Click here for the Form 10-K.
Page 15
We expect to incur significant losses for some time, and may never operate profitably.
From inception through December 31, 2009, we incurred an accumalted net loss of approximately $49.9 million. The revenues that we began to generate from our Gonzales facility in Feburary 2008 and from our Woodbridge facility have not yet resulted in our earning a profit, and we will contibue to incur significant losses for at least the near future. There is no assurance that our operations will ever become profitable.
Jahn, would you sign on as a guarantor for 2.5 million for this company? The City of Worcester ahs.
Same Time Next Year
-
It’s been nearly a year since I wrote about the problems that come from
having 11 bosses who are not on the same page about anything, as well as
suggestion...
4 months ago
11 comments:
Sounds like a Julie deal to me!!!
ben
Great cities and businesses don't become great because they play it safe, they become great because they and their businesses take calculated risks.
Again, setting aside "*"sphere for a minute as I don't know much about them (greater transparency here by the City would indeed be welcome), I think it is good that Worcester is willing to think creatively and take calculated risks. To be sure, there will be plenty of failures (for every Norton like success story we have there are dozens of failures that we never hear about), but I'm also sure there will be some successes, and this is what will give Worcester a long term competitive advantage and contribute to making Worcester a unique city.
In the days of Norton Emory Wheel, cities built sewers, roads and other similar infrastructure to attract companies. I'm sure a lot of these investments never paid off as originally promised, but then again some of them did beyond anyone's wildest dream and we are still reaping their benefits today. Section 108 loans are just a modern form of infrastructure that cities can offer.....
Eric K.
Worc., MA
Erik K. "Schilling", my fine feathered hombre', banks obviously are not/will not lend these start up companies money, so therefore City taxpayers s/b guaranteeing loans for them? Geeeeeeeesh, you have been chillin' with the artsy fartsy crowd too long and inhaling some of the 2nd hand smoke from their Left Handed Luckies. Surely you jest...!!!!!
Mr Erik K "Schilling", where in Worc's charter do is the provision for Worc to be the backstop when ++ss poor lending practices blow up in the lenders face?
Do we definitely know if Worcester built infrasturcute for Nortons start up? I am guessing they originally started in an exisitng biulding and then moved to Greendale which back then didnt have a 3 decker, let alone a sewerage connection with in probably 2 miles. Was the city even sewered then? Biulding roads back then only entailed chopping down trees to create a wide dirt path. Fact Is Nortons probably ended up where they are b/c the RR's had been put in place through Greendale following the riverbed.
Notice however what Nortons did do for their employees back then. They built or aided in building Norton Village high atop Indian Hill........and dare I say with out any Comm. Dev'ment Corp (gov't) involvemnt. SO back in 1989 when Nortons wanted to build a trash to energy plant on their site what did the city council do for them? ++++. Ran the plant outta town to Hillbury where it today sits high atop Rte 20 paying taxes to Hillbury ,whilst the city hauls their garbage there daily.
Just ask then ceremonial Mayor Jordan Levy all about it. He'll tell ya how they trashed that recycle plant idea or how they ran Lewcott Chemicals outta Quinsig Village. Meanwhile all the fuming over fumes from a trash to energy plant in Greendale now just blows back in Worcester. BLowback is b++++.
tODAY WE'RE REAPING BENEFITS OF wORC Allegedlly building infrastructure for manufacturing plants????....I tend to disagree. Whats left of Worcester huge manufactuirng base right now. Only the 71 lb skeleton of teh former Nortons out of dozens of large manufactuirng plants that used to exist in Worcester and also many smaller ones that fed off the lager plants.
So Nick K writes an interesting piece today RE:zoning changes ( not variances) to accomOdate CSX for property which CSX does not even own yet.....and still no where in the article is the inflammatory term .....EMIMENT DOMAIN mentioned. My crystal ball suspects that soon we'll be reading about 13 property owners in the CSX proposed RR yard site heading 45 miles to teh east and retaining a couple of heavy hitting eminent domain barristers. Stay tuned
And what of spot zoning? Any chance it may apply to these some of zoning changes? I am reasonabbly certain the city law dept would not make that mistake. However in spite of that the council would have no problem voting contrary law dept advice.........right? Well not really......there was that strip joint zoning that got shot outta the water a while back.
Methinks that all these recent kudos for Tim McMurray re: the CSX deal & City Sq may possibly a form of political premature ejaculation. Let's at least await until the egg & semen has a heartbeat before there is any more chest thumping about Timmy's accomplishments.
Every won enjoy the nice Sundae afternoon with an ice cream treat (that was not purchased from any Worc street vendors) :(
JAHN
Erik, one big hole in the roads and sewers analogy is that if the company went belly-up after the city built the sewers and roads, the sewers and roads were still there for the next company to use.
If the city loans money to a startup that fails, that money is gone and the next company can't use it.
I also think your 'dozens of failures' estimate is low. I suspect there have been thousands of failures since Norton opened. Bill frequently publishes a list of 'dozens of failures', but I think that list only goes back two years.
Good point, however, I assume we are getting a new plant out of all this, that, even if they fail would be avaiable for use by someone else?
Also, does anyone know what the City gets for security for the loan? I would think we are at least getting a mortgage and liens on equipment....
Section 108 is CDBG $ right, so fed money? And if they default they take assignment of future City CDBG funds we would have otherwise received? So risk not really carried by city taxpayers unless City decided to bail it out. I guess there is an opportunity cost issue here though .....
Eric K.
Worc., MA
Erik would you name some of the flops like this that have hapened in huge numbers in specific towns and cities making smart decisions? Holyoke, New Bedford, Fall River, Utica, NY, Lawrence not allowed in the quiz.
I would say this is more indicitive of a city saying yes to anyone who asks it to dance cause so few have for so many years
Erik;
The City's guranteed HUD loan is subordnated to all the other debt Pharmasphere will have. When they go under there will not be enough to pay those creditors and the City will owe HUD 2.5 million.
Only good thing is the LDA expires September and this Pharamasphere debacle will finally end.
Thanks
Bill
Eric, please, if it's fed'l money or city money, it is still taxpayer money. I am sorry but I cringe when people say hey it's just money from Washington DC.....almost like some are saying who cares.
Surely you jest when you think that private lenders would evera allow them selves to be in a subordinate position to gov't loans/ guaranteees. Even if plant and equipment were security for the guarantee, we all know what distressed assets go for at auction, especially used personal property like equipment ......like maybe .09 cents on the dollar if the bidders are feeling really giddy that day.
Paulie congrats on another great NOLA fest. I took the Camp St short cut outta Hyannis last week. No Paulie sitings...!!!!!!
Bill the expiration of an LDA never stops this foolishness. The parties can extend it by mutual agreement if the deal is like others I have seen. Then once they take title they sit on it. Witness one particular deal on Mason St. Time for a clean sweep at some city offices. Everything is done backwards on Front St.
Jahn said, "Paulie congrats on another great NOLA fest."
I second that notion about Paulie's NOLA Fest! Too bad you weren't able to attend Jahn. Will the real Jahn please stand up? That would finally "put to bed" the rumor that Bill and you are "one and the same". :)
LOL Who says I wasnt there?
Incognito :)
David, moi garcon, no way in Hades do you really think that I am Wild Will Randell (as Paulie would say?)and you know that!!!!!!! Your long held real belief that we are different guys is correct and just to further that notion, I think that I s/b able to buy my Jahnermeister Brew in Price Chopper, Stop & Shop, Honey Farms, or other retail outlet that peddles food and or beverages. I can assure WWR, does not hold that belief.
Submit my blogs and WWR blogs to CSI or to teh FBI profilers and they well tell you each blog is written by two diff. individuals.
And once Again, I went to public schools and Eye no Howe two spell the werd 'definitely'....Bill does not.......he went to SJ :)
Eye am knot nockin' WWR, just noting a few differences.
I guess my point is if they build a plant and it goes under the plant itself will still be there for use by someone else, which is more than we have today - artice in this past weekend's Globe re: 38 Studios gives example of how RI made a loan to company that subsequently failed - yes, they lost some $ on loan, but they now have a new company in the building employing 100 people.
Eric K.
Worc., MA
Post a Comment