2014

Technology Transfer and Commercialization in Greater Philadelphia

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Econsult Solutions, Inc. (ESI) and CEO Council for Growth, an initiative of the Greater Philadelphia Chamber of Commerce, have teamed up to release the Technology Transfer and Commercialization study, which examines the Philadelphia region’s economic growth into the future.

The study sought to lay a road map on how the Philadelphia region can further capitalize on its culture of innovation and entrepreneurship while measuring how the region stacks up with other leading regions around the country.

The study also set an “overachieving” goal for the region’s research institutions to create 10 companies that will grow to a liquidity event of $100 million or more over the course of next 10 years.

Results found that the Philadelphia region scored well in research categories due in part to its dense array of institutions of all sizes and disciplines. Conversely, the study also found that the region lacks in activity when compared to other leading regions. In fact, the highest ranked regions were found to boast two or more times activity than Greater Philadelphia. The region’s dense array of institutions has not translated to equitable amounts of commercialization when compared to other leading regions.

In order to grow the region’s commercialization output, the study recommends the following steps:

  • Funding – Public and private sector participation should be recruited to fund additional pre-venture capital funds and business acceleration services.
  • Advocating – The region should advocate for policies at all levels at all levels of government that demonstrate a commitment to innovation as an economic driver.
  • Collaborating – Collaboration must be encouraged, particularly through the use of shared space and shared equipment. A particular focus should be placed on elevating the work of the region’s engineering schools, given the promising intersections of engineering and health care, engineering and energy and engineering and advanced manufacturing.
  • Promoting – The region’s leaders must work together to promote the region as an innovation hub, making particular appeals to venture capital firms seeking deals, young research and entrepreneur talent seeking a place to learn and grow and established entrepreneurs with regional ties who can help grow the next generation of start-up ventures.

Economic Impacts of Newark, N.J’s Amended Rent Control Ordinance

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Econsult Solutions, Inc. (ESI) was commissioned by the Newark, N.J. Apartment Owners Association, Inc. (NAOA) to measure the economic and fiscal impacts of recent changes in the city of Newark’s rent control ordinance. The city of Newark recently amended its rent control ordinance in an attempt to tie rental increases into the changes in the U.S. Consumer Price Index (CPI) and to require greater rehabilitation investments when a unit becomes vacant to qualify for larger rent increases.

This study provides a conceptual and empirical framework for assessing the impacts of changes in the newly passed rent control ordinance on Newark’s apartment community, the city’s economy and the city’s municipal finances. This is accomplished first by understanding conceptually and then using actual data for the city to decipher how rent control affects rents in Newark and how those rental impacts affect the investment decision making among apartment owners and potential investors.

Limiting rent increases to the CPI in conjunction with a dramatic increase in the required threshold investment for larger rent increases upon vacancy will result in disinvestment, declining quality of apartment communities and adverse impacts on Newark’s neighborhoods.  Moreover, these changes will have significant negative impacts on employment and economic activity in Newark and will diminish the city’s tax base and tax revenues, which will put greater pressure on Newark to reduce essential public services such as education, safety and recreation.

ESI estimates that the recent changes in the ordinance will:

  • Reduce capital improvement investment in apartment communities by $3.3 million annually
  • Reduce decontrol-related investments by $17.9 million annually
  • Reduce annual maintenance expenditures in apartment communities by at least $4.0 million
  • Lower the quality of living in apartment communities

Philadelphia Community Sustainability Initiative Report

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On July 30, 2014, ESI President, Stephen Mullin, The Reinvestment Fund President of Policy Solutions, Ira Goldstein and the City Council’s Housing and Community Development Executive Director, Herb Wetzel, participated in a press conference to announce an innovative, data-driven strategy to measure quality of life indicators in every Philadelphia neighborhood. This conference explained the targeted policies, planning and budget decisions that will enable Philadelphia to achieve its full potential as a prosperous, forward-thinking city. The Community Sustainability Initiative (CSI) is a challenge to residents, businesses, institutions and government to make every Philadelphia neighborhood a Community of Choice.

In collaboration with public policy consultants The Reinvestment Fund, and Econsult Solutions, City Council has compiled data on quality of life indicators across the city. The CSI establishes seven core measurements for the following areas:

  • Housing Demand: Median sales price, building permits, residential sales price
  • Housing Distress: Act 91 notices, foreclosure filings
  • Crime & Safety: rate, 311 report rate, % vacant buildings, % vacant lots
  • Education: Great Philly Schools quality rating, crime within ¼ mile of school
  • Amenities: Distance to nearest library, bank, recreation center
  • Prosperity: % cost burdened, median household income, % owner occupied
  • Commerce: Availability and diversity of food establishments, retail and personal service options

Used in conjunction with mapping technology, this data will demonstrate the health of neighborhoods based on these consensus quality of life indicators. More significantly, the data will speak for underserved communities that have not been able to advocate more successfully for themselves.

The data collection will be refined and complemented by community input, which City Council will solicit via neighborhood outreach in coming months.

Economic and Fiscal Impacts of Comcast Corporation

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OVERVIEW

Econsult Solutions, Inc. (ESI) prepared a study on the Economic and Fiscal Impacts of Comcast Corporation on the city of Philadelphia and Commonwealth of Pennsylvania and Proposed Comcast Innovation and Technology Center. ESI assessed the economic impact of Comcast Corporation in Philadelphia and Pennsylvania, and its newly proposed development project, the Comcast Innovation and Technology Center, which will be located along the 1800 block of Arch Street in Center City. The study evaluates the direct and indirect impacts that Comcast operations have yielded in the City of Philadelphia and Commonwealth of Pennsylvania since the opening of the Comcast Center at 17th and JFK Boulevard in 2008. The study also projects the direct and indirect economic impacts the construction and ongoing operations of the new Comcast Innovation and Technology Center will yield for the City and Commonwealth, which will include a Four Seasons luxury hotel and restaurant and infrastructure improvements.

The combined economic impact of Comcast’s current and expanded operations will be significant in its reach and impact. The new Comcast Innovation and Technology Center will contribute to job support and tax revenue increases through a rich spillover effect that includes commercial development, property value enhancement, and charitable contributions. Among the report’s key findings:

• The construction period of the Comcast Innovation and Technology Center is expected to have a total economic impact of $1.7 billion in the City and $2.8 billion in the Commonwealth through its direct and spillover activities. The economic activity generated from the construction period is expected to provide an estimated $16 million in tax revenue to the City and $67 million in tax revenue to the Commonwealth.

• The construction period alone will yield an estimated 20,700 temporary jobs in the Commonwealth, 6,300 of which will be in the City of Philadelphia.

• The office, Four Seasons hotel, retail, and restaurant operations in the Comcast Innovation and Technology Center and their spillover activities will create an additional economic impact in the City of $720 million annually and over $1 billion annually in the Commonwealth. The operation of the new building and its spillover activities are estimated to increase annual tax revenues to the City by $22 million and by $31 million to the Commonwealth.

• Comcast’s current operations, including the Comcast Center, and the spillover activity it generates total $2.7 billion annually in direct and indirect economic activity in the City of Philadelphia and over $5 billion in the Commonwealth of Pennsylvania. (This is more than double Econsult Corporation’s initial economic impact forecast conducted in 2008, which indicated Comcast’s operations would generate $1.16 billion annually in direct and indirect economic activity in Philadelphia and is more than triple the $1.65 billion in direct and indirect economic activity estimated in Pennsylvania.)

• Of this activity, Econsult estimates that Comcast’s current operations and spillover activity generate $131 million per year in taxes and fees for the City of Philadelphia and over $404 million per year in taxes and fees for the Commonwealth.

• We estimate that from 2009-2023, Comcast will generate, both directly and indirectly, a total of $213 million in revenues for the School District of Philadelphia.

• Since the construction of the Comcast Center, even with the recession period, property values in the immediately surrounding area of Comcast Center have increased when overall Center City property values have declined. Since 2007, house prices within a half mile of Comcast Center have grown by 15% and by 8% within a mile from Comcast Center. For the same time period, house prices in Center City declined by 3% and house prices in Philadelphia declined by 17%.

• Since the start of construction of the Comcast Center, there has been at least 8 million square feet of new investment (new construction and major renovation) near Comcast Center, totaling about $1.5 billion in investment in Center City Philadelphia.

Econsult Solutions, Inc. constructed an economic impact model using multiplier data provided by the US Department of Commerce Bureau of Economic Analysis to conduct this report. This allowed estimation of the scale and composition of the construction and operations activity’s spillover impacts. ESI also constructed a fiscal impact model to translate these spillover impacts into their commensurate temporary and permanent expansions in various City and Commonwealth tax bases. Therefore, they translate into increased tax revenues for the City and Commonwealth tax bases.