Gravel2Gavel Construction & Real Estate Law Blog
REITs have several options to defer required dividend distributions through the current year and even significantly into next year (although at a potential cost), and the use of combined cash and stock distributions may greatly reduce a REIT’s cash outlay for dividend distributions. In “COVID-19 Impacts on REITs and Mitigation Strategies,” colleagues Robert S. Logan, Brian M. Blum and Peter J. Elias address how REITs need to be sensitive to the consequences of acts taken in response to the COVID-19 pandemic on their compliance with the REIT tests under the tax laws.
Articles Posted in Real Estate
So the Government Shut Down Your Construction Project—What Next?
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The impact of COVID-19 on construction projects continues to evolve as an increasing number of are issuing orders suspending construction. While complying with obligations in the face of a project being shut down, parties should not lose sight of actions that will best position them when construction resumes. In “So the Government Shut Down Your Construction Project—What Next? colleagues Matthew Stockwell and Laura Bourgeois LoBue discuss the legal issues that may come into play in the event of a COVID-related shutdown.
CARE Act Tax Deferrals and Refund Provisions
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The Act represents the third legislative attempt to address the economic effects of the COVID-19 pandemic. In “CARES Act Provides Tax Deferral and Refund Opportunities,” colleagues Brian M. Blum and Harsha Reddy address that many of these provisions provide taxpayers with liquidity benefits by providing cash payments, pushing back tax payment dates and reducing current and prior year tax liabilities.
Government Contractors Impacted by COVID-19 Orders
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An increasing number of States—now numbering 23, as well as the District of Columbia and many counties and cities, are now subject to Executive Orders restricting activity of non-essential businesses. In “Numerous Jurisdictions Have Now Issued COVID-19 Orders Impacting Government Contractors,” colleagues John E. Jensen, Alex D. Tomaszczuk, Marques O. Peterson and Robert Starling discuss how the Varied Executive Orders, in increasing numbers, have closed nonessential businesses and services across the country, with a variety of implications for government contractors.
Force Majeure, Construction Delays, Labor Shortages and COVID-19
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The global effect of the Coronavirus disease (COVID-19) is still unknown, and the progress of many large-scale construction projects has been affected by “Shelter in Place” orders, although some states and localities have classified construction projects as “essential.” Just last Friday, New York shut down all construction, with few exceptions.
Nonessential Businesses Closures in Maryland Due to COVID-19
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Maryland Governor mandates the closure of all nonessential businesses to combat COVID-19 stopping short of implementing a “shelter-in-place” order. Willful violation of the order can result in both imprisonment of up to one year and a fine of up to $5,000. In “Maryland Extends COVID-19 Closures to Nonessential Businesses,” colleague Brian E. Finch notes that while businesses must be closed to the general public, staff access is permitted for purposes specified in interpretive guidance No. COVID19-06 (i.e., maintaining essential property).
New Jersey’s Uniform Coronavirus Response
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In New Jersey, local mandates and regulations regarding COVID-19 are prohibited by New Jersey Executive Order No. 108. This represents a significant diversion from other states badly hit by COVID-19, including New York and California. In “New Jersey State and Local COVID-19 Orders,” colleagues Brian E. Finch, Margaret Beale-Wirsing and Michelle A. Herrera address that companies doing business in New Jersey should reference the State’s uniform response to COVID-19 and be aware that the uniform response may have a disparate impact on different geographical regions.
Pillsbury Industry Insights: Hotels & Hospitality
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Please join us April 7, 2020, for an Industry Insights webinar series designed to help clients spot issues, mitigate risk and navigate challenges specific to their industry.
During this webinar Christian Salaman, David Klein and Paul Shapses will discuss the hotel and hospitality industry with a focus on helping hotel owners and operators, and developers and lenders address ongoing developments pertaining to the COVID-19 (Coronavirus) pandemic.
This 45-minute conversation will cover:
- Short- and long-term approaches to consider for dealing with low occupancy and declining operating revenue
- Financial issues specific to industry loans
- Insurance coverage in the context of the hotel & hospitality industry
- Insurance-related litigation outlook
- Q&A
New York Shuts Down Majority of Construction
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Due to pressure from construction workers, officials, and some construction workers having tested positive for COVID-19, the Empire State Development Corp. (acting on behalf of Governor Cuomo) has frozen all construction in New York today, with the exception of work on hospitals and health care facilities, transit facilities, roads and bridges, affordable housing and homeless shelters.
As a result, commercial construction and condominium projects are on hold, with the exception of work that must be completed to prevent unsafe conditions. Until now, construction has been considered “essential” in New York.
Naturally, this will cause delays and have financial impacts on owners and contractors alike. Contractors will need to secure their sites, document additional costs incurred, and determine the rights they have with regard to payment, delays, and suspension of work in accordance with their contracts. Contractors are also likely to face claims from downstream subcontractors. Owners will have to also review their contractual rights, particularly with regard to suspensions and the circumstances under which the owner may suspend without an increase in the contract sum. Owners in most cases will suffer a loss of revenue and increased interest and soft costs as a result of the suspension, and should look for sources to recover those losses, including business interruption or civil authority insurance coverage.
We are monitoring for further developments, and will be posting more information on this and other similar suspensions and how owners and contractors can protect themselves, shortly.
Wyoming Governor Signs Law Allowing Retiring Fossil Plants to Be Replaced with Small Modular Nuclear Reactors
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On March 13, 2020, Wyoming Governor Mark Gordon signed House Bill 74 (HB 74) into law. After the Governor signed HB 74, it became House Enrolled Act 60. HEA 60 allows utilities and other power plant owners to replace retiring coal and natural gas electric generation plants with small modular nuclear reactors (SMRs).