region's business 17 january 2013

MONTCO’S SHAPIRO BUILDS CONSENSUSLOTTERY PRIVATIZATION MOVES AHEAD

YEAR OF THE INNOVATOR: ADVICE, SUCCESS STORIES, RESOURCES

A JOURNAL OF BUSINESS AND POLITICSPHILADELPHIA EDITION JANUARY 17, 2013

PUBLIC BANKING A SOLUTION FOR FOULED SYSTEM

It’s been six decades since Philadelphia had a Republican mayor. While that’s not likely to change, there are signs it’s not out of the question.

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Year of the innovator is underway! After last week’s cover story anointing 2013 the Year of the Innovator in Philadelphia, we roll out the first of our regular installment of success stories, advice, resources, information and news about, by and for our region’s innovators.

THIS WHITE HOUSE DISCREDITS THE POTENTIAL POWER OF THE PRIVATE SECTOR UNLEASHED; THAT HAS BEEN, AND WILL CONTINUE TO BE, PRESIDENT OBAMA’S GREATEST HANDICAP.’ LIZ PEEK ON FOXNEWS.COM

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Connecting University City ! Drexel looks torail yards to connectto Center City.

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17 JANUARY 2013

Pennsylvania must avoid ‘lottery cliff’ ! Why are critics, in particular a certain union, putting up such a fight against privatizing the state’s lottery system?

32Josh Shapiro’s pragmatic politics! The Montgomery County commissioner continues to push an agenda that doesn’t include higher taxes and focuses on less government spending. Did we mention that he’s a Democrat?

16

CONTENTS

21

Five who could bePhilly'snext mayor! Look for familiar faces to lead the field.

Can a Republican win City Hall?! It’s been six decades since Republicans held the mayor’s office. While that doesn’t seem likely to change, some are saying it’s not impossible.

Will Nutterfinish hisfinal term?! He’s been adamant thathe’ll finish out his term asmayor, but some say thatisn’t likely.

SPECIAL REPORT

4 REGIONSBUSINESS.COM17 JANUARY 2013

Karl Smith is the Editorial Director for Region’s Business. You can contact him [email protected].

It might be a bit premature to cue the death knell, but it cer-tainly seems like a good time to prepare for the eventual passing of a political system dominated by two parties.

So writes Ron Fournier, a writer at the National Journal. Fournier has his detractors, but he’s a veteran journalist who understands national politics better than most, so it’s not wise to dismiss his analysis.

On this topic, he latches on to the “No Lablels” movement, a group once dismissed as naive. Now, according to Fournier, they have clear mission: “Drop the centrist label, work with frustrated voters of all political stripes, and pressure politicians in Washington to work better together while fi xing the nation’s

problems.”Fournier points out that the

No Labels group is by no means a sure thing in regard to mak-ing change happen. Instead, he rightly points out that it’s a warn-ing shot across the bow of politics as usual.

In short, America is fed up and not going to take it much longer.

He quotes Mickey Edwards, a former GOP congressman from Oklahoma: “There’s a revolution brewing. People are getting tired of a party system that turn Con-gress into the NFL -- one team against another. They’re going to do something about it.”

Well, it’s about time.The country is mired in quag-

mire of slow job growth, political gridlock and malaise not because of the Democrats, not because of

the Republicans, but because the two parties have lost the plot.

The should exist to promote a simple agenda, one that promotes the well-being of America and protects its interests. Instead, both parties exist for one reason and one reason only: To keep the other guys from winning.

The national political scene has devolved into a elementary school playground scene that is tough to watch. Instead of earnest discusi-son and debate aimed at crafting policies that work, we are inun-dated with fi nger-pointing and name-calling.

It has gotten so bad that when a member of one party even gives an inkling that they maybe should kinf of sort of think about maybe consider hearing what the other side has to say, they are

immediately subdued by their own side with shrieks of partisan rhethoric.

The two major parties have done a masterful job of protect-ing the status quo, however, insulating their combined grip on national politics by making the cost to play politics prohibi-tive. That has proven a tough nut to crack, but that sort of thing won’t likely last forever, either, especially as the average Ameri-can continues to watch the two sides shoot spitwads and make raspberries at each other.

Fouriner said he’s working on a magazine piece about this con-cept and will make it a focus of his reporting moving forward. Let’s hope he does. It will make the National Journal a must-read.

Cue Death Knell for Our Two-Party System

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LOTTO RESPONSES

Pennsylvania lawmakers had plenty to say in response to Camelot Global Service’s privatization plan. Here are some highlights:

Rep. Paul Clymer“There are enough dysfunctional families struggling in the commonwealth. This proposal to extend gambling will only worsen this situation. Accelerating the privatization process will create more questions than answers.” THE ASSOCIATED PRESS

Elizabeth Brassell, Dept. of Revenue“We plan to do exactly as Rep. Clymer suggests and as we have done for the last eight months: carefully, deliberatively consider what is in the best interest of older Pennsylvanians.” THE ASSOCIATED PRESS

Sen. Rob Teplitz“I was happy to start getting answers, but I’m still skeptical.” PAINDEPENDENT.COM

Sen. John Blake“Perhaps we should say, ‘Congratulations, you’ve won the lottery.’” POST-GAZETTE.COM

Sen. Pat Vance“Some of these questions have come about because of the lack of transparency.” POST-GAZETTE.COM

Sen. Jay Costa“We think it is a slap in the face to the Legislature.” TRIBLIVE.COM

Slot Machine Funding for Racing, BreedingDips at Historic Level

Funding from slot machine gaming for the Race Horse Development Fund decreased by 4.6 percent or $6.36 mil-lion over the last six months, according to the Pennsylvania Equine Coalition.

The decline marks the most signifi cant since the fund was created in 2004.

Governor Tom Corbett’s o! ce project-ed the fund would collect $287.8 million in the 2012/2013 fi scal year. In the fi rst half of the fi scal year, just $131.4 million was collected.

Funds will continue to decline with the opening of a second Philadelphia casino that does not host equine racing, the Coalition predicted.

Atlantic City Revenue Continues Freefall

Atlantic City casinos showed a decline in gambling revenue for the 50th time in the last 52 months, according to data from the New Jersey Casino Control Commission.

Recent months’ declines have been attributed to the destruction caused by Superstorm Sandy, but the long-term hit on the shore town has been caused by a growing gambling presence in Pennsyl-vania, where slot machine revenue has been on the rise for six consecutive years.

SugarHouse, LevelUp Announce Partnership

Philadelphia’s SugarHouse Casino has installed payment program LevelUp at The Refi nery, it announced recently.

This is the fi rst casino partnership for LevelUp, which allows consumers to pay for products or services using their smartphone.

Parx Becomes Soul Sponsor Parx Casino has agreed to become the present-

ing sponsor of the Philadelphia Soul for the arena football team’s 2013 and 2014 seasons.

A new logo will incorporate Parx Casino.Financial terms were not released.

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Camelot Global Services Makes Case to Lawmakers

BY MELISSA DANIELS

HARRISBURG — A British company poised to manage the Pennsylva-nia Lottery plans to boost the bottom line by getting more people to play lottery games. But some lawmak-ers are skeptical.

Senate Finance Com-mittee Minority Chairman Sen. John Blake, D-Lack-awanna, said he still has reservations about the Corbett administration’s pursuit of a private man-agement agreement with Camelot Global Services, even after a four-hour hearing Monday.

The process was done without legislative over-sight, and that worries him.

Yet the deal is going ahead under the umbrella of the administration. The contract with Camelot hasn’t been signed and fi nalized, but that’s expect-ed within the week. Friday, the administration sub-mitted a “notice of award,” publicizing the intent to fi nalize the deal.

Senate Finance Com-mittee Chair Sen. Mike Brubaker, R-Lancaster, was impressed with

Camelot’s testimony. The hearing, he said, achieved its mission of getting on-the-record statements and giving the procurement process “the light of day.”

Camelot sent two of its top officials to the Har-risburg hearing. They gave a brief history of the com-pany, touting its worldwide status as an industry leader. Camelot does not operate any lotteries in the U.S., but it has served as a con-sultant in California and Massachusetts.

Alex Kovach, managing director at Camelot who is handling the Pennsylvania operation, said about 30 percent of Pennsylvanians play the lottery weekly, according to Camelot’s research. In the United

Kingdom, where Camelot runs the National Lottery, that fi gure is about 50 per-cent.

Secretary of Revenue Dan Meuser said commit-ments from Camelot are guaranteed and exceed any profit estimations made by the state. In the next fi ve years, the state-run lottery would generate $30 million, Meuser said. Under Camelot, the com-monwealth could see $1.2 billion.

Camelot will put up $200 million in collateral in case it doesn’t meet it its estimates.

Total profits of about $34 billion are guaranteed over the life of the 20-year contract.

— PaIndependent.com

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STATE BUSINESS

PLCB Expanding PA Wine SalesThe Pennsylvania Liquor Control Board and the Pennsylvania Winery Association have come to an agreement that will allow PA Preferred (the brand of agricultural products grown or made in Pennsylvania) wineries to sell varietals in select PA Wine & Spirits Stores.“We are happy to work with the Pennsylvania Winery Association to expand the selection of Pennsylvania wines offered in our PA Wine & Spirits Stores and in the process, support local businesses,” said Robert S. Marcus, PLCB board member. “Greater selection will give consumers more opportunity to buy local.”The program is set to launch this summer, allowing PA Preferred wineries to sell up to 10 varietals at Wine & Spirits stores.

75Existing PA Preferred

wineries

150Wineries in the

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Firm Establishes Partnership With County DA Office

Montgomery County District Attorney Risa Vetri Ferman recently announced a pro-bono partnership between her o!ce and the international law firm of Mor-gan, Lewis & Bockius.

Twenty Morgan Lewis litigation asso-ciates will be designated as Special Assis-tant District Attorneys in Montgomery County to provide pro bono legal support to the DA’s O!ce.

US Airways Adding Salt Lake City Route

Philadelphia’s most dominant airline is adding nonstop, daily year-round ser-vice to Salt Lake City, beginning June 8.

Flights will be aboard a dual-class, 150-seat A320 plane.

“We are excited to expand our service for customers traveling to and from our international gateway in Philadelphia with a new daily flight to Salt Lake City,” Andrew Nocella, US Airways senior vice president for marketing and planning, said in a statement.

With this addition, US Airways will have 462 departing weekday flights from PHL to 111 destinations.

Trenton Airport Named Frontier’s Base in East

Trenton-Mercer Airport will become Frontier Airlines’ commercial base on the East Coast, the Philadelphia Inquirer reported.

The most common flights out of Tren-ton will use two aircraft for six flights each week, according to the Inquirer report.

LEGAL

Acme, 877 Stores Sold

Supervalu Inc. sold Acme Markets and four other grocery chains to Cerebus Capi-tal Management for $3.3 billion. The deal is expected to close by the end of March.

The nation’s No. 3 traditional super-market operator is selling a total of 877 stores. Acme, whose headquarters are in East Whiteland Township, Chester County, operates 67 stores.

Supervalu announced in July that it would be exploring “strategic alternatives,” hinting that the struggling Acme brand could be for sale. At the time, the grocer carried about $6.3 billion of debt, accord-

ing to a Philadelphia Inquirer report.Acme Markets was named the seventh-

largest grocer in the Philadelphia region by Food Trade News in the publication’s 2012 survey.

Acme reportedly carried 4.6 percent of the market with $2.2 billion in sales.

Leading Acme in the region were ShopRite, Giant, Walmart, A&P (which operates Superfresh and Pathmark), Wawa and CVS.

The other chains sold in the deal include Albertson’s, Jewel-Osco, Shaw’s and Star Market.

NATHAN REIN

Robot Vending Spreading Through Region

Shop24, a robotic, refridgerated convenience store that carries a maxi-mum of 200 items weighing up to 8 pounds, has opened locations in Hat-field and in South Philadelphia.

The company is targeting apart-ment communities in the region.

The 9-foot-tall machines accept cash and credit cards and can be made to accept campus dining cards or SNAP cards.

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WEEKLYBRIEFING

BY ERIC BOEHM

HARRISBURG — Util-ity companies from across

Pennsylvania said les-sons learned from major storms in 2011 helped them prepare for the record-setting damage and power outages wrought by

“Superstorm Sandy.”The storm left 1.8

million Pennsylvania electric customers

without power when it hit October 29.

Although some of those customers were still

without power a week later, the state Public

Utility Commission gener-ally praised the electric com-panies’ response. Members of the commission said the

utilities communicated well with customers and prepared for the storm by bringing in crews and supplies from out-of-state.

Robert Powelson, chairman of the PUC, said he gave util-ity companies grades ranging from “B-plus” through “D,” but he did not want to point out fl aws.

“A storm of this magnitude requires a well-coordinated response, which is what I feel occurred in Pennsylvania,” he said.

He said lessons learned from the response to Hur-ricanes Irene and Lee in 2011 helped workers prepare for Sandy.

— PaIndependent.com

MEDIA

Inquirer, Daily News Owners Threaten Liquidation

Interstate General Media threatened, owners of The Philadelphia Inquirer and Daily News, threatened to liquidate or sell company assets January 18 “if it does not reach tentative agreements with all of its unions, including the Newspaper Guild,” according to a Guild email sent to all members last week.

Other unions’ contracts expired in October 2012, but the Newspaper Guild’s deal isn’t set to expire until October of this year.

Interstate General Media asked the Guild to voluntarily accept paycuts last year.

Atlantic City’s Press for Sale

The Press of Atlantic City and its a! liated opera-tions are for sale, according to parent company Abarta, of Pitts-burgh.

The third- and fourth-gener-ation family company has owned the Press for 60 years.

Abarta CEO and President John F. Bitzer III said the newspaper’s operations would be better handled by either a local owner or a larger newspa-per group.

Pennsylvania said les-

them prepare for the record-setting damage and power outages wrought by

“Superstorm Sandy.”

million Pennsylvania electric customers

without power when it hit October 29.

Although some of those customers were still

without power a week later, the state Public

The Press of Atlantic City and its a! liated opera-tions are for sale, according to parent company Abarta, of Pitts-

The third- and

ation family

John F. Bitzer III said the

Utility Companies Praised for Response

Baltimore Gas and Electric employees assist PECO with post-Sandy restoration efforts in November. BGE

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@PhilaOEMPhiladelphia Office

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RT @PhilaOEM: Stay Safe from the #Flu. Read our blog for tips from @

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RESTAURANT ROUNDUP

Center City Restaurant Week will be held January 20-25 and January 27-February 1. During these times, a three-course lunch costs $20; a three-course dinner costs $35. Tax, alcohol and gratuity are not included in the price of the meal.

Below are some restaurants participating in the week. For the complete list, visit centercityphila.org.

Amada: 217 Chestnut St.

El Vez: 121 S. 13th St.

Opa: 1311 Sansom St.

Palm: 200 S. Broad St.

R2L: 50 S. 16th St.

Route 6: 600 N. Broad St.

Sampan: 122 S. 13th St.

XIX: 200 S. Broad St.

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DEALBOOK

REAL ESTATE DEALS

Feasterville Shopping Center Sold for $7MThe Shops at Walnut Grove in Feasterville, Pa. was sold for $7 million, or $282 per square foot, the Philadelphia Business Journal reported.

PREIT Sells Mall, Power CenterPhiladelphia-based Pennsylvania Real Estate Investment Trust (PREIT) sold Paxton Town Centre, a power center in Harrisburg, for $76.8 million, in order to create more focus on “our core mall portfolio,” CEO Joseph F. Coradino said. A week earlier, PREIT sold the Phillipsburg Mall in Phillipsburg, NJ, for $11.5 million.

Accounting Firms Announce Merger

Paoli, Pa.-based Preston, Romano and Shea announced it has merged into Fresnak and Associates, which has loca-tions in Blue Bell, Pa., and Allentown.

Founder Gene Preston and recent addition Mike Romano will become partners within the com-bined firm.

“It’s an exciting time for both firms as com-panies look to midsized

firms like Fesnak that have a deep pool of experienced professionals in the life sciences industry,” Mr. Romano said in a statement.

Fesnak has been looking to build the firm up on tax, assurance and accounting, valuation and litigation support, transac-tion advisory, bankruptcy and restructur-ing, and financial management solutions.

ACCOUNTING

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Chester County Hospital Joins UPenn System

The Chester County Hos-pital and Health System

announced it will join the University of Pennsylvania Health System.

The deal is set to be completed in the spring,

according to The Daily Pennsylvanian.

Chester County Hospital operated at a $2 million last year and could not move for-ward with a planned expan-sion that would have added 72 private patient rooms within a “new patient tower,” The Daily Pennsylvanian reported.

HEALTH CARE

Tastykake Owners Eye Hostess’ Wonder Bread

Flower Foods, the owner of Tastykake, has agreed to pay $390 million to Hostess for its Wonder brand and others.

A bid for Wonder, Nature’s Pride, Butternut, Home Pride and Merita, along with 20 bakeries and 38 depots was valued at $360 million, according to the Associated Press. A second bid of $30 million was made for Beefsteak.

Grupo Bimbo SAB, whose brands include Entenmann’s, Sara Lee and Thomas’, had also sought Hostess’ snack food brands. Bimbo’s U.S. headquarters are in Horsham, Pa.

The purchase is subject to a court-supervised auction, which Hostess hopes to have held February 28 in order to close the deal by March 5.

RETAIL


POLITICAL COMMENTARY

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

CONTRIBUTE

Send comments, letters and essays to [email protected]. Opinions expressed by guest writers do not necessarily reflect those of Region’s Business.

Council Considers Extending Job Creation Tax CreditPhiladelphia City Council has

been on recess for the holiday break since the week before Christmas.

While council may not be having its stated meetings, individual council members are still hard at work, as suggested by Councilman Henon’s Manu-facturing Matters Initiative detailed in last week’s issue.

January 24 will mark the return of City Council weekly meetings, but one hour before that, the Commerce and Eco-nomic Development Committee will hold hearings on a bill that would extend a job creation tax credit indefinitely.

The tax credit is found under the Business Income and Receipts Tax section of the Philadelphia Code, which has become a popular target for legislative reformation in recent council sessions.

This particular tax credit is formally known as the Special Tax Credit Opportunity for Job

Creation and o!ers a $5,000 tax credit for each new qualifying job created.

The tax credit was established in 2010 as a way to leverage the burden of a changing Busi-ness Income and Receipts Tax into new, well-paying jobs for Philadelphians.

Businesses must apply for the credit and regulations establish certain guidelines on what types of job would qualify.

Most qualifying jobs are what would be considered middle

class positions that pay a living wage.

The business commits to creating the job, is approved for the program, and then is eligible to invoke their tax credit upon successful delivery on the commitment.

The tax credit was already legislated to carry into 2013 at the amount of $5,000.

The amount has not changed, but now the language providing for the timeline of the tax credit would be changed from specific

years to “each year thereafter.” Essentially, the tax credit will

continue indefinitely until coun-cil enacts legislation to repeal or amend this particular provision of the Philadelphia Code.

It sets a tone that this hearing will occur as one of the first two hearings to kick o! the 2013 City Council session.

This particular group of City Council members has demonstrated a commitment to attracting new jobs and business to Philadelphia through a tax system loaded with incentives and provisions friendly to new businesses.

It is very telling that the bill o!ers a $5,000 tax credit, no small amount of money, at a time when tax revenue is squeezed for every last penny.

The theory is that even one new Philadelphian who becomes gainfully employed is more valuable to the city in the long term, than any single amount of tax revenue.


POLITICAL COMMENTARY

Trillion Dollar Coin Trivializes Debt Debate

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

CONTRIBUTE


If there were an Academy Award for the nuttiest idea of the year, this would be a sure bet: the Trillion Dollar Coin.

That’s right, a Trillion Dollar Coin. The notion is so inher-ently ludicrous that it wouldn’t have passed the Laugh Test if it weren’t for the fact that it was cooked up by “respected academ-ics “ and politicos close to the Obama Administration.

Thankfully, even the admin-istration saw through the transparent folly of the plan, and the Treasury Department quickly announced they wouldn’t proceed with such a scheme.

The idea was floated by Rep. Jerry Nadler (D-NY) and some less well-known academics and economists. On the verge of a serious congressional debate over raising the debt ceiling, this little clique theorized that the process

could be end run or rendered moot by employing little-known provisions of an obscure statute. That 1996 law allows the execu-tive branch to mint commemora-tive coins of any denomination.

Forget that the intent and historic use of this provision was to mint specialty coins designed for collectors at a couple hundred bucks a pop. Why not just strike a coin down at the Philly Mint worth a trillion bucks and stash it away at the Fed? Then we’d have enough to cover our overspend-ing for a while.

In addition to being horrible public policy and crazy econom-ics, this ploy deliberately trivial-izes the dangerous and serious facts of our national debt. The promoters of this nonsense are the same “not to worry” gang who suggest that no amount of federal spending is enough. In their

world view, the stimulus failed only because we didn’t borrow an additional trillion or two from our children and grandchildren.

A trillion-dollar coin causes smirks. It should cause tears. We can’t even imagine a thousand billion dollars. To reduce it to a little platinum disc makes meaningless how much a trillion really is. But if you imagine a stack of $1 bills, $1 trillion would reach 68,000 miles into outer space. Laid end to end, a trillion dollar bills would run from here to the moon and back 200 times. Staggering.

The late Everett McKinley Dirksen famously observed, “A billion here, a billion there and pretty soon you’re talking real money.” Imagine how he’d feel about a trillion or 20.

The national debt stands at a staggering and alarming $16.5

trillion. That’s up roughly 60 percent during the first Obama Administration. Considering that it took more than 200 years for America to accumulate a trillion-dollar debt, racking up six trillion additional in four short years is a pretty remarkable if dubious distinction.

The nation is rapidly spending itself into insolvency. The debt-ceiling debate highlights that fact. It o!ers an opportunity to reverse this dangerous path and keep us from becoming a Western Hemisphere version of Greece.

Gimmickry not only sidesteps the real issues, it trivializes them. Congress must reform automatic spending programs and dramati-cally curtail other spending. They have to face the consequences of their previous actions and get to work on real solutions, not tinker with goofy evasions.


POLITICS

Privatization Could Make For Winning Bet For Pennsylvanians

Melissa Daniels is a reporter for PA Independent, an online statehouse news bureau of the Franklin Center for Government and Public Integrity. She can be reached at [email protected]

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HARRISBURG — Feeling lucky, Pennsylvania? The state is about to make a big gamble on the Pennsylvania Lottery. But given the right odds, social service programs for seniors could win big.

This week, the Corbett administration is finalizing its contract negotiations with Camelot Global Services. The British company specializes in sales and marketing for lotteries, and it operates the National Lottery in the United Kingdom, where an estimated 50 percent of the adult popu-lation plays weekly.

In Pennsylvania, Camelot is pledging $34 billion in profits over the life of a 20-year contract. State o!cials say that’s between $3 billion and $4.5 billion more than what the state would make in that same timeframe, with similar game expansions.

Lottery profits fund programs that help senior citizens, like property tax rebates, free meal services, in-home aides and prescrip-tion drug cost assistance. But since Pennsylvania faces a steep spike in the growth of its senior population, Gov. Tom Corbett wanted to seek a long-term funding solution for these programs.

The key to success comes from getting more Pennsyl-vanians playing the lottery — even if it’s just a few dollars at a time. As managing director Alex Kovach put it, Camelot hopes to see “a lot of people playing a little, rather than a few people playing a lot.”

Camelot’s high hopes to boost profits rest on a brand-new business plan for the Pennsylvania Lottery.

That includes expanding to new gaming – like the video-based, number-guessing

Keno — and bettering sales terminal-based games, like Powerball or the daily lottery drawings. If successful, its plans would generate promis-ing returns: Annual growth would be more than 9 percent in the first five years, and about 5.8 percent in the first 10, according to the state.

Those figures bode well for programs for the elderly. Pennsylvania has the nation’s fourth-largest population over 60, with nearly 2.7 million people above that age. By 2030, that figure will climb to about 3.6 million, according to state estimates.

Department of Aging Secre-tary Brian Duke said the state should consider the private management agreement with Camelot as a way to provide “reliable, predictable” funding.

Though Pennsylvania has one of the top-producing lotteries in the nation and runs on one of the lowest operating costs, profits are apparently not keeping pace with demand for programs. Already the department has a waiting list of about 5,300 Pennsylvanians, according to

Mr. Duke. But Camelot’s plans, and

the administration’s procure-ment process, saw a fair share of criticism from the union representing lottery employ-ees, and lawmakers on both sides of the aisle.

Since two other bidders dropped out of the pro-curement process in 2012, Camelot was left as the sole bidder. And the firm had hired popular state lobbyists like State Street Strategies and Greenhill and Associates, raising concerns about an insular, backdoor deal.

And if Camelot’s rosy profit estimates aren’t met? State o!cials point to a $200 mil-lion collateral guarantee. And if it’s really not working out, the state can terminate the agreement after three years.

But right now, Pennsylvania state o!cials are looking for Camelot to deliver big money in the short and long-term.

If that doesn’t happen, it’ll be a big loss — not only for the o!cials orchestrating the deal, but for the Pennsylvania senior citizens they’re suppos-edly looking out for.

Mayor Creates Manufacturing Task Force

Mayor Michael A. Nutter signed an Executive Order Tuesday establishing the Manufacturing Task Force, which will evaluate the state of manufac-turing in Philadelphia and develop a strategy to promote and grow this important sector of the economy.

The task force will examine the challenges manufacturing companies face and recommend specific mea-sures that will help support growth and increase competitiveness.

“Manufacturing has always been an important part of Philadelphia’s economy. By focusing our atten-tion on manufacturing, our goal is to do everything we can to continue growing this fast-moving sector and ensure that Philadelphia is poised to be the place where innovative prod-ucts are designed and made,” said Mayor Nutter.

PHILADELPHIA

Senator: Abolish Philadelphia Traffic Court

A top lawmaker in the state Senate wants to do away with the corruption-plagued Philadelphia Tra!c Court.

Senate Majority Leader Domi-nic Pileggi, R-Chester, recently announced his intention to introduce legislation that would close the tra!c court and transfer its responsibilities to the Philadelphia Munici-pal Court.

The Philadelphia Tra!c Court was the subject of a stinging review of by the state Supreme Court last year that conclud-ed the court had “two tracks of justice

— one for the connected and another for the unwitting general public.”

“The lack of integrity at Philadel-phia Tra!c court has been demon-strated time after time,” Sen. Pileggi said in a statement. “Experience proves that in order to clean up this court, we must eliminate it.”


Last week, Region’s Business declared 2013 to be the Year of the Innovator — an acknowl-edgement of Philadelphia’s future as a growing hub for entrepreneurs.

Each week the publication will present recurring features, such as Capital Seekers and Diary of a Startup.

In Capital Seekers, readers will be introduced to the brain-children of some of the city’s most innovative minds, whose contact information will be provided for venture capitalists whose interest has been piqued.

In Diary of a Startup, a reporter will routinely check in with various Philadelphia-based

startups as they strive for success.

This week, WHYY’s Radio Times is getting in on the theme as well with a daily, five-

part series titled, “Philadelphia Innovators.”

On Monday, Councilman Bobby Henon joined fi lmmaker Jamie Mo! et and Philadelphia Department of Licenses and Inspections Director Carlton Williams to discuss new ways the city considers planning and zoning.

On Tuesday, WHYY pulled together some of the biggest local names in technology for a conversation about what brought First Round Capital and its leader Josh Kopelman into city limits from the sub-urbs and why more compa-nies will follow suit in the future. Joining Mr. Kopelman were RoseAnn Rosenthal, CEO of Ben Franklin Tech-nology Partners/Southeast-ern Pennsylvania; Chris Wink of Technically Philly; and Artisan Mobile CEO Bob Moul.

As he said in an inter-view published in last week’s Region’s Business, Mr. Kopel-man stressed that Philadelphia should not try to become the next Silicon Valley. Instead, he added, it should follow Silicon Valley’s lead by making a name for itself.

On Wednesday, Radio Times focused on innovation in the city’s arts community and arts education in Philadelphia schools.

The two remaining shows, which will air Thursday and Fri-day at 11 a.m., will cover “Open Data & Bridging the Digital Divide” (Thursday) and “Sus-tainability Innovators” (Friday).

All programs air on WHYY-FM and online at WHYY.org. Archived editions of the shows can also be found online.

2013:YEAR OF THE INNOVATOR

CAPITAL SEEKERS

Stork StackSubscription commerce

for both parents and expectant mothers

BY BRANDON BAKER

Business: Stork StackFounders: Chris Nakutis, Liz Eavey,

Sean RichardsonContact: [email protected]

Stork Stack is a subscription com-merce business developed for expectant mothers in their third trimester, as well as mothers with children up to the age of three.

Its founders, Chris Nakutis, Liz Eavey and Sean Richardson, all Wharton graduates, set out after graduating in 2011 to resolve a very practical problem they were presented with after a trip to Chicago.

Mr. Nakutis and Ms. Eavey encoun-tered a pilates instructor, pre-school teacher and mother — now their “Chief Mommy O" cer,” Mr. Nakutis jokes — who felt clueless about how to fi nd the latest innovative products for mothers.

“What we found [through research] is that not only do moms want the most innovative products, but today we have big-box retailers and Gerber-sized busi-nesses that just don’t have the marketing arm to get products around the country,” Mr. Nakutis said.

Stork Stack launched in May 2012, and by June had already shipped “stacks” of products — books, bottles, DVDs, etc.

— to subscribers in all 50 states. Moving forward, the business hopes to

expand by exploring di! erent age groups to service and by creating an online bou-tique store.

Year of the Innovator: A Theme in Philly Media

Henon

Workshop: Become a Lean Startup-Building Machine

The Lean Startup Machine is a three-day workshop February 8-10 that teaches participants to build their dream company in reality.

During the course of the workshop, teams use a problem-centric approach to business ideation.

Innovators will learn to cre-ate solutions based on true cus-tomer pain rather than creating a solution before having the problem.

Registration, which ends January 31, costs $300. For more information, visit leanstartupmachine.com

INNOVATION

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


TASKSPUTTING YOUR

TASKS IN HER HANDS

Today’s businessman is too busy for the day’s minutiae. That’s where Kellyann Schaefer comes in.

BY BRANDON BAKER

hile grocery shopping in 2006, Kellyann Schaefer broke a sweat as she tugged one shopping cart from behind her and pushed another to her front, doing her best to com-plete her checklist without losing control of

her four children in the process. In this single, stressful moment, Ms. Schaefer experienced

her light-bulb realization: She could monetize her time man-agement skills.

“It’s such a great business model,” Ms. Schaefer said. “Every-one’s trying to cram 36 hours into 24, and with the addition of technology in our lifestyles today, everyone has become accustomed to this sort of fast-paced response in getting things done.”

Ms. Schaefer spent 21 years working as a nurse and 24 as a homemaker before fi nally creating Task Complete in Decem-ber 2010.

Today, Ms. Schaefer and one independent contractor man-age more than 50 clients in Bucks County, completing tasks that include house chores, grocery shopping, paying bills, caring for pets and other miscellaneous tasks requested by clients.

Upon creating Task Complete, the Bucks County-native initially struggled with developing the business side of her service, but quickly adapted by taking on a do-it-yourself attitude, persevering by attending seminars, reading books and scouring the Web for advice.

“I dove head-fi rst into it all — I read everything I could and continued to educate myself on how to start a busi-

ness: marketing plans, a website, blogging, every com-ponent of it was new to me,” Ms. Schaefer said. “I really started [Task Complete] on a wing and a prayer.”

The bulk of Task Com-plete’s clients, Ms. Schaefer said, include executives who are happy to delegate tasks in favor of spending more time

at work. Her business-oriented clientele has helped the service to

grow immensely since its inception, allowing her to push forward with plans to hire another independent contractor in the fi rst quarter of 2013, as well as look into creating future “departments” that specialize in assisting clients with very specifi c needs — concierge services, in-home organization, lifestyle management, etc.

Regardless, Ms. Schaefer couldn’t be happier with how Task Complete has evolved since that anxiety-inducing grocery run in 2006.

“Every day, I manage and take care of people’s emotional problems and stress-related problems, and I try to give them a better quality of life,” Ms. Schaefer said. “I was really born to take care of people.”

WW

I TRY TO GIVE THEM A BETTER QUALITY OF LIFE. I WAS REALLY BORN TO TAKE CARE OF PEOPLE.’—KELLYANN SCHAEFER

@TaskComplet YourTaskComplete [email protected] YourTaskComplete.com

2013:YEAR OF THE INNOVATOR

18 REGIONSBUSINESS.COM17 JANUARY 20132013:

YEAR OF THE INNOVATOR

Peter A. Angelides is Principal of Econsult Solutions, a Philadelphia-based economic consulting firm that specializes in urban issues. Learn more at econsultsolutions.com

Thinking Creatively About InfrastructureInfrastructure is vital to our

well-being, and we need to think carefully and creatively about our public infrastructure systems, such as roads, transit, water, and parks.

Infrastructure investments, while expensive, ensure our future economic prosperity and shape future economic decisions.

Though long-lived, infrastruc-ture does decay, both physically and economically.

Economic decay means that infrastructure designed many years ago might not be appropri-ate for the current world, even if it were in perfect condition.

Because of economic decay, and because what we buy today will be with us for a long time, current investments should reflect what we want the future to be like.

For example, the predominant transportation philosophy 40 years ago was moving cars quickly and e!ciently, which led to underemphasized or non-existent pedestrian, bicycle and transit facilities.

If we want the future to be more pedestrian and bicycle and transit friendly, current infra-structure projects must take

those needs into account.Therefore we need to put on

our creative hats in two main ways — how to pay for what we build, and what we build in the first place.

Recent unwillingness to match revenue with infrastructure costs has resulted in financial constraints at the local, state and federal level, reducing infra-structure investment.

Today, many worthy projects will not be built without increas-ing traditional funding source or alternative funding source. Alternatives include tolling, pub-lic-private partnerships, local infrastructure-specific taxes, and the grab-bag approach.

Dilworth Plaza illustrates the new paradigm perfectly. This public plaza at the heart of the region is being funded by

city, SEPTA, state, federal and private sources, and organized and managed by a public/pri-vate authority — the Center City District.

Even more interesting is thinking about how pricing can substitute for infrastructure or how one type of infrastructure can substitute for another.

For example, peak hour pricing on toll roads or transit systems can reduce congestion by encouraging travelers with discretion about travel times to shift their trips to less crowded times.

This shifting reduces the congestion in the peak hour, making the trip faster for the people who continue to travel during peak hours, and reduc-ing or eliminating the need to build extra capacity. As a bonus,

revenue can be used to reduce other types of taxes.

Charging for infrastructure also makes people consider how much they use. Because trans-portation infrastructure is costly to build and maintain, pricing it as though it is free by not charging for it encourages more use than is economically optimal, and also leads to more energy use than would otherwise occur.

Similarly, one type of infra-structure can substitute for another.

We are currently planning on spending more that $10 billion to reconstruct and expand I-95 in Pennsylvania.

Indeed, just the Girard Ave-nue Interchange Project is set to cost $1.2 billion. Given that enormous cost, it makes sense to think of parallel projects, such as enhanced transit, including a Roosevelt Boulevard rapid tran-sit line, that reduce the capacity needs of I-95, and hence reduce the cost of reconstruction.

Thinking creatively can help us reduce the resources devoted to building and maintaining infrastructure while still receiv-ing the same level of service from what is built.

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REGION’S BUSINESSA JOURNAL OF BUSINESS & POLITICS

Stay ahead of the pack@ RegionsBusiness.com

Business. Politics.Perspective.

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19REGIONSBUSINESS.COM17 JANUARY 2013 2013:


Seeking This Fairy Tale’s Happy EndingBY BRANDON BAKER

Adam Kearney has spent much of the past six months traversing the Philadelphia region’s tech startup events seeking the cream of the crop of tech developers.

Mr. Kearney has his fingers crossed that he’ll soon find a “needle in the haystack” to develop his events web-site for the arts, Saunter.

Described as being “Yelp for the arts,” Saunter aims to take the best attributes of Yelp.com and listings from local news outlets and combine them into one seamless, customizable source for finding events related to the visual arts, music, dance, theatre, film and academics.

“Philadelphia is sort of the Goldi-locks of the art world — it’s not too hot, and it’s not too cold,” Mr. Kearney said. “But we’re only as informed as

our circles are — we’re seeking to expand everyone’s circle in the con-temporary art world.”

Mr. Kearney originally came to Philadelphia to create a pop-up art project called the Sauntering Collec-tive.

In the process of working on the pop-up gallery, however, he realized that there was a logistical problem in getting people both aware of the events and able to find them.

An art and music enthusiast him-self, he empathized with the plight of artists who struggled to find viable advertising alternatives for their events.

“With art, we always look back to other ages to understand their world. For example, we look at Gothic churches to understand how they lived in that age, and for that reason, I find it to be a public matter to connect

individuals with art,” Mr. Kearney said. “But there’s a hole here: How do we connect with artists?”

To demonstrate how the site will work, Mr. Kearney has created a pro-totype of the events database, most recently demonstrating the mock-up site at the January 9 Philly Tech Meetup, hosted at the University of Pennsylvania.

He is currently sorting through a pool of CTO applicants, and will be looking for funding in February.

Mr. Kearney’s three-stage busi-ness model has Saunter launching in Philadelphia, with immediate follow-up launches in Boston and New York, which he hopes will culminate in a string of launches in Minneapolis, Chicago, Los Angeles and more.

“Ultimately, I want to provide regional knowledge on a national scale.”

Philadelphia is the ‘Goldilocks of the art world,’ says one

entrepreneur who wants to show his city how to find events that are just right

DIARY OF A STARTUP

20 REGIONSBUSINESS.COM17 JANUARY 20132013:


DreamIt Health Care Accelerator LaunchedFor the first time, a leading

health insurer and a leading health care provider have collaborated to create what has become DreamIt Health, Philadelphia’s first health care accelerator.

Independence Blue Cross and Penn Medicine — with DreamIt Ventures and Venturef0rth — are jointly offering entrepreneurs the resources they need to o!er solutions to modern health care issues.

The accelerator is a four-month boot camp that o!ers $50,000, office space, in-depth monitoring and coach-ing from industry experts.

Companies will be given the chance to organize, pitch to investors and hear feed-back from potential custom-

ers through the program.As with previous DreamIt

programs, the boot camp will conclude with a Demo Day, giving entrepreneurs the chance to speak about their company before industry leaders.

Philadelphia, a longtime hub for the health care indus-try, has been becoming a cen-ter for innovation as well.

“I think a healthcare acceler-ator in Philly is long overdue,” Elliot Menschik, founder of Venturef0rth, told MedCity News. “We have many of the right parties involved now and others that can add to the

success of the program as it grows.”

DreamIt Health, which will be co-led by Mr. Menschik and Karen Griffith Gryga, managing partner of DreamIt Ventures. Its o"ces will be at Venturef0rth.

DreamIt has launched 80 companies in the last four years who have raised more than $80 million in invest-ment capital.

The deadline for applica-tions is February 8. Email [email protected] or visit dream-itventures.com for more information.DreamIt Ventures Demo Day 2010 TECH COCKTAIL

A HEALTHCARE ACCELERATOR IN PHILLY IS LONG OVERDUE.’—ELLIOT MENSCHIK, FOUNDER OF VENTUREF0RTH

Full Service Advertising Agency StreamCompanies.com

255 Great Valley Parkway, Suite 150Malvern, PA 19355

219 Cuthbert Street, Suite 500Philadelphia, PA 19106


BY ELISSA VALLANO

s Mayor Michael Nutter settles into his second and final term in Phila-delphia, rumblings about the next crop of mayoral prospects have already begun. And while January 2016 can seem like an eternity for many around the region, it’s practically no time at all when it comes to the political world. Unsurprisingly, a potential list of Democrats has already been forming, but where

the Republicans stand in the next election remains uncertain.

The City of Philadelphia hasn’t seen a Republi-can mayor in over 60 years when Bernard “Bar-ney” Samuel served from 1941 to 1952. His may-oral tenure was the longest in the city’s history, and his legacy includes creation of the city sales tax and city wage tax. But since then, no Republican has held the mayoral o!ce in Philadelphia, and the last presidential election didn’t do much to boost their clout amongst voters. The city’s Demo-cratic stronghold can often discourage prospective Republican candidates, and for good reason. But not everyone sees the next mayoral election as a Democratic lock.

“A Republican candidate has a solid chance in every mayoral election because there is a growing record that reveals 60 years of failed Democrat policies and one party rule,” Dr. Seth Kaufer, Public A"airs Chairman for the Philadelphia Federation of Young Republicans, said. “Philadelphians are open-minded to change, but the mes-sage needs to be e"ectively communicated to them.”

E"ective messaging will be a key factor in the next mayoral race for all candidates, but especially for Republicans. After the November elections, the GOP was left pointing fingers at one another over Mitt Romney’s decisive loss. Did Romney lose because he was too conservative or not conser-vative enough? Was his biggest handicap failing to rally his base or alienating minority voters? The

CAN A REPUBLICAN WIN

CITY HALL?It’s the beginning of the end of Mayor Michael Nutter’s reign

in Philadelphia, and several would-be hopefuls are already waiting in the wings to replace him. With the city’s Democratic machine as strong as

ever, does a Republican even stand a chance of winning the next mayoral race? And what type of Republican would that be?

(Hint: It won’t be someone from the Tea Party.)

A

Illustration byDon Lee


debate rages on within the Republican Party, but there’s no denying that there is a rebranding e! ort already under-way amongst the party’s moderates members. And a moderate voice is the Republicans best chance for winning over a city like Philadelphia.

“Republicans will nominate a can-didate who o! ers the best vision for the future of Philadelphia,” Dr. Kaufer said. “The type of Republican that can win will need to have a program that speaks to all Philadelphians and can o! er real changes to fi x the budget, schools, crime, and service problems that face us all, and he or she will need to bring all citizens together rather than continuing to divide our city.”

If it seems as though our country is more divided than ever when it comes to politics, it’s because it is. The presi-dential race was determined within a 3% di! erential, but the red state ver-sus blue state phenomenon has now evolved into red state versus blue city.

The only major cities that voted Republican in the 2012 presidential election were Phoenix, Oklahoma City, Fort Worth and Salt Lake City, and Phoenix nearly turned in Presi-dent Obama’s favor. The cultural and sociological e! ects of city living have become so profound that a number of America’s most Democratic cities are located in staunchly Republican states. For example, every major Texas city (Austin, Dallas, Houston, and San Antonio) voted Democratic in 2012. Similar trends can be seen across the United States and is especially true for Philadelphia.

So with a city like Philadelphia, where Democratic ideals have prevailed for decades, how does a Republican gain a voter’s trust? Rudy Giuliani and Michael Bloomberg were able to e! ectively woo New Yorkers, and current mayor Tomas Regalado has won over the deeply blue city of Miami. Their successes all seemed to stem from understanding their cities’ most pivotal issues, which the same can be said for Philadelphia.

“It all depends on that actual situa-tion in that individual city at the time,” Vito F. Canuso Jr., Chairman at Phila-delphia Republican City Committee, said. “You have a crisis looming with the fact that there are no contracts for any city employees except for the police. And that contract has very dev-astating e! ects in the future, includ-ing the fact that you have substantial

raises and pension obligations to the city.”

There’s no doubt that whoever takes over for Mayor Nutter will have a whole host of issues to contend, no matter how e! ective his last term will be. The poverty level in Philadelphia has been signifi cantly increasing, and the city’s median household income in 2011 ranked second-worst among the nation’s 25 largest cities. Crime, education and job growth are not problems that will be resolved over-night, and the next mayor will have to tackle them head on and provide a concrete plan of action without isolat-ing groups of voters.

“The challenges facing the next mayor are numerous,” Dr. Kaufer said. “The city budget is massive, is full of waste, and needs to be updated to current realities. Crime continues to rage throughout all corners of our city, and our police and crime-fi ghting citi-zens are being targeted by criminals. The public school system is broken, despite huge amounts of money spent on ‘experts’ and ‘solutions.’ For all of these reasons and more, Philadel-phians are leaving the city in droves for a better future for their families.”

While Republicans paint a consid-erably bleak portrait of Philadelphia at the hands of Democrats, others are

not as quick to share in that view. In fact, some argue that the only way a Republican could win a mayoral race in Philadelphia is if he or she took a huge step away from a party so many in the region doubt.

“Given the unpopularity of the Republican brand in Philadelphia, it is very unlikely a Republican will win the mayor’s race unless he or she is able to e! ectively distance himself or herself from that national party,” said J.J. Balaban, Principal Consultant with The Campaign Group, who has worked with Mayor Nutter. “That has happened with the past two mayors in New York City and is theoretically possible in Philadelphia, but it’s very hard to do.”

According to the latest survey, Mayor Nutter’s approval rating was at 60% - up from 52% the previous year. Residents voiced their concerns over crime and the general direction the city was heading in, but overall, they were still happy with the mayor and his policies.

“For a Republican to win, the Democratic nominee would have to be seriously fl awed because any cred-ible Democrat would have an easier time telling the Democratic electorate that he or she shares their values,” Mr. Balaban said.

As for the heat Mayor Nutter endures from his opponents on the challenges facing Philadelphia and its residents, Mr. Balaban seeks to shine light on one the mayor’s most notable contributions to the city.

“It’s unfortunate that he doesn’t get enough credit for what he has done to restore integrity to the mayor’s o" ce and reduce corruption,” he said. “The absence of corruption scandals doesn’t garner headlines, but it’s important to the long-term health of our city.”

There is no doubt that poverty, crime and education will continue to be factors for the next mayoral race. It is how the potential candidates plan to tackle these problems that will weigh heaviest on voters’ minds, and what issues will become most prevalent in the next two years remain to be seen. For now, it’s simply a waiting game for Republicans, but they are taking this time to learn from the past.

“We saw that in 1999 and 2003, Sam Katz made an awful close run for it,” Mr. Canuso said. “I think that profi le works. He had a substantial business and economics background, and experience budgeting govern-ments coming from a company that was an advisor to prior mayors and governments. Someone with that kind of background and that kind of experience and knowledge will bode well. He wasn’t extreme on any issue, which I think will appeal to the vot-ers of Philadelphia. And when you’re in a crisis situation, someone who is somewhat moderate and capable and competent will do well.”

Philadelphia Republicans have long admired Katz for the strides he made where many before him had failed. Katz actually began his political career as a Democrat but switched to the Republican Party in 1990. Katz ran his campaigns for mayor as a moder-ate to liberal Republican, promoting cutting the high wage taxes in the city and reviving job growth. His 1999 bid fell in large part to a 75% voter reg-istration disadvantage, but his 2003 resurgence was strong until he fell victim to his own party’s unpopularity. If prospective Republican candidates want a chance at securing a position as mayor of a decidedly blue city like Philadelphia, they will have to learn from Katz’s errors as well.

“Sam Katz made mistakes when he ran again in 2003 by failing to adequately distance himself from

“Philadelphians are open-minded to change, but the message needs to be effectively communicatedto them.” DR. SETH KAUFERPHILADELPHIA FEDERATIONOF YOUNG REPUBLICANS


Handicapping Mayor Nutter’s End Game

BY ELISSA VALLANO

With three years left in his final term, Mayor Michael Nutter is back at work for Philadelphia – preparing the next

budget address and making peace with the city’s firefighters.

He has much more on his agenda for the next three years, and while progress has been made, he’s also been continually plagued by public safety and education issues.

Perhaps it’s because Philadelphia's problems are not an easy fix. Despite a concerning amount of gun violence in the city, crime has actually decreased since Mayor Nutter took o!ce in 2008. There has been a 15% reduction in homicides since 2007, though homicides have been up year-over-year since 2010.

There are also several recent developments indicating promise for job growth. Josh Kopelman, Partner at First Round Capital, moved his opera-tions to Philadelphia last year, and Goldman Sachs will aid the city through its three-year-old 10,000 Small Businesses program, committing $20 million locally.

Mayor Nutter’s accomplishments have not gone unnoticed by those in Washington, DC, and his outspoken support for President Obama led to numerous rumors about his intentions to stay in Philadelphia or move on to the political big leagues.

“He’s saying otherwise, but I wouldn’t be sur-prised if Mayor Nutter doesn’t serve out the full term,” Vito F. Canuso Jr., Chairman at Philadelphia Republican City Committee, said. “You’ve got a situ-ation where he’s terminated. He’s got his walking papers in three years, and where does he go in three years? I don’t know. There are a lot of possibilities, but I don’t think Mr. Nutter is going to stay put.”

Mayor Nutter has denied having any desire to vacate his o!ce early. He told the Philadelphia Inquirer back in November, “President Obama knows, directly, that I love my service here as the mayor. Secondly, I'm not going anywhere. I've made that clear in a polite fashion to all the folks who need to know that in President Obama's administration."

Much can change in the next three years, but as of now, Mayor Nutter remains a much-needed leader for a city with dogged challenges ahead. His last term won’t be easy, but it is certain to be a defining one.

“I think if he has the opportunity to go onto Washington, it’s a good thing for Mr. Nutter,” Mr. Canuso said. “Not so much for the city.”

the very unpopular administration of George W. Bush,” Mr. Balaban said. “Katz had the money and the profile, but ultimately couldn’t get across the finish line.”

That distance from the Republican base appears to be a foregone con-clusion for whichever Republican candidates step up to the plate in 2015. Romney wasn’t able to capture a single vote in 59 precincts in Phila-delphia, so appealing to the middle will be the top priority. A successful campaign will require a goldilocks mentality on social issues and detailed plan of action for the city’s troubling fiscal problems.

If there are Republicans up to the task, they have yet to make their pres-ence known. But that means little in the game of politics. Much can change in a few years, as evidence by past races in the state.

“Two and a half years before the 2008 presidential election, Barack Obama wasn’t a credible presidential candidate,” Mr. Balaban said. “Two and a half years before she was the highest Pennsylvania vote-getter in the 2012 elections, Kathleen Kane was an unknown former Scranton prosecutor who was given little chance of winning the primary, let alone becoming the first Democrat elected Attorney-General in Pennsylvania history. And most relevantly, two and a half years before the 2007 mayoral race, Michael Nutter was a City Coun-cilman who represented one-tenth of the city and was polling in fifth place of five candidates. The driving issues of the 2015 race won’t be known for years.”

As for the possible candidates already being mentioned for the next election, Mr. Balaban isn’t putting too much stock into them yet.

“It is way too soon to be able to pre-dict what will drive a primary that is two and a half years away,” he said. “It is very possible that the winner will be someone whose name isn’t even men-tioned now as a likely candidate.”

Still, Republicans are already thinking ahead. In addition to set-ting themselves apart from previous candidates, they are also figuring out the best methods for reaching poten-tial voters – which at the core is voter registration.

“The toughest thing that a Repub-lican faces is obviously the huge voter registration disadvantage,” Dr. Kaufer


Despite being several years away from campaign season, quite a few names have already creptinto political conversation regarding the next Philadelphia mayoral race. Not surprisingly,

they’re all Democrats with major clout. Will one of these people be the next mayor of Philadelphia?

said. “This can be overcome though if the candidate raises enough money to be able to get their message out to the voters and is smart about utilizing earned and social media to facilitate the campaign.”

The latest voter registration sta-tistics indicate there are nearly 1,100,000 registered voters in Phila-delphia, and roughly 133,000 are registered Republican, 856,000 are Democrats, 86,000 hold no a!liation, and 25,000 are classified as “other.” After the 2012 election, the Pennsyl-vania Republican state committee sent members of the media a release

about a voter registration group in Philadelphia that “shredded and threw away numerous registration forms,” including many who were “for people trying to register as a Repub-lican.” The group, Community Voters Project, denied these allegations and said they were only shredding photo-copies, not original voter registrations, but Republicans are still skeptical.

“One interesting thing about the 2012 Presidential election was that it focused the national media’s attention on Philadelphia and voter fraud suspi-cions,” Dr. Kaufer said. “Many Repub-lican minority inspectors and poll

watchers were thrown out of polling places by the Democrats, even though we had every legal right to be there. The Philadelphia Republican Party and City Commissioner Al Schmidt are committed to fair elections in our city. Our eyes have been opened to the Election Day shenanigans of the Democrats, and we will be even more prepared for the next one.”

Regardless of controversy and polit-ical strife, there is a consensus among both parties that in order to win a mayoral election in Philadelphia, the candidate must appeal to both sides of the aisle.

“The best candidates can relate to the average Philadelphian by exem-plifying the American dream of hard work, playing by the rules, and want-ing better for future generations,” Dr. Kaufer said. “We have failed to face up to those realities as a city. I predict that the winning candidate will present a bipartisan message and approach to tackling the pressing issues of the day and will run a positive campaign that urges Philadelphians to demand bet-ter from their elected o!cials.”

Elissa Vallano is a Philadelphia-area freelance journalist.

THE NEXT MAYOR: 5 POSSIBILITIES

Jim Kenney

Jim Kenney, a life-long South Philadelphia resident and LaSalle graduate, has served on Philadelphia’s City Council since January of 1992. In addition to creating the Committee on the Environ-ment, he has also sponsored a number of citywide envi-ronmental initiatives such as incentives for green roofs and plug-in vehicles.

His hefty roster includes Chairman of the Committee on Labor & Civil Service; Vice-Chairman of the Committee on Rule, the Committee on Law & Government, and the Committee on Environment; and member of the Whole, Public Property, Public Health, Fiscal Stability, Legis-lative Oversight, Technology, and Ethics Committees.

Bill Green

Another Philadelphia City Councilman, Bill Green is known for his intelligence and ambition – but also has an unfortunate reputation of being difficult to work with. If he can overcome that obstacle, he should make for a formidable opponent in the next mayor’s race (he has openly admitted his intention to run).

Mr. Green also comes from political pedigree. His father, William Joseph "Bill" Green III, won the Democratic nomination for Mayor of Philadelphia in 1979 after pre-viously serving as a member of the U.S. House of Representa-tives. He understands budgets and taxes and is grounded in a fiscal discipline that will appeal to many of Philadel-phia’s more moderate voters.

Blondell Reynolds Brown

Councilwoman Blondell Reynolds Brown is a leader in energy conservation and environmental matters, as well as a champion of wom-en’s and children’s rights. She’s a Penn State graduate who started the Celebration of Moxie Women which aims to highlight the poten-tial and power of young girls and the next generation of women leaders, especially working mothers.

Ms. Brown is also a big supporter of the arts in Philadelphia, and she cur-rently serves on the board of the Greater Philadelphia Cultural Alliance. So far, she remains the only female candidate being mentioned thus far for the next possible mayoral crop.

Alan Butkovitz

Alan Butkovitz is in his second term as City Con-troller, and he's made quite a name for himself while serving as Philadelphia’s chief fiscal watchdog. Prior to his current position, Mr. Butkovitz served 15 years in the Pennsylvania House of Representatives.

He’s a Philadelphia native, born and raised, who gradu-ated from Temple and cur-rently resides in the North-east. Mr. Butkovitz recently had his hands full balancing the city’s financial books, and he came down hard last year on tax evasion at area construction sites. But his background is more than just money – he also helped create the O!ce of the Safe School Advocate, the first of its kind in the nation.

Sen. Anthony Hardy Williams

As a lifelong resident of West Philadelphia, Senator Anthony Hardy Williams was first elected to the Sen-ate in 1998. He previously served five two-year terms in the state House of Repre-sentatives representing the 8th Senatorial District. Last year, Democrats elected him minority whip – their num-ber-two in command.

His father, Hardy Williams, was a legendary former state senator who passed away in 2010, and Mr. Williams has been steadily following in his footsteps. His passion for edu-cation and desire to reform the state’s school system has been his most notable pursuit, and one that Philadelphia so desperately needs.


BY VICTORIA MARCHIONY

If Drexel University’s president gets his way, the landscape of Philadelphia could be drastically altered within the next 50 years.

John Fry, in collaboration with SEP-TA and Amtrak, launched a million-dollar feasibility study to explore the potential for constructing a platform to connect West Philadelphia to Center City and the Art Museum at the 96-acre site of 30th Street Station’s Schuylkill Rail Yards.

In the years since 30th Street Station first opened in 1933, developers have mulled over plans to construct every-thing from an amusement park to o!ce and residential properties to a baseball stadium over the rail space.

Cost and construction challenges associated with the acres have been substantial enough to kill all previous initiatives.

Potential di!culties “aren’t just tech-nical. They’re financial,” John Gattuso, regional director and senior vice presi-dent of major Philadelphia developer, Liberty Property Trust, told the Phila-delphia Inquirer.

High voltage electrical lines would need the hands of experienced, union-ized, (and costly) Amtrak workers.

The inconsistent land grade com-bined with the current setup of struc-tures would require the construction of a platform complete with roads, utilities and other infrastructure in order to suc-cessfully develop over the rail space.

Not to mention that causing serious rail delays for the Northeast Corridor — the nation’s busiest rail line — could be a deal breaker all on its own.

The study, slated to take about two years to complete, is investigating simi-lar rail yard development projects such as Chicago’s Millennium Park, as well as upcoming projects on the west side of midtown Manhattan and behind Union Station in Washington.

Air rights in those cities, however, are pricier than they are here, meaning that Philadelphia “can’t necessarily create a good economic return,” President and CEO of Brandywine Realty Trust Jerry Sweeney, explained in an interview with the Philadelphia Inquirer.

As developer of the Cira Center

located at 29th and Arch Streets, the only building to reach completion in the rail yards’ area, Mr. Sweeney has an intimate understanding of the chal-lenges associated with construction over active rail lines.

Though the Cira Centre was built between electrical lines and on land — as opposed to a platform — the process was still “expensive and time-consuming.”

According to a 2011 study by Univer-sity of Pennsylvania graduate students as part of PennDesign, which designed a separate but related project to over-haul the Schuylkill Rail Yards, a rede-sign could include extreme financial and logistical costs.

Proposed measures included lower-ing the height of I-76 by 20 feet, relo-cating the Vine Street Expressway’s

southbound lane, and extending the street grid. Projected costs for reimag-ining all 96-acres hovered around $3.2 billion.

Mr. Fry’s ambitions, however, are slightly less intimidating. Drexel is spe-cifically interested in using a 55-acre parcel known as Penn Coach Yards, where trains are currently stored and maintained, to serve as a connector between Drexel’s upcoming Innova-tion Neighborhood and Center City.

Innovation Neighborhood, which will proceed with or without the rail yard initiative, is expected to include five million square feet of commercial o!ce space, research laboratories, stu-dent housing and a hotel.

One of the main goals of the upcom-ing “superblock” is the transformation of the space around the Bulletin Build-

ing, which currently creates an “empty and intimidating gap in the urban fab-ric” by developing significant pedestrian space and relocating the JFK bus stop.

According to Drexel’s Master Plan blog, these and other changes will serve to create an accessible portal to Drexel and, by extension, University City.

If the rail yard project is a feasible addition to Drexel’s Master Plan, “It has the potential to be a game-changer for University City,” Harris Steinberg, executive director of Penn Praxis and supervising professor of the University of Pennsylvania graduate students who produced the 2011 rail yards report, told the Inquirer.

University City is a subject close to Mr. Fry’s heart.

From 1995 to 2002 Fry served under then-president Judith Rodin as a col-

University City’s Future Looking to the Rails

The Schuylkill Rail Yards at 30th Street Station could someday be found beneath an office park or a baseball stadium. FEBOOPTIMUS/FLICKR


lege administrator at the University of Pennsylvania, playing key leadership roles in Penn’s successful neighborhood revitalization e!orts that resulted in the launch of the University City District.

His work with Penn, in combination with similar redevelopment success during his term serving as president of Franklin and Marshall College in Lan-caster from 2002 to 2010, has earned him a strong reputation for successful innovation.

“We’re very supportive of John’s vision,” Steven M. Altschuler, president and CEO of Children’s Hospital of Philadelphia told the Inquirer. “He has a great track record of urban develop-ment and university campus develop-ment.”

Such confidence will be crucial in securing partners for his ambitious endeavors in the coming months.

“We’re trying to use other people’s money and our land,” Mr. Fry explained to the Inquirer.

The backing of a major university with a stake in the neighborhood may be the key to bringing rail yard con-struction dreams to fruition that has been missing from previous failed e!orts.

Mr. Fry recently presented his ideas to a high-powered group of business leaders and was met with encourage-ment and excitement.

“This concept is exactly what the region needs to enhance job creation here,” William R. Sasso, chairman of the law firm Stradley Ronon Stevens &

Young, told the Inquirer. Between funding, designing and

construction, the reinvention of the rail yards’ acres will take decades to complete, and with a daunting “TBD” next to the cost estimates for imple-mentation on the Master Plan blog, the tone of discussion is understandably

one of cautious enthusiasm. City and business leaders alike are

eager to find out if such a mega-project could actually work. If it can, both pri-vate and public organizations are likely to jump at the opportunity to have a hand in redefining Philadelphia’s land-scape.

If the projects proposed for the rail yards are indeed feasible, “it opens up possibilities that I don’t think anyone has really ever thought about before, to link the city in various ways. This could be the basis for Philadelphia’s innova-tion and economy for the next 100 years,” said Mr. Fry.

Chicago’s Millennium Park will be looked at in a feasibility study over the Schuylkill Rail Yard in Philadelphia. BALAJI SHANKAR

RegionsBusiness.comPhiladelphia, 24/7


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This dramatic European custom home (405 Edison Furlong Road, Doylestown, Pa.), boasts 15,000 square feet (5BR/6BA 1 Half — $4.9 million) and is meticulously built with all of the amenities one can imag-ine.

Fifty sensational acres (possible sub-divi-sion) o!er a serene setting close to center of town.

The exterior is wrapped in cast limestone with rich, slate roofing. Stone can be found in the turrets, woven beautifully in the cast limestone.

The first floor o!ers voluminous ceiling heights, 15-inch baseboards, outstanding moldings and trim throughout.

A gourmet kitchen showcases excellent storage. The home also boasts a quiet and private library and a meeting room within a turret.

The master suite includes a bath and steam shower, and there are many closets on the first floor.

An additional private o"ce, lovely morning room and enclosed octagonal indoor porch all can be found on the first floor.

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‘Think Strawbridge & Clothier first’BY SANDY SMITH

John Wanamaker is Phila-delphia’s best-known merchant prince, and rightly so, for he invented the modern depart-ment store and introduced practices that revolutionized American retailing in the late 19th century.

But he was actually beaten into the business of selling “dry goods” locally by a couple of Quaker merchants, Justus C. Strawbridge and Isaac Clothier, who opened a small dry goods store in the 800 block of Market Street in 1868.

That store grew into a beloved local institution that outlasted its more legendary rival — though only barely — as an independent business and played a key role in the ongoing e!orts to reshape and refashion Philadelphia’s Main Street.

Like John Wanamaker, Strawbridge & Clothier grew rapidly in the later decades of the 19th century, and like its across-the-street rivals, Lit Brothers and Gimbels, it accommodated its growth by slowly expanding into adjacent buildings on its block.

Eventually, the Strawbridge and Clothier families decided as Wanamaker did that the best way to ensure the store’s future growth and success was not to keep adding on but to build new from the ground up.

In 1928, Strawbridge & Clothier demolished all but one of the buildings it had acquired and began construc-tion on the handsome stone edifice that stands today on the northwest corner of 8th and Market.

The Strawbridges ran their store in keeping with Quaker

traditions of fair and honest dealing, as reflected in the trademark the store adopted in 1911 — the “Seal of Confidence,” which depicted William Penn’s “never written, never broken” treaty with the Lenape Indians that enabled him to establish Philadelphia and Pennsylvania on Lenape land.

Like Wanamaker with his pioneering money-back guarantee, Strawbridge & Clothier stood behind every-thing it sold — a customer who had a problem with anything purchased there could return it to the store for repair, replace-ment or refund.

The Strawbridges were also early adopters of the trend of following their customers to the growing suburbs, opening branch stores in Ardmore in 1930 and Jenkintown in 1931.

At its peak, Strawbridge & Clothier had 13 stores through-

out eastern Pennsylvania, southern New Jersey and Delaware, and profits from the branches o!set the losses of the flagship store.

Its introduction of revolving charge accounts around the same time also revolutionized retailing as much as Wana-maker’s innovations had.

The store reached its peak of reputation and popularity under the leadership of the last family member to run it, Stockton Strawbridge.

After returning to the United States after World War II, Stockton Strawbridge toured the flagship store, pronounced it dull, and set about updating and enlivening it.

One of his most successful additions was a British import: the Food Hall, an emporium inspired by the famous Food Hall in London’s Harrods that proved a successful draw for

the 8th and Market store (it was never copied in Straw-bridge branches).

Around the same time that he was installing the Food Hall, Stockton Strawbridge also took a keen interest in the overall fate of Market East.

His store’s participation, along with Gimbels, helped make the Gallery at Market East a reality in 1977, and he also organized and led the nonprofit organization that gave Market Street itself a total makeover in the mid 1980s.

While he fell short of his goal of turning the street into “the Champs-Elysees of Philadel-phia,” his e!orts most likely helped stave o! further decline.

Unfortunately, for all that Strawbridge did to keep the store an independent concern and a force in its home region

— going into discounting with its Clover division, adding and

improving branches and even organizing a bid to buy its archrival John Wanamaker — he proved unable to keep his own family on board with his vision: the store barely fended o! a takeover by a corporate raider in the late 1980s, and competitive pressure from newer retailers ultimately led Strawbridge’s to su!er the same fate as its more famous rival up the street: sale to a national chain, the May Department Stores Company, in 1996 over Stockton’s vehe-ment objections.

Even before May’s sale to Macy’s Inc. in 2005, the Strawbridge flagship store was being gradually downsized just as the huge Wanamaker store had been, and the Macy’s sale sealed its fate: it was closed in favor of the more historically significant Wanamaker store.

Its basement and first two floors have remained vacant since then, largely in hopes of attracting another depart-ment store tenant, while the upper floors now house o"ces — most of them state agencies relocated from the old Phila-delphia State O"ce Building (now Tower Place).

The most recent o"ce tenant to take space in the building is Interstate General Media, owner of The Philadelphia Inquirer and Philadelphia Daily News.

This article originally appeared at PhiladelphiaR-ealEstate.com.

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Region’s Business: Could you give us the elevator pitch for your job as the county commissioner?

Josh Shapiro: County government is an entity of government that is often overlooked by our constituents. But the truth is county government has a reach that is far and wide. Whether it is managing a half a billion dollar budget, whether it is dealing with the many challenges that come for us each day, it’s an extraordinarily invigorating job and one that we take seriously and one that touches the lives of constituents all across our county, who walk on our trails, who rely on our court system, rely on getting a marriage license or who are planning changes in their community and have to come before the county.

RB: People seem to almost dismiss county government, but as you point out, it’s very integral to their lives, why do you think that is? What do you think is the image problem of county government?

JS: I don’t think we have an image problem, I think it’s just a matter of making people aware of the good things happening in their community and I think often times people don’t appreciate which level of government is managing a par-ticular issue. For example, when I was running for state representative for the first time in 2004, people stopped me all the time and asked me to stop the war in Iraq. I don’t blame the people there for not understanding the role that we play; I think it is incumbent upon the elected o!cials to educate the public about the things that they’re working on. For us, the biggest issue has been restoring some fiscal sanity and getting our fiscal house in order in Montgomery County and I think we’re working very hard to make the public aware of all of the changes that we’ve made in there that are benefitting them.

RB: So let’s just jump into that. Let me describe a politician to you and I’d like you to tell me where they fall in the political spec-trum. This politician believes in keeping taxes down and also cutting government spending. Where does that person fall on the political spectrum?

JS: I think that person is me, and I think that person would fall on the political spectrum some-where in the middle.

RB: What we’ve seen on the national stage is kind of that polarization where if you’re interested in cutting taxes, you’re put in one camp and if you’re interested in government spending, you’re put in the other. Is there a balance between those two?

JS: There is a balance and the two are not mutually exclusive. I think people want to know that you’re operating an e"ective and e!cient government. And when you’re doing that and you can show tangible changes you’re mak-ing to accomplish those dual objectives, then I think it’s easier to have the discussion about new revenues or more revenues in the public. What I fundamentally believe is before you go ask for

more revenue or before you increase spending on a particular program, you need to make sure that you’ve eliminated waste and duplication and abuse of the system so there are no tax dollars that are not being wisely used and once you do that, then you can have a responsible discussion with the public one way or the other. Where I think Washington has failed, is that they’re just having a discussion about new revenue when they’re not responsibly talking about cuts, or they talk about these extreme cuts without responsibly talking about revenue, and they’re doing all of this without ever talking about reforming the government in a way to elimi-nate wasteful spending. And I think that’s why the public is so frustrated by government there and in contrast, why I think they’re more optimistic today than they were a year ago about their county government.

RB: We’re on parallel tracks here; you’re in Montgomery County doing one thing, people in Washington are doing another. Can you talk a little bit about why you believe you’ve been e!ective at the county level?

JS: I’m a consensus builder and I’m someone that doesn’t subscribe to one doctoring or another, but rather just the goal of trying to get things done and meet the needs of my constituents. I’ve found an environment here in Montgomery County where dramatic reform was needed, I have a his-tory of being a reformer in the state legislature and I think there was a natural extension of those reform e"orts here in Montgomery County and I think when the public and your employees see you as trying to do the right thing and trying to make necessary change, even if it’s not the most popular decision at the moment, it is widely understood that it’s necessary and ultimately you gain the sup-port of people to make that change.

RB: How far along would you say you are in accomplishing what you had hoped to accom-plish when you became a county commissioner, knowing the need for reform at the county level?

JS: I would say that we’ve made great strides, but we’re certainly not done yet. One of the signa-ture reforms of our first year was adopting zero-based budgeting. And this is something I’ve talked about and contemplated for many years in the state legislature, and that is instead of just simply pass-ing the same budget from the year before with a slight cut or a slight increase, you really need to start with a blank sheet of paper and define the core mission of county government and the core mission of each department and determine what the cost is to meeting that core mission. And we did that, and it was an 11-month budgetary process as opposed to a three or four week budgetary process, which is what the county was used to in the past. And the result of which was we were able to make really dramatic and sweeping positive change in our budget process. I’ll give you a few benchmarks of that. When we took o!ce, our reserve fund was 20 million dollars, when my predecessors took o!ce 4 years prior, the reserve fund was at 100 million. They wasted 80% of the reserve fund, lost

A&Q

JOSH SHAPIRO’SPRAGMATIC POLITICS

He’s helped turn the Montgomery County commissioners from divisive to a body that slashed spending and held the line on taxes.

His success has some expecting to take his sensible politics to a larger stage, but for

now, he’s keeping his focus closer to home.


the AAA bond rating as a result of it. In four years, the reserve fund declined. For the fi rst time in four years, we actually increased the reserve fund. ... We’ve got mass infrastructure problems to focus on, we’re trying to make wise invest-ments in technology that’s ultimately going to reduce our physical footprint, we’ve reduced about four percent of our workforce and we’re continuing to look at ways to consolidate. We had 58 governmental departments when we got into o! ce, we are down to 50.

RB: Can you explain what you mean by structural defi cit?

JS: You total up all of the di" erent shortfalls we had, whether it was the [pension] payment, whether it was just simply them overspending by $10 mil-lion in the 2010 budget, whether it was unfunded liabilities, for example, they built a new wing on a prison but didn’t provide any money to sta" it. When you put all of those things together, it totalled $49.3 million.

RB: You talked about massive investment and infrastructure; can you provide some detail around that?

JS: There has been an extraordinary deferred maintenance and frankly ignored problems for at least a decade. The county owns lots of real estate in many buildings, three structures that our employees and the public rely on most are two parking garages right around the courthouse and 1 Montgom-ery Plaza, which is like our municipal o! ce building, it’s 200,000 square feet. The facade on 1 Montgomery Plaza is falling o" and it’s known to be falling o" for years and the garages are com-promised, we need to repair/replace all three and the total price tag on that is at least $50 million. We have in excess of $100 million worth of road and bridge repair on county roads and bridges that are necessary. We have several million dollars in IT infrastructure that we need to invest in and we ultimately decided rather than buying all new hardware, we would move our operations to the cloud. Which reduced our capital cost and increased our operating costs, but ultimately it’s going to yield a savings for the county, so we did that.

RB: So far, things sound great. The expenses are going down, the e! cien-cies are increasing, what are your crit-ics saying? What are you seeing from the other side?

JS: I can tell you that every single vote we’ve been put up in over the course of a year has been unanimous. So I have not had any opposition from our republican

on the board, so that should tell a story. And by contrast, if you look at the four years prior to us taking over, Montgom-ery County government was known for one thing and one thing only, and that was the bickering between the com-missioners. And that is gone now. In its place are three commissioners who are working extraordinarily well together to tackle the major challenges we face. I’m sure there are some who don’t like change and don’t like our method of change and would like to see the status quo, but I’m not particularly interested in status quo and reserving a system that wasn’t working for the taxpayers of our county.

RB: Why isn’t this thinking more widespread in government?

JS: I don’t know. I think it’s unfor-tunate that leaders at the national and some at the state level seem to be more interested in winning the new cycle and fi ring 140 character missives back and forth at one another, as opposed to simply doing the right thing and practicing good government, which I believe is ultimately the best politics. I fundamentally believe that the public just wants us after the elections are over to focus on the work in the o! ce that we ran for and get the job done and each party will be rewarded around election time with electoral success. But when you try to win the individual new cycle, you end up angering the public and not getting done what you’re supposed to get done, and I think it has little, if any, appreciable di" erence ultimately on the election.

RB: If we can move on a bit, you mentioned the state. Governor Cor-bett has set out another aggressive agenda for 2013 and a lot of that has to do with reduced funding for a num-ber of initiatives. What impact have you seen on the changes the state has

made and how does that trend e" ect the way you look forward?

JS: The governor’s budget cuts have had a severe impact on Montgomery County, and many other counties. In particular his cuts to human services have really hurt our constituents and really put a strain on our budget. I hope that in his next budget, he’ll reverse his course and begin to fund these important and necessary programs. I don’t really spend much time worrying about those things I can’t control. The governor has his agenda and his reasons for doing things and all I can do is deal with the impact of his budget and try to work through them the best I can and the most innovative way I can.

RB: What do you see as the biggest challenge facing Montgomery County in the coming year?

JS: Just continuing getting our fi scal house in order. Like I said, we have a good foundation now, but we still need to make some tough choices. We want to continue to work with area businesses to help them grow and be successful and to attract new business to our county and we’ve been working hard on that. And making sure our infrastructure invest-ments are made early on this year so we can begin to see some tangible results.

RB: We’ve spent a lot of time talk-ing with Governor Corbett, in par-ticular addressing his re-election bid that is coming up in two years. Your name is one that continues to surface. I know you’ve kind of dismissed those rumors or overtures, but I’m wonder-ing if you can give us one more look at how you respond to people saying, “Gee, Josh you should really think about this in 2014.”

JS: Look I’m honored and fl attered that people think that I could move the state in the right direction, but right now I’m focused on doing my job here

in the county and making the necessary change to make our government more e" ective and e! cient.

RB: My brother used to tell me you never interview for the job; you inter-view the job that this job is going to get you. So what job is Josh Shapiro interviewing for right now?

JS: Respectfully, I don’t view politics that way. I know some do, I don’t. I always believe that if you do a good job, the job people elect you to do, and you also manage your politics e" ectively, that opportunities will come. I’ll make a decision at the appropriate time, about what, if any, the next steps are going to be.

RB: You’ve done a really excellent job of illustrating the political theater that is happening down in Washing-ton. What would it take to get that pragmatic civility you’ve worked hard on in Montgomery County to happen on the bigger stage?

JS: I think politicians need to be woken up either by major issues they’re confronting that forces them to put par-tisanship aside and force them to focus on real results and some of them need to lose, frankly, and a new generation with leaders with a new mindset need to come in. I think it would a combina-tion of those two. The country faces ... [an] unbelievably serious fi scal crisis in a couple months, relative to the debt limit, and I would hope that congress-men and senators would recognize the serious nature of the issues at hand and focus on what’s right for the country and not just what’s right for the party caucus or for the particular moment.

RB: Anything else you want to toss out to our readers?

JS: Montgomery County is open for business and we have an extraordinary new commerce department that is uniquely situated and run by a busi-nessman to be able to help businesses locate in Montgomery County and grow in Montgomery County. We put a lot of emphasis on the creation of the com-merce department, the consolidation of many other departments that are deal-ing with business, so that we focus like a laser beam on meeting the needs of the business community in Montgomery County.

More onlineRead the complete Q&Awith Josh Shapiro on ourwebsite: RegionsBusiness.com

The facade on1 Montgomery Plaza is falling off and it’s known to be falling off for years.

A&Q


CHAMBER REPORT

Presidential Lunch Planned

Lunch with the President, an opportunity to meet Delaware County Chamber of Commerce President Alex Charlton or mingle

with other businesses, will be held 11:30

a.m. to 1 p.m. January 17 at the Edgmont Country Club, 5180 West Chester Pike, Edgemont, Pa.

The family-owned and operated Edgmont County Club is currently celebrating the 50th anniversary of its founding.

Tickets to the event, catered by Pronto Catering, are $25 each for members or $35 for non-members.

For more information, visit www.delcochamber.org.

DELAWARE COUNTY CHAMBER

Chamber Partners with Villanova To Offer Certification Program

Villanova University partnered with the Lower Bucks County Chamber of Commerce to offer a 13-week Certificate in Human Resources Man-agement course.

The class will be o!ered 6 to 9 p.m. Tuesdays begin-ning January 29 at the chamber o"ce, 409 Hood Boulevard, Fairless Hills.

Under the direction of professor Richard Hand-schumacher, students will be prepared for the senior professional in human resources exam or the professional in human resources exam.

When students com-

plete the course, they will receive the certificate in Professional Human Resource Management from Villanova University, along with 3.5 Continuing

Education Units.To register, visit www1.

villanova.edu/villanova/continuingstudies/pro-fedprog/noncreditprog/hrstudies/hrmanage.html.

LOWER BUCKS COUNTY CHAMBER OF COMMERCE

St. Thomas of Villanova Church and Dougherty Hall VILLANOVA UNIVERSITY DIGITAL LIBRARY

Social Media Presence Expanded

The Pennsylvania Chamber of Business and Industry is expanding its social media outreach in 2013 to reach out to member companies.

The PA Chamber’s Twitter page, with more than 2,575 follow-ers, is now using a new hashtag

— #PAChamberevents — that will enable followers to easily search for information on roundtables, conferences, summits, and other educational forums that the PA Chamber hosts throughout the year.

The Chamber also updates its LinkedIn group page and Face-book page with photos and details of upcoming events.

PENNSYLVANIA CHAMBER OF BUSINESS AND INDUSTRY

SPACE

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E: [email protected]


ESSAY

Editor’s note: The author originally posted this essay with this preamble: “Because of sensitivity about the victims of Hurricane Sandy,The New York Marathon is rescheduled for the day after Thanksgiving, Black Friday. The event lives up to its billing.”

Steve Kopfklopper is standing at the crowded fi nish line as the long proces-sion of colorfully dressed, sweaty run-

ners comes streaming by.He spots his grandson, Jonathan, coming

to the fi nish line dressed in his black leotards, light royal blue sweatshirt with Columbia University embroidered on it, and a black headband/ear mu! combination. Sweat is rolling down his smiling face.

His blondish, curly hair stands out from under the headgear. It’s about 45 degrees with little wind and the sky is overcast but has vis-ible blue sky breaking through. He walks over and greets his grandson.

He o! ers him several Hostess Twinkies, a relish of his own youth and soon an artifact of the past. Jonathan grabs the Twinkies and quickly devours them. Kopfklopper is think-ing the marathon is a great way to get young people to stop or postpone texting.

“Well done, Jon; doing it in three and a half hours is great! I’m proud of you running the rescheduled marathon. What a great idea to have the New York Maration on Black Friday and have all these people out and then ready to shop.”

“Thanks, Grandpa. I really appreciate you coming out, especially knowing that you had to fl y out from Puerto Vallarta to be here.”

“My pleasure; you know, your mom and dad are just about to return from Italy and I thought someone should help you celebrate the event. I’m proud of you doing it.“

“Cool.”“What was the highlight of the run? I know

you’ve been training for a long time.”“Seeing Mayor Bloomingbird and Presi-

dent Omar jogging; I passed them by and saw them sharing embraces, and throwing candy to the homeless was the fi rst highlight. They promised the homeless and those whose houses were badly hit 2% of the revenues to help them out! But, I have to say, that wouldn’t cover much of the destruction I saw in Staten Island at the start of the race. It was fun knowing that Trump was running behind me; couldn’t see him but sure could hear his mouth running. The last highlight was

the great, cheerful support sta! with all the hydration stations every mile. Every refueling station and fi rst aid station was named for an international or national city. One weird thing was one of the stations was covered, like no one was there!”

“I bet that was called the Benghazi station.”“You got that right, good guess.” “Thanks, Jon, something must have gone

awry, but the truth will one day come out. I love your mayor; he’s quite the brain. Figuring all that stu! out about global warming and sharing views with all of us.”

“I smell a little cynicism, I know you,” Jona-than states with an amused smile.

“”I used to be able to get that by you but now that you’re a freshman at Columbia, I should have known better. Global warming is surely due to hydrocarbons, but he’s supersiz-ing the impact. A third of global warming is likely due to the hot air that politicians all over the world produce.” Kopfklopper returns Jon’s amused smile.

“I should have seen that coming.”“Maybe, maybe, but even I change some.

Also want to thank you for not wearing any-thing tacky on your school sweatshirt, like “chainsaws are outdoor toys”; you know, the stu! that campuses just don’t’ seem to toler-ate anymore, you could be hurting someone’s feelings.”

“There’s been a big movement to restrict those kinds of expressions. Free speech is not as free as it used to be. So how long are you staying and what are you going to be doing?”

“Let’s go get a bite at a deli and talk. I’ll be

around for at least week. Thinking of setting up a new busi-ness venture, Biogra-pher-R-Us. Everyone deserves a good biog-rapher so that the true you comes out; believe me you never want to leave it to the media, as they see reality through vari-able prisms depend-ing on their current mindsets and agen-das.”

“OK, OK; that sounds good; there’s a great deli just around

the next corner.”They walk to the neighboring deli with

Kopfklopper having an arm around Jona-than’s right shoulder.

“I’ve got to tell you that I almost set up a booth at the beginning of the race. I was going to sell steroids and growth hormone to help everyone out.”

“What changed your mind?”“The realization that society might just

not be ready for that. You wouldn’t have all the hearings in Congress about the stu! and their agendas would be vastly reduced. Hav-ing those hearings on athletes makes them feel important and shows they’re minding the store. Meanwhile they and their cronies get to persistently pick everyone’s pockets. I have always wondered what would happen if everyone in sports and life took the stu! . Governments might actually achieve some-thing or have one less excuse and national and international sporting organizations would reduce their budgets; you wouldn’t have as many victories to vacate. I have had night-mares that one day the august United Nations would vacate the Allies win in WW2 based on likely use of steroids in the battlefi eld. They would award the victory to the Germans and the reparations would be all McDonald res-taurants in Europe.”

“But what about the Japanese then?”“They’re not black, Latinos, or Muslims and

the Chinese have them on their s*** list; they wouldn’t care.”

They fi nd the deli and soon fi ll their crav-ings.

The Race: NYC Marathon as Metaphor for Our Times

Alan Beck, a practicing physician in Minnesota, is the author of 'A Southern Solution' and 'A Faithful Proposal.'

I have had nightmares that

one day the august United Nations

would vacate the Allies win

in WW2 based on likely use

of steroids in the battlefi eld.


OPINION

The American banking industry is in crisis. As a result of the Wall Street bailout and the

Dodd Frank “reforms,” the concentra-tion of assets and deposits in the “too-big-to-fail banks” is now greater than it was before they failed and were rescued.

The St. Louis Federal Reserve reported that at the end of 2011, fi ve Wall Street fi rms — JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co. and Goldman Sachs Group Inc. — controlled 48 percent of total U.S. banking system assets:$8.5 trillion, equal to 56 percent of the U.S. economy. The other 7,307 banks held the remaining 44 percent.

At the same time, a! ordable credit, the life blood of a modern economy, remains largely unavailable or prohibitively expensive for the businesses that can power economic development and job creation.

The Wall Street–Federal Reserve banking system fails in its most important function: the e! ective allocation of capital into the productive economy. Investment is directed away from the production of new goods and services which create jobs, and into “fi nancial products” which produce few jobs.

And it is going to get worse.A recent article in American Banker

described remaining smaller and community banks as under siege, forced to comply at a cost they can’t survive with Dodd Frank’s capital requirements and regulations.

Of course, that’s what Wall Street wanted and got, with its army of lobbyists and an ever helpful Congress.

It is estimated the U.S. will lose more than 2,000 of its remaining community banks in the next two years. The concentration in Wall Street will grow ever greater. Pennsylvania’s community banks will not be spared.

Local businesses banking with Wall Street fi rms will fi nd themselves talking to little more than “paper pushers,” with decisions being made in regional centers, by people who know little of the businesses and have no stake in the local community or economy.

Pam Martens writes on her blog, Wall Street on Parade, “That level of concentration should be a wake-up call to a country that

was brought to the brink of fi nancial collapse because of a systemically corrupt culture on Wall Street.”

As Nobel Laureate Joseph Stiglitz and others have warned, this corruption and unprecedented lawlessness – mortgage fraud from bottom to top, compromised rating agencies, rigged Libor rates and municipal bond markets, laundered billions from Mexi-can and Columbian drug lords and, accord-ing to a U.S. Senate investigation, clients with terrorist ties – is having a corrosive e! ect on our economy: crowding out honest invest-ment and further distorting markets.

David M. Sachs at the Psychoanalytic Center of Philadelphia explained how these practices and unchecked individual criminal behavior are destroying trust and e! ect markets: “Normal expectations of what is safe and dependable [are being] shattered.”

In a recent op-ed in The Washington Post, GOP stalwart Craig Shirley wrote: “Wall Street is too fearsome and corrupt for anyone’s good. We should fi nd a way to create 50 Wall Streets, so that money can stay in the states and corruption can be kept to a mini-mum and law enforcement to a maximum.”

What Shirely, Martens and a growing army of problem solving Americans are talking about is public banking.

Public “partnership” banks use public funds to capitalize a bank which assists com-munity banks to get a! ordable credit into the economy, for economic development and jobs creation – and grow their profi ts and market share.

The profi ts of the public bank come back to the state, city or county that charters the bank as non-tax revenue for the general fund.

And a public bank can underwrite munici-

pal bonds, at substantially reduced interest and debt service borne by taxpayers.

Only North Dakota has its own bank. Over the past decade the Bank of North Dakota (BND) has generated an average of $30 million a year in non-tax revenue for the state and its people, and has a current commercial loan portfolio of more than $2.9 billion invested in the state’s economy through its community banks — in a state with a population no larger than some suburban Philadelphia counties.

The bank is run by civil servants on civil servants’ salaries – no bonuses or

commissions as incentive to speculate or take undue risk. The bank is overseen by a board whose members are all bankers. It is publicly audited.

The BND has been instrumental in sup-porting perhaps the nation’s strongest bank-ing industry: not one failure as the economy collapsed, and more than double the national average of bank o" ces per capita.

The Center for State Innovation concludes: “The extra leveraging ability that the state bank provides through participation loans, the increase in municipal deposits from letters of credit, and the other supports that a state bank can provide as a ‘banker’s bank’ are all critical in helping to strengthen small and/or young banks.”

In a recent conference call with other bank CEOs around the nation, the CEO of one small North Dakota bank said: “When the crash hit, the BND never blinked and kept the credit fl owing.” The CEO of a large, regional North Dakota bank said this: “With the support of the BND, we can go toe-to-toe with the big boys.”

Community banks in North Dakota are taking back market share from Wall Street, while in most of the nation they continue to lose market share.

Twenty states and an increasing number of municipalities are considering creation of public banks. A national network of public banks, providing locally generated credit for locally directed economic development and jobs creation is the long overdue alternative to a dangerously concentrated and dysfunc-tional banking system and the distorted markets it has produced.

Mike Krauss is a director of the Public Banking Institute (learn more at publicbankinginstitute.org ) and is chair of The Pennsylvania Project, a non-partisan public policy advocacy organization.

CONTRIBUTE

Send comments, letters and essays to [email protected]. Opinions expressed byguest writers do not necessarily reflect thoseof Region’s Business.

Public Banking a Solution to Dysfunctional Banking System

... a public bank can underwrite municipal

bonds, at substantially reduced interest and

debt service borne by taxpayers.


Lottery Privatization Makes Sense As Long As Details Do, TooThe hallmark of Tom Corbett’s

short tenure as Pennsylvania governor is clear - di! cult

issues.The Jerry Sandusky scandal and

the resulting sanctions against Penn State’s football program kept the state in the national spotlight for far too long and in the worst possible way.

In a sharp turn against the tide, he proposed slashing government spending, putting forth a budget with a 3 percent spending cut. State and state-related universities felt the sting most sharply, seeing their funding cut in half.

Even the positives have proven di! cult. The discovery of huge reserves of natural gas in the state led to a fi nancial windfall, but not without protracted and contentious debate over the enivronmental impact of hydraulic fracturing.

The next chapter of Gov. Cor-bett’s tumultuous tenure arrives in the form of lottery privatization. While it certainly fi ts the mold of smaller government and getting the government out of the business of being in business, it represents uncharted waters.

At its core, the deal makes sense for Pennsylvania. The government doesn’t need to be in the lottery business. And the deal proposed by Camelot Global Services looks like a winning bet.

The British company is promis-ing to earn the state billions more in revenue over the course of the 20-year contract.

The equation seems simple. The

state sheds itself of the burden of running the business, increases profi ts and, to settle another problem, creates a more consistent revenue stream.

There are skeptics, of course, and they raise some legitimate concerns, though the very idea of privatization is not among legiti-mate concerns.

Nonetheless, Camelot promises lofty revenue numbers. Will the state be protected if those projec-tions are not met? Inserting another layer (Camelot) creates additional expense. How will that expense be met and still allow additional profi ts? What about the impact on the state’s casinos? Con-cern has also been voiced about the lack of specifi cs made available to the public regarding the contract.

Like any deal, the devil will be in the details.

However, in these negotiations, Pennsylvania holds the upper hand and, therefore, signifi cant leverage. Pennsylvania would be the fi rst state to privatize its lottery system. So if Camelot can show it to be capable of running it e! ciently, the company would stand to gain a king’s ransom from other states eager to cash in on privatization.

That means Camelot has a great deal at stake here and it also means that Pennsylvania has the leverage.

It is up to Gov. Corbett and the state Senate to scrutinize the proposal and make sure that Pennsylvania gets protection against possible failure. This could be lucrative, but it’s not a sure bet.

REGION’S BUSINESSA JOURNAL OF BUSINESS AND POLITICS

© COPYRIGHT 2012 INDEPENDENCE MEDIA600 GERMANTOWN PIKE, SUITE 400

PLYMOUTH MEETING, PA 19462610.940.1656 | WWW.REGIONSBUSINESS.COM

EDITORIAL BOARD

CEO and President James D. McDonaldEditorial Director Karl SmithAssociate Editor Terrence Casey

HOW TO CONTRIBUTE

To contribute, send comments, letters and essays to [email protected]. 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.

Lottery Not Broken,So Why Privatize?I am disappointed in Gov. Tom Corbett for planning to outsource the management of the Pennsylvania Lottery to a company from a foreign country. I don’t think the lottery department should have broad authority to do this. A 20- to 30-year management contract is unreal. No one knows how long people will continue to spend money on the lottery.

Right now, we have Pennsylvania workers doing a good job for our lottery. Why change?

AGNES PELCHER, POST-GAZETTE.COM, 15 JANUARY 2013

Review All CityServices, ExpendituresAs part of the Actual Value Initiative, I propose that we comprehensively review city services. Automatic funding increases are no longer tenable in an environment in which revenue sources are declining and tax rates are on the rise. Zero-based budgeting, in which each department provides a line-by-line justification of its annual budget, has been adopted at the state level and elsewhere. It should be in place here, too.

PHILADELPHIA COUNCILMAN JIM KENNEYON PHILLY.COM, 15 JANUARY 2013

President Must Avoid ‘Lame Duck’ BaggageAs President Obama begins his second term in office, he must confront the conventional wisdom that most second terms are unproductive because the administration gets tired, the first team begins to depart, and the media and the political opposition labels you as a “Lame Duck!”

The President cannot let that happen. There are simply too many vital challenges the country must meet head on that simply can’t be deferred for four years.

ED RENDELL, PENNSLIVE.COM, 14 JANUARY 2013

COMMENTARY FROM ACROSS THE WEB

@terrymadonna

Since Camelot owned by a pension fund. Should Pa public pension funds run lottery - - solve pensionproblem, keep unions, raise revenue? Hmm. 14 JANUARY 2013

OPINION


BY THE NUMBERS

39Average number of

Republicans in the U.S. Senate that voted to

increase the debt ceiling during George W. Bush’s

tenure.

1Average number of

Republicans in the U.S. Senate that voted to

increase the debt ceiling during Barack Obama’s

tenure.

2.2Average number of trips

consumers made to a supermarket each week.

16Consecutive years that Wegmans Food Markets

has made the Forbes list of the top 100 places to work. The company ranked fifth

in the list to be published in the February 4 edition of the

magazine.

After a protracted work stoppage, the NHL opens

its season Saturday.

$336MValue of the Philadelphia

Flyers franchise as calculated by Forbes.com.

$150MPrice paid by Comcast

Spectacor for the franchise in 1996.

$140MAmount paid by the NHL to

acquire thePhoenix franchise out of

bankruptcy in 2009.

$67Average price of a

Philadelphia Flyers ticket, which ranks fifth-highest

in the league, according to Forbes.com.

63,000Average number of

households that watch the Flyers on CSN Philadelphia, the fifth-highest total in the NHL according to Forbes.

2Stanley Cup championships

won by the Philadelphia Flyers. The Flyers lost in the

finals four times.

27,436,000Total page views for VisitPhilly.com and uwishunu.com, two websites operated by the Greater

Philadelphia Tourism Marketing Corporation to promote tourism in the Philadelphia region.

94%Percentage of

uwishunu.com users who said they attended an

attraction or event featured on the website.

101.2%Increase in the number of

visits to VisitPhilly.com and uwishunu.com

from2010 to 2012.The two sites generated more than 8.5 million visits in 2012.

1Rank of visitphilly.com in terms of the most-visited

destination websites among the 10 largest cities in the U.S.

41,000Approximate retweets of

GPTMC in 2012.

40,004Approximate number of

VisitPhilly.com followers on Twitter.

169,000Number of times people watched videos on Visit Philly’s You Tube channel in 2012. Uwishunu’s “Philly 101” series

featured 101 new videos in 101 days.

93,363Number of visits to VisitPhilly.com, from Canada in 2012. More than a half-million visits came from 213 countries.

727%Increase in mobile traffic to VisitPhilly.com from 2010 to 2012.

Last year, about 26% of traffic came from mobile devices.

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region's business 17 january 2013

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