Summer 2018 Newsletter Print

Chapter President's Report

Our chapter has had a busy start to the year.  We started off the year with a chapter meeting that was offered as a full day continuing education session.  It featured Green Building Construction by Matt Belcher of Veratek Solutions, Green Rooftop Systems by Roxanne Nagel of Roof Top Sedums, the annual Economic Forecast by Scott Colbert of Commerce Bank, New Market Forces Effecting Commercial Retail Real Estate by Chris Zoellner of Balke Brown Transwestern, and Tale of 3 Cities: St Louis, Kirkwood, Ferguson, and the future of American Cities by our own Doug Potts, MAI of Commerce Bank. We had over 70 people in attendance and will be holding another session in the spring of next year.  We followed up with a June general meeting at Spazio Westport that featured a market conditions presentation by 4 brokers on the state of the office, retail, industrial, and multifamily markets, which was also successful. 

Adam Woehler receives his MAI Designation from Vice President Russ Rench

Congratulations to the following individuals who have received Appraisal Institute Designations which were awarded at the upcoming June 14 General Meeting.

Jeffery Johnson, MAI

Adam C. Woehler, MAI

Thomas G. Hofer, AI-RRS

The Nomination committee has completed the slate of officers for 2019 as follows:

President, Russel Rench, MAI

Vice President, Jeff Thornhill

Treasurer, Steven Teague, MAI 

Secretary, Patrick White, MAI

Past President, John Rimar, MAI

1-Year Director, Timothy Schoemehl, MAI

1-Year Director, Michelle Deslodge, MAI

2-Year Director, Donna Howard

2-Year Director, Robert Norris, MAI

3-Year Director, Brad Schopp, MAI

3-Year Director, John Karnes, MAI, SRA

Regional Representative, John Rimar, MAI

Regional Representative, Russell Rench, MAI

Regional Representative, Jeff Thornhill

Alternate Regional Representative, Steve Teague, MAI

Thanks to everyone who continues to support our chapter by attending our events and educational offerings as well as those who serve on the board or a committee. I look forward to seeing you at future meetings and events.

Please let us know if you have any ideas for future chapter meetings or would like to volunteer for any of our committees

John Rimar, MAI

2018 Chapter President

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Education Update

There is currently no upcoming qualifying or continuing education scheduled for 2018, however, we are in the process of 2019 education planning. We will be sending out a survey in the next couple of weeks requesting feedback on preferred offerings to bring to the St. Louis area. All respondants will be put in a drawing for a chance to win a FREE GIFT CARD. Please let us know what classes you would like to see next year as well as any other ideas or relevant discussion topics to consider for our education planning.

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Treasurer's Report

The chapter's finances remain stable with assets just less than $100,000, which is about what it has been for a few years now, most of which is held in three CD's at a local bank. Income for the year has been positive due to education revenue exceeding expenses. The chapter utillized some of the Westover Scholarship Fund for the Spring Bert Westover Symposium, and discussions are ongoing about use of the remaining funds.

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Fall General Meeting

Join us for a meeting with a mastermind of one of the most rapidly growing neighborhoods in St. Louis: Phil Hulse of Greenstreet!

September 13, 2018
11:30 AM - 1:00 PM

Rockwell Brewing
1320 S Vandeventer Ave
St Louis, MO 63110

About Phil:

"Since founding Green Street in 2008, Phil has taken a hands-on approach to lead our team and all of our clients. He remains an active force in leading development and construction management, coordinating lender and investor relations, overseeing property management and selecting assets for acquisition.

For more than 30 years, Phil has been a leading visionary in building up St. Louis’ urban core, and paving the way for business activity and commerce in our area. After starting his career as a broker and working his way up through the real estate field, Phil co-founded two successful real estate firms, Summit Development Corporation and Gateway Commercial.

During his years of experience, Phil has raised more than $75 million in private equity, and has leveraged more than $250 million in private and public financing to support local real estate projects. As he works to leave a lasting legacy in St. Louis, he started Green Street to challenge the way the real estate industry works.

Our business is built to continue Phil’s commitment to sustainable development, building strong businesses and redeveloping underutilized property. He’s proudly built our reputation by transforming locations that have been overlooked or underestimated into thriving centers for business in St. Louis."

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MREAC's fight against Broker Price Opinions

On April 4, 2018, the Missouri Real Estate Appraiser Commission sent a letter to several Missouri State Banks to remind them that it, per their interpretation of Missouri Statute 339.501-546, they are of the opinion it is "illegal to use Broker Price Opinions (BPOs) in Missouri by Lending Institutions" and that the commission intends to "take appropriate action with any party that may violate the statute."

The Missouri Banker's Association and the Missouri Real Estate Commission (brokers) apparently disagreed with the MREAC's interpretation of the law.  In a May 22, 2018 letter, the MBA responded the MREAC, stating "we have not been able to determine the policy or law supporting the issuance of this letter" and further criticizing the "regulatory overreach" of the MREAC and concluding "The MREAC simply lacks jurisdiction to issue an appartent 'supervisory letter' to Missouri banks," citing that banks and brokers are governed by their own regulatory divisions, not by the Appraiser's commission.

A meeting between the MREAC and the public was held on June 26th in Jefferson City.  Attendees included Sam Licklider, the lobbyist for brokers in Missouri, Doug Potts (who represented the interests of bankers), their lawyers, and Robert Voyles, who recorded the meeting for the benefit of the St. Louis chapter.  After a disagreement about the interpretation of the state law, MREAC chair Darryl "Skip" Knopf concluded that "federal laws trump state laws", and stated that a complaint could be made on a federal level.  Asked if the commission intended to issue a cease and desist letter, Mr. Knopf indicated that at the present time they were not actively pursuing legal action, however contended that it was within the commissions ability to do so.  The bankers and brokers representatives were not convinced.

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Government Relations - Headwinds & Tailwinds & Reorganization

Headwinds --

  1. On April 9, the federal agencies published the Final Rule for revisions to FIRREA which increased the Commercial Real Estate threshold from $250M to $500M.  The $250M threshold was established in June 1994, so we essentially had 24 years of the same loan thresholds.  In my opinion, the appraisal profession got lucky with a mere doubling of the threshold, since it could easily have tripled to maintain the same scale of loans today as it did in 1994.  However complacent the appraisal profession may have become, this most recent threshold change has awakened alarm throughout the community.
  2. In mid-May I returned from Washington DC and the once-a-year meeting of the National GRC Committee.  This was an interesting meeting where GRC covered a major new initiative with FNMA reps specifically about the next phase of their Uniform Appraisal Dataset (UAD) and Uniform Collateral Data Portal (UCDP) projects.  Now that the Government Sponsored Entities have collected considerable data from the UAD, they are ready to modify forms and expand the program into other areas that they underwrite – namely the 1-4 multi-family.
  3. Most importantly, there appears to be no question that FNMA is rapidly moving to a “bifurcated appraisal process,” which is also being called a “hybrid” appraisal process.  The bottom line  -- FNMA wants to encourage the use of property inspectors separate from the signatory appraiser(s).  This process will involve FNMA & Freddie and also likely FHA/VA.  VA has already called for the option of using a trainee for site visit instead of the responsible appraiser.
  4. Starting in April, the MREAC sent letters to many financial institutions warning about the use of Broker Price Opinions as evaluations.  Further, the MREAC is planning on a hearing June 26 about the issue.  Both the Missouri Bankers Association and the Missouri Association of Realtors are expected to be part of the meeting.  While appraisers may feel that somebody is “finally fighting for appraisals,” there is considerable debate about whether the MREAC has an real power here, and they may have just drawn a target on this issue.  The National Association of Realtors has used this sort of wedge issue to go and specifically modify state law to explicitly grant brokers the right to do evaluations for financing.  So, my concern is that a few appraisers may have just become a lightning rod over this issue.  More later.

 

Tailwinds --

  1. There is a growing sense that multiple state legislatures will be taking up appraisal reform in the evaluation area.  I personally am working on both Kansas and Missouri legislation issues for 2019.  Illinois recently has significantly eased its opposition to the evaluation proposition, especially since their law has explicitly allowed “evaluations by engagement” for years and years.  Ironically, they won’t allow appraisers to cite their state certification #, but they will allow us to cite our MAI SRA etc. designations.  Go figure.
  2. This evaluation issue continues to gain steam even within the Foundation, who is seriously considering allowing appraisers to operate under a “jurisdictional exception” for small public taking assignments that fall below a state DOT’s appraisal threshold.  There is a push nationally to allow DOTs across the country to cite an “appraisal waiver” for small takings, using anybody for the work.  TAF may have FINALLY SEEN THE LIGHT to recognize that appraisers are being unreasonably restricted from the work by virtue of the added burden of USPAP compliance.  Hence their desire to create a customized carve out.  But this only adds fuel to the fire about the need for broader reform.

 

Reorganization--

  1. Significant discussion last week at the AI Board of Directors meeting, and much of it was in the public meeting which I attended.  There is ongoing interest in seeing a broad reorganization of the entire chapter and regional structure, essentially reducing a 20 member board to only 12 members (+1 international).  The concept would be a sort of staggered terms of 3 years each.  Greater reliance on leadership development would come from sources other than the current regional meeting structure.  I suspect that there may be some communications and updates forthcoming to the chapter leadership, not necessarily giving a “final” structure, but more like an update in the interests of transparcency, and opportunity for feedback.

 

That’s all for now.
Doug Potts

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