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October 13, 2005

The Weekly Wrap

The end of the boom?
Humboldt's housing prices may skyrocket no more

30 Questions for Abdul Aziz

The Weekly Wrap

FIX NIXED: The North Coast Railroad Authority's dreams of freight trains chugging up and down Humboldt, Mendocino and Sonoma counties were set back last week when Gov. Arnold Schwarzenegger vetoed a bill that called for a reallocation of $5.5 million to clean up the ailing Northwestern Pacific Railroad. State Sen. Wes Chesbro, the bill's sponsor, railed against Schwarzenegger, saying that the veto indicates "how out of touch this Governor is and how little he cares about the North Coast." That could be true, but a number of critics have said that the railroad is a lost cause anyway. Senate Bill 792 would have reallocated NCRA grant money that was slated to repay a federal loan, to instead be used to complete an environmental cleanup and provide $1.5 million for administrative and operating costs. By law, the NCRA is required to maintain the 315 miles of track.

BEWARE THE ALGAE: Every year in the warm summer and autumn months, algae blooms on Copco and Iron Gate reservoirs --- 190 river miles from the mouth of the Klamath --- and spreads like an antifreeze spill across the surface. It's brightest green along the shore, and less so in the middle, says Craig Tucker, Klamath Campaign coordinator for the Karuk and Yurok tribes. The Klamath Campaign seeks to have four out of the six hydroelectric dams on the Klamath River torn down to allow fish passage to former spawning grounds. Initially, says Tucker, the tribes were focusing on the effects on fish from the algae, which blooms and then, as it dies, sucks oxygen out of the water. They blame this oxygen-deprived water, in part, for the numerous fish kills that happen almost yearly downriver. But after sampling the algae on the reservoirs earlier this year, their concerns turned toward the algae's potential harm to humans. "Turns out, there are hundreds of species of blue-green algae," says Tucker. Some of the species are harmless --- even sold in health food stores. "And some are highly toxic." In August, samples showed high levels of a particularly nasty algae, Microcystis aeruginosa, which secretes a toxin that can cause everything from severe eye irritation to kidney damage, liver failure and death. The amount of this algae in the reservoirs exceeded the World Health Organization's standard for recreational use by 400-fold, said Tucker, and the levels of the actual toxin exceeded the WHO's "tolerable daily intake" by up to 217 times --- "among the highest recorded in the United States," said Susan Corum, the Karuk Tribe's water resources coordinator, in a news release issued jointly on Sept. 30 by the tribe, the North Coast Regional Water Quality Control Board and the U.S. Environmental Protection Agency. Some of the algae has washed downriver. "While the algae doesn't do well in moving water, the toxin [it secretes] does," says Tucker. The tribe is waiting for results from sampling to determine the toxin levels, though Tucker says it's difficult to test for the molecules in-river. In the meantime, the tribe, water board and EPA are warning people to avoid swimming or otherwise contacting water where the algae is blooming.

DRINK, DRIVE, LIE, LOSE YOUR LICENSE: Your doctor's license that is. McKinleyville physician Robert Mott, 54, stands to be stripped of his medical license by the California Medical Board for alcohol abuse and incidents that occurred in 2004. Last August, when a California Highway Patrol Officer pulled over Mott in Del Norte County, the physician reportedly told the officer he was not drunk, but had taken too much Wellbutrin, an antidepressant medication. When Mott was brought to the hospital for a blood test, he allegedly attempted to escape. He was eventually restrained and his blood alcohol level was found to be more than twice the legal limit. No drugs were found in his system. He was taken to an in-patient detox center where he admitted to frequent binge drinking and using marijuana. In another case that occurred about two months before the DUI, Mott was caught snooping around an Arcata resident's backyard at 5 a.m., which led to his arrest and charges of prowling and stalking. But far worse than his other alleged offenses, Mott is accused by the medical board of gross negligence in the treatment of a patient who came to him complaining of chest pains in March 2004 while he was working as an emergency room physician at Mad River Community Hospital in Arcata. Mott misdiagnosed the woman, 68, with acid reflux. She died two days later, shortly after another doctor discovered that the she had severe heart problems. Sadly, it doesn't end there, Mott allegedly lied again when he told the medical board that he suggested that the patient be admitted to the hospital and that she refused. Reports indicate that the offer was never made. Mott received his Physician and Surgeon's Certificate in 1980 and it will expire Feb. 28, 2006, unless renewed. The state medical board filed an official accusation against Mott on June 13. On Tuesday, a receptionist at Mott's McKinleyville Family Practice Medical Clinic declined to say whether or not Mott is still seeing patients. Mad River Community Hospital confirmed that Mott still has privileges to admit patients to the hospital, but he is no longer an emergency room physician there.

RNS FIGHT PROPS: Nurses with the California Nurses Association distressed by two of Gov. Schwarzenegger's special election initiatives, Props. 75 and 78, embarked on a 32-city "Nurses Say Vote No in November" tour Monday. They started in Eureka --- a fitting launch, given that it's the home of Rob Arkley, one of Schwarzenegger's hefty financial backers and the owner of Security National Servicing Corp. "The campaign estimates that 97 percent of the donations to Prop. 75 come from billionaires, multi-millionaires or corporations, which is Schwarzenegger's traditional base," said the CNA news release announcing the nurses' tour. The CNA says Prop. 75 --- dubbed "paycheck protection" by the governor's camp --- would "stifle the voices of nurses in healthcare policy and political debates," and that Prop. 78 "undercuts efforts to expand patient access to expensive prescription drugs." Under Prop. 75, public employee unions --- largely Democratic in base --- would have to get permission from each member before they could use that member's dues for political campaigns. It would restrict nurses, teachers, police and firefighters unions. In an editorial in Tuesday's San Francisco Chronicle, Susan Solomon and Susan Cieutat credit Arkley and other select financial heavies with getting the "deceptive measure" on the ballot in order to "make it easier for the governor and his Big Business pals to cut school funding, health care and public safety." In September, when Schwarzenegger announced Prop. 75, he said the use of public employee union members' dues to support causes or candidates is "not a contribution. That is a tax." The nurses on tour say that pooling their money is the only way they can amass enough clout to fight for causes and candidates. The Chronicle's Tuesday editorial put it this way: "By targeting workers, the balance of power in the political process would further shift to big corporations, which already outspend workers 24-1, according to the nonpartisan Center for Responsive Politics." But, but... Arkley's also a philanthropist! (Security National owns the Eureka Reporter.)

EX-PALCO EXEC MOVIN' ON UP: Former Pacific Lumber Co. executive Jim Branham was named last week as the first executive officer of the Sierra Nevada Conservancy, an agency created by Gov. Arnold Schwarzenegger earlier this year. The conservancy is the largest in California with 25 million acres (that's bigger than most states), stretching across 22 counties from the eastern Oregon border to Kern County (Humboldt is not included). In 2003, Branham, 50, left Palco's government affairs department after four years with the lumber company to become the undersecretary of the California Environmental Protection Agency. Environmental groups including the Sierra Club harshly criticized Schwarzenegger's appointment of Branham to the position. Of his two-year stint in Sacramento, his superior, Cal/EPA Secretary Alan C. Lloyd, praised Branham's work and said that he demonstrated a "strong commitment to the Governor's Environmental Action Plan" and projected that Branham will share Schwarzenegger's "vision for a sustainable Sierra Nevada." Conservancy Chairman Mike Chrisman stated that he could think of no one better qualified than Branham for the new position. Before working for Palco, Branham was an aide to republican Senator Jim Nielsen from 1978 to 1991. He later served as Chief Deputy Director at the California Department of Forestry. Branham received a Bachelor of Arts in Political Science from California State University, Chico.

GOT POT?: After leaving an Alameda County medical marijuana club, a 24-year-old Garberville woman was forced from her Volvo at gunpoint by a ski mask-clad man late last month, according to media reports. What someone from the pot plenteous hamlet of Garberville was doing at a San Leandro cannabis club remains unclear, as the woman, whose name is being withheld, was reluctant to cooperate with police after the incident --- the crime was reported by witnesses. In a Sept. 29 article in the San Leandro Times, Alameda County Sheriff's Department spokesman Lt. Dale Amaral called the medical cannabis dispensary "an absolute magnet for every thug in the nine Bay Area counties." The unidentified woman's car was recovered two blocks away from where it was stolen. According to reports, she chose not to pursue a criminal complaint. A call to Lt. Amaral was not returned before deadline.

CORRECTION: A story in last week's `Weekly Wrap" ("Fortuna First," Oct. 6) misstated the outcome of the grand jury's legal action against Fortuna City Councilmember Debi August. The case was not "dropped" by the District Attorney's Office, it was dismissed by Judge John Feeney after grand jury documents that had not previously been disclosed to August's attorneys surfaced. The Journal regrets the error.



The end of the boom?
Humboldt's housing prices may skyrocket no more


Back in 2003, when Bob and Ginny Felter were scanning the market for a good fixer-upper to inhabit for a few years, the Humboldt County real estate market was a much different beast than it is today.

Back then, single-family homes were coveted. Real estate agents representing would-be buyers used all their talents to get advance word on properties that might be moving onto the market. When a new property hit the county's Multiple Listing Service, they were often sold within hours, sometimes after a bidding war that drove up the price by tens of thousands of dollars.

The Felters found what they were looking for --- a two-bedroom home in a good Arcata neighborhood, just a short walk from the Humboldt State University campus. With the help of an on-the-ball agent, they were able to snatch it up right after it went on the market, despite the fact that there were "five or six people" in line before them, Ginny Felter said Monday.

After completing repairs and adding a mother-in-law unit, the Felters were ready to sell the house this summer. This time, things weren't quite as quick. The house stayed on the market for about a month (it just went into escrow last week). And rather than sitting back and letting bidders jack up the asking price, the Felters actually had to come down to meet a low bid.

Ginny Felter, who will be moving with her husband to a new home they built in McKinleyville, said that despite having to knock off about 5 percent of their asking price, they were happy to get the home sold.

"I'm not saying that's going to happen today and tomorrow, but the history of markets is that they have ups and downs," she said. "We would much rather be selling on the upside than the downside."

The Felters may have done just that --- barely.

According to a new study being prepared by economist Erick Eschker --- director of the Humboldt Index of Economic Activity --- the era of soaring prices that has typified the Humboldt County market over the last few years may soon come to an end. And there are mounting signs that the market may have, in fact, already reached its peak.

In an interview from Chicago, where he is working as a research economist for the American Medical Association, Eschker said that while he was still waiting for recent data from the Humboldt Association of Realtors to finalize his study, a careful analysis of home prices and rental rates over the last 15 years shows that between 2002 and 2004, the rapid rise in home prices was likely rooted in unsustainable market speculation, not economic fundamentals.

In the forthcoming study, Escher compares the median home price with the average annual rent paid for a home in the county. Dividing price by rents yields a ratio roughly similar to the "price-earnings" ratio used to judge stocks and other investments. The evidence showed that since 2002 people have been paying more for homes than this rough measure of returns would seem to justify.

"Rents have gone up in Humboldt County over the last few years, and prices have gone up," he said. "But what people use is that ratio. In the last 15 years, that ratio typically averaged about 16 --- all the way up until 2002. Then, in the last two years, it has averaged about 20."

Eschker said that, somewhat surprisingly, the pattern mirrors what has happened in major urban boom markets such as San Francisco, Los Angeles and Miami --- areas that some economists fear may be experiencing "bubbles" in the real estate market that could be on the verge of bursting.

"Basically, what I found is that what's happening with the very hot markets is the same thing that's happening in Humboldt County," Eschker said. "Humboldt County is on the coast, so it might experience the same kind of bubble effect as other communities on the east and west coasts. On the other hand, it's very rural. But the first factor, I've found, has dominated."

Eschker cautioned that he had yet to see data for the first few months of 2005. But there are indications out there that the Felters' experience is simply one example of a hot sellers' market that seems to be quickly cooling.

According to the most recent figures released by the Humboldt Association of Realtors, the median price for a single-family home in Humboldt County dropped three months in a row during the summer, traditionally one of the busiest times in the real estate market. In June, the median home price was $333,000 --- nearly twice what it had been three years previous. In July, it dropped to $320,000. In August, it fell again, to $319,000.

Perhaps more importantly, there are more sellers out there right now than there have been in the last three years, according to Dean Kessler, co-owner of Eureka's RMK Realty Services. Kessler said that according to the statistics he keeps, there are twice as many local properties on the market as there were at this time last year.

Kessler said that the most basic economic law --- supply and demand --- would predict that this rush of property onto the market would tend to depress prices. He has already seen this happening in certain instances, he said.

"When you have more inventory and the same number of buyers looking --- in order to move the inventory, sellers are finding that they have to lower the price in order to be competitive," he said.

For his part, Kessler said that he didn't expect prices to crash. He cited a recent report released by the California Association of Realtors that predicted statewide home values would continue to increase in the coming year, only at a slower rate than they had done in the past.

But Eschker was not so sanguine. He said that although bubbles in any market were difficult to identify, except in retrospect, he believed that home prices in Humboldt County, like other "hot" markets over the last few years, could possibly be headed for a fall.

"It's hard to tell when you're in a bubble, and it's also hard to tell what happens afterwards," he said. "What may happen --- and I'm just guessing, here --- is that you might have a one-time, little drop in values and then a long, long period of stagnation."

Eschker said that California experienced a similar period of stagnation in the early '90s. But other places, such as Japan --- and certainly other markets, like the stock exchange --- have famously experienced more dramatic corrections. The Humboldt County real estate market is not immune to such crashes, Eschker warned.

"[Prices] could come down 30 percent," he said. "That's certainly possible."

When it is finished --- perhaps as soon as next week --- Eschker's study will be posted on the website of the Humboldt Index of Economic Activity:


9 Questions for Abdul Aziz


Dr. Abdul Aziz (photo below), a native of Pakistan, is a retired professor of business administration at Humboldt State University. In recent years, he has lead discussion groups on Islam, to which all are invited, at the Arcata Library, Sundays from 1 to 2 p.m.

Aziz spoke with the Journal on Monday, five days after the beginning of the Muslim holy month of Ramadan.

photo of Dr. Abdul Aziz, photo by Bob Doran1. How many people generally attend your lecture series?

The average is eight. Sometimes there are 20; there have been two occasions where were only two.

2. What sort of people come?

Generally, they are people who are interested in specific topics. For example, on the day I taught about Ramadan and fasting, there were some people who wanted to know what the benefits of fasting were. Then, when I talked about prayers, there were people who were interested in praying to God and the different ways of praying. However, there are some who just show up as a matter of curiosity. They don't ask many questions, but they listen.

Photo by Bob Doran

3. What prompted you to start holding these talks?

My objective was to minimize the lack of knowledge about Islam. On the TV, particularly, we keep hearing people say things about Islam which have nothing to do with Islam. Misrepresentation of Islam is a big problem. So I thought if I taught people what Islam is, perhaps our community would better understand the Muslim community over here.

I have been talking about those things which relate to the community --- the Bible and the Koran, how Jews are mentioned in the Koran, how Christians are mentioned in the Koran. What are the similarities, particularly among these Abrahamic religions, which have the same source --- the Jewish people?

But I've also tried to make the point that the other religions may not look Abrahamic, but they have the same type of teachings. My objective has been to bring about some type of understanding about the uniformity of religion.

4. What do you find is the most common misunderstanding about Islam?

This terrorism problem. Some people think that Islam, in its inherent nature, is violent. That's what they tell me they're hearing in their churches, or from people on TV.

I try to explain to them that if we want to think about a religion, we should go to the scripture. The Koran is the basic scripture of Islam, and from the Koran I try to show them that these are the instructions regarding the behavior of Muslims toward non-Muslims. There we find out that the treatment is basically benign --- that is, we should try to treat all human beings equally well, whether they belong to our religion or some other religion. We should not try to force our opinion on people of other religions. That's what the Koran says.

So if somebody is doing violence at this time, it's not that the religion itself is violent, but it is because some people have gone away from the religion. This has happened in all religions.

5. There's a sort of movement within the Islamic world --- a fundamentalist, violent movement --- but you're saying that these are people who have moved away from Islam, is that right?

Yes. These people have tried to interpret Islam according to what they think the political agenda of the Muslim world at this time should be. They think the political agenda of the Muslim world should be to get rid of the West, to get rid of Israel, etc. So they think, how do we get rid of them? And they think that this is the one way, terrorism. So they try to interpret the Koran so that they can justify terrorism.

Whereas the Koran itself gives us means of getting some bully off the back: That is, through being a good person, through preaching good and through offering the teachings of the Koran. So Koran teaches us how we can make another person who is persecuting us a friend of ours.

6. Are you observing Ramadan?

Yes, I am.

7. It's one month of the year, every year of your life how does Ramadan differ from the rest of daily life?

See, I don't try to do very strenuous work during the month of Ramadan --- yard work, etc. --- I would try to minimize that. Other than that, it's just normal. I go to my work, I do the work as it done. But basically, I am supposed to worship more.

The fasting among Muslims [during Ramadan] is regulated. The rules and regulations are very clearly stated in the Koran: That you cannot eat [during the day], you cannot drink, you cannot have conjugal relations with a spouse, you cannot smoke, you can not have anything that provides nutrition. That you should give more alms.

8. Do you feel that it's a sacred month? Do you feel closer to sacred things during the month?

Yes. During Ramadan, when I worship more, I try to keep myself away from mundane types of things which would make me talk more, something like that. I feel closer to God.

9. I'm sorry --- am I making you break that?

No, it's no problem! We are talking about something purposeful.



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