The Press Democrat from Santa Rosa, California on March 26, 1988 · 29
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The Press Democrat from Santa Rosa, California · 29

Santa Rosa, California
Issue Date:
Saturday, March 26, 1988
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New York Stuck Exchange The Press Democrat G gCLASSinED I i op r 385 1 I Evan 428 Q Down II March 25, 1988 Santa Rosa, California, Saturday, March 26, 1 988 Worst week off 988 ffor market GDDGCX PC3D0.B.QP3 TTCHE DOBinrinirj mme Lottery gamble Speaking of lotteries, some think the stock market is one of the world's biggest. Picking one winning stock these days may be more difficult than picking six million-dollar numbers. But suppose there was a brand new lottery related business that was also publicly traded? Now we're talking about taking a real gamble. Peter Durkson of Napa Is combining the two thoughts and hopes he picked the right combination for a million-dollar business. Durkson's company, U.S. Lottery Corp. (USL), will sell lottery related merchandise through the same stores that sell the state's lottery tickets. . USL's headquarters and warehouse operation will be moved to Santa Rosa In about 45 days, he said in a phone call from Napa this week. Among Durkson's ideas are a small display carousel for stores that will hold his merchandise in the stores. One USL product is called a "Shake," a little toy device in the shape of the state that contains little balls. You shake it In your hand and the balls roll around ' and display numbers that could be used for lotteries. Tphe Shake also has a little 49er shovel attached for 1 1 those that scratch lottery cards, he said. USL will U also produce special T-shirts with lottery messages, such as "Life is a Lottery." Next, the company will distribute wallet-sized plastic holders for lottery tickets and slips, he said. "We have plans for a lotto guide, something like TV Guide, with a monthly summary of the California lottery and highlights from other state lotteries," Durkson said. - The lottery game is a $30 billion-a-year business, now in 28 states and 1 00 other countries and rapidly spreading and he hopes to cash in on some of it. ; "The lottery industry is growing about 20 percent a year," he said. "Last year, ticket sales were about $15 billion in 23 states alone." The experts predict that most states will have lotteries by the year 2,000, he said. Durkson wants his company wants to go nationwide but first, he plans a test market in four Northern California counties: Sonoma, Solano, Napa and Marin. "We'll work out the bugs out of our marketing plan and then we'll go into San Francisco and Los Angeles, the state's two biggest lottery markets," Durkson said Last week, Durkson was in Santa Rosa talking to financial planners to help him sell USL unregistered convertible notes, paying 12 percent interest. . He's trying to raise $500,000 to get USL off the ground. However, one Santa Rosa financial planner who was approached by Durkson said he wasn't allowed to sell unregistered notes. A Santa Rosa banker confided that he dipped into his own IRA account, taking out $5,000 to buy some USL notes. USL began as an idea three years ago in Napa when a friend suggested that Durkson, 49, somehow get into the lottery business. The California lottery was then making its debut. Durkson, who has degrees from Harvard and Swarthmore, liked the idea enough to pursue it. He pulled together a small group of investors and began devising products he could sell through retail outlets that handle lottery tickets. , Next, he produced prototypes and laid the groundwork for a distribution channel. To make the USL business plan work the way Durkson wants, he merged his small investment group last year with a Utah shell company, or a basic penny stock company. That gave birth to USL as a publicly traded company, about 2 cents a share, but so small it's listed only on the stockbrokers' pink sheets. Dick Phillips is a Press Democrat staff writer. His column appears Saturdays. Stocks Dow Jones Averages Open 30 Industrials 20 Transportations 15 Utilities 65 Stocks . High Low 2018.73 2031.00 1973.81 877.54 883.66 854.69 174.13 175.14 171.82 762.75 767.55 745.93 Close Chg 1978.95 -44.92 860.96 -17.77 173.07- 1.36 749.35 -15.00 Standard & Poors High Low Close Chg 400 Industrials 305.57 299.13 299.53 -5.78 20 Transportations 216.35 211.29 211.92 -4.38 40 Utilities 105.99 104.21 104.49 -1.50 40 Financials 22.94 22.47 22.50 -0.40 500 Stocks 263.44 258.12 258.51 -4.84 100 Stocks 248.48 242.89 243.00 -5.48 Money As of 4:30 p.m. Friday Prime Rate: 8.50-8.75 180 days, 6.87 Discount Rate: 6.00 Eurodollar rates: Broker cat loan rate: 7.50-7.75 Overnight 6.4375-6.5625 Federal funds market rate: 1 month 6.6675-6.8125 High 6.625 tow 6.5625 last 6.5625 3 months 6.75-6.875 Dealers commercial paper 6 months 7-7.125 30-18 days 6.60-6.65 1 year 7.375-7.50 Commedal paper by fin. co.: London Interbk offered rate: 30-270 days 6.55-6.33 3 months 6.875 Bankers acceptances dealer M.: 6 months 7.125 30 days, 6 55 T-bW auction results: 60 days, 6.58 Average discount rate: 90 days, 6.57 3-month as of Mar. 21:5.76 120 days, 6.60 6-month as of Mar. 21:5.96 150 days, 6.64 - T-bill, annualized rate on 180 days, 6.65 weekly average basis, yield Cert, of Dep. by dealer - adjusted for constant maturity, 30 days, 6.60 1-year, as of Mar. 21:6.63 90 days, 6.64 ' T-bHt market rate, 1 -year: 6.34-6.32 120 days, 6.71 T-bond market, 30-year: 8.67 Fit Sheraton owners lose tax appeal By MIRIAM SILVER SlafT Writer The owners of Sheraton Round Barn Inn, facing bank foreclosure proceedings next month, lost In their bid Friday for a lower 1987-88 tax assessment. The 4-year-old luxury hotel in Santa Rosa now must pay taxes on $20.6 million assessment rather than $14.6 million it maintained was fair. The county's assessment appeals board made the ruling even though the inn's tax consultant asked that action be delayed because of "internal problems" within the company that owns the Sheraton. The Sheraton Round Barn is owned by a limited partnership of the Teachers Management and Investment Corp. of Newport Beach. Last September, TMI filed an appeal with the county over its assessment. But since then, TMI's president and three directors were ousted and the Great Western Bank of Northridge said the hotel was $550,000 behind in payments on a $12.5 million loan. TMI's tax consultant, Bruce McCourt-ney of Marvin F. Poer & Co., asked for more time on the appeal because TMI had not given him enough information for him to represent the company. , "TMI has been in a state of flux. I can't See TMI, Page E6 s ii i i r - - r i Pa IX L A courtyard at Sheraton Round Barn Inn photographed in 1986 Smith's Clothiers to close in June Staff and wire reports Smith's Clothiers, part of Coddingtown nearly since the shopping center opened 25 years ago, will be closed in June along with at least 12 of the Oakland-based chain's 13 stores. Larry Amos, the store manager in Coddingtown for 14 years and a Smith's employee for 19 years, will be out of a job when the store closes, as will his eight employees. "It's hard to take after that long. But Smith's has always been good to me," Amos said Friday. "But that's the way it goes." Stephen Smith, grandson of the founder of the 102-year-old Oakland company, said Friday the decision to close the SR store? 12 others in chain to shut men's apparel stores by July "a heart-breaker." He said he hopes the firm will be able to keep oen its largest store in downtown Oaklanl. The company, which escaped bankruptcy last year! has been hurt by competition from clothing retailers, Smith said. j He said Smith's josted "disappointing-sales of $12 million last year, but he declined to disclose the private company's losses. j The company has 120 workers, down from 500 employees at 26 stores when it was at its peak. Amos said it was the Chapter 11 bankruptcy reorganization that hurt the clothing chain the most. The company closed seven stores by running a "going out of business" sale chain-wide, he said. "It was very effective and the company was very healthy, but we did such a good job of selling it, people thought we were closed and it snowballed from there," Amos said. Smith's, in Coddingtown 23 years, was among the top volume sales stores in the chain, Amos said. Blue-chip stocks tumble; trading still stagnates By MICHAEL A. 1IILTZIK Ixm Anitrlri 1 imn NEW YORK Turning In its second desultory day in a row, the stock market on Friday completed Its worst week of 1988 as the Dow Jones in blue-chip stocks fell 44.92 points to 1,978.95. Combined with Thursday's 43.77 loss and a more than 20-polnt drop Monday, the week's record was a loss of 108 points, or 5.2 percent. Trading continued to stagnate, with volume on the New York Stock Exchange slipping back to 163.17 million shares from Thursday's 184.91 million. The performance tended to confirm some investors' and traders' worst instincts: "This is the nature of a bear market," said Jon Grovemann, head equity trader at the investment firm of Ladenburg, Thalmann & Co. "The major trend is down unless proven otherwise. Rallies, when they come, are just a pleasant surprise." For the second day in a row, the stock market flirted with a 50-point move the threshold at which the NYSE imposes restrictions on computerized program trading. This trading allows large institutional investors to place millions of dollars in orders across the exchange floor in the blink of an eye, creating sharp price swings in stocks and leading market averages. Under a rule that became effective in February, the exchange's own automated order system is shut to program trades whenever the Dow industrials move more than 50 points in a day. See Dow, Page E6 Worried Fed steps in to prop up falling dollar By ART PINE Los Angeles Times WASHINGTON The United States, anxious about the latest slide in the value of the dollar, intervened in the foreign exchange markets Friday to prop up the U.S. currency the first time since early last January that it has done so. Government officials refused as usual to comment on the action, but currency traders said it was carried out in an unusually visible way, intended to send a signal that Washington was concerned about the dollar slide. "You got the feeling that you couldn't make a move on the dollar without the Fed (the Federal Reserve Board, which conducts intervention operations for the Treasury) coming in behind," one trader See Dollar, Page E6 1 New measure expands power to block takeoVers New York Times WASHINGTON A measure that authorizes the president to block foreign takeovers of American companies if the deals are believed to endanger national security was approved Thursday evening by administration officials and House and Senate negotiators. The measure, an amendment to the omnibus trade bill, would define national security in a broad sense that might, for example, include oil, machine tools or even tires, its sponsor said. The president would have the discretion to decide whether a proposed foreign takeover imperiled the nation. A full meeting of House and Senate conferees on the trade bill will consider the amendment on Tuesday. Congress is expected to vote on the bill shortly. The wave of foreign investment has stirred increased concern among some legislators and wide swatches of the population. Foreign investment has been accelerating rapidly in recent years as the decline in the dollar's value against other major currencies has made it less expensive for foreigners to buy into American businesses. Foreigners hold investments of $200 billion to $300 billion in American manufacturing companies. They also account for 20 percent of the $2 trillion national debt and 21 percent of American banking assets. The total worth of foreign investments in the United States is estimated at $1.5 trillion, up from $194 million in 1974. . The administration's reluctant approval of the anti-takeover measure was seen as an effort to fend off another measure that It regards as far more onerous, a proposal that would require disclosure of foreign investments in the United States. "This might be a way f loosening the logjam and getting this hole bill moving," said Sen. J. James Exon, D-Neb., the sponsor of the v:rsion of the. amendment that was aj proved by the Senate. I Administration official: have warned that the president will vet) the trade bill if it includes the disclo ure measure, which is sponsored by Re . John Bryant, D-Texas. Some legislators said Friday See Takt over, Page E6 Sonoma Cbunty jobless rate dips unemployment February, January rate down and from bnth last year; Depart- reported low- Lake County Area counties Staff and wire reports Sonoma County's dipped to 5 percent in from 5.2 percent in 5.9 percent in the same mb the Employement Development ment said Friday. Mendocino County also er unemployment while and San Francisco Bay reported slightly higher rales. Although the percentage of unemployed decreased in Sonoma County in February, the total number of people employed declined slightly from January to February, reflecting the normal drop off in employment following after-Christmas sales, the department reported, j The mrmber of people employed in Sonoma County in February was See Jobless, Page E6 CASIO CALCULATOR Black & red print Full display, memory Uses std power $109 Reg. $149 Sale RICOH COMPACT COPIER Copies on any paper Reg. $1195 Only 995 Include supplias Ism SMITH CORONK - .w XL lOOO electronic typewriter Full line Memory Correction. UfordEraser" Correction. Automatic Center. Automatic Carrier Return and Dual Pitch, (type in both 10 and 12 characters per inch.) Only SiQQ Reg. $229 2 LEADING EDGE COMPUTER IBM f Compatible Free Word ll Processing, I 20 month warranty I Dual Disk Drives S . . . 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