Daily News from New York, New York on December 12, 2001 · 56
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Daily News from New York, New York · 56

New York, New York
Issue Date:
Wednesday, December 12, 2001
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Developer: Taxpayers may By ERIC HERMAN DAILY NE.VS BUSINESS WRITER Alleging "fraud, bad faith and collusion against the taxpayers of the city," a developer has sued The New York Times Co., challenging fiscal incentives promised the paper as part of its deal to build a new headquarters in Times Square. The incentives the Empire State Development Corp. and the city are offering The Times could cost taxpayers $100 million or more, according to the suit filed by developer Gary Bamett of In-tell Management. "It's totally outrageous what's going on. It"s being done in secret. There's no real estimate of what it s going to cost the city," Barnert said. "The New York City taxpayers are being asked to subsidize The New York Times." "We believe the suit is without merit." said Times spokeswoman Catherine Mathis. Last year. The Times announced plans to build a 52-story headquarters on Eighth Avenue, between 40th and 41st streets. The Times' current building on W. 43rd Street is nearly 90 years old. Vivendi, USA Networks look to get it together By NANCY DILLON DAILY NEWS BUSINESS WfifTER Vivendi Universal chief Jean-Marie Messier and USA Network's Barry Diller confirmed yesterday they're in talks to reunite some of their entertainment assets. Paris-based Vivendi owns 41 of USA Networks' entertainment unit including the USA and Sci Fi cable channels but has no decision-making power. Gaining full control in a possible acquisition would finally give Vivendi a surefire vehicle for delivering its own films and programing to U.S. viewers. Such a deal also would have Vivendi buying back the same Universal TV assets that Seagram scion Edgar Bronfman Jr. sold to Diller for $4 billion in 1997, just three years before Bronfman sold Seagram's remaining liquor and media assets, including Universal Pictures, to Vivendi for $40 billion. Beyond confirming negotiations, both sides disputed recent reports they're on the brink of an announcement. In a statement, Vivendi offi The Times selected developer Forest City Ratner as its partner and hired Italian architect Renzo Piano, who is designing the building with help from New York architects Fox & Fowle. The plan envisions a 52-story, 1.4 million-square-foot tower, with The Times occupying about half. The Times and Forest City plan to unveil the design tomorrow. REAL To make room for the project. Empire State Development is condemn ing the property. The block contains several different businesses, including adult video stores, the Sussex House student apartments, and a parking lot owned by Barnett. As part of the deal, the city will give The Times and Forest City tax breaks and incentives of S29 million. They will get more tax breaks if the cost of acquiring the land exceeds S85 million, the price fixed in the accord by Empire State Development. Barnett's lawsuit states that Empire State deliberately underestimated what the land will cost to guarantee The Times "a sweet cials said "there have been ongoing discussions," but that the rumored $13 billion to $18 billion price tag was "totally absurd." The rumored terms "are incorrect," Diller told the Daily News. "They're just creating a lot of false noise." "It makes great sense for Vivendi," said one analyst who follows USA Networks. "Vivendi has no cable network or TV production facilities targeting U.S. consumers, and if they do buy USA, they'll be getting one of the best." Niraj Gupta at Salomon Smith Barney said Diller would benefit because USA would emerge "with a pristine balance sheet to pursue additional consolidation opportunities in the Internet commerce industry." USA already owns Ticketmas-ter and the Home Shopping Network and is in the process of acquiring travel Web site Expedia. Gupta estimated the value of USA's entertainment assets at $10 billion to $12 billion. Vivendi stock fell $1.60 yesterday to $50.60. USA Networks jumped $1.10 to $25.05. DOW JONES - 33.08 9,888.37 take 100M hit heart arrangement." The Times stands to owe the city payments in lieu of taxes of about $13 million a year, Barnett said. If the cost of the land as fixed by a court after appraisal turns out to be more than $85 million, the paper would get a rebate of up to 85 saving the company as much as $1 1 million a year until the difference is made up. Barnett said that difference could amount to $100 million to $215 million, and "the city and the ESDC have failed to disclose the existence of this windfall." Barnett, who developed the W Hotel in Times Square and owns the Belnord apartments on the upper West Side, wanted to develop the site himself. His lawsuit charges that Empire State Development failed to get competitive bids, as required. Barnett lost a previous lawsuit challenging The Times' project on different grounds. "We expect this case to have the same disposition as all the other cases filed by Mr. Barnett against us," said Michael Marr, spokesman for Empire State Development. 5 , .V V. t - - ' . ' . ', USA Networks chief Barry Diller (top) and Vlvendi's Jean-Marie Messier are in talks on entertainment holdings. y3 w f l NASDAQ 9.81 2,001.93 The block now small businesses at Eighth Ave., streets, will be turned into new Holiday shoppers keep tight rein on spending By JUDITH SCHOOLMAN DAILY NEWS BUSINESS WRITER Up or down no matter what the different retail surveys show, they agree on one thing: shoppers are spending less this year than last. And retailers, desperate to lure customers during these tough times, may sacrifice their own profits to get them into the store. While retail execs and analysts feared this would be the case, it became more evident yesterday that the 2001 holiday season might be one of the sourest in recent memory. Compared with holiday sales growth of 4.5 to 5 on average for the past several years, this year is likely to weigh in with a meager 2 increase. Several retail observers said the most recent week's sales at chain and department stores suffered not only from reduced consumer demand but unusually warm weather, which made consumers think twice about buying winter coats and sleds. With just two weeks till Christmas, shoppers will have to come out in force to put sales into the plus column, said Merrill Lynch retail analyst Mark Friedman. S&P 500 - 3.17 1,136.76 RON ANTON ELU housing parking area and between 40th and 41st New York Times headquarters. "The critical sales volume' weekend is the one that falls right before Christmas," he said, adding that the final week repre; sents a third of holiday sales. While economists expected sales to slow in the two weeks after Thanksgiving, sales de-' clines in the week ended Dec. 8' topped expectations and suggested the holiday season won't-be very jolly for retailers. According to TeleCheck, , which tracks electronic pay-: ments, sales for the 17 days after Thanksgiving rose 2. But sales at chain stores slipped 0.4 during the week ended Dec. 8, following a 1.7 drop a week earlier, the Bank of Tokyo-Mitsubishi and UBS Warburg reported. Separately, Instinet Research's Redbook said sales fell 0.9 in the week ended Dec. 8 compared with a year ago and tumbled 4.5 in the four weeks ended Dec. 8 compared with the same period in November. At malls, sales fell 4.6 that same week, according to the In-t ternational Council of Shopping Centers.

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