BILL ANALYSIS �
Bill No: SB
944
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Lou Correa, Chair
2013-2014 Regular Session
Staff Analysis
SB 944 Author: Torres
As Amended: March 12, 2014
Hearing Date: April 8, 2014
Consultant: Paul Donahue
SUBJECT
Surplus state property: Re-zoning
DESCRIPTION
Prohibits a local government from re-zoning state real
property within its jurisdiction that is declared surplus
by the state unless the Department of General Services
(DGS) either requests or approves the re-zoning.
Specifically, this bill :
1)Prohibits a local government from re-zoning state real
property within its jurisdiction that is declared
surplus, or identified as excess, unused, underutilized,
or partially utilized, unless DGS requests that the
property be rezoned, or approves the rezoning.
2)Adds creation of sustainable jobs to existing
declarations of legislative intent that that the
provision of decent housing for all Californians is a
state goal of the highest priority when the state
disposes of surplus state property.
3)Adds "development of projects that create sustainable
employment opportunities of benefit to the area and
region where the property is located" to the existing
declaration of legislative intent that DGS should give
priority to housing for persons and families of low or
moderate income when disposing of state surplus real
SB 944 (Torres) continued
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property.
EXISTING LAW
1)Authorizes DGS, subject to legislative approval, to sell,
lease, exchange, or transfer various specified properties
for current market value, or upon such other terms and
conditions that DGS determines are in the best interests
of the state.
2)Unless otherwise specified by law, requires the proceeds
from the sale of surplus state property be used to pay
the principal and interest on the Economic Recovery Bond
Act of 2004. <1>
3)Requires DGS to dispose of surplus state real property in
a specified manner, and prescribes the priority of
disposition of the property before DGS may offer it for
sale to private entities or individuals.
4)Declares the intent of the Legislature that provision of
decent housing for all Californians is a state goal of
the highest priority, and that priority shall be given to
the disposal of surplus state real property to housing
for persons and families of low or moderate income.
BACKGROUND
1)Purpose of the bill : According to the author's office, in
the recent past DGS has encountered situations in which
local government agencies re-zoned state-owned surplus
real estate, resulting in a reduction of the value of the
asset. The author is concerned that this might happen in
her district in connection with the impending closure and
sale of the Lanterman State Hospital as surplus state
property. The author's office states that, if the
property is re-zoned, it will likely result in a
decreased market value, and it could potentially be
re-zoned in a manner that is inconsistent with the long
term interests of the surrounding area and region - in
particular, the need to ensure sustainable job creation
in an area of the state that has an unemployment rate of
at least 9.5 percent.
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<1> Proposition 60A, November 2004, SCA 18 (Johnson). See
also, Govt. Code � 11011.
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2)Overview of process - disposition of surplus state real
property : State law requires each state agency to
annually review all state lands, with some exceptions, to
determine what, if any, land is in excess of its
foreseeable needs, and report on this review to DGS.
Jurisdiction over excess or underutilized property is
transferred to DGS to manage the sale or other
disposition of the property.
If DGS determines that a parcel of surplus state real
property is not needed by any state agency,<2> it is
required to first offer the property to a local agency,
and then to nonprofit affordable housing entities, prior
to the property being offered for sale to private
entities or individuals.<3>
When the Legislature authorizes DGS to sell or otherwise
dispose of the surplus property, DGS sells the property
at fair market value, or otherwise disposes of it upon
terms and conditions, and subject to reservations and
exceptions that DGS deems to be in the best interests of
the state.<4>
3)Re-zoning by local agencies : As noted above, state law
requires DGS to offer surplus parcels of state real
estate to local agencies prior to listing the property
for sale. Often there is considerable local agency
interest in the surplus state property, especially when
the property is a large parcel or possesses unique,
desirable qualities. In fact, SB 944 was introduced in
anticipation of the pending sale or other disposition of
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<2> If a state agency determines that it has a need for a
parcel of surplus property, the Department of Finance
determines the propriety of such requests, and if approved,
the jurisdiction over the property is merely transferred to
that state agency.
<3> Govt. Code � 11011.1
<4> Govt. Code � 11011. With some exceptions, the net
proceeds received from any real property sale, lease, or
exchange is paid into the Deficit Recovery Bond Retirement
Sinking Fund Subaccount, established pursuant to
Proposition 60A, [enacted by the voters in 2004], until the
bond debt is retired.
SB 944 (Torres) continued
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the 302-acre Lanterman Developmental Center, located in
Pomona.
The author's office notes that in the recent past, DGS
has encountered situations in which the local agencies
deliberately attempted to, or succeeded in "down-zoning"
a parcel of land during the pendency of its negotiations
with DGS, which resulted in a reduction in fair market
value of the state-owned parcel.<5>
This reduction in value occurs because a real estate
appraiser is required to consider the current zoning of
the property when determining the fair market value of
the property. If the property is re-zoned prior to final
appraisal, the local agency is thereby able to acquire
the property at a price that is substantially below the
actual fair market value.
Under SB 944, a local agency could not re-zone surplus
state real property within its jurisdiction prior to sale
unless DGS requests that the property be rezoned, or
approves the rezoning.
4)Lanterman Developmental Center : In 2010, the Department
of Developmental Services (DDS) announced its intent to
close the 302-acre Lanterman Developmental Center. Since
that time, DDS has been taking steps to move its
residents as appropriate services and supports for each
resident become available. At this time, the Department
of Finance is reviewing a proposal from California
Polytechnic University, Pomona (Cal Poly) that would
expand the campus onto the Lanterman property. It does
not yet appear that Cal Poly has provided any specific
details concerning how it would utilize the subject
property, and Cal Poly has not presented a detailed offer
to Finance.
The author expects discussions with Cal Poly to continue
past December 31, 2014, the date by which all the
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<5> The author's office lists 3 instances in which local
agencies initiated actions to re-zone surplus real estate
to reduce or attempt to reduce the fair market value of a
parcel: the County of Napa's re-zone of the Napa State
Hospital, the City of Los Angeles re-zoning the L.A. Civic
Center, and the City of Whittier's proposed re-zoning of
the Nelles Youth Correctional Center.
SB 944 (Torres) continued
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permanent residents of Lanterman are expected to have
been moved. The author states that the City of Pomona
will be a party to the process, in order to ensure that
the site development plan benefits the local community.
The entire process is expected to take another 24 months,
during which time DDS will be responsible for maintaining
the property. Currently, Lanterman is zoned for
public/institutional purposes.
PRIOR/RELATED LEGISLATION
SB 1217 (Dutton), Chapter 707, Statutes of 2012. Authorizes
DGS to lease a building located at Patton State Hospital to
a nonprofit corporation or local government, for a period
not to exceed 20 years, for the purpose of providing
services to elderly persons.
AB 2279 (Evans), Chapter 595, Statutes of 2010. Authorizes
DGS to sell or exchange, at fair market value based upon an
appraisal approved by DGS, all or part of a specified
parcel of state property only to the County of Napa upon
terms, conditions, reservations, and exceptions that DGS
determines are in the best interest of the state, by
January 1, 2015. Requires any agreement for the sale or
exchange of the property to include a provision that
requires the County of Napa to retain title to the property
for use as a park or wilderness preserve, or in the event
of a future sale of that property by the county.
SUPPORT:
None on file
OPPOSE:
None on file
FISCAL COMMITTEE: Senate Appropriations Committee
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