Friday, January 22, 2010

A Thought On Thursday's Supreme Judicial Activism

by Cody Lyon

In light of Thursday's apparent Supreme 'judicial activism' now capturing headlines and raising brows from coast to coast....It's important to understand that many important decisions in DC flow from an increasingly flawed system, a government where money fueled lobbyist exert influence on public policy in both parties. For far to long, 'sway' has been sold to the highest bidders from well moneyed interests, all with self serving agendas that in the end lead to actions that impact the day to day lives of millions America's people. It is a system of government bordering on the corrupt, that now more than ever, warrants public dissection and scrutiny by all Americans concerned with the survival of a free and open Democracy. Ultimately, public discourse and passions will demand decisive actions that lead to true reform where all people's voices are heard. And, with that, the hope is that America will see greater transparency, honesty and integrity in its halls of government, enabling elected US government representatives to carry out the true wishes, needs and collective missions of the citizens who voted them into power.

Saturday, January 09, 2010

Economist Harry S. Dent's predictions From one Year ago:

BY CODY LYON- From January 2009, ALM's
**At a January 2009 CORENET Luncheon, Economist Harry S. Dent made interesting projections about the nation's economy and urged investment in tangible assets like infrastructure.

NEW YORK CITY-The current downturn is no ordinary economic crisis and nothing like it has been seen since the 1930s, economist Harry S. Dent told a CoreNet Global audience here on Friday. Author of The Great Depression Ahead: How to Prosper in the Crash Following the Greatest Boom in History, Dent warned attendees at the CoreNet luncheon not to expect miracles from President Barack Obama’s stimulus package.
He predicted that the current administration will put up around $3 trillion to $4 trillion in stimulus to try breaking the current downturn. But Dent said he sees the country as rounding the bottom of the crisis and over the next year and a half, the economy will have what he called a "choppy, wimpy bounce."

"We have a downturn that will not be inflationary," and instead "will be deflationary," he said. Tossing humor into the pain-filled punch, Dent said, "this much stimulus is like taking a whole bottle of Viagra and not having anything happen."

After the chuckles ended, Dent again assumed the tone of a Sunday morning preacher, saying that by late next year, the economy would crash yet again. "This is a classic scenario. We're telling people, particularly in commercial real estate, to be looking at late 2012 or maybe 2013 to come out of this deep mess." He added that this is a good time to refinance.

Dent said demographics ranging from age to location play a tremendous role in how this economy is playing out as well as its impact on commercial real estate. He said baby boomers are retiring, work force entry is shrinking and people are moving away from congestion. Places like Atlanta were once desirable but now are too congested and that instead, families are choosing places like Tucson, AZ and Birmingham, AL.

"In real estate, this is a shakeup," Dent said. "People left standing with cash flow and credit inherit the world, and the banks will give them all the devalued real estate for very low prices."

He also advised that making money should not be the number one priority. "Your goals should be, how do I refinance the property I have, how do I re-structure, sell the ones I can’t and maintain cash flow and credit." Offering the corporate example of General Motors, he said that despite their woes, the company didn't go down as fast and as far as their competitors.

Calling on history, Dent said there was a major crash in Japan in the 1990s and a major crash in the United States in the 1930s and that was it. The intervening years, he said, had been mostly up. "The Depression was a pretty good pattern for what happens, because we are going through a boom, bubble and bust. Stock markets and asset prices overreact and the banking system just gets killed."

Dent said this is a 12 to 14-year process, with the 1929-1942 cycle as the closet analogy. He added that the real estate bottom should occur in 2013.

If we only see a modest rebound from the current stimulus efforts, the stock markets are going to react negatively, Dent said. World markets are going to look at the US dollar and say it’s deflated and that the country has "debased itself and has nothing to show for it." Dent said that ultimately, either the stimulus will not be enough or the government will be forced to stop because its own dollars and financing become too questionable, too quick. He says for the economy to triumph, it will have to wash out the debt.

More specifically, he said there would be some temporary rebounds: stocks for three to six months; maybe commodities for 12 months; perhaps oil, silver and gold. But he warned that the US faces huge trade deficits and that half the debt is owned by foreign governments or entities who would not be as tolerant of the nation's stimulus programs.

To address this, Dent recommended that the greater part of the stimulus package should be directed towards infrastructure projects. At present, it’s about one third of the package.

Dent told the New York audience they should be lobbying for infrastructure project money, that it pays off in the long term and that investments in it help make the most of the most attractive mega-city in America. More broadly, "if you can borrow money when things are down, at least have an investment that pays off in the long term. In 2012 or so, China, Dubai or Japan will say to the United States, 'you guys are bankrupt, you threw away three or four bottles of Viagra.'"

But he added that these countries would be willing to make deals and help us if they get a piece of an investment like infrastructure, which is broadly defined. "If we’re going to add debt to stimulate the economy, you need to be lobbying for infrastructure."

NYC Seeks to get Fresh Produce into Underserved Areas through Economic Incentives to Grocery Store Developers

New York City Gets FRESH With Grocery Incentives in Fresh Produce deprived neighborhoods( From October 2009, GLOBEST.COM-New York)

By Cody Lyon
NEW YORK CITY-To the developer, owner or grocery chain looking for a potentially recession-proof and, perhaps, highly profitable investment opportunity, consider this: New York City, the most densely populated city in the United States, is experiencing a shortage of grocery stores and supermarkets, particularly in lower-income areas where lack of access to fresh produce contributes to higher rates of diabetes and obesity. Hoping to impact health outcomes by encouraging greater private investment in supermarket-challenged areas, the Bloomberg administration is proposing the Food Retail Expansion to Support Health program, or FRESH.
Through enticing zoning initiatives, the proposed action, set to be voted on by the City Council sometime this year, seeks to “facilitate the development of stores that sell a full range of food products,” with an emphasis on perishable items that are fresh.

“Part of what the incentives are meant to do is attract the attention of the business community to the opportunities they’ve been missing out on,” Ben Thomases, New York City’s first ever food policy coordinator, tells He and representatives from other city agencies spearheading the proposal believe that "landlords, developers and supermarket operators haven’t quite put together that the growth of population in these communities, and the lack of high quality supermarkets, is a lucrative opportunity."

In fact, according to research by the Center for an Urban Future’s City Limits magazine, 1.67 million New Yorkers have, on average, less than one square foot of grocery store space each. Of those, 74,178 have no grocery store at all. More recently, the Department of City Planning summed that up more grimly, saying that three million New Yorkers are caught in areas with limited access to fresh produce, areas of the nation’s largest city it calls “food deserts.”

The stats tell a typical tale of urban sociological disparity. According to a 2008 study by the New York City Economic Development Corp. and the Departments of Health and Mental Hygiene and City Planning, a good number of the fresh food denied, live in low to moderate income neighborhoods. That lack of easy access and choice contributes to the fact that some city neighborhoods are home to some of the nation’s highest rates of diabetes and obesity and all the ills that come with it.

“We have wealthy neighborhoods in Manhattan where less than 10% of the adults are obese, and low income neighborhoods in the South Bronx, north and central Brooklyn where more than 30% of the adults are obese,” says Thomases. “Even if you factor out median income or mean educational attainment in an area, you still find that the presence or absence of a quality grocery store makes a substantial difference in health outcomes in that area.”

John A. Williams, senior managing director at Savills, tells that investors are willing, and are in fact, “eager” to invest in the city’s targeted neighborhoods. “We’ve seen performance levels that are among the tops in the nation,” in lower income areas that had been traditionally under-served by supermarkets.

For example, the 50,000-square-foot Harlem Pathmark, which anchors an $85-million retail complex, has been one of the chain’s highest-grossing stores since opening in 1999, according to the NYCEDC. According to a report from the Canyon-Johnson Urban Funds, the Harlem store generates sales of around $800 per square foot.

The proposed FRESH program chose 19 of the city’s 54 community districts as the test fields for the program. Among them are neighborhoods in Northern Manhattan, the Bronx and Brooklyn, with a special target district in Jamaica, Queens. All the districts showed population growth from the 1980 census to the last official count in 2000, unlike a number of economically challenged areas in other parts of the country.

For example, the area served by Brooklyn’s Community Board 5 grew from 154,932 residents in 1980 to 173,198 in 2000. The Bronx’s Community Board 4 grew from 114,309 in 1980 to 139,513 while Manhattan’s CB12 saw a growth spurt from 179,941 to 208,414 in 20 years. Estimates indicate even greater population growth over the years since.

Thomases says despite that growth, supermarkets--many of which had left in the 1970s and 1980s--have not yet returned en masse. He says that some of the tepidness about returning was because rents had gotten so expensive. “When the real estate market was booming so rapidly, rents in those neighborhoods went from being really depressed to being speculatively very high.”

The city’s Planning Commission says the FRESH initiative includes a zoning text amendment with a series of incentives allowing developers and retailers to get certain zoning benefits if they will put a food store in their development. “Having zoning initiatives for building a grocery store is unique,” says Barry Dinerstein, senior planner at the New York City Department of Planning.

Among the nuts and bolts of the proposal he explains to are incentives to residential developers. They will be allowed to increase floor area by one foot for every foot of grocery put into the development, with a maximum of 20,000 square feet. Another incentive eases parking requirements, and the plan also increases the size of as-of-right stores in M1 districts, where development is capped at 10,000 square feet, to 30,000 square feet.

The Department of Planning stresses bringing the grocery stores to the people, since the city’s neighborhoods are pedestrian-centric, meaning that New Yorkers are more likely to walk to their local grocery store than most places in the nation. The department also notes that since New York City is a built environment, stores no larger than 30,000 square feet can usually be built on most commercial corridors.

Williams tells that from the “developer’s standpoint, whatever incentives go into place and allow you to get bigger spaces for tenants” are an inducement. “Obviously, larger supermarket chains would like to operate in the manner they are accustomed to.”

The larger stores “like to be as cookie cutter as they can,” he says. But those companies “are willing to modify concepts and prototypes to get into urban areas.”

As part of an effort to incorporate community concerns, the new zoning was modified to require that any grocery store that comes in be first referred to the local community board. “We assume that will alleviate fears that might exist within the communities, and also provide the operator with insight on the community” he’s investing in, says Dinerstein.

He adds that once the FRESH plan is passed, a point person will be coming on board to handle the new program. Dinerstein says the Planning Department has been in conversation with people who build and develop grocery stores, as well as those who specialize in apartment buildings.

The department has upped its dialogue with people in the supermarket industry including major wholesalers who distribute into the targeted neighborhoods. Dinerstein tells that as soon as the City Council approves the proposal, the initiative will begin a major marketing effort at attracting grocery stores to those neighborhoods.

“Obviously, the economic situation doesn’t make it ideal to open new stores or build new buildings,” says Dinerstein. However, he adds, “if you look at what’s happening with retail, food sales are holding their own, unlike sub-sectors like apparel.”

And, people have to eat. Data from industry trade association the Food Marketing Institute shows that nationwide, supermarket sales in 2008 were up around 5% from the year before to $547.1 billion.

In areas of New York City, where grocery stores are rare, or non-existent, the average price of basic fresh food items--like milk--trends more expensive than areas served by quality supermarkets. Thomases says he’s aware of the issue, and has heard of the FRESH initiative.

But, he says “in any economic system, when there are barriers for new players, it weakens competition for the existing players, and in a more competitive environment, that would create a situation where the existing supermarkets would have better products and competitive prices.” That often motivates shoppers to commute to other areas for their food shopping.

According to the multi-agency ’08 report, the city has the potential to capture around $1 billion in lost grocery sales to suburbs. The report says that loss alone is enough to support more than 100 new grocery stores and supermarkets in New York City. Enticingly, the report promotes the theory that having nearby food retail serves as a selling point in residential real estate listings.

Nonetheless, future supermarkets in New York City neighborhoods will be determined by the private sector who make the investment decisions of when, where and how food retail will be developed. “The challenge on the financing side is pretty straightforward,” according to Williams. In fact, he says that’s not such a big obstacle. “If you have a good solid sponsor or developer, the banks have been traditionally eager to lend in the areas the city is targeting,” since the lenders stand to win points from the community reinvestment act.

Thomases goes further, saying “the FRESH program is designed to create partnerships between developers and supermarket operators. It’s designed to be a win-win.”