To quote Charlie Brown, “in the book of life, the answers aren’t in the back.”
That turns out to be a good thing because the best path to traverse a set of challenges usually requires an ongoing, grinding, fact specific, and unique answer, not a one fits all solution. A year-in-the- life summary seems to encapsulate the vagaries of business, so an annual round up of events viewed from a business perspective can foster creative thinking.
It’s difficult to summarize the events of a year in a single blog post, but here goes:
In January 2013, Barack Obama was inaugurated to a second term as the President of the United States of America; at the end of February, Pope Benedict resigned, becoming the first Pope to resign in 600 years. He was replaced by Pope Francis, who is already being hailed as “a new messenger for the Catholic Church” for his advocacy on behalf of the poor and oppressed. On March 1, the Federal spending cuts that were part of the “fiscal cliff” went into effect, which, coupled with the expiration of the Bush-era tax cuts were expected to severely hamper the nascent economic recovery. That didn’t happen, but it did create the kind of tax anxiety that helps companies that specialize in tax driven investments, which was a positive development for Cherrytree in the short term, and hopefully the economy as a whole in the long term.
The year that avoided the fiscal cliff, then seemed to lurch off the side of a mountain when, on April 15, 2013, which is Patriots Day in Massachusetts, a day that is especially cherished by Bostonians, two bombs exploded at the Boston Marathon, marring one of the world’s greatest sporting events, and scarring a city so deeply that the wounds still seem fresh despite November’s coronation of the Red Sox as World Series champs.
In May 2013, the turbulent year continued to materialize with what appears to be a steady march toward large scale state approval of same sex marriage. However, accompanying the temperature rise in June, 2013 were the bombshell revelations by a former CIA contractor that the NSA has been spying on its own people, (and we later learned that the NSA was also spying on world leaders, including some of our allies).
In the summer of 2013, precedents were set when Andy Murray became the 1st Brit to win Wimbledon in 77 years, the Israelis and Palenstinians began peace talks, followed in August 2013 by a guilty verdict for Whitey Bulger, and, unbelievably, in September 2013, when the Iranian and US Presidents’ spoke in an historic telephone call.
It all came crashing down again in October, when from October 1-16, 2013 the US Government was partially shut down when political partisanship hampered our elected officials’ ability to execute on one of their most basic legislative functions. By the time November 2013 rolled around, the Israeli-Palestinian peace talks were on the verge of collapse. Then, on December 5, 2013, one of the world’s last great leaders, a figure of unity, Nelson Mandela died peacefully at his home in South Africa. Having grown up in Johannesburg, South Africa, and seeing the morphing of Mandela from a fierce, somewhat militant freedom fighter to a man of peaceful transition, forgiveness and the masterful foresight to oversee the demise of apartheid in a manner that spared my homeland of large scale bloodshed was an inspiring and meaningful lesson.
Many of these events had significant impacts globally, both politically, economically, on the Cherrytree Group, and for me personally. For the Cherrytree Group, 2013 was our 5th year of operations, and following a presidential election campaign that spoke at length about the future of tax rates, the re-election of Barack Obama drove investors to consider tax advantaged investments due to increased tax anxiety and the need to begin planning for the larger slice of taxes to be paid this year. However, running a tax credit business in an anticipatory and actual government shutdown era was very difficult. Locally, there was also the looming expiration of the Massachusetts Brownfields Tax Credit in August 2013, which was averted by a last minute budget deal signed in July 2013 that extended the Brownfields Tax Credit for another 5 years. In addition, and quite unexpectedly, the Massachusetts Department of Revenue published a draft set of procedures for the Brownfields Tax Credit in April, 2013, that significantly limited and tightened the requirement to gain approval of the credit. The final draft, adopted on November 18th 2013 mirrored the original draft in large part despite a voluminous comment campaign orchestrated by interested industry professionals. The Boardwalk, Con Edison, and earlier Virginia court decisions called into question the structural aspects relied upon by the tax credit syndication industry, causing a chill in the marketplace as many investors ran for the sidelines awaiting IRS guidance that has not yet arrived. These events made the delivery of tax credits to investors in 2013 very unpredictable, causing upheaval in the marketplace, as well as very rough cash flow realities for businesses in the tax credit arena. Many tax credit brokers and syndicators were seriously affected, and some even shut down.
Against this backdrop, Cherrytree actually expanded, as we saw market opportunities and the need to service the market for smaller sized deals. We continued to execute our business plan and cater to our niche market, while expanding into the syndication of federal tax credits in transactions of $1million or less. We closed a historic tax credit transaction, and made serious inroads into the syndication of renewable energy tax credits, while closing and delivering more Brownfields tax credit volume than we had ever previously done. Amidst Cherrytree Group’s expansion, on April 15, 2013, I ran my first marathon, the Boston Marathon. I crossed the finish line on Boylston Street four minutes prior to the bombs exploding. My teenage son had run with me for the last three miles of the race, into the finish line, but the euphoria of completing the marathon quickly turned into hysteria and panic at the carnage and devastation surrounding us. It was horrific to see and hear the bombs explode, and to be herded to apparent safety while in a post marathon state of depletion and muster the fortitude to protect my shocked teenage son from the impact of witnessing a public bombing of our adopted home city (we moved from New York after 9/11). We persevered, and in June, 2013, Cherrytree hosted our first industry conference at the Sheraton Hotel in Boston, which was a well-attended and informative event, and a resounding success.
The Cherrytree Group continued to motor along, and by September we had hired two more people. In November we concluded the move to our current offices, a technologically efficient, attractive workplace, that doubled our size, and gives us room to grow and continue to provide top notch service to our clients. 2013 was the year that we grew from a solo minded enterprise with a maverick entrepreneurial leadership into a “firm”.
Maybe the answers are not in the back of the book Charlie Brown, but turning the pages and figuring them out is sometimes a unique challenge with very rewarding results.