Monday, March 9, 2009

BEWARE, BAD AND TORPID

About the same time the Chairman and CEO of BB&T was writing Congress, saying that the bailout was a "bad deal" and that he saw "no compelling need to participate," as the problems were confined to high risk financial institutions and Wall Street, I was dealing with fraud on my BB&T checking account. I'll spare most of details of the back story; suffice it to say that someone I had issued a paper refund to months before, during the last of my selling on eBay (a subject for another day), used what little information there was on my check to construct a fraudulent one - and badly at that - to the tune of $556.68. Despite the fact that the bogus check had TWO addresses, in Florida, no less, and mine do not, and I live in Virginia; a check number that was not in my sequence; the bank information at the center, not the lower left; and a horrible imitation of my signature, BB&T paid it, commercial law be damned. And then started bouncing my checks and assessing me NSF, overdraft and collection fees. Due to a lack of coordination and communication between the branch and the home office, the matter took weeks to resolve, and when all was said and done, the fees, which the bank had to absorb and credit back to my account, exclusive of the value of the check, totaled $480, and they had provided me with TWO sets of new desk checks because, and how stupid is this, on the first order they printed my address, although I had specifically told them not to, had NEVER done that before (and this account dates back to 1988), and had just been a victim of fraud! The free checks which will last me for years are the only reason I remained with the bank, and for checking only. Bank personnel never admitted responsibility for the blunder and I never got an apology.
Not shortly after, Mr. Allison did an about face and accepted 3.1 million in bailout money. I can't help but wonder how many "mistakes" that were made similar to the one with my account accumulated to contribute to BB&T's and other banks' woes. Allegedly, some of the 3.1 million may have been used to take over an insurance company and scratch the itch to merge with Zions Bancorporation. I can tell you from personal experience, none of it went to upgrade the customer service.
Just last week, I needed a medallion signature guarantee on four sets of IRA Transfer of Assets papers. The manager/loan officer was the only one who could do that at the branch I frequent. After keeping me sitting there for over a half hour, while she mysteriously darted back and forth between her desk and a back room, she handed me the paperwork which I later discovered she had failed to SIGN. On the second go round, using two sided copying, she failed to capture all the necessary pages, causing me to have to properly redo it for my own records. While admittedly two trips to the bank and a stint at a photocopier is a minor inconvenience, it was an unnecessary bother nonetheless.
Can't sign, can't copy!? It left me wondering...Just how is this branch and BB&T in general managed? How thoughtfully does the 14th largest bank in the country make loans? Is this the ineptitude that our bailout money is going for? Would it be better spent transferring customer deposits to completely new and untainted institutions built from scratch and letting these mismanaged and irresponsible monstrosities fail? Maybe so.

Karen Ann DeLuca

PUTTING THE RETAIL "HOUSE" IN ORDER

Malls now dot the landscape as overbuilt temples and testament to our economic reliance on consumerism. Debt laden real estate abound, as "bricks and mortar" investors were slow in anticipating the impact of online retailing, to say nothing of the slowdown in purchasing (you can only buy and need so much) and purchasing power. As industry after industry lines up for a government handout, it may be only a question of time before retailers join their residential counterparts in that crowd. But what if rather than queuing up for the privilege of being a potential propped up "zombie," merchants took a proactively responsible and innovative approach? Consolidation in an industry that has merged into homogeneity is unlikely as a panacea. "Close and disburse," flippant at best, lays bare an "everything is disposable" and perhaps generational view, surprising in view of the somewhat exalted place malls held in the social lives of the younger set. While in small towns that may bring the bustle back to Main Streets, most modern suburbs were specifically planned not to be "urban," but to sprawl, so there is no one central, commercial, community "drag" to which businesses can "retreat." To play on the words of Ronald Reagan, during whose administration this trend for mercantile Meccas truly blossomed, given the opportunity cost of the few construction jobs it would create, don't tear down that mall. Recycle.
Rather than remodeling and renovating ugly cookie cutter external facades to enclose ornate and ostentatious orbs of overstimulation, in foolish anticipation that the former hoards of faithful happy feet will soon return, spending that whopping $13 a week extra they will be getting in their paycheck come April 1st, if they still have a job, or following the suggestion for demolition and diaspora, owners should convert their big boxes, as long as they are structurally sound, into mixed use. Some tenants, mostly anchors, actually own the land their stores are located on, so they most likely aren't going anywhere, and to augment their lagging sales, they could "landlord" lesser but still viable tenants in a mutual symbiotic relationship, an acceleration of the store within a store concept. Sears, Macy's and Nordstrom come to mind as good candidates for such "nationwide nesting dolls." As for the rest of the space - and there will be plenty of it with high profile liquidations, bankruptcies and store closings being announced almost daily, the least radical option would be to change and downgrade its composition to include discounters, dollar stores and yes, maybe even pawn shops. Using eBay and other electronic sales sites can be expensive, labor intensive, and does nothing to support local economies, something to be considered in a firesale situation.
A more novel and unique approach would be to utilize the existing retrofit for individualized plumbing, and make a back room a bathroom and convert some of the space into affordable housing under 1000 sq. ft. per unit, grabbing the renters incentivized by the first of what will most likely be many stimulus packages to buy. Let the balance be allocated to a downsized retail presence; add grocery stores, offices, libraries, art galleries, TRADITIONAL places of worship. Diversify, rather than continuing to put every egg in one upscale basket of virtual clones. Redevelop the property into a town center, mini urban villages with a tightknit, neighborhood feel, giving the buildings distinctive character, inside and out. Investors would then have a reliable base income from which to service their debt, and the properties would be transformed from "one stop shopping" into "one stop living" and would be much better integrated into the community as a citizen and a diverse job engine, insurance against the "rise" of "dead malls" in the future. Modified, this plan would work for converting free standing "big boxes" into individual, noncommercial use as well. Instead of wasting taxpayer dollars adding to the glut with new construction, stimulus money would be better spent refurbishing and repurposing "empties" before they become permanent, dilapidated eyesores.
The one thing malls have is plenty of parking, a plus, so the owners need to get creative to fill up those spaces, particularly if they follow the lead of the Westfield Group and shorten their hours of operation. Think "outside the box," literally, no pun intended. Embrace and start charging for commuter parking. Many centers for shopping, particularly those located in rural areas or distant outskirts, are built on what was once farms and/or pastures. It may be feasible to return some of the land entirely back to its original purpose, producing, particularly with the rising interest in organic foods, or in any event, to revert part of a parking lot into plots that the public could then rent to "grow their own." Not ever Green Thumb wannabe has a yard.
As I write this, Circuit City is closing its doors. Another "ghost box" bites the dust. Wouldn't it be nice if retail was the ONE industry that took the self reliant initiative and route and somehow figured out ON ITS OWN a way to survive? A couple months in and the new Administration appears to be fresh out of fresh ideas, recently inviting young entrepreneurs to the White House to brainstorm with the President. I just dropped a clever and creative idea, or two. Here's one more: tourism. Emotionally attached, people may want to visit deserted malls and be willing to pay an admission fee to gaze at the modern day equivalent of the abandoned remnants of the Wild Wild West. After all, they are listed as attractions in tour guides...Like museums...MMMM...

Karen Ann DeLuca