Key among these is making the disaster zones eligible for special, longer-term tax treatment similar to the "enterprise" or "renewal" zone provisions included in post-9/11 tax relief legislation. Easing the cost of what are expected to be massive environmental cleanup efforts is another. Federal agencies reportedly are working to contain as many as six oil spills in Louisiana — including one involving 600,000-plus gallons of crude oil seeping across a densely populated residential area covering some three square miles, which could potentially require the destruction of up to 4,000 homes.
In letters to Senate Finance Committee Chairman Charles Grassley (R-IA) and House Ways and Means Committee Chairman Bill Thomas (R-CA) on Sept. 9, The Roundtable outlined some of the special challenges facing public and private rebuilding and reconstruction efforts in the affected areas. These include the difficulty of accurately quantifying long-term rebuilding costs, the sheer volume of structures in need of replacement or repair, and expectations of a compressed timeline for action.
"With hundreds of buildings to replace or repair, the strain on all aspects of development -planning, permitting, design, capital investment, financing, demolition, environmental remediation, site preparation and construction — will be unprecedented," stated Real Estate Roundtable President and CEO Jeffrey D. DeBoer. "Adding another dimension of difficulty to this will be a desire to rebuild and repair in a timeframe far more compressed than that within which such a scope of development would normally occur," he added.
Tax policy issues raised in The Roundtable letter to congressional tax-writers include the depreciation treatment of buildings and tenant, or "leasehold," improvements; deductibility of environmental cleanup costs (including those relating to the cleanup of petroleum contamination); demolition costs; amortization of pre-construction costs; tax-exempt financing; and involuntary conversions.
As in other areas of environmental policymaking (e.g., spurring the cleanup and reuse of moderately contaminated "brownfield" sites and encouraging energy-efficiency in commercial buildings), The Roundtable believes public-private partnerships and targeted tax incentives can play an important role in the long-term cleanup and redevelopment of hurricane-damaged areas in Louisiana and surrounding states.
Roundtable members are the chief executive officers of the nation's leading public and private real estate firms and the financial institutions and investment companies that lend to and invest in real estate. Leaders of the national real estate trade associations are also members of The Real Estate Roundtable. Collectively, Roundtable members hold portfolios containing over 5 billion square feet of developed property valued at nearly $700 billion.
