CONNECT MEDIA: California’s Split Roll Requires Political Activisim

By Dennis Kaiser

As published on Connect Media on Dec. 9, 2019

There has never been an election year more relevant to the CRE industry than 2020 in California. Despite debates over elected offices and the presidential primary, a heated battle is also expected over the push to end Proposition 13 tax protections from commercial property. On November 3, the battle over ‘split roll tax,’ also known as the Schools and Communities First Initiative, will be front-and-center.

In our latest CRE Q&A, Connect Media spoke with Coreland Companies’ Ben Terry, Vice President, Retail Brokerage, who encourages everyone in CRE to become an advocate in 2020.

Q: What are the biggest threats in the fight against split roll in 2020?
 The commercial real estate industry has fantastic advocacy groups, like ICSC and the CPBA, working on our behalf in the fight against Split Roll Tax, but we cannot solely rely on their work. Each of us has to become a grassroot advocate within our own communities, especially when the opposition is promoting a ‘Schools and Communities First” campaign. We must work to explain the devastating effects split roll will have on a very local level for retailers.

Q: What are some of the most critical points to share?
 Top of the list for me is getting your community to understand the tremendous impact on small business. It might seem as if small businesses are exempt, but that is overlooking the fact that most small businesses rent the property on which they operate on an NNN basis. The additional taxes levied on property ownership will be directly passed onto each business owner per the NNN lease terms. California small business owners will not be able to support the increase and neither will their customers, especially in an industry fighting flat consumer spending.

Q: What is at stake if this proposition passes?
 If passed, the outcome will create uncertainty about commercial property tax rates going forward, destroying commercial property values and substantially increasing rents on all retailers, big and small alike. This will alter the nature of tax policy and commercial development in California for years to come.

Q: With a year before the election, what can each of us do?
 Talk, talk, talk. It is our obligation to share what we know, and explain the issues in a way that is easier to understand for those not involved in the commercial real estate industry.

There are also so many resources to take advantage of. Email, post and direct contacts to good resources, like Stop Higher Property Taxes and the ICSC Split Roll Tax Brief.

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