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