New Blood: Has Allan Domb Lost His Mind?

Condo King Allan Domb shocked the establishment by running for City Council. He hopes he’s just the first business macher to get off the sidelines.

Allan Domb ticks off the names, and the list reads like a heavy-hitter who’s who of Philadelphia. He’s committed the names to memory, all of those nice and uber-successful friends he sees on Rittenhouse Square every day, all saying some version of the same thing to him: “Have you lost your mind?”

When the 59-year-old real estate tycoon and restaurant owner (he’s partnered with, among others, Stephen Starr on numerous projects) announced what seemed to be his quixotic run for City Council, the establishment took note. For a long time, the business community in Philadelphia hasn’t done politics. They’ve been a part of our transactional culture—donating to campaigns, seeking favorable policies for their business interests—but they have shied away from wading too far into the cesspool and trying to help fix things. Power has long been outsourced here to elected officials.

That may be changing. Philly 3.0 is a PAC put together by a group of prominent businessmen, intent on altering the makeup of City Council. (In a sign of just how scared the business community is of the cutthroat pols that hold sway here, 3.0 is not releasing the names of those bankrolling the independent expenditure venture). And now comes Domb, unafraid to step out from the shadows and seek to make a difference in a very public way.

Has he lost his mind? Or is Domb some master Machiavelli? A recent news report floated ungrounded speculation that he’s a Darrell Clarke stalking horse; by exceeding $250,000 in self-funding donations to his campaign, he can trip the “millionaire’s provision” which would ease fundraising limits for other candidates, something that is of great value to Clarke’s favored incumbents.

Domb came to Philadelphia in 1977 and started working at Phelps Time Lock Service, selling and servicing mechanical locks for $14,000 per year. At night, the belching of his muffler-less ’63 Impala announced his arrival at Howard Johnson’s, where he’d wash dishes. Meantime, he started attending real estate classes at Temple.

“What is that?” Domb asks of the cynical press speculation. “How does that come to be printed?” Welcome to the world of Philly politics, Allan. Ironically, it turns out, Domb’s entry into the race did come about from a conversation with Darrell Clarke. But it wasn’t one about some backroom deal. It was, instead, a discussion that reignited his inner idealist.

Two years ago, when the city was shuttering over 20 schools, Clarke asked Domb, president of the Board of Realtors, if he could hazard a guess as to how much those buildings would fetch on the open market. Domb said he doesn’t shoot from the hip. So he spent some time doing due diligence. He visited each school, walked around the neighborhoods, talked to residents. He ventured into areas of the city he’d never seen, and was aghast. “I told Darrell, some of the schools were saleable, some were usable, but a good many were disastrous,” he says.

Domb took his assignment one step further. He suggested an innovative solution for the neighborhoods that were suddenly on his radar screen. He advised Clarke to create a Keystone Opportunity Zone and offer the shuttered schools to companies for free if they’d hire 10 percent of their employees from the 10 blocks surrounding the school.

“The idea didn’t go anywhere, but it made me say to myself, ‘You’ve got to get more involved with the city,’” Domb recalls. “My grandfather served in World War I. My father was in World War II. Philadelphia has been very good to me over the past 35 years. I said, you know what, what have I really done in terms of community service?”

Domb was born to modest means, but with an entrepreneurial gene. Growing up in Fort Lee, New Jersey, he shined shoes for 25 cents a pair—as a four-year-old. When his grandmother bought him books, he started a lending library for neighborhood kids—making a profit off the late fees. He had two paper routes; one, at 5:30 am, delivering The Hudson Dispatch, the other, after school, hawking The Bergen Record.

He came to Philadelphia in 1977 after graduating from American University (which he attended at night so he could work during the day), and started working at Phelps Time Lock Service, selling and servicing mechanical locks for $14,000 per year. At night, the belching of his muffler-less ’63 Impala announced his arrival at Howard Johnson’s, where he’d wash dishes, or at H.A. Winston’s restaurant at 15th and Locust, where he’d fill in for the short order cook. Meantime, he started attending real estate classes at Temple. By 1980, he was holding down two fulltime jobs—one at Phelps Time Lock, the other as a realtor. In 1982, he left Phelps, and within five years was the top residential realtor in the country. He’d read somewhere that you can “make a living selling real estate, but you create wealth by owning it,” so he got into the development game. The rest is history: 220 Washington Square in the late nineties begat The Barclay begat his investment in Stephen Starr. An empire was born; today, Domb has 4,500 employees.

He attributes his success to attention to details, and to his understanding of the market. As he did when Clarke asked him to divine the value of the closing schools, he intuits value from walking the streets and taking the temperature of his potential customers. He has come to believe that politicians ought to do the same.

“We have a store called the city of Philadelphia,” Domb says. “One out of every four people in our store is in poverty. If you have only three-quarters of your customers able to pay, you won’t stay in business. So we’ve got to help them. We’ve got to connect them with real opportunity, so they’ll be able to shop in our store. But we also have to bring more people into the store, so we chip away at our overhead. We have 400,000 people in poverty. So what a businessman does is set a goal. We need to go from 400,000 to 300,000 in four years. Get the poverty rate down to 20 percent instead of 26.”

“We have a store called the City of Philadelphia,” Domb says. “One out of every four people in our store is in poverty. If you have only three-quarters of your customers able to pay, you won’t stay in business. So we’ve got to help them. But we also have to bring more people into the store, so we chip away at our overhead.”

Like other Type-A entrepreneurs, Domb admits to having hundreds of ideas—and not a terribly high percentage of them will pan out. But those that do will have impact. He is passionately pro-Philadelphia. He won’t go to King of Prussia; when Nordstrom opened a Nordstrom Rack in Center City, Domb fired off an angry letter to the department store headquarters in Seattle, Washington. “I took it as an insult,” he says. “What, we’re not good enough for a regular Nordstrom’s?” On his computer screen, he has taped a line borrowed from Nike: Do It Now. (“Steal one idea and it’s plagiarism,” he says. “Steal many and it’s research.”)

Spend any time talking with Domb and the ideas come, breathless and nonstop. He wants local companies to adopt city schools and provide a curriculum to help train their future workforce. He wants local colleges and universities to take their often common motto—“go forth and serve”—and reverse it; why not serve before going forth?

“We have 30,000 college graduates every year,” Domb says. “I want to go to them and say, to get a degree in Philly, you have to do 100 hours of community service. Think about the impact a four-year mentoring program could have, where public school kids have someone to look up to and learn from. And where college kids learn about community service.”

He looks at the success of the Navy Yard and wonders why it can’t be replicated. “We need a project like that in Northeast Philly,” Domb says. “Something that would recapture all those businesses that left for Burlington, New Jersey.”

It may be met with complaints from those on the political left, but Domb points to the success of Center City’s tax abatement on new construction as the model for an investment in neighborhoods beyond the upper income ones he caters to. Citing a study that shows the abatement rendered $2 in new tax revenue for every $1 in abatement, Domb wants to take the concept on his own tour of Philadelphia, to the areas of town his fellow denizens of Rittenhouse Square don’t often get to see. For every home renovation of $25,000 and any sale under $250,000, he wants to abate taxes for twenty years. “This is how you revitalize parts of North, West and South Philly, Tacony, Bridesburg,” he says. “For every home that’s blighted on a block, it costs the other houses $8,000 in value. This provides private incentive and it requires no government action other than freezing the taxes.”

Domb uses words like “outrage” when touching upon the $1.6 billion over the last thirty years in uncollected taxes owed to the city, but he marries that emotion with a businessman’s emphasis on planning. He points to an innovative program  in New York City instituted by then-Mayor Michael Bloomberg, under which collections have risen from 85 to 99 percent of all outstanding taxes; Domb, who has already talked to officials in New York, thinks a similar program could work here. And the percentage that can’t be collected? “Write it off our books,” he says. “If you’re running a $4 billion corporation called Philadelphia, you can’t keep that negative on your balance sheet.”

Perhaps most important of all, Domb says his type of experience in business is badly needed in government. From his restaurants, he learned that success is 49 percent regimentation – “you have to make sure the table is set right” – and 51 percent hospitality: “Customers will come back if they have a bad meal but you remember their names and give them their favorite table.” Ed Rendell understood this about government: It’s all about customer service. Only Ed took it a step further, according to Domb. “Ed was actually 100 percent hospitality,” he says. “And David Cohen was 100 percent regimentation.”

Of course, all this entrepreneur-speak carries with it its own risks in these politically- fractious times. As a result of the Great Recession, and the failure of any well-clad one percenter to be carted off to jail and publicly flogged in its aftermath, a backlash to the Allan Domb’s of the world has taken hold. There is skepticism that those in the one percent can stand for the common good, despite the fact that one of the most robust and just economies in history—America in the mid-20th Century—was helped, and not hindered, by men named Kennedy and Rockefeller. Like them, Domb is talking about smartly investing in the have-nots, in providing opportunity, in growing the economic base. Like that previous generation of entrepreneurs- and businessmen- turned- politicians, he’s practicing solutions-based capitalism. He sees markets as a potential force for social good. But he’s well aware of what stands in his way, an increasingly ideological “soak the rich” mindset on the left, which itself is a response to the ideological, Ayn Rand-inspired “go it alone” mindset on the right.

“My answer is, do you want to fix the schools? Do you want to create jobs? Well, business has to be part of those solutions,” Domb says. “I’m hoping I’m just the first. I’m asking others in the business community to step up, because they have the ability to bring ideas and expertise to these problems.”

So has Allan Domb lost his mind? He laughs at the question, and is perplexed by its frequency. “Here’s my position,” he says. “This is why I’m doing this. How often in life do you have the opportunity to help 1.5 million people? Not often. I owe the city of Philadelphia. I want to help make it better tomorrow than it is today.”

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