For the second time in as many months, Timothy Rigas looked Buffalo in the eye and said Adelphia Communications is moving ahead with its 1,500-job operations center on the city's waterfront.
He said Thursday that the company is ahead of schedule with its hiring and behind schedule in its building plans.
"Some people are concerned. . . . We're going to complete what we started," said Rigas, Adelphia's chief financial officer.
Undeterred by an all-but-certain recession, the Coudersport, Pa.-based company still plans to raise its office tower and operations center here, which is seen as the catalyst for waterfront revitalization. Adelphia needs the building to house its growing cable television business and related ventures, Rigas said.
Rigas made the remarks during a meeting with the editorial board of The Buffalo News. He also addressed business leaders at a Buffalo Club breakfast session, then followed up with more words of reassurance for community leaders at the Buffalo Public Schools' Emerson Commons campus.
The message was largely the same as during a news conference he held with company President John Rigas on Aug. 31. "Adelphia really hasn't changed much in the last 12 months -- we continue to roll out our strategy," Tim Rigas said.
But jitters about the project and its economic-development boost are understandable. Though Adelphia may not have changed, the financial world around it has turned upside down.
"The terrorist attacks have accelerated what was already a bad situation," said Thomas Morabito, an industry analyst at McDonald Investments in Cleveland.
Even before the economy started worsening sharply this month, Adelphia's $14.4 billion debt load made it the highest-leveraged major cable company, analysts said. Interest payments eat up $1 billion of its annual income, making debt financing essential.
But community leaders were reassured Thursday that Adelphia's tower will rise.
"They have clearly researched and studied their own corporate needs, and determined that those needs can and will be met in this community," said Mark E. Hamister, chairman of Buffalo Niagara Partnership. "Adelphia will do what it said it will do."
The company will choose an architect for the project by the end of October, with construction starting next summer and completion in 2004 or 2005, Rigas said. Though construction is a year behind its original schedule, hiring is ahead of speed. Five hundred of the promised 1,000 new jobs have already been filled, with workers housed in temporary offices.
Launching new products
Though cable companies are usually viewed as havens in a recession, Adelphia stock has lost half its value this year, setting a new low Thursday. Investors are fleeing because prospects for its business -- particularly its telephone unit -- are falling as the economy appears headed for a general decline, Morabito said.
Though it takes a severe downturn to get families to unplug their cable, it's easier to put off buying extras such as digital cable service or high-speed Internet, Morabito said, and those services are critical to Adelphia's growth plans.
But Rigas said that Adelphia continues to sign up thousands of new customers every week for its high-speed Internet and digital cable. The company is hiring 10 people a week to provide service for the additional customers, he said.
"So far, at least in the last few weeks, demand for our products is as high as ever," he said. In three years, Adelphia expects only 50 cents of every dollar of sales will come from basic cable as new services fully ramp up, down from 90 cents currently.
Rather than pull in its horns, Adelphia is readying new products. Wireless phone service will launch in Western New York before year's end, with home telephone service to follow in 2002. A lower-cost version of its Powerlink Internet service is in the works. And computer hardware here is powering a test launch of video-on-demand service in Cleveland, which allows cable subscribers to view premium programming on their own schedule.
Confidence in stock market
Rigas acknowledged that Adelphia's falling stock price makes it harder for the company to raise money. But roiling financial markets should smooth out by next year, he said. The company is moving to reduce its leverage enough to escape "junk bond" status. A sale of some cable systems would hasten that process, which otherwise will take several years through internal growth, he said.
The fall of the World Trade Center towers isn't expected to modify design plans of Adelphia's 15- to 30-story building, or deter people from working there, Rigas said.
"We're not building a 100-story building," he said. "As a high rise, it's not very tall."
Gail Johnstone, president of the Community Foundation for Greater Buffalo, said she was encouraged by Rigas' effort to keep the community up to speed. "I really don't recall a developer ever holding a status session out in the open like this. I think it's a good sign for the project," Johnstone said.
Buffalo Mayor Anthony M. Masiello noted that Buffalonians are no strangers to plans and promises that never pan out. "Some doubted this project, some continue to doubt, because of past experiences," he said.
During his remarks, Rigas made several references to the company's early success in finding highly qualified job candidates in the Buffalo market. John E. Smith of the Coalition for Employment & Economic Development, a minority hiring advocacy group, asked for a specific breakdown of hires to date, during the session's question-and-answer period.
Edward Hartman, Adelphia's vice president of development, was not able to supply a detailed breakdown, but said the company is finding success in building a diverse local work force.
"I still want numbers, and if I keep asking, especially in public forums like this, they'll have to give them," Smith said.
Frank B. Mesiah, head of the Buffalo Chapter of the NAACP, said that while he is also interested in a fuller accounting of Adelphia's hiring practices, he was heartened by the company's decision to keep the public informed.
'On the technology highway'
"I thought this was a very positive meeting. They let people know where they are, but more importantly, they talked more about what kind of skills they are looking for for the jobs they will create," Mesiah said. "That puts parents, children and the schools on notice about how to get ready. You don't want to be on the dirt road when you need to be on the technology highway."
Adelphia also announced Thursday that it has hired Lancaster-based Ecology & Environment to prepare an environmental impact statement on the proposed waterfront office building. Another local firm, Professional Land Survey, has been chosen to perform a survey of the site as part of that process.
The company expects to select an architect for the project by the end of October and pick a construction manager in late November.