Category Archives: Economy

Stew Leonard Jr.: Amazon Purchase Of Whole Foods “A Game-Changer”

Amazon’s proposed $13.4 billion purchase of Whole Foods has rocked the grocery and retail industries.

An hour ago, Stew Leonard Jr. was one of the experts CNBC called on for expert reaction.

Stew Leonard Jr. (Photo courtesy/Westchester Magazine)

The president and CEO of the small but influential chain called the deal — which includes a store on the Westport border just a mile from Stew’s Norwalk flagship location — “a game-changer in the industry.”

Amazon’s technological know-how “will revolutionize how people buy food and get it delivered,” he added.

Leonard — whose grandfather Charles Leo Leonard founded the store’s predecessor, Clover Farms Dairy, and personally delivered milk straight from the farm to local customers — saw today’s announcement as a return to those days.

“The cost of the last mile of delivery has been dropping,” he noted.

Leonard also cited the growing number of millennials as a factor. Using his 31-year-old daughter as an example, he said that her generation expects every purchase to be deliverable.

However, he continued, “retailers have to get snappier” about how they present the purchasing experience.

“We try to make it fun,” he said, with plenty of animation and the chance to see mozzarella balls being made fresh.

However, he acknowledged, buying cereal and water in a store is far less exciting.

(Click here for the full 4:42 interview.)

When Amazon gets into delivery of Whole Foods products, will the animals at Stew’s be less of a draw?

Senior Center Expansion Moves Forward

With support from a wide range of town officials, the Westport/Weston Clergy Association and — most importantly — longtime residents, the Board of Finance last night unanimously approved $3.975 million to expand the Senior Center.

Dozens of Westporters had written in praise of the project. Finance members seemed moved by the broad support — particularly the emails and letters (many of them handwritten) from men and women who have lived here for decades.

The expansion will add 8,362 square feet to the Imperial Road facility, and add 27 parking spots.

Construction could begin in the fall of 2018.

A rendering of the proposed Senior Center building.

Graduation Ceremony, Summer Camp Help For Kids In Need

Westport is a town with plenty.

And a town that never hesitates to help those who don’t have as much.

Right now, our wonderful Department of Human Services is running two programs that touch lives we may not always see.

One is “Ceremonies and Celebrations.” For the 14th year, the fund helps students purchase special event clothing for graduations from middle and high school.

It doesn’t sound like much. But to a teenager, looking like everyone else on a big day means the world.

Last year, 34 youngsters smiled with pride, alongside all their friends.

Everyone wants to look as good as these girls did, after Staples’ 2013 graduation. The Department of Human Services helps those who need it.

Human Services director Elaine Daignault suggests that (tax-deductible) donations can be made in honor of a special teacher or person in a student’s life. A letter of acknowledgment will be sent to the honored individual.

Checks payable to “DHS Family Programs” (memo line: “Ceremonies”) can be sent to Department of Human Services, 110 Myrtle Ave., Westport, CT 06880.

Gift cards of any amount (American Express, Visa, MasterCard, Trumbull Mall/Westfield Shopping Center) to purchase clothes are also welcome.

For further information on this program, contact Patty Haberstroh (hsyouth@westportct.gov; 203-341-1069).

The 2nd program is a fund to send children to summer camp. Like new clothes for a special occasion, this project is not frivolous. It’s a godsend for working parents — and a life-changer for kids.

Summer Camp has been part of growing up for decades. In 1953, Westport artist Stevan Dohanos used Camp Mahackeno for this Saturday Evening Post cover.

Every year, thanks pour in. One woman noted the importance of swim lessons for her autistic daughter. Another said that her child “came home with a new story, friend or art project every day — and a huge smile.”

In addition to covering costs for ever-popular Camp Compo, the fund has helped a boy play American Legion baseball, and a girl participate in Staples Players’ summer program.

The other day, Westport PAL donated $1,200 to the Campership Fund. If you’d like to join them, checks payable to “DHS Family Programs” (memo line: “Campership”) can be sent to Department of Human Services, 110 Myrtle Ave., Westport, CT 06880.

To apply for campership help, click here.

Town Mill Rate Set: 0% Increase

Westport’s mill rate is set.

It’s exactly the same as last year.

The Board of Finance voted unanimously last night to keep the town’s mill rate at 16.86, for fiscal year 2017-18. The board did express concern about the possibility of a mid-year “supplemental assessment,” depending upon state finances.

The total town budget is $204,240,189.

First Selectman Jim Marpe said:

I am proud of our department heads for working diligently to control costs and improve efficiencies, while at the same time maintaining and enhancing our infrastructure. We have been able to absorb the fully restored school budget through the efforts of all town departments. We continue to reform our pension and health programs as we continue to fully fund our obligations and aggressively pay down debt.

Our community is united to ensure that Westport continues to be a highly desirable place to live – for our youth, young families, and seniors. In addition to fully supporting our world-class schools, this year’s budget includes enhancements to downtown, the beaches, and the senior center. Our grand list continues to grow and enables us to mitigate property tax increases, reflecting the confidence residents and businesses have in investing in Westport.

Board of Finance chairman Brian Stern commended “the hard work and commitment of the town’s department heads and professionals. While not raising property taxes, we will also be able to retain reserves at 11%, at the high end of our policy range and consistent with the town’s Aaa rating.”

Steve Haberstroh Has Warren Buffett’s Ear

Steve Haberstroh is a 2000 Staples High School grad, and former basketball star. Today he’s managing director at Westport-based CastleKeep Investment Advisors. He just returned from Warren Buffett’s annual meeting in Omaha.

Over 40,000 shareholders gather at the “Woodstock for Capitalists.” But Haberstroh was more than just an attendee. His name was called — and Buffett spent 8 minutes answering his question. Let the Westporter tell the story:

Every February, Buffett publishes a Letter to Shareholders. He does a magical job of describing the year for Berkshire Hathaway. He also addresses social, political or other financial-related themes each year. It is a must read for financial types and casual investors.

This year, The Oracle of Omaha took on the fees charged by the hedge fund industry. He believes they charge far too much. The same is true for what Buffett calls “financial helpers”: those who manage investment funds, many of whom have the objective of “beating the market.”

I work for our family wealth management and investment firm in Westport. I also own a small amount of Berkshire Hathaway stock. Many of our clients own shares as well.

We are not a hedge fund. Nor do clients expect their portfolios to outpace the S&P 500 each year. However, we do charge a fee to deliver holistic wealth management advice, so I suppose Buffett would put us in the “financial helper” category.

I did not take offense at his comments, which were directed more toward hedge funds. But I needed to react.

I took Buffett up on the offer in his letter, and submitted a question. I hoped it would be chosen from thousands of entries to be read at the shareholder meeting.  I wrote:

You made it very clear in your annual letter that you think the hedge-fund compensation scheme of ‘2 and 20′ generally does not work well for the funds’ investors. In the past, you have questioned whether investors should pay ‘financial helpers’ as much as they do.  But ‘financial helpers’ can create tremendous value for those they ‘help.’ For instance, in nearly every annual letter you describe how valuable Charlie Munger’s advice and counsel has been to you and, in turn to the incredible rise in Berkshire’s value over time. Given that, would you be willing to pay the industry-standard ‘financial helper’ fee of 1%-on-assets to Charlie. Or would you perhaps even consider ‘2 and 20’ for him? (Click here for more details.)

Berkshire Hathaway owns Heinz. Steve Haberstroh is on the left.

Berkshire Hathaway has over 60 subsidiaries, including Benjamin Moore, Duracell, Dairy Queen, Fruit of the Loom, GEICO, Kraft-Heinz, Net Jets and See’s Candies.

The company also owns large stakes in publicly traded companies, including American Express, Apple, IBM, Delta, Apple and Wells Fargo.

In Omaha, the thousands of us can purchase everything from underwear to ice cream, car insurance to million-dollar diamond rings, all at shareholder discount. I saved nearly $1,000 on my car insurance with GEICO while there. But I also spent a penny or two.

The main attraction is Saturday. Shareholders descend upon the Century Link Sports Arena for a 7-hour Q&A with 86-year-old Warren and his 93-year-old co-chair, Charlie Munger. Folks lined up at 2 a.m. for the 8:30 start.

Steve Haberstroh and his wife Erin, in the Omaha arena.

Nearly 3 hours into the meeting, I expected Buffett would announce lunch time. But suddenly he said, ”The next question comes from shareholder Steve Haberstroh…”

First, my heart skipped a beat. Second, I could not tame my inner millennial. I grabbed my iPhone to record what came next.

The crowd chuckled at the “Would you consider paying Charlie…” punch line. Then Buffett responded.

The next 8 minutes were a blur.  I felt shock, pride and fear.

The fear came early in Buffett’s response. He said, “it’s just not a good question to ask.”

Despite that, his lengthy response indicated otherwise. He broached the subject again toward the end of the meeting, so maybe I was on to something.

Warren Buffett (right) and Charlie Munger.

His basic take was, indeed, he would pay Charlie 1% per year or “2 and 20,” but who wouldn’t? He likened the premise to asking if the Red Sox would like to go back and reverse their decision to trade Babe Ruth away to the Yankees.

Of course Munger is worth it. But Buffett also spent a good part of the response detailing his view that hedge funds, in aggregate, are not worth the fees they charge. He cited many examples and metaphors (including the value obstetricians provide), until Munger ended the discussion with, “I think you’ve beaten on them (hedge fund industry) enough!” (Click here for a video of the question, and Buffett’s full response.)

Just like that, my 8 minutes of fame was up. That is, until Bloomberg, the Wall Street, Fox Business — and now “068880” — picked up the story!

I will never forget the experience. And I will try to apply and adopt several of the lessons I learned during the weekend.

But I do have one bone to pick with the Oracle of Omaha. As I learned way back in Coleytown Elementary School: Mr. Buffett, there is no such thing as a bad question!

(For more takeaways, anecdotes and insights, email steve@castlekeepadvisors.com)

The End Of Reason

Age of Reason appears closed.

The popular store — a longtime destination for the kinds of kids’ items you will not find at Toys R Us — has a sale sign in front. But the interior is cleared out, and no one answered the phone when I called a few minutes ago.

They’ve struggled for a while. Online competition has been hard. The location — on the Post Road/Riverside Avenue “worst intersection in Connecticut” — has not helped.

But the small staff was unfailingly kind.

And very, very knowledgeable.

These days, those qualities are not high on enough shoppers’ lists.

(Hat tip: Jessica Newshel)

Staples Tuition Grants: The Story Behind The Tagline

Since 1943, Staples Tuition Grants has helped ensure that no Staples High School graduate is denied a college education because of financial need. The all-volunteer organization has awarded millions of dollars, and impacted thousands of lives.

Its recipients are grateful. So are its donors — many of whom contribute to funds named for teachers, classmates or family members who have died.

Some of the awardees at the 2015 Staples Tuition Grants ceremony.

But many other people who could help — or be helped by — STG stay uninvolved. The reason: Its name.

Some folks think “Staples Tuition Grants” help pay for tuition to the high school. Others wonder why a public school needs money in the first place.

When Lee Saveliff became donor co-chair 3 years ago, she wanted to spread the word that Staples tuition grants actually help graduating seniors and students already in college (and vocation schools).

She and co-chair Kate Andrews ramped up publicity. But they kept searching for new ways to send the message.

At last, they’ve got one. It’s spectacularly simple: A tagline.

From now on, the logo and all print material will say: “Staples Tuition Grants. Closing the college tuition gap for graduates since 1943.”

It’s simple. It’s clear.

And it’s rolling out already.

The tagline appears on publicity for a fundraising event. This Saturday (May 6, 10 a.m. to 6 p.m.), Indulge by Mersene will donate a portion of all profits to STG.

Mersene’s Railroad Place store is a fantastic place for unique items — including “06880”-themed pillows, apparel and more. They’re perfect for (hint, hint) graduation gifts.

Mersene is doing her part for Staples Tuition Grants.

And on Saturday, if customers ask what STG is, she just has to point to the new logo.

An “06880” pillow at Indulge by Mersene.

(Can’t make it to Indulge by Mersene on Saturday? You can still contribute! Click here, or mail a check to Staples Tuition Grants, PO Box 5159, Westport, CT 06881-5159.)

Last Cuppa For Davids Tea

Downtown shoppers: You’ve got 2 weeks to get your specialty teas and accessories.

Davids Tea — or, as they oddly prefer, DAVIDs TEA — will close its Main Street store on April 29.

According to alert “06880” reader Pat Pontoriero, they’re doing well here. However — surprise! — they’re not renewing the lease because of high rent.

Davids plans to diversify around Connecticut. Right now, their only other location in the state is at West Hartford’s Westfarms Mall.

The Westport store — between Brooks Brothers women’s store and Jack Wills — was only the 3rd US outlet for the Canadian-based chain. The first 2 were on Bleecker Street in New York, and Polk Street in San Francisco.

Now there are a few dozen.

But — in 2 weeks — one fewer.

A sign announcing the closing. (Photo/Pat Pontoriero)

New Hartford Taxes Could Hit Westport Hard

Governor Malloy is a Fairfield County guy. But a new series of taxes and surcharges proposed by the former Stamford mayor — and under serious consideration by state officials — could hit suburban towns like Westport far more than less affluent communities, and large cities.

Among the revenue-producing proposals:

  • State taxes — in addition to property taxes levied by towns — on homes greater than 6,000 square feet, and/or with “more than two garage bays,” as well as on cars and trucks whose purchase price exceeds $29,999
  • “Excess water use” surcharges, implemented for users who surpass statewide averages (presumably for activities like lawn watering and filling swimming pools)
  • A fee, paid monthly by employers, for any “au pair, nanny, or other childcare-giver employed directly by parents or guardians within a family.”

The draft legislation “may impact some citizens more than others,” Malloy acknowledges.

But, he says, “ultimately all of us in Connecticut bear some responsibility for helping raise the revenue this state desperately needs.”

For a full list of many more proposed taxes and surcharges — most of which could disproportionately target Westporters — click here.

Westporters who own homes like these — with swimming pools and (presumably) garages with more than 2 bays — would be hit with special taxes, under a proposed plan.

Town Throws Cold Water On Firefighters’ Negotiations

As politicians, taxpayers and other stakeholders debate next year’s town budget, much of the focus is on education. That’s no surprise: It comprises the bulk of our spending; it involves kids and buildings, and everyone has their own school experiences to draw on, good or bad.

But we pay for many other services. Most are less visible than education. Lots of those negotiations take place outside the public eye.

One of those involves firefighters’ benefits and pensions. The other day, Nick Marsan laid out their case. It’s got some surprising twists — like a proposal to take away death benefits for families of firefighters killed in the line of duty. There are also decreases in healthcare for firefighters and their families after retirement.

Nick Marsan (Photo/Laura Weiss for Hearst Connecticut Media)

The firefighters’ pension contract — which is different from the work contract — expired last summer. Marsan — president of the 64-member Westport Uniformed Firefighters Local 1081 — and his team met with town officials for a few negotiating sessions.

After what Marsan calls “a short process,” the town declared an impasse. The contract is now in the hands of state-appointed arbitrators.

The union president is disappointed. “We walked into negotiations expecting the town was not going to change anything for existing personnel,” Marsan says. “We thought we’d be talking about future hires only.” Instead, the town also included current firefighters in their pension proposals.

Marsan says the town “pulled the rug out from people who have been here 25, 30 years. They now might have to make hasty decisions to protect benefits they’ve worked all their careers to achieve. They could lose 6% of what they’d get if they retire now, and possibly cost-of-living benefits.”

The proposal to take away family benefits for a firefighter killed in action is particularly disheartening.

“I’m speaking for my brothers and sisters. I think we’re a class act,” Marsan says.

“We go above and beyond, to provide a service to the town. We do it with a smile. We’ll never not be there for residents. But I think this is an ideological attack on us.”

Marsan notes, “I have a master’s degree. I could be in the private sector. People don’t join the fire service to get rich. We come, we work hard, we sacrifice 30 years of our lives for the municipality.

“We leave with aches and pains. We’re 68% more susceptible to cancer than the general population. All we ask is continued support for our retirement, and the benefits we were promised.”

He knows that “pensions” is a political minefield these days. But, Marsan says, there are a number of misconceptions about firefighters’ benefits. He says that pensions are based on base salary only — not overtime. His members pay 10% of their salaries into the pension fund. Westport’s fund, he says, is “one of the best in the state.”

He continues: “I’m a big boy. I’ve been through a lot worse than this — I’ve been in combat overseas. But this is tough to watch, especially for guys who have been here a lot longer than I have, and will do anything for the town.”

He appreciates the “brand” of Westport, and recites its “jewels”: “incredible beaches, a beautiful library, great arts, a fantastic education system.”

But, he says, “people who buy homes here also know the fire and police services are top-notch.”

Marsan concludes, “This is a living, breathing town. We’re not looking to break the bank. We choose this profession, and we know we’ll spend a lot of time away from our families.

“I don’t live in a vacuum. I understand the town has responsibilities to taxpayers. But we are a human resource. We should be valued.

“We just want to be taken care of. If I die in the line of duty, I want to make sure my wife and kid are taken care of.”

An arbitration decision could be made by mid-May.