The major influx of those needing office space expected in the wake of Hurricane Katrina simply did not occur, according to the latest Houston Office Performance Update from O'Connor & Associates. The New Orleans office market was roughly 12.5 million square feet in size, compared to Houston's 156 million-square-foot market. The report notes that even if all of that city's office tenants moved to Houston, it would only boost occupancy rates by less than eight percent. Former New Orleans broker Mark Preston projects that one to two million square feet will be absorbed in Houston as a result of Hurricane Katrina.
Even as questionnaires are being sent to some 400 potential jurors for the upcoming trial of three former top Enron officials, former Enron Chairman Ken Lay plans a speech at a December 13th luncheon hosted by the Houston Forum. Lay is scheduled to talk about the collapse of Enron at the event just a month before his trial begins in U. S. District Court here in Houston with former Enron officials Jeffrey Skilling and Richard Causey. Lay is accused of lying to the public, investors and Enron employees, and faces charges that include securities and wire fraud and making false statements. The Securities and Exchange Commission also accuse Lay in a civil complaint that seeks more than $90 million. Lay says he takes responsibility for Enron's collapse, but denies he did anything wrong. The Houston Forum in the past has heard from Enron Whistleblower Sherron Watkins and New York Times investigative reporter Kurt Eichenwald, author of A Conspiracy of Fools.
Despite the damaging impact of a pair of hurricanes, the economy appears to have bounced back in September. The Commerce Department says personal spending rose one-half of one percent last month, while incomes surged an even stronger 1.7 percent. The incomes figure is the strongest seen since December 2004. It also marks an improvement from the nine-tenths of one percent decline in incomes seen in August, which reflected fallout from Katrina. Uninsured losses to residential and business property reduced incomes by about $5 billion on an annualized basis in September and by about $240 billion annualized in August. Spending had declined five-tenths in August, also because of Hurricane Katrina.
Amtrak will resume part of the Sunset Limited passenger service that was suspended for more than two months because of Hurricanes Katrina and Rita, which damaged railroad infrastructure. The route from Los Angeles to New Orleans is scheduled to stop in Houston on Friday, but it's not expected to be on time. The service east of New Orleans remains suspended. The three-day-a-week Sunset Limited is frequently 15 minutes or more behind schedule. Matthew Melzer, a spokesman for the National Association of Railroad Passengers in Washington, D.C., says that Houston is one of the underserved cities in the country, and the train always seems to have time problems, which are not really its fault. He says the cause is the lack of funding from Congress.
Wind turbines supplying energy to homes and businesses will one day line Texas' 376-mile coastline--if the state's Land Office Commissioner Jerry Patterson has his way. He says the turbines will be about ten miles offshore--far enough to preserve the treasured view but close enough to make coastal wind power an affordable energy alternative still missing in the United States. Economists, engineers and industry executives say wind energy is needed, even if it doesn't always mean lower bills, because it lessens dependency on oil and natural gas. Federal tax breaks for developers and the rising cost of natural gas used to generate power, however, enhances wind energy's future fiscal benefits. Economists say time will tell. Still, some environmentalists worry about disrupting the ecosystem.
Sysco today posted a first-quarter profit 7.7 percent below last year's comparable quarter. Houston-based Sysco reports net income for the three months ended October first of $208.5 million. The largest food-service distributor in North America says its profit was hurt by an accounting charge and higher transportation costs. The latest quarter included a charge of five cents a share related to a change in accounting for stock-based compensation. But sales rose 6.4 percent to just over $8 billion.
Valero Energy today posted a third-quarter profit more than double that of last year's quarter. The San Antonio-based oil refiner credits a steep rise in energy prices and refined product margins for the profit increase. For the three months ended September 30th, net income after preferred dividends surged to $858 million. Minus a one-time charge relating to its acquisition of Premcor Incorporated, earnings were $1.3 billion. Revenue rose 62 percent to $23.3 billion--which is well above analysts' consensus target of $18.96 billion. Valero also announced that Chief Executive Bill Greehey will step down at the end of the year. Executive Vice President and Chief Operating Officer Bill Klesse has been named to replace Greehey as CEO as of January 1st. Greehey will remain as board chairman.
Chevron Phillips Chemical is selling its cumene production unit at its Port Arthur facility to UK-based INEOS Americas. Chevron Phillips Chemical will continue operations of its olefins complex and the existing cyclohexane unit at the Port Arthur facility. Cumene is an intermediate used to produce phenol and acetone.
Morris Architects is relocating its headquarters from Greenway Plaza to downtown Houston, and opening an office on Gessner in West Houston. The 70-year-old firm will office on the third floor of First City Tower on Fannin beginning December 12th.
Friendswood Development is expanding into the Conroe area with its new Graystone Hills community off Longmire Road, west of I-45 and Loop 336. The 331-acre development will have homes from $160,000 to $300,000 beginning in June 2006. Some 780 home sites are planned, with build-out scheduled for 2011.
Cumulus Media, the nation's second largest radio operator, is teaming with a private investor group to buy the 33 stations owned by Susquehanna Pfaltzgraff Radio, which owns KRBE 104.1 FM. Cumulus will contribute two FM stations in Houston--KFNC 97.5 FM and KIOL 103.7 FM--and two stations in Kansas City, in return for its membership interest in the partnership. The deal is valued at $1.2 billion. The investor group, called Cumulus Media Partners, includes Bain Capital, the Blackstone Group and Thomas H. Lee Partners. Cumulus, which will provide management services to the partnership, says in a statement that the deal should be completed in the first half of next year. In a separate deal, privately-held Susquehanna has also agreed to sell its cable television operations to Comcast for $775 million. The acquisition will add 225,000 basic cable subscribers, based mainly in Pennsylvania, New York, Maine and Mississippi. Cumulus says including all pending deals, it would own and operate 343 radio stations in 67 U. S. markets.
Houston-based Exobox Technologies has completed its reverse merger with TMC Acquisition and Jin Pin, with the resulting publicly-owned company to be known as Exobox Technologies. It will trade on the Pink Sheets under the symbol EXBX. Exobox is a network security company with a proprietary software designed to stop cyber threats for individuals, corporations and government agencies.
ERHC Energy says Addax Petroleum will replace Noble Energy in the Noble/ERHC consortium and will assume the role of operator. Noble informed the Joint Development Authority and ERHC Energy of its decision to withdraw from participating on October 24th. Addax Petroleum is an international oil and gas exploration and production company focused on West Africa. Based in Houston, ERHC Energy focuses on exploration in the Gulf of Guinea offshore West Africa.
Border's is opening a new outlet in Baybrook Passage Shopping Center this month, at I-45 and Bay Area Boulevard. The store will feature a Seattle's Best Coffee outlet, a Paperchase shop and wireless Internet access. This will be Border's sixth Houston-area outlet.
A new Wal-Mart Supercenter is slated to open at 680 West Sam Houston Parkway South on Tuesday, creating 550 new jobs. The 24-hour supercenter will have a bakery, a deli and a fresh produce section, as well as a Tire & Tube Express, a McDonald's restaurant, a portrait studio, a Woodforest National Bank, a Murphy USA gasoline station and a pharmacy.