| OCR Text |
Show KllsilllGSS br jsalt jCake Sribunr Thursday Morning Section C But Lot of Bargaining Ahead Developer ;On T arget W ith Block 57 tions about the company's plans in Salt Lake City After Mr. Crowleys piesentation. the chamber board voted unanimous- By Joe Rotunda Tribune Stuff Writer Williams Realty Corp. is "un target" with the negotiations necessary to begin developing Block 57, but is still involved in "a lot of bargaining" particularly over w hat is expected to be the first phase of the project, the First Security Bank high-risThat assessment came Wednesday from John F. Crowley III. Williams' vice president for development research. planning and design, before the board of governors of the Salt Lake Area Chamber of Commerce. He showed a slide presentation of other urban projects Williams Realty has developed and answered ques to resurrect a previously adopted motion to encourage development of ly Block 57. Mr. Crowley said lie and Mike Chitwood, director of the the Salt Lake Redevelopmenl Agency, feel comfortable they agreed on at least "a concept of the details during negotiations. But. without elaborating further, he said only "some of the numbers need to be ironed out." In December, the Salt Lake City Council, sitting as the city's Redevelopment Agency board of directors. gave Williams Realty Corp exclusive negotiating rights for Block 57 for DO days. When that time lapses on March 31. Williams Really is expected to have committed itself with a contract to develop the block, surrounded by 200 and 300 South and Main and State streets Williams Realty also is involved m negotiations with First Security Bank and the owner of the former J C. Penney Building with hopes to construct a high-risthere that would house many of the bank's offices, Mr. Crowley said construction of that building will comprise the first phase of the Block 57 project, and as such, will be an expensive undertaking e Big Announcement Expected Today Room at the Stale Capitol But Fred S. Ball, president and general manager of the Salt Lake Area Chamber of Commerce, said the announcement will come out of Sen Jake Garn's office Thursday Sen. Garn's office, however, said McDonnell Douglas has reserved time in Bonneville Internationals studios in Washington, D.C.. in order to broadcast its announcement at noon Thursday. Bill Hendrix, spokesman in the Republican senator's office, said Sen. a congratulatory Garn video-tapestatement Wednesday afternoon because he would be at the Pentagon attending a memorial service for the pilot of the space shuttle Challenger. Marian Siebenhaar, spokeswoman for the state's Division of Economic Development, said early Wednesday that McDonnell Douglas had reserved the Governor's Board Room at noon to make a major announcement. But Francine Giani. Gov. Norm Bangerter's press secretary, said no. d T-io- Hate Drops te - WASHINGTON (AP) cial markets dictate what can Inbuilt in Salt Lake Citv He added "As a number of ou know w ho are in the real estate development business, as long as you have a major tenant that will take an "X" percent of space they're i finan cial institutions! willing to finance it And I feel this is what is going to set the stage for Block 57 Mr Chitwood said Williams Realty is planning to develop the block over 15 years, which amounts to "a major long-tercommittment. And based upon all of our statistics we think the long-termarket is here (This is) not a quick fix Not at all. But to do the will take large financial project committments and time and I think we've got a developer here to provide . Douglas Bid Is Unofficially Official Bv Steven Oberbeck Tribune Staff Writer In what can best be described as a comic opera of the economic-developmevariety, the word is out that McDonnell Douglas has chosen Salt Lake City as an expansion site. But state and local officials, who on one hand seemed eager Wednesday to bask in limelight of having attracted a major project, also seemed hesitant to steal the company's thunder. Mayor Palmer DePaulis. who Tuesday said he was confident that Salt Lake City will be named as the site for a McDonnell Douglas expansion. Wednesday morning told the Roard of Governors of the Salt Lake Area Chamber of Commerce that he could only make the announcement unofficially. McDonnell Douglas is supposed to announce Thursday, as part of the state's economic development week, its intentions to locate a plant here. Mayor DePaulis said. But "there has been a very rigorous negotiation period between the city, the airport and McDonnell Douglas. Barring any unforeseen occurrences between now and Thursday they will be announcing. I've been very careful not to overstep my bounds of secrecy. I'm announcing this unofficially." McDonnell Douglas Corp. spokesman Dave Eastman was unavailable for comment Wednesday about what state officials said was the company's plans for a major news conference scheduled for Thursday that could be beamed into the Governor's Board Asked if there was j market for the office and retail space Block 57 would develop, Mr. Chitwood explained the city's RDA posture is to let the finan Yields on in Treasury notes fell Wednesday's auction to 8.97 percent, the lowest level in more than seven years. The Treasury Department sold $7 billion in notes with the average yield down from 9.54 percent at the last auction in November. that w as not the case. And Ms. Siebenhaar. who then contacted Ms. Giani. said she was wrong. Ms. Giani said Ms. Siebenharr probably shouldn't have said anything because "everything was supposed to have gone through me." Gov. Bangerter's only statement is that he is "optimistic" that Utah will be named. Ms. Giani said. She added the governor could probably "find some time" in his schedule Thursday if the company decides to make a major announcement. She said the governor's board room was reserved by Metro Utah, an organization of economic development representatives from 11 northern Utah counties. That meeting could "probably be interrupted" if an announcement is to be made, she said. confirmed Meanwhile, KSL-Tthat McDonnell Douglas has reserved time to make a broadcast from Washington. D.C., at noon and a spokeswoman said the signal could probably be picked up in the Governor's Board Room "if someone wanted to." All of this began on Jan. 16 when David Adams, the executive director of the Utah Department of Community and Economic Development reported in a public meeting that McDonnell Douglas was looking at a site near Salt Lake City International Airport for a new facility. He was unaware that a reporter was in the room. The department then contacted the local newspapers claiming that if word got out it could kill the project. . . both." Mr Crowley added because ol First Security's committment to ocfinancial institucupy the high-ristions will be more likely to lend money to develop and construct it lie added financial institutions are very conservative now. requiring at lest 50 to 60 percent of a proposed building to be leased before lending money for its construction. Mr. Crowley said there will likely not be another building on the block the size of the First Security high-risHe said most of the balance of Block 57 will include office space. Retail will comprise the amount of space, said Mr. Crowley. Mr. Chitwood said the RDA likely will have to subsidize the project with $5 million for the first phase of Block 57. He said the money will be generated from taxes on the new building. Mr. Chitwood said. "Right now we're negotiating (with Williams Realty) on how do you use that subsidy so Williams can come in complete that part of the obligation to First Security and still move forward in an economic and business like matter. next-large- "If more buildings are built., one of the things Williams is asking the agency is they want to come back and meet with the redevelopment board and the mayor and negotiate additional increments or additional subsidies." Mr. Crowley said inasmuch as Williams is "highly motivated" to build buildings as quickly as prudently possible. it is going to produce tax increments which could then be put back into the property. February (i, DJHIi Page 1 Oil's Fall Gives Boost To Economic Hopes Deter Coy AD Business Writer NEW YORK -- The continued plunge in oil prices lias lorced economists to rework predictions for 1986 that they prepared just weeks ago, and their for the U S and world economies have steadily brightened Cheaper oil should be a double blessing in 19116. helping hold down inflation anil promoting economic growth at the same time, saul in interviews this week The win gams are exactly opposite Irom the results ol the tug oil price jumps of the 1970s, which created a malaise ol simultaneous inflation and recession that was dubbed stagflation "Its basically a $10 billion gift to the United States economy." said John Hagens, a vice president of Chase Econometrics Inc an economic research firm in Bala Cynwyd. Da The savings on the D.S. oil import hill could be even greater than $10 billion because that estimate is based on an average price lor crude oil of a little more than $20 a barrel, and spot prices have dipped well below that level in recent days On Wednesday, the price of oil in the open market rose Irom the seven-yea- r lows of the previous day Major grades of crude Irom the United States and North Sea. which were falling toward $15 a barrel on Tuesday, hoered around $16 The fear of economists and bankers is that prices are lulling too quickly, allowing too little time for the losers in the game to cope with the shock. In the United States, losers include the oil industry - fort-cast- s econo-mist- s I . and those dependent on it. as well as banks that have lent heavily to U.S. oil producers and Third World nations like Mexico and Venezuela Some economists also worry that cheap oil could lull importers like the United States into abandoning conservation measures, thus boosting world demand and giving the Organization of Detroleum Exporting Countries a chance to reassert Us power in a few years In spite of such concerns, though, economists share the enthusiasm over oil prices that has pushed the stock and bond markets into strong rallies. "I take this as very good news. It gives us management problems. but on balance it is very good news," said Robert Lawrence, senior fellow at the Brookings Institution in Washington. D C. Each $5 drop in the price of a barrel of crude oil translates into a of 1 percent in U.S. economic output and a gain of percent reduction in consumer prices, estimates Data Resources Inc., a forecasting firm in Lexington. Mass. To reflect the downward spiral in spot markets. Data Resources and Chase Econometrics both reworked their 1986 economic forecasts last week using lower projections for oil prices. Consumers should see the benefit of cheaper crude not unly in cheaper gasoline and heating oil. but in lower interest rates, economists say. With oil so cheap, the Federal Reserve Board can afford to boost the economy through easier credit without worrying about rekindling inflation, they say. In fact, unless the Fed lowers interest rates, severe hardship in the oil, mining and farming sectors could drag the whole U.S. economy down, argues Wayne Nordberg. an economist for the investment firm Drescott Ball & Turben Inc. in New York. Cheaper oil also comes at a good time for the currency markets. It helps offset the potential inflationary impact of the dollar's continuing decline against foreign currencies like the Japanese yen. The lower dollar benefits U.S. manufacturers by making their goods more competitive with foreign goods, but hurts consumers by causing them to pay more for imports. Lower oil prices offset the loss, economists say. 1 six-tent- Whats behind the second name on yonr checks? ,UHX H. Mill EKV ,Wk" '""VCiXMWtoi pay to the r V'N7, first j, 'TOHoVt For i 'I1 . ? oo oTs'i: name on your checks is yours second name on your checks is your institution. What stands behind it? If it s First Interstate Bank, it s the convenience and service of III offices in Utah anil more than l.illltl offices system-wide- . There's a First Interstate branch near you. with a Customer Nervier Rrpirsentutivr who is anxious to help vou add your good name to ouis The oi First Interstate Bin-- ; Member I Dll |
