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BREAKING NEWS | THIS WEEK'S ISSUE





City announces High Line plan

by Anne Michaud

The Department of City Planning announced today that it will allow land owners under the High Line to sell air rights to residential developers along 10th and 11th avenues, potentially erasing any major objection to refashioning the old railway into an elevated promenade park.

The plan for the High Line--a 1.6-mile stretch of abandoned track that runs from West 17th Street to West 30th Street between 10th and 11th avenues--is part of the city’s push to extend midtown Manhattan's business district west to the Hudson River, an initiative that includes the construction of a new Jets stadium. Also called Hudson Yards, the project would dovetail with rezoning West Chelsea.

Property owners South of 30th Street have objected to the city taking over the structure, now that the elevated train no longer uses the tracks. To mollify property owners, city planners proposed the air rights deal at a press conference Wednesday morning.

The city is also considering a "bonus" package, in which it would pay property owners for building a staircase or elevator to the High Line, in exchange for the right to develop property below it. Vishaan Chakrabarti, director of the planning department's Manhattan office, said the city will encourage single-story development under the line, such as restaurants and art galleries.

An advocacy group, the Friends of the High Line, is charged with coming up with a design for a 16,000-square-foot park at the foot of the line at 17th Street.
Copyright 2003, Crain Communications, Inc


Green building competition



Designs for environmentally friendly buildings that use alternative power, employ water or energy conservation techniques, and/or involve the reclamation of brownfields can earn $5,000 in a city contest.

The competition, sponsored by the mayor’s office, the city Department of Environmental Protection and the federal Environmental Protection Agency, will offer a showcase for how “green” building principles can be incorporated into existing properties and new construction. The American Institute of Architects, nonprofit foundation Earth Pledge, the Museum of the City of New York and others are also backing the contest.

A panel of experts will oversee the competition, which will award prizes for residential, commercial and industrial buildings. Winners will have their designs displayed in all five boroughs. All entries must be submitted by Jan. 15, with the winner announced in early 2004.
Copyright 2003, Crain Communications, Inc


Judge throws out national Do Not Call registry



A federal judge has thrown out the hugely popular national "Do Not Call" registry, ruling that the Federal Trade Commission was not specifically authorized by Congress to create the list.

U.S. District Judge Lee R. West in Oklahoma found that Congress empowered the Federal Communications Commission to create such a list in 1991, but that later legislation, including a bill signed into law this year by President Bush that authorized the FTC to collect fines from violators, never actually gave the commission the power to establish one.

"This decision is clearly incorrect," FTC Chairman Timothy Muris, said in a statement. "We will seek every recourse to give American consumers a choice to stop unwanted telemarketing calls."

The decision marked a win for the Manhattan-based Direct Marketing Association, which had filed a suit with several other marketers, arguing that the FTC had overstepped its bounds. More than 50 million Americans rushed to sign up for the list since the FTC launched it in late June. Enforcement, which was to include fines up to $11,000 for companies found in violation, was to begin on Oct. 1.

While the DMA praised the decision, it acknowledged that the millions who signed up "have expressed their preferences not to receive telephone-marketing solicitations." The 5,000-member trade group said it supports the creation of a national registry and noted that it maintains one of its own.

In July, New York state gave the 2.4 million names on its own Do Not Call list to the FTC, and said the registries would be merged. The state Consumer Protection Board could not immediately say whether the New York list will be resurrected.
Copyright 2003, Crain Communications, Inc


Pension fund chiefs call for independent review of NYSE



In a meeting with New York Stock Exchange officials on Wednesday morning, pension fund chiefs from New York, California and other states called for an independent review of the Big Board’s governance practices in the wake of the Dick Grasso compensation fiasco.

New York state Comptroller Alan Hevesi, New York City Comptroller William Thompson, California state Treasurer Phil Angelides, and a coalition of other officials whose pension funds have assets of more than $586 billion met with NYSE officials to discuss recommended reforms that they had set forth in a letter to SEC Chairman William Donaldson. They proposed shrinking the board from its current 27; replacing existing board members with increased investor representation; splitting off the board’s regulatory function from its business operations; eliminating any conflicts of intrest that get in the way of the NYSE pursuing fraud; and fully disclosing executive compensation and other financials.

Interim Chairman John Reed, who did not call in to the meeting, told Bloomberg News separately that he wants to reduce the board to 10 to 12 people, and that new directors are needed.

The language of the fund officials at the meeting itself was fairly neutral, sources say. Former NYSE compensation committee chairman Kenneth Langone, who has been mentioned as the board member most likely to follow Mr. Grasso out the exit door, said he was relieved at the tempered tone. He even quipped that he had expected “to see ... a Kevlar vest outside” the meeting room, according to sources.
Copyright 2003, Crain Communications, Inc


Biotech investment firm pulls IPO filing

by Eileen AJ Connelly

Manhattan-based Diversified Biotech Holdings, a biotech research and investment firm, withdrew its IPO filing yesterday, just two months after filing the registration.

The 4-year-old company, which offers biotech market analysis and investment opportunities through its InvestBio and InvestPrivate subsidiaries, filed in late July for a $10.2 million IPO. In a letter to the Securities and Exchange Commission, CEO Scott Mathis stated that the withdrawal was being made "in order to restructure our corporate organization and to raise capital."

Four-year-old DBH saw its losses widen last year, to $6.4 million from $3.4 million in 2001, while revenues fell to $1.6 million from $2.7 million. In February, the company completed a $3.2 million private placement offering.
Copyright 2003, Crain Communications, Inc


MONY shareholders sue over AXA deal



Outraged stockholders are suing financial services firm MONY Group to stop a proposed $1.5 billion buyout by French insurer AXA Financial.

The $31-per-share offer, announced Sept. 17, was called "paltry" in a lawsuit filed in Delaware Chancery Court by E.M. Capital, E.L.M. Realty, Congregate Investors and Abbott Hill Partners, according to Bloomberg News. Shares of Manhattan-based MONY were trading at $33.26, down .07%, at 11:30 a.m. today.

The suit asks the Delaware Chancery Court to stop the sale, auction off MONY, and award damages and legal fees. It also challenges the fairness of the compensation that MONY CEO Michael Roth and 14 other executives, who have “golden parachute” agreements in their contracts, may receive in the deal.

AXA is also named in the suit for allegedly helping MONY directors violate their duties to stockholders.

A Mony spokesperson told Bloomberg that it does not comment on pending litigation.
Copyright 2003, Crain Communications, Inc


Viacom cuts profit forecast



Viacom Inc. reduced its 2003 profit forecast, citing slow growth in local advertising.

The Manhattan-based media giant says it expects to mid- to-high single-digit growth in revenues and operating income for the full year. It had earlier forecast double-digit growth operating income growth and high single-digit revenue growth.

Shares of Viacom fell as much as 4.5% on the news, and were down 3.4%, to $38.96, at 10:30 a.m.

While the company says it has seen "robust" growth in national advertising sales, it says local markets were not improving as rapidly as expected going into the fourth quarter.

The company--the parent of CBS, MTV, Nickelodeon, Simon & Schuster, Paramount Pictures and Infinity Broadcasting--gets about half its revenue from advertising-driven businesses. With CBS airing the Super Bowl and political advertising expected to increase, the company predicted improvements in local advertising markets next year.
Copyright 2003, Crain Communications, Inc


Administration stays with power dereg



Though buffeted by criticism after the Aug. 14 blackout, the Pataki administration intends to stay the course on deregulation of the electric power industry, says William Flynn, the new chairman of the state Public Service Commission.

Mr. Flynn says that contrary to critics' claims, deregulation is not to blame for either the blackout or lack of investment in transmission. Both state Attorney General Eliot Spitzer, who may run for governor, and Assembly Democrats have spoken out against deregulation in the blackout's wake. Instead, Mr. Flynn says, the outage blame lies with Ohio and other states that don’t have the same high reliability standards that exist in New York. Mr. Flynn admits there’s a need to spend on transmission lines, but "I would have made that statement on Aug. 13."

While there has been debate over who’s responsible for guiding that investment, Mr. Flynn says that he and the governor believe the primary responsibility rests with the Federal Energy Regulatory Commission. "They're the ones who need to step up to the plate," he says.
Copyright 2003, Crain Communications, Inc


Pfizer, Forest file patent infringement suits

by Mary Sisson

Manhattan-based pharmaceutical companies Pfizer Inc. and Forest Laboratories Inc. both filed patent-infringement suits this week against manufacturers of rival drugs.

Pfizer, which makes the erectile-dysfunction drug Viagra, filed suit in Delaware federal court against German firm Bayer AG and U.K. company GlaxoSmithKline Plc, which are co-marketing Levitra. The Pfizer spokesman says that this actually was a continuation of a suit filed in October; it was amended and refiled to reflect the fact that Levitra has now been approved for sale. Levitra has captured half the new prescriptions written for impotency since its launch earlier this month.

Forest, along with Danish partner H. Lundbeck, filed suit in the same court against Ivax Corp., a Florida company that has applied to manufacture a generic version of Forest's depression drug Lexapro.
Copyright 2003, Crain Communications, Inc


AOL settles FTC charges



AOL Time Warner’s America Online unit settled federal regulators’ charges that the company kept billing customers who had canceled their subscriptions and was slow to send consumer rebates.

Under the settlement, America Online agreed to several terms, including sending confirmation letters to consumers who inquire about cancellation but then choose to continue service, and sending rebates as quickly as promised. The Federal Trade Commission had alleged the company’s CompuServe division failed to deliver rebates to consumers in the time promised under a subscription promotion.

America Online admitted no wrongdoing in settling with regulators.

In other news, two executives at now-defunct PurchasePro.com, an electronic procurement company that was linked to alleged fraud at AOL Time Warner, pleaded guilty to fraud charges.
Copyright 2003, Crain Communications, Inc







Other Top Stories Making Headlines

Green building competition


Judge throws out national Do Not Call registry


Pension fund chiefs call for independent review of NYSE


Biotech investment firm pulls IPO filing


MONY shareholders sue over AXA deal


Viacom cuts profit forecast


Administration stays with power dereg


Pfizer, Forest file patent infringement suits


AOL settles FTC charges


© Copyright 2003, Crain Communications, Inc. All Right Reserved.