BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 204 (Liu) - State Route 710: sale of excess properties for
local alternative transportation improvement program.
Amended: August 24, 2012 Policy Vote: not relevant
Urgency: No Mandate: No
Hearing Date: August 31, 2012
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 204 would require the California Transportation
Commission (CTC) and the Department of Transportation (Caltrans)
to declare as excess property the surface estates of properties
acquired for construction of the State Highway Route (SR) 710
Gap Closure Project and require Caltrans to sell those
properties, as specified. Proceeds from the sale of the excess
properties would be used to fund projects in a local alternative
transportation improvement program (LATIP) developed by the Los
Angeles County Metropolitan Transportation Authority (MTA) and
approved by the CTC. At least 25 percent of the proceeds must
be used to construct soundwalls on SR 210, and no funds may be
used for activities related to the tunnel alternative to the
surface SR 710 Gap Closure Project.
Fiscal Impact:
Loss of funds to the State Highway Account, potentially
over $200 million, that would otherwise be available for
projects on the state highway system, including for the SR
710 tunnel alternative, absent this bill. This bill would
instead require all proceeds from the sale of excess
properties to be used for soundwalls on SR 210, replacement
housing and relocation assistance, and local transportation
projects in the LATIP.
Unknown administrative costs to CTC to approve the LATIP
and make findings that the plan includes feasible funding,
plans, and capacity to meet the requirements of the bill,
including the provisions for housing relocation assistance
and replacement housing units, for which CTC does not have
current in-house expertise.
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Potential risks to federal funds for the SR 710 Gap Closure
Project by providing relocation assistance to current
tenants that are expressly ineligible under federal law.
Background: Under existing law, whenever Caltrans determines
that real property acquired for highway purposes is no longer
necessary, that property may be sold or exchanged upon terms,
standards, and conditions established by the CTC. Proceeds from
the sale are returned to the State Highway Account. If a
proposed state highway route location is rescinded, existing law
requires Caltrans to sell any excess real property acquired for
the rescinded route location and use the proceeds to fund the
state highway project proposed as the alternative to the
rescinded route.
Existing law, specific to the State Route (SR) 84 and SR 238
corridors in Alameda County, authorize the county or affected
cities to partner with the local transportation planning agency
to develop a LATIP that addresses transportation problems and
opportunities in the area that would have been served by the
state highway project that was deemed infeasible and never
built. The CTC must approve the LATIP, after which local
agencies use the proceeds from Caltrans' eventual sale of the
parcels to fund the approved LATIP. With respect to the SR 238
corridor, the LATIP must also include programs to provide
relocation benefits to displaced residents and to replace
housing units from which low- and moderate-income residents are
displaced pursuant to a specified consent decree. The SR 238
corridor LATIP provisions explicitly prohibit state highway
account funds from being used for the housing provisions of the
LATIP and prohibit excess property and the proceeds from the
sale of those properties from being used for housing purposes.
For decades Caltrans has proposed the SR 710 extension project
to close a roughly 4.5-mile unconstructed gap in the freeway
from just north of SR 10 in Los Angeles to SR 210 in Pasadena.
This gap affects the cities of Alhambra, Pasadena, South
Pasadena, and a portion of Los Angeles. Beginning in 1953, when
the location of the SR 710 Gap Closure Project was originally
identified, Caltrans has acquired nearly 600 properties in the
corridor with the intent to eventually remove structures and
construct the freeway project. The proposed project has
engendered considerable and ongoing controversy over the years,
evoking both strong support and opposition from various parties,
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and has been the subject of numerous lawsuits. Caltrans has
been an unwilling long-term property manager for years, which
has also been the subject of controversy and the subject a
recent Bureau of State Audit report that criticized Caltrans'
management of over 400 rental properties.
Over the past forty years, alternative concepts have been
proposed and evaluated to complete the SR 710 freeway and close
the 4.5 mile gap in the corridor. To date, none of the
previously proposed and evaluated alternatives have been
successful in satisfying the regional mobility needs and
community/environmental concerns because they would traverse
highly developed urbanized neighborhoods and require substantial
amounts of right-of-way along the alignments. In response to
negative reactions, and to decrease the potential impact of
completing the SR 710, a tunnel concept was proposed for
assessment as a potential option to the surface alternatives.
MTA, as the lead agency, has completed the feasibility
assessment of a tunnel alternative to extend the SR 710 from its
current terminus at Valley Boulevard in the City of Los Angeles
to Interstate 210 in the City of Pasadena. Generally, the study
concluded that the tunnel concept is feasible. MTA is currently
in the midst of an environmental review of the SR 710 study
area. Caltrans projects that completion of the draft
environmental impact report and selection of a locally preferred
alternative to the surface gap closure project is approximately
three years away. Consideration of the option of a surface
construction alternative is not likely to be eliminated before
that time.
Proposed Law: SB 204 would authorize MTA to propose a LATIP by
which MTA may use the proceeds from the sale of surplus
properties in the SR 710 study area to address transportation
problems and opportunities in the cities in which the surplus
property is located. Specifically, this bill would:
Require CTC and Caltrans to declare as surplus the surface
properties acquired for construction of the SR 710 extension
in Pasadena, South Pasadena, Alhambra, and the City of Los
Angeles upon the elimination of a surface freeway construction
alternative from further consideration in the environmental
review of the SR 710 North Gap Closure Project, or completion
of the draft environmental impact report and Caltrans'
selection of the locally preferred alternative for that
project, whichever occurs first.
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Require Caltrans, after declaring the properties surplus, to
sell the properties and grant tenants in good standing of
non-residential properties a right of first refusal to
purchase the property they rent, lease, or occupy at fair
market value.
Authorize MTA, in consultation with Caltrans and acting
jointly with the cities in which excess properties are
located, to develop and file with the CTC a LATIP that
addresses transportation problems and opportunities in those
cities.
Provide CTC with final authority regarding the content and
approval of the LATIP and require CTC to make a finding that
the plan includes feasible funding, plans, and capacity to
meet all legal requirements.
Require Caltrans to deposit all proceeds from the sale of the
excess properties in the SR 710 corridor, less any
reimbursements due to the federal government and all costs
incurred in the sale of those excess properties, into a
separate account.
Require CTC to allocate these funds for transportation
projects in the LATIP or to meet the housing obligations of
the LATIP. At least 25 percent of the proceeds must be
allocated to construct soundwalls on SR 210, as specified.
Prohibit the expenditure of proceeds from the sale of
properties on any activity to advance any subsurface
alternative (i.e., tunnel) as the SR 710 North Gap Closure
Project, including, all planning, studying, staffing, or
construction.
Authorize MTA, with the concurrence of the CTC and Caltrans,
to use its own funds to develop or advance a project included
in the LATIP prior to availability of sufficient funds from
the sale of the excess properties.
Require the SR 710 LATIP to include specified programs for
relocation assistance to residents displaced by LATIP
projects, for relocation advice and moving expenses for those
not eligible for assistance, and for providing replacement
housing for low or moderate income persons and families.
Replacement units must be completed within four years and the
program would include an objective that at least 20 percent of
all new housing units be affordable to low- or moderate-income
households.
Related Legislation: AB 113 (Portantino), as introduced in 2009,
would have required Caltrans to sell real property acquired in
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the SR 710 corridor and directed a portion of the proceeds equal
to Caltrans' original acquisition price into the State Highway
Account, and the remainder to the General Fund for higher
education purposes. The bill failed passage in the Assembly
Transportation Committee and was subsequently amended to deal
with a different subject.
AB 1617 (Liu), introduced in 2005, would have required Caltrans
to compile an inventory of properties in the SR 710 proposed
right-of-way that are deemed surplus to any reasonable likely
alignment, and to offer the properties for sale, and to provide
first priority to long-term residents, as specified. The bill
failed passage in the Senate Transportation and Housing
Committee.
Staff Comments: This bill is intended to expedite the sale of
properties in the current surface SR 710 Gap Closure Project
area and to keep the proceeds from the sale of those properties
for local transportation projects and housing and relocation
assistance for those displaced by those projects, other than the
now-proposed tunnel. Absent this bill, those proceeds would
revert to the State Highway Account and become subject to the
formulas for statewide distribution, or for use as a replacement
to the rescinded state highway route. According to the author,
"The communities in which the properties were acquired for the
project as originally conceived have been impacted by having
these properties off the tax rolls and in public rather than
private ownership for over 50 years. It is appropriate that the
broader community benefit from the construction of truly local
alternative transportation improvement projects distributed
throughout the study area rather than being applied to the 710
project itself."
According to a March 1, 2012 estimate by Caltrans, the market
value of the SR 710 parcels is approximately $279 million,
although this estimate is not based on an official appraisal.
Absent this bill, the proceeds from the sale of these properties
would be deposited into the State Highway Account for use on
other highway projects in the state. This bill would authorize
MTA to propose, and CTC to adopt, an LATIP that addresses
transportation problems in the Pasadena, South Pasadena,
Alhambra, and Los Angeles, even if they are not related to
transportation issues related to the unbuilt SR 710 Gap Closure
Project. The bill requires the LATIP to also include specified
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programs for relocation assistance and replacement housing for
those displaced by LATIP projects. Instead of the proceeds from
the sales of excess properties in the SR 710 corridor being
deposited into the State Highway Account, the proceeds would be
used for the LATIP projects and housing relocation assistance
and replacement programs. As a result, the bill would result in
a loss to the State Highway Account of over $200 million.
Caltrans notes that under federal law, relocation assistance and
replacement housing may not be provided to tenants being
displaced by a project from homes for which relocation
assistance or replacement housing has already been provided when
the properties were originally acquired. As a result, the bill
could place several billion dollars in federal funds for an SR
710 Gap Closure Project at risk.
This bill is generally based on the LATIP provisions that allow
cities in Alameda County to use the proceeds from the sale of
surplus properties in the SR 84 and SR 238 corridors for local
transportation projects. Nonetheless, this bill differs from
the Alameda County LATIP provisions in the following ways:
MTA, rather than the affected cities, is the lead LATIP
applicant but must act jointly with those cities.
In approving the LATIP, the CTC must find that the plan
includes feasible funding, plans, and capacity to meet all
legal requirements.
There is no prioritization of LATIP funding for projects in a
local voter-approved transportation sales tax measure.
Proceeds from the sale of surplus properties may be used for
the housing obligations of the LATIP in addition to
transportation purposes. The SR 238 LATIP provisions only
include housing-related assistance as a result of a consent
decree.
Most importantly, the SR 84 and SR 238 LATIPs were intended to
replace the state highway project that was never going to be
built, while the SR 710 Gap Closure Project is still a viable
project.
The committee may wish to consider whether this bill is
premature since the SR 710 project planning is currently
underway and any alternatives to the surface construction
project are not likely to be identified for at least three
years. In addition, the Committee may wish to consider whether
the bill should explicitly preclude any proceeds from the sale
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of excess properties acquired for the surface construction of
the SR 710 gap closure from being spent on the tunnel option
since that option would alleviate transportation issues in the
immediate area and the region.
Staff notes that Streets and Highways Code § 167 explicitly
prohibits the Legislature from enacting legislation containing
specific individual transportation projects. The provision of
this bill that requires at least 25 percent of proceeds from the
sale of excess properties be allocated for the construction of
soundwalls on SR 210 appears to be a violation of this statute.
This bill was referred to the committee under Senate Rule 29.10
in order for the committee to review the new subject matter of
this bill. On a concurrence hearing such as this, the committee
may only take one of two actions: 1) hold the bill; or 2) return
the bill to the Senate Floor for concurrence in Assembly
amendments. Although the bill meets the criteria for referral
to the Suspense File, the Committee does not have this option.