It’s not enough, Wall Street says:
Despite Gov. Corbett’s cuts to colleges and poor people, Moody’s Investors Service has slapped a “Negative Outlook” warning on Pennsylvania as the state prepares to borrow $950 million in a general-obligation bond sale. (Moody’s rated the issue Aa1, among the highest investment grades. When rates go down, borrowing costs tend to rise.)
“Revenue shortfalls” from the current fiscal year, which runs through June, threaten to “deplete much of the financial gains made in fiscal 2011,” and the multibillion-dollar long-term shortfalls facing the State Employees’ Retirement System and the Public School Employees’ Retirement System “will materially challenge” the state’s long-term finances, even as school districts boost property taxes and state officials prepare for higher public payments into both pension systems, warned a team of Moody’s analysts headed by BayeLarsen.
Pennsylvania’s aging population and low growth will force legislators to choose between higher taxes and further service cuts for the foreseeable future. And revenues for the current fiscal year, Moody’s notes, “are below the official estimate.”
It’s not quite that scary, demurs state Treasurer Rob McCord. His office cites stronger-than-expected tax collections in February and March, as retail sales and incomes recovered in the mild winter.
Moody’s notes the rebound — and adds that more of the same, in the spring and into the next fiscal year, would encourage credit-watchers to sweeten their view of Pennsylvania’s payback prospects.
Pennsylvania taxpayers are subsidizing Ocean Spray Cranberries Inc.’s move from its Bordentown, Burlington County, factory to a new plant in Upper Macungie Township, Lehigh County, where the Massachusetts-based company can bottle the same 32 million cases a year in half the space — and with one-third fewer workers.
Ocean Spray boss Randy Papadellis, chairman Fran Podvin, and a couple of members of Gov. Corbett’s cabinet plan to be there to celebrate the move at New Jersey’s expense. Bordentown manager Tim Haggerty and some of his managers will switch to the new plant after Rhode Island-based Gilbane Inc., the architect and contractor, finishes the job next year.
Ocean Spray says it will invest $110 million in the new plant, greased by $4.52 million in state grants for infrastructure improvements and job training, plus cheap financing through the taxpayer-backed Pennsylvania Industrial Development Authority.
Back to normal?
Developer J.S. Hovnanian & Sons has sold its 13-acre Town Square Shopping Center in Mount Laurel, anchored by a ShopRite with more than 10 years on its lease, for $19 million, or $215 a square foot, says broker Marcus & Millichap’sNational Retail Group. Senior director Brad Nathanson represented the seller.
Nathanson says the price “matched pre-2007 levels, the like of which hasn’t been seen in the Philadelphia marketplace” since then. “There has been no new supply, and active developers in this region have gone on to student housing and multifamily” instead of building more stores, Nathanson tells me. That, plus “aggressive financing” with today’s low interest rates, boosted the value.
But Hovnanian cautions against reading too much into the price. He and Nathanson decline, for now, to identify the buyers. What will he do with the money? “Our core business is housing, but we’ve diversified,” to office, warehouse and “urban renewal,” Hovnanian says.
Robert DiStanislao, operator of Porsche of the Main Line and McLarenPhiladelphia and a veteran of the Holman Organization, has opened his third dealership, Maserati of the Main Line, at 215 W. Lancaster Ave., Devon, next to EuroMotorcars’ Mercedes-Benz center.
DiStanislao’s RDS Enterprises replaces Algar, the Rosemont dealership that for the last 10 years sold Maseratis to local buyers right next to Algar’s Ferraris and Alfa-Romeos.
Why now? Maserati is planning new models to compete with Mercedes’ S-Class and BMW’s 5-Class offerings, starting about $100,000, down from the current $120,000 list minimum — as well as smaller cars, even a Maserati sport-utility vehicle — and it’s looking for stand-alone dealers to handle the volume, DiStanislao tells me.
He says his Porsche dealership, started in 2007, survived the 2008-09 recession by concentrating on his top customers “and putting money into customer service instead of publicity.” Maserati hopes he’ll sell up to 200 cars a year.
Home Depot bosses “do not see signs of any real housing recovery,” Janney Capital Markets analyst David Strasser told clients last week, after meeting with Home Depot chief financial officer Carol Tome.
“They simply are not seeing it in their stores. There is stabilization, but not improvement. A clear sign of better housing will be higher lumber and gypsum prices, neither which have happened yet.”
Wells Fargo & Co. has named Philadelphia-based Jack Ginter head of the national network of 14 regional offices managing money for wealthy families with at least $50 million in investment assets or a net worth of $100 million. The business has been renamed Abbot Downing, after the New England company that formerly built Wells Fargo’s stagecoaches.
Ginter tells me the group has 600 national clients, with total assets of $33 billion. He declines to name examples of local clients: “That is private.” A St. Joseph’s University graduate who previously headed US Trust’s Philadelphia office, Ginter heads a staff of 300 and reports to Minneapolis-based Abbot Downing president Jim Steiner.
Contact columnist Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com, or @PhillyJoeD on Twitter.