Federal relief elusive for now, ICSC continues advocacy efforts

In recent weeks ICSC members urged Congress to pass a second round of COVID-19 economic stimulus. (Click here to amplify that message.) In spite of their efforts and the “No Relief, No Recess” message from ICSC and our allies in the broader business community – hotels, restaurants, retail, airlines, hospitality, as well as the public sector groups representing states and municipalities – the Administration and Congress have failed to reach an agreement despite months of ongoing negotiation. 

On October 6 the Federal Reserve Chairman, Jerome Powell, called for more fiscal stimulus and said that the risks of Congress pouring too much stimulus into the economy are far lower than not doing enough. Yet hours later conflicting signals were released from the White House regarding the future of additional COVID-19 economic support. At this writing, it is unclear whether there will be any forward movement before the November 3rd election. ICSC will use this time to continue our advocacy efforts on behalf of the industry and illustrate why assistance is needed.

ICSC’s Legislative Priorities include the following:

Urgent Economic Support for Essential Business Expenses

• The Paycheck Protection Program (PPP) funds have run out and impacted local businesses need access to additional PPP capital to cover payroll and other essential business expenses like rent.
• Address the complexity associated with loan forgiveness and remove the unnecessary bureaucracy facing small businesses.
• In the long run, ICSC continues to support a national grant program for all impacted businesses as created by H.R. 7671, the Small Business Comeback Act or a more robust version of PPP, as called for in S. 3814/H.R. 7481, the Reviving the Economy Sustainably Towards A Recovery in Twenty-twenty (RESTART) Act.

Commercial Real Estate Borrower Relief/Clarification of Title IV and the Main Street Lending Program (MSLP)

• Revise the MSLP’s eligibility standards and underwriting methodology to be consistent with conventional CRE lending metrics, such as debt service coverage ratio, net operating income, or loan to value.
  • Non-owner occupied real estate entities are expressly excluded from PPP and the MSLP.
• Direct the Department of Treasury and the Federal Reserve to use existing funds allocated under Title IV of the CARES Act to create a separate temporary liquidity facility for commercial real estate borrowers.
  • We support H.R. 7809, the Helping Open Properties Endure (HOPE) Act and S. 9670, legislation to provide a federal guaranty to financial institutions based on the purchase of preferred equity in commercial real estate as a stand-alone program. Due to the restrictive nature of CMBS loan covenants, preferred equity in the underlying asset instead of debt is an important consideration.

Business Liability Relief

• Create clarity in rules and regulations to ensure the safety of their employees and customers and prevent unnecessary litigation. Congress should enact a safe harbor for businesses or a federal pause in all COVID-19-related negligence lawsuits.

Targeted Tax Relief 

• ICSC supports providing liquidity through the tax code to struggling business, such as:
  • extending net operating loss relief
  • providing a tax credit to defray the additional cost of disinfecting and safety equipment to protect workers and customers
  • updating REIT rules to allow property owners to invest in struggling tenants
  • exempt taxation on phantom income from loan modification, forgiveness or cancellation.

For more information, email gpp@icsc.com.