Book Caddy Finances In Trouble

[downtownguy]

^^
But it comes with a price. First, you have to change your business model to a leasing/management model rather than a sales model.
Isn't business all about changing to adapt to current trends? Oh, yes. And making a profit????

The second thing is that renting attracts a different demographic than purchasers.
Yeah. Like keeping out the riffraff renting the penthouses at the Broderick for $5,000 month.

Lastly, the bylaws of the HOA may only allow for a certain percentage of condo rentals.
The US Constitution has 27 Amendments.

[softailrider]

It's $140 a night at the Book? Maybe that's part of the problem.

Put that hotel and those rooms in NYC and see what they would go for per night.

140.00 sounds about right to me. It's not the type of place to give 69.00 weekend specials.

[corktownyuppie]

Lastly, the bylaws of the HOA may only allow for a certain percentage of condo rentals.
The US Constitution has 27 Amendments.

But are the people who are losing money the same people who vote on the amendment?

[detroitlives]

What I'm wondering is why the Book isn't renting these condos. Instead of getting absolutely no income from these things, why not rent them?! Someone yesterday on the radio also mentioned that the association fees on these condos are insanity, like in the neighborhood of $700-$800 a month. Not sure if that is accurate or not, but that would certainly stop me from buying one. But what I took away from the story is that as far as the bank is concerned, the Book is up to date. Yes, problems below the surface, but nowhere near panic mode yet.

I also find it amusing that The Broderick is having no problem "renting" out its most prestigious apartments.

I believe over 80% of the BC condos are occupied--over and above the units sold, they have leased out the maximum number the HOA will allow to be leased out.

[mikeg19]

How do you know this to be true? They're under no obligation to release their vacancy rates or their effective rents [[as opposed to asking rents).

I'm just going by the numbers they are providing on their rentals at this point.

[Danny]

Book Cadillac Hotel and Fort Shelby will survive. We need those hotels for entertainment and regional infratructure. The main reason why most condos are not selling because the housing financial crisis of 2008 no thanks to Alan Greenspan's " How to own a bank by owning your house" scheme. Those soon to be 5 star hotel is just to big to fail. If it did fail I'm sure than Dan Gilbert will buy those buildings house most of his Quicken Loan employees.

[Occurrence]

Put that hotel and those rooms in NYC and see what they would go for per night.

140.00 sounds about right to me. It's not the type of place to give 69.00 weekend specials.

You could put Hotel Yorba in NYC and charge a fortune, what's your point? Detroit isnt New York.

[Occurrence]

Also a lot of gamblers smoke... so "importance" is not an issue for them.... and had the state banned smoking in the Detroit casinos, the Indian casinos would have been the winners. It's not about health... it's about money...

My buddy who owns a small bar said the smoking ban has lost him a lot of business, why can't I smoke there?

[ndavies]

The restriction on the percentage of rentals actually comes from Fanny Mae and Freddie mac. In order for a condo to be eligible for a conforming loan. The condo association must limit the percentage of rentals to 10%. Fannie mae also has a restrictions on the number of developer owned units allowed. When I bought my first condo [[New Construction) there was a holdup due to Fannie Maes developer owned restrictions, I eventually had to go through Freddie Macs process to get the loan.

If the condo association does not limit rentals, it greatly limits the number of people who could buy the property.

[mikeg19]

The restriction on the percentage of rentals actually comes from Fanny Mae and Freddie mac. In order for a condo to be eligible for a conforming loan. The condo association must limit the percentage of rentals to 10%. Fannie mae also has a restrictions on the number of developer owned units allowed. When I bought my first condo [[New Construction) there was a holdup due to Fannie Maes developer owned restrictions, I eventually had to go through Freddie Macs process to get the loan.

If the condo association does not limit rentals, it greatly limits the number of people who could buy the property.

I understand this perspective in a time where this would make sense. But I would think the rules would be amendable to allow for certain circumstances to have that 10% raised. I'm not well versed enough in banking matters, but it would seem at some point, although you want buyers rather than renters, you would want any type of cash flow coming in off these properties rather than nothing. Is that too much to assume, or are there other factors that make that possibility unrealistic?

[Gistok]

My buddy who owns a small bar said the smoking ban has lost him a lot of business, why can't I smoke there?

I'm not a smoker, [[always sat in non-smoking in restaurants) and since I'm not a bar patron, I can see where they lost business due to the ban. I rarely have gone to the casinos, and certainly not to gamble... but I remember Greektown as smelling a bit smoky, but not MGM Grand... the ceiling height is so high, plus the air filtration system... it didn't smell of smoke when I was there.

[Occurrence]

I agree with you that it's about money and not health. I just don't like how they marketed and packaged the law to make it sound like it's about public safety. The Casinos generate huge amounts of revenue so it makes sense that one can still smoke in one.

[7miledog]

I heard some interesting news on the Planning & Development Department's inability to spend the CDBG money from a little birdie in the CAYMC [[I thought there was a thread on this specific topic, but couldn't find it). According to my source, the reason why the funds have not been spent [[the City is approaching $70M cash on hand) is because the City Council has always used this fund for their own little earmarks, only they have directed this money to groups who do not have the capacity to spend it according to the program guidelines. Instead of re-purposing this money to a better use [[and to a grantee who actually has a plan and the capacity to implement it), some City Council members [[read JoAnn Watson) demand that the Planning Dept. provide "technical assistance" to the grantees so the grantees can spend the money. Allegedly, they view this program specifically as their slush funds to support their political "soldiers" with public moneys.

Apparently, this is getting under the skin of some of the more reform-minded Council members, so hopefully some change will occur. If not, I say bring on the EM. The more horror stories I hear like this, the more I come to believe that Detroit is royally screwed [[understanding, of course, that this does occur in many places, just not while the city is literally burning). It is particularly galling that these same Council members call for the heads of the Department employees for NOT spending the money when the City Council is the group calling the shots to reward loyal incompetents.