BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 680| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 680 Author: Wieckowski (D), et al. Amended: 8/19/16 Vote: 27 - Urgency PRIOR VOTES NOT RELEVANT SENATE GOVERNMENTAL ORG. COMMITTEE: 12-0, 8/26/16 (pursuant to Senate Rule 29.10) AYES: Hall, Berryhill, Bates, Block, Gaines, Galgiani, Glazer, Hill, Hueso, Lara, McGuire, Vidak NO VOTE RECORDED: Hernandez ASSEMBLY FLOOR: 78-0, 8/24/16 - See last page for vote SUBJECT: State real property: surplus: City of Santa Clara SOURCE: Author DIGEST: This bill authorizes 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 to the Santa Clara Housing Authority (SCHA). Assembly Amendments (1) gut and amend the bill, (2) authorize 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 to the SCHA, as specified. ANALYSIS: SB 680 Page 2 Existing law: 1)Requires 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 lands to the Legislature, and request legislative authorization to dispose of the land by sale or otherwise, subject to specified conditions. 4)Authorizes DGS to sell, lease, or exchange a specified parcel of real property in the City of Santa Clara upon terms and conditions and subject to reservations and exceptions that DGS determines are in the best interest of the state. This bill: 1)Authorizes 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 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, the difference between the actual SB 680 Page 3 price paid by the local agency for the property and the fair market value of the parcel and directs the SCHA to pay the difference to DGS. 4)Permits the City of Santa Clara to amend the development agreements, as specified, with the consent of DGS and the SCHA. 5)Makes the City of Santa Clara solely responsible for compliance with the California Environmental Quality Act for purposes of this bill. 6)Holds harmless and indemnifies the state from any legal action resulting from the residential development proposed for the property. 7)Contains an urgency clause. Background Previous authorization. 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 by SB 2099 (Vasconcellos, Chapter 631, Statutes of 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 of Santa Clara 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 of Santa Clara'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 SB 680 Page 4 parcel was transferred to the SCHA, the RDA successor agency, in January 2012. According to the author, the City of Santa Clara wishes to move forward with a new development plan for the parcel. This bill allows 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 of Santa Clara is requesting. The original agreement only allows up to 165 units of affordable senior housing to be developed. 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, 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. Prior Legislation SB 2099 (Vasconcellos, Chapter 631, Statutes of 2002) authorized DGS to sell, lease, or exchange a specified parcel of real property in the City of Santa Clara upon terms and conditions and subject to reservations and exceptions that DGS determines are in the best interest of the state. FISCAL EFFECT: Appropriation: Yes Fiscal Com.:YesLocal: No SB 680 Page 5 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 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. SUPPORT: (Verified8/24/16) City of Santa Clara OPPOSITION: (Verified8/24/16) None received ARGUMENTS IN SUPPORT: According to the City of Santa Clara, "the Silicon Valley is in the midst of a housing crisis. The lack of supply, robust demand and high area median income drastically inflates the market rates of homes and rental units in the region. While many members of the community can absorb these high housing costs, others are not so fortunate. In particular, seniors remain extremely vulnerable to the volatile housing market as a population with relatively low median incomes and higher medical expenses on average. SB 680 will provide authority to amend the January 5, 2017 deadline and allow the City of Santa Clara to negotiate with DGS to include market rate units on site, increase the City's housing supply, create a funding mechanism to finance the project and potentially reduce the income eligibility threshold for seniors seeking housing." ASSEMBLY FLOOR: 78-0, 8/24/16 AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, SB 680 Page 6 Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon NO VOTE RECORDED: Brough, Beth Gaines Prepared by:Felipe Lopez / G.O. / (916) 651-1530 8/26/16 14:26:49 **** END ****