With a population of 1.6 million, Philadelphia has fewer private sector employers and jobs than other large East Coast cities, given its size, according to Census data. Business owners cite red tape, high taxes, old infrastructure and policies hostile to growth.
All too often, business owners must choose between their love for Philadelphia and the survival of their business.
Cofco Office Furnishings employs 85 drivers, designers and support staff at its base on North American Street, which the city long promoted as a “business corridor,” where big trucks can support the kind of jobs now scarce in the adjoining ex-factory neighborhoods.
“We are extraordinarily proud of our Philadelphia heritage,” owner Joan Waters, who joined the 75-year-old company 32 years ago. “And this location works very well. We own the block.
“I just hope we can stay here.”
As housing developers target the neighborhood for quick profits, Waters pushes against city plans to “beautify” her block with a median, bollards and trees that would crowd out trailers. “I fought to stop it. In my mind it would be the end of American Street as an industrial corridor, a place for businesses and jobs.”
Waters sees a lack of vision by city leaders. “We have invested millions to update our building. And the city formerly invested millions to make this industrial. It’s very frustrating to see it thrown away,” after paying the city’s “ridiculous” sales-tax surcharge, business sales and profits taxes, and water-and-sewer rates that penalize truck yards.
“This city needs jobs,” Waters concluded. “It can’t afford to scare away businesses.”
Craig Williams is president of Norristown-based general contractor Pride Enterprises Inc., which counts Comcast, University of Pennsylvania, Starbucks and Exelon as clients. Two years ago, he bought what’s now American Power Electrical Supply Co. and planned upgrades to its 63rd St. homein West Philly. He found city, state and Chamber of Commerce of Greater Philadelphia leaders ready to help an African American investor. They introduced him to big potential clients and helped him apply for state matching funds.
He thinks two years is slow progress, but he’s told it’s fast, for Philly. “Being a general contractor is a difficult thing to do for anyone. But when you’re a person of color, the hurdles may be a little higher, to convince folks.” .”
He watched the protests, police response and attacks on stores across the city after George Floyd was killed by Minneapolis police in May and Walter Wallace Jr. was killed by officers ten blocks from his building in October. “We have closed our shop sometimes, to let things blow over. But these aren’t issues you can run away from. We are staying, here, in the city, where the people are.“”
Brianna Wronko used to worry about finding lab space in Philadelphia for her medical-testing start-up, Group K Diagnostics, with its diverse crew of nine employees. Crowded in their University City space two years ago, they found a haven near Thomas Jefferson University in Center City.
By the end of October, Wronko was scouting suburban locations “at the insistence of our investors and our employees” after the latest city protests, traffic controls and Septa disruption. With plywood over windows and heavy security, the neighborhood came to look “like a military zone.” Unpredictable curfews and street closings kept staff home, as they had in May. “We missed a week due to the the way the city handled this, in response to the riots in June, and now in October we are missing another week. We are a small start-up and we can’t afford that.”
“The business people who used to lunch around Rittenhouse Square, I see them out in Media, West Chester, Phoenixville,” laments restaurant consultant Bob Rafetto. He fears it’s a longterm change: “There are 3,500 [apartments] going up just in Exton.” TV and social-media videos of the May and October attacks on city businesses didn’t help.
“I don’t see the corporate centers coming back really quickly.”
Rafetto’s suggestion: “The best thing Philadelphia could do, is have a two-year moratorium on its wage tax, on condition you work in Philadelphia four out of five days. That would give people the confidence Philadelphia still wants them. And that it’s still the cool town we know.”
Joe Holahan grew up in Overbrook, graduated from Drexel University, and co-owns Kamelot Auctions, a brick block in Port Richmond. “I live in the city, I’m raising my kids here, in a nice neighborhood. But there are large parts of the city where they have decided to let the junkies run all over the street, and that’s bad, for business and for everyone.”
He misses Mayor Ed Rendell, who Holahan said made citations for public misbehavior a priority. Criminologists argue such “broken-windows” policing punishes the poor and marginalized. But, Holahan worries, “I feel sometimes like our city has waved the white flag. The Mayor talks about helping our addicted citizens who pay no taxes and [poop] on the sidewalk. While the neighbors are afraid to send their kids outside? Cut me a break.”
Pat McMahon lived in Fishtown for 20 years. As owner of LeBus Artisan Bakery, founded 42 years ago in a converted bus at Penn, he employs 258, mostly city residents who take Septa to work. He supplies Trader Joe’s, Giant and other stores.
Growing out of the bus, the bakery moved to King of Prussia, the booming, low-tax center of highway-friendly Upper Merion Township, Montgomery County, “an absolutely ideal location.””
He’s well aware that the city “has no shortage of derelict manufacturing facilities just begging for rehabilitation.” But their streets weren’t built for 18-wheelers. “And there are all the business taxes you pay in the city.”
Abhi Ramesh, a Wharton graduate, opened discount produce supplier Misfits Markets in 2017 in Philadelphia’s Hunting Park ex-factory district. He said he wanted “to employ a lot of people in the North Philadelphia area.” and fight its poverty.
But after attracting his first Silicon Valley investor in 2018, Ramesh moved Misfits to Pennsauken, and then to Delanco, N.J., where it now employs 700.
What happened? “There aren’t many properties in Philadelphia anymore that would meet their requirements,” for storage and truck access, said Stephen Shinn, leasing manager for Mark Lane Properties, which is seeking tenants for the old site.
City residents can commute to its Jersey place, Misfits said in a statement.
The Future of Work is produced with support from the William Penn Foundation and the Lenfest Institute for Journalism. Editorial content is created independently of the project’s donors.