Spending like a millionaire

Columbia’s Mayor Bob Coble proposed a $1 million marketing budget by the city to hustle companies in hydrogen fuel research and development. Already the city spends about that many dollars working to book conferences and conventions. Jim Gambrell and his city office of economic development cost another $400,000, so Columbia spends about $2.5 million in direct and mass marketing.

Fatback’s payback

Barry “Fatback” Walker, member of Irmo Town Council and Columbia restaurateur, adequately attenuated his Mac’s on Main live orchestra sounds. Walker’s next door Main Street neighbor, a commercial business tenant, complained of late night music. Walker complied and collected back his $150 fine.

Real money at stake in

Coldstream zoning hearing

Now that Lake Murray Boulevard’s expansion to four lanes is looking real, land values along the additional traffic flow between Irmo and Lexington are well on the rise. A high–density zoning hearing concerning the connected Coldstream neighborhood is scheduled for August 23, 4:30 pm, in the Lexington County Administration Building, 212 South Lake Drive.

Cars over there doing better than over here

In April, after credit downgrades at General Motors and Ford, European auto stocks hit an annual low. Recently, though, the stocks jumped 23%, and the sector as a whole is up 20% this year. Meanwhile, Greenville’s BMW plant is doing well. The euro is stronger than the dollar, making the Greenville– made BMW’s more profitable as they sell in Europe.

Sport of kings

Consolidated investments restricted to privately held companies, businesses in a pre–initial–-public–offering stage or in a pre–buyout mode, are called private–equity funds. Such funds are generally restricted to the well to do, meaning people with minimum financial assets between $1.5 million and $25 million. Theoretically, the rich can afford to lose gracefully, especially the crowd with $25 million in the bank. The minimum investment, the entry level criterion, used to be as high as $10 million for the more rarefied funds. Recently announced private– equity funds are accepting $25,000 as their minimum entry requirement. Two warnings: (1) The private–equity fund managers collect up to 2.5% for annual management fees plus another 20% of all the profits, somewhat like hedge funds. (2) With lock–up periods as long as 12 years, the private– equity fund is also almost illiquid.

Harvard’s money can’t find a manager

Huge hedge funds and private–equity funds with billions invested can pay its top money managers $250 million in a good year. Harvard University’s endowment of $23 billion is run by the Harvard Management Company, and the company is losing its CEO. The CEO was paid $7.2 million last year, and alumni cried, “Too much!” His two top money managers were paid $25 million each, and the alumni cried, “Too much!” The problem in attracting a replacement CEO is the alumni’s cry of “Too much!” in the context of $250–million payouts. The typical private–equity fund’s management fee of 2.5% of Harvard’s managed endowment of $23 billion would come to $575 million. And, assuming a 10% gain, the fund’s 20% take of the profits would hit $460 million. In other words, if Harvard’s $23 billion were put into a private–equity fund or a hedge fund with a 10% gain for the year, the management fees would total a little more than $1 billion.

China does well, but its neighbors do, too

Worldwide quotas on garment exports ended on the first day of 2005, and China’s exports to the US increased 86% in the first five months, as was expected. In the meantime, Cambodia’s exports to the US were up 25%, Sri Lanka’s sales increased 20%, and Bangladesh’s rose 25%. Which, in the end, has a negative influence on textile producers in SC, where unemployment is 6.3% in a country of average unemployment of 5%.

Redeeming soles

This week Adidas was expected to pay about $4 billion for Reebok, giving Nike a run for its money. The US is the world’s biggest athletic–shoe market with half of the annual $33 billion spent globally on athletic shoes.

Ports

The SC State Ports Authority is reviewing 15 proposals to help the agency with its expansion plans. The Ports Authority is looking for assistance to finance and operate a three–berth terminal on the former Charleston Naval Base, and it may also develop a new port in Jasper County. Jasper County wants to build its own $450 million shipping terminal on the Savannah River, but the Ports Authority is suing Jasper County to stop the project. The SC State Supreme Court should hear opening arguments September 20. Ports, like accessible Interstates and local technical education campuses, attract industry.