March Update on legislative, regulatory, and political issues affecting commercial real estate

By Ken Cleaveland

BOMA Salutes Mayor Gavin Newsom March 29th @ Transamerica Pyramid
Don’t miss it! The BOMA SF Political Action Committee, in conjunction with BOMA Member Scott Seligman (Seligman Western Enterprises) and Steve Adams (Sterling Bank & Trust) are hosting a fundraising salute to the Mayor and you are invited! The event is being held Thursday evening, March 29th, on the 40th floor of the Transamerica Pyramid, from 5:30 – 7:30 p.m. Reservations requested. Call or email Ken Cleaveland for a copy of the invitation. (415) 362-2662×11 or Email:

See the Giants & Support BOMA’s PAC on April 4th!
The BOMA SF Political Action Committee is sponsoring its annual outdoor BBQ behind the China Basin Landing building Berry Street (across the street from AT & T Park) on Wednesday, April 4th, beginning at 4 p.m. Special thanks are extended to the BOMA Associates Committee for making all the arrangements, and to RREEF and McCarthy Cook & Company for providing such an excellent venue for a party! Members and guests may purchase tickets to the BBQ and the ballgame, but only 250 game tickets are available! Go to to download a reservation form.

San Francisco Treasurer Issues New Rules for Parking Tax Affecting Commercial Office Buildings
The City’s Treasurer issued new regulations on March 20th expanding the scope of the parking tax regulations in San Francisco. The new interpretation extends tax liability to commercial property owners who have provided parking spaces as part of a lease with no separate financial transaction. This new extension of the parking tax will not be retroactive, according to his deputy, David Augustine, but owners are advised they do have an obligation to pay the parking tax on such spaces moving forward. For a full text of the announcement,

San Francisco’s Office of Labor Standards Enforcement Issues New FAQs on Sick Leave Ordinance
The city’s voter-approved mandate to provide paid sick leave to all employees, full time, part-time, and temporary, went into effect February 5, 2007, but will not be fully implemented (meaning useable) until June 4th. However, employers must accrue sick leave now on the basis of one hour for every 30 hours worked. To assist employers the Office of Labor Standards Enforcement has issued an updated Frequently Asked Questions bulletin which BOMA members may find useful and may wish to bring to the attention of their tenants. There are other items BOMA members may wish to share with tenants including a copy of the ordinance, a copy of the signage required, and a copy of OLSE’s Fact Sheet on the paid sick leave ordinance. All are available at For more information, email your questions to or call 415-554-6271. Donna Levitt is the Manager of the OLSE.

BOMA National Issues Conference in Washington, DC Brings Commercial Real Estate Issues to Capitol Hill
Delegates from across the country went to Washington, DC March 12-13 to visit with our Federal representatives and to carry a message that the commercial real estate industry needs attention on a number of issues. Ken Cleaveland, BOMA San Francisco’s Director of Government and Public Affairs, along with Michael Oddo, Metro Maintenance, visited the offices of Speaker Pelosi, Representatives Woolsey, Lantos, Lee, Tauscher, and Senators Boxer and Feinstein. Top issues that were discussed included:
• Extension of the 15% leasehold improvements depreciation schedule
• Extension of the Terrorism Risk Insurance Act (TRIA)
• Extension and enhancement of the energy tax credits law for Commercial Buildings
• Creation of Federal Risk Insurance Coverage for catastrophic natural disasters such as earthquakes, hurricanes, floods, etc.
• Reform of the Alternative Minimum Tax (AMT) Codes
For more information on the BOMA International legislative agenda and position on a variety of issues, please go to

San Francisco Fire Department Issues Notice on Firewatch Requirements
At a recent meeting of the BOMA Codes and Regulations Committee, San Francisco Fire Marshal Barbara Schultheis defined what a firewatch was, and when it was required. She said:
“A firewatch is a person or persons who have the sole duty of watching for the possibility of fires. As you may imagine, a firewatch is not something that we want to rely on under most circumstances, due to human nature. However, occasionally, we are put in the unfortunate position to require one. For example, if a fire alarm in a building is out of service and repair will take some time, we may require a firewatch. This would be someone who walks the building and looks out for fires and is able to call the fire dept and notify the occupants to get out of the building. The details of who and how, etc. would be determined on a case by case basis.”

“I want to clarify that when a building is undergoing alteration and the building is sprinklered, the following section of the CFC applies:
8705.2 Fire-protection systems. When the building is protected by fire-protection systems, such systems shall be maintained at all times during alteration. When alteration requires modification of a portion of a fire-protection system, the remainder of the system shall be kept in service. When it is necessary to shut down the entire system, a fire watch shall be kept on site until the system is returned to service.”

If you have further questions about this, please contact the Fire Marshal at (415) 558-3320.

Mayor Newsom Appoints Green Building Task Force – City to Look at New Mandates
The Mayor recently appointed a task force to study ways in which the city could promote the incorporation of “green” building standards, such as LEED and Energy Star, into requirements of City Planning and the Department of Building Inspection. The first meeting was held March 15th, and the Mayor is hoping to get solid recommendations on possible new incentives, as well as voluntary and mandatory requirements the City could adopt. BOMA is represented by Ken Cleaveland, and Ken Seibel of Tishman Speyer; the design community is represented by Margie O’Driscoll, the AIA/SF Executive Director, and Kirsten Ritchie of Gensler, while construction is represented by Phil Williams of Webcor. Several other consultants and a number of representatives from the City’s Building Department, Planning Department, and the Department of the Environment are also participating. BOMA will push for incentives and voluntary guidelines for adopting and installing “green” technology, but the association is against mandates, especially if applied to existing buildings.

BOMA International to Address Creation of a “Green Lease”BOMA International has established a task force to review the environmental issues surrounding carbon emissions created by office buildings, and what our industry must do to reduce them. Part of the task force’s mission is to create a draft “green lease” for review by the BOMA International Energy and Environment Committee when it meets in New York City in July. BOMA and its members have done much to promote sustainable practices in our industry, including significant reductions in energy consumption, water consumption, indoor air pollution, and garbage, but more can be done if tenants are actively engaged in complying with building rules on conservation. If anyone wishes to submit items or ideas for inclusion in a “green lease”, you are encouraged to do so, and submit them to Karen Penafiel, SVP for Government Affairs at BOMA International. Her email: Check out BOMA International’s new G.R.E.E.N. website too at

36 Buildings To Compete At BOMA San Francisco Earth Awards Luncheon April 26th.
Don’t miss this exciting BOMA Earth Awards luncheon April 26th, being held at the Hotel Nikko beginning at 11:30 a.m. Guest speaker George Denise, facilities manager of Cushman & Wakefield’s award-winning platinum LEED certified Adobe Systems headquarters in San Jose will present the message that “going green can green your bottom line”. $21,000 will be distributed as cash prizes to the best large, medium and small commercial properties at this luncheon. A special BOMA Earth Awards/San Francisco Business Times supplement will also be distributed at the luncheon and mailed to all subscribers that same week. To register for this amazing event, go to For a complete list of all entries, contact Ken Cleaveland.

City 311 Service to Start
City 3-1-1 information hotline will be launched March 29th. 3-1-1 is a reserved three number dialing service established by the Federal Communications Commission in 1998 for local non-emergency government services. The San Francisco 311 Customer Service Center is accessible by dialing 3-1-1 from landline and wireless telephones in the San Francisco 415 area code. The call is toll free for those customers. Many office buildings offer their local dial tone through building switches – usually PBXs purchased from Avaya, Cisco, Lucent, Nortel, Genisys or a myriad of other companies. Therefore, the city is requesting building managers contact their telecommunications support companies to ensure that 3-1-1, as well as the other N-1-1 services, can be passed through their switches. BOMA members with switchboards are advised to contact Heidi Sieck at or by phone at 415.701.3150. The San Francisco 311 Customer Service Center is a full service, non-emergency government services call center using advanced technologies and highly trained customer service representatives to provide better access to local government services.

San Francisco Water and Sewer Rates to Increase July 1st
The San Francisco Public Utilities Commission is considering raising water rates 15% and wastewater rates 9% effective July 1, 2007. The new rates will have a lower base rate but a higher cost allocation based on actual consumption. A new $1,300 per dwelling unit connection fee for water will also go into effect. 90% of the increase is ascribed to capital improvements of system. Members are encouraged to attend the Rate Fairness Board Meeting 4/11/07 @ 5:30pm in City Hall Room 263 and Commission Meeting 5/8/07 @ 1:30pm in City Hall Room 400. For more information contact the SFPUC at 415-554-3155.

Business Groups Request CPUC to consider Direct Access
BOMA has been part of several meetings with California Public Utilities Commissioners to promote the idea of re-opening electricity markets to direct access for all customers. Recent meetings were held with Commissioners Dian Grueneich, John Bohn, Commission President Michael Peevey, and Andrew Campbell, the chief advisor to Commissioner Rachelle Chong. While the reception was positive, no specific date or agreement to consider DA was given. Direct access ended in California September 20, 2001, unless customers had pre-existing contracts which they have maintained since then. BOMA San Francisco had a power pool to purchase electricity for several years during de-regulation, and saved members millions of dollars on the commodity price of electricity by being able to negotiate with energy service providers on the open market.

San Francisco Building Inspection Commission Seeks Volunteers for Building Department Advisory Boards and Committees
BOMA members are encouraged to apply for a variety of volunteer seats on advisory committees under the supervision of the SF Building Inspection Commission. These openings include seats on The Access Appeals Commission, The Board of Examiners, the Code Advisory Committee and the Unreinforced Masonry Board. Forward your resume to Ann Aherne, Secretary to the BIC, at For more information on the Unreinforced Masonry Board, call Gary Ho (415-558-6083), for more information on the Code Advisory Committee, contact Alan Takagawa at 415-558-6688. For more information on the Board of Examiners, contact Hanson Tom at 415-558-6157 and for the Access Appeals Commission contact Neil Friedman, Senior Building Inspector, at 415-558-6168.

San Francisco Public Utilities Commission Announces Sustainability PlanThe SFPUC is engaged in developing an organizational Sustainability Plan. In August 2006, the SFPUC posted on its website the first of four key deliverables, its Sustainability Indicators and Best Practices Report. SFPUC staff and consultants had reviewed over 400 comments on the draft report, revised the indicators and used them to develop this second deliverable, the Draft Sustainability Baseline Assessment, which is now available online for your review. It will be posted for public comment through Monday, April 16. BOMA members can review this report at [SFWATER.ORG : Sustainability Plan].

Upcoming Events of Potential Interest to BOMA Members
 Don’t miss the special Disaster Experience – A Shelter in Place Exercise workshop sponsored by BOMA on Friday, April 20, 2007. This morning half-day program is an interactive workshop for building operations and management teams and major tenants. It will outline and walk participants through an mock explosion from a “dirty bomb” and how buildings close by must react in such a circumstance. Register at
 March 30 – BOMA San Francisco Monthly Luncheon @ Palace Hotel – 11:30 a.m. Register at

“The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin.” Mark Twain

Ken Cleaveland is Director of Government and Public Affairs for the Building and Owners and Managers Association (BOMA) of San Francisco.

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