(Los Alamitos, 8/22/2013) Our Thursday columnist’s piece arrived today accompanied by a dire warning from HG himself: Haven’t seen much about this recently. Now is the time for local folks to refocus their efforts. The Prologis side can already taste victory. They know the attention span of the American public. I do not predict an ending where we all live happily ever after.
by “Highlands’ Guy:” OK, it’s been a few months since all the hubbub over the Cypress-Prologis fiasco has died down a bit, but now is not the time to rest on our laurels.
While the tireless work of many local folks has been well received and has had some impact on the Cypress power structure, please take note that the heavy lifting must now take center stage.
Remember that the carrot at the end of the stick in front of the absentee landowners is money, and lots of it. And in the same arena, you have an international, billion dollar company that views the locals as nothing more than a flea to be flicked away at will.
As I mentioned some months ago, those who want to do what’s right for our community need to learn all they can about their opponent in order to figure out the most effective strategy. A simple look around the internet reveals a plethora of information of a most formidable opponent:
- On the big money side, a recent (8/16/2013) article at forbes.com noted that legendary investor Warren Buffet advises to be fearful when others are greedy and be greedy when others are fearful. Buffet’s target, Prologis (PLD), was diagnosed as greedy on his Relative Stock Index.
- In a February, 2012 bloomberg.com piece, U.S Energy Secretary Steven Chu had to answer to the House Energy and Commerce Committee about his, possible, illegal intervention on behalf of Prologis, Inc., and help to prop up the infamous Solyndra with a restructured loan. Documents showed that Solyndra was the single supplier in the first phase of Prologs’ Project Amp to install their equipment on rooftops they managed.
- So, what are we to make of this relationship with a company that went down in flames after federal scrutiny revealed their $535 million dollar federal loan was done with little oversight? The article also noted the myriad number of Prologis campaign dollars donated to a number of candidates that could ease federal loan guarantees.
- The lead sentence in an online.wsj.com article, from a couple of years back was, ‘Two U.S based global warehouse landlords said..that they had agreed to merge, in one of the biggest real-estate deals since the recession.’ AMB Property Corp. and Prologis became one.
- At that time, Prologis was valued at $8.4 billion, but has since had tremendous growth. The two entities manage distribution warehouses…near seaports, airports, and highway interchanges vital to corporate distribution networks. The deal was launched after both companies experienced a very difficult three years. And the Cypress land seemed like easy pickings in a money hungry Cypress economy.
Just read the carefully crafted letter from the Prologis folks to the residents of Cypress dated June of this year. I’ll paraphrase. They want to let the residents know what they are doing in “response to community concerns.” It starts off detailing the high environmental standards and how they will blend in with other Cypress behemoth (my word) industrial parks. They “heard loud and clear and have reduced the number of doors (not square footage or amount of truck trips).
So, who will the tenants be? Answer: “That’s confidential, but we’ll let you know.” I’ll bet just a bit too late in the process for us to complain.
They go on to note that it is a giant warehouse with lots of truck bays. But no it’s not really a “truck terminal”. It’s different. Yeah, right, and the noise and air pollution won’t hurt you because of the fancy signs.
Finally they say they only want to put this growth in place because it, “is critical for the City’s economic health.” As long as you don’t breathe in.
Gawd! What BS. Sorry to revert to expletives, but one can only absorb so much. I sure hope my friends and neighbors in Cypress refuse to be duped, again.
In the Fall of 2007, Authur Hodges, a Prologis vice president, conducted a talk with the University of Colorado Denver Business Institute. And I quote,
“Prologis leases space to big companies that move a lot of product around the world…like Proctor and Gamble Wal-Mart, FedEx…and shipping companies like NOL.”
Believe me they have no interest in the little guys up Katella like the above noted letter intimated.
Even more insightful are the remarks about how they operate as an REIT. As such they are exempt from federal taxes, but must distribute 90% of the income via quarterly dividends. And since they manage property funds, the investors have in many cases pre-agreed to buy the properties at the initial value.
Their completed and leased building is appraised for a lot more than their initial costs because of the dedicated income stream. They then sell the building to the fund at the new, higher value, and use the profit to buy an equity stake in the fund.
The original money is then “redeployed” to the next project. And to think that this profit on a profit could have been a retirement community or regional park or single family homes or..or?
And finally, here’s the exclamation point. From www.popularmechanics.com ,October 22, 2012. The big picture for diesel truck pollution versus gasoline emissions is bleak…says a just released UC Berkeley study.
It examines the release of secondary organic aerosols (SOAs) which have been linked to health hazards and climate change. The study used fuel sales scaling to correlate that diesel trucks produce seven times more SOAs than other vehicles. Further, the study indicated that reduction of the ‘single-ring aromatics and polycyclic aromatics (the bad stuff) has been thwarted by concerns for engine performance and the cost of fuel production.
I offer this data in the ongoing struggle to address the Prologis land grab. There may be a few pieces of information here that could be helpful in developing a proactive strategy.
“The other thing is quality of life; if you have a place where you can go and have a picnic with your family, it doesn’t matter if it’s a recession or not, you can include that in your quality of life.”
Jim Fowler (1932-) Zoologist. Host of Mutual of Omaha’s Wild Kingdom.
…And that’s just the way I see it.
Wow! Thanks for the “heads’ up,” H.G.
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