Consumers boost economy

The U.S. economy appears to be gaining momentum and could be poised for expansion this year as experts predict strong growth amid an improving job market.

"We seem to be on track now," said Christine Armstrong, senior vice president at Morgan Stanley. "We're where we should be right now."

The Commerce Department yesterday estimated the economy grew at 
2.6 percent from October to December, up from its previous estimate of 
2.4 percent. Fueling the gain was the fastest consumer spending, which accounts for 70 percent of the nation's economy, for any quarter in the past three years.

"Going forward, in order for consumers to maintain a hardy spending level, there will need to be organic support from job and income growth, the catalyst to which is business investment," said Lindsey Piegza, chief economist for Sterne Agee.

Experts are optimistic about growth this year. The National Association for Business Economics predicts the economy will grow 3.1 percent this year, far higher than the lackluster 1.9 percent gain in 2013, which would be the highest rate since 2005.

"We are looking for progressively faster growth as the year goes on," said Doug Handler, chief U.S. economist at IHS Global Insight.

Cold weather has hampered growth and spending in recent months, with everyone from UPS to Macy's blaming poor weather for disappointing financial results. Still, Armstrong said the markets have handled various bumps in the road well.

"We're up or down a few hundred points and then keep on chugging," she said.

Initial unemployment claims, a sign of firings and layoffs, dropped by 10,000 to 311,000, the fewest since November, the Labor Department said yesterday.

In February, employers added 175,000 workers, more than expected, and a Bloomberg survey estimates 190,000 jobs added in March. The official Labor Department report will be released on April 4.

"Activity in the second quarter is going to represent something of a rebound from the first quarter," said Tom Simons, an economist at Jefferies. "We've seen enough good numbers recently to say that it is a sign of fundamental improvement."

Herald wire services contributed to this report.

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Soon-to-reopen Hubway pedals 10 new stations

In what may be the surest sign yet that spring has arrived, the Hubway bike-share program is set to reopen next week with 10 new stations and new, subsidized memberships for low-income patients of one Boston hospital.

After a year-round Cambridge pilot program that averaged 2,000 trips per week during the winter, nearly 100 of the 140 stations in that city, as well as in Boston, Brookline and Somerville, are expected to be operational by April 2, with most of the remaining ones to be rolled out in early April.

Eight stations that are along the marathon route will be deployed after the April 21 race, said Emily Stapleton, general manager of Alta Bicycle Share, the Oregon-based company Boston hired to run the program in 2011.

Since then, Hubway has logged about 1.6 million trips and 9,700 annual members among the four communities, Stapleton said.

"Mayor (Martin J.) Walsh is thrilled to be reopening Hubway," said Nicole Freedman, the city's director of bicycle programs. "It's really become part of the transportation fabric of Boston."

Two of the 10 new bike stations will be at the Boston Design Center, which is sponsoring them, Stapleton said.

The exact locations of two other new Boston stations and six new Cambridge stations are expected to be announced next month.

Walsh and Boston Medical Center this week also announced the launch of "Prescribe a Bike," a new program that allows BMC doctors to write prescriptions for $5 Hubway annual memberships, which normally cost $85, to low-income residents.

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Former gas co. reborn as luxury apartments

The Arlington is the latest luxury apartment offering to open in Boston, but unlike its competitors' complexes, this is not a new building.

The Park Square rental complex at Arlington Street and Columbus Avenue in Bay Village has been carved out of a 1927 Renaissance Revival building.

Built for the Boston Consolidated Gas Co., it was part of the University of Massachusetts Boston campus in the 1960s and 1970s, and more recently it housed the Boston Renaissance Charter School.

With its limestone facade and two-story arched windows, the building — co-developed by New York's Related Cos. and Boston's Congress Group — cuts an elegant figure. The lobby, once used to display gas stoves, has refinished marble columns and brass detailing along with new white marble floors — and a gas fireplace tucked in one corner.

The $100 million LEED Silver makeover of the 14-story building has created 128 one- and two-bedroom apartments, with rents starting at $3,200 for one-bedrooms and $6,200 for a two-bedroom. Top floor two-bedroom units with 1,600 square feet are renting for more than $8,000 a month.

We took a look at several model apartments. Unit 12G, a 700-square-foot one-bedroom with great Back Bay views rents for $3,700 a month and Unit 12K, a more spacious 900-square-foot one-bedroom with Park Square and downtown views is going for $4,300 a month.

The units have condo-quality finishes, including white-oak hardwood floors, walnut cabinets, polished marble countertops and high-end Kitchen Aid appliances. Bathrooms have white marble floors and white tile tubs and showers. Each unit comes with a stacked Bosch washer and dryer and customized closets

Unlike many of its high-end apartment competitors, The Arlington does not charge monthly fees for pets, and rent includes resident-controlled heat and air conditioning and water. Everything is electric, ironic for a building that was formerly a gas company.

One thing the building doesn't have is parking but tenants can lease garage spaces at the nearby Revere Hotel for $299 a month.

The Arlington has 20,000 square feet of common space amenities. There's a basement basketball court, carved out of a former school auditorium, flanked by a fitness center on one side and a club/game room on the other. There's a second-floor party room and even an on-site pet-washing station.

In May, the Liquid Art House, an upscale hybrid restaurant/art gallery, will open a 180-seat restaurant on the ground floor, which will also provide room service for tenants. There's also Zipcar, bike-sharing and concierge services.

Related says it has leased almost 20 percent of the units. "Renters like the fact that we are closer to Newbury Street, the Theatre District and three blocks from the Public Garden," said Ellen Kang of Related Rentals, who does the leasing at The Arlington.

Kang said the complex is drawing young professionals who work in the area as well as empty-nesters looking for a pied-a-terre in the city.

"The building has a boutique quality as well as a lot of character," Kang said. "I think it will lease up in three to four months."

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Massport set to hike parking fees as payroll grows

The cost of parking at Logan International Airport could soon soar by as much a $3 a day, Massport announced, just days after the Herald reported the agency's skyrocketing payroll topped the $100 million mark.

"They're not interested in losing one nickel on what they can squeeze out of people that park at Logan," said David Tuerck of the Beacon Hill Institute at Suffolk University. "They're going to drive those rates to the point they get as much money as they can. They're not in a million years going to look for a place to save money."

Central Parking could climb to $30 a day, while the so-called "economy lot" could cost drivers $21 per day, under the Massport proposal that would be effective July 1. Hourly rates could jump $2 to $3, though the first hour will stay at $6.

And that's just the beginning. Massport will also look at spiking the rates again effective 2016.

The parking pain comes just days after the Herald reported that Massport salaries ballooned to $100.8 million this year — nearly $7 million more than last year and much more than the $87.9 million the agency first projected.

Massport also announced a pilot shuttle bus between the Back Bay and Logan at a cost of $5 per rider, but it's unclear whether the agency will have to subsidize the service.

Massport spokesman Matthew Brelis said the agency froze positions and salaries for about three years during the recession and the number of workers has dropped by 45 since 2008.

Meanwhile, Logan passenger numbers increased 16 percent since then, putting more demand on parking facilities, he said. The agency will spend $60 million for 2,000 more spaces at Logan and $30 million for a garage at the Framingham Logan Express — something the increase could help fund, he said.

"We really are doing more with less," said Brelis.

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Southboro’s Globoforce cancels IPO

A Southboro tech company canceled its initial public offering hours before markets opened yesterday, a move experts said was a sign of low demand for shares of Globoforce, not a trend that will drag down other tech companies looking to go public soon.

Globoforce, which makes employee recognition software for businesses, said late Thursday night it had canceled the deal after initially scaling down the IPO earlier Thursday.

"Despite receiving overwhelming interest in our initial public offering, we have decided to postpone our offering until market conditions are more favorable for our company and our customers," said Eric Mosley, CEO of Globoforce, in a statement.

Scott Johnson, managing partner of New Atlantic Ventures in Cambridge and an investor in Enernoc when it went public, said those "market conditions" were likely related to Globoforce, not the market in general.

"It's hard to conclude that this is the canary in the coal mine," Johnson said. "I would say the odds are this is a company-specific situation, where the investors' appetite for this particular offer was below the expectations of the company."

Matt Wong, an analyst with CB Insights, said one possible red flag was the company's distribution of revenue.

"Their 10 largest clients make up 70 percent of their revenue," Wong said.

A Globoforce spokeswoman declined to comment beyond the company's statement.

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'20s charm abounds in Belmont home

This classic colonial in Belmont has been updated but retains much of its woodwork and charming details, such as arched doorways.

Built in 1928, the five-bedroom home at 22 Adams St. lies in the town's high-end Presidential Estates subdivision. The gabled, hip-roofed house, with an attached two-car rear garage, has seen major kitchen and bathroom updates and new heating and central air systems. It's on the market for $1,395,000.

There's a custom stone wall-enclosed patio in the front yard, and a granite walkway leads up to the house, which has a brick exterior first floor and newly repainted light-blue clapboard above. There's a stone-floored entry with a coat closet to one side that opens into a large hardwood-floored foyer with a turning staircase.

To the left is a formal living room with hardwood floors, a beamed ceiling and sconce lighting. The sunny room has six windows and a wood-burning fireplace with a restored mantel.

A french door from the living room leads into a home office with built-in shelving. To the right of the foyer is a sitting room with hardwood floors and crown molding that leads through french doors into a formal dining room. This sunny room has five windows and restored maple floors.

It segues into an L-shaped recessed-lit kitchen that underwent a major renovation in 1997, including restored maple floors. There are over 40 custom hand-painted white cabinets in three distinct areas above and below black granite countertops. There's a dining area with two windows and six glass-fronted cabinets. The main preparation area has lots of drawers and shelves, and an adjacent pantry area has large cabinets. There's a stainless-steel Thermador gas stove and two black Thermador wall ovens, a stainless-steel LG dishwasher and Kitchen Aid compactor and a Maytag side-by-side refrigerator that was added last year.

There's a door from the pantry area out to a rear deck with cedar floors and mahogany railings that has stairs down to a small grass backyard. Back inside, at the back of the first floor, is a guest bedroom with two windows as well a full bathroom added in 1998 that has a blue tile floor, white-tiled walk-in shower and a white pedestal sink.

There are three bedrooms on the home's second floor reached via a turning staircase in the foyer.

The master bedroom suite underwent a major renovation in 1998 with restored hardwood floors and a custom walk-in closet with built-in drawers and cabinets. The en-suite bathroom has a beige marble floor and marble-topped double-sink vanity. There's a white-tiled double steam shower with a marble bench and a skylight above.

The second and third bedrooms are good-sized, and both have hardwood floors and alcoves with built-in desks on one side and dresser drawers on the other,

A second full bath was redone in 1998 with a white marble floor and marble-topped double sink vanity and a white-tiled walled whirlpool tub and shower.

The carpeted fifth bedroom is one floor above in a converted attic with a window.

The home's basement was remodeled in 2001. Stairs lead down to a ceramic-tiled laundry and storage room with a wall of floor-to-ceiling cabinets and a full-size Maytag washer and dryer.

Off this room is a large, carpeted recessed-lit family room with a wood-burning fireplace.

A closet holds a heating and central air-conditioning system added in 2001, at which time new electrical,. plumbing and coaxial cable wiring were also upgraded.

There's also an attached two-car garage in the basement, with automated doors and parking for an additional vehicle under the deck and in a long driveway. But there's no direct access to the house from the garage.

There's not a lot of yard space, but the area around the home is nicely landscaped with birch trees and flowering bushes.

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Putnam CEO picked to also run parent co.

Putnam Investments President and CEO Robert L. Reynolds has been tapped to also head the Boston firm's parent company as it combines its retirement businesses to serve the U.S. marketplace with greater breadth.

In a conference call with reporters yesterday, Winnipeg-based Great-West Lifeco, Inc., announced the appointment of Reynolds as president and CEO of Great-West Lifeco U.S., the company that owns Putnam Investments and Denver-based Great-West Financial. Reynolds also will assume those roles at Great-West Financial after its president and CEO retires in May, but he will continue to hold his positions at Putnam and remain based in Boston.

"Bob has been a driving force of innovation and industry progress in financial services for three decades — having led institutional and retail asset management, insurance and retirement services businesses over the course of his career," said Paul Mahon, president and CEO of Great-West Lifeco.

Under Reynolds' leadership, the retirement businesses of Putnam Investments and Great-West Financial will be combined and offer comprehensive retirement services to small-, mid- and large-sized corporate 401(k) clients, state and municipal employee retirement plans, and public education and nonprofit employee plans. Combined, the two companies have more than 5 million participants and oversee $220 billion in assets.

"We see a huge opportunity to see the businesses collaborate," Reynolds said. "Together we can grow faster than we can grow separately."

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Sanctions not seen as damaging to U.S.

Economic sanctions President Obama ordered yesterday against some of Russian President Vladimir Putin's closest associates will have little impact on the U.S. or global economies, unless they are expanded to restrict Russia's energy exports to Europe, experts said.

"In terms of the global economy, unless gas exports from Russia to Western Europe are part of the sanctions, the impacts will be very small," said Nariman Behravesh, chief economist at IHS Global Insight.

In his latest round of sanctions over the crisis in Crimea, Obama targeted Putin's chief of staff and 19 others, as well as a major Russian bank that provides them with support.

But that alone will have little, if any, effect on the U.S. economy because Russia is not one of our major trading partners, said Doug Handler, IHS's chief U.S. economist. Russia retaliated, imposing entry bans on U.S. lawmakers and senior White House officials.

"Should there be a collapse in trade volume between the two countries, it would not have a major impact on U.S. economic growth," Handler said. "The greatest impact we'd see would be through Europe."

European Union leaders yesterday announced sanctions on 12 more people linked to Russia's annexation of Crimea. Obama said his administration has been working closely with Europe on more severe actions if Russia continues its incursions into Ukraine.

Yesterday, he signed an executive order giving the U.S. authority to impose sanctions on key sectors of the Russian economy.

"This is not our preferred outcome," Obama said. "These sanctions would not only have a significant impact on the Russian economy, but could also be disruptive to the global economy."

Earlier this month, the showdown in Ukraine caused both U.S. and European markets to fall, as the crisis stoked fears of a tit-for-tat campaign of economic sanctions between Western powers and Russia — Massachusetts' 28th largest export market last year, accounting for less than $150 million of the state's exports.

"Russia is a promising market and a trade partner, but not a terribly important one for either the U.S. or Massachusetts," said Andre Mayer, senior vice president at Associated Industries of Massachusetts. "Sanctions should not be damaging to our industries, as long as they are carried out with Western European nations."

Herald wire services contributed to this report.

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Howard Johnson Inn to get ‘edgy’ redo

An "edgy" and "irreverent" 94-room boutique hotel paying homage to the Fenway's musical and artistic history will replace the shuttered and past-its-prime Howard Johnson Inn.

Samuels & Associates plans to open The Verb this summer after an 
$18.8 million-plus redevelopment that will include an interior gut-renovation of the Boylston Street property while preserving the 1959 building's mid-century facade and architecture.

It will be the first hotel for Samuels, which is credited with breathing new life into the Fenway with numerous residential, retail and office projects, including Fenway Triangle Trilogy, 1330 Boylston St. and the Van Ness Building. For this development, it is partnering with Weiner Ventures and Spot-On Ventures, developers of the Mandarin Oriental Boston.

"We're completely refurbishing the entire building," said Spot-On principal Robin Brown, a former 13-year general manager of the Four Seasons Hotel Boston. "It was a very high-quality building that lacked in love. We're more than tipping our hat to the original architects' design intent, making it authentic, but modern."

The team hired a London branding firm to brainstorm about the hotel's positioning, its style of service and attitude, and its name.

"Everything about the hotel will be a little bit irreverent," Brown said. "This is like me having a midlife crisis of hotels that's grounded with superb service and superb details, nailed with a huge sense of humor. This is not going to be a serious hotel."

The hotel's lobby will include a DJ spinning vinyl albums that will be on display. Boston music and pop-culture memorabilia ranging from historic Boston Phoenix covers to photos of musicians who performed in Boston or appeared on WFNX-FM radio also will decorate the public spaces.

"Once we really got to know the building, we saw that (it) really had great bones," said Leslie Cohen, Samuels' executive vice president of development. "We thought this was a great opportunity to create a spectacular new product in short order. Hotel rooms are in high demand."

Room rates are expected to start in the $200 range.

The hotel will include a heated outdoor pool and deck, along with a 4,000-square-foot, three-meal restaurant and bar.

"We're looking for (a chef) that fits in with the vibe of the Fenway — someone who is up-and-coming and consistent with our restaurateurs," Cohen said.

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The Ticker

Toyota to pay $1.2B to settle criminal probe

Toyota agreed to pay $1.2 billion to settle an investigation by the U.S. government, admitting that it hid information about defects that caused Toyota and Lexus vehicles to accelerate unexpectedly and resulted in injuries and deaths.

Attorney General Eric Holder said yesterday that the penalty is the largest of its kind ever imposed on an auto company. The four-year criminal investigation focused on whether Toyota promptly reported the problems related to unintended acceleration.

N.Y. plant fined $12.5M for polluting

An industrial plant that knowingly released hundreds of tons of the carcinogen benzene into the air over a five-year span and improperly handled hazardous sludge on the ground was fined $12.5 million yesterday, and a manager was sentenced to a year in jail.

Tonawanda Coke Corp. and its former environmental manager, Mark Kamholz, were convicted of federal environmental crimes last year. The plant, along the Niagara River, burns coal to produce coke, used in steelmaking.

FAA: Boeing 787 jetliners are safe

Boeing's design and manufacture of its cutting-edge 787 jetliner is safe despite the many problems encountered since the plane's rollout, including a fire that forced a redesign of its batteries, according to a report issued jointly yesterday by the Federal Aviation Administration and the aircraft maker.

The yearlong review concluded "the aircraft was soundly designed, met its intended safety level, and that the manufacturer and the FAA had effective processes in place to identify and correct issues that emerged before and after certification," the agency said in a statement.

TODAY

 Labor Department releases weekly jobless claims.

 National Association of Realtors releases existing home sales for February.

 Nike reports quarterly financial results after the market closes.

TOMORROW

 Tiffany reports quarterly financial results before the market opens.

THE SHUFFLE

NVNA Works, a nonprofit, private-pay home care agency, has named Ellen Allen to its board of directors. She is currently chairwoman of both the Plymouth County Advisory Board and the Norwell Board of Selectmen.

L Kristina Lupo has joined the 451 Marketing search marketing team as account director. With more than 12 years experience in advertising and radio, Lupo will be responsible for managing the development and execution of integrated search campaigns for 451 Marketing's clients.

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