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Boston Finance – The Future of Fort Point Channel

Boston Money — Sun, 15 Aug 2010 17:11:56 +0000

Revival on tap for Hub channel

$11m plan turns Fort Point into a social hot spot

By Casey Ross, Globe Staff | August 14, 2010

Fort Point Boston

Boston’s Fort Point Channel, for decades a polluted workhorse of industry, is about to undergo a dramatic transformation to a recreational and social playground that could host floating restaurants and music shows, kayak rentals and fishing charters.

This fall, major property owners along the channel will lay the groundwork for its renaissance with new public docks that will increase access to the milelong waterway, advancing the city’s vision of a civic space akin to the Boston Common or the Rose Fitzgerald Kennedy Greenway.

An $11 million plan for improvements to the channel is modeled, in part, on waterfronts in Chicago, Seattle, and other cities where museums, outdoor dining, and public events draw crowds to their shorelines.

The catalyst for the burst of activity in Boston is a law signed earlier this month by Governor Deval Patrick that essentially rezones the channel for recreational use, allowing installation of docks and other floating structures that were once banned to protect commercial navigation.

“These changes will allow us to take an urban waterway and activate it in ways that have been very successful in other cities,’’ said James Rooney, head of the nearby convention center and president of Friends of the Fort Point Channel, a civic group involved in the channel restoration.

Most of the boat ramps, taxi stations and docks will be built by commercial property owners who are required by their environmental permits to improve public access and amenities to their waterfronts.

Funds for many other improvements, such as floating art barges and water festivals, will be raised from fees charged to firms planning future building projects in the area.

New developments are moving slowly in the down economy, so it may take several years before new attractions are built. The shuttered Boston Tea Party Museum, for example, is still raising money to complete renovations and reopen facilities closed after being struck by lightning in 2001.

Another wave of improvements will probably result from the eventual redevelopment of the US Postal Service mail facility, which is planning to relocate to South Boston. But that project, too, has also been slowed by the recession.

Still, the new access points to begin construction this fall will open the channel to an array of possibilities, including floating restaurants and cafes, fountains, model boat racing, and other attractions included in a plan City Hall has for the area.

“I’ve always seen this area as a great opportunity for rowing and other events on the water,’’ Mayor Thomas M. Menino said in an interview. “Right now, it’s really just dead, unused space. But the improvements in access will help us open it up and plan for the future of that whole area.’’

Already Boston Properties has built a 60-foot ramp to a dock that will provide temporary docking service for visiting boaters behind the 32-story tower it is building at the corner of Congress Street and Atlantic Avenue. The tower will have an expansive public plaza on the channel to eventually include a new tour service and concierge desk that will provide information on waterfront attractions.

Further up the channel, Procter & Gamble Co., which owns Gillette and its sprawling headquarters in South Boston, will begin construction this fall on a 60-foot dock in an area that will be dedicated to canoeing and kayaking. City officials are also urging Procter & Gamble to provide free public parking on its property, a request the firm is considering.

The Boston Children’s Museum is planning to build a dock for a water taxi station next spring. The museum is also exploring floating educational facilities and a possible partnership with a boat rental service, although those plans are still being developed.

“We would love to see this channel come alive,’’ said Amy Auerbach, the museum’s chief financial officer. “There are so many teaching and learning opportunities, and we want to take advantage of that as much as we can.’’

In many ways, Fort Point is ideal for a public park. The channel itself is about a mile long with a watersheet stretching more than 50 acres, making the area larger than the Boston Common. The expanded access will offer new perspectives to view the Boston Tea Party, which was staged in this corner of the harbor in 1773, and the wharves and warehouses that made the city a maritime center. The channel is also protected from wind and choppy surf, making it an ideal place to learn to use kayaks and canoes.

Parts of it still suffer from its past as an industrial zone, particularly the further reaches between the MBTA railroad tracks and Interstate 93, where trash and other debris are in plain view.

For more than a century, the channel was an active shipping route that provided access to smoke-belching rail and lumber yards in South Bay. But commercial traffic slowed dramatically in the 20th century, and for the last 50 years it has remained largely unused.

Recently some portions of the channel waterfront were spruced up. A new boardwalk in front of the Boston Children’s Museum, for example, is a popular fishing site, a fact that still seems surreal to those who remember when water in the channel was repellent to any form of life.

Rooney is a South Boston native who vividly recalls the rotten-egg stench emanating from the channel during his youth.

“It was so bad you didn’t even want to walk or drive over the bridges, ’’ he said.

As the Greenway was a byproduct of years of Big Dig construction, Fort Point Channel’s comeback is due to another major public works project: The $3.8 billion cleanup of Boston Harbor, which removed decades worth of sewage and industrial filth and made the water safer for recreational use.

While today its gray-green waters are hardly pristine, the channel is free of dangerous levels of contaminants, and it offers a pleasant getaway for residents and office workers. Sunny afternoons bring lunch-time crowds; office workers gather with their Blackberries out as children fish and tourists whiz by on bicycles or Segway scooters.

Getting to the next step could take years, but environmental advocates say the first wave of change promises that the once-forgotten channel is on its way to becoming a much livelier place.

“It’s not instantly going to be Venice on the water, but it will offer cultural activities that people can easily access,’’ said Vivien Li, executive director of the Boston Harbor Association. “People from all over the city will be able to enjoy the waterfront in a very safe area.’’

Casey Ross can be reached at cross@globe.com.

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.

Massachusetts Financial News – DeLeo Rolls the Dice – Legalized Gambling in MA?

Boston Money — Sun, 09 May 2010 17:07:37 +0000

Casinos get boost as DeLeo signs on

Joins Patrick, Murray in push for gaming

‘Given the importance of economic development, … I have expanded my thinking,’ Robert A. DeLeo said.

By Matt Viser Globe Staff / September 19, 2009

House Speaker Robert A. DeLeo expressed strong support yesterday for bringing resort-style casinos to Massachusetts, one of the clearest indications yet that lawmakers are poised to expand gambling as they seek fresh revenues in a down economy.

In a separate speech yesterday morning, Senate President Therese Murray also made the case that Massachusetts should legalize casinos, asserting that they would bring hundreds of new jobs and capture money currently going to Foxwoods and Mohegan Sun in Connecticut.

The comments by DeLeo and Murray put the state’s top three political leaders on similar ground in support of resort-style casinos for the first time as the Legislature plans to begin considering a major bill as early as next month.

DeLeo has been a supporter of expanded gambling, but in the past has put an emphasis on installing slot machines at racetracks instead of building resort-style casinos complete with amenities such as hotels, shops, and golf courses.

“Given the importance of economic development, as well as the vital need for revenue, I have expanded my thinking,’’ DeLeo said in an address in Waltham to a meeting of Associated Industries of Massachusetts. “In addition to my backing of slots, I now support resort casinos.’’

At about the same time, Murray, speaking to the Plymouth Area Chamber of Commerce, said: “The reality is that hundreds of millions of dollars are going to Connecticut casinos from Massachusetts residents every year. We need to explore ways how we can capture that revenue.’’

She said building casinos would means hundreds of construction jobs, as well as permanent employment once the casinos open.

In an interview yesterday, DeLeo said House lawmakers are drafting legislation, with hearings likely to begin next month.

A debate before the full House, he said, could begin before lawmakers recess in mid-November, but seems more likely early next year.

Governor Deval Patrick’s plan to license three resort casinos was defeated last year, in large part because of opposition by House Speaker Salvatore F. DiMasi.

With DiMasi now out of office, the debate has shifted dramatically: It is no longer about whether Massachusetts will see expanded gaming, but when and in what form.

“What has interested me all along is the jobs and the revenue,’’ Patrick told reporters yesterday in the Berkshires. “And I think there is a way to do this that maximizes the jobs and revenues and minimizes – not eliminates, minimizes – the adverse impacts.’’

Still, the casino industry has struggled mightily with the economic downturn, forcing many developers to scale back projects and focus on retaining their current properties, rather than on adding new ones.

The Globe reported Sunday that Foxwoods in Connecticut, which has long been a success story in the casino industry, laid off about 6 percent of its workforce last year and saw its revenues from slot machines plunge 13 percent in July, compared with the previous year.

Nonetheless, DeLeo cast the plan yesterday as a ministimulus package for Massachusetts, one he said would bring in new revenues and create jobs as the state seeks to recover economically.

“I’m still trying to formulate my ideas, but I’m hoping this will not just be a gaming bill, but also an economic development one,’’ DeLeo said in the interview.

“I’m just really concerned about the future,’’ he said. “I think the only way we’re going to get out of this economy is jobs, jobs, and more jobs.’’

He also said that lagging state revenues are an incentive to find a new source of money.

That argument may have more urgency after Patrick announced yesterday that he expects to make further spending cuts this year because of falling revenues.

“I don’t see an appetite for new taxes, and we don’t have much left in the rainy day fund,’’ DeLeo said. “We need to bring in new revenue.’’

He also argued that slot machines could be installed quickly at the racetracks, bringing in new revenues, while giving casino companies more time to build resort casinos, which would create new construction jobs.

DeLeo said one option that may be considered involves the licensing of two casinos, one in Eastern Massachusetts, one in Western Massachusetts, and then allowing slots at Plainridge and Raynham Park racetracks.

But when asked about installing slots at racetracks, Murray said she is “not hot on that, but I’m going to listen.’’

“That’s fast money,’’ she said in an interview. “But is it sustainable?’’

She cited Twin River in Rhode Island, which relies on slots and filed for bankruptcy in June.

She said several senators have been working on different proposals over the summer, but added that it will take time to put together the regulatory framework that would allow casino developers to begin building.

“It’s really a three-year process,’’ she said. “If we’re going to do it, we need to start.’’

Many specifics have to be worked out, including how many casinos would be licensed, whether there would be any preference given to a Native American tribe, and how potential developers would secure the rights to build.

Casino developers have been closely monitoring the gambling debate in Massachusetts and have scoured the state for land and partnerships.

Mohegan Sun in Connecticut has been laying the groundwork to build a casino in Palmer, a small community near Springfield. Several developers have looked at land in neighboring Warren.

Suffolk Downs in East Boston has been jockeying for the past two years, securing key political backing and trying to ensure that it has the inside track on a Boston-area casino. Wonderland Greyhound Park in Revere has joined with Suffolk Downs to compete for one casino license.

One potential wrinkle is the Mashpee Wampanoag Tribe, whose attempt to use its federal rights to open a casino in Middleborough has been derailed by a US Supreme Court ruling.

There are several other developers who have hired lobbyists and expressed interest in Massachusetts previously, but have not announced specific plans.

Andrea Estes of the Globe staff contributed to this report. Matt Viser can be reached at maviser@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 Real Estate News – Michael Carucci Alerts FBI

Boston Money — Fri, 26 Feb 2010 00:24:35 +0000

Alleged threats rattled Realtor Michael Carucci

Unnamed figure in extortion case comes forward

By Shelley Murphy, Globe Staff – Article Courtesy of Boston.com CLICK HERE

Boston Realtor Michael Carucci thought he was going to be showing $1 million Back Bay properties to a new client during a meeting that had been arranged by phone but was a little scared when three men he described as thugs showed up at his office.

His fear turned to anger when the men said they had been sent by one of Carucci’s longtime friends, realtor David Gefke, to collect a $60,000 business debt. They allegedly even threatened him and his family.

“There was a part of me that just wanted to let this go,’’ Carucci said yesterday. “But at the end of the day, it isn’t right. And when they mentioned my wife and family . . . I think a message has to be sent that this is unacceptable.’’

Carucci, 51, chief executive of The Boston Real Estate Group, alerted the FBI and Boston police about the Jan. 29 confrontation, then cooperated in an investigation that led to the arrest of Gefke and another man Friday, followed by the arrest of two more men yesterday. All four are charged with extortion.

It is an ironic twist for Carucci, now seeking justice from the same government that once targeted him.

Mobster Stephen Flemmi

He was indicted in 1997 on federal charges that he laundered money for notorious Boston gangster Stephen “The Rifleman’’ Flemmi by helping him buy real estate in Boston’s Back Bay.

After a lengthy court battle, Carucci was acquitted of 94 counts. A jury convicted him of a handful of charges, but a federal appeals court overturned his conviction in 2004.

“I do believe in the system,’’ said Carucci, adding that his past legal battles did not give him pause in seeking the government’s help. “It was a very easy decision,’’ he said.

Carucci, who lives in a luxury downtown apartment and owns a Bentley, is not identified by name in the federal case and is referred to in an FBI affidavit as John Doe.

However, Michael Carucci acknowledged yesterday that he is the alleged victim.

The FBI affidavit unsealed in federal court this week alleges that Gefke, 48, who is president and founder of First Capital Mortgage Group in Boston and East Springfield LLC, dispatched several enforcers to threaten Carucci in a bid to force him to pay what he asserted was still owed on a $90,000 debt.

The FBI alleges that Carucci was also threatened at the Bristol Lounge at the Four Seasons Hotel in Boston and stripped of his $5,000 Mont Blanc watch. Later, he was allegedly forced to turn over several additional expensive watches.

Michael B. Lee, 29, an Irish national living in Dorchester, was arrested with Gefke Friday. Gefke and Lee are being held without bail pending a hearing Friday on whether they should remain jailed until the case is resolved.

Two more, Patrick Dehertogh and Brandon Milby, were arrested late yesterday on extortion charges and are expected to appear before a federal magistrate judge today, according to a spokeswoman for the US attorney’s office. She had no additional information on the two.

The affidavit says that Gefke filed a lawsuit last month asserting that Michael Carucci owed him money from the 2007-2008 renovation of a condominium on Commonwealth Avenue in the Back Bay.

Carucci’s attorney negotiated an out-of-court settlement, but when the deal fell apart, Gefke allegedly enlisted Lee and two other men to collect the money, the affidavit says.

The suit, filed by Gefke in Boston Municipal Court, alleges that Michael Carucci signed a promissory note in 2008 agreeing to repay East Springfield Street LLC, $47,650, plus 14 percent interest by March 11, 2009 for a loan on the condominium. The suit says he has not made any payment.

In a reply to the suit, Carucci denied breaching the contract.

Yesterday Michael Carucci said he agreed to pay the money to Gefke, but only if he signed an agreement that the debt was settled. He said an unidentified investor from Boca Raton, Fla., had funded the loan.

“I didn’t want to pay him the money, then two or three months later have the guy in Florida say, ‘You owe me the money,’ ’’ said Carucci.

He described Gefke as a longtime friend and said he was stunned that Gefke would allegedly send “legbreakers’’ to try to collect money from him.

Carucci said he is in a difficult situation and added that it is harder “given what’s happened to me in the past and how it could be misread by the general public that doesn’t have the facts.’’

Carucci summed up his past case as “a difference of opinion’’ with the Justice Department over what his responsibilities were when a qualified buyer wanted to buy real estate.

After Carucci’s indictment in the money laundering case, Flemmi was charged with 10 murders and publicly exposed as a longtime FBI informant. He is serving a life sentence after pleading guilty to the slayings.

“Had I known then what I know now, I wouldn’t have walked away from [Stephen “The Rifleman’’ Flemmi]; I would have run away from him,’’ Carucci said.

In the six years since he was exonerated in the money laundering case, Michael Carucci has become one of Boston’s most successful realtors.

#######################################

UNITED STATES v. CARUCCI

After a lengthy court battle, Michael Carucci was acquitted of 94 counts.

A jury convicted him of a handful of charges, but a federal appeals court overturned his conviction in 2004.

UNITED STATES, Appellant, v. Michael L. CARUCCI, Defendant, Appellee,

United States, Appellee, v. Michael L. Carucci, Defendant, Appellant,

United States, Appellant, v. Michael L. Carucci, Defendant, Appellee.

Nos.?02-2198, 03-1158 and 03-1244.

— April 13, 2004

Before LIPEZ, Circuit Judge, CAMPBELL, Senior Circuit Judge, and STAHL, Senior Circuit Judge.

Martin G. Weinberg, with who m Oteri, Weinberg & Lawson, were on brief, for Michael L. Carucci.Demetra Lambros, Attorney, with whom Michael J. Sullivan, United States Attorney, Richard L. Hoffman, Assistant United States Attorney, and James D. Herbert, Assistant United States Attorney, were on brief, for the United States.

Defendant-appellant Michael Carucci was a real estate broker and a business associate of Stephen Flemmi, the notorious leader of Boston’s “Winter Hill Gang.” Carucci and Flemmi were indicted on charges relating to money-laundering, but only Carucci’s case was tried. ? Both during and after the jury trial, the district court, pursuant to Fed.R.Crim.P. 29, entered judgments of acquittal on dozens of the charged counts. ? Ultimately, Carucci was found guilty of two counts of engaging in monetary transactions in criminally-derived property in violation of 18 U.S.C. §?1957.

On appeal, Carucci contends that the evidence was insufficient to establish criminal liability under the statute, and challenges the trial court’s “willful blindness” instruction to the jury. ? The government cross-appeals, contending that the district court erred in entering the post-verdict judgments of acquittal; ?in ordering a conditional new trial should the Rule 29 rulings be reversed; ?and in sentencing. ? For the reasons set forth below, we reverse Carucci’s conviction on the two counts and affirm the district court’s judgments of acquittal on the remainder.

I.?BACKGROUND

A.?Factual history

We set forth the facts underlying Carucci’s convictions in the light most favorable to the verdict. ? See United States v. Diaz, 300 F.3d 66, 69 (1st Cir.2002).

1.?238 Marlborough Street

Carucci’s company, Group Boston Real Estate, managed a building at 238 Marlborough Street in Boston. ? One of the owners of the property expressed interest in selling, and Carucci offered to help find a buyer. ? In 1991, Carucci submitted a bid from Flemmi. ? During the negotiations, the seller asked Carucci where Flemmi’s money was coming from, and Carucci told them it was from lottery winnings. ? Flemmi, however, told others that the money was from a family trust. A few months after the sale, Carucci told the seller that the money had come from Flemmi’s family.

In the course of the property sale, Carucci referred Flemmi to Anthony Summers, a real estate lawyer. ? At trial, Summers testified that in September, 1992, Carucci asked Summers whether he thought it would be a problem to sell real estate to Flemmi. ? Summers responded, “as long as he did everything legally, that I didn’t think he’d have a problem.”

On October 2, 1992, the Marlborough Street deal closed for $945,000. ? Carucci, Summers, and Flemmi, among others, attended the closing. ? The purchaser was a nominee trust set up by Summers, the “238 Marlborough Street Trust.” ? The trustees were Carucci and one of Flemmi’s sons, Stephen Hussey; ?Flemmi was the beneficial owner. ? Flemmi paid in cash with seven checks. ? The checks were drawn from different accounts, none of which bore Flemmi’s name, and different banks. ? Three were payable to the Mary Irene Trust?¹ (of which Flemmi was a trustee), three were payable to Mary Flemmi (Flemmi’s mother) and one was payable to Jeanette Flemmi (Flemmi’s ex-wife). ? In conjunction with the sale, Summers drafted a mortgage evidencing a $975,000 loan from the Mary Irene Trust to the 238 Marlborough Street Trust. ? The mortgage, on which Flemmi’s name appeared, was publicly recorded.

Also on October 2, 1992, Flemmi and Carucci entered a joint venture agreement concerning the development and sale of the condominium units at 238 Marlborough Street. ? Carucci invested $15,000 of his sales commission into the joint venture, and Flemmi handled the remaining costs.

2. ?362 Commonwealth Avenue

In mid-1992, another real estate broker told Carucci that 362 Commonwealth Avenue in Boston, a commercial condominium containing a laundromat, was available as an investment property. ? Carucci submitted an offer on the property signed by Hussey as trustee of SMS Realty Trust and provided a binder check for $1,000 signed by him and drawn on the account of Group Boston. ? He also participated in the sale negotiations.

According to the purchase and sale agreement, the purchaser of the property was Jeannette Benedetti, trustee of Comm-1 Realty Trust. The agreement was signed by Benedetti and Karen Snow, Flemmi’s daughters. ? On October 26, 1992, Carucci signed over to the listing broker a check for $5,125 from the Mount Washington Bank payable to Group Boston to serve as a deposit.

At the property closing on December 9, 1992, three checks were tendered as payment: ?a Mount Washington Bank check in the amount of $30,500 and a Hyde Park Savings Bank check in the amount of $70,000, both payable to Benedetti, and a $16,408.37 Winter Hill Federal Savings Bank check payable to Summers & Summers.

Prior to the closing, in November, 1992, Commonwealth Laundries, Inc. was formed, with Carucci and Flemmi as the major stockholders. ? Jian-Fen Hu, Flemmi’s girlfriend, was president, treasurer, clerk, and director. ? On December 11, 1992, Commonwealth Laundries entered into a lease of 362 Commonwealth Avenue with Comm-1 Realty Trust. ? Hu and Benedetti (as trustee) signed the lease. ? Commonwealth Laundries borrowed $120,000 from the Mary Irene Trust to purchase equipment and $110,000 from Flemmi for improvements.

At trial, Flemmi’s other son, William St. Croix, testified pursuant to an immunity agreement about his many years of criminal activity. ? He also testified that he first met Carucci at his father’s home in Milton, Massachusetts, in 1990 or 1991. ? At that time, Carucci told him he was going to broker the sale of the house. ? When St. Croix asked Carucci if he knew who his father was, Carucci responded, “Yes, everybody knows who your father is. ? Your father was the big guy.” ? St. Croix testified that he visited Group Boston’s offices “probably hundreds of times.”

B.?Procedural history

On March 11, 1997, a grand jury of the United States District Court for the District of Massachusetts returned a 103-count indictment against Flemmi and Carucci. ? It charged both defendants with conspiracy to commit money-laundering in violation of 18 U.S.C. §?1956(h); ?substantive money-laundering offenses in violation of 18 U.S.C. §?1956; ?transactions in criminally derived property in violation of 18 U.S.C. §?1957; ?and RICO conspiracy in violation of 18 U.S.C. §?1962(d). ?In May 2001, as part of a consolidated plea in another case, Flemmi pleaded guilty to an information that encompassed the money-laundering conspiracy charges and the charges against him in this case were dismissed.

In March and April, 2002, Carucci alone was tried before a jury. ? At the close of the government’s case, pursuant to Fed.R.Crim.P. 29(a), the district court granted Carucci’s motions for judgment of acquittal on counts 1, 14-66, and 76-103. ? It then submitted counts 2-13 and 70-75 to the jury. ? These counts charged violations of §§?1956 and 1957 and concerned the laundromat venture. ? Specifically, counts 9-13 and 73-75 related to the purchase of the condominium, and counts 2-8 and 70-72 related to the purchase of the laundry equipment.

On April 16, 2002, the jury returned a verdict finding Carucci not guilty on the §?1956 counts (2-13) and guilty on the §?1957 counts (70-75). ? At a post-verdict hearing, the district court granted judgment of acquittal on counts 70-72 and 74, and provisionally granted a new trial on those counts. ? This left standing only the verdicts on counts 73 and 75, which concern, respectively, the December 9, 1992, transfer of a Mount Washington Bank check in the amount of $30,500 and a Hyde Park Savings Bank check in the amount of $70,000.

On December 20, 2002, the district court sentenced Carucci to ten months in the custody of the Bureau of Prisons, with a recommendation that Carucci serve his sentence in a community confinement center (CCC), followed by twenty-four months of supervised release. ? The same day, the Department of Justice announced that the Bureau of Prisons would no longer permit CCC placement for more than ten percent of the sentence imposed. ? On December 31, 2002, the district court revised the sentence to encompass five months’ incarceration and five months’ home confinement.

II.?DISCUSSION

A.?Carucci’s challenge to his conviction under 18 U.S.C. §?1957

Carucci contends that there was insufficient evidence to convict him on counts 73 and 75, which charge him with engaging in monetary transactions in criminally-derived property in violation of 18 U.S.C. §?1957. ? We review Rule 29 determinations de novo. ?United States v. Boulerice, 325 F.3d 75, 79 (1st Cir.2003) (citing United States v. Carroll, 105 F.3d 740, 742 (1st Cir.1997)). ? We will affirm the conviction if, “after assaying all the evidence in the light most amiable to the government, and taking all reasonable inferences in its favor, a rational factfinder could find, beyond a reasonable doubt, that the prosecution successfully proved the essential elements of the crime.” ?Id. (quoting United States v. O’Brien, 14 F.3d 703, 706 (1st Cir.1994)).

To establish a violation of 18 U.S.C. §?1957, the government must prove that (1) the defendant engaged or attempted to engage in a monetary transaction with a value of more than $10,000; ?(2) the defendant knew that the property involved in the transaction had been derived from some form of criminal activity; ?and (3) the property involved in the transaction was actually derived from specified unlawful activity. ?18 U.S.C. §?1957(a).² Subsection (c) of the statute provides: ?“the Government is not required to prove the defendant knew that the offense from which the criminally derived property was derived was specified unlawful activity.” ?Id. §?1957(c). ?In other words, a defendant may not be convicted under §?1957(a) unless he knew that the transaction involved “criminally derived property,” but he need not know that the property was derived from the “specified unlawful activity.” ?United States v. Richard, 234 F.3d 763, 768 (1st Cir.2000) (quoting United States v. Gabriele, 63 F.3d 61, 65 (1st Cir.1995)) (internal quotation marks omitted).

Carucci maintains that the evidence as to each of these elements is insufficient to support conviction on counts 73 and 75. ? We need not address the first two requirements of §?1957, because we hold that the government did not adduce sufficient evidence that the purchase of 362 Commonwealth was derived from proceeds from specified unlawful activity. ? We explain below.

1.?Scope of the specified unlawful activity

A threshold issue on appeal is the scope of the specified unlawful activity (“SUA”) charged to the jury. ? The indictment set forth four SUAs as underlying the §§?1956 and 1957 charges: ?drug trafficking, extortion, loan sharking, and gambling. ? During the charge conference, the district court ruled that there was insufficient evidence to submit loan sharking and drug dealing to the jury.

In the jury charge, however, the court’s instructions were inconsistent. ? During two occasions in the charge, the court instructed that all four crimes constituted specified unlawful activity. ? First, it stated:

You are instructed that the offenses of conducting an illegal gambling business, engaging in extortionate credit transactions, interference with commerce by extortion, and distribution and conspiracy to distribute narcotics ? constitute specified unlawful activity ?

Later, after reciting the four offenses again, the court instructed:

Each of the crimes just listed qualifies as specified criminal activity. ? Thus, if you find beyond a reasonable doubt that any of the funds involved in the transactions listed in the indictment derived from the commission of any of these crimes by any person, then the transactions involved proceeds derived from specified criminal activity.3

The court then stated that it would provide further details as to the elements of the SUA offenses later.

In the context of instructing on §§?1956 and 1957, however, the court described only the elements of extortion and gambling. ? As to those two offenses, it stated that it was instructing the jury “as to the elements of the offenses listed as specified unlawful activity in the indictment ?” It set forth the elements of extortion and gambling that the government had to prove beyond a reasonable doubt in order for the jury to find a crime “from which Flemmi derived illegal proceeds.” ? The court did not state the elements of loan sharking or drug trafficking, and did not mention those offenses again.

Carucci maintains that the district court’s failure to set forth the elements of drug trafficking prevented the jury from basing a §?1957 conviction on that SUA.⁴ We need not decide this issue because, even assuming that the jury was instructed correctly, there is insufficient record evidence that the funds used in the real estate transactions were actually derived from the specified unlawful activities, as opposed to other criminally derived proceeds. See section II(A)(2), infra.

2.?Evidence of specified unlawful activity

As discussed supra, the statute requires proof that the property involved in the transaction was actually derived from specified unlawful activity. ?18 U.S.C. §?1957(a). ? Application of this requirement is not always straightforward. ? This circuit and others have held that §?1957 convictions necessitate proof beyond a reasonable doubt of the predicate crime. ? See, e.g., United States v. Burgos, 254 F.3d 8, 14 (1st Cir.2001) (stating that in order to convict the defendant of money-laundering, “the government had to prove that he had attempted to distribute cocaine to satisfy the specified unlawful activity element of the crime” (internal quotation marks omitted)); ?United States v. Lovett, 964 F.2d 1029, 1041-42 (10th Cir.1992) (“the elements of the particular ‘specified unlawful activity’ ? are essential elements that the prosecution must prove in order to establish a violation of §?1957”); ?see also United States v. Blackman, 904 F.2d 1250, 1257 (8th Cir.1990). ? However, proof of a specific, individual underlying offense-i.e., a particular unlawful mailing in a mail fraud SUA, or a particular drug sale in a drug trafficking SUA-is not necessary to support a §?1957 conviction. ? See United States v. Richard, 234 F.3d 763, 768 (1st Cir.2000); ?United States v. Mankarious, 151 F.3d 694, 701-02 (7th Cir.1998). ? Rather, circumstantial evidence may suffice to allow a jury to infer a predicate act from an overall criminal scheme. ? See, e.g., Mankarious, 151 F.3d at 702-03; ?United States v. Jackson, 983 F.2d 757, 766-67 (7th Cir.1993); ?Blackman, 904 F.2d at 1257.

Even applying this broad construction of §?1957 liability, the evidence of specified unlawful activity adduced at Carucci’s trial was insufficient to support his conviction.⁵ We first consider the evidence of gambling and extortion, the two SUAs that were unequivocally charged to the jury. ? During the extensive trial testimony, the only specific mention of either gambling or extortion was by Flemmi’s son, St. Croix. ? Initially, he testified as to his personal criminal history:

Q:? What other types of criminal activities have you been involved in?

A: ?I have been involved in drug rip-offs, selling drugs, extortion, gambling, arson, operating an illegal club.

St. Croix then stated that Flemmi was involved in “some” of those activities, but did not specify which ones. ? No other witnesses testified about Flemmi’s participation in gambling or extortion, or about proceeds therefrom. ? Thus, at very best, St. Croix’s testimony fell short of stating that Flemmi engaged in gambling or extortion, and there was simply no other evidence on this critical point.

St. Croix’s testimony suffers from an additional weakness: ?it did not indicate a time frame in which the gambling and extortion, if any, occurred. ? In order to establish §?1957 liability, Flemmi must have derived proceeds from gambling or extortion before November 22, 1992, the last date money was deposited into the accounts on which the transactions at issue were drawn. ? See Mankarious, 151 F.3d at 704 (“A money launderer must obtain proceeds before laundering can take place.”); ?United States v. Christo, 129 F.3d 578, 580 (11th Cir.1997) (same).

After careful consideration of the record, we conclude that there was insufficient evidence for a rational jury to find that Flemmi derived proceeds from gambling or extortion before November 22, 1992. The gambling SUA, as the district court instructed, required proof beyond a reasonable doubt that Flemmi conducted a gambling business that (1) violated Massachusetts law; ?(2) was knowingly and intentionally conducted, financed, managed, supervised, directed or owned by five or more persons; ?and (3) which was either in substantially continuous operation for thirty or more days or had a gross revenue of $2000 or more on any single day. ? See 18 U.S.C. §?1955. ? Even if the jury could have reasonably inferred a violation of Massachusetts law, there was no evidence presented to the jury as to the second or third elements required for the specified federal gambling crime. ? Moreover, the term “gambling” is possessed of common meanings apart from the legal definition. ? See Webster’s Third New International Dictionary 932 (1986). ? Even if the jury believed that Flemmi was involved with “gambling,” we cannot presume that it found that all of the elements of §?1955 were satisfied.

As to extortion, the SUA required the government to prove that (1) Flemmi knowingly and willfully obtained property from the victim by means of extortion; ?(2) Flemmi knew that the victim parted with property because of extortion; ?and (3) the extortion affected interstate commerce.⁶ 18 U.S.C. §?1951. ? Again, no evidence was presented to the jury as to these elements. ? As with gambling, St. Croix’s equivocal identification of Flemmi with only “some” of his own criminal activities fell short of indicating that “extortion” was one of them. ? Furthermore, even if the jury could reasonably surmise from St. Croix’s use of the terms “gambling” and “extortion” that Flemmi’s conduct satisfied the statutory elements of those offenses, there is no evidence linking it to the relevant accounts during the relevant time period in the relevant amount.

As to the SUA of drug trafficking, the government points to two pieces of evidence purporting to link Flemmi to drug trafficking proceeds. ? First, St. Croix testified that a drug dealer named Johnny Debs agreed to purchase $100,000 of cocaine from him in the late 1980s. ? He stated that Debs knew nothing about St. Croix, but approached him because of Flemmi’s reputation as a narcotics dealer. ? Second, St. Croix testified that he took drugs from dealers whom he promised to pay after selling the drugs. ? He did not intend to repay the dealers, however, and said he instead “would divvy it up with people that I was involved in and later my father.” ?(It is not entirely clear from the testimony whether this scheme was merely a plan, or whether the “divvying” in fact took place.) ? St. Croix also testified that he was involved in drug trafficking from 1989 to 1997.

Assuming without deciding that this evidence shows that Flemmi engaged in drug trafficking, it falls short of establishing that the funds used in the real estate transactions were actually derived from drug funds as opposed to other criminally-derived proceeds. ? As with gambling and extortion, there is no evidence as to the amount of proceeds or the specific time frame in which the proceeds were conveyed to Flemmi. ? Indeed, the fact that St. Croix specified that any sharing with Flemmi happened “later” suggests that Flemmi was unlikely to have derived drug-trafficking proceeds before the 1992 transaction. ? Accordingly, to infer from this testimony that at least $10,000 of the funds involved in the real estate transaction in 1992 were derived from Flemmi’s drug trafficking is too great a stretch.

The government points to evidence of Flemmi’s leadership of an organized crime gang and apparent lack of legitimate income to support the SUAs. It argues that the testimony that Flemmi was a leader of the Winter Hill Gang “told the jury much about Flemmi and his money.”?⁷ The government also points to the fact that Flemmi’s parents had meager incomes and lived frugally, and hence could not have provided any money to Flemmi for the purchase.

While these factors certainly suggest criminally derived income in a general sense, the evidence fails to supply a link to gambling, extortion or drug trafficking specifically. ? Accepting that Flemmi’s income was illegitimate, it could have been linked to any number of criminal activities; ?to conclude from this evidence that Flemmi derived proceeds from the specified SUAs is simply too speculative.

Moreover, a §?1957 conviction cannot be based solely on the finding that a known criminal had no other legitimate income. ?Blackman, 904 F.2d at 1257. ? In the cases cited by the government, courts generally affirm money-laundering convictions only where such evidence is accompanied by additional, more specific indicia of criminal activity. ? See, e.g., United States v. Hetherington, 256 F.3d 788, 794 (8th Cir.2001) (evidence of defendant’s awareness that his company’s “entire operation was based on deceit”); ?United States v. Eastman, 149 F.3d 802, 804 (8th Cir.1998) (evidence of defendant’s illegal drug purchases, and evidence that the money defendant provided for transaction had a drug scent); ?United States v. Meshack, 225 F.3d 556, 572 n. 12 (5th Cir.2000) (evidence of drug transactions at defendant’s restaurant); ?United States v. King, 169 F.3d 1035, 1039 (6th Cir.1999) (evidence that defendant “coordinated a multi-person drug distribution business”).

The government also contends that Flemmi’s use of cash and money orders-as well as his use of multiple banks, multiple checks, and nominee trusts-supports the inference that the transactions were derived from SUAs. Again, this evidence does not establish a sufficient nexus to the specified SUAs. While it is true that a suspiciously structured financial transaction can constitute circumstantial evidence of money-laundering, the cases cited by the government consistently feature additional evidence of unlawful activity. ? See, e.g., United States v. Smith, 223 F.3d 554, 577 (7th Cir.2000) (“Witnesses testified that Wilson personally bought and sold drugs, so the jury knew that he had illegal cash sloshing around that could have been used.”); ?United States v. Reiss, 186 F.3d 149, 152-53 (2d Cir.1999) (in convoluted sale of airplane, an associate who was “heavily involved in narcotics trafficking and money laundering in the United States” facilitated the transaction). Here, there is no comparable evidence that Flemmi had engaged in the specified SUAs in the relevant time period.

In sum, the evidence in the §?1957 case against Carucci is simply too thin. ? While Flemmi’s apparent lack of legitimate income and the structuring of his financial dealings certainly suggest criminal activity, the government failed to prove a nexus to the alleged specified unlawful activity, much less to the accounts involved in the transactions at issue. ? Carucci’s convictions on counts 73 and 75 cannot stand.⁸

B.?The government’s cross-appeal

We now turn to the government’s cross-appeal. ? The government contends that the district court erred in allowing Carucci’s motion for acquittal on counts 70 through 72 and 74, which set forth additional violations of §?1957. ?(Counts 70 through 72 related to the purchase of the laundry equipment; ?count 74 related to the purchase of the condominium.) ? As grounds for its decision, the district court stated that there was insufficient evidence to establish that Carucci knew that the property involved in the transactions had been derived from criminal activity.

As noted supra, we review Rule 29 determinations de novo. ? Counts 70-72 and 74 are fatally undermined by the government’s failure of proof as to §?1957′ s requirement that the transactions at issue were derived from specified unlawful activity. ? As discussed supra, no reasonable jury could conclude that the purchases of the equipment or condominium involved proceeds from Flemmi’s gambling, extortion, or drug trafficking. ? Accordingly, we affirm the district court’s grant of Carucci’s Rule 29 motion, albeit on different grounds.⁹

III.?CONCLUSION

For the reasons set forth above, we reverse Carucci’s convictions on counts 73 and 75 of the indictment and affirm the district court’s judgments of acquittal on counts 70-72 and 74.

FOOTNOTES

1. ?The money contributed by the trust constitutes more than half of the total payment and can be linked to a series of substantial cash deposits over a one-month period in 1982 at Winter Hill Savings Bank.

2. ?18 U.S.C. §?1957(a) states, in relevant part:“Whoever ? knowingly engages or attempts to engage in a monetary transaction in criminally derived property of a value greater than $10,000 and is derived from specified unlawful activity, shall be punished ?”

3. ?This instruction was given during the portion of the charge dealing with the §?1956 claim. ? It was expressly incorporated into the portion concerning §?1957.

4. ?At oral argument before this court, the government expressly abandoned its argument that loan sharking constituted a SUA for purposes of the §?1957 charge. ? Accordingly, we do not consider it further.

5. ?The government attempted but failed to present additional evidence concerning the SUAs. At trial, the district court excluded extensive testimony by government witnesses concerning Flemmi’s participation in extortion, drug dealing and gambling schemes, as well as his lack of legitimate income. ? The court determined that the proffered evidence was insufficiently linked to the transactions specified in the indictment and to Carucci’s criminal liability. ? Additionally, the court held that some of the evidence suffered from hearsay and relevance problems. ? The government’s position on appeal is that the evidence that the district court allowed in was sufficient, standing alone, to support Carucci’s §?1957 convictions.

6. ?It appears to be undisputed that it is Flemmi’s criminal conduct that is at issue for purposes of §?1957, not St. Croix’s.

7. ?The government also goes into some depth as to St. Croix’s involvement with drug dealing and extortion and expressly urges us to apply the saying “like father, like son.” ? None of the evidence concerning St. Croix’s conduct supports a conclusion that Flemmi himself engaged in the SUAs.

8. ?Accordingly, we need not deal with the other issues Carucci raises on appeal, including the adequacy of the jury instructions.

9. ?As a result of this holding, we need not address the district court’s award of a conditional new trial should the Rule 29 rulings be reversed. ? Nor do we address the sentencing issue raised by the government.

Boston Financial Developement – Rose Kennedy Greenway

Boston Money — Fri, 07 Aug 2009 23:41:05 +0000

Apartments, museum lead race for Greenway site

BRA says proposals most consistent with its plans for parcel

By Casey Ross Globe Staff / August 7, 2009

A 78-unit apartment building and a museum focused on local history became the front-runners yesterday in a competition to develop a sliver of land that would become the cornerstone of a public market district along the Rose Fitzgerald Kennedy Greenway.

The proposals, both of which call for a food market on the ground floor, were singled out yesterday by the Boston Redevelopment Authority as the most consistent with its plans for the property, located next to the weekend gathering of Haymarket vendors on Blackstone Street.

The news came a day after city and state officials raised financial concerns about the only two proposals submitted for a market in an adjacent building known as the parcel 7 garage. City officials want to use that building and the land discussed yesterday, known as parcel 9, to create an expansive public area for local growers for food sellers.

One of the favored proposals for parcel 9 was submitted by Boston Museum, which wants to construct a glass and terra-cotta building with four floors of interactive exhibits above the market. The other was submitted by Eastat Realty Capital, of Boston, which is proposing to build apartments and a parking garage over the market.

The BRA offered support for the proposals in a letter to the Massachusetts Turnpike Authority, which owns the property and is collaborating with city officials to select a developer. The authority will make the final decision. The district the agencies are trying to create what would house the first public market in Boston since the 1950s and would resemble public food markets operating in most major cities across the United States.

Parcel 9, a triangular plot used for storage by the Haymarket vendors, attracted four proposals after the Turnpike Authority began soliciting bids in February. City officials did not make a clear recommendation in yesterday’s letter, but indicated the museum proposal is consistent with their economic development goals, and that the apartment building complies with planning documents that call for housing on the property.

“We want a viable project that can happen quickly,’’ said Peter Gori, a senior manager at the BRA. “Realistically, we think we could see this come together within the next couple of years.’’

The BRA’s letter did express concern about both Eastat’s apartment plan and the museum proposal. It stated the museum’s executives face a long struggle to raise $120 million to build the facility and must address traffic issues.

Frank Keefe, chief executive of the nonprofit organization seeking to build the museum, said both issues can be resolved. “Our project will animate the Greenway, and it’s the best museum site in the country,’’ he said.

The BRA said Eastat’s apartment plan could be problematic, due to noise from the market on the first floor. Chris Tsouros, a lawyer for the developer, said the company is seeking to address that with the building’s design and by putting the garage between the market and the residences. “We recognized that characteristic from the beginning and built it into our plans for the site,’’ he said.

Two other proposals for parcel 9, submitted by the DeNormandie Cos., of Boston, and Gutierrez Co., of Burlington, were reviewed in the BRA’s letter, but were not mentioned in a summary discussing the authority’s preferences.

DeNormandie, which owns buildings facing the site on Blackstone Street, proposed art galleries or offices above a market and a restaurant. Philip DeNormandie said he had not seen the BRA’s letter last night and was not prepared to comment.

Gutierrez proposed building offices above a market, retail store, and restaurant. A managing director of the company, Bill Caulder, said the company considered residences but concluded the parcel is too small to include amenities such as a gym and a business center, making it difficult to compete with surrounding projects, such as the nearby Avenir apartment complex.

Casey Ross can be reached at cross@globe.com.

Boston Globe – Will You Pay for Globe Website?

Boston Money — Fri, 07 Aug 2009 16:30:28 +0000

Globe says readers to pay for Web site

By Christine McConville | Friday, August 7, 2009
http://www.bostonherald.com | Media & Marketing

Photo by boston.com

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

Boston Startups – Local Motors Wareham

Boston Money — Thu, 02 Jul 2009 19:02:10 +0000

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

Posted by Clifford Atiyeh

(Steve Haines/Globe Staff)

Lots of car companies claim to build dream cars. Nearly every luxury and exotic car manufacturer has a department for special orders, and there’s no shortage of tuners that turn these cars inside-out, but aside from Louis Vuitton seats and stainless steel hoods, there’s not much original thought involved. Chinese brand BYD has the lofty phrase “Build Your Dreams” in its name, but its creations are nightmares. Even Tesla Motors can’t climb its way out of a Lotus Elise.

Local Motors of Wareham, Mass., is building bespoke automobiles the old-fashioned way: take a sketch, bring the buyer into the shop at every step, and churn out a car that resembles no other set of wheels on earth. The company’s website even invites designers to compete and submit drawings for potential production.

Globe reporter Emily Sweeney and photographer Steve Haines got a tour of the factory and its handsome Rally Fighter, above, which is an upscale Baja buggy that will cost $50,000 when it enters production this spring. Local Motors also has selected a wild design for a three-passenger electric vehicle, dubbed the “Boston Bullet”.

It’s certainly courageous of CEO John B. Rogers, Jr. – a retired Marine and Harvard Business School grad – to gather millions of dollars and pay 10 employees in these times. Give this man a nice federal loan – he’d deserve it.

Read the full story here
See more photos of LM’s shop in the full entry

All photos by Steve Haines/Globe Staff

A sketch of the final version of the Rally Fighter, center, is surrounded by previous mock-ups.

John Rogers, Jr., CEO of Local Motors Inc, sits in a mock-up of the Rally Fighter on the floor of his garage.

John Rogers, Jr. in the midst of the ribs of the Rally Fighter mock-up.

Colby Whipple uses a hand held 3D scanner to scan a Ford axle that they will use in the Rally Fighter. Once scanned, it will be used in the computer so they can test various performance capabilities.

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.