$0.99

Such a Deal!

I am proud to announce the third novel in the Detective Tony Alfano thriller set, 

CHICAGO FIX. 

It’s 1933 Chicago, the Century of Progress Fair draws over a million people a week to the city. And not all of these people are looking for fun. It’s the politics, the night life, the rackets, and the mob that draw them. Does the city turn away from this evil and dissipation – hardly. Often, they are willing participants. Detective Tony Alfano, a righteous cop in an unholy land, is the corrupt mayor’s sword of truth and justice.

Pre-orders until December 31, 2018. It’s on Amazon for only $0.99.

Click on Tony and he'll take you there.

Click me baby!

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https://www.amazon.com/Chicago-Fix-Alfano-Thriller-Thrillers-ebook/dp/B07L8MT7PM/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1544971583&sr=1-1&keywords=chicago+fix&fbclid=IwAR1O2lU-IPlj6_K-vo7IWGqagIrjbyR56t4GAW7T4xMo9e_ldUuEEa5sN2U

The De-Malling of America

Ten years ago, before the Great Recession, I was a consultant to one of America’s largest retail shopping center owners. The stated goal was to see if we could redesign, repurpose, and reprogram the concept of their existing shopping centers to include housing. We focused on two malls, one in Southern California and another in the San Francisco Bay Area. The idea was to include during the remodel of the mall, a significant number of residential units into the property’s footprint. There was all this delicious asphalt ready for housing; all we had to do was set goals and then a direction.

The effort failed, mostly because of the collapse of the financial markets, housing, and the bankruptcy of the client. However, I still believe that these sites are gold mines for the current and on-going realignment of retail and commercial space for two good reasons.

• 1.     The sites usually have excellent access and are at important and critical transportation nexus points.
• 2.     In most instances the underlying dirt is either free (paid for out of the old center’s previous life) or at a substantial discount to the nearby costs of land.

Additional bonuses are that many have modern infrastructure (more or less) and willing politics. Nothing gets a city’s attention faster than a decline in sales tax revenues. It is projected that a quarter of all malls will close during the next five years.

In some instances these old malls can be rebuilt as town centers, dense residential neighborhoods, or a mix of commercial, retail (service and restaurant), housing (rental and for sale), and even transportation hubs. The old concept of single use zoning is rapidly fading and new concepts are immerging.

The greatest difficulty I found with many of these development companies is a lack of expertise and imagination. They know housing, they know retail, they know office, but they refuse to understand each other’s land uses. This has to change.

It will also require cities to change zoning and land use models. Many communities built into their General Plans a long term program that is now inflexible and counterproductive. No matter how important, it can take years to modify and codify them – this while everything around them collapses and disappears. The market place is not a kind and benevolent beast. As Ludwig von Mises said in his great book, Human Action, “The market is supreme!” Believe it!

We are discovering that now, it is often a hard slap to the face. Amazon buying Whole Foods is just one example; the real examples are the high-end retailers such as Nordstrom, fighting loosing battles to just stay alive over 6% reductions in year to year sales. Shoppers? If you want loyalty, get a puppy.

I worked for an architectural design studio back in the 1970s that focused on the newest thing in retail shopping, the “enclosed” mall. Our clients were the big boys of the day (they are still around, but certainly not the big boys they were). These new malls destroyed the old town centers and main streets of America, especially in the Midwest and the East. And now, the Internet is doing the same thing; it is a revolution that is both cultural and financial. Sure you can point a finger at Amazon, that’s easy. But in reality, it is every brick and mortar retailer who is offering their products online and with a broader selection and home delivery.

The models are changing, the way we shop is changing, what we buy is changing, and most especially why we buy is changing. Even the way we live is changing.

During the last fifty years nothing has occupied architects, urban planners, and city officials more than what will become of our cities. We have had anti-suburbanists, neo-traditionalists, urban revivalists, edge city believers, survivalists, futurists, and even blow-the-hole-thing-up-ists, telling us how cities MUST be redesigned. Most without a clue or real plan.

I remember a science fiction story from my youth where everyone lived in their own little cell, it was a nice cell, comfortable, with entertainment and all the necessities of life, and everything arrived at the door—all you had to do was ask for it. Paranoia raged, we were defensive and protective of our cell—all because we didn’t go out anymore.

Are we there yet?

Stay tuned . . . . .

Oversupply – Everywhere

“Buy land, they ain’t making any more of the stuff.”

Will Rogers

Even with the inevitable and growing dearth of housing, one commodity is still in great supply around most cities, land. During the past twenty years every city that could expanded their supply of job-producing lands for everything from retail and commercial acreage to industrial, warehousing and office. Now there is zoned land everywhere for non-residential use and it’s forcing down land prices, all to their own competitive disadvantage. And sadly the jobs aren’t coming either.

Restrictions on housing development, especially in most areas of California’s 50 mile coastal strip, and the foreclosure crisis have pushed prices up and up. Foreclosures have led to higher prices simply because these units have been pulled out of the retail market and are now being rented. As with all things this is temporary but the result is a severe lack of housing and increasing prices. You mess with the demand-supply balance and that’s what you always get. Some builders I know in the Central Valley of California have not built one house in five years.

And that’s what’s happened to commercial real estate in all its various forms, oversupply. Commercial lands in foreclosure are being quietly peddled in bankruptcies at fifty cents on the dollar or even less. Along the freeways there are miles of land zoned as commercial/business/professional and they can’t give the land away at any price. Cities are left scratching their collective heads. There are bright spots such as San Francisco and some areas of the Silicon Valley – but other areas are begging for users and jobs.

Housing always leads, or it used to. More homes means more people resulting in more demand for commercial uses; that was the usual mantra. Now, not so much. Areas immediately to the east of the San Francisco Bay area are now, once again, beginning to supply low-cost housing to the job centers in the East Bay and Silicon Valley. Buy a nice house at a great price and receive, at no extra cost, a daily five hour commute regime. But you’re fortunate. A similar home in the San Jose are will cost you three or four times the price, and to be honest the internal commutes within Silicon Valley are almost just as bad.

We have overbuilt retail, we still have empty office buildings, and signs saying “Available” hang on empty warehouse buildings. Anyone want a million square foot warehouse? No, how about an enclosed shopping mall? Amazon is flying into the logistic centers that surround our major cities, demand secrecy, and then provide jobs at about 1 per 1000 square feet. Cities need four and five per 1000 to even come close to justifying the infrastructure costs. That rebalance won’t happen for a long time.

I see a lot of rezoning of commercial lands to residential in the future. One way or another, the costs of the infrastructure already in the ground will force cities to make these changes – someone has to pay for the bonds.

But the bright side is that these lands are a bank account that can be drawn on when the time is right. During the fifties and sixties a lot of development came from outliers who, like the sod-busters of the late nineteenth century, opened the way for the massive suburban growth and the spectacular rise of the American economy.

And I can see this again in America’s future – I’m hardly a Pollyanna, but when the time is right there will again be another dramatic shift to the suburbs.

Stay Tuned . . . . . .