Archive for category Vail Valley Business
I just returned from the NAR Convention in Orlando. I was representing the VBR in my role as Chair-Elect. I felt the overall tone was much more optimistic than last year. There are many areas in the country where sales are significantly up year-over-year and these markets are also seeing significant price increases. As you all know, we tend to trail the pack but hopefully we will see some similar activity in the Valley.
Here are some bullet points from the presentation by Lawrence Yun, Chief Economist for NAR. He was relatively optimistic regarding the national housing market but doesn’t seem to have much confidence in the government in making the right moves to address inflation, which he considers inevitable.
- He sees no inflation 2013 but 4 to 6% annually by 2015. The key factors that are driving inflation higher are:
- Rents are going up across the country making home purchases much more attractive but also negatively impacting inflation.
- The Fed is more concerned with unemployment than inflation.
- The Fed’s Qualitative easing program will cause inflation (historically, whenever a country prints money, inflation rises).
- Budget deficits will cause inflation because more parties are competing in the lending marketplace.
- Inflation will cause higher borrowing costs for the government increasing the deficit, which in turn will increase inflation, which will increase the deficit…………………..
- Inflation will increase mortgage rates. They will probably stay low for 3-6 more months but they should start to increase by the middle of next year.
- Home prices will appreciate 15% over next 3 years nationally.
- The Unemployment rate may have dropped slightly over the past few years but the Employment rate (the actual number of employed persons) has remained flat since 2009.
- The US will need to create 250,000/mo for 8 years to get back to where we were before the great recession.
- There will be more unequal wealth distribution because home prices are now appreciating and renters will be left behind.
Last Monday we learned that Brookfield’s Prudential and Real Living franchises were purchased by Warren Buffet’s Berkshire Hathaway HomeServices group. This represents a great opportunity for Prudential Colorado Properties and also speaks to the confidence Buffet has not only in the real estate industry but also the Prudential real estate agents and brokers that will represent his company’s name. Not many companies under the Berkshire Hathaway umbrella actually use the name – that trust to represent one of the most-admired companies in the world is a sign that they are deeply committed to the brand and the success.
While there is much work to do before the formal launch, we know that this is a great day to be a part of the Prudential network. The new Berkshire Hathaway HomeServices brand is poised to be a game-changer and a mega-franchise that should thrive on a national and global level. The brand will bring innovation, technology and the best practices of today and in the future. The strength, integrity and trust of Berkshire Hathaway, combined with the market prowess of the Prudential network will create a partnership unmatched in the real estate industry today.
It’s a great time to be in real estate.
Click on the link to see the 3rd quarter housing stats for Colorado’s Mountain Region. This region includes Vail, Telluride, Steamboat Springs, Aspen, Glenwood Springs, Grand County, Summit County, and Gunnison. I will have stats for Vail in the next few weeks.
The statistics point to a continuing recovery, although slower than we would all like. Under contract properties and sales are up, prices and inventory are down. The Vail Valley is seeing similar trends.
By George Friedman
The U.S. presidential election will be held a week from today, and if the polls are correct, the outcome will be extraordinarily close. Many say that the country has never been as deeply divided. In discussing the debates last week, I noted how this year’s campaign is far from the most bitter and vitriolic. It might therefore be useful also to consider that while the electorate at the moment appears evenly and deeply divided, unlike what many say, that does not reveal deep divisions in our society — unless our society has always been deeply divided.
Since 1820, the last year an uncontested election was held, most presidential elections have been extremely close. Lyndon B. Johnson received the largest percentage of votes any president has ever had in 1964, taking 61.5 percent of the vote. Three other presidents broke the 60 percent mark: Warren G. Harding in 1920, Franklin D. Roosevelt in 1936 and Richard Nixon in 1972.
Nine elections saw a candidate win between 55 and 60 percent of the vote: Andrew Jackson, Abraham Lincoln, Ulysses S. Grant, Theodore Roosevelt, Herbert Hoover, Franklin D. Roosevelt, Dwight D. Eisenhower and Ronald Reagan. Only Eisenhower broke 55 percent twice. Candidates who received less than 50 percent of the vote won 18 presidential elections. These included Lincoln in his first election, Woodrow Wilson in both elections, Harry Truman, John F. Kennedy, Nixon in his first election and Bill Clinton in both his elections.
From 1824-2008, 13 elections ended in someone obtaining more than 55 percent but never more than 61 percent of the vote. Eighteen elections ended with the president receiving less than 50 percent of the vote. The remaining 16 elections ended with the winner receiving between 50-55 percent of the vote, in many cases barely above the 50 percent mark — meaning almost half the country voted for someone else. The United States not only always has had deeply divided elections, but in many cases, minority presidents. Interestingly, of the four presidents who won more than 60 percent of the vote, three are not remembered favorably: Harding, Johnson and Nixon.
Three observations follow. First, for almost 200 years the electoral process has consistently produced a division in the country never greater than 60-40 and heavily tending toward a much narrower margin. Second, when third parties had a significant impact on the election, winners won five times with 45 percent of the vote or less. Third, in 26 of the U.S. presidential elections, the winner received less than 52 percent of the vote.
Even in the most one-sided elections, nearly 40 percent of voters voted against the winner. The most popular presidents still had 40 percent of votes cast against them. All other elections took place with more than 40 percent opposition. The consistency here is striking. Even in the most extreme cases of national crisis and a weak opponent, it was impossible to rise above just over 60 percent. The built-in opposition of 40 percent, regardless of circumstances or party, has therefore persisted for almost two centuries. But except in the case of the 1860 election, the deep division did not lead to a threat to the regime. On the contrary, the regime has flourished — again, 1860 excepted — in spite of these persistent divisions.
The Politically Indifferent
Why then is the United States so deeply and persistently divided and why does this division rarely lead to unrest, let alone regime change? Let us consider this seeming paradox in light of another fact, namely, that a substantial portion of the electorate doesn’t vote at all. This fact frequently is noted, usually as a sign of a decline in civic virtue. But let’s consider it another way.
First, let’s think of it mechanically. The United States is one of the few countries that has not made Election Day a national holiday or held its presidential elections on a weekend. That means that there is work and school on Election Day in the United States. In the face of the tasks of getting the kids off to school, getting to work, picking up the kids on the way home — all while fighting traffic — and then getting dinner on the table, the urgency of exercising the franchise pales. It should therefore be no surprise that older people are more likely to vote.
Low voter turnout could also indicate alienation from the system. But alienation sufficient to explain low voter turnout should have generated more unrest over two centuries. When genuine alienation was present, as in 1860, voter turnout rose and violence followed. Other than that, unrest hasn’t followed presidential elections. To me, that so many people don’t vote does not indicate widespread alienation as much as indifference: The outcome of the election is simply less important to many than picking up the kids from piano lessons.
It is equally plausible that low voter turnout indicates voter satisfaction with both candidates. Some have noted that Barack Obama and Mitt Romney sound less different than they portray themselves as being. Some voters might figure there is not much difference between the two and that they can therefore live with either in office.
Another explanation is that some voters feel indifferent to the president and politics in general. They don’t abstain because they are alienated from the system but because they understand the system as being designed such that outcomes don’t matter. The Founding Fathers’ constitutional system leaves the president remarkably weak. In light of this, while politically attentive people might care who is elected, the politically indifferent might have a much shrewder evaluation of the nature of the presidency.
The Role of Ideologues
The United States always has had ideologues who have viewed political parties as vehicles for expressing ideologies and reshaping the country. While the ideologies have changed since Federalists faced off against Democratic-Republicans, an ideological divide always has separated the two main parties. At the same time, the ranks of the true ideologues — those who would prefer to lose elections to winning with a platform that ran counter to their principles — were relatively sparse. The majority of any party was never as ideologically committed as the ideologues. A Whig might have thought of himself as a member of the Whig Party when he thought of himself in political terms at all, but most of the time he did not think of himself as political. Politics were marginal to his identity, and while he might tend to vote Whig, as one moved to less committed elements of the party, Whigs could easily switch sides.
The four elections in which presidents received 60 percent or more were all ideological and occurred at times of crisis: Johnson in 1964 defeated Barry Goldwater, a highly ideological candidate, in the aftermath of the Kennedy assassination; Roosevelt defeated Alf Landon, an anti-Roosevelt ideologue, during the depths of the Depression; Nixon defeated George McGovern, an anti-war ideologue, during the era of the Vietnam War and the anti-war challenge; and Warren G. Harding won in the wake of World War I and the latter debacles of the Wilson administration and its ideology.
Crisis tends to create the most extreme expressions of hostility to a challenging ideology and creates the broadest coalition possible, 60 percent. Meanwhile, 40 percent remain in opposition to the majority under any circumstances. To put it somewhat differently — and now we get to the most significant point — about 40 percent of the voting public cannot be persuaded to shift from their party under any circumstances, while about 20 percent are either persuadable or represent an unrooted voter who shifts from election to election.
The 60-40 break occurs rarely, when the ideological bent rallies the core and the national crisis allows one party to attract a larger block than normal to halt the less popular ideology. But this is the extreme of American politics; the normal election is much narrower.
This is because the ideologues in the parties fail to draw in the center. The weaker party members remain in their party’s orbit and the 20 percent undecided distribute themselves fairly randomly, depending on their degree of indifference, so that the final vote depends on no more than a few percentage points shifting one way or another.
This is not a sign of massive divisions. Whereas the 60-40 elections are the moments of deepest political tension in which one side draws the center to it almost unanimously, in other elections — particularly the large number in which the winner receives less that 55 percent of the vote (meaning that a 5 percent shift would change the outcome) — the election is an election of relative indifference.
This is certainly not how ideologues view the election. For them, it is a struggle between light and darkness. Nor is it how the media and commentators view it. For them, it is always an election full of meaning. In reality, most elections are little remembered and decide little. Seemingly apocalyptic struggles that produce narrow margins do not represent a deeply divided country. The electoral division doesn’t translate into passion for most of the voters, but into relative indifference with the recognition that here is another election “full of sound and fury, signifying nothing.”
The fact that nearly 50 percent of the public chooses not to vote is our tipoff about the public’s view of elections. That segment of the public simply doesn’t care much about the outcome. The politically committed regard these people as unenlightened fools. In reality, perhaps these people know that the election really isn’t nearly as important as the ideologues, media and professional politicians think it is, so they stay home.
Others vote, of course, but hardly with the intensity of the ideologues. Things the ideologues find outrageously trivial can sway the less committed. Such voters think of politics in a very different way than the ideologues do. They think of it as something that doesn’t define their lives or the republic. They think of politicians as fairly indistinguishable, and they are aware that the ideological passions will melt in the face of presidential responsibility. And while they care a bit more than those who stay home, they usually do not care all that much more.
The United States has elected presidents with the narrowest of margins and presidents who had far less than a majority. In many countries, this might reveal deep divisions leading to social unrest. It doesn’t mean this in the United States because while the division can be measured, it isn’t very deep and by most, it will hardly be remembered.
The polls say the election will be very close. If that is true, someone will be selected late at night after Ohio makes up its mind. The passionate on the losing side will charge fraud and election stealing. The rest of the country will get up the next day and go back to work just as they did four years ago, and the republic will go on.
- Mark Harden New Media Editor- Denver Business Journal
Cordillera Golf Club LLC, an Eagle County golf and residential complex that filed for Chapter 11 bankruptcy protection in June, said late Wednesday that it had “completed successful mediation” in a legal battle with property owners and creditors.
Cordillera — which operates as the Club at Cordillera in Edwards, near Beaver Creek — also said that it has agreed to be sold by the end of the year. The settlement is subject to court approval, it said.
In a statement, Cordillera said it “has completed successful mediation with all major parties [in the dispute] including the Cordillera Property Owners Association (CPOA), the Cordillera Transition Committee (CTC) and the Official Creditors Committee (OCC).”
The mediation, it said, “has provided a framework for resolution of suits among membership and ownership over financial matters, dues structures, ownership rights and the future of the club facilities of Cordillera.”
Those facilities include three golf courses and a teaching course as well as an athletic club and three clubhouses with restaurants.
Cordillera has some 1,100 homeowners, several hundred of whom had joined in a class-action lawsuit against the club.
The dispute did not involve the adjacent Lodge and Spa at Cordillera, which is separately owned.
“I am happy that we were able to come to a resolution of disputes that have affected our homeowners, club members, the community and my family for more than two years,” club owner David Wilhelm said in the statement. “It’s time to move on in the most positive way.”
Under the settlement agreement, “the parties agreed that the club will be sold prior to year end 2012,” Cordillera’s statement said.
“It is expected that all cash bids for the operating assets for the club will be received by Dec. 3,” the statement added. “In the event of multiple bids, an auction will be held on Dec. 10 to select the highest and best bid. In the auction process, Cordillera will likely be sold as a single asset. The sale will close before Dec. 28.”
Cordillera in June filed for Chapter 11 protection after failing to reach “a mutually acceptable agreement with certain stakeholders in the community.”
The filing came in the wake of dueling lawsuits involving property owners and Wilhelm, with one issue being a decision not to open some of the club’s golf courses last year, according to Vail Daily coverage of the issue.
The Chapter 11 filing (download here) listed both assets and liabilities ranging from $10 million to $50 million.
By John Mossman
The Denver Post
The Cordillera Golf Club bankruptcy case, shifted from Delaware to Colorado last week, is complicated by litigation between owner David Wilhelm and 610 club members that has gone on for more than a year.
Wilhelm and his management company filed for Chapter 11 bankruptcy protection June 26 in U.S. Bankruptcy Court in Delaware, where the company is incorporated. The filing came on the same day a $12.7 million loan was due to Alpine Bank of Colorado.
“The (Chapter 11) process will allow the club to operate its ongoing business while it resolves the outstanding conflicts and prepares a plan of reorganization to emerge a healthier company,” Wilhelm said.
The bankruptcy and litigation involve only the Club at Cordillera, not the Lodge and Spa at Cordillera, which is a separate entity and remains open for business.
For the second year in a row, Cordillera’s Valley golf course is the only one of the four Cordillera courses open.
One of the largest exclusive golf communities in North America, Cordillera covers 12 square miles in the heart of Colorado’s Vail Valley near Edwards. It consists of three 18-hole courses — designed by Jack Nicklaus, Hale Irwin and Tom Fazio — and a short course designed by Dave Pelz.
Last spring, Wilhelm promised to open all four golf courses but opened only Fazio’s Valley course and laid off dozens of workers.
Current and former club members sued him in a class-action lawsuit, saying that if he was going to open only 25 percent of the courses, they wanted 75 percent of their dues back.
Members say the Wilhelm Family Partnership collected $8 million in membership dues last year and paid itself almost $1 million while failing to open three Cordillera golf courses, thus violating the membership agreement.
The lawsuit asks that the 2011 dues be repaid and that all of the membership deposits be refunded. Such a payout could total $108 million.
Wilhelm then sued the members for $96 million, claiming they were trying to drive him out so they could take over.
Last week, the case was transferred to Judge A. Bruce Campbell in Denver’s federal bankruptcy court.
Chris Celentino, a bankruptcy attorney representing Cordillera, said Alpine Bank has agreed to extend credit financing through the summer season, allowing “more time to work out a long-term solution that will enable the club to restore itself.”
In a related matter, District Court Judge Frederick Gannett of Eagle postponed a contempt-of-court hearing against Wilhelm based on his failure to provide requested information.
Gannett told the Vail Daily on Wednesday that if Wilhelm’s attorneys want him to recuse himself from the case because of alleged bias, he would do so but only if appropriate legal documents are filed. Gannett is a member of another golf club also in bankrupcty.
John Mossman: 303-954-1479, firstname.lastname@example.org
Vail, CO Colorado
Judge Christopher S. Sontchi punted the case to Colorado, where it landed before Judge Bruce Campbell in Denver’s federal bankruptcy court.
“The judge made the determination that this is where Cordillera’s past, present and future members are, so this where the case needs to be,” said Cheryl Foley, one of the lead plaintiffs in the class-action lawsuit against Wilhelm and the Wilhelm Family Partnership.
Campbell held a status conference Friday afternoon to figure out what he has in front of him.
“Everything filed in Delaware has to be moved here,” Foley said.
Wilhelm’s Cordillera Golf Club LLC filed for Chapter 11 bankruptcy protection last month in Delaware, where the company is chartered.
“The Delaware judge’s ruling was meant to create an opportunity for meaningful discussions toward resolution between the club ownership group and its adversaries,” said Chris Celentino, the bankruptcy attorney representing Cordillera Golf Club. “I think the impetus is to encourage the debtor’s adversaries to take a more positive view toward working with the club to reach a productive resolution.”
In a related criminal matter, District Court Judge Frederick W. Gannett postponed Friday’s contempt of court hearing against Wilhelm. The hearing is tentatively set for Aug. 6 to 8.
Celentino and others with Cordillera have said the litigation against Wilhelm stems from a small and vocal minority.
But according to court documents, 623 people are eligible to be part of the group suing Wilhelm; 610 are officially in, and 13 have opted out.
It was 609 until Thursday, when one more person joined the class-action lawsuit.
“That’s not my definition of a small group of people. Characterizing this as a small group of unhappy members is delusional,” Foley said.
The Delaware bankruptcy trustee appointed a committee representing the unsecured creditors. That committee includes six club members, Foley among them, and two people from trade organizations.
“The bank and debtor have agreed to an interim financing agreement to provide more time to work out a long-term solution that will enable the club to restore itself,” Celentino said.
Wilhelm and the Wilhelm Family Partnership filed bankruptcy the day a $12.7 million loan was due to Alpine Bank. The bank has agreed to extend credit through the summer.
The Wilhelms and some Cordillera Club members have been locked in litigation for more than a year.
Last spring, Wilhelm promised to open all four Cordillera golf courses but opened only the Valley course and laid off dozens of workers. Some of the members — now 610, to be exact — sued him in a class-action lawsuit saying opening only the one course violated the membership agreement.
Their lawsuit asks that the $8 million in 2011 dues be repaid and that all the membership deposits be refunded — that could total $108 million.
Wilhelm sued them for $96 million, claiming they were trying to drive him out so they could take over.