Power Breakfast: Developers hurt by credit crunch, Atlanta unemployment up, Toyota, Coke, Obama

Atlanta developers and attorneys shared frustrating stories with a federal panel Wednesday, detailing the banking industry’s reluctance to finance new developments or refinance existing deals, AJC staffer Gertha Coffee reported.

“There is a complete drought in meeting the needs of new legitimate properties or refinancing existing loans,” Brian Olasov, managing director for Atlanta law firm McKenna, Long and Aldridge, told the federal panel meeting at Georgia Tech.

Atlanta developer Hal Barry lamented the difficulty of obtaining bank financing to build four government-leased buildings, Coffee reports.

“Finding a lender to finance these buildings has been a real joke,” Barry said.

His pointed words were directed at a panel overseeing the government’s Troubled Asset Relief Program (TARP). Under the TARP program, the U.S. Treasury Department has put more than $6.2 billion into Georgia banks.

The chairman of Barry Real Estate explained his difficulties in working with lender BB&T, which involved his attempt to avoid foreclosure on a downtown Atlanta property on which he intends to build an office tower.

“The recession hit us hard,” Barry said.

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2 comments Add your comment

TnGelding

January 28th, 2010
9:11 am

There is no need for the new developments at this time. The borrow and over-build days are over, hopefully for ever. What have they done with all the money they’ve made over the last decades? Or was it all just a mirage? Who would have thought so many businesses had to borrow to meet payroll?

RE Guy

January 28th, 2010
9:35 am

Asking the Govmnt to help us out of this real estate crisis is like asking a dog to guard your food. There will be nothing left.

Gov intervention in the real estate market is what has put us in this mess to begin with. Fannie and Freddie’s irresponsible purchases of subprime mortgages created a false building economy that artificially inflated the construction business with cheap borrowed money. Now that construction is dead, we have almost no more manufacturing base left in Atlanta. We used to have the Ford plant in Hapeville and the GM plant in Doraville, but no more. If we lose Lockhead in Marietta, where will we be? Even blue collar retail, restaurant and hospitality jobs are disappearing.

With an inventory of 1000’s of unsold condo units, sf homes and vacant office & retail space, it is going to be a long, slow ride to get this real estate market back to health.

The Govt forcing banks to lend money on real estate projects will not help the demand problem. Only JOBS will bring the real estate industry back. A good start would be to repeal the increase in the minimum wage so blue collar employees can find jobs again.