Daily News from New York, New York • 142

DAILY NEWS, FRIDAY, MARCH 24, 1978 15 Jotamtukt (JQKimO, iwsh mi ,) lining in a Bg' 1 Ify g'lg n. It By FRANK LOMBARDI and MICHAEL ORESKES Mayor Koch vowed yesterday that he would "never capitulate' to the demands of municipal unions but is "always ready to Koch made his Dledee at Citv Hall after union leaders called off a sched i-isner. But no Dill has been passed (in Congress." On a third labor front, the Patrolmen's Benevolent Association obtained an order from State Supreme Court Justice Martin B. Stecher requiring the city to show why it should not reasses all of its property at full market value. The union has argued that the increased tax revenues from such a reassessment could pay for wage hikes for cops.

The court order must be answered Tuesday in Manhattan Supreme Court. FBI Probes Herzog Role In a Theater uled negotiating session because the city had failed to come back with a new proposal for speeding payment of productivity-based cost-of-living adjustments. "There was no cancellation from the city," Koch declared. "We're always ready to negotiate, but never ready to capitulate." Municipal labor leader Victor Got-baum said talks toward new wage patterns could resume if Koch and the Emergency Financial Control Board would assure payment of a $105 cost-of-living adjustment which is due for three months of last year under a 1976 fiscal crisis agreement. For City Agencies Only So far, Koch has offered to expedite this payment only for workers in city agencies and not for independednt agencies such as the Board of Education or City University.

"We'll be talking to them over the weekend," Gotbaum said. "It's something they admit has to be resolved." The program of cost-of-living payments in exchange for productivity improvements covers 112,000 workers in agencies directly under the mayor's control and another 169.000 in the semi-independent agencies, about half of the workers in the independent agencies already have received some payments for this fiscal year, the period in dispute. In the parallel transit negotiations, the Metropolitan Transportation Authority told the Transport Workers Union that it should forget about any hike in the 50-cent fare or an increase in government subsidies as sources of money for pay raises. Authority Chairman Harold Fisher said he would be willing to discuss wage hikes contingent on winning greater state or federal subsidies, but the union has ruled that out. Hasn't Got the Money "I can't spend money I don't have," Fisher said.

Both union and management have said repeatedly that they believe New York is being shortchanged in federal mass transit subsidies and that the Newj photo by Leonard De trick Insurance executive Edward J. Kulik talks about restoring Chrysler Building. Pledge a Soaring Future For Chrysler Building By OWEN MORTTZ The new owner of the 77-story Chrysler Building an insurance firm based in Springfield, Mass. pledged a $23 million restoration program yesterday that will return the skyscraper treasure to its original splendor. It comes at a time when New York's Grand Central district is undergoing a major facelifting.

Philip Morris Co. is exploring the building of a skyscraper on the site of the old East Side airlines ticket office; the Commodore is being redone as Hyatt hotel, and two other commercial towers are planned for the area. The $23 million Is said to be the largest sum ever invested to renovate a building. The observation deck, which has not been used for is being explored for use again. But the main significance lies in the encouraging fact that a skyscraper often called the most beautiful ever built is to be restored and that someone is spending gobs of dough in New York.

Faith in Future "We are showing our faith in New York with dollars," said a beaming Edward J. Kulik, a senior vice president of the new owner, the Massachusetts Mutual Life Insurance Co. "While New York City is losing one Art Deco masterpiece (Radio City Music Hall, we are making sure that it will retain another splendid example the Chrysler Building." The Chrysler Building is finely detailed its outside gargoyles are shaped like radiator caps, its cavernous lobby is three stories high and its elevators are distinguished by the fact that no two are shaped alike. 1 For months after its opening in 1930, it was the world's tallest building, surpassing the Woolworth Building, which had held that claim for two decades. Within months, the Empire State Building was built.

Today, the Chrysler, at 42d St. and Lexington is the sixth tallest in the world. But to architectural buffs it remains the most spectacular of buildings. In recent years, under the management of the Goldman-DiLorenzo interests, the building had run down. Occupancy fell off 10, in great part because of Texaco's move to Westchester.

Massachusetts Mutual foreclosed on the mortgage and, in the company of Mayor Koch yesterday, its officials pledged the renaissance of the Chrysler Building. By CLAIRE SPIEGEL FBI agents examining attorney Robert Herzog's management of the bankrupt D.H. Overmyer Co. also are probing his role in another local bankruptcy proceeding, informed sources disclosed yesterday. The second case involves the reorganization of the Westchester Premier Theater, the subject of a five-month federal grand jury probe here.

Herzog. installed as manager of the Overmeyer Co. by Federal bankruptcy Judge Roy Babitt. represented the theater in its bankruptcy proceedings, which began in 197G. Earlier this week.

The News disclosed that under Herzog's management of the Overmyer Co. its funds had been diverted in a variety of kickback and cash-laundering schemes. The grand jury probe of the 3.571-seat theater in Trrytown is focusing on whether the theater's owners concealed assets, including the number of tickets sold for various performances, during the bankruptcy proceeding. Herzog, whose office is at 185 Madison was not available for comment yesterday. But in an earlier interview Herzog said he didn't "know exactly what" the FBI was looking into with regard to the theater.

A Herzog employe named Julius Brand okayed invoices to the Overmyer Co. that were later used as part of a kickback scheme, according to company records. Brand also managed the theater during its bankruptcy proceedings. The grand jury probe of the theater also concerns the disappearance of records, as does the FBI's investigation of the Overmyer a national chain of warehouses that entered bankruptcy proceedings before Judge Babitt in 1973. formulas should be changed.

"Nobody's given up on that," said Meld Meat Albany Deal on Education By MICHAEL PATTERSON Breaking a deadlock that has stalled negotiations on the state's $12 billion budget, Senate Republicans and the Democratic majority in the Assembly are "extremely close" to a compromise agreement on aid to education, it was learned yesterday. specific While refusing to divulge details, aides to Senate Majority Leader Warren Anderson (R-Binghamton) indicated a willingness to accept a school aid formula basedin part, on enrollment, as favored by Gov. Carey. In effect. Anderson has taken direct control of the negotiations and moved away from the hard-line position that had been held by Sen.

James Donovan (R-Utica). chairman of the Senate Donovan has in-of the current aid on daily at- Education Committee, sisted on retention formula, which bases tendance and favors suburban and upstate school districts. While -Anderson has expressed a willingness to give ground on the issue. and other senators had been fhe chief stumbling block- to an accord. Donovan was not immediately available for comment.

No Aid Cut final package will still favor the suburban and rural school districts, with a guarantee that a school district cannot receive less aid than in the previous budget year. However, a second type of aid, based on per-pupil aid rather than total dollars, is the subject of intense negotiation. Carey and the Democrats are pushing for a change that would allow an increase in those funds to urban schools. Although rank-and-file legislator have left Albany for the five-day Easter break, budget negotiations continued Carey, his key budget aides, Anderson and Assembly Speaker Stanley Steingut (D-Brooklyn). -'jjWWwPFeas-'jholdjMiAi the budget unlvft Parp-v'c r.rnnAea nrnnart-v Parloz Vous Telephone? Portland, Maine (Combined Dispatches) Ma Bell is giving free French lessons to sorr.t of its oper-tors in Maine and New Hampshire to help solve problems arising from the influx of French-speaking tourists from Canada.

Last summer, a tourist from Quebec tried to make a iong-distance call from a pay phone, and the operator invoked her high school French to tell him to press the coin return. But instead of saying "pressez" (press), she kept saying "embrassez." She was tolling hini. to kisj coin return. 5 Warren Anderson Softens His Position Find Boy's Body In S.I. Shaft Three youths exploring an abandoned shipyard in the Mariners Harbor section of Staten Island made a grisly discovery yesterday the hones of an unidentified boy, eight to 12 years old.

in a 50 gallon drum at the bottom of a 12-foot shaft. Police are iiwestiatjgPeiercLaagWiv "circuit breaker" for the elderly, a reduction in the home heating-oil tax and the mental hygiene portion of the budget. As for the circuit breaker, the GOP Senate is pushing to extend the provision to all homeowners. Under the plan, the owner's estate ttax tlrop his, tax.went.up..