BILL ANALYSIS Ó SB 680 Page 1 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 | | | | | | | SB 680 Page 2 | | | | | ------------------------------------------------------------------ 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. SB 680 Page 3 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 SB 680 Page 4 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. SB 680 Page 5 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 SB 680 Page 6