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Profit Growth Forecasts Remain Strong Despite Market Jitters About EconomyImport Prices Signal Inflation PressuresInvestors Seeking Safer Harbors As They Recognize Risks AgainBuilding. Related Job Gains Cool As Housing Activity Downshifts
There wasn't much buzz on Wall Street when CapitalSource (CSE) spent $211 million in January to buy 38 senior housing properties scattered from Texas to Massachusetts.
Nevertheless. both moves mark a major change for CapitalSource. The company writes loans and finances debt for small and midtier companies. many of which are unable to borrow through banks and other standard channels.
REITs are stock-owned companies that pay little or no income taxes. Instead. they pass most or all income directly to investors as dividends. For CapitalSource. the designation would cut its costs. giving it the ability to offer loan products below the rates of most non-REIT competitors.
The advantage is not without trade-offs. REITs must pass 90% of their earnings on to shareholders. That leaves little cash for company growth. When REITs need cash to grow. they must resort to equity offerings.
Earning REIT status also involves significant change. To qualify. a company must invest 75% of its assets in real estate. It must also earn 75% of its gross income from real estate-related sources.
CapitalSource took a big step toward satisfying the first requirement during the first quarter. growing its assets under management 83% from the prior year to more than $12 billion.
The largest piece of that growth was in mortgage-related receivables and mortgage-backed securities. Combined. these two assets increased 1.400% to $5.7 billion during the first quarter.
"Those assets will earn little or no income. they are purely for the purpose of qualifying for the REIT status." said Bear Stearns analyst Sameer Gokhale.
"Under the REIT rules it's really difficult to make a lot of money with that kind of asset unless you are taking a lot of risk." he said. "We don't intend to take a lot of risk."
CapitalSource's profit comes from its loan portfolio. which grew 7% in the first quarter to $6.43 billion. The company specializes in complex loan arrangements ' just the sort of thing many mainstream lenders shy away from.
Loans on which payments were delinquent 60 days or more increased 8% in the first quarter to $219 million. These loans represent about 3% of CapitalSource's total loan portfolio.
Revenue for the quarter rose 74% to $242 million. Earnings gained 27% to 42 cents a share. Analysts polled by First Call see full-year earnings climbing 41% to $1.87 a share.
CapitalSource typically makes loans to companies with $5 million to $250 million in annual revenue. Loans are usually between $1 million and $75 million.
Both deals were in January. and both were sale lease-back arrangements. That means CapitalSource purchased the actual property and facilities. then leased them back to the former owners. which continue to manage the operations.
The deals bulked up CapitalSource's share of revenue coming from real estate-related sources. which in turn pushes the company closer to earning its REIT badge.
Residential REITs began downshifting late last year. Many REITs reduced their dividends to shareholders. More than a few found themselves constrained by lack of cash flow.
"On the residential side. companies ' influenced by shareholders ' in many cases are wanting to get out of that REIT status. editor and publisher of the Web site Mortgage.
Performance-wise. residential REITS are still outpacing their commercial counterparts. The National Association of Real Estate Investment Trusts (NAREIT) lists 32 U.S. mortgage (rather than equity) REITs. which carry a market value of more than $25 billion.
Twenty-one of those deal with residential mortgages and have grown 9% so far this year. The 11 commercial mortgage REITs grew just more than 5%. Collectively. the group averaged dividends of $10.05. That's a lot better than last year. when NAREIT reported the group shrank 29%.
Fink calls 2006 is "a transition year" for CapitalSource. The extent to which the Internal Revenue Service considers the company a REIT will be determined from year-end reports.
If the IRS agrees. CapitalSource's tax rate will be lower this year than last year. and lower still in 2007. That's likely to push growth of CapitalSource's real estate portfolio ahead of its corporate business.
Debt rating agency Fitch placed CapitalSource on a negative rating watch in September. when the company announced its REIT strategy. Fitch removed the watch last month and affirmed CapitalSource's BBB rating.
The rating is Fitch's lowest investment grade mark. It's one notch below the BBB rating for Istar FInancial. (SFI) the only other mortgage REIT rated by the agency.
Just Released! ' The Global Bull Advances By Fisher InvestmentsMost of 2005's major capital market trends rolled seamlessly into 2006 as we predicted. This surprised the multitude of market participants who regularly underestimate the persistence of long-term patterns... Full Story
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(Business World (Philippines) Via Thomson Dialog NewsEdge)Total resources of the local financial system improved last year as a result of banks' aggressive disposal of bad loans to special purpose vehicles.In particular. preliminary data from Bangko Sentral ng Pilipinas (BSP) showed. Growth during the prior year stood at 7.68%.
The financial system comprises banks - commercial. thrift and rural banks - and nonbanks. namely investment houses. finance companies. securities dealers and brokers. lending investors. nonstock savings and loan associations. loan associations and venture capital firms.Nonbanks also include private and government insurance companies. including the Social Security System (SSS) and Government Service Insurance System (GSIS).The commercial banking sector is the biggest component of the financial system. accounting for more than 80% of the system's resources. The financial system's overall loan quality and banks' assets have been improving since Republic Act 9182 or the Special Purpose Vehicle (SPV) Act was enacted in 2002.Banks' total assets went up by 7.15% and 8.59% in 2004 and 2005. respectively. Published financial statements of banks have likewise shown that their loan portfolios had gone up last year. During the period. the loan portfolio of 42 local and foreign commercial banks totaled P1.52 trillion. nonperforming loans as a percentage of total loans went down to 7.4% from 8.7% in November last year. Monetary officials are confident that the level of nonperforming loans will continue to improve this year with the extension of the SPV law.Deposits. the system's main source of funding. have remained fairly stable in the past three years. Total deposits went up by 6% to P2.783 trillion from P2.625 trillion in the previous year.Growth in bank lending. continued to be modest at 1.6% to P1.518 trillion in 2005.Rural banks also performed well last year. with resources climbing by 15.12% to P120.3 billion from P104.5 billion.These banks have been a little more prudent with their credit management compared with the bigger capitalized and more aggressive commercial banks. In fact. bad loans of the country's rural and cooperative banks dropped to their lowest level in eight years to 10.93% last year. During the 1997 Asian financial crisis. the ratio stood at 15.37%.The financial standing of the thrift banking system also recorded significant improvements last year as overall resources rose to P357.8 billion from the prior year's P317.9 billion. [TB] Total resources of the financial system As of December 2005 (In billion pesos) % Change Dec-05 Dec-04 Dec-03 04-05 03-04 Commercial Banks 3. Altiris Updates IT Asset Management Products ? Microsoft Announces Interops Council ? Magic Sells CRM Unit to eContact Software ? ART Team Up For E-CRM. Google: Rep. Gonzalez's Amendment Mocked Net ' ? A Brief Interview with Oracle's Mike Betzer Regarding Telephony@' ? VoIP Logic Adds Sylantro to the Mix ? Tekelec Intros ENUM and Enhanced LNP ? Problems for Apple iTunes in Norway ? Global Crossing Revs Up DE-'? Avaya Intelligent Communications'? American Telecom Launches First '? Skype's limits far from '? CSR Partners with Callpod(R) '? TELE2 ACQUIRES MINORITY STAKES I'? Temasek Polytechnic Gains Innova'? TV-phone wars recruit forces
INTERNET TELEPHONY Conference & EXPOJanuary 23-26. 2007 - Fort Lauderdale-Broward County Convention Center Fort Lauderdale.
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We get the same nonsense in law practice. Plus. as an investor myself. I regret having ever gotten a broker's license. Having the knowledge and being credentialed to prove it is sure to be a basis for being distrusted.
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Rudy Giuliani left many legacies to New York. One of them is the monumental stalemate over a century-old school building on East 9th Street. off Tompkins Square. that was once a vital part of the city's social history but is better known these days for just being empty. After 70 years as P.S. 64. the building became home. to a left-leaning Puerto Rican'run community center known as Charas/El Bohio. In 1998. amid clamorous protests. the Giuliani administration sold it for $3.15 million to private developer Gregg Singer. Charas and its supporters spent three years in court fighting to undo the sale before being tossed out in December 2001. Since then.000-square-foot property in the heart of the East Village has sat boarded up while Singer. and the city battle over what it should be.
The only people this once vibrant community center serves these days are lobbyists and attorneys hired to argue about its future. and the building's only tenants are the pigeons nesting inside its moldering classrooms.
The next move belongs to the Landmarks Preservation Commission. which is expected to rule June 20 on whether to give landmark status to the historic building. That would be a victory for members of the East Village Community Coalition. which launched the campaign to stop Singer from razing the back half of the building and putting up a 19-story student dorm.
The coalition has lined up the support of every elected official in the area and flooded the LPC with more than 25.000 letters and postcards to "save our school." which was designed by New York's master school architect C.B.J. Snyder in 1904 to serve the area's then teeming immigrant population.
At a May 16 hearing. scores of neighborhood folks pleaded to designate P.S. 64's French-renaissance exterior as both a "monument" to the aspirations of immigrants on the Lower East Side and a "vital cultural resource" crassly snatched out of the community's hands by Giuliani.
Long before Charas revived it. P.S. 64 was a community center. It was the first public school to offer free. open-air theater to city residents. who in 1911 strained to hear Sydney Greenstreet recite "Gunga Din" over the din of trolley cars rumbling down 10th Street. Preservationists told of P.S. 64's storied alumni (Oscar-winning director Joseph Mankiewicz. who wrote the lyrics for The Wizard of Oz) and of rallies and speeches by FDR. Governor Al Smith. and Mayor Jimmy Walker in the old auditorium.
Fred Schwartz. architect of the new Staten Island Ferry terminal. "Who would sacrifice a prime historical example of architecture that elevated education for the masses by the very nature of its design?000 square feet of developable space above the five-story building. he claims'Singer is now threatening to act on an already approved alteration permit that allows him to strip all the decorative detail from P.S. 64's historic facade. Under the law. even landmarking a building cannot prevent an owner from acting on a pre-existing permit.
"Landmarking it is just an invitation to me to strip the building. at a follow-up hearing on June 6. Singer showed the landmarks commission a Photoshopped image of P.S. 64 as a plain. red brick building shorn of its white limestone veneer. and copper flashing.
"See. this is what it's going to look like." Singer tells the Voice. "I have $36 million worth of air rights. I'm not giving that away. My partners would sue me."
Singer says he's invested way too much to get saddled with simply restoring the dilapidated school building. which by deed can only be developed for "community facility use." He argues that P.S. 64 is no more special than dozens of other schools Snyder built across the city. If the city wanted it landmarked. it should have done so before it sold him the property.
At the hearing. the landmarks commissioners appeared aghast when an architectural historian hired by Singer defended the developer's right to "scalp" the building.
Nor did it help Singer's community relations when the historian. Andrew Alpern (author of such tracts as Apartments for the Affluent: A Historical Survey of Buildings in New York) termed P.S. 64 as a "poor relative from the other side of the tracks" when compared to the 13 other Snyder schools that have already been landmarked.
His choice of phrasing drew fire from Melissa Maldonado-Salcedo. an aide to Congresswoman Nydia Vel'zquez who was born and raised on the Lower East Side?Loisaida" in Spanglish. "This building was on the wrong side of the tracks." Maldonado-Salcedo replied. "and that's exactly why it should be celebrated and honored. P.S. 64 is the essence of who we are in Loisaida."
For now. Singer can't touch the building before June 21 because of a standstill agreement that he signed with the LPC. which in turn agreed not to vote on the matter before June 20. But he has forced the LPC into the uncomfortable position of having to rule on a building whose architectural value could be severely compromised after the fact.
When asked why he'd be willing to alienate the city and further enrage local residents by defacing the school in disregard of any landmark designation. "They already hate me. So they hate me more. So? I have a fiduciary responsibility to my investors. I can't go broke. I think the community should wake up and work with me."
"There are many ways to provide space [to the community] or preserve some of the decoration." announced his lawyer Jeffrey Glen. who was once a senior land-use attorney for the city. "We are ready to talk."
And ready to sue. At the same time he's angling for a way to preempt landmarking. Singer has also slapped the city with a $100 million lawsuit. accusing Mayor Bloomberg. the landmarks commission. the buildings department. and its oversight body. the Board of Standards and Appeals. of colluding to thwart his dorm plan. The suit was filed by Randy Mastro. Giuliani's former chief of staff. who helped oversee the sale of Charas.
Back in 1998. many saw the sale of Charas as a political hit on the progressive forces that mustered there. Mastro's staff rejected the financial plans Charas offered to keep the building off the auction block. And the City Council rep at the time. who backed the sale. was a fierce opponent of Charas's leaders; later. he got a job in the Giuliani administration.
Mastro's suit on behalf of Singer accuses the mayor's office of "manipulating city agencies like marionettes" and claims that Bloomberg cut a "dirty political deal" by agreeing to block the dorm in exchange for endorsement by Pagan's successor. Councilwoman Margarita Lopez. who was closely allied with Charas.
The suit notes that Lopez. a gay liberal Latina who backed Democrat Fernando Ferrer in 2001. crossed party lines to endorse Republican Bloomberg on October 13. a week before the landmarks commission. comprising mayoral appointees. voted to set P.S. 64 for a hearing.
City attorney Gabriel Taussig calls Singer's claim of a quid pro quo between Lopez and Bloomberg simply "not true. "The landmarks commission is an independent body who will decide this on the merits."
Lopez. who was given a plum position at the New York City Housing Authority after losing her bid to become Manhattan borough president. also vigorously denies any deal was cut. "It is ludicrous to even suggest that." she says. "Michael Bloomberg is the best mayor that this city has had since I've lived in the city." Lopez makes no apologies for doing all she could to block Singer's proposed dorm. which she says would do nothing to serve local residents.
Of course. any high-rise dorm would run into a storm of opposition in the East Village. where the locals are already up in arms about the steady incursions of New York University.
In his lawsuit. Singer says he worked with members of the landmarks commission and Deputy Mayor Dan Doctoroff's chief of staff to scale back the dorm tower from 27 stories to 19. while preserving the more ornate 9th Street side of the building. But the deal went south. when Lopez asked Bloomberg to "stymie" the plan.
Officials at Landmarks and City Hall concede they met with Singer to discuss his plans. but insist they never signed on to anything. "No one. either from Landmarks or City Hall. told him that they approved of his proposal to save the facade of the building. tear down the rest of the building. and build a tower dormitory." city attorney Virginia Waters said in an e-mail to the Voice. "He was specifically told by Landmarks that they did not approve of this proposal."
In fact. the buildings department rejected Singer's dorm plan in December 2004'long before Lopez endorsed Bloomberg'primarily because Singer has yet to find any legitimate schools or universities willing to sign a minimum 10-year lease in order to prove "institutional control" prior to construction.
Last October. the Board of Standards and Appeals upheld that decision. ruling the city could not allow an "on-spec" dorm. (Singer is trying to overturn the BSA's ruling in State Supreme Court.)
But the BSA ruled the same day the landmarks commission voted to schedule a hearing to consider granting P.S. 64 landmark status. is no coincidence.
Given the shortage of student housing. plenty of schools. would have jumped at the chance to lease space in his dorm. especially since he says he was offering to let them share in the ample profits earned from student fees. His lawsuit names nine colleges and universities he alleges were dissuaded by Lopez and the mayor. including New York University. which the suit claims was specifically asked by City Hall "not to get involved."
"This is sheer fantasy." says NYU spokesperson John Beckman. who insists NYU has never been interested in partnering with Singer. "We've said no publicly in so many ways." Beckman says. "This is like Groundhog Day."
CUNY Graduate Center also showed preliminary interest. according to a January 2003 letter provided by Singer. But the school says it dropped the idea because the arrangement Singer was offering?74-square-foot two-bedroom "suites" housing four students paying $1.100 each'was both too expensive and not suited to graduate students. who generally prefer to live alone or at least in separate bedrooms.
In a May 2003 letter. New School vice president James Murtha stated he would "definitely be interested in acquiring" up to 500 beds "should an appropriate facility become available in the East Village."
Through a spokesperson. Murtha acknowledges the New School considered leasing from Singer but then moved to develop its own dorm on 20th Street after Singer "ran into problems at the site."
Whether Singer could actually overturn a landmark designation by stripping the school is another story. One real estate lobbyist familiar with the deliberations scoffed at the idea. "He'd be the Harry Macklowe of his time. who asked not to be named. referring to the time back in 1985 when Macklowe tore down four SRO hotels in the middle of the night in defiance of the Koch administration. "They'd kill him. If he strips it. he'll never get a permit for a dorm there. All he's doing is making a lot of lawyers rich."
But there appears to be little legal recourse to stop him if he wants to do it. On May 30. the Appellate Division lifted a court injunction blocking Singer from stripping the building.
Among them are two penthouse owners at the Christodora House. a luxury condominium off Avenue B. and the owner of the Charlie Parker House'all properties directly adjacent to Singer's proposed dorm.
The EVCC folks have hired their own experts to gum up Singer's dorm plan. including former Manhattan buildings commissioner Ron Livian and the PR firm of George Artz. who initially worked for Singer.
For his part. Singer insists that he can no longer afford to simply develop the building "as is." In the past eight years. he has invested some $14 million. including the initial sale price; some $200.000 a year in real estate taxes; and big legal.000 yearly fee he pays himself to manage the property. Adding a fair return to his investors. he claims he's in it for $25 million.
His opponents call those numbers wildly inflated. "He can't claim hardship." says EVCC co-founder Michael Rosen. one of the penthouse owners. who has made preserving the historic "integrity" of P.S. 64 his crusade. "So far the only thing he's done with this building is leverage money off of it. pointing to a $12.6 million loan Singer took out two years ago.
Regardless. who now has four different law firms working for him. says he's not walking without being reimbursed for the full value of the building. which he says is assessed at $51 million. plus $36 million for the air rights.
"I'd love for the city to claim eminent domain." he enthuses. "They'd have to pay prevailing fair market value. They'd be so screwed. I have to have the air rights or else the city has to give me the value for them someplace else."
Singer insists the Mastro suit is more than just a pressure tactic. He jokes that he's looking for a ghostwriter for a book he'd call Corruption in New York. subtitled Nightmare on 9th Street.
"They are never getting the building unless they make a fair deal with Singer." Singer continues. lapsing into the third person. "They're forcing Singer to take down the facade as the only remedy to protect Singer's rights. It's not about the community. It's about Gregg Singer and market value. That's how real estate works."
Though branded by many as a villain. Singer hails from a family that was a major benefactor on the Lower East Side. His great-grandfather Louis founded the Home of Old Israel. which provided free housing and care to seniors from 1922 to 1965 from its locations on Henry and Jefferson streets. In 1966 Singer's grandfather Jack built Seagirt Village in Far Rockaway. Queens'then the largest low-income senior-housing facility in the country. And Singer's father and mother established a nonprofit drug treatment center in Florida.
Singer won't say much about his own track record. He says he specializes in foreclosed and "problem" properties and has developed and financed numerous commercial and residential projects. including middle-income townhouses in Westchester. apartment complexes in New Jersey and California. and a Wal-Mart in Georgia.
He won't reveal who his investors are for fear they'll be targeted. "Some are my family; some are other families we've invested together with for generations. if community groups and area politicians had worked with him in the beginning. the building would already be fixed up and serving the neighborhood. without all this fuss about a dormitory tower.
After he bought it. Singer claims he reached out to hundreds of arts and ser- vice groups. and city agencies. But they were all turned off. by the rowdy picketing staged by activists outside the school. along with threats from Lopez to withhold funding from groups that leased space there'a charge Lopez vehemently denies.
In 1999. he offered to rent P.S. 64 for as little as $12.50 a square foot to the Lower Eastside Girls Club. which was seeking a home. Back then. he didn't need to ask for as much because he was only in it for $3.15 million. But this beautiful deal was "shut down by Margarita [Lopez]." he claims.
Girls Club executive director Lyn Pentecost laughs at the story. She says she never even discussed rents with Singer because he was only offering a 30-year lease'not enough to justify the huge investment required to fix the building.
More recently. Singer's lawsuit claims that Councilwoman Rosie Mendez warned groups not to work with him'among them the Doe Fund. which provides housing and job training to homeless men.
McDonald says he visited the building several months ago with the idea of sharing space with other social-service groups. but never made an offer'both because the place required too much work to make it "economically worthwhile" and because. "it's like walking into a quagmire. Life's too short."
Although Singer recently took the property off the market to pursue the dorm deal. or $5 million for a long-term net lease.
"That's not even close to what institutions can pay." says David Lebenstein. a broker who specializes in siting not-for-profits. "The building has great bones. but it needs extensive renovations. so nobody can pay that on top of the $20 million or so you're going to need to make it usable to anybody."
What's missing in the battle over P.S. 64 is a realistic dialogue about what could happen there at this stage. Singer may have painted himself into a corner with his dormitory plan. But if the community doesn't want a dorm. what does it want?
"It's like a big taboo. It's like you're not allowed to talk about it." says Joseph Pupello. the new executive director of the Federation of East Village Artists. which runs the Howl Festival.
"My job at FEVA is to look at every possibility for either preserving or creating new cultural space here. who formerly worked with Bette Midler to help save community gardens. "It's not like we have endless buildings around here. but no one's allowed to have this discussion because there are these groups deeply invested in it."
Pupello says he's not necessarily opposed to a dorm or to adding some floors to the old school'if the community can get something out of it. He points to the new Avalon Bay project on Houston Street and the Bowery developed in partnership with one of Charas's old allies. the Cooper Square Committee. There. CSC traded market-rate housing for low-income apartments and a new YMCA.
These days. any talk of altering P.S. 64 is tantamount to heresy in the East Village. Yet Pupello worries the community may be unnecessarily closing off options. "OK." he says. "There's no guarantee that if we landmark this building. it will become a community center."
True. landmarking could lower Singer's sale price because it would require any new owner to contend with the LPC's exacting specifications. It would also make it much more difficult. though not impossible. to develop on top of the existing building.
But landmarking could also up the cost for not-for-profit groups to lease space there because it would increase the upkeep of the building'regardless of who owns it.
Leaving aside the cost of repairing all the fancy terra-cotta work. who can come up with the millions needed to make it habitable. let alone the additional money to satisfy Singer?
Some of the Charas veterans are setting up a new not-for-profit entity in hopes of creating the Armando Perez Community Center. named after Charas's co-founder. who was murdered in Queens shortly after the building was auctioned.
The group's mission statement speaks of developing art. and cultural pro gramming for "politically disenfranchised people." primarily low- and moderate- income people from the neighborhood?in essence replicating the vision of the old Charas/El Bohio.
Lopez. and Vel'zquez have all taken part in the talks; Vel'zquez even suggested she might be able to get $1 million to $2 million in federal funding to help renovate the school.
But that would be a drop in the bucket at this stage. Lopez talks about remaking P.S. 64 into a "Lincoln Center for the Lower East Side." serving area arts groups and not-for-profits. "If they can do that uptown. why can't people do that in this community?" she demands. Yet when asked how such a center might be financed. she dodges: "The community has to answer that. I'm not in office now. so it's not for me to decide. My only responsibility was to preserve the building."
Members of EVCC are also mum when asked what the building should be. At one point a couple of its members explored creating a Fame-type performance high school there. But Charas allies attacked the notion of a private school as "elitist." and the not-for-profit group pitching the idea couldn't meet Singer's terms anyway.
"It's not the mission of the EVCC to figure out what to do with the building." says Michael Rosen. "This is about preserving the very fabric and soul of our community. The point of landmarking it is to rescue a part of our history. Even if [Singer] chooses to let it stand empty. it's important to stop the building from being destroyed. I hope it can be a community center again. But as long as there is a plaque on the wall that says this school was a portal to the immigrant community. that's what this battle is about."
Rosen is himself a former developer of the Red Square apartment complex on Houston Street. His reluctance to voice a plan for the building may be understandable given the accusations from both Singer and Charas activists that he and others are looking to develop the old P.S. 64 themselves.
"I have no interest in buying the building. "but I'm sure that if Mr. Singer wants to sell it. there are enough resources in this community to find a way to finance it."
Charas should be celebrated for rescuing the building from the junkies who might have burned the place down after the city abandoned it. and for creating a hub where people could gather to make art and activism. Over the years. it helped nurture some prodigious talents. including Spike Lee. and John Leguizamo. Numerous neighborhood not-for-profits were incubated in its cavernous classrooms.
Yes. there were many vital programs. including ESL and computer classes; Latin dance and martial arts; Recycle-a-Bike; artist studios; cheap meeting rooms for Little League. and AA; and rehearsal space for scores of performance groups. But the top two floors were never occupied. and the bulk of the space was rented out intermittently. The place never reached anything near its potential.
That's partly because Charas's founders were former gang leaders turned community activists. and they took over the old school at a time when the neighborhood was still reeling from the city's fiscal crisis and the Koch administration's efforts to demolish abandoned properties. Charas turned aside'until it was too late'offers from not-for-profits to help anchor the building. Its leaders spent years applying and waiting for government funds for renovations'and won a fair share. But given all the backing it got (both Susan Sarandon and Richard Gere were "honorary" board members) it's fair to ask why the group didn't try sooner to buy the building itself.
Charas director Chino Garcia says the city kept the group on a month-to-month lease. with the expectation that the city would transfer the title to Charas once the property was fixed up.
Then along came Giuliani with his campaign to privatize city resources and his administration's "broken-window theory"'the belief that broken windows and neighborhood "decay" lead to crime. And there was Charas. with no central heat. and all those cracked windowpanes in the empty upper floors.
When Singer first bought the old school. he took a reporter up to the fifth floor to show all the dead pigeons. and detritus that had collected there. literally a foot high from wall to wall.
But Singer hasn't fixed those windows either. He has ripped out all the asbestos tiling on the floors and says he carted away 15 truckloads of garbage. But plenty more dead birds and droppings have accumulated because Singer never sealed the place from the elements.
Singer has also whitewashed the colorful murals that graced the entrance hall and ripped out all the wooden seats in the basement auditorium where FDR and Al Smith once campaigned. where Nuyoricans like Bimbo Rivas and Miguel Pi'ero recited poetry and plays. the Fringe Festival found a home.
But you can still find fragments of what was: a blackboard scrawled with notations about Shakespeare; fat bubble letters that spell out "Youth at Work! Workshop"; and in the old boiler room. where the coal furnaces are still in place. a fanciful mural of a globe breaking free of its chains.
Singer hasn't tossed out everything. Downstairs he saved a couple of paintings left behind. including a haunting portrait of a young Rosario Dawson. who grew up in a squat in the neighborhood and took part in many Charas events.
Life Imitates 'South Park'Rolling with the Worldwide Marijuana MarchLife Imitates South ParkWorldwide Marijuana March: NYC. 2006A Day Without White PeopleOn May Day. the masses rose up in New York. But where were the white peaceniks?Rolling Down the Gates in Little PakistanPakistanis. Irish line a Brooklyn street for immigrant rightsPeace March. 2006Giving it up to stop the war in Iraq
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Real Estate
the agency charged with oversight of Freddie Mac and Fannie Mae. has issued its House Price Index (HPI) for the third quarter of 2004. The report shows continued strong appreciation in single family house prices. an annualized rate of 18.48 percent. According to Armando Falcon. Director of OFHEO the 'growth in house prices over the past year surpasses any increase in 25 years.
Federal government agencies. and universities issue a dizzying number of housing reports. each based on different sectors of the real estate market ? sales of existing houses. plus an array of mortgage based data. Within its considerable limitations. the HPI is an interesting report. First. it is based solely on data compiled from Freddie Mac and Fannie Mae. based on mortgages purchased by the two secondary market giants. Homes bought through or refinanced by VA. or other mortgage financing sources are not included. Secondly. it excludes by definition houses that have not traded hands or been refinanced since 1975. For example. the HPI tracks those three price points to measure the actual appreciation of that specific home. doing this for some 28 million homes on literally. a house by house basis. It is somewhat analogous to the monthly report by major retailers on same-store sales. Therefore. while HPI is limited because it measures only a relatively small segment of the total housing market. it does measure real. documented value increases for given houses and these should statistically. represent a significant portion of the existing house market. Another interesting factoid: OFHEO devotes several pages of this quarterly report to caveats about its own data because of quarter to quarter fluctuations in the percentages of refinances reflected in the data. Apparently. when large numbers of homes are being financed. the rate of appreciation drops. probably because appraisers tend to undervalue a home being financed if there is obviously an adequate loan to value. In other words.000 refinance on a house that is worth. the appraiser may be less than aggressive in trying to prove that the home may really be worth $150.000. Loan to value ratios are almost always higher on new home purchases and appraisers may have to push to justify a price to qualify a buyer for a five or ten percent down payment. Refinances last quarter were substantially below those in previous quarters which may have artificially held down increases at that time. Patrick Lawler. OFHEO's Chief Economist. stated that the big increase in home prices shown by the report 'is particularly steep when compared to the price of non-housing goods and services. House prices grew 12.97 percent in the past year. while other goods and services as measured by the Consumer Price Index grew 2.68 percent.? HPI breaks data down by state. and by 361 Metropolitan Statistical Areas (MSAs) and gives data for each of these for the current quarter. and since 1980. The report also featured an informative narrative about several MSAs. focusing on some of the many factors that impact home prices. Some highlights. HPI prices for the entire county have risen 234.14% since 1980. Massachusetts had. the greatest appreciation in house values during that time period. given the incredible appreciation elsewhere. prices in those two states failed to even double in 24 years. The current statistics reveal a different bunch of winners. As has been widely reported elsewhere. Nevada's incredible growth in the last few years is reflected in its housing prices. It led the county with a quarterly increase of 12.44% and a one year appreciation of 35.78 percent. Second was Hawaii at 28.29 for the year. Texas (3.81.) The fastest growing MSA during the last year is Las Vegas-Paradise Nevada (41.74%) followed by Riverside-San Bernardino-Ontario. Nevada (31.90.) Of the fifteen fastest growing MSAs in the country. and two in Florida. But a rising tide does not lift all boats. and Lafayette Indiana proved that by barely moving this year (0.10%) and actually declining in the third quarter (-0.68). Utah rose a miniscule 1.20% and Anderson. South Carolina (1.27%). Also winning some sort of prize for worst performance was Lake Charles. Louisiana which had a negative appreciation of -3.5 for the quarter. Tulsa. Oklahoma also ran in the red for the third quarter (-0.22). If you are a real estate junky. you should check out the website. ofheo.gov. The entire report is a PDF document that runs 75 pages without a table of contents. but state tables begin on Page 10 and MSA breakdowns on Page 21. Data is also available in maniplable ASCII files if you really want to get into it.
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Real Estate
June 14 /PRNewswire/ -- According to the NAHB. over a million homes are sold in this country every month. And every month. tens of thousands of unsuspecting homebuyers are legally swindled by unethical mortgage brokers. Karen and Josh. a self-employed couple.000 mortgage. They hired a mortgage broker that told them he would charge a 4% origination fee because of the "complexity" associated with the deal due to their self-employment status. Had they gone through with the transaction.000 in origination fees alone. Fortunately for them. they found another broker who truthfully told them that it wasn't such a complicated deal and completed the transaction for a 1% origination fee.000. She also secured them a lower interest rate. How can there be such a huge discrepancy between the two brokers' fees and is this legal? According to RESPA. a Federal Law enacted to protect consumers in real estate transactions. as long as mortgage brokers reveal the origination fees they charge. it is perfectly within their right to do so. "Just because it's legal doesn't mean it's ethical." says Consumer Advocate. who is also a Mortgage Reduction Expert. Bestselling author. and the Founder & President of American Mortgage Educators. According to Gill. being charged exorbitant fees is just one of the unethical practices that tens of thousands of uninformed home loan borrowers fall victim to every day and the laws are simply not there to protect them. Consequently. he has instituted a Lobbyist program to build a grass roots consumer revolution to put pressure on legislators to do more for borrowers. Gill is also asking the media for help in bringing attention to this problem because it's an epidemic affecting millions of people. Meanwhile in another controversial move. he is asking industry professionals and the public in exposing unethical mortgage brokers and real estate agents on his website MortgageFreeUSA. Gill says. "The only people I upset in the mortgage and real estate industries are the unethical ones. The rest actually want me to get rid of these elements because they give everyone a bad name." (Information and resources. including Federal Laws. are also available for homebuyers and borrowers to educate and protect themselves at MortgageFreeUSA).
Real Estate
Gov. Mike Easley got his pick of lots in a gated community on the Bogue Sound. paying a bargain price for the waterfront lot compared to sales of other property in the development. The Charlotte Observer reported.
But his broker. the project's developer and the man who helped finance the development are all friends and contributors whom the governor has appointed to high-profile state boards. the Observer reported in Sunday's editions.
The price was 3 percent above the lot's assessed tax value. But 49 adjacent waterfront lots in the same development sold for an average of 20 percent to 36 percent above tax value. the Observer reported.
Raleigh broker Mcqueen Campbell. a longtime friend and contributor. told Easley about the property and insists the governor got no discount or favors.
Tax records show that a nearby lot sold for $469.000 - a 38 percent profit in three months and more than double the tax value.
People involved in the development and the sale of Easley's lot are all close associates of the governor. Mcqueen Campbell. was named by Easley to the N.C. State University board of trustees in 2001. the same year he appointed Campbell's father. to the state Board of Transportation.
Campbell helped broker the sale of the development last year for its original owner. Raleigh businessman Steve Stroud. Stroud said he negotiated the sale with Gary Allen of Charlotte-based Waterfront Communities.
The developer is R.A. North Development of Matthews. run by Allen's brother. while his own purchase was pending. Easley named Randy Allen to the state Wildlife Resources Commission.
Democracy North Carolina. an advocacy group that tracks campaign money. said Gary Allen and his family have contributed at least $197.000 to the state Democratic Party since Easley began running for governor in 2000. Randy Allen also has been a major contributor.
Another Easley donor helped finance the Cannonsgate sale. Investor Lanny Wilson of Wilmington loaned R.A. North $12.5 million. He has been on the transportation board since Easley appointed him in 2001.
Neither Allen returned repeated calls from the Observer. Wilson said that other than making the loan. he had "nothing whatsoever" to do with the project. Campbell said the governor "was treated just like any other investor."
"It's pretty common people are going to do business with people they know and trust." Campbell said. "I don't know too many people who do business with their enemies."
Frank Tursi. Cape Lookout Coastkeeper for the N.C. Coastal Federation. followed the development's long pursuit of environmental permits and said he saw nothing to suggest that the developers got any special treatment.
"It was pretty clear they used it for their marketing purposes." Tursi said. "A lot of people who attended their open houses said they were told by salesmen. the governor owns a lot here.'"
Real Estate
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We get the same nonsense in law practice. Plus. as an investor myself. I regret having ever gotten a broker's license. Having the knowledge and being credentialed to prove it is sure to be a basis for being distrusted.
Real Estate
Member ResourcesMembers HomeSearch Inman NewsContent WarehouseCartoon DatabaseSpecial ReportsWhite Papers SeriesAudio FilesInman BlogFeedbackConnect RegistrationAudio Conference
We get the same nonsense in law practice. Plus. as an investor myself. I regret having ever gotten a broker's license. Having the knowledge and being credentialed to prove it is sure to be a basis for being distrusted.
Real Estate
Home loan affordability across Australia improved slightly in the March quarter of 2006 from the preceding quarter. but was worse than a year ago. according to a report by the Real Estate Institute of Australia.
The report found that average loan repayments consumed 31.9 per cent of median weekly family income. That is an improvement of 0.4 of a percentage point from the December quarter. but a deterioration of 0.5 of a percentage point from the same time a year ago.
"Although house prices are not rising as dramatically now as in previous years in most cities. home buyers still have to borrow large sums of money to enter the market."
The average size of a first-home buyer's loan in the March quarter was $223. according to the REIA report. which would require monthly repayments of about $1520.
According to the REIA. first-time buyers made up 19.1 per cent of all those who borrowed to buy a home in April 2006. That is an improvement from the previous three years but down from the average of 21.8 per cent between 1991 and 2002.
The report also found that from the December quarter of 2005 to the March quarter of this year. affordability improved for home buyers in NSW. Queensland and the ACT.
Real Estate
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