An Interview with Dan Wagner, SVP of Government Relations, The Inland Real Estate Group of Companies, Inc.
Dan Wagner is the SVP of Government Relations for The Inland Real Estate Group of Companies, Inc. (Inland), and serves on numerous real estate industry and governmental boards and committees. As a member of the International Council of Shopping Centers, Dan was a significant advocate for recent laws permitting states to charge sales tax on purchases made from out-of-state sellers. In 2020, Dan was selected to serve on the Executive Committee for the Institute for Portfolio Alternatives (IPA) and received the IPA Outstanding Service Award for his role as Co-Chair of the Policy and Government Affairs Committee in 2018. He was recently selected to serve on the Real Estate Roundtable’s 1031 Like-Kind Exchange Coalition, whose mission is the preservation of the Internal Revenue Code Section 1031 Exchange program.
Dan (virtually) sat down with members of The Inland Academy to discuss the work Inland does to help educate legislators and the public on the real estate industry and the important impact it has on the American economy.
Tell us a little bit about your background and how you came to be the SVP of Government Relations at Inland?
Although I’ve had several different jobs throughout my career, my role as a Property Damage Claim Rep for State Farm Insurance Company led me to connect with a state minority leader. With my bachelor’s and master’s degrees both including political science, I started volunteering for this minority leader, and eventually went to work for him full time when he became the Speaker of the Illinois House of Representatives. During a fundraising event, I met a gentleman in the hallway, and we struck up a good conversation – low and behold the gentleman I was speaking with was the Chairman and CEO of The Inland Real Estate Group of Companies, Inc. We stayed connected over the years and, recognizing the importance of local, state, and national advocacy for the real estate industry, he called me to ask if I would come work for him at Inland. That was 16 years ago.
What does your role as SVP of Government Relations entail?
My position is interesting because I don’t believe that any other company really has a position like mine. It’s my job to be aware of what’s happening over in Washington, along with the local and state government, and to alert Inland executives and employees of any policy or regulatory issues that might have an effect on our business. I also assess what needs to be done to address any potential changes or challenges. It is also my responsibility to bring together all of the associations we work with – and any others necessary – to coordinate efforts on behalf of Inland and the real estate industry as a whole.
In its 50+ year history, Inland has aligned with many prominent industry associations. Can you name a few associations that Inland has created strategic relationships with and why those relationships are so important?
Inland and its member companies’ have created strategic relationships with several different associations, and some of the associations might be surprising because they are not specific to the real estate industry. Inland believes it’s important that our organization has a role to play in our community, so locally, Inland is a member of the Oak Brook Chamber of Commerce. We are very involved with The Chicago Association of Realtors, winning several awards throughout the years. For the state of Illinois, Inland is a member of the Illinois Retail Merchants Association because of all the different shopping centers we have owned over the years. We’re also an active member of the Illinois Chamber of Commerce and the Illinois Manufacturers Association in order to have a larger view of what’s happening across the state and work with state legislators to help affect change. Overall, Inland’s goal is to be educators and a leader in all of the different industry associations and business organizations.
You’ve mentioned previously a very active relationship with the National Association of Realtors (NAR). Why is this relationship of significance to Inland?
The realtor community is the real estate industry’s most powerful advocate. There are 1.3 million REALTORS® throughout the United States. REALTORS® act as boots on the ground in Congresspersons’ districts and know all about the community and its constituents. This becomes significant when I meet with elected officials because I’m able to establish a rapport with them about knowing a NAR member who the official may know from their campaign, or around the community, etc.
In addition to developing these strategic relationships with various associations, describe some of the ongoing efforts Inland takes to help inform and educate on the importance of the real estate industry?
An important aspect of my role is to meet with state and local leaders to discuss the relevance the real estate industry has on their local economy. In pre-pandemic times, other association leaders and I would “walk the hill” to meet with Congressmen and Congresswomen to educate them on the importance the real estate industry has on the overall American economy and to help shape policy and regulations.
Why is it important for real estate firms, such as Inland, to advocate for the industry at both the government and local levels?
If it was not for leaders in the industry, then who would step-up to fight for the real estate community? It’s really up to the industry leaders to educate lawmakers and regulators on the impact the rules and regulations they’re putting into place, or considering, could have on people or the economy in their area. The biggest reason Inland takes on such a large leadership role is that we want to protect investors. Sometimes, you’ll run into legislators that devalue the importance of a real estate investment, but as an advocate, we’re able to explain to them that people invest in real estate for their own retirement as well as many other reasons.
What are some of the policy issues that Inland has taken an active leadership role in advocating for or against?
Nearly 16 years ago, Inland identified a disparity between the sales tax collected from an online purchase and the tax on an in-store purchase. Back then, when an item was purchased online, the sales tax wasn’t automatically collected, and that made it hard for brick-and-mortar stores to compete. Inland joined the Marketplace Fairness Coalition with its long history of working with the International Council of Shopping Centers and helped advocate for the Marketplace Fairness Act (MFA). While the MFA never became an official law, in June 2018, the Supreme Court ruled 5-4 in the South Dakota v. Wayfair case that states can mandate that online retailers without a physical presence can collect sales taxes on any transactions made by individuals living within the state.1 This ruling led the way for numerous states to issue legislation that requires the collection of sales taxes by online businesses and merchants.2
Another interesting regulatory policy that we advocated against was the Department of Labor’s fiduciary rule, which suggested that it was a conflict of interest for a financial professional to receive a commission. Because of our partnership with the U.S. Chamber of Commerce, we were one of the first organizations to alert them of this new regulation and its impact on the alternative investment industry and help to keep this regulation from being enacted in its original form.
Most recently, I’ve been working with legislators in Washington to educate them on the importance of Section 1031 of the tax code. It’s a common misconception with new administrations to think Section 1031 exchanges are only used by high-net worth individuals in order to avoid paying their fair share in taxes. In reality, Section 1031 exchanges support a wide range of individuals -- from middle-income Americans with small real estate holdings that are helping to fund their future retirement, to farmers looking to sell their farmland that don’t have the cash available to pay the capital gains taxes owed, and even conservation groups benefit from Section 1031 of the code.