Vote Count Percent JOSE LALAS 13,463 22.71% CATHY L. SCIORTINO 12,349 20.83% MICHELL SKIPWORTH 10,058 16.96% PAT SCOTT 8,553 14.43% MAGGIE E. LITTLE 8,077 13.62% BILL NEWBERRY 6,787 11.45% Total 59,287 100.00%
Corona City Council Member 45/66 68.18%
Vote Count Percent JASON SCOTT 8,813 29.48% STEVE NOLAN 8,723 29.18% BAXTER MILLER 7,072 23.66% LOUIS DAVIS 2,791 9.34% TIA MARIA MAGEE 2,492 8.34% Total 29,891 100.00%
The following statewide proposition election results have been reported by the California Secretary of State. With 5,706(22.4%) of 25,429 precincts reporting:
Propositions Proposition 1A - Safe, Reliable High-Speed Train Bond Act Yes 1,489,236 48.5% No 1,578,868 51.5%
Proposition 2 - Standards for Confining Farm Animals Yes 1,959,649 62.1% No 1,199,254 37.9%
Proposition 3 - Children's Hospital Bond Act. Grant Program Yes 1,499,862 48.4% No 1,598,304 51.6%
Proposition 4 - Parent Notification Before Terminating Minor's Pregnancy Yes 1,565,518 49.7% No 1,582,677 50.3%
Proposition 5 - Nonviolent Drug Offense. Sentencing, Parole, Rehab Yes 1,129,236 36.2% No 1,987,451 63.8%
Proposition 6 - Police, Law Enforcement Funding. Criminal Laws Yes 942,673 30.8% No 2,112,462 69.2%
Proposition 7 - Renewable Energy Generation Yes 1,055,436 33.7% No 2,067,541 66.3%
Proposition 8 - Eliminates Right of Same-Sex Couples to Marry Yes 1,691,250 54.6% No 1,411,329 45.4%
Proposition 9 - Criminal Justice System. Victims' Rights. Parole Yes 1,707,659 55.5% No 1,370,023 44.5%
Proposition 10 - Alternative Fuel Vehicles and Renewable Energy Bonds Yes 1,142,290 37.3% No 1,914,381 62.7%
Proposition 11 - Redistricting Yes 1,612,580 54.0% No 1,378,419 46.0%
Proposition 12 - Veterans' Bond Yes 1,873,636 61.3% No 1,185,973 38.7%
Obama wins Connecticut, Delaware, District of Columbia, Illinois, Maine, Maryland, Massachusetts, New Jersey, according to the Associated Press. McCain wins Oklahoma, Tennessee, South Carolina.
What a country we have here in the US. Not only do you have the privilege of voting tomorrow in a safe manner of a true democracy, but you can get free stuff just because you went to the polling place and pulled that lever for your candidate of choice for this great country. Can this be true? Just for casting a vote? Yes it is, so read on my voting friend.
Vote and you can get Free Food
Krispy Kreme is offering a free donut in the shape of a star for your vote tomorrow. It even has red, white and blue sprinkles. So keep that blood sugar up tomorrow and show them your sticker that says you voted and get your free donut!
And that ice cream specialty retailer, Ben & Jerry's is offering to the American voter a free scoop of ice cream on Tuesday but only from 5 p.m. to 8 pm. All flavors are available for you to choose from.
Chick-fil-A, will be giving away a chicken sandwich to all you voters out there that braved the long lines to vote. Anytime between 6:00 a.m. and 10:00 p.m. on Wednesday you just bring in any campaign sign from the election and exchange it for your free chicken sandwich, only one per customer. They have noted that "all voter signs will be returned to the appropriate campaign representative."
Vote and Get Free Music
You can download for free the Bob Dylan song "I Shall be Released" as performed by Wilco with Fleet Foxes. All you have to do is check a box at the website that says "I pledge to vote in the 2008 election" and the sond is yours for free.
Vote and get Free Coffee
And not to be outdone for the day that the American voter goes to the polls and casts their choice for the leader of the free world, Starbucks, the coffee officiates, are giving away a free tall cup of brewed coffee anytime tomorrow if you show your "I voted" sticker.
Vote TODAY, November 4th, and visit Starbucks at The Promenade Shops at Dos Lagos (as well as other participating Starbucks) for a FREE Tall Brewed Coffee.
More job losses, mounting foreclosures and dwindling sales tax revenues keep smashing into the Inland Empire's economy.
How long will it last?
Think 2011 -- coupled with a slow, painstaking recovery that might gain full speed by 2013.
That's what was discussed during the 2008 Inland Empire Economic Forecast Conference held at the National Orange Show Events Center in San Bernardino on Wednesday.
Six months ago,several experts across Southern California forecasted grim scenarios into the end of 2009, but the financial monster gripping Wall Street is pushing those projections much further into the future.
The bursting real-estate bubble will continue feeding thousands of foreclosures into the Inland Empire's housing market for another two or three years, according to Christopher Thornberg, founder of San Rafael-based Beacon Economics.
"The wealth is disappearing," he said about inflated home prices. "That money was never there in the first place."
Never mind those plunging prices homeowners have suffered since 2006 -- Thornberg is predicting residential real-estate owners nationwide will collectively lose another $15 trillion over next year.
That's good for home shoppers sitting on the sidelines, says Johannes Moenius, business and economics professor at the University of Redlands.
"But the problem is, (those homes) are going to be in destabilized neighborhoods," he said.
Financially secure bargain hunters are picking up cheap deals on one side of the street, while cash-strapped mortgage borrowers on the other side barely hang on to their homes.
The biggest Inland Empire price drops are happening in lower-income neighborhoods and high-unemployment areas -- regions where home prices jumped four times their 1998 values, Moenius said.
He's forecasting home prices will drop through the end of 2008, then somewhat stabilize in 2009, then drop again in 2010.
Thornberg said the nation's largest banks will continue to feel the impact from their massive real-estate losses.
Experts say it's a key factor in why lenders are hoarding the liquidity injected into them from the Treasury Department's $700 billion bailout package. Thornberg says they have $65 billion in "excess reserves" right now.
Even if banks immediately put that money into play, the economy is starting its descent into a deep recession, Thornberg said.
"It's not a depression, but a rough ride," he said.
That means dire consequences for California's budget and tax revenue for local cities, according to Thornberg's sidekick, Brad Kemp, the director of regional research at Beacon.
At their peaks in 2006 and 2007, property tax revenue jumped 23 percent in Riverside County and 20 percent in San Bernardino County, according to the forecast report.
Nowadays, property tax revenue is expected to grow 5 percent in San Bernardino County and a mere 1.5 percent in Riverside County for the 2008-09 fiscal budget.
Taxable sales are falling, too, the report says. Don't expect them to bottom out until early 2010.
Kemp says he expects more stimulus initiatives by the Federal Reserve or Treasury Department that will ultimately trickle down to the Inland Empire's battered real-estate market.
As the federal government keeps propping up a financial system beleaguered by losses, it's trying to spread out the economic pain over a longer period of time so the entire economy doesn't get hit all at once, Kemp said.
"It's a matter of the fallout being long and shallow versus short and sharp," Kemp said. It's also a matter of confidence. The federal government is waging a psychological war on consumer pessimism about the economy, which usually means less spending on goods and services.
Given that fact, coupled with the Inland Empire's gloomy economic forecast, the area's fundamentals for economic growth haven't totally disappeared.
"The fundamentals that helped (this area) grow 27 percent over seven years are still here," Kemp said. "This is the region of expansion for California."
University of Redlands President Stuart Dorsey, who is a former chief economist for the U.S. Senate Committee on Finance, said the government's intervention in the financial markets have a "limited ability" to prop up the system.
Recently, government and business leaders from San Bernardino and Riverside counties decided to keep pursuing a proposal that would open the door for Los Angeles-area investors and Inland Empire cities to buy thousands of troubled mortgages behind the region's economic problems.
They're proposing a public-private partnership between cities and investors, which would buy these distressed mortgages from the Treasury Department and shut out investors from outside the Los Angeles region.
Dorsey said he thinks the plan will help "certain areas" across the Inland Empire.
But no matter what, local housing prices will continue to fall, "and they should," he said.
"What's going to happen in the next few years is important," Dorsey said about the two-county region. "How we come out of this -- how we're steered and in what direction -- will determine how we go into the next couple of decades."
Proposition 1A: High-Speed Passenger Train Bond Act.
WHAT A YES or No VOTE MEANS
A YES vote would mean that California could sell $9.95 billion of general obligation bonds to partially fund a high-speed passenger train system. A NO vote would mean that California could not sell the bonds.
SUPPORTERS SAY
High-speed rail will be a convenient and affordable alternative to high gas costs, highway congestion, and expensive and declining airline service. Prop. 1A will create nearly 160,000 construction-related jobs and 450,000 permanent jobs in tourism and related sectors. High-speed rail will reduce our reliance on foreign oil and improve the environment by cutting greenhouse gases and using less energy.
OPPONENTS SAY
Prop. 1A is a boondoggle that will cost taxpayers billions while adding to our bond debt at a time of budget crisis and cuts in services. Californians’ most important traffic problems involve getting to work, not traveling between major cities. There is no accountability as to how the bond proceeds will be spent, and no assurance that other funds will be available.
Proposition 2: Standards for Confining Farm Animals.
WHAT A YES or No VOTE MEANS
A YES vote means that farm enclosures for certain hens, calves and pigs must provide enough room for the animal to lie down, stand up, and move about. A NO vote means that current laws relating to these animals will remain unchanged.
SUPPORTERS SAY
It will improve food safety by outlawing overcrowded conditions that foster the spread of diseases among farm animals. This is a moderate, reasonable reform measure that gives the industry ample time to phase it in.
OPPONENTS SAY
This measure would drive many egg producers out of California, resulting in lost jobs and tax revenue. Prop. 2 endangers public health by effectively forcing hens outdoors, where they may contact wild and migratory birds carrying diseases.
Proposition 3: Children’s Hospital Bond Act. Grant Program.
WHAT A YES or No VOTE MEANS
A YES vote means the state could sell $980 million in bonds for capital improvements for children’s hospitals. A NO vote means the state could not sell the bonds.
SUPPORTERS SAY
Children’s hospitals provide essential treatment and need these funds to meet increasing demand for their services. Children’s hospitals could buy the latest medical technology and equipment and provide more beds to care for sick children.
OPPONENTS SAY
In tough economic times, we can’t afford new spending and bond debt that will necessitate higher taxes or reduced spending on other programs. Prop. 3 is unnecessary because unspent Prop. 61 funds are still available.
Proposition 4: Waiting Period and Parental Notification before Termination of a Minor’s Pregnancy.
WHAT A YES or No VOTE MEANS
A YES vote would mean that California could sell $9.95 billion of general obligation bonds to partially fund a high-speed passenger train system. A NO vote would mean that California could not sell the bonds.
SUPPORTERS SAY
High-speed rail will be a convenient and affordable alternative to high gas costs, highway congestion, and expensive and declining airline service. Prop. 1A will create nearly 160,000 construction-related jobs and 450,000 permanent jobs in tourism and related sectors. High-speed rail will reduce our reliance on foreign oil and improve the environment by cutting greenhouse gases and using less energy.
OPPONENTS SAY
Prop. 1A is a boondoggle that will cost taxpayers billions while adding to our bond debt at a time of budget crisis and cuts in services. Californians’ most important traffic problems involve getting to work, not traveling between major cities. There is no accountability as to how the bond proceeds will be spent, and no assurance that other funds will be available.
Proposition 5: Nonviolent Drug Offenses. Sentencing, Parole and Rehabilitation.
WHAT A YES or No VOTE MEANS
A YES vote means drug treatment diversion programs will be revised and expanded, and sentencing and parole changes would shorten some sentences and parole periods and increase others, reduce penalties for marijuana possession, and expand treatment and rehabilitation for inmates and parolees. A NO vote means drug treatment diversion programs would remain the same, and current laws relating to parole, prison custody credits, marijuana possession penalties, and rehabilitation and treatment for inmates and parolees would not change.
SUPPORTERS SAY
Treatment and rehabilitation for minor drug offenses will reduce recidivism and pay for themselves by reducing incarceration and prison construction costs. Treating violent and nonviolent offenders differently makes sense. Judges can send nonviolent offenders to treatment while maintaining accountability, building on the successful approach of Prop. 36. Effective rehabilitation programs will better prepare the 85 to 90 percent of inmates who are returned to society to become law-abiding, productive citizens.
OPPONENTS SAY
Dumping 45,000 criminals out of prisons and into our communities will not “save” money on the prison system, but will increase crime. It weakens drug treatment programs by reducing court authority to incarcerate offenders who violate probation, parole, or drug treatment program rules. This measure isn’t about keeping minor first-time drug offenders out of prison, because in reality such offenders never go to prison. Meanwhile, it puts dangerous criminals back on the streets sooner.
Proposition 6: Police and Law Enforcement Funding. Criminal Penalties and Laws.
WHAT A YES or No VOTE MEANS
A YES vote means that changes to the criminal justice system proposed by this measure would go into effect, including increased spending on law enforcement and criminal justice programs, addition of new crimes and penalties, and changes to juvenile law. A NO vote means that the changes proposed in this measure would not go into effect and the current law and procedures would remain the same. SUPPORTERS SAY
Prop. 6 will prioritize 1 percent of the state’s budget for local law enforcement without raising taxes, keeping our children safe while fully funding education. It will give local government the resources it needs to win the war on gangs and crime by increasing penalties, creating new felonies and misdemeanors, and giving law enforcement new legal powers.
OPPONENTS SAY
Prop. 6 will spend $1 billion in one year on expanded programs without providing any new funding, taking money from education, health care, and proven public safety efforts. Crime and gang problems need a coordinated balanced approach that includes community service workers, mental health, and drug and alcohol services along with tough enforcement of the law.
Proposition 7: Renewable Energy Generation.
WHAT A YES or No VOTE MEANS
A YES vote means the state would require utility companies to increase the percentage of electricity generated from renewable sources of energy to 20 percent by 2010 and 50 percent by 2025, and make other changes intended in increase renewable energy use. A NO vote means the state’s requirements for renewable energy generation would remain the same.
SUPPORTERS SAY
This is a balanced solution, written and reviewed by energy and environmental experts, to cut the rising cost of energy and reduce global warming. Prop. 7 will make California a world leader in clean power, creating over 370,000 new high-wage jobs and growing a strong market for solar and renewable energy businesses, as well as protecting the environment. The measure will protect consumers by limiting rate increases to 3 percent and prohibiting utilities that fail to meet renewable energy standards from passing penalties on to consumers.
OPPONENTS SAY
Prop. 7 would hurt progress in increasing use of renewable power by shutting out the small providers that currently represent nearly 60 percent of California’s renewable energy contracts. It will increase costs to consumers by allowing power companies to charge 10 percent above the market price, while providing no mechanism for limiting cost increases to the 3 percent per year it specifies. The measure adds no new renewable energy sources. Simply raising required percentages of renewable energy each year will not create new sources for that energy.
Proposition 8: Eliminates Right of Same-Sex Couples to Marry.
WHAT A YES or No VOTE MEANS
A YES vote means that the California Constitution will specify that only marriage between a man and a woman is valid or recognized in California, eliminating the right of same-sex couples to marry. A NO vote means that same-sex marriages will continue to be valid and recognized in California.
SUPPORTERS SAY
This measure will restore the sanctity of traditional marriage, which can only be between a man and a woman, as affirmed by the sixty-one percent of California voters who supported Proposition 22. While affirming traditional marriage, Prop. 8 does not eliminate any of the rights, privileges or benefits given to same-sex registered domestic partners. Same-sex marriage should only be legalized through a vote of the people, and not by the flawed reasoning of four activist judges in San Francisco.
OPPONENTS SAY
Allowing same-sex couples to marry does not diminish the sanctity of traditional marriage, but extends the rights and responsibilities of marriage to more people. Domestic partnerships are not afforded the same dignity and respect as marriage, and partners don’t have the same rights as spouses in many situations, including medical emergencies and when life-and-death decisions are made. The California Constitution guarantees equal protection under the law to everyone, and should not be amended to single out one group for different treatment.
A YES vote means that the legal rights of crime victims, including the right to restitution, will be expanded, early release of inmates will be restricted, and changes will be made in the procedures for granting and revoking parole. A NO vote means that the rights of crime victims will remain as they are now in the state Constitution and in state law, and parole.
SUPPORTERS SAY
Prop. 9 guarantees crime victims’ rights to justice and due process, putting those rights in the state Constitution. It protects crime victims by requiring that the safety of victims and their families be considered in bail decisions and by mandating that victims be notified when offenders are released. Prop. 9 ensures that criminals will serve their full sentences and pay restitution to their victims, and it eliminates unnecessary parole hearings for dangerous criminals who have virtually no chance of release.
OPPONENTS SAY
The state Constitution is not the appropriate place for a detailed listing of victims’ rights; they belong in state statutes. Prop. 9 is misleading and duplicative. Many of its provisions are already the law, such as the victim’s right to be heard throughout the legal process. California is already strict on parole—for the past 20 years, the annual parole rate for inmates convicted of second degree murder or manslaughter has been less than 1 percent of those eligible.
Proposition 10: Alternative Fuel Vehicles and Renewable Energy. Bonds.
WHAT A YES or No VOTE MEANS
A YES vote means the state could issue $5 billion in bonds to provide incentives to purchase high fuel economy and alternative fuel vehicles and to fund research on clean fuel alternatives. A NO vote means the state could not issue $5 billion in bonds to provide incentives for purchase of high fuel economy and alternative fuel vehicle and to fund research on clean fuel alternatives.
SUPPORTERS SAY
Prop. 10 will reduce our dependence on foreign oil, develop new clean energy industries in California, and create thousands of well-paying jobs. This measure will give consumers alternatives to high priced gasoline by giving them the choice to buy vehicles that run on cleaner fuels or on electricity from renewable sources. It will create cleaner air and a healthier future by replacing more than 28,000 diesel trucks with alternative fuel trucks and reducing greenhouse gases.
OPPONENTS SAY
Prop. 10 will cost taxpayers nearly $10 billion that could be used for needed programs and services, while duplicating existing clean fuel and alternative energy programs. The measure will primarily subsidize trucks and large vehicles using natural gas, benefiting natural gas producers and driving up prices. It does not require air quality improvements or reductions in greenhouse gas emissions, and only a small portion of the funds could be used to replace diesel vehicles, the only health benefit proponents claim.
Proposition 11: Redistricting.
WHAT A YES or No VOTE MEANS
A YES vote means that redistricting responsibility for state legislative and Board of Equalization seats would be transferred from the Legislature to a Citizens Redistricting Commission. A NO vote means that the redistricting process will not be changed, and responsibility for redistricting will remain with the Legislature.
SUPPORTERS SAY
Prop. 11 will eliminate the current conflict of interest legislators have in drawing their own districts. Instead of politicians selecting their voters, voters will be empowered to select their elected officials and hold them accountable. Redistricting reform will help reduce or eliminate the partisan gridlock that is keeping the Legislature from effectively dealing with the state budget, health care, the environment and other crucial issues. The citizens’ redistricting commission ensures an open, balanced, inclusive process that will result in fair districts that protect our neighborhoods and communities.
OPPONENTS SAY
Prop. 11 will leave power in the hands of politicians and bureaucrats, not the voters. Bureaucrats will select the redistricting commission and seats will be set aside for partisan members of the two biggest political parties. This measure creates a powerful, unelected redistricting commission but does not ensure that its 14 members will reflect the gender, racial, or geographic diversity of the state’s 36 million people. Prop. 11 gives redistricting power to a commission that is not answerable to the voters, with no audits or financial accountability to protect the taxpayers.
Proposition 12: Veterans’ Bond Act of 2008.
WHAT A YES or No VOTE MEANS
A YES vote means that state could sell $900 million in general obligation bonds to replenish funding for Cal-Vet home and farm mortgages for veterans. A NO vote means that state could not sell these bonds.
SUPPORTERS SAY
The Cal-Vet loan program has helped hundreds of thousands of veterans invest in homes and farms in California at no expense to taxpayers. This program is good for the economy, generating millions of dollars in housing-related jobs.
OPPONENTS SAY
With home prices declining, state taxpayers could be liable if home buyers cannot make payments or sell their homes. This program has indirect costs to taxpayers, since the tax-deductible interest paid to bondholders reduces state tax revenue.
While much of the nation falls head over heels for Joe the Plumber, we in the Empire are tripping over our reputation as a sanctuary for Josephine the Redneck.
News of that local Republican newsletter, featuring a likeness of Barack Obama amid a smorgasbord of fried chicken, ribs and watermelon, has infected the so-called blogosphere. Turns out this particular sphere -- chaotic though it may seem -- is governed by a strict law of cyberphysics: For every act of mindless stereotyping there is an equal and opposite reaction of mindless stereotyping.
In technical terms, we are getting hammered.
Scores of Web sites quickly glommed onto the P-E story about the offensive October surprise spewed by the Chaffey Community Republican Women, Federated. Some of these sites posted the entire P-E story and invited reader comment -- an offer they couldn't refuse.
Wonkette, a popular political site, primed its readers thusly:
Meanwhile, a racist Republican gal in the "Inland Empire" -- the poor white trash part of exurbian Los Angeles -- sent out her little newsletter to the local GOP ladies . . .
Has Wonkette even set foot on our trash heap? Doesn't matter, does it? The rules of engagement had already been established by President Diane Fedele, the Chaffey "Republican gal" who thought she was only talking about food.
Wonkette readers took it from there:
As a former resident of the O.C. (I got out as soon as I could, thank you), I'd like to state for the record that the "Inland Empire" is often fondly referred to as "The Dirt People." And you can see why. Inland Empire is not White Trash. It's Sunbleached Godforsaken. The people from the Inland Empire are also derisively referred to as 909-ers (the area code). The 909 is redneck for Southern California.
She's probably got a little lawn jockey in the front of her trailer, in the Inland Empire.
A different site, washington monthly.com, served up more of the same:
As if anyone needed a reason to stay closer to the water and out of all that smog!
As a Californian, I can attest to the stark culatural differences between the coastal urban centers and the rural valleys and mountain regions. Like most states, we have more than our fair share of racist whackos. Fortunately, there are a lot more people living on the coast.
Small consolation that this refined coast dweller found it difficult to spell "cultural."
Last time the Empire received such unwanted attention (1998), a claque of ignorants argued against naming a new Riverside high school for Martin Luther King Jr. One reason: Colleges would reject MLK students, believing they had graduated from an all-black school. (Later that year, when RPD officers shot and killed Tyisha Miller, a young black woman, the national spotlight grew even harsher.)
The "Obama Bucks" newsletter may seem tame when measured against our recent history, but it certainly drives home the point that perpetuating stereotypes only begets more stereotypes.
One of the saddest elements of this latest drama -- judging from the blogoblurbs -- is few seemed surprised that this October "surprise" was sprung right here in the Empire.
A Republican group in California has distributed a newsletter picturing Democratic presidential candidate Barack Obama on a $10 bill adorned with a watermelon, ribs and a bucket of fried chicken.
Various Republican officials have denounced the illustration for linking Obama to demeaning racist stereotypes.
The illustration appeared in the October newsletter of the Chaffey Community Republican Women, Federated.
The group's president says she had no racist intent.
The Obama campaign has declined comment, saying it does not address such attacks.
The newsletter was sent to about 200 club members and associates last week by mail and email.
The club is a volunteer group that is not directly responsible to the state party, said California Republican party press secretary Hector Barajas, who denounced the newsletter.
Diane Fedele, president of the San Bernardino County group, says she didn't connect the images to racist stereotypes.
"It was just food to me. It didn't mean anything else," she told the Riverside Press-Enterprise.
Fedele said she had received the illustration in emails and decided to reprint it to poke fun at a remark by Obama that he doesn't look like other presidents.
"It was strictly an attempt to point out the outrageousness of his statement. I really don't want to go into it any further," Fedele told the newspaper. "I absolutely apologize to anyone who was offended. That clearly wasn't my attempt."
Sheila Raines of San Bernardino, a black member of the club, complained about the image to Fedele.
"This is what keeps African-Americans from joining the Republican party," she said. "I'm really hurt. I cried for 45 minutes."
Category: 43 English-Style India Pale Ale - 28 Entries Bronze: Hop Daddy IPA, Main Street Brewery, Corona, CA
Category: 63 Belgian-Style Abbey Ale - 53 Entries Gold: Bishop’s Tipple Trippel, Main Street Brewery, Corona, CA Silver: Abbey Dubbel, Flying Fish Brewing Co., Cherry Hill, NJ Bronze: 6th Glass, Boulevard Brewing Co., Kansas City, MO
Questions remain over government ownership of property
The multibillion-dollar federal plan to buy up financial firms' bad assets in an effort to kick-start the credit markets has more to do with "paper" than property, say experts.
And while the details on the form and function of the plan have not been finalized, they also say there is the possibility that the government will end up owning homes as a result of the bailout plan's implementation.
Under the plan, the Treasury secretary can buy up to $700 billion in mortgage-backed securities and other assets -- the so-called "paper" instruments clogging banks' books -- to encourage new lending.
There are also provisions in the plan that require the Treasury secretary to seek to "maximize assistance for homeowners and ... encourage the servicers of the underlying mortgages" to encourage homeowners to participate in programs that are intended to minimize foreclosures.
And the legislation, signed earlier this month, provides that the Treasury secretary must work with other agencies and participants of securities pools to allow renters to remain in their homes under the terms of their current lease and to account for "the need for operating funds to maintain decent and safe conditions at the property."
Larry A. Rosenthal, executive director of the Program on Housing and Urban Policy at University of California, Berkeley, said, "There was no notion in the original proposal by (Treasury) Secretary Paulson that there would be the purchase of the underlying real estate assets," though the final legislation does involve "greater flexibility for assistance that would go directly to homeowners."
There is precedent for the public purchase of private property and other assets, he said, citing Depression-era programs and programs stemming from the savings-and-loan crisis of the 1980s.
The Resolution Trust Corp. was established by the federal government during the savings-and-loan crisis to sell off the assets of failed companies, and the RTC contracted with private auction companies to sell off commercial and residential properties that the federal government acquired through the failure of hundreds of savings-and-loan companies.
Likewise, a similar entity could be used to recoup taxpayers' costs during the current crisis, Rosenthal said.
"You need something that's quite agile, something that's quite savvy, and something that operates like a profit-making organization that doesn't come out of the government organically. It does come out of the marketplace organically," he said.
"I'm just hoping that all of the red tape and all of the protections in the system against public corruption -- that that doesn't translate into losing the kind of quick fix we need. I have a hard time believing that a lot of the big decisions are going to be made between now and election day," he added, referring to the Nov. 4 presidential election.
Delores Conway, director of the Casden Forecast for the University of Southern California, said that the federal government could end up owning property through the bailout plan.
Because of the complexity of the mortgage-backed financial instruments, the federal government may end up owning only a portion of some assets, as there may be hundreds of other investors who share ownership of those assets.
"It's not clear whether (the government) can actually gain access to the asset itself" in all cases, she said. "We're really waiting to see how this is going to be executed."
There may be instances of "clustering" of property financing within specific geographic areas, as a single mortgage broker or lender may have arranged financing for most of the homes in a single development area, Conway said, and it may be easier for the federal government to obtain direct access to those properties in such cases.
"It wasn't just random. There was some order to it, some organization -- often geographic," she said, citing Cleveland as an example of a city in which individual banks have taken ownership of thousands of properties.
It may be easiest for the federal government to focus on buying up the mortgage-related paper for loans that are geographically clustered, she said, as those would perhaps be the "easiest to buy and the easiest to restructure," or pursue modifications to keep homeowners in their homes and prevent foreclosure.
Liz Giovaniello, a spokeswoman for the National Association of Realtors, said that the current federal plan seeks to prevent the mass auctions of property that occurred during the savings-and-loan crisis, as it deals with financial companies that are still in operation rather than defunct companies. "Let's hope the bailout will restore confidence before all of that happens," she said.
Paul Bishop, managing director of research for the National Association of Realtors, also noted that the goal of the federal plan is to quickly engage in loan workouts to minimize foreclosure and federal ownership of property.
He said that distressed sales, including short sales of properties and sales of bank-owned (REO) properties, account for about one-third of recent home sales, and the association will continue to play close attention to "what role Realtors should play in clearing out all of these properties on the banks' books," as the Treasury plan unfolds.
The National Association of Auctioneers has been hopeful that its members may be able to assist the federal plan.
In a letter last month to U.S. Treasury Secretary Henry M. Paulson that was also distributed to congressional leaders and financial industry regulators, the National Association of Auctioneers noted the history of the auction industry in contracting with the RTC to sell off government-owned properties.
"As the administration and Congress discuss solutions and remedies for the current financial crisis, one alternative that has emerged has been the resurrection of an agency similar to the Resolution Trust Corp.," the auctioneers' group noted in its Sept. 19 letter.
"The auction industry and the professionals who represent it assisted our government then, and we stand ready to assist it again today," the NAA wrote in the letter. A report by the NAA notes that residential real estate sales at auction rose from $11.5 billion in 2003 to $16.9 billion in 2007, a 46.6 percent gain.
Marty Higgenbotham, owner of Higgenbotham Auctioneers International Ltd., a national auction company, said he views the current financial crisis as "almost the same" as the savings-and-loan crisis in the late '80s and early '90s.
His company participated in about eight to 10 auctions related to the RTC assets, he said.
If the government does end up owning a lot of property through the implementation of the bailout plan, he said the best plan would be to put it on the market quickly.
"It doesn't make any sense for the government ... to hold on a property waiting for the market conditions to change. The depreciation of the property in the holding period will far exceed the appreciation (in a sale after the hold period) because the house in a year's time can just go to pot," he said.
"It's astounding what can happen in a year's time on a piece of real estate," he said, due to neglect and vandalism.
Meanwhile, Michael Davin, president of CataList Homes, a company that conducts property auctions through a partnership dubbed Zetabid (see Inman News) with auction company DoveBid and the Los Angeles Times Media Group, said he hopes the federal government does not auction off properties as a part of the bailout plan.
He said there is already a demand for buying up bank-owned properties, so those assets are not illiquid and there is no need for the government to buy and resell bank-owned foreclosure properties.
The federal government is more interested in buying up securities and other untradeable assets this time around, he said -- "not the underlying notes. There has been a market for nonperforming whole loans and seconds this whole time -- it's these funky derivatives and collateralizations that have been created that can't be sold. That's what (the federal government) is going to try to provide a market for."
He added, "If they do go into the whole loan market, there is a market for those now. The only reason for the government to play in that would be to provide an increase over retail value. Then (the government is) paying more than the market will bear."
There are still a lot of unknowns with the federal plan, though, said Davin. "They could ultimately ... buy homes, and decide, 'Let's create an affordable housing program.' You just never know what's going to happen."
There are some potentially big pitfalls with the government engaging in widespread mortgage workouts, Davin said, as some homeowners may decide to stop making mortgage payments in order to receive workouts.
"Hopefully with oversight it's done correctly. There will be challenges ... with any program of this magnitude," he said.
Mark Dotzour, chief economist at Texas A&M University's Real Estate Center, said he believes it is unlikely the government will seek to buy bank-owned property through its bailout plan.
"It seems that it would be good to remove the excess supply from the market," he said. "However, there is a strong feeling that excess demand drove house prices to unaffordable levels and that prices must continue to fall to restore affordability. As long as this view is held, it is unlikely that the government will make any moves to shore up home prices."
If you are receiving this note it is because I know you have a vested interest in our neighbors and community. I ask for your help and support. This Tuesday morning the board of Supervisor’s will vote on accepting the development cost bid for the El Cerrito Sport Park . The staff report with the background and cost structure is attached.
Please note that there were eight bids received with the one recommended for acceptance coming in approximately $4,500,000. less than the original estimate of $18,000,000. There will be no impact to the county’s General Fund. This is our money.
In these economic times spending $13,500,000. on a facility such as a park may seem ill timed, and I have heard that there is always the possibility of another Supervisor broaching this subject given the state of our economy. But even in hard times, children play, families picnic (even more so) and sports teams need fields. I ask that we look at the facts and send our encouragement for support via letters to Chairman Wilson and all members of the board urging their continued, unanimous support for our park. If you can attend and address them publically, even better. Supervisor Tavaglione has done an absolutely superb job in coordinating the land acquisition and partnership with Corona . He and the rest of the board have supported this as its wound through the county processes. Many years of planning and cost have brought us to this point, let’s see it through.
Please take a minute to remember:
El Cerrito residents have patiently waited for over ten years as our redevelopment fund accrued money for the community improvements we’ve been promised and supported.
With only 4,500 people in El Cerrito , our children have never had a park. Relying instead on El Cerrito Elementary, which was turned into a middle school several years ago, with no play equipment. But our children did have the rolling country hills and roads to ride bikes, see wildlife and be children who are now mostly adults with treasured memories of dark, star filled nights and sunny days, life in the country, . Our younger children are now bused to new schools in Corona . We recognize that we are no longer rural and have waited as all of the land around us and below us has blossomed with over 45,000 people, in new homes, with little neighborhood parks, shopping in new stores that El Cerrito residents did not protest for annexation or development.
This is to be a sports park with all of the amenities of a family park as well. This park is in an ideal, regional location and will serve tens of thousands of children from Corona , Norco , Gavilan Hills, Lake Matthew ’s and Temescal Valley .
The City of Corona is a partner with us in this park. While we have accrued the money for the purchase of the land and the development of the park it is the City that will fund maintenance. They recognize that all of us in the beautiful Corona and Temescal Valley ’s will be gaining a 26 acre jewel that will be used by families for generations. I thank the City for their cooperative efforts.
Please take time to pass this along and ask your friends and neighbors to send in their support.
The agenda item is below and will be heard as soon as possible after 9:00 a.m. on Tuesday at the County Administrative Center , 4080 Lemon Street , Riverside , 1st Floor Board Chambers. I have also included contact information for your convenience.
Thank you for taking the time to read my note and the attached staff report. I hope that you will join me in support for our park. I am sure there are some folks that will disagree and their comments are also respected but I do believe that the majority of us will agree that El Cerrito is ready to be host to all who will come and enjoy the new El Cerrito Sports Park .
Louise Mazochi 7740 Liberty Ave., Corona ( El Cerrito ) (951) 712-7086 louisemazochi@gmail.com
REDEVELOPMENT AGENCY MEETING:
4.1 El Cerrito Sports Park Project – Award of Construction Contract to Valley Crest Landscape Development, Inc., and Approval of Project Budget, 2nd District.
Parts of Southern California hit hard by the housing crisis are maneuvering to shape the Treasury Department's plan to buy up troubled assets so that it doesn't wind up causing a second wave of pain in their communities.
A development property is for sale in Colton, in California's San Bernardino county.
Officials in areas of the state hit hard by the housing crisis, such as San Bernardino county, are pushing for a federal bill that would let local businesses and governments buy up some of the distressed real estate to ensure that it doesn't fall into the hands of speculators who have no interest in the local community. Officials in San Bernardino and Riverside counties are determined to avoid a repeat of what happened 20 years ago, when the savings-and-loan crisis led to a massive selloff of distressed real estate in the area by the federal government's Resolution Trust Corp. Many of those properties, including foreclosed homes, were sold at fire-sale prices to investors who unloaded them quickly. In some cases, entire neighborhoods of what had once been homeowners turned into largely rental communities, further depressing property values and delaying an economic rebound.
"We don't want the cure to be worse than the disease," said Steve PonTell, a business owner in the vast area east of Los Angeles known as the Inland Empire. He said he is worried that neighborhoods could be seriously damaged if the Treasury "dumps" real-estate assets in such a way that leads to absentee ownership.
Government representatives in the area are now scrambling to muster support for a federal bill that would allow local businesses and governments to buy up some of the real estate to make sure it doesn't fall into the hands of speculators who have no stake in the community. The bill, introduced Sept. 27 by Rep. Gary Miller, a Republican who represents some of the areas in Southern California hurting from the mortgage meltdown, promotes the formation of regional public-private partnerships that could buy homes in their geographic area from the Treasury. This approach, they argue, would help stabilize neighborhoods and maximize financial returns to taxpayers.
In the wake of the 1990s savings-and-loan crisis, said Patrick Morris, mayor of San Bernardino, "Our city was so severely impacted by the drama that we moved from a city of owner-occupied homes to a city of renters."
The concern in parts of Southern California illustrates the risks that could lie ahead for other communities as the Treasury begins a massive churn of assets. Depressed real-estate values in areas across the country could slide further if homes are sold to large financial investors who then flip them to others who want to make a quick profit.
Mr. Miller said he tried unsuccessfully to get his bill incorporated into last week's federal rescue package. He said he has spoken to other members of Congress who support the bill and that there is still time to debate the measure when Congress reconvenes in January.
"The U.S. government is now in the real-estate business," he said in an interview. In order to make a smart investment, the Treasury should try to ensure that the real estate gets sold back into the local communities, he said. "We need to look at this as a business deal for the American people."
In many parts of the Inland Empire, memories of the problems that erupted two decades ago are still fresh. In Moreno Valley, one of the communities where the RTC bought up numerous properties in the early 1990s, Jeff Burum, who at the time was a financial consultant to some large Wall Street investors, recalls that many homes that were taken back and sold or held by the RTC weren't properly managed and were allowed to deteriorate. Kids would break in and have parties on Friday nights. When windows broke, they weren't repaired. When neighbors tried to get them replaced, their phone calls wouldn't be returned, or they would be told by a local listing broker that "we don't manage the assets," said Mr. Burum, now chairman of Diversified Pacific, a Rancho Cucamonga, Calif., home builder.
The result was that property values in Moreno Valley fell below their already depressed values. Homes that sold for $120,000 to $150,000 fell to $100,000 during the downturn, but declined to $75,000 after too many homes were dumped onto the market at one time, he said.
Stan Ross, chairman of the University of Southern California's Lusk Center for Real Estate, said places like Moreno Valley already were suffering from substantially reduced values when the RTC took control. "It's so easy to blame the government in these situations," he cautioned.
Counties such as Riverside and San Bernardino are already trying to gear up for what is expected to be a massive real-estate sale once the Treasury program gains steam. Last week, they passed resolutions supporting the formation of the "Regional Asset Value Recovery Corporation," an Inland Empire partnership to "preserve and restore neighborhoods and communities."
So far, the initiative has backing from about 30 business owners and 15 cities in the two counties, all of them with the potential to become investors in the partnerships, said Lance Larson, legislative director for San Bernardino County. The partnerships could seek additional support from other investors and from California Gov. Arnold Schwarzenegger, Mr. Miller said.
Other regions that are suffering high levels of foreclosures, especially in Florida, are expected to explore forming their own partnerships.
Mr. Miller's hastily written bill, H.R. 7189, is vague about how the proposed public-private partnerships would work. It would allow the Treasury to retain a stake in any of the properties that the partnerships acquire. Mr. Miller argues that the local partnerships would have better odds of ensuring that the assets rise in value, thus allowing the Treasury to retain a stake and "greatly improve the likelihood that the federal government makes a profit."
One of the biggest challenges, however, will be the unbundling of assets intertwined with various kinds of complex securities. In order to attract regional buyers, the Treasury would first have to group different assets by geography.
A federal plan to send millions of dollars to the Inland Empire to help local governments buy and re-sell foreclosed homes could be positive for the local economy, a pair of area professors said.
Government officials in San Bernardino and Riverside county agencies are set to receive about $125 million from the U.S. Department of Housing and Urban Development to fuel redevelopment work. Nationwide, the Neighborhood Stabilization Program calls for the feds to pass out $3.92 billion.
The program is based on the idea that if local officials can convert recently vacated dwellings into actual homes, they can prevent some foreclosed houses from becoming economic black holes that suck property values from surrounding homes.
UC Riverside economist Mason Gaffney said that although he did know the details of the Neighborhood Stabilization Program, the basic thrust of the policy seems to be a step in the right direction.
Gaffney maintained that using federal dollars to rehabilitate abandoned homes is more credible than the proposed $700 billion Wall Street bailout that the House of Representatives rejected on Monday.
"It makes a lot more sense than bailing out the crooks on Wall Street. That's a loser from the start," Gaffney said. "The public has risen up against it and their representatives have heard them."
The bailout, as proposed and supported by President Bush and House leadership, would have allowed the federal government to assume billions in new debt to buy troubled mortgages from private investors.
Bailout supporters said the gambit was necessary to prevent economic turmoil, the worry being that American commerce would slow to a crawl if banks cannot make new loans while rotten mortgages remain on their books.
Opponents cried foul at the notion of asking taxpayers to support a plan to rescue institutions that assumed capitalism's inherent risks when the moment they entered the subprime mortgage business.
Gaffney said he likes the stabilization plan's focus on rebuilding vacant properties and Washington's decision to allow local authorities to decide how to use the money in their own communities.
"You've got bumblers at every level, but they (municipal officials) are motivated," he said. Jim Mulvihill, a geography professor at Cal State San Bernardino who studies urban planning, said the federal program "will at least make a dent" in the Inland Empire's foreclosure problem.
Mulvihill said much of the plan's ultimate success will rest on local redevelopment officials' abilities to put federal dollars to good use.
"It's a good program if you've got people in the ... (Economic Development Agency) who are virtually in the mortgage business themselves," Mulvihill said.
In this regard, he praised Carey Jenkins, the San Bernardino Economic Development Agency official working on the program.
San Bernardino is set to receive $8.4 million to put vacant homes back on the market. Jenkins has said that skillful negotiations may make it possible for the EDA to acquire as many as 100 foreclosed homes.
More than 1,700 San Bernardino homes have been foreclosed upon between Aug. 2007 and Aug. 2008, according to Jenkins.
Mulvihill was more reserved in its praise while discussing the federal requirement that 25 percent of stabilization grants be used to house low-income persons.
In San Bernardino, that could mean EDA officials would be mandated to help individuals or families earning less than $25,000 per year, Mulvihill said.
On one hand, Mulvihill said it's understandable that officials would want to more people to own their own homes, but somebody who makes less than $25,000 is likely to have trouble paying for the repairs and routine maintenance that goes alone with owning one's own castle.
"What happens if the furnace goes out?," Mulvihill asked. "For any homeowner, you don't want that to happen."
Agencies using Neighborhood Stabilization dollars are required to craft a plan to use the money by Dec. 1. The federal government requires the money to be spent within 18 months.
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