Archive for June, 2012
New York City Mayor Michael Bloomberg recently announced a proposed initiative to limit the size of sugared drinks available at retail locations in the city to 16 ounces or less.
The motivation behind the idea is to curb the burgeoning weight of the boroughs’ inhabitants, 50% of whom are either “overweight or obese.” You can still buy larger sized sugared drinks in supermarkets in the city, but if you want a 20 ounce drink at the movie theater, restaurant or ball game, it’s not gonna happen.
Drinking too much sugared soda does not contribute to one’s good health. But don’t most people who drink large sodas from the fountain fill their cup with ice beforehand? Doesn’t the soda have to fill the remaining gaps between all of the ice cubes? If you bought a 24 ounce fountain soda, wouldn’t you really be buying 12 ounces of ice cubes and 12 ounces of actual soda?
Could a restaurant serve you an 8 ounce soda, and still refill it continually while you are dining? If someone were intent on buying a large can of sugared soda and it weren’t available, wouldn’t they just buy two smaller cans?
Michael Bloomberg is intent on creating a policy which is at best a farce and at worst a sad feat of social engineering that will do nothing but kill trees to publish the legislation. Mayor Bloomberg should quit wasting time trying to enforce what size Mr. Pibb can you can purchase down in the East Village, and quit drinking his own fewer-than-16 ounce Kool-Aid.
The opinions expressed in Random Rants are solely those of the author and do not represent the opinions or viewpoints of NAIOP Minnesota, its leadership or its staff.
Located in the heart of the University of Minnesota Twin Cities campus, Stadium Village Flats is redefining student living. With construction set to be finished in August 2012, response from students was overwhelming with over 95% of the building already leased. Opus Development Corporation selected the Washington & Ontario location for its walking distance from all academic and athletic buildings on the East Bank of campus and due to the need for upscale student housing in that area.
Stadium Village Flats has surpassed the standard amenities that are included in student living. Each unit is fully furnished with a modern touch, stainless steel appliances, granite countertops, and flat screen televisions. Residents of Stadium Village Flats will have access to unique private lounges on each of the floors including: a 20-person movie theatre, fitness room, yoga studio, tanning room, study room, gaming room and a penthouse sky lounge. Conveniently located on the first floor of the building, residents have easy access to one of the largest CVS Pharmacy locations on the University of Minnesota campus, Noodles & Company and Dino’s Gyros: The Greek Place.
By Christopher Huntley, Attorney
You’ve executed a lease, got your security deposit, confirmed the financials of your tenant, expended thousands of dollars worth of tenant improvements, and finally your tenant moves in. All is well…until your tenant declares bankruptcy and your secure source of rent disappears. The landlord’s rights in connection with a tenant bankruptcy are limited, but the landlord is not completely subject to the mercy of the bankruptcy court. And, a landlord may be able to minimize or even completely remove its exposure if it plays the bankruptcy game correctly.
The Landlord’s Rights During a Tenant Bankruptcy
When landlords hear the word “bankruptcy,” most believe that they are facing an uphill battle that will rarely result in them retrieving what is rightfully theirs along with a long line of administrative hurdles that will cause them headaches for months or years to come. The truth is that most landlords fare better than other unsecured creditors when their tenants declare bankruptcy. It is true that a landlord is prohibited from suing the tenant for past due rent or other past due amounts during the bankruptcy proceeding if such amounts accrued prior to the tenant filing the bankruptcy petition, and any eviction proceedings will be put on hold once the bankruptcy petition is filed, but that is not the whole story.
A landlord is generally compensated for all obligations that accrue under the lease during the bankruptcy proceeding as the bankrupt tenant or the bankruptcy trustee is obligated to continue to perform under the lease including paying all amounts that become due while the bankruptcy is ongoing. And, the landlord is entitled to make a claim, and usually obtain compensation, for any defaults that arise during the bankruptcy. If the bankruptcy trustee assumes the lease (only applicable to reorganizations), the lease will continue as if no bankruptcy occurred, the tenant will need to either cure or provide adequate assurances that it will cure in the near future any existing defaults (including defaults that arise prior to the bankruptcy), and the tenant will be forced to demonstrate adequate assurances of future performance under the lease before the bankruptcy court will allow the tenant to assume the lease. The landlord will essentially be made whole in such a situation.
The downside to a bankruptcy is (more…)
Mark Davis, The Davis Group – Real Estate Services
Nate Erickson, Cushman & Wakefield | NorthMarq
Sherry Hastings, Frauenshuh
Jill Rasmussen, The Davis Group – Real Estate Services
Stephanie Walsh, Klefstad Companies
Welcome to the fifth installment of Cocktail Confessions. Cocktail Confessions is a publication which tracks down three industry movers and shakers, feeds them some cocktails, and gleans answers to specific questions. Their answers are published exclusively on the Pulse and are meant to provide interesting commentary and insights for the NAIOP constituency.
If you have questions you’d like asked for future segments, please leave them in the comments section, below.
In this installment we are pleased to have David Kordonowy, current NAIOP Minnesota Vice President and President/CEO at Steiner Development; Norma Jaeger, Vice President at Transwestern; and Ben Bastian, Analyst at CBRE Capital Markets. They were each asked the same four questions, and their responses are outlined below.
Question 1: Where do you see the biggest opportunity in commercial real estate in the next five years?
Biggest opportunity – I have no crystal ball to see 5 years into the future, partly because I’m still trying to figure out what the heck happened the past 5 years. But at least we survived. I am not seeing one Big Opportunity; rather, I am seeing many small opportunities, strung together, that will result in the growth and success of our company. I do know with certainty that Steiner has a great team of experts that are smart, trained, and highly motivated to deliver the best service, advice, and solutions for our customers. We are in hot pursuit of a select group of national retailers seeking build-to-suit services (development and construction), plus we expanded our tenant rep business to service small to mid-size companies.
Troubled properties over the next few years will provide opportunities for those doing receivership work and buyers looking for opportunities. Secondly, MOB’s are still a great niche that will continue for the foreseeable future.
Five years, Tony?!?!? I can’t predict what I’m doing next month or even this weekend. However, we’re starting to see lenders stretch on LTV and other metrics, so over the next year I anticipate lenders will try harder to get money out the door. They’ve been very selective and only lending on the best deals. While Fannie and Freddie continue to be busy with apartments, I expect core office and industrial deals to remain the bulk of the transactions. I also expect there will continue to be a lot of opportunity for investors who have cash available to capitalize on acquiring property at an extremely low basis as existing owners and seller/servicers attempt to clear their books of troubled assets.
Question 2: How do you measure success – personally and professionally? (more…)
The Public Policy Committee acknowledges those people who are representing NAIOP and the commercial real estate industry in various capacities. We appreciate and thank them for their time and energy.
Do you have further interest in any of these topics? Or have suggestions or feedback on these topics?
- Links with more information are provided
- Contact Kaye Rakow at firstname.lastname@example.org
The Met Council is in the process of working on the next generation of the Regional Development Framework and asked regional stakeholders to give their perspectives.
Frank gave a historical, current and projected overview of the commercial real industry, educating Council members on how the business works and what’s important to its ease and success.
To cite a few of his points:
- Cost and regulations really matter-must be supported by market rents
- Developers don’t create markets, they react to them
- Scarcity of public resources demands more cost-effective and efficient government service delivery
- Allocate resources to alternatives that are most likely to result in economic expansion
- The interplay between risk and a reasonable rate of return
- The impact of technology on job creation and the demand for space
Thanks to Rick Collins and Pat Mascia for helping Frank prepare his remarks.
The Property Tax Working Group was established by the Minnesota Legislature in 2010. The specific goals of this working group are:
- to simplify the property tax system and make it more understandable;
- to shorten the two-year cycle from assessment through property tax collection; and
- to determine the cost versus the benefits of the various property tax components and to suggest ways to achieve some of the goals in simpler and more cost-efficient ways.
The group must report its findings to the Legislature by February 1, 2013.
David Bade, Director of Land Development Services at RLK Inc., represents commercial real estate developers on the Minimal Impact Design Standards (MIDS) Work Group, the next generation of storm water management.
Historically, the goal of storm water management was to move water off the landscape quickly and reduce flooding concerns. Now the focus is on keeping the raindrop where it falls.
The development of MIDS is based on low impact development (LID) – an approach to storm water management that mimics a site’s natural hydrology as the landscape is developed. Using the LID approach, storm water is managed on site and the rate and volume of predevelopment storm water reaching receiving waters is unchanged.
The Minnesota Legislature allocated funds to “develop performance standards, design standards or other tools to enable and promote the implementation of low impact development and other storm water management techniques.”
Members of the MIDS workgroup will provide guidance and recommendations to the MPCA on the MIDS project.
Brandon Champeau, Development Manager at United Properties, represents commercial real estate developers on the MIDS Linear and Redevelopment Technical Team, which is a sub-group of the MIDS Work Group, formed in February 2012.
Representing the Nexus Task Force and all property tax payers in support of NAIOP’s expenditure type reporting legislation:
- Paul Reinke, Senior Director – Development at Haugland Company, provided the perspective of a commercial property owner as well as a city council member.
- Mark Haveman, Executive Director of Minnesota Taxpayers Association, provided the perspective of good tax policy and transparency for all taxpayers.
- Mark Reiling, Senior Vice President, Principal, Cassidy Turley, provided the perspective of an owner/investor.
- Doug Fulton, Executive Director, Brokerage Services, Cushman & Wakefield/NorthMarq, provided the perspective of a site selector/lease negotiator.
- Pat Mascia, Senior Vice President-Minneapolis/St. Paul Operations, Duke Realty, provided an overview of the market both in Minnesota and nationally.
- Adding the perspective of a business owner and business property taxpayer, were Kevin Bador, Executive Vice President, Japs Olson Company, in St. Louis Park and Steve Wise, President of Cass Screw Machine Products in Brooklyn Center.
“Last week I wrote a letter to the lawmakers who sponsored a great idea that was included in the tax omnibus bill vetoed by Gov. Mark Dayton last week. The great idea was requiring cities — and, I hope, all units of government, including school boards, eventually — to post four years of budgets by expenditure type on their websites.”
“This would make city and other local government spending so much more comprehensible to voters and, frankly, to city council members. I know as a former city council member how dependent councilors can be on staff; you have to push to get behind the numbers. I could have done a better job with this kind of reporting. I can see greater accountability and leaner budgets as clear outcomes.”
Read the article.
By Kim Crockett, Duluth News Tribune, Wednesday, May 23, 2012
Kim Crockett is chief operating officer, executive vice president and general counsel for the Center of the American Experience, a nonpartisan, tax-exempt, Minneapolis-based public policy and educational institution.
A provision for transparency in local government
St. Paul Pioneer Press, Thursday, May 10, 2012
- “A bill in the Minnesota Legislature to require cities and counties to report more budget information — in a way that helps citizens spot local spending trends — could become law as part of a renegotiated tax bill. If it fails, it will be one of the 2012 session’s missed opportunities.”
- “Dayton’s signature on the tax bill will mean many things to Minnesotans. We hope it also will mean new transparency for local government units and the citizens who want answers that now are buried deep in city budgets.”
- The St. Paul Pioneer Press has been supportive of NAIOP’s Expenditure Type Reporting since day one.
- Read the entire editorial.
A little more transparency in Faribault is a good thing
Faribault Daily News, Thursday, April 26, 2012
- “It’s a good bill, one that empowers taxpayers and that deserves to be law.”
- “Far be it for us to suggest another state government mandate is a good thing, but the measure looking for more local government transparency may very well be just that.”
- Read the entire editorial.
A Chicago-based watchdog group shows that 17 retired city or county workers receive pensions of more than $100,000 a year.
- “At present, Public Employees Retirement Association of Minnesota (PERA) is only 76 percent adequately funded to meet its future commitments. The system would need another $4.4 billion to become fully funded.”
- “Solvency – or the assurance that 100 percent of potential pension payouts have money behind them – is mandated by state law by 2031. PERA is on track to reach that goal….”
- According to David Montgomery, chief administrative officer for the city of Duluth: “Minnesota is not the worst out there, by far. But there is an issue… It’s not an imminent, crisis-tomorrow issue, but if you let it go, the less time you have to make up any shortfall. And time is your best friend to make the impact of any change more moderate.”
From the Duluth News Tribune, April 22, 2012
In the event you have an interest in MNDOT’s CIMS, which will be rolled out this spring, the following links provide necessary information:
- Invitation from MNDOT Commissioner Sorel
- Clarifying information from Mr. Schaffner, the project manager of CIMS
- CIMS meeting schedule (the first one is in the NE metro area on May 8)
- CIMS meeting strategy description