Nice bike. you probably don't need to do much. It looks like the tires may have dry rot. Sometimes brake pads also get hard if the bike has been sitting a long time. You probably would want to clean it up and replace the tires and brake pads at least.

If the chain is rusted or stiff, you may need a new one. If the bike has been ridden a lot of miles with one chain, sometimes the cogs on the back will wear with the chain. If you put a new chain on and it slips under heavy pedaling, you might need to replace the freewheel too.

I have a 1983 model that I have had for years. I went nuts this winter replacing essentially everything on it:

http://www.bikeforums.net/classic-vi...to-modern.html

There was no logical reason to do what I did. I just wanted to do it. With the stock components, your 1989 model is much nicer than the 1983 one I started with.