Global Public Policy
In a written statement submitted this week to the Senate Banking Committee, ICSC President & CEO Tom McGee advocated for more relief for commercial real estate via legislation such as the Small Business Comeback Act, the RESTART Act, and the HOPE Act, while also urging policymakers to create a federal liquidity facility.
The hearing on the status of the Federal Reserve Emergency Lending Facilities was led by Committee Chair Mike Crapo (R-ID), who said that the goal of the hearing was to examine the impact of the Main Street Lending Program (MSLP) and concerns that the hard-hit commercial real estate industry is not able to access many of the current loan facilities.
“Congress should allocate unused Title IV CARES Act funds and direct the Federal Reserve and Treasury to create a preferred equity program for CRE borrowers, either as part of MSLP or as a separate facility. We believe a temporary liquidity bridge to combat the current, market distortion in certain CRE sectors is critical. To this end, we support the program established by H.R. 7809, Helping Open Properties Endeavor (HOPE) Act or a similar model,” McGee wrote.
ICSC has also requested that U.S. Department of Treasury and the Federal Reserve expand the eligibility standards for the MSLP, removing the limitation placed on commercial rental real estate businesses due to the misguided use of the SBA 7(a) loan eligibility standards, as well as modifying the EBITDA underwriting metrics.
In addition, ICSC believes Congress should allocate unused Title IV CARES Act funds and direct the Federal Reserve and Treasury to create a preferred equity program for CRE borrowers, either as part of the MSLP or as a separate facility.
Hearing witnesses included Hal Scott (President, Committee on Capital Markets Regulation), Jeffrey D. DeBoer (President and CEO, The Real Estate Roundtable) and William Spriggs (Professor of Economics, Chief Economist, Howard University, AFL-CIO).
DeBoer reiterated key industry issues made by ICSC and other groups, namely that the metrics of MSLP underwriting need to be reformed to better reflect the types of businesses that desperately need Main Street assistance – such as manufacturing, retail, restaurants, real estate owners, and other asset-based borrowers.