BusinessDecember 21, 2015
Stories of the year: 10 business moves that made headlines in 2015
Hospitals make headlines Saint Francis Medical Center and SoutheastHEALTH each made headlines this year, Saint Francis with the opening of its new patient tower and Southeast by maintaining its revenue bond rating. Some financial troubles at SoutheastHEALTH came to light in 2014, and consequently the health system's bond rating was lowered. Through a number of measures intended to stop the downgrades, Southeast was able to maintain its B grade this fall...
__Hospitals make headlines__
Saint Francis Medical Center and SoutheastHEALTH each made headlines this year, Saint Francis with the opening of its new patient tower and Southeast by maintaining its revenue bond rating.
Some financial troubles at SoutheastHEALTH came to light in 2014, and consequently the health system's bond rating was lowered. Through a number of measures intended to stop the downgrades, Southeast was able to maintain its B grade this fall.
Overall, SoutheastHEALTH CEO Kenneth Bateman is encouraged by the system's performance. He called the hospital's turnaround plan "solid" and said it is "well on its way" to financial stability.
In another sign of improving financial health, Southeast gave raises in October for the first time in at least two fiscal years. Beginning with the first payroll period in October, employees saw a 2 percent increase, Bateman said, adding the plan is to have an increase in 2016 as well.
Across town at Saint Francis Medical Center, a new five-story patient tower opened July 1 on the hospital's south side, bringing the number of private licensed patient beds from 284 to 340.
The tower, the total cost of which was $127 million, is part of the Building on Excellence campaign, an element of the hospital system's 2011 strategic plan. Other elements of the Building on Excellence campaign include a new pavilion for women's and children's medical services on the facility's north side and a renovation of existing space.
The women's and children's tower has been projected to be completed on time and on budget in September 2016.
__The minimum-wage battle__
As of Jan. 1, 2015, the minimum wage in Missouri increased to $7.65 per hour. Since then, there have been efforts to again bump that wage at the state and national levels.
In June, three initiative petitions to increase Missouri's minimum wage were approved for circulation.
The petitions needed to be signed by at least 5 percent of legal voters in six of the state's eight congressional districts to make it onto a ballot.
All three proposed increasing the state's minimum wage, which adjusts to changes in cost of living. One petition seeks an increase of $1 per year until 2023, when it reaches $15 an hour. The other two would increase the minimum wage by $1 per year until it reaches $11 or $12.
Nationally, campaigns to raise the minimum wage as high as $15 have seen victories in cities including Seattle, Los Angeles and New York.
In Missouri, Kansas City passed an ordinance increasing the minimum wage to $13 by 2020, but it was later repealed. And a St. Louis judge in October struck down an ordinance that would have raised the city's minimum wage to $11 per hour by 2018.
The state minimum wage in effect for 2016 is $7.65 an hour.
__Mail processing delays__
The fate of the Cape Girardeau Processing and Distribution Center on Kell Farm Drive has been among dozens of United States Postal Service facilities with an uncertain future.
In late May, a spokesman from the postal service's Kansas City office said processing operations in Cape Girardeau, including originating and sending mail to final destinations, moved to St. Louis in April, though the president of the local union representing postal workers said the facility still is processing letters.
The facility had been marked to close when the postal service announced nationwide network consolidation plans in 2011. The closure later was canceled, and plans for the center changed to include only an end to processing operations, which apparently is being completed in stages and is done only partially in Cape Girardeau.
Greg Davidson, president of the American Postal Workers Union 4088, said in June that since the postal service keeps revising dates for shifting the processing operation, some workers, known as "postal support" or noncareer employees, were laid off in preparation for changes. Several others were moved to carrier jobs, he said, leaving remaining workers with a heavy workload that requires overtime.
During the past decade, the postal service has seen a drop of more than a quarter of its total mail volume, according to a postal service fact sheet, and a 50 percent decline in first-class letter volume.
__Noranda, Ameren negotiate rate cuts__
The story of Noranda's mission to get its Ameren Missouri rate cut began in mid-2014 after the Missouri Public Service Commission issued an order denying Noranda's request for a lower rate.
The New Madrid, Missouri, aluminum smelter and the utility have gone back and forth for months, with Noranda saying it would reduce its workforce and scale back infrastructure investments if it is not granted a reduction.
In April this year, the commission ordered Ameren to earn about $122 million annually in new revenue, adding about 6 percent to household bills, or about $6.50 to $7 a month.
In June, after the commission rejected St. Louis-based Ameren's request for a rehearing of the rate case, the utility filed notice it would challenge the commission's April order allowing Noranda to pay less for electricity at the New Madrid facility.
Noranda also said in June that Ameren plans to let its contract with the smelter expire in 2020. The move would require Noranda to find a new electricity supplier or renegotiate a new contract with Ameren.
Ameren said the decision to end its contract with Noranda had nothing to do with the smelter's rate cut.
The smelter is Ameren's largest customer and expects to save about $17 million to $25 million a year on power costs under the new rate. Other customers are expected to make up the difference, which amounts to just less than $1 a month for a residential ratepayer.
__Pepsi breaks ground at business park__
In June, Pepsi MidAmerica broke ground as the Greater Cape Girardeau Business Park's first tenant.
Pepsi MidAmerica, the country's largest privately held franchise company, announced plans in 2014 to build a $3.1 million facility at the city-owned business park. The facility is expected to create 74 jobs distributing beverage and food products.
Pepsi MidAmerica's 18-acre site will hold three buildings for offices, sales and transportation operations. The company is running an operations office in Cape Girardeau to handle human resources and hiring for the new center.
The company is headquartered in Marion, Illinois, and distributes Pepsi beverages, Starbucks Coffee, Gatorade and Frito Lay products.
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__MedAssets' personnel struggles and sale__
As recently as mid-September, MedAssets' Facebook page showed available job posts.
Following an expense-reduction program announced that same month, MedAssets experienced a net loss of $2.2 million in the third quarter of 2015. The loss was due to $5 million in restructuring charges related to the expense reduction program announced in September, and $10.3 million in noncash capitalized software impairments related to revenue cycle management products, according to information released in November by MedAssets.
Cost-reduction measures implemented in September included reducing the company's workforce by about 5 percent, or about 180 full-time positions, by the end of the year. Those layoffs are projected to save more than $20 million annually.
In October, an employee of the company's Cape Girardeau office, which employs about 140 people, said some employees here were laid off, but that the location wouldn't be dissolved entirely.
In November, it was announced Pamplona Capital Management would acquire MedAssets for $2.7 billion.
Health Service Corp. of America, which eventually became MedAssets, was founded by Earl Norman of Cape Girardeau in 1969. He sold it in 2001 to focus on his real estate business, Lorimont Place Ltd.
__Three Rivers College's new degrees and Sikeston Center__
Students at Three Rivers College now have a new avenue toward a four-year degree.
It was announced in June that Southeast Missouri State University, Central Methodist University and Hannibal-Lagrange University partnered with Three Rivers to offer bachelor's degrees at Three Rivers' Poplar Bluff Campus. The three universities will contribute $30,000 a year to create a new university center, plus $150 per course taught at Three Rivers' campus.
In addition, Three Rivers' new Sikeston, Missouri, facility opened for classes in January. The 36,000-square-foot facility includes 17 classrooms, four computer labs, two science labs and an auditorium/community meeting room that doubles as a storm shelter.
__Poplar Bluff's city manager troubles__
Poplar Bluff, Missouri, city manager Heath Kaplan was fired by the city council in May after information surfaced that he had acted on matters without asking the council's permission and had dealt with contractors from previous employment.
Kaplan came to Poplar Bluff in August 2014 from a position as finance and management services director for Muskegon County, Michigan. He held seven jobs in the 10 years before arriving in Poplar Bluff.
He served as the primary contact for the county's work with Information Systems Intelligence, arranging a no-bid purchase of about $3 million in computer equipment from the company.
Emails provided to the Daily American Republic newspaper appeared to show Kaplan offered work to a financial advisory group in Poplar Bluff several days before he officially signed on with the city.
Kaplan later advocated for Poplar Bluff council members to give First Southwest of Greenville, Texas, two significant contracts without taking competitive bids. The council agreed to one in October but declined another in April. Seeking bids for the second project saved taxpayers more than $125,000, the Daily American Republic reported.
Officials also did not seek bids before giving Information Systems Intelligence more than $3 million in city technology contracts.
The sheriff's department has been investigating illegal purchasing and bidding practices through the city manager's office.
Currently, the future of several city projects is in doubt. As of September, the capital improvement fund was expected to spend the next three years in the red, likely depleting much, if not all, of its $1.7 million cash reserve.
__Marquette for sale again after being auctioned earlier in the year__
After being sold at a foreclosure auction in January, the Marquette Tower still sits empty, awaiting its next tenants.
The Marquette Tower, which was placed on the National Register of Historic Places in 2002, was listed for sale in summer 2014 after its remaining tenants announced their intent to vacate in early fall.
In January, the buildings were included in a successor trustees sale, which the owner, G&S Holdings LLC, filed an injunction request to try to stop. G&S succeeded, temporarily, but the sale went ahead as planned later that month.
Brian Hayes, a representative of G&S Holdings, at the time said the company had gone through hardships in recent years as the former managing officer, Richard T. Gregg, has faced numerous criminal charges.
Gregg, a real estate developer from Springfield, Missouri, is in federal prison after being indicted by a grand jury for financial crimes, including embezzlement and bank, wire and bankruptcy fraud.
G&S purchased the Marquette Tower and Centre buildings in 2009 at 338 Broadway and 221 N. Fountain St. for between $3 million and $4 million, according to Southeast Missourian archives.
Great Southern Bank, which was the lien holder on the buildings and ordered the sale, purchased the building. Often in foreclosure sales, the note holder on a loan submits a bid, often matching the outstanding amount, which was the case with the Marquette properties.
The Marquette Tower and Centre are listed for sale by Realty Executives of Cape County. Amy Jones is the listing agent. The $2,390,000 list price for the property includes both buildings and parking lots, and is the lowest price requested for the property during the past few years it has been on the market.
__Ford and Sons takes over Cracraft-Miller Funeral Home__
Ford and Sons Funeral Home announced Jan. 30 it had purchased Cracraft-Miller Funeral Home in Jackson.
The purchase brought the number of Ford and Sons locations to four.
Both funeral homes have a long history of service in the Cape Girardeau-Jackson area. The 1920s-era furniture store/undertaking service that eventually became Cracraft-Miller Funeral Home in 1924 had roots in Jackson going back 90 years. Walter H. "Doc" Ford and Ross Young opened the Ford-Young Funeral Home in Cape Girardeau in 1949, which became Ford and Sons in 1953.
"Doc" Ford's son, Walter J. Ford; his son, Kevin Ford; and grandson, Josh Ford, now oversee the Ford and Sons funeral homes -- two in Cape Girardeau, one in Benton, Missouri, and the former Cracraft-Miller, 708 W. Main St. in Jackson, which they bought from longtime owner and third-generation funeral home director Mike Cracraft.
"We try to take care of people. We see them as our families. It's an honor to take care of families that we serve," Kevin Ford said in late February.
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