COUNCIL OF THE CITY OF PHILADELPHIA COMMITTEE ON COMMERCE AND ECONOMIC DEVELOPMENT - - - Room 400, City Hall Philadelphia, Pennsylvania Thursday, January 22, 2009 1:15 p.m. - - - PRESENT: COUNCILMAN W. WILSON GOODE, JR., CHAIR COUNCILMAN FRANK DiCICCO COUNCILMAN BILL GREEN COUNCILMAN CURTIS JONES, JR. COUNCILWOMAN BLONDELL REYNOLDS BROWN RESOLUTION 080816 - Resolution authorizing the Committee on Commerce and Economic Development to hold hearings to review the effectiveness of the City's Job Creation Tax Credit Program. - - - 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. This hearing is called to order. This is a public hearing of the Commerce and Economic Development Committee on Resolution No. 080816. My name is W. Wilson Goode, Jr., Chair of this committee. I note for the record that to my left is Councilman Bill Green. To my right is Councilman Curtis Jones and Councilman Frank DiCicco. That does constitute a quorum, but a quorum is not necessary. The title of Resolution No. 16 080816, authorizing the Committee on Commerce and Economic Development to hold hearings to review the effectiveness of the City's Job Creation Tax Credit Program. We're going to bring up one panel: Deputy Mayor Andy Altman, Revenue Commissioner Keith Richardson, PIDC President Peter Longstreth. (Witnesses approached witness 3 1/22/09 - COMMERCE - RESOLUTION 080816 table.)
It's my understanding that you will be testifying as a panel. We will hold questions until after everyone testifies. You can start in any order that you'd like. Just please state your name for the record before you begin your testimony.
Good afternoon. Andy Altman, Deputy Mayor for Planning and Economic Development and Director of Commerce. Good afternoon, Chairman Goode and members of the City Council Committee on Commerce and Economic Development. I am pleased to testify on the Job Creation Tax Credit Program. Joining me on the panel are Revenue Commissioner Keith Richardson and Peter Longstreth, President of the Philadelphia Industrial Development Corporation. While I will provide a general overview of the program, my colleagues will, respectively, review specific program 4 1/22/09 - COMMERCE - RESOLUTION 080816 performance to date and outline the benefits of the program as a marketing tool for businesses of all sizes looking to locate or expand in Philadelphia. The Job Creation Tax Credit Program was established in May 2002 to encourage businesses to expand employment within the City of Philadelphia. It is based on the Commonwealth of Pennsylvania's Job Creation Tax Credit Program and offers a credit against a firm's Business Privilege Tax liability for each new job created. Subsequent amendments raise the allowable credit a firm receives to the greater of $1,000 or two percent of wages paid for each new job, and offer a credit of $5,000 for employers that hire ex-offenders. The program can be utilized by companies of any type or size located anywhere in the City. The Department of Revenue is designated to implement and oversee the program. We know that the Job Creation 5 1/22/09 - COMMERCE - RESOLUTION 080816 Tax Credit has the potential to be a powerful incentive for economic development, but to date, it has not been utilized to the extent possible by Philadelphia firms. Specifically, program participation has never approached the annual cap of one percent of the prior year's Business Privilege Tax collections, approximately $4 million in any given program year. It is imperative, especially in the current economic climate, to find creative ways to stimulate job creation. The Administration is in the process of undertaking an analysis to understand how the program is currently being utilized, whether the level of incentive per job is appropriate and how to increase accessibility of the program to the most participants. We look forward to working with the Council to implement program adjustments as needed. I'd like to thank you for the opportunity to testify regarding the Job 6 1/22/09 - COMMERCE - RESOLUTION 080816 Creation Tax Credit and look forward to answering questions. COMMISSIONER RICHARDSON: Good afternoon, Chairman Goode and members of City Council Committee of Commerce and Economic Development. I am Revenue Commissioner Keith J. Richardson. I am here to testify on the City's experience with the Job Creation Tax Credit Program. As you know, the Job Creation Tax Credit Program is administered by the Department of Revenue and provides approved companies with a non-refundable tax credit against their Business Privilege Tax for the creation of certified new jobs in Philadelphia. Application forms and procedures were developed and incorporated in amendments to the Business Privilege Tax regulations which became effective at midnight on March 23rd of 2003. gov/revenue, and other local government websites related to economic development. The Job Creation Tax Credit Program offers credits against a firm's Business Privilege Tax liability if they create either new jobs or increase the 9 number of employees by at least 20 10 percent within five years of the 11 designated start date. Program 12 participants must also commit to 13 maintaining operations in Philadelphia 14 for five years. The annual amount of 15 credits available for award is limited to 16 one percent of the prior year's total 17 Business Privilege Tax collection. Of 18 that amount, 25 percent is reserved for 19 small businesses and firms that hire 20 ex-offenders.
21 To apply for the Job Creation 22 Tax Credit Program, interested firms must 23 submit applications to the Department of 24 Revenue. Upon acceptance to the program, 25 an agreement is executed between the 8 1/22/09 - COMMERCE - RESOLUTION 080816 business and the City that sets forth the designated start date and the number of jobs to be created. A business has up to five years to create the agreed-upon number of jobs. Upon doing so, the firm asks the Department of Revenue to certify the number of jobs created and wages paid. The Department of Revenue conducts a payroll review of the company's records to compare the number of jobs when the firm entered the program with the number of jobs at the time of review. Firms that create fewer than the agreed-upon number of jobs do not receive any credit unless a waiver is granted by the Department of Revenue. If the Department of Revenue is satisfied that the appropriate number of jobs have been created, the Department issues a certificate stating the amount of credit the firm is entitled to, either $1,000 or two percent of the annual wages for each job. The firm can redeem the certificate for the tax credit either all 9 1/22/09 - COMMERCE - RESOLUTION 080816 at once or they may spread out their redemption over three years from the issuance of the credit. The program allows companies up to eight years from entering the program to claim credits. Since the program's inception in 2002, the Department of Revenue has certified the creation of 347 jobs, resulting in the award of nearly $350,000 in Business Privilege Tax credits. A quarter million dollars of credits awarded have already been redeemed. Including the 347 jobs that have been created to date, the participating companies have made commitments to create 3,195 positions since the program's inception in 2002. At this point, however, we are not able to determine how many of these promised positions will eventually be created. Several of the participating firms are no 23 longer in business, while others still have several years to create the jobs under their participation agreements. 8 million in Business Privilege Tax credits would be awarded. In 2008, three new companies received approval to participate in the program, together projecting 46 jobs in Philadelphia. This brings the total number of participating firms to 43. In addition, eight firms are currently in the application process. Thank you, and, again, I'm here for any questions you may have.
Good afternoon, Mr. Chairman and members of the Committee. My name is Peter Longstreth, and as the Deputy Mayor indicated, I am the President of the Philadelphia Industrial Development Corporation, and I'm here today to testify regarding Resolution 080816. The Job Creation Tax Credit Program is one of a number of City and 11 1/22/09 - COMMERCE - RESOLUTION 080816 State programs that we at PIDC market to existing Philadelphia companies which are growing and to new businesses that we are working to attract to the City. Since you and your Council colleagues originated the program in 2002, PIDC has actively promoted it to our client base. We do this by distributing information about the program via our website and printed marketing materials and by highlighting the program in our various direct presentations to businesses and key intermediaries such as real estate brokers, accountants and attorneys. When a company expresses interest in the Job Creation Tax Credit, we provide the City's application materials and then direct them to the appropriate contact with the Department of Revenue. The Job Creation Tax Credit Program is, as you would expect, very well received by our clients. The 12 1/22/09 - COMMERCE - RESOLUTION 080816 program can provide a benefit to employers of all sizes and business sectors, and in that regard, we welcome any tools that the City and State can provide to help us attract and retain companies and jobs here in Philadelphia. And, Mr. Chairman, we particularly appreciate your interest and active involvement in creating these new economic development programs. Thank you for this opportunity to testify, and I'd, once again, be happy to join my colleagues in answering any questions.
Thank you, gentlemen, for your testimony. Let me note for the record we've also been joined by Councilwoman Blondell Reynolds Brown. I have just a handful of questions before I will allow other Committee members to pose questions. One of the main questions that I have, when this program was created 13 1/22/09 - COMMERCE - RESOLUTION 080816 back in 2002, as mentioned, it was patterned after the State Job Creation Tax Credit Program, and one of the unique features that we thought worked well in terms of regulations was that if a business had a State Job Creation Tax Credit certificate, they did not have to apply for a local Job Creation Tax Credit certificate because they will have fulfilled all the regulations because the local legislation was patterned after the State program. So that worked well for those people who had a State Job Creation Tax Credit certificate. But for those people who were applying for the local program first, I have heard complaints about regulations. And I think the existing program as it is should stay in existence so that it works well with the State program, but if we were looking to create a new program, which I am doing and introduced legislation this morning, to look at what we might do over the next couple of years to try to jump start job 14 1/22/09 - COMMERCE - RESOLUTION 080816 creation, do we know what sort of regulations we might want to waive in that program yet? COMMISSIONER RICHARDSON: Chairman Goode, I don't think currently the regulations that we have in place, and especially within the Department of Revenue, we wouldn't want to relinquish. Again, with the certification from the State would be good. However, they can't certify our taxes that may be owed by a business in the City of Philadelphia. So that will be my major concern right there if we were to partner with them on doing something like that.
My question is more probably related to, for instance, the regulation to create at least jobs or increase the payroll by 21 20 percent. Would that be necessary if 22 we were to launch a new program? Might 23 it be to our advantage to have a second 24 program that would not require that? 25
I think, 15 1/22/09 - COMMERCE - RESOLUTION 080816 Councilman, one of the things we do want to collectively look at is how this program is operating, and I think that's one of the issues we need to look for. I mean, I think we are concerned of the way it's currently crafted, that you have to promise that you're going to meet a certain number of jobs. Now, although that can be waived and you can apply for that, I think the question of providing more certainty to an employer so they don't feel they have to go through an exception process, maybe there's a way we look at based on how many jobs you actually create, you can get the credit. Again, that's something we need to look through in terms of streamlining the process. And just, again, I think one of the important aspects of this program, as Peter Longstreth pointed out in terms of market psychology, is, it sends a message in terms of job creation. So the easier we can make it, the simpler we can make 16 1/22/09 - COMMERCE - RESOLUTION 080816 it. Those are some of the administrative things we want to look at.
The second question is, when I look at how these jobs were created over the six years of the program, I see a majority of interest in the program was in the first year, and I'm assuming because that's associated with the legislation being passed, people acknowledging it as a new program and the marketing of the program when it was first launched. Are there any new suggestions for how to market a program? I mean, if we were to create a new program, of course, that will grab attention, but say we don't create the new program. Are there any new ideas about how to market the existing program in a new and more effective manner?
I don't have any sort of magical answer to that, but I do think we as a city generally can publicize the opportunities that we have 17 1/22/09 - COMMERCE - RESOLUTION 080816 better, and I think this is a case in point, that launching some kind of public statement about the program, particularly if it were enhanced, would tend to reacquaint the public with the opportunity.
I would just add, I think one of the things we're looking at with Kevin Dow, who is the Director of the Office of Neighborhood and Business Services within the Commerce Department, is putting together some materials that can go out to businesses on how to market better the incentives that we have available and some other loan products that we've been working with your office on to get the word out about what's available and actually look at ways to do direct mailings to businesses so that they're aware of this, as opposed to waiting for them to come in or having to hear word of mouth. I know the Mayor has been very interested in looking at what kind of direct mailing we can do to 18 1/22/09 - COMMERCE - RESOLUTION 080816 people to make them aware, particularly now in this climate.
Two other real quick questions. How many of the Job Creation Tax Credit participants of the 43 are PIDC clients? Do we know that?
Yeah. Of the -- and I say 51, because I think it's 43 plus the eight applications. Twenty-four are clients that we have contacts and active communication with, and 11 are existing clients who have received services from PIDC.
And I guess the last question is, of those clients that are PIDC clients, is the Job Creation Tax Credit usually packaged with some other incentive?
Yes, it is. I mean, that is kind of the definition of those 11 clients, is they're receiving some other service or product from PIDC.
Okay. Thank 19 1/22/09 - COMMERCE - RESOLUTION 080816 you. Councilman Jones.
Good afternoon, gentlemen. It is a good afternoon, right?
It's going to be fine. If we were to try to in a meeting bring you a client to say what other types of tax credits, other incentives based on a location within the City of Philadelphia, what would be your punch list of those incentives? COMMISSIONER RICHARDSON: Well, as we work with PIDC and the Commerce Department, we provide any potential business coming to the City or who is within the City the punch list of all the tax credits that we provide, the Green Roof Tax Credit, Job Creation Tax Credit. We'll talk about the KOZ with them. We'll talk about the PREP program with 20 1/22/09 - COMMERCE - RESOLUTION 080816 them as well. If you look at our website or our Tax Talk Guide, we provide all the tax credits. We believe that we need to share everything with any potential business or businesses in the City of Philadelphia currently.
Yeah. I was going to say in the typical meeting that we would have, there are kind of four areas of potential incentives. One relates to land, and there's a whole obviously story there; other low-cost financing; tax incentives; and the whole workforce development piece. Those are kind of the four, and they each have kind of a family of incentives that can be offered.
I would just add another aspect of it, which is helping them through the regulatory process. I mean, one of the, I think, greatest incentives that we have or one of the 21 1/22/09 - COMMERCE - RESOLUTION 080816 barriers is the concern about how they move through the different regulatory bodies in the City. So what does License and Inspections do, what do they need from the Water Department, what do they need from Planning Commission or Zoning Board. So one of the things at the Commerce Department we're doing is -- this is something that PIDC has run for many years and we're now expanding on this program -- is what we're calling a Major Projects Review. By "major project," it can just be something that's significant or a project that needs help from multiple departments, where we have a regularly scheduled biweekly meeting. They can get on the agenda. All the departments are there. They can raise whatever concerns they have, and then we can help track them through the process. That gives them both time -- helps them in terms of understanding the time of approvals and hopefully gives them more certainty into the process. And we're 22 1/22/09 - COMMERCE - RESOLUTION 080816 also trying to make reforms of our development process, because we know that there are a lot of concerns about the different review bodies and how we can make them more efficient.
Question, follow-up: If in fact tomorrow we had a company that was willing to make solar panels in the City of Philadelphia and they were willing to take the Budd site, a particular area within the Budd site, let's say the Youth Study Center once it's vacated, and we knew the square footage, the number of employees and the type of business that was going in there, what would be the total sum of incentives and what would be their value? Could we estimate their value in a meeting with a client today?
The answer is yes. I mean, I think we do that pretty regularly. A lot depends on the specific proposal and what they're looking for. As I think Peter pointed out, there are 23 1/22/09 - COMMERCE - RESOLUTION 080816 these different buckets of things, they need help on the land side or the financing or workforce. But what's generally done is to put together a package based on what they are looking for, and then we quantify that value and say, This is worth X to you. We can do that.
So how long does that take to do, just out of curiosity?
Obviously at a conceptual level, almost immediately. At a very detailed level, it just depends on the specifics of their plan and the requirements that they have.
So there is a one stop that if we send a client tomorrow, they would be able to get a value of what those incentives totally ranging from state, federal, city incentives based on location?
And the key driver, as we all know, in that kind of an equation and in the aggressiveness of the offer is job creation. That's really the key element. If they're creating a lot of jobs and it's obviously a credible project, there's a lot of things that can be done. If they're retaining or contracting jobs, that's a much more difficult equation.
So if we, for the record, for our other members, if we had a client that was prepared tomorrow, who do they call and where do they start in this process?
You'd call my office, call the Commerce Department, and we would immediately set up -- I'd bring all the parties together. I mean, that's one of the advantages of this structure in the way the Deputy Mayor's Office works, is that we can bring together PIDC, Revenue, whatever it may be. If it's a housing issue, if it's a land 25 1/22/09 - COMMERCE - RESOLUTION 080816 issue, we can bring together all of the different departments. We actually all work closely together on a sort of almost daily basis on different projects.
That being the case, having served in another Administration, then that is an improvement. If that is in fact doable, to be able to do that in a collective manner and be able to quantify it within one meeting, that is an improvement. And we will test you. We will test you. Thank you, Mr. Chairman.
Thank you, Councilman. Are there questions from other members of the Committee?
Good afternoon, gentlemen. Thank you for your testimony. And let me commend Councilman 1/22/09 - COMMERCE - RESOLUTION 080816 Goode for circling back five, six years later really to see where we are and how well this program is operating. To the issue of marketing, in this type of economic climate, I think we as a government have to figure out ways where we maximize the use of these type of incentives. And so help me out. Before it was known as the Mayor's Business Action Center?
And today it's called -- I know under the new Administration, it's been reconfigured, a new paradigm, and that is the?
Okay. Now, with that and to Councilman Jones' tickler list, is this program a part of that package that is a send-off for businesses that come to this new office?
Absolutely. It's 27 1/22/09 - COMMERCE - RESOLUTION 080816 part of the -- absolutely. On the list of things that the City can offer, we put down all the different opportunities.
Let me just say, because I don't want to mislead anyone, we do need to produce marketing materials that I think more -- that more effectively communicate the range of programs we have.
Yeah. I think that's an area we still need to do work in. I mean, I think when people come to us, we can give them a sheet of paper. We have different sort of -- a sheet on job training, a sheet on the tax incentive program, a sheet on this piece, or PIDC has materials, but I think one of the areas that we're focused on and, again, with Kevin Dow as head of this office, is producing an actual Philadelphia marketing material. I think 28 1/22/09 - COMMERCE - RESOLUTION 080816 we're missing that. I mean, there's a lot of marketing that happens to Select Greater Philadelphia, which is to market the region, but then we need our piece specifically, and I think that's something that is very important, particularly in this climate, so that people are just even aware. As you can tell from the numbers, a lot of this is just even awareness of what's on the books.
Absolutely, yes. Awareness is always the first step. And when you look at this grid, it can be somewhat disconcerting when you look at the extent to which it has not been utilized. So we hear from you that you recognize marketing is a challenge. Is that to suggest then that that's on your hit list for action for this year?
Okay. And Councilman Goode has already addressed 29 1/22/09 - COMMERCE - RESOLUTION 080816 PIDC with regards to those who have taken advantage of the program. In this testimony on , second paragraph, last sentence, it says, "Firms that create fewer than the agreed-upon number of jobs do not receive any credit unless a waiver has been granted by the Department of Revenue." Might you be able to tell us the number of waivers that the Revenue Department has granted over the life of this program? COMMISSIONER RICHARDSON: Since inception of the program, none.
Okay. Back to the question of marketing, do you believe there's potentially a role for all of the chambers, the Greater Philadelphia Chamber, Hispanic, African American Chamber? Because I'd be curious to know the extent to which the leadership of those organizations are aware and make it a part of the regular meetings or conferences or gatherings 30 1/22/09 - COMMERCE - RESOLUTION 080816 that they have amongst their membership. Might you know? Can any of you speak to that? Have any of the chamber leaderships been brought in to be informed and enlightened about the availability of this incentive?
I know we try to reach out in coordination with the City to the different chambers to try to better access their constituents as it relates to the products that we believe are particularly useful to those particular groups. So that's something we've done. We could probably do it better.
Okay. So to our Commerce Director, can that be a part of this broad strategy you're trying to pull together? Because to the extent that leadership promotes, lifts up anything new and/or different, it becomes an opportunity for membership once it's sanctioned, endorsed or embraced by the leadership, and those organizations seem 31 1/22/09 - COMMERCE - RESOLUTION 080816 natural dot connectors for this measure.
I agree, and we would be happy to do that and pull that together, just have a kind of informational and -- I think particularly we can go through all the different incentive programs that are available now so everyone knows about them. We can even discuss how are they marketing them, do they need assistance marketing them. So I'd be happy to do that.
Okay. Finally, timelines and deadlines are always useful and helpful. So on this marketing measure, can you speculate or project by when there might be a marketing plan designed to promote not just this incentive offered by government but a list of them, knowing that you're still on the developmental phase, if you will, of the roll-out of the kinds of things you want to do in your department, Commerce Director?
I think we're 32 1/22/09 - COMMERCE - RESOLUTION 080816 hoping that -- we've actually been talking about this. I think within the next six months we'll have something to be able to get out. We want to design it. We want it to look good. We want to get that right information. So that's what we're hoping, within that period of time.
Okay, then. Thank you for your testimony, gentlemen. Thank you, Mr. Chairman.
But I would sort of emphasize what I hope is kind of obvious, which is the marketing effort will obviously continue, but it will be without the ideal materials to support it, but the effort itself is ongoing all the time.
Thank you, Councilwoman. 33 1/22/09 - COMMERCE - RESOLUTION 080816 Councilman Green.
Thank you, Mr. Chair. Thanks for coming in this afternoon. Councilwoman Brown asked most of my questions, which had to do with marketing, but I just wondered if you could please provide the Chair with all printed marketing materials or online materials that describe incentives that are used today marketing, any kind of incentive, whether it's a tax incentive or where the KOIZs are or anything like that, just so we can see what we have today, because -- well, if you could provide that to the Chair. The other thing is -- and I think I got the answer to this question, it's probably no. Is there any one place I can go online or one publication that exists today that describes all these incentives?
I mean, certainly the incentives that are offered 34 1/22/09 - COMMERCE - RESOLUTION 080816 through PIDC, which relates to largely the land and the financing, you can go to our website.
No, no. I appreciate that. But I think the list itself is probably something that needs to be divided up. It's a pretty long list.
Okay. COMMISSIONER RICHARDSON: All tax credits are on the Revenue's website with the applications as well for the various programs that we offer.
But you have 35 1/22/09 - COMMERCE - RESOLUTION 080816 to know what you're looking for. COMMISSIONER RICHARDSON: It's explained to them when they're looking for credits or opportunities with the City within the Department of Revenue. We do have it listed.
Let me address your question, because right now you can see you can go on to PIDC or different websites and/or Commerce website and then it has links to all the others, but one of the things we're doing is actually going to create a business website so there's one place you can go in and it's sort of a portal to understand all the business incentives. If you have a question, you don't sort of have to know the answer before you ask the question. You can say, I want to find out I need a permit. Where does it direct me. And we're actually in the process of building that, and hopefully I think that's going to be within the next -- the third quarter of this year. We actually are 36 1/22/09 - COMMERCE - RESOLUTION 080816 working with Allan Frank, our Chief Technology Officer. It's a high priority on his list, a high one on ours, because exactly that problem.
That's great. And as part of the architecture of that, I'd like to suggest you build in the capability for people to fill out fields and not forms so that forms can be automatically generated electronically and we can eliminate paper from the process of bringing businesses to the City of Philadelphia. And if you could just keep the Chair updated on that effort, I think that's tremendous. Thank you.
Thank you, Councilman. Councilman DiCicco. COUNCILMAN DiCICCO: Thank you, Mr. Chairman. Good afternoon, gentlemen. On that same line of questioning, cities, states advertise tourism, as an example. 37 1/22/09 - COMMERCE - RESOLUTION 080816 GPTMC puts a lot money into that: Come to Philadelphia, visit Philadelphia, what-have-you. Is there any program in place -- I mean, a company comes to you by what means? Do you reach out to companies? Do you know what companies might be looking to set up shop somewhere and you try to woo them to Philadelphia, or is there a mechanism, an advertising tool that, Come to Philadelphia, think about setting up your business in Philadelphia today because Philadelphia has the following opportunities or incentives, as opposed to what we're always tagged with as being the highest wage tax in the country. There are some really great incentives that offset that. So at the end of the day, the wage tax may be the highest or close to the highest, but when you factor in some of the other issues, it may make more business sense to come to Philadelphia. So in that context, is there 38 1/22/09 - COMMERCE - RESOLUTION 080816 something that is done on a more global way of getting the message out?
Yeah. I mean, you mentioned GPTMC, which obviously was created and is kind of the model for this in the tourist side of the business, and I think very much patterned on that the Select Greater Philadelphia Organization was kind of conceived and created. In both cases, they have a regional focus. And I think what Andy commented on and what we've perceived generally is, they're great in the region, but they don't emphasize our point of interest, which is the City, and that's what we have to -- that's the hole we have to fill. So I think they do a great job, and interestingly enough, kind of at the other end of the spectrum, you have something like Center City District, which has a much tighter geographic focus, which, as you know, does a great job also, but it's that hole in the 39 1/22/09 - COMMERCE - RESOLUTION 080816 middle where selling Philadelphia as a city distinct from the region and larger than Center City needs to be done, and that's what we're talking about. COUNCILMAN DiCICCO: Okay. Thank you. No further. Thank you, Mr. Chairman.
Real quick, because to move the Chair's agenda. As we start to look at -- when you first came on a year ago -- it's been a year, right?
Not yet. I have two more months, but that's okay. COUNCILMAN DiCICCO: It feels like ten.
You mentioned recruiting in clusters, going after specific types of industry in clusters and a synergy. Is this a part 40 1/22/09 - COMMERCE - RESOLUTION 080816 of a total effort? Are you still inclined to think that way?
Yeah. We're doing a number of things along that front. I mean, first of all, one of the things I should say that we want to do, particularly in this economy right now, is looking a lot to our base. And what I mean by that is that a big part of our business effort now is understanding, for example, the education and medical industries that are, say, one of three jobs in the City, very significant. They have a number of major projects they're doing. They're still spending a lot of money. So we're doing things, for example, like meeting with universities, meeting with the hospitals and healthcare associations, trying to understand where they're headed in this economy, where the job opportunities are, how to connect to small businesses, what jobs are going to be created, how to connect to job training. So very much a targeted 41 1/22/09 - COMMERCE - RESOLUTION 080816 approach around understanding some of our industries, and we're starting to do that in a number of different sectors. We're looking also with manufacturing. We've been meeting with a number of the manufacturing entities. So we are going along that approach. Obviously Center City District has a very good handle on the office market. So they're very attuned to the office and retail sector and what the needs are. Right now there's a lot of outreach to each of these, putting together what projects they have and where we can be helpful working with them. And it's a pretty impressive list of projects that even in this economy are projected. We're going to have a master list, which I would share with the Chair and the Committee, probably within the next, I'd say, 60 days of looking at just all the capital projects and expenditures that are going to occur over the next 24-month period of some of these major 42 1/22/09 - COMMERCE - RESOLUTION 080816 institutions and employers in the City so that we can intersect with them, make sure we're facilitating those projects, because those are ones that continue to create jobs for us.
As we do that and as we take tools like what the Councilman has put forth in this tax credit, we need to kind of look at areas such as Hunting Park or Parkside, business/industrial parks, and figure out instead of looking at them as blighted areas, look at them as blank canvases that can be attracted to in clusters. My thought, as Councilwoman Reynolds Brown and I look at the green zones and green job opportunities, that if one of those places could be transformed into the Silicon Valley of the technology and green technology, can we do a marketing strategy to get people to attract themselves to that location or those locations and figure that they can do both B to C, business to consumer, but 43 1/22/09 - COMMERCE - RESOLUTION 080816 also business to business kind of opportunities because of their close proximity and synergy. So as we start to look at that, as opposed to just accepting whatever comes our way, and like Mikey will eat anything, kind of attract businesses and almost in a chaotic sense strip away the potential of a kind of cluster, if you would. And if we could do that and kind of use these tools to attract them, that would be something that we would be inclined to do. Thank you, Mr. Chairman.
Thank you. With respect to the Job Creation Tax Credit Program, I just wanted to say that, one, every person who applies for a new business privilege license, you may want to consider letting them know about this program as part of 44 1/22/09 - COMMERCE - RESOLUTION 080816 that, because obviously if it's a new business, they're creating jobs. The other places that you should, I think, actively market are The Enterprise Center, there are new companies coming in there every month; the Baiada Center at Drexel, which is for entrepreneurs; and every major university has an entrepreneurial center or a small business center, et cetera. Venture companies, they're all creating new jobs. And it seems to me like fairly straightforward to go where the jobs are being created and make sure people are taking advantage of this, because once a company has been here a few years, if they have not taken advantage of this program, they leave because our tax -- once they start making profits, our tax structure sends them out to the Route 202 corridor or elsewhere. If they've been brought into this program in the beginning, we'll have offset a lot of the taxes that cause them to move. 45 1/22/09 - COMMERCE - RESOLUTION 080816 So we ought to start where the entrepreneurial activity is, and that may help us retain companies in the future. I just wanted to share that. Thank you.
If I may, just quickly on that note, actually about two months -- it was before the holidays. About a month and a half ago, there was a conference here of venture capitalists and it was also with start-up companies that were really literally just starting up. They're in the idea formation stage, thinking about how they're going to go to kind of proof of concept and to the next step. I went and spoke to them. There were probably 200, 300 people there, just getting the word out that this is there, that the City is interested, that we have this kind of incentive available. Part of that is just aggressive marketing, sort of a hands-on marketing. So I appreciate that point.
Thank you. 46 1/22/09 - COMMERCE - RESOLUTION 080816 Any other questions from members of the Committee? (No response.)
Is there anyone else to testify on this resolution? (No response.)
Thank you, gentlemen. I look forward to working with you on the possibility of creating a new program during this point where I think we need some additional stimulus, but also on continuing the existing program. And so we'll be in touch. This hearing is recessed to the call of the Chair. Thank you very much.
Thank you. (Committee on Commerce and Economic Development recessed at 1:55 p.m.) - - - 47 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 January 22, 2009, 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.)