In the Midst of Ongoing Fluctuating Interest Rates, Bank Activity is Steady, Says New Report3/8/2023 ![]() The status of the nation’s banks remains healthy, according to a new report, despite the vagaries of the national economy. In its Monetary Policy Report just submitted to Congress, the Board of Governors of the Federal Reserve System said that even though 2022 saw a decrease in overall revenue growth, the nation’s banking sector is still strong. “Bank profitability in the second half of 2022 remained robust overall, driven by strong net interest income,” said the document, before adding, “but revenues and earnings in the fourth quarter were generally weaker, particularly among banks with a greater share of income derived from investment banking activities.” The report additionally noted that interest rates on both auto loans and credit cards continued to increase throughout most of last year. Those rates, in fact, are “now higher than the levels observed in 2018 at the peak of the previous monetary policy tightening cycle.” This comes as banks across the country have reported tighter lending standards regarding consumer credit products during the final six months of last year. Those tightened standards, says the report, to some degree reflect “increases in delinquency rates and concerns about further future deterioration in credit performance.” In fact, after falling to record lows in 2021, the second year of the pandemic economy, delinquency rates for auto loans and credit cards were back on the upside last year. Even in the face of those increased rates, “financing has been generally available to support consumer spending, and consumer credit continued to expand in the past several months.” The Monetary Policy Report is sent to Congress twice a year by the Fed, and is regarded as a holistic overview of the U.S. economy and the country’s financial welfare. By Garry Boulard
0 Comments
![]() Preliminary zoning work is underway on a massive project in north Phoenix that will see the famous Mayo Clinic building a 120-acre medical and research campus. As planned, the project, called Discovery Oasis, will go up next door to an existing Mayo hospital just to the southeast of the intersection of Loop 101 and 56th Street. The project has been long in the talking and imagining stage and will ultimately see construction of some 3.3 million square feet of buildings housing advanced research and development, as well as outpatient treatment facilities, among many other functions. Launched during the last year of the Civil War in Rochester, Minnesota, the Mayo Clinic has grown into a mammoth organization combining health care, education, and research. On an annual basis, Mayo treats up to 1 million patients at its various locations. The nonprofit has had a presence in southern Arizona starting with the opening of its first facility in Scottsdale in 1987. In 1998, it opened a new campus in Phoenix. A zoning application for the project has now been submitted to the City of Phoenix. Mayo purchased the land for the Discovery Oasis at an auction in 2021. By Garry Boulard ![]() Perhaps the most expensive home in recent Arizona history is soon to be built in a growing suburb of Phoenix. Wow Luxury Properties, which has offices in Phoenix has announced plans to build a 33,000 square foot mansion in Paradise Valley that will hit the market with a $75 million price tag. The tony project will feature seven bedrooms, four kitchens, two bowling lanes, and two locker rooms. But the amenities don’t stop there. A recording studio will also be built into the mansion, along with four wet bars, a combined metaverse and theater room, ice cream bar, sauna room, and combined two-floor office and library. An emphasis on health also awaits the owner of the property, with the building of two massage rooms and vitality pools, a home gym, outdoor bocce court and putting and chipping green. Addition onsite structures are expected to include a conference building, guardhouse with a bedroom, and one-bedroom casita. Wow Luxury Properties advertises itself as a firm that specializes in “luxury estates starting at $10 million,” and has emerged as a major player in a Paradise Valley market seeing the building of dozens of upscale properties valued in the tens of millions. The business publication Bloomberg recently listed Paradise Valley, which has a population of around 13,000, as one of the richest towns in the country, with an average household income of more than $328,000 and average home price of just under $3 million. According to the site Propertyclub, Paradise Valley, roughly 14 miles to the northeast of Phoenix, is now regarded as “the most expensive place to live in Arizona.” By Garry Boulard ![]() After being introduced but not acted upon on in two previous sessions of Congress, a new attempt is being made to secure passage of the Protecting the Right to Organize Act. Otherwise known as the Pro Act, the measure, if passed, would enhance the legal right of employees to join a labor union, while also prohibiting employers from conducting meetings to offer information counteracting labor arguments. In one of the most controversial sections of the bill, the Pro Act would allow labor unions to organize secondary strikes when another union is striking against a company. In introducing a new version of the legislation, New Jersey Senator Cory Booker argued that a “union job is the pathway for millions of American families to the middle class, prosperity, and opportunity, but for too long, workers’ rights have been under attack.” Applauding Booker’s measure, Liz Shuler, president of the AFL-CIO, said of the measure: “This is how we let workers, not wealthy corporations, decide for themselves if they want the power of a union.” The legislation has consistently been opposed by a number of industry groups, with Stephen Sandherr, chief executive officer of the Associated General Contractors of America, remarking: “This anti-worker, anti-privacy and anti-growth measure will harm our economy at a time when many employers are struggling to cope with inflation, supply chain disruptions, and labor shortages.” In a statement, the National Association of Home Builders charged that the legislation would “expand employers’ liability for the labor practices of subcontractors and third-party vendors and narrow the circumstances under which an individual can work as an independent contractor.” In so doing, the measure would also eradicate the “contracting business model that serves as the foundation of the residential construction sector.” The prospects for the legislation are unclear. While earlier versions of the measure have passed in the House of Representatives, a change in the party membership as a result of the 2022 mid-term election, makes its success seem less likely. By Garry Boulard ![]() Plans are moving along for the construction of a new housing project in Denver designed to serve seniors who are homeless. Officials with the St. Francis Center, which has been providing shelter, food, and support services to homeless individuals in the Mile High City since 1983, say the new facility will go up at 221 N. Federal Boulevard. That site, owned by the City of Denver and about 3 miles to the southwest of the downtown area, was an empty lot for more than a decade. In the last several years the property has been a designated Safe Outdoor Space populated by residents living in a series of tents and operated by an organization known as the Colorado Village Collaborative. The lease for the space expires in May, opening the way for the senior shelter project. As planned, the St. Francis facility will be three stories in height, housing 60 residential units. Of that number, 51 will be one bedroom, with the remaining units designated as two bedrooms. Support funding for the project to the tune of $12.5 million is coming from the city via private activity bonds. The new St. Francis facility is only the latest in a series of senior housing projects that have recently won the approval of the City of Denver. By Garry Boulard ![]() Addressing a challenge confronting metropolitan areas across the country, city officials in Las Cruces are on the verge of putting together a program designed to accelerate the construction of more affordable housing. A fund has been set up aiming to lessen the costs for developers of building new single family housing units. What is being called the Revolving Loan Fund will not only provide low interest construction loans for project development, but additionally will help defray the cost of acquiring and building infrastructure. According to a press release issued by the City of Las Cruces, city staff has recommended that the program should be done in conjunction with the Tierra Del Sol Housing Corporation, a local nonprofit with years of experience in affordable housing development. City documents state that the fund will start out at $500,000, with the available money “intended to incentivize developers to create modestly-sized and -priced homes that will appeal to first-time homebuyers or other homebuyers who earn up to 120% of American Median Income.” The homes to be constructed, in turn, will be “more appropriately sized and priced than many available today.” The funding program is awaiting approval by the Las Cruces City Council. By Garry Boulard ![]() After testing the water with new locations in Arizona and Colorado, the growing In-N-Out Burger chain has announced plans to build in other states, particularly to the east of the Mississippi River. Based in Baldwin Park, California, the fast-food restaurant company has enjoyed great popularity with its specially grilled hamburgers, including an item called the “Double-Double,” which is made up of two hamburger slices and two slices of cheese. With annual revenue at around $1.1 billion, the restaurant chain, founded in 1948, has built stores primarily along the West coast and in parts of Utah and Texas. An expansion in Arizona and Colorado has been underway for the last three years. Now the company has announced plans to build a new $125 million, 100,000 square foot headquarters location in Franklin, Tennessee, with new restaurants also slated for Nashville, among other places. Described as a “cult-favorite burger chain” by the industry publication QSR, In-N-Out Burgers, with nearly 400 locations now up and running, is also known for a service staff that wears uniforms and paper hats, much as they did in the 1950s. Last week the company also said it has plans to build a new restaurant in Loveland, Colorado. The typical In-N-Out store usually measure around 3,800 square feet and houses 75 seats. By Garry Boulard ![]() Construction could begin later this spring on a project in Scottsdale that will see the building of 112 luxury condos over a spread of 9 five-story buildings. What is being called Portico is being developed by the Chicago-based Belgravia Group, which has spearheaded any number of luxury residential projects in the Windy City and was last year named “developer of the year” by Chicago Agent Magazine. The project will go up on the north side of Scottsdale at the intersection of Loop 101 and Scottsdale Road, and will include a clubhouse, fitness center, and outdoor swimming pool. Like other Belgravia projects, the Scottsdale development will additionally feature retail, office, and even hotel space. Prices for residential units ranging between one bedroom and four bedrooms are expected to start at around $650,000 and top out at $1.6 million. Officials with Belgravia, which has always mined a luxury residential market in Chicago, now foresee a similar market emerging in Scottsdale. Jonathan McCulloch, chief executive officer of the company, recently told the Scottsdale Progress newspaper that the growing Arizona city allows for the “type of product we want to build, which is a high-end luxury product without shooting for the very top of the market.” That new market is animated by an average Scottsdale home price that is now at around $730,000, and growth seeing the city adding 100,000 people in the last two decades for a current population of more than 241,000 people. By Garry Boulard ![]() A former Legent Hospital facility in El Paso may soon be upgraded for use as a 40-bed facility for the University Medical Center of El Paso. Members of the El Paso County Commission have given their approval to a proposal allowing the El Paso County Hospital District to purchase the structure at 1416 George Dieter Driver for UMC’s use. The mostly one-story building was formerly the home to the Foundation Surgical Hospital of El Paso. As envisioned, the new hospital space will house half a dozen operating rooms and may include some office space. Despite the plans for the building, county officials have maintained that the need for new hospital space remains great, with the possibility of an entirely new facility being built on the east side of El Paso in the near future. One of the oldest public hospitals in the region, the University Medical Center of El Paso initially opened in 1915 as the El Paso General Hospital. It officially became the University Medical Center of El Paso in the summer of 2019. According to hospital statistics, the University Medical Center of El Paso saw roughly 1,300 admissions per month in 2022. By Garry Boulard ![]() Inflation remains the biggest concern facing the country’s small businesses, says a survey sponsored in part by the U.S. Chamber of Commerce. The survey is particularly revealing in that in late 2021 respondents to an earlier Chamber survey pointed to a lack of revenue as their greatest concern. That 2021 survey also pointed to supply chain issues as a prominent small business concern. But beginning in the spring of 2022, inflation has become the number one small business concern with, at first, around 35% of respondents so asserting. By the end of 2022, that figure far outdistanced other concerns, with nearly 55% of respondents seeing it as their primary concern. Notes Thaddeus Swanek, strategic communications official with the Chamber: “It doesn’t matter what size your small business is or where it’s located—inflation is the top concern for small businesses regardless of location, number of employees, or sector.” The Chamber survey, done in a partnership with the insurance company Met Life, also noted that as of the end of 2022, nearly “7 in 10 small businesses owners said they raised prices to cope with rising inflation.” At the same time, the Federal Reserve’s decision to up interest rates in an attempt to cool inflation, has caused additional small business anxiety. The increase in interest rates has significantly increased the cost of doing business for “small business owners who often relay on credit and loans to finance their business operations.” Concerns about supply chain issues, meanwhile, have somewhat decreased as the supply chain itself has become more fluid in recent months. The survey notes that in the spring of 2022 nearly 30% of small business owners saw supply chain challenges as a primary concern. That figure is now down to 20%. By Garry Boulard |
Get stories like these right to your inbox.
|