BILL ANALYSIS                                                                                                                                                                                                    Ó


          |SENATE RULES COMMITTEE            |                        SB 470|
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                                 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

          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,  
          NO VOTE RECORDED:  Berryhill, Evans, Liu, Vacancy

          ASSEMBLY FLOOR  :  Not available

           SUBJECT  :    Community development:  economic opportunity

           SOURCE  :     City of Long Beach



                                                                     SB 470

           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  

           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  



                                                                     SB 470

                $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  

             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  

             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.



                                                                     SB 470

             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  

          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,  



                                                                     SB 470

             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  

          11.States the provisions of this bill are not intended to  
             authorize the use of eminent domain for economic development  

          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  

          FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

           SUPPORT  :   (Verified  9/11/13)



                                                                     SB 470

          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

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