Wednesday, April 23, 2014
Inquirer Daily News

POSTED: Thursday, April 10, 2014, 8:23 AM

Standard & Poor's Ratings Services last night cut New Jersey's main general-obligation bond rating to A+, lower than any other state except California (A) and Illinois (A-). The agency also cut NJ's debt backed by legislative appropriations to A, from A+, and its "moral obligation" debt on bonds state taxpayers are likely to bail out in case of default to BBB+, a little above junk-bond status, from the previous A-.

Among neighboring states, Pennsylvania is AA with a 'Negative outlook,' New York is AA with a 'Positive outlook,' and Delaware is AAA, the top rating.

The cuts are a sign that "measures used by the state to balance the budget will contribute to future budgetary pressures," S&P analyst John Sugden told clients in a report. He blamed New Jersey's "trend of structurally unbalanced budgets that include only partial funding of pension obligations, and the reliance on one-time measures" that will force higher taxes or bigger service cuts in the future, plus the state's "above-average debt burden."

POSTED: Wednesday, April 9, 2014, 2:16 PM
The AQ Rittenhouse tower will be "a 12story, 110-unit first class luxury mixed-use multi-family apartment building with street level retail/restaurant and lower level full floor institutional tenant," according to the web site of its developer, Aquinas Realty Partners. (Photo illustration from aquinasrealty.com)

Leonard S. Poncia, boss at Havertown-based Aquinas Realty Partners, was shoveling credit around liberally -- to Mayor Nutter, Councilmembers Darrell Clarke and Jannie Blackwell, the Philadelphia Redevelopment Authority, the Center City Residents Association -- at the ceremonial groundbreaking for his 12-story, 110-apartment AQ Rittenhouse tower, 2021 Chestnut St., this morning. As new construction, the tower will enjoy city new-construction real estate tax breaks; no other public support has been awarded, so far, says Poncio.

The $40 million-plus tower is backed by, among others: equity investor Joel S. Brudner's and Christopher McCallion's MB1 Capital Partners, Wall, N.J., which is also backing projects in Brooklyn, Dallas, Bellmawr and Morristown; lenders, Santander Bank (the Spanish outfit formerly known locally as Sovereign) and the Board of City Trusts (headed by South Philly Democratic politician Robert Donatucci, the board oversees Wills Eye Hospital, Girard College and other city charities).

Builder is Clemens Construction Co., whose placards are all over Center City, and whose next projects include a Brown's ShopRite in the city's Mantua section near Drexel; one of the architects is BLTa's Michael Ytterberg, highrise-midrise designer to colleges and other institutions, who says his firm is good at filling the "infill" sites "that are mostly what you have to work with in Philadelphia"; architect of record is Peter Stampfl. Freire Charter School, based next door, was thanked for its cooperation and CCRA president Jeffrey Braff for his patience and support. CBRE | Fameco  seeks first-floor retail tenants to fill spaces up to 5,000 sq ft.

POSTED: Wednesday, April 9, 2014, 8:58 AM

NEW UPDATE from Budd rep Steve Blow below - Budd Co., which made heavy vehicles (like many of the bright stainless-steel Septa railcars still rattling in and out of Philadelphia) at its former Red Lion Road and Hunting Park Ave. plants and other local and Midwestern facilities, has declared bankruptcy again and intends to "modify" its retiree healthcare benefits and make retired workers pay more for some services.

That has Budd's several thousand retirees in Pennsylvania and elsewhere, like Gordon Carlson, who spent 20 years on the line as a UAW union worker and 13 more in management, concerned "about our retirement pay but also medical benefits that retirees have, to include prescription, eyecare and dental," Carlson tells me. He adds that neither union nor management retirees have been told much, so far. Here's a link to documents from the Chicago federal bankruptcy filing: http://dm.epiq11.com/TBC/Project , see also a Bloomberg news story here. 

NEW UPDATE: Steve Blow, spokesman for Budd, adds detail in a new statement replacing his more general earlier claim: Budd's current owner, the German manufacturing conglomerate ThyssenKrupp NA,"is picking up the pension obligation." But the healthcare plan, which "has only $400 milllion to cover $1 billion [in] liabilities," will likely be reduced, and, once the new plan is worked out, it's likely that retirees will have to pay for some medical-related costs that Medicare won't cover.

POSTED: Tuesday, April 8, 2014, 2:14 PM

George Brady, vp-sales at PDS Software in Blue Bell, "was appalled" two different ways when he read Paul Nussbaum's eye-opening Philadelphia Inquirer story on a consultant's report that the Pennsylvania Turnpike Commission paid Colorado contractor Ciber Inc. $58 million -- for what should have been a $10-15 million software implementation job -- if it was even needed:

"As a taxpayer and tollpayer," Brady says that was way too much to pay any installer -- and as a boss at a previous Turnpike software vendor, he says he knows there was a much cheaper way.

In 2008, the Turnpike Commission hired Ciber to put in an enterprise-planning resource (ERP) system purchased separately from SAP Americas, the giant Newtown Square software maker that competes with other Big Software giants like Oracle and IBM. That SAP system replaced a 10-year-old human-resources and payroll system pruchased from PDS -- which cost just $300,000 back in 1998 and could have been maintained, instead of replaced, for just $80,000 a year, Brady says.

POSTED: Tuesday, April 8, 2014, 11:28 AM

UPDATE: Bob Fernandez's excellent advance review of today's US Senate hearing on the Comcast-Time Warner deal in the Philadelphia Inquirer here. EARLIER: Comcast is amplifying its case supporting its planned purchase of Time Warner Cable in Washington, where it hopes to calm any remaining critics in Congress, while also satisfying monopoly-busters at the US Department of Justice Antitrust Division and media-markets overseers at the Federal Communications Commission.

Read Comcast's (and Time Warner's) summary statement re its 650-page FCC filing here.  See also Broadcasting & Cable's points here and Bob Fernandez's Inquirer story here. In brief, the company argues the deal will not reduce cable competition beyond current levels; it will enable Comcast to speed service and expand programming for Time Warner customers; it argues that video is actually a pretty competitive business, and that there are also multiple competing Internet providers out there. Speaking to reporters, Comcast EVP David L. Cohen also held out the possibility the deal will help Comcast "accelerate" a "national wi-fi network." "We think big is very good in many respects," he added.

Asked about competition from Google's telecom fiber network, Cohen said Google is "substantially larger than we are," and "Google will force us to up our game," and that Comcast needs the "scale" it will pick up by buying Time Warner to compete with Google and others.

POSTED: Monday, April 7, 2014, 4:32 PM

Now that the SunGard Data Systems/Sungard AS split is official, when will KKR, SilverLake and the other big private-equity firms that paid $11.4 billion for the Wayne software conglomerate back before the recession get paid? Excerpt from SunGard's transcript of its February conference call:

 Guy Baron, RBC Capital Markets: "Hi, good morning. I just had a few clarifications here, actually. So just first off, I understand in terms of the spin and the tax treatment you are relying on outside opinions. And what I'm sort of wondering is, is there a definitive time frame during which you need to pursue an IPO or a sale of either entity, post-spin, in order to qualify for the tax status or is that really an open-ended time frame?"

Russell Fradin, SunGard Data CEO: "No, it's the latter, meaning part of why we're doing what we're doing is let all of the seeds, as I said before, germinate in their time, meaning this really gives us complete flexibility in terms of when we choose to do an IPO on either side of the equation. So you are reading that exactly right, that there's a huge benefit in being able to have that flexibility."

POSTED: Friday, April 4, 2014, 5:53 PM
Ira Lubert (CLEM MURRAY / Staff Photographer)

Investor Ira Lubert, the Philadelphia-based investor who heads the group that runs the Valley Forge Casino Resort, says he knows why Pennsylvanians aren’t gambling more: Gambler fatigue. " We’re just starting to see it."

State figures show slot machine revenues have been down for the past five months, slipping around 6 percent in March over last year’s bet. But at Valley Forge, slots revenue was up 18 percent. It’s also one of the minority of Pennsylvania casinos that registered higher table game revenues in February, the last month the state reported data.

“Customers want more out of the gaming experience,” Lubert says. His establishment, like the ailing Nemacolin resort south of Pittsburgh, has a restrictive license that makes it tougher to just walk in off the street and bet. Lubert’s team has tried to turn that to their advantage by recruiting wedding parties, corporate meetings and other hotel groups alongside events like an Off Broadway play, comedy and entertainment, the occasional mechanical-bull night. And USAirways: Lubert signed what he says is the airline’s first affinity deal, where customers can apply frequent-gambler points for frequent-flyer miles on Philadelphia’s dominant airline.

POSTED: Friday, April 4, 2014, 5:10 PM

A five-story Center City office building, the marble-trimmed and Classical-detailed, 5-story onetime factory at  2301 Chestnut St./2300 Ionic St., has been sold by Frank Seidman's Capital Solutions, of Blue Bell, to Denver investor Michael Plante, for $23 million.

The block-long office is wholly occupied by engineering and design firm KlingStubbins, which has an agreement for 9 more years, says Douglas Rodio, senior vice president at JLL Capital Markets Group, which represented both sides in the deal.

The new owner "plans to own it as an office building; at the end of the lease term, it has the potential to be a successful office building, or go to an alternate use such as multifamily," Rodio tells me.

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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