BILL ANALYSIS Ó
Bill No: SB
695
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2013-2014 Regular Session
Staff Analysis
SB 695 Author: Wright
As Amended: April 1, 2013
Hearing Date: April 9, 2013
Consultant: Paul Donahue
SUBJECT
California Science Center; Parking facilities and
legislative authorization of leases
DESCRIPTION
This bill prohibits the California Science Center (CSC)
from delegating to the University of Southern California
(USC) the power to manage and operate the CSC's parking
facilities, and specifies that these provisions are
declaratory of existing law.
The bill also prohibits the CSC from entering into a sale
of, or a lease for a term of more than 10 years for the use
of its parking facilities, the Los Angeles Coliseum, or the
Los Angeles Sports Arena, unless the Legislature authorizes
the proposed sale or lease by statute.
EXISTING LAW
The Sixth District Agricultural Association (a.k.a. the
CSC) is in the Natural Resources Agency and is a tax-exempt
organization and instrumentality of the State.<1> The CSC
operates Exposition Park, a 160-acre tract south of
Downtown Los Angeles that is owned by the State. The CSC
has leased portions of the park to the Los Angeles Memorial
Coliseum Commission (Commission). The Commission is a joint
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<1> Food and Ag. Code § 4101
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powers authority created in 1955 pursuant to the Joint
Exercise of Powers Act.<2> The member entities of the
Commission are the City of Los Angeles, the County of Los
Angeles, and the CSC.<3> The JPA authorizes the Commission
to operate and manage facilities within Exposition Park,
including the LA Memorial Coliseum (Coliseum).
Existing law requires the CSC to manage or operate its
parking facilities in a manner that preserves and protects
the interests of itself and the California African American
Museum, and recognizes the cultural and educational
character of Exposition Park.
Existing law specifies that all revenues received by the
CSC from its parking facilities shall be deposited in the
Exposition Park Improvement Fund, and that the funds may
only be used, upon appropriation by the Legislature, for
improvements to Exposition Park.
BACKGROUND
1) Purpose of bill : According to the author, the CSC
has no statutory authority to delegate control of
state parking lots to USC. The author states that
Legislative Counsel has opined that the prohibitions
against delegation of power to USC to operate CSC
parking lots are declaratory of existing law, because
State agencies are required to exercise power in
accordance with the manner prescribed by statute.<4>
If that statute requires the exercise of discretion,
as is the case regarding CSC management of parking
lots and revenues, the power is in the nature of a
public trust and may not be delegated by the agency
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<2> Govt. Code § 6500 et seq.
<3> See Govt. Code § 8300
<4> Lockyer v. City and County of San Francisco (2004) 33
Cal.4th 1055 [scope of authority limited by governing
statute]
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without statutory authorization. <5>
The author also notes that existing law expressly
requires the CSC to deposit all revenues received from
parking facilities into the Exposition Park
Improvement Fund, and that these monies may only be
used, upon appropriation by the Legislature, for
improvements to Exposition Park.<6> The author states
that this clearly demonstrates that CSC is required by
law to exercise discretion on how to accomplish the
statutory mandates. Thus, this public trust obligation
cannot be delegated to USC.
2) Brief history : In 2008, the Commission and USC
entered into a lease that authorized USC to use the
Coliseum during football season. Under the lease, the
Commission is the landlord, and in that capacity, the
Commission agreed to carry out necessary repairs and
specific capital improvements according to a specific
schedule.<7> Meanwhile, the Commission became mired
in a financial scandal, which among other things led
to criminal charges against 8 people, including 5 of
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<5> Bagley v. City of Manhattan Beach (1976) 18 Cal.3d 22
[city council may not delegate duty to fix employee
compensation to arbitrator]; Stevens v. Geduldig (1986) 42
Cal.3d 24 [power to expend public funds involves
discretion]
<6> Food & Ag. Code § 4106. Authorized uses of the parking
revenues include, maintenance of existing parking and
museum facilities, replacement of museum equipment,
supplies and wages expended to generate revenues from
rental of museum facilities, development of new parking
facilities, and acquisition of land within or adjacent to
Exposition Park.
<7> For example, the Commission agreed to repair and
maintain the stadium turf, and pledged to perform
substantial capital improvements to the Coliseum pursuant
to a Capital Plan, covering replacement of the domestic
water system, the video board, and the like.
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its former managers and employees.<8> The financially
troubled Commission has also breached its lease
contract with the state by failing to pay $500,000 in
rent that was due at the end of the 2012 calendar
year.
3) Non-Disturbance Agreement - CSC assumes Commission
obligations : In response to concerns that the
Commission could not complete necessary repairs and
capital improvements to the Coliseum, the CSC and USC
entered into a "Non-Disturbance Agreement" in 2012, in
which the CSC agreed that, if the Commission's
interest is "terminated by [the California Science]
Center or by operation of law prior to the termination
of the lease," the CSC would assume the rights and
responsibilities of the Commission under its lease
with USC, including the responsibility to perform the
capital improvements.<9>
4) USC would assume Commission obligations and acquire
control of parking : In December 2012, the CSC and USC
negotiated a tentative, revised Non-Disturbance
Agreement. A significant difference is that USC would
assume the obligation to perform capital improvements
to the Coliseum - not the Science Center, as is the
case in the existing Non-Disturbance Agreement.
Notably, the tentative agreement also contemplates an
agreement between USC and the CSC, under which USC
would manage specified parking lots owned by the state
(CSC). Furthermore, USC would have rights to a portion
of the revenue earned from the parking lots, which are
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<8> A few examples: The Commission's janitorial contractor
received $4.8 million in payments without a contract. The
Commission's former financial director invested up to $10.3
million of public money "without a clear investment policy
or oversight," according to an audit by the City of Los
Angeles. He circumvented the Commission's own bylaws by
investing the funds through commercial accounts instead of
the city treasury. The Commission paid $75,000 in bonuses
outside payroll channels and did not withhold taxes,
resulting in an IRS payroll tax lien.
<9> The cost of repairs and capital improvements has been
estimated by state officials and USC to be approximately
$70 million.
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located on state property.<10> As noted above, the
author introduced this bill partially in response to
release of this tentative draft agreement.
5) Current and contemplated leases : On May 14, 2008,
the Commission and USC entered into a 25-year lease of
the Coliseum, under which USC has five successive
5-year options to extend the lease, until December 31,
2054.<11>
On May 14, 2012, the Commission voted 8-1 to approve a
controversial deal to surrender day-to-day control of
the Coliseum to USC. The proposed new lease would give
USC the right to control the Coliseum until 2054, when
the Commission is set to dissolve and the assets are
to be transferred to the state.
This proposed agreement released in December, 2012
between the State and USC would also give USC control
of taxpayer-owned parking lots that serve the Los
Angeles Memorial Coliseum and several public museums
at Exposition Park. This proposal is part of a lease
package that allows USC to take over operations of the
Coliseum and the companion Sports Arena for as long as
99 years, through 2111.<12>
The author believes that these proposals should be
subject to legislative oversight prior to execution,
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<10> See, Term Sheet, California Science Center Master
Parking Lease, at
http://www.scsa.ca.gov/ExpoPark/pkglots_1_6_term_sheet.pdf
<11> The Non-Disturbance Agreement provides that, in the
event that the Commission is terminated, the lease will
continue in full force and effect.
<12> The proposed lease agreement would also grant USC the
option of razing the Sports Arena and developing the site
as a professional soccer stadium.
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particularly in light of the Commission's recent
scandal, its breach of its obligations under the
current Coliseum lease, and most importantly, the
possibility that the state could end up on the short
end of potential revenues generated by the parking
facilities located on State property-revenues that are
critical to the future of Exposition Park.
6) USC opposition : The University of Southern
California favors the provisions in the 2012 proposed
lease agreement that would allow USC to operate and
manage the parking lots at Exposition Park. USC
contends that this authorization would provide
guaranteed income to Exposition Park in amounts that
match the highest amount of revenue ever generated
from the parking lots.
The university acknowledges the concerns that have
been raised by the CSC and others regarding USC's push
for authorization to manage and control the parking
lots, but it suggests that subsequent negotiations
between the parties should be allowed to continue
without the threat of legislation.
PRIOR/RELATED LEGISLATION
AB 1019 (Buchanan) Chapter 137, Statutes of 2012. Enacted
provisions of law proposed by GRP 2 to transfer
jurisdiction over the California Science Center, including
the California African American Museum, the Exposition
Park, and the Exposition Park Manager, to the Natural
Resources Agency, except that it did not make changes
proposed by GRP 2 to revise the organizational
relationships between the transferred entities.
SB 29 (Denham) 2009-2010 Session. Would have required the
sale of the land underlying the LA Memorial Coliseum and
the LA Memorial Sports Arena, including the State's share
of the Sports Arena structure, and would have abolished the
LA Memorial Coliseum Commission upon completion of that
sale. (Held in Senate Governmental Organization Committee)
SB 1133 (Denham) 2007-08 Session. Would have mandated the
sale of the parcel of land that the Coliseum and the Sports
Arena occupy, including the State's share of the Sports
Arena structure, and abolishes the LA Memorial Coliseum
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Commission upon completion of that sale. (Failed passage on
Senate floor)
SB 1060 (Ridley-Thomas) 2007-08 Session. Would have
abolished the LA Memorial Coliseum Commission and
reorganized the administrative and management structure for
Exposition Park in Los Angeles by creating an Exposition
Park Authority consisting of 9-board members responsible
for managing and operating all state-owned properties
located in Exposition Park. Also, mandates that the board
sell the parcel that the Los Angeles Memorial Sports Arena
occupies. (Failed passage in Assembly)
AB 340 (Wright) Chapter 479, Statutes of 2001. Required the
California Science Center to establish the position of
Exposition Park Manager, a gubernatorial appointment. The
bill shifted the authority to appoint security and safety
personnel from the California Science Center Executive
Director to the Park Manager.
AB 260 (Wright) 1999-2000 Session. Would have established
an Exposition Park Authority, consisting of five members,
to manage Exposition Park and allow the authority, with the
approval of the State and Consumer Services Agency, to
build, maintain, and operate a stadium, arena, pavilion or
other sports facility. (Failed passage in Assembly)
SUPPORT:
None on file
OPPOSE:
University of Southern California
DUAL REFERRAL: Senate Natural Resources and Water
Committee
FISCAL COMMITTEE: Senate Appropriations Committee
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