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January 11, 2010
U.S. cities seek ways to aid property developers
Reuters
Guess which company gets the first mention in a story about government aid to real estate developers?
U.S. municipal and state governments, despite facing their own cash shortfall, are finding ways to help local property developers navigate the current downturn, in some cases rescuing projects that would otherwise fall victim to the credit crunch.
Such public-private partnerships highlight the increased role of the public sector in a business where the help of bureaucrats is typically not wanted. In atypical times, such aid may be a stepping stone toward the eventual return of private capital.
Au contraire, mon Reuters. Some companies always seeks the help of the public sector — or at least its money.
Las Vegas' city council voted last month to move its city hall, a decision Mayor Oscar Goodman called a "mini-stimulus." It is a complicated deal that frees up the building's attractive current location for the development of a district anchored by a sports arena, since Vegas hopes to attract a Major League franchise.
"The city needs something like this right now," said Eric Louttit, Vice President of Finance at Forest City Enterprises Inc., a national developer of retail, office and apartment properties.
Forest City-watchers know that "complicated deal" is a euphemism for "taxpayer-subsidized boondoggle." They also know to insert "Forest" before "city," as in "[Forest] City needs something like this right now."
Louttit, the project developer of Forest City's Las Vegas land, said that, without the move, downtown development could remain stalled for years.
"The economy is really quite bad," he said. "I don't think there's any legitimate hope of any private sector developer coming in."
NoLandGrab: That might sound convincing to those unfamiliar with the Forest City m.o., but bad economy or good, Forest City rarely builds anything without a heaping helping of public subsidy.
Posted by eric at January 11, 2010 3:26 PM