As fossil fuel prices rise, as oil insecurity deepens, and as concerns about climate change cast a shadow over the future of coal, a new energy economy is emerging in the United States. The old energy economy, fueled by oil, coal, and natural gas, is being replaced by one powered by wind, solar, and geothermal energy. The transition is moving at a pace and on a scale that we could not have imagined even a year ago.
Consider Texas. Long the leading oil-producing state, it is now also the leading generator of electricity from wind, having overtaken California two years ago. Texas now has nearly 6,000 megawatts of wind-generating capacity online and a staggering 39,000 megawatts in the construction and planning stages. When all this is completed, Texas will have 45,000 megawatts of wind-generating capacity (think 45 coal-fired power plants). This will more than satisfy the residential needs of the state’s 24 million people, enabling Texas to feed electricity to nearby states such as Louisiana and Mississippi.
After Texas and California, the other leaders among the 30 states with commercial-scale wind farms are Iowa, Minnesota, Washington, and Colorado. And other states are emerging as wind superpowers. Clipper Windpower and BP are teaming up to build the 5,050-megawatt Titan wind farm, the world’s largest, in eastern South Dakota. Already under development, Titan will generate five times as much electricity as the state’s 780,000 residents currently use. This project includes building a transmission line along an abandoned rail line across Iowa, feeding electricity into Illinois and the country’s industrial heartland.
Colorado billionaire Philip Anschutz is developing a 2,000-megawatt wind farm in south central Wyoming. He already has secured the rights to build a 900-mile high-voltage transmission line to California. With this investment, the door will be opened to developing scores of huge wind farms in Wyoming, a wind-rich state with few people. Another transmission line under development will run north-south, linking eastern Wyoming’s wind resources with the fast-growing Colorado cities of Fort Collins, Denver, and Colorado Springs. Wind-rich Kansas and Oklahoma are looking to build a transmission line to the U.S. Southeast to export their wealth of cheap wind energy.
California is developing a 4,500-megawatt wind farm complex in the Tehachapi Mountains northwest of Los Angeles. In the east, Maine—a wind energy newcomer—is planning to develop 3,000 megawatts of wind-generating capacity, far more than the state’s 1.3 million residents need. Further south, Delaware is planning an offshore wind farm of up to 600 megawatts, which could satisfy half of the state’s residential electricity needs. New York State, which has 700 megawatts of wind-generating capacity, plans to add another 8,000 megawatts, with most of the power being generated by winds coming off Lake Erie and Lake Ontario. And soon Oregon will nearly double its wind generating capacity with a 900-megawatt wind farm in the wind-rich Columbia River Gorge.
Wind appears destined to become the centerpiece of the new U.S. energy economy, eventually supplying several hundred thousand megawatts of electricity.
Solar power is also expanding at a breakneck pace. The nation’s wealth of solar energy is being harnessed by using both photovoltaic cells and solar thermal power plants to convert sunlight into electricity. For solar cell installations, California, with its Million Solar Roofs plan, is far and away the leader. New Jersey is also moving fast, followed by Nevada.
The largest U.S. solar cell installation today is a 14-megawatt array at Nellis Air Force Base in Nevada, but photovoltaic electricity at the commercial level is about to go big time. PG&E has entered into two solar cell power contracts with a combined capacity of 800 megawatts. Together, these plants will cover 12 square miles of desert with solar cells and will have a peak output comparable to that of a large coal-fired power plant. Solar power plants are appealing in hot climates because their highest output coincides with the peak demand for air conditioning.
Solar thermal plants that use mirrors to concentrate sunlight on a vessel containing a fluid—heating it to 750 degrees Fahrenheit to generate steam and produce power—have suddenly become an enormously attractive technology. The United States has the world’s only large solar thermal complex, a 350-megawatt project completed in 1991. But as of September 2008 there are 10 large solar thermal power plants under construction or in development in the United States, ranging in size from 180 megawatts to 550 megawatts. Eight of the plants will be built in California, one in Arizona, and one in Florida. Within the next three years, the United States will likely go from 420 megawatts of solar thermal generating capacity to close to 3,500 megawatts—an eightfold jump.
Along with wind and solar, geothermal energy is also developing at an explosive rate. As of 2008 the United States has nearly 3,000 megawatts of geothermal generating capacity, 2,500 of which are in California. Suddenly this too is changing. Some 96 geothermal power plants now under development in twelve western states are expected to double U.S. geothermal generating capacity. With California, Nevada, Oregon, Idaho, and Utah leading the way, the stage is set for the massive future development of geothermal energy. (See data).
The new energy economy will be powered largely by electricity from renewable sources. Electricity will light, heat, and cool buildings. As we shift to plug-in hybrid cars, light rail transit systems in cities, and high-speed electric intercity rail systems like those in Japan and Europe, our transport system will also be powered largely by electricity.
It is historically rare for so many interests to converge at one time and in one place as those now supporting the development of renewable energy resources in the United States. To begin with, shifting to renewables increases energy security simply because no one can cut off the supply of wind, solar, or geothermal energy. It also avoids the price volatility that has plagued oil and natural gas in recent decades. Once a wind farm or a solar thermal power plant is built, the price is stable since there is no fuel cost. Turning to renewables will also dramatically cut carbon emissions, moving us toward climate stability and thus avoiding the most dangerous effects of climate change.
The shift also will staunch the outflow of dollars for oil, keeping that capital at home to invest in the new energy economy, developing national renewable energy resources and creating jobs here. At a time of economic turmoil and rising joblessness, these new industries can generate thousands of new jobs each week. Not only are the wind, solar, and geothermal industries hiring new workers, they are also generating jobs in construction and in basic supply industries such as steel, aluminum, and silicon manufacturing. To build and operate the new energy economy will require huge numbers of electricians, plumbers, and roofers. It will also employ countless numbers of high-tech professionals such as wind meteorologists, geothermal geologists, and solar engineers.
To ensure that this shift to renewables continues at a rapid rate, national leadership is needed in one key area—building a strong national grid. Although private investors are investing in long-distance high-voltage transmission lines, these need to be incorporated into a carefully planned national grid, the electrical equivalent of President Eisenhower’s interstate highway system, in order to unleash the full potential of renewable energy wealth.
And, finally, this energy transition is being driven by an intense excitement from the realization that people are now tapping energy sources that can last as long as the earth itself. Oil wells go dry and coal seams run out, but for the first time since the industrial revolution we are investing in energy sources that can last forever. This new energy economy can be our legacy to the next generation.
source: earthpolicy.org
link to the original post:
New Energy Economy Emerging in the United States
Fort Lauderdale Blog and Real Estate News
Rory Vanucchi
RoryVanucchi@gmail.com
www.LasOlasLifestyles.com
www.FortLauderdaleLiving.net
Nov 17, 2008
EXPANDING MARINE PROTECTED AREAS TO RESTORE FISHERIES
After World War II, accelerating population growth and steadily rising incomes drove the demand for seafood upward at a record pace. At the same time, advances in fishing technologies, including huge refrigerated processing ships that enabled trawlers to exploit distant oceans, enabled fishers to respond to the growing world demand. In response, the oceanic fish catch climbed from 19 million tons in 1950 to its historic high of 93 million tons in 1997. This fivefold growth—more than double that of population—raised the wild seafood supply per person worldwide from 7 kilograms (15.4 pounds) in 1950 to a peak of 17 kilograms in 1988. Since then, it has fallen to 14 kilograms.
As population grows and as modern food marketing systems give more people access to these products, seafood consumption is growing. Indeed, the human appetite for seafood is outgrowing the sustainable yield of oceanic fisheries. Today 75 percent of fisheries are being fished at or beyond their sustainable capacity. As a result, many are in decline and some have collapsed.
While oceanic fisheries face numerous threats, it is overfishing that directly threatens their survival. Oceanic harvests expanded as new technologies evolved, ranging from sonar for tracking schools of fish to vast driftnets that are collectively long enough to circle the earth many times over. Indeed, a 2003 landmark study published in Nature concluded that 90 percent of the large fish in the oceans had disappeared over the last 50 years, as a result of this expansion.
Fisheries are collapsing throughout the world. The 500-year-old cod fishery of Canada failed in the early 1990s, putting some 40,000 fishers and fish processors out of work. Fisheries off the coast of New England soon followed. And in Europe, cod fisheries are in decline, approaching a free fall. Like the Canadian cod fishery, the European ones may have been depleted to the point of no return. Countries that fail to meet nature’s deadlines for halting overfishing face fishery decline and collapse.
Atlantic stocks of the heavily fished bluefin tuna—a large specimen of which, headed for Tokyo’s sushi restaurants, can bring in $100,000—have been cut by a staggering 94 percent. It will take years for such long-lived species to recover, even if fishing were to stop altogether.
The U.S. Chesapeake Bay, which yielded more than 35 million pounds of oysters per year a half-century ago, now produces scarcely 1 million pounds per year. A deadly combination of overharvesting, pollutants, oyster disease, and siltation from soil erosion is responsible.
Even among countries accustomed to working together, such as those in the European Union (EU), the challenge of negotiating catch limits at sustainable levels can be difficult. In April 1997, after prolonged negotiations, agreement was reached in Brussels to reduce the fishing capacity of EU fleets by up to 30 percent for endangered species and overfished stocks. The EU had finally reached agreement on reducing the catch but these and subsequent cuts have not been sufficient to arrest the decline of the region’s fisheries.
When some fisheries collapse, it puts more pressure on those that remain. Local shortages quickly become global shortages. With restrictions on the catch in overfished EU waters, the heavily subsidized EU fishing fleet has turned to the west coast of Africa, buying licenses to fish off the coasts of Cape Verde, Guinea-Bissau, Mauritania, Morocco, and Senegal. They are competing there with fleets from China, Japan, Russia, South Korea, and Taiwan. For impoverished countries like Mauritania and Guinea-Bissau, income from fishing licenses can account for up to half of government revenue. Unfortunately for the Africans, their fisheries too are collapsing.
Overfishing is not the only threat to the world’s seafood supply. Some 90 percent of fish residing in the ocean rely on coastal wetlands, mangrove swamps, or rivers as spawning areas. Well over half of the mangrove forests in tropical and subtropical countries have been lost. The disappearance of coastal wetlands in industrial countries is even greater. In Italy, whose coastal wetlands are the nurseries for many Mediterranean fisheries, the loss is a whopping 95 percent.
Damage to coral reefs from higher ocean temperatures and ocean acidification caused by higher atmospheric carbon dioxide levels, as well as damage from pollution and sedimentation, are threatening these breeding grounds for fish in tropical and subtropical waters. Between 2000 and 2004, the worldwide share of destroyed reefs, those that had lost 90 percent of live corals, expanded from 11 percent to 20 percent. Some 24 percent of the remaining reefs are at risk of imminent collapse, with another 26 percent facing significant loss in the next few decades, due to mounting human pressures. As the reefs deteriorate, so do the fisheries that depend on them.
Pollution is taking a devastating toll, illustrated by the dead zones created by nutrient runoff from fertilizer and from sewage discharge. In the United States, the Mississippi River carries nutrients from the Corn Belt and sewage from cities along its route into the Gulf of Mexico. The nutrient surge creates huge algal blooms that then die and decompose, consuming the free oxygen in the water, leading to the death of fish. This creates a dead zone each summer in the Gulf that can reach the size of New Jersey. Worldwide, there are now more than 200 dead zones in oceans and seas, “deserts” where there are no fishing trawlers because there are no fish.
For decades governments have tried to save specific fisheries by restricting the catch of individual species. Sometimes this worked; sometimes it failed and fisheries collapsed. In recent years, support for another approach—the creation of marine reserves or marine parks—has been gaining momentum. These reserves, where fishing is restricted, serve as natural hatcheries, helping to repopulate the surrounding area.
In 2002, at the World Summit on Sustainable Development in Johannesburg, coastal nations pledged to create national networks of marine parks, which together could constitute a global network of such parks. At the World Parks Congress in Durban in 2003, delegates recommended protecting 20–30 percent of each marine habitat from fishing. This would be up from 0.6 percent of the oceans that are currently included in marine reserves of widely varying size.
A U.K. team of scientists led by Dr. Andrew Balmford of Cambridge University’s Conservation Science Group analyzed the costs of operating marine reserves on a large scale, and concluded that managing reserves that covered 30 percent of the world’s oceans would cost $12–14 billion a year. At stake in the creation of a global network of marine reserves is the protection and possible increase of an annual oceanic fish catch worth $70–80 billion, as well as the creation of 1 million new jobs.
A 2001 statement signed by 161 leading marine scientists called for urgent action to create the global network of marine reserves. The signatories noted how quickly sea life improves once the reserves are established. Within a year or two of establishing a marine reserve, population densities increased 91 percent, average fish size went up 31 percent, and species diversity rose 20 percent.
While the creation of marine reserves is clearly the overriding priority in the long-standing effort to protect marine ecosystems, other measures are also required. One is to reduce the nutrient flows from fertilizer runoff and untreated sewage that create the world’s 200 or so dead zones.
In the end, governments need to eliminate fishery subsidies. There are now so many fishing trawlers that their catch potential is nearly double any yield the oceans can sustain. Restoring fisheries by spending $12–14 billion on managing a network of marine reserves is far less than the $22 billion in harmful subsidies that governments dole out today to fishers to empty our oceans.
source:
earthpolicy.org
link to the original post:
EXPANDING MARINE PROTECTED AREAS TO RESTORE FISHERIES
Fort Lauderdale Blog and Real Estate News
Rory Vanucchi
RoryVanucchi@gmail.com
www.LasOlasLifestyles.com
www.FortLauderdaleLiving.net
As population grows and as modern food marketing systems give more people access to these products, seafood consumption is growing. Indeed, the human appetite for seafood is outgrowing the sustainable yield of oceanic fisheries. Today 75 percent of fisheries are being fished at or beyond their sustainable capacity. As a result, many are in decline and some have collapsed.
While oceanic fisheries face numerous threats, it is overfishing that directly threatens their survival. Oceanic harvests expanded as new technologies evolved, ranging from sonar for tracking schools of fish to vast driftnets that are collectively long enough to circle the earth many times over. Indeed, a 2003 landmark study published in Nature concluded that 90 percent of the large fish in the oceans had disappeared over the last 50 years, as a result of this expansion.
Fisheries are collapsing throughout the world. The 500-year-old cod fishery of Canada failed in the early 1990s, putting some 40,000 fishers and fish processors out of work. Fisheries off the coast of New England soon followed. And in Europe, cod fisheries are in decline, approaching a free fall. Like the Canadian cod fishery, the European ones may have been depleted to the point of no return. Countries that fail to meet nature’s deadlines for halting overfishing face fishery decline and collapse.
Atlantic stocks of the heavily fished bluefin tuna—a large specimen of which, headed for Tokyo’s sushi restaurants, can bring in $100,000—have been cut by a staggering 94 percent. It will take years for such long-lived species to recover, even if fishing were to stop altogether.
The U.S. Chesapeake Bay, which yielded more than 35 million pounds of oysters per year a half-century ago, now produces scarcely 1 million pounds per year. A deadly combination of overharvesting, pollutants, oyster disease, and siltation from soil erosion is responsible.
Even among countries accustomed to working together, such as those in the European Union (EU), the challenge of negotiating catch limits at sustainable levels can be difficult. In April 1997, after prolonged negotiations, agreement was reached in Brussels to reduce the fishing capacity of EU fleets by up to 30 percent for endangered species and overfished stocks. The EU had finally reached agreement on reducing the catch but these and subsequent cuts have not been sufficient to arrest the decline of the region’s fisheries.
When some fisheries collapse, it puts more pressure on those that remain. Local shortages quickly become global shortages. With restrictions on the catch in overfished EU waters, the heavily subsidized EU fishing fleet has turned to the west coast of Africa, buying licenses to fish off the coasts of Cape Verde, Guinea-Bissau, Mauritania, Morocco, and Senegal. They are competing there with fleets from China, Japan, Russia, South Korea, and Taiwan. For impoverished countries like Mauritania and Guinea-Bissau, income from fishing licenses can account for up to half of government revenue. Unfortunately for the Africans, their fisheries too are collapsing.
Overfishing is not the only threat to the world’s seafood supply. Some 90 percent of fish residing in the ocean rely on coastal wetlands, mangrove swamps, or rivers as spawning areas. Well over half of the mangrove forests in tropical and subtropical countries have been lost. The disappearance of coastal wetlands in industrial countries is even greater. In Italy, whose coastal wetlands are the nurseries for many Mediterranean fisheries, the loss is a whopping 95 percent.
Damage to coral reefs from higher ocean temperatures and ocean acidification caused by higher atmospheric carbon dioxide levels, as well as damage from pollution and sedimentation, are threatening these breeding grounds for fish in tropical and subtropical waters. Between 2000 and 2004, the worldwide share of destroyed reefs, those that had lost 90 percent of live corals, expanded from 11 percent to 20 percent. Some 24 percent of the remaining reefs are at risk of imminent collapse, with another 26 percent facing significant loss in the next few decades, due to mounting human pressures. As the reefs deteriorate, so do the fisheries that depend on them.
Pollution is taking a devastating toll, illustrated by the dead zones created by nutrient runoff from fertilizer and from sewage discharge. In the United States, the Mississippi River carries nutrients from the Corn Belt and sewage from cities along its route into the Gulf of Mexico. The nutrient surge creates huge algal blooms that then die and decompose, consuming the free oxygen in the water, leading to the death of fish. This creates a dead zone each summer in the Gulf that can reach the size of New Jersey. Worldwide, there are now more than 200 dead zones in oceans and seas, “deserts” where there are no fishing trawlers because there are no fish.
For decades governments have tried to save specific fisheries by restricting the catch of individual species. Sometimes this worked; sometimes it failed and fisheries collapsed. In recent years, support for another approach—the creation of marine reserves or marine parks—has been gaining momentum. These reserves, where fishing is restricted, serve as natural hatcheries, helping to repopulate the surrounding area.
In 2002, at the World Summit on Sustainable Development in Johannesburg, coastal nations pledged to create national networks of marine parks, which together could constitute a global network of such parks. At the World Parks Congress in Durban in 2003, delegates recommended protecting 20–30 percent of each marine habitat from fishing. This would be up from 0.6 percent of the oceans that are currently included in marine reserves of widely varying size.
A U.K. team of scientists led by Dr. Andrew Balmford of Cambridge University’s Conservation Science Group analyzed the costs of operating marine reserves on a large scale, and concluded that managing reserves that covered 30 percent of the world’s oceans would cost $12–14 billion a year. At stake in the creation of a global network of marine reserves is the protection and possible increase of an annual oceanic fish catch worth $70–80 billion, as well as the creation of 1 million new jobs.
A 2001 statement signed by 161 leading marine scientists called for urgent action to create the global network of marine reserves. The signatories noted how quickly sea life improves once the reserves are established. Within a year or two of establishing a marine reserve, population densities increased 91 percent, average fish size went up 31 percent, and species diversity rose 20 percent.
While the creation of marine reserves is clearly the overriding priority in the long-standing effort to protect marine ecosystems, other measures are also required. One is to reduce the nutrient flows from fertilizer runoff and untreated sewage that create the world’s 200 or so dead zones.
In the end, governments need to eliminate fishery subsidies. There are now so many fishing trawlers that their catch potential is nearly double any yield the oceans can sustain. Restoring fisheries by spending $12–14 billion on managing a network of marine reserves is far less than the $22 billion in harmful subsidies that governments dole out today to fishers to empty our oceans.
source:
earthpolicy.org
link to the original post:
EXPANDING MARINE PROTECTED AREAS TO RESTORE FISHERIES
Fort Lauderdale Blog and Real Estate News
Rory Vanucchi
RoryVanucchi@gmail.com
www.LasOlasLifestyles.com
www.FortLauderdaleLiving.net
Business likely will feel pinch of tighter criteria
Banks based in Lee and Collier counties are saddled with $418.4 million in bad real estate debt — up from $19.1 million two years ago, according to data from the Federal Deposit Insurance Corporation.
Banks are required to report to the FDIC how much they have in loans that aren’t being repaid and the reports for the quarter ended Sept. 30 show an explosion of bad debt.
State and federal regulators have stepped in with public oversight orders directing three local banks — Orion Bank, Riverside Bank and Florida Community Bank — to raise their loan qualifications, step up management and make other improvements.
Experts say the worst is not over: All signs point to increasing debt because of foreclosures already in the pipeline and worsening unemployment.
“Banks and all financial institutions are under a lot of stress because of the overall financial conditions out there now,” said Linda Charity, director of the Division of Financial Institutions of the Florida Office of Financial Regulations. “It’s fair to say this environment is probably going to continue for a while.”
The result is likely to be an increasingly tough borrowing environment for already strapped small businesses and consumers.
One local businessman said he’s already feeling the strain.
“I’m struggling over here,” said custom tailor Remy Fenelus, who owns Remy’s Custom Design in south Fort Myers. Already hard hit by the recession, he had 250 suits stolen by burglars who ransacked his store four weeks ago.
It’s tough to get a bank loan these days, he said.
“You have the credit line with the bank and they just take it away,” he said. “Or they’ll just reduce it to nothing.
It’ll be $200,000 and they reduce it to $10,000. What can you buy with $10,000?”
Bad debt held by banks typically contributes to their customers’ difficulties getting a loan, said Karen Dorway, president of Fort Lauderdale-based BauerFinancial, which tracks bank information nationwide.
“You see a shift in how the management is managing the resources,” she said. “Instead of focusing on the growth and building the company, they’re focusing on how do we solve these problems.”
The oversight agreements are intended to help banks get back on the right track and typically involve the Florida Office of Financial Regulation and either the Federal Reserve Bank or the FDIC, depending on how the bank is chartered.
The regulatory orders can come in a variety of forms, including confidential agreements with banks and public orders.
“It sort of moves up in terms of severity as things progress,” Charity said. “But it is not necessarily a bad thing. It’s a road map and a working partnership with the bank to strengthen the operation.”
An order issued recently to Immokalee-based Florida Community Bank listed 20 stipulations, including tightening lending to customers who already have troubled loans and requiring regulatory approval of new executive officers. The bank had $8.5 million in bad real estate debt in 2006, but had $105.7 million as of Sept. 30.
Bank president and chairman Stephen Price did not respond to requests for comment.
Even if the bank is not consciously tightening lending policies, Dorway said, “if you’re a loan officer and you’re looking at your portfolio and you say ‘My goodness, 3 percent of these loans are non-performing,’” there’s likely to be a more cautious attitude.
Banks that find themselves with a lot of bad debt have to be cautious and deliberate in their lending policies, said David Hall, president of Fort Myers-based First Community Bank of Southwest Florida — the only locally based bank to appreciably reduce its real estate debt this year.
First Community was ordered by the FDIC in June 2005 to stop making construction loans for commercial builders and, in retrospect, that set the bank on a course of financial responsibility, he said.
The bank’s real estate debt was $4.2 million in the third quarter of 2006 and increased to $6.5 million a year later. But it was down to $3.3 million in the latest FDIC report.
Recovering has been hard, Hall said.
“It’s been many late nights and weekends,” he said, but he expects his bank to survive and thrive now. The FDIC’s order was lifted in July 2007.
Any local bank could have cut back on real estate lending as the market went downhill, he said, but many did not.
Why?
“I’ve asked myself that question,” Hall said. “Everybody was up (in bad debt) except our little old bank.”
Other banks haven’t fared so well. Riverside Bank of the Gulf Coast, for example, was being considered for purchase by group of Brazilian businessmen.
But the deal fell through, Riverside chairman Elmer Tabor said Friday — although he noted there are six more interested buyers in the wings.
The Brazilians, he said, passed on the deal because of “not only the instability of the local economy, but the national economy with the markets going wild. They don’t think this is a good time to be putting money in the United States.”
Riverside’s bad real estate debt ballooned from $1.5 million in 2006 to $52.4 million this year. In June it closed four branches and laid off 45 of its 157 employees.
Kent Ellert, who was president of Fifth Third Bank in South Florida until Nov. 1, has formed Southeast Acquisition Holding Corp., with three partners to scout for investment opportunities among cash-strapped local banks.
“We are big-time believers in the long-term strength of the local and state economy and we think the current environment presents some opportunities,” Ellert said.
Ellert said the group will seek investment interest in banks, outright acquisition or might aggregate smaller banks.
Bad debt held by banks typically contributes to their customers’ difficulties getting a loan, said Karen Dorway, president of Fort Lauderdale-based BauerFinancial, which tracks bank information nationwide.
“You see a shift in how the management is managing the resources,” she said. “Instead of focusing on the growth and building the company, they’re focusing on how do we solve these problems.”
The oversight agreements are intended to help banks get back on the right track and typically involve the Florida Office of Financial Regulation and either the Federal Reserve Bank or the FDIC, depending on how the bank is chartered.
The regulatory orders can come in a variety of forms, including confidential agreements with banks and public orders.
“It sort of moves up in terms of severity as things progress,” Charity said. “But it is not necessarily a bad thing. It’s a road map and a working partnership with the bank to strengthen the operation.”
An order issued recently to Immokalee-based Florida Community Bank listed 20 stipulations, including tightening lending to customers who already have troubled loans and requiring regulatory approval of new executive officers. The bank had $8.5 million in bad real estate debt in 2006, but had $105.7 million as of Sept. 30.
Bank president and chairman Stephen Price did not respond to requests for comment.
Even if the bank is not consciously tightening lending policies, Dorway said, “if you’re a loan officer and you’re looking at your portfolio and you say ‘My goodness, 3 percent of these loans are non-performing,’” there’s likely to be a more cautious attitude.
Banks that find themselves with a lot of bad debt have to be cautious and deliberate in their lending policies, said David Hall, president of Fort Myers-based First Community Bank of Southwest Florida — the only locally based bank to appreciably reduce its real estate debt this year.
First Community was ordered by the FDIC in June 2005 to stop making construction loans for commercial builders and, in retrospect, that set the bank on a course of financial responsibility, he said.
The bank’s real estate debt was $4.2 million in the third quarter of 2006 and increased to $6.5 million a year later. But it was down to $3.3 million in the latest FDIC report.
Recovering has been hard, Hall said.
“It’s been many late nights and weekends,” he said, but he expects his bank to survive and thrive now. The FDIC’s order was lifted in July 2007.
Any local bank could have cut back on real estate lending as the market went downhill, he said, but many did not.
Why?
“I’ve asked myself that question,” Hall said. “Everybody was up (in bad debt) except our little old bank.”
Other banks haven’t fared so well. Riverside Bank of the Gulf Coast, for example, was being considered for purchase by group of Brazilian businessmen.
But the deal fell through, Riverside chairman Elmer Tabor said Friday — although he noted there are six more interested buyers in the wings.
The Brazilians, he said, passed on the deal because of “not only the instability of the local economy, but the national economy with the markets going wild. They don’t think this is a good time to be putting money in the United States.”
Riverside’s bad real estate debt ballooned from $1.5 million in 2006 to $52.4 million this year. In June it closed four branches and laid off 45 of its 157 employees.
Kent Ellert, who was president of Fifth Third Bank in South Florida until Nov. 1, has formed Southeast Acquisition Holding Corp., with three partners to scout for investment opportunities among cash-strapped local banks.
“We are big-time believers in the long-term strength of the local and state economy and we think the current environment presents some opportunities,” Ellert said.
Ellert said the group will seek investment interest in banks, outright acquisition or might aggregate smaller banks.
source:
news-press.com
link to the original post:
Business likely will feel pinch of tighter criteria
Fort Lauderdale Blog and Real Estate News
Rory Vanucchi
RoryVanucchi@gmail.com
www.LasOlasLifestyles.com
www.FortLauderdaleLiving.net
Nov 16, 2008
Citizens Insurance 'opt-out,' 'takeout' system nettlesome
If you want to stick with the state-run Citizens Property Insurance, pray that private insurance companies don't consider you a "desirable" policyholder.
Once the private insurers set their sights on a Citizens customer, they won't give up. Turn down one, and another will likely hit you up.
The state's "takeout" process requires Citizens policyholders to opt out if they don't want to be moved to a private insurer. But as Largo residents Olga and Adrian Mackenrow learned, opting out can be an ongoing headache.
They received a takeout notice in January from Homewise Preferred Insurance Co. and thought they had properly sent the opt out notice so they could stay with the state-run insurer.
Olga Mackenrow even took off work one day to ensure it was all done correctly.
But by August, they found that, against their stated wish, they had been transferred to Homewise, with their bank paying their insurance premium to the private company from their escrow account. They had to take more money to pay Citizens to keep their policy with the state before Homewise finally reimbursed them.
"I was very upset about the whole thing," Olga Mackenrow said. "I sent everything certified mail. It's time, money. … When is this going to stop?"
Bill Sparkes, chief operating officer at Homewise, said it had no record of the Mackenrows sending an opt-out letter directly to the company, but did find an opt-out notification sent directly to Citizens.
More takeouts are being approved, with private insurers approved to take out 110,000 more policies beginning today.
Larry Willis, a board member of the Professional Insurance Agents of Florida and the Citizens Agents Roundtable, said the program's intent is good, but there have been problems.
Willis said the Roundtable, a group that informs Citizens about agent and consumer issues, told the state-run insurance company of one client that received four takeout letters from different companies.
Takeout insurers, mostly new, small insurance companies, bid on policies in Citizens. The takeouts often bid on the same policies that come with low risk and high premiums.
Citizens randomly awards the properties. If a homeowner decides to stay with the state, his policy goes back in the pool and might be picked again.
"The takeout process can be frustrating for everybody," said Willis. "It can be frustrating for the consumer, the agent, the takeout company and for Citizens."
John Kuczwanski, a spokesman for Citizens, said changes to the takeout process by the Legislature were designed to create more choices of insurance carriers for homeowners, which would lead to lower insurance rates and reduce the state's financial exposure in a catastrophe.
Homeowners initially might be uncomfortable with companies they don't know, but they will see the benefits, Kuczwanski said. "As people become more familiar with these companies, there's a different comfort level. We don't know why a person would opt to stay with us."
In the past, insurance agents had veto power over a proposed takeout offer. But the state wanted to give consumers more choice, while pressing to empty Citizens of hundreds of thousands of policies that have left the insurer with $437-billion in risk exposure for about 1.2-million policies.
Now if agents object to a takeout offer, the agent must inform Citizens, which will send a letter to the homeowner advising that he can bypass the agent.
Insurance agents say that the prospect of losing their commissions hamstrings them from giving their customers honest advice about their misgivings about some companies.
"We're being forced to do business with many more insurance companies than we would normally do business with," Willis said. "We don't know whether the company is going to be easy to deal with."
For homeowners who want to stay with Citizens, Kuczwanski said the process provides multiple opportunities to stay with the state-run insurer, starting with the opt-out letter.
There is also a 30-day rescission period where customers can switch back to Citizens, and after that, the state-run insurer will still review cases of those who want to come back.
Jane Ames, 76, of New Smyrna Beach, is "flabbergasted" at the process; she believes she should be able to "opt in" rather than "opt out." She said she sent an opt-out letter to Magnolia Insurance Co., only to receive another takeout letter, from Homeowners Choice Insurance Co.
"Whatever it is they're doing, it's backwards," Ames said. "They talk about making things easier for the senior years. Well, this is a joke."
After months battling to get reimbursed from Homewise and back with Citizens, the Mackenrows thought they were finished untangling the mess. But last month they received another takeout notice, this time from Magnolia. Again, they have opted out and are hoping it works this time without all the hassles.
The burden is on Citizens policyholders to regularly check their mail for takeout letters and other insurance information, Kuczwanski said. "Maybe it's an unfortunate side effect of living in Florida."
Ivan Penn can be reached at ipenn@sptimes.com or (727) 892-2332.
source: St Petersburg times
link to the original post:
Citizens Insurance 'opt-out,' 'takeout' system nettlesome
Fort Lauderdale Blog and Real Estate News
Rory Vanucchi
RoryVanucchi@gmail.com
www.LasOlasLifestyles.com
www.FortLauderdaleLiving.net
Fla. Supreme Court considering tax cap amendment
TALLAHASSEE, Fla. (AP) – Nov. 6, 2008 – A day after election polls closed, the Florida Supreme Court heard oral arguments Wednesday on what could be one of the hottest issues on the state 2010 ballot if justices approve it.
The proposal is a citizen initiative that would cap property taxes at 1.35 percent of the highest taxable value of a home, business or other real estate, although voters could approve exceptions.
Petition sponsors say tax cuts ordered by law last year and through another state constitutional amendment passed in January don’t go far enough.
A financial impact statement, also under high court review, says the proposal would cost local governments at least $6 billion a year.
The justices will determine only if it covers a single subject and has a clear and accurate title and ballot summary.
Former Supreme Court Justice Stephen Grimes, now in private law practice, argued it misses the mark on both counts. He represents the Florida League of Cities, Florida School Boards Association and Florida Association of Counties.
The proposal covers more than one subject because it affects state as well local governments and their budgeting process besides limiting taxes, Grimes said. He noted it would require the Legislature to decide the distribution of tax revenues in areas where voters allow the cap to be exceeded.
“This court has said consistently that citizen initiatives are not designed to effect cataclysmic changes to our form of government,” Grimes said. “The Legislature is being pulled into doing something it’s never done before.”
Grimes said the proposal does not qualify for an exemption to the single-subject requirement for revenue limiting initiatives. He cited a unanimous opinion the high court issued in a similar case when he was sitting on the bench in 1997. It says the exemption does not apply to measures affecting multiple branches or levels of government.
Daniel Woodring, the lawyer for the sponsoring group, Cut Property Tax Now, urged the justices to reverse the 1997 decision.
“It’s an advisory opinion,” Woodring said later. “It’s persuasive, it’s not binding.”
Two justices who participated in the 1997 case, Harry Lee Anstead and Charles Wells, are still sitting on the seven-member high court. Woodring acknowledged it’s going to be tough getting the justices to reverse it, but at least one agreed with his argument.
Charles Canady, one of two justices recently appointed by Gov. Charlie Crist, called the 1997 ruling “nonsensical” and “an opinion without reasoning.”
Grimes also faulted the ballot summary for failing to cite what part of the Florida Constitution the proposal would amend. Woodring said that’s unnecessary due to the exemption for revenue-limiting initiatives.
The justices spent several minutes questioning Woodring about what exactly the amendment would do. Justice Barbara Pariente then asked how a voter could determine that if the justices couldn’t figure it out just by reading the summary.
Woodring said it’s simple. He gave the example of a home with a $100,000 taxable value. Applying the limit would mean the tax couldn’t be more than $1,350.
“That’s all the voter really needs to know,” Woodring said later. The example, though, isn’t included in the ballot summary.
Cut Property Tax Now has collected 110,492 of 611,009 signatures currently needed to get on the ballot. That’s 8 percent of votes cast in the last presidential election. The minimum is expected to increase by about 30,000 signatures for 2010 based on Tuesday’s turnout of more than 8 million voters.
source: floridarealtors.org
link to the original post:
Fla. Supreme Court considering tax cap amendment
Fort Lauderdale Blog and Real Estate News
Rory Vanucchi
RoryVanucchi@gmail.com
www.LasOlasLifestyles.com
www.FortLauderdaleLiving.net
The proposal is a citizen initiative that would cap property taxes at 1.35 percent of the highest taxable value of a home, business or other real estate, although voters could approve exceptions.
Petition sponsors say tax cuts ordered by law last year and through another state constitutional amendment passed in January don’t go far enough.
A financial impact statement, also under high court review, says the proposal would cost local governments at least $6 billion a year.
The justices will determine only if it covers a single subject and has a clear and accurate title and ballot summary.
Former Supreme Court Justice Stephen Grimes, now in private law practice, argued it misses the mark on both counts. He represents the Florida League of Cities, Florida School Boards Association and Florida Association of Counties.
The proposal covers more than one subject because it affects state as well local governments and their budgeting process besides limiting taxes, Grimes said. He noted it would require the Legislature to decide the distribution of tax revenues in areas where voters allow the cap to be exceeded.
“This court has said consistently that citizen initiatives are not designed to effect cataclysmic changes to our form of government,” Grimes said. “The Legislature is being pulled into doing something it’s never done before.”
Grimes said the proposal does not qualify for an exemption to the single-subject requirement for revenue limiting initiatives. He cited a unanimous opinion the high court issued in a similar case when he was sitting on the bench in 1997. It says the exemption does not apply to measures affecting multiple branches or levels of government.
Daniel Woodring, the lawyer for the sponsoring group, Cut Property Tax Now, urged the justices to reverse the 1997 decision.
“It’s an advisory opinion,” Woodring said later. “It’s persuasive, it’s not binding.”
Two justices who participated in the 1997 case, Harry Lee Anstead and Charles Wells, are still sitting on the seven-member high court. Woodring acknowledged it’s going to be tough getting the justices to reverse it, but at least one agreed with his argument.
Charles Canady, one of two justices recently appointed by Gov. Charlie Crist, called the 1997 ruling “nonsensical” and “an opinion without reasoning.”
Grimes also faulted the ballot summary for failing to cite what part of the Florida Constitution the proposal would amend. Woodring said that’s unnecessary due to the exemption for revenue-limiting initiatives.
The justices spent several minutes questioning Woodring about what exactly the amendment would do. Justice Barbara Pariente then asked how a voter could determine that if the justices couldn’t figure it out just by reading the summary.
Woodring said it’s simple. He gave the example of a home with a $100,000 taxable value. Applying the limit would mean the tax couldn’t be more than $1,350.
“That’s all the voter really needs to know,” Woodring said later. The example, though, isn’t included in the ballot summary.
Cut Property Tax Now has collected 110,492 of 611,009 signatures currently needed to get on the ballot. That’s 8 percent of votes cast in the last presidential election. The minimum is expected to increase by about 30,000 signatures for 2010 based on Tuesday’s turnout of more than 8 million voters.
source: floridarealtors.org
link to the original post:
Fla. Supreme Court considering tax cap amendment
Fort Lauderdale Blog and Real Estate News
Rory Vanucchi
RoryVanucchi@gmail.com
www.LasOlasLifestyles.com
www.FortLauderdaleLiving.net
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