Monthly Archives: February 2010

Simon sez: Let’s get even bigger

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You’d think they were already big enough.

But Simon Properties Group Inc. – the largest shopping mall owner in the country — wants to get bigger.

It currently has about about 350 malls, including Miller Hill Mall in Duluth.

Now it wants to acquire the No. 2 mall owner, General Growth Properties, Inc., which has more than 200 malls in 44 states.

Simon Properties has offered $10 billion to buy struggling General Growth which is in the middle of Chapter 11 bankruptcy proceedings and trying to restructure its debt.

If the takeover is successful, Simon Properties would have 550 malls, at least one-third of the U.S. market, The Wall Street Journal reports.

And it would have nearly half the country’s 319 most lucrative malls when it comes to sales.

So what’s wrong with that?

Surely, creditors and shareholders would be happy to see some kind of return on their investment.

But, pointed out the Journal, Simon Properties would have a monopoly. And it would give Simon Properties "unmatched power" over retailers and control over the look and atmosphere of the malls.

In other words, every one of their malls could look pretty match the same.

 

More manufacturers expect a better 2010

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Well, this is hopeful news.

Manufacturers in Minnesota are more optimistic about 2010 than they were in 2009, according to a survey of 500 manufacturing companies in the state.

One quarter expect to see economic growth in 2010, compared to 19 percent last year. Forty-four percent expect their firm’s annual gross revenues will increase. Only 23 percent expected higher revenues last year, the research sponsored by Enterprise Minnesota found.

Many said the recession has made them better. It’s prompted them to better focus, change operations and to innovate which has positioned them for future growth.

But a diminishing availability of credit is a looming concern. Thirty-seven percent — three times more than last year — have been experienced tight credit. Nearly 30 percent say it’s had a significant impact on their business.

 

Beer sales at Wilco show were high, but could have been much higher

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Instead of handing out wristbands to note your eligibility to drink beer, the DECC workers should have stamped “chump” on the forehead of each fan who painstakingly waited in line for a cold one before Wilco’s concert last weekend in Duluth.

Besides the sticker shock of $6.75 per large beer, that sucker feeling was inevitable as a long — seemingly immovable — line lead fans to only three servers.

That’s one server for each 733 fans at the show!

Moreover, the wait was not worth a generic domestic!

Before Wilco’s set, this fan stood in line for about two minutes only to move his feet once or twice. Once this sad sap realized his futility, he headed into the venue and overheard a few rumblings from disgruntled and obviously thirsty fans.

“That line is ridiculous!” one guy said to his gal.

“What are they thinking? I guess the DECC doesn’t want to make money!” another dude said.

But the DECC did make money. (During the middle of Wilco’s set, this fan relented and ordered two cold ones, and waited in a much shorter line.)

Dan Russell, executive director of the DECC, said the amount of beer sold — $15,000 worth — was more than double any other auditorium show in his 20 years.

“I saw how hard they were working, but we didn’t anticipate it,” Russell said. “It was a Friday night, and Wilco fans seem thirsty. … We just got slammed.”

Another complication was the beer line blocked the entrance to the auditorium. The set up left a 20-yard-long beer line and a less than 5-foot sliver for fans to navigate from the lobby to the concert.

“It was more people in the beer line than we expected,” Russell said. “There was really no other place that we could put that with the sports show going on.”

The DECC made some money on beer, but what could the return have been if people could have easy access to a brewed beverage?

Get those $30,000-mile checks, expert says

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In "Are car warranties really free?"  an earlier blog post here, we wondered whether those 30,000-mile and 60,000-mile vehicle maintenance checks are, well, a ripoff.

At $500, they don’t come cheap.

One car owner sees them as paying for her car’s "free" 100,000-mile warranty.

The checkups, which take several hours, are required to keep the warranty up. Moreover, it’s good for the car, dealers say.

Posted comments on that Feb. 2 blog were mostly critical.

But what does an impartial consumer expert say?

Money whiz Clark Howard says those 15,000-, 30,000- and 60,000-mile checks are a smart thing to do.

"It may seem like a lot of money," he said on his latest show on the Headline News network. "But it makes your car run a lot longer. Compare that with what a monthly car payment is."

While oil changes can be done at any lube shop or service station, have your dealer do the maintenance checks at an independent shop that specializes in your brand of vehicle, he says. 

Big plans for Bayfront area to be discussed

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Some say the LaFarge cement terminal site west of Bayfront Park in Duluth is the most valuable undeveloped piece of waterfront on the entire Great Lakes.

That’s a pretty big statement that some might debate. But most can at least agree that it is, indeed, prime waterfront property.

Plans to transform the LaFarge property downtown into a bustling new waterfront development, will be the subject of a breakfast program March 9 at the Radisson Hotel in Duluth.

Sandy Hoff, who is part of an investment team that recently purchased the LaFarge property for $1.3 million, will speak, along with Brian Hanson, director of business and community development for the city of Duluth.

Hoff’s investment team which includes developer Alessandro Giuliani, has big plans to convert the waterfront property into lodging, retail, restaurant and entertainment venues. They plan to reuse the silo-type cement terminal on the property in some fashion, perhaps as a roof-top restaurant. Adding to the site’s potential is the possibility that the Minnesota Department of Natural Resources will create a marina next door for recreational boats.

To do all this, the area must first be rezoned from waterfront industrial to commercial waterfront. And they’ll likely talk about that, too.

The Downtown Perk Breakfast Program, sponsored by the Greater Downtown Council, will be 7:30 a.m. to 8:30 a.m. at the hotel. Cost is $15 for members, $20 for non-members. Contact kjohnson@downtownduluth.com. 
 

The media has NOT left the building

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Sitting in the St. Louis County Board meeting Tuesday in Hibbing, I couldn’t believe my luck.

After a WDIO-TV reporter and cameraman left, Commissioner Keith Nelson, who was chairing the finance and budget committee meeting, perked up.

Discussion about selling the old jail in Duluth was underway, and Nelson said he had been waiting for the press to leave to speak his mind. Filling in for another reporter, I had gone unnoticed.

Nelson became candid, his tone confidential.

Folks, we’re facing millions in cuts and we’re still dealing with this jail, said Nelson who lives in Virginia.

"The county’s plans to raze the old jail — long considered by county officials as a white elephant — had been successfully blocked by preservationists  and the city of Duluth because the jail is part of a historic district designated a local landmark.

"Small groups tend to make a great deal of noise," Nelson said, apparently referring to preservationists. "It becomes news."

The city, which denied the county a demolition permit, told the county to first try harder to find a buyer.

"I’m not criticizing your city," Nelson said of Duluth, but went on to say the city had cost the county money.

"Since our first discussions of demolition, we have incurred in excess of $120,000, no $200,000 as a result of rules imposed on us," Nelson said.

The county can’t continue to spend money on the old jail, he said.

"We are 51 days from agreement," he said, encouraging the board to approve the sale. "We’re at a juncture. We have to look at this positively."

Of the sale agreement, he said bluntly:  "It’s not a great deal."

The sale, which goes to a likely board vote next week, would cost the county nearly as much as the $54,000 selling price, but demolition was estimated to now cost $300,000.

When he finished talking, I thought: "That’s not so bad." Surely, the media could have heard that.

 

Got credit cards? You should know this

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The long-awaited credit card reform law that went into effect Monday is supposed to protect credit card users and curb interest rate hikes.

But, unfortunately, the results aren’t all good. On his latest program airing on cable’s HLN network, money expert Clark Howard pointed out the good and bad with the new rules:

Super Good news: Credit card companies can no longer raise interest rates on an existing balance. They can no longer entice you with a low interest rate, then raise it once you’re a card holder and have built up a balance.

Bad news: They can, however, raise rates on future purchases.

Good news: Instead of a 15-day notice on rate changes, they must give you 45-days notice.

Good news: In the past, some companies were guilty of two-cycle billing, raising rates well above what was stated in the credit card agreement. They can’t do that anymore.

Major warning: Watch out for new fees credit card companies may impose to recoup lost revenues from the changes. Look for annual fees, inactivity fees and processing fees. Be alert for the notices credit card companies must send out to tell you about new fees. Interest rates on many new accounts also are higher.

Tip: Clark recommends using your card at least twice a year to avoid fees on inactive accounts. 

Ice jam in lower Great Lakes could delay shipping season

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The Detriot Free Press is reporting a ice-clogged St. Clair River that could delay the start of the Great Lakes shipping season:

By AMBER HUNT
FREE PRESS STAFF WRITER

Slow-moving chunks of ice in the St. Clair River have created dire consequences along miles of the waterway in recent weeks, tearing apart docks, threatening Great Lakes shipping and leaving some wondering whether the start to boating season will be delayed.

“It’s literally like a plug in a bath tub,” U.S. Congresswoman Candice Miller said Sunday as she announced plans for U.S. and Canadian coast guard cutters to begin chomping through the ice today from both directions.

The plug, which begins near Marysville in St. Clair County and continues about nine miles south, is causing unusually high water levels to the north and dangerously low levels south of Harsens Island, Miller said.

It’s the worst ice jam since 1984, where record jams reduced normal river flow by as much as 65%, according to the U.S. Army Corps of Engineers. Last year, a report by the International Joint Commission, made up of U.S. and Canadian representatives, blamed 1984’s ice jam with causing long-lasting water drops that cost millions in dredging to ensure passage for cargo ships.

That ice jam lasted 24 days and clogged about 20 miles of river, according to the Army Corps. This jam is shorter and could be briefer, but Miller said the potential environmental impact is unclear.

Minnesota Power plans to explain itself

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Say, Minnesota Power, what’s with all the rate hikes?

Answers to that question and more will come at a Duluth Area Chamber of Commerce FORVM next week. The Duluth-based utility will give their view on why rates or increasing, where you can expect them to stabilize and how your business can conserve energy.

Minnesota Power’s Pat Mullen and Margaret Hodnik will be the guests at 8 a.m. March 2 at the Playground Theatre in the Tech Village in downtown Duluth.

I wonder if Minnesota Secretary of State Lori Swanson, or others that oppose the rate hikes, will offer retorts?

According the Duluth Area Chamber of Commerce, "Minnesota Power has had some of the lowest cost power rates in the country. Recently, however, the company has raised its rates and is seeking another increase. Some have criticized Minnesota Power saying the rates are not justified. Others simply wonder why rates are increasing."

Allete, the parent to Minnesota Power, saw net income drop $21 million from 2008 to 2009, but it still posted a $61 million net income last year, according to its annual earnings report.

“The financial picture for Allete in 2009 was negatively impacted by the economic downturn and by regulatory outcomes that were less than favorable to us,” Don Shippar, Allete’s chairman and CEO, said in a news release about 10 days ago.

In an April 2009 rate case before the Minnesota Public Utilities Commission, Minnesota Power got half of what it requested, said a spokeswoman, and in December, it got two-thirds of its request.

The December judgement meant residential customers will see their electricity bills increase an average of $7 a month this year.

Clyde Park complex opens March 29

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Now, don’t all rush down there at once.

But the long-anticipated opening of the restaurant, brewpub, coffee shop and bakery at Clyde Park in Lincoln Park/West Duluth will be March 29.

Developer Alessandro Giuliani wants to have a "soft" opening so they can work out the kinks. The official grand opening will be sometime later.

The opening had been delayed more than two months, in part, to make sure the wood-burning ovens from France were in place and working properly. The restaurant will feature food cooked with those wood-burning ovens.The brewpub will served craft beer made on site as well as traditional brews. 

Management has been hired. Chefs currently are testing food for the menu. A call for applications for wait staff, bartenders and other jobs will be announced soon, along with dates when applications will be accepted.

Guiliani said 54 full-time equivalents will be hired. With some of those positions part time, more people will actually be hired, he said.

The restaurant will serve pizzas and breads, pasta, pasties, hamburgers and more. Prices will be moderate, under $9 or lunches and under $14 for dinners.

Guiliani promises "simiple good food… all made from scratch."

The transformation of the 29,500 square-foot Clyde Iron Works production plant at 14 S. 29th Ave. W. cost $9.1 million. Athletic Republic, a new sports training center, opened in December in the remodeled complex.

The complex also will include an adaptable entertainment venue that can handle up to 1,500 people for concerts, conferences, trade shows and more.

The Duluth-Superior Symphony Orchestra will hold a gala fundraiser at Clyde Park on April 10.

"They will take up the whole place," Giuliani said.