as planned, the use will be almost identical to that of a CMX-2 building – just taller, and with a parking lot. The only snag is that, despite the flexibility of the I-2 designation, the one thing is doesn’t allow is residential properties. This means that, while there is very little restriction on the size of the structure, any residential use of the property would require a variance, giving the Zoning Committee and the Zoning Board of Adjustment a sort of veto power over the project. However, when presented with the plans, SOSNA’s Zoning Committee was very positive about the building. While the presentation that Mr. Orphanides gave was purely informational, the committee seemed pleased with the designs, noting that the scale was appropriate for the location and that the building would be providing muchneeded commercial space along the avenue. When asked about potential occupants for the ground-level space, Mr. Orphanides assured the committee that, while the developers have not talked to any particular retailer, they have ruled out certain undesirable occupants: tattoo parlors, fortune tellers, gun shops and the like. Though the planned development might seem massive, the scale of this project is actually well within existing expectations for Washington Avenue. Just one block to the east is a six-story apartment complex adjacent to the five-story Marine Club condos, and across Broad Street there’s the massive U-Haul self-storage building and a fivestory residential building at 11th and Washington. Indeed, if there is any place for a brand-new five-story mixed-use building, it’s probably along Washington Avenue. As plans currently stand, the residential units will measure 780 square feet on average, with most configured as

one-bedroom apartments. The top floor will hold several penthouse units sized at 1550 square feet with access to a roof deck, and the north and south sides of the building will be lined with balconies on all floors. The structure would provide 20 parking spaces, with two reserved for handicapped spots and the remaining 18 available to residents. Of course, this comes at the cost of obliterating around 150 semi-legitimate parking spots. These spots are vital on the weekends, when the Asian mini-mall draws hundreds to the corner and other parking fills up fast. Residents at the meeting expressed concern that those visitors would be forced to find parking elsewhere, clogging up the alreadybacklogged streets with more cars and proving to be even more of a nuisance then they already are. Once this point was raised, several residents stepped forward with complaints about the mini-mall. One man, whose Chadwick Street home’s backyard directly abuts the supermarket, complained of the noise from the “very active” mini-mall, especially on weekends, saying “who’s there now is not a good neighbor – the lot is filthy, dirty.” The lot has dozens of violations going back years, many for failing to keep the lot in good repair by cleaning up trash and pulling weeds. Right now, the lot is in an acceptable condition, but that doesn’t say much about those who occupy it. However, this point may soon be moot. SOSNA is set to hear plans for 1600 Carpenter Street next month, which houses not only the Big 8 supermarket and adjoining mini-mall, but the rest of the warehouse complex between Washington and Carpenter. In fact, huge lot spans the whole of the block between Washington and Carpenter, wrapping around 1601 Washington and giving the lot its unusual shape. 1600 Carpenter Street has the same zoning as 1601 Washington – I-2 – so there’s little hint of what’s to come. Considering this, SOSNA asked residents to hold their commentary until next month, when they’ll have a chance to comment on a specific proposal. This article originally appeared on the Philadelphia Real Estate Blog at blog.PhiladelphiaRealEstate.com.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

WEEKLY BRIEFING

CAPITAL

Conshohocken Firm Receives Over $13M To Increase Expansion Conshohocken-based NextDocs, a provider of regulated content management and compliance solutions, announced this week that it has received a $13.5 million round of investments and funding commitments. The funding round was led by OpenView Venture Partners with participation by Eastward Capital and Bridgebank Capital. “Since its inception, NextDocs has primarily funded its operations and growth through revenue generation,” said Zikria Syed, Chief Executive Officer of NextDocs. “These additional equity investments and funding commitments will allow us to escalate the investment in our solutions, services and global organization — positioning the company to capture even greater market share.”

Independence Mission School Going High-Tech In Germantown Germantown’s DePaul School will be beginning an experiment that combines classroom experience with computers in a new way that, if successful, holds a great deal of promise for Catholic education. DePaul, a K-to-8 school on Logan Street, was once part of the St. Vincent DePaul parish. Now, it is one of 13 Independence Mission Schools in Philadelphia that serve mostly non-Catholic students in poor neighborhoods. DePaul is the only one involved in this project, which is funded by a $500,000 grant from the Philadelphia School Partnership. It is called the Phaedrus Initiative by Seton Education Partners, the New York-based non-profit that developed the program. To start, computers will be placed in kindergarten through second-grade classrooms at DePaul this year, expanded to fifth grade next year and to eighth grade in 2016. The computers will be used primarily for Math and English courses with 15 per class for K-through-5 and 30 per class for sixth through eighth grades. “So whether the students are struggling and maybe need

more support or middle of the road and need some more coaching and attention or at the top and need more of a challenge we’re finding that students needs are just being met,” said Betsy Rafferty, local manager of the Phaedrus Initiative. This story was originally published on Axis Philly at AxisPhilly.org. Written by Julia Bergman.

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12 SEPTEMBER 2013

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

Constitution Week Marks Time To Reflect

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.

As this issue takes a look forward through the eyes of the region’s leaders, it’s a good time to take a look back as well. This is Constitution week; the time when we celebrate the anniversary of the document written here in Philadelphia. In the summer of 1787, 55 men braved sweltering heat to produce what William Galdstone called “the most remarkable work known to me in modern times to have been produced by the human intellect...” Now, 226 years later, our Constitution stands as the longest lasting written constitution in the world. Often referred to as “The Miracle of Philadelphia,” it has been lauded throughout history. Lord Bryce declared “The United States Constitution ... ranks above every other written constitution for the intrinsic excellence of its scheme, its adaptation to the circumstances of the people, its simplicity and precision of language.” The delegates who came to our town in the summer of 1787 were not the “demigods” that Thomas Jefferson called them. They were mere mortals. They were merchants and farmers, lawyers and ministers. They were young and old (our beloved Benjamin Franklin was over 80). For four long months they labored, debated

and compromised. Compromise was the classic feature of their deliberations. The Great Compromise (or Connecticut Compromise) on the issue of representation became the foundation of our federal system. Of all the remarkable features of our Constitution, it’s fashioning in the mold of the Declaration of Independence stands apart. For the first time people declared and codified that our rights come from God, not some temporal power, and that we, in turn, grant to government certain powers to protect those rights. Chief among those rights is liberty. The protection of our liberty and freedom through the Constitution is the envy of the world. Free people through free markets have produced the greatest standard of living and quality of life in the history of civilization. Those freedoms also allow us to be the most generous. The nanny state doesn’t work as well. When our City is confronted with debate over soft drink taxes and other well intended (or at least feel good) but misguided notions the principles of liberty and individual freedom and responsibility should prevail. Liberty is the pathway to progress and a better way of life for all. Likewise when excessive taxation and regulation threaten to choke the life (and jobs) out of the free enter-

prise system, reflection on liberty will overcome any temptation to travel down the collectivist path. Pennsylvania’s motto “Virtue, Liberty and Independence” incorporates an element underlying the framers thinking: that public virtue is essential to the proper function of government. Without such virtue the economy and the social fabric suffer. The “pay to play” culture which marked our city for too many years caused many prospective employers to look and move elsewhere. They didn’t want to pay the price for being part of that mess. Mayor Nutter has done a lot to move us away from that mentality, but there’s still a lot to be done. This week — Constitution Week — is a great time for us to rededicate ourselves to doing those things. To read, ponder and remember the Constitution is not just a good idea. It’s an obligation to ourselves, our children and generation yet to come. It’s for the founders who risked their lives, fortunes and sacred honor for our freedom and those brave men and women who have fought to defend it. It’s also the best guide for our future.

Continuing a Legacy of Entrepreneurship

Please Join Us for a Leadership Transitions Seminar Continuing a Legacy of Entrepreneurship

Succession is often described as a leader’s “final test of greatness.” Yet, managing a successful leadership transition remains one of the most difficult management tasks that companies face. From the largest publicly traded companies (Home Depot and AT&T) to the smallest corner store, organizations and families struggle to execute a smooth leadership succession. Join us for interactive dialogue about specific strategies and structures you can employ to ensure a competitive leadership succession. Our diverse panel of experts will share their opinions and experiences in preparing their employees, customers, successors, and themselves for transitioning leadership of their organizations.

September 25th, 2013 The Wolfington Teletorium at Haub School of Business Corner of 54th Street and City Ave

Panelists

For more information contact:

Carolyn Greenspon

Tom Clemens

Christin McClave

5th generation owner of New York Times

4th generation owner of Hatfield Quality Meats

3rd generation owner of Cardone Industries

Participants Will Learn : t

Critical processes and best practices of successful leadership transitions

Accountability structures that can guide a difficult succession decision

Tools for developing the successor generation of leaders

The important distinctions between a management transition plan and an ownership transition plan

Michael N. Mcgrann, Director

Please RSVP Scan this QR code with your smartphone to RSVP

mmcgrann@sju.edu (610) 660. 2248 Saint Joseph’s University Initiative for Family Business & Entrepreneurship 5600 City Ave Philadelphia, PA 19131

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Dear Visi onaries, Iâ&#x20AC;&#x2122;d say your vision is 20/20.

P.S. Iâ&#x20AC;&#x2122;m lucky to be in such great company.

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12 SEPTEMBER 2013

POLITICS AND BUSINESS

REGIONSBUSINESS.COM

Ex-PCLB CEO Made $67K As A 6-Month Consultant BY ERIC BOEHM HARRISBURG – The former CEO of the Pennsylvania Liquor Control Board was paid more than $67,000 during his six-month stint as a consultant for the board, while also collecting a state pension. Joe Conti, who served as CEO of the PLCB for six years before retiring in January, returned to the board in February as a consultant making more than $80 per hour. Because of a loophole in state law, he was also able to begin collecting his state pension — which totals more than $60,000 annually — while working part-time for the board. According to payroll records and expense reimbursements obtained via the state’s open records law, Conti was paid $67,728 for 845 hours of work between Feb. 2 and Aug. 2, when Conti left the part-time consulting gig. He worked an average of 35 hours per week during the six-month period, earning an average of $2,821 per week. He was also reimbursed for expenses totaling more than $1,600 during his time as a PLCB consultant. Those expenses included several lunches and mileage for businesses trips from Harrisburg. The PLCB also picked up the tab for Conti’s iPhone, which cost about $108 per month. “Joe assisted the board in preparing for the budget appropriation hearings that were held earlier this year

and the legislative hearings that were held in the spring,” said PLCB spokeswoman Stacy Kriedeman. Under the terms of the state law that allows retired state workers to collect pensions while doing contract work for a government agency, such an arrangement is only supposed to be for “emergency” purposes. Conti’s short-term arrangement was legally approved the Office of Administration, which is overseen by the Corbett administration. Barry Kauffman, executive director of Common Cause Pennsylvania, which advocates for open and transparent government, said Conti is not the first high-ranking state employee to take advantage of that state law. But that “deceptive process” should come to an end, he said. “That certainly does not serve the public interest from either a financial or a policy perspective,” Kauffman said. Dawn Meling, director of community relations for the Commonwealth Foundation, a free market think tank in Harrisburg that favors privatization, said Conti’s pay-plus-pension arrangement was ridiculous. “It just shows another of the countless ways that the PLCB is wasting our public dollars,” she said. “And taxpayers should be asking: what was the PLCB’s ‘emergency’ anyways?” Conti’s term as an emergency consultant for the board also coincided with the latest effort to privatize Penn-

sylvania’s state-owned liquor system. The state House passed a bill in March to sell off the wholesale and retail systems, but the bill is still sitting in the state Senate. Conti was an outspoken critic of privatization. He was not directly involved in lobbying against the privatization effort this spring, though he was apparently involving in helping the agency prepare for the hearings, which examined the pros and cons of privatization. As CEO of the PLCB, Conti made a salary of more than $150,000. The position of CEO didn’t exist before he was appointed to it in 2006 by then-Gov. Ed Rendell. After Conti retired in January, Gov. Tom Corbett announced he would not be filling the vacant position. Even so, part of Conti’s job description during his sixmonth tenure as a consultant was to help run the day-today activities of the PLCB while the board searched for a new CEO, according to Kriedeman. Steve Miskin, spokesman for House Majority Leader Mike Turzai, R-Allegheny, said he agreed with Corbett’s decision to leave the position vacant and pointed to some of the questionable decisions made by the PLCB during Conti’s tenure. “Whenever public dollars are being spent, those in charge need to be very self-critical of the value, the need and the justification,” Miskin said. This article was originally published on PA Independent at PAIndependent.com.

12 SEPTEMBER 2013

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

Democratic Messaging On Education Is Paying Off

Eric Boehm is bureau chief for PA Independent, a project of the Franklin Center for Government and Public Integrity

CONTRIBUTE

in the state — Corbett cut funding for basic education by $1 billion in his first two budgets and is solely responsible for school funding crises unfolding in Philadelphia and elsewhere around Pennsylvania. There hardly has been a Democratic representative, senator or candidate who has not repeated some version of those words during the past two years. Even at press conferences that have nothing to do with education or the state budget, Democrats repeatedly have found a way to work that messaging into their collective trains of thought. And to their credit, it seems to be working. Like most talking points, this one contains a partial truth. Overall spending for education did decline during Corbett’s first budget — though not by $1 billion. The real cuts in state spending for education took place during the 2009-10 and 2010-11 budgets, the last two that were overseen by former Gov. Ed Rendell. Those declines in state spending were masked by the federal stimulus. But when Corbett took office in 2011 and the stimulus dried up, he was left with a major funding cliff. For most of the first two years that Demo-

t’s

Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

HARRISBURG – A new poll shows Gov. Tom Corbett’s approval ratings falling to new lows. But last week’s poll showed something else that should concern Corbett and his supporters even more. It showed that the Democrats’ multi-year messaging effort is paying dividends. In addition to gathering approval ratings for the governor, the state’s U.S. senators and other high-profile elected officials, the poll, conducted by Franklin and Marshall College, asks respondents to name the issue they think is most important to the state right now. Since 2005, the top answer has been either “the economy” or “unemployment and personal finances.” But the most recent poll, which surveyed 594 Pennsylvanians during the last week of August with a margin of error of 4 percent, found a significant change. For the first time, a plurality of respondents (23 percent) named “education and schools” as their top concern. That’s not an accident. The state’s Democratic messaging machine has been hard at work for the past two years to drive home a single talking point to all voters

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crats were spinning this narrative about school funding cuts, Corbett’s team did virtually nothing to counter it. They did not question the Democrats’ numbers, they did not push back with their own version of the story and they did not debate the facts. Now that narrative has had two years to solidify. And voters are not digging through the state budget to check the validity of every sound bite they hear on the news. If 23 percent of Pennsylvania voters surveyed say education is their top concern, they will probably like what they hear from Democratic gubernatorial hopefuls in the next 14 months. Each of them will pick up the narrative that the state party has spent the past two years laying down. But then, there is a second way to look at last week’s poll. If you’re one of Corbett’s supporters, it looks like this: Fewer people are worried about the “jobs” issues of unemployment and the economy. After all, his entire first term has been based around the idea that he would keep taxes from increasing and lure jobs to the state. That will be his message in the campaign next year, for sure. But he’s got two years of catching up to do.

12 SEPTEMBER 2013

2013: YEAR OF THE INNOVATOR

DIARY OF A STARTUP

VenturePact On Track For Next Step

REGIONSBUSINESS.COM

For Students Displaced By Closings, City, SEPTA Launch Apps For Safe Routes

Drexel Merges Programs For New School Drexel University will merge three programs to create its new College of Computing and Informatics. The college aims to be a hub for fields like big data, cybersecurity and software development. It will begin enrolling students in Fall 2014, according to a release.

Randy Rayess of VenturePact explains the software-development-focused company’s next step as it ushers in both fall and an all-new round of startups for their portfolio.

In his words: We, at VenturePact, started by focusing on developing hacks and minimal viable products for early-stage startups. After launching their products, we helped our startups raise money and hire their own technology team. Since our portfolio companies had established a strong relationship with our team through the development of their first product, they wanted to have our developers work alongside their existing technology team moving forward. We are now offering select seeded and Series A startups the ability to work with our team on a monthly agreement per developer. The goal is to help startups focus on the business side and not spend too much time hiring large teams of developers, which is time-consuming and expensive. To spearhead this offering, we brought on board Firefly, a co-browsing software funded by Dorm Room Fund and founded by Dan Shipper and Justin Meltzer. We are excited to work with such great talent and help grow Firefly, which is already deployed by around 6,000 companies, and has partnered with YC-backed Olark. We are looking to continue to accept a few seeded and Series A companies in our next round. Applications are available on VenturePact.com and will close on Sept. 20. We are accepting applications from new entrepreneurs to build their MVPs and from seeded and Series A startups to help them enhance their existing teams and products.

EDUCATION

Sharon Poindexter, a WalkSafePHL volunteer, took part in a volunteer training session. Photo by Nathaniel Hamilton for Newsworks. TECHNICALLY PHLLY

BY JULIANA REYES In response to safety concerns, SEPTA and the City of Philadelphia both launched route planning tools aimed at helping the roughly 9,000 students displaced by 24 school closures get to school . SEPTA’s tool, School Trip Planner, emulates its SEPTA Trip Planner by providing routes to schools based on type of transportation, price and time of day. The City of Philadelphia’s program, WalkSafePHL, maps walking routes to 23 schools. The routes were planned using crime and school district data, Newsworks reported. Each of these routes, the city said, will be staffed by 260 volunteers, though Axis Philly reported yesterday that volunteer presence did not appear to be consistent around the city. The maps have received some criticism, as Newsworks reported, for not being as comprehensive as some parents had hoped, though Anthony Murphy, the city’s Town Watch Integrated Services executive director who coordinated WalkSafePHL, told Newsworks: “I’m confident that we’ll provide the high level of support and safety that’s needed.” Hackers at education hackathon TechCamp Philadelphia zeroed in on this problem last February, building SafestWay, an app that used crime data to map the safest routes to a school. The app is not currently live. This article was originally published on Technically Philly at Technical.ly/Philly.

PennApps’ Success Continues in 2013 BY JULIANA REYES Swap, a real-time iOS app editor, won the $10,000 grand prize at PennApps Fall 2013, the largest college hackathon ever, organizers say — at least until PennApps Spring 2014. The Penn student-run hackathon, where developers spend a weekend building software and hardware, continues to outdo itself. It more than doubled in size from its spring iteration, going from about 500 hackers to more than 1,000 this year. Hackers came from as far as Switzerland, Singapore, Hong Kong and Israel. The grand prize grew this year, too, from $4,000 last spring to $10,000 this fall. It was the second time that PennApps held an application process for non-Penn students who wanted to participate in the hackathon, said organizer Pulak Mittal. More than five hundred nonPenn students, including those from Stanford, Georgia Tech, Penn State and UCLA, were chosen out of more than 1,600 applicants. This article was originally published on Technically Philly at Technical.ly/Philly.

The creation of the school is the latest in a number of efforts on Drexel’s part to emphasize technology and entrepreneurship. These efforts include: — The opening of the $12.5 million Close School of Entrepreneurship. — The launch of Drexel Ventures, a seed fund and business incubator with a goal to fight brain drain. — The launch of the ExCITe Center, a music and technology research lab.

Moore College Launches Game Design Moore College of Art, the country’s only visual arts school for women, will launch a new major this fall for women who want to pursue careers in animation and game and mobile design. Moore, based in Center City, said the new major, called Interactive and Motion Arts, is in response to the fact that women are underrepresented in the gaming industry. TECHNICALLY PHILLY

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AWA R DS November 14, 2013 Is your company a catalyst for change? Have you pushed the boundaries in your industry? Is your innovation helping to boost Philadelphia’s growing economy? Marcum LLP and Region’s Business are in search of Greater Philadelphia’s top innovators, and we want to hear from you. The Inaugural Marcum Innovator of the Year Awards will honor businesses of all sizes that are pioneering new advancements in the fields of Health/Biotech, Technology, Business Management, and Energy. Three winners will be named in each category, based on company size. Tell us about your break-through innovation and what makes your company a leader in our region by visiting our website – www.marcumllp.com/innovator. Submissions must be received by September 15, 2013. Winners will be announced at a Gala Awards Ceremony at the Franklin Institute on November 14, 2013. Don’t miss out on this spectacular opportunity to join our region’s business leaders in recognizing and celebrating the spirit of innovation in and around Philadelphia. For complete details including nomination criteria, please call Jacki Hallinan at 484.270.2715. Ben Franklin may have been Philadelphia’s first and most celebrated innovator, but he did not have a corner on the market. Who knows? You could be Philadelphia’s next Innovator of the Year! For tickets to the event, please call 610-572-7112 ext 102. If you are interested in sponsoring this event, please call Deirdre Affel at 610-572-7136. Marcum LLP is a top national accounting and advisory services firm.

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

2013: YEAR OF THE INNOVATOR

Slate Setting Its Sights On Educational Tools Company: Slate Founders: Christian Kunkel, Chris Alfano, John Fazio Contact: christian@jarv.us

BY BRANDON BAKER Today’s educational tools are hardly the same as those of Mom and Dad: Google Docs, Dropbox, PowerPoint – the list is nearly endless. Realizing this, Chris Lehmann, principal of Science Leadership Academy, approached founder of clouddevelopment company Jarvus Innovations (and then consultant for the Academy) Chris Alfano, about developing educational “tools that don’t really exist,” with the bigger key being to combine them with other tools that are great – Google Docs, Moodle, etc. To bring Mr. Lehmann’s musings into fruition, Jarvus created a spin-off company: Slate. “The first stage, for us, is giving schools control and access over their own software and data,” said Christian Kunkel, director of education technology and co-founder of Slate. By this, he means to aggregate the everyday tools schools already employ into an easy-toaccess layout.

Think: Blackboard Learn, only even more stream- well as allow nonprofit organizations to prevent their data from being accessed and sold to for-profit comlined. “For most schools, that’s just a hugely valuable thing,” panies. Mr. Kunkel aims to launch with new schools as the 2013-14 school year kicks into high gear, with a bigpicture goal of not just aggregating existing education technology tools, but developing their own – to meet WE’RE TRYING TO OPEN UP THE the benchmark of creating those “tools that don’t really POSSIBILITIES OF ACCESS FOR exist” Mr. Lehmann first inquired about. SCHOOLS, GIVEN THE WEALTH OF “If students are going to go out and solve real-world problems, they need to be literate with technology, INNOVATION THAT’S HAPPENING.’ and be experienced in these real-world technologies – —CHRISTIAN KUNKEL Google Docs, for example, is an incredible collaboration tool people in the real world use every day,” Mr. Kunkel Mr. Kunkel said. “They might have an attendance said. “There’s no reason students shouldn’t know how tracker and all of these other record-tracking tools, but to use that.” Slate has been bootstrapped to this point, largely they have to log in separately to all of them.” Slate’s three co-founders have developed their single- using the resources and “development muscle” of Jarsign-on software as open-source. Thus far, it’s been vus, but will seek funding in the fall to better establish implemented in three area schools – including Science itself as its own brand. Leadership Academy, which it launched with four years “We’re trying to open up the possibilities of access for ago. Part of the appeal of their software solution, Mr. schools, given the wealth of innovation that’s happening Kunkel said, is that schools are able to easily and afford- in education technology right now,” Mr. Kunkel said. “If ably update their software – as opposed to restrictive we can give schools more control and more access, that long-term contracts with “wholesale” developers – as alone is a major step up.”

12 SEPTEMBER 2013

2013: YEAR OF THE INNOVATOR

REGIONSBUSINESS.COM

Beck’s Cajun Condiments Now Retail Items “And it’s often the case that, you know, you have your Popeye’s fast food, but what sets this apart is that the recipes are researched and Fifty-year-old chef Bill Beck has a passion for very authentic. … A lot of people two things in life: Cajun food and risk. who’ve lived in New Orleans comThe former is apparent by the food you’ ll ment on how good the food is, and find at Beck’s Cajun Café at 30th Street Station how much they like it compared to and Reading Terminal Market, but the latter is what’s there.” slightly less obvious. Mr. Beck launched his café In fact, Mr. Beck’s spices and in October 2009 — smack dab in the center of condiments have been so wellthe financial crisis. received by customers that, as of “You do what you have to, whether the economy January, they began selling them is good or not,” Mr. Beck said. “I was fortunate both in-store and in 12 other retail that I had saved up the money to start the busilocations across the region, includness, and I watched the dollars very carefully. ing Linvilla Orchards and the And now that we’re established, we have the Pennsylvania General Store. resources to start commercial projects … without “Long-term, we’re looking at getthe burden of paying interest on loans.” ting them into supermarket chains Jonathan Morein, a marketer and manager for Beck’s Cajun Cafe, which now employs 12 people, less capital-intensive than past ventures – which, … it’s not an every-person product, but it does said a total of around $70,000 was used to start for Mr. Beck, includes Center City’s Pompano appeal to a lot of different people,” Mr. Morein said. the original café in Reading Terminal Market. Grille and a catering service. “And in a very real way, this food brings cul“I think that Cajun food, it’s this marketable, The idea was to start a business that met an untapped niche audience in the region and was transportable cultural icon,” Mr. Morein said. tural sensibility to our customers.”

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VISIONS

The Lower Schuylkill Corridor:

The Philadelphia Industrial Development Corporation (PIDC) is Philadelphia’s citywide economic development corporation

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

nce known as the Workshop of the World, Philadelphia is reinventing itself as a thriving center of innovation across diverse industry sectors. From its renowned universities and medical institutions, to the successful redevelopment of The Navy Yard and the scores of entrepreneurs who are starting and growing businesses in the city’s neighborhoods, Philadelphia today is a world-class place to live, work, and visit. As Philadelphia’s economic development corporation, PIDC has played a central role in bringing together new resources, public and private, that are necessary for continued growth and investment. Since its founding in 1958, PIDC has closed more than 6,000 transactions, as well as $11.4 billion in financing which leveraged an additional $21.4 billion in total investment for Philadelphia businesses. Most recently, the City of Philadelphia and PIDC unveiled the Lower Schuylkill Master

Plan, an ambitious 20-year initiative to transform an aging 3,700-acre industrial corridor along the east and west banks of the lower Schuylkill River into a 21st Century industrial district in close proximity to Philadelphia’s vibrant and growing technology, energy and logistics hubs. The plan is expected to yield more than 5,500 new jobs, over 5.5 million square feet of high-quality development, and $63 billion in economic impact. In a city of big ideas, the Lower Schuylkill Master Plan is the next transformative idea for Philadelphia’s future. “The Lower Schuylkill plan represents the next great opportunity to grow Philadelphia’s economy,” said Mayor Michael A. Nutter. “Building on the success of The Navy Yard at the mouth of the Schuylkill River, this initiative promises to continue the momentum of investment and innovation throughout the heart of the city, generating business growth, jobs, and opportunity for

the future of Philadelphia.” The Lower Schuylkill Master Plan provides a blueprint for revitalization that will span two decades, recommending targeted public investments in roads, the environment and public amenities to attract innovative and growing businesses. Moreover, the Plan calls on the City and PIDC to coordinate the provision of public resources and services to maximize growth opportunities in the Lower Schuylkill corridor. These efforts are already underway. The federal Environmental Protection Agency (EPA) recently awarded $1 million to PIDC to establish a revolving loan fund for environmental cleanup projects in the Lower Schuylkill. The fund will provide low-interest loans to eligible property owners to enable them to remediate petroleum contamination. Applications for the new loan program will be available in September of 2013. The Plan envisions a 21st Century industrial district that offers major new oppor-

Continued on page 22

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

A Plan For Philly’s Next Big Idea tunities for new and growing businesses alike, combined with sustainable features and compelling public amenities. The Plan includes dedicated public access to the River, new roadway segments creating a functional street grid, new and upgraded bicycle and pedestrian features, and an integrated green network with five miles of new recreational trails and 46 acres of new green space. “The Lower Schuylkill has tremendous advantages for business,” said John Grady, PIDC President. “The corridor ties to Center City, The Navy Yard, Philadelphia International Airport, and the innovation hub of University City. It has direct access to the river, and it offers significant land for sustainable development. With these advantages, the Lower Schuylkill can be very competitive in attracting new companies and jobs to Philadelphia.” The Master Plan includes: Innovation District – Located at the northern edge of the corridor, adjacent to University City, the Innovation District will be a vibrant green campus for research and development, advanced manufacturing, and other businesses. The University of Pennsylvania’s South Bank campus has already established a presence in the District as a home to cuttingedge technology companies like K-Mel Robotics and Graphene Frontiers; Logistics Hub – Located in the southwest section of the Lower Schuylkill, adjacent to the Philadelphia International Airport and I-95, the campus’ proximity to the expanding airport, freight rail and the Port of Philadelphia gives it dynamic potential as a logistics hub; Energy Corridor – Building on the renewed strength and competitiveness of Philadelphia Energy Solutions’ refinery complex, nearby natural gas and

steam energy facilities, and the Energy Efficient Buildings Hub at the Navy Yard, the Plan seeks to leverage existing assets, available acreage and superior rail, highway and port connectivity to develop a national hub for energy production and distribution. “The advantage of the threecampus approach is that it allows the Lower Schuylkill to maximize its existing advantages for new and expanding businesses,” said Grady. “It provides a head-start for business growth, and at the same time, it allows us to customize opportunities for the specific needs in each area.” Sustainable development is another key focus of the Plan, including the expansion of existing green space and dedicated public access to the waterfront through a series of trails, parks, open space and a new “River Road” on the west bank. The Plan also calls for an innovative district-wide stormwater management system, designed to handle a significant portion of the stormwater obligation that will arise from new development. By dedicating approximately 80 acres to a carefully designed shared system, the Plan will transform the look and feel of the Lower Schuylkill, while simultaneously improving its environmental profile. The Plan calls for public infrastructure investments totaling $412 million over the next 22 years, leveraging $860 million in private investment. At full build-out, the Lower Schuylkill is projected to support more than 5.5 million square feet of new research and production facilities, employ over 5,500 people, and generate $63 billion in total economic impact. “The Master Plan makes it clear,” said Grady, “that the Lower Schuylkill could be the next big thing for Philadelphia’s economic future.” For more information, please visit www.pidc-pa.org.

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Making America’s 250th A Philly Success

Sam Katz is the Executive Producer/Director at History Making Productions.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

n July 4, 2026, America will reach an extraordinary historical milestone. This nation and its unique and globally admired form of democracy and self-governance will celebrate its 250th anniversary. Given the evolution of world events, this is a stunning achievement. It is nearly certain that at some time on that day, the nation’s President, whoever she or he might be, will stand in front of Philadelphia’s Independence Hall to commemorate the signing of the Declaration of Independence and the launching of a war for independence and the American Revolution. This celebration, while not yet a focal point for national leaders, represents a once in a lifetime opportunity for the Greater Philadelphia region. If there is a national competition among communities to serve as the primary host for such a celebration, Greater Philadelphia should win. If we act prudently and with foresight, we can lock up this role before any competitive mechanisms are implemented. It is simply historically indisputable that the events, debates and decisions that transformed thirteen loosely confederated colonies into these United States largely occurred in Philadelphia. Important battles occurred and leadership came from New England, Virginia and other colonies. But it was to Philadelphia that came delegates for the First and Second Continental Congresses, that came to debate and sign the Constitution, and where the capital existed until the Revolution was won and from 1790-1800. Surely, celebrations and events can and should take place in 2026 throughout the nation. But when it comes to the main event, it is Greater Philadelphia’s to lose. We must not and will not if we start to plan and to act now. Here is some really good news! We already are. A group of young and promising leaders organized USA250, Inc., a non-profit established to promote a national conversation about America’s future and to celebrate its past and future. Their goal is to establish an organization that collaborates with organizations here and around the country, to pull off an unprecedented celebration of the achievements and promise of our people and of this nation’s values and ideals and to maximize the political, economic and social benefits that arranging and executing such a project can have for the

IT IS SIMPLY HISTORICALLY INDISPUTABLE THAT THE EVENTS, DEBATES AND DECISIONS THAT TRANSFORMED 13 LOOSELY CONFEDERATED COLONIES INTO THESE UNITED STATES LARGELY OCCURRED IN PHILADELPHIA. people of this region. Through an extensive set on conversations in which USA250 listened to nearly 500 leaders, innovators, creatives and average citizens, a set of organizational concepts emerged that could sustain this vision over the next 13 years. First, we should host the conversation about where the nation is and where it is going, after all, this is exactly what Philadelphia did when the country was created. Whatever one’s political perspective, it is generally agreed that the U.S. is off course and needs to think hard about the values, ideals and objectives we want for our country. And like any union between a government and its people, a renewal of vows is always a good thing. So a theme which has emerged for both the conversation is American Renewal. What it means and how

we accomplish it is exactly why a conversation is needed. That conversation can take place virtually and physically, as one gigantic and long term town hall. Second, a celebration of the achievements of America spirit, ideals, creativity and innovation should be held and while such celebration may not be exclusive to Greater Philadelphia, and can and should be centered here. As we talked to people, six themes or celebration pillars emerged around which events and programs should be organized. These six pillars of activity include: Citizenship and Democracy — what can we do to strengthen our government of the people, by the people and for the people and how can we build a better citizenry? Human Creativity and Expression — through fine arts, performing arts and other forms of human expression--classical and contemporary, America’s culture has consistently been unique. Sportsmanship, Competition and Teamwork — an opportunity for every form of physical activity and sport to be featured and celebrated. Innovation and Entrepreneurship — American innovation in manufacturing, science, technology, medicine, transportation has led the world.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS Sustaining the Metropolis — 84 percent of the people of the U.S. live in a metropolitan area where resources are gobbled up and questions of the strategies and tactics for sustaining the quality of life will be forefront.

SURELY, CELEBRATIONS AND EVENTS CAN AND SHOULD TAKE PLACE IN 2026 THROUGHOUT THE NATION. BUT WHEN IT COMES TO THE MAIN EVENT, IT IS GREATER PHILADELPHIA’S TO LOSE. WE MUST NOT AND WILL NOT IF WE START TO PLAN AND ACT NOW.’

Investing in Human Capital — we’ve come a long way in education, behavioral health, attacking diseases, improving housing and life conditions, addressing homelessness, poverty and family stress. But we have many challenges ahead.

USA250’s idea is to host events throughout the region in which activities under the umbrella of each of these themes are organized and through which ethnic, geographic, trade, professional and other organizations whose interests connect to the six pillars can discuss their contributions to the nation, the progress made throughout our history and what needs to be done to improve on and make America better. Noble and lofty objectives for certain. While coming here to celebrate on July 4, 2026 would be the most desirable timing for most, the practical limitations of hosting everything then are obvious. USA250 believes we should start the celebration of the semiquincentennial (250th) anniversary on July 4, 2025 and end it on July 4, 2027, a 24-month or 730 day calendar. Can we fill that calendar? Just think about the vast number of sporting events and the answer should be obvious. What league or organization or group would not want to celebrate their contributions to America’s greatness in the place where a nation was born?

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What is needed? Mostly, a will to succeed. A willingness to be extensive and inclusive. A collaborative spirit. Leadership from every sector of the region and from every generation. A grand vision tempered with a grasp of the possible. The benefits? A celebration of a nation that has led the world and is still the most respected. A chance to open our arms to the diverse and amazing people who have made that happen. A sense of region that we still strive to seek. A renewed capacity to think about our future in ways not yet realized. Best of all, America’s 250th can be an amazing legacy for the world, the nation and for Greater Philadelphia.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Changing Through Collaboration, Innovation

Daniel Hilferty is president and CEO of Independence Blue Cross.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

oday’s U.S. health care system faces significant challenges — from a lack of access to an affordability crisis. In order to find sustainable solutions, we believe we must foster innovation in our region. In fact, we’ve gone one step further. We’ve set a goal to transform the Philadelphia area into a national magnet for health care innovation, investment, and employment. We see no reason why Philadelphia cannot be the Silicon Valley of innovation in the health care industry. It has all the right components — world class universities and teaching hospitals, a strong health and life sciences economy, and an active entrepreneurial community. What’s missing? Active corporate leadership. At Independence Blue Cross, we are committed to leading the way. We’re proud of the accomplishments we’ve made so far in transforming health care in our region and the nation. We’re collaborating with physicians and hospitals to create cost-effective superior care. We’re forging powerful partnerships with Blue Cross and Blue Shield companies and other recognized health care leaders to harness technology and care innovative new products and services. And we’re exceeding customers’ expectations. Here’s a brief look at some of the innovative steps we’ve taken so far. Partnering with other health care leaders to find new ways to improve the quality of care and reduce costs. Today’s most complex health care challenges can’t be solved with yesterday’s solutions or within our own four walls. That’s why we’re working with top Philadelphia institutions on several new initiatives to nurture promising health care start-ups. We partnered with Wharton Entrepreneurial Programs, the Department of Public Health of the City of Philadelphia, What If Innovation Partners, and Venturef0rth, to create the IBX Game Changers Challenge. This competition harnessed our community’s creative energies by soliciting original proposals that could improve our region’s health and wellness. The response was greater than anyone could have imagined: 150 total submissions from young health care companies, 15 incredible finalists, and three winning ideas with tremendous potential to create a

healthier Philadelphia. We also collaborated with Penn Medicine and DreamIt Ventures to launch DreamIt Health, Philadelphia’s first business accelerator for health care startups nationwide. With up to $50,000 in seed money each, executive mentoring, coaching from experienced entrepreneurs, and complementary office space, ten dynamic young companies are now well positioned to secure funding, find future customers, and build and grow their businesses right here in Philadelphia.

WE SEE NO REASON WHY PHILADELPHIA CANNOT BE THE SILICON VALLEY OF INNOVATION IN THE HEALTH CARE INDUSTRY. IT HAS ALL THE RIGHT COMPONENTS.’ Teaming with top institutions to forge research studies that will help find innovative ways to keep people well. We’re excited to further collaborate with Penn Medicine on several ground-breaking research initiatives by leveraging our vast databases of claims information and Penn’s research expertise. One study, for example, will look at whether a pill bottle — that glows and makes musical sounds — will remind heart attack survivors to take their medicine and help reduce the risk of a second heart attack. We’re also working with the NYU Langone Medical Center to use big data to spot cases of undiagnosed diabetes and to predict pre-diabetes in patients to improve care and lower costs. Collaborating with the medical community in groundbreaking new models of care. We helped pioneer medical homes, a new primary care model that puts primary care doctors in charge of a health care team to deliver high-quality, coordinated care. We’re a national leader in paying doctors more for becoming recognized as a medical home by the National Committee for Quality Assurance. Our region now has one of the highest

concentrations of medical homes in the country. We’re also proud to work closely with some of the most respected teaching hospitals in the region to include their residency programs in this work, training the next generation of medical-home doctors. We’re investing in technology that will greatly improve communication and the efficient delivery of care. Our partnership with Abington Health and Lumeris marks the first time an insurer, hospital system, and health care technology company have partnered in this region to combine electronic medical records with health plan claims data. This new partnership will give Abington doctors an unprecedented 360-degree view of patient care. We are also a major participant in the launch of HealthShare Exchange, our region’s first health information exchange that will vastly improve the secure exchange of health care data among hospitals, doctors, other health care providers, and insurers. In a first for New Jersey, our subsidiary AmeriHealth New Jersey joined forced with Cooper Hospital to improve health care delivery and lower costs by developing and offering a new suite of health plans and an accountable care model for New Jersey residents. This joint venture creates the largest provider network in southern New Jersey. Working with local communities to prevent disease and improve health. Through the Independence Blue Cross Foundation, we’re investing $2.7 million to improve child wellness and reduce obesity, which affects nearly half of Philadelphia school children. Our Healthy Futures program includes top partners such as The Children’s Hospital of Philadelphia, the Philadelphia Union, and the Vetri Foundation for Children, and addresses three critical health components: nutrition, fitness, and preventive health. We’re proud of these partnerships and excited that after 75 years we’re still finding new ways to collaborate to transforming health care in our region and the nation, building on the steps taken by the Affordable Care Act to expand access. With change comes opportunity. By working together to indentify new and innovative solutions to improve the quality of health care and reduce costs, we will build a healthier future for everyone.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

City’s Problems Offer Market Opportunities

David Gloss is co-founder and CEO of Here’s My Chance and executive chair of The Spruce Foundation.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

t the SOCAP13 conference earlier this month in San Francisco, funders, founders, and subject matter experts interested in everything from clean technology to food technology, from education reform to ocean storms, came together to “Accelerate the Good Economy.” Attended by over 1,500 people, SOCAP is the world’s most important conference on the intersection of capital and social enterprise. Which made it even more exciting to see Philadelphia’s social impact leaders so well represented. One in particular was a program, FastFwdPHL. FastFwdPHL came all the way to San Francisco from Philadelphia for their official launch. On the third day of the conference, during their dedicated “Accelerating Urban Innovation” session, FastFwdPHL presented their unique approach to addressing urban social challenges and provided a small taste of the true impact revolution bubbling up through Philadelphia’s city streets. Sitting in the Marina building at Fort Mason, representatives from the Mayor’s Office of New Urban Mechanics, GoodCompany Group, Wharton Social Impact Initiative and Further presented the final iteration of their public-private partnership extending from the Nov. 2012 $1 million grant win in the Bloomberg Philanthropies Mayor’s Challenge. I sat and admired them from the front row, and I was thinking about how far we have come in 18 months. Only an idea at first that has transformed into a standard. The old stone masonry and echoing fog horns in the distance, Fort Mason was an ideal location for the presentation. Fort Mason used to serve as Military barrack in WWII and has since been converted to an arts, business and coworking space. There are many similarities to what Philadelphia is doing with the Navy Yard and its innovation intention. It stood as a symbol of where traditional government can be the foundation for innovation and change. In its essence, the million dollar grant allows Philadelphia city procurement to become more agile and responsive to entrepreneurial solutions to social challenges. Formerly known as PSEP, FastFwdPHL was well received by over 150 of the world’s leading urban planners, community advocates, funders and entrepreneurs as it laid out its plan to “civic hack” public safety. Philadelphia spends over one third of its budget on public safety, yet still cannot shake the nickname “Killadephia”.

Through a business accelerator model, FastFwdPHL issues an international call for commercially viable ideas around targeted social issues and invites entrepreneurs to participate in a 12-week fellowship in Philadelphia. FastFwdPHL’s focus is on public safety where ideas can be range from hyperlocal “Amber Alert” notification apps for local neighborhoods to creative workforce/mentor programs that reduce recidivism. $100K exists for the fellows with the best ideas receiving investment from private and public sources to sustain the solution. The focus on market driven solutions to social

THE CITY OF PHILADELPHIA HAS SUCCESSFULLY NAVIGATED THROUGH A CULTURAL AND BUSINESS RENAISSANCE. PHILLY HAS BEEN ABLE TO SET A STANDARD FOR THE CONVERGENCE OF MONEY AND MEANING.’ issues is not new, but for a city government to use it as a model to help it best spend its limited resources, it’s quite remarkable. This is a huge shift in current procurement practices, which traditionally relies on a prescriptive, lowest bidder model that presupposed knowledge of both the problem and the solution. Furthermore, it is a huge precedent for a country that seems to have written off the public market as a barrier versus an opportunity. With over 1.5 million residents, Philadelphia is the fifth largest city in the U.S. With no shortage of challenges, most notably its current education crisis, the city serves as an ideal proving ground and for innovative solutions to everyday problems. By adding in our MEDs and EDs foundation, it is no coincidence that Philadelphia was invited to present on the only panel addressing innovation in the urban sector. Over the last several years, the city of Philadelphia has successfully navigated through a cultural and business renaissance. Philly has been able to set a standard for the convergence of money and meaning. Here’s My Chance has had the honor and privilege to work with and support many organizations, tell their story and convene resources

for their success. A quick look at these organizations below and you will see exactly what I am talking about. An international coworking revolution is led from North 3rd Street’s Indy Hall cofounder Alex Hillman; Wash Cycle Laundry, inspired by FedEx programs in Mexico City, is setting a new standard for sustainable low freight transport in 19th century street systems; InLiquid is leveraging its position within the arts world to convene the national juvenile justice reform conversation around powerful photography exhibitions; Alejandro Gar-Artigas of Springboard Collaborative is using what he learned at Teach for America, McKinsey and Harvard to close the reading gap in a revolutionary summer reading program currently piloted in the Philadelphia School District. With over 4,000 registered nonprofits in the region, Philadelphia is no stranger to the power of impact. However, it is this very figure that fuels Philadelphia’s revolution and debate over what impact is and our collective role in it. Firstly, Philadelphians are recognizing that impact is not a tax status. Due to the large number of nonprofits, foundations and high net-worth donors, which are the primary funding source for many nonprofits, are no longer interested in another “me, too” education program. Secondly, those inclined to support impact are beginning to challenge the notion that “good” relies on donation. Doing something good on the planet does not require a 501c3. Impact is a state of mind, a way of living and a system of shared values. To accelerate the good economy, there requires a creative and aware intersection of meaning and money. Philadelphia offers a plethora of seeds to support that acceleration. And for the first time, we get to test it out in the public sphere with FastFwdPHL. This is only after a long and evolving path through traditional practices, stagnation, failing budgets and frustrated funders, impact leaders and entrepreneurs. What is exciting is that the good economy is still being defined. I could not get a single aligned answer from all of my interviews of the world’s brightest minds at SOCAP as to a general definition for the good economy. But what I could get, was a shared understanding that the world is beginning to shift and Philadelphia is most certainly helping lead that change.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Investing In People Pays Big Dividends

Dan Fitzpatrick is President of RBS Citizens and CEO of Citizens Bank for PA, NJ, and DE and Chairman of the Greater Philadelphia Chamber of Commerce

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

here is one topic in the Greater Philadelphia region that resonates with almost everyone: Jobs. How can we to put more people to work and create a strong pipeline of jobs for the future? While there are clear signs that the economy continues to recover, one of the challenges of this recovery is the continued disconnect between the skills of our workforce and the jobs that are currently available. We need to train the workforce of the future and tailor job training programs to fit the industries showing the most growth. We have done a good job in higher education and life sciences — our region’s core strength — but we have other opportunities as well. As Chairman of the Greater Philadelphia Chamber of Commerce and Co-Chair of the Manufacturing Task Force, I see firsthand how important manufacturing is to our economy and to the growth of the region. According to the Federal Reserve Bank of Philadelphia, the index of regional manufacturing activity is expanding at the fastest pace in more than two years. Recently, the U.S. Department of Labor awarded Pennsylvania a $3.6 million grant to provide training to displaced workers across the Commonwealth, with a focus on advanced manufacturing, energy and health care sectors. There are real job opportunities in these fields. Consider this example: the average age of a skilled welder in Pennsylvania is approximately 58, depending on experience their average salary could reach up to $100,000 a

year but there aren’t enough training pipelines for this critical trade. We have to help provide training for the jobs that are available and create the pipeline and the path for people to connect to those jobs. Simply put, growing businesses of any size and in any industry without investing in the next generation of employees is pointless. It’s tough to ignore the statistics in the chemical and energy industries. The chemical industry in Pennsylvania is the largest export industry for the Commonwealth with more than $8 billion in annual exports. Its downstream specialty chemical converters and plastics companies are providing significant growth opportunities. These companies benefit directly from cost effective energy, gas and related raw material companies, ample water resources as well as the proximity to and ease of our transportation infrastructure. While these industries are encouraging, there are other avenues that must be more thoroughly utilized including the role of our vocational schools and community colleges. By partnering with these schools, public — private partnerships can help develop, manage and fund co-ops, internships, mentoring programs and curricula that will better prepare the students of today to become productive employees of tomorrow. A basic component to expanding opportunities for someone looking for a new job or a better opportunity is through networking opportunities and business opportuni-

ties driven by the Chamber of Commerce. In Philadelphia, the Young Professionals Network is helping young adults build business relationships and develop professional skills while the Leadership Now program offers professionals an opportunity to expand their business to enhance their careers. Philadelphia Academies is also making progress by expanding opportunities for Philadelphia public school students through career-focused programming that prepares young people for employment and postsecondary education. The Greater Philadelphia region is the fifth-largest metro area in the United States and we have lot to be proud of. More than 20 universities sponsor science and technology incubators and we have a thriving entrepreneurial environment. We have an incredible quality of life along with competitive advantages including a great geographic location, a reasonably priced energy supply, and a vibrant transportation hub. But we are falling short in training the workforce of the future. We need to connect the dots and make sure our workforce is trained for the jobs created in these emerging industries. We are at a unique juncture in our economic history that has positioned this Greater Philadelphia region to grow jobs. Workforce development is critical and we must find ways to provide all industries with skilled employees and residents with good paying jobs. The investment will pay big dividends.

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Tourism Will Be A Powerful Economic Engine

David L. Cohen is Executive Vice President at Comcast Corporation.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

rom Independence Hall to Eastern State Penitentiary, theaters to ballparks, museums to miles of nature trails, and culinary delights to nightlife, Philadelphia offers something for everyone. Residents and visitors alike continue to discover everything this City has to offer, making it a sought-after destination to live, work, and visit. Since 1997, Philadelphia tourism has increased 44 percent, with 38 million people visiting the Greater Philadelphia region in 2011, a record for the City. According to the Greater Philadelphia Tourism Marketing Corporation (GPTMC), tourism generates $26 million a day and supports more than 86,000 jobs — enough people to fill Citizens Bank Park, Wells Fargo Center, and PPL Park at the same time. In recent years, Philadelphia has also become one of the fastest growing international destinations in the United States. The economic engine of tourism that Philadelphia now enjoys did not happen by accident. As Chief of Staff to the Honorable Edward G. Rendell in the early 1990s, I witnessed firsthand the strategic initiatives that led to an explosion in tourism in our Region. And this plan very deliberately engaged the Region’s business and civic communities in a comprehensive tourism growth strategy. I see these positive trends continuing over the next 10 years as we make strategic public and private investments that create a stable economic base and position Philadelphia for growth. One of the business community’s main strategic imperatives is “economy building,” and as a partner with government, we can continue to build upon our vibrant tourism and convention businesses. For example, lobbying for the Convention Center and its expansion, investing in new hotels, and joining together for large-scale events like the 2000 Republican National Convention, put Philadelphia on the destination radar screen. Philadelphia has a dynamic and growing leisure and hospitality infrastructure. In 1998, the City had 5,000 hotel rooms versus 11,000 today. This growth was fueled by strategic investment — the $786 million expansion of the Pennsylvania Convention Center allowed Philadelphia to host major events that draw the business community and tourists to various conferences and attrac-

tions. Additional investments in new attractions include $200 million for the Barnes Foundation, $150 million for the National Museum of American Jewish History, and $185 million for the National Constitution Center each bringing new opportunities for visitors to experience. The strategy was simple — build up a hospitality infrastructure that required more than one-day visits to Philadelphia. Our business community must continue to collaborate with government in order to keep Philadelphia on this positive trajectory.

Corporate executives also play an important role by leading and serving on key tourism and promotion boards, such as GPTMC, the Convention and Visitors Bureau, the Convention Center, and others. Active participation by senior leaders helps to align goals and ultimately drives innovation, job creation, and economy building. According to the most recent Census estimates, after falling for half a century, the City’s population grew to more than 1.5 million people. We have seen an influx of young adults, ages 20-34. More than 250,000 students are enrolled in over 100 colleges and universities across the Philadelphia region, and recent graduates are increasingly staying in Philadelphia to live and work — a result of strategic investments in retaining college graduates through the “Campus

Philly” initiative. Now we need to work together to ensure that the next generation of Philadelphians become active citizens who are proud of their city and find dynamic employment opportunities. I am privileged to work for a company that is helping to lead this charge. This year, Comcast is celebrating its 50th birthday. Over the last half century, we’ve grown to become a global media and technology company with more than 129,000 employees across Comcast Cable and NBCUniversal. However, we remain very much a Philadelphia company and are proud to be headquartered here. Our acquisition of NBCUniversal and the NBC broadcast network, including NBC News (one of our country’s most iconic news organizations) and NBC Sports, has brought significant favorable attention to the City. And we bring thousands of visitors to Philadelphia every year — Comcast and NBCUniversal employees have used thousands of hotel room nights in Philadelphia over the past two years, and this does not count the many non-Comcast visitors coming to Philadelphia to meet with Comcast technologists, business people, and other executives. Comcast Center was also built with the public interest in mind. The building not only changed the Philadelphia skyline, but “The Comcast Experience” video wall in the lobby has turned into a must-see destination for visitors. People from all over the world have come to view the stunning imagery on one of the world’s highest resolution LED displays year round. A highlight is the “The Comcast Holiday Spectacular,” a free 15-minute show that plays each holiday season and has become a tradition for people of all ages. Since its debut in 2008, nearly 1 million people have flocked to the Comcast Center to see the free, state-of-the-art show. Comcast is just one example of many businesses in the Philadelphia region that provide tremendous private investment, resulting in a significant positive impact on the City and enhances its status as a tourism and convention destination. As we continue to work together and focus on making Philadelphia a premier destination, I have no doubt that the best days are still ahead — making a meaningful difference to those who live, work, and travel to our amazing city.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Big Ideas For A World-Class Philadelphia

Rob Wonderling is President and CEO of the Greater Philadelphia Chamber of Commerce

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

modernize city government? Let’s bring ig ideas to create a world-class the best and most creative minds together city are easy to come by. It’s the to think about how to do (and run) things execution that’s hard. Below are differently in government. Everything a few ideas that are not only timely, but from issuing permits to filling potholes. If doable. government really is by the people, then Big Idea No. 1: Improve mobility let’s bring the people together to rethink Mobility is an important part of our our government. A more efficient and daily life. We travel to work, to school, responsive government makes for a more to shop, and home again. Getting from favorable place to do business. point A to point B safely and in a timely Big Idea #4: Clear a path for Philamanner is important to us and important for our economy. Being able to ship delphia’s kids to get an education goods safely and efficiently is critical to Recognizing that our region depends a business’s bottom-line. Communities upon high-quality schools that prepare with congestion suffer from air pollution, every student for success in the workplace poor economic growth, and a diminished or college, the Greater Philadelphia quality of life. Eliminating congestion on Chamber of Commerce has made a our region’s key corridors should be a top significant commitment over the last priority. several years to the education and employRecently, the Commonwealth of ment prospects of our youth by assisting Pennsylvania joined a handful of states the School District of Philadelphia with nationwide and passed Public Private resources, leadership and talent recruitNatural gas pipeline HARALD HOYER Partnership (P3) legislation. P3s are a ment. tool for financing infrastructure projects existing infrastructure assets and proximity Another big and essential idea for without increasing government spending. to a large market. Philadelphia is to create the climate and As an example, the High Occupancy Toll In addition, Greater Philadelphia’s repurstructure for sustained improvement in our project in Virginia, surrounding Washington, city’s public schools, which educate nearly posed refinery sites offer new petrochemical D.C. was financed, designed and built by 200,000 children. Lurching annually from opportunities for natural gas liquids (NGL) the private sector. Decades ago, a traditional funding crisis to funding crisis, without processing, buoyed by planned pipeline approach would have been to widen the clearly dedicated revenue streams, or a development such as Mariner East. road, spend billions of taxpayer dollars, and clear vision for academic success, is a recipe And Greater Philadelphia’s access to take 10 years to complete the job. Instead, destined for failure not only for our kids, but waterways and markets — bolstered by its the private partners absorbed much of the for the city. rich natural resources — has positioned our project’s cost upfront, completing it under Rather than tweaking the funding stream region as a powerful economic engine. budget and on time. for public schools each year with a one-time These manufacturing companies create Cities throughout America are using P3s revenue measure here, or a new tax there, we good, well-paying jobs. Employment in to build extraordinary designs that increase need to develop a comprehensive approach the core Marcellus extraction jobs, such as capacity and reduce pollution. Cities like towards revising the Commonwealth’s drillers, has risen 11 percent since 2008. San Antonio, Texas and Tampa, Florida are funding formula for public schools across The more dramatic employment numbers, adding lanes on top of existing roadway Pennsylvania, a formula that currently lags however, are in positions that support without interrupting travel times or disruptbehind much of the nation. A modernized the growing industry. The Pennsylvania funding formula, which also takes into Department of Labor & Industry reports ing communities. account the growing number of children in employment in the ancillary and supplyThe Schuylkill Expressway is an ideal cancharter schools, will strike a better balance chain industries has topped 115,000. didate for a P3. Congested almost continufor public education across the CommonWe must seize this opportunity, invest ously, the I-76 corridor is clearly broken. It’s in the necessary infrastructure required to wealth, including here in Philadelphia. It’s time we fix this important regional artery. support it, and become a leader in energy also important to note that any funding Big Idea No. 2: Capture the energy and production and distribution to the world. reforms as they pertain to Philadelphia must manufacturing opportunities in Greater Big Idea No. 3: Host a Hackathon to also include reasonable and responsible fiscal Philadelphia as a result of Marcellus Shale restructure and modernize city governreforms agreed to by the School District’s In the last year alone, the Greater organized labor workforce. Philadelphia region has seen substantial ment Under the impressive leadership of the new manufacturing opportunities due to The idea of a hackathon is to attract Philadelphia School District’s superintenMarcellus Shale. According to Select Greater and foster collaboration among a group Philadelphia, manufacturing opportunities of people — usually members of the tech dent, Dr. William Hite, our schools are now comprise 33 percent of active projects community – to work on a software or moving in the right direction, but a revised considering a location in the region versus hardware project over a day or week or funding formula is essential to achieving the 20 percent just a year ago. The companies sometimes longer. While I readily admit I long-time goal and vision: the best educaare interested in our region due to the lower am repurposing the word, why not host a tional opportunities possible for every child cost and access to natural gas as well as our six-month hackathon to restructure and in our schools.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

SEPTA’s Vision For The Next 10 Years A Joseph M. Casey is general manager of SEPTA (Southeastern Pennsylvania Transportation Authority)

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

public transportation system that is reliable and efficient, attracting new riders, and keeping those already on board with outstanding customer service. These have been the central tenants of SEPTA’s progress in recent years and will only grow in importance as we serve the Greater Philadelphia region over the next decade and beyond. SEPTA’s strategy to attract and retain new riders is based on building a customer service culture focused on the “Four Cs” — cleanliness, communications, convenience and courtesy. The results are showing. Ridership has hit all-time highs, and on-time performance continues to improve. Surveys are showing consistent increases in customer satisfaction levels. The task for the 10 years ahead is to build on this momentum. A number of efforts already underway will help us achieve this goal — most prominently, a transcendent electronic fare payment system that will enhance the customer experience and make SEPTA more welcoming to new riders. We’re also using our limited resources to modernize our fleet and upgrade aging infrastructure. Now, just imagine what we could do with more financial support. We could jump-start a number of initiatives to not only strengthen the core of the transit system, but also expand it. We could attract new customers, and increase service frequency. With adequate funding, all of this would be within our reach. One visionary proposal that has received attention recently is an extension of the Norristown High Speed Line into the King of Prussia and Valley Forge area. Support voiced at public meetings about the project earlier this year reinforced its viability — and need. The extension would provide passengers with a direct ride from the 69th Street Transportation Center and the Norristown Transportation Center to various destinations in the King of Prussia and Valley Forge area. Today, these types of trips must be made on congested roadways, but with a dedicated rail line, access to this already bustling, yet congested area would open up for residents, tourists and businesses. SEPTA could also improve existing portions of the City Transit system, and add services that would give everyone from regular customers to occasional riders more options to get around. An extension of the Broad Street Line to the Naval Business Center in South Philadelphia would provide direct rail service to a growing facility that

already employs 10,000 people. Bus Rapid Transit to the Art Museum area and along Roosevelt Boulevard would provide new alternatives to popular tourist destinations and traffic relief on congested streets. Construction could also move forward on the long-planned modernization of the City Hall Station, SEPTA’s busiest facility. Renovations would bring a full complement of modern amenities to the station, making it more accessible for the tens of thousands of customers who use it every day, and welcoming to new riders.

ACHIEVING THIS VIBRANT FUTURE FOR PUBLIC TRANSIT IN OUR REGION REQUIRES A STRONG FOUNDATION AND ROBUST FUNDING SO THAT CRITICAL ISSUES... CAN BE ADDRESSED NOW, BEFORE IT’S TOO LATE.’

The Regional Rail system, fresh off a record-setting year with over 36 million trips and 93 percent on-time performance, could be the scene of more exciting progress. Part of the recent success is thanks to 120 new, state-of-the-art Silverliner V rail cars, which have replaced SEPTA’s oldest trains. In addition to an overall improved ride for customers, new rail cars increase reliability and efficiency, and add capacity for new riders. Replacing the remaining rail cars, most of which date to the mid-1970s, would extend these benefits to the entire Regional Rail fleet. The reliability of these new trains would be further enhanced by upgrades to tracks, power lines and station facilities, many of which date back a century or more. Projects to address these needs are critical as SEPTA moves through the coming decade. The benefits of each expansion or upgrade would extend well beyond the confines of the SEPTA transit system. Each of SEPTA’s buses, trolleys, and trains provides residents with an alternative to the automobile — a more affordable, socially responsible, and environmentally friendly way to travel. Our services take cars off the

road, reducing congestion, supporting livable communities, and enhance the overall quality of life in our great region. SEPTA’s Sustainability Program is designed to enhance these regional benefits to ensure a continued ability to meet present needs without compromising the needs of future generations. Initiatives both highly visible — such as one of the largest hybrid bus fleets in the nation — and virtually invisible — such as a cutting-edge wayside energy storage project to store, capture, reuse and resell energy generated by braking trains — illustrate SEPTA’s approach to sustainability, and its efforts to improve environmental performance while protecting the bottom line. Achieving this vibrant future for public transit in our region requires a strong foundation and robust funding so that critical issues — bridges that date back 80-plus years on average, 1930s-era power substations, rail cars that are in their fourth decade of service — can be addressed now, before it’s too late. While SEPTA’s ridership is at its highest level in decades, spending for improvement projects is at a 15-year low due to reductions in state funding. SEPTA’s capital budget has remained at approximately $300 million annually over the last several years, which is considerably less than that of similar-sized transit agencies across the country. For example, WMATA in Washington, D.C., has a capital budget of approximately $1 billion, while Boston’s MBTA has $800 million to improve its system, and NJ Transit $1.1 billion. According to a recent independent report by the Economy League of Greater Philadelphia, SEPTA needs $450 million in additional annual funding to address its state-of-good repair needs. Investment in SEPTA is money well spent. The Economy League report found that SEPTA has proven to be a good steward of the taxpayer dollars it receives, and is one of the tools that make our region competitive in today’s global market. Each year, SEPTA supports nearly 26,000 jobs, generates $62.5 million in state tax revenue, and contributes $3.21 billion in total economic impact. SEPTA will not be able to provide these economic benefits over the long term without an infusion of new resources. With the right level of support, however, SEPTA’s positive impact on the region’s economy will only grow, and its vision to become the region’s premier choice for transportation will become a reality for generations to come.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Temple Focusing On Entrepreneurship O M. Moshe Porat, PhD, CPCU, is dean of the Fox School of Business in the School of Tourism and Hospitality Management at Temple University

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

ne of the most profound statistics about Temple University is that one in seven college-educated residents of Greater Philadelphia has at least one degree from Temple. And 70 percent of Fox School of Business alumni – a network totaling more than 60,000 graduates – live in Greater Philadelphia. Every day, the Fox School seeks to strengthen our world-class city by offering dynamic programs that position our students and alumni for success; by recruiting top-caliber faculty members who produce research that changes the way we live and work; and by emphasizing entrepreneurship, technology commercialization, small business development and public-private partnerships as ways in which we can drive economic growth and job creation in our region. In addition, and in line with President Neil D. Theobald, the Fox School strongly supports reducing student debt by holding down costs and fees, aggressively fundraising for scholarships, promoting four- and three-year graduation plans, and enhancing financial literacy among students and their families. Less debt means more flexibility in career paths — including launching entrepreneurial ventures — and we seek to offer a wide range of opportunities to our 7,000 undergraduate, graduate and doctoral students. We offer 13 undergraduate majors, including programs in risk management and insurance, international business, entrepreneurship, and management information systems that are among the top-ranked in the nation. In addition, our premier accounting and marketing majors are two of the most popular at Temple. At the graduate level, we recently launched the full-time Global MBA, which combines our top-ranked MBA curriculum — including the capstone Fox Management Consulting project for industry clients — with two-week, faculty-led international immersions during each academic year. These international experiences will focus on emerging economies in Asia, Latin America and Africa. Our Specialized Masters programs, some of which lead to important professional designations (CPA, CFA, ASA, CPCU, CEBS and others) continue to expand. Recent additions to our portfolio include a Master of Accountancy, Master of Science in Information Technology Auditing and Cyber-Security, a Finance Masters Suite of three distinct programs and a new Master

of Science in Innovation Management and Entrepreneurship. At the doctoral level, we are launching the region’s first Executive Doctorate in Business Administration. Starting next fall, this part-time program will equip senior executives with advanced skills to better address the vexing problems that face organizations, to lead change initiatives and to transform business practice. These programs are all illustrations of how we revise and expand many programs to produce graduates who are problem solvers with the depth of knowledge and skills needed to succeed in today’s — and tomorrow’s — highly competitive global marketplace. But assembling a world-class faculty and providing students with innovative programs and superb services do not solve the equation alone. Community engagement, entrepreneurship and research are also central to a world-class business school and, of course, to a world-class city. To that end, I recently appointed Professor Paul A. Pavlou as Associate Dean for Research, Doctoral Programs and Strategic Initiatives, as well as Chief Research Officer. He is responsible for promoting research excellence, supporting sponsored research, leading outstanding doctoral education, and pursuing strategic research initiatives to further enhance our reputation and reach. Entrepreneurship has been and will continue to be — during the next decade and beyond — one of our focal points. U.S. competitiveness can only be sustained through small businesses, startups, and innovative ideas — both in the public and private sectors. Earlier this year, we co-hosted the Mayors’ Innovation Summit with the City of Philadelphia and the U.S. Conference of Mayors. More than 30 mayors and dozens of other top elected officials gathered to share ideas on how civic innovation can increase citizen engagement, promote open government and improve services. The summit was the seventh in an ongoing series organized by our Center for Competitive Government. The Temple Innovation and Entrepreneurship Institute, based at Fox, supports entrepreneurship across Temple, including the annual Be Your Own Boss Bowl business-plan competition that awards more than $200,000 in cash and prizes to students, faculty and staff, and alumni. The Blackstone Charitable Foundation

recently selected Temple as one of three partners, with Philadelphia University and the University City Science Center, in a $3 million grant-funded initiative to provide students and alumni with the skills, knowledge and guidance to transform ideas into viable companies. The Pennsylvania Blackstone LaunchPad programs are expected to generate some 100 ventures and hundreds of jobs during the next five years. Last year, the Temple Small Business Development Center consulted with 835 entrepreneurs and helped start 51 businesses. Seventy-one percent of all clients were minorities, and 63 percent were from Philadelphia. One of our senior faculty members, Professor Youngjin Yoo, is principal investigator on the grant-sponsored Temple Urban Apps and Maps Studios, a university-wide collaboration that connects one of the largest groups of information technology users — high school and college students — with urban entrepreneurs and community, governmental and academic leaders. Together, participants develop and commercialize apps and maps to help solve the challenges faced by urban societies. The primary goal of the program is to stimulate economic development, job creation and business ventures in underserved Philadelphia neighborhoods. We are also focusing more intently on technology commercialization. Last spring, we held the first TechConnect Idea to Invoice Workshop to help develop new Temple technologies and increase their likelihood of commercial success. Temple’s Office of Technology Development and Commercialization and the Temple Innovation and Entrepreneurship Institute co-hosted the event, which attracted graduate students and faculty from business, medicine, engineering, science and law to discuss promising technologies and to help move them closer to achieving market success. We know that good ideas alone are not enough. They must progress along a relevant and disciplined set of milestones from proof of concept to successful customer trials, and then on to the marketplace. Each step requires funding, mentoring and access to extensive networks. Refining this process is a challenge, but we fully embrace the hard work it takes to make it happen. As it’s been said, Philadelphia is a great place to be a founder. So too is Temple.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Creating Vibrant Suburbs To Attract Best, Brightest

Eric T. Goldstein, LLA, PP, is Executive Director of the King of Prussia District

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

et’s face it…it’s not your father’s business park anymore! Today’s employers and employees are looking for vibrant and stimulating work environments, whether in traditional central business districts or in the suburbs. In addition, the newest generation of employees are leaning away from the automobile and moving toward alternate modes of transportation. They are looking for opportunities that offer the flexibility of living close to work, the ability to avoid commuting traffic, high gas prices, car payments and maintenance expenses. They want to walk to get lunch or a cup of coffee, and they want to browse the Internet on free Wi-Fi while sitting in an outdoor cafe. In the past, these characteristics might typically be reserved for more urban environments, but smart suburban locales are realizing that these characteristics need to come to their neck of the woods if the suburbs are going to survive. The only way for older suburban communities to create this environment is by revamping their decades old zoning codes and embracing opportunities for enhanced public transportation options. In the Philadelphia region we have a situation where more and more employers and employees continue to move out of the City. In fact, since 1970, Philadelphia has lost 25 percent of its total employees, more than 260,000 jobs. In the Central Business District and in some of the adjacent neighborhoods, new residents have filled the vacant space created by these outbound employment moves through office to condo conversions, fueled in large part, by a lucrative tax abatement. In Montgomery County alone, the outflow of jobs has resulted in more employees travelling daily from the City out to their suburban job (68,986), than from the suburbs into downtown (64,575). The numbers are not unique to Montgomery County as about 42 percent of all City of Philadelphia residents rely on reverse commutes to suburban locations for employment.* Most of the suburban locations in the Philadelphia region date back decades to their inception as products of the development and expansion of the Federal highway system. These suburban locations such as King of Prussia, Fort Washington, and Plymouth Meeting, were created simply as employment centers for an auto-dependent commuter. The majority of the employees lived, and still live, miles away in other suburban locations.

New highway construction made a shift from the urban life to the suburban life easy as many fled the blight, density and crime of the inner city for the bucolic nature of the Philadelphia suburbs. As a result, commercial office followed into these suburban locales as well. But the challenge today is twofold: 1) too many of these locations still operate under the zoning codes created more than a half decade ago and 2) there is large scale reverse commuter population looking for more inspired employment locations than the mid-20th Century zoning codes allow. Single use zoning still permeates the landscape. Office space still sits miles from residential and service industries, restaurants and entertainment are all still a car ride away. So how do we reinvigorate the suburban locales that have, and will continue to create jobs, in the Philadelphia region? How do we make sure we develop stimulating environments in the suburbs that can attract and retain companies and young professionals for years to come? In Upper Merion Township (King of Prussia), the King of Prussia Business Improvement District (KOP-BID) and the Township are in the midst of rewriting the zoning code and Subdivision and Land Development Ordinance (SALDO) to incorporate mixed-use development. The new code will allow multi-family residential and service retail to be constructed alongside corporate office developments leading to more balanced and active neighborhoods. This mixed-use approach will allow more people to live and work within walking distance (or shorter driving distance) to each other leading to, among other things, a measurable reduction in traffic congestion. The revised zoning code will also incorporate design standards to promote a more friendly pedestrian scale and to protect the institutional quality of the architecture and development in the business park. Lastly, the revised zoning code will articulate Transit Oriented Development language that could attract the kind of development that appeals to today’s companies and their employees. Of the major suburban employment centers in the Philadelphia region, the ones that have fared the best in the past 10 years are the ones that have addressed and embraced zoning changes and the ones with the best access to public transporta-

tion. Places like Conshohocken, Radnor and Malvern are good examples. In order for the other suburban Philadelphia municipalities to grow jobs and attract corporate investment, new zoning codes must be put in place that:** — Encourage high institutional-quality Class ‘A’ mixed-use developments that offer site amenities to world-class tenants. — Retain and attract commercial businesses, light industry, multi-family residences and other compatible uses that will help to create vital mixed-use districts. — Promote street level activity with attractive first floor retail, dining, personal service and other compatible uses along main roads to support the needs of local employees and residents. — Integrate pedestrian-ways with aesthetically pleasing public spaces and landscaping along roadway corridors. — Allow density and height increases with the incorporation of sustainable building practices to conserve energy and water. — Encourage a high level of architectural detail, aesthetically pleasing signage and functional site design through the utilization of enforceable design guidelines. — Encourage cross access easements, shared driveways and the creation of service roads between parcels to minimize the number of driveways onto existing roadways in order to enhance safety and provide more efficient and economical access and parking. — Encourage shared parking between compatible uses on the same lot or on adjacent lots. — Encourage the development of existing roadways as complete streets that safely accommodate bus, automobile, bicycle and pedestrian transportation modes. —Incorporate high quality sustainable building materials and energy and resource conservation into new development. For suburban communities in Philadelphia to compete in an environment of reverse commuters and regional and national competition for employers and employees, we must commit to renewing our outdated zoning codes and improving suburban access to public transportation with an eye toward creating the vibrant and stimulating mixeduse environments today’s employers and employees seek. * King of Prussia District, Looney Ricks Kiss of Princeton, NJ, Simone Collins Landscape Architecture of Norristown, PA. 2012/2013 ** onthemap.ces.census.gov

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Philadelphia: The Next-Generation City

Katherine Gajewski is the director of Sustainability with the City of Philadelphia. She can be reached at (215) 686-4471 or at Katherine. Gajewski@phila.gov.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

eople are making their way back to cities. In the U.S., after decades of neglect and decline, cities are receiving renewed interest and are repositioning themselves as places ripe for innovation and investment. But growth brings its own set of challenges. To house, move, and employ urban dwellers now and into the future, municipalities must maintain and upgrade aging infrastructure, expand economic opportunities, and improve residents’ everyday quality of life, all while adapting to the reality of climate change. These challenges are deeply local, and local governments must take the lead to solve them. For the past five years, I have been working with colleagues within Philadelphia city government along with external partners to advance the initiatives laid out in Greenworks Philadelphia, the City’s comprehensive sustainability plan. Greenworks sets targets in the areas of energy, environment, equity, economy, and engagement. As broad as it is specific, Greenworks presents an opportunity to approach planning, service delivery and public policy with a new lens. We’re working to involve all our departments, from the leaders like our Water Department and their groundbreaking green infrastructure approach to stormwater management, to less likely champions such as the prisons, where they harness solar power to heat hot water and compost food waste. We recognize the value not only of exciting, cutting edge green initiatives and also of doing the things we already do in new, improved ways. I have become convinced that this is not a passing fad but an essential approach that is here to stay. Sustainability is still a relatively novel municipal responsibility, representing an emerging field that is young but growing rapidly. Local governments are flexible enough to put programs into action quickly, and we can work at the ground level with residents to hear their feedback and harness their energy. In the past ten years, many mayors have realized that sustainability is a powerful framework to address varied issues. Hundreds of cities across the country — from big to small, conservative to liberal — now have related programs and positions. We are scaling innovation through best practice sharing and direct collaboration. For example, the first wave of cities to implement

The Mayor’s Office of Sustainability is developing a green building program that will act as a resource for architects, builders, and homeowners in the city. PHILA.GOV/GREEN

bike share programs are helping the next by disclosing their lessons learned; Philadelphia will benefit from the experiences gained in DC, Boston and Minneapolis and, in striving to enhance access to bike share, we will have a best practice of our own to share back. With resources stretched thin all over, reinventing wheels and staying in our respective silos is becoming a thing of the past. Cities are getting smarter, moving towards systems that align decision making with considerations of resource use and lifecycle analysis. I am not saying that Philadelphia or any other city has it down pat already, but we are making progress in embracing new ways of doing old things. Efficient, equitable cities that integrate sustainability throughout the fabric of their governments will be the cities of the future. I share this here not only as a vision, but as a statement. Philadelphia is poised to thrive as a leading next-generation city. As an old city with great bones — an extensive transit system, walkable neighborhoods in proximity to diverse commercial corridors, a tremendous urban park system — we have a strong foundation to grow from. Over the course of hundreds of years, we have proven able to withstand great changes and take advantage of opportunities. Philly knows how to be resilient. Among the greatest challenges of our time is and will be

the need to “do more with less” and prepare for shifts in resource availability the extreme weather we will increasingly experience. We will be smart to keep this dialogue open and make decisions forward looking decisions now that take these new realities into account and prepare us to land on a competitive edge. During the Mayoral race in 2007, a diverse, community-based coalition came together through the Next Great City coalition to advocate for a ten-point agenda they wanted the candidates to endorse and the next mayor to prioritize. Greenworks is a direct result of their advocacy. This was a vision for where residents wanted the city to go. Hearing from the coalition was a great start to the give and take relationship local governments and residents must maintain. Advocates ask their governments to improve their neighborhoods, and cities provide the leadership to show residents why sustainability measures — ranging from planting trees to reducing greenhouse gas emissions to recycling — add value to their daily lives and to their communities. Philadelphia will prosper by working together to harness the burgeoning energy around this work and to institutionalize these priorities over time. I am hopeful that the sustainability efforts made under the Nutter administration will pass along a program that the next mayor, and the mayor after that, will be proud to build on.

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12 SEPTEMBER, 2013 REGIONSBUSINESS.COM

VISIONS

Real Momentum, And We’re Taking Advantage

Judith M. von Seldeneck is chariman and CEO at Diversified Search. She can be reached at 215656-3550 or at jvonseld@ divsearch.com.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

hiladelphia increasingly has become a great destination to recruit executives from across the nation and the globe because it’s considered a city on a roll. Major companies recently have recruited top executives interested in both the job opportunities and the equally important quality of life in the Philadelphia region. Our restaurants are booming, our arts and culture scene is internationally renowned, our Center City condominiums are getting sold out, and we have all of the big time professional sport teams. Business-wise, there is much happening, including Philadelphia Energy Solution’s expansion of the capabilities of the Sunoco refinery, the natural gas produced by the Marcellus Shale development, the deepening of the Delaware River that will bring more cargo into the Philadelphia ports and, most importantly, more jobs. And it seems every day Comcast has a new announcement! We are also becoming better known as a mecca for startup companies because venture capital investors appreciate our deep talent bench, and our renowned colleges and universities actively encourage new technology to be transferred from on-campus research to a commercial venture. There is an increased focus on incubating and retaining these new companies in the Philadelphia area. Sectors such as healthcare, higher education, not-for-profit, professional services, life sciences, technology, wireless, digital and financial services are all looking for top talent. While the industrial/manufacturing base has all but vanished, knowledge-based and service-oriented businesses provide job opportunities. Amtrak zooms at full capacity between New York and Washington, D.C. and Philadelphia International Airport offers a growing number of non-stop flights, fostering further commerce. The regional business communities are proactive in working with city and county officials to land new companies and keep existing companies growing and expanding. New executives are eagerly embraced by the business community and, once established here, rarely choose to leave because Philadelphia can feel like one of the smallest and most accessible big cities in the United States. The challenge is keeping Generation Y, or Millennials, as they graduate from Greater Philadelphia’s 90 colleges and

universities. Aggressive summer internship programs promoted by the Greater Philadelphia Chamber of Commerce are aimed not only to help inner-city youth but also to expose college students to local businesses and to make contacts for future jobs. Our colleges and universities, especially Drexel and Penn, work with students during career planning and encourage them to consider opportunities in the region. Many suburban companies have developed creative tactics to attract and

NEW EXECUTIVES ARE EAGERLY EMBRACED BY THE BUSINESS COMMUNITY AND, ONCE ESTABLISHED HERE, RARELY CHOOSE TO LEAVE BECAUSE PHILADELPHIA CAN FEEL LIKE ONE OF THE SMALLEST AND MOST ACCESSIBLE BIG CITIES IN THE UNITED STATES.’

keep younger employees, many of whom are living in the city. These Millennials generally prefer to ride their bicycles or walk to work. If they must travel longer distances to work, they choose to use public transportation. As a result, these companies have arranged for low or no-cost shuttle service to meet its employees at stations along the Paoli/Thorndale route. No wonder SEPTA ridership has increase 50 percent over the last 15 years. The idea of telecommuting and virtual offices is a much-discussed subject today and there are strong advocates on both sides of the issue. Today, family-friendly policies and work-life balance is what both younger employees and executives seek. We know teleworking cuts commuting time and its environmental impact, and many studies have documented that productivity increases. This, of course, is a far cry from yesterday’s motto of “first in, last out” each day for ambitious workers who wanted to be on the fast track. Personally, I think a company must be careful to maintain its momentum and

maintain the same quality of work when its key players are not regularly onsite. Yet, for all the flexibility that companies create in work arrangements, today’s technology puts everyone on call 24/7 and it’s a challenge to create boundaries between work and personal time. Worker isolation can be a negative outcome of telecommuting, according to Global Workplace Analytics. This is especially true among people in their 20’s and early 30’s, who appreciate the opportunity to tele-commute but recognize it can lead to professional and social isolation. Some companies today are setting up virtual-only offices, where an account executive, for instance, works from home and travels regionally or even nationally to see clients. You might think that sounds ideal. But we know a Fortune 100 company that just lost a strong and valued Millennial performer because of the lack of face-to-face interaction with bosses and colleagues. His numbers were great and his customers loved him, but his personal satisfaction was low. So he found a new position in a tech consulting firm with a Center City office to go to and colleagues to bounce ideas off. There are many other challenges in attracting and retaining talented workers today. For sure, corporate executives are more reluctant than ever to uproot their families and deal with a housing market that often makes selling their current homes impossible. As a result, some people choose not to relocate and instead commute — not only long distances but even from one time zone to another, going home on weekends. What makes Philadelphia an attractive work destination today is the collaboration among its leaders. To keep Philadelphia moving ahead, what will make the difference in the long term will be continued leadership from the business community, higher education and government officials. Together, these leaders will work together to provide an attractive environment with tax-friendly policies and creative, innovative strategies to link potential new employees with the vast resources the region has to offer. We believe it’s a great time to be living and working in the Philadelphia region. Let the word go out!

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Raising The Curtain On The Next Decade

Michael Dahl is senior vice president of The Pew Charitable Trusts and oversees the Philadelphia program

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

f you want to see what arts and culture can do for a city, put on your walking shoes and take a stroll along the Benjamin Franklin Parkway. Start at the Academy of Natural Sciences of Drexel University and head out past Swann Fountain toward the Free Library of Philadelphia, now formally affiliated with the Rosenbach Museum & Library, creating one of the nation’s preeminent rare book collections. Along the way, you’ll see the Franklin Institute, which will soon include the Nicholas and Athena Karabots Pavilion; the renovated courtyard and grounds at the Rodin Museum and the magnificent Philadelphia Museum of Art. You’ll also pass a new jewel: the Barnes Foundation. The famed collection of post-Impressionist and modern art moved to the Parkway last year, earning bravos from art and architecture critics around the globe. These nonprofit venues, along with a vibrant cultural community throughout the city, merited Philadelphia a spot on Lonely Planet’s top 10 U.S. cities to visit in 2013. The travel guide declared that “Philadelphia is becoming known as an art capital.” It is an important message because as we plan for the next decade, the city’s art, cultural and historical treasures will be essential. Not only do they enrich our appreciation of the aesthetic world, they enhance Philadelphia’s quality of life — attracting new residents and millions of visitors while increasing the city’s economic vitality. The importance of a vibrant cultural scene to the local economy cannot be overstated. The latest State of the City report from The Pew Charitable Trusts’ Philadelphia research initiative noted that Philadelphia is becoming a “test case” for how cities develop in the 21st century. Quality of life is becoming a key element in determining a city’s economic fortunes, some urban planners theorize, because young adults demand it. An appealing setting attracts talented people — and jobs. While Philadelphia’s challenges with its schools, crime and poverty continue, there are many positive developments, too. Center City is bright and alive. Hotels are opening, museum attendance is up and — for the first time in a half century — the city’s population has increased. It grew by 58,897, nearly 4 percent, from 2006 to 2012. Much of that success can be attributed to the city’s improving quality of life, nurtured in large part by cultural activities and the city’s historical assets. The Greater Philadelphia Cultural

ELPADAWAN

Alliance notes that arts and culture have a more than $1 billion economic impact on the region each year. Yet even as the city’s reputation for the arts grows, many cultural organizations are struggling, and some will probably not survive. To thrive, they must think anew about the future and create innovative programming that reaches new audiences and brings financial stability. Supporters of the arts — philanthropists, government officials or corporate leaders — can help foster these new approaches by encouraging strong business models that strengthen cultural institutions for the long term. To encourage a thriving arts community, Pew has developed a strategy that no longer targets specific artistic disciplines but underwrites the most promising work across the cultural spectrum by institutions with artistic quality and leaders who have an ambitious and sustainable vision for the future. We will also help high-performing organizations with the risk capital they need to confront the changing economy, evolving audiences, and an increasingly competitive operating environment. This kind of creative thinking by some in the cultural community is already paying off. The Philadelphia Museum of Art is establishing itself as an active and dynamic public space through exhibits such as “Dancing Around the Bride.” The show combined visual art with music and live dance events for what The New Yorker’s critic called the “most thrilling exhibition I’ve seen in years.” Similarly, Opera Philadel-

phia’s staging of the Pulitzer Prize-winning “Silent Night” represented a successful effort to attract new audiences through contemporary productions. Cultural and civic leaders’ forward thinking helped spur the Academy of Natural Sciences’ affiliation with Drexel University, the merger of the Rosenbach with the Free Library and the relocation of the Barnes, which now are all stronger institutions for the coming decade. The makeover of the newly re-opened Benjamin Franklin Museum is the latest example of a public-private partnership to preserve one of Philadelphia’s cultural and historical treasures. The museum now has a strategic vision and operating plan, and compelling new exhibits that will bring Franklin’s legacy to life for a new generation of visitors. This could not have been done without support from the federal, state and local governments, the Lenfest Foundation, the William Penn Foundation, the John S. and James L. Knight Foundation, and Pew. All of these projects share a theme: visionary leaders and supporters coming together to produce innovative new art and improved cultural venues that are finding growing audiences. Now more than ever, creativity in the cultural community cannot be limited to the artists. It must enliven how the boards and leaders of these organizations think about the future. And it must inspire government, business, community and philanthropic leaders to form the partnerships that lead to success and benefit us all.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

It All Starts With A Shared Agenda F

Steve Wray is the Executive Director of the Economy League of Greater Philadelphia

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

or the past four years, the Economy League’s World-Class Greater Philadelphia effort has been tackling the very question that this issue of Region’s Business is addressing: What will it take for Greater Philadelphia to become and remain a truly World-Class region? We’ve led conversations with more than 1,700 area business and civic leaders in workshops, public forums, interviews, and roundtables focused on establishing shared goals and priority strategies for driving longterm growth and opportunity in Greater Philadelphia. This work culminated earlier this year with the release of three Global Positioning Strategies (GPSes) to focus and guide cross-sector collaboration for regional improvement. These GPSes tackle a broad range of issues within the three regional priority areas of education and talent development, business growth, and infrastructure. The World-Class Education and Talent Development GPS, developed in partnership with United Way of Greater Philadelphia and Southern New Jersey, outlines a shared agenda for improving regional early learning and K-12 education outcomes as well as postsecondary attainment and workforce readiness. The World-Class Business Growth GPS, created in partnership with the CEO Council for Growth, focuses on boosting entrepreneurship, fostering innovation, and strengthening global business connections within the region. The World-Class Infrastructure GPS, developed in conjunction with the Philadelphia District Council of the Urban Land Institute, identifies priority strategies to strengthen Greater Philadelphia’s global and national connections; improve regional mobility; and make our water, energy, and open space networks more sustainable and resilient. All of the goals and strategies presented in the GPSes are available to explore at worldclassgreaterphila.org. In developing this agenda for a WorldClass Greater Philadelphia, we’ve learned a great deal, not only about the opportunities and challenges facing our region, but about what it will take to drive true progress around the issues that matter most for longterm growth and opportunity. For one, we know that in today’s world, we can’t always count on help from the federal or state governments as we might have in the past. And it’s clear that the days when we could look to one organization or sector to tackle big civic challenges singlehandedly are long gone. To be sure, there is no shortage of bright

people and great ideas in the Philadelphia area, but with fewer resources at our disposal to address increasingly complex issues, the old model where each of us goes it alone just isn’t going to cut it anymore. So perhaps the most valuable lesson that we’ve taken from this process is that putting Greater Philadelphia on the path to a world-class future will be as much about what we focus on as it will be about how we mobilize to make it happen. There’s no way around it: Becoming and remaining a truly world-class place is going to require a regional leadership culture that is committed to using collaborative approaches to advance a shared agenda. With the World-Class GPSes in hand, we have an ambitious blueprint for regional growth and opportunity that bears the fingerprints of scores of Greater Philadelphia’s brightest and most engaged leaders (some of whom have penned pieces for this special issue). Now, moving from strategy to action is going to take serious commitment on the part of our region’s leaders to join forces for collective impact.

WE HAVE AN AMBITIOUS BLUEPRINT FOR REGIONAL GROWTH AND OPPORTUNITY THAT BEARS THE FINGERPRINTS OF SCORES OF GREATER PHILADELPHIA’S BRIGHTEST AND MOST ENGAGED LEADERS (SOME OF WHOM HAVE PENNED PIECES FOR THIS SPECIAL ISSUE).’

That is why today we are working to seed lasting collaborations and shine a light on existing efforts that embody the type of collective approach that is a must for driving large-scale, long-term progress. Our strategy development partnerships with United Way, the CEO Council for Growth, and ULI Philadelphia set the tone for ongoing collaboration through the World-Class initiative. And now, early collaborations are demonstrating how coming together for collective impact can yield real results. For example, the Startup PHL initiative,

launched last year as a partnership between the City of Philadelphia and the Philadelphia Industrial Development Corporation, aims to increase the availability of seed-stage capital for startups and accelerate the development of a supportive environment for entrepreneurs. In March, the City selected venture capital firm First Round Capital to manage a $6 million Startup PHL seed fund for Philadelphia-based tech startups and awarded the first round of grants for groups, companies or individuals with promising ideas for boosting Philadelphia’s entrepreneurial potential. These investments correspond directly with two priority strategies identified in the World-Class Business Growth GPS: strengthening entrepreneurial networks and increasing the availability of growth capital. By coming together across sectors, the City, PIDC, and First Round Capital are advancing an innovative approach to fill gaps in the region’s entrepreneurial ecosystem that area startups have long cited as impediments to growth. On the education front, United Way of Greater Philadelphia and Southern New Jersey, the Economy League, the Delaware Valley Association for the Education of Young Children, and the Public Health Management Corporation were awarded a highly competitive grant from the Robert Wood Johnson Foundation to partner on a campaign to speed adoption in Pennsylvania of a standardized statewide system for kindergarten entry assessments. Identified as a top priority in the WorldClass Education and Talent Development GPS, standardized assessments are crucial to getting an accurate picture of the overall preparedness of our children to start school. To build awareness of and support for standardized assessments and high-quality early learning programs, United Way will lead coalition partners in direct outreach to business and civic leadership, school district personnel, state agency and elected officials, as well as parents and family members. These are just a few early examples of what our region’s leaders can do when we work together around a shared agenda. They are small steps toward the world-class future that we know we are capable of achieving for Greater Philadelphia. Models like these are invaluable to spreading and strengthening the culture of collaboration among local leaders. And that’s what we need to make the vision of a World-Class future a reality for Greater Philadelphia.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

How To Build A World-Class Region W

Josh Shapiro is the chairman of the Montgomery County Commission

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

e are fortunate to live in a great region. The question is: How do we achieve “world-class” status? The answer lies in our most precious natural resource — our people — and whether we can be bold, innovative and collaborative in four specific areas. First, government at all levels needs to get its fiscal house in order, focus on core functions and deliver more effective and efficient services in a collaborative and cooperative manner. By doing so, we eliminate wasteful spending and free up capital — your tax dollars — to be invested more wisely while adopting policies that encourage innovation and growth as opposed to red tape that impedes progress. In Montgomery County, we have spent our initial 20 months in office digging out of the fiscal mess we inherited not by having the same old debate between higher taxes and spending cuts but rather focusing our energy on a new approach that saves tax dollars, increases efficiency and invests in our core functions. We used “zero based budgeting” which requires government to ask the fundamental question it should be asking each day but almost never does: “Why?” Why do we spend tax dollars on this or that? Why is this a task of government? Why do we need this real estate, this program, or this asset? How much does it really cost to meet this need? What we found is that by asking “why” government can get to the root of a problem and find creative solutions. We closed a short-term deficit of $10 million (our budget is $407 million) and are on our way to eliminating an inherited $49 million structural deficit. We did this without raising taxes or ending critical programs or investments for our 800,000 constituents. Every level of government can do this, but the question is whether leaders have the will. It means saying no to certain special entrenched interests and those invested in the status quo, then saying yes to the critical investments that can make us a world-class region. Second, it is imperative for governmental leaders across municipal boundaries to work together. It seems obvious, but it is not the typical practice. We can’t just care about the educational system in our township or the crime rate in our county. What goes on in neighboring areas has a direct impact on us and our ability to meet our full potential. Crime in Philadelphia impacts the quality of life in our inner ring suburban communities.

This old Manayunk railroad bridge is the centerpiece of a project jointly managed by Montgomery County and Philadelphia. LOWERMERION.ORG

Corruption in one county stymies choices in another. Philadelphia remains our hub, but the four surrounding suburban counties of Montgomery, Bucks, Chester and Delaware are the critical spokes in the wheel, so we all must work together to get on a roll. The good news is that this is happening at the county level. We routinely work with our neighbors and that cooperation has led to increased funding and preparedness for homeland security, cross collaboration between our community colleges and reduced energy costs for governmental buildings to name just a few of our collective accomplishments. Third, that collaboration is critical when it comes to investing in our infrastructure which is needed if we are to be world-class region. America became a super power and built the largest middle class in the world in the post-World War II period by investing in our infrastructure. Our interstate highway system and mass transit systems were born of this effort and propelled our region to prosperity. Now, as those roads, bridges, rail lines and subways age and begin to crumble bold action is needed. We can make tax dollars go further in this effort by joining together to share costs and leverage buying power. This will allow us to

eliminate overhead and spend more on the necessary bricks and mortar. Not only will this rebuild and improve our transportation systems and infrastructure, but it will create jobs, improve quality of life and sustain local business. Montgomery County and Philadelphia recently agreed on one such project — turning the old Manayunk railroad bridge into a trail that will connect the Cynwyd Trail with the Schuylkill River Trail. We used innovative thinking and grant funding to make this happen. In addition to being a critical link to the trail system in our region, it also will serve as an economic impetus to the Manayunk area by giving more people access to the area. As governmental leaders we should encourage transit-oriented development which gives residents access to every part of the region regardless of where they live. Residents of Conshohocken and Lansdale can enjoy the quality of life in the suburbs and the culture and vibrancy of center city through public transit. This type of development brings young, educated workers into the area which then lures high tech and pharmaceutical companies to our region to capitalize on this concentration of qualified workers. Fourth, we need to get serious about economic and workforce development if we want to compete as a region. Government can’t simply hand out a big cardboard check funded with tax dollars and call it economic development. Our role must be one of facilitator and connector. Public-private partnerships in this economy require private sector dollars, engagement and expertise and public sector strategies to get deals done. We also need to think beyond the construction phase and understand that workforce development is vital to the viability of a project. After all, a new building only grows our economy if workers are inside. We have a tendency to think of our region as five islands when competing for commerce — and that has to end. Governments are used to competing against each other to maintain or find companies. But for us to be a world-class region there are times we must help each other to bring a firm to our region regardless of its zip code. The path to a world-class region starts and ends with our people and the decisions made at this critical juncture. If we exert bold leadership, innovative thinking and collaborate we will realize our full potential.

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Arts In Philadelphia: Now And In The Future

Richard Vague, Gabriel Investments managing partner, is President of the Philadelphia Live Arts and Fringe Festival

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

ith the lightning fast pace of change, the ability to innovate is the most important skill a city can have. In fact, it’s the most important skill any institution — whether a business, university, hospital, city, or even country — can have. Unlike in generations past when the status quo was often enough, today the ability to innovate is often the only way a business or city can survive, much less thrive. And art is all about innovation. That is just one of the many reasons an arts community is so vital to any city aiming for greatness. It helps imbue a city and its businesses and institutions with the spirit of innovation, and it is vital to attracting and retaining innovative people in every walk of that city’s life. Philadelphia has an almost unmatched trove of artistic treasures from the past — as seen in spectacular places like the Philadelphia Museum of Art and the Barnes Museum. But the coveted spirit of innovation is driven even more by new art and the artists living and working in our city today. The paintings and music and theater and dance they create bring excitement to the city so that more people want to move here — and stay here. And the more we have, the more of a magnet we become. A vibrant arts community, in addition to helping imbue the community with the spirit of innovation, brings ancillary benefits. Artists open galleries, gentrify homes, and open coffee shops and restaurants. They move into frontier neighborhoods within a city and transform them. I am thrilled to report that Philadelphia abounds with new developments in its creative community. In October, FringeArts will move into its new building on the Riverfront which will enable it to expand beyond its sixteen day festival to bring leading edge theater and dance to audiences year round. Pig Iron Theatre Company has recently launched the exciting new School for Advanced Performance Training. We are witnessing the rise of the powerhouse arts school. PAFA is an institution with a renowned legacy. The University of the Arts has emerged as a critical hub for our creative community. Drexel’s Westphal Center is a now a world-class design center with facilities

to match. Tyler School of Art is expanding its programs and its newly named gallery, “Temple Contemporary,” is becoming known for out-of-the-box programming. We see the continued development of our regional theaters — the Arden just opened the Hamilton Family Arts Center, the Wilma is offering training to a talented core group of actors by world-class theater artists, and People’s Light and Theater continues its strong offerings. And we have a burgeoning small theater scene. The Lantern had record attendance in 2013. Inis Nua Theatre Company, Theatre Exile, Azuka Theatre, 1812 Productions, and InterAct Theater Company are all vibrant. Philly Improv Theater has a new year around home at the Adrienne. We see the embrace of innovation and

experimentation by our treasured Orchestra, Opera, and Ballet — including the Orchestra’s collaboration with FringeArts on Rite of Spring. Opera Philadelphia’s Opera in the City Program produces opera in unexpected places and will be co-presenting Avant opera, Svabda, at the FringeArts Center in November. And we have the dynamically led Black Pearl Orchestra. We see the increased presence of new, contemporary public art in places like Dilworth plaza and the Delaware waterfront. The number of music venues in our city is growing dramatically — Johnny Brenda’s, Morgan’s Pier, Union Transfer, World Cafe Live, TLA, and Penn’s Landing among others — and more halls planned including the restoration of the old Met on North Broad. The indie music scene is immense. XPN launched “The Key” created specifically to cover the local music and many websites have

followed suit. The Philadelphia Film Society is launching a new home for Film and Filmmakers at the Roxy Screening room. Partners for Sacred Places is helping many low-to-the-ground artists find great performance space in old churches. In the visual arts, the Chinatown/ North Chinatown and Fishtown areas have seen an increase in both commercial galleries and artist-run spaces. The 319 North 11th Street building has seen strong growth in the number of artist run spaces and First Friday attendees. Crowd-sourcing events are also on the rise. Attendees vote and have a direct say in the proposed projects. Events include: Philly Stake , Small Stakes, PhilaSoup, Philly SEED, and Breaking Bread at Fleisher Art Memorial. The 215 Festival promotes cutting edge new literature. The Philadelphia Photo Arts Center, which operates in the Crane Arts Building, has seen great success with Philly Photo Day. Philadelphia has a wonderful foundation community supporting institutions and individual artists — with William Penn, Pew, Lenfest, and Independence leading the way, and growing support from the business community, with leadership from the Art and Business Council, the Cultural Alliance and GPTMC. With this list, I know I’m inadvertently leaving many worthy things out — and will get scolded by friends for those omissions. But my lapse only underscores our happy problem — the abundance and variety of our current arts scene. If you choose to check out any of the things mentioned here, don’t be discouraged if you find some less-than-great art mixed in with art that is wonderful. Creating new art is always a miss-and-miss-and-occasionally-hit proposition. Instead, dig in and help — volunteer, attend performances and events, join boards, purchase new works, and contribute financially. Artists thrive on the encouragement and support of their communities. What will the arts scene be like in Philadelphia in the future? All this. And much, much more. The new arts scene in Philadelphia is exploding. It will only accelerate from here.

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Getting Our Venture Due In Philadelphia

Stephen J. Andriole is the Thomas G. Labrecque professor of business technology at Villanova University’s School of Business

Philadelphia (left) doesn’t get nearly as much credit as a VC hotspot as its California counterpart, San Francisco (right).

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

hen someone asks you to geo-associate with innovation and entrepreneurialism, you will probably name San Francisco, Boston, Austin, Los Angeles and New York, among a few others that have developed the intellectual and financial infrastructures necessary to repeatedly incubate new ideas and launch new companies. But if you ask the same people about the Philadelphia region, very few will identify us as entrepreneurial, innovative or in any sense a hotbed of venture activity. Why not? Are we actually entrepreneuriallychallenged? Or do we just have an image problem? I have never understood why the Philadelphia region seldom — if ever — makes the list of most innovation/entrepreneurial regions. I just searched Xconomy (xconomy. com/cities) for their list of entrepreneurial regions. They identify Boston, San Francisco, New York, Seattle, Boulder/Denver, San Diego, Austin/Other Texas — and Detroit. But not Philadelphia. Entrepreneur (entrepreneur.com) identifies over 30 VC firms within a 50 mile radius of Philadelphia. New York has 100. But as a percentage of population, Philadelphia has twice the venture capital that New York has. If we expand the search beyond the United States for start-up activity (betakit.com), we find that Tel Aviv, Toronto, Vancouver, Paris, Sydney,

Sao Paulo, Berlin, Moscow, Melbourne and Santiago all out-venture Philadelphia. But should they? If you look at the “start-up/build out” cities and their surrounding regions you will always see a network of excellent universities, the availability of (all-stage) venture capital, a seasoned venture legal community, active angels, a network of serial entrepreneurs, a deep high technology talent pool, an array of companies excited to work with start-ups, and a history of successful “exits” through acquisitions and IPOs. When all of these exist — as they do in San Francisco, Boston, Austin, Los Angeles, New York and Philadelphia — there’s innovation and entrepreneurialism. So why don’t we make the lists? We have a superb network of colleges and universities. Many of our colleges and universities are world-class — and entrepreneurial. Drexel’s entrepreneurial initiatives (the Close School of Entrepreneurship, the Baiada Institute for Entrepreneurship and Drexel Ventures), Villanova’s Center for Innovation, Creativity and Entrepreneurship (the ICE Center) and Temple’s Innovation & Entrepreneurship Institute in the Fox School of Business, among other university initiatives, clearly demonstrate a commitment to innovation, entrepreneurialism and commercialization. We have serial entrepreneurs — like Mike Hagan, Vince Schiavone, Josh Kopelman and Jon Brassington — and

GAREN MEGUERIAN (LEFT) AND SALIM VIRJI

we have VCs — like first Round Capital, NewSpring Capital, Ben Franklin Technology Partners of Southeastern Pennsylvania, Comcast Ventures and Safeguard Scientifics — that know how to build companies and make money. We have big exits (pehub.com) — like Nutrisystems (NewSpring Capital), Jive (First Round Capital), Tengion and NuPathe (Quaker BioVentures). We have relationships with corporate partners, and we have a significant technical talent pool. We have talented venture attorneys at firms like Morgan Lewis and Pepper Hamilton, including legendary venture legal gurus like Steve Goodman and Barry Abelson. So what’s the problem? Why does the Philadelphia region fail most of the geo-venture tests? There are tangible and intangible reasons for our position in the innovation/ entrepreneurial world. On the tangible side, we need more seed and early-stage private equity venture capitalists. While we have a relatively vibrant angel community, we have too few venture funds willing to back too few start-ups. Many of our private equity venture capital firms are later-stage investors; some have abandoned seed and early-stage investing altogether. We’re left with only a handful of firms that specialize in seed- and early-stage investing (entrepreneur.com). We also need dour Contregional venture firms to loosen up a little! The term sheets we see from West

Continued on page 48

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

ULTIMATELY, WE NEED A POROUS INFRASTRUCTURE OF COMPANIES, FUNDS, UNIVERSITIES, ENTREPRENEURS AND TALENT. WHILE WE HAVE A FORMIDABLE ONE NOW, WE NEED A WIDER AND DEEPER INNOVATION AND ENTREPRENEURIALISM INFRASTRUCTURE.’

Coast VCs are less restrictive and “protective” than the ones we sometimes see on the East Coast. Our VCs — as wonderful and successful as they are — might take a few more chances than they’re prone to take today: many of our VCs are decidedly more conservative than their West Coast counterparts. They might also rethink their valuation models. Many entrepreneurs know that they’re likely to get a higher valuation for their companies on the West Coast than the East Coast (venturebeat.com/2011/08/17/fenwick-vcreport/). We also need our colleges and universities to credentialize emerging technology trends. We need more schools — like St. Joseph’s, Drexel and Villanova — to focus on areas like business intelligence, big data and analytics. We need many more courses, certificates and whole degree programs in social media, the internet-ofthings, location-based services, mobility, bioengineering and cloud computing that create the necessary intellectual talent for the start-up and early-stage venture communities. The educational programs need to reflect current, emerging and predictable longer-term technology trajectories. The programs need to be anticipatory and proactive, like many of the programs at schools in the highly-ranked innovation

and entrepreneurial regions. We need whole programs in innovation and entrepreneurial management as well, where an “A” is given for a strong business plan vetted with regional venture professionals. For most of these initiatives, Stanford is a good model. Our corporate partners need to increase their financial and human commitments to innovation as our universities need to connect the dots among expertise, funding and partnerships: there’s no better place to encourage entrepreneurs than a campus with direct links to multiple corporations and a venture infrastructure. The Philadelphia region is home to lots of information technology (IT), financial services and pharmaceutical companies. These companies should be more active in the venture incubation and investment worlds. They should be working closely with area colleges and universities — and the entire venture community — to seed ideas, talent and start-ups. They should — along with university administrators — encourage and financially support professors (at all levels) to incubate technologies and build companies. Professors should be professionally rewarded for their entrepreneurial activities, not just their entrepreneurial lectures. Ultimately, we need a porous infra-

structure of companies, funds, universities, entrepreneurs and talent. While we have a formidable one now, we need a wider and deeper innovation and entrepreneurialism infrastructure. Everyone needs to help jump-start this objective — the politicians, university presidents and deans, entrepreneurs, local and regional companies, angels and our venture capitalists. On the intangible side, we need a mindlift. We need to think like entrepreneurs and we need to swagger. The Philadelphia region’s track record is extensive. Pete Musser’s record alone makes the regional reputation! NewSpring Capital’s, First Round Capital’s and Quaker BioVentures’ — among other firms’ — successes are way, way under-publicized. We don’t link enough; we’re still islands of expertise. We need more national and regional meetings. We need to advertise and communicate. We need image consultants. We need a venture brand. We’re almost there. We need to formalize the evolution of the venture infrastructure development process. Because we’re not on the right geo-lists, we have targets to hit — which we can do without a whole lot of practice. We’re already pretty practiced. Just look at the record. Some tweaking is all that’s necessary to get us on the right lists.

12 SEPTEMBER 2012 REGIONSBUSINESS.COM

VISIONS

Are Polymaths Key To Region’s Future?

Bill Weaver is Professor of Integrated Science, Business and Technology at La Salle University.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

In the 15th century, conventional wisdom said it was impossible to sail east by sailing west. In the 16th century, conventional wisdom said it was impossible to reform a politically-corrupt church. In the 17th century, conventional wisdom said it was impossible for the Earth not to be the center of the universe. In the 18th century, conventional wisdom said it was impossible for colonies to break free of the British Empire. In the 19th century, conventional wisdom said it was impossible to abolish slavery. In the 20th century, conventional wisdom said it was impossible for man to fly. Conventional wisdom says a lot of things. The meaning of life is to prove conventional wisdom wrong. In a publication from 1592, author Robert Greene famously used the figure of speech, “Jack of All Trades” to dismiss a young William Shakespeare as an upstart “actor who has the temerity to write plays.” I can’t claim to speak for every high school literature class, but I’m pretty sure students continue to study the works of Shakespeare and not Greene. Perhaps being a “Jack of All Trades” is a good thing. In his biography of Benjamin Franklin, H. W. Brands bestows the title of “The First American” upon this famous Philadelphian who succeeded as a leading author, printer, shopkeeper, accountant, political theorist, politician, postmaster, scientist, musician, inventor, satirist, civic activist, statesman, and diplomat as enumerated by Wikipedia. Although not as well known as the Jack idiom, the term “Polymath” is often used to describe remarkable humans who excel across disciplines that conventional wisdom ascribes as being “separate” and “different”. The list of famous Polymaths includes Leonardo da Vinci, Michelangelo, Galileo, Copernicus, Isaac Newton, John Locke, and Franklin. Modern examples include Wilbur and Orville Wright, who were successful businessmen, printers, editors, publishers, and bicycle designers before inventing powered human flight. Thomas Edison, who holds 1093 U.S. patents, worked in areas that included telecommunications, electricity, recorded music, motion pictures, x-ray machines, and microphones, while publicly sharing his religious thoughts on deism, supporting the non-violent use of his inventions, and proposing amendments to the Federal Reserve Banking System.

Steve Jobs and his groundbreaking developments at Atari, Apple, NeXT, and Pixar have recently been documented by Walter Isaacson’s excellent biography and the motion picture starring Ashton Kutcher. So where are all of the Jacks? Each of these famous Polymaths has given birth to entire epochs of discovery and industries that were enabled by their developments. Many of the increases to our standards of living, health, safety, and employment opportunities can be traced directly to these Jacks of All Trades.

IN THE 20TH CENTURY, CONVENTIONAL WISDOM SAID IT WAS IMPOSSIBLE FOR MAN TO FLY. CONVENTIONAL WISDOM SAYS A LOT OF THINGS. THE MEANING OF LIFE IS TO PROVE CONVENTIONAL WISDOM WRONG.’ Perhaps our Philadelphia Region would benefit from more Jacks. La Salle University developed an interdisciplinary major titled Integrated Science, Business, and Technology (ISBT) in 2000 in an experiment to discover if Polymaths could be cultivated by Nurture in addition to Nature. While designing the first courses, colleagues pointed to the common wisdom that held the purpose of higher education was to produce needed highly-trained specialists, particularly in the areas of Science, Technology, Engineering, and Mathematics (STEM). Existing specialists asked which of the “S”, “B”, or “T” disciplines in the major’s name was the most important as there was not enough time to cover “everything” in the four years of an undergraduate education. Working scientists, engineers, business leaders, and project managers in the region pointed to the importance of needed “I”, integration, and asked for its emphasis. What we have learned since our launch is that the social networking and personal communication technology that has emerged over the past decade has enabled interdisciplinary teams that integrate their expertise and design ideas in the development of new products and the solution of

difficult problems. Instead of waiting for the once-ina-century Polymath mind to be born, technology-enabled, multi-minded interdisciplinary project teams can collaborate in real time across any distance to bring needed diverse perspectives to multi-faceted projects. Our ISBT graduates are successfully utilizing their skills in collaboration and project management in the various industries across our region, ranging from energy, information technology, and pharmaceuticals, to manufacturing, regulatory affairs, the health professions, and risk analysis. And our ISBT experiment is revealing an additional quality. Our students study facts and examples drawn from the various scientific disciplines of energy, materials, information, and the life sciences, the various design disciplines that integrate these scientific discoveries into products, and the various project management and business processes that enable success. In short, they study the collection of subjects that define a Polymath, rather than those that define a subject specialist. Around the second year of their ISBT studies, we can virtually hear an audible “click” in the classroom — that “aha” moment when the conventional wisdom of differences gives way to an integrated understanding of connections among components of the systems under study. We have discovered that our “Polymathsin-training” propose solutions and inventions that only emerge from the insight gained from an understanding of the various disciplines. Our ability to provide a Polymath education is enabled by the just-in-time information delivery of the Internet. Without the ability to instantly search for facts, values, existing technology, and emerging developments, four years would not be enough time to work through traditional case studies and textbooks. Because the Internet is not only available at the University, each of us can design our own Polymath education. Indulging a hobby, taking a free class online, learning a new foreign or computer language, joining a debate on a social network, providing grassroots support for a political movement, video-chatting with a shut-in; these are things that can remove the conventional wisdom that bonds us to our daily grind and can help us to become masters of our own happiness.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

A Vision For A Unified Philadelphia

Dana Spain is an entrepreneur and a philanthropist.

STEVE ENG

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Regionâ&#x20AC;&#x2122;s Business.

hiladelphia is a city of diverse neighborhoods spanning a broad spectrum of social and economic differences. Such diversity, if found in a city with ample opportunity for success and robust job growth, can be a foundational strength creating pride and hope for a brighter future. Diversity in a city which lacks broad opportunities for its citizens to learn, grow, and prosper, such as Philadelphia has become, can lead to turmoil, division and violence. It is with this in mind that I share my vision for Philadelphia; a unified city where citizens band together to create opportunity and growth, where our many differences become our core strength and unite us by a common thread: we are all Philadelphians. Our city needs to be the driving force of this region; a treasured destination, a place where those living here no longer look past its boundaries to greener pastures, but rather view this great city as an exciting, dynamic and thriving urban environment that sets the standard for neighboring counties and shows cities nationwide the path to recovery and revitalization. Maybe we have forgotten the wealth of assets our city has to offer. Our hospitals and universities attract people from around the world to our state-of-the-art healthcare systems and internationally renowned institutions of higher education; our arts and culture are unsurpassed in the nation; our

historic monuments, streets and artifacts tell the story of the birthplace of freedom; our restaurant scene is talked about as one of the finest in the country. We are a city of firsts: the first lay-in hospital, the first zoo, the first bank, and the largest inner-city park system in the world. We have lost sight of these assets as the deep morass of issues facing the city overshadows them. The headlines remind us daily that Philadelphia is heading in the wrong direction; they strip away our city pride. To be proud of our cityâ&#x20AC;&#x2122;s schools we need more access to school choice and charters as well as community involvement such as being done with Friends of Chester Arthur (http://friendsofchesterarthur.org/), where area residents, not just parents, have banded together to improve the school itself and work with Superintendent Hite to offer better facilities and programs to students. To turn the entire system around, we start by auditing the school district which has not been done since the School Reform Commission was founded in 2001. Instead of borrowing money to fund the system without knowing where the existing budget is being spent, we must do due diligence to mitigate waste and distribute funding where it is needed; to the children in the form of supplies, programs and renovations on our aging school facilities. We need to redesign our public school system and allow parents a choice of innovative, academically competitive and safe schools. We must

reward educators who truly make a positive impact on our children and hold those accountable who do not. Although under the direction of Police Commissioner Charles Ramsey the violent crime rate has been decreasing, we still underfund the very force that is meant to protect our city. As proof of our current situation, Philadelphia rates a 9 out of a 100 in city safety (that means we are safer than just 9 percent of cities nationwide). Philadelphians have a 1 in 84 chance of being a victim of violent crime (the national average is 1 in 282) and a 1 in 26 chance of being a victim of property crime. Safe streets must be our priority; a city cannot attract residents and businesses which create jobs and a tax base without first offering a safe place to live and work. Our police force must receive the training and equipment they need to combat crime. Budget constraints are offered as a reason we cannot accomplish this but we must ask again, where is the money going? Under the guidance of Commissioner Ramsey, we built a real time crime center; a major achievement. Less than two years after its unveiling, approximately 50 percent of the cameras are not functioning; this undermines the ability of the police to effectively monitor and address crime, and create an effective deterrent. We must offer our police force every tool necessary to provide safety for our residents as well as to keep themselves safe while protecting our streets. Our fair city faces a never-ending budget

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS crisis stop-gapped by “temporary” and continually oppressive tax hikes rather than by sound strategic economic solutions. To fulfill our full potential from tax revenue collected we must investigate the inefficiencies of each governmental agency to provide better services for all of Philadelphia’s hard working citizens, not just the privileged political elite. We must evaluate the underutilization of staff, and streamline processes for businesses to obtain licenses and permits, and provide tax incentives to open, maintain and grow their businesses. We must also have efficient, easy-touse systems in place for people to access public services; customer service to taxpayers is key to a well-functioning city. We must build a budget with a foundation of sound business practices to immediately reduce expenses and waste while increasing long-term revenue sources. Twenty-seven percent of our neighbors live in poverty without programs in place to break the cycle; all

while the politically connected receive perks, patronage jobs and tax breaks. We must engage employers in a citywide job training effort which offers internships and job readiness skills to our unemployed through publicprivate partnerships. But job training is not enough; our citizens yearn to live in clean, safe areas. To affect this turnaround, we need to sell off the city properties which add to neighborhood blight, and return that revenue, from sales and/or property taxes, directly into the respective neighborhoods to clean up streets and empty lots, create green spaces, renovate buildings and reopen recreation centers for both children’s after school and adult education programs. We must reverse the continual decline of our city before we follow Detroit into the abyss of bankruptcy and hopelessness. Philadelphia has a $9+ Billion pension obligation of which only 47 percent is funded. This is not going away; we must have a sound strategy to fund our obligation by being fiscally conserva-

tive, efficient with tax revenue and honest about the reality of the situation we have inherited. Fortunately, it is not too late to change course, but some tough decisions need to be made to affect positive solutions. It is time to recapture our position as a leading and innovative city; time for Philadelphians to come together as a united force to demand fiscal responsibility and forwardthinking policies. It is through this unification that we will foster cooperation among neighbors and rally each other around all that is great about our city. We must unite to reclaim Philadelphia’s place in history as a city of firsts by reshaping the future of our economy, our schools and our streets. Achieving this vision requires bold, decisive leadership to bring together the various cross sections of our city in support of a common goal. In order to envision Philadelphia’s potential to be the world-class city it was founded to be we must break free from the notion that the status quo will

never change and embrace the aforementioned common sense solutions that will ignite the engine of Philadelphia’s prosperity. A new generation of leadership, unconnected to the political machine’s status quo must command the helm of our government to implement these solutions. By unifying and demanding a change of course, we will return Philadelphia to a modern version of its past glorious and dynamic stature. We will return to a place where all of our citizens are afforded the opportunity to prosper and grow in a thriving private sector, robust with job growth; a place where we feel safe walking through our neighborhoods, playing ball in a park or window-shopping in the evening. A place to learn, to start or grow a business, to live, raise a family; a place where we are all proud to call home. By unifying together we can achieve this vision and look forward to a bright future as we confidently and proudly proclaim to the world, “We Are Philadelphia!”

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Migration, Momentum Key To City Growth

n my 32 number of years in the construction industry and serving as Principal and Vice President of P. Agnes, I have seen waves of change in the City of Philadelphia and have been happy to play a part in the City’s growth. When thinking about the future of this great city, I found it hard to picture what may happen in the future. There are great challenges and opportunities ahead. Patrick S. Pasquariello III is founder of P. Agnes, Inc., and is also on the Board of Directors with the GBCA and serves as Treasurer.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

Increase Costs Meet Low Rent The construction industry has been faced with a number of obstacles with the state of the economy over the last five years. Construction costs continue increasing each year, making projects on the drawing board vulnerable to making budget. Some projects struggle to move forward, especially office and apartment projects, because rent numbers are too low to make a profit. What’s the result? I imagine we’ll see smaller projects progressing more rapidly in the queue, while larger, more complex projects will lag. Driving Growth Via Non-profit Institutions Two areas of the city building at a swift pace, and will likely continue to flourish, are University City and North Broad Street. The University of Pennsylvania continues to improve existing buildings, with a large number of hospital buildings expanding and new ones being erected to connect to them. The Children’s Hospital of Philadelphia is expanding its campus further along Civic Center Boulevard, with new buildings being constructed in a way that will allow them to go higher if there is a future need to expand. Pedestrian bridges are being added between buildings to make the campus more userfriendly for patients, doctors and staff. And for the past few years, Drexel University has seen a steady increase in freshman enrollment and has added building capacity to accommodate the growth, including two new student housing developments at 32nd and Chestnut. North Broad Street has seen a lot of growth in the past few years, especially on the Temple University campus. Well-known names like Bart Blatstein, Steven Starr and Marc Vetri are heavily invested in new retail and residential projects just north of City Hall, bridging the gap between the city and Temple University.

Condominiums on Walnut Street

Migration to the City Young people are coming back to the city. Real estate values are increasing and the Center City borders are pushing south into South Philly and north into the Northern Liberties area. Restaurant and retail growth in these neighborhoods are benefiting

CONDO PROJECTS ARE THRIVING WITH EMPTY NESTERS SEARCHING TO LIVE IN THE VIBRANCY OF DOWNTOWN... PHILADELPHIA HAS SO MUCH TO OFFER...

directly and, in my opinion, will continue to flourish as apartment buildings fill up. Young people aren’t the only ones returning to the city. Condo projects are thriving with empty nesters searching to live in the vibrancy of downtown. Walkability is key, and Philadelphia has so much to offer in terms of entertainment, shopping and dining. Philadelphia is now drawing back those who moved to the suburbs years ago. The downtown market can only absorb these projects if more jobs are brought back into the city. If not, the growth rate will once again stagnate. The people migrating to the city are looking for the high-end finishes

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only available in new construction projects, including upgraded finishes, more amenities and better parking ratios. Business-friendly Tax Structure Some additional factors that will impact the growth of Philadelphia over the next 10 years are the business taxes and the 10-year tax abatement. There’s plenty of talk about it, but no changes have been made. The 10-year tax abatement sparked significant growth in this city and, if we want it to continue, it must stay in place. With construction costs increasing, this is one of the things that can make or break the budget for developers and owners. Take away the abatement? You take away new projects, and that takes away jobs. That being said, we need to make this city more attractive for new companies to relocate and create job growth. The city needs to take a hard look at the tax structure and figure out a way to make more public funds available to attract new business. I recently read that no new companies have relocated their corporate headquarters to Philadelphia in over a decade and we can’t continue to lose that business to other cities. Momentum is Key I love this City. I love being a part of its ever changing façade. We’ve been building good momentum in recent years, and I hope to see these changes start to take place so we can keep it going for the next 10 years.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Capitalizing On Existing Capital A Bold Step

Anthony Hardy Williams, a lifelong resident of West Philadelphia, is serving his fourth term in the Pennsylvania Senate

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

ith laser focus and investment, we can honestly bring this city and this region to true global standing, without pie-in-thesky talk but with targeted planning that understands what we have and where we are. Today we are the poorest big city in the nation, and have the accompanying dysfunctional tax structure and educational system to match. But countering and correcting that trajectory for tomorrow isn’t an impossible, or even endless, charge. It’s highly doable. Now. We start by realizing utopian pursuit of corporations needs to cede to more refined approaches. American firms are flocking toward their best deal, no matter their nation of founding, as Harvard Business School’s U.S. Competitiveness Project lays out in devastating detail. Educated workforces and research and development are highly considered factors in site selection, but increasingly so is City X in Country Y zapping business taxes for Z years. With clear responsibilities to our school children, retirees — second highest unfunded pension liability among the nation’s largest cities, according to Pew research — roads and more, that’s a merrygo-round we cannot realistically engage or compete; we have to fight smarter, by aligning core industries whose resources and livelihoods are inextricably tied to this region. While we’ve long paid attention to our “eds and meds” for innovative economic generation, we also should turn our eyes to energy, the Port of Philadelphia and biosciences — growing, terrestrial sectors with limitless potential. Natural gas has more than doubled in production since 2011 and stands to overtake coal as the leading energy export, solidifying this business and the opportunity for Philadelphia to play a vital role in it. The Energy Training Center, a partnership with the U.S. Department of Labor & Industry, the Marcellus Shale Coalition and Community College of Philadelphia, is an example of matching regional interests with local need and intentionality. This initiative that will prepare residents for a host of supply chain jobs, particularly relevant when aspects of the field has had jobs go unfilled and 20 percent fewer Pennsylvanians qualified for work due to a lack of training. It’s well worth adopting best practices and responsibly integrating shale gas into our long-range portfolio, given its status as an economic feeder. It’s certainly not a resource to be

shunned, as neighboring New York and Ohio continue to work to harness its wealth. Moving its related components, as well as other energy sources like liquefied natural gas, naturally pivots to our port, an asset whose vitality can be revived. Not only is our current ranking below Delaware, but our productivity has fallen by 6 percent from 2011 to 2012, according to the American Association of Port Authorities. That the 5th largest city has the 28th ranked port points to opportunities for market gain. In the biosciences, we’ve established a workable, resilient bastion of employment even amid a horrific recession, and need to keep pushing forward. This is a field where average wages are nearly $83,000 and career ladders extend from those with high school diplomas to those possessing PhDs. Already some 1 in 6 jobs in our region stem to this industry, among the top 5 in country. Strategic collaborations between industry and government would hasten convergence and capitalization of breakthroughs on the scale of decoding the human genome, from revamped training curricula to tax credits. Such tailored investment would further expand our job base. There’s no reason the hub of the Brain Activity Map Project that President Obama announced shouldn’t be located here. Of course, focusing on these sectors can’t come at the detriment of trying to attract others, and with innovative regionalization, we can put ourselves in a stronger global

position to challenge other cities for emerging firms. Southeastern Pennsylvania, with the combined expanse of expertise and land found in Philadelphia, Montgomery, Delaware, Chester and Bucks counties, would be one of the most formidable in the nation, if not world. That could be gained with a group re-think, say how we land businesses. Replacing individual county licensing and inspections offices with one regional center working with Select Greater Philadelphia, for example, would help prospective companies navigate and land in the region effectively in a onestop shop. It’s the kind of coordination whose inherent outgrowth would include big-ticket global events as well, such as a future Summer Olympics. Baltimore and Washington, D.C. metro areas are twinning their strengths for a 2024 bid. SEPA reasonably could, too. Lastly, it’s critical that we cultivate new, organic industries with intention, instead of them developing in spite of existing policies and planning. Video gaming, for example, is the fastest growing corridor in the entertainment industry, generating more than $10 billion in receipts annually according to NPD Group. With our vaunted arts and engineering programs and relatively low overhead, it’s no wonder some fledgling outfits have started to call this area home, thanks to work at Drexel and Penn. What is surprising is that there’s been no coordinated campaign to retain and grow this and other youth-driven creative economies, as Austin and Boston have. That must change. Philadelphia often is assailed for its episodic violence and lackluster K-12 outcomes, issues I’ve spent years working to address. But these are byproducts of intransigence and diminished opportunity that have existed for too many generations, fostered by well-intended, though meandering policies that were largely divorced from any economic vision for the city and region. This city, this region, can flourish. But not if we continue to accept double-digit unemployment rates for 4 in 10 Philadelphians. Or city high school graduation rates where only 6 in 10 receive a diploma, and just 1 in 4 hold a college degree. Or that 1 in 3 children lives in poverty. We have to retool our human capital, and by extension, our collective bottom line. Past efforts relied heavily on a social programmatic approach; it’s time we try an economic one — and stick to it. We have plenty to gain if we do.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Destination Philly: Where We’ll Be In 2023

Meryl Levitz is president and CEO at the Greater Philadelphia Tourism Marketing Corporation.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

More parks. More trails. More festivals. More food. More bikes. More beer. More chefs. More shops. More art. More alfresco dining. More music. More magic. That’s how we at the Greater Philadelphia Tourism Marketing Corporation (GPTMC) envision Philadelphia 10 years from now. In 2023, we expect this great city of ours to still be delivering big on our brand promise of “independence” — a promise derived from these brand components: authenticity, accessibility, discovery, fun and history. We expect new attractions and amenities to appeal as much to residents as they do to visitors. We expect a city that’s accessible and well connected to the surrounding counties. And above all, we expect residents and visitors to relish their ability to live, work and play in a city where independence is encouraged and creativity is valued. How do we get there? How does Philadelphia continue to fulfill its promise? Let’s first consider the city’s recent past. Philadelphia has come a long way since GPTMC began branding and advertising it in 1997, and we have the numbers to prove it. In 2012, we welcomed 38.8 million domestic visitors to Greater Philadelphia—that’s 12 million more than in 1997. Since that time, overnight trips to the Philadelphia region have grown four times faster than the national average, and downtown leisure hotel room nights have increased by a whopping 228%. Clearly, our efforts are working. But to ensure visitation numbers continue to increase, hotel room nights continue to grow and the city continues to thrive in the next 10 years and beyond, we must continue to brand and market the region in a powerful and consistent way and give consumers reasons to visit over and over and over again. Embracing Our Authenticity In Philadelphia, everything is real — our storied streets, our buzzed-about restaurants, our emerging art galleries, our independent shops, our intimate music venues, our plentiful parks and our annual festivals. Perhaps most authentic of all? Our people. We’re a proud and passionate bunch, and we have good reason to be. There’s a confidence in the way that Philadelphians talk about their beloved city these days, and they’re sharing these thoughts often and energetically on Facebook, Twitter, Instagram and all over social media. Their message is clear: Philadelphians love Philly. It’s a hometown name they spout off with

great, great affection. And by projecting this confidence and affection to the world, they’re enticing friends and family to come see what all of the buzz is about. So Philadelphians, stay proud and stay loud. Showing The Love, Feeling The Love We’ve been showing the love to visitors since GPTMC’s inception in 1996. Our most recent love-inspired campaign, With Love, Philadelphia XOXO, has proven to be one of our most popular and recognizable efforts to date.

WHEN PEOPLE ARE PASSIONATE ABOUT A BRAND OR A PLACE, IT BECOMES PART OF THEIR LIFESTYLES, AND PHILADELPHIA HAS AN OPPORTUNITY TO EMOTIONALLY ENGAGE...’ The ads — personalized love letters really — convey a warmth that people want to feel when they visit a destination. And when we tested the ads on a focus group recently, participants connected to the letters, calling them “personal,” “friendly,” “inviting” and “witty.” Consumers aren’t just saying nice things about our love letters though, they’re taking us up on our invitation to visit. In fact, for every $1 spent on the With Love campaign, we generated $100 in visitor spending. As we evaluate With Love going forward, we’ll consider the emotional and economic impact of the popular campaign to develop a refreshed advertising effort that continues to be customizable, continues to tout the region’s best assets and, most importantly, continues to bring visitors to the region. Discovering The New Philadelphia Over the past 15-plus years, Philly has added dozens of major new attractions and events — from sports stadiums and historical attractions to art museums and boutique hotels to neighborhood parks and miles-long trails. None of these great amenities have a “Visitors Only” sign — the more people visit, the more vibrant the region. And fortunately, there’s plenty more on the horizon to keep residents and visitors in a perpetual

state of discovery: the just opened Benjamin Franklin Museum, FringeArts theater space (Fall 2013), the transformed Dilworth Plaza (2014), an expanded Franklin Institute (2014), Bike Share Philadelphia and continued development along the Delaware and Schuylkill Rivers. These new attractions and amenities add to the city’s strong identity in history, arts, food, beer, music, festivals, sports and outdoor activities. Together, all of these offerings combine to show off a vibrant, evolving, energetic town where there’s always more fun to discover. Making Lifestyle Marketing A Must When people are passionate about a brand or a place, it becomes part of their lifestyles, and Philadelphia has an opportunity to emotionally engage audiences based on how they live. In recent years, the city has acquired lifestyle-focused hotels — also called boutique brands — that have evolved with the changing tastes of travelers, and more are on the way. The city has evolved too and can now tailor its messages to personal tastes in pop culture, the arts, fashion, home décor, dining and nightlife. As we move ahead, the city must continue to inspire confidence in private-sector investments, encourage public/private partnerships that focus on transformative endeavors and reach out to thought leaders, cultural entrepreneurs and business professionals passionate about moving Philadelphia forward. Investing In The Future Of Philadelphia Philadelphia is delivering on its brand promise of “independence,” and we’ll continue to welcome visitors here over the next 10 years who are attracted to the city’s confidence, the many things they can do here and the many ways they can do them. We’ll also work with our valued partners to ensure that Philadelphia keeps the momentum going. That means getting more businesses to open up shop here. That means working with the universities and hospitals that are consistently attracting talent and transforming their neighborhoods. That means supporting community development corporations committed to keeping our streets safe and clean. Most importantly, that means working together, working creatively and working with the future of our city and region in mind.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Connections 2040: Plan For Philadelphia

Barry Seymour is the Executive Director of the Delaware Valley Regional Planning Commission

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

he Delaware Valley is a large and complex mosaic. Depending on your definition, the region is made up of portions of two or three states, nine to 12 counties, hundreds of local governments, and perhaps thousands of individual communities. From dense city neighborhoods to older suburbs, from new subdivisions to rural farming areas, the Delaware Valley Regional Planning Commission seeks to understand the unique characteristics of each of these communities, and to find the common threads that tie us together as a region. Connections 2040, the Plan for Greater Philadelphia (www.dvrpc. org/Connections2040), adopted recently by the DVRPC Board, presents a vision of a more sustainable future that offers a better quality of life by increasing transportation options, preserving more open space, reinvigorating our existing communities, and being more efficient and cost-effective in how we use energy. In this future, more compact, mixed-use development will shorten commuting distances and encourage alternative forms of transportation such as transit, bicycling or walking. Less energy use will help to reduce emissions of greenhouse gases, protecting our environment and our climate, and providing a competitive advantage for our regional economy. By focusing growth in or around existing centers, we will spend less on building new infrastructure and invest more in improving our existing core systems. Between now and 2040, we anticipate over 600,000 additional people and 300,000 additional jobs in our region. Where those people live, what kind of work they do, and how they travel between work and home will define our future. And we believe that the trends already in place and going forward paint a positive picture for the Delaware Valley. For example: After decades of decline, the City of Philadelphia gained population in the last census and continues to grow, attracting young people and immigrants with the creativity and entrepreneurial drive to start businesses and provide job opportunities.

At the same time, the rate of sprawl in the suburbs has slowed, with new development focused around existing communities and developers building more mixed-use and higher-density developments. Our suburbs are finally growing up! Efforts by state, county, and municipal governments to preserve and protect our natural environment are preserving farmland, key resource areas, and open space, putting us on track to meet the Plan’s goal of 1 million acres of protected open space over the life of the plan. While we continue — like the rest of country — to emerge slowly from the Great Recession, employment is growing, wages are increasing, and we are well poised to take advantage of the coming future. When you consider that the two largest age groups in coming decades will be seniors and young people, our regional concentration of health care and education puts us in a sweet spot for economic growth going forward. And already, for the first time in our recent history, people are actually driving less and using transit more, with a 10 percent increase in transit use in the past decade, leading to record ridership on SEPTA. Building on these trends, Connections 2040 identifies over 100 centers throughout the DVRPC nine-county region where growth should be concentrated, and a network of greenspace and conservation areas to protect natural resources and provide open space. It identifies strategies to build the economy by capitalizing on our

key economic sectors and engaging all of our potential workforce. And it identifies a set of transportation investments and projects that improve safety, reduce congestion, and increase mobility options for people, products and services. Over the next 27 years, we will invest over $50 billion in our transportation network, concentrating on maintaining and modernizing our existing system, but with strategic investments in new roadway capacity to relieve congested bottlenecks, new transit service to underserved portions of the region, transit and highway operational initiatives to improve efficiency and increase flow, and bicycle and pedestrian improvements to serve and link communities. While our first priority will always be to improve the safety of the system and maintain our existing assets, investing in the future must also include new transit service such as the proposed extension of rail service to King of Prussia, or the proposed rail line from Camden to Glassboro. And it must also include new roadway improvements to serve key economic corridors such as along Route 422 in Montgomery and Chester counties, the I-95 and Turnpike connection in Bucks County, or the Direct Connect of I-295 and I-76 in Camden County. While $50 billion will go a long way, it will not go far enough to fully realize all of the transportation needs as identified in the Plan. In fact, we should be spending twice that much to address the backlog of unmet needs, bring the system to a state of good repair, and invest in the new projects and systems needed to build a 21st Century transportation network for a 21st Century region. We can be strategic about selecting projects, we can be innovative about project design, and we can be smart about improving operations, but at the end of the day, we need to identify a combination of federal, state, local, and even private funding that will build these improvements, and provide the essential transportation network needed to keep our region economically competitive, to keep our region accessible for all users, and to keep our region moving forward.

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Building Philly’s World Class Cultural Economy

Cecilia Fitzgibbon is the president of Moore College of Art & Design

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

ost futurists such as Charles Landry author of The Creative City, project that “the industries of the twenty first century will depend increasingly on the generation of knowledge through creativity and innovation.” This is precisely why a vibrant cultural economy and a thriving arts community is so important to position Philadelphia as a world class city. The good news is that we have the cultural resources to get us there. Arts and culture is important for many reasons — it enhances education, draws communities together and adds to the vibrancy of an are. And let’s face it — makes life more fun. There are almost 4,500 nonprofit arts and cultural organizations operating in the 11 county area of Greater Philadelphia according to the Greater Philadelphia Cultural Alliance. In Philadelphia alone, there are 973 arts organizations. What do we mean by arts and culture? We are talking about the range of professional and avocational organizations (mostly nonprofit) who deliver education and instruction such as Moore College of Art & Design or Curtis Institute; community organizations, such as the Abington Arts Center; or those that focus on history such as the Elfreth’s Alley Association or Atwater Kent. Then there are media arts organizations, science and art museums and galleries, dance and theater presenters, ranging from the Philadelphia Museum of Art to Philadanco to People’s Light & Theatre; music and other performing organizations such as the Kimmel Center and the Painted Bride as well as those that serve and support arts and culture such as the Jazz Bridge program or Mural Arts — 4,496 to be exact. Artists are part of the equation. The Parkway as the museum boulevard of our City is balanced by the hip, edgy artist communities of Fishtown, South Philly and Northern Liberties. In many other cities, government support, tax abatement and receptive zoning laws have encouraged artists to inhabit failing neighborhoods as redevelopment strategies. First the artists build studios and live in those neighborhoods, then coffee shops, restaurants, and services follow. To achieve world class status, we should be incentivizing artist live/work space, through intentional means such as developing artist friendly zoning laws and exempting self-employed artists from the Commercial Activity License, steps that cost little and regenerate entire city sections. Culture intersects with the economy when

organizations generate jobs. There are 7,600 full-time equivalent jobs working directly in arts and culture in the region. These are artists, designers, performers, fundraisers, lighting technicians, marketers and financial managers, to name some. Employees of cultural organizations combined with the jobs that arts activity creates in the economy generate $169 million a year in tax revenue. In addition, artists are small business owners and entrepreneurs. Seventy-five percent of people who graduate from art school are self-employed at some point in their career.

PHILADELPHIA CANNOT BE CONSIDERED A WORLD CLASS CITY WITHOUT A VIBRANT CREATIVE ECONOMY AND IT TAKES CAPITAL INVESTMENT AND ONGOING SUPPORT FROM ALL THREE SECTORS TO CREATE ONE.’ Arts and culture positively impacts the economy of the region in significant other ways besides generating taxes. Cultural attendees spend money beside their purchase of a ticket or membership. Arts and culture is the biggest draw for overnight visitors in this region, staying in hotels and paying for transportation to get here, adding $143 million a year to the economy. In addition, residents and day trippers spend money on restaurants, cabs, parking, babysitters and souvenirs, spending an average of $30 to $200 each time they go to an arts event. Philadelphia is among the top 10 cities in per capita spending and total full-time employees generated by arts and culture. In an analysis of 27 other peer cities, it ranks third behind Washington, DC and San Francisco. The study omitted NYC, mostly because most New Yorkers believe that they are without peer (just kidding). We need to state our assets proudly, to go beyond our notion of regionalism. Much like there is public investment in economic development, we should be looking at investment in cultural development. Contributions to arts and cultural through corporate, foundation and government support is not a hand out, but a reciprocal transaction. A strong cultural sector can

position the City as world class and will yield dollars in return, in visitors and jobs. Philadelphia cannot be considered a world class city without a vibrant creative economy and it takes capital investment and ongoing support from all three sectors to create one. The Mayor’s Office of Art, Culture and the Creative Economy maintains that total revenue from 2008 art sales in galleries here in the city was $184,263,000. While Philadelphia is not truly known for its robust art market, it has the highest density of art schools in the country, making it a destination to study art and to stay and set up shop. To capitalize on this fact, Philadelphia should claim world class status as the place to study art, marketing us as a destination for the study of art in much the same way we are known as a city to study medicine and business management. The existence of this market and the growing trend to cultivate a connection between art and business has been opportune for Moore College of Art & Design. Moore was founded by Sarah Worthington Peter in 1848, established as the Philadelphia School of Design for Women, in order to empower women to achieve financial independence by entering into the design realm of the textile industry. Moore is the first and only women’s visual arts college in the nation and continues to focus on inspiring careers and positioning women in their desire to take their place in the creative economies. We pay each student to do an internship and give them the opportunity to do a business minor. We prepare them in public speaking and give them many opportunities to “pitch” their ideas. As part of our strategic plan for the next five years, we will reinvigorate our commitment to developing entrepreneurs. Most recently we were one of 20 finalists in Startup PHL’s “Call for Ideas.” The Women’s Creative Entrepreneurial Launch, to be established at Moore, will redefine college by linking recent alumnae who are entrepreneurs to mentoring, networking, co-working sites, microloans and access to capital. Arts entrepreneurs make sense — dollars and cents. There is much potential for Philadelphia to capitalize on its role as an internationally known cultural sector and to be the incubator of entrepreneurs in the arts. It will take awareness, creative investment and a bold commitment to claim our place by strategically positioning our cultural assets as among the best in the world.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

VISIONS

Why We’re Cultivating More Women Leaders

Natalye Paquin is the CEO of the Girl Scouts of Eastern Pennsylvania.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

Can you imagine the power of one woman? One woman, Juliette Gordon Low, started a movement in 1912 that for 101 years has demonstrated exactly what girls can do when they are encouraged, empowered, and supported. Her keen vision for supporting girls resulted in the Girl Scouts, which has for over a century been a beacon of light for millions of girls and women who came after her. Juliette Low shared characteristics with many women in the Philadelphia region today who serve as models for the next generation of female leaders: bravery to challenge the status quo, a pioneering spirit, and innovation. These are the timeless values and characteristics that women in Philadelphia bring to the table as they manage their careers, families, and homes. We know what a woman can do when she is inspired, and we know that Philadelphia needs more women leaders to be a successful region in this competitive global economy. As we’ve seen for more than 100 years, the key to building a strong pipeline of women leaders is investing in organizations who support the development of girls, one of which being the Girl Scouts. Why Women Leaders Matter It’s been long documented that a balance of male and female leaders leads to a more well-rounded company culture and greater profits. While research shows that men define leadership by independence and status, women prefer to define leaders by their behavior, personal principals and ability to effect social change. Despite this, in the highest circles of leadership in the U.S., men greatly outnumber women. In order for more women to reach the highest levels of leadership, they must acquire a strong foundation of education and actionable leadership skills. We at the Girl Scouts of Eastern Pennsylvania (GSEP) know the value of women leaders and are working to close the leadership gap that exists between men and women by giving girls guidance from an early age on how to affect positive change in the world. For instance, only 4.2 percent of Fortune 500 companies have a woman as their CEO

(that’s only 21 companies out of 500). Yet, in spite of the fact that only one in ten girls is a Girl Scout, 80 percent of women business owners, 69 percent of female U.S. senators, and 67 percent of female members of the House of Representatives were Girl Scouts.

This is not a coincidence: Eight out of ten Girl Scout alumnae attribute their personal and professional success to Girl Scouting. These statistics illustrate the tremendous impact Girl Scouting can have. Through what we call the Girl Scouts Leadership Experience, we encourage Girl Scouts to discover, connect and take action in their communities and to actively learn about the world around them. The most fundamental benefit of Girl Scouting is that it gives girls the confidence they need to excel. According to a 2008 research study conducted by the Girl Scouts of the USA Research Institute (GSRI), “the greatest single barrier to leadership reported by girls is self-perception — a lack of self-confidence in their own skills and competencies.” The same study also showed that while almost all girls think that anyone, regardless of gender, can become a leader, only 1 in 5 girls thinks she has what it takes to become one herself. This perception of a lack of ability is not for the absence of ambition. GSRI’s research revealed that for girls ages 8-12, aspirations after high school are largely educational and professional with 93 percent dreaming of acquiring a college education and 76 percent aspiring for a career outside of the home. Our principle as the largest girl-serving

organization in the region is to use the wisdom and leadership of 15,000 speciallytrained volunteers to build the next generation of women leaders, and to teach our girls that they can lead others and care for themselves. Philadelphia has the Answer Our region is ripe with opportunity for young women leaders. Our eastern Pennsylvania council is unique in that it is a microcosm of the cultural and economic diversity of our nation. By representing a mix of girls from urban, suburban and rural communities from a variety of cultural backgrounds, our 40,000 Girl Scouts from across nine PA counties have experienced diversity in leadership, which ultimately prepares them to become more well-rounded and self-aware in their future endeavors. We also have leaders such as Lynn H. Yeakel, a former GSEP Take the Lead honoree and life-long advocate for women and girls in our community, whom our girls can look up to. Lynn founded an organization called “Vision 2020” in order to advance women’s equality in Philadelphia by the year 2020, which will mark the 100th anniversary of women’s voting rights. Lynn’s tireless passion to the cause of promoting women’s rights has already changed girls’ lives; just last year, one of our very own local Girl Scouts, YingYing Shang, became the first junior delegate to Vision 2020 and represented eastern Pennsylvania at the organization’s third annual congress in Oregon. Lynn’s organization is an incredible investment in the city of Philadelphia, bringing leaders from across the country to join heads on a national issue of importance and positioning our hometown and region to be the place to come for leadership inspiration. As our region thrives and competes for business, it’s imperative that we commit ourselves to supporting the principles of developing leadership skills in youth, particularly girls. Girls have shown tremendous power when they are educated and nurtured, and Girl Scout alumnae have grown to become some of our nation’s greatest leaders. From this, it’s clear that when you invest in organizations that support girls, you’re supporting female empowerment and cultivating the next generation in women’s leadership.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

PHILADELPHIA’S DEVELOPMENT IN THE NEXT TEN YEARS STORY BY ROSELLA ELEANOR LAFEVRE ILLUSTRATION BY DON LEE

What will Philadelphia development look like in the next ten years? No one has a crystal ball, but we have the next best thing: insight from the city’s top developers. Population growth continues in Center City as empty nesters move into the city from the suburbs. Developers are focused on further development of South Broad Street and University City. Riverfront development is on the upswing with projects like Carl Dranoff ’s new 21-floor tower, One Riverside. New hotel investment might be on its way. Emphasis on rebuilding parks and

green spaces is increasing. Transportation funding is becoming a greater priority for the city and developers are solving transportation problems for customers with bike share programs and car-charging stations. New development will get greener with LEED-certified building techniques and, should a rise in interest rates happen, developers will restore more existing properties than take on

new construction. Mayor Nutter’s administration has set a pro-development tone that the likes of Carl Dranoff and Mark Korman hope continues. With the recent enactment of a new zoning code, real estate development in Philadelphia appears to be getting more streamlined. The developers already working in the region plan to continue serving the area’s residents

in many of the same ways they have for years, as a spate of them told Region’s Business. “The Greater Philadelphia area is home to Toll Brothers, so I would expect us to continue meeting the need for luxury housing for the area’s residents,” said John Mangano, regional president of Toll Brothers. “In addition to our traditional single-family home neighborhoods, we

Continued on page 63

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

layered environments that get people excited. “The way we look at it, we’re targeting great properties,” Mr. Korman said. “I think Philadelphia is rich with development and management companies with similar goals.” For Rob Zuritsky at Parkway Corporation, a family-owned company that started in 1930 and has an inventory of 7 million square feet of multiuse development, acquisition and redevelopment property and several parking lots in six cities, development will continue to focus on finding great parking locations first. Mr. Dranoff looks for several things in a prospective property, including walkability and ease of access to transportation. His South Star Lofts are a short walk from the South Street subway station. His forthcoming $180 million Dranoff’s Symphony House, which features 136 condominiums, a 400-car garage, the 356-seat Suzanne Roberts Theatre and two restaurants. mixed use Ardmore Station FLICKR.COM/KGRADINGER project is within walking distance of downtown Ardmore and is just across the vide residents and customers with the best of both expect to meet the luxury housing demand by street from the regional rail station. In addition to worlds. Those who live in properties such as Carl continuing to diversify. Expect to see more active examining whether the location has those accessibility Dranoff ’s Symphony House, which features 136 adult communities, urban living opportunities, features, Dranoff asks himself, “Are you on the cusp of condominiums, a 400-car garage, the 356-seat apartments, unique infill and residential converbecoming an established neighborhood?” Suzanne Roberts Theatre and two restaurants, have sion properties.” easy access to the amenities that so many travel into David Adelman said Campus Apartments, one Center City to access. With mixed use development, Restoration of Existing Properties of the nation’s largest developers, owners and such as Symphony House, “The sum is greater than Developers aren’t just focused on new developmanagers of student housing, will continue operthe parts,” said Dranoff. “The projects become desments, but on restoring existing properties as Korman ating most heavily in the University City section did with The Franklin, a historic building that was of the city, though they recently partnered with St. tinations unto themselves.” originally home to the Benjamin Franklin Hotel. ResJoseph’s University on a freshman dorm. Dranoff isn’t the only developer who sees great toration became a popular development option when “Commercial and residential go hand in hand value in mixed use development. Korman, whose financing for such projects was easier to attain than for us,” said Mark Korman, president of KCI Comcompany recently completed The Franklin at 9th financing for new construction. “Financing for new and Chestnut, which features apartment and corpomercial Real Estate, a division of Korman Comconstruction is easier to get now,” Mr. Korman said. rate residences, sees the future in mixed use. “When munities. That’s how Korman has always done He noted that financing for new construction has we talk about the future, I do think it’s more mixed business, he said. been more accessible in the last six months, and yet, use,” said Mark Korman. “Our real goal – and I think Outside of Philadelphia city limits, developers new construction is not Korman’s focus. “We’re big the opportunity – is gonna lie is mixed use.” favor Bala Cynwd and Camden. The former is a believers in utilizing existing buildings,” Korman said. favorite of Keystone Property Group’s Bill Glazer Mr. Dranoff ’s conviction about Camden as the for its progressive zoning code, which makes it Location-Based Approach region’s Jersey City led him to restore a former RCA very development friendly. “Bala Cynwd has the Developers tend to look at location when deciding Victor factory building on the Camden waterfront most progressive zoning code. It’s the smartest. to pursue a particular project, and that approach into The Victor, boasting 341 loft apartments and resIt’ll yield the most investment and will probably isn’t likely to change any time soon. yield the best results,” said Mr. Glazer, whose Mr. Korman said his company considers location taurants, bars, shops and offices on the ground floor. company operates in suburban areas including first in every prospective development. He cited The Philadelphia Management Corporation recently Allentown, Bryn Mawr and King of Prussia. Elements at Horsham as an example of a great locaacquired a long-vacant property formerly owned by Camden is poised to be the Jersey City of our the Archdiocese of Philadelphia. PMC plans to turn tion. “It’s a very high-end, growing area. It’s a great region, said Mr. Dranoff. 312 Walnut Street into more than 70 apartments and corner with a lot of traffic,” he said. (The Elements “It would have happened five years ago except 3,000 square feet of retail space. incorporates retail and offices space and is anchored for the recession,” he said, but that surge in develby a large Starbucks, making it also a great example of the kind of mixed use development Korman sees Factors Affecting Development opment is coming. as the future.) Korman said that he and his fellow developers are The location-based approach to development anticipating a rise in interest rates that would affect Mixed Use Development allows Korman and other developers to create rich, the development business. If a rise of 3-4 percentMixed use projects allow developers to pro-

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

age points happens, he thinks there will be a dramatic slow-down in development. He also mentioned it would mean more restorative works than new construction. A Toll Brothers executive said a rise in interest rates wouldn’t affect their primary customers. “Our buyer profile is the move-up buyer who has equity in their current home and the financial backing to put down more than 20 percent and is not as limited in purchasing power with the slight uptick in rates,” said Andrew Semon, division president at Toll Brothers. In addition to a potential spike in interest rates, other factors affect what developments are pursued and completed. Mr. Dranoff cited the cost of construction, overall economic growth of the city and NIMBYism, the not-in-my-backyard attitude that keeps residents from wanting to see any change — positive or negative — in their neighborhoods. Return on investment is another concern for developers working in Philadelphia. When deciding between developing a property in Philadelphia or New York City, for instance, Mr. Korman said that he’ll look at the difficulty level of the development process first. If the development process is equally arduous in both places, he’ll next look at the potential returns in both locations and history has shown New York to have higher returns.

Smoother Development Process

The Franklin Residences were originally home to the Benjamin Franklin Hotel and an example of the importance of restoring existing properties. KORMANCOMMUNITIES.COM

A new zoning code was enacted on August 22, 2012. It was the first rewrite of the code in 50 years and was sorely needed. The first zoning code was enacted in 1933 and since the last rewrite in 1962, more than 1,000 amendments were added. With all of the amendments, the zoning code was difficult to navigate even for savvy developers. While “it’s always challenging dealing with zoning issues and neighbors,” as Parkway’s Zuritsky said, the new code is an improvement. In general, the new code streamlines the process and gives developers more certainty, Dranoff said. Toll Brothers’ Mangano said, “City Hall is encouraging positive redevelopment and economic impact, and that is what is important.” The new zoning code addresses some of the concerns Mr. Korman cited as far as development in Philadelphia goes. “Communities will have to make the development process a clearer path,” Mr. Korman said. Similarly, while Mr. Dranoff sees the Nutter administration as pro-development, he wants to see community organizations get

onboard. The problem with residents and neighborhood groups that bring a NIMBY approach to discussion of development are perhaps short-sighted. “They see increased property values as causing higher taxation without looking at the other stuff,” Mr. Dranoff said.

Business-Friendly Policies Many of Philadelphia’s developers are keeping their eyes on the city’s business climate. “It’s a great city, but it’s not as active, business-wise, as it should be,” Parkway’s Zuritsky said. Companies want to see this problem addressed before they’ll come into the city. “If we want more companies [to come into the city and operate here], we’re gonna have to be more business friendly,” Mr. Korman said. Most developers agree that something must be done about the tax structure if residents and stakeholders want to see the city flourish. “Certainly for businesses, [Philadephia] needs a whole new tax structure,” Keystone’s Glazer said. Mr. Dranoff said that “Our tax structure is archaic,” and pointed out that the city taxes things that are mobile (think jobs) and doesn’t properly tax permanent fixtures, such as real estate. The effects of the wage tax are visible in development just beyond City Line Avenue, Mr. Dranoff noted. Looking ahead to the mayoral election in 2015, Mr. Adelman at Campus Apartments said, “I think what it really comes down to is, ‘Will the next administration be business friendly?’” But Glazer thinks it’s more than just a city-level issue. “I think [building a business-friendly climate is] a regional thing. The state has to get it right, the city has to get it right,” Mr. Glazer said. If the tax structure were redone, the next sign of an improvement in Philadelphia’s job market would be the development of more office space, Mr. Dranoff said. While Mr. Glazer noted that the Comcast Center, one of the most significant office projects in recent years, was subsidized by the government, Mr. Dranoff said we’ll know change is coming when office development is spurred. Meanwhile, maybe it’s already starting; Mr. Adelman was excited to mention the office space Campus Apartments recently acquired, which takes up an entire city block from 41st to 42nd Streets, between Chestnut and Sansom.

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12 SEPTEMBER 2013 REGIONSBUSINESS.COM

IDEAS

Should You Apply For An R&D Tax Credit?

Michael Brady is a Senior Manager in the Research and Development Tax Practice of Marcum LLP.

CONTRIBUTE Send comments, letters and essays to feedback@ regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

working through the technical uncertainty.

facturer who does not outright own the products or the patent on the products being Qualified costs of a taxpayer that conducts manufactured, however does own the knowqualified research activities include the wages how required to conduct the manufacturing of employees who are undertaking the activi- process for those products in a more efficient manner. Additionally, the success of any research or development is not necessary for an activity to be qualified research; the simple act of undertaking the qualified activity meets the standards of qualification, even if the developIT IS IMPORTANT TO NOTE THAT ment of a new product or process ultimately THE DEVELOPMENT OF A NEW fails. The R&D tax credit may be calculated in PROCESS OR PROCEDURE, NOT one of two ways, and the method used can be JUST A PRODUCT, MAY BE A changed each year depending on which proQUALIFIED RESEARCH EXPENSE duces the greater benefit. AS LONG AS THE ELEMENTS OF Because the R&D tax credit is an increTHE FOUR-PART TEST ARE MET.’ mental credit, costs incurred in prior years can increase a current year credit calculation. Taxpayers meeting the criteria for claimties, costs paid to subcontractors to conduct ing an R&D tax credit should contract with the research on the taxpayer’s behalf, and sup- a qualified professional for the completion of Permitted Purpose – the activity must plies used and consumed in the performance an R&D tax study. intend to develop a new or improved product, of qualified research activities. The study will serve to document employprocess or procedure. It is important to note that the development ees’ activity to determine eligibility, calculate Technological in Nature – the activity of a new process or procedure, not just a prod- the R&D credit, and document the taxpayer’s needs to rely on the sciences (engineering, uct, may be a qualified research expense as processes and procedures in order to provide biology, computer, or physics). long as the elements of the four-part test are a detailed record in the event the credits or Technical Uncertainty – the purpose of met. deductions are ever questioned by a taxing the activity must be to eliminate uncertainty The implementation of a new or improved authority. during development regarding the capability, process or procedure is an area frequently not In addition to the Federal credit, many methodology, or appropriateness of design. considered when determining if expenditures States and foreign governments also offer Process of Experimentation – the tax- could qualify for the R&D tax credit. R&D credits. An example would be a contract manupayer must utilize a systematic process of

Many taxpayers are aware of the existence of the Research and Development (R&D) Tax Credit, but are not fully versed in its scope. In fact, there are many businesses eligible for the R&D tax credit that do not take advantage of this valuable incentive. Taxpayers in the disciplines of manufacturing, application software development, telecommunications, biotechnology, and engineering, among others, commonly qualify for the Federal R&D credit. First enacted in 1981, the intent of Congress was to incentivize businesses to conduct innovative activities (known as “qualified research”) within the United States. Originally intended to expire in 1985, the credit has been extended fourteen times and is currently available for research activities conducted prior to December 31, 2013. To be considered qualified research, an activity needs to meet all aspects of what is known as the “four-part” test:

68 Q&A

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

CRESA HELPING TENANTS

MANAGE SPENDING Matt Feeney has been a Managing Principal with Cresa Philadelphia since its inception in 1997. During his 24 years of commercial real estate experience, he has exclusively represented tenants, and one of his most recent deals is a big one, involving the country’s first large scale net-zero energy building, located in California. Matt talked with us about Cresa and the new project.

What’ss the elevator pitch for Cresa? We are North America’s largest tenant-only real estate firm, which means ans we only represent the occupiers of space and we help them effectively manage their real estate spend. Because we only represent present the tenant side, we eliminate the conflict of interest that at could occur for a firm to represent both sides. It’s a different approach pproach to real estate. We do have ave people who’ve adopted a similar approach, but if you look att the market you have about 10% of the market take this approach, ach, and the other 90% represent both landlords and tenants. Tell us about your recent deal with LCL Financial and its new building in California. It’s a 415,000 ,000 square foot corporate headquarters project, and it will be the first large-scale Net Zero Energy building in the country, so o we will produce as much electricity as we consume. It’s a watershed rshed type deal. We havee a fabulous client who is committed to doing things in a sustainable nable manner, we had a very cooperative owner who was also committed ommitted to doing things in a sustainable manner, and through gh the use of some newer technology, we’re able to produce a Net Zero Energy building, and LCL Financial will occupy it in May of 2014. Heins is the developer, and we at Cresa not only did the transaction work, rk, we’re doing all the construction management and project management work for the job. How is development and real estate looking for Philadelphia? I think we’re seeing, much like many areas in the country, we’re seeing ng a recovery in real estate, and more optimism in most of ourr clients who want to take on, potentially, a little bit more space, ce, so overall we’re feeling the recovery. Our clients are feeling the recovery, but there’s still some caution. Some are being cautiously optimistic.

Cresa.com/Philadelphia

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

FINE ESTATES PREVIEW

$3.2M Magnificent Estate In Cherry Hill Magnificent four bedroom, three bedroom custom estate home built by Gary Gardner, on 1.5 acres of professionally landscaped grounds. This home has heated granite walks and driveway, an attached three car garage as well as a two car detached garage. Complete with marble floors, custom marble staircase, elevator and different crown molding in every room. Contains two Butlerâ&#x20AC;&#x2122;s pantries, Joanne Hudson designed gourmet kitchen, family room with custom gas fireplace, two main floor studies, rear staircase to second floor and basement. The master Suite is unbelievable with a gas fireplace, three dressing areas with custom cabinetry, large steam/shower room and laundry room. This beautiful home features a slate roof and safety features like lightning protection, fire suppression, heated copper gutters and much more. For more information, please contact Anne Koons at (856) 795-4709 or visit annekoons.com.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

FINE ESTATES PREVIEW

$8.5M Premier Home in Lower Gwynedd One of Delaware Valley’s premier residences, Sonrisa (Smile) is a gated Art Deco inspired masterpiece designed by Krass & Associates. This four bedroom, eight bathroom (five full, three half ) home was constructed in 2006 by the AJ Lewis Corporation in Gwynedd Valley. Designed to meet the most discerning preferences, this stunning residence redefines elegant living. Built on a grand scale for entertaining with six unique fireplaces, elevator, koi pond, outdoor terraces and fountains, dramatic barrel ceiling front room, inlaid black walnut, oak and limestone floors, elaborate vaulted ceilings, built-in cabinetry and Ludowici tile roof. The lower level includes a gym, den, full bathroom with steam shower, 50’s style diner, home theater reminiscent of the 1920’s and grand elegance with seating for 12. There is a meticulous level of attention to detail inside and out. For more information, please contact Jamie Adler at (215) 654-6016 or visit Jamie.garysegalteam.com/

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

FINE ESTATES PREVIEW

$6.8M Storybook Styled Home in Devon This magnificent storybook styled estate home on a private 4.6 acres in Easttown Township offers an unparalleled pairing of classic stone architecture with inspired and artfully collected interior appointments. The soaring conservatory and dining room pairs seamlessly with intimate eclectic family spaces to create a meaningful and magical home at ease for grand entertaining as it is for daily family life. The seven bedroom, seven bath main house offers three beautifully finished stories including a full basement with simulation golf theater, exposition quality wine room, massage room, full bath and gym. The detached early 1900â&#x20AC;&#x2122;s bank barn, now a fully outfitted guest house, adds to the propertyâ&#x20AC;&#x2122;s charm, appeal and expanded usability. Extensive garden rooms, a stone spring house, formal Grecian styled pool and centennial beech tree add interest and amenity to this truly unique, landmark property. For more information, please contact Lavinia Smerconish at (610) 547-6637.

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(215) 641-2727 (office) (267) 419-1454 (direct) (215) 850-1305 (cell)

Nicole Miller-Desantis

1204 Hunt Seat Dr Lower Gwynedd, PA 5 bedrooms, 3.5 baths, 3 car garage $45K Price Reduction! Tastefully decorated colonial in desirable Polo Club Estates in the heart of Gwynedd Valley. Sited on over an acre, this well positioned, brightly lit home has improvements throughout. HRDWD flooring, custom paint, newly renovated powder & mud rooms along with numerous other finishes that highlight this beautifully maintained home. The open floor plan allows for easy entertaining with a formal Living Room (w/fireplace) and DR which flows into the expansive, gourmet kitchen featuring a wood-burning, stone FP, two islands and all high-end appliances. FR w/ granite topped wet bar and rear paver patio w/gas grill are just a few steps away from the centrally located kitchen. The Ownerâ&#x20AC;&#x2122;s Suite includes newly renovated walk-in closet, exercise room and full BA w/jetted tub, stall shower and radiant heated marble flooring. Four additional bedrooms have adjoining bathrooms. New garage doors and exterior lighting fixtures have been added to enhance the exterior of this well landscaped residence.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

OPINION COMMENTARY FROM ACROSS THE WEB

A Chance To Save On Your Real Estate Tax Bill My Fellow Philadelphia homeowners: Under the Actual Value Initiative, the City of Philadelphia is offering a Homestead Exemption. Eligibility for the program could not be simpler – Philadelphians who own and live in their home as their primary residence (and do not claim another primary residence in Pennsylvania or another state) are eligible to receive the Homestead Exemption. With the $30,000 Homestead Exemption and the new 2014 tax rate of 1.34%, we know that homeowners could see a savings of up to $402 on their property tax bill for 2014 and beyond. The deadline for this money-saving program is fast approaching. I urge you to apply for the Homestead Exemption by September 13, 2013. If you have not yet applied, you can easily apply in minutes (in any language) – or check the status of your application if you already applied – by calling the Homestead Hotline at 215-686-9200. You can also apply or check the status at www.phila.gov/opa or on the AVI Calculator at avicalculator.phila.gov, which will also give you an opportunity to calculate your tax bill for next year. I’m also encouraging you to talk to your friends, family or neighbors and ask if they have applied for the Homestead. If they haven’t, encourage them to call the Hotline and apply by September 13. MAYOR MICHAEL NUTTER

Are We Really Serious About Syria? Why are we even talking about taking military action in Syria? What is that military action supposed to accomplish? And what is the probability that it will in fact accomplish whatever that unknown goal might be?

What is painfully clear from President Obama’s actions, inactions and delays is that he is more or less playing it by ear, as to what specifically he is going to do, and when. He is telling us more about what he is not going to do — that he will not put “boots on the ground,” for example — than about what he will do. All this is happening a year after issuing an ultimatum to the Bashar al-Assad regime in Syria against the use of chemical or biological weapons. When the President of the United States issues an ultimatum to another sovereign nation, he should know in advance what he is going to do if that ultimatum is rejected. But that is not the way Barack Obama operates. Like so many people who are masters of lofty words, he does not pay nearly as much attention to mundane realities. Campaigning is his strong suit. Governing is not. With the mainstream media ready to ooh and aah over his rhetoric, and pass over in silence his policy disasters as President, Obama is home free as far as domestic politics is concerned. But, on the world stage, neither America’s enemies nor America’s allies are hypnotized by his words or his image. Nations that have to decide whether to ally themselves with us or with our enemies understand that they are making life-anddeath decisions. Make no mistake about it, Barack Obama is a very clever man. But cleverness is not wisdom, or even common sense.

Brand.com Pres. Michael Zammuto stands with Mayor Nutter-it will add 100+new jobs @JBERNSTEINCBS

@TechnicallyPHL

@DaleCarnegie

84% of Philly 2011 VC was suburban: lowest urban rate of 11 big regions -Why?

Disengaged employees most likely have a disengaged manager. Managers, Are you engaged? #EmployeeEngagement #Leadership

9 SEPTEMBER 2013

2 SEPTEMBER 2013

@VisitPhilly Get to know the #GraduateHospital neighborhood on a walking tour, September 14: http://vstphl.ly/15JpamL 9 SEPTEMBER 2013

Could be wrong but it sounds like the Springfield board of commissioners are watching the football game before the meeting starts...

@SoPhReview

9 SEPTEMBER 2013

Bella Vista @FreeLibrary is holding a book drive for area schools this month: http://bit.ly/1aSR1rB 9 SEPTEMBER 2013

@EOTSPhilly Calling artists: City bike rack design competition deadline extended until 9/30 9 SEPTEMBER 2013

He has the authority to take military action if he wants to. The question is whether he can sucker the Republicans into giving him political cover by pre-approving his unknown actions and unknown goals.

@byMeghanRoss

@CarltonPurvis It’s official. #Tennessee now requires photo ID/proof of residency for #FOIA requests

@PPDJoeMurray So Steely Dan is playing the Mann on Sept 21st? I’m telling all of you riotous SD fans right now, your wildness wont be tolerated in my hood 7 SEPTEMBER 2013

@SDPHite Thanks to all @PhillyEducation supporters at Million Fathers March. Our students deserve quality education and investment in their future. 9 SEPTEMBER 2013

9 SEPTEMBER 2013 DAILY LOCAL NEWS 6 SEPTEMBER 2013

REGION’S BUSINESS A JOURNAL OF BUSINESS AND POLITICS !"#$%&'()*+",-./""(012%20120#2"321(4 /5-"620+'&"%4'784&9":;1)<"=/-9"6>(+2".--#" :;>2":2;;9"%4".?@,, A=.-B"5C,DC..,""""E""""888<'2)($06:>6(0266<#$3

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HOW TO CONTRIBUTE To contribute, send comments, letters and essays to feedback@regionsbusiness.com. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business. We reserve the right to edit all submissions for content, style and length.

12 SEPTEMBER 2013 REGIONSBUSINESS.COM

BY THE NUMBERS

6.3M

2.9M

Population of Greater Philadelphia — fifth largest among large U.S. metros

Employment in Greater Philadelphia — fifth largest among large U.S. metros

$388B Gross regional product in Greater Philadelphia — sixth largest among large U.S. metros

$390B Gross metro product in Greater Philadelphia — seventh largest among U.S. metros

$97B Total retail sales in Greater Philadelphia — fifth largest among U.S. metros

3.18M

161,038

Total labor force of Greater Philadelphia in 2011

Private-sector establishments that had $695.5 billion in sales in 2012

$320B

Companies on the Fortune 500 list with their headquarters in the region in 2012

Companies on the Fortune 1000 list with their headquarters in the region in 2012

Personal income in Greater Philadelphia in 2012 — fifth largest among large U.S. metros

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