Financial Services : In The News

The New York Times delves into the tough situation Philadelphia faces when dealing with vacant and blighted properties -- the new Land Bank is hoping to help.

Abandoned properties, numbering an estimated 32,000 owned by both private and public sectors citywide, may be tempting targets for developers during a current real estate boom in some areas of Philadelphia. But potential buyers have often been deterred by delinquent taxes or by having to locate absent owners or determine that the owners are deceased.

Developers and city officials hope that the Philadelphia Land Bank, a recently created city program, will help sift through the labyrinth of records on vacant and abandoned lots like the Eubanks property and make them available for sale and redevelopment.

But some neighborhood residents and activists worry that developers’ efforts will lead to higher taxes and gentrification, forcing out longtime homeowners.

On Dec. 9, Philadelphia’s mayor, Michael A. Nutter, announced the transfer of deeds for 150 properties owned by the Philadelphia Housing Development Corporation, a city agency, to the Land Bank. The transfer represented the first set of buildings or lots to be taken over by the new entity.

A further 1,135 city-owned properties are to be transferred to the Land Bank by the end of 2015, beginning a process that could shift about 8,500 publicly owned vacant properties from a number of city agencies to a single entity that would become a “one-stop shop” for developers...

The Land Bank will determine whether developers’ plans are appropriate to local needs such as more affordable units in neighborhoods dominated by market-rate housing, or more market-rate development in a neighborhood that already has a good stock of subsidized properties, said Beth McConnell, policy director for the Philadelphia Association of Community Development Corporations, which advocates for the Land Bank.

Ms. McConnell said the Land Bank had the potential to clear urban blight and return land to productive use in a way that conforms with neighborhood and citywide plans.

Original source: The New York Times
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Venture capital in Philadelphia is on the upswing, especially compared with national trends. 

Nationally, the number of venture capital deals has decreased, according to a joint report released last week, yet Philadelphia is defying this trend. Philadelphia saw a 17-percent increase in total financing deals in 2012, while the national number of deals declined by 3 percent with an 18-percent decrease in total dollars invested. During the past 18 months, $1 billion has been invested in the Greater Philadelphia region companies by venture capitalists, angel funds and seed funds... Philadelphia’s status as a mecca for pharmaceutical and biotech companies as one impetus for venture capital firms to be interested in investing in the city. This years-long trend is making way for more venture capital investment in other fields as well.
Original source: The Daily Pennsylvanian
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According to the Federal Reserve Bank of Philadelphia, manufacturing in the region was up in September -- firms reported a pickup in new orders, shipments and hiring.

The survey’s broadest measure of manufacturing conditions, the diffusion index of current activity, increased from 9.3 in August to 22.3 this month (see Chart). The index has now been positive for four consecutive months and is at its highest reading since March 2011. The percentage of firms reporting increased activity this month (36 percent) was greater than the percentage reporting decreased activity (14 percent).

The demand for manufactured goods, as measured by the current new orders index, increased 16 points, to 21.2. Shipments rebounded from last month: The current shipments index increased 22 points. The diffusion indexes also suggest that, on balance, inventories and deliveries were near steady this month, while unfilled orders increased slightly.

Labor market indicators showed improvement this month. The current employment index increased 7 points, to 10.3, its highest reading since April of last year. The percentage of firms reporting increases in employment (21 percent) exceeded the percentage reporting decreases (10 percent). Firms also reported a longer average workweek compared with last month, and the index increased 15 points, to 12.2.

Via The New York Times
Original Source: PhiladelphiaFed.org
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Shared Prosperity offers "one-stop shopping" for poor Philadelphians seeking services. The program also hopes to create jobs and improve early childhood education.

But with an array of public and private agencies providing different services in different locations, many poor people here are not getting the assistance available to them that could help them find work or qualify for benefits.

In response, Philadelphia initiated an effort this summer that offers "one-stop shopping" in local outreach centers to help people get all the assistance they need — with food, housing, job training, financial counseling, child care and other services — in one place.

The effort, called Shared Prosperity, is a response to the recent growth in the number of poor people, many of whom are not benefiting from the city’s current economic recovery, said Eva Gladstein, executive director of the Mayor’s Office of Community Empowerment and Opportunity, which runs the program.

Original source: The New York Times
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New York City’s Financial Empowerment Centers provide free financial planning to residents through neighborhood organizations. Thanks to a new grant from Bloomberg Philanthropies, the model is expanding to Philadelphia (as well as Nashville, Denver, San Antonio and Lansing, Michigan).

Personalized advice, moreover, adds more value for the poor. Wealthy people could manage their own money if they chose to spend the time, and tend to have the clout and confidence to negotiate favorable terms. But most poor people have no idea about their options. They may not be aware that they can get financial aid for college or tax credits for child care. “I didn’t know what was on my credit card statement,” said Ruben Felix, a tailor who has been Jaimes’ client since September, 2011. “Only the due date.”

As part of a feature that names eight reasons why incubators are better than business school, DreamIt Ventures is among the hottest startup destinations.

The incubator puts up $5,000 for each company, and another $5,000 for each co-founder. It takes a 6% equity stake in return. DreamIt also works with Comcast Ventures to run the Minority Entrepreneur Accelerator Program (MEAP), which funds and mentors minority-owned startups.

Original source: Forbes
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A Wharton School MBA is working with a University of Pennsylvania team on a local startup that aims to make transferring money overseas more efficient, reports el-emergente.com

Edrizio De La Cruz, a recent MBA graduate from The Wharton School of Business at the University of Pennsylvania, founded Regalii and leads the UPenn team working on it. For Edrizio, It’s a personal mission. "I grew up in the Dominican Republic," Says Edrizio, "and immigrated to New York's Washington Heights neighborhood, which was probably 110 percent Dominican. But I went to high school in Queens, where I used to play basketball with Mexicans, Puerto Ricans, Colombians and Salvadorians. I quickly assimilated to each subculture. But my social circle was pretty homogeneous. Almost everyone around me was an immigrant. So I assumed that only immigrants sent money or remained connected to family in Latin America."

Original source: el-emergente.com
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The Baltimore Sun's tech blogger does a side-by-side comparison of taxes involved in starting a business in Philadelphia and Baltimore.

One thing I discovered today is that if you're interested in doing business in Baltimore, the city has a great website for helping you get started. It's called: Baltimore: Open For Business.

But it would be super-handy if Baltimore simply put all the tax, fee, and license costs on one page, so that business owners and entrepreneurs can be sure they're not missing one because they're not looking in the right place. (Kind of like what Philadelphia does here.)

Original source: Baltimore Sun
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Inc. magazine examines how Philadelphia startup TicketLeap has cashed in on the growing number of haunted houses using its online ticket exchange.

The haunt industry is bigger than you might think. The Haunted House Association, an industry trade group based in High Point, North Carolina, estimates that there are about 2,000 haunted attractions in the Unites States, which generate between 400 and 500 million dollars in ticket sales each year.  

Stanchak hopes to take a piece of that business. He says he began noticing an upward trend in haunts using the service in about 2008. The company, which ranked No. 357 on the 2010 Inc. 500 with an 857 percent growth rate and $2.1 million in revenue, now services about 200 hundred Haunts, but expects the number to rise.

Innovation within the industry is especially important for smaller haunts, Stanchak says, because it's a seasonal business. Haunts stay open from just September 1st to November 1st, so there's little room for error in marketing and logistical strategies.

Original source: Inc.
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TechCrunch takes a closer look at startup accelerator DreamIt Ventures' current crop of companies.

The current class includes students and alumni from the Wharton School of the University of Pennsylvania, Princeton, Duke, Stanford, Harvard, Yale, Columbia and MIT. Startup founders have past work experience at Google, Yahoo, Intel, Goldman Sachs and J.P. Morgan.

Five of the companies were selected together by DreamIt and Comcast Ventures, the venture capital affiliate of Comcast Corporation, as part of its Minority Entrepreneur Accelerator Program (MEAP). This program provides an extra $350,000 on top of the funding DreamIt offers for minority-led startups. The current group includes owners who are African-American, Asian, Hispanic and Indian.

Original source: TechCrunch
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Philadelphia has avoided many recession-related blues thanks in part to Mayor Michael Nutter's leadership, reports NPR.

In 2009, Mayor Michael Nutter and the City Council doubled the local sales tax from 1 to 2 percent. In 2010, they increased property taxes 10 percent. And most recently, the city's Democratic leadership raised property taxes again --3.85 percent to help pay for schools.

The tax hikes are temporary, but they allow Nutter to brag that the recession did not result in big cutbacks to city services.

"All 70 of our swimming pools are open. Every rec center is open. Every library is open. Every park is open, and all of our services are being provided," Nutter recently told a cheering crowd at the Philadelphia Senior Center.

Original source: NPR
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Teen networking site myYearbook is expected to stay in New Hope after being sold for $100 million to Latino social network Quepasa, according to Forbes.

An unknown person once said that high school is the mouse race to prepare you for the rat race. For the next generation of million dollar milennials, that race is off to an early start.

It was a simple and irresistibly practical idea from siblings Catherine and David Cook. In 2005, the 15- and 16-year-old duo decided to trade the paper version of the regular high school yearbook for the digital one. myYearbook was born, a social networking website that the brother and sister team worked with throughout high school. The founder of the site would be Geoff Cook, the other sibling to Catherine and David, who would work to hire over 100 employees with the company. myYearbook exploded in popularity and in just six years it could proudly boast $17 million raised in financing, over 20 million members, 1.2 billion monthly page views, and $20 million in revenue as reported by both MSNBC and Business Insider.

Source: Forbes

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