BILL ANALYSIS
Bill No: AB
240
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 240 Author: Monning
As Amended: May 4, 2009
Hearing Date: July 8, 2009
Consultant: Art Terzakis
SUBJECT
State Real Property: Conveyances: DeLaveaga Park
DESCRIPTION
AB 240 revises the terms of a previously authorized
exchange of DeLaveaga Park parcels, currently owned by the
State of California and the City of Santa Cruz (City)
respectively, in accordance with the current needs of the
State and City. Specifically, this measure:
1. Describes the portion of real property within the
DeLaveaga Park Property leased to the City as comprising
approximately 40 acres, referred to as the "armory site."
2. Authorizes the Department of General Services (DGS) to
convey its interest in the Delaveaga Golf Course property
to the City in return for eliminating the requirement to
transfer surplus state property owned by the National
Guard (armory site) to the City.
3. Authorizes DGS to give the City the first right to
acquire in fee or by leasehold, all or part of the armory
site, subject to the condition that it will be used for
public recreational purposes in perpetuity.
4. Authorizes DGS to sell, lease, or exchange the armory
site to any entity if the City declines to purchase the
property, subject to the condition that it will be used
for public recreational purposes in perpetuity.
AB 240 (Monning) continued
Page 2
5. Makes it explicit that the State's conveyance to the
City shall be subject to mutually agreed upon terms among
DGS, the Military Department and the City. Also, makes
other technical and conforming changes to the previously
authorized exchange agreement (SB 770, Chapter 188 of
1999 - McPherson).
EXISTING LAW
Existing law generally requires DGS to perform various
functions with respect to state property and provides for
the sale, lease, or transfer of surplus state property.
Existing law requires the state to exchange with the City
of Santa Cruz, state-owned property that is currently
leased to the City of Santa Cruz, and which is being used
as a portion of the DeLaveaga Golf Course, for City of
Santa Cruz owned property leased to the National Guard for
training purposes. Further, existing law requires the
state to convey to the City of Santa Cruz the armory site
if it is deemed to be surplus to the needs of the state and
will be used in perpetuity for recreational purposes.
Existing law (Government Code Section 11011) requires the
Director of DGS to request authorization by the Legislature
prior to the disposition by sale or otherwise of state land
reported to it by a state agency as being in excess of its
foreseeable needs. Each state agency is required to
annually review proprietary state lands under its
jurisdiction to determine what lands are in excess of the
agency's foreseeable needs and to report to DGS.
This annual review of proprietary state lands does not
apply to tax-deeded land, land held for highway purposes,
lands under the jurisdiction of the State Lands Commission,
land that has escheated to the state or that has been
distributed to the state by a court decree in estates of
deceased persons, and lands under the jurisdiction of the
State Coastal Conservancy. Jurisdiction of all land
reported as excess is transferred to DGS, when requested by
the Director of DGS, for sale or disposition under Section
11011 or as may otherwise be authorized by law.
Section 11011 of the Government Code provides criteria for
state agencies to use in determining and reporting to DGS
lands in excess of the agency's foreseeable needs. A state
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Page 3
agency is to include land not currently being utilized, or
currently being underutilized, for any existing or ongoing
program; land for which the agency has not identified any
specific utilization relative to future needs; and land not
identified by the agency within its master plan for
facility development.
Where applicable within its jurisdiction under Section
11011, DGS is responsible for determining if surplus land
is needed by any other state agency. Section 11011.1
requires the state to first offer surplus state real
property to local agencies, and next, to offer the property
to nonprofit affordable housing sponsors, as defined, prior
to offering the property to private entities. This section
of law also prescribes the procedure for local agencies and
nonprofit affordable housing sponsors to use to obtain the
surplus state
real property.
Proposition 60A of November 2004 (SCA 18, Johnson,
Resolution Chapter 103/04) which was adopted by the
electorate (73% margin) requires, among other things, that
the proceeds from the sale of surplus state property, with
specified exceptions, be used to pay the principal and
interest on the Economic Recovery Bond Act of 2004.
BACKGROUND
Brief History: The history behind this bill begins in the
latter years of the 19th century with the death of Jose
Vicente DeLaveaga, the original owner of the DeLaveaga Park
Property. Mr. DeLaveaga bequeathed the property to the
City of Santa Cruz and the County of Santa Cruz. Heirs to
the estate challenged the gift and litigation ensued. The
lawsuit was resolved in 1898, and on May 27, 1898 the San
Francisco Superior Court issued a decree that determined
title to the DeLaveaga Park Property vested jointly in the
City and County. One year later, in 1899, the California
Legislature enacted a statute, that established a camp of
instruction for the California National Guard and
authorized the acquisition, by "donation," of a site for
the same. Pursuant to that act, the City of Santa Cruz and
the County of Santa Cruz, in March of 1901, jointly
conveyed, by way of donation, a portion of the DeLaveaga
Property to the state for use as a National Guard camp of
instruction.
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Page 4
At this point (1901), a portion of the DeLaveaga Property
was jointly owned by the City of Santa Cruz and County of
Santa Cruz, and the other portion was owned by the State of
California for military uses. Sixty-six years later, on
June 29, 1967, in conjunction with the property's
development as a golf course, the County of Santa Cruz
conveyed all of its right, title and interest in the
DeLaveaga Park Property to the City of Santa Cruz subject
to a condition that it be used in perpetuity for park and
recreational purposes. In addition, to further facilitate
the City's development of the DeLaveaga Golf Course, the
City leased from the State a portion of the DeLaveaga
property owned by the State comprised of approximately 83
acres (now used by the City for six holes of the DeLaveaga
Golf Course.) In exchange, the City leased to the State
approximately 98 acres of the "upper" portion of the
DeLaveaga Property.
Pursuant to the June 29, 1967 Lease Exchange Agreement
between the City and the State, the City leased its 83
acres from the State subject to the condition that the 83
acres be used only for parks and recreational purposes and
the State leased its 98 acres from the City subject to the
condition that it be used for tactical exercises and
maneuvers by the state's military department. The Lease
Exchange Agreement provided: "Each of the parties (e.g.,
City and State) shall use diligent efforts to secure legal
authority, and thereafter shall convey to the other title
in fee simple absolute to the parcel demised by it
hereunder. Title to each such parcel shall be free of any
liens, encumbrances or other defects of title save and
except those which might be acceptable to the grantee
thereof."
Despite the above contractual language, neither party ever
obtained the requisite approval to convey title to the
property it was leasing to the other. As a result, the
lease agreements were scheduled to terminate in the year
2003.
In 1999, the City approached then-Senator McPherson with a
legislative proposal to effectuate the "in fee" swap. That
measure, SB 770, passed the Legislature and was signed by
the Governor (Chapter 188, Statutes of 1999). Under SB
770, the state was obligated to transfer to the City of
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Page 5
Santa Cruz the 83 acres golf course site immediately. When
it is no longer needed as a camp of instruction by the
Military Department, the armory site would also return to
the City. The transfer was contingent on the land being
used by the City in perpetuity for either municipal golf or
public recreation purposes. As compensation for the 83
acres, the City would transfer to the state the 98 acre
parcel currently leased to the state. Due to a number of
circumstances, SB 770 was not implemented. June 2009 marks
the 42nd anniversary of the lease-exchange agreement and
both the City and the Department of General Services have
reinstituted discussions on effectuating a transfer.
Purpose of AB 240: According to the author's office, this
measure would restructure the 1999 statute (SB 770 -
McPherson) that provided for the original exchange of the
property by providing that instead of the city giving the
98 acres of essentially vacant land to the state, the city
would quitclaim its rights to the armory buildings and
lands and authorize the transfer, exchange or lease at a
later date if it is no longer needed as a camp of
instruction by the Military Department. Any subsequent use
would be for "public recreation" as provided in current
law. Additionally, the city would obtain first right for
any lease or sale of the armory property (when no longer
needed by the state).
Staff Comments: This measure is nearly identical to AB
2472 of 2008 and AB 1438 of 2007, both of which were
authored by Assemblyman Laird and vetoed by the Governor on
the basis that neither measure contained a statutory
exemption from the California Environmental Quality Act
(CEQA). The Governor's veto message stated "there is no
reason to apply CEQA to properties that are being sold?CEQA
is properly applied when the use and zoning of real
property is changed not when it is simply sold."
AB 8xx (Nestande), Chapter 6 of 2009, referenced below,
established a permanent CEQA exemption for state surplus
property sales that addressed the Governor's concerns.
PRIOR/RELATED LEGISLATION
AB 8xx (Nestande) Chapter 6, Statutes of 2009-10 Second
Extraordinary Session. Among other things, exempted the
sale of surplus state real property made on an "as is"
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Page 6
basis from designated provisions of CEQA. The bill also
exempted from those provisions of CEQA the execution of the
purchase and sale agreement or the exchange agreement for
surplus state real property if the disposition is not made
on an "as is" basis and the close of escrow is contingent
on a specified requirement or compliance with CEQA. AB 8xx
also provided expedited environmental permitting and CEQA
exemption for a list of 11 critical transportation
projects, as specified.
SB 136 (Huff) 2009-10 Session. Annual DGS surplus property
bill that authorizes DGS to dispose of specified parcels.
(Pending in Assembly policy committee)
AB 2472 (Laird) 2007-08 Session. Nearly identical to AB
240 (Monning) of 2008 and AB 1438 (Laird) of 2007. (Vetoed
on the basis that it did not contain a CEQA exemption)
AB 1438 (Laird) 2007-08 Session. Nearly identical to AB
240 (Monning) of 2009 and AB 2472 (Laird) of 2007. (Vetoed
by Governor on the basis that it did not contain a CEQA
exemption)
SUPPORT: City of Santa Cruz
OPPOSE: None on file as of July 3, 2009.
FISCAL COMMITTEE: Senate Appropriations Committee
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