Apartments, museum lead race for Greenway site

BRA says proposals most consistent with its plans for parcel

Globe says readers to pay for Web site

The Boston Globe will soon begin charging for its Web site, publisher P. Steven Ainsley told the paper’s union bosses yesterday as the Globe’s parent New York Times [NYT] Co. confirmed in a regulatory filing that the money-losing Hub broadsheet is for sale.

News of the Globe’s intention to charge for Boston.com came a day after News Corp. [NWS] Chairman Rupert Murdoch announced his company would start charging for content at all of its news Web sites, including the New York Post, The Times of London and The Sun, a popular British tabloid. News Corp. already charges for some access to The Wall Street Journal’s Web site.

Globe spokesman Bob Powers said charging for Boston.com appears inevitable.

“It’s going to happen one way or another,” Powers said. “We are looking at several different options, and the goal would be to generate revenue.”

Ainsley also told Globe union bosses the combination of price increases and labor cost reductions, including $20 million in union concessions, have put the paper on better financial footing.

He said union concessions, plus $8 million in Globe management givebacks and the $18 million the company expects to save by closing its Billerica printing plant, have all helped, sources said.

The Times’ quarterly report filed yesterday shows the company spent $30 million to close its Billerica printing plant. Sources have told the Herald that at least one outside party was interested in the plant, but was rebuffed.

Ainsley refused to answer questions about the potential sale of the Globe at yesterday’s meeting, saying his Times Co. overlords had ordered him to keep mum.

Article URL: http://www.bostonherald.com/business/media/view.bg?articleid=1189673

News Corp. plans fees for newspaper Web sites
/business/media/view.bg?articleid=1189759

Nonprofit Globe no easy fix
/business/media/view.bg?articleid=1188720

If you sketch it, they will build:
Rally Fighter from Wareham

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

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.

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 – 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.

State Street fights to put uncertainty behind it

A Boston stalwart fights its way through a crisis that’s putting even its steady strategy to the test

By Beth Healy, Globe Staff | June 14, 2009

Ronald Logue had a nagging suspicion the financial climate was getting dangerous. But he didn’t know where the risks were looming, or how close they would come to his company.

Logue, the chief executive of State Street Corp., a financial services giant in Boston that handles investments around the world, said he first started to worry in 2007, while traveling abroad on business. He feared that markets were becoming so complex and intertwined that the next hedge fund meltdown or foreign currency crisis could threaten the financial system, and ultimately State Street.

He was right about the mounting risks. But they weren’t brewing in some far-flung corner of the world; rather, they were lurking in the US debt markets and right inside the halls of State Street’s downtown offices. By early this year, State Street said it was facing $9 billion in potential losses on seemingly safe debt investments, and shareholders reacted violently, cutting its stock price in half in a single day last January.

“I think the market stepped back and said, ‘Oh my God, even State Street?’ ” Logue said in a recent Globe interview.

Logue has spent the past six months trying to convince investors that a company known as a careful steward of other people’s money had not lost its way. He has repeatedly made the case that State Street stuck to safe kinds of investments. The debt instruments in question were backed by basic consumer loans – for autos and homes, for example. The only real risk with the securities was if, inexplicably, the trading markets were to freeze up.

Which is exactly what happened. When the global credit markets melted down last year, State Street had no way to value those assets and so was forced to acknowledge the potential multibillion-dollar losses. It was something no one could have predicted, Logue said. Still, Wall Street analysts were laying the blame at his feet.

“If there were just 50 percent illiquidity in the marketplace, we would have handled this fine,” Logue said.

On Tuesday, Logue and State Street completed a portion of a tumultuous journey back from those dark days. The company received permission from the US Treasury to repay the government the $2 billion it was forced to accept last October, in the first wave of the bank bailout launched by the Bush administration to prop up the tottering financial system.

Logue had pledged from the beginning to get out of the federal program as soon as possible. At last month’s annual shareholder meeting, he said the company had gone a long way toward completing that effort, by raising $2.8 billion in stock and debt to repay the government. And last week, he declared victory of sorts, saying State Street had “assisted the federal government’s efforts in stabilizing the financial markets.”

It has been a longer road than Logue could have imagined to this place.

How did centuries-old State Street – which made its name as “a stodgy old record keeper,” as Logue says – become ensnared in the subprime mortgage debacle that brought down far racier investment houses? State Street makes its money managing $1.4 trillion for pension funds and other large investors, and handling accounting and record keeping for $12 trillion in mutual fund and hedge fund assets. Since Logue took over as chief executive in 2004, he has pressed the company to grow, including using its vast pools of cash to invest more aggressively.

“You could question whether they went overboard on growing the investment portfolio, and with greater risk,” said Gerard Cassidy, a longtime State Street watcher and banking analyst for RBC Capital Markets in Portland, Maine. Senior management of the bank bears responsibility for that, he said: “They accepted that risk and now they’re paying the penalty for it.”

Logue’s strategy made money for the shareholders, and for himself, as he reaped one of the biggest paychecks in banking. Indeed, even in 2008, while Wall Street titans were crumbling, State Street posted a record $1.8 billion profit. But that success was overshadowed by the uncertainty around the troubled investments.

Nearly half of that looming liability emerged from a surprising place: a small side business that produced just $59 million in revenue last year, a tiny sliver of the company’s $10.7 billion in total revenues. That business was providing mutual fund clients, particularly money market funds, with a way to make a little extra on cash. State Street issued short-term debt for those clients to buy, which financed the purchase of what it deemed to be safe, longer-term debt, such as mortgage loans, car loans, and student loans. These pools of investments, called conduits, never had problems until the debt markets froze, making the underlying assets difficult to sell or even price.

“Two years ago, no one had a clue what a conduit was,” Logue said, weary of having to discuss the issue. While the business was started long before Logue became CEO, it was on his watch that the risks came to far outweigh the modest rewards. Assets in the conduits had grown to $29 billion by early 2008, without any red flags being raised.

“They’re not buying anything different than they were buying in 1992,” Logue said. “What happened is the markets changed dramatically.”

Meanwhile, a similar problem developed in State Street’s investment portfolio, where it had about $5.3 billion in unrealized losses on securities at the end of last year. According to one director during this period, the investment risks the company had accumulated were something of a surprise. “We were aware of it – but not how much risk and the extent of it,” this person said, speaking on condition of anonymity because of the sensitivity of the subject.

But there were warning signs along the way. An early signal came in a presentation by company executives to analysts in November 2004, reproduced in a regulatory filing. An item on the PowerPoint slides told investors of the shifting strategy: “Beginning to reposition investment securities to enhance yield while controlling risk.” That was a cue that the company was taking on more risk, said a former State Street financial executive, who asked not to be named so he would not anger the company. By February 2008, the company disclosed it had $6.2 billion of assets backed by subprime mortgages. Bear Stearns Cos. would fail the next month.

By then, not only was Logue worried about the investments, but so was State Street’s board. In April 2008, Logue hired Maureen J. Miskovic, a member of State Street’s board and a polished British veteran of several Wall Street firms, to be chief risk officer. She was also made a member of the company’s operating committee, or group of senior executives. Logue dispatched Miskovic to make sure there were no other hidden time bombs buried in the business.

Last month, Logue acted to end the negative questions dogging State Street. After months of insisting the conduits would not prove a permanent problem, the company moved the securities onto its balance sheet, effectively taking a $3.7 billion hit even though the assets continue to pay interest. In so doing, State Street said, it would put the uncertainty behind it, but still earn money on the investments.

It was one of several moves that have gone Logue’s way since mid-May. State Street raised $2.8 billion in new capital, and its stock recovered from the January bloodletting, buoyed by news that the company was sound enough to repay the government. Shares closed at $47.56 on Friday.

On the morning of May 20, 36 floors above the city, Logue faced shareholders at the company’s annual meeting with a remarkably bullish tone. He boasted that State Street was now one of the “most well-capitalized banks in the country.” He talked about finding opportunity in the aftermath of the financial earthquake.

And he allowed himself to show just a glimmer of the frustration he has felt these many months. Times have been tough, he said, but, “We never lost a penny through all of this.”

Beth Healy can be reached at bhealy@globe.com.

With 2 acquisitions, AOL looks to tap local ad market

Boston’s Going Inc. Web firm bought

By Hiawatha Bray, Globe Staff | June 12, 2009

AOL, the troubled Internet company that is being spun off by parent company Time Warner Inc., is buying itself a parting gift. It is acquiring a pair of start-ups, including one in Boston, that run websites featuring neighborhood news.

Going Inc. of Boston, founded in 2006, offers information on local parties and entertainment events. The company runs websites targeting 30 US cities, including Boston, Chicago, Miami, and New York. Patch Media Corp., based in New York, publishes community news online, covering five towns in New Jersey. Patch was launched in 2007 and funded by an investment company owned by AOL chief executive Tim Armstrong. Financial details of the transactions were not released, but the Associated Press reported AOL paid less than $10 million each for the two privately held companies.

“By joining with AOL, we have the opportunity to greatly expand the reach of our platform to more cities both in the US and around the world,” said Evan Schumacherm, Going’s chief executive.

“They want the local advertising dollars,” said Carl Howe, Internet analyst at Yankee Group in Boston. Howe said that small and midsize businesses throughout America spend vast sums on ads, mostly with local newspapers and radio and TV stations. Howe said newspapers alone took in $29 billion in local advertising in 2008, and acquiring Going and Patch will help AOL tap this market. “It lets them approach a different set of customers than the national advertisers,” Howe said.

Last month, Time Warner said it intended to spin off AOL, nine years after the two companies merged in a deal valued at $166 billion. At the time, most users connected to the Internet over dial-up telephone lines, and AOL was the dominant US provider of dial-up Internet service. But over time, millions of customers abandoned AOL and switched to high-speed cable and DSL Internet service. In addition, the company’s Internet advertising business has been unable to gain ground on rivals, including industry leader Google Inc.

Hiawatha Bray can be reached at bray@globe.com.

Potential Globe buyers emerge

3 businessmen have local roots

By Keith O’Brien and Beth Healy, Globe Staff | June 12, 2009

Three Boston businessmen – a Boston Celtics owner, a former advertising mogul, and a member of the family that ran the Globe for generations – have emerged as prominent potential buyers of the Globe, according to people knowledgeable about their interest in the city’s leading daily.

Actively mulling bids for the newspaper, according to these people, are Stephen Pagliuca, a private equity executive and Celtics co-owner; Jack Connors, co founder of a major advertising firm and chairman of Partners HealthCare; and Stephen Taylor, a former Globe executive and member of the family that sold the Globe to the New York Times Co. in 1993.

The sources, who requested anonymity because they are not authorized to comment on the potential bids, said the three businessmen are in various stages of reviewing the Globe’s finances and assembling investors who could be part of their groups.

But whether these men will actually make formal bids on the newspaper is not known. Decisions may be delayed until the standoff between the Times Co. and the Boston Newspaper Guild, the Globe’s largest union, has ended, according to the sources with knowledge of the bidding process. And at least one of the three interested parties, Jack Connors, is still weighing whether he will proceed, according to one source knowledgeable about his thinking.

“The Steve Taylor group continues to be interested and is likely to continue trying to raise the money to buy the Globe. And Jack Connors has certainly been interested,” the source said. “But he’s trying to decide if he is going to go forward.”

The three names emerged yesterday just one day after potential buyers confirmed that the Times Co. has hired the Wall Street firm Goldman Sachs to manage the potential sale of the Globe and is planning to seek bids for the newspaper in the weeks to come.

All three potential bidders declined to comment about their interest in buying the newspaper.

“Like a lot of other readers and concerned citizens of Boston, I have high hopes for the future of the Globe,” said Taylor. “I wish them well and have no comment on a possible acquisition.”

The three businessmen said to be considering a play for Boston’s 137-year-old newspaper have diverse backgrounds but share deep roots in the community and region.

Pagliuca, 54, was born in Framingham, played basketball at Duke University, and rose to the top echelons of the private equity world after earning his master’s degree in business administration at Harvard and doing stints in accounting and consulting.

He’s known in financial circles for his role as managing director at Bain Capital, the Boston buyout firm that Mitt Romney ran before he became governor, taking a leading role in such leveraged buyouts as Hospital Corp. of America and Burger King. But Pagliuca is also known in Boston’s sports world as part of the ownership group that bought the Celtics in 2003 and helped lead them to a championship last year. And he has some experience in media investing. He helped start Information Partners at Bain Capital, a media technology venture fund, and sits on the boards of the Weather Channel and the Gartner Group, a research and publications company.

Connors, a 67-year-old Roslindale native who now lives in Brookline, made his name as a prominent Boston advertising executive. He sold the Hill, Holliday, Connors, Cosmopulos agency he cofounded in 1998 for more than $115 million, and has a net worth estimated at $500 million, according to published reports. He is chairman of Partners HealthCare, the region’s largest hospital system, is a major philanthropist and has been a forceful player in business matters across the city for many years. Connors has expressed interest in buying the Globe before, making his interest known in 2006.

And then there’s Taylor, 58, a cousin of past Globe publishers and a former Globe executive who left the newspaper nine years ago. Taylor, who lives in Milton, started at the Globe as a summer intern in 1971, joined the paper full time in 1980 and stayed for 20 years, becoming executive vice president of the paper and president of Boston Globe electronic publishing.

As lecturer in media at Yale University, Taylor has kept his hand in journalism in recent years, teaching a course on the economics and financing of journalism. Taylor also has connections to the world of finance, heading up a small private investment office called Densefog Group LLC.

Spokespeople for both the Times Co. and the Globe declined to comment yesterday. Also yesterday, a person connected to the Intercontinental Real Estate Corp. refuted a report that the real estate investment and management firm is interested in buying the Globe. This person, who requested anonymity because he was not authorized to speak about the matter, said the report in the Boston Herald was not accurate.

If the Times Co. were to sell the Globe, it would mark the end of a relationship that began in June 1993 with smiles, handshakes, and a press conference at the Parker House. The deal was not only the largest ever paid for a newspaper – $1.1 billion – but was seen by many as a merger of two of the most prominent American newspaper families: the Sulzbergers and the Taylors.

Dubbed a “royal marriage” by some at the time, the relationship paid off through much of the 1990s as the Globe continued to reap high advertising revenues, especially through its classified department. However, as internet advertising became more common about a decade ago, and newspaper circulation started to fall as more people began to get their news online, revenue at the Globe and most other papers fell rapidly.

Two months ago, these problems came to a head when the Times Co. threatened to shut down the Globe if the paper’s unions didn’t agree to $20 million in concessions through steep wage cuts and other measures. Most of the major unions have since ratified the cuts, making the Guild, the Globe’s largest union, the last holdout when its members narrowly voted down concessions Monday.

The Times Co. has since imposed a 23-percent pay cut, effective Sunday, and the union has filed unfair labor practice charges against the company. The two sides will meet again Monday, with the financial fates of nearly 700 Globe staffers unclear.

The ongoing battle is giving some potential bidders pause, according to people with knowledge of the process. However, an expert in media mergers and acquisitions said he expects the Times will find a buyer for the Globe, given the cuts the Times Co. has demanded and won.

Larry Grimes, president of the Maryland-based W.B. Grimes & Company, said it appears the Times may have even had potential buyers in mind when asking for the cuts.

“I just think there’s been a scenario put forth to the Times. ‘Under these circumstances, we’ll buy the paper. Meet these conditions,’ ” said Grimes, whose company has overseen the sale of 1,400 publications since 1959. “And it looks like that’s what they’re trying to do.”

Keith O’Brien can be reached at kobrien@globe.com. Beth Healy can be reached at bhealy@globe.com. Globe reporter Casey Ross contributed to this story.

© Copyright 2009 The New York Times Company

Regulators: Fund firm hid losses
Evergreen accused of tipping off some so they could cash out

By Todd Wallack, Globe Staff | June 9, 2009

Federal and state regulators yesterday accused Boston-based Evergreen Investment Management Co. of overstating the value of one of its mutual funds for a 17-month period, and then secretly tipping off select clients about steep losses in the fund before disclosing them to other investors.

Evergreen agreed to pay $40 million to investors who lost money in the fund as part of its settlement with the Securities and Exchange Commission and to hire an independent compliance consultant, who will review its procedures. It is also paying a $1 million fine to Massachusetts securities officials.

The allegations center on the Ultra Short Opportunities Fund, which Evergreen marketed as a conservative investment that provided shareholders with steady income at low risk. Instead, fund managers bought riskier mortgage-backed securities, some of which plunged in value in 2007, according to the complaints.

From February 2007 to June 2008, regulators said, members of the team that managed the Ultra Short fund failed to tell the valuation committee at Evergreen about price changes and other negative news that would affect the value of the fund’s holdings, or used pricing information that turned out to be unreliable. This had the effect of inflating Ultra Short’s value by as much as 17 percent. That meant investors who sold during this period got higher prices than they should have, while those who bought paid more than they should have.

Moreover, the inflated value made Ultra Short appear to be one of the best funds in its class, the SEC said, when it should have been ranked near the bottom of its category.

Securities lawyer Jahan K. Manasseh, who represents a client who lost money in the fund, predicted more legal cases against other investment companies that had supposedly safe, conservative bond funds, but lost money by investing in risky securities.

“They were often mislabeled and referred to as bond funds,” Manasseh said.

The SEC did not name the Evergreen employees responsible for the alleged violations. Evergreen said the two managers of the Ultra Short fund at the time were Lisa Brown-Premo and Robert Rowe. Company spokeswoman Laura Fay said they no longer work at the firm. Neither could be reached for comment.

In June 2008, regulators said Evergreen quietly alerted some important clients and middlemen that the value of the fund’s mortgage-backed securities had significantly declined, giving those investors a chance to dump their shares.

“By picking and choosing to disclose negative information to some investors and not others, Evergreen gave certain shareholders an unfair advantage and left others in the dark,” David P. Bergers, director of the SEC’s Boston office, said in a statement.

Massachusetts Secretary of State William F. Galvin said Evergreen began telling key investors and financial advisers who sell its mutual funds about Ultra Short’s problems on June 12, 2008. That prompted some to yank money out the next day, before the price plunged further.

Evergreen shut the fund on June 18, with remaining investors getting $7.48 per share, 22 percent less than the shares were worth at the start of the year. Just a week earlier, before Evergreen tipped clients about the problems, the fund’s shares had traded above $9.

Galvin said the investigation continues.

Evergreen did not admit to or deny the regulators’ assertions.

“We are committed to acting in the best interest of shareholders, and continue to move forward with our primary goal of safeguarding your investments and providing the high quality investment service you expect and deserve,” it said in a statement yesterday.

Evergreen runs 76 mutual funds, with $164 billion under management as of March 31. It’s now owned by Wells Fargo & Co., which bought its previous parent, Wachovia Corp., for $15 billion in December.

Todd Wallack can be reached at twallack@globe.com.

He seeks to build community and turn a profit

By Jenifer B. McKim, Globe Staff | June 7, 2009

Kirk Sykes, president of the Boston-based Urban Strategy America Fund, strives to create affordable housing and economic development with a solid return to investors. His projects include Olmsted Green, the fund’s first investment and mixed-use development in Mattapan that was built from the ground up. The development started selling condominiums this fall. Sykes’s efforts are being tested during a recession that is pushing buyers and investors to the sidelines. He recently spoke with Globe reporter Jenifer B. McKim.

Considering the difficult economic times, do you wish you got into a different business?

No. For me this is the culmination of a life’s objective of transforming communities. I’m in my third career. I was an architect, I was a developer, and now I’m a fund manager. I have tried improving communities with a pencil, a brick, and a dollar. The dollar was working pretty well until we hit the current financial crisis. What it takes to be rewarding as a life’s vocation is to be able to make that difference. We are continuing to do that although it’s gotten more challenging.

How so?

When debt is less available and not available at all, it is hard to do a project or if you are doing a project, you have to put more equity into it to get a lesser return. You get to do less projects. The guidelines are much more stringent. Each project becomes a project to get it done.

What is the triple bottom line you talk about?

Make money, make a difference, and make it green, or the three “Ps” – people, planet, and profit.

Is that harder to do now?

This notion of responsible property investing, which is blending financial returns with sustainable and economic development is becoming mainstream. You have seen it with green building. Five years ago, green building was a notion that was somewhat esoteric. Now through legislation, greater social consciousness, and investment, sustainability has become more mainstream.

Do you have any new plans?

We are in the process of executing projects that are in process and awaiting opportunities that will come as the economy continues to recover.

To attract buyers to Olmsted Green, you have dropped prices twice, this time by 20 percent. How many units have you sold, and do you expect another price decrease?

This price decrease just happened, and we’ve seen a significant increase in interest over the last couple of weeks. I don’t anticipate another price drop. With the combination of the price reduction, the federal first-time home buyer tax credit, and substantially lower interest rates, we’ve started to see some yield. We have two units under agreement of 19.

What’s happening with Parcel 24, the mixed-used development slated for Chinatown?

Right now it’s on hold. Parcel 24 is permitted and entitled and waiting for the market and buyers to return.

When will the market return?

It goes up and down every few weeks. In general, I think we are starting to see the bottom. The question is how long is the flat part. I also think it’s regional. I think we are closer to recovery in our own market and in the mid-Atlantic.

What kind of fires do you put out on a day-to-day basis?

The world of real estate is challenged and requires new creativity. It’s about being smarter, learning new ways to finance projects, finding out how to stimulate these public-private partnerships.

Tighter lending regulations have added another challenge to condominium developments. How will this affect new developments in Boston?

The trend is toward urban living and conserving on energy. People are downsizing their footprints and minimizing. All those things support the idea of condominium living. Right now it’s a challenge, but I think it will come back because urban living in space-constrained markets needs this form of ownership.

What advice do you have for other developers?

As a city we have some very unique things going for us. They probably have most to do with our medical and educational environments. I’m an advocate of cities. Suburban development would be more challenging for some time to come. Developers: Be near the city. Be near transit lines. Be near our world-class institutions.

Mortgage rates dip, remain below 5%

http://www.boston.com/business

By Associated Press  |  May 22, 2009

WASHINGTON – Rates on 30-year mortgages inched downward this week, remaining below 5 percent for the 10th-consecutive week and just above record lows.

Mortgage finance giant Freddie Mac said yesterday average rates on 30-year fixed-rate mortgages dipped slightly to 4.82 percent this week, down from an average of 4.86 percent last week.

The record low of 4.78 percent was recorded on the weeks of April 2 and April 30. Freddie Mac’s survey dates to 1971.

Low rates have sparked a surge in refinancing activity. The Mortgage Bankers Association said its index of application volume climbed 2.3 percent last week from a week earlier.

Applications to refinance existing loans made up nearly 75 percent of all applications.

To revive the economy, the Federal Reserve has cut its key interest rate to a record low near zero and is expected to hold it there well into next year.

The Fed at its meeting in March launched a $1.2 trillion economic revival effort. It agreed to starting buying up to $300 billion worth of government debt over the next six months and to boost purchases of mortgage securities and debt from Fannie Mae and Freddie Mac.

At the April meeting, some Fed policy makers said additional purchases “might well be warranted at some point to spur a more rapid pace of recovery,” according to documents released Wednesday.

Qualifying for a loan, however, is still tough. Lenders have tightened their standards dramatically over the past year.

The average rate on a 15-year fixed-rate mortgage fell to 4.5 percent this week from 4.52 percent last week, according to Freddie Mac. 

New York vs. Boston: Now it’s personal

The Times’ ultimatum to the Globe is ‘taking a shot at the community’

By David Whitford, editor at large
Last Updated: April 9, 2009: 12:17 PM ET

BOSTON (Fortune) — One of the saddest ironies about the possible demise of the Boston Globe is that most of us in Boston got the news when we woke up last Saturday morning and read about it in the Globe. “Times Co. threatens to shut Globe, seeks $20m in cuts from unions,” was the front-page headline.

Wow, great story! I read the whole thing from start to finish before I even thought about putting the kettle on for coffee. I showed it to my wife as soon as she came downstairs. Everybody I ran into that day, wherever I went, that’s the first thing we talked about.

That’s what newspapers do. They put big topics on the civic agenda, they set up the common conversation. And in Boston, no newspaper does that like the Globe.

Not the Herald, which is great for sports and gossip but it’s a sideshow, frankly; and not the alt-weekly Phoenix (even if it did scoop the Globe Friday night when it broke the news on its Web site).

“The Globe helped build our city,” Boston Mayor Thomas Menino told Fortune. “The Globe holds people accountable on the issues, and that’s important. You might not like it sometimes. Sometimes we don’t agree. But they ask tough questions and back it up with data, real data. That’s what’s important. They’re out there doing their work. It would be a real travesty if they weren’t around.”

Newspapers are struggling everywhere, we get that in New England. Denver’s Rocky Mountain News died earlier this year. The Seattle Post-Intelligencer and the Christian Science Monitor switched to online only. In Detroit, the Free Press and the News quit making home deliveries all but three days a week.

All were victims of what Ben Taylor, former publisher of the Globe and a descendent of Charles H. Taylor, the Globe’s first publisher in 1873, describes as the “secular slide that’s taking place in the newspaper business.”

And we get that the Globe is not immune. Weekday circulation, which stood at 323,983 for the six months ending Sept. 30, 2008, has been sinking steadily over the last decade, along with ad revenues. Five hundred union jobs have disappeared at the Globe since 2000. Losses are mounting: $50 million last year, according to published reports, and likely much more in 2010.

“I’m in the same business of trying to make budgets work,” Mayor Menino points out, reasonably, “and it’s very difficult these days when you don’t have the revenues to match your need.”

He’s right, of course. But there’s another factor here that might make us yearn for a little more righteous indignation on the part of our mayor. I’m referring to the involvement of a certain newspaper from a certain city. The New York Times Company (NYT) bought the Globe for $1.1 billion in 1993, and later added a 17% stake in two other Boston heirlooms, the Red Sox and Fenway Park.

While the Times recently put its piece of the Red Sox up for sale, so far, at least, it’s not talking about shutting down the team. That would get us roiled up, for sure. But is the Globe any less precious?

Former General Electric (GE, Fortune 500) CEO Jack Welch approached the Times a few years ago and asked if the Globe was for sale. Welch says he never made an actual offer. Whatever price he had in mind for the Globe plus the Times’ stake in the Red Sox, Fenway Park and New England Sports Network, he insists it wasn’t anywhere near the $600 million figure that was tossed around back then.

“I think the New York Times is being unfairly battered for the price they turned down from us because they never had that price,” says Welch. “That was the fictitious newspaper price. We sent a letter to [Times CEO] Janet Robinson. They wrote back and said they weren’t interested.” They might be now, but Welch has no interest any more in the Globe. “Oh no,” he says. “God no. We’ve moved on.”

So we’re left with the possibility that someone from the one city we hate more than any other might shut down our biggest, most important newspaper.

Bruce Mohl, who worked as a Globe reporter for 30 years and now edits Commonwealth, a Boston-based quarterly, says, “It is easy to see this as a negotiating ploy. Because if I was the New York Times and I was really serious about shutting it down, I think I would come out and say something to the public about why I’m even raising this issue, as opposed to just sort of sitting on my hands and not saying anything.”

“It’s offensive that they don’t even explain themselves,” says Mohl. “It’s not just taking a stance on the Globe, it’s taking a shot at the community, I think, and you’ve got to explain yourself if you’re going to do something like that.” So far, the Times isn’t saying anything.

Taylor, too, has a hard time imagining it would come to that, but, “I wouldn’t want to test it,” he says. “The players involved shouldn’t try to test that question, in my view. I don’t mean just the union players. I mean management and everybody else who’s got a stake in making this thing work.”

The last guy I talked to was Jim O’Shea, former managing editor of the Chicago Tribune and former editor of the Los Angeles Times. O’Shea was forced out of his job at the L.A. Times last year when he wouldn’t agree to carry out newsroom cuts ordered by his publisher. O’Shea is at Harvard on a fellowship this year, so he reads the Globe now. The Times’ “threat is just that,” he says, “a threat. I think they’re trying to get more money out of the place and that’s what every newspaper is doing these days.”

On the other hand, says O’Shea, this is “a company that is in New York, has a national newspaper, and it’s basically fighting to preserve quality journalism. And their back is against the wall because of the debt they took on and the downturn in the economy. So I’m sure they are going around to all their properties, including the one in New York, and asking for cost savings.”

“But I’m sure that it’s also true,” he said, “if you ask [Times publisher] Arthur Sulzberger, ‘What’s your No. 1 interest?’ he’s going to tell you, ‘It’s the New York Times.’ Because that’s the franchise. That’s the one that he’s going to want to see survive. And if others have to go in the process, they will go.” To top of page
First Published: April 8, 2009: 11:14 AM ET

Find this article at:

http://money.cnn.com/2009/04/08/news/companies/whitford_globe.fortune/index.htm

By Shelley Murphy, Globe Staff

A Wellesley businesswoman apologized to a State Police sergeant today and agreed to perform 200 hours of community service to resolve charges that she nearly ran him down with her Mercedes Benz SUV during a confrontation at Logan International Airport in March.

Margaret Greer, a 57-year-old portfolio manager and former Wellesley school board member, admitted during a hearing in East Boston District Court that there were sufficient facts to find her guilty of two misdemeanor charges of assault and battery on a police officer and failure to stop for a police officer.

“She wanted to get this behind her and she deeply regretted that this situation had ever occurred,” said Boston attorney Carol Starkey, who represents Greer and was at her side in the court. “It has been enormously difficult and traumatizing to her.”

Greer was picking up her husband at the airport March 29 when a trooper ordered her to move because her Mercedes was obstructing a bus lane, and she refused, according to a police report. (See previous coverage.)

Sergeant Daniel Wildgrube was writing Greer a ticket when she gunned her engine and sped off, hitting him with her car’s side mirror and forcing him to leap out of the way, according to his report. Wildgrube said he caught up to Greer, who was stuck in traffic, and ordered her to get out of the car because she was under arrest, but she again refused.

Wildgrube said he stood in front of Greer’s car with his hands on the hood and she continued to drive while he ran backwards for about 15 feet. Greer left the airport and was stopped minutes later by troopers on the Massachusetts Turnpike.

After Greer admitted today that there were sufficient facts to find her guilty of the two charges, prosecutors dropped a third charge of assault and battery with a dangerous weapon (her car), which is a felony.

East Boston District Court Judge Roberto Ronquillo Jr. continued the case without a finding and ordered Greer to write a letter of apology to Wildgrube, perform community service, and remain on probation for six months. If Greer completes those conditions and doesn’t get into trouble while on probation, the case against her will be dismissed in six months.

Jake Wark, a spokesman for Suffolk District Attorney Daniel F. Conley, said, “Her actions that day were dangerous and irresponsible and it is important she be held to account for them.”

But he added that Greer’s decision to resolve the case quickly and apologize “suggests a degree of remorse and responsibility that we don’t often see so soon after arraignment.”

David Procopio, a State Police spokesman, said that Wildgrube didn’t want to comment, but agreed with the resolution of the case. Procopio said Wildgrube could have been seriously injured and the State Police were pleased that Greer “acknowledged that the facts of the case affirm the State Police version of events.”

After the hearing, Greer personally apologized to Wildgrube and shook his hand, according to her lawyer.

Starkey described Greer as a Harvard University graduate and well-respected member of her community, who has held high-powered jobs and created programs to teach young women about finances.

She said she hopes Greer’s accomplishments aren’t overshadowed by the mistake she made at the airport.

“No one was injured, no property was damaged and no one was harmed, except Margaret,who paid an enormous price for her mistake,” Starkey said.

For more coverage of Wellesley, go to boston.com/wellesley.

Boston.com
The Associated Press
AP sources: Obama wants Fed to be finance supercop

By Anne Flaherty, Associated Press Writer | May 9, 2009

WASHINGTON –The Federal Reserve could become the supercop for “too big to fail” companies capable of causing another financial meltdown under a proposal being seriously considered by the White House.

The Obama administration told industry officials on Friday that it was leaning toward making such a recommendation, according to officials who attended a private one-hour meeting between President Barack Obama’s economic advisers and representatives from about a dozen banks, hedge funds and other financial groups.

Treasury Secretary Timothy Geithner and other officials made it clear they were not inclined to divide the job among various regulators as has been suggested by industry and some federal regulators. Geithner told the group that one organization needs to be held responsible for monitoring systemwide risk.

“Committees don’t make decisions,” said Geithner, according to one participant.

Officials from the Treasury Department and National Economic Council, which hosted the meeting, told participants that the Fed was considered the most likely candidate for the job, according to several officials who attended or were briefed on the discussions.

The administration officials said a legislative proposal would likely be sent to Capitol Hill in June with the expectation the House Financial Services Committee, led by Rep. Barney Frank, D-Mass., would consider the measure before the Independence Day recess.

The officials requested anonymity because the meeting had not been publicly announced and they were not authorized to discuss it.

A Treasury Department statement provided to The Associated Press on Friday confirmed Geithner’s position that he wants a “single independent regulator with responsibility for systemically important firms and critical payment and settlement systems.”

A spokesman said Geithner also is open to creating a council to “coordinate among the various regulators, including the systemic risk regulator.”

The Fed itself hasn’t taken a position on whether it should have the job, although Chairman Ben Bernanke has said the Fed would have to be involved in any effort to identify and resolve systemwide risk.

© Copyright 2009 The New York Times Company

The New England Xpo for Business will make its debut on May 19th 2009!

For more information CLICK: New England Xpo for Business 2009

The show will be held in Boston at the Boston Convention & Exhibition Center.

Dozens of educational sessions alongside over 300 exhibits cover business to business solutions in extensive categories for our attendees. The largest business networking party in state history will close the show and keep traffic on the show floor all day!

Event Management Exhibitor List (as of February 2009)

Company Name:	Booth #
@TimePay$	502A
128 Innovation Group	108
48HourPrint.com	441
A&A Metro Transportation	545 – 551
Administrative Business Resources	260
Advend Mobile Media	142 – 148
Advice for Living	151
ADVICOACH & The Entrepreneur’s Source	404
Aliptia	240
All Business Communications	350
American Airlines	250
American Laser Centers	221
Amtrak	406
Analytix Solutions	336
Ananke IT Solutions	301 & 303
Associated Industries of Massachusetts	119
AT+T	101
Au Bon Pain	408
B+W Press	320 & 322
Barter Connections, Inc.	249
Berway Visual Products	612
BlackDog Strategy & Brand	241
Blazing Signworks	402
Boston Business Journal	449
Boston Chapter of the American Marketing Association	460
Boston Globe Home Delivery	438
Boston Globe Media	212 & 214
Boston Red Sox	305
Boston’s Talk Evolution 96.9 FM-WTKK	235 & 237
Bryant University – Executive Development Center	220
BusinessWest	147 & 149
C-Level Enterprises, Inc. – We Will Supply	150
Canson Papershow	261
Cape Cod Chamber of Commerce / CVB	514
Cartridge World New England	515
Cash Recovery Specialists	323 & 325
Century 21 Commonwealth	108
Chestnut Hill Realty	451
Citizens Bank	329
City of Boston Office of Business Development	114
City of Hartford	247
CoCard	500A
Coface North America	525
Comcast Business Class	229
Comcast Spotlight	554
Commuter Check	121
CONECT	636
Conference Center at Waltham Woods	216
Consolidated Business Products	418
Coptech Digital, Inc.	351
Corda Performance Management Dashboards	407
Corporate (IT) Solutions	415
Corporate Work Study	638
CORT	409
Courageous Sailing Center	128
CPSI Conference 2009 – The Revolution Of Creativity	540
Custom Computer Solutions Corp.	512
D. Lawton Associates	634
Data Inc.	546
DATTCO, Inc.	501 – 608
David Fox, Photographer	141
DGI-Invisuals & AVT	555
Dunkin Donuts	341
East Commerce Solutions Inc	412
Eastern Connection	318
Edge Technology Services	435
Edible Arrangements South Boston	510
EMPLOYER SUPPORT OF THE GUARD + RESERVE	517
EP Levine	436
EPI Event Promo Items.com	123 & 125
Equal Employment Opportunity Commission	644
FedEx	529
FedEx Community Outreach	107
Fidelity Payment Services	335
First Trade Union Bank	361 & 363
Fulfillment, Print & Mail Solutions, Inc.	403
G4S Wackenhut	161
GBMP, Inc.	116
Glance.com	224
Grace-Hunt	139
Greater New England Minority Supplier Development Council	519
Greater Providence Chamber of Commerce	506
Hard Rock Cafe	548
Hartford Business Journal	640
HIGHLAND ESTATES COFFEE TRADERS	100 & 102
Hollister, Inc.	450
Horizon Info Services, LLC	215
HUB TECHNICAL SERVICES	419
HubSpot	620
IDEALaunch	344 & 346
Idearc Media	117
IEEE Boston Entrepreneurs’ Network	112
Image Source, Inc.	309
ImageWorks LLC	307
Inception Technologies Inc	411
Industrial Communications	504
Jack & Suzy Welch Book Signing	239
Jungle Inc	319
Just Ask A Nurse	444
Kenbar LLC	437
Kenoza Coffee and Vending	401A & 402A
Kidd-Luukko Corporation	236
Kurlan & Associates	316
L Denny Consulting	400A
Lasell College Graduate and Professional Studies	314
Limoliner	416
Lite Exhibit System	337
LockeBridge Investment Banking	254A
March of Dimes	448
Marriott Vacation Club International	223
Mass Business Association	313
Mass ESGR	517
Mass High Tech	447
Massachusetts Chamber of Business & Industy Inc.	120
Massachusetts Export Center	122
MASSEXCELLENCE	347
MassNetComms	201A
MathMarketing	440
MCergo	445
Microsoft	429
mindSHIFT Technologies	614
Moceansoft Consulting	513
Morgan Memorial Goodwill Industries	311
Mount Snow Resort	622
National Association of Women Business Owners Boston Chapter	130
National Grid	417
NaviSite Inc.	508
New England Business Media	642
New England Spas	646 & 648
New Wave Industries, Inc.	118
Northeast Christians At Work	100A
NSK Inc	135
OKI Printing Solutions	401
ONESIMCARD.com	618
Online Trading Academy Boston	422 & 424
Outside The Box IT	245
Ovations For The Cure	446
Owens Corning	152 & 154
Panera Bread	539
PayChoice	222
payrollGREEN.com	502A
PlumChoice	315
Principal Financial Group	541
Procurement Technical Assistance Center (PTAC)	138
PROSPER-IT	340
Qtask	349
RACKSPACE HOSTING	502
Reflections	246
Robert Half	544
RoloData Mailing & Services	110
Roxbury Technology	218
Sebastians Catering	414
SendOutCards	302A
Sentenia Systems	516
Service Point	523
SERVPRO – Team Mattos	348
SHRED-IT CORPORATION	160 – 166
SLENCIL COMPANY	500
SmartSource Rentals	156 & 158
snom technology, Inc.	223
Sourcecorp	225
SourceOne	104
Sprint Nextel	453 & 455
Squad 16 Consulting	317
Standard Modern Company	251
State Office of Minority and Women Business Assistance	132
Stonybrook Water Company LLC	518
Store To Door LLC	400
Sunbelt Business Sales and Acquisitions	338
T-Mobile	410
TD Banknorth	113 & 115
TechKnowledge Advisors Inc.	248
The Graduate Center at Bay Path College	550
The Hartford	217
The MarketKING	234
The Mel Robbins Show	151
The Ribbon Gift Albums	521
The Technology Therapy Group	439
The Union Group	244
TMI Executive Resources	254B
T-Mobile	410
Touch Ahead Software	137
Town Fair Tire Centers	434
UMASS Memorial – Caitlin Raymond International Registry	209
Uni Data and Communications	405
United Worldwide – Private Car Service	145
Unlimited Promotions	650
US General Services Administration	134
US Small Business Administration	140
USAi.net, Inc.	345
Vencom Communications, Inc.	334
VERIZON TELECOM / FIOS	423
Verndale	219
Vlingo	300A
WherePhone, Inc.	339
WIREGUIDED	413
Worcester Business Journal	640
www.TrillionDollarFunding.com	616
Yellow Book	301A
Business Resource Pavilion Participants:
Accion
Center for Women & Enterprise
City of Boston Office of Business Development
Community Business Network
General Services Administration
Initiative for a Competitive Inner City
Kirstein Business Branch – Boston Public Library
Mass Development
Mass Small Business Devt. Center Network
Mass Workforce Training Fund
Massachusetts Community Development Finance Corporation
Procurement Technical Assistance Center
SCORE
Small Business Development Center
SOMWBA
South Eastern Economic Development Corporation
U.S. Department of Commerce
U.S. Small Business Administration
Western Massachusetts Enterprise Fund

Marc Sherer President Event Management

By ANDREW VANACORE – 2 days ago

NEW YORK (AP) — Weighing in for the first time on the future of The Boston Globe, New York Times Co. Chairman Arthur Sulzberger Jr. said Thursday he hopes to cut the newspaper’s expenses enough to avoid having to shut it down.

“We hope to place this great newspaper on a path to sustainability,” Sulzberger said at the Times Co. annual shareholder meeting. He batted away specific questions on the Globe’s fate.

The recession — and the advertising downturn that began at many newspapers years before — have pushed the Globe deep into the red. The newspaper had an operating loss of $50 million last year and is on track for a loss of $85 million in 2009.

That has prompted the Times Co., which bought the Globe in 1993, to threaten to pull the plug on the newspaper if it can’t get employee unions to agree to concessions that would cut the company’s annual expenses by $20 million.

“Of all our properties, The Boston Globe has been most dramatically affected by the secular and cyclical forces that are roiling the entire media industry,” Sulzberger said. “More needs to be done to align the Globe’s costs and revenues.”

Times executives have not specified the Globe’s costs or explained how $20 million in concessions can save a newspaper losing more money than that. The Globe’s management this week rejected a proposal from union officials that negotiations be held publicly.

The idea that Boston could lose the 137-year-old newspaper has provoked angry reactions. Employees, union representatives and civic leaders are expected at a rally for the Globe at Fanueil Hall in Boston on Friday afternoon.

Meanwhile, some Times Co. shareholders expressed frustration with the decline in the company’s stock. Shares have fallen from a 2002 peak of over $50 to about $5.

David Norton, the company’s senior vice president for human resources, pointed out that executives are being paid less this year than last, after not having a salary raise in “multiple years.”

In response to a question about whether the Times Co. board had any plans to buy out shareholders, Sulzberger said “we have no plans to take this company private.”

The meeting came two days after the company reported a first-quarter loss of $74.5 million. With advertisers continuing to pull back, revenue dropped 19 percent in the first quarter, and Chief Executive Janet Robinson said the current quarter looks about as bleak.

Copyright © 2009 The Associated Press. All rights reserved.

1 hour 52 min 13 sec ago BBJ: Backup plans develop for Globe’s advertisers Play video

(NECN) – Last week’s New York Times’ threat to close down the Boston Globe has forced the local advertising community to plot emergency contingency plans.

For the past few years, ad revenues at the Globe have been declining. Now executives at the Globe have been forced to sell a product to advertisers which may not exist in a month.

Local advertisers, such as Herb Chambers, would likely move the print advertising over to online sites like CNN.com or Boston.com.

Some advertisers that the BBJ spoke with do not want the Globe to shut down out of personal reading preference, but feel the chances are high that it can shift advertising to a new venue.

Lisa van der Pool of the Boston Business Journal reports.

Penny stocks pillory companies

By Steven Syre, Globe Columnist  |  March 6, 2009

Question: What could you get with a share of Citigroup Inc. yesterday?

Answer: Change from your dollar. That was true on and off during the day, when shares of the financial giant changed hands for as little as 97 cents before finishing the session at $1.02.

The fact that shares of a company such as Citigroup would trade at penny-stock levels was a shocking development, no matter how much trouble the financial conglomerate faces. But stocks trading below $1 per share, sometimes far below that level, are becoming increasingly common.

The penny-stock ranks are growing as markets continue to take a pounding, sinking more than 4 percent yesterday alone. The Dow Jones industrial average plunged 281.40 to 6,594.44, while the Standard & Poor’s 500 index tumbled 30.32 to 682.55. The S&P benchmark closed at levels unseen since 1996.

US financial shares took a particularly hard fall, but the decline hit all industry sectors and stock markets around the world. Chinese officials dispelled hopes they would add to their stimulus plan, and investors braced for more bad news on US jobs that’s due out today.

Slumping markets have already prompted leading stock exchanges to loosen listing requirements for companies whose shares are under intense pressure. Last month, NYSE Euronext temporarily eased a requirement for companies listed on the New York Stock Exchange to maintain a minimum share price of $1. The Nasdaq Stock Market had already temporarily waived several listing rules, including the $1 per share minimum price requirement.

The danger of delisting is only one headache that develops when a company finds itself in the world of penny stocks. Financing becomes harder to arrange and much more expensive. Stock researchers are less likely to cover shares trading below a dollar, making it less likely investors will remember or remain interested in the business stories of those companies.

Worst of all, a stock that trades for less than $1 looks like a loser. “Once you’re there you’re in a netherworld and you’ve got a death rattle,” says Brian Stack, a portfolio manager at Pioneer Investments in Boston who invests in mid-size stocks.

There are stocks of all sizes in that category. Among companies included in the S&P 500, the ultimate blue-chip stock club, four saw their shares finish below $1 yesterday.

In Massachusetts, 37 of 232 public stocks traded below $1 yesterday. Virtually all of them have been clobbered since the stock market peaked on Oct. 9, 2007. On that sunny day, just five of the same 232 Massachusetts setts stocks were worth less than $1 per share.

Shares of Altus Pharmaceuticals Inc., a Cambridge company working on protein therapeutics, were worth $11.49 each in October 2007. They traded for just 17 cents yesterday. Shares of First Marblehead Corp., the student loan company in Boston, have plunged from $39.09 to 76 cents. Helicos Biosciences Corp., a Cambridge company that makes genetic-analysis equipment, saw its stock tumble from $8.75 to 50 cents. That’s a very long way down.

Stack points out that some small companies with share prices quoted in cents are salvageable businesses victimized by a dearth of stock-trading activity. Anyone who wants to sell shares of a big company like Citigroup can always find a buyer, but an investor unloading the stock of a small business in a bad market may see prices plunge because no one wants to purchase the stock.

The vast majority of Massachusetts companies with stocks under $1 qualify as small. A few names may be familiar, but most are relatively obscure. At those prices, the stocks are probably going to stay under the radar.

Many life-science companies and biotechnology businesses pop up on the local list of shares below a dollar. They usually need multiple rounds of financing to develop products and prefer to go to the stock market for that money. Raising money was their purpose for going public in the first place.

“These biotech companies tend to have a [cash] burn rate,” says Jim Weiss of Weiss Capital Management in Concord. “Until you get a product of some substance approved you have to continually replenish the cash.”

Companies with stocks below $1 are long-shot bets to bounce back, but it does happen sometimes. Shares of Boston’s American Tower Corp. sank to 75 cents in 2002 but climbed back to over $45 last year and closed yesterday at $27.35. Shares of Sonus Networks Inc., a Westford communications company, plunged below 20 cents in 2002 only to recover to more than $8 in 2007. Sonus stock has since slumped back to $1.18.

But most companies with shares below $1 don’t experience any big stock market recovery down the road. Some go out of business, others are acquired at low prices, and others just continue bumping along the bottom of the market.

Shares of Ibis Technology Group Inc., a semiconductor wafer company in Danvers, traded for just a penny each yesterday. But the same shares were worth just 7 cents when the market was riding high in October of 2007.

No matter where a company’s shares start, the penny-stock category is an expensive place that’s hard to escape. More companies are learning that every day.

Steven Syre is a Globe columnist. He can be reached at syre@globe.com.

Fidelity wants to hold your hand

As investors reel, the fund giant and others step up their advice-giving
By Robert Weisman, Globe Staff | March 11, 2009

• It’s not easy peddling financial advice when people are queasy about opening their quarterly retirement account statements.

But Fidelity Investments, seizing on what it views as an opportunity in uncertain times, will introduce a three-pronged financial guidance program in an effort to reassure wary investors buffeted by the turbulent economy, the company said yesterday.
Fidelity will host more than 500 free seminars for customers and noncustomers this month at its investment centers across the country, including more than 50 at New England branches. The sessions will cover more than a dozen topics, from market intelligence to retirement road maps, promising “actionable financial strategies” for investors at different stages of their lives. Fidelity said it may extend the seminars beyond March if there’s demand.

• It also is rolling out free online calculators and other Web-based tools to help investors evaluate their portfolios. And it is launching an advertising campaign promoting its program, called Guide to Personal Savings, or GPS, a play on the acronym for the navigational system that guides drivers.

The mutual funds giant, based in Boston, declined to say how much money it will spend on the program.
“Many individuals are looking at their portfolios with a fresh set of eyes,” Kathleen A. Murphy, the president for personal investing at Fidelity, said in a conference call with reporters yesterday. Fidelity’s goal is “to make this process easier” for those people, she said.
Murphy cited research showing 83 percent of Americans have not sought financial help in the past year because they feared it would be too costly or was designed solely for the affluent.
The campaign is designed to educate ordinary investors so they can “get back on track with their finances,” in Murphy’s words, not explicitly to sell stock-based mutual funds.

• Fidelity unveiled its program on a day the Dow Jones industrial average jumped 379.44 points, or 5.8 percent, to 6,926.49 in a bounce-back rally. It was the biggest point gain for the Dow since Nov. 24.

Famously bearish investor Jeremy Grantham, chairman of the Boston investment firm Grantham, Mayo, Van Otterloo and Co., meanwhile, posted a commentary on his firm’s website yesterday, urging investors to start moving money from cash to stocks and suggesting stocks may now be undervalued by 30 percent.
The broad market retreat has hurt mutual fund firms particularly. More money has flowed out of stock mutual funds than into the funds in five of the seven months ended Jan. 31, the most recent period for which data are available, according to the Lipper unit of the Thomson Reuters research firm. That lowers the amount of assets fund firms manage, which in turn reduces the fees they collect. The lower revenue means fund companies don’t have as much money to reach out and give new customers financial help.
“The assets in the fund industry, like every other industry, are down, especially equity fund assets,” said Greg Ahern, spokesman for the Investment Company Institute, a mutual funds industry group in Washington. “You’re seeing the demand for professional advice increase exponentially at a time like this, not only for advice about retail funds but about 401(k)s and other retirement funds.”

• Analysts said mutual fund companies and other financial firms have stepped up their hand-holding in recent months as the market has tumbled and the financial crisis has deepened, sending out investment newsletters, sponsoring Internet seminars called “Webinars,” and having more frequent phone conversations with rattled customers.

Other firms, such as Vanguard Group and T. Rowe Price, also host free seminars, though they are usually restricted to customers, and offer their own online planning tools. “We are continually coming up with new analyses helping people prepare for retirement and manage through this environment,” said Brian Lewbart, a spokesman for T. Rowe Price, a mutual funds firm based in Baltimore.
Fidelity’s program may be unique, analysts said, not only because it is backed by advertising but because it is tailored to investors – including noncustomers – spooked by the recession. The campaign, reaching out to individual investors and employees who are investing retirement funds through managed workplace accounts, is following the playbook of businesses that seek to capitalize on bad conditions to boost their market share in downturns, they said.

• “A lot of fund firms are ramping up communications,” said Dan Sondhelm, partner at SunStar Strategies, an Arlington, Va., marketing consulting firm for the financial industry. “They’re getting more phone calls and Web hits than ever because investors are scared. But not a lot of firms can afford to invest in advertising right now when their revenue is down 50 or 60 percent” because of the stock market slump.

Fidelity said details of its program, including its interactive online calculators and the times and locations of its educational seminars, will be posted on its website, www.fidelity.com.
Robert Weisman can be reached at weisman@globe.com.

Trade deficit falls to $36 billion in January
By Martin Crutsinger, AP Economics Writer  |  March 13, 2009

WASHINGTON –The U.S. trade deficit plunged in January to the lowest level in six years as a deepening recession cut demand for imported goods at an even faster rate than for exports.

The Commerce Department said Friday the trade imbalance dropped to $36 billion in January, a decline of 9.7 percent from December and the lowest level since October 2002.

The improvement was better than the $38 billion deficit that economists had expected and reflected the fact that crude oil imports dropped to the lowest point in three years and demand for a wide variety of other foreign goods from autos to heavy machinery and household appliances declined.

The import declines helped offset a continued slide in U.S. exports which fell to their lowest level since September 2006, a drop that has contributed to the severe recession in U.S. manufacturing.

For January, exports of goods and services fell 5.7 percent to $124.9 billion. Demand for a wide variety of U.S.-made products from farm goods to autos to civilian aircraft all dropped in January.

Boeing Co. and Caterpillar Inc. are among a number of major U.S. exporting companies that have announced layoffs due to falling demand for their products in key overseas markets.

Imports fell even more sharply in January, declining by 6.7 percent to $160.9 billion, the lowest level for imported goods since March 2005. The decline in imports was led by a 25.2 percent drop in imported crude oil, which fell to $11.9 billion in January, the lowest level since February 2005. The average price for a barrel of crude dropped to $39.81, also the lowest point since February 2005.

America’s deficit with many of its trading partners declined sharply although the politically sensitive imbalance with China bucked the downward trend, rising by 3.5 percent to $20.6 billion. U.S. exports to China plunged by 19.7 percent, a much bigger drop than the 1.3 percent decline in Chinese goods shipped to the United States.

U.S. manufacturing companies who have been battered by what they view as unfair competition from China said that the continued high deficit with China, the largest U.S. trade gap with any nation, pointed to the need for the Obama administration to take a tougher line than the Bush administraiton with China.

“The United States will not be able to jumpstart its economy unless it stops trade cheats like China from decimating U.S. manufacturing,” said Auggie Tantillo, the executive director of the American Manufacturing Trade Action Coalition, a group which is pushing the new administration to impose trade sanctions on China.

The overall January deficit of $36 billion, if it continued for the entire year, would result in a deficit of $432 billion for 2010, a drop of 36.5 percent from the $681.1 billion deficit recorded in 2008. That deficit represented a 2.7 percent drop from 2007, the first year that the trade gap had narrowed after setting records for five straight years.

Many economists believe the improvement for this year will be sizable as the country’s most severe recession in decades trims Americans’ appetite for foreign goods.

U.S. exports are also falling as the recession that began in the United States spreads worldwide. However, so far, the drop in imports is larger than the fall in exports, reflecting in large part the fact that oil prices have plummeted from the record levels they hit last year.

The trade deficit has now declined for a record sixth straight month, beating the prior record for declines of five straight drops set in 2007.

By country, the U.S. deficit with Canada, America’s biggest trading partner, dropped by 10.7 percent to $2.5 billion, the lowest imbalance since May 1999. The deficit with Japan fell 18.4 percent to $4.3 billion, the lowest trade gap with that country since January 1998. The deficit with the 27-nation European Union plunged 50.1 percent to $3.5 billion.

Many economists are worried that the spreading global economic weakness could prompt countries to resort to raising trade barriers in an effort to protect their domestic industries.

Treasury Secretary Timothy Geithner was meeting in Britain on Friday with finance ministers from the Group of 20 countries, which include the world’s wealthiest economies and major developing countries such as China, Brazil and India. President Barack Obama is pushing the G-20 nations to adopt sizable economic stimulus programs to jump-start their stalled economies. The U.S. Congress recently passed a $787 billion stimulus package that had been championed by Obama.

Former Dallas mayor Ron Kirk, tapped by Obama to be the nation’s top trade official, told the Senate Finance Committee at his confirmation hearing on Monday that his main objective as U.S. trade representative would be to enforce existing law and insist that U.S. trade partners play by the rules.
 
© Copyright 2009 The New York Times Company

Over the past few weeks, the U.S. newspaper industry has entered a new period of decline. The parent of the papers in Philadelphia declared bankruptcy, as did the Journal Register chain. The Rocky Mountain News closed, and the Seattle Post-Intelligencer, owned by Hearst, will almost certainly close or only publish online. Hearst has said it will also close the San Francisco Chronicle if it cannot make massive cuts. The most recent rumor is that the company will lay off half the editorial staff. Still, that action may not be enough to make the property profitable.

Related

24/7 Wall St. has created a list of the 10 major daily papers that are most likely to fold or shutter their print operations and only publish online. The properties were chosen on the basis of the financial strength of their parent companies, the amount of direct competition they face in their markets and industry information on how much money they are losing. Based on this analysis, it’s possible that 8 of the nation’s 50 largest daily newspapers could cease publication in the next 18 months. (Read “The Race for a Better Read.”)

1. The Philadelphia Daily News. The smaller of the two papers owned by Philadelphia Newspapers LLC, which recently filed for bankruptcy. The company says it will make money this year, but with newspaper advertising still falling sharply, the city cannot support two papers, and the Daily News has a daily circulation of only about 100,000. The tabloid has a small staff, most of whom could probably stay on at Philly.com, the Web operation for both of the city dailies.

2. The Minneapolis Star Tribune has filed for Chapter 11. The paper may not make money this year, even without the costs of debt coverage. The company said it made $26 million last year, about half of what it made in 2007. The odds are that the Star Tribune will lose money this year if its ad revenue drops another 20%. There is no point for creditors to keep the paper open if it cannot generate cash. It could become an all-digital property, as supporting a daily circulation of more than 300,000 is too much of a burden. It could survive if its rival, the St. Paul Pioneer Press, folds. A grim race.

3. The Miami Herald, which has a daily circulation of about 220,000. It is owned by McClatchy, a publicly traded company that could be the next chain to file for Chapter 11. The Herald has been on the market since December, but no serious bidders have emerged. Newspaper advertising has been especially hard-hit in Florida because of the tremendous loss in real estate advertising. The online version of the paper is already well read in the Miami area, Latin America and the Caribbean. The Herald has strong competition north of it, in Fort Lauderdale. There is a very small chance it could merge with the South Florida Sun-Sentinel, but it is more likely that the Herald will go online-only with two editions, one for English-language readers and one for Spanish.

4. The Detroit News is one of two daily papers in the big U.S. city badly hit by the economic downturn. It is unlikely that it can merge with the larger Detroit Free Press, which is owned by Gannett. It is hard to see what would be in it for Gannett. And with the fortunes of Detroit getting worse each day, cutting back the number of days the paper is delivered would not save enough money to keep the paper open.

5. The Boston Globe is, based on several accounts, losing $1 million a week. One investment bank recently said the paper is worth only $20 million. The paper is the flagship of what the Globe’s parent, the New York Times, calls the New England Media Group. The Times has substantial financial problems of its own. Last year, ad revenue for the New England properties was down 18%. That is likely to continue or get worse this year. Supporting larger losses at the Globe will become nearly impossible. Boston.com, the online site that includes the digital aspects of the Globe, will probably be all that remains of the operation.

6. The San Francisco Chronicle. Parent company Hearst has already set a deadline for shuttering the paper if it cannot make tremendous cost cuts. The Chronicle lost as much as $70 million last year. Even if the company could lower its costs, the Northern California economy is in bad shape. The online version of the paper could be the only version by the middle of 2009.

7. The Chicago Sun-Times is the smaller of two newspapers in the city. Its parent company, Sun-Times Media Group, trades for 3 cents per share. Davidson Kempner, a large shareholder in the firm, has dumped the CEO and most of the board. The paper has no chance of competing with the Chicago Tribune.

8. The New York Daily News is one of several large papers fighting for circulation and advertising in the New York City area. Unlike the New York Times, the New York Post, Newsday and Newark’s Star-Ledger, the Daily News is not owned by a larger organization — real estate billionaire Mort Zuckerman owns the paper. Based on figures from other big dailies, it could easily lose $60 million or $70 million, and has no chance of recovering from that level.

9. The Fort Worth Star-Telegram is another big daily that competes with a larger paper in a neighboring market — in this case, Dallas. The parent of the Dallas Morning News, Belo, is probably a stronger company than the Star-Telegram’s parent, McClatchy. The Morning News has a circulation of about 350,000, while the Star-Telegram has just over 200,000. The Star-Telegram will have to shut down or become an edition of its rival. Putting them together would save tens of millions of dollars a year.

10. The Cleveland Plain Dealer is in one of the economically weakest markets in the country. Its parent, Advance Publications, has already threatened to close its paper in Newark. Employees gave up enough in terms of concessions to keep the paper open. Advance, owned by the Newhouse family, is carrying the burden of its paper plus Condé Nast, its magazine group, which is losing advertising revenue. The Plain Dealer will be shut or go digital by the end of next year.

— Douglas A. McIntyre