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In Arizona desert, big farms are springing up

Wed, 2015-08-19 13:00

When Wayne and Glenda Erwin retired to a quiet, barren corner of the Mojave Desert in Arizona, farming wasn’t on their minds. Mostly it was stargazing and protecting their schnauzers from rattlesnakes.  

Wayne and Glenda Erwin 

Will Stone/KJZZ

“They know to keep their distance whenever there’s an encounter," Erwin says, as he walked down to the edge of his property and pointed to their small well house.

Like most people living in this sparsely populated area, about 100 miles south of Las Vegas, the Erwins depend on an aquifer for their drinking water. But recently the demand for groundwater — a valuable resource in this northwest region of Arizona near the city of Kingman — has shot up.

“You can see some green down there, which is alfalfa, I suspect," Erwin says. "That’s where we first started noticing the well drilling.”

On the horizon, tractors peel through clouds of dust. Red Lake Valley doesn’t exactly strike you as the land of plenty. But in the last couple years, thousands of acres have been converted into farmland and dozens of large-scale agricultural wells have been drilled.

All that pumping is making people around here very nervous.

“Whoever’s got that water," Erwin says, "they control our destiny here, they really do.”

Look at California’s Central Valley, Erwin says, where aquifers are falling due to generations of pumping. That isn’t the story here in Kingman. Historically, farming never took off, mainly because pulling water out of the ground was too expensive. But with the historic drought in nearby California and the high price of commodity crops, investors are casting their sights elsewhere.

“The water table level is going to drop," says Mohave County Supervisor Buster Johnson, "There’s just no doubt about that.”

Johnson says the surge in agriculture is jeopardizing the economy of this already water-scarce region. If farms continue to mine groundwater, Johnson believes businesses will be reluctant to locate in the county.

A view of the Erwins' well house outside Kingman, AZ. 

Will Stone/KJZZ

“It’s their right to take the water," he says of the new farms. "If it works out as a model plan for them, a business plan that they can make money, they can pull the water."

"When it runs out they can go back, or go on to the next place,” he says.

Unlike Phoenix or Tucson, where groundwater is regulated, most of rural Arizona is basically the Wild West, with no restrictions on how much groundwater growers can pump. Kingman depends on some of the same aquifers as these farms. Some experts estimate the city could run out of water in as soon as 50 years.

So who are these farmers?

It turns out mostly out-of-state investors, including Bob Saul. He’s with Wood Creek Capital, a Connecticut-based investment manager.

At a public meeting this year, he told local officials and residents that he "represents a group of investors, mostly public pension funds."

Saul says he has closely studied the aquifers and disagrees with the doom and gloom projections. The untouched soil has vast potential for all sorts of crops, he said, mostly to feed the ever-hungry California dairy industry.

"When you are investing for institutions, you really have to use best practices," Saul says. "We are not in the business of trying to jeopardize anybody’s aquifer or their land base.”

Saul described his operation, Stockton Hill Farms, as probably “the most exciting farmland project” in the country. He says the whole enterprise relies on growing “sustainably,” not how it’s been done in much of California. 

“Now we have a chance in Red Lake to start over again, with brand new soils, brand new water resource, brand new systems,” he says.

And he is not the only one getting in on the action. A Las Vegas developer is also farming huge tracts of land. Despite opposition from some residents and elected officials, not everyone in Mohave County is against the farms.

Emmett Sturgill 

Will Stone/KJZZ

Emmett Sturgill owns a ranch in the valley and says he’s happy about this burgeoning farming community.

“The alternative, in my view, would be houses, and house tops, and dogs, and four wheelers, and people cutting my fences,” he says.

Sturgill has heard all the rumors — fears the aquifer will go dry, that this is a covert attempt to seize the water or send it to Vegas — but that doesn’t jibe with what he has seen so far.

“It looks to me like they’re trying to put farms together and sell the farms to other farmers to make money,” he says.

Sturgill says he isn’t going to worry about the water. That is, unless his wells start going dry.

Inflation barely moving, despite the Fed's efforts

Wed, 2015-08-19 13:00

Numbers out today from the Labor Department say consumer prices are moving at a crawl, up only two-tenths of a percent in the last year, and growing at the slowest monthly pace in three months. That low inflation certainly isn’t from lack of trying by the Federal Reserve, which has been keeping interest rates low, pumping trillions of dollars into the economy.

“They’ve printed all this money, right? And people aren’t spending it," says Anna Rathbun, director of research at CBIZ Retirement Plan Services.  "And they can’t make people go out and spend.”

But she warns there’s a risk if the Fed raises rates too soon.

“Because if they raise rates while the inflationary pressure is not there, and it’s too low, it could slip down and become deflation, and when this happens the Fed runs out of ammunition," she says.

The Federal Reserve is already trying to fight off global pressures, says Gennadiy Goldberg of TD Securities.

“The fact that we have a global supply chain has actually allowed us to be very sensitive to inflation in other places in the world,” Goldberg says. He adds that those pressures from countries like China and Brazil are pushing inflation down here at home, along with other factors.

And remember, a little bit of inflation is supposed to be a good thing, says Ted Peters, CEO of Bluestone Financial Institutions Fund and a former member of the Federal Reserve of Philadelphia.

“You need a little bit of inflation to give companies pricing power and for them to be able to increase their prices," he says. "And if they increase their prices and make more money, then hopefully they pass that along to their employees as well.”

But today’s minutes from the July meeting of the Federal Reserve's Open Market Committee predict we won’t reach the Fed’s 2 percent inflation target anytime soon.  

Ashley Madison user information leaks

Wed, 2015-08-19 13:00

The website Ashley Madison promised its customers “discreet” affairs; a counter on its website boasts more than 38 million “anonymous users.” But many of those users aren’t quite anonymous anymore. The company confirmed a data breach last month and now hackers have publicly posted the oh-so-private information of many of Ashley Madison’s users.

John Kindervag, a security analyst with Forrester Research, says these kinds of hacks are almost inevitable, as there’s no shortage of targets.

“I don’t think cyber criminals are out there wondering, 'How will I ever get into certain companies?'” he says. “I think they’re just, like, overwhelmed, and go, ‘Well, we don’t have time to breach every company.’”

Michela Menting with ABI Research says, “I think it’s idealistic to say you can provide absolute privacy.”

She says that's a tough line to toe for companies that are premised upon privacy, such as Ashley Madison, but also less risqué businesses like health insurers, human resources departments, photo storage sites, etc.

“It’s maybe something [companies] don’t want to push forward: ‘It’s not a 100 percent secure. These are the risks. We can’t guarantee absolute protection,” Menting says. "They're difficult concepts to reconcile."

“These are illegitimate acts that have real consequences for innocent citizens who are simply going about their daily lives,” Ashley Madison said in a statement responding to the posting of user data. “Regardless, if it is your private pictures or your personal thoughts that have slipped into public distribution, no one has the right to pilfer and reveal that information to audiences in search of the lurid, the titillating, and the embarrassing.”

But just as credit cards and social security numbers have value, so does more sensitive information.

“It could be used to impersonate you; it could be used to embarrass you, to trick you into revealing even more information about yourself or scam you in some way,” says Susan Grant at the Consumer Federation of America.

Additionally, unlike a credit card number that may be easily replaced, Grant says, when personal information is leaked, there’s really no way to undo the damage. 

Tencent sends a $50 million direct message to Kik

Wed, 2015-08-19 12:51

Tencent, the company behind China's most popular messaging app WeChat, has invested $50 million in Kik, which is among the more popular messaging apps in the U.S. and Canada.

The move is an effort to enter the burgeoning North American market, which has been slower to adopt messaging apps, says Julie Ask of Forrester Research.

"This is just a giant chessboard that about 10 global players are trying to fill in," Ask says.

WeChat has about 400 million active users in China. It has become a platform for a wide variety of transactions, from online games, to e-commerce and mobile payments. It also connects users with brands to bring in advertising dollars. 

"The thing we're thinking about now is what you can build on top of chat,"  Kik's founder, Ted Livingston, said earlier this year at a public forum at the University of Waterloo in Canada.  "And really what we're looking at as a model for that is what's happening in China with WeChat."

Will Iran nuclear deal affect Persian businesses in L.A.?

Wed, 2015-08-19 12:38

The nuclear deal struck between Iran and the U.N. Security Council is being hotly debated in Congress. In Los Angeles, business people in the largest community of Iranians outside Iran are talking about what an end to sanctions might mean for their businesses.

Walk down Westwood Boulevard and you can duck into a little market and deli called Tochal, where Todd Khodadadi is the manager. "We're in the Persian Square," he says. "It's the middle of the Persian community. Most of the businesses here have a Persian sign and, as we live in the United States, we have a sign in English, too."

The Persian Square, or Tehrangeles as some locals call it, is an affluent part of the city, with jewelry shops and travel agencies at most intersections. There’s even a Bravo reality TV series, "Shahs of Sunset," that follows a set of Iranian-Americans in Los Angeles. Khodadadi worked in computer software when he lived in Iran 15 years ago. Now he makes a living selling Persian stuff to the Persian community. 

A view of the Persian Square, also known as "Tehrangeles." (Andy Uhler/Marketplace) 

A lot of his products used to come directly from Iran. Now, the market imports similar products from other countries in the region that aren’t under sanctions. Todd says he can taste the difference. “The best saffron in the world is from Iran," he says, starting a list. "The best pistachio in the whole world is from Iran. Mulberry – the best one is from Iran. We have similar kinds from Afghanistan, but I can tell you the best one is from Iran."

Next door is Damoka, a three-story warehouse stocked to the brim with Persian rugs. The store's owner, Alex Helmi, moved to Los Angeles from Tehran 40 years ago to go to school. After he got his degree, he took over the carpet business from his father. He says he hasn't been able to import Persian rugs from Iran since the tightening of sanctions in 2010.

Damoka owner Alex Helmi (Andy Uhler/Marketplace) 

While Todd gets the goods for his market by dealing with other countries, Alex gets around his import problems by selling secondhand carpets. The most expensive one in the warehouse will still run a quarter-million dollars. "The Persian carpets are the treasures of the world," he says. "It's like diamonds or art."

But, what about his market share? Won't more people get into the business if they can suddenly import these rugs? Helmi doesn't think so. "There are not going to be more people doing it, but the people who are already doing it will have an open supply," he explains. "You see, right now whatever we sell, we cannot replace. But when the doors open up, hopefully we can replace them."

And there might be another opportunity for Helmi if trade restrictions are lightened. "So the price right now, as we speak, inside Persia is much higher than inside the United States. We might consider selling our carpets there," he says.

Persian rugs surround Damoka's walls. (Andy Uhler/Marketplace) 

Further along Westwood, young Iranian-Americans were snapping selfies next to a shop that advertises Persian pizza. Many people in the area tell me this is exactly the sort of thing you might see walking the streets of Tehran. A bookshop on the corner, here since the early 1980s, houses the Ketab Corporation. 

The storefront of  Persian restaurant Cafe Glace. (Andy Uhler/Marketplace) 

The company’s founder, Bijan Khalili, proudly explains that Ketab was the first company to start translating and publishing titles in Persian in America. “This company is a publishing company. Publishes Iranian yellow pages, Iranian pocket yellow pages.” He says he's published more than 500 titles. The company also provides communication and information to the Iranian community free of charge.

He says he ended up here because he wasn't a friend of the revolution in 1979.

Just then, the phone rang. It's a call from Iran. He settles the call in Farsi and then continues chatting. He's been in Los Angeles for almost 40 years now, but as he gets up from his desk and shouts some instructions to his employees in Farsi, it’s pretty clear – being from Iran translates to more than just a language or a zip code.

PODCAST: Why you pay what you pay

Wed, 2015-08-19 03:00

The Fed minutes for July; insights into consumer prices; and a contractor in New Orleans tells us what it was like to rebuild after Hurricane Katrina.

Coffee? Tea? Chardonnay?

Wed, 2015-08-19 02:00

Starbucks already has the caffeine to rev you up in the mornings, but the coffee chain also wants to help you wind down later in the day. The company is gradually rolling out an evening menu, including beer, wine, and small plates available after 4 p.m. Think truffle mac and cheese and bacon-wrapped dates.

As of this week, some 70 stores across the country will carry the expanded menu.

This is a clever way to get people into the stores during the slower evening hours, says John Staszak, an analyst who covers Starbucks for Argus Research.

“After dinner, [customer traffic] starts to trail off,” he says. “People don’t want to become caffeinated at 9 p.m.”

However, the Starbucks customers I talked to are divided about whether they'd turn to their local barista for booze.

“Why not?” says Nicole Thomas, a medical research assistant in New York. She’s already a twice-a-day Starbucks customer and says she’d definitely add a visit for a glass of wine while waiting to meet friends after work.

But Jennifer Chien, who works in digital marketing, isn’t sold. She’ll visit Starbucks for her daily four shots of espresso, but not for an Italian prosecco or Californian chardonnay.

“There’s so many other bars in the city,” she says.

Starbucks says the rollout will continue at select locations only. 

China throws the Fed a curve ball

Wed, 2015-08-19 02:00

The Federal Reserve on Wednesday will release minutes from its July meeting, and investors will scour them for signs pointing to an interest rate hike this year.

One thing they won’t find in the minutes? Any mention of the devaluation of the Chinese yuan. That happened after the Fed meeting, but it could influence the timing of a rate increase. 

Before China’s devaluation last week, Wall Street was betting on a Fed interest rate hike at next month’s meeting. Now investors aren’t sure what the Fed will decide.

“The decision already was on a knife edge and could really, already have just depended on the votes of a couple of policy makers,” says Craig Erlam, a senior market analyst at Oanda.

Erlam expects those Fed policy makers to shy away from an interest rate increase next month if China devalues the yuan again. 

Why does the Chinese currency have the Fed all tied up in knots? Because when it’s devalued, the U.S. dollar gets stronger, making American exports more expensive. Nour Eldeen Al-Hammoury, chief market strategist at ADS Securities, says China was sending the Fed a message.

“Try not to raise rates at this time," he says. "Because if you do so, we might need to devalue our currency even more than that.”

That would make imports from China even cheaper, tamping down prices in the U.S. just as the Fed is trying to nudge inflation up.

The creative limitations of sampling

Wed, 2015-08-19 02:00

As part of a series about music technology called "Noise Makers," we're talking to musicians about their favorite noise-making device. For our last installment Marketplace Tech host Ben Johnson visited El-P's apartment studio in Brooklyn where they talked about his favorite keyboard sampler.

In his studio filled with select synthesizers, drum machines, and records, El-P explains why the Ensoniq EPS-16+ keyboard still stays at the figurative center: "I keep it here because it's been the most important thing for me to even become a musician or to even learn what I'm doing."

According to El-P — real name Jaime Meline — most rap producers start out with either a drum machine sampler or a keyboard sampler. With a sampler, the performer triggers pre-recorded sounds and edits them to create a composition. Rather than a short, percussion-based sample triggered by buttons on a drum machine sampler, the keyboard sampler is advantageous for El-P because it deals with longer iterations of sound.

He describes sampling as "using sound to create sound" and employs this technique to spawn otherworldly sounds. But El-P also acknowledges the hip-hop history behind this technique: "The creativity popped out of limitation. The idea of using two records to perpetuate a groove that was limitation."

Limitation leads to creative solutions in his own music: "I have a track, I know I need a kick and a snare, I can pretty easily get that. I know I want a bass line. Can I find a bass line? Or do I need to find a bass line? Can I find a horn that I can slow way down and make it sound bassy and take the place of that?"

This process requires a give-and-take relationship with the equipment.

"You sort of paint yourself into a corner," he says, "just as much you're working with trying to find something that fits an idea you're having. You also are working with responding to the thing you've put into the machine. And you're always making the choice between bending to the sound or trying your best to bend the sound to the thing you have in your head."

Ultimately, El-P finds this feedback productive and profound because it puts his musical genre in perspective, vis a vis the larger world of music. Through the keyboard sampler El-P says he has "an unlimited sound source. Every record from every genre that has ever been made but it all has to go through this one box."

"You stop thinking about them in terms of category," he says. "It doesn't matter to you that you got a snare from a rock record, a blip from a soul record, or a recording that you just made in your living room. It all loses its original meaning and it's there for you to manipulate and turn into something else."

Click the media player below for an extended interview with El-P about other rap producers that use the EPS-16+, Blade Runner and video game sounds, and the one guy in California who replaces El-P's equipment.

Till hack do us part

Wed, 2015-08-19 01:58
10 gigabytes

That's the size of the file containing the personal information of millions of Ashley Madison users made available as a BitTorrent download on Tuesday. The site, used to help organize affairs among people who are married, was recently attacked, with hackers threatening said release of information if it wasn't shut down. As reported by Ars Technica, the files included users' profile information, credit card numbers and email addresses.

70 stores

That's how many Starbucks now carry an evening menu with small plates and a selection of beer and wine. Think truffle mac and cheese and bacon-wrapped dates. The company wants to become not just the place where you start the morning, but also end the day.

442,000

That's how many children's night lights have been recalled by Ikea. As the New York Times writes, the cover can detach, causing risk of electrical shock. At least one instance has already been reported in Australia, where a child sustained a minor hand injury when trying to pull the night light out of an outlet.

$30 billion

That's how much companies lost last year due to theft, according to the National Retail Federation. Even behemoths like Wal-Mart have issues with stolen merchandise. On Tuesday, the company announced that some stores have or will add a new position called a "asset protection customer specialist;" essentially a person who stands by the exit and may ask to check a customer's receipt.

The highs and lows of streaming music

Tue, 2015-08-18 13:28

Dr. Dre released his new album, "Compton," exclusively on Apple Music. This is a big deal considering he hasn’t released a new album in nearly two decades.

Gerrick Kennedy from the Los Angeles Times says that this was a calculated move on Dr. Dre’s part.

“I think by releasing it the way that they did was they said ‘Hey we still want you to really pay for this album. Even if you’re streaming it, you’re paying for Apple Music,’” he says. 

Apple Music is a leader in the streaming industry, and it’s not likely that will change anytime soon, so it was a natural choice for Dr. Dre.

Kennedy says, “[Apple is] a beast in this industry. They’re always going to be able to fall back on that. They’re gonna be able to fall back on the fact that you’ll have someone like Drake say, ‘Well, I’m just gonna put my video out on Apple.’”

He says a lot of artists are upset over the various ways consumers can stream music these days, like Taylor Swift, who's notably taken a stand against unfair streaming practices. But, as Kennedy notes, when it comes to leverage in the industry, “not everybody is Taylor Swift.”

So when it comes to changing the equation for artists who provide music via the streaming services, Kennedy says, ”I don’t think anybody has the answer. I think that’s why the conversation is ongoing.” 

Wal-Mart's bottom line hurt by "shrinkage"

Tue, 2015-08-18 13:00

Wal-Mart’s a huge company. It’s always been big on efficiency.  But the behemoth announced Tuesday it’s also plagued with problems of petty theft.

“It just shows you can always be more efficient. And it’s something the company is very focused on,” says company spokesperson Brian Nick.

Wal-Mart has already taken steps to crack down on its five-finger discount problem. Nick says at some stores it’s added a new position — what the company calls an "asset protection customer specialist."

“Those associates are positioned at doors on the way out. And in certain situations will ask a customer to see a receipt,” he says.

According to the National Retail Federation, companies lost more than $30 billion last year due to theft. And they aren’t the only loser, says the Federation’s Bob Moraca.  

“Those losses at some point, just like all the other fixed costs of doing business, have to get passed on to the consumer,” he says.

Now, shrinkage is more than just theft and a way to make a cheap George Costanza joke – it’s also damaged goods and spoiled food. Brian Yarbrough, an analyst with Edward Jones, says sure, shrinkage is a fact of retail life, nothing he’s going to lose sleep over.

“It’s the least of my concerns of their current headwinds,” he says. “I’m more concerned about all the investments in labor and e-commerce.”

Yarbrough says Wal-Mart’s real test is getting more people to buy more stuff — not just thinking up ways to stop them from swiping it.  

Methane leaks are pollution — and waste

Tue, 2015-08-18 12:58

The Environmental Protection Agency proposed rules Tuesday that represent the agency's first crack at regulating methane emissions from the oil and gas industry.

Methane is the main component of natural gas, which is produced for its own sake and as a byproduct of oil production. Though methane makes up a small share of greenhouse gas emissions, it's much more powerful than carbon dioxide when it comes to trapping heat in the atmosphere.

According to Mark Brownstein at the Environmental Defense Fund, a lot of methane gets emitted—and wasted—across the oil and natural gas supply chain.

“There are leaks all across the system: at the well site, in the gathering and processing infrastructure, the pipes that take the gas from the wells and bring it to the compressors that send it across the country, the pipelines that send it across the country,” he says.

A report sponsored by Bernstein's group found higher than expected methane leaks at natural gas gathering and processing facilities. And those leaks are costly.

“The amount of methane we believe is being lost from gathering and processing has a value of, like, $400 million to producers,” says the study's lead author, Anthony Marchese, professor of mechanical engineering at Colorado State University.

It’s unclear how far the new EPA rules would go to curb methane emissions, since they apply to new and modified systems, not the existing oil and gas infrastructure.

Still, some industry groups are chafing at the proposed rules. Kathleen Sgamma with the Western Energy Alliance says producers are well aware it behooves them to limit emissions and capture natural gas where possible. 

“We don't need to be told that from a government agency,” she says. “That's in our DNA. Oil and natural gas companies are in the business of developing oil and natural gas for the purpose of making money. So where we can capture and sell a saleable product, it's what we're in business to do.”

But given the low price natural gas fetches these days, some producers might feel less compelled by those economic benefits.

7 Reasons NBCUniversal Wants a Share of BuzzFeed

Tue, 2015-08-18 12:58

Big media companies seem to be learning a key lesson when it comes to gabbing those elusive new media millennials: It never hurts to flash a little cash.

Case in point: the Comcast-owned NBCUniversal, which threw $200 million into Vox Media last week, and another $200 million at BuzzFeed today.

Here's a few reason's why Comcast might want a piece of the company — and a few more why it might not work:

1. Millennials. Duh. 2. "It’s a mass entertainment company that has been suffering an erosion of eyeballs."

 So says  independent media analyst Rebecca Leib.

And we're talking Millennial eyeballs. Valuable eyeballs.

3. A media company that doesn’t pair up with smart, young kids is basically asking to be roadkill.

Fox has invested in Vice. Verizon has Huff Po and Engaget. Disney bought up Maker Studios.

4. Why exert yourself?

"It’s easier to buy into something that’s already going, then to go to the kitchen and try to cook it up yourself,” said Poynter's media business analyst Rick Edmonds.

Why not buy the experience of the people who already know the recipe for online/sharable/snackable content?

5. The cool factor. 6. If you are hanging with the cool-kids, their friends might check you out.

Rebecca Leib says NBC might be able to leverage the partnership with Buzzfeed to bring more eyeballs to the Olympics.

7. Money, money, money.

Television advertising models aren’t what they used to be. Buzzfeed and Vox have native advertising down to a science.

Now there are reasons this could go south.

1. If you are NBC, you gotta wonder if you are buying into a bubble? MySpace anyone? 2. If you’re Buzzfeed…think of the optics.

Nothing says lame-o like cozying up with a corporate overlord.

Why wireless providers are ditching the two-year contract

Tue, 2015-08-18 12:49

Next time you go to your local purveyor of electronics and say you’d like to upgrade your aging smart phone because your two-year contract is up, you might be in for a surprise. Several wireless carriers are killing the two-year contract, which sounds like more freedom. But freedom from contracts also means freedom from the discounts on device sticker prices.

So what’s behind the shift?

Marketplace Tech host Ben Johnson thinks it’s about three things: adoption, technology and good old competition.

According to Pew Research, 65 percent of adults in the U.S. have a smart phone, which is double what it was just three years ago. “What all of this means for wireless carriers is that this pool of potential customers is much smaller than it used to be,” Johnson says.

On the technology side of things, phones just aren’t as groundbreaking as they used to be, he says; consumers don’t feel the need to upgrade every time Samsung or Apple releases a new phone because the devices just aren’t that much more exciting than what they already have.

“In a lot of ways this is actually a pretty good time to be a user and a customer when it comes to smart phones and smart phone service,” Johnson says.

This means that the device makers are having a tougher time than they were just a few years ago. But what does this mean for the average cell phone user’s bill?

“The wireless companies are going to show you a bill that’s actually pretty similar to the bill you’ve always had, but you’re going to be leasing the phone instead of locking yourself into this two-year contract,” Johnson says. 

Why the hotel business is doing so well right now

Tue, 2015-08-18 12:46

Life is sweet if you’re a hotel chain right now. While there’s a shortage of hotel rooms in the U.S., demand is up, so hotels can charge more.

The shortage is a leftover from the recession, when hotel construction plummeted. It’s still not up to pre-recession levels.

“We’re about 40 percent below the peak," says Bobby Bowers, senior vice president of operations at STR travel research. “It’s just been extremely low room-supply growth for a fairly extended period of time.”

But won’t demand for hotel rooms fall because of competition from upstarts like the sharing service Airbnb? Not according to Smedes Rose, a senior analyst at Citigroup.  He says the all-important business traveler is sticking with hotels.

“They’re not really flocking to Airbnb," he says. "Partly because there’s a convenience factor for hotels. There’s probably a liability factor — travel policies that companies have in place.” 

Hotels are also diversifying, with different brands catering to specific travelers. Surprise, surprise! The latest trend is hotels for millennials.  

Those feature “larger square footage for the lobby and the bar area," says Lauro Ferroni, head of hotel research at JLL, a commercial real estate service firm. "Of course, everything is wired.”

The big chains are also getting out of real estate, just managing or selling franchises instead of owning, sitting back and collecting fees, no matter what happens to supply and demand.

Campaign Jobs: Making politicians prettier

Tue, 2015-08-18 09:00

Kriss Blevens works quickly. She can have a man camera-ready in 45 seconds and a woman prepped in about three minutes.

Kriss Blevens

Courtesy Kriss Cosmetics

“I’ve got it down to a science, and I can work that swiftly if needed,” Blevens says.

But for Blevens, getting political candidates made up for the limelight requires more than just assembly line efficiency. She remembers an encounter with Hillary Clinton during the 2007 debate cycle that highlighted her creative touch.

“I was responsible as the head makeup artist for the debate. Her assistant held up a red lipstick and said, ‘Here’s her lipstick, this is what she wears,’” Blevens recalls.

The shade of lipstick was all wrong though. “So I just courageously looked at her assistant and said, ‘I’m not feeling it.’ And Hillary Clinton just lifted her face to me and said, ‘Just do what you feel, Kriss.’”

Blevens thinks her Clinton experience put her on the map a little bit when it comes to making politicians prettier.

But just because Blevens works for politicians doesn’t mean that her business is partisan.

“I freelance,” Blevens says, “and I do that so that I can work for all parties, all places, all networks.”

She’s even traveled nationally as the head makeup artist for CNN. And after almost three decades of working as a makeup artist, Blevens says she’s never put makeup where it’s not supposed to be.

“I love to live on the edge, so I really love to not put on a cape and have that guarantee that not one thing is going to drop,” she says.

Near Jamestown, Dominion power line battles history

Tue, 2015-08-18 08:55

The electric utility Dominion proposes to build a transmission power line over a stretch of the James River near historic Jamestown in southeastern Virginia.

Here is one:What would it look like? How intrusive? Not surprisingly, it depends whom you ask.

Dominion has created photo simulations suggesting views of the river would be minimally obstructed.

Courtesy: Dominion Virginia Power

Opponents of the power line at the National Trust for Historic Preservation have prepared a 3-D simulation suggesting a far more dramatic intrusion.

In a way, this fight is a story of two companies separated by about 400 years. In 1607, a private enterprise known as the Virginia Company crossed the Atlantic and sailed up a river that settlers named the James River. Jamestown became England’s first long-term settlement in America (star social studies students among you will recall an earlier settlement off today's North Carolina became the Lost Colony).

Like my fourth-grader, you’ve likely heard of the main players in this story: Captain John Smith, the House of Burgesses, Pocahontas, John Rolfe, the Powhatan tribe. During my visit, on-site archaeologist Danny Schmidt happened to be speaking with a group of teenage visitors. He emphasized the Virginia Company began as a business startup.

A gravesite in Historic Jamestown.

Scott Tong/Marketplace

In a way, the old story of Jamestown is new history: archaeologists are furiously digging up new artifacts every day, and in the process revising the assumed narrative of life in the settlement. Check out this cool 3D simulation of one recent find.

Central to this story is the stretch of the James River by the historic site. Congress designated it a national historic trail. But the Virginia Company’s story is endangered by the Dominion Company, the country’s third-largest utility. Dominion wants to build its transmission line about 3.5 miles from Jamestown Island.

Why? Dominion plans to retire two coal-fired power plants on the peninsula where Jamestown is located to adhere to Environmental Protection Agency pollution rules.

Nearly 600,000 people use power on this peninsula, which is home to Colonial Williamsburg, Busch Gardens, the historic Yorktown Battlefield, two universities and the naval shipyard at Newport News. To replace energy generated by these plants and maintain a reliable source of power — i.e., no blackouts — Dominion plans to deliver electricity via a high-voltage transmission line

Are there viable alternatives to this line? This is the essence of the fight. Dominion maintains it has considered all reasonable options, and this is the most technically and financially feasible. Opponents disagree. Just about every assertion in this debate is challenged, the same way every bullet fired by a Jamestown settler was returned by a Powhatan arrow. A few examples:

Danny Schmidt speaks with visitors.

Scott Tong/Marketplace

When will the coal plants really close?

National Trust for Historic Preservation:It could be well after that, because a recent Supreme Court ruling kicked back to a lower court the EPA pollution regulation in question.Dominion: Soon, as in summer 2017, due to EPA regulations. This risks blackouts on high-use days.

Are there nonwire alternatives to this transmission line?


Dominion:
None of the above comes close to the scale of energy required.Save the James: Many emerging options exist to help meet electricity demand: renewable energy, small local power plants, microgrids, negotiating with big users to cut their demand at peak hours. The role of these has not been seriously explored.

 

Courtesy:Virginia State Corporation Commission

 

Can you bury the power line underwater?

Dominion: The cost is four times higher. And the most technically feasible underwater line would carry only 230 kilovolts (kV), which is not enough power to meet long-term demand. So the proposed 500 kV line over water is the best option.

Save the James: How about two 230 kV lines? Or a 345 kV line? As for the cost, if you spread it out over lots of people and time, it amounts to a few cents per bill.

Should the permitting authorities take more time to study the issue?

Dominion: There’s no time left. The coal plants are retiring soon, and without a transmission line, the peninsula risks blackouts. 

National Trust: The Army Corps of Engineers, the permitting authority, should conduct an environmental impact statement in adherence with federal laws. If Dominion were in such a hurry, it should have proposed the line earlier.

 

One thing to keep in mind: Financial analysts consider transmission lines good business strategy for Dominion. And this $42 billion company is politically powerful. It happens to be the biggest political donor in Virginia, a state with no donor limits.

Finally, some perspective on the scale of the proposed transmission lines’ towers over the James River. Four of the 17 towers would rise as tall as the Statue of Liberty. These towers about 15 miles downstream are about that high.

Transmission line towers at James River Bridge in Newport News, Virginia.

Scott Tong/Marketplace

PODCAST: Elysian Fields

Tue, 2015-08-18 03:00

More on the plummet that happened towards the end of China's trading day; the FDA considers viagra for women; and a check-in on businesses in New Orleans ten years after the flood.

The connection between the market and FDA

Tue, 2015-08-18 02:00

The FDA is expected to rule Tuesday on what’s come to be called Viagra for women, a drug that purports to enhance a woman’s sexual desire.  

The FDA has twice previously rejected the application on grounds that it carries modest benefits and potentially significant side effects, like lowering blood pressure and fainting. Risk is heightened when using other medications including birth control. But an advisory committee has endorsed the pill, which, yes, is pink.

Groups including the National Organization for Women (NOW) have thrown their weight behind a campaign called "Even the Score." That effort has financial support from Sprout Pharmaceuticals, the company manufacturing the drug which recently flew a patient out to testify in front of the FDA.

Those moves have critics, including Dr. Adriane Fugh-Berman, a professor at Georgetown.

“This may set a precedent of risky drugs be approved based on public relations campaigns, rather than science,” she says.

The pharmaceutical industry certainly has used a patient’s story to make money before this. Emory’s David Howard says what’s interesting is how important that story has become.

“There is a movement in medicine away from top-down paternalism,” he says. “There is a push to listen to the patient and let them dictate the terms on which a treatment is going to be judged.”

Whether the pill stimulates anyone’s libido, if this drug takes off, it could drive home the point there’s a market for woman who want to improve their sex lives; a market that’s largely been ignored.

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