BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        SB 680|
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                                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:   








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          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  








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            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  








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          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








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          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,  








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            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


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