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This page contains a single entry from the blog posted on February 21, 2009 7:20 AM. The previous post in this blog was Have a great weekend. The next post in this blog is "Destruction" at Tri-Met. Many more can be found on the main index page or by looking through the archives.

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Saturday, February 21, 2009

SoWhat goes bust

The people who invested in the egregious tomfoolery known as Portland's South Waterfront District are now conceding that their dreams aren't going to come true. Funny, I'm not feeling the tears well up.

Comments (29)

Please don't call it "tomfoolery." It is more appropriately called "samfoolery."

Yes, and now that several suburban homebuilders have gone bankrupt, it has exposed the egregious tomfoolery of building single family homes. Not to mention the egregious tomfoolery of domestic car manufacturing, banking and finance, the sale of durable goods, and public education.

Too bad we can't learn from past adventures. The city council is like housebreaking a puppy. Unless you catch it in the act, all is forgotten within seconds.
You could drag them down to South Waterfront and say, "Bad dog" and swat them with a figurative newspaper, but it will have no effect.

They are already onto the next project and the steaming piles behind them couldn't matter less. In fact, what we are really building in Portland is the IDEA that something could work - the VISION of something working. The reality of what happens next is just somebody else's mess to clean up.

Sometimes - as with Civic Stadium - the mess hits the artificial turf, and is eventually scooped up. Then the puppy comes back to cr*p again. The good news? If this new soccer deal goes through the expensive artificial turf we just bought will be replaced by an expensive lawn. But at least lawns handle the wear and tear of a puppy relieving itself much better. That in Portland, is real progress.

The puppy takes a cr*p and moves on, oblivious to what it's done, and always searching for new carpets to soil.

Peter Stott has already bankrupted two other companies: I'm surprised SKB would want him on their board.

I also remember when the commercial real estate guys were gloating about their high returns while stocks were crashing. I even knew one big developer who liquidated his retirement account (paying penalties and taxes) because he "didn't trust stocks anymore". He just filed for personal bankruptcy, despite his equity stakes in several prominent buildings around town.

"Danil Kasimov, an emigre from Uzbekistan, told the Seattle Times that Chase pre-approved him for a loan to buy a $1.5 million condo despite his $20,000-a-year salary."

That's my new favorite sentence from the economic crisis.

My favorite piece of this is the loudly promised SoWhat bio-tech enterprise with its loudly promised jobs that our elected visionaries sent to FLORIDA. Everybody whose fingerprints are on that one should be in jail.

Bill Mc:

You could drag them down to South Waterfront and say, "Bad dog" and swat them with a figurative newspaper, but it will have no effect.

Apt. To me, most of the architecture in that area looks like dog doots stood on end.

But where oh where are Oregon politicians and ballot measure PACs going now to get their capitalist endowments, I mean, 'contributions'? when the land-office businesses go bust ...

"I even knew one big developer who liquidated ..."

'Elites' in their high-altitude air-tight hard-shelled numeric abstraction-saturated encapsulations, out of touch with reality, normally don't know trends and futures as much as a dirt farmer or street urchin knows ... or as much as a heads-up someone who jostles with the hoi-polloi in these here parts around the blog-realm, Mr. T. I don't quite understand why it seems the latter never tells the former what the real deal is, if there's a hearty personal relationship between them. (I told my high-flying brother he was doing damage worldwide and going to crash land as an isolated castaway, and he cut off all communications between us, but at least I tried and said my piece, for Peace.) Neil Young here: "... there ain't nothin' like a friend Who can tell you you're just pissin' in the wind."

Speaking of "the egregious tomfoolery of building single family homes ... domestic car manufacturing, banking and finance, the sale of durable goods, and public education" -- as it were. Here's my Pick to Click this week, this month, this year. This reading is rated Peaceful Mature audiences only, mental fortitude required: Social Collapse Best Practices, Dimitri Orlov, February 14, 2009.

The John Ross in South Waterfront is a bust for Gerding Edlen but I see they have adopted PDC Bruce Warner's MO.

On another of their "towers of 526 units all will be done by June,,,, As of Friday, 12 buyers have closed their purchases"

"Mark Edlen, CEO of Gerding Edlen, said the project is doing fine."

Fine?

Yeah Sam Adams is doing fine too.

Bill, you're mostly right about the mondset of the people behind these messes. The other factor you have to consider is that most of them act like underachieving college students who expect an "A" just for showing up to class and pretending to do some work: "Well, at least I tried."

Sorry, kids: we wouldn't want a doctor performing heart transplants who graduated due to social promotion because goshdarnit, he tried. Why, then, do we keep rewarding bottom-of-their-class MBAs who wander off to the next shiny object the moment their previous project might require some actual work for it to happen?

This was all predicted by Jim Pasero in Brainstorm NW Magazine back in 2002. You can find the article, "Banking on Biotech" in the archives at Brainstormnw.com

The article also indicated that much of the firm's real estate portfolio consisted of office buildings, which have also suffered from collapsing prices and demand. It obviously focused on residential real estate, because that's more interesting to lay readers, but it's unclear that the company was being doomed by condo flops alone.

It is kind of ironic to see OHSU sending biotech jobs to Florida while it literally overlooks the fairly empty skyscrappers it helped obligate Portlanders to pay for. The folks at cityhall who supported this development are still in office, fat and happy.

skyscrappers

Aren't they just?

The John Ross in South Waterfront is a bust for Gerding Edlen ...

Isn't the John Ross the one right on the river that appears to be the "fullest" one of the condo bunch? I drive by there a fair bit, but I can't really tell which is which save for the OHSU Health Club.

"Too bad we can't learn from past adventures. The city council is like housebreaking a puppy."

Better analogy, it's more like getting a stupider puppy every 4 or so years. They make a mess and then let someone else clean up.

Unfortunately they take a crap where you can't find it for 4 years because they divert you with their stupid pet tricks.

Anon,
You write that the article "obviously focused on residential real estate, because that's more interesting to lay readers, but it's unclear that the company was being doomed by condo flops alone."

I get the feeling the commercial real estate meltdown is lagging behind residential time-wise. Not that we're through residential. The subprime mess will be followed by two other types of loans - Alt A and option Arms - that are just beginning to reset and have default rates and losses that could be right there with subprimes.

But I get the feeling the wave of commercial loans that fail is still mainly approaching us as the residential stuff drowns the economy.

The people speculating on condos were some of the first ones to get thrown off when the first bubble burst - if I'm following this.

Roger, the John Ross is the most northerly of the two oval shaped buildings. It is not on the river, but at the SE corner of the "park".

Gerding Edlen are suffering but they usually develop another pattern to use the taxpayers money to build something.

This time they are lobbying for the expansion of the definition of "affordable housing". By adding "student housing" and "workforce housing" ($68K income) to the mix, they can dupe the Council into parlaying the 30% of all TIF urban renewal dollars that must be spent on "affordable housing" (thank Stens and Adams for this) to be used for these proposed new definitions.

30% of $289 Million for SoWhat gives $86.7 Million of our taxpayer dollars that they can play with. And of course there are millions of federal and state taxpayer dollars that will be added to this "affordable housing" plus all the TOD and other tax subsidies.

Firms like Gerding Edlen and Homer and Dike can game, finding ways to use the public's money faster than we can expose, with the obvious help of the kind of politicians we have.

"The people who invested in the egregious tomfoolery"

You mean us?

Roger, the John Ross is the building with an oval cross-section, a block or two off the water.

Bill, commercial real estate is indeed lagging behind residential, but the commercial meltdown has arrived. My understanding is that many of the condo towers were at least able to shift from construction loan to long-term financing before the collapse. But they kept building commercial towers into the credit crunch only to find that when short-term construction loans are coming due, they can't get any long-term financing. It greatly accelerates foreclosure, I guess.

Thanks to Lee and Snards for helpful and congruent answers.

Lee, you nailed it!

"Affordable housing" should be affordable to someone taking home an average (or lower) salary for the area in question. The average is in the high 40K neighborhood. Many, many people make less than that. Anyone making $68K is not in need of government assistance these days.

The term "workforce housing" reminds me of Vanport and the old company towns of Pullman and Shasta. Gotta provide housing for the serfs although it looks like a few of the gentry might qualify as well.

Bill,

High rise office has already been in decline for a while, especially in markets like Seattle or Charlotte, which had major banking institutions, which were huge commercial office space lessors, collapse. Portland has probably been more insulated from this type of thing.

Some journalist should be asking the city if
all of the LID payments are being made and if the property tax TIF revenue from the North Macadam Urban Renewal District is sufficient to service the debt created there.

Of course there are many other questions that never get answered.

Heck there's not even an account to view which shows where the money went.

You know, like a ledger that shows who was paid and for what.

I bet most people think the city keeps track of who they write Urban Renewal checks for. Ha ha ha.

I have never read or heard of anyone who has even seen such information.
Not commissioners or the public.

But now the City, PDC and OHSU shenannigans can hide behind the spiralling economy.

Marvelous.

But Sam promised a mere $9 million for an tram to equal the Eiffel Tower would produce hundreds of jobs from a world class nanotechnology center at OHSU.

If you can't believe what he says about public projects, how can we believe him when he explains his sex life?

Port St. Lucie, the largest city in Port St. Lucie County, Florida, has the eighth-highest foreclosure rate in the US. The county is in such bad shape that it is on the verge of declaring a state of emergency. This is where "OHSU" VGTI Florida is located or locating. Perhaps it will return to Oregon and settle in South Waterfront.

http://www.npr.org/templates/story/story.php?storyId=100824167

I'd like to see a few municipal cronies lose their jobs and be sent into the real world.

Starting with Sam Adams of course.

His fresh new career ??? would be an enlightening experience for the creep.

I've heard that fiscal responsibility is code for homophobia.


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