Sustainability has evolved from a passing trend or niche preference into an undeniable, growing driver of the real estate market. This is particularly true as millennials comprise an increasing proportion of the workforce, home-buying population, and individuals influencing the future of real estate development in the United States.
On September 17, 2019, the U.S. Department of Treasury issued two new proposed rules for the Committee on Foreign Investment in the United States (CFIUS) implementing the Foreign Investment Risk Review Modernization Act (FIRRMA). Of particular interest to readers of this blog was the second of the proposed rules, which addressed FIRRMA’s real estate-related expansion of CFIUS jurisdiction.
Over on Global Trade & Sanctions Law, colleagues Christopher R. Wall, Nancy A. Fischer, Aaron R. Hutman, Matthew R. Rabinowitz, Jorge Vera and Roya Motazedi examine the new regulations and how FIRRMA expands CFIUS’ jurisdiction to include certain types of real estate transactions.
Even as tax incentives provided by the opportunity zone program in 2017’s Tax Cuts and Jobs Act offer the possibility of significant tax benefits when investing gains in Qualified Opportunity Funds (QOFs), such funds must comply with a wide variety of significant federal and state securities laws and regulations. In “Securities Law Guidance for Qualified Opportunity Funds (QOFs),” colleagues Ellen C. Grady and Robert B. Robbins discuss the joint statement recently issued by the Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) summarizing federal and state securities law considerations that may be applicable to QOFs.
The availability of broadband internet service in multiple tenant environments (MTE) is always a bit of a balancing act between promoting competitive access to tenants and preserving adequate incentives for the initial service providers to deploy, maintain, and upgrade infrastructure. In “FCC Seeks Comment on Accelerating Broadband Deployment in Multi-Tenant Buildings and Preempts Wire-Sharing Requirement in San Francisco Ordinance,” colleague Glenn S. Richards examines the FCC’s recent Notice of Proposed Rulemaking (NPRM) and Declaratory Ruling on the subject.
With estimates that sea levels could rise two to six feet over the next century, states are incorporating adaptation and coastal resiliency into their planning and permitting regimes. In “INSIGHT: States Shift From Seawalls to Living Shorelines,” colleagues Eric Moorman and Ashleigh Acevedo examine the different strategies being considered and deployed by coastal states.
On April 17, 2019, the IRS issued its much anticipated second tranche of guidance (the “2019 Proposed Regulations”) on the qualified opportunity zone (QOZ) program established by the 2017 Tax Cuts and Jobs Act. The 2019 Proposed Regulations discuss a number of issues that were left unaddressed by the initial set of proposed regulations issued by the IRS in October of 2018 (the “Initial Proposed Regulations”) and provide further clarity on some issues that were touched upon in those initial regulations. This is welcome news to eager investors interested in taking advantage of the benefits of investing their capital gains in qualified opportunity funds (QOFs), particularly those wishing to deploy capital in businesses outside the realm of traditional real estate development. While we have not attempted to describe every aspect of the 2019 Proposed Regulations, a summary of certain key provisions is set forth below.
LODGING Magazine recently published an article by Pillsbury attorney Brian Finch titled Modernizing Hotel Security Protocols To Protect Against 21st Century Threats. The article discusses the recent bombings and shootings at high-profile hotels in the U.S. and abroad, and how the hospitality industry can benefit from risk management tools available under the Support Anti-Terrorism by Fostering Effective Technologies Act of 2002 (the SAFETY Act), enacted as part of the Homeland Security Act of 2002, Public Law 107-296.
Most companies have been involved in a situation where they want to end their relationship with another company, or with an employee, and to permanently terminate their mutual obligations (e.g., a settlement agreement resolving end-of-project litigation). In 1992, a California Court of Appeals, in Winet v. Price, confirmed that upholding general releases is “in harmony… with a beneficial principle of contract law: that general releases can be so constructed as to be completely enforceable.”
On January 31, an en banc panel of the U.S. Court of Appeals for the Ninth Circuit issued a unanimous ruling in a commercial speech case, American Beverage Assoc., et al., v. City and County of San Francisco. The Panel held that the lower court’s denial of a preliminary injunction requested by the plaintiffs must be reversed, and the matter remanded to the lower court because the plaintiffs were likely to succeed on the merits of their claim that a 2015 San Francisco city ordinance requiring specified health warnings on a host of sugar-sweetened drinks (“WARNING: Drinking beverages with added sugars(s) contributes to obesity, diabetes, and tooth decay. This is a message from the City and County of San Francisco.”) violated their First Amendment rights.
In September 2017, the California legislature and Gov. Jerry Brown enacted Senate Bill 35 (SB 35) to streamline housing development in cities that are not meeting their housing needs. SB 35 is aimed at easing California’s severe housing shortage and affordability crisis but was highly controversial due to concerns about loss of local control over housing development. In the year since SB 35 was enacted, several development projects in the San Francisco Bay Area have invoked SB 35 to bypass local opposition or cumbersome permitting timelines.
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