Irresponsible borrowers walking away from their obligations.

[Hello_Kitty]

CityNorth Heads for Foreclosure

First Phase of Project in the Phoenix Suburbs Hits New Financing Snag

CityNorth, the ballyhooed retail project planned in northern Phoenix's affluent suburbs by Related Cos. and Thomas J. Klutznick Co., is the target of a foreclosure filing by lender Capmark Financial Group Inc.

Capmark filed last week in Maricopa County Court to foreclose on the first phase of the CityNorth project due to default on a $290.5 million loan.

http://online.wsj.com/article/SB10001424052748704160504574640561783184836.html

Deadbeats. Don't they care about the equity of neighboring shopping complexes?

:sarcasm:

Phoenix was already littered with half-vacant and/or half-finished commercial development projects when these numbnuts got a permit to build this monstrosity, AND CityNorth got a $97 million tax incentive from the city to boot!

But hey, these are Important Businessmen^TM we're talking about here so it's not like their failure to honor their contractual obligations is a reflection on their moral character or anything.

[Sanity Claws]

1. Yes, double standard

[Mari333]

2. this is happening all over

especially when the city fathers /mothers allow that good ol boys network to find loopholes to build. my small town is to the brim now with unused condos, empty apartment complexes, closed storefronts. its like
wham..recession
everything came to a stop.
no one is buying.
its like time stands still.
and what we are left with is overbuilt monstrosities and de forested tracts of land .
awful.

[Blue_Tires]

10. sometimes giving them huge tax breaks to boot...

we've had it here locally...the commercial developers got tired of paying off city politicians, so they simply started running for council seats themselves, and re-write the laws with no opposition...

[Hello_Kitty]

12. Same here in Phoenix.

We have a Councilman named Sal DiCiccio (R-naturally) who is shameless about it.

[closeupready]

3. Oh, wait! For a minute there, I thought you were talking about irresponsible deadbeats walking away

from their obligations (SHAME ON THEM! :mad: ). I see instead, you are just talking about prudent business decisions (and give that CEO a bonus in light of this). :sarcasm:

[Hello_Kitty]

9. Yep. It's good business sense when they do it. eom

[saracat]

4. But hey some will still find a way to blame homeowners!

None of this stuff counts!

[JuniperLea]

7. You should be happy...

That your neighbor who bought at a short sale is paying $900 a month for the same house you're paying $1800 a month for... anything else is unAmerican!

You took the loan, you can afford it too... too damn bad you'll be 111 years old by the time the market catches up with your mortgage.

Ugh...

People are walking away from their homes in droves... and businesses... and yet the homes, condos, and strip mall building business seems to be booming.

[NYC_SKP]

5. My link works better than your link. =:^)

:P

http://online.wsj.com/article/SB10001424052748704160504574640561783184836.html

It seems to be OK for white collar executive types to walk away from obligations.

For homeowners, I can't say I blame them. I'd be tempted to do it myself if I was that far under water.

In my case, I had built up enough equity over 15 years that all I lost was, well, all that equity. :mad:

:patriot:

[JuniperLea]

6. So many townhomes and strip malls going up in So Cal...

I don't get where they thing buyers/lessees are going to come from! The banks aren't lending, there are no jobs... stupidity. Another artificial support of the economy, which only leads to bust.

[Hello_Kitty]

14. The amount of unused commercial space in this country is mind-boggling.

It is artificial and unsustainable.

[louis-t]

8. Arizona has been hit very hard.

My opinion is that buildings require a lot of maintenance in that climate. When there is no money for maintenance, even newer buildings degrade quickly. A person I know who lives there has seen unsold residential developments picked clean and then torn down instead of finished because they can't sell them.

[Hello_Kitty]

11. Homebuilders are walking away from entire developments.

There are outlying suburbs of Phoenix where people are living in communities abandoned by developers where homes sit half-built and many others are unoccupied. A friend of mine is in a home that has lost 80% of its value. He bought it for $300K and getting short-sale bids of $60K right now.

[louis-t]

19. And I had someone on this site argue with me

when I said that in certain parts of the country, home values were down 75%. Then I proved it.

[Deep13]

13. A simple reponse to the banks' argument: ....

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000...000
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!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

I hope I was clear about that.

[Hello_Kitty]

15. I like it! eom

[KansDem]

21. Man! Look at all those zeros!

Put a "1" in front of them and you'll have TARP...

[Greyhound]

16. "AND CityNorth got a $97 million tax incentive from the city to boot!"

That's how the game is played. The parasites at the top gave themselves ten$ of million$ of dollars, borrowed against the incentives and "projected income", and walk away with it as their due.
:grr:

[Hello_Kitty]

18. Actually, in this case they haven't gotten any money from the city.

The tax incentive is based on sales taxes and they had to meet certain performance thresholds. Thank gawd for small favors. But the reason the city had to tie it to performance was because there was a massive public outcry at such a generous public giveaway to an unnecessary shopping and residential complex when the economy has tanked, Arizona's real estate market is in the toilet, and state and local governments are cutting everything to the bone.

[Bluebear]

17. Good thing they tore down the Stardust in Las Vegas to build . . . er, nothing

Isn't it grand how they left it?



NEWS 8/1/08 Construction on Echelon was suspended today due to the uncertain credit market and overall economic conditions. They hope to resume construction sometime in 2009. (They didn't)

http://www.vegastodayandtomorrow.com/echelon_place.htm

[ddeclue]

20. No doubt your local electeds are just as captured and co-opted by the real estate developers as ours

They just don't get the point that they need to be focusing on sustainable manufacturing and high technology jobs, not just short term development that initially drags more people into the area to do more construction until you reach a point where the whole house of cards tumbles down when there are no underlying long term jobs in the community.

What's there solution?

More development of course.. :sarcasm:

Beyond the point of the development collapse though, all that additional development does is add to the housing and commercial surplus and further lower real estate values and rental rates.

You need to fire your city council and bring in some people who are going to turn things around and focus on jobs. You also need to focus on code enforcement. Don't let these property owners get away with not maintaining and securing their properties when they are vacant - they need to be fined and forced to maintain them or what's left will end up like Detroit. This will also force these vacant property owners to stop holding out for high prices and rents and sell them quickly at a loss and thus end the vacancy. They speculated and lost but the rest of the community shouldn't go down with them because of their greed.

[Hello_Kitty]

22. You got it. Myopic morons who think tax cuts and more McMansions will solve everything

Seriously, and to make matters worse, most of Arizona is a desert. Which means that if your state and cities are run by myopic morons water planning is not a priority. Phoenix and Tucson both have water management plans that require builders to secure a water supply but outside of the cities anything goes. "Wildcat" developments sprung up all over the place and, I kid you not, some of them sold homes to unsuspecting buyers with no running water.

Sadly, firing the lot of them doesn't look like it's going to happen soon since Arizona has literally the stupidest voters in the nation. We're the folks who brought you Sheriff Joe Arpaio, after all. :banghead:

[ddeclue]

23. I know - I lived in Phoenix in the summer of 2002.

I think your voters might be second stupidest after the ones in Georgia. Don't beat yourself up.

:D