BOMA Views Winter Edition - February 2013

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Winter 2013

BOMA Members Face Political Challenges Last year’s election will result in for disabled access deficiencies. This new challenges to the commercial real was something we had been working estate industry, as an increasing numon for many years, and, with the help ber of people were elected to serve in of Sen. Dianne Feinstein, we finally San Francisco, Sacramento and got the state legislature to move on Washington who do not have much the matter,” says Ken Cleaveland, business orientation. It will be imporBOMA San Francisco’s vice president tant to ensure that of public policy. these officials Secondly, adds understand the Cleaveland, “We vital role building were instrumental operations play in getting the state in the economy.

Department of BOMA’s Political Industrial Relations Action Committee to rescind its and its governCircular Letter ment relations 11-01 that severely program’s educalimited what tional efforts will owners of high-rise become even more BOMA’s political actions this year will be office buildings essential. more important than ever. Ken Cleaveland could do to mainConsequently, tain and upgrade discusses issues with Mayor Ed Lee. it will also be necelevators without essary for BOMA members and all the constant oversight of a certified companies that depend on commerelevator mechanic. More work is to cial real estate’s good health to step be done to re-craft that implementaup to the plate by making financial tion order, but you can be sure that contributions and devoting some time BOMA will be at the table.” and energy to government relations San Francisco Issues efforts.

BOMA is involved in a number

State Issues

“On the state level we had two very significant developments that BOMA was directly involved with, namely, the passage of a state law (SB 1186) that will help owners of commercial properties better defend themselves against frivolous lawsuits

of city issues, including a current revamping of the Mobile Food Facility ordinance that has become a major cause of concern for many of our first-floor retail food tenants.

In addition, we will continue to monitor implementation of the reform of The City’s new gross (Continued on page 15)

What’s Inside Views...

Major CRE Challenges • Page 2 City Hall Status Report • Page 3 Members on the Move • Page 5 Meet BOMA Members • Page 7 State & National Issues • Page 9 Mixing & Mingling... Page 13

2 Major Challenges for Commercial Real Estate in 2013 With Steven Ring, BOMA San Francisco President GOVERNMENT ISSUES: The biggest

issue facing us today is uncertainty.

Before us are some of the largest changes in our tax code in recent history, and our elected representatives cannot agree on a compromise to help create a path towards economic recovery.

In California the elected “supermajority” in Sacramento has the ability to make it very ugly for commercial real estate, and Proposition 13 is under greater scrutiny than ever. In particular, many attempts have been made to remove commercial real estate from the protection of Prop. 13 and create a “split roll” tax. A reassessment of market values without tax increase protection would have a tremendous effect on commercial real estate. I see 2013 as a battle year for Prop 13, and we need to support BOMA-CAL more than ever.

INDUSTRY CHALLENGES: The aging population of real estate management leaders is a continual concern. On the part of BOMA SF, we’ve made great efforts in attracting new talent. An example is the great work being done by the BOMA SF Foundation in collaboration with the Careers and Young Professionals Committees. This changing demographic will be an ongoing challenge.

REAL ESTATE UTILIZATION: Space requirements are creating a dynamic in which the average square foot per employee has decreased 40% over the past 10 years, from 227 sf per person to 135 sf. This is creating stress on the average building, as most building systems were not designed for this type of occupant density and our industry needs to be proactive in adapting these new space requirements in their operations.

HOW WE CAN BEST MEET THESE CHALLENGES: Now more than ever we need to keep supporting our efforts through the BOMA PAC as well as BOMA-CAL. The legislators are looking for any means of raising revenues, and commercial real estate is an easy target for them. In terms of meeting the need for new talent, again, the BOMA SF Foundation is just one avenue to introducing new faces to our industry, and I strongly urge everyone to support the foundation.

MY GOALS AS BOMA PRESIDENT: First and foremost is to build upon the great success BOMA has had for over 100 years and use this as a foundation for BOMA for the next generation. Secondly, to continue our strategic plan of attracting new members to our industry and making sure they understand how BOMA can be a lifelong partner in their career path. Lastly, to create a greater market awareness of the role that management can deliver when engaged in an overall asset strategy. I believe that the message needs to get out beyond our own membership to the value that BOMA delivers.

Thanks to BOMA San Francisco’s 2013 Corporate Sponsors* Platinum Sponsor

Able Services

Gold Sponsors ABM Family of Services NRG Energy Center San Francisco Pacific Gas & Electric Company Recology Golden Gate

Silver Sponsors Alliance Roofing Company, Inc. BCCI Construction Company BWRS-Always Green CAC Real Estate Management Co., Inc. Cypress Private Security LLC Hines Kilroy Realty Corporation Metropolitan Electrical Construction, Inc. Paramount Group, Inc. San Francisco Electrical Contractors Assn., Inc. Universal Protection Service

Bronze Sponsors California Technical Contracting, Inc. CodeGreen Solutions Equity Office Georgia Pacific Hathaway Dinwiddie Construction Co. Hudson Pacific Properties Imperial Parking US LLC - Impark Marble West McMillan Electric Co. RREEF Securitas Security Services USA Shorenstein Realty Services The Swig Company, LLC ThyssenKrupp Elevator Corporation Unique Elevator Interiors Inc.

Friends of BOMA American Asphalt & Concrete Boston Properties C & C RiverRock Newmark Capital Building Maintenance CBRE Cole Supply Cushman & Wakefield of CA GCI General Contractors LAZ Parking ProTech Security Services, Inc. R.N. Field Construction, Inc. Rossi Builders The Lawson Roofing Co. Inc. Waxie Sanitary Supply Young Communications Wilson Meany *For sponsorship opportunities, please contact Tory Brubaker at toryb@BOMA.com

3

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

Managing Increased Bike Commutes As many in San Francisco government promote greater and greater bike use to relieve The City’s transportation and air-quality challenges, building managers will be asked to accommodate more tenants who opt to bike to work.

BOMA’s advocacy professionals and volunteers are analyzing proposals and seeking input in crafting the most practical way to administer bike parking on and adjacent to their premises.

The Advocate (BOMA’s go-to source for government analysis) says a new proposal “includes the Tenant Bicycle Access in Existing Commercial Buildings law that our

members worked on with the SFBC (San Francisco Bicycle Coalition) in 2011 and was signed into law in 2012. The aim of this new measure is to streamline all references to bicycle parking and to provide for new requirements in the San Francisco Planning and Environment Codes.” The Planning Department is still working on amending the proposal language to reflect stakeholder issues, including BOMA San Francisco's concerns mentioned below. Want to give input? Contact John Bozeman at JohnB@boma.com.

New Disability Improvement Law As of this year, commercial property landlords have the obligation to make disability access improvements and to provide required notifications when entering into or amending a lease of a property up to 5,000 square feet of space. Effective June 1, 2013, the requirement is expanded to properties up to 7,500 square feet of space.

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

San Francisco’s Gross Receipts Tax — A Bumpy Ride Ahead When the voters of San Francisco approved Proposition E in the November 2012 election, they enacted a new business tax, one based on a business’ gross receipts, not its payroll.

The new model imposes a tax on the privilege of conducting business in San Francisco, based on “business activities” in San Francisco. The ordinance establishes eight different classes of businesses. Each class has a different tax rate that increases based on specific thresholds of gross receipts.

Real estate and rental and leasing services are in one class, and the tax is limited to “gross receipts derived from or related to properties located within the City.” Property management, real estate consulting and brokerage services all fall within this category. The tax rate for “real estate” gross receipts is $2.85 per $1,000 annually, increasing to $3.00 per $1,000 on gross receipts over $5,000,000. In 2019 the top tax rate for gross receipts of $25,000,000 per year or more increases to $3.25 per thousand. There is a small business exemption for businesses with $1,000,000 or less in annual gross receipts, but there are limitations on owners of residential real estate.

There are limited exclusions from gross receipts for property taxes, income from the sale of buildings where a

transfer tax is paid, parking taxes, and taxes collected by a taxpayer that are remitted to the appropriate governmental entity. Persons engaged in more than one line of business (real estate and construction), or with offices in San Francisco and elsewhere, have special allocation of income rules.

Confused? There is more. The tax is being phased in over a five-year period, beginning in 2014, and for those years (and potentially beyond if tax revenues fall below expectations), all persons doing business in San Francisco will have to pay both a payroll tax and a gross receipts tax. The risk of “double dipping”— paying a tax on the same gross receipt as it moves from tenant to building owner to vendor is a concern. The tax may accelerate the trend towards “net leases” to avoid a landlord being deemed to have received a “gross receipt” for money that is simply paid to reimburse a third party.

This year the City is developing rules and guidelines and BOMA San Francisco’s Government Affairs staff and committee are actively engaged on this issue.

– Report by Manuel Fishman, Partner, Buchalter Nemer. He may be reached at 415.227.3504 or mfishman@buchalter.com

4 Less Becomes More —Digital Video Transmission is Changing Building Infrastructure Requirements McMillan Installs Powerful, Yet Simplified, Audio-Visual Systems The “Analog Sunset” officially set on December 31, 2012 and digital audio and video has officially taken over. Why is this important and what does it mean? It means that the way we have been transmitting video and audio for conference rooms, digital signage, meeting rooms and auditoriums will change forever. Complicated wiring often associated with audio, video and conferencing systems can now be greatly simplified with the use of twisted pair wiring.

McMillan Media Systems is at the forefront in installing AV systems that meet the needs of sophisticated clients, including financial firms, tech start-ups and others that demand the most advanced systems. The expert team at McMillan uses new technologies that result in decreased labor and material cost for AV All Hands Meeting Area featuring a video wall wiring—a bottom-line benefit for customers who are building at One Sansome Street in San Francisco. or upgrading conference rooms or auditoriums.

Not long ago, in order to transmit the audio-video signal from a DVD player, a computer or video camera to a monitor or projector required a separate, and sometimes different, cable for each piece of equipment. Signals can now be sent over CAT 5e style cable with the use of “transceivers.” Transceivers are small boxes that are installed on the output of the sending device and input of the receiving device. This allows virtually any audio, video or control signal type to be transmitted over the same style CAT 5e cable.

“In the past, when conduits were required for audio/video integration it was common to see a 2” conduit specified. Now a 11⁄4” conduit and sometimes even smaller can be more than enough Conference room with video wall installed to accommodate these signal types,” says Rob Janssen, Systems

by McMillan Media Systems at One Post Street.

Designer, at McMillan Media Systems.

The advent of digital AV and the use of CAT 5e wiring designs have a positive advantage. The smaller diameter of twisted pair cable reduces the quantity and size of the electrical conduit required. This results in lowering the physical impact on buildings, as well as labor and material costs.

McMillan Media Systems is a division of McMillan Electric Company, which has been servicing the greater San Francisco Bay area since 1965. For more information on McMillan Media Systems, contact Rod Clark at (415) 826-5100 x125 or rclark@mcmillanco.com.

Visit our website at www.mcmillanco.com to learn more.

5 Members on the Move Cathy Coffman has joined the San Francisco Electrical Contractors Association (NECA) as Assistant Manager. Cathy has over 20 years of experience in the commercial construction and development field, most recently as a Project Manager for Cupertino Electric and previously E.J. Weber Electric. Her areas of focus include government and public affairs, education and further developing industry partnerships.

ABM is pleased to announce that Ben Fish of its ABM Security Services division has been promoted to National Director of Sales in Chicago. Ben was previously Strategic Alliance Manager of Northern California. He looks forward to being involved with BOMA Chicago.

C&C RiverRock Newmark announced that Anne Stephens Hinz joined the team as Executive Vice President. She will be in charge of all operations in Northern California and Sacramento.

Anne was formerly with Paramount Group and served as BOMA San Francisco President.

In January 2013, Sarah MacIntyre joined Kilroy Realty Corporation as an Asset Manager in its San Francisco Region. She was previously a General Manager with Wilson Meany and is currently the President Elect for BOMA San Francisco.

Cushman & Wakefield has hired Laura McLellan as a permanent employee as of December 2012 as Tenant Services Coordinator at 650 Townsend.

Justin Sacco joined Kilroy Realty as Senior Property Manager for 360 Third Street. He was previously the Property Manager at One Market Plaza. His responsibilities include budgeting, operations management, tenant relations, and assisting with renovation lease-up and construction efforts.

Since 1976, businesses in the real estate industry have turned to us for the resources and expertise that help them grow. Our real estate group provides a wide range of services including financial statement audits, income tax planning and compliance, lease and construction cost audits and CAM reviews.

www.oumcpa.com

(415) 434-3744

6 Prepare Your Building for the Future of Telecom Building owners and managers know that telecommunication infrastructure is one of the most critical features potential tenants look for.

Tenant access to ultra high-speed, secure, scalable networks that support cloud computing, Internet and Business Ethernet is not a luxury, it’s a necessity! And end to end fiber is a must— copper can’t satisfy the growing appetite for bandwidth. tw telecom is a leader in “future fitting” buildings, providing next generation network connectivity that meets all those needs and anticipates tenant growth and technology advances. With our fiber optic network, we connect to nearly 17,000 buildings in the U.S. And our fiber doesn’t stop at the building telecom common area space (MPOE). We coordinate with your building engineer and riser management company to vertically pre-position fiber optic cable to all floors. Our unique, proactive approach conserves riser space, minimizes disruption and facilitates fiber connectivity directly to the tenant’s suite for optimum network performance and reliability.

The result is a “close the deal” selling point that sets your building apart from other properties.

Please contact tw telecom to upgrade and “future-proof” your property. Make your building’s telecom network accessibility a defining element of your value proposition!

Make your building’s telecom network accessibility a defining element of your value proposition!

www.twtelecom.com

For more information, contact: Dave Ellebrecht, Vice President/ General Manager 925.953.7027 Dave.Ellebrecht@twtelecom.com

7 Principal Member Profile

Paul Richards, Vice President, Director of Property Management, Wilson Meany

As BOMA San Francisco’s longest serving member, Paul Richards has been president, founding board member of BOMA California, a leader of most committees at one time or another and, most recently, chair of BOMA SF’s Centennial Committee, where his institutional knowledge enriched the celebration in many ways.

Beyond all that, Richards has a been steadying organizational influence, a teacher, mentor, Dutch uncle and, quite often, the life of the party. He made his bones as an industry professional in BOMA, and has remained committed for over 45 years — often with great personal results.

“I was fortunate enough to have five job referrals via a BOMA contact, and all As BOMA San Francisco’s longest five led to a new position in our industry. So it is important to nurture and keep serving member, Paul is often the life those BOMA contacts via other managers and our service industry members,” says of the party.

Richards.

Richards is generous in sharing his knowledge with young professionals in an industry in which he is a proud ambassador. He’s a great recruiting influence and does all he can to attract top talent to commercial real estate at a time when the industry needs good people —like his son, Preston Richards, a property manager.

“Many managers, salespeople, vendors and engineers are sons and daughters, cousins and relatives of existing BOMA members. This is a great business and it is certainly gratifying to see family members involved,” says the elder Richards.

Off-hours, you can find Richards on a golf course or at a winery in Napa or hiking, boating, water-skiing, fishing or kayaking at Lake Berryessa with his three sons and two grandchildren.

Associate Member Profile

Ryan Rusler, Executive Account Manager Har-Bro Restoration Services

If you are a young professional in BOMA San Francisco and want to advance in your career, you might follow the example of Ryan Rusler. The executive account manager at HAR-BRO Emergency Services and Restoration has gained considerable knowledge of the industry and developed an extensive network by serving on a number of key committees.

Because of his extensive BOMA involvement with industry professionals — particularly in emergency preparedness programs — he knows what’s going through property managers’ minds when disaster strikes. And that makes him more effective in solving problems.

“Our core business (commercial office buildings) grew exponentially when I became more involved in the committees,” says Rusler, who says that he has also learned career development skills by observing others on the Young Professionals Committee.

Tory Brubaker, BOMA’s member services director, says “Ryan epitomizes Ryan is a huge San Francisco Giants fan. what it means to be an engaged committee member. He has served on the Young Professionals Steering Committee for several years and has pro-actively accepted responsibility and executed his duties with attention to detail and an eye for the bottom line.”

Rusler has also been active in organizing and planning emergency preparedness events that can save lives and limit property damage, says John Bozeman, BOMA’s manager of government and public affairs. Rusler’s advice to BOMA newcomers: “Use BOMA as a tool to grow your career and knowledge base, not your bottom line. Participate because you care about the topics being discussed, not because you want to meet new customers. The revenue and customers will come when you are passionate about being a part of the greater community that BOMA has created.”

8 Rossi Builds New SFCTA Offices On-Time and On-Budget Often budget issues turn into schedule issues when project commencement is delayed as value engineering takes place. But when Rossi Builders leads the movement on cost savings, the schedule can be maintained.

Rossi Builders was the general contractor for the SFCTA offices at 1455 Market (above).

President Craig Rossi (right) uses a hands-on approach to make sure jobs run smoothly.

“I appreciate all the great work Rossi Builders did for SFCTA. You really opened our eyes with your positive attitude, attention to detail and great quality of work. It was a very successful project and we will definitely try to get you on some other projects with us.” – Steve Suzuki, SFCTA Architect, Gensler

Rossi Builders was chosen from a prequalification process that San Francisco County Transportation Authority (SFCTA) and Gensler Architects conducted to bid the build-out of a 23,920 square-foot class A office space at 1455 Market Street. The SFCTA was under tremendous constraints to make a hard move-out deadline with a fixed budget.

The Rossi Builders team showed up for its interview with a prepared list of suggested cost savings in case the SFCTA might have budget issues. Not only was the list a welcome sight, but SFCTA awarded the project to Rossi Builders and asked for more cost-saving ideas. The final list of options totaled 50 items of which 26 were selected for a total of $516,742 in savings.

With the budget set, the hard deadline and tight schedule remained, and that is where Rossi Builders excels. Rossi understood the SFCTA’s urgent deadlines and made sure the schedule was the focus of everyone on its team. The firm’s strength is responding to conditions in the field and overcoming hurdles by outside entities.

Rossi and Gensler Teams Fast-Track the Project To get a quick jump and remain ahead of schedule, Rossi Builders secured commitments from its team and Gensler Architects to fast-track the submittal process. With high energy and agility, Rossi Builders led the team with clear communications and organization. The space was delivered on-time and on-budget.

Through organization, planning and execution, Rossi obtained its goal of delivering the best possible construction experience to the client.

Contact: Craig Rossi, President Rossi Builders, Inc. 415.982.6292 craig@rossibuilders.com www.rossibuilders.com Providing Value to Our Customers for Over 75 Years

9 State Issues

News from Washington

The new two-third’s “supermajority” of Democrats in the California legislature has broad taxing authority, and some legislators are leading tax-hike efforts. The California Against Higher Property Taxes (CAHPT) coalition of business organizations is renewing its efforts this year to oppose new tax-hike proposals— especially “Split-Roll” legislation offered by Senator Mark Leno (D-San Francisco) that would allow local parcel taxes for schools to pass with 55 percent of the vote, instead of the twothirds currently required. “Increasing property taxes will only hurt California’s small businesses, workers, consumers, seniors and taxpayers and further damage our state’s struggling economy. We don’t need more new taxes placed on California taxpayers,” says CAHPT. Meantime, BOMA California reports that Assembly Member Rob Bonta (D-Oakland) introduced a parcel tax measure that may concern owners of non-residential property, as its effect will be to create a de facto split-roll property tax at the local level.

President Obama’s reelection, coupled with a Democratic majority in the U.S. Senate and a larger Democratic minority in the U.S. House, means renewed focus on issues ranging from energy use to climate change (both mentioned in Obama’s inaugural address), higher taxes and legislation supported by labor unions, such as “card check.”

BOMA members who want to influence federal legislation and regulations must make their views known through their members of Congress, as well as directly to the White House and relevant federal agencies. One of the best ways to track government actions that influence the way you do business is to regularly visit www.boma.org and click on the Advocacy tab. BOMA’s trained government relations team keeps its fingers on the Washington pulse. The website also keeps you abreast of developments in your industry on a national level. You can also learn more at www.house.gov and www.senate.gov.

For more information, visit www.bomacal.org.

For more information, visit www.BOMA.org.

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10 Good Careers Opening in Commercial Real Estate There are good career opportunities in all aspects of the management of commercial buildings. And BOMA San Francisco’s Careers Committee and its Foundation are stepping up their efforts to attract, educate and mentor the next generation of building managers, as many seasoned professionals make way for young people and career-changers.

Warren Mead, chair of BOMA SF’s Careers in Real Estate Committee, says his panel is distributing literature to students at five Bay Area colleges and universities, appearing at career fairs, speaking before groups and disseminating Warren Mead and other BOMA careers committee BOMA’s careers film. The panel is also working with BOMA’s members participate in many Bay Area career fairs.

Young Professionals Committee and the BOMA SF Foundation to ensure that those interested in a CRE career are given opportunities to visit buildings and learn from industry professionals.

BOMA San Francisco was an early leader in promoting careers in the industry and—through its Foundation— in creating an alliance with San Francisco State University to offer a unique business administration degree with a CRE emphasis. San Francisco’s initiative is part of a national effort. Kristen Apple-Dunne, vice-chair of BOMA International’s Careers in Real Estate Task Force and president of BOMA/Orange County says lack of awareness is a major problem. She says many students want to be on the leasing and development side, as it seems more glamorous, but it’s very cyclical and it is not always a good fit. “Property management is a more stable career path,” she says.

BOMA San Francisco hosts monthly gatherings for students to learn about industry career opportunities.

These events include representatives of many aspects of the industry: property management, leasing, finance, asset management, construction and engineering. “Nobody else is going to solve our talent deficit for us,” says Marc Intermaggio, executive vice president of BOMA SF. “Our whole industry needs to get together under one umbrella,” he recently told The BOMA Magazine. Prospects can also get a comprehensive picture of what a career in property management is like by visiting www.bomasf.org and clicking the “Career Center” bar or by emailing careers@boma.org.

Progress Report:

Moved in 18 months from vision to implementing strategy as a 501c3 charitable foundation Developed a strong partnership with San Francisco State University to align industry goals

with the undergraduate curriculum at SFSU Co-created three new courses with SFSU and established the BS in Business with Concentration in Finance and Emphasis in Commercial Real Estate program Received more than $110,000 in donations from four foundations, 50-plus principal members (buildings), more than 30 associate members (service firms) and more than 22 individuals Enlisted industry veteran Jim Arce to be lead teacher for one of our new classes and engaged other members to guest-lecture, including Sandra Boyle (Cushman & Wakefield) and David Hayes (Skyline Construction) Hired a consultant to develop our fundraising program Next goal: Ramping up our fundraising to provide scholarship support to students and to create additional courses to further strengthen the program.

BOMA SF Foundation

11 BOMA SF Recognizes Our 2012 Members of the Year

At our Annual Membership Luncheon last fall, BOMA San Francisco recognized our Principal and Associate Members of the Year for 2012.

Congratulations to: Jeff Palmer, Able Engineering, Associate Member of the Year; Danny Murtagh, Boston Properties, Principal Member of the Year; and Sandra Boyle, Cushman & Wakefield, Principal Member of the Year.

Above: Jeff Palmer, Steve Ring, Danny Murtagh (left to right).

Right: Steve Ring and Sandra Boyle.

The Best Way to Reach Your Target Audiences?

Telling customer prospects how your company’s services or products benefit them—using statistics, photos, graphics, charts and testimonials—is the most effective way to increase sales.

How much money did your product save building operators? Were tenants more productive in their space after your tenant-improvement project? Can you improve service delivery? Are your innovations producing healthier buildings? You can describe benefits like this in

display ads. You can also demonstrate the value you deliver by purchasing a special sponsored report in a BOMA publication that your target audiences are likely to read. Sponsored reports in BOMA Views are very persuasive.

To Feature Your Company And you can use Contact Ellen Eason them in your own 415.596.9466 marketing and ellen@easoncom.com promotion—both print and online.

Green product or service providers: Reach your prospects in a special Sustainability Report that will be presented at the BOMA Bay Area EARTH Awards event on May 16. As a bonus, the report will also be included in the Spring issue of BOMA Views. There are opportunities for both display ads and sponsored reports. Email ellen@easoncom.com to learn more.

12 NRG Energy Center Can Ensure That Your Building Meets New Air Quality Regulation Since January the Bay Area Air Quality Management District (BAAQMD) requires total compliance with lower emissions standards for boilers. NRG can assist building owners and managers with options to ensure compliance.

If you plan to replace or retrofit your existing boiler to meet the regulation, we can offer another alternative that will save your team time and capital expense.

(For emission limit details, consult the chart below.)

NRG Energy Center operates a district energy plant in San Francisco that produces compliant thermal energy that serves the commercial real estate industry with space heating and domestic hot water. The energy is produced reliably, efficiently and with lower green house gas emissions than in-house boiler plants.

The BAAQMD Regulation 9, Rule 7 is summarized as follows: No person shall operate a boiler, steam generator or process heater with a rated heat input listed in the table below that exceeds the corresponding NOx and CO emission limit.

Emission Limit

Rated Heat Input (million Btu/hr)

307.1 307.2 307.3 307.4

>2 to 5 >5 to <10 10 to <20 20 or more, load-following unit

NOx Limit (ppmv) 30 15 15 15

CO Limit (ppmv) 400 400 400 400

The power to change life.

The energy to make it happen.™

NRG can determine the best solution for your building’s boilers and advise you on compliance issues.

NRG Solutions Reduce Expenses and Future Compliance Requirements We can provide several options to reduce your operating expense and future compliance requirements. The options range from a full-load steam supply, a partial-load steam supply to comply with the low-fuel exemption, or a combined heat and power solution for onsite generation.

NRG is a leader in providing clean energy solutions.

In January NRG Energy, the San Francisco 49ers and the Santa Clara Stadium Authority announced an agreement to bring sustainable energy to the new 49ers stadium.

Through this unique partnership, NRG will help the new facility become the first professional football stadium to open with LEED certification.

To learn more, contact: Dwain Botelho • Phone: 415.644.9666 Email: Dwain.Botelho@nrgenergy.com www.nrgthermal.com/sanfrancisco.htm

13 Mixing & Mingling

Holiday Party Set in the elegant Julia Morgan Ballroom, the annual Holiday Party was a festive occasion. Generous BOMA members once again contributed an abundance of toys to the San Francisco Fire Departmentâ&#x20AC;&#x2122;s toy program.

Un-Oktoberfest BOMA members and their guests gathered for the alwayspopular Un-Oktoberfest on a brisk evening in November.

Top photo: Melody Thebeau, LBA Realty; Rick Klagstad, Cushman & Wakefield; Mike Cashion, CAC Real Estate Management Co., Inc. Middle left: Leigh Renard and Brooke Barnecut, Kilroy Realty, and Jon Maystrik, Arborwell; Middle right: Caroline Grafft, Jones Lang LaSalle and Paul Grafft, Shorenstein Realty Services.

Lower photo: Paige Salazar, Christine Carreiro, Bob Phillips and Mike Miles, Terwilliger Management.

Top photo: Gerald Mularkey, GSA; Minna Le, PM Realty Group; Kathy Mattes, CBRE Middle left: Blake Peterson, Langley Investment Properties and Meade Boutwell, CBRE. Middle right: Tree with toy donations Lower photo: Monique Scott, Cushman & Wakefield; Sandra Dono and Jennifer Grunebach, RiverRock Real Estate Group; and Derek Gaskin, Universal Protection Service.

14 In Memoriam... Remembering BOMA Members Gary Faleschini Gary Faleschini, an active and longtime member of BOMAs in San Francisco, Oakland, and Silicon Valley, passed away November 6, 2012 after a long and courageous battle with cancer. Gary served on BOMA San Francisco’s Associates Committee, where he played a pivotal role, creating fun and meaningful social events that helped members make new acquaintances and establish rewarding friendships that transcended strictly business relationships. Gary also served as a two-term member of BOMA San Francisco’s Board of Directors, was co-vice chair of the Association’s Centennial Planning Committee, and was a founding director of the BOMA San Francisco Foundation. Gary also served on BOMA Oakland/East Bay’s board of directors and was Treasurer of its Associates Committee. At BOMA Silicon Valley, Gary was an ardent supporter of the Association’s events and programs, particularly the annual Sherie Dunn Memorial Golf Tournament.

Gary was held in high esteem for his honesty, integrity and fairness by friends and business associates alike.

His collegiality and professionalism were greatly admired by all who knew or did business with him.

Gary is survived by his wife Denise and sons Paul and David, daughter-in-law Debbie, and granddaughter Audrey Jane. Part of Gary’s legacy is the fact that both of his sons are in the industry and participate in BOMA San Francisco. Paul is Assistant Chief Engineer at 345 California Center for Able Engineering, and Dave is an Administrative Assistant at Market Center/575 Market Street for Manulife Financial.

Donations in Gary’s name are welcome to Stand Up To Cancer, where 100% of donations go to fund research and patient support. To make a donation in Gary’s memory, please go to http://constellation.standup2cancer.org. At the home page, go to “Add to an Existing Star,” then at the Constellation page, type in Gary Faleschini. At his Star Page you’ll be prompted to write a message and then to donate.

Frank Fudem Frank Fudem, senior vice president and partner with Cassidy Turley, passed away January 26 of lung cancer.

Frank was a long-serving member of the board of directors of BOMA San Francisco’s Political Action Committee (BOMA-SF-PAC). He understood the nuanced world of local politics, and his perspective and judgment were great assets to BOMA-SF-PAC. Frank’s thoughtful input favorably impacted BOMA’s public policy successes.

In a BOMA Views profile of Frank last Spring, he commended BOMA’s public policy leadership for its efforts to keep San Francisco a good place to do business.

Frank was exclusively a tenant rep broker and held longstanding relationships with many clients. He often helped explain to elected officials how BOMA’s positions ultimately benefitted tenants, many of whom are small businesses.

Frank recently observed that “The city where the fortune cookie, cable car, slot machine and television

were all invented continues to be a hub of innovation and creativity. San Francisco is a magnet for smart, creative people, and consequently, the companies that want to hire them.”

Frank was one of those smart, creative people, and we were fortunate to have counted him amongst our association’s leaders.

Frank is survived by his wife Nancy and son Jonathan.

We’ll greatly miss Frank’s counsel, and will remember him fondly.

15 ✔ Your BOMA To-Do List ✔ Enter—or support—BOMA's EARTH AWARDS con-

test and demonstrate your commitment to a more sustainable work environment. For info: www.bomasf.org/earth_awards_2012.vp.html ✔ Participate in the BOMA Experience Exchange

Report and benchmark your building’s operating income and expense. For more info: www.boma.org/Resources/benchmarking/Pages/default.aspx

✔ Become a BOMA 360 building and show your

owners, tenants and the community your leadership in best-practices building operations.

For more info: www.boma.org/getinvolved/boma360/pages/default2.aspx

✔ Register now for BOMA International's Every

Building Conference & Expo, June 23-26, in San Diego. For more info: www.bomaconvention.org

Challenges (Continued from page 1) receipts business tax structure.

“It was BOMA that first suggested a longer phasein of the new tax structure and lobbied hard to get the best rate possible for our industry. BOMA also was emphatic that there should be no increase in the real property transfer tax rates. We also convinced the mayor to work toward compromises on both the gross receipts tax and housing trust fund initiatives,” says Cleaveland. Recently, BOMA’s robust public affairs efforts had input in crafting the new bicycle parking ordinance, the local ADA notification ordinance in small first-floor leases and the new signage requirements for Privately Owned Publicly Open Spaces.

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The Last Word: Marc Intermaggio Growth of Tech Lifts All Boats With ignorance of fundamental economics, there are people in San Francisco who criticize the recent expansive growth of high-tech jobs here, saying that an influx of wellpaid workers drives up the cost of housing, restaurant meals, entertainment, etc. People I would call “regressives” oppose policies that attract technology companies, as well as the renovation and new construction occurring to accommodate their employees’ offices and homes. Do they want the abundant jobs and ancillary revenues these firms generate flowing to Texas, Massachusetts, or elsewhere instead of benefiting San Francisco?

Cushman & Wakefield reports that more than 11,200 tech jobs were created in San Francisco over the past two years. The net macroeconomic impact of losing such jobs to other regions would stunt our City’s overall growth, retard revenue collection for needed social and municipal services, and cost a tremendous number of non-tech jobs.

We want to keep our status as America’s top locale for entrepreneurs and start-ups, according to the latest StartUp Ecosystem Report.

UC Berkeley labor economist Enrico Moretti estimated in a recent San Francisco Chronicle article that for every high-tech worker that comes to an area, five other jobs are created. “My research shows that attracting a scientist or a software engineer to a city triggers a multiplier effect, increasing employment and salaries for those who provide local services,” he said. His study of 320 cities shows that good-paying innovation jobs produce a greater multiplier effect than other types of employment.

It’s hard to imagine any economic sector that wouldn’t benefit from an influx of motivated and talented people.

Commercial real estate happens to be but one beneficiary.

For any large office project such as the Transbay Terminal, there are at least 50 categories of different types of businesses that provide products and services to operate and maintain such buildings. Many are very small businesses that include unionized, blue-collar companies. There are also sandwich shops, drug stores, hardware stores, retail merchants, etc. that benefit from new business formation.

Most new commerce should be seen as good, whether it’s tech, life science, manufacturing, education, or professional services.

Threats to Tech Growth in the Bay Area The Bay Area may be the most innovative region on the planet. That fact has surely incurred the envy of other innovation centers around the country and the world. Many offer powerful inducements to draw companies, born here, to relocate to their areas. They surely know the value of a tech job. We must be ever vigilant to keep economic-development specialists from poaching away our employers.

We certainly don’t need misguided people within our own city helping to push innovative companies out of the Bay Area and California. Do those economic growth obstructionists want us to lose hundreds of millions of dollars needed to keep our area from being one of the most enjoyable places to live? Do they want to reduce the revenue and jobs of companies that provide services to innovative new firms?

Yours could be one of the five jobs Professor Moretti says might be lost if we fail to attract or secure the position of just one computer engineer, genetic scientist or Internet game developer. Think about that the next time you hear someone bemoaning San Francisco’s expanding technology and life sciences employment sector.

Marc Intermaggio, CAE, is the Executive Vice President of BOMA San Francisco.