Thursday, August 29, 2019

Tanger Center Swallowed By Giant Sinkhole

As pointed out by my co-writer abner doon on Monday, shares in Tanger Factory Outlets has dropped from $40 per share to only $14 per share. In an article entitled, The Mistake You Are Making With Tanger Factory Outlet Centers: The Safety Of The Dividend, investment advisor Julian Lin of Seeking Alpha concludes:

"While SKT did raise guidance, there's still little indication that they've escaped the worst of it. The continued deterioration in long-term leases is worrisome, and they will need to continue to direct all excess free cash flow towards paying down debt indefinitely as long as cash flows continue to decline. I rate shares a sell."

There's no Tanger Factory Outlet Center in Greensboro so why should the citizens of Greensboro be concerned that the stock prices are falling unless perhaps you own shares in Tanger?

Well there is that matter of the naming rights. You see, according to the Steven Tanger Center for the Performing Arts website Steven Tanger committed $7.5 million and named the Steven Tanger Center for the Performing Arts on September 9, 2019 but there is no mention anywhere on said website that Mr Tanger has actually paid that $7.5 million.

Many of Mr Tanger's customers have been going out of business, will Steven Tanger live up to his obligations or are we to add $7.5 Million more to the run away cost taxpayers have been forced to bear under the guise of economic development.

Tanger still hasn't repaired a giant sinkhole that swallowed up 6 cars in one of their parking lots over a year ago-- could it be Steven Tanger is broke already?

"No date has been announced for the completion of this project."

Yesterday, while having lunch with a TV journalist I was asked why it is that Greensboro has been unable to attract businesses to come here and my answer was, "You don't attract businesses, you build businesses from the ground up."

Retailers open new locations based on demographics. If enough of the kind of customers you think will buy your products are located there you go there. And it really doesn't matter that your biggest competitors might already be there. As a matter of fact: in retail, competition is good for business.

But manufacturing is something altogether different. A large manufacturer wants to be close to the resources they need to make their products and they don't want to get caught up in bidding wars to buy those products. Notice there are no large sawmills in the Piedmont Triad. We simply don't have enough trees to support a large sawmill.

Brick used to be a major export in this area. When I was young I hauled many a load of brick out of the Piedmont to cities all over the Southland. Until developers built houses, roads, and various other structures on top of all the available clay. The demand for brick never dropped off but these days most of our bricks are shale brick trucked in from Tennessee. I hauled shale brick in my later years.

Of course we all know how cotton and tobacco used to be the backbone of our local economy but the TV journalist who bought my lunch yesterday isn't from here and couldn't understand why cities everywhere have recovered and Greensboro hasn't. It was then I gave him a history lesson about television from before his time.

Every evening on all 3 networks the national news used to begin with an anchor man saying that housing starts were rising or falling and by how much. You see, throughout the '50s, '60s, and '70s housing starts were considered a major economic indicator. Then something changed.

What changed was that developers and builders figured out they could get loans and incentives from governments to go into speculative building. No longer did they have to be worried that the house might not sell as often they were turning a profit as soon as they started construction. All they had to do was build and put some of their new found fortunes into the pockets of politicians.

And suddenly, housing starts began to be considered an economic driver instead of an economic indicator.

Amazingly TV news anchors stopped talking about housing starts at just about the same time this change took place. Then developers started getting tax dollars to build all kinds of speculative ventures like malls, student dorms, shopping centers, stadiums, airports, and yes, even performing arts centers.

And for over 40 years every Mayor and City Council member elected to represent Greensboro signed on to every one of those ideas. And then some.

So it is, now the only resources Greensboro has left are located in the long neglected east side of town. I can show you 3,000 to 4,000 acres zoned commercial to heavy industrial all located in east Greensboro with some plots almost 1,000 acres on their own. The City of Greensboro owns 1,000 acres. Guilford County has extensive holdings in east Greensboro as well. Is it going to be business as usual for the east side just as it has been for the rest of the city or will residents of the east side finally get our share?

Pavement alone does not produce economic development. People are our #1 resource. If Greensboro is to grow we must invest in our people instead of concentrating on a few connected developers.