Business – The Portland Press Herald Tue, 24 Jan 2017 09:00:55 +0000 en-US hourly 1 On the Job: Ebenezer Akakpo creates art that helps others Tue, 24 Jan 2017 09:00:26 +0000 Ebenezer Akakpo, 41, blends his design aesthetic with his Ghanaian heritage to produce art with a purpose.

Akakpo uses his talent to raise money for charitable projects. Sales of the jewelry and other accessories he makes in his South Portland studio support a project in Ghana that uses ultraviolet technology to purify water.

He also holds down a day job as an IT support specialist at the Maine Turnpike Authority.

Akakpo received a bachelor’s of fine arts degree from Maine College of Art in metalsmithing and jewelry, and then a master’s degree from the Rochester Institute of Technology.

On Sunday, his jewelry and metalwork were part of a hair and fashion show in Portland to raise money for Women’s Initiatives that Strengthen and Empower, a nonprofit that supports economic independence for women in Zambia.

What he loves about his art is “the idea of having a thought and being able to make that thought tangible. Having people see it,” he said.

“There is always a challenge and you have to make it work, to use your technique to get the result that you want.”

]]> 0 PORTLAND, ME - JANUARY 23: On the Job with Ebenezer Akakpo on Monday, Jan. 23, 2017. Akakpo uses a file to finish a piece of jewelry made of birch at his studio. (Photo by Derek Davis/Staff Photographer)Mon, 23 Jan 2017 21:23:52 +0000
For India’s many typewriters, ribbon is finally running out Tue, 24 Jan 2017 00:53:16 +0000 NEW DELHI — The end is coming, though admittedly it may not look that way at 10 a.m. on a Tuesday morning, when dozens of young Indians have arrived for morning classes at Anand Type, Shorthand and Keypunch College, and every battered Remington is clattering away.

Looking around the cramped classrooms, you might think that the typewriter still has a future in India. But in one of the last places in the world where it remains a part of everyday life, twilight is at hand.

Even Sunil Chawla will tell you that, and he’s kept Chawla Typewriter going long after the profits disappeared.

“We thought this business would go on forever and ever,” said Chawla, a courtly man whose father founded the family company nearly 60 years ago, but whose own sons chose to avoid the typewriter business. “I’ll keep it alive as long as possible. But after me, I don’t know what’s going to happen. There’s no future in this business.”

For now, only one thing keeps him in the business: “I’m a typewriter man,” he said. “I still have a soft spot for them, and I don’t want to let it go.”

Plus, people do continue to send him typewriters to fix, though most of his work these days is selling supplies for copiers and laminating machines.

India still has a few thousand remaining professional typists. There are a handful of typewriter repairmen and stores selling spare parts. There are typing schools that, at least occasionally, are jammed with students. There are long-outdated government regulations that, for now, help the typewriter cling to life.

But for how long?

“I come here only to pass the time,” Satinder Kumar said on a recent afternoon at Tis Hizari, New Delhi’s main court complex, where 50 or so typists earn a few dollars a day preparing rent agreements, sales contracts and other legal documents.

Kumar worked for 41 years at Tis Hizari, raising two children on his pay.

“It was such a good job. We were working from morning until night,” he said, slouching in front of his manual Remington, a purple beret pulled down over his head to keep out the winter chill. “S.K. Kumar (typist)” it says on a hand-painted sign hanging above what counts as his office, a rusted metal desk in the complex’s yard.

Now, there are just 10-15 pages a day for the hundreds of lawyers scurrying through the maze of buildings and corridors. At 15 rupees a page, or about 20 cents, that barely pays for transportation to work, typewriter ribbons and an occasional tuneup from the complex’s last typewriter repairman. For the typists, things only get busy when all the computers are in use, or there’s an electricity outage.

Technology changes constantly. Jobs die out regularly. Did journalists write about the decline of the video store rental clerk? Did we mourn the end of the LED watch?

But there’s something different about the typewriter, which for more than a century was so important to how the world communicated. It was how presidents issued orders, how Hemingway wrote books, how reporters filed stories. Everything from painfully dull memos to deeply erotic love letters were crafted on typewriters.

In India, the typewriter was never just a piece of office equipment. It was a sign of education, of professional achievement, of women’s growing independence as they slowly entered the workforce. It’s been a Bollywood plot line and a symbol of nationalism (”The all-Indian Typewriter embodies the latest advances,” read a 1950s advertisement for Bombay-based Godrej typewriters.)

Even today it can be a path to success. In a country where government jobs have long been tickets to the middle class, thousands of Indians will sometimes apply for a single clerical position. And while most government offices have shifted to computers for typing tests, some still require a typewriter.

]]> 0 roadside professional typist works near the stock exchange market in New Delhi, India. India still has a few thousand remaining professional typists, but even here, one of the last places in the world where the typewriter remains a part of everyday life, the end is coming.Mon, 23 Jan 2017 19:53:16 +0000
SEC probes Yahoo data breaches Tue, 24 Jan 2017 00:46:01 +0000 WASHINGTON — Federal officials are investigating Yahoo over how promptly the beleaguered Internet company informed the public about its historic data breaches that together affected more than 1 billion consumers, according to a report by the Wall Street Journal.

The probe will seek to determine why Yahoo waited weeks to disclose knowledge last year of a hack that occurred in 2014, an incident that compromised 500 million user accounts. An earlier breach, in 2013, left about 1 billion customers at risk, though it was not until last fall that Yahoo discovered evidence of that attack, as well.

The investigation is being handled by the Securities and Exchange Commission, which in 2011 began requiring companies to disclose information about hacking risks or incidents that may affect investors in a “material” way. And it could become a major test case that lays down clearer expectations about when businesses must reveal that information, analysts told the Journal.

The investigation, which began in December, is in its early stages, the Journal reported, and although it could lead to an enforcement action by the agency, such steps are rare.

An earlier SEC investigation into a 2013 breach at Target did not lead to a punishment of the retailer, even though the incident affected tens of millions of customer accounts. The SEC declined to comment for this article.

Shortly after Yahoo made its discovery of the 2014 hack public, critics called on the SEC for a deeper look at the company’s conduct. In September, Sen. Mark R. Warner, D-Va., said in a letter to the agency that Americans had the right to know “what senior executives at Yahoo knew of the breach, and when they knew it.”

Yahoo declined to comment for this article, pointing to regulatory filings that say the company is cooperating with government officials – including those from the SEC – examining the hack.

But the investigation’s implications stretch far beyond Yahoo’s immediate business. It also raises fresh questions for the telecommunications giant Verizon, which is in the midst of a $4.8 billion deal to acquire the former Web titan.

“I think it’s going to get a lot uglier for Yahoo going forward over the next year,” said Jeff Kagan, an independent technology and telecom analyst.

Verizon declined to comment. But executives have voiced strong concerns about the hacks, signaling in October that they may have had a significant impact on Yahoo’s core business. Analysts say that a concrete finding of that sort by Verizon could allow it to renegotiate terms or even abandon the purchase.

]]> 0 Mon, 23 Jan 2017 19:46:01 +0000
Judge blocks $37 billion merger of health insurer giants Aetna and Humana Tue, 24 Jan 2017 00:36:37 +0000 A federal judge has prohibited the merger of two health insurance giants, Aetna and Humana, upholding the Justice Department’s decision that the $37 billion deal would hurt competition and raise prices for consumers.

“The court is unpersuaded that the efficiencies generated by the merger will be sufficient to mitigate the anticompetitive effects for consumers in the challenged markets,” U.S. District Judge John Bates wrote in his 158-page opinion.

In July, the Justice Department sued to block the merger, arguing that it would reduce competition in the Medicare Advantage market and in some of the exchanges set up under the Affordable Care Act. Medicare Advantage plans are Medicare health plans offered by private insurers.

“We are reviewing the opinion now and giving serious consideration to an appeal, after putting forward a compelling case,” Aetna spokesman T.J. Crawford said. The companies’ merger agreement, which has already been extended twice, is due to expire Feb. 15.


Bates wrote in his opinion that the proposed merger would have decreased competition substantially in the Medicare Advantage market in 364 counties. Aetna and Humana had proposed that divesting some of that business to a smaller insurer, Molina, could have addressed those concerns, but the judge did not agree.

The merger was also deemed to lessen competition in the exchanges set up by the Affordable Care Act in three Florida counties. Aetna withdrew from the majority of the exchanges that it had participated in this year, citing financial losses. The judge, however, wrote that Aetna withdrew from 17 counties highlighted in the case “specifically to evade judicial scrutiny of the merger.”

In a statement, Deputy Assistant Attorney General Brent Snyder called the decision a victory for consumers and said taxpayers and customers would save up to half-a-billion dollars each year.

“This merger would have stifled competition and led to higher prices and lower-quality health insurance,” Snyder said.


In a research note, Ana Gupte, an analyst at Leerink Partners, wrote that she had expected the deal to have a one in three chance of closing. She said other bidders could now emerge for Humana.

In a separate case, Anthem and Cigna have proposed a $54 billion merger that was also blocked by the Justice Department and appealed. The decision in that case is still pending, but Gupte said that deal is also expected to be blocked.

Matthew Cantor, a partner at Constantine Cannon, an antitrust law firm, said the decision was based on a thorough analysis by the judge and argued that an appeal would likely be difficult from a legal standpoint. But he noted that a wild card could be the role of the Trump administration, which is currently pressing to replace the Affordable Care Act and will be negotiating with insurers who sell plans in the marketplaces and in whatever replaces them.

“You have a White House – at least when they were in the president-elect phase – that has seemingly been receptive to having discussions with executives whose mergers are under review,” Cantor said. “It could be that the independence of the Justice Department is cast aside here, in order to create a settlement which would benefit, from a political standpoint, the Trump administration. If they, in fact, revise the ACA so drastically and they can get public statements from these insurers – these large insurers – that they support the transition.”


Dan Mendelson, president of Avalere Health, said that whether on appeal or in new deals, he expects insurers to continue to make acquisitions or attempt mergers. He said it’s possible that insurers could turn to data and analytics firms.

“Health plans have been and will continue to be acquisitive,” Mendelson said. He pointed out that the largest health insurer, UnitedHealth Group, “has already scaled up to a very large degree, so the other companies are interested in following suit.”

A request for comment from Humana was not immediately answered.

The stock prices of both companies fell on the news.

The decision was applauded by advocates for doctors and patients.

“The court ruling halts Aetna’s bid to become the nation’s largest seller of Medicare Advantage plans and preserves the benefits of health insurer competition for a vulnerable population of seniors,” Andrew Gurman, president of the American Medical Association, said in a statement.

Gurman said the decision sets a precedent by determining that the Medicare Advantage market does not compete with traditional Medicare.

“Today’s ruling is a decisive victory for jobs, consumers, and health care. Mega mergers like the proposed consolidation of Aetna and Humana raise prices, lower health care quality – and kill jobs,” Sen. Richard Blumenthal, D-Ct., said in a statement.

]]> 0 - This Tuesday, Aug. 19, 2014, file photo, shows signage in front of Aetna Inc.'s headquarters in Hartford, Conn. A federal judge has rejected health insurer Aetna’s plan to buy rival Humana for about $34 billion and become a major player in the market for Medicare Advantage coverage. U.S. District Judge John Bates said in an opinion filed Monday, Jan. 23, 2017, that he largely agrees with federal regulators who contended that such a combination would hurt competition. (AP Photo/Jessica Hill, File)Mon, 23 Jan 2017 21:48:34 +0000
Jay Z streaming service, Sprint announce new partnership Mon, 23 Jan 2017 23:51:04 +0000 Jay Z’s artist-owned streaming service, Tidal, and Sprint announced a new partnership Monday that will give the company’s 45 million customers unlimited access to Tidal, including exclusive content.

In the deal, the telecommunications company acquired a 33 percent stake in Tidal; Sprint CEO Marcelo Claure will join Tidal’s board of directors. A source familiar with the deal told Billboard that Sprint paid $200 million for its stake in the company and that Jay Z, whose real name is Shawn Carter, and the company’s two dozen artist-owners – Beyonce, Nicki Minaj, Rihanna, Coldplay, to name a few – will remain part owners.

“Sprint shares our view of revolutionizing the creative industry to allow artists to connect directly with their fans and reach their fullest, shared potential,” Jay Z said in a statement. “Marcelo understood our goal right away, and together we are excited to bring Sprint’s 45 million customers an unmatched entertainment experience.”

As part of the partnership, Sprint will establish a dedicated marketing fund specifically for Tidal artists that will afford them “the flexibility to create and share their work with and for their fans.”

Exclusive content has bolstered the fledgling, often-maligned service, and 2016 was the company’s biggest year yet.

Rihanna worked with Samsung to create an immersive mobile experience called the ANTIdiary, in which users explore multiple rooms that trace the pop star’s life story. The collaboration between the pop star and the tech giant culminated in the gift of download codes for “Anti,” which was supposed to be a surprise release but mistakenly went up on Tidal a few hours early.

Despite giving away 1 million copies for free, which wouldn’t count toward chart placement per Billboard’s rules, and the technical glitch that saw Tidal leak its own exclusive, “Anti” hit No. 1. Shortly afterward, Kanye West used Tidal for the unconventional launch of his latest, “The Life of Pablo.”

]]> 0 2013 photo shows recording artists Jay Z and Beyonce arriving at the Capitol in Washington for President Obama's swearing-in ceremony during the 57th presidential inauguration.Mon, 23 Jan 2017 18:51:04 +0000
It will be hard for Trump to make American economy greater Mon, 23 Jan 2017 23:29:11 +0000 WASHINGTON — President Trump’s economic plans are nothing if not ambitious: Annual growth of 4 percent – or more. A diminished trade gap. The creation of 25 million jobs over 10 years, including the return of good-paying factory positions.

It all adds up to an immense challenge, one that Trump aims to achieve mostly by cutting taxes, loosening regulations, boosting infrastructure spending and renegotiating or withdrawing from trade deals. At the top of his agenda: Pulling out of the 12-nation Pacific trade agreement, a move Trump initiated Monday, his first full weekday in office. He has also said he will rewrite the North American Free Trade Agreement to better serve the United States.

Yet to come anywhere near his goals, economists say Trump would have to surmount at least a handful of major hurdles that have long defied solutions.

He may yet succeed. But he faces deep-rooted obstacles that have bedeviled presidents from both parties for years.

Among the challenges:


Trump’s goal of vastly expanding manufacturing would require at least the partial reversal of a decades-long trend toward a service-oriented economy and away from factory work. Former President Obama sought to add 1 million manufacturing jobs in his second term but came up two-thirds short.

Even if Trump could return factory production to its heyday by toughening trade deals and threatening to slap tariffs on America’s trading partners, a surge of new jobs wouldn’t necessarily follow. The increased use of robots and automation has allowed factories to make more goods with fewer workers. Research shows that automation has been a bigger factor than trade in the loss of U.S. factory jobs.

The trend is spreading outside factory gates. Uber is experimenting with self-driving cars. Restaurant chains like Eatsa can now serve meals through an automated order-and-payment system. No cashiers or servers are needed.

“You cannot just slap tariffs on and hope that will bring back middle-class jobs,” says Daron Acemoglu, an economist at MIT. “The jobs that went to China would come back to robots rather than people.”


Jobs that can’t be automated typically require education beyond high school. Yet not everyone can or wants to attend college. Many analysts say the economy needs better and more widely available post-high school education and training, whether through community colleges, vocational schools or boot camps offering technology training.

Such a boot camp is how Sharnie Ivery managed to move beyond the retail and sales jobs he’d held right after high school. In 2013, Ivery began a six-month computer coding boot camp at Flatiron School in New York through which he obtained internships. Last year, he began working as a software developer at Spotify, the music streaming service. “There weren’t many opportunities for a career in technology” without training and experience, said Ivery, 24.

Last year, the Obama administration opened some financial aid programs to Flatiron and other boot camps. But such efforts remain in an experimental phase, and any widespread successes from those programs are likely years away.

A lack of technological skills isn’t an issue only for the tech industry itself. Modern manufacturing work increasingly requires high-tech know-how requiring some education or training beyond high school. Since the economic recovery began in 2009, only 12 percent of manufacturing jobs have gone to workers with no more than a high school degree, according to research by Georgetown University’s Center for Education and the Workforce.


In the past decade, the growth of American workers’ productivity – the amount they produce per hour worked – has slumped to roughly half its long-term average.

That slowdown has imposed a dead weight on the economy. When employees become less efficient, it slows economic growth, and companies can’t raise pay without boosting prices. A faster expansion needs a combination of more people working and more efficient workers.

Trump’s proposals might help somewhat. He favors expanded tax breaks for companies that invest in new machinery and equipment, which typically make workers more productive. And he’s vowed to build more roads, tunnels and other infrastructure, which can save on shipping and commuting costs.

Douglas Holtz-Eakin, president of the conservative American Action Forum, says Trump’s push to loosen regulations might also lead to more startup companies, which could prod established businesses to become more efficient.

Still, many economists, like Robert Gordon of Northwestern University, argue that today’s innovations – in mobile communications and biotechnology, for example – aren’t transformative enough to fuel the explosive productivity growth that resulted from inventions like the automobile, telephone and computer.


Economic growth since the recession ended has been both slow and uneven: It’s benefited wealthier Americans far more than low- and middle-income households. Trump’s nominee for Treasury secretary, Steven Mnuchin, noted this concern at a confirmation hearing last week: “The average American worker has gotten nowhere,” he said.

The tepid gains for low- and middle-income families have slowed the economy because those groups typically spend more of their income than do affluent households, and consumer spending is the economy’s primary fuel. Against that backdrop, Trump’s goal of 4 percent annual economic growth – a formidable one under any circumstances – might be next to impossible.

Mnuchin said the administration’s proposals to cut taxes for individuals and businesses would shore up families’ finances and encourage companies to hire more. Yet America’s wealth gap has widened even as previous presidents have cut individual taxes.

And there’s no way to know how companies would use their tax cuts. Many large companies return profits to shareholders by boosting dividend payments and share buybacks, rather than by expanding investment and raising employee pay.


Trump has pledged to add 25 million jobs over the next decade. But with fewer people looking for work now than just a few years ago, it’s unclear where all those extra workers would come from.

The president’s pledge will run up against a long-standing trend: a decline in the proportion of Americans either working or seeking work.

That’s largely a reflection of an aging population. Roughly 10,000 baby boomers turn 65 every day, and many retire. The Congressional Budget Office forecasts that the proportion of Americans working or looking for work will keep dropping to 61.5 percent by the end of 2020.

Mark Lashinske of Tempe, Arizona-based Modern Industries, which makes machine tools, says he’s struggling to fill 14 machinists’ positions.

Lashinske blames the steady loss of manufacturing jobs since 1980 for discouraging an entire generation from factory work. His company is expanding its efforts to find younger job applicants.

The company has established an internship program and is working with a nonprofit group to encourage disadvantaged high school students to consider manufacturing careers.

“We’ve been looking for quite a while,” he says. “We have such a shortage.”

]]> 0 Mon, 23 Jan 2017 18:44:08 +0000
Retiring UNE president to receive Chamber award for leadership Mon, 23 Jan 2017 20:42:56 +0000 Danielle Ripich, the president of the University of New England, will receive an award from the Portland Regional Chamber of Commerce on Thursday, recognizing her for 10 years of leadership and contributions to the local economy.

Ripich, who announced she is retiring this year, will receive the Robert R. Masterson Economic Growth Award at the chamber’s annual meeting. During her tenure, enrollment at the university increased from 4,000 to more than 10,000 students and generated an economic impact of more than $1 billion in 2016, according to a release from UNE. The college added new programs to produce dentists, pharmacists, as well as other health professionals, and built a marine sciences program under her leadership. The college launched a study abroad campus in Tangier, Morocco, and acquired an Atlantic island to serve as a field station for its marine science students.

“Leadership is all about having a vision and finding a way to make that vision a reality,” said Chris Hall, Portland chamber CEO, in the release. “Danielle Ripich embodies the best qualities of leadership, and her vision, implemented by her great team at UNE, has brought our region remarkable benefits. Great jobs, exciting new opportunities and the highest quality educational experiences only begin to describe what President Ripich’s leadership has meant to our community.”

]]> 0 Mon, 23 Jan 2017 17:39:04 +0000
Trump’s cancellation of hot-button Asian trade deal shifts U.S. role in world economy Mon, 23 Jan 2017 17:17:44 +0000 WASHINGTON – President Donald Trump’s cancellation Monday of an agreement for a sweeping trade deal with Asia began recasting America’s role in the global economy, leaving an opening for other countries to flex their muscles.

Trump’s executive order formally ending the United States’ participation in the Trans-Pacific Partnership was a largely symbolic move intended to signal that his tough talk on trade during the campaign will carry over to his new administration. The action came as China and other emerging economies are seeking to increase their leverage in global affairs, seizing on America’s turn inward.

Mexico’s President Enrique Peña Nieto declared Monday that his country hopes to bolster trade with other nations and limit its reliance on the United States. Chinese state media derided Western democracy as having “reached its limits”; President Xi Jinping had touted Beijing’s commitment to globalization during his first appearance at the annual gathering of the world’s economic elite last week in Davos, Switzerland.

“This abrupt action so early in the Trump administration puts the world on notice that all of America’s traditional economic and political alliances are now open to reassessment and renegotiation,” said Eswar Prasad, a professor of trade policy at Cornell University. “This could have an adverse long-run impact on the ability of the U.S. to maintain its influence and leadership in world economic and political affairs.”

The TPP was one of President Barack Obama’s signature efforts, part of a broader strategy to increase American clout in Asia and provide a check on China’s economic and military ambitions. The deal with 11 other nations along the Pacific Rim covered a wide swath of goods, granting U.S. cattle ranchers better access to Japan and lowering tariffs on apparel imported from Vietnam. Congress granted Obama “fast-track” authority to negotiate the agreement in 2015, but political sentiment quickly shifted, and the deal fell apart without making it to Capitol Hill for approval.

Trump’s election effectively guaranteed its demise. Monday’s executive order made it official.

Pulling out of the deal “raises fundamental questions about American reliability,” said Richard Haass, president of the Council on Foreign Relations. “It leaves our allies and trading partners in the lurch. It does create strategic opportunities for China.”

Those include Beijing’s own regional trade agreement, which it is pursuing with 15 other Asian countries, including Japan. An analysis by White House economists under Obama found that a deal between just China and Japan could jeopardize $5 billion in U.S. exports and millions of American jobs. Proponents of the TPP have also pointed to recent reports of Beijing’s weapons buildup on islands in the South China Sea as evidence of the country’s emboldened posture.

Sen. John McCain, R-Ariz., echoed those concerns Monday, calling Trump’s withdrawal from the TPP a “serious mistake” that will give China greater authority to dictate the terms of international trade.

In his speech in Davos, even Xi warned that America’s protectionist turn could backfire and wind up damaging the world economy.

“No one will emerge as a winner in a trade war,” Xi said.

But canceling the TPP was one of the clarion calls of Trump’s campaign, part of a global backlash against the drive toward greater internationalization that has defined the world economy since the end of World War II. British Prime Minister Theresa May, who is in the midst of navigating her country’s own break from established trading partners, is slated to visit with Trump this week. A White House spokesman said meetings with Peña Nieto and Canadian Prime Minister Justin Trudeau are in the works.

“What we want is fair trade,” Trump said during a meeting with business executives Monday. “And we’re going to treat countries fairly, but they have to treat us fairly.”

Ending America’s involvement in the TPP was also a top priority for Democrats. On Monday, five Democratic senators introduced legislation that would require the president to notify each of the 11 other countries involved in the deal of the United States’ withdrawal. It would also block any “fast track” approval of the agreement in the future.

AFL-CIO President Richard Trumka hailed the president’s executive order and called for additional action.

“They are just the first in a series of necessary policy changes required to build a fair and just global economy,” he said in a statement.

John Veroneau, a partner at the law firm Covington who served as deputy U.S. trade representative under President George W. Bush, said the Trump administration could still pursue bilateral deals with individual countries, particularly Japan and Vietnam, that mirror the deals negotiated under the TPP. But he pointed out that China is aggressively seeking to lock in trade agreements with many of the same countries that had signed on to the TPP.

“If the U.S. decides to pause, we should assume that some of our trading partners will move ahead,” Veroneau said.

In addition to backing out of the TPP, Trump has also vowed to renegotiate the North American Free Trade Agreement, the cornerstone of the U.S. economic relationship with Mexico and Canada for more than two decades. Trump’s nominee for commerce secretary, billionaire investor Wilbur Ross, has said he considers reopening the deal the first order of business for his agency. On Monday, White House spokesman Sean Spicer said the administration would tackle NAFTA “very shortly.”

In Mexico, Peña Nieto said in a speech Monday that he plans to begin trade talks with other countries that had signed on to the TPP. And he stressed that in the Trump era, one of Mexico’s top priorities will be to diversify its trading and political partners so it won’t have to rely so heavily on the United States.

Mexico is a nation “open to the world,” Peña Nieto said.

Meanwhile, Trudeau and other top Canadian officials met with Trump adviser Stephen Schwarzman, chief executive of the Blackstone Group, according to the Globe and Mail. Schwarzman called trade between the United States and Canada “in balance.”

“Things should go well for Canada in terms of any discussions with the United States,” he said, according to the Globe and Mail.

In meetings with business leaders and union workers Monday, Trump highlighted his proposal for a border tax as a centerpiece of his administration’s trade policy.

Dow Chemical chief executive Andrew Liveris, who attended the meeting, said the border tax was discussed extensively. He said the executives were asked to return in 30 days with a plan to shore up the manufacturing industry.

“I would take the president at his word here,” Liveris said. “He’s not going to do anything to harm competitiveness. He’s going to actually make us all more competitive.”

Still, it is unclear exactly how a border tax would be implemented. Testifying before the Senate Finance Committee last week, Trump’s nominee to lead the Treasury Department said any border tax would be targeted at specific businesses. However, the president does not have the power to levy taxes, and experts on international trade have warned that focusing on particular companies could violate treaties.

House Speaker Paul Ryan, R-Wis., has proposed allowing businesses that export goods to deduct many of their expenses, while those that import would not receive the same benefit. But in a recent interview with the Wall Street Journal, Trump dismissed the plan, known as “border adjustment,” as “too complicated.”

Some industry groups argue that Trump’s approach would better leverage America’s status as the world’s largest economy.

Scott Paul, president of the Alliance for American Manufacturing, said his group is hoping that opening up NAFTA could provide more leeway to combat currency manipulation in countries outside the agreement. His group, which represents both industry and unions, is also seeking more stringent rules of origin, which dictate how much production must occur within member countries to qualify for free-trade status.

“The details are going to matter a lot,” Paul said. “Renegotiating NAFTA obviously entails some risks and some rewards.”

]]> 0 Trade Council adviser Peter Navarro, right, and White House Chief of Staff Reince Priebus, center, await President Donald Trump's signing three executive orders, Monday, Jan. 23, 2017, in the Oval Office of the White House in Washington. (AP Photo/Evan Vucci)Tue, 24 Jan 2017 00:40:20 +0000
Former Mercy employee says hospital got millions in improper Medicare payments Mon, 23 Jan 2017 16:29:18 +0000 A former Mercy Hospital billing official claims the health care provider reaped millions of dollars in improper payments from the Medicare system.

Jennifer Worthy, who had been Mercy’s manager of patient accounts, filed a lawsuit after resigning from the hospital in early 2014. A federal judge in Maine last week denied most of the motions filed by Mercy and two billing companies that were seeking to dismiss her lawsuit, clearing the way for the case to move forward.

U.S. District Judge John A. Woodcock Jr. did dismiss some of Worthy’s claims under whistle-blower protection laws because they weren’t filed in time, but the bulk of her allegations are proceeding.

Wayne Clark, spokesman for Mercy, said Worthy’s claims have been investigated by state and federal officials and both declined to get involved with her lawsuit.

“While the law allows the employee to pursue the claim independently, we believe the lawsuit is deficient on the law and the facts,” he said.

Clark also noted that Woodcock’s order only allows the case to proceed and does not represent findings on the merit of Worthy’s claims. The hospital disputes those claims, he said, and Mercy “will vigorously defend ourselves.”

In her lawsuit, Worthy charges that Mercy and the two billing companies, Accretive and California Healthcare Medical Billing, engaged in a number of schemes to improperly bill Medicare, the government insurance program for the elderly. Those plans included “unbundling” bills and elevating the severity of patients’ visits to doctors – both of which she said resulted in higher bills to Medicare – and removing coding to get around Medicare limits and delays on some bills.

Also named in the lawsuit is Eastern Maine Healthcare Systems, the parent company of Portland-based Mercy Hospital.

The basis for the lawsuit is the False Claims Act, which dates back to the Civil War and was used by President Abraham Lincoln as a tool to prevent the government from being defrauded by contractors. It is often used by whistle-blowers to draw attention to potentially fraudulent government contracts or faulty goods or services provided to the government.

Jeffrey Neil Young, one of Worthy’s lawyers, said the overbilling amounts to “millions” of dollars, but he said more precise accounting won’t be available until lawyers get access to Mercy records as the trial moves forward.

After Worthy sued, the hospital and the billing companies moved to dismiss her allegations. Now that Woodcock has said most of the case can move forward, Mercy is supposed to reply to the lawsuit itself by early February, Young said.

Then, lawyers will begin exchanging records and taking depositions. Young said he doesn’t expect the case to be tried in court until next year.

Worthy claims that when she was a Mercy employee, she repeatedly objected to the practices used by Accretive and CHMB, but Mercy officials failed to force the companies to change their methods. Accretive’s methods have been criticized before, including in Minnesota, where state officials said the company stationed debt collectors in emergency rooms and demanded that patients pay their bills before getting treatment.

The hospital and companies asked Woodcock to throw out the case because they argued that it wasn’t specific enough. But Woodcock instead said Worthy’s allegations are “copious and dense” and he needed 34 pages to summarize them in his order denying most of the hospital and billing companies’ motions to dismiss.

Young said Worthy supplied several specific examples of what she alleges are improper billing and will be able to provide more once lawyers gain access to more of the hospital’s records.

The parts of the lawsuit that Woodcock dismissed relate to Worthy and her employment, rather than the underlying fraud allegations. For instance, he dismissed one allegation against CHMB, saying there’s no evidence that the company could be considered her employer, rather than Mercy and Accretive. He also dismissed her attempt to get monetary damages and lawyers fees under a state whistle-blower protection law, noting that her lawyers agreed that she missed a deadline for filing for those remedies under that act.

Worthy alleged that her resignation was a “constructive dismissal” by the hospital because she was working in a hostile environment and Mercy ignored her repeated complaints about the billing practices, creating intolerable conditions for her to continue working. Young said that even though the judge dismissed part of Worthy’s lawsuit that alleged she was wrongfully discharged, she may be able to pursue that claim by other means.

Young said Worthy now works as director of patient financial services for another health care provider.


]]> 0 Hospital is reviving plans to consolidate at its Fore River campus.Tue, 24 Jan 2017 00:19:14 +0000
Trump tells business leaders they face hefty tax for moving production out of U.S. Mon, 23 Jan 2017 15:42:35 +0000 WASHINGTON — Opening his first official week in office, President Donald Trump warned business leaders Monday that he would impose a “substantial border tax” on companies that move their manufacturing out of the United States, while promising tax advantages to companies that produce products domestically.

“All you have to do is stay,” he said during a morning meeting in the White House’s Roosevelt Room.

Tesla CEO Elon Musk and Marillyn Hewson of Lockheed Martin were among the executives who attended the meeting. The gathering kicked off a jam-packed day for the new president, including an evening reception with lawmakers from both parties and a sit-down with union leaders.

The president also planned to sign multiple executive orders in the Oval Office. Trump had pledged to quickly use his executive authority to withdraw the U.S. from the 12-nation Trans-Pacific Partnership trade pact agreed to under the Obama administration. He’s also expected to sign an order implementing a federal government hiring freeze.

Conservatives are also eager for Trump to sign an order reinstating a ban on providing federal money to international groups that perform abortions or provide information on the option. The regulation, known as the “Mexico City Policy” or, by critics, the “global gag rule,” has been a political volleyball, instituted by Republican administrations and rescinded by Democratic ones since 1984.

Trump ran for office pledging to overhaul U.S. trade policy, arguing that massive free-trade agreements have disadvantaged American workers. Since winning the White House, he’s aggressively called out companies that have moved factories overseas, vowing to slap taxes on products they then try to sell in the U.S.

“Some people say that’s not free trade, but we don’t have free trade now,” Trump said Monday.

The president also reiterated his campaign pledge to lower taxes for companies, as well as the middle class, “anywhere from 15 to 25 percent.” He also called for cutting 75 percent of regulations, though he insisted that doing so would not compromise worker safety.

Trump’s outreach effort comes after a tumultuous first weekend in the White House that included lambasting news organizations for correctly reporting on the size of the crowds at his inauguration and mass protests against his presidency on the following day.

Trump delivered a more unifying message Sunday and sought to reassure Americans he was up to the daunting task ahead.

Speaking in the White House East Room during a swearing-in ceremony for top aides, the president warned his staff of the challenges ahead but declared he believed they were ready.

“But with the faith in each other and the faith in God, we will get the job done,” he said. “We will prove worthy of this moment in history. And I think it may very well be a great moment in history.”

Trump said his staff was in the White House not to “help ourselves” but to “devote ourselves to the national good.”

“This is not about party, this is not about ideology. This is about country, our country. It’s about serving the American people,” he said.

Earlier Sunday, Trump offered a scattershot response to the sweeping post-inauguration protests, first sarcastically denigrating the public opposition and then defending the right to demonstrate a short time later.

“Watched protests yesterday but was under the impression that we just had an election! Why didn’t these people vote? Celebs hurt cause badly,” Trump tweeted early Sunday morning. Ninety-five minutes later, he struck a more conciliatory tone.

“Peaceful protests are a hallmark of our democracy. Even if I don’t always agree, I recognize the rights of people to express their views,” the president tweeted, still using his personal account.

Trump also spoke with Israeli Prime Minister Benjamin Netanyahu, who accepted an invitation to visit the White House in early February. The prime minister said he is hoping to forge a “common vision” with the newly inaugurated U.S. president that could include expanded settlement construction and a tougher policy toward Iran.

Trump also announced that he’s set up meetings with Canadian Prime Minister Justin Trudeau and Mexican President Enrique Pena Nieto.

“We’re going to start some negotiations having to do with NAFTA,” he said of his meeting with Pena Nieto. Mexico is part of the free trade agreement with the U.S. and Canada. Trump said he also will discuss immigration and security at the border. He has promised to build a wall along the length of the southern border and insisted that Mexico will pay for it.

Later in the week, he’ll address congressional Republicans at their retreat in Philadelphia and meet with British Prime Minister Theresa May.


Associated Press writers Julie Pace, Jonathan Lemire and Lisa Lerer contributed to this report.

]]> 0, 23 Jan 2017 11:04:14 +0000
South Portland developer of architectural software sold Mon, 23 Jan 2017 15:20:26 +0000 A South Portland company that develops software for architects and the construction industry has been acquired by a private equity firm in Salt Lake City.

InterSpec, which employs about 20 people, developed a suite of software products under the name e-SPECS that speeds up the specification process using automation. The company, founded in 1998, was acquired by Arcom, an affiliate of Alpine Investors, for an undisclosed price.

Arcom develops and distributes software for the design and construction industry. MasterSpec is its best-known product, used by architects and engineers to customize designs and ensure accurate specifications. Executives from both companies say the acquisition allows for better integration of their software products, which will benefit customers.

“The 20 professional-level positions at InterSpec will stay at our offices in South Portland, and there is the real prospect of adding jobs in the near future,” said Matt Hoffner, chairman and managing director of InterSpec, in a news release announcing the acquisition. He also thanked the Maine Venture Fund, whose financing has helped InterSpec grow.

InterSpec founder Gilles Letourneau said the company’s revenue has been increasing by 20 to 25 percent annually for the past three years and that revenue is “in the millions” (as opposed to the tens of millions). He would not provide any further specifics about the company’s financials.

]]> 0 Tue, 24 Jan 2017 00:48:25 +0000
Surge in new Scarborough apartments both welcomed and questioned Mon, 23 Jan 2017 09:00:00 +0000 SCARBOROUGH — Seven housing projects now in the pipeline could add as many as 865 apartments to Scarborough’s housing market and the town’s tax rolls in the next few years.

If all of the apartments are built, they would increase the town’s 7,475 households by nearly 12 percent and increase the number of housing units by about 10 percent, based on U.S. Census figures. That’s a significant increase in a town where 78 percent of homes are owner-occupied and where multifamily property sales didn’t warrant a mention in the 2017 real estate forecast released last week by the Maine Real Estate & Development Association.

Three apartment projects have been approved: a 36-unit, market-rate senior housing complex on Griffin Road; the 38-unit Southgate House affordable housing complex on Route 1; and a 53-unit, market/affordable housing complex off Eastern Road.

Proposed projects include Dunstan Village, a 36-unit, market-rate complex off Route 1, and Gateway Commons, a 288-unit luxury complex off Haigis Parkway. Both go before the Planning Board on Jan. 30.

Town officials and others say Scarborough is prepared for such growth, although some residents are concerned about the marketability of so many apartments and the growing demand for town services. The Town Council last week increased the number of apartments that could be built under an adjustable growth-control ordinance from 215 to 500 units.

“It’s a reaction to the demand for multifamily housing that is out there in Greater Portland and York County, and it will provide the housing diversity that Scarborough needs,” said Shawn Babine, council chairman. “I think it will increase the overall value of Scarborough and bring a diverse group of citizens to our community.”

1142102_887693 ScarbApartments0117.jpg

The potential property tax benefit is undeniable. Based on a projected market value of $90,000 to $150,000 per unit, a 300-unit project would have a taxable value of $27 million to $45 million and generate $429,000 to $716,400 in annual property taxes, said Town Planner Dan Bacon.

In contrast, the recently developed Marshalls shopping center is valued at $12.6 million and the Cabela’s shopping center is valued at $30.3 million, Bacon said.

Commercial properties typically demand more town services, including road maintenance and public safety, than most multifamily housing, Bacon said. Any increased demand related to the additional apartments would require the town to improve public services and make them more efficient, Babine said.


Two of the proposed projects – Gateway Commons and the similar Commercial Place on Enterprise Drive off Route 1 – were approved years ago as commercial developments. They are being recast as multifamily complexes to meet growing demand for apartments from millennials, young to middle-aged professionals, local empty-nesters and seniors retiring to Maine.

“We’re really going after a lifestyle type,” said Ben Devine, developer of Gateway Commons. “It’s an ideal site for this multifamily project. We think it will serve the Greater Portland market well.”

Gateway Commons would be built off Haigis Parkway, directly across Payne Road from Cabela’s and Exit 42 of the Maine Turnpike, with Route 1 at the other end of the commercial parkway. Based on a similar project that Devine’s company completed last year in East Lyme, Connecticut, it would consist of 12 buildings with 24 apartments each. It would have covered garages and a clubhouse with a community room, outdoor pool, gym and pet-washing room.

The project would be built in phases to meet market demand, Devine said. The 280-unit East Lyme project was completed in two years.

If the Scarborough project is approved this spring, construction would start this summer and 75 to 80 units could be ready for tenants a year from now. Rents would range from $1,200 for a studio to $1,900 for a three-bedroom apartment, not including utilities. Few tenants would have children, Devine said.

“There isn’t going to be much impact on Scarborough schools,” Devine said. “These (apartments) are not designed for family living.”

Bacon, the town planner, estimated that only about 10 percent of the mostly one- and two-bedroom apartments proposed would have children, and few of them would be over age 5, thereby limiting the impact on the town’s recently expanded schools.

He also noted that if all of the proposed apartments were built, the developers would have to pay nearly $1 million in school impact fees, not to mention water, sewer and other impact fees.

Babine, the council chairman, said he has heard estimates that 865 additional apartments could bring 55 to 187 children to town, but he’s not concerned about the impact on local schools.

“There’s no way of predicting that now,” Babine said. “I believe our school system is prepared to absorb that amount. I actually don’t have a problem with our school system growing. I think that directly relates to the growing value and vibrancy of our community. I think we need to plan for it and be prepared.”


Benjamin Howard of Windsor Pines Drive, a 24-year-old engineer, questions whether millennials will want to live in large apartment complexes like Gateway Commons or Commercial Place. He said those complexes would be ideally located off Interstate 95 and Route 1, and he believes the town can handle the growth, but he worries about the impact that such large complexes will have on the town’s character.

The Gateway Commons apartment complex built by Devine Capital LLC in East Lyme, Conn., is similar to what is planned for Scarborough. If the Maine project is approved, construction would start this summer and 75 to 80 units could be ready for tenants a year from now. Gateway Commons consists of 12 buildings with 24 apartments each, and has a clubhouse with a community room, outdoor pool and gym. Rents range from $1,200 for a studio to $1,900 for a three-bedroom, not including utilities.

The Gateway Commons apartment complex built by Devine Capital LLC in East Lyme, Conn., is similar to what is planned for Scarborough. If the Maine project is approved, construction would start this summer and 75 to 80 units could be ready for tenants a year from now. Gateway Commons consists of 12 buildings with 24 apartments each, and has a clubhouse with a community room, outdoor pool and gym. Rents range from $1,200 for a studio to $1,900 for a three-bedroom, not including utilities. Photo courtesy of Devine Capital LLC

“I’d like Scarborough to remain an original town,” Howard said. “I don’t want to see the same buildings here as you see in other parts of the country.”

Portia Hirschman of Inspiration Drive lodged her concerns last year when town planners were reviewing the addition of 53 apartments to Eastern Village, a multi-phase housing development started more than a decade ago that includes single-family homes and townhouses.

Hirschman and her husband bought a house in the development four years ago after they retired. She said current residents struggle to get the developer, Kerry Anderson, to address unfinished paving, truck traffic, lack of parking and other issues. She looks forward to interacting with younger people who might rent the planned apartments, but she worries that parking, traffic and other problems will get worse.

“Many promises are made and it never seems to work out,” Hirschman said.

Anderson didn’t respond immediately to a call for comment.

Richie Axelsen of Colby Drive spoke against the council’s decision to increase the number of apartments that could be built under the growth-control ordinance. He also wrote a letter to the council about it. Axelsen is most concerned about affordable housing that’s part of the Southgate House and Eastern Village projects, as well as the proposed 84-unit Mussey Road Apartments.

“(Allowing) affordable housing to come into Scarborough (is) very disturbing,” Axelsen wrote. “We are allowing our town to become overpopulated, and the special character that this small town represents obviously does not matter to you.”

Axelsen continued, “I walked away from the meeting last night feeling like my wife and I made the wrong decision by building in Scarborough to escape all of this craziness that we (experienced) while owning a home in Portland,” where he saw affordable housing “overpopulate” that city.

Despite residents’ concerns, Babine said he believes that having more apartments in Scarborough is good thing.

“I think we’re in a good spot, because I don’t think this is a long-term trend,” Babine said. “I think it’s cyclical and it’s a big bump. It’s a nice place to be.”

Kelley Bouchard can be contacted at:

]]> 0, 23 Jan 2017 08:25:10 +0000
Maine Farmers’ Market Convention lines up speakers Mon, 23 Jan 2017 01:51:28 +0000 SKOWHEGAN — Sarah Smith, owner of Grassland Organic Farm in Skowhegan, will be among the featured speakers Jan. 29 for the ninth annual Maine Farmers’ Market Convention on the Alfond Campus at Kennebec Valley Community College in Fairfield.

Market vendors, managers and volunteers from across the state are expected to convene for the conference, the theme of which is “Taking the Lead,” according to Leigh Hallet, executive director of the host Maine Federation of Farmers’ Markets, headquartered in Pittsfield. The Alfond campus is located in the Hinckley section of the college on U.S. Route 201.

Participants can choose from a dozen sessions throughout the day, focusing on how to cultivate collaborative markets and how to strategize for growth. The deadline for registration is Thursday.

Smith, the former manager of the Skowhegan Farmers’ Market, will be among the presenters. Smith is scheduled to discuss marketing and advertising ideas for reaching new customers and keeping the regulars coming back.

Smith will be joined at the lectern by Clara Moore of the Portland Farmers’ Market.

Hallet said the convention drew more than 100 visitors last year at Maple Hill Inn in Hallowell, where the convention had been held for the past three years. She said they are hoping to include volunteers this year from KVCC’s sustainable agriculture course of studies.

The convention is an opportunity for people interested in Maine’s farmers markets to come together for inspiration, guidance and networking opportunities, she said. The cost is $65 for members or volunteers of a farmers market and $75 for nonmembers of a farmers market, Hallet said.

The keynote address, titled “Resurgent Farmers’ Markets: Impacts Around the U.S. and Prospects for Maine,” will be given by Dr. Alfonso Morales, professor of Urban and Regional Planning and director of the Metrics and Indicators for Impact project at the University of Wisconsin-Madison.

Morales will discuss contemporary trends for farmers markets and how Maine markets might respond to some of these trends. The talk will be based on his nationally and internationally recognized research on street vendors and marketplaces, as well as his recent work in support of the federation’s data collection efforts in Maine.

There will be 12 sessions taking place throughout the day, covering topics such as market design, food safety, specialty food trends, applying for federal grants, youth and family programming, partnering with municipalities, Supplemental Nutrition Assistance Program outreach and marketing techniques.

Additionally, this year an inspector from the Department of Agriculture, Conservation and Forestry will be on hand to inspect scales all day at $5 per scale. Farmers and others wishing to apply to accept SNAP benefits or update their license with the USDA may do so on site. There will also be a WIC farmer authorization class offered.

The Skowhegan Farmers’ Market, now in its winter location at Boynton’s Greenhouse on Madison Avenue, is offering incentives through the Maine Harvest Bucks program. The Skowhegan Farmers’ Market is open from 10 a.m. to 1 p.m. on the first and third Saturdays every month.

During the summer, the market is held outdoors at the Somerset Gristmill.

With Maine Harvest Bucks, SNAP/EBT shoppers receive bonus local fruits and vegetables, stretching limited benefits much further.

Maine Harvest Bucks are known as “nutrition incentives,” which increase the value of federal nutrition assistance dollars through SNAP/EBT spent at participating farmers markets, community supported agriculture farms and retail outlets that sell local produce.

“For example,” said current market manager Carrie Tessier of Tessiers Farm in Skowhegan, “if you shopped at the Skowhegan Farmers’ Market and bought $25 dollars worth of bread, cheese, milk, coffee or meat, you would then receive $25 dollars in vouchers for fruit and vegetables that can be redeemed with a vendor at the market.”

Emily Buswell, a program assistant to the farmers market federation, said “there’s a whole network” of farmers markets across Maine that offer the Maine Harvest Bucks program.

“Last summer, more than 30 farmers markets participated in (the program), and 10 of those markets have continued their program through the winter,” Buswell said. “A large amount of farmers markets in Maine only run through the summer.”

For more information or to register, call 487-7114 or email Online registration is also available at

Doug Harlow can be contacted at 612-2367 or at:

Twitter: Doug_Harlow

]]> 0 Smith of Grassland Organic Farm in Skowhegan gets ready to milk a cow in a recent photo. Smith, the former manager of the Skowhegan Farmers' Market, will be among the speakers Jan. 29 at the annual Maine Farmers Market Convention.Sun, 22 Jan 2017 21:19:32 +0000
New Bath Iron Works chief: Despite contract loss, shipyard’s in good shape Sun, 22 Jan 2017 09:00:00 +0000 Bath Iron Works’ new president said last year’s loss of a massive Coast Guard contract was a significant blow but efficiencies and improvements made in pursuit of the bid will better position the shipyard for future Navy work.

“We’re conscious of our need to be affordable,” said Dirk Lesko, a longtime BIW manager who took over as president on Jan. 1. “Our customer (the Navy) reminds us frequently of our need to be affordable. And no matter how well you’ve done or how much you improve, there is always more opportunity.”

Lesko succeeded Fred Harris as president of General Dynamics-owned Bath Iron Works three months after BIW lost the Coast Guard cutter ships to a smaller, leaner shipyard and potentially a year before negotiations begin on the next multi-year Navy destroyer contract.

While BIW remains one of Maine’s largest employers, with a workforce of roughly 6,000, the cutter contract would have supported more than 1,000 jobs in the shipyard. Those positions could be lost absent a major shift in Navy shipbuilding.

“So the program was a big deal,” Lesko said during a recent candid discussion with the Maine Sunday Telegram about BIW’s challenges and future options. “There aren’t all that many opportunities to build the kinds of things that we build, particularly outside of the Navy.”

Of course, the recent shake-up at the White House and in Congress could bring major changes to shipbuilders like BIW.

Both President Trump and Navy officials are talking about the need to increase the size of the Navy fleet from 274 ships to 350 or 355 ships over the next three decades. Sixteen of the 47 additional ships would be “large surface combatants,” meaning cruisers or the guided-missile destroyers built in Maine and Mississippi.

Such a building spree wouldn’t come cheaply or easily. A recent Congressional Research Service analysis put the price tag at an additional $5 billion to $5.5 billion a year – money that Congress would have to appropriate.

For his part, Lesko laughed and said it was “nice to hear” the talk of a 355-ship Navy.

Yet six weeks before Friday’s inauguration, Trump had sent shock waves through the defense contracting community by using his bully pulpit – in this case, his Twitter feed – to pressure Lockheed Martin to reduce the costs of its F-35 stealth fighter jet. Weeks later, the head of Lockheed Martin emerged from a meeting with Trump to say they were working to lower costs. The F-35 program also directly employs nearly 1,000 workers in Maine.

Dirk Lesko, the chief executive at Bath Iron Works, said that the yard has to stay vigilant about controlling costs, but he believes BIW has a good chance to capture more defense contracts to build Arleigh-Burke destroyers like the Rafael Peralta, above, seen last year. The shipyard is the fourth-largest private employer in Maine.

Dirk Lesko, the chief executive at Bath Iron Works, said that the yard has to stay vigilant about controlling costs, but he believes BIW has a good chance to capture more defense contracts to build Arleigh-Burke destroyers like the Rafael Peralta, above, seen last year. The shipyard is the fourth-largest private employer in Maine. Gregory Rec/Staff Photographer

“It would be impossible to be in the business that we are in and not worry about that,” Lesko said when asked about political pressure to reduce previously agreed-upon costs. “But I will also tell you that, from what I see, we have an opportunity to improve. And some of that opportunity comes from … the fact that the Navy is building the DDG 51 (destroyers).”


BIW currently builds two types of destroyers: the Arleigh Burke-class DDG 51 guided-missile destroyers that have been the workhorses of the Navy fleet for decades, and the stealthy, Zumwalt-class DDG 1000 destroyers. Arleigh Burkes run the Navy about $1.7 billion apiece while each high-tech Zumwalt exceeds $4 billion.

The Navy commissioned the first Zumwalt in October, although the ship has also had some engineering problems not uncommon for first-of-its-class ships. Two more Zumwalts as well as four Arleigh Burke-class destroyers are at various stages of construction in Bath.

The shipyard has an annual payroll of $400 million and does $60 million worth of business with subcontractors in 12 Maine counties. Yet decision-making at the Navy during the past 15 to 20 years illustrates the challenges facing BIW and other defense contractors.

The Navy’s shift during the early-2000s from Arleigh Burke destroyers to the larger-yet-stealthier Zumwalt destroyers forced BIW to switch to a “revolutionary program” that created both opportunities and considerable uncertainty.

Rather than continuing to build a ship that had been BIW’s bread and butter for several decades, the shipyard was building a ship “from the ground up” with all new specifications, technologies and new skill sets for workers. As shipyard workers retired, they were replaced with new workers trained in how to build the Zumwalt.

But a combination of factors – including shifting global geopolitical dynamics, particularly in Asia, as well as changing weapons technology and skyrocketing costs – prompted the Navy to whittle down the planned number of Zumwalts from more than 30 to just three ships.

At the same time, the Navy revived and upgraded the Arleigh Burke or DDG 51 line, forcing yet another major shift at BIW and Ingalls Shipbuilding in Pascagoula, Mississippi.

“You won’t find anyone who is not excited that the Navy is building DDG 51s. We really love building DDG 51s in Bath,” said Lesko. “But stopping or transitioning back out of the building of Zumwalts … and taking a step into the past is not perfect. So we have spent a lot of the last three years trying to find ways that we think we did better on the DDG 1000 and fit those affordably back into DDG 51.”

The most recent Navy contract for Arleigh Burke destroyers awarded five ships each to both BIW and Ingalls Shipbuilding.

That even-split nearly didn’t happen, however, because Bath’s per-ship price was significantly higher than the bid from the Pascagoula shipyard.

BIW is also in the midst of lengthy negotiations with the Navy over an additional destroyer that BIW and Maine’s congressional delegation said is owed to Bath under a complex, decade-old “ship swap” agreement. The two sides have been haggling since May over the price tag and whether the ship will be the first of a new, upgraded version of the Arleigh Burke.


There has also been talk – led, at times, by Maine Sen. Angus King – about the need for additional Coast Guard icebreakers to better position the U.S. militarily and economically as regular shipping routes open in the melting Arctic. The Coast Guard has only one operational heavy-duty icebreaker capable of deploying to the polar regions. Russia, by comparison, has more than three dozen polar icebreakers, with more under construction.

Lesko said BIW is “carefully looking at it” but acknowledged that building icebreakers would be a “technical challenge” because their hulls and other specifications are so different from that of a Navy destroyer. BIW would likely have to make hefty investments in its shipyard, which is designed specifically for destroyers.

“But if there is a fleet of icebreakers, that is different from just a couple,” Lesko said with a laugh.

In the meantime, he and other BIW managers are gearing up for the next large, multi-ship Navy destroyer contract.

Lesko’s predecessor, Harris, won several hard-fought contract concessions from BIW’s largest union, the Local S6 chapter of the Industrial Union of Marine and Shipbuilding Workers of America, as the shipyard competed for the Coast Guard cutter contract.

The potential $10.5 billion contract went to Eastern Shipbuilding Group in Florida, a non-union company with no prior experience building military ships.

Harris announced his retirement from BIW and another General Dynamics shipyard, NASSCO, two months later.

Lesko said those negotiations “helped to position us” for the next bid, as have changes in early-stage construction that are improving their on-schedule delivery record and quality.

“I see us making progress,” Lesko said. “In the end, whether or not it’s enough progress has an awful a lot to do with what level of progress (Ingalls Shipbuilding) makes and what choice they make in terms of how they will bid for that work. But I can tell you we are not sitting still.”

He added that the shipyard’s skilled workforce, union leaders and management are all working toward the same goals. The trick, he said, is getting “everybody lined up and pulling in the same direction at the right time.”

“The culture of the shipyard is one of its greatest strengths,” he said. “I don’t think there is anybody who works there that isn’t interested in doing well or improving, and isn’t fiercely proud of what they do or what they contribute to the end product.”


]]> 0 Iron Works president Dirk Lesko was disappointed that a Coast Guard contract went elsewhere, but says BIW is well-positioned for Navy work.Mon, 23 Jan 2017 07:38:57 +0000
Week in review: Hotel projects booming; paper industry group folds Sun, 22 Jan 2017 09:00:00 +0000 REAL ESTATE & CONSTRUCTION

More hotels in pipeline despite waning demand

Despite a leveling-off of demand for hotel rooms statewide, there are five new hotel projects under construction in Maine and at least three more in the planning stage. The occupancy rate at Maine hotels remained relatively flat in 2016 as the new supply of rooms nearly caught up with demand, said presenters at the Maine Real Estate and Development Association’s annual forecasting conference Thursday in Portland. Still, there is a lot more supply on the way. Three new Maine hotels were completed in 2016, adding 239 rooms to the state’s total supply, according to Mitchell Muroff of Muroff Daigle Hospitality Group in Newton, Massachusetts. They were Hampton Inn in Oxford, Homewood Suites in Augusta and 250 Main in Rockland Harbor. A far greater number of hotel projects are under construction or expected to break ground in 2017 that would add an estimated 650 rooms to Maine’s overall supply. Five hotels are under construction and three more in are the planning phase. If all are built, those eight projects would bring the total number of hotel rooms in Maine to roughly 38,000. Read the story.


Governor proposes aid for bus contract

The LePage administration has proposed funneling $7 million to the Maine Military Authority in Aroostook County to cover huge losses incurred when the state-owned business underbid on a contract. Late last year, Gov. Paul LePage halted work at the Maine Military Authority on a $19 million contract to refurbish 32 aging transit buses for the Massachusetts Bay Transportation Authority in Boston. The work to restore the two-section, articulated buses proved to be much more complicated – and costly – than anticipated, resulting in millions of dollars in losses and eventually layoffs as Maine Military Authority stopped accepting delivery of additional buses. While officials from Maine Military Authority and state government are trying to renegotiate the contract, they are also seeking a $7 million bailout to rehire workers, complete the work and better position the business in the future. The LePage administration has proposed earmarking $7 million from the state’s year-end surplus to a special Maine Military Authority Reserve Fund. Read the story.

 Paper industry trade group disbands

A group that has represented the interests of Maine’s pulp and paper industry for 50 years has folded. In its Jan. 13 newsletter, the Maine Pulp & Paper Association announced that it is disbanding, citing the lack of financial resources to keep it going. The organization was sustained by dues from its members, including the state’s paper mills, logging contractors, equipment providers and others in the paper industry supply chain, all of whom have been affected by the severe downsizing of the industry. In its 2013 filing with the Internal Revenue Service, the organization reported $161,500 in dues. In its 2015 report, that number had shrunk to $17,000. Donna Cassese, the group’s chairwoman, said there was still a need for a unified voice for the pulp and paper industry, and that the group is exploring several alternatives to meet that need. Read the story.


CEI closes on new fund for small businesses

Brunswick-based CEI Ventures said Tuesday that it has closed on its fourth venture capital fund, Coastal Ventures IV, at just under $10 million. It said the new fund will provide needed capital to small businesses in Maine and the Northeast. CEI Ventures, which describes itself as a socially responsible, for-profit venture capital firm, said it is actively investing from two funds with $20 million under management. Coastal Ventures IV, like prior funds, seeks to create quality jobs and promote socially responsible products and services, particularly those that improve the environment. Coastal Ventures IV was capitalized by 17 local and regional banks as well as eight individual investors, according to parent company Coastal Enterprises Inc., which provided an anchor investment of $1.5 million in the new fund. Read the story.


Saint Joseph’s receives $1.5 million from Alfond Foundation to expand nursing programs

Saint Joseph’s College has received a $1.5 million grant from the Harold Alfond Foundation to support the creation of a new academic center in Standish to address critical shortages in Maine’s nursing workforce. According to the foundation, the number of Maine nurses on the verge of retirement is up significantly, with nearly three-fourths nearing retirement age. Meanwhile, demand for home health care, nursing home and hospital workers in Maine is expected to surge through 2024, and industry leaders say they already are facing worker shortages ranging from entry-level caretakers to top administrators. In partnership with the lead investment from the Alfond Foundation, the Saint Joseph’s College Center for Nursing Excellence will respond directly to those needs, the foundation said Tuesday. The grant provides critical funding for expanded nursing simulation labs that will be the cornerstone of the new academic center. Nursing simulation labs are designed to give students hands-on clinical experience through simulated interactions in areas of medicine such as intensive care, pediatrics and maternity. The college intends to use the grant to raise an additional $3.5 million to fully fund the program’s expansion. Read the story.


Hikes for lobster license fees proposed

The Maine Department of Marine Resources wants to raise the price of commercial fishing licenses for the first time in seven years, using the $600,000 the hikes would generate to pay for spending increases while honoring Gov. Paul LePage’s request to keep the department’s budget flat. If approved by the Legislature, the proposed fee increases would range from as little as $1 for a Maine resident to harvest green crabs to as much as $114 for a lobsterman with two sternmen. Under the new fee schedule, which would take effect January 2018, the cost of securing a Class III lobster license would top $1,000 for the first time, hitting $1,002. The fee hike would enable the Department of Marine Resources to hire an additional lobster biologist, outfit its science staff with field technology and pay for Marine Patrol officer raises and ballistics vests, among other things, without increasing the department’s $21.3 million bottom line, a department spokesman said. Read the story.

Sweden expected to pursue lobster ban – again

Sweden isn’t giving up on a long-running battle with the U.S. and Canada over lobsters that have turned up in Swedish waters. Swedish officials told The Associated Press that their country is working on a new proposal about how to deal with American lobsters that have turned up. A controversy about whether American lobsters are invasive in Swedish waters has simmered for almost a year. Sweden had wanted the European Union to consider a ban of imports of American lobsters, but that effort failed after American and Canadian scientists and politicians raised concerns about a lack of evidence that the lobsters warranted such a sweeping ban. But Swedish officials said they are preparing a new proposal on national and regional measures on the American lobster that will be presented for the Swedish government. Read the story.


CEO: Medical and recreational marijuana industries can be complementary

The head of Maine’s largest purveyor of legal medical marijuana said on Wednesday that she supports the regulated, recreational use of marijuana by people over 21 and the creation of a market to satisfy that demand. In November, Maine voters approved a citizen referendum that allows for the creation of a recreational marijuana industry in the state. Last week, state lawmakers began to consider how to implement those new rules. Patricia Rosi, chief executive officer of Wellness Connection of Maine, which runs four of the state’s eight licensed medical marijuana dispensaries, said there are many ways medical and recreational marijuana industries can complement each other. Rosi was invited to speak at a breakfast held by the Kennebec Valley of Chamber of Commerce. For instance, Rosi said recreational access would allow those who feel they need marijuana for a chronic condition not allowed under the current provisions for medical marijuana to obtain it. Read the story.

]]> 0 Lesko, the chief executive at Bath Iron Works, said that the yard has to stay vigilant about controlling costs, but he believes BIW has a good chance to capture more defense contracts to build Arleigh-Burke destroyers like the Rafael Peralta, above, seen last year. The shipyard, the fourth-largest private employer in Maine, would have hired another 1,000 workers if it had won a bid to build a fleet of new Coast Guard cutters awarded to a Florida competitor in September 2016. (Gregory Rec/Staff Photographer)Fri, 20 Jan 2017 18:09:03 +0000
Michelle Singletary: Too much paper? Here’s what to keep Sun, 22 Jan 2017 09:00:00 +0000 We are still a paper nation.

Despite technological advances, we continue to use a lot of paper. And a lot of it is stuffed in closets, file cabinets and shopping bags. And, for some of us, stacked on our floors.

Since Jan. 8, I’ve been encouraging people to participate in my #NoDebtNoMess Color of Money Challenge. It started with assessing the mess both in your home and in your finances. The second week dealt with reducing redundancy, such as paying off and then closing credit card accounts you don’t need.

This week, we are focusing on lightening your load. For me, this means addressing the paper load I’m carrying. I have paystubs from decades ago. I keep receipts and instruction manuals for items I no longer have. This paper has got to go.

But to be sure I keep what I truly need, I asked some professionals to provide advice on what documents should be retained.

Let’s start with tax records. Brent Neiser, a certified financial planner and a senior director at the National Endowment for Financial Education, offered these guidelines:

 Keep tax records up to seven years after the return is filed.

 If you fail to file in any year, or if the IRS has found you filed something fraudulent, you’d better save your records indefinitely.

 Keep business, real estate and investment purchase records until seven years after you’ve sold the asset and included the sale in a tax return.

 Keep your tax returns indefinitely. A return is “a window into you and your family’s economic history,” Neiser said. “It shows the big employment, investment, charitable, spending choices and decisions you made.”

Maintaining years of tax returns can help if you ever need to research payments made into social security, said Michael Eisenberg, a Los Angeles-based certified public accountant and member of the financial literacy commission for the Association of International Certified Professional Accountants.

Save receipts for big-ticket items such as a TV or computer for insurance purposes. Hold on to each receipt as long as you own the item.

Don Grant, a CFP from Wichita, Kansas, gave this advice regarding credit card statements: “It’s nice to see a monthly itemization, but most credit card companies will provide you with a year-end statement that has all expenses categorized. It you’re happy with that, shred [the monthly statements] at the end of the year.”

When it comes to home improvement documents, Kelley Long, a Chicago-based CPA and CFP, says hold on to them at least until you sell.

“If you sell your home for more than $250,000 ($500,000 for married people) more than you originally paid, you will have a taxable gain,” Long said. “You can add the cost of any improvements to the original amount you paid to reduce the amount of the gain.”

On medical bills, she says: “If you paid a medical expense with your health savings or flexible spending account, you need to keep the receipt for three years. Consider it a tax-related document.”

As for investment and real estate records, “there’s some gray area here,” says Long, who is part of AICPA’s consumer advocacy group. “But any investment statements that are available online do not need to also be kept as paper. The most important reason to maintain these records would be to establish your cost basis when selling to make sure you claim the proper capital gain or loss on your tax return.”

There are what Long referred to as “forever documents,” which you should keep in a safe location where they are protected from damage, loss and theft. Such documents, which may be hard or costly to replace, include:

 Birth certificates and adoption papers

 Marriage license and divorce documents


 Death certificates

 Military records

 End-of-year paystubs

 Mortgage, student and car-loan pay-off statements. If you negotiated to pay less on a debt you owed, keep the document proving you paid off that loan.

The NEFE has a noncommercial financial education site where you can find more information about recordkeeping. Go to and search for “How Long Should You Keep Financial Documents.”

All the experts recommended scanning documents to reduce your paper load.

“I have instructed all of my clients to search for a place in the cloud that they feel comfortable storing all of these documents in a password-protected vault,” said Brad Ledwith, a CFP from Silicon Valley. “If they secure storage of files in the cloud, then the questions of how long to keep things are moot.”

Now that I know, I’m ready to let go.

Michelle Singletary can be contacted at:

Twitter: SingletaryM

]]> 0 Fri, 20 Jan 2017 18:06:46 +0000
Waterfront project worth as much as $30 million hinges on Portland zoning change, official says Sat, 21 Jan 2017 09:00:00 +0000 Though not a final design, these sketches show what a proposed Americold warehouse on Portland's eastern waterfront might look like. The top image depicts a view from Beach Street and the bottom shows what it could look like from Commercial Street.

Though not a final design, these sketches show what a proposed Americold warehouse on Portland’s western waterfront might look like. The top image depicts a view from Beach Street and the bottom shows what it could look like from Commercial Street. Courtesy renderings by Canal 5 Studio

The world’s largest cold-storage company will most likely walk away from its proposal to invest up to $30 million in Portland’s western waterfront unless city officials allow it to build a massive warehouse that would exceed the current height limit by nearly 25 feet, an economic development official said Friday.

The Portland Planning Board will hold a workshop Tuesday to learn more details about a request by cold-storage provider Americold Logistics LLC to build a 68-foot-tall cold-storage warehouse on the city’s western waterfront, on property zoned for buildings no taller than 45 feet.

“The workshop is about a zoning language change that’s being considered by the city,” said John Henshaw, executive director of the Maine Port Authority, an economic development group focused on the marine industry that supports the zoning change. “Without the zoning change, there likely will not be a project.”

Americold representatives did not return calls seeking comment Friday.

The Atlanta-based company was chosen through a competitive bidding process to build a modern refrigerated warehouse on the Portland waterfront, providing the port with a critical missing element to compete with larger, more congested ports on the Eastern Seaboard.

However, Americold has since asked the city to let it build a structure that would be 23 feet higher than current zoning allows, arguing that the added height is necessary to make the project financially viable. The request has proven wildly unpopular with area residents, who say the hulking Americold structure would defile the ocean landscape for those passing through the city’s gateway to Casco Bay.

Portland officials have published dozens of letters from residents opposing the zoning change, along with a lesser number expressing support. Tuesday’s meeting, scheduled for 4:30 p.m. at Portland City Hall, will be informational in nature and will not involve a vote on the proposed change to the property’s height restrictions.

After the workshop, the planning board will hold a public hearing and make a recommendation on the zoning request to the City Council, which will have the final say. If the rezoning is approved, the state would lease a 6.3-acre site to Americold, which would design the warehouse, fund its construction and operate it. The total estimated amount of Americold’s investment would be $19 million to $30 million. The project is part of a state-led effort to make the port more competitive with other ports and boost Maine’s seafood, agriculture and food and beverage industries.

This rendering show what the cold-storage facility would look like from the air.

This rendering shows what the cold-storage facility would look like from the air.

The Maine Port Authority announced in August 2015 that Americold had won the bid to develop the site, located adjacent to the expanded International Marine Terminal on West Commercial Street.

Americold already operates a 65-year-old cold-storage warehouse on Read Street in Portland. It is partnering on the waterfront project with Eimskip, the Icelandic shipping company that made Portland its North American headquarters in 2013. Eimskip would be both an investor and an anchor tenant.

Americold submitted a set of renderings to the city, published Friday, that give a general sense of what the project would look like and how it would fit in with the surrounding area. Henshaw said the company hopes the renderings will allay some of the board’s – and residents’ – potential concerns.

“The purpose of submitting the renderings is hopefully to make people more confident about what will ultimately get built if the city approves the zoning change,” he said.

Bill Needelman, waterfront director for Portland’s economic development department, said economic development officials are expected to present their case Tuesday for why the relaxing of height restrictions for Americold would benefit Portland and the state.

The city could go a number of ways with respect to the company’s request, he said. It could deny the maximum height change altogether, make it applicable only to the Americold property, or relax height restrictions for all properties along the waterfront.

“Zoning can be applied broadly or narrowly,” Needelman said.

Many Portland residents have expressed vehement opposition to the zoning change, characterizing the entire affair as a bait-and-switch, since there was no mention of the possibility of raising height restrictions when the cold-storage project was originally proposed.

“About 60 residents attended the city-sponsored neighborhood meeting on Nov. 3 to speak in opposition to the proposed 70-foot rezoning, including some who don’t live in the West End but who feel strongly that a huge, out-of-scale white box has no place on Portland’s waterfront,” resident Jo Coyne wrote in a letter to the planning board. “Residents clearly want the city to achieve a better balance between economic development and existing neighborhoods than what’s on the table.”

But others, including a number of businesses, said they support the height change because of the economic benefits Americold’s project would deliver to the waterfront.

“We must strive to adapt to the shipping marketplace, or, as so many other ports, wither,” said William York, president of the Propeller Club of Portland, a maritime industry group whose members are dedicated to promoting commerce in the Port of Portland. “The proposed modest and logical alteration in allowable building height … will allow private capital to build a much-needed port facility, a facility which will improve opportunities for businesses far inland, and which will allow the Port of Portland to continue to be a powerful driver of the regional economy.”

J. Craig Anderson can be contacted at 791-6390 or at:

Twitter: @jcraiganderson

]]> 0, 21 Jan 2017 00:47:18 +0000
China’s economic growth sinks to three-decade low Sat, 21 Jan 2017 04:02:32 +0000 BEIJING — China’s economic growth sank to a three-decade low in 2016 as its struggling exporters brace for a possible trade battle with President Trump.

Growth in the quarter ending in December ticked up to 6.8 percent over 2015, supported by government spending and a real estate boom, a gain from the previous quarter’s 6.7 percent, government data showed Friday. Still, for the full year, growth came in at a lackluster 6.7 percent, down from 6.9 percent in 2015 and the weakest since 1990’s 3.9 percent.

That temporary upturn is unlikely to last, economists said.

“We expect clearer signs of a renewed slowdown to emerge during the next couple of quarters,” Julian Evans-Pritchard of Capital Economics said in a report.

Trump’s promise to raise tariffs on Chinese goods after taking office Friday has fueled tension with Chinese leaders who are trying to keep growth on track while they overhaul a state-dominated economy.

Beijing wants to nurture more self-sustaining growth based on domestic consumption but trade still supports millions of jobs. Exports fell 7.7 percent last year and more losses could lead to a politically dangerous spike in layoffs.

In a rebuke to Trump, President Xi Jinping warned in a speech this week that a “trade war” would harm everyone involved. The American Chamber of Commerce in China said Beijing is preparing to retaliate if Trump acts.

“I am hopeful that after his election, President Trump will consider the issue from the angle of mutual benefit and win-win and will develop the long-term, cooperative ‘big country’ relations that have been formed between China and the United States,” a member of the Cabinet’s planning commission, Ning Jizhe, told a news conference.

Asked about the potential impact of action by Trump, Ning said China should maintain “medium to high-speed growth.”

Chinese leaders already face warnings that their reliance on infusions of credit to shore up growth since the 2008 global crisis has driven debt to dangerously high levels that might drag on the economy.

Beijing has warned the economic outlook is “L-shaped,” meaning once the downturn ends, growth is unlikely to rebound.

Also weighing on growth, Chinese leaders are in the midst of a multi-year effort to reduce excess production capacity in steel, coal and other industries in which supply exceeds demand. The glut of low-cost Chinese exports of steel and aluminum have fueled trade tensions with Washington and Europe, which say they are threatening thousands of jobs.

Auto sales also are forecast to weaken. Sales in the world’s biggest auto market rose 15 percent last year but that was supported by a tax cut that expired Dec. 31. Analysts expect this year’s growth to slow to mid-single digits.

Looking at quarter-on-quarter growth, the way other major economies report data, the economy cooled steadily over the course of the year despite the headline figure showing steady expansion. Growth fell to 1.7 percent in the last quarter, down from 1.8 percent in July-September and 1.9 percent in the previous quarter.

Chinese leaders say they will make the economy more productive by giving private companies a bigger role, but last year’s performance still relied on spending by the government and state-owned industry.

Investment by government companies in factories and other fixed assets rose 18.7 percent last year over 2015, according to the National Bureau of Statistics. Investment by private companies was far weaker, growing 3.2 percent.

Real estate sales are booming, which has pushed up growth figures. But regulators are taking steps to cool surging housing prices and bank lending.

Retail sales growth decelerated to 9.6 percent from 10.6 percent in 2015. E-commerce, one of the brightest spots in the struggling economy, soared 26.2 percent over 2015, but that was down from the previous year’s 33.3 percent expansion.

Real estate sales that soared 22 percent in 2016 by volume also are forecast to cool. Growth of investment in real estate might slow to 1 percent from last year’s 6.6 percent, said Haibin Zhu of JP Morgan in a report.

Total debt has risen by the equivalent of 130 percentage points of annual economic output since the 2008 global crisis, “a pace that has alarmed policy makers and many investors,” UBS economists said in a report.

Still, action on debt is unlikely until after the ruling Communist Party wraps up a twice-a-decade change of senior officials late this year, Tom Rafferty of the Economist Intelligence Unit said in a report.

“It will probably not be until 2018, when politics are more favorably aligned, that we begin to see a more radical approach in this area,” he said.

]]> 0 a rebuke to Trump, President Xi Jinping warned in a speech this week that a "trade war" would harm everyone involved. The American Chamber of Commerce in China said Beijing is preparing to retaliate if Trump acts.Sat, 21 Jan 2017 00:56:34 +0000
Big oil could finally get to drill in the Arctic Sat, 21 Jan 2017 03:32:09 +0000 Far above the Arctic Circle, one of the longest-running controversies in U.S. oil drilling is about to reignite.

Bouyed by Donald Trump’s election, Republicans are pushing to allow oil exploration in the Arctic National Wildlife Refuge, the frigid wilderness in northern Alaska that’s been a political battleground for drillers and conservationists for decades. The prospects for industry look better than they have in years, with Republicans in control of Congress and Trump vowing to boost U.S. energy production.

There’s just one catch. No one really knows how much oil actually lies beneath the refuge, or how much producers like ExxonMobil and ConocoPhillips care about it in a world awash in cheap oil, from Texas shale to offshore Africa. While the government estimates the area could hold 12 billion barrels of crude, making it one of the biggest untapped reserves in the U.S., no one’s sunk a well there since the 1980s.

“Its value is hard to gauge because it’s always been a bit theoretical,” said Andrew Slaughter, executive director of the Deloitte Center for Energy Solutions in Houston. “No administration has really wanted to take on the challenge of going for ANWR.”

That may be about to change. The aging Trans Alaska Pipeline, once the symbol of energy independence for an oil-strapped nation, is now on the verge of obsolescence. The 800-mile system links northern Alaska to the rest of the world, but its output has been falling as fields outside the refuge fade out and supplies from shale oil in the lower states grow.

While it may take a decade for ANWR to start producing oil, the new supply would go a long way toward ensuring the survival of the pipeline and the jobs that go with it, according to U.S. Sens. Lisa Murkowski and Dan Sullivan. The two Alaska Republicans introduced legislation this month to allow development of as many as 2,000 acres in the refuge.

“For nearly 40 years, Alaskans have proven that we can responsibly develop our natural resources while protecting the environment,” Murkowski said in a Jan. 5 statement. State residents, moreover, “overwhelmingly support responsible development” of the refuge.

Created by Congress in 1980, the refuge provides a critical habitat and breeding ground for polar bears, wolves, migratory birds and caribou, among other species. It covers 19 million acres in northeastern Alaska, stretching from the mountains of the Brooks Range and boreal forests to a vast, snowy coastal plain that slides into the Arctic Ocean.

Yet from the moment it was created, ANWR has been coveted for its untapped oil. The refuge was set aside even as the U.S. ramped up production in the North Slope, in response to the shock of oil embargoes in the 1970s.

Just how rich the prize is remains to be seen. A 2005 review by the U.S. Geological Survey, based on decades-old data, said ANWR may hold as many as 11.8 billion barrels of crude. If that were proven true, it would rival the mammoth Prudhoe Bay field that sparked the Alaskan oil rush 40 years ago, the kind of elephant-sized find that would generate income for decades. That could appeal to companies looking to balance the short lifespans of shale fields and the risks of operating in more politically fraught parts of the globe.

]]> 0 grizzly bear prowls the tundra of the Arctic National Wildlife Refuge in 1986. The far-north refuge has been a hot topic for decades even though its output potential has not been accurately measured.Sat, 21 Jan 2017 00:57:36 +0000
New twist in spilled Skittles case probed Sat, 21 Jan 2017 03:20:25 +0000 NEW YORK — A mysterious Skittles spill on a rural highway in Wisconsin is taking another twist, with Mars Inc. saying it doesn’t know why the discarded candy might have been headed to become cattle feed.

The case began when a Wisconsin sheriff posted on Facebook this week that “hundreds of thousands of Skittles” had been found spilled on a highway. Later, he updated the post to say the candy had fallen off a truck on its way to be cattle feed.

Only red Skittles had spilled out, and Dodge County Sheriff Dale Schmidt joked in the post that it would be difficult to “Taste the Rainbow” in its entirety. The incident gained attention after CNN wrote about it, citing a report from a local affiliate.

A variety of food byproducts are commonly used for animal feed, and Mars says it has procedures for discarding foods for that purpose. However, the company says the Skittles in question came from a factory that doesn’t sell unused products for feed.

“We don’t know how it ended up as it did and we are investigating,” Mars said.

Schmidt said one of his deputies came across the spill and sent him photos, which he posted on Facebook. He said the Skittles spilled from a box that started to disintegrate in the rain, and about half of them got out. The Skittles on the ground did not have the standard letter “S” on them, he said.

The sheriff said he spoke with the farmer, but declined to immediately give the farmer’s name and did not respond when asked by email how the office connected the Skittles with the farmer.

Mars spokeswoman Denise Young said the Skittles were supposed to be destroyed because a power outage prevented the signature “S” from being placed on the candies. She said Mars planned to contact the sheriff’s office and the farmer to find out more.

Linda Kurtz, a corporate environmental manager at Mars, said the company sells unused candies and ingredients to processors that incorporate them with other materials to make animal feed. She said Mars does not sell directly to farmers, and its procedures follow Food and Drug Administration regulations.

Kurtz said Mars determined the spilled Skittles came from its plant in Yorkville, Illinois, which does not sell products for animal feed. The other U.S. plant that makes Skittles, in Waco, Texas, sells to a local processor that melts them down into syrup.

Josh Cribbs, a cattle nutritionist and director of commercial development for the American Maine-Anjou Association, which promotes a particular cattle breed, said specific byproducts would be mixed with other ingredients.”You might think, ‘Oh my gosh, they might be eating a Skittle.’ In reality, that piece of candy is being broken down,” he said.

]]> 0, 20 Jan 2017 22:20:25 +0000
Backyard Farms names new chief for tomato growing Fri, 20 Jan 2017 23:40:33 +0000 MADISON — Backyard Farms has named a new head grower to oversee the company’s 42-acre greenhouse operation.

Tony Stevens will be in charge of the tomato growing operation in Madison. He has 18 years of greenhouse growing experience, according to a news release from the company.

Backyard Farms also is marking 10 years of operation in Madison and is launching a website – – to highlight the company’s history with its first shipment to a Hannaford supermarket, and to offer recipes and tips.

“The head grower position is an important, highly visible role in our greenhouse and a critical component of our leadership team,” Backyard Farms President Stuart Jablon said in a prepared statement. “In addition to his proven track record of excellence and productivity, Tony shares our company values and understands our vision to be the most trusted brand in America. I’m confident in his ability to manage and develop our people as well as our crop and I look forward to seeing our company gain from his considerable experience and fresh perspective.”

Stevens was most recently a senior grower with Windset Farms in Santa Maria, California. He also held senior leadership positions at other commercial greenhouses, including hydroponic tomato producer Colorado Greenhouse, Eurofresh Farms and Nature Sweet Farms, according to the release.

“I’m excited to have been entrusted to maintain Backyard Farms’ reputation for excellence while exploring new ways to make our greenhouse as efficient and productive as possible,” Stevens said in a statement. “I truly admire the company-wide commitment to quality and taste.”

Stevens has a bachelor’s degree in agricultural economics and agriculture business from the University of Wyoming. In 2005, he was recognized by Vortus Consulting as the top grower in North America.

Backyard Farms, which is the largest commercial grower of year-round tomatoes in New England, produces 25 million to 30 million pounds of tomatoes annually from about 600,000 plants. It’s also the largest employer in Madison, with about 200 employees.

The company has faced obstacles along the way, including several months in 2013 when a whitefly infestation forced the greenhouse to cease operations and furlough employees.

Backyard Farms’ greenhouses are hydroponic, which means that nutrients are distributed to plants through a water-based system in which they grow. The greenhouses are kept at 69 to 72 degrees during the day and about 10 degrees cooler at night.

The company grows several varieties of tomatoes that are sent to stores including Hannaford, Whole Foods, Wal-Mart and Shaw’s.

]]> 0 StevensFri, 20 Jan 2017 23:02:34 +0000
Down East salmon also served during inauguration Fri, 20 Jan 2017 19:27:10 +0000 Maine lobster wasn’t the only Pine Tree State delicacy consumed by revelers at the inauguration of Donald Trump.

Farm-raised salmon from Eastport also made the menu.

Atlantic salmon raised at the Cooke Aquaculture farm in Eastport were hand selected and shipped to Washington, D.C., where they were smoked and served Thursday by the executive chef of the Blair House where Trump spent the night before his inauguration, according to a news release from the Maine Aquaculture Association.

“To have farmed salmon that were raised in the state of Maine served to President Trump, Gov. LePage and to those celebrating today’s inauguration, is a real honor and affirmation of our healthy, high-quality, sustainably produced farmed seafood,” said Sebastian Belle, the association’s executive director.

Cooke, which is based in New Brunswick, employs approximately 250 people in Down East Maine in its salmon farming operations.

Maine lobster was on the menu for lunch Friday following the swearing-in of the nation’s new president.

]]> 0 Fri, 20 Jan 2017 20:52:08 +0000
Dead River sells South Portland office building to New York investor Fri, 20 Jan 2017 18:26:29 +0000 A 114,000-square-foot office building in South Portland valued by the City Assessor’s Office at $15.8 million has been sold to a New York real estate investment firm for an undisclosed price, according to a broker involved in the transaction.

According to CBRE|The Boulos Co. in Portland, property owner Dead River Co. sold the building to Time Management Corp., a New York-based corporation with other holdings in Maine. Existing tenants in the building include Dead River and ON Semiconductor, formerly Fairchild Semiconductor International.

The sale transaction for the four-story “class A” office building at 82 Running Hill Road was completed Wednesday, according to Boulos, which represented the seller. NAI The Dunham Group in Portland represented the buyer.

The building, which sits on about 12.4 acres, was developed in 1987 by Joe Boulos for Unum Group. In 2006, Boulos sold the property for $15 million to Dead River Co., which has owned and managed it ever since. While Boulos would not disclose the sale price, the South Portland Assessor’s Office valued the property at $15.8 million in 2016 for tax purposes.

82 RHR

Charles Day, a broker at The Boulos Co., says the building’s location and amenities made it a “prime investment target.” CBRE | The Boulos Company

Boulos said in a news release that it began marketing the property on behalf of its owners last summer. It said the offering was well-received in the marketplace.

“We had interest from buyers throughout the United States,” said Charles Day, a broker at Boulos. “This building is well-maintained and offers great amenities. Add to that its ideal location, and it’s a prime investment target.”

According to Boulos, the overall vacancy rate across the Maine Mall area’s 1.7 million square feet of prime office space sits at a healthy 3.4 percent. According to a presentation on office space made at the annual Maine Real Estate and Development Association conference Thursday, the vacancy rate for mall-area office buildings was about 11 percent in 2014.

J. Craig Anderson can be contacted at 791-6390 or at:

Twitter: @jcraiganderson

]]> 0, 21 Jan 2017 00:07:10 +0000
Maine blueberry processor, EPA reach settlement over handling of chemical Fri, 20 Jan 2017 15:10:18 +0000 BOSTON — Hancock Foods has agreed to pay a $103,613 settlement to resolve federal concerns over its handling of a chemical used in refrigeration.

The settlement agreed upon by the company and the Environmental Protection Agency resolves questions surrounding the blueberry processor’s handling of anhydrous ammonia and its failure to timely report a release of the chemical.

Anhydrous ammonia, which is used in refrigeration, is flammable, and potentially explosive, in some situations. It’s also corrosive to the skin, eye and lungs.

The company didn’t immediately respond to a request for comment.

The EPA says the case is one of many brought to improve safety at companies that have industrial refrigeration systems.

]]> 0, 20 Jan 2017 10:19:36 +0000
Right-to-work proposal clears N.H. state Senate Fri, 20 Jan 2017 02:26:27 +0000 CONCORD, N.H. — Right-to-work legislation that targets unions cleared an early hurdle Thursday in the New Hampshire legislature, winning approval from the state Senate.

The bill would bar unions from requiring nonmembers to pay dues or fees. Supporters describe the measure as pro-worker and pro-business, while opponents say it will weaken unions and their collective bargaining power.

“Unions are good for New Hampshire; they’re good for the people,” Democratic Sen. Lou D’Allesandro said in a passionate speech opposing the bill.

Senators also passed a bill removing the licensing requirement to carry a concealed gun. The same bill passed last session but was vetoed by then-Gov. Maggie Hassan, a Democrat. This year, it’s likely to pass the House and be signed by Republican Gov. Chris Sununu. It would mean anyone who can legally own a gun can carry it concealed.

Right to work is a perennial issue at the Statehouse and has, historically, struggled to pass even Republican-led chambers. But supporters see a fresh opportunity this year with Sununu in office. A national push by outside organizations is underway to pass similar bills in other Republican-led states.

Several senators noted the repetitive nature of the debate. Republican Sen. Andy Sanborn compared being a right-to-work supporter to Boston Red Sox fans who waited years for a World Series victory. Democratic Sen. Donna Soucy said the debate felt like the movie “Groundhog Day.”

“We’ve had this debate over and over again,” she said. “And yet I’m fascinated to this day, people still ask, ‘Well, what does right to work mean?”‘

Federal statistics show about 9.4 percent of New Hampshire residents are union members. Public employees such as teachers and state workers make up the bulk of them.

Many, but not all, unions charge “agency fees” to nonmembers for the costs of representation and other collective bargaining benefits. If the bill passes, it would ban that practice.

Passing the bill would be one tool to help New Hampshire attract more jobs and businesses, Republican Senate Majority Leader Jeb Bradley said. He challenged opponents who said lawmakers should instead focus on lowering energy costs and training workers for available jobs.

“To reject right to work because we think we should be focusing on something else totally misses the ball,” he said.

Democrats pointed out that no companies have publicly declared they will move to New Hampshire if the bill passes.

Seven senators declared conflicts of interest related to the bill, such as union membership or serving on city councils or town selectboards, but still cast votes, some for and some against. Democratic Sen. Scott McGilvray is the president of the National Education Association, the state’s largest union.

]]> 0 Thu, 19 Jan 2017 21:26:27 +0000
Western Union agrees to pay $586 million for fraud victims Fri, 20 Jan 2017 01:59:28 +0000 NEW YORK — Western Union has agreed to pay $586 million to the U.S. government to pay back victims of fraud that the money transfer company failed to protect.

The government said Thursday that Western Union did not have a strong enough anti-fraud program, allowing scammers to use its money-transfer services to rip off customers.

In one such scam, fraudsters would contact people to trick them into thinking they won a foreign lottery and asked them to send money through Western Union to retrieve their prize.

The Federal Trade Commission said that Western Union received more than 550,000 complaints between 2004 and 2015 about scam-related money transfers that totaled more than $630 million. The FTC said it believes even more people were victimized, since many may not complain directly to Western Union.

As part of the agreement reached with the FTC and the Department of Justice, Western Union also agreed to put in place and maintain an anti-fraud program and properly train its staff to identify potential fraud.

Shares of Englewood, Colorado-based Western Union Co. fell 72 cents, or 3.3 percent, to close at $21.13 Thursday.

]]> 0 Thu, 19 Jan 2017 20:59:28 +0000
Tesla avoids recall in crash involving Autopilot Fri, 20 Jan 2017 01:50:51 +0000 WASHINGTON — U.S. safety regulators have closed an investigation into a fatal crash involving electric car maker Tesla Motors’ Autopilot system without seeking a recall, but they criticized the way the company markets the semi-autonomous driving feature.

The National Highway Traffic Safety Administration found that the system had no safety defects at the time of the May 7 crash in Florida, and that it was primarily designed to prevent rear-end collisions, spokesman Bryan Thomas said Thursday. Investigators also reviewed a crash on the Pennsylvania Turnpike in which two people were injured, as well as dozens of other crashes involving Autopilot in which air bags were deployed, Thomas said.

Tesla won’t be fined, but the agency criticized Tesla for calling the system Autopilot.

The probe began June 28, nearly two months after a driver using Autopilot in a Tesla Model S died when it failed to spot a tractor-trailer crossing the car’s path on a highway in Williston, Florida, near Gainesville.

Tesla’s Autopilot system uses cameras, radar and computers to detect objects and automatically brake if the car is about to hit something. It also can steer the car to keep it centered in its lane. The company said that before Autopilot can be used, drivers must acknowledge that it’s an “assist feature” that requires both hands on the wheel at all times. Drivers also must be prepared to take over at any time, Tesla has said.

The lack of a recall is good news for Tesla because the agency is either blaming the crash on human error or it doesn’t see the recall as necessary because Tesla software updates have already addressed the problem, said Karl Brauer, executive publisher of Kelley Blue Book. “Either one reflects well on Tesla,” he said.

But the agency’s findings are likely to influence how automakers market semi-autonomous systems. Just about every auto company has or is working on similar systems as they move toward self-driving cars.

The May 7 crash killed former Navy Seal Joshua Brown, 40, of Canton, Ohio. Tesla, which collects data from its cars via the internet, said at the time that the cameras on Brown’s Model S sedan failed to distinguish the white side of a turning tractor-trailer from a brightly lit sky and that neither the car nor Brown applied the brakes.

The closure of the investigation without a recall “helps clarify that cars are still supposed to be driven by attentive people, and if people behind the wheel aren’t attentive, it’s not the technology’s fault,” Brauer said. That will help avoid the stigma that the technology causes accidents, he said.

Thomas highlighted two conclusions from the investigation. First, that advanced automated driving systems still require “continual and full attention of a driver” who should be prepared to take action. And second, that manufacturers need to pay attention to how drivers actually use the technology, not just how they’re supposed to use it, and to design their vehicles “with the inattentive driver in mind.”

Tesla said in a statement that it appreciated NHTSA’s thoroughness in reaching its conclusion.

In July, investigators asked Tesla for information on how Autopilot works at intersections with crossing traffic. They also asked Tesla to describe how the system detects “compromised or degraded” signals from cameras and other sensors and how such problems are communicated to drivers.

When Tesla released Autopilot in the fall of 2015, some safety advocates questioned whether the Palo Alto, California-based company and NHTSA allowed the public access to the system before testing was finished. The company acknowledged “beta testing” the system on cars driving on public roads.

Consumer Reports magazine called on Tesla to drop the “Autopilot” name because it can give drivers too much trust in their car’s ability to drive itself. The influential magazine urged Tesla to disconnect the automatic steering system until it’s updated to make sure a driver’s hands stay on the wheel at all times.

In September, Tesla updated Autopilot software to rely more on radar sensors and less on cameras. The update also disabled the automatic steering if drivers don’t keep both hands on the wheel.

]]> 0 Navy Seal Joshua Brown, 40, of Canton, Ohio, was killed last May in Florida when this Tesla Model S crashed into a turning tractor-trailer while in self-driving mode.Thu, 19 Jan 2017 21:09:22 +0000
Starbucks latest to expand parental leave benefits Fri, 20 Jan 2017 01:45:02 +0000 NEW YORK — Starbucks is telling employees that it’s expanding their parental leave benefits.

The move comes as companies are trying to retain workers given low unemployment rates. Overall, paid maternity and paternity leave in the United States lags behind standards elsewhere. Federal law requires only unpaid leave for the birth or adoption of a child, but companies including Netflix, Adobe and Microsoft have recently increased their benefits.

In a note to employees Thursday, Starbucks Corp. said birth moms will be eligible for six weeks of paid leave at 100 percent of their average pay starting Oct. 1. Previously, they were given six weeks of leave at 67 percent of average pay.

Employees who work an average of 20 or more hours a week are eligible for benefits.

Spokeswoman Jaime Riley said Starbucks has 160,000 employees in the U.S. That includes district managers and other employees who work outside its stores. Among those employees, birth moms will be eligible for 18 weeks of leave paid at 100 percent of average pay. They were previously given six weeks of leave at 67 percent of pay.

Riley said the Seattle company does not disclose how many store-level employees work an average of 20 hours a week and are eligible for benefits.

Last month, Ikea’s U.S. division said it would offer employees up to four months of paid parental leave. For employees of more than a year up to three months, at full base pay for the first six weeks and 50 percent after that.

]]> 0 Thu, 19 Jan 2017 20:45:02 +0000
Trump souvenir vendors cash in Fri, 20 Jan 2017 01:34:25 +0000 WASHINGTON — There are Donald Trump-shaped cookie cutters, “Drain the swamp” sweatshirts and candles meant to smell like the new president – a combination of “all of the classiest smells,” according to the product’s description.

Keep searching among the Trump-inspired flasks, paperweights and peppermints and you’ll find coffee mugs that say “Build that wall” and a penny stamped with “Trump” selling for $2.75.

Online shops, street vendors and high-end boutiques around town say they spent weeks preparing for Friday’s inauguration with equal parts sincerity and snark in hopes of cashing in on fans and foes of the next president.

At Chocolate Moose, a novelty gift shop a half-mile from the White House, shelves were lined with Trump whoopee cushions and chocolate miniatures of the Capitol. The Trump mask, a Halloween favorite, was back in stock.

“Up to now, absolutely, it’s been all about the gag stuff,” said Michele Cosby, the store’s owner.

The best-selling item? Toilet paper emblazoned with Trump’s face

“We sold cases upon cases of it,” Cosby said. “And at $12 a roll, it wasn’t cheap.” (But, she added, she stopped selling the popular item once Trump became president-elect: “We didn’t want to cross the line.”)

At the Great Republic, which had inauguration pop-up shops at the St. Regis and Mandarin Oriental hotels in Washington, revelers could pick up pens made of wood from the White House and hand-painted with portraits of Trump for $1,950 each.

Over in Georgetown, local jeweler Ann Hand had sold nearly 1,000 inaugural pins bearing Trump’s name and a slew of pavé stones. She was also selling inaugural cuff links, charm bracelets and a limited number of mother-of-pearl pins with Swarovski crystals for $250.

“We were astounded by the reaction that we got,” Hand said. “All these inaugurals seem to take on a life of their own – there are those who love their candidate and those who don’t.”

Jim Warlick, owner of White House Gifts, said he spent months buying $100,000 worth of items for the inauguration. There was just one problem: He had projected the wrong winner.

“So here we were, the day after the election, with a store full of Hillary T-shirts, mugs, wineglasses, you name it,” he said. “We didn’t have a single Trump item.”

Since then, he has amassed a collection of Trump merchandise, some serious, some silly, such as sunglasses that come with a mop of hair glued to the top. (He continues to sell the Clinton items, which last week were marked down about 15 percent.)

“It’s been a very tough inaugural to buy for,” said Warlick, who began selling inauguration-related items in 1981. “Usually we only do pro-presidential items, but this time we also have ‘resistance products’ because people are so divided.”

A search for “Trump” on the crafts site Etsy turned up more than 18,000 results for T-shirts, bracelets, dolls and bumper stickers celebrating his win and bemoaning it. “Ask me about my feminist agenda,” says a sweatshirt selling for $24.90. There were pins that say “Deplorable lives matter” and handmade bracelets stamped with “Love trumps hate.”

Meanwhile, the official inauguration shop funded by the Trump Make America Great Again Committee was selling sweatshirts bearing the inaugural seal ($55), Trump koozies ($20 for six) and red cap ornaments that say “Make America Great Again,” complete with 24-karat gold accents ($99).

But on Washington streets, vendors said they just hadn’t seen as much demand this year for president-related mugs, T-shirts, shot glasses and key chains as they as they did ahead of previous inaugurations. In a town where 91 percent of residents voted for Clinton, they said it has been difficult to sell Trump-related merchandise.

“We’re all dealing with the same dilemma: What quantity of shirts do we get?” said a vendor with a booth at Connecticut Avenue and K Street NW who declined to give his name. “. . . We cannot afford to get stuck with all this Trump stuff. People in Washington resent the fact that we even carry these shirts.”

Warlick said he expects to sell inauguration-related items through May. For now, a line of Michelle Obama merchandise continues to outsell both his Trump and Clinton inaugural lines.

“Sales have been nowhere near what they were with Clinton and Obama,” Warlick said, adding that he expects to sell about one-third the Trump merchandise as he did for Obama back in 2009. “Obama’s first inaugural was – to use Trump’s own words – yuge.”

]]> 0 vendor waits for customers to buy his wares near the Washington Monument in Washington on Thursday, ahead of Friday's presidential inauguration ceremony for Donald Trump.Thu, 19 Jan 2017 20:51:29 +0000
Markets wipe out all gains for 2017 Fri, 20 Jan 2017 01:14:44 +0000 NEW YORK — The Dow Jones industrial average erased its gains for 2017 on Thursday as it fell for the fifth day in a row, part of a pullback for stock indexes as Treasury yields continued their upward march.

Losses were widespread, with three stocks falling on the New York Stock Exchange for every one that rose. Utilities, real-estate investment trusts and others that pay big dividends were among the hardest hit because their payouts look less attractive when bond yields are rising. Small company stocks took outsize losses.

The Dow fell 72.23 points, or 0.4 percent, to 19,732.40, slightly lower than where it finished in 2016. Still, it’s not far from its record closing high of 19,974.62, set one month ago.

The Standard & Poor’s 500 index slid 8.20 points, or 0.4 percent, to 2,263.69. The Nasdaq composite gave up 15.57 points, or 0.3 percent, to 5,540.08.

The Russell 2000, which tracks smaller companies, lost 12.81 points, or 0.9 percent, to 1,345.74. The Russell, which surged after the presidential election and finished last year with a gain of almost 20 percent, also turned lower for the year.

Stocks have slowed in January following an electrifying jump higher since Election Day as investors wait to see what a Donald Trump presidency will really mean for stocks. They’ve already seen the optimistic case, as shown in the 6-percent jump for the S&P 500 after Trump’s surprise election victory, propelled by expectations for lower taxes and less regulation on businesses.

But on the possible downside, increased tariffs or trade restrictions could mean drops in profits for big U.S. companies.

“The stock market seems to be perched like a tightrope walker, balanced on the center, but there are a couple hundred-pound weights on each end of the balancing pole,” said Rich Weiss, senior portfolio manager at American Century Investments.

Even with all the uncertainties, the market has remained relatively calm. The S&P 500 hasn’t swung by 1 percent, either up or down, since early December. And the VIX index, which market pros use to gauge how nervous investors are, is still about 50 percent lower than where it was a year ago.

Weiss calls that “irrational complacency.”

Bond yields continued their march higher after more economic reports joined the recently growing pile of encouraging data. The 10-year Treasury yield rose to 2.47 percent from 2.43 percent late Wednesday.

Yields have generally been climbing since Election Day on expectations that Trump’s policies will spur more inflation and economic growth.

The 10-year yield is still below its recent high of just over 2.60 percent reached in mid-December, but it’s also well above the 2.09 percent level it was at a year ago. Last July it went as low as 1.36 percent.

One of Thursday’s reports showed that the number of workers seeking unemployment claims fell last week to its lowest level in more than 43 years, a sign that corporate layoffs are subsiding. Another report showed that homebuilders broke ground on more new homes in December, capping a solid 2016 for the industry.

A stronger economy could sway the Federal Reserve to raise interest rates more quickly. It has raised rates twice since 2015 after keeping them at record lows near zero since 2008.

Higher yields may also lure income investors back to bonds and away from high-dividend stocks. That hurts real-estate investment trusts and utilities, which pay some of the biggest dividends among publicly traded companies. Those sectors fell more than the rest of the market.

Banks and energy companies, which climbed following the election, also traded lower.

Industrial stocks were among the few stocks that did well as railroad operators surged. CSX led the way with a jump of $8.63, or 23.4 percent, to $45.51. That was its best day since 1980. An activist investor is reportedly teaming up with the executive who turned around Canadian Pacific Railway to target CSX. Union Pacific rose $2.47, or 2.4 percent, to $106.24 after it reported stronger fourth-quarter earnings than expected.

Netflix jumped $5.15, or 3.9 percent, to $138.41 after the video-streaming service reported higher fourth-quarter earnings than analysts expected and strong subscriber growth.

The dollar was mixed against its major rivals. It rose to 114.80 Japanese yen from 113.74 late Wednesday, and the euro dipped to $1.0659. But the British pound rose to $1.2337 from $1.2284.

Benchmark U.S. crude oil rose 29 cents to close at $51.37 a barrel. Brent crude, the international standard, rose 24 cents to $54.16.

In other energy trading, wholesale gasoline lost 1 cent to $1.53 a gallon and heating oil rose 1 cent to $1.62 a gallon. Natural gas rose 7 cents to $3.37 per 1,000 cubic feet.

Gold dropped $10.60 to settle at $1,201.50 an ounce, silver fell 27 cents to $17 an ounce and copper was virtually flat at $2.61 a pound.

The German DAX was virtually flat, the French CAC 40 fell 0.3 percent and the FTSE 100 lost 0.5 percent in London. The Japanese Nikkei 225 index rose 0.9 percent, South Korea’s Kospi rose 0.1 percent and Hong Kong’s Hang Seng fell 0.2 percent.

]]> 0 Thu, 19 Jan 2017 20:14:44 +0000
Job growth, low unemployment create need for more Portland-area office space Thu, 19 Jan 2017 20:45:00 +0000 Job growth and rock-bottom unemployment in southern Maine kept office vacancies low in 2016 and created pent-up demand for more premium office space in downtown Portland, according to presenters at the annual Maine Real Estate and Development Association conference Thursday.

“After several years of little to no new product added, we are finally seeing new construction on Middle Street in downtown Portland,” said Drew Sigfridson, managing director of CBRE|The Boulos Co. in Portland. “Our ‘Class A’ downtown market in Portland continues to be especially tight, with very few large office moves happening in 2016. Businesses continue to add jobs and signs of increased employment are everywhere – from the long wait list for parking garages downtown to an increase in traffic counts on main commuter routes.”

Office vacancy rates in Portland decreased in both downtown and suburban areas in 2016, as well as in Westbrook, Falmouth, Cumberland and Yarmouth, according to Nate Stevens, associate broker at CBRE|Boulos. However, he said vacancies increased in Scarborough and South Portland, particularly around the Maine Mall area.

The area’s overall vacancy rate in 2016 was about 6.2 percent, with a slightly higher rate of 6.8 percent when subleasing space is included, Stevens said. Seven consecutive years of declining vacancies have led to a landlord’s market in which asking lease rates are up and tenants are faced with relatively limited options, particularly for prime office space downtown. He said those conditions are likely to persist throughout 2017.

However, there are several new projects in the pipeline that could help alleviate the shortage, Stevens said. They include three office buildings already under construction: 55,000 square feet at 16 Middle St. in Portland; 94,500 square feet at 1 Tyler Drive in Yarmouth; and 34,500 square feet at 705 U.S. Route One, also in Yarmouth.

Three additional projects, all in Portland, are in the planning phase, according to Stevens: 48,000 square feet at 20 Fore St., 18,000 square feet at Union Wharf, and 22,050 square feet at 266 Commercial St.


]]> 0 Fri, 20 Jan 2017 00:07:16 +0000
Southern Maine retail real estate sector looks robust Thu, 19 Jan 2017 20:25:00 +0000 The real estate market for retailers in southern Maine continues to be tight, reflected in vacancy rates that are a third of the national average. Lease rates, too, appear to be climbing, an indication that bricks-and-mortar stores are still coveted properties, despite the siphoning of shoppers to online sites.

Peter Harrington, a retail broker with Malone Commercial Properties, noted in his presentation at the Maine Real Estate and Development Association forecasting conference that national vacancy rates in 2016 for retail space hovered at just over 11 percent, while vacancy rates in Greater Portland were 3.44 percent.

Those same properties were commanding lease rates of $17.50 per square foot, a sizable jump from the $14.77 retailers paid in 2015.

905942 RetailLeaseRates0117

Helping to drive those numbers was increasing activity in the Old Port, which experienced nearly zero vacancies last year. Harrington pointed out that national retailers have landed on Middle Street, “creating a renaissance,” with Urban Outfitters moving there in 2011, followed by Anthropologie in 2014 and the expected opening this year of West Elm, a subsidiary of Williams-Sonoma that sells furniture and housewares.

The Maine Mall is also doing well, at near capacity. Based on information from the retailers there, Harrington said overall holiday sales were expected to be 4 percent to 6 percent higher than in 2015.

Among the changes there: the former Gap an Lane Bryant spaces will be taken over by H&M and that retailer’s current smaller space will be filled soon. Harrington said there are several parties interested in leasing the former Sports Authority store.

He also noted that traditional department stores such as Macy’s, Kmart and Sears are in transition, as their parent companies announce closures across the country. Other retailers, supermarkets, specialty food stores, gyms and other sorts of retailers are interested in the former department store space, which Harrington said could be good for malls because the new businesses would likely generate more foot traffic.

]]> 0, 20 Jan 2017 00:13:00 +0000
Brokers: Portland area’s hot multi-family housing market only got hotter in 2016 Thu, 19 Jan 2017 20:03:00 +0000 The market for building, buying and selling apartments and condominiums in the Portland metro area remained red hot in 2016, according to presenters at the annual Maine Real Estate and Development Association conference Thursday.

“Multi-family and condominium construction in Portland is exploding with hundreds of units added within the past two years, additional product under construction and even more in the pipeline,” said Drew Sigfridson, managing director of CBRE|The Boulos Co. in Portland.

Brit Vitalius, principal and designated broker at Vitalius Real Estate Group in Portland, said that while downtown Portland remains the most desirable area for investors in multi-family housing, surrounding areas are also seeing a surge in activity.

From 2015 to 2016, the sales volume of apartment units increased by 57 percent in Westbrook, 24 percent in Lewiston-Auburn, 23 percent in South Portland and 12 percent in Saco-Biddeford, Vitalius said.

“Downtown (Portland) is hot, but it’s ALL good,” he said.

The median sale price for multi-family units also increased in all of southern Maine’s major markets, Vitalius said. From 2015 to 2016, the median price increased by 9 percent in Portland, 12 percent in South Portland, 3 percent in Westbrook, 6 percent in Saco-Biddeford and 14 percent in Lewiston-Auburn, he said.

The absorption rate for apartment housing – defined as the amount of time it would take to sell all existing inventory at the current rate of sales – plummeted in 2016, according to Vitalius. In Portland, it fell from 5 months in 2012 to 2.3 months. In South Portland, it dropped even further, from 5.5 months in 2012 to 1.5 months. In Westbrook, it fell from 5.7 months to 2.4 months.

In addition, condominiums have become a major force in Portland’s residential real estate market.

According to David Marsden of the Bean Group, there were 972 Portland residential sales in 2016, of which 345 were condos.

The sales were heavily weighted toward less-expensive homes, he said. Just over 200 condos were sold for less than $300,000, while 68 fell in the $300,000 to $400,000 range; 34 sold for between $400,000 and $500,000; 35 between $500,000 and $800,000 and five sold for more than $800,000.

]]> 0, ME - OCTOBER 14: Condominiums as 22 Hancock St. in the India Street neighborhood Wednesday, October 14, 2015. (Photo by Shawn Patrick Ouellette/Staff Photographer)Fri, 20 Jan 2017 00:17:54 +0000
Hotel occupancy flat in Maine with more supply on the way Thu, 19 Jan 2017 19:15:00 +0000 Despite a leveling-off of demand for hotel rooms statewide, there are five new hotel projects under construction in Maine and at least three more in the planning stage.

The occupancy rate at Maine hotels remained relatively flat in 2016 as the new supply of rooms nearly caught up with demand, said presenters at the Maine Real Estate and Development Association’s annual forecasting conference Thursday in Portland.

Still, there is a lot more supply on the way, they said.

Three new Maine hotels were completed in 2016, adding 239 rooms to the state’s total supply, according to Mitchell Muroff of Muroff Daigle Hospitality Group in Newton, Massachusetts. They were Hampton Inn in Oxford, Homewood Suites in Augusta and 250 Main in Rockland Harbor.

A far greater number of hotel projects are under construction or expected to break ground in 2017 that would add an estimated 650 rooms to Maine’s overall supply. Five hotels are under construction and three more in are the planning phase.

905942 HotelOccupancy0117

If all are built, those eight projects would bring the total number of hotel rooms in Maine to roughly 38,000.

The five hotels under construction are Hampton Inn in Kennebunk, Tru by Hilton in South Portland, AC Hotel Portland on Fore Street in Portland, Home2Suites in South Portland and a still-unnamed upscale hotel at Oxford Casino in Oxford.

Why is this happening? Muroff said the reason is that despite little movement in occupancy rates, hoteliers in Maine have succeeded in squeezing progressively more revenue out of their guests each year since 2009.

“The average daily rate has increased every year for the past eight years,” he said. “It’s been a great run – it really has been.”

The hotel occupancy rate in Maine reached about 56 percent in 2016, up slightly from 55 percent the previous year, according to Muroff. In Portland, the average occupancy rate was 63.4 percent in 2016, up 4.6 percent from the previous year.

The U.S. hotel occupancy rate also remained flat in 2016 at just under 66 percent. Maine’s occupancy rate always lags behind the nation because of the state’s highly seasonal tourism industry.

But while occupancy is flat, the revenue numbers for hoteliers continue to rise.

The average daily room rate in Portland was $133.24, an increase of 4.7 percent over 2015. Revenue per available room, a metric used to gauge a hotel’s financial performance, was $84.54 in 2016, up “a whopping 9.5 percent” from the previous year, Muroff said.

Those are compelling statistics that have convinced many hotel developers once skeptical of building additional supply in Maine to change their attitude, said Jim Brady, developer of The Press Hotel in downtown Portland, which opened in May 2015.

Brady said that when he was seeking financing for that project, no lender in Maine would give him the time of day.

“I had to go with an out-of-state bank because not a single bank in Maine would loan us money,” he said.

But things have changed, in part because of the success of Brady’s project.

Brady said it’s possible that the Portland area, which already has about 5,500 hotel rooms, can absorb the additional supply that is under development.

However, he said it would require a continuation of the recent trend of growing popularity that the area has enjoyed.

“If we’re fortunate enough that the Portland market continues to expand,” Brady said, then it will be able to handle the new supply without a drop in occupancy rates. It really comes down to marketing the area properly, he said.

For instance, Brady said he would like to see a push to draw more tourists to Portland in the winter, possibly by creating and promoting holiday markets and festivals.

“We really don’t need more demand per se in July,” he said. “We need more demand in the off months.”

Major drivers of increased hotel occupancy in Portland included the “micro-brewing and foodie craze,” which kept demand high in the city, said Muroff.

Elsewhere in the state, lodging revenues are similarly strong. Maine’s average daily room rate reached $120 last year, a 33 percent increase over the $90 average rate from 10 years ago. Revenue per available room also increased, from roughly $57 in 2007 to $67 in 2016.

Total room sales volume in Maine was on track at the end of September to improve upon 2015’s total sales of $856 million by 9.2 percent.

Muroff predicted another flat year for Maine hotel occupancy in 2017, while the U.S. hotel occupancy rate is expected to decline slightly.

]]> 0 Davis/Staff Photographer Portland’s Residence Inn by Marriott is one of the hotels drawing visitors to the downtown area. According to a hospitality industry report, hotels on the city’s peninsula reported a 70 percent occupancy rate in 2015.Thu, 19 Jan 2017 18:55:58 +0000
Rebounding regional economies push development Thu, 19 Jan 2017 16:30:00 +0000 The primary focus at the MEREDA annual forecasting conference was definitely southern Maine, but developments in other regions were noted. Development throughout the state seems to be buoyed by low interest rates and low unemployment rates.

In the Augusta area, Keith Luke of the city’s development staff, noted that a $6 million restoration of Colonial Theater on Water Street is underway. Additionally, there’s been some renewed interest in redeveloping the former Statler mill site into Kennebec Locke, the capitol’s version of Portland’s Thompson Point, Luke said.

Interest in multi-family sales had a significant impact in the Lewiston-Auburn real estate market. According to Malone broker Kevin Fletcher, sales of buildings with five or more units increased 53 percent over the number of similar sales in 2015. The per unit average price for buildings in that range was $20,680 in 2015 and $23,550 in 2016, an increase of nearly 14 percent in one year. Fletcher said he expects to see increased demand and sales in L-A’s multi-family sector and that values are likely to continue rising.

In the Brunswick/Topsham area, it appears the retail war between Cook’s Corner and the Topsham Fair Mall areas has subsided. Both shopping centers report overall occupancy rates well above 80 percent, according to Erik Urbanek of SVN, a commercial real estate agency. The redevelopment of Brunswick Landing continues to gain steam as more than 100 companies have relocated to the former naval base creating 1,200-plus jobs.

Craft beer and restaurants are increasing their presence in the Bangor area, where the downtown is “robust,” said Tanya Emery, economic development director for the city. Downtown rehabs are fueled by demand from the residential market and restaurants, she said. That should help stabilize retail in the wake of announcements by Kmart and Macy’s that they are closing their Bangor locations. She expects to see development in existing buildings and in-town housing grow after years of suburban development.

]]> 0 Thu, 19 Jan 2017 12:47:09 +0000
Sweden still wants to ban American lobster imports Thu, 19 Jan 2017 16:07:31 +0000 Sweden isn’t giving up on a long-running battle with the U.S. and Canada over lobsters that have turned up in Swedish waters.

Officials with Sweden told The Associated Press that their country is working on a new proposal about how to deal with American lobsters that have turned up. A controversy about whether American lobsters are invasive in Swedish waters has simmered for almost a year.

Sweden had wanted the European Union to consider a ban of imports of American lobsters. That call came after Sweden announced it had found 32 American lobsters in its waters.

European Union officials turned away that request in October after American and Canadian scientists and politicians raised concerns about a lack of evidence that the lobsters warranted such a sweeping ban. But Swedish officials told the AP that the country remains concerned that American lobsters could interfere with European lobsters, which have economic value.

“We are preparing a new proposal on national and regional measures on the American lobster that will be presented for the Swedish government this winter,” said Sofia Brockmark, a spokeswoman for the Swedish Agency for Marine and Water Management.

Brockmark and other Swedish officials did not provide more specifics about Sweden’s upcoming proposal, other than that it will address invasive lobsters with countrywide and regional measures as opposed to an international ban.

Maine is the biggest lobster fishing state in the U.S., and the New England lobster industry dug in against Sweden’s proposed ban. America sends about $150 million in lobster to the European Union annually. Canada also sells the same species of lobster to Europe.

Some of the lobsters that were found in Europe were wearing the rubber bands that are put on their claws in captivity. That led to speculation that they were imported lobsters that either escaped into the wild or were released.

Beth Casoni, executive director of the Massachusetts Lobstermen’s Association, said her organization is working with others in the industry, as well as American and Canadian government agencies, to help prevent American lobsters from escaping in Europe.

The effort will include educating buyers in Sweden and elsewhere in Europe, Casoni said.

“The goal is to keep them going to Europe and hopefully find some mitigation factors,” she said. “They hold them in pounds just like over here. Sometimes one or two might escape.”

The European Union is of the opinion that the issue now lies with Sweden, said Iris Petsa, a spokeswoman for the EU’s European Commission. She said the country would still need to notify the European Commission before applying restrictions on national trade.

“If Sweden wishes to adopt other measures not affecting trade, they can do so without informing the European Commission,” Petsa said.

]]> 0 American lobsters, also known as Maine lobsters, crowd a food bin at the Burger & Lobster restaurant in Stockholm, Sweden. Chef Anders Westerholm says the imported crustaceans are highly prized at European restaurants and advocates against an all-out ban.Thu, 19 Jan 2017 20:14:57 +0000
Average 30-year mortgage rate falls to 4.09 percent Thu, 19 Jan 2017 15:52:29 +0000 WASHINGTON — Long-term U.S. mortgage rates marked their third week of declines this week, after snapping a nine-week run of increases.

Mortgage buyer Freddie Mac says the rate on 30-year fixed-rate loans fell to an average 4.09 percent from 4.12 percent last week. That was still sharply higher than a 30-year rate that averaged 3.65 percent for all of 2016, the lowest level recorded from records going back to 1971. A year ago, the benchmark rate stood at 3.81 percent.

The average for a 15-year mortgage declined to 3.34 percent from 3.37 percent last week.

]]> 0 Thu, 19 Jan 2017 17:54:22 +0000
Demand from cannabis-related businesses pushes Portland industrial real estate demand higher Thu, 19 Jan 2017 15:35:00 +0000 Demand from cannabis-related businesses helped boost the Portland area’s industrial real estate market in 2016, according to presenters at the annual Maine Real Estate and Development Association conference Thursday.

And with the recent legalization of marijuana for recreational use in Maine, demand for industrially zoned properties is expected to increase even more, they said.

In 2016, medical cannabis-related businesses leased an estimated 300,000 to 350,000 square feet of industrial space in the greater Portland area, according to Justin Lamontagne, partner and broker at NAI The Dunham Group in Portland. He valued those transactions at $15 million to $20 million.

While commercial landlords continue to grapple with questions about legality, insurance liability and financing, Lamontagne said they are generally becoming more comfortable with the idea of leasing space to marijuana-related businesses.

One significant hurdle that remains for cannabis growers and sellers is their inability to obtain traditional bank financing for new construction, he said.

Lamontagne also said he expected interest in cannabis-related real estate to slow down as municipalities and regulators “bring in the rope a little bit” as they consider how to deal with the commercial aspects of legal marijuana.

“The barrier of entry in that market will be higher in 2017,” he predicted.

Drew Sigfridson, managing director of CBRE|The Boulos Co. in Portland, said the November election could have other effects on Maine’s industrial real estate market, but that the full impact is still unknown.

“While national policies will certainly affect us, there are also some local referenda that may impact our market,” Sigfridson said. “Among them are the legalization of recreational marijuana, which we anticipate creating additional demand for industrial and retail space, an increase in the statewide minimum wage, and an additional 3 percent income tax on income over $200,000.”

Vacancy rates for industrial properties in the Portland metro area range from virtually no vacancy in Westbrook (0.5 percent) to 4.8 percent in South Portland, according to Lamontagne. The current industrial vacancy rate in Portland is 1 percent, he said.

Lamontagne pointed to a recent sale in Bayside as an indication of how active that neighborhood has become.

A 4,300-square-foot commercial building at 175 Anderson St. was recently sold to an investment group for $810,000, which was able to attract some long-term tenants, including Magoulian Rugs, said Lamontagne While the overall purchase price may not raise eyebrows, the per square foot price of $200 should. A typical sale price for industrial property is $50 to $55 per square foot.

“It is a very, very hot neighborhood,” he said.

Overall, greater Portland’s vacancy rate has declined from about 3.3 percent in 2011 to 2.3 percent at the end of 2016, he said. Both the average lease rate and sale price per square foot for industrial property have increased every year since 2013, Lamontagne said.


]]> 0 Fri, 20 Jan 2017 00:10:09 +0000
Demand from cannabis-related businesses pushes Portland industrial real estate demand higher Thu, 19 Jan 2017 15:35:00 +0000 Demand from cannabis-related businesses helped boost the Portland area’s industrial real estate market in 2016, according to presenters at the annual Maine Real Estate and Development Association conference Thursday.

And with the recent legalization of marijuana for recreational use in Maine, demand for industrially zoned properties is expected to increase even more, they said.

In 2016, medical cannabis-related businesses leased an estimated 300,000 to 350,000 square feet of industrial space in the greater Portland area, according to Justin Lamontagne, partner and broker at NAI The Dunham Group in Portland. He valued those transactions at $15 million to $20 million.

While commercial landlords continue to grapple with questions about legality, insurance liability and financing, Lamontagne said they are generally becoming more comfortable with the idea of leasing space to marijuana-related businesses.

One significant hurdle that remains for cannabis growers and sellers is their inability to obtain traditional bank financing for new construction, he said.

Drew Sigfridson, managing director of CBRE|The Boulos Co. in Portland, said the November election could have other effects on Maine’s industrial real estate market, but that the full impact is still unknown.

“While national policies will certainly affect us, there are also some local referenda that may impact our market,” Sigfridson said. “Among them are the legalization of recreational marijuana, which we anticipate creating additional demand for industrial and retail space, an increase in the statewide minimum wage, and an additional 3 percent income tax on income over $200,000.”

Vacancy rates for industrial properties in the Portland metro area range from virtually no vacancy in Westbrook (0.5 percent) to 4.8 percent in South Portland, according to Lamontagne. The current industrial vacancy rate in Portland is 1 percent, he said.

Overall, greater Portland’s vacancy rate has declined from about 3.3 percent in 2011 to 2.3 percent at the end of 2016, he said. Both the average lease rate and sale price per square foot for industrial property have increased every year since 2013, Lamontagne said.


]]> 0 this file photo taken Jan. 13, 2015, marijuana plants sit under powerful lamps in a growing facility in Arlington, Wash.Fri, 20 Jan 2017 00:24:22 +0000
Real estate conference surveys surging demand, new construction across southern Maine Thu, 19 Jan 2017 14:56:00 +0000 Real estate brokers and developers are bullish about the Portland area’s prospects in 2017, based on a recent surge in demand for both living and working spaces in the region.

Lower unemployment, job growth and strengthening local economies in southern Maine drove continued improvement in the Portland-area office market in 2016, as the vacancy rate fell for the seventh consecutive year to about 6.2 percent.

Meanwhile, investors continued to snap up apartment properties at a frenzied pace, and owners of industrial property welcomed new tenants involved in the production of micro-brewed beer and medical marijuana.

A slew of new construction projects were given the greenlight in 2016 for hotels, office buildings, apartments and condominiums.

Several presenters offered their insights and predictions for the coming year on all things real estate-related at the Maine Real Estate and Development Association’s 2017 Annual Forecast Conference and Member Showcase Thursday in Portland.

]]> 0 development site is right next to a 131-room Courtyard by Marriott completed in 2014, and one street down from where J.B. Brown & Sons is building, in background, 63 apartments in a five-story building with a two-level parking garage at the corner of York and High streets on the former site of the El Rayo Taqueria restaurant and bar.Fri, 20 Jan 2017 00:14:24 +0000
U.S. jobless claims hit lowest level in more than 43 years Thu, 19 Jan 2017 14:29:14 +0000 WASHINGTON — The number of Americans seeking unemployment benefits dropped last week to the lowest level in more than 43 years, another sign that most American workers enjoy job security.

The Labor Department said Thursday that 234,000 Americans sought jobless aid, a drop of 15,000 from the previous week and lowest since November 1973. The four-week average, which is less volatile, fell by 10,250 to 246,750, also the lowest since November 1973. The total number of people receiving unemployment benefits was 2.05 million, down 7.7 percent from a year earlier.

Unemployment claims are a proxy for layoffs. They have now come in below 300,000 for 98 straight weeks. The low totals suggest that businesses are confident about their prospects that they are holding on staff.

The unemployment rate last month came in at 4.7 percent, close to what economists consider full employment.

Employers aren’t cutting many jobs, but their hiring has slowed. They added 180,000 jobs a month last year, down from an average 229,000 in 2015.

]]> 0 Thu, 19 Jan 2017 09:48:04 +0000
Interactive maps: ACA enrollment is highest in areas where Mainers work for themselves Thu, 19 Jan 2017 09:00:39 +0000 Some of the highest enrollment rates for Obamacare occur in coastal areas and rural communities of Maine’s western mountains, areas where lobstermen, fishermen and forestry workers contribute to a high self-employment rate.

Mouse over the map or use the search box to see enrollment rates by ZIP code, and the corresponding rate of self-employment. The data does not include enrollments after Feb. 1, 2016, or ZIP codes with fewer than 50 enrollments.


SOURCE: U.S. Dept. of Health and Human Services, U.S. Census Bureau
INTERACTIVE: Christian MilNeil | @vigorousnorth

Note: Reported ACA enrollment in Greenville Junction (zip code 04442) exceeds the U.S. Census population estimate for the area. The figure has been rounded to 100%.

]]> 0, 19 Jan 2017 09:27:04 +0000
Large drug company agrees to pay record $150 million Thu, 19 Jan 2017 02:03:47 +0000 WASHINGTON — McKesson, the largest drug distributor in the United States, has agreed to pay a record $150 million in fines and to suspend sales of controlled substances from four distribution centers to settle allegations that the company violated federal law, the Justice Department announced Tuesday.

The settlement is the second for the giant drug distributor. In 2008, McKesson paid a $13.25 million fine over similar allegations.

In the current case, the government accused McKesson – the fifth-largest company in the United States – of failing to design and use an effective system to detect “suspicious orders” from pharmacies for powerful painkillers such as oxycodone, as required by the Controlled Substances Act.

In Colorado, for example, McKesson filled more than 1.6 million orders for controlled substances from June 2008 through May 2013, but it reported just 16 of them from a single customer as suspicious, the Justice Department said.

The company had previously acknowledged in Securities and Exchange Commission filings that it would have to pay the fine. Tuesday’s announcement adds that the company will have to employ an independent monitor to assess its compliance with the law in the future and will shutter warehouses in Colorado, Ohio, Michigan and Florida on a staggered basis for unspecified numbers of years.

In a statement on its website, McKesson said it settled “in the interest of moving beyond disagreements about whether McKesson was complying with the controlled substance regulations. . .and to instead focus on the company’s partnership with regulators and others to help stem the opioid epidemic in this country.”

In October, the Washington Post reported that the Drug Enforcement Administration slowed an enforcement campaign against major wholesale drug distributors like McKesson in the face of pressure from the pharmaceutical industry.

In December, Cardinal Health, another member of the “Big Three” drug distributors, agreed to pay $44 million in penalties to resolve allegations that it failed to notify the DEA of suspicious narcotic orders.

More than 16,000 Americans died of overdoses of prescription opioids, including methadone, last year. Since 2000, the toll has been about 180,000 people.

]]> 0 Wed, 18 Jan 2017 21:03:47 +0000
The mystery of American’s ailing, itchy flight attendants Thu, 19 Jan 2017 01:57:05 +0000 From oozing blisters and wheezing to rashes, itchy eyes, and sore throats, numerous American Airlines Group flight attendants say their new work uniforms are making them sick.

But after a battery of tests and a tense back-and-forth among their union, the airline, and the uniform supplier, it’s still not clear what exactly is behind the rise in health complaints.

The Association of Professional Flight Attendants, which represents flight attendants for American, has asked the carrier to recall the new garments, which went to 70,000 employees starting in September.

The airline says it has spent more than $1 million for three rounds of toxicological tests that, so far, haven’t turned up any obvious causes for the maladies.

American and the union are now conferring on protocols for further examinations – but the issue grew more contentious last week amid a flurry of communications among the airline, the flight attendants’ union, and the uniform supplier.

The union says about 10 percent, or 2,300, of the flight attendants it represents have reported adverse reactions-among them skin rashes, sore throats, wheezing, fatigue and vertigo-since they started wearing the new uniform. “This continues to be a serious and growing problem, and is not going to go away without some further remedial action by the company,” the union said on Thursday in a message to members.

American says an employee call center it opened in October has gotten 450 formal complaints of health problems, 350 of them from flight attendants.

The uniform controversy has become such a topic of concern at the airline that several executives have begun wearing the outfit, or parts of it, in an effort to allay fears.

Still, the flight attendants believe that chemicals in the uniform – say, a dye or an adhesive – are probably causing the severe reactions the union says are affecting roughly one in 10 flight attendants.

“I’m very confident that there’s something in that fabric that’s causing this,” said Bob Ross, the union’s national president. “Some (people) react right away. Lots of other people are feeling the effects just by being around the uniforms.”

Ross, a 33-year American veteran, said he himself wore the new uniform’s cotton shirt, “and by the end of the day my entire chest, neck, and arms were red.” It took two showers and disposal of the shirt and its packaging to resolve, he said.

A New York-based flight attendant, speaking via online chat on condition of anonymity, said her throat had begun burning on one flight and that she had grown hoarse and broken out in hives. She said she had been to 12 doctor appointments in 40 subsequent days for tests and consultations.

The uniforms have undergone a battery of tests, and the union, airline, and supplier Twin Hill have all hired experts to determine the chemical composition of the uniforms.

So far, testing by American and Twin Hill have not turned up substances that aren’t supposed to be in the clothes or any chemical levels exceeding safety limits, the airline has said.

The union has hired its own toxicologist to examine the results. It has spent more than $20,000 so far and wants American to reimburse it for its expenses, Ross said.

Last week, the airline denied a grievance Ross had filed on behalf of sick attendants. “The safety and comfort of our team members is more important than anything we do, and we know it is at the forefront of the APFA’s mission too,” wrote Cindi Simone, American’s managing director of labor relations.

American has also reimbursed flight attendants who have bought new work clothes similar to the uniform.

It says employees may wear their old uniforms, though many no longer have one.

The public contretemps has prompted supplier Twin Hill to complain that it is being maligned unfairly.

In a Jan. 9 letter to Ross, an executive at the Houston-based supplier, a unit of Tailored Brands Inc., denied any problems with the 1.4 million garments it had provided, citing tests by an independent laboratory it hired.

]]> 0 American Airlines flight attendants blame their illness on the airline's new uniforms-but $1 million worth of tests still haven't turned up a culprit.Wed, 18 Jan 2017 22:17:26 +0000
Small businesses want Obama-backed rules scrapped Thu, 19 Jan 2017 01:37:12 +0000 NEW YORK — Small businesses are hoping to see some high-profile Obama administration regulations scrapped after Donald Trump takes office, with rules affecting overtime, sick leave and the environment among those that may be taken off the books.

Complying with federal, state and local regulations affects companies of all sizes, but can be especially tough for small businesses because they have less revenue to absorb labor, paperwork and other costs related to regulations.

Businesses with fewer than 50 workers paid an average of $11,724 per employee to comply with federal regulations, compared with less than $10,000 for companies of all sizes, a 2014 report released by the National Association of Manufacturers found. Manufacturers with fewer than 50 workers paid an average of $34,671 per worker, while manufacturers of all sizes averaged $19,564.

Federal regulations were cited as the most burdensome kind by 58 percent of owners in a survey released Wednesday by the National Small Business Association advocacy group. Twenty-three percent cited state regulations, and 12 percent said local rules. Seven percent did not identify a source.

Vince Pappas estimates he spends about 10 hours a week studying the regulations that his Baltimore-based company, Stone Steel Corp., must comply with, and deciding how to minimize the impact. Pappas went from owning a fleet of trucks to leasing to now shipping his steel through trucking companies.

“It is way too cumbersome, too much reporting,” he says.

A number of small business groups anticipate fewer rules and more lenient enforcement of existing ones under Trump and the Republican-led Congress. Here’s a look at what they expect for some of the regulations that took effect during the Obama years:


Small business groups opposed the Obama administration’s plan to make 4.2 million salaried workers eligible for overtime, which a federal appeals court blocked implementation of just before it was to take effect Dec. 1. The government is appealing the injunction, which came in a lawsuit brought by 21 states.

The rule would have immediately doubled the threshold at which workers would be exempt from overtime, to $47,476 from $23,660. But some small businesses had already given or promised salaried managers raises to bring their pay above the threshold, or shifted workers to hourly pay and limited hours to contain overtime costs.


Farming groups and small business advocates hope a wetlands rule won’t survive. It broadly defines the bodies of water including wetlands that must be protected under the Clean Water Act. Critics contend it gives the government too much leeway in restricting what private landowners can do.

Business owners could learn only when they try to get a building permit that they’re prohibited from moving forward with a project because the property is part of a wetland. The rule also makes the process to get building permits longer and more expensive, according to the industry group American Water Works Association.


Small business groups expect the Environmental Protection Agency’s rules on emissions from coal-fired power plants to be eliminated. The Supreme Court stopped the rules from taking effect while they are the subject of federal lawsuits brought by states and businesses. Trump, who has vowed to bring jobs back to the coal industry, could issue an order nullifying the rules. Congress can also act.


Under executive orders from President Obama, companies that have government contracts or subcontracts must provide employees with up to eight days of paid sick leave a year and pay them at least $10.10 an hour for work done on the contract. Trump will have the power to rescind those orders.

Small businesses also want changes in rulings by the Equal Employment Opportunity Commission and the National Labor Relations Board, says McCracken. While those agencies operate independently of the executive branch, he noted that as vacancies occur in each, Trump could shift policy with more conservative appointments.

]]> 0 Pappas, owner of Stone Steel Corp., poses in his Baltimore warehouse. Small businesses hope some high-profile regulations get scrapped by Donald Trump.Wed, 18 Jan 2017 20:37:12 +0000
Robot retail employees are on the way Thu, 19 Jan 2017 01:00:28 +0000 NEW YORK — As soon as you approach Pepper, a four-foot-tall robot, she starts sizing you up.

Thanks to facial recognition capabilities, Pepper can determine your gender and age bracket. And as you begin asking her questions, she can draw from a vast volume of cloud-based information to give what she thinks are relevant answers. If you smile, she can tell the conversation is going well and that you’re finding her answers helpful. If you don’t, she might ask you if she’s misunderstanding your requests.

Pepper’s maker, Softbank Robotics, has a vision of a world in which many retailers incorporate this technology into brick-and-mortar stores, in which it feels normal and reflexive for you to approach a robot with customer service questions.

It’s part of a wider push across the retail industry to bring more automation and data science to one of the few parts of the business that largely remains an art: The act of making a sale.

At the National Retail Federation’s Big Show, an event here attended by tens of thousands of industry professionals, demonstrations abounded of technology that could assist a store employee in closing the deal – or, in some cases, that could answer the very questions clerks might typically help with.

These innovations present tantalizing possibilities for retailers, who can ill afford to lose any opportunity to satisfy or even upsell a customer at a time when mall foot traffic is tumbling precipitously. But the advances also raise thorny questions about what the retail workforce of the future will look like if a growing array of tasks can soon be punted to robots or tablet applications.

When you first encounter Pepper, it’s hard not to be struck by the quirky novelty of the situation: You’re being chatted up by something that looks part anime cartoon, part “Star Wars” stormtrooper. And yet the interaction feels strangely familiar, because of how uncannily humanoid her gestures are. From the way she cocks her head when asking a question to the way her fingers curl up when she draws her hands to her hips, it all feels very integrated.

Because of that, “one of the challenges we have from a marketing perspective is managing your expectations of what a robot like this can do,” said Steve Carlin, vice president at Softbank Robotics.

In other words, the form-factor is so compelling that people start asking Pepper questions that, at least for now, are out of her depth.

Demonstrators offered several possible use cases for Pepper: Retailers could position her at an endcap – the eye-catching display at the head of an aisle – or in a specialty department, where she could answer questions about a featured product. Or she could help you identify which shoes you might want to buy based on what your priorities are. On a budget? She’ll steer you toward the cheapest pair. Like to be comfortable? She’ll suggest a functional pair of sneakers.

After being used at Softbank Mobile stores in Japan for several years, Pepper made her debut in the U.S. market in November, launching at two Westfield Malls in California.

In that iteration, she is programmed to do things like give shoppers directions to a certain store.

Don’t expect to start seeing a massive army of Peppers right away: Softbank says that there is only one facility in the United States currently equipped to service and repair the robots, and the company doesn’t want to deploy the technology too widely until it has built out more logistics and capacity for managing that.

]]> 0 is a humanoid robot designed to help shoppers made by Softbank Robotics.Wed, 18 Jan 2017 20:26:54 +0000
Medical marijuana CEO says she’s bullish about new recreational marijuana law Thu, 19 Jan 2017 00:22:26 +0000 The head of Maine’s largest purveyor of legal medical marijuana said on Wednesday that she also supports the regulated, recreational use of marijuana by people over 21 and the creation of a market to satisfy that demand.

In November, that’s just what Maine voters approved when they narrowly voted yes on Question 1, a citizen referendum that allows for the creation of a recreational marijuana industry in the state. This week, state lawmakers are beginning to consider how to implement those new rules.

Given the coming changes, Patricia Rosi, chief executive officer of Wellness Connection of Maine, was invited to be the featured speaker at a breakfast held by the Kennebec Valley of Chamber of Commerce. Because of Wednesday’s snowfall, she delivered her talk from home using a video feed.

Rosi’s company runs four of the state’s eight licensed medical marijuana dispensaries – in Portland, Bath, Gardiner and Brewer – as well a cultivation facility in Androscoggin County.

Some supporters of Maine’s medical marijuana program opposed Question 1, arguing that it would make it harder for patients under the age of 21 to continue receiving cannabis.

But Rosi was not one of them. On Wednesday, she pointed to a few ways that the medical and recreational marijuana industries can parallel or even complement each other.

For one thing, Maine health care providers are not able to certify patients to use medical marijuana unless they have certain medical conditions, including cancer, glaucoma, hepatitis C, chronic pain and post-traumatic stress disorder. But some supporters would like more medical conditions to be included under that umbrella, Rosi said, and recreational access would allow those who feel they need marijuana for a condition to obtain it.

“We’ve always been in favor of the legalization of marijuana because we view it as a way to grant access to more Mainers to marijuana for more conditions,” Rosi said. “The state does not want to expand conditions, so we’ve always been in favor of recreational to provide more access.”

Appearing on a projector screen at the chamber breakfast, she also said the creation of a well-regulated recreational marijuana market will potentially collapse the illegal market that currently exists.

She also referred to Colorado, a state that legalized recreational marijuana use in 2014, yet has maintained a medical marijuana industry at the same time.

“There’s still a very strong medical business in Colorado,” she said.

Because marijuana is illegal at the federal level but legal in a growing number of states, Rosi said she is often asked whether incoming President Donald Trump could roll back any of the rules that have been approved in states like Maine.

Rosi is skeptical.

“I think this has reached too much of a groundswell to be reversed and undone, but this remains to be seen,” she said of Trump’s potential impact.

Rosi did not address whether Wellness Connection of Maine is considering expanding into the recreational market.

The legalization bill passed by voters in November allows adults to possess up to 2.5 ounces of marijuana and to cultivate a limited number of plants. That law is expected to take effect Jan. 30.

The bill also gave state government nine months to develop rules for the sale of recreational marijuana at shops and social clubs, but this week, lawmakers have been considering a bill that would give them until Feb. 2018 to make those rules. At the same time, a number of Maine communities are convening cannabis task forces and considering moratoriums that would give them time to prepare for the new rules.

Karen Tucker, a coordinator at Healthy Communities of the Capital Area, a public health group based in Gardiner, told Rosi during the breakfast’s question and answer session, that she is hoping to join the Gardiner task force. She expressed concerns about marketing recreational and medical marijuana in similar ways.

“If (kids) see the adults using more and more marijuana, if the term ‘marijuana’ is used for both consistently, it’s a very confusing thing,” Tucker said. “I believe to message to the youth, who actually can have some negative effects on their developing brain, that’s the constituency we want to protect. What are you doing to help make that clear to potential consumers?”

Rosi said that the existing medical marijuana products are already clearly marked as drugs, but she agreed with Tucker that there needs to be education at all levels about the new rules.

Charles Eichacker can be contacted at 621-5642 or

Twitter: @ceichacker

]]> 0 Tucker, left, of Healthy Communities of the Capital Area, in Gardiner, asks a question Wednesday about labeling and regulation of marijuana to Kennebec Valley Chamber of Commerce guest speaker Patricia Rosi, background on screen, of Wellness Connection of Maine. Rosi is CEO of an organization that provides education on medical marijuana and operates medical cannabis dispensaries around Maine. Chamber board member Andrew Silsby, second from left, and Chamber Program Director Katie Doherty, right, assist with the remote connection.Wed, 18 Jan 2017 21:29:38 +0000
Fed chief expects several interest rate hikes a year through 2019 Thu, 19 Jan 2017 00:22:25 +0000 WASHINGTON — Federal Reserve Chair Janet Yellen says she expects the Fed to raise its benchmark interest rate several times a year through 2019, as it moves closer toward to its economic goals of maximum employment and stable inflation.

But in a speech Wednesday in San Francisco, she said she can’t say when the next interest rate increase will occur or how high rates will rise. She says that will depend on how the economy performs in the coming months.

She says Fed officials, who boosted rates for a second time last month, expect to raise rates “a few times a year” until they have pushed the Fed’s benchmark rate close to 3 percent by the end of 2019. The rate now stands in a range of 0.5 percent to 0.75 percent.

The 3 percent level for the Fed’s target for the federal funds rate, the interest that banks charge each other, is the point that the Fed currently believes is the so-called neutral rate – the level where the Fed’s interest rate policies are not spurring growth or holding it back.

“Right now our foot is still pressing on the gas pedal, though, as I noted, we have eased back a bit,” Yellen said. “Our foot remains on the pedal in part because we want to make sure the economic expansion remains strong enough to withstand an expected shock, given that we don’t have much room to cut interest rates.”

Currently, Yellen said inflation is still running below the Fed’s 2 percent objective, by its preferred measure of prices, and that some measures show that even though unemployment is below 5 percent, there could still be room to make further progress on jobs.

“For instance, wage growth has only recently begun to pick up and remains fairly low,” Yellen said.

She said as the economy gets closer to the Fed’s goals on employment and inflation, it will make sense to “gradually reduce” the level of support the Fed is providing by raising interest rates.

“Waiting too long to begin moving toward the neutral rate could risk a nasty surprise down the road – either too much inflation, financial instability, or both,” Yellen said in her speech to the Commonwealth Club of San Francisco.

During her appearance, Yellen made no mention of the incoming Trump administration. President-election Donald Trump was critical of Yellen during the campaign, accusing the Fed of being political and keeping interest rates low to help Democrats.

Yellen has denied this charge. She has said she intends to remain as Fed chair until her term ends in February 2018.

Yellen was asked how the Fed safeguards its political independence while at the same time strengthening policy coordination with the executive branch.

One long tradition dating back decades, she said, is the Fed chair’s regular meetings with the administration’s Treasury secretary.

“During my time, I have had virtually a weekly breakfast or lunch with Jack Lew,” Yellen said, referring to the current Treasury secretary.

She said the meetings are used for exchanging views on the economy, but she has never felt pressure from the administration to follow a particular course on interest rates.

“We share a common interest in the success of the U.S. economy, and the administrations, at least the ones I have experience with, respect the independence of the Fed,” Yellen said.

]]> 0 YELLENWed, 18 Jan 2017 19:22:25 +0000
Netflix’s DVD-by-mail service could be gone Wed, 18 Jan 2017 23:56:58 +0000 SAN FRANCISCO — Originally cast in a starring role, Netflix’s original DVD-by-mail service has been reduced to a bit player – one that may eventually get killed off as the company focuses on its booming video streaming service.

Netflix’s fourth-quarter earnings report released Wednesday provided the latest glimpse at the DVD service’s descent into oblivion as the streaming service hogs the spotlight.

The DVD service shed 159,000 subscribers during the final three months of last year to end December with 4.1 million customers. That’s an 11-year low for a format that gave Netflix its initial shot at stardom, allowing it out-innovate and outmaneuver Blockbuster Video, then the king of home-video rentals.

Now, though, the DVD service operates mostly as an afterthought that caters to a shrinking audience of die-hards who prefer to watch movies and TV shows on discs instead of streaming or downloading them onto a mobile gadget.


Meanwhile, Netflix’s streaming service has been reshaping the world of entertainment, attracting converts to the convenience of streaming video at any time on any device with a high-speed internet connection.

The streaming service now boasts nearly 94 million subscribers in 190 countries, after adding another 1.9 million in the U.S. and 5.1 million in its overseas markets during the final three months of last year. RBC Capital Markets analyst Mark Mahaney predicts Netflix will have 160 million streaming subscribers by 2020.

The company is coming off its biggest quarter of customer growth yet.

DVD subscribers may be fleeing, but the service boasts a library of more than 90,000 titles, including recent films that usually aren’t available to stream for nine to 18 months after they leave theaters — or sometimes at all, at least on Netflix.

The streaming service had about 4,600 titles as of late last year, down from roughly 6,500 in July 2015, according to the research firm Ampere Analysis. Netflix has trimmed its selection of outside streaming titles as it has ramped up its own production of television series and films, which can only be viewed on its streaming service.


Even though the DVD service has lost nearly 10 million subscribers over the past five-and-half years, Netflix keeps it around because it remains tremendously profitable.

The company makes an operating profit of roughly 50 percent on DVD subscriptions, after covering the expense of buying discs and postage to and from its distribution centers. The DVD service doesn’t even have a marketing budget; by comparison, Netflix spent almost $1 billion last year promoting its streaming service.

The DVD profits have helped subsidize Netflix’s streaming expansion outside the U.S., a push that has accumulated losses of nearly $1.5 billion during the past five years.

The DVD service has made $1.9 billion during the same period, enabling Netflix to remain profitable and helping its stock price rise by 13-fold since the end of 2011. The shares gained 8 percent to $144.50 in extended trading as investors cheered the rapid growth of the streaming service.

“We’ve never discussed shutting down DVDs since there are still lots of folks who subscribe, often to both streaming and DVD by mail,” Netflix spokeswoman Anne Marie Squeo says.


Eventually, though, most analysts believe it will no longer make sense to keep mailing out DVDs in Netflix’s familiar red envelopes.

Wedbush Securities analyst Michael Pachter believes Netflix’s DVD service could still be around for another five to eight years, based on its current pace of decline, before the company shuts it down. He believes the moment of reckoning may come when there are only about 1 million DVD subscribers remaining.

At that point, Pachter says, Netflix is likely to start closing most of the warehouses that store and distribute DVDs to different parts of the U.S.

“As they consolidate those warehouses, the turnaround time is going to be slower,” he says.

“Then, it’s not going to take two days for the next DVD to arrive, it’s going to be more like six days. Then people will be upset and quit.”

]]> 0, 18 Jan 2017 20:29:34 +0000
LePage seeks $7 million bailout for Maine Military Authority Wed, 18 Jan 2017 23:49:42 +0000 The LePage administration has proposed funneling $7 million to the Maine Military Authority in Aroostook County to cover huge losses incurred when the state-owned business underbid on a contract.

Late last year, Gov. Paul LePage halted work at the Maine Military Authority on a $19 million contract to refurbish 32 aging transit buses for the Massachusetts Bay Transportation Authority in Boston. The work to restore the two-section, articulated buses proved to be much more complicated – and costly – than anticipated, resulting in millions of dollars in losses and eventually layoffs as Maine Military Authority stopped accepting delivery of additional buses.

While officials from Maine Military Authority and state government are trying to renegotiate the contract, they are also seeking a $7 million bailout to rehire workers, complete the work and better position the business in the future. The LePage administration has proposed earmarking $7 million from the state’s year-end surplus to a special Maine Military Authority Reserve Fund.

“The bottom line is our bid was way too low and it created a huge challenge for us,” Hugh Corbett, the authority’s executive director, told members of the Legislature’s Veterans and Legal Affairs Committee on Wednesday. “We do need some help to complete this project.”

Located on the former Loring Air Force Base in Limestone, the Maine Military Authority was created by the Legislature in 2000 as a quasi-governmental business to restore military vehicles such as Humvees. Over the years, Maine Military Authority refurbished more than 16,000 vehicles, generated $600 million in revenue and, at its peak, employed roughly 550 workers.

But as the U.S. drew down its large-scale combat presence in Iraq and Afghanistan, orders from the military to refurbish vehicles fell dramatically. So Maine Military Authority leaders have been exploring municipal and commercial contracts as a way to sustain employment and keep the lights on at the large facility.

The contract to refurbish the MBTA buses represented Maine Military Authority’s first major commercial venture. But the authority severely underbid the contract.

Brig Gen. Douglas Farnham, head of the Maine National Guard and commissioner of the Maine Department of Defense, Veterans and Emergency Management, attributed the losses to a combination of factors. The buses were more complex to refurbish and were in worse condition than expected. Parts proved costly to obtain, there were delays starting the work because of bureaucracy and then there was a “misunderstanding on the scope of the work,” said Farnham.

“We were in a situation where we had to halt (work) because we were losing money like crazy but, at the same time, we signed a contract so we had to find a way forward,” Farnham told members of the Legislature’s Appropriations and Financial Affairs Committee. “So the primary focus is to finish the contract. The secondary piece of that is to try to establish some structure that buys us a little bit of time to figure out what the right way forward is.”

Maine Military Authority owes an estimated $2.2 million to vendors and has a “cash deficit” of $3.4 million, according to figures provided Wednesday to the Appropriations Committee, which is reviewing the governor’s budget requests.

Farnham said taxpayers have never been asked to subsidize the Maine Military Authority before in its nearly 20-year history. In fact, the authority funneled money back into the state’s General Fund for several years.

But after the loss of the military contracts, employment levels at Maine Military Authority had dropped to just 65 workers prior to the recent layoffs. There are currently 28 employees, although the $7 million will allow the authority to rehire most of the workers who had been employed on the MBTA project, Farnham said.

Some lawmakers expressed concerns about the long-term future of the Military Authority and the state’s involvement in the business.

“I am concerned that the government is in a private-sector business,” said Rep. Jeffrey Timberlake, R-Turner, one of the Appropriations Committee’s more conservative members. “I understand why we did it to help Loring and to help Aroostook, and I believe in all of those things. … But my experience in dealing with it, for the 25 years of my life that I have been bidding with the government, is this is a path that will continue.”

The LePage administration had originally wanted $10 million in surplus funds for the Maine Military Authority but reduced that request to $7 million on Wednesday.

Back in September when he ordered work to halt on the MBTA buses, LePage expressed “major concerns” about the underbid contract and the costs to taxpayers. At the time, Farnham said they planned to attempt to renegotiate the contract with MBTA, adding that the state “cannot in good faith create a financial burden to taxpayers and we will work to protect these good jobs for Mainers.”

Neither Corbett nor Farnham discussed details of the contract renegotiations but a hand-out to lawmakers said the new contract will lead to increased labor hours, a larger budget for parts and lead to a program that “will be revenue neutral going forward.”

Farnham and Corbett said they expect details of the renegotiated contract to be announced soon.

“We will not go into further debt to complete this project,” Corbett said.

LePage spokesman Peter Steele, meanwhile, said the additional money “is designed to position MMA to complete MBTA work, continue other work in the pipeline and position MMA for the future.”

Kevin Miller can be contacted at 791-6312 or at:

Twitter: KevinMillerPPH

]]> 0 this 2005 file photo, a mechanic inspects the underside of a refurbished Humvee at the Maine Military Authority in Limestone. The Maine Military Authority is laying off 140 people beginning in October because of the drawdown of troops and equipment in Iraq and Afghanistan. (AP Photo/Robert F. Bukaty)Wed, 18 Jan 2017 20:19:30 +0000