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Apr. 15, 2013 11:30 am

With 10,000 jobs, will the Navy Yard stand on its own as an innovation hub?

One of the most historic employment engines of Philadelphia is back in a new way, with more people working in the Navy Yard than ever before. Part of that success is tied to a buoyant technology business community, but at least some of that growth has come at the expense of Center City.

Rendering of the Navy Yard master plan as provided by PIDC

Full Disclosure: A number of organizations included in this story are either sponsors of or partners on Philly Tech Week, specifically related to several events constituting Navy Yard Day on Friday, April 26, including most prominently Ben Franklin Technology Partners and Urban Outfitters.
A version of this story originally appeared in the Philly Tech Week print magazine and calendar.
One of the most historic employment engines of Philadelphia is back in a new way, with more people working in the Navy Yard than ever before. Part of that success is tied to a region-wide buoyant technology business community, but at least some of that growth has come with companies relocating from Center City. Can the Navy Yard be an innovation hub in its own right?

Before RoseAnn Rosenthal became president of economic development agency Benjamin Franklin Technology Partners (BFTP) of Southeastern Pennsylvania, one of the first tech-focused organizations to set up shop in the Navy Yard, she worked at the Philadelphia Industrial Development Corporation (PIDC), the quasi-governmental organization that, among other roles, was charged with reinventing the sprawling, 20 million sq.ft. stretch of land at the southernmost point of Philadelphia.

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That was two decades ago, right around the time when the federal government shut down the Navy Yard and the Navy left, taking 10,000 jobs, or one percent of the city’s workforce, with it.

The PIDC team tasked with developing a reuse plan for the Navy Yard decided to think of part of the campus as “a place for innovation,” Rosenthal said. The team hoped to kick start the city’s physical sciences, energy and engineering sectors — a way to balance Philadelphia’s strength in the life sciences sector — and thought the Navy Yard was the perfect place to do that, given its engineering capabilities, Rosenthal said.

Fast forward to today, and Rosenthal’s vision is not only being realized, she’s a key part of it. Her agency, BFTP, which funds early-stage tech startups, along with several other tech organizations, is actively working to grow an entrepreneurial community at the Navy Yard.

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This year alone, the Navy Yard’s major tech tenants — BFTP, the Energy Efficient Buildings (EEB) Hub, the Delaware Valley Industrial Resource Center — aim to launch a business accelerator, a manufacturing incubator and an events and networking space. The group is already billing Building 100 as a major footprint of investment and innovation. The flurry of activity calls to mind the tech corridors in University City and Center City, where coworking spaces, startups and hands-on tech workshops are side by side.

And that acceleration density would just represent the Navy Yard’s straight forward tech organizations, to say nothing of companies like Urban Outfitters with its 350-person strong ecommerce team, energy-saving firm The Mark Group, motorcycle gear e-retailer Revzilla and the Philadelphia Technology Park data center, all located on the campus. All hiring IT talent — and attracting efforts like the Workshop School.

The first master plan for the Navy Yard, developed by PIDC and published in 2004, didn’t focus on attracting specific business sectors, said Will Agate, senior vice president of Navy Yard management and development for PIDC. It prioritized growing the business district more broadly, he said. But now that the Navy Yard has gained some momentum — it hit the 10,000 jobs milestone this January — the updated master plan focuses on creating more jobs around “high-tech manufacturing, natural gas and alternative energy, and energy efficient construction,” Agate told PlanPhilly last fall.

Just under half of the businesses at the Navy Yard fall into the tech or energy industry, Agate said in an interview with Technically Philly. That number, coupled with deputy mayor for economic development Alan Greenberger‘s prediction that in 10 years, the Navy Yard will be the city’s third-largest job hub, behind Center City and University City, means the corridor has the potential to be one of the city’s major tech hubs. (Showing its might, Temple University, including its Main Campus and hospital corridor, makes central North Philadelphia another jobs magnet)

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There’s boundless space for that potential, too: currently, 6.5 million sq.ft. of the Navy Yard’s 20 million square feet has been developed, Agate said. In the next ten years, PIDC anticipates development on another 6.7 million sq.ft., he said, which includes plans for a residential development and the Navy Yard’s first hotel and restaurant. Even then, there will still be roughly another 7 million sq.ft. of Navy Yard to build out, Agate said.

It’s that kind of mixed-use density that is a pre-requisite for even the beginning of a discussion of extending the Broad Street line to the Navy Yard’s doorstep — rather than the half-mile walk under I-95 from AT&T station. PIDC and Urban Outfitters already offer a shuttle system and the billion-dollar figure still make any subway extension cost-prohibitive, so companies relocating from the city to Navy Yard sprawl will continue to experience culture shock.

With all the activity at the Navy Yard (and its tax benefits), one might worry that it’s pulling attention away from the tech scene in the more central parts of the city — a community that is still very much in an early stage itself. And that criticism has come, that the Navy Yard sprawl, not yet tied into the city’s transit infrastructure, is competing with Center City clustering. Think GlaxoSmithKline’s current departure and BFTP leaving Center City for more southern pastures in recent years.

But Navy Yard leaders say they’re focused on a few specific types of technology, with energy efficient building technology being a main focus, thanks to the federally-funded EEB Hub’s vision.

That focus, Navy Yard champions say, needs space that doesn’t exist in the city core, and better in Philadelphia the city than a more distant suburb. (GlaxoSmithKline, BFTP and other Building 100 tenants don’t entirely fit in that category).

“We want to be the premiere place in the country for any company who’s innovating in the building technology space,” said Laurie Actman, deputy director of the EEB Hub, a five-year $129 million research initiative with more than two dozen partners, including Penn State University and Drexel University. “Building technology” is an industry committed to retrofitting buildings to make them more sustainable and efficient.

The EEB Hub’s stated goal is to reduce commercial energy use by 20 percent by 2020 through research on best practices, but another one of its main priorities is to build “a community of [building tech] innovators” at the Navy Yard. And the space is the perfect “testbed” for this kind of work, Actman said, because the Navy Yard has more than 250 old buildings that are prime for retrofitting.

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Along with local partners, the EEB Hub is launching a number of programs to ensure the Navy Yard’s tech community gets moving:

  • It’s partnering with the University City Science Center to open “Satellite Quorum,” the first spinoff of the Science Center’s successful events and networking space in University City. Satellite Quorum will host 10-12 events this year, Science Center spokeswoman Jeanne Mell said, specifically for the energy and building tech industry.
  • With BFTP, EEB Hub is opening the Hub Commercialization Center, a business accelerator for building technology startups. In February, BFTP also announced that it would provide up to $400,000 for retrofitting projects in commercial buildings, as part of its partnership with the EEB Hub.
  • This spring, the Delaware Valley Industrial Resource Center is launching a three-year pilot incubator to help manufacturing companies more quickly get their products to market. The EEB Hub will help on the product development side of things, while BFTP will partner on the commercialization aspect of the program.

These efforts mark the development of a new identity for the Navy Yard, an area that was devoid of any tech community back when BFTP relocated there from Center City in 2007. BFTP eventually moved into Building 100, or the “Innovation Center,” a building that used to be marine barracks.

“It was a very good move for us,” BFTP’s Rosenthal said. She likes the sense of identity the Navy Yard gives her organization. When you’re just in any old building, you don’t get that, she said. But at the Navy Yard, you’re part of something.

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Juliana Reyes

Juliana Reyes began as lead reporter at Technically Philly in July 2012. Previously, she was a city services beat reporter for the Philadelphia Daily News, as part of a project called “It’s Our Money.” She is learning to drive, learning to bike (in the city) but is an expert at taking SEPTA. She grew up in North Jersey and Manila, Philippines but she left the tropics for Bryn Mawr College, where she majored in linguistics. She now lives in West Philly.

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  • A B

    Good article, lots of exciting things happening. A couple of additions, you failed to mention the 1,500+ Navy folks that still work at the Navy Yard working on technologies of all kinds for Navy Ships and submarines. Also, while 10,000 is the highest number of employees since the Shipyard closed, the Navy Yard once employed 40,000 people during WWII, so “highest ever” would be recently.

    • http://twitter.com/christopherwink Christopher Wink

      AB,
      That too is important and something we’ve tried to quantify. We haven’t been able to get that WWII number before. Have you seen that elsewhere? We can go back to some sources to try to confirm that but we don’t have that figure independently verified from any historian or organization. Would love to include that. Thanks!
      -Christopher Wink
      Editor

      • A B

        Christopher – the best source is : The Philadelphia Navy Yard, From the Birth of the U.S. Navy to the Nuclear Age, Jeffery M. Dorwart. With Jean K. Wolf, ISBN 978-0-8122-3575-3, http://www.upenn.edu/pennpress/book/13441.html. As for the current Navy presence, they can be contacted at their HQ on South Broad St. Again, very interesting article and developments!

  • Tom

    One thing I’m curious about, there is all this mention of poaching jobs from Center City. But about how many jobs and/or companies have relocated from the suburbs or are new start-ups? If any…

    • http://twitter.com/christopherwink Christopher Wink

      I think that’s a good point to stress, and something we could do — look at the few dozen tech firms and do an analysis. Some of the more prominent recent examples are part of the Center City diaspora — like GSK and BFTP — but, as you suggest, not alone, considering EEB Hub most obviously and some North American expansions, like the Mark Group. We can circle back on that to create the data
      -cgw

    • A B

      I think it is also important to note that some of the office space “left behind” by firms that move to the Navy Yard gets backfilled with other companies (certainly URBN and other current Navy Yard tenants can attest to this), and as a whole it makes for a stronger Philadelphia if we have a net addition, or real retention of firms of all kinds.

  • thegreengrass

    Glad to see the BSS extension mentioned. The kinds of people that are getting jobs at the navy yard today aren’t going to keep driving there if expansion keeps up and traffic becomes unbearable… Center City still has that over the navy yard.