1
 Santa Fe Pacific Corp. is preparing a plan 
5001
span

2
to sell a 20% stake in its large real estate unit to a California public employee pension fund for $400 million, 
1
elaboration-object-attribute-e

3
after which it would spin off the realty operation to shareholders.
5001
temporal-after

4
 The plan places an indicated value on the real estate operation, Santa Fe Pacific Realty Corp., of $2 billion.
5004
span

5
 Santa Fe Pacific directors are expected to review the plan at a meeting today, 
5005
span

6
according to people familiar with the transaction.
5
attribution

7
 If approved, 
5007
condition

8
the sale is expected to close by year's end, 
5007
span

9
with the spinoff occurring by the end of 1992.
8
elaboration-part-whole

10
 In composite trading on the New York Stock Exchange yesterday, Santa Fe Pacific closed at $20.625, down 25 cents.
5008
List

11
 Santa Fe Pacific Realty is a major California land and building owner 
5010
span

12
whose prime properties include 1,850 undeveloped acres in the San Francisco Bay area, and several office sites.
5011
span

13
 A spokesman said 
5014
attribution

14
the properties survived 
5013
span

15
without significant damage 
14
elaboration-object-attribute

16
in last week's Northern California earthquake. 
5014
Same-Unit

17
 As a result of the partial sale and spinoff, 
18
cause

18
the $56 billion California Public Employees Retirement System would obtain two seats on the board of the real estate operation, 
5016
span

19
according to officials of the fund, 
5018
span

20
who described the plan.
19
elaboration-object-attribute

21
 A spokesman for Chicago-based Santa Fe Pacific confirmed 
22
attribution

22
that negotiations were being held with the fund.
5020
span

23
 Also holding two seats each on the board, 
5022
span

24
they said, 
23
attribution

25
would be Olympia & York Developments Ltd., 
5024
span

26
controlled by the Reichmann family of Canada, 
25
elaboration-object-attribute-e

27
and Itel Corp., 
5025
span

28
controlled by Chicago businessman Sam Zell. 
27
elaboration-object-attribute-e

29
The Reichmanns and Mr. Zell, the largest holders of Santa Fe Pacific stock, have been looking for ways 
5027
span

30
to raise the value of their investments, 
29
purpose

31
including possible spinoffs.
5027
elaboration-part-whole

32
 Itel bought a 17% stake in Sante Fe Pacific last year 
5030
List

33
and Olympia & York later purchased about a 20% stake; 
5030
List

34
they would have interests in the new realty company in line with their holdings in Sante Fe Pacific.
5031
span

35
 The sale and spinoff of the real estate unit is the first phase 
5034
span

36
of what could lead to the breakup of Santa Fe Pacific into free-standing companies for its railroad and energy operations, as well as real estate.
35
elaboration-object-attribute-e

37
 The debt-laden parent has been under pressure from large shareholders 
5036
span

38
to boost the company's share price.
37
purpose

39
 At the same time it has been caught in an earnings squeeze.
5036
temporal-same-time

40
 The California pension fund's planned investment in the real estate unit is unusual.
5039
span

41
 Pension funds rarely own as much as a 20% stake 
5040
span

42
in what is expected to be a publicly traded company.
41
elaboration-object-attribute-e

43
 In addition, pension funds are rarely given seats on company boards 
5042
List

44
and most often try to avoid them 
5042
List

45
because of legal concerns.
5042
reason

46
 But fund officials said 
5046
attribution

47
the Santa Fe Pacific Realty investment provides an opportunity 
5046
span

48
to buy a stake in a large real estate portfolio 
5047
span

49
heavily weighted with California properties.
48
elaboration-object-attribute-e

50
 It also marks a major commitment to {real estate} development, 
5049
span

51
which we haven't been involved with before, 
50
elaboration-object-attribute-e

52
said Dale Hanson, the fund's executive director.
5049
attribution

53
 Under the proposed plan, the fund would also lend Santa Fe Pacific Realty $75 million in the form of a note 
5052
span

54
that would be convertible into additional shares of the realty company after the second year at the then-prevailing market price.
53
elaboration-object-attribute-e

55
 The note would accrue interest at the rate of 13.5% a year, 
5054
span

56
which would be payable to the fund after five years, 
55
elaboration-object-attribute-e

57
according to Stephen E. Roulac, a real estate consultant 
5056
span

58
working for the fund. 
57
elaboration-object-attribute

59
 The purpose of the note is to provide added capital for the spun-off company in a form 
5058
span

60
that will save it spending cash on immediate interest payments, 
59
elaboration-object-attribute-e

61
Mr. Roulac said.
5058
attribution

62
 The spun-off concern clearly will be one of the dominant real estate development companies with a prime portfolio, 
5061
span

63
he said.
62
attribution

64
 For the last year, Santa Fe Pacific has redirected its real estate operations toward longer-term development of its properties,
5063
List

65
 hurting profits 
5064
span

66
that the parent had generated in the past from periodic sales from its portfolio.
65
elaboration-object-attribute

67
 Real estate operating income for the first nine months fell to $71.9 million from $143 million a year earlier, 
5066
span

68
the company said.
67
attribution

69
 In a statement late yesterday, Santa Fe Pacific's chairman, Robert D. Krebs, said 
5070
attribution

70
that Santa Fe Pacific Realty would repay more than $500 million in debt 
5069
span

71
owed to the parent 
70
elaboration-object-attribute-e

72
before the planned spinoff.
5070
Same-Unit

73
 That would help reduce Santa Fe Pacific's remaining debt to about $600 million from a high of $3.7 billion in early 1988.
5068
result

74
 It wasn't clear where Santa Fe Pacific expected to obtain the payment of more than $500 million, 
5073
span

75
which would be well above the $400 million 
5074
span

76
that 
5075
span

77
California pension fund officials say 
76
attribution

78
they plan to provide.
5076
Same-Unit

79
 The realty unit might take on new debt or obtain additional investors, among other possibilities. 
5077
List

80
The Santa Fe Pacific spokesman declined to comment on that aspect, 
5077
attribution-n

81
saying 
82
attribution

82
the deal was still under negotiation.
5081
span

83
 Santa Fe Pacific Realty owns 2.8 million acres of property, 
5083
span

84
including 219 buildings with more than 11 million square feet of space.
83
elaboration-part-whole

85
 It also holds nearly 40,000 acres of raw land with development potential, 
5085
span

86
but under a previously announced strategy, the company has targeted building on 5,400 acres in California, Arizona and the Chicago area.
5086
span

87
 Among those are the 1,850 acres in the San Francisco Bay area,
5087
span

88
 including 208 acres in the Mission Bay area.
87
elaboration-part-whole

89
 The California pension fund, 
5089
span

90
which has $16 billion 
5090
span

91
already invested in real estate and mortgages, 
90
elaboration-object-attribute-e

92
could be a valuable funding source for that development, 
5091
Same-Unit

93
although it isn't obliged to make further investments. 
5091
antithesis

94
The fund is the nation's largest public employee fund,
5094
List

95
 and it has a growing cash flow 
5095
span

96
now topping $3 billion a year.
95
elaboration-object-attribute-e

97
 Fund officials negotiated the final structure of the proposed deal with Santa Fe Pacific, 
5096
span

98
but they were approached with the idea by real estate brokers JMB Realty Corp. of Chicago.
97
antithesis

99
 JMB officials are expected to be hired 
5098
span

100
to represent the pension fund on the Santa Fe Pacific Realty board, 
99
purpose

101
Mr. Roulac said, 
5098
attribution

102
to insulate the fund from potential liability problems.
5101
reason

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5002
span

5002
span
5003
span

5003
span
5009
span

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span
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List

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span
4
elaboration-additional

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span
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List

5007
span
5006
span

5008
multinuc
5002
elaboration-additional

5009
span
5033
span

5010
span
5015
span

5011
span
11
elaboration-object-attribute

5012
span
12
elaboration-part-whole

5013
span
5014
Same-Unit

5014
multinuc
5012
span

5015
span
5019
span

5016
span
5017
span

5017
span
5010
result

5018
span
5016
attribution

5019
span
5003
background

5020
span
5021
List

5021
multinuc
5015
elaboration-additional

5022
span
5023
Same-Unit

5023
multinuc
5026
span

5024
span
5023
Same-Unit

5025
span
5023
Same-Unit

5026
span
5032
span

5027
span
5028
span

5028
span
5023
reason

5029
span



5030
multinuc
34
reason

5031
span
5026
cause

5032
span
5021
List

5033
span
5062
span

5034
span
5035
span

5035
span
5038
span

5036
span
5037
span

5037
span
5034
explanation-argumentative

5038
span
5051
span

5039
span
5044
span

5040
span
5041
List

5041
multinuc
40
elaboration-additional

5042
multinuc
5043
span

5043
span
5041
List

5044
span
5035
background

5045
span
5048
List

5046
span
5045
span

5047
span
47
elaboration-object-attribute-e

5048
multinuc
5039
antithesis

5049
span
5050
span

5050
span
5048
List

5051
span
5009
elaboration-additional

5052
span
5053
span

5053
span
5038
elaboration-additional

5054
span
5055
span

5055
span
5057
span

5056
span
5054
attribution

5057
span
5060
span

5058
span
5059
span

5059
span
5055
purpose

5060
span
5052
elaboration-additional

5061
span
5057
evaluation-s

5062
span



5063
multinuc
5067
span

5064
span
5065
span

5065
span
5063
List

5066
span
5064
evidence

5067
span
5088
List

5068
span
5071
span

5069
span
5070
Same-Unit

5070
multinuc
5068
span

5071
span
5072
span

5072
span
5082
span

5073
span
5077
List

5074
span
74
elaboration-object-attribute-e

5075
span
5076
Same-Unit

5076
multinuc
75
elaboration-object-attribute

5077
multinuc
5079
span

5078
span



5079
span
5080
Contrast

5080
multinuc
5071
comment

5081
span
5080
Contrast

5082
span
5063
explanation-argumentative

5083
span
5084
List

5084
multinuc
5072
elaboration-part-whole

5085
span
5084
List

5086
span
85
antithesis

5087
span
86
elaboration-part-whole

5088
multinuc
5033
elaboration-additional

5089
span
5091
Same-Unit

5090
span
89
elaboration-object-attribute-e

5091
multinuc
5092
span

5092
span
5093
span

5093
span
5088
List

5094
multinuc
5092
elaboration-additional

5095
span
5094
List

5096
span
5097
span

5097
span
5088
List

5098
span
5101
span

5099
span



5100
span
5096
elaboration-additional

5101
span
5100
span

