News

NAIOP Northeast Florida in Tallahassee, FL

On February 21st a contingent from NAIOP went to Tallahassee representing our chapter. We were well received by all State Legislators and Senators within Northeast Florida. All are very receptive to our Policy advisory committee and are looking forward to hearing our findings to streamline regulatory procedures to jumpstart new development within our community. Shown in the photo is Chapter President Gordy Steadman, State board member Jeff Evans and State Senator Audrey Gibson.

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2012 NAIOP Legislative & Leadership Retreat - Washington DC

From Monday, February 6th until Thursday, February 9th, NAIOP Northeast Florida sent a group of members to Washington D.C. for the annual NAIOP of Florida Board of Directors meeting and to meet with our nation’s legislators to discuss issues important to the commercial real estate industry. The following members were on the trip:

--Gordon Steadman, President
--Traci Jenks, President Elect
--Christian Harden, Developing Leaders Chair
--Julie Bohn, Membership Chair
--Carmel Buchanan, Chapter Executive

NAIOP was able to attend meetings with the following Legislators and/or their aides:

--Senator Bill Nelson
--Senator Marco Rubio
--Representative Ander Crenshaw
--Representative Cliff Stearns
--Representative Corinne Brown
--Representive John Mica

All the legislators seemed keen on supporting legislative issues that create a healthy business climate for commercial real estate development in Florida, one of the leading contributors to the domestic economy.

Some of the issues discussed were carried interest, tax extenders and transportation funding.

Carried Interest

--Carried Interest, also known as a "promoted interest" or a "promote" in the real estate industry, is a financial interest in the long-term capital gain of a development given to a general partner by the investors in the partnership.
--Currently taxed as capital gains, proposals to change the tax treatment of carried to ordinary income would result in a dramatic tax increase (from 15 percent to as high as 35 percent) for many real estate development partnerships.
--More importantly, if enacted, such a change would significantly hinder future commercial real estate development activity.
--NAIOP strongly opposes changing the tax treatment of carried interest from capital gains to ordinary income.

Tax Extenders

Numerous business tax provisions that enjoy bipartisan support expired at the end of 2011 when Congress failed to agree on legislation extending the provisions. One of the primary concerns is allowing for 15 year leasehold improvement depreciation.

--Leasehold Improvement Depreciation is the ability to deduct the cost of the customized improvements a building owner makes to a rental space to configure it for a tenant's needs.
--The current 15-year depreciation schedule automatically reverts to a 39-year depreciation schedule.
--Failure to extend 15-year qualified leasehold improvement depreciation will result in higher capital costs for many building owners, creating disincentives to upgrade and modernize the space for their tenants.
--Because the provision is not a permanent part of the tax code but is only addressed annually as part of broad "tax extenders" legislation, Congress is repeatedly forced to address the issue, denying businesses the level of certainty needed for better long-term planning.
--NAIOP supports extending and making permanent 15-year leasehold improvement depreciation, which is in closer alignment with the economic reality of the leasehold improvements' typical lifespan.

Transportation

--NAIOP believes that increasing federal transportation and infrastructure funding is paramount to a thriving real estate industry and national economy.
--The success of commercial real estate projects depends largely on infrastructure investments and viable connectivity strategies that incorporate different modes of transportation, including highways, roads, rail and mass transit.
--Congress needs to enact a new multi-year transportation bill that fully funds our nation's transportation and infrastructure needs. In addition to the passing of a new transportation bill, new innovative funding solutions should be developed to help spur private investment.
--NAIOP supports increased transportation and infrastructure funding, new public-private partnerships, the creation of a national infrastructure bank and new tax incentives that encourage private investments for infrastructure improvements.
 

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Jennifer Carroll: ‘We’re not going to rest on our laurels’ [Daily Record]

by David Chapman, Staff Writer

Gov. Rick Scott will continue to streamline government and reduce bureaucracy and taxes during the legislative session and his second year in office, said Lt. Gov. Jennifer Carroll.

“Now Florida is ranked as the third business friendly state in the nation,” Carroll said. “We’re not going to rest until we are No. 1.”

Carroll was the keynote speaker at NAIOP of Northeast Florida’s meeting Friday, where almost 150 members and guests heard the former local legislator discuss economic growth, commercial spaceports, the Embraer deal and more.

“This legislative session we’re not going to rest on our laurels,” she said. “We’re going to move forward to even further reduce taxation on businesses and homeowners.”

Carroll is chairwoman of Space Florida and discussed the potential of commercial spaceports in terms of both business and education opportunities. GPS, cell- phones, scratch-proof eyewear lenses, medical equipment and national security were all examples Carroll presented as everyday benefits of the space program and its technology.

Read More...

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2011 NAIOP of Florida Public Affiars Summit

The 2011 NAIOP of Florida Public Affairs Summit was held in Orlando on October 13th and 14th. The NAIOP of Northeast Florida delegation consisted of President-Elect Gordy Steadman, Vice President of Public Affairs Wyman Duggan, and NAIOP of Florida Board Members Traci Jenks, Fitch King, Jeff Evans, and Nelson Bradshaw. The following significant items were discussed.

1. Online Retail Sales Tax: Legislation will be introduced during this coming state legislative session to require online retailers to collect and remit sales taxes for sales made to Florida residents. Current state law imposes this tax but requires the purchaser to track and remit it to the state of Florida if the retailer does not do so. NAIOP of Florida decided to make this a core lobbying issue for the 2012 Legislative session. Our Chapter has already passed a resolution in support of this effort to close the online sales tax loophole.

2. Imposition of Sales Tax on Tenant Improvements: The Florida Department of Revenue is undertaking rulemaking regarding the taxability of tenant improvements to real property. The law in this area is evolving and the Department of Revenue is looking for a rule that may give definitive guidance. A draft rule is not yet available for review. Accordingly, NAIOP of Florida voted to continue to track the rulemaking process and report back to the Chapters via their public affairs chairs.

3. New Amendment 4 - Additional Property Tax Exemption/Cap: The Florida Association of Realtors has placed a proposed amendment to the Florida Constitution on the 2012 ballot that would decrease the current 10% cap on annual ad valorem increases for non-residential property to 5%. It would also provide an additional exemption for residential properties. A presentation was made by an FAR representative seeking NAIOP of Florida’s support for the amendment. NAIOP of Florida is soliciting input from the various Chapter Boards before taking a position on this issue.

4. Miscellaneous Issues: Summaries of the following topics were provided by NAIOP of Florida’s lobbying firm, Pennington Moore: i) the potential for growth management “glitch” legislation in the upcoming session; ii) recent reform to the Bert J. Harris Private Property Rights Act (intended to make claims against governmental regulations that do not rise to the level of a taking easier to prosecute); iii) the potential introduction of legislation allowing for non-judicial foreclosure in Florida (Nelson has agreed to liaise on this effort as a member of the Florida Bankers Association state board); and iv) a sunset extension of the distressed condo relief act. Copies of the summaries of those issues may be obtained from Wyman Duggan upon request. In addition, discussion was had as to whether NAIOP of Florida should take a position on potential state immigration legislation. The consensus was that this is not a core issue for NAIOP of Florida, and therefore no position will be taken.

Finally, Nelson Bradshaw was elected Treasurer of NAIOP of Florida for 2012

Wyman Duggan - V.P. Public Affairs
 

NAIOP Legislative Wrap-up and Bill Tracking Charts

Summary of HB 7207
Wyman Duggan, VP of Public Affairs NAIOP Northeast Florida

The Governor has signed HB 7207, the comprehensive growth management reform legislation passed by the Legislature. The legislation amends several aspects of the growth management regulatory scheme in Florida. Summary highlights of the legislation follow. The law takes effect immediately. Read More...
 

2011 NAIOP Leadership & Legislative Retreat Washington, D.C.

From Monday, February 7th until Thursday, February 11th, NAIOP Northeast Florida sent a group of members to Washington D.C. for the annual Chapter Leadership and Legislative Retreat. In addition to meeting with leaders of other chapters aroud the country to discuss ideas of how to improve the running of our chapter and ways to provide more value to our members, we met with our nation’s legislators to discuss issues important to the commercial real estate industry. Our chapter sent the following representatives:

• -Karl Hanson, President
• -Gordon Steadman, President Elect
• -Eric Sharpe, Past President
• -Traci Jenks, Public Relations
• -Christian Harden, Developing Leaders Chair
• -Carmel Buchanan, Chapter Administrator

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NAIOP was able to attend meetings with the following Legislators and/or their aides:

* Senator Bill Nelson
* Representative Ander Crenshaw
* Representative Cliff Stearns
* Representative Corinne Brown

All the legislators seemed keen on supporting legislative issues that will help create a healthy business climate for commercial real estate development in Florida, one of the leading contributors to the domestic economy.

Some of the issues discussed were tax code simplification and reform issues such as Brownfields remediation expensing, carried interest tax reform exclusions for real estate partnerships, and leasehold improvement depreciation. The Northeast Florida chapter put considerable focus on the importance of federal assistance towards transportation and infrastructure projects that promote economic growth in our region and cement Jacksonville as a national leader in logistics operations.

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Tax Code Simplification and Reform efforts will be a prominent part of the legislative debate during the next two years. Any comprehensive tax reform efforts should take into account the impact upon the commercial real estate industry that would result from changes in capital gains tax levels, and ensure that such changes do not disadvantage capital investment in real estate.

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* Leasehold Improvement Depreciation is the ability to deduct the cost of the customized improvements a building owner makes to a rental space to configure it for a tenant's needs.

* The current 15-year depreciation schedule for qualified leasehold improvements needs to be reauthorized at the end of this year, or it will automatically revert to a 39-year depreciation schedule.
* Failure to extend 15-year qualified leasehold improvement depreciation will result in higher capital costs for many building owners, creating disincentives to upgrade and modernize the space for their tenants.
* Because the provision is not a permanent part of the tax code but is only addressed annually as part of broad "tax extenders" legislation, Congress is repeatedly forced to address the issue, denying businesses the level of certainty needed for better long-term planning
* NAIOP supports extending and making permanent 15-year leasehold improvement depreciation, which is in closer alignment with the economic reality of the leasehold improvements' typical lifespan.

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* Brownfields Remediation Expensing allows for the expenses incurred in the cleanup of brownfields site to be immediately expensed by a developer.

* Brownfields remediation expensing provides an important incentive to revitalizing contaminated properties across the country.
* To increase the usefulness of this incentive, a "carry forward" provision should be included to allow the expensing deduction to be used in future years, when taxable income from many of these redevelopments is earned, toward which the deduction can be applied.
* Like 15-year leasehold depreciation, brownfields remediation expensing is not a permanent part of the tax code, and must be extended before the end of this year.
* NAIOP supports extending and making permanent brownfields remediation expensing, as well as efforts to add a carry forward provision that would increase its effectiveness.

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* Carried Interest, also known as a "promoted interest" or a "promote" in the real estate industry, is a financial interest in the long-term capital gain of a development given to a general partner by the investors in the partnership.
* Currently taxed as capital gains, proposals to change the tax treatment of carried to ordinary income would result in a dramatic tax increase (from 15 percent to as high as 35 percent) for many real estate development partnerships.
* More importantly, if enacted, such a change would significantly hinder future commercial real estate development activity.
* NAIOP strongly opposes changing the tax treatment of carried interest from capital gains to ordinary income.
* NAIOP believes that increasing federal transportation and infrastructure funding is paramount to a thriving real estate industry and national economy.
* The success of commercial real estate projects depends largely on infrastructure investments and viable connectivity strategies that incorporate different modes of transportation, including highways, roads, rail and mass transit.
* Congress needs to enact a new multi-year transportation bill that fully funds our nation's transportation and infrastructure needs. In addition to the passing of a new transportation bill, new innovative funding solutions should be developed to help spur private investment.
* NAIOP supports increased transportation and infrastructure funding, new public-private partnerships, the creation of a national infrastructure bank and new tax incentives that encourage private investments for infrastructure improvements.

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Harding: City must reinvest, not just cut [jacksonville.com]

Submitted by Abel Harding on February 6, 2011 - 6:19am Abel Harding

Two very different schools of thought have emerged in the scores of mayoral and City Council forums being held in advance of spring elections.

Nearly every candidate seeking the mayor’s office or a seat on the Jacksonville City Council can agree on one point — the city needs jobs.

Read More...

State may tighten up safety net for jobless[herald-tribune]

TALLAHASSEE - With Florida's high unemployment rate showing little sign of dropping, state lawmakers say it is time for sweeping changes to the safety net for jobless workers. Lawmakers may shorten the time the state pays jobless benefits, make it harder for laid-off workers to win disputes with employers and force people to take low-paying jobs instead of waiting for ones with salaries matching what they once earned. Legislators may also change tax rates so businesses hit with steep layoffs are more responsible for helping pay for those workers' benefits.

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Moran, Mullaney debate development [Jacksonville Biz Journal]

Two front-runners in the Jacksonville mayoral race, Audrey Moran and Rick Mullaney, discussed their plans to stimulate Northeast Florida’s economy and boost job development during a forum Thursday hosted by a consortium of local land use and real estate development groups.

Read More...
 

US Regulators Emphasize Importance Of Reliable Appraisals [NASDAQ.COM]

U.S. regulators have issued guidelines emphasizing the importance for banks to ensure the reliability of real-estate appraisers.

The guidance released Thursday on sound practices by financial institutions for real-estate appraisals and evaluations replaces 1994 guidelines.

The regulators issuing the new guidance included the Federal Reserve, the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration.

Read more...