UPDATE: Carried Interest - Large Tax Increase on Commercial Real Estate

BOMA San Francisco Members:

On May 28, 2010, the U.S. House of Representatives passed a slimmed-down version of H.R. 4213, legislation which contains a modified version of the carried interest proposal BOMA International and the rest in the commercial real estate community has been aggressively opposing, by a vote of 215-204. The House bill treats carried interest as 50% ordinary income and 50% long-term capital gains for two years, then moves to a permanent 25/75 split (25% long-term capital gains/75% ordinary income) with an effective date of Jan. 1, 2011. Click here for a spreadsheet that breaks down this new proposal by year, taking into account Self-Employment Tax and the recently enacted 3.8% Medicare tax on unearned income included in the health care bill.

The U.S. Senate adjourned yesterday evening and will not consider action on the House bill until it returns from the Memorial Day recess. During the recess, the industry is encouraging members to contact members of both the House and Senate in their states and districts about the negative impacts this tax increase will have on the industry. Efforts are also underway to target Editorial Boards of various newspapers across the country to talk about carried interest using the commercial real estate perspective.

UPDATE: Split Roll Bill Held in Committee - AB 2492

BOMA San Francisco Members:

The bill targeting Proposition 13 protections, AB 2492 by Assemblymember Tom Ammiano (D-San Francisco) was 'held' in the California Assembly Appropriations Committee on May 28, 2010.  All 'tax levy' bills were held in order to allow them to be considered in aggregate as part of the upcoming state budget discussions.  Because these measures require a 2/3 vote for passage, normal legislative deadlines do not apply.  Indeed, the bill remains alive although its progress is stalled for the time being.  What this means is that BOMA California will been even more vigilant throughout the budget process to make sure that split roll taxation under Proposition 13 does not become part of any budgetary 'solution.'

Commercial Real Estate's Contribution to the San Francisco Economy

BOMA San Francisco Members:

We've recently calculated the contribution that the commercial real estate industry makes to the local economy in San Francisco (please click here for a printable version):

• BOMA San Francisco is one of the City’s oldest business organizations. BOMA San Francisco members own, operate and service more than 75 million square feet of office space locally.
• The commercial office building industry is a significant contributor to the City’s economic engine. In 2009, the office building industry contributed $2.5 billion to San Francisco’s economy. Further, the San Francisco office building industry contributed $3 billion to California’s gross state product.
• Real estate is a leading employer. Firms in the commercial real estate industry employ building managers, asset managers, custodial staff, security staff, brokers, and accountants and retain a myriad of other services through contracts, such as legal consulting, landscape maintenance, and window cleaning to name just a few. In 2009, San Francisco’s office building industry supported 14,370 jobs at the local level. At the state level, San Francisco’s office building industry supported 23,227 jobs. These jobs are generated as a result of the office buil
• ding operating outlays throughout the breadth of the local, state and national economies and they are in addition to the direct employment on site to operate and service these office buildings.
• The $1.3 billion in operating outlays by San Francisco office building owner/operators generated $653,681,988 in new personal earnings for workers residing within this office market.
• In San Francisco, secured commercial parcels represent 31% of the City’s asset valuation. Office buildings represent an assessed value of $22,130,170,999 according to the 2009 Assessor’s Annual Report.
• Local property taxes paid by the commercial office sector over the last decade amounted to $1,805,844,575 according to the tax collector’s office.
• In addition to annual property taxes, office building sales generate substantial revenues for San Francisco in the form of property transfer taxes. In the last decade, office building sales have generated $762,003,100 in additional revenues to The City according to the Assessor.

i The total annual outlay for office building operations for private office buildings exceeding 10,000 square feet and not owner occupied. Government buildings are excluded.

ii The total contribution of the annual outlays for office building operations in the local office market on the city’s economy – gross regional product.

iii Represents the new personal earnings (wages and salaries) generated as a result of the office building operating outlays. These new personal earnings represent new income that accrues to local workers residing within the state.

iv Represents the employment impact of the total office building operating outlays. Jobs supported by these outlays reflect the indirect and induced job impacts and do not include the jobs directly associated with building operations (these are estimated at 20-25 full-time job equivalents per 100,000 square feet of office building).

BOMA San Francisco PAC Official Endorsements for the June 8, 2010 Primary Election

Click on image to enlarge and print.

BOMA San Francisco Members:

Please find the BOMA San Francisco Political Action Committee's (BOMA SF-PAC) printable slate card of official endorsements for the June 8, 2010 election above.  Detailed  information on each Proposition and the San Francisco Democratic County Central Committee can be found by clicking on the links below.   

City Propositions:

• Proposition A (School Facilities Parcel Tax) – No Position
• Proposition B (Earthquake Safety and Emergency Response Bond) - Support
• Proposition C (Film Commission) – No Position
• Proposition D (Reform of City Pension Plan) – Support
• Proposition E (Budget Line Item for Dignitary Police Protection) – Oppose
• Proposition F (Residential Renters' Financial Hardship Applications) – Oppose
• Proposition G (Transbay Terminus for High Speed Rail) – Support

Click here to access the San Francisco Department of Elections website for more information about these measures.

State Propositions:

• Proposition 13 – (No Reassessment for Seismic Upgrades) – Support
• Proposition 14 – (Open Primaries) – Support
• Proposition 15 – (Publicly-Funded Secretary of State Pilot-Program) – Oppose
• Proposition 16 – (2/3 Requirement for Creating/Expanding Public Power) – Support
• Proposition 17 – (Auto Insurance Based on Driver’s History of Continuous Insurance Coverage) – No Position

Click here to access the California Secretary of State's website for more information about these measures.

Candidates for the San Francisco Democratic County Central Committee (DCCC) 

What is the DCCC and why is this obscure elected body important?  Click here to read the San Francisco Chronicle's C.W. Nevius' great article about the DCCC on April 24, 2010, and here to read our blog post on the DCCC's April meeting.

Assembly District 12 (Pick 12) 

• Andy Clark
• Ron Dudum
• Dan Dunnigan
• Bill Fazio
• Tom Hsieh
• Mary Jung
• Meagan Levitan
• Connie O’Connor
• John Shanley
• Arlo Hale Smith
• Mike Sullivan
• Matt Tuchow
• Alex Volberding

Assembly District 13 (Pick all)

• Melissa Apuya
• Keith Baraka
• Leslie Katz
• Calvin Louie
• Owen O’Donnell
• Linda Richardson
• Catherine Stefani
• Joe Alioto Veronese
• Scott Wiener

Fix Muni Now - New Office Hours & Eight New Chances to Help Reform Muni

BOMA San Francisco Members:

There have been a number of encouraging developments in the Fix Muni Now campaign that we wanted to share with you.

The campaign is now scheduling their signature-gathering events two weeks out so that it's easier to fit Fix Muni Now campaign events into your schedule.  Here are the events coming up between now and June 6:

• Thursday (TOMORROW!), May 27, 4:30-6 PM Castro Muni
• Friday, May 28, 4:30-6 PM; Glen park BART
• Saturday, May 29, 9-11 AM: 22nd and Irving
• Sunday May 30,10 AM -12 PM: 5th and Clement
• Thursday 6/3, 4:30-6 PM: Montgomery Muni platform
• Friday 6/4, 4:30-6 PM, 24th and Mission
• Saturday 6/5, 10 AM-12 PM: Union Street Fair
• Sunday 6/6: 10 AM-12 PM: Chestnut Street in front of Peet's

If you'd like to come to one of those events--or have a petition mailed to you--please send an email to info@fixmuninow.com, or call (415) 640-7278.

In addition, starting next week, the Fix Muni Now headquarters will have new campaign office hours.  Their headquarters is located at 305 Valencia Street (14th and Valencia), and will now be open Tuesdays, Wednesdays, and Thursdays from 11:00 a.m. to 6:00 p.m.; Fridays from 12:30 p.m.-4:30 p.m.; and, Saturdays from 9:00 a.m. to 12:00 p.m.

Thank you for your ongoing support of this important measure. With your help, the Fix Muni Now effort will be able to get real, substantive Muni reform on the ballot this November.

BOMA California Energy Grant/Stimulus Funds Proposal - Awards Announced

BOMA San Francisco Members:

On behalf of BOMA California, ConSol, and Lime Energy, thank you to those who contributed to BOMA California’s SEP Commercial Retrofit Program Proposal.

The awardees of stimulus funds from the federal government via the California Energy Commission (CEC) program for energy efficiency in commercial buildings have been announced – there were 77 applicants, and we are proud to say our proposal ranked in the top 10.  Unfortunately, there were only enough funds to give awards to the top three grants.

The three winners include projects located in downtown Oakland, supermarkets (refrigeration), and Northern California municipal buildings.  We congratulate the successful projects and acknowledge the tough competition! Read more about the winners by clicking here for the project press release: 'Energy Commission Awards 29.6M in Stimulus Funds'

Although the CEC funding was not awarded to the BOMA California proposal, our technical partners, ConSol and Lime Energy, believe that good opportunities to save building costs can be found outside of the bid program.  Take a moment to read the information below for ideas that we hope will lead you increased energy efficiency and a better bottom line.

TAKE ADVANTAGE OF THE CONNECTIONS MADE – OPPORTUNITIES EXIST!

Lime Energy has an effective way to look at the total energy use of a property on a cost per square foot basis and compare the number with survey data from existing buildings in the same region.  This tells how the energy use of the building rates in relation to average and is valuable because it separates out the buildings that are already doing well; confirms that they are OK for now, and nobody has to waste a lot of time with an already efficient building.  On the other hand, the opposite is just as true – this step identifies the buildings that are in need of help, and those are the ones that owners and managers ought to be concentrating on.  BOMA has energy related programs such as BEEP, and one of the foundations of BEEP is benchmarking.   Lime Energy will review your BEEP benchmark, or help you prepare one if you haven’t done so.

This benchmarking step will identify the buildings that need to work on energy efficiency, and Lime Energy will use its experience and California-based crews to help you find and execute solutions.  Please contact Lauren Usher at Lime Energy (909 394-0230 x113) for more information about what they can offer to the group that pledged support for the CEC bid.

ConSol wants to make sure you know that building to the stringent California energy code (T-24) can qualify improvements for tax deductions.  If you have recently improved the lighting efficiency of your building you are probably eligible for the 197D energy efficient buildings deduction.  ConSol will determine your eligibility for this tax deduction (up to $0.60 per square foot).  If you are interested please contact Mark Kindelberger at ConSol (209 473-5060).    

Again, the leadership at BOMA California and our partners at ConSol and Lime Energy want to express our gratitude for you moving forward projects for this grant.  We would also like to acknowledge and thank BOMA International for allowing us to build into our program many of its existing resources.  We were close on this one, learned some lessons, and hopefully will be better positioned for the next opportunity!

UPDATE: San Francisco Ordinance Prohibiting Smoking in Enclosed Areas and Certain Unenclosed Areas - SIGN CHANGES

BOMA San Francisco Members:

We recently posted information on the blog in regard to a measure recently introduced by Supervisor Eric Mar that would, according to the legislative digest, amend the San Francisco Health Code to prohibit smoking in certain enclosed areas, certain unenclosed areas and sports stadiums.  The ordinance will have an impact on all commercial buildings in San Francisco.

The prohibited areas include:

• Business establishments and bars regardless of whether owner-operated;
• Unenclosed dining areas of restaurants;
• Service waiting areas;
• Areas outside entrances, exits and operable windows and vents of all buildings except at the curb of the nearest street, sidewalk or alley.

UPDATE! - As of January 22, 2010

Supervisor Mar has agreed to amend the measure--due to the tenacious efforts of the Golden Gate Restaurant Association--which you can read here, to address the signage requirements on pages 14-15 of the ordinance to now reflect these changes:

• The sign will read: 'Smoking only at curb or at least 15 ft. from entrances, exits, operable windows.'
• Letters will be 1/2" as opposed to 1".
• No Smoking Symbol included
• 3" in diameter as opposed to 6"
• The sign will also include 'SF Health Code 19F.'
• Letters 1/8"
• The sign size will now be to 4" by 9"

UPDATE! - As of February 18, 2010

We recently invited Lin-Shao Chin, Legislative Aide to Supervisor Mar and representatives from the San Francisco Department of Public Health (SFDPH) to talk with BOMA San Francisco's Government and Public Affairs Committee (GAPAC) and Political Action Committee (BOMA SF-PAC) members on February 12, 2010 about the ordinance's requirements--as they are currently written--and the impact they will have on BOMA San Francisco members.  

After a healthy discussion, GAPAC members suggested that the committee submit amendments to the ordinance to better reflect their concerns, and allow for reasonable compliance by the aggregate BOMA San Francisco membership.  A knowledgeable attorney member of the GAPAC, Horace Green of Green & Humbert, kindly drafted the suggested amendments for Supervisor Mar's review.  

The GAPAC and PAC members' immediate concern with the ordinance is the potential liability and fines building managers and commercial property owners might face if they do not personally interact with smokers outside of their properties and verbally tell them to cease and desist.  This scenario does not sit well for BOMA San Francisco members, due to the unpredictable behavior of strangers today--especially if you tell someone to stop smoking.  The committee members believe that posting a sign (as indicated in the last update on January 22, 2010, above) 15 ft. from entrances, exits and operable windows (or 25 ft. to earn a point towards LEED certification), is sufficient to cover BOMA members' responsibilities to help diminish the effects of second-hand smoke.

UPDATE! - As of February 22, 2010

Your BOMA San Francisco Advocacy Team attended the San Francisco Land Use and Economic Development Committee hearing on Monday, February 2010 where Supervisor Mar's measure was under consideration.  We were successful in submitting Mr. Green's amendments to the committee and spoke in support of striking the language that would require our members to become, in essence, smoking police (see our last update, above).  The committee was considering no less than 24 amendments to the ordinance at the committee meeting--most of which were focusing on language that did not directly affect the BOMA San Francisco membership.

The ordinance is currently being revised to reflect the amendments passed in the Land Use and Economic Committee meeting and the measure will, most likely, be voted on by the Board of Supervisors at their March 9, 2010 meeting.  In the meantime, we will continue to request that the members of the Board of Supervisors take our suggested amendments--the net effect of these changes is to require building owners and operators to give notice to tenants of the ordinance, but does not make them liable for failing to physically prevent people from smoking--and we'll  post the most recent version of the ordinance here once we receive it from Supervisor Mar's office for your input.

UPDATE! - As of March 22, 2010

At their regular meeting on March 16, 2010, the San Francisco Board of Supervisors approved the final version of Supervisor Mar's ordinance that expands on San Francisco's smoking ban that was passed in 1994.  Although this measure did not contain all of the amendments requested by BOMA San Francisco members, we appreciated the opportunity to work with Supervisor Eric Mar's office, as well as his staff's willingness to speak to BOMA's GAPAC and PAC members about their salient concerns on this measure.

Assuming the Mayor signs this ordinance, the effective date is 30 days after it was passed by the Board on March 16th.

UPDATE! - As of April 6, 2010

Mayor Newsom signed this legislation on March 25, 2010; the effective date is April 24, 2010.  Please click here to review the signed copy of this measure.

Please take a moment to review the ordinance and email Ken Cleaveland, Director of Government and Public Affairs for BOMA San Francisco at kenc@boma.com with your comments.

UPDATE! - As of May 24, 2010

We've received word today from Supervisor Eric Mar's office and the San Francisco Department of Public Health that there will be 'clean-up' language changes to the the original ordinance.  The changes affect the signage language in Section 1009.22(i)(1) that currently requires posted signs at the entrances of all buildings to read: 

• 'Smoking only at the curb or at least 15 ft. from exits, entrances, and operable windows.' 

The new ordinance will require posted signs to read:

• 'Smoking only 1) at the curb or 2) if no curb, at least 15 ft. from entrances, exits, operable windows, and vents."

The SFDPH will not enforce signage language until the ordinance changing the language takes effect.  Please click here to read the Smoking Prohibition Signage Requirement Ordinance and here for the Legislative Digest.  If you have any questions or concerns, please contact Ken Cleaveland, Director of Government and Public Affairs for BOMA San Francisco at kenc@boma.com and John Bozeman, Legislative Assistant for BOMA San Francisco at johnb@boma.com with your comments.

UPDATE: EPA Poised to Address Lead in Commercial Buildings

BOMA San Francisco Members:

At the BOMA San Francisco Codes & Regulations Committee meeting on March 24, 2010, the committee members discussed new rules for residential contractors to help prevent lead exposure.  The Environmental Protection Agency's (EPA) may impose similar requirements on commercial contractors as well.  Click here to read the EPA's  U.S. brochure on this issue and review the information below:

New Rules for Contractors

Beginning April 2010 contractors performing work that disturbs lead-based paint in homes, child care facilities, and schools built before 1978 must:

• Be EPA certified, and
• Follow specific work practices to prevent lead contamination. 
• To comply with the new regulation, those working on older sites will need to invest in lead-testing kits, plastic sheeting, respirators, protective clothing and other lead-safety materials. 
• To learn more about how you can meet these requirements contact the National Lead Information Center at 1-800-424LEAD (5323) or visit www.epa.gov/lead.

UPDATE! -  As of May 20, 2010

On May 6, 2010 the EPA issued advance notice of its intention to regulate the renovation, repair and painting of public and commercial buildings under the Toxic Substances Control Act (TSCA). BOMA members have until July 6 to submit comments. The EPA will then likely propose lead-safe work practices and other requirements for renovations on the exteriors of public and commercial buildings, and determine whether lead-based paint hazards are created by interior renovation, repair and painting projects in public and commercial buildings.  BOMA is joining forces with other real estate associations to submit comments to EPA in opposition of any new requirements.

Please forward any comments you have about this issue to Ken Cleaveland at kenc@boma.com and John Bozeman at johnb@boma.com.

The News Links - May 17-19, 2010

Calculated Risk: Moody's: CRE prices decline 0.5% in March.

Chief Executive: CEOs Pick Best/Worst States For Business

Commercial Real Estate

• Commercial real estate: Tsunami vs. slow bleed.
• Survey shows commercial real estate beginning to stabilize; recovery to be very slow, uneven.
• Is the shopping mall a dead concept?

San Francisco

• Charter amendment seeks Muni changes.
• Bungled ballots imperil election.
• Taxes seen as solution to fix street problems.
• Supes resume Muni talks.
• Mayor lauds board’s vote on Treasure Island redevelopment.
• Matier & Ross: All is fair game as state budget season begins.

Marin/San Mateo/Sonoma

• Marin County shuts budget gap as new cuts loom.
• Supervisors move to hike parking fees at West Marin beaches.
• Burlingame police contract may be step toward pension reform.

California

• California legislative analyst backs targeted tax increases.
• Dan Walters: California pension bill isn't what it claims.

The Economy

• Economic recovery will be rapid, San Francisco Fed researchers say.
• Finance jobs weathering the storm better than most?

Energy & Environment

• California's global warming law could cause businesses to flee state, report says.

General

• Cash-strapped cities consider joining forces.

Street Resurfacing Financing Working Group - DRAFT Recommendations

BOMA San Francisco Members:

The Street Resurfacing Financing Working Group was formed in January 2010 at the request of the Mayor and Board President David Chiu to prepare a specific set of proposals or recommendations to the Mayor, the Board of Supervisors, and the Capital Planning Committee for financing the repaving and/or reconstruction of the City's public streets and rights of way.  As you may recall, BOMA San Francisco members have heard about the issue of street resurfacing before in May 2009, and the cost associated to 'catch up' to maintain and possibly improve the Pavement Condition Index (PCI) score--70 is considered passing; San Francisco is currently at 63.

The City has underfunded its ability properly maintain the streets for two decades, possible more.  BOMA San Francisco members understand the need to maintain San Francisco's streets to promote efficient transpiration, commerce, safety and to reduce escalating costs in the future if the City does not act to maintain the streets now, but were will the money come from?

Please click here to review a DRAFT presentation on the report as of May 12, 2010.  The primary recommendations listed in the presentation (among 20 possible options) to raise the necessary funds are (pp. 28-31):

• A Conditional General Tax 
• Sales, payroll, utility, or a general parcel.
• A Citywide Benefit Assessment District 
• Requires nonresidents to contribute to the costs via a business pass-through
• A Parcel Tax 
• Based on the amount of vehicle trips their property generates 
• Issue bonds (Click here to review our May 2009 blog post on the   Road Repair and Safety Improvements Bond proposed by the City).  

We'd like to call your attention to page 32 of the presentation on what the City would need to charge property owners to meet the Working Group's recommended average yearly budget for a PCI of 70 (over 10 years)--for commercial property owners, the Group recommended a parcel tax levied at $0.174 per square foot based on the percentage of daily trips generated by the property:

Please take a moment to review the report and send your comments to Ken Cleaveland, BOMA San Francisco's Director of Government and Public Affairs at kenc@boma.com and John Bozeman, BOMA San Francisco's Legislative Assistant at johnb@boma.com with your comments. 

UPDATE: SFFD Emergency Evacuation Sign Revision - Final Version Approved by SF Fire Commission

BOMA San Francisco Members:

On May 13, 2010 the San Francisco Fire Commission approved the final revised San Francisco Fire Department administrative bulletin relating to emergency evacuation signage in buildings (e.g., residential, hotel, and commercial office).  Click here to review the bulletin.  The final bulletin is a great improvement in comparison to the requirements that were originally in place; we appreciate the efforts of the San Francisco Fire Department in working with BOMA San Francisco members to craft more reasonable emergency evacuation signage guidelines.

Please feel free to contact Ken Cleaveland, BOMA San Francisco's Director of Government and Public Affairs at kenc@boma.com and John Bozeman, BOMA San Francisco's Legislative Assistant at johnb@boma.com if you have any questions.

Examples of emergency evacuation signs are below (click on the images to enlarge):

San Francisco Commercial Rent Tax Proposals - Interim Report Now Available

UPDATE - As of May 11, 2010

Please click here to access the Controller’s interim report on the two alternative proposals to the current payroll tax structure in San Francisco that was just published.   The rational for a tax on commercial rent is found on page 18 of the report.  Please email Ken Cleaveland, BOMA San Francisco's Director of Government Affairs at kenc@boma.com, and John Bozeman, BOMA San Francisco's Legislative Assistant at johnb@boma.com with any comments you may have.  

------------------

Ben Rosenfield, Controller for San Francisco and Ted Egan, the City's Chief Economist 

BOMA San Francisco's Government and Public Affairs Committee welcomed Ben Rosenfield, San Francisco's Controller, and Ted Egan, the City's Chief Economist on May 5, 2010 to present two alternative proposals to the current payroll tax structure in San Francisco.  Both include a commercial rent tax.  You can view the presentation by clicking here. With either proposal, the City expects to raise approximately $18 million annually from a commercial rent tax by charging 1.395% on the gross receipts for renters of commercial property.

Background

Mr. Rosenfield mentioned that his staff has been researching this issue for about five months; in April they were able to produce real numbers to solicit feedback from the various stakeholders in the business community that would be affected by the two suggested payroll tax changes.  The Controller's office was asked by the Mayor Gavin Newsom and Board of Supervisors President David Chiu to study this question:  What is the most efficient way to collect money from San Francisco taxpayers?  According to Mr. Rosenfield, the goal in answering this question is to not generate more tax revenue, but to identify if there is a better taxing system to use in San Francisco.

Mr. Egan prefaced the presentation by stating that San Francisco is the only city in California that charges only a payroll tax as opposed to a combination of taxes: payroll tax, commercial rent tax, etc.  As a result, two types of payroll taxes have emerged (see below) that, according to Mr. Egan, may allow a switch from a stand alone payroll tax to a hybrid tax system that is better for the business community and will help create private sector jobs.

Proposal 1: Progressive Payroll Tax

Click on the image to enlarge.

Proposal 2: Gross Receipts Tax

Click on the image to enlarge.

Key Points 

• Property tax costs can be deducted from the rent receipts the landlord receives for the purposes of paying this new rent tax, but no other costs. 
• The Controller's office is estimating a 5-year phase-in period for this new tax to gauge its impact.  With either proposal, the City and County of San Francisco is attempting to tax those industries (banking/financial services and insurance) that currently are exempt from local payroll taxes under state law. 
• The City’s payroll taxes currently yield approximately $350 million a year to the general fund. This commercial rent tax would probably increase what the commercial real estate industry pays in payroll tax by almost a factor of 10--approximately $1 million in payroll taxes is collected from our industry currently; this will go up to an estimated $8-9 million a year. At present, there are 80,000 businesses in San Francisco, but only 6,000 pay payroll taxes. A commercial rent tax would expand the tax base and spread this obligation, according to Mr. Rosenfield and Mr. Egan.

We Need Your Feedback!

Both Mr. Rosenfield and Mr. Egan are requesting feedback on these two proposals from BOMA San Francisco members, affected stakeholders and the general public over the next two weeks.  A interim report will be available shortly--we'll post that report on the blog once we receive it.  The Controller's office will then compile the data collected and produce a final report on the two proposals by the end of May.

Please email Ken Cleaveland, BOMA San Francisco's Director of Government Affairs at kenc@boma.com, and John Bozeman, BOMA San Francisco's Legislative Assistant at johnb@boma.com with any comments you may have.

Central Subway - Updated May 2010 Drilling Schedule

BOMA San Francisco Members:

Please be aware that there have been changes to the Central Subway drilling schedule.  Please read the following notice and the dates in the new scheduled days for drilling.

The San Francisco Municipal Transportation Agency (SFMTA) and PB/Telamon with Treadwell & Rollo will continue drilling operations for supplemental geotechnical investigations; the purpose of which are to provide critical geotechnical and hydro-geologic information needed for final design and pre-construction of the proposed subway tunnel and associated structures.

Here’s the anticipated drilling schedule throughout the month of May:

May 19-20, 2010: Drilling will be on Stockton and Clay in Chinatown during the day.
May 10-13, 2010: Drilling will be on Stockton and O’Farrell (in front of Macy’s) during the day.
May 17-18, 2010: Drilling will be on 4th Street and Folsom on Folsom during the day.
May 24-25, 2010: Drilling will be on Stockton and Market (in front of Virgin) during the day.
May 15-16, 2010: Drilling will be on Stockton and Washington (near the school yard) during the day.

Here are some facts that you should be aware of:

• Daytime working hours are between 7am-6pm. Evening working hours are from 9pm-5am.
• Parking spaces will be temporarily closed as needed during drilling.
• Drilling will be performed using a truck-mounted drill rig, which will remain on the boring location for the duration of drilling.
• Please expect a minor increase in noise as a result of drilling

For further information or questions regarding the drilling, please contact Brajah Norris at (415) 701-5263.

San Francisco Commercial Rent Tax Proposed - We Need Your Feedback!

Ben Rosenfield, Controller for San Francisco and Ted Egan, the City's Chief Economist 

BOMA San Francisco's Government and Public Affairs Committee welcomed Ben Rosenfield, San Francisco's Controller, and Ted Egan, the City's Chief Economist on May 5, 2010 to present two alternative proposals to the current payroll tax structure in San Francisco.  Both include a commercial rent tax.  You can view the presentation by clicking here. With either proposal, the City expects to raise approximately $18 million annually from a commercial rent tax by charging 1.395% on the gross receipts for renters of commercial property.

Background


Mr. Rosenfield mentioned that his staff has been researching this issue for about five months; in April they were able to produce real numbers to solicit feedback from the various stakeholders in the business community that would be affected by the two suggested payroll tax changes.  The Controller's office was asked by the Board of Supervisors to study this question:  What is the most efficient way to collect money from San Francisco taxpayers?  According to Mr. Rosenfield, the goal in answering this question is to not generate more tax revenue, but to identify if there is a better taxing system to use in San Francisco.

Mr. Egan prefaced the presentation by stating that San Francisco is the only city in California that charges only a payroll tax as opposed to a combination of taxes: payroll tax, commercial rent tax, etc.  As a result, two types of payroll taxes have emerged (see below) that, according to Mr. Egan, may allow a switch from a stand alone payroll tax to a hybrid tax system that is better for the business community and will help create private sector jobs.

Proposal 1: Progressive Payroll Tax

Click on the image to enlarge.

Proposal 2: Gross Receipts Tax

Click on the image to enlarge.

Key Points 

• Property tax costs can be deducted from the rent receipts the landlord receives for the purposes of paying this new rent tax, but no other costs. 
• The Controller's office is estimating a 5-year phase-in period for this new tax to gauge its impact.  With either proposal, the City and County of San Francisco is attempting to tax those industries (banking/financial services and insurance) that currently are exempt from local payroll taxes under state law. 
• The City’s payroll taxes currently yield approximately $350 million a year to the general fund. This commercial rent tax would probably increase what the commercial real estate industry pays in payroll tax by almost a factor of 10--approximately $1 million in payroll taxes is collected from our industry currently; this will go up to an estimated $8-9 million a year. At present, there are 80,000 businesses in San Francisco, but only 6,000 pay payroll taxes. A commercial rent tax would expand the tax base and spread this obligation, according to Mr. Rosenfield and Mr. Egan.

We Need Your Feedback!

Both Mr. Rosenfield and Mr. Egan are requesting feedback on these two proposals from BOMA San Francisco members, affected stakeholders and the general public over the next two weeks.  A interim report will be available shortly--we'll post that report on the blog once we receive it.  The Controller's office will then compile the data collected and produce a final report on the two proposals by the end of May.

Please email Ken Cleaveland, BOMA San Francisco's Director of Government Affairs at kenc@boma.com, and John Bozeman, BOMA San Francisco's Legislative Assistant at johnb@boma.com with any comments you may have.

SAVE THE DATE! SFDBI Building Safety Town Hall Meeting - May 14, 2010

BOMA San Francisco Members:

The Department of Building Inspection (DBI) will be hosting a Building Safety Town Hall Meeting on Friday, May 14, 2010, in the Koret Auditorium at the San Francisco Main Public Library, from 1:00-5:00 p.m.. Doors open at 12:30 p.m. on a first come, first seated basis (limited seating capacity).

This is a great opportunity to address your building permit-related questions and concerns with DBI's senior staff and Director.

For more information, visit www.sfdbi.org.  Thank you to the San Francisco Office of Small Business for providing this information.

The News Links - May 3-5, 2010

Mandel on Innovation and Growth: Managers and professionals - Public sector compensation gains have been bigger.

Commercial Real Estate

• Cash-hungry states are putting buildings on the block.
• Negotiation strategies in a down market.

San Francisco

• Voters in 4 Bay Area school districts OK parcel taxes.
• Taxi medallion sales revised to much lower projections.
• Property sales plump city coffers, but is it enough?
• City-union bargain saves jobs.
• Family freebies costing SFMTA.
• Matier & Ross: Costs put transit agencies on 'road to ruin'.
• San Francisco Chronicle: Vote for Gavin Newsom for lieutenant governor.
• SEIU agrees to furloughs as city trims layoff list to 425.
• Bond aims to strengthen quake-vulnerable homes.
• New Sixth Street police substation in the works.
• Kicking smokers to curb could increase bar noise.
• Supervisor Carmen Chu's May 2010 Newsletter can be found here.

Marin/San Mateo/Sonoma

• Marin County Assessor office overhaul at issue in race.

California

• Ruling does little to improve Calif budget outlook. 
• Sacred cows in California get overdue critical eye.
• High-speed rail body to meet for first time since audit report.
• New GOP Lt. Gov. Maldonado urges business owners to "call me first" before leaving CA.
• Feds set up California water task force.
• San Francisco Chronicle: Campbell a strong challenger to Sen. Boxer.
• Whitman, Poizner target immigration, Wall Street in final debate.
• Greece as preview for California.
• Maldo's lite gov -- now a fight over the election to replace him.

The Economy

• California’s economy: Killing the golden goose.
• Big spenders: The consumer economy.  
• Banks still tight with credit, Fed survey says.

Energy & Environment

• Mum's the word on San Francisco's public power deal.
• Local businesses, residents encouraged to apply for state’s environmental award program.

General

Fix Muni Now - Muni Day of Action

BOMA San Francisco Members:


Please join the Fix Muni Now campaign on Wednesday, May 5th to celebrate Cinco de Muni - or Muni Day of Action.  Meet up with other signature gatherers at the corner of Pine and Market Streets anytime between 4:00 p.m. and 6:00 p.m. You'll then fan out to gather signatures at the many Muni stops in the area. Join them for any or all of that time.

They'll have the all the supplies you need to help them gather signatures and get this important Muni reform measure on the November ballot.  For any BOMA members who can help with this effort, feel free to join other signature gathers at Harrington's Bar and Grill afterwards for some refreshments!

If you can't join the signature campaign on Wednesday, there are many more opportunities to choose
from:

Wednesday, May 5th
11am-2pm
Crocker Galleria on Post Street

Thursday, May 6th
12pm-3pm
UN Plaza Antique Market

Thursday, May 6th
4:30pm-6:30pm
Montgomery Muni Station

Friday, May 7th
8:00am-9:30am
Cole @ Carl Streets

Friday, May 7th
4:00pm-5:30pm
16th Street BART Station

Saturday, May 8th
10:00am-2:00pm
Noe Valley Farmers Market

Saturday, May 8th
10:00am-2:00pm
Alemany Farmers Market (meet by the flower stand)

Sunday, May 9th
12:00pm-¬4:00pm
How Weird Street Fair
2nd and Howard Streets

Please RSVP to info@fixmuninow.org or call 415-640-7278.    P.S. Please consider making a contribution to help with this effort.

BOMA San Francisco's PAC Official Endorsements for the June 8, 2010 Primary Election

Click here to access the San Francisco Department of Elections website.

BOMA San Francisco Members:

Please find the BOMA San Francisco Political Action Committee's (BOMA SF-PAC) official endorsements for the June 8, 2010 election, below:

City Propositions:

• Proposition A (School Facilities Parcel Tax) – No Position
• Proposition B (Earthquake Safety and Emergency Response Bond) - Support
• Proposition C (Film Commission) – No Position
• Proposition D (Reform of City Pension Plan) – Support
• Proposition E (Budget Line Item for Dignitary Police Protection) – Oppose
• Proposition F (Residential Renters' Financial Hardship Applications) – Oppose
• Proposition G (Transbay Terminus for High Speed Rail) – Support

Click here to access the San Francisco Department of Elections website for more information about these measures.

State Propositions:

• Proposition 13 – (No Reassessment for Seismic Upgrades) – Support
• Proposition 14 – (Open Primaries) – Support
• Proposition 15 – (Publicly-Funded Secretary of State Pilot-Program) – Oppose
• Proposition 16 – (2/3 Requirement for Creating/Expanding Public Power) – Support
• Proposition 17 – (Auto Insurance Based on Driver’s History of Continuous Insurance Coverage) – No Position

Click here to access the California Secretary of State's website for more information about these measures.

Candidates for the San Francisco Democratic County Central Committee (DCCC) 

What is the DCCC and why is this obscure elected body important?  Click here to read the San Francisco Chronicle's C.W. Nevius' great article about the DCCC on April 24, 2010, and here to read our blog post on the DCCC's April meeting.

Assembly District 12 (Pick 12) 

• Andy Clark
• Ron Dudum
• Dan Dunnigan
• Bill Fazio
• Tom Hsieh
• Mary Jung
• Meagan Levitan
• Connie O’Connor
• John Shanley
• Arlo Hale Smith
• Mike Sullivan
• Matt Tuchow
• Alex Volberding

Assembly District 13 (Pick all)

• Melissa Apuya
• Keith Baraka
• Leslie Katz
• Calvin Louie
• Owen O’Donnell
• Linda Richardson
• Catherine Stefani
• Joe Alioto Veronese
• Scott Wiener