19 Biggest Business Stories of 2019

Retail Armageddon

A record number of stores already closed this year in the United States — exceeding 9,000 stores by November and there is a growing belief that total store closings could hit 12,000 for the year.

The retail sectors being hit the hardest are “Softlines” — apparel and textiles.

2020 could be an even worse year for retailers. “[It is] increasingly tough for Softlines retailers to justify keeping underperforming stores open, and wouldn’t be surprised to see another large-scale round of closure announcements in early 2020,” reports Credit Suisse analysis.

Potential Biogen Breakthrough

Biotech firm Biogen could double its market cap if it receives approval from the Food and Drug Administration (FDA) for its experimental Alzheimer’s drug, aducanumab, said CNBC’s "Mad Money" host Jim Cramer.

Creamer reported that Biogen, with a $54.1 billion market cap as of close on his November show, “could be worth twice that if all goes well” with the FDA. The implications for the drug -- medically and financially -- are groundbreaking.

Brown University physician and researcher Dr. Stephan Salloway at the Warren Alpert Medical School has played a critical in the development and clinical research on aducanumab.

Salloway is a leading Alzheimer's researcher in America, and recent investments made at Brown University, including the $100 million gift for its brain science institute from alumnus Robert and Nancy Carney, are part of the efforts to quicken the pace of scientific discovery and help find cures for diseases such as ALS and Alzheimer's. 

Approximately 5.5 million Americans suffer from Alzheimer's and of these, around 5.3 million are 65 and older, and 200,000 are younger and suffer from early-onset Alzheimer's disease. It is estimated that about two-thirds of Americans with Alzheimer's disease are women.

RI Ranked Last in CNBC Ranking for Business

Rhode Island was ranked as the worst state in the country when it comes to business climate, according to the 2019 rankings by CNBC.

This came after the state was ranked 45th in each of the last two years, as GoLocalProv reported.

According to the study, Rhode Island is ranked 32nd best for workforce, 48th best for economy, and 50th best for infrastructure.

READ: How CNBC chooses America’s Top States for Business in 2019

CNBC ranks RI’s quality of life as 28th best and education as 25th best.

The Method

According to CNBC, they determined 2019 America's Top States for Business by the following:

Data analysis is used to determine America’s Top States for Business, an annual CNBC report in its thirteenth year. Our exclusive study is conducted by CNBC staff, and it scores all 50 states on 64 metrics across 10 categories of competitiveness. It is not an opinion survey; we measure actual performance by the states.

The states are graded based on the qualities they deem most important in attracting business. To do that, we assign a weight to each of our 10 categories by analyzing every state’s economic development marketing materials. The more the states cite a particular category as a selling point, the more weight that category carries. For example, if more states are talking about their workforce, the Workforce category carries more possible points.

States receive a letter grade in each category to measure their performance. Grades are scaled relative to the competition. However, each state’s overall ranking, as well as its ranking within each category, is based solely on the number of points scored.

Boeing's Impact on Norweigan and T.F. Green

Norwegian announced in August that it was discontinuing transatlantic routes originally operated by the Boeing 737 Max aircraft in September -- which included T.F. Green Airport and multiple locations in the northeast. 

The move followed months of substitute aircraft operations covering the airline’s routes due to the global grounding of the 737 Max. 

“We’ve been informed by Norwegian that they’re ceasing operations at Green,” said T.G. Green spokesperson Bill Fischer on Tuesday, of the airline that bills itself as "Europe's Best Low-Cost Airline at the time of announcement. “And it’s not just Providence, They’re ceasing operations out of New York, New Jersey, and Hamilton [airport in Ontario].”

Latest Airline Impacted by Boeing 737 Max Grounding

In March, discount airline Wow Air abruptly closed operations, giving passengers one-day's notice.

CNBC reported this week in "Airlines hurt by the 737 Max grounding are scrambling to find replacement jets," "With more than 500 Boeing 737 Max planes parked all around the world, there remains a shortage of commercial jets."

“It’s clear that the 737 Max development impacted the Norwegian economic model, and in turn they made a significant announcement today throughout the northeast,” said Fischer. “One of the biggest problems with the 737 Max, besides public safety, is how and when it will end."

“It’s unfortunate, as this was a successful, popular route,” said Fischer of the Norwegian routes between Green and Ireland. “That gives promise when we pursue conversations with other airlines.”

Unusual Ownership Group Selling Their Fox Point Bar

As GoLocal reported in October:

It is always a little sad when a neighborhood bar closes — the history and the fear of losing a bit of community, but this bar has a very unusual story.

The bar located at 12 Governor Street in the heart of the Fox Point section of Providence was listed for sale this week for $379,000.

It is known as ‘Round the Corner’ and it has a rich past -- and unusual ownership. 

The listing by Re/Max agent Brenda Rebello-Reyes describes it as a turnkey operation, and for Rebello-Reyes, the sale is much more personal. 

“There’s a little story behind this bar,” said Rebello-Reyes, when reached for more information about the sale. “There’s 22 of us now.”

Twenty-two owners that is.

Rebello-Reyes told GoLocal about being part of the collective group of owners, who are “all a little older now," and have now decided it is time to sell the neighborhood establishment.  The group opened in the early 1990s. 

The real estate listing tells the facts, “Well known neighborhood bar in the heart of Fox Point and seconds to the East Side and Downtown Providence. Sale includes building and business — great opportunity for an ambitious owner to take this existing business to the next level! 

Buyer to [do] due diligence in respect to the future or additional usage options. Call for more info! Please do not disturb employees/customers-currently in a residential area but operating lawfully as a commercial business."

Deep History in Providence -- Three Rules for the Owners -- READ THE REST OF THE STORY HERE

RI Company Ranked as One of Mark Cuban’s Best ‘Shark Tank’ Investments

It all started in 2013 on Season 4 of the TV series Shark Tank, when Rhode Island’s Nuts ’N More appeared and received $250,000 from Sharks Mark Cuban and Robert Herjavec for 35 percent of the company.

When the company appeared on the show, its sales were just $100,000.

Two years later on an update segment of Shark Tank— sales had risen to $6 million after a deal with retailer GNC.  SEE Shark Tank Update Above

In 2018, according to Inc. Magazine sales have grown to more than $30 million. The magazine ranks the Rhode Island startup as Cuban's second-best investment on the show.

Peter Ferreira, CEO of Nuts 'N more tells GoLocal about working with Cuban, “He’s always 10 years ahead and has honesty shaped the direction of this company.  We have regular monthly meetings and he’ll dive right into the weeds at times. It’s crazy! “

“Frankly I have no idea how he does it and keeps track of everything. He’s extremely generous and all he wants in return is for his investments to give it 1000% effort + a return, of course, lol,” adds Ferreira.

Now, Inc. magazine ranking joins Fortune magazine’s designation in 2016 that Nuts ’N More is one of the top 10 Shark Tank investments of all-time.

Who is ranked #1? Tower Paddle Board according to the Inc. ranking.

The Future of IGT and Hasbro

Two of the biggest business storylines of 2019 will not be resolved until 2020 -- the future of two of Rhode Island's largest employers and both homegrown companies.

The future of both IGT (formerly GTECH) and Hasbro in Rhode Island are both in question.

Can Rhode Island retain the companies or could both go the way of the PawSox?

IGT spent the year battling to defend the proposed lottery contract extension. Hasbro was expected to make an announcement about new corporate headquarters in 2019, but has delayed for now. 

Cumberland Farms Sold to British Retailer

It all started in 1939 when Vasilios and Aphrodite Haseotes bought a farm in Cumberland, Rhode Island -- and, one cow. In 1962, Cumberland Farms opened up the first-ever convenience store in the Northeast.

In 1972, Cumberland Farms was innovative when it became one of the first places anywhere to offer self-serve gasoline — perfectly timed for the oil crisis.

Now, UK-based EG Group has entered into a massive deal to buy Cumberland Farms.

In 2017, GoLocal reported that the Haseotes family, who still owns Cumberland Farms and in 2015 was #73 on Forbes list of America's Richest Families, was back in court - over family-owned land in Massachusetts. 

As GoLocal reported:

George Haseotes was in Providence Superior Court suing his sister, Lily (Haseotes) Bentas and V.S. Haseotes & Sons Limited Partnership for what he alleges is Bentas’ refusal as the Managing Partner of the Partnership to release records and documents regarding properties owned in Massachusetts.

READ THE FULL ARTICLE HERE

Cumberland Farms - EG Group Deal

"Over nearly eight decades the Haseotes family have built Cumberland Farms into an outstanding portfolio of large, modern facilities run by a team of associates who are connected to the communities they serve. It is rare that an asset of this quality becomes available and we are delighted to have been successful in a highly competitive process," said Zuber Issa, founder and co-CEO, EG Group said in Convenience Store magazine. "We look forward to welcoming the talented team at Cumberland Farms into the EG family."

According to Convenience Store magazine, the acquisition of Cumberland Farms will take the EG Group's U.S. network to nearly 1,700 stores, operating in 30 states and retailing over 2.5 billion gallons of fuel with merchandise sales of more than $3 billion on an annualized basis. 

"We very much look forward to becoming part of the EG family, as it is clear that both Cumberland Farms and EG Group share a common vision for excellence in convenience retailing and commitment to investment in our people," said Ari Haseotes, president and CEO of Cumberland Farms.

Hassenfeld Selling Rhode Island Estate

Alan Hassenfeld, the former Hasbro CEO and present board member of the company, placed his family’s four-home compound in the Highlands section of Bristol on the market.

The asking price: $8,500,000.

Now, a Florida resident, Hassenfeld recently emerged himself in the battle between IGT and Twin River and recently claimed, “I have no skin in the game with IGT or Twin River.’’ 

But, Hassenfeld’s Hasbro has a lot of skin in the game.

Twin River is trying to unseat IGT and become the state’s lone lottery provider. Just one problem, Twin River is a casino company, not a technology company and so it has teamed with Scientific Games Corporation, which would provide the technology infrastructure.

Hassenfeld has failed to disclose Hasbro’s longstanding agreements with Scientific Games — a multi-million contract that goes back to a 1998 contract.

Hassenfeld is the largest individual shareholder and third-largest overall behind two major institutional investors, Capital Research & Management Co. and Vanguard Group, in Hasbro. 

Hassenfeld owns 7,881,840 shares and with Hasbro trading at $116 a share as of close on Tuesday, Hassenfeld’s stock is valued at more than $914 million, according to MarketScreener. 

‘SHANGRI-LA’

“‘SHANGRI-LA’ Compound of 4 houses on 600 feet of Shoreline in Bristol Highlands. This stylish and carefully curated collection of four residences includes two guest houses, a main house, staff quarters, two greenhouses, a tea house and garages. A private sandy beach, heated infinity pool, koi pond and abundant outdoor living space expertly placed among the residences are designed to capture the dynamic west facing views of Narragansett Bay,” writes Lila Delman real estate.

The four structures were built between 1973 and 2016, according to Bristol tax records.

"Not selling the whole property, only part," said Hassenfeld, in response to a GoLocal inquiry about the four properties listed at $8.5 million.

Hassenfeld added he was overseas on business.

Today, Hassenfeld lives at the exclusive Fisher Island development in Miami beach -- which Business Insider dubbed "The Most Expensive Zip Code in Florida."

“Billionaire Alan Hassenfeld, former CEO of the toy company, paid $8.2 million for a unit at Palazzo del Sol, according to a spokesperson. And it looks like Hassenfeld and his wife’s new condo has plenty of space for toys: the three-bedroom, three-and-a-half bathroom, 3,793-square-foot unit 7052 features marble, specialty wallpaper and teak walls. It was designed by Antrobus + Ramirez,” reported the real estate website, The Real Deal.

Hassenfeld was a donor to the Political Action Committee "It’s Time Providence" that targeted Providence Mayor Jorge Elorza. He donated $35,000 to the PAC.

Top 50 RI Physicians Received Payments Totaling $12.8 Million

In Rhode Island, the top 50 physicians who received payments from drug and medical device companies received in total more than $12.8 million between 2013 and 2016.

The next 3,400 plus Rhode Island doctors combined received less than $12 million.

SEE THE LIST HERE

“Pharmaceutical and medical device companies are required by [federal law] to release details of their payments to a variety of doctors and U.S. teaching hospitals for promotional talks, research and consulting, among other categories,” says ProPublica.

The data was collected from the Centers for Medicaid and Medicare by ProPublica. The Rhode Island data and the top 50 list was compiled by GoLocalProv.com.

One of Raimondo’s Top Recruited Corporations Pulls Out of RI — 200 Jobs Impacted

It was billed as one of the big economic development wins by Rhode Island Governor Gina Raimondo.

Agoda, a division of Booking Holdings that also has Priceline, KAYAK and OpenTable, was coming to Rhode Island and was bringing with it hundreds of jobs.

In February 2017, Raimondo pushed through $7.4 million in subsidies for Agoda. The company was moving and expanding operations previously located in Florida,

The deal was going to be worth millions to the Rhode Island economy — nearly $20 million. The company describes itself as "Agoda, one of the world’s fastest growing online travel agents (OTAs)."

“Based on a third-party analysis, direct and indirect economic and fiscal benefits of the proposed project include increased annual state GDP in 2018 of $19.5 million, related to 32 construction and 311 ongoing direct and indirect jobs created, and increased personal income, as well as sales and business corporation tax revenues during the construction phase and ongoing operations over the 12 years of the agreement, with a combined estimated value of approximately $7.4 million,” said Commerce RI.

According to sources at Agoda in Providence, employees were recently notified that the office will be closing in mid-March.

The buildout to the Agoda office was to cost $5.1 million.  "..the company [Agoda] estimates that it will spend approximately $5.1 million in 2017 on leasehold improvements, fixtures and furnishings, and purchase and installation of IT equipment,” wrote Commerce RI in its documents.

Booking and Agoda press offices have both refused to respond to repeated requests for comment.

Sports Betting Bust

The Rhode Island Lottery’s sports book generated a total of $3 million in gross profit in Fiscal Year 2019 — after Governor Gina Raimondo’s administration had originally promised to deliver $23.5 million to the state coffers in its first year. 

In April, GoLocal reported, One of Rhode Island’s former top bookmakers says Rhode Island’s sports betting numbers are flawed and that the state can never realize the revenue it has projected.

“Their numbers are fraudulent,” said the former bookie.

The individual, who GoLocal agreed to refer to as “Carmine,” which is not his real name, was part of a major organized crime-backed illegal betting group that was busted in the mid-2000s by the Rhode Island State Police and local law enforcement.

GoLocal has confirmed his identity and his role in the mob-tied gambling group through conversations with former top law enforcement officers, a lawyer involved in the matter, and press reports at the time.

“Carmine” spoke with GoLocalProv under an agreement of confidentiality. He says he is no longer involved with bookmaking.

According to the yearly report released by the Office of the Auditor General on Monday, the Rhode Island Lottery paid $397.3 million to the State’s General Fund for the year ended June 30, 2019, an increase of $32.3 million over the prior year.

However, the gross profit to the state from the sports book totaled $3.0 million, after commissions, payouts and marketing expenses — more than $20 million off what the Administration had touted. 

In November, the state had even downgraded its expected take, saying that it would realize $11 million. 

Total revenue for the program in fiscal year 2019 was just $6,867,769 or 29 percent of what was promised.

Now, gross revenue comes in at half that amount. 

Thayer Street Loses Its Local Businesses

Now, Durk’s Bar*B*Q is closing on Thayer Street.

An employee told GoLocaProv -- who broke the news -- that the last day at its current location was December 22, and it is expected “re-open” at a location closer to downtown “in the spring."

Durk’s opened on Thayer Street in 2017. 

Latest Thayer Street Shakeup 

“Thayer Street on Providence’s East Side used to be predominately dominated by an eclectic collection of local shops -- either locally owned or small regional chains,” wrote GoLocal in March 2019 in “Proliferation of Chain Stores on Thayer St. — The Death of Locally Owned Retail?”

There was a local supermarket, gift stores, and locally-owned restaurants, but first slowly, and now at a rapid pace, chains have taken over the retail strip. Today, CVS is on the corner of Thayer and Cushing Streets. Previously, it was a locally owned grocery store complete with a butcher shop.

The four-block commercial district now has more than 20 chains who dominate the college-focused retail strip. Students from Brown University and Rhode Island School of Design are prominent in the area. Today, there are fewer and fewer locally owned stores.

Efforts to reach Durk's owner Steve Durkee were unsuccessful at time of publication. 

Biltmore No More

The historic Biltmore Hotel name was changed by the Chicago-based hotel group that owns the property to the Graduate Providence.

While new Graduate Hotel signage went up in 2019, the landmark red light "Biltmore" on the roof will remain for the foreseeable future.

The Biltmore is owned by AJ Capital Partners, which asserts they have "over $2.3 billion gross acquisition value of real estate purchased since inception and more than $1.7 billion gross fair market value currently under asset management.”

About Graduate Providence

"What Graduate is doing here is enhancing the spirit of the Biltmore -- to enhance the historical elements, everything that makes the Biltmore what it is," Scott Williams, General Manager of the property, told GoLocal.

"The Biltmore sign on top of the hotel stays up," says Williams. "The building is registered as a historic landmark. Our owner, even if he could take it down, I don't think he would.  He loves neon and taking old things and bringing them back to life. The Graduate sign out front is real neon -- it's not LED," said Williams.

"We're hoping to have by the end of this week our soft opening -- by that point all of our old rooms are out of inventory and we're only renting new Graduate rooms and the lobby we're hoping for the end of completion by the end of this week as well," said Williams. 

"Right now we still have two floors of the Biltmore rooms that are in inventory that will drop out at the end of this week -- from that point forward only the newly renovated rooms will be occupied," he added.

"Elevator could be a maybe," said Williams of the new ownership's plans moving forward -- and potential to fix the iconic glass elevator which has been out of commission now for years.

The magazine Fast Company dubs the parent company one of the 50 most innovative companies in America, “Launched in 2014, Graduate Hotels spent the past year spreading its kitschy-cool brand of hospitality to college towns across the country: It now has 10 properties, from Oxford, Mississippi, to Berkeley, California, with eight more in development. “There’s generally a lack of interesting hotel product in our markets, yet [university] communities are incubators for innovation, job growth, and culture,” says AJ Capital Partners founder and CEO Ben Weprin, who developed the Graduate brand through his real estate investment group.

AJ Partner’s tagline is, “New life for old gems.”

Presently, the hotel describes itself as “The Providence Biltmore, located in the heart of downtown Providence, Rhode Island, is a landmark hotel with an illustrious past. Designed by the celebrated firm Warren and Wetmore, the architects behind New York City’s Grand Central Station, the hotel debuted to widespread acclaim in 1922 and quickly became the tourist and social center of Providence. Today, deeply woven within the city’s fabric and culture and beloved by generations of guests, the Providence Biltmore is an authentic Providence tradition.”

RI Contractor Blasts Out-of-State Developer of College Hill Tower, Governor Should Be “Embarrassed”

In March, GoLocal reported:

One of Governor Gina Raimondo’s prized “cranes over Providence” projects is turning into a financial nightmare for many Rhode Island small businesses.

The $60 million project and an approved second phase have been green-lighted by the Rhode Island Commerce Corporation for ten million in public financing, but contractors have levied liens in Rhode Island courts for millions of dollars on unpaid bills by the developer Rick Shaffer of Vision Properties, a Pennsylvania development company.

The company has repeatedly promised over the past six months that it would get all the contractors paid.

Vision issued GoLocal the following statement on February 22, “The Edge At College Hill was a significant undertaking and we are proud that it could add to the fabric of the great City of Providence. Like any large-scale project, much of the final reconciliations occur well after the project is complete. We are wrapping up that process now.  We hope to finalize all such matters within the next 30 days or less.”

“I am really not happy with Mr. [Rick] Shaffer — especially with my conversation [Wednesday]. I don’t know the truth. I’ve had enough,” said Bruce Bookbinder, CEO of RI-based Delta Mechanical

Delta is owed more than $800,000 for work that was completed in September.  Bookbinder previously spoke out on the non-payment back in February. 

“The [State of Rhode Island] can’t give [the next project] to him — if they give it to him, the Governor ought to be embarrassed. Tell me what the difference is with this and 38 Studios. I think Curt Schilling at least was honest, I think the other people got away with murder,” said Bookbinder.

Raimondo is chair of the Commerce RI and led the board’s approval of both of the Vision Properties’ projects. Her office refused to comment on this article.

“One is he hasn’t paid, and he really is hurting people. The tile guy [on the project], his contract is for $700,000 — and I believe he got $100,000 to date,” said Bookbinder.

U.S. Hits 50-Year-Low in Unemployment, Adds 266,000 Jobs in November

The United States unemployment rate dropped to a 50-year-low of 3.5% in November, while the economy added 266,000 jobs, announced the U.S. Department of Labor on Friday.

The unemployment rate is the lowest it has been since 1969.

“Great jobs report,” said President Donald Trump in a tweet on Friday morning.

According to the Department of Labor, the unemployment rate for adult men and women was 3.2 percent, teenagers were 12 percent, whites were 3.2 percent, blacks 5.5 percent, Asians came in at 2.6 percent and Hispanics at 4.2 percent in November.

The number of long-term unemployed, (those jobless for 27 weeks or more) remained at 1.2 million and accounted for 20.8 percent of the unemployed.

Healthcare System in Rhode Island

There is financial trouble in the Rhode Island healthcare system.

“Rhode Island continues to be a very challenging environment for the health care industry. To succeed, we need to be agile, open to new ideas, and find innovative ways to provide high quality, compassionate care for more patients with less reimbursement. We are committed to doing just that,” said Dr. Timothy J. Babineau, president and CEO of Lifespan.

Due to Lifespan’s finances, Babineau has said layoffs are on the table and union officials are furious.

In an interview on GoLocal LIVE in early December, Linda McDonald, President of the  United Nurses and Allied Professional (UNAP) said, “UNAP represents over 2,700 direct caregivers at Rhode Island Hospital and Hasbro Children's Hospital. It's well-known that were already stretched very thin on staffing and we would be very surprised if they could possibly handle layoffs at the bedside."

“It would definitely interrupt care -- we feel we're already stretched too thin. The nurses and other health professionals give all that they can but any talk of decreasing the amount of staff at the bedside would dramatically change the quality of care that can be delivered at those hospitals and I would imagine the union would potentially take action, of course,  if [we] get indications from Lifespan that this could come to pass,” said McDonald.

According to Lifespan, the “2019 financial results can be traced to several factors including, but not limited to: a dramatic and unexpected reduction in Medicare rates of nearly $25 million; a full year’s impact of Memorial Hospital closing, resulting in excessive demands on both The Miriam and Rhode Island hospital, creating throughput inefficiencies; a continuing deterioration in payor mix; and the continued steerage of tertiary care to Boston” — a clear reference to Care New England’s relationship with Boston hospitals that is sending more and more Rhode Island patients to Boston rather than to competitive in-state hospitals.

"Dr. Babineau's suggestion that layoffs be on the table represents a callous and alarmingly out-of-touch understanding of bedside care at Rhode Island and Hasbro Children's Hospitals. Frontline caregivers and support staff are already stretched thin and constantly asked to do more with less. Layoffs will dramatically and adversely impact patient care, and I would strenuously caution Dr. Babineau to consider that before his decisions cripple Rhode Island's only level one trauma hospital," said Frank Sims, RN, president of UNAP Local 5098.

Finances for Lifespan and Care New England - Memorial Hospital's Legacy

On Wednesday, Lifespan reported a loss of $55 million from operations without investment income in fiscal year 2019, which ended September 30, 2019.

With investment income, loss from operations was close to $23 million. These results led to a net loss of $35 million for fiscal year 2019.

While some of Lifespan's losses were linked to the closure of Memorial Hospital by Care New England, that hospital group was claiming that the closure of Memorial has allowed them to go from catastrophic losses -- more than $120 million over a three year period to marginally better than break even.

"Care New England Health System this week that in Fiscal Year 2019 it achieved income from operations of $3.8 million, a $31.9 million improvement over FY 2018.  Its obligated group (CNE excluding Memorial Hospital) achieved income from operations of $5 million, slightly below the $5.3 million generated in FY 2018," said the company.

But Care New England refused to answer questions about the state of the pension fund at the hospital. As GoLocal reported in February of 2018, "According to CNE financials, the pension fund is underfunded by over $100 million. The fund did realize substantial gains that mirrored the performance of the stock market."

Merger of GateHouse and Gannett Official - Projo’s 3rd Owner in 5 Years, More Cuts Expected

Two of the largest newspaper groups have merged and it creates the largest newspaper company in the history of America. Shareholders of the two companies approved the deal in November. 

The merger between GateHouse -- who owns the Providence Journal and Worcester Telegram and 150 other daily papers and Gannett, the company that owns USA Today -- will create a company with 263 daily media organizations across 47 states.

The merged company will operate under the Gannett name going forward -- but will be managed by the GateHouse management team led by Mike Reed. 

The deal between the two shrinking newspaper companies is dependent on “synergies of $275 - $300 million” — synergies meaning staff reductions.

Financing the deal is Apollo Global Management - led by Leon Black — a close associate of Jeffrey Epstein. Apollo is providing $1.79 billion in financing on a 5-year short-term note at 11.5% interest.

Many media experts have questioned the financial viability of the deal. “No one believes the numbers,” said billionaire investor Leon Cooperman on an earnings conference call on October 31.

In Providence, Rhode Island — the Providence Journal’s newsroom has shrunk over the past ten years from 150 to just 15 reporters today.

The circulation has declined from about 200,000 two decades ago to just 30,000 plus and is now just 3 percent of the state’s population.

Newspaper advertising spending is expected to continue to decline -- down 17.9% according to E-Marketer. Both companies are unprofitable during a period in which media spending is dramatically increasing.

GateHouse stock had lost more than 50% of its stock value in the past 12 months. “The deal is bad for journalists, it’s bad for readers and it’s bad for the future of local journalism,” said NewsGuild-CWA's Bernie Lunzer, “Local papers will likely vanish, jobs will be slashed, and reporting will suffer.”

The Providence Journal will have its 3rd owner in 5 years. Worcester Telegram has its 5th owner in 6 years. “Neither company has digital chops that have you jumping out of your seat,” said media analyst Doug Arthur of Huber Research to WaPo.

Wexford Innovation Center Opened in 2019

The first major project on the former 195 land opened in July and Rhode Island Commerce Secretary Stefan Pryor said “Wexford is the centerpiece” of the development area that has been decades in the making.

The gleaming project is 196,000 square feet and cost in excess of $88 million.  The project will receive about $40 million in taxpayer subsidies, $18.8 million in incentives from the 195 Redevelopment Fund, $15 million in Rebuild Rhode Island Tax Credits, a million in sales tax credits and the project has a tax stabilization agreement (TSA) with the City of Providence. 

The project opens with only a few hundred employees.

The Cambridge Innovation Center (CIC), Brown University and Johnson & Johnson are anchor tenants in the building located at 225 Dyer Street. The center will also house Venture Café and its District Hall. The complex linchpins other developments in the area including South Street Landing, the pedestrian bridge spanning the Providence River, new housing developments such as River House and Chestnut Commons, and the Garrahy Courthouse parking garage. Additionally, other I-195 parcels are in various stages of the development and review processes.

“For Rhode Island, Providence, Wexford, Brown and all of our partners in the Innovation Center, this is a moment to celebrate,” said Brown University President Christina Paxson in a statement. “Opening the doors to 225 Dyer Street not only advances one step further the Jewelry District’s transformation into a thriving hub for research, education, innovation and commerce, but also serves as a blueprint for the essential public and private partnership that will continue to bring new economic life to the city and state in the years ahead.”

In 2017, Johnson & Johnson was awarded millions in incentives, subsidies and tax credits to build out new space on Ship Street in Providence and create 75 high tech healthcare jobs. It was supposed to be the beginning of potentially something much bigger for Rhode Island.

The package approved by Rhode Island Commerce Corporation in January of 2017, was robust, "incentives up to $4,425,860 in foregone state revenue, up to $1 million in renovation and fit-out costs at 1 Ship Street, and up to $700,000 in workforce services and talent attraction grant funds.”

In total, it was a more than $6.1 million package for 75 jobs -- $81,333 in subsidies per job.

Rhode Island officials knew the cost was high, but the potential was to lure a top U.S. corporation to the state with the potential to create hundreds or thousands of new jobs. Johnson & Johnson is an $81 billion company which employs more than 130,000 employees globally.