2017 Is Not the Year of CEQA Reform

LOS ANGELES—California developers frequently complain about the copious regulations in California for developers. At NAIOP's annual I.Con event, experts came together for the on the Cracking the Code on California Mandates panel to give professionals an update on the regulatory environment. During the panel, it was clear that developers are disheartened by the current regulatory environment.

The misuse of CEQA and CEQA lawsuits were a main issue for the developers, who said that it was one of the major problems—but don't expect any changes soon. “2017 is not the year of CEQA or regulatory reform,” Rex Hime, president and CEO of the California Business Properties Association, said on the panel. Al Cvitan, managing partner at Reich, Adell & Cvitan, is working toward some improvement. “We know that CEQA needs to be reformed the process needs to be streamlined so that the building gets out of the ground,” said Cvitan. “One of the problems is that there are no standing requirements to bring a CEQA lawsuit.” He is working on a bill that would create requirements to bring a CEQA lawsuit. “We want to put a flashlight on what was happening.”

The other panelists shared the concern over CEQA. John Magness, SVP and market leader for the Western Region at Hillwood Investment Properties, was concerned about new initiative 8052, the replacement to SB18. The new initiative will make Indian development part of CEQA. According to Magness, the new bill held up one of their developments for six months while a local government became familiar with the regulation.

Even government agencies have had issues with CEQA. Greg Deveraux, managing partner at Worthington Partners and formerly of San Bernardino County, said that CEQA became a burden for the county, which had to handle the cost when developers went bankrupt. He remembered a specific instance when the county had to pay an $800,000 bill on a “CEQA process that we ran when the developer went belly up.” He added that the strict regulations in general hurt the county's relationship with local businesses. “We end up having a bad relationship with our business community because we are forced to enforce these regulations that we do not agrees with,” he said. “All regulations impact our economy. These regulations stop us from competing globally to attract tenants and investments that we need. That is problematic for all of us.”

Chris Shimoda, VP of government affairs at California Trucking Association, said, “It isn't just CEQA,” explaining that there are many regulations affecting the industry. His biggest concern is with environmental policies for trucks, tools and warehouses. “The cleaner that we get, the more aggressive the calls become,” he said, saying that they are fighting newly proposed regulations that would require zero emissions trucks. The decision will be made this year, and there is a chance they will lose. “If that is the case, we are looking at years of litigation fighting this,” he said.

LOS ANGELES—California developers frequently complain about the copious regulations in California for developers. At NAIOP's annual I.Con event, experts came together for the on the Cracking the Code on California Mandates panel to give professionals an update on the regulatory environment. During the panel, it was clear that developers are disheartened by the current regulatory environment.

The misuse of CEQA and CEQA lawsuits were a main issue for the developers, who said that it was one of the major problems—but don't expect any changes soon. “2017 is not the year of CEQA or regulatory reform,” Rex Hime, president and CEO of the California Business Properties Association, said on the panel. Al Cvitan, managing partner at Reich, Adell & Cvitan, is working toward some improvement. “We know that CEQA needs to be reformed the process needs to be streamlined so that the building gets out of the ground,” said Cvitan. “One of the problems is that there are no standing requirements to bring a CEQA lawsuit.” He is working on a bill that would create requirements to bring a CEQA lawsuit. “We want to put a flashlight on what was happening.”

The other panelists shared the concern over CEQA. John Magness, SVP and market leader for the Western Region at Hillwood Investment Properties, was concerned about new initiative 8052, the replacement to SB18. The new initiative will make Indian development part of CEQA. According to Magness, the new bill held up one of their developments for six months while a local government became familiar with the regulation.

Even government agencies have had issues with CEQA. Greg Deveraux, managing partner at Worthington Partners and formerly of San Bernardino County, said that CEQA became a burden for the county, which had to handle the cost when developers went bankrupt. He remembered a specific instance when the county had to pay an $800,000 bill on a “CEQA process that we ran when the developer went belly up.” He added that the strict regulations in general hurt the county's relationship with local businesses. “We end up having a bad relationship with our business community because we are forced to enforce these regulations that we do not agrees with,” he said. “All regulations impact our economy. These regulations stop us from competing globally to attract tenants and investments that we need. That is problematic for all of us.”

Chris Shimoda, VP of government affairs at California Trucking Association, said, “It isn't just CEQA,” explaining that there are many regulations affecting the industry. His biggest concern is with environmental policies for trucks, tools and warehouses. “The cleaner that we get, the more aggressive the calls become,” he said, saying that they are fighting newly proposed regulations that would require zero emissions trucks. The decision will be made this year, and there is a chance they will lose. “If that is the case, we are looking at years of litigation fighting this,” he said.