BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 760
                                                                  Page  1

          Date of Hearing:   July 1, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                SB 760 (Aanestad) - As Introduced:  February 27, 2009 

          Policy Committee:                              Business and  
          Professions  Vote:                            11-0 (Consent)

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill authorizes the Department of General Services (DGS) to  
          replace the existing state office building in Red Bluff (Tehama  
          County).  Specifically, this bill:

          1)Authorizes DGS to dispose of-through sale, lease, or exchange,  
            and at fair market value-the existing 3.14-acre state office  
            building property in Red Bluff.

          2)Requires DGS to use the proceeds from (1) to acquire land and  
            facilities to replace the existing state facility.

          3)Authorizes DGS to enter into agreements for up to 40,000  
            square feet of office and related space to consolidate state  
            operations in Red Bluff, and states legislative intent that  
            the state obtain an equity interest in the replacement  
            facility.

           FISCAL EFFECT  

          The existing state building contains about 17,200 usable square  
          feet.  Annual costs to building tenants, based on the state's  
          Building Rental Rate of $1.80 per square foot plus an additional  
          amount for storage, is about $400,000.  DGS indicates that it  
          would seek to consolidate other state operations currently  
          within Red Bluff into one location.  (DGS does not have an  
          estimate of the property's current fair market value.)  It is  
          likely that relocating and consolidating state operations in  
          Redding to a newer building would result in higher annual costs.  
           However, these additional lease costs would likely be offset in  
          part by the avoided capital outlay costs for otherwise  








                                                                  SB 760
                                                                  Page  2

          renovating the existing state building and by the proceeds  
          obtained from selling the state property.
           
           COMMENTS  

           1)Purpose  .  According to the author's office, the existing Red  
            Bluff State Office Building is a 43-years old and in need of  
            renovation or replacement.  The author asserts that renovating  
            the building would cost nearly the same amount as a new  
            facility, and would only extend the building's life by 20  
            years.  This bill is sponsored by DGS.

           2)Background .  In the early 1990s, DGS undertook a program to  
            save money and make government more accessible to citizens by  
            consolidating state offices in major urban centers.  Based on  
            a series of regional plans and facility studies, DGS' efforts  
            led to office consolidation projects, either completed or in  
            the process of development, in San Francisco, Oakland, Los  
            Angeles, Riverside/San Bernardino, Long Beach, San Diego and  
            Sacramento.

           Analysis Prepared by :    Chuck Nicol / APPR. / (916) 319-2081