State and Local

California Bill Threatens Leases, Risks Crisis for Commercial Real Estate

In an apparent effort to help struggling business owners with their rent payments during the COVID-19 emergency, California Senate Bill 939 advanced through the state’s Judiciary Committee last week, threatening to shift the burden to properties and incite a mortgage default crisis. However well-intended, the bill would allow certain businesses to walk away from their contractual obligations. SB939 establishes, for all commercial tenants in the state, a moratorium on evictions as well as a yearlong period in which no rental payments would be due. In addition, specified businesses including restaurants and bars could terminate existing leases.

 

The commercial real estate sector, especially in California, has been supportive of executive orders and emergency ordinances regarding rent caps, evictions and other related issues. SB939, however, grants blanket benefits to some businesses while doing nothing to address mortgage payments, payroll and utility expenses that will still be due, unfairly endangering many of the individuals and small businesses it’s intended to assist. BOMA California and the California Business Properties Association are leading an intensive effort to amend or defeat the bill and are preparing for a battle when it reaches the full state senate in the next few weeks. For more details, visit BOMA/Greater Los Angeles and the CBPA.

Advocacy

BOMA Presses for Industry Liability Protections as Businesses Start to Reopen

As governments lift restrictions and local businesses start to reopen, there is still concern that despite the best efforts of the commercial real estate industry to promote health and safety in commercial buildings, this new environment may foster future liability issues that could stall recovery efforts. Employers are relying on the commercial real estate sector to provide the safe and healthy environments necessary to bring individuals back to their workplaces. However, the threat of COVID-related lawsuits is pervasive, requiring the need for federal and state legal protections that offer a tailored, specific legal safe harbor program for properties that follow public health rules, directives and guidelines and implement protective measures in good faith.

 

Liability protections have become a sticking point at the federal level in discussions over subsequent legislation, while several states have passed related bills and several more are considering similar legislation. BOMA International, with assistance from the Industry Fund, has been on the forefront of this issue, working with attorneys to assemble the best legal arguments and develop related materials. BOMA sent a letter to congressional leadership this week, and produced a talking points document and sample letter for use by the local associations at the state level.

Emergency Preparedness American Red Cross Needs Help Now

The American Red Cross is facing a critical blood shortage due to the canceling of over 9,000 blood drives across the country. As a result of these cancellations, the need for space to host blood drives is crucial and the Red Cross has reached out to BOMA International because of our longstanding partnership. In the past, BOMA members have repeatedly offered their spaces as venues for hosting blood drives—particularly in times of crisis.

Here you will find the current site requirements provided by the American Red Cross. Members interested in hosting a blood drive at their property should reach out to our American Red Cross liaison Brian Boyle at Brian.Boyle@redcross.org.

In addition to spaces to host blood drives, there is also a need for donors. If you are able, consider donating to a blood drive in your area. Please reach out to Government Affairs & PAC Manager Meg Novak with any questions.

Energy & Environment

BOMA International Wins 13th ENERGY STAR Award

BOMA International has been notified by the U.S. Environmental Protection Agency (EPA) that it has been recognized with the 2020 ENERGY STAR^® Partner of the Year Sustained Excellence Award for continued leadership and superior contributions to energy efficiency. BOMA International now has received a total of 13 ENERGY STAR awards, making it the most decorated commercial real estate association. The Sustained Excellence award is the highest honor among ENERGY STAR awards, recognizing partner organizations that go above and beyond the recognition criteria and demonstrate year after year how energy efficiency protects public health and the environment while delivering economic benefits.

BOMA was recognized this year based on a number of notable programs and initiatives, including: conducting outreach related to the ENERGY STAR building score update; promoting the importance of ENERGY STAR as it was threatened in the federal appropriations process; the ground-breaking W² Challenge that promoted water and waste benchmarking using EPA’s Portfolio Manager^® tool; and a variety of additional, long-running energy management trainings, resources and programs. Congratulations to all BOMA members and partners for their part in achieving this honor, and congratulations to all member companies that also earned ENERGY STAR awards this year.

State and Local

BOMA Language Added to DHS Guidance on Essential Personnel

Recommendations from BOMA International have been incorporated into federal guidance on identifying essential personnel—a key issue during the COVID-19 emergency. As state and local governments began to implement stay-at-home orders, many turned to the U.S. Department of Homeland Security (DHS) for guidance. The Cybersecurity and Infrastructure Security Agency (CISA) of DHS had released an advisory document; commercial facilities were specified as part of the nation’s critical infrastructure, but the guidance was otherwise vague on how that related to specific personnel. BOMA sent a letter to CISA requesting revisions based on the advocacy efforts already underway by many BOMA local associations. CISA has released the latest update of its Guidance on the Essential Critical Infrastructure Workforce and it includes our suggested language word-for-word:

Workers supporting the operations of commercial buildings that are critical to safety, security, and the continuance of essential activities, such as onsite property managers, building engineers, security staff, fire safety directors, janitorial personnel, and service technicians (e.g., mechanical, HVAC, plumbers, electricians and elevator).

This DHS guidance document will likely remain an important reference point going forward. Please contact Director of State and Local Affairs Ken Rosenfeld with any questions.

State and Local

BOMA Releases New Tool to Track COVID-Related State Legislation

U.S. state and local governments have been at the center of the COVID-19 emergency, and BOMA local associations have been hard at work ensuring that policies both slow the spread of the virus and also allow essential services to continue. Most government actions have taken place through executive orders, but a next wave of policy activity will be coming soon as many state legislatures are still in session. Some of this activity may significantly inform commercial real estate operations, especially as governments across the U.S. consider plans for reopening businesses. As first reported in BOMA International's Insider last week, to assist members with tracking any COVID-related state legislation, BOMA International has prepared a live report that details all current bills introduced at the state level that directly relate to the pandemic. The report will automatically update with the latest information, and members are welcome to share it.

Additionally, to see a comprehensive list of non-legislative actions in your state—including executive orders, emergency declarations, travel restrictions, school closures, etc.—visit our partner, the National Governors Association. Between these two resources, you can track major actions that have already taken place in your state and stay on top of potential upcoming legislation.

Federal

U.S. Congress Approves Additional Relief Funding

On Thursday, April 23, Congress overwhelmingly passed additional funding for the Paycheck Protection Program (PPP), the most prominent small business assistance program from the Coronavirus Aid, Relief, and Economic Security (CARES) Act, or “Phase 3” of Congress’s coronavirus response.

Intended to prop up struggling small businesses during the pandemic shutdown, the PPP ran out of funds within days of coming online. Nearly $350 billion in funds was originally available for businesses with less than 500 employees to take out loans up to $10 million. While this program was just one of many loan programs created in the CARES Act, its ability to convert into a grant if used towards payroll, rent and utilities made it a favorite among cash-strapped businesses.

Congressional leaders have since spent the last few weeks negotiating plans to infuse the program with additional funds and help protect smaller, “Main Street” businesses. These negotiations resulted in what is being referred to as “Phase 3.5.” This phase includes $380 billion for PPP and other smaller business loans; a $75 billion increase in funds for hospitals; and an additional $25 billion for COVID-19 testing. BOMA will continue to work with Congress on practical solutions as the long-term economic effects of the coronavirus shutdown impact our members and tenants.

Federal

BOMA International Calls on Congress to Consider Industry Coronavirus Concerns

As the U.S. Congress considers additional legislation to address the COVID-19 pandemic, BOMA International is asking lawmakers to take into consideration measures that ensure both the physical safety of property professionals and tenants and the financial security of the commercial real estate industry.

BOMA’s most pressing concerns are outlined in an April 16 letter to congressional leadership, authored by BOMA International Chair Scott Jones and BOMA International President Henry Chamberlain. The key concepts were vetted by BOMA International's Government Affairs Committee Chair Geoff Wardle, BOMA Fellow, and Vice Chair Mary Lantz, LCAM, RPA, as part of their ongoing work to help BOMA formulate legislative strategies and priorities for issues affecting commercial real estate.

Specifically, we are asking Congress to consider and act on the following:

• the safety of and liability protection for property owners and operators;
• the need for business interruption and pandemic risk insurance;
• improvements to the Paycheck Protection Program (PPP); and
• inclusion of (c)(6) trade associations in the small business programs created in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

This letter to Congress is just one of the many ways BOMA International and its members have sought to partner with the public sector to help keep Americans safe and sustain the industry. While it does not encompass all the issues the commercial real estate industry is currently facing, this communication highlights the most significant, pressing concerns as BOMA continues to advocate at every opportunity. As the situation further develops, we will continue to engage Congress directly and work with our coalition partners to identify comprehensive solutions.

Building Codes

BOMA Participates on the NFPA Reconditioned Electrical Equipment Taskforce

BOMA International was invited by the National Fire Protection Association (NFPA) to have a voting seat on the Reconditioned Electrical Equipment Taskforce. NFPA requested our participation as BOMA is the only national association representing major building owners that provides members with a building and fire code presence in building-related codes and standards. The taskforce was formed by NFPA to focus on the reuse of existing electrical equipment; restoration of damaged equipment following floods, fires and other natural disasters; and for equipment that becomes outdated and reserviced in lieu of replacement. The taskforce is currently focusing on definitions that affect reconditioning to make sure they are separate from what is considered ordinary repair and maintenance. BOMA is also working to remove language that refers to individuals performing any work as being a third party. BOMA’s position is that the requirements should focus on qualifications and training, which wou ld allow building owners to perform the work with qualified in-house staff.

Energy & Environment

Apply for Recognition as a Green Lease Leader

As BOMA members continue to lead the way on sustainability, we know that many of you are including “green” language in lease clauses and corporate guidelines. Be sure to get the recognition you deserve by applying to the Green Lease Leaders program. The deadline for the 2020 application period is March 31. Green Lease Leaders celebrates and validates leading-edge landlords, tenants, real estate teams and governments in the commercial office, retail and industrial sectors. If you’re driving higher performance in leased buildings by addressing energy efficiency and sustainability, visit Green Lease Leaders to see if you qualify for this national recognition.