Monday, October 29, 2007
"Renaissance Homes Declares Chapter 11 Bankruptcy"
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Monday, October 22, 2007
The Collapse of Bend Has Begun
I don't know if anyone else got this feeling, but the din on the Bearish Buzz Meter seemed to redline for most of the week. There just seemed to be a non-stop cacophony of intense negative sentiment towards housing primarily, but the masses are starting to grasp the effects that wiping out trillions in Bubble wealth is going to have on the rest of the economy.
Starting locally, you can see the deleterious effects overblown housing prices are having on industry. After engaging in what are almost certainly under-the-table dealings with Columbia Air higher-ups, Cessna stated that it would keep a dramatically scaled down Columbia in Bend, only if it's rent was cut in half.
Although they probably will at some point, Cessna doesn't really address any other cost as a contingent reason for keeping Columbia, other than real estate costs. The real estate costs aren't just some small, insignificant side issue here: It's the primary driver of Cessna's decision. Columbia is just the tip of the iceberg.
Industry is evacuating Bend like there's an Ebola epidemic here. And many companies, Cessna included, probably are thinking that price per sq ft on their rented space is their primary real estate cost driver, and it's really not. The high cost of residential homes is indirectly borne by every company here. How do you think rents & mortgages get paid?
That $1 million per week in operating losses quoted by Columbia officials is going to pay for, among many other things, employees & their real estate needs. In fact real estate costs are among the highest costs for local working Bendites (some of the highest in the U.S.), and therefore one of the highest costs for local businesses.
I've said this till I'm blue in the face, but the inflation caused by high home (and commercial RE) prices is pervasive; it'll invade everywhere. Columbia Air, Bend Tarp & Liner, Oregon Woodworking, and Seaswirl are just the tip of the iceberg. These companies are either folding or moving almost entirely due to real estate costs & it's after effects.
Companies are UNABLE to hire employees here. Why? Because no one can live here on peanuts anymore. "Poverty with a view" used to be doable here. You could live dead simple, go agrarian, or even as BendBust has suggested, go into "hunter/gatherer" mode to make ends meet. "Poverty with a view" just is impossible nowadays... maybe in Burns, but not here.
So what companies are really faced with is this: Can I make the mortgage payments on the typical Bend home, plus all the other necessities of life for each of my employees to produce the goods/services my company makes at a competitive price? And the answer is becoming an overwhelming "No".
The economics of staying & working in Bend is fast becoming an untenable proposition for thousands of people, because it is completely impossible for the companies located here. I think I read that the typical Bend family needs to make something like $25/hr for each working adult to survive here. 98% of all Bend companies cannot pay a wage anywhere close to that. Somethings gotta give.
The shrill din of bearishness recently has become almost unbearable. We're almost certainly in a recession, and it is almost certainly due primarily to deflating home prices. Some people wonder why I would even have to affirm such an obvious fact... but read some of the comments, there are still a decent sized contingent of True Believers. So we are being pushed into recession because ALL home prices are declining (not just subprime), and homes are the primary "container" of wealth in this country.
And the U.S. home market has experienced a faint shadow of what Bend has gone through in the past 5 years. We literally hit the Housing Bubble Lottery Jackpot. Probably not a single other town in the U.S. that has done as well as Bend. Probably less that 1 in a 1,000 that have done as well as Bend in the past 20 years; we went from half the national median to almost double at the dead white-hot top last year.
So what happens here? Everyone else is worried about a nasty recession due to an appreciation slump that should make the average Bendite laugh. I don't think people will be laughing long. The contagion of RE inflation will reach into every nook & cranny in our local economy, even more so than it has already. Combine that with a complete cessation of lending on what has essentially been a proxy for Americans income: their housing ATM.
And the bearishness became almost intolerable. Look at last weeks comment count: Over 300 comments, many of the grave-dancing variety. Some really severe beating on those who have used local rags as their own PR/Marketing tabloids for spreading rampant misinformation. The local media & the local RE machine are complicit in pumping the Bend Dream to levels that are simply unsustainable. And this blog has take more than it's share a swipes at them for it, and most deservedly so. In fact, I consider the uncovering of blatant lies by local media as being one of the primary goals of this blog.
So Phase I, "The Recognition of The Bubble & All It's Terrible Consequences" seems to be happening, and with some decidedly furious intensity in the past week. And I'll admit that on a personal level, I get a bit of "validation satisfaction" from that. But then I start thinking about what's really on the other side of this thing. And not just from a selfish perspective of, "Hey, it'll be great! I'll finally be able to afford to buy that house I've always wanted at a rock-bottom price! Cool!". But from a real all-inclusive viewpoint: From that perspective, I'm actually pretty sure I WON'T be able to buy that house I've always wanted to because of the vicious after-effects of what the RE inflation has wrought; a completely destroyed industrial sector and a gutted business base.
There won't be anything here for me (and many, MANY others) when housing gets to very attractive levels. If you can buy for ALL CASH and have a reliable income stream that is 100% independent of the local economy, then you will be one of the rare individuals who will be able to capitalize on the Implosion of Bend. There is the occasional commenter who seems to intimate that they have a steady local job at attractive wages, plenty of savings, and a cash cushion, and are therefore pretty much immune to a local downturn. But I really start to wonder how secure ANY job is around here. I know people who moved to Bend to work at Columbia, and until recently fit this bill to a T. But they are now fully aware that they may lose their job and have to relocate. And they also know they are underwater on their home by $100K, which is where a lot of their "savings" was. They're not broke... but they are in a definite crunch, because they MUST sell their home in order to keep their income stream alive.
If the rest of the country goes into recession, Bend will almost certainly experience something akin to a depression. Even Bill Valentine said that since Bend went up 50% more than the rest of the country (only 50%?), it'll experience a commensurate decline. And the collapse of Bend, while late in coming, has begun. And we are starting to see it manifest itself in a number of ways.
First, Becky Breeze, a much maligned target for RE fibbery, has not sold nearly the unit volume at The Plaza that she claims. Whether it's "most", "about 25%", or whatever she is claiming now, it seems that only 2-3 Plaza condos have sold. Why would she lie? And lie about information that is publicly available? I know she was long schooled at the Community College of Creating Perceived Shortages, as were most area Realtors, but I wonder if she (and others) have to make such claims to assuage the fears of those they are indebted to.
Becky & Tom seem to be in a World of hurt with The Plaza. It is just a terribly conceived idea. It's the sort of thing that could only work in a real urban center, where there truly exist intractable land shortages. And at the time they were in the planning stages, I'm sure it seemed like Bends "land shortage" would only become more acute. So they went forward, completely oblivious to the fact that high land prices "produced" land out of thin air, all over Bend. Subdividing pretty much became the only game in town at the tail end of the Bend Bubble.
But peruse craigslist, or the Bulletin and you will find we are AWASH IN LAND. It's everywhere (One of the main "suppliers" is chameleon "Destination Resorts".) One of the "unintended side effects" of RE inflation; where once there was none, there is a tsunami. Every inch of Measure 37 approved scrub, is getting chopped into innumerable lots. Becky's wonderful concept both made possible AND destroyed by the RE Bubble. And have no illusions, this same fate awaits virtually EVERY SINGLE LARGE RE PROJECT IN CENTRAL OREGON. Lafky's Mercato? Dead. Redmond Water Park? Dead. Yarrow? Dead. IronHorse? Dead. Remington Ranch? Dead. These, all the other chameleon subdiv's, along with Breeze's Plaza will stand as a near permanent testament to the lunacy of the past 3-4 years. For the want of just a few short years of hyper-speculation, this town will be lost.
A commenter from many moons back said they saw a plaque on Arnie Swarens (long-time Sisters Realtor) desk that said something along the lines of, "God, give me the knowledge to not waste the next real estate bubble". Well, it's over. If you've still got skin in the game, you've overstayed and will probably lose everything you made, if not more. If you're out, well Congrats.
But if I were you, I would take my chips and go. The other side of this Mega-Bubble is not likely to be pretty. There will be little if anything to retain business, and the only thing that'll remain is outrageously overpriced vanity businesses -- which will dissipate your winnings far faster than somewhere boring, but less expensive. And they sure as hell ain't going to reflate the Bend RE souffle.
This place is utterly doomed. We've got mind-boggling incompetence in local government, the primary economic engine of the local economy collapsing, the collateral damage of RE inflation slaughtering almost everything else, local media that has no compunction about lying for the sole purpose of frisking every last nickel from locals or immigrants for the benefit of an elite few. All these parties seem bent on absolutely destroying this place.
And that's what has got Paul-doh a little depressed this week. Stock market falling apart, local builders going wholesale with imploding subdiv's, Timmy posting an ever increasing tide of preforeclosure announcements, BendBB posting listing price cuts that are truly stupefying (look at those bad boys! The single digit percent cut is becoming a rarity..), Secretary Paulson stating flat out that housing presents the biggest challenge to the US economy, and a host of other events that you'd think would make a Bearish Bubble Prognosticator positively giddy.
But no. Because I'm starting to get a glimpse of the other side. The Ultimate Product of this Experience can be summed up in 2 words: Human Misery. People getting fired, people losing their homes, peoples hopes & dreams going up in smoke. And for every Becky Breeze or Aaron Lafky whose Super Project ends in a quiet demise, at least 100 "normals", just ordinary people doing ordinary jobs, will also succumb to the Bend Mega Bubble.
And all the "validation" in the World about being dead ass right, will really never compensate for how shitty that makes me feel.
Starting locally, you can see the deleterious effects overblown housing prices are having on industry. After engaging in what are almost certainly under-the-table dealings with Columbia Air higher-ups, Cessna stated that it would keep a dramatically scaled down Columbia in Bend, only if it's rent was cut in half.
Although they probably will at some point, Cessna doesn't really address any other cost as a contingent reason for keeping Columbia, other than real estate costs. The real estate costs aren't just some small, insignificant side issue here: It's the primary driver of Cessna's decision. Columbia is just the tip of the iceberg.
Industry is evacuating Bend like there's an Ebola epidemic here. And many companies, Cessna included, probably are thinking that price per sq ft on their rented space is their primary real estate cost driver, and it's really not. The high cost of residential homes is indirectly borne by every company here. How do you think rents & mortgages get paid?
That $1 million per week in operating losses quoted by Columbia officials is going to pay for, among many other things, employees & their real estate needs. In fact real estate costs are among the highest costs for local working Bendites (some of the highest in the U.S.), and therefore one of the highest costs for local businesses.
I've said this till I'm blue in the face, but the inflation caused by high home (and commercial RE) prices is pervasive; it'll invade everywhere. Columbia Air, Bend Tarp & Liner, Oregon Woodworking, and Seaswirl are just the tip of the iceberg. These companies are either folding or moving almost entirely due to real estate costs & it's after effects.
Companies are UNABLE to hire employees here. Why? Because no one can live here on peanuts anymore. "Poverty with a view" used to be doable here. You could live dead simple, go agrarian, or even as BendBust has suggested, go into "hunter/gatherer" mode to make ends meet. "Poverty with a view" just is impossible nowadays... maybe in Burns, but not here.
So what companies are really faced with is this: Can I make the mortgage payments on the typical Bend home, plus all the other necessities of life for each of my employees to produce the goods/services my company makes at a competitive price? And the answer is becoming an overwhelming "No".
The economics of staying & working in Bend is fast becoming an untenable proposition for thousands of people, because it is completely impossible for the companies located here. I think I read that the typical Bend family needs to make something like $25/hr for each working adult to survive here. 98% of all Bend companies cannot pay a wage anywhere close to that. Somethings gotta give.
The shrill din of bearishness recently has become almost unbearable. We're almost certainly in a recession, and it is almost certainly due primarily to deflating home prices. Some people wonder why I would even have to affirm such an obvious fact... but read some of the comments, there are still a decent sized contingent of True Believers. So we are being pushed into recession because ALL home prices are declining (not just subprime), and homes are the primary "container" of wealth in this country.
And the U.S. home market has experienced a faint shadow of what Bend has gone through in the past 5 years. We literally hit the Housing Bubble Lottery Jackpot. Probably not a single other town in the U.S. that has done as well as Bend. Probably less that 1 in a 1,000 that have done as well as Bend in the past 20 years; we went from half the national median to almost double at the dead white-hot top last year.
So what happens here? Everyone else is worried about a nasty recession due to an appreciation slump that should make the average Bendite laugh. I don't think people will be laughing long. The contagion of RE inflation will reach into every nook & cranny in our local economy, even more so than it has already. Combine that with a complete cessation of lending on what has essentially been a proxy for Americans income: their housing ATM.
And the bearishness became almost intolerable. Look at last weeks comment count: Over 300 comments, many of the grave-dancing variety. Some really severe beating on those who have used local rags as their own PR/Marketing tabloids for spreading rampant misinformation. The local media & the local RE machine are complicit in pumping the Bend Dream to levels that are simply unsustainable. And this blog has take more than it's share a swipes at them for it, and most deservedly so. In fact, I consider the uncovering of blatant lies by local media as being one of the primary goals of this blog.
So Phase I, "The Recognition of The Bubble & All It's Terrible Consequences" seems to be happening, and with some decidedly furious intensity in the past week. And I'll admit that on a personal level, I get a bit of "validation satisfaction" from that. But then I start thinking about what's really on the other side of this thing. And not just from a selfish perspective of, "Hey, it'll be great! I'll finally be able to afford to buy that house I've always wanted at a rock-bottom price! Cool!". But from a real all-inclusive viewpoint: From that perspective, I'm actually pretty sure I WON'T be able to buy that house I've always wanted to because of the vicious after-effects of what the RE inflation has wrought; a completely destroyed industrial sector and a gutted business base.
There won't be anything here for me (and many, MANY others) when housing gets to very attractive levels. If you can buy for ALL CASH and have a reliable income stream that is 100% independent of the local economy, then you will be one of the rare individuals who will be able to capitalize on the Implosion of Bend. There is the occasional commenter who seems to intimate that they have a steady local job at attractive wages, plenty of savings, and a cash cushion, and are therefore pretty much immune to a local downturn. But I really start to wonder how secure ANY job is around here. I know people who moved to Bend to work at Columbia, and until recently fit this bill to a T. But they are now fully aware that they may lose their job and have to relocate. And they also know they are underwater on their home by $100K, which is where a lot of their "savings" was. They're not broke... but they are in a definite crunch, because they MUST sell their home in order to keep their income stream alive.
If the rest of the country goes into recession, Bend will almost certainly experience something akin to a depression. Even Bill Valentine said that since Bend went up 50% more than the rest of the country (only 50%?), it'll experience a commensurate decline. And the collapse of Bend, while late in coming, has begun. And we are starting to see it manifest itself in a number of ways.
First, Becky Breeze, a much maligned target for RE fibbery, has not sold nearly the unit volume at The Plaza that she claims. Whether it's "most", "about 25%", or whatever she is claiming now, it seems that only 2-3 Plaza condos have sold. Why would she lie? And lie about information that is publicly available? I know she was long schooled at the Community College of Creating Perceived Shortages, as were most area Realtors, but I wonder if she (and others) have to make such claims to assuage the fears of those they are indebted to.
Becky & Tom seem to be in a World of hurt with The Plaza. It is just a terribly conceived idea. It's the sort of thing that could only work in a real urban center, where there truly exist intractable land shortages. And at the time they were in the planning stages, I'm sure it seemed like Bends "land shortage" would only become more acute. So they went forward, completely oblivious to the fact that high land prices "produced" land out of thin air, all over Bend. Subdividing pretty much became the only game in town at the tail end of the Bend Bubble.
But peruse craigslist, or the Bulletin and you will find we are AWASH IN LAND. It's everywhere (One of the main "suppliers" is chameleon "Destination Resorts".) One of the "unintended side effects" of RE inflation; where once there was none, there is a tsunami. Every inch of Measure 37 approved scrub, is getting chopped into innumerable lots. Becky's wonderful concept both made possible AND destroyed by the RE Bubble. And have no illusions, this same fate awaits virtually EVERY SINGLE LARGE RE PROJECT IN CENTRAL OREGON. Lafky's Mercato? Dead. Redmond Water Park? Dead. Yarrow? Dead. IronHorse? Dead. Remington Ranch? Dead. These, all the other chameleon subdiv's, along with Breeze's Plaza will stand as a near permanent testament to the lunacy of the past 3-4 years. For the want of just a few short years of hyper-speculation, this town will be lost.
A commenter from many moons back said they saw a plaque on Arnie Swarens (long-time Sisters Realtor) desk that said something along the lines of, "God, give me the knowledge to not waste the next real estate bubble". Well, it's over. If you've still got skin in the game, you've overstayed and will probably lose everything you made, if not more. If you're out, well Congrats.
But if I were you, I would take my chips and go. The other side of this Mega-Bubble is not likely to be pretty. There will be little if anything to retain business, and the only thing that'll remain is outrageously overpriced vanity businesses -- which will dissipate your winnings far faster than somewhere boring, but less expensive. And they sure as hell ain't going to reflate the Bend RE souffle.
This place is utterly doomed. We've got mind-boggling incompetence in local government, the primary economic engine of the local economy collapsing, the collateral damage of RE inflation slaughtering almost everything else, local media that has no compunction about lying for the sole purpose of frisking every last nickel from locals or immigrants for the benefit of an elite few. All these parties seem bent on absolutely destroying this place.
And that's what has got Paul-doh a little depressed this week. Stock market falling apart, local builders going wholesale with imploding subdiv's, Timmy posting an ever increasing tide of preforeclosure announcements, BendBB posting listing price cuts that are truly stupefying (look at those bad boys! The single digit percent cut is becoming a rarity..), Secretary Paulson stating flat out that housing presents the biggest challenge to the US economy, and a host of other events that you'd think would make a Bearish Bubble Prognosticator positively giddy.
But no. Because I'm starting to get a glimpse of the other side. The Ultimate Product of this Experience can be summed up in 2 words: Human Misery. People getting fired, people losing their homes, peoples hopes & dreams going up in smoke. And for every Becky Breeze or Aaron Lafky whose Super Project ends in a quiet demise, at least 100 "normals", just ordinary people doing ordinary jobs, will also succumb to the Bend Mega Bubble.
And all the "validation" in the World about being dead ass right, will really never compensate for how shitty that makes me feel.
Monday, October 15, 2007
Juniper Ridge: How Bend City Council will turn $15 billion into Bankruptcy
Lordy, is there anything the Simpsons can't teach us?
Homer: Well, what do you think?
Editor: This is a joke, right? I mean this is the stupidest thing I've ever read!
Homer: What's wrong with it?
Editor: You keep using words like "Pasghetti" and "Momatoes" You make numerous threatening references to the UN and at the end you repeat the words "Screw Flanders" over and over again.
Welp, looks like we've reached The Homer-Food Critic Moment: That point in time where BendBust's almost incomprehensible rants start to have a quite disturbing foreshadowing of what comes to pass. Many, including me, BEM, Duncan (especially Duncan), and Timmy (but especially Timmy) have borne the brunt of BilboBusters "Screw Flanders" tirades. And Juniper Ridge, Ray Kuratek, condo developers in general, and many, MANY others have acted as the quasi-relevant "Pasghetti" and "Momatoes". But BendBust, after a rusty, expletive-laden start (and middle), is starting to get his props from those he might bust in the scrote:
BendBust: Why is it that of ALL the cunts on the blog board, not a fucking one will read the M49 text but timmy?
Timmy: Finally, something almost less than disdain. I grovel.
Duncan: Bendbust is like Columbus, he may have found the wrong continent, but he found something interesting anyway...
...I went to Brooks Resources website, and Bendbust may be more on to something that I thought.
Thing about bendbust, everytime you think he's exaggerating, come to find out he not far off the mark.
Sure, there is still the odd "Screw Flanders" tirade against those who would defend him:
Buster: BEM,
I don't know who is MORE intellectually lazy YOU or HBM.
BEM: Fuck man! Gimme a break!
(BEM probably experiencing cruel sense of irony: As I bear BilboBust as frothing at the mouth raving lunatic in this blog... so did he bear me. Possibly Cats In The Cradle music is appropriate here...)
Paul-doh say long time ago young Grasshoppers:
And if you've been casually skimming this blog for any period, you've noticed that one of Bilbo's favorite topics is the lambasting of Juniper Ridge. He even made a post request:
IHTBYB - You really should do a cover blog for next sunday on JR, things are really starting to hit the fan.
I'll admit, my first reaction to this was a Big Yawn. Sort of like the whole Broken Top drama: really doesn't seem to involve me, and I'm not really sure of the relevance. But Buster seems adamant about its importance, and that crazy bastard does seem to have insights buried in the nooks & crannies of his Screw Flanders tirades, so I looked into it. There are two main sources that I looked at:
DoJuniperRidgeRight.com
Who's behind Juniper Ridge and why you need to know
I could have written an EXTRAORDINARILY long, detailed, and QUITE UNFLATTERING post on this topic. But I would simply be repeating much of what is in these 2 documents. Buster alleges that BEM himself wrote the Bend Living piece, something I have no proof of. But it extremely well-written by someone who knows what the hell is going on, so draw your own conclusions. Here is a short Paul-doh summary, for what it's worth:
Juniper Ridge is 1,500ac run of scrub that passed from the Federales to Deschutes county in a land swap back in the day, and then from the county to the City of Bend:
In November 1990 the county transferred the land to the City for $1.00. The transfer stipulated that “a master development plan be formulated” and the “plan be adopted by the City pursuant to an open public process and public hearings and that the plan address the needs of the city and the concerns of the public”.
After the requisite years of wanking off, Bend City butt-munkees.. err, Councilors, decided to include 500ac in the Bend Urban Area:
Following land use law and procedures, the state in 2004 allowed 504 acres to be included in the Bend Urban Area, specifically due to the need for industrial land, and the city then annexed it in 2005. The state indicated it should be a sufficient industrial supply for 20 years.
Remember these 2 things: The land was "given" to the City almost COMPLETELY for industrial use, and maybe other mixed development use. THAT'S ALL. It is also STATE LAW that the city provide for 20 YEARS supply of industrial land, something we have been in egregious violation of a long time. Juniper Ridge is meant to solve THIS PROBLEM.
From BendLiving:
On May 13, 2005, the City issued developers a so-called “Request for Qualifications,” or RFQ, for Phase I of Juniper Ridge. This RFQ “solicited qualifications from development teams to develop approximately 504 acres of land to become the Juniper Ridge Technology and Research Park.”
Bend City Council asked for ideas regarding the development of the intial 500ac, (Phase I) THAT'S ALL. There were multiple RFQ's for a 500ac development plan, but one set of K-mart, light blue leisure suit Larry's swept Bend City Council off their feet: Ray Kuratek & Jeff Holzman, after hitching up from the Bay where they whiled away the days jerking Templeton Funds around on a 39ac campus, formed Juniper Ridge Partners for the sole purpose of bidding on the Juniper Ridge development. But Holz-tek pulled a quick one as is their wont to do, being Shameless Hucksters:
There is probably more, but it's almost too much to bear. Typing each bullet point does to me what an inappropriate apostrophe or spelling error does to Timmy: it whipe's 24 ou-wer's auff mi life'sporn.
Holz-tek are shamless hucksters. It is in their nature to frisk their marks for every nickel. But it's Bend City Butt-bangers responsiblity to SAFE GUARD the City's resources. I DO NOT BLAME HOLZ-TEK: that's like blaming a shark for ripping a carcass to pieces, it's the nature of the beast. But when they approached the City and proposed what may well be an ILLEGAL development plan for JR, it was Bend City ButtBangers obligation to do the following:
It's called NEGOTIATION. OK, "they" propose something Out-fucking-rageous, and "you" burn their greedy asses at the stake. OK, that's how it SHOULD GO. But when Holz-Tek met Bend City Dumbshits, they knew they'd hit PAY DIRT, cuz this is what they found:
They found a whole slew of incompetents, that simply boggle the mind. EVERY SINGLE LOONEY-ASS proposal they puked forth was ACCEPTED WHOLE MOTHERFUCKIN' HOG.
Q: "20% guaranteed for AIG?"
A: YES
Q: "50/50 split"
A: YES
Q: We can completely change EVERY SINGLE REQUIREMENT of JR, including parts that would make it BORDERLINE ILLEGAL?
A: YES
Q: We get millions for doing NOTHING?
A: YES
Q: You will go into the horribly risk-laden development business in league with K-mart leisure-suit Larry's, and NOT HUGE well-established developers like Trammel Crow, despite the fact you dumbshits can't fix a fuckin' toilet?
A: YES
My God, it just goes on and on. Seriously, I get an uncontrollable eye-twitch when I think about it. You think it's an isolated incident? FUCK NO! There is seemingly NOTHING that goes before the City Council where they do not just flout their fiduciary duties, THEY ACTIVELY SEEK TO VIOLATE THEM. From todays Bulletin:
Downtown Bend lot will get an overhaul
As a result of a last-minute switch in the terms of the city’s request for proposals, officials can judge the projects without having to favor the project with the higher sale price to the city.
In August, just one day before proposals for redeveloping the land at Greenwood and Wall were initially due, the council, acting as BURA, decided to suspend the process to change the factors that would be used to select a project.
"Flaky"? You think this sounds "flaky"? That's like calling Hitlers genocide of the Jews, "flaky". It seems borderline criminal. They've essentially WIPED OUT any possible evaluation of these 2 proposals based on merit, and made the process 100% CAPRICIOUS. 100% at their whim. Kuratek said dealing with City Council is like dealing with The Ultimate Old Boy Network... he got that shit right.
Seriously, if I type much more about this, I will get some sort of spontaneous TUMOR. But I will just shortly write what we should do with JR:
SELL IT
Right, just sell the fucker. With the current City Council we are doomed the destroy the town. Like the French, whatever it is they WANT to do, we should do EXACTLY THE OPPOSITE, because I don't know much, but I do know that WHATEVER the hell they DO want is counter to the interests of this town. There is talk that we could sell JR lock, stock & barrel for $65 million. We should do that, and then try to extract a 20% 30 YEAR GUARANTEED RETURN from AIG. That would parlay our $65 million to a scant $15,429,461,000 in 30 years. Yeah, 15 BILLS. I know, it's a little disingenuous to even THINK that any fuckin' lunatic in their right mind would PROMISE 20%... except the City of Bend. We actually ARE.
Here it is:
It's OUR land.
Most of the money is OURS
And Bend City Morons have essentially given Holz-tek the opportunity to STEAL 75% of JR.
STEP 1) 2 K-mart light blue polyester leisure suits
STEP 2) Smoke and mirrors magic show where rabbit is pulled out of hat
STEP 3) Secure Master development rights
STEP 4) Insert digits into Jim Clinton blowup doll
STEP 5) Sell 300ac of JR for residential development, in 100% VIOLATION OF STATE LAW
STEP 6) Repay AIG with proceeds, before the ink is barely dry on their $30MM deposit slip
STEP 7) Exploit 100% of the remainder of JR for the next 1,000,000 years
This is ACTUALLY WHAT IS HAPPENING. We are actually just going to GIVE AWAY Juniper Ridge. It's un-fuckin-believable. We could sell it for $65 mill, but instead we're going to just give it away, in almost certain violation of the law. Holz-tek have RE-WRITTEN the zoning proportions for THEIR SOLE BENEFIT. They WILL sell off just enough to pay off their Money Guy, and at that point, they & AIG will control virtually everything that happens at JR, and Bend & it's taxpayers are SCREWED. Seriously, it's unbelievable. We will literally turn a 8-9 figure financial bonanza into NOTHING.
And there's the idiotic protest: "If we just sell JR, we'll have no control over what happens there! Oh no!"
What? WHAT? WHAT?
What the fuck does this mean? We'll have 100% control over what happens, just like we do over every single other development. You just zone the motherfucker for whatever you want. Like this city has done a billion times before. Zone the fuckin thing for whatever you want, and then SELL IT. If you get some lunatic like Kuratek who builds a Dairy Queen in a residential zoned area, you blow it up. If Holzman builds a koi pond in a light industrial zone, you drain it & EAT THE KOI.
OK, Bend City Dumbbutts have proved OVER & OVER, that they have LESS THAN ZERO qualifications for ANYTHING, much less going into league with a couple of flim-flam men. Zone JR, sell it, and FIRE EVERY FUCKIN' BEND CITY COUNCILOR. Reminds me of "Blazing Saddle"... This is Bend City Buttfucks answer to ever flim-flam asshole that stumbles into town:
David, for probably good reason, seems to have changed his tone from one of slightly masked pessimism, to one of "it's not so bad". That's OK, he's a Realtor, and frankly he was quite alone in his frank discussions of the downside. But go beyond the "surface" of whether you agree with him or not, and you get the idea that he's hurtin'. That the state of the RE business in Bend is pretty gat-damned dire. That it is starting to impact the livelihood of MANY people in the business to the extent that they will change their tune & try to "talk it up".
Now, I still respect David & his opinion, he's been a pretty straight shooter when the DuBois' & Breezes' of the World have not just been shading the truth, but deliberately misleading people, from my perspective. But I think he's shifting a little towards "puffing" this thing back up, in some measure to restore some sort of faith in this thing. He has some quotes in his recent piece:
"The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000." Business Week, 1969
"The median price of a home today is approaching $50,000 ... housing experts predict price rises in the future won't be that great." National Business, 1977
"The golden age of risk-free run-ups in home prices is gone." Money Magazine, 1985
"A home is where the bad investment is." San Francisco Examiner, 1996
Now these look like pretty good homilies supporting buying a house for the long-term, given that prices are almost ludicrously higher today. But remember 2 things: There is PREDICTION of the future, and rehashing the past. Virtually ALL newspaper pieces simply review recent holding period returns, and then extrapolate these, and write some sort of "predictive" piece that is invariably wrong. That's what these are. Half-wit reporters writing pieces about holding period returns on housing that were kind of crappy at the time they wrote them. They actually are probably better as timing vehicles for a short-term bounce than anything.
Second, we are AT OR NEAR the top of the largest RE bubble ever experienced by THIS PLANET. NO MATTER WHERE OR HOW you look back, you will find prices from more than 10 years ago as almost ridiculously low compared to today. Just look at the NASDAQ right after the peak, maybe around 4,500: There is a GREAT CASE to be made that the NASDAQ at 4,500, while off a bit, is still one of the GREATEST INVESTMENTS IN MODERN TIMES.
We all know what happened next. We are at "NASDAQ 4,500" in the bursting of the biggest RE bubble ever. 10% off the top, but still there can be made very convincing arguments that RE is still a HUGE long-term winner. This is simple holding period return extrapolation, much like David's quotes. There is NO prediction in them. They are "predicting" the recent past... not the future.
Finally, Brooks Resources has decided to "auction" some townhomes at Mt Bachelor Village. Seems Uncle Flippers, the prime target of selling these shitholes, has up & died. I have to quote the word "auction" here, because my own experience of this town and it's Boss Hogg insiders leads me to believe this is Yet Another PR/Marketing Bullshit Bonanza from a graduate of the Creating Perceived Demand Where None Exists Community College, apparently where Hollern graduated.
Now Timmy, I think, thinks this is a Sign Of The Times and is indicative of one of the Big Boys doing Major Signaling that The End is Nigh. And I agree to some extent. They WOULD NOT do an auction unless there was a strong impetus to do so. But I also believe that "Auction" was Phase I of the plan. Phase II involved massive widespread PR/Marketing using The Bulletin as their bitch (check that one off as COMPLETE), then plant Friends of Brooks in the "bidding pool" to ensure a GUARANTEED SUCCESS. I don't think the higher ups at Brooks could resist.
This auction is a 100% FRAUD AND A FAKE. There is an iron-clad fallback that involves the oldest trick in the eBay book: Self dealing. These condos WILL SELL. They would NEVER do something like this & let it fail. It'd be SUICIDE for ALL OTHER BROOKS DEVELOPMENTS. There are VERY HIGH price reserves on all these units, so this is nothing more than a modest price reduction, with a ticker tape PR parade in tow. Congrats Brooks, you've turned a price reduction "mole-hill" into a PR Mountain.
If Brooks OR ANYONE were to EVER hold a 100% authentic, no self-dealing, no price res, open, public auction, the absolute WORST SCENARIO POSSIBLE would be unveiled: That market clearing prices for Bend homes are dizzyingly far below where we are now, probably 30% down from here. There is ZERO INCENTIVE to probe the true depths of how bad the current Bend market is. But evidence is all around us.
Remember "Eagles Landing"? The little subdiv with approximately 98% of all it's lots unsold, depicted in "Picto-Plummet"? Well, they lowered intial prices from $425K.... to $350K... to $299K. And how many lots sold as a result of this 30% reduction?
ZERO
Nothing has been built or even started at Eagles Landing despite the implosion of prices that have cratered 30% over the Summer & Fall. There is literally almost no way to lower your prices enough to truly understand just how depressed demand really is. People who are buying now are very, VERY few in number, and they literally have "no choice". NOBODY, given the choice, would buy now. Conversely, NO ONE who is attempting & listing their house RIGHT NOW, has ANY CHOICE. Do you know ANYONE who would VOLUNTARILY try to sell a home in Bend today? No! No one would.
In that vein, Brooks is HARD UP to sell its townhomes. ANYONE trying to sell RE around here, who needs to do it to pay off liabilities is probably looking at the Big BK. THAT is what's changing. Timmy, I think, is one person who is starting to get the smackdown that Paul-doh been laying down lo these many months:
The more I read this blog, the more I worry about my gameplan. (And I AM here to learn, not for the pure entertainment value, of which there is much.) I've been expecting mass bank takeovers of properties in Bend. Price declines to 2003, or even earlier levels. I'm prepared for Plan B in that DOESN'T happen. (Go to a part of the country where my down payment here buys a whole house there.) But am I prepared for the true ramifications of Plan A? If Bend crashes hard and I get what I thought I wanted, am I just living it up in a sweet house in a decimated crime-ridden, depressing hellhole of a town?
There isn't going to be this sort of Ceterus Paribus Decline, where all else stays equal and home prices just go into an orderly decline. Prices will go down FOR GOOD REASON. If we see $175K medians.. do you think all the recent affluence & wealth & prospering local economics will be unaffected? Or EVEN CLOSE? It'll be drugs, crime, and a bunch of gypsy's barely scrapping by. It'll be mass exodus. It'll be big swaths of GHOST TOWN SUBDIVS.
It really is scary what's going on here. A City Government that is literally a bunch of moronic criminals. Their answer to an angered citizenry regarding their own graft, self-dealing, and incompetence is MORE PR & MARKETING & CLOSE THE FUCKIN' DOORS. They are literally THROWING AWAY our tax dollars. No, that's not true. If they were just throwing dollars away, we'd probably be OK. They are actually legally encumbering this town in illegal contracts, where we literally receive NOTHING except GUARANTEED BANKRUPTCY & the other side gets HUNDREDS OF MILLIONS. It's unbelievable (Sorry, I can't stop saying that, cuz I can't stop thinking it).
I have literally resigned myself to exasperated apathy. How can I give a SHIT about this place when it's leaders don't just NOT GIVE A SHIT, they seem to actively WANT TO DESTROY IT? It's like the US itself: What the hell are we doing, taking one of the greatest stores of wealth the World has ever known (U.S. business tax base), and squandering it in a pointless "War"? I do not get it. Bend has an almost unbelievable resource in JR, it's property tax base, and other revenue sources, and we literally would be better off setting this money on fire than doing what City Council is doing.
Timmy is dead right. Bend is the next "Zimbabwe". Zimbabwe leaders took one of the most prosperous African countries 20 years ago, and literally destroyed it economically. Remember that next time someone tries to sell you the Bend Is Surrounded By Natural Wonders BULLSHIT, about how people will never leave & the hordes will always keep coming here. What a load of shit. Places of Natural Beauty being run into the ground is The Rule in this World, not the exception. Bend IS beautiful, as BEM notes, but so are a LOT of other places. People WILL LEAVE BEND IF IT IS ZIMBABWE'd. If every economic resource is 100% SQUANDERED, as it is now, you literally will not recognize Bend a decade hence. Ohhh, we'll have our $175K medians. We'll also have 50% vacancy downtown, 20% unemployment, vast ghost towns, busted windows, meth shacks on every corner, and God knows what else.
If you give a flying fuck about Bend, well then you go to the JR meeting Monday. I WILL NOT be in attendance attendance. Why should I? Per our glorious Mayor:
The Bend City Council is considering a number of other things this week.
Homer: Well, what do you think?
Editor: This is a joke, right? I mean this is the stupidest thing I've ever read!
Homer: What's wrong with it?
Editor: You keep using words like "Pasghetti" and "Momatoes" You make numerous threatening references to the UN and at the end you repeat the words "Screw Flanders" over and over again.
Welp, looks like we've reached The Homer-Food Critic Moment: That point in time where BendBust's almost incomprehensible rants start to have a quite disturbing foreshadowing of what comes to pass. Many, including me, BEM, Duncan (especially Duncan), and Timmy (but especially Timmy) have borne the brunt of BilboBusters "Screw Flanders" tirades. And Juniper Ridge, Ray Kuratek, condo developers in general, and many, MANY others have acted as the quasi-relevant "Pasghetti" and "Momatoes". But BendBust, after a rusty, expletive-laden start (and middle), is starting to get his props from those he might bust in the scrote:
BendBust: Why is it that of ALL the cunts on the blog board, not a fucking one will read the M49 text but timmy?
Timmy: Finally, something almost less than disdain. I grovel.
Duncan: Bendbust is like Columbus, he may have found the wrong continent, but he found something interesting anyway...
...I went to Brooks Resources website, and Bendbust may be more on to something that I thought.
Thing about bendbust, everytime you think he's exaggerating, come to find out he not far off the mark.
Sure, there is still the odd "Screw Flanders" tirade against those who would defend him:
Buster: BEM,
I don't know who is MORE intellectually lazy YOU or HBM.
BEM: Fuck man! Gimme a break!
(BEM probably experiencing cruel sense of irony: As I bear BilboBust as frothing at the mouth raving lunatic in this blog... so did he bear me. Possibly Cats In The Cradle music is appropriate here...)
Paul-doh say long time ago young Grasshoppers:
'Twat sounds like ranting
Nothing spewed but Screw Flanders
Shows glimmer of truth
Nothing spewed but Screw Flanders
Shows glimmer of truth
And if you've been casually skimming this blog for any period, you've noticed that one of Bilbo's favorite topics is the lambasting of Juniper Ridge. He even made a post request:
IHTBYB - You really should do a cover blog for next sunday on JR, things are really starting to hit the fan.
I'll admit, my first reaction to this was a Big Yawn. Sort of like the whole Broken Top drama: really doesn't seem to involve me, and I'm not really sure of the relevance. But Buster seems adamant about its importance, and that crazy bastard does seem to have insights buried in the nooks & crannies of his Screw Flanders tirades, so I looked into it. There are two main sources that I looked at:
DoJuniperRidgeRight.com
Who's behind Juniper Ridge and why you need to know
I could have written an EXTRAORDINARILY long, detailed, and QUITE UNFLATTERING post on this topic. But I would simply be repeating much of what is in these 2 documents. Buster alleges that BEM himself wrote the Bend Living piece, something I have no proof of. But it extremely well-written by someone who knows what the hell is going on, so draw your own conclusions. Here is a short Paul-doh summary, for what it's worth:
Juniper Ridge is 1,500ac run of scrub that passed from the Federales to Deschutes county in a land swap back in the day, and then from the county to the City of Bend:
In November 1990 the county transferred the land to the City for $1.00. The transfer stipulated that “a master development plan be formulated” and the “plan be adopted by the City pursuant to an open public process and public hearings and that the plan address the needs of the city and the concerns of the public”.
After the requisite years of wanking off, Bend City butt-munkees.. err, Councilors, decided to include 500ac in the Bend Urban Area:
Following land use law and procedures, the state in 2004 allowed 504 acres to be included in the Bend Urban Area, specifically due to the need for industrial land, and the city then annexed it in 2005. The state indicated it should be a sufficient industrial supply for 20 years.
Remember these 2 things: The land was "given" to the City almost COMPLETELY for industrial use, and maybe other mixed development use. THAT'S ALL. It is also STATE LAW that the city provide for 20 YEARS supply of industrial land, something we have been in egregious violation of a long time. Juniper Ridge is meant to solve THIS PROBLEM.
From BendLiving:
On May 13, 2005, the City issued developers a so-called “Request for Qualifications,” or RFQ, for Phase I of Juniper Ridge. This RFQ “solicited qualifications from development teams to develop approximately 504 acres of land to become the Juniper Ridge Technology and Research Park.”
Bend City Council asked for ideas regarding the development of the intial 500ac, (Phase I) THAT'S ALL. There were multiple RFQ's for a 500ac development plan, but one set of K-mart, light blue leisure suit Larry's swept Bend City Council off their feet: Ray Kuratek & Jeff Holzman, after hitching up from the Bay where they whiled away the days jerking Templeton Funds around on a 39ac campus, formed Juniper Ridge Partners for the sole purpose of bidding on the Juniper Ridge development. But Holz-tek pulled a quick one as is their wont to do, being Shameless Hucksters:
- They proposed the development of ALL 1,500ac
- They wildly changed the distribution of zoning planned for JR
- They secured a $2.5MM golden parachute for themselves to pay "salaries & expenses" if they were ever to be fired
- They receive $60,000/mo compensation
- They secured a promise of 20% GUARANTEED RETURN for their financial partner, AIG, on their $30MM investment
- They HAMSTRUNG every other proposal when Bend City Dumbshits all of a sudden acted like their 500ac proposals were no longer appropriate
- They convinced the City to go into the Development Business, and go into league with them to share (nope, "share" isn't the word... it's "bear") ALL the risks of developing JR, but ONLY get their "FAIR SHARE" of the profits after the other side is repaid IN FULL
- They (initially) convince Bend City Dumbfucks that despite the fact that the city would provide 100% of the land (the PRIMARY ASSET in this heist) and $40MM in infrastructure improvements as compared to JRP & Co's $30MM, that they would split profits 50/50. This was later slapped down as simply an INTOLERABLE RIPOFF.
There is probably more, but it's almost too much to bear. Typing each bullet point does to me what an inappropriate apostrophe or spelling error does to Timmy: it whipe's 24 ou-wer's auff mi life'sporn.
Holz-tek are shamless hucksters. It is in their nature to frisk their marks for every nickel. But it's Bend City Butt-bangers responsiblity to SAFE GUARD the City's resources. I DO NOT BLAME HOLZ-TEK: that's like blaming a shark for ripping a carcass to pieces, it's the nature of the beast. But when they approached the City and proposed what may well be an ILLEGAL development plan for JR, it was Bend City ButtBangers obligation to do the following:
It's called NEGOTIATION. OK, "they" propose something Out-fucking-rageous, and "you" burn their greedy asses at the stake. OK, that's how it SHOULD GO. But when Holz-Tek met Bend City Dumbshits, they knew they'd hit PAY DIRT, cuz this is what they found:
They found a whole slew of incompetents, that simply boggle the mind. EVERY SINGLE LOONEY-ASS proposal they puked forth was ACCEPTED WHOLE MOTHERFUCKIN' HOG.
Q: "20% guaranteed for AIG?"
A: YES
Q: "50/50 split"
A: YES
Q: We can completely change EVERY SINGLE REQUIREMENT of JR, including parts that would make it BORDERLINE ILLEGAL?
A: YES
Q: We get millions for doing NOTHING?
A: YES
Q: You will go into the horribly risk-laden development business in league with K-mart leisure-suit Larry's, and NOT HUGE well-established developers like Trammel Crow, despite the fact you dumbshits can't fix a fuckin' toilet?
A: YES
My God, it just goes on and on. Seriously, I get an uncontrollable eye-twitch when I think about it. You think it's an isolated incident? FUCK NO! There is seemingly NOTHING that goes before the City Council where they do not just flout their fiduciary duties, THEY ACTIVELY SEEK TO VIOLATE THEM. From todays Bulletin:
Downtown Bend lot will get an overhaul
As a result of a last-minute switch in the terms of the city’s request for proposals, officials can judge the projects without having to favor the project with the higher sale price to the city.
In August, just one day before proposals for redeveloping the land at Greenwood and Wall were initially due, the council, acting as BURA, decided to suspend the process to change the factors that would be used to select a project.
Initially, half of a project’s score was to have gone toward the price that developers offered the city for the land. Thirty percent would have gone toward the design concept and 20 percent of the score would have been for the qualifications and experience of the developers.
But at the last minute, councilors decided they would rather have more flexibility in scoring the proposals, so they pulled the plug on the process, returned the proposals unopened to the developers and launched a new process, with proposals due in the middle of September. In the second round, the three categories remained, but there was no scoring percentage or weight attached to any of them.
All but one member of BURA, Councilor Mark Capell, voted in favor of the change.
“We just seem to be doing a number of embarrassing things,” Capell said at the Aug. 15 meeting. “If we keep looking flaky, and I hate to keep using that word, (the city’s credibility) is never going to get better.”"Flaky"? You think this sounds "flaky"? That's like calling Hitlers genocide of the Jews, "flaky". It seems borderline criminal. They've essentially WIPED OUT any possible evaluation of these 2 proposals based on merit, and made the process 100% CAPRICIOUS. 100% at their whim. Kuratek said dealing with City Council is like dealing with The Ultimate Old Boy Network... he got that shit right.
Seriously, if I type much more about this, I will get some sort of spontaneous TUMOR. But I will just shortly write what we should do with JR:
SELL IT
Right, just sell the fucker. With the current City Council we are doomed the destroy the town. Like the French, whatever it is they WANT to do, we should do EXACTLY THE OPPOSITE, because I don't know much, but I do know that WHATEVER the hell they DO want is counter to the interests of this town. There is talk that we could sell JR lock, stock & barrel for $65 million. We should do that, and then try to extract a 20% 30 YEAR GUARANTEED RETURN from AIG. That would parlay our $65 million to a scant $15,429,461,000 in 30 years. Yeah, 15 BILLS. I know, it's a little disingenuous to even THINK that any fuckin' lunatic in their right mind would PROMISE 20%... except the City of Bend. We actually ARE.
Here it is:
It's OUR land.
Most of the money is OURS
And Bend City Morons have essentially given Holz-tek the opportunity to STEAL 75% of JR.
STEP 1) 2 K-mart light blue polyester leisure suits
STEP 2) Smoke and mirrors magic show where rabbit is pulled out of hat
STEP 3) Secure Master development rights
STEP 4) Insert digits into Jim Clinton blowup doll
STEP 5) Sell 300ac of JR for residential development, in 100% VIOLATION OF STATE LAW
STEP 6) Repay AIG with proceeds, before the ink is barely dry on their $30MM deposit slip
STEP 7) Exploit 100% of the remainder of JR for the next 1,000,000 years
This is ACTUALLY WHAT IS HAPPENING. We are actually just going to GIVE AWAY Juniper Ridge. It's un-fuckin-believable. We could sell it for $65 mill, but instead we're going to just give it away, in almost certain violation of the law. Holz-tek have RE-WRITTEN the zoning proportions for THEIR SOLE BENEFIT. They WILL sell off just enough to pay off their Money Guy, and at that point, they & AIG will control virtually everything that happens at JR, and Bend & it's taxpayers are SCREWED. Seriously, it's unbelievable. We will literally turn a 8-9 figure financial bonanza into NOTHING.
And there's the idiotic protest: "If we just sell JR, we'll have no control over what happens there! Oh no!"
What? WHAT? WHAT?
What the fuck does this mean? We'll have 100% control over what happens, just like we do over every single other development. You just zone the motherfucker for whatever you want. Like this city has done a billion times before. Zone the fuckin thing for whatever you want, and then SELL IT. If you get some lunatic like Kuratek who builds a Dairy Queen in a residential zoned area, you blow it up. If Holzman builds a koi pond in a light industrial zone, you drain it & EAT THE KOI.
OK, Bend City Dumbbutts have proved OVER & OVER, that they have LESS THAN ZERO qualifications for ANYTHING, much less going into league with a couple of flim-flam men. Zone JR, sell it, and FIRE EVERY FUCKIN' BEND CITY COUNCILOR. Reminds me of "Blazing Saddle"... This is Bend City Buttfucks answer to ever flim-flam asshole that stumbles into town:
Sheriff Bart: Oh lordy lord! He's desperate. Do what he say! Do what he say!
My God, I've aged about a year just writing that. OK, moving on to David Foster & Brooks "auction", and then I have to quit and nurse this monsterous JR-inspired tumor/goiter.David, for probably good reason, seems to have changed his tone from one of slightly masked pessimism, to one of "it's not so bad". That's OK, he's a Realtor, and frankly he was quite alone in his frank discussions of the downside. But go beyond the "surface" of whether you agree with him or not, and you get the idea that he's hurtin'. That the state of the RE business in Bend is pretty gat-damned dire. That it is starting to impact the livelihood of MANY people in the business to the extent that they will change their tune & try to "talk it up".
Now, I still respect David & his opinion, he's been a pretty straight shooter when the DuBois' & Breezes' of the World have not just been shading the truth, but deliberately misleading people, from my perspective. But I think he's shifting a little towards "puffing" this thing back up, in some measure to restore some sort of faith in this thing. He has some quotes in his recent piece:
"The goal of owning a home seems to be getting beyond the reach of more and more Americans. The typical new house today costs about $28,000." Business Week, 1969
"The median price of a home today is approaching $50,000 ... housing experts predict price rises in the future won't be that great." National Business, 1977
"The golden age of risk-free run-ups in home prices is gone." Money Magazine, 1985
"A home is where the bad investment is." San Francisco Examiner, 1996
Now these look like pretty good homilies supporting buying a house for the long-term, given that prices are almost ludicrously higher today. But remember 2 things: There is PREDICTION of the future, and rehashing the past. Virtually ALL newspaper pieces simply review recent holding period returns, and then extrapolate these, and write some sort of "predictive" piece that is invariably wrong. That's what these are. Half-wit reporters writing pieces about holding period returns on housing that were kind of crappy at the time they wrote them. They actually are probably better as timing vehicles for a short-term bounce than anything.
Second, we are AT OR NEAR the top of the largest RE bubble ever experienced by THIS PLANET. NO MATTER WHERE OR HOW you look back, you will find prices from more than 10 years ago as almost ridiculously low compared to today. Just look at the NASDAQ right after the peak, maybe around 4,500: There is a GREAT CASE to be made that the NASDAQ at 4,500, while off a bit, is still one of the GREATEST INVESTMENTS IN MODERN TIMES.
We all know what happened next. We are at "NASDAQ 4,500" in the bursting of the biggest RE bubble ever. 10% off the top, but still there can be made very convincing arguments that RE is still a HUGE long-term winner. This is simple holding period return extrapolation, much like David's quotes. There is NO prediction in them. They are "predicting" the recent past... not the future.
Finally, Brooks Resources has decided to "auction" some townhomes at Mt Bachelor Village. Seems Uncle Flippers, the prime target of selling these shitholes, has up & died. I have to quote the word "auction" here, because my own experience of this town and it's Boss Hogg insiders leads me to believe this is Yet Another PR/Marketing Bullshit Bonanza from a graduate of the Creating Perceived Demand Where None Exists Community College, apparently where Hollern graduated.
Now Timmy, I think, thinks this is a Sign Of The Times and is indicative of one of the Big Boys doing Major Signaling that The End is Nigh. And I agree to some extent. They WOULD NOT do an auction unless there was a strong impetus to do so. But I also believe that "Auction" was Phase I of the plan. Phase II involved massive widespread PR/Marketing using The Bulletin as their bitch (check that one off as COMPLETE), then plant Friends of Brooks in the "bidding pool" to ensure a GUARANTEED SUCCESS. I don't think the higher ups at Brooks could resist.
This auction is a 100% FRAUD AND A FAKE. There is an iron-clad fallback that involves the oldest trick in the eBay book: Self dealing. These condos WILL SELL. They would NEVER do something like this & let it fail. It'd be SUICIDE for ALL OTHER BROOKS DEVELOPMENTS. There are VERY HIGH price reserves on all these units, so this is nothing more than a modest price reduction, with a ticker tape PR parade in tow. Congrats Brooks, you've turned a price reduction "mole-hill" into a PR Mountain.
If Brooks OR ANYONE were to EVER hold a 100% authentic, no self-dealing, no price res, open, public auction, the absolute WORST SCENARIO POSSIBLE would be unveiled: That market clearing prices for Bend homes are dizzyingly far below where we are now, probably 30% down from here. There is ZERO INCENTIVE to probe the true depths of how bad the current Bend market is. But evidence is all around us.
Remember "Eagles Landing"? The little subdiv with approximately 98% of all it's lots unsold, depicted in "Picto-Plummet"? Well, they lowered intial prices from $425K.... to $350K... to $299K. And how many lots sold as a result of this 30% reduction?
ZERO
Nothing has been built or even started at Eagles Landing despite the implosion of prices that have cratered 30% over the Summer & Fall. There is literally almost no way to lower your prices enough to truly understand just how depressed demand really is. People who are buying now are very, VERY few in number, and they literally have "no choice". NOBODY, given the choice, would buy now. Conversely, NO ONE who is attempting & listing their house RIGHT NOW, has ANY CHOICE. Do you know ANYONE who would VOLUNTARILY try to sell a home in Bend today? No! No one would.
In that vein, Brooks is HARD UP to sell its townhomes. ANYONE trying to sell RE around here, who needs to do it to pay off liabilities is probably looking at the Big BK. THAT is what's changing. Timmy, I think, is one person who is starting to get the smackdown that Paul-doh been laying down lo these many months:
The more I read this blog, the more I worry about my gameplan. (And I AM here to learn, not for the pure entertainment value, of which there is much.) I've been expecting mass bank takeovers of properties in Bend. Price declines to 2003, or even earlier levels. I'm prepared for Plan B in that DOESN'T happen. (Go to a part of the country where my down payment here buys a whole house there.) But am I prepared for the true ramifications of Plan A? If Bend crashes hard and I get what I thought I wanted, am I just living it up in a sweet house in a decimated crime-ridden, depressing hellhole of a town?
There isn't going to be this sort of Ceterus Paribus Decline, where all else stays equal and home prices just go into an orderly decline. Prices will go down FOR GOOD REASON. If we see $175K medians.. do you think all the recent affluence & wealth & prospering local economics will be unaffected? Or EVEN CLOSE? It'll be drugs, crime, and a bunch of gypsy's barely scrapping by. It'll be mass exodus. It'll be big swaths of GHOST TOWN SUBDIVS.
It really is scary what's going on here. A City Government that is literally a bunch of moronic criminals. Their answer to an angered citizenry regarding their own graft, self-dealing, and incompetence is MORE PR & MARKETING & CLOSE THE FUCKIN' DOORS. They are literally THROWING AWAY our tax dollars. No, that's not true. If they were just throwing dollars away, we'd probably be OK. They are actually legally encumbering this town in illegal contracts, where we literally receive NOTHING except GUARANTEED BANKRUPTCY & the other side gets HUNDREDS OF MILLIONS. It's unbelievable (Sorry, I can't stop saying that, cuz I can't stop thinking it).
I have literally resigned myself to exasperated apathy. How can I give a SHIT about this place when it's leaders don't just NOT GIVE A SHIT, they seem to actively WANT TO DESTROY IT? It's like the US itself: What the hell are we doing, taking one of the greatest stores of wealth the World has ever known (U.S. business tax base), and squandering it in a pointless "War"? I do not get it. Bend has an almost unbelievable resource in JR, it's property tax base, and other revenue sources, and we literally would be better off setting this money on fire than doing what City Council is doing.
Timmy is dead right. Bend is the next "Zimbabwe". Zimbabwe leaders took one of the most prosperous African countries 20 years ago, and literally destroyed it economically. Remember that next time someone tries to sell you the Bend Is Surrounded By Natural Wonders BULLSHIT, about how people will never leave & the hordes will always keep coming here. What a load of shit. Places of Natural Beauty being run into the ground is The Rule in this World, not the exception. Bend IS beautiful, as BEM notes, but so are a LOT of other places. People WILL LEAVE BEND IF IT IS ZIMBABWE'd. If every economic resource is 100% SQUANDERED, as it is now, you literally will not recognize Bend a decade hence. Ohhh, we'll have our $175K medians. We'll also have 50% vacancy downtown, 20% unemployment, vast ghost towns, busted windows, meth shacks on every corner, and God knows what else.
If you give a flying fuck about Bend, well then you go to the JR meeting Monday. I WILL NOT be in attendance attendance. Why should I? Per our glorious Mayor:
The Bend City Council is considering a number of other things this week.
During a Monday night work session, the council will discuss a widely circulated policy memo on the next steps of developing the 1,500-acre mixed-use Juniper Ridge project. Though the meeting is open to the public, the council is unlikely to open the floor to much public comment, Mayor Bruce Abernethy said.
Q: Why should I give a shit about a town that EXPRESSEDLY does not give a fuck about what I have to say?
A: I DON'T.
Prediction:
One or more Bend City Councilors will be perp-walked out of City Hall in the next 3 years.
Frankly, I cannot believe that what Bend City Council is doing is not being done under duress, and Holz-tek KNOW what the skeleton in the closet is. There's just no way any one person is THAT stupid, much less a whole group. Paul-doh got a nose for bullshit, and this don't smell right. Somebody's going to jail.
I also think some will see the end and pull "The Hummel Maneuver": Resign, declare your Love Of Humanity (If a lawyer declaring his "Love Of Humanity" don't set off your gay-dar, nothing will.), and run off to a foreign country with questionable extradition laws. The smarter ones will quit first, and ask questions later. I don't know much, but
SOME DUMBFUCK IS GOING TO JAIL FOR FELONY FRAUD.
Monday, October 8, 2007
BEND WILL BE BANKRUPT IN 3 YEARS
Sometimes I sit around on a Saturday afternoon getting mildly hammered, and think, "Holy Crap, I got nothing to post tomorrow!". Then I start cycling through the comments left in the previous week, and realize that there's a ton to talk about. So much so, that I can't really narrow it down to one thing, and this is one of those times.
First, we knew the financial shit hit the fan regarding Columbia Air's bankruptcy a few weeks back. I wrote how Columbia was basically a Ponzi scheme doomed to implode, and that if there was a perfect reflection & predictor of Bends future, it was Columbia Air. BendBilboBust wrote:
Cessna say's that 'IF' they become the lowest prevailing bidder, and their low-bid is accepted, over the other higher bids, then they'll keep the staff in Bend.
OK, let me let you in on a little secret. The chances of Textron actually keeping Columbia in Bend FOR REAL, is 0%, with a standard error of +/-5%.
OK, if you are trying scoop up assets at rock-bottom prices, and you are dealing with dumbshit, old boy networking, non-due-diligence butt bangers, like Bend City Council (which is who these statements are aimed at), you start making Totally Unfounded Promises about saving little baby deer, puppies, kitties from ferocious dragons, Snow White kissing a frog that turns into a Prince, keeping Columbia in Bend, and other fairy tales, because you know you are dealing with morons... Morons who actually paid 1,000% markup for odometer-rolled back pieces of shit, and called it a bus system.
Morons who, as Pamela Hulse Andrews stated it with respect to the Juniper Utility Company debacle, "cost the city thousands of dollars in legal fees". Ummm, yes. That is what she said. "Thousands of dollars in legal fees". And she's right. We did pay "thousands" in legal fees. We also paid "hundreds" in legal fees... 140,000 "hundreds". Call me crazy, but given the fact that the city paid MILLIONS in legal fees, AND MILLIONS in interest expenses, would have led to poor, stupid Paul-doh to put it this way: "MILLIONS in legal fees."
And Pamela: On the front page, lower left, under "Departments": it's Business & Industry, not Businss & Industry.
Anyway, back to Textron & Columbia. Textron is making a smart move in dealing with hill billy dumbshits who can barely wipe their ass without a consultant. Note this snippet from todays piece, "Despite growth, some are worried about challenges for manufacturing":
Textron will not go to that much trouble. Columbia is chickenfeed to them, and not worth the bother. What IS worth the bother is leading local hillbilly dumbasses by the nose into providing spiff after spiff (ie tax breaks, free land, muni-issues) in making Columbia a No Money Down And No Money Ever Deal.
My God, we are going to be led by the nose into providing ridiculous breaks for this company so they can scoop up Columbia For Free... and they will MOVE COLUMBIA TO KANSAS IN LESS THAN A YEAR ANYWAY!
The Old BAIT & SWITCH. The LAVA COURT MOMBO. The Taxpayer Two Step. Bend taxpayers will get HUMPED UNMERCIFUL, and Columbia will leave NO MATTER WHAT WE DO TO KEEP IT. Give Textron $20,000,000 in 0% financing? They leave in 1 year. $10,000,000? 6 months. Tax breaks, free land? 1 month. They don't care about these things. Chickenfeed. Can't be carted up & hauled to Wichita.
There is a hint of just what happens when you run a nice fancy Ponzi scheme like Columbia: Textron has offered $14MM + assumption of $7MM liabilities. The liabilities were almost certainly hand-picked as the most easily disposable from a legal standpoint. Columbia's liabilities stood at $60,000,000 at BK-time.
For every millions bucks Columbia was loaned, they managed to turn it into $230K, or about a -77% return. I've already predicted that as goes Columbia, so goes Bend, and that would mean the ultimate losses of a $1MM McChicken Shack bought at Dead Top in 2006, could ultimately bring $230K. That's a little brutal for Paul-doh's girly constitution, I think we'll only get clocked for -50% top-to-bottom, but -77% from an economic standpoint may be possible: extend a 50% whack out 12-15 years, and you probably looking at a near 80% loss in purchasing power by owning a home in Bend.
And it will be due in part to people like Pamela Hulse Andrews. This pathological lunatic actually believes that by making patently false statements about the heinous fiduciary violations of our city officials, that somehow people can be endlessly duped into buying The Bend Dream. What's stupid is she's been right so far. People do not seem to care that editorial standards in this town revolve around One Thing: Selling Real Estate. Lying to sell Real Estate comes to Andrews like breathing. It's the most natural thing in the World. Classic Ponzi Scheme thinking.
But Ponzi Schemes ALWAYS BUST. Always. It's a simple mathematical proposition. The suckers are ultimately squeezed for every dime, and the House Of Cards implodes. Almost everywhere in this country participated in the Worldwide Real Estate Bubble, but in Bend we fanned the flames like there was no tomorrow. THAT'S ALL THIS PLACE KNOWS HOW TO DO. Man, and we did it to good effect. We got Real Damn Good at it. Fact is, it's our SOLE CORE COMPETENCE. We MARKETED OUR WAY INTO IT, now that it's busting, WE'LL MARKET OUR WAY OUT. Think about it: When the Juniper Ridge backlash became too much to bear, what did Bend City Council want to do? Yes, hire a PR firm.
House on fire? Hire PR firm.
Need groceries? Hire PR firm
I'm an idiot? Hire a PR firm.
Economy going to shit? Hire a PR firm.
Hell, it's not just our core competence, it's our ONLY COMPETENCE. And PR is just about CHANGING PUBLIC PERCEPTIONS. This is also known as LYING, BULL SHITTING, and SPANKING UNCLE DUMBSHIT. Hulse Andrews is The Epitome of this. She owns a little piece of shit rag, and has NO COMPUNCTION about LYING, STRAIGHT UP, to sell real estate.
Hulse Andrews, KTVZ, The Bulletin, Bend City Council: All know absolutely NOTHING except GRIFTING. This is a town of fucking Ponzi grifters, NOTHING MORE. What kind of returns can you expect from a GRIFTER? Well, my own guess is it ranges between -75% and -100%. The Columbia Air Ponzi grifters had not honed their craft very well, and actually left something on the table.
But have no illusions: The Bend Ponzi Grift will end, and when it does we'll be looking at Population Exodus, Economic Implosion, and parts of this place looking like a Ghost Town.
The Duncan Tiff:
Well, Duncan wrote a piece, "You Can't Outsmart A Bubble", which included:
"realize its a bubble and has not reason. Don't try to outsmart it."
I responded with the idea that bubbles DO seem to have some sort of "internal logic" that makes sense to those who are participating. It HAS to. Even if the logic is, "This thing has gone UP 30% a year for 3 years, and committing lots of money will maximize your return because there seems to be No Reason To Believe The Returns Will Slow Down."
OK, this is an argument of OPINION and hence cannot be "Won". You can argue with someone that buying a Bubble Good is a Bad Idea, but you'll have a hell of a time winning if they are already convinced or committed. I know: I had friends buying stocks in 1999, the business of which they had not a single iota of information, but they did have Hot Tips, Rumor, Inside Info From Their Broker, and other priceless tidbits. My attempts to talk about "FACTS" received the Obligatory Eye Roll of someone caught up in Bubble-mania. Comparing buying stocks with buying a car, or hamburger, or something else in which one attempts to maximize the utility of each marginal dollar was met with scoffs of "Irrelevant".
I think Duncan & I fully agree on this thing: It does not make sense to US. But it DOES make sense to THEM. And it will have some sort of predictable characteristics, as all bubble do. From a comment I left on Duncans blog:
Maybe it's just semantics, but you seem to be saying that the "unpredictability" of a bubble makes it impossible to predict, but I think these "unpredictable" characteristics are very predictable... I KNOW it will draw in neophytes, I KNOW it will be cocktail party talk, I KNOW morons will make $ in the runup which draws in more neophytes, I KNOW it will go up farther than I ever thought possible, I KNOW I will not make a cent & stay out, and I KNOW it will end and end badly, far worse than I ever thought.
It IS irrational, it does NOT make sense to me (like any Ponzi scheme), but I think I can outsmart it. If by outsmart, you mean wait for it to implode, as it ALWAYS will. I think Duncan & I were having a little semantical Tempest In A Teapot discussion, in which we both really agree fundamentally, but due to some quirk of existence, we came at our agreement from opposite poles. Like James Gleick saw order in "Chaos": Duncan sees the Chaos, I am seeing the Order, and we are both right.
As I noted earlier, there is a piece in todays Bulletin, "Despite growth, some are worried about challenges for manufacturing". This piece is in essence about The Dreaded Scourge Of Inflation Killing Everything In Sight, something I wrote about ad nauseum, probably to much confusion and guffaws. After all, homes prices going through the roof is a Universal Good, No Lose Proposition, right? See, I OWN A HOME, and hence I am richer... EVERYONE WINS!
Uhhh, no. Well, you DO win for a little bit. Until the economy can adjust to the fact that prices for EVERYTHING have exploded higher. Now if you're in the retraction mode, and are trying to shrink your business, then you really don't care. But if you're expanding because... I don't know... you have a Ponzi Scheme to support, then the demand for the dwindling resources pushes prices to a point where a very slim sliver of SIC code industries can survive; overpriced sushi, time-shares, and the like. Per the Bulletin:
In Bend, a limited supply of industrial land has pushed prices to some of the highest in the state, prompting some manufacturers to shuffle around the High Desert to find more affordable regions to grow. Additionally, Bend’s cost of living strains the work force, pushing many employyees (sic) to commute from cheaper cities and making labor costs rise for the employer.
"Shuffle around"? Yeah, eye-rolling Kool-Aid words for LEAVING BEND. They're not SHUFFLING AROUND... THEY ARE LEAVING BEND. It's this little edge-case bullshit that drives me nuts. "Shuffle around"... like it's fuckin' musical chairs, and that companies are just wandering around without a care in the World, and they might end up in Bend as much as anywhere else when the Music Stops. And the Bullshit never ends:
The key to absorbing any job losses in a changing economy, officials say, is attracting a larger diversity of industries — and pointing out that Central Oregon remains cheaper to manufacture in than other Northwest regions.
Another Kool-Aid Vendor Favorite: Mixing fact, with some sort of Logical Nightmare. YES, diversity is a key to mitigating the loss of some number of jobs. Of course, this town has been managed for the precise OPPOSITE of diversity. Overpriced sushi and time-shares, are 2 of approximately 4 SIC codes that Bend can support. "Illegal street corner vendor", and "Ponzi Scheme Grifter" are the other 2.
Kit plane maker is NOT one of them. Check this HILARIOUS quote by Joseph Bartels, owner of Lancair:
“I’m worried that one day somebody is going to end up offering me so much money (to relocate the company) that I would be an absolute fool not to take it,” Bartels said last week, acknowledging that a town in Colorado is courting his company. “I love Oregon, but am discouraged that no economic-retention organization has been sufficient enough to … keep organizations like Lancair here.”
He's "WORRIED" about being offered a BOATLOAD of money, to relocate out of Bend. If you can say one thing about Bend's Ponzi Scheme Grifters, it's Them Mother Fuckers Learn Fast! Bartels saw Textron pulling the Bait & Switch Butt Banger Special Grift with Columbia, and IMMEDIATELY hopped on board. It involves a GRIFTER, a pack of DUMBSHITS (Bend City Council), and a worthless old NAG (Columbia Air, Lancair, or whatever the hell the grifter owns). The grift is as follows: Grifter approaches Dumbshits, tells them he'll pack up his worthless old nag and leave, said nag having liberal amounts of lipstick and a tutu for hornying up the hillbillies, if the Dumbshits do not give him The Cash. And like a 14 year old boy paying to be alone with a sheep, the money flows like water. THE GRIFTERS ARE TURNING ON EACH OTHER, cuz there ain't no more NEW MEAT. Here's Roger Lee's (EDCO Chief Grifter) attempt to grift the State of Oregon:
Roger Lee, executive director of Economic Development for Central Oregon, admits other areas of the country have more attractive incentives for certain industries than Central Oregon. For example, parts of the Midwest offer breaks on property taxes and other cash incentives for businesses in the aerospace industry, he said. Oregon’s incentives are primarily geared toward attracting tech companies, Lee said, and any change to that must come at the state level.
"State level"? Translation: "Bend has expended every nickel grifting (PR MARKETING) Cali-spankers and we are essentially broke. If the grift is going to continue, we'll need state money." And the flawed logic rolls on:
Bend’s industrial land may be pricey, he said, but the region still is more affordable than larger metropolitan areas, notably California. For example, the region’s employment costs, workers’ compensation rates, and sales and property taxes are lower than some neighboring states.
OK, dumbshits, here's where Paul-doh teaches you EVERYTHING YOU'LL EVER KNOW ABOUT ECONOMICS (safe to say, cuz Bend Officials know NOTHING): California has JOBS. When you're a fuckin' grifter, this is like talking about alien life on another planet, it doesn't compute. California is not primarily a Grifting-based Ponzi Scheme Economy like Bend. California has INCOME SUPPORTED PRICES. We have HOT AIR, PR-GRIFTING SUPPORTED PRICES. That's the difference.
This piece is essentially chronicling what happens when a scam unwinds. When the fungible goo of The Grift is gone, just like a ghost town, everyone leaves. What did we do with the MASSIVE money flows from Bubble-times? We doubled down on red, AGAIN. We have done EVERTHING IMAGINABLE to make Bend as UNATTRACTIVE as possible to Business, and by extension Good Paying Jobs. NO ONE will relocate to Bend. Everyone here is leaving. THAT'S what this piece is about.
Grifters need a MARK. Without a Mark, the grifter is DEAD. The inbound Mark is no longer succumbing to our PR bullshit, so we are starting to feed on each other: Lancair is pulling The Short Con on The Mark (Bend City Councilors) because they are proving to be The Biggest Idiots for 1,000 square miles. And man, are they some Obligingly Stupid Marks. They seem to actually WANT TO GET CONNED. Lava Court ring a bell? Linda Johnson actually CHEERED The Pigeon Drop Con put over on the city! These people are actually grifters who are using other peoples money (taxpayers) to enrich their fellow CON MAN!
Well shit, this post didn't end up like I planned! Thought it'd be a hodge-podge of stuff, but I guess when Paul-doh's panties get in a bunch over the heinous mismanagement of this place... well, The Rant takes over. Just realize folks, that this place is still PACKED with grifters pulling The Long Con on us: Mercato, The Plaza, untold subdivided 5ac plots going for MILLIONS, land-giveaways, tax subsidies... these are ALL people trying to pull The Big Score, and the victims are US. Lowlife Bend taxpaying schlubs who will have to foot ALL THESE BILLS. And like day follows night, there is ONE and only ONE OUTCOME:
First, we knew the financial shit hit the fan regarding Columbia Air's bankruptcy a few weeks back. I wrote how Columbia was basically a Ponzi scheme doomed to implode, and that if there was a perfect reflection & predictor of Bends future, it was Columbia Air. BendBilboBust wrote:
Cessna say's that 'IF' they become the lowest prevailing bidder, and their low-bid is accepted, over the other higher bids, then they'll keep the staff in Bend.
OK, let me let you in on a little secret. The chances of Textron actually keeping Columbia in Bend FOR REAL, is 0%, with a standard error of +/-5%.
OK, if you are trying scoop up assets at rock-bottom prices, and you are dealing with dumbshit, old boy networking, non-due-diligence butt bangers, like Bend City Council (which is who these statements are aimed at), you start making Totally Unfounded Promises about saving little baby deer, puppies, kitties from ferocious dragons, Snow White kissing a frog that turns into a Prince, keeping Columbia in Bend, and other fairy tales, because you know you are dealing with morons... Morons who actually paid 1,000% markup for odometer-rolled back pieces of shit, and called it a bus system.
Morons who, as Pamela Hulse Andrews stated it with respect to the Juniper Utility Company debacle, "cost the city thousands of dollars in legal fees". Ummm, yes. That is what she said. "Thousands of dollars in legal fees". And she's right. We did pay "thousands" in legal fees. We also paid "hundreds" in legal fees... 140,000 "hundreds". Call me crazy, but given the fact that the city paid MILLIONS in legal fees, AND MILLIONS in interest expenses, would have led to poor, stupid Paul-doh to put it this way: "MILLIONS in legal fees."
And Pamela: On the front page, lower left, under "Departments": it's Business & Industry, not Businss & Industry.
Anyway, back to Textron & Columbia. Textron is making a smart move in dealing with hill billy dumbshits who can barely wipe their ass without a consultant. Note this snippet from todays piece, "Despite growth, some are worried about challenges for manufacturing":
Columbia is one of the area’s top employers, with roughly 400 workers, and last month announced it was planning to sell to Wichita, Kan.-based Cessna Aircraft Co., the world’s largest maker of general aviation airplanes. Columbia also announced it was filing for Chapter 11 bankruptcy protection.
The announcement worries regional leaders, who fear a larger company could move Columbia out of Central Oregon. Cessna must win a bankruptcy auction to buy Columbia against other bidders, but has said it would keep the company in Bend.
Man, they are playing "regional leaders" like a fiddle. Now listen up Bend City Council dumbshits: Columbia Air will NEVER stay in Bend long-term. There is NO WAY. Textron is doing what any savvy bidder would do: prey on the weaknesses of dumbass locals to try to extract an extra margin a preferential treatment (ie MONEY) from local, regional, state, and/or federal government. It WILL NOT WORK on the state or federal level. Why? These are actually marginally qualified bureaucrats who are quite used to flim flam artists, and Big Government has instituted onerous paperwork requirements that only allow the highest level bullshit artists, like Blackwater, Halliburton, and the like, to actually Get Money.Textron will not go to that much trouble. Columbia is chickenfeed to them, and not worth the bother. What IS worth the bother is leading local hillbilly dumbasses by the nose into providing spiff after spiff (ie tax breaks, free land, muni-issues) in making Columbia a No Money Down And No Money Ever Deal.
My God, we are going to be led by the nose into providing ridiculous breaks for this company so they can scoop up Columbia For Free... and they will MOVE COLUMBIA TO KANSAS IN LESS THAN A YEAR ANYWAY!
The Old BAIT & SWITCH. The LAVA COURT MOMBO. The Taxpayer Two Step. Bend taxpayers will get HUMPED UNMERCIFUL, and Columbia will leave NO MATTER WHAT WE DO TO KEEP IT. Give Textron $20,000,000 in 0% financing? They leave in 1 year. $10,000,000? 6 months. Tax breaks, free land? 1 month. They don't care about these things. Chickenfeed. Can't be carted up & hauled to Wichita.
There is a hint of just what happens when you run a nice fancy Ponzi scheme like Columbia: Textron has offered $14MM + assumption of $7MM liabilities. The liabilities were almost certainly hand-picked as the most easily disposable from a legal standpoint. Columbia's liabilities stood at $60,000,000 at BK-time.
For every millions bucks Columbia was loaned, they managed to turn it into $230K, or about a -77% return. I've already predicted that as goes Columbia, so goes Bend, and that would mean the ultimate losses of a $1MM McChicken Shack bought at Dead Top in 2006, could ultimately bring $230K. That's a little brutal for Paul-doh's girly constitution, I think we'll only get clocked for -50% top-to-bottom, but -77% from an economic standpoint may be possible: extend a 50% whack out 12-15 years, and you probably looking at a near 80% loss in purchasing power by owning a home in Bend.
And it will be due in part to people like Pamela Hulse Andrews. This pathological lunatic actually believes that by making patently false statements about the heinous fiduciary violations of our city officials, that somehow people can be endlessly duped into buying The Bend Dream. What's stupid is she's been right so far. People do not seem to care that editorial standards in this town revolve around One Thing: Selling Real Estate. Lying to sell Real Estate comes to Andrews like breathing. It's the most natural thing in the World. Classic Ponzi Scheme thinking.
But Ponzi Schemes ALWAYS BUST. Always. It's a simple mathematical proposition. The suckers are ultimately squeezed for every dime, and the House Of Cards implodes. Almost everywhere in this country participated in the Worldwide Real Estate Bubble, but in Bend we fanned the flames like there was no tomorrow. THAT'S ALL THIS PLACE KNOWS HOW TO DO. Man, and we did it to good effect. We got Real Damn Good at it. Fact is, it's our SOLE CORE COMPETENCE. We MARKETED OUR WAY INTO IT, now that it's busting, WE'LL MARKET OUR WAY OUT. Think about it: When the Juniper Ridge backlash became too much to bear, what did Bend City Council want to do? Yes, hire a PR firm.
House on fire? Hire PR firm.
Need groceries? Hire PR firm
I'm an idiot? Hire a PR firm.
Economy going to shit? Hire a PR firm.
Hell, it's not just our core competence, it's our ONLY COMPETENCE. And PR is just about CHANGING PUBLIC PERCEPTIONS. This is also known as LYING, BULL SHITTING, and SPANKING UNCLE DUMBSHIT. Hulse Andrews is The Epitome of this. She owns a little piece of shit rag, and has NO COMPUNCTION about LYING, STRAIGHT UP, to sell real estate.
Hulse Andrews, KTVZ, The Bulletin, Bend City Council: All know absolutely NOTHING except GRIFTING. This is a town of fucking Ponzi grifters, NOTHING MORE. What kind of returns can you expect from a GRIFTER? Well, my own guess is it ranges between -75% and -100%. The Columbia Air Ponzi grifters had not honed their craft very well, and actually left something on the table.
But have no illusions: The Bend Ponzi Grift will end, and when it does we'll be looking at Population Exodus, Economic Implosion, and parts of this place looking like a Ghost Town.
The Duncan Tiff:
Well, Duncan wrote a piece, "You Can't Outsmart A Bubble", which included:
"realize its a bubble and has not reason. Don't try to outsmart it."
I responded with the idea that bubbles DO seem to have some sort of "internal logic" that makes sense to those who are participating. It HAS to. Even if the logic is, "This thing has gone UP 30% a year for 3 years, and committing lots of money will maximize your return because there seems to be No Reason To Believe The Returns Will Slow Down."
OK, this is an argument of OPINION and hence cannot be "Won". You can argue with someone that buying a Bubble Good is a Bad Idea, but you'll have a hell of a time winning if they are already convinced or committed. I know: I had friends buying stocks in 1999, the business of which they had not a single iota of information, but they did have Hot Tips, Rumor, Inside Info From Their Broker, and other priceless tidbits. My attempts to talk about "FACTS" received the Obligatory Eye Roll of someone caught up in Bubble-mania. Comparing buying stocks with buying a car, or hamburger, or something else in which one attempts to maximize the utility of each marginal dollar was met with scoffs of "Irrelevant".
I think Duncan & I fully agree on this thing: It does not make sense to US. But it DOES make sense to THEM. And it will have some sort of predictable characteristics, as all bubble do. From a comment I left on Duncans blog:
Maybe it's just semantics, but you seem to be saying that the "unpredictability" of a bubble makes it impossible to predict, but I think these "unpredictable" characteristics are very predictable... I KNOW it will draw in neophytes, I KNOW it will be cocktail party talk, I KNOW morons will make $ in the runup which draws in more neophytes, I KNOW it will go up farther than I ever thought possible, I KNOW I will not make a cent & stay out, and I KNOW it will end and end badly, far worse than I ever thought.
It IS irrational, it does NOT make sense to me (like any Ponzi scheme), but I think I can outsmart it. If by outsmart, you mean wait for it to implode, as it ALWAYS will. I think Duncan & I were having a little semantical Tempest In A Teapot discussion, in which we both really agree fundamentally, but due to some quirk of existence, we came at our agreement from opposite poles. Like James Gleick saw order in "Chaos": Duncan sees the Chaos, I am seeing the Order, and we are both right.
As I noted earlier, there is a piece in todays Bulletin, "Despite growth, some are worried about challenges for manufacturing". This piece is in essence about The Dreaded Scourge Of Inflation Killing Everything In Sight, something I wrote about ad nauseum, probably to much confusion and guffaws. After all, homes prices going through the roof is a Universal Good, No Lose Proposition, right? See, I OWN A HOME, and hence I am richer... EVERYONE WINS!
Uhhh, no. Well, you DO win for a little bit. Until the economy can adjust to the fact that prices for EVERYTHING have exploded higher. Now if you're in the retraction mode, and are trying to shrink your business, then you really don't care. But if you're expanding because... I don't know... you have a Ponzi Scheme to support, then the demand for the dwindling resources pushes prices to a point where a very slim sliver of SIC code industries can survive; overpriced sushi, time-shares, and the like. Per the Bulletin:
In Bend, a limited supply of industrial land has pushed prices to some of the highest in the state, prompting some manufacturers to shuffle around the High Desert to find more affordable regions to grow. Additionally, Bend’s cost of living strains the work force, pushing many employyees (sic) to commute from cheaper cities and making labor costs rise for the employer.
"Shuffle around"? Yeah, eye-rolling Kool-Aid words for LEAVING BEND. They're not SHUFFLING AROUND... THEY ARE LEAVING BEND. It's this little edge-case bullshit that drives me nuts. "Shuffle around"... like it's fuckin' musical chairs, and that companies are just wandering around without a care in the World, and they might end up in Bend as much as anywhere else when the Music Stops. And the Bullshit never ends:
The key to absorbing any job losses in a changing economy, officials say, is attracting a larger diversity of industries — and pointing out that Central Oregon remains cheaper to manufacture in than other Northwest regions.
Another Kool-Aid Vendor Favorite: Mixing fact, with some sort of Logical Nightmare. YES, diversity is a key to mitigating the loss of some number of jobs. Of course, this town has been managed for the precise OPPOSITE of diversity. Overpriced sushi and time-shares, are 2 of approximately 4 SIC codes that Bend can support. "Illegal street corner vendor", and "Ponzi Scheme Grifter" are the other 2.
Kit plane maker is NOT one of them. Check this HILARIOUS quote by Joseph Bartels, owner of Lancair:
“I’m worried that one day somebody is going to end up offering me so much money (to relocate the company) that I would be an absolute fool not to take it,” Bartels said last week, acknowledging that a town in Colorado is courting his company. “I love Oregon, but am discouraged that no economic-retention organization has been sufficient enough to … keep organizations like Lancair here.”
He's "WORRIED" about being offered a BOATLOAD of money, to relocate out of Bend. If you can say one thing about Bend's Ponzi Scheme Grifters, it's Them Mother Fuckers Learn Fast! Bartels saw Textron pulling the Bait & Switch Butt Banger Special Grift with Columbia, and IMMEDIATELY hopped on board. It involves a GRIFTER, a pack of DUMBSHITS (Bend City Council), and a worthless old NAG (Columbia Air, Lancair, or whatever the hell the grifter owns). The grift is as follows: Grifter approaches Dumbshits, tells them he'll pack up his worthless old nag and leave, said nag having liberal amounts of lipstick and a tutu for hornying up the hillbillies, if the Dumbshits do not give him The Cash. And like a 14 year old boy paying to be alone with a sheep, the money flows like water. THE GRIFTERS ARE TURNING ON EACH OTHER, cuz there ain't no more NEW MEAT. Here's Roger Lee's (EDCO Chief Grifter) attempt to grift the State of Oregon:
Roger Lee, executive director of Economic Development for Central Oregon, admits other areas of the country have more attractive incentives for certain industries than Central Oregon. For example, parts of the Midwest offer breaks on property taxes and other cash incentives for businesses in the aerospace industry, he said. Oregon’s incentives are primarily geared toward attracting tech companies, Lee said, and any change to that must come at the state level.
"State level"? Translation: "Bend has expended every nickel grifting (PR MARKETING) Cali-spankers and we are essentially broke. If the grift is going to continue, we'll need state money." And the flawed logic rolls on:
Bend’s industrial land may be pricey, he said, but the region still is more affordable than larger metropolitan areas, notably California. For example, the region’s employment costs, workers’ compensation rates, and sales and property taxes are lower than some neighboring states.
OK, dumbshits, here's where Paul-doh teaches you EVERYTHING YOU'LL EVER KNOW ABOUT ECONOMICS (safe to say, cuz Bend Officials know NOTHING): California has JOBS. When you're a fuckin' grifter, this is like talking about alien life on another planet, it doesn't compute. California is not primarily a Grifting-based Ponzi Scheme Economy like Bend. California has INCOME SUPPORTED PRICES. We have HOT AIR, PR-GRIFTING SUPPORTED PRICES. That's the difference.
This piece is essentially chronicling what happens when a scam unwinds. When the fungible goo of The Grift is gone, just like a ghost town, everyone leaves. What did we do with the MASSIVE money flows from Bubble-times? We doubled down on red, AGAIN. We have done EVERTHING IMAGINABLE to make Bend as UNATTRACTIVE as possible to Business, and by extension Good Paying Jobs. NO ONE will relocate to Bend. Everyone here is leaving. THAT'S what this piece is about.
Grifters need a MARK. Without a Mark, the grifter is DEAD. The inbound Mark is no longer succumbing to our PR bullshit, so we are starting to feed on each other: Lancair is pulling The Short Con on The Mark (Bend City Councilors) because they are proving to be The Biggest Idiots for 1,000 square miles. And man, are they some Obligingly Stupid Marks. They seem to actually WANT TO GET CONNED. Lava Court ring a bell? Linda Johnson actually CHEERED The Pigeon Drop Con put over on the city! These people are actually grifters who are using other peoples money (taxpayers) to enrich their fellow CON MAN!
Well shit, this post didn't end up like I planned! Thought it'd be a hodge-podge of stuff, but I guess when Paul-doh's panties get in a bunch over the heinous mismanagement of this place... well, The Rant takes over. Just realize folks, that this place is still PACKED with grifters pulling The Long Con on us: Mercato, The Plaza, untold subdivided 5ac plots going for MILLIONS, land-giveaways, tax subsidies... these are ALL people trying to pull The Big Score, and the victims are US. Lowlife Bend taxpaying schlubs who will have to foot ALL THESE BILLS. And like day follows night, there is ONE and only ONE OUTCOME:
BEND WILL BE BANKRUPT IN 3 YEARS
Addendum:
Oy, I NEVER add on to the "Original" post, but cannot resist: There's a piece in yesterdays Bulletin, "ADA compliance: Cost is in the details -- Bend, behind on the work, says there are few contractors bidding for the high-priced precision changes the government is requiring".
What's great about this piece, besides the endless rationzalizing about Why We Are Overcharged For Every Single Construction Project (ummm... incompetence, graft, etc), is the actual extent to which taxpayers are RIPPED OFF in dollars & cents:
The cost issue does not appear to be letting up, as work to improve bus stops is now averaging about $20,000 per stop. Officials earlier this summer said they expected to be able to fix many bus stops for about $1,500 each.
Oy, I NEVER add on to the "Original" post, but cannot resist: There's a piece in yesterdays Bulletin, "ADA compliance: Cost is in the details -- Bend, behind on the work, says there are few contractors bidding for the high-priced precision changes the government is requiring".
What's great about this piece, besides the endless rationzalizing about Why We Are Overcharged For Every Single Construction Project (ummm... incompetence, graft, etc), is the actual extent to which taxpayers are RIPPED OFF in dollars & cents:
The cost issue does not appear to be letting up, as work to improve bus stops is now averaging about $20,000 per stop. Officials earlier this summer said they expected to be able to fix many bus stops for about $1,500 each.
McNichols Products, a national company with offices in Portland, sells complete 40-foot-long slotted drain kits for about $1,500.
Wilson’s bid — which includes labor costs — charged $8,525 for the job.
Similarly, Traffic Safety Supply Co. in Portland sells 2-by-5-foot bumpy yellow mats, known as detectable warning mats, for $175 each. The amount needed for the parking spaces would have cost about $1,050.
The line for that item on Wilson Curb’s bid — which also included labor — was $5,040.
The invoice charges a total of $300 for material and labor to install four concrete wheel stops, two for each space. Central Oregon Redi-Mix sells the stops for $25 apiece.
So rough estimates put Bend City Council WASTE near 85-90%. What does DESIGNER and Bend City Councilor Peter Gramlich think we should do?Another source of added costs is the outside consultants the city uses for much of the ADA-related design work.
“Us constantly outsourcing design to consultants is the epitome of inefficiency on this,” Councilor Peter Gramlich, who is a home designer, said Wednesday.
Gramlich and other councilors urged city staff to start doing more design work themselves, even if it means creating new positions.
It never ends. When you are pulling The Long Con, you got to take every opportunity to suckerfish whatever shark it is you're attached to. Gramlich literally can't help himself from touting the "Push it on city staff... who will ultimately have to outsource it to ME as a consultant" macro-scam. Don't think so?
If you do not know who the Mark is, YOU ARE THE FUCKIN' MARK!Monday, October 1, 2007
How To Make $100 Million A Year In Bend, Oregon
Well Damn, that didn't take long. I hung out the Bend-to-Columbia Air post just a day after it was announced that Textron was "buying" Columbia. Didn't sound right to me. Sounded like an awful big rush. Sounded like Columbia needed the money yesterday.
They started to make it sound like a nice, big Strategic Acquisition... good for Columbia, good for Bend, good all the way around. Yup. Did Not Smell Right To Paul-doh. I wrote in the comments on Sunday:
Although it appears Columbia accepted some sort of bid on Friday, I still wonder if running 'er thru a BK won't still happen. Remember, the founder is still suing for $1MM+ back pay. If I was Cessna, I'd have them go BK, and wipe out the liabilities, lawsuits and all.
Next Day, The Big BK! I'm telling you folks, when something doesn't Smell Right, it probably isn't. Columbia hasn't smelled right for many moons. What kind of company shuts down when part suppliers are late? A company With No Money, that's what kind.
Now, we're starting to hear "All Is Well" at Columbia. They'll stay in Bend, everything will be just fine. Really? Because Chap 11 typically means carve up the carcass, and selling the bits at a garage sale. Textron/Cessna, if they have Any Sense At All, will simply bid on the bits it needs, and cart them off to Wichita. The bits it does not need, will go to others... hell, I might stop by and pick up some picture frames and a chair.
Point is, HOW will Columbia be run once it is sold off bit by bit? Cessna Will Not buy Columbia Outright, No Way. It'll be an auction. Anything you hear to the contrary is an attempt to deceive plane buyers to buy anyway, and to keep employees, who have been spanked by this company so many times their asses are raw, to stay on.
Believe NONE OF IT. Columbia is dead and gone, unfortunately.
Speaking of things going down the shitter, BEM recently left this comment (which is NOT the thing going down the shitter, by the way...):
I would never mess with perfection, Paul, but I think sometime you should do a "bust-o-meter" on Central Oregon grand schemes falling victim to the RE bust
I think it's safe to say that I was never really a Big Fan of the concept of The Shire. Hell, I love LOTR more than anyone, probably the best movies of all time. But a Good Movie Does Not A Subdivision Make. This is just a Bad Idea, and that's putting it mildly. It's a TERRIBLE IDEA.
And finally, the developers have thrown in the towel on this White Elephant. From the COR website:
Come home to The Shire, a serenely lovely community with streams, waterfalls, ponds, wildflowers, paths and amphitheater, all designed to convey a sense of peace and belonging. Lot includes plans for 3BR/3.5 BA 2374 sq ft energy efficient Pheasant Cottage with ground floor master suite & 2 junior suites, vaulted great room and terrace views. Or design your own home and have our builder or yours construct it.
"Design your own home"... folks that means The Hobbits attempting to enforce the CC&R's have succumbed to The One Ring. This means Hobbit Hole here, craftsman there, contemporary Brady Bunch homes everywhere! They have unfortunately already built 3-4 Hobbiton dwellings, and unless they are burned by ring wraiths, they will be intermingled with whatever home design lot buyers are willing to put there.
Paul-doh smells a bargain. Cuz nothing smacks down the resale of a hobbit hole more than being a standout among craftsmans. Woof, those spec Shire huts will be hell to unload now. The Shire has just gone from the frying pan into the fire. Those Shire shacks will be like geodesic domes.... death.
The Shire was conceptualized by a local "think-tank", The Hatchery. Here's a short summary by these smug bastards:
The Hatchery team is composed of extremely bright and talented professionals with senior executive level experience in Sales, Marketing, Business Development, Strategic Planning, Public Relations, Operations, Engineering leadership, Manufacturing and Finance.
Yeah, the people who brought us The Shire ARE extremely bright and talented. They're so bright, they Bought In, and located Their World Headquarters at The Shire! Now THAT'S smart!
Just so I'm clear: These guys and gals probably are pretty smart. But they succumbed to a delusion that blinded hundreds if not thousands around here:
1) Real Estate prices are going up
2) I own Real Estate
3) I am a genius
4) Every idea I will ever have is a great idea!
5) I have an idea for a Grandiose Real Estate development
OK folks, we're all sort of collectively average, with ideas no better or worse than a few years back. But the RE bubble has convinced many, MANY people to build some of the nuttiest stuff ever conceived. The Shire? Maybe in Ireland, or England, or somewhere like that.
The Shire is a blatant example of a concept doomed to failure from Minute 1. There are other more subtle losers, but they are equally doomed to Total And Utter Failure. Here is a short list:
1) The Plaza, a "non-age restricted" condo: DOOMED. The Plaza is totally doomed.
2) Mercato: DOOMED. Mercato will almost certainly not get funded, and if it does, it'll not lease to near capacity in my lifetime.
3) Redmond Waterpark: DOOMED. Were we 5X as big, maybe. But no way will this work, even if it's domed. People DO NOT like to go swimming in the dead of Winter.
4) The Whole Tuscan Craze: DOOMED. The only possible survivor is Ranch at the Canyons. "Tuscan" is being slapped on every possible structure, including mobile homes, spider holes, and apartment buildings.
I went from being pretty sympathetic to Becky Breezes' plight with the hideous Plaza, but no more. First, she has actually RAISED prices on several of these units, without a single reduction. If The Plaza were not Becky's own development, she'd have whacked the sellers expectations & asking price to nothing.
Second, I posted this over on BendBB:
Just found this:
http://tinyurl.com/2w9vmy
Located at Upper Terrace
1,600 SQUARE FEET $1,095,000
Unit 408, The Plaza. 4th floor penthouse w/unobstructed Cascade Mtn views, 1,600 sq. ft.., Great Room floor plan for spaciousness, 2 Master Suites w/full bathrooms, tile showers/glass doors, vaulted ceilings in Great Room, kitchen island, slab granite counters, wood/tile/carpet flooring, private balcony, A/C, stainless steel GE Monogram appliances, fully wired for audio/video, 2 underground parking spaces w/storage unit.
For more information:
Terry Dietz
America At Home
P.O. Box 801
Office Phone: 541-433-2400
tdietz@worldstar.com
First, this listing AIN'T Becky Breeze, who I believe is listing new units EXCLUSIVELY. This is listed on Page 2 of BendBB's Sept New Listings & Price Changes entry. PLUS, THIS badboy is a top floor PENTHOUSE unit, that if I recall, Breeze stated she had sold in Christmas:
A few blocks away, The Plaza is expected to have models ready to show next month, Breeze said. So far, 14 of the building's 42 units are under contract. Prices average around $650,000 to $700,000 for units in the all-residential building, but the most expensive unit so far - a top-floor penthouse with views of the river, The Shops at The Old Mill District and the Cascades, went under contract for $1.999 million at Christmas.
http://tinyurl.com/35uq8p
You tell me, but this looks like a Plaza resale at a HUGE LOSS.
This is the first "resale" at The Plaza, and if Breeze's claim of near $2,000,000 sale prices for penthouse units are true, it'd be a Huge LOSS, over $900K. It actually looks like ONLY 4 UNITS HAVE SOLD so far in The Plaza (Breeze claims 25% have sold), at least that's all that's in the county clerks records. There may be more. But Unit 408, the only possible "penthouse" unit, sold for about $820K, not $2 million. And what's better, the freak who bought it is TRYING TO FLIP IT FOR A $280K profit in only 2 months! Classic!
There you have it: Breeze is a liar, she a stubborn obstinate seller trying to market a horribly flawed concept, and those she has actually sold to, are out of their minds!
Which one of these guys apparently invested $200,000,000 in a Bend aircraft maker this week?
1) Peter Tork of "The Monkees"
2) Rip Taylor
3) Liberace
4) Indian Billionaire, Vijay "Jazzy Jeff And The Fresh Prince" Mallya
I know, it's hard to figure cuz each has One Sweet Ass Fuckin' Hair Doo! I mean, WTF?
Did anyone else see that pic in The Bulletin, and wonder what the hell is up with that dudes hair? I mean, DAMN.
ATTENTION INDIAN DUDE: That sweet-ass tight fro may have landed the ladies in 1973, but that thing is just weird!
Anyway, this is YET ANOTHER STORY THAT DOESN'T PASS THE SMELL TEST. I wrote in the comments:
This whole thing SMELLS BAD. $200MM (if true), values Epic at $400MM. WHAT! No way. With 140 employees, that is almost $2.9MM/employee. No freakin' way is that real.
Boeing market cap is $82.52BB
Employees: 153,000
Value/Employee: $540,000
Is this Indian Dude INSANE? He's valuing a po-dunk little maker of kit planes out in the desert at more than 5X the per employee value of BOEING?
Man, if this Rick Schrameck guy actually convinced this nut to pay $200MM for 50%, he is One Hell Of A Shyster. Valuing Epic at well over 5X the relative value of Boeing on an employee basis is straight up INSANE.
That Rick Schrameck dude has pulled off the Bend Enterprise Investment Marketing Boondoggle Of A Lifetime. He got rocks. Bangin' a friend of his for $200MM, for only HALF of Epic, a podunk nut'n out in the desert. That's one thing. But he did it while RIGHT NEXT DOOR, there is a much larger competitor GOING BANKRUPT! Holy Shit! That is just brutal!
Seriously, it is stuff like this that reaffirms my faith in The Impossible. If this is true, which I seriously doubt, this guy has pulled off a dot-com era boondoggle the likes of which this town will never see again. Good job Rick!
And the guy is INDIAN. If Glengarry Glen Ross (The Greatest Salesperson Movie AND Real Estate Movie EVER MADE) has taught us anything, it's that selling to Indians is gat damn impossible:
Williamson: [handing Roma lead cards] I'm giving you three leads...
Ricky Roma: Three? No, I count two.
Williamson: There's three leads there.
Ricky Roma: "Patel"? Fuck you. Fucking Shiva handed this guy a million dollars, told him "Sign the deal!" he wouldn't sign. And the god Vishnu too, into the bargain. Fuck you, John! You know your business, I know mine. Your business is being an asshole. I find out whose fucking cousin you are, I'm going to go to him and figure out a way to have your ass - fuck you!
[throws the cards at Williamson]
Ricky Roma: I'm waiting for the new leads.
I'm telling you RE types right now, watching Glengarry Glen Ross ought to be de rigeur in Monday morning RE meetings! It's awesome!
Blake: You see this watch? You see this watch?
Dave Moss: Yeah.
Blake: That watch costs more than you car. I made $970,000 last year. How much you make? You see pal, that's who I am, and you're nothing. Nice guy? I don't give a shit. Good father? Fuck you! Go home and play with your kids. You wanna work here - close! You think this is abuse? You think this is abuse, you cocksucker? You can't take this, how can you take the abuse you get on a sit? You don't like it, leave.
Blake: And to answer you question, pal, why am I here? I came here because Mitch and Murray asked me to. They asked me for a favor. I said the real favor, follow my advice and fire your fucking ass because a loser is a loser.
Blake: We're adding a little something to this month's sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize?
[Holds up prize]
Blake: Second prize is a set of steak knives. Third prize is you're fired.
Ricky Roma: You ever take a dump made you feel like you'd just slept for twelve hours?
Oh God... every line in that movie is just a classic. I actually know an extremely successful salesperson who watches this movie 2-3/month.
Anyway, this should bring us full circle to How To Make $100 Million A Year In Bend, Oregon. Rick Schrameck has already done the legwork, and has proven the Concept.
1) Start UNPROFITABLE business
2) Fly to Bangkok for Freaky Sex Junket
3) Approach Indias Answer To Liberace
4) Ask for 10X what the company is worth
5) Fire up the Automatic Cash Spanker
6) Bail out with Golden "Shower" Parachute 2-3 years later
It is AMAZING how there are people who can ask, and somehow receive, HUGE sums of money around here for some of the lamest-ass projects EVER. Becky Breeze and Lafky come to mind. Granted, I went to Epic Airs website, and they got some Sweet Rides, and had I the means, I would possibly consider buying one. But is Epic really worth $400 million, or even close? My God, this is another Malaysian Mambo, where some Far East Elvis Impersonator/Government gets whacked for not just millions... BUT HUNDREDS OF MILLIONS!
Rick Schrameck, I salute you. If you have in fact secured $200 million from an Indian Dude wearing Liberaces prized toupee, then you my friend, are KING OF THE WORLD.
They started to make it sound like a nice, big Strategic Acquisition... good for Columbia, good for Bend, good all the way around. Yup. Did Not Smell Right To Paul-doh. I wrote in the comments on Sunday:
Although it appears Columbia accepted some sort of bid on Friday, I still wonder if running 'er thru a BK won't still happen. Remember, the founder is still suing for $1MM+ back pay. If I was Cessna, I'd have them go BK, and wipe out the liabilities, lawsuits and all.
Next Day, The Big BK! I'm telling you folks, when something doesn't Smell Right, it probably isn't. Columbia hasn't smelled right for many moons. What kind of company shuts down when part suppliers are late? A company With No Money, that's what kind.
Now, we're starting to hear "All Is Well" at Columbia. They'll stay in Bend, everything will be just fine. Really? Because Chap 11 typically means carve up the carcass, and selling the bits at a garage sale. Textron/Cessna, if they have Any Sense At All, will simply bid on the bits it needs, and cart them off to Wichita. The bits it does not need, will go to others... hell, I might stop by and pick up some picture frames and a chair.
Point is, HOW will Columbia be run once it is sold off bit by bit? Cessna Will Not buy Columbia Outright, No Way. It'll be an auction. Anything you hear to the contrary is an attempt to deceive plane buyers to buy anyway, and to keep employees, who have been spanked by this company so many times their asses are raw, to stay on.
Believe NONE OF IT. Columbia is dead and gone, unfortunately.
Speaking of things going down the shitter, BEM recently left this comment (which is NOT the thing going down the shitter, by the way...):
I would never mess with perfection, Paul, but I think sometime you should do a "bust-o-meter" on Central Oregon grand schemes falling victim to the RE bust
I think it's safe to say that I was never really a Big Fan of the concept of The Shire. Hell, I love LOTR more than anyone, probably the best movies of all time. But a Good Movie Does Not A Subdivision Make. This is just a Bad Idea, and that's putting it mildly. It's a TERRIBLE IDEA.
And finally, the developers have thrown in the towel on this White Elephant. From the COR website:
Come home to The Shire, a serenely lovely community with streams, waterfalls, ponds, wildflowers, paths and amphitheater, all designed to convey a sense of peace and belonging. Lot includes plans for 3BR/3.5 BA 2374 sq ft energy efficient Pheasant Cottage with ground floor master suite & 2 junior suites, vaulted great room and terrace views. Or design your own home and have our builder or yours construct it.
"Design your own home"... folks that means The Hobbits attempting to enforce the CC&R's have succumbed to The One Ring. This means Hobbit Hole here, craftsman there, contemporary Brady Bunch homes everywhere! They have unfortunately already built 3-4 Hobbiton dwellings, and unless they are burned by ring wraiths, they will be intermingled with whatever home design lot buyers are willing to put there.
Paul-doh smells a bargain. Cuz nothing smacks down the resale of a hobbit hole more than being a standout among craftsmans. Woof, those spec Shire huts will be hell to unload now. The Shire has just gone from the frying pan into the fire. Those Shire shacks will be like geodesic domes.... death.
The Shire was conceptualized by a local "think-tank", The Hatchery. Here's a short summary by these smug bastards:
The Hatchery team is composed of extremely bright and talented professionals with senior executive level experience in Sales, Marketing, Business Development, Strategic Planning, Public Relations, Operations, Engineering leadership, Manufacturing and Finance.
Yeah, the people who brought us The Shire ARE extremely bright and talented. They're so bright, they Bought In, and located Their World Headquarters at The Shire! Now THAT'S smart!
Just so I'm clear: These guys and gals probably are pretty smart. But they succumbed to a delusion that blinded hundreds if not thousands around here:
1) Real Estate prices are going up
2) I own Real Estate
3) I am a genius
4) Every idea I will ever have is a great idea!
5) I have an idea for a Grandiose Real Estate development
OK folks, we're all sort of collectively average, with ideas no better or worse than a few years back. But the RE bubble has convinced many, MANY people to build some of the nuttiest stuff ever conceived. The Shire? Maybe in Ireland, or England, or somewhere like that.
CENTRAL OREGON IS HIGH DESERT
The Shire is a blatant example of a concept doomed to failure from Minute 1. There are other more subtle losers, but they are equally doomed to Total And Utter Failure. Here is a short list:
1) The Plaza, a "non-age restricted" condo: DOOMED. The Plaza is totally doomed.
2) Mercato: DOOMED. Mercato will almost certainly not get funded, and if it does, it'll not lease to near capacity in my lifetime.
3) Redmond Waterpark: DOOMED. Were we 5X as big, maybe. But no way will this work, even if it's domed. People DO NOT like to go swimming in the dead of Winter.
4) The Whole Tuscan Craze: DOOMED. The only possible survivor is Ranch at the Canyons. "Tuscan" is being slapped on every possible structure, including mobile homes, spider holes, and apartment buildings.
I went from being pretty sympathetic to Becky Breezes' plight with the hideous Plaza, but no more. First, she has actually RAISED prices on several of these units, without a single reduction. If The Plaza were not Becky's own development, she'd have whacked the sellers expectations & asking price to nothing.
Second, I posted this over on BendBB:
Just found this:
http://tinyurl.com/2w9vmy
Located at Upper Terrace
1,600 SQUARE FEET $1,095,000
Unit 408, The Plaza. 4th floor penthouse w/unobstructed Cascade Mtn views, 1,600 sq. ft.., Great Room floor plan for spaciousness, 2 Master Suites w/full bathrooms, tile showers/glass doors, vaulted ceilings in Great Room, kitchen island, slab granite counters, wood/tile/carpet flooring, private balcony, A/C, stainless steel GE Monogram appliances, fully wired for audio/video, 2 underground parking spaces w/storage unit.
For more information:
Terry Dietz
America At Home
P.O. Box 801
Office Phone: 541-433-2400
tdietz@worldstar.com
First, this listing AIN'T Becky Breeze, who I believe is listing new units EXCLUSIVELY. This is listed on Page 2 of BendBB's Sept New Listings & Price Changes entry. PLUS, THIS badboy is a top floor PENTHOUSE unit, that if I recall, Breeze stated she had sold in Christmas:
A few blocks away, The Plaza is expected to have models ready to show next month, Breeze said. So far, 14 of the building's 42 units are under contract. Prices average around $650,000 to $700,000 for units in the all-residential building, but the most expensive unit so far - a top-floor penthouse with views of the river, The Shops at The Old Mill District and the Cascades, went under contract for $1.999 million at Christmas.
http://tinyurl.com/35uq8p
You tell me, but this looks like a Plaza resale at a HUGE LOSS.
This is the first "resale" at The Plaza, and if Breeze's claim of near $2,000,000 sale prices for penthouse units are true, it'd be a Huge LOSS, over $900K. It actually looks like ONLY 4 UNITS HAVE SOLD so far in The Plaza (Breeze claims 25% have sold), at least that's all that's in the county clerks records. There may be more. But Unit 408, the only possible "penthouse" unit, sold for about $820K, not $2 million. And what's better, the freak who bought it is TRYING TO FLIP IT FOR A $280K profit in only 2 months! Classic!
There you have it: Breeze is a liar, she a stubborn obstinate seller trying to market a horribly flawed concept, and those she has actually sold to, are out of their minds!
POP QUIZ!
Which one of these guys apparently invested $200,000,000 in a Bend aircraft maker this week?1) Peter Tork of "The Monkees"
2) Rip Taylor
3) Liberace
4) Indian Billionaire, Vijay "Jazzy Jeff And The Fresh Prince" Mallya
I know, it's hard to figure cuz each has One Sweet Ass Fuckin' Hair Doo! I mean, WTF?
Did anyone else see that pic in The Bulletin, and wonder what the hell is up with that dudes hair? I mean, DAMN.
ATTENTION INDIAN DUDE: That sweet-ass tight fro may have landed the ladies in 1973, but that thing is just weird!
Anyway, this is YET ANOTHER STORY THAT DOESN'T PASS THE SMELL TEST. I wrote in the comments:
This whole thing SMELLS BAD. $200MM (if true), values Epic at $400MM. WHAT! No way. With 140 employees, that is almost $2.9MM/employee. No freakin' way is that real.
Boeing market cap is $82.52BB
Employees: 153,000
Value/Employee: $540,000
Is this Indian Dude INSANE? He's valuing a po-dunk little maker of kit planes out in the desert at more than 5X the per employee value of BOEING?
Man, if this Rick Schrameck guy actually convinced this nut to pay $200MM for 50%, he is One Hell Of A Shyster. Valuing Epic at well over 5X the relative value of Boeing on an employee basis is straight up INSANE.
That Rick Schrameck dude has pulled off the Bend Enterprise Investment Marketing Boondoggle Of A Lifetime. He got rocks. Bangin' a friend of his for $200MM, for only HALF of Epic, a podunk nut'n out in the desert. That's one thing. But he did it while RIGHT NEXT DOOR, there is a much larger competitor GOING BANKRUPT! Holy Shit! That is just brutal!
Seriously, it is stuff like this that reaffirms my faith in The Impossible. If this is true, which I seriously doubt, this guy has pulled off a dot-com era boondoggle the likes of which this town will never see again. Good job Rick!
And the guy is INDIAN. If Glengarry Glen Ross (The Greatest Salesperson Movie AND Real Estate Movie EVER MADE) has taught us anything, it's that selling to Indians is gat damn impossible:
Williamson: [handing Roma lead cards] I'm giving you three leads...
Ricky Roma: Three? No, I count two.
Williamson: There's three leads there.
Ricky Roma: "Patel"? Fuck you. Fucking Shiva handed this guy a million dollars, told him "Sign the deal!" he wouldn't sign. And the god Vishnu too, into the bargain. Fuck you, John! You know your business, I know mine. Your business is being an asshole. I find out whose fucking cousin you are, I'm going to go to him and figure out a way to have your ass - fuck you!
[throws the cards at Williamson]
Ricky Roma: I'm waiting for the new leads.
I'm telling you RE types right now, watching Glengarry Glen Ross ought to be de rigeur in Monday morning RE meetings! It's awesome!
Blake: You see this watch? You see this watch?
Dave Moss: Yeah.
Blake: That watch costs more than you car. I made $970,000 last year. How much you make? You see pal, that's who I am, and you're nothing. Nice guy? I don't give a shit. Good father? Fuck you! Go home and play with your kids. You wanna work here - close! You think this is abuse? You think this is abuse, you cocksucker? You can't take this, how can you take the abuse you get on a sit? You don't like it, leave.
Blake: And to answer you question, pal, why am I here? I came here because Mitch and Murray asked me to. They asked me for a favor. I said the real favor, follow my advice and fire your fucking ass because a loser is a loser.
Blake: We're adding a little something to this month's sales contest. As you all know, first prize is a Cadillac Eldorado. Anybody want to see second prize?
[Holds up prize]
Blake: Second prize is a set of steak knives. Third prize is you're fired.
Ricky Roma: You ever take a dump made you feel like you'd just slept for twelve hours?
Oh God... every line in that movie is just a classic. I actually know an extremely successful salesperson who watches this movie 2-3/month.
Anyway, this should bring us full circle to How To Make $100 Million A Year In Bend, Oregon. Rick Schrameck has already done the legwork, and has proven the Concept.
1) Start UNPROFITABLE business
2) Fly to Bangkok for Freaky Sex Junket
3) Approach Indias Answer To Liberace
4) Ask for 10X what the company is worth
5) Fire up the Automatic Cash Spanker
6) Bail out with Golden "Shower" Parachute 2-3 years later
It is AMAZING how there are people who can ask, and somehow receive, HUGE sums of money around here for some of the lamest-ass projects EVER. Becky Breeze and Lafky come to mind. Granted, I went to Epic Airs website, and they got some Sweet Rides, and had I the means, I would possibly consider buying one. But is Epic really worth $400 million, or even close? My God, this is another Malaysian Mambo, where some Far East Elvis Impersonator/Government gets whacked for not just millions... BUT HUNDREDS OF MILLIONS!
Rick Schrameck, I salute you. If you have in fact secured $200 million from an Indian Dude wearing Liberaces prized toupee, then you my friend, are KING OF THE WORLD.
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