24: Gov't Stimulus - What You Need to Know With Reggie Thomas

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Welcome. This is Real Estate Investing Live from New York with James Nelson, the principal and head of Avis and Young's Tri State Investment Sales Group. In this program you'll learn about the world of commercial real estate and find out why it is one of the largest investment opportunities in New York and around the world. Now here is your host, James Nelson.

This is James Nelson, your host of Real Estate Investing Live from New York with a special edition for episode number 24. And as you all know, the intention of this show is to teach you everything you need to know about investing and operating commercial real estate. And that is what we'll continue to do. And you all have heard, you know now, almost two dozen incredible stories that are really timeless evergreen that will prepare you to be successful in any market. So we have avoided more current events, if you will. This isn't meant to be a political show, but one that again will last in time. That being said, these are unprecedented times with the outbreak of the coronavirus. And as a resource to you all, I thought for this week it would be incredibly helpful to share a interview that I just did with Reggie Thomas, who is SVP of the Real Estate Board of New York, talking about the federal stimulus plan and what help is available for you all and for your businesses at the federal level. Then we also go on for those of you from New York talking about what benefits are at the state and city levels. But again, we want this to be a resource. So we are taking a departure from our investor spotlight this week and investor panels to bring you this much needed information. Also, please check my social media channels where you can also get recordings and additional information on the coronavirus. Finally sending my best to all of our listeners and your families to get through this difficult time. And with that, here is our interview with Reggie.

Thank you all for joining us. And I think now since it is past 2 o', clock, I can give Reggie his official welcome. And thank you first of all, on behalf of the Entire REBNY membership, 17,000 members strong, the real estate community and really for New York, your team and we were just talking before we got rolling with this, have just been working tirelessly to help us understand all the implications, all the resources out there. So hugely helpful that you enjoy that you offered to jump on the call with us today to give us your perspective and an understanding of on the stimulus plan. And we're really going to be looking today at the federal, state and city level. And Reggie, you're very well positioned to do this. Not only are you the SVP of Government affairs for rebny. But you spent time with Scott Stringer and the borough president's office. You worked with Leroy Comrie at the City Council, and then you were also the deputy legislator for both Mayor Bloomberg and de Blasio. So you've got a great track record of working with both sides of the aisles. And it seems like right now everyone is coming together to make this happen. So thank you again for doing this. So I was told that right off the bat, I do need to give everyone a disclaimer here, which is, yeah, this is for information purposes only, very important. And I think we might even defer some of these questions because I know there's going to be some technical questions that might come in on the labor side of this. And so we are going to suggest that you speak with counsel, your accountant to discuss kind of the implications and the approach. So this is really just for informational purposes only, but again, happy to share with you as much as we know right now. So, Reggie, let's dive right in. So the CARES act was instituted and now I'm losing track of the days.

But yeah, last Friday was best.

Right, last Friday. So I guess just giving everyone the timeframe and that is maybe you can just give a brief definition of who enacted that, how that came to pass, and then kind of the timeframe. And again, I'd like to start at the federal level and then jump into the state and the city.

Sure. No, thanks for that, James. And also thank you again for kind of giving that disclaimer in the beginning because this is incredibly technical. It can get incredibly complicated. As part of the coronavirus hub that REBNY had put together that I sent the link to on the chat, you can see we're trying to distill information in as much of a plain form language as possible. And so when you do things like that, there's always the possibility that things could get lost in translation. So we want to make sure that if you have any detailed questions, we're happy to try to get you that information afterwards. But we want to make sure we provided a high level overview of what's been happening at the federal level and how that trickles down through New York State and New York City. So last Friday, Congress passed what's referred to as the CARES Act. It's an acronym for a longer CORONA legislative package. In it, there were a number of key provisions that affect both businesses as well as for individuals. So I'm going to just start up on the individual part because I think that's that's critical because, you know, for REBNY, we have 17,000 members of which, you know, 13, 14, 15,000 are often independent contractors or small businesses or individuals who right now are going through some struggles themselves. Right. You know, as a result of not being able to do showings or being able to show clients around or even commercial property owners having trouble doing basic transactions. That has an effect in terms of your day to day ability to, to earn income. And so to that end, we were really pleased that there were a couple of major initiatives in the CARES act that help just everyday New Yorkers and everyday Americans. I think the first sort of big ticket item is sort of the individual one time direct income. And so if you're somebody who earns, let's say $75,000 or less, or if you're married and you have a combined income of less than $150,000, you'll receive $1,200 per person. And that's a one time payment right off the bat. That's going to be basically direct deposit into your bank account. As long as you file taxes and your information's already with irs, you're going to get that in the coming week or two and you get on top of that an additional $500 per child that you have under the age of 16. And so that's important because again, that goes to everybody, one time payment as long as you kind of make methods income thresholds and it goes a little lower if you make between 75 and $99,000. But again, that's sort of a big one time payment. That's sort of a big win for, for a lot of people. Now the second item is the expanded unemployment. And this is critical because many people, especially many revenue members, don't technically pay into unemployment insurance. Right. A lot of more independent contractors, they have their own sort of small businesses. And so there's now something that's more referred to as a pandemic relief fundamentally that basically mirrors what normal unemployment insurance will look like. And that actually launched on Monday. And I gotta say, this is kind of staggering for government. I mean, for those of you who have either worked with government or people like me who have been in government, whenever a bill passes, it is a very messy, complicated effort to actually begin to implement. And it really says something that after Congress passes on Friday and President Trump immediately signed it, then on Monday, New York State, their Department of labor already has everything up on the site available for folks to actually apply if you don't normally qualify for unemployment insurance. So Again, on the revenue website we have links to actually show you how to apply for that, the exact websites. I know it can get a little tricky because sometimes you might have to make a phone call and phone lines are jammed, which I understand want to urge you to try to go through non hours. So the moment the phone lines are open or maybe a half hour before they close if you need to do that. But again, it's really important that you go ahead and start applying for those benefits.

Hey, and Reggie, not to stop you, but just because we are getting a lot of questions and requests and so we are going to ask questions at the end. And Bill Montana, thank you for everything you do for revenue and joining in. So we're going to get to your question but please do put it in the Q and A field, not the chat. We opened up the chat just to welcome everyone but we'll be looking at your questions. But one of the early questions I did get is where can you get this white paper that you wrote? And rebny does have a Corona Resource Hub web address at Gore rebny. Com coronavirusresources. So on there you can get the five pager, which is really a great summary of everything that we're talking about now and a lot of the resources. So we'll continue to make a plug for that. And thank you, Reggie, looks like you just posted the link for our panelists in the chat room. So thank you for doing that. But yes, if you have questions as we go along, please add them to the Q and A tab so we don't forget them. We'll come back and we'll answer them later. But just wanted to make that announcement.

No, thanks for doing that, James. And again we're going to try to cover as much as we can, but you should always go to that website. It's updated pretty regularly that version of the site. It's going to be getting quite a lot of improvements. We've already gotten some really good feedback about ways we can cater to repping members with the site. So again, feel free to continue to give us feedback. So I see Bill had already started referring to the ppp, which is sort of the, the paycheck protection program. And that is sort of another big critical part of the federal stimulus package or the CARES Act. A lot of businesses are struggling right now. Right. And sort of the big effort by the federal government was to provide a loan grant. And I'll get into sort of the differences on what that means in a bit. But they wanted to get money into the hands of businesses as soon as humanly possible. And actually it made the process pretty seamless and easy to access where it's minimal paperwork, because they want to make sure that businesses have the opportunity to get up and running as quickly as possible. And so beginning this Friday, that program is going to be available online for folks to apply. And we'll make sure we get that link out to all REVM members. It'll be hard to miss because there's going to be quite a lot of activity on the websites to get that. So what exactly is the paycheck protection program? So it's a Small Business Administration 7 loan program. And basically what it allows for is for small businesses that are up to 500 employees and have at least one physical location, they can receive money that can be used on pretty much most business expenses. And that includes payroll, rent, mortgages, insurance, utilities. And so the way that program kind of works is that you apply through an individual participating lender, and the maximum loan that you're allowed to receive is 250% of your monthly payroll cost. So, you know, if you have clients who maybe have a monthly payroll cost of $100,000, they're eligible for $250,000 loan. Now, there are some caveats to this, and this is where it determines whether or not it's a loan versus a forgivable grant, because there are some strings attached to it. So first off, 75% of the loan has to be used for payroll. Again, I'm going to say that again because it's really important. 75% of the loan has to be used for payroll. And so if you're, you know, under that example where you get a $250,000 loan, you know, it's going to be, what's the math like, about a buck 70, a buck 60 that have to be used for payroll. And you have to restore your payroll to the pre pandemic levels by June 30th of this year. Now, if you do those two things, you know, minus a couple extra details, but you know, as long as you do those two main things, that $250,000 loan gets converted to a grant that you don't have to pay back. And that's pretty big. Now, there are some issues with that, right? For those of you who do work in New York or have clients are in New York, rent is oftentimes not going to, it's not going to be enough. I mean, 25% of your monthly payroll, it's going to give you a lot higher and We've been on the phone with the congressional delegation. Earlier today, we were on the phone with Senator Schumer. And we're making it clear to both Republican and Democratic leadership that in high cost states like New York, that math may not exactly work out well. And so it's something that we're pushing for as we move to the next phase or the next round of stimulus program.

Perfect. And is this akin to the SBA 7A? I think that was what it was modeled after. Or is actually the SBA orchestrating this?

It's through sba, so it's the paycheck protection program that's managed by the Small Business Administration.

Perfect. And I know, yeah, I mean, this was about $350 billion worth of stimulus. So this is a big one and a welcome relief for small businesses. Now, again, under 500 employees. And we're going to get to large businesses next. But tell us the timeline because I believe that you can now start applying for these loans. I think it's even tomorrow. And just when can these businesses start to expect receiving some of the relief? Because the timing is so critical right now. People are really trying to keep their businesses afloat. So how quickly do you think this moves?

Sure. So April 3rd is the launch date, and so it's going to be a pretty big public campaign tomorrow. Even just last night, I was talking with the mayor's office who wants to make sure that all New York City businesses get access to this. So it'll be available tomorrow. We'll be sending out information so everyone has ability to access it, but they're looking to get the money to the recipients as soon as humanly possible. So it honestly shouldn't take longer than, let's say a week or so for you to actually receive that direct grant slash loan to your business so you can potentially get up and running as soon as possible.

That's fantastic. Okay, so what about large businesses? I heard that there's certainly loans available there, too. Maybe not. I mean, the grant piece to the small businesses is so attractive in that much of this is forgivable. Again, that has to do with payroll or the limit on the rent. I think with the large businesses, I think it's a little different, but maybe talk a little bit about that.

Sure. So there's been a lot of consternation, especially for those businesses that, you know, have maybe more than 500 employees and sort of what's in it for them. What the federal government did as part of the CARES act is that it gave the ability for the Treasury Department to institute a number of programs for those large businesses that are over 500 employees. As you can imagine, individuals down in D.C. and across the country are really focused on, quote, unquote, small businesses that are defined by SBA as generally being under 500 employees. But they did give the ability for the Treasury Department to start developing programs that could be done over the next couple of weeks. Earlier today, we learned that we do anticipate that the Treasury Department will be putting some of those out. And again, the next two to three weeks, the main focus was getting money in the hands of small businesses, which, as we all know, is a major economic driver throughout New York City, New York State and the country. But we will make sure that we keep folks apprised of what the Treasury Department is going to be doing as it relates to those businesses. Over 500 employees.

Perfect. That's fantastic. And I am checking the Q and A box, and it is starting to fill up. And we're getting a lot of great questions. And again, we're going to save them for the end, because a lot of the questions you all are asking right now we do have on the list. So we're going to get to them. So don't think that we're ignoring them. And yes, someone did already say that he tried to click on to the SBA 7A and referred to an individual lender. So that's right. You have to. If you want these loans, just to be clear, you do have to go to a lender to access them, Is that correct?

Correct. And everything is centralized through the SBA site. So once you go into there, you'll be referred to the appropriate site for you to actually begin to upload your documents and formally apply. Perfect.

Okay, so now I want to talk a little bit about if there's any mortgage relief that's available. And I'm still keeping this at the federal level. So Fannie and Freddie came out and said that we are going to be giving forbearance for loans, provided that you give flexibility and that you're not evicting tenants. So, again, that's at the national level, if you want to talk a little bit about that.

Yeah, sure. And this is one of those times where, listen, I think we're all appreciative of what the federal government has done so far. The fact that they rolled this out as quickly as they did after they got congressional authorization is pretty impressive for any government, let alone the federal government. But, you know, in terms of mortgage relief, the main thing that they provided for was really for residential mortgages. And it basically prohibits any type of foreclosure on federally backed mortgages. So. Fannie Freddie and this is for a 60 day period beginning March 18th. So you can't start any kind of foreclosure process until the earliest is sort of May of this year. But it also provides up to, I believe, 180 days of forbearance for owners that have experienced a financial hardship related to the COVID 19 emergency. And so if you're able to show in some way, shape or form that, you know, you were affected by this either through, let's say loss of revenue because of rent or other sort of reasons, maybe you had, you know, ground floor revenue from a retail store coming in that you could get forbearance up to 180 days. However, there was nothing that was done on the commercial side. Right. And you know, one of the big things that I'm sure we'll talk about this later on is, you know, there are a lot of elected officials who are talking about free rent or cancel all rent and things of that nature. But you know, commercial property owners and residential property owners don't have expenses going up. Right. They still got to maintain the building, they still got to pay the mortgages. And, and there's a lot of pressure on them as well because they want to do everything they possibly can to help their businesses get back into the space and be as successful as humanly possible. But they're going to need some relief on their own commercial mortgages. And so what we've advocated to the federal government is that in the next sort of round of Corona legislation, there needs to be some level of programs or forbearance on commercial mortgages to help relieve a lot of the pressures that property owners are facing and a lot of these businesses are facing, especially if there are a lot more calls to forgive their rent or offer rent.

Yeah, no, we are unfortunately expecting a wave of these and Avis and Young does a lot of special servicing. We work with the special servicers and some of them are saying they're getting hit with default notices by the minute. So it's unfortunately there is going to be a big wave and it would be great to get some clarification on what type of relief is available. Now I know Governor Cuomo, you know, tried to get out ahead of this as well and said, you know, looking for lenders to postpone any foreclosure proceedings. Also, you know, supports the non eviction of tenants and I've got to commend Reni, I mean, you all. I mean, we're talking two weeks ago, once this really started to escalate, came out very quickly, full page ad in the New York Times saying our landlords will not evict tenants. And I want to get back to that because I think it's. We want to qualify that, but just to close the loop on the mortgages. So Governor Cuomo suggested no foreclosures. And then he kind of came back and said, well, it's more of a suggestion and he can't certainly mandate that.

Yes. So there's limitations in terms of what sort of the state government can do. But, you know, as many of you seen from the daily press conferences, the governor has quite a bully pulpit right now. Right. And so it's. One of the things I think we appreciate about the governor's leadership during this time is that he's willing to put pressure. You know, he's even putting pressure on members of his own party, which in politics is usually a huge no, no to try to do what's best for New York City. And so although, yes, there's some legal wrangling, if you will, about what's technically legal versus not legal, but, you know, we do expect the governor to put pressure on those entities to follow through on that. Perfect.

So now I want to get a little bit into the state matters. So again, we just talked about rebny really stepping up and saying with that pledge that you would not evict tenants of the next 90 days who are affected by COVID 19. And then there was some confusion and we're gonna. Might as well jump right there because I'm already getting a lot of questions on it. The rent relief bill, S8125, proposed by state Assemblyman Generis, who's suggesting that tenants shouldn't have to pay rent during this time. I was very grateful to see Governor Cuomo make the statement that this is a contractual obligation. Yes, landlords should work with their tenants whether it's a payment plan, but that rent is still due. So maybe you could clarify that. And is that kind of in the spirit of what Rebny had in mind when they said no evictions for 90 days?

Sure. So I'll take that in reverse because there's. For those of you who are watching right now up in Albany, they're actually voting on a state budget. And so usually there are two critical times in the state legislature. The first is through the last week of March, the first day or two of April, because technically speaking, New York State has to pass the budget by April 1. So there are things that are kind of budget related, not kind of budget related, that kind of get forced during that time. And then the second time is at the end of the legislature, which is end of May or early June. But because of COVID clearly the legislature is not going to be meeting as regular. So right now there's a lot of activity. There are a lot of bills moving. Right now as we're having this conversation, they're actually voting on different segments of the state budget. One of the more recent proposals from Senator Gennaros, you know, did allude to sort of canceling rent or, you know, freezing rent. You know, you can, you can phrase it however way you like, but I gotta say, one of the things I think we appreciated with our engagement with elected officials is, you know, right now, it's sort of the easy thing to say, hey, everyone's rent should be forgiven, right? It's sort of the, the cancel rent hashtag that you see all over Twitter right now. But the problem is that property owners still have expenses, right? Like they still got to pay their city, state or federal government property taxes. They still got to pay maintenance. And, you know, one of the things I think we really appreciated about our engagement with elected officials is they started to really understand how taxed buildings are from a maintenance perspective. Right? Because before, from 9 to 5, in a residential building, you might only have 10, 15, 20% occupancy. Now we're at 95 or 100%. All the residents are staying home. You have an increase in garbage, you have an increase in cleaning. You know, maintenance staff still need to get paid. 32 BJ staff who are doing phenomenal work right now throughout the city still have to get paid. And so if these property owners don't have revenue coming in through the form of rent, how exactly are they going to be paying for things like utilities, you know, electricity, gas? All these things are going through the roof because so many New Yorkers are staying home, which is what we want. And so, you know, we're really pleased that right now, you know, we've heard a lot of elected officials tell us that they won't support that bill. But, you know, we do have a pretty aggressive lobbying team, both in house at Rebny and outside consultants that are monitoring it very closely, just to make sure that, you know, as we have this conversation, that we have a real conversation about ways to help New Yorkers weather this crisis that don't involve sort of a blanket cancel rent policy.

I remember One of the suggestions that this is when we were talking about this just as it was unfolding a couple of weeks ago, and the suggestion of maybe some type of abatement for property taxes. We even talked about commercial tenants who end up paying a lot of the real estate tax through pass throughs. And so again, that just, you know, just, just if they don't pay rent, but the taxes are still due, water and sewer still due, I mean, then you're really putting the burden on the landlord, especially if they can't, you know, foreclose. So did that ever gain any traction?

Yeah. So, you know, I'm really happy you mentioned that, James, because one of the big areas we were looking at is if there is a way where, you know, I think all parties could have skin in the game, the business, the property owner and government. And one of the policy proposals that have been kicking around a bit is offering a property tax abatement for property owners who forgive rent or offer a major rent concession to their business to make sure that they can get up and running as soon as humanly possible. Now, this is an ecosystem right in New York City. I think roughly half of city tax revenues come from the real estate industry. And we're seeing right now that government is, you know, in terms of operations, they have quite a lot of expenses to pay for given this emergency. And that includes things like overtime and sort of emergency procurement, but they need that tax rate. And so right now there, there is an interest by elected officials to explore this. But at the end of the day, they're also just as concerned about what the revenue is going to look like because, you know, we can fully expect that, you know, state and city budgets are going to be pretty hurt. The other thing to note is, especially in New York City, by law they have to have a balanced budget. There is no borrowing, especially because of the 70s crisis. So we can't really dig into some piggy bank or take a major loan out to help us get through this. We have to have a balanced budget in New York City. And so that puts pressure on interesting policy proposals like property tax abatement to help these small businesses.

Perfect. And I was going to mention it at the end, but just as it's relevant to this I am hearing and Rebni of was the first one to announce it to, and I know you haven't, you're not going to give the widespread announcement until it is officially passed. But it looks like thankfully that REAP and ICAP has been extended to 2025. I think on ICAP, the only exception was for self storage. So that was a big win because there was talk about especially for Lower Manhattan, which I know also had the sales tax, energy CRT benefits extended. Certainly REAP has been such a huge driver for job growth. So I know REBNY has been behind that, really working, you know, for the last month or two. So it does sound like that is going to be something that's going to be preserved in the budget today, which is fantastic.

Yeah, James, you're like breaking news right here in front of all webinars. You heard it first. Yes, it really is breaking news. Yeah. Because we've been monitoring it minute by minute over the past 24 hours because we felt as though it was going to be in good shape. But you know, you never know until the votes are in. And so, you know, we were really, really, really happy that programs like REAP and Lower Manhattan REAP were extended for five years. And a five year extender at a time like this is, you know, a huge win. But honestly, you know, revenue played a role. But it was actually all of you, I mean, many of you wrote letters and talked to your elected official. There was a five borough jobs coalition of quite a lot, a number of local development corporations, bids, chambers of commerce, who made the case to elected officials about why economic incentives like this are so incredibly critical, especially if we're trying to spur job growth outside of Manhattan. Right. We're a five borough economy, but obviously quite a lot of tax revenue gets built in Manhattan. But we have to do everything we possibly can in this city to remote job growth from lower Manhattan all the way down to South Jamaica and to the southern shore of Staten Island. And you know, these economic incentive programs really go a long way to help do that. And so we were really pleased that despite all the sort of noise right now, given, you know, obviously we're focused on Covid that the state legislature did their job, got an extension on this, and you know, there are going to be some caveats. There are going to be some reforms, of course, which, you know, I think everyone welcomes. We believe in more transparency. We think transparency is good. It's good for government, it's good for New York state. You know, one of my favorite Bloomberg isms is if you can't measure it, you can't manage it. And so, you know, we want to make sure these things constantly get reviewed. But yeah, thanks for breaking breaking news there, James.

All right, there we go.

You heard it first.

Okay, so getting back to the extension on foreclosures Because I believe rebny's intention had to do with residential. So maybe we could talk just a little bit about the commercial tenants right now. And I know we were already seeing some challenges with retail, but from a practical matter, it's April 2, landlords are now finding out our rent's going to come in. And unfortunately, with all the confusion that was created with residential tenants, do they have to pay rent? Do they not? Can they get a free pass? You know, unfortunately, I would not be surprised if collections are way down in that department. But what about commercial? I mean, is there any practical guidance that rebny is giving? Or maybe. I mean, we've been on countless conference calls with the various committees at Rebny talking about how commercial landlords are dealing with tenants who, you know, clearly are having challenges right now trying to survive. Any guidance or practical advice that you can give to our listeners on how they might want to address the situations?

Yeah, sure, and I'm happy you mentioned that because, you know, as I mentioned earlier in the webinar, there isn't a commercial mortgage forbearance program yet. And so a lot of property owners are limited, as our business is clearly limited, given sort of the emergency order to more or less shut down your operations. The first thing that we are communicating to tenants, the businesses, property owners, is you gotta have a conversation. You have to have open and honest communication. That goes for the tenants, for the small businesses, for really any size tenant, and that also goes for the property owners. Right now we already saw sort of, sort of changes in the retail market over the past couple years given sort of the advances of Amazon, obviously changing regulatory environment. So property owners are going to want to do everything they possibly can to keep their tenants in place. I have yet to talk to a single property owner who's a revenue member who says, oh, I'm thrilled I can finally get this business out. It's the complete opposite. They're going to do everything they can to do that, but at the same time they also have their expenses to be paid. So the first thing is you got to have the conversation. You've got to make sure that you're, you're discussing sort of what a realistic option is. If there's a record session that could be offered, could rent be delayed until people access the paycheck Protection Assistance program to get revenues in? And so the other thing we've also been doing at Remy is we made sure that anytime we do these communications about accessing these government programs that the property owners and commercial brokers and Other agents are sharing them with the business to make sure they can get access to these funds as soon as possible. They can take care of payroll and they can take care of rent. Perfect.

Okay, so now I want to get to. Well, I guess we're still on New York State or the city as well. The stay, work from home order. Also, the idea of what essential services are. And I believe we might not be breaking this news because I think maybe this was announced yesterday, but are real estate professionals now considered part of essential services? So I know I wrapped a couple of questions into one there, so wherever you'd like to start.

No, that's okay. So maybe it might be helpful for me to. To give background about this whole essential worker issue, because I know there's been quite a lot of confusion about who is essential versus who's not essential. So, you know, I think a lot of this started at Reggie.

I just have to say you're essential. I don't care what you say, please.

Fortunately, I have learned that the entire 54 members who work at REBNY are more essential than ever. I mean, clearly being a rebny, we take a lot of pride in servicing our members, are doing whatever we can to be helpful to them. But, you know, when stuff hits the fan, it's just more important now. And I think we value our jobs more now than ever because we know how critical this information is to make sure that you all can succeed, that your clients can succeed. Because, you know, New York City success is based on industry success and vice versa. Right. Like, I know I'm kind of pontificating here a little bit, so excuse me, but you know, sort of the old rooted family saying of, you know, what's good for New York City is good for the industry and vice versa. I mean, we can't pick up our buildings and move to Jersey City or California. Right? Like, we need New York City to be successful. And that success right now is dependent on making sure that we are available for you, our revenue members, 24 7, making sure we're answering those critical calls at 3 in the morning or those emails at 3 in the morning to make sure you can do business.

And you know what? And I certainly wasn't going to remove you from the soapbox there. I mean, in fact, I'm going to pile on, which is we open this up to everyone in the industry. So for those of you who are rebny members right now, thank you so much for your support. This is what your dollars are going to right now. And you all have Certainly been at the forefront. So we thank you for that. But for those of you who are not REBNY members, join right now. Go check out their site. They give, you know, they provide incredibly valuable information. You've had daily updates on the topics and have incredible resources. I know we were going to see if Neil Garfinkel could join us today. I'm not sure if he's able, but he's in house counsel if questions come up. So incredible resource. And also the, you know, the committees continue to meet. Incredible exchange of information that goes on with the group and just to keep us all at the forefront so we can best provide our clients. So let's see, we're about halfway through, so it was good to do a commercial there. So let's. Okay, so essential services construction job sites are now closed down. So let's talk about what essential means now.

Yeah, and I'm happy you brought, because I think this also has caused another level of confusion, unfortunately. So first and foremost, the governor, rightfully so, issued an executive order that at first mandated that businesses needed to be at sort of like needed to be reduced by 25% and 50%. And then about two weeks ago, a week and a half ago, it went down to 100% where basically businesses and nonprofits needed to use telecommuting or work from home procedures to the greatest extent possible. And that in person, workforce applications had to be reduced by 100%. But that doesn't really take effect for things that I think we all know, like hospitals, gas stations, grocery stores. I mean, the trash still gets to get picked up. Right? And so because of that, you know, you need to have levels of caveats and exceptions to that rule to make sure that for the health and safety of all, everyone in New York, we can continue to provide for that. And so the Empire State Development Corporation has really been the lead agency that's been responsible for putting out buckets of information as to who is essential or exempt from that governor's executive order. And this is a list that changes every couple of days because we're getting new information. Things change all the time. So as an example, one thing that wasn't initially on the list but is on the list is bike shops. I would never have thought bike shops to be essential, but you know, they are. With the amount of people who are traveling via bike, I guess they got to get these things serviced. So in terms of sort of big ticket critical items, maintenance staff has been huge, especially on the residential side because they offer cleaning security. And we have to make sure. That these buildings operate. You know, there was initial tension about construction work. Right. As to what's considered essential versus non essential on the construction side. And so related to that, you know, I think it was earlier this week or last week that the governor announced, ESD announced that they were going to basically stop all non essential construction. And what they deem to be essential are things like affordable housing, public works projects that are emergencies. Maybe if the Department of Buildings gave a violation to a building to correct that emergency order. I guess one of the funniest phone calls I've been getting all week is my friends and neighbors yelling at me about construction that's going on across the street and saying, why is construction still going on? We're supposed to be shut down. Well, no, there are exemptions to that. And even if it's not, let's say affordable housing or hospital work or public work, you can't just simply drop your hammers and walk off a job site. Right. You got to make sure that the site is safe. And so we've heard a number of instances where right now let's say demolition work was ongoing. You can't stop in the middle of demolition. You got to make sure they complete that, that the site is significant, secure, safe, and then you can kind of move on from there. So, you know, it's, it's all about public health, it's all about public safety. There is no real estate industry without having a safe workforce, especially when it comes to construction workers. And we have to make sure that they're protected during this time just as much as anybody. Because if the economy gets up and running, these are folks that got to get back to work to help us build the critical infrastructure needed to handle our, you know, insane population growth.

No question. And I know as I was talking about how important it was to join revenue, I'm trying to remember, did we answer the question on real estate brokers? Are they essential? Can they show space now? What is the feeling there?

Sure. So, you know, our understanding was last night the State association of Realtors put out a notice saying that showings for commercial and residential properties were going to be permitted. The Empire State Development Corporation has not put out their latest guidance on that yet. So we are waiting for them to sort of confirm that. But you know, I think the big thing that we are most concerned about at Rebny is everyone's safety. That's first. Right. Folks need to make sure that they are at home safe. And we've made sure that we've done quite a lot to make sure that virtual showings could happen, that in case closings need to occur, that things could be done as soon as possible. So as an example, whenever you're doing a transaction or closing, oftentimes you need the notary there. You got to have like 12 people in the room, including the bank. And so that's not the right thing to do right now. In the age of COVID we don't want people to be congregated. So, you know, we worked with the governor's office and the attorney general's office to make sure that rules could be loosened a little bit to allow for virtual closings to do things like virtual showings. And that's something that we are going to constantly advise folks to do that. Obviously, if you have the ability to do virtual showings, close the transaction. We're going to give you all the tools possible, both on the regulatory side and on the product side for you to do that and conduct business. But in the meantime, we want to urge you, please stay safe. Even if you don't have symptoms, you can easily spread it. And that's our number one priority of revenue. Perfect.

Could not agree with you more. And I'm hearing from some broker colleagues who are in situations where maybe a deal's in contract, you got to get an inspector in. It might be opening the front door, standing aside, letting them go in. And again, above all, just be safe and smart. So I just have two or three more questions because we want to get to the Q and A. And you all can start filling in that Q and A box if you haven't already. But just to jump back, and I think I missed this before on the federal level, but what type of tax support is available? I know there were some extensions given. I know there was also a provision about where you can take a five year net operating loss carry back. So there was definitely some features that were rolled out from the IRS which should be helpful as well.

Yeah, I'm happy you brought that up because there is few things in life more complicated than taxes and tax deductions. And.

Do we need to say our disclaimer again? Again, this is for information purposes only. Please speak to your attorney. Please speak to your accountant.

Please speak to your accountant because they will be able to give you the best advice possible. One of the things we've told revenue members are we're going to provide you with the playbook, but ultimately it's up to you to determine what the best play to call is for your business and for, you know, your own individual circumstances. So I'll touch on sort of like two quick things. And again, this is where I want to plug the Coronavirus hub on the REBNY website because it actually includes a lot more of the detail about the types of tax deductions or credits that are available. So the first one I would say is the CARES act provided for payroll tax credit for, I believe, 50% of wages paid by employers to their employees during the COVID crisis. And so the credit's available to operations that were suspended either a little bit or completely due to a Covid shutdown. And then also where gross receipts, I believe declined more than 50% when compared to the same quarter in the prior year. So I think that's another big one. The other item is that employers and those who are self employed can defer payment of their a little over 6%, I believe, 6.2% employer share of Social Security tax. So that's another feature in the program by the CARES act that we think could be helpful for a lot of businesses there. Now, you know the provision does allow for it to be deferred but still has to be paid, right? You still got to pay it, but it allows for the deferral of that employment tax be paid over two years. So I believe half has to be done by December 31st of 2021, and then the other half has to be paid by December 31st of 2022. So it definitely gives you a lot of breathing room right there. And then the other item regarding the five year net operating loss carryover, so it's fully expected that a lot of corporate taxpayers are going to suffer losses in 2020. It's pretty clear some corporations and some corporate taxpayers are going to have significant substantial losses. And so to help with the liquidity issue and the financial assistance issue, the CARES act amends normal procedures on net operating losses. So now a company that incurs a loss in 2020 or even in 2019 or 2018, you can now carry back that NOL to the prior five years to help with some of the liquidity issues that they're facing. The other feature of that is I believe previously there was an 80% limitation on the use of NOL carryovers that's been suspended. So that's a good thing. It's been suspended. So you can now have 100% carried over. And that runs through, I believe, December 31st of 2021. So again, that's another sort of feature of the CARES act on the tax side. And again, that disclaimer, make sure you check out the revenue website. Speak to your accountant who can kind of help you walk through the minute details of this because it can get very complicated and very messy very quickly. Perfect.

Okay, so just two more questions for me. So what type of support can New York State accept from the Fed? I heard something that, you know, depending on the number of cases reported, that we should be getting a, you know, as we should, the disproportionate share of the federal support. So any. Anything you can share on that front?

Sure. So you probably have heard from the governor's earlier press conferences. And by the way, for everyone on the webinar right now, I usually don't do plugs for elected officials quite often, but I think around 11, 11:30 every morning, the governor has his press conference. Pretty much everyone at Rennie kind of just stops what they're doing. We don't do calls. We're watching the press conference and we're emailing a real time about it. It's something you should all do because the Governor, I think, has done a phenomenal job of distilling information about what things the federal government has provided, what things we still need. I believe there's something around a $5.8 billion share of the stimulus package or the CARES act for federal resources that were provided to New York State. And there's more that's going to need to be coming right. Right now. New York City is the epicenter of this. The governor has been clear about our personal protection equipment needs, our ventilator needs, the health care needs that we have. So, you know, this is the first phase that we got from the federal government. I think we can fully expect more. But, you know, I think we were, we have, we could always, we could always, we always need more. Right. I think that's sort of the underlying statement and it's something that we're going to be asking all revenue members to help us do in terms of advocacy. You know, for a lot of revenue members, it doesn't really matter about what your politics are. If you're Republican or Democrat or an independent, this is one of those times where we're all going to have to kind of coalesce and push Congress to provide more for New York City and for the real estate industry. And so while you're at home or while you're working from home, many of you have been really good about sort of the one click advocacy modules. And so members of our team, Ryan and Jay, will definitely be in touch with you all for one click advocacy to make sure you help us advocate for more resources.

Absolutely. And thank you for making that available to us. Okay, so last question for me. And now we're just, you know, looking at city support that's available and I don't want to overlook that, but. And to their credit, early on they did announce, I believe, was it $75,000, no interest loans. Is that just for small businesses? And is there anything else that our listeners should be making use of at the city level?

Yep, I'm happy you mentioned that because Greg Bishop, the Small Business Service commissioner, phenomenal. I mean, he's working 247 to help businesses with this. He was on the phone with quite a lot of banks to actually make sure that you could get assistance as soon as possible. A couple of things. So for everyone here, there is an employee retention grant program that's available on city small business website, but also on the Revenue Hub. That retention grant program will officially stop accepting applications on Friday, April 3, tomorrow at 5pm so you have to get your application in before 5pm tomorrow because there's only so many funds that are available and they are getting quite a lot of application. And so in order to be eligible for that grant program, it's helpful for small businesses that have less than five employees. And it covers 40% of your payroll costs for two months. So if you or your clients fit that description, you should apply as soon as possible. It's pretty simple. It's just got to be located within the five boroughs. You have to show that you had at least a 25% decrease in revenue and you have to have been in operation at least six months. And of course make sure you don't have any outstanding tax liens or legal judgments. But again, please, please, please, if you fit that description, make sure you apply. The second item is the Small Business Continuity Load Fund. And so you can get a zero interest loan up to 75 grand to help ensure that your business continues. Again, it's sort of the same description. Make sure that you are operating the five boroughs. Make sure that you show that you had at least a 25% decrease in revenue, don't have any outstanding tax liens or legal judgments, and basically you just have to have less than 99 employees or fewer in total across all your locations. So again, Goldman Sachs, a couple other banks have participated in this. You can get a zero interest loan up to 75,000. I believe that is going on beyond April 3rd. But in terms of that first program, that employee retention grant, make sure you get your application in before tomorrow at 5pm Perfect.

Wow, that was A ton of information. That was awesome. So we're going to now go to the questions. We've got a couple dozen here that I'm going to try to filter through. And if you haven't gotten your question in yet, go to the Q and A box, please. So I noticed we were getting a lot of questions on the payment protection program, the Triple P. Some concern also saying is this just going to lead to a big run on the banking industry? Thank you, Aaron, for that question. I don't know if we can, we're not economists here. But looking at some of the other questions and I don't even. Russ, great hearing from you. I don't know. He says, can a small business apply for both a Triple P and an Eidl loan? I'm not even sure what that is. Do you know what that is offhand, the Eidl loan?

I don't.

Okay. All right. Well, Russ, we'll get you an answer on that. Another question on this.

I mean, sorry, James, really quick. So I mean, I believe it's like the economic injury disaster loan, if you will. And so that's sort of a disaster assistance program that's part of, I believe, the SBA site. So folks, I think can just go on. It's part of the overall package, if you will.

Yes, got it. And we have a question here on if you have a judgment. So can you, can anyone apply or if you have judgments in the past, is that a non starter or how stringent are they going to be on these loans?

Yeah, so I think for the city loan, I mean, judgments, I think it varies on the, I think that was.

On the federal program, on the triple.

Oh, on the federal program. So we're not aware of judgments being counted against you. I have to check the details. But the one thing we've heard loud and clear from Secretary Mnuchin, from the president, from Minority Leader Schumer is they're eager to just, you know, these programs help everyday Americans. And so if you do have a judgment, I get the inkling that they would probably want to work that out with the business. But if it's gonna hurt ability for people to get back onto payroll, I think it's something that I'm sure that they would likely want to work out with that business. And again, I think it depends on the severity of the judgment.

Got it. And Michelle, thank you for the question. And I know I got a couple of these questions in advance also about 1099 brokers. So especially those who are incorporated, they have their own llc if they work at a big brokerage firm, are they still eligible for loans? You know, can attorneys, accountants, architects, brokers. Are they, you know, included or does it have to be at the company level?

Yeah, that's a, that's a really good question. So, you know, for example, the 250% of the monthly payroll average is part of the paycheck protection program. You're likely not going to be eligible for that. However, there is again, if you go to the Rennie Hub, there is sort of the first part of that, which is sort of the emergency funding. And I believe you can have access up to $10,000 for your business. If you're an independent contractor, you're not going to be eligible for the larger fund of 250%, but you will. You should be eligible for, I believe, up to $10,000, that sort of initial emergency funding that I believe the paperwork is pretty, pretty small in that one. Great.

By the way, all these questions, if we don't have the answers, I mean, part of this also is for us to know what to ask and if you all have any ideas on things that could help us all get through this, Revni is happy. I know I bounced a lot of ideas off Reggie, whether it's six in the morning or three at night, and somehow he's always responding. So it might. You might have cloned yourself, Reggie. Okay, so we've got, I've got a borrower and a lender here with two questions, so maybe I should just put them together. But I've got one question on how do you get a Triple P loan? They've reached out to some lenders, but if they don't have a relationship with them already, they're not making any headway. And meanwhile, the lender question is they need to be provided with instructions on how to go about these loan applications. Sounds like there's still some questions on how to actually process these loans.

Sure, those are really good questions on that front. So first, in terms of sort of the instructions on how to process these loans, one things REBNY is working on is having almost like a separate webinar to actually show people in real time how exactly to apply. Also, when things become live tomorrow, we're going to obviously go through the site ourselves and try to figure out how we can communicate to members in as easy as a way as possible to go in and apply. We've had some really good questions come in where, for example, people weren't sure whether or not they should be putting in their ein as it related to The Pandemic Relief Fund. And so because of that, we put out resources or guides on actually how to fill this out with red arrows and clear instructions. So thank you for bringing that up. And as we roll out more resources, we'll make sure to incorporate that.

Okay, so, and Aaron, thank you for the questions. I know you had concerns about the banking industry, but also asking about the deficit. So I believe your former borough president, who you work with, Scott Stringer, has been sharing some statistics. I think I heard 6, $7 billion of deficit at the state level. Obviously, the city's budget has really expanded over the last couple of years. So how do we think about that?

Yeah, it's scary to think about, I'll be honest. I mean, this is why I think we're getting a level of tension on, for example, the property tax proposal, the payment proposal to help businesses and property owners, help those businesses get back into place. This is going to be scary for a couple of months. I'm not going to lie about that. I don't want to sugarcoat it for Everybody. State Comptroller DiNapoli had forecasted billions of dollars in sort of revenue losses. We see this at the city level as well. And it also puts pressure because the city has to have a balanced budget. Fortunately, there have been a number of savings efforts by the city over the past couple of years to either like prepay other to prepay expenses to kind of carry over extra money in the balance sheet, which I think could be helpful, but it's going to be blown through pretty quick. So, you know, it's important that we as an industry, as we have interesting policy proposals to help government weather this, that we kind of put that forward. We've been in constant communication with the mayor's office and the deputy mayors to see how we can be of help. But, you know, the city budget is going to have to be passed by June 30th of this year. It's something that's required by law. The books have to be balanced. And so, you know, we're already looking at sort of what potential pitfalls we're going to have in ensuring that government can continue to operate while also operating a deficit. Perfect.

Two quick questions on the REAP and ICAP. My understanding is they will be extended to 2025 and yes, self storage will no longer be able to apply for icap. Is that correct?

That is correct, yeah.

Because the whole nature of this is it has to be job creation. And I guess they don't feel that self storage satisfies that enough Although you could make the case, you know, construction jobs, you know, so again, we won't get political here, but just, you know, that has been taken out. Mark, great to hear from you. What banks are working with SBA loans. Maybe Reggie Remney could help, you know, put together a list of who the lenders are who are doing these 7A loans. Would that, would that be possible?

Yeah, we could definitely help facilitate that. My understanding was that it was, it was central to the SBA site. But again, let me, let me go back to the team and that's helpful if we can actually just provide sort of the direct access to you all so you don't have to go through eight different government bureaucratic sites. We're happy to do that. So just writing that down is something we can provide to folks.

Awesome. Hey, Ash from Property idx, and thank you for publicizing this webinar as well with your network. I know you've been putting a lot of great content out as well. You're asking about. And it's interesting. I was going to ask this question, too. There was so much to cover with what's going on now. But, I mean, Reggie, we know the last year or two have been a little choppy waters between rent reform, good cause, eviction, all these other actions. I mean, do we think now with all these challenges that there might be, you know, some thought to give some relief to landlords who are, you know, this clearly makes it even more challenging now for them to operate their buildings when they no longer have the ability to vacancy decontrol?

Yep, I think that's a great question. I think the best way I can answer that is tell you about a conversation I had last night. So I had a conversation late last night with an elected official, chief of staff and elected official, and they were saying, what more can we do for smaller property owners? Because we're already seeing that, you know what, they definitely did lose quite a lot of revenue to make capital improvements because of the Housing Stability act last year. And so there is an acknowledgement, I think, by some elected officials that, you know what, how can we ask property owners to do things like forgive rent or cancel rent or whatever crazy hashtag we have these days. If we've already put them into a squeeze right now because of sort of last June and sort of the fallout, like I said at the beginning of the call, if you can't measure it, you can't manage it. And the first ream of data as it relates to the effect of the Housing Stability act from last June is going to be in July. Right. Like there's always a one year lag in data. So I think that's one thing that we'll be looking to, to make a policy case to elected officials to, to relook some of the hurtful changes that were made last June. You know, I did have a number of conversations with elected officials about things like broker fees, which your brothers and sisters on the residential side are dealing with right now, and things like rent control. And I think the message has been clear that right now we got to focus on Covid and some of these other proposals that are low hanging fruit on the other side that we're imminently going to get past. Those have been kind of put to the side while they focus on sort of working together with the real estate industry to get the city's economy back up and running.

Perfect. Okay, this is a note from Laura Jackson, president of YMW REA and from FTI Consulting. It's good that we've got some accountants on the line too. So she reminds us you have to be careful with the triple P and the payroll tax credits as you can't take both. Look into the details and maximize which ones work best for the business. Thank you Laura for sharing, Laura, for.

Saying that, thank you.

That's awesome. And again, if anything that we're saying needs clarifying and it's your point of specialization, please chime in. Aram, great to hear from you. Doesn't Triple P preclude other reliefs? That is Employment retention tax credit, payroll tax. So he picked up on the same thing. There you go. Okay, someone's asking, can you confirm there's a deadline for the triple P application tomorrow or was the deadline for a different program? So I think you said that the deadline for the city is tomorrow. The Fed is not even rolling out the triple P until tomorrow. So do we know how long you'll have to apply for the federal program?

So I believe you're going to have quite some time. I mean at least a month or two, I want to say. At least because a lot of the benefits last through the end of the year. Some of the provisions require that you get back to pre pandemic headcount levels before June 30th. So you know, there's opportunity. It's not going to be like a one week mad crash and then you're out. It'll be going on for a while.

Perfect. So I don't know if all of our listeners can see the Q and A or just the chat, but Matt, olden thank you for sharing the link on SA sba. If you want to, on the off chance that you all can't see the questions being asked, if you want to put that on the chat just so people thank you for doing that. So I'm assuming that's a list of where the lenders are. So that's super helpful. Let's see. Oh, boy. Okay. Trying to just scroll through these questions. I think we have hit a lot of these. We did a really good job because we covered a lot of the earlier questions here. Oh, force majeure. We're getting. We've had a lot of questions about that and business interruption service and we are at the top of the hour. So maybe we can close it out on any thoughts on force majeure. And then I know it's Rebny's recommendation to file for business interruption service even if you don't think you qualify right now.

Yeah, I'm happy you brought that, brought that up, James. Because as all of you know, I mean, with a lot of insurance policies, pandemics are not included. And what we've also heard is that some insurers actually included that in as early as her last fall, last December, as they saw what was happening in China. So the one thing that we recommended is no matter what, just put it in, no matter what. Even if you initially get denied, at least there is a record you've attempted to apply for this insurance. We don't know how fruitful it will be down the road. But it's one of those things, if you can do it, do it now. The other thing is obviously there are quite a lot of issues related to the legal instances of other business is required to pay rent, not required to pay rent, force majeure and all that other fun stuff. I can't give you a legal answer on that. What I can tell you is that there is quite a lot of discussions from their attorney side, from the tenant side, from property owner side who are all scrubbing their current contracts right now to try to find out the details of those clauses. And what it does and doesn't apply to is we've talked to, at least I have talked to five different attorneys who have given me three different answers on that. So it's one of those things where I cannot urge you enough, hard enough, make sure you get in front of a reputable attorney who can advise you through that process.

Awesome. Reggie, this has been phenomenal. Thank you. Thank you for everything you do. So much information. I'm feeling a lot more hopeful I know our viewers are as well. And just again, urging everyone, if you are not a rebny member, you have to go in right now, get your membership. I know there's even discounts for new members. Get involved. Even though we're not able to meet in person right now, the committees are all happy virtually and just get involved. I mean, we all need to support the great work that you are doing. So thank you and I'll give you the last word out if there's anything else that I missed.

No, I just want to thank you, James. Honestly, like, you know, not to, you know, not to overdo it, but you've been phenomenal in providing information to rebny staff about what's happening in the real world market. All the rebny members have done that. Just yesterday we were on a commercial retail call with two dozen people doing a virtual zoom meeting where you're able to provide us information so we can be the best advocate for you. I discovered your LinkedIn page, which has been incredibly helpful for me in terms of all the work that we're all doing. So we're all in this together. If you have feedback for us at redmi, if you want to let us know you have questions or latest information about how you're handling sort of the market trend right now, we're eager to hear that. And please, please, please, please, even if you're not a rebny member, just go to the Corona hub. The latest information is always up there. We're updating it all the time. So please make sure you're up there to get the latest information. If you have any questions, we're always here to be a resource for you. So again, thanks for this opportunity.

That's awesome, Reggie. Thank you all for listening. We're gonna try to make this recording available for you all to share with friends and just appreciate everything you are doing out there. And just everyone please continue. Continue to stay safe and we hope to see you again in person soon once we all get through this. Thank you so much.

Thank you for tuning in this week to Real Estate Investing live from New York. Please join your host, James Nelson for another program next Tuesday at 7pm in New York, 4pm Pacific Time on the Voice America Business Channel. All shows are rebroadcast Wednesday mornings at 7:00am Eastern Time, 4:00pm Pacific Time, as well as always on demand. We'll talk again next week.