Some hotel owners that rode out the coronavirus pandemic are finding the recent travel rebound might not be enough to persuade lenders to extend new credit when their debts mature in the coming months or years.
Leisure travel has rebounded since the second half of last year, but the recovery has been much weaker for facilities with large meeting rooms that rely on business trips and conferences, partly because many meetings are now held remotely. Even as business-focused hotels can attract some vacationers, the numbers aren’t high enough to make up for the slow recovery in business travelers.
Persistently low occupancy rates for business-focused hotels have driven down their property values. As a result, lenders are asking hotel owners to put up more capital before agreeing to refinance their loans—but cash-strapped borrowers saddled with lots of debt might not be able to meet the requirements.
Banks are tightening lending standards because the values of certain hotels and other commercial-real-estate assets have been hurt by changing consumer and business habits post-Covid, said
founder and managing partner of boutique investment-banking and fiduciary-services firm Theatine Partners. No one knows how those assets will be repriced in the future, he said.
“You compound that with higher interest rates, inflation and recessionary fears. You have multiple factors that are impacting lenders’ conservatism…around extending the credit,” Mr. Shinder said.
Hotels were hit hard by the pandemic, but the sector also benefited from government relief money and lenders willing to negotiate easier terms to help them get through the crisis. Now, rising interest rates and slowing economic growth are exposing some hotels that remain in bad shape and potentially pushing them into default.
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Tens of billions of loans backed by hotel properties as collateral are coming due in the next two years. Roughly $30.9 billion, or about 30% of the $101.63 billion securitized hotel loans in the U.S., are set to mature by 2024, according to commercial-real-estate brokerage firm
Newmark Group Inc.
Hotels are often financed by floating-rate loans with three-year terms, while loans for offices or retail centers are typically much longer, sometimes reaching 20 years. That means hotel owners are more exposed to a sudden interest-rate spike and have to refinance debt more frequently. The Federal Reserve has raised rates at the most rapid rate since the early 1980s to combat inflation.
But lenders that had offered loan extensions or forbearances in the early days of the pandemic are less likely to lend to the same borrowers because of economic uncertainties facing those hotels, said
founder and chief executive of hotelAVE, a consulting firm focused on the hospitality industry that has provided services to roughly 1,000 hotels and currently manages more than 70 of them.
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Ms. Russo said one of hotelAVE’s client hotels “got a letter from the bank saying, ‘We just want you to know, nine months out, we are not renewing [your loan]. Don’t come to us.”
As many as 10 hotel owners in the U.S. filed for bankruptcy this January, compared with just two in January 2022, according to New Generation Research Inc., a data provider on corporate bankruptcies. Recent bankruptcies included two large hotels in Manhattan, a
in the Financial District and a Crowne Plaza in Times Square.
Still, a bigger surge in hotel bankruptcy filings is unlikely because of factors including high costs associated with the process, said
a lawyer specializing in hotel bankruptcy at Perkins Coie LLP. “If things go south, many of them will just hand the keys back [to the lenders],” Mr. Neff said.
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senior managing director at commercial mortgage data firm Trepp Inc., said overall recovery in the hotel sector in recent months has been extraordinary, but sizable pockets of weakness linger.
Signs of distress are pronounced in the Midwest. Roughly 40% of delinquent hotel loans in the U.S. are backed by hotels in Midwestern states including Illinois, Indiana, Minnesota and Ohio, according to Newmark.
More hotels in the region are coming up against debt maturities. W Chicago City Center, a roughly 400-room hotel in the city’s main business district, the Loop, has a $75.5 million loan that was scheduled to be paid off this summer, according to credit-rating firm DBRS Morningstar. Its owner,
Park Hotels & Resorts Inc.,
defaulted on the loan amid the pandemic and negotiated with special servicer LNR Partners LLC to pay only interest on the loan until its maturity when the company is expected to pay off the loan in full. Interest-only loans are common in commercial real estate and typically the borrower pays a large lump sum, or balloon payment, at the end of the term. As of September, occupancy rates at the 22-story hotel with 14,000 square feet of meeting space had recovered to only about two-thirds of prepandemic levels.
In downtown Cincinnati, the value of the Hilton Cincinnati Netherland Plaza dropped 18% to $86 million in April 2021 from $105.5 million in 2019, when the loan was issued. This past fall, lenders on the hotel’s $72.4 million loan maturing in October 2024 moved to foreclose on the property.
“Hoteliers are having a refinancing problem now,” said
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chief investment officer of hotelAVE. That is partly because some can’t come up with more capital to fill the financial gap created by lower property values that can only support smaller loans, he said. The skyrocketing cost of hedging has also been an issue, he added.
Since the Fed started raising interest rates in March 2022, the prices of some hedging instruments, which floating-rate loan borrowers use to offset interest-rate volatility, have risen to hundreds of thousands of dollars from roughly $10,000 on a multimillion-dollar loan.
At the same time, selling distressed properties has become more difficult. Hotel acquisitions have “slowed down significantly since midsummer” because of the rising cost of borrowing coupled with concerns about an economic slowdown and uncertainty about hotels’ property values, said
co-head of lodging at Newmark.
“The majority of large private-equity [and] institutional investors are somewhat on the sidelines at the moment, waiting for some signs that it’s time to begin acquiring again,” Mr. Spencer said.
Write to Akiko Matsuda at firstname.lastname@example.org
Terry Pheto’s Bryanston property was expected to sell for more than R4-million but did not get an offer
- Terry Pheto’s house in Bryanston, seized by the Asset Forfeiture Unit, went on auction on Thursday morning.
- But the property worth more than R4-million failed to sell. No bid over the starting bid of R3-million was received.
- The Lottery money used to buy the house was meant to go to an initiation programme.
- The auctioneer will market the property to prospective buyers in the coming weeks.
A luxury home paid for with ill-gotten Lottery money by Tsotsi and The Bold and the Beautiful actress Terry Pheto went unsold when it went under the hammer on Thursday 2 March, despite 28 bidders signing up for the auction.
Auctioneer, Graham Renfrew of Asset Auctions, said they would now approach these bidders to solicit offers on the three-storey home, which was frozen by the Special Tribunal last year. The auctioneers had hoped to sell the house for over R4-million.
A large portion of the money used to build the home came from a National Lotteries Commission (NLC) grant meant to fund an initiation programme.
On Thursday, the SIU released a series of graphics that showed how the Lottery money was spent. The SIU investigations found that the money used for the purchase of the land and construction of the home came from non-profit organisation that received NLC funding meant for the roll-out of a public campaign of culturally sensitive medical intervention projects aimed at achieving traditional circumcision practice.
The 502 square metre property in upmarket Bryanston in Johannesburg has three bedrooms, two bathrooms, a kitchen, an open-plan dining room with a family room, lounge, a large rooftop garden with an entertainment area, a double garage, and a maid’s quarters. It is in a complex that has 24-hour security and is close to the Gautrain bus stop. It is also close to Johannesburg’s green belt. Auctioneers are now in the process of contacting interested bidders.
This followed President Cyril Ramaphosa’s Proclamation R32 of 2020, which authorised the SIU to investigate allegations of corruption and maladministration in the affairs of the National Lotteries Commission (NLC).
The auction follows a preservation order granted by the Gauteng High Court to the Asset Forfeiture Unit (AFU) and the Special Investigating Unit (SIU) on 4 November 2022 to freeze Pheto’s home and several other properties, the SIU said in a statement.
“The SIU investigations have found that the money used for the purchase of the land and construction of the home came from non-profit organisations that received NLC funding meant for the roll-out of a public campaign and culturally sensitive medical intervention projects aimed at achieving traditional circumcision practice.
“After the preservation order was granted, Pheto’s legal representatives contacted the SIU and the AFU indicating that they will not contest the preservation order granted by the High Court,” their statement said.
Renfrew, the auctioneer of the property, said no bids reached the starting bid of R3-million. “We will market the property to the 28 interested people first.” He also told GroundUp that they hope to have an offer within the next two weeks. He also suggested that press coverage of the property might have put potential bidders off.
Kaizer Kganyago, a spokesperson for the SIU, said they would wait to hear back from the AFU before proceeding forward with the matter.
By: Jennifer Oldham for ProPublica (AP Storyshare)
Sheriff’s deputies driving 45 mph couldn’t outpace the flames. Dense smoke, swirling dust and flying plywood obscured the firestorm’s growth and direction, delaying evacuations.
Within minutes, landscaped islands in a Costco parking lot in Superior, Colorado, caught fire as structures became the inferno’s primary fuel. It consumed the Element Hotel, as well as part of a Tesla service center, a Target and the entire Sagamore neighborhood. Across a six-lane freeway, in the town of Louisville, flames rocketed through parks and climbed wooden fences, setting homes ablaze. They spread from one residence to the next in a mere eight minutes, reaching temperatures as high as 1,650 degrees.
On Dec. 30, 2021, more than 35,000 people in Superior and Louisville, as well as unincorporated Boulder County, fled the fire — some so quickly they left barefoot and without their pets. Firefighters abandoned miles of hose in neighborhood driveways to escape.
The Marshall Fire, the most destructive in Colorado history, killed two people and incinerated 1,084 residences and seven businesses within hours. Financial losses are expected to top $2 billion.
The blaze showed that Colorado and much of the West face a fire threat unlike anything they have seen. No longer is the danger limited to homes adjacent to forests. Urban areas are threatened, too.
Yet despite previous warnings of this new threat, ProPublica found Colorado’s response hasn’t kept pace. Legislative efforts to make homes safer by requiring fire-resistant materials in their construction have been repeatedly stymied by developers and municipalities, while taxpayers shoulder the growing cost to put out the fires and rebuild in their aftermath.
Many residents are unaware they are now at risk because federal and state wildfire forecasts and maps also haven’t kept pace with the growing danger to their communities. Indeed, some wildland fire forecasts model urban areas as “non-burnable,” even though the Marshall Fire proved otherwise.
The disaster put an exclamation point on what scientists, planners and federal officials warned for years: Communities outside the traditional wildland-urban interface, or WUI, are now vulnerable as a changing climate, overgrown forests and explosive development across the West fuel ever-unpredictable fire behavior. Fire experts define the WU zzz I, pronounced woo-ee, as areas where plants such as trees, shrubs and grasses are near, or mixed with, homes, power lines, businesses and other human development.
They now agree that instead of a threat confined to the WUI, the entire state, including areas far from forests, may be at risk of a conflagration.
“The Marshall Fire was a horrible, tragic event that served as a wake-up call for the rest of our state,” said state Rep. Lisa Cutter, a Democrat who represents mountain and foothill areas. “I don’t think we realized how much wildfire could impact communities that aren’t deep in the forest — it’s not something any of us are immune to.”
An early warning of the growing danger to suburban communities arrived in 2001. That year, the U.S. Department of Agriculture and other federal agencies identified scores of Colorado municipalities adjacent to public lands as being at high risk of a wildland blaze-turned-urban conflagration. Some of these areas burned in the Marshall Fire.
A decade later, in 2012, another warning came, as an unprecedented weather-driven inferno, the Waldo Canyon Fire, destroyed several Colorado Springs neighborhoods.
Afterward, fire experts urged state lawmakers to adopt a model building code that communities in high-risk areas could enact. Such codes have been scientifically proven to reduce risk for residents and rescuers and to increase the odds structures will withstand a blaze by requiring fire-resistant materials on siding, roofs, decks and fences, along with mesh-covered vents that prevent embers from entering.
But lawmakers bowed to pressure from building and real estate lobbyists as well as municipal officials who demanded local control over private property.
Meanwhile, the number of new homes built in Colorado’s WUI — as defined by researchers several years ago — more than doubled between 1990 and 2020. And nationwide, the WUI is growing by 2 million acres a year. Homes in 70,000 communities worth $1.3 trillion are now within the path of a firestorm, according to a June report from the U.S. Fire Administration that featured photos of the Marshall Fire’s destruction.
Over 40,000 Residential Structures Were Built in the Areas Now Considered Wildland-Urban Interface in Boulder County Between 1990 and 2022. Credit: Data Source: Boulder County Assessor’s Office. Graphic by Lucas Waldron/ProPublica.
In the months that followed the Marshall Fire, there were again calls to consider a statewide building code. A last-minute amendment to a fire mitigation bill in May would have created a board to develop statewide building rules, but it was pulled after builders, real estate agents, municipalities and others opposed it.
It wasn’t the first time the state’s powerful building industry asserted its influence over policy. Whenever a wildfire bill comes to the state legislature, well-heeled lobbyists routinely represent the industry, records kept by the Colorado secretary of state show. The state’s culture of local control and the construction industry’s $25 billion annual contribution to the economy hampered lawmakers’ ability to find middle ground on a minimum statewide building code.
ProPublica’s review of legislation introduced from 2014 to 2022 found only 15 out of 77 wildfire-related bills focused primarily on helping homeowners mitigate their risk from fires. Most of the 15 proposals offered incentives to homeowners and communities through income tax deductions or grants — some of which required municipalities to raise matching funds — to clear vegetation around structures.
None called for mandatory building requirements in wildfire-prone areas, even as 15 of the 20 largest wildfires in state history have occurred since 2012.
The lack of uniform regulations has cost the Centennial State millions in federal grant money: The Federal Emergency Management Agency denied the state grants from the agency’s resilient infrastructure funds, which from fiscal 2020 to 2022 totaled $101 million.
Colorado remains one of only eight states without a minimum construction standard for homes.
Developers have also influenced municipalities’ recent decisions, as homes decimated by the Marshall Fire are rebuilt in Boulder County, and the cities of Superior and Louisville located within it. The debate has reflected difficult tradeoffs between the cost of making homes more fire-resistant — particularly in an era of high inflation and unpredictable supply chains — and residents’ tolerance for risk.
Lawmakers in Louisville, where 550 homes and businesses burned, voted to remove a fire sprinkler requirement for homes, citing cost, despite evidence such systems reduce the risk of dying in a home fire by 80%. The City Council also voted to allow residents to choose whether to follow new energy efficiency requirements estimated to add $5,000 to $100,000 to the cost of a new home.
By contrast, in unincorporated Boulder County, which lost 157 homes to the Marshall Fire, commissioners in June voted to require fire-resistant materials on all new and renovated homes. Before the inferno, the eastern grasslands were exempt. (Mountain residents, who since 1989 have been required to follow mitigation practices, have seen the effectiveness of such codes: Eight out of 10 of their homes survived the Fourmile Canyon Fire in 2010.)
In Superior, which lost 378 structures, the Board of Trustees voted down a proposed citywide WUI building code in May. After residents of the leveled Sagamore neighborhood requested they revisit their decision, trustees reconsidered in July.
The financial pressures facing Superior officials and their constituents were evident as they considered whether to require fire-resistant materials solely for homes destroyed by the Marshall Fire or for the entire city.
“This is all a huge cost we cannot bear,” said Robert Lousberg, a resident who wants to rebuild several homes. “I understood this is a once-in-a-lifetime fire.”
Some neighbors disagreed.
“Sagamore burned down in less than an hour — one of my neighbors ended up in the hospital after trying to escape the fire on foot — that’s the main reason we need these codes, to slow the spread of fire,” Dan Cole said. “We have an opportunity to build a more fire-resistant neighborhood right now, and it would be foolish and short sighted not to take it.”
Builders estimated that costs for tempered-glass windows, fire-resistant siding and other materials could reach $5,500 to $30,000 per home. Procuring the materials and labor to install them could delay rebuilding.
Like residents, town trustees were divided about whether the cost outweighed safety benefits to residents and first responders should there be another conflagration.
“To me, it’s unconscionable to have people rebuilding in an unsafe manner,” said Trustee Laura Skladzinski, who did not seek reelection last month. “I would rather have residents pay $20,000 now. If they cannot afford it, how are they going to be able to afford it when their house burns down?”
Some noted that most residents didn’t have enough insurance to cover the cost of rebuilding their homes.
Trustee Neal Shah said the city should have adopted tougher codes after the 2012 Waldo Canyon Fire in Colorado Springs, which prompted calls for a voluntary statewide building code that communities could institute requiring fire-resistant materials in homes.
“I fundamentally believe in WUI standards,” Shah said, “what I can’t solve is the math.”
The body voted 5-1 to institute the code, then added an opt-out clause for those rebuilding their residences.
A decade before the Marshall Fire, a blaze was burning in the mountains above Colorado Springs on a 101-degree June day. That afternoon a thunderstorm caused a sudden shift in the wind, pushing a wall of burning debris out of the Rocky Mountain foothills into the state’s second-largest city.
Firefighters fled the 750-foot-high fire front — as tall as a 53-floor building — as it chewed through pine, pinyon and juniper dried by a record-hot spring. Sixty-mile-per-hour gusts peeled back the door on a fire truck. Fist-sized embers rained down on the city’s Mountain Shadows community. The fire incinerated 79 homes per hour, or 1.3 per minute, over 5 ½ hours, a report found.
In the aftermath of the Waldo Canyon Fire, which destroyed 347 homes and killed two people, Colorado Springs drew lessons from which residences had survived and capitalized on fresh memories of burned neighborhoods to institute tougher building requirements.
Standing recently in the shade of a still-scorched tree behind her home, Patty Johnson described how her house was relatively unscathed, even as eight of her neighbors lost their residences. She credited ignition-resistant materials, including stucco walls, siding, a composite deck and a concrete tile roof. Drought-resistant landscaping also helped. Her family sold the home in September to move into a smaller place in the city.
After-action reports found neighbors’ work clearing vegetation around homes helped firefighters save 82% of residences in the 28-square-mile burn area.
FEMA estimated that minimal expenditures to protect Colorado Springs neighborhoods had paid off. In Cedar Heights, $300,000 in mitigation had prevented about $77 million in losses.
“The Waldo Canyon Fire was shocking, but it could have been so much worse if the city of Colorado Springs had not spent decades getting ready,” said Molly Mowery, co-founder of the Community Wildfire Planning Center.
Even so, the fire reached 2,000 degrees and moved so fast it incinerated some homes with fire-resistant material and fire-proof safes inside.
Nevertheless, the city followed a 30-year pattern and took its lessons to heart to institute additional building requirements to fortify homes in wildfire-prone areas. Timing was everything, Mowery’s nonprofit concluded in a recently released analysis.
The city had done the same in 2002. With smoke still in the air following the Hayman Fire — which started about 35 miles northwest of the city and destroyed 600 structures — a coalition of fire officials, homeowners’ associations and local builders and roofing contractors devised rules that banned wood roofs on all new homes and repairs greater than 25% of the total roof area.
Similarly, after the Waldo Canyon Fire, as heavy machinery cleared charred neighborhoods, the city updated its code to increase the distance trees had to be from homes and require fire protection systems, ignition-resistant siding and decks, and double-paned windows for all new or reconstructed homes in hillside areas.
Fire officials used spatial technology to hone the city’s definition of the WUI. The tool identified a 32,655-acre area — one of the largest high-risk regions in the United States. The city recruited homeowners to educate neighbors in the threatened area about fire-resistant practices.
Peer pressure worked, said Ashley Whitworth, wildfire mitigation program administrator at the Colorado Springs Fire Department. If a homeowner’s property is flagged red on the city’s online risk assessment map (denoting it needs work), neighbors reach out to learn why they haven’t completed mitigation.
Colorado Springs’ voters overwhelmingly approved the allocation of $20 million in city funds toward incentives to gird wildfire-prone properties.
Days after the vote in November 2021, the Marshall Fire unfolded 90 miles to the north across communities with little history of wildfire mitigation.
Scientists, some of whom lived in Boulder County and were evacuated, proclaimed it a “climate fire.” They cited the extreme weather that preceded it: Abnormally high levels of snow and rain in spring and summer had nurtured abundant 4-foot grasses that baked to a crisp during a historically dry fall. Chinook winds blasted the region for an unusual nine-hour period and propelled the firestorm. And even though there’s growing understanding that fire season is now year-round, no one believed a December blaze could ravage entire cities.
While it began as a wildfire in grassland, once it reached nearby communities it transformed into an urban conflagration — the type of fire that destroyed Chicago in 1871 and San Francisco in 1906 and that until the early 20th century consumed more property than any other type of natural disaster.
“Was this a wildland fire or an urban fire?” Sterling Folden, deputy chief of the Mountain View Fire Protection District, asked during a July legislative committee meeting. “I had five fire trucks in the entire downtown of Superior — I had 20 blocks on fire — I usually have that many for one house on fire.”
Whitworth, of the Colorado Springs Fire Department, said there were more lessons to learn about the threat of wildfire.
“The Marshall Fire was a really big hit for people here because it happened in December and it happened just like that,” Whitworth said. “Everyone said to me, ‘It could happen here,’ and I said, ‘You’re absolutely right.’”
With the 2023 legislative session days away, fire chiefs, county commissioners, scientists and planners are once again calling on Colorado lawmakers to institute statewide rules that mandate fire-resistant materials in high-risk areas.
Cutter, who will be sworn in as a state senator in January, is developing a bill that would require the state to create a WUI code board to write minimum fire-resistant building requirements. It’s patterned in part after the amendment that failed at the Capitol this spring.
Such laws save lives, said Mike Morgan, director of the Colorado Division of Fire Prevention and Control. The 36-year fire service veteran cited studies from the nonprofit Fire Safety Research Institute and the federal National Institute of Standards and Technology showing that building codes work.
“Firefighters take extraordinary risk to protect lives and property,” he added. “If we start building communities and structures out of materials more resistive to fire, we are upping our odds of success — we’ve got to do something different and do it better.”
The insurance industry is also warning that if Colorado lawmakers and communities don’t reinforce homes against wildfire, mounting claims from blazes could put premiums out of reach for many. The industry supports a statewide building code.
“Unlike other disasters, wildfire is one of those risks there is much we can do from a mitigation standpoint to put odds at least in favor of that home surviving,” said Carole Walker, executive director of the Rocky Mountain Insurance Information Association.
“We’ve got to get it done,” she added. “Colorado right now is at … a tipping point with concerns about keeping insurance here and keeping insurance available.”
But such rules won’t be adopted without a compromise among local control advocates, builders and fire officials.
Construction industry representatives who met with Cutter and Morgan recently said builders are wary of one-size-fits-all requirements imposed by the state. Together with the insurance industry and municipal governments, they have met the past few months seeking to influence the bill’s language.
“It’s important to make sure we match codes with risk,” said Ted Leighty, chief executive of the Colorado Association of Home Builders. His members “are not opposed to talking about what a code board might look like — if we were to adopt a model code that local governments could adopt to match their communities’ needs.”
The idea for such a board emerged after the Colorado Fire Commission received a letter from Gov. Jared Polis in July 2021.
The first-term Democrat, who was reelected in November, sent the missive following conflagrations in 2020 that exhibited unimaginable fire behavior: The 193,812-acre East Troublesome Fire traveled 25 miles overnight and incinerated 366 homes; and the 208,913-acre Cameron Peak Fire, which torched 461 structures, burned for four months despite firefighters’ efforts.
Polis wrote that legislators in 2021 had failed to “address a critical piece of the wildfire puzzle in Colorado: land use planning, development and building resiliency in the wildland-urban interface.”
Instead, lawmakers focused on fire response, restoration of burned lands and voluntary mitigation by communities.
In answer to Polis’ missive, a little-known subcommittee, which included state, county and city fire officials, met between August 2021 and April. The 51-member group agreed it’s time to rethink which communities are prone to wildfire, offering a new definition of the WUI: The group concluded “almost the entire state of Colorado falls within the WUI,” according to minutes from a Feb. 10 meeting, “which could make a strong argument for adopting a minimum code.”
Fire officials also countered the long-held belief that communities favor local control over building requirements. They pointed to a 2019 law that established a minimum energy code that local jurisdictions must adopt when they update local building codes. About 86% of the state’s 5 million residents now live in a community that mandates such measures.
“There is minimal evidence that people voluntarily regulate themselves,” committee members concluded, according to minutes of their Feb. 28 meeting.
A report on the Marshall Fire released in October by the Colorado Division of Fire Prevention and Control noted how wooden fences abuting grasslands had accelerated the blaze’s spread, leading flames from the grass directly to homes. Firefighters also described fence pickets flying past at 80 mph and landing to start new fires.
This month, as homes were being rebuilt on Cherrywood Lane in Louisville, in one of the hardest-hit neighborhoods, evidence remained of first responders’ frantic efforts to cut down fences to prevent them from spreading flames to neighboring homes.
New homes are going up across the 9-square-mile burn zone. A recent drive through the area revealed many are being rebuilt with the same kinds of fences. With no building code dictating that the fences be made of fire-resistant materials, homeowners are using flammable materials that have been standard in the past, unaware it will again put them at risk in the next blaze.
Wooden fences such as these touch homes and grasslands in communities up and down the eastern edge of the Rocky Mountains.
Rebuilding without ignition-resistant barriers leaves the homes vulnerable to the next climate-driven wildfire, said Morgan, the state fire chief.
This month, with snow on the ground and temperatures in the 40s, another blaze ignited not far from where the Marshall Fire burned. Thirty-five-mile-per-hour winds spread the flames and forced evacuations before the threat subsided.
“I’ve heard people say the Marshall Fire was just a fluke,” he said. “I would disagree — there are literally thousands of communities along the Front Range of the Rockies from Canada to New Mexico subject to these Chinook winds multiple times a year, and when the conditions are right this can happen.”
ProPublica is a nonprofit newsroom that investigates abuses of power. Sign up for Dispatches, a newsletter that spotlights wrongdoing around the country, to receive our stories in your inbox every week.
PROPERTY MATTERS: City investing additional $2.6M in Savannah Riverwalk along Eastern Wharf luxury housing development | Community | Savannah News, Events, Restaurants, Music
With plenty of potential suspects to consider (harbor deepening, surrounding construction), the cause of Hutchinson Island’s riverwalk collapse in June came down to a familiar foe – with some assistance from an uninvited guest. That is the conclusion of the engineering firm Chatham County hired to design the repairs. Meanwhile, there is apparently nothing technically wrong with the riverwalk along the east end of the Eastern Wharf on the other side of the Savannah River. Still, the city is planning to invest an additional $2.6 million towards reconstructing a portion of it. Both projects are the latest in a series of costly fixes applied to the waterfront walkways over the years. Read all about them in this week’s edition of Savannah Agenda Property Matters.
Stay engaged Savannah, Eric Curl
The city is preparing to fund almost $2.6 million in improvements to a closed section of the Savannah Riverwalk east of downtown in order for luxury housing construction along the mixed-use Eastern Wharf development to proceed.
The proposed project consists of adding support to the eastern end of the public riverwalk’s anchoring system after it was discovered that anchor tiebacks installed in 2010 extend onto the private development, according to city spokesperson Keturah Greene-Luckett. The additional work is needed to prevent the anchors from being severed by foundation construction at Eastern Wharf, and thus destabilize the riverwalk, Greene-Luckett said. The issue was discovered in 2017 and plans for the improvements were previously submitted in 2019, but the city did not have funding for the work at the time, she said.
The closed section of the riverwalk runs along a northeastern portion of Eastern Wharf that is being developed for housing by Patrick Malloy Communities. The Upper East River community will feature homes ranging from the “$600,000s to the $4 millions”, according to the website. The developer did not respond when Savannah Agenda reached out via email and phone for this article.
Collins Engineering was hired to design the improvements, while Parker Marine Contracting is the project’s general contractor, according to the latest building permit application submitted for the project in October. The developer of Eastern Wharf is constructing the repairs and will be reimbursed by the city, Greene-Luckett said.
A costly history
The latest plan is not the first time the riverwalk fronting the Eastern Wharf development has needed costly improvements since it was constructed in the late 2000s. In 2008, the city spent about $1.2 million in additional contract work, bringing the total to about $10 million, to stabilize the bulkhead after the seawall was dislodged by the removal of some unexpected wood pilings.
Less than two years later, another $3.8 million in repairs and improvements were needed after structural problems were discovered along a 448-foot section of the 2,000-foot structure. Those costs were picked up by the insurer of the project’s design and engineering firm, Thomas and Hutton, in exchange for the city and its contractor, TIC, agreeing to not seek any claims as a result of the work suspension and repairs. This was when the tiebacks the city is now planning on replacing were installed.
The city and the city’s third-party consultant reviewed the plans at the time and agreed on the repairs, according to John Giordano, with Thomas and Hutton. There were no failures of the existing tiebacks designed by Thomas and Hutton that were installed in 2010, Giordano said.
The city agrees that Thomas and Hutton is not liable for the additional improvements now being planned. Since the 2010 repairs were completed, the property ownership has changed hands and the development plan has changed, and the city has decided to construct a system that further removes the risk of damaging the anchor tiebacks, Greene-Luckett said.
Across the river
Bad soil struck again.
Essentially, that’s the finding of the engineering firm investigating the collapse of a section of Hutchinson Island’s riverwalk in June.
An excavation of the riverwalk’s failed bulkhead revealed that voids developed behind the sea wall over time, due in large part to Hutchinson’s “notoriously poor soil conditions”, according to an email Thomas and Hutton’s John Giordano sent to the county’s engineering department in late October. While prefacing the correspondence by stating it may be “impossible to pinpoint the exact conditions or series of events that lead to the failure of the bulkhead”, Giordano went on to say that the earthquake that day may have moved material into the voids, inducing a domino effect of soils moving toward the wall and creating an imbalanced load on the wall and supporting anchors.
The increased loading led to the failure of the support anchors, compounding the problems by allowing the wall to move out and create additional room for further soil movement, Giordano said.
Chatham County is now taking steps to repair and rebuild the collapsed riverwalk. On Oct. 21, the county commission approved a $493,500 engineering services contract with Thomas and Hutton to design the rebuild of the sea wall. The increase followed an emergency $100,000 engineering contract and an almost $3 million emergency repair contract with TIC to stabilize the wall after the bulkhead’s failure. A construction contract, and it’s price tag, will go before the commission for consideration after the design is completed.
Hutchinson has experienced previous failures along a different section of the riverwalk. In 2000, a 30-foot portion collapsed about three weeks before the opening of the newly constructed convention center. About five months later, a 10-year-old boy suffered some minor scrapes and bruises after a five-foot section of the riverwalk collapsed and he fell into a waist-high hole.
Bad soil was also blamed for those past collapses.
Thomas and Hutton could not say whether any of the other sections of the Hutchinson riverwalk could fail for the same reason.
“Bulkheads are retaining wall systems and consist of many components which require ongoing maintenance and inspection and since T&H is not involved in any of these activities, we have no way of telling this,” Giordano wrote in an emailed response to inquiries from Savannah Agenda.
To prevent the damaged portion of the riverwalk from collapsing again, the engineering firm reviewed new soil borings and evaluated surrounding conditions before selecting a design for the repairs, Giordano said.
“The current design for the repair includes deep foundations which are driven into the marl soil layer (our area’s version of bedrock)” Giordano said. “These piles will support not only the bulkhead, but also the deadman tie-back system, the pavers, stairs, landscaping and utilities.”
However, Giordano said, the repaired system will also require ongoing maintenance and inspection to ensure it continues to function as designed.
The skull, which has been named Maximus, is one of the most complete of its kind ever found, the auction house said in a press release Tuesday, adding that it represents a “rare and important paleontological discovery.”
The skull, named Maximus, is one of the most complete of its kind ever found, according to Sotheby’s. Credit: Sotheby’s
Describing the fossil as “extremely rare,” the auction house’s global head of science and popular culture, Cassandra Hatton, said in a statement that the sale was an “unprecedented moment.”
Maximus was discovered on private land in the extensively studied Hell Creek Formation in South Dakota. The skull belonged to an adult dinosaur, and all its “tooth-bearing jaw elements” have been preserved along with most of its external bones. The rest of the skeleton was largely destroyed by erosion, as the excavation site had been severely weathered over time, the auction house said.
The preserved skull was found at Hell Creek Formation in Sorth Dakota, though the rest of its skeleton had largely eroded away. Credit: Sotheby’s
“This T. rex fossil is an extraordinary discovery,” said Henry Galiano, a Sotheby’s natural history consultant, in a press statement. “Unearthed in one of the most concentrated areas for T. rex remains, the skull retained much of its original shape and surface characteristics with even the smallest and most delicate bones intact, with an extremely high degree of scientific integrity.
“Without the work of experienced field palaeontologists who carefully collected and preserved this skull, it may have eroded away and been lost to science forever,” he added.
Fossil auction controversy
In 1997, a T. rex nicknamed Sue became the first dinosaur ever to sell auction, said Sotheby’s. Credit: Martin Baumgaertner/Field Museum
The 1997 sale was met with controversy, however, with some experts concerned that specimens in private collections would become unavailable for scientific study. Paleontologists have also argued that the growth of the collectors’ market makes it harder for them to carry out excavation work on private land.
“In my own opinion, there are only cons,” P. David Polly, a professor and chair of the department of earth and atmospheric sciences at Indiana University Bloomington, told CNN at the time of the Gorgosaurus sale. “While certainly there is no law in the US that supports this for fossils that come off private land, it’s easy for me as a scientist to argue that that fossil is important to all of us, and really ought to be going into a public repository where it can be studied — where the public at large can learn from it and enjoy it.”
Wisconsin’s first commercial facility to convert dairy farm waste into renewable biofuel for vehicles broke ground earlier this month.
That’s thanks to a partnership between the University of Wisconsin-Oshkosh and the California-based Agra Energy.
The $20 million facility is located at the Dairyland Farm in New Franken. It will use new technology to convert manure into an estimated 750,000 gallons of renewable diesel and jet fuel each year. The company hopes to have the biofuel facility up and running by January.
Agra Energy President and Chief Technology Officer Tony Long said the biofuel produced by the new facility will be cleaner than typical diesel or jet fuel.
“Every gallon we make is a gallon you don’t drill for, so that’s a good thing,” Long said. “That means that we’re using what I like to call recently sequestered carbon, versus anciently sequestered carbon. The carbon balance in the air is really upset when we use anciently sequestered carbon.”
Agra Energy’s focus on renewable energy is aimed at finding alternatives to power vehicles that are “pretty tough to electrify” such as heavy transit and aircraft, Long said.
“We’ve put a lot of our focus on those fuels because we feel like those are fuels that are needed to keep the quality of life that humanity has come to know,” he said.
Wisconsin is the ideal place for a facility to turn dairy manure into energy because it has an abundance of dairy farms, according to UW-Oshkosh Biogas Systems and Research Development Director Brian Langolf.
The process of converting manure to fuel begins with putting the waste through an anaerobic digester. The biodigester treats the manure, removes pathogens, reduces odor and transforms the nutrients in the manure, he said.
One of the byproducts of that process is high-energy biogas. Agra Energy’s system puts that biogas through a new micro gas-to-liquid conversion system, which converts the gas to liquid fuel, Langolf said.
“You could do this same technology with food waste, and, quite frankly, human waste,” Langolf said. “Agra might put plants at other facilities down the road, but they’re targeting dairy farms right now because we have a lot of dairy in our state and in the Midwest.”
Beyond focusing on diesel and jet fuel, Long said Agra Energy is working with the National Renewable Energy Lab to develop high-octane renewable gasoline.
“This gives us energy independence and sources of renewable energy that work with our existing infrastructure,” Long said.
Additional research is still needed before the company begins working on biofuel gasoline, he said.
The new commercial facility for diesel and jet fuel builds on the relationship the company and university have been developing since 2017.
UW-Oshkosh has had a biogas program since 2010 and developed a biodigester certification training, Langolf said.
In 2017, Agra Energy attended one of the university’s certification training sessions, Langolf said. Two years later, the company and college partnered to create a small facility at the Allen Farm in northwest Winnebago County.
“We were making fuel by 2020 at that site, and doing research and development that ultimately propelled them to their first commercial site,” he said.
Throughout the process, Agra Energy helped fund biogas research at UW-Oshkosh and began working with students as it developed its system, Long said.
Three of those students have already been hired for the New Franken site and the company hopes to hire a fourth upon graduation.
“We hope to continue to have a stream of graduates from UWO that come to work for us at various sites,” Long said. “It was the perfect university for us. You have many students coming from rural areas, and we’re looking to do our work in rural areas.”
UW-Oshkosh Chancellor Andrew Leavitt said the partnership is in line with the university’s larger sustainability goals, which includes becoming carbon-neutral by 2030.
“This fits right in with the ethos of the institution and certainly our mission, in that we want to be at the cutting edge of helping produce technologies, which will move us away from the traditional fossil fuels,” Leavitt said.
One of this year’s most surprising tech deals was the acquisition of the movie-rental kiosk chain Redbox by
Chicken Soup for the Soul Entertainment
Don’t let the name fool you: Chicken Soup for the Soul is a video-streaming company that just happens to have grown out of the popular book series.
Today, Chicken Soup owns Crackle and other ad-supported video-streaming services. The Redbox deal gives the business some real scale, and it has turned the company into a bargain-bin small-cap bet on the future of video—one that the market is largely ignoring.
Chicken Soup’s roots go back to the well-known series of inspirational self-help books created by the writers Jack Canfield and Mark Victor Hansen. Since the original book was published in 1993, there have been more than 250 follow-ups (Chicken Soup for the Golfer’s Soul, Chicken Soup for the Preteen Soul, etc.), which together have reportedly sold more than 500 million copies. By 2007, Canfield and Hansen had begun to search for a buyer for their company, which included not only the Chicken Soup books but also a line of pet foods sold under the Chicken Soup brand.
They eventually found William Rouhana, who some investors might remember as the CEO of broadband provider Winstar Communications, which went bankrupt in 2001 as the internet bubble was popping.
Rouhana separated the books and pet-food business from the video segment and took the video-focused Chicken Soup for the Soul Entertainment (ticker: CSSE) public in 2017.
Prior to the Redbox deal, Chicken Soup owned a handful of other streaming assets, including Crackle (which it bought from
in 2019), a service under the Chicken Soup name, and a small ad-supported movie site called PopcornFlix.
Chicken Soup ultimately paid about $70 million in stock for Redbox and assumed $350 million in debt. The deal included an agreement to push out the due date on the Redbox debt, giving Rouhana time to clean up the company’s finances.
As the deal was pending, some Redbox holders bet that another bidder would emerge, at one point driving the price of Redbox shares to many times the value of the deal price. But Redbox never got any other options. The company was out of cash and likely headed for bankruptcy, a victim of a dramatic slowdown in film production during the pandemic. Rouhana says Redbox customers were still going to the kiosks but weren’t finding many new movies to rent.
With the transaction, Chicken Soup adds a network of 36,000 kiosks and expands its head count to about 1,500 from 200. The deal also revamps the company’s financial profile. In an interview at the modest Chicken Soup headquarters, above a CVS in Cos Cob, Conn., 35 miles north of Midtown Manhattan, Rouhana says the combined company should have earnings before interest, taxes, depreciation, and amortization, or Ebitda, of between $100 million and $150 million in 2023. Revenue should be at least $500 million, he says, about twice the Wall Street consensus forecast for 2022.
If Rouhana’s forecast is accurate, Chicken Soup’s stock—down about 50% since the deal closed—looks ultracheap. The company has a market value of just $164 million, and an enterprise value of a little over $500 million. “The market is just not accepting that there is a turnaround inherent in the situation,” Rouhana says.
Rouhana says Redbox revenue is historically tied to the number of new DVD releases available in its kiosks. In the fourth quarter, the number of new release rentals should jump to 35, from 13 in the current quarter, he says. In the long run, Rouhana expects the kiosk business to be a cash cow that generates capital for the company to invest in its core streaming business.
As my colleague Jack Hough noted in Barron’s cover story last week, the decision by
(DIS) to launch ad-supported streaming tiers has cast a new spotlight on the potential for advertising in the streaming world, a category known as advertising-supported video on demand. Rouhana says the development “provides validation for the AVOD model” and should convince more advertisers that they “need to be there.” At least a dozen smaller ad-supported services like Philo and Crunchyroll have hired Chicken Soup to sell advertising on their behalf, Rouhana says.
The CEO notes that Chicken Soup is the only pure play among the five largest ad-supported streaming services, a group that includes FreeVee, owned by
(AMZN); Tubi, acquired by
(FOX) for $440 million in 2020; Pluto, acquired by Viacom, now
(PARA), for $340 million in 2019; and the Roku Channel, owned and operated by streaming-platform company
(ROKU). Rouhana thinks there is consolidation coming, and says that Chicken Soup expects to be a buyer. Rouhana isn’t talking about being on the other side of the deals, but it’s also conceivable that Chicken Soup itself could one day become a target.
In the long run, Rouhana says the ad-supported streaming model should eclipse the subscription business that has come to dominate the market. What Chicken Soup and others need to do, he says, is provide quality content, make it easy to find, and offer advertising that is both relevant and interesting to consumers. “That’s all doable,” he says. “Every piece of that is under way inside our company right now.”
If Rouhana’s vision plays out, his book could be called Chicken Soup for the Bullish Soul.
Write to Eric J. Savitz at email@example.com
By Amanda Horvath and Alexis Kikoen, Rocky Mountain PBS (via AP Storyshare)
DENVER — “I mean we’ve probably submitted 50 to 60 applications, somewhere in there and that’s like, that’s ballpark,” said Chris Byard, a Colorado resident of 12 years. He and his girlfriend, Steph Slaughter, decided to find a place together this summer. Slaughter was reaching the end of her lease in August, so the couple decided to get more serious about their home search at the beginning of the summer.
“I’ve moved, what? Maybe two to three times in the past five to six years, and it usually takes me about a month,” said Byard. “Whenever I found a place that I did like and submit an application, I got it.”
That was not the case this time around.
“It’s the most stressful thing I’ve gone through in the past six months,” Byard said.
He and Slaughter spent about two or three months — including any spare moment they had — concerned with finding a place to rent. With a $2,600 to $2,800 budget, they were looking for a two bedroom, one bath house with a backyard since they both have dogs. Byard has steady income and Slaughter is a nursing student who has saved up as much money as possible for living expenses. Their issues didn’t start with their initial searches.
“There’s actually quite a bit out there. It’s just a matter of actually getting it,” Slaughter said.
When you ask the couple about the stories they’ve accumulated over this journey, they look at each other and laugh.
“So the emotions, I guess, rollercoaster,” said Byard with a laugh.
One of their more infamous stories was at a property in the Lower Highlands neighborhood, in Denver’s Northside. The first shocking part to them was when Byard said they saw the property originally listed online for $2,600 and within the time for a short debate; it was taken down. The next day he said it was listed again for $100 more per month.
Still, it was within their budget so Byard and Slaughter applied again and viewed the property in the quickest way possible — virtually. They liked the property and submitted an application. Within a few days, the landlord responded saying they were among the top candidates and asked for them to provide their best offer including “rent, term, etc.”
“I think we both started laughing because it just seemed so outrageous to hear something like that,” said Byard.
They realized they were essentially in a bidding war for a rental, something they’ve heard about in New York but never here in Denver. They didn’t want to get involved in that for just a rental property, as opposed to now-common bidding wars for owning homes in the area.
“And I just explained, ‘As renters we have nothing to gain by offering you more money for what you listed as.’ And I was like, ‘But what we can offer you is the peace of mind of responsible tenants ‘cause that’s priceless.’ And needless to say we did … not move forward with that.
“I think it sets a bad standard as a renter to go in there,” said Slaughter. “It makes you feel from the get-go that you don’t really have as many rights as a renter that you would normally have. And I think it just sets a bad precedent.”
For Slaughter, the more frustrating part of their 2022 summer search was never really knowing why they weren’t picked for a rental property. She compares it to what it can be like to date these days.
“It seemed like you both really liked each other, and then they just ghost you or, like, they finally get back to you and they say, ‘Oh, we went with someone else.’ And you’re like, ‘But why? What was wrong with us?’” she explained.
That is exactly why one of the most anxiety-inducing application and denial moments for her was when she decided not to let a rental agency ghost her. Slaughter said they were one of the first ones to view and apply when this property became available. Then they didn’t hear back for three or four days and finally received an email saying the property went with a stronger candidate.
“And so I got the guy on the phone and basically started crying at that point, which I’m not proud of, but it just happened,” she told Rocky Mountain PBS with a laugh.
“And I was asking why. And he said, ‘Because we didn’t have three months times the monthly rent in pay stubs that they went with a stronger applicant. Even though I have savings, I’m in nursing school, a second degree student, very responsible in my 30s … great credit scores, all the things. And because we didn’t have those pay stubs, they went with someone who had more money.”
At the same time, Slaughter and Byard battled against other renters, Slaughter’s lease ended and she was forced to pay month-to-month, increasing her rent by about $700. Slaughter thinks the price increase with a month-to-month lease is another unfair practice in the rental market.
“It’s fairly tight,” said Ron Throupe, speaking about the current Denver-area rental market. As an associate professor at University of Denver, he contributes to a quarterly report about the current rental market.
The second quarter’s report published at the beginning of the month shows rents are continuing to increase to an average of $1,859.51. That is an increase of nearly $94 from just the previous quarter.
“That’s a big increase, but seasonally, that’s not unexpected to have,” said Throupe. “We tend to have our rent increases and then we sort of fade out in the fall/winter, and then we recycle again the following year.”
The report also showed the vacancy rate — the percentage of all available units in the city — is currently about 4.7%, a slight increase from the first quarter and a one percentage point increase from 2021. Still, that number is lower than the national vacancy rate of 5.6%, according to the latest report from the U.S. Census Bureau.
Part of why Denver is experiencing a “tight” rental market, according to Throupe, is the continuing popularity of the city.
“Denver has become a … let’s call it a ‘found city’ in the last five years and is very attracted to move here for people,” said Throupe. “I tell people Denver’s no longer the cow town.”
Another element to consider is the recent increases to mortgage rates, which are predicted to continue to rise. As mortgage rates go up (and, therefore, monthly prices), those who were close to being able to buy a home may decide to stay in a rental for a while longer, therefore keeping the market tight.
The rental report also showed that in the second quarter, just more than 4,000 apartment units were added to the city’s inventory. Overall, Throupe didn’t express concern over the rental market in Denver and again pointed to the reality of the growing city.
“Do I worry about prices going up too fast? Well, you put it in perspective: those who have been here a long time think it’s incredible, right? But for those that have been other places, especially the coasts, they don’t think so,” explained Throupe.
“To me [it] almost seems illegal, like it just seems discriminatory,” Slaughter said with exhaustion after she heard they weren’t picked for a rental because of lack of pay stubs.
Colorado, like the entire country, has fair housing laws that have been updated and revised since they were first instituted decades ago. Colorado was the first in the nation to pass anti-discrimination laws governing private property in 1959, before the signing of the federal Fair Housing Act in 1968.
Despite being the first to pass such laws, housing in Denver was restricted as realtors and bankers worked together to segregate Black homeowners in the Five Points and Capitol Hill neighborhoods. In the meantime, white homeowners used their privilege of mobility to create distance.
Colorado’s current fair housing laws do not allow for discrimination against protected classes with now include race, creed, color, religion, sexual orientation, marital status, national original, source of income and others. The laws also define a number of unfair practices like refusal to rent or sell or applying unequal terms.
[Related: Denver Tenant Rights & Resources]
If someone does feel unfairly treated or believes something illegal has occurred, they can file a complaint with the Department of Regulatory Agencies (DORA) Colorado Civil Rights Division (CCRD). However, the burden mostly rests on the individual to file a complaint. The Denver Metro Fair Housing Center is a nonprofit focused on eliminating housing discrimination by educating Denver-area residents and conducting investigations.
Still, rental agencies and private owners have a lot of leeway to increase prices fairly when the market is as it is.
“Every lease is a negotiation,” said Throupe. “They can negotiate any number they want … if they sense the market is tight or they only have one unit left and they’re in a prime area — yeah, they’re gonna move the rent.”
After experiencing the most stressful search for a place to rent in Denver Steph Slaughter and Chris Byard had ever gone through, they took to social media.
Byard helps cohost a local podcast, Stoned Appetit, and shared his bidding war woes with their Instagram followers. Hundreds of people empathized with Byard and Slaughter and dozens responded with similar stories or comments on the rental market. The posting also finally ended Slaughter and Byard’s search for a place.
“It’s through a friend who actually saw the posting about it on Instagram, and she has a rental property that they bought like 10 years ago here in Denver. And now they’ve moved out to the suburbs, and it just happened to be available,” said Slaughter. “It was really the luck of the draw.”
Now set on their place within their price range, the couple plans to move into the property soon and still feel sorry for the many others out there still trying to find a place, especially those who may have other barriers to face.
“I can’t imagine people that have gone into debt with the pandemic and now try to rent because they can no longer afford the apartment they’re in then their credit scores lower,” said Slaughter. “I can only imagine those hurdles.”
For Byard, he is most worried about continuing gentrification and the pricing out of people from the neighborhoods they’ve come to settle in and truly make a home.
[Related: Mapping Displacement and Gentrification in Denver]
“I don’t think people should have to make that big of a sacrifice that they’ve lived here for so long, and now they’re just saying, like, ‘Oh my gosh, I really can’t afford this,’” said Byard. “That displaces you from the community you’ve been involved with.”
For this couple, their advice for people in search of a rental is ultimately to turn to their community.
“Talk to your network. Like, talk to your friends, talk to your workers at work,” Byard said. “Somebody knows somebody.”
In 2020, an attorney contacted the FBI Art Crime Team on behalf of an anonymous client who was in possession of an enormous “mosaic of the mythological figure Medusa,” the FBI said.
The mosaic had been cut into 16 pieces, each weighing between 75 to 200 pounds, and had been individually stored in pallets kept inside a Los Angeles storage unit since the 1980s, according to the FBI.
“The client had no documentation — known in the art world as provenance — so they could not sell the pieces,” the FBI wrote. “Selling art without provenance is the equivalent of trying to sell a car when you don’t have its title.”
It is unclear how the anonymous client came into possession of the artwork, or how long it had been in the US, although the FBI says, “it may have been lost for as long as 100 years.”
Two special agents — Elizabeth Rivas and Allen Grove — worked to discover the origin of the mosaic so that it could be returned to its rightful owners.
Italian police force confirmed the mosaic was Italian and had “been entered into cultural property records in 1909,” the FBI said. “The only modern record of the mosaic’s existence was a 1959 newspaper ad that appeared to show it for sale in the Los Angeles area.”
“The mosaic was handcrafted from an age where people put an amazing amount of care and effort into it. It really speaks to the ingenuity and creativity of the time,” Grove said. “It’s not meant to be in Los Angeles. The mosaic belongs to the people of Rome. It allows us to understand a bit about the history of humans 2,000 years ago.”
Officials from Italy traveled to Los Angeles to inspect the mosaic and help plan the best way to get it back to Rome.
To ensure the artifact arrived in Italy without damage, the anonymous client covered the costs of the specialized shipping crates that were then sent through diplomatic channels. The artwork arrived safely in April, the FBI confirmed.
Art experts in Italy are currently in the process of cleaning and restoring the mosaic. While some of the storing pallets had been infested with termites, the artwork pieces were “largely intact thanks to the climate-controlled facility they’d been kept in,” the FBI said.
There is an ongoing effort in the US to repatriate cultural artifacts being sold, often illegally, to private collectors or museums.
In 2021, the Met returned three African art objects, including a pair of 16th-century Benin brass plaques, to Nigeria. The move came after European museums started facing mounting pressure to return the irreplaceable artifacts plundered during colonial times.