GOVERNOR SIGNS STATE BUDGET

Although a teeny-bit late, Legislators from both parties and from both houses gathered today to watch Governor Schwarzenegger sign the 2007-2008 California State Budget and the echoes from all the backslapping is still reverberating.

In his press release, the Governor states that this budget 1) creates an “historic Reserve,” 2) pays down debt, 3) fully funds education and Public Safety, while 4) eliminating the state’s operating deficit. Check back next May to see if these headlines hold true.

Here are some of the interesting details of the spending plan, as outlined by the Governor’s press release:

* The 2007 Budget Act builds an unprecedented safety net for California’s Economy. This budget has a $4.1 billion reserve—the largest of any budget act in the state’s history.

* Holds spending to less than one percent and promotes responsible growth. The Governor’s $703 million in General Fund vetoes hold spending growth in this budget to just 0.6 percent.

* Eliminates a projected $16.5 billion state deficit. The Governor’s actions zero out this year’s operating deficit. When the Governor took office, the state’s projected deficit for the fiscal year that ended on June 30 was $16.5 billion.

* Fully funds our schools, law enforcement and our environmental priorities. This budget fully funds K-12 education, increasing Proposition 98 funding by 3.9 percent, and the Governor’s higher education compact. It fully funds law enforcement and the state’s compact with the judiciary.

* Funding Environmental Protection -- the 2007 Budget Act continues Governor Schwarzenegger’s commitment to our environment by directing more than $250 million to improve our air quality and providing nearly $25 million to fight global warming. Highlights include:
-- $250 million in Proposition 1B funding to improve air quality along California’s main highways and trade corridors.
-- $105.3 million to reduce pollution in our water sources and fund local community clean-water projects.
-- $23.7 million for implementation of AB 32, the California Global Warming Solutions Act.
-- $6.03 million for the Governor’s Hydrogen Highway Initiative, to further diversity the use of alternative transportation fuels in California.
-- $3.1 million to accelerate the cleanup of brownfield sites.

Click here to read the full press release and see video of the signing ceremony and press conference.

BUDGET STALEMATE? WHAT STALEMATE?

In their glee to celebrate coming to agreement on the state budget, legislators quickly forgot about that the 67 day stalemate. Hatchets were quickly buried and exchanged for Louisville Sluggers as everyone rushed-off to play in the annual legislative softball game. The Republicans won for the sixth time in seven years, leading Assemblymember John Laird (D-Santa Cruz) to quip, “Republicans are relevant two times per year – during budget negotiations and at the softball game.”

WHAT WAS GAINED BY THE STALEMATE?

Mr. Laird is right – the minority party was very relevant this budget cycle and can celebrate a few things that made it into the budget and a few things that have been excised from the document. To wit:

* Ensuring that transportation and levee projects throughout the state are not tied up by frivolous environmental lawsuits
* Repealing the costly mandate that all state buildings meet LEED Silver standards
* Forcing $700 million in line item vetoes from the General Fund to pare back state spending
* Forcing the operating deficit to go to $0 -- with no new taxes
* Assuring transportation bond monies are available to railroads to meet air quality mitigation demands
* Deleting a provision that would have increased trial lawyers filing civil Medi-Cal suits

HEALTH CARE DEBATE…TO BE CONTINUED

In a move that signals to insiders that the debate on healthcare will not be resolved this year, the Governor took a firm stand against the Democratic healthcare proposal moving through the Legislature. For the first time throughout this lengthy debate, he publically stated that he would not support an expansion of medical insurance if it were financed solely by new requirements on employers.” Click here to read more about this issue.

SAN FRANCISCO TARGETS FORMULA RETAIL

Under a newly enacted planning code, San Francisco requires any “formula” retailer to obtain a conditional use authorization (CUA) permit if the development is located in an area zoned as a “Neighborhood Commercial District.” Starbuck’s is the first “formula” retailer to go through the permitting process. Though plans were approved by the Planning Commission, an appeal was filed by a neighborhood activist group. The Board of Supervisors will now hold a hearing to determine if the approval should be overturned. If the Board of Supervisors overturns the Planning Commission’s approval, landlords and retailers may face appeals on all proposed developments in “Neighborhood Commercial Districts.” If you would like to send a letter supporting retailers in S.F. please send an email to CBPA and we will send you a sample letter and address.

FORMER ICSC CHAIRMAN CHARLES GROSSMAN DIES

Charles Grossman, a longtime friend of CBPA, and active ICSC member for more than 30 years, serving as chairman for the 2005-2006 term, has passed away. Grossman worked as executive director of the ICSC's Education Foundation and was a managing director at ING Clarion Partners until earlier this year. "Charlie played a key role in the evolution of ICSC," ICSC President and CEO Michael P. Kercheval said. "Up until the final days of his life, Charlie worked to transform the foundation into a major instrument of good for the retail real estate industry." Click here to read more about Charles Grossman.

STRATEGIC ISSUES CONFERENCE: GLOBAL WARMING AND THE BUSINESS OF REAL ESTATE

Four major industry groups are combining forces to sponsor a high level discussion regarding the impacts of “global warming” policy on our industry. From AB 32 greenhouse gas regulations to the legislative focus on “green building” mandates, this conference promises to deliver the most up to date thinking about the politics driving these policies and will offer strategic discussion to set the course on how we can proactively be at the table and positively influence policy.

Click here to see the Strategic Issues Conference Website.

Joint sponsors for this event include: California Business Properties Association (CBPA), California Building Industry Association (CBIA), Building Owners and Managers Association of California (BOMA California), and Retail Industry Leaders Association (RILA),

The event will be held November 1-2, 2007, at the Meritage Resort in Napa Valley. A stellar line-up of policy and decision-makers from Industry, the Schwarzenegger Administration and Legislature, as well as a respected member of the political press corps, is coalescing for the conference. Until we can announce confirmed names of speakers, here is the framework agenda:

THURSDAY, NOVEMBER 1, 2007
4:30 p.m. – 6:00 p.m. Kick-off Reception in the Wine Caves
6:00 p.m. – 8:30 p.m. Dinner with Special Guest Speaker

FRIDAY, NOVEMBER 2, 2007
8:00 a.m. – 9:00 a.m. Breakfast with Special Guest Speaker
9:00 a.m. – 11:30 a.m. Panel Presentations
* Building Green/Green Building Policies
* CEQA / AB 32
11:30 a.m. – 1:00 p.m. Luncheon with Special Guest Speaker

For early-bird registration information and special room rates, please contact Tracy Fujii at CBPA, 916-443-4676, or tfujii@cbpa.com.

Don’t just react – be a leader – participate in this conference and shape important issues that will affect your businesses.

BOMA CALENDAR 2007/2008

November 1 & 2 – BOMA Cal/CBIA/CBPA Fall Joint Legislative Conference
BOMA Cal Annual Meeting
Napa Valley (Meritage Resort)

January 15 – BOMA Cal Board Meeting
Los Angeles
In conjunction with IREM/BOMA GLA Forecast Breakfast

March/April (date TBD) – BOMA Cal Board Meeting
Location TBD

June 10-11 – CA Commercial Real Estate Summit – BOMA Cal Board Meeting
Sacramento (Hyatt Regency)

October/November (date TBD) - BOMA Cal Annual Meeting/20th Anniversary Event
Location TBD