Monthly Archives: October 2009

Baja Billy’s hits likely bottom

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Baja Billy’s Mexican Grill & Cantina has closed its doors at Fitger’s Brewery Complex in Duluth.

A sign posted inside the metal-gated restaurant Friday night said: “Sorry. Closed for maintenance and remodeling.”

Owners Brian Roy and Jamie Wilson could not be reached for comment Friday night.

But Scott Vesterstein, whose family is the majority owner of Fitger’s, said he does not expect the restaurant to reopen. Vesterstein said he was in talks with “three strong prospective tenants.” He anticipates a new restaurant will open in the same location by the spring of 2010.

“I wish Brian and Jamie the best,” said Vesterstein. “Unfortunately, they were not able to rely on the deck business they’ve had in the past this year.” Cool weather apparently cut into the popularity of the restaurant’s outdoors dining area this past summer.

Baja Billy’s opened in 2005. Roy and Wilson Enterprises moved into the former Chi-Chi’s Mexican Restaurante location that year after the former Buena Vista, which they operated, was sold for redevelopment as a condominium complex.

The business partners also operate Tejas, a Texas-themed eatery at 4702 Miller Trunk Highway. That restaurant remains open for business.
 

Allete’s performance improves, remains off 36 percent from 2008

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Allete, the parent company of Minnesota Power, registered a higher third-quarter net income compared to the second quarter, but profits are still substantially lower than 2008 levels.

The Duluth-based corporation reported $16 million in net income last quarter, an increase from $9.3 million in the second quarter, but is 36 percent beneath the $24.7 million earned in the third quarter of 2008.

Allete said total kilowatt-hour sales declined about 10 percent from 2008 levels due to the recession that has impacted all retail electric customers, said a news release on its third-quarter performance. The company said lower retail sales were offset by other power suppliers, but lower electric rates compared to last year resulted in reduced revenue.

“The first eight months of the year have been difficult for our taconite customers,” Don Shippar, Allete chairman and CEO, said in prepared statement. “However, we are encouraged that they have begun to increase their production.”

Cliffs sees revenue fall 67 percent

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Cliffs Natural Resources, owners of United Taconite and Northshore Mining, reported a third-quarter net income drop of 67 percent from $178 million in 2008 to $58 million this year.

The Cleveland-based company had revenues fall 44 percent from about $1.2 billion in 2008 to $666 million this year.

The poor third-quarter performance came the same week U.S. Steel, with two mines on the Iron Range, also posted decreases in net income and production.

Cliffs’ Minnesota operations are United Taconite in Forbes and Eveleth and Northshore Mining in Silver Bay and Babbitt.

U.S. economy grows for first time since spring 2008

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WASHINGTON — The economy grew at a 3.5 percent pace in the third quarter, the best showing in two years, fueled by government-supported spending on cars and homes. It’s the strongest signal yet that the economy has entered a new, though fragile, phase of recovery and that the worst recession since the 1930s has ended.

Going forward, many analysts expect the pace of the budding recovery to be plodding due to rising unemployment and continuing difficulties by both consumers and businesses to secure loans.

“This welcome milestone is just another step, and we still have a long road to travel until the economy is fully recovered,” said Christina Romer, President Barack Obama’s chief economist. “It will take sustained, robust … growth to bring the unemployment rate down substantially. Such a decline in unemployment is, of course, what we are all working to achieve.”

The much-awaited turnaround reported Thursday by the Commerce Department ended the streak of four straight quarters of contracting economic activity, the first time that’s happened on records dating to 1947.

It also marked the first increase since the spring of 2008, when the economy experienced a short-lived uptick in growth.

The third-quarter’s performance — the strongest since right before the country fell into recession in December 2007 — was slightly better than the 3.3 percent growth rate economists expected.

Armed with cash from government support programs, consumers led the rebound in the third quarter, snapping up cars and homes.

Consumer spending on big-ticket manufactured goods soared at an annualized rate of 22.3 percent in the third quarter, the most since the end of 2001. The jump largely reflected car purchases spurred by the government’s Cash for Clunkers program that offered a rebate of up to $4,500 to buy new cars and trade in old gas guzzlers.

The housing market also turned a corner in the summer. Spending on housing projects jumped at an annualized pace of 23.4 percent, the largest jump since 1986. It was the first time since the end of 2005 that spending on housing was positive. Purchases of home furnishings and appliances also added to economic growth.

The government’s $8,000 tax credit for first-time home buyers supported the housing rebound. Congress is considering extending the credit, which expires on Nov. 30.

[This report was written by Associated Press reporter Jeannine Aversa.]

Recruitment to Hoyt Lakes

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A dossier of glossy documents tossed on my desk overnight trumpets the new 220-acre Laskin Energy Park near Hoyt Lakes.

A partnership between Minnesota Power, the city of Hoyt Lakes and East Range Joint Powers is looking to recruit businesses to move to the area about 70 miles north of Duluth.

The dossier of pamphlets and books had information about area schools, existing industries and recreational activities. (The shiny photos of the lakefront property on Colby Lake look pretty enticing.)

For more information, go to the Laskin Energy Park website.

A new retail and non-profit center planned for downtown Duluth

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A stroll through Duluth’s new downtown skywalk connection on Tuesday revealed a new long-term venture at 9 W. Superior St.

The Guiding Star Women’s Center plans to open a women’s pregnancy, labor and child care center run by non-profit groups in the summer or fall 2011. In addition, the center could include a coffee shop, a baby boutique and other shops on the ground level of the 16,000-square-feet space over three floors.

The intent would be “that anyone could come in to use in the building,” Leah Jacobson, chair of the Guiding Star Women’s Center board of directors, said of the retail space.

The first two hurdles for the center are getting commitments for up to seven local non-profits to have offices in the center and raising the estimated $2 million in funding to get the center built and begin programming. That capital campaign could take up to a year, with construction estimated at another nine months, Jacobson said.

Once funding is secure, Guiding Star hopes to have a fast construction period based off what Jacobson called “Extreme Makeover: Non-Profit Edition.”

“It’s all for a good cause, so we want to get people on board with that,” Jacobson said. “We hope for an accelerated construction process. When we get the money, we want to go.”

Cirrus hires key Middle East rep

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Cirrus Aircraft already delivers planes to more than 50 countries in the world.

But with Tuesday’s announced addition of Patrick Carroll to the Cirrus team, company officials hope to expand their business in the Middle East and Asia, especially with fleet sales.

Carroll, who has held senior sales and marketing positions with Airbus, BAE Systems, EADS, and other companies as their representative in Asia, was named Tuesday to the post of Cirrus’ divisional director in the Middle East and Asia.

According to  a news release, Carroll brings key experience and market knowledge to the Duluth-based company’s corporate strategy in the Middle East and Asia. He’s also skilled in special use aircraft sales and dealing with governments and institutions.

Carroll has an electronic degree from London South Bank University. He’s an FAA commercial with multiple engine and instrument ratings. He’s a certified flight instructor and holds pilot licenses in Japan, China and the Phillippines.

In accepting the position, Carroll said he was pleased to join the Cirrus team. "The Middle East and Asia are an especially challenging and dynamic market with many countries keen to upgrade their training fleets," he said in the release.

 

U.S. Steel posts $300 million third-quarter loss

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A week after U.S. Steel delayed the reopening of Keewatin Taconite, the Pittsburgh-based corporation posted third-quarter net losses of $303 million.

U.S. Steel, which also has operations at Minntac near Mountain Iron, did slightly better than the second quarter, when it posted a net loss of $392 million.

Net sales increased 32 percent to $2.8 billion, but it didn’t warrant a restart of the taconite plant in Keewatin as several Keetac workers told the News Tribune that the plant would be winterized without a restart date on the horizon.

The 400-person workforce has been idle since December when global demand for metal in everything from cars to refrigerators drastically fell.

U.S. Steel’s losses are a drastic turn from last year’s successes. In third quarter 2008, the company posted a net income of $919 million.

U.S. Steel CEO John Surma told the Associated Press that the company remains cautious about its outlook as order rates have fallen, partly due to seasonal slowdowns at factories.

“Despite these concerns and uncertainties, we believe that the U.S. and global economies are in the early stages of a global recovery,” Surma said to the AP.
 

Is Leno hurting KBJR?

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Could Jay Leno be hurting viewership of KBJR’s 10 p.m. newscast?

Last week, the Los Angeles Times used Baltimore as an anecdote for the Leno effect, a situation where “The Jay Leno Show” is a weaker “lead-in” at 9 p.m. to the late local news.

Leno’s new show averaged about 5.5 million viewers in mid-October, less than half the audience it attracted when it premiered, and more than a third less than the audience NBC drew last season with its schedule of dramas, the L.A. Times said. The network says the declines are in line with expectations and caution patience as viewers discover the new time period for the former late-night king.

The new programming lineup, however, has pushed WBAL in Baltimore back in its tight competition with WJZ, a CBS affiliate. The stations used to be neck-and-neck in the race for viewers, but now the NBC affiliate has been shellacked in the ratings, the L.A. Times said.

Before Leno went on the air at 9 p.m., KBJR, channels 6 and 11 in Duluth, has watched viewers slip in the last year. The Northland’s Newscenter had its late local news drop four rating points from 10 in July 2008 to 6 in July 2009, according to Nielsen Media.

KBJR News Director Barbara Reyelts referred my call to Station Manager Dave Jensch. I’m awaiting a callback.

The drop tightened the race between KQDS-TV, Channel 21, and KBJR as runner-up to market leaders WDIO, Channels 10 and 13. KQDS, a Fox affiliate and the News Tribune’s news partner, had a 5 rating in both July 2009 and July 2008.

WDIO, the ABC affiliate, had a 13 in 2008 and a 10 in 2009.

UPDATE: Jon Ellis of Fox 21 News e-mailed me to say that a ratings book isn’t due in Duluth until November, meaning no concrete news about a possible "Leno effect" until then.

Also, MinnPost has a similar story on KARE-TV, the Twin Cities NBC affiliate, who has routine ratings measures. Reporter David Brauer wrote: Last year, KARE’s 10 p.m. news racked up a 6.7/16, according to Nielsen data. This year? 6.3/15. That accounts for a 6 percent drop.

Voice views on city zoning tomorrow

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Public input on new city zoning regulations is welcome at 6 p.m. Wednesday at the Depot.

The part of the code on the docket concerns how buildings are sited on lots, how buildings relate to street frontages and how factors contribute to a pedestrain-friendly environment, said a city news release.

The six districts are downtown, Canal Park, Central Hillside, West Superior Street in Lincoln Park, London Road from 12th Avenue East to 21st Avenue East, East Superior Street in Lakeside and Lester Park, and Grand Avenue and Central Avenue in West Duluth.

For more information go here.