Friday, August 1, 2014
Inquirer Daily News

POSTED: Friday, August 1, 2014, 8:46 AM
Philadelphia Federal Reserve President Charles Plosser. (Brendan McDermid / Reuters File Photo)

Despite his past record as the Federal Reserve's worst economic forecaster, Charles I. Plosser, president of the Federal Reserve Bank of Philadelphia, is trying to serve as the conscience of what he believes to be a wandering, inconstant Federal Reserve Board of Governors: In Plosser's brief dissent to the Fed's July 30 stay-the-course policy statement, the conservative Plosser, who is skeptical the Fed can do much more for the economy than guide interest rates, urges higher rates (to avoid credit and asset-price distortions) now that unemployment is finally falling. Excerpts: 

The economy has improved significantly this year, and inflation and unemployment have moved much closer to the FOMC's longer-term goals. However, neither the pace of the reduction in [Federal Reserve] asset purchases nor its end date has been modified...

Thus, I cast a dissenting vote because I opposed retaining the statement language that reads "…it likely will be appropriate to maintain the current target range for the federal funds rate for a considerable time after the asset purchase program ends." I viewed such language as an inappropriate characterization of the future path of policy and so may limit the Committee's flexibility going forward.

POSTED: Tuesday, July 29, 2014, 6:16 PM

California-based Macerich, which owns dozens of U.S. shopping centers, including the Deptford Mall, will invest $106.8 million to redevelop the Gallery and offer "accessible luxury retailing" in the 1.4 million sq. ft. Center City shopping mall, where Kmart shut its store earlier this year, owner PREIT said Tuesday.

Macerich operates 55 malls, a majority in California and other Western states, along with several in the New York area and other markets. Macerich has experience leasing retail space "in dense, urban envirnoments" -- it has malls in Brooklyn and Queens, N.Y.C. -- PREIT said in a statement. Macerich will acquire a 50 percent interest in the Gallery under terms of the deal. PREIT will invest with Macerich in Gallery improvements on a 50/50 basis. 

While losing Kmart, PREIT's plans for the complex have been buoyed recently by New York store chain Century 21's committment to renovate and open in a long-vacant space in the former Strawbridge & Clothier store that forms part of the Gallery complex.

POSTED: Tuesday, July 29, 2014, 2:01 PM
Participants pass a Timberland brand stand at a trade show on Jan. 15, 2014 in Berlin, Germany. (Carsten Koall / Getty Images)

At 1709 Walnut St. in Center City, bootmaker Timberland "has leased 5,800 sq. ft. for its Philadelphia flagship store, which it plans to have open by the fall," Steve Gartner of Metro Commercial Real Estate Inc. tells me in a note this afternoon. The site was last home to Alfa, the restaurant. Metro's Michael Gorman represented the Rittenhouse Row property owner, James Downey of Cushman & Wakefield assisted Timerland.

Banana Republic has leased all of 1911 Chestnut St. (6,600 sq. ft.) for its "Factory Store" variant. The site is a former State Store and faces renovation. Gartner says he negotiated the deal with owner Pearl Properties.

The Banana Republic store fronts the Gap Factory Outlet and the pending iPix Theater at the ex-Boyd across the street. 

POSTED: Monday, July 28, 2014, 10:23 AM
A screen grab from Preferred Sands CEO Michael O'Neill's biography page on the company's web site,

UPDATE: Preferred Sands CEO Michael O'Neill called to explain how his $500 million yearly-sales company, after S&P slapped it with a sub-junk-bond rating, attracted a $680 million investment from buyout giant KKR (see EARLIER item and links below): O'NEILL: Here's what happened: We started this company with $8 million. I bought Aggregate Mines in Florida, we figured when the sand's out maybe we'll develop it. So I hire a guy from the sand industry to run it, he says, 'Mike, you gotta look at this mine in Nebraska. My friends started it.' But who wants a thousand acres in Nebraska?

Well, we flew to Nebraska. I said, 'We'll be home for dinner, let's get it out of our system.' They were losing their shirts out there. But they had a great company. They had what all the drillers needed... So we said, 'We gotta buy this.' We raised $20 milion, I put up half, raised the rest with friends and family (he didn't say who, but O'Neill is related to or grew up with Wolfingtons, Williamsons, Nicolettis, and made friends as a developer). Yeah, they've all done relly well...

That was January 2008. Within 15 minutes the economy, oil and gas collapsed. Our lender was going out of business. We had to restructure. And we did. We built it to $100 million in 2010. Bigger in 2011. We built a $1 billion company on leverage. We took a dividend recapitalization of  $150 million out of the company in 2012 and started a new resin technology, our Garnet and Pearl technology (raw materials and know-how supplied by Dow), the only clean coating technology in the industry. We're building plants. We're building our sand company.

POSTED: Saturday, July 26, 2014, 10:49 AM

WEDNESDAY 7/30: Vanguard Group says ex-Vanguard tax lawyer David Danon's whistle-blower case alleging the company's low fees are based on "illegal" tax avoidance is both "without merit" and also "far too complex to get an adequate hearing in the news media. I asked veteran tax lawyers Robert Willens, Stanley Kull (Saul Ewing), Lee Sheppard (Tax Notes), David Shakow (18-year Penn Law professor now advising Danon for a possible cut of his whistleblower's fee). Read highlights in my Vanguard article in today's Philadelphia Inquirer here.

FRIDAY 7/25: Vanguard Group has become the largest mutual fund group, with more than $2 trillion in investments and close to one-fifth of the market, thanks to its low costs and fees. But in a New York whistleblower's lawsuit, David Danon, a former tax lawyer at Vanguard (2008-13), says the company has never received proper Securities and Exchange Commission or Internal Revenue Service approval for the way it moves money between Vanguard's management company and its funds, and challenges: the way Vanguard reduces tax liability by charging only "at cost" not full market prices for services between affiliates; and the tax practices of Vanguard's large cash Contingency Reserve. Danon says Vanguard has used its "illegal" tax advantage to cut fees and boost market share. 

Vanguard spokesman John Woerth in a statement says the company denies wrongdoing, affirms the legality of its practices and says it will defend against the suit vigorously. The company is the largest private employer in Chester County, where its Malvern complex houses around 10,000 workers.

POSTED: Friday, July 25, 2014, 12:37 PM

Amos Glick is the founder and chief at Compass Iron Works, in western Chester County. He and his crew of seven forge, hammer, repair and hang iron bars into ornate balconies and banisters, swooping sculpture and lantern casings, and durable fences, at big homes and businesses along the East Coast.

It's an old trade, but Compass also innovates: A 55-gallon clear-topped drum is a salt-water spray chamber testing magnesium alloys for Shore jobs; a compressed-air swing relentlessly tests Glick's own-make hinges to turn easily and wear hard.

Compass serves fancy customers, but the owner and most of his workers are members of a plain-living Amish community, a German-descended Christian group that avoids the electric grid, car-driving and some other worldly distractions. They have reworked small forges to rely on liquid fuel and battery power; their self-reliance and sustainability has raised their profile among green-focused building designers and clients, and Glick has begun presenting his designs and methods to national architects' and builders' groups.  Two "English" workers handle email, computer-aided design and driving chores. 

POSTED: Friday, July 25, 2014, 9:21 AM
Rochester, N.Y.-based Wegmans has several stores in the Philadelphia area, including this one in King of Prussia. (David Maialetti / Staff Photographer)

At 140,000 sq ft -- more than triple the size of the nearby Whole Foods Market -- the new Wegmans starting to rise in the southeast corner of US 202 (Wilmington-West Chester Pike) and US 1 (Baltimore Pike) in Chadds Ford and Concord townships (Glen Mills), Delware County, will draw shoppers from Chester County and north Wilmington as well as Delco's rich western suburbs, commercial real estate broker Marshall J. Soss tells me.

Which does't sound good for the nearby Giant, ShopRite and other chain grocers; though Soss says hopefully this and other retail, office and residential development will create more shoppers for the 202 strip. Already Acme has closed Chester County stores in the area in the face of the family-owned, nonunion Wegman megastore invasion. People who like Wegmans praise the stores' vast inventories and ready-cooked meals.

Soss's KarMar Realty Group brokered the property's purchase by a group of local buyers, Chadds Ford Investors LP, from DOH Family LP (the Hinemans). Wegman's isn't the only tenant; Soss notes the vacant former Sovereign Bank branch on 202 and a small strip center adjoining will be replaced by an access road linking 202 and 1, plus 40,000 sq. ft of new stores by Peter Miller of Carlino Development, before you get to the Wegmans. 

POSTED: Thursday, July 24, 2014, 6:03 PM

A classic University City tale (or any Collegetown USA): Four Penn grads (Class of 2010) are collecting alumni siguatures asking Penn President Amy Gutmann to intervene against proposed land use changes at neighboring Drexel. Some of the Penn gardeners have also founded a Facebook group: "UCHS Garden is Sacred, Parking Lots are not." They say Drexel wants to replace the mini-farm adjoining the former University City High School with "a parking lot."

Drexel, which paid the School DIstrict $15 million for the larger school property, has high-rise ambitions for the site and its whole neighborhood as President John Fry seeks to boost enrollment by one-third and lure corporate employers. The plans, the college says, don't include paving over the gardens. But Drexel also says "it will no longer be safe to have a garden," at least during planned construction. Read from the grads' letter to Gutmann, then Drexel's response; emphases added: 

As Penn alumni involved with the Agatston Urban Nutrition Initiative (AUNI) and the Netter Center for Community Partnerships, we are concerned about Drexel University’s redevelopment plans for University City High School (UCHS). We are dismayed to learn that AUNI’s UCHS garden, an award-winning urban farm located on the UCHS campus, will soon be demolished. This garden symbolizes so much that we love about Penn and the time that we spent in West Philadelphia...

About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at or 215 854 5194.

Joseph N. DiStefano
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