(1)Existing law establishes the Department of Transportation and provides that the department has full possession and control of all state highways and all associated property. Existing law authorizes the department to provide information regarding, and to lease, airspace under the interchange of Route 4 and Route 5 in San Joaquin County and on the northeast corner of Route 101 and De La Vina Street in the County of Santa Barbara, to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes, as specified, but only if there is no buyer.

This bill would delete the condition that the airspace may only be leased to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes if there is no buyer.

(2)Existing law provides that, upon the declaration of a shelter crisis, as defined, a political subdivision, as defined, is immune from liability for ordinary negligence in the provision of emergency housing, as specified, and specifies that this limitation of liability applies only to conditions, acts, or omissions directly related to, and that would not occur but for, the provision of emergency housing.

This bill would require that, notwithstanding this provision, a structure that is constructed or modified pursuant to the bill is required to comply with referenced minimum standards in the 2016 California Building Code or the 2016 California Residential Code or as otherwise specified.

(3)Existing law requires that a lease executed pursuant to these provisions for airspace under the interchange of Route 4 and Route 5 in San Joaquin County shall provide for the rescission of existing leases of this airspace between the department and the City of Stockton and for the refunding of any rent paid pursuant to those leases for periods commencing on or after January 1, 1988.

This bill would delete the requirement that the rescission of existing leases of airspace pursuant to these provisions between the department and the City of Stockton provide for the refunding of any rent paid pursuant to those leases for periods commencing on or after January 1, 1988.

(4)Existing law authorizes the department, upon the request of the City of Stockton, to renew the lease executed pursuant to these provisions for the described airspace in San Joaquin County for the period requested by the city, but not to exceed 10 years, and authorizes, subsequent to that renewal, to agree to not more than 2 additional renewals of not more than 10 years each.

This bill would delete the conditions that the renewal not exceed 10 years and that, subsequent to that renewal, the department may agree to not more than 2 additional renewals of not more than 10 years each.

(1)Existing law establishes the Department of Transportation and provides that the department has full possession and control of all state highways and all associated property. Existing law authorizes the department to provide information regarding, and to lease, airspace under the interchange of Route 4 and Route 5 in San Joaquin County and on the northeast corner of Route 101 and De La Vina Street in the County of Santa Barbara, to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes, as specified, but only if there is no buyer.

This bill would delete the condition that the airspace may only be leased to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes if there is no buyer.

(2)Existing law provides that, upon the declaration of a shelter crisis, as defined, a political subdivision, as defined, is immune from liability for ordinary negligence in the provision of emergency housing, as specified, and specifies that this limitation of liability applies only to conditions, acts, or omissions directly related to, and that would not occur but for, the provision of emergency housing.

This bill would require that, notwithstanding this provision, a structure that is constructed or modified pursuant to the bill is required to comply with referenced minimum standards in the 2016 California Building Code or the 2016 California Residential Code or as otherwise specified.

(3)Existing law requires that a lease executed pursuant to these provisions for airspace under the interchange of Route 4 and Route 5 in San Joaquin County shall provide for the rescission of existing leases of this airspace between the department and the City of Stockton and for the refunding of any rent paid pursuant to those leases for periods commencing on or after January 1, 1988.

This bill would delete the requirement that the rescission of existing leases of airspace pursuant to these provisions between the department and the City of Stockton provide for the refunding of any rent paid pursuant to those leases for periods commencing on or after January 1, 1988.

(4)Existing law authorizes the department, upon the request of the City of Stockton, to renew the lease executed pursuant to these provisions for the described airspace in San Joaquin County for the period requested by the city, but not to exceed 10 years, and authorizes, subsequent to that renewal, to agree to not more than 2 additional renewals of not more than 10 years each.

This bill would delete the conditions that the renewal not exceed 10 years and that, subsequent to that renewal, the department may agree to not more than 2 additional renewals of not more than 10 years each.

(1)Existing law establishes the Department of Transportation and provides that the department has full possession and control of all state highways and all associated property. Existing law authorizes the department to provide information regarding, and to lease, airspace under the interchange of Route 4 and Route 5 in San Joaquin County and on the northeast corner of Route 101 and De La Vina Street in the County of Santa Barbara, to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes, as specified, but only if there is no buyer.

This bill would delete the condition that the airspace may only be leased to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes if there is no buyer.

(3)Existing law requires that a lease executed pursuant to these provisions for airspace under the interchange of Route 4 and Route 5 in San Joaquin County shall provide for the rescission of existing leases of this airspace between the department and the City of Stockton and for the refunding of any rent paid pursuant to those leases for periods commencing on or after January 1, 1988.

This bill would delete the requirement that the rescission of existing leases of airspace pursuant to these provisions between the department and the City of Stockton provide for the refunding of any rent paid pursuant to those leases for periods commencing on or after January 1, 1988.

(4)Existing law authorizes the department, upon the request of the City of Stockton, to renew the lease executed pursuant to these provisions for the described airspace in San Joaquin County for the period requested by the city, but not to exceed 10 years, and authorizes, subsequent to that renewal, to agree to not more than 2 additional renewals of not more than 10 years each.

This bill would delete the conditions that the renewal not exceed 10 years and that, subsequent to that renewal, the department may agree to not more than 2 additional renewals of not more than 10 years each.

(1)Existing law establishes the Department of Transportation and provides that the department has full possession and control of all state highways and all associated property. Existing law authorizes the department to provide information regarding, and to lease, airspace under the interchange of Route 4 and Route 5 in San Joaquin County and on the northeast corner of Route 101 and De La Vina Street in the County of Santa Barbara, to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes, as specified, but only if there is no buyer.

This bill would delete the condition that the airspace may only be leased to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes if there is no buyer.

(3)Existing law authorizes the department, upon the request of the City of Stockton, to renew the lease executed pursuant to these provisions for the described airspace in San Joaquin County for the period requested by the city, but not to exceed 10 years, and authorizes, subsequent to that renewal, to agree to not more than 2 additional renewals of not more than 10 years each.

This bill would delete the conditions that the renewal not exceed 10 years and that, subsequent to that renewal, the department may agree to not more than 2 additional renewals of not more than 10 years each.

(1)Existing law establishes the Department of Transportation and provides that the department has full possession and control of all state highways and all associated property. Existing law authorizes the department to provide information regarding, and to lease, airspace under the interchange of Route 4 and Route 5 in San Joaquin County and on the northeast corner of Route 101 and De La Vina Street in the County of Santa Barbara, to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes, as specified, but only if there is no buyer.

This bill would delete the condition that the airspace may only be leased to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes if there is no buyer.

(2)Existing law authorizes the department, upon the request of the City of Stockton, to renew the lease executed pursuant to these provisions for the described airspace in San Joaquin County for the period requested by the city, but not to exceed 10 years, and authorizes, subsequent to that renewal, to agree to not more than 2 additional renewals of not more than 10 years each.

This bill would delete the conditions that the renewal not exceed 10 years and that, subsequent to that renewal, the department may agree to not more than 2 additional renewals of not more than 10 years each.

(1)Existing law establishes the Department of Transportation and the California Transportation Commission and provides that the department has full possession and control of all state highways and all property and rights in property acquired for state highway purposes and authorizes and directs the department to lay out and construct all state highways between the termini designated by law and on the locations as determined by the commission. associated property. Existing law authorizes the department to provide information regarding, and to lease, airspace under the interchange of Route 4 and Route 5 in San Joaquin County and on the northeast corner of Route 101 and De La Vina Street in the County of Santa Barbara, to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes, as specified, but only if there is no buyer.

This bill would make nonsubstantive changes to these provisions. delete the condition that the airspace may only be leased to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes if there is no buyer.

Existing law establishes the Department of Transportation and the California Transportation Commission and provides that the department has full possession and control of all state highways and all property and rights in property acquired for state highway purposes and authorizes and directs the department to lay out and construct all state highways between the termini designated by law and on the locations as determined by the commission.

This bill would make nonsubstantive changes to these provisions.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2629

Author:(Eggman)

As Amended Ver:August 24, 2018

Majority vote

Original Committee Reference: TRANS.

SUMMARY: Eliminates the renewal restrictions for an existing airspace lease between the California Department of Transportation (Caltrans) and the City of Stockton in San Joaquin County under the interchange of State Route (SR) 4 and Interstate 5 (I-5) for an emergency shelter or feeding program.

The Senate amendments:

1. Delete a requirement that Caltrans refund any rent paid upon the rescission of any existing airspace leases.
2. Make other technical, non-substantive changes to add a co-author.

EXISTING LAW:

1. Authorizes Caltrans to lease to San Joaquin County, or a city or other political subdivision, the airspace under the interchange of SR 4 and I-5 for an emergency shelter or feeding program at a rate of $1 per month.
2. Enables the City of Stockton to renew its airspace lease at the SR 4 and I-5 interchange in 1988 for ten years, and authorizes two subsequent ten-year renewals following that first renewal.
3. Grants Caltrans broad authority to acquire by eminent domain any property necessary for state highway purposes.
4. Authorizes Caltrans to lease to public agencies or private entities the use of areas above or below state highways. Generally, leases to private entities have to be made on the basis of competitive bids and at fair market value.
5. Authorizes Caltrans to make land or airspace available, with or without charge, to a public entity to accommodate needed passenger, commuter, or high-speed rail, magnetic levitation systems, and highway and non-highway mass transit facilities.
6. Authorizes Caltrans to lease to San Francisco, or a political subdivision, and to Santa Barbara County, or a political subdivision, any airspace under a freeway or property for an emergency shelter or feeding program at a rate of $1 per month.

FISCAL EFFECT: According to the Senate Appropriations Committee, unknown future loss of Caltrans lease revenues, likely in the range of $50,000 to $100,000 annually beginning in 2028 (when the current lease expires). This amount of foregone revenues would increase in future years to the extent that the gap between lease payments and fair market value increases. Actual lease revenue losses would depend upon the fair market lease value of the property and lease terms. Staff notes that these revenue losses would be a General Fund impact because lease revenues are currently used to partially offset General Fund payments for transportation-related debt service.

COMMENTS: The authority for Caltrans to enter into airspace leases is in existing law, but Caltrans is generally obligated to secure fair market value lease rates for airspace under freeways or other available parcels, based on the estimated highest and best use of the property. Notable exceptions to the fair market value requirement authorizes Caltrans to lease unused parcels of land below market rates to various cities and counties for the purposes of emergency shelters and feeding programs. In each of these exceptions, the Legislature has found that submarket rate leases for these particular uses serves a public purpose.

One specific exception in current law to Caltrans' requirement to lease airspace at fair market value involves the airspace under the SR 4/I-5 interchange in Stockton. Currently, there are two non-profits operating in this space under a lease entered into in the 1980s – the Stockton Shelter for the Homeless and St. Mary's Dining Room. While similar authorizations in statute include no renewal restrictions, existing law requires these entities to renew the airspace lease with Caltrans every ten years, effectively preventing the non-profits from making solid long-term plans and securing funding for future capital projects.

According to the author, the demand for the services provided by these entities is expected to continue to grow, and a long-term solution is needed for them to continue providing these essential services for the homeless population in San Joaquin County. This bill eliminates the renewal restrictions for this specific airspace lease, enabling Caltrans to enter into a longer-term lease with these non-profits and providing the necessary stability for the entities to secure capital funding.

Analysis Prepared by: Eric Thronson / TRANS. / (916) 319-2093 FN: 0004947

 THIRD READING  

Bill No: AB 2629

Author:

Amended: 8/24/18 in Senate

Vote:

SENATE TRANS. & HOUSING COMMITTEE: 12-1, 6/19/18

AYES: Beall, Cannella, Allen, Dodd, Gaines, Galgiani, McGuire, Roth, Skinner, Vidak, Wieckowski, Wiener

NOES: Morrell

SENATE APPROPRIATIONS COMMITTEE: 6-0, 8/16/18

AYES: Portantino, Beall, Bradford, Hill, Nielsen, Wiener

No Vote Recorded: Bates

ASSEMBLY FLOOR: 73-0, 5/17/18 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill authorizes the lease of specified California Department of Transportation (Caltrans) airspace parcels in San Joaquin and Santa Barbara Counties for emergency shelter or feeding purposes regardless of whether there are other prospective buyers and removes the current restriction that the San Joaquin County airspace lease be limited to a 10-year term with two possible 10-year lease renewals.

Senate Floor Amendments of 8/24/18 add in a provision requiring a local agency that enters into a lease agreement with Caltrans to meet certain building and residential standards.

ANALYSIS:

Existing law:

1. Grants Caltrans broad authority to acquire by eminent domain any property necessary for state highway purposes.
2. Authorizes Caltrans to lease to public agencies or private entities the use of Caltrans-owned areas above or below state highways (known as “airspace”). Generally, leases to private entities are required to be made on the basis of competitive bids and at fair market value.
3. Authorizes Caltrans to make land or airspace available, with or without charge, to a public entity to accommodate needed passenger, commuter, or high-speed rail, magnetic levitation systems, and highway and non-highway mass transit facilities.
4. Authorizes $1 per month leases of Caltrans airspace parcels to the City and County of San Francisco, Santa Barbara County, the City of San Diego, and San Joaquin County for specified emergency shelter or feeding purposes.
5. Allows Caltrans, in the instances of the airspace under the interchange of State Routes 4 and 5 in San Joaquin County and the property on the northeast corner of State Route 101 and De La Vina Street in the County of Santa Barbara, to lease those properties for emergency shelter or feeding purposes to a city, county, or other political subdivision or another state agency for emergency shelter or feeding purposes.
6. Allows the San Joaquin and Santa Barbara properties to be leased under these provisions only if there is no buyer for the property.  
7. Requires the leases to be for $1 per month and allows the lease amount to be paid in advance in order to reduce the administrative costs associated with the payment of the monthly rental fee.
8. Requires any such lease to also provide for the cost of administering the lease which may not exceed $500 per year unless Caltrans determines that a higher administrative fee is necessary.
9. Finds and declares that the lease of real property pursuant to these provisions serves a public purpose.
10. Requires a lease executed pursuant to these provisions for airspace under the interchange of State Route 4 and Interstate 5 in San Joaquin County to provide for the rescission of existing leases of this airspace between Caltrans and the City of Stockton and for the refunding of any rent paid pursuant to those leases for periods commencing on or after January 1, 1988.
11. Allows Caltrans, upon the request of the City of Stockton, to renew this lease for the period requested by the city, but not to exceed 10 years, and to, subsequent to that renewal, agree to not more than two additional renewals of not more than 10 years each.

This bill:

1. Removes the restriction that the Santa Barbara and San Joaquin property leases may precede only if there is no buyer for those properties.
2. Removes existing restrictions on the number of San Joaquin lease renewals and their duration, thereby allowing, upon request of the City of Stockton, the San Joaquin property to be leased by Caltrans for an unlimited duration and for the lease to be renewed an unlimited number of times.
3. Requires a local agency that enters a lease agreement with Caltrans under the provisions specified in this bill to comply with specified building and residential standards, as specified.
4. Makes technical conforming changes and removes obsolete provisions.

Comments

1. Author’s statement. “Caltrans entered into a lease with the City of Stockton in the 1980s so that two non-profits could provide services under a freeway interchange. The Stockton Shelter for the Homeless and St. Mary’s Kitchen operate beneath the freeway interchange and provide services to the homeless population in San Joaquin County. The demand for these services provided is expected to continue to grow, and a long-term solution is needed for them to continue serving the homeless population in San Joaquin County. This bill eliminates the renewal restrictions for this specific airspace lease, enabling Caltrans to enter into a longer-term lease with these non-profits and providing the necessary stability for them to secure capital funding.”
2. The situation in Stockton. One specific statutory exception to Caltrans’ requirement to lease airspace at fair market value involves the airspace under the State Route 4/Interstate 5 interchange in Stockton. Currently, the Stockton Shelter and St. Mary’s operate in this space under a lease entered into in the 1980s. While authorizations in statute for other airspace shelter and feeding programs include no renewal restrictions, existing law requires these entities to renew their lease with Caltrans every 10 years, effectively preventing the non-profits from making solid long-term plans and securing funding for future capital projects.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, unknown future loss of Caltrans lease revenues, likely in the range of $50,000 to $100,000 annually beginning in 2028 (when the current lease expires). This amount of foregone revenues would increase in future years to the extent that the gap between lease payments and fair market value increases. Actual lease revenue losses would depend upon the fair market lease value of the property and lease terms. Staff notes that these revenue losses would be a General Fund impact because lease revenues are currently used to partially offset General Fund payments for transportation-related debt service.

SUPPORT: (Verified 8/16/18)

City of Stockton

St. Mary’s Dining Room

Stockton Shelter for the Homeless

OPPOSITION: (Verified 8/16/18)

None received

ASSEMBLY FLOOR: 73-0, 5/17/18

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Cristina Garcia, Melendez, Muratsuchi, Santiago, Steinorth

Prepared by:

8/27/18 20:39:49

**** END ****

 THIRD READING  

Bill No: AB 2629

Author:

Amended: 8/17/18 in Senate

Vote:

SENATE TRANS. & HOUSING COMMITTEE: 12-1, 6/19/18

AYES: Beall, Cannella, Allen, Dodd, Gaines, Galgiani, McGuire, Roth, Skinner, Vidak, Wieckowski, Wiener

NOES: Morrell

SENATE APPROPRIATIONS COMMITTEE: 6-0, 8/16/18

AYES: Portantino, Beall, Bradford, Hill, Nielsen, Wiener

No Vote Recorded: Bates

ASSEMBLY FLOOR: 73-0, 5/17/18 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST:

This bill authorizes the lease of specified California Department of Transportation (Caltrans) airspace parcels in San Joaquin and Santa Barbara Counties for emergency shelter or feeding purposes regardless of whether there are other prospective buyers and removes the current restriction that the San Joaquin County airspace lease be limited to a 10-year term with two possible 10-year lease renewals.

ANALYSIS:

Existing law:

1. Grants Caltrans broad authority to acquire by eminent domain any property necessary for state highway purposes.
2. Authorizes Caltrans to lease to public agencies or private entities the use of Caltrans-owned areas above or below state highways (known as “airspace”). Generally, leases to private entities are required to be made on the basis of competitive bids and at fair market value.
3. Authorizes Caltrans to make land or airspace available, with or without charge, to a public entity to accommodate needed passenger, commuter, or high-speed rail, magnetic levitation systems, and highway and non-highway mass transit facilities.
4. Authorizes $1 per month leases of Caltrans airspace parcels to the City and County of San Francisco, Santa Barbara County, the City of San Diego, and San Joaquin County for specified emergency shelter or feeding purposes.
5. Allows Caltrans, in the instances of the airspace under the interchange of State Routes 4 and 5 in San Joaquin County and the property on the northeast corner of State Route 101 and De La Vina Street in the County of Santa Barbara, to lease those properties for emergency shelter or feeding purposes to a city, county, or other political subdivision or another state agency for emergency shelter or feeding purposes.
6. Allows the San Joaquin and Santa Barbara properties to be leased under these provisions only if there is no buyer for the property.  
7. Requires the leases to be for $1 per month and allows the lease amount to be paid in advance in order to reduce the administrative costs associated with the payment of the monthly rental fee.
8. Requires any such lease to also provide for the cost of administering the lease which may not exceed $500 per year unless Caltrans determines that a higher administrative fee is necessary.
9. Finds and declares that the lease of real property pursuant to these provisions serves a public purpose.
10. Requires a lease executed pursuant to these provisions for airspace under the interchange of State Route 4 and Interstate 5 in San Joaquin County to provide for the rescission of existing leases of this airspace between Caltrans and the City of Stockton and for the refunding of any rent paid pursuant to those leases for periods commencing on or after January 1, 1988.
11. Allows Caltrans, upon the request of the City of Stockton, to renew this lease for the period requested by the city, but not to exceed 10 years, and to, subsequent to that renewal, agree to not more than two additional renewals of not more than 10 years each.

This bill:

1. Removes the restriction that the Santa Barbara and San Joaquin property leases may precede only if there is no buyer for those properties.
2. Removes existing restrictions on the number of San Joaquin lease renewals and their duration, thereby allowing, upon request of the City of Stockton, the San Joaquin property to be leased by Caltrans for an unlimited duration and for the lease to be renewed an unlimited number of times.
3. Makes technical conforming changes and removes obsolete provisions.

Comments

1. Author’s statement. “Caltrans entered into a lease with the City of Stockton in the 1980s so that two non-profits could provide services under a freeway interchange. The Stockton Shelter for the Homeless and St. Mary’s Kitchen operate beneath the freeway interchange and provide services to the homeless population in San Joaquin County. The demand for these services provided is expected to continue to grow, and a long-term solution is needed for them to continue serving the homeless population in San Joaquin County. This bill eliminates the renewal restrictions for this specific airspace lease, enabling Caltrans to enter into a longer-term lease with these non-profits and providing the necessary stability for them to secure capital funding.”
2. The situation in Stockton. One specific statutory exception to Caltrans’ requirement to lease airspace at fair market value involves the airspace under the State Route 4/Interstate 5 interchange in Stockton. Currently, the Stockton Shelter and St. Mary’s operate in this space under a lease entered into in the 1980s. While authorizations in statute for other airspace shelter and feeding programs include no renewal restrictions, existing law requires these entities to renew their lease with Caltrans every 10 years, effectively preventing the non-profits from making solid long-term plans and securing funding for future capital projects.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee, unknown future loss of Caltrans lease revenues, likely in the range of $50,000 to $100,000 annually beginning in 2028 (when the current lease expires). This amount of foregone revenues would increase in future years to the extent that the gap between lease payments and fair market value increases. Actual lease revenue losses would depend upon the fair market lease value of the property and lease terms. Staff notes that these revenue losses would be a General Fund impact because lease revenues are currently used to partially offset General Fund payments for transportation-related debt service.

SUPPORT: (Verified 8/16/18)

City of Stockton

St. Mary’s Dining Room

Stockton Shelter for the Homeless

OPPOSITION: (Verified 8/16/18)

None received

ASSEMBLY FLOOR: 73-0, 5/17/18

AYES: Acosta, Aguiar-Curry, Travis Allen, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Caballero, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Choi, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Grayson, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Mullin, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Quirk-Silva, Reyes, Rodriguez, Rubio, Salas, Mark Stone, Thurmond, Ting, Voepel, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Cristina Garcia, Melendez, Muratsuchi, Santiago, Steinorth

Prepared by:

8/20/18 19:27:04

**** END ****

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2017 - 2018 Regular Session

AB 2629 (Eggman) - Department of Transportation: airspace under state highways: leases

Bill Summary:

AB 2629 would eliminate the renewal restrictions for a specified below-market-rate airspace lease between the Department of Transportation (Caltrans) and the City of Stockton under the interchange of State Route (SR) 4 and Interstate 5 (I-5).

*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********

The following information is revised to reflect amendments

adopted by the committee on August 16, 2018

Fiscal Impact:

Unknown future loss of Caltrans lease revenues, likely in the range of $50,000 to $100,000 annually beginning in 2028 (when the current lease expires). This amount of foregone revenues would increase in future years to the extent that the gap between lease payments and fair market value increases. Actual lease revenue losses would depend upon the fair market lease value of the property and lease terms. Staff notes that these revenue losses would be a General Fund impact because lease revenues are currently used to partially offset General Fund payments for transportation-related debt service.

Author Amendments:

Delete an obsolete provision that requires the lease provide for the refunding of any rent paid under a prior lease for any period commencing on or after January 1, 1988.

-- END --

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anthony Portantino, Chair

2017 - 2018 Regular Session

AB 2629 (Eggman) - Department of Transportation: airspace under state highways: leases

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 2629 would eliminate the renewal restrictions for a specified below-market-rate airspace lease between the Department of Transportation (Caltrans) and the City of Stockton under the interchange of State Route (SR) 4 and Interstate 5 (I-5).

Fiscal Impact:

Unknown future loss of Caltrans lease revenues, likely in the range of $50,000 to $100,000 annually beginning in 2028 (when the current lease expires). This amount of foregone revenues would increase in future years to the extent that the gap between lease payments and fair market value increases. Actual lease revenue losses would depend upon the fair market lease value of the property and lease terms. Staff notes that these revenue losses would be a General Fund impact because lease revenues are currently used to partially offset General Fund payments for transportation-related debt service.

Background:

Existing law authorizes Caltrans to lease areas above or below state highways (airspace) to public or private entities, and generally requires the leases to private entities to be competitively bid and at fair market value. Existing law authorizes Caltrans to lease specified properties in certain areas designated in statute for $1 per month and an administrative charge of up to $500 per year if the lease serves a public benefit, such as the provision of emergency shelters or feeding program purposes.

Existing law authorizes Caltrans to lease airspace under the interchange of SR 4 and I-5 in San Joaquin County to a city, county, or other political subdivision or another state agency for emergency shelter or feeding program purposes for $1 a month and an administrative fee of up to $500 per year, as specified. This provision also authorizes Caltrans to renew the original airspace lease for a period of up to 10 years, upon request of the City of Stockton, and provide for two additional renewals of up to 10 years each. A lease executed under this authority must provide for a rescission of previous leases of this airspace and for a refunding of any rent paid for periods commencing on or after January 1, 1988.

Proposed Law:

AB 2629 would delete provisions that limit the number of renewals and the duration of those renewals of an airspace lease between the City of Stockton and Caltrans on airspace under the interchange of SR 4 and I-5. The bill would also delete a provision that only allows a lease of property under the interchange of SR 4 and I-5 and another specified property in Santa Barbara County if there is no buyer for the property.

Related Legislation:

AB 3061 (Gloria), which is pending in this Committee, would authorize Caltrans to lease a specified property in the City of San Diego for purposes of permanent supportive housing or a feeding program for $1 per month and an administrative fee of up to $500 per year.

AB 3139 (Bonta), which is pending in this Committee, would authorize Caltrans to offer for lease to the City of Oakland, on a right of first refusal, up to ten parcels for purposes of an emergency shelter or feeding program for $1 per month and an administrative fee of up to $500 per year.

SB 1441 (Johnston), Chap. 143/1992, authorized Stockton to renew its airspace lease under the interchange of SR 4 and I-5 for 10 years, and two additional 10-year renewals thereafter.

Staff Comments:

Currently, there are two non-profits operating in the space under the interchange of SR 4 and I-5 pursuant to a lease with the City of Stockton that was initially entered into in the 1980s – the Stockton Shelter for the Homeless and St. Mary’s Dining Room. While similar authorizations in statute include no renewal restrictions, existing law requires these entities to renew the airspace lease with Caltrans every ten years, for a maximum of 3 renewal terms, effectively preventing the non-profits from making solid long-term plans and securing funding for future capital projects. The current lease expires on December 31, 2027. Caltrans indicates that it currently collects $512 per year in lease revenues.

The fair market value of the airspace lease under the intersection of SR 4 and I-5 is currently unknown. Based on several existing market-rate airspace leases elsewhere in the City of Stockton, the current market value is estimated to be in the range of $70,000. Since existing law authorizes the current lease through 2027, the market value may increase by the time the foregone revenues from this bill would initially be realized.

Recommended Amendments:

Existing law includes a provision, enacted in SB 1441 (Johnston, 1992), that requires a lease executed under this statute to provide for a rescission of previous leases of this airspace and for a refunding of any rent paid for periods commencing on or after January 1, 1988. In order to avoid the interpretation that the state must refund any lease payments paid by the City of Stockton over the past 30 years, staff recommends that this provision be deleted.

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SENATE COMMITTEE ON TRANSPORTATION AND HOUSING

Senator Jim Beall, Chair

2017 - 2018 Regular

Bill No: Hearing Date: 6/19/2018

SUBJECT:

DIGEST: This bill authorizes the lease of specified California Department of Transportation (Caltrans) airspace parcels in San Joaquin and Santa Barbara Counties for emergency shelter or feeding purposes regardless of whether there are other prospective buyers and removes the current restriction that the San Joaquin County airspace lease be limited to a 10-year term with two possible 10-year lease renewals.

ANALYSIS:

Existing law:

1. Grants Caltrans broad authority to acquire by eminent domain any property necessary for state highway purposes.
2. Authorizes Caltrans to lease to public agencies or private entities the use of Caltrans-owned areas above or below state highways (known as “airspace”). Generally, leases to private entities are required to be made on the basis of competitive bids and at fair market value.
3. Authorizes Caltrans to make land or airspace available, with or without charge, to a public entity to accommodate needed passenger, commuter, or high-speed rail, magnetic levitation systems, and highway and non-highway mass transit facilities.
4. Authorizes $1 per month leases of Caltrans airspace parcels to the City and County of San Francisco, Santa Barbara County, the City of San Diego, and San Joaquin County for specified emergency shelter or feeding purposes.
5. Allows Caltrans, in the instances of the airspace under the interchange of State Routes 4 and 5 in San Joaquin County and the property on the northeast corner of State Route 101 and De La Vina Street in the County of Santa Barbara, to lease those properties for emergency shelter or feeding purposes to a city, county, or other political subdivision or another state agency for emergency shelter or feeding purposes.
6. Allows the San Joaquin and Santa Barbara properties to be leased under these provisions only if there is no buyer for the property.  
7. Requires the leases to be for $1 per month and allows the lease amount to be paid in advance in order to reduce the administrative costs associated with the payment of the monthly rental fee.
8. Requires any such lease to also provide for the cost of administering the lease which may not exceed $500 per year unless Caltrans determines that a higher administrative fee is necessary.
9. Finds and declares that the lease of real property pursuant to these provisions serves a public purpose.
10. Requires a lease executed pursuant to these provisions for airspace under the interchange of State Route 4 and Interstate 5 in San Joaquin County to provide for the rescission of existing leases of this airspace between Caltrans and the City of Stockton and for the refunding of any rent paid pursuant to those leases for periods commencing on or after January 1, 1988.
11. Allows Caltrans, upon the request of the City of Stockton, to renew this lease for the period requested by the city, but not to exceed 10 years, and to, subsequent to that renewal, agree to not more than two additional renewals of not more than 10 years each.
12. Requires, under the State Constitution (Article XIX), revenues from taxes imposed on motor vehicle fuels to be used solely for the construction, maintenance, and operation of public streets and highways and public mass transit guideways, including the mitigation of their environmental effects.

This bill:

1. Removes the restriction that the Santa Barbara and San Joaquin property leases may precede only if there is no buyer for those properties.
2. Removes existing restrictions on the number of San Joaquin lease renewals and their duration, thereby allowing, upon request of the City of Stockton, the San Joaquin property to be leased by Caltrans for an unlimited duration and for the lease to be renewed an unlimited number of times.

COMMENTS

1. Author’s statement. “Caltrans entered into a lease with the City of Stockton in the 1980s so that two non-profits could provide services under a freeway interchange. The Stockton Shelter for the Homeless and St. Mary’s Kitchen operate beneath the freeway interchange and provide services to the homeless population in San Joaquin County. The demand for these services provided is expected to continue to grow, and a long-term solution is needed for them to continue serving the homeless population in San Joaquin County. This bill eliminates the renewal restrictions for this specific airspace lease, enabling Caltrans to enter into a longer-term lease with these non-profits and providing the necessary stability for them to secure capital funding.”
2. The situation in Stockton. One specific statutory exception to Caltrans’ requirement to lease airspace at fair market value involves the airspace under the State Route 4/Interstate 5 interchange in Stockton. Currently, the Stockton Shelter and St. Mary’s operate in this space under a lease entered into in the 1980s. While authorizations in statute for other airspace shelter and feeding programs include no renewal restrictions, existing law requires these entities to renew their lease with Caltrans every ten years, effectively preventing the non-profits from making solid long-term plans and securing funding for future capital projects.
3. Consistent with the State Constitution? Article XIX of the California Constitution seeks to reserve revenues in the State Highway Account (SHA) derived from motor vehicle fuels exclusively for the funding of transportation projects. As it applies to Caltrans real property rentals, the principle is that if an asset has been purchased with SHA dollars, it should either be used directly for transportation purposes or it should be sold or leased at market value, with the resulting revenues being returned to the SHA in order to make the SHA whole. The Legislature has chosen in a very small number of instances in recent years also to allow such parcels to be used at below-market rates for other public purposes, i.e., projects that serve a worthy public cause but are not necessarily of a transportation nature.

ASSEMBLY VOTES:

Floor: 73-0

Transportation: 14-0

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

RELATED LEGISLATION:

AB 1898 (Mathis, 2018) — would have required Caltrans to lease at a discount to a city or county any airspace under a freeway or other real property in a disadvantaged community for various purposes. AB 1898 died on suspense in the Assembly Appropriations Committee.

AB 3139 (Bonta, 2018) — authorizes Caltrans to lease airspace under a freeway or other real property to the City of Oakland for emergency shelter or feeding programs. AB 3139 is set to be heard by this committee on June 19.

AB 857 (Ting, Chapter 822, Statutes of 2017) — directed Caltrans to lease to San Francisco up to 10 parcels of airspace under a freeway at 30% of fair market lease value for park, recreational, or open-space purposes.

SB 120 (Kopp, Chapter 750, Statutes of 1993) — authorized Caltrans to lease to San Francisco any airspace under a freeway or property for an emergency shelter or feeding program at a rate of $1 per month.

SB 1441 (Johnston, Chapter 143, Statutes of 1992) — enabled the City of Stockton to renew its airspace lease at the SR 4 and I-5 interchange for ten years, and authorized two subsequent ten-year renewals following that first renewal.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 13, 2018.)

SUPPORT:

City of Stockton

St. Mary’s Dining Room

Stockton Shelter for the Homeless

OPPOSITION:

None received.

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Date of Hearing: May 9, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2629

Author:(Eggman) – As Amended Ver:March 19, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill eliminates the renewal restrictions for an existing airspace lease between the California Department of Transportation (Caltrans) and the City of Stockton in San Joaquin County under the interchange of State Route (SR) 4 and Interstate 5 (I-5) for an emergency shelter or feeding program.

FISCAL EFFECT:

By continuing to lease the airspace at below market-rate, revenue that may otherwise be collected for a market-rate lease of this space will be foregone. Revenue from Caltrans airspace leases is used to offset the debt service costs on transportation bonds to benefit the GF, meaning the foregone revenue has a GF impact. Based on the revenue from existing market-rate leases in Stockton, it appears that forgone revenue for a market-rate lease in Stockton will be about $70,000 annually.

COMMENTS:

1. Background and purpose. State law authorizes Caltrans to lease the space underneath elevated highways and overpasses—known as airspace leases—at market rate. Additionally, Caltrans is authorized in state law to provide airspace leases in certain areas for $1 per month and an administrative fee of up to $500 annually if the lease serves a public benefit. One such existing lease is between Caltrans and the City of Stockton to use the space underneath the interchange of SR 4 and I-5 for a homeless shelter program. The statutes that authorized this specific lease in 1988 included a provision limiting the total length of the lease to 30 years. The program has been successful and after 30 years the city would like to continue to lease the space to continue the established homeless shelter program. This bill removes the 30-year limitation and allows Caltrans to continue leasing this space to the city for a homeless shelter program.
2. Related legislation.

AB 1898 (Mathis), of the current legislative session, requires Caltrans to lease at a discount to a city or county any airspace under a freeway or other real property in a disadvantaged community for various purposes. AB 1898 is pending hearing in this committee.

AB 3139 (Bonta), of the current legislative session, authorizes Caltrans to lease airspace under a freeway or other real property to the City of Oakland for emergency shelter or feeding programs. AB 3139 is pending hearing in this committee.

Analysis Prepared by: Jessica Peters / APPR. / (916) 319-2081

Date of Hearing: April 16, 2018

ASSEMBLY COMMITTEE ON TRANSPORTATION

Jim Frazier, Chair

ABPCA Bill Id:AB 2629 (

Author:Eggman) – As Amended Ver:March 19, 2018

SUBJECT: Department of Transportation: airspace under state highways: leases

SUMMARY: Eliminates the renewal restrictions for an existing airspace lease between the California Department of Transportation (Caltrans) and the City of Stockton in San Joaquin County under the interchange of State Route (SR) 4 and Interstate 5 (I-5) for an emergency shelter or feeding program.

EXISTING LAW:

1. Authorizes Caltrans to lease to San Joaquin County, or a city or other political subdivision, the airspace under the interchange of SR 4 and I-5 for an emergency shelter or feeding program at a rate of $1 per month.
2. Enables the City of Stockton to renew its airspace lease at the SR 4 and I-5 interchange in 1988 for ten years, and authorizes two subsequent ten-year renewals following that first renewal.
3. Grants Caltrans broad authority to acquire by eminent domain any property necessary for state highway purposes.
4. Authorizes Caltrans to lease to public agencies or private entities the use of areas above or below state highways. Generally, leases to private entities have to be made on the basis of competitive bids and at fair market value.
5. Authorizes Caltrans to make land or airspace available, with or without charge, to a public entity to accommodate needed passenger, commuter, or high-speed rail, magnetic levitation systems, and highway and non-highway mass transit facilities.
6. Authorizes Caltrans to lease to San Francisco, or a political subdivision, and to Santa Barbara County, or a political subdivision, any airspace under a freeway or property for an emergency shelter or feeding program at a rate of $1 per month.

FISCAL EFFECT: Unknown

COMMENTS: The authority for Caltrans to enter into airspace leases is in existing law, but Caltrans is generally obligated to secure fair market value lease rates for airspace under freeways or other available parcels, based on the estimated highest and best use of the property. Notable exceptions to the fair market value requirement authorizes Caltrans to lease unused parcels of land below market rates to various cities and counties for the purposes of emergency shelters and feeding programs. In each of these exceptions, the Legislature has found that submarket rate leases for these particular uses serves a public purpose.

One specific exception in current law to Caltrans’ requirement to lease airspace at fair market value involves the airspace under the SR 4/I-5 interchange in Stockton. Currently, there are two non-profits operating in this space under a lease entered into in the 1980s – the Stockton Shelter for the Homeless and St. Mary’s Dining Room. While similar authorizations in statute include no renewal restrictions, existing law requires these entities to renew the airspace lease with Caltrans every ten years, effectively preventing the non-profits from making solid long-term plans and securing funding for future capital projects.

According to the author, the demand for the services provided by these entities is expected to continue to grow, and a long-term solution is needed for them to continue providing these essential services for the homeless population in San Joaquin County. This bill eliminates the renewal restrictions for this specific airspace lease, enabling Caltrans to enter into a longer-term lease with these non-profits and providing the necessary stability for the entities to secure capital funding.

Related legislation: AB 1898 (Mathis), requires Caltrans to lease at a discount to a city or county any airspace under a freeway or other real property in a disadvantaged community for various purposes. AB 1898 is set to be heard by this committee on April 16, 2018.

AB 3139 (Bonta), authorizes Caltrans to lease airspace under a freeway or other real property to the City of Oakland for emergency shelter or feeding programs. AB 3139 is set to be heard by this committee on April 16, 2018.

Prior legislation: AB 857 (Ting), Chapter 822, Statutes of 2017, directs Caltrans to lease to San Francisco up to 10 parcels of airspace under a freeway at 30% of fair market lease value for park, recreational, or open-space purposes.

SB 120 (Kopp), Chapter 750, Statutes of 1993, authorizes Caltrans to lease to San Francisco any airspace under a freeway or property for an emergency shelter or feeding program at a rate of $1 per month.

SB 1441 (Johnston), Chapter 143, Statutes of 1992, enabled the City of Stockton to renew its airspace lease at the SR 4 and I-5 interchange for ten years, and authorized two subsequent ten-year renewals following that first renewal.

REGISTERED SUPPORT / OPPOSITION:

Support

City of Stockton

St. Mary’s Dining Room

Stockton Shelter for the Homeless

Opposition

None on file

Analysis Prepared by: Eric Thronson / TRANS. / (916) 319-2093