About Tamara Small

Tamara serves as the Director of Government Affairs for NAIOP Massachusetts.

Federal Court Rejects Lawsuit to Force Stormwater Permits in the Charles River Watershed

The following is a guest post by Hamilton Hackney of Greenberg Traurig regarding the recent decision in CLF v. EPA. NAIOP is extremely pleased with the decision in this case, which we had been following closely. NAIOP will continue to monitor stormwater issues at the state and federal levels on behalf of the commercial real estate industry.

Last week, the federal district court dismissed a lawsuit that sought to force USEPA to create a permitting program for stormwater discharges in the Charles River watershed.  Filed by the Conservation Law Foundation and the Charles River Watershed Association, the suit claimed that USEPA had a mandatory duty to require commercial and institutional properties that discharged stormwater to obtain permits to do so.  If successful, this suit would have forced commercial and institutional property owners to obtain permits, develop stormwater control plans and possibly design and install additional stormwater controls on their properties.

The suit invoked USEPA’s so-called Residual Designation Authority in the Clean Water Act. Although this authority has been exercised very infrequently to date, environmental groups are increasingly citing this statutory authorization as a basis for demanding that USEPA expand regulation of stormwater beyond industrial sources, construction sites and municipal stormwater systems.  In this particular case, the environmental groups argued that USEPA’s approval of “pollution budgets” (Total Daily Maximum Loads or TMDLs) for the Charles River obligated USEPA to regulate previously unregulated stormwater discharges to ensure that the TMDLs were achieved.  Given the hundreds of existing or proposed TMDLs in Massachusetts alone, that position could have far-reaching consequences for commercial and institutional real estate in the many watersheds with TMDLs.

The federal district court’s dismissal of this lawsuit follows another federal court decision last December in a similar case in Rhode Island.  Together, these decisions indicate that courts remain reluctant to intrude on USEPA’s discretion to choose when and how it may exercise its Residual Designation Authority.  While that is an encouraging outcome, these decisions are likely to be appealed, so there may be more developments on this issue.

Massachusetts Adopts New Energy Code & Stretch Energy Code

The Board of Building Regulations and Standards (BBRS) voted in July to adopt several changes to the energy provisions of the existing building code (8th edition). The BBRS adopted the next edition of the International Energy Conservation Code (IECC 2015) as the base energy code in non-stretch code communities and adopted a new stretch energy code (approximately 15% more energy efficient than the current base energy code), which will automatically take effect in existing stretch code communities without a vote by the city or town.

NAIOP was pleased that the BBRS did not advance the solar rooftop readiness or electric vehicle readiness requirements that had been proposed (and opposed by NAIOP), but disappointed that a new stretch energy code was adopted.

A concurrency period will run from August 12, 2016 – January 1, 2017 which allows persons seeking building permits to submit plans and other required documents that conform to either the energy provisions in effect prior to August 12, 2016, or the amended energy provisions effective August 12, 2016, but not a combination of the two. Beginning January 2, 2017, all building permits and submitted documents must conform to the amended energy provisions only.

Public hearings on the next (9th) edition of the building and energy codes are expected this fall. NAIOP will continue to advocate on behalf of the industry on these important issues.

Legislative Wrap-Up

Around 12:30AM on August 1, 2016, the Massachusetts Legislature wrapped up its work for the 2015 – 2016 legislative session. There was a flurry of activity in the final hours of the session. For the remainder of 2016, the Legislature will meet in informal session, but during those sessions bills need the unanimous approval of the limited number of members attending to be approved. Any member of the Legislature can prevent any bill from advancing simply by objecting.

This session NAIOP played offense and defense on a wide range of bills – with a number of significant victories. The following is an end-of session update on some of the bills NAIOP pursued this session:

Economic Development Bill Includes NAIOP Priorities
One of the final bills passed at the end of the session was the Economic Development Bill, H.4569 An Relative to Job Creation & Workforce Development. The bill included a number of provisions supported by NAIOP that will encourage economic activity in Massachusetts including:

  • Extends (from 6 months to 12 months) the period of time within which an applicant must begin construction following the issuance of a building permit or special permit or otherwise be subject to subsequent amendments to local ordinances. Extends (from 2 years to 3 years) the life of a special permit if construction has not commenced.
  • Increases the total number of projects allowed per community under the I-cubed program from 8 to 10 projects.
  • $45 million for the depleted Brownfields Redevelopment Fund.
  • Creates a new starter home program as part of Chapter 40R. Communities that establish a starter home district will be eligible for incentive payments from the state. The program encourages the production of densely located, smaller, single family homes, with a requirement that at least 20% of the homes in the district be affordable to and occupied by households with incomes at or below 100% of AMI.
  • $500 million for MassWorks, which gives municipalities and other public entities grants to support public infrastructure, economic development and job creation.
  • $15 million for a Site Readiness Fund, which will be administered by MassDevelopment and will promote site assembly, site assessment, pre-development permitting and other pre-development and marketing activities. These activities may enhance a site’s readiness for commercial, industrial or mixed-use development.
  • $15 million for an Innovation Infrastructure Fund, which will make grants and loans available to municipalities, private property owners, and business operations for design, construction and improvement of buildings and for equipment to spur innovation and entrepreneurship across the state, including co-working spaces, innovation centers, maker spaces, and artist spaces.
  • $45 million for the Transformative Development Initiative. The TDI Fund makes equity investments in major development projects in Gateway Cities. The fund also supports needed technical assistance for these municipalities.
  • $15 million for the Smart Growth Housing Trust Fund. This funds incentive payments to communities that create dense residential or mixed-use smart growth zoning districts in accordance with the Smart Growth Zoning Overlay District Act.
  • $25 million for the Workforce Housing Production Program.  The pilot program will supplement the Housing Development Incentive Program (HDIP) to encourage redevelopment of underutilized buildings in Gateway Cities.
  • Makes important reforms to the EDIP program
  • Reforms the Urban Center Housing Tax Increment Financing Zone (UCH-TIF), which authorizes cities and towns to utilize tax increment financing to encourage increased residential growth, affordable housing, and commercial growth.
  • Reforms the Housing Development Incentive Program (HDIP), which offers developers a state tax credit for substantially rehabilitating properties for lease or sale as multi-unit market rate housing in Gateway Cities, to now include new construction, as well as rehabilitation of existing structures. The bill further increases the maximum allowable credit under the program from 10% of qualifying expenses to 25% of qualifying expenses.

The Governor did veto a section of the bill opposed by NAIOP that would have created Community Benefit Districts. The proposed language created uncertainty and confusion and would have imposed fees on commercial, residential and non-profit property owners.  NAIOP applauds the Governor and the Legislature for their work on this very important bill.

Energy Bill – NAIOP Objections Removed, Commercial PACE Adopted
Another bill that emerged from conference committee on Sunday, July 31 was the energy bill, H.4568, An Act to Promote Energy Diversity. NAIOP was pleased that all of the sections the organization opposed were removed from the final bill. Those sections included: the Climate Adaptation Management Plan, which went well beyond planning and contained subjective and far reaching language that could have had extremely negative consequences for the Massachusetts economy; electric vehicle requirements as part of the building code; and mandatory energy inspections prior to the sale of a home and the creation and use of a mandatory energy score.  The legislature did adopt Commercial PACE, which is supported by NAIOP and creates a financing mechanism for energy efficiency improvements in commercial properties.

Zoning Legislation – Defeated
NAIOP was extremely pleased that the House did not take up the zoning bill that was passed by the Senate. S. 2311, An Act Promoting Housing and Sustainable Development, was supported by planners and environmental groups and strongly opposed by the real estate and business groups in the state, as well as the Mass Municipal Association. The legislation would have added expense and delay to the land development process in Massachusetts.

Wage Bill – Defeated
NAIOP and a coalition of business groups were also glad to see that the House did not support another problematic bill passed by the Senate, S.2207 An Act to Prevent Wage Theft and Promote Employer Accountability. The bill would have affected all businesses, including anyone involved in construction and development. It was a radical proposal that went far beyond what other states have done. It did not target wage cheaters. Instead, it would have targeted and punished the companies who contracted with them, even if the companies knew nothing or had no way of knowing about any wage violations.

Water Banking – Defeated
Finally, NAIOP brought together a coalition of organizations to defeat H. 657, An Act Providing for the Establishment of Sustainable Water Resource Funds. The bill would have provided communities with the authority to create water banks – essentially an impact fee that unfairly targeted new development and focused on environmental mitigation and water conservation measures rather than water infrastructure upgrades or capacity issues.

Special thanks to all NAIOP members who provided input and expertise on the wide range of issues NAIOP pursued this session. NAIOP will now begin drafting its legislative agenda for the 2017 – 2018 session by meeting with members to determine how to best advance the goals of the industry.

Update from Beacon Hill

Formal sessions for the 2015-2016 legislature will end on Sunday, July 31. Since many legislators attended the Republican National Convention last week or the Democratic National Convention this week, a lot of action and major votes are expected this weekend as formal sessions will be held on Saturday and Sunday. NAIOP has been actively lobbying on a number of important bills and will continue to do so through the final moments of the session on Sunday night.

Much of NAIOP’s advocacy has been devoted to fighting bills that would do harm to the industry and discourage economic development. Among those bills are the zoning and wage theft bills, which were both passed by the Senate. NAIOP has been working to educate members of the House on the serious consequences these bills would have on economic development if passed.

This weekend the Legislature is expected to pass a number of bills that are now in conference committee and are priorities for both the House and Senate including: the ride-hailing industry bill; a municipal government reform bill; the non-compete legislation; an omnibus energy bill; and an economic development bill.  NAIOP has weighed in on the energy bill by supporting the positions of organizations like AIM on the procurement issues, while also supporting PACE language, and opposing the climate adaptation management plan (CAMP) language, as well as mandatory energy scoring and energy audit requirements. A letter to conference committee members was sent last week highlighting our concerns with the most problematic sections of the bill.

NAIOP is also advocating for the inclusion of language in the economic development bill that was included in the House version. Specifically, NAIOP supports important changes to I-cubed, increased funding for MassWorks and the creation of a new starter home program.

In short, there is one thing that is certain about the final hours of the legislative session – absolutely nothing is certain. Stay tuned for future updates from Beacon Hill.

Senate Energy Bill to Require Home Energy Audits & Labeling

Tomorrow the Senate will be voting on its version of an energy bill that passed the House in early June. The bill includes a new requirement that single family homes, multifamily properties with less than 5 units, and condominiums must undergo an energy audit prior to the property being listed for sale. The results of the audit would need to be disclosed when the property is listed. The bill also requires the Department of Energy Resources (DOER) to establish a home energy rating and labeling system, which would be based on, but not limited to, a property’s energy consumption, energy costs, and greenhouse gas emissions. The property’s energy rating and label would also need to be disclosed. In addition, DOER would track and publicly report the number of home energy audits conducted and energy ratings and labels issued.

NAIOP has serious concerns with the impact this could have on the housing market, particularly in low-income communities where homeowners may not have the means to make upgrades and properties would be potentially devalued with a low score/label. NAIOP supports the Mass Save program and believes that incentives, not penalties, will do more to address energy efficiency in the Commonwealth.

A number of concerning amendments to the bill have also been filed. Amendment #8 is the climate change legislation that was passed by the Senate earlier this year. NAIOP is strongly opposed to this language due to the confusing and vague language it contains and the substantial adverse impact it would have on development. It would require all “commonwealth certificates, licenses, permits, authorizations, grants, financial obligations, projects, plans, actions, and approvals for any proposed projects, uses, or activities in and by the commonwealth” to be consistent “to the maximum extent practicable “with a yet to be developed climate plan. Clearly, this language could delay and potentially halt countless public and private projects.

Amendment #68 would mandate electric vehicle charging stations. NAIOP does not believe the building code is the right place to advance the growth of specific technologies or sectors of the economy.

Following the Senate’s vote, the bill will go to conference committee where members will have to agree to compromise language. That version of the bill would then need to go back to the House and Senate for a vote before the end of the session on July 31.

Plaintiffs Drop Stormwater Lawsuit Against EPA: NAIOP Applauds Decision & Remains Opposed to RDA as Regulatory Tool

Yesterday, the Conservation Law Foundation and Charles River Watershed Association, plaintiffs in Conservation Law Foundation, Inc., et al v. United States Environmental Protection Agency, et al., voluntarily dismissed the lawsuit without prejudice. NAIOP Massachusetts filed a Motion to Intervene in the case.

The plaintiffs in that case sought to compel EPA to impose a new regulatory program that would have required owners of commercial, institutional, industrial and high density residential properties in the Charles River watershed with one acre or more of impervious area (parking lots, roofs, sidewalks) to apply for a stormwater discharge permit through the use of EPA’s rarely used “Residual Designation Authority” (RDA). NAIOP decided to intervene in the case given the significant impact this duplicative and burdensome regulatory program would have had on property owners in a watershed that includes 35 communities and covers 310 square miles.

“NAIOP has long supported the overall objective of improving water quality throughout the Charles River Watershed, but with compliance costs estimated to be in excess of $1 billion, the RDA approach is simply not the right tool,” said David Begelfer, CEO of NAIOP Massachusetts. “We are pleased the plaintiffs dropped the suit. Such important policy decisions should not be negotiated behind closed doors. NAIOP urges EPA to carefully think through this issue, seek feedback from affected stakeholders, and ensure any potential programs are cost-effective, feasible and fairly allocate the regulatory burdens and costs.”

NAIOP will continue to monitor this issue closely and keep members informed of any new developments.

NAIOP Applauds Legislature for Budget with Important T Reforms

Last night a $38.1 billion state budget (H. 3650) was released from conference committee. NAIOP applauds the conference committee members (House Ways and Means Chairman Brian Dempsey, Senate Ways and Means Chairwoman Karen Spilka, Sens. Sal DiDomenico and Vinny deMacedo and Reps. Stephen Kulik and Todd Smola), Senate President Stan Rosenberg, and Speaker of the House Robert DeLeo for their leadership in passing a bill that includes important reforms for the MBTA.

One of the most important aspects of the bill (and something NAIOP has championed) is the creation of a MBTA Fiscal and Management Control Board chaired by the Secretary of MassDOT. The budget states that the Fiscal and Management Control Board shall “initiate and assure the implementation of appropriate measures to secure the fiscal, operational and managerial stability of the authority and shall continue in existence until June 30, 2018.” A two year extension beyond 2018 could be granted if needed. The Board shall formulate and recommend a plan to the secretary of transportation to stabilize and strengthen the finances, management, operations and asset condition of the authority. The Fiscal and Management Control Board will also develop performance metrics and measure items included in the plan. NAIOP believes the creation of the Control Board will provide greater accountability and transparency for the T’s governance and management practices and is critical to ensure a safe, reliable, fiscally stable, modern transit system for Massachusetts.

The budget also suspends the Pacheco Law for three years. The Pacheco Law requires a vetting process before privatization of services at the MBTA and, according to a report released today by the Pioneer Institute, it has cost the MBTA at least $450 million since 1997. NAIOP strongly supports this important reform.

The House and Senate are expected to approve the budget today and then it goes to Governor Baker for his review. He then has 10 days to review it review it before signing it and announcing amendments and vetoes.

NAIOP will continue to actively advocate for transportation reforms that support roads, bridges, public transit – and economic growth.