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Anaren to go private with $381 million sale to Veritas
DeWITT — Anaren, Inc. (NASDAQ: ANEN) will become a private company with its planned sale to a New York City private-equity firm, and Anaren leaders say that will offer the technology firm some competitive advantages. Veritas Capital, an affiliate of Veritas Capital Fund IV, L.P., is acquiring DeWitt–based Anaren in a cash transaction worth about […]
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DeWITT — Anaren, Inc. (NASDAQ: ANEN) will become a private company with its planned sale to a New York City private-equity firm, and Anaren leaders say that will offer the technology firm some competitive advantages.
Veritas Capital, an affiliate of Veritas Capital Fund IV, L.P., is acquiring DeWitt–based Anaren in a cash transaction worth about $381 million, or $28 a share.
Anaren on Nov. 4 announced the signing of the merger agreement and expects the acquisition to close during the first quarter of 2014.
The agreement with Veritas Capital comes more than five months after an investor had made another purchase offer for Anaren, which develops and manufactures components and subsystems for markets including satellite communications, defense, and wireless communications.
Anaren on May 17 rejected that offer from Vintage Capital Management, LLC, an investor that owns over one-eighth of Anaren’s shares.
The Veritas purchase price reflects a premium of about 12 percent over Anaren’s closing stock price of $24.91 on Nov. 1, the last day of trading prior to this announcement, Anaren said in a news release.
The purchase figure is also nearly 43 percent higher than Anaren’s closing share price of $19.61 on April 15. That same day, Vintage Capital Management made an offer of $23 per share following the close of trading.
The Veritas purchase offer represents a nearly 22 percent premium over the $23 per share offer from Vintage Capital, according to Anaren.
The independent committee of Anaren’s board of directors unanimously recommended, and the board unanimously approved, the merger agreement with Veritas, the company said.
Anaren will continue operating as an independent entity with headquarters in DeWitt. The firm has no plans to make changes to its staffing levels as a result of this announcement, the company said.
Veritas Capital is “pleased” to be associated with Anaren, which has a “long” history of providing “market-leading” technology and products to the defense, wireless communications, medical, and industrial markets, Hugh Evans, partner of Veritas Capital, said in the news release.
“We are excited to support Larry Sala and his talented team in continuing to provide customers with cost effective and advanced solutions, and in accelerating the growth of the company’s innovative technologies in current and adjacent markets,” said Evans.
Veritas Capital is an “excellent” partner for Anaren, Larry Sala, Anaren’s chairman, president, and CEO, said in the release.
Sala cited what he called Veritas Capital’s “extensive” technology and industry experience and “strong” record of accomplishment in fostering growth in its portfolio companies.
Going private
In an external memo, Anaren listed some of the reasons why it believes becoming a private company will benefit the business. The firm will no longer have to adhere to the reporting obligations of a public company, including proxies and annual reports.
In addition, Anaren will no longer be “competitively disadvantaged” because of the amount of information the firm was required to disclose as a public company. The firm also believes it will be able to communicate “more openly” with its employees regarding financial goals, the memo said.
The transaction is subject to Anaren shareholder approval and to the customary regulatory and other closing conditions, the company said.
The transaction is not subject to any financing conditions, Anaren added.
The Syracuse law firm of Bond Schoeneck & King, PLLC, along with Minneapolis, Minn.–based Dorsey & Whitney LLP; New York City–based Moelis & Company LLC; and Los Angeles, Calif.–based Houlihan Lokey Capital, Inc. served as financial and legal advisors to Anaren and its independent committee, the company said.
Veritas Capital’s legal advisor is New York City–based Skadden, Arps, Slate, Meagher & Flom LLP, according to Anaren.
The Skadden team included Kenneth Wolff, a mergers and acquisitions partner, and his associate, June Dipchand; it also included banking counsel David Almroth, executive compensation and benefits partner Erica Schohn, and tax attorney Jessica Hough, the firm said in an email to The Central New York Business Journal.
Anaren designs, develops, manufactures, and sells microwave components, assemblies, and subsystems for the wireless communications, satellite communications, and defense-electronics markets.
Anaren employs about 800 people.
Founded in 1992, Veritas Capital is a private-equity investment firm that invests in companies that provide products and services to government and commercial customers worldwide.
Since 1992, Veritas has been involved as the lead investor in more than 65 transactions totaling about $16 billion in value, according to Anaren.
Contact Reinhardt at ereinhardt@cnybj.com
Carrols Restaurant Group trims loss in Q3
SYRACUSE — Carrols Restaurant Group, Inc. (NASDAQ: TAST), a Syracuse–based Burger King franchisee, on Nov. 5 announced a net loss of $2.8 million, or 12 cents per share, during the third quarter that ended Sept. 30. The figure compares to a net loss from continuing operations of $6.3 million, or 28 cents a share, in
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SYRACUSE — Carrols Restaurant Group, Inc. (NASDAQ: TAST), a Syracuse–based Burger King franchisee, on Nov. 5 announced a net loss of $2.8 million, or 12 cents per share, during the third quarter that ended Sept. 30.
The figure compares to a net loss from continuing operations of $6.3 million, or 28 cents a share, in the prior-year period, the company said in its earnings release.
The current net-loss figure included a charge of $1.1 million, or 3 cents per share after taxes, related to impairment charges, Carrols said.
The net loss from continuing operations in the prior-year period included integration costs related to the acquisition and costs related to the EEOC litigation the firm settled in early 2013, which were about $5.3 million in total, or 14 cents per share after tax, according to the company.
Carrols Restaurant Group generated sales of more than $168 million in the third quarter, down slightly from more than $169 million during the same period in 2012.
The company attributes the 0.7 percent sales decline in the third quarter to eight fewer restaurants generating revenue.
Comparable restaurant sales increased 0.4 percent in the third quarter compared to a year ago. Carrols had posted a 6.2 percent increase in comparable-restaurant sales in the same period in 2012. Despite the slower sales growth, it marked nine consecutive quarters of positive comparable-restaurant sales growth, the firm said.
Comparable-restaurant sales increased 0.6 percent at legacy restaurants and edged up 0.2 percent at the restaurants acquired in May 2012, according to Carrols.
Carrols’ increased restaurant-level profitability and higher operating margins demonstrate the firm’s “progress” over the past year in improving operating performance at the acquired restaurants while continuing to maintain “strong” margins at its legacy restaurants, Daniel Accordino, CEO of Carrols Restaurant Group, Inc. said in the news release.
Carrols has also lowered its full-year sales projection “slightly” to reflect its third-quarter results, he added.
“However, October sales trends have reaccelerated and we expect fourth quarter comparable-restaurant sales to increase 2 percent to 2.5 percent as we finish the year,” Accordino said.
Carrols shares fell 2 cents to $5.63 on Nov. 5. The company issued its earnings report before the open of trading that day.
As of Sept. 29, Carrols owned and operated 564 Burger King locations. It is the largest Burger King franchisee in the nation.
Contact Reinhardt at ereinhardt@cnybj.com
Pathfinder Bancorp Q3 profit declines on higher labor costs
OSWEGO — Pathfinder Bancorp, Inc. (NASDAQ: PBHC), parent of Pathfinder Bank, reported that its profit slipped 21 percent in the third quarter, led by increased labor costs. Pathfinder announced on Nov. 1 that net income declined to $528,000 in the third quarter from $670,000 in the year-ago period. The profit decrease “was principally due to the $300,000
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OSWEGO — Pathfinder Bancorp, Inc. (NASDAQ: PBHC), parent of Pathfinder Bank, reported that its profit slipped 21 percent in the third quarter, led by increased labor costs.
Pathfinder announced on Nov. 1 that net income declined to $528,000 in the third quarter from $670,000 in the year-ago period. The profit decrease “was principally due to the $300,000 increase in personnel expenses driven, in part, by increased health insurance expenses,” Pathfinder said in the earnings report.
Earnings per share fell to 20 cents a share in the third quarter from 22 cents a year earlier.
Pathfinder’s net interest income increased to $3.9 million in the latest quarter from $3.7 million in the third quarter of 2012. The bank’s average balance of earning assets — particularly commercial real estate and commercial loans — rose, partially offset by a dip in its net interest margin to 3.45 percent from 3.46 percent a year ago.
Noninterest income for the third quarter rose to $704,000 from $661,000 for the comparable prior-year period on increased service charges on deposit accounts and net gains on the sales of loans and foreclosed real estate.
Those income gains were offset by Pathfinder’s noninterest expense rising to $3.7 million in the third quarter from $3.2 million in the year-ago period. Staffing expenses increased, driven by wage increases and benefit costs, including costs under Pathfinder’s self-insured health-insurance program, according to the earnings report. The banking company said it also faced higher miscellaneous other expenses comprised of a write-down on a repossessed asset, fraud losses, office supplies, and travel and training.
Pathfinder had total loans of $338.1 million as of Sept. 30, 2013, up 1.3 percent from $333.7 million as of Dec. 31, 2012.
“Year over year earnings have been relatively flat as reductions in net interest margin and higher operating expenses offset the benefits of organic loan and deposit growth,” Thomas W. Schneider, president and CEO of Oswego–based Pathfinder, said in the earnings report. “We have a healthy loan pipeline and look forward to the benefits of our continued growth and expansion into the Greater Syracuse market. However, we remain highly cognizant of the risks inherent in an environment of uncertain monetary and fiscal policy.”
Pathfinder now expects to open a 2,600-square-foot loan office in the Pike Block development in downtown Syracuse next March, Schneider says in an interview. The bank has executed a lease agreement for the space with developer VIP Development Associates, Inc., and a completed design is being converted into drawings.
Pathfinder had previously hoped to open the Syracuse office this fall in the 130,000-square-foot mixed-use retail and residential development that encompasses four restored historic buildings. But construction on the Pathfinder space has not yet begun and city approvals still need to be obtained, Schneider says.
Pathfinder’s leader says the bank — which has had a retail branch in Cicero since 2011 and started making loans into the market well before that — is generating some of its best growth in the Onondaga County market. And, he’s confident that will be boosted further by the opening of the downtown Syracuse office.
“There is growth [in the greater Syracuse area.] It’s really driven by the colleges and the hospitals,” Schneider says. “It’s not a sharp upward trend, but I think it’s a nice, gentle, sustainable, positive slope.”
Pathfinder’s planned Pike Block branch office will primarily focus on making small business, commercial real estate, commercial term, and industrial loans, and accepting commercial deposits. The bank may also eventually turn it into a full-scale retail branch office, accepting consumer deposits.
More earnings stats
Pathfinder produced a return on average assets of 0.43 percent for the three-month period ending Sept. 30, 2013 compared to 0.57 percent in the same quarter in 2012.
The bank’s return on average equity was 5.25 percent for the quarter ending Sept. 30, down from 6.59 percent in the year-prior period.
Pathfinder recorded a provision for loan losses of $216,000 for the third quarter, compared to $275,000 in the year-earlier quarter as loan losses fell.
The banking company’s total assets increased to $492.5 million as of Sept. 30 from $477.8 million last Dec. 31. This increase of $14.7 million was largely centered in investment securities and, to a lesser extent, gross loans, Pathfinder said.
The rise in total assets was largely funded by increases in municipal, retail, and business deposits in support of the banking company’s organic growth objectives, it said. Total deposits as of Sept. 30, 2013 were $401.3 million, up from $391.8 million as of Dec. 31, 2012.
Pathfinder’s stock price closed at $13.50 on Nov. 4, which is up 31 percent year to date. Pathfinder shares are thinly traded, with an average of just over 1,000 shares trading hands daily during the last three months, according to Yahoo Finance data. On many trading days, either no shares or just 100 shares trade, the data shows.
Pathfinder Bank is a New York state chartered savings bank that has eight branches — seven in Oswego County and one in Onondaga County.
Contact Rombel at arombel@cnybj.com
The Vision Center builds new location
HORSEHEADS — By next spring, The Vision Center will move to a new location that will give the growing eye-care practice more room and allow it to serve its patients better. “We’re just growing and expanding and running out of space,” says practice owner Dr. John Plow. The Vision Center has operated from 2,400 square
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HORSEHEADS — By next spring, The Vision Center will move to a new location that will give the growing eye-care practice more room and allow it to serve its patients better.
“We’re just growing and expanding and running out of space,” says practice owner Dr. John Plow.
The Vision Center has operated from 2,400 square feet of space at 3345 Chambers Road in the town of Big Flats, near Horseheads, since 2005. But it has run out of room as the practice size has tripled in the past six years, Plows says. He declined to provide specific patient numbers, but says the current location suffers from a shortage of exam rooms and even a lack of waiting-room space.
“We’ll have more space to do more things,” he says of the move to nearly 4,400 square feet of space currently under construction at 298 Colonial Drive, just around the corner from the existing office.
Plow purchased 2.3 acres and is building on half of the property. He hopes to lease the other half of the parcel out to others and is even willing to build to suit on the site if necessary. The eye-care building is a design-build project by Picarazzi Construction, Inc., located in Horseheads. Between purchasing the land and constructing the building, Plow is spending about $1 million. He declined to discuss the financing details of the project.
Along with being energy efficient, the new building will contain two exam rooms each for Plow and the other doctor on staff, Michael O’Connor. The new building will also have a large waiting area, as well as ample space for the necessary pre-exam testing.
The construction project broke ground in August, and Plow expects to move into the new building by March 1. He anticipates once the practice is in the new space, he’ll need to hire two new employees — a frame stylist and an optometric assistant. Currently, Plow employs 10 people.
“We want to be the premier eye-care center in the area,” he says of his growing practice, which draws patients from as far away as Bath and Mansfield, Pa.
Plow says with the new building, he’ll have space to continue building the practice, with an eye toward someday expanding to additional locations in areas where he has larger numbers of patients.
The practice opened in 2005 as a National Vision, Inc. chain location. Plow, who holds a doctorate in optometry from the State University of New York College of Optometry in Manhattan, purchased the practice in 2007 and renamed it The Vision Center. Plow is a member of the American Optometric Association, the New York State Optometric Association, and is current president of the Southern Tier Optometric Association, according to the practice’s website, www.thevisioncenterny.com.
Contact The Business Journal at news@cnybj.com
National Electrical Systems moves to new Rome office
ROME — National Electrical Systems, Inc. (NESI) started and has a long history in Boonville, but the company also has some roots in Rome. That’s part of what made Rome the perfect choice as the site of the company’s new headquarters. On Aug. 28, NESI moved from its 4,800-square-foot former headquarters facility on Route 12
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ROME — National Electrical Systems, Inc. (NESI) started and has a long history in Boonville, but the company also has some roots in Rome. That’s part of what made Rome the perfect choice as the site of the company’s new headquarters.
On Aug. 28, NESI moved from its 4,800-square-foot former headquarters facility on Route 12 in Boonville to 7,200 square feet of space at 1501 E. Dominick St. in Rome, where the company leased and renovated the former O.J. Gulla Pools & Spas, Inc. building from property owner David Gulla. Lease arrangements were not disclosed.
“It gives us room to expand and grow,” NESI President and CEO Edward Stratton says. The old building, he explains, just didn’t have enough room to accommodate all its growth over the years and didn’t have a layout that was conducive to expanding. Neighboring business Lee Buick/GMC purchased the Boonville building for an undisclosed sum, Stratton adds.
NESI got its start in Boonville in 1973 when Stratton’s father opened Allen Electrical Supply. The business expanded over the years and began marketing to the farm industry, incorporating as Dairymens Industrial Supply Co. in the early 1980s. In 2006, the company opened a Rome retail branch under the Disco Electrical Supply moniker.
Stratton says the company started seeking federal contract work around 1989, bidding on, and winning, electrical supply projects. That division of the business, based at the Boonville headquarters, continued to grow, and the company incorporated as National Electrical Systems, Inc. in 1990 to reflect better the federal-contracting business it had become, he says. In 2004, the company sold its Disco location, which eventually closed, to the employees. The financial arrangements were not disclosed.
“We do turnkey projects as prime contractors for different levels of government,” Stratton says. Currently, NESI is working on a project in Texas for the Federal Bureau of Prisons to upgrade the electrical grid at the federal prison in Seagoville.
NESI works with numerous federal agencies, including the U.S. Army Corps of Engineers, NASA, the Department of Defense and all branches of the military, the Department of the Interior, the Bureau of Indian Affairs, and the Department of Veterans Affairs. Projects include generators, transformers, substations, switch gear, SF6 breakers, and service contracts, while on-site services include field testing, training, inspection, repairs, equipment removal, and equipment relocation.
NESI has supplied and installed multiple emergency power systems for various states at locations including hospitals, federal prisons, and railroads for organizations including the Texas Transtar System, Virginia Rocky Gap Tunnel System, and the Georgia Bureau of Investigations. NESI has also worked on several wind-power projects.
The company performs a lot of highly technical work, Stratton states, and he hopes the move to Rome will help attract the caliber of employee the company needs to continue to grow.
“It’s difficult to hire the level of expertise we need when we’re outside a metro area,” Stratton says. The new location’s close proximity to Griffiss Business and Technology Park, home to many government entities, should also be a benefit, he adds.
The new structure features office areas for the company’s various departments, including estimating and project management, as well as a conference room and a break room for the firm’s staff. NESI has about 15 full-time employees, Stratton says, but employment figures fluctuate because some project employees are part of the company’s payroll while others are subcontractors.
NESI is already looking to expand its employment numbers as it searches for a full-time electrical estimator, Stratton says. He expects to hire more employees over time as the business continues to grow. He declined to share revenue figures, but says the company has generated continued growth over the past five years.
Stratton hopes to boost that growth by networking with large federal contractors such as Lockheed Martin and Raytheon. As that growth continues, he will consider opening additional locations around the country to better serve and support NESI project teams at job sites around the nation.
NESI (www.nesi-ny.com) is an engineering, procurement, construction, and management company that serves as a prime contractor for the federal government primarily, but also works with state, county, and local governments across the United States and around the world in locations including the Antarctic, Egypt, France, and Africa.
Contact The Business Journal at news@cnybj.com
WCNY settles into new home on Syracuse’s Near Westside
SYRACUSE — WCNY, Central New York’s public-broadcasting company, on Oct. 30 formally opened its new, 56,000-square-foot broadcast and education center at 415 W. Fayette St. in Syracuse. WCNY moved into the new facility earlier this year after having previously operated at 506 Old Liverpool Road in Salina. “It was always my feeling that we, as
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SYRACUSE — WCNY, Central New York’s public-broadcasting company, on Oct. 30 formally opened its new, 56,000-square-foot broadcast and education center at 415 W. Fayette St. in Syracuse.
WCNY moved into the new facility earlier this year after having previously operated at 506 Old Liverpool Road in Salina.
“It was always my feeling that we, as a PBS station, really belong in the middle of a neighborhood,” says Robert Daino, president and CEO of WCNY.
Its previous location on Old Liverpool Road is located on a busy, four-lane highway that made it difficult for people to “walk up” to the facility and “engage” with WCNY, he says.
Daino believes that community engagement should be part of any public-broadcasting station.
“We wanted to re-identify and reinvent ourselves, and what better place to be than an entire neighborhood [Near Westside] that had the same mission and goal,” Daino says.
WCNY was also “running out of space” in its Old Liverpool Road location, where it had operated since 1965.
The operation involves media that includes television and radio broadcasts, along with content production for print and social media. WCNY wants to continue expanding, growing, and delivering services, programs, and projects that people “demand and expect,” Daino says.
“We really needed to be in a different kind of facility than the existing facility would allow us to be,” he says.
Paula Kerger, president and CEO of Arlington, Va.–based Public Broadcasting Service (PBS), and New York Education Commissioner John King spoke at the Oct. 30 ceremonies to mark the occasion, the organization said in the news release.
Construction and payment
The project’s construction and capital costs totaled about $20 million, according to a WCNY fact sheet on the project. The organization used both private and public funding to finance the project.
The funding sources included a $4 million bridge loan from JPMorgan Chase & Co. WCNY is starting a capital campaign to pay off that loan.
It also used $6.2 million in equity from a federal new markets tax credit, which Daino emphasizes is “private-equity investment money.”
WCNY also received a $2.5 million Near West Side Initiative grant.
In addition, WCNY also used a $2 million Empire State Development (ESD) City-by-City grant and a $5 million ESD Restore NY grant to help pay for the project.
“What we tried to is leverage the use of some taxpayer investment from the state, such as the [ESD] City-by-City [grant] and the Restore New York [grant], which are economic-development dollars that are used as catalysts for projects like this,” Daino says.
WCNY is funding the remainder of the project with foundation funds, individual gifts, and pledges.
King + King Architects, LLP of Syracuse designed the building, and Hueber-Breuer Construction Co., Inc. of Syracuse served as the contractor on the project, according to WCNY.
Subcontractors included the Syracuse location of Victor, N.Y.–based O’Connell Electric Co., Inc.; Century Heating & Air Conditioning, Inc. of DeWitt; the Syracuse office of Milwaukee, Wisc.–based Johnson Controls, Inc., according to Daino.
In addition, Burns Bros Contractors of Syracuse was in charge of the plumbing work; Sposato Floor Covering Co. of Salina handled the flooring work; the Syracuse office of Morristown, N.J.–based Schindler Elevator Corp. worked on the facility’s elevators; and Sedgwick Business Interiors of Syracuse supplied the furniture for the new facility, he adds.
King + King designed the building to achieve Leadership in Energy & Environmental Design (LEED) platinum status, Daino says.
The U.S. Green Building Council is currently considering WCNY’s application for platinum status.
“We haven’t yet been approved. That’s going through that process. We feel comfortable that we will achieve that because it was designed and built with all those constraints,” Daino says.
The building’s roof includes solar panels, which are intended to help WCNY lower its energy costs. Its new rain gardens also capture 95 percent of the rain runoff, according to the WCNY fact sheet.
Two buildings make up the campus, including the refurbished 30,000-square-foot former Case Supply building, and the new 26,000-square-foot technology building that includes studios and the space leased to Centralcast, LLC that provides television content for nine PBS stations in New York and New Jersey.
The facility also includes WCNY’s 10,000-square-foot education center, which occupies the third floor. The center features education programs including Enterprise America, described as a hands-on learning program for high-school students to learn about entrepreneurship in a “simulated city,” the organization said.
About WCNY
WCNY is a private, tax-exempt, nonprofit organization and member-supported PBS affiliate.
The organization employs more than 70 people, according to the WCNY fact sheet.
Its broadcast area encompasses about one-third of upstate New York and reaches more than 1.8 million people in 19 counties, the organization said.
WCNY broadcasts five digital television channels, including WCNY, Create, World, Plus, and HowTo, the fact sheet says.
It also broadcasts three primary radio channels, including Classic FM (91.3 in Syracuse, 89.5 in the Utica–Rome area, and 90.9 in Watertown and the North Country). Its Jazz and Oldies formats are available on high-definition (HD) radio and in streaming audio, according to the WCNY website.
Contact Reinhardt at ereinhardt@cnybj.com
High Point Chiropractic Wellness moves office to Syracuse’s west side
SYRACUSE — Dr. Irum Tahir recently moved her growing chiropractic practice, called High Point Chiropractic Wellness, to Syracuse’s west side from its former location on Onondaga Hill. Tahir bought the 4,200-square-foot freestanding office building at 1732 W. Genesee St. for $238,000 from Pureenergy Property Management, LLC, according to a news release from JF Real Estate,
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SYRACUSE — Dr. Irum Tahir recently moved her growing chiropractic practice, called High Point Chiropractic Wellness, to Syracuse’s west side from its former location on Onondaga Hill.
Tahir bought the 4,200-square-foot freestanding office building at 1732 W. Genesee St. for $238,000 from Pureenergy Property Management, LLC, according to a news release from JF Real Estate, which brokered the sale.
Paul Myles of JF Real Estate represented Tahir and George Lee of Pyramid Brokerage Co. was the listing agent for the building, according to the news release.
The property, which is a converted residential structure, is currently assessed at $172,000 and has a full market value of nearly $210,000, according to the website of the Onondaga County Office of Real Property Services. Pureenergy had bought the property for $175,000 in January 2003, according to the site.
High Point Chiropractic Wellness serves Syracuse and the surrounding communities with chiropractic care for those suffering from back pain, neck pain, headaches, or muscular tightness and tension, according to its website (http://highpointsyracuse.com).
High Point was formerly located at an office on West Seneca Turnpike in the town of Onondaga.
Tahir earned her Doctor of Chiropractic degree from New York Chiropractic College. She has worked with public and private organizations in inner-city New York and rural Pakistan to improve health conditions through education, according to her bio on the website. Tahir has worked in the countries of Madagascar and India, serving as an extension faculty member of Palmer College of Chiropractic in bringing chiropractic care to thousands of individuals who are less fortunate, according to the site. In November 2011, Tahir was honored as one of the top 100 Entrepreneurs under the age of 30 in the U.S. by the Kauffmann Foundation, her bio states. She was honored at the White House and was chosen to speak on entrepreneurship.
Contact Rombel at arombel@cnybj.com
Siena survey: New Yorkers find real-estate market ‘strongly positive’
New York state consumers’ view of the real-estate market is “strongly positive” for the second straight quarter, and the expectation is that this market is “here to stay.” That’s according to Donald Levy, director of the Siena (College) Research Institute (SRI), which released its latest survey report of consumer real-estate sentiment in the Empire State
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New York state consumers’ view of the real-estate market is “strongly positive” for the second straight quarter, and the expectation is that this market is “here to stay.”
That’s according to Donald Levy, director of the Siena (College) Research Institute (SRI), which released its latest survey report of consumer real-estate sentiment in the Empire State on Oct. 23.
SRI’s numbers indicate that real estate is squarely in the “thriving zone” in which consumers see steady growth in real-estate values and both buyers and sellers are coming out ahead today and tomorrow, Levy says.
Property values have rebounded, so it’s a good time to buy, and the anticipation among consumer is that buying a home a smart investment, he adds.
“It’s a fair transaction, sellers are getting a fair price, buyers are paying a fair price, so that’s what we’re describing as a thriving zone,” Levy says.
Any advantage that buyers previously held over sellers is now gone, he says. The survey indicates New Yorkers see the statewide real-estate market as a “win-win,” Levy says.
The overall current real-estate sentiment score among New Yorkers in the third quarter of 2013 is 17.7, up 4.2 points from last quarter, according to the SRI data.
The figure is also above the point where equal percentages of citizens feel optimistic and pessimistic about the housing market.
Survey respondents are beginning to say that property values and the overall state of the real-estate market have improved from where they were, Levy says.
“They sense that it’s [the market] strong, and their projection for the future is that it will continue to strengthen,” he says.
Looking forward, the overall future real-estate sentiment score is 24.8, down from 29.6 last quarter, SRI said.
The sentiment figure also indicates New Yorkers expect the overall real-estate market and the value of property to increase over the next year.
Consumers also see the present as an improved time to sell with a score above breakeven at 12.2, up 5 points from last quarter, according to SRI.
At the same time, they also see it as a very good time to buy with a positive score of 12.5, the survey found.
The overall current real-estate sentiment score among upstate New Yorkers in the third quarter is 19.4, up 1.1 points from last quarter. The overall future real-estate sentiment score is 16.9, down 9.2 points from the second quarter.
The future projection is down a little bit from where it was a quarter ago, but it still positive, Levy notes. The figure indicates a “leveling out,” he says.
The research for the sentiment survey has always aimed to find a situation in which sellers are no longer are sitting at a disadvantaged position relative to buyers.
“It is encouraging that people are saying, whether it’s upstate or statewide, that selling conditions have improved, and anticipate that they’re going to be better in the future, but the rate of improvement for sellers is modulating,” Levy says.
Levy acknowledges the positive feeling about the New York real-estate market remains “subject to conditions.” For example, a boost in interest rates could negatively affect the current sentiment. And, any decisions from the federal government that affect the economy or the ongoing recovery could also have a negative impact, he adds.
In the survey calculations, a sentiment score of zero (0) in any category reflects a breakeven point at which the survey measured equal levels of optimism and pessimism among the population relative to the overall market, or buying or selling real estate, according to SRI.
Scores can range from an absolute low of -100 to a high of 100, but scores below -50 or above +50 are both rare and extreme, SRI said.
SRI conducted the survey of consumer real-estate sentiment throughout July, August, and September by random telephone calls to 2,175 New York state residents age 18 or older. As the sentiment scores are developed through a series of calculations, “margin of error” does not apply, SRI says.
Contact Reinhardt at ereinhardt@cnybj.com
Officials break ground on the Finger Lakes Viticulture Center in Geneva
GENEVA, N.Y. — Construction of the Finger Lakes Viticulture Center is set to begin soon on the campus of the Cornell Agriculture and Food Technology Park (also called The Technology Farm) in Geneva, adjacent to the New York State Agricultural Experiment Station. On Oct. 24, about 150 guests gathered at the Technology Farm to break ground
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GENEVA, N.Y. — Construction of the Finger Lakes Viticulture Center is set to begin soon on the campus of the Cornell Agriculture and Food Technology Park (also called The Technology Farm) in Geneva, adjacent to the New York State Agricultural Experiment Station.
On Oct. 24, about 150 guests gathered at the Technology Farm to break ground on the new Viticulture Center, which will house Finger Lakes Community College’s (FLCC) viticulture and enology program, the only program of its kind in the Northeast, according to a news release on the Technology Farm’s website.
New York State Senator Michael Nozzolio (R–Fayette), State Assembly Minority Leader Brian Kolb (R–Canandaigua), and Regional Director of Empire State Development, Vinnie Esposito, joined Dr. Tom Burr, director of the New York State Agricultural Experiment Station, and Dr. Barbara Risser, president of FLCC for the event, according to the release.
Nozzolio, working with Kolb, helped secure the $3.25 million state investment for the construction of the Finger Lakes Viticulture Center.
“As the art of winemaking continues to gain in popularity, we are witnessing an unprecedented growth in the number of wineries here in the Finger Lakes region and the construction of the Viticulture Center will support the continued growth of this important, job-producing industry. The new Viticulture Center will enable our state’s future winemakers to study at the same site where some of the most innovative agricultural research in the nation is taking place every day,” Nozzolio said in a joint news release with Kolb.
Viticulture is the science, production, and study of grapes.
Currently housed in the Flex Tech building, FLCC’s viticulture and enology academic program has grown so quickly that it is” bursting at the seams” and welcomes a larger space, the Technology Farm release stated.
FLCC believes the center will create jobs and economic opportunities in a “variety” of fields related to tourism and the wine and grape industry.
The venue will include a winemaking lab, a grape-crushing pad, rooms for storing and aging wine, classroom space, and a teaching vineyard.
The groundbreaking is a “culmination” of hard work, vision, and a commitment to investing in an emerging industry here in this area, Kolb said in Nozzolio’s news release.
“The Finger Lakes region has distinguished itself as a world-class area for its wineries, tourism and agriculture, and the new Viticulture Center will expand on that progress. This is an investment in our community, in job-creation, in education and in the future of our area,” said Kolb.
Additionally, Nozzolio and Kolb secured a $4.7 million state grant, for the reconstruction of new greenhouse and research labs at the Agricultural Experiment Station.
It’s “one of the largest” state grants to ever benefit the facility, the lawmakers said.
The research and innovation in these facilities will help to “enhance and support” the agricultural needs of the area, they added.
“Having the Viticulture facility adjacent to our main campus at the Cornell Agriculture and Food Technology Park will stimulate a strong Cornell-FLCC partnership for training of viticulture students who will be essential to the New York wine and grape-industry workforce. Our faculty and staff look forward to working with students and faculty from FLCC,” Burr, the Agricultural Experiment Station director, said in the news release.
Contact Reinhardt at ereinhardt@cnybj.com
Payment-Bond Claims: An Alternative Way to Ensure Contractors are Paid
All too often, unfortunately, many construction subcontractors do not get paid for labor or materials. In order to receive payment, most subcontractors resort to filing a Mechanics Lien. The governing statutes contain a thicket of requirements that are strictly construed by the courts and must be followed to the letter, and collection efforts may be
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All too often, unfortunately, many construction subcontractors do not get paid for labor or materials.
In order to receive payment, most subcontractors resort to filing a Mechanics Lien. The governing statutes contain a thicket of requirements that are strictly construed by the courts and must be followed to the letter, and collection efforts may be frustrated if the defaulting contractor posts a separate bond, commonly referred to as “bonding off” the lien.
The subcontractor may also file a lawsuit against the defaulting construction contractor, claiming breach of contract and diversion of trust funds. The diversion claim is based on a law providing that funds received in connection with an improvement to real property, or for public improvements, are the assets of a statutory trust. They are to be held for the purposes set forth in Lien Law §71, including payment of subcontractors, laborers, and building-materials suppliers. Although diversion of trust funds is a larceny, the harsh reality is that sometimes the money has been spent elsewhere.
A sometimes-overlooked third option is a payment-bond claim. It should be investigated and pursued if available, either solo or in conjunction with liens and a lawsuit against the defaulting contractor.
A payment bond is a three-way contract between the owner (the obligee), the bonded contractor, and the surety. The surety is typically an insurance company.
The payment bond protects the owner in the case of claims made by unpaid subcontractors and materials suppliers. The contractor and the surety are signatories to the agreement. They bind themselves to the owner to pay for equipment, materials, and labor provided in the performance of the contract.
Early steps — Investigation and notice
Private projects
On private projects, the contract documents describe any bonding requirements. The general contractor should promptly furnish a copy of the bond to any potential claimant upon demand. If the contractor delays, contact the owner or owner’s representative.
Claims on private construction projects are governed by the terms of the payment-bond document and any referenced provisions in the underlying contract. Claim rules differ depending upon whether the claimant has a direct contract with the bonded contractor. Typically, direct claimants must give written notice (claim and the amount) to the surety with a copy to the owner.
Claimants who do not have a direct contract with the bonded contractor usually have additional requirements. This is logical when you realize that a general contractor may not know that a sub-subcontractor or materials supplier has not been paid.
It is essential to obtain a copy of the bond to determine the notice requirements in your particular case. Typical additional requirements include written notice of non-payment to the general contractor with a copy to the owner within a time period defined in the bond.
If the claim is rejected in whole or in part, or the contractor fails to respond within a defined period — often 30 days — usually the next step is written notice to the surety, again with copy to the owner. It is important not to delay; sitting back on an unpaid invoice may cause the demise of a claim.
Public Improvement Projects
New York State Finance Law §137 requires payment bonds for all but the smallest public improvement contracts. If your company is providing labor or materials on a public project, chances are there is a payment bond. You can obtain a copy from the head of the department or bureau having charge of the public improvement, comptroller, or other appropriate official. The bond is open to public inspection.
The same statute governs claims on public-improvement projects. The courts have held that its provisions are a minimum standard to be read into any public improvement bond. The bonding company cannot dilute the statutory protections. A direct subcontractor not paid in full within 90 days after its last labor performed or materials furnished, has the right to sue under the bond.
A sub-subcontractor must give an additional written notice to the bonded contractor within 120 days after claimants’ last labor was performed or materials furnished. This notice must be delivered personally to the contractor or mailed by registered mail. It is important to understand that 120 days is not the same as four months. The notice requirements must be followed precisely. They are a condition to a suit under the bond.
Sending the surety a copy of the notice may spark negotiations. Bond claims can place significant pressure on the contractor to resolve the dispute. In addition to paying the premiums on the bond, the principals of the bonded contractor have often signed personal guarantees, or company assets may have been pledged. Once the surety pays claimants, it will demand reimbursement for the claim(s) and associated legal costs.
Next Steps if Still Not Paid
If the required notice(s) are served and payment is not made, a lawsuit against the surety is the remedy. The statute of limitations on a public bond is one year from the date when the public improvement is completed and accepted. In the case of a private bond, the document terms govern. Typically, there is a one year statute of limitations, commencing as defined in the bond. The date of claimant’s last labor, or materials provided and/or the date of notice are common factors.
On a public improvement bond claim, interest and attorneys’ fees are potential elements of damages, and may factor into the pressure to settle a claim.
Any bond claim, public or private, must be documented. The bond and contract documents describe the requirements. Each part of the claim, including change orders, must be substantiated. Surety has all the contractor’s defenses in addition to some of its own. If the claimant’s work or materials did not meet the specifications, the surety will dispute the claim.
When appropriate, a payment-bond claim is an important tool that can be used to secure payment to a subcontractor or materials supplier. A payment-bond claim should be investigated promptly if an invoice is not paid within terms.
Lorraine Rann Mertell is a litigation attorney and partner at Mackenzie Hughes LLP, with a variety of experience in civil-litigation matters. Contact her at (315) 233-8282 or email: lmertell@mackenziehughes.com
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