Thursday PM May 1st, 2008

Houston City Council approves updated energy code for new commercial buildings…Home Depot, Disney Stores closing outlets…House Financial Services Committee approves $300 billion housing rescue package…

The Houston City Council has approved an updated energy code for new commercial buildings that goes into effect on August 1st. The new energy-efficient requirements means an upfront cost increase for builders of about one percent. But Mayor Bill White says the cost increase is paid back by utility savings ranging from ten to 15 cents a year. New buildings will have design elements that reduce energy consumption, such as heat-trapping vestibules, reflective roofs and insulation. Houston is also developing a new energy code for residential buildings.

More information about green building in Houston is available on KUHF’s recent Green Building Series.

For the first time in its history, Home Depot will be closing stores because they aren’t performing well. The home improvement retailer is closing 15 of its namesake stores, affecting 1,300 employees. The Atlanta-based company said that the underperforming U.S. stores being closed represent less than one percent of its existing stores. They will be shuttered within the next two months. A company spokesman says some of the employees will be relocated, while others could lose their jobs. The stores to be closed consist of three in Wisconsin, two in Ohio, two in New Jersey, two in Indiana and one each in Kentucky, Louisiana, Minnesota, North Dakota, New York and Vermont. Home Depot been hurt by the slump in the housing market. Spokesman Ron Defeo says Home Depot has only closed one of its flagship stores previously because of structural damage. The company reiterated its intention to open 55 new stores in the 2009 fiscal year. It operates 2,258 stores in the United States, Canada, Mexico and China.

Walt Disney Company has purchased the Disney Store chain in North America from Children’s Place Retails Stores, with plans to close about 98 of the U.S outlets and two in Canada. The deal includes about 220 Disney outlets.

The House Financial Services Committee, seeking to respond to the housing crunch, has approved a $300 billion housing rescue package. The vote was 46-21 to advance the bill, which would permit the government to insure new, cheaper mortgages for hundreds of thousands of struggling homeowners now facing foreclosure. Ten Republicans joined all the Democrats on the committee to support the bill, which the Bush administration opposes. Most of them are from areas hit hard by the mortgage meltdown. GOP House members tried and failed to change the bulk of the measure they decried as a taxpayer-funded bailout. The bill would allow the Federal Housing Administration to back up to $300 billion in new mortgages for homeowners too financially strapped to qualify for such loans. Republicans tried to bar people with bad credit or histories of missing payments from the program and limit it to low- and middle-income people. They tried to remove the requirement that lenders accept losses. None of the changes took hold. Democratic leaders plan a vote in the full House next week on a broad housing package that also includes $15 billion for states to buy and fix up foreclosed properties and an array of tax breaks.

President Bush is calling on Congress to approve $770 million in new money for global food aid and development programs. The White House arranged a mid-afternoon session for Bush to announce the funds, and the request for lawmakers to consider. The funds are aimed at meeting immediate needs but also bolstering programs that help communities increase productivity and trade their products so that they are less in need of help. The issue of emergency food aid has become more urgent recently because of dramatically higher food costs that, combined with high gas prices and rising home foreclosures, are putting a huge squeeze on families at home and abroad.

With the price of a loaf of bread up 15 percent over the past year and eggs up 25 percent, the joint House-Senate Economic Committee is looking at the impact on American families. Lawmakers are studying the effect of rising prices on food banks as more people ask for help. Some retailers are pitching in to ease the strain on food banks. Sam’s Club is once again going to donate baked goods, meats and deli products that are near their sell-by dates to local food pantries. The company abandoned the practice two years ago in favor of donating money. But with food prices continuing to climb, it’s resuming donations of food.

The recent jump in food prices is changing the way Congress is approaching a five-year farm bill. House Speaker Nancy Pelosi is leading the charge to move dollars from crop subsides to food stamps and other programs to feed the needy. Around two-thirds of the nearly $300 billion bill would go for nutrition programs. That’s a jump of about ten percent from just six years ago. A lobbyist from the nation’s food bank network says rising food and energy costs plus record home foreclosures have created a “perfect storm” for needy families. The bill working its way through Congress also features a continuation of generous farm subsidies.

Federal regulators would have to come up with new ways to prevent combustible dust explosions in factories under a bill passed by the U.S. House. The plan would require the Occupational Safety and Health Administration to draw up new safety standards to stop workplaces from having large levels of dust that can fuel explosions and fires. A February explosion at a refinery owned by Sugar Land-based Imperial Sugar outside Savannah, Georgia, killed 13 people and has been blamed on dust that ignited. The bill now goes to the Senate, but the White House already has said President Bush would veto it.

British Airways shares jumped amid speculation about what kind of deal it might ink with American Airlines and Continental Airlines and the possibility of wider consolidation among European major carriers. BA announced that it was “exploring opportunities for cooperation” with the two U.S. airlines. That’s leading to suggestions that it would extend its alliance with Fort Worth-based American Airlines to include Houston-based Continental. Analysts say the expanded alliance could also seek antitrust immunity to set prices and schedules. U.S. airlines have been scrambling to merge or form new alliances since Delta Air Lines and Northwest Airlines announced plans to merge earlier this month. Analysts say the consolidation push could now spread further afield.

The NASA Inspector General says the space agency is breaking the law by allowing conflicts of interest on a board overseeing the building of a new spaceship to return astronauts to the moon. The board is set up to review NASA’s new Orion capsule. The panel is loaded with employees of the contractors it is supposed to scrutinize, the Inspector General report says. The report says the board chairman and five other members work for contractors hired by NASA for the multi-billion-dollar space shuttle replacement program. Four of the six are also stockholders in firms making money off the NASA project, the report says.

Part of this week’s Federal Reserve meeting went exactly as expected. That was the size of the interest rate cut. It nudged the benchmark federal funds rate down to two percent–the lowest level since late 2004. The move helps reduce the cost of certain consumer and business loans. At the same time, the Fed’s statement about the outlook was not the signal of a pause to rate cutting as many expected. Economist Robert Brusca says the Fed is concerned about inflation, but how concerned is “hard to tell.” Another economist, Scott Anderson of Wells Fargo Economics said the Fed has left people “in the dark” about what its next rate move will be. He adds that may be because the Fed itself isn’t sure.

Major Hollywood studios say they are not willing to accept demands for what they call huge pay raises sought by the Screen Actors Guild in contract talks. In a release posted on its Web site, the Alliance of Motion Picture and Television Producers says after 13 days of talks, significant gaps still remain between the sides. The alliance of major studios and networks also blamed the guild’s insistence on doubling fees for DVD sales and demands for increased in compensation and benefits. SAG officials did not immediately return a message seeking comment. The studios offered a point-by-point rebuttal of recent statements the guild has made to its members. The statement was the most public sign of discord in talks.

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