Saturday, August 29, 2015

Archive: October, 2010

POSTED: Friday, October 29, 2010, 1:46 PM

"He did purchase the club for that amount," $3.7 million, confirms Eric Quinn, general manager of the former Pine Hill country club, now Trump National Golf Club - Philadelphia. 

That sale dates to last December; I reported the price for the first time Wednesday, after hearing it from local real estate and golf club sources. The buyers didn't announce and weren't commenting on the price, but after I published the number - a bargain, compared to club assessment values in the inflationary mid-2000s - Quinn says Trump told him to confirm it.

"We have doubled our membership," which "was at 325 since we bought it," Quinn added. "A lot of those members came from Woodcrest," the nearby Cherry Hill club whose members are fighting with their bank, Sun National. Trump "wants us to be the best club in South Jersey," said manager Quinn. Well, sure...

POSTED: Friday, October 29, 2010, 10:27 AM

Last month Five Below Inc., the Center City-based pre-teenager-focused dollar-store chain run by Zany Brainy fancy-toy-store veterans Tom Vellios and David Schlessinger, said it had raised a pile of money from Advent International, Boston, to fund ambitious expansion plans.

At the time, the firms wouldn't say how much. But Five Below told the SEC yesterday that it raised $194 million from an unnamed fund, solving the mystery, reports Robert D. Hunt of FormDs.com. We guess that boosts the value of Five Below shares held by Ira Lubert's LLR and other Five Below backers. See Zainy Brainy's $194 million disclosure here.

POSTED: Friday, October 29, 2010, 4:44 PM

Weston Solutions, the employee-owned West Chester firm with a decades-long record as a contamination cleanup specialist, has started financing and developing its own "brownfields" properties.

Under boss Patrick McCann, the 1,800-worker, $500 million yearly sales firm is buying distressed properties, renovating buildings and seeking to attract its own tenants, in addition to its longtime engineering work for developer-clients.

"We're moving into the transactional arena," alongside the "the request-for-proposals business model," Kathleen A. McGinty told me. Formerly Gov. Rendell's top environmental official, McGinty spent the past two years prospecting for "clean tech" private investment deals, before joining Weston last week to head its new Green Development Division.

McGinty's also on the boards of NRG Corp. (where she helped repel a takeover attempt by Exelon Corp.,) Weston, and Iberdola, the Spanish wind-energy company she helped Rendell lure to Pennsylvania with state incentives.

At a time when banks are reluctant to lend to builders, "we have a very, very solid balance sheet, and we're increasingly putting that balance sheet to work to make projects grow," McGinty says.

POSTED: Friday, October 29, 2010, 3:29 PM

Keith Layman, a teacher at Garnet Valley High School, hasn't had time to sort the annual corporate proxy statements that clog his mailbox each year. "They used to build up in my recycle bin," he told me. "Who reads proxy ballots? You don't have time to do the research."

Layman seeks guidance from "an advocate I trust." He says he's found it at www.moxyvote.com, the West Chester Web site started last year by Rich and Kevin Gates, founder-owners of $1.2 billion asset investment manager TFS Capital LLC, who Layman met when they all attended Conestoga High School in Berwyn in the late 1980s.

Moxy allows shareholders to vote their proxy statements online - and to review recommendations from dozens of advocacy groups. The firm employs seven and plans to hire three more software developers by the end of the year.

"When it started, the choices seemed a little left," Layman told me. "But now they run the gamut" of religious organizations (Catholic, Unitarian), private investment firms ("socially responsible funds," and others run by Wall Street veterans), labor activists, animal-cruelty critics, and the conservative Free Enterprise Project, which seeks "to promote the virtues of capitalism and defend our free enterprise system from unwarranted government and social activist interference that hampers innovation and economic growth."

Layman's brokers at RBC Dain Rauscher gave him "no problem linking" his Moxy votes to his shares. TD Ameritrade, eTrade and many other brokerages are similarly cooperative, Moxy co-founder Jeff Marshall told me.

But Malvern-based Vanguard Group's brokerage won't cooperate, despite an endorsement from retired Vanguard founder John Bogle. "No comment," said Vanguard spokeswoman Linda Wolohan when I asked.

"Such resistance, unsupported by significant objections... is an impediment to the developement of a user-friendly" online corporate voting system, Moxy prinicpal Larry S. Eiben told Securities and Exchange Commission secretary Elizabeth M. Murphy in a letter last week, as the SEC considers online-voting rules.

POSTED: Thursday, October 28, 2010, 2:21 PM

Millview Apartments, a 350-unit complex on the heights above PA 82 on the north end of Coatesville, sold for just $34.5 million, or $99,000 a unit (and $95 a square foot), to Paradise Property Group, a group including Jeff Franz, son-in-law of Toll Bros. boss Robert Toll, the same local developers who last year purchased Oxford Gateway near West Chester.

Builder Carl Chetty, of Kennett Square, at first considered selling the units as condominiums, but rented them instead, and put the project on the market for $42 million in 2007, Marcus & Millichap associate Mark Thomson, who handled the deal with vice president Ridge MacLaren, told me.

Property values plunged that year, and occupancy also fell to a low of 70% in the recession, Thomson said. But the proprtion of occupied units recovered to 93%, before a September fire damaged a 22-unit building at the complex. The fire didn't affect the price because the building was insured, he told me.

"We got a lot of offers," Thomson added. He said the buildings sold at a modest capitalization rate (rent/price) of between 6 and 7 percent.

The units fetched half what Korman group managers paid for units at Cornerstone Terrace in Exton in 2008, before the worst of the real estate collapse, Thomson noted. Exton is wealthier, closer to corporate job centers, and generally pricier than Coatesville.

POSTED: Thursday, October 28, 2010, 9:26 AM

My Inquirer colleague Amy Worden in Harrisburg tells me Gov. Rendell plans to brag today about Pennsylvania's ranking in the yearly Tax Foundation review of state "business tax climate." PA ranks: 26 out of 50, which from the point of view of the anti-tax people puts us in the bottom half. Read the 60-page Tax Foundation report here.

How could Rendell brag about such a mediocre distinction? It's less strange when you check out the map on Page 2. Turns out PA is nearly surrounded by states that rank among the 10 worst for high business and business owner taxes: New York, New Jersey, Ohio, Maryland, and near-worst-10 contender West Virginia.

The exception, as usual, is corporate-friendly Delaware, which, despite its surviving progressive income tax, still ranks in the Top 10 for business-friendly low taxes. Though that hasn't noticeably cut Delaware's unemployment rate this recession, or stopped its factories from closing (Valero, GM, Chrysler) or its banks from laying off workers (BofA), which raises questions about the Tax Foundation's assumptions.

POSTED: Wednesday, October 27, 2010, 11:11 AM

Sun National Bank, Vineland, lent the Woodcrest country club, Cherry Hill, $8 million for a fancy new clubhouse. That was in 2002. The debt is now over $10 million, and Woodcrest hasn't been paying. So Sun boss Sid Brown, who's also a Woodcrest member, has taken Woodcrest to court.

But even if Sun gets the club, what's it worth? The nearby Pine Hill club sold for a reputed $3.7 million last year, and that's not nearly enough to make Sun whole. Current Woodcrest President Irvin Richter, founder of Hill International of Marlton, is trying to keep the club going as the case winds through Superior Court down in Cumberland County NJ. More here.

POSTED: Wednesday, October 27, 2010, 5:15 PM

FXI - Foamex Innovations, the Media-based company that turns petroleum derivatives into some of the soft things that cushion modern life, is looking for companies to buy as it branches into the gutter-guard, direct-mail bedding, and burn-treatment industries, says Chris Pechock, partner at MatlinPatterson, Media-based FXI's majority owner in New York.

"We are active in the mergers-and-acquisitions arena," in an industry full of smaller firms owned by older people eager to retire, said Pechock, a 1987 Wharton School graduate who still "sneaks over to Abner's" for a cheesesteak when his train stops at Amtrak's 30th Street Station. "We're looking constantly to be opportunistic and make good acquisitions" that will boost profits at FXI, which now employs around 2,100 at plants across North America and outposts in Mexico and Asia.

That's down more than half from the company's mid-2000s peak, following two bankruptcies, a wave of plant shutdowns and sales, and the collapse of auto and home sales using Foamex products. The closures included the company's former 150-worker, 30-acre Delaware River complex in Eddystone, which Camden Iron & Metal bought for $13 million as the next home for its car-smashing recycler on its state-assisted move from its current site on the road from Philadelphia International Airport to the Eagles stadium.

FXI's first acquisition since its latest reorganization is Monzi Inc., a North Jersey firm that markets gutter guards. FXI chief executive Jack Johnson says Monzi "doubled sales" of FXI's Rain Filter-brand gutter guards (designed to drain water, but leave debris on top) through deals with Costco and other chains. "We're also talking to Lowe's," Johnson told me.

Pechock has its eye on bigger buys. "For a specialty company like a medical-mattress maker, we could spend $80 million," he said. "For a competitor with half a billion dolars in revenue, we could spend maybe $200 million."

About this blog

PhillyDeals posts drafts, transcripts and updates of Joseph N. DiStefano's columns and stories about Philly-area business, which he's been writing since 1989.

DiStefano studied economics, history and a little engineering at Penn and taught writing at St. Joseph's. He has written thousands of columns and articles for the Inquirer, Bloomberg and other media, wrote the book Comcasted, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, distefano251@gmail.com, 215.854.5194 or 302.652.2004.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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