News Type: Roundtable Weekly

Pandemic Relief Deal at Impasse as Election Nears

Posted on by Trey Jackson

Coronavirus

Policymakers signaled this week that pandemic relief negotiations remain at an impasse over federal aid to state and local governments and liability protection for employers – adding uncertainty to prospects for a deal before the election and diminishing chances for a legislative package before Nov. 3. 

  • House Speaker Nancy Pelosi (D-CA) yesterday said, “If we can resolve some of these things in the next few days, it will take a while to write the bill. We wouldn’t take less of a bill to get it sooner.” (CQ, Oct. 23)
  • President Trump today said Pelosi is delaying progress on a deal until after the election. “She wants to bail out poorly run Democrat states and that’s a problem … we don’t want to reward areas of our country who have not done a good job,” Trump said at the White House. (BGov, Oct. 23)
  • Treasury Secretary Mnuchin added today, “We’ve offered compromises. The speaker, on a number of issues, is still dug in. If she wants to compromise, there will be a deal.”
  • Pelosi said this morning on MSNBC that President Trump needs to convince reluctant Senate Republicans to support a possible deal with the White House. “The fact is that the president has been back and forth. But he has to talk to the Senate Republicans.” (Washington Post, Oct. 23)
  • The stalemate reflects a lack of legislative agreement in Congress on the cost of a COVID-19 stimulus package.” (CQ and BGov, Oct.23)
  • Senate Democrats this week voted 51-44 against a “skinny” relief bill of $500 million proposed by GOP lawmakers to fund the Paycheck Protection Program and additional unemployment relief.  That measures stands in contrast to a $2.2 trillion pandemic stimulus bill passed by the House of Representatives on Oct. 1 that is a scaled-down version of the $3.4 trillion HEROES Act passed by the House in May.  (Roundtable Weekly, Oct. 16)
  • Senate Appropriations Committee Chairman Richard Shelby (R-AL) said yesterday he has doubts a stimulus package could be agreed to soon. “I think it’s about two minutes to midnight, and we’re not going to pass anything until we see the particulars. There could always be a miracle, but there’s not many around here.”
  • It is possible that some COVID-19 aid measures could be added to must-pass legislation after the election during the “lame-duck” congressional session, when lawmakers will face a Dec. 11 government funding deadline or risk a shutdown. (Washington Post, Oct. 23)

Action on a comprehensive pandemic relief package may wait until early January after the elections – even though many temporary financial safety net programs are set to expire Dec. 31. (Marketwatch, Oct 21)

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Main Street Lending Program’s Restrictive Terms Prevent Full Access by Impacted CRE Sectors

Posted on by Trey Jackson

The Federal Reserve in Washington, DC

The Federal Reserve yesterday released its Summary of Commentary on Current Economic Conditions, showing that “commercial real estate conditions continued to deteriorate in many Districts.” There are twelve federal reserve geographic districts that gather information for the report, which is released eight times per year. 

  • The Fed report, also known as The Beige Book, adds that CRE market exceptions are the warehouse and industrial sectors, “where construction and leasing activity remained steady.”
  • The economic turbulence inflicted by the pandemic continues to damage CRE sectors such as retail and hotels, according to an Oct. 18 article in Politico. Mike Flood, senior vice president of commercial and multifamily policy at the Mortgage Bankers Association, stated, “What’s at risk here is both the ability for people to stay in their apartments and the ability for people to go to their jobs. So unless there’s a stimulus, there’s a lot less to go back to once we get back to normal times.” (Politico, “The next economic crisis: Empty retail space”)
  • The CRS report states, “Members of Congress have called on the U.S. Treasury and the Federal Reserve to open liquidity facilities to CRE and CMBS markets.”

The MSLP & CRE

Main Street Lending Program - Federal Reserve System

The New York Times and Washington Post published articles this week on the disappointing results shown to date by the Federal Reserve’s federal lending facilities, including its Main Street Lending Program (MSLP).

  • The Oct. 21 Times article reports that of the $454 billion Congress authorized in March for the Treasury Department to support various Fed emergency lending programs, $195 billion has been allocated so far – and only $20 billion in loans have been distributed.
  • The Oct. 19 Post article reports that of the $75 billion dedicated to support the Fed’s MSLP, only $3 billion has been loaned to date. According to the Post, an ongoing obstacle to making the MSLP more effective is whether the Fed and Treasury can agree on a new set of rules to significantly expand the reach of the program.
  • A broad coalition of national hotel executives on Oct 15 urged President Trump to take action by making immediate modifications to the MSLP that would increase participation in the program and help thousands of businesses crippled by the pandemic.
  • “We strongly urge you to use your executive authority to direct the Treasury to encourage the Federal Reserve to amend and expand the Main Street Lending Program … to support struggling businesses, stem the impending wave of foreclosures, and save millions of jobs to ensure the health of the entire American economy,” the letter states.
  • The hotel coalition emphasized that overly restrictive terms imposed by the MSLP continues to prevent the hardest hit businesses it was intended to support from accessing the program. “To date, only a small fraction of $600 billion in available loans have been utilized while the remaining funds – which are so desperately needed by industries like ours – sit idle and go unused,” according to the letter.
  • Real Estate Roundtable President and CEO Jeffrey DeBoer testified about the MSLP – and how to improve access to Federal Reserve credit facilities for businesses such as manufacturing, retail, restaurants, real estate owners, and other asset-based borrowers – on Sept. 9 before the Senate Banking, Housing and Urban Affairs Committee. (Roundtable Weekly, Sept. 11)
  • The Main Street program is not working, DeBoer testified, because there is little incentive for participating banks to make the loans – and the program’s eligibility, affiliation and underwriting rules are not designed to meet the needs of the businesses in need. (Video of DeBoer’s Testimony and Q&A with Senators)
  • “The result: countless mid-sized retail businesses, restaurants, hotels, commercial and multifamily building owners are moving closer to shutting their doors forever,” DeBoer stated. (Roundtable Oral Comments and written statement)
  • DeBoer added, “The recommendations that I have made on the Main Street Lending Program … really require no additional funds from the federal government. They are administrative. They could be done tomorrow by the Treasury and the Fed if they wanted to.” (Roundtable Weekly, Sept. 11)

The Roundtable continues to work with its national real estate trade partners, membership and other stakeholders to develop effective recommendations for policymakers to improve the MSLP, as well as identify alternative strategies to bolster CRE sectors and other industries struggling with the pandemic’s ongoing economic impact.

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Pandemic Relief Package Compromise Uncertain as Senate Republicans Oppose Cost of Democrats’ Plan; Trump Willing to Press for Deal if Agreement Reached

Posted on by Trey Jackson

Capitol Building in Washington, DC side view

President Trump will urge Senate Republicans to approve a pandemic relief deal if an agreement can be reached soon with Democrats, according to Treasury Secretary Steven Mnuchin. That message was relayed by Mnunchin to House Speaker Nancy Pelosi (D-CA) this week during stimulus negotiations as Senate Majority Leader Mitch McConnell (R-KY) repeated Republican opposition to the latest proposals. (The Hill, Oct. 15 and BGov, Oct. 16)

  • Last month, Senate Republicans attempted to advance a “skinny” COVID-19 aid bill for approximately $500 billion that was blocked by Democrats. (Axios, Sept. 10)
  • The House of Representatives subsequently passed a $2.2 trillion relief bill that was a scaled-down version of their $3.4 trillion HEROES Act passed in May. (NBC News , Oct. 1)
  • Recent discussions between Pelosi and Mnuchin have circled around a possible deal that would cost between $1.8 trillion and $2.2 trillion.

Senate GOP Opposition

Mitch-McConnell-credit-to-Gage-Skidmore-Flickr

  • Senate Majority Leader McConnell, above, commented on whether a compromise within that range is possible, stating, “I don’t think so … That’s where the administration’s willing to go. My members think what we laid out, a half a trillion dollars, highly targeted, is the best way to go.” (@ericawarner, Oct. 15 and photo credit: Gage Skidmore)
  • McConnell issued a statement this week, pledging to offer another bill in the $500 billion range. “When the full Senate returns on October 19th, our first order of business will be voting again on targeted relief,” McConnell said.
  • McConnell also commented this week, “You’re correct we’re in discussions with the secretary of the Treasury and the speaker about a higher amount. That’s not what I’m going to put on the floor.” (@ericawarner, Oct. 15)
  • Pelosi has met primarily with Mnuchin during recent weeks to negotiate cost and policy differences affecting a possible COVID-19 package.  Today marks the one-year anniversary since Pelosi and Trump have spoken to one another. (The Hill, Oct. 16)
  • Pelosi said in a letter to Democratic colleagues on Thursday night that although agreement with the White House had been reached for a national virus testing and tracing plan, key policy priorities remain unresolved, including aid for state and local governments and liability protections for businesses. (Washington Post, Oct. 15)
  • Even if a framework for a comprehensive agreement is reached among policymakers, developing and passing language for a multi-trillion dollar bill less than three weeks before a presidential election is highly uncertain.

Pelosi also suggested on Oct. 7 that if a deal cannot be reached soon, virus relief funding could be addressed during a post-election, lame-duck session of Congress.  She noted that pandemic relief could be added to a must-pass spending bill needed to keep the government open after Dec. 11, when current funding is scheduled to expire. (BGov, Oct. 7 and Roundtable Weekly, Oct. 2)

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EPA Launches Voluntary “ENERGY STAR Tenant Space” Program to Certify High Performance Leased Office Suites

Posted on by Trey Jackson

EnergyStar Tenant Space

The Environmental Protection Agency (EPA) on Oct. 13 launched its voluntary “ENERGY STAR Tenant Space” labeling program to recognize tenants who collaborate with their landlords on design and construction of high performance leased office spaces. (Download EPA’s Oct. 15 webinar slides – How to Apply for ENERGY STAR Tenant Space Recognition.)

  • EPA’s new certification for office tenants is now a permanent ENERGY STAR program offering, to complement the agency’s popular “whole building” label. The ENERGY STAR label is a key marketplace influence to signal energy efficient assets, impacting nearly 35,000 buildings and plants nationwide that represent more than 5 billion square feet of commercial space. (ENERGY STAR Facts and Stats)
  • “ENERGY STAR Tenant Space” recognition requires office tenants to estimate their suites’ energy use, separately meter their spaces, use efficient office equipment, and share energy usage data with their landlords. (See EPA’s guide, “How to Prepare for Tenant Space Recognition.”)
  • EPA will also offer access to a new online tool for estimating lighting energy usage within its commonly used Portfolio Manager benchmarking platform. Use of this new lighting assessment function, and requiring an office suite to meet a lighting efficiency “target,” will be a prerequisite for the voluntary Tenant Space label.
  • The Tenant Space label is currently available to office tenants. EPA explained to SPAC members that it intends to expand the program to provide recognition opportunities to retail and warehouse tenants in the coming months.
  • ENERGY STAR building ratings and the corollary Tenant Space program were part of a discussion held October 1 at The Real Estate Roundtable’s offices in Washington, D.C., between EPA Administrator Andrew Wheeler and Roundtable President and CEO Jeffrey DeBoer. 
  • In a video of the discussion, Wheeler stated he is a “strong” ENERGY STAR proponent and that the agency’s expansion of the label to cover tenant spaces was “the right thing to do.” Wheeler also emphasized these platforms must remain voluntary to encourage additional private-sector technological innovations in buildings and manufacturing. (See video at 12:40 and Roundtable Weekly, Oct. 2)

EPA’s tenant recognition efforts are authorized by the so-called “Tenant Star” law, passed by Congress in 2015 with The Roundtable’s strong backing. (Commercial Property Executive, May 4, 2015)

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Shifting Negotiations Aim for Uncertain Pandemic Relief Deal, Legislation Unlikely Before Election; Fed Chairman Warns Lack of Fiscal Support Risks ‘Tragic’ Consequences

Posted on by Trey Jackson

Negotiations about a pandemic relief package shifted dramatically this week in Washington, ranging from complete cancellation to industry-specific assistance to discussions reported today about a new $1.8 trillion White House proposal.  (Wall Street Journal and PoliticoPlaybook Oct. 9)

  • President Trump tweeted today, “Covid Relief Negotiations are moving along. Go Big!”
  • A framework for an agreement before the election is possible, yet the timeline for developing specific legislation and passing a broader package remains doubtful. 
  • Senate Majority Leader Mitch McConnell (R-KY) today called coronavirus negotiations “murky” and added, “I think the murkiness is a result of the proximity to the election, and everybody kind of trying to elbow for political advantage.  I’d like to see us rise above that … but I think that’s unlikely in the next three weeks.”  (The Hill, Oct. 9)
  • The Senate this week is focusing most of its attention on confirmation hearings for Supreme Court nominee Amy Coney Barrett, despite three GOP Senators having tested positive for COVID-19 and an additional three in quarantine.  (The Hill, Oct. 8)
  • Another challenge among GOP senators is attracting support for any pandemic relief package over $1 trillion. (Roundtable Weekly, Oct. 2)
  • White House support for a $1.8 trillion package reported today remains below the $ 2.2 trillion coronavirus relief bill passed last week by House Democrats.  Policy differences also remain on key areas such as liability protections for business, aid for state and local governments and the specific structure for additional federal unemployment benefits.  (Associated Press, Oct. 9)
  • House Speaker Nancy Pelosi (D-CA) on MSNBC today said, “You know, the devil and the angels are in the details. And so it—part of it is about money, and part of it is about policy,” she said.  (Wall Street Journal, Oct. 9)
  • Pelosi earlier in the week suggested that if no stimulus deal can be reached before the election, virus relief funding could be added to a must-pass spending bill needed to keep the government open after Dec. 11 during a post-election, lame-duck session of Congress.  (Roundtable Weekly, Oct. 2 and BGov, Oct. 7)
Fed Chair Jay Powell
  • Federal Reserve Chair Jerome Powell, above, on Tuesday encouraged Congress and the White House to pass greater fiscal support for the economy, households and businesses. 
  • Powell stated, “… a prolonged slowing in the pace of improvement over time could trigger typical recessionary dynamics, as weakness feeds on weakness. A long period of unnecessarily slow progress could continue to exacerbate existing disparities in our economy. That would be tragic, especially in light of our country’s progress on these issues in the years leading up to the pandemic.”  (Fed speech, Oct. 6)

Powell also warned that the economic expansion and recovery from the coronavirus is far from complete.  “Even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods,” he said.

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Roundtable Commends Aspects of Proposed Carried Interest Regulations While Recommending Further Clarifications and Improvements

Posted on by Trey Jackson

The Real Estate Roundtable on Oct. 5 submitted detailed comments to the Treasury Department and IRS on proposed regulations implementing the 3-year holding period requirement for carried interests to qualify for long-term capital gain treatment.  (Roundtable comment letter)

  • Treasury on July 31 released the proposed rules under IRS Section 1061 to address the specific conditions that apply to the 3-year holding period requirement passed by Congress in the Tax Cuts and Jobs Act (TCJA) of 2017.  (Roundtable Weekly, Aug. 7)
  • The Roundtable commended the agencies for a balanced approach on certain key issues addressed in regulations – yet recommended further clarifications and improvements to the proposed rules to retain the original intent of Congress.  
  • The Roundtable’s comments note that the IRS rules include a number of well-designed provisions that should help avoid unintended consequences when the 3-year holding period is implemented, including:

—  The 3-year requirement is limited to the gain from a sale or exchange of a capital asset – and excludes gain from property used in a trade business (Section 1231 gain). 

—  A useful “look-through” rule to help ensure REIT dividends paid to shareholders receive the same long-term gain treatment that would apply to assets owned individually or in partnership form.

—  A sensible exclusion to ensure a partner’s own capital contributions to the partnership are not subject to re-characterization under section 1061.

Recommendations for Additional Clarifications and Improvements

The Roundtable comment letter also recommends certain changes to the proposed regulations to bring the rules more in line with the legislative intent when Congress enacted section 1061.  The Roundtable recommendations include the following:

  • Provide a safe harbor to allow funds borrowed by a general partner to qualify as a capital interest in the partnership.  Investors frequently require a general partner to co-invest in the partnership to align the parties’ interests.  These co-investments often are financed with loans from the investors.  The proposed regulations would undermine the economics of these arrangements. The 3-year holding period would apply when an investment is made with funds borrowed from the other investors in the partnership.  The Roundtable recommends that the Treasury narrow the broad restriction on borrowed funds by creating a safe harbor for non-abusive situations.
  • Prevent improper acceleration of tax liability when a partnership interest is transferred in a nonrecognition transaction.  Section 1061(d) creates certain tax consequences for transfers of partnership interests to related parties.  The proposed regulations broadly interpret section 1061(d) to override other nonrecognition provisions in the tax code by requiring the inclusion of gross income as a result of such transfers.  The Roundtable recommends that Treasury narrow its current interpretation of the provision to avoid accelerating tax liability in the case of transfers of partnership interests to related parties in nonrecognition transactions.
  • Avoid casting too broad a net on partnerships covered by the 3-year holding period.  Congress limited section 1061 to partnership interests in businesses that raise or return capital on a regular, continuous, and substantial basis.  The proposed rules, however, largely disregard this prong of the test and could capture many real estate arrangements unintended by lawmakers, including joint ventures, operating partnerships, and others.  The Roundtable recommends that Treasury limit application of the provision to businesses that meet the statutory requirements. 

Roundtable President and CEO Jeffrey DeBoer concludes the letter by noting, “Congress . . . narrowly drafted section 1061 to apply to specific situations.  Our comments our aimed at preserving the drafters’ intent while avoiding unnecessary disruption to common, everyday real estate partnerships—small and large—throughout the country.”

The recommendations were developed by The Roundtable’s Tax Policy Advisory Committee (TPAC).

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Stopgap Funding To Keep Government Open Until Dec. 11; House Democrats Pass Revised COVID-19 Stimulus Bill as Pandemic Relief Negotiations Continue

Posted on by Trey Jackson

Capitol Dome Dusk

A stopgap measure to fund the government until Dec. 11 at current spending levels passed the Senate Wednesday and was signed by President Trump early Thursday morning, narrowly avoiding an Oct. 1 government shutdown before the election.  (Reuters, Sept. 30 and Bloomberg, Oct. 1)

  • The “Continuing Resolution,” which passed the House last week, includes short-term funding extensions (with no policy changes) for surface transportation funding, the National Flood Insurance Program, and the EB-5 Regional Center Program.  (Rountable Weekly, Sept. 25, Text of H.R. 8337 and Section-by-section summary of the legislation)
  • As the government operations funding bill advanced this week, House Speaker Nancy Pelosi (D-CA) met face-to-face with Treasury Secretary Steven Mnuchin about an additional COVID-19 relief package for the first time since August.
  • Disagreements between Democrats and Republicans continued over the cost of a relief package, leading House Democrats Thursday night to pass a largely symbolic $2.2 trillion COVID-19 relief bill by a narrow 214-207 vote.  Eighteen Democrats voted against the measure, which is a scaled-down version of the $3 trillion HEROES Act passed by the House in May. The Senate is unlikely to consider the package.  (Forbes and NBC News, Oct. 1)

President Donald Trump comments in WH driveway

  • President Trump’s positive test for the coronavirus today adds great uncertainty to the political landscape and “changes the dynamic” of the pandemic relief talks, according to Pelosi.  “We always have to find a path, that is our responsibility to do so, and I believe that we will,” she said.  (Washington Post, Oct 2)
  • The White House has seemed willing to engage House Democrats in hopes of a deal, yet attracting enough support from Senate Republicans to pass another relief package over $1 trillion is a significant challenge. 
  • Senate Finance Committee Chairman Chuck Grassley (R-IA) yesterday said, “There’s a real revulsion among Republicans to going above $1 trillion and even $1trillion is real difficult.”  (CNN, Sept. 30)
  • Another issue in the negotiations remains Senate Majority Leader Mitch McConnell’s (R-KY) insistence on a liability shield for businesses that are concerned about unlimited COVID-related lawsuits after reopening.  McConnell said yesterday, “I’d like to see another rescue package. We’ve been trying for months to get there. I wish them well.”  (AP, Oct. 1)

House lawmakers will depart Washington today until after the election – unless they are summoned back to vote on a COVID-19 legislative package deal.  The Senate is scheduled to remain in session next week as confirmation hearings begin Oct. 12 for Judge Amy Coney Barrett, the President’s nominee for the US Supreme Court.

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Roundtable Interview with US-EPA Administrator Covers ENERGY STAR, Coronavirus Guidance, and Brownfields Redevelopment in Opportunity Zones

Posted on by Trey Jackson

Jeffrey DeBoer and Andrew Wheeler, EPA Administrator

U.S. Environmental Protection Agency (EPA) Administrator, Andrew Wheeler, above right, met yesterday with Real Estate Roundtable President and CEO, Jeffrey D. DeBoer, above left, to discuss a wide range of energy and environmental policy matters that impact the U.S. real estate sector.  (Video on Roundtable’s YouTube page)

DeBoer interviewed Wheeler at The Roundtable’s offices in Washington, D.C., as part of a series of “listening sessions” between EPA and stakeholders.  Their discussion covered:

  • EPA’s development of a standardized process to systematically calculate the economic costs and environmental benefits of its regulatory programs (video at 3:29);
  • A “science transparency” regulation that makes the scientific studies relied upon by EPA available to the public (video at 4:56);
  • Wheeler’s implementation of a “lean management” system to streamline the agency’s procedures for project permitting and environmental reviews (video at 8:15);

Energy Star Tenant Space logo

  • ENERGY STAR building ratings, and EPA’s corollary Tenant Space program that will launch on October 13.  Wheeler stated he is a “strong” ENERGY STAR proponent, expanding the program to cover tenant spaces was “the right thing to do” – and that these platforms must remain voluntary to spur technological innovations deployed in buildings and manufacturing. ( video at 12:40);
  • EPA’s development of COVID-related guidance to help the economy re-open, such as updated Portfolio Manager benchmarking instructions to account for recent changes in building occupancy and hours of operations, EPA’s approvals of cleaning and disinfecting products to combat COVID-19, and information on flushing pipes and plumbing systems to maintain indoor water quality (see, e.g., Roundtable Weekly, July 31, 2020 and May 22, 2020) (video at 15:45)
  • Public-private partnerships to re-develop Brownfield sites in economically-distressed “opportunity zones” created under the 2017 Tax Cuts and Jobs Act.  Wheeler remarked that every dollar EPA invests in a Brownfields clean-up leverages up to an estimated $20 dollars in private sector investment capital for surrounding low-income neighborhoods. ( video at 18:40)
  • Also yesterday, EPA career staff spoke to The Roundtable’s Sustainability Policy Advisory Committee (SPAC) regarding the imminent launch of the ENERGY STAR Tenant Space program on October 13.  Opportunities to certify high performance design and construction of leased office spaces will become a permanent EPA offering, and stem from the so-called “Tenant Star” law Congress passed in 2015 with the Roundtable’s strong backing.  (Commercial Property Executive, May 4, 2015)

The Roundtable participates in EPA’s Smart Sectors Program, the agency’s platform to collaborate with industry sectors to protect the environment and public health though sensible, cost-effective regulatory and incentive programs.  (EPA news release, Oct. 3, 2017)

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Roundtable Board of Directors Approves RER Leadership; Establishes Equity, Diversity and Inclusion Committee

Posted on by Trey Jackson

Deb Cafaro and John Fish remote RER meeting

The Real Estate Roundtable’s 24-member Board of Directors has approved John F. Fish (CEO & Chairman, Suffolk), above right, as the organization’s Chair-Elect, to begin his term as Chairman of the Roundtable in mid-2021.  The Board also approved, effective immediately, Jodie W. McLean (CEO, Edens) as its Secretary and Jeff T. Blau (CEO, Related Companies) as the Chair of the organization’s newly established Equity, Diversity and Inclusion (ED&I) Committee.

  • Chair-Elect Fish will succeed current Roundtable Chair Debra A. Cafaro (Chairman and Chief Executive Officer, Ventas, Inc.), above left, whose term expires July 1, 2021.  “The Board of Directors of The Real Estate Roundtable is excited to announce John Fish as our Chair-Elect and Jodie McLean as our Secretary,” said Cafaro.  “John has been an active Board member and has played a key role in developing our policy agenda.  He is active on a bipartisan basis with policymakers, and his experiences and accomplishments across business, government and philanthropy give John a broad perspective that will benefit the Roundtable and our members.  John’s emphasis on labor force issues, infrastructure, and the need to level the educational and economic opportunities for all Americans are particularly relevant as The Roundtable develops and advocates fact-based policies that create jobs and inclusive economic growth,” Cafaro added.
  • Mr. Fish stated, “I am honored to have the opportunity to serve as Roundtable Chair-Elect, work with the talented team and follow Debra Cafaro’s impressive record of policy accomplishments in Washington.  I have seen the effectiveness of the organization in advocating shared industry concerns to lawmakers and regulators, and strongly believe it is essential for The Real Estate Roundtable to continue its engagement at all levels of policy-making as the nation comes together to address new economic, societal and health challenges.”  (Roundtable news release, Sept. 30 and Roundtable video)About Fish and McLean

    EDENS CEO Jodie McLean

  • Mr. Fish is the Chairman and CEO of Suffolk, which is a national real estate and construction enterprise that invests, innovates and builds, providing value throughout the entire building lifecycle. Suffolk is one of the largest builders and privately held companies in the country, with main offices in the Northeast, New York, Florida, Texas and California. The company services clients in the aviation/transportation, science and technology, mission critical, commercial, education, healthcare, gaming and government sectors.  Mr. Fish is a former Chair of the Federal Reserve Board of Boston, current Chair of Brigham and Women’s Hospital and member of the Mass General Brigham’s Executive Committee, and is serving his second term as Chairman of the Board of Trustees at Boston College. 
  • Jodie W. McLean, above, is Chief Executive Officer of EDENS, one of the nation’s leading private owners, operators and developers of retail real estate.  She is responsible for EDENS’ strategy to move the portfolio to major urban centers, creating a portfolio of assets that are the center of community life.  Ms. McLean currently serves on the Board of Directors of the Federal Reserve Bank of Richmond.  She also serves on the boards of Cushman & Wakefield and Extended Stay America, as well as boards of several other institutions and charities. Equity, Diversity and Inclusion Commitment of RER

    Debra Cafaro, Ventas and Jeff Blau, Related

  • On his appointment as the Chair of the Real Estate Roundtable’s newly created Equity, Diversity and Inclusion Committee, Mr. Blau, above right,  said, “As leaders, it is our obligation to enact fundamental change. I am honored to chair the ED&I committee and am eager to listen and be guided by diverse voices and perspectives as we work together to promote an industry that is reflective of the society we live in.” 

Roundtable Present and CEO, Jeffrey D. DeBoer commented, “I am delighted with these Board leadership decisions and, in particular, I look forward to implementing recommendations from our ED&I Committee that will help advance equal economic opportunities for all.”  (Roundtable news release, Sept. 30) 

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Powell and Mnuchin Urge More Congressional Pandemic Fiscal Relief; Fed Releases FAQs on Main Street Lending Program; Democrats Considering New COVID-19 Package

Posted on by Trey Jackson

Treasury Secretary Steven Mnuchin and Federal Reserve Chairman Jay Powell

Federal Reserve Chairman Jay Powell (right) and Treasury Secretary Steven Mnuchin (left) testified before House and Senate committees this week to discuss the government’s pandemic response.  Powell offered no option for administrative changes to the Main Street Lending Program (MSLP) credit lending facility while Mnuchin strongly urged Congress to repurpose unused COVID-19 relief funds in another legislative pandemic aid package.  (BGov, Sept. 23 and Reuters, Sept. 24)

  • Recommendations to improve access to the MSLP were a focus of recent testimony by Roundtable President and CEO’s Jeffrey DeBoer on behalf of the industry before the Senate Banking Committee.  (Roundtable Weekly, Sept. 11)
  • Powell responded about the MSLP that the Fed has done “… basically all of the things we can think of that are clear gains (but) we are looking to do more.”  He added, “… but I would say the things that we have done have been really to widen the appeal of that program and its effectiveness … there is nothing major that we see now that would be consistent with opening it up…”  (BGov and CQ Committee transcript, Sept. 23)

Fed Updates MSLP FAQs

Federal Reserve Building DC

The Fed on Sept. 18 issued new guidance to banks for the MSLP in an attempt to encourage increased lending.  The central bank’s revised “Frequently Asked Questions” for the MSLP emphasize that lender underwriting should look back to the borrower’s pre-pandemic condition and forward to their post-pandemic prospects. The FAQs also seek to clarify the Board and Department of Treasury’s expectations regarding lender underwriting.  (Fed news release)

  • In a news conference announcing the FAQs, Powell said, “I would say it may be that further support for commercial real estate will require further action for Congress – from Congress.”

     

  • During his three committee appearances this week, Powell consistently emphasized that more fiscal relief is needed from Congress to sustain an economic recovery from the pandemic.  Mnuchin struck a similar theme in his two committee appearances while urging Congress to pass a new package that would reuse unused funds from previous COVID-19 relief authorizations for urgent needs.

     

  • Mnuchin told the Senate Banking Committee this week that up to $380 billion could be repurposed.  “It would not cost an extra penny,” Mnuchin said.  (Reuters, Sept 24)

     

  • During the Sept. 24 hearing, Senate Banking Committee Chairman Mike Crapo (R-ID) in his opening statement referred to the committee’s earlier hearing on Sept. 9 on “The Status of the Federal Reserve Emergency Lending Facilities.”

    Real Estate Roundtable President and CEO Jeffrey DeBoer

  • Chairman Crapo said, “Jeff DeBoer (above) President  and CEO of the Real Estate Roundtable painted a bleak picture of the condition of the commercial real estate market. He said, ‘It is impacting their ability to meet their debt service obligations which increases pressure on financial institutions, pension fund investors and others.’  And he said, ‘It is pushing property values down to the detriment of local governments. It is causing much stress to pools for commercial mortgage backed securities and it is threatening to result in countless commercial property foreclosures. The situation must be addressed.’”  (Crapo’s Opening Statement, Sept. 24 and DeBoer’s testimony and Q&A, Sept. 9)
  • Crapo added, “Negotiating toward a realistic package that can actually get passed and signed into law would best serve the American people during this difficult time.”

     

  • Mnuchin told the Senate Committee that he and House Speaker Nancy Pelosi (D-CA) have “agreed to continue to have discussions.” (Wall Street Journal, Sept. 24)

Democrats Considering New Aid Proposal

House Speaker Nancy Pelosi (D-CA)

Pelosi has directed her committee chairs this week to assemble a scaled back coronavirus relief package of approximately $2.4 trillion that could be used for as a basis for potential discussions with the White House and Senate Republicans. (Politico, BGov, and The Hill, Sept 24)

  • Negotiations over a COVID-19 relief bill between Democrats and Republicans broke down in August over a nearly $1 trillion gulf between their proposals. 
  • The House passed a $3.4 trillion package in May (H.R. 6800), which is more than the $1.5 trillion President Trump indicated he would support and much larger than a $650 billion package supported by Senate Republicans.
  • House Democrats could vote on a new plan next week, which would appease lawmakers from battleground election states anxious to pass a pandemic aid package before adjourning to campaign – despite chances that a Democrat-only plan is unlikely to attract Republican support.

Speaker Pelosi said last week that the House would remain in session until an agreement is reached, and House Majority Leader Steny Hoyer (D-MD) clarified that Representatives would be on call to return to the Capitol on short notice in the event a deal is reached. (BGov, Sept. 15)

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