- You own a business that I want that is worth $20 million dollars but you are having financial difficulty.
- I tell you that I want to buy your company but we can not agree to a price.
- Also convince you not to talk to anyone else about buying your business and you do not talk to any business brokers to see if anyone may be interested.
- In order to keep you afloat I will lend you monies to pay the bills that wil be credited to our agreed upon sale price.
Here is the question, why would I possibly want to help your business that will only drive up my purchase price? I would actually rather try to hurt your business thereby lowering the $20 million dollar price. It would cost me more money in the short-term covering your losses, but it all gets credited back at the closing on the reduced sale price..
Eventually your business is only worth $10 million, but since I have given you $6 million to cover you then I only pay you $4. The day I actually own your business is the first day I actually try to make your business successful.
In the above example, you are Worcester and I am Massport.
9 comments:
Bill, just a quick note--the airport parking lot was overflowing last week and as of this am, nwas still 90% full.
ben
I can hardly contain my excitement with so many positive things going on in the city. Before you know it we will be the “Hub of the Commonwealth”!
1) In today’s T&G, Shaun Sutner finally confirms what us silly bloggers already knew from “Scoop” Randell about Hanover’s involvement with CitySquare. I am convinced it is very close to a done deal otherwise the T&G wouldn’t be talking about rumors and innuendo. In fact, IMHO last week’s small story about Hanover Insurance pricing $200 Million in notes offering was the initial phase for raising the necessary capital.
5-year dearth ends? - http://www.telegram.com/article/20100225/NEWS/2250677
Hanover Insurance prices $200M notes offering - http://www.telegram.com/article/20100219/NEWS/302199765
2) Also in today’s T&G, the announcement of new construction in Gateway Park on an 80,000 sq. ft. building starting in July.
http://www.telegram.com/article/20100225/NEWS/2250610/1002/business
3) This dovetails nicely with the market rate housing proposal that the CC awarded to Acorn at the former Lincoln Sq. boys club.
4) The CSX expansion in Worcester leading to short term construction jobs and at least 50 more permanent good paying jobs.
5) And lastly so I can stay somewhat on topic, it appears to be a done deal for the transfer of Worcester Airport to MassPort on 07/01/2010 (although I do agree with you Bill that the process was not good but as you have said many times, I still think the airport will thrive under their ownership).
Two articles from this morning’s T&G concerning the airport confirm to me that everything is on track for the 07/01 ownership transfer.
http://www.telegram.com/article/20100225/NEWS/2250654
http://www.telegram.com/article/20100225/NEWS/2250653
What a great day/week it is in Worcester in spite of the grey skies and heavy rain.
Further developments at ORH--today's flight from Punta Gorda was diverted to Manchester.
ben
Just want to throw this out there, but when was the last flight to Myrtle Beach? We advertise the flights still but I have not seen anything other then SFB or PGD on our flight tracker for months now.
-Dave from Worcester
(its been a while i forgot my password -__-)
Bill:
Are you proclaiming Harry "Nostra" Tembenis' prophecy of Massport DRIVING DOWN the price of ORH is coming true ?!?!?!?!?
Silly Bloggaaaaaaaaaaaaaaaah !!!!
I have been saying this since what ...2006?
:-)
Harry T
Worcester,MA
BIll, the scenario you describe is possible. I will agree nothing of any substance has happened at teh airport since MP has been up there and the airport is severely under utilized. IMO we have to ask is this caused purposefully by MP or is the airport just a white elephant and the airports current status is just market forces at work?
The big problem is that even if MP has purposefully trashed the place from a marketing and operational perspective, the city has never had an interest in obtaining FMV for the airport. Witness your continued interest in an apppraisal, an RFP, and/or a concerted effort to sell to a 3rd party.
Politics could also be at work....do we really want a successful airport and the resulting issues? I mean just look at the CSX whiners coming out of the woodwork. A successful airport will necessitate an access raod. ROAR !!!!!!! With MP at the helm the city still has some political clout over what goes on up there.
My point is that absent the city wantign FMV for the place, of what consequence is it to selling price if MP runs the place into the ground (from an operational standpoint)
Selling and valuing something as unique as an airport requires that we step back and ask what are we really selling?
Well we are really selling two items:
1. A unique use piece of real estate that has an asset based value. This is by far the most valuable part of the airport. I looked at assessor records a few years ago and it seems to me the assessor had it at about $25-30M. So that means it's really worth more like $35M+. Check my numbers though.
2. We have for sale an operating "airport company" which has a much smaller value even it it was run properly and had near optimum utilization. Even if MP has run this operating company purposefully into the gound, it will not substantially affect the final FMV selling price in an arms length transcation b/c any suitor will see the inadequacies of the current operations and know that they as a new owners can perform much better.
So............given the city has no interest in maximizing the sale price........does it matter from a final selling price perspective if MP purposefully has run the place the down other than that they can now poss. now be the knight in shining armor and save the place?
Once agian, please remember that it is much easier to be successful at the Logan monopoly than it is at a place like ORH. Sorry, I just cannot see a bunch of MP bureacrats making oRH successful. They are not business people who know how handle real competition. They are more in the nature of what currently occupies the White House. Could they force a few airlines to bring a few flights to ORH....very possible. Is 8 or 10 weekly commercial flights at ORH the real meaning of success?
How should we define success at ORH going forward at MP? Answer: the city will never define success or mission accomplished.
I'll have state of the art condo's available soon Dave Z..you can buy one and move back to Woo..let it all hang out baby:>)
the big stuff gets all the excitement....but there is stuff happening on the organic side that gets little fanfare or support from the city unless one has a sledge hammer in town:>)
I am with Senor Pedro Jahn on this...there is a certain culture in this city that needs to be worked on as hard as all these new big buildings that Dave Z gets excited about..Wild Will Randell and I were in on a meeting last week with high level city officials discussing some of this
Paulie Peidmont, what was discussed at your "summit" with high powered city folks?
And most importantly, what's the follow up/action plan/objectives going forward and when is the next meeting to ascertain progress/ mission accomplished?
These folks will give ya yes man answers and then when you bring them an illegal dumper (for example) they just let the guy walk.
And please dont tell me that you're continuing to place any confidence in Babsie.
Can anyone tell my why the City pays an airport 'liasion' almost $90,000 a year? Coincidentally, the same person in this position has had many other positions in the city? Either this person is well educated to work in education, aviation and other positions or something is amiss.
-Dave Z.
Tatnuck
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