The Philadelphia Inquirer from Philadelphia, Pennsylvania • Page 50

REGIONAL ECONOMY 12-D Monday, April 4, 1988 The Philadelphia Inquirer Per-capita income in Pennsylvania Traffic could stunt Rte. 202 growth 198S 1 979 Change Rank PENNSYLVANIA $10,288 $7,075 45.4 Berks lihvf--'i: 10,908 y'E-i Bucks 12,473 8,048 55.0 3 Chester 1 3,490 8,763 53.9 Delaware 12,450 8044 548 4 Lehigh 1 1,590 7,873 47.2 6 Montgomery'; 5, 1 32 9,727 55.6 I Northampton 10,434 7-382 41 3 12 Philadelphia 8,807 6,053 45.5 32 By Neill A. Borowski liU)Uirr Shift Writer Too little macadam and too many motorists cannot be cranked into an economic formula. But they may yield an economic headache in Chester and Montgomery Counties. Developers speak glowingly of the high-tech corridor along Route 202 as they continue to build office complexes.

Yet future economic development there could be hobbled by increasing traffic congestion on Route 202 and its feeder roads, according to some business officials and analysts. The corridor is groaning under the weight of its own success. "The whole traffic infrastructure set up in Chester County and down into Delaware County is becoming a major problem," said regional economist Joel Naroff of Fidelcor. "that just doesnt fly." he said. These are the suburbs, and people want to drive from their suburban homes to their suburban places of work, he said.

The result is that the average number of riders per car tends to be "close to 1.0," Faber said. Will new businesses and those that want to relocate to the region turn their backs on the corridor? Some may already be doing that, Naroff said. "Development has pushed into some different areas" because of the congestion, he said. "There is a possibility the city (of Philadelphia! could benefit" from the congestion. Gregory R.

Byrnes, executive vice president of the Philadelphia Developers Alliance, said he had received calls from executives of companies in the Route 202 area who said they might move some operations to Center City. He would not identify the companies. Route 202 eventually will be widened. Until then, congestion and other traffic-related problems will continue as more and more buildings are built, said Larry E. Faber, manager of facilities, packaging and quality assurance at AMP Products Corp.

AMP employs about 600 people at its facilities off the Devon interchange of Route 202. Those employees spend a lot of time fighting traffic as they journey to and from work, said Faber, whose company is a subsidiary of AMP Inc. of Harrisburg. AMP was one of the first companies in on the Route 202 boom; it put its plant there 24 years ago. Faber is not complaining about growth.

"It's not that we don't like that." he said. "The road structure has to keep pace with it." Car pooling has been tried, but Western Pa. towns lead state in per-capita income ratings One Pennsylvania county is home to three townships that rank first, second and third in per-capita income in the state. For their identities, do not even think of the Philadelphia area. Travel west.

Far west. The municipalities with all the bucks are not in Bucks. They are all suburbs of Pittsburgh, in Allegheny County. Fox Chapel had percapita income of $42,009 in 1985, highest in the state, according to estimates by the Pennsylvania State Data Center. The estimates are in a publication, "1986 Population and 1985 Per Capita Income Estimates," that provides details of the relative wealth of counties and towns in the state.

The second- and third-highest per-capita incomes are in Sewickley SOURCES: Pennsylvania State Data Center; Censua Bureau, 1985 Heights, with $41,757, and Edge-worth, $39,055. Lower Merion Township in Montgomery County is fourth with per-capita income of $26,247, and Birmingham in Chester County is fifth with $25,655. The only other ranking Philadelphia-area municipality is So-lebury Township in Bucks County, in eighth place with $23,300. The suburban counties around Philadelphia swept the top spots for countywide per-capita income. Of the 67 counties in Pennsylvania, Montgomery County incomes score the highest, followed by those of Chester, Bucks and Delaware Counties.

Philadelphia ranks 32d. rnnscaipiiKi regional incicaiura Quietly, a former giant of the Phila. business scene prepares to leave LatMl Prav. Prav. ported ported Chug yar Chawg EMPIOYM6KT unemployment rale (March) 56 5 7 0.1 6.6 1.0 Pa unemployment rale (March) 4 0 5 2 2 5 9 1.9 J.

unemployment rate (March) 4 0 3.4 0 6 3.7 0 3 Del, unemployment rate (Feb 3 8 3 6 2 9 0.9 Phila unemployment rate (Feb 4 4 4 4 4.9 0.5 Pnila. new jobless (Jan.) 24.353' 20.231 20 4 24,243 0.5 Phila total employment (Feb 216m' 216m 2.10m 2.9 Phila. help-wntd. ad index (Feb 95 92 3.3 73 30.1 Phila manufactunng jobs (Feb 374,100 376,000 5.1 376.900 0.7 Phila. construction jobs (Feb.) 98.800' 100,600 18 88,300 11.9 Phila.

wholesaleretail jobs (Feb.) 503,500 0.6 488.500 2.5 Phila. tin real estate jobs (Feb 162,700 0 3 155,200 4 5 Phila. trns pub util. jobs (Feb.) 97,200 0.1 96,200 1.1 Phila. service jobs (Feb.) 617,600 1.0 598,200 4.3 Phila lederal gov't, jobs (Feb.) 81,100 0 6 77,400 4.1 Phila and state gov't jobs (Feb 222,100 0.2 220,200 1.0 Phila.

workers on strike (Feb.) 500 0 400 25.0 Phila avg. wkly mlg pay (Feb $44191 0.7 43147 3.2 Phila avq wkly mtg. hours (Feb.) 405' 401 10 404 0.2 GENERAL v. Pa leading indicator index (Feb 110 4 111.1 0 6 108.3 1.9 Pa steel production tons (Feb 1 07m 1.11m 36 064m 67 2 COMMUWtCAnONS Phila bus phone lines (Feb (a) 367,070 365,070 0.5 357,033 2.8 Phila res phone lines (Feb.) (a) 650,388 649,165 0.2 645,162 0.8 Pa bus phone lines (Feb (b) 420.989 418,474 0 6 387,880 8.5 Pa res phone lines (Feb (b) 1.05m 105m 102m 2 9 Del business phone lines (Feb.) 128,507 127,726 06 117,509 94 Del res phone lines (Feb 252,547 251,998 0.2 243,004 3.9 S. Jersey bus phone lines (Feb.) 144,331 145,389 0.7 139,468 3.5 S.

Jersey res, phone lines (Feb 465,682 465,584 448,350 3 9 Beg, postal rev (Feb. 13-March 11) $44 29m 4,4 4.9 i'W V.U:; I fi-sr hahja llW-, ft i ft I I t- 'l in employees in several cities. At the time Penn Central was created, the Pennsylvania and New York Central Railroads had extensive real estate holdings, operated 20,500 miles of rail track and employed more than 100,000 people. Among other holdings, the Central in 1968 owned most of the land along Park Avenue in Manhattan, between 42d and 50th Streets. The Pennsylvania, founded in 1846 and once known as the "Standard Railroad of the World," previously owned Penn Center in Center City.

Penn Central's holdings still include the air rights over New York's Grand Central Terminal. People in business and investing, Penn Central insiders and many Philadelphians still recall the shock generated by the revelation that Penn Central was out of money. The bankruptcy led not only to the federal government's bailing out freight and commuter service in the Northeast with Conrail, but it also prompted Congress to establish Am-trak to save intercity passenger trains. "The Sunday afternoon it occurred really shook the business world," said one former Penn Central executive, who asked not to be identified. "At the time, railroads were considered much more of a barometer of the economy than they are PENN CENTRAL, from 1-D Northeast and Midwest.

With federal aid, good management and railroad deregulation, Conrail became a profitable, publicly traded company in 1987. The only Penn Central operations still left in recent years in Philadelphia have been its accounting and real estate-management departments, situated in offices at 1700 Market St. Some of those jobs will be transferred to Cincinnati this summer, but it is not known yet how many individuals will accept "relocation said Burton, the company spokesman. According to a Penn Central source, only two employees will move to Cincinnati. "Some relocation packages have been offered," Burton said last week.

"I don't know if the responses are back yet." When Penn Central moved to Cincinnati last fall, it had a corporate staff of about 200, including 100 who were relocated from Greenwich and 100 newly created positions. Earlier in 1987, Lindner moved the headquarters of Chiquita Brands which is 86 percent owned by his American Financial from New York to Cincinnati. The Penn Central and Chiquita moves helped end a glut of new office space in downtown Cincinnati. Burton said assembling all of the corporate staff in one location would be more cost-effective than having Preliminary (a) Philadelphia only, (b) All lines with 215 area code. All figures are tor the eight-county Philadelphia PMSA unless otherwise noted.

Sources other than government agencies and utilities: Bell of New Jersey Bell; Pennsylvania State University Center for Regional Analysis; American Iron Steel Institute. The PtMladalphia Inqurar The old Pennsylvania Railroad's Broad Street Station in 1952. COMMUNICATIONS Milton Grant's plan for Channel 57 succeeded too much especially in view of the financial problems that developed for Grant Broadcasting. "Grant's problem was purely an issue of an overbuying of programs," said Kagan. "They got competitive at all of these stations, and Grant was most competitive of all." Grant's problems were worst in Chicago, acccording to Kagan.

"The Philly and Miami stations were always very good," he said. "It was the Chicago station that was in much deeper difficulty. Had the company been structured separately for each of the stations, you might not have seen bankruptcy across the board." While it is true, however, that Grant's Chicago station was losing far more money than the stations in Philadelphia and Miami, all three were operating at a deficit, according to estimates by Shearson Lehman Hutton. For 1986 and 1987 combined, those estimates show Miami losing $9.1 million, Philadelphia losing $11 million and Chicago losing $19.3 a plan that would save the stations but place their ownership in the hands of Grant Broadcasting's creditors and bondholders. If the new owners can learn from Grant's mistakes, say industry executives and analysts, they should be able to squeeze a profit from Channel 57 and its sister stations, WBFS-TV in Miami and WGBO-TV in Joliet, 111., which serves the Chicago market "The people who took over are stable, experienced b-oadcast businessmen," said Jim Boaz, general manager at Philadelphia's WTAF-TV (Channel 29).

"I have great admiration for that management team. I think their prospects are good if their prospects are tempered with patience." According to projections prepared for the bankruptcy court by Shearson Lehman Hutton WGBS is expected to be profitable by the end of 1991. The reorganization plan approved by Scholl calls for the establishment of a new board of directors for Grant Broadcasting and the repayment of the company's debts to creditors, mainly program syndicators, and bondholders. The creditors and bondholders will asssume ownership of the stations as soon as the Federal Communications Commission approves license transfers. The stations are now being managed by HRBC a subsidiary of Hal Roach Studios Inc.

of Los Angeles. Robert O'Connor, former general manager of WNYW-TV in New York and WTTG-TV in Washington, is the new general manager of the Philadelphia station. While Grant moved into Philadelphia with a bang, O'Connor uses terms like stability and survival to describe his plans for Channel 57. "We're just professional, seasoned broadcasters with a long track record," O'Connor said of himself and his colleagues from HRBC. Analysts expect the HRBC team to move cautiously in program acquisitions.

Just how aggressive it is likely to be could be measured in the coming negotiations for renewal of the By Anthony Gnoffo Jr. Inoulrer SUtl Writer His plan was "not to build a television station, but to come on full-grown," Milton Grant said when he bought WGBS-TV (Channel 57) in October 1985. And that's what he did. He spent $30 million to buy the station, then $3 million to acquire the rights to broadcast the Philadelphia Flyers' away games for three years. He bought big-name programs like Dallas when they came out in syndication.

He developed a reputation for being willing to pay top dollar for programming. But his Miami-based Grant Broadcasting System Inc. quickly became squewed as advertising revenues failed to keep up with programming costs. By the end of 1986, the Grant Broadcasting was seeking protection from its creditors under Chapter 11 of the VS. Bankruptcy Code.

And last week in federal court in Philadelphia, Judge David A. Scholl approved station's three-year contract with the Flyers. Grant believed that the Flyers were important to the station because they helped build its identity and attract an audience. The question for Channel 57 now is whether the Flyers are still as important as they were in the early days. If they remain critical, the station must decide how much it is willing to pay to keep them.

"Everything is important," said O'Connor. "Hopefully, we have the same value to them as they have to us." He said, however, that Channel 57 "can survive without the Flyers; we have to be able to survive without any single entity." Prism, the cable-television program service, has also expressed interest in using the Flyers' road games to anchor a regional sports channel it hopes to offer to area cable systems. Losing the Flyers to Prism is not the only threat facing WGBS. As more homes in Philadelphia are wired for cable television, broadcasters especially independents like WGBS, WTAF and WPHL (Channel 17) will face increasingly stiff competition for the attention of viewers, according to industry experts. "There are a lot of problems for independent broadcasters," said analyst Paul Kagan, president of Kagan Media Appraisals Inc.

of Carmel, Calif. "Those problems haven't gone away. Nothing much has changed on the revenue side of the business. What has changed is the cost of programming and what independents are willing to pay for programming." Grant, according to Kagan, earned a reputation as one of the biggest programming spenders in the industry. And he was spending big at a time when almost all of the independents were spending big and the demand drove the cost of programming out of sight for many.

But the broadcasters' willingness to spend half or more of their revenues on programming has waned in recent months, according to Kagan, 'sJss firs "iz" xmM. mHiii Tl 5 ifJl mm ft He lost 3 TV stations but plans to buy others i I 4 SIV VV mimmmmm i -swW- 14 t'W mmmf tmmmmmmMmAl.sUWk-iJr GRANT, from 1-D those stations for $175 million and moved to Miami, where he launched a new station, WBFS-TV, in December 1984. By the end of 1985, he owned two more stations, Philadelphia's WGBS-TV, which had been broadcasting a scrambled signal that CG'uiU LC iC''Cva CHS WJ CUS' tomers, and WGBO-TV, which served the Chicago market from Joliet, 111. The reorganization plan approved by Scholl calls for the creation of a new board of directors for Grant Broadcasting. It also calls for the company's three television stations to repay $222.5 million to Grant's bondholders and $197.3 million to its creditors mainly program syndicators.

If the stations cannot meet the quarterly-payment schedule under which the debt would be repaid by 1995, then some or all of the stations will be sold. Attorneys for the bondholders and creditors say the new board of directors will be put in place as soon as the Federal Communications Commission approves necessary broadcast-license transfers. The new board will then give the new corporate entity a name. Grant's strategy in Philadelphia was to attract a big audience quickly by buying big-name and expensive programming. After spending $30 million to buy the station, he paid an additional $3 million to carry the away games of the Philadelphia Flyers hockey team for three years and $1 million to carry vuianova University's basketball and football games, also for three years.

He also picked up syndicated reruns of Dallas and Gimme a Break, for which he paid $30,000 per episode. According to Grant, his only problem in Philadelphia was time. "The end result of everything we did in Philadelphia was that we didn't do so badly if we can raise $420 million to pay back our debts," he said. "But it wouldn't even have come to that. We just didn't have enough time." Other television executives and industry observers agree.

They say that Grant, in an effort to build an audience quickly, spent too much on programming. Revenues from advertising failed to keep pace with the programming costs. When Grant sought more time to pay programmers, he was turned down. "The programmers wouldn't give The Philadelphia Inqurw GREG LANIER Employees including master-control engineer Sheryl Brown continue to work at WGBS-TV during its transition. him the concessions he needed," said Kagan.

"The only way Grant could get the concessions he needed was to declare bankruptcy." According to Kagan, many independent television broadcasters played the expensive-programming, game, and their buying hatits fueled, a dizzying spiral of increasing programming costs. Programming costs are more critical for the independent stations because those stations do not have the steady stream of free programs that are supplied to network-affiliated stations. In Philadelphia, the network affiliates are KYW-TV (Channel 3), affiliated with NBQ WPV1-TV (Channel 6), affiliated with ABC, and WCAU-TV (Channel 10), affiliated with CBS. Among the independents, WTAF-TV (Channel 29) claims a programming advantage because of affiliation with Fox Television, which provides network programming on Sunday nights. "We became caught in a biiizz saw of rising prices," said Grant.

"The other stations became defensive be cause they saw what we accomplished in Houston and Dallas. Prices went up, and we ran into a squeeze." Jim Boaz, general manager at Channel 29, said he and Grant had debated the expensive-programming approach. "You cant build a station in a year You have to grow a business," he said..