July 17th 2006

In This Issue

Economic Notes:

This Weeks Leads



Economic Development and Corporate Income Taxes

In 1990, Ireland’s total work force was 1.1 million. This year it will hit two million, with no unemployment and 200,000 foreign workers (including 50,000 Chinese). Irelands economic development advice is very simple:
  • Make high school and college education free;
  • Make your corporate taxes low, simple and transparent;
  • Actively seek out global companies;
  • Open your economy to competition;
  • Speak English
  • Keep your fiscal house in order; and
  • Build a consensus around the whole package with labor and management.

Then hang in there, because there will be bumps in the road – and you too, can become one of the richest countries in Europe.

”It wasn’t a miracle, we didn’t find gold. It was the right domestic policies and embracing globalization.” – Irish Economic Development Official. Source: Financial Times, 2006
3Dist of Columbia9.98%
5Massachusetts9.5 0%
7New Jersey9.00%
8Rhode Island9.00%
9West Virginia9.00%
12California8.84 %
15New Hampshire8.50%
21New Mexico7.0%
22Connecticut7.50 %
23New York7.50%
26North Dakota7.00%
28North Carolina6.90%
29Montana6.75 %
41South Carolina5.00%
43Colorado4.93 %
46South Dakota0.00%
Yes, you don’t need to point out the missing states! I can count too! BS

Source: Federation of Tax Administrators, 2006


Innovation Lacking In New U.S. Commercial Buildings

The country that invented the iPod is struggling to transfer that knack for high-tech innovation into commercial building design. From Shanghai’s colossal World Financial Center to the world’s largest commercial development in Dubai, high-tech building designers and developers are blazing trails on foreign shores.

“Innovation is stuck in neutral in this country,” says Jim Young, co-founder and producer of real estate technology conference Realcomm. Young kicked off the general session at Realcomm’s annual conference earlier this week in Dallas. The conference, titled “Making connections @ the intersection of commercial real estate, corporate real estate and technology,” drew more than 8,000 tech- savvy and tech-curious commercial real estate executives to the Dallas convention hall.

“In a wireless world, the U.S. is losing the battle to create the most high-tech commercial space,” said Young, who as Realcomm producer spent the past few years surveying high-tech commercial properties throughout the world. In fact, 52% of all major U.S. office buildings don’t even support property-specific Websites, according to a preliminary survey by the Building Owners and Managers Association.

So where are developers building the most innovative new commercial properties? Young says that Middle Eastern hot-spot Dubai — where more than 1,000 new buildings are under construction — is one market leader, by quantity, if not by quality. When Young took a Realcomm delegation to Dubai last fall, one fellow tour members summed up the massive development as follows: “It's like seeing Orlando, Las Vegas, New York, San Jose and Miami Beach all being built at the same time in the same place.”

Some startling facts: The world’s largest mixed- use tower is under construction in Dubai. When completed, Burj Dubai will include 160 stories — and the top floors will be reserved for apartments. Developers also plan to build an underwater hotel in Dubai, not to mention an 11 million sq. ft. mall. Guests will be able to watch dolphins and others sea life from their hotel room 80-feet below the water’s surface. The mall, when completed in 2009, will be the world’s largest enclosed retail space, twice as large as the biggest U.S. mall. Many of these new buildings will include 21st century building automation systems, and a monorail system will connect many to residential districts scattered across various islands and peninsulas.

Most of the new office buildings under construction in the U.S. today are using the same outdated technologies that were invented as much as 20 years ago, says Young. He finds it ironic that most Americans spend the bulk of their lives inside buildings — especially office buildings — yet their workspace has reluctantly embraced many new technologies.

Who hasn’t been forced to either hug a windowsill or leave a building entirely to get decent cell phone reception? In Shanghai’s 101-story World Financial Center, which is currently being built in China, that won’t be a problem. The entire building, not to mention the high-tech Pudong District surrounding it, will be fully wireless. Cell signals will be transmitted throughout the entire complex, even as far as six stories below ground in the tower’s many basements. Vertical access through the tower will also be more efficient. As many as 16 of the tower’s 31 elevators will be “super double-deck” cars that can carry more passengers through the building much faster.

One small success: American innovation is playing a role in Shanghai’s World Financial Center. Connecticut-based United Technologies Corporation designed these elevator cars through its wholly- owned subsidiary Otis Elevator Co.

“Look around today, we were involved in the earliest part of most major innovations, from the auto to the airplane,” says Young. “The big question now is: Can we get it back? Can we shed our bureaucratic tendencies and strive for true innovation again?”

Source: NREI Newsline

Federation of Tax Administrators
  • Economic Notes:
    • Treasury Report

    • The unified surplus for June was $20.5 billion, slightly above the CBO’s preliminary estimate of a $19 billion surplus. Through the first nine months of fiscal year 2006, the U.S. has run a unified deficit of $206 billion, 17% smaller than at the same point last year.
    • Chain Store Sales

    • Chain store sales rose a slight 0.2% in the week ending July 8, according to the ICSC. Year- over-year growth ticked up to 3.0%. Traffic was reportedly strong, at least on July 3, which many people had off.
    • MBA Mortgage Applications Survey

    • Mortgage demand increased last week, with the market index rising 1.0% in the week ending July 7. Purchase applications increased 2.6%, while refinance applications decreased 1.6%.
    • Oil and Gas Inventories

    • Crude oil inventories plummeted by six million barrels for the week ending July 7, according to the Energy Information Administration, far above expectations of a 1.2 million barrel draw. Gasoline inventories fell by 0.4 million barrels, against expectations of a draw of 0.1 million barrels. Refinery utilization fell sharply to 90% for the week. This report should have a bullish impact on prices.
    • International Trade (FT900)

    • The nominal U.S. trade deficit in goods and services widened in May. In May, the U.S. trade deficit came in at $63.8 billion, $0.5 billion more than April’s revised $63.3 billion, according to the Bureau of Economic Analysis. The goods deficit with China also widened again to $17.7 billion in May, while soaring crude oil prices increased the nation’s import bill for crude oil/petroleum products. If the trade deficit, measured on a real basis, does widen then it could be a drag on growth.
    • Manufacturers Alliance/MAPI Survey

    • The Manufacturers Alliance/MAPI composite index fell to 71 in June from March's reading of 74. The survey points to continued, but slower, expansion of manufacturing activity in the coming quarter.
    • Retail Sales (MARTS)

    • Total retail sales unexpectedly fell 0.1% June, reversing May’s unrevised 0.1% gain. Auto sales led the decline despite the small increase in unit sales. Non-auto sales were up 0.3%, approximately in line with expectations. Gas station sales continued to lead growth due to increasing gasoline prices. Year-over-year growth slowed to 5.9% in total and 8.5% excluding autos.
    • Business Inventories (MTIS)

    • Total business inventories increased a higher- than-expected 0.8% for May. Inventories at retailers increased 1.6%, a significant jump from April's -0.1% reading. Total business sales increased by 1.4%. The total I/S ratio fell slightly to 1.25.

  • This Weeks Leads
    • Andrews Jewelers and Rogers Jewelers
    • Rogers LTD, Inc. trades as Andrews Jewelers and Rogers Jewelers.
    • The 54-unit chain operates locations throughout AR, FL, IA, IN, KY, MO, NE, OH, SD and TX. The jewelry stores occupy spaces of 1,500 sq.ft. to 2,000 sq.ft. in malls.
    • Growth opportunities are sought throughout the existing markets during the coming 18 months.
    • For details, contact Len Schneider , Rogers LTD, Inc., 521 Shoreview Drive, Rockwall, TX 75087; 972-772- 2847, Fax 972-772-2897; Email: lschne007@sbcglobal.net

    • Pizzaria Paradiso
    • Pizzaria Paradiso operates two locations throughout Washington, DC.
    • The pizzerias occupy spaces of 3,500 sq.ft. to 4,500 sq.ft. in urban/downtown areas.
    • Growth opportunities are sought throughout the existing market during the coming 18 months, with representation by Transwestern Commercial Services.
    • For more information, contact Alex Walker or Bill Miller, Transwestern Commercial Services, 1667 K Street Northwest, Suite 300, Washington, DC 20006; 202- 775-7087/7033, Fax 202-775-7009; Email: bill_miller@transwestern.net.

    • Tahari Outlet
    • Tahari Outlet, a 13-unit chain operates locations throughout the eastern coast and NV.
    • The women’s discount apparel stores occupy spaces of 2,500 sq.ft. to 3,500 sq.ft. in outlet centers.
    • Growth opportunities are sought nationwide during the coming 18 months.
    • For details, contact David Hirsch, Tahari Outlet, 501 Broad Avenue, Ridgefield, NJ 07657.

    • Marcus Theaters
    • Marcus Corp. trades as Marcus Theaters. The 45- unit chain operates locations throughout IL, MN, OH and WI.
    • The movie theaters occupy spaces of 32,000 sq.ft. to 70,000 sq.ft. in freestanding locations and malls.
    • Growth opportunities are sought throughout the existing markets during the coming 18 months. A land area of 12 to 18 acres is required.
    • For details, contact Katie Falvey, 100 East Wisconsin Avenue, Suite 1900, Milwaukee, WI 53202; Website: www.marcustheatres.com

    • Strings Italian Café
    • Strings Franchise, Inc. trades as Strings Italian Café at 30 locations throughout CA and NV.
    • The restaurants use 500 sq.ft. to 2,800 sq.ft. in freestanding locations, malls, downtown areas and strip centers.
    • Growth opportunities are sought throughout northern CA during the coming 18 months.
    • For more information, contact: Al DeCaprio, Strings Franchise, Inc. 11344 Coloma Road, Suite 545 Gold River, CA 95670

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