Philadelphia Could Be A Gold Mine Of Value

February 27, 2012

(March 2012)

From City Hall comes the call, "there's gold in them thar hills."  Or, at least, our elected officials have put forward some ideas about how to capitalize on the value of the City's assets.  That's great news.  Capitalizing on our value instead of bemoaning our needs is a big step forward.

For too long, a beggar's mentality has dominated City financial thinking as leaders have gone hat-in-hand to Washington, Harrisburg, and Philadelphia taxpayers asking for more and more and more.  Now, some creative thinking is changing that conversation.

In recent weeks, Mayor Nutter released a report that contends that (under the right conditions) the City could realize hundreds of millions of dollars by selling the collection of assets known as the Philadelphia Gas Works.  Council President Clarke suggested that the City should generate revenue by selling advertising on municipal property.  Councilman Goode wants to ensure the City generates real benefits from the City-owned properties used by SEPTA in upcoming City/SEPTA lease negotiations.

Rather than further burdening Philadelphia’s overtaxed residents and employers, our leaders are demonstrating some imagination.  We should absolutely encourage such creative thinking and we should certainly go further. 

More than a decade ago, I pondered this consideration of the value of the City and advised City leaders to think big as part of the book I wrote with my colleagues when I worked in the City Controller's Office, Philadelphia: A New Urban Direction:  

“City leaders must understand the value the City creates as a marketplace.  Despite population loss, millions of individuals use Philadelphia as a place to live, work, and play….By taking advantage of its true value in the marketplace, the City can further increase marketplace amenities or reduce the costs of entry into the marketplace.”  

In other words, by capitalizing on the worth of the City, we can generate additional revenues to expand services or reduce taxes!  Just like Russell Conwell admonished us, there are acres of diamonds in our back yard.

In the book, we detailed ways the City could realize revenues, from leasing rooftop space on City buildings for telecommunications towers and antennae; by selling used and surplus municipal property in a City store; and through marketing City expertise in areas such as public-safety training to private firms.

We showed how other cities have generated millions by selling exclusivity and the right to be the exclusive beverage for all municipal events, or the right to be the exclusive credit card used to pay municipal taxes and fees.

We discussed programs pioneered in other cities to bring costs of licensing and permitting into line with the costs of City enforcement, to charge appropriate fees for the use of City rights of way, to coordinate the marketing and rental of municipal venues for private functions, and to effectively utilize advertising revenue to (tastefully) enhance the City’s collection of street furniture.

From opportunities to sell the naming rights for civic sports and entertainment venues to prospects to license the merchandising of City-owned icons like the Liberty Bell, Philadelphia has many opportunities to capitalize on the value of its assets.  While it may be noble to honor civic icons by naming buildings for them or to allow private firms to free use to sell tchotchkes of City-owned property, it might be better still to generate value from those assets and then invest those funds in making Philadelphia a preferred place to live, work, and visit. 

While the desire to generate revenues must absolutely be weighed against the threat of making Philadelphia look like a NASCAR vehicle, it is clear that an appropriate balance can be struck.  Other cities and local jurisdictions have demonstrated convincingly that we do not have to sacrifice taste for cash.

Philadelphia, despite any of the challenges it faces as a city, is still a teeming metropolis. That marketplace provides value.  If we can be wise (and careful) stewards, we can generate revenue from that value to invest in our future. 

We are not always choosers when it comes to issues of municipal finance, but in so many ways, we are not beggars either.  It is good to hear our elected officials embrace the idea of capitalizing on the value of our municipal assets.  There's gold -- or at least revenue to be found in “them thar hills.”


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