Adelphia's troubles bring anxiety to Coudersport
COUDERSPORT — There's a two-bedroom log home in Potter County that stands as testament to the effect Adelphia Communications' financial troubles are having on this rural community.
Real estate agent Jackie Hartman thought she had sold the home, but the buyer — an Adelphia employee — backed out Tuesday night, saying he didn't want to buy property when he might be relocated.
"I've got a lot of people who say, 'I don't think now is the best time to be buying property,"' Hartman said. "It's just that people don't know what tomorrow will bring."
It has been that way in Coudersport for months, since Adelphia's stock began to fall last March because of concerns about loans made to the company's founder and then-chief executive John Rigas and members of his family. Shareholders have since sued the company, which filed for bankruptcy in June. Rigas was arrested a month later and charged with stealing millions of dollars from the company. He denies the charges.
Last week, Adelphia hired William Schleyer and Ron Cooper, both executives with AT&T Broadband, as its new chief executive and operating officers. But Schleyer has contributed to the locals' uncertainty by suggesting the company might move at least part of its operations from northern Pennsylvania, known as the Northern Tier.
Adelphia's rise from a local cable company to one of the nation's largest cable providers brought unprecedented growth to Coudersport and Potter County.
Throughout much of the 1990s, Adelphia employed about 350 workers in and around Coudersport, according to company figures. That jumped to 456 in 1998, then more than doubled to 960 in 1999, and nearly doubled again, peaking at 1,707 in early 2002.
The influx of new workers led to a sharp rise in home prices, starting in 1998, Hartman said. Existing businesses got a boost and some people, like Kaye Gerhart, owner of Kaye's Hometown Restaurant, opened new businesses based on the expectation that Adelphia's growth would keep the local economy robust.
Instead, many people already have been laid off — Adelphia's local employment has dropped to about 1,500 — and others are worried they might lose their jobs or be transferred.
"The uncertainty has slowed the local economy down overall," Gerhart said. "Business is OK so far, but it's not where it was a year ago."
Although Adelphia's high-tech nature set it apart from many other area industries, Gale Largey, a sociology professor at Mansfield University, said the company's quick rise and subsequent fall fit into a long pattern in the economy.
"The Northern Tier has always seen boom and bust times," Largey said. "Those who stay maintain a pretty even keel. There was the lumber boom, and it faded. The gas wells came and that faded. Some places had coal and now that's not a big industry."
In some ways, Coudersport has a better chance than its predecessors at keeping most of its jobs.
Adelphia has run much of its fiber-optic network through Coudersport, meaning the company will need to keep local workers to maintain that network. Its headquarters and call center area already built and staffed, and it's unlikely the company would find wages or real estate costs lower in a new location.
Moreover, Schleyer and Cooper have said repeatedly that they have not made a decision about relocating, and that even if they did relocate they would take only the top 30 or so executives.
Jimmie Bruzzi, owner of Bruzzi Cleaning, a downtown dry cleaner, said the loss of those top executives would have little effect on the local economy because those executives usually shopped at larger malls in nearby New York.
"The top 30 executives do 90 percent of their business out of town," Bruzzi said. "Come Friday, it's whip, bam, boom, they're gone. They buy gas, and then it's off to Olean or Elmira or Buffalo."
Hartman said the uncertainty has slowed the economy to some degree, but has not brought the widespread disruption that some feared. Home sales are moving more slowly, she said, and prices are down slightly, but they're still higher than they were before the boom.
County Commissioner Peggy Kelsey said people are hoping for the best.
"I don't think the majority of the people have given up hope," Kelsey said. "I honestly believe Adelphia will get out of the situation they are in."