Mrjoshua Member Username: Mrjoshua
Post Number: 771 Registered: 03-2005 Posted From: 69.209.142.16
| Posted on Saturday, April 01, 2006 - 11:17 am: | |
Down and Out in Bloomfield Hills As Detroit wobbles, even its toniest suburbs feel ripples from the woes of GM and Ford. By JEFFREY ZASLOW April 1, 2006; Page A1 The Wall Street Journal BLOOMFIELD HILLS, Mich. -- Foreclosures are up and charitable giving is down. A local country club has a waiting list -- for members who want to quit. The market for expensive homes is so slow that Michael Robbins, a divorce attorney here, says one of his clients is still living with his ex -- three months after the divorce was final. With the Michigan economy battered by the ailing auto industry, the ripples are being felt across the state -- even here in one of the nation's wealthiest communities. At a time when there's a growing gap between the rich and the poor, Bloomfield Hills offers a clear reminder that the wealthy often can't escape from the severe problems of a local economy. And that, in turn, is putting pressure on a wider swath of less-wealthy residents who depend on the rich for business. That people are feeling down and out in Bloomfield Hills is certainly a matter of degree. Blue-collar workers, in a state that lost 21,000 jobs since November alone, have far-bigger worries -- about feeding families and paying health-care bills. And thousands of auto workers, now considering taking lump-sum buyouts recently proposed by General Motors Corp., are struggling over the question of how they'll support themselves once the quick-cash fix is gone. Just yesterday, auto-parts supplier Delphi Corp. announced plans to cut 25% of its salaried positions, while proposing to cancel labor contracts and retiree medical benefits. (See related article.) Oakland County, where Bloomfield Hills is located, is the nation's fourth-wealthiest county with a population of more than one million, according to the latest per capita income data from the Commerce Department. Much of that money is connected to the fortunes of U.S. auto makers, making residents unusually vulnerable to the fate of a single industry. Unlike some major U.S. cities, Detroit is home to almost none of the richest residents in its area. They long ago moved on to a few select suburbs, including Bloomfield Hills. Located about 10 miles from Detroit, Bloomfield Hills is a favorite enclave of the rich. Its first estates were built in the 1890s. Some mansions sit near private lakes, or are set back on winding roads, out of view to passersby. The priciest home for sale is a 22,000-square-foot mansion listed at $14.75 million. Bloomfield Hills has about 4,000 residents; 45,000 more live in surrounding Bloomfield Township. From California's Silicon Valley to Texas's oil fields, regional economies are always affected by the cycles of local industries, and often bounce back after tough times. But Bloomfield Hills is heavily reliant on the health of two companies, Ford Motor Co. and GM -- both of which are undergoing massive structural changes. After losing billions and laying off tens of thousands of workers, GM and Ford are likely to become much smaller companies overall, and especially in the Detroit area, as the auto industry shifts west and south to states with lower labor costs. For Walt Griffin, who owns a mortgage business, the slow-down is hitting from both directions. He has been trying for a year to sell his 9,800-square-foot house. It has an indoor basketball court, a sauna, six bathrooms and once belonged to former Detroit Pistons star Isiah Thomas. The price of his house has been lowered to $1.75 million from $2.2 million. At the current rate of sales, there is a 41-month supply of houses for sale in the area that are priced at more than $1 million. At the same time, given "an upper-end loan market that's just dead," Mr. Griffin, 43, says his mortgage company's revenue is down about 70% since 2003. He has cut his staff in the last 18 months to six from 12, and his office space from 3,000 square feet to 1,200. Sixteen Bloomfield Hills-area homes are in some stage of foreclosure, compared with five in 2004, according to Foreclosure.com, a service that tracks foreclosures nationwide. In Oakland County, 723 homes are in foreclosure, more than double the 334 in February 2004. Michigan now has twice as many homes in foreclosure as it did in February 2004, and the state's current foreclosure rate is about two-and-a-half times as high as the national average. Across Bloomfield Hills, residents are changing their lifestyles in ways large and small. The 325-member Forest Lake Country Club says it has a 20-person waiting list to get out of the club. (Last year, there were just four people on this list.) In order to get back a portion of their equity in the club, these members have to pay $540 a month in dues until new blood can be found to take their slots. To lure new members, the club has cut its initiation fee to $15,000 from $45,000. The famed Oakland Hills Country Club, site of many pro championships, still has a waiting list to get in, but some members aren't as willing to splurge on guests, the club says. Members are charged $175 to bring a friend along for 18 holes on the club's top course. At Erhard BMW in Bloomfield Hills, sales are down 10% to 15% from last year. Some customers have told Erhard salespeople that they'll be switching to less-expensive domestic cars, such as GM's Cadillac, says Alan Graham, Erhard's general manager. "They're trying to kill two birds with one stone," he says. "They say they want to support the Detroit economy. And they want to save dollars." Stanford Krandall, who lives in Bloomfield Hills, is closing his family's jewelry business, located nearby. Founded by his great-grandfather in 1911, Sidney Krandall & Sons catered to some of the area's richest residents. But sales were down more than 25% since 2003. Mr. Krandall, 51, says customers would often look at a high-priced piece of jewelry, say how much they loved it, and then decline to buy it. He says they'd admit they wouldn't make the purchase because they're nervous about the economy or their jobs. "They feel they owe you an explanation," he says. William Armstrong, a 51-year-old Bloomfield Hills resident, was an engineer at Ford for 27 years. He was among several thousand salaried workers laid off in January. He says he and his wife "are now living as frugally as we can." They don't go out to dinner, they watch what they buy at the supermarket, and he has put on hold plans to buy a new Shelby Mustang for about $45,000. He says he was earning $95,000 a year. He received three months severance, but declined to take an extra nine months given to those who signed agreements waiving their rights to sue for discrimination. He is suing for age discrimination. "The company adhered to the law in making these difficult decisions," a Ford spokeswoman says. As a hobby, Mr. Armstrong owns four classic cars that he works on, all Fords. "I'm still a Ford fan and a Ford man," he says. But for now, he's put off tinkering on his cars, to save money. Because he says he lost privileges at Ford's fitness center when he lost his job, he has joined a gym. He works out to reduce stress and stay in shape, he says, so he'll look his best as he seeks work. Anna DiMaria, 65, ran beauty businesses in the area for nearly four decades. But last summer, she closed down her once-thriving Capelli Spa because she says at least 30% of her wealthy client base had cut back on visits or stopped coming. "Instead of getting facials every month, they'd get them every three months," she says. "They'd say, 'My husband and I have talked it over. We're taking a cut in our luxuries.' " Some clients were getting their false nails taken off to save the $70 monthly maintenance fee, says Ms. DiMaria. "They'd tell me, 'I want to let my nails breath.' They didn't want to reveal it was an economic decision." Maxine Brainer, who was a client of Ms. DiMaria's for 21 years, says she used to go to the spa weekly, often spending about $450. But toward the end, she came less frequently, and spent about $200 when she did. Ms. Brainer says she's being careful about spending, in part because her husband's wholesale-flower and greenhouse business has seen declining sales. Many customers aren't planting annuals this year, and they're cutting back on perennials, she says. "The wealthy are watching their money. They're not doing all the ground cover they did five years ago." Some are making cutbacks in part for the sake of appearance. For instance, those who fly in private jets are often taking less-expensive, smaller limousines to and from the airport. "Even if they're doing well, with everybody else struggling, they don't want to be seen as ostentatious," says Leo Savoie, a Bloomfield Township trustee who owns several businesses here, including Luxury Limo. About 40% of clients now book the company's smaller sedans rather than its stretch limos, he says, compared with 20% in 2002. The cost of renting the sedans is about $45 an hour, instead of $75 an hour. In nearby West Bloomfield, Angelo's Bistro lowered its prices almost 30% in January, and took away the tablecloths and upper-end menu items, such as pasta with lobster. It changed its name to Angelo's Greek Restaurant. As an upscale eatery, business had been suffering in the last year, says owner Angelo Georgizas, who opened this restaurant in 2003, and has run others in the area for 22 years. Patrons kept telling him that they still wanted to go out to dinner several nights a week, he says, but given the economy, no longer wanted to pay $18 or $20 per entrée. Now, with prices as low as $9.95 for entrées such as gyros and a spinach-pie platter, revenue is up 25%. "I have a lot of very wealthy people in here," says Mr. Georgizas. "To save money, they order the specials." He says some patrons have admitted to him that they now have a drink or two at home before coming to the restaurant, so they won't spend as much on drinks at dinner. At Hotel Baronette, in Novi, Mich., where many Bloomfield Hills residents have weddings and bar- and bat-mitzvahs, catering revenue is down about 30% in the last five years, says catering manager Kathy Charnley. She used to require that people hosting parties in the ballroom agree to spend at least $12,000 on food and beverages for a Saturday night event, and $10,000 for Fridays. Now, on some weekends, "I'll waive the minimums just to get a party in there," she says. More hosts are serving chicken instead of steak, and decorations are less extravagant. But bar bills are higher these days, says Ms. Charnley. "When the economy gets bad, bar bills go up," she says. In 2001, her average guest drank $15 in liquor at a bar mitzvah, and $18 at a wedding. These days, the average is $19 at a bar mitzvah and $25 at a wedding. The Baronette hasn't raised liquor prices. The ripple of blue-collar woes is beginning to affect doctors in the area. Bashar Succar, an ear-nose-and-throat physician who lives in Bloomfield Hills, practices in Pontiac, Mich., where about 25% of his patients are auto workers. Given the layoffs already under way, and those ahead, "I've noticed that in the last few weeks, people have been coming to have their surgery done because they're going to lose insurance," he says. He expects his patient load to fall 10% in the year ahead, as patients skip appointments to cut down on health-care costs. Meanwhile, the number of indigent patients his practice is treating has risen more than 50% since last year, to seven or eight people per week, he says. Given these signals in his business, Dr. Succar has been reevaluating his own finances. "I'm definitely cutting expenses," he says. "We're working on a budget now. We're worrying about the future and what's coming." GM recently reached a deal with the United Auto Workers union to cut an array of benefits, including $1 billion in annual health-care costs. Other doctors have already seen a decline in visits. Cardiologists at Michigan Heart Group live in Bloomfield Hills or nearby communities. They averaged 2,428 patient visits in 2005, the Troy, Mich.-based medical group says. That's 420 fewer visits per doctor than the practice saw in 2003. Such changes in her community don't surprise Ms. DiMaria, 65, who says she closed down her spa business partly because clients kept confiding their fears about the economy -- and she saw the writing on the wall. Wanting to cut expenses, she also put her 3,100-square-foot Bloomfield Hills home up for sale last year. A house on her street sold for $630,000 in 2003, and her real-estate agent, Lynn Fink, says it had fewer amenities. So Ms. DiMaria's home was advertised at "$610,000 for quick sale." It didn't sell. It was eventually reduced to $550,000. In an effort to lure other agents to bring clients by, Ms. Fink offered an enhanced commission, and held a drawing in which real-estate agents could win a $100 gift certificate to a local mall. But for seven months, no offers came. Ms. DiMaria knew the market was against her. In 2005, there were 388 home listings from Bloomfield Hills submitted to Realcomp II Ltd., the largest Michigan multiple-listing service. That's up 34% from 257 homes listed in 2000. Just 56 homes were sold last year in Bloomfield Hills, down 45% from the 101 sold in 2000. Last month, Ms. DiMaria accepted an offer for less than the current asking price. She plans to move to an apartment in the area. One recent afternoon, she sat in her kitchen reminiscing about the changes in her life and the glory days at her spa. She says she used to sell $250,000 a year in gift certificates alone. About 30 times a year, she'd sell special packages to brides. For $3,000 to $5,000 for the day, a bride-to-be would bring all her bridesmaids, her mother and mother-in-law for manicures, massages, a gourmet lunch and champagne. They would receive goody bags filled with creams, neck-pillows and jewelry. "They'd meet in the dining room wearing fluffy slippers and robes, with their hair in towels," she says. "It was so nice." But in her last year, she sold only 12 such days, she says, "and most of them cut out the bridesmaids." Ms. DiMaria sees the difference in her own life. She used to shop for clothes at a high-end nearby mall and buy whatever interested her. She still goes there, "but now I ask the salespeople to call me when something is marked down," she says. "Nowadays, that's what people do." Write to Jeffrey Zaslow at jeffrey.zaslow@wsj.com |
Irish_mafia Member Username: Irish_mafia
Post Number: 448 Registered: 10-2003 Posted From: 70.228.56.253
| Posted on Saturday, April 01, 2006 - 11:36 am: | |
5.3% of the population of Bloomfirld Hills is living below the poverty line? |
Lilpup Member Username: Lilpup
Post Number: 904 Registered: 06-2004 Posted From: 64.12.116.204
| Posted on Saturday, April 01, 2006 - 11:38 am: | |
yeah, the servants |
Irish_mafia Member Username: Irish_mafia
Post Number: 449 Registered: 10-2003 Posted From: 70.228.56.253
| Posted on Saturday, April 01, 2006 - 11:43 am: | |
Perhaps they include unemployed houswives, kids and the family pet? |
Hamtramck_steve Member Username: Hamtramck_steve
Post Number: 2853 Registered: 10-2003 Posted From: 69.209.138.61
| Posted on Saturday, April 01, 2006 - 11:51 am: | |
The left column in that table is labeled "Oakland County, Michigan." |
Thecarl
Member Username: Thecarl
Post Number: 669 Registered: 04-2005 Posted From: 69.14.30.175
| Posted on Saturday, April 01, 2006 - 11:53 am: | |
the title is a play on "down and out in beverly hills," and the article describes not only the economic conditions in bloomfield hills, but in oakland county and michigan also. 5.3% of oakland county residents are below the poverty line - and it's likely many of them live in pontiac. |
Irish_mafia Member Username: Irish_mafia
Post Number: 450 Registered: 10-2003 Posted From: 70.228.56.253
| Posted on Saturday, April 01, 2006 - 11:54 am: | |
Well that makes a bit more sense. Should have opened my eyes. Thanks Hamtramck |
Gumby Member Username: Gumby
Post Number: 1038 Registered: 11-2003 Posted From: 68.60.143.186
| Posted on Saturday, April 01, 2006 - 12:03 pm: | |
Why are they calling it an enclave? Isn't an enclave a city within a city like Hamtramck or Highland Park? |
East_detroit Member Username: East_detroit
Post Number: 559 Registered: 11-2003 Posted From: 69.212.169.194
| Posted on Saturday, April 01, 2006 - 12:13 pm: | |
An enclave in the horribleness that is Metro Detroit... dont you know? Poor babies... how will they gas up the Lexus? |
Dove7 Member Username: Dove7
Post Number: 2029 Registered: 11-2003 Posted From: 24.5.195.127
| Posted on Saturday, April 01, 2006 - 12:14 pm: | |
Wow, then pictures look like the profiles of wanted mob families. |
Thecarl
Member Username: Thecarl
Post Number: 670 Registered: 04-2005 Posted From: 69.14.30.175
| Posted on Saturday, April 01, 2006 - 12:20 pm: | |
the article shows how tightening of discretionary funds at the top has an impact all the way down. one may resent someone building a million-dollar mansion, but the bricklayers are sure thankful. |
Lmichigan Member Username: Lmichigan
Post Number: 3463 Registered: 10-2003 Posted From: 67.172.95.197
| Posted on Saturday, April 01, 2006 - 1:47 pm: | |
Bloomfield Hills is an enclave, in that it is surrounded by by Bloomfield Charter Township. |
Frank_c Member Username: Frank_c
Post Number: 449 Registered: 10-2003 Posted From: 207.200.116.139
| Posted on Saturday, April 01, 2006 - 2:51 pm: | |
Don't you know Lexus is only a starter car in Bloomfield Hills, something for the high school kids. PS This truly brings back bad memories for me, the economy in SE michigan is the most volitile in the USA, I don't miss it. |
Jjaba Member Username: Jjaba
Post Number: 3511 Registered: 11-2003 Posted From: 67.160.138.107
| Posted on Saturday, April 01, 2006 - 3:18 pm: | |
Autos are a cyclical business. Wait till wholesale oil goes to $100 a barrel. Might be time to invest in bus stocks. jjaba just talked the wife into taking the Black Lincoln Towncar instead of the stretch limo to the airport where we load our private jet. Oy veyesmere. Rock, what changes do you see in Grosse Pointe? Ofcourse, when summer comes, they always save money on socks. Can Buffy and Wellington still go to Senior Prom? Great article. Thanks. jjaba. |
Atl_runner
Member Username: Atl_runner
Post Number: 1889 Registered: 10-2003 Posted From: 24.98.116.13
| Posted on Saturday, April 01, 2006 - 3:37 pm: | |
Scary stuff. The only positive is that when the US as a whole ultimatly cycles back into a recession, the Detroit Metro will be in a been there, done that situation, and will probably rebound sooner than the rest of the US. The problem is, the majority of the US is experiencing growth right now. |
Bob Member Username: Bob
Post Number: 889 Registered: 11-2003 Posted From: 64.12.116.204
| Posted on Saturday, April 01, 2006 - 3:39 pm: | |
Or Metro Detroit will just sink further when the nation goes into recession. |
56packman Member Username: 56packman
Post Number: 168 Registered: 12-2005 Posted From: 24.208.234.52
| Posted on Saturday, April 01, 2006 - 4:30 pm: | |
Has anyone put in a call the the RV manufacturers in Elkhart, IN? that used to be a very reliable bellweather as to the future economy. They start losing sales before a big recession, and start taking orders before the economy makes an upswing. With all of the middle class industrial work going buhh-bye, that may no longer hold. |
Livernoisyard Member Username: Livernoisyard
Post Number: 381 Registered: 10-2004 Posted From: 69.242.223.42
| Posted on Saturday, April 01, 2006 - 6:00 pm: | |
Detroit will continue being the Beirut of NA, and SE Michigan will become the New Appalachia - without any hills of merit. The Western UP will probably secede to Wisconsin. |
Alexei289 Member Username: Alexei289
Post Number: 1093 Registered: 11-2004 Posted From: 68.61.183.223
| Posted on Saturday, April 01, 2006 - 8:37 pm: | |
I lay Woodfloors... When the rich hurt, I have really no other business... since the rich are about the only people now that can afford to redecorate... |
Jjaba Member Username: Jjaba
Post Number: 3516 Registered: 11-2003 Posted From: 67.160.138.107
| Posted on Saturday, April 01, 2006 - 9:17 pm: | |
56packman, Elkhart has been running three shifts because of Katrina, Rita, and the Hurricane sistahs. The RV business might be off, but not temporary housing. jjaba hasn't heard that RVs are outsourced yet. The Asians mostly make little stuff. jjaba. |
Livernoisyard Member Username: Livernoisyard
Post Number: 385 Registered: 10-2004 Posted From: 69.242.223.42
| Posted on Saturday, April 01, 2006 - 9:33 pm: | |
There were news reports this week that it could take New Orleans up to 25 years to ever rebuild the flooded regions. The Feds have still to come up with new flood-plain maps. So this temporary-housing market might quickly come to a halt in that area. |
River_rat Member Username: River_rat
Post Number: 88 Registered: 02-2006 Posted From: 71.126.176.158
| Posted on Saturday, April 01, 2006 - 10:58 pm: | |
Life is tough, I had to lease out the private jet to maintain the yachts and the vacation home in St. Kitts. the river rat is almost poor This is April Fools Day |
Lmichigan Member Username: Lmichigan
Post Number: 3466 Registered: 10-2003 Posted From: 67.172.95.197
| Posted on Sunday, April 02, 2006 - 1:18 am: | |
And, if Congress manages to get through the proposal to fence up the southern border, there's going to be less labour. And, some in Bloomfield Hills may have to *gasp* pay their 'help' more as labour becomes more scarce, or *even larger gasp* clean their houses and raise their children themselves! I kid, I kid...or do I? |
Futurecity Member Username: Futurecity
Post Number: 264 Registered: 05-2005 Posted From: 69.212.44.48
| Posted on Sunday, April 02, 2006 - 3:36 am: | |
"Some clients were getting their false nails taken off to save the $70 monthly maintenance fee" "she used to go to the spa weekly, often spending about $450. But toward the end, she came less frequently, and spent about $200 when she did. Yep, they're really hurting. |
Adamjab19 Member Username: Adamjab19
Post Number: 643 Registered: 11-2003 Posted From: 24.192.148.148
| Posted on Sunday, April 02, 2006 - 11:07 am: | |
Sure they are. This spa is now hurting. Whether we agree with or even can come close to living like some of these people, the way they live helps someone and something in our economy. The wink wink, nudge nudge, "yeah, they're really hurting," sarcasim against the rich people is kind of lame. |
The_rock Member Username: The_rock
Post Number: 1085 Registered: 11-2003 Posted From: 68.42.251.225
| Posted on Sunday, April 02, 2006 - 12:43 pm: | |
Agreed adam/19. Those folks out in Bloomfield pour big bucks into Detroit charities every year. Big bucks. I would hate to see what would happen to youngsters in Detroit if those charity-dollars did not flow into Detroit from the suburbs. |
Harsensis Member Username: Harsensis
Post Number: 41 Registered: 07-2005 Posted From: 71.227.102.82
| Posted on Sunday, April 02, 2006 - 2:10 pm: | |
Those stats are for Oakland County as a whole, not just Bloomfield Hills. |
Harsensis Member Username: Harsensis
Post Number: 42 Registered: 07-2005 Posted From: 71.227.102.82
| Posted on Sunday, April 02, 2006 - 2:22 pm: | |
I sell on ebay and I have noticed the downturn for the last few years. Right now it has been getting very slow. |
The_rock Member Username: The_rock
Post Number: 1086 Registered: 11-2003 Posted From: 68.42.251.225
| Posted on Sunday, April 02, 2006 - 4:36 pm: | |
Perhaps the changes in GP are more subtle. But there are a ton of houses on the market that have not moved in a long time, though the realators I know have given me some conflicting stories as to why.I have no statisitics to back it up, but I seem to notice more "for sale by owner" signs now, meaning folks don't want to pay a commission to a real estate agent. Club memberships are down.I understand there is no longer a waiting list at the GPYC, and when you join now, the initiation fee can be paid off in installments, rather than right from the get-go. Still, the auto industry downturn has definitely affected this area. A couple of restaurants have closed, but then restaurants do open and close around here even in good times. I understand that a couple of the bump shops have reported a down-turn in repairs. And no doubt this summer, a good number of the boats that are sitting on their cradles in shrinkwrap will remain there, still in shrinkwrap. That's the way it was last summer,too. But I doubt if the pending fish fly population will trim down any. |
Jjaba Member Username: Jjaba
Post Number: 3520 Registered: 11-2003 Posted From: 67.160.138.107
| Posted on Sunday, April 02, 2006 - 5:42 pm: | |
Good point, Rock. Who the hell would need a realitor in Grosse Pointe? Everybody knows it's a fine place to live. All's you gotta do is take off your socks, get a pair of tassled dress shoes, wife with Vuiton bag, a nice Cadillac, and you can charm any seller. jjaba is sure you gotta a little community paper to place a simple ad. jjaba. |
Sailor_rick Member Username: Sailor_rick
Post Number: 124 Registered: 02-2004 Posted From: 12.2.192.223
| Posted on Monday, April 03, 2006 - 12:32 am: | |
Fishflys, mmm. Those "Canadian Soldiers" would plug our nostrils and scupper plugs every hatch. I can almost hear the crunching underneath the tires or smacking the bike's windscreen now. A friend's St. Clair Shore's co-worker was so terrified of the buggers, she'd take her vacation time to avoid them. Maybe a cottage industry could be created with their high protein carcasses. A net gain for those GP lake-side soirées during these hard times. |
Jjaba Member Username: Jjaba
Post Number: 3521 Registered: 11-2003 Posted From: 67.160.138.107
| Posted on Monday, April 03, 2006 - 2:05 am: | |
Sailor rick tells it like it tis. Great summer jobs for Buffy and Wellington home from Williams and Smith. jjaba, down to Wayne on the Dexter bus. |
Metrodetguy Member Username: Metrodetguy
Post Number: 2457 Registered: 11-2003 Posted From: 71.144.84.243
| Posted on Wednesday, April 05, 2006 - 7:49 pm: | |
Side note: Mr. Zaslow is the husband of Fox2 Anchor Sherry Margolis and they live in the Bloomfield area. |
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