Chicago Tribune from Chicago, Illinois • Page 43

INSIDE SECTION 4 Btl Bamhart 3 William Outer 3 Chicago's Top 25 George Lazarus 4 ISISSS NOT A SATE BET There's little new about hedge funds, including the risks, writes Bill Bamhart Monday, March 14, 1994 Monday Ticker New vision likely for Channel 66 Main event The Federal Reserve's inflation act has all the drama of a tightrope walker performing 3 feet above an overstuffed mattress. While the circus ringmaster, Fed Chair- Consumer prices In percent change, seasonally adjusted 3 -n I In If Srif I man Alan Greenspan, keeps giving the audience an enthralling account of the dangers that await, some say the act is missing a key ingredient: Where is the price pressure? For now, there is almost none in sight. The central bank chief is looking farther down the tightrope. He al MX If 0 I 1 S3 "fi ill .1 By Tim Jones Tribune Staff Writer When the expected announcement comes that Univision Television Network has bought a Chicago TV station located in the upper stratosphere on the dial, the news might not register with people who see it Much later, when viewers searching for Big-10 basketball or reruns of "Matlock," "In the Heat of the Night" and "Magnum PI" on WGBO-Ch. 66 find not only different programs, but a different language, then they will take note.

The Hispanic presence in the Chicago area has steadily expanded, and political empowerment has come with the carving of a Hispanic congressional seat and more seats on local governing boards. Now, with the expected purchase of Channel 66, the Hispanic profile could be elevated further. Two broadcast stations owned by Weigel Broadcasting and owned by Harriscope Corp. and cable channel Galavislon provide Hispanic programming in the Chicago area. Univision's purchase of WGBO would mark the first network-owned Hispanic broadcast TV operation in Chicago, the country's fifth-largest Hispanic market This still is network empire-building on a small scale.

It deals with a growing segment of the population, but a minority; a language that will never represent the majority of Americans; and stations that are ignored by most viewers. But the expansion of Hispanic broadcasting in urban areas mirrors an important cultural change in the United States and the development of a market that analysts say has hardly been tapped. Total advertising spending in the Hispanic market reached $721 million nationwide last year, a 38 percent increase over 1989, according to Hispanic Business magazine. New York-based Univision is the largest Spanish-speaking television network pursuing that market, claiming a viewership of more than 24 million Hispan-ics in the U.S. through 37 broadcast affiliates and 670 cable affiliates.

Univision, which broadcasts in 18 Latin American countries, also operates Galavision, the largest Spanish-speaking cable network in the U.S. Officials at Univision would not confirm that the Channel 66 purchase is imminent but those See Univision, Page 2 Tribune photo by John Smlerctak Nipsco Industries Inc. has begun a series of projects to turn flare gas from escape valves, including those at Amoco's Whiting refinery, Into electricity. ready has boosted a key lending rate. And the folks on Wall Street, who live in their own special arena, are taking the central bank chief seriously.

The result: Interest rates are soaring. Whether Greenspan's worries make much sense will be clearer Tuesday and Wednesday, with reports on inflation for February at the wholesale and consumer levels. Watch for A wholesale inflation rate of 0.3 percent, with a milder rate of 0.2 percent for consumer prices. That's the prediction of Chicago economist Jeffrey S. Given.

"Energy prices declined precipitously in November and December, but they have made a modest comeback over the last two months," says Given, of Robert Genetskl Associates. While a timetable for the revival of inflation is difficult to pinpoint, Given sees price increases returning in earnest this year. "Numerous indicators are pointing to upcoming price pressures, a result of the Fed's easy-money policies," he says. "Gold prices have been rising, long-term interest rates have been jumping and the monetary base has been exploding." Next lip: The Commerce Department reports Monday on business inventories for January. The Fed Tuesday releases Industrial production figures for February.

The Commerce Department Wednesday reports on February housing starts. Markets: The Dow Jones industrial average gained 30.40 points last week to flnishat 3862.70. Outlook: More and more economists see interest rates riding a one-way boulevard: higher. If they're right, that means more trouble ahead for stocks and bonds. "All the fundamentals are against the markets," says Sung Won Sohn, chief economist for Norwest Corp.

in Minneapolis. Alternate View: Pessimism already is so rampant that it shouldn't surprise anyone if the stock market heads higher, says Richard Evans, an investment adviser in suburban Flossmoor. He notes that small investors generally pick the wrong time to sell, and 'Tor the first time since Desert Storm, odd-lot sales, or sales by small investors, exceed purchases." He says he looks for the market to rebound, as it did when the current bull market began in the final weeks of 1990, "with some velocity." William Sluis Tribune photo by Ed Wagner Nipsco President Gary Neale: No more "expensive new plants." Old fuel, new use Waste gas to spark boost for utility By John N. Maclean Tribune Staff Writer For as long as anyone can remember, the dark, polluted plains of industrial northwestern Indiana have been punctuated with tall spindles capped by flaring gases. These escape valves for steelmaking and petroleum refining have been historical markers of industrial prowess.

In a night sky, they offer an eerie illumination of hulking sheds and fur' naces, of waterways shining with an evil glow and of monstrous bridgeworks. From the Chicago Skyway, they appear a natural part of an altogether unnatural universe. But in a while they will be gone, or nearly gone. It will be years, but Nipsco Industries the northern Indiana gas and electric utility, has begun a series of projects with its biggest customers in the region to turn flare gas into electricity. The gases produced by heavy industry long have been thought of such low quality as to be nearly worthless.

Burning purifies them enough to escape state and federal environmental controls, at least for now. And for a long time, the story has ended there. But for Nipsco, a company that underwent a painful and successful restructuring in the 1980s, the flares represent an opportunity. Like many utilities in a new age of increased Td rather operate with Edison. I'm not going to start a price war with ComEd.

That's Nipsco's Gary Neale from Its customers, run it through mix it with other fuels rmluseitto make electricity the com-. pany" otherwise would have to generate from coal or hatural gas -(Nipsco canceled its BaiUy Nuclear One plant under public Ore). "We want never to build expensive new plants," said Gary Neale, who became president and chief executive officer of Nipsco last year. As recently as the 1960s and "70s, electric utilities could put up new transmission lines, build coal-fired plants, plan for a nuclear future and hope to pass all their costs along to consumers. These days, utilities do virtually none of those things.

As part of its restructuring, Nipsco promised customers it wouldn't ask for an increase in rates at least until 1996. The last increase went into effect in 1988. The thought of building new transmission lines in crowded urban areas makes Neale turn pale. And instead of planning multibil-. See Fuel, Page 2 competition, Nipsco has initiated "partnership" arrangements with some customers.

Its biggest customers are seven steel mills and the Whiting refinery of Amoco Corp. Most of these projects, which now number 11, are in an early stage. But they represent an advance guard for Nipsco as it tries to deal with problems facing all utilities the need to compete for the first time against outside power providers as a result of deregulation, and the fact that they cant solve their problems simply by building another power plant intends to buy the flare gas Playboy's former resort gets facelift i il 6 .1 -r v. Big investors see corporate clout growing Hotel chain sees profits in troubled Lake Geneva club wis? Sheboygan LSuJ Wisconsin Madison Milwaukee .1 Mlles Sir- Chicago Tribune JlL By Mike Doming Tribune Staff Writer NEW YORK Corporate annual meetings aren't likely to be mistaken for political conventions, but the once-a-year stockholder votes are beginning to assume a bit more of the give-and-take of democratic politics. Except for the rare proxy fight mounted by a corporate raider, the lead-up to the annual affairs for years carried all the excitement and uncertainty of an old-style Soviet electoral contest In most cases, unopposed nominees won election to corporate boards with a minimum of discussion or dissenting ballots.

But as the nation's corporations prepare this year for their stockholder meetings, mostly in the spring, executives Increasingly are opening negotiations with key shareholder constituencies, hoping to appease dissatisfied investors before the public votes. The consultations with major stockholders reflect a maturing of activism among institutional investors that began in the 1980s with campaigns to repeal anti- takeover poison pills adopted by corporate boards. Critics maintained that the takeover defenses protected underperfor-ming executives at the expense of stockholders, who are supposed to own the corporations but whose ability to sell them is See Clout, Page 4 I By David Young Tribune Staff Writer The bunnies are long gone. So is the black leather decor, replaced at least temporarily by galvanized steel studs, wires dangling from bare electrical conduit and plenty of construction dust The temporary master of Hugh Hefner's personal hutch at the former Lake Geneva Playboy Resort is Craig Rambo, whose principal interest is gutting the place and remaking it into the Grand Geneva Resort Spa. Rambo is project manager for the Milwaukee-based Marcus Hotels and Resorts' $20 million renovation of the dilapidated club.

"We're going to make the hutch into a suite that will knock your socks off," added Lee A. Berthelsen, president and chief operating officer of Marcus Hotels, who plans to have the 374-room resort reopened for business in May. Berthelsen got the resort, which includes two golf courses, stables, a ski hill and Tribune photo by Bob Larger The lobby of the Grand Geneva Resort Spa, once the Lake Geneva Playboy Resort, takes shape. health club, for a bargain at $4.25 million last year. Still, the renovation and reopening of the place represents a substantial investment for the parent Marcus Corp.

Until last year that company, which got its start in movie theaters in the 1930s and branched into budget motels (Budgetel) in 1974, owned only 3 hotels all in Milwaukee and had never run a resort Hotels accounted for less than 10 percent of the lodging division's $109 million in sales, which is half the corporate totaL Marcus decided to expand its hotel operation last year, despite a nationwide surplus of rooms, because the prices for hotels have fallen to the point that It is 4 possible to make a profit operating them once again, said Stephen H. Marcus, chairman and chief executive of the corporation. Today, to replace this proper ty Lake Geneva would cost $45 million to $50 per room," he said. Marcus and his executives are convinced that despite the bargain, they havent bought what, is known as a doom site bad location that won't succeed no matter who owns it There is no doubt the old Playboy resort has had its problems. The club had some good years after Playboy Enter prises opened it in 1968, said John Farmer, one of the early managers.

"It was the cat's meow," he said. "But the times overtook it" The dark wood motif and intimate spaces were fine for trys-tlng in 1970, but hardly the kind of decor a former tryster would want for his family in 1980. A badly overextended Hefner sold that resort and one like it near New York City to Chicago-based Americana Hotels a subsidiary of Bass Brothers Enterprises in Texas, in 1982. The sale price for the Lake Geneva club was $11.95 million, Walworth County, tax records show. Americana renamed the place but couldn't recapture its lost See Playboy, Page 4.