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To: Skeeter Bug who wrote (134282)	11/6/2001 9:26:04 PM
From: H James Morris	Read Replies (1) \| Respond to of 164684

SB, buy on the bad news, sell on the good news. >The US central bank has cut interest rates by half a percentage point to 2%, the lowest rate in 40 years. Following the cut, the cost of borrowing in the US has fallen sharply below the annual rate of inflation, currently running at 2.6%. Borrowing of money is therefore, in effect, subsidised. This, the US authorities hope, should encourage consumers to spend more money and businesses to re-launch investment projects shelved as the economy began to turn down earlier this year. This was the 10th time the Federal Reserve, under chairman Alan Greenspan, cut rates this year as part of its efforts to boost the flagging US economy. The Fed's decision to cut was unanimous. President George W Bush's government has also attempted to boost economic growth by increasing government spending and by pushing a multi-billion dollar tax relief and industry bail-out package through Congress. Taken for granted Ahead of the cut, a slew of downbeat economic data had led many observers to predict the Fed's decision. Last week, official figures showed that the US economy shrank for the first time in eight years during the three months to September, contracting by 0.4% and shedding nearly half a million jobs. Separate data showed that US consumer spending, which has been credited with keeping recession at bay, posted its sharpest monthly decline in 14 years after the 11 September terrorist attacks. In a poll carried out by the Reuters news agency, 15 out of 24 analysts predicted a 0.50% cut, while the remainder forecast a 0.25% reduction.

To: Skeeter Bug who wrote (134282)	11/7/2001 9:22:31 AM
From: H James Morris	Read Replies (1) \| Respond to of 164684

SB, it's all about timing...don't you think? >November 7, 2001 A Palm Springs owner of luxury resorts has reached a deal to buy La Costa Resort and Spa, a well-known but tired Carlsbad resort in need of millions of dollars in renovations. KSL Recreation Corp., which pursued La Costa for about two years, expects to complete the acquisition by the end of this month. KSL owns eight other resorts, including Doral Golf Resort in Miami and the Arizona Biltmore in Phoenix. Scott M. Dalecio, president of KSL's resort division, declined to say how much KSL is paying for the 479-room La Costa. But hotel industry officials say it's probably much less than the $250 million paid by Sports Shinko of Japan when it acquired La Costa in 1987. Sports Shinko, a holding company that owns golf courses in Japan, Hawaii and elsewhere, bought La Costa at a time when Japanese companies were gobbling up well-known hotels and golf courses across the U.S. "They bought at the worst time for the highest possible price, so they ended up with a property that, more than a decade later, isn't worth what they paid for it," said Robert Rauch, managing director of the West Coast office of InterBank-Brener, a hotel advisory firm. Officials at La Costa and Sports Shinko could not be reached for comment. La Costa, which hosts a PGA golf event and Acura Classic women's tennis tournament, enjoys a nationwide reputation. While it once ranked among San Diego's elite getaways, the resort now has deteriorated and lags behind new competitors such as Four Seasons Aviara. Sources familiar with the deal said La Costa Corp., a subsidiary of Sports Shinko that operates La Costa, recently negotiated an extension on a major debt payment due in October. Dalecio said KSL plans to give the La Costa a face lift, starting with the rooms and spa. "We'll renovate the spa completely, then the common areas, do some work on the golf course and look at the lobby and the restaurant," he said. "We've allocated millions of dollars to this property over the next couple of years. We're going to renovate it into an upper four-star or five-star level that's deserving of its brand." Founded in 1992, KSL has a history of buying struggling properties. In 1993, KSL picked up La Quinta Resort for $136.4 million and PGA West for $140 million. Both Palm Springs resorts were auctioned off by the Resolution Trust Corp. as part of the savings and loan debacle. KSL also acquired the Grand Wailea Resort in Maui, built for $600 million in 1990, for a bargain price reportedly between $275 million and $310 million. The company also owns Claremont Resort & Spa in Berkeley, Doral Golf Resort in Miami, Emerald Pointe Resort in Atlanta and Grand Traverse Resort in Michigan. Last year, KSL acquired the Arizona Biltmore for $343.3 million. "This is a company that operates like a Four Seasons, but without a brand name," Rauch said. "What they do is buy properties that already have a brand name. An example is the Arizona Biltmore. People who go to resorts know that the Arizona Biltmore has been a five-star resort for a long, long time." The "K" in KSL stands for New York leveraged buyout specialist Kohlberg Kravis Roberts. Other partners are Michael Shannon and Larry Lichliter, who helped build Vail Associates into a leader in the ski resort business. KSL wasn't alone in courting La Costa. Sources say Toronto-based Fairmont Hotels & Resorts had been the leading candidate until a few weeks ago. Fairmont officials declined to comment. Several sources speculate that KSL paid anywhere from $120 million to $150 million for La Costa. Part of the reason the price is so much lower than what Sports Shinko paid is the pending renovation costs, sources said. Rauch estimates that restoring La Costa to its former luster would take $50 million to $80 million. "KSL will return La Costa to its pre-eminence as a great asset for San Diego North," Rauch said. Included in the sale is a 4-acre parcel west of Highway 101 near La Costa Avenue that was owned by Sports Shinko. The property has received approval from the city of Encinitas for a 131-room beachfront hotel. "We'll continue the planning process but we have no immediate plans for that property," Dalecio said. La Costa employs 790 workers, of which 490 are unionized. KSL is honoring La Costa's labor contract and offering these workers jobs. Non-union workers must reapply for their positions. Opened in 1965, La Costa was developed in part with $57 million in loans from the controversial Teamsters Central States Pension Fund. It received publicity in 1975 when an article in Penthouse magazine characterized the resort as a hangout for organized crime figures.