Shells Restaurants Files For Bankruptcy

Looks like yet another sign of the times. Shells has been around here as long as I have. From Tampa Bay Business Journal.

Shells Seafood Restaurants Inc. has filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division. The company will continue to operate its business as “debtor-in-possession" during the process.

The filing Tuesday comes shortly after the company entered into a new partnership in Pembroke Pines to convert one of its stores to a new concept, Rock Beach Grill. Management was hopeful that the new concept and a new, cheaper menu would stimulate sales.

Company officials declined to comment on the filing.

PFG Florida, based in Dover, is the largest creditor at $604,007.14. PFG is a wholesale food distributor and Shells’ largest vendor.

The 20 largest creditors are a collection of trade vendors, professional services firms and energy companies. The Tampa office of law firm Fowler White is owed $79,474.44, the law firm Shutts & Bowen $19,395.89 and Kirkland Ross Murphy & Tapp, the company’s audit firm, is due $31,818.90. There are 389 creditors listed in the filing. Assets and liabilities are both listed as between $1 million and $10 million.

Shells has 23 million shares of common stock outstanding.

Shells was founded in 1986 and, at its peak, had 45 stores throughout Florida and the Midwest. Shells owns 18 restaurants and a partial interest in two additional restaurants, but closed operations at eight locations. The eight closed restaurants are located in Ocala, Winter Park, Orlando, Kissimmee, Winter Haven, St Petersburg, Holmes Beach and Fort Myers.

Four other Shells locations managed and operated by the company, as well as the partially owned and managed “Rock Beach Grill” restaurant, are not included in this petition, the company said in a release.

“The 10 remaining restaurants have the strongest historical performance or the greatest potential for the future. It is our goal to emerge from Chapter 11 as soon as we can with a capital structure and a balance sheet that will allow us to continue to operate,” chief executive officer Marc Bernstein said in a release.

On Aug. 28, Warren Nelson, president and chief financial officer, resigned his position. Nelson had been president since February 2008 and with the company since 1993.

Story Link Is Here.

Burj Dubai Now Tallest Building in the World

How would you like to lease up this baby?

The statistics are almost as spectacular as the view.

This is Burj Dubai and, once again, the editors of the Guinness Book Of Records have got to rewrite the chapter on buildings.

This is not simply the tallest structure in the world; it smashed the tallest-building record a year ago and, this April, it overtook the world's tallest antenna.

Now it has gone one further. As of this week, Burj Dubai - meaning 'Dubai Tower' - has officially become the tallest man-made thing ever.

From its 2,257ft (688m) peak, you do not merely view the entire Gulf state of Dubai. On a good day, you can see 100 miles away into sunny Iran. And the Burj Dubai has not stopped growing.

It already boasts 160 floors and the developer, Emaar, is adding new ones at the rate of around one per week. Its eventual height remains a secret in order to confuse any rival constructors.

'Only a handful of senior designers know the final idea,' says project director Greg Sang, adding that Dubai's ruler, Sheikh Mohammed al-Maktoum, is also in on the plot.

'But I can say that we will be going above 700m.'

When it is finished some time next year, Burj Dubai will accommodate up to 35,000 people in a mixture of hotels, offices and apartments and, doubtless, it will clock up a few more records en route.

For example, the swimming pool on the 76th floor will almost certainly be the highest of its kind in the world.

Visiting the site recently, my initial problem was absorbing the size of the thing without damaging my neck.

The answer was to lie down on the road and look up. There is no scaffolding and all the building work goes upwards from the inside.

Every tool is attached to its user by a lanyard and safety codes are rigidly enforced among all 5,000 construction workers. Thus far, the project has claimed two lives.

New Zealand-born Greg, 42, has built several skyscrapers, including an 88-storey tower in Hong Kong.

The key to this one, he says, is to use tried-and-tested techniques: 'There is no magic, no special invention. With a project like this, it's no time to start experimenting.'

I am afraid I cannot look at this without a bubble appearing over my head containing the words 'Twin Towers'.

But the developers point out that this building is made from heavy-duty concrete, whereas the World Trade Centre, which collapsed after the 9/11 attacks of 2001, was a steel frame.

Extreme: Once completed the tower will surpass 700m

Safety features include reinforced 'refuge rooms' on every 25 floors, complete with independent air supplies, plus extra staircases and luminous paint on all escape routes.

The supporting pillars have been designed with a 'long-wave' effect to absorb any earthquake activity along the Iran/Iraq faultline.

The foundations drop 150ft (46m) below ground and the three-pronged 'footprint' of the building replicates the design of a desert flower.

The first eight floors will consist of a hotel, restaurants, gyms and a nightclub.

Floors nine to 37 will be 'Armani residences' - luxury flats designed by the Italian fashion house.

There are a few more floors of hotel around the 40-storey mark and then floors 42 to 108 will be more apartments.

From 112 to the top will be offices, and Emaar is still open to offers for the top floor (whatever number it may be).

Other features include an observation platform on the 124th floor, while the tallest restaurant in the world will be on the 122nd floor.

And linking the whole lot will be double-decker, 42-man elevators travelling at up to 40mph.

For all the superlatives, Greg acknowledges that, one day, his creation will be overtaken. But when?

Until April, the world's tallest structure was a 2,063ft (629m) television mast in North Dakota, U.S.

Read the Rest Here

Positive Signs in Real Estate Outlook

Mixed feelings about this report. Housing at bottom. OK. Commercial beginning to unravel? Now? I think they're a tad late on this one. Maybe with regard to defaults, but we've seen rents and values steadily decreasing during the past 12 months. So, the only response I have to this is: "huh?"

Positive Signs in Real Estate Outlook

A positive sign has emerged in the U.S. real estate outlook as forecasters project the nation will not fall into an overall economic depression as a result of the housing depression.

Destin, FL (PRWEB) September 2, 2008 -- Despite having few signs of stabilizing, the U.S. housing market won't trigger the national economy to fall into an overall economic depression, providing a rare positive sign in the nation's real estate crisis, according to a new report by Housing Predictor.

The positive news is provided by real estate analysts, who spent more than two months compiling data and pouring over it to determine their findings for the forecast. Housing Predictor forecast the nation's foreclosure epidemic and the housing depression long before either became a reality in the day's headlines.

In fact, the likelihood of a Great Depression occurring like that of 1929 when the stock market crashed and unemployment hit 25% is so remote that analysts aren't even providing a percentage. Signs of an improving housing market are beginning to appear, and should become apparent in 2009 in the majority of housing markets.

Housing Predictor profiles the nation's economy and its study in a new online report. As the majority of housing markets struggle through the worst real estate deflation since the Great Depression, more and more people are turning to Housing Predictor for its forecasts. More than 250 local housing markets are forecast on an annual basis on the web site in all 50 states.

Financial markets all over the world have been severely impacted by the credit crisis, which has sent stock prices to near record lows in many cases and caused the largest increase in U.S. bankruptcies since the early 1990's. The epidemic of foreclosures has topped 3-million units nationwide since the housing crisis started more than a year ago.

Record high housing inflation sent markets to all-time home prices, but many markets have already suffered from deflation as much as 60% in home values from their highs. However, despite the doldrums some rare markets are still experiencing appreciation, which are profiled in Housing Predictor's Top 25 markets.

Some housing markets are beginning to approach their bottoms from an economic point of view as the commercial real estate market begins to unwind with falling values. The crisis in the commercial real estate market is only beginning to unfold.

Read the entire report, check market forecasts and search for foreclosures at http://www.housingpredictor.com.

Binz Building Gets a Little McLovin'

Just wanted to give the Gulf Coast Business Review a hearty "thank you" for running a very nice piece on the Binz Warehouse listing this week. Due to its nature, the Binz building is getting a lot of much-needed media attention. Rightly so, because this is one of the last pre WWII commercial buildings left standing in Sarasota. Just a note, I did object wildly (rather wildly) to having my photo taken (and later begged for it to not be included in the final copy). But they ran it anyway. My fleeting 15 minutes of fame are up this week.

Now, someone just needs to come and buy it!

Another Local Bank Gets Spanked

Mike Braga at the Sarasota Herald's reporting that Community National Bank is teetering under the heavy weight of bad and questionable loans. No one's really sure how many of these institutions are going to go down, but many of us in the industry would prefer this all be over with sooner rather than later. See the link below for the whole article at the Herald.

Another Bank Is Deep Into Trouble

The Office of the Comptroller of the Currency came down hard on Community National Bank of Sarasota in April, declaring it had found "unsafe and unsound banking practices relating to the lending function at the bank."

The OCC, which regulates nationally chartered banks, also stated that Community National is in "troubled condition," and ordered the bank to hire a senior loan officer, shore up its capital and develop a plan to reduce its "high level of credit risk."

The OCC's action came as a surprise to many in the Southwest Florida banking community, who viewed Community National as a sleepy institution that consistently reported high profits despite its relatively small size.

In 2006, for example, Community National ranked No. 89 on American Banker's list of community banks with the highest return on equity. The bank reported returns of 29 percent in 2005 and 28 percent in 2004.

So what happened?

The OCC has not been willing to comment on Community National's condition beyond what it said in its 18-page order, and Charles Graham, the bank's chief executive, did not return calls for comment.

Community National lost $1.5 million in the first two quarters of the year. Its non-current loans totaled $4.9 million as of March 31, and court documents show that it has foreclosed on another $5.6 million in loans during the past five months.

That means that more than 10 percent of Community National's $94 million in loans are in default.

"Once a bank gets over 10 percent, it becomes very difficult to get in front of that without a capital infusion," said Tramm Hudson, a Sarasota bank consultant.

Two other Southwest Florida community banks that faced a similar situation in recent months have responded in different ways. Freedom Bank managed to come up with additional capital and is still operating, while First Priority Bank was forced to shut down.

Problems with real estate

Like these other banks, Community National's problems stem from loans made to builders, developers and speculators during the real estate boom.

The largest loan to go bad was $1.99 million in financing for Venice orthopedic surgeon J. Fred Miller III.

Miller bought commercial land on Jacaranda Boulevard just south of Center Road in 1993 for $950,000 and sold off two parcels in 2005 for $645,000, county court records show. But by 2008, Miller still owned four acres of undeveloped land and owed nearly $2 million to Community National. The bank foreclosed in March and seized the land three months later.

Miller could not be reached for comment.

Jim Walter, an agent with Richardson Kleiber Walter in Venice, said Miller's land had been for sale for at least a dozen years.

"It always seemed a little pricy," Walter said. "Over the last couple of years, land prices went down hard and have not come up."

Another large loan that Community National foreclosed on was made to Venice resident Doug Reddy.

Court records show that Reddy bought a Woodmere at Jacaranda condo unit in December 2005 for $289,900, financing the purchase with a $260,000 loan from Community National. Fifteen months later, Reddy paid off the original mortgage and got a $586,000 replacement.

Community National foreclosed on the loan in February and Reddy transferred the condo to the bank in April in a deed in lieu of foreclosure valued at $117,500.

Read the rest here.

TRIM Notices Are Here...Fight!

Got my trim notices about 10 days ago. My property taxes actually went down across the board (as well as my insurance). Some clients of mine are not so lucky - some are reporting increases in assessed value. According to the Palm Beach Post, the tax assessor's office is preparing for a record number of challenges this year. Story below:

By ALEXANDRA CLOUGH

If you own property in Palm Beach County, chances are you recently received a notice in the mail, explaining how the property appraiser's office valued your property as of Jan. 1, 2008.

And if you're like most people, in years past you might have been in the habit of tossing the notice on top of the pile of other paperwork to be filed.

But not this year.

Owners of both residential and commercial properties are expected to scrutinize their TRIM (Truth In Millage) notices in ways they never have before. These TRIM notices are important because they include a tentative tax notice.

Lower property values mean lower taxes, and that's something of interest to everyone.

Given the precipitous decline of the real estate market, many people will be pleased to see the market and assessed values of their property decline. But others will conclude their property value should be lower than the numbers determined by the country's property appraiser. Experts predict a wave of property value changes by homeowners hoping to cut their taxes.

"The economy is so bad, everybody is counting their dollars," said Jason Sharff, a North Palm Beach entrepreneur who has started a business to help homeowners challenge their property values.

During the go-go days of the recent real estate boom, the values of residences and commercial properties shot up, pushing values to astronomical levels. Taxes based on those higher values zoomed up, too. But since the market began its decline in late 2005, values steadily have fallen.

Not enough for some people, though, especially since the market is, and feels, so much worse than it did at the beginning of the year. Therefore, many property owners are expected to file petitions challenging the values of their homes or businesses.

The property appraiser's office is ready for it. Along with TRIM notices, the appraiser this year also sent out a detailed guide explaining the notice. (Check out the guide at www.co.palm-beach.fl.us/papa/index.htm). For the first time, the county also is allowing property owners to file an on-line petition to challenge values by clicking on the county clerk's Web site, at www.pbcountyclerk.com.

But it's likely most residential property owners won't even need to go that far.

First, "take a deep breath," said Tom Barnhart, director of appraisal services for the Palm Beach County Property Appraiser's office. Then, pick up the phone and call the property appraiser's office. At that point, property appraiser representatives can explain that even though home sales have cratered during the past few months, only the comparable sales pegged by Jan. 1, 2008, count.

"It's that snapshot in time, one day," Barnhart said.

While the property appraiser will consider sales that took place later in the month, it's really the sales from 2007 that help determine a property's value, Barnhart said. Sometimes a property's value can be adjusted if the homeowner provides data that supports a change in the value. Barnhart said the vast majority of challenges are resolved without a hearing, either because the homeowner accepted the appraisal or the appraiser's office received more information about a home that did change its value.

"We're here to work with you," Barnhart said.

If both sides can't agree, however, homeowners can spend $15 and file a petition to challenge their property value and appear before the Value Adjustment Board.

Some people would rather just hand off the process to someone else, however. In that case, there are professionals who can be hired to handle appeals for property owners. Delray Beach real estate attorney Michael Weiner, who handles property tax petitions for clients, predicts a "huge cottage industry" of companies designed to help more property owners challenge their property values.

One of those is Sharff's company, Real Estate Property Tax Fighters (www.reptf.com). Sharff, a 26-year-old armed with a business degree from the University of Florida, said he recently was brain-storming ways to capture business from the real estate downturn.

He came up with the idea of a business that, for a flat fee, will handle property value challenges for residential customers. For $59, he'll handle the paperwork and assemble comparable sales culled from the Multiple Listing Service (MLS) used by real estate agents. Then he'll provide this information to homeowners who can then move forward with their challenges. But for $169, or "the package deal," his company will take the added step of representing homeowners before the Value Adjustment Board.

"It's an intimidating appeals process," Sharff said, explaining why he saw a need for his business. And he thinks many customers signing up for his service just don't want to be bothered with the process, which is why more people are signing on for the $169 service that relieves them of having to make a personal appearance to challenge their property values.

Read the full story here.

Regs to Orion Bank: "Better Get It Together"

Looks like Orion just got slapped by regulators and have been told to straighten up. From the Sarasota Herald Tribune.

By John Hielscher & Michael Braga
STAFF WRITERS

Published: Saturday, August 30, 2008 at 1:00 a.m.
Last Modified: Saturday, August 30, 2008 at 1:09 a.m.

Federal and state banking regulators slapped Orion Bank with a major enforcement action, criticizing its lending practices and oversight by the board of directors.

Naples-based Orion, a major real estate lender in Sarasota and Manatee counties, was ordered to take a number of steps to maintain its "financial soundness."

The Federal Reserve and the Florida Office of Financial Regulation made public on Friday a 15-page "written agreement" with the bank and its parent company, Orion Bancorp Inc.

Orion faces a series of deadlines -- some as soon as next week -- to tighten its loan policies, better monitor its borrowers and charge-off as uncollectible more of its soured loans.

The agreement is one of only 15 such enforcement actions taken by the Federal Reserve against a U.S. bank so far this year.

"The Fed would not have made this public unless they determined it was a serious enough situation for them to do it," said bank analyst Ken Thomas of Miami.

Orion, a nearly $3-billion-asset bank, posted a profit of $8.3 million through mid-year.

It reported $108.9 million in non-current loans and leases as of June 30, up from $5.2 million one year earlier. That represents 5.25 percent of Orion's entire loan portfolio.

A sizable chunk of those bad loans were apparently made in Manatee and Sarasota counties, where the bank operates four branches.

In the past 18 months, Orion has foreclosed on 20 loans totaling $74 million in the two counties.

Sarasota home builder Ron Mustari accounted for $11.3 million of the defaulted loans. Condo converter Warren Hickernell accounted for $11.7 million.

Manatee home builder David Lewis accounted for $1.8 million in bad loans, and Siesta Key developer Jack LeFrock accounted for $1.3 million.

Orion's financial picture could change under the Federal Reserve agreement.

Within 10 days, the bank must eliminate from its books an unidentified amount of assets it now classifies as losses but has yet to charge-off.

The privately owned Orion has long been headed by Jerry J. Williams, who acts as chairman, president and chief executive officer.

Neither he nor his public relations firm returned calls Friday seeking comment.

The 31-year-old bank has been consistently profitable, boasting of industry recognition as a top-performing Florida bank.

The agreement's first order directs the bank to improve the board's oversight of management and operations. Thomas said it is unusual for the board to be cited first thing in such an action.

"It's suggesting that the current board is not strong and needs to be strengthened," he said.

Speaking generally and not about Orion specifically, Thomas said banks whose CEOs are also board chairmen often wind up with rubber-stamp boards and too much power concentrated in one person.

The bank has 90 days to submit a plan to reduce its concentration of commercial real estate loans.

Within 60 days it must revise its loan policies on renewing credit to existing borrowers, and revise its loan-to-value limits to follow federal regulations.

Enforcement actions by federal or state banking regulators are considered serious actions.

First Priority Bank of Bradenton was hit with a "prompt corrective action directive" by the Federal Deposit Insurance Corp. just one month before it became the nation's eighth bank failure of 2008.

Venice-based Community National Bank of Sarasota County entered into a "formal agreement" with the Office of the Comptroller of the Currency in April to toughen its lending operations after the agency discovered "unsafe and unsound" banking practices. Read story here.

Integrity Bank Goes Down

Another one goes down for the count. From Bloomberg.com.

Integrity Bank Becomes 10th U.S. Failure This Year (Update2)

By Alison Vekshin and Ari Levy

Aug. 29 (Bloomberg) -- Integrity Bank of Alpharetta, Georgia, was closed by U.S. regulators today, the 10th bank to collapse this year amid a surge in soured real-estate loans stemming from the worst housing slump since the Great Depression.

Integrity Bank, with $1.1 billion in assets and $974 million in deposits, was shuttered by the Georgia Department of Banking and Finance and the Federal Deposit Insurance Corp. Regions Financial Corp., Alabama's biggest bank, will assume all deposits from Integrity, which was run by Integrity Bancshares Inc. The failed bank's five offices will open on Sept. 2 as branches of Regions, the FDIC said.

``Depositors will continue to be insured with Regions Bank so there is no need for customers to change their banking relationship to retain their deposit insurance,'' the FDIC said.

Banks are being closed at the fastest pace in 14 years as financial companies report more than $505 billion in writedowns and credit losses since 2007. California lender IndyMac Bancorp Inc., which had $32 billion in assets, was closed July 11 in the third-largest bank seizure, contributing to a 14 percent drop in the U.S. deposit insurance fund that had $45.2 billion at the end of the in the second quarter.

Regions will buy about $34.4 million in assets and will pay the FDIC a premium of 1.01 percent to assume the failed bank's deposits, the FDIC said. The FDIC estimates the cost of the Integrity failure to its deposit-insurance fund will be $250 million to $300 million.

Told to Raise Capital

Integrity was ordered by federal and state regulators in May to present a capital-raising plan within 60 days. At the time, the company had been trying without success for at least eight months to raise $40 million after loans to residential and commercial developers were hurt by the collapse of the real estate market.

``Banks must meet certain regulatory minimums to ensure safety and soundness,'' Georgia bank commissioner Rob Braswell said in a telephone interview. ``When those minimums are not able to be met and solvency is in jeopardy, we have no choice but to close the institution and to place it into receivership.''

Integrity Bancshares, which sold for more than $14 a share in January 2007, closed today at 4 cents in over-the-counter trading.

The FDIC insures deposits of up to $100,000 per depositor per bank, and up to $250,000 for some retirement accounts at 8,451 institutions with $13.3 trillion in assets.

`Problem' Banks

The FDIC this week said 117 banks are classified as ``problem'' in the second quarter, a 30 percent jump from the first quarter. The agency doesn't identify ``problem'' lenders.

``More banks will come on the list as credit problems worsen,'' FDIC Chairman Sheila Bair said at an Aug. 26 Washington news conference.

The credit market turmoil may topple some of the nation's biggest banks, Kenneth Rogoff, former chief economist at the International Monetary Fund, said in Singapore Aug. 19.

``Like any shrinking industries, we are going to see the exit of some major players,'' Rogoff told Bloomberg, declining to name the banks he expects to fail. ``We're really going to see a consolidation even among the major investment banks.''

Before today's action, the FDIC had closed 36 banks since October 2000, according to a list at fdic.gov. The U.S. shut 11 banks in 2002, the highest in the period. In 1994 the government had closed a dozen institutions by the end of August.

U.S. regulators this year also closed Columbian Bank and Trust of Topeka, Kansas, on Aug. 22; First Priority Bank of Bradenton, Florida, on Aug. 1; Reno-based First National Bank of Nevada and Newport Beach, California-based First Heritage Bank in July; Staples, Minnesota-based First Integrity Bank and ANB Financial in Bentonville, Arkansas, in May; Hume Bank in Hume, Missouri, in March; and Douglass National Bank in Kansas City, Missouri, in January.

Economy Has Some Businesses Facing Eviction Notice

I don't think there's a statistic for the amount of commercial evictions occurring locally, but I would bet the Sarasota/Manatee market is similar to that of Miami/Dade's. It's a tough time to start a business, and just as tough to keep the lights on when your customers are cutting back on spending. Unfortunately, I think we're going to see more of the same. It's certainly as trying of a time for landlords as it is for tenants. A lot of people I talk to are very tentative about expansion and many landlords are equally worried that even good credit tenants may leave. The domino effect this has is pronounced. The good part is there are landlords out there who will attempt to work with their tenants in this market (see story below).

From Daily Business Review, by Polyana da Costa

When the owners of Tiger Allie, a Boca Raton children’s clothing store, signed a retail lease in 1997, they likely never imagined the financial and legal woes they’d face.

More than 10 years later, they are at least five months behind on their rent, a sign advertising a liquidation sale is on the door and a lawsuit seeking the store’s eviction is pending.

When Tamarac Fortune Partnership, which owns a three-story office building on University Drive in Tamarac, leased an entire floor to a group of businesses in the medical field in late 2006, the landlord had no inkling the tenants would default on the five-year lease. In July, however, the partnership sued to evict the businesses, which it says defaulted on lease payments beginning in April.

And at Boca Raton’s tony Mizner Park, at least two stores, an art gallery and an antique shop, have fallen behind in payments, according to eviction lawsuits filed against those stores.

As the economy flirts with recession, these and hundreds of other small South Florida businesses — including medical offices, art galleries and clothing stores — are struggling to keep pace with their rents. Increasingly, they’re failing. That means a sharp uptick in evictions, a boost in work for real estate lawyers and greater strains on the legal system.

The volume of all evictions filed in Miami-Dade, Broward and Palm Beach counties is up an average of 10 percent compared to last year, according to the clerk’s offices in each jurisdiction.

For example, June was a record month for lawsuits seeking evictions in Palm Beach County — 1,076 were filed compared with 877 in the same month last year. (The figures include residential evictions since the clerk’s office does not track separate actions against commercial tenants.)

Most store owners facing eviction lawsuits don’t want to comment. Representatives of Tiger Allie, the Boca Raton clothing store facing eviction, did not return a phone call.

The suits seeking evictions represent only a small number of commercial tenants who’ve fallen behind on their rents. Many landlords are choosing to work out deals with struggling tenants, said John Scott, director of client solutions at Cushman & Wakefield.

Scott said the company, which manages about 10 million square feet of office, warehouse and retail space, has not seen a mass of evictions at its properties. It has helped its landlords work with tenants who are financially strapped. The options have included lowering tenants’ rents for a period of time and rolling over the shortfall to the end of the lease, he said.

“Landlords aren’t just looking to eliminate their tenants,” he said. “The market is not as strong as it was a couple years ago. It’s hard to replace a tenant in this market. Our brokers have been working harder than ever.”

Read the rest of the story (Registration Required)
Copyright 2008, Daily Business Review

Interest Rates Likely to Increase at Next Fed Meeting

Not sure how much this matters to many because so few are able to borrow right now (at the soon-to-be-previous rates, that is). This may help wake lenders out of their current funk, that's at least one possibility. We shall see.

Aug. 26 (Bloomberg) -- Federal Reserve officials agreed at their meeting this month that their next move in interest rates will be to raise them, while reaching no conclusion on the timing of such a decision, records of the gathering show.

``Although members generally anticipated that the next policy move would likely be a tightening, the timing and extent of any change in policy stance would depend on evolving economic and financial developments,'' according to minutes of the Aug. 5 Federal Open Market Committee meeting released in Washington.

The minutes today show a debate over the magnitude of the inflation threat, with two groups of officials making different judgments on the impact of the recent slide in commodity prices. Policy makers also diverged on whether financial turmoil continues to pose the risk of a more severe credit crunch.

The Fed left its benchmark lending rate unchanged at 2 percent for the second straight meeting on Aug. 5. At the time, traders estimated a 31 percent chance of at least a quarter- point increase by the end of the year, futures prices show. Now, that probability is 22 percent.

``There is a big split on the FOMC, no doubt about that,'' said Lyle Gramley, a former Fed governor and senior economic adviser at Stanford Group Co. in Washington. ``We know there is a severe credit crunch, but it is difficult outside the housing market to pin down how much impact it is having on the economy.''

Read More At Bloomberg