COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEES ON PARKS, RECREATION AND CULTURAL AFFAIRS AND COMMERCE AND ECONOMIC DEVELOPMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Wednesday, May 7, 2008 1:05 p.m. - - - PRESENT: COUNCILWOMAN BLONDELL REYNOLDS BROWN, CHAIR COUNCILMAN DARRELL L. CLARKE COUNCILMAN FRANK DiCICCO COUNCILMAN W. WILSON GOODE, JR. COUNCILMAN CURTIS JONES, JR. RESOLUTION 080337 - Resolution authorizing the Committee on Parks, Recreation and Cultural Affairs and the Committee on Commerce and Economic Development to hold joint hearings regarding Philadelphia's Creative Economy... - - - V A R A L L O Incorporated Litigation Support Services Eleven Penn Center 1835 Market Street, Suite 600 Philadelphia, Pennsylvania 19103 215.561.2220 215.567.2670 2
Good afternoon, everyone. The City Council Committees on Parks, Recreation and Cultural Affairs and the Committee on Commerce and Economic Development chaired by my colleague, Councilman Wilson Goode, are now in a public hearing to hear testimony on Resolution No. 080337. Joining us today are Vice-Chair of the City Council Committee on Parks, Recreation and Cultural Affairs, Councilman Curtis Jones. I will now ask the Clerk to please read the title of Resolution No. 16 080337.
A resolution 18 authorizing the Committee on Parks, Recreation and Cultural Affairs and the Committee on Commerce and Economic Development to hold joint hearings regarding Philadelphia's Creative Economy, with a focus on young professionals ages to 34, and to 25 explore potential methods and strategies 3 5/7/08 - PARKS & COMMERCE - RES. 080337 to retain this demographic for the future of Philadelphia's economic growth.
Thank you very, very much. By way of opening remarks, I join the many in our city who clearly recognize that this new phenomena, some might call it, known as the creative economy is a potentially -- for sure an important source, but potentially a great opportunity for innovation and growth for our region and, of course, for future generations, because ultimately it's not about us, it's about getting that next generation of young people, professionals, that we want to hold on to once they leave the more than 88 higher ed universities in the area. And there's a lot of research that's already been done that we're going to hear about today that tells us that this knowledge industry does have potentially incredible growth ready for us. Therefore, it is both imperative and essential for us on 4 5/7/08 - PARKS & COMMERCE - RES. 080337 this side of the ledger that business, civic and public policymakers assume responsibility for overcoming what some might view as the historical differences and barriers between the City and the region and look at this new sector again as an enormous opportunity. So these hearings hopefully will help us establish how to both attract and retain young professional knowledge workers between those wonderful ages of to 34 and give us a chance to 14 think through strategically how we can 15 look to see how this group of knowledge 16 workers can be maintained and held on to 17 by the political leadership and business 18 leadership of our city. 19 With that said, we want to say 20 thank you all for coming, for the 21 interest in the area. I'm pleased to say 22 I've received a number of e-mails that 23 are very, very encouraging from 24 individuals who cannot be here today but 25 are indeed paying attention to those of 5 5/7/08 - PARKS & COMMERCE - RES. 080337 us in Council who care a lot about this issue. So with that said, any other opening comments, remarks from either of my colleagues? (No response.)
With that said, we're going to ask first for the City department that seems to be the right niche or fit for the discussion of this public policy opportunity. We want to ask Duane Bumb with the City of Philadelphia Department of Commerce to please come forward and offer us your testimony, speaking principally to the importance of the creative economy to Philadelphia. (Witness approached witness table.)
That's right. Good afternoon, Councilwoman Reynolds Brown and Chairman Goode and members of the 6 5/7/08 - PARKS & COMMERCE - RES. 080337 Council. My name is Duane Bumb. I'm the Senior Deputy Director of Commerce. Thank you for this opportunity to testify this afternoon on Philadelphia's creative economy and ways to attract and retain young professionals to fuel its growth. The creative economy indeed is an important part of the City's and region's economy and a sector that is poised to grow given Philadelphia's existing assets and potential. The City's focus on the creative economy is a sector worthy of targeted investment dates back to the Roadmap for Regional Growth study released in 2003. That study identified the region's creative economy as one of seven strategic innovation economy clusters for which Greater Philadelphia has a competitive advantage and growth potential. Since the Roadmap, Innovation Philadelphia has continued to work on better understanding and promoting our creative economy. Over the past few 7 5/7/08 - PARKS & COMMERCE - RES. 080337 years, great strides have been made in defining and understanding this sector. Through the work of the Greater Philadelphia Cultural Alliance and others, we are aware of the extensive impact of our non-profit arts and culture creative community. In addition to direct dollar impacts, the thriving non-profit side of our creative economy improves Philadelphia's quality of life and makes the City attractive to residents. In recognition of the importance of arts and culture, the Mayor announced earlier this year that he would reopen the Office of Arts and Culture and would significantly increase funding for the Cultural Fund. A separate set of opportunities exists when we look at our for-profit creative industries, and the Commerce Department believes that the potential for growth and innovation here is particularly strong. When we talk about for-profit creative industries, we are 8 5/7/08 - PARKS & COMMERCE - RES. 080337 focused on 11 discrete industries, and they are architecture, engineering and planning; communications and marketing; digital media and programming; fashion design; graphic and visual arts and multimedia design; information technology; interior and industrial design; music, film and video production; photography; product and merchandising design; software development. The Creative Footprint economic impact study released earlier this year lays out the size and potential for these for-profit creative industries within the City and region. Subsequent analysis conducted by the Commerce Department shows that the City has a comparative advantage with respect to its neighboring suburbs in many of these industries. Philadelphia's relative strengths indicate that strategic investments would directly benefit the City. Philadelphia now faces the challenge of exactly how to capitalize on 9 5/7/08 - PARKS & COMMERCE - RES. 080337 this potential. It is important to note that while many cities are talking about the power of creativity or holding conferences on the creative economy, few have actually translated the creative buzz into real economic development programs and impacts. If Philadelphia is to maintain its reputation as being a creative economy leader, we need to turn our attention and resources to developing tangible strategies and programs to support growth of specific creative industries. The Commerce Department is poised to support Philadelphia's creative economy as part of its new industry sector-based approach. Commerce is in the process of identifying strategic target industries for dedicated staffing and support. Both the non-profit and for-profit sides of Philadelphia's creative economy will receive dedicated resources and attention. Sector-based planning and staffing will allow the City 10 5/7/08 - PARKS & COMMERCE - RES. 080337 to deepen its expertise about the nature and needs of our creative industries and firms.
Through the Office of Business Services, Commerce will focus on providing services to existing creative industry firms, helping new ones get started, and targeted business attraction and expansion. Through these efforts, Commerce aims to leverage City resources as well as align the work of economic development groups, professional organizations and universities to grow the creative economy. Our ability to grow Philadelphia's creative economy depends, in part, on our success in attracting and retaining young professionals or members of the creative class, as they are often called. Mayor Nutter has consistently talked about the importance of retaining and growing this key 25-to-34-year-old knowledge worker demographic. In January, Mayor Nutter convened a Next Generation Branding 11 5/7/08 - PARKS & COMMERCE - RES. 080337 Committee of 12 young creative economy leaders to provide their insights on how to promote Philadelphia's creative communities. This group is working on a set of recommendations to be delivered to the Mayor this summer, as well as a first-person video project and website to highlight Philadelphia's creative industries and neighborhoods. This Committee's efforts are a key component of the work of the newly created Philadelphia Executive Marketing Council, which serves as an advisory group to the City Representative charged with helping to improve marketing, promotion and branding of all aspects of the City. A variety of efforts currently exist to engage and grow the young professional population. Innovation Philadelphia's Young Professionals Consortium has brought together the heads of more than 30 young professional cultural and civic groups. The Greater Philadelphia Tourism Marketing 12 5/7/08 - PARKS & COMMERCE - RES. 080337 Corporation, with support from the Pew Charitable Trusts, is exploring a potential Move to Philadelphia initiative to encourage non-residents to relocate here. A PBS documentary titled "Being Creative in Philadelphia" that makes the case for Philadelphia as a magnet for creative entrepreneurs is nearing completion. And Campus Philly continues to expand its successful efforts to engage and retain graduates from area colleges and universities. All of these are promising efforts that can contribute to growing our young professional population. The Commerce Department is in the process of evaluating the best use of limited City resources to help us achieve the goal of expanding our population by 75,000 residents by 2018. Potential young professional efforts that Commerce thinks are particularly promising include targeted marketing campaigns in feeder markets such as New York City and Boston; 13 5/7/08 - PARKS & COMMERCE - RES. 080337 a boomeranger strategy to encourage former residents and area alumni to come back and live here; promoting quality education options and School District progress to young families; and a targeted campaign to promote the breadth and depth of economic opportunities in Philadelphia's knowledge industries to young professionals here and elsewhere. The Commerce Department concludes by emphasizing that while creative class amenities such as arts and culture and green space are important to young professionals, research and anecdotes indicate that a lack of job and career opportunities, real or perceived, is Philadelphia's single greatest barrier to expanding its young professional population. Many young graduates and young professionals are drawn to Philadelphia as a place to live, but stall around a job search. This is, in part, attributable to sluggish job growth across many of our knowledge industries. 14 5/7/08 - PARKS & COMMERCE - RES. 080337 However, it is also the case that perceptions of Philadelphia's economy and landscape of economic opportunity are often either inaccurate or incomplete.
This suggests that a significant opportunity lies in better promoting the range of career paths that do exist locally and providing improved job connections and networking opportunities for young professionals. The Commerce Department will work to identify these career paths as part of our continuing efforts to realize the full potential of the creative economy. Thank you for your consideration of this important issue today. I know there are a lot of other people here to sort of talk behind me, but I'd be happy to answer questions now or later.
Okay. Thank you for your testimony, and encouraged to hear that already the Administration has taken a very 15 5/7/08 - PARKS & COMMERCE - RES. 080337 aggressive, proactive role in getting its arms around this new industry. Please speak to, if you could, any details that may exist with regard to your statement on the top of where you state that dedicated resources and attention, that both the non-profit and for-profit sides of the Philadelphia creative economy will receive dedicated resources and attention. Where is that on the radar screen in the Department of Commerce?
There I'm actually talking pretty specifically about staffing resources where -- and we've certainly come to you through our budget process and even in some of the subsequent hearings we've had here on various initiatives to explain that we are sort of reorganizing and realigning the resources within Commerce, and part of that is within this newly created Office of Business Services as a way to sort of streamline helping businesses, 16 5/7/08 - PARKS & COMMERCE - RES. 080337 both new and existing businesses, to grow in the City to help business start-up. But we're also -- we've also identified that we need to do some sector-based work here where we really need to have in-house experts in certain fields, and we've already identified the creative economy as one of those broad areas where there's tremendous growth potential where we are going to want to have experts sitting within our own department to help coordinate and facilitate that growth.
So the abbreviated answer to that is, yes, the Department of Commerce has made a commitment to ID staff who will be principally responsible for this new sector?
Please let us welcome Councilman Frank DiCicco, also a member of the Committee on Commerce and Economic Development. Councilman Jones. 17 5/7/08 - PARKS & COMMERCE - RES. 080337
I think you need to change your job description. You testify more from City Commerce --
I mean, it's just amazing, I hear from you so much. But it's always a pleasure to hear from you and always informative. I have a couple of questions in reference to the creative economy directed around where will they or do they live, where do they work, where do they play and almost where do they send their kids to school, which are, in my opinion, critical issues as it relates to recruiting, retaining professional staff. Has there been some thought of -- and I lead with this question of clusters of where people live, work, play and from similar backgrounds and industries. Has there been some planning and thought given to that?
Well, as we are sort 18 5/7/08 - PARKS & COMMERCE - RES. 080337 of getting a better handle on in fact what are the sort of appropriate components to the creative economy, it's a little bit of a work in progress. I would tell you that, generally speaking, this is a broad area that has relatively low barriers to employment; which is to say, you can start -- in a truly creative economy, if you want to do it, you can start your own business and that that -- sort of a little bit unlike a hearing we had just a few days ago about the Green Job Corps where in fact we were sort of saying how do we assist people to get jobs who have relatively high barriers to employment, in this particular case we are talking about people who have low barriers, who have skillsets. They can be anywhere within the City or the region. They have the ability in many cases to be working in a live/work situation. So it's not necessarily even going to the place of work. Sometimes that is where you live. 19 5/7/08 - PARKS & COMMERCE - RES. 080337 So, again, we talked -- I mentioned that there are broad sectors 4 that we've been focusing on, but they 5 cover such a broad cross-section of 6 opportunity in our city that some of 7 those are what we think of as traditional 8 jobs that sort of sit within the 9 commercial setting. So our central 10 business district will have a 11 concentration of those, but others in fact sort of follow where people live and/or are clustered in different ways. So certainly with our universities, they are clustered with our universities, and those are also spread through our city. So there's no --
There's no one place. And I think we have to think in terms of a very flexible, broad-ranging strategy to address all those pieces.
I draw the example from cities like Pittsburgh, 20 5/7/08 - PARKS & COMMERCE - RES. 080337 which specifically when I went there on other business directed me to a section 4 of town that was dedicated to a creative economy and that very much where the techies and the creative types were locating both their businesses and also connecting to their residents, and then because of their demographic, because of their specific demographic, they had a high interest in where they played. So kind of putting those three elements together, it kind of created a magnet, working with the universities and the private sector to try to attract and in fact recruit people to those areas and direct them to those areas for various opportunities. So I was thinking if in fact the City of Philadelphia is thinking along those lines and whether we were trying to have a concerted effort. Because no matter what industry, one of the big things I hear is, where will I send my children, if I decide to have 21 5/7/08 - PARKS & COMMERCE - RES. 080337 them, to school. So kind of in a where do we work, where do we play, where do we live concept, direct people into a quality of life that they want. And if in fact these are high-end jobs -- and I'm imagining from everything that I've read thus far they can be high-end jobs. So I mean, are --
There's great opportunity for upward mobility within this broad sector. But I think you point out what we know far beyond just the creative economy. It's across all sort of sectors of our economy, how critically important the quality of education is to the success of the City as a place to do business and to live, and sort of secondarily, the quality of housing stock and the choices that people have in a broad variety of neighborhoods. Really, one of the great attractions to Philadelphia is the broad sort of variety of choices that one has 22 5/7/08 - PARKS & COMMERCE - RES. 080337 here of all types of housing stock and locations, whether it's in a historic sort of row house sort of neighborhood or whether it's a new high rise or whether it's on the waterfront or adjacent to a park setting. We've got a lot of choices here and a lot of unique vibrant neighborhoods for people to choose from.
Have we looked at any analysis to say what does the creative economy, what does it represent by way of tax to the City of Philadelphia today? Have we measured or tried to segregate that out?
Well, I think, not to sort of take the thunder from some of the people who are going to follow me here, certainly the analysis has been done last year on the non-profit side. I think you're going to hear more about that in testimony where they sort of wanted to map out for you that even when we, say, serve non-profit or sort of these cultural institutions, that in fact 23 5/7/08 - PARKS & COMMERCE - RES. 080337 they have real economic impact, and they've measured that, and you'll hear on the Creative Footprint study that I think Kelly Lee will be talking about sort of how the sort of indicators of what that impact are as well. Yeah, so we started that process to quantify those. Again, all that is part of what tells us why this is a sector of our economy that has real opportunity and growth potential.
You're welcome. At the top of of your testimony, you talk about a PBS documentary being created in Philadelphia. Who is doing that?
Let me turn to somebody here to get that answer. I think one of your --
Someone else will speak to that? 24 5/7/08 - PARKS & COMMERCE - RES. 080337
Harry Wiland, and it sounds like two of the speakers behind me here.
I'll ask Ms. Amsterdam to give us background on that when she comes forward. Any other questions from members of the Committee? Councilman Goode.
Thank you for your testimony. In your testimony you say few cities have actually translated the creative buzz into real economic development programs and impacts, but could you talk about some other model cities and what they are doing in terms of the creative economy, particularly if there is one particular model city, what they have done to spur the type of 25 5/7/08 - PARKS & COMMERCE - RES. 080337 activity.
I think that there are a lot of sort of small examples in a lot of cities around the country. There is certainly examples of initiatives in sort of what we see as the benchmark cities that we compare ourselves to the on the East Coast, Boston and New York and Washington, that have provided some of this. And then -- but the sort of idea that we sort of are focusing on a citywide and in fact on a regional sort of approach to this targeted industry, I think -- I'm not sure that I could sort of point to a good example. I'm not sure -- I think that we are sort of on the cutting edge of some of that.
I'm clear that Philadelphia is a leader in trying to establish itself as a leader. I'm wondering, though, are there other models and is there one particular model that you might point to in terms of a city that is known for having done this and 5/7/08 - PARKS & COMMERCE - RES. 080337 seize that opportunity?
Are you aware of any cities that have used tax incentives and/or actually tax reform, restructuring of the taxes particularly to attract people into that creative economy environment?
There certainly are a lot of -- people have used tax incentives for some of the components that we've talked about here of what we think as creative economy, and, in fact, I think about that because we've been doing some analysis ourselves right now totally separate from this to attract the film industry here and have looked, for example, at other sort of cities. That's just one subset of this, but, actually, I don't know that there is any one sort of tax incentive for what I'd call the creative economy. Again, it is such a broad sort of amalgamation of 27 5/7/08 - PARKS & COMMERCE - RES. 080337 sectors that we're putting together.
Or in terms of attracting knowledge industry companies. For instance, particularly in terms of trying to retain the talent that's being cultivated here, trying to encourage them in terms of knowledge industry, entrepreneurship, would you agree that the fact that Philadelphia has a gross receipts tax is probably definitely an impediment to that and everything else we might do and hear about today will strongly impede our progress if we retain a gross receipts tax long term?
I do agree with that, and I think that certain sort of industry sectors are impacted much more negatively than others by the existing tax structure, and this would be one of those that I think we have to be very careful to make sure if we are looking to sort of grow this, that we don't shoot ourselves in the foot by having a tax 28 5/7/08 - PARKS & COMMERCE - RES. 080337 structure in place that in fact wouldn't allow a business to sort of flourish here in the knowledge industries.
Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Madam Chair.
You're welcome. COUNCILMAN DiCICCO: Good afternoon, Mr. Bumb.
Good afternoon. COUNCILMAN DiCICCO: Several years ago -- actually, it was my first term -- during the Rendell Administration, I had convened some discussions or hearings on something very similar about how to retain young people, keep them in the City. People come here to get an education and they ultimately leave, and that's obviously what this discussion is still about. 29 5/7/08 - PARKS & COMMERCE - RES. 080337
Yes. COUNCILMAN DiCICCO: We had formed an organization. I don't recall the name of it. I think it was being run through the City Rep's Office at the time, and there was some discussion that I had laid out and it kind of piggybacks on what Councilman Goode was just talking about, and I'll just take the area of education as an example. I'm not sure what the current climate is with the educational system in retaining teachers, as an example. I know back in the '90s and the early 2000, 2001, we were having difficulty keeping teachers or encouraging people who were in the educational field to come to Philadelphia and stay, and I had talked about a program, and I don't know if we can do it, if it falls outside the scope of -- the boundaries of the uniformity or tax issues, but what I was talking about was kind of creating a situation similar to what the military does. The military 30 5/7/08 - PARKS & COMMERCE - RES. 080337 says if you join and stay with us for three years, as an example, we will give you a college education, provided at the end of that period of your education you have to continue to stay for another two or three years. And I was just looking at that time to see if there was some way in which we can incentivize people by offering, either by way of scholarships or even in the area of housing, some sort of tax credit or some way of offsetting their college loans, if they had loans, by offering them a similar thing. If you go to the University of Pennsylvania, you go to Drexel, wherever it is, and you have a degree in education, stay in Philadelphia, because we're going to actually help you become a first-time homeowner, but in return for that, either again the tax credit or some sort of low-interest loan to get into the first-time home, you would have to sign a contract that says basically you have to stay within the City of Philadelphia 31 5/7/08 - PARKS & COMMERCE - RES. 080337 educational system for a certain amount of time. And the thought I had then was if somebody stays six, seven, eight years, it is more likely that they would stay. They're not going to use it as a tool just to get some financial support to offset their educational debts and then leave. It's kind of almost like the ten-year tax abatement, when you think about it. We're offering people an opportunity to come by foregoing a certain portion of their real estate tax for ten years, with the hope that at the end of the ten years, they're going to stick around, they'll become permanent employees, and then the next group that comes in, you start to repopulate. I don't remember if you were part of those discussions. I'm not sure. But is there any thought being given to that kind of incentive that would give people an opportunity to stick around, not only because it's a great city and we 32 5/7/08 - PARKS & COMMERCE - RES. 080337 have a city of neighborhoods and all kinds of housing opportunities, but how do we get them into a house in the first place, especially people coming out of college?
Well, there are a couple of things. One is, I also have some -- I was involved several years back -- and I think it's the same period you were talking about -- with the School District when it was looking to attract additional teachers. There was a tremendous need for new teachers. COUNCILMAN DiCICCO: That's all part of that same time period.
And for that, there was very much a discussion about could the School District sort of structure an incentive package that in fact helped either sort of bring people in with the promise of either front-loading and paying for tuition or repaying student loans as part of a commitment to sort of stay here for a certain period of time, 33 5/7/08 - PARKS & COMMERCE - RES. 080337 and I don't know sort of what the ultimate result of that effort was. There certainly are challenges that we'd have to sort of work through with the uniformity sort of clause and how that sort of applies here. One of the things that certainly we have been sort of working with is employer-assisted housing, where it is more often than not first-time home buyers. And the best examples in Philadelphia are university based -- a university, which in fact has a vested interest in the neighborhood within which it sort of is the major employer. Penn was the first to do that and now others are following that suit. And we're having discussions with other key employers in the same sort of way. It's one way to sort of reduce -- incentivize people. It requires a certain sort of commitment and time to that employer, generally speaking, to get a loan, to get them referred to a grant. We've actually, I know, had discussions 34 5/7/08 - PARKS & COMMERCE - RES. 080337 about could we be doing that for City service as well as we sort of look to sort of attract people into the public sector. But, yeah, I'm happy to look into that more for you. COUNCILMAN DiCICCO: Thank you.
You're welcome, Councilman DiCicco. Final question, in your testimony it indicates that Mayor Nutter expects to release recommendations at the end of the summer. What is the end window when the Department of Commerce will finish its reorganization and seek to ID a professional who will wrap their arms around this creative economy sector?
And I think what you're referring to in my testimony was, I think, specific to --
Mayor Nutter. 35 5/7/08 - PARKS & COMMERCE - RES. 080337
And we'll be working closely with the City Rep's Office on that, which will take the lead in all City branding, how do we hold ourselves out to the public. The sort of implementation of the sort of new organization within the Commerce Department and the separation of Commerce and City Rep and clearly defining those duties and how we will coordinate in the future, we are very well along in those discussions, and before the end of this fiscal year, before we get into the summer, we will have fully -- I expect we will have fully implemented that reorganization.
Very well. Well, thank you very much for your testimony.
Please, if 36 5/7/08 - PARKS & COMMERCE - RES. 080337 we could invite Peggy Amsterdam, the leadership, Executive Director at the Greater Philadelphia Cultural Alliance, who will, as my prep notes reflect, speak to the economic impact of non-profit arts and culture. (Witness approached witness table.)
Good afternoon, Councilman Reynolds Brown and members of the Committee. I'm Peggy Amsterdam, the President of the Greater Philadelphia Cultural Alliance, and on behalf of our Board, staff and 375 members, I want to thank you for the opportunity to present testimony today. So we're here this afternoon to talk about the creative economy. It's a subject of best-selling business books, the next generation of job development, 37 5/7/08 - PARKS & COMMERCE - RES. 080337 and of many cities' revitalization efforts, but what does that mean to Philadelphia? First, you should know that it's not something that we need to build from the bottom up. The creative economy here is already a critical asset in our region. In fact, Greater Philadelphia is one of the few areas across the country that has laid substantial creative economy groundwork within its borders. Given the breadth and depth of our cultural sector, our outstanding network of colleges and universities and our ideal location on the Northeast corridor, we are a region that is primed for success in the creative economy. Our potential, if properly developed, could put us far ahead of the competition in the global quest for residents, jobs and economic growth in the coming decades. Other cities are working hard to build what Philadelphia already has. From Phoenix, Arizona to Des Moines, Iowa 38 5/7/08 - PARKS & COMMERCE - RES. 080337 to Burlington, Vermont, the creative economy is a major focus of economic development planning, but those cities are just starting to build a creative economy, whereas Philadelphia already has one. All we lack is a coordinated, financially supported plan to build on the potential of our existing infrastructure. And what exactly is this potential? 3 billion in total expenditures, generating 40,000 jobs and nearly $160 million in state and local tax revenues. Every dollar invested in this sector returns $5 to local government. And that's just the start. Americans for the Arts produces a comprehensive study of creative industries in this country's 50 largest cities. I've included a copy of the full report for you with my testimony today. 39 5/7/08 - PARKS & COMMERCE - RES. 080337 In it, Philadelphia ranks 6th in total population, 11th and growing in the total number of arts businesses, but 42nd in the number of arts businesses per capita. We have a solid base, but clearly we also have plenty of room to grow. The region is also doing a good job of producing college graduates trained in creative economy skillsets. A study from Philadelphia's own Knowledge Industry Partnership revealed that this region is sixth in the nation in terms of the number of visual and performing arts graduates it generates. Sixth in the nation. That's something we need to do a better job of capitalizing on. The creative economy is already attracting businesses to our region, too. Every year the Greater Philadelphia Chamber of Commerce releases an economic outlook survey, and every year the region's arts and cultural amenities are rated as one of the top three reasons why businesses choose to locate here. 40 5/7/08 - PARKS & COMMERCE - RES. 080337 Finally, consider these headlines from a new study by the Delaware Valley Regional Planning Commission. When asked what they like most about the region, 58 percent of people surveyed said it's our numerous cultural and historic sites. It was the number one answer, ranking more than ten percentage points higher than any other. In the same survey, an overwhelming number of respondents said that future regional development efforts should be directed toward the region's existing core cities like Philadelphia and Trenton and older, first-generation suburbs such as Lansdale and Haddonfield. So the data are there, and they support the theory that the creative economy could be a big part of Philadelphia's landscape. But does all of this theory actually work in practice? Does anyone really stay in or move to a city because of its creative presence?
The answer is a resounding yes, and 41 5/7/08 - PARKS & COMMERCE - RES. 080337 here's just one quick example. Over the past year, the Cultural Alliance has created two new staff positions. Both of those positions are now occupied by wonderful young adults who are not Philadelphia natives, but were attracted here by the low cost of living, the high quality of life and the opportunity to build a career by putting their skills to work in the creative sector. Now that you know that the potential is here, what can we do to start up this engine? So here are a few recommendations. Number one, support policies that make it easier for small businesses to operate in our city. Our tax system is still incredibly burdensome for new emerging entrepreneurial businesses. Councilwoman Reynolds Brown's recently proposed revision to the business privilege tax are a good start, but much work remains to be done in this area. 42 5/7/08 - PARKS & COMMERCE - RES. 080337 Number two, provide opportunities for creative workers to live and work in a great urban environment by establishing work zones with special tax incentives and support for creative workers. Artists will come into a neighborhood, help to fix it up and create a 24/7 atmosphere that attracts people. And you asked about other cities. One example off the top of my head that I saw just transform a city was in Providence, Rhode Island, and it was Mayor Buddy Cianci who set aside an area that needed to be developed for artists. He made it a tax-free area for artists and he said, artists aren't making a lot of money anyway, we might as well give them the tax-free status, and that whole neighborhood just turned over in a couple of years. I don't know how long it took, but it was amazing. And, of course, areas like Soho happened by themselves a long time ago, but any time you can get a 43 5/7/08 - PARKS & COMMERCE - RES. 080337 group of artists into an area, they'll fix it up and they'll bring it alive. Number three, work with regional organizations who promote Greater Philadelphia to new residents and businesses, places like GPTMC or Select Greater Philadelphia, and enable them to keep creative companies and amenities at the forefront of their professional agendas. Four, support research efforts that prove the value of the creative sector to the region and identify gaps and opportunities for building on the infrastructure we already have. Five, invest in creative economy jobs. Mayor Nutter's proposed $2 million increase to the Philadelphia Cultural Fund does just that, as it provides general operating support to the non-profit cultural organizations. That type of funding allows these businesses to invest in what they need to better serve the local community, staff 44 5/7/08 - PARKS & COMMERCE - RES. 080337 included. I also want to comment on -- Councilman DiCicco, you mentioned incentives to keep people here, and there is a national organization forming that's looking into creating a music corps that's something very similar like Teach America, where recent graduates in the music programs would go and teach music in inner city schools or schools across the country. So I have been invited. The Aspen Institute had a meeting, and I think that is moving forward, but it's certainly something that we may be able to do here. The cultural sector is prepared to do its part in growing our creative economy as well. I invite you all to join me tomorrow night at The Hub at Cira Centre as the Cultural Alliance launches Engage 2020, a new effort designed to dramatically increase cultural participation in the region, supported by generous grants from the Pew Charitable 45 5/7/08 - PARKS & COMMERCE - RES. 080337 Trusts and the Wallace Foundation. So thank you for inviting me here today to present this information. As you consider your next steps, please know that the Cultural Alliance stands ready to work with the City and the region to further strengthen one of our greatest potential assets.
Well, thank you for your testimony. The time for tomorrow night?
Five o'clock at The Hub at the Cira Centre. I know that your staff is attending. I know David Forde is planning on attending, but anybody else who wants to come, just let me know.
Secondly, could you provide to the Chair any background information you might have on the Providence, Rhode Island model?
I can get it for you, certainly. 46 5/7/08 - PARKS & COMMERCE - RES. 080337
Is the Cultural Alliance working with any organizations in the City specifically around the issue of the creative economy?
Well, we work very closely with Kelly Lee and Innovation Philadelphia and, of course, Kelly and I and several of the other people who are testifying were involved in the original Roadmap where it identified the creative economy as a potential area for growth. That was, what, four years ago with the Chamber of Commerce and Innovation Philadelphia.
So with that, have you identified any next tangible action steps? We've done the research. We have the recommendations, and what next?
Thank you. And 47 5/7/08 - PARKS & COMMERCE - RES. 080337 I leave you some bubble pens from Philly Fun Guide.
Very nice. Let's invite up the next panel. Kelly Lee with Innovation Philadelphia and Patricia Smith with the Reinvestment Fund and Mark Stern of the University of Pennsylvania Social Impacts on the Arts Project. Following this panel will be the creative industry entrepreneurism, Matthew Fisher with the Night Kitchen Interactive and David Brown of Brown Partners. You'll be the next panel up. (Witnesses approached witness table.)
Forgive me. I did have a question for Ms. Amsterdam, and maybe Councilman Frank DiCicco can answer this point of information. Is there not legislation in 48 5/7/08 - PARKS & COMMERCE - RES. 080337 Harrisburg up for consideration to incentivize the film industry working closely with the Philadelphia Film Office? COUNCILMAN DiCICCO: We have something in the works, something with a tax credit.
Tax credit. Very well. Thank you. Welcome and please proceed with your testimony, starting with Kelly Lee of Innovation Philadelphia.
Good afternoon. I'm Kelly Lee, Executive Vice-President of Innovation Philadelphia, and I would like to thank Councilwoman Blondell Reynolds Brown and Councilman Wilson Goode for holding this joint hearing and also giving Innovation Philadelphia the opportunity to provide testimony. Many regions and cities are focusing on strengthening their creative industries as a means of economic growth. Philadelphia has a unique advantage of 49 5/7/08 - PARKS & COMMERCE - RES. 080337 having the assets needed to successfully make its creative industries an economic anchor, much like the life sciences and hospitality industries in the Greater Philadelphia region. Innovation Philadelphia first began studying the creative economy in 2002 when we partnered with the Greater Philadelphia Chamber of Commerce to do an asset map of the Philadelphia region. Together, we produced a report, which Duane Bumb referred to, as did Peggy Amsterdam, called the Regional Roadmap for Growth. This Roadmap first identified the creative community as a target of opportunity for economic growth. Since the Roadmap was released, Innovation Philadelphia has developed programs and strategies targeting the creative industries, specifically the for-profit technology-driven creative industries. The purpose of my testimony this afternoon is threefold. First, I 50 5/7/08 - PARKS & COMMERCE - RES. 080337 want to validate the enormous impact of the for-profit creative economy. Second, I want to prove that it is a growing industry and has the potential to have even greater economic growth on the City of Philadelphia, and also demonstrate that the creative economy is a smart priority for economic investment by the City of Philadelphia. Such investment will offer economic benefits in the form of new jobs, new businesses and will attract the type of young professional talent vital to economic growth. You just heard Peggy talk about the economic impact of the non-profit creative industries. Innovation Philadelphia, like I said before, we are focused just on the for-profit side, and those industry sectors -- you have the list in front of you, so I won't read them, but it's industries that are driven by technology, such as architecture and engineering, digital media and programming, information technology, 51 5/7/08 - PARKS & COMMERCE - RES. 080337 music, film and video production, software development, et cetera. Following the Cultural Alliance's model, we realize the first thing that we needed to do was to study the economic impact of the for-profit creative industries so that we would not only have the accurate size and scope of these industries, but then we would also have a benchmark in which to measure its future growth. Innovation Philadelphia in January released the findings -- and you have it in your packet -- this report called the Creative Footprint that measures the size and scope of the for-profit creative industries. The highlights in the report demonstrate that the for-profit creative industry is a huge economic generator for the City and for the region. 5 billion in total earnings. 52 5/7/08 - PARKS & COMMERCE - RES. 080337 Now, that's a regional number. 4 billion is in the City of Philadelphia. 5 billion in total earnings, 4 billion is earned in Philadelphia. And of the 766,000 jobs, 92,000 are in Philadelphia. The for-profit creative industry is also a considerable source of state and local taxes. 2 billion in taxes. Six hundred and forty million goes to the Commonwealth of Pennsylvania and $320 million a year goes to the City of Philadelphia. We're also talking about high-paying, high-value jobs. The average annual wages for for-profit creative industry workers is $61,600 a year. That's 45 percent higher than non-creative industries, whose average salary is $43,000 a year. The for-profit creative 53 5/7/08 - PARKS & COMMERCE - RES. 080337 industry is also growing. 1 percent.
The for-profit creative industries is also a source of enormous entrepreneurial activity in the region. Nearly percent of all creative 11 industry employment are self-employed 12 workers, making up 36,500 self-employed workers, and many of these self-employed are young entrepreneurs which you will be hearing from later on this afternoon. The for-profit creative industries is also four percent higher in Philadelphia than the national average. In particular, digital media and programming and software development are two of the highest industry sectors in the Philadelphia region. And also in comparison to our peer regions, in the Creative Footprint, we did compare ourselves to other cities that have 54 5/7/08 - PARKS & COMMERCE - RES. 080337 economic development strategies that are focusing on their creative economies. So we compared ourselves to Austin, Boston, Denver, Phoenix, Seattle and Tampa, and when you look at Philadelphia in comparison to these peer regions, we were ranked first in earnings and second in average wages. Philadelphia also has a pool of talent to fuel the for-profit creative industries. As you know, the Philadelphia region has a wealth of colleges and universities, about 85 of them. We give out 55,700 degrees a year. Of those, 11,000 degrees are awarded in creative occupations, and half of those are directly within colleges and universities in Philadelphia. In Creative Footprint, we also measured the minority and female ownership and participation in the creative industries. 6 percent of all creative 55 5/7/08 - PARKS & COMMERCE - RES. 6 percent are female-owned and percent are 4 minority-owned. 5 We find that one of the most 6 interesting things about focusing on the creative industries is that those numbers that I just gave to you are just measuring the creative industries in the region and in Philadelphia, but if you look at creative industry workers, they fuel all industry sectors. So, of course, if you go into a creative industry employer like a Comcast or Electronic, Inc. or Brown Partners, those are creative industry workers, but if you go into any company, an Aramark, an Independence Blue Cross, they all have IT workers, website designers, marketing and communications professionals. So whatever the City does to increase the amount of creative talent in jobs in the region with any creative industries, we will be impacting all industry growth throughout the region. 56 5/7/08 - PARKS & COMMERCE - RES. 080337 So now what can the City do to realize this potential and grow the creative economy? First and foremost, branding is essential. Branding Philadelphia as a creative destination will attract businesses, attract these young educated creative workers and job opportunities for existing creative industry businesses in the region. 5 million media impressions about Philadelphia's creative economy. We've also been participating in a number of conferences and seminars showcasing Philadelphia's creative economy strategy. Also, internal branding within the region is also very important to grow the creative economies. There is still that perception of our more traditional businesses that they have to go outside of the region in order to attract sort of quality creative services. Whatever we 57 5/7/08 - PARKS & COMMERCE - RES. 080337 can do to brand the creative talent, a lot of them which are in this room today, to businesses within the region will provide them with more opportunities in which to grow their business. The third is exploring sort of special incentives and funding opportunities to help fuel the creative industry businesses, whether or not these are special zoning programs that we can develop to make it easier for our creative industry entrepreneurs who do work and live within the same space, to make it easier for them to do that, modeling programs after what's happening in Austin. They just announced a big creative corridor that has film and music industries all in one designated location.
Or whether or not we look at existing programs, like our Keystone Innovation Zones and explore the opportunity of doing a KIZ program for the creative industries in Philadelphia. These are the types of things that the 58 5/7/08 - PARKS & COMMERCE - RES. 080337 City and the State and organizations like Innovation Philadelphia, the Commerce Department, the Cultural Alliance can explore in order to attract and build some of those resources here in Philadelphia. S. that's specifically targeting the growth of the for-profit creative industries. You have information in your packet about the Creative Economy Investment Fund in which we invest between 25,000 and 100,000 in start-up, early-stage creative industry companies within Philadelphia, and on May 22nd, we will actually be announcing the first three recipients of awards for the Creative Economy Investment Fund. Increase minority and women entrepreneurism within Philadelphia. IP has had several programs and initiatives specifically targeting minority and women entrepreneurs, everything ranging from 59 5/7/08 - PARKS & COMMERCE - RES. 080337 supporting the Black Lily Film Festival that's focusing on minorities and women in film and music production and also sort of doing workshops and panels in partnership with Urban Philly. The other thing that we can do is connect creative workers with creative employment opportunities. IP will be launching in September a job site in partnership with the Philly Creative Guide specifically helping creative industry workers to find out only full and part-time jobs, but also free-lance projects that exist here within Philadelphia. We've also held the first creative industry career fair last September. It's now going to become an annual event, where we, again, are sort of linking sort of creative workers with creative job opportunities within Philadelphia and within the region. We will also be hosting this fall the first free-lance entrepreneurial 60 5/7/08 - PARKS & COMMERCE - RES. 080337 fair called the Creative Marketplace. This will provide small businessowners and creative free-lancers with an opportunity to develop more business opportunities with companies within Philadelphia. I won't go through all of the recommendations, but I think the most important one here is designating a creative economy institutional driver. There are a lot of organizations that are now focused on the creative economy, I think a lot of it as a result of the work that Innovation Philadelphia has been doing since 2002. It's definitely becoming a priority with this current Administration. But I think that we have all proven, the Cultural Alliance, myself, I think you're going to hear from a lot of other great testimony, that this is worthy of the City's further exploration, the City's further investment in order to support these organizations, whose sole purpose is to 61 5/7/08 - PARKS & COMMERCE - RES. 080337 grow the creative economy in Philadelphia. Thank you and I will welcome any questions.
We will hear from the entire panel and then we will move to Q and A.
Good afternoon, members of the Committees on Commerce and Economic Development and Parks, Recreation and Cultural Affairs. My name is Patricia Smith and I'm Director of Special Initiatives at the Reinvestment Fund. Councilman Goode and Councilwoman Reynolds Brown, I applaud your leadership in organizing these hearings to learn more about the impact of creative industries on City of Philadelphia, how they impact on business development and how they are a magnet for attracting and retaining young professional and educated workers. Serving the Midatlantic region, 62 5/7/08 - PARKS & COMMERCE - RES. 080337 the Reinvestment Fund provides financing and high-quality data and information to support a wealth-building strategy. We pursue both people and place-based strategies, and our work has resulted in financing of affordable housing, supermarkets, daycare centers, charter schools and other business enterprise for more than years. 11 The creative sector, with its 12 range of content-rich industries, has a 13 significant import for cities struggling 14 to define post-industrial relevance. 15 Yet, we implore that a more and expansive 16 view also be taken of how creative 17 activity, particularly what we call 18 community-based arts and culture, 19 interacts within cities in our 20 neighborhoods and how we can stimulate a broader and more integrated policy discussion and take more effective action and redevelopment of distressed places. Over the past year and a half, TRF, in collaboration with the Social 63 5/7/08 - PARKS & COMMERCE - RES. 080337 Impact of the Arts Project of the University of Pennsylvania, has been examining the ways that creative activity, specifically community-based arts and culture, can play a role in revitalization of post-industrial cities and neighborhoods. One outcome of this collaboration is the monograph Creativity and Neighborhood Development Strategies for Community Investment, which lays out our arguments for building an integrated vision of creativity in neighborhood revitalization. It focuses on the way cultural activity, whether for-profit or non-profit, and redevelopment have complementary and in some ways intertwined the missions and that offers a framework for flexible investment and funding that can spur imaginative and substantive neighborhood renewal. We see community-based arts and cultural activity as an important subset of the creative economy, and included in the subsector are local enterprises that 64 5/7/08 - PARKS & COMMERCE - RES. 080337 provide culture and arts and festivals, neighborhood festivals, public arts, community centers, artist studios that offer performances and educational experiences, the transformation of residential and commercial spaces to accommodate the work of artists and other creative economy activities, as well as the intentional use of community as the basis of stories in the -- sort of like the inspiration for cultural and creative activity. Community-centered creative activity in many ways is multi-structured in its boundaries and representation, and that sort of like ecosystem, as we call it, has been well documented by the work of Mark Stern and Susan Seifert with the Social Impact for the Arts Project. It is both formal and informal. It is for-profit and non-profit. Our approach looks at beyond studies, just showing the economic impact and regional competitiveness of the 65 5/7/08 - PARKS & COMMERCE - RES. 080337 creative sector, each important for showcasing, as you've seen today from the Cultural Alliance and Innovation Philadelphia, the role of arts in cities and giving artists and organizations a voice in a public arena towards how the intrinsic value of the arts and culture can support what we call an architecture of community.
In creativity and neighborhood development, we too recommend investing in the intellectual, human and economic capital of our creative base -- of our community-based creative activity to enhance its place-making role and potential. These investments are not meant to be a substitute for other arts and cultural funding. If we blur the distinction, then there's familiar zero sum gain of non-profit fundraising and development overwhelms the conversation. So quickly, what kinds of ventures would benefit from investment? We think, again, creative enterprises 66 5/7/08 - PARKS & COMMERCE - RES. 080337 that engage communities in expressing their special aspects of place. An example of that could be like the Jazz Festival in West Oak Lane that has become actually a regional attractor, the work of the Philadelphia Folklore Project that documents, I think, the ethnic and immigrant histories of Philadelphia, art-making projects and cultural activities that improve the quality of neighborhood streetscapes and public places. And I think we must not overlook our own world-renowned Mural Arts Program and the social capital-building role it plays in neighborhoods. The construction, renovation and repurposing of abandoned or obsolete buildings by artists throughout the City of Philadelphia, either as housing or work spaces, and there are lots of example of that, some carried out by CDCs and other by for-profit developers. And, of course, there's business with social ventures that artists as entrepreneurs, 67 5/7/08 - PARKS & COMMERCE - RES. 080337 which sometimes involve partnerships with the non-profit or for-profit sectors that can be oriented around establishing businesses and products, service products. The monograph -- and I have copies of a series of reports and papers we've put out for the Committee -- delves into these issues and spells out some specific investments that can foster community-oriented creative enterprises. In closing, I just want to leave you with the following thought: It seems to me that there's a significant opportunity to tie together the post-industrial opportunities of what has become termed as the creative economy with the movement to rebuild opportunity in some of our City's distressed neighborhoods, and we should not overlook or undervalue these opportunities as we go forward with our policy and programmatic discussions. There's a broad group of practices out there from 68 5/7/08 - PARKS & COMMERCE - RES. 080337 which we can learn by connecting the two issues, the creative economy and community or neighborhood development, and the thoughtful way I believe we will truly lay an important foundation for making Philadelphia a world-class 21st century city. And my colleague, Mark Stern, will follow up with a couple of observations.
Thank you, Councilwoman Reynolds Brown. My name is Mark Stern. I'm a professor at the University of Pennsylvania. I teach social welfare and history, and I'm also Co-Director of the Urban Studies Program. I'm also a resident of Mount Airy. I have been principal investigator of the Social Impact of the Arts Project, a research initiative at Penn, since 1995. In the time I have, I want to make just two points. First, the major 69 5/7/08 - PARKS & COMMERCE - RES. 080337 connection between creative investments and economic revitalization flows from culture's impact on our neighborhoods' social fabric. Second, as the City considers its policy options in addressing the creative economy, it needs both to encourage the growth of the creative sector and to take steps to ameliorate some of its negative consequences. Our research on the cultural community and Philadelphia neighborhoods makes clear that the direct economic benefits of the arts and culture are relatively modest compared to their impact on our city's social fabric. The arts promote revitalization in two ways. On the production side, the development of a critical mass of creative resources -- for-profit cultural firms, non-profit organizations and artists -- appears to have a significant impact on the level of innovation in a particular field. We call these clusters natural 70 5/7/08 - PARKS & COMMERCE - RES. 080337 cultural districts, which, in our view, present the best opportunity for sustaining a vibrant creative sector. On the consumption side, we have found that levels of cultural engagement have a longstanding relationship with neighborhood economic vitality. To cite just one example, during the early part of this decade, cultural participation was highly correlated with the probability that a neighborhood would witness a significant improvement in its housing market. And in this, we collaborated with the Reinvestment Fund's Policy Unit. The connection was the result of two social dynamics: the level of ownership that residents feel for their neighborhood and the ability of even small-scale arts activity to turn a neighborhood into a cultural destination. While the growth of the creative sector has many potential benefits for the City, it poses one very 71 5/7/08 - PARKS & COMMERCE - RES. 080337 big challenge. It increases economic inequality. If the City is to encourage the growth of a sector dominated by high-income, college-educated workers, it needs to take steps to assure that the benefits of the creative economy are shared by all of the City's residents. We can achieve this goal first by building ladders to creative sector jobs that don't require a college education and, second, by cultivating our neighborhoods' creative clusters. In conclusion, we can combine Philadelphians' entrepreneurial talents and wise public policy to build not just a creative economy, but a creative society. Thank you.
Thank you all very, very much. Do we have copies of your testimony, sir?
Yes. I handed them out just now. 72 5/7/08 - PARKS & COMMERCE - RES. 080337
Okay, then. If looking at your own expertise, knowledge and homework in this area, if you had to pick one, two or three neighborhoods that have seeds of the kind of potential you've spoken about, what might you offer up as potential places to start?
Well, actually, Ira Goldstein, who is Director of Policy at the Reinvestment Fund, and I have been running a class at Penn this past semester and we actually had students out snooping around neighborhoods to look at what's going on. They came across places in Kensington where companies were fabricating props for films that were being done in the area. They came across a warehouse in Germantown where the guy wouldn't quite open the door all the way and just poked his head out, but there was something going on in there and my students concluded it was creative. 73 5/7/08 - PARKS & COMMERCE - RES. 080337
And interestingly, we had a group of students in Olney who came across a whole variety of businesses that are being encouraged by, I believe it's, the Korean Businessman's Association along 5th Street there.
So you have an interesting example of like a flower shop that just from the street looks just like a flower shop. You go in and it's a major dealer in Asian arts that apparently for members of the Korean community is a real destination for that. So I'd say Olney, Germantown and moving up from Northern Liberties into Fishtown and Kensington are certainly three areas that are quite lively.
I actually thought of Northern Liberties and -- is 74 5/7/08 - PARKS & COMMERCE - RES. 080337 it called the Ice Box? That community there. Okay. That takes care of that question. The status of Innovation Philadelphia, what is the staffing and have you been affected at all with the most recent budget proposed by Mayor Nutter?
Current staffing, we have nine full-time employees at Innovation Philadelphia. In terms of funding from the City of Philadelphia for FY09, currently we are not in the budget. The last sort of official correspondence that we had, we were asked to prepare a plan for Commerce as to how Innovation Philadelphia would allocate a reduced funding from the City of Philadelphia. Previously we were receiving $2.5 million a year. For FY09 we requested $1 million, with a plan to reduce that funding over the next five years. Commerce is still working with 75 5/7/08 - PARKS & COMMERCE - RES. 080337 the Administration, I guess, just to finalize the budget period and also to see whether or not Innovation Philadelphia will receive any type of funding support from the City.
Okay. Have any of you amongst this world spoken with university leadership, leadership of our various universities to talk through creating creative economy pockets in the world where they sit? I mean, does that make sense to you at all?
We have had conversations with different university leaders since we did the Footprint in 2003, particularly with Happy Fernandez of Moore College of Art and Design. We've been very engaged with the University Arts from the very beginning, and I just recently, a couple months ago, had my first meeting with President Sean Buffington, who you will hear from, just to sort of give an overview of Innovation Philadelphia. 76 5/7/08 - PARKS & COMMERCE - RES. 080337 One of the things that we were talking about in terms of how we could partner with the universities is exploring doing some sort of proposal for a KIZ, because it has to happen within partnership with a university, and create this sort of district where entrepreneurs and within the creative industries and with students coming out of the universities, there is a process for doing that.
Absolutely. And some of our sort of research and conversations have shown that students sort of graduating from our art institutions are more likely to start a business in the City of Philadelphia than students who graduate from our business schools. So whatever we can do to sort of capture these entrepreneurs coming out of our art institutions and keep them in Philadelphia, it will definitely do a lot 77 5/7/08 - PARKS & COMMERCE - RES. 080337 to drive the economic growth within Philadelphia.
So the yield of those discussions with the leadership of those institutions was what?
With the University, it was a preliminary discussion. We just met each other. But, actually, I do have a meeting scheduled with the Ben Franklin Technology Partnerships up in Harrisburg to actually get more information about the KIZ program and the process for applying and the partners that you need. So I wanted to get that information first and then go back to the universities that we've had preliminary discussions over the years and try to see whether or not this is something that we can feasibly do within Philadelphia.
I might say just in terms of Penn, a really interesting model for how public, non-profit and kind of 78 5/7/08 - PARKS & COMMERCE - RES. 080337 funky informal resources can come together is the 40th Street corridor, where the most obvious parts is, the University obviously put a lot money into building a movie theatre and a grocery store. The Free Library renovated its area. But then there's a whole variety of small artists who have benefited essentially from low rent in university-owned buildings, and it's really created a very mix, as Pat said, kind of ecosystem of different kinds of cultural resources in one area.
I guess my comment with regards to that as an example is, it would be my opinion that the biggest beneficiaries of the site you just located are University of Penn students. If you move that north to Market Street where you have Philadanco and No. 9 North Preston, there's an opportunity to enrich that entire corridor --
-- in a way that you just described. Would you agree?
I think that's a very good point to make, and, in fact, I think the University has been making efforts in terms of encouraging some smaller arts organizations to locate up towards Chestnut Street and up towards Market. So I really agree with you. That's an excellent idea.
Okay, then. Well, that's a potential assignment on our end. Thank you all for your testimony. It's extremely informative. Councilman Goode has a question.
Just following up on the discussion of place-based strategies as a vehicle for encouraging a creative economy, I know Councilwoman Brown had an idea several years ago, a concept that she was floating related to the Neighborhood 80 5/7/08 - PARKS & COMMERCE - RES. 080337 Transformation Initiative, and I know that a similar concept was being implemented up in the Frankford section, but what do you think about mixed-use development on neighborhood commercial corridors as part of this place-based strategy approach?
I think it's critical, and what's exciting is that -- one of the things that when you talk about where should we start, part of our studies says sort of like uncover what exists, and there's a lot that does exist, and I think the Frankford commercial corridor and what has sort of like percolated up with some targeted and some relatively small resources is pretty exciting. And I think that's an example of where you have -- where you bring together public art and the bike racks, where there's artist housing. We have financed a little bit further north along Frankford Avenue an artist studio that was a for-profit artist entrepreneur. 81 5/7/08 - PARKS & COMMERCE - RES. 080337 So, again, there's a cluster of activity that can benefit from different types of support. So I agree. It makes lots of sense.
So is that to suggest then that our city currently is not engaging in those types of opportunities the way you just described? And let be more specific, where government on this side is not doing what we can to --
I was going to say, I think what Kelly mentioned about the need for institutional driver or coordinator, again, I think a lot of things are happening. The question is do we get synergy from what's happening, and then what role can the public sector play versus other sectors in helping to drive that type of activity and drive it in such a way that you don't get in the way. Because sometimes we do insert ourselves and, unfortunately, we suppress the activity and the creativity and 82 5/7/08 - PARKS & COMMERCE - RES. 080337 innovation as opposed to stimulating more.
And I think that's tied into the whole sort of branding -- the internal branding within Philadelphia, within the region, because there is so much great stuff going on within our communities, but it's not packaged, and there's no way that we have this critical mass. And I think that if there was this institutional driver whose responsibility every day all day would be to make sure that these things are linked together, everyone would see that there is a lot happening, the potential for growth, the impact that it's already having. But right now it's so scattered --
Okay, then. 83 5/7/08 - PARKS & COMMERCE - RES. 080337 Please, sir.
State your name again for the record for our transcriber.
Sorry. Mark Stern, University of Pennsylvania. I think one of the things that came out of our collaboration with the Reinvestment Fund is an appreciation that the real driver for this kind of activity comes from the grassroots in terms of artists taking a chance, taking over a studio, or a community group deciding to build some artist housing in the hope that it can create this. So I guess from the City's standpoint, in addition to the points that have been made, I'd make the point that kind of City governance fundamentals around zoning, around taxation, around consistent regulations are really a core push that I think really would give this 84 5/7/08 - PARKS & COMMERCE - RES. 080337 sector a lot of opportunity.
Next up, an entrepreneurial panel, Matthew Fisher, Night Kitchen Interactive, and David Brown, President of Brown Partners. I understand we have another entrepreneur with us, so we'll ask you to join this panel, Hassan Charles. (Witnesses approached witness table.)
Thank you very, very much. Welcome, and please proceed with your testimony.
Thank you. I'd like to thank the Council and Kelly Lee of Innovation Philadelphia for inviting me here today. In contrast to the previous 85 5/7/08 - PARKS & COMMERCE - RES. 080337 testimony, Kelly asked me to speak briefly about my personal experience as a creative entrepreneur in Philadelphia. So I hope I don't bore you with my personal story.
My name is Matthew Fisher and I'm President of Night Kitchen Interactive, a design company providing interactive exhibits and online learning to museums, arts and cultural organizations, and global corporations. We started in 1997 right here in Philadelphia, with no capital to speak of, an office in my apartment and no paid employees. Today my partner and I have an office on 2nd and Pine, 12 fantastic employees, half of whom are under the age of 35. We have a great roster of clients, including the Smithsonian Institute, the National Constitution Center and the Pew Charitable Trusts, and 86 5/7/08 - PARKS & COMMERCE - RES. 080337 over the years, I've had a great privilege of working with many of the major cultural institutions in Philadelphia. I'm also on the Board of the Philadelphia Area New Media Association, a volunteer professional organization, and on the Advisory Board of the Rosenbach Museum and Library, and I also have been a member of Innovation Philadelphia's Economic Roadmap process, along with Peggy Amsterdam and a number of others, since 2003 invested in the future of the creative community here. I grew up in West Philly and lived in Center City and Old City and now in Northern Liberties, and I'd like to lobby for that being a good place, although pushing towards Kensington, because pricing is a little high for artists these days. I'd then like to applaud the City for how far it's come in this past decade and for the direction that it's 87 5/7/08 - PARKS & COMMERCE - RES. 080337 heading. Mayor Nutter recognizes Philly's arts and cultural assets as significant, and City Council has made good progress towards reducing the wage tax and hopefully will do so with the business privilege tax as well. I also applaud Innovation Philadelphia for their Creative Industries Investment Fund and their global creative summit, which they've had and are having again. When we started Night Kitchen Interactive in 1997, there were far fewer resources in the City than there are now, but we did grow, and today we're thriving and doubled in size in just the past few years. I'd like to say Philly is great for our business. We have more museums than almost any other city in the country, and that means excellent world-class clients at our doorstep. An affordable cost of living in Philly means affordable salaries for our 88 5/7/08 - PARKS & COMMERCE - RES. 080337 employees. A $50,000 salary here provides our employees with $10,000 more disposable income than the same salary in New York or DC. And Philly's a small town. Everybody knows everybody, which means great networking and resources and support for all of us. As great as Philly is, there are some things that I think could be better. I'm not here to harp on the high wage taxes and the dreaded business privilege tax or our outdated public transit system, but everybody here knows how important it is that these issues are addressed, particularly the business privilege tax. But I will say that specific industries represent growth opportunities and invaluable assets to the City, and I'm, of course, talking about the creative industry here, and it should be targeted for tax reductions, low-interest loans and investment, if possible. 89 5/7/08 - PARKS & COMMERCE - RES. 080337 That said, I'd like to focus on the positives and suggest what we can do to build on them. Philly is a world-class cultural destination, with incredibly rich depth and diversity of cultural organizations and creative businesses. This is, in my opinion, our strongest asset. In Travel and Leisure Magazine this fall they had a survey of America's favorite cities. Sixty thousand people ranked Philadelphia in the top two for museums -- sorry; for monuments and history and the top four for museums and galleries. So I think we can do a lot better job at branding ourselves. I think we've got a good start. We've branded the Avenue of the Arts, but I think we shouldn't stop there.
" Similarly, I think we should promote the best of our non-profit 90 5/7/08 - PARKS & COMMERCE - RES. 080337 organizations and creative businesses within the region. We tend to overlook our own strengths. For example, it wasn't until I started to speak regularly at international museum conferences that the National Constitution Center contacted us, despite the fact that they are just a few blocks away. Better promotion would highlight that we have some of the best in the business right here in Philly. We have some great young talent streaming in from all over the world to attend our universities, but four years later they stream right back out again. I personally have found it very challenging to identify top candidates to work in our unique field. I think many of our young and talented don't realize how good they have it right here in Philadelphia and head out to New York and San Francisco to seek their fortunes. Again, I think this is largely an issue of perception and lack of information and 91 5/7/08 - PARKS & COMMERCE - RES. 080337 our branding. The pool of young talent needs to know what opportunities our creative businesses can offer them, the value of Philadelphia's salary and the benefit of our rich cultural assets. And what is our greatest asset, in my opinion, is, the creative and small businessowners and employees have much to offer, much more than can be measured by income generated, jobs created and our tax base. While these contributions are considerable, I think there's much more. Creative professionals tend to be creative people in all aspects of life or creative citizens, and as such, we're dedicated to the growth and prosperity of the City's creative community in many ways. As creative citizens, we not only produce the creative goods, but we are consumers of them as well. We are the film and theatre goers, the music lovers and the museum visitors. Not to say that everybody else isn't. 92 5/7/08 - PARKS & COMMERCE - RES. 080337 We not only support the community with our dollars, but we do so through our involvement. For example, through PANMA, our Board holds many free educational and networking events throughout the year, bringing emerging and experienced members of the new media community together, and through my advisory position at the Rosenbach, I support one of my favorite cultural treasures in the City. And the Maurice Sendak exhibit just opened yesterday. So check that out. I do not consider myself to be exceptional in my dedication to the creative community. Most creatives show similar dedication to this pursuit and many far outshine my own. Take Geoff DiMasi, for example, who in addition to having his own design business, P'unk Avenue, for Passyunk, has converted a South Philadelphia storefront into a meeting place for art openings, for the Junto, a so-called "club of 93 5/7/08 - PARKS & COMMERCE - RES. 080337 mutual improvement," and for community meetings, with the goal of generally embracing our neighborhood and city. Or how about Alex Hillman, who is sitting right over here, a young man who spearheaded Independents Hall, and that's "independents" with a T, a co-working environment for independent design and technology professionals in Old City that has gained national attention. In closing, I'd like to summarize by saying that participating as producers, consumers and community members, we as creative citizens build a thriving creative industry in Philadelphia from both the inside and without. This, in turn, benefits all of our City's citizens. Again, I'd like to thank the City Council for giving me this opportunity to speak today.
You're welcome. Do you have copies of your 94 5/7/08 - PARKS & COMMERCE - RES. 080337 testimony?
Okay, then. Let's hear from the entire panel and then we'll move to questions. Good afternoon.
Good afternoon. Madam Chair, Councilman Goode and members of the Committee who are participating in this hearing, again, thank you, and echo Matthew's thanks to addressing you this afternoon to talk about the creative economy. And I've been asked to give you a perspective of both as a businessowner and also as a perspective of small minority-owned business here in Philadelphia in the creative economy. Our firm, Brown Partners, is a minority-owned and controlled full-service ad agency here, using a range of different things to motivate the 95 5/7/08 - PARKS & COMMERCE - RES. 080337 behavior of all kinds of consumers. We're headquartered here right in Center City. We are a Pennsylvania-based corporation and we currently employ ten full-time people, and we serve as the minority agency of record for some of the industry's most recognizable brands in the country, Comcast, McDonald's and Coke, but regionally we also represent the Commonwealth of Pennsylvania, the Department of Health, the Department of State and the Department of Tourism, and locally we represent PECO, PGW and the School District. We started our firm here in Philadelphia six years ago because we love Center City. We love the City that we share. I was born here. I was raised here, group up in West Philly, graduated from Central High, 239, and working here in Center City --
Yes. I'm waiting 96 5/7/08 - PARKS & COMMERCE - RES. 080337 for him to say his class number. He's not going to say. All right.
241, okay. Not as good as 239. Anyway, working here in Center City for more than years. So this is 10 something that I believe in. This is 11 something that is very much a part of who 12 I am. So this is not an accident. This 13 is very intentional about being here in 14 Philadelphia. 15 I got my start in advertising 16 participating in a program called 17 INROADS, which provides career exposure 18 and internship opportunities for students 19 of color, and it was my first taste of 20 the creative pie, and I've been hooked ever since. For us, providing workplace exposure for our young people -- and I do want to talk about that a little bit -- is not simply something that's nice to 97 5/7/08 - PARKS & COMMERCE - RES. 080337 do. Internship exposure is a business principle at Brown Partners and is our way of life at our firm. We have senior staff members who oversee our internship program, and we interview, screen and award internships year round. Each intern is required to develop an experienced plan with us and to ensure that they get what they need during their time with us and we get what we need from them as their employers. We are required to help them develop a marketing plan to present to our staff as a way for them to help hone their skills and while at the same time understanding the industry in which we hope to grow them as it relates to future employment. But the investment in providing internships to area college students has paid off nicely, as we have hired many of the employees who started out as interns. As a matter of fact, the University of the Arts is here today. We currently have employed three students who 98 5/7/08 - PARKS & COMMERCE - RES. 080337 graduated from the University of the Arts as employees with us. While we focus primarily on college-age students, we have recruited and made opportunities available for high school students in providing them with a modified but an equally rigorous work experience that prepares and encourages them to pursue this field of study at the college level. Our commitment to work and workplace exposure extends even beyond our own firm. First, I'm proud to say that I serve as a member of the adjunct faculty of the University of the Arts, whose testimony you'll hear in a little bit from the President, Sean Buffington, but I've also spoken and leaped from the college classroom anywhere else who will listen about the importance of getting involved in the industry at Temple, LaSalle, Lincoln, Cheyney, anyone who will give us a listening ear. But we've also made a pretty 99 5/7/08 - PARKS & COMMERCE - RES. 080337 significant investment that extends well past any time we might spend in any given classroom. Four years ago, our firm created a program called The Big Pitch. The Big Pitch is a program that matches inner city Philadelphia public high school students with advertising agencies and exposes them to the field of communications. The participating high school teams and their agency coaches create campaigns on a common topic in competition against each other, "pitching" for the top prize; in other words, presenting the winning campaign. The students from the winning team receive a $1,500 cash prize that they split between the team members and the school, and those numbers are helped to attract a good quality of students, and their schools are awarded paid internships and paid scholarships to the University of the Arts Pre-College Summer Program, enabling the students to 100 5/7/08 - PARKS & COMMERCE - RES. 080337 continue exploring the field in a very structured manner. When we first started The Big Pitch, we found that the students who participated were really deficient in their writing and their presentation skills.
So as part of the competition, we created something called The Big Pitch Institute in which students are given four weeks of classes at our Center City office, which we now have moved the classes to the University of the Arts as part of one of our partners, teaching them the basics of presenting and writing, marketing skills, how to do research, how to develop some of those skills in terms of what they'll need if they're going to pursue this as a field of study in the future. We've partnered with the University of the Arts since the inception of the program, and most recently we've been able to conduct the program on campus to give these kids an 101 5/7/08 - PARKS & COMMERCE - RES. 080337 exposure to a college environment. And since the program has started, the program has enrolled students from six public high schools and have matched them with five different agencies, awarding nearly $5,000 in prize money to the schools and the students, while providing scholarships for three consecutive years to the Pre-College Summer Institute Program at the University of the Arts. In 2005, The Big Pitch was awarded the first ever Mosaic Award for Student Diversity from the American Advertising Federation honoring the program as the best program in the country for exposing youth of color to the advertising field. But beyond these accolades, we count our success based on the lives that we touch. We have regularly attracted students who have entered our competition with aspirations for college and, after participating, have enrolled in 102 5/7/08 - PARKS & COMMERCE - RES. 080337 post-secondary programs here within the state and throughout the country. Since it started, we've had 50 kids participate in The Big Pitch at our own expense, along with sponsorship support from participating ad agencies that we've recruited. With so many more high schools clamoring to participate, we've been able to secure a DCED grant working with the Office of State Senator Vincent Hughes enabling us to hire a program director and strengthen the structure of the program. But we know that we're really in the ad business, not in the youth development business, but for Brown Partners, this is more than just a motivation to improve the employability of youth who may eventually knock on our doors to start their advertising careers. Such a program like The Big Pitch could only happen in a community where a creative economy is supported and is thriving. 103 5/7/08 - PARKS & COMMERCE - RES. 080337 But beyond investing in talent for the future, the creative economy in this region helps firms like Brown Partners grow every day. Our employees are young, they're active and they're mobile. They live in the funkiest parts of town, from Old City to Mount Airy. We work them hard all week so they can play all weekend in our parks, clubs and restaurants. They CarShare, they bar-hop and then they brag to their New York friends about how affordable their lives are here. In addition to attracting creative talent, the creative economy here has enabled firms like Brown Partners to attract investment dollars to help fuel our business. And you had heard from Kelly Lee from Innovation Philadelphia, and Innovation Philadelphia has helped provide an articulate voice for the importance of the creative economy here in the region, and they did start and she referenced the Creative 104 5/7/08 - PARKS & COMMERCE - RES. 080337 Economy Investment Fund. We're proud to say we're going to be one of those three firms selected by the Fund to help expand our creative capacity. It was supposed to be a surprise. Okay. So now you know. But none of this would have been possible if our city was not supportive of the creative economy of which we are all a part. However, like any business, we want to continue working in an environment that is favorable to our industry.
As such, we applaud the effort and support any effort that the Administration will continue to pursue in terms of making a more favorable tax environment and any other program that might be considered hostile or at least handicapping our ability to grow this emerging economic sector. But even though the creative economy clearly has a bottom-line purpose that impacts the lives of our businesses and our families, a thriving creative 105 5/7/08 - PARKS & COMMERCE - RES. 080337 economy has personally saved my life. And I just want to just end with this very brief story. Despite having two great parents and what most would consider to be a stable family upbringing, I got caught up running the very same streets that are claiming lives of too many of our kids today. Through a series of events, I survived a botched drive-by when I was a teenager that scared me right off the street corner and right into a summer program that led me to an internship that led to a career in advertising. That fateful night was my last night on the street. It wasn't because I was scared to hang out. I just had better things to do with my young life, like giving my life a future. So thank you again, Madam Chair and the members of City Council, for this opportunity to bring this testimony to you, and we, again, applaud your efforts to do so. 106 5/7/08 - PARKS & COMMERCE - RES. 080337
You're welcome. Do we have copies of your testimony as well?
Please proceed with your testimony. State your name for the record.
Thank you very much. My name is Hassan Charles. Thank you, Councilwoman Blondell Reynolds Brown and also Councilman Goode for having this hearing today. I'm very pleased to have the opportunity to address the Council and also particularly excited to address it with other creative entrepreneurs in the market. My history, my background, I spent ten years in finance, in risk management and banking, and then I owned 107 5/7/08 - PARKS & COMMERCE - RES. 080337 a creative economy company for six years. I made several investments in other smaller companies as well, and until last week, I was the Assistant Director of Programs at Innovation Philadelphia. So I feel uniquely qualified to discuss some of the opportunities and challenges in the creative economy here in Philadelphia. And I have to start by saying that I think that to really grow an innovative and a creative economy, you have to have innovative and creative approaches. I think it's really difficult. I've spent really the greater part of the last year producing events, networking events for close to 1,000 creative professionals. I've interviewed close to 100 creative entrepreneurs, creative workers, young professionals as well living in this region. The responses that you're getting from the community are a little bit different from the responses that we see or from the 108 5/7/08 - PARKS & COMMERCE - RES. 080337 things that we're discussing at the high level. I want to be really clear. Young people, every last one of them, is a potential creative entrepreneur. They've grown up in a different environment. They've embraced information technology. They've embraced software. They've embraced computers. If you were to open an economy -- if you were to open an opportunity for people to feel like there was a way to balance all of their priorities as young professionals, meaning have great work, meaningful work, live a high-quality life, there are certainly people all over the country and all over the region that would be open to relocating to the Philadelphia region. I, for one, am a transplant here. For the five years that I was self-employed, I produced concerts and festivals in 30 cities all over the country. I interacted with several 109 5/7/08 - PARKS & COMMERCE - RES. 080337 hundred thousand young people, and I'm really able to speak to the assets and the benefits of the quality of life here and the region. And I chose here. I chose to live here before I chose the business. I chose to live here for its proximity to major metro areas. I chose to live here for its reasonable quality of life and reasonable cost. And I also chose to live here for the upside potential that any young professional living, especially in this Northeast corridor, would recognize is huge value. However, the resources that these young folks need to succeed in this creative economy are quite different from some of the things that we've discussed. I think these creative entrepreneurs really hit it on the head. For one, Philadelphia has to lose its inferiority complex regarding the creative economy. We do have the best and the brightest talent. We have the most colleges and universities. We have the most students 110 5/7/08 - PARKS & COMMERCE - RES. 080337 in several of these creative sectors that are out there. What they don't know, what they think they know but they don't know is how to start and run a successful business. Everyone today thinks that they can run a business. Do they have a business privilege license? Are they paying taxes? Are they filing quarterly returns? Absolutely not. They're running side ventures out of their homes, and they're running them as early as 14 years old, 12 years old. So there's no 15 way to assume that those folks at 24, 25 know that there's another way to do things. There's no way to assume that they know that there's a Commerce Department that exists to support creative businesses and businesses of these endeavors.
It is very difficult for them to take the step from a start-up business out of their home to a thriving business that employs people in the region. So 111 5/7/08 - PARKS & COMMERCE - RES. 080337 they need office space, they need business incubation services, they need strategy, advice and counsel, and they do need low-cost financing, low-interest financing, those things that -- mezzanine funding, things that will help support the growth of their businesses in a successful manner. The second thing that people really do need is not promotion for the sake of making us feel good. The creative economy in Philadelphia is very well aware of what they're capable of doing. However, they also feel affected by the inferiority complex to the region. They also are impacted by the stories on CNN that brand Philadelphia as the nation's murder capital. They don't believe that companies from New York, the media capital of the world where the largest spends are made globally, are interested in hiring Philadelphia firms to do work, despite the fact that Philadelphia has talent that is 112 5/7/08 - PARKS & COMMERCE - RES. 080337 comparable to any creative region in the country. And there are examples. Councilman Goode, I heard you ask about examples of other regions and sectors that are doing it successfully. There are several examples. For example, I think there's one report that I think you'd really be remiss not to read, is the Creative Britain report that was just released probably about a month and a half ago.
Creative Britain, yeah. And it's really a report that was prepared by a team of strategists in the UK who are placing their entire economy around the creative economy. They want to be the global creative center of the world. They understand that the 113 5/7/08 - PARKS & COMMERCE - RES. 080337 industries around fashion and music and design and the other creative economies do more than produce funds. They produce excitement. They produce dreams and hope for young people. They produce outlets in areas that they're confident that they can succeed. A lot of young folks are not confident that they can succeed in other areas. So that brings me to my last point. If you talk to any creative entrepreneur in this city, they will tell you that talent development is an issue in the pipelines. In the Creative UK report, they've gone as far as to say we're going to institute five hours of culture and learning for every elementary school-age child in all of London, because they understand the importance of hands-on experience, the ability to think and learn and adapt in your daily life and how it might affect your future prospects in the creative economy as well. 114 5/7/08 - PARKS & COMMERCE - RES. 080337 So this is a large issue. It's a huge opportunity for everyone here in the region, for those who are and are not involved in the creative economy, because of its growth prospects. However, some of the results that we seek to achieve can also be accomplished by some really basic steps. I think also TIF financing and zones and empowerment zones, all those things are great ideas, but there are some really core opportunities at the foundation that, for whatever reason, aren't necessarily being capitalized on.
Thank you very much for your enthusiasm and for all three of you, commitment. It comes through on why this economy is one that maybe -- not maybe, but one we as a government should pay more attention to. In fact, it behooves us if we want to capture the type of benefits you've talked about. A few questions. One, how would you best recommend targeting or 115 5/7/08 - PARKS & COMMERCE - RES. 080337 tapping the very population you just spoke about, these young people who want to grow to be successful entrepreneurs, they have the passion and the dream, but they don't have the techno expertise to start off getting it right? How would one go about identifying them? Where would you find them? Outside of Moore College of Art and/or University of the Arts?
Again, I think, you know -- and David has a really similar experience of young folks who weren't exposed to these industries early on, and that is where it comes in, early exposure to the opportunities. Lots of young folks when they watch television and they think about the music industry, they only understand that performing on stage generates income and generates fame. They don't understand that there are sound engineers, production techs, back-line people on studios. There are 125 industries around the music industry. 116 5/7/08 - PARKS & COMMERCE - RES. 080337 They have no understanding of the other jobs and the other opportunities. The same goes for design technology. They only understand what's coming through on the mediums that they are most in tune to. They're not aware of the other opportunities, and there aren't enough people that are willing to give them early exposure to those industries. You can talk to companies. I think Independence Media -- they own WIBE Mind TV -- is a great example. Particularly, the President and CEO told me that 80 percent of his business was grown on intern labor.
On intern labor. In that he found that 100 percent of the examples of interns either said one of three things: Wow, this is a business I had no knowledge of and it's something I really want to pursue, or This is a job that I thought I wanted to do, I no 117 5/7/08 - PARKS & COMMERCE - RES. 080337 longer want to do it anymore, or I'm going to go to college now because I realize there are things that I didn't know about life that I'd like to learn about. So I do think early exposure to opportunities, getting kids -- identifying corporate partners and really driving -- I think the Mayor is doing a good job now of driving these 2,000 internships this summer in partnership with the Philadelphia Youth Network. Those are all things that will change young people's lives in the long run. We may underestimate it, but for those of us who had the opportunity --
-- go one way or the other. When they see a good opportunity and something that they can succeed in --
And capture. 118 5/7/08 - PARKS & COMMERCE - RES. 080337
Just very briefly, I agree with what Hassan is saying. It is about exposure. I would say also it's the non-traditional, because we're not going to expect that 12- or 15-year-old who is in their basement cooking up something is not going to go to a program necessarily. So we kind of have to kind of go and meet them where they are. I think part of it is being able to -- and that was my experience. I didn't know there was a career in advertising to be had until I got exposed to, This is what you got to do in terms of schooling and things of that nature. But we're trying to create a program actually -- this is wearing my ministry hat for a second -- in North Philadelphia working with Cookman United Methodist Church that has an alternative school. We're trying to teach 119 5/7/08 - PARKS & COMMERCE - RES. 080337 entrepreneur skills under this program called Street Smarts. So we have this idea where these kids are basically coming up with these ideas. And to the point that Hassan made, you can have a good idea, but is it structured, do you know what a balance sheet looks like, and talk in terms that they can understand, because a great idea that can't be necessarily moved forward just becomes a great idea and becomes a period of frustration and a barrier to move some things forward. Two things start to happen with that. One, we start to grow businesses from the grassroots up, which makes a whole lot of sense. But not everybody can run a business. That's one thing we do recognize. But everybody can learn entrepreneurial skills. An entrepreneurial-minded person in any environment is going to be able to be a valuable and an employable person. So we're looking at this as a 120 5/7/08 - PARKS & COMMERCE - RES. 080337 way to kind of structure such a way, the kind of taking it to the streets, because there are a lot of folks who have the gift, but don't have the access or even how to take what they know and be able to model that in such a manner that's going to be able to make it into a viable enterprise.
To anyone or all three of you, if you had to rewind back to when your businesses started, 1997 -- when was yours, Mr. Brown?
To rewind, what one, two or three help factors, what one, two or three aids would have been useful to you from government to move you along more quickly? What could government have done to make your start better and different?
Well, I did want to just speak to your last question as 121 5/7/08 - PARKS & COMMERCE - RES. 080337 well.
And just say that I completely agree with the two other speakers, but also to support that kind of critical period of time, the three to nine months after graduation for college students who are either from Philadelphia or from outside the region. That's a pivotal place where I think a lot of the decision-making in these young people's minds determines whether or not they stay, and I think there's a lot we can do in terms of universities collaborating with businesses and hopefully government to create kind of incubation environments, maybe not exactly completely start-up incubation, maybe something transitional between their classroom experience and more of an intercapital environment, but I think there's a lot of ways that we can support. And you see these kids coming out of school every day with their 122 5/7/08 - PARKS & COMMERCE - RES. 080337 graduate thesis project that is so close and yet they miss some of the critical business skills that we're talking about here that they aren't getting in art school to survive.
In terms of when I started, I mentioned that there wasn't -- or I guess the Philadelphia Area New Media Association started at the same time pretty much as my business, so it would have been helpful to have more support for particular industries that were either government supported or not, just having a better information network out there about how to get a business started. I did attend the Wharton Small Business Development, I think a $50 workshop. That was about as much business savvy as I had going into it. So we learned the hard way. But I think if young people had availability to 123 5/7/08 - PARKS & COMMERCE - RES. 080337 affordable workshops and training to support their ability to start their own business, they would absolutely take advantage of it.
I think, if I may, and this is -- I'll be very honest. In terms of 2002, one of the biggest barriers was the City of Philadelphia itself in terms of getting things like our business privilege license and things of that nature. It took an inordinate amount of time, working at the time with MBEC and getting certification. When I say took an inordinate amount of time, I mean, duplication, sending things three or four times and so forth, while at the same time trying to run a business. I have to say -- Matthew had mentioned about doing it the hard way. Part of that is kind of part of the process. I mean, I don't think anybody who started a business knows that -- you got to kind of roll with the punches a 124 5/7/08 - PARKS & COMMERCE - RES. 080337 little bit. It's going to kind of prove the mettle of kind of how you do it, but we shouldn't make it so tough that nobody gets through. So I think that at certain times, that for me was a way to streamline the process and to have a much more coordinated fashion would be great. At the time when we started, I don't think there was an active Innovation Philadelphia, which has helped in terms of being able to help and book technical assistance and so forth.
Absolutely. And I think the third thing would be a better network. I mean, I've been trying to create a network, and I think anybody who started a business -- and this kind of may go across various lines, and this may not be a role for government, but this might be a role that we within the creative economy might have to start 125 5/7/08 - PARKS & COMMERCE - RES. 080337 populating in an intentional as opposed to an incidental way, that if you know that you have other entrepreneurs -- my grandmother has a saying that I can give you the recipe, but you still have to cook. Well, help me with the recipe. And I think that becomes something that, honestly, that if I can help someone avoid a pothole, because all boats will rise with that tide. We don't have -- and I think it's still a little fragile in terms of a formal network. I think you had mentioned about Independents, which I think is great. Looking at those types of things have to happen as part of a movement. That's not a role for government necessarily, but it is a role that we have to play.
Of the professionals who live and breathe the industry.
Absolutely. And not necessarily like a trade association, but being able to say find each other, 126 5/7/08 - PARKS & COMMERCE - RES. 080337 network, do it.
Sure. So let me ask, is there a directory of sorts? I learned last week through our Green Job Corps hearing that there is a directory of every green business in the City. Might there exist a directory of all of those who are reflective of the categories mentioned in the Innovation Philadelphia report? Just curious.
State your name for the record. You have to come back up. (Witness approached witness table.)
Yeah. 127 5/7/08 - PARKS & COMMERCE - RES. 080337 Do you want to speak to it?
Kelly Lee from Innovation Philadelphia. The Philly Creative Guide is an online directory that's a resource for creative industry entrepreneurs and workers. They're in the process now of actually expanding and enhancing that directory, and Innovation Philadelphia has been working with them very closely to not only have the sort of directory to make it more interactive, but that is going to sort of translate into this job website that I spoke of earlier, but then creative industry workers can find creative industry job opportunities on this website. Employers can go onto the website, post job opportunities, and creative industries can go in to find them, whether it's free-lance, full time or part time. But the Philly Creative Guide is the closest thing that this region has to a full directory of all types of creative industries. 128 5/7/08 - PARKS & COMMERCE - RES. 080337
Okay, then. Thank you all again. Your testimony is quite informative and instructive for what we're looking to do on this end.
I think one thing to really understand, especially with creative businesses -- well, with all new businesses, revenues are very cyclical. You could have fantastic months and you may not get paid again for six months. So any time you're faced with having to incur fixed expenses that are large, office space, it's very difficult for a small company. So I think one of the things this concept of Independents Hall, being 129 5/7/08 - PARKS & COMMERCE - RES. 080337 able to cut, slice traditional office space into smaller segments that young people can afford is a phenomenal idea. In addition, creative businesses don't have traditional collateral, so they won't qualify for traditional bank loans. If you don't have a superior credit score, it doesn't matter if you have the best ID or not. Traditional institutions don't finance ideas. So, yeah. Some support in terms of low-interest financing, flexible pay, pay options in terms for early businesses, early-stage businesses, or different terms that may change once businesses mature I think would be an excellent benefit to young businesses, particularly creative businesses.
Okay. Well, again, it's been quite instructive. Thank you very much for your testimony. Do we have a way of following up with you? Does Joe Meade have your 130 5/7/08 - PARKS & COMMERCE - RES. 080337 information?
Terrific. Thank you very, very much, gentlemen. Our last panel, Sean Buffington with the University of the Arts, please come forward. Blake Jennelle, Philly Startup Leaders, and Paul Wright, Philadelphia Live Arts Festival. (Witnesses approached witness table.)
Please state your name for the record and proceed with your testimony.
Sure. My name is Sean Buffington. I'm the President of the University of the Arts. Councilwoman Reynolds Brown, Councilman Goode, thank you so much for your invitation to be part of this discussion. I've been asked to provide some basic statistics about my institution, the University of the Arts, and then to 131 5/7/08 - PARKS & COMMERCE - RES. 080337 suggest a few of the challenges that I see that our graduates in particular face once they leave. But first let me say that my figures represent only my institution and it's important to remember that there are four independent arts colleges and universities in Philadelphia: UArts, Moore, PAFA, Curtis; outstanding visual arts colleges at Drexel, Temple, Philadelphia University and Penn; a performing arts college at Temple; a campus of the Art Institutes; and myriad university and college departments of art, music and theatre. So this should be taken really as just an indication, I think, of the scale and diversity and excellence that are represented by these institutions. The University of the Arts enrolls 2,300 students in three colleges: Performing Arts, Art and Design and Media and Communications. Our programs range from dance, music and theatre to fine arts and applied arts to multimedia and 132 5/7/08 - PARKS & COMMERCE - RES. 080337 writing. Each year we graduate about 500 students, 65 percent in Art and Design, 30 percent in Performing Arts, and five percent in Media and Communications. The largest programs in terms of graduates every year are Graphic Design, Illustration and Photography. One year after graduation, the vast majority of our students, 90 percent, are still working in the fields for which they were trained. Thirteen percent of our current students have permanent addresses in Philadelphia, meaning they're from Philadelphia originally; percent are 18 from Southeastern Pennsylvania, excluding 19 Philadelphia; 43 percent of our students are from the Philadelphia metro area, which would include Philly, Southeastern Pennsylvania, plus some of the counties in New Jersey and Delaware; five percent of our students are from outside of the United States, representing 43 countries. 133 5/7/08 - PARKS & COMMERCE - RES. 080337 We have about 14,000 living alumni, and we have reliable address information for about 11,000 of them. Of those 11,000, 5,000 live within miles 6 of our institution, which is at 320 South 7 Broad Street. You go up to 6,500 if you 8 go out 40 miles, in a 40-mile radius from 9 our institution. Three-quarters, 75 10 percent, of our alumni live in the DC-New 11 York City corridor. 12 The largest clusters of alumni 13 outside of DC and New York City are 14 Chicago, San Francisco, Los Angeles and 15 Miami. 16 In short, Philadelphia has an 17 enormous concentration of current 18 students pursuing creative training 19 programs, and if my institution is any 20 indication, the City also retains a 21 significant percentage of graduates from 22 those institutions after graduation. 23 I want to make one 24 counter-intuitive remark, which is that 25 as important as it is for us to retain as 134 5/7/08 - PARKS & COMMERCE - RES. 080337 many of our students here in Philadelphia, it is important that some of our graduates do leave. It's actually important to the reputation of the City for students who are trained here or who start businesses here and then leave to take the reputation of the City and its institutions outside the City. That's part of what makes this an attractive place. So we don't want to lose sight of that. I've been asked to say just a couple of words about the needs of our graduates and what we can do to maintain the City's competitiveness in retaining them. First, let me say that it's difficult to generalize about the needs of the youngest members of our creative sector.
They include independent visual artists and performers; creative consultants, like graphic and interactive designers, who will work in or form their own consultancies; innovators, who will 135 5/7/08 - PARKS & COMMERCE - RES. 080337 create and commercialize new products, technologies and processes; and institutional entrepreneurs, who will seek to create new performing and visual arts organizations; and, of course, professional teachers. Each of these creative constituencies has different needs, though each is a critical component of a healthy and vibrant creative economy. I'm going to try to identify a couple of what I think of as general concerns, but I do want to stress that I think looking at each one of these sub-sectors, if you will, is quite critical, because they are unique. A few general concerns: Inexpensive housing and workspace has been one of the City's great strengths in attracting and supporting artists and retaining artists and other creative professionals, but as housing prices rise in the City, the attraction does diminish. One anecdote that may be 136 5/7/08 - PARKS & COMMERCE - RES. 080337 instructive, at the University of the Arts ten years ago, the vast majority of our students could afford to live in Center City within walking distance of the institution. Now most of them live in South Philadelphia, and their distance from campus grows each year as the South Philadelphia neighborhoods become more desirable and expensive. I think it's reasonable to suggest that our recent graduates are subject to the same pressures that our students are. That's something that I -- although we know that that's one of Philly's great assets, I've seen it happen. I lived in Boston for 17 years. It happened in Boston, where initially neighborhoods that had enormous amounts of affordable housing gradually became more and more desirable and artists began to get pushed, and I think we're starting to see that here in this city. Second, artists and creative professionals need access to markets for 137 5/7/08 - PARKS & COMMERCE - RES. 080337 their work. Individual artists need galleries and ultimately individual buyers to support themselves. Creative consultants and entrepreneurs need customers, companies seeking design work, investors prepared to support the commercialization of new products and technologies. Philadelphia's internal markets may not be sufficient to support our creative makers and innovators. We need to ask ourselves how we can strengthen those markets and, perhaps more important, help our creative professionals access markets outside of Philadelphia. Third, and relatedly, arts institutions are very good at teaching -- and I think this echoes something that's been said in some of the prior panels. We are very good at teaching conceptual and technical skills to our students. We are not very good at helping our students understand how to become entrepreneurs, how to market their skills and their 138 5/7/08 - PARKS & COMMERCE - RES. 080337 work, how to create small businesses. We, the arts institutions, send our students into highly competitive markets without all of the skills that they may need to compete. Two other final observations. Universities provide students with critical access to equipment, software and facilities. When students graduate, they essentially fall off a cliff with regard to access to some of the specialized infrastructure. We have found that graduates -- we have graduates knocking on our door constantly one and two years out who want to return to the institution, not as formal students but in order to use our facilities in order to continue to make work. It's important to remember that as the artistic fields have expanded, we're not simply talking about an artist in a studio with a canvas any longer. We're talking about the need to access in some cases intensive computing power in 139 5/7/08 - PARKS & COMMERCE - RES.
080337 order to pursue the kind of work that students want to pursue, that graduates and creative people want to pursue. So they are desperate for access to software, to specialized facilities, and there's a need to try to provide that for them. Finally, I would say -- and this is something that I think we tend to forget about -- community is critical. Councilwoman Reynolds Brown, you mentioned the Ice Box, which is in the Crane Building. Someone mentioned P'unk Avenue. We've talked about some of these efforts to provide -- Independents Hall -- hubs for creative people. What makes art colleges such vital places is that during the four years of a student's education, they provide that kind of critical mass of curious and creative people who challenge each other. They challenge their ideas. They challenge each other's work, and that leads to better, more interesting work. You lose 140 5/7/08 - PARKS & COMMERCE - RES. 080337 that when you leave college. And so I think one of the challenges that we face as a city is trying to provide venues and opportunities for independent artists and creative professionals to continue to interact with one another, to challenge one another. We need to create that kind of community network. In conclusion, I just wanted to identify one initiative of the University of the Arts to try to address a few of these needs, by no means all. We will relaunch next year our Corzo Center for the Creative Economy. The Center will have three components, one focused on research, one on education, which will be both internal; that is, aimed at our own current students, and also external; that is, aimed at the community outside of the university. And then I think most critically an entrepreneurship initiative that will not only provide our students with opportunities to work in multi-disciplinary teams for real 141 5/7/08 - PARKS & COMMERCE - RES. 080337 clients, but will also support recent alumni and young entrepreneurs as they seek to develop new creative businesses. My hope is that that will be up and running next year. So I'm assuming we're going to go on with the panel, but, of course, I'm happy to answer questions at the end of the panel.
Good afternoon. Thank you for having me, Councilwoman Reynolds Brown, Councilman Goode, and thank you, Kelly Lee from Innovation Philadelphia, as well for inviting me here today. My name is Blake Jennelle. I'm the CEO of Anthillz, an Internet start-up based right here in Center City, and I'm also the Founder of Philly Startup 142 5/7/08 - PARKS & COMMERCE - RES. 080337 Leaders, which is a grassroots network of entrepreneurs that's bringing new confidence and optimism to the start-up community here in Philadelphia. I'm here today representing our 200 members and our 100 member companies who make up Philly Startup Leaders. We have a number of our members and supporters here today and I'd like you to meet them.
If you would, if you're a member of Philly Startup Leaders or if you're on our e-mail list, if you would please just stand. (Members of Philly Startup Leaders standing.)
Thank you. I also just want to read you some of the companies that these folks represent. Again, we have about 100 companies that are members, so this is just the tip of the iceberg. Hopefully 143 5/7/08 - PARKS & COMMERCE - RES. 080337 over time you'll start to recognize these names. Some of them may become household names. We have Vuzit, Find Me, Smart Genetics, Indy Hall, Ticket Leap, Eco TV, Xercel, Finpago and my own Anthillz, of course.
So most of the entrepreneurs who you see here from our group are young and their companies are growing fast. They left their companies this afternoon to come here because they have tremendous hope about this city and they believe that we can do something about it. When we started this group less than a year ago, we didn't have any grand ambitions about it. It simply started as a handful of guys who traded war stories over drinks, and we came together for 144 5/7/08 - PARKS & COMMERCE - RES. 080337 just one simple reason, which is that starting a company is hard, and it's even harder when you try to do it alone. So what those first few of us who got together didn't realize was that there were hundreds of entrepreneurs in this city just like us struggling in isolation and looking for the help and support of their peers. In fact, we thought that the handful of us were the only ones crazy enough to launch a technology start-up here in Philadelphia. As it turned out, we were not the only entrepreneurs who thought they were alone. When we polled our members recently, we found that before they joined our group, most couldn't have named five other people like them starting start-ups here in Philadelphia. Now, of course, each of our members know dozens of their peers, if not more, almost entirely as a result of Philly Startup Leaders. By networking these start-up 145 5/7/08 - PARKS & COMMERCE - RES. 080337 entrepreneurs together, our group has transformed Philadelphia from a city where entrepreneurs struggle alone to a city where entrepreneurs can thrive together, where we can help each other write our pitches, find office space, choose a web designer, navigate the investor community, and introduce each other to the people that we all need to help us succeed. What's amazing today to me is how closely knit this community has become in less than a year. Many of our members have become close friends. One of our members just had a baby and the first thing he did was to send an e-mail to our e-mail list, which has over 150 people on it, to tell us about it, including pictures. Some of our members have gone into business together, some have found employees and consultants through our group, and a few have even found funding through introductions that they got from 146 5/7/08 - PARKS & COMMERCE - RES. 080337 their peers. So I'm proud to say today that we are thriving as a community and that Philadelphia is quickly becoming a great city for start-ups, beginning at the grassroots. But there are also some challenges we all face as start-up entrepreneurs where I think the City can help. My first suggestion may not be something that you want to hear, which is that sometimes we just need the City to get out of the way. By simplifying the bureaucracy of City government, making taxes more competitive with the suburbs and with other cities, the City could go a long way toward getting entrepreneurs to start and keep their start-ups here in Philadelphia. But you already know all this. I also have a few other suggestions, which come directly from our members. We held a leadership summit in January where together our members 147 5/7/08 - PARKS & COMMERCE - RES. 080337 developed a list of the top problems facing us as entrepreneurs. The first was lack of access to seed funding. With government funds, Ben Franklin Technology Partners, for example, does a great job for companies who have revenue already or who have a seasoned management team, but they leave behind a lot of other earlier-stage companies and first-time entrepreneurs. Many of these companies wither on the vine here because they can't raise the seed funds they need to get their companies off the ground. The City also has an opportunity to incentivize seed-stage, higher-risk investments.
You can do this through tax credits to investors who take a risk on an early stage start-up; by helping to de-risk loans from financial institutions; by matching seed capital put up by friends and family of the founders. There are also many other creative strategies available here that would increase the rate of start-up 148 5/7/08 - PARKS & COMMERCE - RES. 080337 success and would help brand the City to the outside world as a place that's open for business. The second major problem we identified is lack of access to mentors. I'm not sure what, if anything, the City can do here, but I want to mention it because you may have some ideas of your own. What we found, especially in web and software, is that Philadelphia does not have enough successful start-up alumni who can mentor our young entrepreneurs, which, in part, is a symptom of our growth, because we have so many more people starting companies now than we have alumni from a generation ago. The third major problem, in addition to lack of funding and lack of mentors, is a lack of access to talent we can afford. Early-stage start-ups have little to no cash to pay salaries, and as a result, our salaries are well below market. We try to make up with it with 149 5/7/08 - PARKS & COMMERCE - RES. 080337 equity compensation, but even this can make recruiting very difficult. I do believe that there's ample talent in this city. The problem is that much of the time people who would love to join our start-ups have to say no because they can't support themselves and their family on a start-up salary. This is a tough nut to crack, and, again, I'm not sure exactly what we can do here, but I have a few ideas for some creative ways the City might help. As entrepreneurs, first of all, we'd like to see some tax incentives targeted not only at us and our companies but at the workers who join start-ups. One approach would be to fund fellowships for people who join start-ups, in much the same way the fellowships are used to subsidize the non-profit and artistic workforces. I've also seen cities give large companies direct tax credits or even outright cash grants per job that 150 5/7/08 - PARKS & COMMERCE - RES. 080337 they create or bring to the City. In Philadelphia, for example, a grant of $3,000 to $5,000 per start-up employee could help fund the crucial first months of salary while a company brings in their initial revenues. I could go on, but beyond these recommendations, there's just so much more we could talk about, and I'd rather be brief. So really I hope this is just the beginning of the conversation. What I hope comes out today is not solutions to any of these problems, because they're very tough problems, but what I hope we leave here today with is a closer relationship between the City and those of us on the front lines at the grassroots level. There is an incredible amount of momentum in the grassroots communities, and I'm confident that by working together, we can develop some innovative policies that will turn heads here in Philadelphia as well as across 151 5/7/08 - PARKS & COMMERCE - RES. 080337 the country. The first thing we need to do to develop these ideas is to cut out the buffers that stand between the City and the grassroots leaders. I suggest as a first step that we exchange some contact information and begin working together directly. Our members are anxious to work together with you, and I hope that this is the beginning of a great collaboration to come. Thank you again to you both on Council and to Kelly Lee for having us here today.
You are very welcome. We are going to have Q and A, but I'm going to seize the moment to reassure you this is the beginning of an important conversation and we welcome an opportunity to have subsequent discussions offline.
That would be 152 5/7/08 - PARKS & COMMERCE - RES. 080337 wonderful.
Hi. How are you doing? My name is Paul Wright, and just to clarify, I'm here in the capacity of Co-Chairman of the Next Generation Branding Committee. My Co-Chair is Nick Stuccio, who runs the Fringe and Live Arts Festival here in Philadelphia. The Next Generation Branding Committee is an initiative sort of by Mayor Nutter to establish private and public partnerships around bringing more attention basically to the creative arts, with a special focus on attracting 20- to 30-somethings here to the City and connecting them both within the creative arts and outside of it. Just a quick background on myself. I run a media and technology company based in Berwyn. We started the company in 2002, and that was actually the result of a merger of my previous 153 5/7/08 - PARKS & COMMERCE - RES. 080337 company, which I started in 2000. We have 33 employees, most of which are under 35, and we dabble in a combination of radio as well as digital and mobile outlets. The Next Generation Branding Committee was basically formed with three ideas in mind. It was the impetus that there is already established, strong, creative communities here in Philadelphia and we wanted to attract those and 30 13 somethings to those existing strong 14 communities. 15 Two, new technologies have had 16 a tremendous impact on reaching and 17 engaging and interacting with the 20- to 18 30-something demographic, especially 19 those in the creative communities and 20 especially as media resources have become more fragmented and media outlets have become more fragmented. Three, Philadelphia, as stated earlier by several of the speakers, has an existing strong creative sector, but 154 5/7/08 - PARKS & COMMERCE - RES. 080337 it is not broadly known for it, nor is there a clear connection either between those who participate in the creative sector or the creative communities or those who like to appreciate those who participate in the creative communities. The general objective of the Next Generation Branding Committee was to, as I said, combine private citizens who actually work inside the creative economy and with public and semi-public workers to bring more attention to the strong creative communities here in Philadelphia, both locally, nationally, as well as internationally. We're here to extend the brand of Philadelphia to include the vibrant history, the mythology, the present and future of creative industries, especially for that 20- to 30-something-year-old demographic. The committee members span the head of P'unk Avenue, actually a professor from the University of the 155 5/7/08 - PARKS & COMMERCE - RES. 080337 Arts, people from Young Involved Philadelphia, the guys who run Ortlieb's --
The woman who runs Belita and Open House and Bindy in terms of the restaurant industry; person who runs Stick and Move, a digital advertising agency here in town; Termite TV Collective; as I said, the Fringe Festival; Tettemer behind -- originally behind Red Tettemer Ad Agency, now doing kind of free-lance PR work --
You're talking much too fast. You are talking much too fast. Your enthusiasm exudes, but we got to be able to transcribe it.
So repeat 156 5/7/08 - PARKS & COMMERCE - RES. 080337 the last three members.
My mother tells me that all the time, too, so I will do my best. The Termite TV Collective, Fringe Festival --
Right. Nick Stuccio, who is my Co-Chair actually for the Next Generation Branding Committee. Representatives of the City, actually from the City Representative's Office, Erica Atwood sits on our committee, members from GPTMC. So it's truly a kind of collaboration, primarily private sector individuals, but working hand in hand with those in the public sector or kind of semi-public sector organizations. Our mission, stated simply, is to develop channels to promote the excitement, diversity and passion of Philadelphia's creative communities, again, especially focusing on attracting 157 5/7/08 - PARKS & COMMERCE - RES. 080337 those 20- and 30-somethings to the area and retaining them in the area. Our timeline -- and just to be in full disclosure, I basically got it yesterday. So I'm kind of going through what our process has been to date, and I'll have my remarks for you tomorrow when I get those written up.
But our timeline, we are slated to speak to Mayor Nutter to make our recommendations and our presentation to Mayor Nutter in early July, basically with three deliverables: a report that kind of spans what we've been discussing, people we've been talking to, the recommendations that we're making; two, a presentation; and, three, a prototype interactive video presentation that basically outlines a lot of the ways that we believe that can bring some of the creative communities together. Currently, our status, we've 158 5/7/08 - PARKS & COMMERCE - RES. 080337 been together since January, since Mayor Nutter took office. We have done -- we've conducted surveys, a little over a hundred, members of the creative economy, spanning design, entrepreneurs in technology, advertising, literature. Basically about a hundred surveys that were qualitative in nature, not trying to do anything quantitative. It was really qualitative. Not to get to any metrics necessarily, but to give us a starting point as to where we should be going in order to make these recommendations. As we represented maybe 15 or people, we 16 knew there was 50 or 60 for every one of us, that we wanted to make sure we gained input before we started working. One of the things that came out of the survey, which actually formed the core of our recommendations, which, again, we have about eight categories ready -- we're not fully ready with our recommendations, but we will be over the next month. The four categories that 159 5/7/08 - PARKS & COMMERCE - RES. 080337 came out of our surveys in terms of regardless of the sector, regardless of the creative community, the four common themes that came out were, one, that Philadelphia needed to improve its credibility, identity and perception, both within the creative community and those who are outside of Philadelphia looking inside of it. That's one category. Two, that we needed to establish programs to increase the tolerance, openmindedness and global perspective of Philadelphia, which is especially essential in the creative communities. Three, that we need to enhance the cross-collaboration and the community connections of the creative community, and, again, that represents both creative people working together as well as interacting with those who appreciate the creative communities. And then, four, and probably 160 5/7/08 - PARKS & COMMERCE - RES. 080337 arguably the most important, which kinds of pervades all of them, is that there was an amazing solidarity in the excitement and potential that everyone that we spoke to who was here in Philadelphia, whether they were transplants or homegrown, excitement and belief in the potential of Philadelphia that just pervaded everything that they did. And so our goal was to establish what recommendations around those four categories can we then make to the Mayor in July. And kind of the fifth semi-category, and it's kind of been touched on quite a bit here in a few different ways, is getting a catalogue of existing projects. There are so many rich projects going on from so many people, so many creative people here in Philadelphia, and there's very little connection between them. One of our kind of parallel initiatives to the recommendations is to try to do our best 161 5/7/08 - PARKS & COMMERCE - RES. 080337 to catalogue them and to figure out how best to make recommendations to connect them. And if anything pervaded our discussions in our meetings, it's been that. So, again, I thank you for the opportunity to speak to the Council and for this hearing and welcome any questions.
We appreciate very much the opportunity to hear what the Administration is currently doing in this area. So thank you for taking the time. A couple of questions. Much of what Mr. Blake Jennelle spoke of we also heard in Hassan Charles' comments. Your comments mirror each other in terms of the City getting out of the way to make the lives of start-ups more comfortable, if you will, knowing that you're going to have bumps and hurdles initially anyway, but government can do better by streamlining the access to what's 162 5/7/08 - PARKS & COMMERCE - RES. 080337 required to start the business. So that affirmation was important to hear. The Corzo Center -- and let me thank you for inviting representatives of Philly Startup Leaders. Appreciate that. The Corzo Center for the Creative Economy is scheduled to open, you say, next year. Where?
Physically in our facilities at the University of the Arts. Currently, we have space set aside in the Terra Building for it at Walnut and Broad, but the specific site may change.
All of you have addressed my question, which is a running theme, what role can those of us on this side of the table do to 163 5/7/08 - PARKS & COMMERCE - RES. 080337 invigorate, if you will, an already very, very excited base of those who live in the creative economy. So that question has been answered well. Any final recommendations, suggestions, tips you want to offer us as we continue this conversation once this formal hearing is recessed?
Sure. I just have one thing that you reminded me of as you talked about making the City more user friendly to interact with and streamlining processes. It would be really helpful for start-up companies to have some sort of ambassador or account manager who can buffer between us and the bureaucracy. Personally, I've spent countless hours on hold with the Department of Revenue. I've gotten delinquent tax notices for taxes that were paid or filed. You know, the issue there is not that -- there are always going to be bumps like that, but if you there was a way that someone could help 164 5/7/08 - PARKS & COMMERCE - RES. 080337 us.
Exactly. Yeah, just a go-to person. I have this problem, I just call this person, they take care of it or tell me what I need to do rather than having my people struggling to work our way through it.
Yes. One thing I would state, which has been a theme of our own discussions as well as my own company, is that interacting especially with the 20-somethings and 30-somethings requires a much -- and Hassan kind of touched on this -- almost a much different approach to engaging them, attracting them and then retaining them here in the Philadelphia region, specifically around linking and interacting with their digital 165 5/7/08 - PARKS & COMMERCE - RES. 080337 life-styles. And right now in terms of information gathering or connecting with others or connecting whether it be to other people in your same sector or with the City, the series of websites and things like that, it's very cumbersome and for 20-somethings and 30-somethings who live on their mobile phones, who want information pushed to them, who live digital lives, aren't really reading newspapers, aren't really listening to the radio as much, I think it's very important for the City to take a look at its digital strategy and not make it a sideline. And this is kind of a theme in the media industry in general and one which I deal quite a bit with, is that you can't view kind of digital life-styles or mobile life-styles as a sideline. It really is an integral part --
-- a centerpiece, 166 5/7/08 - PARKS & COMMERCE - RES. 080337 especially for the 20-somethings and 30-somethings. So I would just recommend that that be a centerpiece of any discussions that go on.
I would just say very quickly, I want to reinforce that I see myself here as a representative of the higher education community. I think this city is remarkable for the concentration of art, design and performance facilities, not only in terms of producing students but also in terms of creating a kind of sense of community and creative critical mass around the City. So I think it is certainly important, and I would urge Council to continue to engage, not just the University of the Arts but all of the university leaders in the City in trying to develop strategies to support the development of the creative economy.
Members of our group kind of tend to have a very self-help, just-do-it attitude, and I wanted to highlight a way in which one of our members is innovating to make the City government work better that I wanted to bring your attention, an example and a model for what can become --
Yeah. The project is called iSEPTA, and if Randy will stand up and Alex, who are involved with it over here. They basically took it upon themselves -- they're mobile phone and iPhone users. They made an interface for the SEPTA schedules that you could use on your mobile phone and take it with you, without the cooperation of SEPTA, but not doing anything wrong, just pulling data and repackaging it. 168 5/7/08 - PARKS & COMMERCE - RES. 080337 And there's a lot of people who care about the City enough and are frustrated enough to just build things like this. So to the extent that maybe with these guys you can help them make an introduction into SEPTA and find a way to take advantage of what they're doing and encourage other young entrepreneurs and innovators if they see a problem, to just fix it and not ask for permission, that would be a big help as well.
Okay. Well, make sure you see Joe Meade on my staff, gentlemen. In closing, let me say thank you to Kelly Lee and Rachel Zimmerman, in her absence, who my second year in Council approached me about what we now know as the creative economy, and in her own mind had this vision of little clusters, hubs around the City where you had those in this world just really, really feeding off of each other in a good way. And X number of years later, 169 5/7/08 - PARKS & COMMERCE - RES. 080337 we now have had hearings, which will further guide and instruct us on how the City can do better when it comes to making sure that the creative economy reaches its full potential, what's been established here this afternoon. Thank you for your time and all of what you're doing on behalf of the City. Thank you very much. (Thank you.)
This hearing, I just say for the record, is recessed to the call of the Chair. Thank you very much. (Committee on Parks, Recreation and Cultural Affairs and Commerce and Economic Development adjourned at 3:30 p.m.) - - - 170 CERTIFICATE I HEREBY CERTIFY that the proceedings, evidence and objections are contained fully and accurately in the stenographic notes taken by me upon the foregoing matter on May 7, 2008, and that this is a true and correct transcript of same. ______________________________ MICHELE L. MURPHY RPR-Notary Public (The foregoing certification of this transcript does not apply to any reproduction of the same by any means, unless under the direct control and/or supervision of the certifying reporter.)