-- Connecting the dots between our economy, government and business --
Summary and audio linked here.
Chicago’s political leadership is floating a pension buyout program as evidence it is seriously addressing the city’s thirty-six-billion-dollar unfunded pension liability, but Mark Glennon, founder of the Illinois policy research organization Wirepoints, said that the proposal moves debt from one column to another rather than reducing it, and that the broader fiscal picture facing the city continues to deteriorate across every measurable dimension. Audio here.
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
Full interview and summary linked here.
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Foreclosures result in distressed sales. Distressed sales lead to lower overhead for landlord, which in theory, lead to lower rents. Lower rents might entice employers to bring their employees back downtown. I’ve been involved in several downtown leases over the years and the rents used to be astronomical. Cheaper rents would be beneficial for everyone. But the problem with this is that employees don’t want to go downtown and will fight employers to have to go back into the office. And secondly, Chicago’s and Illinois’ business environment is so terrible, it’s not like there’s all of these new businesses forming… Read more »
“it’s not like there’s all of these new businesses forming or expanding in Chicago” with Brandon as mayor that’s not going to help.
Although he is an expert in NY real estste, I heard Bruce Ratner mention that downtown Chicago’s real estate footprint is insolvent (collectively). Typically, although painful to stakeholders, there is a silver lining because asset prices become much cheaper. The problem is as Debtsor has described it is that cheaper assets no longer provide opportunity. Once these assets move (painfully and fitfully) through the banking system, it is frightening to a degree to ask what comes next. Very few of the buildings can be converted to residential, and tear downs (which we shall see happen) and i can’t imagine demand… Read more »
That’s why I am short KRE (regional banks), though it has not really dropped much lately. Some 200 banks are at risk.