Daily News from New York, New York on December 3, 1980 · 33
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Daily News from New York, New York · 33

New York, New York
Issue Date:
Wednesday, December 3, 1980
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4 33 am IHie avera's ate mraaEce ahuoh ye? By BERNICE KANNER Marketln Columnist Can "Heaven's Gate" do as well as "Cleopatra"? Certainly, Michael Cimino's $40 million (so far) film disaster has now become the most expensive bomb in movie history. But in 1963, when the $41 million Richard Burton-Elizabeth Taylor remake of "Cleopatra" was released, stockholders and 20th Century-Fox management fretted about the damage the most expensive piece of celluloid yet made would do to the company's bottom line. The frenzy intensified as Fox executives poured millions beyond the $6 to $8 million planned for the spectacle into its production. For instance, $1 million was spent just for Caesar's barge, which after construction was found to be too deep for the shallow Italian waters in " which the scene was set. Indeed, there was little optimism that the movie, at the time regarded as the queen of excesses, could ever recoup the $31.1 million spent on production and another $10 million spent to distribute, promote and print it. As it turned out; there was no cause for alarm. The studio more than made back its money within three years, because the film had what financial analysts call "secondary properties." That is, it had big stars (who added box-office appeal by falling in love during the filming) and a big story properties that helped Fox subsequently sell it for $5 million to ABC. In reality, a lot of Hollywood clunkers have turned out to be less clunky than they initially seemed. Columbia Pictures and Universal -.Studio chipped in $37 million last year on "1941," a movie starring John Belushi that bombed at box offices here, but sold briskly overseas. Universal and Belushi also teamed up for another initial loser, See HEAVEN Page 36 t n i. f Cimino: is his bomb unique? higher Prime up point to 1812 By JOHN F. SIMS The prime lending rate that banks charge their best corporate customers today jumped another three-quarter point for the third time in less than two weeks to 18Vfe. And the upward pressure on interest rates, which ultimately reach down to the consumer in the form of higher prices and more expensive personal loans, is not over despite the damage it has already done to the economy. Albert H. Cox, chief economist for Merrill Lynch, said today the prime "probably won't peak until it hits about 20." Another economist, Ben Laden of the T. Rowe Price investment house, agreed: "Interest rates are probably within a month of peaking. The prime could go to 20 and that would be relatively soon." Government officials went along with those gloomy predictions. - ' , - See PRIME RATE Page 37 20 ' 19 Lrirnf :m, tWTA 1B12 16 j 0Z$L 1980 nrf 13 'vM)mL 12 JJffff 1 1 ' r" 'i 11 I" i i ' i ""I " i A M J J A S O Nov. D even Consumer rates rising to 19 By MARGARET LOEB Consumers had nowhere to turn today as banks in New York, freed from interest-rate ceilings by a new state law, added as much as 6 to their consumer loan interest rates jumping them to 19 for something as basic as a car loan. Sources of reasonable loans are drying up fast. For the time being, consumer loan rates in New Jersey still have a state-imposed ceiling of 13 but a random survey showed that New Jersey Banks generally have closed their lending windows anyway. The New Jersey Senate is scheduled to vote next week on an Assembly-approved bill that would allow the state banking commissioner to peg rates anywhere between 12 and 21. - "Any bank president who pursued new loan customers under the present economic conditions would quickly find See CONSUMER RATES Page 37 B of A's young man By BARBARA ETTORRE Sam Armacost was on such a fast track at the Bank of America, that his train was bound for glory And roll in it did. Yesterday, at the age of only 41, Armacost was named president and MAN IN chief executive of-ficer of the world's THE NEW5 largest bank, effective April 21. That he would end up on top he is also president of Ban-kAmerica Corp., the bank's holding company surprised no one, although there had been some speculation that he would not get the chief executive's job right now. But his rival for the job, Leland S. Prussia, 51, was promoted from vice chairman to chairman, clearing the way for Armacost to succeed A.W. (Tom) Clausen, who will follow Robert S. McNamara as president of the World Bank on July 1. SAMUEL HENRY Armacost, who was named for a grandfather who St Samuel H. Armacost died a week before his grandson was born, is universally acclaimed as one of the brightest executives the bank has ever produced. Clausen exercised a fine hand in the naming of Armacost, considered a first-rate executive with credit, lending and international experience.. However, he lacks consumer banking expertise which some call the potential bedrock of bank financing in the next two decades. See ARMACOST Page 34 Key Times Square Eiofe clears Bast legal torclSe By RANDY SMITH The proposed giant Portman Hotel, central to hopes for a Times Square revival, cleared its last legal hurdle today when the Manhattan State Supreme Court okayed withdrawal of a lawsuit against it by owners of the Piccadilly Hotel. The $260-million, 2,020-room hotel first proposed in 1973 by Atlanta hotel magnate John Portman would rise 50 stories on the west side of Broadway between 45th and 46th streets. Portman will buy the 600-room Piccadilly on 45th St. for an undisclosed price and tear it down. The deal gives him clear title to the last 15 of the site, stretching three quarters of the way from Broadway to Eighth Ave. "When the new hotel is built, it will change Times Square radically for the better," Mayor Koch said in announcing the deal, saying he was "very pleased that a major hurdle" to the development has been overcome. The out-of-court settlement was reached just two days before the city's Board of Estimate is to consider raising a pending request for a federal Urban Development Action Grant for the project from $15 million to $21.5 million. City planners have been counting on the Portman project to spur more development to the west of Manhattan's built-up midtown commercial core. Barring new hangups, Portman hopes to break ground in mid-1931 and finish 33 months later. Actors Equity, the theatrical union that fought the project because Port-man also plans to raze the Morosco, Bijou, and Helen Hayes theaters, also withdrew its objections as part of the Piccadilly settlement, a Portman spokesman said. The Piccadilly owners had sued to block the use of federal funds for the project. It remains unclear whether landmark advocates, who have also opposed the loss of the three theaters, will bring a legal action oftheir own. The plans for the Portman call for it to contain one new legitimate theater.

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