August 3, 2006
In this Issue:
State Tuned:
BOMA Adopts New Policy Positions on Commercial Roof Depreciation and Industry Standards
At the recently completed BOMA International North American Commercial Real Estate Congress in Dallas®, BOMA’s Board of Governors approved two new policy positions.
BOMA’s position statement regarding roof depreciation supports amending Section 168 of the Internal Revenue Code to provide a shorter, more realistic recovery period for the depreciation of commercial building roofs to 20 years versus the current 39 years. BOMA urges its members to contact their Senators and Representatives to cosponsor “The Realistic Roofing Tax Treatment Act of 2005” (S. 1200; H.R. 1510).
BOMA’s new policy position on Industry Standards states that provisions involving business relations between buyer and seller such as guarantees, warranties and other commercial terms and conditions shall not be included in BOMA standards. This policy is intended to strictly avoid the appearance that BOMA endorses any particular products, services or companies.
For more information on these and other BOMA policy positions, please contact Ron Burton at rburton@boma.org. (202) 326-6350
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Mixed-Use Conference Jointly Sponsored by the Real Estate Industry
Mixed-use developments are quickly establishing themselves as a distinct product type and a trend that is revolutionizing the real estate landscape. Combining the elements of residential, retail, office and entertainment, Mixed-use projects are succeeding in both urban and suburban markets and on a global scale. This growth brings challenges as well as opportunities and a unique set of issues that are specific to mixed-use.
To understand mixed-use in today’s real estate market, BOMA, the International Council of Shopping Centers (ICSC), the National Association of Industrial and Office Properties (NAIOP), the American Resorts Development Association (ARDA), and the National Multi Housing Council (NMHC) have joined together to host a landmark Mixed-Use Conference that will be of interest to anyone involved in developing, designing, financing, leasing, managing and marketing a mixed-use project, as well as new and expanding retailers.
The conference is at the Diplomat Hotel in Hollywood, Florida on November 16 and 17. Issues to be addressed during the conference include:
• Positioning and alignment of the different component uses
• Asset enhancement opportunities
• Interacting with the Public Sector
• Urban vs. suburban
• Vertical vs. horizontal
• Master planned vs. infill
• Design and construction
• Financing options and partnerships
For additional information click on: http://www.icsc.org/2006MU/index.php
Contact: Dave Johnston (202) 326-6357 djohnston@boma.org
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Energy Efficient Buildings Legislation Introduced
Three new bills have been introduced in the House and Senate, aimed at encouraging energy efficiency in new construction and major renovations of commercial buildings.
S. 3628, the “EXTEND the Energy Efficiency Incentives Act of 2006,” would amend the Internal Revenue Code of 1986 to improve and extend certain energy-related tax provisions. The legislation was introduced on June 29 by Senators Olympia Snowe (R-Maine), Dianne Feinstein (D-CA) and John Kerry (D-MA). The bill would increase and extend the tax deduction for energy efficient commercial buildings that was included in the Energy Policy Act of 2005, which BOMA International actively supports. More specifically, it would increase the maximum amount of the deduction from $1.80 per square foot to $2.25 per square foot for new construction projects. For renovation projects, it would increase the deduction for each of the three subsystems (lighting; envelope; HVAC and hot water systems) from $0.60 to $0.75 per square foot. The program is now set to expire at the end of 2007, and this legislation would extend it through 2011, with some additional time for projects with particularly long lead times.
H.R.5809, the “Energy Efficient Buildings Act of 2006,” was introduced on July 17 by Reps. Melissa Hart (R-PA) and Brian Baird (D-WA). Similar to S. 3628, it would increase and extend the energy efficient commercial buildings tax deduction. However, the Senate bill’s proposed extension is longer than the House bill, and the Senate bill also addresses incentives for noncommercial property which the House bill omitted.
H.R. 5633, also called the “Energy Efficient Buildings Act of 2006,” was introduced by Rep. Judy Biggert (R-IL) on June 16. The bill would make available $10 million per year in fiscal years 2008-2012 for buildings that best employ and demonstrate the likelihood to reduce energy consumption by at least 25% for new construction in comparison to the energy standard set by ASHRAE Standard 90.1-2004 or 20% for major renovations compared to energy consumption before renovations are begun. Grants would be available for up to 50 percent of design and modeling costs, not to exceed $50,000 per building. Preference will be given to projects that “are least likely to be realized without Federal assistance.”
Contact: Karen Penafiel 202-326-6323 kpenafiel@boma.org
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Commercial Real Estate Tax Provisions Pass House; Await Senate Consideration
After months of rumors, speculation and discussion that popular business tax provisions would make their way through Congress hitched to the final pension reform conference report, the House shifted direction and passed the provisions in legislation nicknamed the “trifecta” bill prior to its adjournment for the August recess. The bill, H.R. 5970, is so nicknamed because it includes three major policies: an estate tax reduction, a phased-in $2.10 per hour increase in the minimum wage and business tax extenders that include leasehold depreciation and brownfields expensing. House leadership packaged the legislation as such hoping to win over senators who opposed the failed attempt to reduce the estate tax earlier this summer, but favor passage of the tax extenders and minimum wage increase.
The House bill extends the BOMA-supported 15-year depreciation period for leasehold improvements and immediate deduction of brownfields industrial site cleanup costs for 2006 and 2007. BOMA will continue to urge the Senate to pass H.R. 5970 prior to its adjournment for the summer as passage of any legislation will become more and more difficult in September given election year politics.
Contact: Jason Todd 202-326-6365 jtodd@boma.org
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NGA Issues Pandemic/Avian Flu Guidance
In an effort to prepare state and local governments to manage their responses to a potential outbreak of avian flu, the National Governors Association (NGA) recently released "Preparing for a Pandemic Influenza: A Primer for Governors and Senior State Officials."
The report stresses the need to look beyond the initial public health and medical response and develop further strategies to ensure essential government and private sector services – such as police, fire, paramedic, food, water and electricity – remain available during periods when a pandemic outbreak is at its peak and absentee rates are highest. It also calls for comprehensive planning that involves government agencies, businesses and individuals, each of whom will have a role to play in responding to a pandemic outbreak.
Contact: James Cox 202-326-6364 jcox@boma.org
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BOMA Addresses NFRC 2006 Summer Meeting
BOMA’s Vice President of Advocacy and Research, Ron Burton, addressed members of the National Fenestration Rating Council (NFRC) during their 2006 Summer Meeting held in Minneapolis July 24-27. Burton outlined BOMA’s concerns with the draft guidelines for commercial/non-residential products currently under consideration by NFRC’s technical committees.
NFRC was formed in 1989 to administer the only uniform, independent rating and labeling system for the energy performance of windows, doors, skylights, and attachment products to provide value to both the consuming public and the residential construction industry. NFRC’s rating and labeling system was subsequently referenced in the 1992 Energy Policy Act, and the number of window and door manufacturers having their products rated and labeled as compliant with NFRC standards has greatly increased since that time.
Recently, NFRC has begun the process of developing a rating system for commercial fenestration products. However, because significant differences exist in the needs of end users, product manufacturers and suppliers, and design and construction professionals in the residential and commercial markets, developing guidelines for the testing, rating and labeling of commercial glass products raises much more complex questions. Among those questions is whether there is a need for fenestration product ratings in the non-residential market.
BOMA’s comments addressed many of the complex issues surrounding the testing, rating and labeling of commercial fenestration products. Ron cautioned NFRC members to concentrate on providing real, tangible and cost-effective value to the non-residential end user and construction professionals. Ron further implored NFRC to get more involvement and input from architects and engineers involved in the design of commercial buildings, building officials charged with inspecting and approving commercial projects, and most importantly, building owners and managers who are the end users of these products. He pledged that BOMA will continue to provide the comments and expertise of the commercial real estate industry as NFRC considers the next steps in this process.
Contact: Ron Burton 202-326-6350 rburton@boma.org
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Free Matrix Compares ADA Guidelines to 2006 IBC
The International Code Council (ICC) is announcing the release of a new comparison of the ADA accessibility standards with the International Building Code (IBC).
The new 2006 IBC/Americans with Disabilities Act Accessibility Guidelines (ADAAG) Comparison actually compares three accessibility resources: the 2004 Americans with Disabilities Act (ADA)/ Architectural Barriers Act (ABA) Guidelines for Buildings and Facilities; the 1990 Americans with Disabilities Act Accessibility Guidelines (ADAAG); and the 2006 IBC, which references the ICC/ANSI A117.1 Accessible and Usable Buildings and Facilities-2003.
The 2006 IBC/ADAAG Comparison reduces confusion because the accessibility requirements are put together section by section.
Earlier this year, a similar matrix was made available by the U.S. Access Board referencing the 2003 IBC with 2004 Supplement. The new ICC comparison, updated to the 2006 IBC, will serve a wider audience as more jurisdictions adopt the 2006 International Codes and federal agencies implement the new ADA/ABA Guidelines. Places of public accommodation have to meet federal accessibility guidelines required under the Americans with Disabilities Act. The 2006 IBC/ADAAG Comparison has all of the information in one resource, making it easy to see how the codes and standards relate.
The 2006 IBC/ADAAG Comparison is available free for download from the website of the International Code Council: www.iccsafe.org.
Contact: Dave Johnston (202) 326-6357 djohnston@boma.org
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ICC and IAPMO Close to Finalizing Jointly-Developed Plumbing/Mechanical Codes
As announced by the President of the International Code Council (ICC), Henry Green, during the June 24th BOMA Building Codes and Voluntary Standards Committee meeting during the 2006 BOMA Convention, the ICC and the International Association of Plumbing and Mechanical Officials (IAPMO) are very close to finalizing a venture to jointly develop one plumbing code and one mechanical code for use by the entire nation.
"After much hard work, we have reached preliminary agreement on the basic code development processes that could enable us to jointly provide one plumbing code and one mechanical code for the country beginning in 2009." stated Mr. Green during the committee meeting.
There is much more hard work in store for the work groups from each organization assigned to handle the details of the relationship, however. Both organizations emphasized that a final agreement will require resolution of a number of important implementation issues including gaining the overall general consent from its strategic partners, one of which is BOMA. Both organizations are holding meetings throughout the country educating their members about the benefits of the new relationship.
Based on the information released to date, a merger of the two codes would have mixed benefits for BOMA members. While a joint, single code provides the benefits of more uniform acceptance, there is concern that the merger would be accompanied by a cumbersome, possibly unfair, code adoption process for both the plumbing and mechanical codes. BOMA is working with other organizations to obtain additional information about the impending merger. Look for further updates in the next few weeks.
Contact: Dave Johnston (202) 326-6357 djohnston@boma.org
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BOMA Hires New Advocacy Assistant
We are pleased to announce that Noah Marine has joined BOMA International’s advocacy team as its new Advocacy Assistant. Noah is a native of California and is a recent graduate of the University of California at Santa Barbara with a degree in political science. Previously, he interned with the Wine and Spirits Wholesalers of America where he gained valuable experience in lobbying and PAC operations. Noah replaces Emily Naden, who was promoted to a new position within BOMA International, Education Project Manager. Welcome Noah!
Contact: Noah Marine 202-326-6365 nmarine@boma.org
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State Tuned:
Ohio Supreme Court Finds Portion of State’s Eminent Domain Law Unconstitutional
In a unanimous ruling, the Ohio Supreme Court overturned a portion of the state’s eminent domain statute establishing that an economic benefit to the community alone does not justify government taking of private property. It also set a heightened level of scrutiny for state courts to apply when considering eminent domain cases.
The case involved a challenge by several homeowners to the City of Norwood’s eminent domain action taking possession of their property in order to make way for two new city-owned parking garages and a large, privately owned commercial development intended to create jobs and increase local tax revenues.
Contact: James Cox 202-326-6364 jcox@boma.org
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