Helen Sause

Editor’s Column

Dear Colleagues,

“this time, like all times, is a very good one, if we but know what to do with it.” Ralph Waldo Emerson     I had the good fortune to attend a Board Retreat and renew my acquaintance with a LAI member I had worked with several years ago, John Trauth.  John was a former member of the Citizens Housing Corporation Board, whose retreat I was attending.  He has done many interesting things in the intervening years including writing a book.

John  also leads seminars for organizations. This one is focused on “Managing Through Troubled Times.”  He presented “The Ten Overarching Context Recommendations”  for us to consider and discuss.  These are critical for  most organizations at this moment, and I have taken the liberty of listing them for your consideration this month and I have asked John if he could write an article for the next KeyNotes elaborating on them.  These  suggest ways of looking at these questions which may establish an implementation plan for  coming through this economic hazard course stronger and more equipped to meet the challenges when this period is over – as it will be! Ready?! The ten recommendations are:

1. Assume the Worst-Case Scenario
2. Reset Priorities
3. Keep investing in Core Competencies
4. Communicate!
5. Learn the Problems/Concerns of Your Constituencies
6. Beware of Cheapening Your Product
7. Emphasize Capital Efficiency
8. Manage Personnel Wisely
9. Re-Examine Compensation Incentives
10. Evaluate Merger/Acquisition Possibilities

Hope you think about how these apply to what you do.  ‘Till next month, and watch for
our April guest editorial.

Helen Sause
International LAI Editor
helensause@alamedanet.net

Special announcement from Neil Muldrow

On Monday, I attended the Conference at the White House to hear President Barack Obama and Treasury Secretary Timothy Geithner announce Plans to Unlock Credit for Small Businesses (see the press release).  As a 30-year veteran of commercial lending, this approach is much needed to move forward the access to funding for small businesses through the SBA.  I hope that we all support this and other economic initiatives to energize our small businesses and community banks.

Neil Muldrow
Former CEO
Development Credit Fund, Inc.
A 7A Preferred Lender

 

Chapter Corner

Baltimore Chapter:

After Baltimore City’s Mayor, Sheila Dixon proposed,11 months ago, in her State of the City Address to “transform our efforts to eradicate blight in our neighborhoods”, City Council Bill #09-0261 was introduced.  It proposes the establishment of a Land Bank Authority (LBA) to focus on the problem.  Julia Day, Esq. and Assistant Commissioner, Baltimore Department of Housing and Community Development described the background and process leading up to the proposed LBA at the chapter’s February program meeting.

Baltimore suffered a serious loss of population from 1990 to 2000.  The impact was a steep increase in the numbers of vacant unoccupied units and parcels.  Currently, Baltimore City owns nearly 1/3 (or 10,000) of the 28,916 abandoned properties, and about twenty-five percent (25%) of these are vacant residential buildings.  Responsibility for management and disposition of these properties owned by the City is dispersed among a number of city agencies.  This can make negotiations cumbersome for developers seeking to aggregate lots for a project.

In June 2008, Mayor Dixon along with the Baltimore City Comptroller and President of Council convened a Task Force comprised of interested community, philanthropic an business leaders.  Their charge was to make recommendations on how to deal with the challenges of the blighting abandoned parcels.  LAI members participating in the Task Force were David B. Rudow, PA (Adelberg, Rudow, Dorf and Hendler) and Joseph T. “Jody” Lander III, Executive Vice President of the Grater Baltimore Board of Realtors.

The Task Force examined best practices to address the impact of abandoned tax-delinquent properties in inner cities.  This led to the LBA concept.  St. Louis and Cleveland, which also had suffered from population loss, established a LBA in l971 and l976, respectively.  These were followed by Louisville/Jefferson County, Kentucky in l988; Atlanta in l991; and in 2002, Flint/Genesee County, Michigan.  According to Ms. Day, the proposed LBA in Baltimore will be a private non-profit corporation acting for the public.  Its advantages include accelerating conveyance of property through a single entity that consolidates operations and inventory and providing flexibility for staffing. A LBA can be an efficient, economic and powerful redevelopment tool to address the crisis of abandoned vacant property in the City of Baltimore.

The City’s Planning Commission will hold a public hearing on the Council bill to establish the LBA on March 5.  Illustrative of the level of commitment and importance of this measure, Mayor Dixon is scheduled to present; this is the first time a Mayor has testified.

If passed, Baltimore’s LBA will have a Board of Director with 11 members including 5 citizen members.  To create an inventory, the City’s owned real estate will be transferred to the LBA. These properties will be conveyed without liens for past due taxes.  The LBA can function as a receiver of parcels.  It will not have the power of eminent domain.  For more information, visit What’s Going On at www.baltimorehousing.org.
Upcoming speakers at LAI-Baltimore program lunches include:
  March 18, 2009:  “Baltimore City’s Zoning Code Rewrite”
      Les Pollock, LAI President and consultant to City of Baltimore
  April 15, 2009:      “Baltimore Healthy Neighborhoods”
       Mark Sissman, President, Healthy Neighborhoods and
       Former Deputy Commissioner for Housing, Baltimore
  May 20, 2009:      “Baltimore’s Social Capital”
       F. Barton “Bart” Harvey, III, Immediate past Chair/CEO
      The Enterprise Foundation

Tara B. Clifford
www.LAI-Baltimore.org

London Chapter:

Paul Aldridge, King Sturge, spoke to the Chapter  on the topic of “Delivering Regeneration - The Role of Local Asset-backed Vehicles”.

How does a landowner without access to finance secure development of his land without either selling it or losing all control via a lease? This conundrum has been with us throughout my career and Local Asset-backed Vehicles are the latest solution offered. Paul Aldridge and his firm are at the forefront of the initiative, and he came to our Lunch on 29th January 2009 to explain what they are up to; starting with a single project in 2002, they now have 30 or so in various stages of progress.

The idea is straightforward. The land is placed in a ‘vehicle’, usually a limited liability company in which the shareholders comprise the landowner, one or more development partners, who would be expected to bring substantial ‘seed’ capital, and perhaps a bank or other financier. The company follows proper corporate practice, with regular board meetings attended by directors nominated by the parties who bring expertise as well as exercising corporate responsibility. The vehicle is given a limited life, usually around 15 years. At the end of that period, the company is wound up, profits are taken and the land reverts to the landowner. During the development period the land is ‘drawn down’ by the developer in accordance with demand at a formula-driven price, developed and let.

As Paul emphasised, one of the keys to success will lie in getting the Memorandum and Articles in a shape that properly represents the wishes and interests of each party. There is usually a lock-in period of around 10 years, but thereafter interests can be sold, albeit that they may not be that liquid.

These arrangements are, in Paul’s view, particularly suited to public bodies with extensive or critical land holdings where they wish to bring about development in the interests of regeneration but they have neither the skills nor the financial backing to carry out development themselves; he illustrated this with the projects already under his belt. The general structure is flexible enough to allow for development elements of a ‘social’ or below-market nature, but, of course these must be counter-balanced by sufficient market development to meet the finance costs and the profit expected by each partner. The structure provides an entity that is generally eligible for grants, should these be available, and also wider public sector support; we talked of ‘Jessica’ and ‘Jeremy’, cash streams from the EU that are currently being rolled out for just such vehicles.

In answer to questions, particularly from members who were a little chary of public sector ‘partners’, Paul said that his experience was that their input was generally good. However, as well as getting the structure of the company right, it was also necessary to reach prior agreement on a proper business plan that the board could exercise its corporate responsibility in delivering. The timing of agreement on these matters was often politically sensitive, but in electorally ‘fallow’ times many authorities are quite capable of being business-like.

At the outset, the public body must, of course, select its partner or partners in a transparent and open manner that meets public sector ‘best value’ standards. If this is done properly, there is no difficulty in the chosen developer having exclusive access to the land covered by the vehicle throughout the period of the agreement.

Paul displayed not only mastery of his subject, but also considerable enthusiasm for the general concept. Whilst it is, primarily, a development tool, he is of the view that the content of that development was capable of considerable extension.With the benefit of hindsight, I think that we did not question him quite strongly enough about the end of the agreement; that tends to be the time when chickens come home to roost. However, we all found the ideas Paul provided both interesting and potentially stimulating.

Michael Mallinson, London Chapter Scribe

Phoenix Chapter:

Dear Chapter members:  Being serious isn’t what counts.  What counts is knowing what to be serious about.  We are serious about providing members a reason to attend out monthly meetings.  I would like to thank our program committee for their diligent efforts to provide us with an incredible line up of presentations in 2009.  Thank you Curt Johnson, Sheila Harris, Carter Froehlich, and Jim Adams!

April 17, 2009
7:30am – 9:30am
University Club of Phoenix
39 E. Monte Vista Road
Topic:  Incentives
RSVP Now

We are always looking for new ideas, please send your suggestions to Curt Johnson at cjohnson@cvlci.com or Sheila Harris at sharris@moleraalvarezgroup.

An update on the Phoenix light rail

Metro light rail officials report that like January, February’s light rail ridership numbers exceeded expectations.  As traffic continues to grow toward the expectation of 48,000 total boardings per weekday, we ask if light rail ridership is the key to rejuvenating our aging inner core, or is it something else?

In Dallas, light rail trains run at capacity at rush hour, and business is good at other hours of the day as well.  Light rail is credited with reviving downtown Dallas and creating a second regional business and entertainment center, Mockingbird Station.  But the third bid for regional core status, downtown Plano, has not experienced the same kind of success. 

Phoenix and Tempe’s downtowns have benefitted in a burst of development activity, but  will recent economic events derail the plans? Stay tuned as the story of the Phoenix light rail unfolds.

Katherine Kittrell

Orange County Chapter:

Bull or Bear? 
Lambda Alpha International - Orange County Chapter, CA will continue our series focusing on the state of lending in the real estate environment with a special monthly meeting in conjunction with Cal State Fullerton’s Real Estate & Land Use Institute looking inside the new research study:  The Bear in the OC.
Michael LaCour-Little, Professor of Finance at Cal State Fullerton will bring us a unique perspective based on his depth of experience in both the academia and private sector finance world:

The genesis and growth of Bear Stearns' activity in residential lending in "Alt A" loans, reduced documentation, negative amortization, riskier lending;The destructive effects of collateralized lending, the far-reaching economic effects of this type of lending and how the banking and homebuilding communities will have to cope with those effects;

Examples of types of lending and borrowers, foreclosures and overall residential lending activity in 2008 in OC; and his prognosis for future lending and the possibility and effects of regulations in the future.
We are also fortunate to be hosting this meeting at the new Mihaylo Hall, the new flagship, state-of-the-art meeting and conference center at Cal State Fullerton.  Weather is expected to be in the mid 70's to 80's.

Hope to see you there! We thank our meeting sponsors/members:  The REMM Group, Robert Taylor and Ibbetson Commercial Real Estate Services, Gregory Ibbetson .

For any of you anxious or curious investors/developers/LAI members, feel free to contact us at
www.lai-oc.org

Karen S. Patel, Orange County Chapter Scribe

San Diego Chapter:

Annual Installation
LAI San Diego held its 31st initiation and installation ceremony on February 24, 2009 at Liberty Station, the former Naval Training Center and successful redevelopment project in the Point Loma area of San Diego.  New offices were installed as follows:  Mike Madigan, President; David Poole, Vice President; Stephen Silverman, Treasurer; and Paul C. Marra, Secretary / Scribe.  Fifteen new members were initiated as the “class of 2009”, representing a diversity of backgrounds and talents, as follows:

Carolyn Alkire
Steve Altman, PhD
Philip J. Bona
Alexandra Elias, AICP
Kim Elliott
Marcela Escobar-Eck
Stephen Haase, AICP
Barbara A. Kaiser
Ure Kretowicz
Louis Misko
Christopher Morrow
Patricia Moser
Nancy Scull, Esq.
Suzanne Varco, Esq.
Leslie Wade

March Luncheon Meeting

March 10 the LAI San Diego monthly meeting focused on the Federal stimulus legislation and its implications for the San Diego region.  A representative of the San Diego Association of Governments dissected the spending allocations in the new law and correlated these to major capital projects in San Diego County.  SANDAG has compiled an extensive list of eligible projects, ranked by timing to groundbreaking.  The total cost of these projects greatly exceeds the amount of funding expected to be allocated to the region.

In April (April 7), the monthly luncheon program is teasingly titled “Why (Other) Developers Go to Jail?”  Bob Rose, an attorney with Sheppard Mullin Richter Hampton, will address some of the legal challenges confronted by the real estate development community in the midst of the current economic distress.

Future luncheon programs hope to bring recently elected San Diego City Councilmembers to address LAI.

Paul Marra, San Diego Chapter Scribe

Vancouver Chapter:

Racer in the May 4th Paranordic World Cup

 On May 12, Don and David made their dry run of the Friday, May 8 Tour to Whistler.  All of the Olympic 2010 venues are complete and have already been tested with several World Cup Races.  The Paranordic World Cup - Biathlon Sprint was going on when they visited the Olympic Nordic Park, the first stop when the LEW Friday Tour arrives in Whistler.  After the their visit to the Olympic venues and the Athletes Village there were some adjustments made to the schedule.  (The KeyNotes shows the revised schedule).  An interesting addition has been made to Friday morning with a visit to one of the luxurious condominium residences in the British Properties <www.aerieliving.com> on the North Shore slope's of West Vancouver.  

The ski jumps already used for last months World Cup.

Anthony Perl, Vancouver Chapter Scribe

Land Economics Foundation (LEF)

LEF Grant Program   

Ron Buss, LEF Vice President

Announcements

Administration Matters!

Attention LAI Members! Forgot how to login? No Problem 
Please visit the LAI Website at www.LAI.org. On the left hand side click on the Members Only Tab. Here you will need to use your email and the password is lai.

From the Desk of the Executive Director

Hello Chapter Presidents and Administrators:

If you are returning as Chapter President or Administrator or if you are a new Chapter President or Administrator, I wanted to take this opportunity to welcome you and bring you up-to-date on some of the  LAI International tools:

1. The LAI Board of Governors approved a Strategic Plan for LAI, please view it on the LAI website, in the “members only” section. It outlines LAI’s Mission, The Members, The Role of International Secretariat, New Chapter Development, Providing Effective Chapter Support, Marketing LAI and Implementation, and a conclusion. Please take time to read through this document.
   
   
2. Membership

The goal of every chapter is to be 100 members. LAI has funds in the budget to help Chapters with this objective. If you need assistance please contact your Regional Vice President or me.  As you all know, we are in the middle of dues renewal, please help us collect 2009 dues.
There is a new policy to be implemented for non-paying dues members that will be distributed shortly. The Board of Directors adopted a membership policy, which includes a disenrollment policy. Some of you may recall in 2005 letters were mailed to members who had not paid dues in a couple of years, the letter invited them to come back to the organization. I will again be sending out these letters asking non-paying members if they would like to return, the letter will include a time limit for rejoining and a $25.00 reinstatement fee. By  working  together on non-paying members, it will improve the quality of  all of our records. The information will be coming to you soon with more details.   

3. LAI website and Chapter Updates /Calendars

By regrouping the members resources on the  “Members Only” on the LAI web page  we hope it will be easier to find the assistance you need.  Another change provides for an the email blast for Chapter Administrators (only), please contact me if you wish to use the email blast and I will walk you through the new procedure.
Let us know your reactions.

Note: Please send Michele or myself ALL updates of Chapter officers, and a calendar of events for your Chapter.

4. LEW’s

The Spring LEW will be in Vancouver BC, CANADA May 7-9, 2009.  A  PDF with an overview of the Spring LEW will be sent out shortly.
The Fall LEW will be in Chicago, IL, October 22-24, 2009 in conjunction with the Burnham Celebration.

5. AICP Credit

Board Member Fereydoon Ghaffari has been working with the American Planning Association to bring AICP credits to the Land Economics Weekends. Mr. Ghaffari will also be advising  what a Chapter has to do to receive AICP credits for Chapter functions as quickly as the details are clear.    

6. New Chapters Denver and Atlanta

Per the email you received from Regional Vice President Neil Muldrow, we are looking to develop these two cities in 2009. If there is anyone you know that should be an LAI member and is not currently, please forward their names to me and I will pass them onto the appropriate Chapter. (this is  a great way to build membership!)

7. Irish (Ireland) Chapter

LAI is pleased to announce that a  charter was granted to the Irish (Ireland) Chapter in October of 2008. We welcome them to LAI! 

8. LEF

Reminder:  New Chapter Presidents: you are a voting member of the Foundation.  Please mark your calendars for the LEWs.  The Trustee’s meeting will occur at each LEW meeting. The date and time of these meetings will be sent and you are encouraged to attend so that information from all sectors of LAI are considered in the Foundations’ actions.

LAI’s  goal is to  make your transition  as a Chapter officer or Administrator easy and  trouble-free. The LAI staff  continue to try to put as much information as possible on the LAI website, including any new Chapter Manual updates.  But don’t ever hesitate to call or email questions, puzzlements or suggestions!  The Regional Vice Presidents are also available and willing to help their respective Chapters. 

KeyNotes offers each Chapter a great opportunity to submit articles on issues happening in your area and Chapter practices. We hope that we have the name of your Chapter Scribe to take responsibility to share your news!  Please submit articles to LAI’s Scribe Ms. Helen Sause helensause@alamedanet.net  and LAI Administrative Director Michle Meng mmeng@integrated-solutions.com

Thank you all very much for your service to the land economics profession and  dedication to LAI.   Please let me know if you have any questions or need any help.

Terry Stevenson, LAI Executive DIrector

Save the Date ! ! !
 
Vancouver, Canada, Spring Land Economics Weekend
May 7- 9, 2009
Terminal City Tower Hotel
837 West Hastings Street
Vancouver , B. C.  Canada
www.tctowerhotel.com

Register online
Download Vancouver Registration Form (pdf)
Download Vancouver Registration Form (doc)

Hotel Reservations
Rates: $210.00 CAN Net, + taxes Single/Double
Phone: +604 681 4121
Toll Free: 1-888-253-8777
Fax: +604 488 8617
Email:hotel@tcclub.com

Chicago, Fall Land Economics Weekend
October 22-25, 2009
More inofrmation coming soon!
 

Future Land Economics Weekends (Subject to Change)

2009
Spring: Vancouver, Canada, Vancouver Chapter
Fall: Chicago, Ely Chapter

2010
Spring: Minneapolis, Minnesota Chapter
Fall: New Mexico, Zia Chapter

2011
Spring: Scotland
Fall: ?

New Members

Aloha
Suzanne Case, Nature Conservancy of Hawaii
Stanton Enomoto, Office of Hawaiian Affairs
Robert Fujioka, First Hawaiian Bank
Mike Hamasu, Colliers Monroe Friedlander
Lea Hong, Trust for Public Lands
Jeff Lum, Lum Kip Yee Ltd.
Melissa Lum, Lum Kip Yee Ltd.
Mark Yamakawa, Queen Emma Land Company

London
Tony Dodd, Cadweb Limited

Minnesota
Michael A. Fischer, LHB Architects
Thomas A. Gump, The Beard Group/NDP
Restor E. Johnson, United Health
Margaret D. Linvill, Linvill Properties
Daniel C. Mehls, Mortenson Construction
John W. Shardlow, Bonestroo