Reno Gazette-Journal from Reno, Nevada • Page 32

tasiness 12B Wednesday, December 12, 1984 Reno Gazette-Journal SSSSSS FIB keeping tower offices after sale to Cal Neva SAN JOSE, Calif. Semiconductor bookings and billings in the U.S. market declined again in November, according to figures released by the Semiconductor Industry Association. Manufacturers in the United States, Europe and Japan reported average monthly bookings for the three month period ended in November of $589.9 million, a 15 percent decline from the previous three months. Reflecting massive order cancellations, November billings totaled $885.3 million, a 2.6 percent decline from the previous month, "The current semiconductor industry business climate continues to be weak," said the association's president, Thomas D.

Hinkelman. "Although iwe expect December billings to be somewhat higher than those for November, fourth quarter 'shipments will total about $2.7 billion, a 10 percent decline from the third quarter. -T By SUSAN VOYLES First Interstate Bank of Nevada will lease back space it now uses in a downtown Reno tower after selling it to owners of the Cal Neva Club, company officials said Tuesday. In confirming the pending sale of the bank's head office building and parking garage, officials of both companies said there will be no hotel or casino conversion on the 1-acre property at the corner of First and Virginia streets. Jack Douglas, a partner of Sierra Development which owns Cal Neva, said the sale is "a good deal, something less than $20 million." Bill Siart, First Interstate Bank of Nevada president, said in a prepared news release that the sale would create "no changes in our bank's downtown operation or presence." As part of the letter of agreement, the bank will hold a 10-year lease for half of the building it occupies.

And it will hold two five-year options after that. The name of the building as well as management of the entire property will remain with the bank. The 16-story office building will remain the bank's state headquarters and continue to house the main bank branch in Reno, Siart said. The date for the close of escrow is still pending. But despite the bank's statements, the bank's long-term plans in downtown are uncertain.

In April 1983, the bank bought a prime, 2-acre parcel at Liberty and Virginia streets, across from Valley Bank in the heart of Reno's downtown financial center. At that time, the bank said it was going to determine the best future use of the property. Kay Serrano, the bank's public information officer, said the bank is still studying use of that property, now used as a branch bank and trust department offices. Asked whether the bank's headquarters would 'someday be built there, she said, "That would be years down the road, if they even did that." The bank also has no plans to sell its old headquar- And for Cal Neva, Douglas said, the property would be a good investment. But there are tax considerations on both sides.

For FIB, the depreciation value of the building would be or is almost non-existent. And the net sale proceeds would be taxed at 60 percent, treated as a capital gains. The new Treasury plan to overhaul the income tax code would do away with capital gains, meaning the entire profit would be taxed. For Sierra Development the holding company of the Club Cal Neva, the building could be depreciated over the next 18 years, under the rapid depreciation rate brought out in the early days of the Reagan administration. That would mean that l18th of the purchase price of the building, excluding the value of the 0.94 acre of land beneath, could be used as depreciation each year.

Subtracting income from depreciation and building expenses, whatever loss that could result could be used to offset the corporation's income. "Both parties have looked at tax considerations. The sale and purchase of the building took several months to work out a program to lessen the tax impact on both sides," Douglas said. But the decision to buy really rested with the property's investment value, he said. "It was really a question of investing our money downtown," he said.

"We feel the FIB tower is one of the most beautiful buildings in the state. We've been located in downtown Reno for almost a quarter of a century under the same local ownership. "We had the opportunity to make money in Reno so we are particularly happy to the chance to reinvest in the downtown core area." The other partners in Sierra Development are Warren Nelson, Ad Tolen, Howard Farris and Bill Thornton. First Interstate traces its beginnings in Nevada to 1902, when Farmers Merchants Bank was chartered in Reno. The $2.2 billion bank operates 69 offices statewide, including 19 locally.

It employs 2,200, including between 250-300 at the downtown headquarters building. Sen. Baker elected to MCA board UNIVERSAL CITY, Calif. Senate Majority 'Leader Howard Baker, who is giving up his Senate in January, was elected Tuesday to the board 'of directors of entertainment conglomerate MCA JInc, company officials announced, The Republican senator from Tennessee, who has served in Washington since 1966, decided Nov. 6 not to seek re-election.

He enters private law practice after his Senate term expires at the end of the year. His name is frequently mentioned among Republican contenders for the presidency in 1988. Baker was recently named a director of Gannett the diversified communications organization that includes the Reno Gazette-Journal. James Kenney Gazette-Journal BANK: First Interstate Bank plans to keep this main branch at First and Virginia streets after sale of its building to Cal Neva Club owners. ters, at Second and Virginia streets, next to Harrah's, she said.

Including the branch near downtown at Arlington and California, the bank has four offices within the downtown area. Serrano said it's more "cost-effective" for the bank to lease space in the 22-year-old black office tower than to own it. Proceeds from the sale, for instance, could be used to generate loans. Republic adds Reno-Vegas flight Republic Airlines will begin flights between Reno Las Vegas on Dec. 15.

The flight will leave Las LVegas at 10:20 a.m. and arrive in Reno at 11:25 a.m. It will leave Reno at 11:55 a.m. and arrive in Las Vegas at 12:55 p.m. With the new service, Republic will operate three flights a day from Reno, providing connections to 44 destinations.

Included are two non-stops to Salt Lake City, continuing to MinneapolisSt. Paul and Indianapolis. Judge halts River Inn foreclosure Marathon cuts price it pays for oil Marathon Oil Co. said Tuesday it has reduced the price of the major grade of U.S. crude oil, West Texas Intermediate, by 50 cents a barrel to $28.50.

The cut was the latest in a series of reductions in the industry in the past two months, with West Texas Intermediate now ranging from $27.50 a barrel to $29. In mid-October, the benchmark U.S. blend stood at $30. Most of the nation's biggest oil companies are still at $29 a barrel for West Texas Intermediate, although No. 2 Mobil Corp.

is at $28.75. The U.S. price cuts began after Norway, Britain and OPEC-member Nigeria reduced their prices in October. SAN FRANCISCO (UPI) A federal bankruptcy judge temporarily blocked the efforts of Nevada National Bank Tuesday to foreclose on the multimil-lion dollar properties of bankrupt developer George I. Benny in the Reno area.

Bankruptcy Judge Lloyd King gave Southern California developer John Fleming Jr. until Dec. 21 to come up with the $1.05 million deposit to purchase Benny's nearly completed River Inn resort-casino and 2,300 acre Double Diamond Ranch. If Fleming can't come up with the deposit by the Dec. 21 "all bets are off," Judge King said.

The judge refused to allow Nevada National to proceed with any attempt to foreclose on the lavish River Inn property, pending further hearings on the case Jan. 3, 1985. Nevada National opposed the Fleming purchase in its attempt to recover more than $14 million in two loans made to Benny for his lease rights to the River Inn. Benny is currently serving a 30-year federal prison term for fraud and conspiracy involving the collapse of his $200 million real estate empire in California and Nevada. A third loan on the River Inn lease rights of $7.2 million is also held by Capital City Savings Loan of Washington, D.C.

Fleming, a Huntington Beach, Calif, developer, testified that he planned to pay $3.5 million for the Benny property with the backing of an unnamed pension fund investor and David Yori, a member of the Reno family that operated the River Inn as a resort in the 1950s. The Yori family of Reno has agreed to put up the $1,050,000 deposit due in 10 days, according to Vernon Stokes, attorney for John England, trustee of Benny's properties. It would be a joint venture partner in Fleming's group and would be the managing partner of the River Inn, which owned and operated it several times over its history. Nevada National attorney Thomas Donovan said the bank opposed the Fleming purchase because "we don't want to loan money on the terms proposed" by Fleming. Involved in the case are three properties, the luxury River Inn resort; a 25-acre property known as the Mogul strip on 1-80 and the Double Diamond Ranch, approved for development of 3,000 homes in a "mini-city" south of Reno.

They are mired in more than $50 million in debtor claims involving everything from bank mortgages to bills for construction and engineering work. Double Diamond Ranch has claims of $24 million against it, according to Donovan. River Inn has $21.2 million in three bank loans to Benny and claims by dozens of people who worked on the property known as mechanics liens running anywhere from $4 million to $10 million, Donovan said. Several of the nearly 50 attorneys in court for the complex hearing claimed Fleming could go broke himself if the deal is allowed to proceed and the hundreds of creditors involved in the case would be in a worse position to recover their debts. After the court session, Stokes said he was happy with the delay.

He said he hoped it would give the Fleming partnership a chance to complete the purchase effort. Economist predicts early, short-term fall in '85 rates NEW YORK AP) Economist Henry Kaufman of Salomon Brothers Inc. said Tuesday he expects interest rates will fall over the next two months, but then reverse course and move higher in an "irregular" pattern later in 1985. In a presentation that accompanied the release of the investment firm's annual financial markets forecast, Kaufman said interest rates may fall "in a marginal sense" through January. The federal funds rate, or the interest that banks charge each other for overnight loans, could slip to 8 percent to 8' percent in January from the current level of 8 percent, and that there was a "better than even chance" for another reduction in the discount rate, the Federal Reserve Board's charge on loans to financial institutions which curently stands at 8.5 percent.

Long Treaury bond yields could fall another 25 to 50 basis points from their current levels of about 11.60 percent by the end of February, he said. Rates on both adjustable-rate and fixed-rate mortgages could decline by another one-half percentage point by February, he said. He said reasons for the near-term decline in interest rates include his expectation that Christmas sales will be good but not outstanding and that money supply growth will remain slightly below the middle of the growth range which the Fed has said would be compatible with sustained, noninflationary economic growth. But he said the economy will pick up in 1985 from its current low levels, with real growth in the gross national product climbing to about 4 percent for the year. Kaufman said as a result of the economic pickup, the fed funds rate will rise toward the IOV2 percent to 11 percent range before the end of the third quarter of 1985.

UAW to represent Mazda workers DETROIT The United Auto Workers union said Tuesday it will represent workers at the auto assembly plant south of Detroit to be built by Mazda Motor Corp. of Japan. The union said starting wages would be 85 percent of the amount Ford Motor Co. will be paying its U.S. workers at the time the plant opens.

Mazda is 24 percent owned by Ford. Mazda plans to break ground in the spring at Flat Rock, and begin making cars in 1987. The union said Mazda-Ford wage parity would be reached by the end of a three-year labor agreement that would start within six months of the plant startup. WIRE SERVICE REPORTS CLEAN PRESS Suits $325S nirrcv AW YSKSl II If Slacks, Skirts, Sweaters $4 60 r-isn ana uourmcu ooa (BET CASM EFCH Village Cleaners 300 Vassar Across from Nevada First Bank 8-6, Sat. 8-3 VdDQJJK BPEEDDS Convert your 1st and 2nd Trust Deeds to Immediate Cash vou no longer have to wait for your 1st 2nd trust deeds to pay off Lemons Associates can convert those deeds to cash within 48 hours.

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