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.
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