BILL ANALYSIS Ó
SB 695
Page 1
Date of Hearing: August 13, 2013
ASSEMBLY COMMITTEE ON ARTS, ENTERTAINMENT, SPORTS, TOURISM, AND
INTERNET MEDIA
Ian C. Calderon, Chair
SB 695 (Wright) - As Amended: June 27, 2013
SENATE VOTE : 34-0
SUBJECT : California Science Center: parking facilities
SUMMARY : This bill would prohibit the California Science
Center (CSC) from delegating the power to manage and operate
CSC's parking facilities to any other party, and prohibits CSC
or the director of Department of General Services (DGS) from
approving a sale or lease of more than 10 years of CSC's parking
facilities without legislative approval, as specified.
Specifically, this bill :
1)Prohibits CSC from delegating operation of CSC's parking
facilities to any other party.
2)Requires CSC to set the minimum and maximum parking fees that
may be charged at Exposition Park.
3)Prohibits CSC or the director of DGS from approving a sale or
lease of more than 10 years of CSC's parking facilities,
Memorial Coliseum (Coliseum), or Memorial Sports Arena
(Arena), without legislative approval, as specified.
4)Allows leases of more than 10 years without legislative
approval, if the terms of the lease require the lessee to
preform substantial capital improvements, as specified.
5)Makes technical changes.
6)Adds an urgency clause.
EXISTING LAW :
1)Establishes the Sixth District Agricultural Association known
as the CSC within the California Natural Resources Agency
(Agency) as a tax-exempt organization and instrumentality of
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the State. (Food and Agriculture Code Section 4101.)
2)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 (CAAM), and
recognizes the cultural and educational character of
Exposition Park. [Food and Agriculture Code Section 4106(b).]
3)Specifies that all revenues received by the CSC from its
parking facilities shall be deposited in the Exposition Park
Improvement Fund (Fund), and that the funds may only be used,
upon appropriation by the Legislature, for improvements to
Exposition Park. [Food and Agriculture Code Section 4106(c).]
FISCAL EFFECT : Unknown.
COMMENTS :
1)Author's Stated Need for Legislation - Protect State
Resources :
According to the author, CSC has no statutory authority to
delegate control of state parking lots to the University of
Southern California (USC). The author's office 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 set
by statute. 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 without statutory
authorization.
In addition, there are leadership and governance issues with
the current CSC. Recently, the Los Angeles Memorial Coliseum
Commission (Commission) became embroiled in scandal. Several
financial irregularities were alleged and publicized and
criminal charges were filed against eight individuals, five of
whom were former managers and employees. Another matter of
concern is that the Commission has not paid its rent that was
due at the end of 2012, according to the author.
The author's office also notes that while, "CSC's governing
board voted 7-0 to approve basic terms for a lease agreement
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that extends to USC most benefits of owning the Coliseum,
including preferential provisions relating to USC's use of the
parking lot revenues on specified dates throughout the year.
Nevertheless, I continue to believe that this bill is
necessary to protect the parking revenues generated by all
venues at Exposition Park."
2)Background :
The CSC, the City of Los Angeles, and the County of Los
Angeles have formed a Joint Powers Authority, the Commission.
The CSC has leased the Coliseum and Arena to the Commission.
USC operates the Coliseum and Arena pursuant to a sublease
from the Commission that was entered in 2008. USC uses the
Coliseum and has access to some parking for various events
(primarily football games) in exchange for various payments
pursuant to the sublease. According to the USC lease, for
every sports event it pays to the Commission rent in the form
of eight percent of ticket sales, eight percent of
broadcasting revenues, and a specified portion of the costs of
conducting each event. USC has the option to extend the lease
in five year increments to 2054.
a) California Science Center & Exposition Park and
Governance Structure :
i) The Coliseum and the Arena are under the authority
of the Commission, which was formed as a Joint Powers
Authority between the City and County of Los Angeles and
the state in 1945.
The Commission consists of:
(1) Three members nominated by the Chairman of the
Board of Supervisors;
(2) One member appointed by the Los Angeles City
Council President;
(3) Two members appointed by the City of Los
Angeles, Board of Recreation and Parks Commission;
(4) Three members elected by the CSC Board of
Directors; and,
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(5) Two ex-officio members, one appointed by the
Senate Committee on Rules and one appointed by the
Speaker of the Assembly.
i) Exposition Park is a public educational, cultural
and recreational center that contains several museums,
parks and sports facilities with differing forms of
governance, as follows:
(1) The Coliseum and Arena, which hosted the 1936
and 1984 Olympic Games, is governed by the Commission,
a Joint Powers Authority consisting of three city
members, three county members, and three members of
the Science Center/District Agricultural Association
Board. The Commission leases the Coliseum from the
state and is responsible for management and operation
of the facility. Currently, USC holds its football
games in the Coliseum and basketball games in the
Arena.
(2) The CSC is governed by its own Board of
Directors, who is appointed by the Governor. CSC's
historical role is that of the Sixth Agricultural
Association, although oversight is now provided by the
Agency. CSC is a state museum that offers
science-related education and recreational activities.
CSC has the responsibility to look after
state-owned-or-held land leases in Exposition Park.
(3) CAAM is also under the jurisdiction of the
Agency. CAAM has seven board members: four
gubernatorial appointees (two of which must live in
the agricultural district), and one each, by the
Senate, the Assembly and the CSC appointee.
(4) The Los Angeles County Museum of Natural
History, which is governed by the Los Angeles County
Board of Supervisors.
(5) The Recreation, Swim Stadium and Rose Garden
complexes, operated by the Los Angeles City Department
of Recreation and Parks.
(6) The Science Museum School, which is operated
by the Los Angeles Unified School District.
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b) Memorial Coliseum - Historic Landmark and Popular Venue :
The Coliseum was commissioned in 1921 as a memorial to
veterans of World War I (rededicated to veterans of all
wars in 1968). The official ground-breaking ceremony took
place on December 21, 1921, with work being completed less
than two years later, on May 1, 1923. In 1930, it was
expanded to over 100,000 seats for the 1932 Olympic Games.
The Coliseum also hosted the 1984 Olympic Games. In 1984,
the State and U.S. government declared the Coliseum a
"historical landmark."
Since 1923, the Coliseum has served as the home field of
the USC football team. The University of California Los
Angeles (UCLA) also played its home football games in the
Coliseum from 1933-81. Over the years, the Coliseum has
hosted numerous events, including concerts, political
rallies, religious gatherings, high school football games,
international soccer games, etc. The complex (Coliseum and
Arena) has also provided a home for various professional
football, basketball, hockey, and baseball teams [e.g.,
Rams and Raiders (NFL), Los Angeles Chargers (AFL), Dodgers
(NL), Kings (NHL), Lakers (NBA)]. More recently (March
29th, 2008), professional baseball returned to the
Coliseum, with the Dodgers' 50th anniversary celebration
(1958-61) of their move from Brooklyn. Over 115,000 fans
(a record crowd for baseball) witnessed the exhibition game
between the Boston Red Sox and the L.A. Dodgers.
3)Parking and Tenant Conflict Issues at CSC are a Longstanding
Source of Angst :
Concerns and friction over parking matters at the CSC
have been roiling for years. As far back as 1998, when
the Joint Legislative Audit Committee requested the
Bureau of State Audits investigate management of CAC,
parking was seen as a major issue. An April of 1999
report found that the center had failed to operate in a
fiscally responsible manner and that the state
inadequately protected its interests in Exposition Park.
CSC disputed some allegations, but promised corrective
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action.
The state also contracted with UCLA to conduct a study of
the governance and management of Exposition Park. The
study found, in part, that "automobile parking was found
to be the most serious problem and source of tension
between Park tenants?." [Senate Floor Analysis of AB 260
(Wright), of the 1999-2000 Legislative Session.]
4) Operation and Improvement Lease Agreements with USC :
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 make needed repairs and
specific capital improvements.
In response to concerns that the Commission could not complete
necessary repairs and capital improvements to the Coliseum,
CSC and USC entered into a "Non-Disturbance Agreement" in
2012, in which CSC agreed that, if the Commission's interest
is "terminated by CSC or by operation of law prior to the
termination of the lease," CSC would assume the rights and
responsibilities of the Commission under its lease with USC,
including the responsibility to perform the capital
improvements.
In December 2012, CSC and USC negotiated a tentative, revised
Non-Disturbance Agreement. A significant difference is that
USC, not CSC, would assume the obligation to perform capital
improvements to the Coliseum. The tentative agreement also
contemplates an agreement under which USC would manage
specified CSC parking lots. Under this tentative agreement,
USC would have rights to a portion of the revenue earned from
the parking lots, which are located on state property.
According to the author's office, CSC has no statutory
authority to delegate control of state parking lots to USC.
The author's office 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 set by statute. If that statute
requires the exercise of discretion, as is the case regarding
CSC management of parking lots and revenues, the power is in
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the nature of a public trust and may not be delegated by the
agency without statutory authorization.
The author's office also notes that existing law expressly
requires CSC to deposit all revenues received from parking
facilities into the Fund, and that these monies may only be
used, upon appropriation by the Legislature, for improvements
to Exposition Park. The author's office states that this
clearly demonstrates 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.
As part of the proposed lease agreement from May 2013, USC
will invest a minimum of $70 million in the Coliseum to
complete repairs and improvements. In return, USC will
receive the right to purchase special event parking in
Exposition Park on days when events are being held in the
Coliseum or Arena. USC acknowledges the concerns raised by
CSC and others regarding the lease and has stated that the
current process negotiations between the parties should be
allowed to continue to work out these concerns. For instance,
USC has agreed to set aside 600 parking slots in the CSC
parking structure, and an additional 325 spaces in Lot 3 on
game days to ensure adequate parking is available for the use
of visitors to Exposition Park.
On June 25, 2013, the governing board of CSC voted 7-0 to
adopt the basic terms for the lease agreement that extends to
USC most of the benefits of owning the Coliseum. The lease
goes into effective after the state DGS and the Agency
approves a final lease and the CSC board ratifies it. The
package could require the state to reimburse two public
museums, CSC and the CAAM, for money they might lose because
the lease will permit limited use of the parking lots at a
lower price for nine to 10 days a year. Governor Brown's
administration sent a letter to the museums promising to
restore lost parking funds during the coming two years.
5) Ongoing Opposition from USC - Allow the Fairly Negotiated
Lease to be Implemented :
USC writes the Committee to urge that the current lease be
allowed to be implemented, and any concerns regarding the
lease terms be addressed through the contract process rather
than by statutory mandate. Specifically, while expressing
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their continued commitment to work with their neighbors, the
Legislature and CSC, they remain concerned that this measure
provides a bad precedent for future lease agreements, stating,
"We continue to believe the legislation establishes an
unnecessary precedent with respect to the design and
administration of future state lease agreements." Of
particular concern is Section 2 of the bill, which covers
leaseholds of the Coliseum and Arena, along with the parking
facilities.
USC believes that a reasonable deal has been reached that will
benefit all parties involved, which does not in any way hurt
the museums in Exposition Park as was earlier asserted.
Instead, they claim it helps solve major financial problems
that are looming over CSC, pointing out, "if the Commission
breaches its existing sublease with USC, the State will be
required to 'step into the responsibility of the Commission's
shoes' and take over the Commission's responsibilities,
including the responsibility to fund $70 million of the
Coliseum improvements as well as perform any other Coliseum
obligations under the existing sublease. Without the
agreement, it is likely the State would not receive the
Commission's rent payments for the Coliseum and Arena.
However under the new sublease terms, these rent payments
would be deposited into the Fund which is used for park-wide
needs such as landscaping and security, and is currently being
used as financial support for the CAAM and CSC."
6) Prior and Related Legislation :
a) AB 1019 (Buchanan) Chapter 137, Statutes of 2012,
transferred jurisdiction over the CSC, including the CAAM,
the Exposition Park, and the Exposition Park Manager, to
the Agency.
b) SB 1060 (Ridley-Thomas), of the 2007-08 Legislative
Session, would have abolished the Commission and
reorganized the administrative and management structure for
Exposition Park in Los Angeles by creating an Exposition
Park Authority consisting of eleven board members
responsible for managing and operating all state-owned
properties located in Exposition Park. Also, would have
mandated that the board sell the parcel that the Arena
occupies. SB 1060 was held in this committee.
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c) SB 1133 (Denham), of the 2007-08 Legislative Session,
would have mandated the sale of the parcel of land that the
Coliseum and the Arena occupy, including the state's share
of the Arena structure, and abolish the Commission upon
completion of that sale. SB 1133 failed passage on the
Senate Floor.
d) AB 1849 (De Vore), of the 2007-08 Legislative Session,
was similar to SB 1133.
AB 1849 failed passage in the Assembly Business and
Professions Committee.
e) AB 260 (Wright), of the 1999-2000 Legislative Session,
would have established an Exposition Park Authority
(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. AB 260 died on Assembly Floor pending
concurrence of Senate amendments.
f) AB 3220 (Archie-Hudson), Chapter 841, Statutes of 1996,
among other things, renamed the California Museum of
Science and Industry as the CSC and specified that it is
deemed to be a tax-exempt organization as an
instrumentality of the state.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
University of Southern California
Analysis Prepared by : Dana Mitchell / A.,E.,S.,T. & I.M. /
(916) 319-3450