Thursday, October 23, 2014
Inquirer Daily News

POSTED: Wednesday, October 22, 2014, 5:50 PM

The relentless consolidation of the cable TV and Internet industry has also brought consolidation and business failure for local outfits that used to wire customers for Comcast, Time Warner Cable and their many predecessor companies, according to a lawsuit winding its way through Philadelphia Common Pleas Court by two Pennsylvania firms that blame Comcast for putting them out of business.

In the suit, filed in March by Skippack lawyer Charles Mandracchia, his clients Cable Line Inc. and McLaughlin Communications Inc. accuse Comcast Cable Communications of Pennsylvania Inc. of inducing them "to start and finance work in new markets, only to abandon those firms once they had been induced to create the infrastructure necessary for Comcast's expansion."

Based on Comcast's promises, the firms say they hired and trained scores of workers, opened new offices, and borrowed to buy trucks and equipment -- only to have their work agreements arbitrarily cancelled by the cable company and their workers hired away by larger firms Comcast favored.

POSTED: Wednesday, October 22, 2014, 5:04 PM

Over the opposition of Mayor Michael Nutter's appointees, a majority of the trustees of Philadelphia's $4.8 billion city pension plan have agreed to "request" dozens of private firms that are paid to manage city money -- from giants like KKR and Barclays to local investors like Ted Aronson's AJO Partners -- to "disclose their political spending," and will send current and future managers campaign finance disclosure requests, starting Jan. 1.

The move was cheered by city controller Alan Butkovitz, who had recommended this disclosure, noting the city has previously urged similar disclosures by the publicly-traded companies it invests in. "We will be asking for all donations from everybody," including federal and state as well as city contributions, Butkovitz told me in a statement. Read the resolution here. 

The four trustees representing city police, fire, white-collar and blue-collar workers joined Butkovitz in supporting the disclosure request, outvoting Nutter's vote-no faction.The move follows the Securities and Exchange Commission's first-time-ever order that a private money manager, Wayne-based TL Ventures, return $300,000 in state and city pension fees after founder Robert Keith gave cash gifts to Pa. Gov. Tom Corbett and Philadelphia Mayor Michael Nutter while getting paid to manage state and city pension funds, in violation of a 2010 federal law limiting contributions to officials with influence over pension boards.

POSTED: Wednesday, October 22, 2014, 11:41 AM
Gov. Tom Corbett (ALEJANDRO A. ALVAREZ / STAFF PHOTOGRAPHER/FILE)

In the weeks before this fall's election for Governor of Pennsylvania, incumbent Tom Corbett is scattering millions of taxpayer dollars to big businesses through his Economic Growth Initative, a downsized version of the Redevelopment Assistance Capital Program (RACP) that enriched developers under Gov. Rendell.

Yesterday Oct. 21, Corbett gave $3.5 million to help the developer (revised) of a new U.S. headquarters for French-owned building-materials maker St.-Gobain Co. move to a long-vacant office center East Whiteland Township. Corbett says these taxpayer dollars will be "supporting 2,600 good paying jobs," including temporary and secondary service jobs; as I reported in April, St-Gobain is moving 680 people to the site when it vacates locations in King of Prussia and Blue Bell, and might add 100 more over the next five years. Corbett spokesman Jay Pagni says the company is also moving 70 jobs up from Florida, and hopes for additional neighborhood jobs at restaurants and other supporting businesses. Developer Eli Kahn tells me he hopes to attract other companies and more jobs to the complex as well.  St.-Gobain earned more than $600 million, after taxes, last year.

Last Friday Oct. 17, Corbett gave German-owned SAP AG $2 million to help pay for a $16 million data center upgrade at SAP's North American headquarters in Newtown Square, which employs over 2,000. The money will help buy a "600 ton chiller, a 600 ton cooling tower, a new emergency generator," new power supply and equipment air conditioning, and backup power and chiller systems, which will "create, support and retain more than 375 jobs in the Newtown Square area" and "become SAP North America's premier location for supporting cloud growth" and SAP's HANA database business, the state said. SAP earned more than $3 billion, after taxes, last year.

POSTED: Wednesday, October 22, 2014, 10:51 AM
The newly expanded Pennsylvania Convention Center is seen in view of City Hall in Philadelphia, Friday, March 4, 2011. (AP)

Trade magazine and show producer National Business Media says it has changed plans and will move its 2015 NBM show and 4,700+ accredited (update) visitors to the Pennsylvania Convention Center, instead of Atlantic City. The group credited the new work agreements http://www.delawareonline.com/story/news/crime/2014/10/17/pike-creek-crash-closes-polly-drummond-road/17399141/with the Laborers, Electricians and other unions, replacing an old arrangement including the Carpenters and Teamsters, for changing its mind in Philly's favor.  It made the decision after its three-day September show at the center proved "a complete reversal" of the group's experiences in Philadelphia in prior years.

"The professional approach long shown by the Convention Center staff has finally been embraced by labor and others within the state and city," said Susan Hueg, vp at Colorado-based NBM Events, which manages the show, in a written statement. New center manager SMG of West Conshohocken and new center work rules and labor agreements, which for example allow more exhibitors to set up their own booths, show "a greater understanding of the value of trade shows and the business we bring to the area," Hueg added.

Lorenz Hassenstein, SMG's general manager at the site, called the NBM deal "a huge win" and a shot in the arm for the city's hotel industry, whose taxes help fund center operations.

POSTED: Wednesday, October 22, 2014, 10:23 AM
Unisys' headquarters in Blue Bell, Pa. (Photo from Unisys.com)

Shares of Unisys jumped as much as 25% in early trading today, regaining half their loss year to date, after the Blue Bell computer and services company reported higher-than-expected sales of both services and ClearPath server hardware, and tripled pre-tax profits.  Statement and financial results here.

Unisys sales rose 6% in the three months ended Sept. 30, vs. last year, thanks to higher government cloud-computing sales and a boost in server sales, according to analyst Elitsa Bakalova at TBR in New York. "Despite the progress Unisys has made in becoming a next generation IT focused provider, it faces significant challenges scaling its cloud capabilities to match peers which are years ahead and are spending hundreds of millions more per year," she added.

The planned departure of CEO Ed Coleman signals Unisys' hope "to become a more product and business development-focused company similar to its peers CSC and IBM," Bakalova wrote. While Coleman scored for turning around the declining company he turned over in 2008, "his inability to jump start revenue growth after restructuring ultimately resulted in his departure," she added. "We expect Unisys will scale its analytics portfolio through investments in R&D" and deals with major players in target sectors.

POSTED: Monday, October 20, 2014, 1:19 PM
File: Sears at King of Prussia (Peter Tobia photo)

Ireland-based multinational retailer Primark plans to lease the last 100,000 sq. ft. of what used to be Sears' big King of Prussia mall retail store and auto service center, says investor Eddie Lampert's Sears Holding Corp., which runs Sears and Kmart, in this statement. Dick's Sporting Goods already occupies the 75,000 sq. ft. former Sears space upstairs. Sears plans to pull out in about a year. 

Sears also plans to sublet to Primark at locations in Staten Island, N.Y., and five other cities, the company says.  Not immediately clear how the King of Prussia pullout affects Simon Property Group's ongoing plan to expand the retail area to connect the KofP Mall and Plaza. 

POSTED: Monday, October 20, 2014, 9:46 AM

LATEST: Don't get him wrong: "Joe (Corradino) and the team (at Pennsylvania REIT, the mall owner) have done a really good job" of buying and selling shopping centers, activist investor Jonathan Litt tells me. Though "they could be doing a better job" explaining how good some of their malls are to Wall Street investors, Litt added. Then maybe PREIT shares wouldn't trade at such a "persistent" discount to other mall owners. like Simon Property Group (they own King of Prussia) or General Growth (which, like Simon, has lately sold many of its properties.)

To boost PREIT's shares -- his firm owns not quite 1%, worth around $10 million -- Litt went public today with his proposal for PREIT to sell 17 of its 33 malls, including several in the suburbs around its Philadelphia headquarters.L

itt says PREIT should keep its malls in Cherry Hill, Willow Grove, Springfield, the Gallery at Market East, and 12 other high-performing locations -- while "liquidating" those at Moorestown, Plymouth Meeting, Exton, Voorhees and 13 other places with high vacancies/low rents. PREIT shares were up 3% in early trading to around $20.

POSTED: Thursday, October 16, 2014, 1:05 PM

For all the talk about a manufacturing revival in Philadelphia, small factory sites are still giving way to housing in trendy ex-industrial districts like Northern Liberties. 

Frost Development Co., Blue Bell, has agreed to pay $1.58 million to owner JCB Properties Inc. for 413 Green St., the 9,300 sq. ft. former location of Spot Wire Works Co. and, long before, a bakery site. Plans call for knocking over the pale-brick two-story building "to make way for a new residential develoment," pre-approved by the city zoning board for modern rowhome construction, reports Michael Barmash, broker at Colliers International, who represented the seller. Precision Group represented Frost.

A proopsal for the site by KJO Architecture includes four homes on Green St. and up to six around back on Wallace St.

About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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