Gambling on the market: SN's layoffs, the ER and the Marina Center
I have empathy for those who are losing their jobs at Eureka-based Security National Servicing Corp. The company today announced it is forced to layoff 31 employees, 21 of them here in Eureka. It is tough to suddenly be unemployed in these times, when the economy is almost certainly mired in a recession.
For months speculation has swirled in local circles that Security National, the family-owned real estate loan servicing company held by Eureka movers and shakers Rob and Cherie Arkley, has suffered financially because of the subprime loan crisis. Because it's family owned SNSC doesn't have to disclose its finances to stockholders, like publicly held companies. SNSC has always been somewhat secretive, even mysterious, given the complicated securities market the company deals in.
How I understand it is that Rob Arkley is a pioneer of sorts in the field of buying distressed real estate loans then repackaging the loans and selling them to investors. My understanding is that this type of securities trading is relatively new, developed in the past two decades or so, and Arkley was super successful at it.
But now with so many Americans who got subprime loans unable to keep their homes because property values across the country finally peaked then started to decline, the market for this particular commodity has taken a severe beating. The collapse of this market crippled the nation's fifth largest investment bank, Bear Stearns. Lenders are foreclosing on subprime loan recipients on an unprecedented pace.
SN had employed 142 people in Eureka. A layoff of 21 employees is a 15 percent reduction of the company's local staff. That is far from catastrophic (unless you're one of the 21).
But looking forward, what does this mean for Arkley's Marina Center, the megacontroversial Home Depot-anchored development proposed for the Balloon Track in Eureka, which SN bought in 2006? It seemed right after the November 2006 election that this project was going to appear before the Eureka City Council very quickly. But for a year and a half now, there has been little news about the status of this project. There have been reports that various bureaucratic flies in the ointment -- such as expensive traffic mitigation measures demanded by Caltrans -- has slowed the momentum on this project. But that does not fully explain why this project seems to be completely stalled; many in the community expected to see this project come before the City Council early last year.
Then there is the Eureka Reporter, Arkley's expensive rival to the Times-Standard which most certainly is still a major drain on Security National's capital. Recently the newspaper scaled back its publication from seven to five days per week and cut its staff. Last month a jury in San Francisco awarded a multimillion dollar verdict to a newspaper who had sued a rival paper for unfair competition. That verdict makes the Eureka Reporter even more vulnerable to a lawsuit by the Times-Standard, in my opinion, though it remains to be seen if the verdict survives an appeal.
Personally, I would hate for the Eureka Reporter to disappear. I have come full circle on how I view the Reporter, a topic I hope to blog about in the next few days.
However if recent developments mean Arkley is wavering on whether to move forward with trying to force a Home Depot onto Eureka's waterfront, I believe the community benefits. Not only is a Home Depot on the waterfront a bad idea for Eureka for many reasons, the proposal itself has proven to be exceedingly divisive for this community.
Comments
Here we go with the BIG lie "Home Depot on the waterfront" Let's just take the fence down and give it back to the junkies.
Posted by: brian | March 24, 2008 05:23 PM
What's the "big lie?" That Home Depot on the Balloon Track is controversial? That it's not good for Eureka? Or that it's on the waterfront?
Posted by: Andrew Bird | March 24, 2008 05:32 PM
Is brian one of the 121 poor souls left at Security National? Everytime anyone mentions Home Depot on a blog here he comes with his defense of the project.
And, Andy, I am anxious to see you defend a propaganda rag as bad as the Eureka Reporter. This should test your skills at writing spin.
Posted by: Anonymous | March 24, 2008 06:12 PM
The Eureka Reporter provides jobs for young journalists. That is why I want it to stick around. I will try to make a post on this within the next few days.
Posted by: Andrew Bird | March 24, 2008 07:14 PM
Read the words " Home Depot on the waterfront" The Balloon tract Is NOT on the waterfront! Also I do not work for SN. The plans call for HD to be on the Broadway side of the tract. Thats not the waterfront. The Dump and Costco are closer to the bay, that ugly ass Mall is closer to the bay.
Posted by: brian | March 24, 2008 07:21 PM
F'n Perisons is closer to the bay.
Posted by: brian | March 24, 2008 07:23 PM
...and can't spell worth a damn
I guess for something to be considered "on the waterfront", it must literally be in the water.
Posted by: brian is a dipshit | March 24, 2008 08:29 PM
I wonder, if Arkley had the cash he's spent to date keeping the Reporter alive, if he could have paid all those people's wages for quite some time rather than increasing Humboldt's unemployment rate?
Let's ask the employees:
What do you like more, having the Eureka Reporter or having a job?
And then I ask the community at large the same question: what is more of a priority?
Having the Eureka Reporter around or having 21 of our community members, people who are probably your neighbors, keeping their jobs?
Posted by: Anonymous | March 24, 2008 08:46 PM
8:29 Sorry my spelling does not meet your standard. It must me nice to think that you are sooooo much better than eveyone else. "ON the waterfront" means ON the waterfront", not across the street from the waterfront..... It's good of you to respond with name calling. Oh so brave!
Posted by: brian | March 24, 2008 09:42 PM
And of course that is why the don't call the Cafe Waterfront the Cafe Waterfront.
Posted by: Mike Buettner | March 24, 2008 10:55 PM
I wonder if the 21 jobs were at or about the $10 an hour living wage?
From what I have heard the majority of jobs at each Home Depot store is a part-time near minimum wage job.
Posted by: old-timer | March 25, 2008 12:56 AM
What was expected? because people believe we are behind the "redwood curtain" the economic crisis would not do much damage here in the area?
The slow in economic development, by Arkley, or anyone else is not good for our area. Most of the time, we are just a small community that complains, but does nothing more about it.
Instead of being the nagging small community, let's help ourselves by working together locally, as well as writing letters to our State and Federal representatives about the billions being spent on foreign aid. Our foreign aid should be distributed between the States, and develop our education, infrastructure, health care and social security take care of home first.
Posted by: CharlieB | March 25, 2008 11:43 AM
Brian in his comments above is mixing up two different notions "On the waterfront" refers to the zone where people shop, live, eat, and we find economic activity. "On the Bay" refers to proximity to the water. The proposed Marina Center by anyone's reasonable definition is "on the waterfront". Pierson's Building Center does not fit that definition as behind it are wetlands that cannot be developed. While both areas face Broadway they are not comparable.
Posted by: Another Voice | March 25, 2008 09:27 PM
I visited the Crescent City Home Depot over the weekend, and it really appeared to be out of place. Not to mention, the HD was empty w/the exception of all the employees . Some locals feel that the store will not last more than 3 years before closing, but we'll see.
Posted by: Hobos against development | March 26, 2008 02:04 PM
Another voice doesnt seem to be aware that the proposed home depot will sit further from the bay than the costco that already exists.
Posted by: Anonymous | March 26, 2008 09:22 PM
out of it, and could seldom occasion the exportation of a single http://idisk.mac.com/christianbackgroundl/Public/0/free-backgrounds-and-layouts-for-myspace.html >free backgrounds and layouts for myspace their neighbours. The far greater part is circulated and consumed fvwrjutois
Posted by: Faith | March 30, 2008 05:19 AM