Strictly Business

   Two different kinds of uncertainty -- economic and political -- influence decisions made by millions of consumers and one company that had been seeking a multi-million dollar casino bid.

- Consumer mood isn’t conducive to recovery - AP/Buffalo News
   Consumer confidence has fallen dramatically this month, adding to the evidence that the nation is in no mood to spend its way back to growth and raising fears of a double-dip recession. ...
   “We need the consumer to spend, and right now declining confidence is not the prescription for a stronger economy,” said Joel L. Naroff, president of Naroff Economic Advisors. “This was a bad report, no matter how you slice it.”
   Related:
- Obama trying to restore confidence in economy - AP/Buffalo News 
- Stocks in narrow range after weak jobs report - AP/Buffalo News
- House fails to extend jobless aid - AP/Buffalo News
- Consumer Confidence Grows in Euro Zone, Ebbs in U.K. - Wall Street Journal 
- Governments Moving to Cut Spending, in Echo of 1930s - David Leonhardt/The New York Times
   The world’s rich countries are now conducting a dangerous experiment. They are repeating an economic policy out of the 1930s — starting to cut spending and raise taxes before a recovery is assured — and hoping today’s situation is different enough to assure a different outcome.
   In effect, policy makers are betting that the private sector can make up for the withdrawal of stimulus over the next couple of years. If they’re right, they will have made a head start on closing their enormous budget deficits. If they’re wrong, they may set off a vicious new cycle, in which public spending cuts weaken the world economy and beget new private spending cuts.

   Speaking of bets:
- Local firm drops bid for casino at Aqueduct - Tom Precious/The Buffalo News

Continue reading "Gloom: Consumers hesitate. Delaware North scratches." »

Chrysler plans to make the last PT Cruiser on July 9. The vehicle was hard to come by when it debuted in 2000, such was the consumer frenzy that was surrounded it. Devotees still have a Web site:

http://www.ptcruizer.com/

And who can forget the local connection to the Cruiser craze via an expensive crash test?

The National Traffic Highway Safety Administration struggled to get its hands on a new Cruiser, and ended up paying Delia Car Co. in East Aurora $10,000 above sticker price for one of them. Ten years ago this month, federal officials slammed the vehicle into a wall in a Cheektowaga facility, to see how well it would perform in a head-on crash.

The vehicle earned mixed results from the crash test, but it went on to win North American Car of the Year honors a few months later.

-- Matt Glynn

   In Business Today, we find that people are still a little slow reaching for the wallet. So maybe they don't want to buy an IHOP or a Holiday Inn.

- Consumers hold back on adding spending - Christopher S. Rugaber/AP/Buffalo News
   A tepid gain in consumer spending last month could fuel a debate over whether the United States and other governments should add more stimulus to their economies to sustain the recovery.
   A report that Americans spent cautiously last month followed the meeting in Toronto over the weekend at which world leaders pledged to reduce government deficits by cutting spending and raising taxes — despite warnings from President Obama that scaling back spending too fast could derail the global recovery.
About those warnings:
- The Third Depression - Paul Krugman/The New York Times
   We are now, I fear, in the early stages of a third depression. It will probably look more like the Long Depression than the much more severe Great Depression. But the cost — to the world economy and, above all, to the millions of lives blighted by the absence of jobs — will nonetheless be immense.
   And this third depression will be primarily a failure of policy. Around the world — most recently at last weekend’s deeply discouraging G-20 meeting — governments are obsessing about inflation when the real threat is deflation, preaching the need for belt-tightening when the real problem is inadequate spending.
- Paul Krugman and the road to serfdom - Addison Wiggin/Forbes

-   Closer to home:

Continue reading "Who will buy?" »

   A couple of dots in the Sunday Buffalo News that need connecting.
   People collecting taxpayer-supported public-sector pensions in New York are making out very well, even in these recessionary times, while many of those depending on private-sector pensions are looking at disaster:

- Page One: State pensions are inflated as workers boost salaries - Susan Schulman/The Buffalo News
   Cashing in unused sick time and vacation days at the end of his career pumped up former Niagara Falls School Superintendent Carmen A. Granto Jr.'s annual pension beyond what he had made in his annual paycheck.
   Granto is getting a $147,109 annual state pension in retirement. He was making $129,000 a year when he retired in 2009. How'd he do it? The same way others before him did.
   Granto cashed in 45 unused vacation days and 747 accumulated sick days during the final years of his career, boosting his salary to over $200,000 in the two years he worked before retiring.
   Under the terms of his contract, as well as state regulations for retirees hired before 1971, the inflated salary was used to calculate a five-year average salary that was the basis of Granto's pension. Granto therefore received a pension based on a $182,000 salary.
   As a result, the former school superintendent has the third highest state pension in Western New York, according to a Buffalo News analysis of 2009 state pension data recently released by the Empire Center for New York State Policy on its SeeThroughNY Web site.
   Related: WNYers in state's $100,000-plus pension club
   Elseweb:
- Pension petition deadline looms - San Francisco Chronicle
- French govt to stick to main pension reforms  - Reuters
- Romania pension cut ruled illegal - BBC   

Continue reading "Pensions, public and private" »

   From Business Today:

- Start-ups seek help of ‘angel’ investors - Matt Glynn/The Buffalo News
   ... The Buffalo Niagara region is trying to stimulate more angel investing activity by connecting the area’s pool of budding entrepreneurs with funding sources. A forum held Thursday was designed, in part, to expose angel investors to high-tech ventures that might be worth their dollars.
   “It’s people self-identifying that they want to be part of the investment community,” said Marnie LaVigne, director of business development at the New York State Center of Excellence in Bioinformatics and Life Sciences, affiliated with the University at Buffalo.
   About 300 people attended the Explore Buffalo Niagara Investor and Entrepreneur High-Tech Forum in the Albright-Knox Art Gallery. Selected start-up ventures made pitches to investors. Investors who came away intrigued were invited to schedule follow- up meetings with the entrepreneurs.

- Buyer sought for BlueCross complex - Matt Glynn/The Buffalo News
   The owner of BlueCross BlueShield of Western New York’s corporate headquarters in downtown Buffalo is putting the complex up for sale.
   The move by Indianapolis-based developer Duke Realty Corp. will not affect BlueCross BlueShield’s operations or the 1,300 employees who work in the complex, said Karen Merkel-Liberatore, director of public relations for the health insurer. ...
   The complex also houses CB Richard Ellis’ Buffalo office, which manages the property. That relationship will continue, said Jeffrey LiPuma, managing partner of the firm.
   LiPuma said he sees Duke’s decision to put the property on the market as a positive sign, reflecting Duke’s confidence in the commercial real estate market. “You’ve got national, large-scale investors that will be looking at Buffalo,” he said.
    Related:
- Mortgage rates continue to fall, are at lowest point since mid-’50s - AP/Buffalo News
   Mortgages are cheaper today than they’ve been in a half-century. If only most people had the job security, the credit rating and the cash to qualify for one or refinance.

   Angels? Architecture? Sounds like a job for Rhymin' Simon:

 

-- George Pyle/The Buffalo News

   Local Business Today:

- Growth in local life sciences boosted by familiar voices - Matt Glynn/The Buffalo News
   As the local life sciences industry attempts to grow, having a booster such as Terry McGuire [right] in its corner is a plus.
   He is co-founder and managing general partner of Polaris Venture Partners. The $3 billion venture capital fund with offices in Boston and Seattle helps develop life sciences and information technology companies.
   McGuire is a Lancaster High School alumnus who several years ago started the BioNetwork, a group featuring former Western New Yorkers interested in revving up the region’s life sciences industry. ...
   McGuire and his fellow BioNetwork members gathered in Buffalo this week for the fifth BioNetwork Summit. The group has grown over time, with early support coming from Bruce A. Holm, executive director of the University at Buffalo’s Center of Excellence in Bioinformatics. The Bio-Network has also attracted locally based businesspeople interested in bolstering life sciences.
   See video below.

- Cuomo reveals warning letters to 181 ‘mortgage rescue’ companies - Dino Grandoni/The Buffalo News
   State Attorney General Andrew M. Cuomo announced Wednesday that his office has sent cease-and-desist letters telling 181 “mortgage rescue” companies to stop misleading customers and end any illegal activity.
   The Attorney General’s Office said that many of the companies are defrauding consumers by making unreasonable promises but providing no services. ...
   Cuomo, a Democrat running for governor, took his message on an upstate tour Wednesday, speaking at 10:30 a.m. in Buffalo and in the afternoon in Rochester and Syracuse.
   He urged consumers to avoid companies that ask for upfront fees, offer to make payments on the homeowners’ behalf or advise homeowners to stop making payments. Other warning signs include promises made in exchange for a home’s deed and company names that suggest a government affiliation. ...
   “If you think you have been scammed,” Cuomo said, “contact our office.”
   He directed New Yorkers to www.nyprotectyourhome.com , a Web site set up by his office. He also warned residents that they need to look after their own interests.
   “There is never a substitution for people informing themselves.”
   Related:
- Peddling Relief, Firms Put Debtors in Deeper Hole - The New York Times
- 75% of modified home loans will redefault - CNN
- Loan Mod Program Still Sputtering - ProPublica   

- Strip clubs lose liquor licenses in raids’ wake - Dan Herbeck/The Buffalo News
   The State Liquor Authority on Wednesday revoked the liquor license of Rick’s Tally Ho strip club in Cheektowaga and canceled the license of another strip club, 24KT Gold in Hamburg.
   Both establishments were raided by police and federal agents March 2 after an investigation into drug trafficking and prostitution allegations involving dancers and patrons at the clubs.

   Now, here's how Terry McGuire does it:

   What's that? This one is Jerry McGuire.
   Sorry.

-- George Pyle/The Buffalo News

   What a difference a day makes. Or maybe not.
   On Tuesday, we were quoting a happy Rocco Termini [right] about how his plans to revitalize downtown Buffalo's Hotel Lafayette into a one-stop shop for weddings -- among other things -- would be under construction in a couple of months, thanks to a change in state law that would allow him to take advantage of state historic preservation tax credits.
   On Wednesday, well ...
- Tax credit passed by lawmakers may be cut - Phil Fairbanks/The Buffalo News
   What New York State giveth, New York State can taketh away, sometimes just a week later.
   Gov. David A. Paterson is reportedly considering a budget reform that would delay for six years the same historic preservation tax credit improvements state lawmakers approved last week.
   “I can’t believe the governor would try to do this,” said Rocco Termini, developer of the downtown Hotel Lafayette and several other tax credit projects. “This would put them on hold again.”
   Preservationists say their concern is that Paterson will include the tax credit changes in an emergency spending bill that would likely pass the State Legislature.
   “I think they’re very serious,” said Daniel Mackay, director of public policy for the Preservation League of New York State. “I also think it sends an extraordinarily bad signal.” ...
    “Unfortunately, the proposal would include the rehabilitation tax credit,” said Assemblyman Sam Hoyt, D-Buffalo. “I’m working diligently to get that removed.” 

   Life is very short, and there's no time for fussing and fighting, my friends:

-- George Pyle/The Buffalo News

   If all you count is drawing boards, business is really booming in Buffalo:

- Project on Freezer Queen site reported as trying to lure HSBC, Phillips Lytle - Phil Fairbanks/The Buffalo News
   Buffalo's undeveloped outer harbor could become the home of a $300 million office, retail and hotel project if the owners succeed in landing a major corporate tenant.
   Queen City Landing declined to coment on who those tenants might be, but sources familiar with the project said they include HSBC Bank and the law firm Phillips Lytle.
   "I'm talking to three significant tenants that would create a unique community down there," said Gerald A. Buchheit of Queen City Landing. "It would be a modern, upbeat project that would put Buffalo on the map."
   The development is targeted for the former Freezer Queen manufacturing plant, a 20-acre site on Fuhrmann Boulevard near Ohio Street.

- Termini wants Hotel Lafayette to be 'one-stop' wedding site - Jonathan D. Epstein/The Buffalo News
   The Hotel Lafayette in downtown Buffalo will become a "one-stop" wedding destination with a banquet facility, bakery, flower shop and hotel rooms, under plans outlined Monday by developer Rocco Termini before the local Empire Zone board.
   Termini, through his Signature Development Buffalo, has previously disclosed general plans to spend $35 million to convert the six-story, 367-room hotel into a mixed-use development, including 115 market-rate apartments, a hotel, a banquet facility and commercial space. But further details have not been available until now.
   The developer's project calls for the landmark hotel's first floor to include a revived Lafayette Tap Room, [business closed; website still there] a flower shop and a bakery, while upper floors will house a boutique hotel.
   The owners of the Pearl Street Brewery will run the Tap Room, under its longtime name, and expand it to 15,000 square feet, with 35 employees.
   Woyshner's Flower Shop in Lackawanna will open a 3,000-square-foot store on the first floor, with seven jobs. The family-owned and operated Woyshner's will still maintain its existing main location at 910 Ridge Road.
   Butterwood Desserts, renowned for its cakes, will move from 1863 Davis Road in West Falls to downtown, where it will do all its baking in the Lafayette kitchen. The bakery will take up 8,000 square feet and employ 35 people.
   Hospitality executive Mark Hamister will operate a 34-room boutique hotel on the second floor, with 20 employees. It will include a banquet facility.

- Galvstar steel mill to open next year - David Robinson/The Buffalo News
   With $18 million in tax-exempt funding well in the works, the top executive of the company that plans to open a steel galvanizing mill in a former East Side auto parts plant said the facility is on track to open early next year.
   With $8 million in tax-exempt funding in hand through a federal stimulus program and another $10 million in the works through the Erie County Industrial Development Agency, Galvstar LLC has arranged the bulk of the financing it needs for the $22.8 million project. The galvanizing mill is expected to employ about 50 people initially.

   Here's a tune for Rocco:

  

-- George Pyle/The Buffalo News

   Do people laugh nervously when they hear someone say, "I'm from the bank and I'm here to help you."?
   Maybe they should.

   You can go with this:
- Five projects to receive stimulus funding - Jay Rey/The Buffalo News
   Five local projects — including a steel processing plant and a boutique hotel — have been chosen to share a $28 million pot of tax-free financing made available through the federal government’s economic stimulus program.
   The five businesses that will receive the so-called “Recovery Zone Bonds” will be announced today.
 - Hiring subsidy cheered - Jane M. Von Bergen/Philadelphia Inquirer/Buffalo News
   At first, busy apartment manager Theresa Trumbetti ignored the leaflet from the career center in Gloucester County, N. J., tossing it into a pile on her desk.
   But when she took a second look, she was stunned.
   The news? Trumbetti could hire some badly needed office help at her 970-unit apartment complex, and federal stimulus money would cover the tab.
   “It’s been that shot in the arm we so desperately needed,” Trumbetti said, sitting at her desk at the Autumn Ridge complex in Blackwood. She hired two young women.

   Or you can go with that:
-  Lenders collecting foreclosure deficiencies - Dina ElBoghdady/Washington Post/Buffalo News
   After the bank foreclosed on Fernando Palacios’s home in March, he thought he was done with what he described as the most stressful financial situation of his life.
   The bank sold the home for far less than Palacios owed on it, as often happens with foreclosures. What Palacios did not see coming was the letter from his lender demanding that he pay the shortfall: $148,064.02. “I really thought I was through with this house,” said Palacios, who fell behind on payments when the economy soured and his cleaning business stumbled.
    Lots of related stuff from ProPublica.
-  Banks are changing overdraft policies - Ylan Q. Mui/Washington Post/Buffalo News
   ... Banks have long walked a thin line on overdrafts. They are a sore point for many consumers, but the fees generate billions of dollars of revenue each year. Now the Federal Reserve has stepped in to craft new regulations... 

   This is now so annoying I'm starting to like it:

-- George Pyle/The Buffalo News

   More news from Fin-land:

- Tax fix expected to boost projects - Phil Fairbanks/The Buffalo News
   The rehabilitation of the Hotel Lafayette is expected to move forward now that lawmakers have approved changes in the state’s historic preservation tax credit program.
   The changes, sponsored by Gov. David A. Paterson and pushed by Assemblyman Sam Hoyt, a Buffalo Democrat, are designed to correct what developers considered deficiencies in the tax credit law.
   “We’re planning to start the Lafayette 60 days from the point the governor signs the bill,” developer Rocco Termini said Thursday.

- Owner of Erie Coke plant pays environmental fines - Mark Sommer/The Buffalo News
   The Buffalo owner of an Erie, Pa., coke plant paid a $6 million fine Thursday for environmental violations there and agreed to comply with environmental laws and regulations, raising hopes a similar pact can be reached for the owner's Tonawanda Coke plant.
   The agreement legally binds Erie Coke [right] and owner J.D. Crane to resolve past air-quality violations, according to the Pennsylvania Department of Environmental Protection. The settlement's timetable of improvements includes rebuilding 27 of 58 coke ovens within three years that Pennsylvania investigators found to be cracked and emitting pollutants.
   Locally, the state Department of Environmental Conservation on Thursday cited Tonawanda Coke for a series of air-quality violations punishable by a civil penalty up to $15,000, along with an additional penalty up to $15,000 for each day a violation continues.
   More below.

- Boston man among those accused in crackdown on mortgage fraud - Dan Herbeck/The Buffalo News
   The bargain offered by Town of Boston businessman Robert E. Baschmann Jr. sounded a bit too good to be true, and federal prosecutors say it was.
   His company in 2007 started offering 30-year mortgages with a fixed interest rate of 4 percent. In order to get one, all you had to do was make an upfront payment just 1 percent of the total value of the loan.
   The problem was, according to federal prosecutors and the FBI, Baschmann kept the upfront payments and — except in just one case — never provided the money for the loans. Authorities say about 140 people were cheated out of $900,000.
   U.S. Attorney William J. Hochul Jr. announced Thursday prosecution of Baschmann as part of a new attack on mortgage fraud by prosecutors throughout the U.S. Justice Department.

   So, does this mean things are going better with coke?

-- George Pyle/The Buffalo News