Archive for March, 2012
Scorekeepers in Washington such as the Joint Committee on Taxation (JCT) and the Congressional Budget Office can often make or break the outlook for different policy ideas. This week, the JCT released its revenue estimate of S. 2059, legislation by Senator Sheldon Whitehouse (D-RI) that would implement the President’s proposed “Buffett Rule.”
As a reminder, the Buffett Rule would require anyone with income in excess of $1 million to pay an effective tax rate of no less than 30%. The 10-year revenue estimate for S. 2059 came in at $46.7 billion, or just under $5 billion per year. The meager revenue estimate (relative to a yearly deficit of $1.2 trillion) came as a surprise to many in Washington and will not help the proposal’s prospects of becoming law.
According to the second-annual Prudential Real Estate Outlook Survey, a full 60 percent of Americans have favorable views toward the real estate market. That’s up 8 points since last year.
The survey shows that signs of increasing optimism are widespread:
- With interest rates at historically low levels, 96 percent agree or somewhat agree that now is a good time to buy.
- A full 70 percent of respondents have some degree of confidence that property values will improve over the next two years; with an 8 point increase in those very confident or confident compared to last year.
- 63 percent believe that real estate is a good investment despite the recent market volatility; that’s up 11 points from last year.
The survey confirms that despite the recession, homeownership remains a central part of the American Dream. Eight in 10 respondents said homeownership is very important to them; only 15 percent said the economic downturn made homeownership less important.
Vail Resorts announced that Epic Passes for the 2012/2013 ski season are now on sale. There are a variety of options to choose from:
- Epic Pass: The original. Completely unrestricted access to all 7 mountains in the Vail Resorts family including Vail, Beaver Creek, Breckenridge, Keystone, Heavenly, Northstar, and Kirkwood. Also unrestricted access to Arapahoe Basin.$659 for Adults, $339 for kids.
- Epic 7-Day: 7 unrestricted days at all Vail Resorts mountains except Kirkwood. $509 for adults, $259 for kids.
- Epic Local Pass: This pass has restrictions on when and where you can ski. Unlimited access to Breckenridge, Keystone, and Arapahoe Basin. 10 restricted days at Vail and Beaver Creek. Limited restrictions at the California resorts of Heavenly, Northstar, and Kirkwood. $509 for adults, $389 for teens, and $259 for kids.
- Summit Value Pass: Unlimited access to Keystone and Araphoe Basin. Limited restrictions to Breckenridge. $419 for adults, $329 for teens, and $209 for kids.
- Tahoe Local Pass: Access with limited restrictions to Heavenly, Northstar, and Kirkwood. $419 for adults, $319 for teens, and $199 for kids.
- Tahoe Value Pass: Ski or ride 7 days a week at Heavenly and 6 days a week at Northstar and Kirkwood with some restrictions. $379 for adults, $299 for teens, $179 for kids, and $299 for seniors.
It is hard to beat the value in these passes considering the price of 1-day lift tickets. For anyone skiing more than just a few days, one of these passes is bound to fit not only your plans for next season but also your budget. Go to the following site for more details and to reserve your pass now; Vail Resorts Epic Passes. You need to act before 4/15/12 to get the best prices.
- Vail Resorts set to buy Kirkwood to join Heavenly and Northstar in Tahoe area (examiner.com)
- Vail Resorts To Acquire Kirkwood Mountain Resort in Lake Tahoe, Calif., Creating an Unparalleled Offering for Skiers and Riders in the Tahoe Region with the Combination of Heavenly and Northstar (beavercreekvoice.com)
- Top 10 hardest EpicMix pins to get at Breck (buzz.snow.com)
If you haven’t already, now is a great time to refinance. Interest rates have been dropping for years. The chart below diagrams interest rates over the past 30 years. We are lowering our interest rate on our 30 year loan from 4.875% to 4.0%.
Last week, the Eagle County Commissioners gave initial approval to a new 373 acre development along I-70 at Wolcott. The development is a master planned community that will include 679 new homes, 135,000 square feet of commercial space, the Eco trail system will connect between Wolcott and Edwards, will have 1.5 miles of public river access including a riverside park. There will also be a Arts & Garden District and a Canoe & Kayak Club. The project will also include park land and conservation easements. This project has overwhelming support by the public, and even neighboring HOA’s. Nearly 120 citizens showed up at a public hearing in support of the project. The developers have committed to using only local contractors for the project which will create 1600 jobs, and 800 of those jobs will be permanent after the project is completed. Construction is expected to begin in the summer of 2013 with realignment of HWY 6 closer to I-70, away from the Eagle River. Build out is expected to be over a 10-15 year period.
Kim and I visited Crested Butte last weekend to spend a few days outside the Vail Valley. We had a fabulous time. We were lucky that Nick Herrin, Director, Resort Services & The Ski and Ride School for Crested Butte, was able to hook us up with some discounts for lodging and lift tickets.
We stayed at The Elevation Hotel in Mt. Crested Butte, which is the small village at the base of the mountain. It is not only a wonderful hotel with large, comfortable guest rooms, it is located just steps from the lifts. The rooms come equipped with a small kitchen and separate living room area. The only item on our wish list was an outdoor hot tub.
The skiing was amazing. Both Kim and I like skiing the steeps and we got our fill. Crested Butte has some of the steepest, most gnarly terrain we have skied. Some of the more popular expert runs still needed some snow to completely cover the rocks but nearly everything was skiable.
We really enjoyed the runs off the North Face T-Bar. That is Kim in the photos skiing Hawk’s Nest, a double black diamond. The snow was excellent and the bumps well shaped.
Kim and I explored a couple of local restaurants at night and came away well satisfied. We ate at Django’s, a tapas restaurant in Mt. Crested Butte. The restaurant offered a variety of dishes we could share. The signature dish is deep fried brussel sprouts, something we wondered about but thoroughly enjoyed.
The next night we tried Maxwell’s in Crested Butte, a short 15 minute bus ride down the mountain from Mt. Crested Butte. Maxwell’s is a local steak house full of life and character. The food was excellent, the portions generous, and the prices reasonable.
I can highly recommend Crested Butte if you are thinking of a vacation to a beautiful mountain destination.
As I expected, the foreclosure of the Bachelor Gulch Ritz-Carlton was the owner’s method to restructure his debt. It was announced on February 28, 2012, that the owners had completed the recapitalization of the Ritz-Carlton. The text of the announcement is below:
Gencom & GD Holdings Complete Recapitalization of The Ritz-Carlton, Bachelor Gulch in Avon, Colorado
MIAMI, Feb. 28, 2012
MIAMI, Feb. 28, 2012 /PRNewswire/ — Affiliates of Gencom and GD Holdings, through a joint partnership, have completed the recapitalization of the 206-room The Ritz-Carlton, Bachelor Gulch, located in Avon, Colorado, today announced Gary Lake, EVP of Gencom.
The Gencom/GD Holdings partnership has successfully completed a long term recapitalization which includes the restructuring of its loans on both the hotel and the residential component of the Resort thereby reinstating its outstanding loans to good standing. In addition to the debt restructuring, the Resort has embarked on a $10 million renovation program to refresh and enhance the property’s already unique mountain lodge decor within its guest rooms, ballroom/meeting space and public areas. The renovation program is expected to be completed in early 2014.
Opened in November 2002, The Ritz-Carlton, Bachelor Gulch is a AAA 5-Diamond luxury ski in/ski out boutique hotel nestled at the base of the world-renowned Beaver Creek Resort and is the focal point of the Bachelor Gulch Village. The Resort features the internationally acclaimed Wolfgang Puck’s Spago Restaurant, a world-class spa and has been the recipient of numerous awards and accolades since its opening, including:
- Conde Nast Traveler “2012 Gold List: The World’s Best Places to Stay” – (January 2012)
- Travel + Leisure “The World’s Best 500 Hotels” – #1 in Colorado (January 2012)
- Forbes Four-Star, AAA Five-Diamond Resort
- AAA Four-Diamond Restaurant, Spago by Wolfgang Puck
- Forbes Four-Star Spa
- Golf Digest “The 75 Best Golf Resorts” – #19 (November 2011)
- Conde Nast Traveler “#1 Spa Resort in the Continental U.S.”
Founded in 1987 by Karim Alibhai, Gencom is a leading domestic and international investment and development firm specializing in the hospitality and residential real estate sectors. By aligning itself with prominent investors and institutional relationships, Gencom has maintained a strong market position with both luxury and mixed-use hotels and resorts with significant residential components, and in other hospitality-related investments that include both portfolios and single assets. The firm continues to opportunistically grow its portfolio holdings in key resort and urban markets in the United States, Canada, Mexico, Caribbean and Europe. Gencom is headquartered in Miami with representative offices in Houston and London. For more information, visit www.gencomgrp.com.
About GD Holdings
GD Holdings, LLC is a privately held real estate investment company engaged in the acquisition, development, ownership and management of hotels and commercial real estate assets. The firm was established by Salomon Juan Marcos, Chairman and CEO of Grupo Denim (www.grupodenim.com.mx), which brings with it a tradition of decades of success in the apparel industry. The firm and Mr. Marcos employ a highly disciplined investment approach focused on value creation, capital preservation, and enduring quality.
By Richard Galant, CNN
Long Beach, California (CNN) — Gasoline at $4 a gallon is no worry for T. Boone Pickens, the billionaire energy investor from Texas. He drives from his home to his office in a car that runs on fuel costing less than $1 a gallon.
His method: He has a device that fuels his Honda Civic GX with natural gas from the pipes that serve his home. And he thinks there’s a lesson there for America’s energy woes.
Pickens, who is speaking Wednesday at the TED2012 Conference in Long Beach, California, said America needs to make natural gas a building block of a plan for ending oil imports from the Organization of Petroleum Exporting Countries.
Natural gas is “cheaper, it’s cleaner, it’s abundant and it’s ours, and we’re fools not to use it,” Pickens said in an interview with CNN.
Pickens, an 83-year-old trained geologist who has been working in the energy field since 1951, said the United States could use domestic resources to replace the 5 million barrels of oil imported daily from OPEC, which makes up a quarter of America’s daily use of oil. The U.S. natural gas reserves amount to the equivalent of three times the oil reserves possessed by Saudi Arabia, he said.
“All you need now is leadership,” he said, lamenting that America “has no plan, we’ve gone 40 years with no energy plan. We’re the largest user of oil in the world.”
Pickens’ plan is encapsulated in the Natural Gas Act, a bill with Democratic and Republican sponsors, that would provide tax credits to replace diesel-fuel burning truck engines with natural gas-powered engines; users of natural gas as a transportation fuel would pay fees that would make up for the lost government revenue.
His firm, BP Capital, has a vested interest in energy policy since it invests in energy futures and the shares of firms in a variety of parts of the industry.
He said the worry over increasing fuel prices in the United States rests in part on a lack of understanding of the energy market. Energy prices in America are by far the cheapest in the world, with Europeans paying more than double to fuel their cars and with natural gas costing four or five times as much in Europe and China.
Promises of much lower fuel prices are a fantasy, Pickens said, since the world’s demand for oil is roughly equal to the amount that is being produced.
Pickens said the media should challenge GOP presidential candidate Newt Gingrich on his claim that if elected he can lower gasoline prices to $2.50 a gallon.
“You’ve got Donald Trump saying don’t pay OPEC $100 for the oil. Just tell ’em you’ll give them $50.
“Really? I go into Trump’s hotel, it’s $1,000 for a suite and I say I’m not going to give you that, I’ll give you $200. I’m on the street looking for another place to sleep. You can’t tell ’em I’ll give you $50 when the world market is $100. It just doesn’t work that way.”
He said he still favors wind energy, which was a key part of the “Pickens Plan” he put forth in 2008, but the price of natural gas is now so low that wind projects can’t compete economically, Pickens said.
With 70% of everyday oil use going to transportation fuel, he said the impact of putting a much cheaper fuel such as natural gas into the market will be to bring the price of gasoline and diesel down.
His current plan is focused on moving trucks to natural gas, but he said President Barack Obama could also urge consumers to commit that their next car will run on a domestically produced fuel, whether it’s natural gas or a plug-in electric vehicle.
A Wall Street Journal editorial Tuesday, headlined “Boone-Doggle,” called Pickens’ plan “the hottest energy fad in Washington” and criticized it for proposing subsidies for a natural gas industry that should compete on its own.
The start-up costs of relying on natural gas for transportation aren’t cheap. The cost of replacing truck engines is roughly $35,000 apiece, Pickens said. His own natural gas car costs thousands more than a gasoline-powered Honda Civic, and then there is the cost, which he said was $2,000, to install the natural gas fueling device for the car.
And U.S. consumers have only that one natural gas model from which to choose. In France, he said, there are 62 models that use natural gas. Pickens said American carmakers do produce such vehicles for overseas markets but have not seen a viable market in this country.
One of the concerns is that there isn’t a widespread network of service stations that could refuel a natural gas-powered car. Pickens said natural gas is available in pipes that go down every street and alley, so it could eventually be more accessible for refueling.
“Somebody says you couldn’t get in that car and drive to Chicago, well, you could — you’d have to do a little work to see where the stations are, but I’m not going to drive that car to Chicago, I’m going to drive that car from my house to my office.”
And if he is going on a trip to Chicago? “I’m going to get in my wife’s car. She has a bigger car. Women always have bigger cars than men do.”