A Capitol Hill conundrum on affordable homeownership, another state wants the Chicago Bears, and a historic theater reopens for business. From the wild and wooly world of real estate, here are our Hits and Misses for the week of Feb. 9-13.
Miss: A Problem, Not a Solution. In concept, we should be rewarding a Hit to the House of Representatives for voting 390-9 to pass the bipartisan Housing in the 21st Century Act. Not only was this a relatively rare case of rival political factions uniting for a common cause, but it is also one of the very few housing-focused bills approved by this congressional session. Unfortunately, the Housing in the 21st Century Act has some significant differences with the ROAD to Housing Act that passed in the Senate. The Ranking Member of the Senate Banking Committee, Sen. Elizabeth Warren (D-MA), has made it clear she is not supporting some aspects of the House bill that involve community banks, while House Republicans are not in favor of the Senate bill’s effort to expand several federal grant programs. And we assume President Trump is unhappy that neither bill includes his initiative to restrict institutional investors from buying single-family houses. Don’t be surprised if this effort stalls and dies amid a lack of compromise.
Miss: A Doomed Investment. The Chinese owners of New York City’s Waldorf Astoria are putting the iconic hotel up for sale months after it reopened following a multibillion-dollar renovation. The property’s eight-year, $4 billion overhaul was five years behind schedule and more than $1 billion over budget. China’s Anbang Insurance Group bought the property in 2014 for $1.95 billion, but the Chinese state-run Dajia Insurance Group was later appointed to manage Anbang’s assets after its CEO, Wu Xiaohui, was prosecuted for economic crimes. We don’t know what the listing price is, but it is obvious the seller is not going to recover all of the renovation costs with the sale.
Miss: Chasing the Bears. The future of the Chicago Bears became somewhat sillier as lawmakers in Iowa jumped in with a pledge to build a new stadium that could host the Illinois team. The Bears have been at a stalemate with Illinois lawmakers over the public funding aspect of the stadium they want to build in the Chicago suburb of Arlington Heights. Iowa’s inquiries follow efforts from lawmakers in Indiana to bring the team into the Hoosier State by building them a stadium. But could you imagine if the lawmakers in Illinois, Indiana, and Iowa put the same degree of time, energy, and proposed spending into the creation of affordable housing rather than the accommodate of a football team that hasn’t won a Super Bowl in 40 years?
Miss: The Fraying of a Retailer. The ongoing Chapter 11 bankruptcy restructuring of Saks Global is resulting in the further chipping away of the retail giant’s luxury stores. The Associated Press reports the company will be closing eight of its Saks Fifth Avenue locations plus the Neiman Marcus store in Boston. This will leave the company with 25 Saks Fifth Avenue stores, 35 Neiman Marcus stores, and two Bergdorf Goodman locations. The company, which is shuttering most of its Off Saks 5th stores, is also closing 14 standalone Fifth Avenue Club personal styling suites and the home décor site Horchow.com. Hopefully, this is the last of the closures for the company, which is struggling to stay afloat amid a rapidly changing retail environment.
Miss: Self-Congratulatory Accolades. No one ever accused Bill Pulte of being modest, and the pugnacious Federal Housing Finance Agency director blew his own horn again this week with an announcement that he has donated $46,914.54 from his government salary to Wounded Warrior Project. Sounds good, eh? But Wounded Warrior Project has not publicly acknowledged this gift, nor did Pulte offer any proof of the funds transfer. And considering Pulte’s tenuous track record with the truth, it is difficult to take his self-serving claims seriously. Perhaps Pulte should focus on doing his job rather than promoting himself?
Hit: Curtain Up! One the nation’s most prominent cultural sites, the historic Castro Theatre in San Francisco, has reopened following an extensive renovation. KTVU reports the two-year overhaul didn’t quite go as smoothly as planned – the $20 million budget ballooned to $41 million, and a controversy arose over the planned replacement of traditional seats with removable seats – but the 104-year-old landmark is finally back at the center of San Francisco’s cultural world, offering a mix of movies and live entertainment including a 20-day residency by British singer Sam Smith.
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
