BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 2174| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 2174 Author: Assembly Accountability and Administrative Review Committee Amended: 8/5/14 in Senate Vote: 21 SENATE GOVERNMENTAL ORGANIZATION COMMITTEE : 8-0, 6/10/14 AYES: Correa, Cannella, De León, Galgiani, Hernandez, Padilla, Torres, Vidak NO VOTE RECORDED: Berryhill, Lieu, Vacancy SENATE APPOPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 73-0, 5/8/14 (Consent) - See last page for vote SUBJECT : State property: surplus SOURCE : Department of General Services DIGEST : This bill authorizes the Director of the Department of General Services (DGS) to dispose of surplus state property, as specified. ANALYSIS : Existing law: 1. Authorizes DGS, subject to legislative approval, to sell, lease, exchange, or transfer various specified properties for current market value, or upon such other terms and conditions CONTINUED AB 2174 Page 2 that DGS determines are in the best interests of the state. 2. Unless otherwise specified by law, requires the proceeds from the sale of surplus state property to be applied toward payment of principal and interest on the Economic Recovery Bond Act of 2004. This bill: 1. Authorizes the Director of DGS to dispose of the following properties: Parcel 1 - known as the Employment Development Department (EDD) parking lot, located at 850 Turk Street in San Francisco (approximately .434 acres/improvements). Parcel 2 - known as the EDD parking lot, located at 745 Franklin Street in San Francisco (consisting of three parcels; approximately 0.29 acres/improvements). Parcel 3 - known as DGS' Bercut Drive Building, located at 570 Bercut Drive in Sacramento (approximately 1.5 acres/improvements). Parcel 4 - known as the Department of Public Health (DPH) lab facility, located at 1449 West Temple Street in Los Angeles (approximately 1.1 acres/improvements). Parcel 5 - known as the Department of Corrections and Rehabilitation (CDCR) Fresno Female Offender Program Property, located at 2855 Whitesbridge Avenue in Fresno (approximately 2.03 acres/improvements). Parcel 6 - known as the California Highway Patrol (CHP) field office, located at 1888 Oceanside Boulevard in Oceanside (approximately 1.04 acres/improvements). Parcel 7 - known as the CHP field office, located at 4040 Pierce Road in Bakersfield (approximately 1.87 acres/improvements). CONTINUED AB 2174 Page 3 2. Specifies, with respect to Parcel 1, that the parcel has both federal and state equity and the proceeds received from the disposition of Parcel 1 will be subject to the reimbursement of federal and state equity financing, as required under applicable federal and state laws. Background This is the annual DGS-sponsored legislation for the disposal of surplus state real property. State law requires state agencies to identify real properties that are excess to their needs. Legislative authorization is needed to declare real properties as surplus and to authorize their disposal by DGS. All proceeds generated from the sale of surplus properties are deposited into the Deficit Recovery Bond Retirement Sinking Fund Subaccount to pay the principal and interest on bonds issued pursuant to the 2004 Economic Recovery Bond Act. Once the principal and interest on those bonds are fully paid, the proceeds from the sale of surplus state property are deposited into the Special Fund for Economic Uncertainties, or any successor fund. DGS' Real Estate Services Division (RESD) is responsible for the disposition of state surplus real property assets. RESD is also responsible for determining the present and future space needs of state agencies, administering the sales and leasing of state-owned surplus property, and leasing privately-owned space for state agencies. RESD also assists state landholding agencies in making real estate decisions regarding their properties. Parcels 1 and 2 - EDD Parcels - San Francisco . EDD notified DGS that these two parcels are surplus because there is no programmatic need or plans for expansion that merit holding on to the property. The two parcels are currently used for parking; however, ingress to and egress from both parcels do not comply with the Americans with Disabilities Act (ADA) and the topography is a barrier to any mitigation efforts. DGS states that disposition of these excess parcels is consistent with the Administration's initiative to reduce the state property footprint and supports the City of San Francisco's efforts to revitalize the area. Parcel 1 is encumbered by federal equity CONTINUED AB 2174 Page 4 financing, and this bill contains necessary references to the applicable means by which the proceeds will pay off federal obligations pursuant to law. Parcel 3 - DGS Bercut Drive Building - Sacramento . DGS states that, in 1977, the American Justice Institute conveyed by gift to the state the property at 570 Bercut Drive, Sacramento. The property consists of a single story, 16,597 square foot building situated on 1.5 acres off Richards Boulevard. DGS leased the property to the Los Rios Community College District (LRCC District) rent-free, stipulating only that the LRCC District maintain the property. The LRCC District subsequently sublet the property to the City of Sacramento Police Department (Sacramento PD) for training purposes. On July 31, 2008, Sacramento PD vacated the property and returned the keys to DGS. An inspection of the property found the building clean, but in a very dated condition. DGS noted evidence of serious roof leaks and non-compliance with the ADA throughout the structure's interior and exterior. A DGS infrastructure study, completed in 2009, expressed the need for either a total renovation of the building (approximately $5 million), or a demolition and rebuild process (approximately $6 million) to bring the structure up to current building code standards and ADA compliance. DGS determined that there is no foreseeable state programmatic use for the building, and the building remains vacant. Parcel 4 - DPH Lab Facility - 1449 W. Temple Street, Los Angeles . This new surplus property is a 30,500-square foot lab facility situated on 1.1 acres in Los Angeles. DPH should soon have their final decommissioning personnel moved to their new Lab located at 850 Marina Bay Parkway, Richmond. Parcel 5 - CDCR Fresno Female Offender Program Property . In 1998, CDCR acquired the site at 2855 Whitesbridge Road, in Fresno. CDCR used the property until June 2012 for its Female Offender Program. This facility was the last of three statewide locations closed due to declining enrollment. CDCR has subsequently determined that the facility is not suitable for housing other inmates due to the excessive costs to rehabilitate and secure the property. The property has several buildings; the first two were constructed in 1971 as a church, and in 1992, prior to state acquisition, two dormitories were added. The CONTINUED AB 2174 Page 5 site is approximately 2.0 acres and sits in a largely industrial and farming area on the westernmost outskirts of Fresno. Security at the site is an issue and as a result the buildings have been extensively vandalized. Until disposed of, the property will continue to present liability to the state, ongoing maintenance and security expenses for CDCR, and poses a significant nuisance to the community. Both CDCR and DGS report that there have been several offers by interested persons to purchase the property. Parcels 6 and 7 - CHP Field Offices . These CHP surplus properties are a result of a statewide upgrading of out-of-date and small existing field offices. These locations no longer meet modern building codes, are not in compliance with the Americans with Disabilities Act. They also lack women's locker rooms. All proceeds from the sale of these two properties will be deposited into the Motor Vehicle Account. FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No SUPPORT : (Verified 8/5/14) Department of General Services (source) Department of Finance ARGUMENTS IN SUPPORT : The Department of Finance writes that this bill "could generate additional surplus property revenue for the state by selling properties that are no longer needed to serve core state functions." ASSEMBLY FLOOR : 73-0, 5/8/14 AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Dababneh, Dahle, Daly, Dickinson, Donnelly, Fong, Fox, Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Grove, Hagman, Harkey, Roger Hernández, Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A. CONTINUED AB 2174 Page 6 Pérez NO VOTE RECORDED: Eggman, Gorell, Gray, Hall, Mansoor, V. Manuel Pérez, Vacancy MW:d 8/6/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED