Perspectives

“Florida is in serious financial difficulty again,” said NAIOP of Florida Government Affairs Director Jeff Rogo.

That’s putting it mildly. As the effects of the late but not lamented recession linger on, Florida legislators could be looking for more than $3 billion in spending cuts or tax and fee increases in order to balance this year’s state budget during the 2010 regular session that begins March 3.

“Florida Hometown Democracy would make California seem like a dreamy place to do business by comparison.” - Adam Putnam, Central Florida congressman and candidate for Florida Secretary of Agriculture at an appearance before the Tampa Exchange Club.

Finding enough new revenue and tax cuts to balance Florida’s budget in 2008 was a stiff challenge for the Florida Legislature. It took $2.2 billion in new taxes and fee increases along with $5.3 billion from the federal stimulus slush fund to balance Florida’s current $66.5 billion budget. It also took a lot of time, sweat, and wrangling to get it done. Other issues had to be ignored as legislators spent most of their time in last spring’s regular session with their green eye-shades on.

“It’s helpful to remember in times like these, that there have always been times like these.”

- Paul Harvey

OK, if we’re talking about the current recession, which we are, the times may not have been exactly like these. But they’re at least enough like these to provide some optimism about the future of America’s and Florida’s economies - and about the commercial real estate industry. Recessions in America have always been followed by recovery and prosperity. The burden of proof is on those who say it won’t happen this time.

The coming commercial real estate credit crunch is likely to affect the multifamily sector as well as office, retail and industrial. I talked about the problems that lie ahead - and about some trends in multifamily - with Marc Rosenwasser, president and CEO of Meadow Wood Property of Tampa and chairman-elect of the National Apartment Association. He will hold this top post for 2010.

In a hard-hitting three-part series titled, “The Second Wave of the Credit Crisis,” FoxBusiness.com takes on the issue of the huge number and amount of commercial real estate loans coming due in a credit-starved economy - and the collateral issue of declining commercial real estate values.

Fox reports the $3.5 trillion commercial real estate market is eroding, with values declining 39% since the peak in mid-2007, according to research done by the Massachusetts Institute of Technology’s Center for Real Estate.

Readers of the mainstream press have doubtless encountered stories on the possible fate of the commercial real estate sector as billions in loans come due during the rest of this year and in 2010.

The Wall Street Journal has hit the story a few times. A Tampa Tribune story carried the breathless headline, “Next Collapse May be Worse,” and hinted at a “meltdown” in commercial that could be worse than and have more far-reaching economic consequences than the residential infarct.

“Well,” as Richard Nixon said after the election of 1968, “You can’t lose ‘em all.”

Okay, I made up that quote. But it fits Florida Hometown Democracy’s situation. After failing to get on the ballot in 2004, 2006 and 2008, the ballot-box planning constitutional amendment will be on the statewide ballot for November 2010.

Now that the high-fiving has died down in the business and development communities about Florida’s new growth management law, aka The Community Renewal Act, it’s time to start trying to figure out what the new law will mean in practice.

This one could be a fertile ground for demonstrating Thornberry’s 12th Law of Political Thermodynamics, to wit: If it weren’t for unintended consequences, we would hardly have any consequences at all.

In the first week or so after the 2009 regular session of the Florida Legislature ended, there was a fair amount of editorial carping across the state against the growth management bill passed by both houses but yet to be signed by Gov. Charlie Crist.

The Hillsborough County Board of County Commissioners passed a resolution calling on the governor to veto the bill. There was other flack from other quarters from those saying the bill caves in to developers, literally giving them a free ride on transportation.

When something good happens in Florida commercial real estate, you’ll often find Tampa land use attorney Ron Weaver’s name attached to it somewhere. (He’s so active in industry affairs many of his colleagues are convinced he is several people.)

So no one should be surprised that Real Estate Lives (“Lives” pronounced with the long-i) was his idea.

This one isn’t about a specific deal or about the rules of doing business. Real Estate Lives is about attempting to alleviate the very real pain in an industry that has been harder hit than others in the current recession.

As this is written in early March, spring training is well under way - with exhibition games being played daily across Florida. But it’s not the national pastime and the prospects of favorite teams that are on the minds of most in the Florida commercial real estate industry. The major league worry among commercial real practitioners is where will the money come from to refinance the billions of dollars of commercial real estate debt that will mature in 2009.

The Florida Legislature convened for its regular session March 3. The state’s commercial real estate organizations are working on their wish lists for the session. But this may not be the year to get much done through the legislature. Anything that would cost more than $1.50 is a non-starter this year.

That’s not your neighbor’s grill. That’s the smell of pork coming all the way from Washington.

Our rookie president hasn’t submitted a budget yet, and already he’s whooped up, received and signed the biggest emergency spending bill, by far, in the history of the republic. He toured the country, including Florida, in what amounted to a continuation of his presidential campaign, threatening that the nation had a choice between passing this unexamined monster or falling into another Great Depression from which we might not recover for years.

The Washington-based Competitive Enterprise Institute, a think tank devoted to promoting free enterprise and limited government, is setting up operation in Tallahassee with an office specifically devoted to insurance issues throughout the Southeast.

Florida is a natural for an office focusing on insurance issues. We’ve suffered severe disruptions from sharply rising property insurance rates because of damaging hurricanes in the state in 2004 and 2005 and promises of continued above-average storm conditions for years to come.