Philadelphia Industrial Development Corporation (PIDC)
John Grady has more than 20 years’ experience in planning, negotiating and implementing public-private development initiatives. Since 1998, John has served in a number of leadership positions with the Philadelphia Industrial Development Corporation, Philadelphia’s economic development corporation, where he currently is President. Prior to joining PIDC, John worked for nearly a decade with the non-profit Cooper’s Ferry Development Association planning and developing Camden’s central waterfront. John earned a Bachelor’s Degree in Economics from LaSalle University and a Master’s Degree in Government Administration from the University of Pennsylvania. He lives in the East Falls section of Philadelphia with his wife and three children.
Q: How did you get your start in the business?
I began my career right out of college working as a Project Manager at the Cooper’s Ferry Development Association (CFDA) in Camden, working on the development of the Camden waterfront at a relatively early stage in its progress. I studied economics in college and was interested in a career that would combine public policy and private markets around investment in cities.
Q: How has PIDC’s strategy changed as a result of present economic conditions? Have you expanded or narrowed your focus?
We’ve done some of both. In the market we’ve seen over the past few years, where investment decisions are delayed or constrained, PIDC plays a more important role in supplementing the market to get things done. Our resources are not unlimited, so we have to narrow our focus to areas where we can maximize impact. At the same time, we have broadened some of our lending programs, dedicating new resources to smaller businesses with new direct lending and loan guarantee programs.
Q: The Navy Yard has been one of your most high-profile projects in recent years, but some worry its South Philly location will draw tenants from Center City. Do you think outlying projects pose a threat to Center City’s office market?
I don’t think The Navy Yard poses a threat at all to Center City for a number of reasons.
First, we are trying to create a certain type of environment at The Navy Yard—an urban campus with mostly new, high-performance, mid-rise buildings–that competes effectively against the suburbs and acts as a gateway for companies new to the city. Center City provides a much different product—high-rise buildings, with the greatest access and amenities anywhere. We need to offer employers both, so they can always have a choice in the city.
We can’t just tell them where they should be by offering one choice. For too long, the campus user that wanted flexible buildings and the opportunity to own their own space had only a suburban choice. Urban Outfitters and GlaxoSmithKline both fall into this category. These employers wanted a different type of space to appeal to their workforce, something to support flexible growth that was not high-rise oriented.
Second, The Navy Yard is a niche market for office, with probably 1-1.5 million SF of office space occupied and much of it by the Navy’s engineering headquarters in renovated buildings they own. We hope to grow to maybe 3 million SF over time. Center City will always be a bigger, more dominant market that appeals to a much deeper and broader set of employers.
Third, developing a vibrant urban campus at the edge of the city actually reinforces the centrality of Center City, much like the dynamic we see in University City and the emerging activity along North Broad Street, Northern Liberties and Fishtown. Connecting everything by transit makes it all work together.
Q: Tell us about PIDC’s public relations and social media efforts. What is your strategy to engage with the community?
Our primary strategy around all of our communications, whether through print, social media or traditional public relations, is to tell the story of our clients and what we can do to use our real estate and financing resources to help our clients attract investment, jobs and tax ratables throughout Philadelphia’s market sectors and neighborhoods. To do this, we maintain an active presence through our websites, Facebook, Twitter and more traditional outreach through annual reports and good old face-to-face meetings.
We focus a lot of our marketing on clients directly, but also on the network of intermediaries that drive investment in the city—especially bankers, brokers and lawyers. We also work closely with our founding partners at the City and Greater Philadelphia Chamber of Commerce to coordinate and leverage our messages, particularly around business attraction and entrepreneurship.
Q: What are the greatest challenges to real estate growth in the city? What are the potential solutions?
Traditionally, the greatest challenge to growth in the city has revolved around the lack of demand to drive business growth and typically the root source of that is relatively high tax and cost structure in the city versus the nearby suburbs. Since World War Two, the region has followed the trend of most other metropolitan regions, with the federal government building highways to open up cheaper, sprawling development in the suburbs and leaving the city to deal with the higher costs of poverty and disinvestment.
In the last few years, we’re seeing those trends reverse, with population growing in the city, particularly among the highly educated at both the younger (18-35) and older (55+) demographic. These populations value the urban quality of life, amenities and lifestyle more than previous generations. We’ve been seeing some significant renovation and new construction in the multi-family sector in and around downtown for some time, including work by local and national developers. Employers are now returning to the city.
Philadelphia, like any other major urban center, will never be a low-cost option. As a result, our best opportunity is to create a lower, more rational tax structure that attracts growth, and to deliver a high quality of life and value for the cost that remains. This next generational period seems to give us the best chance to make that proposition a winning and sustainable one.
Be sure to tune in next Thursday for a continuation of this interview with John Grady!
About the PIDC:
The Philadelphia Industrial Development Corporation (PIDC) is Philadelphia’s city-wide economic development corporation. Founded in 1958 as a non-profit, joint venture between the City of Philadelphia and the Greater Philadelphia Chamber of Commerce, PIDC plans and implements real estate and financing transactions that attract investment, jobs and tax ratables to the City of Philadelphia.