Magazine article American Banker

Riggs among Losers as Disney's Theme Park Fizzles

Magazine article American Banker

Riggs among Losers as Disney's Theme Park Fizzles

Article excerpt

Add Riggs National Corp. to those disappointed by Walt Disney Co.'s decision to scrap plans for a historic theme park in northern Virginia.

Last week's announcement that Disney was backing down because of heated community opposition has dampened Riggs' short-term prospects for selling the 900-acre farm it owns near the entrance of the proposed project. The sale of Marsh Farms, whose value was written down after Riggs repossessed it, was expected to fetch a premium from a developer.

At least one analyst has cut his 1995 earnings estimate because plans for the park were scuttled. "I would say that any selling price would have to go down from here," said John Mason, banking analyst at Interstate/Johnson Lane in Atlanta. "We were looking for a [pretax] gain of as much as $10 million or more for Riggs next year."

On Friday, he slashed his 1995 estimate from 82 cents a share to 75 cents solely because of the Disney announcement. In trading Friday the company's shares closed at $10.187, down 31.2 cents.

"We continue to have interest [expressed] in the property," said David Lesser, executive vice president and general counsel at Riggs, the largest independent bank in Washington.

He could not say what the current value of the property is, or speculate on a possible sale or price. However, Mr. Lesser added, "Overall, it is an insignificant percentage of our assets."

Mr. Mason, who visited the property, last year had cited the possible sale of Marsh Farms as an example of how writedowns in Riggs' extensive Washington-area real estate portfolio left room for earnings surprises. …

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