Monday, May 5, 2014

The "There Is No Inflation" Report: Air Rights Edition

Capital New York reports:
A development consortium has purchased the air rights of two Manhattan theaters from the Shubert Organization for a record $409 per square foot, according to city records filed last month.

The sale of nearly 45,000 square feet at that price represents a steep increase in the cost of theater development rights in the district. In 2012, Shubert sold air rights from two of its theaters for about $225 per square foot. That's a more than 80 percent rise.

But this latest deal may just be the tip of the iceberg. It takes about a year to finalize a sale and for its price to become public, meaning $409 was the going rate quite a while ago.

How much are development rights in the theater district going for now? About $600 per square foot...

 The sales were spurred by a 1990s zoning change that allowed the landmarked buildings—which can't fully utilize the rights on their own lots—to sell the sky above them. That has meant an infusion of cash for the theaters, while developers have been able to assemble rights to build much taller buildings elsewhere within the district. In exchange, the developers must contribute about $18 per square foot they purchase to a special fund for the arts.


  1. JT out of BarrowMay 6, 2014 at 7:53 AM

    The cheapest bacon (where I shop) finally topped the 4 dollar mark.
    Still found some hog jowl bacon for 3.50.
    Smoked oysters soared to 1.80.
    F*ck you Bernanke/yellen/krudman
    AND the District of Crooks.

  2. Best seats for Heuy Lewis & The News in Indy, $125. Best seats for Willy Nelson, $153. I saw Boston in 1976 for $8.

  3. good thing they ex food and energy.......................

    Enron 2.0: Goldman-Linked Investors Set to Manipulate East Coast Electricity Prices

    Johnson again:

    With Brayton Point closed, New England consumers and businesses will spend as much as $2.6 billion more per year for electricity, critics of the deal suggest in documents filed with the Federal Energy Regulatory Commission.

    That estimate will turn out to be conservative, I expect, based on what Enron traders did to California, Oregon and Washington electricity customers starting in 2000. In California alone the short-term market manipulations cost each resident more than $1,300, a total burden of about $45 billion.

    One regulator that could block the closure of the plant, the Independent System Operator –New England, washed its hands of the matter, saying it’s not its job to worry its head about whether Energy Partners is really closing the plant so as to better manipulate the markets. Johnson called its decision “shocking” because this regulator’s supposed raison d’etre is to prevent price manipulation. If this isn’t in its wheelhouse, pray tell what is?

    But the Independent System Operator isn’t the only regulator that has to bless this proposal. The Federal Energy Regulatory Commission also needs to approve or deny it. And FERC rules prohibit withholding capacity to manipulate rates or produce unjust and unreasonable rates.

    The investors’ excuse that they made a big mistake and now realize they have to close the plant doesn’t pass the smell test. Johnson quotes FERC testimony from Tyson Slocum of Public Citizen:

    In the world of business, a firm announcing that an asset purchased just 5 weeks ago is actually uneconomical to operate would be called incompetent, and such a firm would have difficulty attracting capital and staying in business. But the managing partners of Energy Capital Partners are a highly sophisticated all-star crew of former Wall Street financiers: four of the five managing partners are Goldman Sachs veterans, and the firm’s vice-presidents and principals are alumni of JP Morgan, Morgan Stanley, Bank of America, Credit Suisse and other financial powerhouses. These are not your run-of-the-mill owners and operators of power plants. They are Wall Streeters highly motivated to exploit the intricacies of power markets to make as much money as possible for their Cayman Islands-based affiliates.

    Johnson also points to auction records that show that immediately after they acquired Brayton Point, Energy Partners started withholding all of Brayton Point’s capacity from auctions. No wonder they’d rather close the plant and be done with it.


  4. 6 Charts That Show How We Became China's Grocery Store and Wine Cellar

  5. what could go wrong???????...............

    Einhorn Finds Dinner Chat With Bernanke ‘Frightening’

    In describing the dinner conversation at New York’s Le Bernardin, Einhorn criticized Bernanke for saying he was 100 percent certain there would be no hyperinflation and that it generally occurs after a war.

    “Not that I think there will be hyperinflation, but how do you get to 100 percent certainty about anything?” Einhorn said. “Why can’t you be 99 percent certain?”

    You’re Wrong

    Bernanke responded “you are wrong” to a question about the diminishing returns of having interest rates at zero, according to the hedge-fund manager. The ex-Fed chief’s explanation, Einhorn said, was that raising interest rates to benefit savers wouldn’t be the right move for the economy because it would require borrowers to pay more for capital.

    A spokeswoman at the Brookings Institution, where Bernanke is now a fellow in residence, said he was traveling and wasn’t immediately available.