Demolition of 2 Penn Street buildings nears completion
Emergency demolition of the structurally compromised buildings at 431 and 433 Penn St. began May 15.
Based on structural assessments, the city said, it was determined both buildings posed an imminent risk to public safety, leaving demolition as the only responsible option.
Only the façade of the 1912 Beaux Arts-style structure at 431 Penn was considered historic. Originally part of the former Reading News building at 22-24 N. Fifth St., it was transplanted piece by piece to its current location in 1981 as part of the former American Bank $6 million Keystone Project.
No parts of 433 Penn could be salvaged because of severe deterioration, officials said.
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Business Insider
6 hours ago
- Business Insider
I visited T.J. Maxx's outdoorsy sibling Sierra, one of the fastest-growing brands in the retailer's family
Sierra is TJX's outdoor lifestyle brand, selling apparel, gear, home goods, and pet products. It's still relatively small, but TJX said the chain could grow to 325 locations. Business Insider visited a store for a closer look at T.J. Maxx's younger, sportier sibling. Shopping for outdoor lifestyle stuff is normally a quick way to burn a lot of cash. Whether at Dick's Sporting Goods or REI, well-made apparel and gear usually come at a premium price — even with the occasional coupon or sale. My consumer experience with activewear (and inactivewear), shoes, and other accessories led me to believe the relationship between quality and price was somewhat fixed. That was before I discovered Sierra. I gave my local store in Madison, Wisconsin, a look for the first time a few years ago. I've done plenty of shopping at Sierra's more widely known siblings, T.J. Maxx, Marshalls, and HomeGoods, and I never really felt the spark that keeps die-hard Maxxinistas coming back. Yes, the discounts at those stores seem large, but I'm not always able to tell if the price is actually a good value — especially if I don't recognize the brand. Scanning the racks at Sierra was a different story, however. These were brands that I knew and trusted, like Smartwool, Carhartt, and more. Each time I came back, I wondered why the Sierra brand wasn't more widely known relative to TJX's other brands and even other outdoor retailers. It turns out, the reason is pretty simple. The brand was, and still is, fairly small and a more recent addition to the TJX portfolio. Originally called Sierra Trading Post, the company started as a catalog company in 1986 in Reno, Nevada. It later moved to Wyoming and launched its e-commerce business in 1999. TJX acquired it for $200 million in 2012. The first TJX-owned stores were located in Denver, followed by its first East Coast location in Burlington, Vermont. In 2018, with a fleet of a few dozen stores, TJX relocated the company's headquarters to its main offices in Framingham, Massachusetts, and dropped the "Trading Post" from the name. The brand has since been on a growth spurt, on track to have 137 US locations by the end of this year. In the longer term, TJX said it expects the brand to have 325 locations, more than triple the number of stores it had a year ago. That gives Sierra the fastest growth rate of any brand in the TJX portfolio, though in fairness, T.J. Maxx and Marshalls have more than 2,500 US locations combined, so their growth is slower. Sierra's tiny stature means it barely receives individual mention in TJX earnings calls beyond annual announcements of planned store openings, per equity research platform AlphaSense. Out of the spotlight, Sierra has nevertheless been busy. Foot traffic data from found that customer visits doubled between 2019 and 2022, driven in part by a pandemic-era rush to spend more time outside. While some of that increase is a result of simply having more stores, visits per store were also up, said. In one of Sierra's rare mentions, TJX CEO Ernie Herrman characterized the store's assortment as "moderate to very high end " in 2022. My experience certainly supports his assessment. Some recent treasure-hunt finds include the pair of Fjällräven pants I got, the pair of Lodge cast iron enamel dutch ovens in my kitchen, and an ever-expanding collection of insulated drinkware from Yeti, Stanley, and Hydro Flask. High-quality items from known brands have also given me the confidence to try unfamiliar offerings from the store's assortment, and I am rarely disappointed. Hydrapeak's mugs may not have the current cultural cachet of Stanley's cups, but they do a solid job for a fraction of the price. Sierra's selection can be somewhat limited compared to a traditional retailer's, but I almost always find something worthwhile. I now make a point of checking Sierra before or after trips to REI and Dick's. Neither of those competitors is sleeping on Sierra, though. In addition to its Public Lands stores, Dick's has recently experimented with clearance stores like the Warehouse Sale and Going Going Gone. And the online REI Outlet offers deep discounts on many of the items the co-op carries in its stores. Still, Sierra has been in the game for a long time online, and its physical presence is expanding at a rate that could see it match REI's store count in just a few years. Another difference is that, unlike other national or regional outdoor lifestyle chains, Sierra's parent company is a powerhouse of off-price retailing. TJX's fingerprints are all over Sierra's stores, and the combination of its tried-and-tested playbook with this retail category makes the small but mighty brand an exciting one to follow.
Business Insider
8 hours ago
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It's illegal in most states for private equity to buy a law firm. Lawyers have figured out a workaround.
Real estate, airlines, fashion. It might seem like private equity has climbed the mountain of the American economy, declaring everywhere the light touches as part of its kingdom. But one corner remains in the shadowlands: Law firms. Nearly every state has adopted a professional ethics rule from the American Bar Association forbidding lawyers from working for nonlawyer-owned firms. Lawyers, of course, have figured out a way around it. The loophole, known as a "managed services organization" — or MSO — allows non-lawyers to effectively own part of law firms through a second corporate entity. Business Insider spoke to two attorneys who advise law firms on the arrangement, which they said is becoming increasingly common. In June, Puerto Rico's high court allowed non-lawyer investment in law firms in order to spur economic development in the territory. Arizona, the only state that has done away with the ABA rule, in 2020, now has over 100 law firms that are open to outside investors, according to a recent Stanford Law School study. Large companies like KPMG and Rocket Lawyer now own law firms in the state outright. The MSO model, which isn't limited to only Arizona, could appeal to law firm owners who want to retire or who don't want to hand their firms over to a law partner. "We're in the midst of the largest rolling retirement of lawyers in history," said Lucian Pera, a legal ethics attorney at Adams & Reese who advises lawyers and businesses about setting up MSOs. "The baby boomers are getting old and retiring. And that's a real opportunity for some people." Using an MSO can give private equity firms — or other kinds of companies — a chance to effectively buy a slice of legal practices. And it gives lawyers the chance to sell stakes of their companies for cold, hard cash. It could also offer the chance to partner with a deep-pocketed company that could boost the firm and help scale it to new heights. No one says MSOs are not OK Traditionally, law firms have operated as partnerships among attorneys, where equity partners own shares in the firm and help manage it. That's partly because of ethics rules designed to maintain attorney independence, such as ABA Model Rule 5.4(d), which largely prevents nonlawyers from owning law firms or from having the right to control the professional judgment of a lawyer. The ABA's rules have made law practices distinct from many other white-collar professions, like finance or consulting, which may have robust ethical rules and norms but don't impose such stringent limits on ownership. There are plenty of publicly traded banks and consulting firms, but no publicly traded law firms. As a workaround, the law firms can set themselves up as two corporate entities, Pera said. One is the law firm itself, composed exclusively of lawyers and owned only by lawyers. The second is the service organization, which can be owned by anyone and acts as a vendor for the law firm. It is essentially the back office, taking care of all non-lawyer tasks, including marketing, accounting, human resources, real estate leases, and employing paralegals. The two corporate entities enter into a long-term contract. Under this MSO arrangement, non-lawyers can invest in the service corporation, though not the law firm itself. Presto! You have an ethically independent group of lawyers who are exclusively working with a company that can sell shares, Pera says. According to Pera, no state bars have issued ethics opinions that expressly bless the MSO model, but no court or regulator has found a problem with it, either. "The pieces fit well, and there's no regulatory approval required for a law firm to do it, just like there's no regulatory approval required for a law firm to take out a bank loan," Pera said. A spokesperson for the American Bar Association said its Center for Professional Responsibility doesn't have any ethics opinions on non-lawyers investing in MSOs. "Lawyers are not subject to the ABA Model Rules," the spokesperson said. "Instead, they are regulated by the state supreme courts in which they are licensed." Opportunities for both lawyers and investors Tom Lenfestey is the founder and CEO of The Law Market Exchange, a sort of Craigslist for law firms. He says private equity companies are typically interested in consumer-driven firms, like personal injury. Investors might be able to introduce new efficiencies into those firms and get a steady stream of revenue in a larger portfolio, said Lenfestey, who also advises on law firm mergers and acquisitions. Private equity companies might be warier of investing in Big Law firms, which typically service corporations and have fewer but bigger clients, he said. Lawyers could always jump ship and take clients with them, but consumer law firms tend to do steadier business, he said. "Personal injury is brand-marketed — it's the billboards, it's the TV, it's the digital marketing," Lenfestey told Business Insider. "It's not attorney relationship-based." Because law firms aren't required to disclose their use of service organizations, it's difficult to know how widespread the practice is. Both Pera and Lenfestey declined to list the firms they've worked with using the structure, citing confidentiality obligations to their clients, but said it's becoming more common. Pera said he knows of one firm that used the structure as far back as 2006. In more recent years, more law firms and investors have become interested in using MSOs, Pera and Lenfestey said. "There are many more that are in process right now, and some of them are quite large," Pera said. "There's a fairly large insurance defense firm in this country that's looking at doing this. There's a fairly large AmLaw-ranked law firm that's looking at this. So there's a non-trivial number of these that are going on." Lawyers who have built up their practices, and who want to cash out, can do so by effectively selling part of their firm to someone else to manage. They can also help firms scale. Selling shares of an MSO could help finance lead generation or advertising. Catalex Network, which launched earlier this year, is using the MSO model to invest in law firms with a longer time horizon. While a private equity firm might want to stick with a law firm for a few years before selling its stake, Catalex Network says it aims to form long-term partnerships with law firms by helping them establish MSOs, buying substantial stakes in them, combining their back-offices, and giving the firms the resources to compete with Big Law. Catalex Network offers bread-and-butter services like IT, payroll, compliance management, and accounting. But also services that are more specific to the legal industry, like recruiting and sophisticated enterprise software that would be cost-prohibitive for smaller firms. "I've seen kind of what big law resources are and I've seen what small law resources are," said Jeffrey Goldenhersh, a Catalex Network founding partner, who previously worked at the Big Law firm Skadden Arps before moving to a boutique firm. For Catalex Network, the MSO structure offers a way for the company to grow with law firms. The American Bar Association's rules meant to preserve attorney independence, such as limits on fee-sharing with non-lawyers, are a non-issue. And while Catalex Network handles the back office, the lawyers can do less managing and more lawyering, Goldenhersh says. "There's a real consolidation going on at the top end of the legal market and some of these smaller, midsize, boutique-type firms are getting a little bit left behind," Jesse Hamilton, another Catalex founding partner, told BI. "So we're trying to help them catch up and be able to step into the ring with some of the larger firms that have consolidated, have the best technology, the best AI, the best back office staff, and have them be able to compete and stay relevant in the industry."
Business Insider
8 hours ago
- Business Insider
Read the exclusive pitch deck AI infrastructure startup Cerebrium used to nab $8.5 million from Gradient Ventures
AI infrastructure platform Cerebrium has raised an $8.5 million seed round led by Gradient Ventures, with participation from Y Combinator and Authentic Ventures. Cerebrium, cofounded in Cape Town by CEO Michael Louis and CTO Jonathan Irwin and headquartered in New York, is a platform used by its customers' engineering teams to build and scale multimodal AI applications — which can process different types of data, including text, images, and audio. Cerebrium works across three main categories, Louis said: Voice AI, real-time digital avatars, and healthcare. Cerebrium provides the infrastructure building blocks behind the scenes — such as model inference and training, and data processing — allowing engineers to focus on their core product and workflows, Louis told BI. It also helps customers to deploy their applications in different regions. "We believe specialized infrastructure, which scales elastically, will be essential as real-time AI becomes core to customer experiences," Gradient partner Eylul Kayin said in a statement. Louis formerly founded the e-commerce startup OneCart, which was acquired by Walmart-owned Massmart in 2021. The idea for Cerebrium came as the team struggled to build machine learning at the on-demand grocery delivery company, Louis said. Cerebrium offers serverless CPU and GPU infrastructure that spins up and down quickly, making it ideal for volatile workloads and cost-effective for clients, Louis said. "What that means is you only get charged for that exact time that it was basically running for," he said. The company currently counts only four engineers and is generating millions in annual recurring revenue. It counts among its clients AI-generated video purveyor Tavus and voice AI companies Deepgram and Vapi. The company will use funds to hire more engineers to meet enterprise demand and introduce new features, Louis said. Here's a look at the pitch deck Cerebrium used to raise $8.5 million in seed funding. Some slides and details have been redacted in order to share the deck publicly. Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium Cerebrium
