• Established in 1972 · CBPA has over four decades of service to the commercial industrial retail real estate industry
  • Archive for February 27th, 2012

    Feb 27

    CARRIED INTEREST INTRODUCED AGAIN IN CONGRESS

    Posted by Crystal Whitfield | No Comments

    This week House Ways & Means Ranking Member Sander Levin (D-MI) introduced the “Carried Interest Fairness Act of 2012.”

    “There is absolutely no reason why income earned for managing other people’s money shouldn’t be taxed in the same way as income earned teaching or working in a factory,” said Representative Levin in a press release. “This loophole for years has unfairly enabled some of the highest-paid individuals in the country to sharply reduce their tax bills and it is time to close it once and for all.”

    Supporters of the legislation describe it as eliminating a loophole used by Wall Street private equity and hedge fund managers to avoid taxes. However, the proposed partnership tax law change would disproportionately impact the real estate industry since real estate partnerships comprise over 46 percent of all partnerships and many use a carried interest component in structuring development ventures. Although this particular bill has not yet been fully analyzed, the past efforts would have more than doubled the tax rate on real estate partnership carried interest, from 15 percent to nearly 35 percent.

    The commercial real estate industry has vociferously opposed attempts to change carried interest in the past and we continue to think this is a bad idea. Reducing incentives for entrepreneurs to undertake the risks inherent in development would have a pronounced negative impact on the real estate industry, and would lessen the flow of investment capital to the real estate industry.

    Click here to read more about this issue from Mr. Levin.

    Feb 27

    BILLS TO ADDRESS REDEVELOPMENT ELIMINATION ISSUES

    Posted by Crystal Whitfield | No Comments

    Three bills have been introduced containing technical fixes to AB1X 26, the bill that eliminated redevelopment agencies. This information comes from our friends at the California Redevelopment Agencies Association:

    Assembly Speaker John Pérez (D-Los Angeles) introduced AB 1585 to help address some of the problems that have emerged with implementation of AB 1X 26. Its provisions include an urgency clause and the LMIHF related provisions in SB 654 (Steinberg). AB 1585 also expands the definition of “enforceable obligation” to include any loans between the agency and the host city or county within two years of the date of creation of the redevelopment agency or within two years of the date of the creation of a project area if the loan is specific to that project area. Other loans may be also be deemed enforceable obligations provided that the oversight board makes a finding that the loan was for legitimate redevelopment purposes. There are other provisions clarifying the functions of successor agencies and oversight boards.

    SB 654 (Steinberg; D-Sacramento) modifies provisions relating to the transfer of Low- and Moderate-Income Housing Funds (LMIHF) and responsibilities associated with dissolved redevelopment agencies. SB 654’s provisions modify the scope of the term “enforceable obligation” and require that any unencumbered amounts on deposit in the LMIHF of a dissolved redevelopment agency be transferred to specified entities. We Support SB 654.

    Senator Dutton (R-Rancho Cucamonga) introduced SB 986 to ensure bond proceeds are expended on the projects for which they were issued. The bill is pending in the Senate and so far no action has occurred. SB 986 provides that all bond proceeds that were generated by a former redevelopment agency shall be deemed to be encumbered and prohibits a successor agency from sending these proceeds to the county auditor-controller. The bill requires that these bond proceeds must be used by the successor agency for the purposes for which the bonds were sold pursuant to an enforceable obligation that was entered into either by the former agency or its successor agency by December 14, 2014.

    AB 1585, SB 654, and SB 986 are steps in the right direction to address the many concerns raised by CRA members, host jurisdictions, and others.  Please keep your state legislators informed of these fixes and ask for their support.

    Feb 27

    BUSINESS, LABOR, ENVIRONMENTAL GROUPS SUPPORT SB 1130

    Posted by Crystal Whitfield | No Comments

    The L.A. Times was at the press conference announcing the BETER program. Click here to read the story and see a quote from our very own Rex Hime.

    Feb 27

    ON BILL FINANCING AND LOAN PROGRAM BILL GARNERS SUPPORT

    Posted by Crystal Whitfield | No Comments

    Two measures pertaining to “Energy Efficiency” that have already been identified received positive analysis from some of our industry experts come from a Senator who also chairs the Senate Select Committee on Energy Efficiency, Kevin de Leon (D-Los Angeles):

    SB 998 (de Leon; D-Los Angeles) would require the Public Utilities Commission (PUC) to authorize an electrical corporation to develop and implement an on-bill repayment program for eligible energy efficiency and renewable energy investments.

    SB 1130 (de Leon; D-Los Angeles) creates the statewide Building the Economy Through Energy Retrofits (BETER) program, to make energy efficiency upgrades cost-effective for commercial property owners by pooling risk to offer low cost loans.  This bill is sponsored by State Controller John Chiang.

    The goal of these bills is to create innovative financing tools that don’t rely on taxpayer dollars and that help leverage private capital investment to stimulate more energy efficiency retrofit projects.  We look forward to working with Senator de Leon and Controller Chiang on these measures.

    Feb 27

    SO MANY GOOD GREEN IDEAS

    Posted by Crystal Whitfield | No Comments

    Many of the bills introduced this year are once again focused on greenhouse gases, energy efficiency, and/or green buildings, in one way or another. The word “green” currently appears in 42 separate pieces of legislation.  Forty-eight (48) bills pertain to the California Environmental Quality Act (“CEQA”).  Sixty-two (62) bills have the word “Green” in them.  And seventy-six (76) measures use the term “energy efficiency.”  Again, we will read all of these measures and identify “the good, the bad, and the ugly,” and hope that you will help us push forward the good ones, fix the bad ones, and stop the latter category.

    Feb 27

    BILL INTRODUCTION DEADLINE TODAY

    Posted by Crystal Whitfield | No Comments

    Today is a major milestone in the 2012 Legislative Session.  Bill Introduction Deadline.  Hundreds of bills will be submitted just yesterday and today.  Your staff in Sacramento is already deep into the task of reading this mountain of legislation in order to identify policy items that will impact your business.  Last year more than 2,600 legislative measures went through the process and we followed almost 500 of them!