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THE CINCINNATI ENQUIRER SUNDAY, SEPTEMBER 22, 1991 SECTION I ' NYSE listI-4 0 NASDAQ stocksI-6 Q) Amex stocksI-8 Mutual fundsI-8 BUSINESS NEWS, 369-1962 H 312 iloi rises above questions Mark Braykovich Developer optimistic despite vacancy rate nsurers BY JEFF HARRINGTON The Cincinnati Enquirer criticize s the orange elevator cab makes its noisy ascent to the top of 312 Elm, it unveils not one construction site, but fi a dozen of them. rating firms I lip, : . ', r . viu r , $ V '"I : 11 M . . ,; r U.J 8 a H ;i1 a lain , rm I 13 3 3 3 3 1 Hia jjaali ? qfM a -... mL:uM i If . ,1 11 "I ii L; ' W B :n 1 i3llll rZT IlsiiTffilaaM MM"1" v r -W UW8iia taiaa aL IjtMu. ! The pungent smell of epoxy-laden window frames being set in place wafts through the air when the elevator cranks by the 11th floor. Further up are separate teams of electricians, mechanics, welders, and fireproofers. Finally, the vibrating cab grinds to a halt at the open-aired 22nd level, where a concrete floor has recently been laid. Three stories above, steelworkers who just finished topping out the building's framework clamor down the stairs out of the rain. "It's really like conducting an orchestra," says Steve Lydy, vice president of Duke Construction Management, developer of the $60 million downtown tower. "There's thousands of players who each have to do their own part, working together." This symphony of a downtown skyscraper coming to life a popular tune in the 1980s probably won't be heard again soon in Cincinnati. 312 Elm rises at the end of a decade-long construction boom. It's perhaps the last downtown office building constructed with minimal pre-leasing and likely the last addition to the downtown skyline until at least 1993 or 1994. Most other long-planned skyscrapers, like Fountain Square West and Queen City Square, are on hold because of a lack of capital, tenants or both. Meanwhile, more (Please see ELM, Page 1-3) 1 These are volatile and often heated times in the life insurance industry, which I learned first hand last week. After writing about ratings for life insurers, I stand accused of: Contributing to a "run-on-the-bank" mentality on life insurance companies that are fundamentally healthy. ' Steering Cincinnatians away from local life insurance firms. Not giving equal time to insurers. I plead innocent on all charges, but in my conversations with several insurers last week, some good arguments were presented on why consumers should or should not pay attention to this or that rating agency. . The best, by far, comes from Cincinnati-based Manhattan National Life Insurance Co., whose travails in dealing with three rating agencies A.M. Best, Standard & Poor's, and Weiss Research are the kinds of things that make you go hmmmmm. More important, Manhattan's story illustrates the point that consumers shouldn't rely solely on ratings in deciding where to buy the next life insurance policy or annuity. ' : Tha's because there is always more to the story. Just ask Chuck Scheper, Manhattan's chief operating officer. "We're just concerned that there is a lot of misinformation out there," he said. Specifically troubling to Scheper was my most recent column's mention of current ratings for Manhattan: A- (fifth best rating) from Best; Bq (its finances are consistent with other insurers offering below average security) from S&P; and C ("fair" but in the top 30 of all "fair" firms) from Weiss. ' The S&P grade bothers Manhattan . the most. In April, S&P started giving "qualified" solvency ratings to insurers that hadn't asked or paid to be rated. No one from S&P consulted Manhattan while doing the grading, and S&P didn't consider the firm's favorable 1990 results, Scheper said. ' But Manhattan is guaranteed to get a better grade if it merely agrees to pay S&P a $25,000 fee. The company's 31 2 Elm by the numbers Duke Associates expects to finish this downtown tower at the northeast corner of Third and Elm streets by April, 1992. Some of the figures involved: Development cost of $60 million; running 4 under budget. Prudential Insurance Co. will anchor the building with 550 employees taking three floors, or roughly 91 ,000 square feet. 25-story building, including a 10-story parking deck with 1 ,064 spaces and 360,000 square feet of office space on floors 11-25. 2,400 tons of reinforcing steel. 130,000 square feet of precast cladding. 30,000 cubic yards of concrete. 750 windows. 1 6 companies on site (from electrical and plumbing contractors to concrete companies and steelworkers) employing about 140 workers. v Workers on the job 1 6 hours a day, five days a week and usually eight-hour shirts on Saturdays. Net rental rate of $15-$16square foot. Still indefinite is a second phase costing $85 million and including 30 stories and 550,000 square feet of office space. JEFF HARRINGTON Steelworker Rodney Baugh, on top floor of 31 2 Elm, hooks a cable to steel that will be moved. agents would like the firm to pay up and improve its rating because that s wnat consumers nav attention to. "It's a real dilemma for us," Scheper said. My gut tells me not to do it; it means oavine the ransom price. An S&P spokesman said the agency stands bv its ratines and is not strong- arming anyone. Also, changes are com-inn in the Qualified ratine svstem. As for Weiss' C rating, Scheper armies the auencv misinteroreted some information" in giving the grade, which nrpvinnslv was a B (meanine "eood"). q &. ' --n $ Hi ( i'k 4J f m U'UTt .v' 5 5 S is;s::i.. 'wfS-H ., . 3 m v :,: n r k v'ri!'::..,, Weiss officials acknowledged that discus sions with Manhattan have taken place and that a new ratine is on the way. Even the Best score, which means "excellent," isn't totally satisfying to Manhattan. The insurer believes it de serves better, but that Best is slow to upgrade ratings it won't be until at least 1992 that the agency consiaers me insurer for a new grade. ' The lesson here is that consumers nppH more information than hist ratines. Chuck Scheper agrees: Manhattan's top executive is even taking cans irom pou-rvhnlrfers to answer Questions. So who do you call to ask about your insurer's health? Mv advice: Call Best. Call S&P. Call Weiss. Ask for details that go beyond the rating such as how much junk bonds, mortgages ana reai estate does the firm own. More calls Above: Jim Cshoborg, in rear, helps guide a precast concrete panel into position to weld onto the side of the 22nd floor. John Doherty acts as a spotter. Left: A steelworker for Ben-Hur Construction directs the tower crane to hook onto a beam. . Speaking of Weiss, the firm is two weeks awav from releasine its latest ratings on 1,900 insurers. The new ratings will be based on tirst-quaner data. For those who cot a busy signal trying to call me for Weiss' phone number: 800-289-9222. It costs $15 for each rating given by phone, and more for riVtailed renorts on individual companies. ll L .Av-xsji- n if. i: '!- f. ;. vvj Enquirer photos by Tony Jones w Mi :: j K It was good to hear again last week from, coincidentally, the former head of Manhattan National Life, Paul Aniskov-irh Ir. He writes: "I am somewhat Steve McAllister welds a beam onto the top floor, offended that U.S. Financial Life (Insurance Co.) was omitted from your (Sept. 15) column." Now chairman of U.S. Financial. 1 headquartered in Cincinnati, Aniskovich wants everyone to know his company rets an A from Best, the third hiehest rating given. (However, it gets a C, or Vlair, from Weiss.) LaRosa's is making it easier for pizza lovers to have their food delivered on time at home. With a new computer system and central number, Cincinnati's hometown pizza parlor goes high-tech. Bigg's likes to stand out in the supermarket wars. A new ad campaign tries some different approaches to selling familiar products, reports Selling Points columnist Patricia Gallagher. Procter & Gamble Co. stock remains an attractive buy even as the recession buffets companies big and small. "Investment Report." j Mark Braykovich's Money column ap pears each Sunday.