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1298 posts categorized "Speculation"

July 17, 2014

New plan: Newt's at Crossroads

After years in limbo, a plan to build a restaurant/bar in front of Rochester's Crossroads Shopping Center once again is moving ahead.

However, it won't be the long anticipated Buffalo Wild Wings. Instead, it'll be the latest version of Rochester's iconic eatery, Newt's.

Rochester restaurateurs David and Mark Currie are working on plans to build Newt's South as their ninth local restaurant. Their Creative Cuisine restaurants are the original downtown Newt's, the City Cafe, City Market Deli Downtown, City Market Deli South, the Redwood Room, 300 First, Newt's Express and Newt's North.

The project is in its early stages, so it may be a while before construction starts on the large rectangle of dirt and grass.

"If I could break ground today, I would," said David Currie, who owns and runs Creative Cuisine with his brother. "But I'm going to say it will be in the six-month range before it really gets going."

The sibl07162014bbwsignings are buying the site between the Andy's Liquor store and Home Federal Savings Bank from Tom Graf. Graf originally had hoped to build Rochester's second Buffalo Wild Wings there, but a series of legal disputes over parking eventually quashed that plan. The development plan, approved by the city, called for extending BWW's parking onto Crossroads property to have the required number of spaces.

Parking shouldn't be an issue for the new Newt's project because it will be smaller than Graf's proposed BWW. That means the restaurant and all of the required parking should both fit on the island of land in the Crossroads parking lot.

"I thought the Curries could make the best use of the space with the size of what they want to put on it," said Graf. "At the end of the day, it's a win for the shopping center."

07162014newtssouth1The first generation of Creative Cuisine dates to the 1960s with Jerry Zubay and Mike Currie, the father of Dave and Mark. Building a ninth restaurant will add to an already full plate for the brothers.

"The business is a lot of fun. We both love it and enjoy it. We're blessed to work with a ton of great people. That makes it super enjoyable," said Dave Currie of why they decided to open a new place.

Creative Cuisine employs 141 people. The Curries estimate Newt's South will need 20 to 30 employees.

This will be the first time the Curries have opted to construct a new building rather than adapt and renovate an existing site. They had shopped for a south Rochester spot for about a year before the Crossroads deal worked out.

"Building from the ground up took a lot more thought going into it. We're used to finding a 100-year-old building and then working with it," said David Currie.

They plan to build a restaurant similar in look and size to the quirky Newt's North location, which opened in 2011 inside the Wallin Building at 5231 U.S. 52 Frontage Road N.W.

The genesis for the project dates to 2011, when Graf purchased Tasos Psomas' Pannekoeken Huis restaurant and demolished it to make way for a second Rochester BWW.

Even though Graf decided "it just made sense" to have the Curries build on the site, it doesn't mean he's abandoning his own restaurant plans.

"There will eventually be another Buffalo Wild Wings in Rochester. It will happen. The city's big enough for at least one more," he said.

July 09, 2014

Does IBM have future in Vermont?

Here's a little chunk from a well-researched, long article written by Paul Heintz from Vermont's alt paper, Seven Days.

While there is no direct link (as far as I know) between the fate of the Vermont campus and the one in Rochester, this does sound familiar. For anyone interested in the what is happening with Big Blue, this is a pretty worth-while read.

You can read the full article at this link.

What we're looking at is a city," Frank Cioffi says, nodding at a sprawling landscape of industrial buildings, electrical transformers and storage tanks on the banks of the Winooski River.

The 59-year-old economic development guru steers his black Nissan Maxima toward a guard shack that stands sentry at the northeastern entrance to IBM's Essex Junction campus.

"We're not going to Bildebe able to get in," he says, pulling a U-turn and retreating from the fortress. "Security is watching us."

In more certain times, the Greater Burlington Industrial Corporation president might easily escort a reporter through the 725-acre campus, which GBIC developed from farmland 60 years ago. But with Big Blue reportedly nearing a sale of its chip-making division to Emirate of Abu Dhabi-owned GlobalFoundries, IBM Vermont is on lockdown.

Even Cioffi, its loudest local cheerleader, is in the dark about what a sale might mean for the 4,000-plus jobs remaining at the facility. Like many, he suspects IBM will reveal its intentions next week when it releases its second- quarter earnings report.

"We're dealing with two public corporations that aren't going to tell us anything, because they can't," he says.

Clouds of uncertainty have lingered over Essex Junction for more than a decade, as the company has retrenched and its Vermont workforce dwindled from a 2001 peak of 8,500. But never have the skies above the industrial park looked so dark.Ibm-logo

As IBM repositions itself as a services-oriented company focused on cloud computing, it has jettisoned less profitable hardware operations. In January, it struck a deal to sell off its low-end server business to China-based Lenovo for $2.3 billion.

Though GlobalFoundries specializes in the very chip-manufacturing work conducted at the Essex Junction plant, reports in the financial press have indicated that the company is interested in IBM's patents and engineers — not its aging facilities.

July 01, 2014

Mayo Clinic-linked Cardio3 making push into China

Cardio3 BioSciences, a Belgium company working closely with Mayo Clinic, recently launched a joint venture in China, the third largest pharmaceutical market in the world.

Cardiobioscience_jpegWorking with Hong Kong-based Medisun International Limited, it created Cardio3 BioSciences Asia Holdings Ltd. to make a serious push into China. As part of the deal, Medisun purchased $34 million in stock. It now owns 8 percent of the company's outstanding shares.

Cardio3 is publicly listed on the European stock markets NYSE Euronext Brussels and NYSE Euronext Paris, though it is not traded publicly in the U.S. Get_photo

The company says that $34 million will finance the U.S. clinical trials for C-Cure, Cardio3's regenerative heart treatment. Cardio3 CEO Dr. Christian Homsy flew to Rochester in January for a press conference at Mayo Clinic to announce that U.S. trial. Mayo Clinic in Rochester is one of the trial sites. Homsy gave a tentative time line of commercialization in Europe possibly by 2017 and by 2018 in the U.S.

Medisun has also committed to buy an additional $34 million shares of Cardio3 stock from existing shareholders in the next eight month at a price per share equivalent to the 10 days average preceding the offer.

This new deal means Medisun's ownership of Cardio3 has quickly leapfrogged Mayo Clinic's investment. As of June 16, Mayo Clinic owned 5.05 percent of the available shares of Cardio3. Medisun had just 4.21 percent at that point. As of June 25, Mayo Clinic controlled 3.1 percent of the shares.

Mayo Clinic researchers Dr. Andre Terzic and Dr. Atta Behfar originally developed the proprietary process of regenerating heart tissue with stem cells drawn from a patient's own bone marrow. Since 2007, Cardio3 has licensed patents and related research from Mayo Clinic. Terzic and Behfar each have a financial interest in the company.

Homsy has previously stated that he hopes to eventually base a few employees in Rochester for office and laboratory work. Cardio3 previously attempted to open a U.S. headquarters here, but that fizzled when the one person based here left.

Many consider what Cardio3 is attempting as the "holy grail" of cardiac treatments. Terzic previously described repairing faulty hearts as a "major unmet need worldwide." He estimated about one-third of all deaths stem from heart disease.

To date, the promising company has raised $121 million in equity and capital.

A recent study also estimated that the global market for such treatments could grow to $18.2 billion by 2019. The U.S. market was valued at $6.1 billion in 2012, with potential to increase to $8.49 billion by 2019.

“With this presence in Greater China, we are very proud to become the first global player in the field of cardiac regenerative medicines, aiming to commercialize our leading edge cell therapy to patients all across the globe,” stated Cardio Chairman Michel Lussier in the announcement of the venture.

Medisun Chairman Danny Wong says that his company is organizing medical conventions in August "to promote cell based medicines as well as Cardio3’s technology" in both Beijing and Shanghai.

"We are passionate about this project and I am certain that our involvement with Cardio3 as a leader in this field, combined with our local knowledge of the regulatory, healthcare and market access capabilities and expertise, will bring success to all the parties involved,” said Wong.

All the costs of Cardio3's moves in China will be funded by Medisun, with a minimum of $27 million committed during a three year period. Cardio 3 has 40 percent ownership in the joint venture, which will drop to 30 percent when clinical trials are up and running.

Success of the Phase III clinical trials that allow Cardio3 to market C-Cure in Asia would trigger  royalties ranging between 20 and 30 percent of net sales depending on total revenue of the joint venture.

June 30, 2014

Consultants hired to create DMC blueprint w/ FULL CONTRACTS

Here's some of the lead-in to my package from the weekend about the $4.1 million  contracts for the consultants to create the Destination Medical Center plan to re-make Rochester.

There's a lot more detail in the rest of the package. So if you are interested in this topic, I'd suggest reading the full piece.

And for the document wonks out there like me, here's the 251 page PDF that includes all of the contracts with Nelson / Nygaard Consulting Associates of San Francisco; Kimley-Horn and Associates of Cary, N.C.; AECOM Technical Services of Los Angeles; and EE&K of New York.

Download Combined Consulting Agreements EDA(1)

 

---------------

Planning for a complex initiative like Mayo Clinic's Destination Medical Center doesn't come cheaply.

The surge of DMC hype already has national and international businesses fluttering around Rochester's sudden glow. The sale of commercial real estate is booming, particularly in the downtown core. New housing developments are being mapped out for the tens of thousands of people expected to move to Rochester for the forecasted 35,000 to 45,000 new jobs.

51687d3f5e0c6-image However, there's no blueprint yet for the $6 billion upgrade of the city's infrastructure, transportation systems, private development and more that's at the heart of DMC's vision of a Rochester better suited to accommodate more patients for Mayo Clinic.

Hiring a team to create a detailed plan for the massive undertaking to change the face of the city was a top priority for the public Destination Medical Center Corp. board of directors.

Public-private projects on this scale are rare in U.S., so there are not many examples to follow. National experts say sports developments, like the $975 million Vikings stadium and the new $622 million Atlanta Braves stadium, are about the only comparable projects to what is being proposed in Rochester.

The DMCC contracted with the DMC private Economic Development Agency, led by Mayo Clinic's Lisa Clarke, to handle hiring consultants to create the overall DMC "development plan." In December, the EDA board posted requests for proposal for six roles in the planning process.

800px-Gonda_building,_closer_upWith so much money on the table, proposals came in from 19 leading firms across the country and even overseas. Five of the teams vying for the contracts are based in Minnesota with three of them having offices in Rochester.

In April, the EDA wrapped up that six-month hiring process by contracting with four national consulting firms. Two were chosen to fill dual roles.

All of the consultants have had experience in major public-private projects, from stadiums to transit systems to airports.

Those four, plus another company hired in February, will be paid a total of $4.1 million this year to create the DMC's grand plan by February. That $4.1 million accounts for almost half of the DMC's total city-funded budget of $8.2 million for 2014.

In the end, all of the Minnesota hopefuls were passed over for the DMC planning jobs.

"The main factors that influenced our decisions was experience, knowledge of the market and the team they put forward. Those were the basic components we needed to consider as we moved forward," said Clarke. "I'm very confident that we have hired the best."

June 24, 2014

Prosthetic Laboratories of Rochester sold to Texas company

After 30 years under local ownership, a Rochester prosthetic firm has been bought out by an Austin, Texas-based company.

Prosthetic Laboratories of Rochester, Inc., founded here by former Mayo Clinic technicians Steve Amundson and Mike Gozola in 1984, has been acquired by Hanger Inc.

Exterior_rochester3Darren Overton of Prosthetic Labs confirmed the sale, but didn't say when it occurred or what it might mean for the about 85 employees that work at Prosthetic Lab's offices in Minnesota, Wisconsin and South Dakota.

Hangarlogo"We aren't at liberty to disclose details of the acquisition, but what we can share is that we are pleased our company has joined the Hanger family," he stated in an email response to questions. "Hanger provides more opportunities and resources to our staff and patients than we could as an independent facility."

A media representative for Hanger said they could not discuss the purchase yet. The publicly traded company describes itself as the largest owner and operator of orthotic and prosthetic patient care clinics in the United States.

In 2009, the majority owner of Prosthetic Labs was Rochester developer Gus Chafoulias. He owned the private company along with Gozola and Amundson. It's unclear if those three were still the owners, when Hangar bought the firm.

Its main Rochester facility is located at 121 23rd Ave. S.W., in front of the Shorewood Senior Campus along Second Street Southwest. Prosthetic Labs' corporate family also includes Lair’s Shoes, the Silhouette Shoppe and Ortho Innovations. Its staff saw an average of 10,000 patients a year at its Rochester office in 2009.

While Prosthetic Labs has been very successful locally, it's much smaller than its new new owner. Hanger reports that it has an annual net income of about $60 million and makes about $1 billion of sales a year. It has more than 5,000 employees working at 740 clinic locations.

Acquiring mid-sized firms like Prosthetic Labs is not a new thing for Hanger. In 2012, it bought six companies.

In May, Hanger reported earnings for the first quarter that did not rise to the levels analysts had expected. The company reported an earning per share of 19 cents, missing the estimate of 24 cents. Its quarterly revenue of $235.60 million was below the anticipated $243.60 million

June 23, 2014

Rochester's Dunkin' Donuts to open at end of month

Doughnuts should be dunking before the fireworks start launching.

Rochester's new Dunkin' Donuts, the first to operate in Minnesota since 2005, is prepping for a late June "soft" opening. The return of DD is happening at 15 First Ave. S.W. in the Kahler Grand Hotel complex in the heart of downtown.

06232014dunkindonuts"We're in good shape," says Donna Caflisch, who represents Rochester Retail Services. "We're working hard on training now to make sure we're ready with good customer service."

So if you smell doughnuts in downtown during the next few weeks, it probably won't be your imagination. The staff is rolling through lots of training batches.

While Caflisch already has a full team of about 30 employees on staff, she says they still are hiring people that help with DD or other projects. Rochester Retail Services also manages the new Freshens franchise in the Kahler Inn & Suites and is working on a second one in the subway of the Marriott Hotel. That second Freshens could open its doors, if everything goes according to plan, in early August. It's located in the space that last housed the long-time downtown shop, The Crate.

She says the early responses to recent opened Freshens in the Kahler Inn have been very positive.

"People seem to be excited to see some variety in their (downtown) menu choices," said Caflisch.

When asked about speculation that a second Dunkin' is being planned for southeast Rochester, she said she couldn't comment.

While all of the franchises managed by Rochester Retail Services are located in downtown hotels owned by the Kahler Hospitalty Group and the firm offices in the Kahler, Caflisch stressed that there is absolutely no direct connection between any of the owners of the Kahler hotels and the owners of the restaurant franchises. However, she declined to identify who actually owns the franchises.

Rochester's Dunkin' Donuts franchisee, Donuts Non Traditional LLC, incorporated in October 2014. The address it uses is Rochester's Dunlap & Seeger law firm. That's the same address used for Rochester Retail Services, which incorporated in March 2013. It's not unusual for some companies to use their attorneys' address for such filings.

May 28, 2014

Analyst speculates that Hormel may be target of takeover bid

There's a lot of merger and acquistion activity cooking in the meatier aisles of the financial markets these days.

Spammy2The latest was Pilgrim Pride's surprise move to buy Hillshire Brands. Lots of investors with stock options profited from the $6.4 billion deal and that's leading to speculation about the next meat deal to hit the grill might be.

I spotted a very speculative column today on Barron's website by Scott H. Fullman of investment research firm, Increasing Alpha, on that topic. Fullman focused Austin's favorite Fortune 500 company and the creator of Spam, Hormel Foods, as a takeover candidate.

I have no idea if his theories make sense.

Here's some from Fullman's piece:

"Often when such an acquisition takes place, we look for other candidates. One stock seeing increased interest re Spamproductscently is Hormel Foods Corp, which rose back above its 100-day moving average Tuesday and was attempting to break above its 50-day moving average, but ended the day just below it. Momentum is rising sharply and volume is higher as well.

We are seeing a slight increase in implied volatility for Hormel, even as the shares jumped. The 30-day implied volatility is up more than 0.7% for calls, and down 0.8% for puts, indicating a sharp shift in bullish sentiment.

Despite the rise, those risk premiums are still close to their 52-week lows. Clearly, other traders are having the same thought as we are.

If you are looking for a low-cost, low-dollar-risk entry, consider purchasing the Hormel July $50 calls, which are offered at 40 cents. The delta on that option, which shows the current relationship between the movement of the stock and the option, is 23%, but it is expected to rise as the call becomes closer to being at-the-money, thereby increasing the leverage of the option. If the stock rises 10% from here to $52.58, the options will be worth $2.58, for a gain of $2.18 per share, or 545%. If the shares fail to rise, you will lose 40 cents per share, or 100% of your investment.

That compares, however, to a potential loss of $1.14 for those purchasing shares if the stock reverts to Friday's closing price.

Our suggestion is to purchase an equivalent number of calls to the amount of stock you can afford to buy, thereby keeping your risk in check.

May 14, 2014

Lost Cajun restaurant plans grand opening

Construction is cooking along at Joe and Theresa Peplinski's Lost Cajun eatery and the new Rochester restaurateurs have set a target date for their grand opening.
04142014lostcajunconstruction
The Peplinskis are optimistic that their new Southern food place should be ready for a grand opening on June 28.

"It might be tight. There's still a lot of construction to do, but we think June 28 will work," says Joe Peplinski.

They are in the midst of transforming a 19-year-old former SuperAmerica convenience store at 2025 South Broadway into a Cajun-flavored cafe. The husband and wife also are working on hiring the restaurant's team of the employees to staff their new place.

Joe estimates that they'll have between 30 to 40 people on staff for the opening. They hope to be training employees at least by June. While they are starting to interview job candidates, the Lost Cajun still is accepting applications, which can be downloaded from its website.

05142014lostcajun2The menu will bring the taste of down-home Louisiana cooking to Rochester's cold-blasted taste buds. That means gumbo, chicory coffee, po' boy sandwiches, crawfish etouffe, shrimp bisque, fried okra and the sweet dessert pastry beignet.

The 1,900-square-foot restaurant will be able to seat up to about 55 inside and possibly 30 more outside.

After working at IBM for 28 years, Joe is finding the experience of opening a new restaurant very educational.

"It's a very exciting new adventure for us," he says.

May 09, 2014

New trustees bring political, financial clout to Mayo Clinic board

Mayo Clinic is bringing a significant amount of political and financial clout onto its Board of Trustees with the addition of two new members.

Armando Codina and Diana Taylor were officially named as board members at the organization's quarterly meeting on Friday in Rochester.

SFBJ Armando Codina 315*304Codina, a 66-year-old Cuban immigrant, is the executive chairman of Coral Gables, Fla.-based Codina Partners. Codina Partners is a powerful real estate investment and development company.

He has deep personal, political and business ties to the Bush family. By joining the Mayo board, he follows in the footsteps of Barbara Bush, who was a trustee from 1993 to 2001. Codina serves on the boards of many public companies, including General Motors, Home Depot and Merrill Lynch.Diana-Taylor

Taylor, 59, is a managing director of Wolfensohn Fund Management in New York City. She served as the superintendent of banks for the state of New York from 2003 to 2007. For many years, she has been a very public companion of billionaire and former NYC mayor Michael Bloomberg.

Taylor serves on many boards, including Citigroup and Sotheby’s.

The Mayo Clinic Board of Trustees, a 31-member group of public representatives and Mayo Clinic physicians and administrators, is responsible for patient care, medical education and research at Mayo Clinic’s sites.

May 07, 2014

Think changes direction on future of Greenview Drive sites

Think Mutual Bank is changing its thinking about the future of its presence on Rochester's Greenview Drive.

The Rochester bank had previously planned to sell its 21,000-square-foot branch at 1698 Greenview Drive S.W., and then build a replacement  at 1509 Greenview Drive S.W., near the Ramada hotel. The now-empty lot was previously home to a BP Pump N Munch convenience store, which closed in 2009. Think bought the site for $785,895 that same year and demolished the shuttered C-store.
Thinksexpumpmunchsite
At that time, the bank executives believed the 1698 Greenview branch was too large and inefficient.

However, Think's leaders have changed their minds about that. It has been decided to now sell the empty lot by the hotel and keep the current Greenview branch. While there has been serious interest in buying the branch building, others have also shown interest in buying the open lot.

Jenny Hosfeld, senior vice president of community banking, explained the change in strategy.

"We looked at our current facilities and decided to take the opportunity to make improvements to our current branch to make it better for our customers and our staff," she said. "It's a great location with great visibility, so why move when we can make it better?"

About 12 Think employees work at that location.

Think is putting a team of employees together to work on the plan to upgrade the Greenview building. Hosfeld said any construction work will be a 2015 project. She added that it's possible that the bank may incorporate some of the design of its most recently built branch at Shoppes on Maine in Rochester in the future look of the Greenview site.

Thinkgreenview"We're really proud of that design," Hosfeld said.

She declined to comment on whether the bank is currently in negotiations with any potential buyers of the empty Greenview plot, though all of the marketing signs on the site have been removed.

EDITORIAL COMMENT - The real estate rumor mill says that a prominient Rochester developer has designs on the site, but that's unconfirmed at this point.

While Think isn't planning on any construction in Rochester in the near future, it did just break ground on a new branch project in Edina on Monday.

"for a community bank of our size, our branches are still big part of how we do business," Hosfeld said.