To be clear, there is as yet no evidence of criminal activity in the PAETEC / Windstream deal. Which is not surprising. There is also nothing in the deal which, in terms of gross corporate governance, violates any maxim of ethics. Also not surprising.

But is that and should that be the limit of our concern? The Rochester Business Journal seems to think so:

After Paetec, Rochester Business Journal:

But either way, the first obligation of Paetec’s board is to its shareholders. Anyone who thinks otherwise has forgotten that Paetec is publicly held-and has not been paying attention to what Mr. Chesonis has said a number of times since 2007.

This same basic idea is echoed, ad nauseum, by Rochester’s own Corporate Council Mayor Tom Richards. But is that and should that be the limit of our concern? I’ve made the point in the past that getting indignant about the situation isn’t going to make it any better. But somewhere between screeching about Bob Duffy needing to get involved and the bland corporate boilerplate response is what is probably a better position for the leader of a city about to lose its shirt. Again.

No, there may in fact be nothing wrong here, in terms of the rules of the game that lawyers and judges have setup for lo this many centuries. But this is somebody’s home. This is Rochester. And if Midtown wasn’t what we remember its former glory to be, prior to being knocked down, it is still our pride and the center of the town we call our home… even if we’re really from East Rochester or Gates. Business is not just business for us.

We do not need to be told that we lost fair and square. We don’t need “funeral chatter” about how Midtown “isn’t suffering anymore” or “has gone to a better place” or that the result was always a risk with such a tricky procedure. We need someone to stand up with an ounce of pride and, without groveling and insisting “we’ll do all we can to keep them here,” get in the game and find out what it takes to make the sale. Are we really going to beg a company from fucking Arkansas to stay in New York State? Is that the level of pride we’ve been reduced to? Because our leadership can’t come up with anything better?

And lets be fair: I’m not talking to Mayor Richards myself. I’m not a journalist; I’m not interviewing him or watching him be interviewed or editing interview film. I have no first-hand knowledge of how he feels about anything. Perhaps the news media, in its panic to cover such a big story, is missing the nuance of the Mayor’s position. Maybe the effervescent positivity corporate lawyers are so famous for isn’t coming through.

But then, the news media is hardly anyone’s only outlet, is it? Pretty sure that, even in these hard economic times, Blogger accounts are free.

Of course we knew: this thing was going to look a whole lot uglier once the SEC filings came out. And indeed it does:

PAETEC, Windstream Agreement Has Headquarters Out – Rochester, News, Weather, Sports, and Events – 13WHAM.com.

One of the principles in the demolition of the Midtown Plaza site says in the article that he doesn’t believe there was any deception. Funny: I wasn’t told, were you?

So, how many other people were so forthcoming without telling us?

As the facts roll in on the PAETEC / Windstream buy-out, the thing that keeps getting under my skin is: Rochester is almost completely devoid of financial or economic news in any real sense.

PAETEC to be sold to Windstream | Democrat and Chronicle | democratandchronicle.com.

The CEO of Windstream says they’ve been looking at PAETEC for “a long time,” and both CEOs seem to know each other. I’m not saying that this deal absolutely would have been sniffed out with a better economic journalism team, but certainly, it would have been less of a surprise. Instead, we have people at the D&C and elsewhere who normally cover completely different topics struggling to understand and digest the details of the merger. That doesn’t bode well for an informed electorate.

What passes for economic news in this town ordinarily is the Rochester Business Journal and the D&C’s Business sections: two resources that might as well be RSS feeds for local company’s press releases. That’s when they’re doing good work. When they’re doing bad work, they’re producing dating videos for local businesses. “NonDescriptCompanyX enjoys long walks on the beach, hot cocoa and providing innovative, customized service solutions to its valued customers.”

But in this deference-rich, politely conservative Hobbit culture of Rochester where nobody’s allowed to ask difficult questions without being branded as a kill-joy, is it too much to ask that someone specialize in picking apart the details of the financial underpinnings of our economy? Maybe.

This was an old blog post, but I’d missed it. Rachel Barnhart ( @rachbarnhart ) flagged it this morning while discussing the Johnson presser about Midtown:

5 Things About Midtown Project You Didn’t Know – Rochester, News, Weather, Sports, and Events – 13WHAM.com.

The thing that really grabs me is the first bullet: that part of the PAETEC deal is to construct a tunnel directly from the parking garage to the office building.

Wasn’t the major selling point of the project supposed to be revitalizing downtown? Everyone generally agrees that the tunnels that used to connect Midtown to its neighboring buildings were major setbacks for foot traffic on Main St., but at least they were above ground. This new tunnel system goes underground and right past all the businesses that might have sprung up in the wake of this new influx of money and opportunity. Its almost like you could work there every single day and never admit you worked downtown.

It raises the spectre of the siphoning of money out of Rochester that many residents complain of: relatively wealthy suburbanite people build businesses downtown and take their money right back to the ‘burbs. In this case, that spectre is rather a lot like a ghost, passing in and out of the city with barely a notice.

Of course by now you’ve certainly heard the bad news: PAETEC is no longer sponsoring or naming the stadium that the Rhinos play in. Hate to say it, but I think we’re officially seeing the company that grew so fast over the last few years cratering before our eyes. The light that burns twice as bright, and all that, I suppose.

So who will pick up the sponsorship of the stadium after this? Not that I’ve ever been to a soccer game or plan on it, but I’d hate to see a stadium sized opium den installed within eyesight of Kodak’s ninth-floor cafeteria. I vote for Nick Tahou’s, personally. At least you know they’re not going anywhere.

But who else could sponsor the stadium?

Lyell Ave Smoke Shop Stadium?
The Diplomat Party House and Stadium?
Naughty and Nice and Soccer Stadium?
The Mirage Stadium?

Hmm. . . lots of potential, there. . .

Channel 13’s Allison Watts is reporting via Twitter that SEC filings reveal 222 jobs will be lost at Paetec, though there’s no word yet on where those jobs will be coming from. I’ve gotten reports today via anonymous tipsters that some layoffs have happened in the Tulsa, OK office, so obviously not all job losses will be here in Rochester. A sigh of relief locally, with apologies to those of you in other offices. . .

Meanwhile, Channel 8 here in town is saying that the layoffs could take as long as till 2010. How they arrive at that date is in question, however. The company says it will pay about $6.6m in severance in the process.

All this information comes from an SEC filing by the company, which you can read here. The operative sentence in question in Channel 8’s reporting is here:

The Company expects to incur total charges of approximately $6.6 million through the end of 2010 in connection with the terminations, the majority of which relate to cash severance costs.

As I read this, it does not seem to mean that the layoffs will continue through 2010, but rather that the continuing payment of severance will probably continue through 2010. Anyone expecting a reprieve based on Channel 8’s reporting is, I fear, out of luck.

13WHAM.com confirms what I’d been hearing in whispers yesterday: Paetec is definitely making cuts. A reader flagged this article for me, thank you.

You’ll remember that Paetec has been having some very serious troubles of late, long before the rumblings of our current economic crisis were making headlines. They’ve been down in the penny stocks range for about half a year or so. This has been worrying to Rochestarians, especially in light of Paetec’s plans for the former MidTown center, which may very well be in jeopardy.

The company employs 800 people in Rochester. The rumor I’ve been hearing – entirely unconfirmed by any authoritative source – is that as many as 300 people could be let go. No time frame has been either rumored or announced. I’ll be keeping an eye on this story as it develops.

And once again, if you have information you’d like to share – from scuttlebutt at work to authoritative fact – I’d be interested in hearing it. You can leave feedback for me here, and your information will remain anonymous.

Rachel Barnhart discusses the “Headquarters Curse,” as it applies to Paetec’s recent dismal reporting.  As yes, just what we need: yet another thing we have going for us in Rochester.  I’ll be honest: the thought occurred to me as well.  I mean, seriously, what does the Paetec plummet mean for their downtown headquarters and will people still be able to get cheap smokes there in the meanwhile?  She misses a big one in the pantheon of failed enterprises in downtown, which is Frontier / Global Crossing.

If this sticks, we should probably just focus on exporting serial killers. . .