MARCELLUS SHALE & THE THE CITY’S TRANSIT RACE FOR GOVERNER SECTOR GETS GREENER
TURNING OBSTACLES INTO OPPORTUNITIES
Business, Public Policy, Perspective April 2014
Philadelphia Edition RegionsBusiness.com
WILL THE ELECTION SLOW THE ENERGY BOOM?
12 Pages of the Region’s Finest Real Estate
“Our dependence on foreign energy sources is our Achillies heel, not just in the realm of diplomacy, but in terms of our future as the world’s economic leader.”
8 Deal Book 12 Weekly Briefing 18 Put An End to Nonsense 20 Innovation Breakthrough Battery Technology ConKerr Cancer Upcoming Events 27 City Council Update 28 Capital Report 30 Legislative Update 31 Workplace Policy 36 Green Is the New Black 38 Running Against Marcellus Shale 58 Q&A: John Ehinger, CardioReady 61 Visions Transit-Based Development Protecting The State’s Environment Something New Under The Sun Foreign Students & Regional Growth 66 By The Numbers
On The Cover:
REGION’S BUSINESS Business, Public Policy, Perspective Philadelphia Edition Independence Media Corp.
President & Publisher: James McDonald
350 Sentry Parkway Building 630, Suite 100C Blue Bell, PA
Regional Editor: Michelle Boyles
Design: Jenny Lyndsey, Chris Snee Copy Editor: Denise Gerstenfield
Contributors: Kyle Bagenstone, Eric Boehm, Rosella LaFevre, Charlie Gerow, Lori, Armstrong Halber, Erin Kane, Scott Staruch
Advertising Director: Larry Smallcombe
© 2014 Independence Media Corp.
Copyright 2014 Independence Media Corp. All rights reserved. Use of material within without express permission of publisher is prohibited. Region’s Business is printed monthly and published online at www.regionsbusiness.com. The publisher makes no representations or warranties regarding the advertising appearing in its pages or its websites.
DEALBOOK LEADING CLOUD-BASED APP PROVIDER OPENS PHILADELPHIA OFFICE Following recent expansions in Atlanta and San Francisco late last year, iCore Networks has opened a Philadelphia location, adding 25 employees to the market. In a press release, the company cites the City’s burgeoning business climate and wealth of opportunities for its choice of location. The move also represents the company’s commitment to integrating with and serving the communities in which it operates. The Philadelphia location marks the company’s first expansion in 2014, after creating 100 new jobs nationally in the last 12 months. Boston and New York are targeted for expansion this year. iCore provides all-in-one cloudbased hosted application services to 100,000 customers.
CROSSPOINT AT VALLEY FORGE NEARS COMPLETION, GAINS TENANTS A joint venture by the Davis Companies and MIM-Hayden Real Estate Funds, the development of CrossPoint at Valley Forge from
CrossPoint At Valley Forge office facilities. 1970s era buildings into first-class office space is nearly complete. The 272,000-square-foot space has already signed three heavy-hitter tech industry tenants:
• Rovi Corporation, a global entertainment developer • ColdLight Solutions, a leader in advanced analytics and predictive technology • Teleflex Inc., a global medical device com-
pany With those businesses alone, the facility is now 60 percent leased. The $19 million redevelopment combined two outdated buildings to create a modern facade and two-story atrium lobby. Amenities include a fitness center, conference facilities, full service cafe, on-site management and covered parking among others.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 8
DEALBOOK MID-ATLANTIC HEALTH ACQUIRES PARKHOUSE COMMUNITY Following a unanimous decision by the Montgomery County Board of Commissioners to transfer operation of the Parkhouse care community to Mid-Atlantic Healthcare last October, the group recently announced the finalization of the sale, which totals $41 million. Three facilities – Parkhouse skilled nursing and rehabilitation center, Montgomery Meadows independent living center and Riverview adult day center in Royersford, PA – comprise the Parkhouse Community. They include 467 skilled nursing beds, 15 living units and the day center, all of which were previously owned by Montgomery County, PA.
UNIVERSITY CITY JOB PROGRAM RECEIVES CITIZENS BANK GRANT Citizens Bank Foundation announced the donation of a $50,000 grant for University City District’s West Philadelphia Skills Initiative Program that aims to connect area employers to un- and under-employed residents. Through a partnership with Drexel University, program participants receive
intensive skills training in medical assistance jobs. Upon completion of the six-month program, graduates are eligible for new jobs and matched with an employer.
DVRPC APPROVES MAJOR MONTGOMERY COUNTY ROAD PROJECTS The Delaware Valley Regional Planning Commission approved six Montgomery County road and bridge projects that were included with sweeping Pennsylvania transportation legislation passed in 2013. Approval was necessary to release the funds to the projects, which include the rehabilitation of both the Route 73 bridge in Perkiomen Township and the New Second St. bridge in Cheltenham Township, replacement of Upper Providence Township’s Second Avenue Bridge, total reconstruction of the Route 422 bridge over the Schuykill River and a wetland restoration project along with Route 309 corridor. The DVRPC action will also provide $50,000 to the Pennsylvania Turnpike Route 611 and Route 611 corridor studies, respectively, bringing the total of Act 89 funds for the region to $99.8 million in fiscal year 2014.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 10
EXECUTIVE BRIEFING DREXEL UNIVERSITY OPENS CYBERSECURITY INSTITUTE As part of an ongoing commitment to address challenges in big data and cybersecurity, Drexel University announced the opening of its Cybersecurity Institute, which will serve as a center for research, teaching and training. The Institute will bring together faculty, professional staff and researchers from across the University to study emerging cyber threats and risks, providing a resource for law and policy makers. It will also work to build industry partnerships to advance their cyber infrastructure protection and incident response. The Drexel University Cybersecurity Institute will occupy a 4,000-square-foot space within the school’s Science Center Building and includes a 2,500-square-foot research lab. Here, researchers and students studying cyber-risk management will work and train using cyber-attack simulations. State-ofthe-art computing capabilities will allow for hands-on experience in protection, defense and attack operations, without disturbing real-world networks. The creation of the Institute follows two
other Drexel initiatives to address cyber concerns; becoming a National Science Foundation Center for Visual and Decision Informatics in 2012 and creating the Applied Informatics Group in its College of Computing and Informatics in 2011. “With several of our academic strengths now
concentrated in our new College of Computing and Informatics, the time is right for the College, through the Cybersecurity Institute, to take the lead on interdisciplinary research and policy development that help keep America’s information systems functioning and secure,” said Drexel University President, John A. Fry.
Drexel President, John A. Fry, speaks at the Institute’s opening.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 12
SECTION NAME EXECUTIVE BRIEFING SECOND PHILLY HEALTHTECH PROGRAM ACCEPTING APPLICATIONS The region’s first healthcare accelerator, DreamIt Health Philadelphia, is currently accepting applications from startup teams around the world for its second healthtech program slated to begin in July 2014. The result of a partnership between Independence Blue Cross, Penn Medicine and DreamIt Ventures, the program brings promising healthcare startups together in the city of Philadelphia to work on a range of healthcare issues including hospital readmissions, cost
DreamIt Health dedicated space.
transparency, healthcare payments, clinical communications and mobile diagnostics. Last year’s inaugural DreamIt Health class graduated ten companies, eight of which continue to thrive in the region. In June, the group will select up to another ten early-stage healthcare companies from applicants worldwide based on the strength of their teams, market potential, access to resources like claims, clinical data and technology needed to shape and implement solutions. Companies selected to participate will convene for a fourmonth boot camp starting July 18, wherein the teams will work in a dedicated startup space at DreamIt Ventures headquarters on Market St. Teams will receive a $50,000 stipend, coaching from successful entrepreneurs, access to healthcare-specific resources to rapidly develop/test products and business validation applications. The boot camp will culminate in a Demo Day, during which leading investors and industry figures will gather to hear each team present their progress and future plans. Applications will be accepted through May 16 with selection anticipated within a month.
BENJAMIN’S DESK OFFERS HEALTHCARE TO STARTUPS, SMALL BUSINESSES Via a partnership with R-Health, Rittenhouse-based coworking space, Benajmin’s Desk, recently added healthcare to its list of member amenitites. Through the program, dubbed Benjamin’s Desk Health - Powered by R-Health, members will receive personalized primary care aimed at reducing out-of-pocket costs. The model empahsizes strong doctorpatient relationships and offers primary, preventive and urgent care in addition to chronic care management. Member companies are eligible for a discounted rate with no co-pays, deductibles or per-visit fees.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
EXECUTIVE BRIEFING ICON LUXURY APARTMENT RESIDENCE NOW OPEN A $50 million dollar investment from Federal Capital Partners, Alterra Property Group and Cross Properties went into redevelopment of the historic 1616 Walnut Building, now complete with the opening of ICON, Center City’s newest luxury apartment building. Listed on both the National Philadelphia Register of Historic Places, the structure dates back to the 1930s. The building’s reconstruction combines unique historical architectural finishes with modern amenities. The dramatic modern facade appears tall that its 25 story height and features 300-degree skyline views. ICON houses 206 luxury apartments in a variety of configurations, 160 parking spaces and an existing 23,000-square-feet of retail space. A range of concierge services for residents includes car service, personal nutritionists, bike share program, pet grooming station, sky deck and more are available for tenants. The community will also feature the country’s first WELL Signature Residences. Designed by Wellness Real Estate experts, Delos, the residences of the 9th floor of ICON
will offer fifteen health and wellness features such as advanced air and water purification, antimicrobial coatings on bacteria-susceptible surfaces and vitamin-c infused shower water.
Rendering of ICON at 1616 Walnut St.
VISIT PHILADELPHIA’S NEW MOBILE-FRIENDLY SITE Mobile traffic to visitphilly.com has increased by 325 percent in the last two years, accounting 3.1 million visitors in 2013. In response to consumer demands, Visit Philadelphia launched a new mobile platform that offers visitors access to all of the site’s features from their mobile device. Major upgrades have been made to the previous site that offered mobile users only a fraction of the full website’s 2,500 pages of content, all of which has now been optimized for mobile devices. Among the new features available are mobile mapping capabilities, festival roundups, top dining pick from area chefs, theme trip itineraries and top pick lists by subject, up-to-date news and events, and hotel and trip package search options. The new site utilizes adaptive technology to respond to the dimensions of the user’s screen, which allows mobile and desktop computer users to view exactly the same thing. VISIT PHILADELPHIA anticipates mobile traffic will make up close to 50% of its traffic this year, and they’re coming prepared.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 14
EXECUTIVE SECTION NAME BRIEFING LUXURY TIER CONDOMINIUMS THRIVING IN CENTER CITY In 2013 realtors found a dwindling volume of luxury-tier real estate listings with just half as many luxury properties in Center City in 2013 listed as in 2012. The positive effects of scarcity in the supply and demand curve played a key role in the success of Center City real estate last year. This year may carry the trend even further with many predicting a strong real estate market and increasing prices until 2018. Certainly, 10 Rittenhouse experienced a banner year of incredible sales success with only 2 of the 143 luxury condominiums remaining unsold. Scannapieco Development and Parkway Corporation’s 1706 Rittenhouse’s unique 31 single-f loor luxury residences are 100% sold. The Residences at The Ritz-Carlton ended the year with a 36-day period writing $9M in new contract sales. How does the above translate for the Center City real estate community? Consider as well that the new Comcast tower will bring 1,500 new jobs and high-level
executives to the area who will arrive with housing needs. There is no new residential high-rise construction currently underway in Center City today. However, two new projects were recently announced. Carl Dranof f w ill par tner w ith Los Angeles-based SBE Entertainment Group to build a 47-story, mixed-use boutique hotel and condominium tower at Broad and Spruce Streets. To take shape across from the Kimmel Center at a price-tag of over $200 million, it will include 129 luxury-tier residential condos to be released at an estimated $1,200-per-square-foot, with anticipated fall 2016 completion. On the heels of it’s success with 1706 Rittenhouse, Scannapieco Development Corporation announced plans to construct a luxury residential tower in the city’s historic district at 500 Walnut St. Award-winning architect, Cecil Baker, designed the 26-story tower that will face Independence National Historic Park. All this would indicate that Philadelphia real estate is very healthy. Scarcity typically favors the sellers in the scales of balance, which normally results in ris-
500 Walnut St. Roof
ing prices and that’s precisely what we’re witnessing. For the foreseeable future, the Residences at the Ritz-Carlton will be the only new luxury-tier condominium in which buyers will be able to obtain immediate occupancy until the Dranoff condominiums are completed. When there’s a keen sense of urgency and/or a fear of loss of surrounding listed properties, the market can’t do much but continue to improve. Many signs to point towards another very strong year of real estate sales in the residential luxury-tier market in Center City.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
EXECUTIVE BRIEFING PENNSYLVANIA RANKS FIRST IN THE REGION FOR CORPORATE FACILITY EXPANSION Pennsylvania’s gains in corporate facilities are garnering the industry’s attention. A national publication specializing in corporate real estate and economic development, Site Selection, recently ranked the keystone state fourth in Northeast region for new corporate facilities in 2013. The ranking is based on new corporate location projects that meet at least one of the following criteria:
• involve capital investments of at least $1 million • create at least 50 new jobs • add at least 20,000-square-feet of space Pennsylvania’s 348 qualifying projects topped the 334 qualifying projects of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont combined.The state also ranked fourth nationally for new or expanded facilities for the third year in a row.
Three metropolitan areas in the state also received recognition. The Greater Philadelphia Region ranked ninth among tier-one areas for successful projects, a total of 97. The Lehigh Valley area also ranked in the top ten metropolitan areas with 46 projects and the city of Altoona tied for first place among
tier-three metropolitan areas with 14 projects completed. Finally, for the third straight year, Pennsylvania was honored with the publication’s Governor’s Cup, given to the top state in each of seven regions.
CITY SEES RECORD-SETTING TAX REVENUES IN FEBRUARY 2014 According to the monthly Economic Report released by City Controller Alan Butkovitz’s office, Philadelphia collected nearly $27 million in sales tax revenues during the month of February, making it the highest single-month collection on record. The 2014 amount exceeds the previous record, set last February, by close to $2 million. Through the first eight months of the Fiscal Year 2014, the City collected almost $179 million in sales tax revenues into its General Fund. Yearly collections are currently $6 million above 2013 numbers. Average monthly collections have been steady at about $21 million since the sales tax increase from seven to eight percent took effect in October 2009. The report also showed that monthly Wage, Earnings and Net Profits taxes for both the City and PICA totaled almost $128 million and total FY2014 revenues for this tax category totaled almost $1.1 billion. The report notes that sales tax collections in February are typically higher than other months as it reflects revenues generated during the holiday season.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 16
EXECUTIVE SECTION NAME BRIEFING PHORUM 2014: FOCUS ON ENGAGING CUSTOMERS
horum is an annual technology strategy conference that examines a single, trending topic. Phorum 2014 will examine digital customer engagement strategies and solutions. The past decade has brought revolutionary change in how people connect with the world around them and consume the information they deem important. Not surprising to any of us who have purchased something on our smartphone or tablet, this has radically altered traditional buying behaviors. Organizations must adjust and expand communications strategies and marketing channels accordingly or face declining customer loyalty and threats from more innovative competitors. New software, services and tools have come to market to help companies effectively manage and optimize how they connect with their audiences around the globe. Hosted in Philadelphia on April 10, Phorum 2014 will feature leading National customer engagement
experts and practical advice from businesses that are already using customer engagement strategies to strengthen relationships with employees, suppliers and customers. Five headline speakers will present perspectives essential to understanding customer engagement and critical to formulating sound strategy. Phorum’s speakers include: > Aneesh Chopra, co-founder of EVP of Hunch Analytics and former U.S. Chief Technology Officer > Peter Coffee, VP and Head of Platform Research at salesforce.com; > Maggie Fox, Senior Vice President of Digital Marketing at SAP; > Dan Hilferty, President and CEO of Independence Blue Cross; and > David Pogue, leading consumer technology writer and commentator. In addition, Phorum 2014 will again feature the popular “Phorum Demo Pit”. Here, conference attendees get hands-on with nine specially selected customer engagement technologies being developed in the Greater Philadelphia area. Hosted by PACT and sponsored by Fairmount Partners and LiquidHub, Phorum 2014 will be held at World Café Live.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
MISCONCEPTIONS ABOUT ENTREPRENEURSHIP: PUT AN END TO NONSENSE In an era defined by constant and rapid change, we must all become more entrepreneurial. By Fred Dawkins
e are entering a New Era of Entrepreneurship where there is no room for prison think ing in a world dominated by rapid change. Embracing change requires resilience and adaptability which are key characteristics for all entrepreneurs. Unfortunately the existing stereotypes for entrepreneurs discourage countless people from embracing the role. These perceptions prevent too many from taking the leap of faith required to become one. The first step in breaking free is to dispel some of the myths that are holding capable people back at a time when they need to welcome the opportunity to create and manage their own careers.
IT’S ABOUT RESULTS Two of the most flagrant misrepresentations that discourage people are that entrepreneurs are gamblers who take reckless risks to achieve high rewards and that entrepreneurs need to fail in order to succeed. Many people are risk averse and most of us fear failure. These traits do not disqualify us as potential entrepreneurs. In reality entrepreneurship is not about the risk that you take but entirely about the results that you achieve. Being entrepreneurial relies on the determination to make things happen especially when many others don’t see that possibility. Becoming an entrepreneur is all about the mindset not the skillset. Entrepreneurs find the way to make things happen they don’t always know the way. Too many good opportunities die prematurely because people are affraid of risk. More people need to make the leap of faith based on their determination and the foundation of a viable opportunity. However, being prudent prevents you from
taking reckless risk and directs you towards managed risk which is the hallmark of free enterprise. Entrepreneurs are proactive and solve problems through determination not by taking unwarranted risk. Successful entrepreneurs always have a downside plan allowing for adjustment which mitigates risk. When they make plans they analyze a range of possibilities rather than marrying themselves up to a single goal or result. In this way they build a framework which helps them adjust on a timely basis. Put your best foot forward: at the very beginning establish the viability of your opportunity. Too much time, energy and money are spent trying to convert whimsical ideas into a sound business. A high tolerance for risk is not enough to make a bad idea succeed. This is the essence of the lean startup. Test your premise. Talk to your potential market. Get feedback and adjust. Manage your risk from the outset. Don’t plunge blindly ahead on the premise that risk is an integral part of the undertaking. To be sure there is risk but recognize it and manage it as best you can.
ABHOR FAILURE The concept that failure is a prerequisite for success is more nonsense and stems from rationalization by those who fail initially. Successful entrepreneurs abhor failure. For many of them the fear of failing is a powerful motivation. Most manage their risk effectively, anticipate problems, adjust quickly, bounce back from setbacks and manage to avoid failure – if they do fail they learn and move on. We all learn more from failure simply because we take the time to analyze it. In that sense setbacks do make you stronger and they only constitute a failure if we give up. On the other hand success is exhilarating and it masks our faults. Just as initial failure can set the stage for success to follow; initial success can lead to a sense of entrepreneurial infallibility. When that happens, as it does to too many, the critical things that built those initial achievements are often forgotten and ignored. In order to break down these established stereotypes we have to understand how they
evolved. Both derive from two specific types of entrepreneurs. First are the misfits or rebels who either cannot or will not conform; the gamblers to whom few of us can relate. Second and even more prominent are the tech entrepreneurs immersed in the world of venture capital where risk is high, failure is frequent and the rewards for success are dramatic. However Silicon Valley is not the center of the universe and these are not the definitive entrepreneurs; they are but two types of many, both removed from the traditional economy and the rock solid problem solvers that collectively form the engine that drives the economy. Those are the achievers that do make things happen especially creating jobs while big business is chasing lower costs around the globe.
MAKING A CHOICE In this new era, defined by constant and rapid change, we must all become more entrepreneurial. We can choose to establish an independent business or we can choose to become disruptors within the culture of big business or within the bureaucracy of big government. Collectively we are defining a new normal; one that is less stable and more dynamic. Regardless it is in our best interest to embrace the mindset of an entrepreneur, an attitude focused on action fueled by determination. We must indeed create and manage our own careers. Job stability is disappearing. The distribution of wealth is favouring capital not labour. Upward mobility is in decline. All of this means new and different opportunities. We can become the architect of our dreams or the victim of others’. Whatever you choose; don’t let misguided and outdated ideas limit your choices. Fred Dawkins is an entrepreneur with over forty years’ experience and achievements in manufacturing, retail, land development, consulting and import/export. He holds a B Com in commerce and finance and a M.A. in economics from the University of Toronto.
FFeedback , ,Ideas ??W . .FFeedback @R BBusiness .com eedback Ideas, ,PPerspectives erspectives Weewant wantto tohear hearfrom fromyou you eedback @Regions egions usiness .com 18
INNOVATION SOLID STATE BATTERY DEVELOPER TO CHANGE ENERGY STORAGE INDUSTRY A focus on research, budget and practical applications lead this start-up to create breakthrough technologies.
EVENTS Philadelphia Distilling Tour • Date: April 12, 2014
By Kyle Bagenstone
hen starting any company, it is important to have people with good business sense to help keep the end goal of market success front and center. But when a CEO self-describes herself and her company’s core team as a collection of “pointyheaded” researchers, it’s essential to make marketability downright deliberate. And that’s just what Ann Marie Sastry, CEO of solid-state battery developer Sakti3, has done. Since the founding of the Ann Arbor, Mich. based company in 2007, Sastry, a former engineering professor and researcher at the University of Michigan, has made it a point to make sure the company remains grounded while it chases a share of an energy storage industry worth hundreds of billions of dollars.
COUNT THE PENNIES “When we prototyped early on, we didn’t buy expensive, $5 million rigs to demonstrate our technology,” Sastry said. “We bought cheap stuff off eBay and hammered at it, to demonstrate that we could coax our technology out of inexpensive equipment. You can demonstrate technology on something expensive, but then it fails to scale.” The technolog y Sastr y is referring to is solid-state batteries, named one of M.I.T.’s 10 “breakthrough technologies” in 2011. In simplest terms, solidstate batteries are just what their name suggests; batteries that contain solid materials instead of liquid. For scientists, the excitement of the technology has to do with increased conduction of
ions and electrolyte performance. For the consumer, the excitement comes in the form of safer, smaller, cheaper, and longer lasting batteries.
although there were solid-state batteries that had been produced, they were mainly produced by techniques that were not scalable,” Sastry said. “We started to contemplate how to make battery cells that would not only have FOCUS ON THE FUTURE According to M.I.T., the [the right qualities], but also be technology could result in massively scalable. Interestingly, batteries two or three times more the first thing we ever tried powerful than the best lithium- worked, and at that point we ion batteries currently on the decided to start a company.” market. And with electric vehicle batteries presently selling for MAKE THE RIGHT CONNECTIONS as much as $10,000, producing It didn’t take long before the same amount of energy at a investors took notice. A University fraction of the cost or size presents of Michigan colleague introduced a big opportunity. Sastry to Samir Kaul, a partner “The current technology being at venture capital firm Khosla mass-produced is lamination Ventures. The introduction led battery technology. That’s what’s to a meeting with founder Vinod in your cell phone, laptop, or Khosla, which led to a $2 million electric or hybrid vehicle,” Sastry initial investment. said. “But with that technology, “They took a very early bet on us, it’s very difficult to get high energy because we [only] had concepts density and still accommodate and computational simulations safety and p a c k a g i n g that suggested what we were requirements to execute a cheap, proposing was possible. We had safe battery cell.” a prototype, but it was made on Sastr y is well-acquainted the wrong machine, with the with the technology. Holding wrong materials, and it only sort a Ph.D and master’s degree in of worked,” Sastry said, laughing. mechanical engineering from Six years of development later, Cornell University, Sastry led the moment of truth is still slowly two research centers in batteries approaching. Sastry says Sakti3 and bioscience during her time has developed working prototypes as tenured professor at the currently in the testing stage, and University of Michigan. has remained true to its origins In 2006, the National Science of ensuring the technology will Foundation funded a research work on a mass-produced scale. effort at the university to develop However, it could still be several a high energy density battery cell. years before the batteries are on While working on the project and the market. reviewing existing technologies, But the upside has also become Sastry recognized an opportunity increasingly lucrative. Sastry that would ultimately lead to the envisions the technology founding of Sakti3. transforming three industries: “What we found was that Continued on page 22.
• Location: Philadelphia Distilling, 12285 McNulty Rd. #105, Philadelphia, PA. Sample spirits & meet the distillers behind Bluecoat Gin, Penn 1681 Vodka, XXX Shine Whiskey, Bay Seasoned Vodka, and Vieux Carré Absinthe.
Philly Build Guild • Date: April 26, 2014 • Location: National Mechanics, 22 S. 3rd St., Philadelphia, PA. A monthly gathering of web professionals who enjoy chatting over drinks.
Ben Franklin Technologies Investment Briefing • Date: April 28, 2014 • Location: Pennsylvania Biotechnology Center of Bucks County, 3805 Old Easton Rd., Doylestown, PA Life Sciences investments.
PACT Membership Breakfast • Date: April 30, 2014 • Location: KPMG Office, 1601 Market St., Philadelphia, PA.
FFeedback , ,Ideas ??W . .FFeedback @R BBusiness .com eedback Ideas, ,PPerspectives erspectives Weewant wantto tohear hearfrom fromyou you eedback @Regions egions usiness .com 20
Joing fellow members, staff and board of directors for breakfast to review the benefits of membership.
INNOVATION HOLLOW & RIDGE FOUNDER SEIZES OPPORTUNITY, SEES FAST RESULTS Artisanal products aren’t just making a comeback, they’re taking over and a locally-based company is taking it’s share after just a year in business. By Rosella LaFevre
MAKING THE OLD NEW Three years ago, Ms. Dixon set Continued from page 20. . . . c on s u me r elec tronic s, automobiles, and grid power storage. W hile consumer electronics is straight forward - better batteries for handhelds a nd wea rable dev ic e s automobiles and grid storage offer opportunities for new growth tied to renewable energies. “One of the main reasons that people are not able to purchase low-cost electric vehicles is the cost of the batteries,” Sastry said. “With Sakti technology, there’s higher energy density, but also greater safety. That has a multiplier effect, where you can reduce or eliminate cooling, control, and power electronic systems.”
to work studying homeopathic medicine and aromatherapy under Dr. Joey Powers in North Carolina. As part of her training, she set out to develop oil blends she could sell; the business wasn’t the aftermath but part of the planning process. “It’s a lost art, it’s not a new innovation. It’s been around forever,” said Ms. Dixon of organic essential oil distillation.
BEYOND LOCAL RESOURCES Her products have been wellreceived on both a local and national level, currently for sale everywhere from popular retailer Anthropologie’s website to a boutique in Tokyo. They’re a hit in Rittenhouse Square and used to lull hotel guests to sleep with a lavender-scented pillow spray housekeeping spritzes on clean linens.
POCKET THE CHANGE Still, grid storage may offer the greatest opportunity. In layman’s terms, Sakti3’s batteries could provide an efficient place to store excess energy, particularly from renewable energy sources. In a 2009 report, investment research firm Piper Jaffray estimated $600 billion of spending on energy storage solutions by 2019. “The potential to integrate renewables into the energy grid mix is greatly increased by cheap, scalable, safe, high density storage,” Sastry said. “The wind doesn’t always blow, and the sun doesn’t always shine, so grid storage could obviate the need to spin up an entire power plant during peak load times.”
Still, Ms. Dixon said she has no ideal customer. “My market’s speaking to me and it’s all over the place,” she said. Perhaps one key to the product line’s success is its well-designed packaging. The bottles and labels read as definitively modern but with a good, old-fashioned twist. “Finding a look and design for what I was trying to convey was the hardest part and the longest part [of getting the business started],” Ms. Dixon said.
ORGANIC GROWTH Ms. Dixon has been in business for one year with Hollow & Ridge and plans to hire someone in the next year to help her with production processes such as bottling and packaging. “Right now, I’m up bottling until 4 a.m. but it’s all good,” Ms. Dixon said with a laugh. With prototype testing well under way, Sastry says the company is now considering its options for production, whether by expanding its in-house operations, working with an outside manufacturer, or offering limited licensing. Whichever route Sakti3 decides, Sastry realizes it may only be a few years before the technology is revolutionizing markets. And that’s an excitement not often encountered in a lab. “We started this company to change the world and improve people’s lives, and that’s a different exercise than writing a [research] paper,” Sastry said. “Great technology won’t solve a practical problem unless you keep an eye on what people really need.”
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com Region’s Business
Philadelphia Citizen Speaks: A New Generation of Political Leaders • Date: April 15, 2014
he production of essential oils is not new, but in a world full of chemical-laced beauty products, an all-natural essential oil company feels different. Issa Dixon founded Hollow & Ridge, a company producing and selling all-natural essential oils and beauty products derived from those oils, a year ago. Ms. Dixon takes a simple approach to the Hollow & Ridge product line: she sources responsibly-grown plant materials of the highest quality available and experiments until the right combination of therapeutic effect and pleasing scent is achieved. The oils are produced in small batches using a 20-gallon copper still she keeps on her property in Narberth, PA.
• Location: Benjamin’s Desk, 1701 Walnut Street, 8th floor, Philadelphia, PA. Join The Philadelphia Citizen Speaks to meet some of them for a discussion about creating and cultivating a new generation of political leadership.
Building Applications Using HTML5 • Date: April 17, 2014 • Location: Benjamin’s Desk, 1701 Walnut Street, 8th floor, Philadelphia, PA. Dave Voyles, a Technical Evangelist at Microsoft, will walk you through tools and frameworks like PhoneGap, IntelXDK, and App Builder.
PACT Technology Panel and Golf Outing • Date: May 19, 2014 • Location: ACE Conference Center and Golf Club, 800 Ridge Pike, Lafayette Hill, PA. Come hear from Technology Experts on what is going on in the Tech Industry.
SECTION NAME INNOVATION LOCAL NONPROFIT BRINGS TOGETHER CORPORATE AND COMMUNITY PARTNERS The CEO of ConKerr Cancer started with small stitches to make a network of opportunities available to children suffering from cancer. By Rosella LaFevre
hat do you do when someone you love, your child, has cancer and faces surgery, treatment and hospital stays? If you’re Wayne, PA-native Cindy Kerr and you have quilting and sewing skills, you sew a colorful pillowcase that will dress up a hospital room. Then you sew another and another, and you become the leader of a grassroots organization dedicated to improving the lives of children with cancer.
have gone to hospitals in the Philadelphia area. “This is about the life of the child while they’re going through it,” Ms. Kerr said. That’s also the motivation behind ConKerr Cancer’s annual pajama party held at the Please Touch Museum. The second of which took place in late March. For each $25 ticket purchased, a sick child gains admission and gets a ticket out of the hospital for one night of fun with family, friends and community members. HUMBLE BEGINNINGS The first annual ConKerr Cancer That is, in a nutshell, the story PJ Party brought out 500 people of ConKerr Cancer, a nonprofit and this year, Ms. Kerr expects that aims to provide a bright and to see more than 1,000. Swoop, cheerful pillow case to every child the Eagles mascot, will be at suffering with cancer or another the party, as well Philadelphia life changing illness. Ms. Kerr Flyers players Bob Kelly and is the founder, president and Todd Fedoruk. Some of the CEO of ConKerr, which has 130 children’s favorite animals from chapters all over the world and has the Philadelphia Zoo will be produced 860,000 pillowcases in there, and entertainment will be seven years. Of those, 120,000 provided by DJ Lady FX.
Philadelphia eagles mascot joins the conkerr cancer cause.
COMMUNITY SUPPORT There are many organizations that gather donations in support of finding cures for cancers and other diseases, but it was Ms. Kerr’s experiences helping her son, Ryan, who was diagnosed with osteosarcoma in 2002 when he was 12 years old, that led her to focus on improving the lives of sick children. “A child may hear about a cure, but what does that mean to him?” she said. The idea struck a chord when Ms. Kerr’s husband, Gavin, entered her into Martha Stewart Living magazine’s Dreamers Into Doers contest in 2007. A phone call about her win came five minutes after returning home from a doctor’s visit where the family learned that Ryan’s cancer was terminal. Ms. Kerr, Gavin, Ryan and his older sister, Ashley, went on Martha Stewart’s TV show. The following day, Ms. Kerr received 400 emails. Within a month, ConKerr had 30 chapters across the country. Now, those international groups sew pillowcases, launder the pillowcases and package them so that children with low immunity know they’re safe to use. These groups also go into hospitals with sewing machines and fabric; they teach the children – and sometimes even Mom and Dad – how to sew.
A BROADER REACH
Ryan Kerr never wanted the organization to be about him, and DONATIONS LARGE AND SMALL Ms. Kerr has respected his wishes, ConKer r sur v ives o n though there are little touches that corporate partnerships and the remind her of him. For instance, donations of smaller groups and there in the illustration in the top individuals who understand banner of the ConKerr Cancer the power of a child’s smile. website is a pair of red Converse. The cost to make a pillowcase Ryan always wore those red highhas risen from $3 to $11 since top sneakers of his.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 24
ConKerr Cancer started. Some of ConKerr’s corporate partners and sponsors include: Wawa, Teva Pharmaceuticals, The Please Touch Museum, Alex’s Lemonade Stand, Independence Blue Cross, Cancer Treatment Centers of America, Devereux Center for Resilient Children, Nemours/ Alfred I. duPont Hospital for Children and Children’s Hospital of Philadelphia. ConKerr accepts monetary donations through its website. Donors can give any amount they choose. For $100, donors fund a day of sewing for school children. In a small hospital or clinic, sick children and their families can sew pillowcases for a $150 donation, and a $200 donation funds a sewing day for sick children in a large hospital or clinic. Donors can also give fabric or complete pillowcases. The pillowcases mean so much to the children who receive them, and to their families. Kerr said she hears that children who have gone into remission hold onto their pillowcases while those who share her son Ryan’s fate are sometimes buried with their pillowcases. Other times, siblings hold onto the pillowcases for reminders of their lost brothers and sisters.
STATE SECTION NAME POLICY AUDIT OF ‘KEYSTONE OPPORTUNITY ZONES’ FINDS THEY ARE A TAXPAYER RIPOFF Is this city giving away get-out-of-taxes free cards to some businesses at the expense of myriad others? By Eric Boehm
otted across Philadelphia are nearly 3,000 acres where businesses get a free pass on paying state and local taxes. But the investment in special tax breaks is not paying
off for the city. Businesses in these “Keystone Opportunity Zones” get a bevy of tax breaks from the state and city government, including reductions in the corporate net income tax, earned income tax, property tax and business gross receipts tax. Projects also receive sales and use tax exemptions for certain purchases.
LIVING TAX-FREE The special tax breaks usually last for 10 years, though each KOZ is unique and some have longer periods of tax-free living. When the city first set up the KOZ program 14 years ago, it planned to make up for the tax breaks by applying a new wage tax on city workers and collecting more revenue in the long run because of increased economic activity. The only problem is that it will take 52 years for it to do so, according to a new audit of the program. “In short, each new job cost roughly $104,000 in tax credits,” said Alan Butkovitz, the city’s comptroller. “Our findings are consistent with studies in urban economics which indicate tax incentive programs such as KOZ are an ineffective tool for enhancing economic growth.” The wage tax has generated only $39 million in new revenue from businesses located in KOZs, against the $380 million in tax breaks the city has given away so far. Even so, the Keystone Opportunity Zone program is touted by the state Department of Community and Economic Development as “the number one economic development
strategy in the nation.” By eliminating state and local taxes within specific zones, the state claims it is driving development into areas where businesses would not normally locate and creating economic growth and development. In some cases, the exemptions are very narrow and written specifically for one business or location. Other times, whole sections of city blocks might be declared a “KOZ” in order to attract multiple businesses to a certain neighborhood. And considering Philadelphia’s reputation for high taxes – along with the state’s 9.99 percent corporate net income tax – there should be no surprise why businesses are interested in setting up shop in one of those zones. A business located inside a KOZ has a considerable financial advantage over a competitor located down the block in non-KOZ land.
At the state level, there is no annual assessment of the KOZ program and the Department of Community and Economic Development, which oversees the program, does not keep track of how much tax revenue would be collected if the tax breaks had not been given. In Philadelphia, the city’s Commerce Department shreds new and renewal applications after three years and does not convert them into electronic records. Neither Commerce nor the Revenue Department require KOZ participants to track job creation or capital investment in any verifiable form, the audit found. Estimates from DCED for 2012 showed 850 companies in KOZs statewide created more than 15,000 jobs and retained another 9,000. But those figures are not broken down by individual projects.
Another problem with the KOZ program is that it frequently gives tax breaks to businesses who don’t need them, Butkovitz said.He’s right. A PA Independent investigation into the KOZ program last year found that Urban Outfitters, a national clothing chain with more than 400 locations, got tax breaks from the city and state to finance a $200-million expansion of its Philadelphia headquarters and new distribution center to be built in Lancaster County.
And it’s impossible to account for the unseen damage that could be caused by the KOZ program: how many businesses might have succeeded on a level playing field, but were forced instead to compete with others who were given special privileges like not having to pay city and state taxes for a decade?
In Philadelphia, Butkovitz’s audit found that $176 million in KOZ benefits – about 45 percent of the total given away by the city – accounted for only 22 percent of the job growth. “Programs like the KOZ tend to subsidize firms in sectors that are already doing well under local economic conditions,” he said. But it’s easy for the state and city to close their eyes and say the program is a success, since neither does an effective job of keep records of KOZ investments.
Politicians like programs like the KOZ because they can give away tax breaks and get the credit for “attracting jobs” or “boosting the economy.” Giving away get-out-of-taxes-free cards to some businesses at the expense of others (to say nothing of the expense to taxpayers) is a fool’s game. Lower taxes across the board, for all businesses and consumers, would do more to generate economic activity in all parts of Philadelphia. But then they wouldn’t get to hand out those big checks and look like the heroes.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
CITY SECTION NAME COUNCIL A FEW BAD APPLES CAN RUIN THEIR CIDER: HOLDING DRILLING COMPANIES RESPONSIBLE Company’s maneuvers to shortchange Pennsylvania landowners cast a pall over drilling industry By Eric Boehm
t’s no secret that Gov. Tom Corbett is a friend to Pennsylvania’s growing gas industry. Gas drilling f irms were among the biggest sponsors of Corbett’s inaugural ball in 2011. They had a seat at the table in 2012 when he convened an expert panel to design tax and regulatory legislation for the industry. Corbett’s relationship with state Attorney General Kathleen Kane is pretty much the opposite. Kane, the first Democratic attorney general in state history, was elected largely on the promise she would investigate questionable practices by Corbett during his time as attorney general. She’s gone out of her way to gum-up Corbett’s efforts to pass a voter ID law and forced him to defend the state’s marriage laws by taking a pass on the case.
So when Corbett writes an angry letter to the CEO of one of the largest gas drilling companies operating in Pennsylvania – and then follows that up by asking Kane to investigate the same company – you know something is up. But that’s exactly what happened in February, when Corbett penned a letter to Robert Lawler, president and CEO of Chesapeake Energy, which operates more gas wells in the state than any other company. Corbett told Lawler that he had received complaints from leaseholders about “unfair and perhaps illegal” activities on the part of Chesapeake. The company was not paying the full amount to leaseholders who had given it the right to drill for gas on their property. In March, ProPublica quoted one resident saying his $5,000 monthly royalty checks had been slashed to $500, with no explanation. Others were threatened with lease termination if they questioned payments. The reduced payments were part of an
effort by Chesapeake to raise revenue after an unexpected drop in gas prices. It says the lower payments are the result of higher fees associated with a debt-restructuring deal. But doing so seems to have been illegal. Lawsuits in several other states already have forced the company to make up for underpayments to leaseholders and federal authorities are investigating. Corbett has asked Kane to do the same in PA, a rare moment for the two political foes to stand back-to-back. Much of state policy regarding the natural gas boom has been based on the good intentions of the companies coming into Pennsylvania to tap the natural resources. The goal has been to avoid unreasonably high tax/regulatory structures, encourage investment that will enrich residents and businesses, and hold companies responsible when they mess up. For the most part, it’s worked. But a few bad apples can sour the cider, particularly when one is a large company like Chesapeake.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
FROM NAME SECTION HARRISBURG
PENNSYLVANIA MOVES AHEAD ON ENERGY Just a few years ago, the keystone state imported the majority of it’s energy. Today, it ranks fourth in the nation for energy production. By Charlie Gerow
n the heart of the Industrial Revolution, Philadelphia earned the title “the workshop of the world.” As major rail lines, coal yards and factories sprouted up, the City’s fortunes rose. We became, and remained, a major energy hub for many generations.
THE GOOD OLD DAYS Happy days may, indeed, be here again. The greater Philadelphia region is poised to reclaim much of its former glory, thanks in large part to a booming American energy renaissance – lead in no small part by Pennsylvania. The Keystone State is extremely blessed, both by its energy resources and proximity to the major metropolises along the eastern seaboard. Our state has a competitive advantage few can match, with the world-class Port of Philadelphia serving as a gateway to international trade. Pennsylvania, home of the oil well that launched the modern petroleum industry, has also long been a leader in coal production. In 2012 the state ranked fourth in the nation, producing nearly 55 million short tons of coal. We’ve also been a leader in nuclear power and renewable energy. But the true opportunities for the future lie in the goldmine beneath our feet – more than 100 trillion cubic feet of natural gas. Pennsylvania is spurring the nation’s economy with its safe and responsible development of this abundant resource. Last year, production of Marcellus Shale gas totaled more than three trillion cubic feet – more than double 2012’s production. This supports more than 100,000 Pennsylvania jobs and the promise of thousands more to come. These are high-paying jobs with the average wage (nearly $100,000) almost double the state average. The industry contributes more than $14 billion to the state’s economy annually, a figure expected to dramatically increase to nearly $50 billion over the next two decades. It also adds $3 billion in taxes and royalties into the revenue stream. This is an engine driving
economic growth in the state and region.
and oil drilling company. More than 160,000 barrels a day of crude are delivered by rail every day to an expanded yard in Eddystone. OPPORTUNITIES ABOUND In Trainer, Delaware County, domestic The numerous uses for the region’s shale gas reserves create myriad opportunities for job energy production is also helping keep the creation and economic development. Natural lights on at a refinery that was once scheduled gas is used to heat millions of Pennsylvania to be mothballed. Delta Airlines purchased the homes, power a growing number of vehicles struggling refinery from ConocoPhillips and and equipment, and to generate affordable modified it to produce jet fuel – a smart play electricity. Over the past few years, wholesale that keeps its costs down. electric prices have decreased, correlating closely with increased shale production. A DRIVING JOB GROWTH competitive and stable electric market means In addition to engineering services and legal businesses can deploy more capital to creating support, small businesses are finding new jobs and strengthening the local economy. markets thanks to the Marcellus. For example, Additionally, in the southwestern area of Schramm Inc. of West Chester developed a the shale field, there is an abundance of “wet new mobile drilling rig. The research, design gas.” These natural gas liquids are also vital to and manufacturing of the drill alone allowed our economy, and include ethane, butane and the company to add dozens of jobs. propane. Some of these are used as commercial The greater Philadelphia metro has also gases; others as the key ingredient for plastics established itself as a leader in alternative and a host of vital consumer products. These energy. In Montgomery County, the Limerick are industries where pennies matter, and Nuclear Power Plant provides a reliable source nothing is reducing costs for American of electricity to the 51 million Americans who businesses more than shale gas. tap into the PJM grid. The plant is one of The Mariner East pipeline project is just one five nuclear plants in the state. Pennsylvania example of how Philadelphia is benefitting. ranks second in nuclear power generation in MarkWest Energy Partners, a pipeline the U.S. Next door, in Chester County, Aqua company, is partnering with Sunoco to Pennsylvania powered on a 6.5-acre solar field send ethane to markets in Norway through two years ago. Since then, the 1.5-megawatt the Marcus Hook facility at the Port of plant has allowed the company to operate Philadelphia. For a time, the entire Marcus more efficiently and keep costs down to area Hook facility, as well as two other major businesses and households. In Falls Township, refining facilities, was scheduled to close. Bucks County, a 3.7-megawatt solar operation But domestic energy production – and the is online, one of the biggest in the United leadership of Gov. Corbett’s administration – States. Exelon uses gas produced by a landfill kept them open. They now have a bright future. to produce clean power. Braskem is using another part of the same Many of these assets are highlighted in facility to make PVC, polyethylene and Gov. Corbett’s plan, Energy = Jobs. With polypropylene – which may one day be smart policies and direction from leaders in supported by “cracker” facilities in Pennsyl- Harrisburg and local government, businesses vania and West Virginia that would use can continue to reap the benefits of all our Marcellus Shale liquids. Braskem’s Brasilian energy resources for years to come. We’ve parent company is looking at building a come a long way from importing 75 percent cracker facility in West Virginia, and Shell is of our energy just a few years ago to being a considering the same in Beaver County, PA. net energy exporter for the first time in a An oil refinery in south Philadelphia found century. The increased jobs, economic growth, new life, thanks to new management by opportunity and quality-of-life mean that Philadelphia Energy Solutions, a North Pennsylvania is the “workplace of the world” Dakota-based domestic hydraulic fracturing for the 21st century and beyond.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 28
CAPITALNAME SECTION REPORT HOW MUCH DOES THE STATE STAND TO GAIN FROM NATURAL GAS AND ALTERNATIVE FUEL DEVELOPMENT? Both the House and Senate held recent hearrings on energy-related issues in the Keystone State. By Scott Staruch
ebruary in Harrisburg was dominated by hearrings in both the House and Senate Appropriations Committees to review state a g enc ie s’ f u nd i ng. In keeping with this month’s focus, here’s a recap of energy-related hearings: Department of Conservation and Natural Resources (DCNR) budget hearings covered natural gas development in Loyalsock State Forest, the Dirt and Gravel Road Maintenance Program, commercial timbering and Railsto-Trails Program projects. DCNR testified before the Senate committee on February 19 and before the House committee on the 25. DCNR Secretary Ellen Ferretti commented on anticipated royalties from natural gas
development in state parks and forests. She said Gov. Corbett’s estimate of $75 million in royalties for the state is realistic. The Public Utility Commission (PUC) testified before the House and Senate committees on February 19 and 27, respectively. Robert Powelson, chairman of the PUC, described efforts to hold spending and reduce staff. He also called the Mariner East pipeline a game-changer, citing it as an example of how the state will benefit from natural gas development.
related to alternative fuels/vehicles. The funds are earmarked for conversion/ purchase of natural gas vehicles under 26,000 pounds, as well as conversion/purchase of electric, propane or other alternative fuel vehicles of any weight. DEP Secretary Abruzzo said natural gas vehicles allow us to make the most of our abundant natural gas resources, edging us closer to energy independence and improving air quality.
ENERGY EQUALS JOBS
In late January, Gov. Corbett unveiled his “Energy = Jobs” plan. Described as an Beginning March 1, DEP began accepting economic development tool, the plan catalogs applications for the Alternative Fuel Incentive Pennsylvania’s rich energy resources. Grant (AFIG) Program. Approximately $8 “We welcome the intense competition to million in grants are available to retrofit attract jobs and capital investment, and vehicles to operate on alternative fuels, or to Pennsylvania is committed to winning this support research, development and training competition,” said Corbett.
ALTERNATIVE FUEL VEHICLES
“The Intellingent Choice” Business and Policy Intersect Every Month in Print, Always Online Go to RegionsBusiness.com To Subscribe
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 30
WORKPLACE SECTION NAME POLICY CAN ENERGY REALLY EQUAL JOBS? ONLY WITH BIPARTISAN EFFORT Neither the Democratic or Republican parties have the complete solution to Pennsylvania’s energy problems. By Rick Grimaldi and Lori Armstrong Halber
e need look no further than Pennsylvania to see the growth trajectory and ultimate impact on employment to underst a nd the importance of the energy sector to the economy and as a result, on the race to be Pennsylvania’s next Governor.
JOBS, JOBS, JOBS
employment is up 10,000 jobs over the past year and utilities are up 6,000 jobs. By contrast, coal employment is down 5,000. Renewables are also growing slowly. But the jobs impact from the energy sector, especially the boom in unconventional oil and natural gas extraction, is much greater, driving a need for construction workers, engineers, truck drivers, and a host of related occupations. Unger, citing a report by HIS Inc., a Colorado-based energy consulting firm, suggests that by 2020 the number of overall jobs supported by unconventional energy will expand to 3 million. According to Nick Field of PoliticsPA.com, Gov. Corbett’s report provides immense detail on the state’s history of energy production and the laws which affect energy policy, ultimately advocates for an “all of the above” approach to energy resources. As Mr. Field explains, an “all of the above” energy strategy is a phrase used by almost all politicians regardless of party. He points out that President Obama uses the exact same words to describe his energy policies. The usual partisan differences emerge when it comes to what energy sources are most emphasized and least utilized. Democrats in the race for governor are more likely to favor clean sources of energy like solar, wind, and biomass, while Republicans are more likely to favor established sources of energy like oil, coal, and natural gas.
That’s what the candidates promise, as they should. In January, Governor Corbett released his “State Energy Plan,” entitled “Energy = Jobs.” The Governor begins, “Here in the Keystone State, we know that energy equals jobs. Pennsylvania’s abundant natural resources, sound public policies, improved business climate, skilled workforce and commitment to competitive markets are second to none.” The energ y revolution is already making America more competitive. Global companies are investing in new plants here to taking advantage of the low price of energy and natural gas as a feedstock. David Unger of the Christian Science Monitor suggests that unconventional oil and gas production over the last year or so have created more than 1 THE LONG TERM million jobs with 800,000 more We would suggest that they expected by 2015. Unger says that all have the wrong approach. contribution comes from many Focusing on one sector or industry areas: oil and gas extraction is not going to help the economy
and put Pennsylvanians back to work. Nor will it help the U.S. achieve true energy independence. Without an overall bi-partisan approach to support the energy industry, we will always have an economy that is somewhat sluggish and beholden to the vaguaries of geopolitics – witness Ukraine and the Middle East. Rather than continue to be short sighted regarding the energy industry (particularly here, where all resources are abundant), we should think about equally supporting industries like wind, solar, hydro, nuclear and yes, the extraction of natural gas from the Marcellus Shale fields, while modernizing ports and our ability to refine and transport oil. This will require that the candidates ultimately embrace some ideas that may be unpopular with “the base.” For example, oil and gas drillers attracted to Pennsylvania because of the abundant Marcellus Shale are not going to turn away if the state charges an extraction tax – they are going to go where the resource is. This is not a popular idea in Republican circles; nonetheless, the tax exists in other states that are profiting from it.
A NEW MINDSET
returning economic benef it to the state? For their part, Democrats will have to accept that other tax incentives to attract business are necessary. For example, the acceleration of the phase-out of the capital stock tax and a significant reduction of the corporate income tax rate (Pennsylvania’s rate is the second highest in the nation) would incentivize new businesses to locate within the Commonwealth. New Brownfield initiatives and tax opportunity zones should be used to encourage development in areas that have depressed employment. Finally, there should be a recognition that while some regulation is necessary, overregulation by the Pennsylvania DEP and the Federal EPA are job killers. Why not create a bi-partisan task force to craft common sense regulations that environmentalists and business can live with? These and other incentives should be used to attract businesses to Pennsylvania that could locate anywhere. Let’s encourage wind turbine production. Let’s attract cutting edge car makers like Tesla to locate here. Let’s continue to develop a nascent solar industry. Let’s work with the coal industry to continue to develop clean coal use. Let’s harness Pennsylvania’s waterways. And, yes let’s take advantage of the vast Marcellus Shale field that lies beneath us. This is the 21st century. Let’s lead the way.
Furthermore, the notion that tax credits for the alternative energy industry are bad is based on a false premise that industry should be able to succeed without government assistance in some form. This is not a realistic position. Why not offer limited subsidies to a business that can Rick Grimaldi and Lori show realistic potential and can Armstrong Halber are partners in reasonably be expected to create the law firm of Fisher & Phillips sustainable employment, while LLP.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
EBBING TOWARD INDEPENDENT ENERGY Investments across the board have made Pennsylvania a leader in energy production. By Rosella LaFevre
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 32
COVER SECTION NAME STORY
e’ve spent the last 100 years building up a world that requires massive amounts of energy. We use crude oil, coal and other energy resources at a fast clip, and most of the resources we use heavily are finite resources. They will run out, and they may run out sooner than some energy experts predict. This is probably not news to most Region’s Business readers, if only because the topic of energy independence was a major issue in the campaigns and election for President in 2012.
lower in price than it might be in the future.
gas to policy makers, regulators, media and Food is also cheap because so is the gas the public, by sharing information on the that powers the farming equipment used positive impacts responsible natural gas proto harvest corn (the production of which duction is having on families, businesses and is already heavily subsidized by American communities across the region, according to taxpayers), which goes into making the its website, marcelluscoalition.org. high fructose corn syrup in everything we On the board of the Marcellus Shale eat. “All of these things are connected,” said Coalition sit 45 energy companies, including Dr. William Braham, director of University Range Resources, Chesapeake Energy, of Pennsylvania’s T.C. Chan Center for Rex Energy, Cabot Oil and Gas, and Shell Energy Studies, which works to develop new Appalachia. Additionally, more than 100 THE FUTURE OF ENERGY knowledge, tools, processes and continuing companies related to the shale gas industry For some, especially those in high school education for professionals involved in are associate board members, and more than 300 companies belong to the coalition. and college during the last election cycle, building energy and technology. the 2012 election became an introduction to Natural gas has its benefits. “The big this major issue affecting present and future RESOURCES ABOUND advantage of the use of natural gas as fuel So although energy independence at is that its combustion emits lower levels quality of life. For many Millennials, it was the first time they understood that electric a local level isn’t far removed from the of greenhouse gas than its competition,” plants burn coal to produce the energy that conversation about energy independence Dr. Huges said. But it is also fraught with powers their iPhones, their laptops, their at a national or international level, we can problems, such as leakage opportunities at Kindles and the many other tools they use for talk about it in terms of natural gas, the hot the points of extraction and transportation. work and play. It was also the first time many topic in Pennsylvania’s energy discussions. Natural gas is high in methane, which is people heard of the possibility of capturing Everyone seems to have something to say much more powerful than carbon dioxide. the energy of a wave to produce the power about natural gas from the Marcellus and It’s actually 30 times more powerful than that so many tools and toys – and lives – Utica Shale (two natural gas plays that carbon dioxide in terms of global warming. require. It seemed heartbreakingly simple lie below the Appalachian Basin). It has “If you waste it through leakage, you can lose that we might fund research initiatives that certainly gotten media attention for the any environmental advantages it had,” Dr. would enable us to capture similar renewable dangers of production and its effects on Huges said. Of course, both private industry the environment, and everyday people are and the public have no interest in losing energy sources. In researching this story, we set out to talking about it around their dining room natural gas through leakages, he added. answer two questions: “Can Pennsylvania and kitchen tables. There are plenty of UPDATING INFRASTRUCTURE become energy independent?” and “What supporters of the energy source. “The Marcellus Shale play represents a level It seems that soon more of our City-owned role will our vast investments – thanks to of economic opportunity for Philadelphia buildings will be heated with natural gas generous tax breaks Governor Corbett that we haven’t seen probably in 100 years after a conversion from steam heating, has granted to companies involved in the in terms of its upside potential,” said Dr. which is costly and ineff icient. Most production of natural gas – in the harvesting Mark Alan Huges, a professor at University buildings already have natural gas service of that natural gas play in becoming energy of Pennsylvania’s School of Design. lines attached to them, so the process of independent?” With Gov. Corbett’s recent conversion would involve determining how budget proposal (see sidebar), this is the The level of conversation happening about much power each building needs. “Getting perfect time to talk about our energy future natural gas production, drilling and fracking on a state level. might be traced back to the Marcellus Shale gas to the building is the least difficult It is difficult, however, to separate the Coalition, established in 2008. Several part of process, said Barry O’Sullivan, a issue of energy independence at a local level companies involved in the harvesting of spokesperson for Philadelphia Gas Works. The cost of heating these buildings would from the national – or really, international natural gas from the Marcellus and Utica – level. As one source pointed out, energy Shale, and they’ve all come together to form drop significantly following a conversion production, consumption and pricing are the Marcellus Shale Coalition in an effort to from steam heat to natural gas. Take a all intricately tied to other economic and unite the many exploration and production, 200,000 square foot building, for example. quality of life issues. For instance, those midstream, and supply chain companies Although it may cost $245,000 a year to cheap clothes you bought this weekend for operating in the Appalachian Basin. The heat that building using steam, heating costs your children from the sales rack at Old Coalition aims to address critical issues would drop to $45,000 per year for heating Navy? You (or maybe your spouse) scored that arise from the production of natural gas that building once converted to natural gas. Steam heat costs so much more because a lot that pair of jeans for under $20 because the from the Marcellus and Utica Shale. gas that power the boats from China is also The Coalition makes the case for natural of potential heat energy gets lost as steam is
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
COVER STORY pushed up through heating vents.
“I think if energy independence means From what Dr. Braham has seen of natural reducing or managing the risks of our energy gas production and use, he believes the supply, then yes, we can become energy supply in Pennsylvania will last only 10-15 independent,” he said. “The less useful years, despite predictions of a century supply version is that ‘energy independence’ means “It’s a wonderful short-term gift to have we don’t get our energy from elsewhere. That natural gas,” Dr. Braham said. The costs of isn’t necessarily a goal.” energy derived from the burning of natural If we’re to achieve the U.S. Army’s defgas have come down in the short-term. inition of energy independence - again, that’s a reliance solely on renewable sources of A LONG ROAD AHEAD energy - then we have to answer the question: Ca n Pennsylva nia become energ y “How do we use the resources we have now to independent? “I think it’s a very short-term get to a more sustainable future?” question,” Dr. Braham said, though he did As a model for handling the transition predict that it would take 50 to 100 years for from nonrenewable to renewable energy Pennsylvania to become energy independent resources, Pennsylvania might use Norway in the U.S. Army’s definition of the term as a model, Dr. Braham said. Norway which means reliance only on renewable produces and uses oil and gas in a way that sources of energy. He thinks the transition Pennsylvania could learn from. It’s a very will take this long partly because he believes wealthy country and rich in resources, but we will continue to use oil, gas, and coal the country’s policy makers are “very actively until they are simply too expensive. preventing stratification,” and investing in Dr. Huges used a different definition.
efficiency, Dr. Braham said.
What does the future hold if and when we do attain the goal of solely renewable sources of energy? It could mean future days that remind us of a past our great-grandparents saw end. “We were energy independent before the 20th century,” Dr. Braham said, referring to pre-Industrial Revolution days. There are some models for our future that evoke the pre-20th century agricultural model or a very Amish existence. “Most people don’t want to go back to that,” Dr. Braham said. And so, “how to keep from reverting entirely to an agricultural society” becomes a big challenge. His students at University of Pennsylvania design their own environmentally friendly settlements of the future. He predicts, “The society of renewable resources is the society of additional work” - so we’d all play a more active role in producing the energy we consume. Perhaps today’s youth will grow up to tell their grandchildren about the days of unfettered energy consumption.
GOVERNOR CORBETT’S BUDGET PROPOSAL REGARDING ENERGY & WORKFORCE ISSUES Governor Tom Corbett has proposed a 2014-2015 budget of $29.4 billion, which would mean a nearly $1 billion increase in Pennsylvania’s spending. Interestingly, this budget doesn’t include tax increases. So where does the extra money (3.3 percent more than 2013-2014) come from? An improving economy, Gov. Corbett proposed. He estimates that the economic upswing he predicts for Pennsylvania would mean an extra 4 percent in revenue. Money would also come from the following measures: adding Keno to lottery system (an extra $20 million), cuts in pension payments as part of a larger pension reform plan ($171 million), sales of unclaimed property ($171 million) and leasing state lands to natural gas producing companies ($75 million). The biggest line items in Gov. Corbett’s proposed budget are funding for education (35 percent), medical assistance and long-term living (22.8 percent), other welfare (16 percent) and corrections (7.5 percent). The budget proposal also includes a handful of line items that address energy and workforce issues. There’s Gov. Corbett’s “Energy = Jobs” strategy. This is one that would invest more than $450 million in job training programs in alignment with the region’s energy sector workforce needs and the Mayor’s Manufacturing Task Force. His budget also includes funding increases for Pennsylvania First. This is the state’s comprehensive funding tool providing grants, loans and loan guarantees in an effort to spur investment and job creation within the Commonwealth, and it has trained more than 175,000 employees since the program launched. As part of the Governor’s proposed budget, Pennsylvania First would see a $3 million dollar increase to the base program and a $2 million increase to its WEDnetPA Job Training program, allowing for the training of 10,000 people additional employees. Total funding for Pennsylvania First is $42.5 million in fiscal year 2014-15. Workplace training for young people with disabilities will be provided for with another $4.8 million in combined state and federal funds. The proposed Pennsylvania budget also provides for an increase of $500,000 to the Partnership for Regional Economic Performance; this budget increase would support regional efforts to bring jobs home to the Commonwealth. PREP is responsible for the retention and creation of nearly 43,000 jobs in 2013. With these additional funds, PREP will be able to target manufacturers that previously moved operations overseas and are looking to re-shore operations to Pennsylvania. Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 34
SUSTAINABILITY IN THE CITY OF PHILADELPHIA GREEN IS THE NEW BLACK From natural gas to solar initiatives to innovative ideas for wastewater usage, sustainable energy is on the forefront here. By Erin Kane
few years ago, Mayor Nutter laid out an ambitious plan to make Philadelphia “America’s Greenest City,” and while sustainability may be a widely touted buzzword, the region’s commitment to energy efficiency is real. According to a recent report by the City, alternative energy use increased for the fourth straight year in 2012. The total percentage has risen to 14 percent — nearly six times the rate it was only five years ago. The City has also retrofitted thousands of homes and buildings and added 133 acres of new green space.
have weatherized nearly 4,000 homes — replacing old heating systems, sealing leaks and installing insulation — and is projected to save homeowners nearly $10 million. “PGW is dedicated to helping our customers become more efficient by consuming less energy and saving more money,” says Elliott Gold, who manages the program. GOING SOLAR
Solar is arguably the darling of renewable energy sources, mainly because the raw energy source is free and ubiquitous. But accessing the power of the sun can be complex and costly. Solar photovoltaics FROM WASTE TO ENERGY SAVINGS — another way to say solar power — have Last November, the Philadelphia Water experienced some ups and downs over the Department unveiled a $47 million Biogas past few years, says Jim Innes, the chief Cogeneration facility, a project that uses officer of CarrierClass Green Infrastructure, biogas from waste solids to generate heat a green power technology firm. and energy — enough to power 3,700 homes. “Once you start thinking about green As a natural by-product of sewage treatment, energy, you look up in the sky and say, ‘hey, biogas — aka methane — can be refined and the sun is all around,’” he says. Harnessing used to fuel generators and equipment. solar power requires an investment, however, Waste is a largely untapped energy source, and without sufficient energy incentives — says Chris Crockett, a deputy commissioner which were liberally available for a time — for the Water Department. “Wastewater has many projects end up looking at “negative ten times more energy in it than is used to rates of return.” actually clean it up,” he says. “We need to That hasn’t deterred CarrierClass, based figure out a way to harness that energy.” in Plymouth Meeting, Pa., from thinking The Department is currently using biogas outside the panel. After a series of powerful to fuel its Northeast Philadelphia plant, but storms swept through the region, knocking other sustainability initiatives — such as out power lines for long stretches, Innes geothermal-powered heat, solar arrays and began toying with design plans for affordable recycling the Airport’s deicing fluid — are backup power solutions. The company ongoing. “We’re changing the concept of the developed a solar-powered charging station, traditional wastewater plant from a place called the ConnecTable, which combines that just cleans up sewage to a place that is function and aesthetics. Sleek outdoor café actually a resource recovery facility,” he says. tables — ideal for campuses, green spaces “One man’s trash is another man’s treasure.” and cityscapes frequented by the digitalPhiladelphia Gas Works has also entered hungry — have the ability to charge 75 to the green energy arena. A range of energy 150 devices a day, all while consumers are efficiency programs, called EnergySense, lounging or eating lunch. The product hits Because green just may be the new black, we look at some of the energy initiatives popping up in our own backyard.
Credit: Wikicommons. the market this month. Solar States, the only solar installer based within the city limits, is focused on making homes, schools and commercial businesses solar-friendly, says Akil Marsh, who manages business development for the company. “We do find there are commercial businesses and homeowners still interested in pursuing solar because they see the value in the nearterm,” says Marsh, whose company is heavily focused on the Philadelphia region. Solar States is a triple-bottom-line company, a moniker that means its priorities extend beyond profit margins to include people and the environment. It has completed marquee projects in Kensington, including a massive rooftop solar array at the historic Crane Arts building. And, it recently launched the Solar Schools Initiative, a partnership with local schools to implement rooftop solar while training students for green-collar jobs. The company plans to install about 5,000 panels across the city. According to Marsh, Philadelphia generates only a sliver of its energy from solar, meaning the potential for growth is substantial. “Solar is great for the environment and it’s also an opportunity to create jobs,” he says. “We pride ourselves on a greater commitment to Philadelphia, and as far as we know, we are the only installer making a concerted effort to reach youth.”
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 36
RACE FOR GOVERNER WHERE THE CANDIDATES STAND: THE FUTURE OF MARCELLUS SHALE There’s little variety in the field of gubernatorial candidates when it comes to ideas on the ancient formation. By Kyle Bagenstone
he Marcellus Shale has seen a lot of history in its 400 million years. Its formation started well before it found its way into the continental cocktail party known as Pangaea, when it hung out next to Morocco until an ocean came between them. Then it was trampled underfoot by a host of dinosaurs and buried itself in up to nearly 8,000 feet of Earth in some places, presumably to live out the rest of eternity with a little peace and quiet. However, like a just slightly firmer version
of Ed Rendell, Pennsylvania politics just won’t let the Marcellus Shale ride off into the sunset. And now, at the ripe old age of 400,000 millennia, it has become a political football in the Keystone State. How degrading. If only the Marcellus Shale had a dollar for each one of those 400 million years. Then it would be... vastly under-compensated. Depending on who you ask, the formation contains about 141 trillion cubic feet of natural gas, worth somewhere in the ballpark of $2
trillion. And since drilling began in earnest in 2008, people in Pennsylvania have been extracting that value at a rate of tens of billions dollars per year.
MAKING CALCULATIONS Exactly how much private companies are making from the 6,400 active wells is difficult to determine. However, the revenues generated by the state through taxing of the industry are readily available, and the focal point of plenty of controversy heading into the 2014 gubernatorial race. Governor Tom Corbett has been taking a lot of heat from Democratic challengers over his institution of an impact fee, which charges drilling companies a per well rate, over a severance tax, which would tax drilling at a rate tied to how much gas is extracted. Corbett’s argument is a politically familiar one, stating that he doesn’t want to scare off companies to other states and diminish the economic windfall currently taking place. Just how much is at stake depends on, again, who you talk to. Corbett administration numbers put the amount of money generated for the state’s coffers at about $400 million in impact fees (since the fee was instituted in 2010) and $1.7 billion in corporate business taxes. However, Corbett also touts the 245,000 jobs the Pennsylvania Department of Labor and Industry says the industry supports. Add more short-sighted taxes, and risk losing jobs in the long-term, Corbett argues. His Democratic opponents disagree. If challenger John Hanger is to be believed, there’s plenty of wiggle room to tax drilling companies before they head to cheaper pastures. Wilkes-Barre’s Times Leader newspaper quoted the former Pennsylvania Department of Environmental Protection secretary as saying that gas industry leaders he dealt with “practically laughed... and felt it was incredibly foolish,” that Pennsylvania hadn’t instituted a severance tax. Like most of his Democratic ... Continued on page 40.
FFeedback , ,IIdeas , ,PPerspectives ??W . .FFeedback @R BBusiness .com eedback deas erspectives Weewant wantto tohear hearfrom fromyou you eedback @Regions egions usiness .com 38
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com Regionâ€™s Business
RACE FOR GOVERNER Continued from page 38. ... counterparts, Hanger points to the fact that Pennsylvania is the nation’s largest gas producing state that hasn’t yet instituted a severance tax. Hanger proposes a 5 percent tax on extraction, which seems to be the going rate for most of the Democratic candidates, and says he wants to use new revenues for increased funding for public education, renewable energy programs, and environmental restoration.
PARTY LINE? Truth be told, even with the crowded field of seven democratic challengers, this is what the platform of most of the party sounds like. Early favorite and U.S. congresswoman Allyson Schwartz also proposes a five percent severance tax and says she wants to use the new revenues to fund basic and higher education, expand access to preschool, and repair the state’s infrastructure. The website of current frontrunner Thomas Wolf also proposes a 5 percent severance tax to be used for “strategic investments in schools, roads, and renewable energy,” while the Al Gore-endorsed former DEP secretary Katherine McGinty wants to put 100 percent of the tax toward education. The closest thing to outliers among the Democratic challengers are Lebanon County Commissioner and long-shot candidate Jo Ellen Litz, who proposes a higher 6 percent severance tax to be used for infrastructure, environmental stewardship, and education; and state treasurer Rob McCord, who has yet to outwardly declare his support for a severance tax, dodging the question during an interview with PAPolitics.com last year by saying he generally wants to use revenues to fund priorities “like” public education.
Credit: Wikicommons. that he supported a severance tax.
WEIGHING THE SCALES
If the Democratic candidates are correct, the state stands to make a good deal of money from a severance tax. Journalist Cate Long broke down the numbers for Reuters in 2012, estimating that Pennsylvania would gain about $24 billion over 20 years if it instituted a 6.1 percent tax rate. In a more recent analysis, the non-partisan Pennsylvania Newcomer John Wagner is a bit of an Budget and Policy Center concluded that a 4 enigma, since his website only displays a percent severance tax could bring in as much picture of his family with the words “Thank as $1.2 billion annually by 2019-20, three You for Your Support,” presumably still from times the estimated $382 million that would his embarrassing primary loss in the 2013 be generated from the current impact fee. Pittsburgh mayoral race (election day is two No matter how you slice it, the state’s months away, time for an update, John). hardline environmentalists aren’t going to However, he did tell The Daily Review (you be pleased with whoever the governor is know, the paper of record in Towanda) in 2014. The only candidate who called for during his campaign for governor in 2010 an outright halt on new drilling leases was
the minister from Mechanicsburg, Max Myers, who bowed out in February after discovering that hey, this politics thing is kind of expensive. The only candidate calling for any kind of a halt is Schwartz, who says she would advocate for a moratorium on fracking in the Delaware River Basin. All of the Democratic candidates (except for a question mark for that wildcard Wagner), say they’d support banning new drilling leases on public lands, like state forests, for natural gas drilling, which could impact just how much can be gained from the severance tax. But, with all of the candidates looking to keep the gas party going, the Marcellus Shale is going to be enduring nature’s version of the root canal for the foreseeable future. The only question is how much Pennsylvania stands to make from its 400 million years of labor.
FFeedback , ,Ideas ??W . .FFeedback @R BBusiness .com eedback Ideas, ,PPerspectives erspectives Weewant wantto tohear hearfrom fromyou you eedback @Regions egions usiness .com 40
TRANSPORTATION BY TRANSIT, AIR AND RAIL, EFFORTS ARE UNDERWAY TO REDUCE ENERGY CONSUMPTION Philadelphia’s mass modes of transportation continue to improve standards of efficiency. By Rosella LaFevre
ublic and mass transit are generally considered to be more efficient than individual modes of transportation. While by some token that is true, the region’s transportation agencies still consume massive amounts of energy. Currently, SEPTA, the PHL Airport and Amtrak all have plans and projects underway to reduce energy consumption within their facilities and by their vehicles. These are multiyear efforts, with portions of the projects and initiatives completed and others underway.
SEPTA In 2011, SEPTA adopted an overarching env ironmental policy and created a sustainability program that focuses on the “triple bottom line” by accounting for the environmental, social and economic impacts on the Southeastern Pennsylvania region and the world. The International Organization for Standardization, the
This makes SEPTA one of less than a dozen U.S. transit agencies so certified. Pending positive results in annual audits, this ISO certification is valid for three years.
T12 fixtures with LED retrofits reduces the costs of energy demand and consumption and also significantly reduces labor costs for frequent maintenance. This replacement Under its Energy Action Plan, SEPTA prog ram, which cost approximately plans to reduce its greenhouse gas emissions $524,000, has the potential to result in an intensity by five percent annually. Part annual savings of $281,000. of these efforts is an initiative to convert Philadelphia now requires building owners existing energy consumption to lower- with facilities that are 50,000 square feet or emission sources, such as with a proposed larger to report their energy consumption combined heat and power plant that would using the Env ironmental Protection power approximately one-half of SEPTA’s Agency’s Portfolio Manager. The Airport has Regional Rail service. two buildings that fall under this ordinance, so they will file annual reports on energy use, PHL AIRPORT including the electricity, natural gas and In 2012, the Div ision of Av iation water accounts tied to those facilities. PECO established energy conservation measures has granted Act 129 rebates for several of the for the PHL Airport terminal complex as airport’s energy efficiency initiatives. part of its Investment Grade Audit. Of several proposed measures, several are in AMTRAK the process of implementation or have been Amtrak is, on a passenger-mile basis, nearly completed, including a new cooling tower, 20 percent more efficient than domestic three new boilers and other HVAC upgrades airline travel and 30 percent more efficient at the Central Utility Building. These than auto travel, according to information measures will improve energy efficiency for from the U.S. Department of Energy. heating and cooling much of the terminal As part of its environmental efforts, Amtrak complex. introduced a new electric locomotive, the
Lighting upgrades, such as new LED lighting at gates, taxiways and along the departures roadway, have been completed. LED technology provides an excellent source of energy savings over older lighting fixtures. Some of the airport’s fixtures use T12 fluorescents, which are outdated and require much more energy than LEDs; these are in the process of being replaced with T8 Credit: Wikicommons. fixtures, which are more efficient than the T12s but remain higher energy consumers world’s largest developer of voluntary than LEDs used in similar applications. standards for products, ser vices and The LED retrofit kits (manufactured by practice, awarded SEPTA’s Environmental LED Living Technology) that have been and Sustainability Management System used on some of the airport’s T12 fixtures, certification under the ISO’s 14001:2004 resulting in an approximately 65 percent standard for environmental management. reduction in energy. Replacing the airport’s
ACS-64 (or Amtrak Cities Sprinter), last month with help from Vice President Biden. These new trains have a number of benefits, one of which is a state-of-the-art process called regenerative braking that puts energy back into the grid during the braking. Over the next few years, Amtrak will put 70 of these high-tech engines on the rails. This new fleet will replace all of the electric locomotives operating on the Northeast Corridor. Some of the electric trains that the Amtrak Cities Sprinter will replace have racked up more than 3 million miles. Currently, two of these Amtrak Cities Sprinters are operating on the Northeast Corridor, and Amtrak will be adding more on a rolling basis.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 42
Cape Cod Located On A Quiet Cul-De-Sac Street T
his quaint two-story, single-family home features a recent addition, nearly doubling the original size. The stone Cape Cod colonial is located on a property set on a cul-de-sac street on the North Side of Bryn Mawr, PA, just steps away from Harriton Park. A professionally landscaped yard includes a variety of tree specimens and brick walled patio complete with barbeque for entertaining. The interior residence combines traditional elegance and a modern, open floor plan. The warm custom kitchen flows into the great room and opens through french doors to the patio area. A luxurious master suite includes a sitting room, marble bath, balcony and an expansive walk-in closet. The surrounding neighborhood has many convenient options for shopping, parks, transportation, restaurants, including the brand new Rosemont farmersâ€™ market. There are also multiple hospitals, schools and community services for people of all ages located in close proximity. 506 Great Springs Rd., Bryn Mawr, PA
FFeedback , ,Ideas ??W . .FFeedback @R BBusiness .com eedback Ideas, ,PPerspectives erspectives Weewant wantto tohear hearfrom fromyou you eedback @Regions egions usiness .com 44
Colonial Elegance In Suburban Community L
ocated in the community of Turnbridge, this traditional five-bedroom, four-anda-half-bathroom both is set on a 1.2-acre lot. An expanded floor plan features a twostory foyer, formal living room with marble fireplace, dining room lined with windows and custom library with wood coffered ceiling and plantation shutters. The kitchen is complete with stainless steel appliances, a granite center island and butler’s pantry. A floor-to-ceiling stone fireplace is the centerpiece of the family room, which includes two powder rooms. Upstairs, the master bedroom offers a separate sitting room, large master bath and dual custom closets, so you don’t have to share. Another four bedrooms and two bathrooms on the second floor provide plenty of space. Downstairs, the fully finished basement includes a wet bar, wine cellar, billiards and exercise rooms, as well as a large bathroom. Design elements throughout the home include hardwood floors and crown molding. The community includes a tennis court and trails to the township park. 1410 Eaves Spring Dr., Malvern, PA
FFeedback , ,Ideas ??W . .FFeedback @R BBusiness .com eedback Ideas, ,PPerspectives erspectives Weewant wantto tohear hearfrom fromyou you eedback @Regions egions usiness .com 46
LUXURY SECTION NAME LIVING
Blue Bell Boasts TwentyFirst Century Construction S
ituated in the Peaceful Enclave section of Blue Bell’s Regal Glen II development, this 5,040-square-foot home is just seven years old. The custom stucco and stone contemporary colonial includes four bedrooms, three fulland two half-bathrooms. Enter into the two-story foyer with curved staircase with hardwood f loors and crown molding that continue throughout the home. The formal living room features a sunlit conservatory with private balcony as well as a two-story fireplace and wall of windows. A professional kitchen comes complete with granite countertops, stainless steel appliances, two dishwashers, a double oven, large center island and butler’s pantry. A separate breakfast room allows access to the patio and backyard via sliding doors. The master bedroom suite boasts a tray ceiling, fireplace, sitting area, private balcony with French doors and bath with triple head shower, jacuzzi tub and marble floors. The second bedroom is a smaller suite with a full bath. Two more bedrooms with an adjoining bathroom complete the second floor. 70 Norristown Rd., Blue Bell, PA
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
LUXURY SECTION NAME LIVING
New Parke Place Model Townhome in Center City N
ew construction in the heart of Center City offers all of the contemporary conveniences. This 4,000-square-foot model home includes four bedrooms, three-anda-half bathrooms, two car garage and an elevator. Windows of eight feet high allow for abundant natural light and views of the city. Find hardwood plank flooring, nine- to fifteen-foot ceilings and eight-foot doors throughout. The gourmet kitchen includes cabinets imported from Spain, rare stone countertops and design fixtures as well as professional appliances. Additional amenities include custom California closets, a finished basement, two fireplaces, a green roof, Smart Home system, as well as a ten-year tax abatement. This modern home is located in a gated development just one block from the Avenue of the Arts corridor. 1332 Kater St., Philadelphia, PA
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
LUXURY SECTION NAME LIVING
Whitemarsh Estate With Open Space Inside and Out T
his estate home is located on a cul-desac in the Miquon development features landscaped terraces, a swimming pool and indoor tennis/basketball pavilion. Inside, find a living room with fireplace, dining room with butlerâ€™s pantry, and den with custom workstation desks. The gourmet kitchen features a large center island, granite countertops and stainless appliances, while the breakfast room has a wall-of-windows with a door to the rear terrace. Palladian windows, fireplace and built-in entertainment cabinetry highlight the adjacent family room. Double doors open the library, which is appointed with cabinetry and a gas fireplace. The master suite offers a tray ceiling, private balcony, sitting room, his-and-her walk-in closets and luxurious bath. Three additional bedroom suites are generous in size. The day-lit, walk-out lower level is comprised of a recreation room with kitchenette, home theater with stadium seating, exercise room and additional room that opens onto a tiled bath with shower. A screened room with hot tub offers some of the lovely views and relaxation. 2044 Harts Lane, Whitemarsh, PA.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
Contemporay Chestnut Hill On A Two-Acre Property S
ituated between Fairmount Park and the prestigious Philadelphia Cricket Club, this two-plus-acre property features an open floor plan and formal living room with marble fireplace that sweeps into a sunken dining room with floor to ceiling windows. The single-family, detached home includes a contemporary kitchen, pantry and sunny breakfast nook that opens to a cozy family room with wood stove. A private office with custom oak and cherry cabinetry and full bath allows work from home. Upstairs, the master suite with cathedral ceilings, dressing rooms, and bath with radiant f loors, whirlpool, and two-person marble steam shower is removed from family/ guest wing for privacy. The four large family bedrooms are complemented by enormous closet and storage areas and three bathrooms. The lower level offers additional 1700-squarefeet of living space with powder room and wet bar with refrigerator and dishwasher. A threecar garage and long circular drive provide ample parking. 609 W Gravers Lane, Chestnut Hill, Philadelphia
FFeedback , ,Ideas ??W . .FFeedback @R BBusiness .com eedback Ideas, ,PPerspectives erspectives Weewant wantto tohear hearfrom fromyou you eedback @Regions egions usiness .com 56
Suburban-based CardioReady provides businesses with AED solutions on a national scale. CEO, John Ehinger spoke with Region’s Business about the company’s goals to educate the population, as well as save lives.
In Case Of Emergency Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 58
SECTION NAME WHY IS IT IMPORTANT FOR BUSINESS OWNERS TO CONSIDER HAVING A DEFIBRILLATOR ON SITE? Sudden Cardiac Arrest (SCA) is effectively the leading cause of death in the United States. It claims the lives of more than 90 percent of its victims. SCA can happen to anyone at any time. Although it’s not age-dependent, risk grows with age. The leading cause underlying is often undetected coronary artery disease. Unfortunately, with the aging of the population (and workforce) and degrading health trends, such as obesity, SCA is a problem that is getting worse not better. Unlike a heart attack, SCA is often not preceded by warning signs such as chest pain. SCA is a very lethal condition and the chances of survival drop about ten percent per minute. So, despite their best efforts, it’s usually impractical for EMS teams to reach someone in time to save them. That’s the bad news. The good news is that prompt use of an AED (Automated External Defibrillator) and CPR can generate a very different and more positive outcome. Various research demonstrate survival rates of better than 70 percent if an AED is used within three minutes of a victim’s collapse.
WHAT ARE SOME COMMON MISCONCEPTIONS ABOUT SCA & AEDS? Many people believe that Sudden Cardiac Arrest is the same as a heart attack. In fact, these two health risks are very different. In simple terms, a heart attack is a “plumbing” problem, where something like a blocked artery or bad valve is preventing proper blood circulation. SCA is an “electrical” problem where the heart’s rhythm is disrupted. It happens very quickly and loss of consciousness is virtually instantaneous. Historically, people confuse heart attacks and cardiac arrest, and I think that this also creates the wrong impression that SCA is only an issue for the elderly. The reality is unfortunately that there are thousands of cases each year where SCA strikes children ... people don’t appreciate [the magnitude of] SCA. The current AHA figures cite over 400,000 victims each year. This is nearly ten times the number of people killed by breast cancer. I think that the other areas of confusion and misunderstanding involve AEDs themselves in that many people don’t understand how easy they are to use. There have been a number of studies conducted examining the ability of untrained children to use AEDs. While they all show similar results, one piece of research looked at a group of sixth graders and found that 100% of them were able to properly use the AED with no training or instruction, and on average it only took them 23 seconds longer than the EMT control group.
ARE THERE DIFFERENT OPTIONS AVAILABLE FOR BUSINESSES OF DIFFERENT TYPES AND SIZES? Every business has its own set of unique, individual characteristics. Understandably, these have a bearing on their AED program as well. There are a number of factors that come into play, ranging from a business’ size to the nature of its employee and customer base, to the physical layout of its facilities. We understand these differences, and appreciate the nuances of each industry with which we work. In terms of our business, we have a number of dedicated Practice Groups that are staffed with people who have experience in the field in which they specialize. We take full advantage of the deep knowledge and experience of our Practice Leaders to create customized programs that fit the needs of each business’ operational characteristics.
YOU WORK WITH CUSTOMERS ON A NATIONAL SCALE. WHY DID YOU CHOOSE THE PHILADELPHIA AREA FOR YOUR HEADQUARTERS? To some degree, we inherited our location. That aside, I was born and raised in the area and have always been a believer in what the Philadelphia area has to offer. Aside from customary business considerations, such as accessibility, for us Philadelphia has a lot to offer specific to what we do. For example, obviously, Philadelphia has a number of great healthcare organizations, which provide us with local expertise to draw upon, and many of the members of our Medical Board are drawn from local hospitals.
DO YOU SEE GROWTH IN THE CITY’S HEALTCARE INNOVATION SECTOR? I think that the answer here might be best considered from more of a macro perspective first. My personal view is that over the past few year’s we have seen a number of factors emerge that stifle healthcare innovation on a national level. These range from the posture of the regulatory environment to attempts to impose additional taxes on medical device manufacturers, to declining appeal of the medical sector at the physician level. If we can find solutions to some of these problems, I think that our region can be as well positioned as any to be a driving force in the sector going forward.
WHAT’S NEXT FOR CARDIO READY? I see the business continuing to grow. We have a number of great relationships with businesses and other organizations across the U.S., which I think will help us to continue to grow demand for our unique set of services. The bigger, overarching goal of our company is to increase national awareness around SCA – people simply don’t understand the magnitude of the problem and how easy solutions can be. We want to help people understand this growing health risk, and also want to ensure that they understand that there are very effective and easy ways to combat it. It’s our hope that by raising awareness, we can help make a difference.
To Read More of This Interview, Visit RegionsBusiness.com April 2014
By Maya Van Rossum
TRANS-PACIFIC PARTNERSHIP AGREEMENT WOULD PUT FOREIGN INTERESTS FIRST Proposed legislation would take Pennsylvania and the nation further away from an energy independent future.
he President is pressing for passage of a new trade deal called the Trans-Pacific Partnership Trade Agreement (TPP). Leaked sections of the secret deal demonstrate it is light on environmental preservation a nd heav y on cor porate protection. The TPP would give foreign corporations the right to sue our government for millions of dollars if they believe a U.S. environmental law (State, Federal or local) has diminished its ability to make profits – one corporation is already taking action under similar provisions in NAFTA against Canada for a ban on fracking passed in Quebec. If passed as planned, the TPP will also give special status to new countries who will then benefit
from automatic approval of LNG export plans – those countries include Japan, Vietman, Brunei, Malaysia, and New Zealand, with China expected to be added to the list soon. That means environmental and economic reviews of the impacts of the new LNG construction, operation and export would be by-passed.
CONGRESSIONAL ACTION And to top it off, the President wants Congress to pass a piece of legislation called the Bipartisan Congressional Trade Priorities Act of 2014 - “Fast Track” for short, that will give the President super powers to be able to continue to negotiate his deal in secret, to sign the deal on behalf of the United States, to draft and put forth the legislation that would implement
his secretly negotiated deal, and to relegate our Congress to a mere “yay” or “nay” vote, no hearings, no amendments, and very little conversation at all. There is a rush to export right now as gas is selling for as much as 3 to 4 times the price overseas as in the U.S. But it must be understood, LNG operations is not about economic or job prosperity for the people of our nation. Information submitted to the Department of Energy demonstrates that while LNG exports generates increased revenues for the gas exporters and gas companies, other areas of the U.S. economy, as a result of exports, declines. Among the losses are job losses. LNG exports harm labor income and jobs in many other sectors of the economy (e.g. paper, metals, chemicals, stone, clay, glass, plastic, food processing – that all rely heavily on natural gas). If LNG is allowed to proceed nationally as is being considered it is estimated that as many as 270,000 jobs could be lost. In fact, if LNG is allowed to grow as is being proposed, folks in every major sector, except for natural gas, will lose income; and we all will have to pay more for goods and services as the impact of increased gas prices reverberates through the economy.
MORE EXPORTS, MORE PRESSURE More LNG exports means more pressure for shale gas development and fracking; more legal challenges against environmental protection laws means less protection against gas drilling and fracking. The unparalleled level of harm
to drinking water, air quality, food supplies, and people’s health that result from ongoing and increasing levels of drilling and fracking for shale gas bring high price tags for the United States economy and taxpayers. Not only do our communities lose out on life’s basic needs – air, water, food and health – but we as taxpayers have to pay the upfront and longterm financial burden of these harms, including the necessary clean up and health care costs. The defore st at ion, la nd compaction, wetlands destruction, and increased ear thquake potential inflicted by shale gas development means increased flooding and flood ravaged homes and communities; it means increased erosion of public and private lands; it means the fear and harm of an earthquake where it happens; it means lost fishing, hunting, boating, birding and all the jobs they generate. And of course someone has to pay for all this harm too – that someone is you and me in the form of emergency services, taxes, hazard mitigation, and more national debt. Maya Van Rossum is the Delaware Riverkeeper, the spokesperson for and leader of the Delaware Riverkeeper Network (DRN), a nonprofit environmental organization and vital force in the preservation, protection, and restoration of the Delaware River Watershed. She heads a team of dedicated staff and volunteers who monitor the river throughout the Watershed’s four states and who advocate, educate, and litigate for protection, restoration, and change.
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com 60
By John A. Fry
TRANSIT-BASED DEVELOPMENT IN PHILADELPHIA: TURNING OBSTACLES INTO OPPORTUNITIES The city can learn from its own history when considering the evolution of its transportation system.
nce upon a time, economic growth in Philadelphia was impeded by a piece of critical but obtrusive infrastructure: the “Chinese Wall” that brought trains from the Schuylkill River to Broad Street Station on the doorstep of City Hall. Opened in 1881, the massive viaduct effectively bisected western Center City and choked development in what should have been the heart of our 20th century business district.
MOVING FORWARD By the 1920s, the City and the Pennsylvania Railroad began to rethink how trains should move downtown. Ultimately the demolition of the viaduct launched a chain of events resulting in Philadelphia’s modern skyline, centered not coincidentally on the footprint of the old wall. Two major station projects, connected by a new tunnel, made the transition possible: Suburban Station and the beautiful new jewel of the railroad, 30th Street Station. Today the City’s economic center is expanding westward again, to encompass the incredibly rich intellectual and innovative ecosystem of University City. And ironically, the rail infrastructure su r rou nd ing 30 t h Street Station is now an obstacle to fully integrating the growth taking place east and west of the Schuylkill. More than 75 acres of rail yards abut the station — important for transportation, but extremely limiting in terms of building a vital city for people and businesses. Viewed from above, it’s the “donut hole” in the map of Philadelphia. Fortunately, Amtrak is thinking
proactively about how to unlock the potential of the station it now owns. It has partnered with Drexel University, SEPTA, Brandywine Realty Trust and other local organizations on a joint planning process to imagine how development around 30th Street Station could look. This includes the air rights over the adjacent Penn Coach Yards as well as Drexel’s Innovation Neighborhood and other development plans in the vicinity. The group has nearly completed the process of selecting an engineering design firm to assist in the effort. This project represents the next great transformation of Philadelphia, and one of the most important urban development opportunities in the nation. It’s our own Hudson Yards, similar in scope and impact to New York’s new $20 billion office, retail and residential neighborhood rising on top of the Metropolitan Transportation Authority’s tracks.
INCREASING DEMANDS A confluence of factors makes this the right time to plan the future of the 30th Street Station district. America’s urban centers are achieving renewed popularity. Driven by concerns about the sustainability of exurban development, the millennial generation is showing a strong preference for city life and work. Baby boomers are moving their “empty nests” back to cities for convenience and culture. At the same time, with increased fuel prices affecting both car and air travel, rail is surging. Amtrak has carried a record number of passengers in ten of the past 11 years, with the Northeast Corridor
30th Street Station. Credit: Wikicommons. alone carrying 11.4 million people in fiscal year 2013. The thirdbusiest station in America, 30th Street sits at the 50-yard line of the nation’s most populous and well-traveled rail corridor. Amtrak understands that its Northeast Corridor service fulfills critical societal and infrastructure needs. The notable 2012 master plan for Union Station in Washington, D.C., was the first in a series of strategic studies of how Amtrak’s urban stations can catalyze development and allow Amtrak and other agencies to invest in further improving service. The 30th Street Station study is next in line.
move this sort of game-changing urban planning forward. So strong is Drexel’s commitment that our University has acquired, over the past decade, more than 12 acres of poorly utilized land adjacent to 30th Street Station. There, we’re planning the Innovation Neighborhood, a multimillionsquare-foot live/learn/work development that leverages the research and technology strengths of University City with the power of transit-based development. The full integration of the 30th Street district, including the rail yards, into the fabric of the city is a long-term, even generational goal. We shouldn’t let that stop us. It took 30 years to replace the Chinese Wall, which finally came down in 1953. But the results were well worth it for Philadelphia, and in fact essential to its future.
Drexel is work ing w ith Amtrak because we believe that public-private par tnerships including anchor institutions like universities and health-care John A. Fry is the President of systems represent a great model to Drexel University.
FFeedback eedback,,IIdeas deas,,P Perspectives erspectives??W Weewant wantto tohear hearfrom fromyou you..F Feedback eedback@R @Regions egionsB Business usiness.com .com
By CEO Council for Growth Members
A DIFFERENT KIND OF RESOURCE IS BEING DEPLETED AT RAPID RATES Greater Philadelphia’s foreign-born students are important to the growth of the regional economy.
hanks to our world-class colleges and universities, the Greater Philadelphia region has the advantage of attracting students from around the world. Our challenge is keeping them here. Today, almost one-third of these extraordinary college graduates are from outside the United States and dependent upon visa qualifications to allow them to stay here. Companies and institutions of higher learning are also dependent upon this talent pool to grow and prosper. Foreign-born students and high-skilled immigrant professionals are critical to the innovation and prosperity of our nation.
members to pass high-skilled immigration reform in order to ensure that we have the ability to access this foreign-born talent, as well as retain those that we are training on our campuses and in our companies. It’s critical that we retain graduates, whether they are from the U.S. or another country, to fill positions in the region’s knowledge-based industries, pa r t icu la rly in a dva nced manufacturing, energ y, IT, health care, and life sciences. These highly-educated workers help drive innovation, economic growth, and job creation, all of which are essential components for the region to remain competitive in the global economy.
economy. Between the years 2002 and 2011, there was a 19.8% increase in the foreignborn student population in the region, with a net gain of 67,918 students. During that same time period, foreign-born students were awarded 33.9% of all master’s degrees and 38.8% of all doctoral degrees in STEM related fields. As a result, Greater Philadelphia ranks third out of the ten largest metro areas in the U. S. in the percentage of foreignborn adults holding a bachelor’s degree or higher. These bright and innovative individuals make significant contributions to all aspects of our economy and it is a loss for both the region, and the country, if talented foreignborn workers who studied in the FOCUS ON FUTURE LEADERS U.S. are forced to leave, and then THE COMPETITION Last week, the CEO Council for Growth, a group of regional Greater Philadelphia’s foreign- compete against us abroad, rather business, civic and higher born students are a valuable than investing their knowledge education leaders, met with our resource and substantially and energy here. congressional delegation to urge impact the growth of the region’s
LOSING OUR SHARE
It is essential that that the Greater Philadelphia region continue to attract talented workers, including skilled foreignborn workers and entrepreneurs. In 2011, Philadelphia ranked number 11 out of all U.S. metro areas in total number of H-1B visa requests; of these 8,875 requests 73.3% were for STEM occupations. On behalf of the CEO Council for Growth and the Regional College and University Presidents’ Council, we urge Congress to act swiftly to enact the sensible reforms to our immigration system that were adopted in the Senate. We specifically support the following:
Drecel University. Credit: Wikicommons.
H-1B cap and increase the employment-based green card cap;
• Exempt STEM graduates from U.S. universities from the annual employment-based visa cap if they have an offer of employment from a U.S. business in a related field; • Streamline and improve visa and green card application process; • Eliminate the employmentbased per-country visa cap; • Use new company-paid visa and green card fees to help fund STEM programs in U.S. schools to train the next generation American workforce; and • Provide visas and green cards to startup entrepreneurs and advance science, technology, engineering and math (STEM) degree holders from U.S. universities. Collectively, these policies will stimulate growth in our region and will help to ensure that we are educating, and retaining, the next generation of innovators and entrepreneurs. Now is the time for Washington leaders to act and ensure that the U.S. can continue to compete on the global stage. We urge Congress to enact reforms to the nation’s high-skilled immigration system.
Gregory S. Bentley is CEO of Bentley Systems, Inc., Helen F. Giles-Gee, PhD. is President of The University of the Sciences, Regional College, Rob Wonderling is President and CEO of The Greater Philadelphia Chamber of Commerce. All are members of CEO Council for Growth, with Mr. • Establish a market-based Wonderling serving as Chairman.
FFeedback , ,IIdeas , ,PPerspectives ??W . .FFeedback @R BBusiness .com eedback deas erspectives Weewant wantto tohear hearfrom fromyou you eedback @Regions egions usiness .com 62
By Jim Innes
THERE’S SOMETHING NEW UNDER THE SUN IN PHILADELPHIA Solar-powered charging stations can serve as vivid green emissaries on campus greens.
martphones may be getting smarter, but their batteries are draining faster; and so mobile consumers look for reliable public places to recharge their electronic devices. A demand has arisen for convenient, reliable charging solutions—and a small group of pioneering companies has emerged to lead a charge toward off-grid, solar-powered stations.
TIME AND PLACE
stations are like visible green emissaries that present a “calling card” of commitment and provide the public with free, renewable electrical power. Solar-powered electronic-device charging stations are bound to become as ubiquitous on college campuses as phone booths once were.
In addition to campus greens, there are plenty outdoor park spaces where solar charging stations can shine—including amusement parks, theme parks, corporate parks, and public parks. As an additional benefit, many organizations are eligible for low-interest financing of the solar-charging tables through the Sustainable Energy Fund. Businesses that install solar qualify for a 30 percent investment tax; educational institutions can also use designated green funds to purchase the tables. Solar-powered charging stations also send a positive message to clients, potential clients, and employees about a company’s commitment to green-energy technologies. But, ultimately, the best reason to invest in solar charging stations may A NATURAL FIT be emergency preparedness. Public relations may end up Solar charging stations can being the tipping point for off- become doubly viable in the case grid charging stations—especially of an extended power outage for colleges, which tend to be particularly from a storm or early adopters of progressive natural disaster. And if this technological change, and are year’s weather is any indication, of f-g rid solar technolog y. always looking for ways to show businesses need to be more CCGI designs, sells, and installs off their commitment to the prepared than ever. solar electric, solar thermal, Green Movement. And where’s and custom off-grid solar power a better place to demonstrate Jim Innes is the CEO products for commercial and green goodwill than a campus o f C a r r i e r C l a s s G r e e n residential customers. CCGI green? Solar-powered charging Infrastructure, a leader in recently launched ConnecTable The demand actually evolved from a perfect storm of three current trends; the explosion of smartphones and other mobile rechargeable devices; an increase in power outages due to monster storms, natural disasters and, more recently, terrorist acts against power grids; and corporate and institutional desires to leverage the green-energy revolution for public-relations reasons. The timing has never been better for companies to build convenient off-grid power stations that boost the burgeoning portable rechargeable electronic devices market – especially ones that operate autonomously through the most extreme weather conditions and power outages.
Solar Charging Stations, robust commercial and residential power stations which bring a unique perspective to today’s technodependent consumer’s everpresent need to stay connected. Learn more at www.ccgigogreen.
Feedback , Ideas Perspectives e want to hear from you. F.eedback @RegionsBusiness.com Feedback, Ideas, Perspectives ? We want to ,hear from you?. W Feedback @R egions Business com April 2014
By Gov. Tom Corbett
PROTECTING PENNSYLVANIA’S ENVIRONMENT, WHILE GROWING OUR ECONOMY Once the energy capital of the nation, the state’s decisionmakers want to seize the chance to regain lost ground.
n 1859, Colonel Edwin Drake struck gold – black gold – when he drilled the first successful commercial oil well in Titusville, Crawford County. We soon became the energy capital of the nation. Pennsylvania was off and running, powering an industrial revolution that created a new middle class, raised the quality of life for tens of millions of people, and changed the world forever. Today, thanks to abundant natural resources right here in Pennsylvania, we stand on the verge of a new energy revolution. Pennsylvania is home to vast quantities of natural gas nestled deep underground, in formations like the Marcellus Shale. Experts estimate there are nearly 500 trillion cubic feet of natural gas beneath our feet – enough to power our homes, factories and vehicles for more than a hundred years. Our coal fields are among the most plentiful in the nation and burn cleaner today than ever before. Responsible, emissionfree nuclear power – with safety as our highest priority – meets a third of our energy needs. And our growing solar, wind, hydropower, biomass and other renewable resources strengthen our portfolio with their diversity and reduced impact on our environment. More than 400,000 Pennsylvanians work in our energy industries, in many cases earning family sustaining wages that pay as much as $30,000 more than the statewide average. We’re marching toward energy independence, becoming a net exporter of natural gas for the first time in a century. We’re making the air cleaner in our towns and cities. And we’re
saving Pennsylvanians – ALL Pennsylvanians – nearly $1,200 a year or more in lower energy prices than just a few short years ago. We didn’t create this opportunity – but we are poised to seize it. That wasn’t always the case. We’ve seen the scars from our past – abandoned mine lands and over-timbering, to name a few. It reflects our ancestors’ failure to ask a simple – but critical – question: “What next?”
three decades. Our goals were clear: seize this opportunity, in a manner that protects the environment and public health; grows jobs; reduces our dependency on foreign energy; and prepares our young people for the jobs of today and tomorrow. Act 13 contains significant new environmental safeguards, including drilling distance setbacks from streams, water wells, and buildings; increased well bonding to make sure wells are properly closed down in the future; increased notice of permit CARPE DIEM Things are a bit different this applications; and increased time around, in several key ways. transparency of inspections, We have learned some valuable violations and penalties. We lessons over the past 150 years. also adopted the most advanced It’s not enough to produce our hydraulic fracturing disclosure abundant resources. We need to law in the nation. build industries around them – right here in Pennsylvania. This COMMUNITY COMMITTMENT fuel can – and must – power a And we worked in partnership to manufacturing renaissance if we craft a fair impact fee, generating are to truly be successful. money for county and municipal We’re also going to ensure that governments to help address the protection of our environment unmet needs identified through and respect for our local the deliberations of my Marcellus communities are our highest Shale Advisory Commission. This priorities. Abundant natural gas April, we will have realized more has transformed our economy, but than $600 million in new revenues it means nothing if we do not have from this impact fee, which is clean water, clean air, and safe benefitting every community in communities. After all, these are the commonwealth. And we’ve our local communities, and it’s our provided the first infusion of new money into our landmark air and water. Growing Greener environmental grant program in over a decade. TAKING ACTION That’s why I partnered with We’re demonstrating that you Democratic and Republican can protect the environment members of the General Assembly, – and grow our economy. Just along w ith env ironmental, ask the thousands of workers at conservation, local government our refineries in Marcus Hook, organizations and others in Trainer and South Philadelphia. passing Act 13 of 2012, the most I was proud to partner with comprehensive enhancement of Democrats and Republicans, our environmental law in nearly business and labor, and officials
from all levels of government to turn the looming loss of a way of life into opportunities that will, hopefully, last generations.
ECONOMIC IMPACT I’ve said many times: energy equals jobs. And we’re seeing that equation come true across our great commonwealth as we stake out our ground as the energy capital of the nation. We’re growing our economy, providing opportunities for thousands of businesses while lowering energy costs for millions of consumers. Lower cost energy equals more money to invest; to hire more employees; to grow our economy. Record natural gas production equals energy security and independence, keeping our dollars here at home and reducing our dependence on other nations. The abundant and diverse energy resources of our great commonwealth present an historic opportunity, but with opportunity comes an even greater responsibility: an obligation to get it right. We can have a cleaner, healthier environment, while enhancing the quality of life for our children and families. We’re seeing the results, with the promise of more to come. Working in partnership with all stakeholders, I’m committed to making sure that we do this right, for the betterment of all Pennsylvanians. Governer Tom Corbett was born in Philadelphia, Pennsylvania, Corbett is a graduate of the St. Mary’s University School of Law and served as a Captain in the Pennsylvania Army National Guard.
FFeedback , ,Ideas ??W . .FFeedback @R BBusiness .com eedback Ideas, ,PPerspectives erspectives Weewant wantto tohear hearfrom fromyou you eedback @Regions egions usiness .com 64
By Bill Sims, Jr.
CREATE A POSITIVE WORKPLACE TO CULTIVATE PRODUCTIVITY Harnessing the power of positive reinforcement could reinvigorate your staff and your bottom lime.
reating a positive workplace culture is extremely important to cultivating a productive and profitable company. The quality of work we do depends on the quality of our workplace culture. When the environment we work in is positive, we become more engaged and committed employees. By definition, workplace culture is a pattern of behaviors that are supported by a management system over time. Harnessing the power of positive reinforcement is the quickest and most efficient way to a better workplace culture.
Research tells us that that more than money, employees want to feel like they are making a difference at work and getting recognized by their boss for making that difference. As employees, we want the ability to do things, to change things. So often employees’ ideas are not listened to or acted upon. It is the boss’ responsibility to provide the money, the time, and the resources for employees to complete tasks and make improvements, and to then celebrate and recognize those people for their contributions.
EVALUATE YOUR OFFICE
The first step in creating a more positive workplace culture is recognizing that your current culture is not where you want it to be. It can be difficult to define your culture--almost like nailing Jell-O to a wall--because it is made up of many small behaviors. But it starts at the top with company leaders. The way they act and behave will be mirrored by employees. So if you want to change the behavior of your employees, start by changing the behavior of your leaders. Leaders can start doing this by listening to their employees and understanding what motivates them. Get to know them, ask them their opinions and share yours in return. I think the most powerful things that bosses can to do are communicate, be transparent and tell people where the ship is headed. Bosses should be asking questions like, “What are we doing that we could be doing better? What’s broken, and how can we fix it?” Ask those questions, listen to the employees and, most importantly, empower the employees to go fix the problems.
Now, this goes against many traditional management styles, t he c om m a nd-i n - c ont r ol , my-way-or-the-highway mindsets of old. The majority of bosses do what I call “Leave Alone/Zap” management. Simply put, it means that we leave employees alone and say nothing when they do something right, but we are quick “zap,” or to punish them when they make a mistake. This k ind of aggressive management style might get the job done temporarily, but it doesn’t create an environment where employees will take initiative to do things when their supervisor isn’t watching. And it will not produce the highest-performing culture possible. Rosabeth Moss-K anter, a professor at the Harvard Business School and an author of numerous books on business management techniques, said, “Compensation is a right. Recognition is a gift.” In other words, paychecks get people to show up at work. But to get more from people than just average performance requires you
Credit: Wikicommons. as a leader to provide additional coaching and feedback when people demonstrate the behaviors that drive results in your company. Bosses who think they don’t need to tell their employees they are doing a good job are not fully engaging them. It doesn’t cost you any money to tell somebody they did a great job. Believe it or not, saying thank you for doing a good job is a much more powerful motivator than a paycheck. Bosses should give employees immediate, sincere feedback when they demonstrate desired behaviors. That way, the employee will be more likely to repeat those behaviors in the future. That’s the power of positive reinforcement. If you don’t do that, then you won’t get those extra behaviors.
you could be and your workplace culture will suffer. It’s only a matter of time before some other company does it better and leaves you in the dust, taking your good employees with them. Culture change is as simple as changing the behavior of the leadership team. By inverting the leadership structure and delegating responsibility to employees, culture can shift dramatically and quickly. Move too slow, and employees might think you are not taking their ideas and suggestions seriously. But like going on a diet, culture change is something you must continue to work at. Day in and day out.
Bill Sims, Jr. is President of The Bill Sims Company, Inc. For MOVE QUICKLY nearly 30 years, Sims has created I have built recognition programs behavior-based recognition for companies including Dupont, programs that have helped large Coca-Cola and Ford. What I’ve and small firms to deliver positive learned from helping so many reinforcement to inspire better companies is that without positive performance from employees and reinforcement, you are getting less increase bottom line profits. performance from your team than
FFeedback eedback,,IIdeas deas,,P Perspectives erspectives??W Weewant wantto tohear hearfrom fromyou you..F Feedback eedback@R @Regions egionsB Business usiness.com .com April 2014
BY THE NUMBERS
Pennsylvania’s rank among states for total energy consumption, according to a joint report released by the American Council for an Energy Efficient Economy
Amount of Pennsylvania’s projected electricity, natural gas, fuel oil and propane needs that can be met through existing, cost-effective efficiency measures widely available today
Amount of the state’s electricity usage that could potentially come from energy efficient sources by 2025
Amount of the state’s natural gas needs that could potentially come from energy efficient sources by 2025
Amount of the state’s projected natural gas needs that could be met by energy efficient sources by 2025
Amount of state energy consumption in the state’s residential sector
Amount of energy consumed by PA’s residential sector
Amount of energy consumption made up by the state’s industrial sector
Amount of energy consumed by the Commonwealth’s transportation sector
Number of new jobs in the Commonwealth that investments in solar energy will yield by 2025
Wages that will be created by investments in solar energy by 2025
Amount of carbon dioxide in tons that can be saved by solar energy investments by 2025 Credit: WikiCommons 66
Feedback, Ideas, Perspectives? We want to hear from you. Feedback@RegionsBusiness.com April 2014
Published on Apr 28, 2014