Taxes, storm water and doing business in Philadelphia

Kevin Cramton, CEO of Cardone Industries, the city's largest manufacturer, with his "baby." (April Saul / Staff Photographer)

Cardone Industries is a Philadelphia business with a 43-year history, but its CEO, Kevin Cramton, is a relative outsider, having come to lead the family-run firm in August, 2012.

As the head of the city's largest manufacturing company, Cramton wasted no time in getting involved with the city, joining Mayor Nutter's manufacturing advisory commission. In my Leadership Agenda interview, I asked him about doing business in Philadelphia.

"I’m on this commission," he said. "We had some independent advisers and Philadelphia ranked near the bottom in terms of its lack of favorability as a business climate from the tax policy standpoint, from the regulatory standpoint. It wasn’t a surprise, but at the same time, Philadelphia and this greater area compete for employers on a global scale."

I asked him to elaborate.

"A lot of people who may be well meaning put burdens on companies that don’t create any economic value," he said. "It almost may sound nice in theory, be it environmental, or those kinds of things."

He took a minute to refer to the city's initiative, a few years ago, to charge enterprises with large parking lots more money for storm water management.

"That was multi-million dollars – and I’m not sure what the benefit was," he said. "It’s those kinds of things. Getting a permit, getting something done, our taxes are relatively high and unfortunately, in many cases, the variability can be significant.

"We get surprised and then everything seems to be negotiation and the negotiation is not high value-added," he said. "All of a sudden, somebody has to go spend time with the city trying to intervene and understand and negotiate a compromise that’s favorable."

I interviewed Cramton in late September. On Oct. 9, I picked up a press release from Philadelphia Water Department and the Philadelphia Industrial Development Corporation. Cardone was awarded $2.5 million to build four stormwater facilities to treat storm water runoff on its 50 acres -- the largest grant out of $4.7 million awarded to a total of 17 businesses, schools and community groups.

Click here to Monday's blog post.

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