Reno Gazette-Journal from Reno, Nevada • Page 28

msmess 14B Wednesday, November 14, 1984 Reno Gazette-Journal Sam's Town owner buying Stardust, Fremont hotels Home resales down; Interest rates blamed WASHINGTON The National Association of Realtors blames high interest rates for a decrease in home resales during the third quarter of 1984. Nationwide, resales of single-family homes, apartment condominiums and cooperatives fell 2.7 percent from the same period a year earlier. This year's figure was a seasonally adjusted annual rate of 2.94 million units. In Nevada, there were 9,000 home sales in the third quarter, a drop of 10 percent, based on a seasonally adjusted annual rate. In California, there were 353,000 annual sales, off 1.3 percent, again based on a seasonally adjusted annual rate.

Mortgage interest rates from July to September this year were about one percentage point above the rate for the same period last year. the $74 million first mortgage, which the Golden Nugget bought last week from the Teamsters Central States Pension Fund. A foreclosure sale is slated for later this month on that loan, but Ruthe said it will be Trans-Sterling's obligation to pay it out of sale profits. "I don't see any reason why this transaction won't work out," he said, promising "a lot of litigation" if the Golden Nugget attempted to go ahead with a foreclosure sale. Ruthe said Boyd's company eventually hopes to add a high-rise to the Stardust and will start on a renovation project at both resorts as soon as it takes over.

The California Hotel company is also planning to open a resort in Laughlin next month and with the new acquisitions will have five gaming properties in southern Nevada. LAS VEGAS (AP) The Stardust and Fremont hotels will be sold to a company headed by veteran gaming executive Bill Boyd, five months after a state-appointed deadline passed for the sale of the lucrative but troubled resorts. California Hotel and Casino which owns the Sam's Town and California hotel-casinos in Las Vegas, will pay $178 million to buy the resorts from a company run by Allan Sachs and Herb Tobman, it was announced Tuesday. Company senior vice president Chuck Ruthe said the. firm, which already runs the Stardust on behalf of the state, will also ask to take over as the supervisor for the Fremont from the Del Webb Corp.

before the scheduled Dec. 21 takeover date. "It is to everyone's benefit if we can get in there as soon as possible," Ruthe said. Boyd's firm has already submitted applications to the state to buy the two resorts and state officials say they will be acted upon next month by the Gaming Control Board and the Gaming Commission. Sachs and Tobman, who own the hotel-casinos under Trans-Sterling agreed in January to sell the two resorts and pay $3 million in fines for failing to stop an alleged skimming operation at the Stardust.

California Hotel executives were appointed to run the Stardust in the interim and the Del Webb Corp. was named to manage the Fremont in June after the state deadline for the sale expired. Ruthe said his company is borrowing $118 million from a consortium of banks headed by First Interstate Bank of Nevada and will assume Trans-Sterling's $34 million obligation to former owner Allen Glick. Trans-Sterling will also take back a $21.5 million third mortgage. Ruthe said he did not anticipate any problems with Financier indicted in big bank fraud case UNLV to get big software gift i LAS VEGAS A Canadian software company announced Tuesday it will donate $1.5 million in Computer software to the University of Nevada-Las 'egas, a gift university President Robert Maxson laid would result in a "major push toward computerization of our campus." Xanaro Technologies Inc.

said UNLV will be able draw on the gift in increments as it needs the loftware, beginning early next year. Maxson said the software, currently compatible With IBM computers, will provide the impetus for fee university to search for support from local computer organizations to obtain more computers for the campus. He said the eventual goal is to acquire enough Somputers to provide computer access to each of le university's nearly 400 faculty members and one computer work station for each 10 students. U.S. marshals' office for fingerprinting.

Patrick also ignored reporters' questions; Barr said he would fight the charges. If convicted, Butcher and Barr would face up to 220 years in prison and fines of $225,000 each. Patrick would face 160 years in prison and a $165,000 fine. Butcher, who was chairman and chief organizer of the 1982 world's fair in Knoxville, and his brother, C.H. Butcher once owned or controlled 27 banks in Tennessee and Kentucky and were linked to at least a dozen more.

KNOXVILLE, Term. (AP) Financier Jake Butcher, who once headed the $1.5 billion chain of United American banks, was indicted Tuesday on 44 counts of diverting millions in bank funds to his personal use in connection with the failure of the banks in Knoxville and Chattanooga. Butcher, 48, a two-time Democratic candidate for governor of Tennessee, surrendered to FBI agents and was escorted to the federal courthouse in handcuffs. Also indicted were Butcher's longtime friend and financial consultant, Jesse Barr, 47, and Jack Patrick, 46, a group vice president in the real-estate department of the now defunct United American Bank of Knoxville. The effect of the allegations, which include bank fraud, conspiracy and making false bank entries, was to divert a total of $14.9 million in bank funds to the personal use of the three men, including financing a 60-foot Hat-teras yacht for Butcher, U.S.

Attorney John Gill said. Butcher, wearing a dark blue jacket and gray pants, did not respond to reporters' questions on his way to the Associated Press SURRENDERS: Jake Butcher, left, is escorted to federal court by an FBI agent Tuesday in Knoxville. Falling demand, rising imports squeeze third-quarter profits Security Bank earnings rise Security Bank of Nevada reported a 26 percent increase in earnings for the first three-quarters of 984 over the same period last year. Net income totaled $1.5 million compared with $1.2 million for last year. The bank attributed the increase to a gain in net Interest income and loan fees associated with a higher level of business activity.

On Sept. 30, total Assets stood at $393 million, compared with $348 million in 1983. For the third quarter, the bank's income rose 23 percent, increasing from $450,909 last year to 1553,632. Security Bank, with 18 offices, is the fourth largest bank in Nevada. WIRE SERVICE AND STAFF REPORTS percent in October, marking the first time since 1967 that the index has dropped in three consecutive months.

The index fell 0.2 percent in September and 0.1 percent in August. Many corporations were forced to discount merchandise to remain competitive, and as they cut prices faster than they could cut costs, profits were squeezed. A surge in imports during the quarter, largely attributable to the strength of the dollar on foreign exchange markets, continued to threaten several basic industries, economists said. "The most obvious factor that held down the WASHINGTON The growth of corporate profits slowed in the third quarter as consumer demand flattened and imports surged, according to economists. But economists did not find the news completely dismaying.

The modest inflation rate means the quality of earnings in the quarter was good, and corporate cash flow remained strong. However, experts said one factor that hurt profits the inability of many corporations to pass along increased costs to consumers in the form of higher prices may continue to slow the growth of profitability. The producer price index for finished goods fell 0.2 growth in corporate profits in the third quarter was the flattening of sales," said Edward Yardeni, chief economist at Prudential-Bache Securities. "The only reason GNP was up was that inventory investment increased, and that led to unintended inventory accumulation. But this hurt profits through higher interest expenses to carry those inventories." Corporate profits in the third quarter were 9 percent ahead of the same quarter last year, following year-to-year gains of 45 percent and 28 percent in the first and second quarters, Los Angeles Times Atari chief cuts 800XL price TRAMIEL 1 SUNNYVALE, Calif.

(AP) -Declaring that "business is the chairman of Atari Corp. said Tuesday his company is reducing prices on Atari's 800XL home computer by $50 because competitors nave become "greedy." "I came back in business in May because I felt that this business was becoming very dull," said Jack Tramiel, who resigned as chairman of Commodore Inter-iiational Ltd. last January. "Everybody was sitting and trying to get as much money as they could. There was no reduction in prices and no improvements in technology." Speaking at a news conference, Tramiel, making his first public since he organized a roup of investors to buy Atari rom Warner Communications promised to bring "new life, uew excitement," to the computer industry.

"I believe by working harder, Dy being lean and mean, we will dequite well," he said. The current price of the 800XL, $179, will be reduced to "under $120," said James L. Copland, vice president of marketing. "This cost reduction will now make the 800XL the least-expensive, full-featured 64K personal computer in America," Copland said. Tramiel denied that the price reduction was an attempt to generate quick money to underwrite a new product line, saying he wanted to pass production cost savings along to consumers.

He said there was no plan to phase out the 800XL. In mid-August, about a month after Tramiel took over ailing Atari, the company cut the price of the 800XL from $250 to $179. He said Commodore officials could reduce the price of its competing Commodore 64 "if they wanted to." Tramiel also confirmed that Atari would unveil an 8-bit and a 16-bit computer in the first quarter of 1985 and a 32-bit computer in the second quarter. All would cost under $1,000, Copland said. "Anybody who sells computers is a competitor," Tramiel said between puffs on a big cigar.

But he emphasized that Atari was not going into the business computer industry. "We sell products to individuals that's our niche. What they want to do with them is up to them." Retailers post disappointing earnings GD Sales rose 9 percent to $2.3 billion from $2.1 billion. For the year-to-date, Federated's net income fell 19 percent from $139 million, or $2.86 a share, to $113.2 million, or $2.33 a share. Sales rose 10 percent to $6.4 billion from $5.8 billion.

Dayton Hudson No. 5: Profit fell 3 percent. Third-quarter net income came to $43.2 million, or 44 cents a share, vs. $44.5 million, or 46 cents a share, a year earlier. Expenses from combining Dayton's and Hudson's in May and the sale of two units in September reduced profits by 3 cents per share, it said.

Sales for the three-month period climbed 13 percent to $1.9 billion from $1.7 billion. For the year-to-date, Dayton Hudson posted net income of $111 million, or $1.14 a share, compared with $103 million, or $1.07 a share, a year ago. That was an 8 percent gain. Nine-month sales spurted 15 percent to $5.3 billion from $4.6 billion. Toher third quarter reports included Allied Stores ranked 12th, a drop of 8 percent.

No. 11 Associated Dry Goods Corp. an 11 percent jump, but it came mostly from the sale of some stock; No. 9 May Department Stores Co. 12 percent gain.

The retailers operate on a fiscal year that begins in February so Christmas sales can be included in the year's results. NEW YORK (AP) Several of the country's major retailers reported on Tuesday disappointing earnings for the third quarter, when soft sales forced them to mark down merchandise. "On balance, the earnings were on the disappointing side," said Jeffrey Edelman, a retail analyst with the investment firm Dean Witter Reynolds Inc. "For the most part they have been reflecting heavy markdowns. Sales have been soft, inventories have been high." Edelman added, "I think this is to be a forerunner of a reasonably promotional Christmas.

It will be good news for the consumers and bad news for the retailers." Here's how they stacked up: J.C. Penney Co. No. 3 retailer: Third-quarter net income, up 6.6 percent over a year earlier, totaled $101 million, or $1.34 a share, compared with $94 million, or $1.26 a share, a year earlier. Sales rose 10 percent to $3.2 billion from $2.9 billion.

For the first nine months of the year, Penney posted a 5 percent profit increase to $219 million, or $2.92 a share, from $207 million, or $2.78 a share, last year. Federated Department 'Stores No. 4: Profit plummeted 24 percent. Third-quarter net income totaled $42.3 million, or 87 cents a share, vs. $55.4 million, or $1.14 a share, last year.

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