The March Report
March 1, 2018
Led by President Jim Camp and Corporate Board Member Stephane Wandel, NAIOP SoCal joined the rest of the NAIOP Chapters in Washington, D.C. from February 5 – 7, 2018 for the annual retreat arranged by NAIOP Corporate. It was certainly a lively and interesting time to be in the nation’s capital, especially since it was the week Congress was struggling with whether to allow the government to shut down or not. Corporate held a variety of seminars to bring everyone news surrounding the commercial real estate industry. Then on February 7, the SoCal Chapter met with the offices of eight (8) of our Congressional delegation to highlight the importance of commercial real estate to the economy. The key Federal issues this year are:
- The need to streamline the regulatory and administrative approvals of transportation and infrastructure projects to expedite their completion, and, of course, the need for proper funding.
- That Brownfield development is a powerful economic tool to turn underused properties into highly productive uses.
- The need for sufficient capital and credit to allow commercial real estate to create new, solid, good paying jobs.
Things are very fluid in the nation’s capital. 2018 will be a challenging year, especially since so many members of Congress are resigning or are up for re-election in November, 2018.
CEQA Guidelines Update – Comment Deadline March 15
While it does not appear there will be any legislative efforts to modernize and/or update CEQA, the Office of Planning and Research (OPR) has been rewriting the State CEQA Guidelines. NAIOP SoCal has been very active and working with CBPA over the past 2 years the update process has been ongoing. OPR has completed its process and sent the draft guidelines over to the Natural Resources Agency for approval. There are a lot of proposed changes. The formal comment period regarding the guidelines ends March 15. NAIOP SoCal has reached out to some CEQA lawyers for input and is coordinating with CBPA on comments. Yet, it is also very important to get input from the Board members who have to live with CEQA on a daily basis. NAIOP SoCal does plan to provide a comment letter as we have in the past, so please proved Peter Herzog at firstname.lastname@example.org with any thoughts or comments, or send in your own letter to the Natural Resources Agency. We would note that in one area our efforts have paid off already. OPR wanted to completely change the CEQA analysis of transportation projects from using Level of Service (LOS) to Vehicles Miles Travelled (VMT), which would have essentially stopped all major transportation projects. The latest draft allows LOS to be used. They still do want to change from LOS to VMT for Transit Oriented Development (TOD).
Action Requested: Please provide input on proposed CEQA Guidelines to Peter Herzog.
Anaheim Looking at Art in Public Places and Tustin Considering Inclusionary Zoning
Although both of these ideas are still in the “works”, NAIOP SoCal is monitoring these issues closely. Director of Legislative Affairs Vickie Talley is on an Anaheim Council committee to discuss art in public places. Anaheim has not had a fee or ordinance in the past, but still has several pieces of art throughout the city, many in disrepair. In Tustin, the planning commission is considering inclusionary zoning that will add thousands of dollars to new housing. Although at this time the proposal does not include commercial development, NAIOP is working with its industry partners to defeat this move. We have seen in other jurisdictions where inclusionary zoning is being discussed that residential and commercial building are impacted with these fees that increase the cost of housing.
State Legislature – The Bills Are In
February 16 was the last day, technically, for bills to be submitted to the State Legislature. And, they apparently do not think there are enough laws as approximately 2,900 bills were submitted. A new record high. Adding this onto last year, there will have been over 5,500 bills submitted for this 2-year session of the Legislature. CBPA is plowing through all of the new bills and will hold its annual Legislative Retreat with all the NAIOP Chapters on March 22 to try to sort all of this out and prioritize the bills that need to be supported and defeated to protect our industry. The meeting will be held on March 22 at the Orange County office of Cox, Castle and Nicholson. Contact CBPA for more details. Also, throughout the year, as you hear about bills you feel are helpful or harmful, please let your Legislative Affairs team know as we work closely with CBPA to influence the outcome of bills.
Key SCAQMD and CARB Hearings in March, 2018
This Friday, March 2, the South Coast Air Quality Management District (SCAQMD) Board will vote on their staff’s recommendations to pursue additional regulations on warehouses, construction activities, railyards, ports and airports. We have spent a great deal of time over numerous years advising the SCAQMD that we oppose any ISRs because we do not believe they could lead to any real decrease of air emissions and are of questionable legality along with several other issues. However, the SCAQMD staff still is pushing forward with the ISR concept. The staff report has been released and they continue to make no reference to all the issues we have raised and it is clear the result of an ISR is a declining emissions cap, which can only be addressed by cutting throughput and growth. The report references the “facility level would be set during rulemaking”, and would be modified, lowered, over time. They are now proposing two (2) new fees:
- A “SCAQMD-administered CEQA air quality emission fund”, which would apply to new construction like what is in place in the San Joaquin Valley.
- A “mitigation fee” on existing warehouses that you would pay into if you cannot meet the facility level of fleet emissions set by the SCAQMD.
The staff still has provided no facts to indicate any of this is feasible, would reduce emissions, how it would work or how it would be enforced. We have spoken to the Board members and let them know we oppose these concepts, and that it is time to vote down the idea of ISRs as they did in March of 2017. If the SCAQMD Board does vote to proceed with ISRs, the staff has set out a timeline indicating they would begin developing the ISR right away and have it finalized by the end of 2019.
Then on March 22, the CARB Board will review their staff’s recommendations for further reducing emissions. CARB staff is NOT recommending ISRs, but our concern is the Board might act to override staff’s conclusions. We remain very concerned about this hearing as well and are working to prevent any effort on March 22 to push ISRs. There are other ideas raised by CARB staff that have the potential to negatively impact our industry, as we outlined last month. Thus, there is a lot of work to be done here as well.