BILL ANALYSIS �
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 339 HEARING: 5/8/13
AUTHOR: Cannella FISCAL: No
VERSION: 4/9/13 TAX LEVY: No
CONSULTANT: Lui
COUNTY PROPERTY SALES
Authorizes a county, by a 4/5-vote of the board of
supervisors, to sell, or enter into a lease, concession, or
managerial contract involving county property acquired from
the closure of an air force base.
Background and Existing Law
As part of the Base Realignment and Closure (BRAC) process
that followed the end of the Cold War, Castle Air Force
Base in Merced County closed in 1995. To help local
officials convert the former bomber base into productive
civilian uses, the Legislature created the Castle Joint
Powers Redevelopment Agency with special powers (AB 69,
Canella, 1993). In 1994, the Legislature named the Agency
as the official "single local reuse entity" to cooperate
with state and federal officials (AB 3775, Honeycutt,
1994). In 1996, the Legislature set up a generic statute
to expedite the redevelopment of military bases (AB 2736,
Weggeland, 1996). Because many of the assumptions
underlying the 1993 special statute didn't materialize,
local officials asked the Legislature to repeal the special
law (AB 774, Cardoza, 2000). Instead, Merced County formed
its own redevelopment project area to develop county
property on the former Castle Air Force base.
Until 2011, the Community Redevelopment Law allowed local
officials to set up redevelopment agencies (RDAs), prepare
and adopt redevelopment plans, and finance redevelopment
activities. The Law authorized RDAs to sell or lease
property without public bidding as long as the RDA provided
public notice and held a public hearing. Merced County
officials sold real property on the former Castle Air Force
Base by transferring the property to the county's RDA,
which then sold the property to selected developers without
any bidding or other competitive process.
SB 339 -- 4/9/13 -- Page 2
By contrast, state law generally requires a county to sell
or lease property using a competitive sealed-bid process.
A county board of supervisors must, by a two-thirds vote,
adopt a resolution in a regular open meeting declaring its
intention to sell or lease the property. The resolution
must describe the property and the terms upon which it will
be sold or leased. At least three weeks after adopting the
resolution, the board must hold a public meeting at which
sealed proposals to purchase or lease the property must be
considered. State law exempts a county from these
requirements, and allows it to sell real property at less
than fair market value, to provide housing that is
affordable to low and moderate income residents.
Citing a significant State General Fund deficit, Governor
Brown's 2011-12 budget proposed eliminating RDAs and
returning billions of dollars of property tax revenues to
schools, cities, and counties to fund core services. Among
the statutory changes that the Legislature adopted to
implement the 2011-12 budget, AB X1 26 (Blumenfield, 2011)
dissolved all RDAs.
Merced County officials worry that redevelopment agencies'
elimination will force the county to sell property on the
former Castle Air Force Base through a sealed-bid process
rather than through direct negotiation, complicating the
county's efforts to revitalize lands on the former base.
Proposed Law
Senate Bill 339 authorizes a county, by a 4/5-vote of the
board of supervisors, to sell, or enter into a lease,
concession, or managerial contract involving specified
county property that the county has acquired from the
federal government due to the closure of an air force base,
without complying with the state laws that govern the sale
of county-owned real property.
SB 339 prohibits a board from taking a vote to sell, or
enter into a lease, concession, or managerial contract
involving specified property unless the following
conditions are met, or unless the board makes a finding in
a noticed public hearing that the following conditions were
met at the time the property was acquired from the federal
SB 339 -- 4/9/13 -- Page 3
government:
The county solely governs the property's reuse, and
the property, or any portion of the property, is not
included within a redevelopment area.
The county has prepared and adopted a general or
specific plan according to state law and has adopted a
zoning ordinance for the area, and the proposed use is
consistent with the general or specific plan and the
zoning ordinance.
The airport land use commission has prepared and
adopted a comprehensive airport land use compatibility
plan (ALUCP) for the area, according to state law, and
the proposed use is consistent with the ALUCP.
The county has complied with state laws regarding
the disposal of surplus land and general plan
compliance.
The county has published notice for ten days in a
newspaper published at least weekly, and posted the
notice in the county clerk's office. The notice must
specify the date that the board determines that any of
the affected property is subject to the bill's
requirements, and must include all of the following:
o A description of the proposed property to
be sold, leased, or subject to a concession or
managerial contract.
o The proposed terms of the sale, lease,
concession, or managerial contract.
o The location where offers will be
accepted and executed.
o The county officer's telephone number and
address.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . Developing real property on a
decommissioned air force base poses substantial challenges.
Revitalizing former base property that may contain
outdated structures, inadequate infrastructure, and toxic
contamination requires a sophisticated developer with
sufficient resources to make substantial capital
SB 339 -- 4/9/13 -- Page 4
investments. In light of these challenges, Merced County
officials sold county-owned property on the former Castle
Air Force Base by transferring the property to the County's
former redevelopment agency, which was able to dispose of
the property through direct negotiation with a qualified
developer. Redevelopment agencies' dissolution leaves
Merced County without the ability to dispose of
county-owned real property on the former Castle Air Force
Base through direct negotiation with interested buyers.
The uncertainty associated with the sealed-bid process that
applies to county property sales deters potential investors
interested in developing lands on former military bases.
This uncertainty was realized in 2012, when Merced County
was working with a Texas-based investment group that was
looking to site a bioscience-stem cell facility. As a
result, the investors did not bid on the property.
Further, the sealed-bid process offers no assurance to a
county that a purchaser who submits a winning bid intends
to develop property on a former air force base, or has
sufficient resources to do so. By providing an alternative
process for counties to vote to sell or enter into a lease
on county property, instead of the current statutory
competitive bidding requirement, SB 339 offers counties
vital flexibility in their efforts to develop former air
force bases.
2. Casting nets . As counties attempt to revitalize former
military bases, new mechanisms are needed to foster and
attract development on former bases. Similar to former Air
Force bases, decommissioned Navy, Army, and Marine Corps
installations have outdated infrastructure and contaminated
property, which make economic development difficult. SB
339 provides an alternate process for a county to sell or
enter into a lease for county property acquired from the
federal government -- but the property must be a former air
force base. All military installations that closed under
the BRAC process may benefit from SB 339's proposed
process. The Committee may wish to consider amending the
bill to include county property that belonged to other
branches of the armed services.
3. Clarification . Merced County officials want to
replicate the direct negotiation process they used under
redevelopment law to sell real property on the former
Castle Air Force Base. Before a county can vote to sell,
or enter into a lease, concession, or managerial contract,
SB 339 -- 4/9/13 -- Page 5
five conditions must be met. One of the five conditions is
that the property is not included within a redevelopment
area. Given redevelopment's dissolution, it is unclear
whether the bill seeks to exclude property that was in a
former redevelopment area, or if the bill's provisions only
apply to property in a former redevelopment area. The
Committee may wish to consider amending SB 339 to clarify
the bill's intent.
4. Related legislation . SB 339 is not the only bill
seeking to address county sales of real property.
AB 121 (Dickinson, 2013) authorizes the Sacramento
County Board of Supervisors, by 4/5-vote, to sell, or
enter into a lease, concession, or managerial contract
involving a specified area of county property that the
county has acquired from the federal government due to
the closure of Mather Air Force Base or McClellan Air
Force Base, without otherwise complying with state
laws. The bill is awaiting referral in the Senate
Rules Committee.
SB 1546 (Cannella, 2012) would have authorized a
county that owns real property on a converted military
base to sell that real property, or any interest in
the property, in a manner approved by the board of
supervisors, without complying with the state laws
that govern the sale of county-owned real property.
The bill was not heard and died in the Senate
Governance and Finance Committee.
Support and Opposition (5/2/13)
Support : Merced County.
Opposition : Unknown.