DESERT LAW BLOG

HOWELL JACKSON SUPPORTS EMINENT DOMAIN FOR BAD MORTGAGES

Dean of Harvard Law School, Elena Kagan, has been nominated to be solicitor general by President-elect Obama, leaving the spot open at my alma mater.  Today, HLS Professor Howell Jackson was named Acting Dean there. 

I did not have Professor Jackson for any classes when I was there, so I don't know him personally.  But interestingly, he is a person cited by the NCRC as lending support to using eminent domain to take over bad mortgages on the cheap - a topic I wrote about yesterday.

From the press release:

As Harvard Law Professor Howell Jackson points out, eminent domain can solve the barriers related to first and second liens by directly purchasing all mortgages on targeted properties.

Somehow I don't think the step up in titles for soon-to-be-acting Dean Jackson is going to convince Congress to go through with the idea.

Update:  Here (RealPlayer) is a webcast of a panel discussion moderated by Dean Kagan and involving Professor Jackson, among others, discussing the economic crisis and bailout.

NEPTUNE ORIENT LINES MOVES TO PHOENIX TO TAKE ADVANTAGE OF LOWER COSTS

Singapore-based Neptune Orient Lines (SGX: NOL), an international shipping company, announced last week that they are relocating their regional headquarters from Oakland to Phoenix metro.  According to the press release, the move will be completed by the third quarter of 2009.  It's a good pick-up for Phoenix, a city that needs more headquarters and corporate jobs.

The move is a cost-cutting measure for NOL, taking into account Arizona's much lower cost of living and wages as compared to California.  No doubt that the drastic drop in housing prices here and increasing office vacancy rates (and lowering rents) allowed them to make the numbers work for a move to Phoenix.

NOL's headquarters is primarily reponsible for coordinate shipping into and out of western seaboard ports in the U.S. They also do oversee overland shipping to stores.  From an Arizona Republic article posted tonight, it sounds like the regional headquarters are mainly corporate/office operations, not industrial or warehousing in nature.  It will be interesting to find out where exactly in Phoenix metro they are setting up shop (no word on whether they have decided on a location here yet).

Despite being landlocked, Phoenix seems ideally located for this type of headquarters as it serves as an extention of the port of Los Angeles and growing ports in Mexico (Guaymas in particular) with its ever-growing base of large warehousing and distribution facilities being built on the west side of the city.  I'm sure NOL took that into account.

The shipping industry has been hit very hard in the last 4 months with a severe decrease in both exports and imports.  Besides the drop in consumer spending and the resulting massive inventory buildups at docks, the lack of short-term credit has crippled the shipping industry.  In order to ship, global letters of credit are used to secure payment upon delivery.  And those letters of credit have been very difficult to secure recently, even for seasoned shipping operators.  The Baltic Dry Index, a leading-indicator of shipping operations, has plummeted by over 90% in the last several months because of it.  So it stands to reason that an outfit like NOL, during very tough economic times, is looking to cut costs after some fairly large boom years for shipping.

Update:  Here is a quick blurb and a chart from Calculated Risk on the drop in Los Angeles area port traffic numbers.  Paul Kingsley is a Phoenix business lawyer and real estate lawyer.

PHOENIX LIGHT RAIL AND NEW WING OF CONVENTION CENTER OPEN TODAY

Phoenix is marking the opening of its new light rail system with parties along the route today from 10 am til 5 pm.  I'll be heading downtown this afternoon to check it out.  All rides on the light rail are free until the 1st of the year and then will be $1.25 per ride or $2.50 for an all-day pass.  This link from AZCentral has a lot of information on the new light rail, including maps, slideshows and articles.  Here is the ValleyMetro home page.

Phoenix is also having a party today to celebrate - in conjunction with the light rail running past it - the grand opening of the new North Wing of the Phoenix Convention Center - an additional 550,000 square feet of convention space in downtown Phoenix.  More information on the event can be found here.

Both the light rail and convention center expansion should help in revitalizing downtown Phoenix.  The convention center expansion in particular is driving new demand for downtown hotels which will bring more consumers downtown.  The first hotel to open that will help service downtown convention-goers is the new Sheraton - Arizona's largest hotel at 1,000 rooms.  It opened this fall and is a short walk from the Phoenix Convention Center, US Airways Arena, Chase Field and other downtown businesses.  And now with the light rail, people staying downtown can travel to locations like Mill Ave. in Tempe without needing a car.  ASU downtown campus students will also be able to easily get to and from main campus in Tempe

Update:  Coverage from the Phoenix Business Journal is here.

PHOENIX LIGHT RAIL OPENING THIS WEEK

The big news of the upcoming week is that light rail in Phoenix will be opening on the 27th.  I have to say I'm pretty psyched about it and think that even though it won't have a huge immediate impact, over the next 10 years it will greatly shape development of the city.  I expect higher density residential to be built within easy walking distance of rail stops - particularly along Apache Boulevard - and ground level commercial to service that residential traffic.  For example, a young professional who works downtown might look for housing east of ASU Tempe campus to have an easier morning commute and be able to stop for dinner on Mill Ave on the way home. There are a lot of people who now live in the Phoenix metro area who had commuter rail in their city of origin and I think that will help its sucess.

While living in Chicago, I grew pretty used to having the option to ride the El to many parts of the city.  And many people plan where they are going to live based on proximity to the El.  I think there will be some early light rail adopters who live in Tempe and work downtown and think that as the planned extensions are added to the light rail, it will become even more integral to the metropolitan area (hopefully old town Scottsdale is also eventually roped into the system).   I also hope it will help mitigate some of the urban sprawl we are seeing and convince Phoenicians to leave the car at home a little more (that big black smog cloud hanging over Phoenix is getting more and more ominous).

My biggest complaint up front is that the Phoenix light rail doesn't have plans for extended hours on weekends to handle late night drinkers.  Arizona has the most strict DUI laws in the nation now and a train is a great way to get drinkers out of their cars.  Cabs are also prohibitively expensive here for people not living within a few miles of their bar of choice, so a train ride would be a great alternative.  Initially, I don't think enough late night partiers actually live along the light rail to make it a big deal.  But as residential housing density grows around the rail stations, I expect people to start to utilize light rail to go out - particularlly to Tempe and Central Ave downtown - and hopefully Valley Metro will be amenable to extended hours on weekends.

I'll be posting articles about Phoenix light rail as they are written over the next week.  A couple are here and here.  More information about the system can be found here.  

I guess the only question now is what we are going to nickname the thing (I figure it will end up something like "The US Airways Train Sponsored by APS").  Hopefully we can come up with something original - something Phoenix is not typically known for.

ARIZONA NOTEBOOK

I stumbled upon a great blog the other day named ArizonaNotebook written by Mike Padgett.  Mike was a well-known senior reporter for the Phoenix Business Journal for many years and took early retirement.  He's been around Phoenix since 1968, so his institutional knowledge of the Valley is presumably tremendous.  It sounds like his passion to write was enough that he decided to channel it into a new medium and start his own blog.  As you can see, he's keeping busy covering Phoenix business and real estate stories on the blog.  You should check it out from time to time as it has plenty of local business stories you'll never see in newsprint.

PAUL P. KINGSLEY ANNOUNCES THE OPENING OF NEW BUSINESS LAW PRACTICE

Phoenix, Arizona - December 5, 2008.  Paul P. Kingsley is pleased to announce the opening of his new business law practice - Kingsley Law PLC - in Phoenix, Arizona. Drawing on his experience representing start-ups to Fortune 500 companies, Mr. Kingsley counsels clients on business transactions, company formation and structuring, private equity and venture capital investment, real estate and other general business matters.

Mr. Kingsley started his career as an attorney at Katten Muchin Rosenman LLP, a 650+ attorney law firm in Chicago, Illinois, practicing business law for four years before moving to Phoenix to start up his own real estate investment and development company. During his time in real estate, he gained valuable business experience overseeing all operations while serving as in-house counsel for his company. Mr. Kingsley says his time spent as an entrepreneur “is invaluable when counseling small and medium-sized businesses as they look to expand." “It allowed me to be in the shoes of the client to see what great outside legal assistance means to a company,” he says. As a solo practitioner, his goal is to utilize his big firm experience while providing more personalized service to clients.

Mr. Kingsley is a graduate of the University of Cincinnati with a degree in Economics and received his law degree from Harvard Law School. He is licensed to practice law in Arizona and Illinois and is a member of the American Bar Association and Urban Land Institute. Mr. Kingsley can be contacted at 602-814-0716 or by email at paul@kingsleylawaz.com.

For more information about Kingsley Law PLC, please visit www.kingsleylawaz.com