Digest/kanter/22″/dt1st/mark2nd
Boeing Delays 737 Production
In a potential blow to the local economy, Boeing Co. has delayed the start-up of a new 737 jetliner assembly line in Long Beach and is reconsidering the project altogether.
Stung by heavy losses due to production problems and the economic woes in Asia, the Seattle-based aerospace giant recently announced a series of cost-cutting measures, including job cuts and consolidation of many of its various operations.
Two months ago, Boeing pledged to add a specialty 737 line at the former McDonnell Douglas facility in Long Beach, a move that would have saved 600 manufacturing jobs in the area. The workforce there was to begin assembling the aircraft later this month, with delivery deadlines in 1999. Now, the start of the new line has been delayed until at least February.
L.A. Launches Olympic Bid
A coalition of some of the city’s top business and civic leaders has mounted an ambitious campaign to host the Olympic Games in 2012.
The campaign is being coordinated by LA2012, a non-profit group whose 61-member board includes 1984 Olympics organizer Peter Ueberroth, as well as the heads of Atlantic Richfield Co., Walt Disney Co., Southern California Edison Co. and the Los Angeles Dodgers. The L.A. City Council has gone on record in support of the drive, as has Mayor Richard Riordan.
The group’s first goal is to convince the United States Olympic Committee to back Los Angeles as the nation’s nominee to the International Olympic Committee, which will decide on the 2012 games in 2005. Eight other cities including Dallas, San Francisco, Houston and Seattle also are vying for the nomination.
Coliseum Unveils Finance Plan
With the Oct. 27 NFL owners meeting fast approaching, rival development teams seeking to bring professional football back to the Coliseum released long-awaited details of their financial plans.
The cost of a new football stadium at the Coliseum site was set at $357 million, with developer Ed Roski Jr. pledging to borrow $217 million toward construction, according to details released last week. The plan will rely on $40 million in public money, $100 million in personal seat licenses and the highest-priced luxury suites in the NFL. Roski also announced that he will be the controlling partner in the operation, rather than Philip Anschutz, his partner in the Staples Center arena for the Lakers and Kings.
The city of Carson, meanwhile, is considering contributing as much as $100 million to a proposal led by deal maker Michael Ovitz to build a 157-acre sports and retail complex at an abandoned landfill near the intersection of the Harbor and San Diego freeways. Ovitz also sought to allay fears of environmental contamination at the site, announcing that it can be made usable and safe for about $35 million, according to a plan approved by the state Department of Toxic Substance Control.
At Tuesday’s meeting, NFL owners also will hear a proposal by Houston. A franchise is expected to be awarded in 1999, with play to begin in 2001 or 2002.
MTA Predicts Windfall
The Metropolitan Transportation Authority is projecting that it will have $1 billion more than expected to help stabilize its finances and fund bus improvements and highway and mass transit projects.
The bulk of the additional money comes from a multiyear highway and transit bill passed by Congress this year, which freed up funds from the federal gasoline tax and made them available for transportation. The MTA also has benefited from a jump in revenues generated by L.A. County’s 1 percent transit sales tax.
The fiscally troubled agency, however, is not yet out of the woods. It still has a $7 billion debt and faces a projected $140 million shortfall in the amount of money required to operate its buses and trains over the next several years.
PolyGram Talks Resume
After walking away from the bargaining table two weeks ago, Metro-Goldwyn-Mayer Inc. and Seagram Co. Ltd. have revived talks over the sale of PolyGram Filmed Entertainment’s movie library.
MGM owner Kirk Kerkorian backed out of negotiations when the parties were unable to agree on the price and structure of a deal to sell the 1,500-title library.
Kerkorian originally offered nearly $400 million for the library, with plans to sell a portion of the catalog to Britain’s Carlton Communications for $100 million. Seagram said it was not interested in slicing off pieces of the library to different buyers, but under financial pressure to unload PolyGram’s assets, is said to be reconsidering Kerkorian’s all-cash offer.
Home Price Hikes Slow Down
Home prices and sales in Southern California continued to climb in September, but at a slower rate than in previous months, suggesting that consumers are growing more conservative amid an increasingly uncertain economy.
The median price of homes in September rose 7.6 percent, to $185,000, compared to the same period in 1997, according to the research firm DataQuick. Sales were up 17.4 percent.
In July, by contrast, sales soared 31.4 percent on a year-over-year basis, while sales were up almost 12 percent.
City to Refurbish Industrial Site
Armed with a $3 million federal grant, Los Angeles officials are planning a major renovation of the former Goodyear Tire Tract in South Los Angeles, the largest industrial site in the city.
The money will be used to fence the 208-acre site and install lighting, security cameras and guard kiosks. Another grant is pending for environmental cleanup.
About 120 businesses mostly furniture manufacturers, metals processors and garment shops currently operate on the property’s 281 parcels. City officials hope the improvements will lure high-tech firms to the site, which is part of a business tax-free zone and a federal empowerment zone that offers benefits to firms that hire locally.
Larry Kanter
