Ear to the Gound: Shaky Paper

Shaky Paper

Who is more anxious in the local business community: developers or bankers?

Nervous conversation at Knoxville lunch tables of late has been about who will and who won’t survive the current housing market/development recession.

There is the major player who built a $10 million golf course only to see the housing market go south just as they were beginning to build the houses on the 200 acres surrounding it—the profit center on such a development.

Developers who have invested in infrastructure in large tracts and are sitting on unsold lots, unable to build, are especially vulnerable. Developers complain the usual development hassle involved in getting MPC approvals, permits, and easements stretch out their timelines—and the credit lines they had approved last spring are in danger of drying up.

Developers with bank credit lines need them to continue in business, but banks are on the hook for loans on stalled projects. At least one major regional bank is under particular pressure, with a large portfolio of business loans.

State Ban?

Knoxville attorney Herb Moncier was banned from federal court after a run-in with U.S. District Judge Ronnie Greer. The local legal community is keeping an eye on the state Board of Professional Responsibility. That’s the agency that regulates attorney behavior in state courts.

The question local attorneys have is whether the state will look at the federal court actions and determine that a ban from federal court warrants a ban from local courts. Such a ruling would effectively stop Moncier’s legal career. But other attorneys say the Board of Professional Responsibility would be extremely reluctant to take away an attorney’s livelihood.

Also paying close attention are Knox County Commissioners, two of whom are in court, the subject of an ouster suit pursued by Moncier. Moncier and his clients allege Commissioners Paul Pinkston and Scott Moore were not truthful during testimony in last year’s Sunshine lawsuit.

Hey, Remember Victor Ashe?

As our own history columnist Jack Neely has pointed out repeatedly, you can find a Knoxville connection to nearly any person, place, thing, or global financial meltdown. Well, maybe he didn’t say anything about that last one, but here it is. Former Knoxville Mayor Victor Ashe, who ran this town for nearly a generation, was also briefly at the helm of the former government-sponsored (and now government-controlled) Federal National Mortgage Association, also known as Fannie Mae. In 2001, Ashe was appointed to the board of directors of the mortgage giant by longtime buddy President George W. Bush. Ashe was the only acting mayor ever on the board. He retained the prestigious position until 2004—just about three years before the subprime house of cards came tumbling down in a really noticeable way—when Bush made him the U.S. ambassador to Poland.

Wigging Out

We called to stop the presses when we heard this one. J’s Mega Mart on Gay Street is getting out of the wig business. It might have seemed impossible, but there it was in the window: “Wig Sale! All Must Go!”

For many years, the most conspicuous business on Knoxville’s most architecturally impressive street was a wig outlet—or, at least, it advertised itself mainly as such. When The Simpsons featured a trip to a Knoxville and Bart was disappointed to discover the Sunsphere reborn as a wig outlet, many locals suspected one or more of the show’s writers must have taken a turn down Gay Street at some time or other. For years, the only commodity J’s ever advertised out front were hair products. But over the last several years, the wig pictures have camouflaged an ever-broadening array of Useful Stuff.

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