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BOMA SF delegates knock on Congressional doors – urge action on key issues (See Page 9)

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Spring 2012

BOMA 360 Buildings Gain Market Advantage From Seattle to Miami and San Diego to Boston, hundreds of buildings — including 27 in San Francisco — have won the new BOMA 360 Performance designation that boosts their appeal to tenants. BOMA 360 buildings must attain the highest industry standards in the following areas: ❚ Building management and operations ❚ Safety and security ❚ Training and education ❚ Energy conservation ❚ Sustainability ❚ Tenant and community relations According to a study by Kingsley Associates, commercial buildings that achieve the BOMA 360 designation have higher tenant satisfaction scores in 47 out of 50 categories relating to tenant relations compared to office buildings without the designation. BOMA 360 provides tenants with an easy and reliable benchmarking tool. Using BOMA 360 methods also helps operators improve operational policies, achieve savings through new efficiencies, attract more tenants and gain greater recognition for quality performance. “In this competitive marketplace, commercial property professionals need to find ways to differentiate their assets, and the findings of this study provide further evidence that BOMA 360 buildings are operated and managed to the highest standards of excellence in the industry,” said BOMA

International Former Chair Ray H. Mackey, Jr., partner and chief operating officer, Stream Realty Partners, L.P. “It was an honor being the first building in San Francisco to be awarded the BOMA 360 designation,” says CBRE Senior Real Estate Manager Elaine Dell'Aquila at 575 Market Street. “We earned this designation by demonstrating our asset is managed with the highest industry standards one comes to expect in Class A buildings. The BOMA 360 designation sets us apart from our competitors, especially when it comes to tenant retention and new leasing efforts.” Says Cushman and Wakefield Property Manager Jose Guevara, “BOMA 360 Certification validates the initiatives, programs and processes that have been enacted that elevate and promote Post Montgomery Center as an industry leader and one of BOMA’s and San Francisco’s premier properties.” David Koch, San Francisco-based Director of Property Management for Hines, explains, “Elite real estate managers maximize project performance by excelling at key fundamentals. Hines enthusiastically embraces the full-spectrum approach of BOMA 360 as a standard to measure and monitor management excellence and we look forward to seeing it become a recognized benchmark for quality.”

What’s Inside Views...     

Leadership Perspective • Page 2 City Hall Status Report • Page 3 Members on the Move • Page 5 Meet BOMA Members • Page 6 State & National Issues • Page 9

Mixing & Mingling... See Page 11


2  Leadership Perspective: Meade Boutwell

from the staff of at least one member of Congress. How do you see BOMA’s PAC helping influence the congressional, state legislative and City Hall’s attitudes toward BOMA?

President Meade Boutwell

Q&A

with BOMA SF President

You just returned from Washington, where you met with members of Congress. What BOMA issues did you raise with them?

ADA reform— we advocated that a “safe harbor” was needed when ADA defects were noted, so that owners of small businesses and properties have time to address the concerns and undertake the proper repairs before a lawsuit can be filed. We advocated that the depreciation of tenant improvements be shortened from 39 years to 15 years. We worked to separate carried interest for RE partnerships to be treated as long-term capital gains vs. income for tax purposes. We asked that tax credits for energysaving projects be extended. What reaction did you get from them about your concerns? Will they support or oppose BOMA’s positions?

We got a positive response from the staff of each member of Congress. We have already fielded additional requests for information on several issues

BOMA’s PAC is vital to getting our message out to a broad audience, both in and outside our industry. We are an organization, and industry, that has a positive impact on the economy and in San Francisco alone provide thousands of jobs across all sectors of the workforce. Can you explain the status of bike legislation, locally and nationally?

Bicycle parking is becoming an issue in urban cities. Indeed, the trend of tenant employees commuting by bicycle is not abating, and we’re fortunate in San Francisco to be leading the nation once again with legislation that will provide a framework for bicycle parking in existing commercial buildings nationwide. We at BOMA sat down with the bike coalition and city staff to craft language that would work for our diverse set of owners and managers. Not every building can handle bike parking, and we wanted to have as many solutions and options as possible, but be supportive of bikers. Are smaller buildings becoming more sustainable?

Small buildings are coming into the sustainable fold. BOMA is taking a strong look at this from a practical and investment return view. This is great, because most of the commercial inventory in this city is on the smaller side, and we have a lot to gain in savings and sustainability if BOMA can motivate this group of owners and occupiers.

Thanks to BOMA San Francisco’s 2012 Corporate Sponsors* Platinum Sponsor

Able Services Gold Sponsor

ABM Family of Services Pacific Gas and Electric Company Recology Golden Gate

Silver Sponsors Alliance Roofing Company, Inc. CAC Real Estate Management Co., Inc. Cypress Security Equity Office Properties Hines Kilroy Realty Corporation McMillan Electric Companies Metropolitan Electrical Construction, Inc. Paramount Group, Inc. ProTech Security Services, Inc.

Bronze Sponsors Biagini Waste Reduction Systems, Inc. CTC-California Technical Contracting, Inc. Georgia-Pacific Hanson Bridgett LLP Hathaway Dinwiddie Construction Co. Hudson Pacific Properties, LLC Imperial Parking (US) LLC – Impark Marble West NRG Energy Center San Francisco RREEF Real Estate San Francisco Electrical Contractors Assn., Inc. Securitas Security Services USA, Inc. Shorenstein Realty Services The Swig Company, LLC ThyssenKrupp Elevator Corporation Unique Elevator Interiors Inc. Universal Protection Service

Friends of BOMA Boston Properties CBRE C & C RiverRock Charles Pankow Builders, Ltd. Cole Supply Cushman & Wakefield GCI Inc. ISS Facility Services Inc. LAZ Parking MJM Management Group Nor-Cal Moving Services Richlen Construction R.N. Field Construction, Inc. Sky Rider Equipment Co., Inc. The Lawson Roofing Co. Inc. The Mohawk Group Waxie Sanitary Supply Young Electric Company. *Sponsors to date. For sponsorship opportunities, please contact Tory Brubaker at toryb@boma.com


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Status Report A summary of San Francisco government actions affecting the operations of the commercial buildings and The City’s economic well being.

Employee Bike Access in Commercial Buildings Legislation introduced by Supervisor John Avalos will allow tenants’ employees to bring their bicycles inside their rented space if the building owner does not provide them with a separate and secure storage area. If a building owner chooses to build a bike room, this legislation does not prohibit charging a reasonable fee for use. Ownership who do not wish to allow bikes in their buildings must arrange bike parking offsite within three blocks (75’) and can charge a reasonable fee for their secure bike parking.

Keeping Downtown Restaurants Viable By Limiting Food Trucks BOMA San Francisco members are part of a Mobile Food Facilities Task Force spearheaded by Supervisor Scott Wiener meeting this spring to discuss solutions to the proliferation of food trucks in San Francisco’s Financial

District. BOMA members want to limit the number of food trucks in the downtown area so existing brick-andmortar food outlets are not economically harmed. It is also necessary to amend the existing ordinance to indemnify building owners from any liability stemming from the operations of the mobile food facility and to add property owners to the required notification list before granting the MFF operators licenses.

Reforming Business Taxes Without Hindering Growth San Francisco Mayor Ed Lee is meeting with BOMA San Francisco members and other downtown leaders to discuss how to reform the current business tax system. The Mayor’s goal is to maintain the current level of tax revenues to the city (approximately $400 million dollars) but come up with a tax payment system that is more broad-based and will not deter job growth. Only about 10% of the city’s businesses (mostly larger employers) pay the city’s payroll tax. BOMA and downtown small businesses oppose any suggestion of a commercial rent tax and prefer to support a modification of the city’s payroll tax and annual business licensing fee. A final proposal likely will be on the November 2012 city ballot.

For further updates, visit www.bomasf.org/advocate and www.bomasanfrancisco.blogspot.com

BOMA Airs Concerns About Disability Access with Board of Supervisors President upervisor David Chiu was receptive to concerns and agreed to consider amending the disability access ordinance to reflect the reality of the commercial leasing process. BOMA supports efforts to better inform tenants regarding their obligations to comply with ADA laws. BOMA also asked Chiu to allow more time for any such legislative mandate to upgrade their properties. However, BOMA strongly petitioned Chiu to allow building owners to negotiate payment for compliance upgrades with the tenant rather than putting the full responsibility and cost burden on the landlord. For more information on this issue, contact Vice President, Public Affairs Ken Cleaveland or Manager, Government and Public Policy, John Bozeman.

S

Board of Supervisors President David Chiu.


4 Major Skyscraper Rooftop Cooling Tower Replacement? No Problem for Skyline Construction Replacing aging cooling towers on the roofs of buildings with minimal disturbance to tenants and downtown traffic requires a high level of sophisticated construction know-how. Skyline Construction lived up to its name recently, working high up in the sky above San Francisco, when it replaced cooling towers for three of the City’s skyscrapers, the 55-story former Bank of America Tower at 555 California, the second tallest building in town, and at 50 California and 505 Sansome. Three tricky challenges required three construction strategies. At 555 California, says Skyline Construction Senior Vice President Randy Scott, “We could not crane or fly up the cooling towers, so we demolished them piece by piece and brought them down to the ground. Then we took up the new cooling towers piece by piece and assembled on the roof.” The additional challenge was installing three towers that had to be built sequentially to ensure that a minimum of two towers were on line at any given time.

Strategies Minimized Disruption

Newly installed cooling towers on the roofs of 50 California (top photo) and 555 California (lower photo). Center photo: Randy Scott. Ranked among the top 25 general contractors in the Bay Area, Skyline Construction is a 100% employee-owned company with offices in Santa Clara and San Francisco. Specializing in building infrastructure, data centers, tenant improvements, and technical life science projects, Skyline Construction has been a leader in Bay Area building for over 15 years and is committed to saving clients time and money.

Skyline Construction replaced the old wooden cooling towers at 50 California during the winter, when the cooling demand on the towers was reduced. Since the building is 37 stories tall, the three new stainless steel towers also had to also be brought up to the roof on the freight elevators and assembled. Yet another strategy was used on the 20-story 505 Sansome building. MUNI electric transit lines had to be secured, and the two new cooling towers were hoisted to the roof using a crane. Cooling towers were installed and commissioned sequentially, so there was no adverse impact on tenant activity—a requirement for all three buildings.

For more information: Randy Scott Phone: 415.908.2513 Email: rscott@skylineconst.com Website: www.skylineconst.com


5 Members on the Move Environmental Filtration Inc. (EFI) welcomes Marie Begleries to its sales team, as of February 2012. Marie brings 15 years of experience in the Commercial/ Industrial market to EFI’s growing filtration business. Prior to joining EFI, she spent seven years with Culligan North America as the Commercial/Industrial Account Representative for the Santa Clara and Napa branches. Robert Dawes has joined ABM Janitorial Services’ Northern California Management Team as a Regional Director. He will be based in San Francisco, but will be taking on a leadership role throughout Northern California. Robert will be focused on business development as well as providing ABM’s current clients with excellent customer service. Hilary Hetzner has joined Kilroy Realty Corporation as an Assistant Property Manager at 303 Second Street. Assistant Property Manager Leigh Renard will oversee 250 Brannan, 301 Brannan and 370 Third Street. Leigh serves on the BOMA Young Professionals’ Steering Committee. Peacock Construction, Inc., a Bay Area construction firm specializing in commercial, institutional and industrial interiors, has elected Kyle W. Peacock as president and chief executive officer.

Previously, Peacock served as a vice president of the firm which has offices in San Francisco and Lafayette. He will oversee all company operations. Marsha Ramsey, RPA, has joined Cushman & Wakefield as General Manager of 525 Market Street. Marsha was formerly an asset manager and project director for HCV Pacific Partners. In 2008, she opened BrightStar Healthcare, one of the top California agencies in the BrightStar system. Marsha’s husband, Dr. Ramsey, has taken over management, affording her the opportunity to return to her longstanding career in real estate management. Kate Ryken, a tenant coordinator at The Swig Company, was honored by SF Supervisor Scott Wiener (District 8) as one of three District 8 Women of the Year. Ms. Ryken, along with Catherine Bergstrom and Beth Spotswood, assisted in the effort to provide relief to the displaced tenants who were burned out of their apartments by a devastating fire in September 2011. Supervisor Wiener honored the women for “demonstrating what neighborhoods and communities are all about — pulling together and being there for each other.”

Two Big Moves at BOMA San Francisco Two BOMA San Francisco staff members have new titles and areas of responsibility. Ken Cleaveland has been named Vice President, Public Policy. He will be spending more time building external political alliances, and strengthening collaboration with other business groups whose support can help BOMA achieve its public policy objectives. John Bozeman has been named Manager, Government and Public Affairs. John will take on additional responsibilities supporting several of our advocacy committees and, in particular, developing and coordinating BOMA’s stance on public policy issues relevant to members. Ken Cleaveland and John Bozeman


6 Principal Member Profile

Frank Fudem, Senior Vice President Cassidy Turley

What’s BOMA’s greatest value to Frank Fudem? Two big things. First, BOMA’s active engagement in the political and government arena. “BOMA is at the forefront of efforts to keep San Francisco a good place to do business. All too often City leaders and departments enact measures that have the effect of discouraging job growth. BOMA has a lot of influence and leverages that influence by working with other groups, within both business and labor, in matters of public policy,” says the senior vice president of Cassidy Turley. Fudem points out that BOMA’s political efforts ultimately benefit tenants and the entire business community. Since Fudem was a tenant for years before he went into commercial real estate, he relates to tenants’ needs and requirements and works for win-win solutions to problems. Secondly, he values BOMA’s data and perspectives that make operating In his leisure time, public policy advocate Frank buildings more efficient—for landlords and tenants alike. Best of all, he Fudem enjoys sailing on the San Francisco Bay. likes the Experience Exchange Report that gives both landlords and tenants realistic information that helps them better price services. The admitted packrat has been saving EERs since 1993, so he can show tenants what a good job San Francisco landlords have done controlling expenses over almost 20 years. Costs have naturally escalated over time, but not nearly as much as you might expect, he says. Off-hours, Fudem is a sailor, tacking and jibing through what he considers one of the best places in the world to sail— within sight of the City’s iconic skyline, right out on San Francisco Bay.

Associate Member Profile

Manny Fishman, Partner Buchalter Nemer (Real Estate Practice Group)

Manny Fishman “is one of BOMA’s superheros,” says BOMA San Francisco Executive Vice President Marc Intermaggio. Why? “He epitomizes the best in volunteerism with his consistent, active involvement in many venues, on many issues,” says Intermaggio. The San Francisco commercial real estate attorney has served on the San Francisco and California BOMA Board of Directors, continues to provide expert guidance to the Governmental Affairs Committee, chaired the Telecommunications Task Force and represents BOMA on the Mayor’s Housing Trust Fund Working Group. Fishman is focused intently on taxation issues. “Increasing taxes, fees, and ‘social policy’ assessments on office buildings because of a misguided focus on the market value of office buildings is economically counter-productive,” he says. “Commercial office buildings not only add to the aesthetic beauty of this wonderful city… they are a platform for environmental sustainability, energy conservation and cutting-edge in-building technology, and serve as a meeting place where business can thrive by hiring people and by creating new services and ideas that fuel growth in the general economy. Our industry needs to show local and state governments that, by any metric, the owners and tenants of commercial office buildings pay more than their fair share of taxes,” Fishman explains. Fishman is the sort of guy you want on your team for the many marathon issues that confront building owners and managers. He comes by it naturally, with 15 such races under his belt when he’s not downtown in his Buchalter Nemer law office. Next feat for him: the New York City Iron Man Triathlon.

Manny Fishman advocates for the many issues facing business owners and competes in marathons.


7

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9 BOMA Delegation Visits DC

State Issues California legislation (SB 998) authorizing an electrical corporation to develop and implement an on-bill repayment program for eligible energy efficiency and renewable energy investments is getting favorable reviews in BOMA circles. Authored by Senate Select Committee on Energy Efficiency Chairman Kevin de Leon (D-Los Angeles), companion legislation (SB 1130) would also create the statewide Building the Economy Through Energy Retrofits (BETER) program, to make energy efficiency upgrades cost-effective for commercial property owners by pooling risk to offer low cost loans. “It’s important that utility companies be able to provide a vehicle for owners of commercial buildings to retrofit/ upgrade their facilities for energy efficiency in an affordable way. This is particularly important for owners of smaller commercial properties,” says Ken Cleaveland, BOMA San Francisco’s vice president, public policy.

For more information, visit www.bomacal.org.

A delegation of BOMA San Francisco members, led by President Meade Boutwell, Sandra Boyle, Susan Court, Stephany Cull and Stephen Ring, journeyed to Washington, D.C. in February to urge members of Congress to protect the commercial building industry from extortionate ADA lawsuits and to permanently extend the 15 year depreciation allowance for tenant improvements.

From left to right: Ken Cleaveland, Karen Penafiel (BOMA International, VP Government Affairs), Stephen Ring, Congresswoman Jackie Speier, Stephany Cull, Meade Boutwell, Susan Court and John Bozeman.

They also supported maintaining the current tax law that taxes the carried interest of a general partner in a real estate partnership as a capital gain. And they supported tax incentives for energy efficiency upgrades and called on Congress to consider conservation and demand-side management tools, such as tax incentives, to address the growing energy challenge.

For more information on national issues affecting BOMA, visit www.boma.org.

level-e.

LEVELe Elevator Interiors bring industrial strength beauty to the most demanding public spaces. Quick to install and built to last, LEVELe is a cost-efficient choice for any environment. www.forms-surfaces.com

In Memoriam... Brad Shaw, a senior estimator with American Asphalt passed away on Friday, February 24, doing what he loved second only to his family: fishing. Brad, an accomplished angler, often spent the early morning hours fly fishing before heading to work at American Asphalt. He was a devoted husband and father survived by his wife of 22 years, Nikki, and children Gretchen, 17 and Andrew, 14. Services were held on March 7. Donations be made to the Shaw Family Educational Fund, 7959 Hansom Drive, Oakland CA 94605.


10 . Site Surveys & As-Built Services . Area Calculations . Computer-Aided Drafting Services . Drawing Conversions . Presentation Plans

Add BOMA to Your Company Conference or Staff Meeting

Member Benefit Update

. Programming . Tenant Tracking Reports . Leasing Exhibits . File Management & Archiving . Drawing Inventory

CTC

. Egress Plans

CALIFORNIA TECHNICAL CONTRACTING Technical Support & Design Solutions 48 Second Street, Suite 300, San Francisco, CA 94105 Tel: 415.495.6220 Fax: 415.495.6266 Web: www.ctc-sf.com

Member

BOMA AIA

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Membership Luncheons April 16 May 24 July 26 Sept. 27 Oct. 25 Nov. 29

When a company joins BOMA, all employees of the building or company are counted as members and are encouraged to reap the benefits. To explain how to derive value from BOMA, our staff has addressed several member company meetings, including one for over 100 property accountants. Let us educate your employees on how they can benefit from our educational offerings, leadership development opportunities, and informational resources. When all your employees participate in BOMA, you expand your presence in the local commercial real estate industry. We can streamline a presentation to suit your audience and your time frame. If you would like to discuss this opportunity, please contact Member Services Director Tory Brubaker at 415-362-2662 x115 or toryb@boma.com.

EARTH Awards & Luncheon Membership Luncheon Membership Luncheon Membership Luncheon Annual Membership Meeting & Member Recognition Luncheon Membership Luncheon

Luncheons will be at The City Club except for the April event, which will be at the Hotel Nikko. For a complete calendar of BOMA events, visit www.bomasf.org/calendar

BOMA Views is published by BOMA San Francisco. Editor: Henry Eason Art Director: Ellen Eason Eason Communications LLC, San Francisco Advertising Director: Tory Brubaker

To advertise, contact: Tory Brubaker at 415.362.2662 x115 or toryb@boma.com

877-CAN-CLEAN 877-226-2532


11 Mixing & Mingling Casino Night BOMA members and guests enjoyed a lively Casino Night on February 29 at One Market Plaza.

Top photo: left to right, Celia Smith, Laurie Rummelhart and Tim Vogel. Middle photo: Anne Stephens and Susan Court. Right photo: Sha Brown and Steve Mack.

Thanks to the Event Sponsor...

Young Professionals St. Patrick’s Day Mixer BOMA SF Young Professionals gathered on March 15 for a St. Patrick’s Day mixer at Kells Irish Restaurant & Pub. The BOMA YP Steering Committee encourages members with 0-7 years of industry experience to attend BOMA YP educational and networking events. Visit the BOMA website to learn more abut upcoming events.

Top photo: KJ Galentine, Chris Baker and Ryan Rusler. Lower left photo: Jovy Blume and Joe Braucher. Lower right photo: Jennifer St. Ours.

Thanks to the Event Sponsor...

Thanks to the Food Sponsor, Empire Elevator

Workforce Development Update: Careers in Real Estate Committee The mission of BOMA’s Real Estate Careers Committee is to promote awareness of the opportunities within the commercial real estate industry to students and emerging professionals outside of the present CRE workforce. Since its formation last year, the committee is well on its way to achieving its key goals for 2012. Committee members have participated in two college career fairs and are now developing a career fair exhibit booth complete with business cards, backdrops and marketing materials. Committee members have been guest lecturers and served on panels for the University of San Francisco’s School of Business real estate classes. The committee hosted a building tour of the Post Montgomery Center for USF students, and several students have participated in BOMA’s new job shadow program, which is a precursor to an internship program. The overall goal is to develop and maintain contact with students and create a career path to the jobs in our industry. For more information, contact Committee Chair Warren Mead, Cushman & Wakefield, wmead@sansome475.com.


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The Last Word: Marc Intermaggio Can We Sustain San Francisco’s Success? It makes me nervous when things are going so well in San Francisco. Our bustling local economy is the envy of the nation. We have many city officials working harder— and more collegially— than at any time in memory for an even more robust economic climate. Companies and organizations from around the world are voting for San Francisco with their pocketbooks by choosing to have their offices here — improving the local jobs picture. Our commercial real estate community has created a destination for sustainable, efficient places to work, with San Francisco having been recently named the world’s top green city at the United Nations Framework Convention on Climate Change in Durban. And we get to work in an environment that is, frankly, more fun to be in than anywhere else on the planet, with our magnificent Bay views, dazzling architecture, expansive parks, world-class museums, storied restaurants, innovative retail, sizzling nightlife, music festivals, Giants’ and 49ers’ games, a climate of diversity, innovative entrepreneurs and events like the 2013 America’s Cup sailing race. Tens of thousands of young, well-educated and imaginative people who want to create cool new things are flocking to the City. Ours is a city that’s looking ahead, with plans to create a new urban environment on Treasure Island and developments in our southern neighborhoods, a new central subway line connecting Caltrain with Chinatown, improved arterial connections to the North Bay and a new Transbay terminal complex. So…why am I nervous about the future?

San Francisco is a tale of two cities: a highly productive and positive group of people and some who are less so. With Byzantine, burdensome processes and NIMBY critics that stifle community improvements, we risk losing our ability to capitalize on fruitful opportunities that come our way. And we are burdened with unsustainable municipal costs that loom in a state that will also demand its pound of flesh from us, with soaring public employee pension and healthcare costs threatening to crowd out basic government services. I worry that politicians will respond to the bullhorns in the street and not to reasoned citizen dialogue. On the state and local level, there is much talk of the need for “revenues.” (Read: tax and fee hikes.) Proponents of this magical elixir called “revenues” envision its sources as inexhaustible wells of cash that they can draw on whenever they like to sustain government expenditures. I call it the Greek Fix. In Greece, generous public expenditures have virtually bankrupted that country, shaken the financial foundations of Europe and reverberated across the world. But the story of Greece has provided us with a cautionary tale that is especially relevant to Californians. We have two choices. San Francisco, along with the rest of California and, indeed, the nation can either continue to expand undisciplined government spending and imperil economic growth, or create an environment for private enterprise job creation and, consequently, ensure a more sustainable tax base. In 2012, this issue will be decided here, throughout California and around the country in ways that affect us. I worry that the wrong choices will undermine what promises to be a new and golden era for San Francisco. Let’s not fumble away the ball in the end zone. Marc Intermaggio, CAE, is the Executive Vice President of BOMA San Francisco.

BOMA Views Spring 2012  

BOMA San Francisco's quarterly newsletter.

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