Monday, March 29, 2010

Triangle Company Tapped to Grow Dickey's Barbecue in NC

Triangle Business Journal

GMW Carolina Inc., which owns Dickey’s Barbecue Pit restaurants in Cary and Durham, has signed an exclusive deal to grow the Dallas, Texas-based chain in North Carolina.

Gregory Woloszczuk, head of GMW Carolina, says this is the first time Dickey’s Barbecue Restaurants Inc. has entered into a statewide development deal with a franchisee. Dickey’s usually deals with franchisees directly. In this case, however, Dickey’s will rely on GMW to sign and support franchisees in the Tar Heel State.

By leveraging local expertise, Dickey’s believes it will be able to open locations faster and reduce expenses, Woloszczuk says.

GMW Carolina has signed up three franchisees to develop restaurants in the Triad, the Sandhills and the New Bern area. GMW also is looking for Raleigh real estate to add its third Dickey’s location, Woloszczuk says.

Woloszczuk expects each of his three franchisees to open at least one restaurant before the end of the year, saying that all three currently are in lease negotiations. He hopes to have his third Triangle location locked up before 2011.

In the meantime, Woloszczuk will be looking to sign up franchisees in the Charlotte, Fayetteville and Asheville areas over the next six months.

Woloszczuk and his wife, Maureen Woloszczuk, founded GMW Carolina in 2006. They opened the Cary Dickey’s location in September 2007 and the Durham restaurant in April 2008.

GMW has 25 employees. Each Dickey’s has about a dozen workers.

Dickey’s, which was founded in Dallas in 1941, features hickory-smoke barbecue in a variety of plates and sandwiches.

Sunday, March 28, 2010

Take Two: Government Tries New Fix for Mortgage Crisis

WASHINGTON (AP) - The government's bold new plan to stem the foreclosure crisis aims to succeed where previous efforts have fallen flat. Yet just as before, the odds are long, and many struggling borrowers won't qualify.

In theory, the effort unveiled Friday would help millions of troubled homeowners who owe more on their mortgages than their homes are worth, or who are jobless and need a break on their payments.

But it depends on cooperation from investors and bankers, many of whom have been locked in disputes over whether to reduce the debt owed by homeowners.

And just like the bank bailouts, this rescue plan poses risks. If it doesn't slow the wave of foreclosures or if home prices nosedive, the tentative recovery in the housing market could fizzle.

The Obama administration says the plan will help stabilize the real estate market by keeping many borrowers out of foreclosure. If it succeeds, the plan would limit damage to the overall economy.

The new effort is designed to help two groups:

- Borrowers who owe more on their loans than their houses are worth. More than 15 million homeowners fall into this category, according to Moody's Analytics. About 10 million of them owe at least 20 percent more than their house's current value.

Their mortgage companies can cut the total amount they owe, or they can refinance into loans backed by the Federal Housing Administration. FHA will get $14 billion in incentive money from the federal bailout fund.

- Unemployed borrowers. People receiving unemployment benefits would have their mortgage payments cut to no more than 31 percent of their monthly income for three to six months.

That's intended to give homeowners more time to find a job. Once they do, they may qualify for a loan modification that would permanently reduce their payments under the administration's existing $75 billion loan modification program.

The plan aims to help 3 to 4 million borrowers avoid foreclosure - the same target the administration tried to reach with its original plan last year. Even with the changes, the effort will likely prevent no more than 1.5 million foreclosures, estimates Mark Zandi, chief economist at Moody's Analytics.

Disputes among banks and investors, who would have to approve any cuts in loan principal, could prevent the effort from stopping more foreclosures, as could another drop in home prices.

"Practically speaking, this is probably going to prevent foreclosures. But I don't think they're ever going to reach 3 to 4 million homeowners," said Chris Mayer, a real estate professor at New York's Columbia Business School. "These plans always turn out to be harder than we think."

The administration's existing program to prevent foreclosures hasn't made much of a dent in the foreclosure crisis. A lack of planning and shifting rules on who qualifies produced a huge backlog in the program, the special inspector general for the federal financial bailout fund told lawmakers this week.

Still, analysts said this effort has a better chance of success than past efforts because it would reduce principal for some struggling borrowers - a method more effective at helping homeowners than reducing interest payments or other forms of aid. Laurie Goodman, a widely followed mortgage securities analyst with Amherst Securities Group, called it "a huge step forward."

The plan comes after pressure from the administration's Democratic allies in Congress to intensify efforts to help Americans at risk of losing their homes.

The overhauled plan came together after several months of negotiations between the Treasury Department, major banks and investors in mortgage securities. A major sticking point so far has been getting everyone involved to agree on restructuring loans.

The problem is that most of the troubled mortgages aren't owned by the banks themselves. They were bundled into securities during the housing boom and sold to investors.

To reduce principal payments on those mortgages, banks often must get permission from the investors who hold the securities - and may not be willing to take less.

Banking industry officials were optimistic that investors would negotiate.

"You have two choices: Modify the mortgage and help a borrower stay in their home or possibly get nothing if they foreclose," said Scott Talbott, the chief lobbyist for the Financial Services Roundtable, an industry group.

The plan risks angering Americans like Jim Truschel, a homeowner in La Mirada, Calif., who said he was disappointed the government is spending taxpayer money on another homeowner bailout effort.

"I feel very sorry for the people that are in these situations, but they have to be somewhat to blame themselves," said Truschel, a retiree. "They should have realized that they were getting into things that they weren't going to be able to pay for."

The administration says irresponsible borrowers will not benefit. The plan will not help investors, speculators or "Americans living in million-dollar homes or defaulters on vacation homes," an administration fact sheet said.

Diana Farrell, a White House economic adviser, acknowledged the plan won't prevent many of the expected 10 to 12 million foreclosures expected over the next three years. Doing so, she said, "wouldn't be fair, it would be too expensive and we probably wouldn't succeed in any case, because many people got into homes that they simply cannot afford."

Rep. Barney Frank, chairman of the House Financial Services Committee, praised the new steps, particularly giving jobless borrowers a break on their payments for three to six months.

"The whole economy is hurt by these foreclosures," Frank said.

For taxpayers, the government's plan carries some risk. Lenders will probably sell their most troubled loans to the FHA so they can be insured against default, said Mayer of Columbia Business School. Experts have warned that the FHA faces rising losses from foreclosures and might need a bailout.

"There's more risk to taxpayers," Mayer said. "There's a big incentive for lenders to give the government the worst of their loans, the ones they fear they won't get paid back on."

One "underwater" homeowner, Joe Clarke, a police officer in Oxnard, Calif., welcomed word of the plan. He owes $390,000 on his home, which is only worth about $250,000, and he fears his adjustable-rate loan will reset to a higher rate in August.

"I've made my payments," he said. "I didn't walk away from my house. I'm just not being afforded the opportunity to refinance my home, even at the current value, without taking the principal off."

Thursday, March 18, 2010

$40 Million Development Project Planned in Raleigh

News & Observer

A Charlotte developer that has spent the last three years assembling property at the edge of downtown is moving ahead with plans to transform an abandoned industrial area between N.C. State University and downtown Raleigh into a mix of apartments, townhouses and shops.

In a rezoning request filed with the city of Raleigh this month, FMW Real Estate outlines plans to redevelop a 6.67-acre site just west of the intersection of West Morgan and Hillsborough streets.

The $40 million first phase would include a 5-story, 240-unit apartment building, 32 townhouses along Ashe Street and 10,000 square feet of restaurant, retail and office along Morgan Street, Wakefield Avenue and Tryon Street.

 Jim Zanoni, who owns FMW along with Walker Wells, said the company hopes to break ground by next spring.

FMW paid about $14.5 million total for four different parcels of Raleigh real estate. The largest piece was once home to the Bolton Corp., a family heating and air condition company that ceased operations on the site several years ago.

FMW also owns the property where the IHOP on Hillsborough Street is located, but that site would be part of phase two of the redevelopment and exact plans for that portion have not been finalized, Zanoni said.

Wednesday, March 17, 2010

Siemens Moves Power Unit to North Carolina, Adds 825 Jobs

RALEIGH, N.C. (AP) — German industrial conglomerate Siemens AG is consolidating production of gas turbines for electric utilities in North Carolina to position itself for an expected boom in electricity demand in the Southeast and around the world.

A subsidiary of the Munich-based company, Siemens Energy Inc., said Thursday it plans to invest $135 million to build a new manufacturing plant for 60-Hertz gas turbines in Charlotte. The company was promised a package of tax breaks, grants and low-interest loans worth up to $154.75 million to make the move.

Siemens will close a similar plant in Hamilton, Ontario, that employs about 450, though it's not yet clear how many will lose their jobs and how many transfer to North Carolina over the next 18 months, spokeswoman Melanie Forbrick said.

The turbines will be shipped to utilities in the Americas, Japan, South Korea, the Philippines and Saudi Arabia.

"Over the next five years, we expect employment at the Charlotte site to grow to nearly 1,800 people, with more than 1,000 of those positions new to Charlotte. With this move we're pushing ahead with our growth strategy in the U.S., which is our most important single-country market," Siemens AG chief executive officer Peter Loescher said in a statement.

The move is expected to create 825 engineering and manufacturing jobs in Charlotte within five years, paying an average wage of almost $64,000 a year. Production in the expanded plant is scheduled to start in the fall of 2011, the company said.

State and local governments promised up to $35 million in tax breaks and grants. A county development entity is also prepared to lend Siemens up to $120 million in low-interest loans, with funding coming from bonds created by last year's federal stimulus package.

Siemens said the move to Charlotte was in part driven by a need to be closer to customers. Siemens-built power plants supply one-third of North America's electricity, the company said.

"I think that they're seeing that the American market has been slow but will be rebounding," said William Schmalzer, an analyst for market research firm Forecast International Inc. The North Carolina move "also puts them closer to their markets in Brazil, especially, and Latin America, which are probably also going to increase in the near future."

Forecast International predicts that worldwide demand for gas turbines will be almost $140 billion by 2018, with Siemens holding about 18 percent of the market behind General Electric's 43 percent market share.

About 780 Siemens workers in Charlotte already manufacture and rebuild gas turbines. The company last spring announced an expansion of 200 jobs in Charlotte and construction of a 75,000-square-foot office next to its manufacturing plant.

Siemens employs about 64,000 workers in the U.S., including 10,000 in its energy sector.

Tuesday, March 16, 2010

Raleigh Named 3rd Best Market for Young Adults

Triangle Business Journal

A new study ranks Raleigh as the third best metropolitan area in the country for young adults seeking to establish themselves in a recessionary economy.

The Raleigh metro area ranked high in the categories of population growth, employment growth, share of total population and the jobless rate for people ages 18-34. Raleigh also boasts a large number of households led by people under the age of 45 with incomes of more than $100,000 and residents with bachelor’s degrees between the ages of 18 and 34, according to the new report from

Raleigh real estate was bested in the rankings only by No. 1 Austin, Texas, and No. 2 Washington, D.C.

Charlotte, the only other North Carolina municipality listed, ranked No. 28. analyzed the 67 U.S. metros with populations above 750,000, searching for qualities that would appeal to workers in their 20s and early 30s.

The study’s 10-part formula gave the highest marks to places with strong growth rates, moderate costs of living and substantial pools of young adults who are college-educated and employed.

The least desirable market for young adults, according to the study, is Detroit, which is saddled with the nation’s worst unemployment rate for young adults, the slowest rate of income growth, and the biggest decline in overall employment.

Here’s a quick look at the top 10 metros for young people.

1. Austin: Its attractiveness to young adults is broadly based, and it ranks among the 10 leading markets in five of the categories that were analyzed. This isn’t the first time Austin takes top honors in a analysis. Earlier this year, the city was named the best city in which to launch a small business.

2. Washington: Educated young adults flock to the nation’s capital, where 35.8 percent of all 18-to-34-year-olds hold bachelor’s degrees. The study group’s median is 23.2 percent. Per capita income ($56,510) is well above average.

3. Raleigh: This is the fastest-growing major metro in the nation. The population of the Raleigh area is increasing by 3.9 percent per year. That’s more than triple the pace for the typical market, 1.2 percent.

4. Boston: Elite universities such as Harvard and MIT give Boston its intellectual cachet. The local share of young adults with college degrees (37.6 percent) is the highest in the country.

5. Houston: Employment opportunities abound in Houston, where the job-growth rate (1.7 percent per year) ranks among the five best in the nation. And so does its annual upswing in per capita income (6.6 percent).

6. Oklahoma City: The unemployment rate for young adults is lower here than anywhere but Salt Lake City and Tulsa. Oklahoma City also enjoys the nation’s third-best pace for annual income growth, a rapid 7.2 percent.

7. Dallas-Fort Worth: The recession caused some backsliding in 2009, but Dallas-Fort Worth still has 206,000 more jobs than it did five years ago. Local population is zipping higher by 2.4 percent per year.

8. Tulsa: Here’s an area that’s a true bargain. Median rent is $508 per month in Tulsa, the third-lowest figure in the study group. Compare that to such budget-breakers as San Jose (median rent of $1,334) or Honolulu ($1,227).

9. Seattle: This high-tech metro offers a wide range of good-paying jobs. Seattle ranks among the 10 markets with the largest per capita incomes ($50,471) and smallest unemployment rates for young adults.

10. Baton Rouge
: Louisiana is on its way back from the wrath of Hurricane Katrina, and this is one of its success stories. Baton Rouge boasts a high concentration of young adults (26.1 percent) and a strong rate of income growth.

Monday, March 15, 2010

Bank of America Apologizes for Taking Parrot

The Wall Street Journal

BofA Believed Woman's Home Was Vacant, Padlocked It and Kept Bird Over a Week

PITTSBURGH—Bank of America Corp. apologized after its local contractor entered the home of a mortgage borrower when she was away, cut off utilities, padlocked the door and confiscated her pet parrot, Luke.

Angela Iannelli, 46 years old, alleged in a lawsuit Monday that the October incident—which separated her from her 11-year-old parrot for more than a week—caused so much "emotional distress" that she needed a prescription medication for anxiety.

suicide threats from distressed borrowers are so common that one lender, OneWest Bank Group in Pasadena, Calif., had to establish procedures for alerting the police

A Bank of America spokesman said Wednesday a bank employee erroneously believed the house was vacant and sent the contractor there with instructions to install a new lock and otherwise "secure" the property. The bank spokesman said those instructions were inappropriate because Ms. Iannelli wasn't in default and the house wasn't vacant.

Mortgage lenders have struggled in the past three years to hire and train enough people to deal with the biggest wave of foreclosures since the 1930s. Nearly eight million households and Atlantic Beach vacation homes, or 15% of those with mortgages, are behind on their payments or in the foreclosure process.

Many borrowers complain they get the runaround when they call their lenders for help, receive contradictory information from different employees and are required to repeatedly fax the same documents.

At the same time, suicide threats from distressed borrowers are so common that one lender, OneWest Bank Group in Pasadena, Calif., had to establish procedures for alerting the police. Lenders' call-center employees are under heavy pressure. "These people make $14 or $15 an hour, and we ask them to move mountains," said a OneWest executive at an industry conference last month.

In her civil suit filed in the Allegheny County Court of Common Pleas, Ms. Iannelli said a contractor hired by Bank of America entered her house about 15 miles north of Pittsburgh in mid-October when she was away. According to the suit, in an "invasion" of the home, the contractor stopped utility services, cut water lines and electrical wiring, damaged flooring and finishings, poured antifreeze into sinks and toilets, and "stole" the parrot.

Ms. Iannelli, who owns a diner and works part-time as a bartender, said Bank of America representatives weren't helpful when she called in to protest. They first denied knowing where the parrot was, and later told her she could go to the offices of the contractor, about 80 miles away, to retrieve the bird herself. Ms. Iannelli said bank representatives also told her they were "tired" of hearing from her, hung up on her and advised her to seek help from the police.

Her lawyer, Michael Rosenzweig, a partner at Edgar Snyder & Associates in Pittsburgh, said Ms. Iannelli was seeking damages of more than $50,000. The amount of any damages would be decided by a jury if the case goes to trial.

A Bank of America spokesman said the bank would "quickly review the allegations in the lawsuit, the actual events that led to them and the causes of those events, and consider any hardship that resulted."

Mr. Rosenzweig said Ms. Iannelli had missed one payment around the time of the incident but quickly caught up and was now current on her loan.

After she drove two hours to reclaim her parrot in October, the bird initially seemed nervous, Ms. Iannelli said in an interview Wednesday. "He's doing very well now," she said.

Monday, March 8, 2010

North Carolina League Moving to Raleigh

Credit Union Times

Bolstering its advocacy role, the North Carolina Credit Union League announced Monday it is moving its headquarters from Greensboro, where it has been since its 1934 founding, to Raleigh, the state capital, by April 2011.

“The move is designed to enhance the trade association’s ability to serve members in legislative and regulatory advocacy,” said a statement by John Radebaugh, president/CEO.

The 21-employee league currently has four staffers in Raleigh and the relocation “will create greater synergy” on regulatory and legislative advocacy, said Radebaugh.

The staff will be offered relocation packages and no positions will be cut in the move, said Radebaugh.

“The board and management looked carefully at this decision over several months and with our Greensboro lease expiring next year the board decided that now was the right time to act,” said the statement.

From an historical perspective, Greensboro, located in the central part of the state and 80 miles west of Raleigh, served the league’s primary original function of chartering CUs but the times have altered the league’s job to high profile lobbying.

The league said it is evaluating office space and downtown Raleigh real estate for its headquarters “and expects to open the new space later this year.”

 "Headquartering downtown puts the entire organization in the heart of our state’s political system,” the statement concluded.

Friday, March 5, 2010

Pending Sales of Existing U.S. Homes [Probably] Rose in January; Expect Slow Climb Ahead


The number of contracts to buy previously owned U.S. homes probably rose 1 percent in January for a second month, showing the extension of a tax credit is sparking limited interest, economists said before a private report today.

The renewal of a government incentive to first-time buyers, originally due to expire at the end of November, and its expansion to include current owners has yet to lure buyers back into the market after helping boost sales in 2009. A lack of jobs and mounting foreclosures have depressed confidence, indicating housing will take time to rebound.

“The earlier surge in sales last year spurred hope of a quick housing recovery, but it now appears the recovery will be more slowly paced,” said Aaron Smith, an economist at Moody’s in West Chester, Pennsylvania.

The National Association of Realtors is scheduled to release the report at 10 a.m. in Washington. Survey estimates ranged from a drop of 4.2 percent to an increase of 4 percent.

Other Sectors

A 10 a.m. report from the Commerce Department may show a surge in demand for commercial aircraft fueled a 1.8 percent increase in factory orders in January, the biggest gain in four months. A report on bookings for durable goods last week showed orders for capital equipment may have dropped, signaling business investment paused to start the year.

Fewer Claims

First-time filings for jobless benefits dropped by 29,000 to 469,000 last week, according to a Labor Department report today. The number of people receiving unemployment insurance decreased to the lowest level in a year, while those receiving extended benefits climbed.

The productivity of U.S. workers kept surging in the fourth quarter as companies squeezed more out of remaining employees to boost earnings, another Labor Department report showed today.

A measure of employee output per hour rose at a 6.9 percent annual rate, capping the biggest one-year gain since 2002, revised figures showed. Labor costs dropped at a 5.9 percent pace, more than anticipated, and fell 1.7 percent for all of 2009, the biggest drop since records began six decades ago.

Improvement in the labor market is needed to propel the economic recovery and stem the surge in home foreclosures that is holding down prices. Foreclosure filings rose 15 percent in January compared with a year earlier and exceeded 300,000 for the 11th straight month, RealtyTrac Inc. said Feb. 11.

Sales Slump

Reports last week showed the housing recovery may be faltering. Sales of previously owned homes unexpectedly dropped 7.2 percent in January after a record decrease a month earlier, according to the Realtors report on Feb. 26. New-home sales fell to the lowest on record, the Commerce Department said Feb. 24.

The housing market will “follow a similar pattern” to recovery as it did in the late 1980s and early 1990s, which both took “several years,” Toll Brothers Inc. Chief Executive Officer Robert Toll said in a statement Feb. 24.

The company, the largest U.S. luxury-home builder, said its orders almost doubled in the first quarter compared with a year earlier. It projected it will sell between 2,100 and 2,750 homes in fiscal 2010 at an average price of $540,000 to $560,000.

Builder Shares

Builder shares have beat the broader market so far this year after another provision in the legislation extending the tax credit allowed construction companies to use losses incurred in 2008 and 2009 to recoup taxes on profits going back as many as five years, three more years than usual. Lennar Corp., KB Home and Ryland Group Inc. are among builders that have reported quarterly profits because of the tax refunds.

The Standard & Poor’s Supercomposite Homebuilding Index has increased 12 percent this year, compared with a 0.3 percent rise in broader S&P 500.

Billionaire Warren Buffett said last week the U.S. residential real estate slump will end by about 2011.

“Within a year or so, residential housing problems should largely be behind us,” Buffett wrote Feb. 27 in his annual letter to shareholders of his Berkshire Hathaway Inc. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this, there will be a buyer who benefits.”