American
Airlines has been trying to move in with US Airways so that, as one
big airline, it can make more money (or lose less) than the two have been
collecting as separate, formerly bankrupt companies.
The people who run Philadelphia say this is good for us. Mayor Nutter says the
airline workforce here would greatly benefit. Rob Wonderling, president of the Greater Philadelphia Chamber of Commerce,
expects "more nonstop flights to more markets" through Philly. At a
pro-merger rally in Washington in September, Rep. Patrick Meehan (R., Pa.), a former federal
prosecutor, pronounced the combination fair. Rep. Chaka Fattah (D., Pa.) said it "would
strengthen Philadelphia as an international city."
Pittsburgh, on the other hand, is worried. The city is home
to a US Airways maintenance facility, which the combined airlines might close
as they cut costs. US Airways won't promise to keep it open. And US Airways'
"failure to deliver on its promises" in previous mergers would make
it hard to trust even if it did promise, Rich Fitzgerald, executive of Allegheny County, told
the city's business weekly last summer. He has repeated the complaint to state Attorney General Kathleen Kane.
Kane lined up with Pittsburgh, and President Obama's Justice
Department, to oppose the merger.
"She is not favoring one city over another,"
Kane's spokesman, Joe Peters,
told me. "She is making a decision as attorney general of all the
people."
Peters, for instance, had consumers in mind. "New fees,
change fees, baggage fees" might follow the merger, he warned.
To prevent that, we'll spend legal fees. Though that might
lead to bankruptcy fees, again, if you believe the airlines.
"The second reason is protecting jobs," Peters
told me. "There has been a history of closure in these mergers." And
"a history of broken promises," he added, echoing Fitzgerald's
complaint.
But Philadelphia business and political leaders, as well as
national airline union leaders, say the deal means more jobs and better
service.
How did Kane weigh Philadelphia's benefit projections
against Pittsburgh's cost worries?
"The attorneys general in other states and the U.S.
Department of Justice have done a great deal of analysis and engaged experts in
the field, and all of that went into the position of Attorney General
Kane," Peters said.
I asked Peters to share this analysis with readers. No way,
he said: That's "attorney work product."
That might do for prosecutors. But it's an odd way to
justify public policy.
At least show your work.
Luxury bet
An arm of Pennsylvania state government is buying hundreds
of Philadelphia luxury apartments, at more than $400,000 apiece.
Lowe
Enterprises of Los Angeles agreed last week to spend $105
million to buy the 227-unit Granary
development at 20th and Callowhill Streets. The project cost Pearl Properties about $80
million to build, including 10,000 square feet of retail space.
Lowe didn't name its client, but it was easy to connect the
dots, as Lowe announced in September it was opening an office in Philadelphia
to buy properties for the Pennsylvania
State Employees' Retirement System. SERS spokeswoman Pamela J. Hile confirmed
SERS was an investor in the property.
SERS says it buys real estate when prices are poised to go
up. The pension system and its buyer expect high-end Philly apartments will get
more expensive.
Should prove a profitable deal - for Lowe, at least: The
firm collected $2.9 million in SERS fees in 2012.
Source: Philly.com
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