NEWSPAPER
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Crain's •
Kasle's 'blanking' plant minimizes defects PAGE 7
Downtown fitness market gains strength PAGE 22
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Traveling 'rumpled, drunk' loses deals PAGE 11
WEEK OF JUNE 17 - 23,1985 VOLUME 1 0 NO. 20
Two will win rights to pay-TV
Hall saves troubled developer BY MARY SOLOMON SMYKA CRAIN'S DETROIT BUSINESS
After spending 10 years working its way out of $81 million in debt, Detroit-based Homac Inc. will launch new phases for condominium developments in Rochester, Sterling Heights and Chesterfield Township. Bailed out with some $10.3 million from financial institutions owned by Craig Hall, the Dallas real estate tycoon who is locked in a battle for control of First Federal of Michigan, Homac says it will get back to the business of building condominiums. Included in those projects, said Kenneth Neal, Homac chairman and president, are new phases for Michigan condominium developments including Kings Cove in Rochester, Plumbrook in Sterling Heights, Raleigh Place in Chesterfield Township, and Forest Hills of Brighton. There are also plans for 200 new condominium units in Florida. Homac has submitted a site plan for 2,700 condos on more than 100 acres in Puerto Rico. A $100,000 lobby renovation is about to start in the Michigan Building, the Homac-owned office building at 220 Bagley St. where the firm is headquartered. The new life in Homac comes from a payment made last week in which the corporation satisified a debt for $16.9 million with $10.3 million in cash provided by two institutions owned by Hall. The $6.6 million difference was forgiven by the creditors. See DEVELOPER, PAGE 26 ~
BY BOB WILLIAMS WASHINGTON CORRESPONDENT
YANCEY HUGHES
A.h, Prix time, when the business world puts aside the financial pages, digs out the binoculars, and gears up to party. Wheeling-and-dealing shifts to hospitality suites on race weekend.
Business parties playa major part in Detroit's Grand Prix weekend BY BRADFORD WERNLE CRAIN'S DETROIT BUSINESS
Joe Fallon, owner of Fallon Ford in Chicago, was sitting in Ford Motor Co.'s Ford Division outdoor suite at the Grand Prix preliminaries last year, mixing business and pleasure. Fallon had positioned himself to see the race drivers shifting gears as they roared around a bend by the Renaissance Center. Seated next to him was an official from Ford's truck division. The dealer and the company man discussed a shortage of automatic transmissions for trucks and what they could do to promote sales of more fourspeed manual transmissions to fill the gap.
It was an opportunity Fallon said he seldom gets. "We must've sat there for 21/2 hours with the race cars running around," said Fallon. "He was getting my ideas, and I was getting his." If racing comes in first at the Detroit Grand Prix, then business partying isn't far behind. Some 40 companies rent 45 outdoor suites at the Renaissance Center and around the track for between $16,000 and $25,000 apiece. Other companies rent suites from the Westin and Pontchartrain hotels, which are on the race course, and still others have par-
See PARTIES, PAGE 25
WASHINGTON - More than 150 companies and individuals are lined up to get two franchises to construct four-channel "wireless cabie" television systems in the Detroit area. The Federal Communications Commission will conduct a lottery June 28 to select the two winners to serve the Detroit Standard Metropolitan Statistical Area, which includes the counties of Wayne, Oakland, Macomb, St. Clair, Livingston and Lapeer. The lottery is expected to heat up the race between Barden Cablevision, which has the cable franchise to wire the city, and so-called "wireless cable" companies. The more than 150 applicants for the "wireless cable" system range from individuals to major communications companies such as RCA and MCI Communications. . Wi!ele~s cable .technology, also called multipoint dIstnbutIOn serVIce or MDS, involves beaming encoded microwave signals to a microwave rooftop antenna. The scrambled signal is then channeled through- a decoding device supplied by the MDS company and can be viewed on any unused VHF television channel. The system does not need the substantial wiring system of cable television. The Detroit MDS franchises could be among the ~ost lucrative in the country since the city is behmd many other major U.S. cities in being wired for cable television. The city selected Barden Cablevision in August 1983 to serve its 471,000 households, the nation's seventh largest cable market. But Barden was unable to put together financing and negotiate a franchise See TV, PAGE 26
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Liability premiums soak bar owners BY CHARLES CHILD CRAIN'S DETROIT BUSINESS
Last November, Sal Salis opened a small, 35-seat bar in a shopping mall in Warren and paid $2,500 for a one-year insurance policy to protect himself against serving drunken custom- . ers. Although Salis has never been sued for improperly serving liquor, Cigna Insurance Co., the largest writer of commercial insurance in Michigan, has decided to cancel his policy in July. A new policy will cost $10,000, his insurance agent told him. "I can't afford $10,000," Salis said. "I'm baffled. I don't know what to do. I'm considering not paying and going without insurance." Salis and other owners of bars, restaurants and party stores are being squeezed by an impending crisis in Michigan. Many
major insurance companies, such has Cigna, have stopped writing liquor liability insurance in the state. "We have notified bar owners that we will not renew their policies at the expiration dates," said David Willis, spokesman for Cigna, which is based in Philadelphia. "The whole liquor liability environment is not one we can operate in without losing money." Willis estimated that his company will not renew policies for more than 500 bars and taverns throughout Michigan. He added that Cigna is still writing liquor liability insurance for Michigan restaurants. The three insurance companies that continue to offer policies for taverns are limiting coverage and raising prices 50 percent to 500 percent over last year, depending on the size or type of See PREMIUMS, PAGE 26
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DWIGHT CENDROWSKI
John Ruggiero is with Ryder/P-I-E Nationwide, one of the trucking companies hustling to cope with heated-up competition caused by auto firms' justin-time production schedules. Story, Page 3.~