Daily News from New York, New York • 984

id DOW JONES 147.79 10,843.87 NASDAQ 128.93 4,184.56 ISldg CDnow sold on cheap mnisiBdDir tasiQuti it i i OF By ERIC HERMAN DA1IX NEWS BUSINESS WRITER Arthur Andersen, one of the world's biggest accounting firms, will become the major tenant of a 48-story Times Square development, the Daily News has learned. Andersen has agreed in principle to lease about 400,000 square feet in the yet-to-be-built project, real estate sources i A REAL SaThe building, Times Square Tower, will rise from the south Boston Properties bought two Times Square parcels intended for redevelopment from Prudential last year. The other site, called 5 Times Square, will be developed as a 37-story tower. It will serve as headquarters for another major accounting firm, Ernst Young. Boston Properties' chairman, Mortimer B.

Zuckerman, also is chairman and co-publisher of the Daily News. Arthur Andersen, which now has offices nearby in the Alliance Capital building at 1345 Sixth has not yet signed a lease for Times Square Tower, sources said, and terms of its deal with Boston Properties were not available. Boston Properties executives declined to comment. Officials at Arthur Andersen did not return calls. Alliance Capital, a major money management firm, is said to be interested in taking over Andersen's space to make room for new staffers coming over following its merger with Sanford C.

Bernstein. Calls to Alliance were not returned. Boston Properties delayed beginning construction on Times Square Tower until it could find an anchor tenant, a search that has lasted for months. Clifford CDnow is the latest casualty in the Internet world, but it may be too early to count out music E-tailing. German media giant Bertelsmann agreed yesterday to buy the cash-strapped company for a relative pittance of $117 million, or $3 a share a far cry from last July's $22.62.

CDnow's downfall was a familiar E-commerce tale of lavish marketing, slim profit margins and tardy moves to expand into more profitable markets. But retailers like Amazon.com may have learned these lessons. And with new forms of distribution on the horizon, the economics of music retailing may change dramatically. "The problem is not that selling music is not a great business. The problem is that CDnow is not a great business," said Forrester Research analyst Carrie Johnson.

Fahnestock analyst Barry Sos-nick said CDnow may have fallen victim to dot-com fever. "It was the notion that these companies were going to experience rapid growth, dominate the industries in which they were operating within a few years and the only way to be a survivor is to spend lavishly," he said. But in the future, digital distribution could brighten the picture for music E-tailers. "Had digital delivery caught on, we could be having a very side of 42 nd Street, between Seventh Avenue and Broadway. Construction had been delayed while developer Boston Properties searched for an anchor tenant.

The building will add yet another tower to the booming Times Square area. Once known primarily for its strip clubs, porno theaters and adult book stores. Times Square has become home to new towers and glitzy corporate tenants like Morgan Stanley Dean Witter, the Nasdaq, Conde Nast and law firm Skadden Arps. Last month, construction began on a 45-story Westin Hotel on W. 43rd Street at Eighth Avenue.

I Rendering of Boston Properties project that accounting firm Arthur Anderson will anchor. designed by architects Skid-more Owings Merrill could Chance Rogers Wells, one of the world's largest law firms, reportedly rebuffed a pitch to move in earlier this year. Construction on the tower start within 30 to 60 days after I i i i i r- i ine aeai wiin Anaersen is nnai- ized, a source said. i if I ion unew NYSE digs different conversation, because a lot of the costs that were crippling to CDnow, like fulfillment of product orders, are eliminated," said Robertson Stephens analyst Lauren Cook Levitan. Reuters Nowhere on Nasdaq, man The stock of men's clothing retailer Today's Man will be delisted from the Nasdaq because the company no longer meets the minimum trading standards.

Today's Man shares which have plummeted 83 this year sank to just 31 cents yesterday. In 1995, they traded at more than 1 1 a share. To trade on the Nasdaq' main market of stocks, shares must meet a $1 minimum bid price. still a long way to go before the project gets off the ground. "We're not unveiling anything today.

This is the start of the review process," said NYSE spokesman Ray Pellechia. Mayor Giuliani announced plans for a new exchange more than 18 months ago. But the city and state have yet to buy the land from J.R Morgan, real estate sources said. One source speculated that exchange officials had not decided definitively whether to move to the new site or stay put. In the meantime, the value of Morgan's land has rocketed and the Wall Street firm has begun showing the land to other potential buyers.

Rockrose Development also owns a small part of the site. The city and state have offered tax breaks and financial incentives to keep the exchange in New York. The state has pledged to contribute $225 million to the construction project, and the city will reportedly pitch in $255 By ERIC HERMAN DAW NEWS BUSINESS WRITER The New York Stock Exchange got one step closer yesterday to building a new $727 million home with a 21st-century trading floor and a soaring, 50-story office tower. The new facility would increase the size of its trading floor built in 1903 by nearly 40 to 50,000 square feet from 36,000 square feet. The Empire State Development Corp.

submitted a plan for the new exchange yesterday, setting in motion a review process that's expected to lead to final approval. Public hearings on the proposal will be held over the next several months. "This is just part of the process," said Maura Gallucci, a spokeswoman for the development agency. The new stock exchange would stand on land now occupied mostly by J.R Morgan's headquarters, across Broad Street from its longtime home. Big Board officials said there's 5 a CM lhe Moorestown, company yesterday canceled a l-for-4 reverse stock split on doubts that the plan would boost its share price beyond the near-term.

In March, the retailer hired investment bankers to help it raise money and boost its stock. Three money-losing stores were shut. In the metro area. Today's Man still operates two shops in Manhattan, three on Long Island and one in Westchester. Bloomberg NYSE chairman Richard Grasso must go through extended process to get new trading facility..