BILL ANALYSIS
Bill No: AB
815
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2009-2010 Regular Session
Staff Analysis
AB 815 Author: Caballero
As Amended: June 14, 2010
Hearing Date: June 29, 2010
Consultant: Art Terzakis
SUBJECT
State Property
DESCRIPTION
AB 815 amends an existing provision of the surplus property
bill of 2003 which granted the Director of the Department
of General Services (DGS) the authority to convey the
Salinas Armory, in the City of Salinas (Monterey County)
for no less than 50% of fair market value to the City for
development of a police station and instead authorizes
conveyance to the City for use as a "local government-owned
facility."
EXISTING LAW
Existing law authorizes DGS to perform various functions
with regard to state property and provides for the sale,
lease, or transfer of surplus state property, if authorized
or contemplated by law.
Existing law 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,
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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 or as may
otherwise be authorized by law.
Existing law provides criteria for state agencies to use in
determining and reporting to DGS lands in excess of the
agency's foreseeable needs. A state 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, DGS is
responsible for determining if surplus land is needed by
any other state agency. Existing law (Government Code
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. Existing law also prescribes the procedure for
local agencies and nonprofit affordable housing sponsors to
use to obtain the surplus state real property.
Existing law specifies that the Legislature may authorize a
particular surplus property be sold at less than fair
market value (if the local agency uses the surplus state
real property for parks or open-space purposes) and
provides that 30 days prior to executing such a
transaction, DGS must report to the chairs of the fiscal
committees of the Legislature the following information:
(a) the financial terms of the transaction; (b) a
comparison of fair market value for the property and
financial terms; (c) the basis for agreeing to terms and
conditions other than fair market value.
Existing law [Government Code 11011 (k) (1) and (2)]
contains provisions exempting the sale of surplus property
from designated provisions of the California Environmental
Quality Act (CEQA). Specifically, the law provides that
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any disposition of a parcel of surplus property made on an
"as-is" basis shall be exempt from statutory requirements
of CEQA; however, the law makes it explicit that the buyer
or transferee of a parcel shall be subject to any local
governmental entitlement or land use approval requirements
and CEQA.
Furthermore, existing law provides that if any transaction
is not on an "as-is" basis sale and close of escrow is
contingent on satisfying any local governmental approvals
for entitlement or land use requirements, including
compliance by the local government with CEQA, then the
execution of the purchase and sale agreement or exchange
agreement is exempt from CEQA.
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
Salinas Armory: SB 856 (Governmental Organization),
Chapter 258 of 2003 was the annual surplus property bill,
sponsored by DGS, which among other things, authorized DGS,
with consent of the Military Department to surplus this
property located at 100 Howard Street, in the City of
Salinas (Monterey County) and sell it to the City for no
less than 50% of fair market value so that the City may use
the property for a police station.
The property was appraised at $860,000 at the time of
purchase in July 2005 but the City received it for
$430,000. This conveyance was made on the condition that
the City utilizes the property for a public benefit by
constructing a police station. Conditions of the sale
provided that construction begin within 10 years of the
recording of the deed to the City. The State retained the
right to terminate the City's right, title, and interest in
the property if construction of the police station had not
commenced within 10 years of the deed recording. Several
use limitations were also placed on the property until
construction of the police station, including use as a
gymnastics academy and public parking for government
purposes. If the City breaches any of these conditions the
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State retains the right to terminate the City's right,
title and interest in the property.
Purpose of AB 815: According to the author's office, the
City of Salinas purchased the Salinas Armory property from
the State with the intent of developing it into a police
station however, the City has encountered numerous
obstacles in development of the property, including but not
limited to, the presence of asbestos, mold, and other
potential environmental hazards. An alternative and
superior location for a police facility has been identified
in east Salinas in the Alisal Marketplace area, an area in
great need of increased public safety services and
facilities.
The author's office states that the Salinas Police
Activities League (PAL) would like to utilize the armory
facility for the home of their programs. PAL proposes to
renovate the facility for use as a center for SPD sponsored
youth activities, including after school and extended hours
programs. PAL indicates that they have secured a $100,000
private grant to upgrade the Armory.
This measure would amend Section 4 of Chapter 258 of the
Statutes of 2003, thereby authorizing the development of
the Salinas Armory as a local, government-owned facility
for the public benefit.
PRIOR/RELATED LEGISLATION
AB 2279 (Evans) 2009-10 Session. Would grant DGS the
authority to sell or exchange at current fair market value,
by January 1, 2015, to the County of Napa, certain property
located in the County upon terms and conditions the
Director deems are in the best interests of the state.
(Pending in Senate Appropriations Committee)
SB 1167 (Cogdill) 2009-10 Session. Would authorize DGS to
dispose of all or any portion of two parcels of real
property (the Veterinary Laboratory for the Department of
Food and Agriculture located in Fresno and the Department
of Motor Vehicles field office located in Roseville, Placer
County). (Pending in Assembly Policy Committee)
AB 22xxxx (Evans) Chapter 20, Statutes of 2009-10 Fourth
Extraordinary Session. Authorized DGS to: (1) sell the
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Orange County Fairgrounds; (2) sell specified state-owned
office buildings and to enter into long-term leases for
those buildings with the option to buy back any of the
buildings; (3) enter into and approve "long-term" leases of
the state's real properties and determine terms and
conditions of such leases. Also, imposed additional
reporting requirements upon state agencies relative to
information that must be submitted to DGS pertaining to the
state's real property holdings and authorized a loan of not
more than $10 million from the General Fund to support the
management of the state's real property assets and any
extra workload.
SB 760 (Aanestad) Chapter 64, Statutes of 2009. Authorized
DGS to sell, lease or exchange specified state-owned real
property in the City of Red Bluff, that is specifically not
declared surplus to the State's needs, and use the proceeds
to acquire office and related space not to exceed 40,000
net square feet in the City, to consolidate various
departments and state agencies.
SB 256 (Aanestad) Chapter 572, Statutes of 2009.
Authorized DGS to sell, lease, exchange, or any combination
thereof, all or a portion of specified state-owned real
property in the City of Chico, that is specifically not
declared surplus to the State's needs, and is used by the
California Highway Patrol as its area office, in order to
relocate and expand the office.
SB 178 (Aanestad) Chapter 564, Statutes of 2009.
Authorized DGS to sell, lease or exchange approximately
three acres of state-owned real property located in the
City of Redding that is specifically not declared surplus
to the State's needs and is currently used by the
Department of Forestry and Fire Protection for the purpose
of consolidating operations on or near the Redding Airport.
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"
basis from designated provisions of CEQA. 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.
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AB 600 (Hall) 2009-10 Session. Would have authorized DGS,
with the approval of the Adjutant General, to complete a
lease to the City of Compton at fair market value, of
specified state-owned property known as the Compton Armory.
(Vetoed by Governor on the basis that current law already
authorizes DGS to enter into long-term leases on
state-owned land that may have some potential future use to
the program needs.)
AB 240 (Monning) Chapter 422, Statutes of 2009. Revised
the terms of a previously authorized exchange of DeLaveaga
Park parcels, 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.
SB 1681 (Battin) Chapter 532, Statutes of 2008. Among
other things, revised the conditions and procedures by
which DGS may dispose of surplus land to local agencies and
private entities and individuals.
SB 567 (Aanestad) 2007-08 Session. The annual surplus
property bill sponsored by DGS. (Placed on Senate Inactive
File by Author)
SB 553 (Aanestad) 2007-08 Session. Similar to SB 178
(Aanestad) of 2009. Would have authorized DGS to lease,
sell, or exchange at fair market value a specified parcel
of state-owned property in the City of Redding currently
being used by the Department of Forestry and Fire
Protection (CalFire) as its Shasta-Trinity Unit
Headquarters. (Vetoed)
AB 2026 (Villines) Chapter 761, Statutes of 2008.
Authorized DGS to sell, exchange, or lease for fair market
value nine specified parcels deemed to be surplus to the
state's needs. Additionally, rescinded the surplus
authorization granted previously to DGS with respect to
seven specified parcels. Furthermore, exempted the State's
execution of a purchase and sales agreement from CEQA
however, the provisions made it explicit that in an "as is"
sale, the buyer or transferee will be subject to any local
governmental entitlement or land use approval requirements
including requisite CEQA provisions.
AB 1123 (Berg) Chapter 625, Statutes of 2007. Authorized
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DGS, with the approval of the Adjutant General, to lease to
the City of Healdsburg at fair market value and for a
period of up to 30 years specified state property known as
the Healdsburg Armory. Also, required that proceeds from
the lease be deposited into the Armory Fund.
SB 99 (Battin) 2005-06 Session. Would have established the
Commission on Asset Review and Divestiture to review
biennially the inventory of all real property held by the
State. (Held in Senate Appropriations Committee)
AB 53 (Negrete McLeod) 2005-06 Session. The annual DGS
surplus property bill containing approximately 30 parcels
for disposal. (Died on Senate Inactive File)
AB 54 (Negrete McLeod) 2005-06 Session. The annual DGS
surplus property bill. (Vetoed by Governor because of
concerns over requiring DGS to initiate a CEQA process on
the properties - the Governor stated that "such a provision
could potentially cost California taxpayers millions of
dollars.")
SB 669 (Battin) 2003-04 Session. Would have required DGS
to identify $1 billion worth of state property that can be
sold immediately to help close the budget deficit. The
bill also would have required state agencies affected by
the sale to determine the costs and benefits of leasing
back their existing space or finding new, more
cost-effective space. (Passed out of this Committee on a
vote of 11-0; Died in Senate Appropriations Committee -
Suspense file)
SB 856 (Committee on Governmental Organization) Chapter
258, Statutes of 2003. The annual DGS surplus property
bill.
SB 1607 (Committee on Governmental Organization) Chapter
974, Statutes of 2002. The annual DGS surplus property
bill.
SB 951 (Committee on Governmental Organization) Chapter
610, Statutes of 2001 . The annual DGS surplus property
bill.
SUPPORT: As of June 25, 2010
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City of Salinas
Chief Louis Fetherolf, City of Salinas Police Department
Salinas Police Activities League
OPPOSE: None on file as of June 25, 2010.
FISCAL COMMITTEE: Senate Appropriations Committee