With our growing client base, it is important to have a strong presence downtown, closer to the epicenter of policymaking and news coverage.  We look forward to kicking off 2010 from our new offices at the Highpoint Center!

New address:

Highpoint Center
106 East College Avenue
Suite 700
Tallahassee, FL 32301

Florida Trend

Like the tail on a comet, home foreclosures continue to pour off into the slipstream left by the real estate meltdown. This summer, fully 10.5% of the 3.5 million mortgage loans being serviced in Florida were in some stage of the foreclosure process, according to a report prepared by a Florida Supreme Court task force, which called the figures “horrifying.”  The state ranked second in the nation in the number of properties with foreclosure filings, with about one in every 140 homes. In August, initial notices of default increased by 12% over July, and scheduled auctions rose by 13%, according to RealtyTrac.

In 2006, the 11th Judicial Circuit in Miami-Dade County had seen about 3,500 foreclosure cases filed as of June. As of June this year, nearly 35,000 had been filed. About 75% of the circuit’s incoming caseload is now foreclosure cases, says 11th Circuit Administrative Judge Jennifer Bailey, who also chaired the task force. Whereas the foreclosures that flooded in two years ago stemmed from loan dynamics — interest rate resets and balloon notes coming due, for example — foreclosures these days are coming because homeowners have lost jobs or had their hours cut. Bailey says her circuit is so backlogged that it takes seven months to schedule a courthouse-steps sale of a property after her court has issued a final foreclosure order. “There is no sign of anything abating in Florida or anything stopping,” Bailey says.

Whom to blame for this is past discussion. Let’s just stipulate that both borrowers and lenders were co-celebrants in the credit orgy that defined the real estate boom. In any case, foreclosure is an ugly process in which neither borrower nor lender wins. Most homeowners would prefer not to get kicked to the curb, even when their homes are worth less than they paid for them. For lenders, foreclosure cases are time-consuming and expensive: Foreclosure filing fees alone can be $1,900. Most lenders simply don’t want to end up taking back homes they have to maintain and then resell at a big loss.

Meanwhile, the masses of foreclosures tear at a community’s fabric, often spinning off crime and other problems related to abandoned properties and declining home values.

One of the few bright spots in this otherwise grim picture is some good work being coordinated by the Collins Center for Public Policy. (It’s a tribute to the late Gov. LeRoy Collins that his legacy includes two first-rate, independent public policy groups: The LeRoy Collins Institute, a public policy shaper with a research orientation, is affiliated with Florida State University. The Collins Center, which has offices in Tallahassee, Sarasota and Miami, tends toward a slightly more activist bent in its projects.)

The Collins Center stepped up to the plate after the last legislative session, when lawmakers considered creating a mediation program that could help lenders and borrowers negotiate a way to keep people in their homes and keep payments flowing to lenders. When the Legislature produced neither funding nor legislation, the Collins Center on its own began approaching circuit court administrators about introducing mediation into the foreclosure process. The center had coordinated a large-scale mediation effort in 2004-05 when hurricanes produced a logjam of disputes between homeowners and insurance adjusters.

So far, the center is working with three circuit court districts that now require mediation to be offered as a part of foreclosure cases involving residential, homestead properties. Those three districts encompass Miami-Dade, Martin, St. Lucie, Okeechobee and Indian River counties in south Florida, along with Escambia, Santa Rosa, Okaloosa and Walton in northwest Florida. Those districts require lenders, as they file foreclosure suits in local courts, to provide the Collins Center with the borrower’s contact information. The center then reaches out to the borrower to see if he’s interested in trying to work out his loan through mediation, says Ned Pope, director of the Collins Center’s mediation program. About a third of the borrowers respond.

The center arranges a meeting between the homeowner and a local certified financial counselor to determine how much financial breathing room the homeowner has. Then the center arranges a session at which a locally based, court-certified mediator conducts a negotiation between the homeowner and the lender. The center’s efforts and the circuit court’s backing address a big problem in working out loans, Bailey says — establishing effective communication between loan servicers and borrowers.

About a third of the time, Pope says, the mediation reaches an impasse, and the foreclosure proceeds. In nearly 70% of the cases, however, the homeowner and lender are able to reach agreement on a modification of the loan that fits the homeowners’ financial circumstances. The lender, of course, avoids having to take back the house and ends up with a performing loan.

The mediation program relieves the court of the administrative burden of handling the cases, saving time and money. It uses local counselors and mediators, not Collins Center staff. The cost is minimal — $750, paid upfront by the lender, most of which goes to the financial counselor and the mediator. Perhaps best of all, the mediation effort doesn’t involve creating a government program to deal with a problem whose dimensions, over time, should return to more typical levels.

This month the Florida Supreme Court will decide whether to make mediation a mandatory part of foreclosure cases in Florida’s other judicial circuits. Bailey’s task force has recommended the Collins Center’s program as the model. Both she and the task force “can’t see how this isn’t cost-effective” for lenders, she says.

The other judicial districts in Florida would be wise to adopt mediation as part of the foreclosure process. Bailey, Pope and others also believe that lenders should introduce mediation after a loan has become delinquent but before they file a foreclosure lawsuit. “Even if we only settled 10 out of 100, it would save court fees and attorneys fees and would save us work as well,” says Pope.

In the meantime, the center’s program isn’t costing taxpayers a dime. And by the time this appears in print, more than 1,000 Floridians will still be in their homes — and paying their mortgages — thanks to the program. Given the grim nature of the foreclosure statistics, any effort that’s successful at making the best of a bad situation is well worth noting.

Many thanks to Florida Trend for recognizing Capitol Energy Communications in the November 2009 issue.  We are proud of our commitment to energizing clients’ messages, and look forward to more successes in 2010!

Look for tweets with the #flaforum hashtag…reporters, staffers, lobbyists, and others will be using it.   

Let the debate begin!

Quote of the day:  “We need the jobs and we need the affordable energy.”   
–State Senator Charlie Dean, R-Inverness, whose legislative district includes Hamilton county.

Capitol Energy Communications was proud to help facilitate an informative and productive economic roundtable today in Hamilton County.  Hamilton County residents and small business owners enjoyed a homemade luncheon (thank you Sandy Hurst!), received a presentation of the ADAGE Hamilton County proposed project, and participated in a question and answer session with representatives from ADAGE, AREVA, and Duke Energy. 

We will update with photos soon.  In the meantime, check out the ADAGE website.

By Bill Cotterell

JASPER, Fla. — Building a giant biopower plant in Hamilton County will generate the two things rural North Florida needs most — jobs and clean energy — executives of a new power consortium told county officials today.

ADAGE, a joint venture between Duke Energy and the global power firm AREVA, plans to start construction of the plant near Interstate 75 and State Road 6 in the spring.

At the peak of construction, in mid 2011, contractors will have about 500 workers at the site and, although regular operation of the power plant will take only 24 fulltime employees, the project is expected to generate hundreds of jobs in forestry, trucking and related trades.

“This will be great for the county and it will put a little more market pressure on timber up here in North Florida,” said State Rep. Leonard Bembry, D-Madison. “Right now, timber is at about a 25- or 30-year low.”

County Commissioner Lewis Vaughn noted that PCS, a 900-employee potash plant that is the county’s largest employer, is laying off 168 workers. He said Hamilton has 9.6 percent unemployment, a bit below the statewide 11 percent average but still high.

“We need the jobs and we need the affordable energy,” said state Sen. Charlie Dean, R-Inverness, whose legislative district includes the county.

Reed Willis, president of ADAGE, and Rob Parrett, the company’s director of business development, said the plant will have a $105 million economic impact initially. They said about 100 trucks a day, each hauling 25 tons of logs, will service the plant and hundreds of jobs will be produced in clearing stumps, limbs and treetops, chips and residue, and other scraps now left on the forest floor.

Biodiesel and other energy initiatives touted as “green” have met with resistance in some areas. A plant planned in Tallahassee was recently cancelled in the face of vocal local opposition.

But Eric Draper, policy director of the Audubon Society, said the Big Bend plant was planned in an urban area where air quality would be harmed. Contacted in Tallahassee, he said the Hamilton County plant might be appropriate for the region.

“They can’t strip-mine the forests,” he said. “But clean, renewable energy is the source of the future and if they can do it in a way that doesn’t harm the forests, that would be worth pursuing.”

An engineer by trade, Lucas has taken the entrepreneurial plunge and started his own business, turning re-purposed wood into beautiful and functional art.  Paying for advertising is tough for any small business owner, so I encouraged him to learn how to leverage social media to get his message out.

As a communications professional, it’s critical that I keep up with all the new resources that social media has to offer.  I offer strategic, cost-effective communications services, including media relations, branding, and PR. Part of doing the job right often requires partnerships with other professionals, and just like graphic designers or website developers, social media experts are increasingly becoming part of a good communications team.  It’s good to know where to turn.

PS—I’ll post a link to Lucas’s new website when it’s live.  Recycling beautiful wood from our own backyards—wood that otherwise would have ended up in a landfill—and making it useable again?  Sounds like some of our clients.  I’m in!

WILLMAR, Minn. — From his desk at the local electricity cooperative, Bruce Gomm can see the looming black smokestacks of the city’s aging coal-fired power plant. He can also see, on his office wall, framed photographs of sleek new wind turbines. Together, they are a changing world foretold.

Gomm is placing a major bet on wind to produce the electrons that will power his customers’ lights and run their dishwashers. He is at the forefront of a movement called community power, the idea that neighborhoods and towns can install their own renewable power sources and rely less on electricity that flows from distant realms.

Photo Courtesy of Washington Post

As costs of solar and wind come down, the concept’s popularity is looking up, though challenges remain for an industry in its infancy.

Willmar Municipal Utilities invested nearly $10 million in a pair of 256-foot towers to capture the prairie wind here, about 100 miles west of Minneapolis. Gomm calculates that the wind power will cost less than the equivalent in coal-powered energy and, when the debt has been paid in 12 years or so, the electricity will come virtually free for as long as the turbines are standing.

Along the way, Willmar will have reduced carbon emissions and made progress toward reaching a state requirement that Minnesota generate 25 percent of its power from renewable sources by 2025. Gomm, who estimates the turbines will produce 3 to 5 percent of the town’s energy, aims to build more.

“This is the biggest investment Willmar Municipal Utilities has ever made,” engineer Wes Hompe said, standing beneath a huge new turbine outside town. “What makes it worthwhile? This is the future.”

Although most analysts consider it unlikely that neighborhoods or towns will one day exist entirely off the grid, believers in small-scale power see a growing role for local renewables, ranging from individual windmills and solar panels atop homes and big-box stores to larger clusters of turbines and panels wherever they will fit. In Rock Port, Mo., spinning turbines already are producing more than 100 percent of the town’s annual energy requirements.

While Rock Port, and the state of Minnesota, are focused on wind, other states and communities are emphasizing solar. The technology is more compact and less obtrusive, especially in urban and suburban areas. California is spending millions on a “Million Solar Roofs” project to help property owners install solar arrays, while Gainesville, Fla., and several states are experimenting with special tariffs and incentives to promote solar.

Federal authorities are investing billions through grants and tax breaks to promote alternative power. President Obama predicted this year that renewable fuel capacity will double in “the next few years.”

Amory B. Lovins, a Colorado-based renewable power advocate, refers to the transformation of the energy industry as “reinventing fire” and contends the wind, solar and hydropower industries have gone from alternative to mainstream. He cites figures from London-based New Energy Finance to estimate that they represent “probably half of all new electricity. Renewables are getting less expensive, often rather dramatically.”

Within the renewables world, Lovins suspects economics will increasingly favor small and medium-sized projects in place of vast wind and solar farms located on remote mountain ridges or desert floors far from population centers. Transmission is costly and, as utilities across the country have learned, the routing of new power lines often generates opposition and lawsuits.

David W. Mohler, a Duke Energy strategist, sees both the promise and limits of community power. He predicts local energy sources, sometimes called distributed generation, will be a “small but meaningful part” of the nation’s energy portfolio. His North Carolina home is equipped with solar panels and a storage battery, he said, but “it’s really tough to think about thousands and thousands of megawatts. It’s like thinking about using AAA batteries for your car.”

As it has grown, the renewables industry also has benefited from state rules requiring utilities to draw more power from such sources. But the challenges have also multiplied. The increased quantities of electricity from alternative fuels are competing for transmission space, while utilities and distributors are sometimes reluctant to disturb their existing networks of suppliers.

On another front, utilities must account for customers who generate more wind and solar power than they use and want to sell the extra to the power company, an arrangement called net metering. The result, as Mohler put it, is “that we’ll have some business model issues to address.”

Traditional energy companies, particularly coal producers and users, will see renewables as a threat to their profits and fight back, predicts Beth Soholt, director of Wind on the Wires, a St. Paul, Minn., advocacy group. She said the wind industry will need help changing the payment and transmission structure if it expects to compete, meaning that legislators and regulators must show they are “serious about the goals they have set.”

“Now we’re not just a gleam in somebody’s eye,” Soholt said. “We’re real.”

Thanks in part to state incentives, turbines have been sprouting in Minnesota locations where local investors or a government entity has cobbled together financing. The owners have sold much of the resulting electricity to utilities, notably Xcel Energy, the nation’s No. 1 wind user, which purchases 1,200 megawatts in the state and expects to build its own wind farms.

Small-power advocates took heart from the first phase of a Minnesota Energy Department study, released last year, which concluded that 600 megawatts of power in small increments could be added to the grid with minimal need for new lines.

The second phase of the report, released in September, carried a caveat. It showed that the land close to existing lines had mostly been snapped up and that small projects, when grouped together, add stress to the grid. If the analysis is correct, renewables will not be able to continue to expand without transmission upgrades, raising complex questions about who will pay.

Transmission costs played a role in Willmar’s decision not to import wind-fueled energy from the Dakotas or Buffalo Ridge, located in southwest Minnesota.

“The more local we are, the more confident we feel,” Gomm said.

Looking ahead, the cooperative also conducted an experiment with the power plant outside Gomm’s window, burning 100 tons of corncobs for several days in place of 60 tons of Montana-mined coal.

“We’re trying to experiment,” Gomm said. “Renewable energy is going to be more and more of the mix of our energy future.”

One recent afternoon a few miles from Gomm’s office, 20 utility executives, energy advocates and local citizens sat around a conference table at Kandiyohi Power Cooperative and discussed another experiment, one that would help 100 customers adopt solar or wind technology along with a menu of efficiency upgrades.

As the group discussed a dizzying array of government programs and technological options, members noted how quickly the field is shifting. They adjourned to study a Colorado city’s experiences with solar investments and the latest incentives and regulations from Washington and St. Paul.

“It’s not so much a train that’s coming. It’s here. We have to deal with it,” said David J. George, Kandiyohi’s chief executive. Preparing last winter for a community meeting called “Turbine Talk” in rural Minnesota, George expected 25 people to show up. The crowd neared 100.

As Lovins sees it, the long-term trends show a shift from traditional energy sources toward renewables — the more local, the better.

Renewable fuels “will continue to take over the market because they have lower costs and lower financial risks than central thermal,” predicted Lovins, chairman of the Rocky Mountain Institute, a Colorado think tank. “It’s driven by economics and its driven by climate and security concerns. And all three are going in the same direction.”