BOMA CALIFORNIA BOARD TAKES ACTION ACTION ACTION!

The BOMA California Board of Directors met in San Francisco for its second quarterly board meeting of 2008 and took action on several significant items of importance to the commercial real estate industry. BOMA California is a federation of all eight metropolitan BOMA local associations and serves as the collective membership through its mission of “preserving and promoting the interest of California commercial real estate professionals through legislative and regulatory advocacy.” All local associations were represented at the meeting.

BOMA California is headquartered in Sacramento and has a full-time presence at the Capitol and state regulatory agencies. To follow are details of many of the important items that were addressed at this meeting.
 

STATE HISTORICAL SAFETY ADVISORY BOARD APPOINTMENT

The BOMA California Board named industry veteran Frederick Freund, Senior Vice President, from the San Francisco-based Hanford/Freund & Company, as its choice to represent building owners on the State Historical Safety Advisory Board. Last year, AB 542 (Gaines; R-Roseville) was signed into law and provided for a seat on the board named by BOMA California. Mr. Freund, selected through a competitive process, has deep experience as an owner and operator of historical properties. As well, he has been an active member of the BOMA San Francisco Codes Advisory Committee for the past 10 years. Please join us in congratulating Mr. Freund for his selection as the commercial real estate representative on this board and thank him for his continued service to our industry.
 

AB 32 CARBON FOOTPRINT STUDY/REPRESENTATIVE APPROVED

AB 32, California’s landmark “Global Warming Solutions Act,” mandates that all industries in the state reduce greenhouse gas emissions to 1990 levels. This paradigm-shifting edict has the potential to drastically impact the commercial real estate industry. In recognition of the need to actively engage in the regulatory process, BOMA California has approved a significant expenditure and partnership with several other real estate professional organizations, to fund a study that will help regulators accurately assess our industry’s contribution to carbon emissions. Additionally, funds approved by the board will help provide support for a representative to directly engage in discussions with the regulatory agencies that are writing rules to implement the law.

Through this effort, BOMA California hopes to accomplish several goals:

1) Assist the state in correctly setting the 1990 baseline. If we don’t help the ARB quantify our 1990 levels of emissions, there are several advocacy groups that will fill that void and we will have no data to combat whatever they provide;

2) Quantify energy usage reduction that our facilities have obtained since enactment of Title 24 in 1978, to make an argument for “early action” carbon credits. We are already laying the groundwork that our industry has gone “above and beyond” many other industries in terms of being early adopters of green technology and that should be recognized and rewarded.

3) Combat mandates that are being proposed at the state and local levels for strict adoption mandates of private third party green building certification programs as building code policy.

BOMA California believes that this investment to actively engage in the AB 32 process is the only way we can stave off extreme costs to the industry due to over-reaching or unobtainable mandates.
 

BOMA CALIFORNIA ELECTRICITY RATE ADVOCACY – HUGE DIVIDENDS

In a resolute example that BOMA members’ investment to engage in the regulatory process pays off many times over in savings to their companies, the board heard a comprehensive report outlining our engagement in the electricity arena. Late last year, the California Public Utilities Commission unanimously approved an agreement with twenty-two parties, including BOMA California, which reduced large commercial office building electricity rates in the PG&E territory by 9%. This reduction moves our industry closer to the cost of service model, which will result in real cost reductions of at least $23 million for BOMA members alone over the next three years, and at least $43 million in energy cost savings to all large commercial customers in the PG&E service area.

Included in that decision, for the first time in 45 years, building owners will be allowed the opportunity to submeter tenants for their actual in-space energy consumption. The historic agreement will enable our industry to actively engage tenants to better understand and reduce their energy usage. BOMA California is currently working with PG&E to write guidelines for implementation and is actively working to get submetering approved in all areas of the state.

This year, we also began extending our advocacy work to issues of energy efficiency. This included testimony on the AB 2160 Green Building Report that was presented to the California Energy Commission and the filing of Comments on California’s Energy Efficiency Strategic Plan with the CPUC. The main thrust of these activities is to establish the need for a compelling business case for building owners and tenants to make incremental investments in efficiency and load management.
 

ELECTRICAL ADVOCACY -- DYNAMIC PRICING AND GENERAL RATE CASES

BOMA California’s electricity rate advocates are also actively working on the dynamic pricing phase of PG&E’s General Rate Case (GRC). Our effort has been focused on two fronts – participating in the formal CPUC proceedings and working with the Lawrence Berkeley Lab Demand Response Research Center (DRRC) to design and test various versions of dynamic rate structures. BOMA California has submitted comments supporting the development of Market-Based Real Time Prices and opposing directives for the utilities to develop new versions of Critical Peak Prices (CPP).

The board also heard an update about BOMA California’s early engagement in two GRCs involving territories that cover many of our Southern California members. The CPUC has adopted a Settlement Agreement for the SDG&E GRC. This settlement specifies both new rates and the approval of submetering in the SDG&E service territory. BOMA California’s intervention in this proceeding should yield an electricity cost savings of about 13.2 cents per square foot per year for commercial buildings. Lastly, Southern California Edison has filed its 2009 GRC Phase 2 Application and BOMA California is again actively engaging in this proceeding. The application is currently void of any discussion about submetering and we are working to have that issue be included in the proceeding.
 

CODES ADVOCACY – GREEN BUILDING CODES

The board discussed the multitude of issues which BOMA California is actively engaged in and representing industry interests at several regulatory agencies. Our codes advocacy team covers proceedings at various state agencies as diverse as the Building Standards Commission, the Division of the State Architect, the State Fire Marshall, the Department of General Services, and several others as issues arise.

BOMA California is actively engaged in the Green Building Code development and adoption process. We are a key leader in the review and analysis of the Building Standard Commission’s (BSC) Draft Green Building Standards and actively coordinate with allied professional organizations to raise issues of concern. In fact, at the two-day BSC Green Building Code Advisory Committee in February, our comments and concerns were used as a de facto agenda to help guide parts of the discussion. Ultimately, we were successful in arguing that several proposals should be dropped from consideration due cost-effectiveness and/or feasibility concerns, or due to conflicts with the local land use and site planning process.

Our members were also represented at several workshops to debate the CPUC/CEC policy proposal that all new commercial construction be “net zero energy” by 2030. It now seems clear that through our participation, staff at the agencies recognize that they may have grossly underestimated the size of the solar energy systems that will be needed “on-site” in order to meet these aggressive goals. We have also been successful in making it clear that such proposals are technically not feasible for many building types and uses, such as high-rise commercial and multi-tenant facilities. Unfortunately, we have seen these proposals introduced as legislation in the State Legislature, which opens an additional, and more political, battle front on these proposals.
 

CODES ADVOCACY – ACCESS SIGNAGE, PARKING

BOMA California codes advocates are also actively following the Division of State Architect’s Access Committee proceedings. Proposals are being considered to increase signage requirements in commercial buildings. Ideas range from mandating “talking” signs to requiring that tactile signs not only be adjacent to doors but that non-tactile signs also be placed on the doors. As well, we are closely monitoring proposals being discussed by the committee related to additional on and off-street parking requirements.
 

LEGISLATIVE ADVOCACY – POSITIONS SET ON OVER 200 BILLS

Over the first three months of 2008, BOMA California staff and board members have engaged in a process to filter through the more than 4,800 separate pieces of legislation introduced by the California State Legislature this session to identify those that may have an impact on the commercial real estate industry. Through this review process, more than 230 bills have been identified that may have a direct impact on BOMA members, and will be actively tracked. The board reviewed and prioritized a long list of bills identified as having the most significant impact on commercial real estate and authorized active legislative positions on 60 of these measures (31 “oppose” and 29 “support”).
 

LEGISLATIVE ADVOCACY – SUPPORTED BILLS

Here are a few examples of bills that BOMA California is actively supporting and/or sponsoring:

AB 811 (Levine; D – Van Nuys) Authorizes cities to create local funding programs to enter into financing agreements with willing property owners for the installation of distributed generation renewable energy sources and/or energy efficiency improvements.

AB 1451 (Leno; D - San Francisco) Positively modifies a property tax exclusion related to the construction or addition of an active solar energy system.

AB 1767 (Ma; D - San Francisco) Discourages graffiti crimes by disallowing civil-compromise for vandals.

AB 2025 (Silva; R - Newport Beach) Raises the dollar amount threshold for tenant abandoned property before a building owner/manager must conduct a public sale.

AB 2118 (Villines; R - Fresno) Prohibits a state agency from adopting a regulation that would require use of a specific technology unless that technology has been operational and proven effective.

AB 2130 (Hayashi; D - Castro Valley) Exempts workout facilities that do not maintain personnel on the premises from staffing requirements of existing laws relating AEDs.

AB 2144 (Smyth; R - Santa Clarita) Creates the “California Green Building Program” to recognize buildings designed to exceed state energy and water conservation standards.

SB 747 (Corbett; D - San Leandro) Focus for ADA lawsuit reform compromise that is being negotiated to protect property owners from “drive-by” lawsuits.

SB 1231 (Correa; D - Santa Ana) Creates a “Model Defensible Space Program,” to address issues related to fire safety in fire prone areas.

SB 1473 (Calderon; D - Montebello) Clarifies the Building Standards Commission as the primary state agency responsible for proposing and adopting non-residential Green Building Codes.

SB 1491 (McClintock; R - Thousand Oaks) Prohibits the State from mandating installation of a device that may be controlled remotely by any person or entity other than a building resident or non-residential owner/manager such as programmable communicating thermostat.

Click here to read the full legislative language for any of these bills.
 

LEGISLATIVE ADVOCACY – OPPOSED BILLS

Here are a few examples of bills that BOMA California is actively opposing:

AB 1065 (Lieber; D – Mountain View) Requires that all new buildings reduce energy usage at least 50% by 2020 and at least 80% by 2030.

AB 2030 (Lieu; D - Torrance) Requires that all new commercial buildings be “zero net energy” by 2030; requires all new non-residential buildings to generate 50% of energy on-site.

AB 2112 (Saldana; D – San Diego) Requires that all new residential buildings be “zero net energy” by 2020; requires all new homes, including multi-residential buildings, to generate 50% of energy on-site.

AB 2153 (Krekorian; D - Burbank) “Zero Net Water” mandate. Requires new residential or nonresidential projects to minimize and offset the projected water usage in a manner that could act as a building moratorium.

AB 2450 (Davis; D – Los Angeles) Would require a landlord who acquires title to residential rental property through foreclosure to provide 90 days notice to a tenant before the tenant may be removed.

AB 2461 (Davis; D – Los Angeles) Split roll property tax “study.” Gateway bill that may be used as a vehicle for a renewed effort to attempt a re-write of Proposition 13 protections and allow non-residential properties to be taxed at a higher rate than residential properties.

AB 2538 (Ruskin; D – Redwood City) “Carbon Labeling Act of 2008.” Requires the state to develop and implement a program for standardized labeling of the carbon footprint, of consumer products sold in California.

AB 2939 (Hancock; D – Berkeley) Allows local agencies to supplant statewide Title 24 building codes with private third party “green” building standards.

SB 1299 (Migden; D – San Francisco) Authorizes local jurisdictions that have rent control to require a property owner to replace the same number of residential rental units that were razed, and to make the replacement residential units subject to the same price control that applied to the former units.

SB 1550 (Florez; D - Fresno) Requires the Secretary of State to develop a climate change disclosure standard for use by companies doing business in the state.

Click here to read the full legislative language for any of these bills.
 

UPCOMING EVENT: GREEN CALIFORNIA SUMMIT AND EXPOSITION APRIL 7-9

Builders, property managers, developers, facilities managers and others involved in real estate should not miss the Green California Summit (April 7-9, Sacramento Convention Center). The event, guided by an Advisory Board that includes senior state officials and leaders from the real estate community, combines an exposition featuring hundreds of green products and services with seminars and training. Discover green tools that can save you money, preserve the environment and give you a competitive edge - and find out about regulations and policy that are changing the industry. For more information, click here. BOMA California members (and all local association members) get a special 20% discount – simply enter “BOMA” as a Coupon Code towards the end of the registration.
 

BOMA CALIFORNIA 2008 CALENDAR

TUESDAY, JUNE 10 & WEDNESDAY, JUNE 11, 2008 —
BOMA California Board Meeting & CA Commercial Real Estate Summit
Sacramento (Hyatt Regency)
Times and locations TBA

OCTOBER/NOVEMBER, 2008 (DATE TBD) —
BOMA California Annual Meeting
Times and location TBD
Los Angeles