Nutter touts job-luring as big drug co. goes local
October 29, 2010
Catherine Lucey, Philadelphia Daily News
Job creation is Mayor Nutter's new mantra as he gears up for his re-election bid.
Flanked by Gov. Rendell and U.S. Rep. Allyson Schwartz, Nutter yesterday announced that generic-drug company Teva Pharmaceutical Industries is expanding into Northeast Philly, with plans to create hundreds of jobs.
Nutter touted the announcement as proof that a job-luring campaign titled "Smart City, Smart Choice" is working. The campaign's glossy brochures promote the city's affordable rental rates and workforce costs, as compared with other East Coast cities'.
"Philadelphia has location, location and more location," Nutter said. "Now is the time, and believe me, we are the place."
Teva, the world's largest generic-drug maker, plans to build a $295 million distribution center at Red Lion Road near Bustleton Avenue. Rendell said that the Israeli company had been given $4.7 million in state grants and tax credits to seal the deal.
This is the latest in a series of economic news conferences that Nutter has been holding recently. Last week he announced that a British green-energy company, Mark Group, would open its U.S. headquarters at the former Navy Yard with plans to hire 300.
The Philadelphia job story has been unrelentingly bleak for decades as manufacturing work has left the city. The city's downward trend has continued under Nutter, in part due to the economic recession.
When Nutter took office in January 2008, the city had about 652,000 jobs, according to the Bureau of Labor Statistics. In August, that number was 639,000.
Steven Wray, executive director of the Economy League of Greater Philadelphia, said that the city has lost jobs during the recession, but that the local economy seems to be stabilizing.
"The big drops have been in places like construction, which you expect," said Wray. "Our hospitals and higher-education facilities continue bouncing along. Not at the levels they were at three years ago, but still growing."
Senior Deputy Commerce Director Duane Bumb said that the city has put a series of tax incentives and educational programs in place to try to lift employment rates. Educational attainment in the city is low, with just 21 percent of residents holding a college degree, according to the city.
"We have to provide businesses the tools they need to be successful," Bumb said. "One of the tools is a qualified workforce. Educational attainment is largely an economic-development issue here."
But, as the Nutter administration promotes a vision of a stronger jobs future, another city politician is traveling around boardrooms and business meetings with a much bleaker argument.
That would be Councilman Bill Green, who is pitching a radical change to the city's business-tax structure. At a meeting last week before the Pennsylvania Intergovernmental Cooperation Authority, he argued that the city is a cheap place for businesses to relocate because its tax structure is a disincentive.
"The reason we're low cost is because there's no demand to be here," Green said.
Green and Councilwoman Maria Quinones-Sanchez have introduced legislation that proposes shifting the city's business-tax burden from the net-income tax, which taxes profits, to the gross-receipts tax, which taxes sales.
Green and Sanchez argue that this would spread the tax burden more fairly and remove the disincentive to locate in Philadelphia. Nutter said that he needs more information about who would be the winners and losers under the plan.
The "Smart City" brochures don't detail how the city's tax structure stacks up against nearby cities'. Nutter said that the city wanted to feature clear-cut cost comparisons.
"Taxes are not the number one deciding factor for many businesses," Nutter said. "We think we have something to sell here. We think we have something to offer."
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