The Portland Press Herald / Maine Sunday Telegram » Business Fri, 29 Apr 2016 14:04:41 +0000 en-US hourly 1 U.S. consumer spending rose very slightly in March Fri, 29 Apr 2016 12:56:30 +0000 WASHINGTON — U.S. consumers boosted their spending by a tiny amount in March as purchases of nondurable goods such as clothing offset a big fall in spending on autos and other long-lasting items.

The Commerce Department says spending edged up 0.1 percent last month after a 0.2 percent rise in February. Incomes rose a solid 0.4 percent.

Consumer spending, which accounts for 70 percent of economic activity, has been lackluster for the past four months. The weakness played a big role in the slowdown of overall growth in the first quarter when the economy expanded at a weak 0.5 percent rate. It was the slowest increase in two years.

Economists are hoping that continued solid job growth will spur stronger spending in coming months and help the economy grow at faster levels.

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Report: ‘Stark’ gender pay gap begins early, has widened Fri, 29 Apr 2016 02:11:17 +0000 WASHINGTON — Pay disparities between men and women start earlier in their careers than widely assumed and have significantly widened for young workers in the past year, according to a new report from the Economic Policy Institute.

Paychecks for young female college graduates are about 79 percent as large as those of their male peers, the think tank found – a big drop from 84 percent last year.

The jump follows a more gradual shift. In 2000, women ages 21 to 24 with college degrees earned on average 92 percent of their male counterparts’ wages, which was unchanged from 1990.

The growing gap was driven by an 8.1 percent increase in young college-educated men’s wages since 2000 and a 6.8 percent decrease in young college-educated women’s, adjusted for inflation.

Regardless of their education, young women typically earn less money than young men in the United States. Female high school graduates, ages 21 to 24, earn an average of 92 cents for every dollar paid to their male counterparts.

Some have argued that the wage gap, at any stage of a woman’s life, starts with her choices. Women are more likely than men to scale back at work when they start a family, for instance. But the EPI data shows that the gender wage gap cracks open right after college graduation, well before decisions like maternity leave can affect women’s earnings.

The gender wage gap in the broader labor force has steadily declined since the 1980s.

“It is noteworthy that stark wage disparities between men and women occur even at this early part of their careers,” the researchers wrote, “when they have fairly comparable labor market experience.”

Young men with a college degree earn an average hourly wage of $20.94 right after graduation, according to the EPI figures, compared with the average hourly wage of $16.58 for women.

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Carrabassett Valley gets $135,000 grant for small businesses Fri, 29 Apr 2016 00:58:50 +0000 Carrabassett Valley will get a $135,000 grant from the Maine Department of Economic and Community Development, one of seven towns that have been awarded money under the federal Community Development Block Grant program.

The funding includes money from the Micro-Enterprise Assistance grant program, according to a news release Thursday from the department.

“These awards have a direct impact on the economic stability and sustainability of Maine’s small businesses,” DECD Commissioner George Gervais said.

“The investments made in these communities not only benefit the individual businesses, it also helps create new career opportunities for Maine people. The grants represent the LePage administration’s commitment to becoming better partners with the private sector, leveraging new private investment to achieve greater prosperity across Maine.”

The money for Carrabassett Valley will go to four businesses:

n Harmony House, for equipment and training.

n Carrabassett Cedar Works, for a new finishing room and equipment.

n All Points Transportation, for a seven-passenger SUV.

n KC’s Kreativity Center, for a new kiln and administrative assistance.

Other communities and businesses getting the grants are:

n Lisbon will get $150,000 for seven businesses in the Lisbon Falls village area for facade improvements.

n Lubec will get $75,000 to assist four businesses, which are the Lubec Brewing Co., Love at First Light, Old Crow Gardens and Gove Point Farms .

n Ashland will get $150,000 for eight businesses in the village and Route 11 corridor for facade improvements.

n Greenville will get $100,000 for two businesses, Maine Mountain Soap and Candle and Porter’s Garage.

n Sangerville will get $50,000 for Martin Cleaning Service to buy a reconditioned propane buffer and auto scrubber, and a commercial van with equipment racks and a pullout loading ramp.

n Brunswick will get $30,300 for Pathways Rehabilitation Services.

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FAA looks into Allegiant Air operations Fri, 29 Apr 2016 00:22:12 +0000 DALLAS — Federal safety officials are reviewing operations at Allegiant Air two years ahead of schedule, spurred by incidents including an aborted takeoff and a plane that landed low on fuel.

The Federal Aviation Administration routinely evaluates airlines every five years but moved up Allegiant’s review from 2018.

An FAA spokesman said Thursday that the agency is making sure that work Allegiant is doing “to address various internal issues has resulted in the desired improvements.”

The review began in early April and is expected to run through June.

Allegiant did not immediately respond when asked for comment.

The FAA sometimes moves up airline inspections because of management changes, labor disputes or other factors. The FAA said the decision to speed the Allegiant review was based partly on two incidents last year.

In one, a mechanical failure was blamed for causing the nose of the plane to rise too soon during takeoff. Pilots aborted the takeoff on the runway in Las Vegas.

In the other, a plane flown by two Allegiant executives with airline-pilot licenses ran low on fuel and made an emergency landing at a closed airport in Fargo, North Dakota. The FAA closed the case after Allegiant took steps to improve training and procedures.

The airline has suffered other high-profile breakdowns and emergency landings, including an engine fire that caused pilots to abort another Las Vegas flight.

The president of the union representing Allegiant’s pilots said the early FAA review underscores the airline’s problems with maintenance.

“It’s clear that Allegiant’s bare-minimum approach to its operation isn’t working,” said Dan Wells, president of Teamsters Local 1224.

The FAA decision to move up the Allegiant review was previously reported by the Tampa Bay Times.

Allegiant Air is a unit of Las Vegas-based Allegiant Travel Co.

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VW chief says he apologized to President Obama Thu, 28 Apr 2016 23:33:57 +0000 FRANKFURT, Germany — Volkswagen’s CEO says he apologized in person to President Obama for the carmaker’s emissions scandal, in which it rigged its cars to cheat on diesel engine pollution tests.

CEO Matthias Mueller said he held a “two minute” conversation with the president during his visit to Hannover, Germany, this week.

“I took the opportunity to apologize to him personally for this matter,” Mueller said during the company’s annual news conference Thursday in Wolfsburg, Germany.

“I also expressed my thanks for the constructive cooperation with his authorities and naturally expressed the hope that I can continue to fulfill my responsibilities for 600,000 workers, their families, the suppliers, the dealers,” Mueller said.

The U.S. Environmental Protection Agency could levy fines of up to $18 billion, but analysts think the punishment will not be that drastic.

Volkswagen seemed to endorse that view by saying it had set aside 7.0 billion euros globally for legal costs from 2015, on top of 7.8 billion euros – or $8.8 billion – to cover fixes and an offer to buy back some 500,000 defective cars.

Overall, the company deducted 16.2 billion euros from last year’s earnings to cover the costs of the scandal, in which it fitted cars with software that enabled them to pass tests but then turned emissions controls off during everyday driving.

The scandal broke when the EPA took action against Volkswagen. Some 11 million cars worldwide have turned out to have the software.

Mueller said Thursday that recalling and fixing the cars that were rigged to cheat on the tests “will remain our most important task until the very last vehicle has been put in order.”

Analysts say the impact of lower sales could make the final bill much higher than the company’s figure. Volkswagen says it is reporting costs that it knows about at the present time.

The company said last week that it lost 1.5 billion euros on an after-tax basis after a profit of 11.1 billion euros in 2014.

Volkswagen is currently working out a settlement with U.S. authorities in federal court in San Francisco, and has said that would include an offer to buy back as many as 500,000 of the just under 600,000 defective vehicles.

Mueller also used the company’s annual news conference to sketch out a plan to focus more on electric vehicles and services such as car-sharing as it seeks to get past its emissions scandal.

He stressed that Volkswagen’s car business remains “fundamentally sound” but detailed a promised plan to emphasize digital services and zero-emissions vehicles. The company would soon form a legally independent company to promote business in mobility services, which can include things such as ride-sharing apps and car-sharing, he said.

Mueller said the company would “make electric cars one of Volkswagen’s new hallmarks” with 20 new models by 2020.

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Amazon’s strategy built on Prime fees Thu, 28 Apr 2016 23:00:00 +0000 NEW YORK — Amazon is clearly entering its Prime. Meaning, of course, its $100 annual membership program, now a decade old, which has accomplished the remarkable feat of convincing millions of people to pay an annual fee for the privilege of, well, shopping.

Prime is now central to Amazon’s strategy of dominating the world of commerce. What started as a yearly fee for free two-day shipping now offers a sometimes bewildering array of perks, including household product subscriptions, one- and two-hour Prime Now delivery, streaming music and video, e-books, groceries (for an additional $200 a year), photo storage and more.

“Prime has become an all-you-can-eat, physical-digital hybrid,” Amazon founder and CEO Jeff Bezos wrote in his annual shareholder letter this month. He wants the service to be such a good deal that you’d be “irresponsible” not to sign up, he wrote.

Why the emphasis on Prime? Simply put, members of the loyalty program shop more frequently and spend more money, analysts say.

Prime shoppers helped drive Amazon’s surprise profit surge in the first quarter. Shares of the e-commerce giant jumped in after-hours trading Thursday after it reported a 28 percent jump in revenue, to $29.13 billion. Net income was $513 million, compared to a loss in the year-earlier quarter.

Amazon doesn’t release detailed numbers on Prime, although Bezos wrote that Prime has “tens of millions” of subscribers. Wedbush Securities analyst Michael Pachter estimates there are about 50 million Prime members.

Even a 25 percent price increase in 2014, the only one for Prime in 10 years, hasn’t appreciably dampened enthusiasm for the program. Membership grew 51 percent last year, including 47 percent growth in the U.S., according to Bezos.

Pachter estimates that Prime members spend about four times what others do, and account for about a third of all Amazon purchases. “That’s why Prime matters,” he said.

Tawnie Knight in Tucson, Arizona, joined Prime about two years ago for the convenience of free shipping. Since then, Amazon has become her default shopping site.

“I call it the $100 cart, because every time I go on there I spend about $100,” she said. “Before Prime I probably spent around the same amount, just with other retailers like Wal-Mart.”

Brandon Kraft joined Prime when it began 10 years ago to get cheap textbooks while in school. Now he finds it essential – with five kids ranging from 17 months to 6 years at home – for ordering diapers and wipes and other household goods.

“I think it’s fair to say we spend $125 or $150 a month at Amazon that we wouldn’t have been spending if we didn’t have Prime,” Kraft said. “We go to the Amazon site first when we need something, and if they don’t carry it we start the actual shopping process of looking elsewhere.”

Of course, Amazon Prime isn’t for everyone. Those that shop infrequently online won’t find the $100-a-year fee worth it. With an estimated 244 million registered Amazon accounts, a large majority of Amazon shoppers – roughly 80 percent, in fact – haven’t signed up yet.

Amazon continues to add Prime offerings to entice more users. Last week, Amazon started offering a monthly Prime subscription for $11 a month, aimed at hooking shoppers during the holidays when the majority of Prime members sign up. In 2015, 3 million shoppers joined Prime in the third week of December alone.

Amazon also introduced a standalone video service for $9 a month, setting itself up to directly compete with other streaming services such as Netflix.

Investors have long griped about Amazon’s strategy of investing the revenue it makes into new offerings, leading to little or no earnings growth. But the first quarter results were the fourth in a row in which Amazon reported a profit, which some analysts interpret as a willingness to rein in costs when needed.

Chief financial officer Brian Olavsky, however, told reporters on a conference call that the company’s profits stem mostly from strong growth in sales. The company isn’t slowing its investments, he said, citing recent spending on logistics and original programming for its streaming video service.

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Amazon’s market value soars Thu, 28 Apr 2016 22:23:44 +0000 SEATTLE — Amazon’s market value surged to near record levels as the company widely beat Wall Street’s expectations in the first quarter.

The tech and retail giant posted profit of $513 million, or $1.07 per diluted share, nearly doubling the 58 cents expected by analysts and swinging from a $57 million loss in the same quarter last year.

Revenue rose 28 percent to $29.1 billion, also surpassing analysts’ expectations of $28 billion.

Operating cash flow trailing over 12 months, a key metric, rose 44 percent to $11.3 billion vs. $7.8 billion.

Shares rose to $679.06, or 12.80 percent, in after-hours trading. That’s not far from its peak of $696.44, seen last December, and brings the company’s market capitalization north of the $300 billion mark.

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Chipotle opens in Portland as chain works to recover from 2015 food poisonings Thu, 28 Apr 2016 19:39:20 +0000 The first Chipotle Mexican Grill in Portland has opened at a time when the publicly traded restaurant chain is scrambling to recover its reputation and customers after multiple incidents of food poisoning.

The Portland Chipotle opened April 17 at 45 Marginal Way, formerly the site of Century Tire. The Bayside property has been redeveloped by Portland-based Northland Enterprises and renamed Century Plaza. Northland said in a news release that a T-Mobile store also will be opening soon on the property.

Chipotle made financial headlines this week when the Denver-based company reported that same-store sales were down nearly 30 percent in the first quarter compared with a year earlier. The news sent Chipotle’s stock plummeting because the sales decrease was even greater than investors had anticipated. In the past six months, the company’s stock has lost almost half its previous value.

After enjoying years as a darling of the corporate restaurant world, Chipotle’s reputation as a healthy alternative to hamburger chains took a serious hit in 2015. Two major E. coli outbreaks were linked to Chipotle restaurants in Washington, Oregon, California, Minnesota and several other states. Outbreaks of norovirus and salmonella also were linked to the chain.

Chipotle implemented a number of changes to its supply chain and food preparation methods as a result of the outbreaks. In February, the U.S. Centers for Disease Control and Prevention determined that the Chipotle-related E. coli outbreaks had ceased.

Northland purchased the former Century Tire property from Atlantic Bayside Investments in 2015. In addition to the Century Tire site, Northland also acquired 1 Marginal Way, 200 Kennebec St. and 202 Kennebec St., all of which it plans to redevelop. Century Tire closed in February 2014 after almost 90 years in business at 45 Marginal Way.

“It’s always exciting to see business come to life in an area that’s being redeveloped,” said Josh Benthien, who along with business partner Rex Bell is a principal owner of Northland. “Since the closing of Century Tire, the neighbors have been eager to see the area bounce back. It’s been a complex project, but we’ve worked closely together with Portland City Hall, and it’s nice to see that work come to fruition.”

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Maine, New Balance officials praise panel’s approval of military shoe-buying policy Thu, 28 Apr 2016 16:36:52 +0000 Shoe manufacturer New Balance applauded an amendment to the National Defense Authorization Act championed by members of Maine’s congressional delegation that would force the Department of Defense to buy American-made athletic shoes.

The amendment – which would require the department to adhere to a 2014 policy closing a loophole that allowed it to issue cash vouchers rather than buy U.S.-made athletic shoes – was approved late Wednesday night by the House Armed Services Committee. The defense authorization act, which sets the budget and policy for the department, must be approved by the full House and Senate.

The amendment is a boost to New Balance, which employs 900 workers at factories in Skowhegan, Norridgewock and Norway and has developed a shoe that complies with Defense Department standards.

The amendment “is the strongest language we’ve seen to date that will actually force the Department of Defense to follow the law,” Matt LeBretton, vice president of public affairs at New Balance, said Thursday.

“This is a huge step forward for us,” he said. “We’re as close now as we’ve ever been to having our 900 people that work for us in Maine make shoes for the military.”

U.S. Rep. Bruce Poliquin issued a statement Thursday calling the amendment “a victory in the battle to grow and protect the 900 jobs in Skowhegan, Norridgewock and Norway where hard-working Mainers manufacture the highest-quality shoes in the world.”

“This is a win for the American taxpayer as well, because tax money should be spent with American workers and products, not foreign manufacturing, wherever possible,” Poliquin said.

Previous language in the act allowed the Department of Defense to bypass the Berry Amendment, which requires the military to buy uniforms, including shoes, from U.S. manufacturers. The department has said that no U.S.-made athletic shoes complied with the Berry requirements, including that all the elements used in making the shoe are U.S. products. In 2014, the Defense Department promised to start providing athletic shoes to military members as long as they met the guidelines, and in 2015 New Balance said it had developed a shoe that did.

Poliquin, a Republican representing Maine’s 2nd Congressional District, where all three of Massachusetts-based New Balance’s Maine factories are located, worked with Massachusetts Rep. Niki Tsongas on changing the legislation and co-sponsored the Stepping Up for American Workers and Troops Act, which requires the Department of Defense to follow the 2014 shoe policy. Democratic Rep. Chellie Pingree, of Maine’s 1st District, co-sponsored the measure.

A spokesman for Poliquin’s office said Thursday that the language in the amendment to the defense budget is identical to the bill and is “very likely” to be approved by the House, probably next month.

Maine’s senators, Republican Susan Collins and independent Angus King, also have been working on the issue. They introduced a companion bill last week that would require the Department of Defense to provide military recruits with American-made athletic shoes upon arrival at basic training.

Maine’s congressional delegation increasingly has pressured the Defense Department to adhere to the 2014 promise, with Collins and King introducing legislation in 2013 to encourage compliance with the Berry Amendment.

During an Appropriations Committee hearing on the defense budget Wednesday, Collins chided Secretary of Defense Ashton Carter for the department’s continued failure to keep the 2014 promise.

LeBretton said the Defense Department’s stance has hurt New Balance.

“Based on the department’s own policy change from two years ago, we projected we would have a certain number of pairs being made in the factories that aren’t being made. So that certainly is not a good thing,” he said.

On Thursday, state Rep. Jeff McCabe, D-Skowhegan, applauded the proposed defense act change.

“This bipartisan effort is a win for New Balance workers in Skowhegan, Norridgewock and Norway,” McCabe said. “For too long, New Balance workers have been waiting for the military to fulfill its promise to our manufacturers.”

Poliquin’s statement said that by issuing the vouchers rather than buying U.S.-made athletic shoes for military recruits, the Defense Department has spent about $180 million elsewhere. These are “critical funds that could have gone to American jobs and manufacturing,” he said.


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Comcast gets its wish, buys DreamWorks Animation Thu, 28 Apr 2016 13:58:13 +0000 NEW YORK — Comcast is buying DreamWorks Animation, the film company behind the “Shrek,” “Madagascar” and “Kung Fu Panda” franchises, for about $3.55 billion, strengthening its presence in the important and growing business of children’s entertainment.

DreamWorks stockholders will receive $41 for each share they own. That’s a 24 percent premium on the company’s Wednesday closing price of $32.20. The companies put the deal’s value at about $3.8 billion.

DreamWorks will become part of the Universal Filmed Entertainment Group, which includes Universal Pictures. The studio has churned out hit animated movies through its Illumination label, including the “Minions” sequel, and it has some Dr. Seuss projects in the works such as “How the Grinch Stole Christmas.”

The nation’s largest cable company said the deal gives NBCUniversal, a unit of Comcast Corp., a “broader reach to a host of new audiences in the highly competitive kids and family entertainment space, in both TV and film.” In addition to the cartoon franchises, DreamWorks also owns what Comcast called a “thriving TV operation” with its AwesomenessTV network of online video creators and a lengthy contract to create shows for Netflix.

The deal solves what Cowen and Co. analyst Doug Creutz “would have been a very difficult succession plan had DWA remained independent, as to a certain extent we think the company had been held together purely through (CEO Jeffrey) Katzenberg’s force of will.”

The analyst said that while he is “skeptical about the strategic logic” for Comcast in making the deal, it is an excellent one for DreamWorks.

“Despite some positive recent developments with TV production and the Awesomeness asset, DWA remains a company that has not generated significant earnings since 2010,” Creutz wrote. “We think DWA is worth far less than either Marvel or Lucasfilm, for which Disney paid comparable prices when they acquired those companies.”

Once the deal closes, DreamWorks co-founder Katzenberg will become chairman of DreamWorks New Media. He’ll also serve as a consultant to NBCUniversal. Creutz called it a “happy exit.” Katzenberg owned nearly 10 million shares – meaning he’ll receive over $400 million – and controlled 60 percent of the voting shares in the company, which spun off from DreamWorks Pictures as a publicly traded company in 2004. DreamWorks Pictures, backed by Steven Spielberg, produces live action movies like “Bridge of Spies” and is not part of the deal.

Earlier this year, DreamWorks expanded a licensing deal with Netflix Inc. to have the online video service feature more of its series and movies. The expanded licensing agreement announced in January allows Netflix to showcase several new DreamWorks series, including “Trollhunters,” a fantasy created by acclaimed movie director Guillermo del Toro. The deal gives Netflix more video likely to appeal to children, an audience segment that has played an important role in growing its service to 81.5 million subscribers in the first quarter.

The boards of both Comcast and DreamWorks have approved the transaction, which is targeted to close by year’s end.

Shares of DreamWorks Animation SKG Inc. jumped $7.76, or 24 percent, to $39.97 while Comcast added 9 cents to $61.39 in afternoon trading.

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U.S. economic growth slows in first quarter Thu, 28 Apr 2016 12:46:16 +0000 WASHINGTON — Growth by the U.S. economy fell off sharply in the first three months of 2016, posting its worst quarterly performance in two years amid a global slowdown, the Commerce Department said Thursday.

The broadest measure of the nation’s economic output, known as gross domestic product, increased at an annual rate of 0.5 percent from January through March. That was down from a weak 1.4 percent reading in the fourth quarter and 0.2 percentage points below analysts’ forecasts.

The last time the economy performed worse was in the first quarter of 2014, when severe winter weather in much of the nation caused the GDP to contract at a 0.9 percent annual rate.

This year’s first-quarter slowdown was driven by declines in business investment, exports and federal government spending, the Commerce Department said.

Growth in consumer spending, a key driver of the economy, also declined as Americans became more cautious in the wake of a financial market downturn earlier this year.

The 1.9 percent increase in consumer spending was down from 2.4 percent in the fourth quarter of 2015 and the weakest in a year.

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For a company that repairs electric lines, safety is the first priority Thu, 28 Apr 2016 08:00:00 +0000 Coutts Bros. is a 53-year-old Randolph construction company that has developed a specialty in inspecting and repairing electric lines. The company started small –”it was two brothers and a tractor,” said general manager Brad Stout – but now has 45 employees who work in New York and New England. Because electric supplies are tight, the company’s workers often work on live lines. Stout said the company is now stressing safety – and using drones in pursuit of that – because potential clients consider safety commitments when Coutts Bros. is bidding on a job. The company won Associated Builders and Contractors 2015 National Safety Merit Award in recognition of its efforts to improve safety for its workers.

Q: When did you start this effort to improve safety?

A: We launched it about three years ago to make safety a major part of what we do. We hired some key people, including a new safety director, and changed the way we trained people using a behavior-based process – looking at what we’re doing and how we’re doing it and correcting things before they become incidents.

Our entire industry is really shifting the focus to safety being the first priority. Previously, we were basically tracking our incidents and then making adjustments based on that.

Now we meet every Monday morning and we go through those near-misses to make sure everyone knows what happened and how we can make sure it never happens again.

Q: Given your line of work, safety must be a constant issue.

A: We work on energized lines and we maintain a safe distance and use tools that are safe. Our guys are very good at live line work. Our processes are detailed and planning for them is a commitment. But it’s the smaller things that you have to focus on, too – the slips, trips and falls that are dangerous. It’s always those simple things that come around to bite you. We use that in our planning.

Q: Are your clients putting an increased emphasis on your safety?

A: All owners, whether it’s utility companies or municipalities or the state, everyone has a focus on whether they employ a safe company. Associated Builders and Contractors (an industry group) is focused on safety. It’s more important to make sure our guys go home safe every day. That should be the focus of every owner and contractor.

Q: Do clients ask to see your safety records when you’re bidding on a job?

A: It’s part of the review for every proposal we send out. They want your safety record as well as the safety plan for the project you’re bidding on. It’s not acceptable to allow people to be hurt on your job site. There was a time when, in the construction industry, fatalities were built into what you did. Now the whole industry is focused on making sure our guys go home safe. Not many people realize how much safer these places are to work.

Q: Do you think you’re ahead of the curve on safety?

A: I would say we’re ahead of the curve. We got that national safety award and that went to only 16 companies in the nation. It came down to a video call to speak to the people who gave out the award. They asked a lot about our philosophy and our management approach. We have an apprenticeship program and we have UAS (unmanned aerial systems) in places where it’s inherently risky for people to get to.

Q: What’s your apprenticeship program?

A: It’s a program for line workers, where they can come in and we train them to be first-class line workers. It takes between three and five years and its approved by the Department of Veteran’s Affairs and the University of Maine. It’s been very successful. Almost 25 percent of our staff is veterans.

Q: What about the drones?

A: We call it UAS. There’s a negative connotation with “drones.” My dad called me that if I wasn’t paying attention, so we’re trying to stick with “UAS.” You can put all sorts of sensors on them, like thermal imaging and high-definition video. You can add sonar and radar.

We were working with a couple of owners of hydro stations where when you do inspections, it requires people to climb walls or get in a boat in hard running water. If we can do those inspections with a machine, it’s faster and safer, and the information you gather is often more accurate.

Edward D. Murphy can be contacted at 791-6465 or at:

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Facebook earnings growth outshines those of other tech giants Thu, 28 Apr 2016 00:54:41 +0000 In this season of great earnings expectations, all the big tech names so far have disappointed – except for one.

Facebook bucked a string of dismal tech earnings Wednesday, beating Wall Street forecasts on almost every critical metric. The world’s largest social network said it grew to 1.65 billion monthly users and made $5.38 billion over the first three months of this year, more than the $5.25 billion many analysts were expecting. Profit was 77 cents a share, which blew away the 63 cents most analysts polled by Bloomberg had been expecting. The stock soared 8.5 percent in after-hours trading.

Of particular note was mobile advertising, which makes up 82 percent of Facebook’s ad revenues – a sign the company is making a successful transition to mobile, where many of its rivals are struggling.

Facebook executives attributed some of that success to the company’s efforts to streamline its ad-selling tools. “We’ve made it easier for (small- and medium-sized) businesses to use the same targeting tools and ad formats that our larger advertisers use,” Facebook chief executive Mark Zuckerberg said on a conference call with investors.

Sheryl Sandberg, Facebook’s chief operating officer, added that many marketers have told Facebook that trying to figure out the shift to mobile advertising is like the early days of television. The social network, she said, has made it a mission to help marketers specifically tailor their ads for a mobile world – where things must be shorter and often without sound.

Sandberg said Nestlé, for instance, tried running both a traditional television ad and a mobile-optimized ad on the site. The mobile version, she said, performed better in engagement and promoting product awareness. Other features, such as auto-captioning, have led people to spend 12 percent more time with an ad.

In terms of overall earnings results, it’s been a different story recently for many of the other big names in Silicon Valley. On Tuesday, Apple’s stock took a dive after it reported soft iPhone sales for the first time and its first revenue drop since 2003. Twitter stock also plunged after it said ad spending by big-name marketers was much weaker than it had expected. Last week, profit at Google’s parent company, Alphabet, missed Wall Street forecasts. So did Microsoft, on slowing growth in its cloud business.

Given the glum results from most big tech names and the lone bright spot of Facebook, should tech investors be worried about weakness in the broader sector?

Not so fast, said Sheraz Mian, research director at Zacks Investment Research. He thinks the earnings misses are part of a larger story.

“The lack of growth is an ongoing issue, not just in the tech sector but across the board as well,” Mian said. Tech firms have been performing a little better than others for the past couple of earnings seasons, Mian said, setting high expectations from analysts.

Some of the companies also face other problems, he said. Apple’s struggles as smartphone growth has slowed have been well-documented. Microsoft has also been fighting a long battle, against shifting technologies that have hurt its traditional enterprise business. Google has been criticized for spending too much on long-term bets that haven’t paid off yet.

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Canadian drugmaker’s pricing tactics under fire Thu, 28 Apr 2016 00:38:08 +0000 WASHINGTON — Lawmakers accused Valeant Pharmaceuticals of gouging patients to reward Wall Street investors during a hearing Wednesday scrutinizing the embattled drugmaker’s pricing tactics.

The blistering criticisms from Senate Republicans and Democrats came as Valeant’s outgoing CEO expressed regrets for the most egregious price increases, and a billionaire hedge fund investor defended the company’s business model.

Valeant’s stock price surged for years, fueled by a strategy of gobbling up smaller companies and raising prices on niche drugs – bypassing the huge research and development investments typical of the drug industry. But the company’s approach has drawn scrutiny from federal prosecutors, Congress and its own investors.

At the hearing, members of the Senate Committee on Aging laid into the Canadian drugmaker’s strategy of acquiring companies, slashing spending and jacking up prices. “Valeant’s monopoly model operates at the expense of real people,” said Sen. Susan Collins, R-Maine.

]]> 0 Wed, 27 Apr 2016 20:38:08 +0000
Amazon found liable for charging parents for kids’ unauthorized in-app purchases Thu, 28 Apr 2016 00:34:18 +0000 A federal court found Amazon liable for charging parents for unauthorized in-app purchases made by kids, siding with the Federal Trade Commission in a case that stretched back to 2014.

The key question in the legal battle was whether Amazon’s app store made it too easy for children to buy virtual goods with real money inside games labeled as “free” without parental permission.

Following the launch of the Amazon app store in 2011, the company fielded thousands of complaints about unauthorized charges made by children in apps where they could purchase virtual items, the FTC alleged in a suit seeking refunds for consumers.

The practice was unfair because the e-commerce giant’s disclosures about in-app purchases didn’t do enough to explain to consumers what they were authorizing, the agency argued.

Amazon, whose founder Jeff Bezos also owns The Washington Post, has changed the in-app purchase interface over the years and added more parental controls, according to court filings. It also said it refunded consumers who complained.

In a ruling Tuesday, a federal judge granted the FTC a summary judgment that found the tech giant responsible for the charges.

“(W)hile entering a password linking her Amazon account to a new device, a reasonable consumer unaware of the possibility of in-app purchases would not assume she was authorizing unforeseen charges,” U.S. District Judge John Coughenour wrote in his order.

]]> 0 Wed, 27 Apr 2016 20:34:18 +0000
FBI won’t tell how it accessed iPhone Thu, 28 Apr 2016 00:22:08 +0000 WASHINGTON — The FBI said Wednesday that it will not publicly disclose the method that allowed it to access a locked iPhone used by one of the San Bernardino attackers, saying it lacks enough “technical information” about the software vulnerability that was exploited.

The decision resolves one of the thorniest questions that has confronted the federal government since it revealed last month, with minimal details, that an unidentified third party had come forward with a successful method for opening the phone. The FBI did not say how it had obtained access, leaving manufacturer Apple Inc. in the dark about how it was done.

The new announcement means that details of how the outside entity and the FBI managed to bypass the digital locks on the phone without help from Apple will remain secret, frustrating public efforts to understand the vulnerability that was detected and potentially complicating efforts to fix it.

In a statement Wednesday, FBI official Amy Hess said that although the FBI had purchased the method to access the phone – FBI Director James Comey suggested last week it had paid more than $1 million – the agency did not “purchase the rights to technical details about how the method functions, or the nature and extent of any vulnerability upon which the method may rely in order to operate.”

The FBI’s explanation raises the possibility that it applied a purchased exploit against what it described as a potentially key piece of evidence in a sensational terrorism investigation without knowing the full technical details of what it was doing to that iPhone.

The government has for years recommended that security researchers work cooperatively and confidentially with software manufacturers before revealing that a product might be susceptible to hackers. The Obama administration has said that while disclosing a software vulnerability can weaken an opportunity to gather intelligence, leaving unprotected Internet users vulnerable to intrusions is not ideal either.

An interagency federal government effort known as the vulnerabilities equities process is responsible for reviewing such defects and weighing the pros and cons of disclosing them, taking into account whether the vulnerability can be fixed, whether it poses a significant risk if left unpatched and how much harm it could cause if discovered by an adversary.

Hess, the executive assistant director of the FBI’s science and technology branch, said Wednesday the FBI did not have enough technical details about the vulnerability to submit it to that process.

“By necessity, that process requires significant technical insight into a vulnerability. The VEP cannot perform its function without sufficient detail about the nature and extent of a vulnerability,” she said.

]]> 0 Wed, 27 Apr 2016 20:22:08 +0000
Chobani shares fruits of labor with workers Thu, 28 Apr 2016 00:21:08 +0000 Greek yogurt is known for being rich in flavor and protein. Now, some employees at Chobani could become rich themselves.

On Tuesday, founder and CEO Hamdi Ulukaya announced that he would be giving all of his 2,000 full-time workers awards that could be worth up to 10 percent of the privately held company’s future value if it becomes public or is sold. Each employee will be given “Chobani Shares,” or award units, based on workers’ tenure and role at the company, which could convert to cash or shares in the event of an initial public offering or a sale. The value of the awards are dependent on company performance, however, and have the potential to be worth nothing if the company doesn’t meet performance metrics.

The New York Times said that if Chobani was valued at $3 billion, the average employee payout could be $150,000, and some long-tenured employees could see windfalls possibly worth more than $1 million. (A Chobani spokesman declined to confirm those amounts.)

Ulukaya, a Turkish immigrant who has pledged to give away half his wealth and advocated for business leaders to do more to hire refugees, announced the news to workers Tuesday. He said in a memo to employees that the award was not a gift, but “a mutual promise to work together with a shared purpose and responsibility,” he wrote. “How we built this company matters to me, but how we grow it matters even more. I want you to be a part of this growth – I want you to be the driving force of it.”

Bruce Elliott, manager of compensation and benefits for the Society for Human Resource Management, called the move highly atypical. “It’s unusual to see that in food services and manufacturing,” he said in an interview. While it’s relatively common among startups in the tech industry, Elliott said, it’s rare to see founders offer employees such awards at this stage of a company’s growth. Chobani was founded in 2005 and has grown rapidly; after struggling with managing a plant expansion and a 2013 recall, it reached $1.6 billion in 2015 sales, according to Euromonitor.

Ulukaya’s move comes before TPG Capital, which made an investment in Chobani in 2014 in the form of a $750 million loan, can buy a stake in the company, according to the New York Times report. The deal’s terms, according to reports from that year, included warrants that could give TPG an ownership stake of 20 percent or more. The award for employees would essentially dilute TPG’s potential ownership, the Times reported, though it also noted that Ulukaya said the employee award was among the initial terms of the deal.

A spokesperson said that the company’s offer to employees was “absolutely not” intended to dilute TPG’s potential stake, that the move was something Ulukaya had long wanted to do, and that the decision was fully supported by the board, which includes TPG representatives. A TPG spokesperson, reached via email, declined to comment.

]]> 0, 27 Apr 2016 20:21:08 +0000
Unum reports rise in operating income Wed, 27 Apr 2016 21:45:44 +0000 Unum Group’s first-quarter operating income increased 6.7 percent from a year earlier and beat Wall Street expectations by 4 cents a share, the company reported Wednesday.

The Chattanooga, Tennessee-based disability insurance provider, which has about 2,900 employees in Maine, reported after-tax operating income of $226.8 million, or 95 cents a share, compared with $224.8 million, or 89 cents a share, in the first quarter of 2015.

Unum’s overall net income for the quarter, including gains and losses on the company’s investment portfolio, was $210.6 million, down slightly from $212.9 million a year earlier.

Unum President and CEO Richard McKenney said in a news release that the company was off to a strong start in 2016 with solid growth in premiums and stable employee benefits payments.

“Additionally, our financial flexibility continues to help create value for our shareholders as we actively repurchased our shares while investing in our future growth with the planned acquisition of Starmount Life Insurance Co.,” McKenney said. “This platform will broaden our employee benefits offerings as we expand in the dental and vision markets.”

During the first quarter, Unum bought back about 3.7 million outstanding shares at a cost of roughly $100 million, reducing the number of outstanding shares to 237.7 million. That number was down from 252.2 million shares in the first quarter of 2015.

Unum trades on the New York Stock Exchange under the symbol UNM. It released the earnings report after the market closed Wednesday. The company’s share price increased by about 1 percent during the day’s trading to close at $34.15.

]]> 0 Wed, 27 Apr 2016 18:03:26 +0000
Susan Collins chides secretary of defense over athletic shoe issue Wed, 27 Apr 2016 20:39:03 +0000 U.S. Sen. Susan Collins took the opportunity of a Department of Defense budget review to once again call on the military to buy American-made shoes, a promise the department made two years ago.

Collins, a Maine Republican and a senior member of the Appropriations Committee, told Defense Secretary Ashton Carter she was disappointed in the department’s continuing refusal to comply with the Berry Amendment, while he was testifying at a committee budget hearing Wednesday, according to a news release from Collins’ office.

The Berry Amendment requires the U.S. military to provide its personnel with American-made equipment and uniforms to the greatest extent possible. The defense department agreed in 2014 to start buying U.S.-made athletic shoes for recruits rather than giving them vouchers to buy their own athletic shoes. The department already issues similar items such as combat boots and service shoes, according to the release.

The move would be a boon to New Balance, which has shoe manufacturing plants in Skowhegan, Norridgewock and Norway, where about 900 people are employed. The company is one of a few that manufactures athletic shoes in the U.S.

“Let me just express to Secretary Carter my disappointment in the department’s reversal of its commitment to provide American-made athletic footwear to new recruits,” Collins said. “Under the longstanding Berry Amendment, our troops are supposed to be outfitted with clothing and footwear that is made in this country, and that’s why I have recently introduced legislation that has been cosponsored by several of my colleagues to require the Department to follow the law.”

Last week, Collins and Sen. Angus King, I-Maine, introduced bipartisan legislation that would require the defense department to provide initial entry service members with American-made athletic shoes upon arrival at basic training. “This bill is part of a years-long effort focused on ensuring that our troops are equipped and outfitted with high-quality uniform items made in the United States. It also supports domestic manufacturing and protects hundreds of jobs for hardworking and dedicated American workers,” the release said.

The military has said that no U.S.-made shoes comply with the Berry Amendment requirements, but New Balance has manufactured a shoe in the past year that the company says is “100 percent Berry-compliant.”

]]> 0, 27 Apr 2016 16:39:03 +0000
Fed keeps key interest rate unchanged Wed, 27 Apr 2016 18:16:07 +0000 WASHINGTON — The Federal Reserve is keeping a key interest rate unchanged against the backdrop of a global economic slump and providing no hint of when its next rate hike may occur.

A statement the Fed issued after its latest policy meeting notes that the United States is enjoying solid job gains despite a slowdown in growth. The Fed says it also expects inflation to move toward its 2 percent target from persistently low levels.

But with China, Europe and other major economies struggling and potentially threatening U.S. growth, the Fed decided to hold off on a further rate increase.

The Fed raised its benchmark rate from a record low near zero in December. Some economists say it may not raise it again before the second half of this year.

Concerns have been rising about the world economy, and any major international slump would, in turn, hinder U.S. growth. A sharp slowdown in China — the world’s second-largest economy after the United States — has already hurt the developing world. Europe is straining to gain momentum, and Japan is hobbled by wary consumers and an aging population.

Even in the United States, despite a robust job market, key sectors like manufacturing and energy have been bruised by a strong dollar and shrunken oil prices. Consumers have barely stepped up their spending this year.

And on Thursday, the government is expected to estimate that the U.S. economy grew at a tepid annual rate under 1 percent in the January-March quarter. Some forecasters think growth might have been as weak as 0.3 percent, which would mean the economy nearly stalled out last quarter.

What’s more, U.S. inflation is running well below the Fed’s optimal level of 2 percent.

In the meantime, far from considering rate hikes, other major central banks are weighing steps to further ease credit, increase inflation and bolster growth.

On Thursday, for example, when the Bank of Japan meets, a key topic will be what else it might do to fight economic weakness, raise inflation and blunt a rise in the yen’s value against the dollar, which hurts Japan’s exporters. In January, in a desperate bid to raise inflation, Japan’s central bank introduced negative rates. Yet inflation and growth remain stuck near zero.

Last week, Mario Draghi, head of the European Central Bank, made clear he was ready to launch more stimulus efforts if needed to energize the 19-nation eurozone economy. That pledge came after the ECB had already expanded its stimulus programs in March.

China’s sliding economy has stabilized after worries about its growth had rocked financial markets in January. But now, a new challenge has raised international concerns: A June 23 referendum in which Britain will decide whether to leave the European Union. President Barack Obama and other world leaders have warned that a British exit from the EU could threaten the global economy.

Because that vote will occur just a week after the Fed’s June 14-15 meeting, some analysts have suggested that the U.S. central bank would avoid any rate hike in June for fear it could rattle markets ahead of the British vote.

Since raising rates from record lows in December, the Fed has grown concerned about economic pressures from overseas and has signaled its willingness to wait for those pressures to ease.

The Fed’s rate hike in December was its first in nearly a decade, and it ended a seven-year period in which the central bank had kept its benchmark rate near zero. At the December meeting, the Fed signaled that four additional rate hikes could occur in 2016 but at its March meeting, it cut that expectation from four to just two rate hikes.

A solid majority of officials appear to support the cautious approach being pursued by Chair Janet Yellen. In her most recent speech on the economy, Yellen said she still envisioned only a gradual pace of rates increases in light of global threats. .

]]> 0 Wed, 27 Apr 2016 20:37:22 +0000
WEX boosts first-quarter earnings against headwinds Wed, 27 Apr 2016 15:27:56 +0000 Payment processor WEX Inc. improved its financial performance and beat industry expectations in the first quarter, despite continued economic challenges that included lower gasoline prices and unfavorable foreign currency exchange rates.

The South Portland-based company, which provides payment-processing technology to the transportation, travel and health care industries in the United States and abroad, reported first-quarter revenue Wednesday of $205.9 million, up 2 percent from $202.3 million in the first quarter of 2015.

Net income for the quarter was $23.1 million, or 59 cents a share, compared with $22.3 million, or 57 cents a share, for the first quarter of 2015. The company’s quarterly earnings of 97 cents a share before adjusting for changes in fuel prices and currency exchange rates beat analyst expectations by 9 cents.

Positive developments for WEX included a 3 percent increase in the average number of vehicles it serviced worldwide compared with a year earlier. Total fuel transactions processed by WEX increased 2 percent from the first quarter of 2015 to 99.6 million, the company reported. Payment-processing transactions increased 9 percent to 89.1 million.

In addition, purchases of the company’s travel and corporate services cards grew 18 percent to $4.9 billion, from $4.2 billion in the first quarter of 2015.

On the negative side, the average customer expenditure per payment-processing transaction decreased by 25 percent from the first quarter of 2015 to $48.67, WEX said. The U.S. retail fuel price decreased 23 percent to $1.97 per gallon from $2.57 per gallon in the first quarter of 2015, reducing the company’s revenue per transaction. WEX earns a small percentage of the total amount of each payment it processes.

In an interview Wedneday, WEX President and CEO Melissa Smith said the company’s lack of acquisitions in the first quarter led to an earnings statement that is relatively “clean” and offers a good reflection of its actual performance.

WEX has grown significantly through acquisitions over the past few years, but Smith said its focus for 2016 is on “organic” growth, attracting new customers and developing new products and services.

For example, the company recently introduced ClearView, a web-based analytics tool that integrates and analyzes fleet-related data to uncover cost-saving opportunities for customers in the transportation industry. Smith said interest in the product has been high.

“There’s a lot of sizzle around it,” she said.

While WEX cannot control certain variables affecting its business, such as fuel prices, Smith said the company has worked to minimize the overall impact of those variables by improving efficiency and branching out into areas such as travel and health care, where the price of gasoline is not a factor. The company’s health care payments business has grown by 35 percent over the past year, she said.

“We’ve been moving for a while to diversify the business,” Smith said.

Still, WEX is keeping a close eye on the futures market to get a sense of where fuel prices are headed next. Smith said the company anticipates a rise in fuel prices in the summer, followed by a decline later in the year. It anticipates that the average price per gallon for gasoline in the U.S. will be about $2.14 per gallon for the entire year.

WEX is a publicly held company that is listed on the New York Stock Exchange under the symbol WEX. It has offices in 10 countries and employs more than 2,000 people worldwide, including 700 in Maine.

The company’s share price went up more than 6 percent following Wednesday morning’s earnings release. It closed at $95.70, up $5.45 for the day.

The price boost was partly the result of an upward revision in the company’s projected 2016 earnings. WEX reported that it now anticipates generating $879 million to $909 million in revenue for the year, up from an earlier projection of $860 million to $890 million. It also adjusted its net income projection for 2016 upward from $3.80 to $4.10 per share to $4.07 to $4.37 per share.

Investment research firm Zacks Equity Research issued a report Wednesday saying that WEX is a strong player in an industry – financial transaction services – that appears well-positioned for the future.

“(WEX) has seen solid earnings estimate revision activity over the past month, suggesting analysts are becoming a bit more bullish on the firm’s prospects in both the short and long term,” the report says.

Smith praised her employees for finding ways to improve the company’s performance at a time when economic conditions are less than ideal.

“Kudos to the people who work at WEX,” she said. “They really pulled it together.”

]]> 0 Wed, 27 Apr 2016 20:36:34 +0000
Natural gas pipeline riddle nears final answer in Maine Wed, 27 Apr 2016 15:27:56 +0000 State utility regulators will begin public hearings Thursday on a three-year-old plan to expand pipeline capacity and potentially lower energy costs by committing ratepayers to spend up to $75 million annually on natural gas purchases.

But after three years of study, it’s still unclear how much money – if any – utility customers would save by helping to increase the supply of natural gas, which is used to generate half of New England’s electric power.

By law, the overall cost of any investment must be offset by benefits to Maine electric and natural gas customers. If regulators endorse a plan, the governor must approve it.

The law was approved by the Legislature in 2013, when a frigid winter and skyrocketing natural gas prices in New England forced factories to curtail operations on the coldest days. Worried Maine lawmakers passed a bill they hoped would prod energy companies to expand the region’s pipeline capacity. The idea is that adequate gas supply in the winter, when demand is high for both heating and power generation, will keep wholesale energy prices from spiking to levels that are well above the national averages.

The bill directed the Public Utilities Commission to study whether it made sense for ratepayers, through utility contracts, to buy up to 200 million cubic feet of natural gas, at an annual cost of no more than $75 million.

Nearly three years later, the PUC is set to hold public hearings on the plan. Sessions are planned for Thursday and Friday, as well as next Tuesday. The PUC’s staff is scheduled to present its recommendations June 3, and the three-member commission could deliberate the case in late June.

But much has changed since 2013.

Natural gas wholesale prices are lower now than they’ve been in more than a decade. Slack demand during a warmer-than-average winter dropped wholesale electric prices in 2015 to the second-lowest level in 12 years.

Also down are prices for imported liquefied natural gas, which supplements domestic supplies.

A new pipeline expansion called the Algonquin Incremental Market project is set to begin pumping this fall, despite opposition from some residents and politicians in New York.

But at the same time, New England is losing generation from retiring nuclear power and oil units, and several new power plants planned for the future will burn natural gas.

So as the PUC starts to wrap up its protracted process, two questions are in the forefront:

Is Maine still at risk of experiencing another round of shortage-driven price hikes?

Or have market conditions changed in a fundamental way, making ratepayer investment unnecessary?


Those questions took on new urgency last week after Kinder Morgan, the nation’s largest energy infrastructure company, announced it was giving up on its Northeast Energy Direct pipeline proposal. The $3 billion project would have expanded the company’s Tennessee Gas Pipeline through Massachusetts and southern New Hampshire, bringing up to 1.2 billion cubic feet of shale gas from fields in Pennsylvania. It was one of three projects bidding to supply capacity to Maine, in the case before the PUC.

New England burns roughly 4.5 billion cubic feet of gas a day in the winter. For comparison, that’s equal to about 31 million gallons of heating oil.

Northeast Energy Direct was controversial from the start because it would have run 430 miles and created new pipeline corridors. Business interests and some consumer advocates voiced support for the promise of lower power bills. But environmental groups across New England, landowners along the proposed route and many politicians rallied against it, citing concerns ranging from the impacts of hydraulic fracturing during gas extraction to continued reliance on fossil fuels.

Tony Buxton, a Maine lawyer representing Kinder Morgan at the PUC, said the failure in Maine and the other New England states to make timely commitments influenced the company’s decision to walk away. Noting that five paper mills in Maine have closed during the PUC review process, he cautioned that the state could lose more of its manufacturing base if regulators don’t act soon.

The two remaining supply bidders in Maine are Spectra Energy’s Access Northeast project and the Portland Natural Gas Transmission System’s proposal, called Continent to Coast. Access Northeast would upgrade the existing Algonquin pipeline and add LNG storage to bring more gas to the region’s power plants. Continent to Coast would be able to transport gas into the Maritimes & Northeast Pipeline, at Westbrook.

Tim Schneider, the state’s public advocate, said his office has concluded that Maine ratepayers would be better off overall if the PUC approves a contract for some level of new gas capacity. But what’s still unknown is how much monthly electric bills would fall in order to offset the investment.

“The big question for the PUC is, what are those benefits?” Schneider said.


Pipeline opponents downplay any benefits, and draw a different conclusion from Kinder Morgan’s departure. They say the company recognized that wholesale gas price trends were down and it wouldn’t be able to sell enough capacity on its system to be profitable.

“The market reaction of Kinder Morgan answers the question,” said Greg Cunningham, a vice president at the Conservation Law Foundation. “If they felt that in the near term they could have made money, they would have stuck with it.”

Cunningham said the past three years have shown just how volatile energy markets are, and why utility customers shouldn’t backstop investments for multibillion-dollar energy companies. His group favors regional proposals currently being considered to meet added power demands through wind, solar and hydro power, as well as stepped-up energy efficiency.

Upgrading the region’s pipeline infrastructure has been a priority for Gov. Paul LePage, who blames high energy prices for contributing to rural Maine’s economic malaise. But Patrick Woodcock, his energy director, said the administration isn’t taking a position at the PUC, and he declined to offer an opinion on ratepayer participation in the shifting energy landscape. Woodcock did say the conditions that kept supply adequate and prices low last winter illustrate how important it is to have enough pipeline capacity.


As the public hearing stage approaches, Maine’s decision will likely play a small but important role in the future of the two remaining proposals, said Buxton, the attorney for Kinder Morgan. Maine’s share of the anticipated pipeline capacity is only 9 percent, based on the state’s electrical load. New Hampshire and Rhode Island would have the same shares as Maine. By contrast, Massachusetts’ share is 47 percent and Connecticut’s is 22 percent.

Regulatory proceedings are under way or planned in the other states, although decisions are farther off. And now that Kinder Morgan is out of the picture, groups that oppose any natural gas development are shifting their attention to Access Northeast.

In Maine, the PUC review has been exhaustive. It has compiled 417 separate filings and 74 requests for data from parties in the case that include pipeline companies, environmental groups, utilities and government agencies. Much time has been spent dissecting and refuting details of a cost-benefit analysis of the proposals by a consultant for the PUC. The report indicated ratepayer investment wouldn’t be worthwhile.

]]> 0, 28 Apr 2016 00:14:35 +0000
Fire-damaged Corsican Cafe in Freeport to be rebuilt, owners say Wed, 27 Apr 2016 10:34:28 +0000 The owners of a popular Freeport restaurant pledged to rebuild Wednesday even as workers cleaned up charred debris left by an early morning fire that destroyed the longtime family business.

Flames ignited by a second-floor bathroom fan that was left on overnight ripped through the second and third floors of the Corsican Cafe and Chowder House early Wednesday, said Freeport Fire Chief Darrel Fournier. The 146-year-old building at 9 Mechanic St., a short distance from Main Street and L.L. Bean’s flagship store, was a total loss.

Corsican co-owner Robin Wade swept blackened debris from around the building Wednesday afternoon as she watched workers from a restoration company board up the front door. Seeing a business she had owned for 30 years go up in flames was shocking, Wade said, but she was trying to stay upbeat.

“It was only a building, we have insurance, no one got hurt,” she said.

The second floor was destroyed and the first level was badly damaged by smoke and water, but firefighters managed to salvage some of the decorations and furniture, and the kitchen equipment is salvageable, she said. The remains of the building will likely be demolished, and Wade said she and her husband and co-owner, Ed Berg, intend to build a new restaurant in the same location.

“As long as we have the means, we will rebuild,” she said.

Wade said Freeport business owners, neighbors and friends had been offering comfort and support.

“All the other restaurant owners have come by to give me a hug,” Wade said. “Everybody’s called or come by.”

The fire also left the restaurant’s 10 employees looking for work. The Maine Department of Labor has scheduled a Rapid Response session for Friday to help them sign up for unemployment benefits and other services.

Adam Rowe, 27, has worked at the Corsican as a line cook off and on for almost 10 years. It was one of the best jobs he’s had, and the owners allowed him to work around his school schedule, Rowe said.

“I’m bummed out,” he said, looking up at the blackened building. “I don’t know what is going to happen next.”

Kelsey Fenwick, 27, who worked as a server, said many customers came back every year when they visited Maine.

She worked at the Corsican for two years, but remembered coming there to eat as a child. The small, tight-knit staff is very close to the owners, she said.

“I think all of us were like family, anyway,” she said.

The restaurant opened for its 30th season a few weeks ago and Wade was looking forward to a busy summer. In the past few years she had invested in new carpet, silverware and furniture, and last year put up a new sign outside.

Wade said she closed the restaurant early Tuesday afternoon so her employees wouldn’t have to drive on snowy roads. Then around 4 a.m. Wednesday, she got a call from the fire department telling her the restaurant was on fire.

“It was like a nightmare come true,” she said.

Wade and Berg were getting ready to hand the reins of the restaurant over to Nate Briggs, their son and the head chef. The restaurant was like a second home for him, she said.

“We were going to be here less and less, but now we’ll have to be here more and more,” she said.

Fournier, the fire chief, said his department was alerted to the fire at 3:02 a.m. by an alarm activation from within the restaurant. Bathroom fans can be a fire hazard if they are left running and heat up enough to ignite lint or other materials.

When the first fire crews arrived at 3:06 a.m., flames already were showing from the 1870s-era building. Fournier said the balloon framing used when the building was constructed has voids inside the walls that act as conduits and allow fire to spread quickly.

“They had heavy fire showing from the second-floor rear of the building,” he said. “The crews advanced a line into the second floor, but the fire conditions quickly escalated, which forced them out of the building.”

The department struck a second alarm to call in aid from surrounding towns. Crews evacuated residents of a building 10 feet behind the Corsican as a precaution, but the second building was not damaged, Fournier said.

Nobody was inside the Corsican building when the fire started, Fournier said. He estimated the loss of the building at $400,000.

Freeport’s fire department was assisted on scene by the Brunswick, Topsham, Pownal and Yarmouth fire departments. The Falmouth and Cumberland fire departments provided station coverage.

Kelly Edwards, executive director of the Freeport USA marketing association, said the restaurant was a big part of the community, and she hopes to help support the business and its employees as they deal with the loss.

“We will be part of a community effort to rally around them and get them back on their feet,” Edwards said.

Within hours of the fire, Corsican fans began posting messages of support on the restaurant’s Facebook page.

“Prayers for the well-being of everyone connected with your establishment,” wrote Michael Wallace. “It is a great presence in downtown Freeport.”

Stephanie Petkers, executive director of the Greater Freeport Chamber of Commerce, said the Corsican has been an “integral part of the community for so many years” because the owners are supporters of local nonprofit groups.

“We know Ed and Robin are devastated at this loss after they put so much work into renovations, and know that they will come back even stronger with the support of the entire community behind them,” Petkers said.

The chamber has established the Corsican Fire Relief Fund at Bath Savings Institution to support the restaurant’s owners. Donations can be made in person at any Bath Savings Institution branch or by writing a check to the Corsican Fire Relief Fund and mailing it to Bath Savings Bank, P.O. Box 160, Freeport, ME 04032.

Peter McGuire can be contacted at 861-9239 or at:

Twitter: PeteL_McGuire


]]> 0, 27 Apr 2016 22:47:14 +0000
Twitter remains a cultural force despite stagnant user figures Wed, 27 Apr 2016 01:06:54 +0000 NEW YORK — Twitter gets lots of grief from investors because it hasn’t taken over the world the way Facebook did, at least in terms of amassing users.

But maybe it’s destined to stay small, serving a vital, if limited, role for the public. Maybe Twitter just isn’t meant to be an all-encompassing social utility. Maybe stock price is not the only lens through which a company can be valued. Twitter, perhaps even in spite of its difficult interface and site-specific lingo, has become a cultural force since its 2006 founding.

“I don’t think at this point Twitter is ever going to reach the size of Facebook and I don’t know if that necessarily matters,” says Debra Aho Williamson, an analyst at research firm eMarketer. Assuming, that is, that Twitter can figure out some way to make money off people who read tweets but don’t ever log into the service.

Things got no better on Tuesday, when Twitter again reported largely stagnant user figures – 310 million, up from 305 million in the fourth quarter. (The company had previously reported 320 million users in the fourth quarter, but it has changed how it counts them).

This makes Twitter less than one-fifth Facebook’s size. It can’t even brag about being larger than LinkedIn, its more buttoned-up (and buttoned-down) professional networking cousin.

While Twitter’s per-share earnings beat Wall Street’s expectations, revenue fell short. Revenue grew 36 percent to $595 million from $436 million a year earlier. Analysts polled by FactSet had expected $607.9 million. Twitter’s already-clobbered stock fell $2.28, or almost 13 percent, to $15.49 in after-hours trading.

Ever since returned to helm the company he co-founded in 2006, CEO Jack Dorsey has insisted that Twitter needs to work harder at both attracting new users and giving occasional visitors more reasons to check back in. To date, neither has happened.


Yet Twitter has a firm hold on the public consciousness. Even non-users are at least aware of its existence, if not totally up to speed on its purpose. The Pope is on Twitter; so are President Obama and Beyoncé, along with a cadre of lesser celebrities. Unlike Facebook, a place for friends, family and near-forgotten grade school classmates, Twitter is a great place to follow actors, soccer players, late-night comedians and newsmakers to feel like you are in the know.

“Twitter’s problem is that the management does not understand what they have,” said Wedbush Securities analyst Michael Pachter, who argued that the company is still failing to retool itself for new users.

Calling the service “horribly complicated,” Pachter rattled off a series of his own Twitter issues, even though he considers himself a power user. For example, he just got an email telling him how to “mute” people he follows. (Muting someone means you won’t see their tweets in your timeline, although you still follow them. It’s like a brush-off without the awkwardness.)

“I didn’t know you could mute somebody,” he said. “How did I not know that?”

Another frequent complaint involves Twitter’s somewhat arcane 140-character limit, a relic of its early technology. To get around the limits, users have taken to posting screenshots of longer blocks of text. Dorsey has hinted at expanding that limit, even tweeting a 1,325-character message – as a screenshot – on the subject back in January. So far, the limit remains unchanged.

Then there’s the Twitter lingo, from hashtags to “at” symbols and the like. If Twitter wants to attract more grandmothers, it’ll have to lose the text-speak.

Pachter called Twitter a “great product” that has gotten to where it is in spite of, not because of its management. The users that have stuck around – all 310 million of them – have overcome obstacles such as poor interface, search and, he said, a “terrible functionality.”

For the current quarter, Twitter forecasts revenue of $590 million to $610 million, well below analysts’ expectations of $677.7 million.

The company said it is expanding its advertising program to logged-out users. It’s currently testing the ads for people on desktop computer, who make up a small slice of its user base. This quarter, the ads are coming to mobile web users who are not logged in to Twitter but still read it.

]]> 0, 26 Apr 2016 21:28:07 +0000
Average air fares reach lowest level since 2010 Wed, 27 Apr 2016 00:07:53 +0000 LOS ANGELES — The average U.S. airfare dropped to $377 last year, its lowest level since 2010 and down nearly 4 percent from 2014.

Adjusted for inflation, it was down 3.8 percent from the 2014 price of $392, according to the U.S. Department of Transportation’s Bureau of Transportation Statistics.

Industry experts attribute the decline in airfares to lower fuel costs and strong competition from low-fare airlines.

]]> 0 Tue, 26 Apr 2016 20:56:40 +0000
Chipotle posts quarterly loss, its first ever as public company Wed, 27 Apr 2016 00:01:50 +0000 NEW YORK — Chipotle posted its first quarterly loss as a public company Tuesday after it gave away millions of free burritos to win back customers following a series of food scares.

The Mexican food chain said Tuesday that sales were down 29.7 percent at established locations during the first three months of the year. Sales have been slammed since an E. Coli outbreak and norovirus cases that scared off customers this past fall.

To get people back in the habit of visiting Chipotle, the company has been giving away coupons for entrees since early February. During the quarter, Chipotle said it gave away about 6 million entrees. Executives say the coupons help stores look busy again, which is an important psychological cue in assuring people business is back to normal.

The company said it is seeing signs that the customers redeeming coupons for free food are starting to become paying customers again. Still, Chipotle said sales at established locations were down 26 percent for April, when excluding the impact of Easter this year.

Going forward, Chipotle said it will shift toward relying more heavily on marketing campaigns and “buy one, get one free” deals to get drive up sales.

Mark Crumpacker, chief creative and development officer, said the company is also considering adding chorizo to the menu to lure loyal customers into visiting more often. The company has tested the topping in the past.

Executives have said they tightened food safety measures, which included shifting the chopping of some produce in centralized locations. Now, the company said it is making tweaks to shift the chopping of lettuce and peppers back to restaurants, which improves their taste.

For the quarter ended March 31, Chipotle Mexican Grill Inc. lost $26.4 million, or 88 cents per share. Analysts expected a loss of 98 cents per share, according to FactSet.

A year ago, the company earned $122.6 million, or $3.88 per share.

Total revenue fell 23 percent to $834.5 million, missing Wall Street expectations for $867.8 million.

Shares of Chipotle were down nearly 5 percent at $424.75 in after-market trading.

]]> 0 Tue, 26 Apr 2016 20:01:50 +0000
Cities, states with higher minimum wages get the job of tracking violators Tue, 26 Apr 2016 23:50:14 +0000 SEATTLE — States and cities whose lawmakers proudly passed “living wage” laws are finding it difficult to make sure employers actually pay their workers accordingly.

Seattle and San Francisco, and the states of Oregon, California and New York are phasing in wage increases that will grow to $15 an hour or more.

Evidence of compliance is plain to see in the hours-worked total on most pay stubs, but state and federal laws don’t require employers to routinely provide this crucial detail to the government. Without this data, wage enforcers who are empowered to investigate generally wait until a worker complains.

And many workers – especially those in precarious situations – fear they’ll be fired if they speak up.

“It’s pretty shocking how common the violations are,” said Donna Levitt, director of the labor enforcement office in San Francisco, which began ramping up to $15 an hour last year. Her office has recovered more than $10 million in back wages since 2004.

In January, Portland implemented a new citywide minimum wage of $10.10 per hour, significantly higher than Maine’s $7.50 minimum. Because the city’s wage is different from the state’s, it is incumbent upon the city to enforce compliance, not the state Department of Labor as is typical in minimum wage disputes. To date, there have been no complaints.

“We put out educational materials and reached out to employers and employees,” said Julie Sullivan, senior adviser to the city manager. “Since it was enacted, we have had questions from both employers and employees, but none have resulted in complaints.”

Labor advocates say the new laws are meaningless without proactive enforcement, citing research that shows roughly one in four businesses nationwide already cheat their workers out of minimum wages.

“It’s just so pervasive and so rampant,” said Haeyoung Yoon of the National Employment Law Project.

Her group advocates higher fines to give employers more incentives to follow the laws, along with tougher enforcement nationwide.

“There’s just not enough boots on the ground to wipe it out, because the problem is so enormous,” Yoon said.


Without a proactive approach, officials aren’t even sure how many violators are out there.

“We often get the question: What’s the compliance rate?” Levitt said. “We have no idea.”

Enforcement is expensive, but some state and local officials and advocates envision recovering the costs of investigations through higher fines, or anticipating more revenue as more people are paid their legal wages.

Some employers simply ignore or misunderstand these minimum wage laws. Others deliberately underestimate the hours their employees work, or require them to work unpaid and off-the-clock.

The tiny city of SeaTac, Washington, has effectively outsourced enforcement to the courts since it became the nation’s first city to require wages of $15 an hour or more in 2014.

More than a dozen class actions were filed this year on behalf of workers in and around Seattle-Tacoma International Airport. Attorney Duncan Turner estimates the total owed them in back wages, overtime, related benefits and potential penalties could add up to $62.5 million.

“We want to see justice for all of the workers,” he said.

In Seattle and San Francisco, most violators have come to the cities’ attention through employee complaints.

Investigators then examine pay records for all employees at the business, to protect the complainant and because they assume the problem affects more than one worker, said Dylan Orr, director of Seattle’s labor standards office.

In the past year alone, Seattle has investigated 106 businesses and completed cases against 23 others, levying fines and payment of back wages totaling more than $172,000. They ranged from restaurants to retail stores to larger companies providing cleaning services.

Many weren’t aware of the wage law’s details, but others were simply taking advantage of their employees, many of whom are immigrant workers, Orr said.

A strip club called Pandora’s Adult Cabaret became one of the first businesses in Seattle forced to pay thousands of dollars in back wages to employees under the new law. Owner Joe Walker blamed the $3,200 mistake on his payroll company, which he said was “out of touch with the real world.”

San Francisco has examined 40 complaints during the same time period – a much smaller caseload in a city with more businesses. Officials suspect that’s because San Francisco has long had its own minimum wage requirements and Seattle has not.


Authorities are moving to a more proactive enforcement posture in some places.

Seattle is adding five investigators to its enforcement team and looking at ways to find violators before employees turn them in. Oregon lawmakers have allocated money for three investigators, who will likely focus on any industry showing a pattern of wage violations, Labor Commissioner Brad Avakian said.

The enforcement of California’s new minimum wage law, meanwhile, is provided for under an existing state law authorizing proactive investigations of industries with a history of breaking labor laws.

New York’s Labor Department plans to wait for workers to turn in their employers, and will represent the employees in court if the department can’t persuade the businesses to pay up.

Some worry such passive approaches won’t reach all workers.

“It’s hard to stand up to someone who has power against you,” said Nicole Keenan, who directs the Fair Work Center, a nonprofit Seattle hired to educate people about the new wage requirements. “When we give a presentation, about half the people in the room say their rights have been violated.”

Business Editor Carol Coultas contributed to this report.

]]> 0, 26 Apr 2016 21:25:48 +0000
Apple shares drop after revenue report Tue, 26 Apr 2016 23:13:20 +0000 Apple shares fell sharply, as the firm reported that its revenue had dropped from the same period last year – the first time that’s happened since 2003.

Wall Street analysts expected the firm to report lower numbers this quarter. So had Apple itself, which said in its own guidance numbers last quarter that it expected to see the dip in sales. Sales of the company’s latest smartphones, while significant with 51.2 million models sold, still could not keep pace with sales of 61.2 million from the same period last year. This is the first time iPhone sales have dropped year-over-year since its debut in 2007. Because the iPhone accounts for more than two-thirds – in fact, nearly 70 percent – of Apple’s revenue, a slowdown in iPhone sales is significant.

Analysts had predicted that Apple would sell 50.5 million iPhones and post $52 billion in revenue.

Overall, Apple reported $50.6 billion in revenue and $10.5 billion in profit. Last year at the same time, the company reported $13.6 billion in profit on $58 billion in revenue.

Shares dropped 6 percent after the report, having closed at $104.35.

What happened? One factor is that last year’s spring quarter saw unusually high sales for Apple. Supply problems for the iPhone 6 and iPhone 6 Plus moved back sales that normally would have been counted in the company’s traditionally strong holiday quarter.

But another, far more troubling reason is that Apple – along with the rest of the smartphone industry – is seeing a serious slowdown in the number of people buying new smartphones. For years, analysts have warned that the smartphone market is becoming saturated, meaning that most people who would want to buy a smartphone already have one.

“Our team executed extremely well in the face of strong macroeconomic headwinds,” said Tim Cook, Apple’s chief executive in a press release. “We are very happy with the continued strong growth in revenue from services, thanks to the incredible strength of the Apple ecosystem and our growing base of over one billion active devices.”

Analysts do expect that iPhone sales will recover after the company introduces this year’s expected model of the iPhone. The next version, if Apple keeps up with its traditional product cycle, should be the iPhone 7 and see major hardware makeover. Reports based on apparent weak links in Apple’s supply chain indicate that the new phone could have a new kind of headphone port, be dust-proof and waterproof and may even sport a totally redesigned home button.

This quarter’s earnings report, however, does demonstrate that it’s critically important for Apple to deliver new innovative products and find new ways to generate revenue as the smartphone becomes more of a commodity worldwide. The company’s interests in media and entertainment, smart home devices and healthcare – as well as persistent rumors of an Apple-designed car – all show the company is hard at work to find and dominate the next revolution.

“The industry is in a lull between the mobile boom and what comes next in automotive, the connected home, health and industrial applications of the Internet of things,” said Geoff Blaber, a vice president at CCS Insight, in a note ahead of the report. “Pressure is likely to mount on Apple to reveal the next big source of growth.”

Apple also announced it will expand its capital return program, adding up to $50 billion to the cash it’s set aside to return capital to shareholders; that means Apple is planning to spend a total of $250 billion in cash this way by the end of March 2018.

]]> 0, 26 Apr 2016 21:37:42 +0000
Portland energy company receives national innovation award Tue, 26 Apr 2016 21:21:31 +0000 A Portland hydrokinetic power company has received a national award for innovation, the first marine energy company to receive the honor.

The National Hydropower Association on Tuesday designated Ocean Renewable Power Co. a 2016 Outstanding Steward of American Waters for its river energy project in Alaska.

The project involved installing submersible turbines in the Kvichak River to generate power for the remote Alaskan village of Igiugig. A pilot project, the technology has been tested for two years and successfully demonstrated that it can provide one-third of the electrical power needs of the village, according to a release from the association.

ORPC earned the award under the operational excellence category, which recognizes waterpower projects that add value to the industry through technical contributions, innovation, engineering, upgrades and improvements, or technology breakthroughs for new hydropower or marine hydrokinetic technologies.

“NHA is pleased to present ORPC with [this award] – the first marine energy company to receive this distinction,” said Linda Church Ciocci, executive director, in the release. “Remote communities like the Alaskan Village of Igiugig, often have to rely on fossil fuels like diesel to generate electricity. ORPC’s RivGen® Power System is working to be a clean, innovative and affordable energy option for communities worldwide. As the marine energy sector moves forward, it is projects like [this] that are leading the way.”

In November, ORPC received a $2.2 million Department of Energy grant to continue developing its river and tidal turbine systems.

The river system provides remote communities with lower, stable electricity generation costs; reductions in carbon footprint and environmental impact; and long-term economic development, according to the association.

Over 1.5 million sockeye salmon migrated upstream past the ORPC installation during its operation with no evidence of fish injuries, mortalities or passage delay of upstream migrating salmon. The data collected was so voluminous that the Energy Department allocated new funds to the Pacific Northwest National Laboratory to analyze the full data set and develop automation tools for future use by the industry.

The project was partially funded by the Denali Commission and the Alaska Energy Authority and based upon work supported by the National Institute of Food and Agriculture, U.S. Department of Agriculture and Small Business Innovation Research Grants Program. The U.S. Department of Energy also provided funding, and recently awarded the Village of Igiugig a grant to further advance the design and operation of the ORPC system.

]]> 0 Tue, 26 Apr 2016 21:40:51 +0000
Chinese company to build $1 billion state-of-the-art paper mill in Arkansas Tue, 26 Apr 2016 18:49:17 +0000 LITTLE ROCK, Ark. — The Chinese company Sun Paper announced plans Tuesday for a $1 billion mill in southern Arkansas, the paper company’s first facility in North America.

Joined by Sun Paper officials to announce the project at the state Capitol, Gov. Asa Hutchinson said the project will create 250 jobs and is one of the largest private investments in Arkansas’ history. Company and state officials said they expected the project to employ 2,000 people during its construction and create an additional 1,000 jobs indirectly in the timber industry.

“This project will be the most modern, the highest efficiency, the most environmentally progressive factory in the pulp and paper industry in all of North America,” Sun Paper Chairman and Founder Hongxin Li said, speaking through an interpreter, at a news conference at the state Capitol.

Company officials said they hoped to begin construction in the first half of 2017 on the mill, which will be used to convert wood into pulp to be used for paper production, and said it will take two and a half years to build. Based in Shandong Province, Sun Paper employs 10,000 people worldwide and is China’s largest privately owned paper-making enterprise, according to the company’s website.

The new plant will built about 65 miles southwest of Little Rock in the city of Arkadelphia. An Arkansas economic development official said earlier this month that Sun Paper was also considering Mississippi for the mill.

“It will result in a real boost to the economy of south Arkansas throughout the timber industry,” Hutchinson said. “I not only think about the 250 direct jobs, but also the log haulers, those in the fields and the timber industry that will benefit from this extraordinary project and investment.”

Hutchinson, a Republican, traveled to China last November and met with Sun Paper officials. He signed a letter of intent then to study the feasibility of building the plant in Arkansas.

The average salary for jobs at the mill will be $52,000, according to a memorandum of understanding the company signed with state and local officials. The project is receiving $10 million in local incentives for infrastructure at the site and another $92 million in local property tax abatement. The project will also receive several incentives from the state, including cash rebates based on its payroll, sales tax refunds on construction materials and a recycling tax credit.

The state also has agreed to expedite the process for approving the air and wastewater permits necessary for the project.

]]> 0 Tue, 26 Apr 2016 15:06:46 +0000
Exxon Mobil loses top credit rating held since Depression Tue, 26 Apr 2016 18:38:37 +0000 Exxon Mobil Corp. was demoted from the top credit rating by Standard & Poor’s for the first time since the Great Depression as the collapse of the biggest oil-market rally in history strangled cash flows.

The global crude explorer with sales that dwarf the economies of most nations sought to retain the AAA rating when S&P placed it on notice in February. Citing concern that credit measures would remain weak through 2018, S&P warned Exxon that it was in danger of losing the top grade first bestowed on the oil giant in 1930 and shared with just two other U.S. corporations. The rating was lowered to AA+, S&P said in a statement on Tuesday.

The oil-market crash that began in late 2014 has choked crude-producing nations like Nigeria and Venezuela of cash, thrown hundreds of thousands of employees out of work, stalled drilling and pipeline investments around the world and even reverberated into ancillary industries such as steel-making and railroads. Exxon was one of the last holdouts against the wave of credit downgrades that engulfed oil drillers with diminishing prospects of paying debts, dividends and rig fees.

The downgrade will not only raise Exxon’s cost to borrow money but may also erode its status among oil-rich governments as a premier partner with which to do business. As Exxon Vice President of Investor Relations Jeffrey Woodbury said in February, the company’s AAA rating has been a key selling point when competing for drilling licenses.

]]> 0 Tue, 26 Apr 2016 17:26:56 +0000
Town of Jay agrees to lower Verso’s tax liability Tue, 26 Apr 2016 17:38:43 +0000 The town of Jay and paper maker Verso Corp. have reached a deal resolving a dispute over property tax assessment for the Androscoggin Mill, even as residents went to the polls to vote on a $5.2 municipal budget and the town’s share of the school budget.

The deal, which gives the mill six tax credits worth $4 million stretching through the 2020 tax year, does not figure into the budget being voted on Tuesday.

The town also agreed to reduce the mill’s tax liability in decreasing amounts over the next three years, from $6.25 million in the tax year ending April 2017 to $4.75 million in 2020.

Town Manager Shiloh LaFreniere said that the impact on the budget being voted on today, as well as the $6.2 million Franklin County budget, isn’t known. “We’re going to have to review it as more information becomes available,” she said.

Jay selectmen approved the settlement with Verso on Monday night, citing the “expense, time and risk to both the town and Verso,” LaFreniere said.

Under the agreement, Verso’s tax liability will be reduced to “more accurately reflect the assessed value of the mill property,” according to a joint news release from the company and town.

“Verso has agreed to withdraw its pending property tax appeals, and not to seek further abatements of taxes absent material changes to the mill property or operations,” the company said in the release Monday night. “This agreement is intended to allow both parties to achieve sustainable operations over the coming years based on changing circumstances concerning the mill’s taxable value.”

The deal still needs to be approved by the federal bankruptcy court overseeing the mill’s bankruptcy proceedings.

Verso, which owns the Androscoggin Mill in Jay, filed for bankruptcy in January and has had three pending abatement requests with the town. In total, the company has asked for a refund of $11.4 million in taxes from 2013, 2014 and 2015. The town had agreed to a partial abatement request of $886,157 of the company’s 2015 taxes.

The tax dispute followed layoffs at the Jay mill of about 300 people. The company, which owns eight paper mills around the country, announced plans recently to close one of its mills in Wickliffe, Kentucky, which is not expected to affect operations at the Jay mill.

The deal comes two weeks after the town filed a court motion contesting Verso’s bid that to have its pending tax abatement requests moved to federal court in Delaware, instead of in Maine, as it goes through bankruptcy proceedings.

The six credits, worth $666,667 each and in addition to the previous abatements given the mill, will be taken against each of the next six payment dates for the next three town tax bills, starting in October and then each April and October, until April 2019.

The town also set the mill’s tax liability at $6.75 million for this property tax year; $6.25 million for 2017; $5.75 million 2018; $5.25 million for 2019; and $4.75 million for 2020.

Polls were open until 8 p.m. today on both the town budget and the Regional School Unit 73 $18.8 million budget. RSU 73, the Spruce Mountain district, includes Jay, Livermore and Livermore Falls.

The town budget is pared $368,434 from last year’s. It reduced the town office staff, and reflects cuts in almost every town department. Before the Verso agreement, the town anticipated $1.38 million in revenues and the town would have to come up with $3.88 million in taxes.

]]> 0, 26 Apr 2016 21:42:54 +0000
On the job: Circus Maine students perform at Whole Foods Tue, 26 Apr 2016 08:00:15 +0000 Performers from Circus Maine entertained shoppers Friday at Whole Foods in Portland.

Students at the circus training school on Thompson’s Point had to audition to make the performance troupe, which travels throughout New England.

Circus Maine does acrobatic performances at Whole Foods in Portland on Earth Day, Friday. Carl D. Walsh/Staff Photographer

Circus Maine does acrobatic performances at Whole Foods in Portland on Earth Day, Friday. Carl D. Walsh/Staff Photographer

The group of eight wandered throughout the store for two hours, providing “ambient performances” to celebrate Earth Day and raise awareness about the importance of pollinators.

“These kids are absolutely fearless about performing,” said Cory Tabino, artistic director for Circus Maine. The money Whole Foods paid the troupe was donated to the New England Center for Circus Arts for equipment and costumes.

The acrobats are dressed like bees to bring attention to the importance of pollinators. Carl D. Walsh/Staff Photographer

The acrobats are dressed like bees to bring attention to the importance of pollinators. Carl D. Walsh/Staff Photographer

]]> 1, 25 Apr 2016 20:26:33 +0000
Stock market slips on weak company earnings Tue, 26 Apr 2016 01:16:32 +0000 NEW YORK — U.S. stocks slipped in quiet trading Monday as energy companies dropped with the price of oil. Metals and chemicals companies also fell. Company earnings remain weak, and Xerox and drugmaker Perrigo tumbled after reporting disappointing results and cutting their forecasts for the year.

Stocks were headed for big losses in the morning, as the Dow Jones industrial average dropped 148 points before recovering over the last hours of trading. Investors traded less than usual as they looked through a weak group of company earnings and prepared for the Federal Reserve meeting which will conclude Wednesday.

“The market is being restrained as much by uncertainty over … companies’ ability to generate earnings growth and revenue growth as they are around uncertainty over Fed policy,” said Justin Christofel, portfolio manager with BlackRock’s Multi-Asset Income Fund.

The Dow Jones industrial average fell 26.51 points, or 0.2 percent, to 17,977.24. The Standard & Poor’s 500 index lost 3.79 points, or 0.2 percent, to 2,087.79. The Nasdaq composite index slid 10.44 points, or 0.2 percent, to 4,895.79.

]]> 0 Tue, 26 Apr 2016 08:42:42 +0000
Polling firm Critical Insights bought by rival Mon, 25 Apr 2016 20:42:21 +0000 Critical Insights, a Portland firm that has provided market research, analysis and polling services since 1992, is being acquired by a southern Maine competitor.

Digital Research Inc. of Kennebunk announced the acquisition of Critical insights in a Monday press release. Terms of the deal were not disclosed.

“Both DRI and Critical Insights were poised for growth, having exhibited strong performance for over two decades, and more recently despite a period of economic stagnation,” said MaryEllen FitzGerald, president of Critical Insights, in the release. “As we both looked to expand our businesses, it made sense to merge, rather than to compete. We are delighted with the outcome and potential for the new entity.”

DRI, which uses innovative data collection techniques, is known for its analysis in travel and tourism markets, as well as in consumer goods. Critical Insights specializes in health care, public policy, advertising and regulated industry sectors such as banking and utilities. It also provides public opinion polling for local and national media.

The complementary nature of the firms’ areas of expertise is what drove merger discussions, said FitzGerald. Bob Domine, president and CEO of DRI, called the merger a “powerhouse of capability” in the release.

Critical Insights will become a division of DRI, with FitzGerald remaining as its president.

Both companies intend to maintain their existing office locations and hire additional staff.

]]> 2 Mon, 25 Apr 2016 16:42:21 +0000
Justice Department approves deal to create new cable giant Mon, 25 Apr 2016 20:25:32 +0000 NEW YORK – The Justice Department has approved Charter’s bid to buy Time Warner Cable and create another cable giant.

Buying Time Warner Cable and Bright House Networks will turn Charter Communications, a mid-size cable company, into the country’s No. 2 home Internet provider, after Comcast. The new Charter will be No. 3 in video, trailing Comcast and AT&T, which bought DirecTV last year.

Monday’s OK comes with conditions meant to preserve competition and protect consumers.

The Federal Communications Commission and California’s utility regulator also need to give permission before the deal can close. Both are expected.

Public-interest groups have protested industry consolidation, but opposition to Charter’s deal was muted compared with the backlash in recent years to Comcast’s failed bid for Time Warner Cable.

]]> 2, 25 Apr 2016 16:30:03 +0000
USA Today owner Gannett bids for LA Times publisher Tribune Mon, 25 Apr 2016 19:43:15 +0000 NEW YORK — Newspaper publisher Gannett wants to buy Tribune Publishing for more than $388 million, a deal that would give the owner of USA Today control of the Los Angeles Times, Chicago Tribune and several other newspapers.

But Gannett said Monday that Tribune has refused to start “constructive discussions” since it first offered to buy its rival this month. Tribune confirmed Monday that it received the unsolicited offer and said it “will respond to Gannett as quickly as feasible.”

Gannett wants Tribune so that it can expand its USA Today Network, an effort it launched late last year to unite USA Today with its more than 100 local daily newspapers. The network helps the company share stories more easily between USA Today and its smaller papers, such as the Detroit Free Press and The Des Moines Register. Earlier this year, the company remade the logos on all its local newspaper front pages and websites to say that they are “a part of the USA Today Network.”

Buying Tribune would give Gannett 11 more major daily newspapers, including the Orlando Sentinel, The Baltimore Sun and the Hartford Courant.

As more people get their news online, print media companies have been buying up newspapers and websites to fight falling advertising revenue and reduce costs. This month, Gannett completed a $280 million buyout of Journal Media Group. That deal added 15 newspapers to Gannett’s portfolio, including the Knoxville News Sentinel and the Milwaukee Journal Sentinel.

Both Gannett and Tribune were spun off from larger media companies that owned TV stations, a move to protect the accelerating growth of broadcast advertising from the falling fortunes of newspapers.

A Gannett takeover of Tribune could mean cost-cutting, shedding jobs and adding USA Today inserts into papers instead of national news sections, said media analyst Ken Doctor.

Gannett, based in McLean, Virginia, said it offered $12.25 in cash for each Tribune share.

]]> 2, 26 Apr 2016 08:41:57 +0000
Fed will likely keep rates unchanged in face of global slump Mon, 25 Apr 2016 19:28:19 +0000 WASHINGTON – The U.S. job market is healthy. The stock market is up. Home prices are rising. Yet as the Federal Reserve prepares to meet this week, it seems in no mood to resume raising interest rates from ultra-lows.

With the global economy struggling and U.S. inflation still below the Fed’s target rate, many economists see little likelihood of a rate increase even before the second half of the year.

The outlook for the world economy was downgraded this month by the International Monetary Fund, which warned of the risk of another international recession. Any major global slump would, in turn, hinder U.S. growth.

A sharp economic slowdown in China – the world’s second-largest economy after the United States – has already hurt much of the developing world. Europe is straining to gain any momentum, and Japan is hobbled by wary consumers and an aging population.

Even in the United States, key sectors like manufacturing and energy have been bruised by a strong dollar and shrunken oil prices. Consumers have barely stepped up their spending this year.

And on Thursday, the government is expected to estimate that the economy grew at an annual rate under 1 percent in the January-March quarter. Some forecasters think growth might have been as weak as 0.3 percent, which would mean the economy nearly stalled out last quarter.

“There are a number of indications that U.S. economic growth is not strong and is in fact sputtering,” said Sung Won Sohn, an economics professor at California State University, Channel Islands. “That is not the kind of environment where the Fed wants to be raising interest rates.”

In the meantime, though, U.S. employers have been adding jobs at a consistently vigorous pace. Layoffs have dwindled to unusually low levels. And since hitting a 2016 low on Feb. 11, the Dow Jones industrial average has surged 13 percent.

But since raising rates from record lows in December, the Fed has grown concerned about the economic pressures overseas and has signaled its willingness to wait for those pressures to ease. The minutes of their March meeting noted that several Fed officials felt that raising rates again in April “would signal a sense of urgency they did not think was appropriate.”

The Fed’s rate hike in December was its first in nearly a decade, and it ended a seven-year period in which the central bank had kept its benchmark rate near zero. The Fed had taken that and other extraordinary steps during the financial crisis to try to bolster confidence and stimulate the economy. This year, with the economy having made vast strides since the recession ended in 2009, further rate increases were expected. The Fed itself had predicted four rate hikes in 2016.

But as global markets sank and concerns about the global economy intensified early this year, the Fed held its key rate steady.

Not all Fed officials favor a go-slow approach. Esther George, president of the Fed’s Kansas City regional bank, dissented at the March meeting, saying she preferred another rate hike. She may dissent again this week, and she might not be alone. Other officials, including Loretta Meister of the Fed’s Cleveland regional bank, have expressed concern that the central bank may fail to avert high inflation if it delays raising rates much longer.

Still, a solid majority of officials appear to support the cautious approach being pursued by Chair Janet Yellen. In her most recent speech on the economy, Yellen said she still envisioned only a gradual pace of rates increases in light of global threats. Those remarks helped fuel the rally on Wall Street.

One factor in the belief that the Fed won’t raise rates by its June meeting is that it will want to avoid jolting financial markets around then, less than a week before Britain holds a referendum on whether to leave the European Union. Analysts say a vote for a British exit from the EU could rattle markets and perhaps set back the Fed’s efforts.

Other economists also note that few Fed officials have raised the possibility of a rate hike by then.

“The Fed doesn’t like to surprise markets,” said Diane Swonk, chief economist at Diane Swonk Economics in Chicago. “I am not sure they will have the confidence to send a signal this week that June is a go for a hike.”

The statement the Fed will issue when its meeting ends Wednesday will be read for any signals of possible future moves. The betting is that it won’t send any clear signal.

David Jones, chief economist at DMJ Advisors, said he still foresees two rate hikes this year, in June and December. He said that by the June meeting, he thinks the Fed will have enough evidence that economic growth has accelerated.

“The Fed keeps saying they are very much data-dependent, and I am looking for a second-quarter bounce back,” Jones said.

Sohn said he expects one rate hike at most in 2016 – in September, before the presidential election campaign enters its final stretch.

“And I would not be surprised if there is no Fed hike this year,” Sohn said. “I think the Fed will remain concerned about the impact a weak global economy is having on the United States.”

]]> 0, 25 Apr 2016 15:30:36 +0000
Elvers catch outpacing last year’s Mon, 25 Apr 2016 17:47:58 +0000 Maine’s money-making elvers fishery, the only significant fishery in the U.S. for the baby eels, is having a much stronger year than in 2015 as favorable weather has allowed fishermen to capture their quarry.

Elvers are sold to Asian aquaculture companies and eventually become food, such as sushi. Much sought-after, they sometimes sell for more than $2,000 per pound, putting them among the most lucrative commercial fish species in the country.

Last year, fishermen caught less than 5,300 pounds of them against a quota of nearly 10,000 pounds. Fishermen, who seek the eels with nets in Maine’s rivers from late March to early June, have already caught more than last year’s entire catch.

“For us, it’s going well,” said Henry Bear, an elver fisherman on the Passagassawakeag River in Waldo County and the Maliseet tribal representative to the Maine House of Representatives. “Far more productive, and the fish are running good.”

Last year’s fishery was impeded by the lingering harsh winter weather. Fishermen this year have already caught more than 5,500 pounds, according to the Maine Department of Marine Resources.

The price per pound has dropped from about $2,172 last year to $1,364 so far this year. The soft economy in China, a major buyer, has depressed prices somewhat.

]]> 0 Mon, 25 Apr 2016 19:56:55 +0000
Decision to eject passenger lands on flight crew members Mon, 25 Apr 2016 15:37:12 +0000 Two women were removed from a JetBlue Airways plane for reportedly staring at a flight attendant.

The leader of a popular rock band was kicked off a Southwest Airlines flight for refusing to pull up his baggy pants.

A University of California, Berkeley student said he was booted from a Southwest flight for speaking Arabic.

Examples of passengers being removed from flights have gained increased attention since the Sept. 11, 2001, terrorist attacks, which began with the hijacking of four commercial planes. After the attacks, flight personnel suddenly found themselves focusing more attention on identifying potentially dangerous passengers than serving drinks and snacks.

“Nobody enjoys kicking passengers off planes,” said Heather Poole, a longtime flight attendant and author of a book about her job, titled “Cruising Attitude.” “Nobody wants to be the reason a flight is delayed.”

Airlines have the authority to boot passengers from planes under the contract of carriage, a lengthy agreement between passengers and airlines that includes a section about banned behavior.

Southwest Airlines’ contract of carriage, for instance, is 41 pages and has been revised multiple times, most recently in February. Such contracts usually are found online, and passengers consent when they buy an airline ticket.

Airline contracts usually describe prohibited passenger behavior in vague terms such as “disorderly,” “offensive,” “abusive” and “intimidating,” giving flight crew members the ultimate decision on what specific acts are out of bounds.

Flight attendants, who generally make the first assessment, said they worry that ignoring a potential problem passenger on the tarmac could lead to a bigger disturbance at 35,000 feet in the air that means diverting a flight.

Marian Bruns, a retired flight attendant from United Airlines and secretary-treasurer for the Retiree Association of Flight Attendants, said flight attendants take classes on the latest security measures and routinely undergo cultural sensitivity training.

Although flight attendants say they are placed in a difficult position determining which passengers could be a disturbance – or a threat – they say a passenger’s attitude often is what determines who gets kicked off. Such a decision frequently is made after conferring with other crew members and the pilot.

FAA data show that airlines reported unruly passengers on only 82 flights in 2015 out of about 9.6 million flights a year.

]]> 3 Mon, 25 Apr 2016 20:59:09 +0000
Pine State Trading Co. sells Gardiner-based convenience store division Mon, 25 Apr 2016 14:28:13 +0000 GARDINER — Pine State Trading Co. is selling its convenience store division, by far the largest of its five divisions, to Core-Mark Holdings Company Inc., the nation’s second-largest convenience store supplier.

Pine State CEO Nick Alberding, a grandson of late company founder Charlie Canning Sr., said the new owner has vowed to keep all of about 540 employees now working for Pine State Convenience. The company will continue to operate out of the same Gardiner warehouse and offices, off Route 201 in the Market Street Business Park, the former Associated Grocers warehouse, which is part of the purchase.

“All jobs will be retained,” Alberding said Monday at Pine State’s Gardiner headquarters. “Not only are they hiring all our people, but they’re hiring them with their seniority in place, and with equal or better benefits. We wouldn’t do this if our people weren’t involved.”

The purchase price is estimated at $112 million, according to a news release posted on Core-Mark’s investor relations website.

Keith Canning, Gena Canning and Nick Alberding, owners of Pine State Trading Co., announced Monday they are selling their convenience store delivery division.

Keith Canning, Gena Canning and Nick Alberding, owners of Pine State Trading Co., announced Monday they are selling their convenience store delivery division.

Keith Canning, now a managing partner of Pine State, and Alberding’s cousin, will be president of the new entity, Pine State Convenience, a Division of Core-Mark.

Alberding said the deal will likely close in 30 to 60 days, but for employees and retailers served by the company, it should be “business as usual” after the sale.

It will also be business as usual for Pine State’s remaining four divisions – Pine State Beverage based at Libby Hill Business Park in Gardiner, Pine State Spirits and Pine State Vending, based in warehouses on the Augusta-Hallowell city line, and Town & Country Foods, based in Greene, and those divisions’ 450 employees. Those divisions will remain in their current locations and Alberding will remain as CEO of Pine State Trading. Gena Canning will remain as a managing partner.

Alberding said he and other officials of Pine State, a family-owned business which this month celebrated its 75th year in business, decided to sell because they believed it would be best for the long-term success of the convenience store division.

He said they chose to sell to the 127-year-old Core-Mark because the firm’s officials believe in the same things they believe in and are expected to treat employees and customers well while ensuring the company has a vibrant future. He said Core-Mark was not strong in the Northeast market.

Pine State Convenience serves more than 4,000 convenience stores from Fort Kent to New York, including independent stores and chain stores such as Big Apple.

“Both our companies have experienced great success over the past decade largely due to our reputations in the marketplace with customers, employees and suppliers,” Tom Perkins, president and CEO of Core-Mark, said in a news release. “This deal affords us the opportunity to widen our geographic footprint in an area where we have a limited presence and offer Pine State customers a new spectrum of products and marketing programs that have brought our own retailers success.”


]]> 0, 25 Apr 2016 23:42:41 +0000
Gas prices continue to rise in Maine and across northern New England Mon, 25 Apr 2016 13:01:19 +0000 Retail gas prices continue to rise across northern New England.

GasBuddy surveys show the average retail price in New Hampshire is $2.11 per gallon, up 1.8 cents per gallon from last week. Prices were higher in Maine and Vermont, where the average price per gallon in both states is $2.21. In Maine, that’s a 2.5-cent increase from last week, while Vermont’s price reflects a 2.8-cent jump.

Nationwide, the average price of gasoline was $2.14.

Analysts say low prices have ignited an early surge in demand for gasoline. Demand usually peaks in the summer.

Source: weekly reports
Interactive: Christian MilNeil
]]> 0 Mon, 25 Apr 2016 16:20:00 +0000
Proposed Wal-Mart in Westbrook faces local opposition Mon, 25 Apr 2016 08:00:00 +0000 The announcement that Wal-Mart plans to open a store in Westbrook has some residents hoping the retail giant can be fended off a second time.

A group of residents successfully fought to block a proposed Wal-Mart store in 2003, arguing, among other things, that it didn’t belong near a residential neighborhood.

But this time, those who oppose the company face a greater challenge.

The proposal announced early this month is part of a shopping plaza planned for the site of a former quarry, across the street from another shopping center and on a busy road between two highway exits. The location this time appears to leave little reason to object to the project, aside from philosophical objections to the retail chain.

Mia Perron says Wal-Mart’s low wages, the use of sweatshops and the effect on local businesses are among the reasons she doesn’t want one of its stores in Westbrook, where she’s lived with her husband since 2009.

But none of that comes under the purview of the Westbrook Planning Board, whose approval of the plaza’s site plan is all the retailer needs.

Still, Perron, 31, plans to present the board with a petition she posted on as a way to collect the comments she’d been reading on social media from people who share her sentiment.

“Wal-Mart is not the type of business we want in our town,” she said.

So far, the national retailer is the only tenant going into Dirigo Plaza that has been named.

City Planner Jennie Francheschi believes several others, including restaurants, will make announcements before the public hearing on the project to be held in June or July.

Wal-Mart’s announcement dashed the hopes of many residents who had heard rumors about a Costco or Market Basket coming to the site and were excited to see something different. Wal-Mart has three locations within 15 miles of the proposed plaza — in Falmouth, Scarborough and Windham.

“I agree it would be nice to have something that doesn’t already exist in the area,” said City Administrator Jerre Bryant. “But it’s a private property and the market determines who comes here.”

The Planning Board is reviewing the proposed 500,000-square-foot shopping center. It would be built on Main Street across from Westbrook Crossing, a plaza anchored by Kohl’s department store and owned by Pike Industries, which operated a quarry there.

Jeffrey Gove, developer of Dirigo Plaza, has said that having Wal-Mart doesn’t preclude other rumored tenants from moving into the plaza. A site plan shows space for another large retail tenant about the same size as the proposed Wal-Mart.

A spokesman for Wal-Mart said the store will be an asset for the city.

“We’re proud of the contributions we’ll make in Westbrook – from creating hundreds of jobs to helping customers save and contributing to local nonprofits. By joining the many businesses that will make up the plaza, we’ll be a part of turning an old quarry site into a retail destination that will generate local tax revenue,” said Phillip Keene, regional director of corporate communications for Wal-Mart. He said feedback from the community includes people looking forward to shopping at the discount department store.

Wal-Mart is no stranger to opposition. In the past year alone, groups from Pennsylvania to Utah have fought proposals to build stores in their communities.

Around the same time as the first Westbrook proposal 13 years ago, residents of Damariscotta voted to cap the size of retail stores at 35,000 square feet, shattering Wal-Mart’s plans for a store in the midcoast town.

Several other Greater Portland communities welcomed Wal-Mart stores without a public outcry. Theo Holtwijk, the director of long-range planning and economic development in Falmouth, said when a Wal-Mart came to that town in 1998, it replaced a vacant Kmart building and made improvements to property around it.

“I think it makes a difference to a community if you have a brand new development,” he said. “It may trigger more reaction.”

The opposition to the Westbrook Wal-Mart isn’t overwhelming. In addition to Perron’s petition, which had 46 supporters as of Friday, an opponent created a Facebook page called “Westbrook Citizens (Hoping for Better) Against Walmart.” The page had 11 members as of Friday.

However, it wasn’t until a couple of months after Wal-Mart came forward last time that Westbrook Our Home, the opposition group, became a known entity.

The group fought fiercely against a zone change Wal-Mart needed in order to build its proposed 200,000-square-foot store on the site of the departing Saunders Bros. dowel mill on Forest Street.

Although the City Council approved the change from an industrial to a commercial zone, further restrictions limited the size of the store to 160,000 square feet, as well as its operating hours and noise levels.

About three years after making its proposal, then placing full-page newspaper ads and fighting a lawsuit, Wal-Mart backed away.

Because no zone change is needed this time, the Planning Board is the only body that has to approve the project and it can only reject the plaza proposal based on land use laws – not a tenant’s business practices.

The only mechanism for preventing the store from moving in would be to change the zoning ordinance, either through the City Council or a referendum, so that it prohibits big-box stores, Bryant said. But that would also mean banning the other larger retailers that residents said they wanted.

Also, he said, because the project is already under review, the change would have to be made retroactively – something the city’s legal counsel believes wouldn’t hold up to a court challenge.

So even though Westbrook residents have a winning record against Wal-Mart, they’re coming into this round as the underdog.


]]> 88, 25 Apr 2016 09:05:49 +0000
Wave of restaurants brings new taste to Augusta Mon, 25 Apr 2016 01:35:47 +0000 AUGUSTA — The newspapers covering the windows at 287 Water St. have unstuck enough to allow a narrow view inside.

The space, which formerly housed Gagliano’s Italian Bistro, has been closed since last August and vacated by Gagliano’s since November.

The windows won’t be covered for much longer. In June, two restaurateurs plan to unveil the space as Otto’s by the River, serving locally sourced eclectic American food to the downtown business and residential communities.

“We’re completely renovating it,” Wyatt Shorey said.

Shorey and Steven Dumas own and run Aunt Gin’s on Route 17 in Whitefield, which opened last August. They have also operated Steven Dumas Catering since 1997.

What they plan to bring to downtown Augusta starting in June is a 45-seat restaurant that’s a bit upscale but not stuffy, he said.

“Downtown is becoming a destination for people,” he said. “There’s a good feel down there. We’re thinking good things will happen down there with restaurants and shops.”

A number of longtime businesses have staked their claim in downtown Augusta and continue to draw customers to their specialty shops and service businesses.

But over the last several years, the character of downtown Augusta has been shifting.

Property developers have acquired and renovated several buildings, filling the upper floors with market-rate apartments, some with views of the Kennebec River. That has supported a number of existing restaurants at the street level.

Shorey said he and Dumas see the opportunity to serve a fast lunch for eat-in or delivery for those who work in the area and to host people in a good, quiet space for dinner seven days a week. Plus, there’s a deck outside. It’s small, Shorey said, but it has enough room for a couple of tables.

Chris Shaw also sees opportunity in downtown Augusta.

A sergeant for the Augusta Police Department, Shaw noticed a “priced for quick sale” sign on the former Bridge Street Tavern and investigated. The property changed hands in February and if his renovation work schedule holds, his wife Stacey plans to open The Black & Tan on June 10. He has been documenting the progress on The Black & Tan’s Facebook page.

The restaurant and bar will seat 85 in booths that will be made from pews salvaged from a church in southern Maine and serve a full menu of Irish and American food. Shaw said he likes poutine, so that will be on the menu, too. The bar will serve well drinks and have 16 beers on tap. The stage will remain for live music, Shaw said, and The Black & Tan will bring in Celtic and “easy” music.

The third entry in the restaurant influx is Brother Express, a takeout Chinese restaurant at 166 Water St. on the corner of Bridge Street. It has been open for a month, and its owner, Zheng Dong, said business has been good.

The impact of these new businesses may spread beyond the geographic boundaries of downtown Augusta.

“With the changes in seasons, we often see new ventures in any community, but there seems to be a real enthusiasm happening among the business owners and residents of (downtown Augusta),” Ross Cunningham, president and chief executive officer of the Kennebec Valley Chamber of Commerce, said. “With the recent changes in ownership of several properties and the new executive director at the Augusta Downtown Alliance, I expect that we will continue to see a strong resurgence in Augusta in not only business ventures but cultural events as well.”


]]> 2, 25 Apr 2016 10:32:43 +0000
Legal defeat only emboldens ‘food sovereignty’ movement in Maine Sun, 24 Apr 2016 23:43:35 +0000 PENOBSCOT — Heather and Phil Retberg’s Quill’s End Farm is idyllic to the point of New England cliche. Dairy cows, milked by hand, share space with goats and ducks near a wooden barn that overlooks a rolling green field and the summit of nearby Blue Hill.

The farm is a way of life Heather Retberg says needs to be protected from an aggressive regulatory structure that keeps small farms from getting food to local people. State legislators’ pushback against “food sovereignty” advocates like Retberg, in Maine and elsewhere in the country, has only emboldened her.

“This used to be how it was decades ago. It’s only changed recently, and that’s a pretty aberrant period in our food history,” she said. “It’s my right, as an individual, to grow the food I eat.”

The Retbergs, like the food sovereignty movement they are a part of, aren’t going anywhere. The movement consists of a loose collection of farmers and activists who want to exempt local food producers from federal and state regulations, arguing they work in favor of big food producers and trample on the little guy.

Sedgwick, just south of Penobscot, was the first town in Maine to approve an ordinance declaring local control of food production, and supporters believe it was the first of its kind in the country. Sixteen other Maine towns have followed.

Supporters of an unsuccessful attempt to amend Maine’s constitution this year to protect food freedom say the defeat is only a bump in the road for hundreds of Mainers and others who want to ensure local control of food production.

A bill calling for the amendment, proposed by organic farmer and Democratic state Rep. Craig Hickman, would have declared the right to food as “inalienable” in Maine. The amendment, if also approved by state voters, would have made it impossible to infringe upon residents’ ability to hunt, gather or farm for whatever food they choose, or to prevent them from buying from others who produce food they want.

Backers saw it as a way to prevent government from intruding in local farm production and sales, and to take food production back from corporate control. But the Maine Senate shot down the proposed amendment on March 23, a day after the House approved it by a two-thirds majority.

Opponents and skeptics, ranging from state regulators and legislators to other farmers, have described the amendment as vague, unnecessary or potentially dangerous. Some saw it as a way to skirt rules about inspections and safety that could be dangerous for consumers of products that present health risks, such as raw milk.

Sen. Peter Edgecomb, a Republican from Caribou who grew up drinking raw milk on a farm in Limestone, said he feared the law could open the doors for a food contamination incident that could scare consumers away from Maine’s small farms.

“Maine ranks very high in food safety in the country,” Edgecomb said. “I’d like to keep it that way.”

Maine’s attempt at a food freedom bill is an outgrowth of national campaigning for localized food security by groups such as the Organic Consumers Association.

Local food advocates have tried to pass state laws similar to the Maine proposal in other states, with minimal success, though they’ve succeeded in passing local resolutions and ordinances in several states ranging from Vermont to Utah. A 2012 effort in New Hampshire to exempt locally grown food from federal regulations swiftly died in the Legislature.

It wasn’t supported by the New Hampshire Farm Bureau Federation, and the group’s policy director called it nothing more than a “feel-good” measure. Rob Johnson, the policy director, said part of the concern was that eliminating compliance with federal regulations could lead to substandard products.

The fight over food in Maine is tied in part to a bitter dispute over regulations about raw milk. The state’s highest court in 2014 rejected a Blue Hill farmer’s challenge to regulations that required him to be licensed to sell raw milk at his farm stand.

The ruling angered some farmers and consumers, who saw it as a strike against local control. The state contended it was a just protection of public health.

Phil Retberg, sitting in his farm store amid jars of milk and yogurt from his animals, said the food sovereignty movement is about protecting community as much as it is about protecting farms.

“When a mother calls and her kid is being weaned onto our milk, that’s a part of this,” he said. “It makes us necessary.”

Associated Press writer Kathleen Ronayne contributed to this report from Concord, New Hampshire.

]]> 10, 25 Apr 2016 08:03:38 +0000
Obama delivers strong defense of international trade deals Sun, 24 Apr 2016 17:15:43 +0000 HANNOVER, Germany — President Obama delivered a strong defense of international trade deals Sunday in the face of domestic and foreign opposition, saying it’s “indisputable” that such agreements strengthen the economy and make U.S. businesses more competitive worldwide.

Obama, on a farewell visit to Germany as president, is trying to counter public skepticism about a trans-Atlantic trade deal with Europe, while also facing down criticism from the 2016 presidential candidates of a pending Asia-Pacific trade pact.

Despite all that, Obama said, “the majority of people still favor trade. They still recognize, on balance, that it’s a good idea.”

“It is indisputable that it has made our economy stronger,” Obama said about international trade. He said he was confident the trans-Atlantic trade deal could be completed by the end of year, to be presented for ratification. And he said that once the U.S. presidential primary season is over and politics settle down, the trans-Pacific pact can “start moving forward.”

Obama, at a news conference with German Chancellor Angela Merkel, made a strong public show of support for her handling of the migrant issue, saying she was “on the right side of history on this.”

Her decision to allow the resettlement in Germany of thousands fleeing violence in Syria and other Mideast conflict zones has created an angry domestic backlash. Merkel recently helped European countries reach a deal with Turkey to ease the flow, but she and the other leaders are now under pressure to revisit it.

Obama said Merkel was “giving voice to the kinds of principles that bring people together rather than divide them,” and credited her with taking on some tough politics.

But the president reiterated U.S. opposition to the idea of establishing a “safe zone” in Syrian territory, saying it would difficult to put in place.

“As a practical matter, sadly, it is very difficult to see how it would operate short of us essentially being willing to militarily take over a chunk of that country,” he said.

Merkel, in contrast, has endorsed the notion of creating areas that could provide safe haven for the thousands of migrants fleeing the violence, and said such zones would improve access to humanitarian aid. She insisted the proposal would not require outside intervention, saying safe areas should be part of the Geneva peace negotiations that involve the Syrian government and moderate opposition groups.

Obama, looking to project a united front with a leader he referred to as his “trusted partner,” said making safe zones controlled by moderate opposition part of the peace talks shows that “here there’s no space between us.”

Obama spoke after Merkel rolled out the red carpet for him at Hannover’s Herrenhausen Palace, a rebuilt version of the former summer royal residence destroyed in World War II. After reviewing German troops in a palace garden, they climbed a spiral staircase and stepped inside for private talks.

Obama has a tough sell to make for the trade deal known as TTIP, particularly in Germany. He joined Merkel later Sunday to open the Hannover Messe, the world’s largest industrial technology trade fair, and promote the agreement. He was treated to a laser-light filled performance that included robotic arms “dancing” to electronica and actual dancers doing the robot.

Thousands of people took to the streets in Hannover to protest the trade deal on Saturday, before Obama arrived. Some carried placards that said “Yes We Can – Stop TTIP!” It was a riff on Obama’s 2008 presidential campaign slogan.

In November, more than 100,000 people in Berlin protested against the proposed pact.

Proponents say the deal would boost business at a time of global economic uncertainty. Critics fear the erosion of consumer protections and environmental standards.

Negotiators in Washington and Europe are trying to finalize key parts of the deal before the end of the year, after which Obama’s successor and election campaigns in major European countries could further complicate the already difficult negotiations.

Obama said it was important to conclude negotiations even though ratification would be unlikely before he leaves office. “But if we have that deal, then the next president can pick that up rapidly and get that done,” he told the BBC in an interview broadcast Sunday.

It’s not certain that the next president would pick up where Obama leaves off on the trade deal. The pact has not been a top issue in the campaign to choose Obama’s successor. Both leading candidates – Democrat Hillary Clinton and Republican Donald Trump – oppose the Asia-Pacific trade pact for its potential impact on American jobs and wages.

On Monday, Obama was joining Merkel to tour the trade show and giving a speech on challenges facing the U.S. and Europe.

Merkel also used the occasion of Obama’s visit to invite the leaders of France, Britain and Italy to Hannover for a meeting Monday to discuss Syria, Libya, IS, migration and other issues.

Superville reported from Aerzen, Germany. Associated Press writers Kathleen Hennessey and Frank Jordans in Hannover, Germany, contributed to this report.

]]> 10, 24 Apr 2016 17:11:49 +0000
Business week in review: Lawsuit over housing project; good paper industry news Sun, 24 Apr 2016 08:00:00 +0000 ENERGY

Wind developer SunEdison files for bankruptcy

SunEdison, a one-time star in the alternative energy field, is filing for bankruptcy protection after years of rapid-fire acquisitions left the solar company in a desperate cash situation. The company, which has permits for five wind farm projects in Maine, filed with the Bankruptcy Court for the Southern District of New York on Thursday. John Lamontagne, spokesman for SunEdison in Massachusetts, said the bankruptcy filing “should have little impact” on two wind energy facilities already operating in Maine. He said he could not provide any additional information on wind energy projects still under development by SunEdison, apart from saying the company plans to move forward with development. But he said existing projects are on stable finances. Read the story.


Affordable housing project in Munjoy Hill sparks lawsuit

A group of property owners on Munjoy Hill is asking a judge to send an affordable housing development back to the drawing board. The six property owners, only one of whom is a year-round Portland resident, contend that an eight-unit affordable housing project at 65 Munjoy St. does not comply with height and design standards, in a lawsuit filed in Cumberland County Superior Court. The lawsuit also claims the city did not follow the proper process for vetting the proposal by Adam’s Apple LLC before it was approved by the Planning Board on Feb. 9. “The Planning Board’s approval of the Adam’s Apple project is therefore arbitrary, capricious, legally erroneous and unsupported by the substantial and competent evidence in the record,” says the lawsuit, which asks the judge to vacate the approval or remand the project back to the board for further review. The lawsuit is the latest example of resistance by some neighbors to increased development on the Portland peninsula. After years of limited growth, Portland is undergoing a surge in development at a time when housing – especially for low- and middle-income earners – is in short supply. The shortage is driving up rents and providing an incentive for landlords to upgrade their properties, prompting fear that some residents will be priced out of the city. Read the story.

March home sales increase in volume and price

An unseasonably mild March gave Maine’s housing market a needed boost, with both sales volume and median price up significantly from a year earlier. Sales of existing single-family homes increased 14.6 percent from March 2015 to 1,089 sales, and the median sale price increased 7.4 percent to $182,500, according to a Maine Association of Realtors report issued Wednesday. The median price indicates half the homes sold for more and half for less. In February, single-family home sales grew 21.7 percent compared with a year earlier, but the median home price fell 4.4 percent to $160,000 over the same period. Read the story.


Boat builder plans expansion to Brunswick

East Boothbay boat builder Washburn & Doughty hopes to move part of its manufacturing operation to an empty building at Brunswick Landing and create 15 jobs in the process. To help finance the $1 million cost of retrofitting the building at the former Navy air base, the company has asked the town to submit a request for a $400,000 Community Development Block Grant to the state. A public hearing on the application is set for May 2. According to the Letter of Intent submitted to the Maine Department of Economic and Community Development, Washburn & Doughty wants to move part of its steel boat-building operations to a 35,295-square-foot building that was once a Navy maintenance facility for vehicles and other ground service equipment. The company intends to use $200,000 of its own money and a $434,000 bank loan to pay for the cost of adding four overhead cranes, new piping and to modify the building’s ventilation system and add insulation. Read the story.

Rumford mill starts new product line, recalls 51 workers

In a rare bit of good news for Maine’s paper industry, a Rumford paper machine that was shut down indefinitely last year has come back to life and dozens of people have been offered their jobs back. Paper Machine No. 12 was temporarily shut down in May, prompting the layoff of 51 people at the Catalyst Paper mill. In September, management said the machine would remain shut down indefinitely, citing reduced market demand. But the machine restarted at noon Tuesday, and all of the 51 workers furloughed when it was shut down have been recalled. With the recalled workers, the mill now employs 640. A mill spokesman said Catalyst started developing new product lines to diversify its offerings in the global pulp and paper market. One of those new products is Rumford Offset, a specialty grade of paper that is coated on one side and intended for use in marketing materials, that will be made in Rumford. Read the story.


Bob’s sporting goods store to close

The parent company of Eastern Mountain Sports and Bob’s Stores has filed for bankruptcy protection and plans to shutter several New England locations, including Maine’s only Bob’s, in South Portland. Meriden, Connecticut-based Vestis Retail Group LLC said Monday that the move was made because of increased competition from big-box stores and online retailers, as well as an unseasonably warm winter that made for poor sales of cold-weather clothing. The Bob’s location scheduled to close in South Portland is at 301 Maine Mall Road. The store occupies about 20,450 square feet and is adjacent to the Toys “R” Us store, and across the street from The Maine Mall. Read the story.


York County casino proponents abandon effort

In a reversal, the backers of a failed petition drive to put a York County casino question on the November ballot have withdrawn their appeal to the state’s highest court and apparently given up their hopes to revive the campaign. Attorney Bruce Merrill, who represents the casino proponents, filed a motion with the Maine Supreme Judicial Court on Tuesday to dismiss the appeal that he had filed on April 11. Merrill sought to challenge a lower court judge’s decision that affirmed a determination by Secretary of State Matt Dunlap that the Horseracing Jobs Fairness campaign failed to submit 62,123 valid signatures to qualify for the ballot. Merrill’s latest filing with the court offered no explanation for the reversal. He did not respond to a phone message request for comment. Read the story.


Nova Star Cruises files for bankruptcy

Some Portland-area businesses still owed money by Nova Star Cruises Ltd. said they don’t expect the failed cruise ferry operator to make good on its obligations to them. Nova Star Cruises filed for bankruptcy protection April 13 in Canada, listing about $15 million in debts to more than 200 creditors and only $142,000 in assets with which to pay them. Its owner, Eliot resident Mark Amundsen, said in November that he intended to pay all outstanding obligations. Nova Star operated a cruise ferry service between Portland and Yarmouth, Nova Scotia, during the 2014 and 2015 summer tourist seasons. It received about $41 million (Canadian) in subsidies from Nova Scotia’s government, but ultimately failed to attract the number of passengers it needed to remain viable. Read the story.

]]> 0, 25 Apr 2016 12:03:13 +0000
Michelle Singletary: What you can learn from your tax return Sun, 24 Apr 2016 08:00:00 +0000 It is done.

You got your taxes filed in time. Now what?

The IRS says about 60 percent of taxpayers use tax professionals to prepare their returns. Certainly, all those folks carefully looked over the documents.

Or not.

Whether you paid a professional or you did it yourself, don’t breathe out just yet. Because now’s the time to start preparing for next year’s tax season.

No, I’m not bonkers. I know you don’t want to even think about taxes now, especially if you owed the IRS a lot. But the information you collected can be the impetus for improvement.

Let’s walk through some of the sections of the Federal 1040 form and how you can use the information to improve your financial situation.


Nothing brings home your satisfaction or frustration with your income like seeing it in black and white on your tax return.

If you’re just getting by and can’t find enough cuts to save more, what are you doing to change things? Don’t just consider avenues to increase your earnings. Actually do something about it. Check with the local community colleges for any certificate programs or classes you can sign up for to expand your skills.

Have you left money on the table?

A survey last year by staffing firm Robert Half found that employees have a lot of anxiety about asking for a pay increase. Workers would rather clean the house, look for a new job, get a root canal or – and this is crazy – be audited by the IRS than negotiate for more money.

A retired editor at The Washington Post who was my mentor (I called him my workplace godfather) gave me the best piece of advice when I was reluctant (OK, scared) to ask for a raise after another media company had approached me. He simply said don’t be afraid to negotiate for what you are worth. The fact is I didn’t want to leave. But I also didn’t want to use the offer to threaten that I might. “What’s the worst that can happen?” he said. “They’ll just say no. You’ll still have a job, but you’ll know what you’re worth to them to keep you.”

Before you ask, know your worth. At, you can get a free salary report with comparison data about others in your position or a similar one.


This section of the 1040 is the tell-all about certain money moves.

When filling it out, you’re asked about deductions for health-savings and retirement accounts. There’s also a line about student-loan interest.

Contributing to a heath savings account and saving for retirement are good moves. It’s not so great to keep your student debt around even if you’re getting a deduction. Pay that puppy off as soon as you can.


When people get their taxes prepared, they tend to skip right to this section. They’re elated to get some money back. Year after year, many people get a big refund even though their tax situation doesn’t change. This means they’re allowing the government to take too much money out of their paycheck.

But there are quite a few folks who don’t get a refund but instead end up owing a lot of money.

I come across way too many entrepreneurs who don’t set aside money from their revenues to take care of their tax burden.

Make an appointment now – while you have time to make changes – to see a tax professional. Evaluate your tax situation so that you neither get a big refund nor owe a lot of money when tax time comes back around.


Did you have to pay more taxes because you had an early withdrawal from your retirement plan?

I’ve had to counsel a number of people who got into a financial jam and felt they had no choice other than to make an early withdrawal resulting in a higher tax bill and a 10 percent tax penalty. Others dipped into their retirement money to pay down debt. Really reflect on this decision.

Look at the way you’re handling your money and see if there is a way for you to save for emergencies so that you don’t have to tap your retirement plan. You’re going to need that money later in life.


Are you generous enough? In addition to helping people, you’ll get a nice tax break.

Don’t just shove that massive packet of financial information into a file folder. Your return is the key to changes you might make. Or confirmation that things are on track.

Michelle Singletary can be contacted at:

Twitter: SingletaryM

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It’s the law: Beer purity celebrated in Germany Sat, 23 Apr 2016 01:28:53 +0000 INGOLSTADT, Germany — To some it’s the real deal, to others it’s a bland brew, but thanks to a 500-year-old rule everybody can be sure what’s in German beer.

Chancellor Angela Merkel was among those toasting the anniversary Friday of a law that allowed only water, hops and malt as ingredients – yeast was added to the list later.

Praising the law at a ceremony in Ingolstadt, southern Germany, Merkel half-jokingly quoted religious reformer and bon vivant Martin Luther, who said that “he who has no beer, has nothing to drink.”

Records have that in 1516 Duke William IV of Bavaria signed a beer purity law in the city that was eventually adopted throughout Germany. It’s still on the books, albeit with some exceptions, today.

The law originally stipulated that only barley should be used for beer. Other grains, such as wheat, were considered too valuable as food to be turned into beverages, according to Nina Anika Klotz, editor of beer magazine Hopfenhelden.

Another argument was consumer protection: brews that contained ingredients such as fungus and herbs sometimes had “quite undesirable results,” said Klotz.

Critics say the so-called Reinheitsgebot – whose name means divine commandment in German – is little more than a marketing trick dreamed up in the early 20th century to promote German beer against foreign competitors.

While brewers in neighboring Belgium merrily make beers containing coriander and orange peel, for example, such ingredients are theoretically “verboten” in Germany. This has proved particularly frustrating for a young guard of craft beer enthusiasts trying to break into the German market.

But some old-fashioned brewers feel stifled by the law, too.

Helmut Fritsche, owner of Klosterbrauerei Neuzelle brewery some two hours west of Berlin, started what became known as the Brandenburg Beer War after authorities ruled that his black beer was illegal because it contained sugar.

“We fought for 10 years,” he said. “Fought with the federation of brewers, with the state government, until the highest administrative court in 2005 decided that our black beer, that includes a pinch of sugar, could be called beer.”

Fritsche now brews many beers with added natural ingredients, such as cherries, asparagus and even potatoes.

“What do we want beer as a product to represent? We want it to represent flavor. And we shouldn’t inhibit the variety of flavors. Of course we should never add ingredients that are dangerous to humans,” he said.

Fresh ideas may be needed if German brewers don’t want their income to dry up.

While Germans are still ranked second – just after the Czechs – annual beer consumption per capita has fallen from 141 liters in 1991 to 98 liters last year.

At least one novelty seems to have the blessing of mainstream breweries, though. Last year, the share of alcohol-free beer rose to 5.6 percent from 5.4 percent in Germany thanks to its growing popularity among consumers.

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Cuba loosens maritime ban on its expatriates Sat, 23 Apr 2016 01:28:03 +0000 MIAMI — Cuba has loosened a policy banning Cuban-born people from arriving by sea, allowing Carnival Corp. to go forward with the first U.S. cruise to the island in a half-century, the Cuban government and the Miami-based cruise line announced Friday.

The company at first barred Cuban-born Americans from buying tickets for the planned May 1 cruise to comply with Cuba’s ban, drawing complaints from the Cuban-American community in Miami and a discrimination lawsuit. Then, the company said it would sell tickets to Cuban-Americans but hold the cruise only if Cuba relented and changed its policy.

Early Friday, Cuban state media announced the loosening of the maritime ban, and Carnival CEO Arnold Donald said in a statement that the trip would go forward May 1 from Miami. The 704-passenger Adonia of Carnival’s Fathom brand is scheduled to make the initial seven-day trip, with future cruises planned every other week.

Donald said Carnival negotiated a change in Cuban policy, and that now its cruise ships and other commercial vessels will be treated the same as aircraft, which already are permitted to carry Cuban-born passengers.

“This is very positive outcome resulting from discussions we have been having for quite some time,” Donald said in a conference call with reporters. “Today’s development will impact countless lives. It’s now available to everyone.”

In Havana, Cuban state media said the change is part of a broader shift in policy that removes many of the prohibitions on Cubans traveling by ship. Those prohibitions were put in place in response to Cuban exiles launching attacks from the water in the first years after the Cuban revolution.

The Cuban government said people born in Cuba will now be able to travel as passengers and crew on merchant ships and cruise ships, and will eventually be allowed on board yachts as both passengers and crew. The announcement does not specifically mention ferries.

Carnival originally adhered to Cuba’s longstanding previous policy by preventing Cuban exiles from booking passage on the cruise, sparking protests by Cuban-Americans outside the company’s Doral headquarters, criticism from Secretary of State John Kerry and local politicians and a federal lawsuit that claimed discrimination.

Miami-Dade County Mayor Carlos Gimenez, a Cuban-American who had questioned the previous Carnival policy, said Carnival Chairman Micky Arison called him Friday about the agreement. Arison also owns the NBA’s Miami Heat.

“This policy change was the right thing to do, and I congratulate both Mr. Arison and Carnival on their efforts in what is probably one of the very few times that a corporation has successfully negotiated the changing of a policy with the Cuban government,” Gimenez said in a statement.

Beginning May 1, the Fathom will visit the ports of Havana, Cienfuegos and Santiago de Cuba. Carnival says bookings will start at $1,800 per person and feature an array of cultural and educational activities, including Spanish lessons.

The cruise is among the many changes in U.S.-Cuban relations since a thaw between the old Cold War foes began in late 2014.

Carnival is the world’s largest cruise line, operating 10 brands with 100 ships that visit 700 ports worldwide, according to the company.

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