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[VIDEO] Free BB&K Webinar Series: Prop. 64 - Legalized Marijuana: Challenges and Choices

30 Nov 2016 00:00:00 -0800

Free Webinar Series on Proposition 64
On Nov. 8, California voters approved Proposition 64, legalizing recreational use of marijuana. Prop. 64 promises to usher in a new era, with the growth of the recreational marijuana industry and changing attitudes toward marijuana use, and with it, new challenges and opportunities for local governments, regulators, local staff, and the entrepreneurs and landowners who will be vital to the growth of the new industry. For the past several years, Best Best & Krieger has worked hard to keep itself on the cutting edge of marijuana issues, drafting dozens of regulations and working with public agency clients to create marijuana policies that serve their best interests. Now, BB&K is introducing a webinar series to map out this brave new world.

First Webinar - Nov. 30
"The Basics - Cultivating New Regulations and Confronting New Challenges Presented by Marijuana Legalization"
In this first installment, BB&K attorneys Victor Ponto and Jordan Ferguson walked through the Prop. 64 basics: What the law does, what is allowed and not allowed, how local governments can regulate, and the timelines for implementation.

Who Should Attend:

Elected officials
City managers
Planning directors
Finance directors
Police department officials
Fire department officials
Building inspectors
City staff at all levels who may be involved in permitting, enforcement, or policy
Landowners or landlords
HOA members
Entrepreneurs hoping to enter the marijuana industry

When
Wednesday, Nov. 30
10:30 - 11:30 a.m. PST

Click here for questions.

Future Prop. 64 Webinar Topics - Dates to be Announced Soon:

Employer Implications of Prop. 64
Tax and Ballot Measure Implications
Land Use and CEQA Implications
Public Safety Implications

Materials
Prop 64: The Basics - Cultivating New Regulations and Confronting New Challenges Presented By Marijuana Legalization

To view a recording of the webinar, click here.

Best in Law: How a Business Owner Can Weigh Buying vs. Leasing

08 Aug 2016 00:00:00 -0800

By Margaret “Peggy” A. Hosking

Making an investment in real estate can be a valuable long-term venture for business owners – one that can continue to generate revenue even if a business moves on or is sold.

The buy-versus-lease consideration is something many business owners will eventually face. What do you do? Do you buy a business space or continue to lease? Pros can outweigh cons when it comes to investing in commercial real estate. The move, however, may not be right for every business.

There are a few points to consider before taking the plunge into commercial property ownership.

First, ask: What are the advantages of owning versus leasing commercial real estate?

If you have an attractive lease in a great location, you may not want to consider purchasing.

On the other hand, it is easier to control fixed costs when you own the property. Owning a building creates security in that you will not have to renegotiate a lease – or lose your location to another tenant.

Loss of a lease can create significant relocation costs and you may not be able to secure favorable lease terms.

You can also maintain more control concerning repairs, maintenance and improvements if you own. If you have a retail business, you may want to repave the parking lot or paint your building more frequently than a landlord. Or, you may wish to customize improvements to improve business efficiency.

If improvements are planned down the road, the property may serve as security to finance enhancements.

There may also be tax advantages to owning your own property, such as building depreciation, incentives for energy-efficient upgrades and building improvements.

If you have future plans to expand your business, you may purchase a property larger than your current needs and lease the extra space creating additional income.

Consider the long-term plan for your business. Will you sell and retire? Retain ownership of the property and lease it to the next business owner? Or will the real estate make the business more attractive to a buyer?

Next, take a look at the business’ current cash flow. Do you have the cash flow to purchase? What financing is available through your existing banking relationships? Will you take on a tenant (or two) to cover expenses until your business is large enough to take over the entire space?

Don’t hesitate to discuss a potential real estate acquisition with your attorney and accountant. Typically, they have good working relationships with commercial real estate agents and lenders and can help you structure an acquisition in the most advantageous way for your business.

Even if your current bank doesn’t have a loan product that is suitable for your needs, there may be other programs to consider, such as private loans or an SBA 504 loan from the U.S. Small Business Administration.

Interest rates have been very appealing for the past several years. However, this may not continue. Is now the time to lock in your interest expense for the future?

When purchasing commercial real estate, business owners should consider setting the property up in a separate entity. There are distinct advantages to holding real estate separate from your operating entity.

For example, you might purchase real estate through a trust, thus allowing the transfer of the real estate through your estate plan. Or, consider an LLC. Members of the LLC may be family members, business partners or private lenders. Holding real estate assets separate from your operating business assets may also safeguard a business from potential liability.

Finally, holding real estate in a separate entity allows you to retain the real property if the business is sold, maintaining a revenue stream as a landlord.

Commercial real estate assets also have a good risk/reward profile compared to other investments like stocks, savings or bonds. Owning real estate not only gives businesses leverage, but also has the potential for high cash earnings, equity accumulation and numerous tax breaks.

* This article first appeared in The Press-Enterprise on Aug. 7, 2016 Republished with permission.

Veteran Business Attorney Daniel W. Kehr Joins BB&K

03 Aug 2016 00:00:00 -0800

For Immediate Release: Aug. 3, 2016
Media Contact: Denise Nix • 213-787-2552 • denise.nix@bbklaw.com

SAN DIEGO, Calif. - Best Best & Krieger LLP is pleased to welcome Daniel W. Kehr as a partner to the Business practice group. Based in the firm's San Diego office, Kehr provides corporate general counsel, technology, real estate, as well as trust, estate and succession planning legal services.

Prior to joining BB&K, Kehr managed his own law firm, Kehr Law. Kehr provides legal services for a variety of clients, including individuals, entrepreneurs, investors and businesses, including start-ups and mature companies, across a broad range of industries, such as technology, software, Internet, gaming, insurance, manufacturing, distribution, real estate and professional services.

“Dan's experience as a business owner gives him a unique perspective that his business clients appreciate and benefit from. That experience, coupled with his knowledge and skills in handling a variety of business law matters, make Dan an asset to the firm's clients,” said Managing Partner Eric Garner.

A native of Huntington Beach, Calif., Kehr attended the University of California, Los Angeles for his undergraduate studies. He was an NCAA intercollegiate baseball athlete. He earned his law degree from California Western School of Law in two years, and passed the California bar exam while studying at the University of San Diego.

Kehr’s full biography is available at www.bbklaw.com.

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Best Best & Krieger LLP is a national law firm that focuses on environmental, business, education, municipal and telecommunications law for public agency and private clients. With 200 attorneys, the law firm has nine offices nationwide, including Los Angeles, Sacramento, San Diego and Washington, D.C. For more information, visit www.bbklaw.com or follow @BBKlaw on Twitter.

Case Clarifies California’s Subdivision Map Act Requirements

28 Jun 2016 00:00:00 -0800

The scope of findings that a city or county must make when approving subdivision maps under the California Subdivision Map Act were clarified in a recent California Court of Appeal decision. According to Government Code section 66473.5, for a city or county to approve a subdivision map, it must make a finding that a proposed subdivision is consistent with its general plan. The general plan consistency finding is the only affirmative finding that the Subdivision Map Act purports to require by its express terms. There has long been question, however, as to whether local agencies must also make the “negative” findings under Government Code section 66474 to approve a parcel map.

Section 66474 provides that a city or county shall deny approval of a tentative tract or parcel map if it makes any one of seven specific “negative” findings. For example, if the site is not physically suitable for the type of development or for the proposed density of the development, then the city or county shall deny the application.

At issue in the Spring Valley Association v. City of Victorville case was a commercial development that included space for a new Wal-Mart store. For the project to proceed, the applicant requested a parcel map to subdivide the property for development. In approving the parcel map, the City Council found that the proposed subdivision was consistent with the City’s General Plan. However, the City Council did not make findings under section 66474 because the City Council did not intend to deny the map.

Spring Valley Association argued that the City’s parcel map findings for approval of the map were inadequate because the City did not make the converse “denial” findings under section 66474. Relying on a 1975 Attorney General opinion that interpreted the predecessor statute to the current section 66474, the court concluded that the City Council was, in fact, required to make the negative findings before it could approve the parcel map. Thus, for a city or county to approve a tentative tract or parcel map, it must make the general plan consistency finding in Government Code section 66473.5 and must also find the inverse of the seven “negative” findings in section 66474.

While this case adds a significant number of findings to the subdivision map process, cities and counties who use Best Best & Krieger LLP’s model subdivision resolutions should not experience any interruption in their current procedures. BB&K model subdivision resolutions already include both the affirmative finding under Government Code section 66473.5 and the inverse of the seven “negative” findings in section 66474. If you are uncertain about whether your subdivision map resolution contains all of the requisite findings, or if you are a BB&K client interested in obtaining a copy of the BB&K form resolutions, please contact one of the authors of this Legal Alert listed at right in the firm’s Environmental Law & Natural Resources practice group, or your BB&K attorney.

Please feel free to share this Legal Alert or subscribe by clicking here. Follow us on Twitter @BBKlaw.

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

The Dangers of Idle Property: Squatters Rights in California

13 Jun 2016 00:00:00 -0800

By Sarah Mohammadi

Imagine that you live in Colorado, but own a vacation home in California. You love California, but are only able to visit once a year during the summer, while your kids are on vacation from school. Typically you and your family will spend the entire month of July enjoying your vacation home. During the rest of the year, the house is vacant with the exception of occasional renters. In 2015, you and your family decided to take your summer vacation somewhere other than California. In order to afford the vacation, and your summer home, you decided to rent your California abode to a couple during the months of June and July. On July 31, 2015, that couple vacated your home - or so you thought.

On July 1, 2016, you and your family land in California for your annual summer vacation. Upon arriving at the vacation house, there are unrecognized cars in the driveway. You walk up to the door, and ring the doorbell. You hear voices inside, but no one answers the door. Against your better judgment, you try to use your key to get into your home and confront the intruders, only to find that your locks have been changed. You see the curtains by the window move and recognize the faces peering out at you. It is the couple who rented your home during the summer of 2015. You immediately call the police to inform them of the intrusion. You explain that this couple rented your home for two months in 2015, and may have been staying there rent free since then. To your dismay, the police cannot help you – at least not yet. The couple has been living in your home for over thirty days continuously, which provides them with protections under California’s landlord-tenant laws. The police inform you that in order to remove the couple from your home you will likely need to file eviction proceedings in court, despite the fact that they have not paid any rent to you since May 2015. The couple is holding your vacation home hostage.

You contact an attorney in order to determine how to get possession of your property back. The attorney informs you that you will have to pursue an unlawful detainer action. He explains that an unlawful detainer is a lawsuit seeking court authorization to terminate a tenancy. That lawsuit can also seek collection of unpaid rent. However, before you can pursue the action, you must provide the couple with notice of the intent to terminate the tenancy.

Your attorney informed you that the first step to take is to prepare a notice informing the couple that they are to vacate the premises within three (3) days of receiving the notice or pay all currently outstanding back rent.¹ This notice may be served through one of the following means: (1) personal service; (2) substitute service; or (3) if neither personal service nor substitute service can be effectuated, by affixing a copy in a conspicuous place on the property and sending a copy through the mail addressed to the couple.² It is virtually certain, based on the behavior of the couple that you will be forced to post and mail the notice, and that they will ignore the notice and continue to reside at the vacation home rent free.³ The attorney informs you that if the couple does not vacate the property within the specified time frame, they will be guilty of an unlawful detainer because they “continue [to hold the property in] possession...without the permission of [their landlord]... after default in the payment of rent...and three days’ notice, in writing, requiring its payment...”⁴

The next step is to prepare the unlawful detainer filing.⁵ The complaint for unlawful detainer must be verified, set forth the facts that you depend on in seeking recovery from the couple, describe the property with reasonable certainty, explicitly provide the amount of back rent owed and state the manner of service of the notice to pay rent or quit.⁶ The complaint may also explain the circumstances surrounding the couple’s fraud.⁷ Lastly, the complaint should attach the notice, and the lease that you had with the couple back in 2015.⁸ Once you have served the couple with the unlawful detainer action, they will have an opportunity to respond.⁹ Their period to respond will extend this process by at least another five days.¹⁰

Your attorney explains that the couple will hopefully ignore the complaint, allowing you to take their default.¹¹ If the couple answers the complaint, the proceedings will take additional time to complete. However, if they fail to answer, and your attorney takes their default, then you will have be able to enter a judgment against the couple and issue a writ of execution thereon.¹² If the judgment is not paid within five days, the judgment can be enforced for the full amount and for the possession of the premises.¹³ Once you have a judgment and a writ of execution, the sheriff’s department will be able to start helping you with removing the couple from your property.

This process will likely take at least two months and will cost thousands of dollars. After all this, one thing is certain—you will not leave your vacation property unattended again.

California Code of Civil Procedure §§ 1161, 1162.
California Code of Civil Procedure § 1162. There are requirements to attempt personal and substitute service in advance of posting and mailing the notice.
On the off chance that the couple actually remits payment to you for back rent, you will still have exercisable options to have them vacate the property. However, that process will be more lengthy than if the couple simply ignores the three day notice to pay rent or quit.
Id.
California Code of Civil Procedure § 1166.
Id.
Id.
Id.
California Code of Civil Procedure § 1167.3.
Id.
California Code of Civil Procedure § 1169.
Id.
California Code of Civil Procedure § 1174.

This article originally appeared in the June 2016 edition of Riverside Lawyer magazine, a publication of the Riverside County Bar Association. Reprinted with permission.

Public Real Estate Transactions

21 Apr 2016 00:00:00 -0800

Best Best & Krieger partners Nancy Park and Harriet Steiner will teach a University of California, Davis Extension class titled "Public Real Estate Transaction." The class will provide attendees a understanding of:

Due diligence procedures for appraisals
Hazardous materials assessments
Insurance, title searches, and liens and loans, as well as negotiation strategies with multiple agencies and parties

When
Thursday, April 21
9 a.m. - 4:30 p.m.

Where
U.C. Davis Extension
2901 K St.
Sacramento, CA 95816

For more information or to register to attend, click here.

BB&K Named a Top Litigation Firm in Sacramento

24 Mar 2016 00:00:00 -0800

For Immediate Release: March 24, 2016

Media Contact: Denise Nix • 213.787.2552 • denise.nix@bbklaw.com

SACRAMENTO, Calif. - Best Best & Krieger LLP was named a top litigation law firm in Sacramento by the Sacramento Business Journal. Of the top 30 firms on the list, BB&K ranked No. 24.

The publication named partners Harriet Steiner and Stacey Sheston as top local litigation partners, and recognized the firm for its litigation work in the areas of public agency law, land use, real estate, appeals, labor and employment and environmental and natural resources.

Sheston is a member of the firm’s Labor & Employment practice group. She represents employers in mediations, arbitrations, administrative hearings and court proceedings (including jury and non-jury trials) arising out of employment matters, including wrongful termination, breach of contract, unpaid wages, harassment, discrimination and retaliation.

Steiner is in the Municipal Law practice group. She focuses on public law, representing cities, special districts and joint powers agencies as city attorney, general counsel and special counsel.

She represents public agencies in CEQA and land use litigation, election challenges, public financing and development impact fee challenges and Proposition 218 litigation.

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BB&K Ranked No. 8 on Top Sacramento Law Firms List

26 Jan 2016 00:00:00 -0800

SACRAMENTO, Calif. - Best Best & Krieger LLP’s Sacramento Office is ranked No. 8 on the Sacramento Business Journal’s 2016 Top of the List: Law Firms. The publication ranks the local law firms by head count, listing the top 30. With 21 attorneys, BB&K’s Sacramento office moved up one position from 2015.

BB&K’s Sacramento attorneys serve a wide variety of clients, including the municipal, special districts, health care and agricultural industries. Their practice areas include Land Use & Zoning, Labor & Employment, Environmental & Natural Resources, Real Estate and Litigation.

“I am pleased to see how BB&K’s Sacramento office is growing not only by the numbers, but in its strength and depth of experience,” said Sacramento Managing Partner Edward J. Quinn.

In addition to the attorneys, BB&K last year added a lobbyist to the firm. Based in Sacramento, Director of Governmental Affairs Syrus Devers assists clients in navigating the complexities of California state government.

California Supreme Court Addresses the “Reverse CEQA” Problem

21 Dec 2015 00:00:00 -0800

Under what circumstances, if any, does the California Environmental Quality Act require an analysis of how existing environmental conditions will impact future residents or users of a proposed project? In last week’s unanimous decision, California Building Industry Association v. Bay Area Air Quality Management District, the California Supreme Court concluded that, generally, agencies are not required to analyze the impact of existing conditions on a project’s future users or residents. The exception is when a project risks exacerbating existing hazards or conditions; then, an agency must analyze the potential impact of such hazards on future residents or users.

At issue in the case was BAAQMD’s proposed “receptor thresholds” of significance, which set a limit on the level of toxic air contaminants and particulate matter that may be experienced by residents and workers brought to an area as a result of a proposed project. CBIA challenged these new thresholds on grounds that CEQA does not require analysis of an existing condition’s impact on a new project’s occupants.

The Court sided with CBIA, holding that CEQA does not generally require an agency to consider the effects of existing environmental conditions on a proposed project’s future users and residents. However, the Court went on to state that this general rule would not apply where a project could exacerbate existing environmental hazards. The Court provided an illustrative example: a project is proposed next to a long-abandoned gas station that leached MTBE into the surrounding soil. Without the new development, the MTBE might remain locked in place within the soil, impacting no one. However, the new development would disturb soil, which would have the potential to disperse the settled MTBE and exacerbate the existing contamination. In such a situation, the agency would have to evaluate the existing condition, and the condition’s impacts, as exacerbated by the project, as part of its environmental review.

The Court also noted that certain statutes governing school, airport and certain types of housing projects provide express and specific exceptions to the general rule requiring consideration only of a project’s effect on the environment. For example, under Public Resources Code section 21151.8, an agency must determine if school sites are located on or near hazardous substances or waste.

If you have any questions about this case or how it might impact your organization, please contact one of the authors of this Legal Alert listed to the right in the firm’s Environmental Law & Natural Resources practice group, or your BB&K attorney.

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.

New California Energy Use Disclosure Program for Commercial and Multifamily Buildings Approved

09 Nov 2015 00:00:00 -0800

A complicated energy reporting requirement for owners and tenants of commercial and multifamily buildings is ending under a new law that takes effect Jan. 1. AB 802, authored by Assemblymember Das Williams (D-Carpinteria), was signed by Gov. Jerry Brown on Oct. 8. The law’s purpose is to encourage enhanced energy efficiency strategies and investments by providing owners and tenants with easier access to total energy usage data for their buildings.

The new law abolishes the existing energy use disclosure program for nonresidential buildings. The program requires owners of large commercial buildings to disclose energy consumption data to prospective buyers, tenants of the entire building, or lenders prior to entering into a purchase agreement, lease or loan. This program, commonly known as the “AB 1103 Program,” ends Dec. 31. Many in the commercial real estate industry view it as problematic because of the extensive and confusing reporting requirements and difficult data retrieval process.

In its place, a new statewide “benchmarking” and public disclosure program will be developed by the California Energy Commission. The program will apply to commercial and multifamily buildings with more than 50,000 square feet of gross floor area. During 2016, the Commission will develop the applicable regulations, which are expected to take effect Jan. 1, 2017.

Benchmarking compares the energy consumption per square foot of floor space for comparable classes of buildings to help owners and tenants evaluate energy usage and identify efficient projects. The new law appears to shift the reporting burden from private property holders to utilities.

Under the new law, electric and gas utilities must maintain records of the energy consumption data of all buildings to which they provide service for at least the most recent 12 complete months. Beginning no later than Jan. 1, 2017, these utilities must – at the request and authorization of a building owner or tenant – provide aggregated energy usage data for “covered” buildings to the owner, owner’s agent, or tenant, or to the owner’s account in the U.S. Environmental Protection Agency’s computer-based “ENERGY STAR Portfolio Manager.”

These new provisions, contained in section 25402.10 of the Public Resources Code, require utilities to provide the benchmark data to a building owner or tenant within four weeks of request.

If you have questions about AB 802 and the forthcoming rulemaking process by the Energy Commission, please contact the attorney authors of this legal alert listed to the right in the Business Services practice group, or your BB&K attorney.

Disclaimer: BB&K legal alerts are not intended as legal advice. Additional facts or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information in this communiqué.