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  • Archive for March 18th, 2016

    Mar 18

    SPRING BREAK IN THE CAPITOL

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    Next week will be a quiet week in the Capitol due to the Legislative Spring Break Recess.  No committee hearings, no Floor sessions, and no Budget negotiations.  However, it’s the “calm before the storm.”  The following week legislators are back in town and the committee hearing process will begin again in earnest.  We expect more than 50 bills of interest will be heard in the two weeks following the break.  We will keep you posted on the progress of those that have the biggest impact on the commercial real estate industry.

    Mar 18

    INDUSTRYWIDE LEGISLATIVE MEETING!

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    Yesterday in a well-lit room in Irvine, CA, twenty-five leaders/experts from the commercial real estate industry gathered to review more than 400 pieces of legislative that potentially has an impact on your business.

    Legislators have introduced over 2,400 bills, since January, and all of those bill have been reviewed and analyzed by multiple committees of experts representing owners and/or managers of retail, industrial, office, and mixed-use properties; we also had several lawyers expert in environmental law, leasing and escrow, and energy.  Together, positions were discussed and adopted to set the direction for the representatives of commercial real estate in Sacramento.

    This year, measures on property taxes, energy efficiency of new and existing buildings, seismic retrofits, electric vehicle charging stations, solar and photovoltaic policy, outdoor landscaping, water conservations, and single use restrooms, CEQA, collective bargaining, are all under consideration in the Legislature.

    Please help us thank everyone that is giving up their St. Patrick’s Day to give back to the industry by providing analysis and discussion on bills that have the potential to impact our bottom line.

    Mar 18

    SUPPORT FOR SB 820 CALIFORNIA LAND REUSE AND REVITALIZATION ACT

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    Our industry is pleased to support SB 820 (Hertzberg; D-Los Angeles) which would extend the successful California Land Reuse and Revitalization Act (CLRRA), an important tool which helps local governments clean up properties and get them into productive use.

    The program mirrors federal legislation that was passed to protect parties that want to invest in brownfields sites that they are not responsible for contaminating; thereby, encouraging investment in what are often-times disadvantaged communities and neighborhoods.

    CLRRA give local governments the ability and alternative means of cleaning up properties when the responsible party will not or cannot so it can be used for a productive benefit.  Under the program state regulators (DTSC) or local water boards to designate what level of clean up the new buyer has to do in order to put the property back into use, and there is ongoing monitoring and accountability to protect the public’s health.

    CLRRA advances infill development and greenhouse gas reduction by reducing VMT because often times these contaminated sites are in urban centers and the program allows jurisdictions to work with new businesses to investment in clean up and remediation.

    SB 820 is also supported by the League of California Cities and is sponsored by our partners at the California Association for Local Economic Development (CALED)

    Mar 18

    SUPPORT FOR NET ENERGY METERING (NEM) CAP CALCULATION

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    Our industry is pleased to support AB 2339 (Irwin; D-Thousand Oaks) which would apply a consistent methodology statewide for use by electric utilities when calculating the existing caps on their net energy metering (NEM) programs.

    Net energy metering (NEM) is a billing service that provides credit to electric utility customers for the excess electricity supplied to the electric grid from their on-site solar photovoltaic energy systems. Existing law requires all California utilities to provide NEM up to 5% of the utility’s “aggregate customer peak demand.” In 2012, the California Public Utilities Commission (CPUC) adopted a decision interpreting for the first time “aggregate customer peak demand.”

    To date, at least five POUs have exceeded their 5% NEM caps using a methodology that is inconsistent with the large majority of the state, effectively shutting down solar growth in these areas and their contribution towards the state’s clean energy and climate goals. With at least eight more POUs rapidly approaching their caps, it is critical the Legislature establish a consistent, statewide methodology so consumers will continue to have the option of choosing cleaner energy.

    AB 2339 establishes the same methodology for use by publicly owned utilities as presently used by investor owned utilities when calculating their 5% caps for their respective NEM programs.

    Mar 18

    ENERGY COMMISSION BENCHMARKING WORKSHOP

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    California Energy Commission staff will conduct a public workshop to seek input on staff’s initial proposal to implement the building energy use data access and public disclosure provisions of Assembly Bill 802 (Williams, Chapter 590, Statutes of 2015).

    As a reminder, the commercial real estate industry supports the state’s benchmarking law and supports the actions taken by the Legislature and the Governor to repeal AB 1103 – a law that was creating significant implementation issues – and replace it with AB 802.

    Here is what has changed statutorily moving from the now repealed AB 1103 to the new AB 802 law:

    -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.

    This workshop is part of that public process.   The workshop will be held on Friday, March 25, 2016, starting at 9:00 a.m., at the California Energy Commission.  We will be at the workshop representing you.  However, your direct participation is encouraged.  Find out more about the workshop by clicking here.

    Mar 18

    OPPOSITION TO SB 876 “RIGHT TO REST ACT”

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    Our industry unfortunately must oppose SB 876 (Liu; La Candada Flitridge) as we believe the measure will make it more difficult to keep public areas safe and clean while not actually addressing the root causes of homelessness.

    SB 876 would create a new right for any homeless person to “sleep or rest” in any “public space” broadly defined as “any property that is owned by a government entity or any property upon which there is an easement for public use and that is held open to the public, including, but not limited to, plazas, courtyards, parking lots, sidewalks, public transportation facilities and services, public buildings, shopping centers, and parks.”

    By declaring the right to sleep or rest on any property that has a public easement, SB 876 creates a special set of exemptions, privileges and rights for the homeless to occupy public and private property, including sidewalks, without complying with laws that apply to everyone else. Such an approach is inherently unfair and would erode the ability of property owners to operate their properties in safe, clean, and non-threatening manner.

    Homelessness is a pervasive problem that must be dealt with.  However, we do not believe ceding possession of lawfully owned private property to anyone that deems it a suitable place to set up camp, is the right approach.

    Last year, the Sacramento Bee referred to a similar attempt to create such rights as a “nightmare scenario” wherein businesses and their patrons would be powerless to remove homeless individuals from impeding their daily activities.

    Homeless individuals – like every other Californian – already have the protections offered by the U.S. and state constitutions to protect their civil liberties.  This bill would create additional rights for a favored class of citizen at the expense of others’ private property rights and freedom of association.

    Mar 18

    UNEMPLOYMENT RATE IMPROVES

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    Employment Development Department (EDD) reports California’s unemployment rate (seasonally adjusted) in February 2016 was 5.5%, down from January’s 5.7%. Total employment was up 62,000 from January, with little change in the total civilian labor force. The US unemployment rate remained steady at 4.9% in February.

    Mar 18

    STATE WATER PROJECT ALLOCATION INCREASED TO 45%

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    The California Department of Water Resources (DWR) announced that public water agencies are now projected to receive 45 percent of contracted water supplies from the State Water Project (SWP) in 2016. The increase from 30 percent will provide increased flexibility for SWP contractors, who have not received more than half of their allocated supplies since 2012.

    California’s inadequate water system continues to force missed opportunities to capture needed supplies.

    A modern water delivery system would have allowed the state’s water agencies to receive approximately 486,000 acre-feet of additional water in 2016, which would have allowed for a forecasted SWP allocation of 55 percent – a significantly greater amount of water that could have been used to replenish storage, recharge groundwater basins, supply our cities and provide relief for farmers who grow the food we eat.

    Mar 18

    2016 BUILDING EFFICIENCY STANDARDS SEMINAR

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    California’s building efficiency standards have been updated, with changes that will become mandatory in January 2017. This seminar will cover what’s new in Title 24 for both residential and non-residential buildings, from high performance walls and attics to lighting and lighting controls.

    The session will also review challenges that have resulted in implementing the 2103 standards, strategies for addressing them, and solutions to these challenges that may be included in the recent revisions.

    With each cycle, California’s Energy Code is moving closer toward the goal of ZNE for all new construction. It’s vital for you to stay up to date with its evolution.

    Click here for more information and to register.