Monthly Archives: June 2010

How big is Allete?

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Pretty big. And growing.

The Minneapolis/St. Paul Business Journal recently put out its Top 25 Minnesota-based utilities list. The annual ranking is based on total plant investment over the years.

Allete, Inc., based in Duluth, came in No. 3, same as last year. The company had $2.5 billion in total plant investment as of Dec. 31. That’s the cumulative amount over time.

Sounds like a lot. And it is. But it pales in comparison to utility king, Minneapolis-based Xcel Energy Inc., which had total plant investments of $29.1 billion.

To get an idea how big Xcel is, it serves 3.8 million consumers in eight Western and Midwestern states. In comparison, Allete serves 171,000 consumers in Northeastern Minnesota (as Minnesota Power) and Northwestern Wisconsin (as Superior Water, Light & Power).

But Allete is the fastest growing utility, according to this report.

While every utility reported total plant growth in 2009, with the average being 6 percent, Allete led the pack with 17.1 percent growth.

No. 2, by the way, was Great River Energy based in Maple Grove, Minn. Serving southwestern Minnesota, suburban Twin Cities and parts of the Arrowhead region, the utility had 14.8 percent plant growth and nearly $3.3 billion in plant investment.

 

You’ve just won $8.5 million — Not!

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So it’s a day like any other day until you get the call. You’ve just won a new car or millions of dollars! You just need to wire them several hundred dollars or provide your bank account information to cover fees on the winnings.

Of course you shouldn’t. It’s a scam, says the Better Business Bureau.

The bureau in Minnesota and North Dakota are warning consumers about such calls from a company called Global International. The bureau says callers from the company tell people they’ve won $8.5 million and then give them a Better Business Bureau "Code of Approval," needed to claim their prize.

I would imagine the BBB, a crusader against scams, is particularly miffed that they’re using the BBB name. BBB is not affiliated with any lottery or sweepstakes, and it has no "Code of Approval."

"Consumers should be aware that if they ever receive a call from someone claiming to be with or associated with the BBB, telling them they’ve won a prize, it’s a scam 100 percent of the time," Dana Badgerow, BBB’s regional CEO, said in a statement.

The scam has several variations. In one case, a mark — I mean, a consumer –  was told a courier had a check for $1.5 million waiting for them at the Minneapolis-St. Paul International Airport. But first they had to wire $175 to an address in Jamaica. According to BBB, a lot of these scams originate in Jamaica.

So beware:

–of phone calls telling you you’ve won something.

–of being pressured to send money.

–of being asked to wire money or write personal checks to pay fees for winnings.

I’ll spare you their advice that if something sounds too good to be true, it is. Surely, you’ve heard that one before.

Tax breaks for hiring the jobless

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Employers who hire unemployed workers could get some sweet tax breaks.

A law went into effect March 18 providing incentives for hiring "qualified" jobless workers.

Under the HIRE Act (Hiring Incentives to Restore Employment), employers could get a payroll tax exemption, namely from paying their 6.2 percent share of social security taxes on wages paid to the worker. This applies to wages paid from March 19 through the end of the year.

But wait, there’s more.

For each "qualified" employee a business retains at least a year, the business can also get a general business tax credit up to $1,000. The exact amount is computed based on the wages paid to the employee over a 52-week period.

Of course, the catch is who these "qualified" workers are. According to IRS website, they must start on the job in 2010, but not before Feb. 3.  They must have worked for no more than 40 hours in the 60 days prior to being hired. Employers can’t get the tax breaks for replacing another employee unless that employee quit or was fired for just cause. Oh, and the employer can’t get the tax break for family members hired.

To learn more, check out the IRS’s HIRE Webinar on July 8. To register, visit here.

 

Duluth jobless rate hits 18-month low

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If you doubt an economic recovery is underway, consider the local unemployment numbers released this week by the state.

The jobless rate dropped to 6.6 percent in Duluth in May, its lowest point since November 2008. Unemployment had peaked in Duluth at 8.8 percent back in March 2009.

Meanwhile, Minnesota’s (seasonally unadjusted) jobless rate is at 6.5 percent.

St. Louis County did almost as well with a dip to 6.8 percent while Northeastern Minnesota dropped nearly a percentage point to 7.3 percent, down from 10.7 a year ago.

Even more impressive is the Iron Range’s wild ride as mines shut down and then returned to full production in recent months. Hibbing’s rate in May was 7.8 percent, dramatically down from 18.4 percent a year ago. Virginia was at 8.8 percent, well below July’s peak of 17 percent.
 

No tenant yet for Ace Hardware site

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“There’s not one thing left,” said Mark Jeronimus, owner of Ace Hardware in downtown Duluth.

Make that the former Ace Hardware in downtown Duluth.

After a seven-week liquidation sale ended Saturday, the shelves were bare at the store which closed for good Saturday.

“They said it would take seven weeks and two days, they beat it by two days,” said a tired Jeronimus who hadn’t had a day off in for two months.

Even the fixtures were being removed on Monday.

There were several retailers interested in picking up the remainder of the lease as the sale began in late April. But so far nobody has signed, Jeronimus said.

He said representatives of the Ace Hardware have been in a few times, including 10 days ago making detailed measurements for a floor plan. And another interested party was scheduled to visit the store with a broker on Monday.

Jeronimus remains optimistic that another business will move in this year.

“The rent is very reasonable,” he said. “It’s a good quality building, right between major banks.”

Gas prices jump

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Ouch!

It just got more expensive at the the pump. The average price of gas in Minnesota jumped 16.4 cents per gallon in the last week.

16.4 cents….in one week!

In Minnesota, the average price is $2.75 per gallon for regular, according to MinnesotaGasPrices.com. In other words, Minnesota has caught up with the national average which is currently $2.74 per gallon. Just a month ago, Minnesota’s price averaged 13 cents less a gallon than the national average.

Both state and national prices are up 17 cents from a month ago.

In Duluth, prices on Monday also were hovering around $2.75 per gallon. But you can find some stations charging $2.67 per gallon, including the M&H at 1230 W. Michigan St. and the Holiday and Spur stations at 27th Avenue West near Michigan Street that are always battling it out.

You can find some of the highest prices right now in Grand Marais where some stations are charging $2.87 per gallon.

Wired, vacations offer us little escape

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The great thing about cell phones, smartphones and laptops is you can always be reached.

The bad thing about cell phones, smartphones and laptops is… you guessed it… you can always be reached.

That makes truly getting away from work and everyday stresses all the more difficult. Only half of working Americans come back from vacations feeling rested and rejuvenated, according to a story this week in the Wall Street Journal. That’s even as 56 percent say they need a vacation more than ever.

Granted, some of us know how to tune out and relax. But in general working folks are having a harder and harder time detaching and getting away from it all, not just physically, but mentally. It doesn’t help that 49 percent of employers expect workers to check in with the office while they’re away, the Journal reports.

The story quotes Edward T. Creagan, a medical oncologist who writes the Mayo Clinic’s stress blog: "It’s been my experience that an ‘out of office’ respnse means nothing anymore. We’re driving ourselves wacko with no time to power down."

While some people thrive being forever plugged in, the article suggests some are addicted to the adrenaline rush from stress. They gravitate to it. They create it.

They can’t relax. Put them on a beautiful sandy beach and they can’t last 15 minutes.

But there’s hope.

For those who have trouble relaxing, the Journal says vacations should involve physical activity and mental stimulation. Try something new on vacation. Have a plan but be flexible in case you get bored. Limit expectations of you while you’re gone. Take an extra day before and after your getaway to ease in and out of vacation mode.

Beer biz by new children’s museum would sell

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If Developer Alex Giuliani wants it, he can have it.

As a press conference was underway this afternoon at the site of the future home of the Duluth Children’s Museum along I-35 near 29th Avenue West, Brian Michaud watched on.

Michaud owns Michaud Distributing Company next door. As one-by-one the former industrial hub anchord by Clyde Iron Works is redeveloped, the sprawling distribution center will be left, an awkward presence between the Duluth Sports Heritage Center and the new Duluth Children’s Museum.

The company — which distributes beer and other beverages out of the sprawling building — has been a family business for 73 years, 21 years at its current site on Helm Street.

Michaud supports plans to turn the old Duluth Brewing & Malting building next door into a modern, vibrant new home for the children’s museum. His building was once used for storage by that brewery.

"It’ll be a great opportunity for the kids, especially with everything for youth grouped together," he said of the Duluth Sports Heritage Center, Boys & Girls Club and the future Duluth Children’s Museum.

On top of that, Clyde Park — with its restaurant, pub and events center — has opened behind it and a hotel is planned.

Michaud’s willing to sell, to make way for more positive change.

"I hope someone would purchase our building so we could move out of the building." said MIchaud who would likely relocate his business to West Duluth or Superior.

He said Giuliani has talked to him about selling. It was Giuliani, Clyde Park’s developer, who sold the old brewery building to the children’s museum.

"He would buy us," Michaud said. "The museum is also interested."

He speculated the museum could use it for storage or parking. But, he acknowledged, the museum has its hands full right now, trying to raise $4.8 million to renovate the old brick brewery built in 1915.

 

Beware of toxic wood

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OK, so you buy new kitchen cabinets, furniture or put in new flooring made with composite wood. And you got it on the cheap.

You could be in danger of formaldehyde.

Most composite wood contain adhesives, bonding agents or solvents containing formaldehyde. Contact with too much of it is dangerous. It’s a carcinogen that can cause cancer. The colorless gas also can cause allergic reactions, as well as heart palpitations, memory loss, difficulty breathing and aching joints.

While makers of wood products made in the United States have voluntarily adopted standards to limit formaldehyde levels, cheaper products made overseas and imported still contain high concentrations of the chemical compound. And the imports have been increasing dramatically in recent years, especially from China.

But a bill introduced by U.S. Sen. Amy Klobuchar and Sen. Mike Crapo (R-Idaho), establishing national health standards for formaldehyde in composite wood products, is  making headway.

The legislation — the Formaldehyde Standards for Composite Wood Act — passed the U.S. Senate today. The bill, establishing the toughest standards in the world, would apply to both domestic and foreign imports. If it becomes law, it would go into effect Jan. 1, 2013.

 

Is there an entrepreneur gene?

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There’s supposedly a fearless gene, gene that the biggest thrill-seekers have. The’[re the ones who think nothing of jumping out of airplanes, skiing off cliffs or rafting down treacherous rivers.

I’ve often wondered if there’s a similar gene for entrepreneurs. What makes some people willing and able to take the plunge in business, especially when so many businesses fail? Where does that come from? Is it learned? Is it in the blood?

Today’s business story on Arlene Coco Buscombe of Duluth, a former chef who has started several food-related businesses (her latest is a scone business) didn’t get into that.

But I did ask her about it.

Her love of food and cooking  was inspired by her mother, a skilled cook.

"My mother was a fantastic cook," Buscombe said. "The cookbook I put out was a compilation of her recipes. I grew up in Baton Rouge. We also had gardens. I learned early about harvesting and gardening. My job was to pick it for dinner. Mother would harvest and freeze, and we learned and got to do this."

That explains how she started on a culinary path.  But what about her willingness and adeptness starting business after business?

The answer is also found in her family culture.

Her father had a commercial refrigeration business. Her brother became a boat manufacturer, even inventing a boat that he patented.

"We never had a job, never worked for anyone else, not for long anyway," Buscombe said with a laugh. "My father had a business. We all share a very intense interest in our lines of work."