Tuesday, November 24, 2009

Attack of the Zombie Buildings

Ever wonder what would have happened to beautiful downtown Sierra Madre had Measure V failed? Would it have blossomed into a vibrant center of business and modern residential life like it said in those brain dead pamphlets the DIC used to hand out? Probably not. Because judging by what we're seeing elsewhere, and five years since our DSP first crawled out of its primordial planner ooze, the likely result is our downtown would have turned out to be something far different. That being a barren and empty swath of what are now known as Zombie Buildings.

The Huffington Post has a great article up about this phenomenon titled 'Zombie Buildings': Are They The Next Economic Calamity? And its description of what has come to be in so many other parts of the country is also a cautionary tale about what almost happened here. Check this out and see if you don't agree:

While the overall U.S. financial system is showing signs of stability, a rapidly rising tide of troubled loans for commercial real estate threatens the survival of hundreds of the nation's small and medium-sized banks.

Financial reports this month from federal regulators and industry analysts detail a new cycle of uncertainty that they fear could cripple the economic recovery. Billions of dollars in commercial debt will have to be paid back or refinanced at a time when property values have plummeted. About $500 billion will come due in 2010 alone and an equal amount every year through at least 2012, according to the Federal Reserve.

Many banks that cater to regional and community developments were largely unscathed by the residential mortgage meltdown. But now they are facing huge numbers of possible defaults by builders who erected thousands of office buildings, condominiums and shopping centers with the easy credit available five years ago. With few tenants, those developments are turning into what industry insiders call zombie buildings.

Who knew that the Downtown Specific Plan (DSP) was actually the Downtown Zombie Plan (DZP)?

You do know that the whole thing really was little more than a get rich quick scheme, right? Borrow a bunch of the cheap money that was flowing in vast mysterious quantities five years ago, throw up some generic condos and minimum wage nicknack shops using the same uninspired plans being used everywhere else, unload the paper on some other equally suicidal bank or investors, then take the money and run for wherever people like that go to live out their lives in grim excess. Excess portrayed locally in the contextual gaucheries of The Magazine.

Of course, what really happened here is the DSP attracted a lot of barely monied mediocrities who imagined themselves to be in-the-know big-a-shots getting in on something swanky. And that they were finally going to make the financial killing they'd always dreamed about. But in the end these eager chumps became little more than that unfortunate form of human annoyance called failed investors. And their whining and complaining is still with us today.

The sad irony here is that if more towns had done what we did in Sierra Madre, put a Measure V style initiative on the ballot and stopped the madness, this country wouldn't be facing quite the kind of financial crisis it is today. But the kind of greed and callous stupidity represented here by the DSP also happened in a lot of other places as well. Only there nobody stopped them.

And now this country is facing a form of blight far worse than it has ever seen before. A blight that will probably cost us over a trillion dollars in taxpayer money to overcome. The attack of the Zombie Buildings indeed.

29 comments:

  1. The commercial real estate bubble will be the next and biggest shoe to drop.
    The word "catastrophe" comes to mind.

    The people of Sierra Madre can be thankful SMRRD, Kurt Zimmerman and Don Watts saved us from this nightmare. Sierra Madre may have never recovered. We now will, eventually, if our city government stays in the hands of the slow-growth, responsible growth residents and somehow manages to keep Sacramento out of the equation.

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  2. Our legislators in Sacramento are so dependent on lobbyist money
    and gifts that they cannot even begin to comprehend what is actually
    good for the state.

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  3. The Monrovia's Downtown Investment Club still has not learned their lesson. Unsold condos and gready landlords running out businesses because of increased rents; and still they are building more condos and mixed use in the downtown.

    This Thanksgiving be thankful Sierra Madre now has 3 council members who care about the city and its future.

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  4. This comment has been removed by a blog administrator.

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  5. "I would like to say that, and as a representation of the values we hold so dear to our hearts, that I should get both drumsticks."

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  6. 8:04 - Just a little on the extreme side there. While it is true talking with your mouth stuffed with food is both impolite and dangerous, we should never wish that kind of thing on even our worst enemies.

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  7. So if there are so many empty and failing buildings around, why
    is the state constantly pushing cities to allow building even more?

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  8. A word of advise to those who are enticed by promises of making a killing in real estate: If it sounds to good to be true, it probably is.
    Stay out of the fish tank with the shark in it.

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  9. Unfortunately the town is now cursed with a
    handful of incompetent real estate investors who think we all owe them something. Like we should allow them to wreck the town just because they hope to get some of their money back.

    They must think they're a car company and Sierra Madre is Washington DC.

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  10. No BAIL OUTS for DIC's. Only THROW OUTS.
    Bye, Mosca!

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  11. I also "subscribe" to The Huffington Post online. They are a great resource on politics and finance. They are growing and many articles are about the problems in California. I recommend all of us in SM to read this, as they are very informative.

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  12. coughing...under breath...Monrovia

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  13. Any so-called luxury condo that doesn't sell and ends up being part of a Fedreal bail out should be nationalized and turned into low income housing. No more welfare for banks and developers.

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  14. At what point will SCAG adjust the RHNA numbers to reflect reality?
    How many empty buildings does it take to get Sacramento to revoke it's uberdensity developers' dreams?

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  15. This is what happens when you have a government run by lobbyists. Out of control spending, massive ballooning debt, and a mad push for development that is in no way connected to reality. Can you imagine? $500 billion in commercial real estate defaults are projected for 2012, and that is the same year we'll be expected to plan for the huge new SB 375 fueled RHNA numbers? Insanity.

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  16. Zombie is it.
    The developers are the zombies
    Nothing can stop them, impact them.
    They keep building, even for no one.
    Brain dead automatons.

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  17. Another at 12:59, didn't you hear Consultant Karen Warner explain that the state population is booming? She said something like 25,000 new residents a month.
    That's who will buy the condos. All the wealthy new residents. And maybe newborns.

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  18. The census people are projecting that California will lose a congressional seat in 2010, the first time ever for this state.

    That "booming" Karen heard is the sound of people flooring it as they speed to the nearest border.

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  19. I like this town, and I want everybody in it to prosper. But one of the ridiculous myths that the Downtown Investor's Club and any other of the pushers of the DZP were trying to sell was that our downtown can "have blossomed into a vibrant center of business and modern residential life."

    It's geography. People have to drive up and chill at stop signs. Not the usual LA thing. Can't you always spot an out of towner? They're eager to jump on in to the intersections like there's a race or something. Regular LA driving is not like our driving.

    Sierra Madre is not on the beaten track, and that's why the DZP would never work here, and why none of the threatened bigboxes ever materialize. It's also why imagining us as any part of a "transportation corridor" is wack.

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  20. Yeah, but don't forget the Zombie Bus to Sierra Madre Villa Station. Or maybe that should be Ghost Bus since it is almost
    always empty.

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  21. Residents of Sierra Madre...If you are unhappy that certain issues have not appeared on agendas, PLEASE call to voice your opinion. Call MaryAnn MacGillivray, Don Watts, and Kurt Zimmerman. Encourage your friends to call, too. (Do not email them from the city website,...those emails could be monitored by the city staff.) It's a good thing to discuss these issues on the blog, but its EVEN BETTER to call one of our three councilmen and let your voice be heard! Thank You! :)

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  22. 4:07 Turns out the GoldLine Express is NOT mandated by law. The city will not loose any $$$$ if that connection was discontinued. It would free up money for local transportation.

    End the Express

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  23. Did not someone say we need to do a study on the Goldline Express bus? Is that happening?

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  24. Here's a random question... Why is city hall closed on alternate Fridays?

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  25. I think it was a money saving idea.
    How's that working out?

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  26. Hey anon 4:20, are you saying there might be some internal issues with city hall? Oh my, what a scandalous city hall we have. Oh yeah, they are all outsiders too! Imagine that

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  27. 10:50 - so what's your point?

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  28. He\She has no point, just innuendo and baseless accusations.

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  29. Oh. Just your garden variety confused
    and deluded Moscateer.

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