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PRESSURE MOUNTS FOR DEAL WITH ADELPHIA

Adelphia Communications is searching for a Buffalo location to temporarily house the estimated 50 computer programmers, the first wave of 1,000 employees who would come here if a deal can be struck to build an operations center on the downtown Inner Harbor.

"Assuming we're successful in structuring this project with the public sector, there will be a stream of jobs we'll need to find temporary offices for," said Edward Hartman, Adelphia executive vice president.

"Ideally, it would be best to have them downtown, but we'll consider all options," he said. "We expect to make a decision in a month or so."

But The Buffalo News has learned that Pennsylvania officials also are in the hunt for the operations center and want Adelphia to build its planned facility in the Keystone State. Adelphia's headquarters are located in Coudersport, Pa., about 100 miles south of Buffalo.

Pennsylvania "would like to have the Buffalo growth (operations center)," Hartman confirmed, "but now we're focused on Buffalo and want to get something completed in Buffalo."

Talks have intensified in recent weeks in the complicated negotiations required to make the Adelphia Inner Harbor project a reality. It has been a top priority for Mayor Anthony M. Masiello, and Gov. George E. Pataki has met twice with Adelphia owner John J. Rigas.

"The governor is obviously very supportive and understands the economic implications and what it means to Western New York," Rigas said. "He's enthusiastic. He's moving it along."

Rigas said his firm, now the fifth largest cable television company in the United States, has an urgent need to build an operations center. He acknowledged that other places want that investment, but he re-emphasized that Buffalo is Adelphia's first choice.

"If it was to be delayed and without sufficient reasons why, we'd have to look some place else," Rigas said, adding: "That's not a threat, and it isn't happening. Everybody has been cooperative."

County Executive Joel A. Giambra, completing his first month on the job, made it clear last week that the Adelphia project, which is expected to ultimately anchor a total waterfront redevelopment package estimated at $150 million, is his top priority, too.

"I am attracted to this project because it will help create an anchor at the foot of Main," Giambra said. "The prospect of 1,000 high-tech jobs is very significant to the community."

Giambra said he's attended four meetings so far on the Inner Harbor project. He also said one of the chief reasons he appointed Laurence K. Rubin county commissioner of environment and planning was because of his familiarity with the issue.

Rubin helped negotiate the deal to build the Marine Midland Arena. The Rigas family, owner of Adelphia, is poised to become the sole owner of the Buffalo Sabres. A final transfer is expected to occur by March 15.

"Larry Rubin has been told to meet with the project team as often as possible to get that project done," Giambra said.

Giambra's recent decision to delay further planning work on a proposed convention center at the Mohawk site until after an environmental study is completed, a process that could take more than a year, also may indirectly assist the prospects of the Adelphia proposal.

Both the Inner Harbor redevelopment and the convention center would require substantial state aid. Government development sources say having the convention center timetable pushed back will make it easier for Albany to subsidize the Adelphia project.

The Adelphia operations center proposal, however, has never been a straight-forward development deal.

It has been linked to the need by the Rigas family to find a way to make their investment in the arena and the Sabres profitable. They claim their losses have averaged $15 million a year in recent years.

The Rigases have asked that the 30-year lease on the arena be reopened and that taxpayers assume much of the private bank debt, something that Pataki and his development officials have refused to do.

The arena, which opened in October 1996, was built with $25 million from the state, $20 million from the county and $10 million from the city. Four banks loaned a total of $67.5 million to the project.

State officials have balked at reopening the arena lease because they fear it would lead other communities, notably New York City, to push for financial assistance for their sports teams and facilities as well.

They want the Inner Harbor project framed as an economic redevelopment deal that would bring 1,000 jobs in the growing telecommunications industry to Buffalo, not the bailout of a professional sports team.

Rigas, 75, said that reopening the lease may not be the only way to remedy the troubled finances of the hockey club and arena.

"I had heard that they (state development officials) don't want to reopen the lease," he said. "I can understand that. We understand it can be a delicate situation, and we're not insisting it has to happen that way."

He emphasized, however, that his family must solve the financial problems associated with the hockey club and arena.

"Years down the road, the family may have different goals, and time goes on, and they may want to divest the Sabres and the arena," he said. "You can't have huge losses. We want to make it work, and we don't constantly want to hear about the problem."

Rigas added that the family has no plans to get out of the hockey business.

"Right now, there's no intention," he said. "We're here for the long term."

Rigas declined to set a deadline for when talks on the waterfront operations have to be concluded, only observing "they can't drag on too long."

He does agree with Masiello's goal that negotiations be wrapped up by the end of February. The mayor wants a firm redevelopment proposal before state, county and city lawmakers by March.

"It's an ambitious and aggressive position," Rigas said. "I'm certainly committed to that time frame, and Tim (Rigas) and Ed Hartman are working on it diligently."

Giambra also said he would like to meet the mayor's schedule.

"We're prepared to meet that timetable if all the outstanding questions and issues are addressed," he said.

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