Region's Business 20 September 2012 by Independence Media

HOT COMMERCIAL SPOTS AVAILABLE VOTER ID GOES BACK TO LOWER COURT

OUT OF THE SPOTLIGHT, BUT NOT INTO OBSCURITY

REGION’S BUSINESS

PHILADELPHIA EDITION

A JOURNAL OF BUSINESS AND POLITICS

HOW THE BET ON CASINOS PAID OFF IN A BIG WAY Detractors remain, but table games have fattened tax coffers and slot machines have brought the state’s horse racing industry into the national spotlight.

WHAT COMPANIES CAN LEARN FROM OBAMA, ROMNEY CAMPAIGNS INSIDE MAIN LINE RESTAURANT WEEK CITY CONSIDERS BACKING OFF TAX ABATEMENT RegionsBusiness.com $2.00 U.S.

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

CONTENTS

23 Learning from Both Presidential Campaigns

The Big Payoff How Pennsylvania’s calculated gamble on casinos created jobs, generated tax revenue and saved the state’s horseracing industry.

1900 Arch Street 1900 Arch Street is a premier mixed use development project in the Logan Square section of Philadelphia. Scheduled for completion in Fall of 2013, the project will feature 280 luxury apartments, private parking, and 16,333 SF of ground floor retail.

Businesses could learn a thing or two from the way both Barack Obama and Mitt Romney are using social media in the race for The White House.

City’s Tax Abatement Policy Under Scrutiny

! One member of council wants to cut the length of tax abatement in half.

Where Are They Now? We caught up with five people who may have left the public spotlight, but have continued to make a difference. First of a series.

32 REGION’S BUSINESS Independence Media Corp. 600 West Germantown Pike, Suite 400 Plymouth Meeting, PA 19462 610.940.1656 | feedback@regionsbusiness.com Online: RegionsBusiness.com To subscribe: 877.700.6245 or 215.627.6397 Circulation and Distribution managed by CCN - www.ccndelivery.com

CORRECTION The 6 September edition incorrectly stated Brandywine Realty Trust’s headquarters, which are actually located in Radnor Township.

PRESIDENT AND PUBLISHER James D. McDonald EDITORIAL DIRECTOR Karl M. Smith

Two Penn Center-Suburban Station Located just steps from City Hall, Suburban Station features some of the premier retail locations in the city. Availabilities exist from 900-2,700 SF with neighboring tenants including McDonald’s, Dunkin Donuts, Au Bon Pain, and TD Bank.

ASSOCIATE EDITOR Terrence Casey CONTENT TEAM Brandon Baker, Emily DiCicco, Victoria

Marchiony CONTRIBUTORS Michael Jacobs, Karen Fratti, Andrejs

Penikis, Timothy Holwick, Don Lee ADVERTISING DIRECTOR Larry Smallacombe ACCOUNT MANAGER Charles Coltan

© Copyright 2012 Independence Media Corp. All rights reserved. Use of material within without express permission of publisher is prohibited. Region’s Business is published weekly on Thursdays and online at www.RegionsBusiness.com. The publisher makes no representations or warranties regarding the advertising appearing in its pages or its websites.

www.precisionrg.com 1429 Walnut Street Suite 1200 Philadelphia, PA 19102 866-Walnut 4

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

EDITOR’S DESK

Good to See Calculated Gamble Pay Off

Karl Smith is the Editorial Director for Region’s Business. You can contact him at ksmith@regionsbusiness.com

One of my favorite scenes from the movie The Breakfast Club involves Judd Nelson’s character, John Bender, pontificating about the theory that a screw falling out may have led to a door inexplicably closing. “The world’s an imperfect place,” he said. “Screws fall out all the time.” Indeed. In a perfect world, there’s full employment with everyone making ample money and receiving top-shelf benefits. The government sits back and lets the market self-regulate and the market returns the favor by always doing the right thing. But, like Mr. Bender, we live in an imperfect place. That’s the lens through which to size up the gaming industry in Pennsylvania.

The advent of casinos in Pennsylvania — complete with slots and table games, created jobs and a positive economic impact. That’s a good thing, right? After all, those phrases seem to dominate the presidential campaigns. A strong, steady stream of tax revenue flows into various state and municipal coffers at a time when most public-sector budgets are under incredible pressure. The moral of the story, though, is that extremists on either side of the political spectrum cannot claim this as their own. Hardcore Republicans, stalwart champions of smaller government, believe in a self-regulating market. That wouldn’t work here. There’s no industry that would suggest the tax rates imposed on the gaming industry. And other regulations have allowed the

BUSINESS INTELLIGENCE IS INTELLIGENT BUSINESS. Application Development Key Performance Indicators Dashboards & Workflow Visit www.PickITS.com/appdev to learn more.

Philadelphia s New York

www.PickITS.com s 215.886.7166

state’s thoroughbred industry not only to survive, but also to thrive and elevate to elite status in the nation. On the other side of the spectrum, intense liberal Democrats would rather legislate the gaming industry out of existence, on a series of moral arguments. Morality isn’t really the government’s concern and it’s important to realize that Pennsylvania doesn’t exist in a vacuum. States across the region were jumping on the casino bandwagon. State laws weren’t going to stop that — in no way would the absence of Pennsylvania casinos improve the moral character of the state’s residents. The only results were tax money falling off the table and missed opportunities to create jobs. Second, the state was already

in the gambling business. Racetracks and lotteries had a long history. And if you’re in a business, you have to be in it to win it. That meant casinos and, hopefully in the near future, sports betting. Has there been crime associated with the casinos? Yes, of course. And high-profile incidents of people doing stupid things (leaving kids in cars, etc.) involving the casinos? Yep, plenty. But the world is an imperfect place. Thousands of jobs and millions of dollars don’t magically appear. And while casinos don’t create stupid people, they offer them the opportunity to display their stupidity. But Pennsylvania did it right. The casino legislation does the best it can to keep the screws from falling out.

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

DINING

Original Lee’s Hoagie House in Cheltenham Ave. Closes

Long-time Philadelphia favorite Lee’s Hoagie House has closed its original location on 19th and Cheltenham Avenue following slow business following an ownership shake-up last year. The location, first opened in 1953, was recently rebranded as “Lee’s at Cheltenham,” eventually leading to partners of the business requesting the company’s brand be removed from the storefront. The 16 other Lee’s locations around the Greater Philadelphia region will remain open, and there have been no reports on what will replace the signature sandwich shop on Cheltenham.

WEEKLY BRIEFING GAMING

OBITUARY

Developer Tony Goldman Dies Tony Goldman, who has largely been credited for the revitalization of 13th Street between Chestnut and Walnut Streets in Center City, passed away last week from heart failure at the age of 68. Mr. Goldman’s multi-city company, Goldman Properties, has made an investment in 25 properties in the above-mentioned area, including hotspots like El Vez, Barbuzzo, Lolita and Jamonera. Prior to the renovations done to the area, Mr. Goldman had famously dubbed the space “aesthetically Goldman depressed.” Mr. Goldman was awarded in 2010 for excellence in preservation by the National Trust for Historic Preservation, commending him for rejuvenating the space in a way that was mindful of the buildings’ histories. Mr. Goldman is survived by his wife, Janet; son, Joey; and daughter, Jessica.

BANKS

Millenium Corporate Center Defaults on $44.79M Loan The Philadelphia Business Journal reports that the Conshohocken-based Millenium Corporate Center, a 195,896 square feet office space constructed by O’Neill Properties Group, has defaulted on its $44.79 million loan with Wells Fargo. The building, which houses companies like Kynetic, Jacobs Engineering Group and Cardionet Inc., has 50,000 square feet of its space currently vacant. The most recently scheduled payment is reportedly overdue by more than a month. The loan, which will not mature until 2017, has been shipped to a special servicer while O’Neill Properties Group continues to negotiate contracts with prospective leasers. ENERGY

Region’s First Natural Gas Station Open to Public Clean Energy Fuels Corp. opened Southeastern Pennsylvania’s first public compressed natural gas refueling station on Sept. 13 in Fairless Hills. The station joins five private stations owned by PECO Energy Co. in the region The public station, located on 451 Tyburn Road, is to be used by fleet operators such as Bucks County shuttle buses and Clean Energy refuse trucks, but fuel merchants are hopeful that vehicle owners will eventually switch to natural gas and use the station for refueling in lieu of increasingly more expensive gasoline. Clean Energy will open an additional station by the end of the month at Philadelphia International Airport.

MARCELLUS SHALE

Marcellus shale drilling site in Lycoming County.

(NICHOLAS TONELLI)

Commission Raises $202M From Natural Gas Drilling Pennsylvania’s Public Utility Commission announced recently that it has raised nearly $202 million in fees from natural gas drilling companies, roughly 3.3 percent of the $6 billion worth of shale gas drilled in the state last year. By comparison, Texas uses a 7.5 percent tax rate on gas produced within its boundaries, with West Virginia taxing at a rate of 6 percent. Using the same rate as West Virginia, Pennsylvania could have stood to bring in $387 million — nearly double the estimated number for this year. Currently, about $107 million of the collected money will be allocated for fixing infrastructure across the state. The state will take another $23 million will be taken off the top of the amount, with the remainder being used to deal with new expenses brought to communities by the existence of the drilling companies.

Hard Rock Kills ‘Boutique’ Casino Plans in AC AC Gateway LLC ended its plans to open a casino “boutique” on the Atlantic City Boardwalk last week, ending any near-future prospects for new casinos to open in the cash-strapped casino city. “Hard Rock International has decided not to move forward with an application for a potential hotel-casino development in Atlantic City, due to current market conditions,” Hard Rock, which would have run the casino, said in a statement. “We have been evaluating Atlantic City as a prospective location for a hotel-casino development and have not eliminated this location for a future endeavor.” Had it not canceled, the company was to pay a $1 million application fee on Thursday morning to begin what would have been at least a $465 million construction project. The casino-hotel was set to be the first of its kind in Atlantic City, hosting only 208 rooms from its onset, a small-sized boutique casino that was only recently made legal to build in an effort to jumpstart casino revenues after five consecutive years of reported losses.

Seminole Tribe Begins Handling Daily Operations The Mohegan Indian Tribe has been approved by New Jersey casino regulators to undertake daily operations responsibilities for Resorts Casino Hotel, the oldest casino in New Jersey. The Seminole Indian tribe, which will now have a 10-percent stake in Resorts, reportedly made the initiative to undertake the responsibilities, formally applying to the Casino Control Commission to begin operating Resorts, which is a first in New Jersey history. The tribe, which began consulting with Resorts this summer, currently operates two other casinos in Pennsylvania and Connecticut.

ROLLS-ROYCE DROPHEAD COUPÉ SERIES II

The All New Bentley Continental GT V-8 NOW TAKING ORDERS.

F.C. KERBECK Authorized Rolls-Royce Motor Cars Dealer 100 Route 73, Palmyra, NJ 08065 For information call 856 303 1000 visit www.rolls-roycemotorcars-fckerbeck.com

BENTLEY PALMYRA NEW JERSEY F.C. KERBECK 100 ROUTE 73 NORTH PALMYRA, NJ 08065 Tel: 856 829 8200 www.palmyra.bentleymotors.com

BENTLEY PALMYRA NEW JERSEY

THE ALL NEW ASTON MARTIN VANQUISH NOW TAKING ORDERS.

F.C. KERBECK ASTON MARTIN 100 Route 73, Palmyra, NJ 08065 For information call 888 738 0014 visit www.fckerbeck.com

A dynamic experience of unparalleled intensity.

Lamborghini Palmyra NJ F.C. KERBECK 100 Route 73, Palmyra, NJ 08065 For information call 888- 738-0014 visit www.fckerbeck.com

A FAMILY OF WORLD-CLASS PERFORMERS. ON STAGE AT

F.C. KERBECK

THE MASERATI GRANTURISMO, GRANTURISMO CONVERTIBLE & QUATTROPORTE. The Maserati family of award-winning automobiles has a model tailored to reflect your individuality and to inspire your passion for driving like no other car in the world. Our GranTurismo range of high performance four-seat, two-door coupés and convertibles includes the limited-production MC and exhilarating Convertible Sport. The Quattroporte range of luxury sport sedans redefines the breed with the Quattroporte S and exclusive Sport GT S. Every Maserati is a masterpiece of design and engineering, and each is powered by a competition-proven V8 engine to remind you— and everyone on the road—that you are driving an automobile like no other. The Maserati family starts at $123,000 *.

Passion runs in the family. LEARN MORE: www.fckerbeck.com SCHEDULE YOUR TEST DRIVE: 888.738.0014 FOLLOW US:

Pantone Process Black C

F.C. KERBECK 100 Route 73, Palmyra, NJ 08065

MASERATI GRANTURISMO S BASE MSRP $123,000, NOT INCLUDING GAS GUZZLER TAX, DEALER PREP AND TRANSPORTATION. DEALER PRICE MAY VARY. TAXES, TITLE AND REGISTRATION FEES NOT INCLUDED. ©2011 MASERATI NORTH AMERICA, INC. ALL RIGHTS RESERVED. MASERATI AND THE TRIDENT LOGO ARE REGISTERED TRADEMARKS OF MASERATI SPA.Pantone MASERATI URGES YOU TO OBEY ALL POSTED SPEED LIMITS. 485 C / Process Black C Argento a caldo / Silver hot-stamping

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

WEEKLY BRIEFING

ECONOMY

Survey: Regional Hiring Figures Remain Stagnant A quarterly survey conducted by Cherry Hill, N.J. accounting firm Alloy Silverstein indicates that 35 percent of the region’s CEOs and COOs are hiring new employees. While the response indicates a 2 percent jump in hiring, the rate is relatively stagnant. The report’s findings say that executives continue to hold off on hiring because they are either fully staffed or because they await an increase in product demand or sales performance — two outcomes that have gone markedly unrealized. The survey, which questioned 1,400 CEOs and received responses from 92, also demonstrated an idea of where local executives stand on the upcoming presidential election, with 61 percent expressing an intention to vote for Mitt Romney, and 19 percent planning to vote for Barack Obama. Asked about factors in their decisionmaking process for voting, 64 percent cited the economy as their primary concern. Only 13 percent of these same CEOs a n t i c i p at e d the economy to be in a better condition than it is today six months from now.

LAW

Prominent Lawyer, Diplomat Announces Retirement Plans David Girard-diCarlo, a figurehead of Philadelphia’s politics and legal workforce, has announced his intention to retire full-time to his Santa Fe home in New Mexico by the year’s end. Mr. Girard-diCarlo, who currently works for the worldwide Cozen O’Connor law firm as an advisor on governmental relations, served as U.S. Ambassador to Austria during 2008 and leading into 2009 following years of political fundraising for the Republican Party, Girard-diCarlo most notably for President George W. Bush in his 2000 campaign and 2004 bid for re-election. While the top-of-the-food-chain Philadelphia lawyer says he will end nearly all of his civic activities in the region, he has noted that he will remain on the board of the National Constitution Center.

TRADE

JOBS

Region’s Exports on the Incline Totaling $26.2 billion, merchandise exports increased by $3.4 billion in the Philadelphia region last year, according to the U.S. Department of Commerce’s International Trade Administration. That makes Philadelphia the 11th largest export mar-

ket in the U.S., being a major player in exports of petroleum and coal, transportation equipment, plastics and fabricated metal products. The most valuable export of the region is chemicals, which account for $10.6 billion of the area’s total export value.

DINING

Casey Working to Keep Jobs With New Defense Contract Following a report that Chester-based Alloy Surfaces laid off 145 of its workers, U.S. Senator Bob Casey, Jr., has announced he is in negotiations with the Defense Department to halt any further layoffs at the company. A statement from Sen. Casey’s office indicates that he has been in communication Kendall with Frank Kendall, a Defense Department official responsible for acquisitions of technology and logistics, to push forward with a contract deal for Alloy to create specialty flares used to distract heat-seeking missiles away from aircraft units in combat. The Defense Department has expressed a need for the device in the past, but has avoided replenishing its stock for budgetary reasons. Alloy Surfaces, a subsidiary of the British Chemring Group PLC, previously employed 320 people.

(SHERATON VALLEY FORGE)

Nation’s Oldest Italian Restaurant Joins Sheraton Valley Forge Hotel The Wurzak Hotel Group has announced that Ralph’s Italian — a fifth-generation South Philadelphia restaurant — will inhabit a portion of the Sheraton Valley Forge, which is set to open on September 27. The restaurant, described as a “contemporary” version of what recently was crowned the oldest Italian restaurant in the nation, currently located in the Italian Market on 760 S. 9th St., will open in mid-October as the premier restaurant of the $30 million project.

HEALTH SERVICES

Devon Health Services, Inc. Announces New President Devon Health Services Inc., a King of Prussia-located healthcare cost-management company, has named George Bennett its new president. The largest privately-owned Preferred Provider Organization (PPO) in the Northeast, Devon Health Services will now move forward under the leadership of Mr. Bennett, who

has four decades of experience working with companies like United, Cigna, Humana and Group Health Plan. “Mr. Bennett has strong roots in the health care industry and an even stronger passion for helping people gain quality, affordable care,” Dr. John A. Bennett, founder and CEO, said in a statement.

DEVELOPMENT

Core Realty Sets in Motion Fishtown Revitalization

Core Realty has announced it is in “phase one” of a process to transform industrial Fishtown into a bustling cultural center, starting by turning buildings Ajax and Dry Ice into a multirestaurant, multi-venue complex known as Canal Street North. The proposal, put forward by Core Realty President Michael Samschick, was approved last week by the Fishtown Neighbors Association by a vote of 72-17, ushering in continued talks of specifics for what the entertainment complex will fully entail. Thus far, the plan calls for the construction of a 3,000-seat Live Nation concert venue, a countrywestern bar, a bowling alley and a plaza featuring a variety of restaurants. Core Realty will present is set to present a more robust proposal to the Philadelphia City Planning Commission for final approval later this month.

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

WEEKLY BRIEFING

REAL ESTATE

PHARMACEUTICAL

Chestnut Hill Tower Sold For $16.75M Chestnut Hill Tower, a 228-unit apartment building in Philadelphia, has traded for $16.75 million. Gebroe-Hammer Associates arranged the sale between an undisclosed buyer and seller. The 18-story luxury high-rise sits on just over five acres and includes 12 ground-floor retail units. The property includes a mix of studio, one-, two- and three-bedroom units with monthly rents ranging from $750 to $1,500.

ENTERTAINMENT

‘Largest’ Facility Opens Speed Raceway recently opened its 100,000 square-foot facility in Horsham. The raceway, which is billing itself as “America’s largest indoor go-kart facility,” was built at the site of a former Walmart and features two tracks and 54 Italian racing karts, as well as four racing simulators and a slot car racing pit. A second Speed Raceway is set to open next month in Cinnaminson, N.J.

Exton’s ViroPharma Vows To Create 151 Jobs ViroPharma Inc., an international biopharmaceutical company headquartered in Exton, Pa, announced last week that it will expand its operations to create at least 151 new, high-paying jobs within the next three years. ViroPharma will lease an additional 71,000-square feet of office space to accommodate the planned growth. The expansion project was coordinated by the Governor’s Action Team, (GAT) the Chester County economic Development Council (CCEDC) and received a $583,000 funding offer from

the Department of Community and Economic Development. Founded in 1994 by a small team of entrepreneurial scientists, ViroPharma now has significant operations in Europe as well as Pennsylvania, and was called a “true Pennsylvania success” by Governor Tom Corbett last week.

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

WEEKLY BRIEFING GOTTA HAVE IT GADGET EXECUTIVE BOOKSHELF

Presidential Briefing David Maraniss, associate editor for The Washington Post, digs deep into President Barack Obama’s family background and life in the biography “Barack Obama: The Story,” released in June. Dubbed the most anticipated political book of the year, “Barack Obama: The Story,” reveals details about President Obama’s personal life up until his late 20s. Mr. Maraniss is also the author of the famous “First in His Class: A Biography of Bill Clinton.”

“In “Barack Obama: The Story,” David Maraniss seeks to transcend the mythmaking of both sides and tackle two major issues: the legacy of family history and the values that shaped Obama and the internal forces which set him on his rapid, unlikely climb to the White House.” - David Lauter, L.A Times Assistant Managing Editor

Samsung Galaxy S III WHO TO FOLLOW

@danariely Professor of Psychology and Behavioral Economics at Duke University “One of the most popular behavioral economists tweets about far-ranging issues like why we lie, and what psychological factors led to corruption on Wall Street.” — BusinessInsider.com RT @danariely Phrase of the month: “If we have data, let’s look at data. If all we have are opinions, let’s go with mine.” — September 4, 2012

Samsung’s Galaxy S III is not only a suitable alternative to the iPhone; it is perhaps a robust option for businessmen and women, boasting a speedy multi-core processor and usage of new LTE lines that run connection speeds as high as 54 megabits per second — faster than most home Internet lines. Couple that with built-in software that allows for photo, video and document sharing and editing amongst all connected devices, and Samsung may have the best iPhone competitor. MUST-HAVE APP

Documents to Go Who says the iPhone can’t be a business device? Documents to Go ($16.99, iOS) by DataViz, Inc. puts power back in the hands of Apple users, allowing you to edit and create Microsoft Word, Excel and PowerPoint files otherwise

unable to be altered through the standard iOS interface. The app further impresses by synchronizing documents through an included application for Windows and Mac, granting you remote access to and editing permission for files on your laptop or desktop computer using your iPhone or iPad.

,1),1,7, * ; 6HGDQ /HDVH IRU PR IRU PR N PLOHV \U ,QLัฒDO 3D\PHQW 'RZQ 3D\PHQW 6HFXULัป 'HSRVLW

_______________________________________________________________________________________ | | | | | | | | | | | |

,QักQLัด of Ardmore

,QักQLัด of West Chester

306 W. Lancaster Ave., Ardmore, PA

715 Autopark Blvd., West Chester, PA

610-649-3600

InfinitiofArdmore.com

610-696-6700

InfinitiofWestChester.com

* Excludes taxes, tags, title, license & options. For well qualified buyers. Two or more vehicles available. Expires 10/01/2012

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

WEEKLY BRIEFING

PHARMACEUTICAL

BUSINESS PROFILE

PHARMACEUTICAL

Teva Animal Health Unit to be Acquired Bayer will acquire Teva Pharmaceutical’s animal health division in a $145 million deal set to close next year. The deal for the animal health unit includes $60 million when the deal closes and an additional $85 million if the company meets production and revenue targets as well as about 300 employees and a plant in St. Joseph, Mo. Israel-based Teva has its North American headquarters in North Wales, Pa. RETAIL

Group Sells Two Tube Companies Superior Group Inc. of West Conshohocken announced that it has sold two companies, Superior Tube Co. Inc. in Collegeville and Fine Tubes Ltd. In England, to the Watermill Group, a private investment company in Lexington, Massachusetts for an undisclosed amount. The manufacturers’ products are used in the energy, aerospace, and medical device industries and Fine Tubes reportedly employs around 380 people.

ProPhase Rejects Proposal from Competitor Matrixx

(GPX REALTY)

Growing Evolve IP Now Reaches 700 Companies Evolve IP joined the Inc. 500’s list of fastgrowing private companies at number 321 this summer as its sales grew a sharp 1,171 percent in the three years leading up to the list’s compilation. Evolve IP, founded in 2007, describes itself as a “single-source cloud solution [that] enables services such as virtualization and unified communications in one environment,” having drawn 700 organizations to its cloud service as of August. “Our inclusion on the Inc. 500 is a tribute to the talented and dedicated employees at Evolve IP and a milestone that validates our success in providing single-source cloud services to the business community,” Chairman, CEO and Co-Founder Thomas Gravina said. Further bolstering the company’s selection as an Inc. 500 company, Evolve IP was recognized by AlwaysOn Global 250 in July at the 2012 Silicon Valley Innovation

RETAIL

One Week, Two Acquisitions for VWR International

Summit as a top Internet-based company, solidifying the start-up’s proficiency in the categories of innovation, market potential, commercialization, stakeholder value and media buzz. The list was put together by leading industry insiders, investors and journalists through a three-month process of review. In 2010, Evolve IP added SAS 70 and PCI-ASV designations to its list of accomplishments, making it the one of only a handful of communications-as-a-service providers in the country to boast such qualifications. The company recently partnered with The Agent Alliance to expand both its brand and revenues through a five-year agreement, extending the company’s reach beyond the confines of its Wayne, Pa. office suite. — Brandon Baker

VWR International, a laboratory supplies provider based in Radnor, announced its purchase of Sovereign Group, a similar firm with operations in Brazil and Argentina on Wednesday, September 12. This news followed the firm’s statement that it had bought the mining-related operations of KLEN International of Perth, Australia on Monday of the same week. According to VWR, the KLEN unit “manufactures and distributes products used by labs that serve the precious metals mining industry.” Terms of both deals were not disclosed.

In a statement Monday, ProPhase Labs Inc., makers of the Cold-Eeze product line, announced that it has rejected an unsolicited non-binding proposal to be acquired by competitor Matrixx Initiatives, makers of Zicam cold treatment products. Earlier this month, Matrixx purchased a three-year stock option to acquire 1.45 million shares of ProPhase stock for $200,000. ProPhase turned down Matrixx’s $20.8 million acquisition proposal due to the condition that Matrixx would be permitted to access nonpublic and confidential ProPhase information. Even with a confidentiality agreement, Prophase officials said that there was “undue risk to ProPhase in disclosing confidential information to one of its largest and most aggressive competitors.” RETAIL

Wayne-Based Five Below Opens 5 New Locations Five Below opened five new stores on September 14, making for a total of 237 retail outlets in 18 states. The company raised $163.5 million when it went public in July 2012, issuing 9.6 million shares. Five Below stores specialize in “extreme-value merchandise for the teen and pre-teen market” with prices ranging from $1 to $5, and the franchise has kept a brisk pace of expansion since its first store opened in Wayne, Pa in 2002. HEALTH

Lourdes Health Partners With Centennial Surgery Camden, N.J.-based Lourdes Health System entered a joint venture partnership with Centennial Surgery Center in Voorhees, N.J. on Monday, acquiring a majority stake in the 18,000-square-foot center. The multi-specialty center serves about 11,000 patients annually and features four surgical suites, two endoscopy suites, two short-procedure rooms, supporting patient care areas for pre-and-post procedure care and high-tech surgical and endoscopic equipment. Lourdes currently offers outpatient surgery at its two South Jersey medical centers and is currently building an ambulatory care center in Cherry Hill. Financial terms of the deal were not disclosed.

,QѡQLѴ ); $:' /HDVH IRU PR IRU 0RQWKV N PLOHV \U ,QLѲDO 3D\PHQW 'RZQ 3D\PHQW 6HFXULѻ 'HSRVLW

______________________________________ | ,QџQLѲ of West Chester ,QџQLѲ of Ardmore | | 715 Autopark Blvd., West Chester, PA 306 W. Lancaster Ave., Ardmore, PA | | 610-649-3600 610-696-6700 | InfinitiofArdmore.com | InfinitiofWestChester.com * Excludes taxes, tags, title, license & options. For well qualified buyers. Two or more vehicles available. Expires 10/01/2012

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

DEALBOOK

MEDIA

Capital Management Company Creates Newspaper Chain Versa Capital Management, the Cira Centerbased troubled-company buyout firm, has created a newspaper chain, Civitas Media LLC, from four chains of small dailies and weeklies that the firm has taken over in recent years. Civitas, with 1,650 employees, includes the former Impression Media, 17 dailies and 29 weeklies from acquiSegall sitions made by the company across 99 cities in Pennsylvania, the Midwest and mid-South. According to Versa CEO Gregory Segall, editorial content will be left “in the hands of the people who know the local markets best.” INFORMATION TECHNOLOGY

Unisys Managing Database for Federal Acquisition Service Blue Bell-based information-technology hardware, software and services company Unisys Corp. announced it will operate and manage database and middleware systems for the Federal Acquisition Service. The task order, which could be worth $28 million over five years, was awarded by General Service Administration’s (GSA) Federal Systems Integration and Management Center under GSA’s governmentwide acquisition contract. The contract has a one-year base period, followed by four one-year options and a 9.5 month option, all of which are exercisable at the government’s discretion.

HOTEL CONSTRUCTION

Construction Approval Secured For 500-Room W Hotel Site

(STARWOOD HOTELS AND RESORTS WORLDWIDE)

Starwood Hotels and Resorts Worldwide Inc. has secured all approvals to move forward with the construction of a 500-room W Hotel location at 1441 Chestnut Street. The project secured a $400 million loan to begin what will be the third city hotel built from the ground up in recent years. The hotel will stand on a half-acre surface parking lot that had been designated for a $420 million Waldorf-Astoria Hotel with luxury condos before the lending market collapsed in 2008. Construction is scheduled to begin in the spring of 2013, with completion set for January 2015.

REAL ESTATE DEVELOPMENT

Former Office Plans Adjusted To Become Luxury Apartments BPG Properties’ Madison Apartment Group division planned to break ground this week on the construction of 232 “luxury one and two bedroom apartments,” in Bucks County. The property was previously marketed as the New Britain Corporate Center, but BPG recently had the land rezoned for the Madison New Britain apartments due to the weak demand for suburban office space.

Brandywine, Toll Bros. Team Up To Build Nearly 400 Apartments Brandywine Realty Trust and Toll Brothers Inc. will construct a $77 million, seven-building apartment complex in Plymouth Meeting. The 20-acre project consists of 398 apartments, a 10,000-square-foot clubhouse, fitness center, pool, dog park and 45 percent of the land as open space. Brandywine will contribute the land; Toll Brothers will oversee property and construction management and contribute funding. The venture expects to break ground the first quarter of next year. ENGINEERING

LAW

Ballard Spahr Renews City Lease Ballard Spahr has finalized the renewal of a 15-year lease on the 179,307-square-foot property at the Mellon Bank Center in Philadelphia, where it has been since 1991.

Pennoni Buys Engineering Firm Philadelphia engineering firm Pennoni Associates bought AGS, a design and engineering firm based in Arlington, Va. AGS, established in 2010, specializes in engineering mechanical/plumbing, electrical and fire protection systems and energy-related projects.

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

POLITICS

SUPREME COURT

Lower Court to Reconsider Voter ID Case Based on Access The State Supreme Court charged the lower Commonwealth Court with taking a second look at the controversial Voter ID requirement Tuesday. Though Judge Robert Simpson has already made his ruling allowing the requirement in the upcoming election, his decision was based on the General Assembly’s constitutional right to implement such a law. The high court’s 4-2 decision requires Judge Simpson to reconsider the case based on whether all Pennsylvanians have access to the required ID. “We find that the disconnect between what the

law proscribes and how it is being implemented has created a number of conceptual difficulties in addressing the legal issues raised,” read a portion of the majority opinion. The deadline for the new ruling is October 2, and the high court said it will expedite any appeal before the November election. In dissent, Justice Seamus McCaffery wrote “there is no doubt that the record, as it is, establishes the immediate and irreparable harm required for the injunction,” adding that the court should have granted an injunction against the requirement.

Standing, from left: Justices Seamus P. McCaffery, Max Baer, Debra M. Todd, Joan Orie Melvin (currently suspended). Seated, from left: Justice Thomas G. Saylor, Chief Justice Ronald D. Castille, Justice J. Michael Eakin (THE UNITED JUDICIAL SYSTEM OF PENNSYLVANIA)

Court Weighs Commission’s Latest Redistricting Map Lawyers representing a bipartisan redistricting commission argued last week in Philadelphia that their new proposal for state House and state Senate districts is not perfect, but it is good enough. More than eight months after the high court tossed the commission’s original maps, justices heard a new round of arguments for and against the revised plan. Opponents argued the court should repeat its decision from January because the revised plan still falls short of constitutional standards by dividing counties and municipalities to give political advantages to one party or another. Attorneys for the state said they did not have to produce a map that was better than that of Amanda Holt, whose plan helped eliminate the commission’s plan in January. Joseph Del Sole, the lead attorney for the commission, said the key difference is the commission is a political body consisting of members from both parties that has to seek consensus on maps. — PaIndependent.com

20 SEPTEMBER 2012

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

Despite Polls, Romney Has Advantage in Obama’s Economy

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.

“It’s the economy, stupid.” That was the simple message that hung famously in Bill Clinton’s 1992 campaign war room. It wasn’t really a sophisticated admonition. Americans have voted their pocketbooks in national elections throughout our history. This year is unlikely to see a major shift from that axiom. What remains to be seen is how the two major candidates’ narratives about the economy play with voters. Let’s face it: The economy is not good. That should dramatically favor Mitt Romney. No president since the Great Depression has been re-elected with economic numbers like those with which Barack Obama is saddled. Under the Obama Administration, unemployment has increased from a level he deemed unacceptable. The 8.1 percent unemployment rate reported at

the end of August doesn’t take into account those who have simply dropped out of the workforce in frustration. Many economists argue that the true unemployment rate is 14 or 15 percent. Equally troubling are the five million long-term unemployed, nearly double the number at the time President Obama took office. The Obama campaign will make its appeal on two fronts: 1) that they need more time to fix the mess they inherited; and 2) that President Obama has looked out for those in the middle class and their interests, while Gov. Romney is a scion of wealth and privilege and will protect those interests. Polls suggest that strategy might be working. In the eight to 10 “battleground states,” a superficial view of polls suggests that President Obama’s argument is prevailing right now. What should cause the White

House stomach acid to roil are numbers that affect the everyday lives of most Americans. Most significant is the overarching fact that middle class household income has decreased nearly 8 percent since President Obama took office. The middle class cost of living and quality of life have been dramatically affected by skyrocketing gas prices (more than doubled since January 2009), declining home values (down more than 10 percent) and rising college tuitions (up more than 25 percent). For the less fortunate, the numbers are even more troubling. There are now more than 47 million Americans on food stamps — a 46-percent increase under the Obama Administration — and there are 46.2 million of our fellow citizens living below the poverty level, an increase of more than 6.4 million under President Obama.

2012 ELECTION

U.S. SENATE

Libertarian Party Closes In On November Ballot Spot Despite protests from some Republicans, Libertarian Party presidential candidate Gary Johnson is one step closer to having his name on the Pennsylvania ballot this November. Commonwealth Court judges ruled that the Libertarian Party’s debated 9,000 signatures were valid. The party now needs around 600 more. “I’m very optimistic that we will get on the ballot, unless the ruling by Commonwealth Court is reversed by the Supreme Court,” Tom Stevens, state Libertarian Party chairman, told Pennsylvania Independent. If Mr. Johnson makes it to the ballot, he will join independent nominee Jill Stein, a Green Party member. Virgil Goode, Constitution Party presidential nominee, removed himself from the ballot after Republicans challenged his eligibility. According to the Helsinki Accords, an international monitor of elections, Pennsylvania is one of the worst places in the world to have a free election.

For both well-to-do and less-fortunate Americans, the most troubling economic factor is the staggering increase in the national debt. A couple of weeks ago, the national debt surged above $16 trillion. That’s an increase of more than 50 percent during the Obama Administration. No president in our lifetime has gotten re-elected with an economy in such shape. Yet the race, at this juncture, is still tight with an advantage held by the incumbent. Whether or not Mitt Romney can make a clear and convincing case to middle class voters, especially in the vital swing states, that he has a plan that will work for them by reducing federal spending, getting the country back to work and the economy back on track will determine who occupies 1600 Pennsylvania Avenue next January.

Johnson

Auditor General Candidates To Hold Televised Debate Candidates for Pennsylvania auditor general — Representative Eugene DePasquale, D-95th District, state Representative John Maher, R-40th District, and Libertarian candidate Betsy Summers — will go head to head in a live, televised debate Friday. The Pennsylvania Cable Network will cover the event, scheduled for 7 p.m. at the Widener University Law School campus in Harrisburg.

Lack of Ads Creates Room The absence of presidential campaign advertising has made room for candidates running in Pennsylvania’s races, such as those running for U.S. Senate (Bob Casey and Tom Smith), or attorney general (Dave Freed and Kathleen Kane). “It’s a much better market right now for the lower level candidates to get their message out,” Muhlenberg College political science professor Chris Borick told Pennsylvania Independent.

Casey Supports Obama’s China Complaint After President Barack Obama enacted a World Trade Organization complaint against China this week, Senator Bob Casey immediately responded positively. “Today’s action is a step in the right direction to level the playing field. While the announcement is welcome news, there is much more the Administration can do to confront China’s rampant cheating and I will continue to urge them to take additional action,” Sen. Casey said in a statement. Sen. Casey also took the complaint as an opportunity to criticize his opponent, Tom Smith. “Tom Smith backs laws that send our jobs to Asia, Central America, South America, everywhere but here,” he said in a new attack ad. Mr. Smith responded with an attack of his own, saying Sen. Casey’s policies have “crippled economic growth.”

20 SEPTEMBER 2012

CAPITOL REPORT

REGIONSBUSINESS.COM

TRANSPORTATION

Ban on Handheld Cell Phones for Drivers on Harrisburg Agenda Representative Joseph F. Markosek, D-25th District, is proposing enforced cellphone legislation for drivers; he hopes to ban drivers from using handheld devices while driving. Rep. Markosek has been working towards this goal since his becoming chairman of the House Transportation Committee. While it is already illegal to text while driving in Pennsylvania, it is legal to use a handheld device for phone calls. This distinction blurs the line between illegal and legal cellphone use in a vehicle. Although almost 40 states have

legislation banning texting while driving, only 10 ban drivers from using handheld cellphones while behind the wheel. Rep. Markosek also hopes to educate the public about the dangers of cellphone use while driving.

HIGHER EDUCATION

MILITARY

Transparency Sought at State-Relateds

Commission Defends State’s Military Bases

Senate leaders hope to revise Pennsylvania’s Right to Know law, which outlines which government information must be made public. “At the top of concerns is treatment of the state-relateds,” Majority Leader Dominic Pileggi told The Times-Tribune of Scranton. Staterelated universities refer to Temple University, Penn State University, University of Pittsburgh and Lincoln University. Because they are not state universities, they enjoy certain privileges that exempt them from some Right to Know measures. During the Jerry Sandusky scandal, PSU declined to provide information to lawmakers because of these exceptions. Time to enact such legislation is limited. The Senate and House are available for voting only between September 24 and October 18. They leave for recess November 30.

Governor Tom Corbett signed an executive order establishing a bipartisan commission to ensure Pennsylvania is treated fairly if officials close federal military bases. Lieutenant Governor Jim Cawley will lead the commission. “These bases represent jobs. They represent incomes. And they are in many locations...the very identities of towns and counties in this Cawley state,” Gov. Corbett told The Patriot-News of Harrisburg. The Philadelphia Naval Shipyard and the Willow Grove Naval Air Station Base were closed in previous federal moves. In the case of such cuts, the commission will defend Pennsylvania bases by focusing on their effectiveness and proximity to Washington D.C. and other major transportation hotbeds. Email political news tips to Emily DiCicco at edicicco@regionsbusiness.com

SPONSORED BY

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

POLITICS CITY HALL

CITY COUNCIL MATTERS

City Council Considers Reducing Tax Abatement for Development

Timothy Holwick is a freelance writer covering Philadelphia government. Find more coverage at citycouncilmatters. com and follow him on Twitter @ CityCouncilBlog.

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

An ordinance proposed by Councilman W. Wilson Goode, Jr. would reduce real estate tax abatements for development of certain residential or commercial properties. The ordinance would take the 10-year, 100 percent real estate tax abatement for certain properties and reduce it to a five-year tax abatement that decreases by 20 percentage points each year. In 1997, City Council authorized the 10-year tax abatement for the conversion of commercial properties into residential properties. That program led to an expansion of the tax abatement for construction and improvement of residential properties in general. Councilman Goode said there was no way of telling whether the tax abatement was incentivizing property owners to improve their residential properties. He said that while the incentive was the main impetus for some improvements, those for which it was not a factor simply led to lost tax revenue. He pointed to a Penn’s Fels Institute of Government study, which recommends a periodic evaluation of property tax abatements to determine the level of effectiveness. The study also concluded that the main beneficiaries of a tax abatement are major developers, investors and high-income residents, which made it a tax break for the “few, the new, and the well-to-do,” Councilman Goode said. “Attracting wealth to the city can be one

Mayor Michael A. Nutter vetoed a bill sponsored by Councilman Mark Squilla that, among other things, would add an extra tax on parking tickets to go to the Philadelphia Parking Authority Taxicab and Limousine Division. Councilman Squilla is able to override the vetoed bill, which was originally passed in June. Mayor Nutter called the bill “illegal” in a letter to the council, noting that it violates both the Home Rule Charter and state law. VOTER ID

public policy objective, but at what long-term cost to current taxpayers, and at what longterm cost to the public school system?” he said. The current property tax abatement exempts 100 percent of the improvement costs for a period of 10 years. The proposed program would exempt the cost of the improvements for five years — a 100 percent exemption in the first year, then exemptions of 80, 60, 40 and 20 percent in the remaining fours years. The message sent by Councilman Goode is that everyone must pay his fair share of taxes in a time when the city’s revenue stream is stretched to its limits and the education system, which is funded by property taxes, faces ever-increasing budget deficits. The ordinance will undergo hearings by the Committee of the Whole, which includes all the members of City Council, sometime in the spring. If it passes — and assuming it is not amended in committee — the new abatement program would become effective in 2014, the same time other business, wage, sales and property tax reforms come into effect.

EDUCATION

ELECTION 2012

LEGISLATION

Report: Area Schools Earn Average Grades

Obama Maintains Leads

Casey Bill Aims to Help Pregnant Employees

Pennsylvania schools get a “C,” and New Jersey schools performed slightly better, according to 600 voters. The Philadelphia Inquirer poll, conducted by the bipartisan team of Global Strategy Group, a Democratic polling firm, and National Research, a Republican polling firm, found respondents rate their local schools only slightly better.

Nutter Vetoes Parking Tax

According to the September 9-12 Philadelphia Inquirer Poll, President Barack Obama holds an 11-point lead over Governor Mitt Romney in Pennsylvania. Voters named the economy the No. 1 issue in the election. The poll further emphasized Pennsylvania’s diminishing status in the presidential election, as it appears Pennsylvania voters are decided. President Obama is 14 points ahead of Governor Romney in New Jersey, according to an Inquirer poll last week.

If enacted, Senator Bob Casey’s Pregnant Workers Fairness Act would update state law to further assist women who work while pregnant. Officials said the legislation would benefit businesses as well as women, as turnover can cost up to 150 percent of an employee’s annual pay.

IN THE MEANTIME, IT IS THE LAW. IT IS ONEROUS. IT DOES CREATE A NUMBER OF BARRIERS... WE CAN RAIL AGAINST THE LAW, BUT THAT’S NOT GOING TO GET PEOPLE THE ID THEY NEED IN THEIR POCKETS. ’

Nutter

— PHILADELPHIA MAYOR MICHAEL A. NUTTER AT A MEETING OF THE PENNSYLVANIA VOTER ID COALITION, ACCORDING TO THE PHILADELPHIA INQUIRER

DEMOCRATIC NATIONAL CONVENTION

GOP Files Ethics Complaint Over Convention Trip Bill Local Republican leaders filed a complaint with the city Board of Ethics regarding Mayor Michael A. Nutter’s trip to the DNC in Charlotte. Mayor Nutter took along two aides, Lauren Walker and Tumar Alexander, as well as three Philadelphia police officers. Republicans Rick Hellberg, Michael Cibik and J. Matthew Wolfe believe this violates political-activity restrictions based on the City Charter. The complaint states that Mayor Nutter’s actions give “the appearance of impropriety due to the close connection between the partisan political activities at any national political convention and any alleged nonpolitical activities.” The Nutter administration responded that the aides were present to keep the mayor connected to activity in Philadelphia.

Accelerating success.

Realize your vision We know itâ&#x20AC;&#x2122;s all about location, location, location. And setting your sights on the next move. At Colliers International, we have the real estate expertise and strength to lead you into new territory locally or around the worldâ&#x20AC;&#x201D; taking you to new heights. Commercial real estate experts since 1920. Philadelphia, PA | Conshohocken, PA | Allentown, PA | Harrisburg, PA Mt. Laurel, NJ | Wilmington, DE | 215 925 4600 | www.colliers.com

The Path to Better Painting™ Always starts with CertaPro Painters®

CertaPro Painters® really is distinctively different – uniquely suited to paint and refurbish commercial properties. Staffed with people who know that a great quality paint job includes outstanding customer care. Services and safety that are second to none. With procedures and reasonable pricing that stand head and shoulders above anything that you’ve likely experienced before.

Residential. Commerical. Interior. Exterior.

1-800-462-3782

www.certapro.com

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

IDEAS

Businesses Can Learn From Obama, Romney Campaigns

Andrejs Penikis is Social Media Manager for Stream Companies, a full-service advertising agency in Philadelphia. His past experience includes managing social media for a Philadelphiaarea Congressional campaign. His Twitter handle is @Penikis.

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

We often hear that politicians have a lot to learn from business. But what can businesses learn from politicians? In the case of digital marketing strategy for the 2012 Presidential election, quite a bit. The Obama and Romney presidential campaigns have a very short window and finite resources to persuade a majority of American voters that the product they are selling is the one the public should buy on November 6th. What are they doing that anyone marketing anything should be doing? 1. Take digital marketing seriously. Both campaigns are devoting serious resources to social media and digital marketing. The Obama campaign spent $31 million on digital ads through June (latest available data), while the Romney camp spent $8.1 million. Romney has ramped up his digital efforts since the convention, however. Zac Moffatt, the head of Romney’s digital efforts, says that his digital staff now exceeds 100. (Moffatt also thinks digital spending will be on a par with television spending in 2016.) 2. Know what your goals are. Both campaigns are focused on two goals: persuasion (awareness) and mobilization (conversions). The Romney campaign is more focused on persuasion, as they have to convince independents, as well as many Republicans, that Romney is the clear choice. As the challenger, Romney still has to be concerned with “telling his story,” or letting voters know who he is. The Obama campaign is more concerned with overcoming the Republican financial advantage. They need to increase donations and recruit volunteers to offset the Super PAC money that is tilting the money advantage toward Romney. 3. Choose your social media platforms strategically. Your goals have to dictate which tools you choose. You can’t afford to try to be everywhere. You have to concentrate your resources where they will be most effective. Both campaigns have focused their digital strategies to support their goals. While the Obama campaign has a presence on virtually all social media platforms (they’re on MySpace, for Pete’s sake), their focus is on Facebook, Twitter and YouTube. They have also developed a special web-based and mobile dashboard to harness the energies of their hardcore supporters. The Romney campaign has a similar initiative, but it’s not quite as sophisticated.

But because the Romney camp is less reliant on volunteers, their approach makes sense. The Romney digital team also focuses on Facebook, Twitter and YouTube. They have been criticized for failing to devote enough attention to building their social media communities heretofore, but, as mentioned above, they’ve have been making a greater effort since the convention. Mitt Romney’s Facebook Page 4. Use social media to listen to your target audience and to mobilize them. Neither campaign expends a lot of effort engaging with their fans and followers on social media. They leave it to regular folks to respond to one another. But they use social media, particularly Twitter, to engage with the other side and to get feedback on events in real time. Both campaigns monitor Twitter, Facebook and Google to get real time analysis of popular reaction to events as they develop. (Who has time to wait for the evening news, much less for polling data?) But they also work to shape that reaction by mobilizing their supporters. Barack Obama’s Twitter Page 5. Keep your eye on the numbers, but don’t obsess about them. Obama’s campaign has eye-popping follower numbers, eclipsing Romney’s numbers. But Romney’s engagement numbers have lately been relatively stronger than Obama’s. So each side can claim superiority in public, while trying to determine their actual meaning in private. Once they draw their conclusions, they can adjust their tactics accordingly. 6. Go after the long tail. Political campaigns have long excelled at market segmentation. The traditional sorts of appeals to “Women for Obama” and “Veterans for Romney” have been taken to new heights by the Obama campaign this year. The Obama campaign strategy is built around appeals to specific demographic groups and they have integrated social media into this strategy very successfully. But more significantly both sides are exploiting the

staggering amount of individual tailoring that is possible with contemporary digital ads, thanks to big data. 7. Think outside the box. None of these strategies were learned in school or found in a book. They grew from the goals laid down by campaign strategists and were built upon the very limited experiences of the past. There’s a whole lot of trial and error going on here. Both sides have been very nimble, willing to change approaches that are not working and try new things. Social media is especially suited for this approach, since it is so transitory. What’s the half-life of the average Facebook post? One recent study put it at 18 hours. A tweet? Try four minutes. So changing course with these platforms is not like changing course for a super-tanker or a national television ad campaign. Let’s not exaggerate the significance of the digital campaign. It’s just one part of the overall campaign and it is unlikely to determine the final outcome. I would argue that it is growing in importance every election. Especially in an election that may hang on a handful of votes in a half-dozen states. Digital marketing is now a critical part of any marketing campaign. Businesses, as well as Presidential campaigns, ignore it at their own peril.

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

BY MICHAEL JACOBS

ennsylvania long ran in the middle of the pack of the horse racing industry, but Parx Racing in Bensalem will do something September 22 no other track in America has done outside the Breeders’ Cup World Championships: Host two thoroughbred races with $1 million purses on the same day. With the Grade II Pennsylvania Derby for 3-year-olds and the state’s first-ever Grade I race, the Cotillion for 3-year-old fillies, each paying a total of $1 million to the top finishers, Parx and Pennsylvania are surging toward the front of the racing world. “I think they just highlight the improvement in the quality and the financial solidarity of the racing industry in Pennsylvania,” Bob Green, the chairman of Parx owner Greenwood Racing, said of the Derby and the Cotillion, which highlight a $3 million day for racing prize money. Scheduled competitors include last year’s champion 2-year-old filly, My Miss Aurelia, and this year’s leading 3-year-old filly, Questing, in the Cotillion and a rematch of Travers Stakes co-winners Alpha and Golden Ticket in the Derby. Meanwhile, competitors are lining up for an even higher-stakes race that starts November 15, when applications are due to the Pennsylvania Gaming Control Board for the right to pay $50 million for a slot license, $16.5 million for a table game license and hundreds of millions of dollars in construction costs to open the second casino in the city of Philadelphia. “Philadelphia will never be a ‘casino city,’ ” said Alan Greenberger, Philadelphia’s commerce director and deputy mayor for economic development. “Like other major cities the world over that have casinos, Philadelphia will remain a vibrant and diverse city that happens to have two casinos in it.” For a while this summer, it looked as if Philadelphia would be a city with only one casino. There was talk in the legislature of pulling the city’s second license, stripped from the original awardees in late 2010, but the Gaming Control Board decided in July to stick with the city. “The number of good, middle-class jobs, with benefits, is significant at a time when such jobs are scarce,” Mr. Greenberger said in explaining the importance Mayor Michael Nutter placed on keeping the license. He said the second casino, wherever it goes, should produce at least as many jobs as the city’s first casino, SugarHouse in Fishtown, which has about 1,000 full- and part-

time employees and anticipates hiring 700 construction workers for an expansion that would add 500 permanent casino employees. The Gaming Control Board expects to take most of 2013 weighing the massive license applications, including holding hearings in Philadelphia. Mr. Greenberger said the city has offered to help analyze proposals. He said sites vary in their potential to drive commerce beyond the casino’s doors, and “the ability to spur economic development will be one of the city’s key criteria in analyzing proposals.” Mr. Greenberger also said the city’s experience with SugarHouse, which will mark its second anniversary the day after Parx’s $3 million race day, indicates that “fears about traffic and crime are unfounded.” Two developers have announced plans to bid for the casino. Tower Investments CEO Bart Blatstein was first out of the gate, unveiling a proposal in the spring to build a 55,000-square-foot casino on Callowhill Street as part of a $600 million project stretching from North Broad Street to North 17th Street. New York developer R. Donahue Peebles told The Philadelphia Inquirer in May that he would also seek the license, although he didn’t specify a site. The Inquirer has speculated about other bids and locations, including an idea to renovate the SS United States cruise ship into a casino moored in the Delaware. Mr. Greenberger said the mayor is waiting to see the proposals before stating any preferences, but the proximity of Mr. Blatstein’s site to City Hall isn’t a positive or a negative. For Casino-Free Philadelphia, wherever the casino goes, it will be a negative. “You’re not going to see most of the negative economic impacts,” said Dan Hajdo, a board member with the group, which he said has an active email list of at least 3,000 people. He said those costs come from employee absenteeism, lower productivity and higher unemployment, among other problems related to gambling addiction. Mr. Hajdo noted that no one has tried to put a number on the actual costs since SugarHouse opened, but the Pennsylvania Intergovernmental Cooperation Authority in 2007 said pathological gamblers could cost the city $200 million a year, based on an estimate from the Mayor’s Gaming Task Force of as many as 9,450 pathological gamblers in Philadelphia. National studies have estimated that pathological gamblers make up 1 percent to 2 percent of the adult population and that the figure is higher within 50 miles of a casino. A second casino likely will add to the costs by spreading gambling addiction, he said.

HOW THE BE CASINOS PAI OFF FOR PA. Plenty of vocal detractors remain, but slots and table games are in Pennsylvania to stay. They’ve brought with them plenty of jobs, a significant secondary economic impact and not only helped to save the struggling thoroughbred horse racing industry, but elevate it into a prominent spot on the national stage. And there’s more to come.

REGIONSBUSINESS.COM

ET ON AID A.

20 SEPTEMBER 2012

Space in a Crowded Market The Philadelphia area probably will have five casinos before the end of 2014, but with the casinos as far as 33 miles apart, Philadelphia will never compete with Atlantic City to be Las Vegas East. But Philadelphia still is a significant gaming market, said Bob Green, the chairman of Greenwood Racing, which owns Parx in Bensalem and whose New Jersey interests include the Atlantic City Race Course. “We see our principal business as being within a 50-mile radius of the facility—people not getting on an airplane, but people willing to drive for an hour and enjoy the facilities that we offer,” Mr. Green said. “It’s much more of a local market for us.” That’s not to say you won’t find veterans of gambling destinations working in this market. Wendy Hamilton, the general manager of SugarHouse Casino, told Smart Business magazine in the spring that the tough times in Atlantic City and Las Vegas allowed her to hire top casino experts, who in turn brought in more veterans of big casino markets. “Our SugarHouse team members set us apart,” Ms. Hamilton told Region’s Business. “They have voted SugarHouse one of Philadelphia’s best places to work, and I would vote them Philadelphia’s best employees.” Valley Forge Casino Resort opened in March with Sal Scheri as CEO under a consulting contract, and he later returned to Las Vegas’ WhiteSand Gaming. Valley Forge’s new president and CEO is Mike Bowman, a 30-year veteran of the hospitality and gaming industry whose experience includes a decade as an executive with Harrah’s in Atlantic City. “The world of casinos is constantly shifting as more states create multiple gaming locations, each with their own character and audience,” said Alan Greenberger, Philadelphia’s deputy mayor for economic development and commerce director. “What is clear is that Philadelphia casinos offer an additional amenity to visitors to the city who are here for any of the numerous other attractions the city offers.”

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

Diversity in Hiring, Spending, Philanthropy Part of Casino Story The Philadelphia area’s four casinos spent more than $115 million with local businesses in fiscal 2011-12. The Pennsylvania Gaming Control Board’s annual diversity report included casinos’ construction and nonconstruction spending with local businesses, defined as those in a casino’s home county and the contiguous counties. Valley Forge accounted for almost half that spending as it worked toward its March opening. The King of Prussia casino used local businesses for $15.4 million of the $30.8 million it spent on nonconstruction services and $36.1 million of $36.4 million on construction. Harrah’s Philadelphia spent $25.7 million of its $33.6 million in nonconstruction expenses and $19,044 of $2.9 million in construction costs with local businesses. After spending $78.7 million locally on construction in 2010, SugarHouse went local for $2.3 million of its $4.1 million in construction spending in 2011-12 and $12.8 million of its $21.2 million in nonconstruction expenses. Parx was less local in its spending: $9 million of $37.1 million for construction and $6.1 million of $49.8 million for nonconstruction services. The focus of the diversity report, released September 12, was on people, not money. The report found that three of the four local casinos are more racially diverse than their host counties, and all are more diverse than the average for Pennsylvania’s 11 casinos. Harrah’s had 49 percent nonwhites among its 1,441 employees June 30, the end of the fiscal year, compared with 44 percent a year earlier.It’s the most racially diverse casino staff in the state. By comparison, 72.5 percent of Delaware County is white. SugarHouse had the second-mostdiverse staff in the state, with 47 percent nonwhites among its 1,098 employees, up from 41 percent a year

earlier. But the casino was less diverse than Philadelphia County, which is 43.4 percent black and 41 percent white. The area’s newest casino, Valley Forge, ended fiscal 2011-12 with 43 percent nonwhites among its 1,185 employees, compared with a Montgomery County population that is 81.1 percent white. The area’s oldest casino, Parx, matched its fiscal 2010-11 diversity with 33 percent of its 1,744 employees nonwhite; Asians made up the biggest minority group at 15 percent. The population of Bucks County is 89.2 percent white, 4.3 percent Hispanic, 3.8 percent Asian and 3.6 percent black, according to the census data used by the gaming board. Parx’s total employment was down 301 workers, or 14.7 percent, from 2,045 a year earlier. Harrah’s workforce was unchanged, and SugarHouse grew by eight employees. Statewide, casinos employed 16,406 people, 29 percent of whom are minorities, 42 percent women and 89 percent Pennsylvania residents. “Evidence of the casinos’ commitment to promoting diversity in employment, purchasing and philanthropy as set forth in the statute is clear and convincing,” Mozelle Daniels, the gaming board’s diversity director, said in a news release. All four of the local casinos skew toward white men in management: AZkkZaÌlÈ,- i^k\^gm _^fZe^% ,- percent minority. Ln`ZkAhnl^È,1 i^k\^gm _^fZe^% 34 percent minority. OZee^r ?hk`^È,0 i^k\^gm _^fZe^% 21 percent minority. IZkqÈ,. i^k\^gm _^fZe^% ,) i^kcent minority. As for Pennsylvania residents, 77 percent of the employees at Harrah’s, 67 percent at SugarHouse, 85 percent at Valley Forge and 81 percent at Parx live in the commonwealth.

Before & After: Above, the east entrance to the Philadelphia Park racetrack in 2006. Below, the entrance to the Parx Casino complex.

Mr. Green disagrees. Not only have casino taxes exceeded the projected property tax relief, he said, but also “the industry has been very well regulated. None of the problems that were put forward by opponents of the legislation have ever materialized.” Mr. Hajdo said he was disappointed but not surprised that Mayor Nutter, who expressed opposition to casinos when he was first elected, fought to keep the second license, although “we wouldn’t wish it on any other part of the state.” That second casino, likely to open in 2014, will join an increasingly crowded gaming market. When Gov. Ed Rendell signed Act 71, the Pennsylvania Race Horse Development and Gaming Act, on July 4, 2004, the legal gambling options in the Philadelphia area consisted of thoroughbred racing at Parx, then named Philadelphia Park, and the state lottery. Parx added slots late in 2006, and Harrah’s brought harness racing and slots to Chester by early 2007 at a facility that changed its name to Harrah’s Philadelphia this past spring. Both “racinos” added table games (blackjack, roulette, craps, poker) when they became legal in 2010. SugarHouse brought slots and table games inside the city limits two years ago, and the Valley Forge Casino Resort became the area’s fourth casino when it opened in King of Prussia this past March. Meanwhile, New Jersey is betting that a

trifecta of sports wagering, casino games and horse racing will help Atlantic City and the rest of the state rally in the gaming race. Pending a federal court fight, legal sports betting halls could be as close as Cherry Hill by December, putting more pressure on the Philadelphia-area casinos. Still, “the fact that there is active competition for a second license suggests that the market is not saturated and that Philadelphia remains an attractive location for a second casino,” Mr. Greenberger said. The new casino will have to be at least 10 miles from Harrah’s and Parx. How much of its business is cannibalized from existing casinos will be a surprise, Mr. Green said, but the casino itself will not be. “That was embedded in the legislation so that everybody knew that would be the outcome,” he said. The surprise is the license for Valley Forge. “That was not in anybody’s range of vision,” he said. “But that’s happened, and it’s there.” Valley Forge has one of the two resort casino licenses authorized in the state under Act 71. The license limits Valley Forge to 600 slot machines, compared with 3,000 or more at other casinos, and does not allow just anyone to walk in and start playing. You must stay at the resort, attend a convention there, patronize one of the other businesses or buy a membership. “Valley Forge is a unique presence in the greater Philadelphia gaming market,” said

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

SLOT MACHINES SAVED PENNSYLVANIA RACING.’ —JEB HANNUM

The Parx Casino in Bensalem, Bucks County features 3,500 slot machines. PHOTO COURTESY PARX CASINO

Valley Forge spokesman David La Torre, citing the resort amenities, the location near the national historical park and the King of Prussia Mall, and a convention center with more than 54,000 square feet of exhibit space and ample parking. He said “the overwhelming positive reception we’ve received” includes more than 75,000 members of the casino’s players club. “Word of mouth has been strong because people understand we offer something a little different. And we’re also proud that we’ve helped keep and retain over 1,100 jobs for families during a difficult economic time for our region and the country.” The Valley Forge location and the onsite Radisson hotel also allow the resort to put equal emphasis on attracting outof-towners and locals, Mr. La Torre said. By contrast, Mr. Hajdo said SugarHouse’s free shuttles don’t find any takers when they stop at hotels and the convention center in Philadelphia, but players from South Philadelphia hop on for the ride to Fishtown. “We have a diverse player mix from our entire region,” said Wendy Hamilton, SugarHouse’s general manager. “We are very pleased with our performance so far,” she said. “Our success is a direct result of having a fantastic, customer-focused team.” She added that

SugarHouse tops the state in win-per-slotmachine and win-per-table rates. Crime has not been an issue, Ms. Hamilton said, citing police Capt. Michael Cram’s testimony at the casino’s license renewal hearing last year. And Core Realty this month unveiled a proposal for a major family entertainment complex, including a 3,000-seat theater and a bowling alley, across the street from SugarHouse. The casino’s own expansion, which was supposed to start this summer, is on hold — not because of community opposition, but because of an ownership disagreement. According to testimony during a spring hearing in Delaware Chancery Court, the onset of the recession in 2008 forced the partners to scale back their $742 million plan for the casino and build a 51,000-square-foot facility for $395 million with 1,602 slot machines and 54 table games. The proposed $141.8 million expansion to 90,000 square feet, 3,000 slot machines and a poker room was not enough for RPRS Gaming, a Philadelphia-based limited partnership. Those owners sued the Chicago-based operating partners, HP Gaming Partners and High Penn Gaming, to force an ownership supermajority to approve the expansion, with the goal of an even larger, more expensive facility.

After two days of testimony in August, the lawsuit will return to court in early October, Ms. Hamilton said. She said all expansion decisions are on hold pending the resolution of the lawsuit. She also had to put comments about SugarHouse’s business on hold. Harrah’s couldn’t comment at all on its business because of a Securities and Exchange Commission-mandated quiet period related to some investors in parent company Caesars Entertainment’s leveraged buyout being allowed to trade their stock, spokesman Gary Thompson said. But Mr. Green, who played a key role in getting Act 71 passed, was happy to talk about “a spectacular success story.” When he and his partners bought Philadelphia Park in 1990, he said, they did not envision a casino. Their goal was to develop telephone and off-track betting, which they did. “I think the dynamics of the industry have changed sort of dramatically over the last 20 years,” he said. “Other forms of gaming started to appear in surrounding states, and we knew that we had to compete with that situation.” With tracks at risk of closing or cutting back and driving away horsemen, “Pennsylvania racing was really at a crossroads” in 2004, said Jeb Hannum, the executive secretary of the Pennsylvania Horse

Breeders Association. “Slot machines saved Pennsylvania racing,” he said. Mr. Green said Pennsylvania is No. 1 in the nation in tax revenue from its gaming industry, putting $1.45 billion into state and local coffers in fiscal 2011-12, and “we’re probably the largest creator of jobs in the last six or seven years.” Parx has benefited its immediate area by paying almost $18 million in local taxes on top of almost $200 million to the state last fiscal year alone and adding around 2,000 jobs since opening the casino. And don’t forget the ripple effect of bringing as many as 20,000 people to Parx in one day, Mr. Green said. He estimated that Bensalem and Bucks County have seen at least 50 restaurants, plus other small service businesses, open since 2006. “We meet regularly with the mayor and community leaders. There’s a local gaming committee we meet with and discuss our plans and any issues that may arise,” he said. Mr. Green said Parx — not traditional racing bluebloods in Kentucky, California, or neighboring New York, New Jersey and Maryland — is now paying out the highest annual purses of any track in North America. Much of the credit for spurring Parx to the lead goes to the people a parking lot away, sitting 24 hours a day, seven days a week at the 3,500 slot machines inside the Parx Casino. Roughly $17 million a month flows from the pockets of Parx players, through slot machines that cost 1 cent to $100 a spin, and into state and local government accounts. The slot earnings for Pennsylvania’s

28 Opposition to Second City Casino Planned Casino-Free Philadelphia plans to organize community groups to fight any proposals for the city’s second casino, but board member Dan Hajdo acknowledged that stopping the casino is unlikely. Instead, he said the group would like to see the Pennsylvania Gaming Control Board “step up, do its job and ensure that these casinos are sort of protecting the consumer and putting real constraints on how much they can take advantage of gambling addiction.” Some changes the group would like to see: Lmhi hû^kbg` ieZr^kl unlimited, no-interest lines of credit on the floor. =hgÌm ^q^fim \Zlbghl from the smoking ban. =hgÌm Zeehp +-(0 operation. Ikhfhm^ ma^ lmZm^Ìl l^e_&^q\enlbhg eblm% pab\a allows people to ban themselves from gaming facilities for one year, five years or life. The Gaming Control Board could add a prominent link to the self^q\enlbhg bg_hkfZmbhg hg its home page and require large notices at casino entrances. People opposed to the gaming industry want to “subject the industry to as many impositions as they can find, simply in the guise of, if you like, oversight or regulation,” said Bob Green, the chairfZg h_ IZkq <Zlbgh hpg^k Greenwood Racing. “The motives are more just a general opposition to the whole concept of gaming anyway, not to … help the public.”

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

horse racing industry as a whole from the lmZm^Ìl ** \Zlbghl mhii^] -/'0 fbeebhg bg Cner and August, the first two months of this fiscal year, according to the Pennsylvania Gaming Control Board, although some of that money will be diverted to the state’s general budget fund. The Gaming Control Board breaks the numbers down in its Racetrack Casino BenchfZkd Kîhkm _hk +)**' Ma^ \Zlbghl d^î -. percent of their gross slot revenues and pay .. i^k\^gm mh ma^ lmZm^ Zg] eh\Zebmb^l3 ,- i^kcent to the state’s general fund to cut property mZq^l4 . i^k\^gm mh ma^ lmZm^ >\hghfb\ =ôêhif^gm Mhnkblf ?ng]4 - i^k\^gm mh eh\Ze `ho^kgf^gml4 Zg] *+ i^k\^gm mh ma^ KZ\^ Horse Development Fund. Ma^ mZq _hk ^\hghfb\ ]ôêhif^gm ikh]n\^] .,) fbeebhg _hk ikhc^\ml Z\khll I^ggsylvania through the end of fiscal 2011-12. The 12 percent horse industry share grew _khf ,'1 fbeebhg bg +))/% ma^ r^Zk ma^ Õklm \Zlbghl hi^g^]% Zg] mh +00 fbeebhg bg +)**' Two-thirds of the money that pours into the Race Horse Development Fund becomes prize money at the state’s three thoroughbred and three harness tracks. From the launch of slot fZ\abg^l bg Gho^f[^k +))/ makhnà ma^ ^g] h_ +)**% 01. fbeebhg p^gm _khf lehm ieZr^kl mh racing purses. One result is a sharp increase in live racing. I^gglreoZgbZ aZ] 0./ ]Zrl pa^g mkZ\dl aê] kZ\^l bg +))/4 maZm gnf[^k khl^ mh 222 bg +))2 Zg] l^mme^] Zm 212 eZlm r^Zk' Ma^ Z\mnZe number of races has continued to rise, from 0%2.1 bg +))/ mh **%..2 eZlm r^Zk' Fhk^ kZ\^l mean not only more opportunities for betting and more reasons for people to go to the track to spend their entertainment dollars, but also more demand for Pennsylvania-bred horses to race. Slots haven’t just supported the race cards Zm IZkq% AZkkZaÌl IabeZ]êiabZ Zg] ma^ hma^k mkZ\dl4 ma^r aZo^ [^\hf^ ma^ ]hfbgZgm lhnk\^ of the prizes paid for live races. Ma^ mkZ\dl iZb] fhk^ maZg +*/ fbeebhg bg inkl^l bg +)**% ni +-0 i^k\^gm _khf +))/' But in the same period, the amount of money put into purses from betting on races dropped Zefhlm ,/ i^k\^gm% _khf ., fbeebhg mh ,- million. So if you raced horses in Pennsylvania in +))/ hk [^_hk^% Zefhlm Zee h_ ma^ fhg^r rhn won came from people who bet on races. If rhn kZ\^ ahkl^l ghp% fhk^ maZg 1) i^k\^gm h_ the money you win comes from people playing slot machines. That also means another casino without a kZ\^mkZ\d bg IabeZ]êiabZ bl Z lZ_^ [^m _hk IZkq and Harrah’s. Even if the new casino hurts their gaming revenues, it should help their racing revenues by increasing purses, drawing better horses and creating more betting

interest across the country. A glance at the thoroughbred industry’s America’s Best Racing website hints Zm ma^ ihm^gmbZe _hk IZkq to shine in the national spotlight: The site lists the Pennsylvania Derby, the Cotillion and a Grade III race at Canada’s Woodbine as the only graded stakes this weekend. If you are an owner or trainer looking to a run for prestige and top inkl^l% IZkq bl ma^ ieZ\^ mh be September 22. If you are a racing fan looking to watch and maybe bet on mhi ,&r^Zk&he]l È ma^ lZf^ group that ran for the Triple <khpg bg ma^ likbg` È rhn have to look to Pennsylvania. ÉBmÌl Z `k^Zm ^qZfie^ h_ how the industry has put Pennsylvania at the forefront of racing in United States,” Mr. Hannum said. “Pennsylvania is now one of the top racing states in the gZmbhg% Zg] :\m 0* \k^Zm^] that.” :e^q PZe]khi% ma^ president and CEO of the National Thoroughbred Racing Association, agreed. “Increased revenues from alternative gaming have Parx Casino recently welcomed to its grounds the internationally acclaimed helped position Pennsyl“Horse At Water” sculpture by British equestrian sculptor Nic FiddianoZgbZ kZ\bg` È Zg] IZkq Green. This sculpture of a regal 25-ton bronze horse stands head stands KZ\bg`% bg iZkmb\neZk È _Zk 34-foot high and is on American soil for the first time. From left to right: Parx more prominently on the Chairman Bob Green, Bensalem Mayor Joseph DiGirolamo, Parx Deputy national racing landscape Chairman Bill Hogwood, State Senator Robert Tomlinson and Parx CEO Tony lbg\^ +))-%Ê a^ lZb] bg Zg Ricci. PHOTO COURTESY PARX CASINO. emailed statement. “With hundreds of race dates and m^gl h_ fbeebhgl bg inkl^ fhg^r [^bg` hû^k^] maZg +. fbeebhg hg eZg]% bfikho^f^gml annually, Pennsylvania is not only a major Zg] ^jnbif^gm lbg\^ +))-% ma^ I^gglreoZgbZ racing state, but also home to major breeding Horse Breeders Association reported. operations and the jobs that go with them.” “The impact has been all the farms, big Those breeding operations are major ben- farms and small farms, that have been able to ^Õ\bZkb^l h_ :\m 0*% f^Zgbg` maZm ma^ \Zlbghl stay in business,” Mr. Hannum said. On the thoroughbred side, the Pennsylvania in the Philadelphia metro area are helping preserve green space and family farms across Breeding Fund has grown from paying out /'1 fbeebhg bg +))/ mh +*', fbeebhg bg +)**' the state. The breeding programs for thoroughbreds That’s more than New York has in its breedZg] lmZg]Zk][k^]l `^m Z Õq^] i^k\^gmZ`^ h_ ing fund, Mr. Hannum said, though New York the money slots contributed to the Race Horse also has a boost from slots now. Development Fund. That money, supplementThat money goes to people who breed ed by a portion of the wagering proceeds at the horses in Pennsylvania or own and race horses in the state that were born in Pennsylvania. mkZ\dl% aZl ikh]n\^] f^ZlnkZ[e^ ^û^\ml' The number of thoroughbred breeders in Ahkl^ [k^^]^kl fZbgmZbg .))%))) Z\k^l as agricultural land and have spent more ma^ lmZm^ aZl `khpg _khf Z ehp h_ ,1- bg +))/

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

Online Poker Debate Continues Pennsylvania’s addition of table games in 2010 brought legal poker to Philadelphia. That pleased the Poker Players Alliance, a national lobbying group that reports having 50,178 members in Pennsylvania. “Anything that promotes the sport of poker is good for the sport,” said Tripp Amick, the PPA’s state director in Pennsylvania. Parx in Bensalem has more than 60 poker tables, and Harrah’s Philadelphia in Chester has 35. SugarHouse plans to add a poker room when it gets the go-ahead for expansion. Poker is the rare casino game in which players compete against one another instead of against the casino. So unlike slots, blackjack, craps, roulette and other table games, the odds aren’t stacked against the players. Poker also is far less lucrative for the casino, which is why some casinos, such as Valley Forge Casino Resort, don’t deal poker but instead offer poker-inspired games that pit the players against the dealer. As a federal judge in New York ruled in August, poker is a game of skill, not a game of luck. “Skill, when sufficiently honed, makes the difference between winning and losing in poker,” Judge Jack Weinstein found in determining that federal anti-gambling law doesn’t cover poker. That ruling renewed the national debate over legalizing and regulating real-money online poker, the priority of the PPA. It’s a debate the national Republican Party engaged in by taking a stand against online poker in the party platform it adopted last month; the Democratic Party was silent on the issue. The PPA issued ratings September 12 of about half the Pennsylvania congressional delegation, based on votes and action on poker, any letters sent to constituents about poker, and interaction with the PPA. Here are the ratings from the Philadelphia area: Kîn[eb\Zg Cbf @^keZ\a% :' Kîn[eb\Zg IZmkb\d F^âZg% <' Kîn[eb\Zg Fbd^ ?bmsiZmkb\d% <' Kîn[eb\Zg Ch^ Ibmml% ?' You can see all the congressional ratings, as well as copies of letters from Sens. Bob Casey and Pat Toomey about poker, at theppa.org/state/pa. Meanwhile, some states are moving toward legal intrastate online poker. Nevada is leading that effort and is licensing online providers, starting with the South Point Casino in Las Vegas. Amick said he hasn’t heard of any push for intrastate online poker in Pennsylvania. From his perspective, he just wants to be able to play online legally. “This is an industry that wants to be regulated and wants to be taxed,” he said. “There’s plenty of money to be made and plenty of money to be taxed.”

29 to 561 last year, according to the Gaming Control million in 2006 to $96.1 million in 2011, according Board. Many of those are small operations, with the to Gaming Control Board data. The racing industry breeders averaging fewer than three foals each. received $229 million from slot revenues in 2011, The biggest addition to state breeders since 2004 more than double what the tracks collected from is Northview Farm, a longtime Maryland breeder in-state bets. that responded to Act 71 by buying an old dairy farm Out-of-state betting on Pennsylvania races, which in Lancaster County and investing $15 million to dwarfs in-state wagering, also dropped sharply in create one of the premier stallion farms in the mid- 2011. While the $594.2 million total for 2011 was Atlantic, Mr. Hannum said. The stallions there have more than 30 percent higher than the 2006 total, it included 2004 Kentucky Derby winner was down 10 percent from 2010’s Smarty Jones, who spent plenty of time record $660.7 million and was at Parx in Bensalem. below the collections from 2009 The state has produced at least 1,200 and 2008. foals a year since 2005, peaking at 1,365 “Looking at the universal picture in 2010 before falling back to 1,296 in across the U.S., very few tracks 2011. are financially viable,” Mr. Green Those numbers keep Pennsylvania said. “The main financially solvent among the top five states in the nation tracks are those that do have gamfor breeding thoroughbreds. ing.” Mr. Hannum emphasized that PennBut there’s no guarantee the money from slots will always go to sylvania-bred horses “are considered racing. among the best race horses in the world.” For the first six months of 2010, On the standardbred side, which 34 percent of the money dedicated breeds horses for harness racing, the WE HAVE A to the horse fund was redirected to picture isn’t as rosy because the national DIVERSE PLAYER Pennsylvania’s general fund; from demand for horses isn’t as great, said July 1, 2010, until July 1, 2013, the Standardbred Breeders Association of MIX FROM OUR general fund gets 17 percent. Gov. Pennsylvania lobbyist Linda Rhinehart ENTIRE REGION.’ Tom Corbett this year initially from the Harrisburg firm Wanner Asso- —WENDY HAMILTON proposed taking $72 million—30 ciates. SUGAR HOUSE CASINO percent—from the horse fund but She said the economy and industry wound up moving only $5 million conditions have cost the state some breeding operations that lasted generations, but to other agricultural efforts after intensive lobbying through the Pennsylvania Equine Coalition. others have taken their place. The proposed cut would have had a “devastating The Gaming Control Board reported that the number of standardbred breeders rose from 474 impact on purses and the breeding fund,” Mr. Hanin 2007 to 616 in 2010, then fell to 600 last year. num said, but the biggest effect wouldn’t have been Still, the number of yearlings nominated to race budgetary. as Pennsylvania-bred horses rose 50 percent from “It would have sent a signal to Pennsylvania and 1,200 in 2003 to 1,800 in 2011. everyone else that Pennsylvania wasn’t really a stable Ms. Rhinehart said Pennsylvania has a huge stake place to invest for racing, and it would have eroded in breeding harness horses, including Hanover Shoe confidence,” he said, noting that people made investFarms in Hanover, the most successful breeder in ments in the state based on the slot revenue. harness racing, and the world’s largest annual sale Mr. Hannum said coalition members such as the of harness horses, the Standardbred Horse Sale Co.’s Pennsylvania Horse Breeders Association met with weeklong Black Book sale in early November in Har- lawmakers, bought advertisements and produced a 10-minute video to educate the legislature about the risburg, when 2,200 horses will be auctioned off. Just as horseracing has winners and losers, so does benefits of the horse industry and about the commitPhiladelphia gaming. ment made with Act 71. The Gaming Control Board says the 6-year-old Act 71 was a promise to support racing and to precasino industry has created more than 15,000 jobs serve green space and family farms, Mr. Rhinehart paying living wages, but Casino-Free Philadelphia said. But “now that the money is there, people want says those jobs come at a high economic cost. People it. … Everybody has a lot of big ideas.” gambling in the four Philadelphia-area casinos in fisJust as people will cheer and gamble on the cal 2011-12 lost more than $1.1 billion. But localities million-dollar Cotillion and Derby at Parx on Sept. collected $39.8 million in taxes from those casinos, 22, so Mr. Green and others are betting on the gamand the state took in $470.5 million, preventing ing industry to overcome all handicaps and keep reduced services or higher taxes elsewhere. running strong. “The industry has fulfilled all the Even the racing industry has reasons to fear it will promises and expectations that were espoused for fade in the stretch. it,” he said. “I’m looking forward to virtually all of The amount of money wagered in Pennsylvania on the participants continuing to invest capital into the Pennsylvania races dropped every year but one from business. … We’re looking forward to a continuing 2006 to 2011 and fell 23 percent overall from $124.7 period of success.”

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

NJ Makes Case for Sports Betting What happens in a federal courthouse in Trenton this fall could boost a serious threat to Philadelphia’s casinos while also pointing the way to new business. New Jersey is defending a new sports betting law against the NFL, NBA, NHL, Major League Baseball and the NCAA before U.S. District Judge Michael Shipp. The law, enacted in January, would allow casinos, racetracks and the former Garden State Park site in Cherry Hill to take bets on pro and college sports. The federal Professional and Amateur Sports Protection Act of 1992 bans any new states from getting into the sports wagering business, but New Jersey says the federal law is unconstitutional because it doesn’t treat the states equally. The 1992 law gave New Jersey alone a year to enact sports wagering, but the state didn’t do it. Two decades later, with Atlantic City facing increasing competition from casinos in Pennsylvania and other states, Gov. Chris Christie decided the time was right. “I signed this bill into law because it is another way to continue to boost our casino and horse racing industries and encourage tourists to come to Atlantic City,” he said in May. “Those casinos have been feeling the competitive pressure,” said Bob Green, the chairman of Greenwood Racing, which owns Parx in Bensalem and New Jersey’s Atlantic City Race Course and Freehold Raceway. New Jersey’s legal gamble is particularly important to Greenwood and Caesars Entertainment, operator of Harrah’s Philadelphia. Like Valley Forge Casino Resort and SugarHouse Casino, Parx and Harrah’s could suffer if sports-crazy Philadelphians cross the state line to bet on games and do other gambling. But Greenwood and Caesars also operate Atlantic City facilities that could take Pennsylvanians’ sports bets. And Greenwood owned Garden State Park, which means the company could handle sports wagers in Cherry Hill. “Clearly, we would want to be part of any expanded gaming initiative that took place in New Jersey, whether in sports wagering or opening up further sites for gaming other than Atlantic City,” Mr. Green said.

If New Jersey wins a court battle to bring legalized sports betting to the Garden State, expect Pennsylvania to follow suit. BAISHAMPAYAN GHOS

New Jersey published proposed regulations in July and plans to release the final rules by October 1, when it will start taking applications for the $50,000 licenses. The state has promised not to let wagering start before December 1. Whether betting begins that day will depend on the court case, which itself could prove to be a fun spectator sport. The four pro sports leagues and the NCAA are asking for a summary judgment that the New Jersey law violates federal law and must not go into effect, and if Judge Shipp won’t go that far, they at least want a preliminary injunction. In their main motion, the plaintiffs invoke an idealized world that seems free of office pools, fantasy sports, free agency, performance-enhancing drugs, strikes, lockouts, franchise moves, ninefigure player contracts, billion-dollar TV contracts and the Web. “Amateur and professional sports are an integral part of American culture, particularly among the country’s youth who often look up to athletes as role

models,” the motion reads. Legal wagering in New Jersey “would irreparably harm amateur and professional sports by fostering suspicion that individual plays and final scores of games may have been influenced by factors other than honest athletic competition. … Once their reputations and goodwill have been compromised, and the bonds of loyalty and devotion between fans and teams have been broken, Plaintiffs will have been irreparably injured.” New Jersey has countered with a motion to dismiss the case, claiming that the sports leagues don’t have standing to pre-emptively enforce a federal law— that’s the job of the U.S. Justice Department, the opponent the state must face to challenge the law’s constitutionality. New Jersey both mocks the leagues’ shock that there’s gambling (even quoting “Casablanca”) and suggests that any legal bets would be a drop in the bucket of illegal wagers. “Anyone who has ever bet on a Super Bowl or participated in a March Mad-

ness office pool is aware of the enormous and growing $380 billion market for sports betting, yet the Leagues have experienced extraordinary success over the last twenty years,” the motion reads. “The Leagues are well aware that there has been widespread gambling on their matches for decades. As such, their made-for-litigation allegations of injury are simply ‘too implausible to support standing.’ ” The dueling motions are due for a hearing in mid-October. If New Jersey’s gambit succeeds, Mr. Green doesn’t expect its East Coast sports monopoly to last as long as its casino monopoly did. “I don’t think it would take too long for the Pennsylvania legislature to look at that situation and say that the industry, the gaming industry in Pennsylvania, is ideally positioned to offer that product and accommodate that business,” he said. “It would be just an added product to the product mix that’s already in place.”

pinnacle of printing With an unparalleled commitment to the highest standards for more than 50 years, we want to be your trusted printing and mailing company.

425 New Commerce Blvd. Wilkes-Barre, PA 18706

800.222.3283

www.bedwickandjones.com

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

WHERE ARE THEY NOW? James Greenwood Claim to Fame: Greenwood tells us that his greatest achievement was in 1985, when he sponsored the Pennsylvania Trauma System, setting up trauma centers throughout the state. But his time as the 8th district’s U.S. Representative from 1993-2005, where he led investigations into corporate governance at places like Enron and waste and fraud in government agencies, isn’t too shabby either. What He’s Up To: Greenwood is now the President and CEO of Biotechnology Industry Organization (BIO), located in Washington, D.C. The advocacy organization is made up of biotechnology organizations, state biotechnology centers and academic institutions that shape policy both nationally and abroad and conduct research to help advance healthcare, agricultural and industrial biotechnology products. The organization holds the largest conferences in the biotech field, most recently in Boston this past June. Save the date: the next BIO International Conference is this April in Chicago.

Their names were once regularly seen and heard across news outlets. Just because they’re not making headlines, doesn’t mean they aren’t making a difference. First of a series by Karen Fratti Faith Whittlesey Claim to Fame: Aside from serving in the Reagan Administration as Public Liaison and as the U.S. Ambassador to Switzerland, Philadelphians know Whittlesey as the Assistant U.S. Attorney, two term state representative, and Delaware County Council chairman in the early 1970’s. What She’s Up To: Whittlesey currently resides in Florida and serves as Chairman Emeritus of the American Swiss Foundation in New York City and serves on the board of the Reagan Alumni Association. She had a tea rose named after her in 2006 from the American Rose Society and won a Tell Award in 2011 for her contribution to American - Swiss friendship. Some attribute Whittlesey for popularizing that quote about Ginger Rogers doing everything Fred Astaire does, but backward and in high heels, to a speech she gave to Teamsters in the 1980‘s. In tribute, a book about her life and career called Backwards in High Heels: Faith Whittlesey, Reagan’s Madam Ambassador in Switzerland and the West Wing by Thomas J. Carty, Ph.D is being published this October with a release event at the Institute of World Politics in Washington D.C..

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

Lynn Yeakel Claim To Fame: Running against Senator Arlen Specter in 1992 in the aftermath of the Clarence Thomas Supreme Court confirmation hearings. Specter, defended the Supreme Court nominee and his questioning of Anita Hill, who accused Thomas of sexual harrassment, infuriated many feminists. Specter, at the time a two-term incumbent, won by less than 3 percent of the vote after a brutal campaign. What She’s Up To: Despite her unsuccessful political campaigns, Yeakel never stopped her fight for women’s equality as the Mid-Atlantic Regional Director of the U.S. Department of Health and Human Services. In the region, she’s chaired “Envisioning a Healthier Philadelphia,” a community coalition dedicated to Former Pennsylvania Governor Tom Ridge (far left), with British Prime Minister Tony Blair (center, left) Mrs. Laura Bush and New York Mayor Rudolph Giuliani (far right) at a joint session of Congress just nine days after the terrorist attacks of September 11, 2001. Gov. Ridge was named to the newly created cabinet-level position of Director of Homeland Security. WHITE HOUSE PHOTO BY PAUL MORSE

increasing access to health care, and the region’s Welfare Reform Team and the Child Health Initiative. In 2010, she was appointed to provide recommendations to the Governor on the Affordable Care Act. The bulk

Tom Ridge Claim to Fame: Pennsylvania’s two term governor from 1995 - 2001, where he pursued policy to “fuel the state’s advances in economic development, education, health care and the environment” before resigning to serve as the first Secretary of Homeland Security. What He’s Up To: Ridge has spent the past decade immersed in national security and veterans’ affairs. He is currently the president and CEO of Ridge Global. The consulting firm assists businesses and governments in managing infrastructure protection, emergency response and preparedness, and other security issues. He speaks often on national security, terrorism, and global engagement. He was appointed as the first Secretary of the Department of Homeland Security, when the department was created in 2003, and served until 2005. He’s the co-chairman, along with retired Gen. Tommy Franks of the Flight 93 Memorial Fundraising Campaign, dedicated to creating a memorial to those on Flight 93 during the September 11 attacks.

Mark Schweiker Claim to Fame: Took over as governor after Tom Ridge accepted the post of Director of Homeland Security. Former Governor Schweiker calls the 2002 Quecreek Mine rescue one of his most “triumphant” moments but his education reforms in the Philadelphia School District are something to be remembered, too. He shocked many by not running for governor in 2002. What He’s Up To: These days, Schweiker is Senior Vice President and Chief Relationship Officer at Renmatix, a King of Prussia based biochemical company that makes cellulosic sugar for biofuel markets. Schweiker believes Renmatix, and companies like it are destined to reinvigorate the state’s economy. That’s left to be seen, but the company has doubled its engineering and tech support staff since it moved into town last year. Before Renmatix, Schweiker served as CEO of the Greater Philadelphia Chamber of Commerce.

of her time since 2002 has been spent as director of Drexel University’s College of Medicine’s Institute for Women’s Health and Leadership where she founded Vision 2020, a national initiative to advance women’s economic and social equality by the year 2020. She’ll be waiting for you in Philly on August, 26, 2020 - the 100th year anniversary of the 19th Amendment - to celebrate Vision 2020’s successes. Her autobiography, A Will and a Way was published in 2010.

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

True Custom Construction Available at Belamour

EastSide,West Side,We’reAllAroundTheTown

East side condos: Pier 3, Pier 5, 22 Front, Society Hill Towers, The Bank Building,The Lippincott at Locust Walk,Independence Place, Hopkinson House, 220 W. Washington Square, Center City One.

West side condos: Academy House, The Rittenhouse Savoy, The Lanesborough,The Warwick, Parc Rittenhouse,The Barclay, The Dorchester, 250 S.18th Street,1820 Rittenhouse Square, 1830 Rittenhouse Square,1900 Rittenhouse Square, 220 W. Rittenhouse Square, The Rittenhouse, Rittenhouse Plaza, Wanamaker House, 250 S.17th Street, The Philadelphian.

The Bank Building: Brand new 2 bedroom plus den, 2.5 bath condo with high-end contemporary kitchen and baths, custom finishes throughout. 2025 square feet. $1,100,000.

220 West Washington Square: Entire floor home with 360 degree views including a Washington Square vista, amazing entertaining space, no detail has been left undone. 3720 square feet. $1,995,000

Society Hill Towers: Completely renovated and furnished corner one bedroom with dramatic city views, chef’s kitchen and designer bathroom. 803 square feet. $379,900.

The Barclay: 3 bedroom, 3.5 bath showplace, marble foyer, open living space, chef’s kitchen, high end appointments throughout. 3293 square feet. $2,900,000.

The Warwick: 3 bedrooms, 3 baths, 270 degree city views, open kitchen, lots of entertaining space, marble bathrooms. 2000 square feet. $1,050,000.

Parc Rittenhouse: Brand new 3 bedroom, 3 bathroom condominium with all rooms overlooking Rittenhouse Square, lavish finishes throughout. 1709 square feet. $1,475,000.

AllanDombRealEstate

PHILADELPHIA’S LARGEST SELLING CONDOMINIUM REALTOR ® WE COOPERATE WITH ALL REALTORS® 1845 Walnut Street, Philadelphia 215.545.1500 allandomb.com domb@allandomb.com

WRIGHTSTOWN TOWNSHIP Custom home on 2.6 acres ~ Over 5,000 square feet of luxury living space ~ Amazing finished lower level ~ 3 car attached and 5 car detached garages~ $725,000

UPPER MAKEFIELD TOWNSHIP Exceptional 5 yr young custom home with superb details & amenities ~ 5 bedrooms & 5.1 baths ~ Custom cabinetry and tile work, arched entries, Lyptus hardwoods, lavish master suite, finished walkout basement & more ~ $1,500,000

WARWICK TOWNSHIP Car enthusiasts and hobbyists must see! Two homes and outbuildings for the price of one! Historic stone home plus Carriage/Tenant house ~ Beautiful Bank Barn ~ Corn Crib ~ 2.11 acres ~ $539,900

Belamour

NEW CUSTOM CONSTRUCTION UPPER MAKEFIELD TOWNSHIP, PA 29 beautiful home sites (10 magnificent lots still to choose from) 1-2.5 acres Just 3 miles from I95 Pisani Builders Associates, Inc.

DOYLESTOWN TOWNSHIP New custom construction by Michael J Sullivan, Inc. ~ PERMITS ISSUED ~ BUILDING HAS BEGUN 1.25 acre lot ~ 3,400 square feett ~ 3 1/2 bath ~ 3 car garage. Quality amenities included ~ $599,000

Building packages starting from $1,200,000. Off-site locations also available.

DOYLESTOWN AREA Design your new home today with Lykon Custom Builders on 1.74 acre estate lot next to preserved land & open space ~ Central Bucks Schools ~ Personal attention from design to finish ~ Other lots available ~ from $649,990

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

COMMERCIAL HOT SPOTS

5th and Bainbridge Streets

This portfolio , located at 616-632 S. 5th Street, consists of twelve properties and 22,000 square feet. The site, formerly occupied by the John C. Paul Company Restaurant Supply, a Queen Village mainstay for more than 50 years, is to be developed into a state-ofthe-art mixed-use facility of apartments and more than 7,500 square feet of retail. Queen Village/Bella Vista has long been a strong residential community. This project promises to build on that while bringing a fresh street retail presence to one of the neighborhood’s core commercial strips.

1900 Arch Street

This new, mixed-use development by PMC Property Group includes 280 luxury apartments, private parking, a courtyard and more than 16,000 square feet of retail space. The site is just steps from the Comcast Center, Mission Grill and Logan Square.

1508 Chestnut Street

This 2,300-square-foot retail opportunity is located directly next to the Ellington Building on the busy Chestnut Street corridor. The block has achieved a resurgence as the corner of 15th and Chestnut has downtown’s second-highest walking traffic counts. The residential development that has taken place in the immediate neighborhood on Sansom Street as well 16th Street has helped revive the 1500 block, led by the anchoring of H&M at the corner of 16th and Chestnut. Neighboring tenants include Modell’s and Finish Line.

FOR INFORMATION ON THESE PROPERTIES, CONTACT PRECISION REALTY @ 215-300-9688 OR GO TO PRECISIONRG.COM

Special Delivery. To subscribe, call 877.700.6245 or 215.627.6397

REGION’S BUSINESS A JOURNAL OF BUSINESS & POLITICS

Q&A

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

SARAH LOCKARD’S

DELICIOUS WEEK

The twice-yearly Main Line Restaurant Week may be her signature event, but it’s really just an outgrowth of her mission for AroundMainLine.com - living and loving Philly’s Main Line. More than two dozen restaurants are expected to participate in Main Line Restaurant Week, which starts Monday, September 24 and runs for seven days. What’s the elevator pitch for AroundMainLine.com? I’m the ePublisher and CEO of AroundMainLine.com, Philadelphia’s first emagazine. We’re exclusively online. Our tagline is “living and loving Philadelphia’s Main Line” and that really sums up who we are and what we do. The Philadelphia media market is crowded. How did you make room for AML.com? I came from the publishing industry and grew up in Wayne on the Main Line. It was Memorial Day weekend of 2008 and I was walking through the Devon Horse Show. I looked around and thought, this needs to be online in a new and different way. I had just read how Facebook and Twitter were changing communication and I had an epiphany. Once I found the right web person, it all just came together. So social media was part of the initial concept? Yes and we have a huge audience of enthusiastic fans on both Facebook and Twitter. They ’ve come to expect that we’ll be daily sharing info, seven days a week, 365 days a year. Social media is evolving, it’s not static, so you constantly have to be a student. Something you’ve been doing for three months may no longer be relevant. If you’re in business, it’s just the world we live in. How does that make you different from a traditional media outlet? It’s such a huge commitment

because social media never sleeps. It’s a more continuous channel and people now expect us to be connected seven days a week, which is unusual in the publishing space. But it also gives us a lot of flexibility on how we can carve out a niche for ourselves and be different. How did you develop the concept for Main Line Restaurant Week, your signature event, which now happens twice a year? I came across an article in 2009 about suburban restaurant weeks and how they were exploding. I called my designer and said, “I have another web site I want to build.” He said, “that’s an unbelievable idea.” Now it’s Philadelphia’s largest suburban dining event and encompasses not just the Main Line, but all the western suburbs. It’s a unique community with the restaurants. For the other 50 weeks, they’re competing with each other. But for these two weeks, everyone is focused on celebrating the great chefs and celebrating the great restaurants and all the western suburban dining scene has to offer. What are the basics of the event? It’s a bi-annual event that starts on Monday and runs through Sunday, a true week. Restaurants offer discounted price fixe lunch and dinner. Lunches are less than $25 and threecourse dinners options are under $20, under $30 and under $40. Not everyone offers lunch, but everyone does dinner and some offer drink specials, too. We expect to have 25 to 30 restaurants involved this time around. The menus are awesome and the chefs really embrace restaurant week and you’ll see many seasonal offerings.

Connect with Sarah Lockard: AroundMainLine.com MainLineRestaurantWeek.com * Main Line Restaurant Week begins September 24. Twitter: @AroundMainLine Photo courtesy of Me Photo & Design LLC - MePhotoDesign.com

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

CHAMBER REPORT

CHILEAN AND AMERICAN CHAMBER OF COMMERCE

WORLD AFFAIRS COUNCIL OF PHILADELPHIA

PHILA. ALLIANCE FOR CAPITAL & TECHNOLOGIES

Chamber Celebrating Chile

Jeb Bush Plans Philadelphia Visit

PACT to Hold Roundtable on Technology, Security

The Chilean and American Chamber of Commerce of Greater Philadelphia will host “Cheers for Chile” September 27 at the Pyramid Club in celebration of Chile’s 202nd anniversary of independence. The evening of business networking, wine, appetizers and raffle prizes will begin at 5 p.m. Registration is open until September 26 for a $55 fee for non-members. FOOD EXPORT ASSOCIATION-NORTHEAST

Indonesian Trade Missions Planned Food Export–Northeast will host back-to-back Focused Trade Missions to Jakarta, Indonesia and Manila, the Philippines, to explore the growing Southeast Asian food ingredient market. Indonesian imports of U.S. food ingredients are expected to increase 10 to 35 percent in the next three years while the Philippines continues to be the largest food and beverages market in SE Asia and one of the fastest growing markets worldwide. The Indonesia mission will run October 22-24. The mission to the Philippines will be October 24-26.

Admiral Robert J. Natter and Florida Governor Jeb Bush, welcome President George W. Bush to a naval station in 2003. (U.S. NAVY)

Two-term Florida governor Jeb Bush will visit Philadelphia Friday to speak about education reform as a part of a series of discussions hosted by the World Affairs Council of Philadelphia. Gov. Bush will speak to the importance of raising

expectations for students, holding schools accountable and rewarding great teachers. Limited spots are available for a photo reception with Gov. Bush. Those interested in registering should visit www. wacphila.org.

The Greater Philadelphia Alliance for Capital and Technologies, or, PACT, will host a Technology Executive Roundtable from 8 to 10 a.m. September 27 at AMETEK in Berwyn. The free event will feature an interactive discussion facilitated by Matias Klien, area vice president of technology at McKessonHealth Solutions LLC, on security policies that will focus specifically on how to optimize protection for every security budget, establish company-wide policies and manage malware and data breaches. WORLD TRADE CENTER OF GREATER PHILADELPHIA

Economic Summit Planned The World Trade Center of Greater Philadelphia will present its 7th annual Tri-County Economic Development Summit from 8 to 11 a.m. September 28 at the Westin Hotel & Conference Center in Mount Laurel, N.J. Registration is open until September 24 and costs $85 per guest.

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

OPINION

Job Growth Strategies for Philadelphia

Finding Real Truth Behind the Headlines

As a new City Council session grow our economy. First, gets underway, we welcome the we support the long promopportunity to work with the ised wage and business Nutter Administration and tax reductions. If we are to members of City Council on truly unleash Philadelphia’s a shared agenda of economic entrepreneur spirit and growth and job creation. grow jobs, we must further Last year, Mayor Nutter reduce these onerous taxes. signed legislation to provide Additionally, we support the relief to Philadelphia busiimplementation of Actual Value Initiative (AVI), as nesses by reducing the BusiRob Wonderling is president and well as the sale of assets to ness Income and Receipts Tax, CEO of the Greater Philadelphia provide one-time pension which requires PhiladelphiaChamber of Commerce. relief. These efforts, taken based businesses to pay a Contact him at rwonderling@ together, will help provide significantly higher tax than greaterphilachamber.com. For additional resources for similar businesses located more information about the much needed city services. outside the city. We applaud Chamber’s public policy agenda, In an effort to generate the bill’s sponsors Councilman visit relayphilly.com additional revenue, the Bill Green and Councilwoman Chamber also supports legMaria Quinones Sanchez for their leadership on the issue. The legislation islation to create a city land bank. With more was a step in the right direction, but much than 40,000 vacant lots and buildings in the work remains to be done. City of Philadelphia, action is needed now to While businesses throughout the region bring them back into use. The City annually are seeing moderate growth, according to the spends $20 million to maintain vacant and Bureau of Labor Statistics, the city continues blighted properties, which fail to generate to lose jobs. In 2010, the city had an average revenue. of 657,000 jobs. In July of this year, that numWe believe that future job growth in our ber declined to 648,400. And as the nation’s region will be driven by the for-profit and unemployment rate continues to drop slightly non-profit sectors. In an effort to advance to 8.3 percent, Philadelphia’s hovers at an this agenda, the Chamber developed a list of principles which we believe will foster job alarmingly high 11.1 percent. Since the mid-90s, the City’s Five-Year growth and competitiveness. We use these Financial Plan has acknowledged Philadel- principles as a guide in reviewing legislative phia’s unusually high tax rates make it diffi- proposals at all levels of government. Some cult for the city to compete in attracting and of our principles are as follows: @ho^kgf^gm kne^l Zg] k^`neZmbhgl lahne] retaining businesses and residents. In 1996, Philadelphia began a program of annual, provide for safe and responsive business incremental cuts in the Wage Tax, Earnings operations, but should not be onerous, costly, Tax, Net Profits Tax, School Income Tax, and or out of context with competitive locations. @ho^kgf^gm fnlm [^ \hgl\bhnl h_ ma^ gross receipts portion of the Business Income and Receipts Tax. In 2003, the Tax Reform overall cost of doing business – taxes, fees, Commission laid out the facts: Philadelphia’s insurance, regulatory expense – so as to protax rates are substantially higher than major vide a competitive business environment. cities and nearby suburban municipalities. MZq^l lahne] [^ [khZ] [Zl^]% lahne] ghm When elected, Mayor Nutter’s Administra- target a particular industry segment, and tion was committed to aggressively reducing need to be shared equitably between business tax rates for businesses and employees across and citizens. @ho^kgf^gm Zm Zee e^o^el fnlm hi^kZm^ bg all sectors of the economy. Yet, due to the economic recession, plans to continue lowering an efficient way to maximize the services that it provides. taxes were delayed. JnZebmr h_ eb_^ blln^l bfiZ\m [hma ma^ Now is the time to rejuvenate our local economy by renewing the commitment to business environment as well as serve as a positive factor in talent recruitment. We must reduce taxes. This year, the Greater Philadelphia Cham- also play a constructive, supportive role with ber of Commerce and its members are sup- government efforts to address public safety porting efforts which we believe will help concerns.

crimes. The stock market A recent federal report works two ways and says more than half of everyone knows the violent crimes are not first: Use current inforreported -- 20 percent of mation to guess the which are because people future price of a stock. do not believe the police But the opposite is will do anything about it. also true: Financial In Oakland, using a information can give technology for pinpointus insight into current events. What we learn is ing urban gun fire often better for one rea- Bill Gunderson is a wealth ShotSpotter - only about son: If a CEO lies about manager, award winning author, 10 percent of gun shots his stock on his quarterly and frequent guest on local and are reported to the police. Gun owners have their reports, he can go to jail. national financial news shows. own sources: Their own Let’s look at news eyes. They see lots of vioabout cars and guns as two recent examples. lent crime and lots of people ignoring, The airwaves are full of happy talk excusing and condoning it. about electric cars, especially the Chevy Gun sales are exploding to record levVolt. After the Obama administration els. So much so, I wrote an article about loaned or gave GM $100 billion, report- it last year: Guns are Better Than Gold. ers could not tell us enough about what Six months later the company I wrote a great car this is. The spin continues about, Sturm Ruger, had to stop taking orders for new guns because they could today. Then someone at Reuters checked not make them fast enough. Some of the political people say it was the real numbers and determined GM was losing $49,000 on every car. And because they felt threatened by potenthe two biggest customers of the Chevy tial pending gun and ammo control out Volt are its two biggest stakeholders: of Washington. Maybe that was part of The federal government and GM itself. it. Take away the subsidies. Take away But the quarterly reports of Smith the artificial purchases. Take away all and Wesson and Sturm Ruger paints the rosy forecasts about the millions of a more complete picture: Most of the electric cars that will soon dominate the increase in sales for Sturm Ruger are highways. All that is left is a company guns for self defense, says Investor betting its future on a car few people Daily. want; depending on subsidies people The politicos and papers may say are less and less willing to tolerate. crime is down. But gun owners are seeLet’s look at guns. ing a big increase in mob violence, and After a recent spate of violent crime in also wondering why newspapers are so downtown Baltimore, a crime reporter eager to ignore it and police too willing lamented people just don’t know “crime to explain it away. statistics are down.” Some are using that information To quote the poet: Something is hap- to buy a promising stock. Others are pening here and you don’t know what it using it to protect themselves from what many papers and politicians say is, do you, Mr. Jones. The “something” here is crime. does not exist. But what quarterly stock There’s a lot more of it happening than reports tell us is real. reporters know or write about. Occasionally this information HOW TO SHARE escapes through the politically correct veil: The New York Times is just one Send comments, letters and essays of several large papers in the country to feedback@regionsbusiness.com. to write a story about how police are Opinions expressed by guest writers do refusing to take reports on some violent not necessarily reflect those of Region’s Business.

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

OPINION

Initial Angst Behind, Bet on Growth for Pa. Gaming Industry

here was plenty of hand wringing during the debate over bringing slots and table games to Pennsylvania. Despite the wailing and gnashing of teeth, the state did the right thing and forged ahead. In a time of strained state budgets and an overall economic downturn, the decision sparked development, job creation and new revenue streams for the state. The concern that this would all come a the expense of the horse racing industry now appears unfounded as the state prepares to host its first-ever $1 million purse race. And not just one, but two. On the same day. Certainly a sign of a healthy industry. The state also helped itself, setting up a tax structure that drives significant revenue to its coffers at a higher rate than most states. It’s effectively managed the expansion from slots to table games and controlled increase in the number of casinos. The latter has allowed everyone — developers, state regulators, etc. — an opportunity to learn from the experience of others. So the state got it right. Not perfect — there are plenty of flaws to be found and certain groups will point to incidents and numbers that paint the industry in a poor light as reason to rescind the entire gaming

industry in Pennsylvania. Thankfully, that’s not going to happen. The state must continue to work to improve its performance on all aspects of the gaming industry. That includes regularly assessing the tax and fee structures as well as the impact — both positive and negative — that casinos and gaming have on the neighboring communities and the state as a whole, especially as neighboring states wake up to the fact that revenue is seeping over their borders into Pennsylvania. However, that’s not the end of the story. The next step is to follow a course pressed across the river in New Jersey, where Governor Chris Christie is leading a charge to allow legalized gambling on athletic events in the Garden State. Pennsylvania needs to get on this bandwagon and do it immediately. If the state is going to allow slots and table games — and it rightfully is — there is no reason not to pursue sports betting as well. The idea of limiting legalized sports betting is ludicrous. Millions, if not billions, are waged illegally each year in the state. Legalizing it would only allow the state to tap into that revenue and offer a more controlled environment. It’s time to step up to the plate and continue this winning streak.

COMMENTARY FROM ACROSS THE WEB Region’s Business combed the blogosphere, the Twittersphere and other corners of the Web for interesting commentary over the past week or so. Here’s what we found.

Court Decision Disappointing Pennsylvanians will have to wait on that after the state Supreme Court issued a disappointing ruling on Tuesday that said the voter ID case had to go back to a lower court for more factfinding. Huh? The state is just weeks from Election Day. If the state’s highest legal officials had that much concern about how the law was being implemented, they should have granted an injunction to stop voter ID from going into effect on Nov. 6. EDITORIAL , 19 SEPTEMBER THE PATRIOT-NEWS

EDITORIAL BOARD CEO AND PUBLISHER | JAMES D. MCDONALD EDITORIAL DIRECTOR | KARL M. SMITH ASSOCIATE EDITOR | TERRENCE CASEY © COPYRIGHT 2012 INDEPENDENCE MEDIA 600 GERMANTOWN PIKE, SUITE 400 PLYMOUTH MEETING, PA 19462 610.940.1656 | WWW.REGIONSBUSINESS.COM

Location, Location Location Mitt Romney’s recent “47 percent” comment, made at the Boca Raton home of Wharton grad and part-76ers owner Marc Leder, has unleashed a media storm of controversy and raised numerous questions. Did he really intend to alienate 47

percent of the electorate? ... But from a business perspective, it seems that the media is missing the point. It’s not what Governor Romney said. It’s where he said it. That’s the lesson for us to understand.

@facthive 225 years ago on this day, the founding fathers signed the U.S. Constitution in Philadelphia, Pa.. 17 SEPTEMBER 2012

GENE MARKS 19 SEPTEMBER THEPHILLYPOST.COM

Teacher Strike Raised Valid Topic It’s time for all teachers to be realistic in considering how their teaching can be evaluated. It has been demonstrated that overly relying on student test scores leads to educators’ teaching to the test and, even worse, manipulating scores or otherwise cheating to get the results they want. But although safeguards must be implemented at every level to keep such abuses from occurring, test scores should have some bearing in determining which teachers are doing a good job and which ones need help.. EDITORIAL, 19 SEPTEMBER THE PHILADELPHIA INQUIRER

Romney’s GM Plan Was Better Republican candidate Mitt Romney says he would have allowed GM to file for bankruptcy protection without any taxpayer assistance. ...But the reality is that Romney’s position was more likely to result in longterm health for GM and the saving of more jobs here in the United States. MICHAEL BUSLER 19 SEPTEMBER THE PHILADELPHIA INQUIRER

Share Your Comments Send comments, letters and essays to feedback@ regionsbusiness.com. You can also reach Editorial Director Karl Smith at 610.940.1656.

20 SEPTEMBER 2012

REGIONSBUSINESS.COM

BY THE NUMBERS

$124,950 Average student debt for a graduate of a private law school in 2011.

$13,000

$3,000,000 The total amount of purse money at stake on September 22, including two $1 million purses - The Pennsylvania Derby and Cotillion.

Offered to local schools through The Beneficial Foundation’s competitive grant program.

$75,728

Average student debt for a graduate of a public law school in 2011.

$46.05

Median hourly wage for a Pennsylvania lawyer in 2009 according to a 2011 New York Times analysis. At that rate, it would take almost 36 weeks to match the debt incurred above at a public school and almost 68 weeks to match the debt from a private school. PHOTO COURTESTY OF PAUL KEHRER

0.36%

Percent of Americans who are lawyers.

Miles of bicycle lanes in Philadelphia. The city’s goal is 300 miles.

Miles of Interstate 95 located within Pennsylvania.

Number of casinos currently operating in Philadelphia and its Pennsylvania suburbs.

The number of lottery outlets in the 19125 ZIP code, including the SugarHouse Casino.

Number of McDonald’s restaurants in the 19125 ZIP code.

160,000

28,500

11,700

Square feet of the gaming area at Parx Casino in Bensalem, Bucks County.

220

Square footage of governor’s residence in Harrisburg.

84,000,000 Number of iPads sold as of June 2012.

350,000,000 Number of iPhones sold. The cost of a new iPhone 5 with 64 gigabytes of storage is about $399.

69,144

Announced attendance from the EaglesRavens game on Sunday at Lincoln Financial Field.

Square footage of historic Drumthwacket, the New Jersey governor’s residence.

45% 15.1%

Percent of U.S. adults with a smartphone.

6,646

Percent of Americans living below the poverty line, about 46 million people.

Number of Philadelphia police officers (as of August 2011).

36%

4,627

Percent of Americans who are considered obese.

Number of Pennsylvania State Troopers (as of August 2011).

A 20 minute drive turns married with children into entourage. step into epic 20 minutes from Philly

must be 21. gambling problem? call 1.800.gambler.

parxcasino.com

A Cresa tenant advisor talks business. Before we talk space, we talk business. Whatever you need space for, we want to know about the business goal behind it. We only represent tenants. We understand the business needs of tenants, and we take an integrated approach to addressing them. You can count on us to be shrewd in negotiation, rigorous in execution, and aligned—at every stage—with your business.

The Tenant’s Advantage

Cresa Philadelphia 610.825.3939 cresa.com/philadelphia One West First Avenue, Suite 201, Conshohocken, PA 19428