Volume 10, Number 5, June 28, 2004

This issue of the BOMA San Francisco Advocate is brought to you by

Landmark Exchange Management, Inc.

BOMA Interviews Candidates for SF Board of Supervisors and Reviews City Ballot Measures 
Although BOMA has endorsed the re-election of Supervisors Tony Hall and Supervisor Michela Alioto-Pier to the Board of Supervisors in November, it will also be very involved in other issues and candidate races this coming fall. The BOMA Political Action Committee recently interviewed a number of people running for the Board of Supervisors in a number of city districts. No endorsements have been made as yet, but several candidates did voice the need to moderate the anti-business stance of the current Board, and vowed to bring balance back to it, if elected. These included small business candidates such as Myrna Lim in District 11, David Heller in District 1, and Joe Blue in District 5. Others interviewed included retired judge Lillian Sing, running in District 1 (the Richmond area), former Supervisor Jose Medina, who has declared recently for District 11 (the Excelsior, Outer Mission, and Ingleside areas of town), Leanna Dawydiak, a police sergeant and attorney running in District 1, Matt Tuchow, an attorney running in District 1, and Rebecca Silverberg, a retired businesswoman running in District 11. Each had persuasive arguments for why the business community and BOMA, in particular, should support their candidacy. The BOMA SF PAC will continue meeting with   candidates who support real reforms at City Hall, and who will push a strong economic development and jobs agenda if elected. BOMA's recommendations will be forthcoming in the weeks ahead, as well as the justification for any such endorsements. BOMA, like many other business organizations in San Francisco, is determined to help make a difference through education and information to the voters this fall. The future viability of the city as a place to locate businesses and new jobs is at stake. A new more-balanced, more fiscally-responsible Board of Supervisors is an absolute pre-requisite to making that happen. Your support of the BOMA SF PAC continues to be vitally important as it fights for our collective futures as commercial real estate professionals in San Francisco.

On the ballot measure side of the equation, most of the measures are not going to make a significant positive contribution to the city. Most will either cost residents more money, or will push more power onto the Board of Supervisors, at the expense of the Mayor. An example is the current Rent Board, which administers the city's stringent rent control laws on residential properties built before 1979. Currently the Mayor appoints five people, two landlord reps, two tenant reps, and one unaffiliated homeowner/non-landlord. Under the new proposal, being pushed by Supervisor Chris Daly, the Mayor would appoint four members, the Board of Supervisors would appoint three members, but the composition of the representatives selected would be required to reflect the percentage breakdown of renters versus homeowners. In San Francisco, where 2/3 of the residents rent, that would immediately tilt the Rent Board representation in favor of tenants, and would further erode property owner rights in this city. Other ballot measures being pushed by the "progressives" on the Board include Supervisor Gerardo Sandoval's proposal to strip the Metropolitan Transportation Agency of some of its powers, and return them to the Supervisors, who lost them with the passage of Proposition E several years ago. That measure empowered MUNI to operate more independently, set minimum service levels, and gave management the ability to actually make decisions affecting the day to day operation of the public transportation agency. BOMA supported the reforms that Proposition E created then, and won't support any ballot measure that would reverse those hard-won reforms. Supervisor Matt Gonzalez is proposing a convoluted measure that would give the Board the ability to pass legislation with fewer members' votes, and be able to hire more staff assistants. (The current charter limits them to two each, as part of the change that created district elections.)

On the positive side of the ledger, Supervisor Michela Alioto-Pier has introduced a measure to create an Office of Economic Analysis, which will review all future ordinances for their economic impact (pro or con) on the City, and its businesses and/or residents. This is a measure that is needed NOW, and will hopefully be placed on the ballot by the Board for voter approval. This kind of attention to helping our local business community is sorely needed, and much welcomed. As always, the BOMA-SF-PAC will thoroughly review all ballot measures before the election, and will make its recommendations to the Board of Directors for our official position, which will then be relayed to all members. Stay tuned to see what happens...BOMA's PAC sure is!

Mayor Unveils Proposal for New Business Taxes in 2004-05 City Budget
Mayor Gavin Newsom recently sent his budget to the Board of Supervisors for review and approval which included several new tax proposals, as part of his "share the pain" philosophy on balancing the city's nearly $5 billion budget. Chiefly among those are a 1/4 cent increase in the sales tax (to 8 3/4 %), a 1/10 of 1% gross receipts tax, and the extension of payroll tax obligations to partnerships who currently do not pay the 11/2% tax on partnership distributions. The Mayor's office estimates these new business taxes will bring in around $70 million annually, if they are passed in November. To his credit, he also added a very valuable "sunset provision" into the measures which will make the new taxes end after five years, unless re-approved by the voters. BOMA has taken the position that no new taxes are warranted at this time, and that City Hall needs to reduce its size even further than the approximately 1,000 jobs the Mayor has factored into this new budget. Current city employment is approximately 27,000. What will this gross receipts tax cost you? 

SF Board of Supervisors Poised to Pass New Transit Impact Fees on New Development
The Board of Supervisors is poised to pass new legislation to raise money for MUNI through higher transit impact development fees (TIDF). If passed, the measure will apply the TIDF to all commercial development, not just office buildings in the downtown area, as the original 1981 legislation did. Fortunately, the measure, as recently amended by Supervisor Jake McGoldrick, will take the fees to $10 per square foot (basically adjusting the original $5 per square foot fee for inflation) rather than the far higher fees originally proposed, in recognition of market realities. An $8 fee will apply to new hotels, motels, and production/distribution/repair facilities. Non-profits, government buildings, new developments of less than 3,000 square feet, any new development at Mission Bay, and any new development that filed an application for environmental evaluation by April 1, 2004, will be exempted. Residential projects are also excluded. Funds will be collected by the Treasurer's office (not Planning) and will be dedicated to improving MUNI's operation and maintenance of the system. Developers already pay approximately $35 per square foot in assessments on new projects which go for low-income housing, day care centers, public art, and open space (parks).

SF Board of Supervisors Pulls Back On Lobbyist Registration Requirement for Permit Consultants
On June 15th, the Board of Supervisors wisely defeated a measure to require permit consultants to register as lobbyists with the City, and pay fees for same. This measure had been percolating at City Hall for over two years, and had been championed by several Supervisors, even the Mayor, when he served on the Board. However, after much debate, and much testimony by the industry professionals, the proposal went down 7-3, with one abstention. In the end, only Supervisors Chris Daly, Matt Gonzalez, and Tom Ammiano didn't get it, or didn't care about the huge impacts this legislation would have on the construction and development community of San Francisco. BOMA, the architects, permit consultants, and many others argued that this legislation was not necessary. What was needed was an upgraded computerized permit tracking system at the Department of Building Inspection, where permits could be tracked via the internet, objectively, and could provide instant feedback to the applicant on where a permit request was in the process at any time. The Board of Supervisors did approve unanimously such a tracking system at the same meeting, and it did approve language requiring equal treatment for everyone seeking a building permit.

SF Department of the Environment Wants Commercial Energy Conservation Ordinance Re-Adopted
In a recent report to the San Francisco Department of the Environment, it was suggested the city should revive the commercial energy conservation ordinance, which had been repealed in 1997, to force building owners to upgrade the energy efficiency properties of their buildings at the time of sale. The vast majority of Class A and Class B buildings in San Francisco have already been retrofitted with energy-saving lighting, upgraded HVAC systems, and the like, all in conformance with the state's Title 24 Energy Codes. In fact, PG & E recently estimated that building owners in San Francisco alone have spent over $1 billion over the past decade modernizing their properties to be more energy efficient. Nevertheless, many smaller properties still need upgrading, and the report recommended this ordinance would force many of them to do so. The study also suggested that the only exemptions would be for title transfers of less than 25% of the assessed value of the property, or for emergency repairs. The report faulted the DBI for not properly enforcing the ordinance, nor training their personnel about the ordinance's requirements. DBI officials claim that energy conservation is not their responsibility. BOMA's Codes Task Force is studying this issue and will discuss this proposed ordinance at the city's next Code Advisory Committee meeting on July 21 at 9 a.m. at DBI's offices, 1660 Mission Street, Room 2001. BOMA members are encouraged to attend and ask lots of questions regarding the need to reinstitute a local energy requirement that is already a part of the state codes.

BOMA Annual Codes Seminar November 10th (8 a.m. - noon) - Hold this date! BOMA's major codes update seminar for 2004 will focus on so-called "green building" codes currently being considered for adoption by many jurisdictions across the country, and will update attendees on all changes in the city's permit procedures that occurred over the past year. BE THERE!

BOMA California Update
The BOMA California Board of Directors hired a new firm to represent the association in Sacramento on June 16, 2004. The new group, the California Business Properties Association, will carry out the administrative and advocacy duties for BOMA Cal through the end of the year, whereupon an RFP will be put out for permanent (longer term) representation. Cliff Moriyama, the Director of Government Affairs for CBPA, is now BOMA California's chief administrator and advocate. Rex Hime is President of the CBPA. To learn more about BOMA's new voice in Sacramento, check out their website at cbpa.com.

Here are a few of the bills being tracked by CBPA on BOMA California's behalf:

Seismic Safety
AB 2533 (Salinas) This bill would require all un-reinforced masonry buildings located in seismic zone 4 shall post a sign in a conspicuous place at the entrance of the building, on a sign not less than 5 x 7 inches that states in not less than 30 point bold type: "This is an un-reinforced masonry building. Un-reinforced masonry buildings may be unsafe in the event of a major earthquake." If this is not done by December 31, 2004, then such building owners must place signs of not less than 8 x 10 inches in a conspicuous place at the entrance of the building, with the first two words printed in 50 point bold type and the remaining words in at least 30 point type: "Earthquake Warning. This is an un-reinforced masonry building. You may not be safe inside or near an un-reinforced masonry building during an earthquake."  Rental agreements entered into after January 1, 2005, in un-reinforced masonry buildings will also be required to have language that states: "This building, which you are renting or leasing, is an un-reinforced masonry building. Un-reinforced masonry buildings have proven to be unsafe in the event of an earthquake. Owners of un-reinforced masonry buildings are required to post in a conspicuous place at the entrance of the building, the following statement: 'Earthquake Warning. This is an un-reinforced masonry building. You may not be safe inside or near an un-reinforced masonry building during an earthquake.' Like Prop 65 warnings, owners are subject to lawsuits if signage is not in place or properly placed within 15 days of receipt of a complaint notice. Injunctive relief can be sought. BOMA Position: AMEND [BOMA wants to amend the law to make it less of a bounty hunter law for attorneys and their clients, and more of a straight notification law requirement with appropriate penalties for non-compliance.]

Security Guards
AB 2850 (Ridley-Thomas) This bill would enact the Private Security Service Assurance Act, which would require contractors and subcontractors, as defined, who are awarded contracts or subcontracts to provide private security services at a particular job site or sites, to retain, for a period of 90 days, certain employees who were employed at that site by the previous contractor or subcontractor.  This bill would require that employees retained under the bill's provisions for that 90-day period be offered continued employment if their performance during that 90-day period is satisfactory.  This bill would only apply to contracts entered into on or after January 1, 2005.Would require a new security contractor to retain for 90 days the employees of the previous contractor. BOMA Position: OPPOSE

Energy
AB 2006 (Nunez) Sponsored by So. Cal Edison, this bill would reassert control of investor-owned utilities over the state energy system by providing guaranteed SCE rates that recoups its investments in new power plants. BOMA Position: OPPOSE - Unless Amended.

BOMA wants to see a truly competitive wholesale energy market created in California, and that won't happen if the big three investor-owned utilities are given special financial guarantees that other power producers aren't. BOMA also wants to see large and small consumers in groups such as BOMA, the Silicon Valley Manufacturing Group, the California Manufacturers and Technology Association, the California Retailers Association, and others, be able to once again shop for power contracts directly with providers and not be hit with huge exit fees. The state's business community needs relief from high energy costs, which they bore the brunt of during and after the energy crisis. Reducing commercial and industrial energy costs, through direct access, and through such means as being proposed presently by PG & E in its latest rate case before the PUC, will, if realized, reduce the cost of California's goods and services, as well as the operational costs of office buildings.

Property Taxation
AB 1850 (Cohn) This bill would require any person owning, claiming, possessing, or controlling property that is subject to local assessment to maintain and preserve business records pertaining to that property for a period of not less than four years. Further, upon showing by the assessor that a corporation or other legal entity subject to local property taxation has failed to maintain or provide records as required, the assessment appeals board or local board of equalization shall dismiss any application for equalization contesting the assessed value of that property. BOMA Position: OPPOSE.

Mayor Gavin Newsom to be BOMA's July 22nd Special Guest Speaker! 
Mark you calendars now to attend this upcoming BOMA luncheon at the Westin St. Francis Hotel (Alexandra's Room/32nd Floor) on Thursday, July 22, 2004, beginning at 11:30 a.m. Seating will be limited, so don't miss out! Our new Mayor is not to be missed!
Check out the www.bomasf.org to sign up today. Cost: $45 in advance, $55 at the door (if space).