"It seemed inappropriate to wake him and talk it over."--Digital Equipment Chief Robert Palmer on why he only E-mailed Intel's Andy Grove about DEC's lawsuit alleging Intel stole technology used in the Pentium chip's designEDITED BY LARRY LIGHTReturn to top
IS THIS TAX BREAK TOO SWEET TO DIE?
A LIFE-OR-DEATH BATTLE looms over some sweet dividend payouts. At yearend, tax breaks will expire for 30 so-called master limited partnerships, a hybrid between partnerships and publicly owned companies. The list includes ServiceMaster, Jones Intercable, Red Lion Inns, and the Boston Celtics.
But an influential bipartisan group of lawmakers, led by Senate Finance Chairman William Roth (R-Del.) and House Ways & Means member Amo Houghton (R-N.Y.), is pushing to make the break permanent. Houghton says it's only fair, since other limited partnerships get the same favorable
tax treatment. Foes, screaming "corporate welfare," repelled last year's lobbying. Now, though, proponents are more organized with a deadline looming. If they succeed, Lehman Brothers' Robert Willens expects MLPs will get a quick 20% stock-price surge.
With MLPs, the only tax is on the dividends paid to shareholders, who are technically partners. Profits aren't taxed, so MLP dividend yields far exceed the S&P 500's 1.8%. The Celtics' is 3.7, Red Lion's is 11.1.EDITED BY LARRY LIGHTReturn to top
WELCOME BACK, SENOR REICHMANN
PAUL REICHMANN IS BETTING again on Mexico. After delaying three major projects in the wake of the crippling 1994 peso devaluation, Reichmann is now proceeding with the most ambitious of the three: a 55-story, 800,000-square-foot steel and glass office building on Mexico City's prestigious Avenida de la Reforma. Called Chapultepec Reforma, the tower will be the capital's tallest.
This continues a comeback for the Toronto developer, whose real estate empire crashed in the early 1990s. Agents for Reichmann, who won't comment, are approaching potential corporate tenants about the new space, which should be ready by 2000 if construction begins this summer. Investor George Soros is Reichmann's partner in this foray, despite reports of strains between them.
While the financing has yet to take shape, people close to the deal expect the pair to fund big chunks of the $200 million needed. Mexico City has 3 million square feet of new office space sitting idle. But real estate experts believe Reichmann's high-quality building, helped by a recovering economy, will fill up quickly.EDITED BY LARRY LIGHT Geri Smith and William C. SymondsReturn to top
REED HUNDT MAY SIGN OFF AT THE FCC
THE FCC MIGHT LOSE ITS CZAR in August, say people close to the commission. Having slogged through telecom reform and championed bargain Internet rates for schools and libraries, Chairman Reed Hundt, 49, feels his work is done, the sources say, even though his term doesn't expire for another year. Hundt, who won't comment, has said in the past he'll finish his term. It's unclear where lawyer Hundt may be headed. But he is widely expected to join Al Gore's Campaign 2000 team.
Chief on the list of potential successors is Kathleen Wallman of the President's National Economic Council. Politically astute and connected, Wallman headed the FCC'S common carrier bureau in 1994 and 1995. Others are FCC General Counsel William Kennard and Susan Ness, a Dem appointee on the five-member FCC board.
A chairman won't be the only new face at the FCC. There soon will be three board vacancies to fill--two GOP, one Dem. Kennard is in the running for the Democratic slot. Harold Furchtgott-Roth, chief economist for the House Commerce Committee, and Michael Powell, son of Colin Powell, are Republican possibilities. The younger Powell is chief of staff for Justice's antitrust division.EDITED BY LARRY LIGHT Amy BarrettReturn to top