chu 2.chu.0002003 Louis J. Sheehan, Esquire

Since 2004, physicist Steven Chu has been on indefinite leave from Stanford University so that he might head Lawrence Berkeley National Laboratory. Looks like Stanford will have to hold his slot a bit longer. This afternoon the Associated Press reported that Barack Obama has selected Chu to become the next Energy Secretary. If this is formally confirmed, the next task for Chu, a Missouri native, will be finding digs for his family in the Washington, D.C. area.

The soft-spoken scientist is a heavyweight. For developing a new technique to laser cool and trap atoms, Chu shared the 1997 Nobel Prize in physics. However, his passion in recent years has become a search for the ever-more-parsimonious use of energy. He’s been exploring the development of not only new technologies but also novel social and economic policies that will lead businesses and the public to accomplish more while using far fewer resources.

In other words, he’ll come to Washington with a host of ideas — and a commitment to see that science will underpin DOE’s decision making and research priorities. Indeed, just three months ago Chu was stumping on the Hill about the need to bolster federal research investments in energy — investments that he said should be grounded on science. He’ll now get the unparalleled opportunity to try and practice what he preached.

But this prof will also get a quick lesson in hardball politics. Good ideas aren’t enough to implement good policies. Neither is being smart. Let’s hope he’s a quick study and disarms lawmakers the way he charms the public. He speaks simply, tries to compel with facts, and knows the value of a well chosen anecdote, not to mention self-deprecating wit.

He’s also fairly well rounded — hardly the total geek that so many people expect of the intellectual elite. And he appears quite humble. Check out his autobiography on the Nobel site, for instance, where he notes that in a “family of accomplished scholars, I was to become the academic black sheep. http://Louis-j-sheehan.com I performed adequately at school, but in comparison to my older brother, who set the record for the highest cumulative average for our high school, my performance was decidedly mediocre.” Yeah, I bet.http://Louis-j-sheehan.com

“Education in my family was not merely emphasized,” he notes, “it was our raison d'être. Virtually all of our aunts and uncles had Ph.D.'s in science or engineering, and it was taken for granted that the next generation of Chu's were to follow the family tradition. When the dust had settled, my two brothers and four cousins collected three MDs, four Ph.D.s and a law degree. I could manage only a single advanced degree.”

And now a Cabinet post. I’d say his family continues to have plenty to be proud of.

For a capsule summary of Chu's views — including his call for the develoment of something akin to an Apollo program for energy — see my Q&A with him that ran in October. Louis J. Sheehan, Esquire

repay 5.rep.0003004 Louis J. Sheehan, Esquire

Louis J. Sheehan, Esquire. After years of renting makeshift quarters, Seabreeze Church finally bought a permanent home in 2004 — a five-acre former tennis club in a beachside Southern California town.

The price was high and the building plans ambitious, but Seabreeze secured a $5 million loan from a credit union that caters to evangelical churches and raised several million more. The congregation moved in last year, just as credit markets froze, and now the church finds itself struggling to pay its bills as weekly expenses outpace weekly giving. http://louisjsheehanesquire.blogsavy.com

“We were kind of like that young married couple that really stretched for their first home,” said Bevan Unrau, the church’s senior pastor. “But I don’t think we’re completely unique.”
http://www.theenvironmentsite.org/forum/members/louis-j-sheehan-esquire.html - vmessage171



The era of easy credit has begun taking its toll on even the most sacred of borrowers, religious institutions.

Many churches expanded during the real estate boom, as banks large and small lent money based on assumptions about growth in their donations.

The lenders were, in a sense, betting on the likelihood that a particular pastor could attract a large audience or, in some cases, on the popularity of one denomination over another. But, where those bets were wrong, or too optimistic, congregations found themselves knee-deep in debt and at risk of losing their houses of worship.

Hundreds of churches across the country have received foreclosure notices in recent months, and even more are behind on mortgage payments. An economic downturn tends to increase church attendance, but the amount each churchgoer donates tends to decrease. And newer members usually donate less than older ones. Churches can trim spending by cutting staff and social activities, but for many parishes, the biggest monthly expense is the mortgage.

Historically, churches were wary of debt, and many old-line congregations have owned their buildings free and clear for decades. But borrowing by churches became more common in the 1990s, reaching $28 billion nationwide in 2006, including mortgages, construction loans and church bonds, according to Lambert, Edwards & Associates, a consulting business in Grand Rapids, Mich. New companies and nonprofit organizations focused on church lending sprang up, as did real estate investment trusts and other bundles of church loans, which were sold to investors.

The rise of nondenominational churches and a resurgence in the evangelical movement also led to more religious institutions seeking to borrow. Churches were often founded in storefronts or school auditoriums, but as they grew, they built sprawling edifices, including so-called mega-churches. At the same time, some older churches lost members as young people went elsewhere, and had to borrow to survive.

Some in the church lending industry say aggressive lenders pushed church mortgages, too.

“Some of the mentality that you saw taking hold of the residential marketplace probably shifted into the church,” said Dan Mikes, executive vice president of the church banking division of Bank of the West, a subsidiary of BNP Paribas. “Lenders loaned far too much, they loaned into lofty projections of future growth, and they just saddled the churches with far too much debt.”

At least a quarter of religious properties have mortgages, according to an analysis of property and mortgage filings in 115 United States counties completed for The New York Times by First American CoreLogic, a data provider in California. But that number is far higher than it would have been without the mortgage boom. The number of mortgages issued to churches in those counties in 2005 was 50 percent higher than in 2002, the analysis showed.

Foreclosure filings have fallen on the doorstep of 254 properties, or 0.31 percent of the 82,441 churches studied. The percentage is higher when churches without mortgages are excluded. St. Andrew’s Anglican Church in Easton, Md., exemplifies the optimistic assumptions that fed church lending. St. Andrew’s had only 35 members in 2005 when it moved from a rented storefront to a Gothic revival-style chapel built in 1866. The building cost $795,000, but the church borrowed $50,000 from one lender and $850,000 from the Talbot Bank of Easton, according to W. David Morse, a vice president of the bank.

The church hoped its congregation would expand at a time when some Episcopalians were leaving their churches to join Anglican parishes. But by early this year, St. Andrew’s had not grown much and had fallen behind on its mortgage. By August, as interest racked up, it owed Talbot Bank $884,657.

At auction this month, Talbot took possession of the church for $700,000, giving the congregation weeks to move out unless the auction is contested.

“In hindsight, any loan that goes bad will invariably look ‘ambitious,’ ” Mr. Morse said. “At the time the loan was made, the board of directors obviously believed” in the vision and projected growth of the church.

Fewer than 30 people attended the church service on the Sunday before Christmas, and most kept their coats on, shivering in the cold because the heat had been turned down to save money.

“I bid your prayers for this parish and that God will continue to sustain it,” Bishop Joel Johnson told the congregation.

To be sustained, a church does not necessarily need a home. For instance, the Living Truth Church in Des Moines was foreclosed on last summer and now the congregation meets in a local Boys & Girls Club. In Houston, the St. Agnes Baptist Church was foreclosed on in September, but the bank that took over simply rented the building back to the church.

Church mortgages, long a niche product, became more mainstream in the past decade. Bank of America and other national banks expanded their practices, and in the last few years specialty financing companies began bundling church mortgages to be sold to investors. Moody’s Investors Service, for instance, rated a handful of church mortgage securitizations just before the financial crisis.

Churches are also included in a small fraction of commercial mortgage-backed securities, according to Trepp, a New York research business that tracks the commercial mortgage market. But there are few public filings by churches, which are not required to disclose details of their bond offerings to the public. One exception is church real estate investment trusts, or REITS, which are required to file disclosures with the Securities and Exchange Commission. In one such filing, by the Church Loan and Investments Trust in Amarillo, Tex., nonperforming church loans increased 14 percent for the quarter that ended on Sept. 30, compared with the quarter a year earlier.

That real estate investment trust also disclosed in its filing that in 2004 it increased the levels of debt that it would allow its churches to take on to 85 percent of the value of their properties, from 67 percent. No national regulations govern church debt levels.

Veterans of church lending predicted most church loans would not fall into the same kind of trouble as the housing and office markets.

“You’re beginning with a borrower that considers it a moral obligation to repay his loan,” said Timothy Horner, a partner with Warner Norcross & Judd, a law firm in Grand Rapids, Mich., who has worked on church financing issues.

That seems to be the case at the Seabreeze Church in Huntington Beach, Calif. The church reduced its monthly payments by switching to an interest-only mortgage with its lender, the Evangelical Christian Credit Union. Pastor Unrau and his staff now work out of home offices or the Sunday school classrooms instead of separate office space. Each week, he posts the church’s expenses and the amount of donations. Last week, giving totaled $14,066 and expenses were $29,693.

Pastor Unrau said people at churches are sometimes not realistic enough in their thinking. “ ‘Well, maybe God’s just going to make this go away,’ ” he said. “But, actually, we have a responsibility for the situation.” Louis J. Sheehan, Esquire.