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  • Archive for November 20th, 2015

    Nov 20


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    CBPA would like to wish all of its members a very Happy Thanksgiving. California is a great state, we live in a wonderful country, and we have a lot to be thankful for.

    We hope you get to spend some quality time with loved ones next week. And please take the time to reflect upon and appreciate the men and women in uniform who are serving our country overseas at this time and think positive thoughts for people in harm’s way throughout the World.

    Nov 20


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    Please note, the Weekly Alert will be on hiatus from now until the New Year. But don’t worry, if anything major happens, we’ll be sure to let you know. We will return to our regular schedule on Friday, January 8, to bring you all the news, gossip, and inside information from Sacramento. In the meantime, if you have any questions, comments, or need information, please email Matthew Hargrove.

    Nov 20


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    At its November meeting, CBPA Board of Directors took early positons on two propositions that will appear on the Nov. 8, 2016, statewide ballot.

    Measures have not been assigned ballot designations yet by the Secretary of State:

    Firstly, the board voted to “support” the K-12/Community College Facilities School bond. This measure asks voters to approve $9 billion in general obligation bonds: $3 billion for new construction and $3 billion for modernization of K-12 public school facilities; $1 billion for charter schools and vocational education facilities; and $2 billion for California Community Colleges facilities. The measure also bars amendment to existing authority to levy developer fees to fund school facilities, until new construction bond proceeds are spent or December 31, 2020.

    The board voted to “oppose” what is currently referred to as the “Coropassi initiative,” named after its chief proponent.  This initiative is widely considered to be focused on stopping the Governor’s attempts to build new water infrastructure.  If passed, it would require statewide voter approval before any revenue bonds can be issued or sold by the state for projects that are financed, owned, operated, or managed by the state, if the bond amount exceeds $2 billion.

    So far, a total of seven measures have qualified for the ballot in 2016.  No “split roll” initiatives have qualified or are currently officially in circulation, however, one measure that would increase property taxes on properties valued over $3 million is “out on the street” gathering signatures.

    Nov 20


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    The state is currently in the process of writing regulations to implement energy efficiency programs that will have an impact on your buildings.  Much of the current focus is shifting from new construction to existing buildings.  The best way to prepare your business for success is being active, engaged, and making business decisions that will enable you to stay ahead of our state’s minimum requirements.

    The Statewide Energy Efficiency Collaborative (SEEC) on Thursday, December 3rd from 12:30-1:30 for a is hosting a webinar on SB 350 and AB 802, featuring CEC Commissioner Andrew McAllister and Commissioner David Hochschild. Participants will have the opportunity to hear from CEC leadership about these new laws and how they fit in with the State’s overall energy goals, learn about how these laws will impact local governments, and ask questions.  Click here to register and participate. Commercial Real Estate leaders and professionals are working with the CEC and CPUC and BSC every step of the way and have scheduled a pre-meeting to discuss issues related to the SEEC webinar.  If you would like to participate, let us know.

    State law has mandated very significant goals and only through the participation in the regulatory process can we assure that the rules and regulations promulgated make sense.

    Nov 20


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    Last week, the Energy Commission held its first regulatory hearing on AB 802, the bill that repealed AB 1103 and re-calibrates the regulatory process and addresses a number of complaints our industry has had about since AB 1103 was in the Legislature.

    The commercial real estate industry supported AB 802 because it fixed many operational complaints we have had about the program over the years, primarily the fact that it forced a benchmark in the middle of a real estate transaction and focused on actively managed buildings only.

    The regulations on this are on the fast-track because the Commission has already invested too much time and effort on AB 1103, many stakeholders, commission staff, and commissioners are all on the same page moving forward.

    In discussions at the workshop last week and follow-up with stakeholders and experts, so far our members think the new law and the regulations are “on the right track.”

    Click here for a copy of the AB 802 scoping workshop presentation.

    As a reminder, here is what has changed moving from the now repealed AB 1103 regulations:

    -AB 1103 mandated ALL buildings must be benchmarked regardless of size or use; AB 802 states that buildings 50K s.f. and above must be benchmarked and allows the Energy Commission some discretion to exempt certain building types and situations (i.e. the CEC could decide that long-term empty buildings or buildings scheduled for razing need not be benchmarked).

    -AB 1103 was a transaction based program – benchmarking was triggered by a sale/lease of whole building/refinance.  The transaction based approach had many unintended consequences such as requiring actively managed building to be benchmarked more often than buildings that are not; put an unnecessary technical process in the middle of a real estate transaction; and required benchmarking be provided to parties that were not making management decisions (i.e. lenders);  AB 802 allows the CEC to determine the best trigger for benchmarking – that could be transaction based or time certain (i.e. once every two years).

    – Under AB 1103 many building owners were unable to get tenant energy information from local utilities; AB 802 clarifies that utilities are required to provide information; in an aggregated format if there are privacy concerns in multi-tenant buildings.

    – AB 1103 treated income producing properties separately by only focusing on commercial; AB 802 – with the support of the Apartment industry – includes certain multi-family housing properties.

    – AB 1103 provisions will be suspended as of the end of this year (until otherwise notified we recommend you comply with the current provisions of AB 1103 until then).  AB 802 provisions will become operative on January 1, 2017 – the CEC will write regs to implement in 2016.

    There will be no statewide energy use disclosure requirement in 2016. During this time, Energy Commission staff will engage in a public process to develop regulations and establish the reporting infrastructure for the new program. However, we recommend that you continue to benchmark buildings on a regular basis as it makes good business sense.

    So far our members have answered the call to be involved in this process and we appreciate the Energy Commission’s willingness to listen to engage with our experts and consider recommendations from real estate professionals.

    Nov 20


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    Although we ran this story last week, we are re-printing it because it addresses a statewide regulation that has been extremely challenging for our industry and we want to make sure you are aware of this good news.

    After almost a year of working with the Energy Commission, Docket No. 15-BSTD-01 was adopted to address issues related to the 2016 Building Energy Efficiency Standards Lighting Retrofit Code.

    As California’s energy code has lead the way in the nation making sure that our buildings are the most efficient in the country, from time-to-time regulations may not work out in the real world as they do on paper.  Even with thorough analysis and an inclusive stakeholder process, the lighting retrofit requirements in question have turned out to be more complicated and burdensome to implement than expected when the Commission adopted the package.

    On behalf of the commercial, industrial, and retail real estate industry we worked with the CEC and other stakeholders on regulatory language that will still achieve the same, if not greater, energy savings by providing an alternative path to compliance, which will bring down the cost and complication of compliance in some instances and assure that fewer tenant improvements are stalled due to a cost effectiveness concerns.

    We thank the CEC and its staff for working through to a fix on this issue.  Here is part of a press release they sent on this topic:

    “The Energy Commission adopted nonresidential lighting standards that allow for several cost effective approaches to lighting upgrades. Compared to the 2013 lighting alteration standards, the newly adopted standards are expected to save an additional 112 gigawatt hours of electricity per year – equivalent to the annual electricity use in about 16,000 homes. Energy efficiency building standards are updated every three years. These nonresidential lighting standards are part of the broader 2016 Building Energy Efficiency Standards adopted in June.”

    Click here to read the new language and see the presentation.

    Nov 20


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    The International Council of Shopping Centers (ICSC) has the scoop:

    The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have been working jointly for years to develop a new model for the recognition of assets and liabilities arising under lease contracts as part of the global effort to establish uniform corporate financial accounting standards. These efforts to reconsider the standards under FAS 13 and IAS 17 are based on long held views regarding the proper theoretical treatment of operating leases and other off balance sheet arrangements.

    Click here for the rest of the article.

    Nov 20


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    CalRecycle is hosting two workshops–one in southern California and one in northern California to discuss strategies, investment, and partnerships needed to achieve our state’s 75 percent recycling goal.  This will impact commercial real estate and we are encouraging members to attend and provide input based on how you operate.  Staff will present and seek feedback on potential funding mechanisms to support the 75 percent recycling goal and provide sustainable funding as disposal fee revenue decreases. Click on event details below.

    Diamond Bar (south):     December 8, 2015    1:00- 5:00 pm

    Sacramento  (north):      December 15, 2015   1:00-5:00 pm

    Click here to subscribe to the California’s Environmental Goals and Funding Waste Management Infrastructure Listserv for updates on this topic.

    Nov 20


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     We are participants of a CalChamber led coalition working on Prop. 65 issues.  Here is an update from the Chamber and we thank their leadership and staff working on this issue:

    The state Department of Justice (DOJ) has proposed amendments that would affect settlement terms for enforcement actions filed by private parties under Proposition 65.

    The amendments are well-intended, but likely will increase the cost of settlements.

    The CalChamber is leading a coalition of nearly 200 California-based and national organizations and businesses of varying sizes that, collectively, represent nearly every major business sector on which the DOJ-proposed amendments would have a direct impact.