'We have work to do': Councilmember hopes 2022 is the year city sheds its anti-business reputation.

Philadelphia City Councilman Isaiah Thomas


By Ryan Mulligan – Digital Producer, Philadelphia Business Journal

City Councilmember Isaiah Thomas is looking to make Philadelphia more business-friendly in 2022 and, for him, that involves perception as much as it does legislation.

Thomas, a Democratic at-large member of City Council, said one of the biggest hurdles Philadelphia must overcome is its anti-business stigma. While that may involve passing legislation to reform burdensome taxes on businesses or ease the process of starting a business, it is changing the perception of Philadelphia — both inside and outside the city — that is guiding Thomas' agenda in 2022.

The Northwest Philadelphia native has involved himself in a number of business-first initiatives since being sworn into office in January 2020. A little over a year ago, City Council passed his Keep it Local bill, which mandates that the city reports how much of their business is given to local companies in the procurement process. Thomas also spearheaded a City Council-backed Arts and Culture Task Force that has helped invest millions to aid the sector in its pandemic recovery.

In the opening days of 2022, Thomas has been vocal about his intentions to continue working to bring new businesses to Philadelphia and keep local companies from leaving.

"It's no secret that when you invest in Philadelphia-based businesses, those businesses help the entire city thrive," Thomas said in an interview with the Business Journal. "They help our local tax base, and continue to change the perception in America around what it means to do business in the city, as well as with the city."

In speaking with the Business Journal, Thomas laid out three main items on his agenda for 2022 that he hopes will position the city to "change the narrative" about its business climate.

Thomas called Philadelphia "a global city" and said he wants the city's tourism ecosystem to reflect that. In recent years, the city has played host to a papal visit, the NFL Draft and the Democratic National Convention. Philadelphia is currently a finalist to host the 2026 World Cup.

These events are a priority for Thomas and City Council because of the economic impact they can have on the region. More than 250,000 people came to Philadelphia for the 2017 NFL Draft, generating some $94.9 million in economic impact, for example.

Thomas said that City Council will look to work with organizations like Visit Philadelphia as well as the mayor's office to bring large-scale events to the city to stimulate tourism and the recovery of the local economy. Thomas declined to name specific events the city is going after, saying he did not want to spoil bid efforts.

Tax reform

Thomas said the continuously active and contested discussion around taxes in Philadelphia may see some progress this year. The city finished fiscal 2021 with close to an $80 million budget surplus thanks to federal pandemic relief funding.

"It gives us a little flexibility to be creative," Thomas said. "If there's ever a time to be creative around our tax structure, this is the best time because we have a cushion to be able to help put us in a position to take a little hit at least temporarily in the midst of looking at our tax structure."

Thomas said he'll be working with colleagues to see how they can make it more appealing for people to start and grow their businesses in the city. Although Thomas didn't want to name specific taxes that would be targeted for reform prior to Council beginning its weekly meetings on Jan. 20, he did say that all controversial taxes would be looked at.

Philadelphia has long drawn criticism from the business community for its Business Income & Receipts Tax, its Use & Occupancy Tax and its high wage tax, which have all been burdensome for Philadelphia-based companies.

Attracting, supporting and keeping businesses

There is a simple solution to allow more local entrepreneurs to open up their businesses, Thomas said. He is looking to put together an easy-to-use website with step-by-step instructions for obtaining the licenses and permits needed for a person to start a business in the city and keep it in good standing. He said the red tape, especially around brick-and-mortar ventures and business related to real estate, is one of the biggest obstacles to starting a business in the city.

"The biggest complaint I hear is that people want to do business the right way," Thomas said. "We don't make it easy to do business the right way."

Thomas said that it's not just about attracting businesses to the city, but cultivating the ones that are already here. The councilmember said that the best way to do that is through financial resources and tax incentives that motivate business owners to open brick-and-mortar spaces and stay in Philadelphia. Thomas said that too often business owners feel like they "hit a ceiling" in Philadelphia and look for growth elsewhere.

"The city pushes people out, forces people to have to see that growth and expansion in other places in other markets," Thomas said.

Outside of small business support, Thomas pointed to one sector in the city with opportunity for rapid growth in 2022 and beyond.

"I would definitely look at coding and technology," Thomas said. "One of the things that we're seeing is everything is virtual more than any other time. And I think if we're looking at the opportunity for folks to expand businesses, we have to incentivize people to start those types of businesses and grow those type of businesses in Philadelphia."

Thomas said that expanding the city's "brand" necessitates looking outside of Philadelphia's traditional "eds and meds" reputation. That means being part of one of the fastest-growing fields in the world.

"We have to find a way to compete in that space because our city offers social experiences and other experiences that make people want to live in our city," Thomas said. "But right now, our reputation isn't such that makes that person want to start their business here. That's our charge right now. Until we can compete with the rest of the municipalities on the East Coast, and then eventually across the country, we have work to do."

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