The Los Angeles Times from Los Angeles, California • Page 148

D6 WEDNESDAY, JANUARY 26, 1994 LOS ANGELES TIMES Orange County Business Presley Cos. Stock Plunges After Report of Losses BRIEFCASE REALE STATE Debt: Lenders will get greater control over the company in restructuring prompted by $51-million downturn. Hyman Construction Wins Contract to Expand Flamingo in Las Vegas George Hyman Construction Co. in Irvine has won a $70-million contract to expand the Las Vegas Flamingo Hilton, a famous casino 1 hotel built by gangster Benjamin (Bugsy) Siegelin 1946. Workers in Hyman Construction's Irvine office will manage the expansion, which is to include a 28-story tower with 600 rooms.

The tower will connect to the existing hotel and encircle a large courtyard with pools, flamingo ponds and a wedding pavilion overlooking an 18-foot waterfall. The company has also won a $30-million contract from Hilton Grand Vacations Inc. for a new time-share facility next to the Flamingo Hilton in Las Vegas. owner should consider this just business as usual," said company spokesman Steven Stern. "In fact, it could be a positive for them." Presley develops single-family homes and townhomes at the Highlands in Anaheim Hills; View-pointe North, a 276-unit project in Anaheim Hills, and Horesethief Canyon Ranch, an 820-acre site in Riverside County.

Presley is the victim of its own aggressive land acquisition policy in the late 1980s, when most of the properties were purchased with loans. The company bought vacant real estate at the top of the market and since then has seen the value plummet. In an attempt to raise cash, the company went public in October, 1991, at $10 per share, raising $70 million. Stock reached a high of $17.25 a share before dropping to its current level. Presley shares fell 87.5 cents a share in heavy trading Monday, closing at $3,125 per share on the New York Stock Exchange.

If the debt swap is completed, Foothill Capital a lender and money manager in Los Angeles, would become the company's major shareholder, as it controls the two limited partnerships that are now the company's major creditors. Foothill holds at least 40 of the outstanding debt through the partnerships, which are mostly composed of major corporate pension funds. After the restructuring, Presley's current leading shareholder, Newport Beach builder William Lyon, would see his estimated 32 company stake reduced to about 8 to 10, according to John Nickoll, president of the Foothill Group, parent company of Foothill Please see PRESLEY, D9 into 43.16 million shares of common stock, equal to 70 of the outstanding shares. "What they are trying is what other large Orange County home builders are doing cleaning up the balance sheets," said Don Dahl, partner in the real estate service group at Arthur Andersen in Irvine. "This buys the company time to get through, the current slowdown.

With a cleaner balance sheet, it may be able to finance new construction and not be overburdened by this debt. The name of the game is capital." The company, which builds planned housing communities, said homeowners at its current projects will not affected by the proposed restructuring. "Any Presley home By DEBORA VRANA SPECIAL TO THE TIMES NEWPORT BEACH-Shares of Presley a Newport Beach home builder hard hit by the slump in California real estate, lost a fifth of their value Tuesday after the company reported a $51 -million annual loss and proposed a massive debt restructuring. Late Monday, Presley announced plans for a debt-for-equi-ty swap to restructure a $340-mil-lion credit line. The swap would give its lenders, mostly investors rather than banks, greater control over the company.

If approved by Presley shareholders, the swap would convert $95 million of debt Home Sales Orange County After years of sluggishness, home sales have gradually picked up steam since last summer. The trend toward lower prices continued in December, as the average price of all homes sold dropped about $5,000, or 2, from December, 1992. The lowest average price, about $145,000, was found in Santa Ana. The highest average price in Orange County in December: nearly $650,000, in Corona del Mar. Man's Home Is His Sandcastle: Costa Mesa architects McLarand, Vasquez Partners have been honored for The Sandcastle, a Newport Beach home chosen as 1993 Home of the Year by the National Assn.

of Home Builders. The trade group cited the home's strong sense of context, warm and natural materials, openness and practicality. The beachfront home is the personal residence of architect Carl McLarand The company received the award last weekend in Las Vegas at the trade group's annual convention. Building a Network: Anne Armstrong and her husband, Robert, have started a new service in Orange County called Contractors Referral Network. The idea is to protect consumers against scam contractors.

The service is free to residential and commercial consumers, while contractors pay a $300 fee to belong. The 6-month-old company, based in Laguna Hills, does on-site inspections at 12 work sites completed by a firm and checks the contractor's license with the state. "We're doing some estimates for people with earthquake damage, but we specialize in Orange County. But some of our contractors are willing to go to Los Angeles," Armstrong said. Strategic Move: Strategic Mortgage Services in Costa Mesa has announced that it will perform appraisals at cost for people in the areas affected by the Jan.

17 Los Angeles earthquake. SMS, which touts itself as the nation's largest appraisal said its personnel can provide both interior and exterior inspections, as well as a survey of the neighborhood, for people purchasing or refinancing homes. "We understand the added burden of uncertainty an event like this creates for those in the process of buying or refinancing," said Steve Currit, president of the appraisal division for SMS. Beachfront Property: The Holiday Inn Express, a 30-room Capistrano Beach hotel built in 1985, will be auctioned off Friday as part of National Hotel Auction in Beverly Hills, where $100 million worth of hotel properties are expected to be sold. The hotel, the only Orange County property in the sale, is on Pacific Coast Highway near Doheny State Park.

Formerly called the Edgewater Inn, the hotel, which includes a sauna and spa, is the world's smallest Holiday Inn. Selling price is expected to be about $2 million, said Bob Perlman, a hotel broker with Grubb Ellis in Anaheim. 7 Though the hotel suffered no earthquake damage from the Jan. 17 quake that rocked Los Angeles, Perlman said, the jolt may have scared off potential buyers in other areas of the nation. The auction is being held by Grubb Ellis and Ross-Dove Auction Co.

in San Francisco. Dynasty On the Move: Dynasty Golf, a maker of golf accessories, is moving. The company has signed a six-year lease for a industrial building in Irvine for $1.5 million. Dynasty will be expanding and relocating from a site in Huntington Beach. New Homes Going Up: Warmington Homes in Costa Mesa said it will build 92 homes priced at about $200,000 in the master-planned community of Rancho Santa Margarita.

The 68-year-old home-building company is also planning to erect 33 homes in Warmington Estates in the hills of Yorba Linda. Those houses will be priced at about $350,000 on large lots that will average 10,000 square feet. Compiled by Debora Vrana, Times correspondent O.C. STOCK WATCH Of the 1 00 largest publicly traded companies in Orange County, 27 gained value Tuesday, 36 lost and 37 remained unchanged. The following chart shows the five biggest percentage winners and losers among county companies' stocks.

DECEMBER 1992 DECEMBER 1993 DECEMBER 1992 DECEMBER 1993 ZIP Sales Avg. price Sales Avg. price ZIP Sales Avg. price Sales Avg. price Allso Viejo 92656 121 $207,345 97 $180,289 Laguna Beach 92651 18 $498,000 40 $388,014 Anaheim 92800 2 357,000 0 Laguna Hills 92653 84 215,643 81 Anaheim 92801 31 182,276 24 152,609 Laguna NiguelL.

Beach 92677 172 300,412 153 296,245 Anaheim 92802 24 182,217 24 174,396 Lake Forest 92630 82 206,511 90 188,089 Anaheim 92804 34 180,279 48 175,983 La Mirada 90638 1 212,500 2 188,000 Anaheim 92805 45 175,178 38 163,837 Los AlamitosRossmoor 90720 16 305,188 11 288,136 Anaheim 92806 20 203,925 26 199,280 Midway City 92655 11 156,550 7 149,000 Anaheim Hills 92807 53 235,075 50 244,927 Mission Viejo 92691 81 207,910 98 198,703 Anaheim Hills 92808 53 252,030 63 268,286 Mission Viejo 92692 107 259,115 84 230,742 Balboa 92661 2 1692,500 7 535,000 Mission Viejo 92690 1 255,000 3 215,500 Balboa Island 92662 3 801,000 3 525,000 Newport Beach 92660 36 473,629 38 583,592 Brea 92621 47 264,468 35 228,371 Newport Beach 92663 24 404,708 28 303,519 BuenaPark 90620 40 180,475 43 170244 Newport Beach 92658 1 211,500 0 Buena Park 90621 17 211,219 23 203,909 Orange 92665 23 192,652 20 193,632 Capistrano Beach 92624 12 278,950 4 191,333 Orange 92666 9 190,333 9 Corona del Mar 92625 13 744,423 17 646,906 Orange 92667 26 338,058 69 348,581 Costa Mesa 92626 47 241,822 30 226,850 Orange 92668 13 157,458 14 181,000 Costa Mesa 92627 32 230,806 49 209,250 Orange 92669 36 278,786 49 266,367 e- Cypress 90630 52 254,621 47 240,326 Pelican Hill 92657 2 340,000 10 325,900 Dana Point 92629 20 251,550 47 243,477 Placentla 92670 59 234,368 46 219,444 El Toro Marine Base 92709 12 246,000 4 225,000 PortolaTrabucoCoto 92679 70 288,389 85 309,798 Foothill RanchLForest 92610 23 249,826 15 249,400 Rancho Santa Margarita 92688 117 193,581 105 205,399 Fountain Valley 92708 47 245,633 63 232,847 SanClemente 92672 74 284,860 75 Fullerton 92631 28 204,833 30 210,552 SanClemente 92673 0 6 Fullerton 92632 13 231,192 20 208,204 San Juan Capistrano 92675 49 258,266 42 274,563 Fullerton 92633 53 203,902 40 203,141 Santa Ana 92701 31 177,173 35 166,574 f' Fullerton 92635 15 222,250 17 252,206 Santa Ana 92703 38 154,081 27 145,630 GardenGrove 92640 42 166,244 33 164,045 SantaAna 92704 44 178,953 38 148,068 Garden Grove 92641- 31 .185,621 23 178,905 SantaAna 92706 19 189,211 35 191,412 Garden Grove 92643 24 165,396 25 153,500 Santa AnaCowan Hgts. 92705 29 385,431 39 GardenGrove 92644 23 167,068 18 162,556 Santa AnaS.A. Hgts. 92707 27 174,111 38 157,730" Garden Grove 92645 13 214,692 21 201,000 Seal Beach 90740 12 300,000 12 290,625 GardenGrove 92642 1 185,000 0 Silverado Canyon 92676 1 118,000 5 149,100 Huntington Beach 92646 65 266,905 48 233,576 Stanton 90680 10 142,650 20 Huntington Beach 92647 34 225,008 49 233,925 Sunset Beach 90742 0 1 365,000 Huntington Beach 92648 47 336,293 85 308,390 Trabuco Canyon 92678 4 246,250 4 247,875 Huntington Beach 92649 27 370,722 40 325,122 Tustin 92680 85 209,068 107 230,926 Irvine 92714 96 241,574 88 233,343 Westminster 92683 67 194,858 61 197,176 Irvine 92715 32 275,629 24 250,979 Yorba Linda 92686 69 314,713 98 248,503 Irvine 92720 36 253,139 38 239,824 Yorba Linda 92687 13 328,024 20 360,591 La Habra 90631 38 199,946 56 194,098 Others 17 2 La Palma 90623 16 237,063 18 216,500 County total 2,962 245,145 3,137 240,373 Source: TRW REDI Property Data; Researched by JANICE JONES Los Angeles Times PacifiCare Signs Deal With Workers' Comp Insurer Turn. Percent Tuet.

Percent Company Price Change Company Price Change GAINERS LOSERS Quality Systems $4.38 9.5 Presley Cos. 3.13 TriCare 3.38 8.0 Wet Seal 3.38 Datum Inc. 4.38 6.1 US Facilities 10.38 EmulexCorp. 7.75 5.0 Amplicon Industries 18.75 Platinum Software 12.00 4.4 Western Digital 11.00 Source: Newport Securities panies elect to have an HMO would be restricted to the private doctors participating in this program. But since it should be cheaper, the new plan will be popular with employers, Liberty Mutual hopes.

The insurer, which plans to sign similar deals soon with managed health providers on the East Coast, said it expects its competitors, to follow with their own HMO deals as it becomes clear that the arrangement is profitable for HMOs and cuts workers' comp costs for employers. Workers' comp is insurance paid for by employers and required by the states, covering employees who are hurt on the job. The arrangement between Liberty Mutual and PacifiCare should also help reduce fraud in workers' comp claims, because the deal Health: Agreement with Liberty Mutual, believed the first of its type, could give the HMO a big boost. By MICHAEL FLAGG TIMES STAFF WRITER CYPRESS-PacifiCare Health Systems Inc. and a major insurance company in Boston signed a deal that they said Tuesday would save employers money by allowing them to send injured workers to a health maintenance organization for the first time.

Liberty Mutual Insurance Group said it believes this is the first time a workers' compensation insurer has teamed with an HMO in this type of arrangement. Liberty Mu Tune Up and Lube Pays Fine in Consumer Fraud Cases 'I i Los Angeles times gives the HMO an incentive to get workers back on the job as soon as possible. California's workers' comp system, critics says, is rife with fraud. "This agreement reprpser's' a new form of partnership etween the managed-health-care community and the insurance industry," said Thomas Ratney, a senior vice president at Liberty Mutual. For PacifiCare, the deal looks like the best way into the workers' comp market.

"Some HMOs have bought insurance companies, and some insurers have bought HMOs," said Vicki Merrill, president of Compre-. mier, PacifiCare's workers' comp unit. "But we decided we could, best use each company's strengths through this kind of alliance." wide prosecutors. FundAmerica offered members rebates on long-distance phone calls, airline tickets and other products and services. But prosecutors said its real mission was a classic pyramid scam: Early investors make big commissions selling memberships, but later investors are left holding the bag when the company inevitably runs out buyers for its memberships and the scheme collapses.

FundAmerica says the new company focuses more on selling products and less on commissions from selling memberships. It has moved into 18 states and has 150,000 members. Edwards' lawyer, Neal R. Son- -net of Miami, said in a statement, "While we were always confident that we would prevail at trial, we believe the settlement fair to both sides." FundAmerica Pleads No Contest to Reduced Charge in Florida tual, with more than $20 billion in assets, sells workers' comp and other types of insurance nationwide. PacifiCare, with headquarters in Cypress, has more than 1 million members, mostly in the West, and this deal could give the HMO operator a big boost, said an analyst who follows the company.

"The workers' comp market is a huge one, and it's virtually untapped by HMOs," said Thomas E. Hodapp of San Francisco investment bankers Robertson, Stephens Co. "This could be pretty meaningful for them." Health maintenance organizations offer lower health costs but restrict patients' choice of a doctor to the HMO's own physicians or those with whom it contracts. So injured workers whose com FundAmerica plead no contest last week to a charge of misrepresenting investors' odds of success, a less harsh charge than stock fraud. The 1990 criminal charges helped push FundAmerica into bankruptcy.

The company was shut down and its assets sold off to repay creditors. Now, though, there is a new incarnation FundAmerica, Irvine's FundAmerica 2000 which says that the new company has made changes even though though the Florida case proves that its predecessor didn't do anything wrong. "After more than three years of legal fees, a trial was just going to add more," said Robert C. Gilman, the new company's executive vice president. "By pleading guilty to an innocuous Florida law, the case goes away.

"We never changed the compa By ANNE MICHAUD TIMES STAFF WRITER SANTA ANA Tune Up and Lube Centers, which was discovered charging its customers for unnecessary repairs and returning cars in an unsafe condition, has paid $65,000 to help settle a lawsuit brought by the Orange County district attorney. Based on consumer complaints, the state Bureau of Automotive Repair investigated Tune Up and Lube locations in Tustin, Cypress, Westminster and Anaheim. Undercover drivers were charged for repairs that were not done or were sold unneeded repairs, the bureau reported. In one case, the undercover driver was sold new front brake pads, calipers and grease seals that the car did not need, the district attorney's office said Tuesday. The car was then released in a dangerous condition, the office said, with an improperly installed master cylinder and with inoperable brake lights.

Those items had een in working order when the car was brought in. The company's lawyer did not return a phone call on Tuesday afternoon. The district attorney's office said that David Kalb and Evan Bank, owners of Tune Up and Lube, did not admit wrongdoing, but agreed to pay an undisclosed fine and to pay the $65,000 cost of the Investigation and adhere to terms of the settlement. The terms include on-site inspection, notice to employees of the settlement and regular reports to the Bureau of Automotive Repair. Tune Up and Lube Centers, which is based in Laguna Hills, has six service and repair shops in Orange and Los Angeles counties.

ny name because we feel we never did anything wrong in the first place. And we feel we've been completely exonerated." The deal with prosecutors, in fact, clears the way for Edwards to take over the successor company, FundAmerica 2000 Inc. He sold the old company's name and marketing plan to one of his lawyers, but the deal allowed him to buy a majority stake in the new company if he beat the Florida charges. Edwards is already a consultant to the new company. The plea deal even allows Fund-America and Edwards to operate in Florida again in a year.

Under the plea bargain, the charges against Edwards will be dropped in a year if he doesn't violate any laws. So far, Edwards has stayed out of trouble in Florida, said David J. Audlin one of the state attorney general's chief assistant state By MICHAEL FLAGG TIMES STAFF WRITER IRVINE A company accused of defrauding investors has pleaded no contest to a single felony charge in a deal with Florida prosecutors. The company, Irvine's defunct FundAmerica must pay a $200,000 fine but avoids a criminal trial. Florida's attorney general contended that FundAmerica was a pyramid scheme a company that spent more time signing up new members for a fee than actually selling products.

The Florida courts, however, would not let prosecutors introduce a key part of their case what prosecutors said was evidence that company founder Robert T. Edwards had run pyramid scams on three continents. (He was never convicted.) So prosecutors agreed to let 1 a..