Phew

Yes, the Tsunamai has me looking at Merrimack and Plum Island sound a little more warily, but I love living near the ocean right now.

Karp's Midas Touch

I came upon this ditty. New England Development scored BIG in a venture capital investment in online retail site, Retail Convergence.

By Scott Austin


Venture capital investors in Retail Convergence Inc. already scored once when they sold this owner of private-sales site Rue La La to GSI Commerce Inc. in 2009. Now about 16 months later, those same investors may be in the money again.

EBay Inc. said today it's acquiring e-commerce services conglomerate GSI for $2.4 billion, or $29.25 a share, representing a 51% premium to Friday's closing price.

That price also represents a 44% premium to GSI's $20.38 stock price on Nov. 17, 2009, when it closed the acquisition of Retail Convergence for $92 million in cash, $94 million in stock and up to $170 million in earn-outs.

Retail Convergence, which operates Rue La La, an invite-only private sale site that specializes in high-end fashion, previously raised $25 million in a single funding round in April 2008 from Breakaway Ventures, General Catalyst Partners, Mugar Enterprises and New England Development.

At the time, General Catalyst Managing Director David Fialkow told VentureWire his firm didn't view the transaction as an exit, and that the firm planned to hold on to the GSI stock. "A significant portion of our success will come in the success of the combined company," Fialkow said.

Assuming these investors held on to that stock, the 4.6 million shares are now worth about $134 million, which adds to the $92 million in cash distributed earlier for a total of $227 million.

Then there's the complicated $170 million milestone component which consists of three payments based upon the company reaching certain adjusted Ebitda numbers for each of the fiscal years 2010 through 2012 ending Jan. 2. It's not clear whether GSI made any payments for the already ended fiscal 2010 and 2011 years, nor what will happen now that eBay will divest 70% of Rue La La and another GSI property, ShopRunner, to a newly formed holding company.

We're waiting to hear back from Retail Convergence's original investors for more clarity. No matter, the deal highlights how venture capitalists can still make out in a big way well after the dust has settled on the original deal.

 Bottomline, the ownership stake for which NED and others paid $25 million returned nearly 10 times that amount.

Woodman Farm Thoughts

Please hop over to the P. Preservationist site for some good thoughts on Woodman Farm. Worth the read.

Forget Nantucket North

We're officially earning the designation as South Portsmouth.

Not that there's anything wrong with that. Portsmouth is a fine burg, but I do sometimes wonder if businesses with Newburyport and Portsmouth locations like Ganesh, Agave and one or two other I can't recall feed off each other or on each other. Newburyport and Portsmouth must be far enough apart - and distinct enough in offerings - to make the combination work.

The newest experiment appears to be Macro Polo Too, which is moving into the former Newburport Card & Gift spot. The windows are papered up, but there's definitely work going on inside. (In fact, I think they cut holes in the paper to let you watch what's going to unfold.

I never heard of the business but a quick Google search came up with this shop in Portsmouth. I'll reserve judgment (and ask you to keep unkind comments to yourself) until I actually see the place, but I'm fairly sure my demand for novelties won't be as high as my demand for wrapping paper or greeting cards.

But maybe the kids will like it. And at least the storefront is full.

Charter Changes

Epic blogger fail for not posting a note about last night's Charter Review Commission hearing or attending said meeting. But I read in the News this morning that my one concern was expressed.

If we're going to switch to a four-year mayoral term we need some sort of recall mechanism.

The proposed Charter, as it stands, swings the pendulum too far in the other direction. I do think a good mayor can me more productive if they're allowed to serve four-year terms rather than two, and I agree with that portion of the charter proposal.

That said, I also think a bad mayor can be more destructive if they're allowed to serve four years instead of two.

Some sort of recall mechanism needs to be in place if we're going to ask people to relinquish their right to vote. Establish a high enough bar so recalls won't be pursued recklessly, but we need to protect the city from our own potential mistakes.

I'd be inclined to vote no if a change isn't included.

Parking in Portland

We hit Portland today. Took the kids to the Children's Museum. After dropping the family off in front of the museum I had two choices, pay $6 to park in a garage or cruise the street for free parking.

I cruised. Only once around the block, but I hit pay dirt.

This is my only concern about the city's parking plan which calls for free on-street parking.  Increased cruising.

We shall see.

We love you too.

Reunification Now!

Today’s news of Newbury’s dire financial situation suggests one thing and one thing only: It’s time talk about REAL regionalization.

No, I’m not talking about combining our departments with theirs. The time has come to go 10 steps beyond that.

Let’s get these two crazy Newburys back together.

Seriously, who are we kidding. We can hardly tell where one border begins and one ends anyway, and the stationery expenses wouldn’t be that excessive. Hell, they can keep calling themselves Newbury or they can just stick with their preferred tags of Old Town, Byfield and, of course, Plum Island.

And while consolidating two entities with financial struggles doesn't always make sense in the business world (financial folks call it leaning two drunk sailors against each other) I see too many perks not to move forward.

• We’d have ample space for a dog park and ample supply of dogs. (Why some entrepreneurial Newburyity hasn’t opened a fee-supported dog park is beyond me.)
• Open water front types would have ALL THE OPEN WATERFRONT they could stand along Plum Island sound. Hell, they can make salt marsh grass angels along the river all summer long.
• With the OWT’s satisfied we could install a mixed use/park project on the NRA lots, generating more tax dollars for the new city and letting a city be a city.
• We’d get a nice relatively new school at Newbury elementary.
• We could more easily develop the Little River Project since land and water source would reside in the same community.
• Newburyites could boast about having a Panera in their town.
• I finally don’t have to drive one town over to get my produce and meat at Tendercrop.
• We’d have a large enough community to warrant 11 city councilors. And we'd deepen the pool of potential mayoral candidates seeking a four-year term.

Am I missing any?

The only complication I see is having the new Newburyport host the Triton Regional School.

I see three solutions:

First, we lease the school space to Salisbury and Rowley.

Second, we hand Triton and Byfield to Georgetown since they’re having school building problems.

Third, we just cut our losses and sell Byfield to a Private Equity Group or a Casino gaming company.

Together, we can make this happen.


ADD:  It occurs to me that some might know the history of our two towns. Here's the Wikipedia version.

Things are going to start happening to me now.

The Charter Review Commission Report is here! The Charter Review Commission Report is here!




Seriously folks, buy tomorrow's paper. Read the report.

(Or look in the city's web site if you can't spare the 75 cents.)

Sad News from Liberty Street

Kudos to the Daily News for reporting on their own financial difficulties and job cuts. No word on how this will impact local coverage, but those things became apparent in time to those who pay attention.

As I've stated many times, I'm a huge fan of the Daily News. It has its problems and falls short at times, but we all have our bad days. Their bad days are just published 12,000 times over each day.

I can't overstate how important local coverage is to our city and region. I get two papers dropped on my door step each morning, the Daily News and the Wall Street Journal. Guess which one I read first.

I just wish more people did the same. I also hope the Daily News finds a new model that works.

ADD: The Herald's take.

Mayoral Terms and Unions

Wisconsin's fight over public employee union's collective bargaining got me thinking about Newburyport.

Yeah, I've got a problem.

(Unrelated note: the Daily News talked to locals about the battle today.)

I'll preface my comments by stating I've belonged to two unions in my life time. Led one at the Daily News back in The Day, although it was largely a feeble and toothless union. Young reporters care too much about their careers and the communities they cover to threaten things like strikes or even adhering to 40-hour work weeks.

So I'm generally pro-union, especially in the private sector. But public employee unions are a slightly different matter as they and their membership have a direct influence over who sits on the other side of the bargaining table. As a member of the CWA union representing reporters in Newburyport, Peabody and Salem, I had no say how Essex County Newspapers ran its business. As a public employee I can influence elections either with votes, campaigning or cash, even at a local level.

Those are the rules. I accept them, and I'm largely a union guy. But here's where my wondering takes me.

The Charter Review Comission - which is reviewing the structure of city government - is proposing the city's mayor serve a four-year term rather than just two. (See recent Daily News article here.) This idea along with many others will go before voters in the fall, and I've heard solid arguments from commission members as to why the move is wise or unnecessary.

Here's an issue I haven't heard discussed. Would a mayor with a four-year term have more or less clout when negotiating with public employees? My gut says more as he or she wouldn't need to worry about re-election the year after or the year of a particularly tough negotiating season. A year or two could pass to let passions die down and opposition wane, particularly if the deal proved to be good for the city.

Conversely, opponents to the change might suggest the mayor could hand out sweet heart deals in years one or two of a term with the hope that voters who were upset with the deals will forget or forgive the perceived transgression.

I tend to think a four-year term might give the city a stronger hand to play at the table. Perhaps I'm overstating the influence of public employees. I'd be interested in hearing other people's positions.