Boston Inc.
INVESTING
Seed Money
Hancock, others get farm aid.
By Stephanie Scott
It might be tough to picture the suits inside the Hancock Tower toting rakes out to the fields to tend their corn, but over the last five years, the Boston-based life insurance giant has collected $125,975 in farm subsidies from federal taxpayers. And it's hardly the only urban “farmer” around here.
Debates over who should get farm subsidies have been sprouting up around the country since the passage of the $190 billion farm bill, signed by President George W. Bush to support, he said, “the people who work the land.” Yet from 1996 to 2001, $842,507 in aid from the Department of Agriculture meant for rural ranchers went to 53 “farmers” in Boston or its wealthy suburbs.
William F. Yates Jr. of Beacon Hill, who says he owned two farms in Missouri, got $162,079 in subsidy checks. He says he's since sold the land because the “return on investment was so poor.” Mary E. Gewacke of the Fenway got $8,144 for land she owned in Nebraska, which she sold last year. “I used it for my personal use,” Gewacke says. Craig Lapier of Weston got $64,437 in subsidies last year. “They're putting a road through my farm now,” he says of his Clinton County, New York, property. “I used the money to pay the taxes.”
As for Hancock, its farming checks go to its agricultural investment group, which manages $440 million of farm real estate for investors. Hancock oversees 115,000 acres of farmland, all for investment purposes, from California to the Southeast.
Though the money Boston farmers received is a fraction of the $49 million collected by those in Houston, Texas, for example, Hub harvesters did double the $472,687 collected by another well-known farming community: Beverly Hills.
RETAIL
Raising the Flag
The cost of patriotism goes up.
Forget patriotism. Why not celebrate capitalism this Fourth of July? With flag-waving expected to be more popular than ever on the first Independence Day since September 11, some local flag makers have raised their prices on the Stars and Stripes.
Deb Healy, owner of America's Flag Company in Rockland, blames manufacturers. “If the manufacturer charges me extra for a flag, I up the price for that flag,” she says.
Tony Lafuente, owner of Flagraphics in Somerville, says flag making is costing more as orders have skyrocketed. The typical retail price of a 3-by-5-foot nylon American flag has gone from $28.50 to $31 since September 11, an 8 percent increase.
Some suppliers chose not to increase prices, including Heritage Flag Company in Boston, which gave its profits last fall to the Red Cross. “We're providing a service,” says owner Amy MacDonald. “We aren't interested in making money off others' grief.”
As for whether flag sellers expect a rush this summer, most say that's unlikely. “People still have the flags they bought in September,” Lafuente says. – Sarah Ceglarski
REAL ESTATE
Taking a Bath
Bargain mansion hits the market.
The owner of a newly renovated $10 million modern mansion in the exclusive Prides Crossing neighborhood of Beverly has put it up for sale for less than it cost to build, calling all the limestone, glass, and mahogany “too edgy” for her tastes.
The nouveau-style Netherfield has been put on the market for $7.9 million by its owner, Cynthia Croatti, executive vice president of the publicly traded UniFirst uniform company, which was started by her father in 1936. Croatti moved into the 12,000-square-foot waterfront home when it was finished just last April, but now she plans to move back to the cozier stone carriage house on the property where she lived while Netherfield was being built. “The carriage house has a warmer feel,” Croatti says.
Architect Thad Siernasko created the manor in the style of the grand houses of Prides Crossing's heyday at the dawn of the 20th century, with decidedly modern touches. “I gave the designer free reign to create the house,” Croatti says. “My son said it feels more like a hotel than a home. It's all mahogany, a lot of contemporary stuff that I'm not totally in love with.”
The freestanding tub in the master bathroom, for example, is set on a white marble floor and encircled by plate glass windows overlooking fruit trees and lilacs, and offering a spectacular view of the Atlantic Ocean. – Michelle Bates Deakin
SPOONER ON FINANCE
Taking Stock
Learning from the bad times about how to survive the good.
By John D. Spooner
We like to think that Boston is the Hub of the Universe and that our politics, our culture, and our sports are the most exciting in America. Truth is, there are many lands out there in our country where people make, spend, and invest their money differently.
At a meeting of financial managers in California recently, I talked with people from Atlanta, Dallas, Chicago, Cleveland, Cincinnati, and San Diego, a pretty broad cross section. In all cases, business seemed to be “getting back to normal.” I heard that phrase a lot, and not just from people in the corporate world, but also from cabbies and waiters and bellhops. “Any signs of life?” I asked everyone. Universally, they felt the worst was over. (Not one conversation did I have or overhear – I eavesdrop everywhere – about fears of new terrorist attacks. Perhaps we don't voice our deepest fears.)
The same seems true in Boston. Market performance reminds me more of the unhappy 1970s than any era since, but there seems to be a disconnect between the stock market and what consumers are doing. The malls are crowded, the ballpark full, restaurants hopping, and house prices still escalating. Americans are optimists by nature, and we forget pain quickly because of it.
Of course, it's too late to be negative. All the bad news you're seeing about Enron, Andersen, Tyco, and Wall Street analysts is typical of low points in the market. We are regurgitating the greed and hysteria of the 1990s, purging the system of the bubble mentality. But this process is ultimately good. It restores a balance of sanity. And it teaches lessons, particularly to younger generations that perhaps don't know near what they should about history. Good times are always followed by bad, and then followed eventually by good times again. We must learn to benefit from our mistakes.
Everyone I talked with from around the country had favorite stocks they were buying. In Atlanta, it was Scientific-Atlanta, maker of cable-TV boxes; in Arizona, it was Callaway; in Los Angeles, it was Ford (a contrarian pick). In Chicago, Bank One was the choice; in Cincinnati, Merck. Make no mistake about it, in my opinion, the next three to five years will be all about stock picking, not buying the averages or index funds.
I often write about how fads in the marketplace last about two years. Several years ago, I wrote that the Standard & Poor's S&P 500 Index had become a fad itself. Everyone was saying then, “How am I doing in relation to the S&P 500?” No one is saying that anymore. Nor are they saying, as they did, “My neighbor's getting rich on Internet stocks.” Now it's all over for the neighbor. So what's the next fad going to be? One, I think, will be plain vanilla dividend-paying companies, companies like DuPont, Chevron, Unocal, Fleet. And if they can be takeover candidates as well as dividend-paying companies, so much the better.
Pick out five companies and slowly begin buying or adding to them. Take a time frame of several years and buy only companies with a strong enough financial condition to survive tough times. Debt can be a killer, both at the corporate level and personally, so buy companies that can pay their bills. And when you travel this summer, look at things in new ways. How are Americans spending their money, and on what? Maybe you'll spot the next new thing.
REAL ESTATE
Bought and Sold
Economics lesson.
Who said teaching doesn't pay? MIT professor and special projects director Michael Hawley has purchased an East Cambridge condo for $1.25 million. And Harvard's David Laibson, an associate professor of political economy, and MIT's Nina Zipser, a math professor, have bought a $1.75 million four-bedroom condo.
A $4.1 million Colonial on Cliff Road in Weston is the new home of Marian and Michael Cronin. He's managing partner of the venture capital firm Weston Presidio Capital, which has invested in companies including the Coffee Connection and the Boston Herald.
Vacation home prices are going stratospheric. John L. McGoldrick, executive vice president and general counsel of Bristol-Myers Squibb, paid $2.7 million with wife Ann for a contemporary in Wellfleet. And Steven P. Galante, chairman of Asset Alternatives, a Wellesley venture capital newsletter firm, shelled out $3.4 million for a Cape in Chilmark.