Tag: real estate

Bank of America CEO must face mortgage disclosures lawsuit

Seth Anderson1 Comment

Bank of America - Kodachrome
Bank of America – Kodachrome

Continuing the story of a country and its corrupt institutions…

[U.S. District Judge William Pauley] has revived a securities fraud lawsuit accusing Bank of America Corp Chief Executive Brian Moynihan, his predecessor Kenneth Lewis, and others of misleading shareholders about the risk the bank might have to buy back large amounts of soured mortgages.…

…

But Pauley said the new allegations in an amended lawsuit “plausibly establish fraudulent conduct and a culpable state of mind as to all executive defendants” for allegedly concealing the buyback potential when certifying the bank’s financials.

The shareholders alleged they had been misled into buying shares of Charlotte, North Carolina-based Bank of America in 2009 and 2010.

They claimed that Bank of America knew at the time it faced capital shortfalls and large mortgage buybacks, and that recordkeeping in Merscorp Inc’s private Mortgage Electronic Registration Systems registry was so poor that it would not be able to legally foreclose on thousands of delinquent mortgages.

Mortgage finance giants Fannie Mae and Freddie Mac and several large banks had established MERS in 1995 to circumvent the often unwieldy process of transferring ownership of mortgages and recording changes with county clerks.

(click here to continue reading Bank of America CEO, ex-CEO must face mortgage disclosures lawsuit – chicagotribune.com.)

So you’ve probably never heard of the Mortgage Electronic Registration Systems. Or if you have, you wish you hadn’t. 

 

Of course it buys happiness
Of course it buys happiness

You’ve heard the name Mortgage Electronic Registration Systems or “MERS” mentioned in relation to the foreclosure problems in the residential real estate market.

But what is MERS?

It is the company created and owned by all of the big banks to process title to property in the U.S. Approximately 60% of the nation’s residential mortgages are recorded in the name of MERS.

MERS is a shell corporation with no employees, but thousands of officers.

(click here to continue reading What Is MERS and What Role Does It Have in the Foreclosure Mess? (Hint: It Holds 60% of All Mortgages, But Has ZERO Employees) | Washington’s Blog.)

Think Twice About Becoming a Landlord
Think Twice About Becoming a Landlord

Matt Taibbi adds, in his customary style:

The idea behind MERS was to wipe away centuries of legal tradition that mandated the physical transfer of loan notes and ownership information. Whereas lenders once were required to physically register with county clerk offices every time a mortgage loan was extended or re-sold, MERS provided an “electronic registry” of mortgage notes where all such transfers were recorded in the wiry brain of a giant computer instead of on paper.

Instead of the individual banks or lenders registering with the counties each time a loan was sold or re-sold, MERS would handle the initial registration and then become the “nominal” note-holder. Then, each time the note was passed on, MERS would record the transaction in its computer — but no matter who the actual owner of the note was, MERS would remain the legally registered assignee of the note.

Imagine, say, a family of twelve, two elderly parents in Iowa and ten adult children scattered in different states all over the country. Mom and Dad on the farm own one Ford F-150 that they owe $300 a month on. Every month, the truck gets passed to a different family member, who in turn becomes responsible for the monthly payment. But no matter who has the car and whose turn it is to come up with the $300, the truck stays in Dad’s name and the money, in the end, comes to Ford Finance via Dad’s checking account.

Looking at this as an individual and unique case, you wouldn’t think there was much that was inherently wrong with this setup. Obviously the family arrangement violates the spirit of many laws and procedures — vehicle registration (from month to month, the true owner of the car is hidden from the state), credit application (Pops technically committed credit fraud if he got the car loan in his own name knowing the children would actually be paying), and taxes/fees (the state misses out on its registration fees every month, when the car is informally “sold” from child to child without the nominal paperwork fees being paid to the DMV of the state in question). But again, looking at this as an individual case, not many people would say any of these “violations” were major moral transgressions, if they were really moral transgressions at all. After all, this is family!

But once you take this setup and institutionalize it, and employ it everywhere on a vast scale, it becomes seriously problematic. This is particularly true if, say, Pop begins allowing his kids to “rent” the car out to non-family members, so long as they kick a small fee upstairs. Say it’s March and Pop gives the truck to son Jimmy in Toledo; in April Jimmy gives the truck to his buddy Rick in Akron, charging the $300 payment plus a $20 convenience fee. May: Jimmy gives the car to his girlfriend Trudy in Phoenix, telling her to wire $300 plus another $20 back to Pops in Iowa; she in turn lends the car to her occasional lesbian love interest Madison, who begins renting the car on a day-to-day basis in Tuba City as part of her family’s Painted Desert Resort and Tourism business, etc. etc. And she’s now kicking the fees back to Iowa.

Within a year Pop is buying fifty vehicles an hour and shuttling cars to new customers all over the country, collecting millions in fees every day; he becomes a billion-dollar corporate fixture, hiring the entire local Elks club to come with him to work as support staff.

So now, to take this already absurdly overwrought metaphor one final painful step further, there is a string of grisly homicides being committed on highways across America. Witnesses spot that original F-150 truck and the license plates at each of the murder scenes, but when cops come looking for the truck owner, they find old Pop in a wheelchair in Iowa, alibied on the night of every crime by forty-five fellow members of the Dubuque Elks. They drag Pop into the station to question him, but he won’t give up which of his boys did the crimes — hell, he doesn’t know, anyway.  

This, roughly, is what MERS is. The functional effect of MERS is to create an obfuscatory wall between the homeowner and the actual owner of his mortgage loan. The problem with MERS is a paradox at the heart of the “ownership” question. On the one hand, MERS is the legal assignee of a lot of these mortgage notes. On the other hand, it’s not the “real” owner of the notes, in any way that could ever help you, or the state, or the investors in mortgage-backed securities.

(click here to continue reading An Extremely Long Metaphor to Explain Mortgage Chaos | Matt Taibbi | Rolling Stone.)

Sounds pretty fucked up to me. But then I’m not an expert. 

Never-Ending Condo Construction
Never-Ending Condo Construction

and from Shah Gilani:

In order to easily buy and sell mortgages between themselves so that these loans might be repackaged, securitized and then sold to investors as mortgage-backed securities, banks and other lenders needed a quick way to “trade” individual mortgages. They created a company called Mortgage Electronic Registration Systems (MERS). This group includes Bank of America Corp. (NYSE: BAC), GMAC LLC (NYSE: GMA), Wells Fargo & Co. (NYSE: WFC), Washington Mutual (now owned by JPMorgan Chase), the United Guaranty Corp. unit of American International Group Inc. (NYSE: AIG), Fannie Mae (OTC: FNMA), Freddie Mac (OTC: FMCC), mortgage-servicing companies and other similarly interested members.

You may not realize it, but at your home-purchase “closing,” you sign a document that appoints MERS as the “nominee” for the lender that granted you a mortgage. That gives the nominee the right to flip your mortgage to any other bank or lender it chooses. That’s how banks move mortgages around to package them into different securities.

But that brings us to the crux of the controversy: Every time there’s change on the title (a change occurs when the nominee switches the lender on your title out for another), local governments require that a new title be recorded. Of course, those governments – the county or municipality that you live in – also charge a “recording fee.” MERS also charges a fee, but it’s a lot less than government recording fees.

Here’s the problem. In creating MERS, these institutions actually changed the land-title system that this country – for much of its history – has relied upon to determine legal ownership status of land titleholders.

Not only did the lenders sidestep (read that to mean avoid) paying billions of dollars in fees to local governments, they paid themselves from the fees that MERS collected.

MERS is facing class-action lawsuits and civil racketeering suits around the country and their members are being individually named in all these suits. One suit alleges that MERS owes California a potential $60 billion to $120 billion in unpaid land-recording fees.

If suits against MERS and all its members are successful, unpaid recording fees and fines (that can be as much as $10,000 per incident) would make every one of them insolvent.

And you wonder what the Federal Reserve meant when it warned of “potential negative shocks?”

The bottom line for investors is that until all these issues are cleaned up (which might take years, or even decades) – or until there’s perhaps some sort of legislative clarity that eases uncertainty – investors face the threat of a severe “correction” in any or all of the markets that have risen on the hope that the long-hoped-for U.S. recovery is finally taking hold.

(click here to continue reading What You Don’t Know about “Mortgagegate” Could Crush the U.S. Banking System – Money Morning.)

In New Austin, Accommodating the Broken Spoke Honkey-Tonk

Seth Anderson0 comment

Vintage
Vintage

Same argument raged when I lived in Austin – does everything old have to vanish to focus on what’s new and sleek? Les Ami, Captain Quakenbush’s, and many, many other institutions of the Austin I grew up in are no more.

Old Austin clashes with New Austin nearly every day, causing much worry among the city’s natives: Will these new condos and luxury hotels rub out everything that makes their weird city great? Will the shows for hipster musicians dry up? Is $10 guacamole really worth it?…

A generation of Austinites has unsuccessfully battled against losing iconic institutions like the Armadillo World Headquarters, Liberty Lunch and Las Manitas — all razed to make way for New Austin. But one developer is trying to prove that the old and new can cohabit.

For the last eight months, the developer, Transwestern, has been overhauling a seven-acre plot in South Austin. The area is a mess: bulldozers and excavators sit among tall piles of dirt and rock; 20-foot-high concrete piers jut out of the ground; and a jagged eight-foot trench is framed by hundreds of feet of orange-and-white highway barriers lining the road’s shoulder.

At the center of this chaotic scene sits an old, squat red building, dwarfed by pipes and slabs, looking like the last proud holdout in a world gone mad. This is the Broken Spoke, and it is arguably the greatest honky-tonk of all time. The Spoke, which was built by James White in 1964, has hosted everyone from Bob Wills and Willie Nelson to an unknown George Strait. It attracts tourists from Japan and England and celebrities from Hollywood. They gawk and drink and dance at the most famous club in a city that bills itself as the Live Music Capital of the World.

(click here to continue reading In New Austin, Accommodating the Broken Spoke Honkey-Tonk – NYTimes.com.)

Waterloo Records
Waterloo Records

Of the places mentioned in this NYT article, I’ve been in the Broken Spoke, eaten eggs many times at Las Manitas, and where I first stayed in Austin1 was a scant two blocks from the Armadillo2, but by far the biggest loss to me was Liberty Lunch. I went to probably over 100 live music events there, from the time I was a snot-nosed 15 year old in the mosh pits, up until I moved away. I saw punk rock, heavy metal, reggae, acts like Thomas Mapfumo, Burning Spear, Sonic Youth, Bob Mould, Timbuk3, yadda yadda. I would have seen The Pogues, circa 1989, but I got too drunk and fell asleep on the Congress Avenue bus. J’Net Ward was some sort of business partner at the restaurant I worked at to put myself through school3, and I always remember her being an all-around cool person.  

Your So Happy (sic)
Your So Happy (sic)

Anyway, let’s hope the Broken Spoke doesn’t get plowed under too.

Willie Nelson Blvd
Willie Nelson Blvd

Footnotes:
  1. in the summer before my entire family moved to Austin [↩]
  2. even though it was already shut down by then, about to be replaced by a corporate park [↩]
  3. Magnolia Cafe South [↩]

Merchandise Mart Attracts Tech Start-Ups in Chicago

Seth Anderson0 comment

Don't Pretend Nothing Happened On that Day
Don’t Pretend Nothing Happened On that Day

I’ve mentioned this, at least in passing, and maybe only on Twitter, but the Merchandise Mart is now home to several tech businesses, as is the entire area. Enough of a trend that the stately New York Times noticed:

Once a dormant area of empty warehouses, the River North section of Chicago has evolved into a nexus of dining, night life and, most recently, an aspiring rival to Silicon Valley. Its 45 square blocks are home to the headquarters of Groupon, the Chicago offices of Google and several hundred technology start-ups.

Now River North’s digital transformation is extending to one of the neighborhood’s most storied — and decidedly low-tech — commercial addresses. The Merchandise Mart, a Depression-era behemoth of limestone, concrete and steel that has long been synonymous with fabric bolts and furniture, is becoming a destination for the city’s digital set.

“River North as an area has become very tech-savvy and very tech-cool,” said Todd O’Hara, founder and chief executive of Toodalu, an app-building start-up that moved into the building this year. “The Merchandise Mart is definitely kind of the pinnacle of all of it because of everyone coming in.”

The biggest newcomer, Motorola Mobility, plans to relocate its headquarters from the suburb of Libertyville to four floors of the mart next year, as well as take up a big chunk of the building’s roof space for entertaining and group events.

It is the third major technology company to sign a lease with the mart since December, and 175 or so small tech businesses like Toodalu sublet space.

(click here to continue reading Merchandise Mart in Chicago Attracts Tech Start-Ups – NYTimes.com.)

I’d include the nearby West Loop area too, there are plenty of examples there too – Threadless and so on. I think it’s cool, since for the most part, tech businesses are happy with industrial-esque spaces with exposed brick and mechanicals. In other words, they are not moving in and destroying every building in their wake to build cookie-cutter WalMarts and Targets, or bland corporate HQ. Schafer Condon Carter even restored a beautiful old wreck of a building on W. Madison.1 

Streaking Home
Streaking Home

And the Merchandise Mart, while a beautiful building on the outside, does need a little bit of modernization, at least from what I’ve seen of the interior.

The new tenants also cite the proximity of commuter rail lines, the abundance of parking, bike locker storage — and the energy around the River North neighborhood. According to BuiltInChicago.org, a Web site dedicated to the tech sector, the area had nearly 7,500 tech jobs as of last month.

“This is, like, the hottest place in the city right now,” said Kevin Willer, the chief executive of the Chicagoland Entrepreneurial Center, which manages 1871, a nonprofit digital hub that provides space to start-ups in the mart.

That hub has helped convert the 12th floor into a lively area of curving sofas and people on Razor scooters, but even the mart’s new fans say the aging giant remains a place largely associated with “a lot of dark, dreary rooms,” as Mr. O’Hara, the Toodalu founder, said.

Opened in 1930 by Marshall Field & Company, now defunct, the mart had been owned by the Kennedy family under Joseph P. Kennedy Enterprises for more than a half century before being sold to Vornado in 1998. With 4.2 million gross square feet, it is among the largest commercial buildings in the world.

The recent influx of tech tenants has brought stark change. The designers of the tech offices have been allowed to gut and renovate spaces. (In the process, some historical gems, like a metal and brick fire door found at 1871, were left to meld with the newly designed areas.) The mart is installing a distributed-antenna system, to be finished by year-end, which will improve cellphone reception and wireless connectivity throughout the building.

Some of the tech companies are configuring their new spaces with a hopeful eye to the future.

Razorfish, the digital marketing and advertising company owned by Publicis, consolidated its disparate Chicago offices into the mart’s 12th floor nearly a year ago, installing conference tables of reclaimed wood and a keg refrigerator with two rotating beers on draft.

Razorfish hired about 100 more people since opening its Chicago office, which was built for a capacity of 400, according to Lori Schram, the company’s facilities manager, and plans to expand its space within the mart.

And 1871, whose name alludes to the year of the great Chicago fire and the innovation that happened during the rebuilding of the city, has so far accepted 175 companies out of 600 applications for space, Mr. Willer said. Tenants of 1871 pay monthly rent for either shared or reserved space and qualify for seminars, tech events and access to venture capital firms and angel investors in the hub.

and that’s a good excuse as any to show a few more of my favorite photos taken in the general area…

 Merchandise Mart Reflects

Merchandise Mart Reflects

Easist Thing I Ever Did
Easiest Thing I Ever Did

Dusk in River North
Dusk in River North

Caresses of Light
Caresses of Light

Sometimes The Sky Is Too Bright
Sometimes The Sky Is Too Bright

Meditation Upon a River
Meditation Upon a River

Destinations
Destinations

Fall Nocturne
Fall Nocturne

More of my photos of the Merchandise Mart, of River North, of Wolf Point…

Footnotes:
  1. though SCC is not a tech company, but an ad agency. Close enough. [↩]

TIF May Need a Boost in Poor Neighborhoods

Seth Anderson0 comment

Leftover Stories

Leftover Stories

The problem I have with Chicago’s TIF program isn’t the program itself, but rather that it has turned into a form of corporate welfare for politically connected developers. Too much of the money goes where it isn’t needed, instead of where urban blight actually exists.

Local residents once called the far western stretch of Madison Street the downtown of the West Side. That was before the race riots and factory closings of the late 1960s sent this area around the thriving commercial corridor into a tailspin of population loss, poverty, crime and blight.

When Chicago set out over a decade ago to turn around the crumbling retail area, it created a tax increment financing district along Madison Street from West Garfield Park to the city limit at Austin Avenue. But halfway through the TIF’s 23-year life span, the city has spent only $4.8 million on commercial revitalization projects there, and western Madison Street remains a place of struggling retail strips and vacant, decaying blocks.

Criticism of TIFs under Mayor Richard M. Daley focused largely on his administration’s heavy spending of TIF funds in and around Chicago’s thriving downtown. But the scant investment along Madison raises a key question not answered by a TIF reform task force created by Mayor Rahm Emanuel: Can the city’s primary economic development tool help reverse decades of economic decline and physical decay in Chicago’s poorest neighborhoods?

The TIF program was created 27 years ago specifically to spur development in the city’s blighted areas. When the city creates a district, it freezes the amount of property taxes that local governments can collect within a particular area for a period of 23 years. If property values rise during that time, the city is required to spend the additional property-tax revenue — the tax increment — on economically beneficial projects within the district or in a bordering one.

Whether they are public works or business subsidies, the projects are meant to catalyze development within the district. But if property values do not rise and create money for new investment, TIFs are virtually powerless to spur growth.

“It’s very difficult for those poor places to be turned around by this tool because the property taxes aren’t going to generate enough revenue to do the massive push that you need,” said David Merriman, an economics professor and director of the Institute of Government and Public Affairs at the University of Illinois. “There’s got to be development to generate revenue, and that’s probably not going to work unless you already have some market momentum.”

According to a Chicago News Cooperative analysis of the last eight years of Mr. Daley’s tenure — during which the city escalated TIF investment — only 23 percent of the $1.84 billion in TIF funds spent went to districts in the city’s poorest neighborhoods.

(click here to continue reading TIF May Need a Boost in Poor Neighborhoods – NYTimes.com.)

Twenty three percent is a woefully small percentage. Is the TIF program enough to spur neighborhood revitalization? Who knows, what’s obvious is that nobody is even trying.

The Earth Was Here
The Earth Was Here

 

dismissals
dismissals

One Third Of Chicago in TIF Zone

Seth Anderson1 Comment

Interest is Going Up - Ilford HP5
Interest is Going Up – Ilford HP5

Juan-Pablo Valez of the New York Times adds this bit of detail to the Chicago TIF story that we’ve been complaining about for a while1

But many people remain unswayed. They point out that much of the TIF money was diverted from public schools, parks, libraries and other taxing districts and was instead put into accounts that Mr. Daley controlled and kept shrouded in secrecy.

“The findings do nothing to dissuade what had been my longstanding concerns, which were transparency in the process,” said John Fritchey, a Cook County commissioner.

Mr. Fritchey, a North Side Democrat, irked Mr. Daley last year when, as a state representative, he introduced legislation that would have funneled TIF money directly to the Chicago Public Schools.

Mr. Fritchey and other elected officials in Chicago have said that hundreds of millions of dollars are sitting in the accounts of scores of TIF districts, even after Mr. Daley tapped the TIF account last year to help balance the city’s 2011 budget.

“There is no question that several good projects came to be through the use of TIF funds,” Mr. Fritchey said. “The bigger question is, Is the city getting its money’s worth out of that investment? It’s a troubling prospect to give millions of taxpayer dollars to projects that are also generating millions in developer fees.”

Mr. Daley vigorously championed the use of TIF. By the end of his tenure in May, city officials had established more than 160 TIF districts that covered about one-third of Chicago. In total, the districts capture about $500 million a year, city and Cook County documents show.

The amount is equal to about one-sixth of the city’s annual core budget, although under Mr. Daley the money was not tracked or approved as part of the budgeting process, and his administration provided only a vague accounting of its TIF activities.

 

(click here to continue reading TIF Aided Public and Private Projects Almost Evenly, Analysis Shows – NYTimes.com.)

United Airlines Headquarters
United Airlines Headquarters

If 33% of the city is located in a TIF development zone, doesn’t it effectively defeat the purpose of tax? Especially when so much of the money gets funneled to politically connected developers? Perhaps in addition to adding more transparency to the process, before a project gets funded, the voters of the district should get to vote directly on the decision. Ha.

Now, as aides to Mayor Rahm Emanuel review the city’s use of TIF amid the backdrop of severe budget shortfalls, an analysis by the Chicago News Cooperative shows that TIF spending was allocated almost evenly between public works and subsidies for private interests.

The examination of city TIF records for the last eight years of Mr. Daley’s tenure reveals that his administration spent about $1.7 billion in TIF money toward public and private endeavors. While about $700 million was spent to the benefit of private interests, roughly $865 million went to public projects like school construction, street repairs and Chicago Transit Authority stations and tracks. Another $1 billion paid off bonds issued to finance public and private projects, for a total outlay of almost $3 billion, the city records show…

Developers received $505 million in subsidies, just over 30 percent of the total TIF money spent by Mr. Daley. Those payments included $5.4 million to United Airlines to move its headquarters to Willis Tower, $13.7 million for the insurance giant CNA to renovate its South Loop headquarters and $8.5 million to help renovate the Carbide and Carbon building to house the Hard Rock Hotel on Michigan Avenue.

The city also spent more than $200 million buying properties, razing vacant buildings and cleaning up toxic land, mostly for the benefit of private developments.
Another $90 million, or 5 percent of total spending, was used for program administration, consulting and legal services, and for job training for businesses in select districts.

Carbon and Carbide Building blues
Carbon and Carbide Building blues

Giving taxpayer money to asshole corporations like CNA and United Airlines (and potentially the thuggish Ayn Randians at the Chicago Mercantile Exchange) really irks me. What do they need my cash contributions for? I’d rather divert my tax dollars back to schools (even though I don’t have children), roads, bike lanes, water mains, yadda yadda…

Footnotes:
  1. and we’re not the only, nor the best source of news about TIF slush funds btw [↩]

Walk Away Guilt Free

Seth Anderson1 Comment

Walk away from your negative equity house. Wow, that’s some harsh advice. Luckily I’m not in this situation, but I know some people who are. As Brett Arends writes, the economy is amoral, banks are not your friends, why should you be theirs?

Can't Get Out of Here

Millions of Americans are now deeply underwater on their mortgage. If you’re among them, you need to stop living in a dream world and give serious thought to walking away from the debt.

No, you shouldn’t feel bad about it, and you shouldn’t feel guilty. The lenders would do the same to you—in a heartbeat. You need to put yourself and your family’s finances first.

How widespread is this? More than 11 million families are in “negative equity”—that is, they owe more on their home than it is worth—according to a report out this week by FirstAmerican Core Logic, a real-estate data firm. That’s a quarter of all families with mortgages. And for more than five million of those borrowers, the crisis is extreme: They are more than 25% underwater—the equivalent of having a $100,000 loan on a property now worth just $75,000 or less. That’s true for a fifth of mortgage holders in California, nearly a third in Florida and an incredible 50% in Nevada.

[Click to continue reading ROI: When It’s OK to Walk Away From Your Home – WSJ.com]

If you are 25% underwater, your home would have to raise 33% in value before you break even. What’s the time frame of that? Will your home value increase 3% a year, every year? So when do the math to see when your equity is no longer “negative”, it isn’t pretty.

As far as legal consequences, there might not be any…

Are you worried about the legal consequences of walking away? Certainly, you should check with a lawyer before doing anything, but the consequences will probably be more limited than you think.

In “non-recourse” states, the mortgage lender may have no right to come after you for any shortfall. They may have no option but to take the home, sell it and eat the loss. According to a survey last year by the Federal Reserve Bank of Richmond, such states include negative-equity hot spots California and Arizona. Even in “recourse” states, lenders may have limited ability to come after you. Often they’d have to jump a lot of legal hurdles, and it’s just not worth it for them. They’re swamped with cases anyway.

“In my experience, right now they’re not really going after anyone,” says Richard Nemeth, a bankruptcy attorney in Cleveland. “They just don’t have the resources.”

So what are the non-recourse states, anyway?

Here’s one list, but I’d make sure to discuss options with a lawyer or two before doing any drastic deeds.

Alaska
Arizona
Arkansas
California
Colorado
District of Columbia (Washington DC)
Georgia
Hawaii
Idaho
Mississippi
Missouri
Montana (if non-judicial foreclosure is used)
Nevada – (lender can get a deficiency judgment)
New Hampshire
Oregon
Tennessee
Texas (lender can get a deficiency judgment)
Virginia
Washington
West Virginia

The following states allow non-judicial foreclosure:

Michigan
Minnesota
North Carolina
Rhode Island
South Dakota
Utah
Wyoming

[Click to continue reading WikiAnswers – Which states are non-recourse states for mortgage debt]

Unions Push to Finish Tallest Tower in Chicago

Seth Anderson0 comment

The 2,000 foot planned condo tower, designed by Calatrava, has been stuck at hole-in-the-ground status for a while now. [Wikipedia has a few photos, including this one]. Wonder if this latest surge will help complete the project?


[artist’s rendition of the Spire, via Wikipedia]

The stalled construction of North America’s tallest building, a 150-story luxury residential tower planned for downtown, may get a boost from unionized construction workers desperate for jobs.

Any effort to save the Chicago Spire faces major hurdles, especially coming after a real-estate glut that flooded Chicago with new condos. Plans call for the 2,000-foot-high Spire to have nearly 1,200 units — more than are expected to be completed for the entire downtown area in 2010. Prices start at $750,000, with the bulk of the condos costing $2 million to $15 million.

Workers broke ground with great fanfare in 2007, but the project stalled last year amid the financial crisis when funding dried up. That left many doubtful that the Santiago Calatrava-designed tower would ever emerge from the circular foundation that sits about a block from Lake Michigan.

Now a group of union pension funds is conducting due diligence on a plan to lend $170 million to Irish developer Shelbourne Development Group, said Tom Villanova, president of the Chicago and Cook County Building and Construction Trades Council, which represents 24 unions with some 100,000 members.[Click to continue reading Push to Finish Tallest Tower – WSJ.com]
[Non-WSJ subscribers use this Digg-enabled link]

The Chicago Spire website is a flash-centric p.o.s., but if flash annoys you less than it annoys me, browse the Chicago Spire website here for lots of photos, descriptions and the like.

and the failed Olympics bid continues to have a ripple effect on the Chicago economy:

The Spire got an unlikely break in early October with the demise of Chicago’s hopes to host the 2016 Olympics. Mr. Villanova, who was on Chicago’s Olympic bid committee, said the unions had committed to help fund the Olympic Village to house athletes. “When that went south on us, we started focusing on the Spire project,” he said.

After cranking out an average of 4,500 new condo units a year downtown for the past four years, Chicago developers expect to complete 900 units next year and fewer than 100 in 2012, said Gail Lissner, vice president of Appraisal Research Counselors, a Chicago appraisal and consulting firm. “We don’t see cranes in the sky anymore,” Ms. Lisser said, which could mean the Spire would arrive in a much-changed market in four or five years.

Arthur Schack Tosses Out Cases, Brooklyn Style

Seth Anderson0 comment

Awesome, Judge Schack is my new hero:

A Little to the Left

The judge, Arthur M. Schack, 64, fashions himself a judicial Don Quixote, tilting at the phalanxes of bankers, foreclosure facilitators and lawyers who file motions by the bale. While national debate focuses on bank bailouts and federal aid for homeowners that has been slow in coming, the hard reckonings of the foreclosure crisis are being made in courts like his, and Justice Schack’s sympathies are clear.

He has tossed out 46 of the 102 foreclosure motions that have come before him in the last two years. And his often scathing decisions, peppered with allusions to the Croesus-like wealth of bank presidents, have attracted the respectful attention of judges and lawyers from Florida to Ohio to California. At recent judicial conferences in Chicago and Arizona, several panelists praised his rulings as a possible national model.

…Justice Schack, like a handful of state and federal judges, has taken a magnifying glass to the mortgage industry. In the gilded haste of the past decade, bankers handed out millions of mortgages — with terms good, bad and exotically ugly — then repackaged those loans for sale to investors from Connecticut to Singapore. Sloppiness reigned. So many papers have been lost, signatures misplaced and documents dated inaccurately that it is often not clear which bank owns the mortgage.

Justice Schack’s take is straightforward, and sends a tremor through some bank suites: If a bank cannot prove ownership, it cannot foreclose.

“If you are going to take away someone’s house, everything should be legal and correct,” he said. “I’m a strange guy — I don’t want to put a family on the street unless it’s legitimate.”

[Click to continue reading As a Foreclosure Judge, Arthur Schack Tosses Out Cases, Brooklyn Style – NYTimes.com]

The bankers and real estate firms whine about his rulings of course, but the Judge is only following the law. I hope more judges follow Justice Schack’s model and stop turning a blind eye to the careless mistakes of greedy banks.

Half Done

“To the extent that judges examine these papers, they find exactly the same errors that Judge Schack does,” said Katherine M. Porter, a visiting professor at the School of Law at the University of California, Berkeley, and a national expert in consumer credit law. “His rulings are hardly revolutionary; it’s unusual only because we so rarely hold large corporations to the rules.”

and that right there is the crux of our societal problem. Companies like Blackwater, Exxon Mobile, WalMart and General Electric that frequently break laws because they know the fines, if any, are going to be so small as to not even show up on a year-end balance sheet, companies like that should be forced to surrender their corporate charters. Hey, it’s capitalism, there will be new corporations to take their place.

Dwyane Wade buys Chicago townhouse

Seth Anderson0 comment

Summer Hoops - Lomo
[Summer Hoops, Rogers Park somewhere]

Sam Smith reports:

Has Dwyane Wade purchased his Chicago dream house as a prelude to signing a free agent contract with the Bulls next summer?
Or is Wade just a clever real estate speculator at a good time?

Prying eyes want to know. And at least basketball franchises in Chicago and Miami.

ChicagoMag.com’s real estate blog reported Monday that Wade has purchased a four story riverfront townhouse in Kinzie Park, which is just west of the Loop across the river from the East Bank Club. The price is said to be about $1.4 million, which hardly seems like what you’d pay for an occasional getaway place back in your hometown if you are planning to establish roots in Miami by signing a major extension.

[Click to continue reading Chicago Bulls Blog: Dwyane Wade buys $1.4 million Chicago townhouse]

Hey, DWade for Ben Gordon1 is definite upgrade; even though Dwyane Wade is injury-prone, he is certainly one of the top guards in the NBA.

Sam Smith still doesn’t believe in outgoing links, but Google is2 our friend:

The Kinzie Park townhouse is part of a development of former industrial parcels across the river from the East Bank Club that also includes high-rise condos. The townhouses have private yards fronting the river along a shared promenade. Wade bought a 3,900-square-foot unit with a two-car garage and a rooftop deck.

The property was on the market for almost a year, says the seller’s agent, Harold Blum, and it sat vacant for a while. “But then we furnished it and we got two offers,” says Blum, who would not reveal whether Wade’s offer was the higher of the two. Wade closed on the sale in late June, but information on the deal only surfaced recently at the Cook County Recorder of Deeds.

[Click to continue reading NBA and Olympic Star Buys in River North – Deal Estate – August 2009 – Chicago]

Coincidentally, Flickr-eeno phule and I were just walking past here a couple weeks ago, albeit on the other side of the river. It doesn’t look like I took any photos of this area, but then I didn’t see anything photo-worthy either. I’d like having DWade as a near-neighbor, not that I’m much of a celebrity stalker (well, except for the time Michelle Obama was eating across the street). The Chicago Bulls can dream, right?

Footnotes:
  1. who signed with the Detroit Pistons over the off-season [↩]
  2. usually [↩]

Bids Start at $300,000 for Chicago’s Old Post Office

Seth Anderson1 Comment

United States Post Office Parcel Post Entrance
[address listed as 358 W Harrison St, Chicago, IL, but I always think of it being on the corner of S. Canal and Van Buren – directly north of where Congress turns into the Eisenhower Expressway, aka I-290]

After 13 years of failed redevelopment efforts, the United States Postal Service is giving up and auctioning off its largest vacant property: the hulking 2.7-million-square-foot old central post office here.

The suggested opening bid for the auction is $300,000, which is less than an individual condominium goes for in many of the surrounding downtown buildings.

[Click to continue reading Bids Start at $300,000 for Chicago’s Old Post Office – NYTimes.com]

Chicago Central Post Office

[corner of Van Buren and S. Canal]

The building is actually quite a lovely structure, I hope it doesn’t get torn down to have a mixed-use building in its place, or shudder, condos. The article doesn’t mention what property tax on it would be1, but even annual maintenance, utility and security costs are nearly $2,5000,000

The behemoth, which is nine stories tall with 14-story corner towers, is several blocks southwest of the Loop, the downtown central business district. It was designed by Graham, Anderson, Probst & White in a Neoclassical Art Deco style and built in phases from 1921 to 1932. (Graham, Anderson is the firm responsible for Chicago landmarks like the Wrigley Building, the Civic Opera House and Union Station.) The total cost was $22 million.

A peculiarity of the building is that it was built using air rights over railroad tracks that terminate several blocks to the north, at Union Station, and so it has no basement. In addition, the Congress Expressway literally passes through the structure. The two-story-high tunnel carries six lanes of traffic.

I’ve never been inside2, but I want to

“I miss the grandeur of the lobby,” said Musette Henley, who worked in the building in a variety of jobs from 1961 until its closing day and is now a customer relations representative in the new facility. “They don’t build buildings like that anymore.”

The imposing Neoclassical lobby at the north end of the building, which has cream-colored marble walls and an elaborate inlaid marble floor, is certainly a stunner: 340 feet long and 40 feet wide, with a towering 38-foot ceiling.

Chicago Central Post Office North view

[Van Buren side]

—
couple other photos:
United States Post Office Chicago River view - Agfa Scala

the Chicago River side

United States Post Office East view

Footnotes:
  1. astronomical I assume [↩]
  2. other than by watching the Batman movie, The Dark Knight [↩]

Actors’ Equity Association’s new home

Seth Anderson0 comment

557 W Randolph St, formerly the headquarters of Zonta International, will be the new home of the 48,000 member Actor’s Equity Association.

New Actors' Equity Association headquarters at 557 W Randolph St

Actors’ Equity Association, the union of professional actors and stage managers in the United States, has purchased its own building on Randolph Street just a block or two west of the core of Chicago’s theater district. And according to Steven DiPaola, the union’s assistant executive director for finance and administration, Equity is considering moving some of the union’s national back-office functions from New York to Chicago.

[From Actors’ Equity buys a building in Chicago, will expand presence here | The Theater Loop – News from America’s hottest theater city]

According to Chris Jones, the building at 557 W. Randolph was built in 1855, and is one of the few that survived the 1871 Chicago fire. I wonder if there will events held there? Celebrity sightings?

48-Story Building proposed for the West Loop

Seth Anderson0 comment

Oh joy, another skyscraper to impede our view.

Crowne Plaza at Night
[Crowne Plaza building at night]

A developer has announced plans to build the tallest building west of the Dan Ryan Expressway, a $150 million, 48-story apartment-hotel tower at West Madison and North Halsted streets. The announcement met mixed responses at an initial West Loop community meeting Tuesday night.

The development includes 48 floors of apartments atop a base with ground-level retail, six stories of parking and a ballroom that bridges to the nearby Crowne Plaza Hotel at 733 W. Madison St. David Friedman, the developer and hotel owner, has a target completion date of 2011 for the project.

Friedman, whose company FF Realty Inc. owns four luxury apartment buildings and five hotels – including the West Loop’s Crowne Plaza – will continue to hold meetings to gauge community reaction before applying for a new zoning designation that would allow the 500-foot structure. The proposed location, the Crowne Plaza parking lot, is currently zoned for buildings up to 300 feet in height.

[Click to continue reading 48-story West Loop tower pitched]

Greektown, as this part of the West Loop is often called, already suffers from traffic congestion; we shall see if the public parking proposed for this building will help.

The elliptical-shaped glass building would serve as an apartment-hotel, with amenities like room service and maid service, but unlike, for example, the Trump Tower building – a downtown condo-hotel complex completed this year – its 514 residential units, a mixture of studios and one and two bedrooms, will be leased. Typically, only half of luxury renters require parking, so some of the six-story lot’s 553 spaces would be public parking, a growing necessity in the West Loop, where expensive hourly fees in garages and meters are draining drivers’ wallets.

LEED certified Bed and Breakfast

Seth Anderson1 Comment

My neighbor, Donnie Madia1 wants to open a “green” bed and breakfast over in my old stomping grounds (I lived on Paulina and Cortez in the mid-1990s). Cool, hope he succeeds.

Donnie Madia in front of Avec

A local builder would like to covert a building near Division and Paulina into a boutique, eco-friendly hotel with retail offerings.

Dan Sheehy of Third Coast Construction imagines the project including a small restaurant on the first floor, shopping and a 13-room hotel.

Sheehy and his partners want to develop the project in the building at 1659 W. Division, which currently houses Pump Shoes and Accessories. The shoe store is under a long term lease.

If the plans are approved by 1st Ward Alderman Manny Flores and the city council, construction isn’t expected to begin for 14 to 16 months.

Sheehy presented his plans to neighbors at a recent meeting of the East Village Association, and got a warm response.

Previously, the EVA board unanimously voted not to oppose a special-use zoning permit that the hotel would need to open. After a half hour presentation, EVA’s general membership unanimously agreed with the board’s decision.

“The entrance to the building will be on Paulina Ave., giving the hotel a ‘neighborhood feel,'” Sheehy said at the meeting.

“We love the building and we’re not going to tear it down,” Sheehy said. “It’s almost like a call-back – we’re going to re-create it.” The building had in the ’70s functioned as a tavern and a restaurant.

Sheehy, who focuses on sustainable developments, is planning to pursue Leadership in Energy and Environmental Design, or LEED, certification for the building and expedite processing of building permits through the city’s green permit program.

[Click to continue reading Imagining a ‘modern day’ bed and breakfast]

No Loitering -or else!

Footnotes:
  1. of Blackbird, Avec and The Publican fame [↩]

IDEO moving to West Loop

Seth Anderson0 comment

International design firm IDEO moves to the West Loop, well one office at least

Athenian Candle Co

Palo Alto, Calif.-based industrial design firm IDEO is increasing the size of its local office about 25%, to 20,442 square feet, as part of a move from Evanston to the building, 626 W. Jackson Blvd.
IDEO, whose design credits include the standup toothpaste tube, has signed a 10-year lease for the top two floors of the eight-story structure, says Menahem Deitcher, managing principal with office leasing firm Deitcher Group LLC, which is partners with Sterling Bay in the deal. He adds that they have another deal pending for one tenant to lease the second, third and fourth floors.
IDEO’s move-in date is June 1, Mr. Deitcher says.

…

Founded in 1991, IDEO has 550 employees and six other offices, including two overseas. In addition to the toothpaste tube, the company also designed Apple Inc.’s first mouse, the Eclipse 500 Very Light Jet cabin and the Samsung LCD monitor.

[From Product designer moving to former CHA headquarters – Chicago Real Estate Daily]

I know I have a photo of this place, I’ll have to delve into my archives

Lofts and Condos Doo-Dah Doo-Dah

update 127/09:
Ha, I knew I had a snapshot of 626 W Jackson…

626 W Jackson