BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 470| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 470 Author: Wright (D) Amended: 9/6/13 Vote: 21 SENATE GOVERNANCE & FINANCE COMMITTEE : 6-0, 4/3/13 AYES: Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez NO VOTE RECORDED: Liu SENATE ENVIRONMENTAL QUALITY COMMITTEE : 9-0, 5/1/13 AYES: Hill, Gaines, Calderon, Corbett, Fuller, Hancock, Jackson, Leno, Pavley SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SENATE FLOOR : 36-0, 5/24/13 AYES: Anderson, Beall, Block, Calderon, Cannella, Corbett, Correa, De León, DeSaulnier, Emmerson, Fuller, Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Knight, Lara, Leno, Lieu, Monning, Nielsen, Padilla, Pavley, Price, Roth, Steinberg, Torres, Walters, Wolk, Wright, Wyland, Yee NO VOTE RECORDED: Berryhill, Evans, Liu, Vacancy ASSEMBLY FLOOR : Not available SUBJECT : Community development: economic opportunity SOURCE : City of Long Beach CONTINUED SB 470 Page 2 DIGEST : This bill creates a process for a city, county, or city and county to sell or lease properties, that are returned to them as part of the long-range property management plan of a former redevelopment agency (RDA), for an economic development purpose. Assembly Amendments delete the requirement for local governments to make the report required by this bill available to the public no late than the time of publication of the first notice of the hearing required by this bill; delete the proposed changes to the Polanco Redevelopment Act (Polanco Act); make technical and clarifying changes; and add a co-author. ANALYSIS : Existing law: 1. Dissolved RDAs and community development agencies (CDAs), as of February 1, 2012, and provides for the designation of a successor agency, as defined, to resolve the final matters of the agencies and to dispose of assets and properties in accordance with certain procedures. 2. Under the Polanco Act which was part of the Community Redevelopment Act, assisted redevelopment agencies in responding to brownfield properties in their redevelopment areas. It prescribed processes for redevelopment agencies to follow when remediating a hazardous substance release in a redevelopment project area. It also provided specified immunity from liability for sites cleaned up under a cleanup plan approved by the Department of Toxic Substances Control or a Regional Water Quality Control Board. It provided limited liability protections for RDAs and future purchasers of properties remediated under the Polanco Act. This bill: 1. Includes legislative intent language. 2. Defines "economic opportunity" to mean any of the following: A. Development agreements that create, retain or expend new jobs that the legislative body finds will create or retain at least one full-time permanent job for every CONTINUED SB 470 Page 3 $35,000 of city, county, or city and county investment in a project. B. Development agreements that will increase the property tax revenues to all taxing entities by at least 15% when the project is at full implementation as compared to the rate one year prior to the acquisition by a governmental entity. C. The creation of affordable housing if there are demonstrated affordable housing needs as defined in the approved housing element or regional housing needs assessment. D. Projects that meet the goals of SB 375 (Steinberg, Chapter 728, Statutes of 2008), is included in a sustainable communities strategy, an alternative planning strategy or implements the goals of those adopted plans. E. Transit priority projects. 3. Creates a process for a city, county, or city and county to sell or lease properties, which are returned to them as part of the long-range property management plan of a former RDA, for an economic development purpose. 4. Requires a legislative body to approve the sale or lease of a property that is part of the long-range property management plan for an economic purpose by resolution after a public hearing that has been noticed for two consecutive weeks in the newspaper. 5. Requires the city, county or city and county to provide a report for the public to review and copy that includes the following: A. A copy of the proposed sale or lease. B. The cost of the agreement to the city, county, or city and county that includes land acquisition costs, clearance costs, relocation costs, cost of improvements provided by the local government's interest on any loans or bonds to finance the agreements. CONTINUED SB 470 Page 4 C. The estimated value of the property to be sold or leased as determined by the highest and best uses permitted under the general plan or zoning. D. The estimated value of the property to be sold or leased with the conditions, covenants, and development costs required by the sale or lease. E. The purchase price or lease payments that the lessor will be required to make during the term of the lease. F. If the sale price or rental amount is less than fair market value as determined by the highest and best use, then the legislative body must provide an explanation for the difference. G. An explanation of why the sale or lease of the property will result in the creation of economic opportunity. 6. Requires the resolution approving the sale or lease of the property to be approved by a majority vote, or a two-thirds vote if required by an adopted ordinance, a finding that the sale or lease of the property will assist in the creation of economic opportunity, and include one of the following: A. The consideration is not less that the fair market reuse value at its highest and best use. B. The consideration is not less than the fair reuse value at the use and with the covenants and conditions and development costs authorized by the sale or lease. 7. Provides that the provisions of this bill are an alternative to any other authority granted to cities to dispose of city-owned property. 8. Allows, under Community Redevelopment Law (CRL) for a RDA, a city, county, or city and county to establish a program to make loans to owners or tenants to rehabilitate commercial buildings or structures. 9. Permits, as allowed under the CRL for a RDA, a city, county, CONTINUED SB 470 Page 5 or city and county to assist with the financing facilities or capital equipment as part of an agreement with a developer or rehabilitate a property that will be used for industrial or manufacturing purposes. 10.Requires, as allowed under the CRL for a RDA, a city, county, or city and county to make a finding, after a public hearing, that assisting with the purchase of capital equipment or facilities is necessary for the economic feasibility of the development and cannot be achieved through the private market. 11.States the provisions of this bill are not intended to authorize the use of eminent domain for economic development purposes. Comments According to the author's office, the ability to sell land based upon "fair reuse value", rather than "fair market value" enables local governments to negotiate for the use that best fits the community. The city can engage in a process to identify the community need, and then sell land to a private party who will create a development that fits those needs. Redevelopment agencies functioned for very many years using this process. It was a tool that was key to their success. This authority should be reinstated for the benefit of local communities, with the local government absorbing any costs that may be incurred. This power will only be used for land owned by cities, and no tax increment will be utilized, so there will be no fiscal impact on the State, school districts, or other taxing entities. Related legislation AB 440 (Gatto) allows local agencies to clean up hazardous substance releases and receive liability immunity under provision that are similar to those in the Polanco Redevelopment Act. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 9/11/13) CONTINUED SB 470 Page 6 City of Long Beach (source) California Contract Cities Association City and County of San Francisco City of Grass Valley City of Long Beach Mayor Bob Foster City of Torrence City of Whittier Gateway Cities Council of Governments League of California Cities Los Angeles County Los Angeles Mayor Antonio Villaraigosa Port of Long Beach San Francisco Mayor Ed Lee San Jose Mayor Chuck Reed Santa Ana Mayor Miguel Pulido Western Center on Law and Poverty AGB:JA:d 9/11/13 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED