Con Ed to buy electricity from new plant

Consolidated Edison has awarded a 10-year contract to a power plant proposed for Astoria, Queens, to provide 500 megawatts of electric capacity to New York City. Construction on the 1,000-megawatt plant could begin this fall, with completion set for May 2006. The plant had been stalled because its developer, SCS Energy of Concord, Mass., had been unable to obtain financing. Officials say the Con Ed contract will ensure its financial viability. "We're ready to proceed with our project," an SCS spokesman says. Con Ed agreed to issue a long-term energy contract under pressure from state regulators, who feared that the city could run short of electricity without new capacity. The decision could put in doubt plans by PSEG Power, an unsuccessful bidder for the contract, to build a 500-megawatt transmission line from New Jersey into Manhattan. PSEG Power earlier this month suggested that it might cancel the project if it didn't win the Con Ed contract. Copyright 2003, Crain Communications, Inc MTA chairman admits failings by Wendy Blake In his most comprehensive remarks since state and city officials last week accused the Metropolitan Transportation Authority of deceptive recordkeeping, MTA Chairman Peter Kalikow said Wednesday that the agency was at fault for not being clearer about its financing and that he would propose legislation to make disclosure more transparent. In response to questions about chronic reports of corruption at the agency, he said there was "more [corruption] than I would like, but less than is possible." Most recently, the agency's top law enforcement official, security director Louis Anemone, and one of his deputies were put on leave after citing widespread graft at the MTA. The state agency was accused by state Comptroller Alan Hevesi of moving a surplus of more than $500 million in 2002 to future years' balance sheets in order to create a deficit in 2003, justifying a fare hike this year instead of next year, which is an election year for Gov. George Pataki. Mr. Kalikow, who attributes the surplus to refinancing savings that were spread out over two years to minimize a fare hike, said at a Crain's New York Business breakfast that the agency should have done a better job of disclosing the financing mechanism. That number has been "essentially in every report that we gave" since February 2002, he said, noting that the figure has fluctuated because of tax revenue and ridership assumptions. "At first, I was angry that nobody picked it up, and then sometimes when you do introspection and you think about it, the fault was ours. We issued the reports that we were required to issue by law, but I think in today's time that was not enough." He also said the financing decision was made in concert with "all facets of our state government." Mr. Kalikow said he will unveil within weeks proposals aimed at increasing the transparency of the agency's finances, as part of a package of legislation he sends to Albany to reorganize the MTA. "We could do a better job of communicating with the public about our system, about our finances, and about the way we work," he said. "We will be sending a massive legislative package to Albany, [containing] the most far-reaching transparency legislation ever attempted in a public authority." He said MTA Executive Director Katherine Lapp, his former director of criminal justice services, is working on that project, but would not reveal details. The chairman also defended the governor's right to appoint most of the MTA board members, saying "the governor of New York state is the governor of New York City also. ... I think it's a good system." Copyright 2003, Crain Communications, Inc Guggenheim's carnival by Miriam Kreinin Souccar The Solomon R. Guggenheim Foundation has signed an agreement to build a 240,000-square-foot museum in Rio de Janeiro. The Guggenheim Museum Rio de Janeiro will be created in partnership with the State Hermitage Museum in St. Petersburg and the Kunsthistorisches Museum in Vienna, but will be financed and run by the city of Rio de Janeiro. Cesar Maia, mayor of Rio, will pay the Guggenheim $32 million for the rights to its brand, and pony up the $132 million it will cost to build the museum. The deal, which comes after two-and-a-half years of feasibility studies and negotiations with different cities in Brazil, will give the Guggenheim museums and exhibition spaces in six cities, including its home base of New York. Similar to its agreement in Bilbao, Spain, the Guggenheim will lend its name and expertise to the new facility, as well as access to its collections, special exhibitions and educational programs. The Guggenheim will also advise on the development and construction of the building, designed by French architect Jean Nouvel. Groundbreaking is expected to take place this spring. The Rio museum comes at a time when the Guggenheim is retrenching in New York. In December, the Guggenheim cut its budget and canceled its plans for a $950 million, Frank Gehry-designed megamuseum in lower Manhattan. Copyright 2003, Crain Communications, Inc John Kerry takes lead in NYC fund-raising by Philip Lentz Presidential candidate Sen. John Kerry, D-Mass., is the clear front-runner when it comes to raising money from the city's fat cats. Based on first-quarter reports of Democratic presidential candidates, Mr. Kerry raised $613,000 from city residents. Mr. Kerry has been the most aggressive of the White House wannabes in organizing here. He was the first candidate to put a full-time staffer here--former House aide Jamie Whitehead--and earlier this year named businessman Dennis Mehiel to oversee his New York effort. Sen. John Edwards, D-N.C., who has received strong support from his fellow trial lawyers, was a surprising second in New York City with $384,000. Sen. Joseph Lieberman, D-Conn., who has strong ties to the city's Jewish community, was third, with $302,550. Of the other major candidates, Rep. Dick Gephardt, D-Mo., raised $173,100, and former Vermont Gov. Howard Dean raised $165,534. Nationally, Mr. Edwards leads with $7.4 million, slightly more than Mr. Kerry's $7 million. Copyright 2003, Crain Communications, Inc Apparel label maker Paxar to cut more jobs by Wendy Blake Paxar Corp., one of the world's largest maker of apparel labels, plans to cut 350 jobs this year--more than previously expected. The White Plains company said earlier this month that it would eliminate about 120 jobs. In all, the cuts represent about 4.5% of the company's worldwide workforce of 7,700 people. Company officials were unavailable for comment on where the ax would fall. White Plains-based Paxar also said Tuesday that first-quarter net income fell 81% from a year earlier, to $1.4 million from $7.5 million. Sales rose 7% in the latest quarter, to $163 million. Industry observers blame the company's failure to shut high-cost U.S. operations fast enough as it expanded its overseas manufacturing. The company's stock fell 14% Tuesday on the news, to $10.05. The shares have plunged from a 52-week high of $18 in June 2002. Copyright 2003, Crain Communications, Inc Delia's gets credit, delays year-end results by Wendy Blake Manhattan-based teen retailer Delia's announced Wednesday that it has obtained a three-year, $20 million secured credit facility. The company, which operates a Web site, catalog business and retail stores, amended the terms of its loan with Wells Fargo Retail Finance to get the new facility. It comes on the heels of a deal Delia's made earlier this year with Jay Schottenstein, chairman of Columbus, Ohio-based Value City Department Stores, and Group 3 Design, a Manhattan-based licensing company (Crain's, Feb. 10). The partners teamed up to advance the money-losing company $16.5 million in cash against future royalties. Delia's also said it is seeking $2 million in additional capital and a mortgage refinancing, and that it will delay filing its fiscal 2002 results until it gets the extra help, in order to receive an "unqualified audit opinion." Shares of the company were trading at about 41 cents early Wednesday afternoon. The stock debuted at $22 in April 1999, during the IPO boom, and hit an all-time high of $62 that same month. Copyright 2003, Crain Communications, Inc NYSE re-admits Al-Jazeera reporters by Wendy Blake The New York Stock Exchange has allowed Al-Jazeera to broadcast again from its exchange floor, ending a monthlong ban of the Arab satellite news channel that began when it aired footage of American POWs in Iraq. Al-Jazeera had broadcast market reports from the NYSE since 1996, and the ban led to accusations of discrimination from groups including the New York Civil Liberties Association. When they ousted the channel, Big Board officials said it was prompted by space limitations. The officials later admitted that the NYSE had received complaints from brokers. Copyright 2003, Crain Communications, Inc Report: NY business conditions hit new low by Tom Fredrickson Business conditions in New York City are at their worst levels in more than three years, according to local purchasing managers. The NAPM-New York Report on Business, a publication of the New York branch of the National Association of Purchasing Management, reports that the city's business doldrums reached a level in April not seen since December 2000. The "business conditions index" rating of 234.5 this month represented the third straight monthly decline, a weighted average of survey data from manufacturers, service companies and construction firms. The index was 240.3 in March. "The survey supports the widely held conclusion that economic conditions continue to deteriorate in the city with no likelihood of a quick turnaround," says Marc Goloven, senior regional economist at J.P. Morgan Chase & Co. The all-important services sector swooned, diving to 32.9 in April from 36.8 in March. The rankings are on a scale of 1-100. The April figure is the lowest for the index since January 2002. Of about 25 service-sector respondents, not one reported that business was improving, while about eight said business was deteriorating. One positive glimmer: The manufacturing sector posted a strong 86.8 showing (figures of 50 or above reflect expansion). However, manufacturing contributes only about 1/18 as much to the city's economy as the service sector does, Mr. Goloven says. Copyright 2003, Crain Communications, Inc Anti-spam company sets up shop in NYC by Anita Jain MessageLabs, an anti-spam and anti-virus software company based in the U.K., is setting up its U.S. headquarters in midtown Manhattan. It has signed an eight-year lease for 14,000 square feet of space at 512 Seventh Ave., at the corner of 37th Street. The company, which generates $20 million in annual revenue globally, employs 20 in its New York office, all but three hired in the last three months. It hopes to double its headcount by the end of the year. Jos White, co-founder and president for the Americas division, said the company is looking to hire staff in sales, business development, and marketing. With most of its competitors on the West Coast, MessageLabs plans to makes inroads into what it considers a largely untapped market of financial, government, and media customers concentrated in New York, Boston and Washington D.C. "We're building out a self-sufficient operation that is not going to be dependent on the U.K.," Mr. White says. Copyright 2003, Crain Communications, Inc Imclone shares fall as CEO, chair resign by Wendy Blake Shares of ImClone Systems fell as much as 3.3%, to $18.01, in morning trading Wednesday on news that the beleaguered biotech firm's top two executives will step down amid an investigation of the company's accounting. The stock was down 1.6%, to $18.33, at 2:45 p.m. Dr. Harlan Waksal--who took over the CEO job last year after Samuel Waksal, his brother, was ousted --was demoted to chief scientific officer, the company announced late Tuesday. Robert Goldhammer resigned as ImClone's chairman. Chief Financial Officer Daniel Lynch was named interim chief. Securities regulators are investigating ImClone's alleged failure to make tax payments on stock options exercised by ex-CEO Sam Waksal and other officers and directors. Manhattan-based ImClone has been embroiled in scandal since late 2001, when the Food and Drug Administration rejected its application for an experimental cancer drug. A spate of insider trading ahead of the FDA announcement led to insider charges being brought against Sam Waksal for tipping off relatives and associates, including Martha Stewart. Mr. Waksal has pleaded guilty to some of the fraud charges. Copyright 2003, Crain Communications, Inc