February 8th, 2016
By Laura Leslie
Raleigh, N.C. North Carolina lawmakers and the State Board of Elections on Monday filed emergency requests for a stay with a panel of three federal judges who have ordered the state to redraw its congressional districts because two are unconstitutional. The judges late Friday ordered lawmakers to redraw the maps by Feb. 19 and not to hold any elections for U.S. House until new maps were approved and in place. Elections officials and lawmakers both said the order jeopardizes the March 15 primary, noting that mail-in absentee voting is already underway.
We trust the federal trial court was not aware an election was already underway and surely did not intend to throw our state into chaos by nullifying ballots that have already been sent out and votes that have already been cast, Sen. Bob Rucho, R-Mecklenburg, and Rep. David Lewis, R-Harnett, said in a statement. We hope the court will realize the serious and far-reaching ramifications of its unprecedented, eleventh-hour action and immediately issue a stay.
More than 8,600 absentee ballots have already been sent out statewide, and about 430 have already been filled out and sent back, according to the State Board of Elections.
While we don t weigh into the politics of the redistricting lines as an agency, we make sure that these court orders are enforced, and (the judges) need to know the logistics behind that, said Josh Lawson, general counsel to the elections board, noting that 3.7 million ballots have been printed and that voter guides have been mailed to people statewide.
The pressures that we have are not made up. They are real, live democracy questions, Lawson said. This is kind of democracy in real time, needing to make sure that we have everything ready for elections that, in fact, have already started. The three-judge panel ruled that the 1st Congressional District, which spreads like an octopus across northeast North Carolina and has a tentacle that dips into Durham County, and the 12th Congressional District, which snakes along Interstate 85 between Greensboro and Charlotte, were drawn by the Republican-led General Assembly in 2011 so that the majority of voters in each were black. G.K. Butterfield, the Democratic incumbent in the 1st District, is running unopposed until November, but Democratic 12th District Congresswoman Alma Adams faces two primary challengers.
Butterfield said he doesn t believe a stay should be granted, noting that lawmakers were aware that courts have ruled that states cannot draw voting districts to include or exclude people because of their race.
The legislature knew this, and they assumed the risk of packing black voters into these districts, and now they ve got to be held to account for it, he said, adding that candidates should not be required to run in a district that is unconstitutional. Lawmakers have maintained that the maps were drawn for Republican advantage and that race wasn t a driving factor, but the judges didn t buy that argument. Evidence showed that the partisan claim was more of an afterthought than a clear objective, they wrote in their ruling.
It s very, very frustrating to get a decision saying, You did it wrong without actually saying, Here s what you did wrong, said Lewis, who oversaw the General Assembly s redistricting process along with Rucho. The North Carolina Supreme Court has twice approved the congressional and legislative maps, ruling against voters and groups such as the NAACP that complained black voters were packed into a select number of districts.
Lewis said he believes lawmakers could meet the Feb. 19 deadline for the new maps if required to do so.
It is very difficult to redraw these maps. We have the one person, one vote [rule]. We have other considerations, he said. So, I do think it s not an easy process by any means, but I do think it is possible to redraw the maps and be ready for the House and Senate to consider them next week. Gov. Pat McCrory would have to call a special legislative session to approve the new maps, and a special primary would have to be held this summer to select nominees for U.S. House for the November election. The extra primary would cost the state about $9.5 million, and Lewis said it would come at the cost of confused voters as well.
Do they vote? Do they not vote? This has really created a very difficult situation for the citizens of this state, and it s extremely unfortunate, he said. Despite lingering questions about the congressional primaries, Lawson of the state elections board urged people casting absentee ballots to go ahead and vote in those races.
If you have a ballot, vote your full ballot. Let the State Board of Elections worry about the legal consequence of that, whether that actually will count in those congressional races, he said. We don t want people self-censoring. We don t want people to assume that theirs will be among the lines redrawn, because that may not be the case.
By John Whitefoot, BA
What’s the best way to breathe life into a slumping stock like Seritage Growth Properties (NYSE:SRG)? Let it be known that Warren Buffett has taken a sizable chunk in the company. It’s one thing for an investing giant like Warren Buffett to add a stock like SRG to Berkshire Hathaway (BRK.A, BRK.B), but it’s quite another for him to add Seritage stock to his personal portfolio. In the day since he announced his eight percent stake in SRG stocks, the company’s shares spiked more than 20%. Should investors follow suit, or have they missed the boat on Seritage Growth Properties?
Warren Buffett Takes An 8% Personal Stake In SRG
It was another surprise move by the world’s greatest living investor. Warren Buffett, the $66.0-billion man, recently purchased $70.5 million worth of shares in the Sears Holdings Corporation (NASDAQ:SHLD) real estate spin-off, Seritage Growth Properties. Not surprisingly, the announcement helped drive up the share price in both Seritage and Sears Holdings. Seritage shares soared more than 20% on December 10, hitting an intraday high of $42.33.
Shares of Sears Holdings, home of the much-read Christmas Sears Wishbook, were up a more modest five percent, though this is still significant, especially when you consider the stock’s performance has been abysmal, particularly throughout 2015. Before the announcement, Sears’ share price was down 36% year to date. Now, it’s only down 34% since the beginning of the year. What’s the allure of Seritage Growth Properties? Remember, Buffett’s two-million share stake, giving him an 8.02% position in the company, is for his own personal portfolio. Does he have a gut feeling about Seritage, or is it the allure of the investing acumen of the struggling retailer’s chairman and CEO, Eddie Lampert?
Sears’ Real Estate Gold Rush
I’m not going to be the one who casts doubt on what motivates Warren Buffett. But I think his stake in Seritage is not unlike the lessons learned during the gold rush. You can mine for gold, or you can sell pickaxes. I think Buffett sees the value in selling pickaxes – or rather, being a landlord. Back in July, Eddie Lampert spun off Seritage, which is a self-managed real estate investment trust (REIT), in order to capitalize on the value of its real estate and return Sears to profitability. It used the $2.7 billion in proceeds from the rights offering to purchase the properties. As of September 30, 2015, Seritage’s portfolio included interests in 266 retail properties totaling over 42 million square feet of leasable area. This includes 235 wholly owned properties (which it leased back to Sears) and 31 properties owned through investments in unconsolidated joint ventures. At the end of the third quarter, the portfolio was 99.4% occupied.
At the end of the third quarter, its total market capitalization was $3.2 billion. Seritage Growth Properties had $51.5 million in unrestricted cash on hand and restricted cash of $100.3 million. The company said it expects to declare a common dividend prior to the end of 2015 to meet its REIT distribution requirements, but has not yet announced the amount.
Enthusiasm For Seritage Growth Properties Growing
Buffett is not alone in his enthusiasm for Seritage Growth Properties. Bruce Berkowitz, an equity fund manager, founder of Fairholmes Capital Management and disciple of Buffett, disclosed a 13.2% holding in SRG stock in July and continued to add to his holding in October and November. However, unlike Buffett, Berkowitz is a little more forthcoming about why he’s interested in SRG stock:
“A recent analyst report noted that ‘the demographic profile of the [Seritage] owned portfolio is surprisingly good, with 10-mile density and incomes of 692k and $77k, respectively, slightly better than the mall REIT portfolio averages of 680k and $77k.’ We are bullish also based upon our independent assessment of real estate values, recent transaction data, and expected dividend increases as the company repositions properties to command higher rents from new tenants.”
Buffett couldn’t have said it better himself. SRG is in its infancy, having just reported its first financial and operating results for its first quarter as a public company. It hasn’t even announced its dividend amounts yet. While Sears Holding Company isn’t faring so well, Seritage is on the right track.
In addition to income coming in from Sears and K-Mart, Seritage Growth Properties is looking to add additional value through redevelopment projects aimed at more diverse tenants and materially higher rents.
When it comes to being a landlord, that’s the best way to create significant value for shareholders.
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