The Unintended Consequences Of Government Programs
The administration is now wanting to roll out another of its supposed jobs programs using infrastructure as the excuse. The latest $50 billion payoff to unions and government employees is not only not going to provide any jobs in the short run, but it will just add to the deficit. More importantly it will hurt commercial real estate development. The $50 billion is available inside the existing so called stimulus bill by just moving out some of the waste that was nothing more than pork used by Pelosi to reward Congressmen who voted for healthcare and other of her pet programs. There is way more than $50 billion of unspent funds allocated to those things. Second, the original stimulus was billed as shovel ready programs. Of course they were not shovel ready, but if the statement by Obama and Pelosi were true then there would be another $50 billion of “shovel ready” projects just awaiting funding.
Here is the problem even if there were programs ready to go. While the country does badly need a major expenditure on infrastructure upgrade including roads, rail, airport and water, just throwing money around is not the answer. There seems to be no real strategic plan by the federal government to either prioritize, nor to integrate the projects since many go across state lines. So instead of something resembling the interstate highway program of the fifties, which did great things for the country, we get a lot of little local fix it spending by Congressmen in their district regardless of the bigger picture.
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Joel Ross
Joel Ross began his career in Wall St as an investment banker in 1965, handling corporate advisory matters for a variety of clients. During the seventies he was CEO of North American operations for a UK based conglomerate, and sat on the parent company board. In 1981, he began his own firm handling leveraged buyouts, investment banking and real estate financing. In 1984 Ross began providing investment banking services and arranging financing for real estate transactions with his own firm, Ross Properties, Inc. In 1993 Ross and a partner, Lexington Mortgage, created the first Wall St hotel CMBS program in conjunction with Nomura. They went on to develop a similar CMBS program for another major Wall St investment bank and for five leading hotel companies. Lexington, in partnership with Mr. Ross established a hotel mortgage bank table funded by an investment bank, and making all CMBS hotel loans on their behalf. In 1999 he formed Citadel Realty Advisors as a successor to Ross Properties Corp., focusing on real estate investment banking in the US, UK and Paris. He has closed over $3.0 billion of financings for office, hotel, retail, land and multifamily projects. Ross is also a founder of Market Street Investors, a brownfield land development company, and has been involved in the acquisition of notes on defaulted loans and various REO assets in conjunction with several major investors. Ross was an adjunct professor in the graduate program at the NYU Hotel School. He is a member of Urban Land Institute and was a member of the leadership of his ULI council. In 1999, he conceived and co-authored with PricewaterhouseCoopers, the Hotel Mortgage Performance Report, a major study of hotel mortgage default rates.
