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The Impending Demise of San Francisco Newspapers – Jan 14

Mon, 14 Jan 2013 13:44:51 +0000

Last weeks purchase of the SF Weekly by the owners of the SF Examiner and Bay Guardian was a shocking and telling development. It was shocking because few seemed to care, and telling because it showed the increasingly irrelevance of daily print English language media in San Francisco. I described in 2009 why the San Francisco Chronicles huge financial losses and circulation decline put its future as a daily print newspaper in doubt, and these losses have continued while the paper has fallen out of the top 25 in circulation for the first time (its print version had only 165,000 readers in March 2012, a nearly 50% drop since 2009). The Chronicles owner is looking to profit from real estate development, not journalism. Layoffs at the SF Weekly have begun and the staffs of the once combative weeklies will eventually merge. The end of the line for English language print newspapers in San Francisco is near.

The media world has dramatically changed since the Bay Guardians antitrust lawsuit against the SF Weekly went to trial in January 2008. At the time, a Beyond Chron article proclaimed that nothing less than the future of independent media was at stake.

But even the Guardians $15 million damage award could not save it. When Bruce Brugmann made over $2 million in profits from the papers sale in April 2012, he acknowledged, “Publishing is hard now, advertising is not easy. Not everyone is interested in buying newspapers in this country.”

Brugmanns profits came from selling the papers real estate, not its reporting. And last week Village Voice media sold the SF Weekly for a likely smaller sum than its litigation costs in the Guardian lawsuit (it also sold the Seattle Weekly, and is rumored to have the Village Voice on the block).

Todays young people do not need to pick up a newspaper to learn whats happening in the city, as they have smartphones, computers and/or apps. Both papers once made gobs of money from escort and dating ads. But these ads have shifted to online sites, and Village Voice medias current financial crisis stems from its being charged with operating the biggest forum for sex trafficking of under-age girls in the United States.

In the pre-Internet days, cafes were filled with people reading newspapers while drinking coffee. Today, laptops dominate the caf scene, and even novels are read on phones.

The print editions of the Bay Guardian and SF Weekly are not sustainable, and will either merge or keep separate online identities.

The Old Media World

The SF Chronicle continues its print edition despite losing millions annually because of the Hearst Corporations real estate venture with Forest City to develop its large 5th and Mission holdings. Its a lot easier to sell this massive development project if a) the Chronicle can promote it in its print edition and b) the projects office towers can be justified as subsidizing the survival of a print newspaper.

But I have come across nobody in the journalism field who believes that the Chronicles print edition has much of a future. Young people coming to the Bay Area are not becoming subscribers, and whats left of the papers declining circulation base is akin to the national Republican Party—it is disproportionately white, over 60 years of age, and not a leading target of advertisers.

The Chronicles print edition will either lose its independent status and become part of the newspaper groups led by the San Jose Mercury News and the SF Examiner, or be entirely replaced by sfgate.com.

The New Media World

Many argue that the online world is dependent on traditional newspaper content. They look at the many newspaper articles linked or reprinted on the Huffington Post and see old media reporting as driving traffic on online sites.

Yet the Huffington Post could survive quite well in the absence of most traditional newspapers. So could Salon, Politico, Daily Kos and other popular news sites. While the New York Times and other newspapers do provide information and stories vital to public policy debates, this is not a trait usually ascribed to the San Francisco Chronicle or most of the nations daily print publications (which itself is a factor in their declining circulation and revenue).

And while print newspapers disappear, online news sources face their own serious competition from smartphones and social media like Facebook and Twitter. Websites that took readers from traditional newspapers by shortening the news now are challenged by rapidly updated tweets and Facebook postings. This will likely mean even shorter online stories, as people sending texts and working on their own social media accounts are too busy to read longer stories.

I love print newspapers and wish their owners had been more visionary in addressing the challenges of online and social media competition. But the cost conscious owners of the Chronicle, Bay Guardian and SF Weekly are unlikely to invest in the type of real journalism that compels the attention of Bay Area readers—-leaving their print futures even more precarious.

Randy Shaw is Editor of Beyond Chron

Article source: http://www.beyondchron.org/articles/The_Impending_Demise_of_San_Francisco_Newspapers_10848.html

San Jose, South Bay redevelopment agencies prepare for post-agency world

Sun, 22 Jan 2012 23:58:46 +0000

San Jose’s storied redevelopment agency — the state’s second largest as measured by property tax revenue — will end on Feb. 1 with a whimper, not a bang.

Even before last summer, when the state Legislature signed off on Gov. Jerry Brown’s proposal to shut down all of the state’s agencies and divert their funding to pay for schools and local government services, the city’s redevelopment agency had axed dozens of positions. Its history of issuing too much debt, recent plunging local property tax assessments and continued cash grabs by the state had prompted those cuts, beginning in late 2009.

While that inadvertently helped to dull some of the pain here, other cities are feeling the impact all at once. Oakland, for example, recently announced it may have to lay off up to 400 employees whose pay is subsidized by redevelopment money. As the state’s Feb. 1 deadline looms to dissolve the agencies and establish successor entities to oversee their payments and priorities, the redevelopment fallout from Morgan Hill to San Mateo is reverberating around the South Bay.

“I guess we are fortunate that we had layoffs a few years ago due to the realities of the economy,” said San Jose Mayor Chuck Reed of the latest turmoil. “Many other cities are not, and are having to do it in very short order.”

San Jose’s once robust agency, with 134 employees at its zenith in 2002-03, has only 14 employees left, half of whom are contract workers. Even the agency’s

largesse that had helped pay the salaries of police officers, city workers and elected officials — about $11.2 million in 2010-11 — ended last summer.

“I’m very proud of what the agency has been able to accomplish over the last 20 years,” said agency managing director Richard Keit. “But there’s also sadness, not only for the staff that’s gone, but for the loss of a powerful tool that has created economic development for our city.”

Over the decades in San Jose, the agency financed such downtown marquee projects as the Fairmont Hotel, the HP Pavilion and the convention center. Now, its revenues will just cover the cost of the agency’s remaining staff salaries, a handful of projects already approved, and payments on its massive $3.8 billion of debt. It will take years to pay off those obligations before any money can be sent to local schools or services.

Yet other agencies with less debt will be able to help schools and special districts immediately, as Brown intended.

In Santa Clara County, nine cities maintain some kind of redevelopment agency; in San Mateo County, 12 cities have redevelopment agencies. Santa Cruz County’s agency went dormant last year, but its four cities all have redevelopment agencies.

The state Legislature created redevelopment in 1945 to eradicate blight that hampers economic development in a community. When a blighted area with low property value is developed, its property value increases and the difference, called “tax increment,” is collected by the agencies. That money is used to issue debt to pay for the next redevelopment project, a process that’s helped agencies finance major civic projects, affordable housing, community centers and business and neighborhood improvements.

Critics, however, say agencies have abused the definition of “blight,” and that development has increasingly come at the expense of taxpayers, who have been subsidizing private real estate ventures.

As city officials are crunching numbers to determine how many redevelopment-related jobs and projects will have to be cut, this newspaper found:

In San Jose, four of the agency’s staff of 14 will either leave or be let go by June 30. And Deputy City Manager Norberto Duenas said the $884,000 of agency funding that paid for five city jobs this year will be cut to $450,000 on July 1.

Funding remains for a few projects, including a major housing plan in the North San Pedro area and related infrastructure improvements; an upgrade to the local Center for Employment Training; and some building facade improvements in neighborhood business districts. About five acres of downtown land the agency had already purchased near Diridon Station for a ballpark or mixed-use development was transferred last year to a separate authority by the City Council.

The agency’s demise also means the city’s general fund is having to pick up about $18 million of annual debt payments on the Fourth Street Garage and convention center until those projects are paid off. Meanwhile, the city’s vaunted housing department, which counted on 20 percent of its annual budget from the agency, cut 20 positions last summer and anticipates no further layoffs at this time, said city Housing Director Leslye Corsiglia.

In Milpitas, which collects the second largest amount of annual tax increment revenue in the county, about 23 positions are expected to be cut by June 30. And City Manager Tom Williams says another 30 positions will be eliminated next fiscal year, though he hasn’t yet calculated how many layoffs that will mean.

Like others, Williams also worries about losing funding for major projects, including 7,200 units of housing planned for Milpitas’ Main Street transit corridor, a 1 million square feet of surrounding commercial development, and all affordable housing.

In Santa Clara, which boasts the county’s third largest amount of tax increment revenue annually, up to $40 million in redevelopment funds has been committed to help pay for the new San Francisco 49ers football stadium. Assistant City Manager Carol McCarthy insists that money is not in jeopardy, but critics say it remains unclear if that funding is still available. McCarthy said $6.7 million already has been set aside for the project, and that the 49ers will loan the balance to the stadium authority.

In Morgan Hill, about 20 employees have some or all of their salaries paid by the redevelopment agency, but city officials could not yet say how many jobs would be lost with redevelopment’s demise. Funding for a $7 million downtown garage and a $12 million extension of Hale Avenue from San Jose through Morgan Hill to Gilroy remains up in the air, said Assistant City Manager Leslie Little.

In East Palo Alto, where redevelopment money has transformed huge swaths of blighted areas into sleeks offices, housing, and a big box retail center, the agency’s $7.9 million budget this year includes four positions, three of which are filled. About $333,200 in agency funding pays for part of three city administrator salaries.

City officials say no decisions have been made about layoffs. If there are, said city spokeswoman Marie McKenzie, “I don’t know if it’s redevelopment staff, it could be other staff, because we still need an economic engine.”

In San Mateo, which owes its revitalized downtown in no small measure to the Century 12 movie theaters built with redevelopment dollars, redevelopment pays for the equivalent of 15 employees, mostly in housing and community development. Some positions have been kept vacant, however, and city officials say they hope to avoid layoffs.

Staff writers Bonnie Eslinger, Jason Hoppin and Aaron Kinney contributed to this report. Contact Tracy Seipel at 408 275-0140.

HOW MUCH PROPERTY TAX REVENUE?

Nine of Santa Clara County’s 15 cities have redevelopment agencies, which collected the following amounts of property tax revenue in 2008-09:
1) San Jose: $202,345,922
2) Milpitas: $39,380,204
3) Santa Clara: $31,861,837
4) Morgan Hill: $23,258,145
5) Los Gatos: $8,574,250
6) Sunnyvale: $8,264,077
7) Campbell: $7,434,684
Mountain View: $5,060,000
9) Cupertino: $1,211,128

Source: California State Controller’s Office, 2008-09 Redevelopment Annual Report

WHAT’S NEXT:

Not only must all of the state’s almost 400 redevelopment agencies be dissolved by Feb. 1, they also must be replaced by a successor agency that in most cases is headed by the city or county that established the redevelopment agency.
On Tuesday, the San Jose City Council is expected to name San Jose as the successor agency; by no later than May 1, that entity must assemble a seven-member oversight board.
The board members identified so far are Santa Clara Valley Water District Board member Don Gage; Santa Clara County Supervisor Dave Cortese and county Finance Director Vinod Sharma and San Jose Mayor Chuck Reed. Three others, including a former redevelopment employee, a community college and county school board designee, have yet to be named.

Source: Mercury News reporting

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Article source: http://www.mercurynews.com/bay-area-news/ci_19793159

Distressed Property Sales Drop, Despite Push to Sell

Tue, 21 Jun 2011 18:27:00 +0000

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The share of distressed sales in May, that is foreclosed properties and short sales (when the property is sold for less than the value of the loan), fell to 31 percent of all sales from 37 percent in April. Investors, who purchase a large share of these distressed properties, also represented a smaller share in May. So what’s going on?

We know there is still a huge supply of bank owned (REO) properties, and we also know that banks are pushing short sales on many more properties than ever before. But they are also pushing REO sales, thanks to new sales incentives from lenders and the GSE’s (Government-Sponsored Enterprises).

“Realtors and mortgage loan officers nationwide are driving mid-to-high end organic, short and distressed sales on the fear that buyers will be unable to qualify for loans once the QRM (Qualified Residential Mortgage) rules are in place requiring 20 percent down,” says mortgage market analyst Mark Hanson, describing new rules being considered for risk retention by banks (part of the banking overhaul legislation passed last summer).

Some bloggers though, writing in to me after the existing home sales report, claimed that Fannie and Freddie are holding on to REOs, trying to game home prices. Fannie strongly disputes that.

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Struggling to Make a House Call on Confidence

Fri, 17 Jun 2011 22:49:53 +0000

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Today’s report on consumer confidence, or the striking lack of it, is yet another sign that housing is going to be in a very sticky state for a while. It’s hard to say whether housing is weighing on confidence or lack of confidence is weighing on housing; the answer lies somewhere in the middle.

Next week is a big week for housing because we get the all-important readings on existing and new home sales for May. The pending home sales index, based on contracts signed, not closings, fell dramatically in April, and that has the housing prognosticators building another arc for the flood of bad news yet to come. Home builder sentiment fell in June, largely based on competition from distressed properties and high material costs, but you can bet the builders know we’re in for some tough sales numbers in their market as well.

I know I’ve said this before, but here I go again: All real estate is local, but confidence is national. Potential summer buyers, who are historically few and far between, will be watching the national numbers, as they try to time the bottom of the market, which is of course impossible to do.

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