Philly Department of Commerce Pushing Hard to Support City’s Life Science Growth

By Mark Terry

June 20, 2023

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Philadelphia has been ranked #5 in the U.S. as a life science cluster, catching up to Boston and San Francisco. The Winter 2023 Philadelphia Life Science Market Report published earlier this year by Colliers, noted that Philadelphia ranked as the second-best regional hub for cell and gene therapy growth. The same report also ranked Philadelphia fourth in human capital.

The city boasts a high density of top-level life science research institutions, such as the University of Pennsylvania, Temple University, Drexel University, Children’s Hospital of Philadelphia (CHOP), The Wistar Institute, to name several. It is also considered the birthplace of cell and gene therapies.

Sam Woods Thomas, Senior Director, Business Attraction Retention for the Philadelphia Department of Commerce, told BioBuzz that the initial growth of the life sciences in the city and region was serendipitous. But as companies began to spin out from the universities, and startups looked for talent and real estate, Philadelphia as a life science cluster began to grow. 

Thomas notes that after recently attending BIO and speaking with companies both nationally and internationally, “the thing that became more and more apparent in terms of biotech company growth was real estate and timeline to real estate delivery, and talent.”

Programs related to Talent and Real Estate are two of the top areas that the city continues to invest heavily in, but what has made these programs really stand out and become successful is the amount of private sector commitment and involvement in them.  The industry is heavily vested in building Philadelphia’s infrastructure to deliver what is needed to keep growing as a market, and that’s a true differentiator to the Philly life science community.

Thomas and Rebecca Grant, DVM, Director, Lifesciences & Biotechnology, Office of Business Development and Workforce Solutions, City of Philadelphia Department of Commerce, spoke with BioBuzz about ongoing programs the city has implemented to help address those two factors, real estate and talent, and to further stimulate the city’s life sciences ecosystem.

1. Quality Jobs Program. Launched earlier this year, the Quality Jobs Program invests in eligible businesses that are creating new full-time jobs in the city. The goal is to attract and retain businesses while also incentivizing employers to hire Philadelphia residents for jobs with good pay and benefits.

Grant said, “This incentive is based on the number of employees. It requires that these employees are paid a wage that is well above minimum wage and that they have benefits, such as health insurance. They have to commit to a growth rate of 20% for the full-time workforce.”

For example, if a company has five full-time employees, it can qualify by creating one new full-time job. For businesses with more than 25 full-time staff, they commit to at least five new full-time jobs.

Thomas added, “The Job Creation Tax Credit came about in such a way that it’s going to allow us to not only incentivize smaller companies that are hiring Philadelphians but there is a component that will allow us to incentivize larger companies that are looking to come to Philadelphia for jobs being created. The program is structured in such a way that it will pay the company at the end of the one-year grant agreement, $5,000 for each new job created up to 25 jobs.”

2. Workforce Solutions Grant. This program “invests in programs from organizations that strive to elevate evidence-informed approaches to address specific challenges Black, brown, and other historically disadvantaged Philadelphia residents face when preparing for and entering the workforce,” according to this year’s March announcement. 

Grant said, “We’re investing about $450,000 in training programs at the Community College of Philadelphia and University Science Center. This will prepare Philadelphians for those careers in science.”

This year in addition to those two programs, Per Scholas – Philadelphia and Congreso de Latinos Unidos, Inc. received funding from the program. UCSC will use the funding to expand its Building an Understanding of Lab Basics (BULB) programming. Congreso de Latinos Unidos plans to expand its Human Services Pathway Program and partnership with Peirce College. Per Scholas will use the money to provide free technical and professional skills training and job placement to students. Community College of Philadelphia is focused on addressing the workforce shortage in the Cell and Gene Therapy (CGT) sector with programs for Manufacturing Associate 1 and Aseptic Technician jobs.

3. Keystone Opportunity Zones (KOZ). KOZs are designated by the Commonwealth of Pennsylvania as areas that would benefit from additional investment. One of the benefits to businesses in these zones is exemptions from most business taxes. The target sites are abandoned, unused or underutilized.

Thomas said, “The Keystone Opportunity Zone is a parcel-based program that essentially creates a 10-year tax abatement for pretty much every state and local biotech hub, as well as Navy Yard biotech hub. When a company comes to us and says it needs a large space, what economic incentives do we have, we are generally able to find the company a Keystone Opportunity Zone site that works for them. And it means large tax savings.”

Moving Forward

The city is planning other programs, with one, the Good Jobs Challenge, expected to be announced in the fall. In addition, Pennsylvania’s new governor, Josh Shapiro, “has taken a vested interest in the innovation economy,” Thomas said, “and the energy has been tremendous from our partners at the Governor’s Action Team in the Department of Community Economic Development. With the state, we expect to see much more investment coming down the pipe within the next year or so. As you know, Philadelphia is the #5 ecosystem nationally, and that has happened organically. We have been lightning in a bottle in much the same way that Boston was. We’re not as advanced as Boston, but with the investment from the Commonwealth, which you see in every other very successful life sciences region, we expect to be able to be even more competitive.”

Grant added, “How do we continue to do this and how do we get buy-in from the companies to create these sorts of opportunities? Part of that is funding and part of that is the companies seeing the success of our programs. Now that we have that concept, I think it’s really going to go far. People are looking and they’re listening.”