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Gold/Mining/Energy : Enron - Natural Gas Industry -- Ignore unavailable to you. Want to Upgrade?

To: ms.smartest.person who wrote (962)	11/29/2001 11:57:32 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 1433

WSJ/Major Business News: Enron CEO Was Generous to Houston; Now City Feels the Pain of Firm's Swoon November 30, 2001 By GARY MCWILLIAMS Staff Reporter of THE WALL STREET JOURNAL HOUSTON -- The spectacular fall of Enron Corp. has sent ripples across the nation's energy industry, but nowhere is its fallout as worrisome as it is in this city's boardrooms, political offices and kitchens. While just one of a dozen major energy corporations with headquarters here, Enron and its Chief Executive Officer Kenneth L. Lay have had a far greater impact on the city than the company's size would indicate. While the accounting woes that led to the company's downfall have raised plenty of questions about his business leadership, Mr. Lay's civic role is still widely respected in his hometown. Using his financial and political clout, Mr. Lay put a permanent mark on economic development, cultural activities and politics in this city of four million. And Enron's early move into trading gas and electricity helped make this one-time oil town the hub of a new industry of high-tech energy trading, pulling in companies and employees from around the world. Last month, for example, German utility company RWE AG chose Houston for its North American trading center, following El Paso Corp. and Calpine Energy Corp. in setting up operations here. "Critical mass has been established here -- minus one big player," said Stephen D. Newton, managing director of recruiters Russell Reynolds Associates Inc. Economically, the job cuts expected from Enron's financial woes will put more unemployed into a job market already strained by layoffs at Compaq Computer Corp. and Continental Airlines. Real-estate brokers say Enron's woes also will quickly turn what had been a strong market for office space into a glut. Enron is building a new, $200 million office tower in Houston's downtown, a building that is expected to add 1.2 million square feet of space into a slowing market. L. Michael Wallace, a vice president at commercial-real-estate broker Colliers International, estimates the city's office vacancy rate, now a trim 5%, could grow to 14% when the proposed projects are finished. With several other large buildings under construction, Houston's real-estate picture could sour quickly. "We're already seeing some tenants move from Class A to Class B space due to uncertainty in their businesses," Mr. Wallace said. On Wednesday, developers pulled the plug on a planned office, housing and retail complex that was to be built on the periphery of Houston's commercial district. Houston's downtown, once a nightly ghost town after businesses closed, has lately experienced a renaissance with the completion of the city's new ballpark, Enron Field. Mr. Lay helped organize local corporate chiefs to support the location of the ballpark in a dilapidated section of the downtown area. The group pledged an interest-free loan that got the park under way, said County Judge Robert A. Eckels. "Enron became a global player, yet remained committed to the local community," said Judge Eckels, Harris County's chief executive. Mr. Lay "provided the leadership." Mr. Lay, while known nationally for his advocacy of electricity deregulation and financial support for Republican Party candidates and causes, has long been involved in backing candidates for state government, both Republicans and Democrats. "For the head of a major corporation, he took a personal interest in a lot of local political campaigns that you don't often see in the corporate community," said Judge Eckels. "Ken Lay shared his largess and the world-wide personality with Houston," said U.S. Rep. Sheila Jackson-Lee. "Enron encouraged its employees to take up causes they believe in and carry the company with them," the Democrat who represents Houston said. Mr. Lay and Enron also have been large contributors to the city's charities. Last year, the company provided 50 college scholarships to local high school students. After a flood devastated parts of Houston in June, Enron organized a program with local businesses and the United Way to provide assistance to city residents. "If anything happens to them, it's going to be a major loss to this community," said Jacqueline S. Martin, president of the United Way of the Texas Gulf Coast. Write to Gary McWilliams at gary.mcwilliams@wsj.com1 -------------------------------------------------------------------------------- URL for this Article: interactive.wsj.com Hyperlinks in this Article: (1) mailto:gary.mcwilliams@wsj.com -------------------------------------------------------------------------------- Copyright © 2001 Dow Jones & Company, Inc. All Rights Reserved. Printing, distribution, and use of this material is governed by your Subscription Agreement and copyright laws. For information about subscribing, go to wsj.com Used with permission of wsj.com