How the Republican Tax Cuts Are Helping California

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Posted by John Kartch on Thursday, July 1st, 2021, 9:15 AM PERMALINK

California is benefiting greatly from the Tax Cuts and Jobs Act enacted by Republicans in 2017:

2,649,200 California households are benefiting from the TCJA’s doubling of the child tax credit.

Every income group in every California congressional district received a tax cutNationwide, a typical family of four received a $2,000 annual tax cut and a single parent with one child received a $1,300 annual tax cut.

11,633,710 California households are benefiting from the TCJA’s doubling of the standard deduction. Thanks to the tax cuts, nine out of ten households take the standard deduction which provides tax relief and simplifies the tax filing process.

553,000 California households are benefiting from the TCJA’s elimination of the Obamacare individual mandate tax. Most households hit with this tax made less than $50,000 per year.

Lower utility bills: As a direct result of the TCJA’s corporate tax rate cut, California residents are saving money on utility bills. Lower electric, water, and gas bills help households and small businesses operating on tight margins. For example, at least twelve California utilities reduced their customers' bills (see below).

Thanks to the tax cuts, California businesses of all sizes are hiring, expanding, raising pay and increasing employee benefits:

Mission Produce (Oxnard, California) -- $1,000 bonuses; investment in new facilities and technology:

Mission Produce, an avocado distributor based in Oxnard, is rewarding employees in response to the recent federal tax cut.

“We are giving all our U.S.-based employees a $1,000 bonus,” President and CEO Steve Barnard said at a recent company meeting. “We applaud President Trump for spearheading the action needed to pass tax reform. The Tax Cuts and Jobs Act of 2017 created a meaningful impact on Mission’s business. We plan to invest the tax savings in new facilities and technology to create opportunities for the company and for our employees. It’s only fair that we share the benefits that tax reform will have on our business with our valued employees.” — Feb. 22 2018, Reno Gazette Journal excerpt

Footwork International Inc. (Torrance, California) – Was able to create new jobs and increase wages because of the Tax Cuts and Jobs Act:

“Tax Reform allows my business options to exercise many small business struggles with high tax rate,” said Jim Wang, owner of Footwork International Inc. in Torrance, California. “By allowing higher retaining income rate, this enables us to exercise growth options such as staffing, wage increase, purchasing power to keep our business competitive both domestically and globally.”– March 23, 2018, NFIB article.

Pacific Gas and Electric Company (San Francisco, California) - the utility is passing along tax cut savings to customers:

PG&E is taking action to pass along approximately $450 million in annual tax savings to its customers. As a first step, today PG&E made three separate filings requesting to pass along approximately $325 million per year in federal tax savings from the  federal Tax Cuts and Jobs Act for 2018 and 2019. PG&E has proposed to the CPUC that the benefits of the federal tax savings be used to offset expected rate increases. - March 30, 2018, PG&E Press Release

California Water Service (San Jose, California) – The utility is passing along tax cut savings to customers:

California Water Service (Cal Water) submitted a filing with the California Public Utilities Commission (CPUC) yesterday to decrease revenue needed in its service areas by almost $18 million, due to changes in federal tax laws and CPUC-authorized capital equity and debt financing costs. If approved as submitted, new rates reflecting the lower tax rates and financing costs will be effective July 1, 2018. – May 30, 2018 GlobeNewsWire article excerpt

Southern California Gas Company (Los angeles, California) – The utility is passing along tax cut savings to customers:

SoCalGas tax savings from the TCJA to be refunded to ratepayers is $75 million. - January 2020 Energy Division document

Golden State Water Company (San Dimas, California) – The utility is passing along tax cut savings to customers:

Golden State Water Company, which services Rancho Cordova, Gold River, and Arden Manor, wants to lower water rates for customers.

The water agency filed paperwork with the California Public Utilities Commission to decrease the rate by 2.88% for metered customers and 2.86% for flat-rate customers. The change, if approved, would take effect July 1, 2018.

Golden State Water made the decision to cut rates after the Tax Cuts and Jobs Act lowered its income tax rate from 35% to 21% on January 1, 2018. Golden State Water may retroactively credit customers if it determines there was a revenue surplus from January 1, 2018-June 30, 2018. It is also adjusting its rate proposal for 2019-2021, which it submitted in July 2017- before the Tax Cuts and Jobs Act was signed into law. - June 13, 2018 CBS Sacramento news excerpt

Suburban Water Systems (Covina, California) – The utility is passing along tax cut savings to customers:

This Resolution grants Suburban Water Systems’ (Suburban) request in Advice Letter No. 348 the authority to amortize the 2019 amount of $289,879 or 0.34% of authorized revenues, recorded in the Tax Cuts and Jobs Act Memorandum Account (TCJAMA) related to the 2019 excess accumulated deferred federal income tax (ADFIT) not reflected in rates for the period January 1, 2019 through December 31, 2019. The 2019 balance of the TCJAMA will be amortized as a single monthly bill credit based on the customer’s meter size. The credit amount includes interest and is to refund the excess ADFIT related to 2019 revenue requirement not currently reflected in rates. - September 24, 2020 California Public Service Commission document

San Jose Water Company (San Jose, California) – The utility is passing along tax cut savings to customers:

This Resolution grants San Jose Water Company’ (SJWC) request in Advice Letter No. 537 & 537A, the authority to refund the over collected amount of $6,624,690 for the period January 1, 2018 through December 31, 2018, or 1.75% of authorized revenues,recorded in the 2018 Tax Accounting Memorandum Account (TAMA). The balance is associated with changes in tax expenses resulting fromTax Cut and Jobs Act signed into law December 22, 2017 that among other matters reduced the federal corporate tax rate from 35% to 21% effective January 1, 2018. The TAMA should be closed and the balance transferred to a 2018 Tax Accounting Balancing Account to amortize the refund. The 2018 balance in the TAMA will be refunded as a one-time bill credit based on the customer’s meter size. The bill credit is effective beginning on January 21, 2020 as shown below. Any over or under refunded balance in the 2018 Tax Accounting Balancing Account once the amortization period concludes should be addressed in the context of SJWC’s 2022 Test Year general rate case. - January 16, 2020 California Public Service Commission document

California American Water Company (San Diego, California) – The utility is passing along tax cut savings to customers:

The California Public Utilities Commission (CPUC) today approved a decision in the company’s general rate case for new water and wastewater rates for customers statewide.

The company’s rate request, which was filed in July 2016, will set rates through 2020. The decision approves approximately $103 million in capital investment in infrastructure replacements and improvements in 2018 and 2019.

“We are extremely proud of our significant level of system investment, combined with operational efficiency measures and innovative technologies, to ensure continued water quality, service reliability and fire protection for the more than 600,000 Californians who depend on us every day,” said Rich Svindland, President of California American Water. “This decision enables us to continue this important work on behalf of our customers, while balancing the cost impact for them.”

The decision approves a $10.3-million annual increase in authorized water and wastewater revenues for California American Water compared to previously authorized rates in the fall of 2016. The increase reflects savings generated by changes in federal tax law from the 2017 Tax Cuts and Jobs Act and the 2018 Cost of Capital decision. - December 13, 2018 American Water press release

California-Oregon Telephone Company (Dorris, California) – The utility is passing along tax cut savings to customers:

Staff has recalculated the tax impact of the TCJA to include the excess deferred tax impact. Prior to the enactment of the TCJA, Cal-Ore’s deferred income tax liability balance was $1,182,356.  On January 1, 2018, the new tax rate of 21% resulted in deferred income tax of $730,279 causing an excess deferred tax reserve of $452,077.  This $452,077 should be returned to ratepayers ratably over the remaining life of the assets that gave rise to the excess tax reserve balance.  The TCJA provides guidance for the return of the excess deferred tax reserve under normalization rules.   In summary, the TCJA rules say that if the excess deferred taxes are to be reduced, they should be reduced no faster than using the average rate assumption method (ARAM).  But if the utility does not have the appropriate vintage data to use ARAM, an alternative method based on a composite rate is allowed.   

As a result, Staff recommends the $452,077 excess deferred income tax reserve should be returned to ratepayers over the weighted average of the remaining useful life of Cal-Ore’s depreciable assets as of December 31, 2017.  Appropriately, as the excess deferred tax reserve is returned to Cal-Ore’s ratepayers, rate base will be incrementally increased by $33,737 per year (as the $452,077 excess remaining in the deferred tax account will be incrementally decreased as it is returned to ratepayers). - August 9, 2018 California Public Service Commission document

Southern California Edison (Rosemead, California) – The utility is passing along tax cut savings to customers:

Representatives from Southern California Edison told the Union-Tribune the utility is reducing the total revenue it is requesting before the CPUC in its general rate case by about $139 million this year, about $185 million in 2019 and $235 million in 2020, largely due to the tax cut.

Without the legislation, Edison expected residential customers would see an average monthly increase of $1.51 a month this year, $5.01 in 2019 and $6.83 in 2020.

With the tax cut, the figures would drop to a 6-cents decrease per month in 2018, a $3.98 increase in 2019 and a $5.56 increase in 2020, based on average monthly usage of 550 kilowatt-hours. - August 16, 2018 San Diego Union-Tribune article

San Diego Gas & Electric (San Diego, California) – The utility is passing along tax cut savings to customers:

Sempra GRC Gas Highlights:

Disallowed SDG&E’s request to use 2018 tax savings from Tax Cuts & Job Act (TCJA) to offset expense for helicopter for fires and liability insurance, and to refund the $12 million tax savings to ratepayers over 2 years - January 2020 Energy Division document

Calaveras Telephone Company (Copperopolis, California) – The utility is passing along tax cut savings to customers:

Staff recalculated the tax impact of the TCJA to include the excess deferred tax impact. Prior to the enactment of the TCJA, Calaveras’ deferred income tax liability balance was $145,643. On January 1, 2018, the new tax rate of 21% resulted in deferred income tax of $89,956 causing an excess deferred tax reserve of $55,687. This $55,687 should be returned to ratepayers ratably over the remaining life of the assets that gave rise to the excess tax reserve balance, The TCJA provides guidance for the return of the excess deferred tax reserve under normalization rules. In summary, the TCJA rules say that if the excess deferred taxes are to be reduced, they should be reduced no faster than using the average rate assumption method (ARAM).   

Accordingly, Staff has adjusted the $55,687 excess deferred income tax reserve and returned it to ratepayers over the weighted average of the remaining useful life of Calaveras’ depreciable assets as of December 31, 2017.  Appropriately, as the excess deferred tax reserve is returned to Calaveras’ ratepayers, rate base will be incrementally increased by $10,507 per year (as the $55,687 excess remaining in the deferred tax account will be incrementally decreased as it is returned to ratepayers). - August 23, 2018 California Public Service document 

Sierra Telephone Company (Oakhurst, California) – The utility is passing along tax cut savings to customers:

Staff has recalculated the tax impact of the TCJA to include the excess deferred tax impact. Prior to the enactment of the TCJA, Sierra’s deferred income tax liability balance was $5,131,347.  On January 1, 2018, the new tax rate of 21% resulted in deferred income tax of $3,169,361 causing an excess deferred tax reserve of $1,961,986.  This $1,961,986 should be returned to ratepayers ratably over the remaining life of the assets that gave rise to the excess tax reserve balance.  The TCJA provides guidance for the return of the excess deferred tax reserve under normalization rules. In summary, the TCJA rules say that if the excess deferred taxes are to be reduced, they should be reduced no faster than using the average rate assumption method (ARAM). But if the utility does not have the appropriate vintage data to use ARAM, an alternative method based on a composite rate is allowed.    

As a result, Staff recommends the $1,961,986 excess deferred income tax reserve should be returned to ratepayers over the weighted average of the remaining useful life of Sierra’s depreciable assets as of December 31, 2017. Appropriately, as the excess deferred tax reserve is returned to Sierra’s ratepayers, rate base will be incrementally increased by $316,449 per year (as the $316,449 excess remaining in the deferred tax account will be incrementally decreased as it is returned to ratepayers). - August 9, 2018 California Public Service Commission document

360 REIT (North Hollywood, California) -- The company is building a 190-lot manufactured home community in an Opportunity Zone created by the Tax Cuts and Jobs Act.:

Located in an Opportunity Zone at 8250 Lankershim Boulevard in North Hollywood, California, Hollywood Backlot Homes will be operated as a detached multifamily rental community. The redevelopment program will involve the sponsor designing and installing nearly 140 manufactured homes. The master-planned community environment will provide renters with the comforts of class A multifamily amenities, including an outdoor pool, clubhouse, gym, billiards and gaming center, dog runs, barbeque and outdoor lounging area and gated entry. The community's attainable price points will allow renters otherwise looking for an apartment to enjoy the privacy and extra space of a detached single-family home.

Mauricio Oberfeld, Co-Founder of Multi-Opp, LLC, said, "When we discovered the Hollywood Backlot Homes property, we immediately realized it would be the perfect property to launch our detached multifamily rental concept, where renters can enjoy all the benefits of a class A multifamily asset while living in a detached residential environment with attainable rents. We believe this project embodies the true goal of the Opportunity Zone legislation, to encourage investment, housing and job creation in designated Opportunity Zones, in addition to providing an affordable option for individuals who may need extra physical space for protection against COVID-19. We are thrilled to have closed the acquisition with financing from 3650 REIT, who understood our vision and was able to navigate an incredibly complex transaction in less than 30 days." -- June 17, 2020 press release

Ralphs (Los Angeles, California) – The supermarket is hiring over 600 positions in partnership with their sister store, Food 4 Less, because of the Tax Cuts and Jobs Act:

Need a job? Supermarket partners Ralphs and Food 4 Less are now hiring to fill more than 600 open positions in their Southern California supermarkets.

"We have a variety of part-time positions that we need to fill in every Ralphs and Food 4 Less store in Southern California," said Kendra Doyel, senior director of human resources for Ralphs and Food 4 Less. "Positions are available to friendly and engaging people in most every department including front end, deli, meat, bakery and grocery."

Positions are also available at select stores in support of Ralphs' online ordering service, ClickList.

The positions for which Ralphs and Food 4 Less are hiring offer competitive wages, flexible schedules, benefits and room for advancement.

Job seekers interested in applying for a position at their local Ralphs supermarket should apply online at jobs.ralphs.com. Those applying for a position at a Food4 Less store are asked to apply at jobs.food4less.com.  

"Ralphs and Food 4 Less are great places to work where you can come for a job and stay for a career," Doyel added. "We are committed to creating great entry-level jobs and investing in our associates so they can reach their full potential. We are looking forward to adding many great people to our teams at Ralphs and Food 4 Less." – April 12, 2018, Ralphs and Food 4 Less press release.

Urban Catalyst and Urban Community (San Jose, California) -- The companies are building a mixed-use space in an Opportunity Zone created by the Tax Cuts and Jobs Act:

The site of the former Lido night club in downtown San Jose is headed for a major facelift that would preserve the property's key historic elements and add offices, retail, a restaurant and a new fountain, according to preliminary documents on file with city officials.

Fountain Alley Building is the working title for the project that would rise on South First Street in downtown San Jose and bring a mix of office, retail and dining spaces to the site, which is next to another historic building, the Bank of Italy office tower.

The six-story development is expected to total at least 50,000 square feet, according to planning documents and project builders.

"The new building will be predominantly retail and restaurant on the ground level and office on levels two through six," according to public documents submitted by the developers and Studio Current, which has designed the project.

The project has emerged as a joint effort by two San Jose-based real estate and investment companies: Urban Catalyst, headed by developer Erik Hayden, and Urban Community, led by developer Gary Dillabough.

"The corner of the building at South First and Fountain Alley will have a water fountain to identify it as the Fountain Alley Building," stated the documents on file with the city.

The 36 S. First St. structure is officially known as the Knox Goodrich Building and was constructed by Sarah Knox-Goodrich in 1889, according to a marker outside the building that described it as a "charming commercial structure."

She was "a strong advocate of women's rights and organized San Jose's first Woman Suffrage Association in 1869," the marker states. Her first husband, William Knox, was co-founder of San Jose's first bank. Her second husband, Levi Goodrich, was the architect of old county courthouses in San Jose, Monterey and San Diego.

The developers intend to upgrade and preserve the historic Knox Goodrich building so it can become the primary lobby entrance for the new office building, according to the planning documents.

"Special care will be given to maintain the entire 1889 building and the historic facade while renovating the entry lobby," the developers said in the city files.

Dillabough has begun wide-ranging renovations and revivals of multiple historic or older buildings in downtown San Jose, notably the Bank of Italy office tower.

The renovation of the old Lido Club property is made possible, in part, because it's located in an opportunity zone. In numerous communities in the United States, opportunity zones have been enabled by President Donald Trump's tax-cut initiative.

Urban Catalyst, Hayden's firm, was formed to create an opportunity fund that would provide development expertise and cash for selected properties in Bay Area districts that have been designated as opportunity zones. Large sections of downtown San Jose, as well as parts of Oakland and San Francisco, are in opportunity zones.

Potentially the first project in the San Jose opportunity zone would be the redevelopment of the Lido Club site. -- April 4, 2019 San Jose Mercury article

New York Life Real Estate (Oakland, California) -- The company is building an apartment complex in an Opportunity Zone created by the Tax Cuts and Jobs Act:

While downtown Oakland has lured major investments from big-name investors, West Oakland was largely overlooked — until now.

New York Life Real Estate Investors is among the first institutional investors to place a bet on West Oakland. The firm plans to invest $18 million into The Union, a 110-unit apartment building at 532 Union St.

Holliday Development plans to build out most of the project at Factory OS, its modular construction facility in Vallejo.

“This investment legitimizes the location and Factory OS,” said Brett Mlinarich, vice president with Highland Realty Capital Inc., who arranged the investment. “New York Life saw the opportunity to be the first.”

The Union, designed by David Baker Architects, will cost about $46 million to develop and will be one of first residential projects in Oakland built using modules. That type of construction involves producing building components made in a factory that are later stacked onsite to create a new structure.

The project site, formerly owned by Caltrans, is three blocks from the West Oakland BART Station.

“West Oakland has really become something special and it’s in an Opportunity Zone,” Mlinarich said, referring to a tax credit program that encourages long-term investment in designated low-income urban and rural areas. -- October 30, 2019 San Francisco Business Times

EJF Capital - Oakland (Oakland, California) -- A hotel is being built in an Opportunity Zone created by the Tax Cuts and Jobs Act:

The Moxy Hotel in Uptown Oakland will break ground within 60 days, joining the West Elm Hotel that started construction in January just two blocks away.

Both hotels are within a few blocks of Uptown Station, the renovated office property where San Francisco-based Square Inc. recently leased all 356,000 square feet. Other developers are building housing and retail in the area.

A $7.3 billion East Coast hedge fund and a private equity firm are leading a group investing $50 million into the Moxy. Hedge fund EJF Capital, along with partners Tidewater Capital and Graves Hospitality, will lead the development of the seven-story Marriott International Moxy hotel at 2225 Telegraph Ave. EJF Capital said in a statement that one reason it's investing in the Moxy is because it's in a federal "opportunity zone," which brings potential tax benefits with it.

The 173-room hotel is expected to open in 2021, according to Tidewater Capital Managing Principal Craig Young.

“We were attracted to Uptown just given the eclectic nature of the submarket there, and the mix of restaurants and entertainment,” Young said. He also pointed to the local arts scene and proximity of the site to the monthly First Fridays event.

The hotel will be 72,615 square feet with the bottom floor designed to feature a bar, restaurant and lounge, and perhaps a stage, all part of the Moxy brand's focus on millennial travelers.

Tidewater Capital is a San Francisco-based real estate investor and developer that will manage construction for the project, while Graves Hospitality, which will manage the hotel, is a Minnesota-based developer approved by the Marriott for the Moxy brand. The architects on the project are RSP Architects and Lowney Architecture.

Tidewater Capital is busy elsewhere in the Bay Area. It's working with Warhorse LLC on 186 units at 1028 Market St. and a separate project of 141 homes at 430 Main St., both in San Francisco.

Lead investor EJF Capital is headquartered just outside of Washington, D.C. Neither EJF nor Tidewater would disclose how much of the $50 million each company is investing.

Other developers have hotel projects outside of Uptown in the Oakland pipeline, including a 121-room Hampton Inn opening this August. Former Oakland A’s owner Lew Wolff has approvals to build a 276-room hotel at 1431 Jefferson St.

Visit Oakland President and CEO Mark Everton sees the Moxy development as one of several vital projects to boost the hospitality market in both Uptown and Oakland.

“There really aren’t any hotels in the Uptown area,” Everton said. “This is a great step. Oakland has for the last three years had the fastest-growing average daily rate of any major metropolitan area in the country.”

From 2016 to 2018, Oakland's average daily rate (ADR) rose from $137.95 to $155.79 for growth of 12.9 percent, according to an Oakland STR report. The national ADR rose from $120.01 to $129.83 during that same period, growing 8.2 percent.

To Everton, the new Moxy hotel “is not cookie-cutter. It’s unique, boutique branding that adds to the whole Oakland vibe.”

“It’s already a pretty amazing neighborhood,” Young said of Uptown. “It’s a dynamic place we feel lucky to be a part of.” -- March 21, 2019 San Francisco Times article

Starwood Capital and Holland Partner (Los Angeles, California) -- The company is building an apartment complex in an Opportunity Zone created by the Tax Cuts and Jobs Act:

An affiliate of real estate-focused private investment firm Starwood Capital Group has announced it has formed a joint venture with Holland Partner Group to acquire and develop a Class A multifamily project in Los Angeles, the company said.

Starwood and Holland expect to complete the Opportunity Zone development in the Spring of 2020.

The property will consist of 375 units in a seven-story, podium-style community with 37 studios, 177 one-bedroom units, 139 two-bedroom units, 20 three-bedroom units and 2 four-bedroom units.

Starwood Capital announced the formation of its Opportunity Zone business on Jan. 30, 2019, to ensure the success of its ongoing investments in Opportunity Zones, which were created by the 2017 Tax Cuts and Jobs Act to offer investors certain tax advantages for developing and operating assets in designated Opportunity Zones.

Starwood Capital Group maintains 13 offices in five countries around the world, and currently has approximately 4,000 employees. Since its inception in 1991, Starwood Capital Group has raised USD 45 billion of equity capital, and currently has in excess of USD 60 billion of assets under management.

Holland Partner Group, based in Vancouver, Washington, is a fully integrated real estate investment company with investments in multi-family development, redevelopment and mixed-use assets. -- May 17, 2020 press release

Russian River Brewing Co. (Windsor, California) – Because of the Tax Cuts and Jobs Act, the owner is planning on using the savings to buy "a freakin' generator."

Russian River Brewing Co. in Windsor would save about $140,000 next year from the federal excise tax break if it produces up to 40,000 barrels, co-owner Natalie Cilurzo said.

“Guess what we will probably spend that on? A freakin’ generator,” Cilurzo said in a text, referencing backup costs incurred from the October PG&E power shut-offs and the possibility the brewery will buy instead of rent a generator for next year’s wildfire season. – Dec. 18, 2019, Sonoma News article.

Food 4 Less (Los Angeles, California) – The supermarket is hiring over 600 positions in partnership with their sister store, Food 4 Less, because of the Tax Cuts and Jobs Act:

Need a job? Supermarket partners Ralphs and Food 4 Less are now hiring to fill more than 600 open positions in their Southern California supermarkets.

"We have a variety of part-time positions that we need to fill in every Ralphs and Food 4 Less store in Southern California," said Kendra Doyel, senior director of human resources for Ralphs and Food 4 Less. "Positions are available to friendly and engaging people in most every department including front end, deli, meat, bakery and grocery."

Positions are also available at select stores in support of Ralphs' online ordering service, ClickList.

The positions for which Ralphs and Food 4 Less are hiring offer competitive wages, flexible schedules, benefits and room for advancement.

Job seekers interested in applying for a position at their local Ralphs supermarket should apply online at jobs.ralphs.com. Those applying for a position at a Food4 Less store are asked to apply at jobs.food4less.com.  

"Ralphs and Food 4 Less are great places to work where you can come for a job and stay for a career," Doyel added. "We are committed to creating great entry-level jobs and investing in our associates so they can reach their full potential. We are looking forward to adding many great people to our teams at Ralphs and Food 4 Less." – April 12, 2018, Ralphs and Food 4 Less press release.

Canopy by Hilton (Sacramento, California) -- A Hilton is being built in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Downtown Sacramento is slated for a new 14-story, 275-room Hilton hotel, with construction scheduled to get underway as soon as next year.

The hotel site would be on what’s now the location of a vacant building and parking filling a quarter block on the northwest corner of Ninth and L streets. The existing building, which dates to 1965 but hasn’t been occupied in over a decade, would be demolished as part of the project.

If the project moves forward on schedule, Hill said, she’d like to open it in 2022. She estimated the project cost at about $150 million. A limited liability corporation affiliated with Venture Oaks bought 831 L St. nearly three years ago for $5 million.

“This site is situated between the arena and the convention center, and is very close to the state Capitol,” Hill said. “Those are all excellent drivers for a hotel, and Sacramento is short on hotel rooms.”

Because of its location, the project can qualify as an opportunity zone investment, Hill said. Opportunity zones are areas considered economically distressed, where investments may receive favorable tax treatment under the 2017 federal tax reform.  --December 23, 2019 Sacramento Business Journal article

Realm Group, LLC (Los Angeles, California) -- The company is building an apartment complex in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Realm Group, LLC a joint venture between Realm Real Estate, LLC of Newport Beach, California and The Bascom Group, LLC of Irvine, California, has closed on a 1.5-acre site located in Downtown Los Angeles at 675 South Bixel Street. Realm Group entitled the site for the development of a 36-story, 422-unit mixed-use high-rise multifamily building, to be built as one of the premier residential towers in Downtown Los Angeles. HFF's capital team, led by Charles Halladay, Jamie Kline, Nicholas Lench and Samuel Godfrey facilitated the land financing. Starwood Property Trust provided the debt financing for the land purchase.

The international modern, concrete, steel and glass tower has a loft style design and will feature a rooftop sky lounge providing striking views of the city's skyline along with an expansive 40,000 sq. ft. amenity deck on the 5(th) floor with an inviting pool terrace, market leading amenities including a spacious dog park, making it one of the largest amenity decks in Downtown Los Angeles.

The project is located within walking distance to a robust variety of employment, transportation, retail, restaurant/bar and grocery options. Grocery Outlet, Whole Foods, Target, Teragram Ballroom and Starbucks are a few of the notable nearby retailers. The well-located project boasts a Transit Score of 100 and a Walk Score of 95.

Darrin Olson, principal of Realm Group, commented, "Bixel Tower represents an important component to Downtown Los Angeles' ongoing successful revitalization as the city is facing a severe housing shortage. The development will be a premier asset in Downtown Los Angeles with best in class amenities. The quality conveyed in Bixel Tower will appeal to a broad spectrum of renters." Todd Cadwell, Development Manager of Realm Group, adds, "We are excited to successfully obtain the city entitlements, close on the site and begin the next phase of development."

Bixel Tower represents Realm Group's second high-rise development project in Downtown Los Angeles. Realm's original high-rise development project is located in the Fashion District and is designated as an Opportunity Zone. The Fashion District Tower will consist of a 33-story, 452-unit mixed-use multifamily community. Realm Group entitled the project and subsequently closed on the land in July 2018 with plans to commence construction in 2020. -- June 12, 2020 Realm Group LLC press release

Midas Hospitality (Los Angeles, California) -- The hospitality chain is building a hotel in Los Angeles in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Midas Hospitality has been tapped to develop a hotel in the Los Angeles area, marking a shift in strategy from the company's focus on underserved markets.

Midas will co-develop a $25 million, 107-room Residence Inn in Lancaster, California, after the brand's parent, Marriott, referred Midas to the local developer, InSite Development. The project is currently in the pre-development stage, but Midas will manage the hotel once complete, co-founder J.T. Norville said.

The Maryland Heights-based company developed a niche building and managing hotels in underserved markets like Kentucky, Ohio and the Carolinas, which helped to push Midas to one of St. Louis' largest privately held companies with $124.8 million in revenue last year. And Norville had said in 2018 that "you're not going to see us in Manhattan or Chicago."

But Norville said the Lancaster project was appealing because it was a Residence Inn, one of the strongest brands in Midas' portfolio; the area is home to a major aeronautics market with companies like Northrup Grumman and Boeing, as well as Edwards Air Force Base; and its location within an "opportunity zone," which allow investors to reinvest capital gains in federally designated economically disadvantaged areas.

"It's a good investment opportunity for our investors," Norville said.

Midas is launching an opportunity zone fund and is aiming to raise $12 million for the Lancaster project. Its first OZ fund in Midtown raised $35 million in four months.

With any of its markets, Midas will seek out more opportunities.

"Whether third-party management or continued ownership, we will want to scale out in the greater Los Angeles area," Norville said. -- June 25, 2019 St. Louis Business Journal article

Linc Housing (Long Beach, California) -- The company is building an apartment complex for people who have experienced homelessness, in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Linc Housing has announced the start of construction on Bloom at Magnolia, an all-new, 40-unit apartment community in Long Beach for people who have experienced homelessness.

Located in the South Wrigley neighborhood in central Long Beach, Bloom at Magnolia is aligned with key concepts in the City's proposed General Plan Update by incorporating smart growth principles to develop a thriving and livable community that promotes healthy living, education, opportunity and neighborhood engagement. The 37,900-square-foot site was purchased from the City of Long Beach's nonprofit affiliate, the Long Beach Community Investment Company (LBCIC), following a competitive bidding process.

....

Funding for the development comes from a variety of sources including $8.5 million from the Los Angeles County Development Authority (general funds, Mental Health Housing Program Funds, and Measure H Funds), $2 million in gap financing from the Long Beach Community Investment Company (LBCIC), a conventional loan from the California Community Reinvestment Corporation, a construction loan from Union Bank, tax credit equity from Raymond James Tax Credit Funds, Inc., and Affordable Housing Program funds from the Federal Home Loan Bank. The California Endowment provided predevelopment support. Bloom at Magnolia also benefits from the federal Opportunity Zone incentive program intended to spur economic development and job creation in distressed communities. -- April 29, 2020 Market Line News article

Carmel Partners Inc. (Los Angeles, California) -- The company is converting the building into an apartment complex with 1,210 residential units, located in an Opportunity Zone created by the Tax Cuts and Jobs Act:


On the edge of West Adams, Cumulus is rising. Developer Carmel Partners Inc.'s project sits on 11 acres at the corner of Jefferson and La Cienega boulevards near the Expo Line.
 
Cumulus is slated to have a 31-story high-rise and a seven-story mid-rise building, with a combined 1,210 residential units.
 
The property is the former site of a Cumulus Media Inc. radio station.
 
"There's a nod to that history," said Dan Garibaldi, Carmel Partners' managing partner of development and construction, citing the project and buildings' names, as well as an on-site recording studio.
 
The 31-story ARQ tower, designed by Solomon Cordwell Buenz & Associates Inc., is scheduled to start leasing this summer, with residents able to start moving in this September.
 
The seven-story VOX building, designed by TCA Architects, is expected to open in spring 2021.
 
Garibaldi said the location was a huge plus.
 
"It's at the crossroads of Culver City and West Adams. It's surrounded by the Hayden Tract and the Culver City Arts District. There's a lot of fast-growing tech, media and entertainment, but there's not a lot of housing there, and the Cumulus provides a lot of housing," he said.
 
Garibaldi said he anticipates that Cumulus will help create a greater sense of community in the area.
 
The amenity-rich project will have coworking spaces, a recording studio, spas and pools.
 
The development's 100,000 square feet of retail will be anchored by a Whole Foods store, which is expected to open in fall 2021.
 
Garibaldi said the project was "in the middle of the lease up process" and would be curating fast-casual to higher-end dining options, coffee shops, fitness centers and retailers.
 
Active West Adams
 
West Adams is home to a plethora of developments. CIM Group has filed plans for a large number of projects in the area, including a mixed-use site with 69 residential units and 6,000 square feet of retail at 5109 W. Adams Blvd.
 
CIM owns at least 40 sites in the area, said Jeff Gerlach, a vice president at CBRE Group Inc.
 
"They, over the last couple of years, have been buying up small sites here and there, and are now in the stages of building everything out," he said. "CIM really is controlling this whole project and this whole area. Their master plan and their vision is to create an Abbot Kinney- or a Highland Park-esque retail destination."
 
Gerlach added that there was high demand for office space in the area, too.
 
"The reason we're seeing this is largely because of the Westside office dynamic," he said. "There's very high rental rates and very limited amounts of space. West Adams has become this outlet for this demand for space and companies looking for space that's a little bit more affordable and still centrally located. It's on everybody's radar now. In the last 12 months, it's gone through some pretty significant changes."
 
Jones Lang LaSalle Inc. Vice President Christian Kasparian agreed.
 
"Between Culver City, the Westside and downtown L.A., prices in terms of office space, retail space, everything continues to go up. West Adams has been an affordable pocket for the time being. You have housing which is one of the more affordable locations within L.A., making this area very attractive to employers and employees," he said.
 
Public transit in the area is also attractive, market observers say, with the Expo Line and the upcoming Crenshaw Line.
 
"Developers are trying to take advantage of being a transit-oriented area and all the incentives," Kasparian said.
 
Part of the reason development is happening so quickly is that West Adams is in an opportunity zone. The zones aim to increase development in economically distressed areas by allowing investors to defer taxes on capital gains. -- March 23, 2020 Los Angeles Business Journal article

Crown Royal Developers (Van Nuys, California) -- The developer is building an apartment complex for extremely low-income residents located in an Opportunity Zone created by the Tax Cuts and Jobs Act:

Local firm Crown Royal Developers has filed plans for a 71-unit apartment complex in Van Nuys, with eight units set aside for extremely low-income residents.

The Beverly Hills-based company wants to build the 78-foot complex at 14518-14526 Erwin Street, just west of Van Nuys Boulevard, according to plans filed with the Los Angeles City Planning Department. The site is located in a federal Opportunity Zone, which provides tax incentives for long-term investors who pour money into projects in distressed areas. The Treasury Department just opened an investigation into the program, following media stories that raised questions about who was benefiting from the program.

Crown filed its plans with Santa Monica-based architecture firm Minarc through an LLC. The signatory is Asaf Glazer, president of Crown Royal Developers.

Van Nuys has seen some activity in the affordable housing arena lately. In September, prolific affordable housing developer Skid Row Housing Trust announced plans to expand into Van Nuys, with a 64-unit apartment building for low-income or very low-income tenants.

California and L.A. in particular continue to grapple with the lack of affordable housing. Gov. Gavin Newson recently threatened to withhold state transportation funds from municipalities if they fail to meet new housing production targets. -- January 16, 2020 The Real Deal article

US-Offsite (Anderson, California) -- The modular construction manufacturer is building a new plant and will create 100 jobs in an Opportunity Zone created by the Tax Cuts and Jobs Act:

A modular construction manufacturer has picked Anderson to build its first plant, and the company vows to hire approximately 100 people when it opens early next year.

US-Offsite is a volumetric building company that will make prefabricated cubes for multi-family and commercial projects, such as apartments, hotels and student housing. The cubes will be built in Anderson and then shipped to project sites from Seattle to San Diego, company co-founder Dan Ferreira said.

"We are taking an entire multi-family structure up to five stories, we slice the structure into cubes, we fully build the cubes in the plant down to finishes, paint, fixtures and then we ship the cubes to the site where they are assembled like Legos," said Ferreira, who envisions his company helping California's housing shortage.

Building this way can cut in half the time for vertical construction, and there also is a cost savings, he said. Moreover, the developer or contractor doesn't have to worry about supply chain issues, which Ferreira said is more critical amid the coronavirus crisis.

...

The Industry Road site also is in an opportunity zone, a program that is part of the 2018 federal tax overhaul. The zones are meant to create tax benefits in designated areas to spur economic development and create jobs. -- May 3, 2020, Record Searchlight article

Staley Point Capital (Los Angeles, California) -- The company is creating a self-storage facility in an Opportunity Zone created by the Tax Cuts and Jobs Act:

For its first project, Staley Point Capital wants to demolish a 21,000-square-foot South Los Angeles light manufacturing complex it acquired last month and replace it with a sprawling “state of the art” self-storage facility, according to records filed with the Los Angeles City Planning Department.

Century City-based Staley Point is a new venture formed by Kevin Staley — who co-founded the Magellan Group — and his son, Eric, who recently left Blackstone Group, Eric Staley said.

In December, the investment firm paid $7.35 million for the site located at West 25th Street and Broadway. It plans to replace the existing structures with a 109,000-square-foot storage facility featuring 24-hour digital surveillance and controlled access.

This site is located in a federal Opportunity Zone. Over 8,700 such zones have been created across the country. Developers who undertake projects in them can realize significant tax benefits by investing their capital gains in the designated  census tracts. -- January 16, 2020 The Real Deal article

Alexander Valley Vineyards (Healdsburg, California) – The vineyard was able to create new jobs, buy new equipment, and remodel their tasting rooms because of the Tax Cuts and Jobs Act:

“The craft beverage bill has been an incredible boost for our industry and this extension allows us to continue investing in our wineries by buying new equipment, remodeling tasting rooms, hiring new employees and more,” said Hank Wetzel, founder and family partner of Alexander Valley Vineyards and Chairman of Wine Institute. “All of this benefits local communities in the form of jobs, tax revenue and support for the hospitality industry.” – Dec. 20, 2019, Southeast Farm Press article.

Visa (Foster City, California) – significantly increased permanent contributions to employee 401(k) accounts:

The recent passage of tax reform legislation here in the U.S. will generate substantial benefit to businesses with U.S.-based headquarters, including Visa, through a reduction in the overall corporate tax rate. This action will allow us to increase investment in our long-term growth, and most importantly in all of you who are so integral to Visa’s success.

We are in the very early stages of determining the extent and timing of the investments that we might make. As we explore the range of potential options, taking actions in support of our employees around the world is high on our list.

As an initial step, and recognizing that the change in tax is focused on the U.S., we have looked first at improving our benefits for U.S.-based employees by significantly enriching our company contributions to the 401(k) program:

Today Visa matches 200% of eligible employee contributions up to 3% of base salary for a total maximum contribution of 6% of eligible pay.

Visa will now increase the match to 200% of employee contributions, up to 5% of base salary, for a Visa total maximum contribution of 10% of eligible pay. 

This enhanced benefit will be available to all U.S. employees, with the exception of Executive Committee members, and will take effect in late February. To encourage use of the program, we will be changing the default employee pre-tax contribution from 3% to 5% for employees who currently contribute less than 5%.

We are also exploring a range of talent, education and technology investments designed to provide sustained enhanced benefits to all employees around the world, consistent with the role everyone will play in building our business for years to come. We look forward to sharing more specifics with you in the coming months. – Excerpt from Jan. 3 internal announcement to Visa’s U.S. employees

Apple (Headquarters in Cupertino plus Apple Store locations in Bakersfield, Berkeley, Brea, Berlingame, Canoga Park, Carlsbad, Cerritos, Chula Vista, Corte Madera, Costa Mesa, Cupertino, Emeryville, Escondido, Fresno, Glendale, Irvine, Los Angeles, Los Gatos, Manhattan Beach, Mission Viejo, Modesto, Monterey, Newport Beach, Northridge, Palm Desert, Palo Alto, Pasadena, Pleasanton, Rancho Cucamonga, Roseville, Sacramento, San Diego, San Francisco, San Jose, San Luis Obispo, San Mateo, Santa Barbara, Santa Clara, Santa Monica, Santa Rosa, Sherman Oaks, Temecula, Thousand Oaks, Valencia, and Walnut Creek)

$2,500 employee bonuses in the form of restricted stock units; $30 billion in additional capital expenditures over five years; 20,000 new employees will be hired; increased support of coding education and science, technology, engineering, arts, and math; increased support for U.S. manufacturing:

     Bonuses:

Apple Inc. told employees Wednesday that it’s issuing a bonus of $2,500 worth of restricted stock units, following the introduction of the new U.S. tax law, according to people familiar with the matter.

The iPhone maker will begin issuing stock grants to most employees worldwide in the coming months, said the people, who asked not to be identified because they weren’t authorized to speak publicly. The move comes on the same day Apple said it would bring back most of its cash from overseas and spend $30 billion in the U.S. over the next five years, funding an additional technical support campus, data centers and 20,000 new employees.

Apple confirmed the bonuses in response to a Bloomberg inquiry Wednesday. – Jan. 17 2018, Bloomberg News article excerpt

     Capital expenditures, etc:

Apple expects to invest over $30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one.

Building on the initial success of the Advanced Manufacturing Fund announced last spring, Apple is increasing the size of the fund from $1 billion to $5 billion. The fund was established to support innovation among American manufacturers and help others establish a presence in the US. It is already backing projects with leading manufacturers in Kentucky and rural Texas.

Apple works with over 9,000 American suppliers — large and small businesses in all 50 states — and each of Apple’s core products relies on parts or materials made in the US or provided by US-based suppliers.

Apple, which has a 40-year history in education, also plans to accelerate its efforts across the US in support of coding education as well as programs focused on Science, Technology, Engineering, Arts and Math (STEAM). – Jan. 17, 2018 Apple press release excerpts

MEC Arial Work Platforms (Kerman, California) – $1,000 bonuses:

Company owner David White says the tax cut legislation deserves some of the credit for a boost in sales and hiring.
"Its more of an indirect effect, and as the economy has improved, and as there are more new construction starts, and our products are used in that new construction, they are used in industrial construction, and upgrades. So that has resulted in increased production, increased sales volume, which has directly affected us of course."

White says sales are way up and he's given each of the 130 employees a $1,000 bonus. May 2, 2018, ABC 30 Actions News.com article excerpt

ecUtopia (San Diego, California) – Tax reform bonuses to employees:

ecUtopia, the largest provider of EDI services within the Home Furnishings Industry, announced today bonuses for all its employees. The employee bonus is attributed to the new tax law. Under the new tax bill, corporate tax rate will drop from 35% to 21%.

Phil Kenney, CEO & President of ecUtopia, explains “we had great news from our accountants and wanted to pass that to our employees.” – May 3 2018, Furniture Today article excerpt

Simulations Plus, Inc (Lancaster, California) – $1,000 bonuses:

The premier provider of simulation and modeling software and consulting services for all stages of pharmaceutical discovery and development, today announced that it will be distributing a one-time $1,000 discretionary cash bonus to each of its employees.

Walt Woltosz, chairman and chief executive officer of Simulations Plus, said, “As we announced on April 9, 2018, when we reported record financial results for our second fiscal quarter of 2018, with the effects of the Tax Cuts and Jobs Act of 2017, we posted a deferred tax benefit of approximately $1.5 million in our second fiscal quarter, as well as lower income tax rates for January and February. – April 24, 2018 Simulations Plus, Inc press release excerpt

PodcastOne (Los Angeles, California) – $1,000 bonuses for all full-time employees:

PodcastOne Founder and Executive Chairman Norman Pattiz announced today that the podcast company will award all full-time employees a $1,000 cash bonus.

 Pattiz said, “There’s no question that cutting the corporate Federal Tax Rate to 21% will have a positive effect on business, ours included. We want our employees  to feel the direct benefit of these cuts, especially since because of their efforts we are coming off another record year in 2017. So we say, ‘Thank you to our dedicated staff and job well done.’”

PodcastOne is the nation’s largest advertiser-supported podcast network. – Jan. 30 2018, PodcastOne press release

Kramerica Properties (Merced, California) – This small family-owned company gave each of the six employees a $2,000 tax reform bonus:

My employer Kramerica Properties, a small family owned company gave each employee $2,000 once this tax bill was signed by our President. In fact, on election day, the owners gave us the day off and once Trump won the election, we got the whole weekend off and paid for. Only having 6 people employed, it is much easier and fun to celebrate these "small crumbs". 

I would also like to add that instead of the office listening to music station, we only listen to KMJNOW conservative radio, & the best part is all employees are Hispanic & love calling to the radio station. Hispanics for Trump. – M. Alcaraz, Kramerica Properties

JimRinehart.com State Farm agent (Seaside, California) – Pay raises for employees:

I am a self-employed Insurance Agent for State Farm Insurance with 3 full time employees in my office in Seaside, CA.  Because of President’s  tax reform I gave all of my staff a pay raise starting Jan 1 2018. – Jim Rinehart, State Farm Agent

Alpha Omega Winery (St. Helena, California) -- The winery used savings from the Tax Cuts and Jobs Act to invest in employee raises and new equipment:

"It was unbelievably timely because we were just coming off those fires of 2017," said Robin Baggett, who owns Alpha Omega winery in California’s Napa Valley. He used the tax savings to invest in equipment and employee raises.

“The cuts had two major parts—decreases on the amount taxed per gallon and an adjustment on the amount taxed on wines of differing alcohol levels. Before the bill, wine over 14 percent in alcohol (very common in California) fell into in a higher tax bracket, and Baggett said this led to people consciously making wine just under that threshold to avoid it. "We don't have to fiddle around with our wine [anymore]," he said.” -- Nov. 8, 2019 Wine Spectator article

Amgen (Thousand Oaks, California) – Construction of a new $300 million U.S. manufacturing plant which will employ up to 300 at the facility; $300 million investment in biotechnology ventures; $3.5 billion in capital expenditures; $100 million investment in Amgen Scholars and Amgen Biotech Experience programs; $100 million in charitable donations, and more:

  • Amgen will build a new “Next Generation” manufacturing plant in the U.S. (location TBD by Q2) – a $300 Million investment to implement Amgen’s next-generation biomanufacturing capabilities, and manufacture products for the U.S. and export markets. The construction and validation work is expected to add 220 jobs to the local economy.  In addition, Amgen expects this new facility to employ up to 300 highly skilled full-time employees.
  • We will make product in the U.S. and export it to cover 85% of our international sales. 
  • An investment up to $300 Million of growth capital for early-stage, innovative biotechnology companies in the U.S. through the Amgen Ventures fund.
  • We expect to invest ~$3.5 Billion in capital expenditures in the U.S. over the next 5 years.   
  • We’ll also grow our already substantial commitment to our communities with plans for the Amgen Foundation’s investments in the proven Amgen Scholars and Amgen Biotech Experience programs which we expect to reach $100 Million of commitment within 4 years.  We have engaged some 600,000 college and high school students in person through these programs and consider this our commitment to helping to build a pipeline of talented scientists and biologists in the U.S. and beyond. 
  • Through our Foundation’s philanthropic giving we expect to deploy $100 Million over the next 5 years in the communities where we work and live. 
  • We estimate that lower personal tax rates combined with investments we are making in enhancing base wages for these staff will create literally thousands of dollars of improvement in the average take-home pay for our typical U.S. non-executive staff member. 
  • Tax Reform provides us with more flexibility for capital deployment.  Since 2011, we have invested more than $42 Billion in research and development, innovation-based acquisitions, and long-term oriented capital expenditures.  We expect to continue making such long-term investments now while also being able to return excess capital to our shareholders in the form of growing dividends and share buybacks. 
  • Based on our confidence in the long-term outlook for the business, which was enhanced by the benefits of tax reform, we have increased our share repurchase authorization by $10 Billion. -- Amgen CEO Bob Bradway, Amgen 4th quarter 2017 earnings call
     

The Charles Schwab Corporation (San Francisco, California) – $1,000 bonus for about 9,000 non-executive employees:

President and CEO, Walt Bettinger commented, “In 2017, anticipating the tax law change and in response to the company’s strong financial performance and our employees’ unwavering commitment to clients, Schwab provided a special $1,000 bonus for about 9,000 non-executive employees. Based on the favorable environment, we also continued hiring staff across the firm’s geographic locations, adding over 1,200 net new employees, and we allocated part of our 11% overall spending increase to support client service efforts and continue to build out new business centers in Austin and Dallas that will allow us to house over 4,000 new employees in the next two years. Additionally, we expanded parental leave benefits for all Schwab employees and increased the annual corporate contribution to philanthropy to benefit our local communities.” – Jan. 25 2018, The Charles Schwab Corporation press release

Bank of the West (San Francisco, California) – Base wage increase to $15 per hour:

Bank of the West announced it will increase the company's minimum wage across the business to $15 per hour. The change will impact one-quarter of hourly team members, primarily in the Bank's branches and call centers.

The permanent increase will take effect on April 1 and is part of our long-standing commitment to reward our team members and attract the industry's best talent. At more than double the federal minimum wage, the Bank's new minimum wage is the result of a thorough internal review of the Bank's business stemming from the federal tax reform recently completed by the U.S. Congress. – Feb. 8 2018, Bank of the West press release

T.J. Maxx 118 stores in California – tax reform bonuses, increased retirement plan contributions, parental leave, enhanced vacation benefits, and charitable donations:

The 2017 Tax Act benefited the Company in the fourth quarter and full year Fiscal 2018. The Company expects to continue to benefit from the 2017 Tax Act going forward, primarily due to the lower U.S. corporate income tax rate. As a result of the estimated cash benefit related to the 2017 Tax Act, the Company is taking the following actions:

Associates

  • A one-time, discretionary bonus to eligible, non-bonus-plan Associates, globally
  • An incremental contribution to the Company’s defined contribution retirement plans for eligible Associates in the U.S. and internationally
  • Instituting paid parental leave for eligible Associates in the U.S.
  • Enhancing vacation benefits for certain U.S. Associates

Communities

Made meaningful contributions to TJX’s charitable foundations around the world to further support TJX’s charitable giving. – Feb. 28, 2018 The TJX Companies Inc. press release excerpt

Saban Capital Group Inc. (Los Angeles, California): $1,000 bonuses:

Media mogul Haim Saban on Friday became the latest to dole out $1,000 bonuses to employees in celebration of tax reform.

According to a letter to staffers at Saban Capital Group, which invests in entertainment and communications companies, Haim and his wife, Cheryl, were inspired by Disney's decision to award bonuses to its employees.

Before Disney, several companies including Comcast and Starbucks said they'd be handing out bonus checks (and Apple gave out stock bonuses) because of tax reform championed by President Donald Trump that reduces the rate paid by corporations to a maximum of 21 percent, down from 35 percent previously.

AT&T, which is trying to purchase Time Warner, was one of the first companies to announce $1,000 bonuses for 200,000 U.S. employees.

Unlike some other companies, though, the Sabans stipulate that the bonuses will amount to $1,000 after taxes. – Feb. 2 2018, The Hollywood Reporter news article excerpt

International Offset Corporation (Los Angeles, California) -- $1,000 bonuses to all employees and 1099 subcontracting partners. 

First Northern Community Bancorp (Dixon, California) -- Base pay raised by $2 per hours; $1,000 bonuses for all non-executive employees; increased charitable donations. 

Jordan Winery (Healdsburg, California) -- $1,000 bonuses for each of its 85 employees:

In response to the tax cut bill that passed this week, John Jordan, owner of Jordan Winery in Sonoma County, California, announces that he will give all eligible winery employees a $1,000 bonus as a result of the passage of the 2017 tax reform bill.Dec. 22, 2017 Jordan Winery press release

Summit State Bank (Santa Rosa, California) -- $2,000 bonuses for non-executive employees.

Wells Fargo (San Francisco, California) – Raised base wage from $13.50 to $15.00 per hour; $400 million in charitable donations for 2018; $100 million increased capital investment over next three years:

“Our announcement was directly related to the passage of tax reform.” -- Arati Sontakay Randolph, Wells Fargo senior vice president

Willis Lease Finance Corporation (Novato, California) -- $1,000 bonuses for all non-executive employees:

Willis Lease Finance Corporation (NASDAQ:WLFC) today announced that it has given all non-executive employees a one-time bonus of $1,000 as a result of the tax laws recently passed by the United States Congress and signed into law by President Donald Trump.

"We believe the new tax laws will help stimulate growth in our industry and our business specifically," said Charles F. Willis, Chairman and CEO. "We have therefore decided to return some of that benefit to our employees who work incredibly hard and are an important part of the American and global economy." – Jan. 19 2018, Willis Lease Finance Corporation press release

Walt Disney Company (Burbank, California) -- $1,000 bonuses for 125,000 employees; $50 million investment in employee educational programs:

Disney announced Tuesday it will pay over 125,000 employees a one-time cash bonus of $1,000, as well as make a new $50 million investment into education program for employees.

"We are directing approximately $125 million to our cast members and employees across the country and making higher education more accessible with the launch of this new program," CEO Bob Iger said in a statement.

Disney says both initiatives are due to recent tax reform. Some of the biggest companies in the United States have been giving out bonuses to employees, often citing the recently-passed tax bill as the motive. Boeing, AT&T, Wells Fargo, Comcast, Bank of America, and Walmart are just a few of those distributing new tax benefits to workers.

The bonus applies any full-time and part-time employees who have been working for Disney since before January 1. Those eligible will receive the bonus in two parts, with one in March and the other in September. Executive level employees are exempt.

Disney's education initiative will be available to nearly 88,000 hourly employees in the U.S.  -- Jan. 23 2018, CNBC article excerpt

AT&T -- $1,000 bonuses to 32,247 California employees; Nationwide, $1 billion increase in capital expenditures:

Today, Congress approved legislation representing the first comprehensive tax reform in a generation. The President is expected to sign the bill in the coming days.

Once tax reform is signed into law, AT&T* plans to invest an additional $1 billion in the United States in 2018 and pay a special $1,000 bonus to more than 200,000 AT&T U.S. employees — all union-represented, non-management and front-line managers. If the President signs the bill before Christmas, employees will receive the bonus over the holidays.

“Congress, working closely with the President, took a monumental step to bring taxes paid by U.S. businesses in line with the rest of the industrialized world,” said Randall Stephenson, AT&T chairman and CEO. “This tax reform will drive economic growth and create good-paying jobs. In fact, we will increase our U.S. investment and pay a special bonus to our U.S. employees.”

Since 2012, AT&T has invested more in the United States than any other public company. Every $1 billion in capital invested in the telecom industry creates about 7,000 jobs for American workers, research shows. -- Dec. 20, 2017 AT&T Inc. press release

Community Valley Bank (El Centro, California) – $500 bonus for all employees; increased charitable donations:

In consideration of the expected benefit from the corporate tax reduction, the bank awarded each employee a $500 bonus. The bank has also enhanced employee education and training opportunities for 2018 and expanded its community contribution budget toward local non-profit services. — Jan. 29 2018, Community Valley Bank press release

Lowe's (In California -- 17,000 employees at 111 stores and four distribution facilities) --  Employees will receive bonuses of up to $1,000 based on length of service; expanded benefits and maternity.parental leave; $5,000 of adoption assistance.

Home Depot (232 locations in California) -- bonuses for all hourly employees, up to $1,000.

Walmart (304 retail locations in California) -- Pay raises, bonuses of up to $1,000, expanded maternity and parental leave, and $5,000 for adoption expenses:

Today, more than 890,000 Walmart U.S. associates, including more than 136,000 in California, are receiving a share of more than $560 million total cash bonuses, including:

  • More than $160 million in cash bonuses based on their stores’ Q4 performance, and
  • More than $400 million in one-time cash bonuses tied to recent changes in tax law.
  • In California, Walmart associates are receiving approximately $34 million in combined bonuses.
     

The bonuses, along with an annual pay raise for our hourly field associates, are included in their March 8 paycheck. Between Q4 performance bonuses, tenure-based bonuses, pay increases and recent paid time off (PTO) cash outs, more than $1 billion flowed to U.S. hourly associates during the months of February and March.

In January, Walmart announced plans to increase the starting wage for all hourly associates in the U.S. to at least $11, expand maternity and parental leave benefits, and provide a one-time cash bonus for eligible associates of up to $1,000. A new adoption assistance benefit of $5,000 per child – announced in conjunction with the other changes – went into effect on February 1. -- March 8, 2018 Walmart press release

Chipotle Mexican Grill (408 locations in California) – Bonuses ranging from $250 to $1,000; increased employee benefits; nationally, $50 million investment in existing restaurants.

Ryder (35 locations in California) -- Tax reform bonuses for employees.

Starbucks Coffee Company (Over 2,000 locations in California) – $500 stock grants for all retail employees, $2,000 stock grants for store managers, and varying plan and support center employee stock grants. Nationally, 8,000 new retail jobs; an additional wage increase this year, totaling approximately $120 million in wage increases, increased sick time benefits and parental leave.

STERIS Corp. (California locations in Costa Mesa, Hayward, Ontario, Petaluma, Point Richmond, San Diego, Santa Clara, Temecula, and Tustin) -- $1,000 bonuses for non-executive U.S. -based employees:

"Like many companies, the recent tax reform in the U.S. will result in significant additional earnings for STERIS to strategically grow our business and return value to Customers, employees and shareholders.  One of our first actions on that front will be a one-time special discretionary bonus of $1,000 to all U.S. employees other than senior executives." -- Feb. 7, 2018 STERIS plc press release

FedEx (Multiple locations in California) – Accelerated and increased compensation; pension plan contributions:

“FedEx Corporation is announcing three major programs today following the recently enacted U.S. Tax Cuts and Jobs Act:

  • Over $200 million in increased compensation, about two-thirds of which will go to hourly team members by advancing 2018 annual pay increases by six months to April 1st from the normal October date. The remainder will fund increases in performance- based incentive plans for salaried personnel.
  • A voluntary contribution of $1.5 billion to the FedEx pension plan to ensure it remains one of the best funded retirement programs in the country.
  • Investing $1.5 billion to significantly expand the FedEx Express Indianapolis hub over the next seven years. The Memphis SuperHub will also be modernized and enlarged in a major program the details of which will be announced later this spring.

FedEx believes the Tax Cuts and Jobs Act will likely increase GDP and investment in the United States. – Jan. 26 2018, FedEx press release

Bank of America (Over 800 California locations) -- $1,000 bonuses for non-executive employees.

Cintas Corporation (Multiple locations in California) -- $1,000 bonuses for employees of at least a year, $500 for employees of less than a year.

Comcast (Multiple locations in California) -- $1,000 bonuses; nationally, at least $50 billion investment in infrastructure in next five years.

Note: If you know of other California examples, please email John Kartch at jkartch@atr.org

The running nationwide list of companies can be found at www.atr.org/list

 

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