Sun News - Crews have started clearing out the two-tower Golden Villa hotel in downtown Myrtle Beach, which will be demolished next week, to make way for a new Ferris wheel. Al Mers, a partner in Pacific Development, the St. Louis-based company that's bringing the 187-foot-tall SkyWheel to downtown Myrtle Beach, said work is moving ahead as crews remove asbestos from the hotel in preparation for its demolition. The Golden Villa has stood in downtown Myrtle Beach for many years, becoming a regular vacation spot for families returning to the Grand Strand. On some travel websites, vacationers have written comments asking that the hotel not close, offering their fond memories of staying there as children or with their own children. "There's something to be said for the older places remaining, but it's also in themiddle of the entertainment district," said Myrtle Beach City Councilman Randal Wallace. "This is an opportunity to bring a fun, new attraction to downtown." The demolition is scheduled to begin Monday or Tuesday, and Mers said the lot at 1106 N. Ocean Blvd. should be flat by about Oct. 22.
"The first thing people will see going up are the piers," he said. Because the wheel and the adjoining building are being built in the hurricane surge zone, they must be constructed on a deck that will sit 20 feet above sea level - 3 to 4 feet above the ground on the lot. Piers to hold the wheel's steel frame will sink 30 feet deep, Mers said. Pacific Development plans to place a camera atop the Slingshot, a thrill ride across the street, to shoot time-lapse photos of the hotel demolition and the wheel complex's construction to produce a 12-minute video that will show people the process. The wheel is part of the ever-changing face of downtown Myrtle Beach. Wallace said he remembers the 1970s when downtown's then-tallest feature, the Astro Needle, was in operation. It was a 200-foot attraction at the corner of Eighth Avenue North and Chester Street - an intersection that doesn't even exist anymore.
"When I was a little kid, it was really a neat ride. I was so small, and it seemed huge," Wallace said. "You got in this UFO-like car and it took you up to the top and spun you around, and then brought you back down." But the needle, which opened in 1970, was removed after Burroughs & Chapin Co. Inc. bought the site and expanded The Myrtle Beach Pavilion Amusement Park to Kings Highway. Wallace said he's looking forward to the new SkyWheel and the views people will have from the gondolas. When the SkyWheel is finished, it will be one of the downtown district's tallest structures. The height limit is 240 feet, and there are nine resort towers that are between 20 and 23 stories, said Fire Marshal Bruce Arnell, including the Ocean Forest Plaza, the Carolina Grand and the Grand Atlantic. The Slingshot frame is about 170 feet tall and stands on a small hill, and when the SkyWheel is finished, it should be about 200 feet tall.
The wheel is scheduled to open in the first week of May. "It's like putting a puzzle together," said Pacific Development partner Todd Schneider. The steel frame is being constructed in pieces outside St. Louis, and the "ballooned-out-square" gondolas that will carry riders are being crafted in Switzerland, Mers said. "They are like what you'd see on a ski lift," he said. "They are the latest upgrade - the fourth generation." Each gondola is temperature controlled, and because they are clear from floor to ceiling, each will have a slight tint to help keep it cool in the summer and make scenery watching more comfortable. Once the lot is cleared and prepared, about "50 truck loads" of steel will arrive and be stored in Myrtle Beach, delivered to the site as needed. Mers said the A-frame could be here by December. Mers said the project, while not that big by construction standards, is creating local jobs. Rhino Demolition-Environmental from Little River is removing the asbestos, and Thompkins & Associates heavy construction company will demolish the hotel. As that work goes on, Mers said, other details must be finalized, including what size motors to use for heating and cooling. Pacific Development has one more meeting with the Myrtle Beach Community Appearance Board, likely later this month, and all the pre-construction requirements will be filled, Mers said. "So far, everyone has liked the design," he said. "But we can't finish the plans until all those little details are settled."
Tuesday
Bank Watch: Regulator Says Bankers, Not Bricks, Main Reason Behind Most Bank Failures
CoStar - Don't blame the current wave of bank failures on commercial real estate; much of the blame belongs to bad bankers. While it is clear that commercial real estate and construction and land development loans have figured in most every bank failure in the last couple of years, it is also becoming evident that bad bank management and, in some cases, outright deceit, were at the core of many of the banks' problems. In addition, more regulatory supervision may have mitigated some of those problems, according federal bank failure audits. The Federal Deposit Insurance Act requires the Federal Deposit Insurance Corp.'s (FDIC) Office of Inspector General (OIG) to conduct a material loss review of individual bank failures. A review of the seven material loss reviews completed and released this summer by the OIG show common themes.
Many failed banks' boards and managers did not implement adequate controls to identify, measure, monitor and control the risks associated with significant and growing CRE loan concentrations; Many failed banks exhibited weak internal controls and questionable credit underwriting standards; and They financed growth in lending through potentially volatile non-core liabilities such as higher-priced certificates of deposit, including brokered deposits. In the seven audits, the OIG also pinpointed instances of insufficient federal oversight. In general, the audits suggested that the FDIC, while good at following required supervisory procedure, could have done more. For example the audits suggested the FDIC should have: Placed greater supervisory emphasis on more forward-looking assessments; Taken a more aggressive supervisory approach where risky loan concentrations were growing rapidly; Issued more critical assessments when banks were not adhering to original business plans; and Taken further steps to ensure that management and internal controls were commensurate with the business strategy.
Many failed banks' boards and managers did not implement adequate controls to identify, measure, monitor and control the risks associated with significant and growing CRE loan concentrations; Many failed banks exhibited weak internal controls and questionable credit underwriting standards; and They financed growth in lending through potentially volatile non-core liabilities such as higher-priced certificates of deposit, including brokered deposits. In the seven audits, the OIG also pinpointed instances of insufficient federal oversight. In general, the audits suggested that the FDIC, while good at following required supervisory procedure, could have done more. For example the audits suggested the FDIC should have: Placed greater supervisory emphasis on more forward-looking assessments; Taken a more aggressive supervisory approach where risky loan concentrations were growing rapidly; Issued more critical assessments when banks were not adhering to original business plans; and Taken further steps to ensure that management and internal controls were commensurate with the business strategy.
US Banks Report CRE Loan Troubles Subsiding Amid Strong Quarterly Earnings
CoStar - It appears that commercial real estate adversity at U.S. banks has reached the high-water mark and is abating. According to the Federal Deposit Insurance Corp. (FDIC), second quarter numbers show 90-plus day delinquencies leveling and eventually set to decline because 30-89 day delinquencies are declining. Also, net charge-offs are leveling or declining. The only CRE distress levels still rising at banks is the amount of foreclosed assets, the total of which now stands at $29.77 billion, up from $7.4 billion two years ago.
Also, the banking industry's quarterly earnings of $21.6 billion are up dramatically from the year-ago loss of $4.4 billion and represent the highest quarterly earnings since third quarter 2007. Almost two out of three institutions (65.5%) reported higher year-over-year quarterly net income. And while the proportion of institutions reporting quarterly net losses remained high at 20%, it was down from more than 29% a year earlier. "This is the best quarterly profit for the banking sector in almost three years," said FDIC chairman Sheila C. Bair. "Nearly two out of every three banks are reporting better year-over-year earnings. As long as economic conditions remain supportive, most institutions should maintain profitability and increase their capacity to lend."
Reductions in loan-loss provisions underscored improvement in asset quality indicators during second quarter 2010. Insured institutions added $40.3 billion in provisions to their loan-loss allowances in the second quarter. While still high by historic standards, this is the smallest total since the industry set aside $37.2 billion in first quarter 2008 and is $27.1 billion (40.2%) less than the industry's provisions in second quarter 2009. Fewer than half of all institutions (41.3%) reported year-over-year reductions in quarterly loss provisions. Only 40% of community banks (institutions with less than $1 billion in assets) reported year-over-year declines. Reductions were more prevalent among larger institutions. More than half (56.2%) of institutions with assets greater than $1 billion had lower provisions in the second quarter. The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) declined by $19.6 billion (4.8%) during the second quarter. This is the first quarterly decline in noncurrent loans since first quarter 2006. Noncurrent levels declined in most major loan categories during the quarter. The sole exception was nonfarm nonresidential real estate loans, where noncurrents increased by $547 million (1.2%). However, that was the smallest quarterly increase in three years. The largest reduction in noncurrent loans in the quarter occurred in real estate construction and development loans, where noncurrents fell by $5.9 billion (8.3%). This is the third consecutive quarter that noncurrent C&D loans have declined. Multifamily delinquencies also declined.
Total loan-loss reserves of insured institutions fell for the first time since fourth quarter 2006, declining by $11.8 billion (4.5%), as net charge-offs of $49 billion exceeded loss provisions of $40.3 billion. The number of institutions on the FDIC's "Problem List" rose from 775 to 829. However, the total assets of "problem" institutions declined from $431 billion to $403 billion. Also, while the number of "problem" institutions is the highest since March 31, 1993, when there were 928, it is the smallest net increase since the first quarter of 2009. Forty-five insured institutions with combined assets of $47.3 billion failed during second quarter 2010. For 2010 through the end of the second quarter, 86 insured institutions with combined assets of $69.4 billion failed, resulting in an estimated current cost to the DIF of $16.8 billion. "Without question, the industry still faces challenges. Earnings remain low by historical standards, and the numbers of unprofitable institutions, problem banks and failures remain high," FDIC chairman Bair added. "But the banking sector is gaining strength. Earnings have grown, and most asset quality indicators are moving in the right direction."
The U.S. thrift industry also reported a profit in the second quarter ($1.49 billion), the fourth consecutive quarterly profit for the industry. "The thrift industry has clearly improved from the height of the recession but has certainly not recovered in full," noted OTS acting director John E. Bowman. "The performance of the industry reflects the state of the overall economy and the stresses from high unemployment, weakness in the housing market and the spread of weakness to the commercial real estate market."
Also, the banking industry's quarterly earnings of $21.6 billion are up dramatically from the year-ago loss of $4.4 billion and represent the highest quarterly earnings since third quarter 2007. Almost two out of three institutions (65.5%) reported higher year-over-year quarterly net income. And while the proportion of institutions reporting quarterly net losses remained high at 20%, it was down from more than 29% a year earlier. "This is the best quarterly profit for the banking sector in almost three years," said FDIC chairman Sheila C. Bair. "Nearly two out of every three banks are reporting better year-over-year earnings. As long as economic conditions remain supportive, most institutions should maintain profitability and increase their capacity to lend."
Reductions in loan-loss provisions underscored improvement in asset quality indicators during second quarter 2010. Insured institutions added $40.3 billion in provisions to their loan-loss allowances in the second quarter. While still high by historic standards, this is the smallest total since the industry set aside $37.2 billion in first quarter 2008 and is $27.1 billion (40.2%) less than the industry's provisions in second quarter 2009. Fewer than half of all institutions (41.3%) reported year-over-year reductions in quarterly loss provisions. Only 40% of community banks (institutions with less than $1 billion in assets) reported year-over-year declines. Reductions were more prevalent among larger institutions. More than half (56.2%) of institutions with assets greater than $1 billion had lower provisions in the second quarter. The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) declined by $19.6 billion (4.8%) during the second quarter. This is the first quarterly decline in noncurrent loans since first quarter 2006. Noncurrent levels declined in most major loan categories during the quarter. The sole exception was nonfarm nonresidential real estate loans, where noncurrents increased by $547 million (1.2%). However, that was the smallest quarterly increase in three years. The largest reduction in noncurrent loans in the quarter occurred in real estate construction and development loans, where noncurrents fell by $5.9 billion (8.3%). This is the third consecutive quarter that noncurrent C&D loans have declined. Multifamily delinquencies also declined.
Total loan-loss reserves of insured institutions fell for the first time since fourth quarter 2006, declining by $11.8 billion (4.5%), as net charge-offs of $49 billion exceeded loss provisions of $40.3 billion. The number of institutions on the FDIC's "Problem List" rose from 775 to 829. However, the total assets of "problem" institutions declined from $431 billion to $403 billion. Also, while the number of "problem" institutions is the highest since March 31, 1993, when there were 928, it is the smallest net increase since the first quarter of 2009. Forty-five insured institutions with combined assets of $47.3 billion failed during second quarter 2010. For 2010 through the end of the second quarter, 86 insured institutions with combined assets of $69.4 billion failed, resulting in an estimated current cost to the DIF of $16.8 billion. "Without question, the industry still faces challenges. Earnings remain low by historical standards, and the numbers of unprofitable institutions, problem banks and failures remain high," FDIC chairman Bair added. "But the banking sector is gaining strength. Earnings have grown, and most asset quality indicators are moving in the right direction."
The U.S. thrift industry also reported a profit in the second quarter ($1.49 billion), the fourth consecutive quarterly profit for the industry. "The thrift industry has clearly improved from the height of the recession but has certainly not recovered in full," noted OTS acting director John E. Bowman. "The performance of the industry reflects the state of the overall economy and the stresses from high unemployment, weakness in the housing market and the spread of weakness to the commercial real estate market."
Plans OK'd for Brunswick County housing development - Despite traffic concerns, South Cape project gets a thumbs up
Star News - A new gated community off N.C. 133 earned the approval of the Brunswick County Planning Board Monday evening. It's a major development at a time when the economy has greatly slowed construction projects in the area. It's also connected to a company that has ongoing legal issues with its yet-to-be-completed subdivisions elsewhere in the county – and it lies right in the path of the proposed Cape Fear Skyway. The development, known as South Cape, is slated to contain 290 single-family homes, 144 multi-family units and 81 townhomes, according to documents filed with the county. It would include about 400 acres on either side of N.C. 133 near Mallory Creek. After an extensive presentation, several board members raised concerns about the effect a new development would have on N.C. 133, which they described as already stressed. The board also discussed at length whether the development's streets should be made to connect with future surrounding neighborhoods. But the only additional requirement applied before approval was that an archaeological survey be conducted on the area before land is cleared. The property, which abuts the Cape Fear River, is owned by BLT Trust, with William E. Saunders Jr., as trustee. The trust is an affiliate of The Coastal Companies, an umbrella unit for several subdivisions in Brunswick County in different stages of completion. Its CEO is Mark Saunders, the son of William Saunders, TCC attorney Elaine Jordan said.
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