Home › Forums › Financial Markets/Economics › Real Estate Lessons of Sochi
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FlyerInHi.
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February 24, 2014 at 4:59 PM #20980February 24, 2014 at 8:56 PM #771230
NotCranky
ParticipantI have been seeing something closer to home…Our governments just go right after the people to bleed them. Not that there isn’t major corruption here similar in size like at the Olympics in Russia and everywhere else but just for the sake of keeping it local, I will post what I am seeing.
Right in the middle of the boom there was a Hasidic Jew Group from the east coast subdividing a large parcel into many 10 acre parcels to build or sell. As a condition they had to widen a road put curbs etc. The project sputtered and stopped but a much better road than exists for many many miles out here was built.
I think the permit was probably not closed but the road was finished for all practical purposes. It is a hell of a lot better than the county maintained road that we all pay for through a local agreement and that is treated with no similar scrutiny and is as a matter of fact overgrown with brush , deteriorating and what work as gets done ,is half assed.
Now I see some two bit contractor out here on this awesome road by local standards, doing bullshit busy work to this road….at a total milk it pace. They have a tractor sitting out there all days but no one uses it much . I am guessing they are billing every hour of daylight for it. Probably charging high dollars for everything and padding it all, , under county authority, to bill the owners and put a lien. DPLU is no doubt also running a tab for their part in this likely scam. I have seen this mode of operation how they do it that’s why I think it’s likely. I think it’s predatory. I think it will cost this group a ton and possibly force a tax sale.
Our local building dept. tried something similar on me but I was lucky and successfully fought it off. A lawyer I have talked to since said beating these kinds of rackets is extremely rare.
Usually they look for absentee investors, landlords , property owners or weak homeowners with active permits or some stupid code violation outstanding to go after on some exaggerated scale that they can churn business from. There are always many more flagrant things that could be pointed out compared to what the county is sinking their teeth in, as in this case….it’s the best road out here, by far. Either way it’s for all purposes a scam.
February 24, 2014 at 9:56 PM #771233Zeitgeist
ParticipantUKRAINE!
February 25, 2014 at 12:10 AM #771236
CoronitaParticipantSilly Putin…
He should have just learned from us and done what we did to get the San Diego FBI building funded…
…Turn it over to chinese investors in exchange for visas…….
🙂
San Diego FBI building financed by Chinese seeking U.S. visas, senator says
Posh FBI field office, built by Las Vegas developer with ties to late mobster Moe Dalitz and San Diego GOP candidates Carl DeMaio and Kevin Faulconer, was financed by funds from U.S. visa-seeking Chinese investors, Sen. Charles Grassley saysA costly new FBI headquarters in San Diego, built by means of a lease-back arrangement with the United States government by Las Vegas developer Irwin Molasky, was financed by investors from China seeking immigration visas, according to a July letter to FBI chief Robert Mueller from Republican Senator Charles E. Grassley of Iowa.
The letter, seeking more details on the secretive financing deal, questions the nomination by President Barack Obama of Alejandro Mayorkas – current Director of U.S. Citizenship and Immigration Services – to become Deputy Secretary of the Department of Homeland Security.
Attention to the matter has been spurred by allegations regarding Terry McAuliffe, the former Democratic national chairman and Bill and Hillary Clinton political intimate who is currently running for governor of Virginia.
But the key person of interest in San Diego’s case, 86-year-old developer Molasky, has funneled major campaign contributions to Republicans Carl DeMaio and Kevin Faulconer, both for their mayoral bids as well as for DeMaio’s run for congress against Democratic freshman incumbent Scott Peters.
As reported here previously, DeMaio’s office was involved in getting the Molasky project through city hall and the then-councilman appeared at the groundbreaking with Molasky executives and FBI officials.
In addition to political cash from Molasky, as well as from his family, and company employees, DeMaio has received campaign contributions from Molasky’s San Diego lobbyist Paul Robinson, a local Republican leader.
Faulconer’s current mayoral campaign has gotten money from both Molasky and Robinson.
According to a July 23 letter from Grassley to FBI director Robert S. Mueller, III:
The Molasky Group, the Las Vegas real estate firm that constructed the San Diego building, has also been responsible for building FBI field offices in Cincinnati, Minneapolis, and Portland, as well as buildings in Las Vegas for the Internal Revenue Service, the Social Security Administration, and the Secret Service.
In order to attract investors, the Molasky Group apparently participates in seminars hosted in China by groups like Wailan Overseas Consulting Group.
Wailan’s website includes a picture of the Molasky Group’s Chief Financial Officer, Brad Sher, speaking in front of promotional materials in Chinese which include the English letters “FBI.”
Mr. Sher is also the manager of an entity known as “EB-5 FBI LLC,” which is used to solicit the EB-5 investment. All told, one website states that the LLC has raised $40 million from approximately 80 Chinese investors.
Grassley goes on to describe emails between FBI officials regarding the use of so-called the so-called EB-5 Regional Center program to finance Molasky’s San Diego project.
The EB-5 “immigrant investor” program, run by U.S. Citizenship and Immigration Services in the Department of Homeland Security, grants U.S. visas to foreigners who invest at least $500,000 in American projects that purport to create new jobs.
The program has long been said by critics to be ripe for abuse. According to Grassley’s letter, the FBI may not have been informed that it’s San Diego headquarters was paid for by Chinese money, a situation which the letter implies could jeopardize U.S. security.
I have also obtained March 2013 e-mails from FBI personnel with an “immediate request from . . . higher ups” of all investment LLCs under the EB-5 Regional Center program.
The e-mail to USCIS states: “Let’s just say that we have a significant issue that my higher ups are really concerned about and this may be addressed way above my pay grade.”
Another e-mail suggests that facilities funded by EB-5 Regional Centers will house “specific interests that we are concerned about.”
It is unclear whether the concerns were connected in any way with the Counterintelligence Unit referral from September 2012 or whether they simply stemmed from USCIS’s failure to inform the FBI that the Bureau’s newly-constructed San Diego Field Office was built with funds from Chinese investors through the EB-5 Regional Center program.
One of the FBI e-mails states: “I am going to use the S[an] D[iego] office as an example of the issues why FinCEN and National Security should be at the forefront of any adjudication.”
Another asks: “[C]an you ask . . . if they can remember any other FBI or government facility that was funded through EB5 money?”
In his letter to Mueller, Grassley poses a series of questions to the FBI chief regarding the San Diego project, including:
How and when did the FBI learn that the San Diego Field Office and other federal buildings had been constructed with EB-5 funds?
What investigations, if any, have been conducted into the Molasky Group, any members of its board, or the Wailan Overseas Consulting Group?
If the FBI has determined whether any other federal buildings been constructed with any EB-5 funds, please provide further information.
How did the FBI become aware that its San Diego Field Office had been constructed in part through Chinese investments?
To your knowledge, have any of the EB-5 investor applicants associated with the Molasky Group been denied visas due to national security concerns?
Two days before a July Senate committee confirmation hearing on the Mayorkas nomination to be second in command at Homeland Security, word broke that he was under investigation by the department’s inspector general, and the matter was pulled from the committee’s agenda.
DHS Secretary Janet Napolitano stepped down last week with the Mayorkas nomination still up in the air.
In addition to the San Diego FBI case, the inspector general’s Mayorkas investigation is believed to involve foreign investor visas sought for those who put money into Greentech, an electric carmaker run by Virginia Democratic gubernatorial candidate McAuliffe.
According to an August 9 New York Times report:
He and his lawyers sent a stream of e-mails to a senior official in charge of approving foreign investments that Mr. McAuliffe sought, and he went up the chain of command to Janet Napolitano, the secretary of homeland security, documents show.
The official Mr. McAuliffe and [Greentech president Charles] Wang met with in 2011, Alejandro Mayorkas, is the focus of an internal Homeland Security Department investigation into whether he gave GreenTech special treatment, which he denies.
As their meeting was wrapping up, Ms. Napolitano popped into the room to say hello, Mr. Wang said. Later, Mr. Mayorkas issued a favorable ruling that cleared the way for GreenTech to recruit more foreign investors.
February 25, 2014 at 9:56 AM #771244Jazzman
Participant[quote=EconProf]What are some economic and real estate take-aways from the Sochi, Russia Winter Olympics? I’ll offer mine, but first, what we know about what Russia spent to hold the Olympics there. Reportedly $56 billion was spent on hotels, resorts, infrastructure, sports facilities, roads, and the personnel to run the actual event. All this for two weeks of full usage. Those wonderful facilities will now be underutilized for a few decades until Sochi can hold another winter olympics. I wonder what their hotel occupancy rates will be for the rest of this winter.
My take-aways:
1. While capitalist Vancouver spent $7.4 billion on their recent winter olympics, Putin spent seven times as much. The opportunity cost of that ego trip is all the Russian schools, roads, orphanages, rail lines, and apartments that did not get built in that largely poor country. He should be ashamed.
2. As any private sector investor will tell you, the cost of building for peak demand periods must be covered by revenues in the long run. So Sochi prices must be unduly high year-round to cover costs, including during the off-season. When the hotels are 20% occupied will their rates be super-high, or will the Russian taxpayer have to subsidize Sochi further?
3. Reportedly many of the hotel rooms remained unfinished, and massive corruption boosted costs. This is the inevitable result of government-directed allocation of resources rather than private sector actors who generally suffer from their mistakes.[/quote]
While there is more than a thread of truth to what you say, would the private sector have been any less corrupt in Russia I wonder. Were the Vancouver Games entirely private sector run? While comparing costs is useful, it should be remembered the Sochi games were explicitly targeted so it was never a matter of ‘if’. The cost of savings lives is a hard one to quantify. I’m not offering an apologia to Putin, but the games passed without incident and Russia won the most medals, with the US trailing fourth. What happens to Sochi now? I guess we’ll have to wait and see. Should more be spent on education, infrastructure? Always.February 25, 2014 at 10:46 AM #771245sdduuuude
ParticipantNot working out so well for Sarajevo:
http://www.weather.com/video/olympic-park-lost-in-time-44366
February 25, 2014 at 12:10 PM #771250ocrenter
ParticipantThe Olympics has always been a political showcase for the strong and powerful and an outlet for excessive and over-the-top nationalistic displays. I suppose in this sense it is better to just have th Olympics, because otherwise the money would not be going to education and publi welfare, it would have gone to the military.
February 25, 2014 at 12:19 PM #771251all
ParticipantHosting the games is not about profit. It is about showing of. Like the Moon landing.
My take-aways
1. Russia can blow tens of billions to put up a show while simultaneously enjoying strong growth in GDP and average salaries.
2. Western media is mean-spirited, similar to what I observed during 2008 Beijing. Instead of focusing on athletes and the sporting events CNN, BBC and alike were focused on trivia.
3. NBC sucks. I am happy that they lost their US Open rights to ESPN. Hopefully the trend will continue.February 25, 2014 at 3:32 PM #771256spdrun
ParticipantIf it’s about showing off, the Russians did not show off their ability to build competently and in a timely manner very well.
February 25, 2014 at 7:13 PM #771258Hobie
ParticipantThe 1986 LA Olympics made a profit under Peter Uberoff’s capitalistic plan. And still show off 🙂
February 26, 2014 at 12:31 PM #771268Participant[quote=all]”Hosting the games is not about profit. It is about showing of. Like the Moon landing. Western media is mean-spirited, similar to what I observed during 2008 Beijing. Instead of focusing on athletes and the sporting events CNN, BBC and alike were focused on trivia.”
[/quote]I agree. More about Costa’s pinkeye than the athletes’ performance. They had a former athlete shopping there, too. Absolute trivial reporting, that focused on personalities instead of athletic prowess. I give them a D+.
February 26, 2014 at 1:36 PM #771269Participant[quote=Hobie]The 1986 LA Olympics made a profit under Peter Uberoff’s capitalistic plan. And still show off :)[/quote]
That was 1984. And level with 1980 Moscow.
February 26, 2014 at 2:59 PM #771270FlyerInHi
Guest$50 billion to build a new city doesn’t see too much (some sources say about $30 billion).
Russia actually needs to spread development away from Moscow and St Petersburg.
If the Sochi games can create a “Russian Riviera” that spurs economic growth in the south, then it would have been money very well spent.
February 26, 2014 at 4:42 PM #771271ParticipantSochi isn’t a new city — it’s been around for the past 100 years or so. Population roughly that of O’side, Vista, and Carlsbad combined.
I’m not sure if holding an Olympic game in a given area will necessarily spur development long-term. Lake Placid isn’t exactly a bustling metropolis 34 years after the last Olympic games there.
February 27, 2014 at 1:46 PM #771282GuestI feel like Sochi has potential to be a very desirable city in that region.
By new, I meant making it into a world class resort in the same way that china has remade Hainan island into a desirable destination for their vacationers. The development of the island has more than paid off in new wealth generated.
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