Small Pennsylvania town frets over Adelphia's woes

Coudersport's fate linked to cable firm's, many say

April 14, 2002|By Erika Niedowski | Erika Niedowski,SUN NATIONAL STAFF

COUDERSPORT, Pa. - There's no corporate sign - in fact, there's no sign at all - outside the boxy brown-brick building at 1 N. Main St. in this isolated borough near the New York state border.

There's really no need.

"We all know it's Adelphia," explained Sallie Hershey, who can see the cable giant's three-story headquarters from the front window of her furniture store.

Signs or no, the tie is unmistakable between Adelphia Communications - a Fortune 500 company that is the country's sixth-largest cable operator - and the town of 3,000 that is its improbable home. Everyone here knows someone who works there, if they don't work there themselves (as the mayor does). And plain near everyone knows the man who is largely responsible for the growth of both: John J. Rigas.

Many residents have rallied behind Adelphia's 77-year-old president, chairman and chief operating officer since the company's recent disclosure that it kept off its books $2.3 billion in debt stemming from loans made to one of the Rigas family's private partnerships. The news caused the company's stock - about 30 percent of it controlled by the family - to plummet and prompted the Securities and Exchange Commission to launch an investigation into Adelphia's accounting methods.

As much as $1 billion of the loans was used to acquire shares of now-devalued company stock. To recoup the loss, Adelphia might have to sell some of its cable systems, which serve nearly 6 million subscribers in 32 states, including Maryland. Suddenly, the word "takeover" doesn't seem quite so hypothetical.

The financial difficulties are potentially as crippling to Coudersport - where a quarter nets two hours of parking on Main Street and cell phones work spottily at best - as they are to the company itself. And, for the past few weeks, this town has been on a nervous alert.

But, whether out of faith, denial or some combination of both, the refrain from here is: The company and the town will be just fine. The Rigas family patriarch, people say, has invested too much in Coudersport - financially and otherwise - for there to be any other outcome.

"It's going to all be worked out," said Donnie Snyder Jr., 48, a native of Coudersport who joined Adelphia's housekeeping staff a year ago after working at a local tannery and laying pipeline.

Snyder, whose sister-in-law is one of Rigas' secretaries, isn't worried about losing his job. In fact, everyone in housekeeping signed a card for the company chief last week to show their support for him.

"He looks a little rough right now," Snyder said. "Too much worries."

Rigas is usually omnipresent in Coudersport, eating lunch in cafes and chatting with residents. But since the disclosure, he has kept out of sight. His three sons, who run the day-to-day business - Tim Rigas is on the hot seat as Adelphia's chief financial officer - have declined to comment on the situation.

"In here, the main concern's for Mr. Rigas, how he's holding up under the pressure of the negative media," Kaye Gerhart said during the lunchtime rush at Kaye's Hometown Restaurant, where probably half her business comes from Adelphia employees.

`There's ups and downs'

Gerhart, 46, worked for Adelphia for 10 years before opening the restaurant, and has only good things to say about Rigas. Her stepdaughter, three sisters-in-law and a few nieces work for Adelphia, too, and her father is employed at Wending Creek Farms, another local Rigas business.

She suggests that much of the publicity surrounding Adelphia can be attributed to over-sensitivity in the aftermath of the Enron mess, and she views the company's financial problems as a natural part of any big business.

"There's ups and downs, there's growth, there's changes," she said.

The question is how far-reaching those changes will be, and what they will ultimately mean for Coudersport.

Some people have criticized Rigas for expanding Adelphia - and, by extension, the town - too far and too fast. They don't like the increased traffic, the higher sewer taxes or even the possibility of a third stoplight.

But Gerhart thinks they are missing the point.

"My comment to anybody who has a complaint is, drive 10 miles in any direction and look at the other towns. There's nothing. There's no employment, no business," she said. "Without Adelphia, we would be a ghost town, or darn close to it."

Community pillar

Rigas and his brother Gus used a $40,000 loan to start Adelphia - the name comes from the Greek word for brother - in 1952, and the company has always borrowed aggressively to spur its growth. Today, it is by far Coudersport's largest employer. It has about 2,200 workers, roughly 800 of whom come from the Coudersport area, said Kenneth Cole, who returned to the borough after college to work in the company's human resources department. The rest commute from as far as 50 miles away.

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