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PhillyDeals: Standard & Poor's cuts N.J.'s credit rating to A

Two days after Gov. Christie called credit rating agencies "bums" for their failure to predict the financial crisis of 2008, Standard & Poor's Wednesday cut the state's credit rating to A from A-plus.

To sell Delaware Station, a former power station in Fishtown, Exelon has chosen Binswanger as broker. (File photo: Alejandro A. Alvarez / Staff Photographer)
To sell Delaware Station, a former power station in Fishtown, Exelon has chosen Binswanger as broker. (File photo: Alejandro A. Alvarez / Staff Photographer)Read more

Two days after Gov. Christie called credit rating agencies "bums" for their failure to predict the financial crisis of 2008, Standard & Poor's Wednesday cut the state's credit rating to A from A-plus.

The agency cited the Republican's failure to cut a deal with the Democratic-controlled General Assembly to either pay for or rein in growing public school and state worker pension costs.

Lower credit ratings tend to force borrowers - in this case, taxpayers - to pay more when they raise cash by selling bonds for schools and other projects. Only Illinois (A-minus) now has a lower credit rating among U.S. states.

S&P analyst John Sugden in a report to clients cited the "misalignment" between New Jersey tax revenues and state spending following Christie's "reduced funding" of state worker and public school pensions in recent budgets.

This came after Christie, in a Monday press briefing, answered a question from my Inquirer colleague Andrew Seidman by dismissing concerns from rating agencies like S&P, Moody's, and Fitch, which have all warned that New Jersey's spending and income are getting further out of whack.

Christie said credit analysts "are being significantly overaggressive because they were such bums back in '08 and '09 and left everybody hanging out to dry. So now they want to prove that they're not, because they're getting sued by everybody in the world for their bad reports before."

Christie added: "I don't know if they're any better now or just as inaccurate on the negative side as they were inaccurate on the positive side back five years ago. I don't pay a lot of attention to these guys. They get paid to give opinions. It's like reading the op-ed pages, you know? I don't spend a lot of time doing that either."

Which leaves this question for taxpayers: Will bond buyers accept the governor's view and not worry? Or will they agree with the rating agencies, and charge taxpayers extra?

Power up

Exelon Generation Co. L.L.C. has tapped Philadelphia's Binswanger real estate brokerage to sell Delaware Station, the former Philadelphia Electric Co. power plant on 16.4 acres at 1325 N. Beach St., next to Penn Treaty Park in the city's lively Fishtown section.

The hulking World War I-era plant with its high ceilings, designed by John Torrey Windrim, whose projects also included the Franklin Institute, the former Philadelphia National Bank building, and his Devon mansion (currently being rebuilt with help from Amish ironworkers), resembles the Chester power plant Windrim built for the Delaware County Electric Co. in the same era. The Delco structure was rebuilt as an office center by developer Michael O'Neill in 2000.

Delaware Station includes almost six acres that are underwater, a 223,000-square-foot plant on five acres, a four-acre leased surface parking lot that can be shut on six months' notice, and a one-acre backup Exelon generator bank that is slated to stay running until 2030.

According to a statement by Binswanger's Frank Cullen and Chris Pennington: "The property will be sold on a sealed-bid process with offers due in writing by 5 p.m. on Nov. 3, 2014. All potential buyers must register with Binswanger by Oct. 15, 2014."