Mass. panel to study black market tobacco trade

BOSTON — A special commission charged with studying the economic fallout of the illegal cigarette and tobacco trade in Massachusetts is preparing to hold its first meeting.

The commission was created by state lawmakers to determine the magnitude of the black market tobacco trade.

The nine-member panel, which will meet Monday, is also expected to recommend legislation, enforcement actions and penalties. One goal of the commission is to help strengthen the collection of tobacco excise and sales taxes.

Revenue Commissioner Amy Pitter said tobacco smuggling is a growing problem in Massachusetts and other states and can be found at the local, state and international levels

Pitter said the commission will also look at how other states combat counterfeit tax stamps and underground distribution rings.

The commission is expected to make its recommendations next March.

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Harvard Square's iconic Upstairs to close

For more than three decades, it has been a fixture in Harvard Square, first as UpStairs at the Pudding and, since 2002, as UpStairs on the Square — in both its incarnations, a place that drew celebrities and locals alike for its eclectic menu and its Alice in Wonderland decor.

But on New Year's Eve, the iconic restaurant that Mary-Catherine Deibel and Deborah Hughes founded will close its doors for the last time after a grand finale fete with dancing and champagne to celebrate UpStairs' storied history.

"It's been a long and fruitful 31 years," Deibel said last night. "Now it's pedal to the metal so we have a great three months."

News that their landlord has decided to sell the building at 91 Winthrop St. came as a shock to those who have come to see it as a local landmark.

The restaurant opened in 1982 for Harvard's Hasting Pudding Woman of the Year, Ella Fitzgerald, and went on to host other celebrities over the years, including Bono, Tom Cruise, Julia Roberts and James Franco.

"The restaurant has always been beautiful and fun, with its zebra prints, hot pink walls and chandeliers," said Denise Jillson, executive director of the Harvard Square Business Association. "It could make something as simple as a roast chicken dinner memorable. It will be sorely missed."

UpStairs had a particular appeal for young professional women who could meet there after work for drinks, Jillson said. Her personal favorite was the Jackie O'.

"I have no idea what was in it," she said. "I can only tell you that it was very effective."

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RI sales tax panel to hear from Boston researcher

PROVIDENCE, R.I. — A special task force examining ways to change Rhode Island's sales tax is set to hear from a Boston-based researcher who studies how sales taxes affect the economy.

The sales tax commission is scheduled to meet Monday at the Statehouse for a presentation from Paul Bachman, director of research at the Beacon Hill Institute, which is a research group affiliated with Suffolk University in Boston.

Bachman has studied how changes to sales tax rates affect local economies.

The commission was formed after a lawmaker called for the repeal of the 7 percent tax. While that idea is unlikely to pass, lawmakers say it's time for a broader look at ways to make the tax less of a burden on consumers and businesses.

The commission includes lawmakers and business owners.

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ABC and Univision's love child bursts to life

MIAMI — The long-awaited DNA exchange between ABC and Univision emerges from the test tube this month, aiming to stretch the limits of traditional network programming. The English-language television network, called Fusion, will target millennial Hispanics and their BFFs as it attempts to capitalize on a generation for which cultural fusion is the norm and digital media is king.

The network will provide something of a grab bag: a mix of hard news, commentary, sports and irreverence aimed at 16- to 30-year-olds. Sure, there will be nightly news programs, but also an animated puppet news and entertainment show by David Javerbaum, former head writer of "The Daily Show with Jon Stewart." Think Comedy Central, the hipster online magazine Vice.com, ABC and Univision, all in one.

"Not everyone will get it; and that's sort of the point," Univision News President and now Fusion CEO Isaac Lee wrote in a memo to staff earlier this month.

To "get" what Fusion is attempting, it helps to tour its home and meet the players:

THE STARTUP

The green and blue mood-lighting of the warehouse-turned-news hub known as Newsport suggests Miami Beach club over newsroom. Like millennials who can't afford to move out on their own, Fusion shares the cavernous space with Spanish-language parent Univision News. Senior staff members gather for brainstorming sessions in brightly painted and glass-walled rooms overlooking the newsroom.

On a recent afternoon, Lee strode across the floor like the head of a Silicon Valley startup, sketching flow charts of Fusion's evolution. As he talked, one millennial staffer wrestled a ping pong ball from the mouth of Chocolate, Lee's brown Labrador. Others chimed in on the essence of the network that goes live Oct. 28.

As befits a project geared to a generation used to downloading the latest mobile update, Fusion has been beta testing in plain view. In 2011, Lee brought together a group of recent journalism school graduates to work on an English-language Tumblr for Univision. The young journalists created original news, curated stories and produced short documentaries.

Lee learned what worked (humor) and what didn't (direct Univision translations). The approach bought him time to win over holdouts at Univision, a company that built its brand on Spanish-language affinity.

THE PROS

"I hate ties. They are really useless. Why do I have to have a piece of cloth hanging from my neck every day?" fumed Jorge Ramos, the silver-haired veteran Univision anchor with piercing blue eyes, one of a handful of senior journalists to join Fusion.

As Ramos jogged up the stairs, he yanked the offending garment out of his bag and held it up to his neck. "This is my Univision uniform," he said, then dropped his arm and grinned, "and this is Fusion."

Ramos, who co-hosts Univision's popular nightly newscast with Maria Elena Salinas, will pull double duty. He frankly acknowledges his own millennial kids don't watch his Univision newscast, or any other. He is also blunt about the limits of his native language.

"It is very frustrating many times to have a great interview on the Sunday news story, and no one (in Washington) is paying attention simply because it's in Spanish," he said.

Ramos doesn't plan to dumb things down. He does plan to mention Mexico — the country sharing 2,000 miles of the United States' southern border — almost as much as he mentions Syria. One of his first interviews is with Maricopa County, Ariz., Sheriff Joe Arpaio, who earned attention and a U.S. Department of Justice investigation for his aggressive attempts to crack down on illegal immigration.

THE FEMALE FACTOR

Alicia Menendez describes her new Fusion show as a mix of sex, money and politics.

Isn't everything?

"Yes, but most people won't admit it," Menendez shot back. The 30-year-old gained early exposure to politics as the daughter of U.S. Sen. Robert Menendez, D-N.J. She's anchored programs for HuffPost Live and Sirius XM but says Fusion is the first network to speak to her generation.

Her first show: millennials' lack of monogamy and how self-inflicted singledom affects home purchasing.

Fusion describes itself as "Championing a smart, diverse and inclusive America." But Menendez's show notwithstanding, when it comes to gender, Fusion resembles Silicon Valley startups more than its tagline: it's stocked with talented women on the news floor but has virtually none on its senior creative and executive team.

THE PARTNERSHIP

ABC News President Ben Sherwood compares Fusion to the web of highways California built back in the 1950s.

"No one could understand why you would build a freeway with six lanes. But the visionaries of California knew that if you built these freeways, people would come," he said.

Like California's freeway system, the plan is to scale up, starting with 20 million homes and expanding to 60 million in the next few years.

It was a logical move for the Disney-owned ABC, which has no cable news counterpart and provides Fusion broad distribution through its cable and satellite contracts. It can also share news content with minimal investment. ABC has sent staff to work with Fusion on content and production, and Fusion's vice-president of news Mark Lima came from ABC's "Nightline."

For Univision, Fusion poses a greater risk, but the company has the financial wherewithal to weather initial bumps. Its prime-time broadcasts ruled July sweeps ahead of the other four major networks among coveted 19-49 viewers. In Fusion, it's looking ahead to the second- and third-generation Latinos who get their news in English. Nearly two-thirds of the 52 million Hispanics living in the U.S. are native born.

Still, the experiment hasn't been without awkward moments. As Fusion prepared to go live, top staffers were quoted sniping about the ages of their older counterparts at Univision.

THE COMPETITION

Fusion has competitors. Participant Media launched Pivot TV this summer, promoting social advocacy among millennials. Sean Combs' new music focused Revolt TV debut's this month.

Still, Morley Winograd, a University of Southern California fellow and author of books on media and millennials, says Fusion has the right ingredients for success and a huge potential market for advertisers.

"The two earliest cable channels specifically targeted at millennials were the ABC Family Channel and the Disney Channel," Winograd said. "It's not surprising then that a 'Fusion' of Univision and ABC decided upon Latino millennials as their market. Each side of the partnership knows a great deal about one half of that audience combination."

Lee insists Fusion will take some time to find its footing. MSNBC took years to settle on its left-of-center brand. Fox News Channel wasn't the nation's most popular cable news network out of the gate.

"Nobody's doing what we are doing," he said, "so there's one way to find out what works and what doesn't."

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Growing Cape OysterFest charges fee for first time

WELLFLEET, Mass — The Wellfleet OysterFest has a new feature this year that might be unwelcome: People have to pay to get in.

The Cape Cod Times reports (http://bit.ly/1atTl36) that for the first time ever people will be charged to get into the festival Saturday and Sunday. The cost for anyone over 12 is $5 or $8 for a two-day pass.

The festival manager says the money will help improve safety and support future festivals.

The Wellfleet OysterFest started as a small hometown event in 2002, but it's grown over the years, along with the costs for sanitation, insurance and paid staff. Attendance recently reached 25,000 over its two-day span, a size that the Times reports has turned off some locals.

The event is sponsored by the Shellfish Promotion and Tasting nonprofit in Wellfleet.

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Boston hospitals get $12M NIH grant

Two local hospitals are using a federal grant to form the Boston Biomedical Innovation Center, the latest effort by nonprofit hospitals to play a role in transforming medical research into commercially viable products.

The seven-year, $12 million grant — one of three nationwide from the National Institutes of Health — will ensure that scientific advances at Brigham and Women's Hospital and Massachusetts General Hospital will "rapidly lead to new drugs, medical devices and diagnostic tools that can help improve — and even save — the lives of patients everywhere," said Dr. Anne Klibanski, chief academic officer at Partners HealthCare.

"The purpose is to help bridge the chasm in realizing the benefits of many discoveries," said Dr. Joseph Loscalzo, chairman of the department of medicine at Brigham and Women's and a Harvard Medical School professor.

As government funding grows more difficult to secure, hospitals are turning to industry to establish joint projects, said Michael Pistone of the Center for Technology Commercialization at Cincinnati Children's Hospital, which spends $1 million annually to advance research to the point of commercial viability.

Boston Children's Hospital has joined with a California diagnostics equipment maker to form a company to develop tests for pediatric diseases. And, Mass. General is teaming with AstraZeneca to find the best matches between patients and treatments.

"It's obvious you need to have partnerships in order to make medical progress," said Edward Abrahams, president of the Personalized Medicine Coalition, an education and advocacy group. "We need to break down the barriers."

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HSBC unit ordered to pay $2.46B, plans to appeal

NEW YORK — A division of Europe's HSBC bank has been ordered to pay about $2.46 billion in a class action lawsuit claiming that it violated federal securities laws.

The lawsuit named consumer mortgage lender Household International Inc., which is now HSBC Finance Corp., and former executives William Aldinger, David Schoenholz and Gary Gilmer. It claimed that the company fraudulently misled investors about its predatory lending practices, the quality of its home loans and its financial accounting from March 23, 2001 through Oct. 11, 2002. HSBC acquired Household International in 2003. The acquisition made HSBC the biggest subprime lender in the U.S. at the time, but resulted in billions of losses to HSBC leading up to the financial crisis of 2008.

Lawyers for the plaintiffs said that the judgment, which includes $1.48 billion in damages and nearly $1 billion in prejudgment interest, was the biggest ever following a securities fraud class action trial. HSBC Holdings PLC, Europe's biggest bank by market value, said in a statement on Friday that it will appeal, noting that it was "the next step in an 11-year-old case and we believe we have a strong argument."

The judgment "shows that the fraud committed by Household International and the individual defendant officers will not go unpunished, and we look forward to having the judgment affirmed on appeal," James Glickenhaus of Glickenhaus & Co., one of the three lead plaintiffs appointed by the court in 2002 to represent the class, said in a statement.

A jury in Chicago found in favor of the plaintiffs in May 2009. In the final judgment entered in the U.S. District Court Northern District of Illinois Eastern Division on Thursday, Household International, Aldinger, and Schoenholz are held jointly and severally liable for the judgment. Gilmer is held severally liable for 10 percent of the judgment.

HSBC's U.S. shares shed 32 cents to $54.84 in morning trading. They are up less than 2 percent for the year.

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Facebook to profit, but teens pay cost

Facebook has just made it a bit easier for members of Generation TMI to mess up their lives.

Mark Zuckerberg & Co. 
announced Tuesday that teens are now allowed to post public updates and photos to their Facebook profiles. This is due to two undeniable truths: It's better for business, and Facebook doesn't give a hoot about your kids, their future or their 
safety.

Teens are major consumers, with their disposable income and susceptibility to marketing and fads. Advertisers want greater access to them, and Facebook was reeling from recent research showing the current generation is starting to view the service as unhip. But make no mistake: 94 percent of teens on social media have a Facebook account, according to the Pew Research Center. And an estimated 5.6 million children under 13 have lied about their date of birth to get around the site's age requirement and sign up.

Though cyberbullying is a huge issue, Facebook's newly relaxed privacy rules are more likely to impact things like college acceptance and employment. University admissions offices now admit to checking social media profiles of prospective students. Like it or not, employers have a huge interest in the social media footprint of 
employees, too.

The American Academy of 
Pediatrics now warns that parents should talk to their kids about social media just as they should talk to their kids about drugs. That's not as hyperbolic as it sounds. The part of our brains that anticipates the consequences of our behavior isn't fully developed for women until age 25 and men until age 30. The notion of teens going down a rabbit hole of bad social media should be treated with the same vigilance as drug addiction.

We need to teach kids in elementary school that when they post something on the Internet, they are adding to a body of research that will become their memoir. Every status update, tweet and comment by a friend is a sentence in your yet-to-be-written biography. Evidence suggests this is literally true. Decades from now, biographers won't be sifting through attic boxes for handwritten letters and interviewing elders, they'll have programs that automatically crawl through social media archives and Internet 
archives.

Social media is akin to the greatest generation gap since rock 'n' roll. The only difference is, it's got actual potential for harm, and Facebook just amplified the risk.

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The Ticker

Boston Scientific to pay $30M to feds

The Justice Department said Boston Scientific Corp. and its Guidant subsidiaries will pay $30 million to settle allegations that Guidant knowingly sold defective heart devices that health care facilities implanted in Medicare patients from 2002 to 2005.

Boston Scientific is headquartered in Natick and acquired Guidant in 2006.

The Justice Department said that while Guidant took corrective action to fix the defects, the company continued selling its remaining stock of defective versions of the implantable defibrillators used in patients at risk of cardiac arrest due to an irregular heartbeat.

Google shares reach all-time high

Google's shares soared to new heights yesterday after the company reported sales and profit that topped Wall Street expectations.

The stock jumped nearly 8 percent in after-hours trading, near $955.50 a share — well above the stock's all-time high of $928 set in July.

Sales from both Google-owned sites and its network of partner sites both jumped by almost a quarter over the year. Search makes up 92 percent of Google's business.

Sovereign Bank becomes Santander

The third largest bank in Massachusetts changed its name yesterday.

Sovereign Bank will be known as Santander, one of the nation's 25 largest retail banks. It operates mostly in the Northeast and Mid-Atlantic. It has 700 branches in the United States.

The bank is part of the Spanish banking firm the Santander Group, which operates in countries across the globe including in Europe, South and North America.

THE OUTLOOK

Today

• Conference Board releases leading indicators for September.
• General Electric Co. reports quarterly financial results before the market opens.
• Morgan Stanley reports quarterly financial results before the market opens.

THE SHUFFLE

• ProEx, a physical therapist-owned private practice specializing in orthopedics, spine and sports medicine, has announced Elizabeth "Liz" Kilzi has been named an exercise technician, operating from its Boston location in the Financial District.
• Rodman & Rodman, P.C., an independent accounting and tax firm with a specialty practice in clean technology and renewable energy, has named Janine L. O'Connor as an accountant. She will provide accounting, tax and financial statement preparation services to Rodman & Rodman's business clients and individuals throughout New England.

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Downtown evolves as a neighborhood

No longer do the sidewalks roll up after 6 p.m. in the Financial District.

The Hub will see twice the number of new housing units during this cycle than it did last cycle. And it is well-positioned to absorb the housing spurt, as there is a shift toward more urban living.

Accompanying the new housing are more amenity retail options and a different vibe in office tenancy in Downtown Crossing and the Financial District — an area we now just call downtown.

Greg Vasil, CEO of the Greater Boston Real Estate Board, said the lines for the two districts were artificially drawn — one a retail area and the other an office area — but now it is all one.

"The Downtown Crossing area was always the place to shop, and as a natural progression over time, the area is going from a retail district to a mixed-use district," Vasil said. "Downtown Crossing is on its way to becoming another 'living district,' where you have the amenity retail, such as the Walgreens superstore, Roche Brothers grocery store, as well as more fitness centers, retail and restaurants."

David Begelfer, CEO of NAIOP-Massachusetts, a commercial real estate association, said Boston has evolved, both commercially and residentially.

"It is no longer the sense if you are looking for residential you look only to the Back Bay or the South End, you are looking at options that go across the city," Begelfer said. "Same thing goes for office, it is no longer just the Financial District; it is Back Bay, the Seaport, Allston, Brighton and Fenway that are showing very strong life for office development, not a usual situation."

Over the past 13 years, the topography of Greater Boston's commercial tenant landscape has shifted significantly.

To keep talent, companies are moving into the city. Many of these non-financial companies want to be in an urban location with some street vibe to it, said Peter Farnum, senior managing director and principal at Cassidy Turley.

"PayPal, with its move into the fifth and sixth floors of One International Place, and Technip, with its relocation from East Cambridge to One Financial Center, are just two of the recent technology and innovation firms to move into the downtown market," Farnum said.

A significant step forward in changing the face of downtown is Millennium Partners' $630 million complex of new offices, stores and 450 luxury residences on the former Filene's site at the corner of Washington and Summer streets.

Advertising giant Arnold Worldwide and its sister agency, Havas Media, will occupy about 125,000 square feet in the project.

Several other housing developments already are underway in the downtown, including the recently opened 256-unit condo building at Millennium Place and a 381-unit apartment tower by Kensington Investment on Washington Street.

With its AAA bond rating, Boston is on its way to becoming a world class city.

Jennifer Athas is a licensed real estate broker. Follow her on Twitter @Jenathas.

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