Minutes from February 14, 2017 Open Board Meeting-NAIOP Legislative Issues

Tuesday, February 14, 2017

 Member Only Board of Directors Meeting

 San Bernardino Community College District
114 S. Del Rosa Drive
San Bernardino, CA 92408



Present: Deborah Barmack, Carole Beswick, Mike Burrows, Ken Coate, Adam Eventov, Louis Goodwin, Dick Hart, Mark Kaenel, Lowell King, John Mirau, Dan Murphy, Roman Nava, Cid Pinedo, Michael Rivera, Elizabeth Romero, Kristine Scott, Paul Shimoff, Steve von Rajcs and Ray Wolfe.

Guests: Arnold San Miguel

Announcements: 1) The first Inland Action meeting in the West End will be held next week, February 21, 2017.  Members and alternates are encouraged to attend and bring a guest.  Please inform staff of the names of your guests.  These meeting(s) will be held at 3200 Inland Empire Blvd., First Floor Media Room in Ontario. 2) IA will host a reception in Washington, D.C. on Tuesday, March 21, 2017 and requests member support to help underwrite the cost.  A donation/sponsorship form will be e-mailed to the membership.

M/S/P: Minutes from February 14, 2017.

Steve von Rajcs introduced Joe Cesta, NAIOP President & Matt Englhard, NAIOP Past President & Current Chair.

National Association for Industrial and Office Parks (NAIOP) is a Commercial Real Estate Development Association and is the leading organization for developers, owners and related professionals in office, industrial, retail and mixed-use real estate. They have some 18,000 members nationwide, 200 of which are in our local area. The group advocates for responsible commercial real estate development and effective public policy.

NAIOP Inland Empire Chapter is dedicated to providing: • Leading-edge education and information • Proactive legislative support • Critical business development

These objectives support the chapter’s mission to advance the real estate profession, contribute to the greater community and positively impact economic development and improved quality of life throughout the Inland Empire.

They have returned recently from an advocacy trip to Washington, D.C. and reported that it is still very early in the new administration and there is more rhetoric than detailed plans. Their three main 2017 federal legislative priorities are: Tax Reform NAIOP supports reform of the tax code to make it simpler and to foster economic growth. They oppose proposals that would unfairly disadvantage investment in real estate as compared to other asset classes. They support maintaining depreciation schedules for leasehold improvements that reflect the true economic life of the assets, and oppose measures to eliminate or curtail the use of Section 1031 tax-deferred exchanges or change the capital gains tax treatment of carried interest compensation. They believe a meaningful differential between tax rates on capital gains and ordinary income is vital to the real estate industry.

Capital and Credit Availability NAIOP believes Congress must ensure that capital markets and financial institutions are able to address the current and future credit needs of the commercial real estate industry. Strong oversight is needed to ensure that the actions of various financial regulators do not have an unintended cumulative impact on lending to the industry.

Infrastructure and Transportation Federal funding and support for infrastructure is of critical importance to the commercial real estate industry. NAIOP supports federal government incentives to promote the increased use of public-private partnerships for much-needed infrastructure investment, as well as long-term transportation funding for the maintenance and repair of the nation’s existing highways, bridges and roads.

The group is very active legislatively in the Inland Empire and ited the following key areas: SCAQMD regulations CEQA Reform Fee structure Environmental Terrorism

The SCAQMD likely has the biggest impact on their industry. The new AQMP places the burden of truck emissions on the warehouse industry, citing that they are an indirect source of pollution from delivery trucks.

NAIOP was successful in leading the charge in defeating SB 1387.  SB 1387 would have added three more state appointees to the SCAQMD Board which would have allowed the State to appoint 6 Board members who were not elected officials or accountable to the people our region.  The bill was a state legislative effort to override the work that has been ongoing locally over many years and was authored by the President pro tem of the Senate, Kevin DeLeon.  Appreciation was expressed to Inland Action for sending a letter of opposition and for appearing at public hearings in opposition to the bill.

Mitigation with fees and penalties does not address or resolve the real issues of air quality and/or environment protection.   The well-intended laws of CEQA have a vast amount of publicized abuse, with litigation almost guaranteed regardless of the results of an Environmental Impact Report (EIR).  Even with the many known problems with CEQA there is still no political will to reform.  NAIOP’s new approach to CEQA revision is to tackle one selected piece at a time.  They are working with other groups to achieve a stronger voice.  One CEQA revision they will work towards is to stop allowing lawsuits that are filed anonymously.

The state of California has been confrontational with the federal government especially on the environment. This may not be the time to be adversarial, especially when the state is in dire need of federal funds for our infrastructure and transportation.

A Q & A period followed
Meeting adjourned at 8:35 a.m.