BILL ANALYSIS
SB 178
Page 1
Date of Hearing: June 30, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
SB 178 (Aanestad) - As Amended: May 21, 2009
SENATE VOTE : 39-0
SUBJECT : State property: Department of Forestry and Fire
Protection.
SUMMARY : Authorizes the Director of the Department of General
Service (DGS) to sell, lease or exchange approximately three
acres of state-owned real property located at 875 Cypress
Avenue, 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 (CalFire) as its
Shasta-Trinity Unit Headquarters, for the purpose of
consolidating operations on or near the Redding Airport.
Specifically, this bill :
1)Authorizes DGS to sell, exchange, lease for no more than 66
years, or any combination thereof, all or a portion of the
state-owned Cypress Property in the City of Redding (City)
that is currently used by CalFire.
2)Requires the Director of the DGS to use the proceeds of any
sale, exchange, lease, or any combination thereof to acquire
the land and facilities in order to consolidate or expand the
operations of the Shasta-Trinity Unit of CalFire.
3)Requires DGS to initially offer the Cypress Property to the
City and if the City fails to purchase the property, to sell,
exchange or lease the property to the public.
4)Requires any transaction to be for no less than fair market
value, as determined by an independent appraisal or pursuant
to a competitive selection process.
5)Stipulates that compensation for the Cypress Property may
include land, or a combination of land, improvements, and
money.
6)Requires any funds received from the sale, exchange, lease, or
combination thereof of all or a portion of the Cypress
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Property to be held in trust and used only for the
acquisition, lease, lease-purchase, lease with option to
purchase, or lease-purchase finance of the land and facilities
and be appropriated to DGS for expenditure for these purposes.
7)Authorizes DGS to enter into one or more agreements or leases
for the purpose of providing a substitute location for the
Shasta-Trinity Unit on or near the Redding Airport in order to
consolidate or expand the operations of the Shasta-Trinity
Unit.
8)Requires, upon appropriation by the Legislature, DGS to use
the proceeds of any sale, exchange, or lease explicitly for
consolidation or expansion of the Shasta-Trinity Unit.
9)States that the disposition of the Cypress Property is not
subject to provisions of law requiring the proceeds from the
sale of state surplus property to be used to pay the principal
and interest on the Economic Recovery Bonds or provisions of
law requiring state surplus property to be offered first to
local government agencies and affordable housing interests.
10)Requires any use or redevelopment of the Cypress Property
awarded to a nongovernmental entity and not involving the
exercise of sovereign activities of the State or another
government agency be subject to the zoning and building code
regulations of the City.
11)Requires DGS to develop the terms and conditions of any
disposition agreement and provide them to the Department of
Finance (DOF) prior to soliciting bids, and requires DGS to
obtain approval from DOF prior to the execution of any
disposition agreement regarding the Cypress Property.
12)Requires the DGS to notify the chairpersons of the
Appropriations Committee in each house of the Legislature and
the Chairperson of the Joint Legislative Budget Committee, or
his/her designee, in writing of the Director's intention to
enter into a lease or an agreement, not less than the minimum
time that the Chairperson of the Joint Legislative Budget
Committee or his/her designee may require.
13)Makes various legislative findings and declarations regarding
the Cypress Property.
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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 the DGS to request authorization of 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.
3)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 required 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.
4)Requires DGS to be responsible for determining if surplus land
is needed by any other state agency, and to first offer
surplus state real property to local agencies, and then 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.
5)Specifies that the Legislature may authorize a particular
surplus property to be sold at less than fair market value 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.
6)Exempts the sale of surplus property from designated
provisions of the California Environmental Quality Act (CEQA).
Specifically, the law provides that any disposition of a
parcel of surplus property made on an "as-is" basis shall be
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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.
7)Requires, pursuant to Proposition 60A of November 2004 (SCA
18, Johnson, Resolution Chapter 103/04) which was adopted by
the electorate, 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.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office,
"Because of a deteriorating and cramped conditions, the City of
Redding is currently in the process of looking for a new
location for its police headquarters. A recent review of
possible locations for a new police station undertaken by the
architectural firm of Nichols, Melburg, and Rossetto identified
875 Cypress Avenue in Redding as the most suitable location
because of its location adjacent to City Hall and because the
location has good ingress and egress for emergency situations.
However, the property is currently utilized by the Department of
Forestry and Fire Protection as its Shasta-Trinity unit
headquarters. City staff has worked with CAL FIRE to develop a
strategy to purchase this State-owned property in exchange for a
site approved by CAL FIRE."
Background . In the early 1990s, DGS undertook a program to save
money and make government more accessible to citizens by
rearranging state offices in major urban centers. The plan also
envisioned consolidation in numerous other California
communities where the state leased dispersed office space.
Based on a series of regional plans and facility studies, DGS'
efforts led to office consolidation projects (completed or in
the process of development) in major metropolitan areas (e.g.,
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San Francisco, Oakland, Los Angeles, Riverside/San Bernardino,
Long Beach, San Diego and Sacramento).
Under the provisions of Proposition 60A, the proceeds of the
sale of surplus property must be used to pay the holders of the
state's deficit reduction bonds. These payments are intended to
accelerate the redemption of the state's debt, and reduce future
General Fund payments to the bondholders. This measure avoids
the transfer of the proceeds associated with the disposition of
the property by specifying that the disposition of the Cypress
Property does not constitute a sale or other disposition of
surplus state property that would otherwise be subject to
Section 9 of Article III of the Constitution.
This bill also exempts the disposition of the Cypress Property
from provisions of law requiring DGS to determine if surplus
land is needed by any other state agency prior to making it
available to local agencies.
The ability to get excess properties declared surplus by the
Legislature has been impeded in the past few years by a
disagreement between the Legislature and the Administration
regarding the removal of a statutory exemption for the State's
surplus properties from the requirements of CEQA. This
disagreement has been resolved with enactment of ABX2 8
(Nestande), Chapter 6 of 2009-10 Second Extraordinary Session,
that places within Section 11011 of the Government Code an
ongoing CEQA exemption for all properties declared surplus by
the Legislature.
Previous legislation . SB 553 (Aanestad) 2007-08 Session, is
similar to this bill and 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. SB 553 was vetoed because
it did not contain a CEQA exemption; however such an exemption
is no longer necessary with the enactment of ABX2 8 (Nestande),
Chapter 6, Statutes of 2009-10 Second Extraordinary Session.
Related legislation .
ABX2 8 (Nestande), Chapter 6, Statutes of 2009-10 Second
Extraordinary Session, exempted the sale of surplus state real
property made on an "as is" basis from designated provisions of
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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 760 (Aanestad) of the 2009-10 Session, authorizes DGS to
sell, lease, exchange, or any combination thereof, approximately
3.14 acres of real property in the City of Red Bluff that is
specifically declared not to be surplus to the needs of the
state, and, in return, to acquire up to 40,000 net square feet
of usable office and related space for consolidated
administrative operations of the state.
SB 586 (Yee) of the 2009-10 Session, directs DGS, in
consultation with the Department of Food and Agriculture, to
enter into negotiations to sell, to any interested party, at
fair market value, with certain restrictions, a 13-acre parking
lot portion of the state-owned Cow Palace property, located in
the County of San Mateo and the City and County of San
Francisco.
SB 256 (Aanestad) of the 2009-10 Session, authorizes DGS to
sell, lease, exchange, or any combination thereof approximately
1.69 acres of real property in the City of Chico, currently used
by the California Highway Patrol as its Chico area office, which
is specifically declared not to be surplus to the needs of the
state.
SB 136 (Huff) of the 2009-10 Session, authorizes DGS to dispose
of three parcels consisting of approximately 2.76 acres, known
as the Harts Mills Forest Fire Station (Old), located at 9476
Oro-Quincy Highway, in Berry Creek, Butte County; approximately
47 acres, known as the Mendocino Ranger Station Excess Land,
located at 17501 North Highway 101, in Willits, Mendocino
County; and approximately 85 acres, known as the East Campus of
the Agnews Developmental Center in Santa Clara County.
REGISTERED SUPPORT / OPPOSITION :
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Support
None on file.
Opposition
None on file.
Analysis Prepared by : Ross Warren / B. & P. / (916) 319-3301