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3 REASONS PHILLY ISN’T DETROIT: PENN, TEMPLE AND DREXEL

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PHILADELPHIA EDITION

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NEW LOOK AT 30TH STREET STATION Work at Philadelphia’s transportation hub — above and below ground — is turning the grand station into a city attraction

STUDY: PA FAILS TO HELP WEAKER CITIES IN STATE MARCELLUS SHALE COALITION CEO RESIGNS FIND AN INVESTOR WITH STAYING POWER

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CONTENTS

3 1519 Walnut Street

New Look Coming To 18 30th Street Station

20 26 27

Modular Plant Wall Livens Up 30th Street Construction Site

Chestnut Hill’s Real Estate Outlook Designed To ‘Recede In The Background’

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Marcellus Shale Coalition CEO Resigns

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Study: PA Struggles To Help Weak Cities

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YEAR OF THE INNOVATOR

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Face-to-Face Contact Vital For Businesses

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Pet Insurance Company Grows 2,500 Percent, Earns $50M In Revenue

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1 AUGUST 2013

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DEALBOOK MEDIAREAL ESTATE

ENGINEERING

Small Local Firm Prepares For Big-Time Expansion Locally-based structural engineering firm O’Donnell & Naccarato recently decided it was time for a big-time expansion and opened a Northern New Jersey office in Mountainside, Union County, to serve clients and projects in the Metropolitan New York region, the Philly Real Estate Blog reports. The firm is expected to provide comprehensive structural engineering services from its New Jersey outpost, including structural design for new buildings, renovations, historic preservation work and façade and parking garage restoration. The move was in response to the firm doing so much work in the region and realizing it

needed a physical presence to benefit its clients and grow its business base. “Our firm has completed many significant projects in New York, Northern New Jersey, and Connecticut, but recognized a physical presence in the region would directly benefit our clients,” Nick Cinalli, SECB President & CEO, said. Twenty-five year industry veteran Paul Panzarino was hired as Principal to lead the new office and its initial team. “We’ve been looking for the right individual and... firmly believe Paul’s engineering and leadership experience make him well-suited to the task,” Anthony Naccarato, SECB Principal, said.

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Northeast Shopping Center Sells For $10M

Commercial Rittenhouse Properties Sell For $10.6M

BET Investments of Horsham, PA has purchased a shopping center at Welsh Road and Roosevelt Boulevard here for $10.4 million, the Philadelphia Business Journal reports. The property totals a little more than 54,000 square feet and is fully occupied by Retro Fitness. Korman Properties was responsible for the sale. Kevin McClernon of CBRE Inc. arranged the transaction on the retail center that was built in 1965. “It’s a really good location and a prime piece of real estate for the future,” Michael Markman, president of BET Investments, said. BET Investments typically buys grocery anchored retail properties but this center’s location presents a potential redevelopment opportunity with the amount of traffic it sees.

David Grasso’s GH Realty has acquired two Rittenhouse Square commercial condominiums from Kimco Realty Corp. for $10.6 million, the Philadelphia Business Journal reports. Robert Fahey, Steve Marzullo and Justin Marlowe of CBRE Inc. arranged the transaction. The realty company FLICKR.COM/MARCSZAR paid $9.1 million for 1805 Walnut, the Alison building, located next to Barnes & Noble, which is not part of the deal. The sale include 31,902 square feet from floors four to eight. GH Realty paid $1.5 million for 1831 Chestnut, a 34 percent occupied office building spanning 25,965 square feet from floors two to 10.


1 AUGUST 2013

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WEEKLY BREIFING EXECUTIVE BOOKSHELF

WHO TO FOLLOW

@FrugalPhillyMom

FrugalPhillyMom.com You don’t need to spend an arm and a leg in Philadelphia, a concept embraced by Linda Vertlieb, the woman behind FrugalPhillyMom.com. Follow her Twitter for info on local deals. RT @FrugalPhillyMom: Deal: Take $10 off tickets for @TheWiggles Taking Off Tour at @TowerTheater with promo code: FLYING RT @FrugalPhillyMom: Tonight is #FREE Wednesday Night Hayrides at Fox Chase Farm w/ a farm-related food activity @ 6pm!

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Doing what counts for your business. At Susquehanna Bank, we’re doing what counts to offer competitive financial products and services, local decision-making and outstanding customer service to build lasting relationships — with people like you. Susquehanna combines the strengths of a community bank with those of a diverse financial services company. Thanks to our regional structure, we have local leaders with lending authority and teams who are committed to providing personalized service. Plus, we have the resources to provide funding ranging from small business loans to complex financing packages. Call 800.311.3182 or stop in to talk about what we can do for you.

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RESTAURANT ROUNDUP

Alla Spina, Federal Donuts Make GQ List Citing its impetus as a “golden age of stuffing our pieholes,” GQ Magazine recently compiled a list of the “50 Best Things To Eat And Drink RIght Now.” Marc Vetri’s Alla Spinna and Federal Donuts came in at Nos. 25 and 48, respectively. It talked up Alla Spinna’s Pig Tails with Fennel Agrodolce, claiming the dish has “... never tasted so sweet, so tangy, so extreme, so profound.” As for Federal Donuts, GQ Magazine said the donuts are “Michelin grade munchies,” especially the Blueberry Muffin and Indian Cinnamon donuts.


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1 AUGUST 2013

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WEEKLY BREIFING

ENERGY

Marcellus Shale Coalition CEO Leaving Organization Kathryn Klaber, who has been serving as CEO of the Marcellus Shale Coalition, is stepping down, the Pittsburgh Post-Gazette reports. Before joining MSC in its infancy, she served as executive VP for competitiveness at the Allegheny Conference on Community Development. PHARMACEUTICAL

Dow Chemical Opening New Facility Dow Chemical opened its Northeast Technology Center in Collegeville Wednesday, July 31. The new 800,000 square foot space will act as one of Dow’s three biggest research and development hubs in the world, with the other two being in Midland, MI and Shanghai. It will house more than 800 people working across multiple businesses. Gov. Tom Corbett and CEO Andrew Liveris were on hand at the opening.

A Mid-Year Picture Of Center City’s Real Estate Market

According to SSH Real Estate‘s 2013 Greater Philadelphia Mid-Year Office Market Report and Outlook, the Philly real estate market is on the up and up. You can thank this conclusion to a sky-high apartment boom, low commercial vacancy rates, and stable rental rates. In commercial property news: Center City commercial rents remained relatively flat in the past six months, but Class B rates are expected to rise through 2014 due to decreasing supply. With only 15 contiguous spaces with more than 50,000 square feet, the limited supply of large blocks of space may lead to the construction of a new office building. The investment sales market in Center City continues to gain momentum. Currently on the market are five buildings that comprise 2.5 million square feet.

GAMING

London Gaming Company Eyes AC For Expansion London-based online gaming company, 2UP Gaming PLC, may announce as soon as Labor Day weekend whether it will acquire an existing Atlantic City casino or build a new one in order to begin offering online gaming in New Jersey, NJBiz.com reports. Vincent Crandon, managing director of the financing company MidOil USA, said a group of Asian investors has committed $330 million to enable 2UP to either build or buy an Atlantic City casino. “We are in the final stages,” Mr. Crandon said.

In submarket news: In a new trend among tech firms, more

companies are moving to Center City in an effort to attract top young talent, as demonstrated in Brand.com’s relocation from West Chester to Center City. In the residential sector: The apartment boom continues with high demand for rental units in Center City. There are currently 22 new apartment projects in the works, which will add 4,500 new units by 2015, if completed. The office-to-apartment conversion trend is not slowing down as evidenced by new projects, such as Alterra Properties’ plan to convert 185 apartments. Despite the increase in residential inventory, vacancy rates are expected to remain low. This is thanks to a pent up demand to trade up from older units and an improved economy, which is leading to more people moving out of parents’ homes and a reduced need for roommates. This article was originally published on Philly Living at Phillyliving.com.

JOBS

5 Healthy Restaurants In Rittenhouse More than ever, eating healthy has been in the news. From the latest green grocery stores to health conscious fast food restaurants, eating lean and green is the talk across America. In Philadelphia, certain neighborhoods are picking up this health trend faster than others. More recently, healthy eating has become a fixture in Rittenhouse Square: Hip City Veg: One of Rittenhouse Square’s top healthy restaurants is Hip City Veg, which creates high quality food that is fresh, fast and 100% plant based. The restaurant’s philosophy is to always try to do better. Mama’s Vegetarian: Located on the corner of 20th and Market Street, Mama’s Vegetarian in Rittenhouse Square has been heralded as the best falafel spot in Philadelphia. Honey Grow: Prides itself on honest eating and growing local by offering some of the tastiest and healthiest high quality salads, stir fry and smoothies in Rittenhouse Square.

Building Permits Fell For Month, Declined 12 Percent Nationwide

Giwa: Situated on 16th Street in between Chestnut and Walnut Street, Giwa is considered the healthiest Korean food in Rittenhouse Square.

New Jersey and Delaware. Even though there is a one-month decline in the permits, residential permits issued year to date through June grew substantially — by double digits — in all three states compared with the same six-month period last year, according to the Philadelphia Federal Reserve. Permits from May to June also declined nationwide at a rate of 12 percent.

Pure Fare: Rittenhouse Square’s Pure Fare believes you are what you eat. This fast casual restaurant’s goal is to create healthy habits out of Philadelphia residents. Pure Fare uses innovative technology to help customers reach their health goals.

Residential building permits fell in Pennsylvania, New Jersey and Delaware between May and June, according to the Philadelphia Federal Reserve. In Pennsylvania, permits dropped by one percent, six percent in Delaware and 33 percent in New Jersey. Single-family permits also dropped in the time span, but multi-family permits rose in Pennsylvania while dropping in

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1 AUGUST 2013

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WEEKLY BREIFING

EDUCATION

Some Teachers Returning To Work Superintendent William Hite announced July 26 that the district has an additional $33 million which will be used to bring back about 220 secretaries, or at least one per school, and 66 traveling music teachers. The one caveat is that there is only enough money to pay those teachers through January. The extra aid will also be used toward fall sports and the turnaround of certain low-performing schools. LOTTERY

Camleots’ Lottery Bid Extended Again The bid from the Camelot Global Services, a private lottery operator interested in taking over management of the Pennsylvania Lottery, has been extended again from July 31 to Aug. 30, PennLive. com reports. Gov. Tom Corbett’s administration needs more time to continue revising the proposed contract with Camelot to address concerns from Attorney General Kathleen Kane. VOTER ID

Group: ID Confusion Lowered Turnout Pa. voters weren’t required to show photo ID at the polls in November, but the AFL-CIO says confusion over the law discouraged thousands of people from coming to the polls. The Pennsylvania labor union conducted an analysis of voters, comparing pre-election turnout predictions with actual voter turnout. The union concluded that between 35,239 and 36,613 voters who normally would have voted, opted to stay home.

Pew Study: Pennsylvania Fails To Help Weakest Cities

Johnstown, Pa., is one of the Act 47 cities in Pennsylvania, making it financially distressed officially. The city has submitted five recovery plans since joining the Act 47 program in 1992. FLICKR.COM/ALEXVALENTINE

A recent Pew Charitable Trusts study is not pulling any punches when it comes to Pennsylvnia’s approach to assisting cities that are struggling economically. The report suggests suggests the state’s Act 47 program is too reactive to successfully guide cash-strapped municipalities back to financial recovery. Of the 27 municipalities that have entered the program, only six have exited. Act 47, or the Financially Distressed Municipalities Act, empowers the Pennsylvania Department of Community and Economic Development to declare certain municipalities as financially distressed. When this occurs, it begins the process of restructuring of debt, adjusting debt, limiting ability to obtin government funding and merging continguous municipalities to relieve debt. One factor that works against helping the struggling municipalities that are financially distressed is that there are an unusual number of local governments, complete with an unusual level of deference — the likes of which wouldn’t typically be seen in other states like Maryland and Virginia. Neworks reports that many local governments have laypeople reporting

municipal finances to the state — and they don’t have to use a standardized method, according to Fred Reddig of the commonwealth’s Department of Community and Economic Development and a special assistant for Act 47. “One of the issues that our office struggles with is the quality of the information,” he said to Newsworks. “Now, when we have the CPA report, we have greater confidence in the data that is in that report than we do necessarily in some of the reports that come in from elected auditors.” To get a sense of how ineffective Act 47 may be, the Pew report points to a dozen of the remaining Act 47 cities that have been distressed for more than 10 years. Johnstown has submitted five recovery plans since joining in 1992. Aliquippa and Farrell, the first to be designated as Act 47 cities, are still in the program 25 years later. “The problems that Pennsylvania municipalities face run far deeper than Act 47 can or was intended to resolve,” Brian Jensen, executive director of the nonprofit Pennsylvania Economy League of Southwestern Pennsylvania, told Pew’s Stateline. Mismanagement, political infight-

ing and poor financial judgment are a few ways that the cities themselves hurt its chances of getting back on track. The study points to examples like Reading’s history of sloppy recordkeeping, borrowing from its sewer fund for other operations without paying the money back and failing to make annual public pension payments. Scranton and Harrisburg also are prime examples: Officials are contentiously split between mayor and council over how to manage fiscal crises. Scranton mayor cut city workers’ pay without the council’s consent. Harrisburg’s collapse is due to bad decisions by elected officials about a failed trash incinerator. The report suggests incentives for healthy governments to merge with weaker ones as one possible way to strengthen the effectiveness of Act 47. In that way, governments would share the tax base. “We’re going to have to come to a point,” Mr. Jensen said, “where labor and taxpayers grapple with what it will take to operate a municipality and what sacrifices will have to be made. We’re not yet set up to have that conversation.”


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Three Ways Philadelphia Isn’t Detroit 1

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STEVE MINICOLA/UNIVERSITY COMMUNICATIONS

BY SANDY SMITH

W

hy has Philadelphia avoided Detroit’s fate? There are many reasons, but according to at least one observer, three loom large. In rough order of importance, they are: Penn, Temple and Drexel. Though one of these three is now quasi-public, all three began as private universities, with Penn focused — not always successfully, according to the late Penn sociologist Digby Baltzell — on educating the region’s elite and Temple on its working folk. They are the 800-pound gorillas in a fertile educational environment that supports some 90-odd institutions of higher education, more than in almost any other U.S. metropolitan area. And like their counterparts in Pittsburgh, Cleveland and St. Louis, they have played a key role in staving off and reversing urban decline. Detroit, by contrast, has only one

institution in this class: Wayne State University, a relative newcomer. The closest parallel to Penn, Drexel and Temple in the Detroit area lies about 40 miles outside it, in Ann Arbor: the University of Michigan. According to Justin Pope, writing in The Atlantic Cities, the lack of an elite private university — or even a “public Ivy” like Michigan — within the city may have made the difference between resurgence and collapse for the Motor City. Mr. Pope — who found the neighborhood around Penn scary when he was considering colleges in the 1990s — notes that top-tier universities, especially private ones, in a number of cities have not only delivered significant economic benefits for their hometowns but also served as change agents, in many cases stepping in to actively promote neighborhood redevelopment. Your blogger worked in Penn’s media relations office when the school

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BECAUSE A NUMBER OF PROMINENT PHILADELPHIANS DID CHOOSE TO FOUND UNIVERSITIES, WE ARE NOT WRITING ABOUT A BANKRUPT PHILADELPHIA.’ embarked on just such a project in University City; while the effort generated some controversy and brought back memories of the wholesale destruction of neighborhoods that accompanied earlier redevelopment efforts, it nonetheless succeeded at achieving its goals: University City today is a stable, safer and more attractive community, with a school families kill to get their kids into and rising home values. The effort touched off a virtuous cycle of renewal

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that has spread to adjacent neighborhoods in West Philadelphia. Penn’s local peers took notice, and all of them — plus others in their neighborhood, like La Salle — have embarked on community-renewal efforts of their own. Together, they have made a major contribution to the reversal of the city’s slow decline from its 1950s peak. As Mr. Pope noted, there are a number of reasons Detroit lacks such institutions, including a business elite that was hostile to academia. Had Henry Ford, say, chosen to endow a university the way Leland Stanford did, we might not be writing about a bankrupt Detroit today. Because a number of prominent Philadelphians did choose to found universities, we are not writing about a bankrupt Philadelphia. This article was originally published on the Philadelphia Real Estate Blog at PhiladelphiaRealEstate.com.


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1 AUGUST 2013

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

Re-Examination Needed After Detroit

Charlie Gerow is CEO of Quantum Communications, a Harrisburg-based public relations and issue advocacy firm.

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

The mighty have fallen. Detroit, once the richest city in America, has filed for bankruptcy — the largest municipal bankruptcy in history. The shock waves from the filing, which came as no surprise itself, have been far reaching. Pundits immediately speculated that Chicago might be next. Every city with financial woes became a focus of such conjecture. The Philadelphia Inquirer ran a front-page story detailing the factors that distinguish the Quaker City from Motown. The once-prosperous symbol of America’s industrial might didn’t get to bankruptcy court overnight. From its zenith in the years following World War II, the city spun downward through a pattern of ridiculous overspending and taxation, public corruption and fiscal mismanagement. The once-proud citadel of manufacturing now has tens of thousands of abandoned houses, factories and buildings that resemble a war zone. A once-thriving workforce saw jobs go away. At the same time the city maintained the fourth-highest corporate tax rate in the country, meaning that businesses would not expand in or come to Detroit. As the jobs dried up, people left. In the early 1950’s Detroit had an affluent population of nearly two million. Now they have about 700,000 people, nearly half of whom live below the poverty level. A once-thriving economy watched as city

government spent all its money and then some. They dug themselves an $18 billion hole. Despite its staggering debt, the city caved in to the demands of its powerful public-sector unions, keeping more than 10,000 people on the taxpayers’ payroll. Detroit’s major newspaper found that they had a city worker for every 55 residents, a staggering burden on taxpayers. Even with a bloated payroll, the city can’t efficiently deliver services, including emergency services like police, fire and ambulance. In the rest of the country, it takes about 10 minutes for police to respond to a 911 call. In Detroit you’ll wait nearly an hour. With the violent crime rate in the city the highest in the nation, that’s an especially troubling fact. The failure to effectively negotiate with the unions and downsize the taxpayer-financed workforce has saddled the city with unfunded pension debt of between $3.5 billion and $9.5 billion. Detroit is spending nearly 45 percent of every dollar servicing so-called “legacy costs.” Other major cities spend less than 20 percent. The debacle of Detroit has left its children in the lurch. Over half of them live in poverty. The government-run schools have been a failure so massive that less than 10 percent of junior high students are proficient in reading. As the city filed for bankruptcy, some were calling for yet another bailout. Not surprising given the history of two of the city’s most prominent corporate citizens —GM and

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Chrysler — who escaped bankruptcy with a massive $80 billion taxpayer-financed bailout. It would be neither good economics nor good policy for the taxpayers to bail out Detroit. Thankfully, it’s not likely to happen. The better thing is for other cities to look closely at themselves to see what things they are doing or not doing that got Detroit into such a mess. Bankruptcy allows cities to get rid of unsustainable contracts, get better management and control spending. Chicago, the most often-mentioned candidate for the next major municipal bankruptcy, will see its pension costs triple over the next two years. If they reject the Detroit model of raising taxes, overspending, padding the public payroll and mismanaging services, they can avoid the flight to the suburbs and elsewhere that killed Detroit. Chicago and other cities can craft a different kind of blueprint and require compromises with current and former city workers, many of whom realize that a modest cut in generous benefits beats losing them altogether. Detroit, itself, is empowered to demand that its unions act reasonably and in the best interest of the future of the city and its children. The largest municipal bankruptcy should cause leaders of every city to re-examine bad decisions and make course corrections before they, too, are forced to head to bankruptcy court.


1 AUGUST 2013

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

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City Sues Big Banks Over LIBOR Scandal

Timothy Holwick is a freelance writer covering Philadelphia government. Find more coverage at citycouncilmatters.com.

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

On Friday, July 26, 2013 Philadelphia became the latest major U.S. city to file suit against large banks for rigging an important interest rate. The lawsuit targets Bank of America Corp, Barclays Bank Plc, Citigroup Inc, Credit Suisse Group AG, Deutsche Bank AG, J.P. Morgan Chase & Co, Royal Bank of Canada, Royal Bank of Scotland, and UBS AG. The lawsuit concerns the listed banks’ alleged manipulation of the London InterBank Offered Rate interest rate, also known as LIBOR. LIBOR is often used worldwide in the setting of interest payments or rates on investments, leases, mortgages and countless other financial arrangements. LIBOR is calculated when major banks, such as those named in Philadelphia’s lawsuit, report the interest rate they would pay for money from another bank to Thompson Reuters. Thompson Reuters averages those rates and produces LIBOR, which is then used as a guide for the going rate of money, so to speak. The scandal, which allegedly occurred chiefly between 2007 and 2009, was exposed

BY CONSPIRING TO LOWER THE REPORTED LIBOR RATE, THE BANKS ARTIFICALLY REDUCED THE AMOUNTS THEY WOULD HAVE TO PAY TO THE CITY OF PHILADELPHIA AND INCREASED HOW MUCH THE CITY OF PHILADELPHIA HAD TO PAY.’ when banks were accused of purposefully reporting lower interest rates in an effort to artificially lower the LIBOR rate. In a press release, the City of Philadelphia stated: “By conspiring to lower the reported LIBOR rate, the banks artificially reduced the amounts they would have to pay to the City of Philadelphia and increased how much the City of Philadelphia had to pay, causing the City to lose the promised financial benefits of the instruments.” The release went on to quote a statement

from the City’s Director of Finance, Rob Dudow that explained harm was done to the City of Philadelphia because the City had purchased benefits in reliance on an objectively determined and trustworthy LIBOR rate. With the filing of the lawsuit, Philadelphia joins Baltimore, San Diego, San Francisco, Sacramento, Los Angeles and Houston in a group of U.S. cities seeking justice for the alleged scandal. At the heart of the damages sought are fees incurred when Philadelphia terminated some of the investments due to low rates of return. Essentially, the artificially-reduced LIBOR rate caused the City of Philadelphia to quit on the assets. The value of those fees are somewhere in the area of $100 million to $200 million, with the largest being a $48.8 million fee to Citigroup. Some Philadelphia City Council members had been following the scandal at the national level and encouraged the City to seek damages. With its filing in U.S. District Court on Friday, Philadelphia continues its efforts to rebound from the Great Recession.


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1 AUGUST 2013

POLITICAL COMMENTARY

REGIONSBUSINESS.COM

Scranton Close As PA Has Come To White House

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

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

Former Pennsylvania Gov. Bill Scranton passed away earlier this week, following Gov. George Leader as the second former Pennsylvania head of state to pass on into the great beyond during 2013. But Gov. Scranton will be remembered not so much for his term in office, but rather for his so-close-but-not-quite bid for the presidency in 1964. In the 49 years since Gov. Scranton finished second in the Republican primary to eventual runner-up Barry Goldwater, no Pennsylvanian has come as close to the White House. That seems like something of an historical oddity. While fellow “big states” like New York and Virginia and Ohio have enough former presidents to fill volumes of American history, Pennsylvania has only one: the one-term James Buchanan, elected in 1856 and mostly remembered as “the guy who was president before Abraham Lincoln.” The only Pennsylvanian to even come close to Gov. Scranton’s high-water mark was former U.S. Sen. Rick Santorum, who dogged Mitt Romney’s heels for much of the 2012 Republican primary but never really seemed a likely winner. And Sen. Santorum is not even all that

connected to Pennsylvania politics anymore. Remember, he spent most of his second Senate term living in Virginia. There are two possibilities here: Either the Keystone State has turned out 50 years of unambitious politicians, or there is something so appealing about Pennsylvania that highranking elected officials never want to leave to seek national office. Before you scuff at the second possibility, consider the following: Three years after Gov. Scranton’s failed presidential bid in 1964, the state constitution was amended to make the Legislature a full-time gig, complete with a salary — now the second highest legislative salary in the nation — and plenty of perks and benefits. There are endless ranks of commissions, boards and agencies for former lawmakers to run, and most of those come with healthy salaries as well. Recently, it was reported that Pa. governors make the highest salary of any top executive in any state. In short, it pays to be a high-ranking elected official in Pennsylvania. It’s just a theory.

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But in his excellent book on the history of Pennsylvania politics for the past 40 years, long-time Philadelphia Daily News columnist John Baer comes to a similar conclusion. He writes that greed, corruption, apathy and the state’s geographic-political divisions have prevented any politician from rising to the national stage. Bad luck also has played a role. The late U.S. Sen. John Heinz was rich, popular and good-looking, the very makings of a presidential candidate, but he was killed in a tragic helicopter accident in 1991. Former Gov. Bob Casey was beset by a rare disease that ended any future political aspirations, if he had them. So, for nearly a half-century, Pennsylvania has been out of the presidential game. Though Santorum probably will make another bid for the White House in 2016, there are really no obvious future presidential contenders among Pennsylvania’s top state and federal officeholders. It may be a while before anyone knocks the late Bill Scranton from his post as the last Pennsylvanian to almost be president.


1 AUGUST 2013

REGIONSBUSINESS.COM

2013: YEAR OF THE INNOVATOR

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Startup Helps Cancer Survivors Attack Side Effects With Fitness Business: Strength ABCs Founders: Jodi Cook, Kathryn Schmitz Contact: jcook@strengthabcs.com

BY BRANDON BAKER After selling her most recent startup in California, Jodi Cook made a trip to the University of Pennsylvania earlier this year in search of ideas for her next entrepreneurial endeavor. There, she encountered who would become both her business partner and her product: Dr. Kathryn Schmitz. Dr. Schmitz, a professor at UPenn, spent more than 10 years studying exercise routines with cancer patients, the ultimate goal being to understand how to eliminate side effects in cancer survivors post-treatment. Having eventually found a Jodi Cook, fitness instructor and CEO of Strength ABCs. SUBMITTED viable solution, she published her results in the New England Jour- lar exercise routine, you will be 75 nal of Medicine and coupled with percent less likely to develop that Ms. Cook to develop a business condition.” Their plan is to train and cermodel based off of the exercise routine she’d so meticulously tify cancer centers through an crafted through her clinical in-house program, and monetize research. their exercise routine ness instructor and has previToday, the team through an off-site ously worked with MayoClinic, is seeks $350,000 in and online training targeting 500 subscribers in the additional funding course — not entirely next two years, imagining about — it’s already scored unlike a subscription 10 employees to assist with the $2.3 million from Weight Watchers pro- certification process for cancer friends and famgram, Ms. Cook said. centers, as well as sales and man“With this, you agement of the online version of ily and a Susan G. don’t have to live their program. Komen grant — to near your cancer cenlaunch its post-can“Until someone tries to promote cer exercise program, ter; you can live any- this, survivors don’t even know it Strength ABCs. where in the country exists,” Ms. Cook said. “People at cancer centers are “It’s really not just and watch the vidthat you feel stron- Dr. Kathryn Schmitz SUBMITTED eos that say, ‘This busy treating the cancer and makis how you do the ing sure people survive – it’s not ger or better about exercises,’” she said. that anyone’s ignoring them, it’s yourself [through “Who wants to drive four hours that once you survive the cancer, this program], it’s that you reduce other medical side effects,” Ms. to their cancer center to do a you want to go home and return 30-minute exercise when they’re to normal life, but that’s when you Cook said. “So, for example, with the swell- cancer-free? My guess is you won’t need to be doing the exercises. And that’s the need we’re going ing of limbs, [Dr. Schmitz] has want to do it.” Ms. Cook, who works as a fit- to fill.” proven that if you do a very regu-

Steadily, but almost quietly, Philadelphia has become a hotspot for entrepreneurs. The combination of great ideas, available capital and a welcoming environment have set the stage to make 2013 a breakout year for innovation and new businesses. To Learn More ... For more information on sponsorship opportunities or to suggest story ideas, call our main office at 610-940-1656. The web: RegionsBusiness.com Facebook: Facebook.com/regionsbusiness Twitter: @RegionsBusiness Sponsored by


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Seeking Investors? Find Someone With Staying Power

DIARY OF A STARTUP

TECH

Connecting Startups With Major Companies Opens Opportunities

Pilot Programs Highlighted At DreamIt! Demo Ten healthcare-focused startups pitched last Thursday, July 25, at DreamIt Health‘s demo day, the traditional capstone to the four-month business “boot camp” offered by DreamIt Ventures. There was one main difference between this graduating class of startups and that of other accelerators: Virtually all of them had launched pilot programs.

BY JULIANA REYES There used to be a cookie cutter route to success for local entrepreneurs raising funding, said PACT managing director Dean Miller. Head to Benjamin Franklin Technology Partners for seed funding, move on to Safeguard Scientifics for a Series A and finally, go public. Today, that’s no longer the “right” route to take, Mr. Miller said. It’s just one possibility. Mr. Miller moderated a panel on how the face of startup fundraising is changing during this year’s Regional Affinity Incubation Network (RAIN) conference held at the University City Science Center‘s Quorum space. With so many options, what’s an entrepreneur to do? Here are three tips from Mr. Miller and panelist and angel investor Ellen Weber on how to find the right investor. “Find someone that has staying power.” In this current market, it’s difficult to find new investors every time you want to raise funding, Mr. Miller said. Get a boost from your network. For people running incubators who want to help their tenant companies, Ms. Weber offered this tip: Get to know investors in the area — figure out what kinds of companies they invest in. Then, drop those investors a line if one of your tenant companies is raising funding and fits that bill. That’ll make the investor pay more attention. It’s not just about the money. The entrepreneurs on the panel agreed that when looking for an investor, the investor’s network, experience and expertise are equally as important as her money. But plain old chemistry is important, too, Ms. Weber said. Think of it this way: When you start an investor relationship, it’s going to be a five to seven year journey, so make sure you get along with your investors. TECHNICALLY PHILLY

Joanne Lang, founder of AboutOne, gave a presentation to Campbell’s Soup at a Lunch and Learn event. SUBMITTED

Region’s Business embarks on an all-new journey with four up-and-coming businesses as part of its second round of “Diary” entrants. Kicking off the new group is Joanne Lang, founder of AboutOne — a business previously highlighted through our weekly “Capital Seekers” series. Read AboutOne’s origin story at philadelphia. regionsbusiness.com/innovators. This week, Ms. Lang recalls an unlikely meeting of minds with a megaton Philadelphia company In her words: Earlier this year I met Michael Paul, vice president of innovation at Campbell’s Soup, at a Microsoft-sponsored ‘speed dating’ event for startups. I was really impressed with Mike’s concepts and goals around innovation in a large company and thrilled when he invited me to speak at his team’s first Entrepreneur Lunch and Learn event. I’d read that Campbell’s CEO Denise Morrison’s goal at the company is to double the rate of innovation while halving the cost and time spent developing new product ideas. Since I’d also read that Morrison advocates the same ‘fail fast, fail often, fail cheap’ philosophy that I follow at AboutOne, I was eager to share my thoughts and experiences around innovation from the perspective of an entrepreneur and get feedback from the Campbell’s Innovation team. Around 40 people from various Campbell’s teams across the company attended the event. We had a lovely lunch (always nice for an entrepreneur!), and then it was my job to pro-

vide an overview of my company, how I got started and my lessons learned as a startup founder and entrepreneur. Mike had given me a series of specific questions he wanted me to address, so it was an easy presentation. When it was time for me to present my AboutOne challenge to the lunch attendees so they could brainstorm and provide feedback, I asked the Campbell’s team to share ways they could see AboutOne providing value as an employee benefit at Campbell’s. Because AboutOne enables employees to proactively manage their health, financial wellness, and other life aspects, corporations are choosing AboutOne to complement their existing benefits programs as a differentiator and a way to retain talent. Campbell’s focus on emerging trends and interest in working with outside sources to generate innovation is a great concept. I’m looking forward to incorporating their team’s feedback and advice in an action plan that I’ll present as part of a status update next month.

These companies had doctors, medical students and other healthcare professionals using their product. The value of the partnership showed during demo day. One angel investor, Katherine O’Neill of Jumpstart NJ Angel Network, noted that the startups were further along than she had expected. Like all DreamIt Ventures’ classes, the startups came from Philadelphia and elsewhere. While it’s too soon to tell, another benefit of the pilot programs and investments from DreamIt Health’s partner organizations could be that it keeps these startups in the region. Four of the ten companies came from Philadelphia, while others came from New York City, Baltimore, Durham, N.C. and Santa Fe, N.M. Many of the founders were doctors or medical school dropouts. TECHNICALLY PHILLY


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15

Face-To-Face Contact Vital For Business

Miti Ampoma is a communication specialist and author of The Innovative Communicator. More information can be found at http://www.miticom.co.uk.

FLICKR.COM/VICTOR1558

I

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

n a fast paced, time poor, modern business climate, it’s too easy as business executives and leaders to rely on the most convenient mode of communication. Often this route is electronic communication (emails, voice messages, texts) and more than ever, the smartphone, which can do all these things and more, is becoming a dominant method of communicating with colleagues, clients, employees and customers. But to what cost? Is it healthy? And why does it matter how we communicate? The more people you’ve got in a business, the higher the likelihood you’ll have communication problems that impact your financial bottom line. Employees are often dealing with lots of change, pressure to perform, business goals and targets they need to understand and meet. And since they generate the value, if you’re not talking to them in a language they understand, you are literally throwing away your company’s value. To prevent misunderstanding, rumour mills and corridor conversations, highly expensive recurring mistakes, unhappy customers and disgruntled employees, you need a peoplecentred strategy that delivers clear bold effective communication with face-to-face communication at its centre. A face-to-face, people-centered communication strategy with integrity, respect and heart will drive performance. The smartphone will not do this for you, however convenient. Smartphones along with other electronic

devices, need to support and enable human relationships — not disrupt, interfere or hinder them. An over-reliance on devices like the smartphone to communicate, means we are more connected than ever, but not to each other. We constantly interact on multiple devices yet when it comes to interacting with people, our most valuable asset at the heart of everything we do, it can be more difficult. It’s important to spend more time building deep relationships and this is done primarily through face to face communication. We are made for human relationships. It is a fundamental human need to communicate via language, speech and face to face contact, an experience many people crave in a business world of increasingly soulless voice-activated speech, pin numbers and passwords. It is our interdependency and a true connection with others that makes us feel valued, helps us flourish and makes us commercially successful. Employers need to protect this. Face to face communication liberates the human spirit, spurs people on and motivates. It is the emotional benefit it provides that drives performance and creates successful businesses. No smartphone communication can replace this. Top tips for focusing on and benefiting from face to face communication: ;nbe]]^^ik^eZmbhglabilZmZeee^o^elh_rhnk business. This enables people to feel, valued, trusted and supported. Strong relationships create high morals where people buy into your

organizational vision and goals voluntarily. :eehpmbf^_hkZk^eZmbhglabimh]^o^ehi with depth. AZo^_Z\^mh_Z\^\hgo^klZmbhglpa^g^o^k possible. Make time for this and make it a priority. This moves your communication abilities from impersonal to a personal meaningful conversation. It connects your people, motivates and inspires. They will thrive. @hh]k^eZmbhglabilf^Zgrhn\ZgZg] should have honest conversations in the right place at the right time. It’s also important to have difficult or courageous conversations. Do these face to face. MZedmhi^hie^:ohb]Zgho^k]hl^h_ convenient email and electronic communication. It may be the fast way, but it’s not always the best way. =^o^ehirhnkeblm^gbg`ldbeelZg]k^Zeer listen. ;^\hf^Z\hgÕ]Zgmi^hie^\Zgmknlm' Operate with diplomacy, discretion, trust and integrity. So if you do one thing today, give your smartphone a rest and lead the way forward. Identify someone or a group of people in your business that you need to build a relationship with and start the process by using whichever of the suggestions in this article you feel appropriate. There’ll be three key benefits: Fhk^_Z\^mh_Z\^\hffngb\Zmbhg[^mp^^g people will drive performance. IkhÕmlpbeebg\k^Zl^Zg][^lnlmZbgZ[e^' Rhnk[nlbg^llpbee\k^Zm^Zfhk^ihlbmbo^ impact in the world.


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Pet Insurance Company Experiences Dramatic Growth BY BRANDON BAKER It was the night before an accounting midterm in 2001 when then-Wharton students Chris and Natasha Ashton barreled through the doors of a veterinary clinic, their sickly cat Bodey in-hand. It wasn’t more than an instant before the couple was asked to provide a credit card and $1,500 just for someone to examine their cat. Scratching their heads, they knew they didn’t have the money — student loans were burden enough — but, realizing their cat was akin to their child, they forked over the money anyway … and an additional $3,500 in the months ahead. Twelve years later, though their cat has since passed, they look at that night as the defining moment for what would become a multi-million-dollar business platform for pet insurance. “When we graduated, we realized that [pet insurance] was what we wanted to do — this was it,” Ms. Ashton said. “We

and 2009, the ended up fundcompany — which ing the business is about to move on credit cards, from its airportand after a couple area office to a of years of Mas16,000-squaretercard and Visa foot facility in being our best University City friends, we raised — grew more than a round of funding 2,500 percent. from friends and In the past year family.” alone, it surpassed Shortly after $50 million in acquiring fundre venues and ing, the team made two crème approached Britde la crème busiish company Petness lists: the Inc. plan — the largest Chris and Natasha Ashton founded a pet 500 and Forbes pet insurance pro- insurance company that acquired the U.S. magazine’s Top 50 vider in the world rights to British company Petplan. SUBMITTED most promising — about using their businesses in the data. Instead, they were not only granted country. Petplan, Ms. Ashton said, is the first access to their desired data, but given exclusive rights to the Petplan brand pet insurance company in the country to in the U.S. and Canada. Between 2006 cover all hereditary conditions, as well

as a full life coverage policy that includes any conditions that develop while on the plan. “The one thing that keeps us ahead of the pack, though, is our commitment to animal health — that’s much harder to emulate,” Ms. Ashton said. “We’re the only company that really invests in pet health.” Part of that investment is the pethealth magazine, Fetch!, which boasts a readership of 250,000. Future endeavors of the 100-employees-strong company, Ms. Ashton said, involve providing more digital pet-health content and launching a pet philanthropy project currently set to be introduced later this year. Beyond that, of course, they hope to further penetrate a U.S. market that still has 160 million dogs and cats uninsured. A meager one percent of pet owners have purchased insurance in the U.S., as compared to 28 percent in the duo’s native UK. “We’ve got a ways to go.”

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Inaugural

MARCUM I N N O VATO R of the Year

AWA R DS

November 14, 2013 Is your company a catalyst for change? Have you pushed the boundaries in your industry? Is your innovation helping to boost Philadelphia’s growing economy? Marcum LLP and Region’s Business are in search of Greater Philadelphia’s top innovators, and we want to hear from you. The Inaugural Marcum Innovator of the Year Awards will honor businesses of all sizes that are pioneering new advancements in the fields of Health/Biotech, Technology, Business Management, and Energy. Three winners will be named in each category, based on company size. Tell us about your break-through innovation and what makes your company a leader in our region by emailing a 500-word summary to innovation@regionsbusiness.com. Submissions must be received by September 1, 2013. Winners will be announced at a Gala Awards Ceremony at the Franklin Institute on November 14, 2013. Don’t miss out on this spectacular opportunity to join our region’s business leaders in recognizing and celebrating the spirit of innovation in and around Philadelphia. For complete details including nomination criteria, please call Jacki Hallinan at 484.270.2715. Ben Franklin may have been Philadelphia’s first and most celebrated innovator, but he did not have a corner on the market. Who knows? You could be Philadelphia’s next Innovator of the Year! For tickets to the event, please call 610-572-7112 ext 102. If you are interested in sponsoring this event, please call Deirdre Affel at 610-572-7136. Marcum LLP is a top national accounting and advisory services firm.

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30TH STREET STATION’S NEW LOOK Construction will wrap up this fall at the railway entrance to Philadelphia, turning a transportation center into a city attraction.

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BY THE NUMBERS

4M

2012 Ridership through 30th Street Station

$265M

2012 Ticket Revenue at 30th Street Station

1925

The year a city improvement plan including 30th Street Station was first enacted

1978

30th Street Station was placed on the national Register of Historic Places The new west entrance into Amtrak’s 30th Street Station should open around Thanksgiving.

BY CHRISTINE FISHER

I

f you’ve passed through the 30th Street Station area lately, you have likely seen construction fences around the station’s west entrance. While this Amtrak project is buzzing along, PennDOT is completing adjacent work underground. Between the construction fences, subsurface work and an extended timeline, it can be hard to keep track of what is going on. PlanPhilly caught up with PennDOT and Amtrak to find out what work is left and what to expect when both of those projects wrap up this fall.

AMTRAK’S WEST PLAZA MAKEOVER Amtrak is responsible for the construction that is visible immediately outside of 30th Street Station’s west entrance. That project has been diverting pedestrian and vehicle traffic since fall 2012. Still on track, Amtrak plans to finish the $30 million project this November. When complete, the new west entrance will provide improved vehicle traffic and pedestrian flow around the station, enhanced

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AMTRAK

lighting for better security and visibility, and expanded public parking. This past spring, University City District (UCD) installed modular green plant walls in front of the construction fences to replace the standard construction site view with a lively distraction. According to Prema Gupta, director of planning and economic development at UCD, the plant wall was a project UCD had wanted to do for a long time. This project provided the right opportunity. “Amtrak was a really fantastic partner with the green wall that we did,” Ms. Gupta said. “That was really driven by the construction project.” Amtrak will continue with some construction through the fall 2014 to fortify the infrastructure and improve parking conditions underground. Amtrak’s construction outside 30th Street Station’s west entrance will finish around Thanksgiving

PENNDOT’S UNSEEN, CRITICAL CONSTRUCTION Next to Amtrak’s construction is a separate PennDOT project that has been rehabilitating six bridges over Amtrak’s Northeast Corridor rail lines. The bridges

IT’S DEFINITELY MORE COMPLICATED AND UNUSUAL BECAUSE THESE ARE SIX BRIDGES THAT THE MOTORIST DOESN’T EVEN KNOW THEY’RE GOING OVER.’ — PENNDOT SPOKESMAN GENE BLAUM

carry portions of Arch, 30th, Market, Little Market and Chestnut streets, but to most users, the bridges look like a typical roadway. “It’s definitely more complicated and unusual because these are six bridges that the motorist doesn’t even know they’re going over,” said PennDOT spokesperson Gene Blaum. The bridges were built in the 1930s and were in critical need of structural steel repair. In March 2011, PennDOT launched the then $50.8 million rehabilitation project. Since that time crews have been replacing deteriorated structural steel, repairing deteriorated concrete and support piers, painting structural steel and replacing expansion joints. This work will conclude in September. Most of the work took place below

Height, in feet, of the Corinthian columns at the station entrance

95

Height, in feet, of the 30th Street Station ceiling

5

Height, in stories, of the station’s windows

$75M

Cost of a 1988-91 renovation at 30th Street Station

420

Cars that could be parked in the garage that was originally a mail handling facility


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Modular Plant Wall Livens Up 30th Street Construction Site

BY CHRISTINE FISHER The estimated 1,000 people per hour who walk through The Porch at 30th Street Station will now pass a wall of greenery, a noticeable change from the drab construction site-view these same pedestrians have had for the past few months. When construction on 30th Street Station’s street-level, west plaza — part of a $25 million Amtrak project to revitalize the station — began this past fall, chain-link construction fences went up around the site. Though the work is phased to minimize pedestrian impact, thousands

of pedestrians have been walking along the grey construction fences since the work began. Now, in an effort to lessen the visual impact on passersby, University City District (UCD) has installed a custom-designed modular plant wall that stands on The Porch, in front of the construction fences. “This has been a fun project to work on, and we think it is a refreshing approach to the age-old urban quality of life issues relating to construction fences,” said Nate Hommel, UCD’s Capital Projects Manager in an email. UCD worked with Mario Gentile

of Shift_Design to custom design and build the wall, which is made of laser cut, galvanized steel sheets. Gentile built the wall in a modular fashion so that it can be moved and reused in other locations. Freestanding, the wall is weighted down with rubble from the construction site but is still less than the maximum weight limit of The Porch, 300 lbs per square foot. “After all, the entire Porch is essentially a bridge,” Mr. Hommel said. The green walls’ plants were installed small, but as the warmer weather approaches, Hommel said the wall will be “bursting with life.”

“We wanted something that was modular so that it would be reused in the future, and we wanted to add colorful plants in unexpected places,” he said. The west-plaza construction is scheduled to wrap up by the end of November 2013. At that time UCD plans to reuse the green wall at another site. UCD has not decided exactly where that will be, but the organization is open to suggestions. This article was originally published by Plan Philly at PlanPhilly. com.


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ground, which meant the project required minimal traffic rerouting but came with its own unique challenges. The work was above Amtrak’s 12 Northeast Corridor rail lines. During construction Amtrak gave PennDOT clearance on two rail lines at a time. At the same time, some of the structural support columns sit on the ceiling of SEPTA’s Market Frankford Line. Harold Windisch, PennDOT’s senior assistant construction engineer, said just about every column needed base repair in addition to other work. Base repair meant digging into the three feet of filling around each column and above the subway, exposing the steel, reinforcing it if necessary and then encasing the column base in concrete. Much of the construction project, including the concrete casings added to the columns, was done to waterproof the bridge structures. “What really causes deterioration is water penetration,” Mr. Blaum said. Another challenge that came with the underground work was visibility. “You can only see what you can with flashlights, and it’s hard to determine the extent of deterioration because of corrosion and everything,” Mr. Windisch said.

For that reason, PennDOT ran into more corrosion than expected. When crews blasted the structural steel and primed it for painting, they discovered additional deterioration. A photo shown at last month’s Delaware Valley Regional Planning Commission’s board meeting showed a fistsized hole corroded through one of the steel beams. Mr. Windisch said there were lots of holes in the steel. To repair the originally unseen corrosion, PennDOT added $10.2 million to this project, bringing the total project cost to just more than $60 million. PennDOT was also forced to extend the deadline from December 2012 to September 2013. “You want to proceed ahead but you have to fall back with the steel repairs,” Mr. Windisch said. When construction wraps up in September, motorists and pedestrians won’t notice much difference, but for PennDOT, the project’s completion is significant. “This was a hugely important project,” Mr. Blaum said. “...We’re happy to be nearing completion”

ADDITIONAL IMPROVEMENTS

Not all of PennDOT’s work was below ground. In addition to some roadway improvements, PennDOT installed automated voice pedestrian crossing signals at the intersections of 30th and Market and 30th and Chestnut streets, at the request of the Philadelphia Streets Department. The PennDOT project also made “The Porch” possible. Way back in 2008, the Philadelphia City Planning Commission had the firm of Bohlin Cywinski Jackson design “Station Square.” The concept was supposed to improve the 2900 block of West Market Street between 30th Street Station and the IRS building by reducing the vehicle travel lanes and adding pedestrian landscape improvements. The goal was to create a gateway between University City and Center City. The project was shelved because of financial limitations, but in 2010 University City District took over. Piggybacking off of the PennDOT project, UCD had PennDOT convert the asphalt roadway along 30th Street’s south side into a 50-foot-wide concrete pad. UCD added planters, umbrellas and bright furniture, and The Porch, a cost effective take on Sta-

tion Square, was born. “Without that PennDOT project there would be no porch,” Ms. Gupta said. Ms. Gupta said she has long been captivated by the way the impact of a construction project can benefit pedestrians. This PennDOT project is one example. Though the Amtrak and PennDOT projects are independent, the Amtrak project will have a positive impact on PennDOT’s work. As part of the project, the whole west plaza is being graded to drain better. In addition, planters that used to drain onto the PennDOT bridges below ground will be replaced with enclosed planters. This will help reduce the water that leaks onto PennDOT’s structures. With the waterproofing and steel repairs, the newly rehabbed bridges should last 70 to 100 years before major repairs are necessary, Mr. Windisch said. “I’m confident this will have a long service life.” This article was originally published by Plan Philly at PlanPhilly. com.


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Q&A

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REGIONSBUSINESS.COM

MANAGING WEALTH WITH

BRYN MAWR TRUST The Wealth Management group at Bryn Mawr Trust has experienced tremendous growth over the past several years. The Wealth Management division has gone on an acquiring spree — Lau Associates in Delaware in 2008, Hershey Trust in 2011 and Davidson Trust in 2012. Frank Leto, executive vice president and head of Wealth Management Services, talked with us about the group’s continued success.

What’s the elevator pitch for Bryn Mawr Trust’s Wealth Management division? We try to keep it pretty simple. I think our name says a lot — it has the word “trust” in it. For 125 years that the bank has been in continuous existence, families, individuals and institutions have placed their trust in us to manage their wealth. Our business is focused on wealth preservation and client solutions. We don’t sell products, we sell you solutions to your issues or wealth management needs. We pride ourselves on a high level of individualized, customized, personal service for each client. We’re not model driven, so we don’t follow the concept of one size fits everybody. That’s really what we do here at our wealth management group. Across the board there was an increase in revenue at Bryn Mawr Trust, including the Wealth Management division. What would you say is the biggest factor in that growth? Well, it’s hard to pin it to one single factor. If we only did one thing it’d be a lot easier. A portion of the revenue is what we’d call cyclical or seasonal. We just finished tax season, so a portion of that revenue comes every second quarter every year. So that’s part of it. But the vast majority of it is due to the success of our strategic initiatives and organic growth. Our strategic initiatives are designed to drive organic growth. And that’s what we saw. If you looked at our first quarter numbers, we had a very large jump in our assets, but we didn’t have a jump in revenue. So when I spoke to the stock analysts at the end of the first quarter, I said, “Just wait and see. Revenue trails the assets.” And that’s exactly what happened. What would you say is the most common issue you help clients with when it comes to wealth management? Very rarely do we have a common issue in this business. That’s one of the things that sets us apart, is that you do get to know the client and you find out there isn’t one thing that everybody is looking for. But I think a lot of clients are concerned about wealth preservation and wealth transfer, and that’s what we really focus in on.

/BrynMawrTrust

BMTC.com


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FINE ESTATES PREVIEW

1 AUGUST 2013

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$1.15M Executive Home In Bucks County This five-bed, six-bath 6,023-square-foot home is set on a premium corner lot in Upper Mountain Estates in New Hope. A paver-enhanced driveway leads to a grand two-story foyer. Gleaming hardwood can be found throughout. The expanded and upgraded gourmet kitchen offers granite countertops, a breakfast buffet, high-end GE monogram stainless appliances. A spacious office with a full-wall cherry bookcase, butler pantry, walk-in pantry and back staircase add much convenience while the large, two-story family room boasts spectacular views of the woods. The spacious master bedroom offers four walk-in closets, a sitting area, a dressing area, a luxury jacuzzi bath and a double shower. Two suites contain a bath, study, walk-in closet and second closet. The roomy dining and living rooms, twotiered patio and spacious parking options will take entertaining to another level. For more information, please contact Susan Hepburn of R.A. Weidel Realtors at (267) 713-2135


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REAL ESTATE

Mount Airy Real Estate: Chestnut Hill’s Outlook

T

oday, most of Philly’s top selling areas have been within Center City’s city limits. The western and northwestern areas of Center City have taken off rapidly in real estate, while the other parts of Philadelphia have worked on attracting buyers to the area. As Philly continues to expand, so will the opportunities for an array of houses to compete for a place on the market. On Germantown Avenue, down the cobblestoned sidewalks leading to a variety of shopping areas, antique and dining food options, lays Mount Airy Real Estate. With a goal to expand The City of Brotherly Love, Mount Airy Real Estate has a singular goal of sharing its knowledge of real estate investment opportunities and tax benefit education with the public. The real estate agency especially specializes with first-time homebuyers and first time investment buyers.

820 Brushtown Rd, Gwynedd Valley, PA

84 Norristown Rd, Blue Bell, PA 19422

$3.65 M (6005156)

$965,000 (5962964)

$1 Million Homes: Peeking Inside These Chestnut Hill Mansions Philly is reaping the real estate benefits of revitalization throughout the city, and Chestnut Hill is no exception. Mount Airy Real Estate has seen tremendous growth in this area, as the style of the area is highly sought after. The architecture in Chestnut Hill varies with its blended architecture, fluctuating from older Tudor styles, elegant Victorians to center-hall colonies sitting alongside newer contemporaries. The diverse housing expenditures rests between understated row houses to encompassing mansions, making Chestnut Hill a beautiful place to call home for many individuals. The neighborhood is normally typified as an affluent neighborhood. Its market value for some of its houses numbers within the millions, which is a testament to the prominent neighborhood and

5 beds | 6 full, 3 partial baths Timeless & Elegant describe this true estate in prestigious Gwynedd Valley. Built by the builder, for the builder, the residence is sited on over 1.5 acres and offers over 11,000 sf of living space. This home was designed for those with the most discriminating taste and an appreciation for fine living.

5 beds | 5 full, 1 partial baths Meticulously maintained, solid built, Philomeno & Salamone estate home offers nearly 6,000 sq.ft. of living space on 3/4 acres w/3 bay garage. Conveniently located on a private cul de sac in desirable Blue Bell,this home was designed to entertain with its’ custom finishes t/o including newly renovated gourmet kitchen.

Something For Everyone in Chestnut Hill

PHILLY IS REAPING THE REAL ESTATE BENEFITS OF REVITALIZATION THROUGHOUT THE CITY, AND CHESTNUT HILL IS NO EXCEPTION.’

Idyllically located within the northwestern corner of Philadelphia, Chestnut Hill is renowned for its rustic appeal and unspoiled historic preservation. The neighborhood is home to some of Philly’s local neighborhood charms. Fairmont Park wraps around Chestnut Hill, and adjacent to the neighborhood lays Mount Airy, Wyndmoor, Lafayette Hill, and the Montgomery County suburbs of growing economic worth of the area. A home with a one million dollar price Oreland. Even with the hometown feel and the tag in Chestnut Hill contains as many as five bedrooms and two or more bath- cultural activities Chestnut Hill offers, it boasts only a 35-minute ride away from rooms. Future homeowners can expect a Center City. One thing is for sure; Chesthomey feel with beautiful and luxury nut Hill’s growing neighborhood will features, including numerous fireplaces, continue to attract new buyers and will libraries, an array of family rooms and continue to stand as a grand illustration multiple floors. of one of the nation’s urban enclaves. The amount of square foot afforded This article was originally pubwill be generous, typically in the few lished on the Philadelphia Real Estate thousand square feet range. Blog at PhillyLiving.com.

1204 Hunt Seat Dr, Lower Gwynedd, PA

936 N Penn Oak Rd, Lower Gwynedd, PA

Nicole Miller-Desantis



   

    (215) 641-2727 (office) (267) 419-1454 (direct)

(215) 850-1305 (cell) (215) 999-5817 (fax)

$1.125 M (6196317)

$948,500 (6196308)

5 beds | 3 full, 1 partial baths Tastefully decorated colonial in desirable Polo Club Estates in the heart of Gwynedd Valley. Sited on over an acre, this well positioned, brightly lit home has improvements throughout. Hardwood flooring, custom paint, newly renovated powder & mud rooms along with numerous other finishes that highlight this beautifully maintained home. 4 beds | 3 full, 2 partial baths Sited on a nearly 1 acre wooded lot in popular Penn Oak, this pretty stone colonial boasts nearly 7,000 sq. ft. of living space w/ its full, finished, walk-out basement. This home offers a bright, open floor plan with access to the outdoors from nearly every room. Kitchen w/ Breakfast Room is welcoming and provides access to large, rear deck for easy entertaining.

Blue Bell Office 686 Dekalb Pike Blue Bell, PA 19422


1 AUGUST 2013

REGIONSBUSINESS.COM

REAL ESTATE

27

Designed To ‘Recede In The Background’ BY MATT STRINGER

A

t the third and final community meeting for the planned development at 4224 Baltimore Avenue recently, developer U3 Ventures and Cecil Baker of Cecil Baker + Partners presented preliminary plans and renderings to the project’s University City neighbors and collected feedback from them. Most of it was positive, but some neighbors raised concerns about how well the building’s modern design would fit in with the late-19th-century architecture of the neighborhood. The building will consist of two L-shaped wings that both front on Baltimore Avenue and join in the middle. The eastern wing will be a 10-storyhigh glass-and-metal tower with brick accents on the bottom three floors. The top five stories of this wing will be set back from its base in a terraced fashion. This wing will connect with a lowerslung, five-story glass-and-metal wing extending to the 43rd Street corner. The developers explained that their goal is to build a residential structure that appeals to young professionals, grad students and empty nesters, yet doesn’t make a statement. It will rely heavily on glass and be sleek and modern. ”We don’t want to compete with Clark Park or be a statement,” Omar Blaik, CEO of U3 Ventures, said. “Clark Park is a statement. I believe if this building is done right it will fade into the background. The idea of using glass is to recede in the background.” The building will feature 144,553 square feet of residential units divided into apartments and condominiums. Renters will inhabit the first five floors, with the top five floors of the terraced section being sold as condominiums. The sixth-floor roof of the rental building will be a green roof featuring a community space or deck that overlooks Clark Park. The highest part of the building will reach 92 feet. The 65 parking spaces will be underground in the back of the building, buried under the slope of the site. There will be 108 rental units and 55 condo units. The 1,600-square-foot condos will feature three bedrooms and one bath. A typical rental floor will

IF THIS BUILDING IS DONE RIGHT, IT WILL FADE INTO THE BACKGROUND.’ — OMAR BLAIK, CEO OF U3 VENTURES

have a mix of studios, one- and twobedroom apartments. The smallest unit has just 400 square feet of space. The first-floor retail section of the structure will wrap around the 43rd and Baltimore corner and feature 8,000 square feet of commercial space in the form of six spaces. The developers intend to lease the spaces to more community-based businesses and mom-and-pop shops instead of chains like Starbucks. The main retail space will be on the corner of 43rd Street and Baltimore Avenue. The developers don’t have a signed lease yet but have started a conversation with famed Philadelphia chef Michael Solomonov of Zahav, Federal Donuts and Percy Street Barbecue fame. Nothing is set in stone, but the developers believe the fact that Solomonov is interested

shows how good of a location the spot is. In the end, the preliminary plans received support from most in attendance, with a few community members not happy with the designs. Some expressed concern that it didn’t pay tribute to the historic character of the neighborhood and was too modern. One nearby member referred to it as “violent” in jest. Of the 40 or so attendees, about 30 voted in favor of the plan, with five or so neighbors being opposed to it. The members who opposed it said they would take it up with the Spruce Hill Community Association and The University City Historical Society. Another concern was what will happen to some of the older American sycamore trees on the site. The developers said they were doing everything in their power to save the tress and it was in their business interest to stay green. The next step for the project is for the developers to sign off on the plans that were presented Wednesday and

move forward now that they know they will have at least some community support and be able to secure zoning variances needed for the plans. As of now, they only have a conditional permit for a four-story structure with 92 units and six commercial spaces. At the meeting, U3 Ventures, which is teamed up with the Clarkmore Group LLC to act as a community liaison, said that the owners had not yet seen the plans and have yet to sign off on them. But it appeared that with the community support this plan would be the plan they will construct. The developers could, by right, erect a building not that different from this one, most likely a rental building they could fill with students. But that is exactly what the community doesn’t want — more undergrads. We’ll keep you updated as soon as we learn of any and all developments. Cecil Baker + Partners is the architect for the project. This article originally appeared on the Philadelphia Real Estate Blog on PhiladelphiaRealEstate.com.


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1 AUGUST 2013

REGIONSBUSINESS.COM

OPINION

Too Legit To Quit? Why Corbett Won’t Stop

A

G. Terry Madonna is director of the Center for Politics and Public Affairs at Franklin and Marshall College

Michael Young is managing partner of Michael Young Strategic Research

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

failed attempt at Gov. Tom Corbett’s legislative agenda, a long and likely hot summer underway, a single question now dominates many Harrisburg political conversations: when will Gov. Corbett quit? When will he announce he is not running for a second term, setting the stage for a GOP gubernatorial primary next May to select his successor? Why Gov. Corbett should quit looms painfully obvious, even to many who support him. Only about one-third of Pennsylvania voters give him a positive job performance — abysmal for an incumbent less than 15 months from Election Day. Roughly one in four voters thinks he deserves another term. Worse perhaps is that his much-vaunted legislative “agenda,” including liquor privatization and pension reform, has gone nowhere, badly damaging his image for effectiveness. To many, Gov. Corbett looks like a one-term governor — so politically damaged that he probably can’t be saved. This ominous sentiment isn’t limited to Pennsylvania. A horde of respected, independent national pundits and publications has already weighed in, concluding he is so unpopular he can’t be re-elected. One has named Pennsylvania as the most likely state in the nation to change parties in 2014. Another, the prestigious National Journal, is already speculating in print about his possible Republican successors. Gov. Corbett could find numerous and compelling reasons to quit. Yet, it’s not going to happen. Gov. Corbett is not going to quit, not going to withdraw as a candidate for re-election and, in fact, not even face a major opponent for renomination by the Republican Party. Despite all the arguments to the contrary he will run for re-election in 2014, and will be the nominee of his party. Why he won’t quit boils down to a halfdozen hard realities about state politics, the Republican Party and Tom Corbett himself. Together, they reveal much about state

FLICKR.COM/WEAVERPHOTO

politics and perhaps more about the current state of GOP politics. Hope Springs Eternal — It’s not clear who the Democratic nominee will be or what strengths and weakness the person will bring to the ticket. In past non-open seat elections both parties have fielded exceptionally weak candidates. The 2014 Democratic field looks strong at this point, but it is too early to tell. Undoubtedly, the tone of the Democratic primary as well as the eventual nominee could provide Gov. Corbett with an opening he badly needs. The Skunk Factor — Certainly, there might be Republicans who would run against Gov. Corbett in a party primary. But few want to be the skunk at the picnic. Though weak, Gov. Corbett would probably defeat all comers, but he would emerge from a primary even weaker than now — almost surely losing the fall contest. So the payoff is likely defeat in the primary and

ultimate blame for the loss in November. A winning strategy this is not. No Viable Replacement — Gov. Corbett may be weak but he is still an incumbent with all the advantages incumbents have running for re-election. Some national publications have reported internal maneuvering among Republicans to replace Gov. Corbett. That’s not going to happen. The most obvious replacements, Congressman Jim Gerlach, Pat Meehan and Charles Dent would have to give up supersafe seats to run. Moreover, the large structural debt facing the next governor intensified by the fractious Harrisburg infighting among Republicans makes doubtful any of them would take on the challenge. Show of Weakness — A Gov. Corbett withdraw would be a tacit admission that the last four years of a Republican administration had been an abysmal failure. Inevitably, Gov. Corbett’s GOP successor as gubernatorial candidate would be saddled with defending Gov. Corbett’s legacy in November without any of the advantages of incumbency. It would be a field day for the Democratic nominee. Not the Real Problem — The Corbett administration has failed to secure its major policies, but the lion’s share of the blame falls to Republicans in the legislature. There, personal and policy differences have eviscerated Gov. Corbett’s agenda. It’s hard to imagine any Republican gubernatorial replacement that can bridge the big ideological differences that exist, nor mend the personal differences. It’s Always about the Money — All statewide campaigns run on big money. Republicans usually have it; Democrats usually need it. In 2014, Gov. Corbett still retains the support of deep-pocketed conservatives as well as the business community. He will be reasonably well financed with more than sufficient resources to wage an energetic campaign. Money alone won’t win this one for Corbett. But a lack of money won’t lose it for him either.


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1 AUGUST 2013

REGIONSBUSINESS.COM

OPINION COMMENTARY FROM ACROSS THE WEB

New Jersey Shore Could Use Some Help

Pa. Lottery’s Booming, So Why Change Course?

Hurricane Sandy caused $38 billion in damage in New Jersey, dozens were killed, and 350,000 homes were destroyed. Recovery efforts have come a long way since the superstorm pounded the shore in late October, but residents and businesses still need your support. If you’ve somehow managed to tune out the state’s $25 million “Stronger Than the Storm” radio and television ads, we, too, want to remind you: There’s only one Jersey shore, and it is open for business. We urge residents who have skipped their favorite spot on the Garden State’s 130-mile coastline this season to reconsider.

If you ask supporters of the idea why they want to mess with a wildly successful state program, they will tell you that the steadily mounting needs of Pennsylvania’s elders cannot be met by the Pennsylvania Lottery as it exists now. No matter how well it’s administered. No matter how many revenue records it continues to shatter. The math behind the soon-to-explode number of Pennsylvania seniors makes it untenable, they say, as the primary source of human services support for our elders. Is it really so hard to believe that our state’s best and brightest — stop your snickering — cannot find a new way to supplement the lottery’s purpose? Why do we have to immediately heave hosannas at essentially the first group to come along with a set of majestic revenue projections? Why the rush? Why now?

GRETCHEN BARRET, BUCKS COUNTY COURIER TIMES, 30 JULY 2013

William Scranton: OldSchool Republican Former Gov. William W. Scranton, who died Sunday at age 96, had a long and distinguished record of service to Pennsylvanians and the nation. Though he spent but six years in elected office – one term in Congress, one term as governor – he was a central figure in state and national politics for the better part of two decades. Scranton was an old-school Pennsylvania Republican: careful with taxpayer money, attentive to business needs, and open to the good that government can do. His balanced, pragmatic approach won him a seat in Congress in 1960, in a heavily Democratic district around his hometown of Scranton, even as Democratic presidential candidate John F. Kennedy carried Pennsylvania. The new congressman was open to working across the aisle – he supported President Kennedy in 54 percent of votes in Congress. According the Pennsylvania Historical and Museum Commission, Scranton “was liberal on civil rights, social security benefits, supported aid to dependent children, and voted for an increase in the minimum wage.”

DELAWARE COUNTY TIMES, 30 JULY 2013

Pension Crisis Worsens In Pennsylvania In recent days, Pennsylvania’s debt was downgraded by Fitch Ratings, Chicago’s debt was downgraded three notches by Moody’s Investors Service, and Detroit sought protection through the ultimate downgrade by declaring bankruptcy. Like most states, Pennsylvania has its share of public pension challenges; a combined unfunded liability of $47 billion equates to more than $3,600 per resident. The recent failure to pass any meaningful pension reform legislation resulted in the state’s downgrade. It is likely other rating agencies will follow suit. Inaction on the part of legislators has, in effect, endangered the fiscal health of the Keystone State. This is a crisis that will only get worse under any scenario. THE PHILADELPHIA INQUIRER,

29 JULY 2013

30 JULY 2013

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@PHILADELPHIAGOV

@donovanjmcnabb

Officially retiring as a Philadelphia Eagle today. Unbelieveable feeling. Dreams do come true

@ucdphl

Just a reminder that the trolley tunnel will be closed for over one week beginning this Friday, August 2 at 10 a.m.

29 JULY 2013

30 JULY 2013

@WhartonEntrep

@Penn

Good luck to @CoEdSupply, pitching at @ RockThePost1’s Digital Demo Day today. #whartonstartups

I got my strange career by being very strange. @feliciaday #wwc2013 @wharton #Penn

30 JULY 2013

23 JULY 2013

@donnaserdula

@KPMG_US

“We live in a world that demands perfections and craves authenticity.” It’s not possible to have both.

@KPMG_US to sponsor @IMPACTvcConf 2013 Oct 22-23 Reg NOW at disc $200 rate first 200 #entrepreneurs

30 JULY 2013

30 JULY 2013

@IMPACTvcConf

@InkyBiz

Don’t miss one of our keynote speakers, CBS Commentator Gary McCord. #IMPACTvc

Flipping homes is fashionable once again in up-and-coming Philly neighborhoods. By @AlHeavens

30 JULY 2013

@jmac_18 Once again I appreciate all the love and support! It means a lot! Ill be back tho better than before! Much love! #birdgang

RICK DREYFUSS,

THE PATRIOT-NEWS

REGION’S BUSINESS

Michael Nutter tours the East Passyunk Avenue business corridor to promote Greater Philadelphia.

EDITORIAL BOARD CEO and President James D. McDonald Managing Editor Terrence J. Casey Associate Editor Rich Coleman

30 JULY 2013

@PHLVisitorCntr Before you say goodbye to July, take advantage of free mini golf at 30th St Station courtesy of @UCDphl. Ends tom! 30 JULY 2013

30 JULY 2013

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


30

1 AUGUST 2013

REGIONSBUSINESS.COM

BY THE NUMBERS

$992,000,000

$781,000,000

The amount raised in 2012 from tolls on the New Jersey Turnpike

53%

The amount raised in 2012 from tolls on the Pennsylvania Turnpike

70%

Residents for every one city worker in Detroit

Increase in tolls for the New Jersey Turnpike at the beginning of the year

Increase in Pennsylvania Turnpike tolls for cash payers since 2009

$614,000,000

$387,000,000

$402,000,000

$248,000,000

$378,000,000

$387,000,000

Revenue from the New Jersey Turnpike in 2012

61

94

Residents for every one city worker in Pittsburgh

32

Residents for every one city worker in New York City

2012 revenue from the Pennsylvania Turnpike

2012 toll collections for the New Jersey State Parkway

New Jersey Turnpike 2012 operating expenses

51

Residents for every one city worker in Philadelphia

2012 revenue from the New Jersey State Parkway

Pennsylvania Turnpike 2012 operating expenses

FLICKR.COM/WALLYG

0.93%

Philadelphia population

-0.11%

Average job growth under Tom Corbett from January 2011 to June 2013

Average job growth under Gov. Ed Rendell from January 2003 to January 2011

1.24%

Best job growth numbers for Gov. Corbett (July and September 2011)

1.526M

1.07%

Best job growth numbers for Gov. Rendell (September 2005)

29,607 City of Philadelphia employees

$1.7B

Annual payroll for City of Philadelphia

$58,551

Average salary for City of Philadelphia employee


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