November, 16 2009 Volume 15, Number 11
This Issue of the BOMA San Francisco Advocate Is Brought To You By:
Restoration Management Company
Federal Stimulus Funds for Commercial Energy Efficiency Upgrades -- Letters of Interest NEEDED
Per discussions over the past three weeks and with consensus from the BOMA California Board of Directors, please find information, here, regarding the bid BOMA California, ConSol, and Lime Energy are putting together to apply for a $20,000,000 Federal Stimulus Funds grant for energy efficiency upgrades to existing buildings in California.
We need you to consider participating in the joint effort, and if so, to give BOMA California a letter of interest for the grant packet.
If successful, BOMA California will administer these funds which can be used to buy down up to 50% of the energy efficient improvement costs for projects on California properties, including yours. Many of the proposed improvements will have a pay back of less than 24 months.
We need interested companies to fill out this spreadsheet and letter of interest, and send it to Matthew Hargrove at email@example.com by Noon on Friday, November 20th. The spreadsheet has default answers that appear in the building type and energy projects columns (click on arrow at right of these cells). Expressing interest does not contractually bind companies, but will be used to show how much interest our members have in the program to increase our chances of being awarded the grant. The letters of interest will determine the amount of money BOMA California can apply for (up to $20,000,000).
ConSol and/or Lime Energy are available (at no cost) to assist you in determining applicable energy improvements and filling out the attached spreadsheet – contact information for individuals at these companies are in the one-pager.
The BOMA California Board of Directors thinks this is an excellent opportunity for some real financial benefit to reach our members from the recently passed Federal Stimulus package legislation. We need to respond quickly if we are to be a successful bidder for these funds.
Please click here for our blog post on this subject.
BOMA San Francisco Environment Committee's Earth Awards Workshop
On November 3, 2009, the BOMA San Francisco Environment Committee hosted a free workshop at One Market, Spear Tower, 41st floor, to help BOMA San Francisco members learn how to achieve a higher level of sustainability in their office building operations by participating in the 2010 EARTH Awards Program.
The BOMA San Francisco EARTH Award recognizes member buildings that utilize the most comprehensive resource management programs, including commercial recycling programs, energy and water conservation efforts, air quality and toxics reduction programs, support for public transportation, and effective use of tenant education programs geared to promoting sustainability practices in commercial office buildings. The EARTH Award program is an opportunity for BOMA members to consider the entire spectrum of programs and practices that constitute an effective "sustainability program" for office buildings including what policies and procedures should be adopted that can help move a property toward becoming "green".
Every year, the BOMA San Francisco EARTH Awards program increases in popularity and represents a larger cross-section of commercial real estate properties in the City. As such, the workshop allowed members the opportunity to consult with previous Earth Award recipients with questions regarding the Earth Award application, and to converse with associate members who could help with resource sustainability and, at the same time, help members increase their comparative advantage in the judging process.
Congratulations to Chris Wong with The Swig Company and the members of the BOMA San Francisco Environment Committee for a very successful and well-attended workshop!
Please click here for our blog post on the event.
Great Turnout for BOMA San Francisco's Fundraising Reception for Scott Wiener on November 10th
We had a wonderful turnout at our fundraising reception for Scott Wiener, 2010 candidate for San Francisco Democratic County Central Committee (DCCC) on Tuesday at the Infusion Lounge. Thank you to all of the BOMA San Francisco members who took the time to attend the event and donate money to Scott's DCCC re-election campaign.
Scott has served as an elected member of the Democratic County Central Committee (DCCC) since 2004. The DCCC is the official governing body for the Democratic Party in San Francisco and it is charged with organizing the party, registering voters, turning voters out, and making the official Democratic Party endorsements for local races and ballot measures. It's a critically important body in San Francisco politics.
If you'd like to learn more about Scott or would like to make an online contribution for his campaign for the DCCC, click here. To contribute by check, please print out this form, fill it out, and mail it with a check made payable to “Scott Wiener for DCCC” to Adam Cohn, 501 Douglass St., #7, San Francisco, CA 94114. Corporate checks are acceptable, and there are no contribution limits.
BOMA San Francisco Supports the Calaveras Dam Replacement Project and Draft EIR
BOMA San Francisco supports the Calaveras Dam Replacement Project and the Draft Environmental Impact Report. The San Francisco Public Utilities Commission has proposed to replace the Calaveras Dam with a new earth and rock fill dam of equal height and improved seismic design. The existing reservoir has been lowered to 40% of its capacity because of seismic safety concerns. The reservoir is the system’s largest local reservoir and represents more than half of the storage capacity in the Bay Area. As such, the association feels that the project should proceed for the following reasons:
- The Calaveras Dam Replacement Project is extremely important to San Francisco and the Bay Area’s water supply.
- Calaveras Reservoir, when full, represents over half of the San Francisco Public Utility Commission’s water storage capacity in the Bay Area and more than 60% of our drinking water.
- Communities in the East Bay and South Bay depend even more heavily upon this water source when Hetch Hetchy supplies are not available.
- If Hetch Hetchy supplies were cut off because of a major earthquake, it is critical that we have sufficient water in reserve available for fire fighting, public health, and to keep our city functioning as much as possible.
- Finally, we need this nearby improved water supply project moving forward today, not tomorrow, and cannot support further CEQA review delays. Discussions about the operation of the proposed new dam are ongoing with the appropriate permitting agencies, and will be appropriately dealt with.
You can review BOMA San Francisco's letter to Ron Miguel, San Francisco Planning Commission President, here and our blog post on this subject, here.
Mayor Gavin Newsom's Director of Homeless Policy - Dariush Kayhan - Speaks to Members of BOMA San Francisco Government Affairs Committee
Dariush Kayhan, Mayor Gavin Newsom's Director of Homeless Policy, spoke to the BOMA San Francisco Government and Public Affairs Committee on November 4th to talk about San Francisco's efforts to end homelessness in the city.
San Francisco's homeless population increased precipitously from the early 1980's through 2004 until Mayor Newsom's commitment to ending this issue in ten years via the Ten Year Plan. By focusing on supportive housing, there has been a 26% decrease in overall homelessness and a 40% drop in street homelessness in the City and County of San Francisco.
Mr. Kayhan mentioned that one of the biggest challenges for the city is the visual aspect of homelessness: Those that are homeless may have supportive housing but they are still on the streets. "Tourists remember two things about San Francisco, the seals at Fisherman's Wharf and the homeless population" said Kayhan. While he does everything in his power to notify those on the street that the city has shelter beds, including talking to them directly when he's walking in the city, he still has a large number of beds that go unused almost every night.
While San Francisco is doing it's part to help those without a home, Mr. Kayhan stated that this issue needs more resources from the State and Federal governments to truly make a difference. Although San Francisco spends approximately $193 million annually--with 70% of that coming from the the City's General Fund--and with the tremendous efforts of Mr. Kayhan and the Mayor's office, homelessness remains a major problem.
You can read more about San Francisco's Homeless Program and Supportive Housing Strategy, here; the recommendations to Mayor Newsom from the San Francisco Streets and Neighborhoods Workgroup in 2008, and San Francisco Single Adult Homeless Summary Report (as of September 2009), here. You can review Mr. Kayhan's presentation to the GAPAC, here.
BOMA San Francisco thanks Mr. Kayhan for taking the time to speak to BOMA San Francisco GAPAC members. We look forward to working with him and the Mayor's office to end homelessness in the city.
Subscribe to BOMA San Francisco's Advocacy Blog!
Your BOMA San Francisco advocacy team has a web-based tool to keep you in the loop on up-to-the-minute updates in the wild world of San Francisco politics: The all-new BOMA SAN FRANCISCO ADVOCACY BLOG! The new blog will allow you to stay in touch with BOMA’s advocacy work as it happens. We are updating the blog with information and pictures from our meetings with San Francisco politicians, and the movers and shakers in City government departments, as well as cover the issues that impact the commercial real estate industry. We encourage every BOMA member to sign up to automatically receive our blog updates via ONE daily email or news reader on our blog’s website. Plug into the BOMA blog today!
RED ALERT – Split Roll Property Tax Initiatives Filed
The hammer has finally dropped and two initiatives have been filed for Title and Summary with the Attorney General’s Office to change Proposition 13 and end tax protections for commercial real estate by enacting a Split Roll Property Tax. It is reported from multiple sources that the California Teachers Association (CTA) is the source for both of these measures.
These two initiatives join one other measure introduced last month, and come after successfully defending Proposition 13 in several different venues this past year, including legislative measures, in the state budget, and at the Tax Commission.
As we have discussed there are several different approaches that can be taken to enact a split roll. One of CTA’s measures increases all commercial taxes by .55%. The other requires continuous reassessment and bases taxation on current value.
Both of CTA’s measures have political “sweeteners” thrown in like doubling the homeowners property tax exemption, doubling the renters tax exemption, and increasing the types of agricultural properties that are not subject to the commercial assessment. One of the measures lists a whole bunch of benefits to education, meant not only as a way to fully control the monies raised from this tax increase, but to also sway voters who naturally want to support their public schools.
Although this is the beginning of the official process, we are already taking actions to prepare for the battle, such as meeting with those responsible for writing the ballot analysis, analyzing the economics of the measures, formulating an opposition campaign, and beginning our fundraising efforts to defeat these measures.
In addition to these three measures, we are also expecting to see split roll measures from at least one public employee union and from the SF Assessor Phil Ting led group “Close the Loophole,” which was registered this year specifically to pursue a proposition.
These measures seek ways to allow California State Government to continue spending your taxpayer dollars without addressing the issues of realistically setting wages and benefits for state employees and dealing with overspending and regulatory inefficiency, such as not allowing workers to put in 40 hours a week in four days, if they desired, instead of requiring overtime for any hours worked over 8 in a single day.
If you have any doubt about the negative impacts of a split roll, please click here to read the study entitled "The Economic Effects of California Adopting a Split Roll Property Tax."
These propositions are clearly an immediate threat to anyone who owns commercial property in this state. BOMA members will need to step up and be counted if we are to defeat these ill-conceived measures.
Click here for our blog post on this issue with provisions and links to the filed measures.
PG&E One Time Credit and January 2010 Rate Changes
All PG&E customers should have received a bill insert with their July 2009 electric bills that indicated PG&E had over-collected for their generation costs and that there would be a year-end alignment to correct PG&E's discrepancy that would yield a January 2010 rate reduction of around 10%. Recently, PG&E announced that they would be giving customers a credit on their November and December 2009 bills of approximately 4% of the annual electric charges to clear the company's oversight. We've received confirmation from the PG&E Rates Department that the 4% credit is a substitute for the expected January rate reduction. In fact, PG&E is now planning a small 0.7% rate increase for January 2010.
BOMA San Francisco members should consider revising their 2010 budgets to factor in this small rate increase as opposed to a large decrease.
San Francisco’s Building Occupancy Resumption Program (BORP)
The Building Occupancy Resumption Program (BORP) is a program developed by the City and County of San Francisco, Department of Building Inspection, with the cooperation of BOMA San Francisco, the Structural Engineers Association of Northern California (SEAONC) and the American Institute of Architects (AIA). The program allows San Francisco building owners to pre-certify private post-earthquake inspection of their buildings by qualified engineers and specialty contractors upon DBI acceptance of a written inspection program.
BORP consists of three basic phases: The first is the assessment of the building and preparation of a BORP program, including a building-specific post-earthquake inspection plan; the second phase includes annual update and renewal activities, the maintenance portion of the work; the third phase is the post-disaster implementation of the program.
BOMA San Francisco’s goal is to have all buildings within the membership registered for this unique program. Increasing the resiliency of your building to an emergency situation, such as an earthquake, is of the utmost importance to any building owner and manager to ensure business continuity. In a city-wide disaster, there may be a lengthily delay in getting your building back in business as there won’t be enough city engineers to evaluate the scores of buildings that need to be inspected for safe occupation. BORP will ensure that your building will be inspected quickly via private inspection, and that your tenants can resume operations as soon as it is safely possible.
- 104 buildings city-wide are approved participants of the BORP program.
- 93 of these buildings are downtown high-rises.
- 57 BOMA San Francisco member buildings are approved participants of the BORP program
- ~21.2% of all BOMA San Francisco member buildings are approved for BORP.
- ~64.5% of the 93 downtown high-rise buildings in the BORP program are BOMA San Francisco member buildings.
- ~57.7% of the 104 city-wide buildings in the BORP program are BOMA San Francisco member buildings.
Please click here to read more about the BORP program or contact Mr. David Leung at the Department of Building Inspection, (415) 558-6033 or firstname.lastname@example.org.
Attention BOMA San Francisco Members - Energy Star Information Disclosure!
Many of you know that the State of California is the first in the nation with a law, AB 1103, mandating disclosure of Energy Star information upon any major financial transaction of a non-residential property. The disclosure requirement had been scheduled to go into effect on Jan. 1, 2010. However, for a variety of reasons, including the inability of utility companies to overcome questions related to privacy if they released a building’s energy usage information, and our concern that many BOMA members would not be able to fully comply by the original date, our state advocates (CA Business Properties Assn.) sponsored a bill this year to delay the implementation of AB 1103.
That bill, AB 531 (Saldana) has been signed into law by Governor Schwarzenegger, lifting the hard and fast mandate to benchmark buildings by January 1. Our advocates are now working through the regulatory rule writing process and believe that the regs will kick in, at the soonest, for commercial buildings 50K s.f. and larger on 01/01/2011, but that has not been finalized. Smaller buildings will follow, and we are asking that buildings that are not within the target constituency of Energy Star (such as industrial buildings) be exempted.
A major issue has arisen in the regulatory process, pertaining to the state agency staff attempting to unnecessarily expand the scope of the law via regulations. CA Energy Commission staff has written regulations that would require you use both Energy Star, and a yet to be written California-specific benchmarking program and that you would be compelled to share all energy data with the CEC by authorizing access to Portfolio Manager. Although we support this law as written, using Energy Star and disclosing the data during the due diligence process to potential buyers or full building tenants, BOMA Cal is strenuously resisting this unauthorized expansion and data collection grab by the CEC. Even the bill’s author agrees with our position.
Click here for a link to a Commercial Real Estate Journal story that explains the issue very well. Please let Ken Cleaveland, BOMA San Francisco's Director of Government and Public Affairs, know if you have any questions, comments, or need more context, or would like to read the letter referenced in the article. He can be reached at email@example.com.
If you would like to personally discuss this with our state advocate, please contact Mr. Matthew Hargrove, Sr. VP., Governmental Affairs, CBPA, 916-443-4676 or via email at firstname.lastname@example.org.
Compliance Manual for 2008 CA Building Energy Efficiency Standards
The Nonresidential Compliance Manual for the for the 2008 Building Energy Efficiency Standards is now available on the CEC website. The new Standards will be in effect as of January 1, 2010.
Please notify anyone in your companies/networks responsible for management of energy, construction, or property management issues. We hope to make sure this is distributed widely as compliance is important for your bottom line, but also to help our industry meet AB 32 goals.
Our industry helped shape and ultimately supported the adoption of these standards. National groups are using this as model for promulgated national guidelines and other states’ codes.
A California Court Declares That The Imposition of Affordable Housing Requirements On A New Market Rate Rental Development Can No Longer Take Place
Article courtesy of Gladstone & Associates
A California Court of Appeal recently upheld a challenge brought by a developer to the affordable housing requirements of the City of Los Angeles. (Palmer/Sixth Street Properties v. City of Los Angeles, 175 Cal.App. 4th 1396). The developer sought approval for a 350-unit residential development. The City approved the project on the condition that the developer comply with the affordable housing requirements in the Los Angeles Central City West Specific Plan. The Specific Plan required applicants for multiple-family residential or mixed use projects to either set aside at least 15% of the dwelling units for low income families or pay in lieu fees.
The developer sued the City on the basis that the affordable housing requirements in the Specific Plan violate the Costa-Hawkins Rental Housing Act (Civil Code Section 1954.50 et. seq.). The Costa-Hawkins Act provides that residential landlords have the right to determine rents for new or vacated units. Established in 1995, the Act is known as having created “vacancy decontrol".
The Court ruled the affordability requirements as applied to rental housing are invalid because they conflict with and are preempted by the Costa-Hawkins Act. The Court concluded that the Los Angeles law did not allow the developer to set the rent at the outset of the tenancy and thus conflicted with the Act.
The Court rejected the City’s argument that the in-lieu fee alternative does not violate the Act and thus is still applicable. The Court stated the in-lieu fee alternative is “inextricably intertwined” with the affordability requirement for the rent and thus also is invalid.
However, the Court recognized that the Costa-Hawkins Act does not apply to projects that have received incentives such as density bonuses or government funding.
The Court’s decision raises the question about whether the affordability requirements for new market rate rental developments in San Francisco and other jurisdictions are valid. (The Court’s decision is limited to rental units and does not apply to for-sale units). It should also be noted the Court invalidated requirements that were established in a “specific plan,” which vary greatly from one jurisdiction to another. It can be expected that cities such as San Francisco will argue that their specific plans establishing affordability requirements are distinguishable from Los Angeles’ Specific Plan. However, we do not feel that a court would find them distinguishable. We believe the Los Angeles inclusionary requirements are very similar to those of San Francisco. San Francisco may take the position that since it has done a “nexus study” to support its affordable housing requirement, it should not be affected by the Palmer decision. However, we do not feel this is an important distinguishable fact.
It seems that unless the State amends the Costa-Hawkins Act, developers of new rental housing should consider starting to revise their pro formas to create a rental development without an affordable component. This may make the difference between a project that pencils out and one that does not.
USGBC LEED EBOM Credit For TMASF Members
Nearly 50% of all TMASF (Transportation Management Association of San Francisco) member buildings have applied or are in the pipeline trying to achieve some form of LEED certification through the US Green Building Council (USGBC)/Green Building Certification Institute (GBCI). The requirements for LEED certification vary according to a myriad of factors including building profile, level of certification sought, and, a mix of compliance factors used during the application process.
The USGBC awards points to applicants for participating in approved trip reduction programs depending upon survey findings that define the percentages of commuters who drive alone to work. The TMASF has worked diligently with USGBC, GBCI, and others to obtain certain points for their members. Please click here for more information.
TOOLS YOU CAN USE
Voluntary Certified Access Specialist Program (CASp)
In 2003, California Senate Bill 262 was signed into law and placed the following requirements on the Division of the State Architect (DSA):
the State Architect shall establish and publicize a program for voluntary certification by the state of any person who meets the specified criteria as a certified access specialist [click here for the Certified Access Specialist Program (CASp) Candidate Handbook and here for the CASp regulations].
Furthermore, the State Architect is to make available to the public a list of certified access specialists who meet the specified criteria.
Please click here to read our blog post on the CASp for more information.
THE BOMA 2009 Online Experience Exchange Report Is Available NOW!
Getting the metrics you need just got easier. The brilliant, new EER takes the industry’s best benchmarking tool to a whole new level…combining the industry’s most comprehensive data on income and operating expenses from U.S. and Canadian markets with sophisticated Web–based technology. During tough economic cycles, those who survive and thrive are the ones who understand the power of information. The new Experience Exchange Report® makes it easy to get the market information you need to drive innovation, implement progressive strategies and streamline your business processes to fortify your asset value. Its so illuminating, no other product can hold a candle to it. Here are five ways to make the EER work for you:
- Identify and plan for operating improvements, including capital expenditures and planning.
- Use the data to help rebid your building service contracts, by identifying where your contracts are over or under market averages.
- Compare this year’s income and expenses with last year’s for an initial read on overall performance.
- Get a quick picture on market NOI (net operating income)—correlated to occupancy information.
- Roll the data up, and look at the major categories in the aggregate, or drill down and see what comprises each major income and expense category for more fine-tuned planning.
Click here to purchase the new EER now. For questions, please contact email@example.com.
Please click here to view BOMA San Francisco’s calendar of events—BOMA committee meetings, education events, seminars, social events, and workshops—for 2009.
Simple. I’d change it so that a solid majority of the people’s representatives in the executive and legislative branches are concerned about taxpayer waste and flagrantly unjustified taxpayer expenditures. The City today has more city employees than ever in history. And its budget — for a city one-third the size of Philadelphia — is virtually the same as Philadelphia, and it’s an indignity that’s occurred over the last 15 years.
- Judge Quentin L. Kopp responding to the question: What's the one thing you would change about [San Francisco] politics? Click here for his credo in its entirety in this past Sunday's San Francisco Examiner.
THIS ISSUE OF THE BOMA SAN FRANCISCO ADVOCATE IS GENEROUSLY SPONSORED BY:
RESTORATION MANAGEMENT COMPANY
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