Business

Calista Miakoda, a second-hand clothing and accessory boutique, opened today on Ellicott Street in Downtown Batavia.

Owner Kaitlin McGratf is 19 and spent her whole life in Genesee County, growing up in Bergen.

She's dreamed of owning her own clothing store since she was 12, she said, which is when she picked the name for the business. She doesn't remember which language the words come from, but Calista means "most beautiful" and Miakoda means "night sky" (roughly).

"My dad always owned his own business," Kaitlin said. "I don't like working for other people too much, and I thought it would be fun (to own her own business). It's (clothing) has always been a hobby of mine."

The regional real estate market may be picking up steam, but the impact is muffled in Genesee County, according to Howard Cohen, owner of FearyCohen Realty in Batavia.

Cohen said since the Batavia area is considered a bedroom community -- meaning a lot of folks commute elsewhere to work -- it doesn't get big ups or downs in the market that metro and resort areas do.

"We have a stable market," Cohen said. "Most people tend to stay in the area, even when they buy up."

The Democrat and Chronicle reported this weekend that a tax credit of up to $8,000 for first-time home buyers is heating up home sales.

"The tax credit is making homes go off the shelves," said Garry Britton, an agent at Nothnagle's Fairport office.

Homes priced below $150,000 in good condition are moving swiftly, followed by those under $200,000.

The tax credit is available for first-time buyers, and returning buyers who haven't owned a home for at least three years, who purchase a home by Dec. 31. It allows them to get a tax rebate of up to 10 percent of the selling price, up to $8,000.

Existing home sales for January through March were 1,648 compared to 2,112 in the first quarter of 2008. That's a drop of 22 percent, according to the report released Thursday by the Greater Rochester Association of Realtors. The median house price of a house was $105,000, with half higher and half lower in price, which represents a 3-percent decline.

The data spans a 12-county area from Seneca Lake to Genesee County and Lake Ontario to the Southern Tier.

The tax credit may help improve those numbers, but it probably won't have much impact locally, according to Cohen.

"We don't have a lot of first-time buyers here," Cohen explained. "We're still in a bit of a slump, but sales are a little stronger that in the last period of 2008."

The folks at Bob Harris Realty said they are optimistic that the tax credit will help boost sales, plus buying typically picks up in springtime.

Real estate advisers say to avoid low-ball offers in these categories and to expect a negotiating window no greater than 5 percent.

Ken Mistler gave me a deluxe tour this morning of the gym at the corner of Jackson and Main he hopes to open in about six weeks.

The picture above is of a staircase that will lead to the lower level work out area and men's locker room. Mistler said a previous tenant built the staircase, but when the city would not let the business put an entrance to the building on Jackson, the staircase was floored over.

I copied the photo off the Facebook page Ken set up for Next Level.

Mistler seems to be putting forth the effort to create a first-class gym. The building is being completely renovated with new electrical (an upgrade required by new building codes implemented since the building's 1967 construction), new heating and cooling and such attention to detail as ceiling lights that defuse light so that people laying on a bench lifting weights won't have a bright light shining in their eyes.

There will also be a full sevice coffee bar accessible from Main Street.

The four-level building will also eventually serve as Mistler's home. He's building a residence on the fourth floor.

When I saw how much work is left to be done, I expressed surprise that it would take only six more weeks of work to get the facility open, but Mislter said the hard work is done (he did much of the jack-hammering in the cement floors himself to improve drainage (did you know there is an artesian well under that part of downtown?) and lay in new plumbing in the basement).

Previously, Ken told me a number of membership have already been sold -- and who can argue with the price? People can join for as little as $20 per month.

Mistler's gym looks like it's going to be a great addition to downtown, helping to bring a lot more people into the center of the city on a regular basis.

Author Lorna Bartlett was the guest of Present Tense for a book signing on Saturday, and she left an apparent fan of the charming shop on Washington Avenue.

She writes in her blog:

What a terrific store! Housed in a gorgeous old Victorian home, the shop (inside and out) is painted in wonderful colors. There are several rooms filled with books, a selection of coffee and teas, children's toys (and books!), candles, hand-sewn purses (I was really tempted by those), pretty teacups, a gallery of original photographs, magnetic poetry kits, and lots of other marvelous things. I admit, I did succumb to temptation and bought a package of Who Dunn-Its sticky notes.

If you missed the signing, Bartlett left some signed books at the store. 

Check her post for more details about her afternoon at Present Tense and some pictures she took of the store.

Buffalo attorney Jim Ostrowski lost the first round in his legal fight against New York State grants and government loans to businesses, but he's pushing forward with his crusade against "corporate welfare."

GCEDC's VP of marketing and communications, Chad Zambito is concerned that efforts such as Ostrolwski's could undermine economic development tools such as empire zones and damage efforts to bring business to Western New York.

"What it really does is it sends ends a message to site selectors nationwide that New York is really unfriendly to business," Zambito said. "It certainly sends a message to business people who might be looking at New York State that we might not be the most stable environment."

Zambito said Ostrowski's effort, if successful, would hurt the state because of New York's excessive tax burden.

Ostrowski doesn't buy it.

"That’s a really bad argument," Ostrowski said.  "If you look at Pennsylvania and Ohio, to reduce our taxes to their level, we would have to cut $40 billion out of the budget. Now corporate welfare only moves around about $1.5 billion per year, so it’s not an effective tool to compete with other states (with lower taxes)."

 

A lawsuit filed by Ostrowski on behalf of a number of people claims that New York's state Constitution forbids government loans and gifts to private enterprises, and for good reason.

Part of the lawsuit reads:

Prior to 1846, the State of New York provided large loans and grants to private
business allegedly for economic development.

When many of these projects failed, state taxpayers were left with a fiscally
unstable state government and much higher taxes to pay off loan guarantees.

To remedy this problem, the state constitution was amended in 1846 to ban loans
to private firms.

The voters approved the amendment, 221,528 to 92,436.

In 1874, the provision was expanded to include a ban on giving the money of the
state to private firms.

State lawmakers sought to amend the Constitution in 1967, but voters defeated the proposal by more than two million votes.

"In the years that have passed, state officials have acted as though the 1967 amendment had become law," the lawsuit reads.

Ostrowski lost his lawsuit, but the decision is now on appeal.

"There is no scientific or economic study that has ever shown these (economic development) policies to be effective," Ostrowski, adding later, "The main question is what gives these bureaucrats that run these agencies any expertise at all what business projects to pursue. Those decisions should be made by entrepreneurs in the market place."

The ECEDC has a number of promising projects on the board, however, has three major projects on the board, including Genesee Valley Agri-Business Park, Upstate Med & Tech Park and Commercialization Center, and the Science, Technology, Advanced Manufacturing Park in Alabama. There is also the possible revitalization of the Harvester Center area, which could also potentially use some extra government funds.

Zimbito doesn't think the lawsuit is any threat to these ongoing projects, but he does think it runs counter to the stimulus incentives being laid out by the Obama Administration.  The suit, if successful, could prevent New York from getting further stimulus aid, with that money going to other states instead.

"The stimulus money is taxpayer dollars to spur investiment and stimulate the economy," Zambito said. "That’s based on a lot of grants and a lot of low interest loans. So I’m not sure how that’s going to play with all this stimulus money that’s coming through state channels. I think that would put a damper on it, and by the sound of it it would put a halt to stimulus dollars as well."

Naturally, given that this is New York, Ostrowski may not even need to win the appeal to achieve the same effect. According to this Dave Catalfamo column, the governor is doing his best to kill of empire zones by making them uninteresting to migrating businesses.

Manufacturers, which are already in danger of joining New York’s Karner blue butterfly on the endangered species list, are now required to generate $10 in economic activity for every $1 in state tax breaks. And the state is ... demanding non-manufacturers to deliver a 20-to-1 return.

Finally, when thinking about government money going to private enterprise for large scale projects, it's always best to keep the downtown mall in mind.

 

Here's a good bit of writing and reporting from Scott DeSmit on the pinch, if not outrage, from local business owners over the fee and tax increases in the new state budget.

Great lead:

The New York state budget will be enacted this week and you'd be hard-pressed to find anyone who isn't harboring thoughts of revolution.

The print edition includes a good breakout box of 19 increases hitting consumers and businesses.

Among the largest, up to 5,000 percent increase in cigarette taxes.  As Scott writes, you read that right: 5,000.

Jeff Heubusch, owner of Southside Deli on Ellicott Street in Batavia, said he already knows what he's going to do about the new fee. He's not going to pay it.

"I definitely won't carry cigarettes," he said. "The profit margin just isn't worth it. If I stop selling them, so what? Our main business is food."

Heubusch said he would have to pay $2,500 to sell cigarettes.

"We used to sell 150 cartons a week in the 1990s," he said. "Now, we're lucky to sell 20 a week. I'm sure there's a motive for this. I think what's going to happen is you'll find that instead of 50 places to buy cigarettes, you'll be down to two or three."

Read the whole thing.

Local dairy farmers are hurting, according to Dean Norton, president of the New York Farm Bureau.

Prices have plummeted -- because of decreased demand for dairy products at home and abroad -- while costs have increased substantially. 

Currently, milk is selling for $10.50 to $11.50 per 100 weight (about 8.5 gallons), while the cost of production is $15 and $16 per 100 weight.

Last year, milk sold for about $20 per 100 weight.

"The area economy stinks and it's a tough year," Norton said. "Receipts are down and individuals might be exiting the dairy industry."

Exports have dropped and domestic demand has been driven down as people eat out less during the recession, so there is shrunken demand for dairy products.

To help address the plunging prices, Cooperatives Working Together (CWT) has initiated a herd retirement program, which will help reduce the number of milk-producing cows and lower supply.  Bids must be postmarked by May 1.

Dairy farmers throughout the nation are hurting according to The Rural Blog:

“The number of dairy cows being sent to slaughter has risen by about 20 percent from last year, as desperate farmers cull their herds and sell at fire-sale prices,” Sue Kirchoff writes for USA Today. “Adding to the problem, banks are less willing or able to extend farmers’ loan payments amid the financial turmoil.” John Murawski reports for the News & Observer in Raleigh, "Several dozen dairy farms in North Carolina are expected to go under this year." (Read more)

The National Dairy Federation has called on President Obama to aggressively address the problem, or thousands of jobs could be lost.

“There are several reasons for the implosion: oversupply, falling export demand and continued high prices for supplies such as feed,” Kirchoff explained. “The dairy sector in the past has been less prone to huge price swings than other areas of agriculture, but that’s changing as the industry relies more on the markets and less on government programs.”

Agriculture Secretary Tom Vilsack announced a program to buy 200 million lbs. of nonfat dry milk surpluses for domestic low-income programs.

Neighboring Wyoming County is being especially hard hit by the downturn in the dairy market, according to a story by Tom Rivers.

The $60 million in reduced revenue is compared to 2008 prices, when dairies averaged about $17.50 per hundredweight. This year the prices are forecast to average $12.80 for the year. The prices are expected to climb above the current $11 level and top $14 in September, which is still below most farms' production costs.

The county's 47,970 cows, which outnumber the county's residents, produced $178.9 million worth of milk products in 2007, by far the most in the state.

"The market is saturated and these prices are likely to be with us until mid-summer," Norton said.

Batavia-based Graham Corp. announced new orders worth about $3.5 million for surface condensers to be installed in two oil refineries in India and South Korea and a fertilizer production facility in the United States.

The orders follow quickly another $5 million in sales for the company's ejector systems, according to the Democrat and Chronicle.

CEO James Lines said:

"While we expect the global recession and tight credit markets to continue to affect the pace and timing of new order placement ... we view the potential bookings pipeline favorably," Lines said. "We believe the long-term fundamentals supporting increased global demand for energy are solid."

This past week I got to live out the dream of every kid (and most adults) I know.  I got a tour of Oliver's Candies from manager Jeremy Liles.  He showed me all their products, machines and specialties.  He introduced me to his dedicated staff and explained what each one of them did and what made each one of them so valuable to the company and its success. 

With Easter being right around the corner I felt this was the best time to feature them here.  I was amazed by how many different sizes and shapes of Bunnies they offered.  From little realistic to cartoonish, solid and hollow and from little bite sized all the way up to nearly 4ft tall and topping the scale at 31 pounds.  They have chocolate shaped like sports equipment, tool sets, Champagne bottles and Dinosaurs.  Baskets galore, stuffed animals, keepsakes, cards and balloons which they even offer to deliver for any and all occasions.

Oliver's was started in 1932 by Joseph Oliver in his home which is still the main section of the current store.  In fact, the bedrooms now are used as offices upstairs.  He began making his candy and started by selling it at local gas stations and corner stores.  Joseph continued to grow and set up a retail space in his front palor, he eventually served as the first president of the RCA (Retail Confectioners Association). 

 

According to Jeremy, one of the interesting things he did was make all ingredients used in his candies public.  However, in what order, how much, and procedures belonged to the person.  He did share one creation of his with a company and they still follow it today.  To everyone who  has enjoyed an "Andes Candy", you can still buy the original created right here in Batavia.  The Hostess Mints made here are still the original recipe followed from years ago. 

Jeremy said that he constantly hears from people that have tried ones from other companies and state that they just aren't as good.  Jeremy says that after purchasing the company in 1998 he and his family made a promise to never change the quality or ingredients of any of their famous products.  They still buy everything they can locally to insure quality.  He also says they haven't raised prices in three years and there is no plan to in the near future. 

He stated, "People have come to expect our quality and high standards, we never want to disappoint them.  We love hearing the same thing year after year".  One of his favorites is someone coming in that hasn't been able to visit for a few years and after the first bite they are filled with joy and exclaim "just as I remeber it!" 

I know even in my family, whenever my parents return to Florida they, and Ed Arnold had better remembered to bring some down with them.  Jeremy said the only changes they've made to the store is the size of the shipping room.  By adding creating a web-site and offering world wide shipping during holidays even the larger shipping room over flows with boxes waiting to leave. 

He added the ice cream palor in 2001 and on a hot night the jammed parking lot is proof of just how good it is.

We all wish Jeremy and his family continued success.  Nearly everyone I ever spoke with has a cherished memory of Oliver's.  I myself have them and now I happily make memories with my kids.  If you visit there often there is nothing I'm saying you don't already know.  If it's been a while, it is just as good as you remember.  Oliver's is located at 211 W. Main St in Batavia. Phone them at 1-800-924-3879.  Check outt their web-site;  www.oliverscandies.com and see some videos or place an order.

(her's where I was going to insert some pictures. I'm unable to insert them at this moment. When my 13 yr old daughter gets home she can show her cyber-moron father what he's doing wrong)

A new national database designed to let consumers check on the health of regional banks shows the Bank of Castile in a relatively strong position.

According to the site, Castile has a troubled asset ratio of 3.4 percent, compared to a national median of 9.9 percent. The report also says as of December 2008, the bank had no loans more than 90 days past due.

You can check on all of New York's regional banks from this page.

M&T Bank, of Buffalo, which received $600,000 in TARP bailout money, has a struggling subsidiary. Manufacturers and Traders Trust Company has troubled asset ratio is 17.1 percent. It has more than $44 million in delinquent loans.

You can find out more about the Bank Tracker on the site's Q&A page.

Amidst a negative employment report, Genesee County is a bright spot, according to a story in the Buffalo News.

While the region saw unemployment reach a 25-year high, Genesee County actually added .09 percent in new jobs, the biggest increase of any rural or metro county in the state.

The rest of WNY continues to struggle.

“Across the board, we have a lot of weakness,” said John Slenker, the labor department’s regional economist in Buffalo.

The job losses were widespread throughout all portions of the local economy, with particularly steep declines at local factories, where more than 5 percent of the region’s manufacturing jobs have disappeared over the last year. But service-providing jobs also took a hit, with the loss of 8,400 of those jobs, from banking to retail and hospitality.

UPDATE: The Daily News, like WBTA, is reporting different numbers than the Buffalo News. The Daily reports that unemployment in Genesee County rose from 9 per cent to 9.5 percent.

Rep Chris Lee says he wants to help small businesses. His latest effort, announced in a press release today, is a tax break for start-up costs.  He co-sponsored the legislation with a Democratic congressman from Maryland.

Apparently, a small business can currently only write up $5,000 of its start up costs for tax purposes. Lee's proposal would bump the limit to $20,000.

That sounds good as far as it goes, but at a time when credit is tight for small business start-ups, is it really going to provide the needed stimulus for entrepreneurs? Just asking.

Click on "read more" to view the full press release.

Press Release:

H.R. 1552 endorsed by nation’s leading small business association: “Congressman Lee’s plan to jumpstart the small business sector of our economy is the right approach to getting our economy back on track.”

WASHINGTON – Congressmen Chris Lee (R-NY) and Frank Kratovil (D-MD) held a joint press conference call today to discuss bipartisan legislation they have introduced that would boost small business start-ups by expanding a critical tax incentive. This is one of two bipartisan initiatives Congressman Lee has proposed this month to jumpstart job creation and aid Western New York’s economic recovery.

Congressman Kratovil added: “The men and women who own and operate small businesses are the driving force behind job creation; employing half the nation’s private work force.  These entrepreneurs need encouragement and motivation to create jobs and spur innovation in these challenging times; giving them a start-up expense tax break will do exactly that. “

H.R. 1552 has been endorsed by the National Federation of Independent Business (NFIB), the nation’s leading small business association representing small and independent businesses.

Mike Elmendorf, state director of NFIB/New York, said in a statement, “Congressman Lee’s plan to jumpstart the small business sector of our economy is the right approach to getting our economy back on track.  His proposal to quadruple the start-up deduction will give thousands of small businesses the incentive they need to invest in growing their business and creating jobs.”

Last week, Congressman Lee joined with Congressman John Boccieri (D-OH) to introduce bipartisan legislation (H.R. 1545) to make the research and development (R&D) tax credit permanent. Unlike other proposals to make the R&D tax credit permanent, H.R. 1545 would also offer a bonus tax credit to companies who manufacture most of their products in the United States.