Category: Bylines

Oh, News of the Future!

honeymooners.jpg

I have a new article on the Huffington Post about the death of newspapers, Newsrooms must die, Long Live newsrooms.

The point is the old ways have been dying, new ways have been emerging, and they will come together in something entirely new. Innovations from the web and old line practices that create credibility must inform each other. The split is perfectly expressed in the contingent ideas of Transparency and Image. Transparency sees a flattened hierarchy, and a community bubble up of ideas. Old line Image Makers see creation of experts from the top down by media giants. The new way recognizes that innovation bubbles up and is recognized. Image follows expert form. Imposition of Image (without the community bubbling up) will inevitably fail or be recognized as false.

I see a hybrid (NPO/For Profit) model of operation that will stabilize the staffing needs of newsrooms and deliver information to intended audiences through myriad distribution channels. Newsrooms will deliver by community-based mission and their staffing will be protected by the essential nature of their mission. Yet unlike mission-based non-profits that beg to sustain themselves, the new L3C newspaper will be self-sustaining through profits earned and investors.

Chicago Journalism Townhall and L3Cs

p1020049.JPGTo the Panel of the Chicago Journalism Townhall:

A low-profit limited liability company (L3C) is not a non-profit (NPO). An L3C is a for-profit business that gets a kick-start from foundation funding and then welcomes investors to follow in, or vice versa. It has rules around making a profit and those rules include the fact that if you are getting foundation money to meet your social mission, you cannot neglect your social mission to make a bigger profit. That would mean in the case of a newsroom, that you could not lay off the staff because they cost too much, not as long as the staff is meeting their social mission.

The panel of expert journalists at the Townhall Sunday — sage and talented as they all are — would benefit from expanding their thinking. The non-profit model works well when it has achieved scale and is able to tap into the passion of the news consumers – good example WBEZ.

But in an L3C, passion is built into the model. It is initially monetized by the presence of foundations and investors who expect a return in money and mission. Unlike the NPO mode, profits are welcomed and encouraged. But mission trumps profits.

I will be writing about this more in the Huffington Post tomorrow.

Meanwhile read through these excellent materials American for Community Development.

And as I said a few weeks ago in my article on L3CsHuffPo article, the Peoria papers are looking at it.

How to save newsrooms

Chicago’s newspapers could find a lifeline to solvency and a return to social purpose in a new kind of business structure called an L3C, or low-profit limited liability company.

Why is that?

Illinois foundations have $350 billion in assets and they are required to invest 5% of that, or $17 billion, in programs that serve a social purpose each year. If the Chicago Sun-Times and the Chicago Tribune were to be reborn as L3Cs — a structure that encourages foundation investment while allowing a profit –they could tap into some of that $17 billion. With foundation heavyweights on board, other investors seeking a decent, but not excessive, return might contribute to the coffers.

Bill SB 239 creating the L3C hybrid was introduced to the Illinois legislature Feb. 4 by Sen. Heather Steans (D-Chicago). Prospects for the bill are good, supporters say.

The L3C structure was signed into law in Vermont in 2008, and into law in Michigan and the Crow Nation in January. Legislatures in Georgia, Montana, North Carolina and Oregon are also expected to pass L3C legislation this year.

In Washington, D.C., draft legislation called the Program Related Investment Promotion Act of 2008 is being considered by staff in the Senate Finance committee. While many types of businesses–from community yoga centers to affordable housing–could benefit from L3Cs, the successful creation of newspaper L3Cs is largely contingent on passage of the Federal law, which would effectively expand charitable purposes to include newspapers.

The L3C structure plays well in Peoria where the Peoria Newspaper Guild, and a coalition of
Journal Star employees and community leaders have been quietly looking for two years at alternatives including co-ops and employee stock ownership plans (ESOPs) to operate the Peoria Journal Star.

The one idea that really clicked was the L3C.

“We are looking at long-term ownership that puts journalism first,” said Jennifer Towery, President of the Peoria Newspaper Guild and also Neighbors Editor for the Peoria Journal Star. “[The L3C] just resonated. It has so much potential.”

Because it can tap into foundation money, an L3C is sustainable, and because an L3C business must meet a social purpose, it realigns newspapers with their mission of community service.

“It insists that serving the readers is your mission,” she said. “If it doesn’t serve the readers to cut your newsroom staff you can’t do it.”

While good news judgment is essential to accomplishing the social return, the L3C structure has significant sweeteners to generate returns for investors.

“The participation of the foundation, which is seeking high social return but low monetary return serves as a catalyst for high investor return,” said Marc J. Lane, a Chicago-based attorney who authored the Illinois L3C legislation and last year launched Chicago’s chapter of the Social Enterprise Alliance, which believes in investing in businesses that do well by doing good. “You can end up with a blended financial return that is fairly modest but skewed toward the private sector investor.”

“Capital is formed,” Lane said. “Social purpose is achieved.”

The L3C is different from a typical nonprofit because it can earn a return, but the social purpose must trump the financial purpose.

Lane says that he expects the Illinois law will pass with little debate. “I see it sailing through,” he said. But even if it doesn’t, Illinois news gathering organizations could incorporate in Vermont or other states that have legalized L3Cs.

The creator of L3Cs, Robert Lang, CEO of the Mary Elizabeth & Gordon B. Mannweiler Foundation, says the Federal legislation is essential for any of these good news scenarios to play for newspapers.

Lang, an economist and businessman by trade, devised the L3C structure to address the problems he was having while trying to invest family foundation money in a sustainable and effective way.

“Historically, the IRS has not accepted newspapers as nonprofits,” Lang said. “The Federal legislation mentions L3Cs specifically and it lists newspapers specifically.”

The problem newspapers are dealing with today is that investors turned news-gathering into Wall Street product.

“The Peoria paper still makes money,” Lang said. “The problem is it cannot make enough profit for all the games normal for-profits get involved in.”

But in the L3C scenario, newspapers can make “enough” money.

“What we are looking at is the newspaper as a self-sufficient entity,” he said.
“It will not be a high profit entity.”

The idea of the Newspaper L3C is to bring back those journalistic contributions like neighborhood reporting, music reviews and book sections and make them part of the community service. And ads are part of the mix too.

“I think there is a lot of viability to newspapers still,” Lang said.

Could the L3C save Chicago’s newspapers?

“Somewhere you still need a newsgathering organizations,” Lang said. Newspapers still drive much of the news circulating on the web, he added.

“I’m not saying that we can save the Chicago Tribune and make it what it was 10 years ago,” he said. “But at least the money that’s made today can go toward improving the product not paying off leveraged debt.”

Meanwhile back at the Journal Star, which has an owner and is not for sale, Peoria Guild President Towery says, “We are all interested in finding models that others can replicate. It’s not saving the paper, it’s saving journalism. ”

“One of the bright spots is that [newspapers] have lost so much value that it is now feasible for communities to buy their newspapers.”

Read More: Americans For Community Development, Chicago Sun-Times, Chicago Tribune, Doing Well By Doing Good, Heather Steans, Jennifer Towery, Journalism, l3c, Low-Profit Limited Liability Company, Marc J. Lane, Mary Elizabeth And Gordon B. Mannweiler Foundation, Newspaper Industry, Newspapers, Oregon, Peoria Journal Star, Peoria Newspaper Guild, Program Related Investment Promotion Act Of 2008, Robert Lang, Saving Newspapers, Social Enterprise Alliance, Chicago News

NYT on predatory loan modifications

The New York Times had a story today about the loan sharks that are trolling the ranks of folks seeking relief from resetting mortgage interest rates. Don’t take the bait!

Not if you hear it on the radio, read it in a newspaper ad or see it dancing across a web page.

Instead, call the City of Chicago 311 number and tell them that you are looking for assistance with a mortgage reset, or visit Neighborhood Housing Services, whose Home Ownership Preservation Initiative (HOPI) is a free service.

Contact NHS

Central Office/Neighborhood Lending Services
1279 N. Milwaukee Avenue
5th Floor
Chicago, IL 60622
773-329-4010 phone
773-329-4120 fax

NHS Redevelopment Corporation
11001 S. Michigan Ave.
Chicago, IL 60628
773-568-1020 phone
773-928-0241 fax

Auburn Gresham/Englewood
449 W. 79th Street
Chicago, IL 60620
773-488-2004 phone
773-488-2126 fax

Back of the Yards/Garfield Boulevard
1823 W. 47th Street
2nd Floor
Chicago, IL 60609
773-579-0032 phone
773-579-0848 fax

Chicago Lawn/Gage Park
2609 W. 63rd Street
Chicago, IL 60629
773-434-9632 phone
773-434-9872 fax

NHS of the Fox Valley
300 Douglas Avenue
Elgin, IL 60120

847-695-0399 phone
847-695-7011 fax

NHS of the Fox Valley
163 E. Chicago Street
Elgin, Illinois 60120
847-695-0399 phone
fax

NHS of the Fox Valley

phone
fax

North Lawndale
3555 W. Ogden Avenue
Chicago, IL 60623
773-522-4637 phone
773-522-4890 fax

Roseland
11001 S. Michigan Avenue
Chicago, IL 60628
773-568-1020 phone
773-568-9831 fax

South Chicago
9108 S. Brandon
Chicago, IL 60617
773-734-9181 phone
773-734-9221 fax

West Englewood
449 W. 79th Street
Chicago, IL 60620
773-488-2004 phone
773-488-2126 fax

West Humboldt Park
3601 W. Chicago Avenue
Chicago, IL 60651
773-533-5570 phone
773-533-5571 fax

Chicago’s place in the world of bubbles

Visit this blog if you want to better understand Chicago’s place in this current real estate market, the health of Chicago
neighborhoods and an urban green lifestyle . Those were our specialties at the Sun-Times Real Estate section while I was the editor, and I plan to write a bit about that here.

If you’d like to learn where Chicago stands in the data from mortgage insurance central — the PMI Group — and hear from Chicago real estate players about where we are heading, download the Sun-Times Jan. 18 cover story here.
no-place-like-home.PDF
1-18-jump.PDF

Continue reading Chicago’s place in the world of bubbles

How the pinch grew Christmas

By Sally Duros
Chicago Sun-Times December 21, 2007

It’s time to celebrate the end of the era of the Grinch, that crabby green fellow who lives in an isolated cave above the warmhearted community of Whoville, aiming to spoil the Who’s festivities.

He bears a resemblance to some real estate speculators. Only a heart two sizes too small could take delight in making money off the land and structures that define a place while sacrificing the intrinsic value of home and community that give that place its identity and form our emotional bond to it.

That’s not to say that change is bad, or development is wrong. But it takes a neighborhood to grow a home — and that’s a fact.

If you don’t believe me, ask me old dad — who will be 87 come the new year and still lives in the century-old house in Rogers Park he has lived in for 50 years of his life.

Although my dad’s house is certainly not the fanciest house on the block, my dad is the kind of neighbor you want in your Chicago neighborhood. He relishes clearing the ice and snow from his walk, and he can’t wait to rake. He’s not into fancy landscaping and statuary, but he likes a birdbath or two, and you can bet he plants a mean peony, and looks forward every Thanksgiving to the hardy rust- colored mums that bloom near the fence and the neighbor’s driveway.

It takes a neighborhood to grow a home, and that was proved last autumn when a mean wind blew into town and took down two large dead branches from the tree my dad had planted on the front lawn 45 years ago when my sister was born. Just a week earlier, we called the city to cut down the branches, but my dad’s not the kind of guy to push back against a recalcitrant city worker. The guy from Forestry said he was working overtime. “What do want me to do?” he asked, shrugging.

So when the big wind came, it blew the branches down and they crashed to the ground, tearing a big hole in the old-fashioned Sears chain-link fence, the kind with steel posts anchoring the corners and at regular intervals with long rolls of steel links stretched from post to post.

It took my dad several days to saw the big branches into manageable pieces and clear the timber debris from his fence and make a large but tidy pile of hard wood on his front lawn. He and my brother had done most of the labor by the time the city workers came to lend a hand.

But, still, he had a fence to be mended.

It’s not one of those fancy iron fences, but it supports the shrubs and for years it worked fine to keep the kids from running pell-mell through the yard and trampling the flower beds chasing after 16-inch softballs.

My dad, of course, wouldn’t pay anyone to fix it. He’s one of those fiercely independent homeowners who takes great pride in his ability to repair any problem with his house.

So he bought a new top pole for the wire to set against, and he went to work trying to re-align the crossed-wire with the corner post. Before he was through, two passersby, the block’s friendliest dog walker and two neighbors had lent a hand.

They stood huddled with my dad at the corner post, scratching their heads, puzzling the navigational dimensions of the problem, and then finally took charge of the pliers, holding the wire tight and straight so my dad could use both hands to screw the bolts and rebuild that corner of the fence.

The downing of the tree-branches turned out to be quite the neighborhood event.

And the fence mending in its modest, Chicago neighborhood way took on some of the positive characteristics of an old-fashioned barn-raising.

And that’s how it is in my dad’s neighborhood. People are always pitching in to lend a hand. That’s one of the benefits of settling into a place and getting to know well the people who live there.

That’s a big benefit of letting the neighborhood grow your home.

It’s a fact some of us might have forgotten during the hot speculative market in Chicago real estate of the past few years, when some Grinches among us were buying and selling homes simply to drive up prices.

This is not to say that everyone should live this way. But it is to say, that if you find yourself living in the house you are in for a while longer than you thought it might have unexpected benefits.

The next perennial holiday favorite could very well be “How the Pinch grew Christmas.”

Please pass the roast beast!

Elizabeth Warren: Why talking about credit card debt is taboo

By Sally Duros
Real Estate Editor, Chicago Sun-Times
September 28, 2007

‘People would rather talk about their dysfunctional sex lives than reveal publicly their financial state.”

Ain’t that the truth.

That quote comes from Elizabeth Warren, a law professor at Harvard University and t Continue reading Elizabeth Warren: Why talking about credit card debt is taboo

How we transform what was simply shelter into a home

August 24, 2007 | Chicago Sun-Times (IL)

By Sally Duros

Something has happened to my corner bar and grill in Ravenswood. Three years ago it was a corner sports bar with OK food and too many smokers. Two years ago, they built a comfortable street patio. Nicely decorated with window-boxes and with quiet tree-covered spots near the back of the sitting area, the cafe was the perfect clean well lighted place to sit and write.

That first summer though, it was almost too quiet. I was often the only customer, and I wondered if my neighborhood cafe would survive.

Two years ago, old buildings started to come down brick by brick on the wide commercial avenue where the little bar and grill stood. One by one the small, modest storefronts occupied by junk stores and embellished with safety cages shuttered up.

Then the condo buildings rose in stories of three and four. About 18 months ago, the big new plum for the neighborhood emerged from a long abandoned lot on the northeast corner of our major commercial intersection — a ground floor CVS Pharmacy.

When it opened, the CVS joined existing commercial businesses on two other corners: a convenience store, the kind where you have to check the date on the milk; and a bar notorious for bloody brawls and paddy wagon visits.

Today the rummy bar is gone, replaced by a cell phone dealer, and the convenience store is in transition into something else — I am rooting for a vegetable market. It can’t hurt to dream, can it?

And my corner bar and grill cafe? On a recent summer night, I had to wait to get a seat. While I waited, I watched the considerably increased street traffic: groups of men and women in their late 20s and 30s, new condo owners — out for a night in their new neighborhood.

In this case, all the changes were welcome, especially the CVS. Prior to that, my neighborhood really had nothing in the way of actual retail stores. But seemingly overnight it changed. What happened?

“Retail attracts retail, and like attracts like,” says Mari Gallagher, who heads her own research and consulting firm with expertise in a number of policy areas as well as in commercial site assessments and redevelopment. “Retailers and grocers — nobody wants to be the first. Grocers are incredibly risk adverse.

“The people in the industry are out to steal consumer dollars from other successful retailers, so they agglomerate.” Oh, sure, they what? “Agglomerate. Agglomeration is the attraction of retail to more retail.”

And what we have with my new neighborhood CVS is what is called the bell cow that starts the agglomeration. The bell cow is the first business that enters a neighborhood because they’ve found there are customers to woo and cash to be had.

“The bell cow is the cow with the dinging bell that makes the noise that then wakes everybody else up,” Gallagher says. “Some retailers just follow other retailers”

Starbucks is a good example of a bell cow, and that’s why it has become both the despised and beloved image of a neighborhood gentrifying. Lately I’ve been thinking pet grooming shops are following the Starbucks into neighborhoods where the median income is rising.

In my neighborhood, the bell cow CVS is affecting its intersection.

“Now the other corners are more valuable to the extent that a CVS is more valuable on a real estate level,” Gallagher says. “You’ll have more competition on those corners.”

Gallagher has researched extreme states of retail plenty and scarcity. The Clybourne Corridor is an example of where there is too much retail, and it brings a host of problems. The other extreme — and one that has significant repercussions on health — is the Food Desert, which Gallagher defines as a large geographic area with no or distant grocery stores. Location of fast food and grocery stores have diet-related health consequences for the people living in the neighborhood.

Oh — what I wouldn’t give for a place to pick up fresh broccoli on my way home from the train every night. But there isn’t a flowerette to be found for miles around in my solid working- to middle-class neighborhood. But still, technically I do not live in the food desert, because there are many smaller, convenience style grocers around. You know the kind, with onions on the way out.

“Something sets the tone, and everything goes with that tone,” Gallagher says. “In the food desert it’s a kind of fringe tone, and fringe attracts fringe. So you will have a pawn shop. You might see a shuttered building. There’s not enough mass going on.”

Retailers want a no brainer. This cowardice — my word — means that they miss opportunities.

Gallagher tells a joke to explain this: “Two economists are walking down the street, one says to the other: ‘Wasn’t that a $20 bill we just passed?’ The other economist says, ‘No, or someone would have picked it up’.”

Gallagher says: “That’s the oxymoronic dilemma. Retailers won’t go there until others have.”

The highest level of retail use always sets the tone, Gallagher says. And existing retail use sets the first tone.

“So if your tone is this food desert tone — maybe you’ll see a pharmacy there, and paper blowing down the street, and some of the buildings are shuttered,” she says. “It is going to be hard to [get retail]come in. You will need some special subsidy or plan.

“That’s why government really needs to take a fresh look at what it can do,” she says. “Grocers are anchors. There is an hierarchy of land use, a hierarchy of retail, and any kind of use effects the hierarchy of land value.

“The market is not perfect,” Gallagher says. “You’d think if there were a $20 there, somebody would have picked it up.”

The Homeownership Index

It’s past time to update this.

First published in July 2007. Read my other writings for the Chicago Sun-Times

Home ownership post WWII
Home ownership rate in 1945: 45%
Home ownership rate in 1955: 65%
Standard down payment: 20%
Standard mortgage term: 30 years

Home ownership 1994-2005
Home ownership rate in 1994: 64%
Home ownership rate in 2005: 69%
Possible down payment: $0
Standard mortgage term: none, variable

Who gained home ownership 1994-2005
Home ownership rate for blacks 1994: 42%
Home ownership rate for blacks 2005: 49%
Number of new black homeowners 1994-2005: 1.5 million
Home ownership rate for Hispanics 1994: 42%
Home ownership rate for Hispanics 2005: 50%
Number of new Hispanic homeowners 1994-2005: 2.0 million
Home ownership rate for households indicating more than one race 1994: 52%
Home ownership rate for households indicating more than one race 2005: 60%
Number of new homeowners indicating more than one race 1994-2005: 2.0 million

Growth of the subprime mortgage market 1994-2005
Aggregate dollars in subprime mortgages 1994: $35 billion
Aggregate dollars in subprime mortgages in 2005: $625 billion
Percentage of total mortgages that were subprime 1994: less than 5%
Percentage of total mortgages that were subprime 2005: 20%
Annual rate of increase in subprime mortgages 1994-2005: 26%
Subprime loans made by less supervised subsidiaries of banks and thrifts: 30%
Subprime loans made by independent mortgage firms without federal supervision: 50%

Foreclosure and personal economics
Rate of foreclosures in prime mortgage market: below 1%
Rate of foreclosures in subprime mortgage market: 7% (10 times as high as prime)
Predicted increase in foreclosure rates for new subprime loans 2006: up to 20%
Confounding factors leading to foreclosure: Job loss and illness
Number of Americans now without health insurance: 45 million
Percentage of first-time, low-income home buyers who return to renting: 40%
Percent of homeowners spending more than half of disposable income on housing: 45%
Percent renters spending more than half of disposable income on housing: 57%
Adapted from data in Subprime Mortgages: America’s latest boom and bust by Edward M. Gramlich

Woody Guthrie lives here; This land was made for you and me

Inspired by Bill Moyers piece in January 2012, I resurrect this article from 2007, during my time as Chicago Sun-Times Real Estate Editor.  Six years later, what I sensed then has been proven to be true. 

Lessons on Democracy from Woody Guthrie | BillMoyers.comBILL MOYERS: I’m Bill Moyers. And welcome to BillMoyers.com. Join us over the next few weeks, because on the air and on this website, we’ll be talking a lot about “winner-take-all” politics and how economic inequality – that vast gap between the top and everyone else – is not the result of market forces.

Embedly Powered

via Billmoyers

By Sally Duros, Real Estate Editor, Chicago Sun-Times

Published Chicago Sun-Times, August 2007

Woody Guthrie is the patron saint of this real estate section.

That means this land was made for you and me. All readers are
welcome here. Everyone –not just home buyers or home sellers, not
just Realtors or builders, not just public relations execs or
marketers, not just homeowners.

We ask all of you — especially renters and newcomers — to pull up
a chair and make this section home. That’s because, like Woody
Guthrie, we intend to bring tales of truth, fairness and justice to
these pages, while having some fun and elevating your spirit, too,
We like singing a pleasant tune.

Real estate is a market. It’s an investment. It’s a house, town
house, condo or rental apartment. It’s the biggest purchase and the
largest sale most of us will ever engage in.

But it is so very much more than that.

Real estate is the rich ground that roots us all to Chicago.
Whether we rent or own — we can’t make a go at life unless we have
a proper place to live.

Real estate is a deep subject that goes to the very core of what it
means to be an American and a Chicagoan. It thrives on legend, myth
and illusion as well as commerce, dealmaking and common sense. As
proud Chicagoans, we measure our quality of life not by whether we
own, but by where we live and our connection to the neighborhood
around us.

In this section, we explore all the controversial facets of Chicago
real estate — from affordability to lending to taxes to fraud —
and the context that informs those facets.

That means we won’t back down from exploring hot-button issues like
the regulatory environment surrounding our home purchases and the
laws that affect the quality of our home lives. Our modest goal is
to cover these issues in a non-politicized, applied way, and in a
manner useful to you. We will have succeeded if we make your life a
bit easier.