December 16, 2011

Mr. Dennis P. Lockhart, President and Chief Executive Officer
Federal Reserve Bank of Atlanta
1000 Peachtree Street NE
Atlanta, GA 30309-4470

Dear President Lockhart:

Thank you for taking the time recently to discuss the Red Fields to Green Fields research at Georgia Tech. The research has shown that Atlanta and other great cities throughout the nation can be transformed for the better by addressing the real estate challenges on the ground, thereby enabling the banking system to directly infuse needed liquidity into our economy.

Following our meeting, I came across a few comments, including yours, that related to our discussion:

"Georgia will not return to pre-recession employment levels until 2020, partly because the state has lost its competitive edge, according to a University of Georgia economic forecast released Tuesday." (AJC 11/30/2011)

"From August to September, none of the nation's major metro areas saw average home prices drop farther than Metro Atlanta." (WABE 11/30/2011)

"Federal Reserve Bank of Atlanta President Dennis Lockhart said the economy in the southeastern U.S. has lagged behind the U.S. recovery over the past 2 years because of a more severe real estate slump." (Bloomberg, 12/01/2011).

As you know, the real estate problem is huge. Between 2000 and 2007, $8.5 trillion of residential and commercial mortgage debt was created by the banking system, 140% more than the TOTAL mortgage debt outstanding in 1999. Developers used this easy financing to overbuild massively. Now capital is stuck in bad real estate investments without a mechanism to get it out, hindering an economic rebound and the resulting job growth.

After visiting a dozen cities, meeting with conservationists like the Trust for Public Land and others, all agreed that money to transform "dead malls" and other excess urban real estate to green space would be readily available if it could be leveraged 5 to 10 fold. Our banking system was very creative finding capital for real estate developments during the last decade using 10+ to 1 leverage. Led by the Federal Reserve, our country can be equally creative financially to help philanthropic entrepreneurs remake Atlanta and America for future generations.

I have attached letters supporting the concept from Will Rogers of the Trust for Public Land, Don Rissmiller, a leading Wall Street Economist, and Kevin Caravati, who led the Georgia Tech research. We are all available to meet with you and other banking system leaders to move the proposal forward.

Sincerely,

Michael Messner

cc: Mr.JohnBrock,Chairman,Coca-Cola Enterprises
Mr. Sam Williams, President, Atlanta Chamber of Commerce
Mr. Kevin Caravati, Georgia Tech Research Institute

PDF Version

Related Correspondence: