December 2008                                                 Volume 14, Number 5
This Issue of the BOMA San Francisco Advocate Is Brought To You By:

Turner Construction Company

BOMA Leaders Meet with Mayor Gavin Newsom to Oppose Congestion Pricing
Mayor Gavin Newsom met with our BOMA SF PAC leadership earlier this month. At this meeting BOMA stressed its strong opposition to congestion pricing, an idea currently under study by the county transportation agency to charge drivers a possible $3 per day each way into downtown San Francisco during commute hours. BOMA reps Nancy Gille, Kathy Mattes and Ken Cleaveland stressed that San Francisco wouldn't have a congestion problem if better traffic management were employed during commute hours. Doubling or tripling fines for blocking intersections or double parking during such times might be a better way to combat whatever backups the City experiences. The City also needs to give its new SF Park program time to get up and running to see if it will reduce traffic jams by freeing up more on-street parking spaces due to flexible pricing levels and the ability to use credit cards. BOMA reps pointed out that the current public transit system is maxed out during commute times and can't take more riders, and charging people to drive into town would be bad for business, especially during these tight economic times.

Four New SF Supervisors Elected – Three Incumbents Re-elected
San Francisco will have a lot of new faces on the Board of Supervisors effective January 8th, and BOMA congratulates all the winners, both new and re-elected. As we move into a very difficult year financially, and the City is looking at severe budget cuts and layoffs, it will be incumbent on all facets of the City, including the business community, and BOMA, to work collaboratively with the Board of Supervisors to move the economy forward and to preserve as many public services as possible. Congratulations to Eric Mar (new District 1 Supervisor), David Chiu (new District 3 Supervisor), Carmen Chu (re-elected District 4 Supervisor), Ross Mirkarimi (re-elected District 5 Supervisor), Sean Elsbernd (re-elected District 7 Supervisor), David Campos (new District 9 Supervisor), and John Avalos (new District 11 Supervisor).

City Ballot Measure Results a Mixed Bag for BOMA Members
The recent election had a long list of local ballot measures, some good, and some very bad. BOMA's Political Action Committee took positions on a number of them, and was pleased to see the Low Income Housing set-aside measure (Prop B), the Public Power measure (Prop H), and the Legalizing Prostitution measure (Prop K) fail. BOMA was also pleased to see Proposition S pass that will require identification of the funding source(s) before any future budget set-aside measures can be enacted. BOMA's PAC also supported the campaign (Prop V) to re-institute the Junior Reserve Officers Training Corps – JROTC - program in the city's high schools, and was pleased to see it pass. Not so good were the measures expanding the definition of what is considered "landlord harassment" in residential properties, the creation of an unnecessary new commission (Proposition J) to replace the existing Landmarks Preservation Board, the doubling of the real estate transfer tax on sales over $5 million (Prop N), and the defeat of Proposition L, which would have firmly established the need to create a Community Justice Court to more efficiently deal with quality of life crimes in the City. For more details on any of the city's ballot measures and BOMA involvement contact Ken Cleaveland at the BOMA Office.

Greater Downtown SF Community Benefit District Update
Given the current economic situation, many owners of downtown properties are concerned about adding a new property assessments to fund a Community Benefit District. However, Chamber President Steve Falk warned that the decline in city revenues will inevitably translate into a decline of city services such as street sweeping, police presence, and the like, and owners are going to need to step up to fill in that gap. Costs will be determined after there is agreement on the type and frequency of services the participants want to have with initial estimates between .05 and .11 cents per square foot. There may also be variables on cost based on the height of the building, and/or whether the building is considered a Class A, B, or C property. A proposed service plan and budget is currently under development by the CBD Steering Committee, which recently appointed Lee Miller/Crocker Plaza Company and David Jaber/Shorenstein Company as its co-chairs. For further information, contact Steve Falk at the Chamber sfalk@sfchamber.com.

AB 32 Implementation Could Cause CA Building Owners Major Expense
California is moving ahead on several fronts to implement AB 32, which is the historic greenhouse gas emissions reduction measure passed and signed into law in 2007. It sets very ambitious goals for many industries, including commercial real estate, and is causing concern that some of the requirements are too severe and will damage our state's economy. BOMA, as part of the California Business Properties Association, in conjunction with the California Building Industry Association (CBIA) recently submitted comments to the California Air Resources Board outlining our industry's recommended approach for setting interim thresholds for GHG reductions under the California Environmental Quality Act (CEQA). To read CBIA/CBPA letter, : click here.

The independent economic "peer review" team assembled by the Air Resources Board to analyze the AB 32 Regulatory Plan also recently concluded that the state has intentionally skewed analysis of the economic effects of the climate change plan to show positive outcomes. The state's analysis found a net increase in gross state product and individual earnings due to the proposed climate change policies through 2020.  However, all six economists on the review panel found the analysis flawed. Several stated they believe the state cherry-picked data to improve the plan's arguments for reducing greenhouse gas emissions. This independent economic analysis supports arguments and concerns that BOMA and o ther business and taxpayer groups have been expressing throughout the regulatory process. To read the ARB's AB 32 Draft Scoping Plan, click here: http://www.arb.ca.gov/cc/scopingplan/economics-sp/peer-review/peer_review_comments_arb_responses.pdf.

The independent California Legislative Analyst's Office (LAO) reviewed CARB's draft AB 32 Scoping Plan and was highly critical of almost every aspect, stating : "We conclude that (1) the scoping plan's overall emissions reductions and purported net economic benefit are highly reliant on one measure—the Pavley regulations, (2) the plan's evaluation of the costs and savings of some recommended measures is inconsistent and incomplete, (3) Macroeconomic modeling results show a slight net economic benefit to the plan, but CARB failed to demonstrate the analytical rigor of its findings, (4) economic analysis played a limited role in development of scoping plan, and (5) despite its prediction of eventual net economic benefit, the scoping plan fails to lay out an investment pathway to reach its 2020 goals for GHG emissions". To read their critique, click here: http://www.lao.ca.gov/2008/rsrc/ab32/AB32_scoping_plan_112108.pdf. Pages 1-15 are the summary.   

BOMA, in conjunction with the California Business Properties Association and attorney Donald Simon (Wendel, Rosen, Black & Dean, LLP) submitted a paper to CARB outlining a Green Building Carbon Credits program that promoted including indirect producers of GHG (commercial buildings) in any future cap and trade market established by the state. This program would monetize energy efficiency and allow energy efficient buildings to sell their carbon credits without double counting emissions by reducing the credits awarded to the electricity sector in an amount equal to the number of green building credits issued. It's a fascinating report, and can be accessed by clicking here: http://www.cbpa.com/documents/AB%2032%20Scoping%20Plan%20Comments%20-%20Green%20Building%20Carbon%20Credits%20Cover%20and%20Paper.pdf

Lastly, BOMA and several other associations funded a CARBON FOOTPRINT study that shows how much more efficient commercial office buildings have become over the past 25 years, and far ahead of the rest of the country in saving energy. Click here to read this worthwhile report: http://www.cbpa.com/documents/CBPA%20AB%2032%20-%20Title%2024%20Carbon%20Footprint%20Study.pdf

Direct Access to Energy in CA Building Owners' Future?
Recently, Michael Peevey, President of the California Public Utilities Commission, restated his support for a return to a competitive, open retail energy market, where consumers could purchase electricity from multiple suppliers. There is a proceeding currently before the Commission on this subject, called Direct Access. Although Peevey and other commissioners are supportive, they will not proceed until convinced "any program designed to reinstitute retail competition be guided by sound legal principles, carefully safeguarding relevant public policy interests." Peevey, in a Letter to the SF Chronicle, stated the Commission will be "taking into account any lessons learned from previous efforts to bring competition to electric retail markets". He also stated that the Legislature did not "kill" direct access, but has only "suspended" it. BOMA California supports re-opening the state's retail energy markets to multiple providers of electricity.

Fast Passes & Parking Cards Available Online
San Francisco's Municipal Transportation Agency (MUNI) is now making the purchase of monthly MUNI Passes and parking permits available online. To do so, go t  The passes and parking cards are sold at https://services.sfgov.org/mtacards/
 

San Francisco Creating Existing Buildings Efficiency Initiative
San Francisco's Department of the Environment is working on a new initiative to reduce energy consumption in existing commercial buildings (office, hotels, medical facilities, etc.). Part of this program will include a "Kilowatt Crackdown" contest to promote Energy Star benchmarking as part of the Earth Hour 2009 event (March 29, 2009). A Task Force has been formed that includes BOMA Director Steven Ring (Cushman & Wakefield) and Ken Cleaveland (BOMA). The TF will put together a set of recommendations regarding benchmarking properties, reducing financial or institutional barriers to investing in retrofits, and incentivizing buildings to perform at basic performance and maintenance standards. These new performance standards would apply to all buildings regardless of Class. BOMA members interested in further information should contact Cal Broomhead at the Department of Environment, 415-355-3706 or at cal.broomhead@sfgov.org. 

San Francisco Establishing Rules for Installing "Destination Elevators"
The San Francisco Department of Building Inspection is developing a new Administrative Bulletin related to so-called "Destination-Based Elevator Control Systems". To date, several dozen office buildings are in the process, or have already installed such systems. The City's main concern is with the system's accessibility features, and which designs might best be considered "equivalent facilitation" for the disabled. The City's Access Appeals Commission has conducted several meetings, and will meet again January 7th (10 a.m., 45 Fremont Street) to review that building's Destination System, and take additional public comment on what might be acceptable. The local regulations will go far beyond the national ANSI A117.1 – 2003 standards. Destination elevator controls are also more energy efficient and save tenants time. To review Draft 4 of the Administrative Bulletin (AB-090), click here. Questions may be directed to Laurence Kornfield at DBI at Laurence.Kornfield@sfgov.org.

California Passes Law Creating New Certified Access Specialist Program
Existing laws including Federal ADA and California's Unruh Civil Rights Act were passed to ensure full and equal access for the disabled. These laws required the removal of "architectural barriers" in the so-called path of travel when they were readily achievable. Recently the California State Architect's Office published a list of Certified Access Specialists (CASp) who are qualified to conduct inspections for property owners who wish to identify any possible barriers, and to "certify" when properties are fully accessible. The Construction-Related Accessibility Standards Compliance Act, passed as part of Senate Bill 1608, also creates incentives for property owners to obtain a CASp certificate. After January 1, 2009, owners who obtain such a certificate and are sued for disabled access violations may obtain a stay of action for 90 days and receive an early evaluation conference to resolve the case without the expense of an extended lawsuit. For a copy of that list, go to https://www.apps.dgs.ca.gov/casp/casp_certified_list.aspx.  Additional questions? Contact Greg.Johnson@pillsburylaw.com.  

New Mandatory Recycling and Composting Requirements in San Francisco
In case you missed the news, San Francisco recently adopted a new and more comprehensive recycling and composting ordinance that will do a number of things. It will require owners or managers of commercial properties, restaurants, and all other businesses that sell food or beverages to provide appropriately labeled and color-coded containers for separate disposal of recyclables, compostables, and trash. Owners and managers are required to inform tenants of this requirement but will not be held responsible for tenants who do not comply. To download a copy of the ordinance, click here.

San Francisco Adds Chapter 13 to SF Building Code in 2008
In addition to adding mandatory recycling requirements for organics in 2008, San Francisco also added a number of other ordinances under its new Chapter 13 of the San Francisco Building Code entitled the "Resource Conservation" Chapter. These include the Green Building Ordinance, Commercial Lighting Ordinance, C & D recycling ordinance, the Administrative Bulletin detailing requirements for installing solar panels, an Interior Air Quality ordinance, permeable driveway legislation, and limitations on wood burning fireplaces. San Francisco also has banned all wooden fixed utility ladders which were commonly added to buildings built in the 1930s and earlier. These ladders were not part of the building's fire escape system but were installed as a "convenience" to building owners who wanted roof access. Buildings with such ladders must remove them now and do so with a proper building permit. For more information, call 415-558-6220 or go to www.sfgov.org/dbi.

San Francisco Assessor Releases 2007 Annual Report (July 2007 – June 2008)
Ever wonder what kind of revenues the San Francisco Assessor's office takes in from local property taxes? The city's past fiscal year yielded $1.2 billion in property taxes (30% of total city General Fund revenues), with an additional $144 million in transfer taxes. It's certain that both the assessment values and transfer tax income will slide significantly in the next annual report. Details: www.sfgov.org/assessor.

SF Sprinkler Retrofit Certification Moving Slowly
Bob Farrow, Plumbing Inspector with the City's Department of Building Inspection, said that covered buildings must have an "umbrella permit" that proves their buildings are fully-sprinkled. Currently only 28 of 120 high rise buildings are in compliance and need to get their certifications and paperwork completed now. For more information and to discuss your particular property, contact Mr. Farrow at 415-558-6043 or via email at Bob.Farrow@sfgov.org. Mr. Farrow also maintains a list of the buildings which are covered by the sprinkler-retrofit law, as well as the list of buildings which have received their official certification letters from DBI and are on file as fully-sprinkled.

San Francisco City/County Budget in Crisis
No one can miss the state's budget crisis (growing by the billions) but the City is also facing a severe budget crisis, upwards of half a billion dollars by some estimates for Fiscal Year July 2008 – June 2009. Recently, Monique Zmuda, Deputy City Controller, gave downtown business leaders an overview of the city's budgeting process, and woes. Of the $6.5 billion annual budget, revised figures show nearly 30% will come from charges for services, 20% from property taxes, 11% from the state, 9% from other local taxes, 6% from business taxes, nearly 6% from rents and concessions, and slightly more than 5% from the Feds. It is spent doing the following: 32% on public works, transportation and commerce, 19% on community health, 15% on public safety, 12% on human welfare/neighborhood development, 5% on culture/recreation, 8% on general city responsibilities, and 9% on general administration and finance. In terms of type of city expenses, nearly 50% goes to personnel costs. Of the $6.5 billion budget, $2.6 billion is tied up in set-asides, many of them voter-approved. Zmuda said the city's budgeting process has a terrible impact on the city employees' morale. Business representatives at the briefing urged the Controller to seek future labor contracts with greater flexibility, seek authority to outsource more services, and perhaps consider earmarks for Supervisors' districts, as is done in Chicago. The city budget crisis will be the #1 issue facing the Board of Supervisors when they reconvene January 8, 2009. 

SF Health Care Security Ordinance – Do You Know What is Required?
BOMA Member and attorney Horace Green (Green & Humbert) recently reviewed the city's landmark legislation requiring healthcare coverage for low and moderate income persons with the association's Government and Public Affairs Committee. Mr. Green put together an excellent summary handout detailing when it is required, who is covered, and what is at issue in the legal challenge of the ordinance by the Golden Gate Restaurant Association. To receive a copy of the handout, contact Mr. Green at horaceg@greenhumbert.comor call him at 415-837-5433. 

Assembly Member Fiona Ma Meets With BOMA Members
Recently, Assembly Member Fiona Ma met with BOMA's Government and Public Affairs Committee. She explained that the Budget Crisis is the single most important pending issue in Sacramento. She also decried the fact that California's constitution requires a 2/3 majority vote in favor to pass a budget, and pointed to that requirement as the single biggest factor in the Legislature not being able to approve a state budget in a timely fashion. She noted that it only takes a handful of legislators to hold up the whole budgetary process. She was hopeful this requirement would be changed in the near future. Only three states (including CA) have such a law. Ma stated the Assembly is trying to keep funding for education at current levels but predicted all programs were going to be cut back but that "the more organized the group is, the less its funds will be likely be cut." She said the state has 21 bargaining units to deal with and that the state cannot take money from local governments, redevelopment, or the state lottery in order to balance its budget.

Ma said each State Legislator can only submit up to 20 bills each year, so if BOMA or other groups wish to have a bill introduced, they need to make that fact known very early, preferably before the session has started, and to identify the groups who might be opposed as well as those who would be supportive.

Ma commented on several issues that passed on the recent state ballot and was particularly pleased that Proposition 1A – the High Speed Rail prop – passed. She said the money to build the system will come 1/3 from the Federal government, 1/3 private money and 1/3 from the state. Ma ended her presentation by inviting everyone on the GAPAC to visit her in Sacramento during the next session when BOMA California has its "Day at the State Capitol".

Quantifying the Value of BOMA's Legislative Victories
During this time of annual renewal of BOMA Dues, it's important to share one of the key reasons why many firms belong to BOMA: advocacy. BOMA members and staff work hard representing the interests of commercial real estate at all three levels of government: Federal, state, and local. In 2008, BOMA members scored a major victory when President Bush signed the Emergency Economic Stablization Act into law. It contained three very important provisions for us: 

> Extension of 15 Year Leasehold Depreciation Timeline – This crucial law for commercial real estate retroactively renewed the 15 year depreciation schedule (it had reverted to 39 years!) for all of 2008 and through December 31, 2009. This action saved the industry $500 million over two years according to the Congressional Budget Office. 

> Tax Incentives for Brownfields Remediation which also breathed life back into this important program aimed at cleaning up contaminated properties and lands by retroactively covering projects in 2008 and those in 2009, thus saving the industry an estimated $600 million over two years.

> Tax Deductions for Energy Efficiency Improvements in Commercial Buildings were also extended for five years (January 2009 – December 2013). This action will continue to provide up to $1.80 per square foot for energy efficient upgrades that achieve a 50% reduction in annual energy costs as defined by ASHRAE 90.1. – 2001 Standard. Total savings to building owners: $887 million, according to the Joint Committee on Taxation.

Top All-Time Donors to Congress 1989 – 2008
As everyone decompresses from the recent election, its interesting to read the list just released by the Center for Responsive Politics of the top all-time donors to the U.S. Congress from 1989 - 2008, and which way these contributors leaned: Democratic or Republican. Here is what was reported:
Rank   Organization               Total Contributed   % to Democrats   % to Republicans
1          AT & T                              $40,624,392                  44%                          55%
2          FSCME*                          $40,430,870                  98%                          1%
3          Nat. Assn. of Realtors  $34,487,078                  48%                          51%
4          Goldman Sachs            $30,350,777                  63%                          36%
5          Trial Lawyers Assn**    $29,920,189                  90%                          9%
6          Electrical Workers         $29,278,894                  97%                          2%
7          Nat Education Assn      $29,242,855                  93%                          6%
8          Laborers Union             $27,697,339                  91%                          7%
9          SEIU                                $26,849,872                  95%                          3%
10        Carpenters Union         $26,501,308                  89%                         10%

*    American Federation of State, County, and Municipal Employees Union
**  The Association of Trial Lawyers of America has changed its name to the American Association for Justice.

Upcoming BOMA Events – Check Them Out!

January 7
BOMA Government and Public Affairs Committee Meeting – 12 noon – BOMA Office January 7 – Special Meeting on Destination Elevators – 10 a.m. – 3 p.m. - 45 Fremont

January 13
BOMA Emergency Preparedness Committee Meeting – 9:30 a.m. – 11 a.m. – 48th Fl. The Pyramid Ctr.

January 13
BEEP - Introduction to Energy Performance Seminar – 11 am – 1 p.m. Pacific Energy Ctr.

January 15
BOMA's Young Professionals Career Success Workshop – 11:45 a.m. – 1:15 p.m.  650 Cal.

January 16-19
BOMA International Winter Business Meeting – Renaissance Esmeralda Resort, Indian Wells, CA

January 21-24
(4 Day Course) Law & Risk Management – 8 a.m.- 5 p.m. – 44 Montgomery Street, Lower Level Conf. Rm.

January 22
BOMA General Membership Luncheon – 11:30 a.m. – 1:30 p.m. The City Club, 155 Sansome St.

January 28
Dealing With Tenant Bankruptcy seminar – 8:30 a.m. – 11:30 a.m. SFSU Downtown Ctr.

January 28
BOMA Codes Committee Luncheon – BOMA Office - Noon

January 29
Sustainability Fair & Workshop – 11:30 a.m. – 1:30 a.m. – Ferry Building, Port Commission Rm.
 

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THIS ISSUE OF THE BOMA SAN FRANCISCO ADVOCATE WAS GENEROUSLY SPONSORED BY Turner Construction Company

Turner Construction has built head-turning projects for more than 100 years. The company that built Madison Square Garden has ranked among the leading general builders in the US since WWI. It provides construction and project management services for commercial and multifamily buildings, airports, stadiums, and correctional, entertainment, and manufacturing facilities. Founded in 1902 by Henry C. Turner, the company is the main operating unit of The Turner Corporation, which is a subsidiary of German construction group HOCHTIEF. Tompkins Builders, a subsidiary of Turner Construction, helped build the WWII Memorial in Washington, DC.

For more information on what Turner Construction can do for you in the Bay Area, contact Michael S. Ma, SF Special Projects Division, at 415-705-8948 or via email at mma@tcco.com.