John Baumer’s journey from construction sites to the heart of Arizona’s legislative process reflects a blend of lifelong passion and a twist of fate. Growing up working with his father as a tile contractor, Baumer developed an early interest in real estate, initially pursuing a real estate license. However, an unexpected opportunity at the Arizona Legislature set him on a different path, eventually leading him to his current role as the Director of Government Relations at NAIOP Arizona, a prominent commercial real estate development association.
Baumer’s unique career trajectory merges his interest in public policy with his passion for real estate. In an interview with Arizona Capitol Times, he discussed his path to lobbying, the pressing issues in commercial real estate, and the misconceptions surrounding the industry.
Transition to Lobbying
Baumer’s career in lobbying began during his final year of college when he worked as a page at the Arizona Senate. He was soon offered a position as a legislative assistant, where he spent a couple of years. From there, Baumer entered contract lobbying and has been lobbying for ten years. His work eventually led him to a connection with Suzanne Kinney, President and CEO of NAIOP, who was seeking someone to bring the association’s lobbying efforts in-house. Baumer was offered the opportunity, and it turned out to be a perfect match of his interests in public policy and real estate development.
Commercial Real Estate: An Overview
Commercial real estate encompasses a wide range of property types, excluding single-family residences. This includes office buildings, industrial properties, warehouses, manufacturing sites, retail spaces, and multifamily apartments, to name a few. For Baumer, his personal connection to real estate development made him an ideal candidate to represent the industry’s interests.
Key Issues in Arizona’s Commercial Real Estate Landscape
This legislative session, Baumer and NAIOP have been focused on several key issues. One major area of concern is construction defect reforms related to the “missing middle” housing shortage. Specifically, they are advocating for changes to laws surrounding properties with shared wall components, which carry disproportionately high insurance premiums. The aim is to make it easier to develop multifamily housing in Arizona, addressing the growing need for affordable housing.
Baumer also mentioned the ongoing water policy discussions, which are critical to the future of development in the state. As Arizona looks to conserve and better manage water resources, Baumer’s role is to ensure that any new policies are both feasible and cost-effective, ensuring continued growth in the commercial sector. Additionally, energy concerns, particularly about ensuring a reliable power grid, have gained prominence. With Arizona’s attractiveness as a destination for businesses, maintaining a dependable power supply is crucial.
The air quality regulations in Maricopa County are another key concern, especially since the region is in severe nonattainment for particulate and ozone matter. Stricter federal standards could halt manufacturing developments in the area, creating significant challenges for developers.
The Future of Commercial Real Estate in Arizona
Looking ahead, Baumer is optimistic about the growth prospects for Arizona’s commercial real estate sector. He believes the state’s business-friendly environment, along with its appeal to large corporations like TSMC and Intel, will continue to drive commercial development. The Phoenix area, in particular, is expected to see strong growth compared to other parts of the nation.
Misconceptions About Commercial Real Estate Development
One common misunderstanding Baumer seeks to address is the perception that commercial developers simply buy land and build. In reality, commercial real estate development is highly complex, involving various financing components, known as the “capital stack,” which includes debt, investors, and gap financing. The timeline for a project can be affected by multiple factors, including delays in zoning approvals, cost fluctuations, and supply chain issues. Baumer emphasizes that understanding these financial intricacies is crucial for policymakers to support effective and feasible development policies.
What Drives Baumer’s Passion
Despite the challenges of lobbying and navigating the complexities of commercial development, Baumer is driven by his passion for the industry and the people within it. He enjoys working with NAIOP’s members and the legislators involved in the process. Baumer values Arizona’s merit-based approach to business, where success is determined by performance, not by one’s background or connections.
Baumer’s role as a lobbyist for commercial real estate is a testament to his unique blend of interests in public policy, development, and real estate. His work continues to influence the policies shaping Arizona’s growth and its business-friendly climate.
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