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Mason City Younkers store safe for now, but faces uncertain future with Bon-Ton bankruptcy

MASON CITY | Despite speculation that Younkers in the Southbridge Mall might be closing, the store remains open for business.

That might change, however, pending an agreement between an investment group and Bon-Ton, the parent company of Younkers.

Bon-Ton had announced store closures throughout its company earlier this year, including Younkers stores in Cedar Falls and Cedar Rapids. The company is closing those stores — and dozens of others nationwide — to comply with the federal Worker Adjustment and Retraining Notification, or WARN, Act.

The act requires large employers to notify states, employees and local communities at least 60 days before any potential closings. Bon-Ton sent WARN letters to state labor departments nationwide last week.

Cory Kelly, a spokesperson for Iowa Workforce Development, said IWD regularly updates its list of businesses affected by WARN letters. Mason City's store isn't on the list the group updated earlier this month. 

Steven Van Steenhuyse, Mason City's development services director, said he had seen a copy of the WARN letter issued to state labor departments.

He said the letter had to be sent because of the company's bankruptcy situation. Bon-Ton filed for bankruptcy in February.

Kelly said the IWD can't comment on businesses not on the agency's WARN list.

"We don’t comment on information that has not yet been publicly released as it relates to the WARN emails or letters," Kelly said, adding: "We publish these pretty much near real-time."

Mason City Younkers manager Kerry Kamm deferred comment to Bon-Ton spokesperson Christine Hojnacki.

Hojnacki said in a brief interview Friday the company notified employees nationwide in a letter April 5 about the possibility of store closures.

According to Bon-Ton's most recent news release, investors Namdar Realty Group and Washington Prime Group have signed a letter of intent to buy Bon-Ton's assets.

Hojnacki declined to comment about where the process stands right now, providing the Globe Gazette with a prepared statement about possible job losses.

"We are encouraged by the interest in Bon-Ton and we hope that jobs will be preserved through a sale process," a portion of the statement read. "We remain committed to pursuing the best path forward for the Company and its stakeholders, including Bon-Ton associates.”

Bankruptcy court filings show the group would purchase Bon-Ton’s assets for a baseline bid of no less than $128 million. According to the investors, the action would save more than 20,000 jobs nationwide and preserve "a 120-year-old business that is a significant customer for its vendors, an anchor tenant for many of its landlords, and the leading hometown department store for millions of consumers in local communities throughout 23 states."

That would have to occur before Bon-Ton puts itself on the auction block April 16, according to a news release.

Van Steenhuyse said he's unsure of what Younkers' future is, but said it would be a negative for Southbridge Mall if the anchor tenant closed. 

"All I know is that under the bankruptcy court, I guess there are people who will want to buy it that will liquidate and people who will want to buy it that want to reorganize," he said.

"I can’t speculate. It’s a corporate decision," he added about the store's future. "I would miss Younkers very much, and no doubt, it would be a blow to the mall. But we’ll keep moving forward and trying to make the mall viable."


Local
featured
MasterChef contestant grows Bread and Buttercrème to popular Clear Lake brunch spot (with photos)

CLEAR LAKE- Since August, Cassie Peterson has watched her labor of love restaurant evolve and morph into the spot for Sunday brunch in Clear Lake.

“The customers have kind of established this as a brunch spot, which is pretty cool,” Peterson said. “I want everyone to feel comforted and awesome and leave happy.”

Peterson, a former MasterChef contestant, opened Bread and Buttercrème on 444 N. Shore Dr. in August 2017.

"At the time, I think we were trying to be too many things," Peterson said.

Heading into the eatery and bakery’s first spring and full summer by the lake, Peterson said she and her crew are excited for this summer and have lots of plans.

“We took some notes from last summer and scrapped every idea we had,” Peterson said, laughing. “We took the winter to figure it out and now we’re ready to go.”

The eatery and bakery features breakfast, brunch, small plates, cocktails, baked goods, vintage beer and more.

“People get really excited when they see we have Hamm’s,” Peterson said.

CHRIS ZOELLER The Globe Gazette 

Cassie Peterson, owner of Clear Lake's Bread and Buttercrème, places pretzel buns on a cutting board as she prepares an order of the Black Truffle Burger Trio Friday in her kitchen.

Peterson praises her new staff of about 11 people.

“We actually have reversed things a bit from tradition,” Peterson said.

Women make up most of her kitchen staff while men make up most of her serving staff up front. She also has chef Davin McLeod working with her.

Since starting the business, Peterson has been tired at times but excited.

“I have not had time to be scared,” she said, laughing.

An interesting group of people, she said, ready to work and get things rolling with warmer weather -- if it ever arrives.

“This has been such a long winter,” Peterson said. “If it ever gets warm again, we’ll get to work on the patio and outside bar.”

The building features a fenced-in patio to the side of the building. Peterson hopes to get some covering for the space and light misters for the humid Iowa summer.

“We’ll have a bar, new cocktails,” she said. “I’m so excited for our new cocktails this summer.”

One of their two most popular drinks are the mimosa and the cheeseburger bloody mary.

“This place turned into more with my love of detail and experiencing new things,” Peterson said. “Different takes on foods you may be familiar with.”

CHRIS ZOELLER, The Globe Gazette 

Cassie Peterson, owner of Clear Lake's Bread and Buttercrème, sautés portobello mushrooms on the stove Friday in her kitchen.

Chicken and waffles, hangover burgers, lobster roll, 3-way chicken wings, black truffle burgers and more fill up the menu.

“In the evening we do our small plates,” she said. “You can come in, have some drinks, play some games.”

The bakery features fresh-baked breads, cheesecakes, gluten-free items, doughnuts, caramel rolls, muffins and cronuts, a croissant-doughnut hybrid. 

The ever-changing menu may be different for many customers but is not unusual for restaurants in bigger cities to change things up with the seasons, Peterson said.

“I spent so much time apologizing for it but now, I don’t feel the need to,” Peterson said, chuckling. “We kind of have a secret menu so if you loved something and it’s no longer on the menu, we can probably still make it for you.”

The food is all made fresh, Peterson said, noting the good food takes time.

“We’re a little area putting out a lot of food,” she said.

CHRIS ZOELLER The Globe Gazette 

Cassie Peterson, a Clear Lake resident and former contestant on MasterChef, opened Bread and Buttercrème, a bakery and eatery near Surf Ballroom, in August of 2017.

One of the most popular dishes, the Burnt Ends Benedict Bowl, came to be because her mom couldn’t decide what she wanted. He mom asked for a little bit of the things she liked on a plate, including pork, potatoes, a poached egg and hollandaise.  Peterson threw it all in a bowl for her.

“There’s a story behind almost everything on the menu,” she said.  

In 2016, Peterson made it to the top 20 on MasterChef. She started her next venture that summer, Nameless Gourmet, with partner McLeod as a private chef. Now she has found a permanent location in Clear Lake.

Peterson also does event catering.

“My goal could be to open a restaurant and make a lot of money, but that’s not my goal here,” Peterson said. “I want people to stop, relax and enjoy a beautiful place with delicious food.”

The next step, after the patio and bar, is to take more time to work on the decor.

“It’s a bunch of funny signs right now,” Peterson said.

The business times may change to 6 days per week as the weather warms. For now, Bread and Buttercrème is open Thursday through Sunday. Peterson said she will announce changes on the restaurant's Facebook page.

CHRIS ZOELLER The Globe Gazette 

Cassie Peterson, owner of Clear Lake's Bread and Buttercrème, prepares to sauté portobello mushrooms on the stove Friday in her kitchen.


Iowa
Iowa lawmakers search for breakthroughs as session winds down

DES MOINES — The 2018 legislative session is headed for overtime.

Republicans who control both chambers of the 87th General Assembly and GOP Gov. Kim Reynolds are going to need more than the 100 scheduled days to get their work done with the two biggest hurdles to adjournment — state income tax cuts and a fiscal 2019 state budget — still standing in the way.

GOP leaders last week moved closer to resolving differences between the House and Senate over the size and scope of the tax cuts they contemplate by starting to move their competing plans through committees, with the ultimate goal of reaching a compromise in negotiations.

A factor prodding legislators to bring this year’s session to a close is that their daily expense money runs out after Tuesday.

“We’re still having conversations with the House and the governor to hopefully come to agreement on that tax plan. Once that’s done, then we can start working on the budgets and hopefully wrap up,” said Senate Majority Leader Jack Whitver, R-Ankeny.

“Having both plans out there moves us a step closer to finding some agreement on that and so the fact that both are moving through committee I think is a good sign,” he added. “Here in the Senate, we’re interested in putting the taxpayer first. We want to know what that tax plan looks like before we start working on the budget. Once we have the tax plan done, the budgets are pretty close to agreement so it shouldn’t take long after that.”

On the House side, Speaker Linda Upmeyer, R-Clear Lake, said majority Republicans are looking at a plan that would provide relief to taxpayers but within a “responsible, stable” approach that won’t “break the bank, so to speak” — maintaining government obligations to education, Medicaid and other priorities without undercutting the revenue needed to pay for them.

They do so by offering a plan to cut state personal income taxes by $1.3 billion over five years while protecting budget sustainability in future years, she said.

The House plan does not eliminate the ability of filers to deduct federal tax liability from state taxes, and does not change the current corporate tax rates. But it would provide state tax cuts to individuals totaling $140 million in 2019 and $300 million in 2020.

“The projections show that returning these dollars still allow us the room to fulfill the obligations and responsibilities and expectations of Iowans,” said Upmeyer, noting the projected impact on the general fund would be $99 million in fiscal 2019 and $197 million in fiscal 2020.

Plans offered by Senate Republicans and the governor do seek to eliminate federal deductibility, and the Senate approach envisions cutting state corporate income tax rates after 2021.

Reynolds’ tax reform package sought to cut individual income tax rates by 23 percent, resulting in $1.7 billion accumulated relief, by 2023. The governor also recommended triggers that would slow implementation based upon economic conditions and state revenue growth.

Senate Republicans up the ante, starting with an 8 percent across-the-board cut in personal income taxes in tax year 2019 that grows to overall relief of nearly $2 billion in five years if certain economic bench marks are met. It also includes triggers and a plan to eliminate federal deductibility, cut rates more, compress brackets, reduce the corporate tax rate and make other changes.

Sen. Randy Feenstra, R-Hull, chairman of the Senate Ways and Means Committee, said the “bold but prudent” changes slated to take effect beginning in January would allow taxpayers to pay $733 million less in state income taxes in the first two years of implementation.

After that, if Iowa’s economy produces more than 3.6 percent in revenue growth a year, the excess money would flow into a trust account until it hits $200 million. At that time, the money would be used to buy down rates, eliminate federal deductibility and begin lowering corporate income taxes in 2021.

“I think there is a lot of common ground. I think the House and the governor’s office, we all believe that we have to do something significant with tax reform so now it’s just a matter of the minutiae of how we get there,” Feenstra said.

When fully implemented, the Senate GOP plan would reduce Iowa’s top personal income tax rate from 8.9 percent to just under 6 percent, compress nine tax brackets into four and lower the corporate tax rate from 12 percent now to about 7 percent, he said.

At the same time, GOP senators still expect to provide about $200 million in new spending next fiscal year and $235 million for fiscal 2020, after closing fiscal 2019 with a budget cushion of about $136 million on June 30, 2019.

Rep. Guy Vander Linden, R-Oskaloosa, chairman of the House Ways and Means Committee, said he likes the cautious course House Republican have chosen and wants more details about those numbers for new spending under the “bold but prudent” Senate plan.

“In my aviation background, we used to say that there are old pilots and bold pilots, but no old, bold pilots,” said Vander Linden, a former Marine officer and helicopter pilot. “And I think that may apply to tax relief as well.”

Legislative Democrats question whether the state can afford any aggressive tax cuts at a time they say the budget is in crisis due to Republican mismanagement.

This is the second year in a row of midyear budget cuts brought on because tax collections haven’t kept up with expectations. They doubt already-strained government programs and services can be maintained with adequate resources while significantly reducing the tax revenue needed to support a general fund hovering around $7.2 billion.

Rep. Dave Jacoby, a Coralville Democrat who is ranking member on the House Ways and Means Committee, said Democrats are interested in smart tax policy, too, but the “math just doesn’t add up.”

Jacoby said his household might receive a tax break of a couple hundred dollars under a GOP tax cut. But he asked reporters, “What the heck good is that going to do when the tuition for both of my daughters is going up $800 a kid? That doesn’t help if we’re not funding education. Again, it’s a budget mess.”

After seeing state funds rolled back again in this budget year, the Iowa Board of Regents last week began discussions aimed at raising tuition for students attending the University of Iowa, Iowa State University and the University of Northern Iowa.

Proposed base tuition increases for resident undergraduates at the UI and ISU are 3.8 percent, while UNI is asking for a 2.8 percent increase. With mandatory fees, which also are increasing, along with room and board and other costs, the average estimated cost for a resident undergrad next academic year is about $21,369 — or $533 more than this year.

“The proposed tax cuts in this difficult agricultural time is more like a ruse to somehow make the election candidates look good,” said Regent Larry McKibben, a Marshalltown Republican who previously served in the Iowa Senate.

The governor and GOP leaders in the House and Senate said they are attempting to balance needs of the state with the desire to make sure federal tax cuts estimated to be at least $1.8 billion for Iowans make their way into taxpayers’ pockets, rather that create a windfall only for the state government.

Iowans likely will get a better picture of those taxing and spending issues this week when negotiators start piecing together the final version of a tax-cut package, and once the budget subcommittees get fiscal 2019 spending targets.

“We always get these things worked out, and we will,” said Vander Linden. “As to the mechanism, I hope it can be done quietly in conversations without having to go to a conference committee, but if that’s what it takes then that’s the way we will do it.”

So far, the only fiscal 2019 budget work lawmakers have done was passing a 1 percent increase, or $32 million, in supplemental state aid for K-12 public schools. That was less than the 1.5 percent the governor had wanted.

At that time, Reynolds proposed a $7.447 billion general fund spending plan that would have been a 2.7 percent increase. Then last month, legislators erased a projected general-fund shortfall still this year by cutting $25 million in funding to state agencies and repurposing $10 million in uncommitted revenues to go into the general fund account.

That action was intended to leave the state with a projected ending balance of $31.9 million on June 30.

Iowa has a law limiting spending to 99 percent of the budget, but GOP leaders have indicated they expect to spend less than that when they release their fiscal 2019 targets.

Also still unresolved as legislators march toward adjournment are the issues of banning or regulating traffic-enforcement cameras, toughening abortion restrictions, providing state money to parents who want to send their children to private schools, revamping energy efficiency and utilities regulations, addressing Iowa’s opioid epidemic and fledgling medical cannabis program, and legalizing sports betting.


Upmeyer