Legislative Update
COUNTY OF SAN DIEGO READY TO SEE RED…TIER THAT IS…
Governor Gavin Newsom announced on March 12th that the state has administered more than 2 million vaccines to low-income areas, indicating that as soon as March 16th, San Diego County could move from the purple or most restrictive tier to the red tier, the next tier up the reopening ladder. The Governor had announced previously that once 2 million doses of vaccine had been given to residents in high risk communities, the threshold to move from the “purple” tier (most restrictive) to the “red” tier will change from a case rate of less than 7 cases per 100,000 of population, to less than 10 cases per 100,000 of population. High risk areas are identified by elements like density, living arrangements, income levels, etc. Presently, the County of San Diego’s case rate is at 8.8 per 100,000. Given the present case rate, and the ongoing downward trend line for that metric, the County would be eligible next week to move to the red tier. It should also be noted that the other metrics for tier movement are all being met or exceeded by San Diego County to get to the next tier. They include the testing positivity percentage and the health equity metric. To view the County COVID dashboard, please CLICK HERE. It is anticipated that the announcement about the shift to the new threshold will occur next week.
Once the County of San Diego shifts to the red tier, here are some of the changes that will occur:
- Retail operations go up from 25% capacity to 50% capacity, while mall food courts can begin to operate with reduced capacity.
- Museums, which previously were closed to outdoor operations, can open indoors with modifications at 25% capacity.
- Personal services like body waxing salons and tattoo parlors can open indoors with modifications.
- Cultural ceremonies also can take place with 25% capacity or 100 people, whichever is fewer.
- Schools can open for in-person instruction when a county remains in this tier for two weeks.
- But saunas and steam rooms must be closed.
An additional sign of forward progress might be seen in a few short weeks. Under the Governor’s announcement for the vaccine equity program, he also said that once 4 million doses are given out to those same high-risk areas throughout the state, it will further reduce the case threshold for tier movement. Once the 4 million vaccine threshold has been reached the metrics for tier movement will also be changed to make it easier to get to the less restrictive orange and yellow tiers. For more information, please click HERE.
PRESIDENT SIGNS COVID-19 FEDERAL RELIEF BILL
President Joe Biden signed March 11th the “American Rescue Plan” previously passed by the House and Senate. The $1.9 trillion relief package contains several provisions that are aimed at assisting businesses and individuals including loans for operating and payroll expenses, provisions to alleviate state revenue declines and direct payments to taxpayers. Here are some key provisions of interest to the BOMA:
Real Estate Interest & Business Provisions
- $350 billion in state and local government aid to offset the cost of municipal services. State budgets have been impacted by decreased tax revenue and this aid should limit efforts to increase commercial real estate taxes to offset these losses.
- $25 billion for struggling food service industry businesses.
- $30 billion in relief to public transit to assist in reopening the economy.
- $15 billion for Economic Injury Disaster Advance grants (EIDL). EIDL is intended for businesses that cannot qualify for PPP loans or forgiveness.
- One-year extension of the section 461(l) limitation on the deductibility of active losses of a pass-through business
- $7.5 billion in PPP funds for first and second draw loans. This is intended to assist businesses who have had difficulty accessing PPP loans.
- Reauthorizes State Small Business Credit Initiative with $10 billion for state financing of small businesses.
- $25 billion to stabilize child-care centers at risk of closing and $15 billion in child-care aid for qualified families.
- Third round Economic Impact Payments of $1400 per person ($2800 filing jointly) with an additional $1400 per child for earners with adjusted gross incomes of $75,000 ($150,000 filing jointly) phasing out for earners with AGI of $80,000 ($160,000 filing jointly).
- Extends the federal weekly unemployment benefit of $300 until September 6.
Other Provisions
- Invokes the Defense Production Act to increase the production and distribution of vaccines and alleviate shortages of syringes, N95 masks, gloves and other supplies needed for virus testing and vaccine administration.
CITY OF SAN DIEGO EXTENDS WORKERS RETENTION ORDINANCE
The San Diego City Council voted on March 2nd to extend their “Emergency Recall and Retention Ordinance” for 12 more months. The ordinance originally adopted late last year, was set to expire on March 8, 2021. The ordinance applies to workers in the service and hospitality industry who have had their employment impacted by the COVID-19 pandemic. The current ordinance mandates that commercial property employers, hotel employers, and event center employers offer laid-off employees all job positions that were held at the time of separation or be provided a new position with the same training that would be provided to a new employee hired into that position. As an emergency ordinance, it required a 2/3rds vote of the council to pass. Concerns were expressed by the impacted business community, including BOMA San Diego, about the impacts this would have to impacted employers, including the increased costs to small businesses and the concern over government interference in labor contracts and agreements. Nevertheless, the measure, carried by Councilmember Monica Montgomery-Steppe passed 8-1 with Councilmember Chris Cate opposed. To read the staff report for the extension, please click HERE. To read the ordinance, please click HERE.
CITY OF SAN DIEGO TO CONSIDER “PREDICTIVE SCHEDULING” MEASURE
Under the encouragement of the San Diego Workforce Partnership, the San Diego City Council’s Economic Development and Intergovernmental Relations Committee (EDIR) is considering the creation of a “predictive scheduling” ordinance for the Council’s consideration in the coming months. Originally planned to go to the EDIR Committee in March, Councilmember Raul Campillo has indicated a desire to get more stakeholder input and has delayed committee consideration. Predictive scheduling laws require employers to give employees adequate notice of when they will work so that they can plan for and around their work shifts. It is not without controversy, particularly amongst restaurant and retail workers. In some jurisdictions, it can also apply to other commercial building service industry workers. It should be noted that in one of those cases, BOMA Chicago filed suit against the City of Chicago for their ordinance, which was one of the broadest adopted in the country. BOMA San Diego has already been in dialogue with Councilmember Campillo’s office and will keep the membership informed and engaged. For more information, please click HERE.
SAN DIEGO CITY COUNCIL CREATES COVID-19 RECOVERY COMMITTEE
On February 23rd, the San Diego City Council voted to establish a special, temporary committee to focus on the city’s pandemic response and recovery efforts. The committee will be co-chaired by Council President Jen Campbell and Councilmember Marni von Wilpert. Councilmembers Whitburn and Elo-Rivera will round out the 4-member committee. For more information, please click HERE. BOMA will continue to monitor this committee and participate in areas that are of benefit to the commercial real estate community.
GOVERNOR SIGNS COVID-19 RELIEF LEGISLATION
On February 23rd, Governor Gavin Newsome signed into law a package of COVID relief measures sent to him by the legislature the week before. The package includes $600 in one-time relief payments to California households receiving the California Earned Income Tax Credit for 2020. It also includes $2.1 billion in relief grants to small businesses. Qualifying businesses can receive up $25,000 to address financial impacts related to the pandemic. It also includes fee waivers for heavily impacted licenses, like ABC licenses and other measures designed to help offset the costs and impacts of COVID-19. For more information, please click HERE.
COUNTY OF SAN DIEGO EXPANDS SMALL BUSINESS STIMULUS PROGRAM
The County Board of Supervisors in late February added $30 million to their Small Business Stimulus Grant Program. This follows their action earlier this year to expand eligibility and the action in December to add $20 million to the program. The Small Business Stimulus Grant Program is funded by Board of Supervisors allocated federal CARES Act funding. The grant funding provides economic assistance to help businesses and nonprofit entities impacted by COVID-19. Financial assistance will be allocated to eligible, qualified small businesses and nonprofit entities with final award recommendations made by individual district offices based on the availability of funds, program guidelines, and the submission of all required information and supporting documentation. For more information or to apply for the program, please CLICK HERE.
CITY OF SAN DIEGO RE-ESTABLISHES EVICTION MORATORIUM
The San Diego City Council passed two “emergency” ordinances impacting commercial and residential evictions last month. For the residential ordinance, the city’s ordinance would only be in effect should the newly extended state residential moratorium expire before the end of the local state of emergency. For commercial, the moratorium went into effect immediately.
In summary, the commercial eviction ordinance will:
- Allow commercial tenants to be protected from eviction if they have experienced COVID-19 hardship that harms their ability to pay rent
- Narrowing the applicability to truly small business, which would mean a business with 100 or fewer employees and $3 million a year in revenue or less
- Require the tenant to provide notice up to 7 days after rent is due to the property owner that they don’t intend to pay rent
- Would allow the property owner to request and require the tenant to provide documentation of hardship no later than 7 days after the request from the property owner is made
- The protection would be retroactive to March 12, 2020 and would last 60 days after the end of the declaration of a local public health emergency or June 30, 2021, whichever is sooner
- Would require the owed rent to paid back over 6 months after the termination of the ordinance
BOMA had argued that the moratorium was problematic and unnecessary. Examples were given of abuse and concerns expressed over the timeframes for response, the duration of the measure and the need to narrow the exposure. As noted above, adjustments were made based upon this input, but the Council, nevertheless, adopted the ordinance. To read the ordinance (note this version does NOT include the amended language limiting the time a tenant has to provide documentation of hardship to 7 days) please click HERE.