![]() Geopolitical fluctuations are continuing to pose risks to the normal flow of supply chains across the world, with no indication of the situation improving any time soon. So says a new report just issued by the London-based HSBC Holdings, which soberly notes that "alternative safer sources of supply” aren't always readily available. The report, Building Resilient Supply Chains Amid an Uncertain Geopolitical Landscape, points out that while global supply chain disruptions are nothing new, they are today entirely different from what procurement executives may have faced a century ago. “Simply put, geopolitical uncertainties and tensions have never had a greater potential to wreak havoc on trade flows,” says the report. At the same time, the explanation for such disruptions is easily identified: “Protectionist trade tensions are rife, leading to tariffs and trade quotas,” the report continues. Disruptions in the Red Sea, for example, says the report, “are prompting shipping lines to divert via southern Africa’s Cape of Good Hope, adding 10 days and 3,500 miles to the Asia-Europe shipping routes.” And things are only made more tenuous with the large number of elections scheduled to be held across the globe before the end of the year. Simply put: democracy can be hard on global supply chains. Noting that some 25% of the world’s population are, or will be, going to the polls, the report observes: “In many of those ballots, messages of protectionism, isolationism, and nationalism feature strongly,” all of which is “hardly welcome news for global businesses reliant on cross-borders trade flows.” In response, “procurement teams are coming to recognize that they must rethink their approach to sourcing; focusing on building supply chains that are more resilient to geopolitical tensions and potential disruptions.” Increasingly, those teams are now sourcing from markets closer to them, paying closer attention to just where key suppliers are located, and “trying to avoid sourcing from economies where trade disruptions and trade friction are likely.” There is, additionally, a move away from sole sourcing. The report also recommends that companies, in developing strategies to deal with potential disruptions, should focus on the areas where they may be most at risk, noting that “often these areas will be associated with specific regions or countries.” Putting together an analysis looking at the consequences of supply disruption, and reviewing what options are available in such situations, is also recommended, with the use of several suppliers that are recommended. By Garry Boulard Image Credit: Courtesy of Pixabay
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![]() A move to create an aerotropolis in Denver is taking a big step forward with the announcement that both Denver and Adams counties are now officially behind the effort. The idea has been bandied about for more than a decade as area economic development officials have discussed what to do with some 3,000 vacant acres that make up a portion of the Denver International Airport property. Those officials have pointed to the vast site as a perfect open space to build industrial, healthcare, and high-tech facilities, as well as offices and housing. What is now being called the Colorado Aerotropolis is largely animated by the simple presence of so much unused acreage. “Frequently, airports are built in areas that are already quite populated, and that’s going to be somewhat limiting,” Jeni Hall, director of Adam County’s Community and Economic Development department, remarked to the Denver Post. But the space connected to the Denver airport is quite the opposite: the second largest open land mass in the world, according to sources. In pushing for the development of the area, the Aerotropolis Regional Committee was earlier established and made up of representatives of both Adams and Denver counties, as well as the cities of Aurora, Brighton, Commerce City, Federal Heights, and Thornton. Ironically, according to local officials, one of the biggest selling points to the Aerotropolis is the very fact that it is connected to the Denver airport, which was opened in early 1995 and is now listed as the third-busiest airport in the country with nearly 78 million passengers using the facility last year. Similar aerotropolis projects have been launched at sites surrounding the Dulles International Airport in Washington, as well as the O’Hare International Airport in Chicago, and Sky Harbor International Airport in Phoenix. According to the publication Airport World, such developments reflect the changing nature of airports in general, which have evolved from “primarily air transport infrastructure to multimodal, multi-functional enterprises generating considerable commercial development within and well beyond their boundaries.” By Garry Boulard ![]() A long-time movie theater located in Louisville, Colorado may soon see a repurposing that will turn it into affordable staff and faculty housing. The University of Colorado at Boulder has announced plans to reconvert the Regal Cinebarre movie house, which ceased operations last month. Located at 1164 W. Dillon Road, the theater sits on an 8.8-acre site on the southwest side of the city and measures nearly 54,000 square feet. Designated as a Class B structure, the one-story building was built in 1995. The movie house itself was part of the more than 420-theater Regal Cinemas chain. The university bought the property - which is in a fast-growing residential and commercial part of the city - last fall for around $10 million. "This area has significant redevelopment potential," Nicole Mueksch, a spokesperson for the university, was quoted as remarking in the Colorado Hometown Weekly newspaper. The site itself, continued Mueksch, "is an ideal candidate for a mixed-use, transit-oriented development that includes housing." The new housing project will not happen overnight: a public input meeting is scheduled for July 25, with a precise plan for both the site and building set to be completed in December of next year. Construction could then begin by the summer of 2026. By Garry Boulard Image Credit: Courtesy of Unsplash ![]() In a sign of its beefed-up investigative and collection powers, the Internal Revenue Service levied an unprecedented $7 billion in tax penalties in 2023. For those studying the IRS' tax penalty numbers, that figure seems large. But its significance, according to various sources, is particularly noted when compared with the only $1.8 billion the agency assessed in 2022. According to a comprehensive report just published by the Wall Street Journal, the fines particularly hit business owners who underpaid their estimated quarterly income taxes, as well as investors, retirees, and gig workers. The newspaper also noted that the average estimated tax penalty in 2023 was up to $500 compared with around $150 the year before. The increase in penalties comes after the agency received some $80 billion in new federal funding in 2022 via the Inflation Reduction Act. According to the Federal News Network, that additional funding allowed the IRS to hire more than 3,700 additional agents last year. The new funding and expanded IRS payroll, the White House has since declared, was designed to "close the tax gap by specifically enforcing compliance by the wealthiest tax evaders." In speaking last fall to the publication Forbes, Danny Werful, IRS Commissioner, noted that the agency had identified some 1,600 millionaires who owed at least $250,000 in back taxes. He added that the years previous to passage of the Inflation Reduction Act saw "the lowest audit rate of wealthy filers in our history." The stepped-up IRS enforcement, says the Wall Street Journal, should serve as a "wake up call for millions of Americans who pay some or all of their income taxes quarterly rather than through paycheck withholding." The deadline for the most recent quarterly payment is June 17, which the agency says taxpayers must respond to in order to "avoid falling behind on their taxes and facing possible underpayment penalties." By Garry Boulard Image Credit: Courtesy of Pixabay ![]() A Request for Qualifications has been issued in Tucson for the eventual development of a 4.4-acre site in the city's historic Miracle Mile neighborhood. The RFQ has been published by Pima Community College, which owns the property in question and has in recent months been looking at ways to bring back what has been seen as a declining section of Drachman Street. That area was once the home to the Tucson Inn, a motel built in 1953 that is valued as an example of the era's Modernist and Googie architectural style. Two other motels, the Copper Cactus Inn and the Frontier Motel, which were both built in 1941, were also a part of the larger site that Pima Community College purchased in 2018. School officials have contemplated several new uses for the site, one of which is to repurpose the motels as both student and affordable housing. Earlier reports have indicated that Pima has also considered simply demolishing the structures to make way for new construction. Preservationists have urged that the buildings should be kept intact but used for new purposes, arguing that they represent a unique kind of architecture particular to southern Arizona both during and after World War II. Undoubtedly the most visual aspect of the properties is the Tucson Inn neon-sign, a sunburst imagery that for years attracted tourists. A combined effort bringing together the college with the Tucson Historic Preservation Foundation, as well as Tucson's Housing and Community Development, preserved the sign, leading to its re-lighting in late 2022. Pima's Request for Qualifications is looking for professionals to "design and implement a project to enhance opportunities for students, while also allowing for an economically viable development." The RFQ, which notes that Pima will "always retain ownership of the land," has a submission deadline of August 8. By Garry Boulard Image Credit: Courtesy of City of Tucson ![]() A prominent and growing building components manufacturer has received a green light to build two new production facilities on a 30-acre site in Casa Grande at the intersection of Thornton Road and Ash Avenue. With a business expanding into Colorado and Texas, as well as parts of the South, FrameTec company manufactures everything from roof and floor trusses to both interior and exterior walls. Its building components are used in both single and multi-family homes, as well as in hotels and a variety of wood-framed structures. FrameTec purchased the site in Casa Grande last fall for some $6.1 million. The company wants to build two separate buildings that will comprise a total of 254,000 square feet, both designed to help FrameTec keep up with a demand to help build some 7,000 homes a year. The project is expected to cost around $150 million. The company already has a 110,000-square-foot headquarters in Camp Verde. In a statement, Kyle Brock, FrameTec's chief executive officer, said that the new facilities will provide "significant capacity and innovation to the building industry, while providing homebuilders and general contractors with a 'one-stop shop' as a turnkey framing provider." By building the new facilities in Casa Grande, FrameTec is expected to double its current manufacturing capacity. Plans for the project were approved earlier this month by the City of Casa Grande Planning and Zoning Commission. Work on the first phase of the Casa Grande facilities is expected to begin sometime this fall, with the first plant completed two years from now. The second facility is slated for completion in 2027. By Garry Boulard Need for More Construction Workers, Once Inflation and Interest Rates Come Down, Says Report6/14/2024 ![]() A historic confluence of ongoing inflation, increased interest rates, and a demand for new housing is playing havoc with the construction industry’s need for workers, says a new industry study. According to the Construction Labor Market Report, published by the Washington-based Home Builders Institute, the fight against inflation can only be successfully waged if the housing market comes more into balance. But with “existing home inventory at levels making up half of what would be considered a balanced market and new construction constrained by supply-side headwinds, most notably the lack of skilled construction labor, the total increase in attainable housing supply the market needs appears to be years away.” “Ironically,” the report adds, “the higher interest rates being used to fight inflation are making this needed increase in home building that much more difficult.” Because the interest rates also negatively impacting the chances of builders and land development firms to secure loans, “ongoing restrictive monetary policy is harming housing supply and limiting the ability of market forces to lower shelter inflation.” Despite such obstacles, home builders remain in need of skilled labor, a need that will only increase once interest rates by the Fed are at last lowered. That lowering, says the report, “will improve housing supply and housing demand. And in turn, the nation will require additional construction workers to reduce the existing housing deficit of approximately 1.5 million homes.” The report states that currently there are over 8.2 million paid construction workers in the country, with an ongoing industry need of somewhere in the vicinity of 723,000 new workers a year in order to keep up with anticipated demand. In the last year, the industry has seen the hiring of some 75,600 new workers, comprising an increase of around 5,200 workers a month. At the same time, says the report, the number of open construction jobs as of this spring was at around 400,000, with the number of workers aged 25 and younger seeing a slight increase in the last decade from 9% to nearly 11%. By Garry Boulard Image Credit: Courtesy of Unsplash ![]() An ambitious plan to repair and replace miles of cracked, damaged, and missing sidewalks in Denver is expected to launch by the spring of next year. The much-discussed program came into being after voters in November 2022 passed a referendum calling upon the City to begin not just repairing sidewalks, but also curbs and even some driveways. According to City figures there are nearly 3,500 miles of sidewalks in the Mile High City, many built more than a century ago, and roughly 40% of them are in poor condition or too narrow. Entire sections of sidewalks have somehow disappeared through the years or were never there in the first place. The language to the 2022 ballot required the city’s Department of Transportation and Infrastructure to replace, repair, and build sidewalks in what supporters said would be a “timely and affordable manner.” Funding for the project is designed to come through the levying of a fee on property owners. The amount of the fees, however, remains uncertain, prompting the Land Use, Transportation, and Infrastructure Committee to recently ask the Denver City Council to hold off on implementing the program until the spring of 2025. Also set for 2025: a Sidewalk Master Plan that will be sent out for public comment laying out what sidewalks in what part of the city are most likely to first be built anew or repaired. A city that was officially incorporated in 1861, Denver still has in place miles and miles of sidewalks that were built in the late 19th century, some of which were made up of flagstones. By Garry Boulard Image Credit: Courtesy of Pixabay ![]() A final decision is expected to be announced next month regarding the big construction of a highway in southern New Mexico that will connect the cities of Santa Teresa and Sunland Park. What is being called the Border Highway Connector has long been promoted by state, regional, and local officials who see the route as an effective way of moving trucks between the busy Santa Teresa Port of Entry and, ultimately, Interstate 10. What is expected to be a nearly $80 million project, built between New Mexico State Roads 136 and 273, has been the subject of a series of public input meetings exploring the benefits of the new highway. Those benefits, according to New Mexico Department of Transportation officials, include providing a more direct access route to U.S./Mexico border crossings, and reducing ongoing traffic volumes on existing nearby routes. Designed as a four-lane highway running some 7.5 miles, the Border Highway Connector, according to the El Paso Times, is now being seen as a preferred route by the New Mexico DOT, noting that it has “received the highest rating among a final list of six route choices.” At least 5.5 miles of the new route will be comprised of vast portions of desert land. The New Mexico DOT has said that it may end up purchasing some of that land. A final official decision on where the Border Highway Connector will be built is expected to be announced in July. Work on what is expected to be a two-year project will most likely begin in early 2026. By Garry Boulard Image Credit: Courtesy of Unsplash ![]() Interest rates will remain exactly where they are for now, the Federal Reserve has just announced, putting an end to speculation that the rates may be on the verge of an immediate downward slope. In a press release, the Fed noted that both general economic activity and employment have remained strong in the spring and early summer, while "inflation has eased over the past year, but remains elevated.” For the last year, the Fed’s fund rate, which is the rate at which banks borrow and lend to one another, has remained in the range of anywhere from 5.2% to 5.5%. That steady rate contrasts dramatically with the historic increase recorded from March of 2022 to last September, when the rate went from well under 1% to 5.3%. Despite this most recent unchanged rate, Federal Reserve officials have signaled that they may well reduce borrowing costs sometime in the next half year. This is a sign, said the New York Times, “that they plan to be patient before turning a corner in their fight against rapid inflation.” The Federal Open Market Committee, in its statement, said that for now “the economic outlook is uncertain,” adding that committee members remain highly concerned about inflation risks. In issuing a policy change in the months to come, the Committee said it will “take into account a wide range of information, including readings on labor market conditions, inflation pressures and inflation expectations, and financial and international developments.” The collective forecast, thinks the publication Barron’s, “implies only a one quarter-point cut at the end of this year,” which nevertheless would be a “significant shift from earlier this year.” Such predictions comport with an economists’ poll conducted in late May by the Financial Times in which half of the 39 responding academics said they thought the Fed would make only a one quarter point cut before the end of the year. “Fed officials believe the continued strength of the jobs market gives them leeway to keep rates at a 23-year high of 5.2 to 5.5%,” said the publication, noting at the same time that central banks in both Canada and Europe have recently reduced rates. By Garry Boulard Image Credit: Courtesy of Pixabay |
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