Interview with ExchangeRight's Geoffrey D. Flahardy Regarding the FEA Mid-Year

Mar 23rd, 2017

With Donald Trump (@realDonaldTrump) in the White House and the GOP controlling both chambers of Congress, significant tax reform is likely to be passed in 2017. House Ways and Means Committee chairman Kevin Brady (R-TX, @RepKevinBrady) has even said that they intend to use the budget reconciliation process if necessary to get it through. As we and others have reported, the 1031 Exchange is on the chopping block, despite all of its economic benefits. Last week the Federation of Exchange Accommodators (@FEA1031) held its 2017 Mid-Year Meeting and Hill Visit in Washington, DC (#FEAMidYear).

We reached out to Geoffrey D. Flahardy, the National Accounts Director at ExchangeRight Real Estate who was in attendance, to ask him about the FEA meeting and Hill visit with the hope of gaining some insight into upcoming legislation that might affect the 1031 Exchange.

SaveThe1031.org:
Thank you so much for joining us, Geoff! 

Geoffrey D. Flahardy:
Thank you for reaching out to me. Happy to participate. 

S1031:
Can you tell our audience a little bit about what you’ve been up to over the past week? 

GF:
Sure, absolutely. I spent the first part the week at the FEA Meeting in Washington, DC. 

S1031:
What can you tell us about the conversation that’s taking place in Washington right now as it relates to the 1031 Exchange? 

GF:
Well we heard from U.S. Representative Peter Roskam (R-IL, @PeterRoskam), and he spoke on tax reform and other major shifts in Washington, while relating this back to what concerns our own industry most—the 1031 Exchange. Central to the current discussion on the Hill is getting the American economy growing faster than its current rate of around 1–2% per year, into the 3–4% range. I think it’s really important to revolve our own conversations with lawmakers about the 1031 around that core concept, by showing them just how critical the 1031 Exchange is to the economy. 

S1031:
Who else did you hear from besides Representative Roskam? 

GF:
Well that first day of the FEA meeting consisted entirely of educational sessions centered around tax reform. This was dissimilar to the usual sessions, which typically revolve around 1031 process issues. The first session was an address from U.S. Representative Mike Thompson (D-CA, @RepThompson), who serves on the House Ways & Means Committee, which is the primary tax writing committee in the House of Representatives. His sentiments were not that different from Roskam, and shed additional light on the difficulties such reforms are facing. 

S1031:
How is the 1031 Exchange being viewed in the House? 

GF:
Some see the repeal of the 1031 Exchange as a “pay-for” to account for the major tax cuts proposed in the House Republican Blueprint. 

S1031:
You know as well as we do that it has been demonstrated by multiple independent studies that repealing the 1031 Exchange would be absolutely devastating to the economy. [Editor's note: See here, here, and here.] 

GF:
Of course, and that’s one of the biggest reasons we were there; to foster relationships with lawmakers and try to get that point across. Which, by the way, www.SaveThe1031.org (@SaveThe1031) was praised highly for its content, ease of use, and broad reach. We all owe a debt of gratitude to everyone working behind the scenes to keep things going, educate the public, and mobilize the constituents of legislators to write to their representatives, urging them to preserve the 1031 Exchange. [Editor’s note: Send your own letter here.] 

S1031:
Well thank you, Geoff! Happy to play our part. So how did you spend the rest of your week? 

GF:
On the Hill! There were 62 of us, broken up into 15 teams. Meetings had been pre-scheduled by the FEA and team captains assigned to guide each through the process. On my team was Scott Saunders (team captain) (@1031TaxExchange), Andrew Gustafson (@Atlas1031), and John Mangham. Andrew is a QI in Fort Walton Beach, FL a sole proprietor (one man shop) owner of Atlas 1031 Exchange, LLC. John is the Southeast regional manager for Starker Services, Inc. working out of Atlanta. Our team had seven scheduled meetings, beginning at 9:30 a.m., with the final meeting at 4:30 p.m. We met with low-level and high-level staffers from the offices of Tom Graves (R-GA, @RepTomGraves), Bill Posey (R-FL, @CongBillPosey), Doug Lamborn (R-CO, @RepDLamborn), Johnny Isakson (R-GA, @SenatorIsakson), Marco Rubio (R-FL, @MarcoRubio), Bill Nelson (R-FL, @SenBillNelson), and Barry Loudermilk (R-GA, @RepLoudermilk). These representatives, from both the House and the Senate, were chosen for our group based on our geographic region. Barry Loudermilk, for example, is my district rep in the House. 

S1031:
Wow, sounds productive! Sounds like we all owe the FEA in general, and the 62 of you in particular, a debt of gratitude! What was your general impression from these meetings? 

GF:
I would say fairly positive. Most staff were aware of the 1031 Exchange, although there were some exceptions. We were able to educate them about the core issues while taking the advice I gave you earlier—framing the message around economic growth. The FEA equipped us with a packet of information containing key letters and research that could then be taken back to the senators and representatives for debriefing. 

S1031:
Did you learn anything about the timeline for tax reform? 

GF:
In all our meetings it was remarked that tax reform is something to be discussed in the near future, following the repeal of the Affordable Healthcare Act. 

S1031:
Did you get traction with anyone? 

GF:
Yes, absolutely. Monica McGuire, Senator Isakson’s Tax Policy Advisor, was the most engaged of all, and took copious notes. Senator Isakson is an advocate for 1031, as well as Representative Doug Lamborn, who does not want to see the 1031 Exchange repealed as a so-called pay-for. All offices we met with were appreciative of our efforts to get ahead of the issue to educate them on this particular subject. 

S1031:
How did the other teams fare? 

GF:
After our time on the Hill, those who didn’t leave immediately for airports had a short debrief time. However, there wasn’t a larger group discussion to hear from all the teams to learn what a general consensus might be. I’m glad you’ll be sharing this interview with the industry. Maybe some of the other teams will share as well. 

S1031:
Good point. Any concluding remarks for our readers? 

GF:
I think we have all been concerned about the potential to see 1031 Exchange limited or repealed. I know I have. Yet, I find myself coming away from these meetings hopeful. I am hopeful because Washington is listening. With healthcare reform, border security, and other issues at the fore, it seems to me that constituents still have a little time left to engage their representatives about tax reform. The types of tax reform on the table for discussion are of the size and caliber of the 1986 Tax Reform Act. This was no easy Act to pass, and it seems to me that another overhaul will require careful deliberation on Congress’ part. I intend to take a sober but hopeful message back to my friends and advisors who are concerned with the same issues, and encourage those who have not yet contacted their representatives to do so while we still have a window of opportunity. I hope this interview was helpful to you all. I want to express my gratitude to the managing members of ExchangeRight for being supportive of the FEA for the last 2 years. I am especially grateful for David Fisher, who was able to make it out for this event well. Supporting the FEA has been the right thing to do. Thanks to them for allowing me to participate in this, and thank you for asking me to share it with you and your readers as well. 

S1031:
You are so welcome, Geoff. We really appreciate the efforts of the FEA, ExchangeRight, Asset Preservation, IPX (@IPX1031), yourself, and all of the others working to #SaveThe1031

 


 

Did you attend the FEA Mid-Year? Do you want to share your experience with the 1031 Exchange industry? Please email contact@savethe1031.org.