Daily Press from Newport News, Virginia on January 23, 1998 · Page 31
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Daily Press from Newport News, Virginia · Page 31

Newport News, Virginia
Issue Date:
Friday, January 23, 1998
Page 31
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Home Strong demand likely to continue this year The Associated Press WASHINGTON Vibrant job creation and low mortgage rates fueled strong housing demand, keeping builders busy in 1997. Analysts predict 1998 will be almost as good, with low rates helping to offset economic fallout from Asia. Housing starts slipped 0.8 percent in December to a seasonally DEI called likely to survive change By Tom Fredrickson Daily Press Questions are buzzing about Virginia Power, and they're taking a toll on the stock price of the utility's parent company, analysts say. Will the utility's retail rates be frozen? Will they come down? Will Virginia Power have to pay refunds because of over-charges? How will the electric industry be restructured in Virginia? , The stock price of Dominion Resources Inc. is north of $40, pleasing many investors who have seen it languish for years. Even so, the stock has lagged behind other high-quality, large-capitalization electricity producers, said Kyle P. Rudden, analyst with New York-based J.P. Morgan Securities Inc. "The sector has done quite well over the last few months in reaction to the movement to defensive, dividend-paying utility stocks," Rudden said. "Dominion has done well, as the sector has, but it's under-performed the peer group of high-quality utilities." What's to blame? A period of uncertainty, Rudden said and the market doesn't like uncertainty. But when that's done and gone, "Dominion will trade at a 5 percent priceearnings premium to the average of high-quality companies," Rudden said. Within 18 months to 24 months, he predicted, Dominion will trade for about $45, or in the range of $41 to $49, compared with a closing price Thursday of $40.31. - "I think Dominion will emerge from any restructuring plan relatively unscathed," Rudden said. "The concern is the period of uncertainty." Virginia Power's future will be shaped by the General Assembly and the State Corporation Commission. The General Assembly will decide how to restructure the state's electricity industry to create retail competition. SCC staff members have endorsed a go-slow approach to deregulating the retail electricity market, and the joint legislative subcommittee studying the issue appears willing to go along. The subcommittee wants to delay action on a restructuring bill until the 1999 legislative session. Virginia Power has prepared a bill of its own that would deregulate the wholesale market. Meanwhile, the SCC is scheduled to set new rates for Virginia Power Continued from C7 matches demand. The model isn't retail competition because consumers couldn't choose their supplier. In theory, they'd get the cheapest supplier available within the pool, but the model could set the stage for retail competition. However, the bill would include only hydroelectric plants and fossil-fuel plants in the pool. Pur-chased-power contracts reached before this year and nuclear power plants would be exempt. They would continue to get a guaranteed Suit Continued from C7 its first statement explaining the move. "He was released because, in the opinion of management, he was no longer serving the best interest of the company," said Linda S. Laibstain, a lawyer with Hofheimer, Nusbaum, McPhaul & Samuels, local attorneys for Cellar Door. , , Boyle has not returned the Daily Press phone calls about the dispute. But he was quoted recently in Pollstar, a concert industry trade magazine. "I'm sorry he's trying his Ose in (the pressV Boyle said. "I'll stand on my personal reputation braiders Irasy in adjusted annual rate of 1.52 million, the Commerce Department said Thursday. For the year, builders began construction on 1.48 million units, just 1,100 short of the 1996 total, which marked an eight-year high. "We had an outstanding housing year in 1997," said housing econ jmist David Berson. "It's not the most starts we've Investors power up Dominion Resources Based on weekly closing prices 35 30 25 ID .c Q.15 10 , Investors sought safe haven from a turbulent market late last year by investing in companies such as Virginia Power's parent, Dominion ' Resources Inc. Analysts say Dominion stock has more room to increase because regulatory uncertainty has held down the ; price. IHIIIIIII LLU Aug. Sep. Oct. Nov. Dec. Jan. 1997 . 1998 M. GonteskyDaily Press Power this year. With the utility in the hands ,of state officials and legislators, investors have shied from embracing Dominion. In general, however, utility stocks have surged as investors shunned overseas markets and growth stocks. Toward the end of 1997, money managers and mutual fund managers latched on to utility stocks, bonds and other fixed-income investments. They were seeking safety in response to economic turmoil in Asia, said Timothy Winter, an analyst with AG. Edwards in St. Louis. That turmoil, coupled with plummeting long-term interest rates, made utility stocks look attractive. However, at the beginning of this year, utility stocks traded down a bit as money managers locked in gains from last year and moved into new growth investments for this year, Winter said. Dominion Resources had a dividend yield of 7.3 percent a year ago. That number has dropped to about 6.3 percent, but Rudden still considers the stock "one of my stronger buys." . Among the conditions helping the stock: It's a relatively low-cost producer in a relatively low-cost area. In Rudden's view, that likely means competitors won't engulf it in the near future. rate of return. Purchased power contracts and nuclear plants form the bulk of Virginia Power's stranded investments long-term investments worth less than they cost in a fully competitive market. Virginia Power would be permitted to collect the excess cost of operating its two nuclear plants for the lifetimes of the plants. , And consumers would similarly pay for its long-term power contracts. However, if a utility collects a surplus on the contracts or plants more revenues-than costs consumers would get credits. The bill would permit utilities to withdraw pending rate cases from the SCC. and that of Cellar Door for the last 30-odd years. If anybody knows me, they can draw their own conclusions." In court today, Reid's lawyers will likely argue that Reid's contract with Cellar Door is no longer binding and that he is free to compete with his old employer. ; "The employment contract is plainly void," attorney Kevin K. Martingayle, part of Reid's legal team, said Thursday. "But even if it . wasn't, the noncompetition , covenant is not enforceable. It's too vague." , , ' ; Cellar Door's complaint comes on the heels of Reid's $1 1.5 million suit agai3t the company, filed Jan. 9, also in Circuit Court. With that Jan. 22,1998 close: $40.31 ever had, but ... more homes were sold last year than any year in our history." As 1997 began, most analysts were looking for a slowdown in housing. But unexpectedly vigorous job growth, reducing the unemployment rate to a 24-year low, plus bet-ter-than-anticipated stock market gains gave Americans the wherewithal to buy homes. "The stock market has been a strong support ... especially for trade-up homes and second homes," said economist David Sei-ders of the National Association of Home Builders. And declining mortgage rates, depressed late in the year as investors pulled money out of Asia and snapped up U.S. securities, made home-buying more affordable. Cinemas Continued from C7 Fair mall, but it was Regal's own 12-plex at Hampton's Riverdale Plaza that proved fatal. To fill the seats, Regal converted Newmarket to a discount theater in July, "but the discount theater business just isn't doing well," Zacheretti said. "They're closing across the nation."- Zacheretti said multiple screens allow first-run theaters to hold movies longer before sending them on to the discount shows. At the other end of the industry, movies come out on video sooner than ever. "Sometimes there's only a week or two between the time a discount theater gets the movie and its release on video," he said. And that discourages ticket-buyers. . Zacheretti said Newmarket "held out very well for us as long as it could." The cinemas, in two different buildings with two screens each, are the property of Simon DeBar-tolo Group, the mega-developer that owns Newmarket and shopping centers nationwide. Neal Steele, manager of Newmarket Shopping Center, said he Netscape Continued from C7 Internet, allowing software developers to offer improvements, which the company will review for possible use. "This ... is a major sea change in the way we think about software companies, software distribution and the way software will be used in the future," said Jim Barksdale, Netscape's chief executive officer. The announcement was widely expected. Netscape, which has lost market share to Microsoft's free Internet Explorer browser, depends increasingly on selling to corporations software that links computers in company-wide networks. Yet Netscape needs to retain and expand the number of Navigator users because the browser is linked to its business software and services. Industry analysts said giving away Navigator should help Netscape at least a little. They would be required to file a new rate proposal or alternative rate plan by Jan. 1, 1999. Those rates would be in effect between 2001 and 2004 as a transition to wholesale competition. State officials have estimated that Virginia Power is overcharging customers between $100 million and $260 million per year, based on its allowable rate of return. If its current rate case goes forward, it may have to issue refunds to customers retroactive to March 1997. Tom Fredrickson can be reached at 247-4965. , action, Reid hopes to wrest unpaid wages and bonuses from the company while also slapping Cellar Door with millions in fines for fraud and misrepresentation. The company has 21 days to respond to that suit. Meanwhile, Cellar Door continues to operate as the region's most powerful concert promotion franchise. It holds contracts giving it exclusive rights to present shows at the 20,000-seat Virginia Beach Amphitheater as well as at smaller venues including The Bdathouse in Norfolk and The Abyss in Virginia Beach. .. i Sam McDonald can be reached at 247-4732. Mortgage rates edged below 7 percent as 1998 began. They hit a four-year low of 6.89 percent last week and ticked up to 6.99 percent this week, according to Freddie Mac, the mortgage company. That's fueled a record number of mortgage applications, said the Mortgage Bankers Association of America. Applications last week were 277 percent higher than the same week a year ago. Refinancings accounted for 69 percent of the total. "We're getting off to a running start ... but you can't sustain this type of pace forever," said economist David Lereah of the association. He said continued low rates should help counter the impact on housing of a general slowdown as Asian financial turmoil crimps U.S. THEN Opened: Oct. 15, 1965 Ticket cost: $2 Showing: "Those Magnificent Men in Their Flying Machines (unrated) 4 Expansion: Screens two and three opened in 1974. Opening-night movies for those were "Mame," starring Lucille Ball, and "The Longest Yard," starring Burt Reynolds. Fourth screen opened in 1984, with "Footloose." NOW Closes: Jan. 29, 1998 Tickets cost: $1 Showing: "Money Talks" (R) and "The Jackal" (R) same screen ' "Devil's Advocate" (R) "Alien Resurrection" (R) "Soul Food" (R) wasn't sure what the theaters' fate would be. Regal's lease is still active, but Steele wouldn't say for how long. Joanne Kimberlin can be reached at 247-7820. J LJL3 V-JLa-i LI J vyvLJfiAji H Publishing Tuesday, Feb. 24 Advertising deadline: Friday, Feb. 6 CDs, T-bills, money markets, stocks, bonds, commodities... With such a complex array of options available, it's no wonder that many would-be investors feel confused and bewildered. Financial Planning Today, written by experts in the field, will detail investment opportunities available to anyone. This highly informative guide will discuss local sources to help novices and experienced investors alike achieve their financial goals. Brokers, bankers, .financial planners and others will offer their opinions on key issues such as the future direction of the stock market, building a portfolio with annuities and determining the right mix of funds. We'll also include a special tax section just in time to help you prepare your 1997 return! If your business offers products or services that can lead our readers to a financially secure future, give us a call to have your advertising message included. We'll get to work on a special ad that's right for your business. For space reservations or more information, contact your Daily Press advertising representative, or call Tom Moritz at (757)2474718. I A . 4k A ... r r Make A Habit 0 1997 exports. On average, analysts are looking for about a 3 percent drop in starts to 1.44 million in 1998. A survey by the home builders association showed confidence remained high among builders in early January, about the same as a month earlier. "The feeling is very upbeat," Sei-ders said. For the year, single-family starts declined 2.4 percent while apartment construction rose 8.3 percent. Starts increased 3.5 percent in the Northeast, 1.5 percent in the South and 0.8 percent in the West. They fell 5.6 percent in the Midwest. In a good sign for 1998, building permits rose 3.8 percent in December to an annual rate of 1.49 million. EES The Newmarket Rocking Chair Theater and Newmarket Twin Theaters make up Newmarket Cinemas. Hailed as "Virginia's First Rock- . ing Chair Theatre" when it was built in 1965, the theater opened with one screen. A second building brought two more screens in October 1975, but those didn't have the much-vaunted rocking chairs. "Those chairs were expensive," said Phil Zacheretti of Regal Cinemas, which operates Newmarket Cinemas. "Not many theaters have them mostly small places in small towns, since they needed fewer chairs." A renovation in '84 split the original building into two screens and mothballed the theater's popular 70 mm projection system and wide-screen draw. But the rocking chairs stayed. The theater's opening was a gala event. A premiere was held the night before, Oct. 14, 1965. Hampton City Manager R.D. Stallings invited everyone to ' "come out and personally inspect Virginia's most luxurious and It. Microsoft Continued from C7 Netscape Communications Corp. Browsers enable people to view and download information from the Internet. Under the agreement, Microsoft agreed to let computer makers install Windows 95 but delete the Internet Explorer icons the pictures that launch a program with a click of a computer mouse from the computer's desktop or opening screen. That leaves the Internet Explorer program in the computer but not visible to the average user. Internet Explorer files are integrated with Windows 95 to let other programs, such as Intuit's Quicken personal financial software, access the Internet, Microsoft officials said. Computer makers will be able to delete the Internet Explorer files via the "AddDelete" program that comes with Windows 95. , newest theater." - .Bands played, dignitaries gave speeches, guests noshed on refreshments. Miss Hampton Roads and local radio and TV personalities added a touch of glamour. The first 3,000 guests went home with mini-movie chairs as souvenirs. Screens two and three arrived with equal fanfare, including spotlights, red carpet, pennants and footmen. A time capsule was buried in the steps during the construction of the first building. Neal Steele, manager of Newmarket Shopping Center, said he's found just one person who knows anything about the capsule or its contents. "They said there was a list of. the top 30 songs that year, a 45-record, stuff like that," Steele said. Just outside the box office, a , plaque marks the spot and dictates that the capsule be opened Sept. 13, 2015. Joanne Kimberlin, Dally Press

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