NAIOP Southern Nevada, announced its support last month for the Southern Nevada Economic Development and Conservation Act introduced Wed., March 3 by U.S. Sen. Catherine Cortez-Masto (D-Nev.). This legislation will expand public lands conservation and economic development opportunities in Southern Nevada.

According to the association, this bill takes into consideration sustainable and efficient growth, economic development, recreation, preservation and conservation interests.

For many years, NAIOP Southern Nevada has advocated for a balanced approach to managing federal lands in Southern Nevada to attract industry and new business while also maintaining a high quality of life for local residents and visitors. NAIOP leaders realize Southern Nevada will require properly configured and sized land parcels in appropriate locations to remain competitive, while diversifying the local economy.

“In the absence of this vital legislation, Southern Nevada will soon face a land shortage stunting our economic development and diversification efforts,” said David Strickland, NAIOP Southern Nevada Chapter president. “Expansion of the disposal boundary, coupled with a regional plan that allows for efficient, sustainable development, keeps Southern Nevada competitive and able to attract new business, improving the quality of life for residents in Southern Nevada through increased employment opportunities, economic diversification and higher wages and incomes.”

In addition to being one of several organizations consulted during the development of the Southern Nevada Economic Development and Conservation Act, NAIOP commissioned a detailed study by local firm RCG Economics that evaluated whether short-term and long-term developable land constraints could negatively impact the region’s economic strength and resilience.

Highlights from the study include:

  • To attract industry and new business, Southern Nevada will require properly configured and properly sized land parcels in appropriate locations to attract investment and businesses, and create well-paying jobs, while diversifying the local economy. Without this, Southern Nevada will be less economically competitive compared to other regions in the Western U.S.
  • The supply of right-sized parcels for large-scale commercial development in the Las Vegas Valley is extremely scarce. The study shows there are now only 22 local parcels consisting of at least 60 acres, of which only 15 of those parcels are privately owned and could be potentially available for economic development purposes. There is a strong possibility that most if not all these parcels will be absorbed in the near- to mid-term.
  • Southern Nevada is projected to require about 14,100 acres of developable employment land to support the approximately 390,000 jobs that are projected to be needed by 2035 to support the region’s population and to provide economic resiliency.
  • The shortage of developable employment land parcels in the urbanized portion of Southern Nevada poses a significant challenge to future economic resilience and sustainability. If nothing is done to ensure that sufficient land is available to support the region’s economic development goals, Southern Nevada residents will likely see their quality of life diminished.

According to NAIOP Southern Nevada, the results of its study demonstrate the impact to Southern Nevada and its economy from competitive cost disadvantages due to land constraints. It also quantifies the potential future declines in economic output, employment, earnings and gross regional product (GRP) due to this land shortage. The study found that potential cost disadvantages of 3% to 5% would significantly and negatively affect Southern Nevada’s economy and the well-being of its residents and businesses.

Click here to review NAIOP’s 2020 Southern Nevada Industrial Land Study.

 

Jonathan Leleu, Lobbyist/Attorney
jleleu@argentumnv.com

Kerrie Kramer, Lobbyist
kerrie@argentumnv.com

Argentum Partners
(702) 692-8037

Someone’s knockin’ at the door
Somebody’s ringin’ the bell
Someone’s knockin’ at the door
Somebody’s ringin’ the bell
Do me a favor
Open the door and let ’em in

– Paul McCartney

 

There was a time, in recent memory, we yelled at our children for watching too much YouTube.  Then 2021 came along, and like a bad frozen drink, added equal parts 81st Nevada Legislative Session and COVID-19, held the booze for maximum annoyance, and hit frappe.  Voila.  You’re on YouTube, and YOU’RE on YouTube, and YOU’RE on YouTube…and all of us are watching our elected officials cobble together policy like the Brady Bunch.

The good news is our beloved Gang of 63 managed to keep some vestiges of normalcy, e.g., “legislative time,” and while waiting in YouTube purgatory, Jon learned how to do the Thriller dance while sitting at his desk, and also figured out how to build a DIY shed from scratch – those two things will either keep him occupied through summer, or wind him up in the hospital.  Time will tell.

Without lobbyists in the building, the Legislature has been left on their own to debate revenue, budget, and policy decisions in a virtual chatroom, and really, in a vacuum.  Although most legislators have been very good about setting meetings and returning calls, these detached experiences provide a fraction of the accessibility normally enjoyed in a live setting – gone are the elevator speeches, “walk and talks,” and smoke breaks which provided an opportunity to discuss concepts which would ultimately be voted on, and unfortunately, several bills antagonistic to development remain pending given deadlines have been suspended and no bills have died.

Property Tax

SB 10 – this bill is recycled legislation (AB 43 – 2017) which would place a 3% floor on statutory property tax abatements.  Citing a dip in property values in 2017, NACO presented testimony indicating the bill is intended to stabilize revenue streams, which were disrupted by a reduction in property values.  The bill is not intended to raise revenue, so much as secure existing revenue.  NAIOP opposed this legislation in 2017, and opposed it again in 2021 as it fails to address the root cause of these issues; Nevada’s convoluted tax structure.  More, this issue is far from policy-based, as the Legislature’s refusal to address property taxes in any way has caused municipalities to assess fees on virtually all processes related to development, and legislation exists in this session to assess even more fees to support programs administered at the municipal level (see below).

SB 64 – this bill is somewhat similar to SB 10, in that it attempts to place a 3% floor on statutory abatements, however, SB 64 would remove the secondary cap calculation, and also reduce allowable depreciation deduction by half a point.  NAIOP is opposing this bill.

SJR 8 – this Resolution is the second go-around for SJR 14 from the 2017 Legislative Session (reset on sale/depreciation), which died without a hearing in 2019.  Given no discussion has been offered regarding real property tax reform, NAIOP is not currently opposing or supporting SJR 8.

Anti-Development

AB 211 – this bill would require any application for tentative map to be submitted to the Nevada Department of Wildlife for a 30-day evaluation and comment period, prior to the local planning commission hearing the matter, and at a cost of up to $5,000 per application.

AB 331 / 334 – these bills seek to enable a local government to assess a “linkage fee” of up to $5 psf. for new industrial development and $3 psf. for new commercial development, to be dedicated to affordable housing.  AB 334 also enables the municipality to offer “payments in lieu” of a development including inclusionary zoning.

Landlord/Tenant

With the exception of AB 141, no landlord/tenant legislation has been introduced which affects commercial tenancies.  With respect to AB 141, Assemblyman Watts has offered a conceptual amendment to remove references to commercial tenancies, as the bill was intended to be residential only.  NAIOP is neutral on this bill.

In addition to the above mentioned bills, we are currently waiting on language from the Treasurer’s Office that would seed the infrastructure bank for a multitude of projects within the state. They are currently looking at $75 million in bonding from the state and $135 million in federal funds would seed the bank, while expanding the eligible use of infrastructure bank funds. One way they are looking to expand the use of the funds is to social infrastructure which could include affordable housing and broadband connectivity. We will hopefully have bill language in the next couple of weeks and will keep the membership informed once we do.

Lastly, there are rumors that we will be back in the building in the next couple of weeks in a limited capacity. What that means and what it looks like are unknown at this time, but one thing is for sure, less screen time is better not just for our eyes, but for the legislative process.

 

Jon & Kerrie

Jonathan Leleu, Lobbyist/Attorney
jleleu@argentumnv.com

Kerrie Kramer, Lobbyist
kerrie@argentumnv.com

Argentum Partners
(702) 692-8037

 

“You know how I always dread the whole year? Well, this time I’m only going to dread one day at a time.” – Charlie Brown

What is a “New Year?”  Is it a clean break from the past, or just another tomorrow?  2020 was a year where every tomorrow looked like yesterday, and we ended the year right where we began – looking out the window wondering what next year will bring.  Here’s to hoping we can leave the dread in 2020; but first, here’s a look at some of the things that contributed to our gray hair this past year. NAIOP started the year off right with our annual Day on the Hill in Washington DC, where we met with our federal delegation and fought the good fight toward expanding the BLM disposal boundaries in Southern Nevada, and advocating in favor of legislation intended to spur development and growth in the state. As an organization, we thought this would be our biggest fight of 2020. If only…if only.

Shortly after our time in DC, the COVID-19 pandemic struck our nation and our state. Nevadans were some of the hardest hit by the effects of the pandemic and the shuttering of our economy, while we tried to “flatten the curve” and control the spread of the virus. And while CRE was deemed essential, our industry wasn’t without its trials. At the end of March an eviction moratorium was put in place to keep people in their homes and businesses. Directive 008, was well intentioned, but needed another look on the commercial front, as many landlords and tenants had already come to some sort of lease workout agreement and landlords needed all remedies available to them in addition to those agreements. So, we went to work on educating our government officials on the issues commercial landlords were facing and how the eviction laws already in place protect both tenant and landlord when it comes to evictions in the state. The endeavor took nearly 3 months, but we were successful in getting the issue resolved and the moratorium lifted. More than a few grey hairs were earned as Q2 came to a close.

Shortly after the moratorium was lifted, the first of two special legislative sessions started. This 100% remote session was unlike any other – in a year where unprecedented became the norm. As revenue shortfalls and court cases turned the budget into Swiss cheese, lawmakers had to do their best to cobble together stabilizing measures, making major cuts to DHHS and education. There were plenty of shenanigans and fireworks (and not the fun kind), and after 12 long days and nights the legislature adjourned with the promise of another special session to follow shortly. It was during the second virtual special session, where the heavy lifting came. Businesses were in desperate need of commercial liability protections, while employees were in need of safety assurances and protections that would allow for them to safely return to work. It took just over a week for both sides to agree that the legislation was not perfect and neither side was going to receive everything they wanted, but that the liability protections passed amounted to a good start. All in all, for NAIOP members and the business community as a whole, this was a win. During this time, gray hairs were accumulating far more rapidly than before.

While all of this was going on, the federal delegation’s attention was obviously elsewhere, pushing aside the federal lands bills we had been working toward in favor of aid packages aimed at keeping the nation treading water. But as 2020 wound down and stimulus legislation was passed, NAIOP renewed its ferver toward passing the public lands bills, publishing its commissioned land study, and holding many meetings to present and educate like minded industry leaders, major business interests, municipal leaders, and the federal delegation. Now that we have entered 2021, we continue to meet with and encourage our lawmakers to pass legislation that expands our disposal boundaries while keeping responsible growth in mind. We will also continue to work on local issues within the jurisdictions as they come up to ensure code revisions, ordinances, fee changes, and anything else development related is done with NAIOP at the table. There is still much to be done, so you may as well start embracing the gray.

2020 was difficult for everyone, but we will continue to work to ease the burdens on development where we can for all NAIOP members. Happy New Year to each and everyone of you, and thank you for your continued support of our efforts.

Jon & Kerrie

Jonathan Leleu, Lobbyist/Attorney
jleleu@argentumnv.com

Kerrie Kramer, Lobbyist
kerrie@argentumnv.com

Argentum Partners
(702) 692-8037

“We have to find a way to finance infrastructure that gets it done fast and creates a return.” – Gordon Brown, Chair, World Economic Forum, Global Strategic Infrastructure Initiative

As all NAIOP Southern Nevada members are aware, the Infrastructure Bank has sat atop of our issues list for years.  In 2017, we worked with RTC to pass AB 399, which created the infrastructure bank.  Since that time, it has sat dormant, waiting for an appropriation from any source which would serve as seed-funding to get the bank up and running. Enter Nevada State Treasurer, Zach Conine.

Treasurer Conine approached NAIOP in August to discuss a plan he has which would breathe life into the infrastructure bank. Using a small portion of the CARES Act funding the state received, the Treasurer’s Office along with the Governor’s Office of Economic Development (“GOED”), will commission feasibility studies on infrastructure needs they’ve identified as key to sustainable and continued job growth. These studies will include broadband, telecommunications, and e-commerce expansion to respond to public health, distance learning, and economic pressures created by COVID-19; supply chain and last-mile delivery enhancements to improve delivery services impacted by COVID-19; assessing Nevada’s behavioral health care delivery systems to ensure capacity to respond to the impacts of COVID-19, negative economic pressures, and related government stay-at-home orders; retraining Nevada’s workers who have been displaced during the COVID-19 public health emergency; strengthening state systems and processes to respond to the COVID-19 public health emergency. The feasibility studies will then culminate into one final study: the COVID-19 Comprehensive Economic Response Plan. Upon completion of all the studies, the Treasurer’s Office along with GOED will use this information to find private donors to seed the infrastructure bank and get these projects out of the ground. The point of these studies is to be able to cull information in order to sustain our job growth, grow our ability to attract new development, diversify our economy, and use forward thinking to move our state in the right direction, should we encounter another economic downturn. While it does not produce immediate jobs and infrastructure, it does put the ball in motion for Nevada to be a job creator for many years to come and build something that will lead to even more job creation, as businesses who will benefit from the infrastructure, move into Nevada.

This item was taken up during the Interim Finance Committee’s (“IFC”) September 28, 2020 meeting.  The committee discussed the studies in depth and debated how the use of CARES funding would be beneficial, if there was not an immediate benefit. To that, the Treasurer’s Office, GOED, and Senator Chris Brooks explained the dire need for infrastructure and “shovel ready dirt” in Nevada. It was explained that while this doesn’t immediately produce construction jobs, it will going forward and it will create a pipeline for job creation as the funding comes in, the infrastructure bank continues its function, and more and more projects are implemented. The goal is to create sustainable job growth for the future in Nevada, while also putting in the much needed infrastructure to attract, build, and bolster business for continued job creation and diversification in the state.  One of the most fundamental pieces of this is the study on retraining Nevada workers who have been displaced by the pandemic. Workforce development is a crucial piece of CRE and creating a pipeline where individuals can learn a new trade and get back to work in an industry where they can see continued personal growth, and Nevada realizes diversification of industry, promotes a healthy path forward for our state and keeps people employed. Taking all of this into consideration the IFC approved the money for the studies which will start immediately and be finished around November 30, 2020.

This type of forward thinking and investment into our state is something we have been lacking for a long time. In a year where nothing seems to be moving forward, Nevada seems to be moving full-steam ahead. Let us hope that this project, started 4 years ago now, is the catalyst that brings Nevada out of this pandemic on top and sets us up for a bright and diversified future.

Click here fore the meeting packet from the IFC meeting.

Stay safe –

Jon & Kerrie

Jonathan Leleu, Lobbyist/Attorney
jleleu@argentumnv.com

Kerrie Kramer, Lobbyist
kerrie@argentumnv.com

Argentum Partners
(702) 692-8037

Nevada State Treasurer Zach Conine has extended the Commercial Rental Assistant Grant program, making grant funds available to aid commercial landlords and tenants, as they work together to survive the current economic downturn. Should a landlord agree to the terms (generally, a 90-day forbearance of eviction action), grant funding up to $10,000 (per tenant applicant) will be paid directly to the landlord, as payment for past rent. To qualify, a tenant needs to show a 30% or greater reduction in revenue.

Treasurer Conine has now eased some of the restrictions on the program. Tenants who received PPP loans are no longer disqualified. In addition, the tenants can now apply the funds to future rent in the event they have stayed current.

Application deadline is Tuesday, September 8, 2020 at 5:00 pm

Please contact Jon or Kerrie for further details.

Jonathan Leleu, Lobbyist/Attorney
jleleu@argentumnv.com

Kerrie Kramer, Lobbyist
kerrie@argentumnv.com

Argentum Partners
(702) 692-8037

I was in the Virgin Islands once.  I met a girl.  We ate lobster and drank pina coladas.  At sunset, we made love like sea otters.  That was a pretty good day.  Why couldn’t I get that day over and over and over…

  •  Groundhog Day

But for its final 3 weeks, 2020 1Q charted an upward trend in CRE, as commercial development enjoyed sustained overall growth in all sectors.  Indeed, discussions with utilities, municipalities, and electeds centered on increasing infrastructure capacity and lack of available land – an amazingly wonderful problem to have.  When we woke up the week of March 9, we jumped out of bed, listening to Sonny and Cher singing “I Got You Babe.”  We enjoyed our coffee, sprang out the door, had our typical days, and went to bed taking for granted that tomorrow would move forward, as tomorrows always do.  “I Got You Babe.”  Well, that was weird.  “I Got You Babe.”  Nah – this is a fluke.  “I Got You Babe.”  Ok, where’s the damn bourbon?  “I Got You Babe.”  As the global landscape of our daily lives continues to evolve, and we learn to accept our new (albeit temporary) normal in captivity, it is important to focus on the quarter that was, and where we are headed in our new world.

NAIOP’s Annual Chapter Leadership and Legislative Retreat was held in Washington, DC on February 3-5, 2020.  At this meeting, the NAIOP Corporate familiarized Chapter government affairs committee members with an issue in the 2017 Tax Cuts and Jobs Act.  Specifically, when the Act passed, a technical error was made pertaining to leasehold improvements or Qualified Improvement Property (“QIP”). This error made QIP depreciable over 39 years instead of the intended 15. It also made it ineligible for 100% depreciation. Although we had many discussions regarding this technical error, were told time and time again that despite the fact there was rare bipartisan support for the fix, that precise rarity was also being used as leverage by some to get other “wish list” items taken care of. We left DC with the understanding that everyone supported the fix, but there was no timeframe by which it would get done. All that changed on Friday, March 27, 2020 when the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was passed and signed into law. The CARES Act not only provides vital economic stimulus in the form of direct payments, unemployment insurance, payroll taxes, and much more, it also finally corrects the technical error made in 2017. This correction will allow those who made investments in QIP in 2018/2019 to file an amended return and receive a refund of any overpaid taxes.

In addition, NAIOP took advantage of its time in DC to continue its efforts to move a federal lands bill, more specifically the discussion draft shepherded by Senator Catherine Cortez Masto’s office. During our meetings, our main goal was to inform our delegation that the draft in its current form, specifically as it relates to the MSHTP language, should remain as written. The offsets for development and keeping them at the rates contained in Clark County’s proposal and in the discussion draft are critical. Should those rates be lessened or taken out entirely, the bill would be of very little benefit to the development community. In its current form, NAIOP believes the discussion draft strikes a fair balance between conservation and development, which is NAIOP’s ultimate goal.

Currently, there is little to no movement with this discussion draft, as economic stimulus legislation has dominated Congressional attention. After the passage of the CARES Act last Friday, it was announced that Congress would recess until the end of April. We remain in frequent communication with Senator Cortez Masto’s office, should anything change with the draft. That said, the Biden campaign released what amounts to a three-woman short list of potential Vice Presidential candidates, and we are very proud to note the Senator is one of the three mentioned. As always, we will keep the membership up to date with any movement or changes to the draft.

In Nevada, we have seen many changes impacting our membership (outside of social distancing, isolation, closure of businesses, way too much time with spouses and kids, etc.) at the state and local levels. Perhaps one of the most important changes impacting all Nevadans are to Nevada’s primary election in June. On March 24, 2020, Secretary of State Barbara Cegavske announced all 17 counties in the state will participate in an unprecedented all-mail election. This will mean ballots will be sent directly to your home, and you will have until close of polls on June 9, 2020 to either drop your ballot off in-person, or have it postmarked. Of critical import will be every voter ensuring the information listed on their voter registration is up to date, so ballots can be mailed to the correct address. For more information and to update your voter registration, please click here for the link.

Lastly, on March 29, 2020, Governor Sisolak, Attorney General Ford, and State Treasurer Conine announced a moratorium on evictions, both residential and commercial. The Governor explained this is not relief of the obligation for a tenant to pay rent, but should they be unable to pay during the closure of their business or for other reasons, until the declaration of emergency is over, tenants shall not be evicted for any other reason than a threat to public safety. The Governor asked landlords and tenants to work together to modify the payment structure of leases, whether that be by a deferral of payment, amortization, or other structure. Notably, the Governor prohibited aggregating delayed rent into a “balloon” payment.  In addition, landlords may not lock their tenants out during this time, or attempt to scare them into moving out. For more information, please see the links below to the Governor’s directive, as well as, the actual speeches given at the press conference.

Click here for 03/29/2020 Guidance Direction on Evictions
Click here for the 03/29/2020 Housing Stability Measures

ODDS & ENDS
In a study commissioned by Visit Anaheim, it was stated the average American spends just 37 minutes per day with family.  Recent circumstances indicate this average will be pushed higher in 2020.  However you cut it, time with loved ones is a gift.  Enjoy them.  After all this is over, you may want to be stranded on an island talking to a volleyball, but for now, take this time together as moments you may not get back once our pace quickens once again.

Stay safe –

Jon & Kerrie

 

Jon & Kerrie

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

I will live in the Past, the Present, and the Future.  The Spirits of all Three shall strive within me.  I will not shut out the lessons that they teach.

  • Ebenezer Scrooge

Winter has taken hold, especially on the I-15 at Cajon Pass, and like a car in a blizzard, we are heading toward the new year, forward, sideways, or otherwise, whether we like it or not.  And, as is tradition on the precipice of a new year, we reflect on the year that was, and look toward the future with ambitious goals…and swear off carbs, yet again, until at least noon on New Year’s Day.  2019 has been a confusing paradox, loaded with bustle and tranquility, commotion and silence.  Yet, as the new year dawns, NAIOP’s sustained successes and objectives have become clearer.  Measured by the ground we covered in 2019, NAIOP’s 2020 looks as bright and busy as a turn-of-the-century street in the newly fallen snow.

2019 started with a jolt, as the 80th Nevada Legislative Session convened.  Almost immediately, NAIOP’s position became primarily defensive on most pending legislation relating to residential issues bled into commercial real estate contexts, and various employment and employee pay bills were originally drafted as overreaching.  Working with the sponsors and a coalition of stakeholders, most of this legislation was amended favorably.  However, as the 2019 Session waned, a new threat emerged; legislation eliminating the sunset of certain modified business taxes.  Although this legislation passed, it gave rise to lawsuits, and set a precedent for raising revenue without formally introducing and vetting a tax increase, ensuring the ghosts of the present look remarkably similar to those of the past.

The ghosts of the present pushed precedent a step forward in July 2019, when the Southern Nevada Water Authority requested NAIOP’s support in requesting that Clark County eliminate a sunset on a quarter-cent sales tax to help pay for infrastructure.  Given infrastructure funding is among the core elements of NAIOP’s legislative agenda, and given no legislation providing for infrastructure funding was passed during the 2019 Legislative Session, NAIOP alongside a majority of Southern Nevada business interests, publicly supported this initiative – despite the policy concerns of further galvanizing the precedents created by the ghosts of the past, and adding a few links to Marley’s chain.

Expansion of the disposal boundary was also a major topic of discussion throughout 2019.  However, discussion was seemingly the only progress made on this issue.  The ghosts of the past will meet the ghosts of the future in February 2020, as Chapter leadership converges on Capitol Hill to meet with Nevada’s federal delegation for our annual day on the Hill.

2020 will be a big year for NAIOP and the ghosts of the future, as election-mania takes hold and caucuses and primaries are held from February to June, and then hits a fever pitch for the general election in November.  The GOP swept the nation and won majorities in both legislative houses and every statewide race in Nevada in 2014.  Since that time, however, the Democrat party has regained control of both legislative houses and reached a supermajority in the Assembly, won all statewide races but for Secretary of State, and won a US Senate seat.  The GOP will seek to obtain more parity at the state level and regain control of the House of Representatives, as Congress tangles with the ghosts of the past and increases the partisan divide.

Locally, NAIOP’s conversations will seek to avoid the ghosts of the past, as we continue to strengthen our relationships within all realms of local government and utilize the knowledge, we have gained to provide meaningful insights and direction regarding development, taxes, and infrastructure.  Although political circumstances suggest no appetite for substantial revenue generating legislation, we remain anxious to share our insights with policymakers and continue to represent the commercial real estate industry as thought-leaders on these issues.  Additionally, issues affecting the growth and sustainability of the industry, such as business disruptors in the retail sector, need to be thoughtfully monitored and addressed.  2020 is a critical year, as we set the stage to advocate NAIOP’s policy concerns during the 2021 Nevada Legislative Session, and we look forward to sharing the lessons of the past, present and future to help move the dialog forward in a meaningful way.

All the best, during this holiday season.

ODDS & ENDS

On December 26, snow shut down the I-15 at Cajon Pass in California, and Primm in Nevada.  Although accumulation totals for this storm are still being tallied, the interstate paralysis it caused made us wonder what the single-day snowfall record is for Las Vegas.  The official record was set on January 31, 1979, when 7.4 inches of snow fell in Las Vegas.

Jon & Kerrie

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

Work, work, work, work, work, work. You see me I be work, work, work, work, work, work. You see me do me dirt, dirt, dirt, dirt, dirt, dirt. There’s something ’bout that work, work, work, work, work, work. – Rhianna, Work

As October begins and we start the last quarter of 2019, with cooler temperatures (finally), we thought it important to draw quick attention to the issues NAIOP is actively working on.

Clark County Water Reclamation
Capacity issues and charging shell-only development connection fees equaling the entirety of the estimated ERUs for the project have been a huge issue this year. NAIOP continues to work with Water Rec to find alternative solutions for these issues, including giving shell developers 4 years, plus extensions to determine capacity and pay based on actual usage.

City of North Las Vegas
Recently, the city implemented a fee increase; however, due to lowered bond requirements and the small nature of the increase, the impact is not a blow to the industry.

Southern Nevada Water Authority
SNWA came to NAIOP looking for support to eliminate the sunset on a quarter-cent sales tax, that was to sunset in 2025. This revenue supports infrastructure and is used for water treatment and transmission projects. After a presentation by SNWA to the Government Affairs committee, NAIOP along with most major business interests in the valley supported the measure before the Clark County Board of Commissioners.

City of Las Vegas Building and Safety
The city is looking for industry input as they look to raise their fees, which have not been raised since 2010. Government Affairs committee members are working closely with the City of Las Vegas on the issue.

Clark County Enterprise Land Use Plan
NAIOP members will attend a meeting with Clark County to discuss potential changes to the plan.

Clark County and the City of Henderson
Both entities are looking for stakeholder input as they look to update their development codes. Currently, the Board of County Commissioners has instructed staff to look at potential updates to Title 30, whereas Henderson is already seeking stakeholder input. NAIOP has a seat at the table in both places and is working hard to make necessary, common sense contributions.

CMA Surplus Land Auction
After the passage of SB 36, which in part allows the County to take the median price between two appraisals, in order to auction parcels, the County will hold an auction. The auction will take place in the 4th quarter of 2019, with 136 acres going up for sale. All parcels are listed on the County’s website.

City of Las Vegas Homelessness
NAIOP continues to work with the City to come up with a more workable solution to homelessness, than that of raising sewer fees and real estate transfer taxes in order to generate the revenue. NAIOP continues to meet with City staff on a fair and balanced solution, that will not adversely impact business.

Odds & Ends
Nevada became a State on October 31, 1864.  The day became known as Nevada Day, and many states celebrate similar dates, calling them “Statehood Day,” or “Admission Day,” or another variation.  Until 2000, “Nevada Day” was formally celebrated on October 31.  That said, via referendum in 1998, voters informed the Legislature they wanted the date changed to the last Friday in October, to give folks a 3-day weekend.  The 1999 Nevada Legislature did just that, and in 2000, Nevada Day became the last Friday in October.  Interestingly, until 2000, many Northern Nevada cities, including Carson City, celebrated Halloween on October 30, so as not to overlap Nevada Day.  The net result? Many Northern Nevada children celebrated Halloween for 2 days; first in the capital which included trick-or-treating at the Governor’s Mansion, and then in their neighborhoods.

 

Jon & Kerrie

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

“Well, that wasn’t such a chore, now, was it?”
Ray Stantz to Pete Venkman, covered in slime, Ghostbusters

Tuesday, June 4, Carson City woke to the sweet sound of silence.  Legislator offices were empty, halls were quiet, committee rooms were dark.  Even the bill copies were removed from the wooden racks.  “Slimer” was safely in his trap, not to be seen again until the sequel; release date, February, 2021.  All that remained from the 80th Legislative Session were memories, and for those who got “slimed,” those were more than enough to beat back the nostalgia of another year passed in our charming Capital.  Like Venkman’s attempt to remove the cloth beneath a fully-set banquet table because he “always wanted to do this,” only to relocate the settings to the floor, the predominance of business-related bills this session were introduced with unacceptable language, significantly modified by the business community, only to have a stripped-down bill pass and the sponsor proclaim victory at the end of the whole ordeal; “and THE FLOWERS ARE STILL STANDING!”  For these reasons and others, 2019 will be remembered among the most challenging legislative sessions in recent memory.  However, as dawn broke on June 4, several pieces of legislation emerged as fundamental changes to the way Nevada does business, setting the state on a different course with the promise of correcting some well-known issues.  The only question remaining is whether these measures, untested in the past and possibly as foreboding as “crossing the streams” will avert the state from being stomped, even if it means we’re going to get a little marshmallow on us in the process.

Below is a glimpse at legislation we’ve earmarked as some of the most controversial business or commercial real estate bills of the 2019 Session.

AB 136
Bill Sponsor: Speaker Frierson

This bill amounted to a complete rollback of the prevailing wage reforms made in the 2015 session, mirroring AB 154 from the 2017 Legislative Session, which was ultimately vetoed. It decreased the minimum threshold for public works projects from $250,000 to $100,000, eliminated the exception for the public school districts and Nevada System of Higher Education (“NSHE”) requiring them to only pay 90% of the prevailing wage, and eliminated the exemption for charter schools from paying prevailing wage. No amendments to this bill were accepted. The bill had six fiscal notes, the Department of Administration, NSHE, Local Government, Department of Business and Industry, Office of Labor Commissioner, Carson City School District, and Carson City totaling $20,063,165 from 2018-2021. This bill passed out of both houses on party line votes, and was signed by the Governor.

AB 190
Bill Sponsor: Assemblyman Daly

This bill clarified when prevailing wage must be used, the rate, and for how long. The bill defines “bona fide fringe benefit” and addresses acceptable use of bona fide fringe benefit (in lieu of the prevailing wage) and assesses penalties for misuse. The bill defines reverse auction and prohibits a public body from using a reverse auction where a bidder may submit more than one bid if each additional response to online bidding is a lower price, when awarding a contract for public work.  It also makes clarifying changes to existing law regarding prevailing wage requirements that apply to certain construction projects that are not public works. As introduced, this bill mirrored the Speaker’s prevailing wage bill AB 136, but due to the existence of three identical bills, was amended to reflect the above. It passed party line out of both houses, and was signed by the Governor.

SB 243
Bill Sponsor: Senator Hardy

This bill established four prevailing wage regions by which the Labor Commissioner shall determine prevailing wage, as opposed to doing it by county. It also created districts for Washoe County, Clark County, and separates the rural counties into two groups split by the north and south.

It changes the timeframe from annually to every odd-numbered year, for which the Labor Commissioner shall determine the prevailing wage in each region, and requires the determination be issued by the Labor Commissioner on October 1 of the odd-numbered year. This bill passed unanimously out of the Senate, and 32-7 in the Assembly, with Republican Assembly persons Hafen, Hardy, Leavitt, Roberts, and Tolles voting in favor, and has been signed by the Governor.

SB 166
Bill Sponsor: Senator Spearman

This bill, dubbed the “Equal Pay Bill,” as introduced provided for expanded, higher penalties against an employer subject to a Nevada Equal Rights Commission (“NERC”) discrimination complaint. It provided for additional penalties should NERC find discrimination was on the basis of sex. Additionally, it expanded the role of NERC, and the amount of time to file a complaint for civil action. It also raised the amount of the civil penalties the Commission could award. The first amendment to the bill removed the requirement that any civil penalty collected by NERC go into a newly created NERC Gift Fund. It also reduced both the amount of back pay categories that could be paid and the civil penalty amounts. The second amendment codified federal law and removed both the additional penalties on sex-based discrimination and all other language inconsistent with federal law. This bill was a highly contentious and hard fought battle throughout the entire Session. The final version was the result of a huge lift by the business community to make the legislation more palatable, making it very clear that the bill would not be scuttled. This bill passed out of both houses with little opposition (Senator Hansen and Assembly persons Edwards, Ellison, and Wheeler being the only nay votes), and was signed by the Governor.

SB 312
Bill Sponsor: Senator Woodhouse

This bill as introduced was a reprisal of SB 196 from the 2017 Legislative Session and required an employer in private employment to provide forty hours of mandatory sick leave for all employees. The first amendment changed sick leave to paid leave and amended the manner in which it could be accrued. The second amendment changed the accrual from a calendar year to a benefit year. This bill was also contentious and heavily amended by the business community, but it could not be killed because it was designated as a priority bill for the Democrats. The bill passed unanimously out of the Senate, and 31-9 in the Assembly, with Assembly persons Hardy, Roberts, and Tolles voting in favor, and was signed by the Governor.

SB 36
Bill Sponsor: Senate Committee on Government Affairs

This bill would allow a Board of County Commissioners to do a number of things when it comes to sales and appraisals of real property, including:

A county may purchase real property for above the appraised value, if selling or leasing county owned property, the county shall use the average of two independent appraisals, if two were obtained; or, the appraised value if only one independent appraisal was obtained, if there is a material change relating to title, zoning, or an ordinance governing the real property, or the appraisals were prepared 6 months before the date which the real property is offered for sale or lease the second time, the county must obtain a new appraisal, and allows the county to use an internet website to auction real property and hold a public meeting once the auction has closed to make a final acceptance of the highest bid. Currently a county may not purchase real property for above the appraised value, potentially keeping them out of certain real property sales that may benefit the county. The county also must sell real property using the highest appraised value of the real property. The ability for a county to use an online auction would assist them in getting multiple bites at the apple to assist in selling real property. An amendment to the bill removes the county’s ability to purchase land above the appraised value and added additional clarity regarding notice provisions. This bill passed unanimously out of both houses and was signed by the Governor.

SB 151
Bill Sponsor: Senator Ratti

This bill sought to increase the amount of time a tenant has to remedy after receiving a notice of an eviction action, from 5 judicial days to 10 judicial days.  Additional increases in time are provided for pertaining to removal of a tenant, from “within 24 hours” to “not earlier than 48 hours” once the eviction order is received from the court. The notice to surrender timeframe for which an individual may holdover and continue in possession of real property or a mobile home after certain actions would change from 3 days to 30 days. The bill also removed from statute a landlord’s ability to utilize summary eviction procedures on a tenant who is part of a “low rent housing program operated by a public housing authority.” Finally, the procedure by which certain notices to surrender are delivered would be dictated by either the Nevada Rules of Civil Procedure or the Justice Court Rules of Civil Procedure. This bill had both residential and commercial impacts in eviction and unlawful detainer proceedings.  Many meetings were conducted with the bill sponsor and Legal Aid (ultimately behind the legislation) regarding the impact this legislation would have on commercial properties, even though the intent was purely to change residential statutes. A deal was struck whereby Legal Aid would state on the record, during the committee hearing that there would be a forthcoming amendment removing references to commercial premises. The bill was amended, creating two sections within Chapter 40; one that deals specifically with the residential changes and one that maintains commercial exactly as is. This bill passed out of both houses on party-line votes, and was signed by the Governor.

AB 538 & SB 551
Bill Sponsor: AB 538 Speaker Frierson / SB 551 Senate Majority Leader Cannizzaro

Both of these bills sought to remove the scheduled buydown of the Modified Business Tax (the “MBT”), passed along in the 2015 Session. Within that piece of legislation, should the Commerce Tax produce excess revenue in certain amounts, the MBT would decrease from 1.475% to 1.378% for most business, and from 2 % to 1.853% for the mining and finance industries. By removing the buydown of the MBT, Democrats found an additional $100 million for the coming biennium. AB 538 was limited to just the MBT language, which Republicans vowed they would never vote for, due to promises made in 2015. This bill ultimately died.

SB 551 was likely one of, if not the most polarizing pieces of legislation in 2019. It was brought by the Majority Leader as an emergency measure the Tuesday before Sine Die. This bill however, took the “found money” and put it toward school safety, which was previously stripped of $30 million. It also funded Opportunity Scholarships, which also saw their budget money removed. Both defunding measures disturbed the minority party to no end. In addition to MBT, SB 551 as introduced, would have used excess revenue from Clark County’s “More Cops Tax” to fund additional school safety measures. In an effort to garner some Republican support, Democrats amended the bill to put the 2/3 majority requirement back on it (after an LCB opinion came out earlier in the month stating 2/3 was not needed, supremely frustrating Republicans and causing them to threaten a lawsuit, should either of these measures pass), taking the “More Cops” language out, and detailed the amounts each county would receive over the next biennium. On the day of Sine Die, fireworks were seen on the Senate floor as legislators opposed to the bill had their floor speeches cut short by a call of the question, after which the measure was put to a vote.  The bill failed to receive a 2/3 majority. After a brief recess, the amendment was rescinded. A new amendment was proposed, the bill remaining mostly intact, but removing the 2/3 requirement and also removing Education Savings Accounts – an unfunded GOP priority – from the statute altogether. After little floor debate, a number of Senators again called for the question, and the measure passed out of the Senate 13-8. It was passed 28-13 out of the Assembly, and signed by the Governor.

SJR 14
Bill Sponsor: Senate Committee on Revenue and Economic Development

Originally introduced in 2017, SJR 14 returned for the second round of legislative approval necessary to send the measure to the voters in 2020.  This Resolution would have removed the constitutional prohibition on “reset on sale,” allowing the legislature to consider the concept along with other available options to reform Nevada’s real property tax structure. Due to legislative neglect over the 2018 interim, this measure did not get the traction it needed to pass its second round.  In addition, a single late-session stakeholder meeting and disclosure of a 377-page report commissioned by LCB less than a month prior to sine die sealed the fate of this Resolution, which never received a hearing.

Odds & Ends

Leaving Carson City following a legislative session is always an awkward ride.  Exhaustion, memories of the final thoughts of debate and subsequent immediate silence, and the realization that everything which has dominated your thoughts and conversation is now moot make for a very strange 7-hour drive back to Las Vegas.  This year, instead of beating feet back to the heat, we detoured to visit Virginia City, enjoy a bourbon at the Bucket of Blood Saloon, and take a walk through the Silver Queen Hotel.  Rated among the most haunted places in Nevada, the Silver Queen Hotel was built in 1876, and is said to be home to a Ghost named “Rosie,” who reportedly  committed suicide in Room 11.  Overnight guests have reported hearing voices, doorknobs turning, and footsteps on a wooden floor, which is particularly odd, given the entire hotel is carpeted.

Enjoy your summer…and sleep well!

 Jon & Kerrie

Jonathan Leleu, Director
Kerrie Kramer, Government Affairs Analyst
Fennemore Craig
jleleu@fclaw.com | kkramer@fclaw.com  | T: 702.692.8037

 

The Nevada Independent
By Megan Messerly
May 26, 2019

Jeremy Aguero, Applied Analysis
Jonathan Leleu, Fennemore Craig, PC
Click here for the article