PhillyDeals: Union dollars could aid a building boom

If big buildings are built around Philadelphia despite the economic slowdown this year, it's likely that building-trade union dollars will help build them.

The $140-million-asset Delaware Valley Real Estate Investment Fund - chaired by lawyer and Democratic Party fund-raiser Thomas A. Leonard, run by Wharton School M.B.A. Paul Gilbert, and backed by locals of the Asbestos Workers, Cement Masons, Electricians, Laborers, Operating Engineers, Plumbers, Sheet Metal Workers, and Steamfitters - says it's backing these projects:

Oliver Tyrone Pulver Corp.'s planned Seven Tower Bridge in West Conshohocken, and its hotel and office complex in Coatesville. Both are "likely for '09," said president Donald W. Pulver, though he quickly adds that he'll need

bank loans along with the fund's equity.

So will most everyone else on the list.

Valley Forge Convention Center Development Corp.'s planned $120 million hotel redevelopment and casino in King of Prussia, which has been backed by Ira Lubert and other local investors, pending approval by state gambling officials.

John Buck Co.'s $90 million apartment complex, in partnership with the Unite Here labor union, at 21st and Chestnut Streets.

Ten Rittenhouse, developer ARC Wheeler's $140 million mixed-use development, under construction.

The fund has offered to refinance Buccini/Pollin Group's Residences at Rodney Square in Wilmington. The fund hopes to also finance Buccini's planned commercial development in Chester.

Delaware Valley isn't the only union fund at work in town. Pulver notes that Ullico (the former Union Labor Life Insurance Co.) financed construction of his earlier Eight Tower Bridge and Three Tower Bridge projects, for example.

The labor-backed Multi-Employer Property Trust is the equity partner in Hill International Inc.'s long shot American Commerce Center tower project in Center City.

And Bart Blatstein's Tower Investments relies on debt raised by labor-affiliated Amalgamated Bank's real estate funds for projects such as stores and apartments at the former Schmidt's Brewery site.

Many of the labor-backed developers are longtime union contractors. Others have agreed to take on union crews as they increasingly rely on union money.

"We want to be ready to go this year so we can create jobs and hours for the unions, and get good return for the pension funds," said Delaware Valley fund spokesman Joe Barilotti.

John Bogle Sr.

retired as

Vanguard Group Inc.

senior chairman in 2000, a year when the stock market, he now says, was "moronically high."

If that was a problem, it hasn't been since. Yet Vanguard's still growing, Bogle's still its public spokesman by default, and he still draws a packed house, as at Comcast Center last Thursday when law firm Stradley Ronon invited him to lecture on "Fixing a Broken Financial System."

Bogle's a moralist. Like a lot of ex-corporate chairmen, he condemns the times, with CEOs making more than in his day. He goes further than some in naming names, condemning greed and selfishness, Alan Greenspan's excessive faith in markets and Sandy Weill's overpaid management team at Citigroup.Though he likes what Weill's estranged protege, Jamie Dimon, has done to keep JPMorgan Chase & Co. solvent and growing.

The hall full of lawyers heard the familiar truths, then asked Bogle's prognosis on the questions of our day.

How long will the excruciating slowdown last? "A year and a half, two years."

Does he approve of President Obama and his stimulus package? Yes, though it's "far from perfect."

Treasury Secretary Timothy Geithner's vague new bank bailouts? Also yes, though a lot of "banks will have to be liquidated."

Won't we have huge inflation once the Federal Reserve is done trying to rescue the economy? Again yes, "because Congress does not have the courage to raise taxes."

Won't bonds outperform equity for the foreseeable future? Maybe not: Bond prices are already high; given bond and dividend yields, "stocks should do [3 percent or 4 percent] better than bonds."

How much of his own portfolio is now in bonds? "Seventy-five percent - it ought to be your age, or pretty nearly."