March 2010

 

Downtown Long Beach Retail Visioning

As you may have noticed on our home page, the Dowtown Long Beach Associates (DLBA) has convened a Retail Visioning Steering Committee to guide strategic planning for the retail growth in the downtown. I have been focused on this matter for a few months now. We have a comprehensive plan that will be presented to the public Thursday, March 4 at 6:00 at the First Congretional Church.

 

We are still experiencing a big credit crunch in the commercial real estate marketplace. It used to be that our clients could bring 25% cash down payment with decent credit and take down their project. Now, on a good day, it's 40-50% cash down if a number of other variables in-synch.

 

At the risk of sounding self-serving, when commercial properties trade, typically many tradesman are put to work in the flooring, electrical, plumbing construction, etc. That one transaction generates economic activity. No doubt about it. Yet, banks are very reluctant to lend.

 

The banking industry received hundreds of billions in bail-out money from the US Government to rescue them from a very poorly managed risk taking period of time in their industry's history. Now, they are holding to their dollars on the sidelines to bolster their own balance sheets. I understand that to a degree. These dollars are federal dollars, that was raised by adding Federal debt that are kids and grandkids will be paying for years in the future. I have no quarrel with how the money was raised, my complaint is that it's sitting on the sidelines doing no one any good but the bank that recieved it.

 

If the economic stimulus package is going to work, we need to get money 'out on the streets'. Consider 'grease in the gear box'. Without it the economic engine comes to a grinding halt or sputters at best.

Now, to be clear, I am advocating for good solid underwriting guidelines here nothing flimsy or shaky.

 

What am I asking? For each one of you to contact your commercial banker and see why they are holding back. If they are honest with you, they will say they are borrowing money from the Federal Reserve at 0.5% (or very low interest rates) then buying Treasury Notes at 3.0-3.5% and making a nice spread with little or no risk. While that's a swell arrangement for the banks, it does the rest of the country and the economic recovery no good whatsoever.

 

If your bank doesn't listen to you. Call your Congressmember or US Senator and give them your opinion. I would love to hear yours. Write to me at brussell@blaircommercial.com .

 

 

Blair Cohn has only been at the helm of the Bixby Knolls Improvement Association a short while. However, he is being praised for the progress he is making in helping the Bixby Knolls area be the best it can be.

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