SUMMER RECESS – A BIG SIGH OF RELEIF!

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

The California State Legislature met the Second House Policy Committee deadline, voted on hundreds of bills in a flurry of activity, and then…  adjourned for their monthlong Summer Recess.  And a sigh of relief could be heard throughout the land.

With Summer Recess, now is a good time to review the 2017 Legislative Session so far.  Since January, 2,904 legislative bills have been introduced, 968 from the Senate and 1,936 from the Assembly.  We read every one of them – and all of their amended versions.  Of those bills we have tracked a total of 416.  Of those, 217 are still “alive” in the process.  That is a lot of potential law still out there and needing input from our industry!

The bills we track are deemed to have some impact on the commercial, industrial, and retail real estate industry and before we oppose bills, we try to work with authors to fix language in order to remove concerns.

It’s a full-time legislature and tracking what they do takes a lot of time energy and effort. So we are grateful for this Summer Recess as a little break in the action allows us to catch up and get prepared for the Dog Days of August and September when the final sprint begins!

WEEKLY ON HIATUS

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

With all that, due to the Summer Recess, this Weekly eNewsletter will be on hiatus, returning on Friday, August 25.  But don’t worry; your Sacramento staff will be here keeping an eye on the Capitol and if anything exciting happens we will make sure you know about it.

ADA BILL SIGNED BY THE GOVERNOR

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

A bill our industry strongly supports that would continue the State’s reform of ADA laws in an effort to increase accessibility while decreasing frivolous lawsuits passed the Legislature on a bipartisan vote has been signed by Governor Brown.

AB 1148 (Steinorth; R-Rancho Cucamonga) passed its final vote in the Assembly 62-0 and went to the Governor two weeks ago. Click here to read the law.

The new law clarifies issues related to CASp inspection lease disclosures by defining the types of properties that must disclose. Basically, all properties are leased as a “public accommodation” must comply but certain properties that are not generally open to the public will be exempt.

We thank Governor Brown for signing this legislation as it will clear up an issue in law that was unclear and not working as it was intended.

NEWHALL RANCH RE-APPROVED BY STATE

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

After project proponents worked for decades to deal with myriad of environmental issues, the Newhall Ranch development in the Santa Clarita Valley in northeast Los Angeles, cleared its last major hurdle. L.A. County Supervisors certified a revised environmental analysis and approved two of Newhall’s five planned subdivisions.

“On the whole, this is a well thought-out project that will bring needed housing supply while ensuring that environmental resources are being protected,” said Supervisor Kathryn Barger, whose L.A. County supervisorial district includes Newhall Ranch, in the City of Valencia.
The project is bringing much needed housing and jobs to the area, but has been the target of a succession of complaints let by environmental groups that don’s want to see any type of development at all on much of this property.

According to the L.A. Times, 200 people showed up at Tuesday’s meeting to support the development, many wearing “Yes to Net-Zero Newhall” stickers.

Newhall Ranch was first proposed in 1994 and was supposed to break ground in 1998. Almost 19 years later, after many political and legal delays, and drastic changes in the project to make it extremely environmentally friendly, the project appears “a go.”

CBPA is proud to have FivePoint as a longstanding member and to have Greg McWilliams, FivePoint’s Regional President Southern California, as our Chair. They are helping lead the way with this project to show how environmentally friendly development on a large scale can be successful. Click here to read more about Net Zero Newhall.

Click here to read the full story about Newhall Ranch’s approval.

 

 

 

LA COUNTY PROPERTY TAXES ARE GOING UP AGAIN

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

Property taxes will rise again in Los Angeles County, thanks to a brisk real estate market and construction boom. The assessed value of all taxable property in the county jumped by 6.03 percent in 2017, which was slightly higher than last year, figures released Thursday show.  Thankfully, Proposition 13 is still in place and acting as a mitigating factor to double digit increases.  Click here to read a story in the Los Angeles Daily News with more detail.

CLIMATE-SAFE INFRASTRUCTURE WORKING GROUP

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

California Natural Resources Secretary John Laird today announced the appointment of 14 leaders in state climate science and infrastructure design to the Climate-Safe Infrastructure Working Group. The purpose for the group is to further the State’s continued efforts to address the effects of climate change on the built environment.

 “I am proud to announce the appointees of the Climate-Safe Infrastructure Working Group,” stated Secretary Laird in a press release from his office. “These dedicated professionals, with expertise in engineering, science, and policy will provide science-based recommendations to California decision-makers to enable the best infrastructural investment strategies for the state.  As changes to the environment continue to affect the public, the establishment of this Working Group reveals California’s ongoing leadership in climate adaptation.”

Through its deliberations, the working group will investigate: Current informational and institutional barriers to integrating projected climate change impacts into state infrastructure design; Critical information that engineers responsible for infrastructure design and construction need to address climate change impacts; How to select an appropriate engineering design for a range of future climate scenarios as related to infrastructure planning and investment.

Click here for more information and a list of the academics and state agency personnel serving on the workgroup.

BORDER-ADJUSTMENT TAX OPPOSED BY INDUSTRY

Posted: July 27, 2017 | Posted by Crystal Whitfield | No Comments

David Bahr, Communications Manager for R-Street has penned an op/ed explaining how the Border-Adjustment Tax would add nearly $2B to the cost of property insurance in California:

“As the nation’s most populous state, among the wealthiest states and a state that is vulnerable to the catastrophic effect of earthquakes, floods, wildfires and other natural catastrophes, California relies heavily on insurance to manage its significant risk. As Congress prepares to consider structural changes to the U.S. tax code, a new R Street Institute policy study warns that making it more difficult for insurers to buy international reinsurance will have adverse consequences on Californians’ ability to obtain coverage affordably.

“Applying a destination-based cash flow tax—better known as a “border-adjustment tax,” or BAT—to the import of reinsurance will, authors Lars Powell, Ian Adams and R.J. Lehmann note, cost California consumers an additional $1.91 billion in higher property-casualty insurance premiums over the next decade….”

Click here to read the rest of the story.

SACRAMENTO TOTALLY FOCUSED ON CAP AND TRADE

Posted: July 14, 2017 | Posted by Crystal Whitfield | No Comments

Governor Jerry Brown spent five hours in a committee testifying about his proposal to extend California’s Cap-and-Trade program to the year 2030.  This is unheard of and showed the Governor’s commitment to the issue as he had to sit through several hours of public testimony for and against the proposal.

Both bills, AB 617 by Assemblymembers Cristina Garcia (D-Bell Gardens), Eduardo Garcia (D-Coachella) and Miguel Santiago (D-Los Angeles) and AB 398 by Assemblymember Eduardo Garcia (D-Coachella), passed out of committee on a party line vote.

At the hearing, the Governor adamantly advocated for his GHG reduction plan, stating at one point, “We’re not going to pull back — the only question is how to go forward.  Are we going to do that by an extensive, massive, intrusive regulatory burden that will be three to five times more expensive? That is not the way to go.”

According to the Governor’s Office, the legislative package will “launch a landmark program to measure and combat air pollution at the neighborhood level, in communities most impacted, and extend and improve the state’s world-leading cap-and-trade program to ensure California continues to meet its ambitious climate change goals.”

Initially, a vote was scheduled for yesterday on the package, but strong opposition from the far-Left, led by environmental groups that do not want to see any market-based programs and by Environmental Justice groups that want to see more resources directed to certain neighborhoods, has stalled the vote.  Rumor is that amendments are being crafted to both bills now.

Additionally, it is being reported that some legislators are stating they will not vote for the Cap-and-Trade bills unless a package of bills addressing the Affordable Housing crisis in California is also put together (more on this to follow).

So, negotiations are still seemingly fluid and at this point not many people are willing to place a bet on what happens.

Here is a good news account about the craziness that’s happening on this topic right now. Click here to read the full article.

AIR QUALITY ISSUE MIXED UP IN CAP-AND-TRADE NEGOTIATIONS

Posted: July 14, 2017 | Posted by Crystal Whitfield | No Comments

After several weeks of working closely with our supply chain partners/members as part of the Goods Movement Coalition on cap-and-trade issues, we are happy to report that they have successfully been able to keep an issue out of the discussion.

AB 617, noted above, is the follow-on bill dealing with Air Quality issues above and beyond Cap-and-Trade reauthorization.  It is this bill that has made us the most nervous, as there have been some indications it potentially would carry language pertaining to a new Indirect Source Review (ISR) rule which could wreak havoc on the supply chain and regulate individual buildings as well as discrete neighborhood areas, in a manner that could stop building and/or growth of existing facilities.

After reviewing the final language in the measure, and receiving feedback from many of our members we believe the language is as good as it is going to get and has no specific ISR authorization.

Here is the official statement from the Goods Movement Coalition on AB 617 (C. Garcia, E. Garcia, Santiago):

For years, the goods movement industry has worked in partnership with the administration, the Air Resources Board, and local air districts on emission reduction measures that balance emission reductions, efficiency and jobs and will continue to do so. 

In recognition that Cap and Trade is such an important piece of the State’s GHG policy, we are neutral on Sec. 8 of the July 10th draft of AB 617 but would have concerns with any further amendments which tip the delicate balance between further emission reductions, efficiency and jobs. 

We remain vigilant and are watching closely to make sure the language does not get changed in a manner that backslides on our hard work.

REAL ESTATE DOCUMENT TAX A POISON BILL FOR AFFORDABLE HOUSING DEAL

Posted: July 14, 2017 | Posted by Crystal Whitfield | No Comments

As we reported last week, the SB 2 (Atkins; D-San Diego), a bill that will authorize a tax on almost every recorded real estate document, was brought up with no notice and passed with all Democrat Senators voting for the new tax, lobbing the bill over to the Assembly.  Less than a week later the bill was heard in the Housing Committee and passed on a party line vote.

Now, as tense negotiations are happening on reauthorization of California’s Cap-and-Trade program, it is reported that several progressive members of the Legislature are pushing to have this bill be on the table as part of any a final deal on Cap-and-Trade.

How taxing our documents has anything to do with greenhouse gas trading markets is a bit baffling, but hey, its Sacramento.

However, if the legislature does want to connect the two issues, we believe there is an easy path forward as there are a list of 10-15 bills that would make sense to consider and adopt – but SB 2 is not one of them.  And we believe that inclusion of SB 2 would be a poison bill that would make any such deal unsuccessful.

In order to move the bill forward, it has been amended to exempt building sales but keep every day document recording, which makes the bill an incredibly regressive tax.  Our position has long been, apply the tax to all transactions in a smaller amount, but the bill has actually been changed to move away from that.

According to the Senate Appropriations committee analysis, this bill will result in a $200 million to $300 million tax on commercial and residential property owners and tenants.  These funds will be redirected to a number of government programs at the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA) focusing on affordable housing.

While we are sympathetic to the need for more affordable housing, and support many policies that will actually produce rooftops by addressing the underlying issues that are real impediments to building housing.

We are asking that if SB 2 were to move forward, it be amended to focus on Governor Brown’s stated goals to address affordable housing of cutting red tape, delays, and unnecessary expenses to housing construction that would make housing more affordable to all Californians.  We also call on the legislature to address the thicket of environmental law known as CEQA which quashes many projects through cost and delays and unnecessary lawsuits, before a shovel is ever put in the ground.

If more funds are needed, our industry is willing to accept a new tax as long as it is applied evenly, fairly, and transparently across the board and is accompanied by some of the reforms supported by Governor Brown.

California needs more housing.  But simply creating a new tax and new government programs is not going to produce rooftops as it does not address the impediments to building more housing.

Hopefully a package of bills will move forward that addresses the affordable housing crisis.  This bill, however, should not be one of them.

BORDER-ADJUSTMENT TAX OPPOSED BY INDUSTRY

Posted: July 14, 2017 | Posted by Crystal Whitfield | No Comments

David Bahr, Communications Manager for R-Street has penned an op/ed explaining how the Border-Adjustment Tax would add nearly $2B to the cost of property insurance in California:

“As the nation’s most populous state, among the wealthiest states and a state that is vulnerable to the catastrophic effect of earthquakes, floods, wildfires and other natural catastrophes, California relies heavily on insurance to manage its significant risk. As Congress prepares to consider structural changes to the U.S. tax code, a new R Street Institute policy study warns that making it more difficult for insurers to buy international reinsurance will have adverse consequences on Californians’ ability to obtain coverage affordably”.

“Applying a destination-based cash flow tax—better known as a “border-adjustment tax,” or BAT—to the import of reinsurance will, authors Lars Powell, Ian Adams and R.J. Lehmann note, cost California consumers an additional $1.91 billion in higher property-casualty insurance premiums over the next decade….”

Click here to read the rest of the story.

****ALERT*** SENATE ABRUPTLY PASSES REAL ESTATE DOCUMENT TAX

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

After stalling a few weeks ago for lack of the needed two-thirds vote majority, a bill that will authorize a tax on almost every recorded real estate document, was brought up with no notice and passed with all Democrat Senators voting for the new tax.

SB 2 (Atkins; D-San Diego) authorizes a county to adopt an ordinance authorizing a fee for recording and indexing every instrument, paper, or notice required or permitted by law to be recorded.

According to the Senate Appropriations committee analysis, this bill will result in a $200 million to $300 million tax on commercial and residential property owners and tenants.  These funds will be redirected to a number of government programs at the Department of Housing and Community Development (HCD) and the California Housing Finance Agency (CalHFA) focusing on affordable housing.

Yes, upwards of a $300 million-dollar tax on real estate documents paid by you and your tenants.

While we are sympathetic to the need for more affordable housing, and support many policies that will actually produce rooftops, we disagree with the way this bill is written.

According to the County Recorders’ Association of California, this bill increases the minimum recording fee by 750% (i.e. from $10 to $75), which will impact small contractors recording mechanics liens or releases, customers releasing child support, tax or other liens to clear their credit; or a widow/widower recording an affidavit of their spouse’s death; building managers filing lease addendums, and many other recorded documents.

Further, this bill creates administrative challenges for County Recorders.  The Inyo County Board of Supervisors argue that by exempting sales documents, this bill singles out those facing foreclosure and miners who are required to file annual proof of labor forms to keep their claims, but exempts the purchase of multi-million dollar homes.

As an example, in order to address vocal opposition, this bill exempts certain transaction from the tax – if you buy a two million dollar home you don’t pay the tax; but if you record a simple lease addendum you do.

We are asking that SB 2 be amended to focus on Governor Brown’s stated goals to address affordable housing of cutting red tape, delays, and unnecessary expenses to housing construction that would make housing more affordable to all Californians.  We also call on the legislature to address the thicket of environmental law known as CEQA which quashes many projects through cost and delays and unnecessary lawsuits, before a shovel is ever put in the ground.

If more funds are needed, our industry is willing to accept a new tax as long as it is applied evenly, fairly, and transparently across the board and is accompanied by some of the reforms supported by Governor Brown.

California needs more housing.  But simply creating a new tax and new government programs is not going to produce rooftops as it does not address the impediments to building more housing.

This bill may be heard as early as Monday in the Assembly and we will keep you posted.

MAJOR LEGISLATIVE DEADLINE APPROACHES

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

Our friends at CapitolTrack remind us that the next legislative deadline falls on July 14th and it requires all policy committees to pass fiscal bills on to their Appropriations Committees. With the Budget already enacted, the legislature is on schedule to adjourn for summer recess on July 21st.

The next two weeks are going to be intense as many big issues including Cap-and-Trade and the Real Estate Document Tax may be taken up.

WATER BILL SAVINGS ACT

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

Our industry supports SB 564 (D-Healdsberg) a bill that allows local agencies to issue bonds to fund the purchase and distribution of drought tolerant landscapes, upgrades to hot water systems, gray water systems, high efficiency toilets, and high efficiency showerheads at private property within their jurisdictions.

SB 564 authorizes property owners and tenants to then repay the fixture upgrades over time through utility bills.  The ability to repay bonds with customer efficiency charges enables those who receive the benefit of reduced bills to pay for efficiency and create benefits to the water system at scale.

The Water Bill Savings Act is a voluntary program and will create another tool for local governments and property owners to respond to drought that is regionally efficient, financially sustainable, and available to all municipal utilities, large and small.

SB 564 will help people save money on water while reducing wasted water and provide a voluntary tool to meet state conservation mandate.

ADA BILL HEADS TO GOVERNOR

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

A bill our industry is strongly supporting that would continue the State’s reform of ADA laws in an effort to increase accessibility while decreasing frivolous lawsuits passed the Legislature on a bipartisan vote and is headed to the Governor’s Desk.

AB 1148 (Steinorth; R-Rancho Cucamonga) passed its final vote in the Assembly 62-0. AB 1148 would clarify issues related to CASp inspection lease disclosures by defining the types of properties that must disclose. Basically, all properties that will be leased as a public accommodation must comply but certain properties that are not open to the public will be exempt.

We will ask the Governor to sign the bill and will keep you posted.

CA SUPREME COURT UPHOLDS DOCUMENTARY TRANSFER TAX

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

The California Supreme Court, in a 6-1 decision, has held that a city or county may impose documentary transfer tax on the transfer of the ownership interests in a legal entity that owns real property located in the locality. In 926 North Ardmore Avenue, LLC v. County of Los Angeles,the court held that the documentary transfer tax applies to a written instrument conveying an interest in a legal entity that owns real property. This approach adopts the “change in ownership” regime for property tax purposes and applies it to the documentary transfer tax.

Click here to read more about the decision, and how it may impact your tax obligations.

SB 700 ENERGY STORAGE INITIATIVE

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

We are in support of SB 700 (Wiener; D-San Francisco) a bill that will establish a statewide system of rebate programs to subsidize the cost of installation of customer-sited energy storage.

SB 700 would authorize the Investor Owned Utilities to collect revenue for the Self-Generation Incentive Program (SGIP) for the ten-year period (2018-2027) to incentivize the installation of small-scale energy storage which will complement the increasing amount of renewable energy coming on-line.

The power output of standard rooftop solar energy systems is the greatest between the hours of 10am to 3pm.  However, as the state moves towards Time-of-Use utility rates, the renewable energy produced during the middle of the day will be at the cheapest rate when demand for power is low while power used during the late-afternoon and early-evening will be at the highest rate when demand for power surges.

Complementing the installation of distributed renewable energy systems with on-site or near-site energy storage systems will provide significant cost savings to the utility customer while offering the added benefit of providing for improved grid harmonization.

SB 700 will help provide incentive funding to encourage the installation of these much needed energy storage systems.

This bill will be heard next week and we will keep you posted on its progress.

Click here for a recent op/ed on how this bill will enable property owners to use this technology to better meet energy and ghg requirements.

GOVERNOR BROWN ANNOUNCES GLOBAL CLIMATE ACTION SUMMIT

Posted: July 7, 2017 | Posted by Crystal Whitfield | No Comments

California Governor Edmund G. Brown Jr. announced via video message at the Global Citizen Festival in Hamburg, Germany that the State of California will convene the world’s climate leaders in San Francisco, California in September 2018 for the Global Climate Action Summit.

According to a press release from the Governor he stated, “It’s up to you and it’s up to me and tens of millions of other people to get it together to roll back the forces of carbonization and join together to combat the existential threat of climate change. That is why we’re having the Climate Action Summit in San Francisco, September 2018,” said Governor Brown in his remarks. “President Trump is trying to get out of the Paris Agreement, but he doesn’t speak for the rest of America. We in California and in states all across America believe it’s time to act, it’s time to join together and that’s why at this Climate Action Summit we’re going to get it done.”

The press release goes on to state, “California will convene representatives from subnational governments, businesses, investors and civil society at the Global Climate Action Summit to demonstrate the groundswell of innovative, ambitious climate action from leaders around the world, highlight the economic and environmental transition already underway and spur deeper commitment from all parties, including national governments.”

Click here for the full statement.

HAPPY FOURTH OF JULY

Posted: June 30, 2017 | Posted by Crystal Whitfield | No Comments

“Freedom is never more than one generation away from extinction. We didn’t pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same.” — President Ronald Reagan

What started out as a celebration to mark our young nation’s independence from England more than 200 years ago, has evolved into a national holiday that celebrates the American spirit and our nation’s independent and powerful leadership in the world. Our nation was founded by recognizing a person’s inherent rights and responsibilities. We were founded on the principles of equality, religious tolerance, and opportunity. These beliefs have been challenged many times over the years, but have always been defended by men and women willing to protect these principles, sometimes by risking the ultimate sacrifice.

As you celebrate this year take a moment to reflect on the unique and great nature of this country and to thank those who have given their lives to defend our way of life, as well as the current men and women in uniform in harm’s way. Because we have the freedom to do so, we sometimes get lost in the details of whatever societal argument we are currently in and a day like the 4th of July provides a good opportunity to spend time with family and friends, enjoy our freedoms, and reflect on what a truly great nation we live in.

ASSEMBLYMEMBER COOPER STATEMENT ON SINGLE PAYER THREATS

Posted: June 30, 2017 | Posted by Crystal Whitfield | No Comments

The following is a press release by Assemblymember Jim Cooper (D-Elk Grove) on recent threats of violence aimed at legislators.  The irony of the Reagan quote above and the fact that our politics has taken such a violent turn recently is not lost on us.  We are running the statement in full as we believe its importance cannot be understated:

Assemblymember Jim Cooper Issues Statement on Adverse Reactions on Single Payer Healthcare Legislation

Sacramento – Assemblymember Jim Cooper (D-Elk Grove) released the following statement in response to recent provocations surrounding SB 562 and single payer healthcare:

“I would like to express my deepest condemnation of the cowardly acts being provoked by the proponents of single payer healthcare. As a 33-year law enforcement officer, I have seen first-hand how threats impact victims and their families. It is never justifiable to incite violence and threaten the lives of an elected official, their family, or any person.

No matter how just the cause, any person that condones violence, stands in complete disdain of our democracy and the principles that we as Americans and Californians will soon be celebrating on our nation’s day of Independence.

I am extremely disappointed and saddened that those who support an admirable cause have resorted to reckless, irresponsible and completely inexcusable actions to voice their opposition to a decision made by a leader in our state. I stand in strong solidarity with my colleague, Speaker Rendon’s decision to hold the single payer healthcare bill pending further work and discussion. He did so to address many serious issues, such as financing, delivery of care, cost controls, and the realities that the bill was immensely incomplete.

I call on the proponents of single payer healthcare to immediately denounce the violence and threats to members of the Legislature and their families.”

Assemblymember Cooper represents the Cities of Sacramento, Elk Grove, Galt, and Lodi.

THE GRAVE ISSUE OF INCREASING PROPERTY TAX REVENUE

Posted: June 30, 2017 | Posted by Crystal Whitfield | No Comments

Our good friend Joel Fox, Editor of Fox and Hounds Daily, has penned another great article about Proposition 13 and the political dynamics of property taxes.

 “My fellow Baby Boomers and I can help raise tax revenue for schools and local governments—all we have to do is die. That’s the message I got from this Bloomberg News headline: Boomers Nearing End of Life Seen Helping California Tax Revenue.

The news story reports on a brief issued by the Legislative Analyst’s Office that examines how aging baby boomers die or move to smaller quarters freeing homes around the state for new buyers. Under the Proposition 13 tax system, the property tax cap comes off when a home is sold and taxes are set at one-percent of the new market value established by the purchase price. Given the increase in home values over the years, the LAO predicts such activity would provide a significant boost to property tax revenue.”

Click here to read the rest of the op/ed.

VACANCIES AND RENTS UP AT MALLS

Posted: June 30, 2017 | Posted by Crystal Whitfield | No Comments

Our friends at ICSC report that “the national retail vacancy rate rose to 10 percent in the second quarter, from 9.9 percent in the first quarter, according to real estate research firm Reis. The mall vacancy rate grew slightly, by 0.2 percent, to 8.1 percent in the quarter from the previous quarter, Reis said in its quarterly report. Net absorption, which is measured in terms of available retail space sold in the market during a certain time period, fell to 421,000 square feet in the quarter, from 2 million square feet in the first quarter, the lowest level since 2011. A spate of store closings by chains such as Payless Shoe Source and Macy’s drove the trend. Meanwhile, national asking rents grew by 0.4 percent to $20.64 per square foot, and effective rents increased by 0.4 percent from the first quarter, according to the report.”

AB 1553 WILL PROVIDE HELP WITH ADA UPGRADES

Posted: June 30, 2017 | Posted by Crystal Whitfield | No Comments

We are in support of AB 1553 (Cervantes; D-Riverside) a bill that makes changes to the Capital Access Program for Small Business to enable more businesses can access funding to make their properties into compliance with ADA codes. This bill authorizes the use of moneys in the California Americans with Disabilities Act Small Business Capital Access Loan Program (ADA program) fund for payments to borrowers to provide incentives to participate in the ADA program, which will enable more properties to make upgrades.

AB 1553 would also expand the definition of eligible applicants for this program to include those with less than $5 million in total gross annual income, assuring that more small businesses will benefit and even more properties will become compliant.

This bill will be heard next week and we will keep you posted on its progress.

SB 700 ENERGY STORAGE INITIATIVE

Posted: June 30, 2017 | Posted by Crystal Whitfield | No Comments

We are in support of SB 700 (Wiener; D-San Francisco) a bill that will establish a statewide system of rebate programs to subsidize the cost of installation of customer-sited energy storage.

SB 700 would authorize the Investor Owned Utilities to collect revenue for the Self-Generation Incentive Program (SGIP) for the ten-year period (2018-2027) to incentivize the installation of small-scale energy storage which will complement the increasing amount of renewable energy coming on-line.

The power output of standard rooftop solar energy systems is the greatest between the hours of 10am to 3pm.  However, as the state moves towards Time-of-Use utility rates, the renewable energy produced during the middle of the day will be at the cheapest rate when demand for power is low while power used during the late-afternoon and early-evening will be at the highest rate when demand for power surges.

Complementing the installation of distributed renewable energy systems with on-site or near-site energy storage systems will provide significant cost savings to the utility customer while offering the added benefit of providing for improved grid harmonization.

SB 700 will help provide incentive funding to encourage the installation of these much needed energy storage systems.

This bill will be heard next week and we will keep you posted on its progress.

AB 943 WILL PROVIDE MORE HOUSING

Posted: June 23, 2017 | Posted by Crystal Whitfield | No Comments

We support AB 943 (Santiago; D-Los Angeles) a bill that will increase the vote threshold for approval of local initiatives intended to curb, delay, or deter growth and development throughout California, which may exacerbate the state’s affordable housing crisis.

AB 943 requires any ordinance proposed by the voters of a city, county, or city and county, submitted to the voters, that would reduce density or stop development or construction on any parcels located less than one mile from a major transit stop, only be enacted with 55% or more of the votes cast.

By enacting this policy, AB 943 will ensure that special interest groups do not unfairly hinder the development of new housing projects, while appropriately balancing and respecting local preferences.  Bottom line is that AB 943 will reduce unnecessary barriers to creating transit-friendly new housing and help address the state’s affordable housing crisis.

In order to address the housing crisis in California we must build more residences.  Collecting more tax money that just gets lost in the current thicket of anti-development policies is not a solution.  Helping projects overcome unnecessary burdens, like AB 943, will produce more – and less expensive – rooftops.  The bill is currently awaiting hearing in the Senate Governance and Finance committee.

AB 890 COULD REDUCE DEVELOPMENT

Posted: June 23, 2017 | Posted by Crystal Whitfield | No Comments

And in a related measure, we oppose AB 890 (Medina; D-Riverside) a measure that would force local governments to hold costly special elections for all local land use-related initiatives and prohibit local elected officials from adopting planning, zoning and other land use or development

proposals legislatively if they have qualified for the ballot. This prohibition will cost local governments millions of dollars.

AB 890 ignores other important environmental requirements for projects. A housing or commercial development project, for example, passed by initiative, would still be required to undergo extensive environmental permitting and to comply with the full suite of local, state and federal environmental laws including the Clean Air Acts, the Clean Water Acts, the Endangered Species Acts, Hazardous Waste laws, etc.

Government by initiative can be messy, and the system itself can always be improved. But AB 890 proposes a radical path: removing voters utterly from their historic role in proposing laws as a backstop to the local legislative process. Nothing could be further from California’s political culture.

The bill has not yet been assigned to committee in the Senate, but we will keep you posted on its progress.

SB 772 EXEMPTS CAL/OSHA FROM ECONOMIC IMPACT ANALYSES

Posted: June 23, 2017 | Posted by Crystal Whitfield | No Comments

As part of a CalChamber led business coalition, our industry is strongly opposing a SB 772 (Leyva; D-Chino) a bill that could increase Cal/OSHA costs for employers.  The bill reduces transparency, removes accountability, and runs contrary to California’s commitment to good governance by exempting Cal/OSHA from a rulemaking process applied to major regulations impacting the economy by more than $50 million to make sure that state agencies consider the economic impact their proposals will have on employers. SB 617 was enacted in 2011 and was sponsored by CBPA.

The standard rulemaking process requires conducting a Standardized Regulatory Impact Assessment (SRIA) for the most significant regulations (those having an economic impact greater than $50 million).

Because SB 772 allows Cal/OSHA to impose unnecessary burdens on California’s businesses, investors, and innovators without regard to the impact on the economy and without considering less costly alternatives, the CalChamber and a large coalition are opposing the legislation.

All California’s agencies conduct important work that protects and provides for the public, and all are held accountable to the people by conducting the SRIA. Cal/OSHA’s process is not different and does not warrant a special exemption. SB 772 excuses Cal/OSHA from this important analysis, allowing regulations having a significant impact on the economy to avoid the close scrutiny that would reveal their true costs and any unintended consequences.

The bill passed the Assembly Labor and Employment Committee yesterday on a party line 5-2 vote and next moves to the Assembly Appropriations committee, where we will continue to oppose the measure.

PROP 13 SPLIT-ROLL TAX – THE ECONOMIC CONSEQUENCES

Posted: June 23, 2017 | Posted by Crystal Whitfield | No Comments

Our superstar government affairs duo at BOMA San Francisco, Ken Cleaveland and John Bozeman, penned an op/ed for the Bay City Beacon to counter the call for a split-roll tax on commercial properties.

Many people wonder what they can do to help fight split roll.  This is a good example.  Take the information that we have provided and localize it and get a local paper and/or blog to run it.

A big “thank you” on behalf of the industry to Ken and John for taking the initiative and getting this great article out into the public domain!

 “Those who live and work in our state support California values. It’s a fact – and especially true of those who own residential or commercial properties. Buying property in California means that you are investing in the future of the state’s residents and businesses within it. Like most investments, people want to ensure that their properties are taxed reasonably and responsibly and that local and state government entities are using those property taxes efficiently towards our shared values, e.g., education and local public services.”

Click here to read the full op/ed.

“SURF-BY LAWSUITS” ARE REALLY A THING

Posted: June 23, 2017 | Posted by Crystal Whitfield | No Comments

Our industry has fought for many years to reform California’s ADA lawsuit abuse, and have made some very good changes to policy that both expands access to our guests and tenants while protecting property owners and businesses from frivolous lawsuits.  However, it appears that a new trend of Title III lawsuits may be heading our way.  The “Surf-by” lawsuit.  Where some enterprising lawyer logs onto your website and searches for accessibility violations and files suit if any our found.  Yes, this is, unfortunately, a real thing.

From the lexology.com website: A federal court in Florida issued a potentially groundbreaking decision earlier this week that could open the floodgates when it comes to a new trend in litigation filed under Title III of the Americans with Disabilities Act (ADA): the “surf-by” lawsuit. While businesses have been forced to deal with so-called drive-by lawsuits for some time now – those claims filed by plaintiffs who spot technical ADA violations such as inaccessible entrances by simply driving down the street – recent years have seen an explosion when it comes to the digital equivalent of such suits. Surf-by lawsuits, on the other hand, are initiated when someone simply logs onto your company’s website to search for possible accessibility violations, and if any are found, follows through by filing an ADA lawsuit against you, sometimes without prior warning.”

 Click here to read more about this issue and what you can do to protect yourself.

SENATE PASSES 2017-18 STATE BUDGET

Posted: June 16, 2017 | Posted by Crystal Whitfield | No Comments

A state budget that adds money to both social programs and attempts to rein-in the University of California, passed by both houses of the Legislature in time to meet the constitutional deadline of June 15.  This plan includes a $183.2 billion package, the largest state budget in history. Assembly Speaker Anthony Rendon (D-Paramount), said the plan “does things for people, not to people, while Senate Republican Leader Patricia Bates (R-Laguna Niguel) criticized the budget as being too large.

At the end of the fiscal year under this plan, the state would end up with 8.5 billion in the voter-approved rainy-day reserve and another $1.4 billion in the state’s regular reserve as well.

The budget will now be sent to Governor Brown’s desk for finalization pending his signature, however, many “trailer bills,” where the money is actually allocated, are still being debated in the Legislature and many big-ticket items, such as “Cap-and-Trade” are still being negotiated.  We will keep you posted.

CALIFORNIA COMMERCIAL REAL ESTATE SUMMIT; SUCCESS!

Posted: June 16, 2017 | Posted by Crystal Whitfield | No Comments

This week the annual California Commercial Real Estate Summit (CCRES) was held in Sacramento and attended by over 80 real estate leaders who converged on California’s Capitol to advocate on behalf of the commercial, retail, and industrial real estate industry.  “Teams” of advocates, made up of leaders from all over the state, met with almost half of the State Legislature.

The focus of this year’s CCRES was support for a number of bills that reform our state’s parcel tax notification laws, support for solar energy and building level battery storage, as well as expressing opposition for the split roll property tax proposal announced by Senator Mitchell (D-Los Angeles) and Senator Skinner (D-Berkeley) in April.

We were also pleased to present our 2017 Legislators of the Year Senate Minority Leader Senator Pat Bates (R-Laguna Niguel) and Assemblymember Jim Cooper (D-Elk Grove) who is a prominent member of the Legislative Moderate Caucus.

This years participants also met with Diane Harkey, Chair of the Board of Equalization as well as Alexis Podesta, Secretary Business, Consumer Services & Housing Agency.

Senator Steve Glazer (D-Orinda) joined the group the Governor’s Office to discuss legislative issues under consideration in the State Senate and how tough it is to try to govern by representing one’s district, and not simply voting with partisan interests in mind.   Everyone walked away from that meeting with a baseball sized card with Mr. Glazer’s “Governing Principles”.  (See more below).

Finally, delegates met with nearly half of the State Legislature.

The goal of the California Commercial Real Estate Summit is to increase public policy and political awareness of state issues impacting commercial, industrial, and retail real estate, and to foster collaborative efforts among business leaders from all sectors of California and their representatives in the State Legislature.

We would like to thank all of our members who took the time to attend the CCRES!

SENATOR GLAZER’S GOVERNING PRINCIPLES

Posted: June 16, 2017 | Posted by Crystal Whitfield | No Comments

Senator Steve Glazer (D-Orinda) spoke with the CCRES Delegates in a frank manner about his experience in the Legislature and his struggle to assure that he represents his constituents and doesn’t fall into the partisan pitfalls of Sacramento.

He illustrated the notion that legislators must “fall in line” with partisan interests by sharing an anecdote that although he supported a certain public employee union over 85% of the time, that union gave him a score of “F” and spent a significant amount of money and ran a candidate against him.

According to his bio, “Senator Glazer has become a forceful advocate for smart, efficient and compassionate government. Considered one of the rare independent voices in the Legislature, Senator Glazer votes the issue, not the party. He has defied easy labels, working with a wide spectrum of groups with varying needs and issues. Senator Glazer supported common sense legislation that upholds his 10 Governing Principles, whether reaching across the aisle or voting with his own party.”  After working with the Senator, we agree with his own assessment.

His bio further states, “Senator Glazer has made accountability and transparency a hallmark of his stay in the Legislature. He returns home every day from Sacramento, taking per diems only on the rare days he stays overnight in Sacramento, and does not accept gifts.”

Senator Glazer’s Ten Governing Principles very much impressed the CCRES participants, so we want to share them with you:

  1. Represent the people of our Senate district, not political parties or special interests;
  2. Maintain a balanced budget to allow government to help people, and people to have confidence in government;
  3. Pursue bipartisan decisions. They are always better and longer lasting;
  4. Emphasize education as the gateway to opportunity and prosperity;
  5. Work hard to set priorities and hold the line on taxes;
  6. Incorporate environmental protection as part of every decision;
  7. Empower local decision-making rather than state mandates. It is more responsive and trustworthy;
  8. Advance accountability and efficiency with every government program;
  9. Promote civility and respect for all people and perspectives;
  10. Conduct myself always with honesty and integrity.

Bravo Senator, bravo.

SPLIT ROLL PROPERTY TAX CAMPAIGN BEGINS

Posted: June 2, 2017 | Posted by Crystal Whitfield | No Comments

Another new “grassroots” group has popped up to lead the split roll property tax public effort.  Grassroots is in quotes, because even though they are branding themselves as “We Are California” it is still the same old advocates that have been agitating for years to raise your property taxes – a who’s who of public employee unions and far left advocacy groups.

The new tact is to tie the Proposition 13’s protections from your property taxes going through the roof as some sort of evil plot hatched by President Trump 40 years ago that is now just coming to fruition.  Here is the lead line in a recent email blast:

“Donald Trump is planning to give big tax cuts to wealthy corporations and his billionaire friends. What’s worse is that he plans to pay for them with massive budget cuts to essential services — taking away healthcare, education, environmental protections, job training and even Meals on Wheels from millions of Americans. In California, thanks to a 40 year old loophole, these same wealthy corporations pocket $9 billion a year in property tax breaks, cheating our communities out of billions in investments.” –Courage Campaign/Make It Fair/Close the Loophole/We Are California email, May 31, 2017.

Nevermind that property taxes don’t fund any of this stuff, this is no time for facts.

This is a very organized effort to hector the State Legislature into destroying your protections under Proposition 13.  As we have reported earlier, Assemblymember Holly Mitchell (D-Los Angeles) and Senator Nancy Skinner (D-Berkeley) announced last month that they would be introducing a split roll bill, but we have yet to see the measure.

In order to provide correct and factual information about Proposition 13 and how predictable taxes benefits small and minority owned businesses as well as California’s economy as a whole, we are members of Californians to Stop Higher Property Taxes. Click here to sign up for alerts and have access to factual information.

FIRST HOUSE DEADLINE

Posted: June 2, 2017 | Posted by Crystal Whitfield | No Comments

Today is one of the biggest hurdles for bills making their way through the California State Legislature, House of Origin Deadline.  All bills must be out of the chamber in which they were introduced. So, both houses have had very long floor sessions to wade through thousands of measures legislators have introduced this year.  Below is a summary of some of the key measures.

LAST MINUTE AMENDS – PROP 54

Posted: June 2, 2017 | Posted by Crystal Whitfield | No Comments

In addition to just sheer volume of bills being considered, the craziness is compounded because there are negotiations and amendments flying on many bills, so its not just a simple “up or down” vote.

A key provision of the recently passed Proposition 54 was meant to specifically address this issue and make it easier to track changes, the so called “72 hour” rule, in which amendments are supposed to be in print 72 hours before a vote can be taken.  There has been some parsing of the meaning of the proposition and the two houses of the Legislature.

The California State Senate honored the rule, but the California State Assembly has interpreted the 72 Hour Rule to mean the final vote in the Legislature and not this interim step.  The interpretation has drawn criticism from the proposition’s backers and derision from the Peanut Gallery noting it’s this type of game playing that brings about propositions like this.

HIGH PRIORITY BILLS SUPPORTED BY INDUSTRY THAT PASSED THE FIRST HOUSE

Posted: June 2, 2017 | Posted by Crystal Whitfield | No Comments

 

The good news is that we are working with legislators on a number of bills that will address industry issues for the better, and several of the highest priority measures passed this first major test.

AB 448 (Daly D) Requires notification of property owners when parcel tax increases are proposed.

AB 565 (Bloom D) Building standards: alternative building regulations: artist housing.

AB 943 (Santiago D) Land use regulations and local initiatives: voter approval.

AB 1148 (Steinorth R) Commercial property disclosures: disability access.

AB 1515 (Daly D) Planning and zoning regulations.

SB 71 (Wiener D) Solar energy systems.

SB 356 (Skinner D) Energy data transparency and building benchmarking.

SB 564 (McGuire D) Water Bill Savings Act.

SB 711 (Hill D) Electrical and gas rates and charges.

SB 764 (Moorlach R) Real estate trust fund accounts: fidelity insurance.

HIGH PRIORITY BILLS OPPOSED BY INDUSTRY STOPPED IN THE FIRST HOUSE

Posted: June 2, 2017 | Posted by Crystal Whitfield | No Comments

 

Many bills our industry opposed and were deemed as high priorities, a majority of legislators agreed with us and they have been stopped for the year.  Note, because legislative sessions span for two years, these bills are technically known as “two year bills” as there is a chance they could move next year.  However, in the day-to-day parlance of the Capitol, these bills are known as being “dead.”

AB 5 (Gonzalez D) Mandates certain hiring requirements for businesses.

AB 199 (Chu D) Applied prevailing wage to private construction (not, this bill is not dead but has been amended in a manner that we no longer oppose).

AB 378 (Garcia, Cristina D) California Cap-and-Trade on Greenhouse Gases.

AB 909 (Steinorth R) Mandates that trauma kits be installed in private buildings.

AB 975 (Friedman D) Greatly expands wild and scenic rivers designations.

AB 1059 (Gonzalez Fletcher D) Attempts to Bans Dual agency commercial real estate firms/transactions.

AB 1506 (Bloom D) Residential rent control: Costa-Hawkins Rental Housing Act.

SB 2 (Atkins D) Applies a $75 tax to all recorded real estate documents.

SB 224 (Jackson D) Overturns recent CEQA court.

SB 640 (Hertzberg D) Sales tax on services.

SB 705 (Allen D) Solid waste: expanded mandate on certain packaging.

SB 775 (Wieckowski D) California Cap-and-Trade on Greenhouse Gases.

HIGH PRIORITY BILLS OPPOSED BY INDUSTRY THAT PASSED THE FIRST HOUSE

Posted: June 2, 2017 | Posted by Crystal Whitfield | No Comments

The bad news is that many bills our industry opposed and were deemed as high priorities have passed the first house and are continuing to move.

AB 73 (Chiu D) Planning and zoning: sustainability districts.

AB 354 (Calderon D) Institutional Property Investors.

AB 450 (Chiu D) Immigration worksite enforcement actions.

AB 890 (Medina D) Bans local land use initiatives and takes away local control.

AB 1127 (Calderon D) Mandates Baby diaper changing stations.

AB 1667 (Friedman D) Adds burdensome water management planning.

AB 1701 (Thurmond D) Original Contractor Labor-related liabilities.

SB 49 (De León D) Tries to pre-empt certain environmental activities by the federal government.

SB 63 (Jackson D) Expands parental leave mandates.

SB 100 (De León D) Requires 100% renewable energy in the State.

SB 150 (Allen D) Regional transportation plans.

SB 231 (Hertzberg D) Adds potentially burdensome fees and charges for property infrastructure.

SB 258 (Lara D) Cleaning Product Right to Know Act of 2017.

SB 562 (Lara D) Single Payer Healthcare for California.

ASSEMBLY REJECTS PLAN TO EXTEND CAP-AND-TRADE

Posted: June 2, 2017 | Posted by Crystal Whitfield | No Comments

In a stunning vote, especially since it was on the same day that President Trump announced that the U.S. would not participate in the Paris Climate Agreement a divided Democrat Caucus failed to move forward a key Climate Change bill related to re-authorizing California’s own rules:

Above and beyond just extending the state’s current cap-and-trade program focused on carbon emissions beyond 2020, AB 378 (Garcia D) also expanded the program to include new restriction on air pollutants and potential limits on industrial facilities. Business groups strongly opposed the expansion of the program, as did the Republican Caucus and the Moderate Democrat Caucus, who hung together to reject the bill.

In an unusual move, the vote tally was held open for almost 45 minutes as legislative leaders tried to pry the Mods apart and get them to support the measure.  Additional votes never materialized and the bill died on a final vote of 34 ayes and 39 noes.

The fight, however, is far from over.  The Governor and Legislative Leaders have placed a very high priority on re-authorizing cap-and-trade and its expected a late session push will happen in August and/or September.

We are asked a lot about why the commercial real estate industry cares so much about this issue as it is seen as something that primarily impacts industrial facilities and trucking.  Its about much more than that and ultimately impacts every one of your buildings through higher energy costs (electrical, natural gas, and gasoline) and is driving the extremely strict building codes that are driving up the costs of your new construction and tenant improvements.

This article by our friends John Gamboa and Jennifer Hernandez is one of the most enlightening articles you can read on this topic and we highly recommend it to you. Click here to read the full article.

TITLE 24 RE-WRITE BEGINS – INDUSTRY HELP NEEDED

Posted: June 2, 2017 | Posted by Crystal Whitfield | No Comments

Some of you may remember that one of the biggest blow ups our industry has seen recently was the over-reach of the last set of lighting regulations.  Some buildings were seeing their tenant improvement costs more than triple because of the onerous rules that were put into place.  Although we were able to get the regulations corrected, the fact that they were adopted in the first place is due, partially, because our industry didn’t spend the time and effort to fully analyze the proposals before they were applied to your projects.

We hope to avoid that situation moving forward and in addition to some technical consulting help we have brought on for this cycle, we hope that you will also help by participating in the process and asking technical experts that you work with to review proposals and get us feedback on anything that appears to be onerous, unimplementable, or not cost effective.

With that below are two upcoming workshops that are important.

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