The Rulebook For Short-Term Rentals

The short-term rental market is becoming more popular, and questions are increasing on the regulatory environment around short-term rental investment properties. We sat down with Rob Stephens of Avalara MyLodgeTax to ask about the investment potential for short-term rentals and what interested investors should know before getting in the market. In this exclusive interview, Stephens tells GlobeSt.com all about the investment potential, tax requirements and laws pertaining to the short-term rental market.

GlobeSt.com: Short-term rental properties have recently grown in popularity. How do you define a short-term rental and why would someone consider this as an investment option?

Rob Stephens: There are several options homeowners have to make extra income. For those looking to purchase a second home, often called a vacation rental home, renting out to vacationers is a great way to afford purchasing an additional property. Not to mention, for a growing number of travelers, renting a private home is the only way to go and typically offers more choices, comfort and privacy than hotels, and often cost less as well.

There’s no question that the vacation rental business is booming. In the United States alone, revenue in this market is approaching $18 billion, with a projected annual growth rate of 6.6%.

GlobeSt.com: Is a vacation rental a smart investment?

Stephens: Buying a vacation rental home can be an attractive investment option. Not only will you have a place to call home in a location you already love and visit frequently, the property can be an excellent source of income for you between visits. The income from travelers renting your property will often cover a significant portion (if not all) of your ownership costs while you reap the benefits of long-term appreciation.

Of course, your rental only generates income when it’s occupied. Popular websites like Airbnb and HomeAway connect guests to your property and offer tools to make interacting with your renters and managing your property easier. If you’d rather not do it yourself, a property management company can help with finding renters, handling logistics and maintaining the property between guests.

Keep in mind that, unlike stocks, real estate is not a liquid investment. Buying and selling a home takes time and involves transaction costs. There is often a lot of negotiating and compromising to be done as well. That, however, hasn’t stopped millions of people from turning their short-term vacation homes into incredible long-term investments.

GlobeSt.com: What laws do prospective short-term landlords need to know or look for before becoming a short-term rental operator?

Stephens: The rapid rise in short-term rentals has caused some communities and homeowner associations to restrict or even ban them. Many communities prohibit owners from renting out their homes for fewer than 30 days. If you’re not in an HOA community you’ll likely have more leeway, but some cities and states are starting to impose regulations on vacation rentals as well.

It’s the owner’s responsibility to learn about short-term rental laws, and failure to comply with those regulations may result in fines and other penalties. While researching changing local regulations can be challenging, a call to your HOA property management company, a visit to your city hall website and conversations with local friends and neighbors who use their home as a vacation rental can help provide clarity. There are also technology platforms that track changing regulations and fees. Do your research prior and ask experts in the short-term rental space about these types of questions.

GlobeSt.com: What should prospective landlords know about taxes and fees?

Stephens: As a short-term rental property owner, you are responsible for collecting any local lodging taxes required in your area. State and local lodging taxes can vary widely, and can change with little notice. Understandably, it can be very confusing and risky to try to keep up with them on your own.

This is where a lodging tax compliance automation tool can be invaluable. The right lodging tax software can manage the complexities of your tax and business requirements in your specific location—so you can focus on managing your property. The right tool will offer a full range of solutions, including determining the vacation rental taxes and reporting requirements as well as calculating and filing returns on a monthly or quarterly basis.

GlobeSt.com: When do you collect these taxes, and from who?

Stephens: If you do decide to purchase a vacation property with an eye toward short-term rentals, the short answer is anyone who rents from you. Whether you or your property is located in California, Maine or anywhere in between, the local and state lodging and occupancy taxes must be remitted to remain compliant. Many real estate investors overlook the fact that lodging or occupancy taxes need to be paid in order to rent the home in compliance with city and state tax agencies. Short-term rentals can offer much greater income potential, but liability can add up quickly if these taxes are not collected and remitted on time. When you enter the short-term rental market, lodging tax collection will need to be a part of every rental agreement and transaction you make.

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Volcker Rule revision could ease curbs on secondary mortgage market making

The Federal Reserve proposed revisions to the Volcker Rule on Wednesday.

The Volcker rule, which is part of the Dodd-Frank Act, prohibits banking entities from engaging in proprietary trading and from owning or controlling hedge funds or private equity funds. The Fed noted in its request for comments that the complexity of the rule has led to confusion about how to implement it. “The proposal will address some of the uncertainty and complexity that now make it difficult for firms to know how best to comply, and for supervisors to know that they are in compliance,” Chairman Jerome H. Powell said.

Constrained Market-Making

The CRE Finance Council has maintained that the the Volcker Rule is one of several regulations that has led to constrained secondary market-making. In an alert published in response to yesterday’s proposal the association noted that “in its current form, the Volcker Rule impinges upon the ability of banks to hold requisite inventories of secondary market securities, including commercial mortgage-backed securities, thereby damaging market liquidity.”

To be clear, the rule doesn’t restrict banks from trading and buying, but they have become very cautious about this activity “rather than mistakenly running afoul of the rule,” according to comments submitted to the Office of the Comptroller of the Currency last year by several trade associations that represent the commercial real estate industry. In its own separate comment, the Mortgage Bankers Association said that the rule “has hindered both market making functions necessary to ensure a healthy level of market liquidity and hedging necessary to mitigate risk.”

Executive Director of CREFC Lisa Pendergast said that the association will work with regulators and its own members “to develop a more efficient compliance regime that returns the appropriate level of liquidity to securities such as CMBS…a level that has been lacking post the enactment of the Volcker Rule.”

What The Proposal Says

Specifically, the proposed changes would:

• Tailor the rule’s compliance requirements based on the size of a firm’s trading assets and liabilities, with the most stringent requirements applied to firms with the most trading activity;
• Provide more clarity by revising the definition of “trading account” in the rule, in part by relying on commonly used accounting definitions;
• Clarify that firms that trade within appropriately developed internal risk limits are engaged in permissible market making or underwriting activity;
• Streamline the criteria that apply when a banking entity seeks to rely on the hedging exemption from the proprietary trading prohibition;
• Limit the impact of the Volcker rule on the foreign activity of foreign banks; and
• Simplify the trading activity information that banking entities are required to provide to the agencies.

“By focusing the application of the rule on those firms with the highest levels of activity covered by the statue, and by clarifying and simplifying the compliance regime, we can promote safety and soundness while reducing unnecessary burdens,” Randal K. Quarles, the Board’s Vice Chairman for Supervision, said.

What Happens Next

There are several steps that have to take place before these revisions go into effect and they are happening at a rapid pace. The Federal Deposit Insurance Corp. is voting on the rule today. The Securities Exchange Commission is holding a board meeting today and the Commodity Futures Trading Commission has one scheduled for next week, although neither has announced their agendas.

It is expected that three agencies responsible for the rule — the Office of the Comptroller of the Currency, the SEC and the CFTC — will sign onto the Fed’s revisions in the near future, CREFC said.

https://bit.ly/2J5SI9h

Extended Stay America upgraded on strategy by Morgan Stanley

Extended Stay America upgraded on strategic action potential at Morgan Stanley. As previously reported, Morgan Stanley analyst Thomas Allen upgraded Extended Stay America (STAY) to Overweight from Equal Weight, noting that company management highlighted at a recent conference that it could follow a similar path to La Quinta (LQ), which recently announced plans to shift from an asset-heavy, single-brand Lodging company to a REIT. Assuming hypothetically that Extended Stay followed a similar course, Allen sees a $24 value, he tells investors. Allen increased his price target on Extended Stay shares to $23 from $21.

https://bit.ly/2J4RzyX

Wrong People May Benefit From $1.1B Energy-Efficient Building Tax Deduction

Who should benefit most from the tax break designed to promote sustainable building development done by public entities? The entities themselves, or the private companies that work with them on the jobs?

These questions are at the heart of an ongoing feud about how to interpret and apply Internal Revenue Code 179D, the New York Times reports.

Over the last five years, the tax break was worth about $1.1B, according to the Joint Committee on Taxation.

On one side are taxpayer-funded schools, prisons, military bases and libraries nationwide; on the other, contractors, but also the consulting firms that handle certification and filing requirements.

The 179D incentive dates back to the Energy Policy Act of 2005, just as the idea of sustainable buildings was taking hold. Originally meant as a temporary measure, the incentive has been renewed a number of times since then.

The idea was to give tax deductions, worth $1.80/SF, to building owners who invest in energy-efficient building improvements. That is worth something to entities that pay taxes to the federal government.

Public entities that do not pay taxes were given the option of transferring the deduction to a private entity involved in designing or building a development’s sustainable features (a contractor that installs a greener HVAC system, for instance).

The law did not specifically say that the private entity had to pay for the deduction, either by reducing the fee it charged or through some kind of rebate. Public entities have supported that interpretation, while some private entities — such as the American Council of Engineering Companies — do not, contending that paying public entities for the deductions is ethically questionable.

In at least one case, the dispute has gone far beyond a disagreement about the interpretation of the tax law, and into court in a battle between well-funded and well-connected entities.

Last year, the University of Texas and the University of Houston systems filed a lawsuit against tax-credit consulting firm Alliantgroup, accusing it of misleading “thousands of government entities” into signing over tax deductions to Alliantgroup’s clients, the Houston Press reported. Alliantgroup denies the allegations, telling the Houston Press that the university systems “have been led into a frivolous lawsuit.”

https://bit.ly/2xrtjpj

MGM To Acquire Yonkers, NY Empire City Casino, Raceway For $850M

Empire City Casino features more than 5,200 slots and electronic table games, multiple dining outlets, and both live and simulcast horse racing.

MGM Resorts International and MGM Growth Properties LLC have reached an agreement to acquire the Empire City Casino here in a deal valued at $850 million.

The sale, which is expected to close in the first quarter of 2019, calls for the MGM entities to acquire both the casino and raceway operations at the 97-acre Empire City property located off the New York State Thruway in southern Westchester County. MGM Resorts controls and holds a 73% economic interest in the operating partnership of MGM Growth Properties LLC (MGP).

As part of the deal, MGP will lease back the property to a subsidiary of MGM Resorts, which will operate the property.

A codicil of the agreement is that MGM Resorts has agreed to pay an additional $50 million if Empire City is awarded a license by New York State for live table games on or prior to Dec. 31, 2022 and MGM Resorts accepts such license by Dec. 31, 2024.

The acquisition will expand MGM Resort’s reach into the high-density New York City region, says CEO and chairman Jim Murren in a prepared statement. The transaction should enhance the company’s free cash flow profile and present attractive future opportunities, he also said.

Last November, the Rooney family, the owners of Empire City Casino, announced it hired JP Morgan Securities LLC to explore strategic alternatives, including the possible sale of the property. Tim Rooney, Sr., president and CEO of Empire City, says the agreement with MGM is the culmination of the JP Morgan study.

“Our vision for this property has always been to develop it into one of the world’s greatest entertainment destinations,” Rooney says. “We have been a partner of New York State and its communities for 46 years, and it was important to us that we identify an entity that could build on the strong foundation we have established and bring our vision to fruition.”

Empire City Casino boasts the sixth largest gaming floor in the country, and reports approximately 8 million visitors annually and a workforce of more than 1,200. Empire City Casino features more than 5,200 slots and electronic table games, multiple dining outlets, and both live and simulcast horse racing.

The New York State Gaming Commission awarded three casino licenses in Upstate New York in December 2015, including one in Sullivan County. That casino, which now operates as Resorts World Catskills, is the furthest south of all the operating full casino gaming facilities in New York. At the time of the award, gaming analysts and some state officials contended that New York would perhaps award a downstate casino license in as little time as seven years to one location in the New York metro region that would include locations in Westchester County and further south to the five boroughs of New York City, Nassau and Suffolk counties. However, there is no clear timeline when and if the state would entertain further resort gaming license applications in the New York metro region.

Dan D’Arrigo, EVP and CFO of MGM Resorts International says that following the sale, the net purchase price to MGM Resorts will be approximately $225 million, which represents less than six times adjusted EBITDA.

For the 12 months ended March 31, 2018, Empire City reported approximately $230 million in net revenues and approximately $70 million in adjusted EBITDA.

The transaction’s finer points include that MGM Resorts has agreed to sell the developed real property to MGP for total consideration of approximately $625 million, which will include the assumption of the approximately $245 million of debt refinanced by MGM Resorts and the balance through the issuance of operating partnership units to MGM Resorts based upon MGP’s closing price of $29.38 as of May 25, 2018. In addition, MGM Resorts has agreed to give MGP a right of first offer with respect to certain undeveloped land adjacent to the property to the extent MGM Resorts develops additional gaming facilities and chooses to sell or transfer the property in the future.

Empire City will be added to the existing master lease between MGM Resorts and MGP, and the annual rent payment to MGP will increase by $50 million. Consistent with the master lease terms, 90% of the rent will be fixed and contractually grow at 2% per year until 2022. The purchase price represents a cap rate of 8.0%, or a 12.5x EBITDA multiple.

The MGM Resorts portfolio encompasses 28 hotel properties. The company in 2018 opened MGM COTAI in Macau and the first Bellagio-branded hotel in Shanghai. It also is developing MGM Springfield in Massachusetts.

MGM Growth Properties is a publicly traded REIT that currently owns a portfolio of 11 destination resorts in Las Vegas and elsewhere across the United States. As of Dec. 31, 2017, the properties collectively comprise more than 27,500 hotel rooms, 2.7 million convention square footage, 100 retail outlets, 200 food and beverage outlets and 20 entertainment venues.

https://bit.ly/2ITetwU

Kite Eyes More Worldwide Facilities, Links To National Cancer Institute

Kite, a Gilead Company (Nasdaq: GILD), today announced it has leased a new facility in the Netherlands to engineer cell therapies in Europe. The 117,000 square-foot site in Hoofddorp (SEGRO Park Amsterdam Airport) will enable Kite to efficiently manufacture and deliver its cell therapies to people living with cancer in Europe and will provide more than 300 new jobs when fully operational in 2020.

The facility will engineer and produce innovative cell therapies, including axicabtagene ciloleucel, a Chimeric Antigen Receptor T cell (CAR T) therapy that is currently under review by the European Medicines Agency and which is approved in the United States as Yescarta^®.

“We are pleased to be leading a new frontier of cancer innovation that is bringing hope for people living with cancer,” commented John F. Milligan, PhD, Gilead’s President and Chief Executive Officer. “This new European manufacturing facility will enable personalized cell therapies to be manufactured in closer geographic proximity to the patients who will receive them, potentially shortening the turnaround time for people who urgently need care.”

In addition to the Netherlands facility, Kite has recently purchased a new building in Santa Monica from Astellas Pharma Inc. that will be used for cell therapy research, development and the expansion of clinical manufacturing capabilities, and has leased a 26,000 square-foot facility in Gaithersburg, Maryland. The Maryland site will support the work of a new Cooperative Research and Development Agreement (CRADA) with the National Cancer Institute (NCI) to develop adoptive cell therapies targeting patient-specific tumor neoantigens. Neoantigens are mutations found on the surface of cancer cells that are unique to each person and tumor, offering the potential for more targeted antitumor activity.

“We are proud to be at the forefront of advancing cell therapy, which we believe has the potential to transform cancer treatment,” said Alessandro Riva, MD, Gilead’s Executive Vice President, Oncology Therapeutics & Head, Cell Therapy. “The addition of these three new facilities and the expanded CRADA with our research collaborators at the NCI will help us bring cell therapies to more people with cancer around the world.”

https://bit.ly/2xk5L5s

Rural NC Has Growing Pains as Novo Nordisk Builds Manufacturing Plant

In late March, Novo Nordisk broke ground on a new manufacturing facility in rural Clayton, North Carolina. It’s not unusual for small communities to both welcome the jobs and business, while expressing concern over the changes to the community, and Clayton is no different.

The manufacturing plant will make active pharmaceutical ingredients (API) for several of Novo Nordisk’s current and future GLP-1 and insulin medicines for diabetes patients. The plan is expected to be fully operational in 2020.

The facility will have 833,000 square feet with a footprint of 417,639 square feet. It is expected to create almost 700 new jobs, bringing the total to 1,700, which is exceptional when you consider that in the 2010 census, Clayton had a population of 16,116, currently around 20,000.

The jobs will have an average salary of $68,000, which is $22,000 more than the current average salary and $15,000 more than the median household income in Johnston County. The company also projects an employment effect during the construction period of up to 2,500 people.

The new site is adjacent to Novo Nordisks’ 457,000 square feet Clayton facility, which has expanded several times since 1996. Novo Nordisk is investing $2 billion into production facilities in Clayton; Malov, Denmark; and Kalundborg, Denmark, with most of it, $1.8 billion, going into the Clayton site.

Still, it’s a bit of a change for the community. The town’s mayor, Jody McLeod, told STAT,“We’ve gone from the farm to the pharm. I used to work in the tobacco fields during the summers. Then those tobacco fields became subdivisions. Then the industry came in.”

It’s not as if the area is unfamiliar with biopharma. It’s basically a suburb of Raleigh, and not far from Durham and Research Triangle Park. This is an area rife with biopharma companies, including Argos Therapeutics, BioAgilytix Labs, bioMerieux,FUJIFILM Diosynth Biotechnologies, and others.

Roger Hill, a minister at the Powhatan Original Free Will, the 130-year-old Baptist Church in the area, tells STAT,“They’ve been good neighbors. I wonder in the back of my mind, with Novo continuing to expand, how long will it be until they’ll consider buying the property our church is on?”

Local officials pledged more than $100 million in corporate subsidies to Novo Nordisk.

The U.S. diabetes market has been tough, with insurers pushing back on pricing for drugs. It’s also a hotly contested market, with Eli Lilly’s Trulicity, an injectable GLP-1, Novo Nordisk’s Victoza, also an injectable GLP-1 battling for market share. Sanofi is also a major player in the diabetes market. In February 2018, Novo Nordisk announced results of its Phase III clinical trial of GLP-1 oral semaglutide. The drug met its primary statistical endpoint, showing significant and superior improvements in HbA1c for all three doses compared to placebo. The 14 mg dose also showed significant and superior weight loss compared to placebo.

The company has nine additional ongoing PIONEER trials of the drug this year and expects to make regulatory submissions in 2019.

The North Carolina plant is in part of what has been dubbed the “diabetes belt,” which ranges from Louisiana up to West Virginia and over to North Carolina. This is where there is a higher rate of diabetes in the U.S.

Before the plants were set in Clayton, Novo Nordisk’s APIs were manufactured in Denmark. The ones in the U.S., such as in Clayton or other areas outside of Denmark, manufactured medical devices or assemble packaging. At this point, although details of what will be manufactured at the Clayton site are vague, it looks like it will make insulin injectables and GLP-1, the hormone first derived from Gila monster venom, that stimulates insulin production. A Novo Nordisk spokesperson said it would “ensure diabetes production capacity in the U.S. for the decade ahead.”

For the most part, local officials are happy about Novo Nordisk’s growth and continuing presence. But it’s not without its downside. It hired a full-time city inspector to deal solely with Novo Nordisk permits. I will also need to manage a $32 million wastewater facility that Novo Nordisk has agreed to build at its own expense.

But it’s a lot of money and jobs coming into the community, and that tends to win over most skeptics. And one of the town’s small business owners, David Townsend, who runs Nancy Joe’s Homemade, a bakery, said sales have grown 300 percent since the company broke ground–a lot of dough.

https://bit.ly/2sl0NQ7

LabConnect Expands Advanced Lab Operations Center 11,000+ Sq Ft in TN

LabConnect, LLC, a leading global provider of central laboratory and support services for biopharmaceutical, medical device and contract research organizations, has completed phase one of an 11,000+ square foot facility expansion in Johnson City, Tennessee. The new space will significantly increase the capacity for peripheral blood mononuclear cell (PBMC) processing and allow LabConnect to better serve its clients.

As a response to its 30 percent growth since 2017, LabConnect’s facility expansion is essential to serving increasingly complex studies and the related demand for corresponding services. Phase one expanded the company’s clinical sample kit-building and storage capabilities. Phase two of the facility upgrade will add more offices and project management space, while phase three will build out the PBMC laboratory capabilities.

“We have grown every year since our founding in 2002, and we are committed to maintaining our facilities with cutting-edge technology,” said Eric Hayashi, president and CEO of LabConnect. “It is an exciting time to be building our business, constantly improving sample testing services to meet clients’ needs and helping to save lives while supporting clinical trials.”

LabConnect’s expansion will be complete in September 2018. A detailed moving plan has been developed to ensure seamless business continuity, regulatory compliance and sample integrity.

For more information, visit labconnectllc.com.

https://bit.ly/2GWJQkv

Novartis’ AveXis to Build Gene Therapy Factory in Durham, North Carolina

AveXis, a Novartis company based in Illinois, is investing $55 million to build a new manufacturing facility in Durham, North Carolina. The facility will create 200 jobs.

AveXis will use the new plant to make its first product candidate, AVXS-101, a gene therapy to treat three types of spinal muscular atrophy (SMA). SMA Type 1, also known as Werdnig Hoffmann disease, is a severe form of SMA. It usually is seen before six months of age and includes worsening muscle weakness and hypotonia (poor muscle tone) because of the loss of lower motor neurons in the spinal cord and brain stem. There are also feeding and breathing problems. The disease is caused by mutations in the SMN1 gene. Currently the only treatment approved by the U.S. Food and Drug Administration (FDA) is Biogen’s Spinraza (nusinersen).

Durham was competing with the state of Illinois for the site. Illinois approved tax credits of almost $8 million to bring the jobs to Libertyville, Illinois. But AveXis took a $3 million incentive package in North Carolina.

“It’s notable that AveXis has chosen to expand its manufacturing operations in North Carolina,” North Carolina’s Secretary of Commerce, Tony Copeland, said in a statement. “Life science companies understand the many advantages of our state offers manufacturers, particularly the investments North Carolina has made in education and workforce training for the biotechnology industry.”

The new jobs will be in engineering, manufacturing and supply chain. They will have minimum average salaries of $103,449, compared to the average wage in Durham County of $67,537.

In addition to AVXS-101, AveXis plans to develop other therapeutics for rare neurological diseases, including Rett syndrome and a genetic type of amyotrophic lateral sclerosis caused by mutations to the SOD1 gene.

“The transformation of gene-based technologies into economic impact in North Carolina continues to be a focus of the Biotechnology Center, not only for human health but also for animal health and agriculture,” said Bill Bullock, senior vice president of statewide operations & economic development with the North Carolina Biotechnology Center,” reported WRAL TechWire.

Pfizer also recently announced it was investing $100 million and adding gene therapy capabilities to its manufacturing campus in Sanford, North Carolina. Bluebird bio, also in Durham, has done the same.

AveXis acquired rights to its gene therapy technology in 2015 from Asklepios BioPharmaceutical (AskBio), a company based in Chapel Hill, North Carolina. AskBio received an upfront payment and is eligible for milestone payments and royalties based on AveXis progress and possible commercialization.

On April 9, AveXis announced it had agreed to be acquired by Novartis for $218 per share or a total of $8.7 billion in cash. This was an 88 percent premium on its April 6, 2018 closing price. Both companies’ boards unanimously approved the merger. The close is expected in mid-2018.

“The commitment, drive and expertise of the entire AveXis team has created significant stockholder value, and we are pleased that Novartis recognizes that value in the potential of AVXS-101, our first in class manufacturing capabilities and our gene therapy pipeline, all of which serve to transform the lives of people devastated by rare and life threatening neurological diseases such as SMA, Rett syndrome and genetic ALS,” said Sean Nolan, AveXis’ president and chief executive officer, in a statement at the time. “With worldwide reach and extensive resources, Novartis should expedite our shared vision of bringing gene therapy to these patient communities across the globe as quickly and safely as possible.”

https://bit.ly/2LEKYN9

AstraZeneca Opens New Bay Area R&D Site With 400 Employees

After a two-year wait, AstraZeneca finally has employees under one roof in the Bay Area.  The U.K.-based company moved employees from several subsidiaries located across the area into a 163,000-square-foot facility in South San Francisco known as The Cove at Oyster Point.

AstraZeneca’s new facility will have employees from subsidiary companies Acerta Pharma, MedImmune, Pearl Therapeutics and AstraZeneca’s TIDE (Technology Innovation & Delivery Excellence) working side-by-side on their therapeutic missions. The parent company moved about 400 employees into The Cove this week.

Sean Bohen, head of global medicines development and AstraZeneca’s chief medical officer, called the opening of the new site a milestone for the company. He said it enabled employees from four organizations under the AstraZeneca umbrella to “work side-by-side at the center of where biotechnology and high-tech industry intersects.”

“This is a demonstration of our commitment to a strong and visible presence in California, our continued growth through science- and collaboration-led innovation, and our dedication to being a great place to work for current and future employees,” Bohen said in a statement.

Bahija Jallal, president of MedImmune, agreed with Bohen. Jallal said collaboration is a “key driver of innovation” and added that it was at the core of the company’s culture.

“The opening of our new South San Francisco site brings together the best of both worlds — a shared drive across our employee base to advance great science and bring new treatments to patients, while providing an opportunity to tap into the Bay Area’s transformative biotech ecosystem, helping to foster great progress internally and externally,” Jallal said in a statement.

The Cove, a project of HCP Life Science Estates, broke ground in 2015. When the spades first bit into earth The Cove was billed as South San Francisco’s first ground-up multi-tenant life science development in nearly a decade. The campus design consists of seven buildings ranging in size from 102,000 square feet to 158,000 square feet in both single- and multi-tenant building configurations. In addition to AstraZeneca, other companies who have space in The Cove include LakePharma, Five Prime Therapeutics, Denali Therapeutics and CytomX Therapeutics.

But AstraZeneca isn’t alone among the big pharma companies taking over space in the Bay Area. Two years ago Merck cut a deal with Alexandria Real Estate Equities, Inc. to build a nine-story, 294,000 square foot facility with research space and office space in the 200 block of East Grand Avenue. Construction began on the project last year and is anticipated to be ready for occupancy next year.

The South San Francisco area has about 10 million square feet of life science research spacenow, with more than half of that already in use. A number of developments have sprung up in the area to provide homes for these innovative companies, including BioMed Realty’s Gateway of the Pacific project — a proposed 1.3 million square foot campus that will include ample office and laboratory space. The first phase of the project is scheduled to develop about 500,000 square feet.

https://bit.ly/2J822Nj

45 Park Place Islamic Center Begins Rise Into Lower Manhattan Skyline

45 Park Place. Rendering: Williams New York

After years of waiting, 45 Park Place is finally making a rapid ascent into the Lower Manhattan skyline. The skyscraper will soon rise 43 stories and 667 feet to its rooftop pinnacle, and is being developed by Sharif el-Gamal’s Soho Properties. Although substantially shorter than nearby towers like 30 Park Place, 56 Leonard Street, and 111 Murray Street, the 50-unit structure will still offer comprehensive views of Tribeca to the north, Brooklyn, the Manhattan Bridge, and City Hall to the east, and the World Trade Center, immediately to the south.

The building’s Tribeca sales gallery opened last summer, and includes a vertically mounted 3D-printed model of Manhattan from the World Trade Center to Midtown. One-bedroom units will begin at $1.92 million, two-bedroom will start at $3.73 million, three-bedrooms at $4.6 million, four-bedrooms from $10.5 million, and two duplex penthouses are listed for $39 million and $41 million. Naturally, the penthouses include private terraces on the eastern side of the building.

Sales are aiming for $3,400 per square foot, which would be substantially above the neighborhood averages for both Tribeca and the Financial District.

Piero Lissoni is heading interior design while SOMA Architects is the main architect. Ismael Leyva is the executive and residential architect. Sales are now being led by Corcoran Sunshine.

Clad in glass from top to bottom and built from reinforced concrete, the form of the building follows a simple use of vertical mullions that align with the gentle setbacks on the east, and two inverted setback on the west that lightly carve out its southwest corner.

At street level, an outdoor courtyard with fresh landscaping will lead to the Jean Nouvel-designed Islamic cultural center. Set to rise three stories towards the back of the courtyard, Gamal had previously filed plans for the cultural center last Fall, with its address now labeled as 51 Park Place.

When complete, the cultural center will cover about 16,000 square feet, including a sub-story level as a sanctuary. The tower and its crane are now climbing steadily, and will soon be visible from the 9/11 memorial when looking above the U.S. Postal Service Building at 90 Church Street.

Completion of 45 Park Place, along with the Islamic Cultural Center that should follow shortly thereafter, is expected sometime next year.

https://bit.ly/2Ja9fMQ

Attention Airbnb hosts: Your messages may not be so private after all

Airbnb hosts who are breaking building rules by renting out their apartments should know to expect scrutiny from neighbors and building management. And an ongoing case out of a co-op complex in Coney Island shows that even some light subterfuge won’t necessarily work to throw the authorities off the scent.

The legal battle has its roots in Trump Village, a seven-building co-op community near the Brighton Beach line, named for the president’s developer father Fred Trump. An apartment owner’s alleged Airbnb use came to the attention of building management in mid-2016, according to Trump Village West general manager Igor Oberman. What first tipped neighbors off was the age of the alleged visitors.

“Our complex is a naturally occurring retirement community,” Oberman explains. “The majority of residents are 60 plus, or even 75 plus. So when you see guys with bright shirts and big beards and backpacks, they kind of stick out in our population mix.”

Also, he says, “We had complaints from shareholders that there were parties happening.”

With residents’ eyes on the interlopers, Oberman says he traced them to a particular apartment, which he confirmed by consulting the Airbnb website and looking at the photos. The unit was purchased by a real estate broker in 2014, who bought two other co-ops around the same time, according to property records.

Oberman typically combs Airbnb and other short-term rental sites on a quarterly basis to see if anything in the complex shows up. When one does, or he gets a tip that someone is doing illicit vacation rentals, he sends the apartment owner a letter saying that it’s against the rules, and that’s usually the end of it.

“We’ve never had anyone fight it. Usually, they weren’t aware of the rules and we made them aware, so they stopped it,” he says. “This guy didn’t want to.”

Instead, Oberman claims that the man changed the profile image on his Airbnb account to one of a woman, and changed the listing photos and address to show a building nearby, then carried on with his Airbnb bookings for at least a short period of time. In December 2016, Trump Village sued the man to terminate his lease.

As part of the lawsuit, which is ongoing, the co-op subpoenaed communications between guests and the Airbnb account holder. Last week a judge ordered the release of the records, overruling the man’s objections and some letters registering protest on Airbnb’s behalf. The documents show would-be guests were perplexed by the photo changes on the account, and seem to show the host explaining that he changed the address to make the building “more locatable on the map.” Other messages show the host instructing a group of seven to enter through a side door to avoid security.

And on June 22nd, 2016, as the issues with the building were coming to a head, an irate guest wrote:

I got your message: “Andrey, Please do not Answer or Open door to anyone. I think security here have some issues with airbnb. If you here someone knocking just wait two minutes quite. Call me if any issues or questions. Thanks” and I’m not happy with this situation at all. I need you to take keys from apartment tomorrow 06/22 morning. I don’t want to spent my vacation sneaking from security. You need to resolve issues with security before renting your apartment. I also need one night refund. Please, let me know when tomorrow morning you can check me out. I prefer 9am. Thank you.

The judge, Brooklyn Supreme Court Judge Carl Landicino, was right to order the disclosure, says Steve Wagner, a co-op and condo lawyer with the firm Wagner Berkow (and a Brick sponsor).

Airbnb “should have lost. They’re protecting someone who’s breaking he law,” Wagner says. “The zoning doesn’t permit it. The certificate of occupancy doesn’t permit it. The proprietary lease doesn’t permit it. The house rules don’t permit it. Airbnb knows this. Whose interest are they trying to protect?”

The letters on Airbnb’s behalf by the firm ZG Subpoena were, attorney Toby Cohen notes, pretty pro forma.

The letters “just included the standard general objections that everyone includes in discovery responses,” he says, “and the last letter said that they’d turn over what they had once the motion to quash is decided.”

For now, the case is ongoing. The apartment owner declined to comment on this seemingly damning disclosures, but says, “As soon as this matter is closed in court, I’ll call you and tell you everything, probably more than you’ll want to hear.”

Oberman, for his part, says that he hopes that the case will serve as a warning to co-op owners and others who might be tempted to try to run a fly-by-night hotel out of their apartments, and a call to arms for building managers seeking to ferret out the short-term renters in their midsts.

“I hope it gets out that you can’t hide behind Airbnb.com, that your communication is not private,” he says. “I hope it will convince people to not break the rules. All I’m trying to do is to get people to follow a set policy. I don’t want boards to think there’s nothing we can do.”

https://bit.ly/2FrwblT

Probes, Cyberattack Distract Atlanta as It Tries to Woo Amazon

As this growing city looks to lure Amazon.com Inc. and other corporate giants to the region, its new mayor has found her efforts stymied by scandals from the outgoing administration and the aftereffects of a crippling cyberattack on city operations.

Mayor Keisha Lance Bottoms, who took office in January, is dealing with various investigations related to her predecessor, Kasim Reed, including a federal corruption probe into several areas of city government and city investigations into a deluge of bonuses he paid staff before leaving office.

In March, a ransomware attack shut down most government operations for days and erased an undetermined amount of data, including possibly some related to the Reed investigations. The city refused to pay the $50,000 ransom. It now has put up at least $5 million for experts to try to retrieve data and prevent or limit further attacks.

The bad publicity comes as Ms. Bottoms is trying to attract Amazon, which is considering Atlanta as a base for its second headquarters, along with 19 other finalist cities. Winning Amazon’s bid, with its promise of up to 50,000 high-paying jobs, would transform the already growing city.

“I really wouldn’t want to be in her shoes now, that’s for sure,” said Gina Pagnotta-Murphy, president of the Professional Association of City Employees, a large city union. “Before she can tackle her own agenda, she has to do damage control for all the mess that was left behind.”

Ms. Bottoms is making the right initial moves to cope with the problems, City Council President Felicia Moore said, but fallout from the investigations and the cyberattack are “an unfortunate distraction that we are going to have to deal with.”

Ms. Bottoms’s spokesman, Michael Smith, said the probes and cyberattack have drawn attention away from the new administration’s work to lure more businesses, mitigate the effects of gentrification on low-income homeowners and improve public transportation.

This spring, the City Council asked Atlanta’s audit and ethics commissions to investigate published allegations that Mr. Reed paid out bonuses to his staff without Council approval. The probe is ongoing, and some officials have returned the money.

In addition, Ms. Bottoms hired outside lawyers to review the bonuses and explore “any avenues for restoring those funds to the city’s general fund,” according to Mr. Smith.

A spokesman for Mr. Reed said the former mayor didn’t need City Council approval for the bonuses and they were paid out legally. He added that in light of Atlanta’s growing economy and stable finances, the “bonuses were appropriate, and Mayor Reed believes that the individuals who received the bonuses were worthy of them.”

Before the investigations tarnished Mr. Reed’s reputation, he was popular during much of his eight years in office and credited with restoring the city’s financial health. NCR Corp. opened headquarters in Midtown in January, and Porsche AG opened a $100 million U.S. headquarters near Atlanta’s airport in 2015 — a trend Ms. Bottoms is looking to continue.

Most city departments are now operational after the March cyberattack, Mr. Smith said. Files on some computers were lost, however, and investigators are trying to figure out what they can retrieve, he said.

One possibly lost file is a memo that Reed administration officials said gave legal grounds for the bonuses. The cyberattack has hampered the search for the memo — “if it ever existed,” Mr. Smith said. He added that the city so far has been able to provide all documents subpoenaed in the federal probe into bribery, including one relating to contracts at Hartsfield-Jackson Atlanta International Airport.

In March, a federal grand jury indicted Mitzi Bickers, a former city human services director, on charges of bribery, money laundering, obstruction and tax fraud. Prosecutors accused her of steering lucrative contracts to two men in exchange for more than $2 million in bribes. Ms. Bickers pleaded not guilty.

Two businessmen caught up in the investigation have been sentenced to federal prison for conspiring to pay bribes to secure city contracts. The city’s former chief procurement officer, Adam Smith, pleaded guilty to conspiratorial bribery and admitted to accepting more than $30,000 in bribes. Byung J. “BJay” Pak, U.S. attorney in Atlanta, said the investigation continues.

With the probes and cyberattack consuming City Hall and the Atlanta media, Councilman Howard Shook said Ms. Bottoms must feel like a president who “after that first round of briefings, says, ‘My God, what have I gotten myself into?’ ”

At her State of the City speech earlier this month, the mayor said, “Days in government sometimes feel like dog years.”

Ms. Bottoms said her staff was reviewing policies and best practices of other cities to improve government transparency and accountability. “What has been broken must be fixed, and we will repair the trust,” she said.

Regaining that trust could be one of the mayor’s toughest tasks.

Kenny Costigan, 36 years old, who works in the trade-show industry, said residents want to see local government run more transparently and more efficiently.

“It seems that every time that we clear house and put in the right people, they turn,” he said.

https://bit.ly/2L05Ehn

New NYC condos woo sports fans with basketball, tennis, soccer courts, more

It can be hard to be an athletic type in New York City. Green space is limited, public courts and fields are crowded, private facilities are pricey, and the weather doesn’t always cooperate. So what is a city-dwelling sports lover to do?

One option, if you can afford it, is an apartment in a building that offers sports amenities. New developments these days are increasingly going beyond the standard gym equipment to offer things like indoor soccer courts, rock climbing walls, and even a skateboard ramp. In this week’s Buy Curious, brokers Andrew Sacks of Citi Habitats and Angela Buglisi Daley of Mirador Real Estate tell us how to evaluate these types of buildings, and explain that while these places are fun, you’ll definitely have to pay to play.

The question

I live and breathe sports. Where can I find an apartment that would appeal to a fanatic like me?

The reality

“There are several pros to buying in [a building] with great amenities—not the least of which is bragging rights,” Sacks says. “Plus, with a lot under your roof, you can still enjoy your favorite even in the event of inclement weather, which we all know happens in New York City.”

Pied-à-terre and investment buyers often buy in buildings that will have these over-the-top sports amenities, meaning that “a lot of these [amenity] spaces go underutilized,” Sacks adds. “So chances are you’ll [often] have them all to yourself.”

Where to look

Sacks calls The Aldyn, a rental/condo hybrid in Lincoln Square, “the ultimate building for athletes and sports fanatics.” The onetime home of former New York Knick Carmelo Anthony, the building includes the 40,000-square-foot La Palestra Athletic Club and Spa, which has a 75-foot indoor pool, a hot tub, a 38-foot rock-climbing wall, a bowling alley, a squash court, and a full-sized indoor basketball court.

The Edge in Williamsburg “is also a great choice,” Sacks says. Located on the East River waterfront, the two-tower complex has an all-season indoor pool, a golf simulator, and a multi-purpose area that can be set up for basketball, volleyball, or soccer.”

Sacks says that Lincoln Square’s Waterline Square, which is scheduled to be completed in 2019, is expected to be a big draw for sports fanatics. The three-tower complex will have an indoor tennis court, basketball court, squash court, indoor soccer field, boxing studio, golf simulator, 30-foot rock climbing wall, and what Sacks is most looking forward to seeing: an indoor halfpipe for skateboarding.

Sacks also likes 15 William in the Financial District, which has a squash court, an outdoor basketball court, and a 50-foot saltwater lap pool, and Midtown’s 135 West 52, which has a golf simulator.

For Buglisi Daley, One Riverside Park is a sports fan’s dream. The Upper West Side condo building has a 75-foot swimming pool, a 38-foot rock climbing wall, basketball and squash courts, a two-lane bowling alley, and a golf simulator.

She’s also partial to Gramercy Square, a four-building complex with a 75-foot pool and a golf simulator, and The Shephard in the West Village, which has an indoor half basketball court, a bouldering wall, and a golf simulator.

Other notable mentions go to The Greenpoint in, you guessed it, Greenpoint, which has a half basketball court and a billiards room and is set to open in the fall; Carnegie Hill’s 180 East 88th St., which offers a half-court indoor basketball court with double-height ceilings, and an indoor soccer field; Madison Square Park Tower in the Flatiron District, which has a half basketball court and a golf simulator; and One Manhattan Square on the Lower East Side, which is expected to have a full-court basketball court, a two-lane bowling alley, a squash court, and a golf simulator when completed next year.

How much do amenities like these cost?

The use of building amenities is typically covered in your monthly common charges, but the more amenities a building has, the higher the common charges are likely to be. Private training sessions or boxing/spin/yoga classes are often an extra charge.

“The premium on purchase prices and monthlies can be anywhere from 10 to 20 percent,” Buglisi Daley says. “But the premium is not attributed solely to sports facilities.”

Where will you find the best sports amenities?

Typically, these are found in new construction as “the more over-the-top amenities (think rock-climbing walls or indoor basketball courts) are hard to retrofit into existing buildings,” Sacks says.

Plus, Buglisi Daley adds, “the add-on amenities in older buildings can nowhere near compare to the size and scale of those found in buildings built with tens of thousands of square feet set aside for fitness facilities.”

For those older buildings that do want to try to compete, Sacks says that more compact amenities (like a golf simulator or a bowling alley) can definitely be added, but it’s rare.

“For an existing condo, the board would have to approve their construction, and then issue a capital assessment, raise common charges, or pull from their reserve fund,” he says. “This can be a tough sell for something that’s purely a luxury.”

What are some pros?

“You get to know your neighbors,” Buglisi Daley says. Those looking for “a sense of community in the big city” can easily find opportunities for socializing and networking while playing a pick-up game of basketball.

In addition, “New Yorkers live in smaller spaces compared to other cities and don’t have private outdoor spaces large enough to play sports,” she says. “Large fitness amenities provide them with an extension of their homes with enough space to indulge in sports.”

Finally, you never have to go outside—an especially enticing prospect on a cold winter’s day.

“Many new buildings have risen on the fringes of established neighborhoods, or in formerly industrial areas,” Sacks says. “Smart developers have created ‘destination’ buildings where residents never need to leave the premises.”

Are there any cons?

“For those looking for privacy and anonymity, you will [not be able to avoid] familiar faces in these common areas,” Buglisi Daley says.

But the most important potential downside is financial.

“These over-the-top amenities often come with an over-the-top price tag,” Sacks says.

Plus, “if you don’t end up using them, you’ve paid a premium for an amenity-rich condo” for nothing, Buglisi Daley says.

Check out these listings in buildings with amenities for sports lovers:

The indoor tennis court at Waterline Square.

Noe & Associates with The Boundary

10 Riverside Blvd. #30B, Upper West Side

Listed for $6,070,000, this 2,295-square-foot, three-bedroom, three-and-a-half bath apartment has a wall of windows that overlook the Hudson River and an enclosed alcove that could work as a home office or a storage space. The custom Italian kitchen has polished chrome fixtures, a wine fridge, and a garbage disposal. There’s also washer/dryer in the apartment. It’s in Waterline Square, a three-tower complex that will have tennis, basketball, squash, soccer, a skate ramp, and more when completed next year. Common charges are $4,443 a month. Taxes are $183 a month.

The basketball court at 180 East 88th St.

March Made for DDG

180 East 88th St. #6A, Upper East Side

This 1,730-square-foot, two-bedroom, two-and-a half-bath condo has prewar-style detailing, including coved ceilings, custom plaster wainscoting, and herringbone floors. The apartment offers an open-plan living area and a kitchen with white lacquered cabinets, marble countertops, and brass fixtures. The building has a fitness studio, a half basketball court, and a soccer field. It’s listed for $3,595,000. Common charges are $2,467 a month. Taxes are $2,680 a month.

The squash court at 15 William St.

15 William St. #24D, Financial District

Priced at $950,000, this 698-square-foot condo studio has eight-foot double-glazed windows, high ceilings, an open kitchen with Caesarstone countertops and white lacquer cabinets, a large living area, a custom built-in home office that can easily be concealed. It’s in a condo building with a gym, a squash court, a 50-foot lap pool, a half basketball court, and a covered dog run. Maintenance is $729 a month. Taxes are $673 a month.

The two-lane bowling alley in One Manhattan Square.

Extell Development Company

252 South St. #72G, Lower East Side

This 688-square-foot, one-bedroom condo sponsor unit condo has an open kitchen with a breakfast bar, stained oak flooring, radiant heat flooring in the bathroom, and a washer and dryer. It’s in One Manhattan Square, a building that will have a 75-foot swimming pool, a basketball court, a bowling alley, a squash court, and a golf simulator when finished next year. It’s listed for $1,630,000. Maintenance is $958 a month. Taxes are $16 a month.

The basketball court at The Greenpoint.

Neoscape

21 India St. #29A, Greenpoint

Listed for $2,290,000, this 1,124-square-foot two-bedroom, two-bath condo has floor-to-ceiling windows, 10-foot ceilings, and views of Midtown. There’s wide-plank walnut flooring, double-wall ovens in the kitchen, and a double vanity in the master bathroom. It’s in The Greenpoint, a building with a half basketball court and a billiards room. Common charges are $1,455 a month. Taxes are $11 a month.

https://bit.ly/2KRkaYK