Reno Gazette-Journal from Reno, Nevada • Page 15

Reno Gazette-Journal Tuesday, November 19, 1985 5B $3 billion backup proposed for ailing Farm Credit System tion has resisted any effort at financial aid, arguing the system has untapped resources it can use. The system, the nation's largest -farm lender, is suffering along with the rest of the agriculture sector from the most serious rural depression in decades. Farmland values the collateral for the bulk of the system's loans have plummeted up to 50 percent over the past five years in the hardest hit areas of the Midwest. System officials report the 37 cooperatively owned banks will together lose $2.5 billion this year, with further losses expected in 1986 and 1987. Such losses would -soon eat up everything the system has set aside as a buffer against bad loans, according to FCS WASHINGTON (AP) Farm-state lawmakers Monday unveiled legislation aimed at rescuing the troubled Farm Credit System, including a $3 billion backup line of credit.

The measure, to be formally introduced Tuesday by House Agriculture Committee Chairman Kika de la Garza, D-Texas, and three other senior committee members, calls for stronger regulation of the loosely knit $70 billion lending system and a streamlining of FCS's cumbersome organization. Whether financial aid should be included in any package for the system, whose size would make it the nation's third-largest bank if it were a normal commercial institution, has been the subject of hot debate. The Reagan administra line oriented rather than top-line oriented," he said, meaning they're not heavily into comping guests with free rooms and food. Leonard said he believes Reno could get a shot in the arm next year because Bally will have to promote the Bally Grand name. Bally hopes to complete the sale by March 1986.

Looking at the competition in Las Vegas, the analysts agreed Bally's purchase of the MGM and the Golden Nugget's proposed purchase of the Dunes across the street, announced Friday, will make the Four Corners on the Strip even more exciting. Leonard said he expects Stephen Wynn, Golden Nugget chairman, to demolish at least part of the Dunes Hotel if his bid to buy the property out of bankruptcy court for $110 million is accepted. "There's a desperate need for it," Leonard said of tearing down much of the Dunes, adding that much of recent expansion was rather haphazard. Bally is expected to draw on some of its Bally's Park Place executives for licensing as key employees to run the hotel-casinos. Lee said he expects Bally to put its own people in place at its hotel in Las Vegas, which would serve as headquarters for the state.

His guess would be that the company would retain MGM-Reno President Barrie Brunet to manage the Reno property. Casino owners in Reno see the purchase in a favorable light. "The MGM has been one great source of business for the entire When he sold what became the Las Vegas and Flamingo Hilton to the Hilton Corp. in the early 1970s, he turned around and built an even bigger hotel, the MGM-Las Vegas. As for the MGM hotels, Lee said Kerkorian is probably disappointed that the bottom line didn't improve after both properties were expanded in the summer of 1981, boosting the total room count to 5,000, a 40 percent increase.

Prior to the fire in November 1980 that killed 87 people at the MGM-Las Vegas Lee said the hotels produced an operating income of $72 million. That's income produced before taxes and long-term debt is considered. In the latest 12-month period ending in August the hotels produced an operating income of $62 million. It remains to be seen whether Bally can change the profit picture. However, Lee called the firm, "very good operators," The analysts were split on what these latest deals mean for Nevada.

Both the Golden Nugget and Bally, through its Park Place casino, derive a significant portion of profits from Atlantic City. The proposed purchases could mean money may be moving back to Nevada, Lee said. "The gaming industry has come full circle," he said. "When Atlantic City first opened, the money used to come from Nevada." "I think we're seeing a possible change in the face of the industry," Leonard said. community," said John Ascuaga, owner of the Nugget in Sparks.

"Barrie, as the head honcho, is responsible for that." Don Carano, owner of the Eldorado, seconded Ascuaga's comments. He added that Bally should also prove to be a good neighbor. The biggest question in all these maneuverings, however, is the next move of Kirk Kerkorian, the Beverly Hills investor who owns 70 percent of the MGM stock. He would receive about $286 million from the MGM Grand Hotels, which was spun off from Metro-Goldwyn-Mayer Film Co. in 1980.

And he recently agreed to sell MGMUA to Ted Turner for $1.5 billion. He has said he would build a new movie company around United Artists which he would repurchase from Turner Broadcasting for $485 million. "Kerkorian is the mystery of the day," Lee said. "He's going to walk away from two transactions with somewhere in $500 to $800 million in cash. "He's not a man to sit on even a hundred dollars for long.

The most unwanted phone call in the country today will be Kerkorian calling a chief executive officer for a copy of his annual report. There are very few companies that would be too large for him to buy." And Lee wouldn't be surprised if Kerkorian decides to build another MGM Grand down the road, after a three-year prohibition included in the sales agreement would expire. Kerkorian has done it before. BMW dismisses takeover talk MGM sale From page 8B At the end of 1984, the company listed $1.4 billion in assets. In the last three quarters, ending Oct.

29 the Chicago giant reported earnings of $30.2 million on revenues of $1.86 billion. Meanwhile, the tower project could be competing against a proposed 800-room tower at Bally's Park Place casino in Atlantic City, Lee said. Bally's board of directors in Chicago is expected to take up the $80 million project at its December meeting. Saul Leonard, gaming partner in Los Angeles for Laventhol Horwath, a national accounting firm specializing in the leisure industry, said he believes Bally would be more likely to build a feature attraction to the Reno property. "Bally is a major factor in the leisure industry, with a number of amusement parks.

I'm sure they know how to promote and create excitement." While saying both MGMs are "jewels," Peltier said he expects the hotel-casinos will be made to look brighter. And he expects that if any machines need replacing, "we build the best machines, so I'm sure they'll be Bally." George Drews, president of International Game Technology in Reno, said Bally buys some slot models from IGT that it doesn't produce. "They have been enlightened enough to buy from us in Atlantic City," he said. Overall, the look of Bally will be bright and machine-oriented, Lee agreed. "You know when you walk in the MGM-Reno, you get that kind of stoic, regal atmosphere? My guess is they will change that.

"It will be a cross between an MGM and a Circus Circus," he said. "There'll be more glitz and flitter, more concentration on the slot machines." Leonard doesn't really see much change. The MGM and Bally's Park Place are operated much the same. Both, he said, "have been going after Mr. and Mrs.

America who have paid to come to the facility." "Both properties are bottom- involvement in this company," said Gunter Kramer, chairman of BMW of North America a subsidiary of BMW AG. "Why should you give up something that's so profitable?" The late industrialist Hebert Quandt was credited with rescuing financially ailing Bavarian Motor Works in 1959. Quandt's widow and children still control 60 percent of the publicly traded company's shares DEARBORN, Mich. (AP) -BMW officials Monday shrugged off a persistent auto industry rumor a takeover attempt by General Motors Corp. The maker of luxury cars said it has been approached by GM, Ford Motor Co.

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