December 5, 2007 Volume 13, Number 8
This Issue of the BOMA-San Francisco Advocate Is Brought To You By:
Turner Construction Company
BOMA San Francisco PAC – 20 Years of Service and Success
The BOMA San Francisco Political Action Committee was first created in 1987 under the leadership of Tom Gille and Jerry Cahill (who, incidentally, is retiring from the PAC Board this year). It began humbly as an effort to give commercial property owners and managers a voice in the local political process, and to help protect the value of the investments made by our members. Over the years it has become a very important and successful part of BOMA San Francisco's advocacy efforts, and continues to
provide a vital service to its members. On the occasion of the PAC's 20th anniversary, a brief chronology was written to document the most important issues and candidate campaigns in which the BOMA SF PAC has participated. To access this history, click here. This history is by no means all the stories of our previous involvement nor will it be the last. The BOMA SF PAC will continue to protect the rights of commercial property owners and make sure their interests are represented in the halls of government. 2008 will be a very important year for local elections with a number of county supervisor seats open, and an anticipated long list of ballot measures, some possibly containing new or increased taxes on real estate. The BOMA SF PAC Board urges all
BOMA members to help protect their rights as property owners by contributing to our BOMA SF Independent Expenditures PAC (ID #870449) now. The BOMA SF IE PAC can take contributions of any size! Mail checks to the BOMA SF office, attention Ken Cleaveland.
CA Assembly Member Mark Leno Addresses BOMA
Recently, Mark Leno, the Assembly Member representing San Francisco, addressed BOMA's Political Action Committee. He discussed a number of issues including the fact that the state was facing a revenue shortage of $10 billion this coming year, and that he thought it was going to be impossible to make up that difference through "creative financing", as the state has done in the past. "California doesn't have a spending problem," he said, "It has a revenue problem." Part of the problem lies in our current approval system: it takes 2/3rds of the Legislature to approve a budget, a rarity among state governments, but one which allows a handful of legislators to hold up the entire state budgeting process and virtually bring the state government to a standstill. This 2/3rds requirement must be changed, said Leno, if we are to ever make progress on getting state budgets approved in a timely manner. Leno currently chairs the Assembly Appropriations Committee. To b=
revenues to the state, Leno offered three key ideas:
a. Restore the Vehicle Licensing Fee to its previous level. This would bring in an additional $6 billion annually. The state has "lost" $20 billion since Gov. Schwarzenegger cut those fees by 2/3 four years ago.
b. Consider Split Roll Taxation. This issue of taxing commercial properties at a different rate or re-assessing them annually (instead of at time of sale per Prop 13) is becoming more acute as residential property owners are, according to Leno, now paying a larger percentage of the total state property taxes than are commercial and industrial property owners in California. Leno asked that BOMA consider supporting some type of property tax reform that would bring more equity into the process, and
agreed that "everything should be on the table" if Prop 13 were amended or abolished, including residential property taxes. He added that if Prop 13 were to be changed, it would have to still contain provisions that protected seniors, the disabled, and others who could not afford to pay market rate property taxes. Leno admitted tampering with Prop 13 was very controversial and that he wasn't sure if the "tipping point" of support for some kind of property tax reform had been reached yet, but thought it needed to be done some day, and that he hoped BOMA and its members would support and work for a fairer property tax system when it did.
c. Restore the top state income tax bracket back to 11% from its current 9%, as originally created by former Governor Ronald Reagan.
2007 Legislative Session Summary: No Bad News for BOMA Members
BOMA California, along with a coalition of business and industry groups, worked hard this session to identify bills of interest, analyze impacts, coordinate advocacy efforts, and where needed, made a convincing case for a veto to Governor Schwarzenegger. Many bad bills were either killed or "fixed" through amendments. Not a single bill targeted as "high priority" and opposed by BOMA California was signed into law. In addition, we were also able to move legislation that created a BOMA seat on the
State Historical Building Safety Advisory Board, and reformed the Business Improvement District law.
Congratulations to our BOMA Cal advocates Rex Hime and Matthew Hargrove for such impressive work!
To view an amazing chart listing the outcome of key 2007 legislation, click here.
BOMA California Launches Leadership Council
In an effort to raise funds for energy and codes advocacy, BOMA California recently launched an elite Leadership Council for companies willing to contribute $10,000 annually to the state organization. This group will have special access to our state lobbyists, and will receive information and briefings on the top issues confronting commercial real estate in the coming Legislative Session, or as part of official proceedings before the state Public Utilities Commission, or various other state agencies
such as the Building Standards Commission, the California Air Resources Board, and Offices of the State Architect and Fire Marshal. An inaugural briefing was held on November 15th in San Francisco, hosted by Unico Properties, to which approximately 30 local commercial real estate leaders were invited and a dozen attended. The state association hopes to create a Leadership Council of 15-25 members who will help provide top level guidance to the organization over the coming year. Seligman Western Enterprises
and Tishman Speyer have already committed to join. For further information, contact Matthew Hargrove, Legislative Director, BOMA California, at email@example.com.
San Francisco Assessor Releases 2006 Property Tax Information
Phil Ting, San Francisco's Tax Assessor, recently informed BOMA that the 2005/2006 local property assessment rolls totaled over $120 Billion, an increase of nearly $8 billion (7%) over the previous year (2004/5). This tax roll netted an all time high of $1.48 billion in tax revenues for the city, or 17% of the total city budget. There are three types of property taxes: real, personal (including business personal) and utility. The $1.48 billion broke down as follows: $130 million came from property
transfer taxes, $3.2 million from recording fees, nearly $70 million from business personal property, slightly over $21 million from utility properties, and $1.265 billion from real property. The percentage of total property taxes from commercial properties has declined since 2000 with all commercial properties (including rental apartments) now constituting only 45% of all SF property taxes, and the balance, 55%, now coming from residential properties. While office buildings constitute only 1% of
all parcels in the city, they do represent 15% of the total value of SF properties. Hotels represent less than 1% of parcels, but are 4% of the city's valuations, while other commercial properties such as retail establishments and rental apartments represented 7% of parcels and 10% of the value. Single family and multi-family residential (condos, not rental apartments), represented 88% of all parcels, and 67% of the value of all property in the city. Industrial only constituted 1% of all parcels
and 2% of all assessed values. Other/Miscellaneous represented 4% of parcels and 2% of valuations. Greatest growth in assessed values in the city for 2005/06 tax year was in the north/central (Hayes Valley, Alamo Square, Western Addition) and southeast parts of the city. (the latter due to completion of the 3rd Street light rail project) Top assessed properties in San Francisc Embarcadero Center complex ($1.22 billion); PG & E ($1.1 billion); 555 California ($795 million); One Market ($425 million);
SF Marriott hotel ($390 million); Post Montgomery Center ($390 million); St. Francis Hotel ($322 million); 101 California ($282 million); and AT&T Park (248.5 million). For a copy of the complete report, click here.
Yerba Buena Neighborhood CBD Creation Underway
Heather Hoell, the Executive Director for the Yerba Buena Alliance, recently gave building owners a briefing on the proposed new community benefit district (CBD) being proposed for the area surrounding the Yerba Buena Gardens and Moscone Center. This new CBD will encompass the area between 2nd and 5th Streets from Market Street down to Harrison Street. The YB CBD has created a mission statement, set of core values, and a list of goals. Top goals are to improve safety and security in the neighborhood,
increase the cleanliness and greenery in the area, and to create an area that is inviting to visitors, business, and residents. The CBD steering committee is hoping to have a functioning non-profit entity in place by July 2008, in time to add the assessments to the 2008-09 property tax bills for area owners. Assessments will be based on three factors: linear frontage, square footage of the building, and use. There will also be several zones within the CBD that will impact the assessments due to the
amount of services rendered in each zone. The first annual budget is estimated to be $2 million with over half of that amount going to increase security and provide enhanced cleaning services. For more information, contact Heather Hoell at 415-541-0312 or firstname.lastname@example.org
Community Choice Aggregation – Just Say No!
BOMA San Francisco's Board of Directors has approved a resolution opposing the proposed Community Choice Aggregation plan the City is attempting to put into place that would have the City buying all electric power for the city's businesses and residents in the near future. Our organization does not share the city's desire to gain greater control over local electric power service, and is not convinced it will reduce costs or increase reliability or renewable content of our electricity. BOMA is recommending
that its members "opt out" of the city's plan to enroll all buildings, residences, and businesses in this plan. To do so, send a letter to the San Francisco Public Utilities Commission, attention Susan Leal, the SFPUC General Manager. To download a sample letter, click here. To obtain a copy of the BOMA resolution opposing Community Choice Aggregation, click here.
Barbara Schultheis, SF Fire Marshal – BOMA's 2007 Public Official of the Year
At our November 15th BOMA San Francisco General Membership meeting, Barbara Schultheis, San Francisco's Fire Marshal, was recognized as our Public Official of the Year for her willingness to work with BOMA on all fire and life safety issues and codes that affect high rise office buildings. Assistant Fire Chief Schultheis is the first female Fire Marshal in the city's history and the first to come from the Bureau of Fire Prevention rather than from the ranks of Firefighter Battalion Chiefs. She was
appointed by Chief Joanne Hayes-White in May of 2006. Most importantly, Barbara has consistently worked with BOMA to help solve problems our members may be having with Fire Department regulations, and has met with our organization on a regular basis to help educate our members on issues such as the implementation of the sprinkler retrofit ordinance, the recent lock box thefts, and the need for a new ordinance governing the installation of specially-protected elevators in new high rise buildings that
can be used for firefighter transportation in an emergency.
Barbara Schultheis represents the best in good government and joins a list of other distinguished winners of this BOMA award including Mayor Gavin Newsom, Supervisor Michela Alioto-Pier, Planning Director Dean Macris, SFPUC General Manager Susan Leal, State Senator Leland Yee, Chief Building Inspector Laurence Kornfield, and former Supervisor Barbara Kaufman. CONGRATULATIONS, Barbara Schultheis!
BOMA - Operating Engineers, Local 39 Sign 5 Year Contract
BOMA San Francisco's Labor Steering Committee recently signed a new five year agreement with Local 39 of the International Union of Operating Engineers. This contract period runs from September 1, 2007 through August 31, 2012. Over 100 office buildings in the City are signatory to this agreement, as well as select buildings located in Marin, San Mateo, East Bay, and Santa Clara counties. Members may request a copy of the agreement by contacting Mary Anne Bogue at email@example.com.
Security Guards Get 5-Year Contract Finalized – Subject to Ratification
The union representing security guards, Service Employees International Union – SEIU – Local 24/7, announced December 1 that they have reached an agreement with the security companies who employ the majority of guards for office buildings, hospitals, schools, airports, hotels, banks, and shopping centers in the Bay Area. Still to be ratified by the union's members, the five year agreement will boost wages and benefits for security guards by 50% and provide them with enhanced health coverage, sick
and bereavement leave. Mayor Gavin Newsom, apprised of the agreement, lauded it as a "model" for the rest of the country. He said, "It is a package that, I think, gives dignity to the work that is being done by security officers. The stress associated with trying to make ends meet has been substantially alleviated." The contract will cover approximately 4,000 security guards who have been working without a contract since the previous contract expired June 30. The new contract will set starting hourly
wages at $12.00 per hour in San Francisco and $10.00 per hour at most locations in the East Bay. Leading security companies who participated in the negotiations included ABM Security Services, Allied Barton Security Services, Securitas Security Services USA, and Universal Protection Services. Only about 10-12% of Local 24/7 guards work in office buildings. Members should contact their security contractors directly for additional information.
BOMA International Updates Model Lease Handbook – Adds "Green" Elements
As a precursor to its publication early next year of an updated model commercial lease handbook, BOMA International hosted a webinar November 14th on the elements owners should consider adding to make their new leases "green".
Hosted by Mychele Lord, the principal with Lord Green Real Estate Strategies, the webinar covered the fundamentals of where leases should be "greened". These included sections dealing with building uses, maintenance and repairs, alterations and improvements, services and utilities, building rules, and contractor rules. She stated that buildings were "green" through their operational practices, not just through their design and construction. A "green" lease should also communicate the building's green
standards and practices related to energy conservation, water conservation, using recycled/environmentally preferred products, recycling solid waste, including organics, and managing indoor environmental air quality. Ms. Lord stated that a recent BOMA survey found that 2/3rds of today's building owners agree that investing in "green technologies" pays off. Plus, there are the intangible benefits of improved productivity, and reduced absenteeism of tenants that comes from creating a more sustainable
work environment. Building management must clearly define what "green" means for the property and for the tenants and should communicate progress and results of the building's sustainable practices on a regular basis to all tenants. Enforcement of "green" provisions in leases is no different from other provisions of the lease. Owners should include "green" practices in any default sections of leases. Finally, owners must "walk the talk" on sustainability, and make the prudent investments necessary
to turn their buildings "green".
Sprinkler Retrofit Approved List- Is Your Building Listed?
San Francisco's Building Department will begin insisting that the city's office buildings which are subject to the city's sprinkler retrofit ordinance be listed on a roster of compliant buildings that is maintained at the DBI. Historic buildings can obtain an exemption. Building owners must supply documentation that proves their buildings are fully-sprinkled or that they have a program approved by DBI to make their building fully-sprinkled in the near future or face possible suspension of future
building permits. For a list of buildings that are covered, click here. For a copy of the 1994 San Francisco Sprinkler Retrofit ordinance, click here.
AB 886 – New Form of California Acknowledgement and Jurat.
When Simple Things Change, It Affects Everything
Submitted By Manuel Fishman, Cooley, Godward, Kronish, San Francisco
When complicated things change, only those that do transactions in the nich=E9 area are affected, and those people generally have counsel that guide them through the impact of the change. When basic things change – such as the form of acknowledgement, also known as a notary certificate, everything changes and often confusion reigns. Such is the case now that California has changed the form of notary certificate, which is most often used in acknowledging a signature of a party executing any document that is to be recorded in the records of the County Recorder.
The new law changes California's form of acknowledgment, found in Civil Code Section 1189, and
the new form is required for all documents notarized on or after January 1, 2008. For California's form of acknowledgment, click here. The new law requires that the notary obtain satisfactory evidence that the person making the acknowledgment is the individual who is described in and who executed the document (eliminating the ability of a notary to notarize a document based on his or her personal knowledge of the person signing a document), and expands the thumb print requirement for notaries to also apply to all power of attorney documents. Finally, the form of acknowledgment that a California notary can use has changed in another important way – the form now contains a certification under penalty of perjury that the person signing the document proved to the notary, on the basis of satisfactory evidence, to be the signer of the document.=
For more information, and a copy of the new affidavit form, click here.
Upcoming Events of Interest
BOMA San Francisco Holiday Party December 12th @ 5 p.m.
The association's final event for the year, our Holiday Party, will be held at the City Club on Wednesday, December 12th beginning at 5 p.m. Always a great event, this year the party theme is "retro classy" and members are invited to don their formal wear for the event. For more information and to register to attend, go to www.bomasf.org. Happy Holidays!
Arc Flash Workshop – January 22nd @ Noon
Metropolitan Electric is sponsoring a special workshop and luncheon at the BOMA office on Tuesday, January 22, at noon, that will cover the issue of possible arc flash hazards. OSHA is now enforcing NFPA 70E and is requiring that employees be protected from electrical hazards. These rules may affect a building's engineering staff. Determining the proper personal protective equipment to reduce injuries and burns from arc flash is the goal of an Arc Flash Hazard assessment. This workshop will help you find out what that means and how to obtain one. To register for this free event, contact Wendy DeLara at the BOMA Office.
THIS ISSUE OF THE BOMA SAN FRANCISCO ADVOCATE WAS GENEROUSLY SPONSORED BY Turner Construction Company
Turner Construction Company is committed to the success and increased adoption of sustainable construction practices throughout the industry. As part of this effort, we train all new hires in the theory and practice of green building, emphasizing the LEED rating system. We believe Green buildings are not only good for the environment, they also provide immediate and long-term economic benefits for developers, building owners and occupants.
For more information, contact Michael Ma, San Francisco Special Projects Division, at firstname.lastname@example.org. (415-705-8948)