(Continued from previous page) warned that the impression being fostered in the press was that there was a personal feud press between Mr. Gray and Mr. despite the fact the two had never

And he said that meant it was especially aportant to maintain the appearance of fairness and professionalism in the :xamination.

The Senators said they did not want any special treatment for Lincoln.

The savings and loan association is chartcred in California. The fact that the S&L isa 218-chartered institution is at the basis of claim of exemption from the FHLBB estment regulations.

Its parent, American Continental Corp., is incorporated in Ohio with headquarters in Phoenix, so the four Senators each could claim the institution as a constituent.

Nevertheless, eight former regulators said contacts by even one Senator on an instituon't behalf are rare.

"In fact, we almost never heard from a Senator. Most of the time it would be a House member that would make a call :rying to get us to speed up action on an Application or approve something that was Controversial, according to one former FHLBB member.

"Sometimes we briefed a committee chair-" on something we were about to do,"a ormer bank regulator said. "But that was a rey to keep them from being surprised. It would be unheard of for a member of he Senate to be involved in the regulatory process at all," he added. Mr. Cirona at the meeting reportedly sold the Senators that he meeting was very unusual.

The Senators, according to the confi source, offered statements on Linngs as evidence that the institution gone a change for the better since wing taken over by ACC is 1984.

The FHLB officials responded that Lincoln a fast mot its not worth minimum when it as acquired by ACC-albeit after some ifficult years due to high interest rates—but at the write off mandated by their exami...on would have Lincoln with a regulatory - worth of $25 million.

ACC Sells Servicing

DENVER.-American Continental Mortgage Co., Phoenix, now has sold most of its mortgage servicing portfolio.

Megapolitan Mortgage Co. bere bought $370 million in servicing, primarily from American Continental, to bring

politan's portfolio to $650 million. merican Continental Mortgage Co. is a of American Continental Corp., parent. ✓ Lincoln Savings and Loan Association, rvine, Calif.

Between them, American Continental Mortgage and Lincoln had a portfolio of .700 million of year-end 1986.

That portfolie is reportedly down to Our 51 mition, as American Continental oves to get out of the servicing business.

SNL Securities, Hoboken, N.J., working from Securities and Exchange Commission filings and annual reports, lists Lincoln's assets at 53.2 billion as of December 194, and says the arts have increased to $4.5 billion as of year end 1986.

Income during that period increased from $20.5 million for 1984 to $24.3 million after taxes for 1986.

Still refusing to verify any meeting took place. Mr. Kielty indicated that there has been no change in the pace of the examination process since last April.

He mid the audit which began in March. 1986, was still underway.

"It's never been sped up, "he said. "It's sull in process."

A spokesman for Sen. Glenn said he

Page 43

would have ae comment on the meeting.

Mr. Cirona, acting a suit by Lincoln over the release of an examiners report to Regardie's magazine early this summer. released the following statement in response to NTN's inquiries about the meeting with the Senators:

Shortly after a new chairman was appointed to the FHLBB this summer. Lincoln opted to withdraw its lawsuit against the board concerning alleged leaks of confidential information. Since that time. Lincoln has been engaged in a dialogue with Back Board personnel. The board has a policy recently reemphasized by the new chairman against the release of information relating to the supervisory process and consequently does not comment publicly about such matters."

NEW YORK-Lincoln Savings and Loan Association is facing a significant loss on the $300 million Phoenician Hotel which is set to open its doors in Phoenix in late 1988 according to a Federally ordered appraisal, confidential sources have said.

Moreover local real estate experts in Phoenix say the 606-room Phoenician, which is being marketed as a destination. resort, faces a tough road to success in an already crowded hotel market.

The source, who did not place a price tag on Lincoln's loss on the two-year old project, said regulators ordered an inde pendent reappraisal on the Phoenician.

The source said Lincoln, based in Irvine, Calif., has issued a rebuttal to an earlier appraisal by regulators at the Federal Home. Loan Bank of San Francisco.

At press time Lincoln's parent American Continental Corp., which is building the hotel through its Crescent Hotel Group. would say little about the project.

Robert J. Kisly, general counsel at Lincola Savings, contested statements that the company had when a loss on the project. "We have never been asked to take a writedown on it," he said.

Mr. Kielty said final costs are not in, but said the project's cost is in excess of $250 million. Overall it's going to be a quality resort."

He said the hotel is being financed by ACC, its majority owner. He declined to identify other investors in the project, saying you're asking me about a lot of confidential business matters that I can't comment on."

Built on 130 acres where Phoenix borders Scottsdale, the hotel will have to charge $40G per night at an occupancy rate of 60% to cover an estimated construction cost of more than $400,000 per room, consultants my.

During the peak months of January to April, Arizona's most expensive destination resort-self-contained and including world class golf courses and other amenities-the

Boulders Resort in Carefree, charges a maximum of $340 per night for double оссировку.

Prices at other destination resorts in the

estimated completion date & room rental

state range from a low of $180 per night at the Arizona Biltmore in Phoenix, to a high of $250 per night at the. Western La Paloma, Phorais.

Robert Hazard, a senior consultant with Pannell Kerr Forster, an accounting firm that specializes in commercial appraisals. said that for every $1,000 you spend you need to charge $1.20 on average rental

Mr. Hazard said the "numbers are all over the place but I've heard cost per room at around $250,000. Even at $250,000 per room, economies would dictate that you should not build a hotel that costs that much

Because of a hotel glut PKF is predicting a 55% occupancy rate for Arizona botels in 1908. This year the average is expected to be around 65%

On average hotel rooms in the state. including destination resorts, rent for $118 per night.

Mr. Hazard said "it's likely they have trouble. The competition is stiff. A lot of the

draw depends on the golf courses. The Phoenician will have great room services and other products to offer but their golf course (is) substandard relative to some of the other destination resorts."

Mr. Hazard noted that another ACC hotel, the Crescent, which opened earlier this year "hasn't exactly been setting the world on fire" as far as occupancy rates are concerned.

Richard Warrick, a consultant with Laventhol & Horwath, who has worked or the project for Lincoln's affiliate, the Crescent Hotel Group, said "there has been talk the costs of the project have been high but there's no way to confirm this."

He said he could not comment on the project because Lincoln is a cbent of the firm.

"Keep in mind that all hotels have a tough time in the early years and it can take threeto-five years to stabilize its business."

- Paul Muolo

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