Daily News from New York, New York • 28

ID rn DOW JONES 8,723.18 NASDAQ SzP 500 22.19 WMM, 1,438.80 918.22 MANHATTAN OFFICE BUILDSMGS Estimated market values, according to the New York City Department of Finance. Sumner's fired up over new Mel deal iacom chief Sumner Redstone's thrown up another speed bump in talks to lock in his No. 2 Wall Street favorite Mel Karmazin. ODD (tffc MM Mm mm. mid- LACK FANS Sony stunned the show biz world last week when it hired broadcasting veteran and music novice Andy Lack to replace music honcho Tommy Mottota as head of Sony Music.

Behind the scenes, some of the most prominent names in the busi- After months of talks and no results, Viacom investors are losing patience with the 79-year-old kingpin, who still hasn't struck a deal to keep his hard-charging chief operating officer on board. One reason: Redstone's insisting on a clause that allows him to oust Karmazin with-out the ap- provai of PLUGGED the Viacom board, IN sources close to Via- T- ROBERT ROSAMHJO OaIyI ness stumped for the former NBC exec. Both Jack Welch the retired chairman com said. Karmazin's rjifipirpT vsw AOL Time Warner Center 220M 820M Met Life 597M I 602M General Motors 518M 532AT Empire State 435M 488M 9 West 57th 432M 487 Worldwide Plaza 410M 441Af 5 Times Square 215M 355M Chrysler 186M I 241Af Seagram 181M 209M One Liberty Plaza 323.3M 386.6M current contract expires the end of this year. "Sumner wants the ability to fire Mel and Mel's saying no," said a big Viacom shareholder.

Redstone wouldn't comment specifically on the Karmazin contract talks, telling the Daily News only that "Viacom is the best managed media company. Why would I ever fire Mel?" By ERIC HERMAN DAILY NEWS BUSINESS WRITER The value of New York office buildings jumped 6 under new assessments by the city's Department of Finance meaning even bigger tax bills for owners and tenants. The higher assessments come on the heels of a 19.2 hike in the tax rate for buildings, which combined will mean hefty tax increases for most landlords. Passed along to many tenants, the increases will translate into higher rents and have already chipped away at the value of some properties. "This is really rubbing salt into a wound, because the real estate industry is really suffering," said lawyer Joel Marcus, who represents owners in tax disputes.

Higher taxes, along with rising insurance costs, mean commercial tenants could see rents rise $3 to $5 per square foot beginning this month, the Real Estate Board of New York estimates. In a typical lease, tenants pay for any increase in taxes on their office space. At a time when profits are being squeezed, higher real estate costs could pressure companies to cut costs, including layoffs. "For tenants who signed a lease at the top of the market, the impact is dramatic," said Jeff Gural, chairman of Newmark Company and a commercial building owner. The assessments measure the market value of buildings.

Some properties showed dramatic jumps. The new AOL Time Warner Center in Columbus Circle, still under construction, jumped 275, to $820 million from $220 million. Ernst Young's home, 5 Times Square, rose 65 to $355 million from $215 million. (The building is owned by Boston Properties, whose chairman, Mortimer B. Zuckerman, also is chairman and co-publisher of the Daily News.) Most buildings saw much smaller increases.

The Met Life Building near Grand Central Terminal had a 1 increase, to $602 million from $597 million. With office vacancies rising and rents dropping, the higher assessments seem to clash with market conditions. The values come from year-old information, real estate sources said. Finance commissioner Martha Stark pointed out that many vacancies are unneeded space available for sublease, with owners collecting rising rents. "They are still reporting incomes are up," Stark said.

As much as the assessment increase could hurt owners, its impact pales in comparison with the new tax rate, real estate sources said. Those increases have already brought the city's building values down 3 to 4, Stark said. Real Estate Board president Steve Spinola said the new assessments met expectations. Assessments jumped 4.1 in the current fiscal year, and 7.6 the year before, he said. i of NBC parent General Electric and Blackstone chairman Pete Peterson gave their thumbs-up on Lack to Sony U.S.

boss Sir Howard Stringer and Sony chairman Nobuyukl Idei. Peterson, a longtime Sony adviser, who just stepped down from Sony's board after 15 years, played a comparable role in the hiring of Sony Pictures boss John Calley. "I was asked to meet with Andy and do my own due diligence," Peterson told The News. With Lack officially taking the helm next month, Sony insiders are waiting for his first big moves. The buzz at Sony headquarters is focusing on Columbia Records chief Don tenner and Epic Records chief Polly Anthony, who are expected to be elevated by the new boss.

BYE BYE SEAGRAM There will be fewer lunches at the Four Seasons restaurant and no more views of Park Avenue as the employees of hobbled media giant Vivendi Universal make a move this week from the fabled Seagram Building on Park Avenue to less lavish digs at 800 Third Ave. and E. 50th Street. Many of the employees heading east worked for Seagram before the Bronfman family made the fatal error of selling their liquor empire to French water company Vivendi. Now Vivendi owner of Universal Pictures and Universal Music Group is struggling to stay afloat.

"It's sad, many of the Seagram files are being packed up," a Vivendi exec said. "This building had significance. It was this historic building with a beautiful view." lrman(S edif.nydailynews.cpm. SfocEis slip on profit concerns Mel Karmazin The pressure's building on Redstone following the recent exit of AOL Time Warner chairman Steve Case. Karmazin the most sought-after exec in the media biz has been suggested as one choice to run AOL Time Warner by closely followed Merrill Lynch media analyst Jessica Reif.

But AOL Time Warner spokesman Ed Adler said the company has held no talks with Karmazin. The media giant's board meets today to discuss Case's replacement and AOL Time Warner chief executive Dick Parsons has the inside track. Karmazin's uncertain future is hurting Viacom's stock which has underperformed even AOL Time Warner. Viacom has slipped from $47 in October to yesterday's $41.36 close. By DANIEL DUNAIEF BAIUf NEWS BUSINESS WRITER Stocks slid back yesterday after a strong January start, amid concerns about corporate profits and the strength of the economy.

The Dow fell 119.44 to 8,723.18, driven down by a decline in DuPont's stock after the maker of Lycra warned its quarterly profits would fall short of expectations. The tech-heavy Nasdaq shed 22.19 to 1,438.80, a day after Intel said it would cut capital spending this year. Shares of the biggest chipmak-er feU 44 cents, or 2.5, to $17.35. "The worries are just focused on the earnings numbers more than anything else," said Joseph Abate, a senior economist at Lehman Brothers. At the same time, the group of economists who officially call a recession said last year's setback may not yet be over, as unemployment remains high.

"Additional time is needed to be confident about the interpretation of the movements of the economy last year and this year," said the Business Cycle Dating Committee of the National Bureau of Economic Research. Meanwhile, wholesale prices excluding food and energy dropped 0.4 last year, the Labor Department said. While this indicates that inflation is in check, it also suggests manufacturers have been having trouble raising prices. To be sure, some Wall Street experts said the economy and the markets are holding their own. "We're going to be positively surprised" by earnings this month, said Tobias Levkovich, stock strategist at Salomon Smith Barney.

As earnings come in "we could have a pretty healthy rally," he noted, possibly driving stocks up 10 to 15..