From New York to Houston, flood risk for real estate hubs ramps up

By Kate Duguid and Ally Levine

NEW YORK (Reuters) – The number of properties in the United States in danger of flooding this year is 70% higher than government data estimates, research released on Monday shows, with at-risk hot spots in Houston, New York, Los Angeles and Chicago.

The higher risk identified could have implications for property values as well as insurance rates, municipal bonds and mortgage-backed securities, according to investors and researchers at First Street Foundation, which released the data. (http://www.floodfactor.com)

“This could change the calculus on whether a given property is resalable, or what price you sell it at,” said Tom Graff, head of fixed income at Brown Advisory.

The data, which covers the contiguous United States, found that around 14.6 million properties, or 10.3%, are at a substantial risk of flooding this year versus the 8.7 million mapped by the Federal Emergency Management Agency (FEMA).

FEMA maps are currently used to determine rates on government flood insurance and underpin risk assessments done by mortgage lenders, investors and home buyers. The maps, however, only account for coastal flooding – not rain or rivers – and do not incorporate the ways climate change has made storms worse.

A FEMA spokesperson said that First Street’s maps build on those created by the agency and the two are not incompatible.

Los Angeles, Chicago, Houston, New York and Cape Coral, Florida top First Street’s list of cities with the most number of properties at risk. At the state level, Florida, Texas, California, New York and Pennsylvania have the most to lose. Florida and Texas also top FEMA’s list, but with significantly fewer properties estimated to be at risk.

Washington, D.C., has the greatest deviation from FEMA’s numbers, 438.4% more properties at risk, because First Street accounts for potential flooding from the Potomac and Anacostia rivers and a drainage basin under the city. Utah, Wyoming, Montana and Idaho have the next highest deviations, all between three to four times greater than FEMA estimates.

Commercial mortgage-backed securities (CMBS), investments that pool loans for office buildings, hotels, shopping centers and more, are among the securities most exposed to flood risk because of the concentration of cities on the U.S. coasts.

“There is a moral hazard within the investment community of not pricing in the risk of something like this happening,” said Scott Burg, chief investment officer at hedge fund Deer Park Road.

Nearly 20% of all U.S. commercial real estate value is located in Houston, Miami and New York, according to CoStar data, each of which has been hit by hurricanes in the last decade.

Hurricane Harvey, which slammed Houston in 2017 and caused $131 billion damage, affected over 1,300 CMBS loans, 3% of the CMBS market in 2017, according to BlackRock research. Hurricane Irma in 2017 affected 2%.

The BlackRock report concluded that 80% of the commercial property damaged by those two storms was outside of FEMA flood zones, indicating that many of the buildings hit may not have been appropriately insured.

Any floods this year could compound the effects of the coronavirus pandemic, which has sent more than $32 billion of commercial loans into special servicing – negotiations for relief in the event of a default – according to Moody’s.

“For property owners that’s like getting your arm amputated and then your head lopped off,” said Jacob Hagi a professor of finance at the University of North Carolina and a First Street research partner.

(Reporting by Kate Duguid; editing by Megan Davies and Steve Orlofsky)

Retailers already hit by coronavirus board up as U.S. protests rage

By Jessica Resnick-Ault

NEW YORK (Reuters) – Target Corp and Walmart said on Sunday they shuttered stores across the United States as retailers already reeling from closures because of the coronavirus pandemic shut outlets amid protests that included looting in many U.S. cities.

Protests turned violent in places including New York and Chicago following the death in Minneapolis of a black man, George Floyd, seen on video gasping for breath as a white police officer knelt on his neck.

In Los Angeles, protests led to the looting of the Alexander McQueen clothing store on Rodeo Drive, and a Gucci store on the vaunted strip was marked with the graffiti slogan: “Eat the rich,” according to local media reports.

In the nearby Grove Shopping Center, which houses 51 upscale stores, Nordstrom, Ray Ban and Apple were broken into. Nordstrom Inc temporarily closed all its stores on Sunday, it told Reuters in an emailed statement.

“We hope to reopen our doors as soon as possible,” the statement said. “We had impacts at some of them and are in the process of assessing any damage so we can resume serving customers.”

Apple Inc said in an email statement it also had decided to keep a number of its U.S. stores closed on Sunday. The company did not specify how many stores were closed, or if the closures would be extended.

The violence was widespread, and Minnesota-based Target said it was closing or limiting hours at more than 200 stores. It did not specify how long the closures would last.

The company told Reuters it was beginning to board up its Lake Street store in Minneapolis, near where Floyd was killed, for safety and to begin recovery efforts. The company said in a statement that it would plan to reopen the store late this year.

“There is certainly potential for the resulting social unrest to hurt certain businesses like retailers and restaurants, and for it to further dent consumer and business sentiment,” said Robert Phipps, director at Per Stirling. “It is even possible, particularly if the unrest continues and spreads, that it would, all other things being equal, have a significant impact on investor psychology and the markets.”

Walmart closed some stores in Minneapolis and Atlanta after protests Friday, and closed several hundred stores at 5 p.m. on Sunday, a spokesman said. “We’ll look at them each day, and at how each community is impacted and make decisions then,” the spokesman said.

Online retailer Amazon said it was monitoring the situation closely. “In a handful of cities we’ve adjusted routes or scaled back typical delivery operations to ensure the safety of our teams,” the company said in an emailed statement.

U.S. retail sales have posted record declines as the novel coronavirus pandemic kept Americans at home, putting the economy on track for its biggest contraction in the second quarter since the Great Depression in the 1930s.

(Reporting by Jessica Resnick-Ault; Additional reporting by Sinead Carew and Ismail Shakil; Editing by Chizu Nomiyama, Peter Cooney and Diane Craft)

Pentagon eyes Chicago, Michigan, Florida, Louisiana as coronavirus spreads

By Phil Stewart and Idrees Ali

WASHINGTON (Reuters) – The U.S. military is watching coronavirus infection trends in Chicago, Michigan, Florida and Louisiana with concern as it weighs where else it may need to deploy, after boosting aid to New York, California and Washington, a top general said on Friday.

Air Force General John Hyten, vice chairman of the Joint Chiefs of Staff, said the military was doing its own analysis as well as looking at data on infections compiled elsewhere in the government.

“There’s a certain number of places where we have concerns and they’re: Chicago, Michigan, Florida, Louisiana,” Hyten told a group of reporters, when asked where field hospitals could head next.

“Those are the areas that we’re looking at and trying to figure out where to go next.”

Confirmed coronavirus cases in the United States reached 100,040 on Friday, the highest number in the world, a Reuters tally showed.

The Army Corps of Engineers said on Friday it was aiming to provide facilities for 3,000 people with the coronavirus at Chicago’s McCormick Place convention center by April 24 for about $75 million.

Lieutenant General Todd Semonite, the Corps’ commander, said the Corps was looking at potentially converting 114 facilities in the United States into hospitals.

Asked about Hyten’s remarks, Semonite said he continued to be concerned about Michigan, Florida and Louisiana and had spoken with the governor of Louisiana. He said there could be a high demand for medical resources in Florida because of the aging population and added the Corps was developing options for the state.

STRAINS ON MILITARY

The military is already deploying field hospitals to Seattle and New York. A Navy hospital ship arrived on Friday in Los Angeles and another one is expected to reach New York City on Monday, where Hyten said the city was still dredging the harbor to allow the massive ship to dock.

Each ship has a capacity of about 1,000 beds and would not treat coronavirus patients, instead taking pressure off overwhelmed civilian hospitals.

But Hyten cautioned that the U.S. military only had limited medical capacity in the United States and, at some point, it would have to tap the reserve forces — while guarding against drawing medical staff away from civilian facilities.

President Donald Trump on Friday signed an executive order authorizing the Pentagon and Department of Homeland Security to call up reservists.

“We made a decision about five or six years ago that we would downsize our military (health care) capabilities in the United States … to only really focus on our deployed requirements,” Hyten said.

He estimated that the military only had 1,329 adult hospital beds staffed at any one time in the United States.

“We’re digging into the active duty force really heavily,” he said. “So the next thing that we’re going to need is to look into the reserves.”

(Reporting by Phil Stewart and Idrees Ali; Editing by Daniel Wallis)

Actor Jussie Smollett due for arraignment in Chicago on hoax charges

By Brendan O’Brien

CHICAGO (Reuters) – Former “Empire” actor Jussie Smollett was due in court on Monday for arraignment on renewed felony charges that he made false reports to Chicago police about being attacked in a hate crime he is accused of staging in a bid to advance his career.

Smollett was indicted on Feb. 11 on six counts of disorderly conduct, capping a five-month investigation by a court-appointed special prosecutor who overruled a decision by the state’s attorney’s office last year to dismiss the original case. His arraignment is scheduled for 9 a.m. (1400 GMT) in Cook County Circuit Court in Chicago.

The 37-year-old actor, who is black and openly gay, has insisted he told the truth in his account of being accosted on a darkened street in January 2019 by two masked strangers.

According to Smollett, his two assailants threw a noose around his neck and poured chemicals on him while yelling racist and homophobic slurs and expressions of support for President Donald Trump.

Police arrested Smollett a month later, accusing the actor of paying two brothers $3,500 to stage the attack in a hoax aimed at gaining public sympathy and raising his show-business profile.

He was subsequently charged in a 16-count indictment, but the Cook County state’s attorney’s office dropped the charges three weeks later in exchange for Smollett forfeiting his bail without admitting wrongdoing.

The dismissal drew an outcry from then-Mayor Rahm Emanuel and the city’s police superintendent, who branded the reversal a miscarriage of justice, leading a Cook County judge to appoint former U.S. Attorney Dan Webb to review the case.

Webb said he determined that further prosecution of Smollett was warranted, calling into question prosecutors’ judgment in dropping the original case but finding no wrongdoing on their part. Webb said he was continuing his investigation, however, of whether authorities acted improperly in last year’s dismissal.

Smollett’s lawyer, Tina Glandian, has said authorities made the right decision in dropping the charges in the first place, and suggested the special prosecutor’s probe was biased in its use of the same police detectives involved in the original case.

Smollett, who has lost his role as a singer-songwriter in “Empire,” a Fox television hip-hop drama, sued the city of Chicago in November, accusing municipal officials of maliciously prosecuting him.

The city sued Smollett last April seeking to recover the costs incurred in investigating his hate-crime report.

(Reporting by Brendan O’Brien; Writing by Steve Gorman in Culver City, Calif.; Editing by Peter Cooney)

Actor Jussie Smollett charged again related to alleged staging of hate crime

By Brendan O’Brien

CHICAGO (Reuters) – Former “Empire” actor Jussie Smollett was charged on Tuesday in a six-count felony indictment accusing him of staging a phony hate crime in Chicago, nearly a year after similar charges were abruptly dismissed by local prosecutors.

The indictment, capping a five-month special prosecutor’s probe, accuses Smollett, who is black and openly gay, of making four separate false reports to Chicago police related to his account of being the victim of a violent hate crime.

Smollett’s lawyer, Tina Glandian, said the special prosecutor’s use of police detectives who took part in the original investigation of her client raised “serious questions about the integrity” of his renewed prosecution.

The previous charges “were appropriately dismissed the first time because they were not supported by the evidence,” Glandian said. The attempt to prosecute Smollett anew ahead of the Cook County state’s attorney primary election next month “is clearly all about politics, not justice,” she said.

Smollett, 37, has insisted he told the truth when he reported that he was accosted on the street in January 2019 by two masked men who threw a noose around his neck and poured chemicals on him while yelling racist and homophobic slurs and expressions of support for President Donald Trump.

But police arrested Smollett a month later, accusing the actor of paying two brothers $3,500 to stage the attack in an effort to use the notoriety to advance his career.

The dismissal of the original case on March 26, 2019, three weeks after Smollett was first charged in a 16-count indictment, drew an outcry from then-Mayor Rahm Emanuel and the city’s police superintendent, who branded the reversal a miscarriage of justice.

At the time the state’s attorney’s office said its decision to drop the charges as part of an agreement with Smollett to forfeit his $10,000 bond was a just outcome. But Cook County Judge Michael Toomin later appointed former U.S. Attorney Dan Webb as a special prosecutor to review the case.

A Cook County grand jury returned the new indictment after the special prosecutor found “reasonable grounds exist to further prosecute Mr. Smollett,” Webb said in a statement released in conjunction with the indictment.

Webb said he has yet to reach a conclusion as to whether local prosecutors or anyone else involved in the case engaged in wrongdoing, saying that aspect of his inquiry was continuing.

The actor, who played a singer-songwriter on the Fox television hip-hop drama “Empire” before he was dropped from the show, sued the city of Chicago in November, accusing municipal officials of maliciously prosecuting him.

(Reporting by Brendan O’Brien in Chicago; Additional reporting by Karen Pierog in Chicago and Jill Serjeant in Los Angeles; Writing and additional reporting by Steve Gorman in Los Angeles; Editing by Cynthia Osterman and Leslie Adler)

CDC confirms second U.S. case of Wuhan coronavirus

(Reuters) – The Centers for Disease Control and Prevention on Friday confirmed that a second case of Wuhan coronavirus in the United States had been detected in Chicago, and said as many as 63 people were being monitored as the virus spreads around the globe.

The infected person had traveled to Wuhan, China recently. The woman, 60, had not taken public transportation and was not ill when she traveled, Chicago health authorities said on a conference call.

Of the 63 people under investigation from 22 states, 11 tested negative, CDC said in a conference call with reporters.

The newly discovered virus has killed 26 people and infected more than 800, but most of the cases and all of the deaths so far have been in China, where officials have imposed restrictions on travel and public gatherings.

The CDC said it believes the immediate threat to U.S. residents remains low.

The World Health Organization on Thursday declared the virus an “emergency in China”, but stopped short of declaring it a global health emergency.

(Reporting by Saumya Sibi Joseph in Bengaluru and Julie Steenhuysen in Chicago; Editing by Shinjini Ganguli)

Jussie Smollett sues Chicago for malicious prosecution

(Reuters) – The actor Jussie Smollett has sued the city of Chicago and multiple police officers for malicious prosecution, claiming they caused him economic harm, mental anguish and distress.

Smollett made his accusation in a counterclaim made public on Wednesday, in a lawsuit where the city sought to recoup costs for investigating his alleged false claim that he had been the victim of a racist and homophobic beating on a Chicago street.

Chicago had sued Smollett in April, and the lawsuit is pending in Chicago federal court.

(Reporting by Jonathan Stempel in New York; Editing by Steve Orlofsky)

Chicago’s cold blast spells concern for the city’s homeless

Chicago’s cold blast spells concern for the city’s homeless
By Brendan O’Brien

CHICAGO (Reuters) – Homeless advocates in Chicago were closely monitoring wind chill temperatures on Tuesday as an early season blast of arctic air swept across the eastern two-thirds of the United States.

The city of Chicago, where 86,000 homeless people live, opened its six warming shelters over the last few days as unseasonably cold temperatures dipped into the teens with wind chills into the single digits during the morning, according to the National Weather Service (NWS).

“It’s incredibly concerning that we are experiencing this level of cold this early in the season,” said Doug Schenkelberg, director of the Chicago Coalition for the Homeless.

The NWS said the Chicago metro area along with many major cities in the Midwest and East Coast and across the South would experience numerous record lows for a Nov. 12 or 13, with temperatures averaging 20 to 30 degrees below normal.

“It’s significantly earlier than we normally would see a change in the jet stream,” said Ed Shimon, a NWS meteorologist. “We actually have a cold front already blasting down to Florida and off the Gulf Coast … so records are being broken all over the place.”

The bitter cold prompted Cornerstone Community Outreach, on Chicago’s North Side, to place cots in its dining room to accommodate the influx of homeless people a month earlier than it usually does each winter.

“We have seen an uptick of people coming,” said Sandra Ramsey, executive director of Cornerstone Community Outreach. “From the looks of it, it spells out that we will have a long winter.”

Ramsey said she was worried about the homeless people who suffer from mental illness and refuse to go inside, opting to live under viaducts and in alleyways even amid deadly cold.

“It takes time and relationships to get these people … to come in on terribly cold nights,” Ramsey said. “But then they go back out.”

About 16,000 people sleep each night on the Chicago streets and shelters, Schenkelberg said. He added that the key to dealing with homelessness in extreme weather conditions ultimately is finding permanent supportive housing for the homeless.

“It’s never an easy time to be homeless regardless of the weather and when you add extreme weather like this into the mix, it makes life that much more difficult for people experiencing it,” he said.

(Reporting by Brendan O’Brien in Chicago; Editing by Frank McGurty and Tom Brown)

After 11 days, Chicago teachers strike to end as union, mayor reach deal

After 11 days, Chicago teachers strike to end as union, mayor reach deal
By Brendan O’Brien

CHICAGO (Reuters) – Chicago teachers will end their 11-day strike against the third-largest U.S. school system after their union and district officials reached a tentative settlement on Thursday of a labor battle that canceled classes for 300,000 students.

The five-year contract includes funding for more than 400 additional social workers and nurses, spending that the union argued was necessary to allow teachers to focus on curriculum, according to the union.

It was the second-longest in a wave of U.S. teachers’ strikes that played out across West Virginia, Oklahoma, Arizona and California over the past few years, topped only by a three-week June strike in Union City, California.

Like the earlier walk-outs, Chicago teachers had pushed for more money to ease overcrowded classrooms and more support staff, in addition to seeking a wage increase for the district’s 25,000 teachers.

A tentative deal reached late on Wednesday fell apart when the two sides disagreed over how many missed school days for students – and days of pay for teachers – would be tacked onto the end of the school year. The agreement reached on Thursday calls for five, less than the 11 the union had sought, the union said.

It was an early test of first-term Democratic Mayor Lori Lightfoot, who campaigned on improving the city’s schools but said the school district could not afford the sharp increases in spending on counselors and nurses that teachers sought.

“It was important to me that we got our kids back in class. Enough is enough,” Lightfoot said during a news briefing after the deal was reached. “I think it was the right thing for our city and I am glad this phase is over.”

Union members expressed frustration that Lightfoot had been unwilling to extend the school year by 11 days to make up for the lost classes. Pressure for a settlement had ramped up in recent days as teachers braced for their first paychecks reduced by the strike, as well as the prospect of health insurance expiring on Friday.

“This fight is about black children and brown children in the city of Chicago getting the resources in their school community that they have been deprived of for generations,” union Vice President Stacy Davis Gates said during a news conference after the announcement.

The tentative agreement includes enforceable staffing increases of 209 social workers, amounting to one in each school, a case manager in each school and 250 additional nurses, the union said.

The district also committed to spending $35 million to reduce oversized classrooms and prioritizing schools that serve the most vulnerable students.

City officials did not immediately respond to questions about contract details. The union had sought a three-year contract.

Crowds of red T-shirted teachers took to Chicago’s streets during the strike’s two weeks, picketing some of the 500 schools across the city and holding rallies and marches in downtown Chicago.

Democratic presidential contender U.S. Senator Elizabeth Warren on Oct. 22 joined the striking teachers on the picket line, and strikers also joined in protests against Republican President Donald Trump during his visit on Monday to Chicago.

The work stoppage forced officials to cancel classes, but school buildings stayed open for children in need of a place to go during the strike.

The strike angered parents and students, particularly the families of student athletes, as the walkout coincided with state-wide play-offs, which teams have competed for months to attend, and where college talent scouts look for candidates for athletic scholarships.

The strike came seven years after Chicago teachers walked out for seven days over teacher evaluations and hiring practices. In 2016, teachers staged a one-day walkout to protest the lack of a contract and failure to stabilize the school system’s finances.

Chicago resident Jackie Rosa thanked teachers for their “fearless fight” and courage in holding out for a deal.

“You put your bodies on the line to bring TRUE EQUITY to our children,” Rosa said on Twitter. “Chicago owes you everything.”

(Reporting by Brendan O’Brien in Chicago, additional reporting by Andrew Hay in Taos, New Mexico; Editing by Scott Malone, Chizu Nomiyama, Bernadette Baum and Dan Grebler)

‘We are hopeful’: Chicago teachers picket on 10th day of strike

‘We are hopeful’: Chicago teachers picket on 10th day of strike
By Brendan O’Brien

CHICAGO (Reuters) – A teachers’ strike in Chicago moved into the 10th school day on Wednesday, as the teachers’ union and district worked to resolve a contract deadlock over class sizes, support staff levels and pay at the bargaining table.

The strike is the second-longest in a wave of teachers’ strikes that played out across West Virginia, Oklahoma, Arizona and California over the past few years, topped only by a three-week strike in June in Union City, California.

Chicago Teachers Union leadership gave its 825 members of the House of Delegates an update on negotiations behind closed doors on Tuesday evening. It marked the first time since the strike began that the delegates met.

“It’s not too late,” union president Emerita Karen Lewis said in a Tuesday night statement, imploring Mayor Lori Lightfoot to make a deal.

“Our members have resolve and will not relent when it comes to the families they serve,” she warned Lightfoot, for whom the strike represents the first major political test since election in April.

The third-largest school district in the United States has canceled classes for its 300,000 students every school day since the union went on strike on Oct. 17, after contract talks failed to yield agreement.

The union represents 25,000 teachers who have been without a contract since July 1. Since the first day of the work stoppage, teachers have picketed in front of many of the district’s 500 schools and rallied several times in downtown Chicago.

“We are hopeful and we are close, really close to a deal,” said Allison Bates, 43, an elementary school science and social studies teacher who serves as a union delegate.

“We have gotten most of what we asked for but there probably needs to be some compromises from both sides,” said Bates as she huddled with a handful of other picketing teachers under a tent as it rained in front of her North Side school on Wednesday morning.

Chicago teachers had pushed for more money to ease overcrowded classrooms and add nurses, social workers and teaching aides, besides seeking a wage increase.

The union is seeking for a contract that runs three years instead of five and more paid prep-time for elementary school teachers.

Lightfoot said she and Chicago Public Schools Chief Executive Officer Janice Jackson met with union leadership for more than three hours on Tuesday, but both sides did not come to a resolution.

“We made some movement to try to get a deal done and I was deeply disappointed that with that movement … they would not take the deal,” she said during a news conference.

District officials said on Tuesday they had proposed to spend $25 million to reduce overcrowding in the district and a further $70 million to hire support staff, such as nurses and social workers.

Lightfoot has said the district could not afford the union’s full demands, estimating they would cost an extra $2.4 billion each year for an increase of more than 30% in the current school budget of $7.7 billion.

(Reporting by Brendan O’Brien in Chicago, additional reporting by Rich McKay in Atlanta; Editing by Scott Malone)