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Berkley, Nunes Introduce Community Recovery and Enhancement Act

Press Release

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Location: Washington, DC

Seeking to increase investment in America's small businesses, Congresswoman Shelley Berkley (NV) and Congressman Devin Nunes (CA) have introduced H.R. 1147, The Community Recovery and Enhancement (CRE) Act. The bipartisan legislation provides a market-based incentive for private investments in distressed commercial property at a time when many owners and businesses are still struggling in the on-going economic downturn and are in need of new sources of capital.

"Las Vegas has seen a sustained downturn in the commercial real estate market as a result of the economic collapse and delayed recovery in Nevada and other states that have been hit the hardest. Our legislation provides a valuable incentive to encourage more private investment in commercial property as a means to allow owners to pay down loans and fund improvements," said Berkley. "This is a win-win-win that will give the commercial real estate sector a boost while opening new avenues for investors to provide needed capital to American businesses and improving the position of our struggling financial institutions."

"The commercial real-estate market is in crisis in many American communities. This temporary investment incentive is needed to breathe life back into a sector of our economy that offers good employment and significant local benefits," said Nunes.

The CRE Act seeks to attract new capital for existing real estate projects by providing a tax incentive in the form of immediate depreciation on qualifying investments. Under the Berkley-Nunes bill, at least 80% of an investment must be used to lower commercial mortgage debt secured by commercial property. Remaining funds may be spent on improvements such as increased energy efficiency. Those who invest negotiate a share of ownership in the business that receives the funding and are allowed a one-time 50% bonus depreciation deduction.

"At a time when many banks are already struggling with their commercial real estate loan portfolios, this bill gives an attractive incentive for new investments in shopping centers, office buildings, malls and other commercial real estate," said Berkley. "My goal is to encourage businesses to seek out private sector sources of funding for their commercial property by providing them an incentive. Even though this is private money being used for private business investments, there is a benefit to Nevada and other states with sagging commercial real estate markets. The investment it spurs will help commercial property owners find the capital they need to avoid foreclosure or having to raise the rates they charge commercial tenants in order to meet lending requirements."

The Community Recovery and Enhancement (CRE) Act has the support of ICSC, the International Council of Shopping Centers (www.icsc.org).

"ICSC appreciates the recognition by Congress that this challenge is still very critical to the commercial real estate sector," said Betsy Laird, ICSC's senior vice president of global public policy. "We support this temporary and targeted legislation as it incorporates market factors and economic incentives, rather than direct government involvement. To date, small and medium size commercial real estate businesses have been left out of government programs designed to stimulate the economy. The CRE Act offers owners of commercial real estate a helping hand by moderating their loan structures, and in turn, frees up additional capital for the economy at large," Laird added.


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