consultants are sandburs

Wednesday, August 29, 2007

ABC gives PDF.

Praise again, for Tammy Sakry's last Town Center article. And for ABC Newspapers, with a new feature, where online articles can be downloaded and saved in Adobe Acrobat [.pdf] format. The Sakry article is here, and the print and Adobe icons are together at the top. One thing Sakry wrote, very noteworthy and not mentioned here previously:

Although the foreclosure sale by Minnwest Banking Group of 150 acres in RTC was postponed to Aug. 31 to allow it to work with the city on various issues, those issues have yet to be worked out.

According to Interim City Administrator Heidi Nelson, the land to be auctioned includes wetlands and land set aside in the master development agreement for parks, street dedications and two parcels on which the city has an option.

The bank plans to bid on the property once owned by Bruce Nedegaard, who died in November 2006, and sell it, said Russ Bushman, Minnwest Banking Group chief credit officer.

That means the schedule/postpone cycle should end by end of August. The bank will bid its judgment, then shop the property as owner, rather than shopping it as a pre-foreclosure package.

There still may be a junior lienholder redemption -- but it would have to be at the mortgage value of $35 million - unless the bank for some inexplicable reason does not bid the full amount -- making redemption very unlikely. So whoever buys from the bank should get title and a chance at making a silk purse from the sow's ear. The Rehbein lien for site prep is the big item that might be run under by this step. They are the biggest junior lien, as I understand it. For millions.

Sunday, August 26, 2007

FIRST TIME EVER: Median Home Price expected to drop - according to a Strib carry of an NYT report.

Two interesting NYTimes items. First, the Strib carry:

Home prices forecast to drop for first time

The median price of U.S. homes is expected to take an unprecedented fall. Many officials believed that would never happen.

By David Leonhardt and Vikas Bajaj, New York Times
Last update: August 25, 2007 – 9:45 PM


The median price of homes in the United States is expected to fall this year for the first time since federal housing agencies began keeping statistics in 1950.

Economists say the decline, which could be foreshadowed in the government home price index to be released this week, will probably be modest -- from 1 to 2 percent -- but could continue in 2008 and 2009. Rather than being limited to the once-booming Northeast and California, price declines are also occurring in such cities as Minneapolis, Chicago and Houston, where the increases of the past decade were modest by comparison.

The reversal is particularly striking, because many government officials and housing-industry executives had said that a nationwide decline would never happen.

There next are reported glass half full and half empty views:

While the housing slump has already rattled financial markets, it has so far had only a modest effect on consumer spending and economic growth. But forecasters now believe that its impact will lead to a slowdown over the next year or two.

Jim Paulsen, chief investment strategist at Wells Capital Management in Minneapolis, said the decline is a reflection of just how much prices have risen over the past several years. "So in some sense, if we drop 1 to 2 percent, that's a celebration of how well we've done," he said.

In some respects, the Twin Cities metro area has mirrored the national market. During the first six months of this year, the median sale price of houses fell 2.17 percent compared with the same time last year, according to data from the Regional Multiple Listing Service.

That's a modest decline compared with price increases of as much as 10 percent over the past four years, according to Deb Greene, president of the Minneapolis Area Association of Realtors. She said it is "just a balancing of the market."

On an inflation-adjusted basis, the national median price -- the level at which half of all homes cost more and half cost less -- is not likely to return to its 2007 peak for more than a decade, according to Moody's Economy.com, a research firm.

And, for the shared-wall used unit market, this story wrap-up, as might be the case at the Ramsey Town Center:

"We are having to start from scratch and rebuild for a down payment," said Kenneth Schauf, who expects to lose money on a condo in Chicago he and his wife bought in 2004 and have been trying to sell since last summer. "We figured that a home is the place to build your wealth, and now it's going on three years and we are back to square one."

Staff writer Jim Buchta contributed to this report.


Next, Countrywide Financial Corporation is the poster child for the sleazy sub-prime profiteer, per the NYTimes focus piece on the firm and its practices. No excerpt, but the detail is troublesome, and it makes you yearn for the days of regulated lender conduct. They are financial predators, or seem so from the NYTimes account. (And if you have trouble with the link and a "subscription" page, I got a linkover from Google News - so a search on the firm name there should link to the item without any subscription intercept.)

You can see for yourself, the firm's website, here and here.

Friday, August 24, 2007

Ramsey Town Center News in Anoka County Union.

Tammy Sakry wrote an interesting and informativie article in today's County Union, online here.

The bank says it will do something this time around at the foreclosure, and that the city must back down. The City says, "Other way." Somebody backs down. Have a guess.

Sakry reports about 150 acres subject to $35 million blanket debt, plus city assessments. Ignore the assessments, that is $233,333.33 per acre.

Would you pay that for a weed patch acre? Would you buy the Brooklyn Bridge? Would you send good money in response to one of the Nigerian email letters?

TRY THIS: 322 acre total size, Trudgeon has said. Where were the bankers when the other 172 acres were being parceled out? At the North Branch tavern, lubricating up? Who did they leave watching the shop? The norm for a blankat debt with deed releases is if you release ten percent of the land from coverage of the encumbrance, then you prudently assure you get the debt paid down by at least a 10% share on the encumbrance balance, or you do not release.

Who are these clowns and where did they study Banking 101? They will get $35 million for that stuff when a very,very, very warm place freezes over. If then.

Does any of this pass the smell test to you? Nobody is going to give that much per acre for that stuff; with or without it being bound by the original Master Development Agreement, as yet a still open question. And when Sakry reports 150 acres, is that without the disputed land the City claims encumbred for parks and all included, or absent it as part of the reported acreage? Sakry was unclear about that disputed acreage - which is a substantial question when saying "It's about 150 acres at issue."

ADD IN THIS: How did they - our city's finest - pay for that next to useless [next to City Hall] ramp? What Faustian devil's-deal did they make?

The push to place the part of Ramsey north of Trott brook into urban developing city status, whatever that means, was that the quid pro quo with Met Council? Who wrote that deal, when, and how was it told to us the taxpayer-citizens?

1/4 acre crowed lots? All the way to the city limits? If that's a done deal WTF is the series of Comp Plan sessions about except deception and illusion?

So, what's the story? Done deal, in exchange for ramp money? Something else?

How was the bloody unneeded ramp financed?

Was the deal that Ramsey to the city limits would permit the crabgrass contingent to erect stuff where the new people will cost more in services than they generate in new taxes? What? Who cut the ramp deal(s) with the City, what was the quid-pro-quo? And again, who holds title to that thing? The city's EDA, as with City Hall? Some other smoke and mirrors shell game, similar but different?

Be thankful that at least for now the words "Port Authority" are no longer in the lexicon - not that the perpatrators of that scam ever really went totally public with it.

There were Jungbauer and Abeler sponsorship measures in the legislature - some even getting to a vote - where the council had never voted - and only Bonnie Balach, allegedly, was talking to legislators, purportedly "for the city." Who gave her what marching orders, anyway?

Who's Bonnie Balach and how was she tasked to do something the Council never approved? Good question? Go to City Hall sometime, and let me know the answer you get from asking it.

There's more to Sakry's article than in the following excerpting, so buy the paper or check that above link (buy the paper, actually, because your purchase helps keeps your local paper operating).

Now, see if there is any appearance to you of revisionism in this:

Keeping the vision

“Town center is more than bricks and mortar. It’s about the vision and it’s important to maintain the vision,” said Trudgeon.

According to Trudgeon, it will not be the same specific product that was designed by the community four or five years ago.

The vision “can take shape in a lot of different ways,” he said.

“We are interested in seeing the project is a success and built out,” said Trudgeon.

Although it’s hard for Trudgeon to speculate on what would change, if anything, “the council has affirmed a couple of times the project’s vision is important to them and they want to maintain that vision,” he said.

Whatever potential changes may be presented, it needs to be pedestrian friendly, said Nelson.


Huh? What about perhaps making it "taxpayer friendly" Heidi? Ever think about that one? WTF is "pedestrian friendly" other than many things to different people so that the statement is wholly empty. Revisionism afoot, is all I can read in it.

And, Patrick, get real. "... designed by the community four or five years ago," Patrick, that does not float. The community is not going to walk the plank on that one. It was designed by the pack of architectural individuals bleeding fees out of Nedegaard, with complicit aid from city hall. The community in no way is to blame and the community should be greatly insulted by any such comment from one who has a big share of the blame for it, not as instigator, but as facilitator. Get real man, we have no time or tolerance for that kind of dissembling. You are bright Patrick, but so are we. We are in mop-up mode, we are trusting the planning people to make the best of things, but there is absolutely no help to casting vague blame on "the community" when we can name responsible individuals, which in past postings I have done. Do the mop-up with us, staff people, we like you and believe you are not the ones at fault, but certainly don't blame us for it. We are not at fault one iota and get and keep that straight because you need to maintain your credibility with us. Sakry continues:

Deal said the city needs to rethink the RTC project and renegotiate the master development agreement.


That "Deal" reference kicks back to an earlier part of the article:
“It simply priced the land out of the market. That really took the project out,” said Jim Deal, who owns 26 acres of property in RTC.

As for the future, “not a lot can be accomplished until the lawsuit between the city and the bank is settled,” he said.

Although he has made the bank numerous offers for the property, Deal said his offers were rejected because they did not cover the $35 million mortgage and the liens on the property.

While he still believes in RTC, “it’s a tough sell out here right now,” he said.

Deal said the project could get done in 20 years, 10 years if it went really well.


First, "It simply priced the land out of the market," is a crock. The bank will have to take a king-sized hosing for its improvident managing of its loan affairs, as is fully proper, and the land will have to be priced by the market, as it exists now, being encumbered [or not] by city rights. Priced with a discount for that uncertainty. And even $200,000 an unencumbered acre, who's around to pay that? Deal?

Any other version of what's just is false. Second, Deal's talking a bit different time frame than the mayor and the chairman of the Town Center Task Force were telling us earlier; or the former city administrator quoted years earlier in Sakry reporting about our doing Christmas shopping there, 2004.

Big time fiction, guys. And why should we forget or politely decline to remind you? You need and deserve it.

Time probably will prove Deal the better prognosticator.

But he has an incentive to cast dark musings, just as the others had Pollyanna causes. "Alliance for Ramsey's Future," and other fronts run from who knows what locales, were marketing arms of land interests, or included that influence to a big degree.

And all the while, go ask Diana Lund, what is the tax burden on the citizens from the council's inopportune "guesses" of success? What is being paid on city debt, while the city, bank, and Deal three-cornered p---ing contest proceeds?

A lot more than reasonable, whatever the amount. A confederation of dunces did this thing to us, acting in concert and thinking themselves smart. The community did not disadvantage itself. Not at all, except by too much and too widespread an indifference and inattention to what was going on. Passive fault, while others were the actors.

SO: Is Deal part of the confederacy? A fox wanting a shot at running the henhouse? A white knight to the rescue? All of these or none of these? Sakry further writes:

In 20 years it will be done, but it will not look like the original vision, according to Deal.

Bringing urban to Ramsey, a bedroom community, doesn’t fit, Deal said.

Deal said it should continue to match the bedroom community to the amenities that go around that, such as malls, restaurants, big or mid-sized box stores.

The city also needs to offer some incentives for businesses to come, he said.


There it is. Fox wanting full run of the henhouse.

The guy wants it to come with a subsidy. He lost my interest in helping him one bit.

Forget 20 years. Go a hundred with it exactly as it is, as a monument to colossal stupidity so it is less likely it is repeated. But Jim Deal has a lot of money. So don't TIF it to make Jim Deal wealthier than he already is. Be sensible for a change, instead.

There seems no other way to characterize all of this than what, a few years ago, the lady at the key cutting kiosk on Main Street in Anoka across from the school said to me about it. "We got screwed." Let's call it enough of a screwing for now, and not give Jim Deal his turn.

The man has my 100% backing if he wants to do something with the sow's ear, without asking for a public subsidy. When he wants TIF he loses my support, and I oppose his effort. That simple. That clear. Think.

IN FAIRNESS: So far, Deal has been generally honest. Revisionism is afoot. But compromise is not inherently wrong or evil. Sometimes it is needed to mop-up the excesses others have caused. Have no doubt. Hanging together is better than hanging separately, as Franklin said. Where it goes if James Deal is driving the machine, Deal is still being vague on that, but he deserves some slack because he still is negotiating a risk. He still appears the most sensible and least deceptive of actors seen so far in the play. This is very, very, very, very early in the negotiation posturing. The deal is not dead because Deal will not give the bank $35 million. Nobody would be that stupid and the bank knows it. Deal did not get wealthy being hasty or a fool. Things now will be played out, with Deal cautiously fostering a mood that favors his maximizing his gain - if we'd only give him free money so the deal is not broke and staying broke. That's posturing. Fine Jim. Now leave us alone and cut a deal with the bank based on the lawsuit being there and the bank having to discount to you for it and you having to price that additional risk as part of things.

These are adults, gambling. Little else. Why subsidize that with taxpayer money? Answer - there's no good reason, but that alone does not mean it won't happen. Expect it. More likely than not. People spending other peoples' money sometimes are less provident than with their own.

The 2008 Comprehensive Plan is in danger of lacking citizen solidarity. If so, the politicians can write whatever they choose.

Mayor Tom and I had sharp words at the Aug. 22 session. Over sewer-and-water. The mayor would not respond forthrightly to the contention that the present status quo, by ordinance, could be changed "at the drop of a hat" by the council, any council, new faces and agendas, and that the existing base of citizens who moved here to be left alone and not be overtaxed or specially assessed for the purpose of advancing somebody's agenda to maximally cash out raw land acreage with subsidies, need better, sounder, and less ephemeral protections. He disagreed, but kept trying to evade giving an explanation why "Trust me" is supposed to be adequate for us.

Haplessly, these are the same people who ARE NOT showing up in adequate numbers to protect or assert their interests, as an established bloc or group entitled to fair and lasting protection from forced assessments or forced hook-ups --- with the protection to be in the charter and in the Comprehensive plan, which are harder to tamper with in the future - via "pulling out the rug" by future councils.

The mayor did his vexing usual non-response. Off point. Repeatedly. Ducking the question and then when pointedly reasked, going into his verbal diarhea mode.

He just kept going on and on and would not shut up.

Minnesota nice, it is nice, but sometimes that kind of thing needs confrontation so it will have to be suffered less in the future. I'd had it with the BS, and said so.

Elvig showed up at the "2-1/2 acre" discussion corner, and Breanne Dalnes, who writes quicker than I do did poster-board scribing. David at least gave concise and cogent answers. Refreshingly so, even when he and I disagree. And the mayor, I have seen him being dead-direct and brilliantly concise and cogent, and I have seen that on enough occasions to know he well could do that all the time, but it appears to not be his modus operandi or game play.

What that discussion group showed, is that the North-end property holders, the acreage holders, see an opportunity to cash out that may or may not be real, but it seems desired.

Their saying, there and then, that density transition is good and fair is - good and fair.

The worry is when the land's being cashed out, top-dollar might trump good and fair.

But a consensus that at least 2-1/2 acre development should be allowed north of Trout Brook was clear. Some wanted more density as the base Comp Plan provision. Nobody liked 4-in-40. If Ms. Dalnes scribing does not reflect that she was too busy writing to be fully listening. I expect she got a good cross section of commentary, but it will not reflect a consensus because a consensus was, unfortunately, lacking.

2-1/2 acre development seems a fair Comprehensive Plan status there, north of Trott Brook. It allows a present cash-out, where there presently is not sewer-water allowing a more profitable density. And more profitable densities should have to be justified, via PUD applications if the density is wanted by the developer.

The rationale is clear: Homes on 2-1/2 acres will be up-scale, or at least can be, to attract wealthier entrepreneurial types who might found Ramsey businesses and create Ramsey jobs.

The quarter-acre "Petersonian density" is far, far less likely to do that.

And high end properties add more to taxbase and actual revenues than they cost - and every new housing unit has an added cost to offset and often exceed its tax benefit, we must not ignore or deny that fact - so that 2-1/2 acre units are the most desirable. PUD procedures - the Planned Unit Development appraoch - exists for any landholder thinking that uniqueness of a property would be cause to seek higher density development. But, of course, PUD is intended to be the EXCEPTION and not the rule.

I do credit the mayor on one direct answer. He does not like 2-1/2 acre development. He tersely and directly said so, "... because it is bad development."

I understand there is thinking that way, and that he could, and should say more in defense of that position. Tersely and cogently, as he can do when he wants to show how he really is quite a bright person who can be terse and direct and to the point.

I like the potential of 2-1/2 acres. I like it a lot. The housing resulting from it is desirable. I look at Tiger Meadows at Tiger Road along Hwy 83, Armstrong, north of Trott Brook. It worked well there, and there is Greg Bauer's Trapper's Ridge platted at 2-1/2 acres, although not being built out at present. Those knowing what they want, have gotten their 2-1/2 acre approvals before the past switch-over to a moritorium on 2-1/2 acres plus "ghost-platting with density and a community septic tank for now" experiment was tried and abandoned as an ill-thought-out slap-dash failure.

My understanding is James Norman was the major proponent of that failed experiment and approach, as he was with Port Authority mischief, and since the beginning of this year he no longer is a decision-making factor. May it rest in peace, while true cluster development, not that false ghost-platting perversion of the concept, finds a place in the Comprehensive planning and in the city's code. But either do it right, and completely, and cogently, or not at all. Half-baked is not good for cakes or ordinances.

If Ramsey were to dump the 2-1/2 acre option it would create a situation where Burns Township can preempt that housing niche, to the north of Trott Brook (and to the north of Ramsey). They can do the cherry picking while Ramsey wrestles with density, traffic, crowding, and properties costing more in services than they add to tax revenue.

The concern for keeping high-end housing diversity, and for protecting effectively the integrity of existing neighborhoods, is especially proper in light of the boom in shared-wall housing in the past 4 years in Ramsey, together with a parallel Ramsey boom in the quarter-acre high density detached single family sector.

The City's permitting-&-expansion during the peak and tail-end of the mortgage bubble was far too deep into these two niches. Now with a slump, there will be some kind of a rebound - with the timing and direction being uncertain. But the signs are that shared-wall will not sell that well so that the crabgrass will grow and propser in other segments - while 2-1/2 acre is best for the tax picture that we, the existing residents of Ramsey, see for the future.

Why not give us a break? The existing, voting residents. Put 2-1/2 acre in the comp plan as the normal zoning for north of Trott Brook, not any more 4-in-40, not moritoriums or forced "clustering," which if done right is a desirable thing to add to the mix but not something to aim at as the norm. 2-1/2 should be the norm. With that, there can always be the occasional, exceptional, PUD for something at a greater density. Since every property, in some way is unique, there will not be a lack of PUD proposals. Current practice shows that to be the case and there is no cause to expect a massive change. But turning down the PUD efforts when not in the City's best interest - that would be a welcome change. But that is implementation, by staff, per the policy direction and decisions of council; and not anything to be given too much attention when it is writing of the Comp Plan that is the focus for now.

Nedegaard info update. One error, in an earlier news report.

The CFO of Ramsey Town Center LLC and New Heights Development LLC, Heisel, pled guilty to a single federal felony count.

They got Al Capone, by the Untouchables getting to his accountant. So, while this is not the full story, it appears to be the start of the public unfolding of the story.

Strib and PiPress both reported this development. This excerpt from PiPress:

Anoka County / Exec admits lying in probe
Ex-Town Center CFO guilty of role in altering records in separate venture
BY NICOLE GARRISON-SPRENGER
Pioneer Press
TwinCities.com-Pioneer Press


The 51-year-old Heisel, of Lakeville, was accused in U.S. District Court last month of misleading federal agents about his hand in altering financial records that enabled the sale of the New Heights Development in Columbia Heights.

The charge stems from an IRS and U.S. Postal Service investigation into the now-bankrupt Ramsey Town Center project and its late developer, Bruce Nedegaard. Nedegaard, who died in November, also owned the New Heights Development.

The charges do not suggest any impropriety by Heisel on the Ramsey Town Center development, but many of the same players are involved in both deals.

Ramsey Town Center is a $1.3 billion mixed-use development planned for a 322-acre plot of land along U.S. 10 in Anoka County. A Pioneer Press series in July detailed the project's demise and its developer's questionable financing, Swiss bank accounts and cozy business relationships with his financiers.

New Heights was the company run by Nedegaard to develop the Grand Central Lofts condo project. One of the conditions of the loan for New Heights was that 25 percent of the housing units in the development be pre-sold, court filings show. Authorities alleged Nedegaard and others created bogus purchase agreements and provided earnest money to make it appear that the condition had been met.

Since at least early 2006, federal investigators have interviewed numerous people connected with Nedegaard, New Heights and Ramsey Town Center. In June, they executed a search warrant against Community National. The bank has not been accused of any wrongdoing, and an attorney for the bank has stated previously that neither the bank nor its officers have committed any offense.


[italics added]. Many of the same players? Bogus purchase agreements? Earlier, Strib reported and HighBeam Research online has this:

A new view of Columbia Heights; It's not the place you'd expect million-dollar penthouses. But two just sold, and city officials are banking on future buyers of upscale housing to help revitalize the first-ring suburb.(NEWS)

From: Star Tribune (Minneapolis, MN)
Date: September 5, 2006

Star Tribune (Minneapolis, MN)
Byline: Darlene Prois; Staff Writer


Wealthy investor Tom Kurak is something of a visionary when it comes to assessing real estate potential. The man who sold $14 million worth of industrial land to the city of Ramsey for its new town center several years ago now believes he sees the next hot value on the horizon: the aging, first-ring suburb of Columbia Heights.

That's where he and his wife, Patti, recently invested $2.7 million. Their purchase of a pair of custom-designed penthouses in Grand Central Lofts - one to live in, one to sell - in the suburb's highest-profile ...


[italics added] That Grand Central Lofts project is where the bogus purchase agreement mischief reportedly happened. I believe the family still actually resides at Thomaswood, in Ramsey, and that the Grand Central Lofts project is stalled. They may have closed a purchase, and moved. I am not privy to the family's actual residential status.

Earlier, it was reported how a federal IRS and Postal Service search warrant was executed at Nedegaard's bankers' site, June 18, 4:20 pm. PiPress also wrote of records reviews at the Nedegaard construction business site in Columbia Heights, the same street address as Ramsey Town Center LLC used. I found no SoS record for "New Heights Development LLC" but there was a "Grand Central Lofts Homeowners Association" nonprofit record, also at the 4200 Central Avenue address (listing Nedegaard as registered agent). There is a different street address for the New Heights location, here.

While PiPress reported there were documents reviewed and inquiry by federal agents at City Hall I have seen no reports of any other record review or of any search warrant activity, anywhere else in Ramsey. From reports it appeared that no warrant was issued for City Hall, but that record review was on a voluntary basis in response to an investigative request. Check with City Hall if you want a clarification on that.

Finally, on the Prois Sept. 5, 2006, Strib item; the City has clarified its status as separate and apart from the for-profit venturing of others, and the Strib Sept. 5 item appears in error on that point. Nedegaard's LLC, not the City, was purchaser of the 170 +/- cornfield acres the Kuraks sold at the Town Center site; something the city makes a bit clearer here, than here.

The point is most emphatically made, here, at Power Point slide #3. The link is from the city's special comp plan page, which you should bookmark. I believe Breanne Dalnes [BDalnes@ci.ramsey.mn.us] is responsible for that page content and for coordinating email notice of Comp Plan citizen sessions. If you are not on her emailing list already, you can add your name by sending her an email request.

Wednesday, August 22, 2007

Sept. Ramsey Resident, p.1, speaks of TONIGHT'S property rights Comp Plan session in the past tense.

Confusing. The Sept. Ramsey Resident has been mailed recently, online here, and it talks in the past tense about the leadoff property rights session that will be tonight.

Avoid confusion. Show up at the palatial City Hall, Alexander Ramsey Room, tonight.

The last session was the kick-off for the series of follow-up issue oriented sessions, and tonight's is on the Property Rights issue.

6:30 - 9:30 pm.

The city's website homepage has the information CORRECTLY posted for this evening's session.

The mailing sent out before the meeting, and the online posting of the Ramsey Resident notes the August 22 date (but as if it had already happened).

AGAIN - Avoid confusion - show up tonight.

*_________
With regard to the property rights issue:

Where, short of nuisance, can and should a city and its majority population set bounds upon land use decision making of an owner?

Whenever the Comprehensive Plan includes limits or restrictions, there is always a variance for a detail, or a PUD, a planned unit development, as options for owner relief from otherwise binding constraints.

Given that there always is a discretionary relief alternative, should we not restrictively (i.e., conservatively) set rules and zoning status designations in the comprehensive plan? If not, then it IS a property right to propose and have accepted a subdivision or other land use proposal conforming to what the plan and zoning and building codes say.

Hence, every allowed density or use specified in the Comprehensive plan (and zoning ordinances) represents a floor every owner stands on, with the ability to reach as high as PUD discretionary review permits - which in Ramsey, historically, has yielded the great density exceptions such as Village of Sunfish Lake, a Kurak project, on their previous Thomaswood south forty acres.

Village of Sunfish Lake shows, the Plan is NOT the final word. The Plan is the starting point, only. Influence, or quality of a proposal, can always yield exceptions that prove the rule.

What right should a land speculator, down the street, have to get sewer/water routed past your home - where you then face the threat and risk of an assessment being imposed or being forced to hook-up? What right should you have by charter and in the Comprehensive Plan, to band with neighbors also affected, and to force the question to a majority-rule vote, of the affected stakeholders?






Not enough of an express protected right, is my answer. John Peterson and friends, and a compliant council, proved that with the sewer-to-the-gun-club cram down. Those photos show something done in my neighborhood. I did not like it. I had no way to stop it. Shouldn't I and the neighbors have had that right???????

Think it over. What answer do you have?

Tuesday, August 21, 2007

The I-35 bridge rebuild - light rail or not?

Pawlenty straddles the fence, Strib reports.

The pernicious Molnau-Bell letter, here, dumping on light rail possibilities in the rebuild. Think small. Whatever happened to "smart" at Met Council? "Small" (and cheap), instead of "smart."

Minnesota Monitor requests reader opinions on what the new bridge should be aimed to be.

This Wednesday - the Future of Ramsey - the 2008 Comprehensive Plan - Property Rights.

What's property rights about, and what do the rest of us have to say, to the person who owns it? What's ownership, over 200 - 250 years; not just last year, three years ago, a decade?

Session at plush and lavish City Hall - read the details at the City website - here.

In honor of property rights, these photos, from this morning.



Price reduced?











Friday, August 17, 2007

Here is the link to the interactive software for reviewing commuting and work patterns, in the metro area.

The same resource might be available besides from DEED's Labor Market Area staff, via the DEED website. However, this is the portal I know of and have used. Email if you have or know of alternate access ways and means for the general public to get to the same data and visualization software.

Simply click here to get the credits page, learn the participants [MnDOT, under Molnau opted out], and to start the software. It has been a while since I last used it, so I am relearning it, as you would be learning to navigate it in the first instance.

I have an older, slower workstation, but if you have state of the art hardware and braodband, it should be a quick experience. For me, there is a slowness factor that is hard to live with.

Bookmark it if you want to reconsider the data. If you are planning to relocate a business, or make a demographics based decision, it is a piece of demographic tooling that is useful. I expect staff and the Bonestroo consultants will be using it quite a bit, in preparing the 2008 Comprehensive Plan.

NorthStar boosters, and critics alike, should have a look.

*****UPDATE*****

Here are some sample maps I created, for illustrative purposes. For use, the maps are generated with a legend identifying what the coloring or dot markings mean. I only captured the map images, for illustration. You can scale, resize, etc. You can add road overlay. Perhaps there even is a trunk sewer feature - you can see all the flow that Met Council has, justifying its Ramsey hookup fees. Perhaps not. At least Met Council was a participant in the study/effort. There are two aspects. The demographics database, which can be updated as fresher data arrives; and the mapping and visualization display software. It is a nontrivial tool. Some of the better computer science minds at the U.Minn. T.C. campus worked on this; and I bet it is really fast on the servers, workstations, and network they have.

Hack around with it. You can print out any map you generate. With the legends, not simply the images as I present:

Below: Ramsey's CommuteShed - where people in Ramsey commute to work.



Below: Ramsey's LaborShed - where people who work in Ramsey commute from.



Below: Housing Density - I have no idea how current this data is. I enlarged a part of the map, and did a highway overlay, to demonstrate those functions, as well as labeling beyond the key city, and counties, as in the other two maps.



It is clear, from the commuteshed and laborshed, that NorthStar would be a factor, but that there is substantial commuting to and from Ramsey that would not be helped simply by a rapid link downtown, without more. And some people do sales or other work where they need an auto [besides a company car left overnight at work] during the day; or they work irregular hours and might be stuck if they missed the rush hour service due to a meeting or finishing a project with a deadline that makes catching a rush-hour peak service home an "iffy" thing.

Friday, Aug.17 Strib online - Thursday US markets staged a late rally closing about even; worldwide liquidity injections; ResCap bond ratings plunge.

The other financial outlets reported the late stock market rally.

Today is another day. Strib was descriptive, not particularly analytical. There is not much to analyze in one day's trading. One big pension fund exiting a holding might cause an individual share to devalue, during the trading day.

On the world markets, Strib noted the dollar is slipping relative to the yen, and the injections of "liquidity" are worldwide.

The biggest local news was Strib, on ResCap. Residential Capital is a single family mortgage house, large scale, partly [largely] owned as a General Motors subsidiary, within GM's financing subsidiary operations via GMAC. The rating agencies downgraded ResCap's most senior bonds, to junk bond status. Presumably this is due to the market segment ResCap is in, more than a downgrade over any company risk specifics. The firm has two successive quarters, most recently, of solid loss, but in that segment no firm has prospered.

Strib said:

More mortgage fallout: ResCap debt cut to junk
The actions by the Moody's and Fitch credit-rating agencies will make it difficult for the Bloomington real estate firm to borrow additional money.

By Thomas Lee, Star Tribune
Last update: August 16, 2007 – 9:31 PM


Two of the country's top credit-rating agencies cut Residential Capital's debt to junk status Thursday as worries over bad subprime loans continued to send shivers throughout the markets.

Moody's Investors Service reduced the senior debt of Bloomington-based ResCap, one of the country's largest real estate companies, to Ba1, or junk, from Baa3, saying a weak U.S. housing market could complicate the company's efforts to restore its profitability.

"These rating actions reflect the continued, significant funding and valuation volatility in the single-family mortgage market, coupled with ResCap's challenges in restructuring its residential financial group," said Philip Kibel, a Moody analyst.

Fitch Ratings also cut its rating on ResCap debt to BB+ from BBB, citing "an unprecedented disruption in the capital markets" that has made money scarce for new mortgages. ResCap's bonds and credit default swaps have been trading at so-called distressed prices, indicating investors are concerned that the company will default on its debt.

The rating downgrades represent a major setback to ResCap, which only last week cited progress in ridding its books of bad subprime mortgages.

The firm lost $263 million in the second quarter, compared with a profit of $289 million during the same period a year ago. Still, ResCap's performance was an improvement over the first quarter, when it lost $910 million.

But ResCap's junk rating makes it very difficult for the company to borrow additional money.

"We're clearly disappointed," said Gina Proia, a spokeswoman for GMAC Financial Services, which operates ResCap. "We remain focused on turning around the real estate finance business in this challenging environment."

ResCap officials say the company still has access to plenty of money, with more than $105 billion in cash and loan facilities. General Motors and Cerberus Capital Management, which jointly own ResCap, could provide additional funds. GM has already injected $1 billion into ResCap to stabilize its business.

"We feel that we have sufficient liquidity," Proia said.


Nothing locally out of line with recent news, nothing earthshaking. But ResCap is restructuring. What that means for residential single-family loan availability, especially at the low end of the lending spectrum, likely is that money will be scarce except for solid-goal credit risks. In line, Symphony at Town Center has a big sign up - not billboard size, but big - from $140's and up - something like that. Mid-hundreds. Touting the low-end price is not the "up-scale" that John Feges had touted. Who ever really believed that, however? The talk of the high end of the spectrum - $400,000 shared wall Town Center offerings - seems to have fallen silent.

Good.

It was at best "speculative" to ever talk about Town Center as high-end [except for the lavish public-paid palace none of us had a referendum's chance to decide on].

Some might say "high-end" or "up-scale" Town Center talk was pure smoke and mirrors from the get-go. Forecasting the future is inexact. An unprincipled person can take advantage of such a reality, and deliberately blow smoke. Who is to say what motivates another to speak as he does? It is circumtantial inference, and while knowledge of the circumstances is not uniform, neither is the weightings people give to the same known set of circumstances. Ultimately, it is judgment and opinion.

Whether NorthStar happens or not; and whether it happens with a stop in Ramsey; is speculative, and a matter of guess, judgment, and opinion. And whether that would be good, bad, or largely indifferent a factor for our total 2008 Comprehensive Plan views and prospects, is something I have an opinion on, which might not be the same opinion held by some city council members, and might not fit well with what some Met Council people still would desire. Fix Highway 10. Then worry about NorthStar. At its very best, NorthStar would be incremental, not pivotal. An ultimate first rate transit grid for the entire metro area is a sound goal. We are billions and billions of dollars in investment away from that. And with a collapsed key highway bridge, the public transit pup will continue to be wedged outside to marginal feeding.

It may not be wise to keep primary focus on roadways. Now with the bridge collapsed arguably might be a time to rethink transportation priorities before oil production peaks and declines, and the price per gallon of gasoline in ever-cheapening dollars becomes prohibitive; but with that scenario, the truth will be Oberstar pumping emergency money to rebuild the bridge, played out parallel to neglect for other transit alternatives. Given that, we had best think Highway 10, not NorthStar, unless we prefer fictions and pipe dreams to common sense reality and prioritizations in line with priorities being set on larger stages than Ramsey/Anoka County.

Some of the most misleading talk I have seen about NorthStar was here, talk of going to Twins and Vikings games, or taking a [casual mid-day] trip to Mall of America.

"Residents could walk to the station, hop on the train and go to work or to a Twins or a Vikings game and not even have to fight the traffic. In downtown Minneapolis they could change from commuter to light rail and go to the airport or Mall of America - again, all this only walking distance from their door in the town center."

As if nobody else would be using those tracks. There all the time for commuter rail? Unlikely. Meet folks 24/7 at the airport, and conveniently rail it all back from there to the other end of metro, with NorthStar? Very unlikely.

That is one of the busiest BNSF commercial tracks; and millions of dollars are being required to purchase rush-hour rights of usage - purchased from the railroad - with its aim to bolster its bottom line as much as feasible. The notion that a nationwide railroad coordinating freight movement on that scale would allow discretionary interventions to aid Zygi's and Pollad's profiteering schedules seems fanciful, even if not an intentional misstatement of realities. Giving the benefit of doubt, let us go with irresponsible and fanciful speculation, as motive.

***************UPDATE****************

The above was written, arguing that if highway-paving is everyone else's priority, NorthStar was/is less attractive an option and less likely to become a reality than if public transit is being comprehensively planned [by Met. Council, who else] with NorthStar an integrated part, but where Ramsey/Anoka County residents have a transit option's chance consistent with their "workshed" or "commutshed" patterns.

Those work-and-commute vizualizations are available and reviewable online, now, although the availability is not being loudly publicized, almost as if the Met Council and other planners want to keep it close to the vest for themselves; while wanting us to generally not see it as part of the discussions we have, and the thinking we, citizens, do. See, slides 9 -11, here, and I probably will post more, in the near future about how the entire metro commuting data is online, easily visualized.

The Anoka County Watchdog has posted reporting of how rail transit is being discouraged as part of the thinking about what rebuilding an I-35 bridge should entail and the discouragement of thinking about including transit-rail in the plans is not only from TIM [not the governor named "Tim" but an acronym for "That Idiot Molnau" our iron-headed pudding-brain head of MnDOT, under the Guv named "Tim"]. Watchdog also posts an interesting KSTP analysis, here. I had not kept current with Watchdog in writing the above post, hence the *UPDATE*.

Peter Bell, Head of Met Council (and Ms. Steffen's boss under Guv Tim), is part of that "rail-transit-off-the-table for the I-35 bridge rebuild" crowd. Per the article Watchdog posts.

The article seems a dealth knell for NorthStar, since it would be a route to nowhere useful, without a full, comprehensively planned grid so that it could be used for workers commuting from Ramsey to get to where they work. And that would cost billions, and if it is being planned it is being hidden from us, because of the Taxpayer League zealots who are knee-jerk reactionaries, against any tax, rather than against unjustifiable waste, which is where I stand when critcizing the new overelegant city hall and the Town Center debacle now on ground. Pawlenty used those zealots to get and stay where he is. Now he's married to them. For good, or bad, better or worse.

There is a difference them and me. I am not against comprehensive but expensive sane transit planning. I favor it, and differ from Watchdog's opposition. With Watchdog, I am quite strongly against piecemeal mish-mosh, with NorthStar perhaps not the best next transit piece for funding, by any good measure. There is hence some coincidence about NorthStar, but not about transit being a sound goal, in general.

Thursday, August 16, 2007

City of Ramsey Comprehensive Plan - Aug.22 "Balancing Property Rights with Public Interest"

Here is the start of an excursion. At the end there will be a closed book exam.

Our City asks us,

"What is a property right?" Are there property "rights" to develop, live peacefully, purchase a home that increases in value? With these rights, do we have responsibilities of stewardship, sustainability and respect for our neighbors? The right of one person or group may conflict with another's. What is the City's role in determining what "rights" are to be enforced? What is a legal foundation for property rights? How do we allow flexibility to balance the interests and rights of all landowners and the general public within the existing zoning regulations? What is the role of grater public benefit in this discussion we will explore these issues together.


6:30 - 9:30 p.m.
Alexander Ramsey Room
Ramsey Municipal Center [The big new COSTLY City Hall]
7550 Sunwood Drive NW

****************

That is the notice.

Now, for some background, ownership during a lifetime is arguably clear enough, but what about historical ranges of time, or geological? Does "ownership" mean much, ice age to ice age?

But, narrow it to the 2008 Comprehensive Plan, looking 30 years to the future; but with an eight year renewal cycle, where changed circumstancs can have play.

What of "Life, Liberty, and Property"? There is the thought of defining ownership. The view of the franchise to vote as the most basic property, although this session will be about tangible real property - and its relation to freedoms.

There is the notion that something as intangible as intellectual property has little in common with or tying it to land, yet a patent or a parcel of real property allow the right to exclude others from using our property. Property.

If you are still with me, and not bored stiff with arcane thought, do you have a right to join a group, or may others have some right to define their group and exclude you? Do you have a right to crash a party? Is that part of your "property?"

That is sufficient background. Now the closed book exam.

Imagine, consider; a parcel of real property, say smaller in footprint than a townhome at Town Center. What rights belong to the occupant, and how, depending on circumstances, could the occupant exercise those rights? Can the owner set exclusionary limits, perhaps visiting times, while permitting public entry and if there is public entry - under what terms and conditions of conduct? And what if perhaps the owner's view and the occupant's view of property might be known or believed to differ - how is that resolved? Can it be resolved. Would an eviction be proper in every instance of such a conflict of philosophy, especially if the occupant does not appear rowdy, or capable of presently distrubing the peace? Bear all of these questions in mind and more. Think of as many aspects of propery as you can imagine. If you view a piece of property, what right have you to use another's view of the same parcel of land, the same view, the same perspective; and once a property has been altered, with whatever fixtures, structures it may have, added over time, is there a line to be drawn against altered use? Or is the owner sacrosanct - to do whatever? Who might have rights to alter, or remove a structure - and what public rights might apply, if the parcel is not presently under public ownership, or if it is indeterminate who owns, absent a search of land records?

Finally, if you can handle that range of thoughts, and if you believe you have over time developed a truly healthy sense of irony to go with your analytical skills, even to give it play when regarding such a quite serious concept as private property, and only if you feel that way, then proceed to take the examination. Procedurally, it is simple. But you must after proceeding write a 200 word essay on aspects of property you find compelling in this link pair. If you believe yourself up to that task, proceed [and since this exam is on the honor system, click one or both, in whatever order you believe [or feel] best]:

<click here>

<click here>

Thank you. If you have taken this exam and can find Ben the taxpayer, day or night, at his proprietary spot at Town Center, then you are fit to attend and share your ideas Aug.22 -- about property rights.

Glum information - Census Bureau housing reports, and the market.



photo: a clue - it largely speaks for itself - more at the end of the post

And it is a lengthy and glum post. First, Census Bureau has information in a spreadsheet, and a pdf document - no hypertext for easy excerpting.

No kidding. Check the links. I will try -- everything but the header from the pdf pastes into a notepad window, so here is the glum story, excerpted only somewhat, pretty much their entire story, from what our trusted government tells us today, Aug. 16, 2007:

FOR IMMEDIATE RELEASE THURSDAY, AUGUST 16, 2007 AT 8:30 A.M. EDT
CB07-116
Erica Filipek or Steven Berman
Manufacturing and Construction Division
(301) 763-5160


NEW RESIDENTIAL CONSTRUCTION IN JULY 2007
The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for July 2007:

BUILDING PERMITS
Privately-owned housing units authorized by building permits in July were at a seasonally adjusted annual rate of 1,373,000.

This is 2.8 percent (±1.3%) below the revised June rate of 1,413,000 and is 22.6 percent (±1.3%) below the revised July 2006 estimate of 1,774,000.

Single-family authorizations in July were at a rate of 1,003,000; this is 1.6 percent (±1.2%) below the June figure of 1,019,000.

Authorizations of units in buildings with five units or more were at a rate of 314,000 in July.

HOUSING STARTS
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,381,000. This is 6.1 percent (±7.0%)* below the revised June estimate of 1,470,000 and is 20.9 percent (±6.1%) below the revised July 2006 rate of 1,746,000.

Single-family housing starts in July were at a rate of 1,070,000; this is 7.3 percent (±6.7%) below the June figure of 1,154,000. The July rate for units in buildings with five units or more was 275,000.

HOUSING COMPLETIONS
Privately-owned housing completions in July were at a seasonally adjusted annual rate of 1,512,000. This is 0.1 percent (±9.5%)* below the revised June estimate of 1,513,000 and is 22.2 percent (±7.6%) below the revised July 2006 rate of 1,944,000.

Single-family housing completions in July were at a rate of 1,203,000; this is 4.0 percent (±9.3%)* below the June figure of 1,253,000. The July rate for units in buildings with five units or more was 280,000.

New Residential Construction data for August 2007 will be released on Wedneday, September 19, 2007, at 8:30 A.M. EDT.

EXPLANATORY NOTES
[* * * go onsite to read the fine print.]


photo: Bloomberg - Troubled Traders at NYSE

Glum? An understatement. 2006 was not a boom time, and those 2007 vs. 2006 numbers are sobering. Now the market. Business Week, first:

Market Snapshot August 16, 2007, 12:33PM EST text size: TT
Stocks Slide on Credit Fears
The gloom and doom won't stop on Wall Street as more bad news arrives from mortgage lenders at the center of the widening credit crisis
by Ben Steverman


Bad news from Countrywide Financial (CFC) kept investors in a selling mood Thursday as worries worsened about credit markets, mortgage lenders, and even the broader economy.

On Thursday afternoon, the Dow Jones industrial average dropped 218.91 points, or 1.7%, to 12,642.56. The 30 stock average is now down 10% from its closing high of 14,000.41 on July 19.

The broader S&P 500 fell 24.7 points, or 1.76%, to 1,382.00. The index has dropped 11% from its closing high of 1,553.08 on July 19, and is down 3% for the year.

The tech-heavy Nasdaq composite index lost 51.17 points, or 2.08%, to 2,407.66 -- and it's also down 11% from its closing high of 2,720.04 on July 19.

The CBoE's volatility, or VIX, equity index -- a measure of market fear -- hit a new high Thursday of 35.29 as stocks kept falling.

The Federal Reserve stepped in again Thursday, with the New York Fed injecting another $12 billion in reserves with overnight repurchase agreement, or "repo", on top of the $5 billionn 14-day repo put in place earlier to help ease the liquidity crunch. On Wednesday, the New York Fed used a repo to add $7 billion to financial institutions. In the last week, central banks in the U.S. and Europe have injected money into the markets to help stabilize the credit markets.

However, the Fed's rescue is making investors nervous that more financial and lending companies are in danger. "The Fed pumping money into the system is positive, but the more money they pump in, the more the fear factor increases," explains Peter Cardillo, chief market economist at Avalon Partners in New York. "People think there are still a lot of problems out there."

Problems? You want problems? Try this, as Business Week continues:

U.S. Treasury Secretary Henry Paulson told the Wall Street Journal he believes the turmoil on financial markets "will extract a penalty" on U.S. economic growth, but "the economy and the markets are strong enough to absorb the losses" without creating a recession.

Other market watchers wondered when the selling will turn to buying. "The market is obviously in a heightened state of paranoia and if we see the full fledged selling panic come in, you may have to buy simply based on the fact we are probably a bit oversold," wrote Jay Collins of DT Trading in Chicago in a note.

In Europe, stock indexes finished with sharp losses on Thursday as credit woes spread. In London, the FTSE 100 index plunged 4.10% to 5,858.9. Germany's DAX index dropped 2.36% to 7,270.07. In Paris, the CAC 40 index lost 3.26% to 5,265.47.

Asian markets also moved sharply lower. In Japan, the Nikkei index dropped 1.99% to 16,148.49. In Hong Kong, the Hang Seng index fell 3.29% to 20,672.39. The Shanghai composite index slid 2.14% to 4,765.45.

Treasuries moved higher Thursday as investors seek a safe haven amid falling equity markets around the world.


Hiding in the treasury bond market is like the 1950's grade school exercises - duck and cover - in case the Russians nuke us, crawl under your desk and cover your head against falling fixtures, never mind the radiation will have your growing a tail and scales before you croak from burns all over your body and inside out, as if microwaved.

Bloomberg adds:

U.S. Stocks Tumble on Credit Concern; Asia, Europe Markets Drop

By Lynn Thomasson
Enlarge Image
Traders at the NYSE today

Aug. 16 (Bloomberg)
-- The global credit crisis shook equity markets around the world, sending benchmark indexes in the U.S., Europe and Asia to the lowest levels in five months.

The main measure of U.S. stock volatility climbed to the highest since October 2002 as turmoil in the home-loan market forced mortgage lenders Countrywide Financial Corp. to tap an $11.5 billion bank credit line and First Magnus Financial Corp. to stop funding new loans. Metals, energy and industrial companies including General Electric Co. and United Technology Corp. led the declines on concern economic growth will falter.

The Standard & Poor's 500 Index fell 16.26, or 1.2 percent, to 1,390.44 at 1:54 p.m. in New York, leaving it down 10.5 percent from its record July 19. The Dow Jones Industrial Average decreased 184.85, or 1.4 percent, to 12,676.62. The Nasdaq Composite Index lost 37.18, or 1.5 percent, to 2,421.65.

``This is a classic case of fear trumping fundamentals,'' said John Praveen, chief investment strategist at Prudential International Investments Advisers LLC in Newark, New Jersey, a unit of Prudential Financial Inc., which oversees $648 billion. ``All markets are being hit by the same brush.''

Developing nations led the tumble, with the MSCI Emerging Market Index dropping 6.6 percent, its biggest decline since 1997. Brazil's Bovespa index fell 11.3 percent in dollar terms, the top decliner among 89 indices tracked by Bloomberg, followed by Turkey's ISE National 100 Index, which lost 11.2 percent.

Europe's Dow Jones Stoxx 600 Index fell 3.6 percent, while Asian stocks posted their biggest two-day decline in a year as the Morgan Stanley Capital International Asia-Pacific Index retreated 2.3 percent.

The yen advanced the most against the dollar since 1998 as investors sold riskier assets funded by loans in Japan.

U.S. stocks fell to their lows of the day after the Federal Reserve said manufacturing in the Philadelphia region unexpectedly stalled in August and lender First Magnus said the secondary mortgage market has collapsed.

Volatility Surge

The Chicago Board Options Exchange Volatility Index, known as the VIX, climbed 15 percent to 35.28. Higher readings in the gauge, derived from prices paid for S&P 500 options, indicate traders expect bigger share-price swings in the next 30 days.

Countrywide posted its steepest drop since the 1987 stock- market crash for a second day in a row, losing $4.20, or 20 percent, to $17.09, a four-year low. David Sambol, the lender's president and chief operating officer, said liquidity in the mortgage industry has ``become constrained.'' Countrywide said today it drew down an $11.5 billion bank credit line as the global credit crunch curbed access to short-term financing from debt markets.

Moody's Investors Service cut its rating on the company's debt three levels to Baa3, the lowest investment-grade level, from A3.

Goldman Sachs

Goldman Sachs, the world's most profitable securities firm and second-largest hedge-fund manager, decreased $1.55 to $163.35.

The S&P 500 last fell at least 10 percent from a high in the period ended March 11, 2003, or 1,619 calendar days ago. That's the longest streak without a correction since the 2,572-day stretch ended October 27, 1997, according to data compiled by Birinyi Associates Inc. and Bloomberg News.

``The equity market is just being slow in understanding what has already happened in the credit markets,'' said Daniel Broby, chief investment officer at Renaissance Investment Management in London, where he helps manage $4 billion. ``This market is one where you'll find it very difficult to call the exact magnitude of when the correction is over.''

ResCap Downgrade

General Motors Corp., the biggest U.S. automaker, lost $1.78 to $29.76. Residential Capital LLC, the Minneapolis-based mortgage unit of GMAC LLC also known as ResCap, was downgraded to high-yield, high-risk status. Its ratings were cut two levels to BB+ by Fitch and one step to Ba1 by Moody's. GM owns 49 percent of GMAC.

Amgen Inc. retreated $1.59 to $49. The world's largest biotechnology company said it will slash jobs for the first time in its 27-year history, close plants and cut capital spending in response to declining sales of its top-selling drug, the anemia treatment Aranesp.

Home Depot Inc., the largest home-improvement retailer, declined $1.07 to $32.29 after a government report showed no sign that the housing industry is recovering from an 18-month recession. The greater-than-forecast 6.1 percent decrease in housing starts to an annual rate of 1.381 million followed a 1.47 million pace in June, the Commerce Department said. Building permits also fell to a 10-year low.

Raw-material producers fell the most among 10 industry groups in the S&P 500, dropping 3.3 percent on mounting concern that losses in global credit markets will erode economic growth and demand for raw materials.

Alcoa Inc., the world's second-largest aluminum producer, decreased $2.48 to $31.22. Freeport-McMoRan Copper & Gold Inc., the second-biggest copper producer, fell $7.74 to $70.13. Nucor Corp., the second-largest U.S.-based steel company, declined $2.61 to $43.90.

Exxon Mobil Corp., the world's largest publicly traded oil company, lost $2.29 to $79.82. Chevron Corp., the second-biggest U.S. oil company, declined $1.75 to $79.01. Crude oil fell for the first time in four days in New York on concern falling stock prices may cause economic expansion to slow, reducing fuel demand.

Hedge-Fund Warning

Credit losses may cause a major hedge fund to collapse, Chris Mahoney, Moody's vice chairman, said on a conference call today. Forced selling by a large fund would ``disrupt markets'' as the collapse of Long-Term Capital Management LP threatened to do in 1998, he said.

Goldman last night blamed its $3 billion in losses from hedge funds on too many managers of quantitative funds making the same trades. So-called quant funds use computer models to make their investment decisions. Some $4.2 trillion of stock market value has been wiped out globally since July 19, according to data compiled by Bloomberg. To contact the reporter on this story: Lynn Thomasson in New York at lthomasson@bloomberg.net .
Last Updated: August 16, 2007
13:55 EDT


Bloomberg reports more, have a look. CNNMoney.com, focusing on builders, reports:

Woes deepen for home builders
Housing starts unexpectedly rise in June, but applications for new projects slump to lowest level in 10 years; outlook grows more bleak.
By Grace Wong, CNNMoney.com staff writer
July 18 2007: 11:04 AM EDT

LONDON (CNNMoney.com)
-- The outlook for the housing sector has grown bleaker after a key measure of builder confidence fell to its lowest level in 10 years, according to a government report released Wednesday.

Building permit activity, considered a gauge of builder confidence, sank to a 1.41 million pace last month from a 1.52 million rate in May, according to the Census Bureau. Economists surveyed by Briefing.com had expected a decline to 1.49 million.

Home builders broke ground on new projects at a higher than expected rate in June. Housing starts rose unexpectedly to an annual rate of 1.47 million from a revised 1.43 million in May, according to the government report.

While housing starts increased, they tend to be volatile and vary depending on weather conditions across the country. Permits, on the other hand, generally are less influenced by weather and are considered an indicator of future housing activity.

Weakness in the housing sector has dragged on economic growth and home sales are expected to remain sluggish for some time, Federal Reserve Chairman Ben Bernanke told Congress Wednesday.

"Declines in residential construction will likely continue to weigh on economic growth over coming quarters, although the magnitude of the drag on growth should diminish over time," he said in prepared testimony.

The housing slump has dragged on as home builders have battled a decline in housing sales and prices while dealing with a glut of supply. On Tuesday, the National Association of Home Builders, a trade group, said its home builder sentiment index fell in July to its lowest level since 1991.

"The optimism of builders couldn't be any worse," said Pat McPherron, economist at Moody's Economy.com. "There's no demand, there's nothing in the pipeline."

Troubles in the subprime sector have also led to "rising foreclosures, defaults, and homeowners selling their homes to avoid default," which has made matters even worse for builders, Global Insight economist Patrick Newport wrote in a note.

Some say a slowdown in building permit activity could provide a longer-term benefit for the battered housing market by helping to choke off supply. An oversupply of homes on the market has depressed home prices, and that weakness in pricing is believed to be keeping some potential buyers on the sidelines.

But most economists agree there will be more pain before the market rebounds. The National Association of Realtors, an industry group, warned last week that it could take longer than previously forecast for the housing market to find a bottom. The group said it doesn't expect home prices to recover until the second quarter of next year.

The ongoing problems in the sector have weighed on the results of home builders. Pulte Homes said on Tuesday it expects to post a hefty loss for the second quarter due to weak consumer demand.

Lennar, KB Home, D.R. Horton and Ryland Group have all either reported or warned of unexpected losses in recent weeks.

In addition builder Centex has posted an operating loss in its two latest quarters, while Hovnanian Enterprises has had three quarters of losses.


And there is a bit more there, but the excerpt is extensive. In an interview about a month ago, Bob Toll, of Toll Bros., a high-end large-scale builder, was reasonably upbeat on there being a recovery, but not seeing it soon:

I don't see the market getting better until, at the earliest, April of 2008. But I do think that when a recovery occurs, it will be much quicker than it has in the past because of pent-up demand. You've got decent job growth, low unemployment, low interest rates, great corporate earnings reports and tons of money being created and sloshing around the world.


So, back to the chart at the beginning, and this one, by region. Both are from here.



It is true that one chart is worth a thousand crabgrass posts; so check that site. [And see the NAHB site for tabulated data.] From the "Housing Bubble" homepage, it is or seems oriented to real estate forecasting or investment interests, but it is somebody, one individual putting up a site, who does not give tables he gives charts. And that fall-off to the right of the thing, the chart I led the posting with, where today and tomorrow take their place against history on the NAHB-based charts might fit with what Toll says above, and if so, it does not say anything encouraging to anyone facing a move and a home sale; a distress situation with a foreclosure pending and a hope of recouping some equity; and Toll is talking one end of the market where the opening Census Bureau numbers suggest single family starts and permits now have recaptured a lead. In Ramsey, over the last few years, the shared-wall segment has been overbuilt - and the chickens are coming home to roost. It was bad thinking then, it is worse now when the effect has caught up with the cause.

In the 2008 comprehensive plan, have we learned a lesson, or are the landholders still driving the process; the rese of us be damned? The Kurak cornfield cash-out was done - from or at least with a seat the council table - ditto for the gun club sewer pipe but there at least the sepculator money went into the thing going into the ground more than at Town Center. However, in planning growth, in thinking of the 2008 Comprehensive Plan and who we want to be -- why let the crabgrass prosper?

We have better ways to run the town, than to do that. Met Council can lead, follow, or stand aside - but if it is more shared-wall crabgrass mistake-making -- stand aside seems the better thing for now.





Natalie Steffen
"I see our town center giving us an identity and the best of both worlds - an urban atmosphere in an outer ring suburb. We'll be able to work, go to restaurants, shop and see movies - and eventually the commuter rail will connect us to the rest of the world."


- Metropolitan Council Member Natalie Steffen

Wednesday, August 15, 2007

It wasn't like we needed to be hit upside the head with a two-by-four ...


More on banking. Local impacts, not nationwide or worldwide.

We have a report of an indication that commercial new real estate development may be trending to a credit crunch with a small-bank refocus on loans to existing small businesses. Good news for those selling goods and services to small businesses. Bad news for TIF-hungry venturers, wanting new stuff on the ground. Bad news for CMDC, perhaps, or perhaps good news, regarding the who-and-how of those it chooses to finance and its involvement in TIF-related consulting for City of Ramsey. How does it impact Town Center and Ramsey's greater issue, the 2008 Comprehensive Plan, the roadmap for the entire city?

The article suggests that real commercial, not phony-call-it-commercial bond-financed stuff like PACT school and City Hall [and presumably the morgue] will be credit-crunched, so that those Pattiann Kurak-touted "nice shoppes and restaurants" are even more likely a figment of imagination currently, then near realities.

Just as was always expected, by the numerous [40% at the poll, at least] band of Ramsey's steady Town Center skeptics. The drum beaters and cheer leaders were blowing smoke, or so it seems, more and more, as events unfold. And an unfortunate 60% of voters were lulled into following that Pied Piper like a band of enraptured children, when asked if they'd like the place between Anoka and Elk River to have "nice shoppes and restaurants" in a so-called "referendum on Town Center."

Here is a short excerpt from the Pioneer Press latest report:

BankFirst reins in real estate loans
Regulators say bank needed to be more conservative; execs agree to make changes

BY NICOLE GARRISON-SPRENGER
Pioneer Press
TwinCities.com-Pioneer Press


Dennis Mathisen's Minneapolis financial-services company is getting a substantial makeover, partially at the behest of federal regulators.

Earlier this month, Mathisen, chairman of Marshall BankFirst and a well-known entrepreneur and protégé of Twin Cities businessman Irwin Jacobs, signed an agreement with the Federal Reserve Bank of Minneapolis and South Dakota banking regulators, pledging to address weaknesses at his company's bank subsidiary, BankFirst.

The agreement restricts BankFirst, which has been heavily focused on commercial real estate, from growing its loan portfolio and bars the bank from originating loan-participation deals without approval. Loan participations are large loans set up by a lead bank, which farms out pieces of the deal to a number of other banks.

Regulators have been increasing their scrutiny of banks' commercial real estate lending in recent months, out of concern that banks with too many such loans could be hurt in the case of a downturn.

"It wasn't like we needed to be hit upside the head with a two-by-four," said Kim Culp, the newly hired president of BankFirst. "Businesses change and industries change and we knew we needed to change."

Since Mathisen bought BankFirst in early 2005, the bank has been originating commercial real estate loans all over the country, building up a loan-participation portfolio of about $3 billion.

Locally, a handful of high-profile loan-participation deals have gone bad - including the $35 million loan for the stalled Ramsey Town Center - costing dozens of banks hundreds of thousands to millions of dollars.

In December, a consortium of bank regulators warned that small and midsize banks were concentrating too heavily on commercial real estate lending and that some, in the heat of competition, were relaxing their lending standards.


"If you're a small community bank, the fastest way to put assets on the books is through real estate," Culp said in an interview. "You're looking at our bank today, but it's a national bank issue."

BankFirst also shed its 30-person residential-mortgage division in March and is in the process of selling its stored-value card business to Bancorp Inc. of Delaware for about $61 million.

Once these changes are complete, BankFirst will have assets of about $400 million to $450 million, down from the $641 million it had as of March 31, according to the Federal Deposit Insurance Corp., and about 50 employees, down from 216 in March.

"We have a lot of capital to give me the opportunity to reinvent the bank with a new strategy," he said, "And that strategy is to be a real business person's bank."

"That's a market niche where I think there is real opportunity," Culp said.

That's a market niche that has real opportunity? Yes and no, and maybe. And you still have to be a prudent banker, or an unhappy one.

Bruce Nedegaard got credit.

In hindsight, that was relaxing the standards.

But at the time he was "a real business person" with a stable history of years of operation from one Columbia Heights location, and of profitably building quality high-end custom homes for which he'd received a builders' association award, something that was generally and positively reported, beyond the trade news. See the opening photo, from the Scherer Bros. Lumber Co. website, reporting the award. It was a BATC [Builders Association of the Twin Cities] award. A recognition of achievement from Nedegaard's crabgrass peers. It gave Bruce Nedegaard a bona fide recognition as above average, in his building career. And I have no cause to say he did not deserve the recognition, based on the quality of custom homes he had built and based on his years of success before his life ended in Ramsey-related failure.

It makes it seem that Bruce Nedegaard's biggest sin was going broke, and he and John Feges and the architects got a Town Center AIA award, and we know how that turned out on the ground in the face of the market's harsher but more legitimate judgment.

At the time Nedegaard and Ramsey Town Center, LLC hit the jackpot for $35 million Town Center Financing [most of it going to the land speculators, given the high per acre price he paid, around $100,000/acre], presumably his banker originating the participation loan did some kind of due diligence, for benefit of the other participating banks. However, I have no clue what degree of due diligence the originating bank and the consortium banks did. Not enough, is the suggestion of hindsight.

I believe the normal practice is that bank participants defer to the due diligence effort of the originating or syndicating bank. Whether banks will be suing other banks appears to be a future question. I have not seen anything about such activity at present.

But the implication is that credit is not only tightening on the home mortgage front [and the home-buliding front due to the mortgage lead crunch necessarily making the new building prospects less promising]. The implication is a possible glut of small commercial. Jim deal has one office building at Town Center his insurance company occupies, hence that rent flow is covered. The other, diagonally opposite the new City Hall palace, houses Bolton & Menk, or a branch outlet of that firm, an engineering consultancy used a lot by City of Ramsey. Is that a quid pro quo? Don't ask me, ask them, or the City Planning Dept. It looks on the surfact to have a quid pro quo aspect.

If Deal's Plaza is already rented up, he may be fine, if there are unbreakable long term leases. But if tenant grass is greener some other place, tenants have a way of moving.

The other true [not false "city hall" genre] commercial site, anchored by Coborn's, still has a number of store fronts where "For Lease" is the indication.

What the small store site turnover at Maple Grove is, would be useful information to have, but I have not seen any reporting of that. However, the article indicates that bank regulators are locking the barn door now; so where is the horse?

Is it anticipatory, that the economy is going through a contraction and shake-out where regulators foresee new commercial real estate over capacity, or is it a situation already showing up on the ground? Clearly, the small shop sector appears to be trending that way, unless small entrepreneurial thinking is that Town Center, even with the Coborn's anchor, is unpromising. The long-term vacancies at that corner of Town Center suggest something, that way. The question is whether Maple Grove has the same new vacancy problem or a high turnover of shop sites.

The failure of Ramsey Cross Roads, Ramsey Crossways, Crosswise, Crossings, whatever the turkey was intended to be called, is also telling.

No big box attractiveness. No developer to step forward and take that risk. It all suggests that the retail commercial market is presently overbuilt - and there is a capacity glut.

Commercial office or light industry? Everybody's been TIF crazy, Ramsey included, and the city administrator of Rogers, a particularly heavily TIFed place, got sacked after a long tenure and a change in council make-up.

It seems signs point to commercial office and commercial retail and commercial light industrial doldrums. Over capacity always is reflected in recession, and the regulators' efforts as the Pioneer Press reported them, appear to reflect anticipation of recession in now stepping in to curb capacity expansion, but possibly that contraction will happen without existing surviving small businesses finding a dry-up of credit in their sector.

Perhaps, that was one banker blowing smoke, saying he foresaw one niche or sector that was less depressed and distressed than in the areas where his bank promised regulators they would scale back.

One banker, talking his shop, is not a sufficient sample from which to extrapolate.

And - how will CMDC and its SBA lending-consulting aspects prosper; a juggling act while, presumably intending to continue consulting with Ramsey for a fee, over perhaps the very people paying a fee for CMDC advice and aid in gaining finance for projects in Ramsey? *

How, ultimately, will that fare?

Who is on the CMDC board?

Who are the paid advisory professionals?

A councilmember in Ramsey got CMDC help for a shop in Anoka [not in Ramsey's tax base, not helping Ben the taxpayer, that way]. Is this the promising market niche with real opportunity that Culp, the BankFirst executive, was highly touting? Opportunity for who and what, exactly?

*_____________________________
I presume Mulrooney is still on the City of Ramsey, approved and active consultants list. If not, he was, at about the time that somebody, allegedly, was checking Nedegaard out for the City, about when the Town Center Master Development Agreement was being negotiated and written, and signed. He is still, according to a whois, the Administrative Contact for CMDC:

Administrative Contact:
Mulrooney, Michael mike@cmdcbusinessloans.com
Central Minnesota Development Company
1885 Station Parkway NW
Andover, Minnesota 55304
United States
7637843337


And about checking Nedegaard out, this was reported:

Nedegaard assembled the land and owned it. The city didn't have a choice in selecting a developer, Norman said.

"We wanted to do the project and he owned the land," he said.

The city's options were to condemn the land or go ahead with Nedegaard with a letter of credit to protect the city, said Norman.

Although the city consultants did a study before the project started that indicated Nedegaard may not survive financially, it is not unusual for projects to have two to three owners before completion, he said.