BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     SB 680


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          SENATE THIRD READING


          SB  
          680 (Wieckowski)


          As Amended  June 30, 2016


          2/3 vote.  Urgency


          SENATE VOTE:  33-2


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Accountability  |7-0  |Cristina Garcia,      |                    |
          |                |     |Lackey, Burke,        |                    |
          |                |     |Frazier, Irwin,       |                    |
          |                |     |Medina, Rodriguez     |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Appropriations  |20-0 |Gonzalez, Bigelow,    |                    |
          |                |     |Bloom, Bonilla,       |                    |
          |                |     |Bonta, Calderon,      |                    |
          |                |     |Chang, Daly, Eggman,  |                    |
          |                |     |Gallagher, Eduardo    |                    |
          |                |     |Garcia, Holden,       |                    |
          |                |     |Jones, Obernolte,     |                    |
          |                |     |Quirk, Santiago,      |                    |
          |                |     |Wagner, Weber, Wood,  |                    |
          |                |     |Chau                  |                    |
          |                |     |                      |                    |








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          SUMMARY:  Authorizes the Director of the Department of General  
          Services (DGS) to modify the existing terms and conditions  
          governing the sale and transfer of a parcel of state surplus  
          property within the City of Santa Clara (City) to the Santa  
          Clara Housing Authority (SCHA).  Specifically, this bill:


          1)Allows the Director of DGS to modify the existing terms and  
            conditions, including, but not limited to, the existing  
            purchase and sale agreement, the grant deed, the commencement  
            date for development, and any other applicable transaction  
            documents (transaction documents), governing the transfer of  
            an approximately six-acre parcel of state surplus property  
            (parcel) within the City to the SCHA.


          2)Specifies that the parcel may be used for a residential  
            development that includes both affordable and market rate  
            units.   


          3)Requires DGS to determine, as a result of any modification to  
            the terms and conditions of the transaction documents, the  
            difference between the actual price paid by the local agency  
            for the parcel and the fair market value of the parcel.   
            Directs the SCHA to pay that difference to DGS.


          4)Permits the City to amend the transaction documents, as  
            specified, with the consent of DGS and the SCHA.


          5)Holds harmless and indemnifies the state from any legal action  
            resulting from the residential development proposed for the  
            parcel.








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          EXISTING LAW: 


          1)Requires the Director of DGS to perform various functions with  
            respect to state property and provides for the sale, lease, or  
            transfer of surplus state property.


          2)Requires each state agency to annually review and determine if  
            any lands under their jurisdiction are in excess of  
            programmatic need and report that information to DGS.  


          3)Requires DGS to annually report state surplus land to the  
            Legislature, and request legislative authorization to dispose  
            of the land by sale or otherwise, subject to specified  
            conditions.  


          4)Establishes processes for DGS to dispose of state surplus  
            property.  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 use of the property  
            is for a qualifying purpose, such as low or moderate income  
            housing, local schools, parks and recreation, and open space.


          5)Declares a 17-acre site, which includes the estimated six-acre  
            parcel that is the subject of this bill, within the City,  
            surplus land pursuant to SB 2099 (Vasconcellos), Chapter 631,  
            Statutes of 2002.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, costs to DGS will be minor and absorbable.  Modifying  
          the terms of the lease, which will allow development of the  








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          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:  This bill seeks to modify the terms and conditions of  
          part of a 17-acre property in Santa Clara that was declared  
          surplus by the state via SB 2099 in 2002.  The author states  
          that this bill is needed to allow the sale and purchase  
          agreement of an estimated six-acre parcel to be revised so that  
          the City can move forward with a new residential development  
          plan for the parcel.  


          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 parcel 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.  


          According to the author, the City wishes to move forward with a  
          new development plan for the parcel.  This bill would allow the  
          sale and purchase agreement of the parcel to be amended to  
          accommodate the new plan.  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 new  
          number and type (i.e. affordable and market rate housing) of  
          units to be developed on the land.  The original agreement only  
          allows up to 165 units of affordable senior housing to be  
          developed.










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          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.


          The author states that this bill is intended to facilitate  
          development of a critically important housing project by  
          authorizing the state to revise the terms of the agreement and  
          include a provision that protects the state from any liability  
          in the event of any legal action that could result from the  
          project.


          This bill contains an urgency clause, which means it would go  
          into effect immediately.


          PRIOR LEGISLATION:  SB 472 (Alquist), Chapter 524, Statutes of  
          2006, originally would have authorized the Director of DGS to  
          sell, lease, or exchange the six-acre parcel in this bill under  
          specified conditions.  SB 472 was subsequently amended to  
          address a different subject matter.




          Analysis Prepared by:                                             
                          Scott Herbstman / A. & A.R. / (916) 319-3600   
          FN: 0003878















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