West Philadelphia’s Success Story Shows Economic Power of Innovation

Over the past half-century, west Philadelphia’s University City district—located across the Schuylkill River from Center City—has morphed from a blighted urban neighborhood into a thriving mixed-use hub for higher education, health care, and tech startups. In the process, it has become a template for other old industrial cities striving to remake themselves.

But now, with yet another wave of development in progress in west Philadelphia, panelists at ULI’s 2016 Spring Meeting explained that their successful model for public/private partnerships must undergo further evolution.

Creating successful innovation clusters, they said, requires development leaders to do more than assemble land and draw up plans for shiny new buildings. They also must figure out how to diversify and attract a wider range of for-profit businesses, and nurture and retain local workforces with the requisite skills to attract major companies. In addition, they need to work to provide educational and job opportunities for residents of struggling neighborhoods on the periphery of their projects, so that development spreads the prosperity around rather than create sharper divisions.

The panelists included representatives from the University of Pennsylvania, Drexel University, the University City Science Center, and Wexford Science and Technology, a realty company specializing in biomedical development. All affirmed their commitment to creating a next-generation model that goes beyond the existing “eds and meds” formula.

“It’s exciting to watch this industrial city transforming into something that’s much more dynamic and supporting an innovation agenda,” said Craig R. Carnaroli, an executive vice president at the University of Pennsylvania.

In March, Drexel University announced that it is teaming up with private developer Brandywine Realty Trust to transform a stretch of asphalt parking lots and obsolescent industrial buildings between the campus and the 30th Street rail station into University City’s latest annex. The $3.5 billion expansion, Schuylkill Yards, is intended to accommodate Drexel’s still-growing student body, which now numbers 26,000, while also creating space to attract tech firms, biomedical labs, and startup companies.

That project in some ways is the latest step in an evolution that began back in 1963, when land acquired through urban renewal provided a location for the University City Science Center, the oldest and largest urban research park in the United States. The center, whose 31 nonprofit shareholders include numerous area universities, hospitals, and research institutions, provides lab and office space for both startups in need of an incubator and established outfits.

Stephen S. Tang, chief executive and president of the University City Science Center, said the 93 companies that have “graduated” from the center now employ about 15,000 people in the Philadelphia region. The center generates an estimated $9.4 billion in economic benefit to the region, according to its website.

Tang said the challenge now is “how to extend the dramatic success, now that its pump has been primed.”

Panelists said they were looking ahead to a point at which an influx of major private companies and investment will gradually supplant institutional involvement.

“The tipping point for me will be when we can attract a large major biopharmaceutical entity that will want to take advantage of the assets we have there,” Carnaroli said.

Wexford Science and Technology vice president Joseph Reagan Jr. said that he saw the next stage of University City’s development as greater diversification. “This is a chance to move beyond ‘eds and meds,’ ” he said. “As much as I’d like to see Glaxo or Eli Lilly, I’d rather see a big data company.”

Meanwhile, the universities and other institutions in University City have teamed up with private sector real estate interests to help create more employment in neighborhoods surrounding the innovation cluster. One such program, which seeks to recruit and provide employment training to local residents and then match them with “soft skill” jobs with universities, managed to create jobs for 150 people, 93 percent of whom are still at work and earning an average wage of $13 per hour.

But to see more progress, Tang said it is imperative for the city to improve its public educational system. “The clock is ticking,” he explained. “We’ve lost a generation of students. And we’ll lose a generation of millennials, once they have to make decisions for their kids. It’s a systemic problem.”