Congress Extends Transit Funding Moments before Hitting the Road

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Coming down to the wire, an extension to the transportation reauthorization bill passed in both the House and Senate last week just hours before Congress left town for its month-long recess.

The temporary bailout adds nearly $11 billion to the Highway Trust Fund originally scheduled to expire next month and now extends the lifespan of thousands of transportation projects across the country into May 2015.

While the Senate initially insisted the extension only last through the end of 2014 (as a means to force Congress to act on a new highway bill during the lame duck session), Senate Majority Leader Harry Reid (D-Nevada) acknowledged he ran out of time and support to further debate the bailout and brought the House measure to the Senate floor where it passed by a vote of 81-13.

President Obama is expected to sign the bill into law early this week, though analysts note the debate over transportation funding doesn’t end there. As Democrats and Republicans continue to be at odds over increases to the gas tax – the core revenue source of the Highway Transit Fund that has not been adjusted since 1993, political observers anticipate debate will carry on through the fall and beyond the congressional mid-term elections in November but that serious legislative action will not take place until next year.


Congress Paves the Road to Temporarily Fund Transit Bill

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The Senate is expected to vote this week in favor of a bill (already approved by the House) that would temporarily add nearly $11 billion to the Highway Trust Fund. Due to expire in September, the Highway Trust Fund, which provides funding for road construction and repair, could actually run out of money in August, according to estimates from the Department of Transportation.

Federal investment in transportation has a significant impact on commercial real estate development. A recent NAIOP survey finds that 77 percent of NAIOP members support the association’s advocacy efforts to reauthorize the massive transportation bill known as “MAP 21.”

Weighing in on the possible early depletion of funds, President Obama noted that 700,000 jobs could be at risk, resulting in the temporary halt or permanent stoppage of 100,000 projects across the country.

A particular issue of contention between transportation advocates and lawmakers is the possibility of increasing the gas tax – a key revenue source of the Highway Trust Fund which has not been raised since 1993. At its current rate, the gas tax will generate $34 billion per year for infrastructure spending, though Congress is looking to spend $50 billion per year to upgrade the nation’s beleaguered system of highways and roads.

NAIOP’s Government Affairs team continues to meet with Democrats and Republicans in both the House and Senate, and their staffs, to secure long-term funding for transportation and infrastructure projects.

The Future of Work

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What do real estate, management consulting, global investment and design industry leaders think about the future of work and the workplace? Convene, in conjunction with NYCxDESIGN week, hosted an invitation-only roundtable discussion on this topic and posted a summary of key points on its website last month.

Panelists uniformly agreed that the definition of work has shifted dramatically, largely as a result of technological advancements, globalization and a new workforce (the millennial generation, young adults born after 1980, who will become half of the global workforce by 2020).

When asked how they envision the workplace of the future, the concept of collaboration dominated the conversation. From a design perspective, Sonya Dufner, principal and director of workplace strategy at Gensler, “revealed that her clients are demanding office spaces designed for co-creation: rooms that allow people to come in and out, a ‘place where people can call home, and it’s not a desk.’”

Bernice Boucher, managing director of strategic consulting at JLL, expanded on the idea of the workplace as a “home away from home,” “remarking that workers care more about what their workplace feels like – they want to feel like they’re a member of a club, not just the owner of a desk. She praised the open plan office’s ability to increase communication, collaboration and visibility but cautioned that workplaces also need to give people the option of finding a space to concentrate if they want to.”

Congress Closer to Funding Some of Transit Bill

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As the Highway Trust Fund is set to expire in September, both the House and Senate have proposed legislation that would pump $11 billion into the fund.

Last week, House Republicans proposed a short-term fix that would add $11 billion into the fund through next May. Meanwhile, the Senate Finance Committee approved via voice vote an $11 billion bailout. Both bills would offset costs by lengthening customs users fees, changing corporate pension requirements and transferring money from the Leaking Underground Storage Tank Trust Fund.

As House Speaker John Boehner (R-Ohio) praised his chamber’s bill, Senator Barbra Boxer (D-California), Chairwoman of the Senate Environment and Public Works Committee, issued a statement claiming it will just “prolong uncertainty for business, local governments and the states and would create another financial crisis before the next construction season.”

Senate Finance Committee Chairman Ron Wyden (D-Oregon) is still committed to passing a long-term bill by the end of the year, though analysts note the temporary funding fix would most likely prevent a long-term solution from gaining traction, especially during the lame-duck session after congressional mid-term elections in November.

The Highway Trust Fund, which provides funding for road construction and repair, expires in September, though the Department of Transportation estimates that without a financial patch, funding could run out in early August because existing sources of revenue, such as gasoline taxes, are not enough to provide reimbursement to states for road and bridge construction, transit infrastructure and operations and safety programs.

A recent Legislative Survey of NAIOP members finds that 77 percent think federal investment in transportation has a significant impact on industry business. NAIOP’s Government Affairs team continues to meet with congressional leaders, including Representative Bill Shuster (R-Pennsylvania), Chairman of the Transportation and Infrastructure Committee and staff members of both parties and chambers to reauthorize the massive transportation bill known as “MAP 21.”

New Intermodal Facility Moves More with Less

Just as the state-of-the-art technology inside the new CSX Intermodal Terminal in White Haven, Florida, is an engine for progress in goods movement, so too is the facility an economic engine for the region of Orlando, Tampa and South Florida. The summer 2014 issue of Development magazine explores the impact this new facility will have on commercial real estate, e-commerce and consumers.

Surrounded by 930 acres of land ripe for future development, the 318-acre terminal features:

  • five 3,000-foot loading tracks
  • two 10,000-foot arrival and departure tracks
  • a highly-automated crane management system.

All that, plus a reduced environmental footprint, allows the facility to transport more product (up to 300,000 containers a year) faster and cleaner – two important elements in the e-commerce evolution of industrial real estate.

House Committee Advances Terrorism Risk Insurance Bill

On Friday, June 20, the House Financial Services Committee, chaired by Jeb Hensarling (R-Texas), voted to approve a five-year reauthorization of the Terrorism Risk Insurance Act (TRIA) program due to expire at the end of this year.

Renewal of the TRIA program is a top priority for NAIOP and the commercial real estate industry.  The program, which creates a federal backstop against losses due to terrorist acts beyond a certain amount, enables private insurers to continue offering coverage for acts of terrorism. Without it, the availability of terrorism coverage for commercial projects would be greatly diminished as insurers refuse to cover acts of terrorism in new policies, and exclude losses from terrorist upon renewal of existing policies.

Sponsored by Rep. Randy Neugebauer (R-Texas), the House bill, the TRIA Reform Act of 2014 (H.R. 4871), was approved on a party-line vote of 32-27. The partisan vote in the House contrasts sharply with a vote earlier this month in the Senate Banking Committee on that body’s version of a TRIA extension bill, (S. 2244) which passed the committee by an overwhelming 22-0 bipartisan vote. The Senate version contains fewer changes to the underlying TRIA program while renewing it for s years. The full Senate is expected to vote on S. 2244 in July.

Both bills call for insurers to pay a larger proportion of losses from any future terrorist actions, among other things. The House bill, however, also adds a distinction between conventional terrorist attacks and nuclear or biological acts of terror, which raises concerns for industry as it creates future uncertainty as to coverage.

NAIOP is a member of the Coalition to Insure Against Terrorism (CIAT), which advocates for renewal of the program and issued a statement in support of the House committee’s action.  NAIOP’s government affairs staff continues to meet with House and Senate members and their staff to push for quick passage of TRIA renewal in each chamber.

Leadership Lunch Club

Join your peers at NAIOP Charlotte’s Leadership Lunch Club event on Thursday, June 26. Fred Klein, Senior Managing Partner at Childress Klein Properties will lead discussion at this exclusive Developing Leaders event. For Fred Klein’s biography, click here.

This is a Free event, available only for NAIOP Charlotte Developing Leaders; lunch will be served. Pre-registration is required due to limited space. The registration cut-off for this event is Tuesday, June 24, 2014. Members who register before the cut-off date but do not show up for the event will be invoiced for $10.

This event will be held at the Childress Klein Properties’ office: 301 S. College Street, Suite 2800, Charlotte, NC 28202 Directions and parking information for 301 S. College Street.