RIEDER: AN UGLY NEWSPAPER MELODRAMA IN PHILLY

Story first appeared in USA TODAY.

The messy soap opera playing out at The Philadelphia Inquirer reads like a Harvard Business School case study of how not to run a company.

Consider:

• The only two members of the management committee that runs the newspaper's parent company — two of its six wealthy owners — are at war.

• The paper's publisher and editor were at war until the publisher abruptly fired the editor last week, triggering a firestorm. Actually, they still are at war.

• The Inquirer and the Daily News, its sister paper, are at war with the company's dominant website, philly.com.

• The daughter of one of those dueling management committee members runs that website.

• The longtime companion of the other management committee member is the city editor of the Inquirer and a staunch ally of the now-fired editor.

• One of the management committee members and another of the owners have filed a suit seeking to reinstate the editor and kick the publisher to the curb.

• A petition to bring back the editor has been signed by scores of distinguished journalists. On Tuesday, Teamsters who work for the paper picketed their employer.

• And the company's human resources department has directed the staff not to talk about all of this astonishing turmoil. That's right: A newspaper company is telling its staff to stiff-arm reporters.

It's not so long ago that this battlefield, the Inquirer, was one of the nation's very top newspapers. But newspapers everywhere have been buffeted by the digital era, and the Inquirer has taken more than its share of hits.

It has had five owners over the past seven years. Circulation and advertising revenue have plummeted. The staff has been severely cut. Yet it's still a vital force in its hometown, a vibrant city confronting a daunting array of social problems. Philly needs a strong Inky. People living in Philadelphia Apartments get the paper religiously.

And hopes were high when the latest owner, Interstate General Media, purchased the Inquirer, the Daily News and philly.com in April 2012 and installed Bill Marimow as editor of the Inquirer.  Many of it's readers living in Old City Apartments.

Marimow, a highly respected journalist, won a couple of Pulitzer Prizes at the Inquirer and, after stops at the Baltimore Sun and NPR, returned to the Inquirer in the top newsroom spot in 2006. But when the papers were sold yet again four years later, the new owners demoted Marimow, explaining they wanted someone with more digital chops.

Marimow is known as a rigorous traditional journalist with a commitment to hard-edged watchdog reporting. And, yes, it's true that he has rarely been confused with Steve Jobs. Rather than stay at the paper as a reporter, he decamped to teach journalism at Arizona State University. (Disclosure: Marimow is a friend of mine and a fellow Philly guy.)

But then the paper was sold again. And when management committee members Lewis Katz, a parking magnate and former owner of the New Jersey Nets, and George Norcross, a South Jersey businessman and political power, asked him to once again run his hometown paper, Marimow said yes.  More people in Center City Apartments were wondering how this new turmoil was going to affect the articles that they read.

But there were signs of trouble right away. Robert Hall, then COO of the Inky's parent company but soon to become CEO and the paper's publisher, unleashed a torrent of "scathingly critical" comments at Marimow and warned he would "watch over" him, according to the lawsuit filed by Katz and fellow owner H.F. "Gerry" Lenfest seeking to restore Marimow to the helm. (Hall says the suit doesn't capture the conversation accurately.)

To no one's surprise, Marimow and Hall had their differences. Hall was pushing for a lot of changes that Marimow didn't want to make (he did make some of them). But according to one knowledgeable source, trouble began in earnest when Marimow met with Norcross early this year. Norcross presented the editor with some research strongly suggesting that The Inquirer sharply cut back on editorials, perhaps running them just once or twice a week, and reduce its roster of local columnists. Marimow said no.

Norcross isn't a guy who likes to be told no. After that, the source said, Marimow found himself under unrelenting pressure from Hall.

The Norcross-Marimow relationship certainly didn't improve last May after philly.com enlisted the state's governor, Tom Corbett, to write a column. Marimow hated the idea. But the paper has no control over the site, which leans toward linkbait rather than news. So he had the paper do a story about Corbett's column that contained this embarrassing quote from website chief Lexie Norcross: "Considering that the Inquirer and Daily News slam (Corbett) every day, I think it's actually equal, giving him a chance to speak."  Students in University City Apartments were intrigued by the underlying fighting between the paper and the website.

Endgame arrived on Monday, Oct. 7, when Hall abruptly fired Marimow. The final straw, apparently was Marimow's refusal to fire five editors Hall ordered him to get rid of. In an ugly, widely leaked e-mail to the owners justifying his action, Hall was brutally critical of Marimow and the editors he wouldn't sack.

In an interview, Hall said he and the owners had been pushing Marimow for months to move more rapidly on, among other things, a redesign of the paper and implementing new approaches suggested by research. "It was time to make a change," he said. "We need to move a lot quicker."

For his part, Marimow says, "It's heartening to me to have two people with the integrity and public commitment of Gerry Lenfest and Lewis Katz working to assure the integrity of the Inquirer and the Daily News are preserved. I think it's tragic for the Philadelphia community that this has resulted in open warfare."

And so the paper is in limbo — one reporter says the newsroom feels like a rebel province that needed to be put down. And while the whole sorry scenario is terrible for the journalists, it's even worse for the Philadelphia region, which desperately needs a news outlet relentlessly reporting on its pressing problems, not one transfixed by its own melodrama. A Philadelphia Business Lawyer continues to watch the story closely.

Philadelphia Apartments • Philly Apartments`Luxury Apartments Philadelphia Apartments

originally posted on Scripps Howard News Service, GateHouse Media, Inc

Looking to improve your guest bedroom?

For most of the year, they function as flex spaces for offices, playrooms, dens or craft rooms. But when overnight guests descend for the holidays, it's time to transform those spaces into quiet sleeping quarters as warm and cozy as a fleece robe.

A prominent interior designer says clients have been calling about their kids and family coming home and want to make it really comfortable for them, I'm turning studies and hobby rooms into guest bedrooms.

Renters can always enjoy luxury Philadelphia apartments located in the heart of the city's most popular neighborhoods.

The always-popular daybed does double duty as a sofa by day and a bed by night. interior designers often choose models with trundles, which can be pulled out into a double bed.

One interior designer recently outfitted a client's den with an antique daybed covered in velvet bedding -- with a large round bolster pillow that turns it into a comfortable sofa. New French doors can close off the den for sleepovers.

Sleeper sofas in family rooms and multi-use spaces also are making a comeback. That's because today's models are more like slumbering on a cloud than across a metal pole, according to designers and salespeople.

According to a sales associate at Baker Napp & Tubbs showroom in Minneapolis, technology has really improved the comfort of sleeper sofas, manufacturers have redesigned how the bar supports the bed, and mattresses have gotten thicker and firmer.

Today's sleeper sofas are also a lot more stylish. Hancock & Moore manufactures a leather Chesterfield sleeper sofa and many traditional upholstery lines include sleeper sofas.

One designer created a combination office/guest bedroom by integrating a Techline Studio queen-size Murphy bed and bookshelf system. When the bed is tucked away, it functions as an office, and there's room for a printer and desk. When it's folded down, it's pretty and inviting and has a built-in reading light and nightstand.

Guest accommodations don't have to be fancy -- a quiet, restful place to get a good's night's sleep can be enough.

And if your guests are early risers, there's one sure-fire way to make them feel at home: Show them where the coffee is stored and how to work the coffeemaker.

More tips

Want to give holiday houseguests a hotel-like experience? Here are more tips:

-- Reading lamp, reading glasses and alarm clock -- set to the correct time -- on a nightstand.

-- Basket filled with travel-size soap, shampoo, toothbrush, toothpaste, mouthwash and Q-tips in the room or a nearby bathroom.

-- Folded fresh towels in an easy-to-find place.

-- Pen and paper in the nightstand drawer.

-- Nightlight.

-- Don't use air fresheners or fragrant candles, because some people are sensitive to scents.

-- Make sure the room and bathroom the guest will be using are both squeaky clean.

-- Empty out dressers and clean out the closet. Add padded or wooden hangers.

-- Set out a luggage rack or a bench with a cushion for suitcases.

-- Inexpensive decorative screens for a family room or basement give guests privacy.

-- Tie a ribbon on pillows labeled "firm" or "soft" and "down" or "hypoallergenic."

-- A water carafe and glass on the nightstand.

-- Blow up the air bed and put on sheets ahead of time, not when guests are there.

-- Lay a nice throw at the end of the bed.

-- Hagen's parents and in-laws stay in a lower-level guest bedroom where it's easy to hear footsteps. "I give them a sound machine to block out noise."

-- Magazines next to the bed for insomniacs.

-- If you have Wi-Fi, share the code for guests' laptops and iPads.

-- Watch for a sale and pick up a robe, just like at a nice hotel.

30-Year Mortgages at Record Low

Story first reported from USA Today

The average rate on 30-year fixed mortgages fell again, dropping below 3.5% for the first time on records that date back 60 years.

Mortgage buyer Freddie Mac said Thursday that the average rate on the 30-year loan dropped to 3.49% from 3.53% last week. The loans are the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year fixed mortgage, a popular refinancing option, dipped to 2.80%. That's below last week's previous record of 2.83%.

The rate on the 30-year loan has fallen to or matched record lows 13 of the past 14 weeks.

Cheaper mortgages have helped drive a modest but uneven housing recovery.

For example, another report Thursday said buyers signed fewer contracts to purchase previously occupied homes last month.

The National Association of Realtors says its index of pending sales agreements fell 1.4% in June to 99.3. May's reading was revised down to 100.7.

A reading of 100 is considered healthy. The index is 9.5% higher than it was a year ago. The index bottomed at 75.88 in June 2010 after a homebuyers' tax credit expired.

Contract signings typically indicate where the housing market is headed. There's generally a one- to two-month lag between a signed contract and a completed deal.

Sales of new and previously occupied homes fell in June but were higher than the same month last year. Home prices have started to stabilize in many large markets. And builders are more confident and are putting
up more houses than they have in nearly four years.

Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. Many homeowners use the savings on renovations, such as bath remodels and bathroom remodels, furniture, appliances and other improvements, which help drive growth.

Still, the pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can't afford larger down payments required by banks.

The sluggish job market could deter some from making a purchase this year.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country on Monday through Wednesday each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1% of the loan amount.


The average fee for 30-year loans was 0.7 point, unchanged from last week. The fee for 15-year loans rose to 0.7 point from 0.6 the previous week.

The average rate on one-year adjustable rate mortgages rose to 2.71% from 2.69%. The fee for one-year adjustable rate loans edged up to 0.5 point from 0.4 point.

The average rate on five-year adjustable rate mortgages jumped to 2.74% from 2.69% last week. The fee was unchanged at 0.6 point.

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Young professionals prefer more urban living environments

Young and educated professionals among the USA's largest metropolitan areas are moving closer to urban, downtown living spaces. The emerging popularity of city dwellers has resulted in the transformation of old, abandoned warehouses into modern historic apartments.

In almost over 70% of nation's 51 largest cities in the past decade, the population of college-educated individuals grew twice as fast within 3 miles of the urban center as in the rest of the metropolitan area. For states like Pennsylvania, that means more Philadelphia apartments for rent, with many unique living features.

Even in city of Detroit where the population decreased by 25% since 2000, the downtown area has witnesed 2,000 young and educated residents new residents, according to a Census analysis by economic consulting firm Impresa Inc.

Cities all over the nation are realizing an influx of young talent, and many developers are taking advantage of profitable opportunities.

Reinhold Residential is one company that specializes in architecturally unique, urban apartments designed with a luxurious and contemporary approach. Reinhold renovates historic warehouse buildings into quality living atmospheres. From luxury apartments in Chicago to glamorous pads in St. Paul, MN, the company is expanding parallel to the trends of migrating city residents.

In Cleveland, Ohio, the downtown area added 1,300 college-educated people ages 25 to 34. That growth of 49% has upped the demand for places to live.

Apartments in Pittsburgh have also been of higher demand with respect to the latter trends. More and more young professionals, especially in the fields of medicine, are seeking popular living hot-spots like Shadyside apartments, which neighbor the University of Pittsburgh Medical Center Shadyside Hospital.

David Egner, president and CEO of Detroit's Hudson-Webber Foundation, claims such data hints that they city of Detroit is on headed in the right direction. Three of the city's anchor institutions — Wayne State University, Henry Ford Health System, Detroit Medical Center — recently launched a campaign called "15 by 15." The program is designed to bring 15,000 young, educated people to the Detroit's downtown area by 2015.

The campaign boasts a powerful arsenal of cash incentives, including a $25,000 forgivable loan to buy (need to stay at least five years) downtown or $3,500 on a two-year lease.

Also seeing tremendous growth are the Loft District apartments in Baltimore. These contemporary living spaces are the ideal comfort retreat for the emerging mass of young city professionals.

As these trends continue, developers like Reinhold Residential will continue to pursue unique living spaces or potential warehouses capable of apartment makeovers.

Board OKs new Water Line in Gas Drilling Area

BusinessWeek

A Pennsylvania state water and sewer project financing agency on Tuesday approved nearly $12 million to extend municipal water service to residents of a small town who are complaining of tainted well water in the midst of heavy Marcellus Shale natural gas drilling.

State environmental regulators view the money approved by the Pennsylvania Infrastructure Investment Authority board as essentially a down payment, saying they plan to sue to recoup the money from Houston-based Cabot Oil & Gas Corp.

The board voted after hearing a lawyer's threat that Cabot will sue to overturn an approval, as well as pleas from Dimock residents who say that for two years, they have been unable to use their brown, methane-tainted and rash-causing well water.

One man from Dimock, a rural community 15 miles south of the New York border in northeastern Pennsylvania, toted a plastic milk jug of brown water -- poured from his tap, he said.

The clash between the state and Cabot over Dimock is Pennsylvania's highest-profile regulatory dispute in the Marcellus Shale since drilling crews, financed by cash from around the world, were lured two years ago by what could become the country's largest natural gas field.

"The only thing that I regret is that it's taken two years for this company, Cabot, to be faced with a solution," John Hanger, secretary of the Department of Environmental Protection, said after the meeting. "You saw today what Cabot does: They bring the lawyers in. They've done that for two years. They are unique in having lawyered up, as opposed to really dealing with the problem. Every other company I've dealt with ... has accepted responsibility and gone through the work of fixing the problem."

The applicant, the Pennsylvania American Water Co., would use the money to connect 14 households, and possibly more, to the water system of Montrose, a town about 6 miles away. Construction is expected to take more than a year, and would be completed after a newly elected governor, Republican Tom Corbett, takes office in January.

Cabot denies that it is responsible for the polluted water wells, saying its wells were properly designed and built to prevent gas from migrating underground and into the water table.

A Houston-based lawyer representing Cabot, Douglas Daniels, asked the board to put off consideration of the application, and said its rushed filing and consideration violates state laws and agency procedures -- assertions rejected by authority staff.

Daniels then said numerous parties, including some local governments, plan to sue over the approval.

"Because Secretary Hanger has made abundantly clear ... that he will seek to use the resources of the commonwealth to force Cabot to pay for this line, Cabot will have no choice to join in those efforts," he said.

The board approved a $11.6 million grant and $172,682 loan.

EDITORIAL: Marcellus Shale Tax a must for Pennsylvania

DelCo Daily Times

For the last couple weeks, the Daily Times Editorial Board has been interviewing candidates for state and local offices. There hasn’t been a lot of happy news coming out of those sessions — particularly those with incumbent state legislators.

Republicans and Democrats alike say Pennsylvania is staring at a fiscal abyss in the next year. With an economy that barely has a heartbeat, it’s being projected that the state is looking at a deficit of anywhere from $3 to $5 billion.

Making the situation worse is the fact that the man who is most likely to become the next governor — Republican Tom Corbett — has flatly ruled out any new tax or tax increase to help fill that gap.

(Corbett this week did propose one revenue producer: Selling the state store system. But that’s an idea that’s been bandied about Harrisburg for decades, always with the same result: An ignominious death.)

There is another source of revenue that most lawmakers deem promising. That is a proposed tax on natural gas extraction in the Marcellus Shale region — a rock bed the size of Greece that lies about 6,000 feet beneath New York, Pennsylvania, West Virginia and Ohio. Since late 2008, gas drillers have crowded the area, which they believe could supply the entire country’s natural gas needs for up to two decades.

Almost all of the natural gas produced in the United States is subject to a severance tax, which produces a significant source of revenue for a wide variety of services — as well as dealing with the inevitable environmental problems the extraction process, called fracking, produces.

Pennsylvania is the only state in the nation that does not impose a severance tax of any kind. That, according to the Pennsylvania Budget and Policy Center, has led to a $100 million loss of potential revenues in the last year alone. The commonwealth is giving away, for free, a one-time resource to energy companies that gladly pay for it everywhere else in the nation, the center said in a report issued Thursday.

Now, $100 million is a drop in the state’s money pit. But it’s nothing to be ignored.

How likely is it that the state Legislature will do the right — and fiscally responsible — thing?

It’s not looking good at this point. Harrisburg Democrats, seeing riches, are proposing substantial tax penalties; Republicans, saying they fear a big tax will scare drillers away, want minimal levies. Gov. Ed Rendell, who knows Corbett opposes any extraction tax, has been trying to play the middleman and bring those parties together.

But Thursday, he said that process “clearly is dead” for this year and blamed GOP intransigence. A spokesman for Senate Republicans said they were surprised by his stance, and they are willing to continue talking.

Perhaps it will take the November election to get the process going again. If Corbett wins, as expected, that may spur responsible members of both parties to come to an agreement.

Clearly, the tax is the right thing to do. The prospect of drowning in $5 billion worth of red ink makes it the necessary thing to do, too.

Penn Evaded Harvard Losses With `Defensive' Fund, Marks Says

Bloomberg

The University of Pennsylvania, the Ivy League school founded by Benjamin Franklin, outperformed its wealthiest peers by avoiding many hard-to-sell assets such as real estate, according to Howard Marks, former chairman of the the investment committee.

Penn held less in private equity and property, more in stocks and owned a “defensive” mix of hedge funds, as well as “substantial” cash and short-term U.S. Treasuries, Marks wrote in an Oct. 20 memo to trustees, obtained by Bloomberg News. The Philadelphia school’s investments fell 16 percent in the year ended June 2009, versus the 27 percent and 25 percent declines of Harvard and Yale, the two richest U.S. universities.

“Most things in investing are two-edged swords: if you do more of them, you’ll make more if they work but lose more if they don’t,” wrote Marks, chairman of Oaktree Capital Management LP in Los Angeles, who left his endowment post on June 30. “Two prominent examples are (1) using borrowed money, or ‘leverage,’ to magnify results and (2) investing in illiquid assets that can’t always be sold on demand other than at a substantial discount from their fair value.”

The $5.7 billion fund outperformed Harvard in Cambridge, Massachusetts, and Yale in New Haven, Connecticut, again in the past year, while still trailing them over the last decade. Yale’s David Swensen pioneered the strategy of using private equity, real estate and commodities to beat stocks and bonds. These infrequently traded stakes ballooned as a percentage of big endowments when markets tumbled after the September 2008 bankruptcy of Lehman Brothers Holdings Inc.

5.6% a Year

Penn averaged annual increases of 5.6 percent in the past decade, compared with the 7 percent and 8.9 percent returns at Harvard and Yale, and its own target of 8.25 percent. In the year ended June 30, Penn gained 13 percent on investments, tied for third-best in the Ivy League, while Harvard’s $27.6 billion endowment climbed 11 percent and Yale’s $16.7 billion fund advanced 8.9 percent.

Columbia University’s $6.5 billion fund in New York led with a 17 percent gain, followed by Princeton University’s $14.4 billion endowment in New Jersey, which increased 15 percent. Cornell University’s $4.4 billion endowment in Ithaca, New York, matched Penn last year.

Yale was the worst performer among the eight Ivy League schools, while Harvard ranked fifth.

Marks, 64, started Oaktree after leaving TCW Group Inc. in 1995. The firm managed $75.1 billion, as of June 30, in investments including distressed debt, high-yield and convertible bonds, private equity and real estate. Marks, who graduated from the Wharton school in 1967, served on Penn’s investment committee for 13 years and established the Marks Family Writing Center in 2003 on campus.

Not ‘Superhuman’

“As I wrote last year, ‘everyone had regrettable investments in his or her portfolio -- given the climate, you’d have to be superhuman not to,’” Marks said in his final letter to trustees after 10 years as the head of Penn’s investment board. “What matters is how many, how big and how bad Endowments in general had more of these than other investors in 2007-08, and thus they experienced bigger problems.”

Robert Levy, chairman and chief investment officer at money manager Harris Associates LP in Chicago, has taken over the chairman role at Penn, Marks said yesterday in a telephone interview.

“Investors have a choice between trying to maximize and trying to build in security,” Marks said in the interview. “There isn’t a right over wrong. Everybody has to make that choice for themselves. I think the events of these recent years demonstrate that choice and action.”

Stressing Stability

Penn’s investment committee emphasized stability over maximizing returns and achieved “a respectable return and minimized disappointment and difficulty in bad times,” Marks said.

In the past decade, the endowment added holdings of non- U.S. equities and hedge funds, lessened its preference for value stocks over growth companies, diversified its mix of investment managers and added venture capital and buyout firms, albeit to a smaller extent than its peers, Marks wrote. In 2004, the school appointed Kristin Gilbertson as CIO, growing its internal endowment management capabilities, he wrote.

The Ivy League schools are private institutions in the northeastern U.S. None has recouped the record losses incurred in the year ended in June 2009. As investments tumbled, universities cut jobs, froze salaries and postponed building projects.

Penn dodged the hundreds of layoffs, construction delays, discounted sales of illiquid investments and debt issuance of several of its peer institutions because the university was less dependent on its fund, getting 10 percent of its budget from endowment earnings, Marks said. In comparison, Harvard and Yale get more than one-third of their budgets from endowment income.

“Never forget the 6-foot-tall man who drowned crossing the stream that was 5 feet deep on average,” Marks said. “Prudent financial management doesn’t get you through ‘on average’ -- rather, it enables you to survive the low points."