Navigating the Permitting Maze Course Highlights Continuing Education and Association’s Advocacy

On September 21 and 28, NAIOP Massachusetts University presented Navigating the Permitting Maze: A Crash Course in Environmental Permitting to 40+ students from a range of backgrounds looking to master real estate permitting fundamentals in Massachusetts. This course, led by VHB instructors and complemented by several industry experts and panelists, centered on introducing permitting basics, including development of an early permitting strategy and timeline with colleagues and state and local regulators, as well as more complex issues, such as transportation analyses, historical property concerns, climate resiliency, appeals, and much more.

Not only did this course provide valuable education for new and continuing real estate professionals, it made connections to NAIOP members’ experience with advocacy at the legislative, regulatory, and judicial level.

Basics of Environmental Permitting, and Trends from State and Local Directors

During the first day, students started the morning with sessions led by Kyle Greaves and Lauren DeVoe of VHB, on the Massachusetts Environmental Permitting Act office (MEPA) review process which coordinates public review of a development’s environmental impacts. Next, students received instruction on the Boston Planning & Development Agency (BPDA) Article 80 regulations and process. Over the last five years, MEPA has analyzed about 1,300 large developments, with the majority (60%) culminating the review process with an Environmental Notification Form, and the remainder split between needing an Environmental Impact Report or a more in-depth process. For developments in Boston, Jonathan Greeley, Director at BPDA, which has approved over 11 million square feet for development in 2018 alone, emphasized that successful projects start with community outreach early in the process. Jonathan served on a trends in development panel with MEPA Director Deidre Buckley and moderator Greg Peterson of Casner & Edwards LLP during day one of the course.

greeleypresentsIMG_0504-cropJonathan Greeley, Director at Boston Planning & Development Agency

Permit Extension Act Protects Developments During Great Recession

Mary Marshall, Partner at Nutter McClennen & Fish, presented the final session on Day 1 on the Post Entitlement Permitting Stage. Mary made a connection between NAIOP’s legislative advocacy and environmental permitting, stating that during the recession, when many developments stalled due to the economy and financing, NAIOP formulated the Permit Extension Act, which was signed in 2010 by Governor Patrick (and expanded in 2012) to allow projects to maintain permits so that they could be “shovel-ready” when the market improved – avoiding several years spent reapplying for permits. Tamara Small, Senior Vice President of Government Affairs, added that a more recent advocacy connection with permitting is that NAIOP successfully changed the railroad-right-of-way statute in the 2018 economic development bill signed by Governor Baker this August. This means that developers will have more clarity about whether and when they must coordinate with MassDOT on building on former railroad rights of way.

Commercial Real Estate Professionals Advocating for Industry

On the second day of the course, individual sessions were designed for “deep-dives” into more technical areas. Jamie Fay, a waterfront planning expert at Fort Point Associates, a TetraTech company, led a session on the Massachusetts waterfront planning Act (Chapter 91) and how it affects development. Jamie is an active member of NAIOP’s government affairs committee and served as an advocate for reasonable regulation of the waterfront when the legislature worked on the issue and passed legislation in 2007 — and in the years following, as the Department of Environmental Protection promulgated regulations. New developments like Clippership Wharf and Encore Boston Harbor are subject to Chapter 91 rules. Stephanie Kruel, a climate resiliency planning expert at VHB, walked through climate resiliency checklists and analysis during the project planning phases. Stephanie serves as co-chair of NAIOP’s climate resiliency committee – a subcommittee of the government affairs committee.

To bring the areas of waterfront issues, historic resources issues, climate resiliency and environmental permitting together in a real-life example, the course ended with a project spotlight and panel presentation by four individuals from the General Electric Innovation Point team: Elizabeth Grob, VHB, Jeff Porter, Mintz Levin, Peter Cavanaugh, GE and Todd Dundon, Gensler.

GEpanel4IMG_0529-cropJeff Porter (Mintz Levin) moderates Project Spotlight Panel on GE Innovation Point joined by Peter Cavanaugh (GE), Elizabeth Grob (VHB) and Todd Dundon (Gensler)

NAIOP would like to thank all of the many experts whose time and energy made this course such a success. Due to popular demand, the permitting course will return in 2019.

Make sure to check out all of the NAIOP Massachusetts University offerings including the upcoming Real Estate Finance Fundamentals course on October 26, 2018. Have ideas on other courses NAIOP could offer? Let us know!

 

 

NAIOP Event Showcases Three of Boston’s Top Developers

This post comes from BLDUP (bldup.com) reporting on the NAIOP Massachusetts event on September 13, 2018: Development Unicorns: Neighborhood Game Changers.

Elisif_20180913_2045See photos from Development Unicorns: Neighborhood Game Changers. Credit: Elisif Brandon

The developers of three of Boston’s most changed neighborhoods, Fenway, Assembly Row, and Seaport Square came together last week for NAIOP’s panel discussion, Development Unicorns. If the catchy title didn’t grab your attention the insight provided by these forward-thinking developers certainly will. The event opened with a keynote from David P. Manfredi, Elkus Manfredi Architects, that highlighted the 8 Place Making Principles these neighborhoods have in common.  Mr. Manfredi also spoke about the important changes at work in each of these neighborhoods; public investment in infrastructure, skillful placemaking, flexibility and evolution along with density and walkability.  While the architecture of each area is different they all share these characteristics which have played a large role in the success of the projects.

After Mr. Manfredi’s introduction, the expert panel took the stage moderated by Sara Cassidy of AEW Capital Management.  Representing Federal Realty Investment Trust, the minds behind Assembly Row, was Donald Briggs, Executive VP of Development. Mr. Briggs mentioned that as a realty investment trust Federal Realty had the large balance sheet to a take risk on a piece of land in Somerville that had been tied up in a 6-year lawsuit.  He also discussed how the Assembly Row site is much closer to Boston than many people originally realized making it a great location for a development opportunity.

Steve Samuels, Chairman & Principal at Samuels & Associates discussed how his company “stumbled” into the Fenway neighborhood as it was being held hostage by Fenway Park.  His team had to convince people one use at a time to come to Fenway for something other than baseball. The final panelist was Yanni Tsipis, Senior VP-Seaport at WS Development.  WS has been involved in the Seaport since 2006 when it was just a wide open lot with great water views. Mr. Tsipis noted this blank slate provided an interesting opportunity for the development team and once momentum swung in their direction his team decided to triple down and buy out their remaining partners in the Seaport Square area.

The developers had their own story to tell on how the pieces of each neighborhood came together.  The Fenway, Mr. Samuels mentioned, was already a great neighborhood but it had no core. His team worked to build relationships with stakeholders in the area and then began to buy up lots one at a time.  They then rezoned each lot, again piece by piece, leading to a very slow process. Assembly Row also started off slow, as Federal Realty stepped into a deal that had been stalled with that 6-year lawsuit.  However, settling the lawsuit did have a positive outcome as Mr. Briggs pointed out, it pushed his team into embracing office space. Although not part of their original plans the offices turned out to be a very positive driver of growth.  In the Seaport it was very important for WS Development to ensure the area developed a sense of place very early on in the process. As Mr. Tsipis pointed out the neighborhood is still growing, with only about ⅓ of the planned construction now complete.

Other key points echoed across the panel were the importance of responsiveness to the market and also ensuring public realms and first floor retails spaces are unique and inviting to the neighborhood. Mr. Briggs suggested it is always prudent to entitle more square footage which allows for flexibility and optionality.  Federal Realty sacrificed density at the beginning of their project to build on a horizontal context and are now moving to build high rise projects. In the Fenway, The Samuels team had to find the right balance between old and new architecture.  Ultimately their goal for the area is to be ⅓ office, ⅓ residential, ⅓ retail but as Mr. Samuels quickly mentioned the market will drive these decisions.

In Seaport Square, WS has devoted time and energy to planning the public spaces and also programming around these areas as these events organically bring people together.  Mr. Briggs agreed, pointing out that he believes creating fabric in architecture, space between buildings is more important than buildings themselves.

When discussing retail spaces all agreed it was most important to get the first floor spaces right to command a premium above. With the continued success of these three neighborhoods, the insights from the panel were certainly valuable as the city’s development boom continues.

 

BLDUP Spotlight and Q&A – David Begelfer, Reesa Fischer and Tamara Small of NAIOP Massachusetts

This post comes from BLDUP.com: BLDUP Spotlight – David Begelfer, Reesa Fischer and Tamara Small of NAIOP Massachusetts

Bldup_Spotlight_NAIOP_MA

Last week NAIOP announced that David Begelfer would be retiring after more than 27 years leading the organization. NAIOP’s Board of Directors voted Reesa Fischer, currently Chief Operating Officer, and Tamara Small, currently Senior Vice President of Government Affairs, to co-lead the association. Fischer will serve as Executive Director with operational, financial, programming and membership/marketing oversight. Small will serve as Chief Executive Officer with oversight of the organization’s government affairs and lobbying activities, public relations, and research. BLDUP sat down with the three industry leaders to discuss the transition and NAIOP’s goals for the future.

BLDUP: For our readers that are not familiar, what is NAIOP?

Tamara Small: Officially NAIOP is The Commercial Real Estate Development Association. Long ago NAIOP stood for National Association of Industrial and Office Parks. It was then changed to National Association of Industrial and Office Properties.  In 2009, the national organization recognized we represented so much more than industrial and office properties.  They did not want to lose the brand recognition that NAIOP had so they kept the acronym, but changed what it stood for.  We now represent office, retail, mixed-use, multifamily, lab and institutional space here in Massachusetts. We are the largest of all the NAIOP chapters at nearly 1,700 members.

Reesa Fischer: Our membership is made up of a variety of industry leaders.  While we are primarily (60%), owners, developers, and operators, the other 40% is made up of attorneys, brokers, and everyone else who supports the commercial real estate industry.  This variety of folks involved in the organization is also a big differentiator for NAIOP.  We operate based on a 3 legs of the stool principle, government affairs advocacy, events/education & networking.

BLDUP:  What is NAIOP forecasting for the Boston market?  Are there any trends you are seeing?

David Begelfer: What I see as our greatest risk going forward is probably not a recession, at least locally.  The Boston market is quite strong and we do not see a lot of oversupply or speculative projects.

A serious downturn does not look like it’s in the cards for the next 2-3 years but we do anticipate somewhat of a slow down because of our success. There are two major components exceeding inflation, land cost and construction costs (the biggest part being labor costs) and these two issues affect development.  We have a very tight market with regards to the construction industry and the number of people and subcontractors.  We also have barriers for entry for companies and individuals to move in from out of state because of the high cost of living.  We are seeing inflation in costs of land/construction because of our dynamic economy. Because of this, we are already starting to price out residential rent projects, pushing them toward condos.

Another aspect of this looming problem is the limited capacity of skilled unemployed workers that can fuel the market going forward.  We have relied upon immigration from out of the country for the last 25 years of growth.  Immigration is starting to have some cracks for various reasons (policy, political, practical economic).  We have concerns that the constant flow is drying up and Massachusetts has always had a problem with net migration out of the state.  The bottom line, as I see it, is that we are at a greater risk from our success than from a possible recession.

BLDUP:  David, What is your proudest achievement as outgoing CEO of NAIOP?

David Begelfer:  It is very hard to choose one particular moment, but if I had to take an overview of the past 27+ years, I’m very proud of the “secret sauce” of NAIOP.  From the start, the secret sauce was to integrate the top professionals and engage in our organization primarily in government affairs and advocacy.  It’s very difficult to handle the wide range of issues that we deal with, regulatory, legislative, judicial, policy and then within each of those baskets another array of issues from environmental, transportation, economic, building codes, all across the map.  The only way we have been able to handle this and provide expert feedback is the unbelievably involved professionals who work with us. This has allowed us to expand the breadth and depth of issues that we deal with and we have done it in a way that we can give something back. We can’t pay for this counsel but instead, we offer networking, connections, and leadership opportunities to add value to our relationships and provide a win/win for everyone involved.  The involvement and growth of volunteerism within the organization is the greatest success I could imagine.

Additionally, we have been able to bring some of the top people in the industry onto our staff.  One of the reasons this is a seamless transition is that others have developed expertise within our organization. It was very easy to choose Reesa & Tamara to move forward into the leadership of the organization.

Reesa Fischer: I feel it is important to mention David’s ability to embrace change.  Most trade associations are very stagnant and very conservative.  They do what they do and as long as it’s not broken they don’t fix it is. One thing we value at NAIOP (and it’s why I love working here) is that embracing change is what it’s going to take to stay competitive.  We like to think of our organization as a disruptor and we are always trying new things that people wouldn’t necessarily expect from a trade association.

David Begelfer: We are always looking to see what can be changed and done differently.  There is no complacency in this organization. People talk about having periodic strategic plans; we strategically think about our organization throughout the year.  That may cause more work, but it keeps us relevant. You can’t fight change you have to embrace it!

BLDUP: Government affairs and advocacy is a big part of what you do. How do you work to accomplish your advocacy goals?

Tamara Small: We have our eyes and ears on anything that would have an impact on the industry and we weigh in wherever appropriate – whether it’s legislative, regulatory or judicial advocacy.  The process is a very collaborative one.  We have over 200 people on our Government Affairs committee and a very active board of directors who provide input. This expertise allows us to provide real-world examples that illustrate the impact of any proposed changes.

As an example, we just wrapped up the legislative session which ran from January 2017 through July 31, 2018.  There were about 8,000 bills filed this session and we tracked hundreds of them, provided testimony, served on legislative task forces and met with legislators.  Clearly, no legislator can be an expert on every single issue. So, for those issues that are of interest to us, we provide substantive, factual information on how the bill would affect the commercial real estate industry – and often the greater overall economy. Through this approach, we have built strong relationships with legislators and regulators.

A good example of how NAIOP handles advocacy would be a provision of the economic development bill that was signed into law by Governor Baker on August 10. The bill includes language that will bring clarity to the development process for properties along railroad rights of way. The process had been a source of frustration to the development community for many years. So, through our government affairs committee, we drafted a legislative fix and worked for 8 years to educate lawmakers on the need for the change. Through the leadership of key legislators and MassDOT Secretary Stephanie Pollack, we were able to work together on language that was signed into law. It will bring transparency and predictability to the development process – two things that are critical for any real estate project.   Talking about railroad rights of way may not be the most exciting topic, but it is one of those things that will affect important transit-oriented projects throughout the Commonwealth.

BLDUP:  What is the next legislative issue you will be focusing on?

Looking ahead, our three areas of focus will be: Housing, Transportation, and Climate Resiliency

We believe that climate resiliency is a top priority for the industry. It’s an economic development issue.  We were very supportive of the climate change legislation that passed this session. The bill that was passed requires the Commonwealth to develop a climate adaptation plan, complete vulnerability assessments at the state and local levels, and identify how the public and private sectors can work together to really think through what climate change means for the real estate industry and for the greater economy.

Another broader economic development issue that we are passionate about is the need for more workforce housing.  We were very supportive of Governor Baker’s housing bill.  We worked with all of the business groups as well as the Mass Municipal Association to try and get that passed in the final hours of the legislative session, but unfortunately, it didn’t make it. In my mind, it would have been the most significant housing bill in years.  We also thought it was very significant that we had such a broad coalition of support for the first time in 30 years of discussion around this issue. We are going to continue to push for this in the next session, which kicks off in January.

Our third big area is transportation. We will continue to advocate for an efficient, world-class transportation system in MA.  We need the type of system that allows people to get in and out of the city and to expanding areas with ease.  We are going to be looking at that in the next legislative session to ensure we can expand on existing capacity.

BLDUP:  Reesa & Tamara what are your goals for the NAIOP in next 5-10 years and David what would you like to see continue after you retire?

David Begelfer: I do think that NAIOP is going to continue to sit on the same 3 legs of the stool, advocacy, education, programming/networking.  Every member gets something from one or all of these areas.  We need to take a look at new technology, be proactive, be entrepreneurial, be thoughtful, and stay in touch with members and their needs.  We also want to offer new platforms for information.

One thing that is NOT going to be happening, is people are NOT going to be totally virtual. They want to meet face to face. That’s never going to change.  You will always need networking.

We have also taken a look at online learning and have seen a much greater demand for face to face learning but in a tighter timeline.  We are moving into podcasts.  That seems to be a very popular way for people to get information while driving, walking, or spinning. It’s hard to plan for the future when technology is changing so quickly.  Right now we have a partnership with the MIT Center for Real Estate that enables us to see what is on the cutting edge of the industry.  We just need to continue to keep an open mind.

Reesa Fischer: It’s about expanding the information and knowledge the we can provide the members and providing them with different options of delivery. People are just so busy and not everyone can come to a site event.  Some people prefer podcasts or live webinars.  We need to expand our information and methods of delivery to stay relevant.

We have also seen a huge demand for professional development skills that are outside of the industry.  The membership is looking to be able to provide skills for their talent.  Talent is a big issue right now, retaining and obtaining.  Learning professional skills while networking and engaging with people in the industry is a unique opportunity we can provide our members.

Tamara Small:  We are nothing without members. We look forward to working with our many member-driven committees and continually seeking feedback directly from the industry.  As Reesa and I transition to our new roles, we will be sitting down with our leadership and members to do our own focus groups in order to understand what they need. We look forward to growing and expanding with them.

Reesa Fischer:  Yes, we are very externally focused!

BLDUP:  What is the last book you read that you would recommend and why?

Reesa Fischer: The Road to Recognition by Seth Price.  Seth is a local guy who runs Placester and did a keynote at one of our marketing conferences.  The book is about building your personal brand which plays into a corporate brand: being authentic, setting up expectations, meeting expectations.  Detailing ways to keep you competitive either personally or professionally. It’s how I look at our organization so that we can continue to be important in the industry.

Tamara Small: Starting Small and Making It Big: An Entrepreneur’s Journey to Billion-Dollar Philanthropist by Bill Cummings.  It is interesting to hear his rags to riches story and his unbelievable drive and entrepreneurial spirit that have helped create his company.  The book provides history about the CRE industry but also an inside look at one of the most entrepreneurial people I’ve encountered.  He is also someone who has really devoted a good part of his career now to charitable endeavors and that is very admirable.

David Begelfer: Leonardo da Vinci by Walter Isaacson.  It’s astounding the genius that was there but not just genius: the genius was combined with unbelievable curiosity.  Almost anything he saw he wanted to look further into it. It’s frightening that a lot of what he discovered was never published and lost for hundreds of years. People would rediscover these things hundreds of years later.  He discovered something about how the heart works but it was not actually verified until 1970. He was way ahead of his time. It is a very fascinating read and again it was not just intelligence but a need to be entrepreneurial and also a great observer and creative.

BLDUP:  It is important to note that despite the CRE industry being primarily male, NAIOP’s new leadership team is female.  Tamara and Reesa what are your thoughts on this.

Reesa Fischer:  Just a little history, when I started here 8 years ago, the percentage of women in the industry and in NAIOP was significantly lower.  It is really exciting to see that women have very quickly been getting involved.  Our female membership rates have gone from around 10% up to 28-30%.

About 7 years ago we started an annual event, the Women of Influence luncheon. It sells out 200+ tickets every year with wait lists of people.  I think the pipeline is filling up as young women are starting to come into the industry and seeing there are a variety of ways to get involved, not just brokerage but in the development world as well.

Women are very organized and project management focused and very collaborative and that is what this industry is.  It’s about time women recognize they can actually play an important role. We are also more women in senior roles and running companies.

Our Distinguished Real Estate Award recipient this year is Related Beal, run by Kimberly Sherman Stamler.  Our President-elect for next year is also a woman so the top 3 levels of our organization will be female.  We are very excited to feel like we are following the trend and blazing new trails for women in the industry.

Tamara Small:  Going forward we will operate under a collaborative leadership structure which we found is much more common with women.  Reesa and I have worked together for so many years and we both have our own unique strengths so we are excited to continue this and take NAIOP to the next level.

David Begelfer: We have not said we want to have women run the organization, we have put into place the best people we have for the position and they happen to be women.  They are stepping up and being chosen to lead because of their skills.

BLDUP:  David, to conclude on more of a personal note, what are your plans for your new free time?

David Begelfer:  I have a lot of interests to stay active and involved in the industry.  I love to travel, play golf, those are wonderful things, but I don’t see that as sufficient to keep me alive and well and excited about my future. I’m looking into opportunities that will allow me to keep active and participate in this active industry. I am mostly looking forward to being a member of NAIOP and getting all the value that a member gets from being involved.

Legislative Wrap-Up: NAIOP Fights for Industry Through Final Hours of Session

MAStateHouse_GrayIn the early hours of August 1, Massachusetts legislators adjourned a busy two-year legislative session in which lawmakers introduced 4,861 bills in the House and 3,128 bills in the Senate. NAIOP Massachusetts and its Government Affairs Committee members worked tirelessly to represent the interests of the commercial real estate development industry. NAIOP applauds the leadership of the “big three” – Governor Charlie Baker, House Speaker Robert DeLeo, former Senate President Harriette Chandler, newly elected Senate President Karen Spilka, as well as committee chairs and legislators who pursued a wide-ranging agenda. For the remainder of 2018, 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 a bill from advancing simply by objecting.

While NAIOP advocates on hundreds of bills, here are the must-know highlights of the 2017-2018 legislative session and what they mean for CRE:

Railroad Right of Way Reform Passes in Economic Development Bill
In a win for NAIOP Massachusetts’ advocacy, the economic development bill approved by the House and Senate reforms the current railroad right of way statute (MGL 40/54a) that has created uncertainty and delays for projects on former railroad rights of way. The language in Section 10 of H. 4868 removes the confusing “land appurtenant to” language from the review process; directs MassDOT to establish guidelines, timeframes, and a determination of inapplicability option for unimpacted land; and brings certainty to landowners and lenders while protecting properties of importance to the Commonwealth’s future transportation needs. The final language was based on a stand-alone bill filed at the request of NAIOP by Rep. Joe Wagner and was the result of years of discussions between NAIOP, MassDOT and the legislature. The economic development bill also includes $250 million for the MassWorks program and $75 million for workforce skills capital grants, as well as many other bond reauthorizations designed to spur economic development.

VERY special thanks to Secretary Pollack, Rep. Wagner, Rep. Strauss, Sen. Boncore, Sen. Lesser, legislative leadership, and NAIOP members for their work on this issue. The bill is now before Governor Baker and is expected to be signed very soon.

Flawed Zoning Bill Defeated
NAIOP and all real estate groups in the state, as well as the Mass Municipal Association, opposed H. 4397.  The bill was a top priority for planners and environmental groups and contained anti-growth concepts including eliminating the Approval Not Required (ANR) process, reducing the scope of zoning “freeze” protection under current law only to the particular subdivision plan that is submitted rather than to the “land shown on the plan,” authorizing the use of impact fees without limitation, and mandating inclusionary zoning without incentives. NAIOP educated lawmakers on the numerous provisions of the bill, which would have hindered housing production in Massachusetts.  We are very pleased this very flawed bill did not advance.

Housing Production Bill Left on the Table
NAIOP strongly supported H. 4290, which was filed by Governor Baker and given a favorable report by the Joint Committee on Housing.  That bill allowed cities and towns to adopt zoning best practices by a simple majority vote, rather than the current two-thirds supermajority.  This would have been allowed in situations where the zoning change encouraged more concentrated development including the adoption of 40R “Smart Growth” districts or starter homes, reduced parking requirements, allowing accessory dwelling units, and reducing minimum lot sizes.  The bill was supported by a broad coalition of business groups, the Massachusetts Municipal Association, and the real estate industry.  We are disappointed that the bill did not receive a vote.  Governor Baker has encouraged the legislature to move the policy during informal session (now through December).  NAIOP will continue to work with the Administration and the legislature to promote policies that encourage the production of housing.

Vicarious Liability Bill (Wage Theft) Does Not Pass
NAIOP was part of an 18-member coalition of business groups opposing flawed wage theft legislation containing vicarious liability for businesses that employ entities that commit wage theft (S. 2546). It would have targeted innocent, law-abiding businesses and held them responsible for the actions of other businesses. This would have applied stop work orders and penalties to the lead company who would have had no way of knowing about such a violation.  The Senate passed the bill, but it was not taken up in the House.  NAIOP, which served on a working group with legislators and the proponents of the bill (labor interests), will continue to advocate for fair and balanced solutions to wage theft that go after those who are breaking the law, while opposing proposals that target law abiding businesses.

Balanced and Effective Approach to Climate Change Passes
NAIOP supported the environmental bond bill and climate change resiliency legislation (H. 4835), which passed both chambers and is now before Governor Baker for his signature. It directs state agencies to draft a comprehensive climate adaptation plan and evaluate the Commonwealth’s adaptive capacity to respond to climate change. The Plan will be updated every five years, ensuring a focus on climate change resiliency beyond the current Administration. NAIOP was strongly opposed to other climate change legislation (CAMP – S. 2196)  that would have required “all certificates, licenses, permits, authorizations, grants, financial obligations, projects, actions and approvals issued by a state agency or state authority” to be consistent to the maximum extent practicable (MEP) with a plan.  NAIOP opposed the language because “consistency” would have been open to interpretation and the term “maximum extent practicable” was not defined and therefore set the stage for legal challenges against projects.  We are pleased that the final environmental bond bill does not include this language and NAIOP looks forward to working with the Administration to develop this important plan.

Housing Bond Bill – Brownfields Tax Credit Extended
Earlier in the session, Governor Baker signed the Housing Bond Bill (H. 4536), which included one of NAIOP’s top legislative priorities – a 5-year extension of the Brownfields Tax Credit. The bill authorized $1.8 million in new capital spending for the production and preservation of affordable housing with an extension of the Low-Income Housing Tax Credit and an increase in the annual allocation to $25 million. For more information, read our blog post, Brownfields Tax Credit Extension Signed into Law.

NAIOP is grateful to Senator Rodrigues for his leadership on this issue and applauds the housing bond bill conference committee members (Reps. Honan, McGonagle, Hill and Sens. Boncore, Keenan, O’Connor) for championing the Brownfields Tax Credit, which increases housing, creates new employment, and enhances local and state tax revenues by restoring blighted properties to productive use.

Community Benefit District Legislation Falls Short of Approval
Legislation (H.4546) that would have authorized Community Benefit Districts did not receive final procedural support in the legislature after initial approval in the House and Senate. Community Benefit Districts (CBD) impose assessments on property owners, in addition to property taxes, to fund supplemental services. A CBD may be established only if the property owners in the district who sign the petition to create the CBD will pay more than 50 percent of the yearly assessment. Like last session, NAIOP opposed the CBD framework based on the issue that it would impose additional fees on property owners who may not have supported the creation of the district in the first place. Many other advocacy groups and legislators recognized the potential problems with the CBD framework and stopped the bill from becoming law.

Water Banking Fees Defeated
NAIOP strongly opposed Act Providing for the Establishment of Sustainable Water Resource Funds. House Bill 2116 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.

Job Site Roster Bill Defeated
Senate Bill 1019, An Act relative to transparency in employee benefits reporting in private construction, would have affected projects with 10 or more residential units or commercial projects of 5000 square feet or more by requiring that a roster of employees and independent contractors on a jobsite be publicly posted.  The legislation required a certificate of compliance with no mechanism for applications and issuance, and no timeframes.  Given the extremely fluid nature of a job site, combined with the project delays and costs associated with this legislation, compliance with such a requirement would have been nearly impossible.

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 2019 – 2020 session by meeting with members to determine how to best advance the goals of the industry.

Legislative Update: Issues Affecting CRE on Beacon Hill

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Coasting past a February 7th deadline to advance, retract, or postpone action on the 7,300 bills filed this session, Massachusetts legislators are now meeting through July 31, at which point they will break for the summer and the fall campaign cycle.

As NAIOP expected, several opportunities and threats made it through the deadline set for legislative committees to report out bills to the legislature, including the following:

Housing Choice Initiative

Having unveiled the Housing Choice Initiative with broad-based support in December, Governor Baker used his January State of the Commonwealth speech to highlight the Administration’s plan to spur housing production. The Governor’s legislative package, supported by NAIOP, received a favorable report from the Joint Committee on Housing in February. H.4075 is expected to now move to the House Committee on Ways & Means. Under the legislation, numerous local zoning changes, including the adoption of a 40R district, reduced parking ratios or mixed-use zoning, among others, would require only a majority vote of the local legislative body instead of a supermajority. NAIOP believes this bill, combined with the Housing Choice Designation for municipalities that prioritize housing production, and the Housing Bond Bill (referenced below) are important tools for addressing the Commonwealth’s housing crisis. NAIOP will continue to work to advance this much-needed legislation.

Problematic Zoning Legislation

Smart growth advocates and environmental groups remain committed to Senate Bill 81 and House Bill 2420, the zoning bills that are strongly opposed by the real estate industry. Both of the bills were granted an extension order to March 7. NAIOP, working with a broad real estate coalition, continues to educate lawmakers about the problematic provisions of the bills – particularly language that would hinder the production of housing in Massachusetts. Now that new Senate President Harriette Chandler has indicated that affordable housing is a top priority, NAIOP is advocating that the Governor’s approach is the best path forward for the Commonwealth and will continue to oppose any efforts to combine the Governor’s bill and the zoning bills.

Wage Theft

Wage theft is a serious matter and those who intentionally violate wage theft laws should be held accountable. Unfortunately, two wage theft bills (Senate Bill 999 and House Bill 1033), while well-intended, go after employers who are following the rules and doing the right thing. The bills penalize those who inadvertently do business with a firm that has committed a wage violation, through the imposition of vicarious liability (something that no other state imposes). The legislation would affect anyone involved in construction and development, but it would also have a huge impact on all businesses. It would apply equally to hospitals, universities, and businesses, large and small, that outsource aspects of their operations to other companies or “contractors.”  The financial impact could be severe. Both of the bills were given an extension order until March 7.

NAIOP is part of a large business coalition that is deeply concerned with the impact these bills could have on the Massachusetts economy. Senator Jason Lewis and Representative Paul Brodeur created a wage theft working group, which includes representatives from both sides of the issue. The group has met several times and we will continue to offer up alternative solutions to addressing the issue of wage theft and we will continue to oppose any wage theft bill that would include vicarious liability.

Housing Bond Bill & Brownfields Tax Credit

In January, the House passed a $1.7 billion housing bond bill, which contains numerous provisions supported by NAIOP.  It includes an extension of the soon-to-expire Brownfields Tax Credit and extends the authorization of other tax credits including the state’s Low-Income Housing Tax Credit and the Community Investment Tax Credit.  The bill is now before the Senate Committee on Bonding, which held a hearing on it last week. NAIOP will continue to advocate for quick passage of this important legislation.

A potential economic development bill, an omnibus energy bill, and countless other bills are also on NAIOP’s radar. In the next five months, NAIOP will continue to fight for legislation that encourages economic development and supports the commercial real estate industry.  If there are issues of interest to you or your firm, please contact NAIOP’s Government Affairs Team.

A Little Late, But Welcome to Massachusetts, Steve!

WynnEverettIt appears that the lengthy, sometimes contentious, legal battle between Wynn Resorts Chairman Steve Wynn and Boston Mayor Marty Walsh is over. A “surrounding community” agreement was reached by both parties for the development of an Everett casino. The agreement includes:

  • $31 million over 15 years for community impact
  • $25 million over 10 years for Sullivan Square infrastructure improvements
  • $11 million for traffic mitigation in Charlestown
  • $250,000 for a regional working group on a “long-term fix” for Sullivan Square
  • a “good faith effort” to purchase $20 million annually over 15 years from Boston businesses
  • $1 million for reimbursement of Boston’s professional (legal) expenses.

Wynn Resorts Everett will be a $1.7 billion, five-star, premier destination resort with a 600 all-suite room hotel in Everett, located off Lower Broadway, at the site of the heavily contaminated, former Monsanto Chemical plant. Millions of dollars will be invested to clean and remediate the site and to construct infrastructure and traffic betterments.

The Commonwealth will receive a licensing fee of $85 million, along with 25% of gross gaming revenues, which are estimated to be $260 million annually.

There will be 4,000 full time jobs, as well as over 3,600 construction jobs.

For Everett:

  • $30 million in advanced payments for a Community Enhancement Fund payable during the construction period
  • $5 million Community Impact Fee, increasing annually
  • $20 million for real estate taxes, increasing annually (almost 25% of the city’s tax base)
  • $250,000 contribution to Everett Citizens Foundation
  • $50,000 annual payment to purchase vouchers/gift certificates from Everett businesses to be distributed by Wynn as part of its loyalty programs
  • An estimated $2.5 million per year in hotel and restaurant taxes
  • An active waterfront park with a winter garden and harbor walk will be created

That’s quite a financial commitment by an out-of-state company to the Commonwealth. In case you haven’t heard it before, welcome to Massachusetts!

NAIOP Congratulates Brian Golden

GOLDEN_HEADSHOT

Boston Mayor Martin Walsh today announced at a Greater Boston Chamber of Commerce event that Brian Golden has been appointed as the new Director of the Boston Redevelopment Authority. Brian, who previously served as the Acting Director, has worked at the BRA since 2009.

NAIOP has worked with Golden over the course of the past year and we are very pleased to see his work recognized with this promotion. Starting with an initial audit of the agency, he has been acting on the recommendations to streamline operations and make the agency more fiscally responsible. We understand that he is promoting a more in-depth outside review of the BRA establishing a new strategic plan for the agency.  We wholeheartedly support such a process and look forward to working with him and his team as it is implemented.

NAIOP congratulates Brian Golden and applauds Mayor Walsh for selecting such strong and capable leaders to help him make the City of Boston a great place to live and work!