PhillyDeals: Lawsuits still hang over new Family Court

Site prep has started for the $140 million Family Court building that general contractor

Daniel J. Keating

has agreed to build for the state at 15th and Arch Streets in Center City.

But a pair of lawsuits questioning the way the state hired a contractor to handle more than $20 million of electrical work on the courthouse are still thrashing through state courts.

Gordon Group Electric, a Feasterville contractor, says it made the low bid for the job but was bypassed in favor of Farfield Co., based in Lancaster County. State records show Farfield got more points for promising to meet green-building environmental guidelines. But Gordon says those requirements weren't part of the state's bid request, so the process was unfair.

Lawyers for Electrical Workers' Local 98 are also challenging Farfield's selection. Farfield has done big jobs for SEPTA, state colleges, prisons, and high schools. But the union has compiled a list of the firm's past safety and wage-law violations, which should have prevented the state from using the firm to build the Family Court, union lawyer Pat Bianculli told me.

Spokesman Frank Keel says the union is trying to get the state to explain why it hired Farfield. State spokesman Troy Thompson said work was proceeding on schedule and there was no pending litigation that would stop it. Farfield officials referred my questions to firm president Dennis Pierce, who didn't call back.

State campaign-finance records show Pierce and other Farfield officials gave $2,100 to the campaign of State Rep. John Bear (R., Lancaster) in 2010. "I know nothing about" the Family Court project, Bear told me. "I know the Farfield company; they're a big employer in my district."

Bear knows Farfield as an "open-shop" contractor that competes with union contractors such as Gordon. "The fight, open-shop vs. union, gets pretty heated sometimes," said Bear, a Temple and Penn graduate who's vice chairman of the House Labor Committee.

"I don't like sweetheart deals for unions. So they don't like me," added Bear. "But everyone's desperate for work right now."

Shopping malls shaped the suburbs. How long until builders start making more?

Andrew DiZio, analyst at Janney Capital Markets, asked that question at the International Council of Shopping Centers conference in Las Vegas last week, and he got "answers ranging from 2012, to 2015, to never."

He's going with "at least the next few years."

Shoppers are still holding back, and store rents are still dropping. Store chains are turning to less-costly online sales, as more Americans use their iPhones and Androids to buy. When store owners do pick new space, everyone from Wal-Mart to Krispy Kreme's new Philadelphia franchise - run by cousins Brian Zaslow and Keith Morgan - is picking smaller, more urban locations instead of building big on new ground.

Didn't last week's sale of half of the King of Prussia mall to a Morgan Stanley fund for $545 million, plus debt, juice mall investors?

High-end malls were already fetching good prices, but that won't help less desirable locations, DiZio says. "Just because K of P recovered its value does not mean that Exton Square is worth as much as it used to be," he said.

Unicom

, China's No. 2 mobile-phone service, has "started offering a 66-yuan-a-month [$10] plan for the iPhone, after previously setting the lowest-priced package at 96 yuan," Bloomberg reported. Rival

China Mobile

plans its own rate cuts.

How come mobile service - and cable TV - cost so much less in China than here?

"The economics is different," Jonathan Kalman, managing director at Jaguar Capital Partners, a Conshohocken-based investor in Chinese and other telecom companies, told me.

"In China you'll see a beautiful flat-panel TV, which would cost a grand here, and it's just $100. I found there were 70 vendors making flat-panel displays in China. Not like here. So there's an order-of-magnitude difference in price.

"The iPhone we buy for $300, they buy for $30."

Why don't savvy traders buy cheap Chinese electronics and ship them here? Trade barriers, and local demand: "Hunan Province has 100 million people," Kalman explained. "It's a big market, and there's no shipping and delivery expenses" for factories there. A new wave of low-cost exports will have to wait until China is saturated.

Why does China's cable TV cost just a few dollars a month? "Government is underwriting" state-of-the-art communications lines, with no-interest loans, Kalman says. By contrast, we pay Comcast for upgrades.

With government easing installation costs, firms such as China Cablecom spend just "$35,000 to acquire 600,000 new customers," he added, citing a recent project by China Telecom.

China's cable "monopolies" are cutting telecom prices instead of boosting them as more Chinese join the middle class, Kalman concluded: "If you raised prices there, people would revolt."