BOMA adds issues to legislative agenda.

The Building Owners and Manager Association (BOMA) International, a leading advocacy group for the commercial real estate industry, announced that four issues of major concern to building owners and property managers have been added to its already full 1997 agenda: re-authorization of the Intermodal Surface Transportation Efficiency Act (ISTEA); reform of the Endangered Species Act (ESA); brownfields revitalization; and Superfund re-authorization and reform.

Because all four of these issues will soon be undergoing examination and possible legislative reform by Congress, BOMA International's Executive Committee formally approved the positions in response to members' growing concerns about the issues' potentially far-reaching consequences and influences. Each of the four adopted issues will be voted upon by the association's Board of Governors at the upcoming Annual Convention in Minneapolis in June.

Founded in 1907, the Building Owners and Managers Association (BOMA) International is a dynamic federation of 95 local associations whose members own or manage over 6 billion square feet of downtown and suburban commercial properties and facilities in North America and abroad. The membership - comprised of building owners, managers, developers, leasing professionals, facility managers, asset managers and the providers of goods and services collectively represent all facets of the commercial real estate industry.

Transportation Spending

BOMA International's position is that the Intermodal Surface Transportation Efficiency Act (ISTEA) should be speedily re-authorized by Congress so that there is no lapse in funding for needed transportation projects and infrastructure improvements.

Gas tax revenues, which are currently assigned to the Highway Trust Fund, should be freed up for use on a variety of transportation programs, BOMA contends.

The ISTEA formula for distributing highway funds to the states should also be changed so that it is more equitable for states that pay a larger share of gas taxes than they now receive in highway funds, BOMA officials say.

States, regions and municipalities should have wide flexibility in their use of transportation dollars, BOMA says, and Metropolitan Planning Organizations, an avenue for local or regional interests to participate in the transportation planning process, should provide for participation by building owners and managers.

The Intermodal Surface Transportation Efficiency Act of 1991 is a landmark law that created the framework for comprehensive transportation funding. It was designed to support highway and bridge construction as well as mass transit and other "intermodal" approaches. States and municipalities were provided considerable flexibility in their decisions on how to use federal dollars earmarked for transportation and infrastructure improvements. Metropolitan Planning Organizations (MPOs) were authorized as a means for reaching those decisions on a local or regional basis.

ISTEA is scheduled to expire in September, 1997. Debate on re-authorization revolves around two major issues: the availability of transportation funding, and the formula for apportioning funds. On the first issue, criticism is targeted at the use of gasoline tax revenues, which are currently assigned to the Highway Trust Fund and "locked up" there. On the second issue, "donor states," which contribute more in gas taxes than they receive in spending, seek changes to provide a greater return on their highway needs.

The Clinton Administration is proposing a six-year, $175 billion re-authorization plan. Dubbed NEXTEA, it would retain the basic structure of ISTEA while slightly increasing highway and transit spending. A larger boost would be given to programs designed to improve air quality and encourage transportation "enhancements" (such as bike paths, restoration of old transit facilities, and billboard removal).

Congressional committees with jurisdiction over this issue include the House Transportation and Infrastructure Committee, the Senate Environment and Public Works Committee, and the Appropriations and Budget Committees in both chambers. Activity has begun in earnest and legislation is expected to be produced this summer.

Brownfield Revitalization

BOMA International's position is that government at all levels should foster the revitalization of downtown commercial and residential areas in America's towns and cities through the clean-up and reutilization of contaminated urban sites, known as brownfields.

BOMA International believes, absent comprehensive Superfund reform, brownfields legislation is necessary to promote the transformation of contaminated urban sites into useable, economically self-sufficient properties.

Brownfields are vacant, abandoned, or underutilized commercial and industrial properties where real or perceived environmental contamination is an obstacle to redevelopment or utilization. Within the United States, an estimated 450,000 contaminated tracts exist in urban areas. These sites range from a closed gas station on the corner to the abandoned industrial site on the edge of a city.

These properties, which are all previous sites of commercial or industrial activity, are currently underutilized because of real or perceived contamination, the associated costs of cleanups, and buyers' fears of potential liability under current Superfund law.

The redevelopment of these brownfields locales can provide tangible benefits for a variety of shareholders. First, the redevelopment of these properties removes potentially harmful chemical elements from the communities in which we live and work. Additionally, by cleaning up and reutilizing property that previously had commercial uses, untouched, pristine land (known as greenfields) is not devoured by development. By utilizing land currently lying fallow, communities can avoid further urban sprawl and its resulting negative effects on local infrastructure.

Lastly, the decontamination of currently idle tracts creates property suitable for development and future use. This, in turn, can foster further economic enterprise and opportunities in urban communities, for property reclaimed can once again sustain business activities, thus promoting the economic viability of our urban communities.

On the federal level, resolution of the brownfields issue is an important cause for many legislators, especially those from present or former industrialized urban areas. In the 105th Congress. Senator Frank Lautenberg (D-NJ) has introduced legislation, listed as Senate Bill 18, which attempts to forge a national solution for this issue. Unfortunately, proponents of comprehensive Superfund reform, which brownfields often fall under as low level contaminated sites, are unwilling to move forward on "stand alone" brownfields legislation for fear that Superfund reform will fail.

The states, recognizing that these economic and environmental concerns cannot be ignored or delayed, are actively pursuing brownfields redevelopment. Over 30 states, the latest being Maryland, have enacted clean-up programs or have already passed brownfields legislation to resolve these pressing urban concerns.

While BOMA supports brownfields legislation, it believes that several specific issues must be addressed. The association contends that the issue of purchaser liability must be resolved in order to create workable solutions for brownfields reclamation programs. Property developers are clearly not the parties responsible for polluting sites. Thus, those who purchase such properties must be excluded from clean-up liability and its associated costs, BOMA says, even if further contaminants are later discovered on the property.

Furthermore, BOMA maintains that site assessments and their associated costs should continue to be the responsibility of federal, state, and local governments. The determination of site pollutants and the formulation of programs necessary to de-contaminate sites clearly fall within the realm of government activity, BOMA officials say, and should not be forced upon developers.

BOMA International also supports the Brownfields tax incentive, which would allow the full deduction of clean-up costs in the year in which they are incurred. Rather than the current practice of capitalizing the costs, which are then deducted over the life of the property, developers could more quickly recoup moneys spent on returning the properties to full use. Failure to address any of these concerns will create strong economic disincentives for potential purchasers and developers.

Real estate professionals are encouraged, on the state and federal levels, to support brownfields reclamation legislation that addresses BOMA's concerns, and to work with their local BOMA associations to stay apprised of progress relating to the redevelopment of contaminated urban properties.

The Endangered Species Act

BOMA International's position is that the preservation of threatened species is a paramount responsibility for mankind, however, in attempting to preserve endangered species, society must strike a fair balance between the wildlife and human interests.

The Endangered Species Act (ESA), though well intentioned, fails to effectively foster species conservation by focusing exclusively on animal and plant preservation without regard for the interests of affected communities and land owners. BOMA International believes reform of the Endangered Species Act is necessary to engender an environment where property owners willingly participate in the protection of endangered species.

In 1973, faced with rapidly declining numbers of animal and plant species, the United States Congress passed the Endangered Species Act. The law sought to protect species from extinction by establishing a program to designate "threatened" or "endangered" species and to create strategies to restore these species to healthy, viable numbers.

Currently, 900 species are listed as threatened or endangered under the ESA. Once a species is listed, if an individual harms or harasses the species in any way, the individual can be found guilty of an illegal "taking." Under the act, the destruction of habitat, whether occupied or not, is considered a "taking."

ESA, for all of its noteworthy successes, has failed on several accounts, according to BOMA. The agency responsible for the act's implementation, the US Fish and Wildlife Service, does not conduct any peer review of the listing decision or the proposed solution, either by scientists or the affected community. Additionally, the program neglects to utilize quantifiable scientific data in support of listings and recovery efforts, thus allowing the listing of species that are not endangered and the creation of unsustainable recovery programs.

Most tragically, the ESA clearly neglects to address the concerns and rights of property owners, BOMA officials say. If a tract of land is classified as a listed species' habitat, the property owner loses the right to utilize the land as he deems fit. Yet, the government will not compensate private land owners for any economic losses incurred and subjects property owners to fines or prison for unauthorized land alterations. Due to such massive disincentives, property owners are modifying land that might be used as habitats to avoid future liabilities, thus subverting the entire conservation effort.

Senator Dirk Kempthome, in conjunction with Senator John Chafee (R-RI), is circulating a bill to re-authorize and reform this environmentally influential act. During previous Congressional sessions, he was unable to bridge the gap between legislators determined to defend the law's current form and those seeking varying degrees of ESA reform. This current effort is perceived by BOMA as a viable piece of legislation as it addresses the concerns of not only environmentalists, but also property rights activists.

In the House of Representatives, no activity concerning ESA has occurred this session. Legislators are waiting to see if the Senate can first craft a compromise effort.

In reforming the Endangered Species Act, BOMA says several vital issues must be reviewed and resolved. Foremost among these is the right of the property owner to utilize his land as he deems fit. To promote species conservation, the act must provide the right economic incentives and uphold private property protections, BOMA says. The law should be altered to compensate the land owner, either through tax credits or outright payments, if his land is appropriated for the benefit of society at large. For ESA to succeed, the owner must be desirous, or at least not opposed, to animal habitats on his land.

Additionally, greater community involvement must occur to ensure that all parties have a voice and, therefore, a role in the proceedings. Mandated public forums before species listings or habitat designations are vital to ensuring complete understanding and greater cooperation in the preservation process, BOMA officials say.

Lastly, any species listing must be based on scientifically proven data. Before any listing or designation action is taken, BOMA asks that scientifically discerned proof of the species' condition and habitat requirements be determined. Sound science must the watchwords for all future attempts to protect endangered animals or plants.

The commercial real estate industry, in order to protect both its property rights and vulnerable species, is asked to support legislation to reform the Endangered Species Act (ESA). Real estate professionals are encouraged to support legislation that addresses BOMA's concerns, and to work with their local BOMA associations to promote preservation efforts that balance human and environmental needs.

Superfund

BOMA International's position is that Superfund legislation must be re-authorized to foster the clean-up of contaminated sites. The Superfund program, by removing dangers from our communities and returning the land to productive uses, enhances our quality of life. BOMA International believes reform of this program is necessary to better facilitate land reclamation and reutilization, and to hold polluters responsible for their acts. Only by limiting purchaser liability, enhancing brownfields remediation, and increasing local control can the Superfund program achieve its goal of decontaminating polluted properties, BOMA says.

In 1980, in response to environmental debacles such as Love Canal, the United States Congress enacted the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). This act, commonly referred to as Superfund, authorized the federal government to deal with inactive waste sites whose hazardous substances pose a threat to public health and the environment.

CERCLA legislation established a formal program to rehabilitate contaminated sites, sought to designate responsibility for site pollution and clean-up costs, and created a trust fund to pay for unrecoverable expenses. Additionally, the bill provided guidelines for the release of hazardous pollutants and created the National Priorities List (NPL), which ranks sites according to remediation needs.

Due to exceptionally high levels of contamination, 1,210 properties are currently listed as NPL sites and another 49 are proposed for listing. Additionally, up to 450,000 more tracts of land are deemed slightly polluted. However, since the program's inception in 1980, only 125 NPL sites have been decontaminated and removed from the list, with 287 more deemed cleaned but under monitoring. These meager results have been achieved in spite of the nearly $25 billion spent to date on the Superfund program.

Redevelopment of chemically polluted sites provides tangible benefits for a variety of stakeholders. The decontamination of these tracts removes harmful elements from the communities in which we live and work. Site remediation efforts create land suitable for redevelopment, thus utilizing currently idle tracts for future economic enterprise and opportunities, and reducing development pressure on current green fields.

Both parties have declared Superfund re-authorization to be a key legislative priority in the House and Senate this session. Early in the 105th Congress, Senator Bob Smith (R-NH) introduced Senate Bill 8, the "Superfund Cleanup Acceleration Act of 1997." Seeking less drastic alterations to CERCLA, the Administration and Congressional Democrats are instead concentrating on administrative reform of the current Superfund structure, and are focusing on individual aspects of the program, like brownfields, to legislatively reform or enhance.

While BOMA supports Superfund reform legislation, it believes that several specific issues must be addressed. Our association contends that the issue of purchaser liability must be resolved in order to create workable and responsive solutions for reclamation programs. The costs of clean-ups, which average $30 million per NPL site, should not be borne by innocent parties, but by the enterprises who profited from their pollution, BOMA contends. Property developers are clearly not the parties responsible for polluting sites, and, therefore, should be excluded from clean-up liability and its associated expenses.

Secondly, any CERCLA legislation must include ample provisions to address the clean-up and revitalization of brownfields, which are more easily redeveloped, BOMA maintains. Brownfields are vacant, abandoned, or underutilized commercial and industrial properties where the fear of unknown environmental liability is an obstacle to redevelopment or utilization. The Superfund program should designate funds for site assessment and remediation planning for the far more numerous, but far less contaminated, brownfield sites.

Lastly, BOMA International also supports greater state and local government involvement in the Superfund process. More rapid property remediation and redevelopment can be created by enhancing state authority and local interaction, BOMA claims. Increased state control of site assessments and clean-up efforts, and further community involvement will only expedite property rehabilitation.

Commercial real estate's support of CERCLA legislation hinges on the inclusion of these above listed concerns. Real estate professionals are encouraged to support Superfund (CERCLA) reform legislation on the national level, and to work with their local associations to promote legislative solutions that address BOMA International's concerns.