Monday AM October 2nd, 2006

Baylor College of Medicine building its own private teaching hospital...Information Week: AT&T may cut hundreds of software jobs...Grubb & Ellis: soaring office vacancy rates likely will not be repeated if housing market continues to soften...

Baylor College of Medicine is building its own private teaching hospital, without a partner. St. Luke's Episcopal Hospital became the primary, private teaching hospital for Baylor in April 2004 after Baylor ended its 50-year affiliation with The Methodist Hospital after officials clashed over Baylor's intentions to open an ambulatory care center. Baylor's relationship will continue with St. Luke's—the two institutions will continue to share programs, and Baylor's residents will continue to rotate through St. Luke's.


AT&T could cut hundreds of software jobs nationwide, according to Information Week magazine. AT&T employs about 6,600 people in the Houston area. The magazine says AT&T is expanding its relationship with an Indian outsourcer partially owned by British Telecom. The article also claims that AT&T's senior management plans to reduce the number of information technology contractors used in the U.S. for internal software development.


The soaring office vacancy rates following the tech bubble and resulting recession in 2001 likely will not be repeated if the U.S. housing market continues to soften, according to Grubb & Ellis. The Houston firm analyzed leasing and employment data. The report says the office market is moving through a classic recovery cycle as absorption is strong, construction is modest, vacancy rates are falling and rental rates are firming. It states that the recent softening of the residential real estate market is unlikely to significantly impact Houston's office market.


A new state law intended to collect taxes on the full retail value of used vehicles sold in private-party exchanges took effect Sunday. The so-called "liar's affidavit'' law requires that buyers pay sales tax on 80 percent or more of a used vehicle's retail value--regardless of the actual purchase price. The law is meant to stop the two parties in a used-car deal from agreeing to lower the official sales price so the buyer pays less sales tax. The legislature passed the law this year. State officials expect it to generate $35 million annually. Private transactions make up about one-third of the state's used-car sales. The law covers cars, trucks, motorcycles, recreational vehicles and trailers. The law does not apply to used-vehicle sales at dealerships. Dealerships will continue to calculate taxes based on sales price.


The Sterling Group of Houston and Arkansas-based The Stephens Group have completed the acquisition of a majority stake in BTEC Turbines, headquartered at the Houston Ship Channel. BTEC specializes in the refurbishment, repair and packaging of large gas turbines, as well as power plant design, construction, commissioning and support.


The Granduca Luxury Residential Hotel has opened in the Galleria area. The Italian-styled structure, according to the Houston Business Journal, is more of an extended stay hotel for the rich and famous than a traditional hotel. The six-story hotel is across from the Uptown Park shopping center. It has 130 residences, and includes a business center, exercise room, dining area and poolside veranda.


Spacehab's Astrotech Space Operations unit has received a $9.5 million contract from NASA to provide payload processing services at Kennedy Space Center in Florida. That could include observation telescopes and satellites such as the Gamma-ray Large Area Space Telescope and the solar Dynamics Laboratory. Astrotech provides services to process spaceflight hardware for launch, including advance planning, spacecraft checkout and fueling.


The Senate has approved the final version of the 2007 Department of Defense Appropriations bill that includes $5.95 million for projects in the Houston area. Senator Kay Bailey Hutchison says the funding will support initiatives critical to aerospace research and national security. It provides $4.55 million to Stewart & Stevenson to build the FMTV A2 tactical truck. Another $1.4 million will allow for the transformation of the SPRING nanotechnology consortium into a new group focused on aerospace applications of nanotechnology.


The Woodlands-based Lexicon Genetics has won a grant from the U.S. Defense Advanced Research Projects Agency to identify potential drug targets related to sleep deprivation. The biopharmaceutical company will look at potential drugs that could enhance restorative benefits that come from sleep, as well as offset problems associated with sleep deprivation.


By one measure, the government says consumers trimmed their spending in August by the largest amount in nearly a year. The Commerce Department says consumer spending, after adjusting for inflation, dropped one-tenth of one percent last month. That's the first decline since September 2005, when activity was wrecked by Hurricane Katrina. Leaving the inflation adjustment aside, spending rose one-tenth, which was weaker-than-expected. Incomes were up three-tenths of one percent in August. Core inflation, which excludes food and energy, surged two and a-half percent from year-ago levels. That's the biggest year-over-year increase in more than a decade. Consumers have seen a considerable pullback in gasoline prices over the past month.


There's word that consumers were feeling a little more upbeat about the economy during September. Those who have seen it say the University of Michigan's end of the month report on consumer sentiment for September rose to 85.4 from 82 last month. That's pretty much in line with economists' forecasts of a reading of 85.5. At the same time, though, the reading on the current conditions index for September is said to have dropped to 96.6 from 103.8. And consumers' expectation of inflation a year from now dropped from a rate of 3.8 percent--to 3.1 percent. The University of Michigan report is released only to subscribers.


A key gauge of Chicago-area business activity has hit its highest level of the year. The National Association of Purchasing Management Chicago Index rose to 62.1 this month from 57.1 in August. That came as something of a surprise to Wall Street, which was projecting a decline--to 55.1. A reading above 50 indicates expansion in the manufacturing sector, while anything below that suggests a contraction. The Chicago survey is watched closely for clues to the index of the Institute for Supply Management, which comes out Monday.


New Mexico's Environment Department has accused El Paso Electric of violating air quality regulations at its power plant in Dona Ana County. A compliance order issued by the department cites about 650 alleged violations. They involve sulfur dioxide, nitrogen oxides and carbon monoxide emissions at the Rio Grande Power Plant during the past five years. El Paso Electric spokeswoman Teresa Souza says the company has yet to receive the order. State inspectors visited the plant last September and obtained copies of records documenting emission rates at the plant. After reviewing the documents, the state discovered the violations. The state claims the company failed to comply with the self-reporting requirements. The compliance order proposes that the company pay a civil penalty of up to $15,000 a day for each violation. El Paso Electric can request a hearing with the Environment Department and enter into settlement discussions.


Two Austin apartment complexes will be retrofitted to make them more accessible for people with disabilities. It's part of a settlement to a discrimination lawsuit the U.S. Justice Department filed against 10 companies involved in the design and construction of the facilities. The federal government says that the settlement requires court approval. The companies have to rework the parking areas, walkways, the interior of ground-floor units and common areas at the St. John's Village and Hunting Meadows Apartments. They also will pay $10,000 in civil penalties to the government. A lawsuit against the developers, builders, architects and engineers alleged the dwellings didn't include features that make them more accessible to people with physical disabilities. The companies are Legend Communities, which does business as SDS Austin Communities; Randall Jones Engineering; Alexander Consulting Engineers, which does business as Professional Design Group; Trugreen Landcare, which does business as Land Design Studio; Hatch Partnership Architects; Danze & Davis Architects; St. John's Housing Partnership; SMDC Development; Decker Lane Partners and SDCW Development.


A Texas businessman is donating $3 million to create an engineering endowment in Mississippi. The funding will allow Jackson State University engineering graduates to seek advance degrees at Mississippi State University. Dave Swalm is founder of Houston-based Texas Olefins. The company makes petrochemicals. Swalm is a 1955 chemical engineering graduate of Mississippi State.


The state's famous anti-litter slogan "Don't Mess With Texas" has won the third annual Advertising Week Walk of Fame competition in New York City. The 20-year-old public service campaign slogan was created by Austin advertising firm GSD&M for the Texas Department of Public Safety. The slogan beat out Nike's "Just Do It," Maxwell House's "Good to the Last Drop," and "Got Milk?" from the California Milk Processors Board.


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