The BAN Report: The $15MM New Construction Hotel Portfolio / Powell on 60 Minutes / The Taxman Cometh / Cheating Scandal Rocks Academia-3/15/19

 

The $15MM New Construction Hotel Portfolio

 

Clark Street Capital’s Bank Asset Network (“BAN”) proudly presents: “The $15MM New Construction Hotel Portfolio.”  This exclusively-offered portfolio is offered for sale by one institution (“Seller”). Highlights include:

 

• A total unpaid principal balance of $15,120,273 comprised of 3 loans

• All loans are low-leveraged 1st mortgages 

• Portfolio has a weighted average coupon of 6.56%

• The loans are secured by IHG and Choice hotels

• The two larger loans are secured by newly constructed limited service hotels

• Two hotels are located in Oregon, and one in New York

• All loans have personal guarantees

• All loans have prepayment penalties

• Opportunity to acquire depository relationships

• All loans will trade for a premium to par and any bids below par will not be entertained

 

Files are scanned and available in a secure deal room and organized by credit, collateral, legal, and correspondence with an Asset Summary Report, financial statements, and collateral information. Based on the information presented, a buyer should be able to complete the vast majority of their due diligence remotely. 

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Event 

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Date 

Sale Announcement 

Friday, March 15, 2019

Due Diligence Materials Available Online

Monday, March 18, 2019

Indicative Bid Date

Thursday, April 4, 2019

Closing Date

Thursday, April 25, 2019

 

Please click here for more information on the portfolio. You will be able to execute the confidentiality agreement electronically. 

 

Powell on 60 Minutes

 

Fed Chair Jerome Powell was interviewed by 60 Minutes on Sunday – one of the rare times a Fed Chair does a television interview.    In addition to making it clear that President Trump cannot fire him, Mr. Powell had a few thoughts about the economy and interest rates.

 

We see the economy as in a good place. We think that the outlook is a favorable one. Inflation is muted and our policy rate we think is in an appropriate place.  So what we've said is that we would be patient as we watch to see how global economic conditions evolve and how our own economy evolves.

 

Patient means that we don't feel any hurry to change our interest rate policy. What's happened in the last 90 or so days is that we've seen increasing evidence of the global economy slowing down, although our own economy has continued to perform well. Growth abroad, if it slows, can be a headwind for us. In addition, there are things like Brexit and slowing in China and Europe that can be headwinds. So, what we've done is we've said that we're going to wait and see how those conditions evolve before we make any changes to our interest rate policy, and that means patient.

 

Generally speaking, the U.S. economy is coming off a very strong year last year. We had growth just a touch higher than 3%. And that strength was pretty widespread. You know we have high levels of employment, low levels of unemployment, wages are moving up. Consumer confidence is high, business confidence is high. We've seen a bit of a slowing, but still to healthy levels in the U.S. economy this year. So the U.S. economy does seem to be favorable. The outlook for the U.S. economy is favorable. I would say the principal risks to our economy now seem to be coming from slower growth in China and Europe and also risk events such as Brexit.

 

The Taxman Cometh

 

States like New York have been battling former taxpayers that claim Florida or other low-tax states as residency, despite maintaining a presence in New York.   

 

But the New York State Department of Taxation and Finance is making sure that high earners who try to leave don’t escape without an audit and a bill. New York conducted about 3,000 “nonresidency” audits a year between 2010 and 2017, collecting around $1 billion, according to Monaeo, a company that sells an app for tracking and proving tax residency.

 

More than half of those who were audited lost their cases, and the average collected by New York State between 2015 and 2017 was $144,270 per audit, Monaeo said. In addition to the traditional audit methods the state uses to make sure a taxpayer isn’t gaming the system — like checking taxpayer’s credit card bills and travel schedules — New York officials are using a whole new set of high-tech tools, including tracking cellphone records, social media feeds, and veterinary and dentist records. Auditors are even conducting in-home inspections to look inside taxpayers’ refrigerators.

 

Stories of the wealthy counting the number of days they spend in New York and Florida to make sure they comply with the residency rules have been a staple of the New York and Palm Beach social circuit for decades. Conventional wisdom holds that if you’re out of New York State for 183 days, you don’t have to pay state taxes. But tax advisers say that while the number of days matter, the real test for auditors is “domicile” — being able to prove that a taxpayer’s permanent, primary home is in Florida rather than New York. The domicile test has become increasingly complicated as today’s migratory rich maintain four or five homes, and rarely spend much time in any one place.

 

Items like prized artwork, the more expensive home, the country club membership, the dentist, and family dog are often used to determine where your domiciled.   

 

Cheating Scandal Rocks Academia

 

The US Justice Department charged 50 people with Racketeering for a complex scheme to get under-achieving children through a “side-door” to some of the nation’s leading Universities, including Georgetown, Stanford, UCLA, UCD, USC, Texas, Wake Forest, and Yale. 

 

A teenage girl who did not play soccer magically became a star soccer recruit at Yale. Cost to her parents: $1.2 million.

 

A high school boy eager to enroll at the University of Southern California was falsely deemed to have a learning disability so he could take his standardized test with a complicit proctor who would make sure he got the right score. Cost to his parents: at least $50,000.

 

A student with no experience rowing won a spot on the U.S.C. crew team after a photograph of another person in a boat was submitted as evidence of her prowess. Her parents wired $200,000 into a special account.

 

In a major college admissions scandal that laid bare the elaborate lengths some wealthy parents will go to get their children into competitive American universities, federal prosecutors charged 50 people on Tuesday in a brazen scheme to buy spots in the freshman classes at Yale, Stanford and other big-name schools.

 

Thirty-three well-heeled parents were charged in the case, including Hollywood celebrities and prominent business leaders, and prosecutors said there could be additional indictments to come.

 

Also implicated were top college athletic coaches, who were accused of accepting millions of dollars to help admit undeserving students to a wide variety of colleges, from the University of Texas at Austin to Wake Forest and Georgetown, by suggesting they were top athletes.

 

This awful scandal illustrates the steps in which wealthy parents tip the scales in order to help their children.    And, it appears that it is the tip of the iceberg, as you can bet that many of the accused, especially the coaches and proctors will cut deals and rat out more parents.    What does this mean for the students at these Universities?   It’s hard to imagine they were not aware of the cheating on their behalf.    The scandal reveals a business that many people did not exist – some of these consultants are charging $1,000 / hour to help children get into top schools.     The indictment is pretty juicy and worth a read.