St. Louis Post-Dispatch from St. Louis, Missouri • Page 53

'rffr "'ri ST. LOUIS POST-DISPATCH i SECTION SUNDAY, MAY 29, 1994 lllllflrf DAVID NICKLAUS ON ECONOMICS Developer Countin Ihings are better than they were, but that's probably not saying a lot. On Finance Business Trying To Recover From Real-Estate Crash By Adam Goodman Of the Post-Dispatch Staff St. Louis developer Andrew S. Love Jr.

is returning to the roots of his family's business. With his real-estate empire only a vestige of what it was just a few years ago, Love now is counting on his finance business to pay the bills. "The mortgage banking business is probably the most active and encouraging area right now," Love said. Love is a prominent St. Louis lawyer who in the 1980s built the mortgage business his great grandfather founded more than a century earlier into a real-estate colossus.

Known as Love the conglomerate and its affiliates owned more than $500 million worth of office buildings, shopping centers, apartments, retirement centers and hotels in 20 U.S. cities. Love also bought his own savings and loan in St. Louis with help from partners John F. McDonnell and James S.

McDonnell III of McDon- nell Douglas Corp. The McDonnells weren't the only influential investors doing deals with Love. His real-estate i AM Renyold FergusonPost-Dispatch Andrew S. Love chairman of Love Cos. mm 1 flu) nn nj 0 Sr a3 KpuB -Y AO 9tm Jobless Rate Doesn't Tell The Job Story The memories'all seem so distant: Keith Hernandez was having an MVP season for the Cardinals.

A near-bankrupt Chrysler Corp. was plead ing for a government bailout. And the St. Louis economy was ticking along with a 4.8 percent unemployment rate. Hernandez is long gone from Busch Stadium, and Chrysler is fully recovered from its financial woes, but the local economy is, at least statisti cally, right back where it was in that summer of 1979.

After enduring the severe Rust Belt recession of the early 1980s when the jobless rate here got as high as 12 percent and the military cutbacks of the late 1980s and early 1990s, most St. Louisans would say that unemployment under 5 percent looks pretty good. But we can't turn back the clock quite so easily. The economy looks a lot different than it did 15 years ago. For one thing, 25 percent fewer St.

Louisans actually make things. Manufacturers employed 193,600 people here last month, compared with 259,200 in 1979. Services jobs, up 73 percent in 15 years, and retail jobs, up 28 percent, have more than picked up the slack. But those manufacturing jobs are missed. The new service workers aren't all burger flippers, but they don't make as much as the people on the auto assembly lines.

The average worker in goods-producing industries here makes $612 a week; the average service worker makes $318. And don't let the low jobless rate get you thinking that you can tell off your boss and quickly find a new job. "Look at the numbers and you would say it might not be too tough to find a job," said Russ Signorino, a labor analyst with the St. Louis County Economic Council, "But most people who are unemployed are still saying it is a tough job market out there. "If jobs were easy to come by, the unemployment rate would be significantly lower than it is.

You would see significant gains in wage rates, and you would see manufacturing employment rising instead of continuing to fall. Manufacturers for the most part are still adding overtime hours rather than adding workers when demand picks up." Because the St. Louis area's population has grown so slowly, Signorino said, truly strong labor demand would drop the unemployment rate below 4 percent. That's a possibility he doesn't rule out happening in the next couple of years. But, he said, job searches still wouldn't be as easy as they were in past expansions.

The economy has become decentralized, with much of the hiring occuring at small businesses. "In the 1960s when unemployment was 4 percent, you could probably put in applications at one or two large employers and be almost guaranteed a job," Signorino said. "Now, you have to contact 30 or 40 smaller firms before you even get a nibble." So, cautions and caveats aside, how much does a 15-year low in unemployment really tell us about the strength of the St. Louis economy? It certainly tells us that we've weathered the defense cuts reasonably well. The jobs lost at McDonnell Douglas have been replaced, albeit with lower-paying ones.

We Stack up well against the rest of the Midwest. A recent Arizona State University report ranked St. Louis 12th in job growth among 36 big cities. Atlanta led with 5.83 percent growth between February 1993 and February 1994. St.

Louis' employment grew 2.31 percent in the same period, placing it well ahead of Chicago at 1.57 percent, Milwaukee at 1.27 percent and Cleveland at 0.99 percent. And we're moving up: A year ago, St. Louis ranked 19th in the same group. Things are much worse on the West Coast: Los Angeles, San Francisco and San Diego all are losing jobs. Taking a longer view, the jobless rate says that St.

Louis has provided enough jobs for most of the Baby Boomers who have come of age since 1979, and for the women who have entered the paid Work force. Employment here is up 17.5 percent in the past 15 years. But we're certainly no Atlanta; we're not luring jobs and workers from other regions. For most of the last 15 years, more people have been moving out of the St. Louis area than have been moving in.

Until we can reverse that trend, we can'tsay we have a vibrant economy. partnerships attracted millions from rich Kuwaiti bankers and businessmen and many of his fellow partners at St. Louis' largest law firm, Bryan Cave. Then the real-estate market crashed. And so did Love Cos.

Love has yet to recover. "I think things are better than they were, but that's probably not saying a lot," Love said. Love left Bryan Cave in late 1991 in an effort to turn around his real-estate firm. At the time, Love companies owed the law firm more than $1 million for legal work, according to the National Law Journal. In recent years, Love has been selling his holdings or handing them back to lenders whom he owes money.

Among the properties Love has sold or handed over in the St. Louis area are Warson Village Shopping Center in Warson Woods, the Builders Square portion of the Plaza At DePaul shopping center in Bridgeton, the Holiday Inn Airport-West in Bridgeton, the Days Inn Airport in Woodson Terrace, the Executive Office Building downtown and the Plaza Square Apart- telling us to get lost in St. Louis," he said. Baker's River City Broadcasting will own ABC stations in Sacramento, Columbus, Ohio, and Asheville, N.C. Baker thinks that should give him clout in landing the ABC franchise for Channel 30 here.

Working against Channel 30 is its high number on the UHF dial. UHF signals are weaker than VHF, and channel-zapping viewers tend to favor low station numbers. That would put KPLR Channel 11 on ABC's radar screen. The station is one of the oldest family-owned independents in the country. KPLR battles the networks with a heavy dose of sports, including the Cardinals and Blues.

The Cards' 60-game broadcast contract is up bid. "We're hoping to renew," Koplar said. A heavy sports lineup could be a turn-off for ABC. Networks make their money selling commercials during their programs. They make nothing if local stations pre-empt their programming to run sports.

Channel 11 last year said it would carry programming from a new network being planned by Time-Warner. Koplar said he doesn't know if he'd want to switch to ABC. "Certainly ABC would be interesting," he said. Faced with a reported $35 million in debt, Koplar flirted with selling Channel 11 last year. Instead, he announced a deal to sell a station in Sacramento, and pay down debt.

That deal is proceeding, Koplar said. See TV, Page 3 Unlikely To that high. Even with extra federal and state taxes, prices will only be a bit higher this summer than last summer, Right predicted. "Last year was a fluke because the price actually dropped during the high-demand season," Right said, because of the low price for and surplus of crude oil. Surveys indicate that crude oil prices will drift into the per barrel range for the peak driving season from Memorial Day to Labor Day, Right said.

jf VHrfru si8n I KHOVUlS A APn' Vs0 So11' ments downtown. Love is also in the process of selling his now called Heartland Savings Bank. First Banks headed by James F. Dierberg, has said it intends to buy Heartland. Channel 2's New Owner Is A Dealmaker 1994, Knight-Ridder Newspapers PHILADELPHIA He's one of the biggest deals, and biggest deal makers, ever to come out of Philadelphia.

Yet, quite possibly, you've never heard of him. He is Ronald Perelman, 51, chairman of Revlon, a Haverford School and Wharton graduate whose shrewd maneuverings in the canyons of Wall Street have raised his personal worth to an estimated $5.9 billion, making him the richest man in New York and one of the richest in the world. On Monday, another of Perelman's mega-deals thrust him into the news again. In case you missed it, seven television stations Perelman owns (and five more he has agreed to buy, including KTVI, Channel 2, in St. Louis) plan to dump their network affiliations with CBS, NBC and ABC to become outlets for the new kid on the block, the Fox Television Network.

Fox's $500 million deal includes an agreement to buy In I he prospects for real-estate development in this area and in most places are extremely slim. J9 But Love said he plans to keep Heartland's mortgage operations, which specialize in single-family residential lending. And he wants to expand Love Funding a mortgage-bank-See LOVE, Page 8 Post-Dispatch graphic I i Ronald Perelman Worth an estimated $5.9 billion plenty of programming from Perelman's te-levison production company, New World Communications Group, which produced "The Wonder Years." See PERELMAN, Page 3 1994 versus the summer of 1993. But remember, each gallon of gas has carried an extra 4.3 cents federal tax since last Oct. 1 and an extra 2 cents Missouri tax since last April 1.

At the start of the 1993 Memorial Day week-: end, the average St. Louis area price was $1.02 for a gallon of self-service, regular unleaded gasoline. This year the average price is was 99.8. "I don't expect that price to hold," Right said. "It will be over $1 a gallon next week." MM At Least Two Stations Seek ABC Alliance By Jim Gallagher Of the Post-Dispatch Staff When ABC gets divorced from Channel 2 next year, it won't lack for a date in St.

Louis' Two and possibly three stations are ready to consider marriage. Channel 30, being dumped by the Fox network, says it will be fairest of face when ABC comes courting. Channel 46, which now carries home-shopping programs, hints that it's already receiving feelers from an unnamed intermediary. Channel 11, an independent with a coveted spot on the VHF dial, is being more coy. Owner Ted Koplar says a dance with ABC would be "interesting," but doesn't know if he wants to trade his sports lineup and engagement to the new WB network.

And although it seems less likely, no one is ruling out a switch in loyalties by CBS affiliate Channel 4 or even the market-leading Channel 5, the NBC affiliate. Such a move would send those networks scrambling to save their own pieces of the St. Louis market. All this means little to St. Louis couch potatoes.

They'll just have to hit new numbers on the remote to find their favorite shows. For those in the business, it could mean jobs lost, gained or shifted as station owners vie for a bigger share of the St. Louis market's $156 million in annual TV revenue. The Fox network set the television business on its ear Monday with a surprise $500 million alliance with New World Communications Group. The deal will switch 12 stations from other networks to Fox.

For the most part, Fox will be "trading up." It will be moving from high-number UHF stations to low-number VHF stations with stronger signals and good local news operations to lead viewers into prime-time programming. It was a punch aimed right at the CBS eye. The big network will lose eight stations, includ ing spots in big markets such as Detroit, Cleveland and Milwaukee. CBS' stock dropped nearly 11 percent last week. ABC took the blow in St.

Louis. New World said it has an option to buy Argyle Television Holdings, which owns KTVI Channel 2, next March. If it takes control, New World says Channel 2 will switch to Fox. The Fox decision was a kick in the teeth to KDNL Channel 30, a Fox affiliate since 1986. KDNL station manager Gregg Filandrinos chaired the Fox affiliates board, and CEO Barry Baker is a personal friend of Fox's president.

Baker used Foxs popularity and his own marketing savvy to push KDNL within reach of KTVI in the all-day ratings. There was some irony in the Fox move, said Baker, whose firm owns five TV stations and is buying four more. "Fox is pitching us to switch our ABC stations to Fox, right while they're Gas Prices By Robert Steyer Of the Post-Dispatch Staff Motorists starting off the peak driving sea son on Memorial Day may pay a little more for gasoline this summer but hardly enough to make them reconsider vacations or long trips. "Studies say you'd probably have to raise gasoline prices 50 percent before you would reduce demand by 2 or 3 percent," said Mike Right, director of public affairs for the Auto Club of Missouri. Be A Pain In The Tank The impact on pump prices will vary in each region of the country, and Right isn't willing to make firm predictions for the St.

Louis area. Last year, Auto Club surveys of gas stations in St. Louis and St. Louis County that showed end-of-the-month prices dropped from $1.02 a gallon in May almost steadily to 90 cents a gallon in September. These prices are for self-service, regular, unleaded gasoline.

Right said end-of-month prices might climb 6 cents a gallon higher during the summer of Don't worry. Gasoline prices aren't going.