Thursday, November 05, 2009

Floods, Bread, and Circuses. The wealthy remodel. The real victims are overlooked.

Anyone who suffers any form of perceived loss, such as what has resulted from the recent floods in Atlanta, deserves compassion. Especially so for those in counties like Douglas and in North Georgia where they were taken by surprise.

What I do not understand is why anyone living along Peachtree Creek or the Chattahoochee River is surprised they have been flooded? This is isn't global warming. This is not new. This is not even a 100 year flood, much less a 20 year flood.

Though reported as the "Worst in Recorded History", the flooding which made all the headlines around Buckhead & Vinings occurs every 6-8 years. The event is appropriately deemed the "worst" owing to the flooding in the outlying counties which was widespread and unanticipated. People actually died in the outlying areas. People in Buckhead got to remodel. 

For ITP ATL, the flooding is a result of inadequate infrastructure to offset for the impermeable ground cover generated by development. Point the fingers at developers and you would be wrong. They build detention ponds according to code. They are shaken down for exorbitant impact fees in City of Atlanta. Those impact fees get funnelled into a general fund. The funds do not usually end up building infrastructure to offset the increased run off. Point the fingers at the municipal authorities. They have the inadequate codes. They misallocated the money. It is their responsibility to manage "proper" growth in their jurisdiction.

As for my fellow ITP residents, they already know the drill. Researching a given property using FEMA's website or will demonstrate the frequency and severity of flooding. The FEMA insurance rating should be a BOLD type hint. The main reason ITP houses were on national news is that it makes a much better photo opp to show a 1 million plus home 10 feet deep in chocolate soup. Meanwhile, the areas where people died lies 25 miles to the west of the homes on the news. 

Filming a flooded field where the livestock were swept away does not show well in a film. It is just a flooded field. They could not capture the action of the animals drowning, or the farmers attempting to save them. Showing the tail lights of a car that was swept away does not convey the action. They missed the chance to film the action of a person and their child dying.  What is left? An enormous mansion covered in muck for days. That is action. Someone lost their stuff in the first floor of their McMansion. 

These are the linkely choices news editors made when picking mansions for the news, instead of depicting the tragedy of real loss. That would be too much like work? The public wants action and drama. Given them "Bread and Circuses". "Let them eat cake". 

I have heard it said from joggers at Memorial Park, "People who live here must see it as a way to redecorate their houses at least once over 10 years, at the insurance company's expense." 

The insurance companies & FEMA Flood Insurance enable these people to rebuild, in the very same location, over and over again.

Intown residents chose their own hell. Call the contractor and decorators! Reserve a suite at the Four Seasons! We are remodeling the house with insurance money! Whee! Chaaarge It! 

Our ITP neighbors enjoyed all the headlines. The outlying county residents suffered huge losses, and some lost their lives.  Those are the ones who really are in hell. We don't see pictures of their "Gates of Hell", just the fancy mansions that are well-insured.

From my memory, these are the large recent floods for Buckhead over the last 20 years: 1990, 1994 (opel, 2004 (Ivan?), 2009

Monday, June 29, 2009

City of Atlanta Parks and examining the role of Conservancies and City Responsbilities

Piedmont Park conservancy group pays off

While well-written and informative from a historical perspective, this article barely hints at the challenges that smaller conservancy and sports organizations face when dealing with the city itself; scratching the surface on the implications of universal use of the Conservancy model in a given municipal environment.

The model of a non-profit conservancy is ubiquitous. Thereby the model holds a large degree of credibility. Simply because a given model is prevalent, does not necessarily imply that it is without serious drawbacks.

City parks are an amenity to any city. The original management model of public parks was that city tax dollars and staffing support the maintenance, improvement, and operation of the parks within the municipality's domain. However, when budget cut backs are needed, the funding of the parks is usually the first in line to have their budget reduced. Over time, cutbacks degrade parks, thus creating an environment suitable for the creation of Conservancies by grassroots organizing citizens form together to raise funds to repair otherwise untended and deteriorating parks.

The Conservancy model has gained widespread popularity, with even small neighborhood parks taking over the city's management responsibilities. The benefits of the conservancy model are fairly obvious. The leading benefit is that an organization dedicated to the mission of a given park's restoration, expansion, and operation can better pursue execute it's projects since they will have the latitude and focus to direct their budgets with a large degree of autonomy, once a master plan is established.

Within the Conservancy model, there is a spectrum of specificity of the model's application. You have sports teams appropriating fields from a park such as Frankie Allan's baseball (BYO) facility on Pharr Road, improving the fields, and leaving the remainder of the park literally to rack and ruin. You have well run groups, such as Grant Park, that have generated enormous visible improvements to a park, with very little actual money raised to accomplish the goal. You have other groups that leverage revenue generating facilities within a park charging park users for various access and park activities, such as Piedmont Park. What is consistently true among these applications is that Conservancy activities relieve the City of cost and responsibility. The ongoing existential problem is that the City, as the erstwhile trustee of these public assets, generally does a poor job of interacting with 3rd parties who have been delegated the City's own responsibilities.

The parks administration regularly displays sudden changes of mood and attitude when interpreting MOU's with Conservancy's. I have personally witnessed the City's capricious disregard for fairness time and again. There are several examples. Grant Park must rent it's own Pavilions from the City, though they use these properties for a park raise funding event. Bitsy Grant must rent it's own bathrooms for the gala fundraiser, as well as pay the city staff, instead of allowing volunteer docents to staff the event. Bitsy Grant, after investing $2m for new courts which more than exceed the water usage regulation codes, could not use water on the brand new clay courts since they are lumped in with all the other courts that have not been improved. To prevent the $2m investment from literally drying up and blowing away in a dust cloud, Friends of Bitsy had to raise another $25,000 to install well equipment to water the courts, never mind what impacts widespread use of wells in an urban environment may have on ground water. This past January, rugby teams were kicked off fields en masse, while paying tens of thousands of dollars per year in field rentals, being labeled as field destroyers, when unscheduled field users actually destroyed the fields, leaving them as the only ones to be reached when blame must be assigned, since they were the only ones paying rent on the fields. The Parks Department was given ongoing photographic documentation of the usage by the rugby teams, but this information was not taken into account when the four teams were expelled.

Suffice it to say, unless you are the 800lb gorilla, your organization will face inconsistency and adversity in your interactions with the City. I can only conclude that until an organization achieves a financial stature that elicits respectful and consistent treatment, they will continue to have to struggle to assert the tenets of an MOU with the City.

Another important shortcoming implied by the Conservancy model is that the proliferation of the model has produced a negative pressure on the competing conservancies ability to raise funds to the particular detriment of non-tax funded charities.

- The first movers have enjoyed a majority of the capital donations and attract/retain the more qualified staff. For example, Piedmont Park is a first mover. Being well situated and visible to nearby corporate funding sources, they have generated a long standing relationship of trust. This creates a very difficult climate for other conservancy's in which to compete, since the donors are already committed to one park versus another. In the City managed model, all the revenue generated by the park would have benefited other parks within the Parks Dept. Now, this is funnelled only to the park generating the income. Whether this is appropriate or not is a subject to lengthy debate. The essence is that the other parks without similar revenue generating properties, will inevitably be at a disadvantage.

- Once the management and funding of a given park has been delegated to a conservancy, the City can then depend upon the efforts of the Conservancy's for finances instead of lobbying for adequate internal funding from the City's annual budget to perform the activities their department is otherwise charged with. The public, in effect, does not get what it is paying for, and now is called upon to donate even more funds to a Conservancy to enjoy services that should have otherwise been made available by virtue of taxpayer contributions.

- To subsidize parks with charitable funds when tax payers are otherwise supposed to provide those funds negatively impacts other charitable organizations that are not deemed "city services". Parks are "city services" and therefore entitle to share in the proceeds of tax revenue collections.

Therefore, the overall effect is that several conservancy's compete for limited resources, also pulling funding resources from other charitable organizations that may have no means to make claims upon municipal budget resources.

One solution requires reformatting how City Hall and it's Parks Dept serve the public properties for which they entrusted. Any Conservancy's political strategy should call for active lobbying for the prioritization of tax funding for parks. However, the funding will support an Parks organization that has very many operational shortcomings and only have marginal, durable impact. The city itself, as we well know, has very many operational shortcomings. In order for the parks to be effectively managed by the city, it implies that literally all the other broken facets of city operations also need to be repaired.

Therefore, the way forward is to maintain the Conservancy mission as status quo, all the while to present a unified front requiring the reform of city operations, hiring & contracting practices, the balance of power between the mayor and city council, and implementation of formal accounting controls in conjunction with ongoing 3rd party audits for oversight.

The focal point of this political front would logically be Park Pride, since they span the ecosystem of Conservancy's in our region and espouse missions statements in alignment with the conservancies they service.

If we can organize this message to the City under Parkpride's banner, voicing the need for reform of city financial controls, hiring practices, and balancing of power, then one day we may just be able to hand much of this responsibility back to the where it should have been maintained all along. Then, a Conservancy could provide active oversight and input into the future care of a given park, but utilize tax payer funds that have already been raised to achieve the goal, rather than absorbing charitable donations from missions that do not qualify for tax payer funding as a component of a qualified City service.

If these efforts do succeed, the reality is that Conservancy organizations will not likely abdicate their authority to the City, even if it would be more effective for the overarching park conservation mission.

As a rule of thumb, any organization will entrench itself, even to the peril of the mission, since this is the natural response and function of the organizational collective's ego; the identity of the organization will want to survive, no matter the cost.

When the citizens and groups such as conservancies do succeed in reforming City of Atlanta, we will have an interesting, perhaps painful, challenge to reorganize our organizations to ensure the most effective strategy in the new environment.

Therefore, Conservancies are here to stay! ;-)

Thursday, April 02, 2009

Atlanta's Casino - Atlanta devolves into Pottersville?

We are one step away from having a casino in the middle of downtown Atlanta.

"The Atlanta City Council and Mayor Shirley Franklin have endorsed the project. The casino development could help to relieve the city of an estimated $56 million balance on roughly $85 million in bonds issued for redevelopment of the site in the 1980s. "
Read the full article here

All of this brings to mind Yeats -

"The ceremony of innocence is drowned;
The best lack all conviction, while the worst
Are full of passionate intensity...

And what rough beast, its hour come round at last,
Slouches towards Bethlehem to be born? "-Yeats - The Second Coming

Will we allow Atlanta to devolve into Pottersville ? We should demand a referendum on this issue, and demand it straight away before we lose our ability to participate in the process.

Is this the best idea our city and state's business and political leadership can conceive of for this prime real estate? Real estate situated in the middle of our downtown area, across the street from the Capitol building (full of erstwhile "Conservatives"), and adjacent to the largest University student body (GSU) in the Atlanta metro region.. ALL THEY CAN COME UP WITH IS A CASINO?!

Georgia State University, "Founded in 1913 in Atlanta, Georgia State University is the second-largest and one of four research institutions in the University System of Georgia."

Atlanta is a premier national city! We have a strong business community. We have so many great things about our region and the city itself.

Atlanta is not a resort destination.

Atlanta is by no means a flagging metro area desperately stooping to anything in the name of economic development.

This initiative displays a lack of vision, a lack of transparent representative government processes, and exemplifies the power the "machine" has to override the general disposition of the public.

The casino increase law enforcement costs by the increase in organized crime and vice related activity. We can not afford our current law enforcement budget as it is!

There are demonstrable negative impacts that a casino will bring upon our community. These are well researched and documented. Our tax dollars will have to offset these impacts.

Please download this document from University of Chicago as an example. The University of Chicago is home to economic luminaries such as Milton Friedman. Perhaps they understand how to research economic impacts of a given initiative?

Monday, February 09, 2009

Refi the USA, in lieu of Stimulus

Monday, February 09, 2009
Last updated: Thursday, March 12, 2009

Refi the USA, in lieu of Stimulus


Please review the following as an alternative to the Federal Stimulus bill. Please assert your commentary in the comment fields below this proposal.

This document proposes a clear alternative approach to the Stimulus bills.

The tenets of this proposal will quickly deliver the desired effect of market stabilization, restoring confidence in the markets, and thereby enabling access to credit. This proposal will have a swift impact, without the need for ongoing government spending.

The government incentives requiring banks to extend loans to "underqualified" borrowers, as well as the investment banks pushing the limits in vast numbers of loans of what is a reasonable risk, collude to form what amounts to a Ponzi scheme, with the distinction of involving so many various parties in government, mortgage lending, real estate services, and other investment banking, that prosecution in an efficiently and swift time frame is not possible for the near term to create any positive impact upon the confidence levels in the markets.

With relatively minor government expenditure, banks, and local administrative services, a strong and deep keel will set into the deep waters of our economy, stabilizing markets and restoring confidence.

Confidence in values will increase, credit resources will open, the inventory of homes will decrease, demand for new home starts will then increase, and jobs will spawn throughout the entire cycle owing to the 90 days hiatus from payments restoring ability to pay and decrease interest liabilities by individuals and businesses allowing for expansion of business.

Therefore, it is proposed:

Immediately Stabilize the Underlying Asset Values.
For any home sales in the next Two years, the minimum sales price allowable by law shall be determined as the lesser of the last mortgage property appraisal or the last Tax Assessor’s valuation prior to January 1, 2007. Arguably, the last time the market can be said to have been functioning was prior to January 1, 2007.

Since individual States will likely refuse to waive the associated Intangible Taxes for each loan refinance, it could be possible to use Stimulus funds to reimburse States for the associated Taxes.

After Two years expire, the minimum allowable sales price shall decrease by Ten Per Cent per year annually over Five years. After the Seventh year, the open market shall dictate pricing.

Refinance Every Home Loan in the USA.

Once home values are stabilized by law, every homeowner in the USA shall be refinanced to a Thirty year Fixed Conventional Mortgage Loan at the preferred borrower’s market-based interest rate, currently 5.1%. Each homeowner shall enjoy 90 days hiatus from payments.

Restore Consumers Confidence in the ongoing Cost of Credit.

For all inhabitants, including aliens resident legal or otherwise, of the United States holding credit cards and other unsecured consumer related credit card debts, all outstanding balances of credit card debt shall be assigned no more than an 8% interest rate, and debtors shall enjoy 90 days hiatus from payments. For a period of two years from the date of the bills enactment, credit card interest rates shall not exceed 8%.

Restore all Home Equity Lines that the homeowner had prior to January 1, 2007. Affix a maximum interest rate of 3.5%, which shall endure for as long as the current homeowner remains in the property.

Directly Fund Access to Education. For EVERYONE.

All outstanding college loans and any subsequent college loans for the following Five Years shall enjoy a maximum interest rate of 3.5% and no origination fees shall apply.

Students shall not be required to make payments during periods when they are earning less that 50% of the Average Household Income in their Metropolitan Statistical Area or County, which ever is smaller.

Enable Businesses to Invest and Expand.

For all businesses, any outstanding balances of debt shall be reassigned an interest rate not to exceed 8%. Any subsequent borrowings shall be assigned a rate of more than 8% for a period of Two years.

Acknowledge Lending Practices Have Been Basically Unfair, Possibly Illegal.

We must admit meaningfully that a wrong has occurred, and these people damaged deserve meaningful

The members of this category shall enjoy the aforementioned refinancing if they are able to retake their home.

Dispossessed homeowners shall be restored financially to their status before dispossession.

Where the home has already been resold, the disposed homeowner shall be reimbursed the lost equity in the property existing as of January 1, 2007. In either case, all dispossessed homeowners shall be reimbursed for any expenses related to the dispossession such as storage of personal effects, health care, loss of wages, or other provable expenses and damages. and swift redress.

The source of reimbursement funds shall be: TARP funds where the mortgage bank made no attempt to perform a workout with the homeowner OR Stimulus funds where a good faith workout was attempted by the lending bank.

Where the home was purchased by speculatively, by non-property occupying owners, the property shall revert to the original owners. The investors made whole during the transaction. Investors were behaving in a lawful manner, and therefore should not be damaged.

Reform the Banks and the Real Estate Transaction Cycle. (1st draft)

Where possible and provable, criminal proceedings should be brought forth against any parties clearly stepping outside the law at that time.

Penalties for fraud activities such as collusion to perpetrate mortgage fraud shall be increased significantly and shall have federal jurisdiction.

Require Multiple Listing Services to provide Open, Affordable, and Full to the General Public.
This will weed out the dead wood of incompetent agents, and allow real agents to provide better services.

Illegal Immigration, End It. Collect Tax Revenue from the Workers. (1st draft)
Those currently in the United States under illegal circumstances could be paying their full share of Tax Revenues if we simply assign Tax Payer ID Numbers to each migrant worker.

There is no law that necessarily connects Citizenship or immigration status with the ability or responsibility to pay Taxes. Therefore, taxes can be collected from anyone in our nation, if they simply had an Account Number and access to Identification.

Currently Illegal immigrants would be allowed to stay in the USA, provided they begin paying taxes and register themselves. They would not be eligible for Citizenship owing to the illegal nature of their entry to the country.

To reinstate eligibility to apply for citizenship, currently illegal immigrants shall have to perform community service duties of Five to Ten hours a month for a period of Five years.

This would integrate the immigrants into their new communities by given them opportunities for volunteer service, thereby improving the community in which they now live.


Whereas, previous attempts to direct funding to "bail out" the economy have been misused, subverted, or at the very least experienced far less success than what was generally expected.

Whereas, the current stimulus package will likely amount to an ineffectual misdirection of our nations resources. There are no discernible areas in the economy that can be improved by direct inject of capital. Even if there were areas where investment could make a significant impact, the government is not capable to execute the appropriate spending regime, and, furthermore, the long term financial impact upon our economy, could actually send our nation further into economic decline for an even longer period of time.

the mortgage servicing industry faces financial penalties for performing loan "work outs" with mortgagee. The loan investor pools build these penalties into the loan servicing engagement contracts. Individuals with the loan investor pools can also sue the Servicing companies for performing "work-outs".

Whereas, if only failing homeowners are given benefits, the ones who are actually paying are in effect penalized for being financially responsible, since there are no provisions being discussed for those who are in good standing.

Whereas, the manner under which lenders have extended loans during the past decade has proven to have contributed significantly towards undermining our nation's, and in turn the world's, economy.

these loans extended by the financial industry amounts collectively to an enormous Ponzi scheme, since the extension of loans to underqualified borrowers directly impacts the investment of the owners who were qualified and depends upon ongoing demand of buyers to maintain the valuations underlying the loans.

any prosecution of the perpetrators of the Ponzi Scheme is impractible owing to the diminished responsbility of all the parties involved.

any relief of homeowners still residing their homes would be unfair to those who, owing to timing of the relief, were unable to enjoy any relief since they no longer have their home.


Bryan “Beau” Grant, BSM, MSMoT
Convivia Group (
Commercial Real Estate Brokers