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www.bankerandtradesman.com
WEEK OF MONDAY, DECEMBER 18, 2017
services
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A Publication of The Warren Group SEVENTH INNING INVESTMENT CRUMBLING CONCRETE
Deep In The Cycle, CRE Loans Become Riskier Luxury Real Estate And Retail Sectors Pose Concerns BY BRAM BERKOWITZ BANKER & TRADESMAN STAFF
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FOUNDATIONS ARE FAILING With No Recourse For Homeowners
Pyrrhotite-Contaminated Cement Spreads To Western Mass. BY JIM MORRISON | BANKER & TRADESMAN STAFF
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he crumbling concrete foundations that have ruined the lives of hundreds of Connecticut homeowners and presented big problems for real estate agents there have also been found in Massachusetts, and the growing consensus is that there are more here than previously thought. The foundations in Connecticut were first discovered about a decade ago, said Bill Neal of Residential Engineering Services in Vernon, just north of Hartford. When he first encountered a crumbling concrete foundation with cracking that resembled irregular lines on a map, he recognized it as a problem, but didn’t suspect the cause. “I had no clue,” Neal said. “It only became apparent after a lot of inspections and analysis. It came
from concrete from a particular quarry.” Eventually, the state got involved and by 2015 determined that the concrete for the now-disintegrating foundations was supplied by the now-defunct J.J. Mottes Co. “Becker’s Quarry, the main source of concrete aggregate for J.J. Mottes, includes more than trace amounts of pyrrhotite, and is located on a vein of rock that contains significant amounts of pyrrhotite,” according to a statement from the Connecticut Department of Consumer Protection. Pyrrhotite is a mineral that contains iron. Tiny bits of pyrrhotite remain harmlessly embedded in concrete, often for decades. Moisture migrating through the wall causes the pyrrhotite to rust and expand, spalling off ever-larger chunks of concrete foundation until the wall Continued on Page 8
ny investor presentation or balance sheet of a community bank in Massachusetts will likely show some of the strongest credit quality since the financial crisis, or even before. But despite strengthening asset quality, there has been repeated warnings this year – from the Federal Open Markets Committee and Boston Fed President Eric Rosengren – that smaller banks may be taking on significant risks to extend their commercial real estate portfolios. “It’s hard to say in terms of where these banks are taking on the risk. We won’t know until the cycle has turned,” Collyn Gilbert, managing director covering community and regional banks at Keefe, Bruyette & Woods, told Banker & Tradesman. “But the reality is we have been in competitive real estate marketplace for a while; the yield curve is flattening. So, we think it’s probably safe to assume that banks are putting on credits where the risk profile is higher than the return profile.” Continued on Page 10 MIRACLE IN HUDSON
A Homerun On Main Street How One Downtown Beat The Retail Blues BY STEVE ADAMS BANKER & TRADESMAN STAFF
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Points ����������������������������������������������������������������������� 4
Commercial & Industrial ������������������������������������������ 9
In Person ���������������������������������������������������������������� 13
By The Numbers ������������������������������������������������������� 6
Banking & Lending ������������������������������������������������� 10
Classified Sections ������������������������������������������������� 15
owntown Hudson’s fortunes seemed to have bottomed out in 2008, with more than two dozen empty storefronts attesting to its steady decline. Competition from big box stores had rendered the Main Street of this western Middlesex County town an afterthought, and the Great Recession finished off many of the remaining shops. Today the downtown district has just one vacant storefront, after five years of rapid recovery that’s seen an infusion of upscale restaurants, craft drink purveyors and new boutiques. “Some of it’s coincidence and some of it’s luck,” said Jack Hunter, Hudson’s planning and community development director. “It’s a manageable downtown. It’s not too big and
Residential ��������������������������������������������������������������� 8
Focus on Philanthropy �������������������������������������������� 12
Records Section ������������������������������������������������������ B1
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For more information about crumbling concrete foundations, visit the website of consumer advocacy group Connecticut Coalition Against Crumbling Basements at www.ccacb.org.
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