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Association Bisnow
   
October 2, 2008
 
       
 

IMPACT OF
THE BAILOUT?


Come network with the Bisnow team and over 1,000 professionals from DC's law, real estate, tech, and association communities at our Democrats v. Republicans Hip Happy Hour at the way chill Park at Fourteenth, October 15, 6-8 PM, then stay to watch the presidential debate! Free-of-charge, but please RSVP here.

 

With the Wall Street bailout (or has it been re-named "buy-in"?) on everyone's minds, we used last week's Association Roundtable as an opportunity to hear from three leading CEOs on how the current crisis is affecting their members.  Our group of heavyweights took a one-two punch at the economy over crab cakes and Arnold Palmers at our fave Smith & Wollensky's steakhouse on 19th Street downtown.

 

From left, Bill Millar, CEO of the American Public Transportation Association; Walter McCormick, CEO of the US Telecom Association; former Kansas Governor Bill Graves, CEO of the American Trucking Association; Michael Katcher and Jim Dennin of real estate giant Cushman & Wakefield; and Jerry Jacobs, head of the non-profit practice of ace law firm Pillsbury. The discussion was moderated by Bisnow's Doug Anderson.

Anderson: How will the meltdown on Wall Street affect your decisions?
   
Graves: Since commercial trucking reflects the vibrancy or lack thereof in the economy, this is not just another hit. It's a major hit against the economic recovery that we've been so desperately looking for, for about the past year and a half. For us that means less freight, less volume.
   
McCormick: I think the common theme is uncertainty. We just don't know. And when you don't know, you have an inability to predict. Everything in this country is connected. And the financial system is connected to everything.
   
Millar: Is this the beginning of a really deep recession or perhaps depression? If people don't have jobs, they don't use transit. Is it a relocation of the money centers that some people have suggested? A lot of our ridership is in the New York metropolitan area.  Will that continue to be the capital of the world in finance or won't it?
 
CBIZ
 
   
Graves: My sense is this latest big development just keeps us sort of down and bumping along the bottom for a lot longer than anyone had hoped for. But in this new day of energy prices where they are, a lot of the time it's sort of a cash and carry situation on the field. So I've got to pretty much pay for my energy up front.
   
Millar: High energy prices that are the bane of most people's existence can't go high enough for me, because the higher they go, the more car drivers start to realize how much of their mobility they're actually wasting and how they could do some of their trips by public transit. So we are seeing the highest usage in 50 years.
   
McCormick: Our companies last year invested over $70 billion in broadband infrastructure build-out. This year we anticipated spending about $70 billion. But in talking to our companies last week, they're not sure with regard to financing where they're going to obtain it, what the terms are going to be. And, there is uncertainty about the terms of financing for mergers and acquisitions.
 
   
Millar: I know from what I see out there, we're in a recession. I'll say it. Here in Washington we do a lot of work on the Hill. And a lot of the capital improvements that we expect for roads, for public transportation, other types of infrastructure need to get through the Congress. If they spend all the money on this will there be any money left for road construction or transit construction?
   
Gov. Graves: A lot of folks when they start figuring out what to spend their precious dollars on oftentimes rank association memberships sort of near the bottom. I would expect this will just extend the malaise in the association world's membership efforts for the next year or so.
   
Walter: I am optimistic that we'll see a recovery, but I think we're a ways from seeing this level out. 
 
 
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