Eye on Retail: Tax law glitch puts strain on store renovations
A drafting error in the new tax law is causing some retailers and restaurant owners to delay their renovation and improvement plans.
As written, the law allows companies to write off renovation costs (made to non-residential real estate) over 39 years. The authors of the tax law had intended for the businesses to be able to write off the full costs of the improvements in one year.
A group of more than 100 retailers, restaurants and trade groups, including the National Retail Federation and Retail Industry Leaders Association, have urged Congress to take “quick action” to make two technical corrections to law.
“The delay in correcting these provisions has caused economic hardship for some retailers and restaurants and is also delaying investments across the economy that impact the communities in which these companies are doing business,” the businesses and groups said in a letter sent in June to the top Republicans and Democrats on the congressional tax-writing committees.
One of the technical corrections sought by the group has to do with the renovation write- off.
“This very large difference in the after-tax cost of making improvements is causing a delay in some store and restaurant remodeling projects, as well as causing some retailers to decline opportunities to purchase or lease new store locations that would require substantial improvements,” the retailers and restaurants stated in the letter.
The second correction is related to the effective date of a provision that generally bans businesses from carrying back net operating losses to prior years. Lawmakers had intended for the ban to take effect for taxable years starting after Dec. 31, 2017. But the law instead says it applies for taxable years ending after Dec. 31, 2017.
Republican leaders have acknowledged the mistakes, but there is no quick fix in sight at this point as the corrections would require consensus across the aisles.
Beazer Homes acquiring Atlanta competitor
For the past 12 months, Venture Homes generated $69.9 million of home building revenue from 277 closings.
Beazer Homes USA, Inc. is acquiring Venture Homes, a leading private homebuilder in Atlanta, Ga., for approximately $65 million.
Founded in 1984, Venture Homes has built more than 6,000 homes since its inception. For the past 12 months, Venture Homes generated $69.9 million of homebuilding revenue from 277 closings with an average selling price of $252,200.
Assets being acquired by Beazer include more than 1,000 lots in 9 active communities and 18 future communities, principally serving first time and first move-up homebuyers. The transaction also includes substantial construction work in process as well as 51 homes in backlog.
On a combined basis, Beazer and Venture have closed nearly 500 homes in Atlanta over the past 12 months, which ranks among the top 10 builders in the market.
“This acquisition allows us to accelerate our growth in Atlanta, a highly desirable market supported by robust job growth, solid affordability and favorable supply dynamics,” Allan Merrill, president and CEO of Beazer Homes, said in a prepared statement. “In addition to adding new and future communities, we are pleased to welcome our new colleagues who will enable us to pursue further growth in the Atlanta market in the years ahead.”
With Venture on board, Beazer said it expects Homebuilding revenue of $507.0 million for the third quarter 2018, provided by 1,391 home closings and an average selling price of $364.5 thousand
Based in Atlanta, Beazer Homes is one of the nation’s largest single-family home builders with operations in Arizona,California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia
Simpson Strong-Tie, Build Change renew engineering fellowship
The fellowship is open to licensed civil and structural engineers with a minimum of 8 years of professional experience in structural engineering
Build Change and Simpson Strong-Tie have renewed the Simpson Strong-Tie Fellowship for Engineering Excellence program.
This is the second year of the fellowship, allowing innovative engineers the opportunity to provide contributions to Build Change programs as well as support other engineers’ professional development in developing nations around the world.
“We are very pleased to renew the Fellowship for Engineering Excellence with Build Change. With the positive impact to developing areas in Indonesia, Colombia and the Philippines where our first fellow worked, we’re looking forward to the Fellowship contributing even more to safer and stronger design and construction methods,” said Simpson Strong-Tie Vice President of Engineering Jeremy Gilstrap.
The Fellowship is open to licensed civil and structural engineers with a minimum of 8 years of professional experience in structural engineering. Applicants should have experience working on earthquake- and wind-resistant design and construction of buildings, and on existing building seismic and structural evaluation and retrofit according to recognized standards, such as the IBC, ASCE 7, ASCE 41, and others.
Candidates should be willing to travel to, live, and work in emerging countries in Latin America and the Caribbean, and South and Southeast Asia for a period of one year beginning Sept. 1, 2018 and concluding Aug. 31, 2019.
James Mwangi, the 2017-2018 fellow noted, “The Fellowship offered me the opportunity to share my previous experience by working face to face with not only the Build Change technical teams, but also with local engineers in each country, to promote capacity building.”
Applications will be accepted through July 16. Applicants can find more information about the program at Build Change.