BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: sb 1170
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: liu
VERSION: 2/20/14
Analysis by: Mark Stivers FISCAL: yes
Hearing date: April 1, 2014
SUBJECT:
Surplus properties in the State Route (SR) 710 corridor
DESCRIPTION:
This bill requires that Department of Transportation (Caltrans)
offer surplus SR 710 non-residential properties to tenants in
good standing at a fair market value relative to the current use
of the property.
ANALYSIS:
Current law identifies the California state highway system
through a description of segments of the state's regional and
interregional roads that the Caltrans owns and operates. Under
current law, whenever Caltrans determines that any real property
acquired for highway purposes is no longer necessary, it may
sell or exchange the property upon terms, standards, and
conditions established by the California Transportation
Commission (CTC).
For decades, Caltrans has proposed the SR 710 extension project
to close a roughly 4.5-mile unconstructed gap in the freeway
from just north of SR 10 in Los Angeles to SR 210 in Pasadena.
This gap affects the cities of Alhambra, Pasadena, South
Pasadena, and a portion of Los Angeles. The project has been in
the planning stage since 1953 for a variety of reasons related
to the federal environmental review process. Caltrans is
currently considering several options for moving forward,
including building a tunnel instead of a freeway or not building
anything at all. In 2015, Caltrans plans to identify how it
intends to proceed. Caltrans currently owns 460 properties
within the originally proposed right-of-way, which include 330
single-family homes and 103 multifamily housing units.
Current law, known as the Roberti Act, establishes priorities
and procedures for the disposition of surplus residential
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properties in the SR 710 corridor. Under the act, Caltrans must
offer surplus single-family homes in the following priority
order:
First, at market rate to a former owner who currently
occupies the property.
Second, at an affordable price to a current low- or
moderate-income occupant who has occupied the property for
at least two years.
Third, at an affordable price to an occupant with an
income of less than 150% of the area median income who has
occupied the property for at least five years.
For all residential properties not sold under these priorities,
Caltrans must then give priority to entities that provide
affordable housing at a price necessary to make the housing
affordable to households of low or moderate income. Thereafter,
Caltrans may sell residential properties at market rate to
occupants, former occupants, and then to persons who intend to
be owner-occupants.
For non-residential properties, Caltrans must sell the property
at fair market value and give priority to tenants in good
standing.
Proceeds from the sale of surplus SR 710 properties go first to
the SR 710 Rehabilitation Account for the rehabilitation of
surplus SR 710 single-family homes being sold to low- and
moderate-income occupants for which lenders or government
housing assistance programs require repairs. When the balance
of this account reaches $500,000, additional proceeds go to the
State Highway Account to be used exclusively for projects
located in Pasadena, South Pasadena, Alhambra, La Ca�ada
Flintridge, and the 90032 ZIP Code.
This bill requires that Caltrans offer surplus SR 710
non-residential properties to tenants in good standing at a fair
market value relative to the current use of the property.
COMMENTS:
1.Purpose of the bill . According to the author, among the
soon-to-be-surplus non-residential properties in the SR 710
corridor are school sites and community gardens. Some of
these properties have been dedicated to their current use for
decades, and the tenants have invested time, energy, and funds
SB 1170 (LIU) Page 3
in their maintenance and improvement at a level well above
what a tenant of non-residential property would normally
invest. Furthermore, the maintenance and use of these
properties has benefitted the community. Tenants who now have
first priority to purchase these properties are concerned that
Caltrans will determine the fair-market price based on the
highest and best possible use of the properties, making them
unaffordable to their current occupants. This bill will
resolve the concern by requiring Caltrans to value these
non-residential properties based on their current uses.
2.Highest and best use vs. value of current use . Appraisers
generally value properties according to their "highest and
best use." In cases where the land or structures can
accommodate a more intense or productive use, this value may
be higher than the value assigned to the property as currently
used. This bill seeks to protect existing commercial tenants
from paying prices for the property they occupy that reflect
some other speculative use. In turn, this provision may
result in a future windfall to existing businesses and a
reduction in revenue returning for highway projects in the
surrounding areas. The committee may wish to consider
limiting the bill to apply only to cases in which the
purchaser is a non-profit entity.
3.Status of project . On behalf of Caltrans, the Los Angeles
County Metropolitan Transportation Authority is preparing a
draft environmental impact report (EIR) to assess alternatives
for ameliorating traffic congestion in the SR 710 gap. The
alternatives under consideration include a tunnel, light rail,
bus rapid transit, and transportation demand and traffic flow
management. The originally proposed surface route is not
under consideration. The draft EIR is scheduled for release
this fall, and Caltrans proposes to adopt the EIR and make a
decision on the preferred alternative in 2015.
POSITIONS: (Communicated to the committee before noon on
Wednesday, March 26,
2014.)
SUPPORT: City of Pasadena (sponsor)
OPPOSED: None received.
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