Experts: Jobs fall short

Call 236,000 U.S. gain 'modest'

Economists applauded yesterday's positive national employment report, but said the 236,000 jobs added in February are still a far cry from the numbers needed for robust recovery, especially as the country faces the impact of federal budget cuts.

"You're going to see a continuation of happier numbers, maybe an improvement, but if so, it will be a modest improvement," said Robert Nakosteen, an economics professor at the University of Massachusetts Amherst's Isenberg School of Management. "Not the kind of numbers you see in a normal recovery."

With the surprisingly high number of added jobs last month, the unemployment rate dropped two-tenths to 7.7 percent as more hiring took place and more people without jobs stopped looking for work.

The positive Labor Department report helped send the Dow Jones industrial average above 14,397, the fourth time in one week it broke its all-time high. Several sectors, including professional and business services, health care, retail and construction, all saw job gains.

Employment has risen by an average of 195,000 jobs over the past three months.

Nigel Gault, chief U.S. economist for IHS Global Insight, said sustained growth of 200,000 to 250,000 jobs each month would indicate a "much more vigorous" economy, yet historically the United States has been unable to hit that kind of stride for a substantial period of time.

"We had periods where we did that for two or three months and things slowed down again," he said. "I suspect, because of the sequester, the impact is we won't sustain job growth above 200,000 (a month) this year, but I think there's a good chance we can do it next year."

David Tuerck, executive director of Suffolk University's Beacon Hill Institute, said that despite the encouraging figures, the United States still lacks 4.9 million jobs compared to labor force conditions in place when President Obama was inaugurated in 2009.

"We remain stuck in a soft economy and the policies coming out of Washington are guaranteed to make things worse," he said.

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History updated in Westwood

This gracious 1920 Colonial got a major addition in 1991, but what's really unique is its stone cottage out back built by a World War I general.

The five-bedroom yellow clapboard house with black shutters at 152 Grove St. in Westwood sits on four acres of land, surrounded by a stone wall with rolling grass area, rock ledges and a fieldstone cottage.

The cottage was built by former owner of the land and neighbor U.S. Gen. Clarence Ransom Edwards, who in 1920 built a replica of his French headquarters in World War I where he led the 26th Infantry Yankee Division into battle. The current owner uses the cottage, featuring red clay tile floors, a large fireplace, shelves and mapboards, for entertaining.

The original 1920 area of the house, built as a summer home, has restored oak floors throughout and holds a formal living room with a wood fireplace, an enclosed porch and also a formal dining room, all with restored 8-over-8 rope-operated windows. The second floor has a master bedroom suite with a dressing room, closet space and ceramic en-suite bathroom. The second bedroom is currently used as a study and there's also a smaller third bedroom and a second full ceramic-tiled bathroom.

A major addition in 1991 is sympathetic to the original with a separate entrance and lots of 8-over-8 windows that look out onto the large back yard that has a granite paver patio. The addition includes an expanded and redone kitchen with a sunny breakfast room, a sunken living/family room, two more carpeted bedrooms and an attached three-car garage.

The large recessed-lit oak-floored kitchen has 35 white cabinets, plus an adjacent pantry with more cabinets for china. There's a large center gray-granite topped island and an adjacent cushioned window seat and second pantry closet. Appliances include a 5-year-old Thermador propane gas stove, two new white General Electric wall ovens, a new white Miele dishwasher and a white Sub Zero refrigerator.

Adjacent is the oak-floored breakfast room with nice views out to the back yard. This space segues into a carpeted sunken living/family room that's graced with a wood-burning fireplace bordered by built-in bookshelves.

Off the kitchen, in the entry foyer, is a laundry/mud room with a washer and dryer, as well as a sink and shower. There's also an adjacent half bath added in 1991, as well as direct access to a three-car garage.

The second floor of the addition features two carpeted bedrooms, a home office room that could be a nursery, and a library/sitting area. The two bedrooms are good sized with large closets and built-ins with bookshelves and desks. The bedrooms are served by a white ceramic-tiled full bathroom, and there's a laundry closet with a chute down to the first-floor laundry room.

There's a large carpeted playroom with built-ins over the garage with a large arched window.

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Report lays new foundation for housing policy

The housing market is on the mend but experts say the healing process has been held back by "rigid" rules for buyers and lenders.

A bipartisan commission of former Cabinet secretaries, ex-senators and top housing and economic experts released an expansive new vision for housing policy last week, calling for a greater role for the private sector and a more limited role for the federal government.

The panel also advocated for the elimination of government-sponsored mortgage lenders Fannie Mae and Freddie Mac, along with reform of the Federal Housing Administration to improve efficiency.

"Today, a number of obstacles prevent a return to the conditions that prevailed in the late 1990s — before lax underwriting infiltrated the system and contributed to the crisis — and stand in the way of qualified borrowers accessing mortgage credit," the Bipartisan Policy Center's 136-page report states. "Restoring the appropriately conservative underwriting standards in place before the housing bubble, with their focus on the overall creditworthiness of the borrower, could help to improve the health of the housing market."

The FHA appears to be more cautious than it used to be. The report notes that in 2012 the average FICO score for an FHA loan was close to 760 on a range of 300 to 850, compared to the 710-720 that the average Fannie Mae and Freddie Mac borrower had in 2001.

"The pendulum may have swung too far in the wrong direction," said Nicolas Retsinas, director emeritus of Harvard University's Joint Center for Housing Studies, who served on the housing commission. "We want to make sure we are not so strict with our lending standards to facilitate a full recovery to the housing market."

Other obstacles discussed in the commission's findings include a lack of access to credit for well-qualified, self-employed individuals, potential "put-back" risk to lenders liable for government-backed mortgages that default, and the sale price of distressed or foreclosed homes used as comparisons in appraisals of non-distressed property.

Retsinas also noted that the housing recovery has been bumpy because several important federal rules are still pending

"We need to increase clarity and consistency for many lenders. We also have to create a system that doesn't favor large lenders," he said. "We need to have a level playing field."

Jennifer Athas, a licensed real estate broker, can be reached on Twitter 
@JenAthas.

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DeLeo plans to STEM tide of job unreadiness

Education and business leaders yesterday applauded House Speaker Robert A. DeLeo's proposal to create a STEM Starter Academy at Bay State community colleges to help put students on the path to job readiness.

In a speech before the Greater Boston Chamber of Commerce, DeLeo said that by 2018, Massachusetts will have 300,000 job openings, some of which can be filled by community college graduates.

But 65 percent of these students are enrolled in at least one remedial course, said Richard Freeland, the state's commissioner of higher education. And many students don't successfully complete the required courses or avoid taking subjects like math altogether and therefore never graduate, DeLeo said, citing a study by the Chronicle of Higher Education.

"For our economy to thrive, that needs to change," he said.

Although still in the conceptual stage, DeLeo's proposed STEM Starter Academy would be an intensive program to bring students up to speed so they can go on to more advanced training in science, technology, engineering and math.

Instead of meeting for one hour just three times a week, courses might meet two or three hours five days a week, an immersion model that has proven successful in language instruction, Freeland said.

"Many opportunities for students graduating from community colleges are in STEM fields, but students who enter community colleges are often weak in math and are therefore starting out behind," said Andre Mayer, senior vice president of research at the Associated Industries of Massachusetts. "They need a lot of education to bring them up to speed, so finding a way to accelerate that process is important."

Chamber President Paul Guzzi called the plan, which DeLeo has proposed funding with gaming license revenues, "innovative and on point."

"This initiative would provide community college students with additional training in the skills that many employers are looking for," Guzzi said. "This will help better align community college training with workforce needs, which is critical to sustaining our region's economic growth."

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PRIM eyes prime properties

The state pension fund is set to go on a billion-dollar commercial real estate buying spree and experts say now is a great time to buy.

About 10 percent — or 
$5 billion — of the state's
$52 billion pension fund is currently invested in real estate, much of it in direct ownership of properties, including the fund's home at 84 State St. in downtown Boston.

State money managers recently decided to borrow against the pension fund's real estate portfolio, raising $1 billion at favorable terms, and hunt for more properties to purchase.

"Our appetite near-term for real estate has gone up. We have five real estate managers who are trying to identify real estate we can buy," Michael Trotsky, executive director and chief investment officer for the state pension fund, told the Herald. "We are looking mostly for 'core' real estate — the best buildings in the best locations, primarily in the United States, but we don't specifically target any city. It will be throughout the country."

David Begelfer, CEO of commercial real estate trade group NAIOP Massachusetts, said it's a superb time to buy for anyone who "does their homework."

"The market in Massachusetts, especially Eastern Massachusetts, has been extremely strong over the last couple of years and looks to be strong going forward," Begelfer said. "Many markets around the country are still recovering and so there are certainly some opportunities."

The pension fund already owns 87 commercial properties, plus several others through partnerships.

For example, in California, the fund owns the Market Street office and retail building in downtown San Francisco, a shopping center anchored by a Safeway in Mill Valley, and the Carmel Medical Office building in Rancho Bernardo.

The portfolio includes 2020 K St. in Washington, D.C. — the 11-story home to several Bingham McCutchen lawyers and the George Washington University Press — and the Sawgrass Lake Center, an office complex in Sunrise, Fla.

Last year, the pension fund returned 13.9 percent, much higher than its 8 percent target — and starting this year the state's target return has been increased to 8.5 percent. There are 522,800 members of the pension plan — 329,000 active and 199,000 retired, according to the state treasurer's office, which oversees the pension fund.

Trotsky said he expects the pension fund to invest the extra billion dollars within two years. The last time the pension fund went on a similar real estate buying spree in the 2000s, it netted $400 million extra.

"We're taking advantage of the low-interest rate environment and we expect it to generate $400 million in 'excess' profits over the next seven and a half years," he said. "It was considered very safe by outside investors. (The pension fund) is so big and so stable that it's not considered a big risk to issuers of this debt."

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DeLeo: Gov’s tax hike plan damaging

House Speaker Robert DeLeo will tell Hub business leaders today that working families and businesses shouldn't have to suffer "collateral damage" from Gov. Deval Patrick's plan to hike taxes by nearly $2 billion to pay for transportation and education.

"Sensitive to today's economic realities, I'm worried that the administration's proposal places too heavy a burden on working families and businesses struggling to survive," DeLeo says in a speech this morning to the Greater Boston Chamber of Commerce, according to his prepared remarks.

"We want to minimize the pressure on Massachusetts citizens as we find a way to meet our goals. If we are to pass a new revenue package, I believe it should be far more narrow in scope and of a significantly smaller size."

Patrick has proposed nearly $2 billion in new taxes to fund education and transportation projects and wants to hike income taxes; make regular increases in MBTA fares, RMV fees, highway tolls and the gas tax; and raise taxes on cigarettes, candy and soda, while lowering the state sales tax.

Some lawmakers prefer separating the $1 billion in transportation financing from the full state budget, with user fees instead of broad-based taxes.

In his chamber speech, DeLeo will also discuss funding for education, another Patrick priority.

"These areas cannot be sufficiently addressed without the injection of additional revenue into the system," DeLeo says. "While we agree we need to focus on these two areas, I do differ on the amount of new revenue that Massachusetts families and business should be asked to contribute."

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State sees green in golf courses

The state is spending millions to bring operations back up to par at Leo J. Martin Memorial Golf Course in Weston and Canton's Ponkapoag Golf Course, where it hopes one day to host a major pro tournament.

The Department of Conservation and Recreation's plan for "Ponky" includes $2.6 million to reopen nine closed holes at the 36-hole course, plus drainage improvements already under way and an irrigation project slated to start this spring.

DCR Commissioner Ed Lambert said conditions at the courses haven't always been the best, but the state has hired new managers, reclaimed golf cart and driving range operations from private vendors and purchased 120 new carts.

"Now we'll be making the profit and putting it back into the operation," he said. "It will be used to pay some of the investment in staff and capital that allows us to raise even more money."

Golfers' fees will remain at current levels and cart rentals will cost less. Both courses also will start accepting reserved starting times for Friday through Sunday and holidays.

The 77-year-old Donald Ross-designed Ponkapoag and the 18-hole Leo J. Martin course, which opened in 1930, are "great old establishment courses that people always have been passionate about," said Joe Sprague, executive director of the Massachusetts Golf Association, which promotes amateur golf in the state.

"If they're going to keep the prices the same and have the conditions improve, that's a win-win for golfers," said Sprague.

The improvements follow unsuccessful efforts to privatize the courses in years past. Last year, the Legislature agreed to let the DCR keep 80 percent of its revenue, up to $14 million annually, instead of returning it all to the state's general fund and awaiting a smaller re-appropriation. That allows the courses to now serve as "profit centers," according to Lambert.

"It's really an entrepreneurial way for us to operate, and it reduces costs to taxpayers," he said. "This year … we've already increased (the overall DCR) revenue stream from $1 million to $2 million."

The DCR will host a public hearing today at Ponkapoag to discuss the proposed changes.

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Fisher buy baits back bay

Beacon Hill and Suffolk University may have buried the hatchet, but another town-gown battle is brewing in Boston as Fisher College eyes an expansion in Back Bay.

The private liberal arts school recently started mapping out its development plans with the city and just bought an Arlington Street property that sits well beyond its academic core on the first block of Beacon Street.

The moves are rankling residents — who fear more students will settle into new dorms amid their multimillion-dollar condos — and threatening a fragile, decade-long peace between Fisher and an influential neighborhood group.

"Things have shifted from how do we work this out, to how do we stop them," said Peter Sherin, a director at the Neighborhood Association of the Back Bay. "And the next thing is how do we get them out."

Neighbors are challenging Fisher's zoning rights to use several buildings for classrooms or dorms, a change they say would effectively create a quad that diminishes the residential character of Beacon Street.

Fisher spokeswoman Jennifer Courtney said the 818-student school operates within the zoning code and is in the early stages of a master plan, a first for Fisher as it eyes "modest" growth in the decade ahead.

"We're not trying to create any enemies," she said. "We're constantly working with the neighbors and there's an open-door policy."

A task force set up by the Boston Redevelopment Authority meets March 28. "We'll work with the institution and the community on a sensible, appropriate and responsible expansion plan," said BRA spokeswoman Melina Schuler.

Fisher was forced to clamp down on disruptive student behavior in 2001 after a shooting outside a dance led to licensing board scrutiny. These days, Fisher responds aggressively to complaints, many of which turn out to be unrelated to its students, Courtney said.

Still, some neighbors wish Fisher would follow the lead of Emerson College, which shifted student housing to the Theatre District. On Beacon Hill, Suffolk University eased tensions by increasing the size of the non-expansion zone around its campus.

Howard Kassler, a neighborhood group leader, remains hopeful the town-gown tussle won't blow up to Suffolk proportions.

"My personal sense is that is not the way it's going," he said. "Like the people on Beacon Hill, we've spent a long time — years and years and years — ensuring the Back Bay remains the Back Bay. The historic district means so much to us."

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Firm makes it a Snap to pay around the world

Truly global commerce where merchants can take payment in almost any major currency is getting a boost from an Israeli firm that just opened offices in Waltham.

BlueSnap powers transactions in 145 countries and 28 currencies, said Ralph Dangelmaier, who took over as CEO six months ago.

"We're pretty confident when merchants use us, we increase their business 20 to 40 percent," Dangelmaier said. "It's because we offer lots of payment types, so it's easy to pay, and in their own language."

BlueSnap, whose main competitor is eBay-owned PayPal, also allows merchants to run promotions and it offers subscription billing on a monthly, quarterly or annual basis, he said. They pay between 
2 percent and 8 percent of each transaction, depending on what they're selling, the type of payment and where it's coming from.

Founded in Israel in 2002 under the name Plimus, BlueSnap has had offices in Silicon Valley since 2006, and it's expanding in all three locations, Dangelmaier said.

In 2011, Great Hill Partners of Boston bought controlling interest of the company for $115 million.

"It seemed like a pretty decent bet that more businesses were going to be selling software content and subscription services online over the next five to 10 years," said Matt Vettel, managing partner at Great Hill Partners.

Today, BlueSnap has about 120 employees and about 5,000 clients worldwide, most of them outside the United States, Dangelmaier said. PayPal is one of its competitors, but doesn't customize screens for merchants, allow promotions or subscriptions, or accept as many payment types, he said.

"We think we've built a better mousetrap," Dangelmaier said.

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State picks Pike's peak

Hub developers Samuels & Associates and Weiner Ventures got a green light from the state to build a $360 million residential, hotel and retail project over the Mass Pike — big plans in the Back Bay that could get even bigger.

The real estate firms won a lengthy competition for two key air-rights parcels with twin developments that promise to raise cash for taxpayers and transform the intersection of Boylston Street and Massachusetts Avenue.

"It really fills in part of the Back Bay that really, simply put, needs to be filled in," developer Adam Weiner said yesterday after the Massachusetts Department of Transportation announced its selection. "It really needs more energy and greater vibrancy."

With the state-owned sites all but secured, the Samuels/Weiner team will pursue an adjacent air-rights parcel owned by insurance giant Prudential Financial to extend the development farther down the block. Prudential had teamed with losing bidder Chiafaro Co. on a 29-story office tower on its parcel and the state-owned Parcel 15.

Meanwhile, according to sources familiar with the situation, Samuels/Weiner are working on a deal to buy a Dalton Street parking garage, across from the Hynes Convention Center, where the development could expand even more.

Onetime air-rights bidder Carpenter & Co. of Cambridge dropped out of the running last summer after failing to make a deal with garage owner Pilgrim Parking. Carpenter had planned a 16-story office tower on the site, next to a 200-room hotel.

Weiner declined comment about a garage deal. He noted a Prudential executive said during a community meeting that the company would "act accordingly" with whichever developer is designated.

"We look forward to having conversations with them," Weiner said. "The project doesn't depend on it, but obviously it seems to be a natural (extension)."

A Prudential spokesman declined comment. Ted 
Oatis, co-founder of the Chiofaro Co., said the developer "would welcome the opportunity to work contemporaneously" with the Samuels/Weiner team.

MassDOT is finalizing a 99-year lease with initial payments of $18.5 million from the developers. State transportation chief Richard Davey said the Samuels/Weiner proposal "provides the best overall value and long-term benefit to the city of Boston."

The project, subject to city permitting, calls for a 32-story hotel and residential tower across Parcel 15 and a St. Cecilia Street parcel the developers bought from the Archdiocese of Boston for nearly $14 million in 2008 — with the development in mind all along.

On Parcel 12, an L-shaped structure would include a mid-rise residential building along Boylston and a two-story retail building over the Pike along Mass. Ave., capitalizing on nearby Newbury Street's posh shopping district.

The two sites total 230 residential units, a 270-room hotel and 50,000 square feet of shops and restaurants. It was the consensus favorite of a powerful Back Bay citizens advisory committee that reviewed all of the plans.

"Covering up the Mass Pike will knit the Back Bay together," said Meg Mainzer-Cohen, president of the Back Bay Association, who served on the panel. "We think the hotel is going to be very exciting. This is the hottest hotel market in Boston, and right next to (the Hynes) is an ideal site."

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