Last month, Commercial Real Estate Development Association (CREDA) President and CEO Marc Selvitelli came to Sacramento to work directly with California Business Properties Association (CBPA) members and the CREDA California Council in our state advocacy work. CBPA serves as the voice for all aspects of the commercial retail, industrial and real estate industry in California, with over 10,000 members. The CREDA California Council (formerly NAIOP of California) is the umbrella organization for all six California chapters that have been working together on statewide issues since 1987.
Having CREDA’s CEO in California working with us mattered, as his presence highlighted the value of various sectors of the industry working together to benefit commercial real estate on the advocacy front, especially in progressive California.
While the new CREDA name shows growth and direction for the organization, the work our organizations do together is as important as ever. The last two weeks of this year’s California legislative session are a good illustration of the very need for the industry to maintain a broad presence in the legislative arena. Two bills targeting our industry arose very late in the session in response to a recent cold storage facility fire in Los Angeles.
Development of cold storage facilities is a growing sector among CREDA members, and this critical sector supports everything from food distribution to medical supplies.
The reaction to the fire was swift, allowing almost no time for the usual legislative process or stakeholder discussion, and CREDA California and the regional chapters immediately had to jump into action. We did not want this one tragic incident to define a segment of our industry, or to be used to advance a broader agenda of placing new constraints on warehouses and logistics centers. All six California chapters understood why it was important to stand together and make sure that the policy response truly fits the actual problem. CREDA chapters and their members were an integral part in helping CBPA respond.
It was a tough political environment. The fire had impacted an economically disadvantaged community, environmental justice concerns were driving the debate, and warehouses are not a favored constituency among many in the California legislature. But for one of the two bills that were of greatest concern, our real estate coalition, with CREDA members playing an important part, had an immediate impact.
Assemblymember Mark Gonzalez is the chief sponsor of AB 817, a bill that would have imposed additional costs on cold storage facilities before they would be granted a building permit and which would effectively have slowed down the development of needed facilities. Almost immediately, he asked us to work with him to get the policy right. That made a real difference. Our coalition was able to recommend changes to clarify and separate owner and tenant responsibilities, add a surety bond option, and narrow the bill considerably for 2027. With those immediate issues resolved, we were able to move the industry’s position to “neutral,” with an agreement to keep working with him next year before the broader cold-storage policy goes statewide.
The second bill, SB 716, sponsored by Senator Maria Elena Durazo, went well beyond cold storage and put a broad range of commercial building types at risk of severe penalties for ordinance violations that had little or nothing to do with the incident that prompted the bill. Our coalition went to work, and defeated the bill in committee four days before the end of the session, only to see it revived at the last minute by California’s legislative leaders, who waived legislative rules and bypassed the committee of jurisdiction.
The bill sweeps up a broad range of nonresidential buildings as small as 20,000 square feet and creates an escalating fine structure for health-and-safety ordinance violations. Under certain circumstances, penalties can increase tenfold to as much as $50,000 per violation, with repeat violations tracked over a five-year period. It is not narrowly focused on cold storage, and its underlying penalty structure applies statewide.
While we did not win that final vote on SB 716, our coalition had made an impact. We narrowed both bills and got an extra year to work on the statewide application of the cold storage policy. In progressive California, 17 Democrats and all 19 Republicans in the State Assembly declined to support SB 716, aligning with our position. That bipartisan opposition is meaningful as we pursue a veto with the governor’s office.
Nearly 40 years after the California chapters first came together at the statewide policy table, this fight is another good example of how working together can advance commercial real estate throughout our state.
