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  • COMMERCIAL CONSTRUCTION TAX COMPROMISE

    Posted: October 24, 2014 | Posted by Crystal Whitfield | No Comments

    The San Diego City Council on Tuesday adopted the compromise plan negotiated by the JOBS Coalition, led by the San Diego Chapters of NAIOP and BOMA.  The compromise puts to rest the long running battle by affordable housing activists to significantly increase fees on new commercial construction and tenant improvements to pay for subsidized housing and the jobs creation community, looking to protect economic development and small businesses who could ill afford to pay what was described as a “jobs tax.”

    The battle came to a head last year when the San Diego City Council adopted a 400-800% increase in the fee with an annual automatic escalator provision.  The local business community successfully referended the action, which resulted in the Council rescinding the onerous fee increase.  The JOBS Coalition, represented by Craig Benedetto who manages government affairs for BOMA and NAIOP San Diego and Aimee Faucett from the San Diego Regional Chamber of Commerce, then negotiated a compromise plan with the San Diego Housing Commission.  The two parties came together over a doubling of the fee, along with full fee exemptions for manufacturing and warehouse construction, as well as non-profit hospitals, and an exemption from the increase for research and development construction.  It also included a commitment to the reform agenda pressed by the local business community, and direction for revising the waiver process to allow for high wage employers to avoid paying the fee.

    The ultimate deal ended with a three-year, phased-in increase of the doubling of the fee and a removal of the requirement for annual review and escalation based on the 20-Cities Construction Index.  San Diego Councilwoman Myrtle Cole finalized the revised deal and it was adopted with one no vote this past Tuesday.  Many thanks to the members of the JOBS Coalition and our local chapters of BOMA and NAIOP for their work over the last several years to put this deal together.

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