First the banking industry, then the automotive industry and now the commercial industry is asking for a piece of the federal bailout.
With a record amount of commercial real-estate debt coming due in the first quarter, some of the nation's largest property developers are asking for federal assistance, according to a report in The Wall Street Journal today.
A recent report by Deutsche Bank warns policymakers that thousands of office complexes, hotels, shopping centers and other commercial buildings are headed into defaults, foreclosures and bankruptcies.
With roughly $400 billion in loans coming due next year and virtually no credit available for borrowers to refinance, The Real Estate Roundtable is warning policymakers about the possibility of a wave of commercial real estate loan defaults in the coming year and years.
According to research firm Foresight Analytics LCC, $530 billion of commercial mortgages will be coming due for refinancing in the next three years, with about $160 billion maturing in the next year.
Credit, meanwhile, is practically nonexistent and cash flows from commercial property are slowing down.
Unlike home loans, which borrowers repay after a set period of time, commercial mortgages usually are underwritten for five, seven or 10 years, with large payments due at the end, the Journal reported.
A dozen large real estate trade groups have sent a letter to Treasury Secretary Henry Paulson, asking to be included in a new $200 billion loan program that was initially created by the government to salvage the market for car loans, student loans and credit-card debt.
The new facility for commercial real estate debt being proposed by The Real Estate Roundtable and others could be seeded by funds from the federal Troubled Assets Relief Program (TARP) established under the recently enacted Emergency Economic Stabilization Act (EESA), with additional leverage from the Federal Reserve, similar to the structure of the Term Asset-Backed Securities Loan Facility (TALF).
Roundtable board member William Rudin of Rudin Management Company noted in today's issue of Commercial Mortgage Alert, "People are aware, but everybody is waiting for the new (Obama) administration to come in … We would argue that it's better not to wait, but to get this on the table now."

Metropolitan Milwaukee Association of Commerce president Tim Sheehy and a member of the MMAC legal team leading the challenge to Milwaukee's mandated sick leave ordinance will describe the next steps in the process and the grounds upon which they are fighting the ordinance in a press conference today.
The press conference will take place at 3:00 p.m. in the MMAC offices at 756 N. Milwaukee St,
"We have never before heard from so many businesses on a single issue," Sheehy said. "The negative ramifications of this mandate are so extreme for our member companies and our regional economy that we are convinced it is a fight we cannot afford to sit out."

Manpower Inc. today announced it will close offices and eliminate job as it adjusts to weaker global hiring trends and changes in foreign currencies.
The Milwaukee-based staffing company is withdrawing its revenue and earnings guidance for the fourth quarter of 2008.
Jeffrey Joerres, Manpower chairman and chief executive officer, said, "We continue to see further weakening in demand for our services in most of our markets due to the deteriorating economic environment. We anticipate that demand for our services will be especially weak in December as we are hearing that many of our light industrial clients are taking prolonged plant shut downs around the holidays compared to last year."
The company estimated a fourth quarter revenue decline of 9 to 11 percent.
The company plans to take a restructuring charge in the fourth quarter related to employee severance and office closure costs.
In a conference call with analysts and journalists this morning, Joerres said more details about the closures will be announced in the company's next quarterly report in February. He said the cuts will take place "pretty much across the board," but the bulk could take place in Europe.
"We're looking at office closings that have not been performing well … Those are the ones we're looking at closing," Joerres said.
Joerres added that the company's liquidity and financial strength remains strong.
"As of the end of November the company had cash of $675 million and total debt of $857 million, bringing our net debt position to $182 million, an improvement of $158 million so far this quarter. This gives us greater flexibility and more resilience during these challenging economic times," Joerres said.

With just days left in the holiday buying season, KB Toys Inc., the nation's largest mall-based specialty toy retailer, announced today it will close all of its 461 stores.
A Delaware bankruptcy court has approved plans for the 86-year-old company to begin a nationwide going-out-of-business sale.
KB Toys has lowered prices on its entire stock. Savings start at 40 percent off regular prices. All KB Toys, KB Toy Outlet, KB Toy Works and KB Toys Holiday Stores nationwide are participating in the sale.
"While we are deeply saddened by the impending closing of our stores, we would like to thank our loyal customers by offering last-minute holiday savings on everything in the store," said Andy Bailen, chief executive officer of Pittsfield, Mass.-based KB Toys. "Customers can choose from hot holiday toys, traditional favorites, video games, closeouts and Super Value Toys."
The company attributed its demise to the downturn in consumer spending compounded by a tightening of credit sources.
KB Toys has two Wisconsin stores - one at Southridge Mall in Greendale and a KB Toy Outlet in The Outlet Shops in Oshkosh. Six other Wisconsin stores closed in 2004.
The Southridge location plans to lay off approximately 10 employees.
KB Toys is the latest to join a heap of distressed national retailers. Circuit City Stores Inc. filed for bankruptcy after announcing it is closing 155 stores across the nation. Previously, bankrupt Linens 'n Things Inc. announced plans to go out of business.
Best Buy Co. lowered its guidance for 2009. Brian Dunn, president and chief operating officer of Best Buy, said, "In 42 years of retailing, we've never seen such difficult times for the consumer. People are making dramatic changes in how much they spend, and we're not immune from those forces."
The cascade of vacant stores also is having a negative impact on the owners of shopping malls.

Waukesha-based Diversified Insurance Services will acquire The Carey Company of Menomonee Falls, effective Jan. 1.
Robert Blakesley, president of The Carey Company, said he merged his benefits business with Diversified, "Because of their reputation as being a leader in business insurance … It is in the best long-term interest for my clients to have the excellent technical and staff resources they offer now and for many years to come. Together we can provide The Carey Company's client with the full range of business insurance services Diversified has to offer,"
"Blakesley has over 34 years of experience in the insurance business and now will join the staff of Diversified," said James McCormack, chairman and CEO of Diversified. "We're glad to have Bob as part of the Diversified family."

Greendale-based P.M. Bedroom Gallery, one of the nation's largest sellers of 100-percent American-made bedroom furniture, has expanded its Chicago area presence with a new showroom in suburban Downers Grove.
The company has opened a 20,600-square-foot showroom at 1207 Butterfield Road in Downers Grove.
"As we celebrate our 15th anniversary and a record revenue year, we're proud that we have the customer loyalty to support our expansion in Chicago, which is a key market for us," said P.M. Gallery president and co-founder Arvid Huth. "Despite the ailing economy, consumers recognize the value in our heirloom-quality custom wood furniture, which is made by Midwest-based artisans and comes with a lifetime warranty."
The company will close its Lombard showroom at 330 W. Roosevelt Road in early 2009. In the meantime, the Lombard location is discounting floor samples up to 30 percent. The Lombard employees will eventually transfer to the new Downers Grove location, Huth said.
P.M. Bedroom Gallery also operates Chicago area showrooms in Naperville and Hoffman Estates, plus five locations in the Milwaukee and Twin Cities areas.

Milwaukee-based Standard Electric Supply Co. has opened a new plant in Sheboygan at 3417 Weeden Creek Road.
The electrical distributor has served customers in the Sheboygan market for many years, but recently completed construction on a 15,000-square-foot building to better serve the region. The new facility includes a state-of-the-art enclosure modification center and will provide greater inventory and more enclosure modification options to customers.
Standard Electric Supply is celebrating its 90th year in business. The company is based at 222 N. Emmber Lane in Milwaukee.

Joy Global Inc., a Milwaukee-based mining equipment manufacturer, announced today that its wholly-owned China Mining Machinery subsidiary has completed the acquisition of 100 percent of the outstanding shares of Wuxi Shengda, a Chinese manufacturer of longwall shearing machines.
The $22 million acquisition provides Joy Global with a foothold in the China market for domestic equipment to better serve that country's local and regional mining industry.

About 2,000 workers will lose their jobs this week as General Motors Corp., Lear Corp., LSI and other auto suppliers shut down or cut back operations in Janesville. Read more in BizTimes Milwaukee's daily roundup of headlines from newspapers across the state at www.biztimes.com/#news.

The BizTimes Stock Index gained 1.74 points to close at 91.79 Friday, but the majority of local stocks fell back into the red in early morning trading today. The largest local decliners this morning were Manpower Inc. (down $5.27 to $31.13), Joy Global Inc. (down $1.88 to $21.88), Bucyrus International Inc. (down $1.71 to $17.65) and The Marcus Corp. (down $1.63 to $13.24). Only a handful of local stocks posted meager gains this morning, led by Associated Banc-Corp. (up 11 cents to $20.09) and Bank Mutual Corp. (up 7 cents to $10.65).

Terra Compactor Wheel Corp., a Plymouth-based designer and manufacturer of compacting wheels for use in landfills, is planning to expand its sales, manufacturing and distribution throughout the country. Read more in the new edition of the BizTimes Manufacturing Weekly bulletin.

Will your company be open for business on Friday, Dec. 26? Take today's BizTimes Poll and view the results so far at www.biztimes.com.

The University of Wisconsin-Milwaukee's Low Income Taxpayer Clinic provides a vital community service, according to Robert Meldman, author of today's Milwaukee Biz Blog.

Calling it "a fight we cannot afford to sit out," the Metropolitan Milwaukee Association of Commerce (MMAC) has filed a legal challenge to the City of Milwaukee's paid sick leave mandate.

As expected, the MMAC's complaint was filed in Milwaukee County Circuit Court today.

"This one-size-fits-all mandate is not only bad economic policy, it is also bad law," said MMAC president Tim Sheehy. "We believe this measure interferes with employers' rights to negotiate labor agreements with their employees and is an illegal extension of the City of Milwaukee's authority into areas of law and regulation reserved to the state."

As part of this lawsuit, MMAC also will request that the court enter a temporary injunction to block the city from enforcing the mandate while the court considers the mandate's legal validity.

If the injunction is not granted, all Milwaukee employers will need to begin implementation of the new mandate on Feb. 10, 2009.

"We do not take suing the city lightly," Sheehy said. "This has the potential to be a long and extremely costly fight. However, the negative ramifications of this mandate are so extreme for our member companies and our regional economy that we are convinced it is a fight we cannot afford to sit out."

The mandate was approved by 68 percent of the voters in the city in a Nov. 4 referendum. The referendum was placed on the ballot after 9to5, a coalition advocating on behalf of working women, gathered enough citizen signatures to ask the question.

The complaint was filed on behalf of the MMAC by Michael Best & Freiedrich LLP. The complaint alleges that the mandate is "invalid and unenforceable."

• The points of contention in the complaint include:
• The ballot question failed to inform the voters of "what the ordinance actually mandates."
• The mandate, in effect, sets a new minimum wage that conflicts with the state minimum wage law.
• The mandate is unconstitutional because it "arbitrarily discriminates against employers."
• The mandate exceeds the city's statutory authority.

To view the complaint filed by the MMAC, click here.
To view the answers to frequently asked questions (FAQs) about the mandate, click here.
To contribute to the MMAC's legal challenge fund, visit www.bizforgrowth.com.
To register to attend the Milwaukee Press Club's Newsmaker Luncheon about the mandate, click here.

9to5, the community organization that gathered the citizen signatures for Milwaukee's sick leave mandate referendum, issued the following statement today about the lawsuit filed by the Metropolitan Milwaukee Association of Commerce (MACC):
"The MMAC, in its latest attempt to disenfranchise Milwaukee voters, filed a lawsuit today against the city's paid sick day ordinance that passed in November with 69 percent of the vote. 
"Mayor (Tom) Barrett, City Attorney Grant Langley and the Common Council have gone on record and vowed to work to implement and defend the ordinance. 9to5 supports the ongoing efforts to staff and fully fund the Equal Rights Commission to implement and enforce paid sick days.
 "During an economic crisis, the MMAC should be supporting businesses that protect worker rights and help them implement the paid sick day legislation. Instead of providing better services for businesses to help them survive the economic crisis, they are attacking this ordinance and seek to waste taxpayer money at a time when city budgets are tight.  Paid sick days is not the problem and should not be blamed for any economic crisis, and the MMAC is using scare tactics to convince people otherwise.

The MMAC has a court date scheduled for Thursday, Jan. 29, when Judge John DiMotto will decide how quickly the case moves forward.
Scott Beightol, a partner with Michael Best and Friedrich LLP, which is representing the MMAC, said, "Without the injunction, hundreds of Milwaukee area business, and thousands of Milwaukee area employees will face uncertainties and the imposition of, I’ll guarantee you, millions of dollars in costs … We are optimistic that the court will enjoin the enforcement of the ordinance under the applicable legal standard we will be arguing, and ultimately we are very confident that the court will strike down the ordinance."
To read the news story filed earlier today about the MMAC's lawsuit, click here.