BILL ANALYSIS Ó SB 944 Page 1 Date of Hearing: June 25, 2014 ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT K.H. "Katcho" Achadjian, Chair SB 944 (Torres) - As Amended: June 18, 2014 SENATE VOTE : 35-0 SUBJECT : Surplus state property. SUMMARY : Prohibits one specified parcel of state real property, the Lanterman Developmental Center, which has been declared surplus, from being prezoned, zoned, or rezoned by any local government unless the Department of General Services requests or approves the zoning change, and makes several other changes to state surplus property law. Specifically, this bill : 1)Prohibits any local government from prezoning, zoning, or rezoning the state real property known as Lanterman Developmental Center, located at 3530 Pomona Boulevard, Pomona, Los Angeles County, which has been declared surplus pursuant to existing law, unless the Department of General Services (DGS) requests that the property be rezoned or approves the rezoning of the property. 2)Requires a local agency or affordable housing developer, when being considered a potential priority buyer for surplus property, to demonstrate to DGS that the property is to be used for, among other purposes, development of projects that create sustainable jobs of benefit to the area and region where the property is located. 3)Specifies, if more than one local agency expresses interest in the surplus property, that priority must be given to the agency that intends to use it for affordable housing or development of projects that create sustainable jobs of benefit to the area and region where the property is located. 4)Adds, to existing legislative intent that declares the provision of decent housing for all Californians is a state goal of the highest priority when the state disposes of surplus property, the creation of sustainable jobs as a state goal. 5)Adds "development of projects that create sustainable SB 944 Page 2 employment opportunities of benefit to the area and region where the property is located" to the existing declaration of legislative intent that DGS should give priority to housing for persons and families of low- or moderate- income when disposing of surplus state real property. EXISTING LAW : 1)Authorizes DGS to dispose of state real property declared surplus by the Legislature by sale, lease, exchange, or any other manner, and upon terms deemed to be in the state's best interests. 2)Requires surplus property that is not needed by any state agency to first be offered to local agencies, and then to nonprofit affordable housing sponsors, before being offered for sale to private entities or individuals. 3)Expresses legislative intent declaring that the provision of decent housing for all Californians is a state goal of the highest priority, and that priority be given to the disposal of surplus property to housing for persons and families of low- or moderate-income. 4)Allows, pursuant to the California Constitution, a county or city to make and enforce all local, police, sanitary and other regulations not in conflict with state law (known as police powers). 5)Allows, pursuant to the California Constitution, charter cities to make and enforce all ordinances and regulations in respect to municipal affairs. FISCAL EFFECT : According to the Senate Appropriations Committee, pursuant to Rule 28.8, negligible costs. COMMENTS : 1)Purpose of this bill . This bill prohibits any local government from prezoning, zoning, or rezoning the state real property known as Lanterman Developmental Center, located at 3530 Pomona Boulevard, Pomona, Los Angeles County, which has been declared surplus pursuant to existing law, unless DGS requests that the property be rezoned or approves the rezoning of the property. This bill also adds "creation of sustainable SB 944 Page 3 jobs" to existing legislative declarations that the provision of decent housing for all Californians is a state goal of the highest priority when the state disposes of surplus state real property, and adds "development of projects that create sustainable employment opportunities of benefit to the area and region where the property is located" to the existing declaration of legislative intent that DGS should give priority to housing for persons and families of low- or moderate-income when disposing of surplus state real property. This bill is author-sponsored. 2)Author's statement . According to the author, "There are three examples of local agencies initiating action to re-zone or actually accomplishing re-zoning of excess real estate to reduce or attempt to reduce the value. They are: the County of Napa's rezoning of the Department of Mental Health's Napa State Hospital, the City of Los Angeles' rezoning of the Los Angeles Civic Center, and the City of Whittier's proposed rezoning of the Fred C. Nelles Youth Correctional Facility. "In light of these examples, the issues has become of particular importance to the constituents of the 32nd Senate District. This is because on January 29, 2010, the California Department of Developmental Services announced its intent to close the 302-acre Lanterman Developmental Center in Pomona, California. Upon closure, the property will be surplused. If the property is re-zoned it will likely result in a decrease in market value, and potentially be re-zoned in a manner that is inconsistent with the long term interests of the surrounding area and region. In particular, the need to ensure sustainable job creation in an area of the state that has an unemployment rate of 9.5%. "Moreover, as a result of Proposition 60A, revenues from the sale of surplus state real property are to be used to pay the principal and interest on bonds issued pursuant to the Economic Recovery Bond (ERB) Act as established by Proposition 57. Year-to-date, approximately $108.7 million in proceeds from the sale of surplus property has been applied to the repayment of ERB thereby alleviating pressure off the general fund which is also utilized to pay off the bonds. "By authorizing DGS to approve the re-zoning of state surplus property, SB 944 would ensure that the state receives the highest value for its real property assets. This in turn SB 944 Page 4 would accelerate the repayment of ERB - allowing for the allocation of general funds to other state priorities." 3)Policy considerations . The Committee may wish to consider the following: a) Land use authority of cities and counties . The California Constitution, in Article XI, Section 7, allows a city or county to make and enforce all local, police, sanitary, and other regulations not in conflict with state law, commonly known as "police powers." This police power is broad in scope, so long as the exercise of the police power has a rational relationship to a legitimate governmental purpose such as the protection of the public's health, safety, or general welfare. This police power is exercised through land use regulations, such as zoning ordinances, local agency plans, and other types of ordinances. The Committee may wish to consider whether DGS, rather than the local city or county, is the best entity to determine the future use of this parcel of surplus state property and how that land's future development will fit with the surrounding community's needs. b) Precedent . While this bill is narrower in scope than the previous version which applied to the zoning powers of local agencies with respect to all surplus property, it still creates a precedent of allowing DGS to trump the authority of a local government to enact zoning ordinances. c) Highest value vs. community "fit" with property use . The Committee may wish to consider whether getting the highest value for the property is more important than the needs of the community that surround the property. 4)Arguments in support . None on file 5)Arguments in opposition . None on file 6)Double-referral . This bill was heard by the Accountability and Administrative Review Committee on June 17, 2014, where it passed with a 12-1 vote. SB 944 Page 5 REGISTERED SUPPORT / OPPOSITION : Support None on file Opposition None on file Analysis Prepared by : Debbie Michel / L. GOV. / (916) 319-3958