NAIOP Pursues Ambitious Government Affairs Agenda in 2013

The following appeared in the February 24, 2013 edition of Banker & Tradesman:

Cranes are once again dotting the landscape.  Boston, Cambridge and the suburbs are bustling with new economic development opportunities featuring office, retail, residential, lab, and mixed use projects.  Absorption rates are up and previously proposed developments are seeing new life.  The commercial real estate industry in Massachusetts is alive and well.  Through its government affairs efforts, NAIOP Massachusetts, the Commercial Real Estate Development Association, worked diligently in 2012 to stimulate the industry’s recovery.  Increasing predictability and eliminating red tape were top priorities. Advocacy-sm

As an example, NAIOP strongly supported the Jobs Bill, An Act Relative to Infrastructure Investment, Enhanced Competitiveness & Economic Growth in the Commonwealth, which was signed into law in August.  The law included many of NAIOP’s top legislative priorities including an extension of the Permit Extension Act.  Permits and approvals in effect at any time between August 15, 2008 and August 15, 2012 were extended by four years.  This affected all properties: commercial, housing, business expansions, universities, hospitals, and infrastructure projects.  The bill also made important improvements to District Improvement Financing and the Infrastructure Investment Incentive (I-cubed) program.  In addition, it created a new Local Infrastructure Development Program that provides developers and municipalities with a new tool for leveraging private funding to finance critical infrastructure projects.  The bill was the result of a close collaborative effort by the House, Senate, the Governor’s economic team, and the business community.

Looking ahead, NAIOP is gearing up for an action packed year.  The 2013 – 2014 legislative session kicked off in January and NAIOP filed numerous bills affecting the development, ownership, management, and financing of office, lab, industrial, multifamily, and retail space in Massachusetts.

A top priority for NAIOP is the extension of the Brownfields Tax Credit, which is set to expire this summer if no legislative action is taken.  This tax credit is a proven success.  It protects public health by providing an incentive to clean up contaminated land and redevelop formerly blighted sites into economically vibrant properties.  However, developers need certainty and predictability – especially when making long-term investments.  Without swift action by the Legislature to renew this tax credit, many new projects will not move forward.

NAIOP will continue to advocate for reform of the Facilities of Public Accommodation requirements under Chapter 91, the law governing waterfront development.  Existing law requires virtually all of the ground floor of a waterfront building to be accessible by the public.  This requirement results in countless vacant and underused spaces.  NAIOP’s bill would create more flexibility for ground floor uses, while continuing to create public access to the waterfront.

NAIOP will also pursue legislation that would create a single, uniform statewide energy code.  The bill would ensure Massachusetts remains a leader in energy efficiency while creating a level playing field for all communities.  Building on that concept, NAIOP will also be focused on climate change preparedness.  Given the impact of recent storms, the industry must be prepared for more frequent and severe weather events.  Practical steps are needed to shield existing properties and infrastructure from irreparable damage.  The Commonwealth’s economic survival is at stake.

On the regulatory front, NAIOP will continue to support the Patrick Administration’s massive, top-to-bottom regulatory review for all state agencies. NAIOP was part of the Business Regulatory Review Advisory Committee that recommended which regulations should be rescinded, modified, and or made more consistent with a national model or standard.  Earlier this year, Governor Patrick announced that 446 sets of regulations had been reviewed, leading to 286 opportunities for reform.  NAIOP looks forward to the continued implementation of this effort.  The Massachusetts Department of Environmental Protection is expected to finalize and implement 21 regulatory reforms in the coming weeks.  Also supported by NAIOP, the reforms will make a substantial improvement on the cost and time expended by the regulated community, without diminishing environmental protection.

While Massachusetts is doing well compared to the rest of the nation, the Commonwealth’s recovery is still fragile.  In 2013, NAIOP will continue to urge legislators and regulators to do all they can to ensure Massachusetts retains its competitive advantage.

Massachusetts Leads the Country in Regulatory Reform

Earlier this week, Governor Patrick announced a massive, top-to-bottom regulatory reevaluation for all state agencies.  By the end of 2012, the Administration will have reviewed 1,000 of the regulations that were first put into place prior to 2000, with another 1,000 by the end of 2013. The goal is to determine which regulations should be rescinded, which should be modified, and which could be made more consistent with a national model or standard.

This announcement may be surprising to some since Massachusetts, rightly or not, has not always had a business friendly reputation. With this new sweeping policy, the Governor has taken a hands-on, direct approach to ensure that there will be real results with immediate impacts.

In addition to the regulatory review, any newly proposed regulation must go through an extensive vetting process, lasting over nine months, that starts with a “small business impact statement” consisting of 25 questions delving into the potential financial and time costs.  Small businesses are defined as those with up to 500 employees (85% of the companies in the state.) All draft regulations will go to the Executive Office of Administration and Finance, and to the new Regulatory Ombudsman for fiscal and business impact review .  They will then go to the Governor’s office, where a case must be made that the agency’s recommendations outweigh the impacts and burdens on business and the public.  Only then will these regulations go on to the Secretary of State’s office for posting and public comment.

April Anderson Lamoureux, Assistant Secretary for Economic Development, was just appointed as the first Regulatory Ombudsman between the Administration and the business community.  She gave a detailed presentation on the regulatory reform initiative at the NAIOP Government Affairs program yesterday, along with Alicia McDevitt, Deputy Commissioner at MassDEP.

At the meeting, Assistant Secretary Lamoureux asked that businesses provide her with their suggestions on regulations that do not make sense, have extensive problems, do not add value, or where alternative solutions may better address the issue.  NAIOP has been appointed to a Business Advisory Committee that will help identify problematic regulations and alternative processes.

MassDEP, under the leadership of Commissioner Ken Kimmell and Deputy Commissioner Alicia McDevitt, has led the way on regulatory reform by establishing a target list of 21 different reforms within the Department.  McDevitt provided an update on the Final DEP Regulatory Reform Plan, which was released on Monday.  Although, the reason for this effort originated with a reduced budget affecting staff permitting and oversight, the effort has moved in the direction of creating general permits, self-certification, and third party reviews. Collectively, these reforms will make a substantial improvement on the cost and time for the regulated community, without diminishing environmental protection.

Kudos to the Governor and his Administration for boldly going where few states have gone! Massachusetts has clearly earned the status of “first in the nation” setting a policy to reform one of the most frustrating aspects of government for most businesses and citizens.  As always, others will follow.

Massachusetts Needs Regulatory Reform to be Competitive

A MassBenchmarks report from the University of Massachusetts shows the national economy grew by 3.2 percent in the 4th Quarter of last year, while the state’s grew by only 1.8 percent.  This comes after a stellar performance in Massachusetts with the local economy and job growth outpacing the nation since the 4th Quarter of 2009.

The take-away from this is something we already knew: Massachusetts is a unique place, but we are not so special that we can coast our way to recovery ahead of the nation.  Although this may be an economy “pausing to catch its breath,” as the report suggests, the real risk is that just like the recession of 2000, we end up falling short. 

Consider this a wake-up call.  We cannot afford to be complacent; we must go on the attack, doing everything in our power to make this region more competitive, more business friendly, and more efficient. 

If we are to be truly competitive, we must confront the cost of doing business in Massachusetts.  This includes the direct costs of operations (taxes, fees, insurance, utility costs), but also includes indirect costs of time and resources necessary to comply with the complex, multiple layers of regulations, policies, rules and guidance affecting all employers throughout the state.       

With fewer resources available, now is the time for government to do more with less.  We must be more efficient with resources within our regulatory agencies, and we must allow businesses to focus on job growth rather than wasting time managing redundant and often-outdated or ineffective regulations and rules.  For many years, cost-benefit analyses have been required of all agencies for new regulations, but this has never been taken seriously. The attitude seems to be that businesses are “lucky to be here” and can easily afford any regulatory imposition placed on them.  Government has the responsibility to protect the public, but to ignore the costs and the impacts they have on the economy is not protective of a public that is dependent on job revenue to fund its operations.

Things are improving, however.  In Governor Patrick’s second inaugural speech, he specifically mentioned this issue and the importance of job growth.  During the past 18 months, the Governor and his agency heads took a top-down review of new regulations, and we applaud them for that effort.  Now we call upon them to go further by reviewing our existing regulations to ensure that they are doing the job that they were intended to do; that they are consistent with the statutes authorizing them; that they are the most cost effective and efficient means to their goals; and that there are not better ways to accomplish what they do (e.g. privatization or self-certification).

We may never be the lowest-cost state, but let’s develop the reputation of being a state that understands the needs of business and works actively to make interactions with government as smooth and cost effective as anywhere else.