Just a week after winning a fierce court battle for the Philadelphia Inquirer, Lewis Katz died in a plane crash. Known for being a Jewish philanthropist, Katz made for stories in the local news over the ownership of the area’s largest newspaper. Headlines in the paper he would eventually takeover read, “Katz accuses Norcross of ‘innuendos and lies’ in Inquirer battle.”
Tag: Business
bookmark_borderPhiladelphia to Sell Philadelphia Gas Works (PGW)
The Nutter Administration announced today that it has signed an agreement to sell the assets of the Philadelphia Gas Works (PGW) to UIL Holdings Corporation for $1.86 billion. The sale, which would inject at least $424 million into the City’s pension fund, must still win approval from City Council and then the Pennsylvania Public Utility Commission (PUC), prior to closing.
“When I announced nearly two years ago that the City would begin exploring the sale of PGW, I pledged that I would sign an agreement only if the terms benefited Philadelphia taxpayers and PGW customers,” said Mayor Michael A. Nutter. “This agreement accomplishes those goals and much more. UIL submitted the highest bid for PGW and agreed to contract terms that were important to the City. Our agreement keeps rates frozen for three years, maintains PGW’s discount programs for low-income families and seniors, safeguards PGW employee and retiree pensions and positions PGW to take full advantage of the abundant supply of natural gas in Pennsylvania to make our city and region a prime energy hub.”
Headquartered in New Haven, UIL serves approximately 706,000 electric and natural gas customers in Connecticut and Massachusetts and has combined total assets of more than $4 billion. Its holdings comprise The United Illuminating Company, The Southern Connecticut Gas Company, Connecticut Natural Gas Corporation and The Berkshire Gas Company.
“We are very excited about coming to Philadelphia and getting involved with the community,” said UIL CEO James P. Torgerson. “Energy is our core business and UIL is well suited to operate the natural gas utility business in Philadelphia and make substantive investments in its infrastructure. UIL has substantial experience running an urban natural gas utility and being an engaged civic partner in the communities we serve. We also see this as a great opportunity to explore strategic growth opportunities that will benefit the customers and citizens of Philadelphia. We look forward to working with the City Council and PUC through the approval process.”
Once the sale is complete, UIL plans to operate dual corporate headquarters in Philadelphia and New Haven. PGW will become UIL’s largest operating company, and UIL officials say it is very important to them to become part of the Philadelphia community, including personal involvement in civic activities and financial commitments to charitable organizations.
“PGW will become a bigger, stronger company under UIL’s ownership and that will create more opportunities for us,” said PGW President and CEO Craig E. White. “Our company has made major strides over the past several years, but there are constraints as a city-owned utility that prevent us from realizing our full potential. The ability to react quickly to market opportunities and a greater investment in developing markets will result in a win-win for both the company and its customers and will result in a greater demand for jobs.”
The contract signed by UIL and the City requires that all PGW employees be offered employment at UIL. If an employee decides to retire or accept a job elsewhere, that position may go unfilled, but total employment may not dip below 1,350 employees for at least three years. A privately-owned PGW will require highly skilled employees to maintain and operate the gas company and will ensure that the system continues to deliver gas safely to customers, while improving the gas infrastructure. Like PGW, UIL has strong relationships with the Utility Workers of America. Also like PGW, UIL has a highly diversified workforce and places an emphasis on contracting with minority and woman-owned businesses in selecting its vendors.
The sale will provide substantial support for the City’s pension fund, helping address one of the most pressing financial issues facing the City. After paying off all of PGW’s bond obligations and putting aside funds for other liabilities, including fully funding the PGW pension plan and prudently reserving for residual risks, the City expects to have between $424 million and $631 million remaining, based on current stock and bond markets and reasonable assumptions. The Administration will then deposit the sum into the City employee pension fund. With the pension fund now less than 50 percent funded, this contribution is one part of a strategy to provide additional resources to the fund, while lowering its costs in order to improve that funding percentage.
The Administration proposes other measures to preserve the value of this contribution so that the benefit to the City pension fund will be protected over time without any negative impact on the City’s general fund. The pension funds’ low funded percentage is one of the greatest concerns mentioned by rating agencies, so the deposit should be a credit positive for the City.
Interest in buying PGW, which remains the largest city-owned gas company in the nation, was overwhelming. Thirty-three entities submitted indications of interest last fall. Through a series of bidding rounds the City whittled the field to a handful before finally selecting UIL.
“We thoroughly vetted all bidders and chose UIL for a number of reasons, not the least of which was that it provided us with the strongest contract terms and value. But beyond the numbers, UIL has an outstanding safety record, excellent employee and customer relations, credibility, a commitment to infrastructure improvements, and is a valued corporate citizen in the communities it now serves. I am confident that City Council and the citizens of Philadelphia will arrive at the same conclusion as I have: that UIL is going to become a great addition to our City,” Mayor Nutter said.
PGW is the nation’s largest municipally-owned gas utility, with annual revenues of more than $600 million, more than 500,000 residential, commercial and industrial customers, and more than 1,600 employees. Read more about the sale process and submit questions or comments at www.exploringasale.com.
bookmark_borderPromise Zone
PHILADELPHIA, PA — The City of Philadelphia was one of three cities and a total of five areas selected for a Promise Zone designation, a federal initiative to accelerate revitalization efforts in targeted areas. The Promise Zone initiative is led by the White House with support from federal agencies, including the U.S. Department of Housing and Urban Development, U.S. Department of Agriculture, U.S. Department of Education and U.S. Department of Justice.
“Being selected as a Promise Zone is an important step in the transformation process for a neighborhood struggling with high poverty, high crime, high vacancy, low educational attainment and low employment rates,” said Mayor Michael A. Nutter. “Being a Promise Zone will enable the City to align existing resources and apply for new federal funding – building on efforts already at work – through a multi-faceted, focused approach. I want to thank President Obama and his Administration for this recognition and the opportunities it will provide.”
The Promise Zones designation provides a package of tools to help local leaders accelerate efforts to revitalize their communities. The designation:
· Creates a partnership between the federal government and local leaders who are addressing multiple community revitalization challenges with on-the-ground technical assistance to help navigate federal programs and regulations;
· Provides preference points on other federal grants and funding opportunities; and
· Will, if enacted by Congress, provide employer tax incentives to create jobs for Zone residents and attract private capital to disinvested places.
The Mayor’s Office of Community Empowerment and Opportunity (CEO), the City’s community action agency, will serve as the lead agency throughout the Promise Zone process.
“I am thrilled that the Promise Zone designation will provide federal agency support in helping us implement Shared Prosperity, our plan to fight poverty, and for this opportunity to assist residents of several West Philadelphia neighborhoods,” said Eva Gladstein, Executive Director, CEO.
The City’s selected Promise Zone is a nearly two-square mile area in West Philadelphia. Bordered by the Schuylkill River on the east, Girard Avenue on the north, 48th Street to the west and Sansom Street to the south, the Promise Zone is home to 35,315 residents.
“The Administration has created a wonderful opportunity for communities like Mantua to be revitalized, such as increasingly affordable housing and improving safety. Now with the Promise Zone designation, we will be able to bring more resources to our community to address a comprehensive range of issues,” said Michael Thorpe, Chairman of the Board, Mt Vernon Manor.
The proposal was a collaborative effort led by CEO. The Philadelphia Promise Zone plans to use the area’s assets, including its proximity to transportation, strong anchor institutions, the Lancaster Avenue commercial corridor, Fairmount Park and the Philadelphia Zoo, to support the creation of jobs, increase economic activity, improve educational opportunities, reduce violent crime, and leverage private investment in a defined geographic area of high need. The proposal will leverage more than $575 million in funding and anticipates future public and private investment of $250 million.
Implementation and supporting partners include Drexel University, Mt. Vernon Manor, Philadelphia LISC, People’s Emergency Center, Philadelphia School District, Philadelphia Redevelopment Authority, the City’s Commerce Department, Philadelphia Housing Authority, Office of Housing and Community Development and others. Fairmount Ventures and the Mayor’s Office of Grants supported the grant’s development.
“Drexel is a committed partner with the City, Mt Vernon Manor and PEC in this important work. We are proud to bring the full weight of our academic and institutional resources to support this West Philadelphia neighborhood,” added John Fry, President, Drexel University.
The White House intends to designate 20 Promise Zones across the country by the end of 2016.