KeNo's Housing and Economic Portal: Wednesday February 23 Housing and Economic stories

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Tribune Tower in default | San Francisco Business Times - (www.bizjournals.com) After losing numerous tenants, including its namesake, Oakland’s Tribune Tower, one of the city’s most recognizable landmarks, has slid into default. Bluett & Associates has been appointed as receiver for the 21-story, 90,000-square-foot property after the previous owner, Edward B. Kislinger, was issued a notice of default on a $10 million loan. Kislinger, an attorney based in Los Angeles, bought the property in 2006 for $15.3 million from Madison Park Financial, a development firm that still manages the property.

Claremont Hotel Files For Bankruptcy, operations unaffected - (www.berkeleyside.com) The Claremont Hotel & Spa, a fixture in the Berkeley hills since 1915, was part of a luxury hotel group that filed for bankruptcy yesterday. The Claremont and seven other resorts were part of a $6.6 billion acquisition by Morgan Stanley in 2007. When debt of $1.5 billion came due yesterday, lenders foreclosed on five of the properties (three other properties with longer-term debt did not file for Chapter 11 protection).

The lenders, led by hedge fund Paulson & Co, stated in a press release that they intend to work down the debt and position the hotels to benefit as the economy improves. The last few years have been particularly bruising for the luxury end of the travel industry, and the Claremont has suffered from poor occupancy rates. The Morgan Stanley purchase came right near the top of the market for luxury properties. Although business turned down soon after the acquisition, there was some investment in the Claremont, including a complete revamping of its main restaurant, The Meritage, refurbishment of guest rooms, and the addition of a new children’s pool. For many Berkeleyans, the Claremont is primarily used for its health and tennis club (and Berkeleyans also know that the resort has a Berkeley address but is technically in Oakland). Jokey emails were flying around this morning imploring members to make sure they returned towels, but people seemed unfazed by the bankruptcy.

Mario Draghi and Goldman Sachs, Again - (www.huffingtonpost.com) In its previous response to us, the Bank of Italypointed out that Mario Draghi (its current governor) did not join the management of Goldman Sachs until 2002 - hence he was not there when the controversial Greek "debt swaps" were arranged. We agree that he joined Goldman only in January 2002 (this was in our original post). But the latest revelations regarding the Goldman-Greece relationship (on the Senate floor, no less) clearly indicate that Goldman was a lead manager of Greek debt issues in spring 2002, i.e., when Mr. Draghi was on board. This raises three entirely reasonable and straightforward questions.

1. Was Mr. Draghi involved in the Goldman-Greece relationship? Sources indicate that this was very much part of his set of responsibilities, but this may be disputed.

2. If Mr. Draghi was involved in marketing Greek debt, did he at that time know the true Greek debt numbers - i.e., was he aware of the "debt swap" arrangement? Perhaps his Goldman colleagues concealed that information from him.

3. And when/if Mr. Draghi became aware of the inherent misrepresentation involved this transaction, did he take steps to fully informed investors (and any relevant regulatory bodies)? Again, it is entirely possible he learned of this matter only recently and from the newspapers.

Gas pump prices highest ever for this time of year - (www.news.yahoo.com/s/ap) U.S. gasoline prices have jumped to the highest levels ever for the middle of February. The national average hit $3.127 per gallon on Friday, about 50 cents above a year ago. The price is about 6 percent higher than on this date in 2008. The next day, pump prices began a string of 32 gains over 34 days. They rose 39 percent over five months, eventually hitting an all-time high of $4.11 per gallon in July. Although gas prices are expected to rise, most experts aren't expecting a reprise of 2008, when the price spike forced many drivers to join car pools and trade in gas-guzzling SUVs for fuel-efficient cars. "It would be a mistake to think we're going to have that all over again," said OPIS chief oil analyst Tom Kloza.

Grand Wailea Hotel in Bankruptcy - (www.staradvertiser.com) Maui's Grand Wailea Resort Hotel & Spa was placed into bankruptcy with four mainland luxury resorts after the owner of the properties couldn't restructure $1.5 billion in debt that matured yesterday. The five resorts are expected to continue operating without disruption while their owner, a group of investors, works with lenders to restructure the debt under Chapter 11. The move was made four days after the investors group seized ownership of eight resorts from Morgan Stanley real estate funds at a foreclosure auction. Three resorts didn't have debts maturing yesterday and were excluded from the bankruptcy, which was filed in New York. Besides the Grand Wailea, the other resorts placed in bankruptcy were La Quinta Resort & Club and Claremont Resort & Spa in California, Doral Golf Resort & Spa in Miami and the Arizona Biltmore Resort & Spa in Phoenix.