- TECHNICAL DIFFICULTIES – FIXED!
- CALIFORNIA COMMERCIAL REAL ESTATE SUMMIT; SUCCESS!
- COMMERCIAL REAL ESTATE LEGISLATORS OF THE YEAR; SANTIAGO AND JONES
- BUDGET PASSES EARLY – SENT TO THE GOVERNOR
- PARKING ENFORCEMENT REPEAL OPPOSED
- TAX CONFORMITY BILL SUPPORTED
- DEFENSIBLE SPACE BILL SUPPORTED
- MEASURE EE SPLIT ROLL PARCEL TAX DEFEATED IN LOS ANGELES – EXCUSES
- WELCOME SENATORS GONZALEZ AND DAHLE
- CBPA 2019 CALENDAR
TECHNICAL DIFFICULTIES – FIXED!
Unfortunately, many of you did not receive the eWeekly last week because of technical difficulties. We believe it is cleared up and hope all of you receive this. For the few people that did get last week’s version we apologize for some duplicate content and hope you will understand.
CALIFORNIA COMMERCIAL REAL ESTATE SUMMIT; SUCCESS!
Last 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 event kicked-off with a special presentation by Rob Lapsley the President of the California Business Rountable. Rob and our very own Rex Hime are leading the battle against split roll property tax in the Legislature, where it comes up locally (like Measure EE recently defeated in Los Angeles) and on the statewide ballot next November. To defeat this measure, we our industry and our business allies need to raise an estimated $100M.
Our leaders also heard Allan Zaremberg the President and CEO of the California Chamber. Allen is also directly involved in the statewide battle to defeat split roll. He will talk about those efforts as well as how the CalChamber coordinates with employer interests in Sacramento to push back on the Job Killers Bills introduced in the Legislature each year.
Prior to meeting with Legislators our teams met with two members of the Executive Branch, Sonya Logman, Deputy Cabinet Secretary, Office of Governor Gavin Newsom, and Nick Maduros, Director, California Department of Tax and Fee Administration. This was a great opportunity to exchange ideas with these policymakers, but more importantly we heard directly from the Administration about the new Governor’s key initiatives and priorities.
In meetings with legislators we focused on the harm that the split roll property tax initiative will bring to our industry and our state’s economy should it pass. The November 2020 ballot measure will eviscerate Proposition 13 protections, so it is imperative we continue to press facts and figures with policymakers under the gilded dome while raising funds to protect ourselves.
CCRES is the one time of year that industry leaders from all sectors of the commercial, industrial, and retail real estate industry converge on California’s Capitol to meet with policymakers. The summit gives you an opportunity to meet other industry leaders from across the nation, high-level staff from Governor Newsom’s Administration, and California State Legislators.
Please help us thank all the members who trekked to Sacramento to advocate on our industry’s behalf!
COMMERCIAL REAL ESTATE LEGISLATORS OF THE YEAR; SANTIAGO AND JONES
We were also pleased to present our 2019 Legislators of the Year award to Senator Brian Jones (R; Santee) and Assemblymember Miguel Santiago (D; Los Angeles). Our industry has worked closely with both legislators on a number of issues ranging from online sales taxes to issues related to real estate brokers.
In fact, Assemblymember Santiago carried a measure in 2018 that reformed leasing law and successfully guided it to the Governor and had it signed into law.
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. Recognizing legislators that take the time to listen to concerns of our industry is an important part of the event.
BUDGET PASSES EARLY – SENT TO THE GOVERNOR
What used to be melodramatic hot Summertime stalemates has turned into hum drum almost bureaucratic perfunctory passing of the budget. Yesterday both Houses of the Legislature easily passed almost a $215 Billion budget and sent it to the Governor.
Under the spending plan the state moves closer to universal health coverage through expanded Medi-Cal; boosted spending and tax credits aimed at the working poor; and dedicates a significant amount of funding – and policy language – to attempt more housing starts and dealing with homelessness.
Click here to read the Sacramento Bee’s coverage of the spending plan.
PARKING ENFORCEMENT REPEAL OPPOSED
We are leading a coalition to oppose AB 516 (Chiu; D-San Francisco) which would repeal several existing parking laws that would have a severely negative impact on commerce, especially in urban and already congested areas.
Specifically, AB 516 repeals several existing laws that authorize peace officers to tow vehicles for having five or more delinquent parking or traffic violations, for leaving a vehicle on a road for 72 or more consecutive hours, and for a having a lapsed vehicle registration more than six months.
The commercial, industrial, and retail real estate industry understands there is good intent behind the bill and having a car towed can be a financial hardship. However, removing all recourse for maintaining a modicum of organization of parking in public places is not the answer.
Even with these laws on the books, many people do not follow societal norms and courtesies for parking vehicles. Remove the ability of cities to manage their roads, and the problem will be compounded.
In commercial areas, circulation of vehicles is extremely important. Small businesses in downtown shopping, commerce, and tourist areas depend on movement of vehicles throughout the day. Repealing a local government’s ability to remove vehicle from these areas that are illegally parked will be detrimental.
Without the ability to remove vehicles individuals will just store them in a manner that impedes commerce, shopping, cultural events, and will induce gridlock in areas by making it extremely difficult for citizens to park in residential areas and commercial districts alike.
Click here to read more info about AB 516.
TAX CONFORMITY BILL SUPPORTED
Our industry has taken a position of support for AB 217 (Burke; D-Inglewood) which will conform certain state tax laws with the federal tax code dubbed the Tax Cuts and Jobs Act.
We believe that conformity is not just good tax policy, it is good public policy as well. It will help decrease confusion for tax filers—both individuals and businesses—and will help provide a more predictable and stable revenue structure that will not adversely affect the economy or worsen our state’s affordability crisis.
While much of the dialogue has been focused on revenue from conformity helping expand the state’s successful Earned Income Tax Credit program, funding from conformity will also help support other programs of great importance to the business community.
Tax conformity means more funding for K-12 schools and higher enrollment at colleges and universities, helping create a well-educated workforce. It will also provide more funding for Covered California, helping alleviate cost pressures for families and ensure healthcare access for more Californians.
The federal tax measure does impact like kind exchanges used for real estate transactions.
If you want to read all of the conformity measure in AB 217, click here.
DEFENSIBLE SPACE BILL SUPPORTED
California has strict defensible space laws. When effectively implemented, these laws have been shown to significantly increase the probability of a structure’s survival during a wildfire.
However, due to a lack of awareness and ongoing enforcement, many owners of residential and non-residential buildings do not maintain a defensible space and thus many structures are not in compliance, putting people and property in peril.
SB 190 (Dodd; D-Napa) will help increase the understanding and awareness of California’s requirement for defensible space around structures among building owners, contractors and local government by requiring the State Fire Marshal (SFM) to produce several educational and application tools on the topic including a document for the maintenance of defensible space around structures and submit it for adoption into the California Green Building Standards.
We believe SB 190 will make buildings safer and decrease the devastation that we have seen in recent wildfires.
MEASURE EE SPLIT ROLL PARCEL TAX DEFEATED IN LOS ANGELES – EXCUSES
As we reported last week, in a huge victory for our industry LAUSD’s Split Roll Parcel Tax Measure EE was soundly defeated. The measure needed a two-thirds vote to pass and couldn’t even muster fifty percent. Measure EE was an overreach and even voters in Los Angeles who are somewhat tolerant of high taxes sent a strong message to stop messing with property taxes.
LA Time Columnist Steve Lopez, who campaigned hard for the measure, has written a follow up story that talks about the many reasons his readers let him know they didn’t support the measure.
As Lopez points out the ploy of the measure to have 80% of the taxes fall on Commercial Real Estate, didn’t work because homeowners know they would have paid directly or indirectly for the massive tax increase. Our polling getting ready for the split roll battle next year shows that Proposition 13 retains strong support and Californian’s are still very suspicious of unfettered ability to raise property taxes.
Click here to read the full column.
California Business Properties Association leadership has overwhelmingly voted to oppose Measure EE and joined the battle against the $500 million property tax on all homes, apartments and business properties within the boundaries of the Los Angeles Unified School District (LAUSD).
Rex Hime, President and CEO stated, “We have been sounding the alarm on the use of parcel taxes like Measure EE to raise property tax revenue in a way that circumvents Proposition 13. Measure EE is particularly nefarious and a de facto split roll as it is a per square foot parcel tax, not just a flat rate per parcel as is the standard. This means that business properties and multi-family housing will pay by far the lion’s share of the tax.”
In 2018 alone, there were 100 parcel taxes on California ballots and Measure EE is the second property tax increase in just two years for LAUSD.
Hime continued, “Measure EE won’t be the end of the assault on property taxes. It is simply another step to dismantle Prop. 13 protections.”
The split roll property tax initiative on the November 2020 ballot played a key role in the LAUSD teachers’ strike as the new contract calls for Mayor Garcetti to endorse the measure and work with both the union and the LAUSD in advocating for its passage.
Although CBPA does not normally get involved with local elections, we had to here. We had to make a stand against this ill-advised property tax, and we had to show there is still support amongst voters for protecting against unreasonable assessments. Measure EE was a part of a statewide assault on the fundamental protections provided by Proposition 13 which we are dedicated to defeating through communication, funding, and member action.
WELCOME SENATORS GONZALEZ AND DAHLE
Brian Dahle and Lena Gonzalez both handily won special elections to fill vacant seats in the Senate. We welcome both Senators and look forward to working with them!
CBPA 2019 CALENDAR
December 5 – 6, 2019
Strategic Issues Conference