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These articles by Barbara Fox were prepared for the May 5, 2004
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Life in the Fast Lane
David Crane has been on the front lines of energy management during all the tumultuous times of deregulation. A 1981 Princeton University graduate, he has also has owned a home in the Princeton area for a dozen years – Orchard Hill, an early 19th century manor house – and now that he is the new CEO of a 240-person firm in Minneapolis, he is moving that company to Princeton.
Though a lease has not been signed as of press time, NRG Energy is reportedly going to move into 211 Carnegie Center, the space vacated when CUH2A moved to Lenox Drive. The space was listed last fall at about 47,000 square feet, and the target date for the move is this September. A spokesperson for NRG says that there is no final estimate of how many employees will move to Princeton, but earlier estimates suggested that of the 240 workers, 140 might be making the move. NRG is eligible for the state’s worker training program and could receive Business Employment Incentive grants that would amount to as much as $7.5 million over 10 years from the New Jersey Economic Development Authority.
For the previous five years Crane had worked at a deregulated energy firm based in the United Kingdom, most recently as CEO. But last fall he was lured away to rescue NRG Energy, and moving it to Princeton was among his early decisions.
After graduating from Princeton’s Woodrow Wilson School, Crane earned his law degree from Harvard and worked for the international law firm of White & Case. Though Crane was not available for an interview about his career, at one point he was reportedly working for ABB Energy Ventures, which has an outpost at the Carnegie Center, and when he left he was vice president for the Asia-Pacific region.
From 1996 to 1998 Crane was a senior vice president at Lehman Brothers, responsible for the power industry. There he helped to launch International Power, formed from the demerger of the United Kingdom’s National Power. He was chief operating officer at International Power in 1998, was promoted to chief executive officer, and is credited with rescuing Europe’s largest coal-fired power station, Drax. National Power had sold Drax to an American firm, and Crane successfully fended off other suitors to buy it back. He promised that it would remain independent.
When Crane left International Power to take over as president and CEO of NRG Energy, NRG was being sued by the state of California and was emerging from Chapter 11 bankruptcy. NRG has power generating facilities, including cogeneration, thermal energy production, and energy resource recovery. NRG’s board chairman cited Crane’s "extensive experience in the energy industry and strategic viewpoint" as making him "the ideal leader to build on NRG’s strengths."
London analyst Sally Patten of the Times attributed Crane’s defection from London to a better pay package. "The scale of the package says much of Mr. Crane’s abilities – indeed he is highly rated in the City." She decried the popular opposition to high executive salaries and warned that more talent would leave the United Kingdom "should anti-fat cat protests force senior domestic salaries down." Said Patten: "Britain, for the sake of all our salaries, cannot afford to lose its corporate talent."
Founded in 1989, originally as a subsidiary of Xcel Energy, NRG is a wholesale electricity provider. In just over 10 years it built or bought more than 50 power plants that sold electricity on a long term or short-term basis. The majority of its power plants, mostly fossil-fueled, are in North America, but it does have projects on the other four continents. In addition to electricity, it also sells natural gas and oil, and it has alternative energy projects.
NRG got into financial difficulty in California with its joint venture with a Houston-based firm, Dynegy. NRG supplied the power and Dynegy was in charge of the marketing. That was at a time when California led the nation in deregulating its utilities, but the market was not ready for deregulation, and the state suffered through rolling blackouts. Power was being generated by too few companies, says the Princeton-based representative of another global energy company who did not want to be identified. "Prices went up and the consumer was left holding the bag."
Calling the West Coast Power joint venture "one of the most rapacious pirates of the energy crisis," California’s attorney general, Bill Lockyer, filed for monetary relief for ratepayers. Meanwhile NRG filed for voluntary Chapter 11 bankruptcy in May 2003, listing $10.9 billion in assets and liabilities of $11.6 billion.
A bankruptcy reorganization plan was announced in December, 2003. NRG will return $3.3 billion to creditors who are owed about $6.4 billion, and the parent company, Xcel Energy, will pay NRG $640 million in cash. Creditors will receive a combination of cash, common stock, and newly issued corporate notes.
"We are pleased to be the first in the industry to complete a comprehensive financial restructuring and deleveraging of the debt on our balance sheet," said Crane in a release announcing the plan. Under this plan, NRG moved out from the Xcel umbrella to be a separate company.
Then last week California announced it had settled the case with West Coast Power for $280 million. Slightly more than half will go to the state’s three utility companies to compensate for the high prices they paid, and the rest to the state, which bought power when the utilities ran out of cash.
Crane has said his decision to move NRG to New Jersey is based partly on the change in the energy market. He wants to be closer to the regulators and closer to the company’s properties, now that the company is not trying to expand to the west. "Power generation is fundamentally a local business and, for NRG, the northeast has our greatest concentration of plants and employees as well as external stakeholders such as regulators, customers, and investors," said Crane in a statement.
"While the decision to relocate our headquarters was not easy, it is the right move for the long-term success of this company," said Crane. "We conducted a lengthy and thorough search of five states in the Northeast region and ultimately determined that New Jersey’s top-notch transportation system, central location in the East, excellent education system, and competitive business incentive programs made it our preferred choice for NRG’s new home."
Crane and his wife and their two school-aged sons are pictured in a New York Stock Exchange web page photo of them ringing the bell to open the exchange and celebrating the March 25 move of NRG’s stock from the over the counter bulletin board to the New York Stock Exchange.
"Our listing on the NYSE is an important step in our plan to build investor recognition of NRG and enhance value and convenience for our shareholders," said Crane in a press release.
After spending most of his time over the past 10 years in airports, Crane can spend more time at his four-acre Lawrenceville Road property. In 1992 it listed for just under $600,000, and according to tax records it has been improved. It came with five bedrooms, four baths, a tennis court, a greenhouse – and no less than five fireplaces. There can be no more appropriate source of "alternative energy" for an energy czar than five wood burning fireplaces.
Just as one big bank (Fleet) is about to be consumed by an even bigger institution (Bank of America), a community bank – not a small one but one of the bigger ones – is moving into Mercer County to compete with thrift banks such as Roma Bank and First Washington State Bank.
"We are one of the larger thrifts, and we are on a growth pattern," says Michael Lee, senior vice president of retail banking at Hudson City Savings Bank, an $18 billion bank that by next week will have 84 offices. "We are looking for communities that appreciate a community-minded thrift."
Annmarie Olsen is branch manager of the newest branch on Route 130 in East Windsor, and Pamela Gillins will be in charge of the branch set to open on May 15 on Route 1 South at the Shops of Windsor Green. Both are in storefronts, and between them they will have 16 employees. Benjamin Talcott manages the Applegarth Road branch in Monroe.
Based in Paramus, Hudson City had formed a mutual holding company and sold a minority share to the bank’s depositors. A favorite bank in this area, Trenton Savings Bank, had done the same thing in 1995 to form Peoples Bancorp. But unlike TSB/Peoples, Hudson City has not taken the second step – to go completely public. When TSB did that in 1998, it was bought out by Sovereign Bancorp.
In contrast, Hudson City intends to remain small – but big. "We are in the 40s as far as the size of banks in this country," says Lee, "but we run each of our branches as a community bank."
Mark Haas & Associates of Mt. Arlington has designed the storefronts with a "contemporary retail feel," as Lee describes it. Instead of a drive-by teller, the storefronts will have an after hours service using a two-way video, a hand held telephone, and a pneumatic tube system.
Each branch has an Internet banking station, with the online billpaying offered by Metavante, the parent company to Paytrust, the online bill presenting service that began in Princeton.
"We compete well and hard, and we think we have some innovative products on the mortgage rate side and the deposit side," says Lee. He points to a 2.15 percent checking account, which he says pays 1.5 percent more than a money market account and offers free online bill paying and wire transfers, plus no charge per check. "And we are a wonderful mortgage lender."
The bank was founded after the Civil War, in 1868. Robert J. Rendall presided over the bank for 32 years, from 1918 to 1950, even managing to keep it open during the Great Depression. Ronald E. Hermance Jr. is only the 11th person to be bank president.
Net income grew by more than half over the first quarter of last year, says James Hyman, CEO of Hopewell Valley Community Bank, who expects an even bigger gain when the County Line branch opens at Routes 518 and 31.
Total deposits increased 34 percent over the March, 2003, mark, and loans increased by a comparable amount. The full service, FDIC insured commercial bank was founded in 1998 and has three branches in Mercer County.
For the approximate cost of a scheduled flight from Newark to Nantucket, island visitors can hop a seven-seat plane from Trenton-Robbinsville airport and start their weekend faster and more easily. Rob Iverson, owner of the Private Flight Group, has partnered with David Buck to offer a service they call Summer Island Shuttle, an on-demand charter service to Martha’s Vineyard, Nantucket, and Block Island.
Rob Iverson has aviation in his genes. His father, a former commercial pilot, founded Kiwi Airlines, which survived for six years starting in 1993 before it foundered for lack of follow-on financing, and then he started a charter airline, Sky Trek International. Iverson went to the University of New Hampshire and Rutgers, graduating in 1989, and then went to Officers’ Candidate School to be a United States Air Force Pilot, flying C-141s at the end of the Gulf War. He flew for Kiwi, helped Sky Trek get certified with the FAA and the DOT, and wound up as vice president of marketing and operations.
Iverson started his own brokerage firm, the Private Flight Group, in 1999, to arrange air charters for individuals, groups, and corporations. He and his recent business partner, Buck, act as buyers’ agents, aircraft acquisition consultants for previously owned planes, and currently they are arranging the sale of a Pilatus PC 12 to a major corporation.
David A. Buck made a mid-career switch, going from event planning to charter aircraft. A graduate of the Culinary Institute of America in Hyde Park New York, he worked for a noted caterer, Glorious Food, in New York City, and spent 15 years with Michael Young’s Meeting Planning International. Meanwhile his wife, Hanna Buck, was working with her mother, Helene Reynolds, the educational consultant on Nassau Street. When Reynolds died, Hanna Buck stayed with her mother’s business and David Buck stayed home with three children, now ranging in age from 3 to 16.
"What started as a hobby, taking flying lessons, is now a new business for me," says David Buck. "My daughter goes to boarding school on Cape Cod, a treacherous eight-hour drive. I met Rob Iverson. He hired me to do business development for the Private Flight Group. Iverson mentioned that he had a plane I could charter. I invested money and own 50 percent of Summer Island Shuttle."
"We have contracted with two operators that own twin engine piston aircraft for shared charters," says Buck. From Thursday to Monday, the one-way tickets range from $300 to $390, with the average seat going for $319. Comparable scheduled service, on Continental from Newark, is $780 roundtrip, but this service involves lots of waiting around. "Arrive 15 minutes before departure and I will have you there, probably with 2 1/2 to 3 hours difference in flying time," says Bucks. Going by land and sea (the ferry boat) is a day’s proposition for any of the islands.
"We start flying Memorial Day weekend," says Bucks. "We don’t have a schedule, we have proposed schedules." Nonstop flights are not a promise. A plane could make as many as two stops, hopping from island to island.
Joe and Valerie Budelis closed their similar service, Rainbow Air, in 1995, Buck admits. One difference is that he and Iverson are brokering the services of the aircraft, not piloting them.
Ronson Aviation announced it will build an addition to its 52,000 square foot hangar and office building at Trenton-Mercer Airport. The 40-person firm has facilities for corporate jets and private cargo planes, and the new hangar is for Gulfstream V aircraft. Constructed of metal, it will have radiant heat, shower facilities, and private parking, but approvals have yet to be obtained.
Thomas Guy Jadico, general manager, says that the company expects to break ground in 2005 and open the new facility in the second half of 2005. Jadico speaks at the Princeton Chamber’s breakfast meeting on Tuesday, May 18, at the Nassau Club. Call 609-924-1776.
The Somerset-based conglomerate, which also makes lighters and lighter fuel, has been at this airport for about 40 years and has become a popular home airport for corporate jets.
Two of the world’s largest pharmaceutical companies – Pfizer and Merck – have built hangars of their own at the airport, which lies right next to I-95 in Ewing. Pfizer’s hangar measures 90,000 square feet. Merck’s hangar, which has been expanded once since it first opened four years ago, now adds 40,000 square feet to the mix.
Meanwhile Corporate Aviation Hangars is erecting the airplane equivalent of townhouse condos – small hangars that will be for sale. Owners will pay a condo fee for snow removal and other services.
There is good karma in this building," says Kristin Appelget, CEO of the Princeton Chamber. On Friday, April 30, the chamber moved from its second floor office at Princeton Forrestal Village to the Vandeventer Avenue building it has purchased in downtown Princeton.
"When we first looked at this property," says Appelget, "there was a Princeton chamber membership sticker on the window. The owner of the building, as it turns out, had been a founding member of the chamber in 1959.
Appelget and four staff members occupy 1,350 square feet on the first floor, a smaller area than their previous 2,000 feet, but better organized, she says. The reception area, with space for one or two desks, can accommodate walk-in visitors. The new office does not change what the chamber offers in networking functions and business to business referrals, but now it is a more convenient conduit to the historical and cultural community, says Appelget.
Other advantages are the six parking spaces that come with this property, and that DSL is available here.
The building had been owned by a dentist, Richard McClelland, who retired and sold his practice to James Vito DDS. Vito took over the practice in 1990 and expanded to Main Street in Lawrence last September.
The chamber paid just over $800,000 for the building, which includes apartments on the second and third floor. Aubrey Haines of Mercer Oak Realty represented the chamber on a pro bono basis, and Tim Norris of Callaway Commercial represented the owner. Yardville Bank holds the mortgage. "Lots of banks were interested in bidding; it was a competitive process," says Appelget.
"When you start to look at market in downtown Princeton, it is a very tight market," she says. "Because we own this building, we can make improvements in the property and the technology – it is an investment in the future."
Frank Strasz has opened a second firm, Best Tech Help, sharing space and a fax machine with Strasz Computer Consulting at Montgomery Commons.
"With Best Tech Help we’re providing IT class technical support to small businesses that cannot afford to have a network engineer on staff," says Strasz (rhymes with as). "It is a good opportunity to go after the businesses with from 5 to 50 people, businesses that have been relying on someone in the office who happens to have technical expertise, or a college student. As the business grows they are ready to turn to more professional support."
In addition to selling computers (as a value added reseller of such brands as Dell, IBM, and HP/Compaq) Best Tech Help will do networking and security analysis. "If a firm is moving locations, or has three-year-old equipment and needs new machines, we will look at how they are using their equipment, offer a network solution, acquire it, install it, and get them up to speed on how to use that," says Strasz.
Strasz Computer Consulting, in contrast, is developing large complex applications for much larger organizations. For example, one of its clients is the American Institute of Certified Public Accountants.
A graduate of Rutgers College of Engineering, Class of 1990, Strasz worked for Educational Testing Service and Virginia-based Cysive in programming, project management, and software architecture. He started the business in 1995 with his wife Jackie, a 1988 graduate of Rutgers Douglass College. Most recently she worked for EDS in project management testing. They have a preschool son. Jeff McGregor is Strasz’s business partner, and Joe Nocella and Carey Heck do sales and technical liaison.
A children’s furniture and accessories company, PJ Kids, moved from 2,500 square feet on Alexander Street to 5,000 feet at Princeton Service Center last year. It grew from 10 to 16 people at this location. Founded in 1995, it imports its wares from the Far East and has accounts at both big stores, like JC Penney, and boutique shops.
Steven Silverman, a 19-year veteran of Merrill Lynch, has opened a 10-person investment management firm at 5 Vaughn Drive, where he manages a global hedge fund. A New Jersey native, he graduated from Case Western Reserve in 1978 and has an MBA from the University of Chicago. Silverman and many of his compatriots had worked at Merrill Lynch’s Scudders Mill Road campus.
Last year Frank Lu founded a fiber optic business and now he hopes to expand by taking on one or more partners. Lu aims to import low cost technology products from China, products such as various fiber optics, optical transceivers, Ethernet fiber converters, fiber Ethernet switches, and fiber optical equipments.
A native of Shanghai, Lu graduated in 1982 from Fudan University in Shanghai. Two years later he came to the United States and earned his master’s and doctoral degrees from Polytechnic University in New York. He and his wife have two school-aged daughters.
Lu has experience in customer service/support and semiconductor device processing and R&D. Most recently he worked at JDS Uniphase, which has downsized in Ewing. He also worked in the semiconductor industry and optical fiber industries for Rudolph Technologies and CFM Technologies.
After a couple of days of trading, Barrier Therapeutics new stock is selling for $14 to $15. The stock opened at $15.52. The initial public offering amounted to 5 million shares, sold for $75 million for a net amount of $69.7 million. Earlier funding, $46 million, was from JP Morgan Partners and TL Ventures. CFO Anne Van Lent declined comment during the quiet period following the IPO.
Barrier’s therapies were all developed from companies owned by Johnson and Johnson, which owns more than 25 percent of Barrier. The therapies include diaper rash cream Zimycan, antifungal topical gel Sebazole for seborrheic dermatitis, and Rambazole, a pill or gel for psoriasis, acne, or other skin conditions.
Biomira’s Phase IIb trial of a liposomal vaccine for non-small cell lung cancer had promising news – that it extended the life of patients with non-small cell lung cancer by 4.4 months. Biomira collaborated with Merck KGaA on this study and says it hopes to follow up this study with a multinational Phase III registration trial.
"All the science is done in Canada, and here we are contracting the manufacturing," says Bill Riley, one of three Biomira employees working in the United States. A company press release says that Biomira is going to "incorporate manufacturing changes intended to secure the future commercial supply of the vaccine."
"Now we are on a normal track," says Riley, referring to the company’s past problems. Formerly known as Oncotherapeutics, it was founded in 1988 to do research and development of immunotherapy products for treating cancer. In 1995 Oncotherapeutics was sold to Biomira, a firm in Canada. The Hillier company designed its purpose-built lab space on Eastpark Boulevard,
Then discouraging news came from a Phase III double blinded study for a promising drug that might have qualified for early filing with the Food and Drug Administration. Research operations in the United States were closed, the Eastpark Boulevard space was closed, and, all told, 110 people lost their jobs. The three remaining employees operate from an office in Cranbury.
Among those who have worked at OncoTherapeutics/Biomira are two Liposome alumni, Mircea Popescue and Frank Pilkiewicz (now with Transave Technologies), and Gordon Ramseier, now an analyst with the Sage Group.
Biomira and Merck KGaA are also working on a vaccine to treat of metastatic breast cancer.
Aesgen is preparing to launch Saforis, a treatment for chemotherapy-induced mucositis. Saforis is in Phase III clinical trials and has been given a fast-track designation by the FDA. Interlink Healthcare Communications has the contract to support the prelaunch and launch efforts of Saforis – advertising, promotion, and medical education.
About 40 percent of those receiving cancer chemotherapy suffer from oral mucositis, inflammation of the tissues of the mouth and throat, and this condition can disrupt on-time, on-dose regimens.
Princeton Softech is a new software partner with Siebel Systems Inc., which has software to sell and market to customers across multiple channels and lines of business.
"Creating an integrated solution to the leading CRM application will enable Princeton Softech to directly address the entire spectrum of application archiving needs," says Geoff Hogan, executive vice president of alliances and corporate development, Princeton Softech.
Princeton Softech’s database archiving solutions move infrequently accessed data from application databases to low cost storage media and help companies manage and store structured data cost-effectively.
Also in April the company released its Archive for Servers, which supports information lifecycle management strategies. This archive works with Veritas Data Lifecycle Manager and Network Appliance’s unified storage systems and NearStore systems."
Multi Soft has moved out of Ibis Plaza at 3535 Quakerbridge Road and now maintains a mailbox address. Charles Lombardo, CEO of the 19-year-old firm, reports that one person is working in Pennsylvania and two in New Jersey. Multi Soft does cooperative processing software and communications tools for client-server applications – legacy to web conversion, and it has a sister firm, Multi Solutions.
Zehra Ahson has taken over as manager at Odyssey International, a clinical trials company that has had a five-person office in Alexander Park for almost exactly one year. Based in North Dakota, with 75 employees nationally, the company works as the middleman between doctors and patients for 100 ongoing therapeutic trials in all areas – oncology, neurology, endocrinology. cardiovascular, and infectious diseases.
Ahson earned her MD at Dow Medical College in Karachi, Pakistan, and then worked in psychiatry research at UMDNJ-Newark. She has worked for this company since it opened in Alexander Park in April 2003.
A key-based access company, marketing a product called Intellikey, is competing in the burgeoning security industry. Adaxco Ltd. moved from Florida to the Carnegie Center, and last year it moved back to Florida and renamed itself after its product name. The former CEO, Martin Schneider, is no longer with the company, which now has five people, according to a spokesperson. Its clients are airports and universities.
After eight years at Princeton Corporate Plaza, Sabinsa is consolidating and moving the R&D lab to Piscataway, where the administrative headquarters is located, says Dr. N, R&D director. With about 25 employees in New Jersey, it also has offices in Utah and India. The company does pharmaceutical research and manufacturing of nutritional and chemical items.
The 50th Brigade, based on Eggerts Crossing Road, left for Guantanamo Bay, Cuba, in support of Operation Enduring Freedom on Saturday, May 1.
James M. Mets, formerly of Uffelman Rodgers Kleinle & Mets, has moved from Jefferson Plaza to Woodbridge, where he opened a new firm. He focuses on labor and employment law, particularly police and fire unions.
The Office Max store at 3321 Route 1 South, opposite Quakerbridge Mall, closed in January. Calls are being taken by the Fairless Hills, Pennsylvania, store. The headquarters is in Ohio (216-471-6900).
Last year Portamedic moved from 2525 Route 130 in Cranbury to East Brunswick. About a dozen employees do medical examinations for insurance companies for this company, a division of Hooper Holmes Inc. in Basking Ridge.
Rayex, a computer consulting and programming firm, maintains a website that shows this street address, but the telephone at this address has been disconnected.
Repeated attempts to reach the owners of State Sales Office Furniture have failed. The Princeton Arms Shopping Center location is not open.
This nano-ceramic materials business has closed down, according to communication received from the owner. Founded in 1999, it offered cutting tools and high pressure systems for structural applications.
Baton Rouge International is now known as CMC Americas Inc. It does software consulting and IT project services.
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