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SAN DIEGO-GlobeSt.com has learned details about how NAIOP’s local Legislative Affairs Committee and board of directors helped alter County legislation that impacts commercial real estate developers and operators, the bulk of the organization’s membership. Two major policy proposals that were recently discussed by the San Diego County Board of Supervisors were changed toward CRE executives’ favor due to the LAC and BOD’s actions: the Climate Action Plan and Traffic Impact Fee.
For months, the LAC worked with County staff on its proposed CAP—which had been passed by the state legislature and signed into law by Gov. Schwarzenegger—to design a plan that met state standards for greenhouse-gas emission reduction thresholds without further stifling future development opportunities. This relationship led to a CAP that NAIOP widely supported, with the exception of the proposed GHG threshold for warehouse projects. NAIOP felt the threshold was infeasible for industrial developers and operators and would prohibit the construction of warehouses and other light industrial facilities as well as their operation.
“The reason for that exception was that due to the high-traffic, low-employee nature of warehouses, it would be difficult for a warehouse user to feasibly adopt mitigation measures,” Ted Shaw, principal at Latitude 33 Planning and Engineering and chair of NAIOP’s LAC, tells GlobeSt.com. “For example, they could build a solar array in their parking lots, but that might cost $100,000+ and therefore make a project infeasible. NAIOP proposed finding ways to comply with the law, but not by overburdening this very specific type of property.”
NAIOP board president Brig Black submitted a letter outlining this concern, and NAIOP member Sheppard Mullin Richter Hampton prepared a thorough analysis of the issue while also providing proposed solutions. After lengthy discussion and testimony, a motion was approved unanimously by the Board of Supervisors to adopt the CAP, but to continue to work with NAIOP to try to resolve the warehouse and light-industrial concerns. The Board’s caveat to continue working with NAIOP was key in avoiding additional infeasible environmental mandates on the organization’s commercial real estate membership.
Shaw tells GlobeSt.com that a working group now needs to devise a specific standard for warehouse and light-industrial developers and owners that can be implemented by the Board of Supervisors. “At the end of the day, we will have a standard by which every new project can be measured for greenhouse gas emissions and know how it affects specific projects,” Shaw tells GlobeSt.com.
The second piece of legislation that NAIOP has impacted to its membership’s favor is the Traffic Impact Fee, which is levied upon developers for land uses dealing with fronting facilities. After several discussions with NAIOP members, County staff and the broader business community, NAIOP ultimately decided to support greatly reducing the TIF through a built-in credit program. However, the industry was concerned that while the proposal reduced the TIF, it did not provide a reimbursement for off-site TIF-eligible improvements constructed by a property owner (i.e., roads that don’t front the property). Through its advocacy team, NAIOP argued that a reimbursement element was necessary for off-site improvements to avoid potential violations of the state’s Mitigation Fee Act.
Again, a motion was unanimously passed by the Board of Supervisors to support the built-in credit program, but also to have staff continue to work with NAIOP on a solution for the reimbursement of TIF-eligible projects. Staff will return to the Board within the next few months with proposed solutions; once again, NAIOP’s advocacy efforts directly impacted the Board’s final decision.
“We worked with staff to have a credit apply to facilities that were not fronting facilities, but that developers were still responsible for paying a TIF on,” Shaw says. “The fee’s going down, which makes it a lot easier for our members to get out there and start doing things.”
As GlobeSt.com previously reported, during a breakfast conference sponsored by NAIOP San Diego in March at the Marriott San Diego Del Mar entitled “San Diego’s Emerging Growth Industries: Drafts to Drones,” four industries were identified as growth markets creating demand for the commercial real estate market here. Derived from four major economies or “dynamic clusters” in San Diego—the military; convention, tourism and gaming; research, technology, innovation and manufacturing; and the county’s local economy, the four specific areas targeted for growth by the organization were unmanned military aerial vehicles, sustainable technology, wireless mobile medical devices and craft-beer breweries.
Carrie Rossenfeld Carrie Rossenfeld is a reporter for the West Coast region of GlobeSt.com and Real Estate Forum. She was a trade-magazine and newsletter editor in New York City for 11 years before moving to Southern California in 1997 to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics ranging from intellectual-property licensing and giftware to commercial real estate. She recently edited a book about profiting from distressed real estate in a down market and has ghostwritten a book about starting a home-based business.