California Commercial Real Estate Summit 2009

From left to right: Elaine Andersson, Esq., Andersson Law Group; Stephany Cull, RetroCom Energy Strategies, Inc.; Mike Cashion, Shorenstein Properties LLC; Susan Court, Cushman & Wakefield; Ken Cleavleand, BOMA San Francisco; and, Bruce Schilling, 1575 Adrian Road Associates, LLC.

BOMA San Francisco members traveled to Sacramento for the 2009 California Commercial Real Estate Summit (CCRES) and BOMA California Board meeting on June 9-10th.

The two-day event 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 gave BOMA San Francisco members an opportunity to meet other industry leaders from across the state, high-level staff from Governor Schwarzenegger's Administration, and our Bay Area State Legislators from San Francisco, Marin, Sonoma, and San Mateo Counties.

The Governor's Office

Mike Cashion; Stephany Cull; Susan Court; Elaine Andersson; and, Ken Cleaveland pose in front of the bronze bear in front of Governor Schwarzenegger's Capitol office.

Your BOMA San Francisco delegation had the opportunity to meet with Michael Prosio, Deputy Chief of Staff and Legislative Secretary to Governor Arnold Schwarzenegger. Although Mr. Prosio has many duties, he stated that at present his work is "all budget, all the time". Here are the highlights of his presentation regarding California's $24 billion budget shortfall:

The Good News

• The California economy has actually grown over the last year by 1%.

The Bad News

• There is a short-term cash issue. In 1.5 months, California will run out of money to pay its bills. Why? California's tax collection schedule, and the State's inability to borrow from Wall Street, has limited the number of options for the State to meet its short-term obligations.
• In addition, there are very few options for cutting the state budget (the general fund) due to constitutional guarantees for corrections (10% of the budget), health and human services (20%), education (50%), and various other budgetary requirements.
  

Reform?

• This is a great opportunity to reform California's government and how we think of funding public service by the state.
• California needs to be attractive to business. Indeed, our tax base--the top 1% income earners who provide 50% of the income taxes to the State, and corporations--is shrinking.
  
• We can't rely on growing our way (economically) out of this budget shortfall.
• The State may consider increasing revenue generators such as, increasing personal withholding to 10%, and accelerating quarterly tax payments to assuage future budget deficits.
• There is a emergency response fee proposal to fund CalFIRE and CalEMA that would add 5% to individual and commercial property insurance premiums.
  
• Bankruptcy is not an option for California unlike counties or cities.
  
• California needs to increase its creditability with Wall Street by tightening its fiscal belt.
• Furloughs and layoffs for state employees are inevitable.
  
• Consolidation and or eliminating various state boards and commissions is on the table.
  
• Finally, there are audits on the many state government departments that are now online at http://www.reportingtransparency.ca.gov/. The website also includes all state contracts that are greater than $5,000.

Legislative Meetings with Bay Area State Legislators

There were a number of important measures discussed at our legislative meetings with Bay Area State Legislators:

SUPPORT

• AB 300 which promotes great use of voluntary water conservation measures in new homes and buildings by ensuring that a project's water demand is adjusted to reflect achieved water savings.
• AB 531 would facilitate implementation of California's historic energy benchmarking law, which will help our state continue to lead the nation in building awareness of energy consumption and efficiency. It would direct the CA Energy Commission to open a regulatory proceeding to implement this proposed law that would eliminate the January 1, 2010 deadline to give the industry more time to benchmark their properties.
  
• AB 828 strengthens the California State Green Building code by establishing a robust standards development process for green building standards. These standards will incorporate best practices and technical expertise from various state agencies and assure technological feasibility and cost effectiveness.
• SB 476 this measure will help move forward construction and redevelopment projects by updating and clarifying notification procedures in the environmental permit process. The purpose of this measure is to help prevent last minute 'data dumps' that are used in the process to stall a project.

OPPOSE

• AB 479 increases the solid waste diversion requirement for local jurisdictions to 60%, imposes commercial recycling requirements on California's businesses, and gives the California Integrated Waste Management Board broad authority to impose programs to achieve a statewide solid waste diversion rate of 75% by 2020. Although BOMA San Francisco supported a local recycling mandate such as proposed in AB 479, our members stressed that one size does not fit all when it comes to the ability of local jurisdictions to meet mandates for recycling.
  
• AB 1404 discourages emission reductions, significantly increases costs to the employer community, and threatens jobs by severely limiting the amount of offsets California industries can use to meet their greenhouse gas emission goals. BOMA members strongly supported emissions credits being awarded to commercial office buildings that reduced their carbon emissions through energy efficient projects.
  

In addition, we talked about the value of the commercial industrial and the retail real estate industry to California, and BOMA's position on the issue of a split roll tax (Surprise! We oppose it.).

Senator Leland Yee (D - San Francisco)

BOMA members met with Senator Leland Yee who was very receptive to our issues, and pledged to not support a new split-roll property tax proposal. The Senator prefers a more holistic approach to reforming Proposition 13 if it is to be considered as part of the solution in solving California's budget shortfall.

Assemblymember Tom Ammiano (D - San Francisco)

BOMA members pose in front of the movie poster, MILK, in which Assemblymember Ammiano played a cameo role.

Assemblymember Jared Huffman (D- Marin)

BOMA Members also met with staff members from the Capitol offices of:

• Assemblymember Fiona Ma (D- San Francisco)
  
• Senator Mark Leno (D- San Francisco)
  

CCRES Dinner Honoring the Legislators of the Year

Assemblymember Michael Villines (R-Clovis)

Senator Ron Calderon (D-Montebello)

From left to right: Mike Cashion; Ken Cleveland; Elaine Andersson; Jack Spiegelman, Buzz Oates Enterprizes; and, Susan Court.