McClatchy in the News ... by gimleteye

What do the paeans to Alvah Chapman and the busted deal for downtown Herald property have to do with one another ("Extension for Herald land deal", Miami Herald, Jan 1, 2009)?

By all accounts, Alvah Chapman was an honorable man, unwavering and dedicated to his personal values. But unconditional praise of his leadership of the Herald and in the community is no more warranted than a free pass to the city's only daily newspaper for missing the biggest story of the century: the development asset bubble now crashed in the worst economic crisis since the Depression.

Today, the financial viability of McClatchy is in doubt. The busted land deal shows the corporation manoevering to monetize its most valuable asset, land beneath the Herald offices on Biscayne Bay. As the Herald notes, today, the parent company's share price closed Wednesday at $.80, from $12.50 a year ago. The $190 million busted deal for the Herald property, conceived at the height of the building boom, now represents three times the value of the entire corporation.

But remember: at the time the Herald deal was announced, there was nary a peep from the paper how its dismal coverage of the real estate asset boom was partly in consideration of the paper's vested stake in the speculative bubble; especially the value of stock options granted to key executives.

During the entire run-up of the real estate bubble, that triggered a national economic crisis-- critics never had a voice at the Herald any more than they did in criticizing its political origins that pushed Jeb Bush to the governor's office twice and that Alvah Chapman represented.

Instead, readers were treated to viewpoints like Willy Bermello's famous 2005 editorial, “Build Them, and They Will Come” (May 21, 2005), “... real estate continues to still be a safe harbor for investors, whether it be equity or the purchase of a condo in South Florida, where doubling of your investment in less than two years is commonplace. If you have euros or British pounds, then you buy with a built-in 30 percent to 40 percent discount. Miami deserves its place next to Shanghai and Dubai. More important, it deserves our confidence. The bubble is not latex but stainless steel.”

The only thing that was stainless steel was the impervious nature of a well-heeled economic and political elite in South Florida that did not tolerate dissent. Mr. Bermello is a former president of the Latin Builders Association; the substantial player in the real estate asset bubble run-up through its lobbying for zoning and building permits of condos, sprawl, and a failed growth machine.

He is also of Miami's order that Mr. Chapman helped fashion called the Non-Group; a kind of hot house nursery for the generation of Hispanic leadership that assumed power in Miami-Dade County decades ago. It was built on construction and development.

After Hurricane Andrew, Mr. Chapman was asked by President Bush to lead We Will Rebuild. What obituaries have not mentioned is that there was, at the time, an outcry that the Herald also failed at first to credit; citizens raised objections as to, "who" will rebuild, and "we" will rebuilt, what?

Mr. Chapman and his allies dismissed suggestions; whether from women whose interests were not represented at first or community activists. For instance, what was re-built in Florida City, then, was exactly what had existed there before the hurricane despite a forward thinking study by architects and planners who had volunteered their time and energy to outline the opportunity for a new economic future based on integrating the built landscape with nearby national parks.

The spurning of a new direction in favor of the quick buck soon turned into the Homestead Raceway, and the miserable performance of county commissioners in protecting the public investment, and then the failed effor to redevelop the Homestead Air Base by Mr. Bermello's colleagues; all reinforced an immoveable political elite and forecast exactly what would happen as the 1990's evolved to the 2000's asset bubble in construction and development and housing.

From its market high on October 9, 2007 through December 31, 2008 the Dow Jones Wilshire 6000 has lost $6.7 trillion. The national median home price, from July 2006 to November 2008 has declined from $230,900 to $180,800. And we are witnessing the fading of The Miami Herald and the nation's newspapers without any admission of errors how the mainstream media and its voices were too close to the trees to see the forest or what hid there.