BOMA members from across the country took commercial real estate's message straight to national lawmakers on Capitol Hill during the National Issues Conference (NIC), held March 10-11 in Washington, D.C.
BOMA members met with legislators on several key industry issues and asked senators, representatives and their staff to:
¥ Support legislation to permanently reduce the timeline for depreciating leasehold improvements to 15 years;
¥ Support further extension or make permanent the reduced rate on capital gains;
¥ Maintain current law that taxes carried interest as a capital gain and oppose any efforts to change the tax code to require it be taxed as ordinary income;
¥ Support tax incentives for energy efficient commercial buildings;
¥ Support legislation to address the disruption in the catastrophic insurance market, and
¥ Join the Congressional Real Estate Caucus.
The opening luncheon speaker and NBC News Political Director Chuck Todd gave NIC attendees an insider's glimpse into the hard-fought democratic primary races and the upcoming presidential election. The current democratic race, he said, will be remembered as "the great Clinton-Obama showdown," and that despite some reluctance within his own party, "McCain keeps republicans competitive" against either democratic candidate in the national election.
Rep. Michael Turner, R-Ohio, co-chair of the Congressional Real Estate Caucus, thanked BOMA members for the expertise they bring to Congress on real estate issues and encouraged attendees to "remain active to grow the association and its impact."
Turner addressed brownfields issues, telling attendees that there needs to be more tax credit incentives to clean up brownfields and in turn revitalize disadvantaged communities. "Communities suffer when brownfields just sit," he said. "These tax credits would put business right back into our downtown urban areas."
NIC attendees also heard from Rep. Ron Klein, D-Fla., who spoke on several issues critical to commercial real estate, including the need to extend the 15-year depreciation period for leasehold improvements and tax incentives for sustainable and/or energy efficiency retrofits for commercial buildings. Klein serves on the House Financial Services Committee, which has jurisdiction over terrorism risk and catastrophic risk issues. He discussed the creation of a national risk catastrophe pool to insure against natural disasters. BOMA Vice President of Advocacy Karen Penafiel thanked Klein for his help in getting the Terrorism Risk Insurance Act (TRIA) extended in 2007.
Stephen M. Renna, senior vice president and counsel for the Real Estate Roundtable, helped prep BOMA members for their Capitol Hill visits by fleshing out the complexities of many of commercial real estate's most pressing issues, including carried interest tax on partnerships, which is in danger of being taxed as ordinary income instead of capital gain to pay for Alternative Minimum Tax (AMT) relief. Renna told attendees to educate lawmakers by reminding them that:
¥ Carried interest is a Main Street issue, not a Wall Street issue.
¥ Fifty percent of all partnerships are real estate partnerships.
¥ $1.3 trillion is invested through partnerships that use carried interest.
¥ The resulting capital shift would mean a $20 billion loss of value for the economy overall.
Other NIC highlights included the "How to Lobby" workshop, where BOMA staff briefed attendees on the "do's" and "don'ts" of lobbying, and strategies for communicating key industry issues to Congressional members and their staffers. A debriefing after the Capitol Hill visits gave BOMA members a chance to discuss how their lobbying efforts were received and any feedback they received from lawmakers.
BOMA members attending the National Issues Conference praised the significance of face-to-face time with legislators and regulators.
"You don't realize the value of NIC until you come to one," said Craig Benedetto of Benedetto Communications Inc., a legislative advocate for BOMA San Diego. "This is one of the best things BOMA does for its members."