In This Issue:

• AB 32 FEES ADOPTED

• INITIATIVE FILED TO REPEAL 2/3 FISCAL VOTE REQUIREMENT

• STUDY CONFIRMS YOU ARE BURIED BY REGULATIONS

• SALE-LEASEBACK STATE-OWNED OFFICE BUILDING

• CALIFORNIA GREEN BUILDING CODE GOES NATIONAL

• CITY COUNCIL SHELVES PRIVATE GREEN CODES

• TAX PLAN OVERDUE

• NORCAL CITY MANAGERS LUNCHEON

• 2009 STRATEGIC ISSUES CONFERENCE

• CBPA 2009 CALENDAR

AB 32 FEES ADOPTED

Despite strenuous objections by many business groups, including the commercial real estate industry, and several third party studies showing that the regulation is going to be a major drag on the state’s economy, the California Air Resources Board today approved the nation's first statewide carbon fee. The fee will be imposed at the end of 2010 and is intended to raise $63 million annually during its first three years. The amount will level off at $36 million during the fifth year, and is meant to pay for bureaucratic costs for implementing the program.

Although the fee will be directly assessed on in industries such as utilities and oil refiners, increased costs will be borne by all businesses and consumers who will pay through higher energy costs. Many are also worried that the fee is another “nail in the coffin” for California’s shrinking manufacturing base and will induce the loss of many high paying jobs.

Recent studies have shown businesses in this state face billions in dollars of costs from regulations (see below), and will pay even higher costs under AB 32. Click here to see the staff presentation at the hearing.

INITIATIVE FILED TO REPEAL 2/3 FISCAL VOTE REQUIREMENT

In addition to a “Split Roll” initiative filing by SF Assessor Phil Ting, the other shoe has dropped. Liberal activist George Lakoff from Berkeley has filed a “Title and Summary” request with the Attorney General’s office for an initiative that would repeal the 2/3 fiscal vote tax protections. Lakoff, known for “framing” political issues, is referring to this initiative as the “California Democracy Act.” Click here to view the documents filed with the Attorney General. The idea has a long way to go until it gets on the ballot, but we now have two active campaigns meant to eviscerate the few fiscal protections taxpayers have in this state.

STUDY CONFIRMS YOU ARE BURIED BY REGULATIONS

A new study, confirming what you already know, shows costs of state government red tape has a huge negative impact on business, jobs, and ironically government revenue. The report, “Cost of State Regulations on California Small Businesses Study,” was mandated by the Legislature and was originally due in 2007.

The study finds that the total cost of regulation to the State of California is $492.99 billion which is almost five times the State’s general fund budget, and almost a third of the State’s gross product. The cost of regulation results in an employment loss of 3.8 million jobs which is a tenth of the State’s population.

The figures are even more astounding because they do not include costs of AB 32.

This study provides the most comprehensive and complete analysis of the total regulatory burden in California. Click here to read the study.

SALE-LEASEBACK STATE-OWNED OFFICE BUILDING

The State of California, Department of General Services, Real Estate Services Division (RESD), is seeking proposals from qualified and California licensed commercial real estate brokerage and/or investment banking firm(s) with qualified personnel having previous experience in providing commercial real estate brokerage and advisory services to sellers on large scale investment income property sales and/or sale-leaseback transactions for governmental and/or corporate clients. Click here for the RFP.
 

CALIFORNIA GREEN BUILDING CODE GOES NATIONAL

In 2008, California adopted the country’s first statewide Green Building Standards Code (come to be known as “CalGreen”). The code is already undergoing its second revision and has been hailed for the potential it has to increase the sustainability of all new buildings in a state that is already building the “greenest” buildings in the country. In a nod to California’s good work, the International Code Council has announced that it is developing a new code for commercial buildings entitled the International Green Construction Code, and will use the current California Green Building Standards Code as a key reference document. Click here to read more.

CITY COUNCIL SHELVES PRIVATE GREEN CODES

Citing the fact that updated CA Green Building Codes are tough enough guidelines for the construction of sustainable buildings, two cities have recently announced that they are shelving plans to adopt local ordinances based on private certification programs, opting instead to rely on the statewide standards. Quoted in a recent newspaper story, Aliso Viejo Mayor Bill Phillips stated that "The thought process was: instead of passing an ordinance right now on green buildings, let's wait and consider the regulations in this new building code," he added. "If we want to put stuff on top of that, we can always do that later."

Taking it a step further, the City of Irvine will incorporate the new statewide standards nine months before the state mandate is in place. The Irvine City Council unanimously approved the new codes, effective in April, while directing staff to cease work crafting an ordinance based on private green building certification programs.

Although there has been much talk about local green building ordinances, to this point less than ten percent of localities have adopted a LEED-based commercial green building ordinance. Some observers believe that early adopters were forced to use the private programs simply because there was no viable public alternative. Now, with a robust public alternative, many believe that we will see more and more locals adopt the voluntary “tiers” contained in the program as elevated local building code. Using the statewide program facilitates will cause an increase in sustainable buildings without greatly increasing costs or overlaying a redundant bureaucratic process. It will also encourage investment in ever more sustainable buildings by companies that build in more than one jurisdiction since they will be able to maximize the cost effectiveness of new technologies and leverage a common statewide standard through economies of scale.

Click here to read about Aliso Viejo and here to read about Irvine.

TAX PLAN OVERDUE

The work of the Commission on the 21st Century Economy – a panel of experts convened to make recommendations to the Governor and Legislature about changes in California’s tax structure – was due to be submitted to the governor and Legislature almost a week ago. Those familiar with the issue report the commission is having trouble getting political agreement on a consensus document.

One very controversial part of the plan is a proposed business net receipts tax that is designed to be a type of value-added tax in which companies are taxed on total receipts minus all purchases from other firms. This new and complicated tax scheme is drawing fire from activists on the right, left, and middle.

We will let you know when a final plan emerges.

NORCAL CITY MANAGERS LUNCHEON

On Thursday, October 29, NAIOP is co-sponsoring the City Managers Luncheon with Lambda Alpha International at the Dante Club in Sacramento. Eight City Managers are currently scheduled to appear and more are expected. This event will be moderated by our own Rex Hime. Sponsorship opportunities are available. See this flyer for information.
 

2009 STRATEGIC ISSUES CONFERENCE

Please join us on Nov. 5-6, as several major industry groups combine forces to sponsor a high level discussion regarding “Climate Change” policy and its impact on business in California. From AB 32 greenhouse gas regulations to the legislative and regulatory focus on land use, 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 industry can proactively be at the table and positively influence policy. Click here for registration and discounted room rates. Please contact Melissa Martinez or click here for more information.
 

CBPA 2009 CALENDAR

November 5-6, 2009
CBPA Board Meeting and Strategic Issues Conference
Napa, CA (Meritage)

For more details and to register, click here.

February 18, 2010
CBPA Board Meeting
Sacramento

June 22-23, 2010
Annual CBPA Board Meeting & CA Commercial Real Estate Summit
Sacramento

October 21, 2010
CBPA Board Meeting & CBPA Industry Awards Dinner
The Fairmont Hotel, Newport Beach