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Slim City

Now nobody relishes climbing into the ring with Carlos Slim Helú, not even a telecommunications heavyweight like AT&T Corp. But when Slim's monopoly, Teléfonos de México, better known as Telmex, was forced to compete in 1997, there were predictions that it would be swiftly KO'd by a world-class organization. Instead, AT&T's Mexican subsidiary, Alestra, is today reeling, pummeled mercilessly by Slim in the marketplace and tied up silly by his lawyers in the Mexican courts. Adding insult to injury, Slim has become the biggest holder of the $570 million in debt that Alestra is seeking to roll over to survive.

Slim sounds shocked by suggestions that he might use his 18 percent share of Alestra's bonds to block the company's attempts to restructure -- and thus force it into bankruptcy. "It's a purely financial investment," he insists in an interview with Institutional Investor (see box, page 28), pointing out that he purchased the bonds, which yield 14 percent, over the past year at about 35 cents on the dollar. To be sure, he also suggests that "Alestra might want to offer more attractive terms to its bondholders." He, however, won't take an active role in any such negotiations, Slim adds.

Alestra and Avantel, WorldCom's equally beaten-up Mexican subsidiary, may or may not survive. But Slim, Latin America's richest man, is projecting himself beyond Mexico as an entrepreneur of global stature in the mold of a Rupert Murdoch or a Li Ka-shing. "Like any sports champion, we need world-class competition and benchmarks to take the true measure of ourselves," says the burly, 63-year-old Slim.

Slim's many ventures run the gamut from mining and manufacturing to retailing and finance. But the fact that he has chosen to measure his business acumen in telecommunications, the most debt-ridden, money-losing industry on earth, says a lot about his confidence. By some standards, his companies -- Telmex and its wireless spin-off, América Móvil, which operates throughout the Americas -- already outperform the global telecom giants. Last year Telmex had net income of $1.83 billion on revenues of $10.5 billion. That was a 20.6 percent drop from its 2001 earnings of $2.3 billion on revenues of $10.95 billion. But Telmex still maintained a whopping 52 percent margin on its earnings before interest, taxation, depreciation and amortization.

Spun off from Telmex three years ago, América Móvil had a net aftertax income of $249 million on revenues of $3.86 billion in 2002, up from $160 million in aftertax earnings on revenues of $2.8 billion in 2001.

"Telmex is one of the world's most profitable companies in fixed-line communications," says Gabriela Baez, a senior analyst at Pyramid Research, which covers the industry. "And América Móvil has been equally impressive."

Meanwhile, Slim's main rivals and former allies are wallowing in the global telecom meltdown. WorldCom is operating under bankruptcy protection while grappling with charges of fraudulent accounting. AT&T lost $13 billion last year. It gets worse across the Atlantic. France Télécom, a former Slim partner in Telmex, posted a net loss in 2002 of $23 billion, the largest in French corporate history. And Telefónica, Slim's strongest competitor in Latin America, lost $6 billion for the year.

So how has Slim dodged the severe downturn that walloped the rest of the telecom industry? For one thing, he wasn't seduced by the siren song of third-generation, or 3-G, technology, with its still unproven promise of a seamless convergence of mobile phones and the Internet aimed at providing high-speed wireless voice and data transmission, anyplace, anytime. In Europe alone, telecoms spent more than $125 billion on 3-G investments. Slim's companies aren't known for being on the cutting edge of technological innovation. "What they are good at is cash management, marketing and cutting costs," says Rogelio Urrutia, a telecom analyst at Santander Investment in Mexico City. "And they never make investments big enough to put their balance sheets at risk."

It helps that Slim's companies still enjoy a near monopoly on their own turf. Last year Telmex and América Móvil grabbed 85 percent of total revenues for fixed-line and wireless operators in Mexico, according to the Asociación Nacional de Telecomunicaciones, an industry group. Although not denying Slim's prowess as a businessman, critics insist that competitors have been victimized by his manipulation of Mexico's weak regulatory agencies and arcane laws.

The most notorious of these laws is the amparo, or injunction, which allows a person who feels a government decision is violating his constitutional rights to ask a judge to delay its implementation -- often for years. Since 1998 Slim has made use of more than 60 amparos to thwart decisions by Mexico's antitrust agency, the Comisión Federal de Competencia, ordering Telmex to reduce its interconnection rates -- the fees rivals must pay to use Telmex trunk lines. "Telmex's very aggressive use of the amparo has ended any hope of an open telecommunications market in Mexico," says Karina Duyich, who headed AT&T Mexico's legal department until last year.

Slim's legendary political prowess also helps keep competitors at bay (see box, page 30). When Vicente Fox was elected president in 2000, ending seven decades of one-party rule by the Partido Revolucionario Institucional, magnates like Slim who were closely identified with PRI leaders were expected to lose their clout. During his campaign Fox asserted that as president he would not tolerate a telecom monopoly. And he didn't raise objections to a U.S. government decision to file an official complaint with the World Trade Organization, alleging that Mexico was violating its obligations by failing to curb Telmex's anticompetitive practices. But Fox has done nothing to make Mexico's telecommunications industry more competitive. And the WTO case has gone nowhere. "My sense is that the suit is probably dead," says James Jones, U.S. ambassador to Mexico during the Clinton years and now co-chairman of Manatt Jones Global Strategies, a Washington, D.C.­based business consulting firm with Latin American clients.

Meanwhile, Slim's relationship with Fox has become so solid that the Mexican president appointed a Slim confidant, former Telmex executive Pedro Cerisola, to his cabinet as secretary for Communications and Transport. Besides the cabinet secretariat, the main telecom regulatory agency, the Comisión Federal de Telecomunicaciones, or Cofetel, is widely perceived to favor Slim.

Even Cofetel's mild attempts at reform arouse suspicion. In a typical decision, the agency sent letters in April to Mexico's long-distance operators asking them to halt the practice of international "bypass calls," by which telecoms avoid paying full fees on cross-border calls. While Cofetel's action was supposedly aimed at all international long-distance operators, Telmex, as the dominant operator, stood to benefit most from a crackdown on bypasses. And, in fact, Cofetel acted only after Telmex in part blamed its mediocre first-quarter financial results on a 20 percent decrease in international long- distance traffic, which the company said was because of bypass calls. Asked to comment, a Cofetel official says, "Telmex was not the only company to complain to us about bypass calls." Cofetel officials have also pointed out several times in the past that they are constrained by weak regulatory laws.

Slim's tactics don't come as a surprise to seasoned telecom analysts. "The incumbent operator is always going to play hardball in order to keep its dominance as long as it can," says Janet Hernandez, a partner in the telecom practice at Coudert Brothers, a Washington, D.C.­based law firm. "Avantel, Alestra and other competitors are encountering many of the same obstacles faced by new entrants worldwide."

Slim's big, befuddled competitors may not elicit much sympathy, but there's plenty of reason to feel sorry for Mexican consumers. With no rivals to fear, Telmex has fallen behind the rest of Latin America in providing basic phone service. By last year the company had installed only 14.4 phone lines per 100 inhabitants, below the 15.5 average for the region. Telmex and the analysts who follow its performance point out that wireless penetration, now at 25 percent, compensates for the gap in fixed-line telephony. "It's much cheaper to deploy a wireless network than to build fixed lines," says Santander Investment's Urrutia.

But that means Telcel, América Móvil's Mexican subsidiary, which has 78 percent of the local cell phone market, is the chief beneficiary of Telmex's lag in basic services. "The only real competition in Mexico is between Telmex and Telcel," says Pyramid analyst Baez. It's the kind of competition that leaves third world Mexicans with first world phone bills: Local rates are about the same as what Americans pay, and long-distance charges are higher.

THANKS IN GOOD MEASURE TO TELECOMS, SLIM IS personally worth at least $7.4 billion, Forbes magazine estimates. His holdings also include a vast array of mining, manufacturing, transport, consumer and financial service companies. Together they account for almost half the value of the Mexico City stock exchange.

It is virtually impossible for Mexicans to get through the day without paying tribute to Slim. In the marketplace of Tenango, a couple of hours southwest of Mexico City, campesinos line up to use pay phones operated by Telmex. In Guadalajara middle-class shoppers crowd into a local branch of Sears, the American retail giant whose Mexican subsidiary is owned by Slim. The more than 100 Sanborns, a popular gift shop and restaurant chain around the country, are also his. The freeways in Mexico City are clogged with vehicles using engine parts produced in Slim-owned factories. The drivers are headed for offices and homes built with construction material churned out by Slim companies. Their mortgages may well be financed by Slim's Grupo Financiero Inbursa, which also sells them insurance and invests their savings in mutual funds and pension plans.

The empire has gotten too large for Slim to run by himself. "The fact is I'm retired from every business except the telecom part," says Slim, who is chairman of both Telmex and América Móvil. "But nothing prevents me from following developments in all our various companies and giving my opinions." That's easy enough, because those companies are run by Slim family members.

Eldest son Carlos Slim Domit manages Grupo Sanborns, which includes the more than 150 Sears and Sanborns outlets that form the retail operations of publicly traded conglomerate Grupo Carso. Patrick, the youngest son, presides over Grupo Carso's other operations, including mining, auto-parts makers, construction materials, railways and tobacco and beverage manufacturers, among other enterprises. Overall, Grupo Carso showed a net profit of $202 million on revenues of $5.14 billion last year, compared with a net profit of $170 million on revenues of $5.37 billion in 2001.

Meanwhile, Marco Antonio Slim, the middle son, heads Grupo Financiero Inbursa, which includes Banco Inbursa, insurance company Seguros Inbursa, brokerage Operadora Inbursa, investment bank Inversora Inbursa and pension fund management firm Afore Inbursa. Last year Grupo Financiero Inbursa earned a net profit of $311.2 million from $9.76 billion in assets last year, compared with a $311.5 million net profit from $8.54 billion in assets in 2001. One son-in-law, Arturo Elías, is the spokesman for Telmex, and another, Daniel Hajj, is América Móvil's chief executive officer.

Yet Slim bridles at the notion that he sits atop a family business. "We have about 200,000 employees, so it's hard to call this a family business or to try running it that way," he says. Nonetheless, he never uses headhunters, preferring to recruit promising young executives based on recommendations made by his children and in-laws at the myriad family-controlled companies. "If a relative didn't grow up interested in business, he or she should stay clear of it," he says.

Although Slim still has years to groom his successor, any talk of his suddenly stepping down makes the markets queasy. Back in 1997, when he underwent heart surgery, rumors that he was near death caused share prices to plummet. The Mexican stock exchange recovered a few days later as Slim's vital signs perked up. The same sense of vulnerability exists six years later. "When it comes to Telmex, which has especially benefited from his political clout, losing Carlos Slim would be viewed as very serious by the market," says José Linares, Latin America telecom analyst at J.P. Morgan Chase & Co. in New York. On the plus side, Slim's hands-on management style at Telmex and América Móvil leads analysts to talk of a "Slim premium" that has helped raise share prices at both telecoms.

Other analysts point out that there is no such premium at Grupo Carso and Grupo Financiero Inbursa, where Slim is perceived to have largely ceded management control to his sons. Carlos Slim Domit, now viewed as his father's likeliest successor, gets a mixed report card for his running of Grupo Carso's retail operations. The biggest rap against him was his championing of Carso's purchase of CompUSA, the ailing U.S. computer retailer, for $800 million in 2000. Two years later, after failing to engineer a turnaround and facing pressure from shareholders, Carso spun off its 51 percent share of CompUSA for $375 million. (The remaining 49 percent is owned by América Móvil.) "Slim Domit's reputation as a solid manager in Mexico still holds," says Carlos Peyrelongue, a conglomerates analyst for Merrill Lynch & Co. in Mexico City. "But the U.S. is a harder market, and I wouldn't be as confident if he did something there again."

Analysts also tend to reserve judgment on Marco Antonio Slim's stint at the helm of Grupo Financiero Inbursa. His management of the insurance and pension fund operations gets high marks. But Banco Inbursa, which accounts for 69 percent of the financial group's assets and 58 percent of net profits, doesn't impress as much. "Inbursa's profitability continues to be considerably lower than its cost of capital," Smith Barney Citigroup noted in a February report. "Given its high equity-to-assets ratio," says Jason Mollin, a New York­based financial analyst for Bear, Stearns & Co., "it's difficult for Banco Inbursa to generate sufficient return on equity to trade at a large premium to book value."

Carlos Slim insists that the markets should stop worrying about his succession. In the end, he believes family genes will tell. He inherited his own knack for business from his father, Julián Slim, a Lebanese Christian who escaped the Ottoman Empire's military draft by fleeing to Mexico in 1902. Fifteen years later, in the midst of the Mexican Revolution, he bought a general store in the heart of Mexico City. Before the civil war ended in 1921, Julián Slim acquired in piecemeal fashion eight nearby commercial buildings facing the Palacio Nacional, the presidential palace. Slim often points to his father's faith in Mexico's ability to rebound from deep crisis as an inspiration for his own strategy of investing during the country's economic downturns.

Those gambles paid off spectacularly for Slim in Mexico's last two recessions. In 1982, when the nationalization of the banking system sent the business community into a panic, he went on a buying spree, acquiring control of such cash cows as Cigatam, Mexico's leading tobacco company, auto-parts maker Condumex and the Sanborns chain at bargain prices. "Anybody who kept his head would have realized that those share prices were irrationally low," recalled Slim. A dozen years later the market value in dollars of those companies had appreciated by an average of 3,000 percent. By then Mexico was on the verge of its 1994­'95 recession. With the stock market plummeting, Slim again scooped up underpriced shares, mainly in companies he already controlled. He gained a stranglehold over Telmex, in which his holding company, Carso Global Telecom, now owns a 32.6 percent share.

SLIM HAD INITIALLY TEAMED UP WITH SBC Communications and France Télécom to buy Telmex for $1.76 billion from the Mexican government in 1990. Today the company has a market capitalization of $20.4 billion. SBC still has a 7.6 percent share, but Slim bought out France Télécom's 7 percent stake several years ago after a falling out with the French giant. "We thought Slim was just the head of a rich Mexican family business who would be happy to let us run Telmex," says a former senior executive with France Télécom. "Instead, we turned out to be the window dressing."

Underestimating Slim is even more perilous for competitors. AT&T and WorldCom came to Mexico with similar strategies: Team up with solid Mexican partners and then go after the most profitable segments of the Telmex market -- long-distance telephony and corporate data communications. But after being stymied for years by Telmex's high interconnection fees and endless legal maneuvers, their subsidiaries, Alestra and Avantel, together account for less than 20 percent of long-distance telephony and data transmission. "Alestra and Avantel don't have the market size or the resources to invest in the infrastructure necessary to become competitors of Telmex," says Rogelio Ramírez de la O, president of Ecanal, a Mexico City­based management consulting firm. (Avantel declines to comment; repeated efforts to contact Alestra were unavailing.)

Is Slim now trying to push his rivals closer to extinction by purchasing enough of their distressed bonds to block their attempts at restructuring? Besides his $100 million bondholdings in Alestra, he owns more than $300 million in debt issued by Avantel's parent, WorldCom. Some analysts take him at his word when he insists he is only interested in a good return on these investments. "Telmex already has an image of a monopoly that is too willing to use its muscle," says James Harper, a distressed-debt analyst at BCP Securities in Greenwich, Connecticut. "But if he pushed his competitors into bankruptcy -- that would be so over the top."

Instead, taking the example of Alestra, Harper maps out some win-win options that Slim probably figured upon when he bought the company's bonds at about one third of their face value. Depending upon how much Alestra sweetens its rollover offer to bondholders, Slim stands to make a $70 million to $100 million return on his investment. Even if Alestra decides to shut down, Slim stands to benefit. "The value of his Alestra holdings would fall to zero," says Harper, "but Alestra has an annual cash flow of $90 million -- and those are revenues that Telmex is likely to pick up."

Wireless competitors are faring no better against Slim, even though they started on a more level playing field. Grupo Iusacell, a mobile phone subsidiary owned by Verizon Corp. and the U.K.'s Vodafone Group, was launched a year before Telcel. But Iusacell, along with Unefon (controlled by Mexican tycoon Ricardo Salinas Pliego) have together garnered less than 20 percent of the wireless market. All are suffering severe cash flow problems and struggling to restructure their debts.

Meanwhile, with his almost impregnable home base in Mexico generating huge cash flows, Slim is rapidly expanding his telecom operations elsewhere in Latin America. His biggest venture is in Brazil, where América Móvil's subsidiary, Telecom Americas, is the second-largest wireless company, with 6.2 million subscribers. To date, however, it has lost more than $1 billion in its bid to build a nationwide wireless network that would overtake market leader Vivo, a joint venture between Telefónica and Portugal Telecom. "If we weren't expanding so fast and acquiring new companies, we would already have a positive cash flow in Brazil," says América Móvil's Hajj.

Nonetheless, Moody's Investors Service was concerned enough to place Telecom Americas on a negative credit watch last year. "We told them that they were using up all their cash, had maturities coming due and had no visible access to alternate sources of liquidity," says Jim Veneau, a Moody's analyst in New York. Telecom Americas responded quickly. Within months it had reduced its net debt from more than $4 billion to $3.3 billion, and Moody's in turn removed it from a credit watch. Although Veneau applauds Telecom Americas for being "very focused on operational efficiency," he warns that Moody's might well put the company back on a negative credit watch if it runs up too much debt in further attempts to expand its market share. But Hajj promises further acquisitions. He says one likely target is BellSouth Corp.'s bankrupt subsidiary, BCP Telecomunicações, which would give Slim's company a license to operate a network in São Paulo, Brazil's wealthiest market.

In Brazil and the rest of South America, Slim is pursuing the same classic contrarian strategy that made him killings in Mexico: investing in undervalued assets during downturns while rivals cut their losses. Investor sentiment in the region is at its lowest ebb in 15 years. AT&T Latin America Corp. has sought bankruptcy protection. BellSouth has announced it is planning no new investments in the region, and may well end up selling all its assets there. France Télécom might welcome a bid for its money-losing wireless and fixed-line operations in Argentina.

Meanwhile, Slim and his executives predict a doubling of their wireless clients in Latin America, to 60 million subscribers, over the next five years. "By then we envision América Móvil present in all Latin American countries either as the leader or as the second-largest wireless company in each market," says Hajj. That goal is attainable in countries like Ecuador and Colombia, says J.P. Morgan Chase analyst Linares, but the company "will continue to face brutal competition in Brazil, where there are four or five players with very deep pockets." And where, unlike Mexico, Slim has no particular political clout.

Some telecom analysts suggest Slim is looking north of Mexico's border as well. "His entry into the U.S. telecom market has been rumored for a long time," says Rizwan Ali, a Bear Stearns telecom analyst in New York. "He may try a joint venture with SBC or even combine the two companies, and there's also talk about Telmex being interested in Sprint."

Slim has suffered setbacks in his previous U.S. investments. In the past two years, he withdrew from Virginia-based XO Communications and Oklahoma-based Williams Communications Group, broadband carriers on which he spent more than $100 million. And then, of course, there was CompUSA, the biggest disappointment of all.

Slim insists he's not discouraged by these forays across the border and points to a growing list of gringo clients for América Móvil, which already has 2 million subscribers in the U.S. But unlike his competitors, he says, he's not going to raise the ante unreasonably, even with the world's largest telecom market at stake. "We will always be careful not to make big mistakes -- the kind of investments that carry the risk of hurting our financial health," says Slim. 


Carlos Slim: The trick is to avoid big mistakes

As befits someone who runs the ultimate family business, Carlos Slim Helú leads the kind of upper-middle-class family life portrayed so benignly in the old-fashioned Mexican movies he loves to watch. His comfortable, unostentatious residence -- the same one with overstuffed sofas and marble floors where he has lived since before he was a billionaire -- sits on a single acre of Mexico City's upscale Lomas de Chapultepec district, a few minutes drive from his office. Whenever he can, the recently widowed magnate comes home for lunch with one or more of his six children and 16 grandchildren -- and a squadron of bodyguards. On a recent afternoon, before the family meal, Slim begged a few rambunctious grandkids to quiet down and let him get on with an interview with Institutional Investor Contributing Editor Jonathan Kandell.

Institutional Investor: How have your companies managed to escape the global telecommunications meltdown?

Slim: Look, all businesses make mistakes. The trick is to avoid large ones. We've made small ones, not serious enough to risk our businesses. We avoid the trendy and the fashionable and concentrate on clear, attainable targets.

In Mexico your companies seem to have wiped out the competition in both fixed-line and wireless telecommunications.

Our competitors are among the most powerful telecommunications companies in the world. In wireless there's the [Grupo Iusacell] subsidiary of Verizon and Vodafone, and they got started in cell phones a year before we did. In fixed line it's true that Telmex had an important head start, but our competitors are subsidiaries of AT&T and WorldCom, which were very strong when they first came here. The problem is that all of them paid too much to start up their local operations, then spent too little in infrastructure investments and fell into the trap of high-interest loans and bonds. How do they expect to make a profit?

It's unusual for a company to hold its competitors' bonds. What's behind your purchase of $100 million of Alestra debt?

No matter what the rumors, it isn't our intention to threaten Alestra and increase Telmex's market share. It's a purely financial investment. Some bondholders may want Alestra to improve the terms before approving a debt restructure. But we're just bystanders in this process, and we will back any outcome.

Some Wall Street analysts are predicting that you will be making major telecom investments in the U.S.

We think our main focus will continue to be Latin America. There are 500 million Latin Americans. We are living through moments of great economic and political uncertainty, but that means we are also being offered great opportunities.

What are the advantages of a family-run corporate structure like yours?

I don't consider this a family business. Our businesses are focused on the bottom line. They have very lean structures, nothing like the usual corporate organizations. My relatives hold their jobs because they are good at them. If a relative wants to enter one of our businesses, he or she can get in easily enough, but any promotion will depend on merit.

If you suddenly retired, what would be the impact on your businesses?

With the exception of the telecoms, my businesses -- the various commercial, industrial and financial groups -- are already managed by a younger generation, executives in their 30s for the most part. We recruit and promote managers from our own firms, often moving them into a higher-growth company if they have been successful. It seems to work, because not too many talented people leave.

What has changed in the world of Mexican business since President Vicente Fox was elected in 2000, ending so many decades of one-party rule?

Mexican business is changing more because of the globalized economy than because of any change in government. Some industries are becoming obsolete, others are barely surviving because of competition, and still others are grabbing new opportunities.


Politics and power

To understand how deftly billionaire businessman Carlos Slim Helú wields his political clout, it helps to stroll through the historic center of Mexico City -- renowned for its amalgam of civilizations. Here on one side of the vast plaza known as the Zócalo rises the biggest cathedral in Latin America. It was built by the Spaniards with stones quarried from the ruins of a major Aztec temple toppled during the conquest in 1521. The formidable foundations of the temple and many of its stone effigies are also on display nearby. Around the Zócalo and lining nearby narrow streets are some of the most impressive examples of architecture in the Americas, dating from colonial times through the mid-20th century.

But equally hard to miss is the human chaos. An army of ambulant vendors brushes past underemployed and jobless people holding up "For Hire" signs. Much more troublesome are the hordes of petty thieves, armed robbers and would-be kidnappers who have gained Mexico City -- and especially its downtown quarters -- notoriety as one of the most fearsome, crime-ridden places in the New World.

Quite obviously, any politician who could claim to pacify, cleanse and revitalize the city's center could have a great future. By taking up this challenge, Mexico City Mayor Andrés Manuel López Obrador is hoping to firm up his credentials as the front-running candidate to succeed President Vicente Fox, a populist conservative, in the 2006 elections. And even though the mayor is a leader of the left-wing Partido de la Revolución Democrática, his closest ally in the business community is none other than Carlos Slim.

That should come as no surprise, because Slim is as savvy about politics as he is about business. Back in the bad old days of one-party rule by the Partido Revolucionario Institucional, when nobody reported money transfers between businessmen and politicians, Slim tried to keep a low profile. But he couldn't evade the popular perception that he was the most favored entrepreneur of the scandal-ridden presidency (1988­'94) of Carlos Salinas de Gortari. At a secret political dinner hosted by Salinas in 1993 to replenish PRI's coffers, Slim was one of the 25 business leaders who pledged an average of $25 million each.

Two presidencies later the ties between politicians and businesspeople are somewhat more transparent -- and subtle. "Businessmen are expected to assume more social responsibilities and play a more public role than they used to," explains Slim. So when López Obrador proposed hiring former New York City mayor Rudolph Giuliani for $2 million to advise on the best way to combat crime in Mexico City, Slim quickly promised a $250,000 donation -- by far the largest contribution from the private sector. To further improve security in the historic city center, Slim and other businesspeople are helping to fund a large contingent of private guards and a sophisticated network of closed-circuit video surveillance.

Lowering the crime rate isn't Slim's only concern. Through his Fundación del Centro Histórico de la Ciudad de México, he is spending $100 million to fund health and nutrition programs for the poor, to restore landmark buildings that might once again draw tourists and to subsidize housing for young professionals who work in the historic center. "We don't want the neighborhood to be a museum by day and a cemetery at night," says Slim. -- J.K.