Thursday, January 29, 2015

POSTED: Monday, December 29, 2014, 2:55 PM
(TOM GRALISH / Staff Photographer)

(Link to Jan. 5 Inquirer column with updates here) Vanguard Group, the $3 trillion-asset, Malvern-based investment giant, has filed what it hopes will be its final reply to the 2013 whistleblower lawsuit filed by David Danon, a former tax lawyer for the company. Danon's complaint said Vanguard has systematically underpaid its federal and state income taxes by more than $1 billion by arranging for its mutual funds to underpay for Vanguard investment services, reducing the group's income and tax liability, in violation of federal tax policy limiting "at cost" pricing for services a company buys from its affiliates.

The company's latest 33-page memo, filed Dec. 22, mentions Danon's accusations in passing -- it notes the Internal Revenue Service and other authorities had the opportunity to adjust Vanguard's taxes if they had seen any problems with its SEC-approved structure or its publicly-disclosed at-cost service payments. But mostly, Vanguard argues that Danon's complaint should be tossed because, the company says, he and his lawyers violated several provisions of New York's attorney ethics rules in bringing the case.

Judge Joan Madden of New York's Supreme (district) Court for Manhattan has so far declined to toss the case just on Vanguard's say-so. She has scheduled a Jan. 22 hearing to review the dismissal motion.

POSTED: Monday, December 29, 2014, 12:05 PM
Roman Catholic High School at 301 North Broad Street opened more than a century ago. In the mid-1980s, benefactor James G. McSherry played a pivotal role in an alumni campaign to keep the school open by recruiting students from anywhere in the five-county archdiocese. (DAVID M WARREN / Staff Photographer)

As part of a significant expansion plan, a group of business people and professionals have helped Roman Catholic High School acquire 1216-32 Wood St. and 321 N. 13th St., a block and a half east of the landmark castle-like boys' school on North Broad St. between Wood and Vine Sts., for $2.065 million. The deal includes a 24,500-sf two-story building previously used as office and warehouse space, and an enclosed parking lot previously used to store U-Haul rental vehicles.

"Roman has purchased the property for expansion of its high school fine arts program, and for additional parking," Michael Barmash, senior vice president at Colliers International, who closed the deal with his colleague Andrew McGhee, told me. There's also plans for classrooms and a new fieldhouse at the existing Broad and Wood campus.

Barmash credited Barry Howard, executive vice president at Philadelphia developer Equus Capital Partners Ltd., and other members of Roman's advisory board, for funding the deal. "Barry led the charge," agreed Dan DiLella, president of Equus and another Roman advisory board member. The Wood St. purchase is part of a larger expansion plan: "We worked out an agreement with the Sunday Breakfast Association to trade a piece of property on their block (farther east) for a piece that completed our block. That allows us to build classrooms on the ground floor (including the site of Roman's current small parking lot) and a fieldhouse on the top floor," Howard said.

POSTED: Monday, December 29, 2014, 9:39 AM

"97 percent of deals attracted a lawsuit last year, so deal-making has become a regulated process," writes Steven Davidoff Solomon in the New York Times here.

Noting that something like 60% of publicly-traded U.S. companies are incorporated under Delaware law -- which means business and shareholder disputes are heard by the state's appointed Court of Chancery and appeals court judges -- Solomon lists a string of recent cases where investment bankers (including Goldman Sachs) were punished with hundreds of millions of dollars in payments for putting their own interests above those of client companies and shareholders.

He writes that Delaware judges aren't splitting hairs over whether a particular offer is, or is not, the best deal; instead, they are pushing for independent directors to be well-advised, so they can make well-informed choices, in hopes these will benefit shareholders. Recent decisions have intimidated investment banks into ending the practice of "staple" financing, or lucrative deal loans linked to a bank's merger advice, Solomon adds.

POSTED: Monday, December 29, 2014, 8:58 AM

Developer Leo Addimando's Alterra Property Group, which owns apartments in Center City and Manayunk, has big changes planned for the 104-unit Versailles apartments at 1530 Locust St., which it acquired and began running last week. Alterra replaces Carlyle Property Management.

"That building is a jewel. It needs a facelift. We are going to be investing in capital improvements, starting sometime in 2015. It will be done slowly," Addimando told me.

That means higher rents, which Philadelphia apartment-dwellers have gotten used to lately. "When you invest in a building, part of the plan is to raise the rents," Addimando said. He plans to keep the units large - for "young families and empty nesters," he said - and promised "nobody will be forced out. We intend to honor the leases."

POSTED: Monday, December 29, 2014, 8:31 AM
RealFood Works founder and serial entrepreneur Lucinda Bromwyn Duncalfe is shown at local restaurant The WIne Thief. ( Charles Fox / Staff Photographer )

My Penn classmate Lucinda Bronwyn Duncalfe, serial boss at Philadelphia tech start-ups (city-backed Real Foods, ClickEquation, Infonautics, Destiny WebSolutions), tells how West Conshohocken-based, FirstRound Capital-backed Monetate helps QVC, Best Buy, Dick's Sporting Goods, Best Western, National Geographic, Aeropostale and other online marketers target consumers -- for example, Famous Footwear uses Monetate "to show boots to those of us who live in the Northeast and other cold states and boat shoes to those who live in the South" -- in this easy interview on Fox News. 

Duncalfe notes that, after years of growth, desktop/laptop retail purchases flatlined this Christmas shopping season. Mobile visits to retail sites continue to rise, but many mobile shoppers are just looking, not buying, she adds.

POSTED: Tuesday, December 23, 2014, 4:03 PM

It may not be so much in Manhattan, but a billion dollars still buys a lot of property around Philadelphia.

That’s how much commercial real estate brokers in the Philadelphia office of national broker Jones Lang LaSalle say they sold here in 2014, their biggest year ever, says executive vice president Doug Rodio. The firm says it’s now the largest adviser to big building sellers in the region.

A string of city and suburban office centers sold in the past month at prices that get this slow-growing region’s dealmakers kind of excited. If this keeps up, they hope, there’s going to be more office construction, at least on the Main Line, where prices and rents are among the highest in the region, along with University City.

POSTED: Tuesday, December 23, 2014, 1:59 PM

“We want a cool office,” says Gabriel Weinberg, founder of six-year-old DuckDuckGo, the Google-challenging search site that promises “Real Privacy -- Smarter Search -- Less Clutter.”

The MIT grad’s style sense led DuckDuckGo, which keeps 25 software developers and designers busy powering 200 million monthly user searches, to build its headquarters in the top two floors of a stone-fronted, turret-topped, asymmetrical office building on Paoli Pike, two blocks from the Paoli Amtrak station and a short drive from Weinberg’s home on Valley Forge Mountain.

It also led Weinberg to partner with another local tech firm, Zonoff, a Great Valley-based company that has raised $36 million from venture capitalists since last fall to back Zonoff’s “Internet of things” software, linking home and computing appliances, to build a system at  DuckDuckGo using Zonoff’s smartphone apps, with a dashboard that opens at a fingertouch to give the software firm remote control over locks, cameras, lights, utilities and computer systems and settings.

POSTED: Tuesday, December 23, 2014, 10:27 AM

Lakewood, N.J. and New York-based investor David Lichtenstein's Lightstone Group has agreed to buy two hotels near Philadelphia International Airport from Starwood Hotels and Resorts Worldwide Inc., for a total of more than $22 milllion, according to a person familiar with the deal.

After negotiations that started in March, Lightstone agreed to pay around $15 million for the 136-room Aloft hotel (average daily rate: $110) after calculating that price is below replacement cost and that the Philly market will support higher rents. Lightstone also paid $7.4 million, or $126,000 per key, for the nearby Four Points hotel.

As part of the deal, Lightstone also agreed to buy the 252-room, full-service Sheraton Suites that Starwood owned, and has lined up a buyer who operates similar hotels under terms that would insure the company a six-figure profit on the transaction.

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 JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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