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REGION’S BUSINESS

PHILADELPHIA EDITION

A JOURNAL OF BUSINESS AND POLITICS

AIRPORT LOOKS TO STEP UP ITS ECONOMIC IMPACT A massive infrastructure investment aims to diminish flight delays and improve customer service. Could this wake a sleeping giant?

SIMPLE STEPS TO PROJECT A STRONGER EXECUTIVE IMAGE TEMPLE’S TEMPORARY ‘MAYOR’ RegionsBusiness.com $2.00 U.S.

6 SEPTEMBER 2012


6 SEPTEMBER 2012

REGIONSBUSINESS.COM

CONTENTS

3 Retail Available For Lease

Big Investments Mean High-Flying Expectations Billions are being poured into PHL in hopes that a big regional economic driver will take off to another level.

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6,000 SF $35.00 NNN

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Estate Boasts 11,000 Sq. Ft. This Lower Gwynedd estate, built in 2000, features more than 11,000 square feet, including five bedrooms, six full baths and five half baths. !

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21st Century Dress for Success

For good or for ill, people make decisions based on your image. Simple steps can make those good impressions.

Commercial Hot Spots Emerge in Suburbs

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

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Lost amidst the buzz over the resurgence of the downtown area is the growth of some suburbs for commercial real estate. As is often the case, it comes down to location, location, location. !

Up to 8,500 SF $26.00 NNN

PRESIDENT AND PUBLISHER James D. McDonald EDITORIAL DIRECTOR Karl M. Smith ASSOCIATE EDITOR Terrence Casey CONTENT TEAM Brandon Baker, Emily DiCicco, Victoria

Marchiony CONTRIBUTORS Jay Bevenour, John Scanlon, Carisa Chappell,

Theresa Katalinas ADVERTISING DIRECTOR Larry Smallacombe

www.precisionrg.com

ACCOUNT MANAGER Charles Coltan

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

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6 SEPTEMBER 2012

REGIONSBUSINESS.COM

EDITOR’S DESK

It’s Time For PHL to Really Take Off

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

I continue to fluctuate between enjoying travel by air and loathing it. That pretty much sums up my experiences with Philadelphia International Airport, too. Often times, I sail into PHL on SEPTA’s R1 and, before I know it, I’m checked in with time to spare for browsing the numerous shops or enjoying a small bite in a comfortable chair at one of the many eateries. Just as often, however, the lines are interminably long, the hallways seem dark and dingy and finding a decent seat near an electrical outlet for my dying laptop seems near impossible. And the wait at baggage claim. Please. That’s the story for PHL. As freelance writer John Scanlon found out while reporting our exhaustive look at the region’s

airport, a lot of economic activity swirls about the terminals and runways. People, cargo and, in short, money are poured through the facility. Yet there are two things that seem to be holding PHL back from elevating from economic driver to economic juggernaut. First is a woefully inadequate infrastructure. Massive investments are being made to remedy problems that routinely land PHL on top of the FAA’s naughty list for on-time performance. Given our population density, it’s not really feasible to build a massive state-of-the-art airport in the suburbs, so PHL essentially has to do more with its limited space. The second is a real business fundamental — customer service. Rightfully earned or not, people

at PHL have a reputation for too often not being, in short, friendly. That’s a cultural issue that needs to be addressed from the top of the organizational chart to the bottom and reinforced in all facets of the operation. Will a cheery disposition by airport personnel generate convention bookings for the city? No. But a reputation for surly behavior certainly doesn’t help the cause. Our first issue of September also features useful tips from Brian Lipstein, an executive image consultant. For one, it’s a reminder that even though workplace dynamics are changing, image is still important. He offers some practical advice that makes a lot of sense. Meanwhile, Carisa Chappell takes a look at the hottest spots for commercial real estate in the

suburbs. With all the attention to the growth inside the city limits, it’s easy to forget that there’s a lot of business being done out there. September is going to be a big month here at Region’s Business and we have some really intriguing content lined up. We’re also developing our website so that we can better serve you 24/7. I’m continuing to enjoy our conversations about our initial two issues and encourage you to keep the conversation going by dropping me an e-mail (ksmith@ regionsbusiness.com) or giving me a call (610.940.1656). So enjoy this edition and, remember, next time your flying into or out of PHL, keep your expectations high, but don’t be afraid to say “thank you� to the person serving you.

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6 SEPTEMBER 2012

REGIONSBUSINESS.COM

WEEKLY BRIEFING

5

MADE IN AMERICA CONCERT ECONOMY

Regional Outlook Mostly Holds Steady ONLINE SALES

Amazon Begins Levying Sales Tax in Pennsylvania On September 1, Amazon.com Inc. began collecting sales tax in Pennsylvania in response to a new state directive extending taxation requirements to any company with a physical presence within the state. With six fulfillment centers in PA, the online retail giant is now mandated to levy Pennsylvania’s 6 percent sales tax from all Amazon.com orders. Spokesman Scott Stanzel expressed confidence that PA customers “will continue to come to Amazon because we offer the best prices with or without sales tax. ” Two bills are pending in Congress on the subject of federal taxation for online purchases, but for the time being states have discretion in the matter. UNEMPLOYMENT

City, Suburbs See Unemployment Numbers Grow It’s more bad news for the Greater Philadelphia region this month: The U.S. Labor Department reported that July’s unemployment rate saw both a month-over-month and year-over-year increase in July. The unemployment rate in July rose to 9.2 percent, an increase from 8.9 percent in June and .1 percent higher than the 9.1 percent from July 2011. The suburbs, meanwhile, fared even worse. The unemployment rate saw a sharp increase to 8.9 percent from 8.5 percent in June; compared to July 2011, the rate was slightly lower, at 8.8 percent. Wilmington maintains the lowest unemployment rate in the region, standing at 8 percent, down .4 percent from last year, but still an increase from June’s 7.7 percent rate.

The Federal Reserve compiles an at-a-glance study of the country’s economic growth, breaking down reports by manufacturers, retailers, financial institutions, and more to retrieve a bigger picture of the economy. The latest report — they are released eight times each year — includes this data from the Third District, the Greater Philadelphia region. Manufacturing Continuing a downward trend — albeit a less negative one than in previous reports — new orders across the region have seen a decline, but products and materials like stone, clay and glass have seen an increase. Industrial machinery, electronic equipment and food, meanwhile, have taken a beating in production as customers reportedly express anxiety as they watch a worsening European economy unravel. Retail Retailers reported a decrease in store traffic as a result of the prominence of the Olympics as well as the displacement of product advertisements caused by increasingly aired political ads. Still, consumers remain optimistic about retail, as year-overyear sales for July improved when compared with June and auto sales staying steady as reported by New Jersey dealerships that boasted healthy sales figures for June and July. Finance Regional financial growth is expected to be stagnant until after the election, but news from larger and smaller lenders alike is fairly positive. Mortgage and home refinancing have been on an uptick trend, and large lenders report a healthy gain in the number of small business loans, personal loans and C&I loans. Reports indicate household and business financial strength continues to stay steady, with few indicators of a downward trend. Real Estate and Construction Cautiously optimistic, residential

(C. GABELLO FOR GPTMC)

builders and brokers report mild increases in sales with more emphasis on traffic, as they continue to pursue the selling of multi-family homes as well as the building and renovation of urban homes in hopes to rebuild the inner city. Nonresidential real estate continues to churn at a lackadaisical rate, showing small increases with interest in commercial areas in southern New Jersey, but remaining sluggish as a result of Center City attracting more residential spaces than office space. Services Service-sector firms show leveled growth, reporting very little growth since their previous reports. Hospitals report slim margins of growth, but drought-induced crop decreases are said to have created an abundance of drivers and trucks, thus lowering financial prospects in the process of being prepared for a better outcome. On a brighter note, advertising firms have shown progress following a successful Olympics season and an increasingly lucrative election season. Prices and Wages Outside of a minor increase in operating costs for manufacturing firms, price levels and wages have remained steady.

Event a Holiday Boost for Hotels

The star-studded musical event Made In America, which featured crowds estimated to be as large as 74,000 people, reportedly gave a business bump to city hotels. Homewood Suites by Hilton, a premier hotel in University City, sold out its 136-unit capacity Saturday, with numerous other Center City hotels reportedly almost fully booked. The high traffic is unusual for a city whose inhabitants may normally flee to the shore for one last holiday beach day. City officials say they will not know the exact financial outcome of the event until after a month or more has passed.

Firefighters Slam Nutter Over Costs While Made in America may have been a weekend to remember for some Philadelphians, for the city firefighters’ union, it was a weekend of contention. Bill Gault, president of Local 22 of the International Association of Fire Fighters, hit on Mayor Michael Nutter for not fully revealing the fiscal arrangements for the music festival. The mayor said he will disclose the full financial contract post- concert. Mr. Gault has publicly criticized the mayor for not accepting a recent fire-arbitration award. Mayor Nutter had countered that its nine-percent pay raise that would come from the plan is too costly. “To add insult to injury, Nutter refuses to say how much the city is spending on this self-serving ego-fest, so he can rub shoulders with Jay-Z and buff-up his national profile while the city continues to fall apart,” Mr. Gault said in a statement.


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REGIONSBUSINESS.COM

WEEKLY BRIEFING

EDUCATION

CONVENTION CENTER

MEDIA

Temple Embarks Center Begins Search for Companies On Largest-Ever Capable of Managing Operations an August 15 decision Fundraising Drive toFollowing weigh options for operations,

Temple University has announced its intention to kick-start a five-year campaign to raise $100 million as an effort to reduce student debt. The fundraising campaign follows the university’s decision to end a multiyear string of tuition increases by freezing the tuition rate for most students. The $100 million target is the largest fundraising initiative the university has ever embarked upon. Upon raising the $100 million figure, the university intends to open up $50 million to students in the form of scholarship awards, and pump the remaining $50 million into endowment.

Penn, CHOP, Drexel Earn Research Grants The National Science Foundation and National Institutes of Health will award the Children’s Hospital of Pennsylvania, the University of Pennsylvania and Drexel University an accumulated total of $10.7 million, coming from 20 separate federal grants. The grants will be awarded with the intention of boosting scientific and medical research projects at the universities and the hospital, with the bulk of the funds — $7.4 million — going to Penn.

Pennsylvania Convention Center Authority officials announced that the anticipated search for companies to take over the center are underway. The PCCA board has reportedly sent out a request for qualifications from firms, in line with earlier claims by Board Chairman Gregory J. Fox that the letter would be distributed by the end of August. “The board has issued the RFQ as part of its ongoing obligation to Pennsylvania taxpayers to ensure that the center is running at maximum efficiency and competitiveness,” Mr. Fox said in a statement released late last week. The board has listed a slew of specific qualities it continues to look for in its hunt for the best-suited management company, saying that it seeks specialties including “advanced knowledge of convention center facility maintenance, repair, construction” and “effective marketing and event management,” tacking on at the end that it would like contenders to be able to “generate more events and higher revenue.” Controversy over management of the recently-renovated Convention Center sparked in June when the Greater Philadelphia Hotel Association wrote to the PCCA board, alleging that labor unions involved with operations of the Convention Center had resulted in thefts, inappropriate

(PHOTO BY B. KRIST FOR GPTMC)

behavior and inflated costs. Claims were disputed, but ultimately decided to look further into the possibility of changing management. Even with an ongoing search for management companies, the board has still expressed its intention to tread water carefully as it does so. “The PCCA hopes to find out what private firms can offer, but stresses that no conclusions have been reached regarding the ultimate direction of the center’s management,” Mr. Fox said. PCCA’s August decision to privatize management of the center came a short 10 months before the expiration date of an agreement with Philadelphia’s labor unions.

Philly.com Editor Leaves for NBCWashington.com Wendy Warren, editor for Philly.com, last week announced plans to leave the website in order to join the ranks of NBCWashington. com, where she will serve as digital editorial manager for the news station. “I am happy to announce that Wendy Warren will be joining our team as Editorial Manager, Digital,” reads a memo from NBC Washington’s Jackie Bradford. “In her current positions as Editor and Vice President of Philly.com (the website of both the Philadelphia Inquirer and the Philadelphia Daily News), she developed new web franchises, and verticals, created the social media strategy and established the site as a go-to place for breaking news.” Ms. Warren will begin work with the NBCowned station on Sept. 17. TAXES

Philly Sees Highest Tax Revenues Since Downturn July tax revenues for the city amounted to $183.5 million, according to the city controller’s office, the highest revenue total the city has seen since July 2007’s figure of $181.2 million. The city has earned $139.9 million from wage, earnings and net profits tax in addition to $21 million stemming from sales tax, the controller’s office reported. Philadelphia jobs, meanwhile, were not as fortunate: the jobs total decreased by 5,500 since last July’s 653,900 jobs, with July 2012’s numbers sliding downward to 648,400.

DEVELOPMENT

SPORTS

Temple Prepares for Big Data Conference

Mt. Airy USA Donates Up to $1.6M to Germantown Ave. Revitalization

Locally-Owned Ganlan Media to Bring Football to China

The Fox School of Business will host its first Big Data Conference September 27 at Alter Hall on Temple’s Main Campus. The conference is limited to 125 individuals and will feature presentations from industry and academic experts alike. Content will be focused on the potential of big data and controversies surrounding it, as well as best practice for its effective application. For more information, visit ibit.temple.edu/bigdataconference/

Mt. Airy USA has dedicated $1.3 to $1.6 million to redevelopment efforts on Germantown Avenue in an effort to transform the neighborhood’s dark corridors into a bustling center for productivity. The organization’s executive director, Anuj Gupta, announced the four new projects — located on Germantown Avenue between Horter Street and Pelham Road — last week at a historic building known to residents of the area as “the shack.” In addition to the refurbished “shack,” new sights on Germantown Avenue will include a yoga studio, office space and a center occupied by Horizon Home Healthcare Services.

Ganlan Media International is set to develop a Chinese football league after gaining exclusive rights from the Arena Football League. The media group said the starting season of the Chinese league will begin in the fall of 2014, with a 10-game schedule and

three exhibition games leading up to the launch. Ganlan Media, which itself is based in Beijing, is owned by the founder of the West Conshohockenbased Judge Group, Martin E. Judge Jr., and Ron Jaworski, former quarterback for the Eagles and current analyst for ESPN.


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WEEKLY BRIEFING

MEDICAL

PENNSYLVANIA LIQUOR CONTROL BOARD

ENERGY

Prodesco Changes Name

PLCB Posts Increase for 2011-12

Sunoco Leaves Philadelphia for Last Shareholder Meeting

Prodesco Inc. — founded nearly seven decades ago — will now be known as Secant Medical, a subsidiary of the textiles maker. “Prodesco has a long, rich history whose legacy for being an innovator will continue under the new Secant Medical Inc. name,” the company’s president, Erik Nadeau, said in press statement. “This name change signifies our commitment to being an innovator within our industry.” Prodesco is a Perkasie-based manufacturer originally started for industrial purposes as textiles boomed in the 1940s, later creating its largely successful Secant Medical subsidiary in 2002, which creates heart stents, orthopedic devices and other components of medical devices.

The Pennsylvania Liquor Control Board touted an increase in sales for the 201112 fiscal year as tensions heat up over public outcry to privatize state liquor stores. For the fiscal year ending June 30, liquor store sales reached an improved yearover-year height of $2.1 billion, a 5-percent increase and a profit and tax revenue generation of $494 million. Legislative efforts were nixed by House Majority

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Leader Mike Turzai during June, temporarily ending the hotly-contested debate over whether the state’s revenuegenerating liquor business should close its 620 state stores in favor of privatized business. The Senate currently is examining a new bill that would allow taverns and bars the opportunity to sell wine and spirits by the bottle upon acquiring a special license.

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Despite having loyalty to Philadelphia for more than a century, Sunoco will host its final shareholders meeting in Michigan. The company, which is scheduled to vote on a possible acquisition by Dallas-headquartered Energy Transfer Partners L.P., will do so at the Detroit Athletic Club. Once the $5.3 billion merger goes through, it will resume retail and pipeline business in Philadelphia, reporting to its new parent company in Texas. ENERGY

Area Company Changes Name The Blue Bell-based Leaman Logistics said last week that, staying in line with its subsidiaries, it will now be referred to as CLX Logistics LLC. ChemLogix LLC provides supply-chain consulting and transportation management; sister companies ChemLogix Global LLC and VistaLogix Global LLC, providing international logistics services.


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6 SEPTEMBER 2012

REGIONSBUSINESS.COM

WEEKLY BRIEFING

BUSINESS PROFILE

OBITUARY

Leadnomics Leads Region on Inc. 500 List

Campbell’s Torcon Inc. Founder Benedict Torcivia Dies Spikes in

Online marketing agency Leadnomics led a pack of 17 regionally-based companies featured in this year’s Inc. 500 list, an aggregate source for the fastestgrowing private companies in the nation based on each company’s revenue growth rate over a three-year period. Boasting an innovative, Googleesque open office space in Center City, Leadnomics hit the ground running with its start-up by generating $11.3 million in revenue in 2011, a 6,429-percent increase from where its 2008 revenue — a modest $173,236 — once stood. The agency works to bring in leads to institutions and insurance companies in the U.S. and U.K., bringing its clients upto-date with the new advertising frontier of the Internet. “Every day, we are presented with new opportunities and industries to explore. It is tremendously exciting to be a part of an ever-changing space, full of new chal-

lenges to tackle and constant innovations that shape the way we can do business,” Co-Founder Zachary Robbins said in a press release. “Our inclusion [in the Inc. 500 list] is a testament to the hard work and dedi-

cation of our team over the past three years.” The agency’s accomplishments are a result of the work of just 23 employees, an increase of 20 employees from where it started in 2007. Forty-eighth in its industry and the leading online marketing agency in Philadelphia, Leadnomics and company founders Stephen Gill and Mr. Robbins are continuing to gain traction well into this year, sponsoring prominent advertising convention LeadsCon East this past July.

4th qtr.

The founder of Torcon Inc., Benedict J. Torcivia Sr. died at the age of 82 last week. Torcon, based in Red Bank, N.J., employs offices at the Philadelphia Navy Yard and in Puerto Rico. Famous works from the company include Rutgers University’s Camden Law School expansion project and Philadelphia’s 9/11 memorial. He is survived by his wife, Elvira V. Torcivia, and his sons, Benedict J. Torcivia Jr. and Joseph A. Torcivia.

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Net income of Camden-based Campbell Soup rose 27 percent in the company’s fiscal fourth quarter, surpassing expectations on Wall Street. Stock increased by 5 percent prior to the market opening Tuesday, with the company earning $127 million — 40 cents per share — by the end of its last fiscal quarter, ending July 29. Revenue predictions were about on target with Wall Street’s prediction.


6 SEPTEMBER 2012

REGIONSBUSINESS.COM

WEEKLY BRIEFING

GOTTA HAVE IT GADGET

AudiOffice The AudiOffice ($299), from Invoxia, made available in late July, transforms the conference call experience. The dock features enhanced audio quality, enabling business owners to conduct streamlined, clear conference calls via their cellphones. But it doesn’t just transform mobile devices into landline phones; it also plays music, and allows users to video chat with others.

WHO TO FOLLOW

@Zappos

Tony Hsieh, CEO of Zappos.com RT @Zappos Vision + Values + Velocity of Adaptation is a great formula for business and for life.

MUST-HAVE APP

FlightTrack Pro Between standard booking dilemmas and troublingly common flight delays, air travel can easily become a bit of a nuisance. By programming a flight schedule into the Mobiata-published FlightTrack Pro app ($9.99, iOS/Android), time-crunched business folk can keep track of alterations to departure and arrival times, out-of-the-blue gate changes, flight cancellations and even seemingly infinitesimal details like weather upon arrival or aircraft type for your flight’s particular plane.

EXECUTIVE BOOKSHELF

Setting an Example Gautam Mukunda, professor at Harvard Business School, employs inductive reasoning in his new book “Indispensable: When Leaders Really Matter” to carve out the real makings of a great leader, dissecting renowned figureheads of yesteryear (or in this case, century) to determine what qualities a leader should possess. Mr. Mukunda further examines how these qualities influence the decision-making process when put in a position of power, inviting readers to absorb this knowledge in order to make a more educated ballot cast or, for business leaders, pull together an organization by setting a strong example as a leader. “In a study that applies to business as well as to civil society and politics, Mukunda explores the ‘filtration’ systems through which we choose our leaders, providing fresh and fascinating insights.” - David Gergen, senior political analyst for CNN

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REGIONSBUSINESS.COM

DEALBOOK

CABLE TELEVISION

Report: Google Selling Horsham-Based Branch Google Inc. has hired Britain-based financial firm Barclays to seek buyers for its Horsham, Pa. Motorola Mobility branch, which develops cabletelevision boxes, according to Bloomberg. Google is reportedly looking to sell the unit in a continued effort to repurpose its Motorola brand for smartphone technology, attempting to get ahead in the company’s ever-hearted battle for industry dominance with Apple Inc. Previously known as General Instrument Corp., the Motorola Home unit, worth about $2 billion, was purchased by Motorola in 2000 before becoming a part of Google in a $12.5 billion quest to obtain Motorola Mobility, officially acquired in August after a final stamp of approval from China. TRANSPORTATION

Hill International Awarded 3 Florida DoT Contracts Hill International was awarded three contracts from the Florida Department of Transportation. Hill will provide construction engineering and inspection on multiple

road and highway projects throughout the state. The contracts have a combined estimated value of about $3 million to the Marlton, N.J.-based company.

AVIATION

HUMAN RESOURCES

US Airways, American Airlines Considering Possible Merger

Kenexa CEO Will Earn $56M in Sale of Business to IBM

US Airways Group Inc. and American Airlines announced Friday that they have signed a nondisclosure agreement to exchange confidential financial information in order to evaluate a potential merger. Philadelphia is US Airways’ second-biggest location and its biggest for international flights. US Airways has sought to combine with American since AMR Corp., American’s parent, filed for bankruptcy last November. American’s flight-attendant union reiterated sup-

port for a unification in a statement Friday. “Combining our networks will allow American Airlines to grow and compete with our industry’s dominant global carriers.” A merger between AMR Corp. and US Airways would create an airline that would tie for the title of largest in the world with United Continental Holdings. In a letter to managers Friday, American CEO Doug Parker revealed that additional unnamed parties were also involved in merger discussions.

The most recent calculations predict that Kenexa CEO Rudy Karsan will walk away with about $56 million from the $1.3 billion sale of the Wayne-based human resources software and services firm to IBM, announced last week. Philanthropy more than monetary gain, however, is Karsan’s primary focus. “I have given so much of my wealth away already [money] doesn’t enter into it,” he said in an interview with the Philadelphia Inquirer last week. Karsan chose the Philadelphia area as the location for Kenexa’s headquarters back in 1987 “because it was one of a handful of U.S. cities with enough insurance companies to both need actuaries and produce them,” he said.

NEWS TIPS Have a business news tip? Email Associate Editor Terrence Casey at tcasey@regionsbusiness.com


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DEALBOOK

BERKS COUNTY

Dollar General, PetSmart Buy 197 Acres, Will Bring 1,000 Jobs to Berks County In two separate transactions, Dollar General and PetSmart Inc. purchased a total of 197 acres in Berks Park 78 in Berks County for $22.2 million.

PHARMACEUTICAL

J&J Settles Complaint For $181M

RegionsBusiness.com Covering Philadelphia 24/7

Pennsylvania and New Jersey are among 36 states that will share the proceeds of a $181 million settlement between Johnson & Johnson and Titusville, N.J.-based subsidiary Janssen Pharmaceuticals over promotional and marketing practices for the antipsychotic drugs Risperdal and Invega. In a complaint, New York Attorney General Eric T. Schneiderman alleged that the companies promoted “off-label” uses of the drugs not approved by the U.S. Food and Drug Administration. Jansen was accused of promoting “Risperdal for dementia in elderly patients, schizophrenia and bi-polar disorder in children and adolescents,” according to a statement from Mr. Schneiderman’s office. New Jersey will reportedly receive $5.3 million from the settlement. The amount of Pennsylvania’s share is not yet available.

It is estimated that the facilities will bring a total of 1,000 new jobs to the area. Dollar General reportedly bought 109 acres to house a 906,919 squarefoot regional distribution center for $12.5 million and PetSmart bought

88 acres for an 870,000 square-foot distribution center for $9.7 million. Each facility will employ around 500 people and both are slated to open in 2014.

PRIVATE EQUITY

Carlyle Group Purchases DuPont Co. for $4.9B

Private-equity firm Carlyle Group agreed Thursday to pay $4.9 billion for the Wilmington, Delaware-based automotive and industrial paint division of DuPont Co. This is the most recent of a string of Carlyle acquisitions this year estimated by Bloomberg to total at least $16 billion and including the July purchase of the Sunoco oil refinery in South Philadelphia. DuPont will continue selling other components to the automobile industry, but has been divesting in projects with less growth potential. The unit’s sales dropped 1 percent in the past year to $1.1 billion, $2.3 billion less than the company’s biggest revenue generator, the agriculture division. Carlyle will assume $250 million in unfunded pension liabilities and it is unclear how DuPont employees will be affected after the deal closes in 2013. DuPont shares closed Thursday at $49.58, down 36 cents, or 0.72 percent. GAS

PGW Increases Prices Philadelphia Gas Works said Tuesday that it will increase its gas rate from $1.36 per hundred cubic feet (Ccf ) to $1.41 per Ccf.


6 SEPTEMBER 2012

REGIONSBUSINESS.COM

POLITICS

VOTER ID

State Distributes Voter-only IDs The Pennsylvania Department of State introduced the Voter ID card last week, for the purpose of making it possible for every citizen, no matter their age or income, to obtain proper voting identification. The card, only for voting purposes, is to be used as a last resort. It is to be distributed only to those who have already exhausted all other venues for obtaining an ID. In other words, this card is for those who have already made at least one trip to a Department of Transportation office. In its first two days, 87 cards were distributed to Philadelphia, with another 57 distributed to the rest of Pennsylvania.

Groups Voice Opposition to Voter ID Law It has been widely discussed by opponents of the Voter ID bill that AfricanAmericans would be hit hardest by the legislation. But two Asian-American organizations are now taking legal action against it. The Asian Pacific American Bar Association of Pennsylvania and the Asian American Legal Defense and Education Fund filed a brief to overturn Commonwealth Court Judge Robert E. Simpson Jr.’s decision to block a preliminary injunction. They claim Asian-Americans are disenfranchised by the legislation because of name custom confusion and language barriers. According to the 2010 U.S. Census, there are around 400,000 Asians in Pennsylvania.

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TRANSPORTATION NATIONAL CONVENTIONS

WE WILL NOT LET THE REPUBLICANS END THE GUARANTEE OF MEDICARE, WHICH COULD COST SENIORS THOUSANDS AND ENDANGER THE HEALTH AND RETIREMENT SECURITY OF MILLIONS OF AMERICANS.’ —U.S. REP. ALLYSON SCHWARTZ, 13TH DISTRICT, AT THE DEMOCRATIC NATIONAL CONVENTION

Corbett Left Out of RNC While Gov. Tom Corbett did attend the Republican National Convention last week, he did not speak. His omission from the line of speakers has been a point of contention for Pennsylvania Democrats. But there are a number of reasons the governor could have been left out, according to the Daily News’ John Baer. One possibility? The governor doesn’t have a political agenda. GOP state party Chairman Rob Gleason claimed that Gov. Corbett isn’t a “selfpromoter.,” Mr. Baer

reported. However, it could also be that Gov. Corbett only endorsed Mitt Romney after Sen. Rick Santorum left the race. State Democrats argue that the real reason is that presidential candidate Mitt Romney doesn’t want to be associated with Gov. Corbett’s decreasing approval rating. Or maybe it’s something more altogether. After the pro-Romney Super PAC Americans For Prosperity reportedly pulled their ads from Pennsylvanians’ airwaves and televisions last week, some argue that Gov. Romney has given up on swing state Pennsylvania.

Democratic State Rep. Peter Daley, 49th District, has asked two of the Pennsylvania Turnpike Commission’s top officials to resign because they showed “lack of leadership, inability to manage funds and failure as a fiscal watchdog for the Turnpike Commission.” In a letter, Daley wrote that CEO Roger Nutt and COO Craig Shuey should leave, citing the Turnpike Commission’s $7 billion (and increasing) debt as evidence of their failure. Furthermore, he requested an internal audit of the turnpike and an investigation by both the Attorney General’s Office and the Auditor General. The Turnpike Commission has announced

State Rep. Peter Daley

that tolls would increase again in January 2013, the fifth time since Act 44, which requires the Turnpike to pay a total of $450 million annually to the state Department of Transportation, passed in 2007. Early in 2012, Auditor General Jack Wagner claimed that this Act was the cause of the turnpike’s growing debt.

LEGISLATION

New Bill Defends Against Online Impersonation

COURTESY OF PENNSTATELIVE.COM

Penn Students Travel to Conventions Twenty students at the University of Pennsylvania are getting a firsthand lesson in politics this semester, by traveling to the Republican or Democratic national conventions. The students are in the communications class, “Campaigns, Debates and Conventions,” taught by Republican David Eisenhower, the grandson of President Dwight Eisenhower, along with Marjorie Margolies, a Democrat delegate and former congresswoman. Politics runs in her family as well; she’s Chel-

Two Turnpike Commission Officials Asked to Resign

sea Clinton’s mother-in-law. Last week, eight students watched Mitt Romney be named the Republican presidential candidate in Tampa, Fla. On Thursday, the rest of the class will watch President Barack Obama be named the Democratic candidate in Charlotte, N.C. The course covers everything involved in the campaign, including themes, finances, and even social media. It runs until Election Day on Nov. 6.

Republican Rep. Kathy Watson, 144th District, with support from the American Civil Liberties Union of Pennsylvania, is going after internet “perpetrators” — those who use the internet with intent to cause others’ harm. The bill, titled House Bill No. 2249, expands Pennsylvania’s law to define “the offense of online impersonation; and prescribing a penalty.” "The intent of the bill is noble and important," said Andy Hoover, director for the American Civil Liberties Union of Pennsylvania. "The primary sponsor is trying to protect Pennsylvanians' privacy." It specifically defines the criminal act of internet impersonation: “A person commits the offense of online impersonation if he uses the name, persona or identifying information of another person to do any of the following without obtaining the other person's consent and with the intent to deceive, harm, defraud, intimidate or threaten any person:” Rep. Watson noted that 10 other states currently have similar legislations; she expects lawmakers will take this up in September.


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POLITICS

8TH DISTRICT

8TH DISTRICT

6TH DISTRICT

Campaign Cost Continue to Rise In 8th Congressional District Race

Boockvar Releases Ad, Takes Offensive Stance

Trivedi Attacks Gerlach in First Televised Ad

In what is possibly Pennsylvania’s most competitive congressional race, the race for the 8th District has been an expensive one. While during Rep. Mike Fitzpatrick’s last election c yc l e in 2010 he suggested to his opponent Congressman Patrick Murphy that they both limit Fitzpatrick campaign spending to just $1 million, this time around he’s not feeling so thrifty. According to the FCC, incumbent

Rep. Fitzpatrick has raised $1.8 million, including $395K in Q2 alone. His challenger, Democrat Kathy Boockvar, a Bucks County attorney, has only raised $675,000, around $330,000 in Q1 and Q2. What’s keeping his costs high? A $3.7 million advertising buy this fall by Boockvar the Democratic Congressional Campaign Committee in the Philadelphia media market.

Screenshot from Ms. Boockvar’s latest ad

Rep. Mike Fitzpatrick’s campaign has released a two-minute video explaining how the Republican candidate has been an advocate for women in Washington. “Mike Fitzpatrick is one of the only people inside the Beltway that’s going to understand what we really need to do for women’s health care,” cancer specialist Dr. Beth DuPree said in the video. Democratic challenger Kathy Boockvar released an ad this week saying Rep. Fitzpatrick is a threat to Social Security and Medicare.

The first televised ad of the 6th District race between Manan Trivedi and Congressman Jim Gerlach has been released and is airing across the district. The Trivedi campaign sent an email to supporters explaining the move: “With the start of the Democratic National Convention this week, we took the strategy of going up on TV right now. But the back end of that strategy comes with it a simple rule: When you go up, you stay up.”


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POLITICS MOSES WALKER SHOOTING

Corbett Demands Answers After Shooting of Officer Rafael Jones, who allegedly shot and killed Philadelphia Police Officer Moses Walker Jr., was supposed to be in jail at the time of the shooting. Mr. Jones reportedly failed a drug test August 10 — thus failing his probation. His probation officer asked for, but never received, an arrest warrant. Gov. Tom Corbett announced recently that he has ordered the Pennsylvania Board of Probation and Parole to Walker conduct an investigation into what went wrong. “I want to know the facts,” Gov. Corbett said in a statement. Democratic state Rep. Brendan Boyle, 170th District, declared that the House Democratic Policy Committee will hold a public hearing in September to discuss parole procedures.

PRESIDENTIAL ELECTION

Libertarian Party Fights to Remain on State Ballot Libertarians are continuing their fight to remain on the state ballot as they head to Harrisburg Wednesday for signature reviews, according to the Associated Press. Voters backed by the Republican Party challenged about 38,000 signatures on a petition to include the Libertarian Party on the Pennsylvania ballot for president. The opposing parties spent the last two weeks reviewing the signatures. According to the Associated Press report, the Libertarian Party has more Johnson that 15,000 valid signatures; it needs 20,601 signatures for former New Mexico Gov. Gary Johnson to remain officially as a candidate for president of the United States.

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U.S. CENSUS

Next Census Could Include ‘Hispanic’ Race Category The third-largest race group in the 2010 census was “Some Other Race,” prompting the government to find a better way for Hispanics to identify themselves. A new proposal would allow citizens to indicate their race under one category — Hispanic — regardless of specific race. The proposal hopes to improve the accuracy and decrease the rate of non-responses in the census count. Maria Montero, executive director of the governor’s Advisory Commission on Latino Affairs, said it’s not “anthropologically based.” “It’s a socio-political presentation of who you are. Genetically, when you look at Latinos, it’s an intermingling of so many races and cultures.” In Pennsylvania between 2000 and 2010, the Hispanic population grew from 394,088 to 719,660 — an increase of 82 percent. The next U.S. Census will be counted in 2020.


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Find the Look That Suits Your Profession, But There’s More to Building Your Image

Brian Lipstein is president and founder of Henry A. Davidsen, Master Tailors and Image Consulting. Learn more at www.HenryDavidsen.com

Image is everything. Well, not everything, but it is pretty important. Image consists of appearance, behavior and communication — keeping all of these aspects of yourself professional and impeccable is essential, no matter what business you’re in. As a member of the AICI (Association of Image Consultants International) and an award-winning tailor, my expertise lies within men’s professional wear. Professionalism can be displayed in a number of ways: how you talk, how you walk, through the quality of your work, and especially for a first impression, how you dress. Most of you are probably thinking that I’m talking about professional versus business casual versus casual clothing. On the surface, this assumption is correct. As an attorney, dressing in a suit adds a level of credibility to your work before you have even performed. When choosing what to wear on a daily basis, it is important to think about the situations you will be encountering that day. Are you meeting with a client for the first time? Do you have an important meeting with a partner of the firm? Also consider your work environment. If your office is more conservative, it is the expectation that you should be in a suit on

a daily basis. However, even if you work in a more casual environment you are going to encounter a situation that requires you to wear a suit. So when wearing suits, what elements create a more professional appearance? First, the suit must be properly fitted. If you are buying off-the-rack be sure to buy too big, not too small. Even then, the most important alterations are expensive and are not always possible. In the end, to ensure the correct fit for every dimension, including taking into account your posture, I recommend exploring custom fit clothing. A quarter of an inch here or there will make a significant difference in your look. The colors you choose to wear are also important to the message your image conveys. A good rule of thumb to follow is “keep it dark.” However, the exception to this rule is the color black. I see way too many of these suits daily on the streets of Philly. Black should be reserved for formal occasions, evening wear or in times of mourning. Consider a solid navy or dark charcoal suit for a professional daytime look. A high contrasting shirt (like white under a solid navy suit) increases the professionalism of your image. Complete the look by paying

close attention to details: a warm colored tie will kick up your appearance by showing your energetic side, socks that match your trousers create a smooth transition on the eye and matching leather accessories (shoes, belt, wallet, briefcase) finish off your polished look. When building a wardrobe, in order to maximize the efficiency of your suits, think of them like framed art. The suit is the frame, the shirt is your canvas, and the tie and other accessories are your pieces of art. If you think about it in this way, by choosing a nondescript frame, you can switch up the shirt and tie, which is what your audience will remember. This way you can wear the suit with a variety of combinations, making it look different each time, and allowing you to invest in higher quality, and less quantity, when building your professional wardrobe. These are general rules for professional dressing but again, image goes beyond what your wear, you must take into account etiquette, grooming habits and how you generally present yourself. Let your image set the tone for your professional life — don’t let a sloppy one define you before you even have a chance to speak.

Because Capitalism Works.

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ROOM TO GROW WITHOUT DELAY(S) There’s no denying the power of Philadelphia International Airport as an economic driver for the region. But eliminating flight delays and improving customer service could greatly increase the airport’s impact.

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BY JOHN SCANLON

W

hen he was formally appointed the city’s new airport chief back in December 2009, Mark Gale knew the likelihood of turbulence ahead was quite real. The nation was mired in an economic bust, a recession notable for aftershocks that linger to this day, and the airlines — and the airports — were feeling the money drain as much as any industry. The hard times had come as the industry was riding a four-year wave of rebounding ridership and revenue, a painstaking recovery from the infamy of the terror attacks of September 11, 2001. This harsh economy also skidded along the tarmac of Philadelphia International Airport, a business Goliath that planners and politicians alike hail as the “economic engine that drives the Delaware Valley” — a transportation hub that pumps some $14 billion a year into the regional economy. Mr. Gale knew that everyone with a stake in the airport had to keep flying. The time since has been a frenzy of activity, significant for hefty financial investments to upgrade facilities and operations, but Mr. Gale is convinced that Philly International’s enhanced stature as an urban aviation center is about to deliver even more horsepower to this economic engine. “Infrastructure improvements continue to be so important,” he said, noting that the issue was among his immediate priorities when Mayor Michael Nutter anointed him CEO of the city’s Division of Aviation after the retirement of Charles J. Isdell. “If we’re going to remain strong and vital in the market, the airport facilities have to be bigger and better. There’s a saying in this business that if you’re not building, you’re falling behind. I’m confident there is still a good amount of growth in Philadelphia’s future, and the airport has to grow along with it if we’re going to remain an important hub for this economic activity.” As he spoke, work continued on the $117-million conversion of Terminal F — only a decade old but already obsolete by aviation standards — to a operationally efficient structure for US Airways Express flights and a retail haven with broader offerings of eateries and shops. But it’s a far more ambitious and costly project — the Capacity Enhancement Program, or CEP — that has created a buzz amid Center City Philly’s ongoing resurrection of the past two decades. For the airport, CEP and its comprehensive list of runway construction, terminal modifications, a centralized ground-transportation center and construction of a high-tech transport system to move passengers around the airport. It’s the most expansive undertaking ever for a transit complex that debuted on June 20, 1940, as Philadelphia Municipal Airport with four airlines that transported 40,000 passengers that first year. Almost 31 million people traveled through the airport last year. The price tag for this project? About $6.4 billion. The construction schedule: about 13 years, starting next year and resuming in phases through 2025. The sober-

PHOTO COURTESY OF PHILADELPHIA INTERNATIONAL AIRPORT

Major Projects, Investments Capacity Enhancement Program: The airport culminated a 10-year planning process and a sevenyear environmental-review process in January 2011 when the Federal Aviation Administration approved CEP. This $6.4-billion project, which starts next year and has a targeted completion in 2025, provides for construction of a new runway that will allow independent, simultaneous aircraft operations in all weather conditions to significantly reduce delays; extension of two runways (one of which will provide the necessary runway length to accommodate non-stop, long-haul flights and facilitate greater global reach); enlarging and reconfiguring the existing terminal complex; relocating several off-airport facilities; developing a centralized ground-transportation center; constructing an automated people-mover for transport of passengers between terminals; and adding parking facilities that will interface with the existing SEPTA rail line. The funding will be aided in part by the FAA’s intent to contribute $466.5 million over the life of the airport CEP. Terminal F Expansion: The $117 million project, with an expected completion in 2015, will provide additional capacity for passenger — and baggage-processing and airline operations. The project reconfigures the terminal and adds about 80,000 square feet to the existing 205,000 square feet. It will feature a new and expanded “central hub” to accommodate additional concessions and centralize airline operations. Highlights include a new baggage-claim building, passenger-service amenities, additional operations facilities for US Airways, and a corridor linking terminals F and E to allow passengers to move between all airport terminals without having to leave the secure areas to be rescreened. Since opening in

2001 to accommodate US Airways Express, Terminal F has become one of the airport’s busiest terminals, serving 16.7 percent of passengers. Terminal D/E Modernization and Expansion: This project consists of a new 210,000-square-foot, multi-level connector building between terminals D and E; a 50,000-square-foot addition to the Terminal E concourse that provided three additional passenger gates; a 9,000-square-foot connector building between Bag Claims D and E; and other renovations. The baggage-claim renovations and the Terminal E expansion were completed in early 2010. The expansion includes a 500-seat waiting area, mini-food court with three new concessions, high-bay ceiling with natural light and new permanent artwork. The total estimated cost of the D/E project is currently $345 million. Projected completion date of the final phase is September 2013. Terminal A-East Improvements: This project will make it fully compatible with the newer adjacent international Terminal A-West. The first phase, including a new seven-lane security checkpoint and upgrade of the fire-alarm systems, has been completed. The second phase, including concourse and ticketing space improvements, was completed in mid-2011. The final phase, modifying the outbound baggage-handling system to provide a full Explosive Detection System for checked baggage, is under construction with an estimated completion of early 2014. Total cost: $78 million. Rehabilitation of Runway 9L-27R and Connector Taxiways: This $36 million project is highlighted by pavement replacement to extend the life of the 9,500-foot runway and connecting taxiways. Projected completion is in July 2013.


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Billions of dollars are being invested to increase the airport’s capacity and improve customer service.

ing reality is that in light of an impressive list of mega-million-dollar infrastructure upgrades over the past decade — totaling about $1.2 billion by official calculations — the airport is mortgaged to the hilt, but CEP is regarded as a lifeline necessary for the region’s growth and prosperity. The project also gets a thumbs-up from the big economic-growth players in town, from the Greater Philadelphia Chamber of Commerce to Select Greater Philadelphia and the Philadelphia Convention and Visitors Bureau. These major groups that are on board with the consultant studies and Mr. Gale’s assertion that this long-conceived project will deliver greater airport efficiency, make life more pleasant for the harried traveler, and enable the airport to tap revenue sources generated by a global economy. CEP also is being embraced as the long-sought solution to a lingering problem: flight delays. It’s an issue that can have an impact on the bottom line.

COURTESY PHILADELPHIA INTERNATIONAL AIRPORT

“We launched into our master-plan process in 2000,” recalled Mr. Gale, at the time an administrator who oversaw operations and facilities, “and in 2002 we were cited by then-U.S. transportation secretary (Norman) Mineta for what he called our negative effects on the air transportation system because of our delays. These delays affected not just our airport here in Philadelphia, but it was contributing to a national problem.” According to a Federal Aviation Administration review in 2004, airports finally were starting to recover from the September 11 attacks, which had severely drained both revenue and passengers, but the welcome surge in business — generated in part by the competition from low-fare airlines expanding to bigger cities, as Southwest Airlines did in Philly in 2004 — was accompanied by the challenges of getting these passengers through tougher security checkpoints. “For a long time, people had to deal

with the geographical limitations of this airport,” Mr. Gale said “Our planning indicates that we have made significant changes, and there is a necessity for more of these changes, or relocation of some facilities, and anything less simply means that whatever we do in the future will always be just a Band-Aid.” Early in 2009 while serving an 11-month tenure as acting aviation director, Mr. Gale noted the need to address an average 10-minute delay for arriving or departing flights. Despite all the improvement, flight delays are the elephant in the terminal that cannot be ignored. According to an FAA report, the delays have long contributed to slowdowns throughout the National Airspace System — the airport has the dubious honor of being a “pacing airport” whose delays cause a ripple effect across the country’s air transportation network, in turn exacting a heavy toll in time and money for passengers, airlines and cargo ship-

pers. The FAA stared into its crystal ball a decade ago to paint a likely picture of the airport’s future, and it wasn’t pretty. The agency analyzed existing and projected passenger levels and aircraft activity — the forecast right now is that the airport could be handling an annual load of 52.2 million passengers and 760,000 takeoffs/landings by 2030 — and figured that delays would continue to increase from an average level of more than 10 minutes per operation in recent years to more than 19 minutes by 2025. Here was the agency’s gloom-anddoom forecast for the airport: “When an airport reaches twenty minutes of AAD (annualized average delay), airport users (passengers and airlines) will curtail planned activity and growth in airport operations will largely cease. Simulations indicate that the Philadelphia airport will reach this point before 2025.” The aviation analysts ticked off a list


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PHOTO COURTESY OF PHILADELPHIA INTERNATIONAL AIRPORT

Pa. Airport’s Overall Economic Impact Lags

Commercial aviation helps regional economies to fly high. Airports Council International–North America, a policy and advocacy organization for the nation’s airports, commissioned this 2010 analysis of airports’ contributions to state economies in the U.S. New Jersey ranked 12th in economic output; Pennsylvania ranked 13th. The impact study, prepared by CDM Smith Inc., used FAA methodology to analyze employment, annual payroll and economic impact based on 490 commercial airports. Overall in the nation, aviation supported 10.5 million jobs, created annual payroll of $365 billion, and delivered $1.2 trillion to the economy.

of what’s wrong here. Foremost is “inadequate all-weather airfield capacity” because of configuration. And there’s a host of runway problems: Ma^kngpZrlZk^mhh\ehl^erliZ\^]' Ma^kngpZre^g`malm^g]mh[^ebfited. Ma^Zbkihkmg^^]lfhk^kngpZrl' These limitations restrict simultaneous takeoffs and landings, according to the FAA report, and it doesn’t help that the airfield taxiway configuration causes aircraft bottlenecks and frequent long lines on runway approaches.

What’s a beleaguered airport to do? “Runways that were 1,400 feet apart locked us in as we tried to achieve the things we needed to do to make the airport better,” Mr. Gale said. “It really comes down to the way we’ve been reconfigured over the past several decades. When you get into rebuilding a terminal complex, or perhaps knocking down terminals that existed since the 50s and 60s, the consideration is always whether we have enough space.” But those old-school practices still squeeze the airport. Mr. Gale will tell

The leading states: State Airports California 29 Florida 21 Texas 26 New York 16 Georgia 9 Illinois 10 Virginia 9 Arizona 11 Nevada 5 Colorado 14 Washington 12 New Jersey 2 Pennsylvania 13

Output $157.9 billion $125.8 billion $116.6 billion $85.9 billion $80.5 billion $50.6 billion $49.6 billion $44 billion $40.5 billion $34.6 billion $32.9 billion $30,8 billion $30.2 billion

you it’s fun running the ninth-busiest airport in the nation, but not so much fun running the seventh-most-delayed, as the FAA portrayed it in a September 2010 report. Yet it isn’t entirely fair to dump all this in the airport’s lap. The FAA has been feeling its own heat in recent years, notably from a chorus of airline and airport execs around the country who lament that the skies are getting too crowded, thus contributing to flight delays, and that the federal agency must do more to restore order.

There has always been glib acceptance that the East Coast corridor is a mess, especially the congested airspace from Boston to Washington, D.C. Even the FAA acknowledged that “the airspace serving the New York, New Jersey and Philadelphia metropolitan areas is the busiest, most complex airspace in the world and has remained largely unchanged since the 1960s.” This admission coincided about four years ago with a preview of the FAA’s own strategy to ease airport delays: The New York/New Jersey/Philadelphia Airspace Redesign. It won’t be a quick fix. The painstaking process of planning, environmental-impact reports and public meetings will culminate with route realignments and a redesign of high- and low-altitude airspace for more efficient arrival and departure routes, but it’s conceivable that this massive undertaking won’t meet an implementation originally planned for late fall in 2016. But the FAA says it will be in place when Philly International completes the final phases of its Capacity Enhancement Program in 2025. The city high-rollers whose chips are on Philadelphia’s continued economic growth — Mayor Nutter, Mr. Gale, the CEOs of business and tourism groups — concur on the good things that will come from CEP. Thomas G. Morr, president and CEO of Select Greater Philadelphia, an economic-development organization that attracts companies to the region, said the airport’s ability to accommodate more passengers and flights is critical. “If the capacity of the airport were maxed out, it would impact the growth of this region,” Mr. Morr said. “The Capacity Enhancement Program will provide that greater capacity and certainly help us as we go about our efforts to attract new business to the region.” Over at the Philadelphia Convention and Visitors Bureau, president and CEO Jack Ferguson, whose staff shares the similar mission of marketing Philly to businesses and tourists, regards CEP as vital to expanding a key offering. “Direct flights to the airport impact our international tourism efforts greatly,” Ferguson explained. “We see higher visitation where there are direct flights, and Philadelphia’s accessibility is always top-of-mind for meeting planners in choosing our city.” So what’s the moral of this Philadelphia story? Basically that the airport must neutralize flight delays in the


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Regional Airports Offer Relief, Economic Impact With all the heavy jet power that roars into Philadelphia International Airport each day, it’s easy to overlook the key aviation roles played by facilities like Northeast Philadelphia Airport. The state’s air system ranges from large commercial-service airports to small, privately owned airfields that collectively deliver $23.6 billion a year to Pennsylvania’s economy, according to the state Department of Transportation. But could smaller airports be even stronger partners as revenue producers for state aviation? Just what these airports can and cannot do in the name of commerce is restricted because of welldefined classifications by the Federal Aviation Administration. For example, there are two categories of commercial-service airports — primary and non-primary — cargo service airports, reliever airports and general aviation. Northeast Philadelphia Airport, like Philadelphia International, is cityowned, and both comprise the Philadelphia Airport System. But Northeast’s lack of commercial certification means that it can’t accept scheduled passenger service or cargo shipments from air carriers, said Mark Gale, director of the

name of customer service and economic growth. It’s also why Mr. Gale, who started his climb up the airport’s administrative ladder in 1989, is so gung-ho about the significant redevelopment to date and the even bigger plans that will shape the airport’s future. “Though we have that great 14.4-billion number,” he said, referring to the annual dollars pumped into the region’s economy, “it’s not the best it could be. I’m convinced it should be more. It’s a number that is predicated on the airport we have today. When you’re moving people through your airport smoothly, when your facilities are operating as efficiently as possible, that 14.4 number is going to grow. But when you’re experiencing chronic delays or slowdowns as we are, it has the potential to perhaps discourage some airlines from either moving in or escalating existing service, and it may

city’s Division of Aviation. “The problem with Northeast,” he said, “is that it hasn’t had commercial service since 1989, when it returned its certification to the FAA.” That was required because the airport, whose origins date to the early 1940s, had been without commuter service since the mid-1980s. Gale doesn’t hold much hope that it could be resurrected as an all-purpose airport. It would mean a heavy investment to fulfill today’s FAA regulations. “Today, to turn Northeast into a commercial airport, with all the requirements that would have to be met, it would take a lot,” he said. “Just the limitation of its runway length, to start with. It simply is not ideal for commercial use.” Northeast, however, is certified by the FAA as a “reliever” airport, meaning it can accept diverted aircraft, such as corporate planes, at times of congestion on PHL’s runways. The airport also has proved to be a more convenient, controlled environment for the landings of dignitaries or political VIPs who then are whisked down I-95. Yet, Northeast does have a high aviation profile. It encompasses roughly

influence the decisions made by travelers as well. It’s costing you business.” The infrastructure overhauls spelled out in CEP will make air travel smoother and more timely, Mr. Gale said. And number crunchers have told him that the airport could be pumping $26 billion into the annual regional economy sometime between 2025 and 2030, when the construction dust of CEP finally settles. So what exactly does it mean? The phrase is “economic engine of the region,” a phrase you hear a lot, as when Mayor Nutter stood at a news conference not too long ago and applauded a preview of the upcoming Capacity Enhancement Program by saying, “Philadelphia International Airport is the economic engine for all of Southeastern Pennsylvania. This expansion program is critical to the economic health and growth of our

The approach to Lehigh Valley International Airport.

GLENN LONG

1,150 acres and provides general-aviation services — everything from aircraft and hangar rentals to flight training — supplied by onsite support businesses. According to the FAA, there are 15 commercial-service airports in Pennsylvania — the primary airports (more than 10,000 passengers boarding each year) are Philadelphia International, Harrisburg International Airport, and the Lehigh Valley International Airport in Allentown, which generates more than $300 million annually for the Lehigh Valley economy. In addition to Northeast, 12 state airports have FAA “reliever” certification, including Bucks County’s Doylestown Airport, the Brandywine Airport in West

Chester, and the Chester County G.O. Carlson Airport in Coatesville. The FAA identifies 113 generalaviation airports in the state. Most of the nation’s airports are classified as such, for the most part not approved for scheduled passenger or cargo service but serving communities as aviation centers for small recreational or business aircraft, flight schools, aircraft sales or skydiving lessons. In New Jersey, aviation provides almost $2 billion annually to New Jersey’s economy. The state is home to three large commercial airports — Atlantic City International Airport, TrentonMercer Airport, and the Newark Liberty International Airport.

entire region and will create thousands of jobs.” Analysts who like to measure the output of such an engine will tell you that the huge economic number — $14.4 billion in this case — is tied to hundreds of things. Hundreds of spinoffs, more precisely. The magazine you buy at the airport. The salary of the clerk who sells you that magazine. The cabbie you pay to get to the hotel and the money you pay at the front desk to stay there. The dinner you eat. The tourist sites you visit. And so on. That $14.4 billion in regional economic stimulus — and the roughly 141,000 jobs tied to it — has been reported by the state’s Bureau of Aviation, a division of PennDOT, as part of an overview of the economic clout of airports and aviation in Pennsylvania. The airport’s link to the tourism and

convention business is huge. Last year, $9.34 billion flowed into the Greater Philadelphia economy, courtesy of the tourism industry. It’s projected that by the end of this year, meetings, conventions and group visits booked by the Philadelphia Convention and Visitors Bureau will have filled more than 592,000 hotel rooms and contributed an economic jolt of about $842 million. And the newly expanded Pennsylvania Convention Center, according to PCVB figures, has amassed $2.8 billion in bookings for 2012 and beyond. “The airport is our city’s global connection to the world,” said Mr. Ferguson. “It is many times the first experience or engagement that a traveler has with our city. The airport can set the tone for what is to come. If it is clean, friendly, welcoming and engaging, it can excite the visitor for what lies ahead.”


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The Terminal E expansion was part of a $345 million project that included work on Terminal D.

Even in this moribund economy, Mr. Ferguson and his staff have been able to keep the convention crowd coming to Philly. Creative incentives — among them flexible pricing plans and earlysigning bonuses — encourage meeting planners to bring their conferences or trade shows here. As they sell their audiences on the charms or strategic business offerings of the city these days, Messrs. Ferguson and Morr have plenty in common, and the airport is a significant marketing tool. Both executives are looking overseas to entice tourists or CEOs with museums or a sophisticated business climate, the Liberty Bell and cheesesteaks. “Communities will grow more from companies that start or grow in Philadelphia or are here and choose to expand,” Morr said. “We spend a fair amount of our efforts trying to attract companies

COURTESY OF PHILADELPHIA INTERNATIONAL AIRPORT

from other parts of the world to expand their operations in Philadelphia.” In his seven-year affiliation with the non-profit Select Greater Philadelphia, Mr. Morr and his staff have lured 83 companies to the region — defined as Southeastern Pennsylvania, South Jersey and northern Delaware — amid a down economy that hasn’t made things easy. The staff remains keenly aware that opportunity knocks loudly in other sections of the world. “Just under 70 percent of the business prospects we’re working on now are from overseas, mostly Europe, and airport facilities are very important to them,” said Mr. Morr, who calls the airport the region’s “front door to the world.” According to city figures, more than 700 foreign-owned companies from 39 countries have an office or facility in the region. Mr. Morr notes that Philly flaunts

a sophisticated business base these days, with the death of its manufacturing economy after World War II gradually leading to a business renaissance focused today on what he calls “knowledge-driven industries,” such as pharmaceutical, information technology, financial services, and research and development. These times also inspire Mr. Ferguson to look overseas. According to the U.S. Office of Travel and Tourism Industries, international travel to Philly exploded by 7 percent in 2010, bringing 633,000 foreign visitors here and making Philly the nation’s 13th-most-visited city among international travelers. Overall, more than 37 million tourists came to town that year, roughly a million more than in 2009. Mr. Ferguson said there have been great dividends from PCVB’s partnership with the airport over the years to grow

business here and abroad. An initiative that brought US Airways onto the team led to the creation of 21 direct flights daily to Israel and locales across Western Europe, based on findings of traveler demand. This aviation empire known as Philadelphia International Airport encompasses 2,370 acres in the southwestern part of the city and straddles Tinicum Township in Delaware County, just seven miles from Center City. About 800 city aviation employees are part of the airport’s 24-hour operation, but the personnel swells to about 40,000 when you add airline employees, staffers of the federal Transportation Security Administration, city parking authority workers and the employees of airport restaurants and stores. Local tax revenues don’t support Philly International and federal law prohibits


26 cities from curing their own budget blues by raiding airport funds. Philly International pays its own way, relying on its own aviation fund fueled by revenue from airline fees, space rentals in terminals, parking revenues and concession income, and FAA infrastructure grants. The airport — an expansive complex of seven terminal buildings, 126 boarding gates and four runways — serves the fifth-largest metropolitan area in the nation, and the 30.8 million domestic and international passengers who flew there last year, roughly the same as the year before, were part of 448,129 takeoffs and landings. On a daily basis, 29 airlines and cargo-transport carriers are part of 620 departures to 123 cities, a figure that includes 55 non-stop flights to 36 international destinations. The airport’s financial statements for the 2011 fiscal year paint the picture. Even with a struggling economy, the airport’s finances added some muscle during the budget year, with total net assets (the difference between assets and liabilities) of $835.2 million, an increase of $30.2 million, or 3.7 percent, over the prior year. The aviation fund had operating revenues of $258 million, roughly $18 million better than in fiscal 2010. Operating expenses, however, also were up by $16.1 million, or just over 6 percent, to $281.7 million in the 2011 fiscal year. That caused a $23.7 million drop in the fund’s operating income. Like other airports, PHL’s financial health rides on a menu of fees and charges. In addition to $181.5 million earned from concession and retail leases at the airport, for example, the bottom line is supplemented annually by $60.2 million in landing fees assessed to airlines, nearly $86 million in terminal-space rentals, and about $34 million contributed by the Philadelphia Parking Authority, which oversees the approximate 18,500 parking spots — on surface lots and in parking garages — at the airport. But there’s also a significant revenue producer paid by passengers — the Passenger Facility Charge, an FAAapproved surcharge capped at $4.50 per traveler and assessed to everyone who buys a ticket, and that fee generated $62.3 million last year, according to financial statements. In this multi-million dollar tale, the central character is US Airways, whose main hub is Philadelphia. The primary airline serving PHL flew 69 percent of the passengers who boarded flights there, according to the fiscal 2011 budget report. The airline and its regional US Airways Express affiliates delivered nearly $122 million in operating revenue to PHL last year, or about 47.2 percent of the aviation fund’s total operating money. These profitable associations can be thorny, too. At the start of the year, the airline, which has been probing a merger with American Airlines, announced it wouldn’t support the Capacity Enhancement Program, in particular because it had doubts about the need to build a fifth — and expensive — runway. The airline has insisted that the runway would cost $3 billion, not the $1.8 billion projected by airport officials, and it doesn’t share their conviction that the construction is necessary to remedy chronic flight delays

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REGIONSBUSINESS.COM

Military jets once routinely flew in and out of the Horsham Township air base. When the land reuse authority considered limited air traffic, residents came out in force against the plan.

Residents Outrage Thwarted Efforts to Put Willow Grove Air Base Into Aviation Mix For 75 years, hundreds of acres of former farmland in rural Horsham Township served as a takeoff and landing spot for early aviation, as well as military aircraft. In 1926 aviator Harold F. Pitcairn built an airfield along the now-bustling Easton Road to test and fly a variety of rotary wing planes that he would, over the coming years, manufacture at an adjacent facility. During World War II, the federal government saw the value of the airfield and condemned the field for military use only. By 1943, the site transformed to the Willow Grove Naval Air Station. As the military base evolved — in the 90s becoming Naval Air Station Joint Reserve Base Willow Grove — to include all branches of the military, the space grew to roughly 1,100 acres. When the federal government decided in 2005 to close the base, two main options for the next logical chapter remained: Continue it as an airport, or redevelop it for other purposes. Perhaps the most viable flight option considered was put forth by the Bucks County Airport Authority, the entity that operates airports in Doylestown and Quakertown. The authority’s executive director, John Mininger, has said the authority had hoped to use the 8,000-foot-long runway for personal and business travel in aircraft. Mininger had said the authority was not interested in scheduled flights, which would require special certification. But, for many in the Eastern Montgomery County township of Horsham who had endured decades of loud, low-flying military aircraft coming and going at all hours of the day and night, an airport of any sort was not what they wanted. Many feared that over time the roughly 680 acres that the Bucks County

Airport Authority had requested for the proposed Pitcairn Aviation Business Center, would morph into a reliever facility for Philadelphia International Airport, or be used for FedEx deliveries. For months leading up to the July 2011 decision to redevelop the land sans airport, hundreds of mostly Horsham residents came out in droves to Horsham Land Reuse Authority meetings to protest the consideration of the bulk of the available 862 acres for an airport. Clutching yellowed newspaper clippings of a handful of crashes and fatalities, residents cited the safety of an airport for citizens of the community of roughly 26,000. Many viewed the drone of planes as a negative for property values and quality of life issues. In a February 2011 survey of 160 people in attendance, establishing a civilian airport and aviation facility came in dead last of eight possible redevelopment options. That sentiment was reflected in the HLRA board’s March 2012 decision to approve a mixed-use reuse plan for practically everything — except an airport. A town center, business complexes and more than 1,400 homes are the cornerstones for the massive redevelopment, which officials have said will take about 25 years to build out and cost more than $145 million in infrastructure costs. Aviation proponents, on the other hand, have said that establishing an airport would have cost virtually nothing and could have been open in practically no time. Since the military flew its last planes from the now-shuttered air base in March 2011, more of the airspace has been freed up and planes fly even lower than was the case while the military owned the property.


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at Philly International. The airline’s antirunway sentiment has been shared by three other carriers, Southwest Airlines, Delta and cargo company UPS. It’s clearly a taut tightrope. “We and the airlines regularly sit across from each other at the table to analyze our rates and fees,” Mr. Gale said, “because it’s in our best interests to work with our airlines at a time when they’re trying to recover from stated losses which, collectively, enter the billions and billions of dollars, and at a time when they’re dealing with volatile fuel prices. Yet it’s important for us to produce revenue and operate in a way that we stay lean and mean but still accomplish what we’re setting out to achieve.” That harmony especially is key when you’re trying to maintain good relations with an airline that has a hand in more than two-thirds of your airport’s flight business. Standard & Poor’s, the financial research and analysis firm that issues credit ratings for the debt of public and private companies, is bullish on the airport’s solid management and financial health, affording an A+ credit rating to its revenue bonds and classifying its fiscal situation as stable because of a strong “origin and destination” (O&D) market — about 63 percent of Philly International’s travelers start and end their trips at the airport — as well as good passenger trends and a manageable overall debt burden. Just the same, S&P did raise a cautionary flag for the future. A 2010 analysis of PHL’s operations and finances noted reservations about the airport’s heavy reliance on business from US Airways, as well as concerns that its debt burden could increase significantly in the years ahead as a result of heavy borrowing via airport bond issues to help fund the $6.4 billion CEP project. “Our downside sensitivity analysis shows that the airport has the financial resources to absorb lower passenger levels, assuming US Airways remains largely committed to the market,” the S&P analysis said. “However, if US Airways were to eliminate most of its service, we could lower our rating.” The airport and the airline have weathered some turbulent times. In 2005, US Airways emerged from bankruptcy protection, and if Mr. Gale had been holding his breath while rooting for the airline’s ascent, he was able to exhale a couple months ago. US Airways Group reported a record profit in the second quarter that ended June 30, riding lower fuel costs

The Terminal A-East has seen a lot of public-facing improvements. More behind-the-scenes work is in progress. COURTESY OF PHILADELPHIA INTERNATIONAL AIRPORT

and a burst in passengers to realize net income of $306 million, well above the profit of $92 million earned during the same quarter last year. Mr. Gale said he’s trying not to fret too much over the highs and lows of these recent months. “About 70 percent of our market share is tied to US Airways, so yes, I’d say that could always be characterized as a concern,” he said. “But the airport also has a great ‘O and D’ market, which is critical to any airport’s success. I think we manage ourselves well. As a team, we’re prudent when it comes to investing in the facilities or improvements that will give travelers the airport they’re looking for, but I also think we’re very in tune with managing the risks to achieve that.” You can tell a lot about an airport by its restrooms. At least Mr. Gale and his administrative team think so, which led to the recent debut of fully refurbished and modernized restrooms in a section of Terminal C. The restrooms feature natural lighting, a colorful décor and contemporary fixtures. It had been nearly 25 years since the restrooms were upgraded. This also is in keeping with another Gale priority when he became CEO nearly three years ago. “Customer service and amenities … they’re key,” he said. “It is very important that a passenger’s experience with our airport must be one of good customer service. If our facilities are lacking or if a customer says an employee was rude or wasn’t very helpful, that’s not good for the airport, and it certainly isn’t good for the city. This is why we have (marketing)

people who have come up with some creative and innovative ways to make our customers feel good about bringing their travel business here.” These brainstorms have produced the third year of “Just Plane Fun.” It’s a summer program that lets the good times roll for airport customers — a mix of entertainment and kid activities and informative displays, not to mention nice raffle prizes. There’s also the allure of the Passenger Chillin’ Zone, a comfy living room in Terminal C where folks can await flights in couch-potato splendor. “It’s an extremely popular program,” Gale said. “We also have a summer refreshment program, where we offer a free glass of lemonade if customers are stuck in long security lines. A gesture as simple as that can make such a difference.” What do the customers make of all this? Turned to SkyTrax, a popular website devoted to consumer reviews of the nation’s airports. Of roughly 100 critiques of PHL posted during the past four years, the airport has an “average” score of 5.2 out of a high of 10, meaning half of the fliers recommended the airport, half of the fliers couldn’t. So what you get is the good: “My complaints were with US Airways, not with Philadelphia International itself. I found this airport quite lovely, the TSA (Transportation Security Administration) and airport staff were very nice and helpful. There’s a mound of concessions and stores to occupy your time if you have a lengthy layover. Cleanliness was pretty good and I will fly through PIA again.”

And you get the not-so-good: “Travel advice: Arrange your international flight to connect through any American city other than Philadelphia. Two hours between flights should be ample time to make a connection, but customs took an hour and a quarter. Security took another 20 minutes. There is no allowance for connecting passengers. After security, we had just minutes to make it from the A gates to the B gates, something the TSA guy said would take five minutes. Well, it is only five minutes — if you’re in a flat-out dead run, which we were. My husband ran in his socks, still holding his shoes and belt. We asked for a ride from two separate drivers of those airport electric carts. Both carts were empty but neither driver would help. This airport, its U.S. Customs office and its TSA operation are mismanaged. The staff are rude.” Even if they can’t please everyone, Mr. Gale and his team can take comfort in knowing that customers generally seem impressed with a retail network of about 170 eateries and shops throughout the airport’s seven terminal buildings. It also reflects a $161 million investment by the airport to rejuvenate its food and retail program. Oversight of this sector is left to MarketPlace Development, a Newton, Mass., company that develops and manages retail projects at a budding list of airports around the country. According to its fiscal 2011 financial report, retail-space leases and profit-sharing generated $181.5 million for the airport, making the partnership the most lucrative non-aviation lease for airport officials. “I think we’ve made phenomenal strides over the years; we’ve gone through necessary modifications and renovations, addressed issues to make us better, and I truly believe that we compete quite well with other airports in the country in terms of image, in terms of infrastructure,” Mr. Gale said. “Without a doubt, certainly there are critics out there ... ‘something should be done about this, what about that, why don’t you have what such-and-such airport has?’ ... but I’m satisfied that we have worked hard to match our infrastructure to what the customer has in mind, and that remains the key focus.” Freelance journalist John Scanlon lives in the New Jersey suburbs of Philadelphia.


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Commercial RE Heats Up In Suburbs BY CARISA CHAPPELL Philadelphia’s suburban office space offers a nice contrast to companies preferring to avoid the hustle and bustle associated with city life. While some areas are still recovering from the recession, industry experts point to several suburban office markets enjoying low vacancies and growing rental rates. The Conshohocken and Radnor areas continue to be among the hottest suburban office markets with vacancy rates for class A and class B office properties at 11.5 percent and 11.9 percent respectively, according to a midyear suburban office trends report from Newmark Knight Frank Smith Mack, a regional commercial real estate firm in the Philadelphia area. The average asking rates for office space in those areas are approximately $30.00 per square foot, up from $29 in the first quarter. This is in contrast to the overall suburban office market which the report noted has a 22.7 percent vacancy rate and an average asking rent of $22. “Putting it simply, I would say over the last several years, the number one suburban market is Radnor, closely followed by Conshohocken,” said Robert Walters, executive managing director with CBRE’s Philadelphia office. Walters said that the rent can go for as high as $35 per square foot in those areas. He added that the number is high when compared to other suburbs such as Horsham or Plymouth Meeting, in which rents are in the mid $20’s per square foot. Ted Garrity, senior vice president with Cresa Philadelphia, said those markets are popular because they are conveniently located and offer easy access to rail lines. “Both areas are tight with not a lot of office space available,” he said. “We will start to see speculative buildings again. Some of the big landlords in that area are out of space for the larger tenants that need 15,000 square feet or more.” However, the Plymouth Meeting and Blue Bell market showed the strongest improvement this quarter, according to the report. Overall vacancy rates dropped to 26.1 percent, down from 28.5 percent in the first quarter. Leas-

WE WILL START TO SEE SPECULATIVE BUILDINGS AGAIN.’ —TED GARRITY

There is a growing demand for office space in Plymouth Meeting.

ing activity was strong across the Plymouth Meeting Executive Campus buildings on West Germantown Pike as well as at Arborcrest Corporate Campus. Mark Korman, president of Korman Communities, said Plymouth Meeting is a hot spot as the area enjoys the confluence of four highways including the Schuylkill, the Blue Route and the Pennsylvania Turnpike. “It has a very good corporate base. Some of the biggest REITs, like Brandywine Realty Trust have offices in Plymouth Meeting,” he said. Brandywine realty Trust’s $9 million purchase of 660 W. Germantown Pike early in the year helped bolster the Plymouth Meeting office market. Garrity said this former IMS building had been vacant for several years. He said there is also a shortage of available office space in Plymouth Meeting. Over the past several years he said vacancy rates have come down in the top markets. “Less office space will become available and there may not be a lot of places to go,” he said. “I think people

REGION’S BUSINESS

are getting a little more opportunistic. People realize they cannot be as slow as they had been because if they wait they will get shut out.” However, he said that this isn’t the case in all of the city’ suburbs, primarily those that have access to good rail lines. Korman added that the Willow Grove and Horsham market are also strong when it comes to office space. The Horsham submarket had significant leasing activity at 100 Tournament Drive, according to the NKFSM report. Horsham’s vacancy rate at the end of the second quarter was 18.6 percent, down from 18.9 percent in the first quarter. Korman said that an improved healthy single-family residential base in Horsham has helped to boost the suburb’s office space. He added that the Fort Washington area, which was popular 10 or so years ago is coming back and also has a strong office market. “There are a lot of new retail centers in Horsham and in Fort Washington, which used to suffer from a lack of

services,” said Korman. “But a lot of new services and amenities have made the area more attractive.” He said that in some hot markets it’s all about office space following where the retail space goes because people like to be conveniently located near restaurants and stores. While office markets in the suburbs have performed well, experts say the Center City area is still hot. “The Philadelphia Central business district is as hot as it’s ever been with a rebound in mixed use building demand,” Korman said. Garrity agreed that the downtown office market is popular adding that the millennial generation is looking for the convenience city living offers. He said this is reflected in some of the suburban office markets with good access to the city. However, Walters said the lower tax rate is a deterrent for as it is higher in the city than in the suburbs. He believes that both markets will continue to show strength. Carisa Chappell is an asociate editor with National Association of Real Estate Investment Trust.


6 SEPTEMBER 2012

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FINE ESTATES PREVIEW

29

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Q&A

6 SEPTEMBER 2012

REGIONSBUSINESS.COM

RICHARD ENGLERT’S

MAYORAL STINT AT TEMPLE

Richard Englert has always had only six months as president of Temple University, but he doesn’t have much interest in waiting quietly for his term to end.

Ann Weaver Hart is noted for the progress she made during her tenure at Temple but will also be remembered as being the first female president. Do you feel any trepidation about succeeding her? Becoming the president of Temple University is an extraordinary honor, and I am delighted to serve in that role for a six-month period. Since I had the opportunity to serve as provost under President Hart, I know first-hand the tremendous progress the university made on so many fronts under her strong leadership. When I accepted the role of acting president, the board of trustees was in the final phases of its search for a new president. Since that time, they have named Neil Theobald as the next president, and everything I have seen and heard about him leads me to conclude he is exactly the kind of leader that Temple needs right now. So I find myself in a fortunate position, as the bridge between two remarkable leaders — Ann Weaver Hart and Neil Theobald.

In the short time that you will serve as president of Temple, what sort of impact do you hope to have on the university? My time as acting president has confirmed what I already knew: Temple is a highly complex organization with a richness and energy and breadth that defies stereotypes. It is continually changing and improving. In one way, it’s a small city with its own rules and large population, so a president’s role is often akin to that of a mayor’s. But our role is education and the discovery of knowledge, which means that Temple is not only a place where people live and work, but a home to new ideas, research that changes peoples’ lives coupled with the highest quality teaching. So the president is also the leader of a significant teaching and research enterprise. At the same time, when its health care group is included, Temple is a $2.5 billion enterprise whose future affects thousands in our region everyday. As president, it’s my role to keep all of these areas moving forward.

In your opinion, what are Temple’s strengths in the state school market? It’s a challenge to give a brief answer, because Temple has so many strengths. If I had to select only one strength, it would be our faculty. Having worked with these men and women for more than three decades, I can tell you they are extraordinarily talented...and totally dedicated to our students in ways that I think would surprise many people. Other strengths abound: a committed group of forward-looking leaders on our Board of Trustees; an energetic, engaging and high achieving student body with a diversity that reflects the greatness of America; a dedicated, service-oriented staff; an outstanding health system that is one of the best in the country; a wide variety of highly-ranked programs; new state-of-the-art facilities that have changed the skyline of North Philadelphia; and a rich array of academic programs internationally, including Rome and Tokyo. Another strength is our location. Philadelphia is certainly a tremen-

dous asset, offering students an opportunity to live and learn in one of this nation’s great cities. In the last decade alone, we have become an increasingly residential university, as students have told us they want an urban learning experience. We now blend residential with commuting students and that offers tremendous diversity to our academic community. What challenges do you see for Temple? The greatest challenge facing Temple is the same facing many public, urban research universities: keeping our excellent education affordable and accessible. This year, Temple’s trustees and the university leadership have taken some dramatic steps to make this happen. The first step came when our Board of Trustees decided to hold base tuition at last year’s level — that was a bold action that drew an instant and strong round of approval from our students and their families.

33


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6 SEPTEMBER 2012

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BY THE NUMBERS

$6.5 BILLION

Cost to employers from lost productivity due to fantasy football, according to Chicago-based outplacement firm Challenger, Gray & Christmas. “Employers will not see any impact on their bottom line and, for the most part, business will proceed as usual,” CEO John Challenger noted on the firm’s blog.

111,300,000

0.4%

The increase in Philadelphia’s negativeequity rate (people who owe more on their mortgage than their home is worth), the only increase among 30 major U.S. cities.

-0.5%

Change in Pennsylvania’s seasonally adjusted unemployment rate from July 2010 to July 2012.

432,000 Tons of freight handled by Philadelphia International Airport in 2011.

52

Philadelphia Eagles employees who began working for the team as interns.

53

The NFL roster limit (and, therefore, the Eagles’ roster limit) during the regular season.

25,000

Viewers of the 2012 Super Bowl, the third straight year it has set a viewership record.

State-owned bridges in Pennsylvania, third-highest in the nation.

37,500,000

5,000

Viewers who watched President Obama’s most recent State of the Union address in January.

Structurally deficient state-owned bridges in Pennsylvania, the highest number in the nation. It’s the lowest total for Pennsylvania since 1998.

3,000

Number of murals in Philadelphia.

1,400

Daily take offs and landings at Philadelphia International Airport.

30,300,000

Viewers who watched the Republican National Convention on its closing night when Mitt Romney officially accepted the party’s nomination. Not that there was any doubt.

9,900,000

Viewers who watched “America’s Got Talent” last week.

2,900,000

Viewers who watched “Here Comes Honey Boo Boo” on The Learning Channel on August 29.

120,000

Average number of vehicles that cross the Walt Whitman Bridge (the busiest bridge connecting Philly & NJ) daily.

30,800,000 $1 BILLION

Passengers handled by the airport in 2011, ranking 18th among U.S. airports (just behind Detroit and ahead of Boston’s Logan International) and 43rd in the world.

Amount spent this century on capital improvements to the airport.

$158

The daily “per diem” amount allowed for state legislator’s expenses.

$181,000,000 Settlement by Johnson & Johnson and subsidiary Janssen Pharmaceuticals over promotional and marketing practices for the antipsychotic drug Risperdal to be shared between Pennsylvania and New Jersey. Also this week, a Louisiana court awarded a $258 million jury verdict over the same drug. A Janssen spokeswoman said the company will appeal the ruling.

$39,333.75

The amount claimed — and received — under the state “per diem” allocation by state Rep. Mark Cohen (above), who represents the 202nd District in part of Philadelphia. That’s in addition to an annual salary of $84,026.


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CHAMBER REPORT

GREATER PHILADELPHIA CHAMBER OF COMMERCE

Health Care Reform Discussion to be Held at the Union League The British American Business Council of Greater Philadelphia will host a breakfast roundtable seminar October 16 titled “Health Care Reform — Decisions & Implications for Cross Border Employees” at the Union League of Philadelphia. A panel of global advisors will discuss how recent and future health care reform will impact global employers. Details are available at www.greaterphilachamber.com. INSTITUTE OF CONTEMPORARY ART

British Artist Deller to Open ‘Joy in People’ Art Gallery British artist Jeremy Deller will visit the Philadelphia’s Institute of Contemporary Art on September 19 for the opening of “Joy in People,” his mid-career retrospective. Originally for the Hayward Gallery in London by Director Ralph Rugoff, the exhibit marks the continuation of a successful international career. Mr. Deller will represent Britain at the prestigious Venice Biennale in 2013.

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PHILA. REGIONAL PORT AUTHORITY UNITED NATIONS ASSOC. OF GREATER PHILA.

ICC President to Participate in Anniversary Conference On September 10, sponsors of the Philadelphia Global Initiative on the Rule of Law will hold a conference on the Rule of Law and the International Criminal Court at the Free Library of Philadelphia. The celebration of the 10th anniversary of the ICC’s establishment will feature a moderated panel discussion about the legislation that brought the ICC into existence as well as a reflection of the feasibility and desirability of efforts to establish a “rule of international law.” The evening will also include presentations from ICC President, Judge Sang-Hyun Song, the Philadelphia Rule of Law Model UN Project and Patrick Madden, executive director of the United Nations Association of the USA. This free event may be counted toward two continuing legal education credits for a $50 fee. Registration information available at www.unagp.org.

West African Officials Discuss Trade Possibilities Last month, a group of West African embassy officials visited the Philadelphia Regional Port Authority to discuss increasing the trade of fruit as well as other food products including nuts and fish. A strong gateway for food products, the PRPA offers West African nations an opportunity to increase their U.S. market share of a multitude of goods, including pistachios. Traditionally imported from Iran, new U.S. economic sanctions against the Middle Eastern nation have opened the pistachio market to new competition. Delegates were reportedly impressed by the Port’s infrastructure, as well as the state of the art, 686,000 square-foot Philadelphia Wholesale Produce Market (PWPM) and excited at the prospect of future business with the PRPA.

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6 SEPTEMBER 2012

REGIONSBUSINESS.COM

OPINION

Underappreciated Airport Can, Must Contribute More

P

hiladelphia International Airport seems to get a bad rap. Like similar facilities, it is an easy target for punch lines and gripes about overpriced food and long waits. But there is no denying the importance of PHL as it relates to our regional economy. It is not just an important part, it is also, in fact, a major player, often referred to as the economic engine for the Delaware Valley. To that end, it has done an adequate job, providing the infrastructure to support growth and generating jobs through its primary and secondary functions. Yet, there is room to grow. And not incremental growth, but significant, game-changing growth. Growth that will come with a cost spread over a multitude of enormous projects. The price tags for each project appears staggering — $117 million to expand and upgrade Terminal F, $345 million for upgrades to Terminals D and E, another $78 million toward Terminal A-East, and $36 million in runway and taxiway rehabilitations before even considering the whopping $6.4 billion for the capacity enhancement project. In these tough economic times, price tags this big prompt knee-jerk reactions encouraging

reconsideration or delay. But these projects are simply a cost of doing business and doing business as the hub of one of the biggest metropolitan areas of the country. These are also costs that have been delayed for too long and that have cost the airport, and the region’s economy, dearly. PHL’s on-time performance is atrocious and embarrassing. While part of those problems lie simply with geography — we are located in the middle of an air traffic mess akin to the Schuylkill at rush hour (that lasts most of the day) — a fair portion lies with simply inadequate infrastructure. These investments aim to put PHL not where it should be, but where it must be. The airport drives economic activity, lots of it, to be sure. But it is capable of driving much more growth. These investments put PHL on the path to accomplishing that, but must be paired with a continued focus on customer service. A combined focus on expanded capacity and world-class amenities and service are required for PHL to fulfill its potential as a massive economic driver across our region. Now that the investments are being made, the time for punch lines is over. It is time for immediate improvement and accountability for all those involved.

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

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

Unions’ Mission Now Off Track Thanks to legislatively provided privileges that allow unions to force dues and fee payments as a condition of employment, more than 50 percent of all state and local government employees are in a labor union. Meanwhile in the private sector, fewer than 9.3 percent of employees collectively bargain. Unfortunately, what was once hailed as a mechanism to ensure fairness in pay and benefits for government labor has become a weapon of inequity that hurts the workers it intended to protect and the taxpayers who wished to protect them. EDITORIAL , 31 AUGUST THE PATRIOT-NEWS

Eastwood’s RNC performance Maybe Clint Eastwood is a closet Obama backer who duped the GOP into thinking he’s supporting Romney. How else to explain the bizarre, distracting, pacebreaking, mood-altering,

@megsa23 Hey cabs of #Philadelphia, “5 to 30 minutes” is not a wait time. You’re worse than Comcast. 31 AUGUST 2012

prime-time act Eastwood put on at the Republican National Convention...” JOHN BAER, 31 AUGUST PHILADELPHIA DAILY NEWS

Philly’s Vast Digital Divide This digital divide issue is a defining problem for Philadelphia, as well as for any other city with its connection rate so far down the toilet. To be sure, living in a major city without Internet access today is essentially living totally cut off from a thriving, everexpanding culture that drives the information-andmeme-centered brain of contemporary society. NICK VADAL, 31 AUGUST THEPHILLYPOST.COM

Sidestepping Concert’s Cost [Mayor Michael] Nutter owes the public a better explanation than his vague promise that the promoters will pick up the “lion’s share” of the costs. It seems like they should pick up more than that, since they also get to keep the ticket-sale profits. EDITORIAL, 8/31 THE PHILADELPHIA INQUIRER

Share Your Comments Here Region’s Business welcomes comments, letters and essays. Send them to feedback@regionsbusiness. com. You can also reach Editorial Director Karl Smith at 610.940.1656.


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Region's Business 6 September 2012