Kilroy Realty-backed ballot initiative aims to shoot down Measure ULA
If passed, it would raise the threshold for special taxes to approval by two-thirds of voters
A new state ballot initiative backed by Kilroy Realty is hoping to invalidate Measure ULA, a recently passed measure that adds hefty taxes on commercial and residential sales over $5 million in the city of Los Angeles.
Proponents of the initiative have garnered enough signatures — more than 1 million in total — to place the new proposal on the 2024 ballot, according to the California Secretary of State. About 392,000 of those signatures came from L.A. County.
Under the proposed initiative, all new taxes passed by the California State Legislature would have to be approved by voters. And for any local special tax increases, voters would have to approve the measure by a two-thirds vote, rather than a simple majority as at present.
While the ballot initiative does not mention Measure ULA, it states that any local tax imposed after January 2022 but before November 2024 that “was not adopted in compliance” with the two-thirds requirement will be voided.
Since Measure ULA won 57 percent of the vote — not two-thirds — the tax would become invalid. To come back into effect, Measure ULA would have to return as a ballot initiative and score a two-thirds, or 66.7 percent, vote.
Kilroy is listed as a sponsor of the Taxpayer Protection Act, along with the California Business Roundtable, according to a website for the ballot initiative. Kilroy did not respond to a request for comment.
Commercial landlords and investors have criticized Measure ULA, which would add a 4 percent transfer tax on all sales over $5 million and a 5.5 percent tax on sales over $10 million. Proceeds from the tax will be used by the city to fund homelessness initiatives and new affordable housing projects.
Despite the electoral win, the city was already expecting a fight over the tax.
“I’m worried that the real estate community is definitely going to come at this full force,” Mayor Karen Bass said on an L.A. Times podcast last month. “So in my opinion, we have to get everything we can out of it.”
Though advertised colloquially as a “mansion tax,” brokers have suggested it will lead to pricing reductions across the board, as interest rates have already dragged down valuations.
“It makes it harder to transact,” Newmark broker Kevin Shannon said in November after the tax passed. Travis Traweek, a broker at Stepp Commercial said the addition of the tax created a “perfect storm.”
“People already want to leave L.A., with the eviction moratorium, interest rates and rent control issues,” he said.
A number of commercial players had donated to campaigns fighting Measure ULA, though they lost the effort. Hudson Pacific Properties donated $250,000; Sam Zell’s Equity Residential, one of the largest multifamily owners across the country, donated $50,000; Glendale-based Public Storage donated $495,000, while large Downtown L.A. office owner Brookfield donated about $275,400, according to campaign filings.
Kilroy did not donate to the campaign opposing Measure ULA. However, the California Business Roundtable donated more than $3.5 million towards the effort.