Michael Brooks, who headed The Real Property Association of Canada (REALpac) from 1997-2012, will return as CEO of the industry association in the new year.
It is a bittersweet return for Brooks. The current group leader of Toronto law firm Aird & Berlis LLP‘s real estate arm takes the reins of the organization from his successor, former CEO Paul Morse, who is unable to continue after suffering a stroke earlier in the year.
“It is not the circumstance under which one would want to return, but REALpac is my baby and I just feel an obligation to keep it going,” said Brooks.
Putting his legal practice “on the back-burner” will take some time and explains Brooks’ delay in resuming his role as CEO following continued requests from both REALpac staff and members of the board after it became apparent Morse would not be able to return.
“It happened that way with the board and with staff, staff called me up, too,” Brooks said. “I kept in touch with staff and I think you can probably thank staff for brokering the deal, so to speak. They are great people there and I am really looking forward to re-engaging with them.”
New, old focus
Brooks, who made his reputation in his prior posting at REALpac on swaying regulation in Ottawa, tax reform and sustainable development, sounds like he will concentrate on many of the same issues the second time around.
“Certainly what has been happening in sustainability circles is relevant to (members’) businesses and we will try to keep on top of that and maintain the leadership position in that space,” he said.
“But there is also a lot happening in capital markets that needs to be monitored and in advocacy positions. We have this issue of the parking lot tax to fund Metrolinx which we have been fighting against. We have been advocating a 1031-like exchange like they have in the U.S.
“We probably also need to keep on top of property tax and other kind of peripheral taxes that creep on the development side and make sure those are reasonable and manageable.”
With more potential fights to pick than time and staff to fight them, the main role of the CEO may be in determining just which ones are really worth dropping the gloves over.
“The ones that are winnable, the ones that reflect the industry in a leadership position that are on the high moral ground while at the same time being community . . .,” he said. “That has always been the trick at REALpac, to make sure that you take the scarce resources of the bodies that you have and the members that you have and you use them wisely.”
The association celebrated some major victories during Brooks’ last go-around. On the REIT side of the business, wins included the limited liability issue which was concluded in the middle part of the last decade and getting TSX/S&P listings for REITs.
Perhaps the biggest success of the first REALpac era was avoiding a so-called Halloween Massacre fate for real estate trusts when Ottawa changed the tax treatment for income trusts in 2006.
“Avoiding that massacre was the payoff for some defensive work before that day,” Brooks said.
REALpac and the industry also won three separate amendments to the SIFT rules after Finance Minister Jim Flaherty said there would be no further changes.
“If the U.S. is any indicator, you always have to keep an eye on the tax rules and make sure that it is enabling business to run itself on a reasonable basis,” said Brooks.
Easy being green
While he is not officially back and only agreed to return to REALpac this week, Brooks is already using the “we” when talking about the association, especially when it comes to its slate of environmental initiatives.
“We have been a leader, REALpac has been a leader in that green space. With our Green Lease, with the 20-by-15 (energy reduction) program, with our energy normalization benchmarking program, and that agenda will continue to grow.”
Next year, the association intends to introduce a water benchmarking normalization program and expand its energy normalization benchmarking program beyond the office sector. Perhaps its most ambitious effort is its program with IPD to link valuation data to green building status.
“We should be able to tell you for Canada that a LEED Gold building in the Toronto, Vancouver, Calgary, Edmonton market is worth six per cent more than a non-LEED building,” he said. “That would be the holy grail and we are starting to get there with the data that we have been collecting over the last couple of years.”
Brooks was also happy to add that Morse continues on his road to recovery, based on reports from REALpac directors and close friends.
“He is recovering, he is recovering well. His mental capacities as I understand it were never affected. He has his sense of humour, his friends.
“He is walking with a cane, which is great, so he is improving.”