An Oklahoma City property, the Crossroads Mall, is now owed by the U.S. government. The mall came out of bankruptcy last Spring, has a $77 million debt on its books, and is for sale with a price tag of $24 million. All the major anchor stores are long gone.
The Obama government hired a real estate broker to sell the property on behalf of the America people.
Losses are potentially at taxpayer's expense because the Fed generally makes a fat annual profit running the country's payments system and other operations, and any losses reduce how much it can pay out to the U.S. Treasury, and hence taxpayers.After bailing out JPMorgan Chase, to the tune of $29 billion, they purchased Bear-Stearns and acquired the OKC property through their portfolio. Are there other "physical" properties out there that our government owns in our cities and towns? Well yes, and there are probably far more than these examples:
In part, this decline in value is because two other pieces of the Bear Stearns collateral -- Extended Stay Hotels, and the GrandStay Residential Suites Hotels in Oxnard, California -- have sought court bankruptcy protection.
Extended Stay owes the Fed almost $900 million, consisting of $153 million in commercial mortgage-backed securities and $744 million in junior mezzanine debt, while GrandStay won Chapter 11 bankruptcy protection with a bit under $10 million in debt.
Our cities, towns and counties all have "federal" buildings, but now, "federal building" takes on a whole new meaning. We don't pay our trash and water bills in these new "federal buildings."
What the Fed and banks have said they are worried about is a new wave of losses on commercial real estate and here is an example of an early adopter in the Fed's portfolio," said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey.
That's a very telling comment. "Fed does not have the oil rights is just classic." There is an oil pump in the parking lot of this mall. Oil and mineral rights are often not sold in Oklahoma when a property changes hands. What would the Feds have done, had they known owning mineral rights on this property was a possibility, and the owner of those rights did not want to sell?
"The fact that the thing was written so that the Fed does not have the oil rights is just classic. Not that that is the Fed's fault," he said.
Here's a humorous look coming out of Oklahoma City's NewsOk.com, written by Richard Mize:
A cell phone in Washington, D.C. belts out "If You’ve Got the Money, I’ve Got the Time,” by Willie Nelson.
A recorded voice answers: "FRB Property Management. We’re busy. Leave a message!”
Caller: "Ben! Jim, in Oklahoma City. The women’s rest room next to my store is backed up! Help!”
Willie sings again: "If you’ve got the money, honey ...”
Caller: "Ben, Josh, in Oklahoma City. Some of the lights are out again in my end of the mall. Can you get somebody on it?”
Willie warbles: "Bring along your Cadillac, leave my ol’ wreck behind ...”
Caller: "This is Jim again, in Oklahoma City. Mr. Bernanke, the backed-up rest room is flooding my store! Do something!”
Silly, huh? But Ben Bernake, as Federal Reserve Board chairman, is, in fact, the landlord of Crossroads Mall in Oklahoma City.