Column: Real estate turnaround efforts are too little, too late

They say soldiers are always fighting their last war, applying outdated tactics to new battlefield realities.

The same might be said for the latest efforts — Pickett's Charges of futility — to advance against a volley of bad real estate news.

Here are three local feints I assume will do little to stem the real estate retreat:

The Trump Tower Tampa Death March: Three years of chasing a $200-million construction loan has left the proposed 52-story luxury condo tower in bankruptcy court with about $40-million in debt. Yet developers talk of a "suitor" who will rework the architectural plans, pay off creditors and raise the tower on the Tampa riverfront lot. But the suitor is offering so little bailout money that it's really more of an occupation than an alliance.

The Cay Club Clearwater Maneuver: A bayfront condo complex called the Grand Venetian, modeled on deluxe Las Vegas hotels, is pitching units once priced at nearly $500,000 for $100,000 today. But deep discounts aren't igniting sales. Buyers hadn't prepared for a double envelopment: Combined property taxes and homeowners association fees cost about $1,500 a month, overrunning savings.

The Marshall Plan for Housing Recovery: Congress will spend $3.9-billion to help rehabilitate abandoned foreclosure homes. Based on the Tampa Bay area's high foreclosure rate, we could get millions of dollars of grants. The truth is that some of our poorest neighborhoods were ground zero for housing fraud. One typical case: The former owners of a St. Petersburg foreclosure house — only 600 square feet — finessed a $110,000 mortgage from the bank. The bank will dump the repossessed home for $35,000. Whether we blame the greedy homeowner or the reckless bank, it makes little sense to send out rescue parties.

Sometimes the best course for a weaker army is simply to dig in, keep your head down and declare victory when the air clears.

James Thorner can be reached at thorner@sptimes.com or (813) 226-3313.

Column: Real estate turnaround efforts are too little, too late 07/24/08 [Last modified: Monday, July 28, 2008 3:23pm]

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