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Boston Financial News – Cape Wind Approval

Boston Money — Sat, 15 May 2010 12:54:11 +0000

Mass. wind farm wins U.S. approval

Massachusetts Gov. Deval Patrick, left, speaks with U.S. Interior Secretary Ken Salazar, right, after Mr. Salazar announced that the Obama administration has approved what would be the nation’s first offshore wind farm, off Cape Cod, during a press conference at the Statehouse, in Boston, Wednesday, April 28, 2010. The decision clears the way for a 130-turbine wind farm in Nantucket Sound off the coast of Massachusetts. (AP Photo/Steven Senne)

By Joseph Weber

The Obama administration on Wednesday approved the country’s first offshore wind farm, in Nantucket Sound off the Cape Cod coast, overriding protests from some environmentalist groups and local residents.

Interior Secretary Ken Salazar said he approved the project on the condition it was scaled back from 170 to 130 wind turbines and that additional environmental and historical studies be completed.

“Cape Wind will be the first U.S. offshore wind farms,” Mr. Salazar said at a press conference in Boston where he was joined by Massachusetts Gov. Deval Patrick, Democrat and a supporter of the project. “It will be the first of many projects up and down the East Coast.”

The Interior Department had vowed to make a decision by the end of April on the hotly contested nine-year-old proposal.

President Obama had not said publicly whether he supports the project, despite his green-energy agenda that includes reducing U.S. dependence of foreign oil.

The project has been divisive in Massachusetts. The late Sen. Edward M. Kennedy, a friend of Mr. Obama whose family compound is in the area, did not support the plan. Critics are concerned about the project harming the natural habitat and historical sites.

Mr. Patrick said construction will begin within a year.

States along the East Coast closely watched Mr. Salazar’s decision with more offshore wind energy projects in the pipeline.

Boston Financial News – SBA Loans

Boston Money — Wed, 12 May 2010 22:59:43 +0000

Small business loans get big lift

Another sign of a nascent recovery

By Robert Gavin, Globe Staff | June 12, 2010

Busy Bee Bakery Melrose - Elin Agustsson held up one of her signature cupcakes in her new Busy Bee Bakery in Melrose. A loan from East Boston Savings Bank helped Agustsson open the bakery. - (John Tlumacki/Globe Staff)

Massachusetts small businesses, seeing prospects improving, are borrowing more money through government loan programs to expand, hire, and start ventures, providing another sign that the state’s economic recovery is gaining traction.

Borrowing through the US Small Business Administration’s primary guaranteed loan program has more than doubled in Massachusetts over the past year, and is on track to match levels not seen since 2005. The loan activity in Massachusetts is also among the most robust in the nation: Only eight other states have had more activity over the past several months, according to the agency.

“SBA activity is a barometer of the economy, and small businesses’ access to capital,’’ said Bob Nelson, director of the agency’s Massachusetts office. “We’re seeing more optimism, more choices for businesses to get capital, and more competitiveness among lenders. There’s certainly a lot more work to be done, but we’re seeing some positives.’’

Credit has been a critical issue for state and national economies, and particularly for small businesses, a major generator of new jobs. In the wake of the financial crisis and deep recession, many banks became reluctant to lend, preferring to hold onto capital they might need to offset bad loans and weather the downturn. Many businesses, in turn, were reluctant to borrow and add debt when the economy was sliding.

“The problem has not been a lack of credit, but a lack of sales and economic activity to support that credit,’’ said Bill Vernon, Massachusetts director of the National Federation of Independent Business, a small business advocacy group. “Now, I think, we’re heading in the right direction. It’s bumpy and inconsistent, but there are more companies doing better than they were a year ago.’’

As the outlook has improved, so has SBA lending. From October through the end of March, the first six months of the federal fiscal year, Massachusetts lenders made 923 SBA loans totaling $142.3 million, compared with 443 loans worth $61.8 million during the same period in fiscal 2009.

SBA loans — commercial loans from banks that are mostly guaranteed by the US government — represent only a small slice of small business lending. In March, Massachusetts banks had more than $9 billion of small business loans on their books, down slightly from nine months earlier, according to the Federal Reserve Bank of Boston. Still, the rebound in SBA lending suggests a change in conditions. As recently as last fall, some Massachusetts businesses were complaining that they couldn’t even get SBA loans through local banks.

In addition to the surge in SBA lending, the number of lenders making such loans has also jumped in recent months, to about 120 from fewer than 90 in the same period last year.

Among the new lenders is East Boston Savings Bank, which has made nearly $2 million in SBA loans since October, according to the agency. One of those loans was for up to $300,000, and went to Elin Agustsson. Two weeks ago, she opened the Busy Bee Bakery near a Melrose commuter rail station, and created 10 new jobs — three full-time and seven part-time. Agustsson, 51, said she had dreamed for years of starting her own bakery, and decided the time was right, despite a still shaky economy.

“Even in a recession, people still need to eat,’’ Agustsson said. “The Obama administration is pushing banks to lend, and banks are looking for people, people they can count on.’’

A number of factors have contributed to East Boston Savings’s move into the small business market, including federal stimulus legislation that increased SBA guarantees to up to 90 percent for most loans, from 75 percent, said Richard Gavegnano, East Boston Savings’s chief executive. Another factor, he said, was the struggle of large national banks hurt in the subprime mortgage meltdown and financial crisis. The bank, with 19 branches in Suffolk County and on the North Shore, has added an executive who focuses specifically on SBA lending.

“With the message clear that government wants to facilitate small business lending, and the megabanks pulling back, we felt there was an opportunity,’’ Gavegnano said. “We want to participate in small business activity, and we’ve ramped up considerably.’’

Small business, which traditionally has been underserved by lenders who preferred to make larger, more profitable loans, is increasingly viewed as a growth market, local bankers said. As a result, the increase in SBA guarantees has provided incentives for some banks to break into small business lending, and for longtime participants in SBA programs to expand their lending.

For example, First Trade Union Bank of Boston, founded by the Massachusetts Carpenters Combined Pension and Annuity Funds, traditionally focused its lending on commercial real estate, bank officials said. It turned toward SBA lending last year as way to further diversify its loan portfolio, bank officials said, and has made more than $6 million in small business loans since October, according to SBA data.

Eastern Bank, the state’s top SBA lender, increased its lending eightfold over the past year, writing more than 170 loans valued at $8.5 million between October and March, according to SBA data. “The fact that we have SBA behind these loans allows us to be more confident and get credit into the hands of small businesses,’’ said Joe Riley, the Boston bank’s executive vice president of retail and business banking.

In many ways, the reliance on the SBA guarantees shows that the economy, credit, and confidence are not back to normal after the historic downturn of the past two years. Still, bankers said, the increased lending demonstrates that conditions are improving. Earlier this week, a Federal Reserve survey found that many New England businesses across several sectors were reporting solid sales and customer demand.

Such companies include Cercone Brown & Co., a Boston public relations and advertising firm. The nine-year-old company, which employs 22, recently received a $250,000 SBA loan through Eastern Bank to help it expand into a new office and nearly double its space. The company has also added two employees and expects to hire more in the coming months.

“When you get more business, you have to move into a bigger office. You need people. You need to invest in new programs,’’ said Len Cercone, a founding partner. “Small businesses are entrepreneurial, and when you add a little capital, you can turn that entrepreneurial spark into a fire.’’

Robert Gavin can be reached at rgavin@globe.com.

Boston Financial News – “The Optimists”

Boston Money — Sun, 28 Mar 2010 14:56:43 +0000

The optimists

Taking risks during the downturn starts to pay off for local businesses

By Jenn Abelson, Globe Staff | March 28, 2010

They were last year’s risk takers. They opened doors while others shuttered them. Call them crazy — many did — for expanding during the worst downturn since the Great Depression.

Now, a year later, these five bold New England businesses are still standing. In almost every case, they have been rewarded for their decisions. And they are pretty pleased with themselves.

“It was absolutely the right move. We gained market share and saw sales grow,’’ said Chris Cheek, vice president of franchise development for Bruegger’s, the Vermont bagel chain that opened 16 shops last year and acquired a Canadian company with 125 restaurants. “A lot of competitors were hunkering down and closing. We weren’t fearful of the economy. It was the right time to grow — not to retreat.’’

For many New England companies, 2009 was a year they’d like to forget. They spent months slashing jobs and employee benefits, slicing operations, and figuring out how to survive. But several businesses embraced the recession as an opportunity not to be missed. Major store closings opened up prime real estate, and struggling landlords were willing to negotiate rents, even at coveted addresses on Newbury Street. Massive layoffs created an ample supply of talented workers, and the falloff in demand for construction made it cheaper to build new enterprises.

“The lesson learned is that opportunity always exists, even in tough times,’’ said Madison Riley, a retail analyst with Kurt Salmon Associates, a consultancy in Boston. “For established businesses and start-ups, it was a great time to make investments.’’

It wasn’t always easy. Karen Blom, co-owner of Zoar Outdoor in Charlemont, last year considered delaying a $600,000 zip line project called Deerfield Valley Canopy Tours. Instead, she pressed ahead, betting the adventure company could capitalize on people vacationing closer to home. A year later, Blom knows it was the right move. More than 7,000 people visited the canopy tours — about 2,000 above projections. And the company, despite lowering prices to $80 from the $100 it initially planned, was able to make its loan payments and turn a small profit.

“It was scary. We had a lot of sleepless nights,’’ Blom said. “But in the end, it all worked out perfectly. And I’m feeling way more confident this year.’’

Even as car sales plummeted about 20 percent and other dealers closed up shops, auto magnate Herb Chambers kept expanding his empire. He added four dealerships, including the most recent, a Kia dealership in Burlington. As he strolled the floor of the new shop recently, Chambers, looking tan and relaxed, boasted that he had stolen business from competitors and saved up to 15 percent on construction costs by building after prices had plunged.

When he spotted a car with rival Quirk Auto plates getting a new transmission at his Kia dealership in Burlington, Chambers stopped and smiled: “It makes my heart flutter when I see other dealers’ cars here. It makes you feel like you’re winning the game.’’

And he isn’t slowing down. Chambers is adding Cadillac and Hyundai to his stable for a total of 48 dealerships by year-end. The investments, he says, will pay off in the long term and allow him to increase his grip on the market when the economy recovers. Cautious consumers who are postponing purchases of new vehicles are creating pent-up demand for the next year or two as repairs become too costly or autos break down for good.

“We are really happy with what we did,’’ Chambers said.

On Newbury Street, the Swiss boutique Nespresso has found its groove selling espresso machines to consumers who want to save money by making the beverages at home. The upscale merchant had long coveted a spot on Newbury Street and grabbed the location after it was vacated by Domain Home, a home furnishings chain that went bankrupt. The Boston shop — open and doing well, according to a Nespresso spokesman — was one of two the retailer launched last year, and another three boutiques are planned this year for Miami and New York.

Several European merchants have followed Nespresso’s lead and filled empty storefronts on Newbury, where rents are down significantly. But a few blocks over, Downtown Crossing is still ground zero for the recession. The massive redevelopment of the Filene’s site has been a hole in the ground since financing fell apart, and beleaguered businesses have continued to close up shop.

William Ashmore, however, is busy trying to launch his second restaurant in Downtown Crossing, Stoddard’s Fine Foods & Ale. He had hoped to open up last April, but a litany of unexpected construction problems — the ceiling was caving in, the ventilation was insufficient, a second elevator was needed — pushed back the project and doubled the cost. Ashmore, who is an owner of the Ivy restaurant across the street on Temple Place, is approaching his 70th consecutive week of construction and preparation for the venture, styled after a pre-Prohibition pub with 25 beers on tap, a shoe shiner, and other period details.

“I’m pretty . . . nervous because we’ve bitten off a lot,’’ he said.

But Ashmore says he feels lucky that the delays saved him from opening in the worst of the recession, and gave him time to build up hype around the restaurant. Plans for a private men’s club caused an unexpected brouhaha with the National Organization of Women, and passersby keep banging on the door asking for tours and the opening date. (Maybe this week?)

When he’s not feeling the pressure of fulfilling all the promises he’s made, Ashmore, who lives in the apartment above Stoddard’s, is feeling good about the days ahead. He’s already making plans for a third restaurant in the neighborhood, a Neapolitan pizza shop, and believes Downtown Crossing has a future.

“I’m more optimistic now than I was a year ago,’’ Ashmore said. “I see how everything is finally coming together.’’

Jenn Abelson can be reached at abelson@globe.com.

Boston Finance News – Latino Accounting & Finance Convention

Boston Money — Sat, 08 Aug 2009 13:50:29 +0000

Boston hosting 1st Latino professional convention

By Christine McConville | Saturday, August 8, 2009 | http://www.bostonherald.com | Business & Markets

As the nation’s first Latino Supreme Court justice is set to be sworn in today, Boston will welcome its first-ever convention of Latino professionals.

Some 2,000 members of the Association of Latino Professionals in Finance and Accounting are expected to gather here starting today for their national convention.

A Greater Boston Convention & Visitors Bureau official said this will be the biggest gathering of Latino professionals ever in the Hub.

The association’s Boston chapter – which has more than 1,500 members – is the nation’s largest, said Romina Wilmot, vice president of marketing and public relations for the Hub chapter.

She attributed the Boston chapter’s success to its leadership and the region’s growing number of Latino professionals. In the past decade, Boston’s Latino population has grown 21 percent, to 103,000, according to city data.

“We have had very strong and active leaders, who are very passionate about this group,” said Wilmot, a former advertising specialist for Marshall’s who relocated from Honduras to Boston as a young girl.

The conference runs through Wednesday and association members will be gathering in three different hotels in the Copley Square area.

As attendees gather for their first day of meetings, many will be celebrating Sonia Sotomayor’s swearing in as Supreme Court associate justice.

“I’m sure everyone will be discussing that,” Wilmot said.

Article URL: http://www.bostonherald.com/business/general/view.bg?articleid=1189894

Boston Financial – Young investors wary of jumping into market lows

Boston Money — Thu, 06 Aug 2009 03:10:35 +0000

Young investors wary of jumping into market lows

By Erin Kutz

BOSTON (Reuters) – Young investors may accept the argument that those who begin investing when stocks are cheap end up with more retirement money, but after the turmoil of the past year, some find it hard to put their money in the market.

Asset managers and analysts say that those who invest in rock-bottom stocks of a bear market will see share values rise for decades.

But many in their 20s and early 30s are not buying rosy projections, due to immediate financial pressures and exposure to the longest recession since the 1930s Great Depression.

“I would keep all my money in cash,” said Alex Corbacho, a senior at Boston University.

The trend has some worrisome long-term implications. Stock brokers may find themselves largely shut out of a big customer base, and demand for equities will likely be crimped as investors favor safer havens, hurting the stock market’s prospects. It’s also unclear whether these young investors will have accumulated enough to fund their retirements when the time comes.

Corbacho is no stranger to markets. At age 13 he invested his birthday money and a matching donation from his father, $1,000 in total, in tech stocks only to feel the sting when the Internet bubble burst.

He carried the lesson with him in early 2008, after seeing signs of economic trouble as an intern at a Boston investment bank. He put the majority of his stock investments, which had reached about $5,000, into a certificate of deposit instead.

Corbacho doesn’t plan returning to stocks for a few years after graduation and is instead focusing on saving.

The recent market collapse has made holding cash for immediate expenses far more attractive to young people than investing, said Rodger Smith, managing director of Connecticut consulting firm Greenwich Associates.

“They are taken aback by how much they lost and how quickly they lost it,” Smith said.

The early exposure to such dramatic declines could restrain many from investing aggressively when they are older and have accumulated more money to put into the market, some say.

Asset managers, financial advisers and investors agree that young people will emerge from the financial crisis more educated, and more cautious, about managing their money.

“I do think they are taking a more practical and slightly more conservative view of the world,” said Michael Doshier, vice president of Fidelity’s Workplace Investing Group.

Corbacho said his generation should not expect to accumulate sudden wealth like some in the past.

“We might be a little smarter and a little wiser moving forward. We will have been more conservative and more observant and won’t have 65 percent of our life savings invested in equities,” he said.

Assets in U.S. retirement plans fell 22 percent in 2008 or nearly $4 trillion, with almost 75 percent of the drop in the second half of 2008, the Investment Company Institute found.

“These folks need to be resold on the idea that a 401k is a long-term investment,” said Smith, who oversees a profit-sharing plan for his firm and advises younger investors.

LONG-TERM CONCERNS

Financial advisers have long suggested that those further from retirement invest more heavily in equities, then switch to less risky assets as they near their golden years.

But the portfolios of those in their early 20s don’t reflect that advice. At Fidelity Investments, those 20-24 years old invest 31 percent of their 401ks in equities, compared to those 50-59 years old with 35 percent equities investments.

Overall, those saving for retirement have pulled back from stocks. In June, 48 percent of all Fidelity 401k participants were in equities, down from 53 percent a year ago.

Those in the investment industry say young investors should buy stock early and often.

“The key message is that it’s not a bad time for everybody,” said Christine Fahlund, senior financial planner at T. Rowe Price.

Ita Mirianashvili, a 35-year-old fellow at Massachusetts Institute of Technology’s Sloan School of Management, has confidence in long-term stock market prospects.

“I know the downturn cycle we are in will continue for some time but it will come back,” she said outside a MIT class that simulates a stock trading room.

But concerns about inflation, heavy government spending and rising bankruptcies has left many young investors uncertain.

“It’s still difficult to be bullish … for the long-run,” said Ashan Walpita, a 2009 Boston University graduate and former president of the school’s finance club.

Other short-term obstacles may hold young investors back. Employer-sponsored retirement plans often give people their first market exposure but with many graduates not finding work, they are yet to get started on making investments.

(Editing by Mark Egan and Cynthia Osterman)

Financial News – Sales Tax Mass Suicide

Boston Money — Mon, 27 Jul 2009 16:11:39 +0000

Buyers trying to beat hike in state sales tax

MAD RUSH?

Bob and Sylvia Myhal bought a new Kia Amani yesterday at Wagner Motor Sales Shrewsbury. (T&G Staff/STEVE LANAVA)

By Priyanka Dayal TELEGRAM & GAZETTE STAFF

Retailers of big-ticket items from refrigerators to cars are preparing for shoppers to come in droves this weekend and make purchases before the sales tax jumps to 6.25 percent on Aug. 1.

Area car dealers say they already have seen an increase in customers and sales this month.

“This is the best month we’ve had in 45 years,” said Don McEwen, general manager of Lundgren Honda in Auburn. “It’s completely unexpected. It’s amazing.”

Herb Chambers, who owns 46 car dealerships in Massachusetts and Rhode Island — and seems to be the only dealer opening new locations this summer — said sales have picked up month after month this year.

“If somebody was planning on purchasing a car in August or September, it’s probably worthwhile for them to buy it in July and save that tax,” Mr. Chambers said. “If you weren’t planning on buying a car this year, then there would be no incentive.”

A customer buying a $25,000 Honda Accord would pay $312.50 more in tax if the purchase was after July 31. For a $44,000 BMW sedan, the tax would be $550 higher after the end of the month.

The sales tax increase is on people’s minds, said Mark Wagner, president of Wagner Motor Sales, which has dealerships in Shrewsbury and Boylston. “This weekend will be the tell-tale, I believe,” he said.

“(Sales) have been touch and go. It’s tough to forecast … People are waiting a little bit longer and seeing what’s out there.”

Bob and Sylvia Myhal walked into the Wagner Kia showroom in Shrewsbury yesterday afternoon, and a little while later, they walked out as the owners of a new Kia Amanti, a $32,000 sedan.

Mr. Myhal said he was pushing to buy a new car before the sales tax hike. “On small purchases, it won’t matter, but on large purchases, it’s going to hurt a lot of people,” he said.

The incentive of a lower sales tax is not the only thing motivating car shoppers. Perhaps the bigger incentive is the federal government’s Car Allowance Rebate System, better known as the cash for clunkers program, which rolls out today.

The program allows owners of old, inefficient “clunkers” to trade them in for a $3,500 or $4,500 rebate toward purchases of new, fuel-efficient cars. The old gas guzzlers get scrapped. Details are at www.cars.gov.

The staff at Lundgren Honda has written more than 20 advance orders for customers taking advantage of the federal program. The Honda Fit, which gets 30 miles per gallon, highway and city combined, is one of the most popular sellers, according to Mr. McEwen.

Dennis P. Pietro, Internet sales director at Harr Toyota on Gold Star Boulevard in Worcester, said customers are looking for economical cars, like smaller SUVs, or pre-owned rather than new vehicles. Business has increased 20 percent over last month.

“By the weekend we’ll probably see 30 to 35 percent more,” he said.

He’s not happy about the sales tax increase. “I think the government is a bunch of (expletive) morons,” Mr. Pietro said. “It is what it is, I guess.”

Lawmakers have said raising the sales tax was necessary to avoid steep budget cuts to important services, including public transit. Retailers say higher taxes will drive more shoppers to the Internet and to New Hampshire.

Jon B. Hurst, president of the Retailers Association of Massachusetts, said retailers have been struggling because of the recession, and because of poor weather in May and June. “Now we’re staring down the barrel of a 25 percent sales tax increase,” he said. “A lot of (retailers) are somewhat shell shocked by the tax increase.”

Although support for another summer sales tax holiday is hard to find on Beacon Hill, retailers are pushing for it. Mr. Hurst said that the holiday did not spur as much spending last year as it did in 2007, but, he said “More than any year prior, we could really use it this year.”

The state said it lost $15 million in sales tax revenue during the tax holiday last year, but Mr. Hurst said that money is made up in other ways: more people working on the weekend means more income tax revenue, and more people shopping means more meals tax and gas tax revenue.

Bernie Rotman, vice president of Rotmans Furniture & Carpet in Worcester, said he’s expecting many customers to make purchases over the next week to beat the sales tax hike. “I think it’s going to be a good thing, but it’s short-lived, and it’ll be a bump,” he said. “Far more impressive would be a sales tax holiday.”

Some stores, including Rotmans and Percy’s, a Worcester TV and appliance store, are offering a 5 percent discount as another incentive to customers.

“They all say the same thing, ‘We want to buy it before August 1,’ ” said Alan Lavine, sales manager at Percy’s, where shoppers are looking for refrigerators, TVs, washers and dryers.

As for what happens in August: “There could be a backlash,” he said. “I’ll worry about that when it happens.”

Contact Priyanka Dayal by e-mail at pdayal@telegram.com.

Investments & Finance – Historic Gloucester Distillery – Ryan & Wood Inc.

Boston Money — Thu, 02 Jul 2009 13:36:28 +0000

Spirits of Cape Ann – Ryan & Wood Inc. – Beauport Vodka Launch

Ryan & Wood Distillery Gloucester MA – Beauport Vodka

Gloucester distillery brings craft approach to alcoholic beverages

By Joel Brown, Globe Correspondent | July 2, 2009

GLOUCESTER – Beauport, Knockabout, Folly Cove. The names have historic meaning on Cape Ann.

Beauport – “good harbor’’ in French – was an early, poetic name for Gloucester. A knockabout was a type of fishing boat without a bowsprit, designed in Essex. Folly Cove is an inlet on the Rockport shore that lends itself to navigational errors and, by some accounts, rum-running during Prohibition.

But the names are about to get new meanings. As in, “I’d like a Beauport Martini, please.’’ “Pour me a Knockabout and tonic.’’ “Can you make a Folly Cove and cranberry?’’

In a bland industrial park just off a Route 128 rotary, Bob Ryan and his nephew Dave Wood are running what they believe is the first still in Gloucester – the first legal one, anyway – since the start of Prohibition in 1919. Their hand-crafted, premium-priced Beauport Vodka is hitting the shelves of a few Cape Ann package stores and bars. Knockabout Gin and Folly Cove Rum will follow in coming weeks, and wider distribution is planned.

“You don’t want to ramp up and burst on the scene too large and have a pipeline you can’t fill,’’ Ryan said. “You want to take advantage of being a bit exclusive, something that people want to have, maybe the rare baseball card of the industry type of attitude, and be sure that you put out what you want to put out.’’

From the front, Ryan & Wood Inc. Distilleries headquarters looks like a regular strip-mall office. But the building drops down a slope at its rear, creating a warehouse-like space three stories high. It’s there that the two men and still operator Jim Cook work amid pallets of grain and other raw materials, tanks of vodka and barrels of rum and whiskey spirits stacked to the ceiling.

The centerpiece of their efforts is the 152-gallon alembic pot still, a wonderful contraption out of Jules Verne or “Willy Wonka,’’ with a giant hammered-brass pot and “helmet’’ beside two 17-foot towers dotted with portholes, all connected with pipes and tubes. Made in Germany and heated by steam, the still was a $90,000 investment.

Inside it, American barley, wheat, and rye are the raw materials for a carefully monitored double distillation that delivers an eye-watering 95-percent-alcohol spirit that will then be diluted with local spring water down to 80-proof (40 percent alcohol) vodka. The gin is made much like the vodka, but with the addition of botanicals, including dried citrus peel that gives it a bright, summery taste. There’s also an all-rye whiskey in the works. The rum starts as molasses instead of grain.

“We get a lot of people come in and ask if there’s anything local. I think the Gloucester people will try it, and he has a good product,’’ said Louis Linquata, who owns Seabreeze Liquors and Railroad Avenue Liquors in Gloucester, where he’ll stock Ryan & Wood products.

It’s an interesting project for the 56-year-old Ryan, who worked as a commercial banker in town, and the 37-year-old Wood, a real estate lawyer in Beverly.

“I have been accused of this being my red convertible at age 50,’’ Ryan said, his smile showing no signs of midlife crisis. “It’s an adventure.’’

For Ryan and Wood it’s also about crafting a product they are proud of and staying connected to their roots. Before selling their first bottle, Ryan was honored earlier this month as the 2009 small-business person of the year in Manchester by the Cape Ann Chamber of Commerce.

“I can’t imagine doing it with anyone else,’’ said Wood. “He wants to make his mark on history with this, and I think he will. To be part of that is a heck of a lot more gratifying than making junior partner at Hale & Dorr, if that’s the analog to the distilling business. It’s the reason for getting out of bed. Otherwise, looking at a future of closing loans, it’d just be a little more bleak, I guess.’’

************************************************************

Bob Ryan and his nephew, Dave Wood, have launched the new Ryan & Wood micro-distillery in Gloucester.

They’re using the copper Arnold Holstein still above to make designer vodka and rum.

By IAN HURLEY

By Barbara Taormina

GateHouse News Service

Fri Dec 14, 2007, 11:38 AM EST

Hannah Jumper knew how to work a crowd.

On the morning of July 8, 1856, she rallied 200 wives and mothers and convinced them to follow her on a town-wide raid of all the rum in Rockport.

Legend has it that the women met in Dock Square with little hatchets hidden in their lace shawls. After a short speech from Jumper, a 31-year-old redheaded seamstress with some Oprah-style star power, the crowd began patrolling the streets smashing every cask and jug they could find. Five hours later, after every drop of known liquor had been spilled, the women went home to cook dinner.

Jumpergate is interesting for a couple of reasons. The Rockport rum dealers took the women to court but a judge ruled the crowd had a right to take action against a public nuisance. Who knows what effect that legal decision had on families with barking dogs, loud kids and over-the-top lawn ornaments.

But it’s also kind of interesting to imagine what Jumper would do today if she happened to wander over to Gloucester’s Blackburn Industrial Park, where the first licensed microdistillery in eastern Massachusetts is cooking up its first batch of premium vodka. Bob Ryan and his nephew, Dave Wood, are tending a big-bellied copper still imported from Germany that looks like something right out of Wonka’s chocolate factory. Even Hannah might be impressed.

Ryan and Wood are blazing the way with the latest trend aimed at satisfying our love for gourmet and our reverence for all things local and, of course, our fondness for top-shelf liquor. There are about 100 microdistilleries now up and running across the country. A lot of them have sprung up in the Midwest, where farmers with long family histories of moonshining have plenty of grains and fruits to spare.

But there’s also a good number of guys like Ryan and Wood who have set up small designer distilleries as a second career because it’s interesting, profitable and, probably most important of all, because it’s fun.

“We’ve run through the microbrewing trend, and this is kind of a natural progression of that,” says Wood, a lawyer by day and a state-of–the-art moonshiner by night. “People want a locally produced artisan product made with local ingredients and with attention to quality.”

Ryan figures the market for locally produced sprits is an extension of the Martha Stewart phenomena that has triggered a popular appreciation of quality and attention to detail in all things culinary and domestic.

“And, this is a little bit of ego, but we think Gloucester deserves us,” says Ryan with a smile.

Beauport Vodka, the first batch of spirits created by Ryan and Wood Distilleries, is ready to go. All they are waiting on now is the bottles, which will be hand-filled and corked — probably by someone in Ryan’s enormous extended family.

Beauport Vodka should hit store shelves in January. Next up will be Folly Cove Rum, which Ryan and Wood hope to begin selling sometime next summer. But that’s just the beginning. There are all sorts of ingredients to tinker with, endless combinations of flavors to try. And all sorts of niche markets to tap.

Ryan and Wood are riding the edge of a potentially big shift in the liquor industry, and the edge is often an excellent place to be. Not only could they end up changing what people drink on the North Shore, they may end up changing some of our perceptions about spirits and how we drink them. And that could be some good news for all of us — even Hannah Jumper.

Starting up

Owning and operating a mircodistillery isn’t for everyone. You’ve got to have a lot of time and patience. Having some community good will and a small pile of startup cash also doesn’t hurt.

Ryan has all of that. A lot of people in Gloucester know him from his years on Gloucester’s waterfront running Atlantic Seafood, before declining fish stocks and government regulation forced the fleet and the shore-side fish dealers to do some dramatic downsizing. Other people know him for the role he played in launching Gloucester Bank and Trust. Between Gloucester and his adopted hometown of Manchester, there probably isn’t a volunteer board or commission he hasn’t served on.

After Ryan left the waterfront, he spent some time taking care of his aging parents and helping with community projects, but it wasn’t quite enough.

“I felt maybe I was getting a little too old too quickly,” he says. That changed when Wood happened to mention a story he read about a microdistillery in Vermont. They talked it over and decided, why not us?

They traveled up to Freeport to visit an operation called Maine Distilleries that’s bottling Cold Water Vodka. Sure, there was a side trip to the LL Bean outlet, where Ryan’s wife Kathy picked up lots of new sweaters and fleece, but they liked what they saw at Maine Distilleries and decided to learn more.

They flew out to Flagstaff, Ariz. for a workshop where they learned the ins and out of the microdistillery business — the history of spirits, the secrets of fermentation and the art of distilling.

“I don’t think we knew what we were getting into,” says Kathy Ryan, referring to the equipment, workspace and the long and grueling licensing process. “But after the workshop I was glad Bob found something he was excited about.”

It took about 18 months to get through the paperwork for a state and federal license. There was even a lengthy approval process for the label — it has to include the surgeon general’s warning and you can’t use the American flag or make any claims about health benefits.

But the legwork is done and now, on the ground floor of the meticulous Ryan and Wood Distilleries plant, the enormous shiny copper-pot still is churning and slowly drawing every last drop of alcohol out of carefully fermented batches of mash.

Ryan says people usually have the same reaction when they see the still. It’s an oohh and ahh chorus, a lot like you hear at Fourth of July fireworks. “It’s a piece of old-world style technology right here in Gloucester,” he says.

Wood likes to do the tours. He’ll take you around to several stainless steel vats and explain the chemical process taking place inside each container. He’ll tell you about yeast and enzymes and show all the gauges and tubes and a four-spout hand-operated bottling machine.

There are big sacks of grain in one corner of the plant and in the other corner large wooden barrels, some of which were picked up from the Jack Daniels Distillery, where they were used to store bourbon. Wood says recycling those barrels gives fresh batches of spirits a slightly different taste.

Ryan jumps in with details about the still and all the help the business has gotten along the way from organizations like the American Distillers, local microbrewers and people who stopped by to wish them well. And both guys will talk history and the role liquor plays in American culture.

“This is the second oldest profession,” says Ryan, who adds that throughout history brewers and distillers have all met the need of a particular time and place. “Every farmer and every pioneer had a still,” he says.

And a lot of working families who grew up in cities and towns also tried their hand at distilling. Ryan and Wood say the most common thing they hear from visitors is that their parents or grandparents made small jugs of homemade hooch.

Still, they know there have been plenty of Hannah Jumpers who have long been blaming the product instead of the consumer for a list of troubles that fit under the heading of alcohol abuse.

“People are just getting out of the interruption of Prohibition,” says Ryan. “We’re going to try to fight that and the stigma of spirits.”

A new still in town

While Ryan and Wood hope to be distributing their products throughout eastern Massachusetts, they want to do more than fill and ship orders. They would like to make the distillery a tourist spot where visitors can come in and see the whole process — grains to spirits.

One possibility Ryan has been chewing over is the idea of linking up with Gloucester’s new cruise ship port that will bring thousands of overseas visitors to Gloucester and the North Shore. If those tourists stop by the distillery for a tour and they happen to pick up a bottle of locally distilled spirits as a souvenir, everyone’s happy.

Ryan and Wood have also reached out in other directions. They recently hosted a distilling workshop run by Bavarian Brewers and Distillers, the company that sold them their still. More than 30 people signed up to learn the craft and possibly follow in Ryan and Wood’s footsteps. And that’s fine with them. Camaraderie seems to be big among small brewers and distillers.

In addition to that, Ryan’s soon to be son-in-law Mark Mancini, a Bentley College student who is finishing up a degree in economics and finance, arranged for the start-up distillery to be a student project. Ryan and Wood opened the plant up to 160 students who got lessons in distilling and then came up with business plans on how to put Beauport Vodka on the map.

“We got a huge benefit from that,” says Ryan. The students did focus groups, devised marketing strategies and critiqued how the distillery was running so far. And they apparently all had a good time doing it.

And that was particularly satisfying to Ryan and Wood, who genuinely enjoy sharing everything they’ve learned. They want everyone to get in on the fun — tourists, the business community, but most of all friends and family.

Ryan’s son, Doug, is graduating this spring from Fordham University in New York and is considering applying to law school somewhere in Boston. The thinking is maybe he can work in the distillery while he earns his law degree.

Ryan likes that idea and he especially likes what his new business has done for his image with his kids.

“My son moved out of the house four years ago to go to college and all of sudden he’s back saying, ‘Hey, my dad’s cool,’” he says with a laugh.

Bottom line

As romantic as it may be to run a funky German-made still in a small plant in a corner of Gloucester, the big question ahead for Ryan and Wood is, will their products sell? Will there be a big enough demand for handcrafted spirits to keep the distillery going?

Ryan and Wood are both pretty confident sales will be good, and they’re not the only ones who are predicting success. Lenny Linquata also thinks Ryan and Wood are on to something, and Linquata should know — he owns two of Gloucester’s largest liquor stores, Sea Breeze Liquors in East Gloucester and Rail Road Ave. Liquors downtown.

“Fishermen’s Brew has done quite well,” says Linquata, referring to Gloucester’s hometown lager, which is made by the Cape Ann Brewing Company.

Linquata says spirits might take a little longer to catch on, but they will. The one question he has is price. And one would think that a handcrafted bottle of vodka is going to be considerably more expensive than even the high-end stuff massed produced in large distilling plants. But Ryan and Wood say that’s not the case.

“We’ll be competitively priced,” says Woods. “We can compete because we don’t have the high-paid directors and staff and all the overhead.”

Linquata does have one suggestion for the new business: If you want to sell something from Gloucester, your surest bet is to make it look like Gloucester. And in this case one of the best ways to do that might be to use an image of the city’s famous Fishermen’s Memorial.

“With the Man at the Wheel on the label, you can’t go wrong,” he says. Ryan and Wood already have a label for Beauport Vodka, one they describe as “pretty vanilla,” but who knows where they’ll go with Folly Cove Rum and the rest of their line as it develops.

Linquata figures they’ll go pretty far, and Gloucester and the rest of Cape Ann will be eager to check out the new hometown drink.

“I can see it in ever bar in the city,” he says.

E-mail Barbara Taormina at btaormina@cnc.com.

Boston – Springfield in the BLACK

Boston Money — Wed, 01 Jul 2009 15:57:24 +0000

Springfield’s overseers leave a city in the black

But as state control ends, some fear return of fiscal woes

By Sarah Schweitzer, Globe Staff | July 1, 2009

Springfield MA

SPRINGFIELD – It got so bad here that even the trees were falling – their dead limbs crashing onto parked cars and into houses, spurring lawsuits against the city that couldn’t afford to cut the trees down.

How bad was it, five years ago? Springfield’s debt was relegated to junk bond status, its budget $41 million in the hole. Street lights were extinguished to save money. Taxes on thousands of properties were left uncollected. When federal agents launched an investigation into public corruption, 33 local officials were eventually convicted.

This was 2004, the nadir for the state’s third-largest city, a once storied manufacturing hub famous as the birthplace of Dr. Seuss and the game of basketball, still home to four colleges, a major hospital, and one of Massachusetts’ largest Fortune 500 companies.

“We had devolved into chaos,’’ said Jim Couture, a project specialist for MassMutual Financial Group.

At the stroke of midnight this morning, a grand experiment in local governance came to an end when the Springfield Finance Control Board, the state-appointed officials who took over the city five years ago to head off bankruptcy, handed the reins back to elected city officials. By many accounts, the city that the state control board returns is a much improved one, on solid financial footing, its operations streamlined, and with checks and balances to prevent another financial crisis.

“Drastic situations call for drastic intervention,’’ said Michael Goodman, director of economic and public policy research for the University of Massachusetts Donahue Institute. “Springfield would not be in a position to step forward but for the state’s decision to step in.’’

Even local elected officials who initially chafed under the control board’s authority say the work of the board was needed.

“The control board was able to accomplish a number of things in getting the finances straightened out,’’ said William Foley, the City Council president, who serves on the five-member control board. “I think they did a good job.’’

Around the city, from the gorgeous Victorians in Forest Park to the dilapidated storefronts of the North End, many residents said this week that they feared the control board’s departure. The roster of city officials hasn’t changed dramatically since Springfield’s financial troubles came to a head in 2004, they said, and they worry that old practices will hold sway.

One woman, who declined to give her name as she watered the garden beside her Forest Park home, said some city officials were already backing off the control board’s $90-per-barrel annual trash fee – a sign, she added, of wrongly bowing to popular pressure.

“It’s the same old knuckleheads who are afraid to make the hard decisions,’’ she said.

Philip Tarpey, an attorney and resident for more than half a century, expressed a common sentiment as he lunched with his daughter downtown: “I am sorry to see the board go.’’

Yet, other locals said they were eager to see the out-of-towners return to Boston and elsewhere and leave governance to the officials elected by the people of Springfield. Unions say the five-member control board stripped their workers of fair wages and outsourced jobs in unfairly negotiated contracts.

Still other residents question the long-term effectiveness of the board’s work, saying the board failed to get at the root cause of the financial meltdown – grinding poverty born of decades of economic stagnation.

“They never engaged in a serious conversation about the way to grow jobs,’’ said Robert Forrant, a professor of regional economic development at the University of Massachusetts, Lowell, who grew up in Springfield and worked at the now-shuttered American Bosch factory, a machine toolmaker.

Control board officials say job creation was a constant current in their discussions. They point to jobs created on their watch – 300 Liberty Mutual call center positions, and 232 jobs at Performance Food Groups, for example – and the tapping of surplus funds for college counseling and financial aid, which they say will expand the educated base of the city and lure employers.

“We need more industry, long-term,’’ said Chris Gabrieli, the former gubernatorial candidate who was named chairman of the control board by Governor Deval Patrick in 2007. “But short-term, we’ve turned the corner from a sense that nothing positive was happening in town.’’

Mayor Domenic Sarno, a control board member, put it this way: “It’s been tough because we were stuck in triage or stabilization and we couldn’t get to that vision part of where you want the city to go. That’s what we are working on now with a good financial base.’’

Located an hour and a half from Boston, Springfield was once an epicenter of manufacturing, turning out machine parts, cars, guns, motorcycles. Its boulevards boasted Queen Anne Victorians, mansions rose on bluffs overlooking the Connecticut River, and the grand, columned Symphony Hall opened.

In the 1960s, the factories began moving to the South and overseas, taking the jobs that had made Springfield a regional powerhouse. Much of the middle class filtered away, leaving behind a population whose poverty grew more entrenched as new jobs failed to take root.

These were daunting challenges for any community. But Springfield was a city whose government had run amuck. When Governor Mitt Romney appointed the control board in 2004, more than 8,000 residents and businesses owed property taxes. The city was on the verge of not being able to make payroll. The Housing Authority’s executive director was under indictment, accused of spending public money on chandeliers, ceramic tile, carpets, and other items for his family’s homes.

When the control board came to power, much of its initial work was basic governance, but tough decisions were less fraught because they didn’t need voter approval. The board collected $31.6 million in outstanding property taxes, including some debts dating to the 1950s. The city began issuing parking tickets more aggressively, then collecting the fines – a novel idea at the time. Board members renegotiated 28 union contracts with city workers. They also changed the city’s health insurance purchasing mechanism, realizing an estimated $96 million savings over five years.

With that foundation, the board embarked on a more sophisticated agenda. It implemented a system that carefully tracks and compares departments and agencies’ performances. It put into place a citizen service line, 311, that uses a computerized tracking mechanism.

Today, the city budget is in the black. Officials report a surplus of $89.3 million, enough to repay the $52 million loan the state made to the city along with the creation of the control board.

Still, more than a third of Springfield’s children live below the poverty line; 9 percent of families rely on public assistance, according to a report by MassINC and UMass Dartmouth’s Urban Initiative, two nonprofit think tanks. The city’s teen pregnancy rate is the second highest in the state and growing, the report says. Shootings and gang violence remain news staples, although FBI statistics show that violent and property crime has dropped in the last five years. The city has an estimated 10.9 percent unemployment rate for May, higher than the statewide rate.

Travis Wray, 39, was laid off from his job in financial services. While he looks for work, he’s been volunteering with groups like the Urban League and helping to launch a group of young Springfield professionals, the sort of effort that he says will bring the city back.

“You have to believe in the city,’’ he said. “I see a foundation being laid for a rebirth.’’

Sarah Schweitzer can be reached at schweitzer@globe.com.

Boston Financial – Central Bank Concerns

Boston Money — Sat, 27 Jun 2009 18:16:00 +0000

Fed Documents Fuel Concerns About Expanding Central Bank’s Role

By DAMIAN PALETTA

WASHINGTON — Documents unearthed by congressional investigators reveal disagreements among senior Federal Reserve officials about how to handle Bank of America Corp.’s acquisition of Merrill Lynch, fueling concern on Capitol Hill over giving the central bank even more power to regulate the financial system.

Federal Reserve

The glimpse inside the regulatory machinery provided by emails, memorandums and handwritten notes show a Fed that wrestled with how tough it should be on Bank of America, one of the biggest U.S. banks. It also shows Fed officials questioning more broadly their response to the financial crisis months earlier.

In December, Bank of America approached top U.S. officials about abandoning a deal, forged in the heat of the crisis, to buy investment bank Merrill Lynch. In the end, the government arranged a $20 billion rescue package for the bank to cover growing losses at Merrill.

In between, the documents show areas of disagreement within some of the Fed’s 12 regional reserve banks.

The Federal Reserve Bank of Richmond, where supervision of Bank of America’s parent company is based, pushed for a tougher approach than other regulators, emails suggest. Bank of America officials appealed more than once to the Fed’s Washington headquarters to intervene.

Bank of America CEO “Ken [Lewis] may also raise his favorite perennial issue — that is, is the Richmond supervisory team on the same page as the [Fed] Board,” Fed governor Kevin Warsh wrote in an email Dec. 30 to Fed Chairman Ben Bernanke and other senior officials. “Richmond staff was on our call today, but prior to the call, it sounds like they may have threatened a little more than ideal…”

On Jan. 10, Fed General Counsel Scott Alvarez wrote to Mr. Bernanke and others that Richmond Fed President Jeffrey Lacker was raising some issues over the final deal. Mr. Lacker wanted the entire Federal Open Market Committee to vote on any loan to Bank of America.

Mr. Bernanke responded at 2:01 a.m.: “Thanks. If we are nimble we can manage this.”

Whether or not Mr. Bernanke threatened Mr. Lewis’s ouster over the rescue remains a source of contention. Mr. Lewis suggested in testimony to New York Attorney General Andrew Cuomo that the Fed chief did just that. Mr. Bernanke has denied making such a threat to Mr. Lewis.

On Jan. 16, just days before government aid for the deal was supposed to be announced, Federal Reserve Bank of Boston president Eric Rosengren sent Mr. Bernanke an email saying that the Fed shouldn’t dismiss too hastily the idea of tossing management at Bank of America.

Mr. Rosengren suggested such a shake up might be necessary, “particularly if we believe that existing management is a significant source of the problem.”

Mr. Bernanke, at a contentious hearing Thursday, defended the Fed against suggestions it had been too lenient with management.

“The supervisory process is not a onetime thing. It’s an ongoing process, and in an ongoing supervisory process, we have made demands of the Bank of America on terms of their board and management,” he told Rep. Dennis Kucinich (D., Ohio).

The documents reveal Fed officials questioning the central bank’s response to the financial crisis even before negotiations began on the effort to aid Bank of America’s acquisition of Merrill Lynch.

“At this point I have [the] sense that the hearts and minds war in Iraq was handled better than it has been in this crisis, particularly within the Fed system,” wrote Meg McConnell, a top Federal Reserve Bank of New York official, on the day the House of Representatives voted down the Bush administration’s first financial-rescue package, sending the Dow industrials down almost 800 points.

The Obama administration earlier this month proposed giving the Fed powers to oversee and examine the largest companies in the financial system.

The disclosures could bolster the central bank’s argument that it needs more power to manage future crises. One reason for the government’s lurching response last year, officials say, was that it didn’t have the needed tools.

The Fed has been dealing with a steady stream of criticism from Republicans. Democrats have recently joined in, and the disclosures being aired through the congressional inquiry have put the central bank on the defensive.

Write to Damian Paletta at damian.paletta@wsj.com

Financial System – President Obama

Boston Money — Thu, 18 Jun 2009 13:54:56 +0000

Prez targets finance system

Seeks to prevent Wall St. abuses

By Jay Fitzgerald | Thursday, June 18, 2009 | http://www.bostonherald.com | Business & Markets

Photo by AP

President Obama’s plan to overhaul the nation’s financial regulatory system received support yesterday from key Massachusetts congressional members who said changes are long overdue.

Saying America had allowed a “culture of irresponsibility” to grow within the financial industry, Obama proposed giving the Federal Reserve more regulatory powers and creating a new consumer watchdog agency to review new financial products peddled by firms.

“This was a failure of the entire system,” Obama said at a White House event, referring to last fall’s near collapse of the nation’s financial system. “An absence of oversight engendered systematic, and systemic, abuse.”

U.S. Rep. Barney Frank (D-Newton), chairman of the influential House Financial Services Committee, said the plan is an important step toward overhauling the regulatory system. He predicted Congress will have a bill on Obama’s desk before the end of the year.

Frank, who has parted with the administration over some issues, said there will be changes to Obama’s plan, but he said Democrats agree with the “fundamental” thrust of the package.

U.S. Sen. Edward M. Kennedy (D-Mass.) and Rep. William Delahunt (D-Quincy) won a major victory when Obama agreed to create a new Consumer Financial Protection Agency, something the two Bay State pols have pushed for in recent months.

“The plan announced by the president today will protect consumers and investors by restoring much of the regulatory oversight of our financial system that has been systematically dismantled in recent years,” said Delahunt.

But business leaders and Republicans didn’t like most of the proposals.

David Hirschmann, president of the U.S. Chamber of Commerce’s capital markets center, said the president’s plan adds an extra layer of red tape without really fixing the problems that led to last year’s Wall Street meltdown.

“We can’t simply insert new regulatory agencies and hope that we’ve covered our bases,” he said.

U.S. Rep. Scott Garrett (R-N.J.) said the president’s plan could create a cycle of more bank bailouts.

“It perpetuates what we’ve had in the past, said Garrett,” a member of Frank’s Financial Services committee.

The financial industry, including some of Boston’s most powerful mutual-fund companies, have been wary of too much government intervention in the sector, fearing their interests might be hurt.

Article URL: http://www.bostonherald.com/business/general/view.bg?articleid=1179683

US push to overhaul banking worries some
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