Here's the case for why Delaware is better off embracing Philadelphia - Technical.ly Delaware

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Feb. 19, 2018 12:54 pm

Here’s the case for why Delaware is better off embracing Philadelphia

More than 60,000 people commute daily between Delaware and Pennsylvania. The two states, and especially Wilmington and Philadelphia, are more connected than you think.

Philly is just a train ride away.

(SEPTA Wilmington map via Shutterstock)

Last fall, U.S. Sen. Chris Coons (D-Del.) gave a rousing speech to several hundred regional economic development leaders whom he called his neighbors. He was in Philadelphia.

Coons, charismatic and centrist in Delaware’s wholesome way, told the annual leadership gathering he was in Center City because he was meeting with Philadelphia Mayor Jim Kenney. On the agenda was Amazon HQ2, the frenzy-inducing bid for a 50,000-person global headquarters of one of the most influential companies of a generation. It’s the kind of thing that creates regional competition, since taxes and their subsidies follow municipal boundaries, not cultural ones.

We know how this has played out so far. Delaware’s independent bid didn’t make the first round of finalists. But Philadelphia’s bid did. Coons saw the writing on the wall well before January’s announcement:

This reporter actually asked the person sitting next to him if he’d heard Coons correctly.

Instead of looking at it like some dirty secret, Coons spoke candidly about Delaware’s long odds. He spoke with fondness about the Philadelphia residents who take SEPTA to Wilmington to shuffle into JPMorgan Chase’s offices and the Delawareans who drive to, say, Philadelphia’s Navy Yard. Maybe it’s part of a much needed culture shift for Delaware generally and Wilmington specifically.

Geographic identity is something tribal. So our relationship to it rarely makes sense. Many in Delaware’s business community, particularly its fledgling tech corner, are uneasy with how far from self-reliant it is. So in an era of urban glee, it doesn’t quite seem everyone in Delaware is sure what to make of the success a resurgent (if still deeply challenged) Philadelphia is having.

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Is a 20-minute Amtrak ride between Philadelphia’s 30th Street Station and Wilmington Station a blessing or a curse?

Does it make Wilmington more viable as a business hub or less able to hold onto its best and brightest?

Both states benefit

More than 60,000 people commuted daily from Delaware to Pennsylvania or vice versa, with a nearly equal split, according to data from the U.S. Census Bureau’s most recent American Community Survey. More than 8,000 people traveled from New Castle County to Philadelphia County, and just 2,700 did the opposite, according to the same data.

There’s more to the story, though, say transit boosters like David Curtis, a champion of expanding SEPTA service between Wilmington and Center City Philadelphia who now works for Wilmington Mayor Michael Purzycki. Curtis notes that of a 5 percent increase in overall daily usage of the Wilmington SEPTA line between 2014 and 2016, more than 70 percent of that growth, an increase of nearly 400 riders daily, happened in Wilmington’s once-sleepy Amtrak/SEPTA Station. In 2016, more than 2,000 riders were using SEPTA trains in Wilmington each weekday, many bound for or coming from Center City Philadelphia. (That year, nearly half of trips on that SEPTA line either started or ended in Delaware.)

Frequently, one of those train travelers is Zach Phillips, the baby-faced founder of Short Order Production House, a locally beloved Wilmington creative agency you might previously have known as The Kitchen.

“Once and for all, we need to embrace the Philly thing,” Phillips said. The new father lives in Center City and is among the hordes who hop on a 7 a.m. train in Philadelphia and hop off in Wilmington. “I’m dug in here in Delaware.”

Phillips started his firm here and followed his wife to Philadelphia when she got a job there. But he found he had built a network and a community in Delaware. He employs Delaware residents and is a major creative force among the state’s tech cluster — his team was behind Delaware’s clever pitch video for Amazon HQ2. Phillips is by no means alone in commuting between Philadelphia and Wilmington, as anyone sitting on I-95 southbound in the morning or on a crowded SEPTA train in the evening knows.

Regional economic development leaders don’t hide from that, of course — there’s simply a sensitivity to too closely linking with any one other jurisdiction.

“One of Delaware’s strengths as a location for business expansion is its proximity to and connection with Philadelphia, as well as its strategic location also close to New York, Washington, D.C. and Baltimore,” Delaware Labor Secretary Cerron Cade told Technical.ly. “This is a key element of many pitches the state makes to businesses, including Amazon for HQ2.”

Regionalism is popular but it has its problems too, no doubt.

The bread and butter of urban development is mixed-uses: businesses keep corridors vibrant during the day, residential helps in the evening and “experiences” fill the rest. That’s where Wilmington, the strongest urban offering Delaware has, struggles — albeit with minor successes acknowledged. The story goes that after the workday, Wilmington’s workforce leaves their downtown jobs for the suburbs (Pennsylvania or Delaware), emptying the lifeblood of the city through highways each night. So Wilmington’s North Market Street has wrestled with empty nighttime streets — and that’s fed a reputation for crime.

Part of the concern, too, is that Philadelphia’s own tech community has advanced enough that, while still growing itself, attracts the attention of young founders. Mac Nagaswami, the University of Delaware graduate and founder of homegrown favorite Carvertise, has said he’ll likely need to move from Wilmington to grow his advertising company. He started his exploration by attending the more frequent and often larger industry events in Philadelphia.

Jim Jannuzzio is the young, Delaware-native cofounder of BookBandit, a textbook exchange platform. He’s also not sure Delaware has what a young founder like him needs next: a proper accelerator, networking opportunities with investors and the like. So he, too, looks northward to start. So the cycle continues.

“People with money are going to Philly because there aren’t enough companies here, it’s about a density of companies,” said Frank DeSantis, the recently retired and well-networked former director of the Emerging Enterprise Center, a business incubator.

All this fuels discomfort with Delaware’s proximity to Philadelphia.

But the narrative is complicated. For nearly every story of a young Zach Phillips taking the train from Philly to Wilmington, there’s one of Jeanne Mell, a vice president of the prestigious University City Science Center in Philadelphia. It’s a regional institution, and she proudly straddles the two markets, serving as a prominent fixture of the Philly tech community but known in many corners of Wilmington, where she lives. Not so far from her University City office is an incubator space that houses healthtech startup RegDesk, whose CEO Priya Bhutani commutes from Claymont.

Developer and entrepreneur Rory Laitila has been a proverbial canary in the Wilmington coal mine for the last several years. His decision to move from the suburbs to Wilmington city was similarly tied heavily to transit connections to Philadelphia. The urbanist’s only complaint is that there needs to be more.

But who benefits more?

Likely because of uncertainty about whether Pennsylvania or Delaware gets the short end of the stick, the extent of the opportunity remains shrouded. Phillips noted that several additional references to Philadelphia were stricken from that Amazon HQ2–inspired “Options in Delaware” video his agency produced, lest Delaware look too reliant on some other place.

“Wilmington is less associated with Center City Philly than places that are harder to get to from there,” said Phillips. “Philadelphia is part of our narrative, and it’s a good one.”

Stop clumsily questioning whether Wilmington and Philly are competitors that draw from each other, he said. Instead, said Phillips, Wilmington should see King of Prussia as a competitor, or Malvern or any other western Philadelphia suburb.

“We’re a city that is a suburb of Philly, a satellite,” said Phillips. His point is that Wilmington is a satellite of Philadelphia and has a very good shot at being the best of its kind.

Others have tapped into that. For years, the Archer Group, Delaware’s leading creative agency, has played this angle. As much as a third of its 100-person staff commutes to Archer’s new Wilmington headquarters from Philadelphia, says Director of Technology Frank Lee, mostly by train. Archer’s staffing split has largely followed recruiting ties, Lee said: Many of the company’s developers are University of Delaware alums; many of the company’s designers come through ties to Philadelphia’s University of the Arts.

Amid stories of other Wilmington corporate citizens leaving, 2016 featured a major win when Chemours reported it was staying because of this satellite city phenomenon. Chemours CEO Mark Vergnano also specifically cited the transit connectivity between Wilmington and Philadelphia as a competitive advantage.

“We are going through a change in our work force, and we wanted to be where we could attract millennials,” Vergnano told the New York Times in 2016. “This is a group that likes to be in an urban setting, with access to public transportation. They don’t want to be confined to a building with a cafeteria or be next door to a shopping center.”

The new roadmap

Really, the primary point is that Delaware ought to stop fretting about the prompt of Wilmington or Philly and start considering Wilmington and Philly.

The roadmap is already defined. Delaware needs to continue to articulate its strengths for business operations (in addition to incorporations) and find its specialty — legal tech and fintech remain popular. (Blockchain, anyone?)

Many interviewed for this story highlight a tricky bit of salesmanship necessary in Delaware. Though the entire state is encouraged to be part of a single business (and tech) community, many make a case for the importance of focusing on density, which tends to mean Wilmington and its major train station.

“It’s a challenge for the entire state, not just the tech community,” Short Order’s Phillips said. “A strong hub part of a bigger region is going to be good for everyone.”

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