I recently had the opportunity to participate in the International Council of Shopping Center’s (ICSC) 2020 Congressional Fly-Out Program. In past years, ICSC has arranged for a group of its members to visit Washington, DC to meet with their elected officials and advocate on behalf of the retail real estate industry. I never participated in the trip to Washington, but I always thought it would be interesting.
So when ICSC Director of Grassroots Advocacy, Michael Garrison invited me to participate in this year’s Fly Out program whereby ICSC was setting up meetings with US Congress members in their home districts, I jumped at the opportunity.
The first meeting was with Congressman Pete Aguilar of CA 31st District. We met at the Progressive Real Estate Partners office in Rancho Cucamonga where I was joined by local real estate professionals from Stater Bros., Fitness 19, Allied Commercial, City Commercial and Bird Construction. Later in the week, we visited CA 27th District Congresswoman Judy Chu at her Pasadena office. At this meeting, I was also joined by other real estate professionals including representatives from Cox Castle & Nicholson.
Both meetings started with a discussion of the importance of the retail industry to the overall economy specifically as it relates to lower and middle income paying jobs that are of particular concern to both Representatives.
Although not a Federal issue, we spoke to each of them about the upcoming Split Roll Tax Initiative that is on the November ballot and the detrimental effects it would have on our industry. Our goal was to ask them to remain neutral on the topic versus showing significant support for the legislation.
Other topics included:
- Americans with Disabilities Act (ADA) Lawsuit Reform – This issue was an example of how we as constituents may not want to know how the sausage is made. First, for those of you in California, you should be pleased to know that this is an issue where California is ahead of the Federal government. In California we resolved this issue by allowing those who violate the ADA laws an opportunity to fix the problem BEFORE they can be sued.
But this has not been resolved at the Federal level and as a result, unscrupulous lawyers are now bringing ADA lawsuits against many of ICSC’s members in Federal court instead of State court. Our objective is to get the Federal government to adapt laws like the one in California. As I said to Congressman Aguilar, this seems like a “no brainer”, but how wrong I am. It turns out that disability lobbyists and their constituents are fearful of ADA reform and have threatened the legislatures with harsh public relations tactics to hurt their reputations. Wow, I did not see this coming at all. Who would have thought that anyone (other than lawyers who benefit from the threat of litigation) would think that it is unfair to give someone the right to fix an issue versus suing them to resolve the matter. - Fixing the Qualified Improvement Property Glitch – This involves fixing the mistake from the 2018 tax reform package that apparently accidentally changed the depreciation for Qualified Improvement Property from 15 years to 39 years. Both candidates acknowledged that it was an error, but there were differing opinions relative to how to resolve this issue.
- Opposing legislation that would tax carried interest as ordinary income – Supporting income that is currently classified as carried interest and is therefore taxed at a lower tax rate than ordinary income. Our biggest objective here was to try and get them to not see this issue as a “billionaire hedge fund” concern, but instead a matter that could detrimentally impact the number of retail development projects performed by small developers which is particularly important to projects in the San Gabriel Valley and Inland Empire. I think they heard us, but both remained non-committal about their stance.
- Preventing H.R. 2513 which involves “beneficial ownership reporting requirements” – This is one that I knew nothing about, and is a bit complicated. Basically, it will require about 90% of businesses in the United States to report their investors to the federal government. The purpose is to reduce illegal activity that may be hidden behind corporate entities, but it would put a huge reporting burden amongst many real estate corporations, partnerships and limited liability companies, including substantial penalties for failure to comply. I think both legislators listened and recognized that this bill might need some work.
Overall, I truly appreciated the opportunity and the hospitality afforded to me by Michael Garrison and ICSC. The meetings allowed me to see first-hand our legislative process in action and have a minor role. I would encourage fellow ICSC members that are interested in the legislative process to learn more about the Fly-Out program and other legislative efforts by ICSC.
Lastly (speaking of legislation) with the March 3rd election behind us, I personally will be focusing on preventing the November Split Roll Tax Initiative that would substantially increase property taxes for commercial property in California. Stay tuned – I will be writing more about this topic as the year progresses.
Pictured Above: From left to right: Michael Garrison (ICSC), Mike Reed (Stater Bros.), Dave Bird (Bird Construction), Tony Guglielmo (Allied Commercial), Congressman Pete Aguilar, Sean Bailey (City Commercial), Bob Rodger (Fitness 19), Brad Umansky (Progressive Real Estate Partners), Paul Rice (Fitness 19), Mike Fortunato (City Commercial) & Pablo Velasco (Progressive Real Estate Partners).