KeNo's Housing and Economic Portal: Thursday May 20 Housing and Economic stories

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TOP STORIES:

More Than a Million May Lose Jobless Aid Due to Deficit Concern - (www.bloomberg.com) Since the U.S. recession began in December 2007, Congress has extended the length of unemployment benefits for the jobless three times. Now, the lawmakers may have reached their limit. They are quietly drawing the line at 99 weeks of aid, a mark that hundreds of thousands of Americans have already reached. In coming months, the number of those who will receive their final government check is projected to top 1 million. It’s a deadline that has rarely been mentioned in recent debates over jobless benefits, in which Republicans have delayed aid because of cost concerns. The deadline hasn’t been lost on Teauna Stephney, a 39-year-old single mother from Bothell, Washington, who said she could become homeless once her $407 weekly checks stop in June. “What are people like me supposed to do?” said Stephney, who said almost two years of benefits haven’t proved long enough for her to find work after she lost her last job in August 2008. Referring to lawmakers, she said, “I would like them to come and talk to me and spend a day in my shoes.”

W Hotel's developer says it is bankrupt - (www.boston.com) Just months after opening a 28-story tower in downtown Boston, the owner of the upscale W Boston Hotel and Residences filed for bankruptcy protection yesterday, a stunning financial breakdown for a developer that labored for more than a decade, only to open as the hotel market plummeted and condo sales still had not picked up. Documents filed in US Bankruptcy Court in Boston by SW Boston Hotel Venture LLC, a subsidiary of Sawyer Enterprises, list liabilities of $100 million to $500 million. Several months ago, the City of Boston provided a $10.5 million loan the developer said it needed to finish building the $234 million project. The complex’s troubles began even before its October opening, with Sawyer struggling to pay for furnishings and high-end finishes that guests and condominium buyers expect from the W brand, which emphasizes luxury amenities and aims to cater to trendsetters. The W’s cash flow troubles grew early this year with slow sales of its high-priced condos. Typically, large hotel complexes rely on quick sales of the condos to allow the expensive hotel operations to establish a foothold in the market.

Care to donate money to the US government? - (www.pay.gov) This is not a joke….

Welcome to the United States Treasury's site for making donations to help reduce the public debt. If you would like to make a donation, please fill in the required fields and click the Submit Data button when completed.

Tustin base project called worthless bc of falling land prices - (www.lansner.freedomblogging.com) Two units of J.F. Shea Co. say they want to back out of a deal to develop an 820-acre parcel at the former Tustin Marine air base, saying that falling land values make it impossible to build homes, shops, offices and a hotel in today’s economy. Shea maintains that land once valued at $236 million is now valued near zero, one city official said. Tustin Legacy Community Partners (TLCP), consisting of Shea Properties and Shea Homes, agreed in 2006 to pay $236 million for the project, plus install infrastructure such as roads, sewer and water systems and parks in exchange for 160 developable acres in the heart of Tustin. But Shea Properties President Colm Macken said that home and commercial values have sunk so low that it’s not worth going forward with the project unless the city of Tustin makes concessions it’s not willing to make. For one thing, the city wants Shea to install $250 million worth of infrastructure by 2013. Shea believes, however, that property values won’t be back to 2006 levels until 2016, he said.

For Many Horse Breeders, a Losing Bet in Kentucky - (www.nytimes.com) The for-sale signs on horse farms are as common as the bluegrass and the limestone fences here, and breeders have grown accustomed to sending horses through the auction ring and feeling fortunate when they fetch half of their asking price — or anything at all. The run-up to the Kentucky Derby is normally an exciting time for lawyers playing matchmaker between deep-pocketed clients and owners of can’t-miss stallion prospects. No more. “The rails are quiet,” said Mike Meuser, a Lexington lawyer who is usually in the forefront of such deals. “Collecting, or trying to collect money, is the bulk of my business these days.” The bankers have disappeared here as well. Lending to buy horses, the grease in the deal-making machine for many years, has dropped 60 percent to about $400 million from an estimated $1 billion in 2007, according to the Kentucky Thoroughbred Association. The decline is no small matter here in bluegrass country, where horses, all kinds, are responsible for 100,000 jobs and $4 billion in economic impact, according to association figures, and are the cornerstone of Kentucky’s $8.8 billion tourism trade. It is one reason the racing industry has lobbied for casinos in the state’s racetracks, a position that would have been unthinkable not too long ago.

Barofsky Says Criminal Charges Possible in Alleged AIG Coverup - (www.bloomberg.com) Neil Barofsky was unpacking boxes in December 2008 when the stench of sewage wafted through the hallways at the 168-year-old Main Treasury Building. The space assigned to him as head of the Office of the Special Inspector General for the Troubled Asset Relief Program, or SIGTARP, was shoehorned into the basement, three floors below U.S. Treasury Secretary Henry Paulson’s offices. “They eventually discovered a broken sewer main beneath the floor,” says Barofsky, 40, adding that he doesn’t think any slight was intended by relegating him to the malodorous quarters. Still, he says with a smile, “I wasn’t given the prime real estate in Treasury.” The incident was noted by Beltway insiders, Bloomberg Markets magazine reports in its June issue. “It became an apt metaphor for the foul relations between Treasury and SIGTARP,” says Michael Smallberg, an investigator at the Project on Government Oversight, a Washington watchdog group. That tense relationship has grown out of Barofsky’s mandate to monitor and root out fraud and waste in the management of TARP, the $700 billion program passed in October 2008 to remove toxic debt from the banks. The special inspector general, in a series of reports, interviews and congressional hearings, has heaped criticism on the Treasury Department’s operation of the program. Barofsky’s most recent broadside came on April 20, when a SIGTARP report labeled a housing-loan modification program funded with $50 billion of TARP money as ineffectual.