The year in business was one of highs and lows, of soaring stock markets and persistent long-term unemployment; of downtown revival and a deadly bombing that devastated the Back Bay; of rising property values and record homelessness. We asked readers to vote on the top local business stories of 2013. Here’s what they chose.
Bombing shutters businesses
After bombs exploded at the Boston Marathon finish line April 15, killing three and maiming hundreds, a dozen blocks of the Back Bay business district became the largest crime scene in the city’s history. More than 400 businesses were locked down for eight days during the investigation and cleanup, frozen in time at the moment the bombs went off: windows shattered, plates of food abandoned, carpets soaked with blood.
Losses in the Copley and Newbury Street area were estimated in the tens of millions of dollars. Among the most devastated businesses were Marathon Sports, where employees wrapped tourniquets around injured spectators, and the Charlesmark Hotel, its lobby splattered with blood. Dozens of diners, staff, and race watchers were injured at the Forum restaurant, which didn’t reopen until August.
Workers returned more than a week later and worked alongside biohazard crews to deal with the grisly aftermath, mopping bloody floors, throwing away rotten food, and gathering possessions left behind.
When businesses reopened on April 24, people flocked to the area to support them and their employees; One patron at Uno Chicago Grill left a $100 tip on a $15 tab with instructions to share it among the staff. Other help came from rent abatements, pro bono legal advice, and low-interest loans from the Small Business Administration.
Perhaps nowhere was the spirit of togetherness more evident than at the shuttered Lenox Hotel, where dozens of employees worked, unpaid, to house and feed investigators — with help from nearby hotels and restaurants that donated cases of bacon, vats of potato salad, and trays of sandwiches. The agents started leaving cash on the tables, telling managers to give the money to employees. The workers’ response: Donate it to the bombing victims instead.
— KATIE JOHNSTON
Since the recession ended more than four years ago, the Massachusetts economy recovered faster than the nation as whole, buoyed by the state’s technology, life sciences, and innovation industries. But that run appeared to come to an end in 2013.
After dipping to 6.4 percent in March, the state unemployment rate began to climb, even as the US rate declined. In November, the Massachusetts unemployment rate, 7.1 percent, surpassed the national average, 7 percent, for the first time since 2007.
What happened? Local economists put much of the blame on the automatic federal budget cuts known as sequestration. Those cuts have taken a disproportionate toll on Massachusetts because of the concentration of research institutions and defense contractors in the state that rely on federal grants and other funding.
The Donahue Institute at the University of Massachusetts estimated that sequestration cost the state some 14,000 jobs over the past year.
The slowing economy made it even harder to address one of the most intractable problems facing the state and nation: long-term unemployment. Some 40 percent of the state’s 250,000 unemployed residents have been looking for work for more than six months — many of them for more than a year.
Studies show that the longer people are unemployed the harder it is to find a job, no matter how hard they look. Long-term unemployment, studies say, is not only creating hardship and despair for the jobless but also undermining skills and productive capacity needed to support the economy in the future.
— ROBERT GAVIN
Red Sox owner buys Globe
Red Sox principal owner John W. Henry struck a deal in August to purchase The Boston Globe for $70 million in cash, ending 20 years of ownership by The New York Times Co. The sale closed in October.
Henry, 63, seemed an unlikely steward of New England’s largest news outlet. Neither a native of the region nor a veteran of the newspaper industry, he grew up the son of a soybean farmer in Illinois, Arkansas, and California, and went on to make his fortune as a commodities trader.
He has made Massachusetts his adopted home since leading the group that bought the Red Sox in 2002, overseeing three World Series championship teams, including one that ended an 86-year title drought in 2004.
Now he faces another challenge with the Globe as digital news sources splinter audiences and advertising for traditional media. The change in the business is well-illustrated by the Globe’s bargain basement price. The Times Co. paid $1.1 billion in 1993.
Henry has not announced any sweeping changes or claimed to know the secret to solving newspapers’ problems. Still, he declared confidently in an October op-ed published in the Globe that “the free availability of news and classifieds will not put an end to newspapers.”
Henry acknowledged that newspapers will have to shrink further if revenues continue to decline. But, he said, “Newspapers are going to compete against an avalanche of information that should make reliability, trust, and hard work that much more valuable for audiences.”
— CALLUM BORCHERS
Amazon collects state tax
Nov. 1 was as a day of triumph for brick-and-mortar retailers and mourning for online shoppers and sales tax evaders.
Amazon.com Inc. began collecting sales tax from Massachusetts residents in a deal negotiated a year earlier between the Patrick administration and the e-commerce king.
Under federal law, online merchants are required to collect sales tax if they have a physical presence in a state, a threshold Amazon crossed when it acquired Kiva Systems, a North Reading robot maker, in 2012, and opened an office in Cambridge. It then was only a matter of time until the online giant began collecting the 6.25 percent tax on items it sells and ships to Massachusetts residents, as it currently does in more than a dozen other states.
Local retailers applauded the deal, saying it stripped Amazon of an unfair advantage. The tax collection, although long overdue, put them on an even playing field with the largest Internet seller in the world just in time for the holiday season, local retailers said.
But their enthusiasm wasn’t shared by many residents, who had grown accustomed to tax-free online sales. They weren’t — and still aren’t — happy about coughing up the additional money.
The state Department of Revenue expects to pull in $36.7 million in sales tax from Amazon purchases before the fiscal year ends June 30.
— TARYN LUNA
Filene’s project revived
Crews and cranes returned to the former Filene’s property in downtown Boston this year to revive an ambitious project that literally left a hole in Downtown Crossing when it stalled during the last recession.
New York developer Millennium Partners, which took over the project last year, plans to build a 625-foot tower that will include luxury residential units, offices, and stores, including a Roche Bros. supermarket. Construction of the project, which will receive a $7.8 million tax break from the city, resumed in spring after Millennium signed a major office tenant.
The revival of the Filene’s project added to the signs that Downtown Crossing, known for chain retailers and going dark after the office workers leave, may yet become a desirable location. With real estate agents marketing the neighborhood as “Midtown,” buyers started snapping up condos going for seven figures.
At 45 Province, a luxury building a few blocks from the Filene’s site, several condos sold for about $4 million, among the top prices in the city. Millennium Place, a nearby high-end condominium project also developed by Millennium Partners, sold 90 percent of its 256 units within a year of opening a sales office, with units priced from more than $560,000 to $3.3 million. New restaurants also opened.
“We are now a 24-hour, seven-day-a-week neighborhood,” said Rosemarie Sansone, head of the downtown Business Improvement District, this past fall.
— DEIRDRE FERNANDES