BILL ANALYSIS Ó
SB 680
Page 1
Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 680
(Wieckowski) - As Amended June 30, 2016
-----------------------------------------------------------------
|Policy |Rules |Vote:|11 - 0 |
|Committee: | | | |
| | | | |
| | | | |
|-------------+-------------------------------+-----+-------------|
| |Accountability and | |7 - 0 |
| |Administrative Review | | |
| | | | |
| | | | |
-----------------------------------------------------------------
Urgency: Yes State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill modifies the terms of an agreement for the sale of a
surplus state property. Specifically, this bill:
1)Authorizes the Director of the Department of General Services
(DGS) to modify, as specified, the existing terms and
conditions governing the sale and transfer of a six-acre
SB 680
Page 2
parcel of state surplus property within the City of Santa
Clara to the Santa Clara Housing Authority (SCHA).
2)Requires DGS to determine the difference between the price
paid by the SCHA for the property and the fair market value,
which shall be paid by the SCHA to DGS.
3)Holds harmless and indemnifies the state from any legal action
resulting from the residential development proposed for the
parcel.
FISCAL EFFECT:
Costs to DGS will be minor and absorbable. Modifying the terms
of the lease, which will allow development of the property to
include market rate housing, will result in one-time General
Fund revenues of up to several million dollars as the sale price
of the property is adjusted to market rate. (Since the original
sale was related solely to development of affordable housing,
the sale price was discounted by $8.1 million from market rate.)
COMMENTS:
1)Background. Current law requires each state agency to annually
review and determine if any lands under their jurisdiction are
in excess of programmatic need, and to report that information
to DGS, which in turn reports state surplus properties to the
Legislature, and request legislative authorization to dispose
of these properties by sale or otherwise, subject to specified
conditions and processes. Generally, local governmental
agencies have first right of refusal of state surplus
property, and may acquire such property below fair market
value under certain circumstances, including when the intended
SB 680
Page 3
use of the property is for a qualifying purpose, such as
low-or moderate-income housing, local schools, parks and
recreation, and open space.
The parcel that is the subject of this bill is part of a
17-acre property that would declared surplus by the state and
authorized for disposition pursuant to SB 2099 (Vasconcellos),
Chapter 631, Statutes of 2002. Originally, the entire 17-acre
site was proposed for development of a mixture of single
family, senior, and affordable housing. In July 2005, the
City's Redevelopment Agency (RDA) agreed to purchase the
six-acre portion of the property from the state to develop up
to 165 affordable senior housing units. When RDAs were
dissolved as part of the 2011 State Budget Act, ownership of
the parcel was transferred to the SCHA, the RDA successor
agency, in January 2012.
2)Purpose. According to the author, the City wishes to move
forward with a new development plan for the six-acre parcel.
The current developer of the parcel, The Core Companies,
proposes a plan that would consist of 359 total units on the
parcel, with 181 units of affordable housing. Of those units,
165 would be designated for seniors and senior veterans and
the remaining 16 would be designated for low-to
moderate-income families. The other 178 units would be
offered at market rate.
DGS indicates that it currently lacks the authority to modify
the terms of the agreement to reflect the changes that the
City is requesting with regard to the increased number of
units and the inclusion of market rate housing. This bill
SB 680
Page 4
would allow the sale and purchase agreement of the parcel to
be amended to accommodate the new plan.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081