Workers align concrete bleachers seats in the upper decks of the new stadium.
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Court Decision Favors Resolution for St. Louis Cardinal Ballpark Bonds
ST. LOUIS, (BUSINESS WIRE) March 9, 2005 - Fitch Ratings views the March 3 circuit court ruling in the Don P. Moschenross, et. al. v. St. Louis County, Missouri lawsuit as favorable to holders of the Missouri Development Finance Board (St. Louis County), Missouri's $45.8 million taxable St. Louis Cardinals ballpark project bonds, series 2003.
Fitch rates these bonds 'AA' and placed these bonds on Rating Watch Negative on Feb. 11. If the case is not appealed or the circuit court's ruling is upheld, Fitch expects to affirm the rating and remove the bonds from Rating Watch Negative.
The ruling finds that Proposition A, which challenged any direct or indirect county support of professional sports facilities, does not apply retroactively to the Missouri Development Finance Board bonds. The ruling protects the ordinance, the cooperative agreement, the project agreement, and the bonds against challenges and restrictions presented by Proposition A. If the ruling is not appealed, it enables St. Louis County to appropriate the necessary funds to pay bondholders as scheduled.
Citing that retrospective laws would impair contractual obligations and are constitutionally prohibitive, the court affirmed that enforcement of Proposition A cannot invalidate agreements reached by parties to the bond issue. Since the County Council reviewed stadium project costs at the time of the transaction and is vested with the right to appropriate repayments annually, the court believed that altering the provisions of the appropriation-based financing after bond issuance would impair the county's contractual obligations.
Although the constitutionality of Proposition A with respect to future sports facility transactions was not addressed directly in this ruling, Fitch believes that the circuit court's decision validates the financing agreements of the bonds and the county's legal ability to appropriate necessary payments under the contractual agreements. Proponents of Proposition A still have the right to appeal the court's decision. Similar sports facility transactions in the future must consider the proposition's requirements, but the county will be in a more flexible position to accommodate them, either through meeting the proposition's requirements or seeking voter approval for external financing.
Missouri to Receive One Million for Energy Aid
ST. LOUIS, (SLFP.com) March 6, 2005 - The Department of Health and Human Services (HHS) has released an additional $50 million in emergency funds to be provided to states and territories from the Low Income Home Energy Assistance Program (LIHEAP).
The money is designed to help low-income families pay their energy bills. Missouri will receive $1,006,533. Illinois will receive $1,897,924.
"Given the rising costs of energy, and extended cold spells throughout many parts of the nation, this aid will make a positive difference for many low-income families," said Assistant Secretary for Children and Families Dr. Wade F. Horn. "President Bush is making sure these families are able to pay their energy bills."
The heating aid uses contingency funds made available by the FY 2005 omnibus appropriations bill. The $50 million is over and above the $1.6 billion states have received so far this season, plus $100 million in emergency funds last December and an additional $100 million in January.
Each year, LIHEAP helps more than 4.5 million low-income families across America pay the costs of heating their homes in the winter and cooling their homes in the summer.
Individuals interested in applying for LIHEAP assistance should contact their local/state LIHEAP agency or click on the agency directory at http://www.acf.dhhs.gov/programs/liheap/directry.htm. The directory can help people locate the state office that administers LIHEAP in communities across the country.
Estate Outlook Forecasts Notable Improvements
ST. LOUIS, (PRNewswire) March 6, 2005 - Continued improvement in the national economy and sustained infusion of capital into real estate should result in more notable improvements in all property sectors this year, reports real estate industry expert Nicholas Buss, Ph.D., of PNC Real Estate Finance, member of The PNC Financial Services Group, Inc.
However, Buss notes that improving property market fundamentals -- accelerated leasing traffic, backfill of under-occupied office space and growing business confidence -- could be overshadowed by the direction of real estate capital flows in 2005.
These findings are included in PNC Real Estate Finance's annual forecast, the 2005 Real Estate Industry Outlook entitled, "Where Do We Go From Here?"
"Real estate today is more liquid than ever before, and by a wide margin. This weight of capital, and the competition it has created, pushed prices up and yields down," said Buss. In 2004, Buss notes, sales of institutional real estate jump nearly 50 percent to $180 billion and the commercial real estate debt market grew by 10 percent to $2.2 trillion, as yield-oriented investors (both debt and equity) continued to flock to real estate in record numbers.
While Buss predicts the strong flow of capital will remain a critical driver of the health of real estate in 2005, he also notes the influence of rising interest rates and decreasing real estate interest yields on investor behavior. Overall cap rates currently hover in the 7.5 percent range, down almost 100 basis points over the past year.
"We saw in 1998 that capital can quickly flee a sector, even if that sector is performing well. Although considered to be an unlikely event yet in 2005, real estate must be cautious about potentially finding itself vulnerable if fickle investors chase better returns in another sector," said Buss.
While 2005 is predicted to be another good year for the housing sector, Buss does not expect another record-setting year. And, for the first time in the last three years, retail may have to be satisfied being back in the pack rather than leading the race. Predicted by Buss to be the most challenged sector in 2004, the office sector has steadily improved and is viewed with "cautious optimism" this year. Other highlights from the 2005 Real Estate Industry Outlook highlights include by sector:
- Office: More predictable and stable job growth translates into
increased demand for office space and will spur new leasing activity at
a measured, not rapid, pace. Net improvement should move national
office vacancy rates below 15 percent by year-end, but will not be
enough to transfer pricing leverage back to the landlords. Core office
markets will again see the bulk of investor interest in 2005. This may
leave the door open for some relative "bargains" in smaller, non-core
markets -- but tread carefully; like a mousetrap, these markets are
easier to enter than exit.
- Apartment: Strap in, it could be a bumpy ride for apartments in 2005.
Demand should start to stabilize as job growth continues and mortgage
rates move higher -- both trends that should boost renter household
formation. But continued construction will likely overshadow these
gains, keeping the national vacancy rate in the 7 percent range (or
higher). Adding more confusion to this outlook is the condo market.
If the condo market slows, some of the pricing pressure will be removed
from the apartment sector -- possibly impacting the capital-driven
construction that is currently occurring and creating additional stress
in the sector.
- Retail: Although the retail sector will face many challenges in 2005,
it is tough to bet against it. Consumers may be more selective in
their spending, but they will continue to spend. As a result,
retailers will have a more mixed year, with clear winners and losers.
Overall it will be an okay year for the sector, just not a great year.
- Hotel: The economy should continue to support respectable growth in
room-night demand and supply will not be a near-term issue. As a
result, we expect occupancy for the year to be in the 62.5-63 percent
range. Landlords will continue to be able to push rates. As always,
there are numerous risks to this outlook including rising oil prices,
airline bankruptcies and terror threat -- but on balance, it should be
another good year for the hotel sector.
- Industrial: Demand, which picked up nicely in 2004, should strengthen
slightly in 2005 as the national economy settles into its expansionary
mode and the goods producing sector continues its measured expansion.
Although Buss expects the national vacancy rate to fall below 11
percent, improvement may be slowed by increased construction activity.
While this is warranted in some markets, it could create problems and
delay recovery in others -- developers must be careful not to get ahead
of the market.
- Single-Family: After two years of hard labor, the housing sector will
take a much-deserved breather in 2005. Mortgage rates will rise to the
mid-6 percent range, taking some of the wind out of the sector's sails
and likely reducing both sales activity and starts by 5-10 percent.
The one downside-risk is that all of the "forward buying" of the past
two years may result in a more significant slowdown as rates rise.
A variety of macro-economic challenges in 2005 could also impact the rate of improvement, according to Buss, including uncertainty over energy prices, the weakening U.S. dollar and the possibility of terrorist attacks at home and abroad.
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