Treasury Secretary Janet Yellen thinks if the government’s debt ceiling is not raised any time soon, it could have a devastating impact on investments, mortgage payments, and credit card interest rates. Speaking before the National Association of Counties’ annual legislative conference, Yellen noted that “Since 1789, the United States has paid all our bills on time. It should stay that way.” Yellen asserted that a “default on our debt would produce an economic and financial catastrophe,” noting not only that people could lose jobs, but that “household payments on mortgages, auto loans, and credits cards would rise, and American businesses would see credit markets deteriorate.” The Treasury Secretary added that on top of such possible economic calamities, a failure to raise the debt limit would make it “unlikely that the federal government would be able to issue payments to millions of Americans, including our military families and seniors who rely on Social Security.” All such dire consequences could be avoided, Yellen said, by Congress voting to “raise or suspend the debt limit.” “It should do so without conditions,” she continued. “And it should not wait until the last minute.” Negotiations are currently underway between the White House and Congressional leaders regarding the possibility of raising the debt ceiling and what, if any, government programs would be reduced or limited in reaching that goal. By Garry Boulard
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A downtown Albuquerque property that at least somewhat symbolizes the challenges of the nightclub industry is on the market. Located at 211 Gold Avenue SW, the nearly 5,000 square foot, two-floor structure, has recently been the home to the Tantra Nightclub, which advertises such features as two dance floors (one for club music and the other for hip hop), a hookah bar with premium shisha, and a “chill zone with a pool table.” Before the building housed the Tantra, it was home to another night spot called the Lotus Nightclub, and was yet another drinking, dancing, and social gathering place before that. In its distant pre-nightclub years, the building served as offices to the real estate firm Chavez and Company. Classified as a Class C building, the structure has undergone several renovations over the last two decades, the most recent being in 2022. Located in a section of downtown populated with offices, restaurants and coffee shops, the property is listed with the real estate firm of Resolut RE/Commercial Real Estate. By Garry Boulard Historic Farmhouse in Southern Arizona to be Preserved as Part of a New Shopping Center Project2/21/2023 Work building a new shopping center in the town of Laveen, Arizona is also expected to soon include restoration of the historic Hudson Farmhouse. That nearly century-old structure near the intersection of 59th Avenue and Dobbins Road, is one of the mainstays in a southwest Arizona town that has seen its population jump from less than 1,000 a generation ago to well over 50,000 today. Located 8 miles to the south of downtown Phoenix, Laveen has undergone unprecedented development in the last few years, and is currently seeing the construction of a new walkable shopping and entertainment space called the Laveen Towne Center. That project is being undertaken by the Vestar commercial real estate company, which has offices in Phoenix and Los Angeles, and is expected to cost upwards of $130 million to complete. Ultimately, the new center will make up around 400,000 square feet of retail space. Members of the Phoenix City Council have now given their unanimous approval to reimbursing Vestar for up to $25 million in infrastructure improvements related to the project. Plans call for the Hudson Farmhouse to be repurposed as anything from a restaurant to a wine-related space or tourist gathering spot. Long-existing cement-stave silos at the site may also be preserved after the Laveen Town Center is built. Work on the center is expected to begin sometime next year and to see completion in the last quarter of 2025. By Garry Boulard Farmington, New Mexico rates as the number one metro area with the largest year-over-year home price increases, according to a new survey just released by the National Association of Realtors. According to the group’s latest quarterly report, the northwestern New Mexico city saw a 20.3% gain in home prices between the end of 2021 and the final quarter of last year. Only one other Western city made the top ten list: El Paso, with a growth rate of 15.2%. Four other cities were located in Florida; three in North Carolina; and one in Wisconsin. Overall, according to the NAR report, single-family home sales were up by some 4% on average in 166 out of 186 metro areas surveyed, comprising an average home sale price of $378,700. In crunching the numbers, Lawrence Yun, chief economist with the NAR, remarked that a “slowdown in home prices is underway and welcomed, particularly as the typical home price has risen 42% in the past three years.” Yun added that “far fewer metro markets experienced double-digit price gains in the latest quarter.” In a separate listing, half of the top ten most expensive markets in the country were located in California, with average prices ranging from $829,100 to $1.5 million. Boulder, Colorado placed eighth on the list with an average home price figure of $759,500. Although only one in ten markets in late 2022 saw home price declines, Yun predicted that a “few markets may see double-digit price drops, especially some of the more expensive parts of the country which have also seen weaker employment and higher instances of residents moving to other areas.” By Garry Boulard A thriving company that makes microcontroller, analog, and Flash-IP integrated circuits, among other products, has announced plans to significantly expand one of its facilities in Colorado Springs. Microchip Technology Incorporated, headquartered in Chandler, Arizona, is an international leader in everything from radio frequency devices to linear, interface, and wireless products. Launched in 1989, the company in 2021 recorded around $8 billion in revenue. Now plans are underway for Microchip Technology to substantially expand its fabrication campus in Colorado Springs at a cost of around $880 million. In a statement, Ganesh Moorthy, chief executive officer of the company, noted that the expansion was partly animated by the passage last year of the CHIPS and Science Act, which is providing funding and incentives for increased U.S. microchip production. Essentially, the company will be expanding its existing 50-acre campus located at 1150 E. Cheyenne Mountain Boulevard, enabling the company to expand its silicon carbide and silicon production capacity. The company has additional wafer fabrication facilities in Tempe, Arizona and Gresham, Oregon. Earlier this month, Microchip Technology reported more than $2.1 billion in sales in the third quarter of 2022, chalking up its ninth consecutive quarter of growth. By Garry Boulard A measure that would appropriate some $50 million in funding for the construction of wildlife corridors is moving its way through the New Mexico State Legislature. Senate Bill 72, as proposed by Senator Mimi Stewart, has unanimously cleared the Senate Conservation Committee and would, if passed by the full legislature, see the building of any number of underpasses and overpasses allowing wildlife to avoid vehicular traffic while safely getting from one location to another. The bill would also fund the construction of boundary fencing, as well as the planning of any corridor construction project and ongoing management of the crossings. According to an analysis of the measure compiled by the Legislative Finance Committee, an average of 900 crashes per year between 2002 and 2018 entailed either deer or elk collisions with vehicles. For the entirety of that 16-year period, deer crashes numbered just over 11,400, followed by elk collisions at around 3,000. In a distant third place: black bear collisions at 650. The wildlife corridors measure has additionally won the approval of the Senate Finance Committee and will soon be considered by the full Senate. If approved by legislators and signed into law by Governor Michelle Lujan Grisham it is possible that the corridors initiative could also be eligible for some federal funding. By Garry Boulard The U.S. Government appears destined to default on its debts sometime this summer unless members of Congress agree to raise the federal debt limit. So says Congressional Budget Office Director Phillip Swagel in announcing his agency’s most recent budget and economic outlook. The Director noted that the country’s projected deficit for the next decade is some $3 billion larger than projected last spring, mainly, he asserted, “because of newly enacted legislation and changes to the economic forecast that boost costs and spending on mandatory programs.” Noting that “as the cost of financing the nation’s debt grows, net outlays for interest increase substantially.” Swagel directly addresses the debt limit by predicting that if that limit remains unchanged, “the government’s ability to borrow, using extraordinary measures, will be exhausted between July and September 2023.” Swagel said he could not be more specific regarding what he called a “projected exhaustion date” for the simple reason that “the amount of revenue collections and outlays over the intervening months could differ from our projections.” To that end, the Director noted that “income tax receipts could be more or less than we estimate.” If those receipts end up being less than expected, the Treasury Department “could run out of funds before July.” President Biden and House Speaker Kevin McCarthy have entered into preliminary discussions regarding the debt limit. According to various news sources, both parties have mentioned the possibility of reducing some spending programs, although cuts to either Social Security or Medicare are thought to be off the table. By Garry Boulard Add one more to the growing list of proposed and recently developed business and industrial parks in southern Arizona. The Irvine, California-based Shopoff Realty Investments has announced that it wants to build a business park in Mesa that would see the construction of some 16 buildings on a nearly 270-acre site. Additional construction will see two retail buildings for the use of employees working in the park. The structures will go up on the southeast side of the city at the intersection of E. Elliott Road and S. Sossaman Road. To be called The Block on Elliott, the park will be built out over a planned three stages. Upon completion, it is expected that The Block on Elliott will comprise some 3.5 million square feet. The Shopoff company announced its purchase of the Mesa site, which was once a vast dairy farm, last fall. In announcing that initial investment, Brian Rupp, Shopoff executive vice-president, noted that the city of Mesa has “seen tremendous growth in the residential, commercial, and industrial markets over the past decade.” Launched in 1992, Shopoff is known for its development of large, multi-use projects, primarily in California. By Garry Boulard Coming after several years of wildfires that destroyed hundreds of homes and businesses in various parts of Colorado, lawmakers in the Centennial State are contemplating a bill that would implement a series of new building codes to be carried out by local governments. As proposed by Senator Lisa Cutter, the legislation would create a statewide governing code board empowered to classify wildfire danger zones. The idea has won the support of local fire chiefs across the state, who have previously expressed concerns about homes being built in regions and area of Colorado most subject to wildfires. The issue is a particularly painful one for both state leaders and residents: in late 2021 and early 2022 what is now called the Marshall Fire, stretching some 3 miles from the town of Superior to the city of Louisville, resulted in the destruction of up to 1,100 homes. Altogether, that fire caused more than $2 billion in property damages, including a shopping center and hotel. As proposed, a governing code board would adopt both building and landscaping codes for cities and towns to follow. At the same time, it would put in place an appeals process for those cities and towns to modify any new code. Criticism of the proposal has centered on the state taking on powers that should properly belong to local governments, and the possibility that such new codes will make it more expensive to build new housing. A separate bill sponsored by Representative Marc Snyder would expand an existing wildfire mitigation grant program, allowing it to focus on how to make houses more resilient to wildfires. That legislation is now under review in the House Agriculture, Water & Natural Resources Committee. By Garry Boulard The construction industry’s need for new workers now exceeds 546,000 according to a new study. A proprietary model developed by the Washington-based Associated Builders and Contractors indicates that while construction employment has generally been consistently on the upside for the last two years, the numbers of those employed are still too low to meet current needs. That model, looking at the historical relationship between construction spending growth and employment, assumes the need of roughly 3,900 new jobs for every $1 billion in new construction spending. In a statement, Anirban Basu, chief economist with ABC, noted that “many contractors continue to experience substantial demand from a growing number of mega-projects associated with chip manufacturing plants, clean energy facilities, and infrastructure.” But at the same time, added Basu, there remains too few younger workers entering the skilled trades, “meaning this is not only a construction labor shortage, but also a skills shortage.” While entry-level construction workers have accounted for roughly 4 out of every 10 new jobs, the number of skilled construction workers has grown much more slowly. And in some segments of the industry, since as carpenters, it has actually decreased. The matter is only expected to worsen as more and more members of the Baby Boom generation retire in the coming years. The ABC study indicates that in order to meet industry demand, there will need to be at least 342,000 new workers hired by 2024. By Garry Boulard |
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