Business news in brief

NYC's Subway Inn to shut after 77 years

Subway Inn, the New York City institution that clung to its dive-bar roots even as its Upper East Side neighborhood sprouted steel-and-glass office and apartment towers, is serving its last drink.

The bar, which opened in 1937, will close Aug. 15 and seek another location, according to a notice on its Facebook page. A bartender, who would give his name only as Steven S. and said he was the son of the owner, confirmed that the building's landlord had given notice. A spokesman for World-Wide Group, the building's owner, declined to comment.

"This place is New York," said Alex Kalich, 32, as he sat at the bar Thursday sipping a vodka and soda. "This is what New York used to be like. It's a place with a soul."

The bar is the latest casualty of rising rents and competition for space to build housing and offices in Midtown. Rodeo Bar, the Murray Hill honky-tonk, said this month that it will close this weekend after 27 years in business.

Across from Bloomingdale's at 60th Street and Lexington Avenue, and adjacent to a subway entrance, Subway Inn's neon sign has beckoned patrons daily from its 10 a.m. opening time. Inside, a photograph of Marilyn Monroe recalls the legend that it was among her neighborhood haunts while filming the 1955 film The Seven-Year Itch.

-- Bloomberg News

Fox to sell European pay-TV holdings

Rupert Murdoch's 21st Century Fox Inc. agreed Friday to sell its pay-TV businesses in Italy and Germany for more than $9 billion, gaining funds it could use to raise an $80 billion takeover bid for Time Warner Inc.

British Sky Broadcasting Group PLC, which is 39 percent owned by Fox, will pay $4.9 billion in cash for Fox's 57.4 percent stake in Sky Deutschland AG, Isleworth, England-based BSkyB said Friday. BSkyB will use $3.5 billion in cash and a stake in National Geographic Channel to pay for 100 percent of Sky Italia.

The deal will give Murdoch ammunition as the 83-year-old weighs how much he can increase an $85-a-share bid for Time Warner without jeopardizing New York-based Fox's investment-grade credit rating. BSkyB gains leverage, becoming a European satellite and cable service with 20 million subscribers, as it negotiates for rights to sports and entertainment.

Bloomberg News first reported BSkyB's talks with Fox on May 9 and on July 20 said that Murdoch was considering using proceeds from the asset sales to increase his offer for Time Warner, owner of CNN, HBO and the Warner Bros. studios.

-- Bloomberg News

Public spending sours building forecast

Spending on nonresidential construction in the U.S. will be less than initially projected as state and local governments scale back investments in such properties as schools and health care buildings, the American Institute of Architects said Friday.

Total spending on commercial and institutional development probably will increase 4.9 percent this year, down from an earlier estimate of 5.8 percent, according to a semi-annual survey by the Washington-based group.

A slowdown in funding for institutional projects, which include education, health care, religious and public-safety facilities, has been a drag on the recovery of the wider industry, according to Kermit Baker, the AIA's chief economist. The group expects institutional-construction spending to fall 0.1 percent this year, compared with January's projection for an increase of 3.4 percent, Baker said.

While growth in institutional construction tends to lag behind commercial building, "it has been even more delayed than previously expected because of fiscal problems on the local and state level and some uncertainties, such as around the new affordable health care act," Baker said. "There isn't a lot of appetite to build new facilities."

-- Bloomberg News

Hotel owner asks to work from prison

Subrata Roy, the jailed owner of the Sahara India Pariwar financial-services group, sought court permission to use his Indian prison's guest house to negotiate the sale of overseas hotels as he seeks to pay his $1.66 billion bail.

Roy, 66, who has been in court-ordered custody since March, is seeking secretarial assistance, phone, video conferencing and other facilities to negotiate deals to sell stakes in the Plaza and Dreams Downtown hotels in New York and the Grosvenor House in London, according to a court filing Thursday.

"We should provide facilities to Roy to arrange money for bail," Judge T S Thakur said at a hearing on the request Friday. "It isn't a small amount. We can't keep him in jail and ask him to pay money. International buyers would be interested in these assets," Thakur said.

The judge asked the government to reply to Roy's request by Friday, indicating what facilities it is willing to provide. Roy was earlier denied a 50-day bail plea to negotiate the sale of the hotels.

Sahara, which means "support" in Hindi, owns overseas hotel properties and at least 120 companies, including television stations, a hospital, a dairy farm, retail shops selling products from detergents to diamonds and a stake in India's only Formula One racing team.

-- Bloomberg News

U.S. suits dismissed against Chiquita

Chiquita Brands International Inc., the banana label owner that in 2007 pleaded guilty to making payments to Colombian paramilitary groups, won dismissal Thursday of U.S. lawsuits filed by thousands of Colombians who claim they or their relatives were tortured or killed by the militias.

A federal appeals court in Atlanta overturned a lower court ruling and threw out several consolidated cases, saying in a 2-1 decision that claims accusing Chiquita of liability for the violence don't fall within U.S. court jurisdiction.

"The torture, if the allegations are taken as true, occurred outside the territorial jurisdiction of the United States," the majority wrote. "Noble goals cannot expand the jurisdiction of the court."

The Cincinnati-based company was fined $25 million by the U.S. after pleading guilty in March 2007 to engaging in transactions with terrorists by paying Colombian militias $1.7 million from 1997 to 2004. No executives were charged under the deal, which was reached when Chiquita was represented by then-Covington & Burling LLP lawyer Eric Holder, now the U.S. attorney general.

-- Bloomberg News

Business on 07/26/2014

Upcoming Events